Solvay Sa · EURONEXT:SOLB
Solvay Sa — Q1 2013 Earnings Presentation
38 slides from Solvay Sa's earnings presentation, May 2013
Slide 1: Roadshow Presentation Q1 2013
Roadshow Presentation Q1 2013
Slide 2: Agenda
Agenda • Q1 2013 earnings highlights • A far-reaching transformation • Solvay at a glance 2
Slide 3: Q1 2013 Earnings Highlights
Q1 2013 Earnings Highlights Forenote applicable to the entire section unless otherwise stated: All references to 2012 P&L data are to be deemed restated for the new business organization effective as from January 1st 2013, the reporting of Solvay Indupa as discontinued operations and for the applica
Slide 4: Q1'13 Earnings Highlights
Q1’13 Earnings Highlights • Net sales down (3) % at € 3,010 m Q1’13 Volumes (2) %, stable prices and forex impacts (1)% • REBITDA at € 454m, (12)% YoY , up 6% QoQ Net Sales: € 3,010 m • Consumer Chemicals & Advanced Materials growth engine segments, continued growing • Performance Chemicals, decreas
Slide 5: Contrasted activity levels
Contrasted activity levels In € million Q1 Net Sales (2)% 0% Volume Price (1)% 0% Forex Structure (3)% Q1 ‘12 Q1 ‘13 5
Slide 6: Profitability impacted by low activity levels and phasing-out of CERs
Profitability impacted by low activity levels and phasing-out of CERs, while pricing power satisfactory In € million Q1 REBITDA REBITDA* breakdown by Net pricing Operational Segment effect € 10 m 2% 17 14% 22% (1)% % (8)% 0% 4% REBITDA Cost of (3)% Volume Forex Price goods Group of which Fixed (3)%
Slide 7: Consumer Chemicals
Consumer Chemicals In € million 609 Novecare Net sales Coatis % YoY evolution (2)% • Continue to develop solidly, posting sustained growth 15% • Growth in most market segments more than offset anticipated lower guar-related business’ performance against high comparable (Hichem), coupled with some de
Slide 8: Advanced Materials
Advanced Materials In € million 639 Specialty Polymers Net sales Silica • Growth in most of our market segments % YoY evolution +3% 16% • Significant lower volumes in PVDF driven by low demand in PhotoVoltaic & Oil & Gas • Good pricing power thanks to commercial excellence initiatives Specialty 13%
Slide 9: Performance Chemicals
Performance Chemicals In € million 764 Essential Chemicals Net sales Acetow • Contrasted performance on businesses % YoY evolution +14% - Depressed demand in Soda Ash (mainly flat glass) 21% - Resilience in Bicar & Peroxyde 9% Eco Services Acetow (11)% • Record performance Essential 55% • Strong dem
Slide 10: Functional Polymers
Functional Polymers In € million 981 Polyamide Net sales % YoY evolution • Overall market & competitive environment remained challenging, impacting both volumes & margins Chlorovinyls • Upstream intermediates & downstream fibers in Brazil particularly +4% 58% impacted 42% Polyamide (9)% • Engineerin
Slide 11: Operational cash management and capex
Q3’12 SOLVAY RESULTS Operational cash management and capex Industrial Working Capital CAPEX In % of total sales In € million Forecast 900-950 13.8 785 13.9 Q4: 285 13.1 13.1 Q3: 176 11.7 Q2: 180 Q1: 144 Q1: 150 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 2012 2013 Inventories significantly up in anticipation Slow
Slide 12: Free Cash Flow included important seasonal cash outflows
Q3’12 Free CashSOLVAY Flow included important RESULTS seasonal cash outflows In € million € (17)m FCF* in Q1’13 Conversion Divestment Proceeds Dividends & others Capex Discontinued Net operations financial charges REBITDA/ Change in Provisions/ Industrial Other operating Working Cash Flows Capital N
Slide 13: Sound financial structure (IFRS)
Sound financial structure (IFRS) In € billion Net debt/Equity ratio(2) Leverage ratio(3) Net Debt Bilateral (0.4) 19% 0.65x (1.3) Rhodia Bonds (0.8) Long-dated maturity debt 1,000 Cash and Cash In € million 800 equivalents Solvay (1) Bonds 500 500 2.4 (2.3) 300 Q1 2013 2013 2014 2015 2016 2018 2020
Slide 14: Outlook
Outlook For the moment, we do not observe any significant improvement in the macroeconomic and business environment compared to the preceding months. Even if this challenging context were to persist throughout the year, Solvay is confident in its ability to improve its REBITDA in 2013 compared to la
Slide 15: Forthcoming 2013 key dates for investors
Forthcoming 2013 key dates for investors • May 21: Payment of 2012 dividend balance • July 31: Second quarter results • October 25: Third quarter results • November 6: Capital Markets Day 15
Slide 16: At a glance
f . — At a glance
Slide 17: A major responsible chemical player
A major responsible chemical player With compelling strengths FY’12 • 90% of sales in businesses that rank among the top 3 global 29,100 Net Sales: € 12.4bn leaders EMPLOYEES* 55 COUNTRIES • 38% of sales in fast-growing markets REBITDA: € 2.1bn • Balanced portfolio 111 INDUSTRIAL of activities SITES
Slide 18: Continued focus on fast-growing regions
Continued focus on fast-growing regions % of 2012 Group net sales 42% 20% 28% 10% Stable At constant perimeter, Solvay Indupa reported as Asset held for sale 18
Slide 19: Customer-focused organization
Customer-focused organization • More decentralized • Agile • Closer to customer • Entrepreneurial 2012 REBITDA € 518 m € 627 m € 750 m € 251 m € (79) m Margin on 20.2% 22.9% 23.7% 6.6% n.m net sales 2012 data restated for the new business organization effective as from January 1st 2013, REBITDA refe
Slide 20: Accelerating a far-reaching transformation
Accelerating a far- reaching transformation
Slide 21: A Group in far-reaching transformation
A Group in far-reaching transformation Well defined strategic vision Clearly defined priorities Solvay’s ability to extract value Consumer Advanced Chemicals Materials ACTIVITIES Energy 5% in % of Group Services REBITDA Functional Polymers Peformance Chemicals Value creation potential of industry /
Slide 22: Accelerating in-depth transformation to enhance business profile
Accelerating in-depth transformation to enhance business profile Deploying breakthrough action plans Capturing integration synergies Investing selectively Growing through innovation 22
Slide 23: Deploying breakthrough actions
Deploying breakthrough actions Reducing Exposure to JV 50/50 wih INEOS PVC cyclical Chloro-vinyls Solvay Indupa Restoring profitability & 100 M€ REBITDA Polyamide improvement Strategic flexibility Strengthening leadership Action plan Soda Ash Improving competitiveness in Europe being finalis
Slide 24: Reducing Solvay's exposure to cyclical Chlorovinyls
Reducing Solvay’s exposure to cyclical Chlorovinyls B REAKTHROUGH ACTIONS PVC Polyamide Soda Ash SOLVAY & INEOS TO CREATE A WORLD-CLASS PVC PLAYER • Strong industrial logic: creation of a world-class PVC producer with low cost base and significant synergy potential • JV to improve Solvay’s financial
Slide 25: Restoring profitability at Polyamide
Restoring profitability at Polyamide B REAKTHROUGH ACTIONS PVC Polyamide Soda Ash Cost Optimization Operational Excellence • Manufacturing / OEE • Variable costs • Supply Chain • Fixed costs • Commercial Excellence / Differentiation € 100m REBITDA improvement by YE 2014 REBITDA refers to Operating r
Slide 26: Improving Soda Ash industrial footprint and profitability
Improving Soda Ash industrial footprint and profitability B REAKTHROUGH ACTIONS PVC Polyamide Soda Ash BALANCING GLOBAL INDUSTRIAL FOOTPRINT • Regional market dynamics • Cost-effectiveness GLOBAL DEMAND GROWING UNLOCK TRONA-BASED CAPACITY IN THE US IN LINE WITH GDP • + 250Kt/y, with limited inve
Slide 27: Delivering faster on savings
Delivering faster on savings INTEGRATION-RELATED & HORIZON Synergies & Cost Efficiency programs 2012 400 Purchasing & Logistics € 110m MORE & FASTER In € million 280 2012 purchases • € 1.3bn Energy 170 • € 4.7bn 60 Raw Materials Technical goods & 110 services 20 2011 2012 2013 2014 IN LINE Administr
Slide 28: Investing selectively for future value-creating growth
Investing selectively for future value-creating growth CAPITAL PVDF Tavaux +50% EXPENDITURES Specialty Polymers Compounding In € million Specialty fluorinated Rare Earth derivatives +50% Recycling [900-950] Guar Formultation Guar Formulation 846 HPC 785 Derivatized Guar Oil & Gas +40% Specialty surf
Slide 29: Growing through innovation
Growing through innovation Major worldwide R&D R&D Venturing New Collaborative R&D centers employees spending & start-ups patents innovation projects 13 1,900 ~€ 300 m € 85 m 300 >100 2012 developments within GBUs Advanced Renewable Organic Sustainable Eco- Consumer Materials & Chemistry Electronics
Slide 30: Enhancing Business Profile
Enhancing Business Profile 2012 Proforma JV Chloro-vinyls By Operating Segment* Energy Services Energy Services Functional Functional Consumer Polymers Consumer Polymers Chemicals 4 Chemicals 11 % of Group 51 % of REBITDA Group 54 REBITDA Performance Advanced Performance Advanced Chemicals Materials
Slide 31: Solar Impulse flight "Across America"
Solar Impulse flight “Across America” Solvay provides solar aircraft with lightweight, high-strength and energy- efficient products with a total of 6,000 different parts. 31
Slide 32: Safe harbour
safe harbour “To the extent that any statements made in this presentation contain information that is not historical, these statements are essentially forward-looking. The achievement of forward-looking statements contained in this presentation is subject to risks and uncertainties because of a numb
Slide 33: Appendices
f . — Appendices
Slide 34: Strong global leadership positions
Strong global leadership positions • World leader with 90% of its sales in businesses in which it is in the top 3 Specialty Silica & Rare Earth Consumer Essential Polymers Systems Chemicals Chemicals High Barrier Polymers, Specialty Hydrogen High-Performance High-Performance Surfactants, Peroxide, S
Slide 35: Well-managed pension situation and stable cash-out
9M’12 SOLVAY RESULTS Well-managed pension(1) situation and stable cash- out As of March 31, 2013 France & Germany € (1,849)m Pension schemes not funded United Kingdom € (388)m Total pension Other countries provision2 € (70)m € (2,836)m Belgium € (256)m Stable cash North America contribution € (273)m
Slide 36: Additional financial indications
Additional financial indications P&L considerations 2013 • Depreciation & amortization • Excl. PPA impact ~ € 670m yearly • PPA impact: ~ € 140m yearly • Average cost of gross financial debt 4.9% • Other financial expenses Post-employment benefits liabilities discounting costs ~ €(100)m in 2013 * En
Slide 37: Additional financial indications
Additional financial indications • Post-employment benefits 2013 projections P&L overall impact: € 166m in 2013 • € (64)m Service costs (up € (20)m because lower discount rates *) • ~ € (102)m Financial costs (up € (10)m because lower discount rates *) Cash outflows: € 206m in 2012 and stable beyond
Slide 38: Solvay
SOLVAY asking more from chemistry