Recurring EBITDA amounted to €174 million in Q3 2009, compared to €170 million in Q3 2008. This resulted from satisfactory pricing power (€21 million positive net price impact) combined with operational improvements and favorable Forex, more than offsetting the year-on-year volume decline.

Operating Profit was €104 million in Q3 versus €65 million a year earlier.

Loss from discontinued operations amounted to €20 million, essentially due to a one-off charge linked to a previously divested activity. This is to be compared with a Profit of €34 million in Q3 2008 mainly due to a capital gain on the Isocyanates disposal.

The Net Profit Group Share totalled €14 million compared to €56 million in the same period last year.

Earnings per Share Group share (basic) were €0.14 versus €0.55 in Q3 2008.

2. Effective operating cash management

In Q3 2009, the Group continued to post a best-in-class Operating Working Capital ratio of 8.7% on Total Sales compared to 14.6% in Q3 2008 and 9.6% in Q2 2009. This was achieved thanks to continued tight supply chain management.

Capital Expenditure decreased in Q3 to €34 million from €71 million a year earlier. Amounting to €130 million year-to-date, capital expenditure is in line with the full-year forecast of €180 to 200 million. In a context of weak market conditions, investments in capacity increases were discontinued while those related to operational performance, safety, environment and Research & Development were maintained.

Rhodia generated strong Free Cash Flow of €112 million in Q3, amounting to €302 million year-to-date, driven by the EBITDA generation and the reduction of its Operating Working Capital.

During the third quarter, Consolidated Net Debt was reduced by €125 million to €1,073 million as of September 30, 2009, compared to €1,198 million on June 30, 2009.

3. Rhodia well prepared to emerge stronger from the crisis

Confirmed cost savings expectations

Since the beginning of 2009, the Group has achieved €96 million in fixed cost savings, including €29 million in Q3. These cost savings resulted from a combination of structural cost competitiveness programs and short term measures deployed during the period. For the full year, the Group expects to achieve savings of €120 million.

Focus on pricing power and cash generation

The continued strong internal focus on cash during the year paid off. Despite the downturn, the Group was able to successfully defend its margins, generate a strong level of Free Cash Flow and reduce its debt.

Favorable momentum in emerging markets

As of September 2009, Net Sales in emerging countries (Latin America and Asia-Pacific) represented 45% of the Group’s Net Sales. This exposure to emerging markets, especially Brazil and China, is a core strength for the Group, which should enable it to take advantage of the positive growth expectations in these regions for 2010.

Healthy innovation pipeline focused on sustainable development

Rhodia recently launched a series of products to bring about reductions in automotive CO2 emissions. This illustrates one of Rhodia’s innovation top priorities – focusing on solutions to fight climate change. At the recent Frankfurt Motor Show, the Group showcased several products including advanced polyamide materials designed to reduce vehicle weight, a new generation of high performance silica for energy-efficient tires and new solutions for pollutant emissions control.

4. Overview by Enterprise

Polyamide

Rhodia Polyamide serves the automotive, electricals, electronic components, sportswear and leisure markets. Its expertise in the polyamide chain has allowed it to develop activities upstream in intermediates and polymers and downstream in engineering plastics.

Polyamide experienced sequential improvement in demand in all geographic zones and segments. The business has also benefited from the current tight supply situation in intermediates. Recurring EBITDA reached €52 million, a significant recovery compared to the Q2 2009 figure of €6 million. This resulted from higher volumes and corresponding operating leverage, satisfactory pricing power, cost competitiveness actions and capacity rationalization efforts in adipic acid throughout the industry worldwide. In Q4, the Enterprise’s activity levels are expected to stay at a level similar to Q3 2009. Furthermore, Polyamide should continue to benefit from satisfactory pricing power.

Novecare

Rhodia Novecare provides high-performance products and solutions to a wide range of industries including cosmetics, detergents, agrochemicals and oil, as well as industrial applications.

Novecare suffered from a 24% volume contraction compared to an exceptionally high Q3 2008. The Home & Personal Care segment remained resilient and Industrial applications showed progressive recovery. However, in both the agrochemicals market and Oilfield chemicals business, demand was weak. The Enterprise nonetheless continued to report good pricing power. In Q4, business dynamics are expected to be in line with those of the prior quarter, but a slight demand risk linked to customer inventory optimization might appear at year-end.

Silcea

Rhodia Silcea produces high performance silicas, rare earth-based materials and diphenols to serve the automotive emissions reduction, tire, lighting, electronics, flavours, fragrances and various other industrial markets.

Silcea reported a sequential volume recovery in all segments. Volume decline was limited to 12% compared to Q3 2008, in contrast with the 30% volume drop reported in Q2 2009. In addition, the Enterprise benefited from good pricing power. In Q4, the improved Q3 trend is expected to continue.

Energy Services

Rhodia Energy Services is responsible for the Group’s energy supply and the management of Rhodia’s projects related to the reduction of greenhouse gas emissions.

Energy Services’ CER production is in line with the 13 million tons estimated for the full year. Almost 90% of those 13 million tons are hedged at an average price of 14.3€ per ton. In Q4, the Enterprise expects the usual favorable seasonality in CERs. However, the last batch of CERs expected in December might be postponed to Q1 2010 due to the UNFCCC (United Nations Framework Convention on Climate Change) lengthened CER issuance process.

⁽¹⁾ Like for like: at constant scope and currency conversion

⁽²⁾ Before restructuring and other operating income and expenses

Acetow

Rhodia Acetow is a global producer of filter tow, mainly used for making cigarette filters.

Acetow experienced a slight increase in volumes year-on-year. The Enterprise benefited from sustained good pricing, supported by its product and service quality, and took full advantage of the results of its cost competitiveness programs launched in 2008. In Q4, Acetow should continue to benefit from a strong business performance.

Eco Services

Rhodia Eco Services offers sulfuric acid regeneration services to chemical manufacturers and oil refiners in North America.

Eco Services’ volumes were slightly down by 2% on a year-on-year basis. As anticipated, recurring EBITDA decreased due to an indexation mechanism lag effect. In Q4, Eco Services should experience a more pronounced seasonal downturn.

5. Outlook

Although 2010 trends remain uncertain, Rhodia expects overall demand in Q4 to be similar to the Q3 level. Under current economic conditions, recurring EBITDA is anticipated to be greater than €160 million. This takes into account the risk of postponement to Q1 2010 of the last batch of CERs.

Since the beginning of the year, Rhodia has successfully achieved structural operational improvements across the board, leading to a lower break-even point and working capital requirements. This has resulted in a strong generation of Free Cash Flow and a significant decrease in debt.

Capitalizing on its 2009 achievements, Rhodia is well prepared to emerge stronger from the crisis.

⁽¹⁾ Like for like: at constant scope and currency conversion

⁽²⁾ Before restructuring and other operating income and expenses

⁽³⁾ United Nations Framework Convention on Climate Change

Safe Harbor for forward looking statements

This press release 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.

Rhodia is an international chemical company resolutely committed to sustainable development. As a leader in its businesses, the Group aims to improve its customers’ performance through the pursuit of operational excellence and its ability to innovate. Structured around six Enterprises, Rhodia is the partner of major players in the automotive, electronics, flavors and fragrances, health, personal and home care markets, consumer goods and industrial markets. The Group employs around 14,500 people worldwide and generated sales of €4.8 billion in 2008. Rhodia is listed on NYSE Euronext.

For further details, please visit our institutional website at www.rhodia.com

Upcoming events

• Journalists conference call on November 4, 2009 (in French) at 9:00 CET

Host: Jean-Pierre CLAMADIEU, Chairman and Chief Executive Officer

• Investors & Analysts conference call on November 4, 2009 (in English) at 11:00 CET

Hosts: Jean-Pierre CLAMADIEU, Chairman and Chief Executive Officer

Pascal BOUCHIAT, Chief Financial Officer

Live webcast: Rhodia website www.rhodia.com

• Capital Market Day on November 20, 2009 (London)
• Rhodia’s annual results will be published on February 24, 2010

Results Fact Sheet: Q3 & YTD Sept '09

⁽¹⁾ including intercompany sales elimination

* Unaudited

Results Fact Sheet: Q3 ‘09

* Unaudited

Results Fact Sheet: YTD Sept ‘09

* Unaudited

Results Fact Sheet: Quarterly results

* Unaudited

** Reviewed by auditors

CONSOLIDATED INCOME STATEMENTS AS OF SEPTEMBER 30, 2009

(*) Unaudited

CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2009

(*) Unaudited

(*) Unaudited

CONSOLIDATED STATEMENTS OF CASH FLOWS AS OF SEPTEMBER 30, 2009

(1) The margin call agreements are standardized credit risk reduction contracts, which are concluded with the clearing house of an organized market or bilaterally by private contract with counterparty.

(*) Unaudited

Rhodia
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