The ratings on SPCM S.A. reflect the group's aggressive leverage, exposure to raw material prices, somewhat limited product diversification, and industry competition. These negative factors are partially offset by world market leadership in specialty and intermediate water treatment polymers, strong growth, and continued good demand prospects. Sales for the year ended June 30, 2008, materially increased to €1.1 billion, while EBITDA was slightly down to €94 million, resulting in an 8.5% EBITDA margin. SPCM's weak business profile reflects: EBITDA that is very sensitive to volatile raw material prices. Propylene prices have rapidly increased in the first half of 2008, reducing EBITDA. We expect the second half of 2008 to show better profits and margins, as selling-price increases catch up with
