2008 results · (Sanofi-Aventis maintainin g 15% of the capital) – PCAS America Inc created z 2005 Sale of Creapharm z 2006 PCAS Biosolution created – interest taken in Protéus

19 February 20092008 results

1 | PCAS GROUP

PCAS - February 2009 4

PCAS GROUPA clearly defined position focused on

2 activities

PharmaceuticalSynthesis

Fine SpecialityChemicals

Manufacturer of complex, very high added value molecules, sold around the world and applying leading-edge technology


PCAS GROUP An international company

PacificAsia 18.4%

Europe 35.5%

France 32.2%

Others 3.8%

North America10.1%

Net Sales as of 31st

December 2008: 168.4 M €

Pharmaceutical Synthesis : 101.3 M€Fine Speciality Chemicals : 67.1 M€


PCAS GROUPA portfolio of first-class customers

Pharmaceutical Synthesis


PCAS GROUPA portfolio of first-class customers

Perfumery-Flavours-Cosmetics Performance Chemicals

New Technologies

http://www.total.com/fr/home_page/

http://www.fuchs-oil.fr/home.jsp

http://www.arkema.com/sites/group/fr/home.page


PCAS GROUP History

1962 PCAS created by 2 French entrepreneurs1982 PCAS joins Stauffer Chemicals then Akzo Nobel1992 The Dynaction group acquires PCAS for 8.3 M€1993 Acquisition of Saint-Jean Photochimie (Quebec)1995 Introduction on the « second marché » of the Paris stock exchange, valuing PCAS at 23 M€1996 SBS created, specialising in the manufacture of acrolein derivatives 1998 Acquisition of Seloc France (Limay) specialising in Pharmaceutical Synthesis (now merged

with PCAS) 1999 Acquisition of PCF (mineral chemicals) and Vernolab2001 Acquisition of Expansia, PCAS Finland and Creapharm2004 Sale of Vernolab to the SGS Group – 85% purchase of VLG Chem (Sanofi-Aventis maintaining

15% of the capital) – PCAS America Inc created2005 Sale of Creapharm2006 PCAS Biosolution created – interest taken in Protéus (6%)– Sale of a majority stake in PCF to

management2007 Interest in Protéus capital increased to 32% - Interest in PCF capital reduced to 19.9%

2008 Interest in Protéus capital increased to 39.5% - PCAS GmbH created


PCAS GROUP Shareholding

67.79%

1.65%

0,89%

29,67%

DynactionManagementPublicTreasury Stocks

Source : TPI of 31st December 2008

Isin Code FR 0000053514 – PCA

As of 31st December 2008 :Number of shares 13 003 882Market Compartment Euronext CPrice 1.71 €Net assets per share 5.67€Market Value 22.2 M€

Capital distribution

Other Information


PCAS GROUP Legal structure

PCAS SALongjumeau (Essonne)

Couterne (Orne)Bourgoin (Isère)Limay (Yvelines)

sites

St Jean PhotochimieSt-Jean/Richelieu site

(Canada)100 %

ExpansiaAramon site

(Gard)100 %

PCAS Finland OyTurku site(Finland)

100 %

PCAS America Inc(Sales Organisation - USA)

100 %

Société Béarnaisede SynthèseMourenx Site

(Pyrénées Atlantiques)100 %

VLG chemVilleneuve- la-Garenne site

(Hauts de Seine) 85 %

(Sanofi Aventis 15 %)

PCAS Biosolution(Longjumeau and Nîmes sites)

50 %

Protéus(Nîmes)39.5 %

PCAS GmbH(Sales Organisation -

Germany)100 %

50 %


PCAS GROUP Organisation chart

2008 RESULTS2 |


2008 RESULTSSignificant events 2008

January 2008 June 2008 October 2008 December 2008

Satisfactory implementation of new ERP system (JD

Edwards)

Interest in Protéus’s capital increased from

32% to 39.5%. Possibility to increase to approx 50% (BSA)

PCAS GmbH created

Implementation of a new organisation in

operations

Q1 - 2009

Two development projects in North

America in association with local partners


2008 RESULTSSignificant Events

Operational profitability has held up well despite a marked decrease in activity:. EBITDA : 19.3 M€ vs 26.8 M€ in 2007. EBIT : 4.6 M€ vs 12.0 M€ in 2007

Net sales :. - 9.1 % at 168.4 M€. - 7.8 % at a constant exchange rate

Net debt decreased from 70.1M€to 62.4 M€


2008 RESULTS2008 Net Sales

In millions of euros 2008 2007

Net salesPharmaceutical SynthesisFine Speciality Chemicals

168.4101.367.1

100 %60.2%39.8%

185.3109.475.9

100 %59.1%40.9%

11.6% decline in net sales of Fine Speciality Chemical divisionDivision predominantly affected by the decline in the Perfumery-Flavours-Cosmeticsactivity, a more marked Asian competition as well as a slowdown in global economicactivity in the 4th Quarter

7.4 % decline in net sales of Pharmaceutical Synthesis divisionDue to impact of difficulties encountered by a major customer of the Group in the supplyof a raw material as well as by the postponement of projects in clinical phase to 2009

185.3

168.4

-9.1 % (- 7.8 % at a constant exchange rate)


2008 RESULTSEBIT and EBITDA 2008

12.0

4.6

26.8

19.3

EBITEBITDA

Group’s operational profitability has held up well:


2008 RESULTSNet Debt

70.1 62.4

Net debt

Continuation of the Group’s debt reduction plan:

Balance of a syndicate loan brought down to 29.5 millioneuros at the end of 2008.


2008 RESULTS Key Figures

In millions of euros 2008 2007 2006

Net Sales 168.4 185.3 178.3

EBITDA (1) as a percentage of net sales

19.3 11.5 %

26.8 14.5 %

21.9 12.3%

Depreciation and provisions (14.6) (14.8) (14.0) Current Operating Income (1) as a percentage of net sales

4.6 2.7 %

12.0 6.5 %

7.9 4.4%

Other Operating Income and Expenses (2) 1.0 (3.0) (0.8)

Net interest expense on debt (4.4) (4.7) (4.0)

Net Result (0.9) 2.7 1.2

Net Result – excluding impact of free shares (0.9) 4.7 1.2

Investments 6.7 10.0 9.2

Net Debt 62.4 70.1 79.0

Equity 73.7 75.3 69.1

Gearing 0.85 0.93 1.14

(1) including Research Tax Credit (CIR) (2) in 2008 : mainly profit from the sale of shares held by PCAS Finland

in 2007 : 2.0 M€ for the free share distribution plan and 1.0 M€ for restructuring costsin 2006 : restructuring costs


2008 RESULTS Consolidated income statement

Economic presentation


Net SalesPharmaceutical SynthesisSpeciality Fine Chemicals

168.4101.367.1

100 %60.2%38.8%

185.3109.475.9

100 %60.3%39.7%

Purchases (raw materials and change in inventory) (59.8) 35.5% (66.2) 35.7%

Staff Costs (54.0) 32.1 % (54.2) 29.2 %

External Costs (33.4) 19.8 % (35.5) 19.2 %

Taxes (5.2) 3.1 % (5.6) 3.0 %

EBITDA 19.3 11.5% 26.8 14.5%

Depreciation and Provisions (14.6) 8.7 % (14.8) 8.0 %

Current Operating IncomePharmaceutical SynthesisFine Speciality Chemicals

4.65.3

(0.7)

2.7 %5.2%

(1.0)%

12.07.34.7

6.5 %6.7%6.2%



Current Operating Income 4.6 12.0

Other Operating Income and Expenses (*) 1.0 (3.0)

Operating Income 5.5 8.9

Net Interest Expense on Debt (4.4) (4.7)

Income Tax Expense (0,7) (0,6)

Share of profit/loss of associates (0,3) -

Net result of activities destined to be sold - -

Net Result (0.9) 2.7

2008 RESULTS Consolidated income statement

(*) in 2008 : mainly profit from the sale of shares held by PCAS Finland in 2007 : 2.0 M€ for the free share distribution plan and 1.0 M€ for restructuring costs


2008 RESULTS Consolidated balance sheet


Non-current Assets 94.2 101.5

Current Assets 87.8 91.0

Cash and Cash Equivalents 1.6 2.8

Total Assets 183.6 195.3


Total Equity 73.7 75.3

OBSAR 18.0 17.6

Long-term debt 46.1 55.4

Other liabilities 45.1 47.0

Total Liabilities 183.6 195.3


2008 RESULTS Consolidated statements of cash flows


Net cash provided by operating activities 17.6 23.3

of which cash flow 17.5 24.4

of which changes in working capital 0.9 0.3

of which income tax (0.8) (1.4)

Net cash provided by investing activities (6.2) (11.2)

of which property, plant & equipement and intangibles (6.7) (10.0)

of which financial assets (0.4) (1.2)

of which net effect of changes in the scope of consolidation - -

Net cash provided by financing activities (12.6) (10.5)

of which net debt variation (8.1) (5.5)

of which net interest expense on debt (4.4) (4.7)

Net change in cash and cash equivalents (1.0) 1.6

PHARMACEUTICAL SYNTHESIS 3 |


3 TYPES OF INTERNATIONALCUSTOMER

Pharmaceutical Laboratories (60%)Generic Manufacturers (30%)

Start-ups (10%)

2 TYPES OF MARKET Regulated: USA, Europe and JapanNon regulated/ developing : BRIC

PHARMACEUTICAL SYNTHESIS

6 PRODUCTION SITES

cGMPLimayAramonVLGPCAS Finland

ISOCouterneBourgoin

Polyvalent sites


PHARMACEUTICAL SYNTHESISSignificant Events

7.4% Decline in Net SalesDifficulty in guarantee of raw material supply in Asia led to a decline in volume ofone of the main productsPostponement to 2009 in the manufacture of projects in clinical phase beforecommercial launchDecline in short-term visibility of activityCustomers’ reduction programme in inventories in second half-year 2008

Monitoring expenses and investments limited the effects of the decline inactivity

Lack of activity was not evenly spread throughout the year or at site level,making it difficult to adapt production capacity accordingly

Profitability decline (ROC -2 M€)Quality deterioration of material originating from India/Asia led to additional costsprior to production and a drop in production levelsUnfavourable effect of the USD exchange rate


PHARMACEUTICAL SYNTHESISSignificant Events

Activity SplitCustomer Partnerships business strongly impacted (-12%) due to a raw material, suppliedby the customer, being out of stock.« Non Exclusive APIs » (+6 %) on the increase, despite strong competition from NorthAmerican generic manufacturers, weighing heavily on visibility.Custom Manufacturing (-12 %): reduction in inventories and budgets postponed.PCAS Biosolution continues its development of 3 projects to pilot and industrial scale in2009.

SitesPCAS Finland: regained and validated manufacture of commercial products followingclosure of European « Big Pharma » chemical plants.Expansia and VLG Chem affected by the decline in volumes and the lack of visibility oftheir customers with whom they work in « partnership ».Limay: successful launch of a « non exclusive API » on the US market.

(*) Custom Manufacturing : made-to-measure synthesis activity of products for the pharmaceutical industryPartnerships : previous site owners


PHARMACEUTICAL SYNTHESISOutlook

Expected increase in 2009 to return to a stable situtation regardinginventories, with no more « out of inventories » instances for our customerswith whom we work in « partnership ».

Continued efforts in North American development of phase I and IIprojects with the support of a cGMP Kilo-Lab based in California.

Confirmed Out-Sourcing strategy by major market players, combined witha growing scepticism towards India and Asia, will accelerate the return ofphase III projects and manufacture of « delicate » products to Europe.

A number of successive plant closures has gradually decreased industrialovercapacity in Pharmaceutical Chemicals.

New Market Prospection (Russia, South America, Middle East, Asia)(*) API : Active Pharmaceutical Ingredient

FINE SPECIALITY CHEMICALS4 |


3 FIELDS OF ACTIVITY

Performance Chemicals (35 %)Perfumery – Flavours –Cosmetics(35 %)New technologies(30 %)

FINE SPECIALITY CHEMICALS

4 PRODUCTION SITES

CouterneBourgoin-J.MourenxSaint-Jean sur Richelieu

Polyvalent sites


Significant EventsIncrease in net sales: + 2,6%

Optimisation of the rate of filling productioncapacity and an improvement in productmix over the first three quarters

Sudden drop in demand in October 2008 foractivities linked to the automobile and metalindustries

Position consolidation with large custom-manufacture accounts

Development of sulfonate thixotropic andnew formulation for fluids used to transformmaterials

Margins maintained despite the impact ofthe increased costs of petrol origin rawmaterials

FINE SPECIALITY CHEMICALSPerformance Chemicals

Outlook

Working hand-in-hand with our largeinternational accounts on developmentsand in particular in Asia where our marketshare increases

Continuation of East European and Russianprospection

Development of PCAS GmbH

Adding value to our technologies andoptimising our production capacity toimprove processes

(*) Sulfonates : organic molecule containing sulphur and whose polarity brings enhanced performance


Significant EventsVery strong activity in the first half-yearand in particular in custom-manufacturedcosmetics

Activity affected during the third quarterdue to a slowdown in consumption, adisappointing summer season anddecisions made to reduce inventory levels

Strong Asian competition emerged,weighing heavily on pricing

24.9% drop in net sales

FINE SPECIALITY CHEMICALSPerfumery-Flavours-Cosmetics

OutlookPromotion of some non exclusivePharmaceutical ingredients to developcosmetic ingredients

New opportunities with leaders in theprofession

Intensified R&D efforts to renew catalogueproducts

Working very closely with strategicdistributors

Commercial aggressivity in the field ofacrolein derivatives


Significant EventsSound performance by the Canadiansubsidiary despite being penalised byan unfavourable parity in the US versusCanadian dollar

Sudden and drastic drop in themicroelectronics industry in the lastquarter which impacted Canadianoperations

Restauration of margins due to a moreselective policy on product range

Intense prospection of custom-manufactured projects

Gradual decline in graphic arts market(PCAS is no longer active in the silver-based photography market)

FINE SPECIALITY CHEMICALSNew TechnologiesOutlook

Net sales increase due to new custom-manufactured projects currently undernegotiation

Increase in demand in themicroelectronics sector during 2009

Continued geographical diversificationstrategy and prospection in NorthAmerica

Redeployment of new activities(colourings and polymers of highadded-value, photovoltaics....)

RESEARCH & DEVELOPMENT5|


70 staff (20 PhDs)9.1 M€ in 2008

• 4 synthesis labs

• 2 Kilo‐Labs (Aramon & Turku)

• 3 pilot units: 1 GMP‐Aramon, 1 GMP‐Limay, 1 ISO‐Couterne

• 48 employees working in laboratories, 14 of whom are in analytical development

• 16 employees working in pilot units (12 GMP and 4 ISO 9001)

RESEARCH & DEVELOPMENTPHARMACEUTICAL SYNTHESIS


36 staff (7 PhDs)2.9 M€ in 2008

• Non‐GMP synthesis intermediates and performance chemicals

• 1 central laboratory (Longjumeau : 23 employees)

• 1 specialised laboratory (Quebec : 6 employees)

• 2 pilot units (Couterne + Bourgoin Jallieu: 10 employees)

RESEARCH & DEVELOPMENTFINE SPECIALITY CHEMICALS


RESEARCH & DEVELOPMENT

2007/2008 PROJECTS

An increased selectivity gained in targetting projects

92

45

41

87

4426 320

77

41

254

65

26

0

50

100

150

200

250

300

350

400

450

Projects Stages

Perf. Indust.Speciality excluding Perf. Indust.Pharma-Synthesis

2007 2008 2007 2008


PCAS & Biotechnology

PCAS Strategy Use innovative technologies to create added value

Better meet the answers to market needs of Green Chemistry

Environment respect by using aqueous processes and less solvents

Support Protéus development

39.5 %50 %

50 %


Activities :Discovery, fine-tuning, optimising and producing new proteinsDeveloping innovative processes for industrial applications

ProtéusA Biotech company to serve industries


• Organic synthesis• Process development• Analytical methods – HSE• Scale-up: Kilo-lab & pilots batches• Industrial scale, multi-tons• 4 plants under cGMP guidelines• 4 plants under Iso-9001guidelines• Quality control• Regulatory affairs & Dossiers

• Biodiversity (natural microorganismes) • New enzymatic activities:

Nitrilase, esterases, nitrile hydratases, amidases, epoxyde hydrolases, oxydo-réductases…

• Protein & Genetic Engineering • HTS: Functional High Throughput Screening• Processes development• Biocatalysts production• Enzymes immobilization• Intellectual Property

APIs

Building BlocksIntermediates

PCAS Biosolution

Integration makes difference

A unique offerChemo-Biocatalytic Processes


A unique offerFirst results

1. A strategic starting material for an APIRecently launchedTarget volume: >10 tonsA non natural substrate using chemo-biocatalytic synthetic route for manufacturing Project advancement: Kilo-lab scale produced for validation by our customer

2. Advanced Intermediate for a drug candidate (in phase III clinical trials)Target volume : 10 tons and more chemo-biocatalytic synthetic routeProject advancement: samples are validated by the customer and the first pilot batch were produced and sent to our customer for validation.

3. A potential Drug candidatechemo-biocatalytic synthetic route using an immobilized enzyme Project advancement: kilo-lab scale

4. «Custom manufacturing Projects under development»: feasibility ongoing

5. projects under screening: « one off patent molecule, one key intermediate »

2009 OUTLOOK6 |


2009 OUTLOOK

Activity : low visibility

Pharmaceutical Synthesis growth

Unfavourable impact of economical crisis on Fine Chemicals

Whole Group: slight growth


2009 OUTLOOK

Measures

Strengthening sales actions

Adapting production capacity


2009 OUTLOOK

Financing

Positive impact of measures taken by the french government in anticipated reimbursement of fiscal assets


PCAS Stock Listed on Euronext compartment C

Variation as compared to 2008 : - 42.2 %Variation as compared to December 2007 : - 187.7 %

Number of PCAS shares : 13 003 882


PCASCAC SMALL 90


PCAS Stock Market Capitalisation

22.9 22.0

53.6

77.6

135.2

109.6

144.0

175.2

120.0

84.8 82.4 84.266.2 62.4

22.2

0

20

40

60

80

100

120

140

160

180

200

Intro 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 '2007 2008

Thank you for your attentionNext meeting:

Shareholders’ meeting29th April 2009

Documents

2008 results · (Sanofi-Aventis maintainin g 15% of the capital) – PCAS America Inc created z 2005 Sale of Creapharm z 2006 PCAS Biosolution created – interest taken in Protéus