Solvay Sa · EURONEXT:SOLB
Solvay Sa — Q3 2023 Earnings Presentation
26 slides from Solvay Sa's earnings presentation, Nov 3, 2023
Slide 1: Third Quarter 2023 results
Dr. Ilham Kadri CEO and President of the Executive Leadership Team of Solvay Third Quarter 2023 results Karim Hajjar CFO of Solvay November 3, 2023 Third quarter / First nine months 2023 Earnings
Slide 2: Forenote
Forenote This presentation 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 presentation is subject to risks and uncertainties relating to
Slide 3: Nine Months 2023 performance
Nine Months 2023 performance € € € 9.0 bn 2.3 bn 1.0 bn 15.2% NET SALES EBITDA FCF ROCE % % -9.6 -1.2 organic organic 39% -0.2pp FCF vs Q3 2022 25.9% conversion -13% volumes +4% pricing EBITDA margin page 3 Third quarter / First nine months 2023 Earnings
Slide 4: Delivering on project milestones
Delivering on project milestones Shareholders’ meeting ELT and Board of directors announcements November 3 Full-year 2022 results Q1 2023 results Q2 2023 results Q3 2023 results November 3 2022 Q1 Q2 Q3 Q4 2023 Webinars Webinars Capital H1 key figures Debt Capital Markets Extraordinary Automotive/Bat
Slide 5: Investing in sustainable growth
Investing in sustainable growth EssentialCo SpecialtyCo SpecialtyCo Sale of energy supply business Plan confirmed to build largest EV materials facility in USA ● Reduces Corporate costs volatility ● JV agreement with Orbia ● Strengthens balance sheet ● Commitment to sustainable mobility Third quarter
Slide 6: Third quarter 2023 performance
Third quarter 2023 performance € € € 2.7 bn 702 m 346 m 15.2% NET SALES EBITDA FCF ROCE % % -20.3 -18.5 organic organic 39% -0.2pp FCF vs Q3 2022 25.6% conversion -15% volumes -5% pricing EBITDA margin page 6 Third quarter / First nine months 2023 Earnings
Slide 7: Materials Q3 2023
Materials Q3 2023 Q3 2023 (€m) % YoY % YoY organic Specialty Polymers 701 -17.8% -12.5% Composite Materials 258 -1.2% +4.5% Net Sales 959 -13.9% -8.5% EBITDA 324 -15.8% -12.4% EBITDA Margin 33.8% (-0.8pp) Q3 Highlights • Sales in Specialty Polymers decreased due to lower volumes across most markets
Slide 8: Solutions Q3 2023
Solutions Q3 2023 Q3 2023 (€m) % YoY % YoY organic Novecare 325 -36.3% -31.4% Special Chem 213 -18.2% -14.1% Techn. Solutions 159 -15.9% -11.6% Aroma Performance 82 -43.9% -40.5% Oil & Gas Solutions 103 -32.0% -24.5% Net Sales 882 -29.8% -25.0% EBITDA 164 -31.7% -25.6% 18.6% EBITDA Margin (-0.5pp) Q
Slide 9: Chemicals Q3 2023
Chemicals Q3 2023 Q3 2023 (€m) % YoY % YoY organic Soda Ash & Deriv. 478 -23.9% -22.9% Peroxides 149 -31.4% -29.0% Coatis 147 -34.7% -36.6% Silica 133 -18.9% -17.2% Net sales 908 -26.6% -25.8% EBITDA 274 -12.0% -3.8% 30.2% EBITDA Margin (+5.0pp) Q3 Highlights • Soda Ash & Derivatives sales lower due
Slide 10: Structural cost reduction
Structural cost reduction 2024 cost savings achieved 1.5 years ahead of time ✔ Total costs savings to date Realized in FY Realized in FY Realized in FY Realized YtD € 530 2020 2021 2022 2023 € € € € m 175m 213m 79m 63m Targeted annual run-rate by 2024 Permanent structural levers € ● ● Restructuring:
Slide 11: Improved EBITDA margin
Improved EBITDA margin Margin +0.1pp Margin 25.4% 25.6% € € 702m in Q3 2023 million vs. €917m in Q3 2022 Main drivers Forex Scope conversion • Lower volumes in a weaker macro Other environment Fixed costs Volume & mix Net pricing • Favorable net pricing • Inflation-driven fixed costs but contained by
Slide 12: Positive free cash flow generation
Positive free cash flow generation € million € 346m in Q3 2023 vs. € 452m in Q3 2022 Provisions Capex Working Financing Working capital Employee benefits -22 Main drivers capital Environment -16 Net interests 13 Taxes €-73 Other -32 Hybrid coupons -8 Other €19 Dividends to NCI -10 • Investments in gro
Slide 13: Successful completion of liability management
Successful completion of liability management SOLVAY Liabilities management Syensqo Solvay At Spin-Off At Spin-Off Jun 2023 (in € billion) (in € billion) € billion Actual Indicative Indicative EUR Senior Notes 1.1 0.5 0.0 Consent on Sept 5, 2023 (transfer from Solvay SA to Synesqo at Partial €500m D
Slide 14: 2023 outlook confirmed
2023 outlook confirmed Estimated baseline EBITDA for 2023 FY 2023E (€ million / billion) SOLVAY EssentialCo SpecialtyCo Underlying EBITDA ~2.9 billion [1] ~1.25 to 1.3 billion ~1.6 to 1.65 billion Scope impact [2] (a) - 90 - 100 million - Pro-forma dissynergies (b) - 25 - 30 million 35 - 40 million T
Slide 15: Diverse and experienced Boards of Directors
Diverse and experienced Boards of Directors 10 members: ● 6 independent, 3 represent the reference shareholder Solvac & CEO EssentialCo ● 30% of women ● Expertise in governance, strategic planning, corporate financial management and business development 10 members: ● 6 independent, 3 represent the re
Slide 16: Q&A
O&A Y¥fno wl % solvay.com
Slide 17: Annexes
Annexes Third quarter / First nine months 2023 Earnings
Slide 18: Key figures
Key figures Underlying, in € million Q3 2023 Q3 2022 % yoy 9M 2023 9M 2022 % yoy Net sales 2,747 3,609 -23.9% 9,001 10,141 -11.2% EBITDA 702 917 -23.5% 2,331 2,493 -6.5% EBITDA margin 25.6% 25.4% +0.1pp 25.9% 24.6% +1.3pp EBIT 508 709 -28.3% 1,749 1,909 -8.4% Net financial charges -67 -57 -17.3% -165
Slide 19: Segment review
Segment review Underlying, in € million Q3 2023 Q3 2022 % yoy % organic 9M 2023 9M 2022 % yoy % organic Net sales 2,747 3,609 -23.9% -20.3% 9,001 10,141 -11.2% -9.6% Materials 959 1,114 -13.9% -8.5% 3,073 3,041 +1.1% +4.2% Specialty Polymers 701 853 -17.8% -12.5% 2,295 2,333 -1.7% +1.7% Composite Ma
Slide 20: Strengthening our balance sheet
Strengthening our balance sheet Net debt end of Q3 2023 (in € million) Provisions end of Q3 2023 (in € million) Leverage -0.2x Leverage 1.1x 0.9x Underlying net debt decreased by €802m to €2.8 billion Provisions increased by €409 million, to €2.5 billion, mainly driven by: ● €1,027 million strong op
Slide 21: Solvay One Planet broad and strong progress
Solvay One Planet broad and strong progress Progress vs. 2030 Objective 2022 2021 Comment 2018 targets 10.3 -19% Reduce by Align greenhouse gas emissions (scope 1&2) -6.4% (-15% structural) Progress at 2x Paris Agreement 30% 11.0 Climate with Paris Agreement (Mt) (-4% structural) -15% 4 plants exiti
Slide 22: Strong credentials: Our performance is recognised
Strong credentials: Our performance is recognised A rating Reporting Matters Recognition (scale AAA to CCC) In the top 10 reports on Biodiversity B- rating Prime company #6/39 in the sector Member of FTSE4Good Top 2% A- C- Scale A to D (from A+ to D-) page 22 Third quarter / First nine months 2023 E
Slide 23: Strong delivery on all financial metrics as of 2022
Strong delivery on all financial metrics as of 2022 Margin FCF Conv. +1.3pp +6.1pp Org. growth FCF CAGR +12.1% +81% Leverage -45% ROCE nearly Pensions doubled -61% +7.9pp Debt -33% page 23 Third quarter / First nine months 2023 Earnings Definition of KPIs is available in the glossary of the Press Rel
Slide 24: A stronger and better company
A stronger and better company 2024 G.R.O.W. Targets, 2022 Improvement set in Nov 2019 Achievements 2019-2022 Net sales - €13,426m 9.7% CAGR Mid-single digit growth Underlying EBITDA (annual average growth) €3,229m 12.1% CAGR Margin - 24.0% +1.3pp Exceed €350m annual run rate Costs savings (raised to
Slide 25: Market segments & geographical footprint
Market segments & geographical footprint Region (% 2022 Net Sales) Group Materials Chemicals Solutions Europe 27% 28% 34% 19% North America 26% 30% 16% 32% TOP 3 Market position Latin America 14% 3% 25% 13% in ~ 90% of Asia and rest of the world 33% 38% 25% 36% portfolio End markets (% 2022 Net Sale
Slide 26: Why invest?
Why invest? We aim to reshape the global Future growth potential Customer partnerships chemical industry by delivering fuelled by megatrends drive innovation solutions that meet the world’s sustainability challenges and provide critical solutions in fast-growth markets. Global scale, diversity of We