Speech by M' A' Michielsen,

1
Looking at Solvay Differently

• Speech by M. A. Michielsen,
• Chairman of the Executive Committee
• to the Solvay Annual General Meeting of
  Shareholders
• June 6, 2002

2
SOLVAYS STRATEGY in two basic directions

• strengthening of our LEADERSHIPin all of our
  activities, by constantly developing their
  competitiveness and ability to innovate
• faster development of PHARMACEUTICALS and of
  SPECIALTIES in the three other Sectors
  Chemicals, Plastics and Processing

3
21 STRATEGIC OPERATIONS (1)

• ACQUISITIONS
• BPs specialty polymers
• Ausimont (specialty fluorinated chemicals,
  fluorinated polymers, non-fluorinated chemicals)
• COVAs calendered and laminated foils (UK and
  USA)
• West Pharmaceuticals nasal anti-flu vaccination
  technology and American Home Products anti-flu
  vaccine production unit
• CREATIONS OR EXPANSIONS
• creation of Peptisyntha Inc. in the USA
• creation of the ESCO joint venture with Kali und
  Salz
• construction and start-up of the Vinyloop unit
  at Ferrara (Italy)
• opening by our Inergy JV of five new fuel systems
  production plants (Belgium, France, Slovakia,
  Mexico, Thailand)

4
21 STRATEGIC OPERATIONS (2)

• PARTNERSHIPS
• with BP in HDPE activities (USA and Europe)
• with Takeda/Abbott for promoting Androgel in the
  USA
• with Quintiles Transnational (clinical services
  in relation to our gastroenterology research)
• with Takuma for selling Bicarbonate in Japan
• with Henkel for selling our waterproofing foils
  in Germany, Switzerland and Austria
• CLOSURES OR SALE OF ACTIVITIES
• sale of polypropylene activities to BP
• closure of the SolVin VCM-PVC production unit at
  Zandvliet (Belgium)
• closure of "Pipes" units of our Pipelife JV in
  Norway, Germany and Poland

5
NET CURRENT EARNINGS
11 / year
M EUR
433
-7
423
2
403
15
377
16
327
10
286
15
-18
6
KEY FIGURES 2001
2001 2001/ H1/01 vs H2/01 vsM EUR 2000 H1/00
H2/00
Sales 8,725 -2 2 -5 EBIT 628 -6 -18 10 Tax
es -135 10 -28 35Net current
earnings 403 -7 -18 10 Net earnings 403 -7 -1
9 10 Cash Flow 925 -6 -14 3
7
2001 EBIT BY SECTOR

• ?PLASTICS
• (11 of 2001 EBIT)
• PROCESSING (11 of 2001 EBIT)

• CHEMICALS
• (46 of 2001 EBIT)

• ?PHARMACEUTICALS(32 of 2001 EBIT)

M EUR
23
51
- 70
stable
2000 2001
2000 2001
2000 2001
2000 2001
Processing
Pharmaceuticals
Plastics
Chemicals
8
OUR SPECIALTY POLYMERS AND COMPOUNDS
PORTFOLIOafter the acquisition of BP and Ausimont
Polyamide-imide Polysulfones Polysulfone
blends Liquid crystal polymers Polyphenylsulfon
es Polyketone compounds Polyethersulfones Polyp
hthalamide Polytetrafluoroethylene
(PTFE) Ethylene Chlorotrifluoroethylene
(ECTFE) Perfluoroalkoxy (PFA)
Perfluoromethylvinylether (MFA) Fluoroelastomers

Polyarylamide compounds Polyvinylidene
fluoride (PVDF non coating / coating) Polypheny
lene sulphide cpds Polyvinylidene chloride
Crosslinked polyethylene PP/elastomer
compounds PVC blends and alloys
Solvays products BP products Ausimont
products
9
OUR LEADERSHIP POSITION IN HIGH PERFORMANCE
POLYMERS
Solvay is No 2 worldwidein high performance
polymers (after the acquisition of BPs
Specialty Polymers and Ausimont)
10
PHARMACEUTICALS STRATEGY

• INTERNAL GROWTH of existing product portfolio,
  focused on 4 selected therapeutic areas (HRT,
  Gastroenterology, Psychiatry, Cardiology)
• ACQUISITION and/or DEVELOPMENT of new products
• ACQUISITION of medium-sized companies
• enlargement and optimisation of SALES
  FORCE,alone or in partnership
• GEOGRAPHIC EXPANSION, in particular in North
  America
• CONTRIBUTION of new molecules from RD and
  intensification of the effectiveness of RD,
  alone or in partnership

11
ONGOING PHARMACEUTICAL DEVELOPMENT
Therapeutic
Phase I
Phase II
Phase III
Filed
field
Development
Pre
-
clinical
Clinical
approved
development
development
Hormone
Combined oestrogen
Oestrogen and
ESTROGEL

therapy
and
progestogen
gel
progrestogen
patch
Female hormone
Post
-
menopause
Vasomotor
replacement
hormone treatment
symptoms (USA)
therapy (filed/USA)
PRESOMEN

vasomotor
symptoms and
osteopo
-
rosis
prenvetion
(Europe)
Gastro
-
KC11458 and
Cilansetron
-
irritable

enterology
SLV305
bowel
syndrom
CREON
Gastric motility
Pancreatic Insufficiency
(Japan)
Mental Health
SLV310, SLV313
DU125530 Depression
Controlled release (CR)
SLV314 et SLV319
DU127090 (with
Fluvoxamine
and psychosis
Lundbeck
,
Danemark
)
Single daily dosage
Psychosis and Parkinsons
treatment
SLV308
-
Parkinsons
for compulsive obsession
panic and depression
and social phobia

Cardiology
SLV306
Tedisamil
(
intraveinous
TEVETEN
Hypertension and
and oral)
Arythmia

hydrochloro
-
congestive
Moxonidinehydro
-
thiazide
(HCT)
cardiac failure
chlorothiazide
(HCT)
Hypertension
Hypertension (Europe)
(
approuved
/USA)
Immunology
Influenza vaccine
Production of
Flu prevention
influenzavaccine
by cell culture
Flu prevention
approved/NL)
12
INVESTMENTS AND RD PROGRAMS(including 2002
budget)
M EUR
RD expenses
2,968
of which 65 for Pharmaceuticals

• Acquisition ofAusimont
• BPs Specialty Polymers (exchange of assets)

1,234
1,264
1,172
932
Capitalexpenditures acquisitions
13
NET DEBT TO EQUITY RATIO(policy not to
permanently exceed 35)
14
STRONG FINANCIAL MANAGEMENT

• Moderate NET DEBT/EQUITY ratio thanks to solid
  financial structure(policy not to permanently
  exceed 35)
• Strong RATINGS from Moodys and SP reflecting
• the Groups solid financial position
• increased development pace of non-cyclical
  activities such as Specialties and Pharmaceuticals

15
KEY BALANCE SHEET ELEMENTS
2001
2000
M EUR

• Equity 3,974 3,939
• Net debt 1,172 1,050
• Net debt to equity ratio 29 27
• Return on Equity 10.9 10.2

16
ADOPTION OF INTERNATIONAL ACCOUNTING STANDARDS
QUARTERLY REPORTING

• International Accounting Standards will be used
  starting January 1, 2003
• 2002 financial statements will be presented under
  current accounting standards and under IAS
• Quarterly statements will be issued from first
  quarter 2003(with comparisons with the
  corresponding quarter of the previous year)

17
PROSPECTS

• For 2002 as a whole we are confident. Barring
  political accident, which no one can escape,
  Solvay should show a significant improvement of
  its results, owing to
• better-than-expected performances in the
  Pharmaceuticals Sector
• the restructuring of our Polymers portfolio
• the favourable influence of our acquisition of
  Ausimont
• the strong showing of soda ash
• the strong performance of our Processing Sector

18
HIGHER PROPORTION OF SPECIALTIES AND
PHARMACEUTICALS
In of Group EBIT

• Accelerated shiftto higher margin Specialties
  with the acquisitionof Ausimont
• More efficient and more competitiveEssentials

Pharmaceuticalsand Specialties
Essentials
1995
2000
2002
19
FORWARD LOOKING STATEMENT
To the extent that any statements made in this
presentation contain information that is not
historical, these statements are essentially
forward-looking. The achievement of
forward-looking statements contained in this
presentation is subject to risks and
uncertainties because of a number of factors,
including general economic factors, interest rate
and foreign currency exchange rate fluctuations
changing market conditions, product competition,
the nature of product development, impact of
acquisitions and divestitures, restructurings,
products withdrawals regulatory approval
processes and other unusual items. Consequently,
actual results may differ materially from those
expressed or implied by such forward-looking
statements. Forward-looking statements can be
identified by the use of words such as "expects,"
"plans," "will," "believes," "may," "could"
"estimates," "intends", "targets", "objectives",
"potential", and other words of similar meaning.
Should known or unknown risks or uncertainties
materialize, or should our assumptions prove
inaccurate, actual results could vary materially
from those anticipated. The Company undertakes no
obligation to publicly update any forward-looking
statements"
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