Credit Suisse
European Leveraged Finance
ConferenceBarcelona, October 2007
Investor Relations:
James Palmer
Tel: +33 (0)1 53 56 64 89
Mob:+33 (0)6 07 46 84 66
2
This presentation contains elements that are not historical facts, including, without limitation, certain statements on future expectations and other forward-looking statements.
Such statements are based on management’s current views and assumptions and involve known and unknown risks and uncertainties
that could cause actual results, performance or events
to differ materially from those anticipated.
Copies of all recent filings, and additional information about Rhodia, are available
through our web site:
http://www.rhodia.com
Forward looking statements
and Regulation G
The presentation today may include the display of some company data
that do not directly conform to generally acceptable accounting principles, or GAAP.
Management believes that the presentation of some non-GAAP data provides investors with additional insight into the ongoing
operations of the business.
These measures should not be viewed as an alternative to GAAP measures of performance.
Furthermore, these measures may not be consistent with similar measures provided
by other companies.
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Rhodia at a glance
� A solid Group with a sound financial structure
� A strong, focused portfolio and limited cyclicality
� Worldwide leadership positions in high growth markets
4
Rhodia beats ambitious 2006 targets
2006Delivered
2006 Targets
Net Income (Loss)
Group Share
Net debt/
Recurring EBITDA
Recurring EBITDA
margin
Positive
< 2.9x
> 13 %
€62m
2.8x
14.2 %Profitability gap vs
peers closed
2008Targets
< 2x
> 15 %For the chemical
business
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Rhodia, a leader in its core businesses
Performance Materials Organics & ServicesFunctional Chemicals
Novecare19% of Group Net Sales12.9% Recurring EBITDA margin
Polyamide39% of Group Net Sales14.3% Recurring EBITDA margin
Eco Services4% of Group Net Sales33.3% Recurring EBITDA margin
Acetow9% of Group Net Sales19.5% Recurring EBITDA margin
Silcea9% of Group Net Sales20.4% Recurring EBITDA margin
Organics17% of Group Net Sales10.3% Recurring EBITDA margin
• Strengthen global leadership
• Expand in Asia
• Grow through innovation
• Take advantage of consolidation opportunities
• Generate free cashflow
H1 2007 Net Sales & Recurring EBITDA margins data
Energy Services3% of Group Net Sales
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The strength of Polyamide
Engineering Plastics:The growth engine
Intermediates:Sustainable leadership
• Best in class competitive position in key intermediates
• Tight supply/demand situation for key intermediates (ADN) expected to last until at least 2011/2012
• Established growth roadmap with strong focus in Asia
• 2008 Polymerisation in South Korea,
• 2009 HMD in China
• 2008 Phenol in Brazil
• Feasibility study of new ADN capacity under way
• Strong leadership built on:
• Innovation
• Customer intimacy
• A highly competitive industrial base and global network
• Market growth driven by substitution from metals
• Leadership position in high growth Asian countries and key markets
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Innovation: the success behind
Novecare & Silcea
Silica Systems
Rare Earths
• Successful business model based on:
• Innovation
• Low capital needs
• Strong market positions in:
• Home & Personal Care
• Agrochemicals
• Industrials
• Promising opportunities currently being tackled:
• Green solvents
• Enhanced oil recovery
Novecare
Innovation and partnerships with customers
• Inventor, leader & only true worldwide player inHigh Dispersible Silica for fuel efficient tyres
• Strategic partnerships with leading customers
• Double digit market growth expected
Silcea
• Global leader in:
• Key materials for automotive emission control systems (Alumina acquisition)
• High performance phosphors (Red, Blue, Green) for LCD & plasma screens, low consumption lamps
• Innovation driven with more than 40% of new products less than 5 yrs old
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Acetow & Eco Services: Non cyclical
cash providers
Eco Services:Cash generation
Acetow:Cost competitiveness
• Strong n° 3 position in a consolidated industry
• Tight market with few players
• Growth from increase in filtered cigarettes in Asia and Russia
• Strengthen cost competitiveness due to USD denominated market
• Market leader in sulphuric acid regeneration in USA
• Sustainable strong margins
• Prices indexed to natural gas prices
Excellent in service to customers
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Delivering on the Organics upside
• Diphenol Chain
• Grow profitably: Ramp up of new Chinese plant ongoing
• Remaining Fine organics businesses including analgesics
• Restructure
• Assess position in portfolio
• Isocyanates (TDI, HDI)
• Improve reliability & competitive position
EBITDA Margin
Excellent progress to date3 priorities
2004 2005
3.7%
2006
8.5%
2.5%
Recurring EBITDA margin
10.3%
H1 2007
Target:Group Level
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Optimising CER cash generation
Maximise value of CERs
Ongoing review of hedging/monetization options
11-13mt p.a. starting 2007
• 2007: all CER sales secured for 2007 at average price of €14/t
• 2008: 5mt sold forward at €15/t
• 2009-2012: 1.5mt sold forward
Key events to come:
• Activation of International Transaction Log (ITL)
• Clarification regarding post Kyoto (2013…)
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2006 & 2007 Refinancing initiatives
*Includes an equity portion of €124m related to the IFRS treatment
Bond maturity profiles as at 30.06.07
1 076
2006 FRN
EURO595*
Convertible
EURO
2007
2008
2009
2010
2011
2012
2013
2014
€mMaturity profile of HY debt as at 30.09.06
467
2003 SUB
USD & EURO
2003 Senior
USD & EURO
2004 Senior
EURO
€969m
2004 Senior USD
€319m
1 288
2007
2008
2009
2010
2011
2012
2013
2014
3 steps to refinance
Rhodia’s HY debt1
2 3
Cash tender offer: $421m 10 ¼ % Senior Notes
due 2010
Cash tender offer: €118m 10.50% Senior Notes due 2010, €700m 8.000% Senior Notes due 2010, and $200m 7.625% Senior Notes due 2010
Redemption: €235m 9.25% senior subordinatednotes due 2011 and $302m 8.875% senior
subordinated notes due 2011
Financed by disposal proceeds
Financed by € 1.1bn Senior Floating Rate
Notes due 2013 coupon Euribor + 275 bps
(swapped 6.5% until 2009)
Financed by €595m OCEANE due 2014 at a
0.5% cash coupon rate and a 2.35% yield to
maturity
2
1
3
Oct 2006
Feb 2007
May 2007
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Financial structure strengthened &
flexibility increased
� Financial headroom increased and reduced cost of debt
� Net debt / recurring EBITDA LTM ratio at June 30th 2.2 x
� Refinancing initiatives
� Average cost of financial resources down to 5.1 % from 8.4%
� €595m convertible bond issued matures 2014
� €1100m FRN swapped for 3 years matures 2013
� Long term maturity profile improved
�Greater flexibility
� Syndicated credit facility of €600 million maturing on June 30, 2012 replaces €300 million multicurrency
credit and guaranty facility maturing on June 30, 2008.
� more flexible contractual conditions
� reduced cost
� undrawn as at June 30, 2007
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2007: Continued momentum
� Achievements in H1 2007
� Profitability recovery continues
� Recurring EBITDA up 24% to €408m
� Margins up to 16% (14% for the chemical business excluding CERs)
� Net profit up 51% to €62m
� Positive free cash flow in Q2 of €83m
� Major H1 improvement: €(12)m compared to €(114)m in H1 2006
� Refinancing successfully completed to reduce interest costs and extend
maturity
� Investment initiatives launched to drive sustainable profitable growth
� Capacity additions
� Bolt on acquisitions
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2007: Looking forward
• Solid volumes expected
• Pricing power remains strong
• Raw material & energy costs to remain high and volatile
• Unfavorable Forex environment
Currentmarketconditions
• Strong growth in Recurring EBITDA
• Return to positive Free Cash Flow
2007 outlookconfirmed
• Recurring EBITDA margin > 15% for the Chemical business
• Establishing and maintaining a sound financial structure
with a Net Debt / Recurring EBITDA ratio below 2
2008 targets
Credit Suisse
European Leveraged Finance
ConferenceBarcelona, October 2007
Investor Relations:
James Palmer
Tel: +33 (0)1 53 56 64 89
Mob:+33 (0)6 07 46 84 66