Solvay Sa · EURONEXT:SOLB
Solvay Sa — Q3 2019 Earnings Presentation
21 slides from Solvay Sa's earnings presentation, Nov 7, 2019
Slide 1: Q3 2019 Results
Q3 2019 Results November 7, 2019
Slide 2: Forenote
FORENOTE IFRS 16 has been implemented in the Group’s financial statements since January 1, 2019. Comparative information for the first quarter of 2018 in the business review is presented on an unaudited pro forma basis as if the implementation had taken place on January 1, 2018. This information is
Slide 3: Financial Results
FINANCIAL RESULTS Focus on cost, cash and customers in a challenging macro environment Net Sales Underlying EBITDA Free Cash Flow to Solvay shareholders €7.8B €1,796M €345M 9 months -0.7% Y/Y organically -2.6% Y/Y organically +€217M Y/Y +1.6% including forex & scope -0.2% including forex & scope fro
Slide 4: Advanced Materials
ADVANCED MATERIALS 9M 2019 PERFORMANCE Net Sales EBITDA EBITDA Margin +1.8% -8.4% 26% Y/Y organic Y/Y organic MARKET DRIVERS PERFORMANCE HIGHLIGHTS • Aerospace market growth trends • Double-digit aerospace volume growth continue offset continued weakness in auto & electronics • Automotive market hea
Slide 5: Advanced Formulations
ADVANCED FORMULATIONS 9M 2019 PERFORMANCE Net Sales EBITDA EBITDA Margin -7.9% -10% 18% Y/Y organic Y/Y organic MARKET DRIVERS PERFORMANCE HIGHLIGHTS • Shale oil and gas significantly • Oil & gas materially impacted by market deteriorating conditions and erosion of competitiveness • Overall resilien
Slide 6: Performance Chemicals
PERFORMANCE CHEMICALS 9M 2019 PERFORMANCE Net Sales EBITDA EBITDA Margin +3.4% +8.7% 30% Y/Y organic Y/Y organic MARKET DRIVERS PERFORMANCE HIGHLIGHTS • Resilient demand in soda ash and • Pricing up in soda ash and peroxides on peroxides markets stable volumes • Operational efficiency and higher pri
Slide 7: Significant Free Cash Flow Generation & YoY Growth
SIGNIFICANT FREE CASH FLOW GENERATION & YOY GROWTH Free Cash Flow to Solvay Shareholders €345M +€217M Y/Y Continuing operations, 9M 2019 • Strong Q3 delivery with €313M • Strict focus on costs and working capital • Maintained Capex discipline Delevered [1] by €140M in 9M 2019 +€241M Y/Y [1] Operatio
Slide 8: Full Year Guidance
FULL YEAR GUIDANCE Underlying EBITDA Free Cash Flow to Solvay shareholders -2% to -3% ~€490M organically from continued operations ~€2,330M ~€300M Flat Y/Y, at current forex total operational cash deleveraging [1] [1] Operational deleveraging is free cash flow to Solvay shareholders after dividend p
Slide 9: Appendix
Appendix 9 Months 2019 Results 9 November 7, 2019
Slide 10: Net Sales Down -0.7% Organically in 9M
NET SALES DOWN -0.7% ORGANICALLY IN 9M HIGHER PRICES COULDN’T OFFSET LOWER VOLUMES Net sales (in € million) 7,683 -23 +198 -212 +158 7,803 Volumes down -2.8% Scope Forex Volume Price conversion & mix Further to the automotive, electronics and oil & gas markets deterioration Prices up +2.1% -0.
Slide 11: Underlying EBITDA Down -2.6% Organically at 9M
UNDERLYING EBITDA DOWN -2.6% ORGANICALLY AT 9M NET PRICING COULDN’T OFFSETS VOLUME DECREASE Margin Margin 23% Underlying EBITDA 23% (in € million) 1,799 -9 +54 -75 +62 -41 +6 1,796 Volume impact of -4.2% Scope Forex Volume Net Fixed Equity conversion & mix pricing costs earnings Net pricing impa
Slide 12: Performance Chemicals Growth Partly Compensates Decline in Advanced Segments
PERFORMANCE CHEMICALS GROWTH PARTLY COMPENSATES DECLINE IN ADVANCED SEGMENTS organic growth -8% 21% organic growth -10% 49% Advanced Materials Advanced Formulations Aerospace volumes grew firmly in the 9M 2019 Higher prices at Aroma Performance double digits while Automotive sales down EBITDA €1
Slide 13: 9M EPS Supported by Higher Contribution from Discontinued Operations
9M EPS SUPPORTED BY HIGHER CONTRIBUTION FROM DISCONTINUED OPERATIONS Underlying EPS (in € million) 8.50 8.84 Underlying EPS from continuing operations down -2.7% in 9M 1.63 -0.03 -0.28 +0.13 +0.09 -0.10 - 2.16 Stable EBITDA EBITDA Lower net financial charges Depreciation, Net Tax Tax rate Non-
Slide 14: Free Cash Flow Generation Improved
FREE CASH FLOW GENERATION IMPROVED 9M CASH GENERATION (in € million) FCF to Solvay shareholders from continuing operations in 9M at €345 1,796 (570) million Strong Q3 delivery with €313 million Provisions: Employee benefits (168) Focus on strict working capital (249) Environment (48) Other (67
Slide 15: Underlying Leverage Ratio Maintained at 2.1x
UNDERLYING LEVERAGE RATIO MAINTAINED AT 2.1X UNDERLYING NET FINANCIAL DEBT PROVISIONS Leverage (in € million) Leverage (in € million) 2.1x 2.1x (351) 66 (4,007) (5,538) 527 (79) (81) (12) (5,570) (3,820) 291 (387) (135) (59) others others Changes (381) In/outflow Changes Remeasu- Hybrid (458) in sco
Slide 16: Efficient Capital Structure Deleveraging Continues
EFFICIENT CAPITAL STRUCTURE DELEVERAGING CONTINUES Underlying financial debt [1] evolution in € billion (8,720) (7,626) (2,200) (6,743) (6,494) (6,426) (6,310) (2,200) (828) (2,500) (1,800) EUR perpetual hybrid bonds (464) (2,200) (2,500) (2,142) (2,212) (961) (1,282) (1,779) Other debt (849) (1,633
Slide 17: Balanced Maturities Allowing Flexibility
BALANCED MATURITIES ALLOWING FLEXIBILITY DELEVERAGING AND REDUCED OF COST OF DEBT Major financial debt [1] in million $163 143 Issued in 3.95% Sep 2019 300 €300 $196 4.25% 172 3.5% Repaid in Sep 2019 €700 $800 €750 750 $800 700 4.2% 703 3.4% 1.63% 703 4.45% €500 €500 600 €600 €500 5.43% 5.87% €500 0
Slide 18: 2019 P&L Considerations
2019 P&L CONSIDERATIONS UNDERLYING FCF TO SOLVAY FOREX EBITDA SHAREHOLDERS SENSITIVITY EBITDA expected at -2% to -3% organically To be at around €490 million from continuing Mostly exposed to the U.S. dollar, with the compared to €2,330 million pro forma in 2018 operations main sensitivities per US$
Slide 19: IFRS 16 Affects EBITDA, P&L & Debt Comparables
IFRS 16 AFFECTS EBITDA, P&L & DEBT COMPARABLES 2018 key figures (in € m) published IFRS 16 pro forma EBITDA 2,230 +100 2,330 • IFRS 16 implementation Advanced Materials 1,197 +28 1,225 Advanced Formulations 521 +12 533 Capitalizes leases, previously considered as operating leases Performance Chemi
Slide 20: Impairment on Novecare's Oil and Gas Assets
IMPAIRMENT ON NOVECARE’S OIL AND GAS ASSETS Novecare Oil & Gas Actions taken • Comprises the Chemlogics and Rhodia businesses • Management changes • Adapting cost structures to new environment • Operates in the unconventional oil & gas industry in • Recovery plans to operate in the more competitive
Slide 21: www.solvay.com
Investor Relations Shareholders services Rue de Ransbeek, 310 Rue des Champs Elysées, 43 1120 Brussels, Belgium 1050 Brussels, Belgium T +32 2 264 3025 T +32 2 639 6630 M investor.relations@solvay.com M shareholders@solvay.com www.solvay.com FOLLOW US ON QUESTIONS? Contact us investor.relations@solv