Rhodia's First Quarter of 2001 Affected by a Difficult Business Environment; Increase in Net Sales Stable EBITDA Decline in Net Income

Business Wire, April 26, 2001

Business Editors

PARIS--(BUSINESS WIRE)--April 26, 2001

Note: Key figures were converted to U.S. dollars at the exchange rate

from March 30, 2001 of 1 Euro = .883 USD.

For the first quarter of 2001, Rhodia (NYSE:RHA) announced net sales of 1,979 million euros ($1,747 million), an increase of 28 percent over the same period in 2000. On a comparable basis (constant structure and exchange rates), net sales increased by 4.3 percent; the Group was able to increase its prices by 3 percent and volumes by 1.3 percent.

During the first three months of the year, Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) increased slightly ( 1.3 percent) compared to last year, to 240 million euros ($212 million).

The combined impact of a substantial increase in energy prices, the high level of raw material prices and the integration of companies acquired in 2000, contributed to a 3-point decline in the EBITDA margin to 12.1 percent compared to 15.4 percent in 2000.

Net income declined 52 percent to 26 million euros ($23 million) compared with 2000, due primarily to higher interest and amortization expenses from the Albright & Wilson and ChiRex acquisitions.

"Although the increase in raw material prices seems to have plateaued, their persistent high level continues to weigh on Rhodia's profitability" explained Jean-Pierre Tirouflet, Chairman and Chief Executive Officer of Rhodia.

FIRST QUARTER 2001 RESULTS
(historical basis)

In millions of euros     1st Quarter   1st Quarter    Variation
                            2000          2001          00/01

Net sales                  1,544         1,979           28.2 %
EBITDA                       237           240            1.3 %
Operating income             123           108         - 12.2 %
Net income (after
 minorities)                  54            26           - 52 %
Net earnings per
 share (euro)               0.31          0.15

-- Division analysis (comparing 1st quarters of 2001 and 2000)

Net sales generated by Fine Organics rose 24.2 percent. On a

comparable basis, sales grew 12.1 percent due to higher

volumes, particularly in the agrochemical markets. The decline

in EBITDA to 9.3 percent was due primarily to the increase in

the price of organic raw materials. The progressive growth of

Rhodia ChiRex should steadily improve the profitability of the

Division.

Consumer Specialties recorded an increase in net sales from 307

million euros ($271 million) to 623 million euros ($550

million). On a comparable basis, net sales were stable (- 0.7

percent). EBITDA rose 67 percent due to the integration of

Albright & Wilson, and in the face of continued price increases

for energy and certain raw materials. Rhodia sold the European

surfactants business of Albright & Wilson to Huntsman on March

31, 2001.

Net sales by Industrial Specialties declined 1.3 percent due to

the downturn in the US automotive and construction markets. The

decline in EBITDA (down 26.2 percent) reflects the unfavorable

comparison with the first quarter of 2000, which was still

relatively untouched by the increase in raw material prices.

Polyamide's net sales grew 3.6 percent driven by a 7.7 percent

increase in selling prices at a time when volumes decreased

significantly in textile markets. EBITDA declined by 14.5

percent due primarily to the temporary shut-down of the

upstream polyamide production unit. This project will double

the unit's production capacity in order to keep pace with

growth in demand.

Services & Specialties registered strong growth both in net

sales (14.3 percent) and EBITDA (27.5 percent). The Division

increased its EBITDA margin two points to 20 percent. The

Electronics & Catalysis enterprise benefited from increased

sales generated by new products such as Eolys. Eco Services and

Acetow also benefited from strong demand.

-- Outlook

In 2001, Rhodia's results should show an inverse trend compared

with the Group's performance in 2000: after a difficult first

half, the second six months of the year should allow the Group

to generate increased profit margins. The apparent beginning of

a decline in raw material prices, the continued implementation

of Rhodia's global change initiatives and synergies related to

acquisitions should help to enhance the performance of the

Group.

Rhodia is one of the world's leaders in specialty chemicals providing products and services to the automotive, health care, fragrance, apparel, electronics, personal care and environmental markets. Rhodia generated net sales of 7.4 billion euros in 2000 and employs 30,000 people worldwide. Rhodia is listed on the Paris and New York stock exchanges.

Press Release and Press Kit available on Rhodia's web site at 8 :30 a.m (Paris Time) www.rhodia.com

Conference call on April 26th, at 4.00 pm (Paris time)

Pierre Prot, CFO, will present Rhodia's results during a conference call today at 4 :00 pm (Paris Time).

To participate, please call :

-- European dial in number :  44 (0) 208 240 8242

-- USA dial in number : 303/224-6999

Password : Rhodia

Instant number replay to call (for 48 hours) :