2010 Annual Report
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Shaping our Future Opening New Frontiers Solvay Annual Report 2010 SOLVAY Aerospace. Solvay provides innovative solutions to the aerospace industry, which is an outlet for the Group’s high performance polymers. Contents 01 Group 01 Highlights 02 Chairmen’s Message 05 Strategy 08 Taking hold of the future 10 Strategic positions 12 Management Report and 12 Management Report Financial Statements part 1 19 Financial Information per Share 20 Activities 20 Chemicals Sector 28 Plastics Sector 36 New Business Development 42 Responsibilities 42 Human Resources 46 Sustainable Development 54 Executive Committee and General Managers 56 Management Report and 56 Table of contents Financial Statements part 2 57 Financial Statements 169 Corporate Governance Statement 198 Glossaries 201 Shareholders’ Diary Key Figures – Solvay group Financial data 2006 2007 2008 2009 2010 EUR million EUR million USD million5 Operating situation Sales 9 399 9 572 9 490 8 485 7 109 9 499 REBITDA1 (*) 1 568 1 662 1 436 1 439 1 051 1 404 REBIT2 (*) 1 099 1 192 965 969 633 846 REBIT as % of sales 12% 12% 10% 11% 9% 9% Net income 817 828 449 553 1 823 2 436 Total depreciation and amortization3 522 593 417 496 717 958 Cash fl ow6 1 339 1 421 866 1 049 2 540 3 394 Capital expenditure 858 777 1 320 567 538 719 Research expenditure 563 556 564 555 181 242 Personnel costs 2 136 2 081 1 981 2 016 1 339 1 789 Added value 3 628 3 921 3 083 3 306 4 065 5 432 Financial situation Shareholders’ equity 4 456 4 459 4 745 5 160 6 839 9 138 Net debt7 1 258 1 307 1 597 1 333 -2 902 -3 878 Net debt / shareholders’ equity 28% 29% 34% 26% NA NA Return on Equity (ROE) 19% 18% 9% 11% 27% 27% Gross distribution to Solvay shareholders 232 240 241 241 240 321 Persons employed Persons employed at December 314 29 258 28 340 29 433 28 204 16 785 – (*) The cost of discounting provisions (47 in 2006, 42 in 2007, 43 in 2008, 64 in 2009 and 52 in 2010) has been transferred from operating to fi nancial charges given the fi nancial nature of this item. 1. REBITDA = REBIT before depreciation and amortization. 2. REBIT = Recurrent EBIT. 3. Including impairment of: -48 in 2006, -123 in 2007, 54 in 2008, -25 in 2009 and -300 in 2010. 4. In full-time equivalents on December 31 of the year; on January 1 of following year for 2006 and 2007. 5. Exchange rate: 1 EUR: 1.3362 USD at 31/12/2010. 6. Net income + total depreciation and amortization. 7. Liabilities (+) / Assets (-) Expenditure for the future Total Group capital expenditure, acquisitions and R&D 2010 = EUR 719 million Total capital expenditure & acquisitions 2 500 by Sector in 2010 [EUR million] 2 250 12 12 2 000 1 884 1 750 564 219 JChemicals 1 500 1 421 JPlastics 1 333 296 JNBD 1 250 563 556 1 320 1 122 JCorporate 1 000 555 770 750 719 858 R&D by Sector in 2010 [EUR million] 777 181 145 500 625* 567 538 250 45 37 JChemicals 0 JPlastics 2006 2007 2008 2009 2010 2011 Budget JNBD JCapital expenditure & acquisitions 26 JPharmaceuticals* * Calculated using equity method for joint JR&D ventures. 74 * Sold on February 15, 2010 Key fi nancial data of Group’s continued operations Sales 2010 = EUR 6 796 million Sales by Sector in 2010 4000 3 695 3 784 3000 3 096 3 012 2 982 44% 2 713 56% JChemicals 2000 JPlastics 1000 J2008 J2009 0 J2010 Chemicals Plastics REBIT 2010 = EUR 602 million [Including “Corporate & Business Support”: REBIT* by Sector in 2010 EUR -45 million and “New Business Development”: EUR -26 million] * Excluding “Corporate & Business Support”: EUR -45 million and “New Business Development”: EUR -26 million 400 360 300 46% 312 54% 268 264 JChemicals 238 J 200 Plastics Employees by Sector in 2010 100 86 J2008 1 778 J2009* 0 J2010 Chemicals Plastics 8 390 * Restated to refl ect the transfer of the cost of discounting provisions from operating expenses to JChemicals fi nancial expenses. 6 617 JPlastics Employees in 2010 (Dec. 31, 2010): 16 785 people JCorporate A global presence Sales 2010 = EUR 6 796 million Employees in 2010 (Dec. 31, 2010): 16 785 people 1090 JEMEA 1 091 JEMEA: 12 673 14% 51% Western Europe JNorth America: 1 931 5% Eastern Europe JMercosur: 1 091 1 931 3% Other country EMEA JAsia-Pacific: 1 090 27% 59% JThe Americas 16% North America 12 673 WORLD: 16 785 11% Mercosur JAsia-Pacific Customer markets* Sales 2010 = EUR 6 796 million Construction and architecture 23% Packaging 5% Chemical industry 13% Consumer goods 5% Water and the environment 7% Automobile industry 4% Electricity and electronics 7% Paper 4% * Excluding Inergy Glass industry 6% Human health 3% Automotive Systems, following purchase Detergents, cleaning and Human and animal food processing 2% by Plastic Omnium of Solvay’s stake in this hygiene products 5% Other industries 14% company in 2010. 2010 Highlights February 10 February 11 April 7 Antwerp (Belgium) Asia Solar Impulse Solvay to build a giant fuel cell, one Solvay announces the launch of three Maiden fl ight of the Solar Impulse, of the most powerful in the world, at RD&T centers in Asia to strengthen its made possible by innovative materials SolVin’s Antwerp (Belgium) site. presence in this growing region. and know-how from Solvay. January 7 EPICEROL® February 16 Vinythai prepares to build an Pharmaceuticals epichlorohydrin plant in Thailand, Solvay closes the EUR 5.2 billion sale based on EPICEROL®, a biosourced of its pharmaceuticals business to production technology developed by Abbott. Solvay. April 28 May 21 Bernburg (Germany) ACAL Energy Solvay reduces the CO2 impact of Solvay increases its stake in fuel cell its Bernburg (Germany) plant by developer ACAL Energy. generating energy from waste-derived June 17 fuels. Inergy Automotive May 5 Systems 1 United States Agreement to sell Solvay’s stake in United States: a new plant converts Inergy Automotive Systems to Plastic soda ash waste into bicarbonate for Omnium. fl ue-gas treatment. June 25 August 4 September 2 Solvay and Arkema Iridos TECNOFLON® Arkema and Solvay untie their vinyl Iridos, a joint venture of Solvay To meet growing demand, Solvay production joint ventures in France and Nepes, starts producing pigment ups TECNOFLON® production and Spain. pastes for liquid crystal displays capacity at its Spinetta Marengo in Korea. (Italy) site. July 27 RusVinyl The European Bank for Reconstruction September 5 and Development (EBRD) announces Wet chemicals EUR 52 million investment in RusVinyl, Solvay expands its high-purity wet Solvay’s PVC joint venture in Russia. chemicals business on the Chinese electronics market. September 7 October 10 Polyera China Solvay expands its printed electronics Solvay to expand its compounding development with a stake in Polyera. capacity for specialty polymers in China. September 23 Horizon October 14 Solvay details its Horizon project “Solvay Science for for a new organization to secure Innovation 2010” sustained growth. The Solvay Science for Innovation 2010 conference is attended by nearly 200 researchers and two Nobel Prize winners. October 26 November 9 December 14 Korea Tavaux (France) Epichlorohydrin Solvay and its Korean partners Solvay decides to convert from EPICEROL® process: Solvay launches invest EUR 26 million in a venture mercury-based to higher-effi ciency project to build an epichlorohydrin capital fund for advanced materials membrane electrolysis at its Tavaux production plant in China. in Korea. (France) site. December 18 December 1 Vinythai REACH Solvay increases its stake in REACH: Solvay has successfully Vinythai from 50% to 58%. registered 170 dossiers, representing 82 different chemical substances. Solvay Annual Report 2010 2 Opening new Frontiers Solvay is pursuing its strategic transformation. ourselves in the fl ow of history. We The goal is to make the Group into a are evolving in a complex, fl uctuating world, shaken by deep crises. Major champion in sustainable chemistry. Solvay changes, however, are clear to is creating a new organization to become see. Certain of these megatrends quicker, more agile. The signifi cant evolution directly affect us. We need to detect of its industrial base continues. them, understand them, measure their scope and adapt to them. Solvay is transforming itself, Solvay the sales of its pharmaceuticals The megatrends that are is changing because the world is activities and of its shareholding fashioning tomorrow’s world changing. We are changing because in Inergy Automotive Systems we want the Group to remain strong give Solvay the resources with First among these is global warming: and successful. Our duty is to which to successfully transform an enormous, indisputable and optimally position ourselves to secure itself. Also during the past year we fundamental reality. Researchers the Group’s long-term future through launched a wide-ranging project to regularly present new knowledge sustainable and profi table growth. modernize the Group’s structures. that confi rms the changes affecting the global climate system. This is 2010 was a crucial year in redirecting As Solvay has done ever since it was increasing the pressure on the general the business portfolio, now that founded in 1863, we are positioning structure of manufacturing industries, Solvay Annual Report 2010 Chairmen’s Message which consume large amounts of effectively to the new challenges. This impairments of industrial assets, energy and emit greenhouse gases. organization, proposed in September restructuring charges (including 2010, formally approved by the Board a charge of EUR 74 million linked On top of this comes the ever of Directors in February 2011 and to the reorganization project heavier use of our planet’s natural to be phased in before the end of Horizon) and the capital gain on resources, with demand rapidly 2012, will promote the empowerment the sale of our stake in Inergy outstripping supply, whether for and motivation of our employees Automotive Systems.