Solvay Sa · EURONEXT:SOLB
Solvay Sa — Q1 2023 Earnings Presentation
25 slides from Solvay Sa's earnings presentation, May 4, 2023
Slide 1: Q1 2023 results
Dr. Ilham Kadri CEO and President of the Executive Leadership Team of Solvay Q1 2023 results Karim Hajjar CFO of Solvay May 4, 2023 Q1 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: Pricing supports solid start to 2023
Pricing supports solid start to 2023 € € € 3.2 bn 839 m 125 m 16.7% NET SALES EBITDA FCF ROCE % +22 % +2 organic organic % % >30 +4.4pp +14% pricing 26.5 FCF vs Q1 2022 New record -12% volumes conversion New record EBITDA margin page 3 First quarter 2023 Earnings
Slide 4: Investments for future value creation
Investments for future value creation Healthcare EV batteries EV batteries Agro Eco-friendly Agro Silica Soda SodaAsh Ash Beauty Care page 4 Q1 2023 Earnings
Slide 5: Making progress and forming partnerships
Making progress and forming partnerships Expanding our R&I footprint in U.S. Boston biotech hub through Gingko partnership Solvay One Planet climate Licensing our H2O2 technology targets validated by SBTi to a megaplant in China Important milestone in our portfolio transformation Q1 2023 Earnings
Slide 6: Materials Q1 2023
Materials Q1 2023 Q1 2023 (€m) % YoY % YoY organic Specialty Polymers 773 +15% +15% Composite Materials 249 +20% +17% Net Sales 1,022 +16% +16% EBITDA 362 +40% +35% 35.4% EBITDA Margin 29.6% (+6.0pp) Q1 Highlights • Specialty Polymers’ sales improved primarily due to higher prices. Volumes were slig
Slide 7: Chemicals Q1 2023
Chemicals Q1 2023 Q1 2023 (€m) % YoY % YoY organic Soda Ash & Deriv. 598 +23% +19% Peroxides 171 -5% -6% Coatis 172 -23% -29% Silica 163 +7% +6% Net sales 1,103 +6% +2% EBITDA 298 +7% +19% 27.0% EBITDA Margin (+0.2pp) Q1 Highlights • Soda Ash & Derivatives’ growth was driven by higher pricing, parti
Slide 8: Solutions Q1 2023
Solutions Q1 2023 Q1 2023 (€m) % YoY % YoY organic Novecare 386 -15% -14% Special Chem 250 +5% +4% Techn. Solutions 182 +18% +15% Aroma Performance 99 -30% -31% Oil & Gas Solutions 121 -17% -18% Net Sales 1,038 -9% -9% EBITDA 219 -8% -9% 21.1% EBITDA Margin (+0.1pp) Q1 Highlights • Novecare positive
Slide 9: Double-digit EBITDA growth
Double-digit EBITDA growth Margin +4.3pp Margin 22.2% 26.5% € 839m in Q1 2023 € vs. €712m in Q1 2022 million Fixed costs Main drivers Cost savings +10 Other Inflation -40 Business activity -5 • Sustained strong pricing Forex Others +10 Scope conversion • Lower volumes on weak demand Volume & mix Net
Slide 10: Structural cost reduction
Structural cost reduction 97% of 2024 cost savings achieved Total costs savings to date Realized in FY Realized in FY Realized in FY Realized YtD 2020 2021 2022 2023 € € 175m € 213m € 79m € 17m 484 m Targeted annual run-rate by 2024 Permanent structural levers € ● ● Restructuring: ~50% of total Indi
Slide 11: Positive free cash flow generation
Positive free cash flow generation € million € 125m in Q1 2023 vs. € 216m in Q1 2022 Capex Provisions Financing Employee benefits -22 Net interests 10 Taxes €-71m Environment -12 Hybrid coupons -25 Other €119 Working Other -35 Dividends to NCI 0 incl. €92m settlement Main drivers capital of litigation
Slide 12: Strengthening our balance sheet
Strengthening our balance sheet Net debt end of Q1 2023 (in € million) Provisions end of Q1 2023 (in € million) Leverage -0.1x Leverage 1.1x 1.0x Underlying net debt decrease by €339m to €3.25 billion Provisions increased by €170 million to €2.3 billion ● €432 million of proceeds from the sale of th
Slide 13: Outlook upgraded
Outlook upgraded* EBITDA Free cash flow underlying continuing operations +2% to -5% ~€900 m organic growth Previously between -3% and -9% Previously ~€750 m * On an organic basis means at constant forex and scope. The estimates reflect our current visibility and do not assume any significant macroeco
Slide 14: Q&A
O&A Y¥fno wl % solvay.com
Slide 15: Annexes
Annexes Q1 2023 Earnings
Slide 16: Progressing in the implementation of our next chapter
Progressing in the implementation of our next chapter Shareholders’ meeting May 9 Full-year 2022 results Q1 2023 results Q2 2023 results Q3 2023 results February 23 May 4 August 3 November 3 2022 Q1 Q2 Q3 Q4 2023 Webinars Webinars Webinar Capital H1 key figures Debt Capital markets Extraordinary Auto
Slide 17: Balanced maturities
Balanced maturities Deleveraging and reduced of cost of debt, record low leverage Financial debt [1] in € and US$ million NET DEBT Leverage ratio 1.0x S&P Negative outlook Period 31 December 2022 31 March 2023 Variation over the period BBB Bond type Face value Avg. maturity Avg. cost Face value Avg.
Slide 18: Key figures and segment review
Key figures and segment review Q1 Q1 % Underlying, in € million Q1 Q1 Underlying, in € million 2023 2022 yoy 2023 2022 % yoy % organic Net sales 3,167 3,055 +3.6% Net sales 3,167 3,055 +3.6% +2.0% EBITDA 839 712 +18.0% Materials 1,022 879 +16.3% +15.6% EBITDA margin 26.5% 23.3% +3.2pp 773 671 +15.1%
Slide 19: Broad and strong progress on Solvay One Planet as of 2022
Broad and strong progress on Solvay One Planet as of 2022 Progress 2030 targets Climate -19% (-15% structural) Reduce our GHG emissions (scope 1 & 2) -30% 15% Phase out coal solid fuels 100% 28% Reduce pressure on biodiversity -30% Resources 55% Sustainable solutions, % of Group sales 65% 9.3% Doubl
Slide 20: Resources
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 21: 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 21 Q1 2023 Earnings
Slide 22: 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 22 Q1 2023 Earnings Definition of KPIs is available in the glossary of the Press Release
Slide 23: 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 24: 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 25: 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