Results of operations Chemicals

The Chemicals segment consists of the Inorganics, Catalysts, Petrochemicals and Intermediates divisions. In 2007, sales to third parties increased by €2,590 million to €14,162 million compared with the previous year (volumes 2%, prices 7%, portfolio 18%, currencies –5%).

The Catalysts division, included for the first time for an entire year, contributed in particular to the segment’s double-digit sales growth. However, other parts of the segment also grew faster than the market. Sales in Inorganics and Intermediates grew due to higher sales volumes and sales prices. Sales in Petrochemicals were lower than last year. All regions contributed to sales growth, Europe and Asia in particular grew strongly.

Income from operations rose by 44.6% to €1,995 million. All four divisions recorded higher earnings, in spite of increasing raw material prices and scheduled plant turnarounds. The restructuring measures initiated in Intermediates in recent years contributed to the increase in earnings. Earnings were negatively impacted by special items connected with the integration costs of the catalysts business acquired in 2006. Special income resulted from the sale of our stake of approximately 42% in an ethane cracker in Geismar, Louisiana, to Williams Olefins.

As of January 1, 2008, the Catalysts division will come under the new Functional Solutions segment. We expect a slight increase in sales and earnings for the remaining businesses in the Chemicals segment. Increased production capacities due to capacity expansions at our steam cracker in Antwerp, Belgium and a decrease in the number of scheduled plant shutdowns as well as high demand will contribute to our strong performance.