rhodia_q4_and_fy10_results_presentation_en_ 4_3
TRANSCRIPT
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Paris - February 23, 2011
Q4 & FY '10 Results
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2 Rhodia Q4 & FY '10 Results Presentation
Forward looking statements
The presentation today may includethe display of some company data
that do not directly conform to generallyacceptable accounting principles, or GAAP.
Management believes that the presentationof some non-GAAP data provides investors
with additional insight into the ongoingoperations of the business.
These measures should not be viewedas an alternative to GAAP measures
of performance.
Furthermore, these measures may not beconsistent with similar measures provided
by other companies.
This presentation contains elements that arenot historical facts, including, without limitation,
certain statements on future expectationsand other forward-looking statements.
Such statements are based on managementscurrent views and assumptions and involve known
and unknown risks and uncertainties that couldcause actual results, performance or eventsto differ materially from those anticipated.
Rhodia does not undertake to provide updatesof these statements.
Copies of all recent filings, and additionalinformation about Rhodia, are available through
our web site :
http://www.rhodia.com
Forenote:The expressions Rec. EBITDA or EBITDA included hereby in this presentation refer tothe period Recurring EBITDA before restructuing and other operating income and expenses.
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2010 HighlightsJean-Pierre Clamadieu Chairman and CEO
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2010 dividend at 0.5 per share (+100% vs. prior year)
Breakthrough step-up in profitability Record Ebitda
Strong Free Cash Flow generation
Growth, a strategic priority
Redesigned management model to drive growth
Growth strategy well underway Acquisition of Feixiang Chemicals in China
Reinforcement of business positions in fast-growing economies
2010, a year of far-reaching transformationtowards profitable growth
4 Rhodia Q4 & FY '10 Results Presentation
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555
Record Net Profit
Excellent profitability
Group share
259m
(1) yoy change in net sales volume (at constant scope and currency conversion)
Rec. EBITDA
905m
Strong business dynamics
FY 2010
Rhodia Q4 & FY '10 Results Presentation
Solid cash generation
Free Cash Flow
240m
Volume
14%(1)
Strong financial performance
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(*) Restated for perimeter changes(**) As published
Inm
Rec. EBITDA CFROI**
9.7%
5.4%
8.2%
2005 2007 2010
WACC
905
480
758
2005* 2007* 2010
Pre-crisis level
6 Rhodia Q4 & FY '10 Results Presentation
A confirmed step-up in profitability and value creation
636664
487
6.6%
5.6%
2006 2008 2009200920082006*
CFROI: [Recurring EBITDA - Tax - Maintenance Capex] /[Tangible plus Intangible Gross Assets + Working Capital]
Pre-crisis level
7.6%
Crisis Crisis
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Q4 & FY '10 ResultsPascal Bouchiat Executive Vice President & CFO
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Sustained favorable business dynamics
Rhodia Q4 & FY '10 Results Presentation
FY 10Q4 10
FY 10Net Sales
Volume& mix
1,083
1,360
Scope& Forex
Q4 '09Net Sales
Q4 '10Net Sales
116
Forextransaction
(19) Price
1,172
89
91
Net Sales inm
Volume& mix4,031
5,226
Scope& Forex
411
Forextransaction
(120) Price
4,321
290
61410%
8%
10%
14%
Q4 '09Net Sales(1)
FY 09Net Sales
(1) Like-for-like: at constant scope and currency conversion
FY '09Net Sales(1)
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Excellent profitability driven by strong business dynamicsand pricing power
Rhodia Q4 & FY '10 Results Presentation
Rec. EBITDA(1) inm
FY 10
(1) Recurring: before restructuring and other operating income and expenses
Q4 10
(140)
Volume& mix
254
487
905
FY 09EBITDA(1)
FY 10EBITDA(1)
Scope& Forex
(30)
411
Price
Rawmaterial
& energy Fixed
costs
(77)
271mVolume& mix
36
200223
Scope& Forex
Q4 '09EBITDA(1)
Q4 '10EBITDA(1)
116
(5) Price
(92)
Fixedcosts
(33)
Rawmaterial
& energy
24m
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Q4 '10 performance by Enterprise
Volumes remained strong across segments and regions(overall +18% yoy). Sequentially down due to normal seasonality
Highest growth at : Oil & Gas and Agro markets, both ~30% up yoy
Industrial segments driven by solid demand and new businessdevelopments
Feixiang fully consolidated for one month
Continued solid market demand, particularly in EngineeringPlastics +10% yoy
Force Majeure in December limited Intermediates production=> (7)m adverse EBITDA impact
Strong pricing power partly offset by unfavorable exchangerates
Inm
Recurring EBITDA(1) and margins
13% 13% 13%
3627 31
Note: Activity evolution yoy expressed in terms of volumes
6977 77
15%16%
14%
Polyamide
Q4 '09
Q4 '09Like-for-like(2) Q4 '10
Novecare
(1) Recurring: before restructuring and other operating income and expenses(2) Like-for-like: at constant scope and currency conversion
Rhodia Q4 & FY '10 Results Presentation
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Q4 '10 performance by Enterprise
Silcea
EnergyServices
Profit increase in Q4 10 from higher CER/ERU volumes,
partially offset by lower selling price
FY 10 average price @ 13.7/T
Solid business performance (+7% yoy overall) acrosssegments and particularly in Silica
Strong pricing
Inm
5746 46
53
35 37
23%
20% 20%
Recurring EBITDA(1) and margins
Q4 '09
Q4 '09Like-for-like(2) Q4 '10
(1) Recurring: before restructuring and other operating income and expenses(2) Like-for-like: at constant scope and currency conversion Note: Activity evolution yoy expressed in terms of volumes
Rhodia Q4 & FY '10 Results Presentation
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Q4 '10 performance by Enterprise
Acetow
EcoServices
Good demand leading to +13% yoy volume growth
Usual low season in Q4
Performance maintained at good levels
Volumes slightly down by (4)% yoy followingrationalization of industrial footprint. Impact compensatedby lower fixed costs
Inm
(1) Recurring: before restructuring and other operating income and expenses(2) Like-for-like: at constant scope and currency conversion
24% 18%
23% 22%23%
24%
Recurring EBITDA(1) and margins
12
10 11
303331
Q4 '09
Q4 '09Like-for-like(2) Q4 '10
Note: Activity evolution yoy expressed in terms of volumes
Rhodia Q4 & FY '10 Results Presentation
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Inm
FY10
Polyamide
Novecare
Silcea
EnergyServices
Acetow
EcoServices
Rhodia Q4 & FY '10 Results Presentation
FY07
317280
Recurring EBITDAFrom758m in 2007 to905m in 2010
Strong improvement in profitability vs. pre-crisis levels
166
109
197
138
169181
127
83
6770
FY07
FY10
+ 13%
+ 52%
+ 43%
(7)%
+ 53%
(4)%
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14 Rhodia Q4 & FY '10 Results Presentation
Q4 '09 Q4 '10 FY '09 FY '10
Net SalesOther Revenue 1,083116 1,36088 4,031446 5,226383
Recurring EBITDA*Recurring EBITDAmargin on Net Sales
20018.5%
22316.4%
48712.1%
90517.3%
Depreciation & amortization
Other gains and lossesRestructuring costs
(70)
(19)(2)
(71)
94
(271)
(23)(33)
(274)
(24)(5)
Operating Profit 109 165 160 602
Net financial chargesShare of Profit/(Loss) of associatesIncome tax
(47)1
(35)
(45)1
(29)
(190)0
(71)
(207)0
(128)
Profit/(Loss) from continuing operations 28 92 (101) 267
Profit/(Loss) from discontinued operations 0 0 (31) (5)
Net Profit/(Loss) Group Share 28 91 (132) 259
Earnings Per Share, basic (in) 0.28 0.89 (1.32) 2.55
(*) Recurring: before restructuring and other operating income and expenses
Inm
Income Statement
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15 Rhodia Q4 & FY '10 Results Presentation
Best-in-class working capital management
(1) Average quarterly actual
Operating working capital(1)
% of Total Sales
2005 2006 2007 2008 2010
9.0% 9.0% 8.6%10.3%
Q2 Q3 Q4
2010
9.2%
Q1
13.7% 13.4%
12.4%
12.3%
9.6%
2009
Continuous discipline going forwardAnnual target
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16 Rhodia Q4 & FY '10 Results Presentation
Solid Free Cash Flow generation
FY '10 FCF
240m
(1,194)
Operatingcash flow
Restructuringcash costs
Capex
Changein working
capital
(1,029)
(29)(108)
647
(270)
Acquisitions
(36)
Net DebtDecember 31, 2010
Net DebtDecember 31, 2009
(369)
Dividendand others
inm
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17
2018 20202013 2014
500
Long term maturity*Sharp debt deleveraging
230
Inm
300
Rhodia Q4 & FY '10 Results Presentation
2010
2005 2006 2007 2008 2009 2010
2.8x
1.9x2.0x
3.5x
2.1x
1.3x
Leverage Net Debt / Rec EBITDA 2005 2010
670
Sound capital structure and financial flexibility
* Bond-related outflows at maturity
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Growth ambition2011 Priorities & Perspectives
Jean-Pierre Clamadieu Chairman and CEO
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Rhodias growth ambition
1bn+Pre-CER EBITDA by 2013/15While maintaining strong
financial discipline
50m+~ 750min 2010
Pre-CERRec. EBITDA
Innovation
Externalgrowth
Organic
growth
19 Rhodia Q4 & FY '10 Results Presentation
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2011 Priorities
Quick take-off of the new organization
Mobilizing all levers for growth:
Maintain financial and operational discipline
Execute our profitable growth agenda
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Organic growth External growthInnovation
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Decentralized and simplified management model
to foster growth dynamics
Fostering entrepreneurial culture
Improving responsiveness,decision making and execution speed
Streamlined Executive Committee
Strong international management team
Empowered Global Business Units with enhanced market & customer focus
Organizational structure
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New management model geared toward growth
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Leverage sound market & geographical dynamics
Sound growth driven by eco-megatrends
Consumer Goods 5%Automotive >20%
Industry
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24 Rhodia Q4 & FY '10 Results Presentation
Capital Expenditures
2008 20102007 2009
Consumer Chemicals 2 new
surfactants & guar sites in China and
debottlenecking in USA & Europe
PA 6.6 polymerization capacity
extension in Korea and polyamide
compounding in India
Silica capacity extension in USA
& Europe
Energy Climate Care developments
in Brazil & Asia
282
[330-350]
324
270
191
Inm
2011
Organic growth Innovation External growth
Increase selectively growth capex supporting organic growth
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Acquisitions to fuel growth
Organic growth Innovation External growth
Set the grounds towards Rhodias objective to increase market share
in Indian polyamide compound market to more than 15% by 2015
Feixiang Chemicals in China
Confirmed objective to double Feixiang business by 2015
Seeking further bolt-on acquisitions
PI Industries Engineering Plastics in India*
Strong 2010 operating results. Consolidation since Nov 30th, 2010
Integration well on track
New site at Zhuhai operational in H2 11 (surfactant capacity in China up ~30%)
26 Rhodia Q4 & FY '10 Results Presentation
* Signing announced December 20th, 2010
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27 Rhodia Q4 & FY '10 Results Presentation
Sound business momentum across segments
Acetow & Eco Services
Consumer Chemicals
Sustained momentum acrosssegments driven by economicgrowth and eco-megatrends
Polyamide Materials
Ongoing solid demand
Currently, good margins prevail
Force Majeure limits Q1 11HMDA & downstream production
Advanced Materials
Strong demand for Silica andRare Earths
Energy Services
14mT CER/ERU production capacity c. 40% hedged at 13.5/T
Manage stretched production
capacity for intermediates
Leverage significant Silicacapacity expansion inQingdao (+30% ww)
Capitalize on unique
positioning in Rare Earthsformulation to reinforcesupplier of choice status
Manage new innovativelaunches and capture market
share gain opportunities Leverage Feixiang growth
platform
Progress in the developmentof renewable energy Climate
Care business
Maximize production to meetdemand
Good level of demand
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28 Rhodia Q4 & FY '10 Results Presentation
2011 Outlook
Portfolio benefiting from
eco-megatrends
2011 Rec. EBITDA objective
5% to 10% higher than in 2010On track towards our 2013/15 profitable growth ambition*
Strong global economic growth
driven by fast-growing countries
Upward trend in raw materials
& energy costs
Economic environment
(*) Pre-CER Recurring EBITDA, to exceed 1bn by 2013/15
Enjoying satisfactory
pricing power
Strong exposure to fast
growing countries
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Appendices
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Inm
31 Rhodia Q4 & FY '10 Results Presentation
Net DebtDecember 31, 2010
Net DebtSeptember 30, 2010
Q4 '10 FCF generation
Operatingcash flow
Restructuringcash costs
Capex
Changein working
capital
(368)
(9)(84)183
Others(21)
(794)
(1,194)
(11)m
(101)
Feixiangacquisitions
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New reporting as from Jan 1st 2011
Novecare Polyamide Silcea AcetowEco
Services
Energy
Services
Polyamide
Materials
Advanced
Materials
Acetow &
Eco Services
(AES)
Energy
Services
Consumer
Chemicals
SALES
Corporate
& Others
Corporate
& Others
EBITDA
SALES
EBITDA
1,094 2,145 851 540 251 203 142
166 317 197 127 67 169 (138)
1,883 1,701 539 790 203 110
276 253 114 188 179 (105)
32 Rhodia Q4 & FY '10 Results Presentation
2010 inm
Restated figures as per new organization
Market & customer focused new management model
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* Polymers & Intermediates
Market & customer-focused new management modelgeared toward growth
Markets & Customers
1,7011,089 449 345 313 226 539 251 203
33
SALES
P&I * FibrasNovecare Coatis
Rare
Earth
Systems
SilicaEco
ServicesAcetow
Energy
ServicesAroma
Performance
Engineering
Plastics
Advanced
Materials
Acetow & Eco
Services
Energy
Services
Polyamide
Materials
Business Clusters
1,701 539 790 203SALES
Consumer
Chemicals
1,883
Global Business Units
2010 in m
Rhodia Q4 & FY '10 Results Presentation
Restated figures as per new organisation
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2006 2007 2008 2009 2010
Net deficit* 1,325 1,246 1,248 1,553 1,510
Discountinterest rate
4.92% 5.55% 5.84% 5.11% 4.93%
Cash out 98 116 110 109 111
Inm
(1,510)France & Germany (1,138)Pension schemesnot fundedU.K. (250)
North America (110)
Other countries (12)As of Dec 31, 2010
(*) Pension and other employee benefits
No exceptional cash contributions anticipated in 2011
Pension assets portfolio
45% Equities / Alternative Funds
55% Bonds / LDI/ Real Estate
34 Rhodia Q4 & FY '10 Results Presentation
Stable well-managed pension situation
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Upcoming IR events
2011
Q1 2011 Earnings
May 5th, 2011
Annual Shareholders Meeting
May 18h, 2011
Q2 2011 EarningsJuly 28th, 2011
Rhodia Q4 & FY '10 Results Presentation
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Q4 & FY '10 ResultsInvestors & Analyst Meeting