Financial Statements - Solvay

Balance sheet
Total Equity stood at EUR 4 745 million at the end of
2008, up EUR 286 million compared with the end of 2007,
following essentially the booking of the net income for the
year (EUR 449 million) less the dividends paid during the
year (EUR 257 million).
The Group set as a major priority the maintenance of
a solid fi nancial situation, in particular in the current
economic context. Thus 2008 ended with a net debt
to equity ratio of 34% (compared with 29% at the end
of 2007). Net debt at the end of 2008 amounted to
EUR 1 597 million compared with EUR 1 307 million at
the end of 2007. Special efforts were made to manage
working capital in the fourth quarter: its level at the end
of 2008 was lower than at the end of 2007. Investments
and acquisitions in 2008 were fi nanced out of operating
cash fl ow.
The Moody’s and Standard &Poor’s long- and shortterm
ratings for Solvay are A/A2 and A1/P1 respectively.
Capital expenditures
and Research & Development
Investments in 2008 represented EUR 1 320 million,
of which about EUR 100 million were for acquisition of
the Alexandria Sodium Carbonate Company soda ash
plant in Egypt and about EUR 190 million for acquisition
of the biotechnology company Innogenetics nv. These
two amounts were not included in the announced budget
of EUR 1 091 million. Initiatives were also taken for
development of Specialty Polymers in India and China
and, in Vinyls, for capacity expansion in Thailand and
modernization of the production unit in Brazil. Other capital
projects targeted improvement in our energy performance.
The 2009 capital expenditures budget has been
adapted to the current economic crisis. It amounts to
EUR 638 million. It is based on two principles: restricting of
investments to the level of depreciation, while maintaining
those related to health, safety and the environment, and
beyond that, concentrating of investments on a very limited
number of strategic projects. These projects are oriented
by priority toward geographic expansion of the Group and
toward the options it has taken in terms of Sustainable
Development.
Research and Development (R&D) expenditures
reached EUR 564 million in 2008 of which about 75%
in the Pharmaceuticals Sector. R&D efforts by the latter
represented EUR 428 million, or 16% of sales.
The R&D expenditures budget for 2009 is EUR 590 million,
of which EUR 435 million, or about 75% of the total, is for
the Pharmaceuticals Sector.
Investments and acquisitions by
the Group in 2008 = EUR 1 320 million
393
11
410
506
Group R&D in 2008 =
EUR 564 million
37
79
20
428
Pharmaceuticals = 506
Chemicals = 410
Plastics = 393
Corporate & Business Support = 11
Pharmaceuticals = 428
Chemicals = 37
Plastics = 79
Corporate & Business Support = 20
Management Report
17
Solvay Global Annual Report 2008
Management Report