Financial Statements - Solvay

72
Solvay Global Annual Report 2008
(2) Financial data by region
Group sales by market location are as follows:
EUR Million 2007 % 2008 %
Europe 5 400 56 % 5 370 57 %
NAFTA 2 272 24 % 2 116 22 %
Mercosur 793 8 % 826 9 %
Asia-Pacifi c and other 1 106 12 % 1 178 12 %
Total 9 572 100 % 9 490 100 %
Invested capital and capital expenditure by geographical segment are shown below.
Invested capital Capital expenditure
EUR Million 2007 % 2008 % 2007 % 2008 %
Europe 5 987 77 % 5 776 71 % 578 74 % 1 060 80 %
NAFTA 1 117 14 % 1 519 19 % 74 10 % 74 6 %
Mercosur 395 5 % 449 6 % 74 10 % 152 11 %
Asia-Pacifi c and other 335 4 % 334 4 % 50 6 % 33 3 %
Total 7 834 100 % 8 077 100 % 777 100 % 1 320 100 %
Invested capital includes the non-current assets and working capital as defi ned in the fi nancial data per Sector above.
(3) Gross margin
Expressed as a percentage of sales, gross margin is equal to 32.8 % in 2008, compared to 34.8 % in 2007.
Gross margin includes EUR 53 million related to milestones for the out-licensing of LUVOX ® (EUR 28 million), royalties
for the co-promotion agreement for MARINOL ® (EUR 12 million), royalties for the co-promotion agreement for
SIMCOR ® (EUR 5 million), rebates and returns (EUR -22 million) and the launch of TRILIPIX TM sales in the last quarter
(EUR 30 million). In 2007, it included EUR 8 million for the settlement of the lawsuit fi led against Impax Laboratories
concerning CREON ® .
It includes also write-downs on inventories of fi nished goods in the Vinyls activity (EUR -29 million) to align the book value
of inventories with PVC selling prices.
(4) Commercial and administrative costs
The Group’s commercial and administrative costs increased overall by 2.9 % between 2007 and 2008.
In the Pharmaceuticals Sector, they increased by 5 %, mainly due to promotional expenses for SIMCOR ® (EUR 50 million)
and a write-down on a receivable from Jazz Pharmaceuticals (EUR 10 million), while a EUR 11 million write-down on trade
receivables from the Russian authorities was reversed in 2007.
In the Chemicals and Plastics sectors, commercial and administrative costs decreased by respectively 5.5 % and 3.7 %.
(5) Research and development costs
These have increased by 1.4 % versus last year.
Research costs are higher (3.2 %) in the Pharmaceuticals Sector and lower in the Chemicals Sector (-0.9 %) and in
the Plastics Sector (-8.4 %).