Pharmaceuticals Sector - Solvay

86
Solvay Global Annual Report 2005
The Group closely examines any new insurance coverage solution, so as to limit the fi nancial consequences of
incidents that could have a major impact on its assets, profi ts and its third party liability.
The number of lawsuits in the United States relating to female hormone therapy is reducing, with a far from negligible
number of plaintiffs withdrawing their suits before any judgement on the merits. There are no new developments in
the discussions with the U.S. Food and Drug Administration on the administrative status of ESTRATEST ® .
(30) Net indebtedness
The Group’s net indebtedness is the balance between its fi nancial debts and available cash and cash equivalents. It
rose by EUR 885 million from EUR 795 million at the end of 2004 to EUR 1 680 million at the end of 2005 following
the acquisition of the Fournier group in July 2005 for EUR 1 183 million.
EUR million 2004 2005
Financial debt 2 198 2 129
- Cash and cash equivalents -1 403 -449
Net indebtedness 795 1 680
The Group’s net debt to equity ratio increased from 21% at the end of 2004 to 43% at the end of 2005.
Financial debt
Financial debt contracted by EUR 69 million from EUR 2 198 million to EUR 2 129 million, mainly due to the
prepayment in 2005 of the balance (USD 105 million) of the USD 300 million private placement.
Short-term fi nancial debt rose by EUR 796 million, whilst long-term fi nancial debt was down EUR 865 million. This
is explained by the reclassifying of the EUR 700 million bond issue at the end of 2005 maturing in 2006 under debt
maturing within one year (included under short-term fi nancial debt).
EUR million 2004 2005
Subordinated loans 7 7
Bonds 1 585 807
Long-term fi nance lease obligations 19 15
Long-term debts to fi nancial institutions 171 147
Other long-term debts 67 8
Amount due within 12 months (shown under current liabilities) 52 798
Other short-term borrowings (including overdrafts) 297 347
Total fi nancial debt (short and long-term) 2 198 2 129
The fi nancial debt is repayable as follows :
on demand or within one year 349 1 145
in year two 816 25
in years three to fi ve 223 148
beyond fi ve years 810 811