Solvay first quarter 2024 results

Strong FCF supported by resilient EBITDA and discipline on costs and capex

Brussels, May 7, 2024 – 7:00 am CEST   -  regulated information

Highlights

• Net sales for Q1 2024 at €1,201 million were down -11.9% organically versus Q1 2023, with positive volume impact, for the first time in seven quarters, in both Basic and Performance Chemicals segments. Prices decreased, mostly reflecting the lower energy and raw material costs.
• Underlying EBITDA of €265 million for the first quarter was -13.6% lower organically compared to a high Q1 2023, with negative Net Pricing partially offset by positive volume impact and lower fixed costs. The EBITDA margin remained solid at 22.1%, and improved sequentially. 
• First cost savings initiatives are already bearing fruit, with €19 million achieved in Q1 2024.
• Underlying net profit from continuing operations was €119 million in Q1 2024 vs. €187 million in Q1 2023.
• Free Cash Flow¹ was strong at €123 million in Q1 2024, from resilient EBITDA combined with discipline on working capital, costs and capex.
• ROCE was 19.8% in Q1 2024.
• Successful inaugural €1.5 billion bond issuance to refinance the bridge facility set up at the end of 2023, in relation to the partial demerger, bringing additional strength and stability to the balance sheet.
• Underlying Net Debt at €1.6 billion, implying a leverage ratio of 1.4x.
• 2024 Outlook: Organic growth of the underlying EBITDA of -10% to -20% compared to restated 2023; Free cash flow greater than €260 million
  
  

Philippe Kehren, Solvay CEO

“I’m proud of our performance in the first quarter, despite challenging macroeconomic conditions, as we focused on what is under our control: capex, costs and cash. Certain areas of our business have shown promising momentum compared to the trough from late 2023, but we cannot call it a recovery yet. We are rapidly deploying cost-saving initiatives that have already started to deliver. Looking ahead, we maintain confidence in meeting our targets for 2024. Our simplified portfolio, clear operating model and strong focus on cash are great assets to position Solvay for sustained success in the years to come.”

2024 outlook

In the first quarter of 2024, while Solvay benefitted from slight volume pick-up in some of its businesses, management has maintained a strong focus on costs and cash. Looking ahead, the company is confident that it can keep its fixed costs under control. Despite green shoots in some segments in Q1, soft demand combined with a volatile macro and geopolitical environment lead Solvay to remain prudent. As a consequence the view on the rest of the year is relatively unchanged at this stage.

Solvay confirms, for full year 2024, its guidance of organic growth of the underlying EBITDA by -10% to -20% (translating into a range of €925 million to €1,040 million at a 1.10 EUR/USD exchange rate) and its guidance of Free Cash Flow to Solvay shareholders to be greater than €260 million.

¹ Free cash flow (FCF) is the free cash to Solvay shareholders from continuing operations.

Safe harbor

This press release may contain forward-looking information. Forward-looking statements describe expectations, plans, strategies, goals, future events or intentions. The achievement of forward-looking statements contained in this press release is subject to risks and uncertainties relating to a number of factors, including general economic factors, interest rate and foreign currency exchange rate fluctuations, changing market conditions, product competition, the nature of product development, impact of acquisitions and divestitures, restructurings, products withdrawals, regulatory approval processes, all-in scenario of R&I projects and other unusual items. Consequently, actual results or future events may differ materially from those expressed or implied by such forward-looking statements. Should known or unknown risks or uncertainties materialize, or should our assumptions prove inaccurate, actual results could vary materially from those anticipated. The Company undertakes no obligation to publicly update or revise any forward-looking statements.

About Solvay

Solvay, a pioneering chemical company with a legacy rooted in founder Ernest Solvay's pivotal innovations in the soda ash process, is dedicated to delivering essential solutions globally through its workforce of over 9,000 employees. Since 1863, Solvay harnesses the power of chemistry to create innovative, sustainable solutions that answer the world’s most essential needs such as purifying the air we breathe and the water we drink, preserving our food supplies, protecting our health and well-being, creating eco-friendly clothing, making the tires of our cars more sustainable and cleaning and protecting our homes. As a world-leading company with €4.9 billion in net sales in 2023 and listings on Euronext Brussels and Paris (SOLB), its unwavering commitment drives the transition to a carbon-neutral future by 2050, underscoring its dedication to sustainability and a fair and just transition. For more information about Solvay, please visit solvay.com or follow Solvay on Linkedin.

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• Press release