Solvay Sa · EURONEXT:SOLB
Solvay Sa — FY2022 Earnings Presentation
28 slides from Solvay Sa's earnings presentation, Feb 23, 2023
Slide 1: Full-year 2022 results
Dr. Ilham Kadri CEO and President of the Executive Leadership Team of Solvay Full-year 2022 results Karim Hajjar CFO of Solvay February 23, 2023 Fourth quarter and full-year 2022 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: Broad and strong progress on Solvay One Planet
Broad and strong progress on Solvay One Planet 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% Double our sales
Slide 4: Record full-year 2022 performance
Record full-year 2022 performance Free Net Sales EBITDA ROCE Underlying Cash Flow Continuing operations € € € 13.4bn 3.2bn 1.1bn 16% ● +25.6% organic yoy ● New record level ● +28.7% organic yoy ● 15th quarter of positive FCF ● +24.4% pricing ● Versus 11.4% end of 2021 ● 24.0% EBITDA margin ● FCF con
Slide 5: Strong delivery on all financial metrics
Strong delivery on all financial metrics 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 5 Fourth quarter and full-year 2022 earnings Definition of KPIs is available in the glossary of the Press Release
Slide 6: 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 7: €1 billion of investments for growth
€1 billion of investments for growth Sodium bicarbonate Vertical integration in New PVDF line, China capacity increase, natural vanillin, France Bulgaria page 7 Fourth quarter and full-year 2022 earnings
Slide 8: Innovations deliver new customer wins
Innovations deliver new customer wins 100% biobased New contract for a Environmental award ingredients used for new PVDF grade for at TireTech 2022 for surfactants binders TECHSYN technology page 8 Fourth quarter and full-year 2022 earnings
Slide 9: Materials Performance
Materials Performance Q4 2022 (€m) % YoY % YoY organic FY 2022 (€m) % YoY % YoY organic Specialty Polymers 787 +42% +37% Specialty Polymers 3,121 +44% +37% Composite Materials 247 +26% +16% Composite Materials 954 +31% +21% Net Sales 1,034 +38% +31% Net Sales 4,075 +40% +33% EBITDA 306 +48% +36% EBI
Slide 10: Chemicals Performance
Chemicals Performance Q4 2022 (€m) % YoY % YoY organic FY 2022 (€m) % YoY % YoY organic Soda Ash & Deriv. 572 +49% +42% Soda Ash & Deriv. 2,221 +47% +41% Peroxides 198 +13% +8% Peroxides 773 +22% +17% Coatis 186 -10% -19% Coatis 870 +17% +5% Silica 147 +18% +15% Silica 631 +35% +30% Net sales 1,103
Slide 11: Solutions Performance
Solutions Performance Q4 2022 (€m) % YoY % YoY organic FY 2022 (€m) % YoY % YoY organic Novecare 436 +1% -7% Novecare 1,905 +23% +16% Special Chem 255 +21% +21% Special Chem 1,040 +24% +23% Techn. Solutions 190 +33% +25% Techn. Solutions 740 +32% +23% Aroma Performance 121 -10% -14% Aroma Performanc
Slide 12: €1 billion of net pricing in 2022
€1 billion of net pricing in 2022 € million € million * Impact on net sales in € million Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Solvay Pricing €13 €23 €1 -€13 €4 €29 €139 €269 €475 €690 €836 €602 o/w Specialty Co €1 €11 -€6 -€24 -€8 €6 €64 €152 €248 €390 €428 €327 o/
Slide 13: Structural cost reduction
Structural cost reduction 93% of 2024 cost savings achieved Total costs savings to date Realized in FY Realized in FY Realized in FY € 467 2020 2021 2022 € € € m 175m 213m 79m Targeted annual run-rate by 2024 Permanent structural levers € ● ● Restructuring: ~50% of total Indirect costs reductions: ~
Slide 14: Strong free cash flow generation
Strong free cash flow generation € million € 1,094 m in 2022 vs. € 843m in 2021 Capex Working capital Provisions Main drivers Employee benefits -101 Financing Environment -91 Net interests -62 Other -136 Hybrid coupons -82 Dividends to NCI -17 Taxes €-305m • Record profit Other €-75m • Investment in gr
Slide 15: 2023 Full-year outlook
2023 Full-year outlook Dividend EBITDA Free cash flow Proposed Underlying organic* continuing operations around €0.20 increase to -3% to -9% € €4.05 per share year-on-year 750m page 15 * at constant forex and scope Fourth quarter and full-year 2022 earnings
Slide 16: 2023 opens a new chapter
2023 opens a new 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 Automotive/Batteries Soda Ash, Fe
Slide 17: Q&A
O&A Y¥fno wl % solvay.com
Slide 18: Annexes
Annexes page 18 Fourth quarter and full-year 2022 earnings
Slide 19: 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 20: 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-) Fourth quarter and full-year 2022 earnings
Slide 21: Double-digit EBITDA growth
Double-digit EBITDA growth Margin +0.7pp Margin 23.3% 24.0% € 3,229m in 2022 vs. €2,356m in 2021 € Main drivers million Fixed costs Other Cost savings +55 • Pricing more than offset variable Investments -95 and fixed costs inflation Inflation -115 Business activity -155 Net pricing Variable remuneratio
Slide 22: Key figures
Key figures Q4 Q4 % FY FY % Underlying, in € million 2022 2021 yoy 2022 2021 yoy Net sales 3,286 2,703 +21.6% 13,426 10,105 +32.9% EBITDA 736 572 +28.6% 3,229 2,356 +37.0% EBITDA margin 22.4% 21.2% +1.2pp 24.0% 23.3% +0.7pp EBIT 517 374 +38.4% 2,426 1,600 +51.6% Net financial charges -39 -54 +27.3% -
Slide 23: Segment review
Segment review Underlying, in € million Q4 Q4 FY FY % yoy % organic % yoy % organic 2022 2021 2022 2021 Net sales 3,286 2,703 +21.6% +15.2% 13,426 10,105 +32.9% +25.6% Materials 1,034 751 +37.7% +31.2% 4,075 2,903 +40.4% +32.6% Specialty Polymers 787 555 +41.7% - 3,121 2,173 +43.6% - Composite Mater
Slide 24: Segment review
Segment review Q4 Q4 FY FY Underlying, in € million % yoy % organic % yoy % organic 2022 2021 2022 2021 Capex in continuing operations 458 324 +41.3% - 1,022 736 +38.8% - Materials 400 251 +59.4% - Chemicals 284 212 +34.0% - Solutions 242 172 +40.7% - Corporate & Business Services 96 101 -5.1% - Cas
Slide 25: Strengthening our balance sheet
Strengthening our balance sheet Reduction in net debt and provisions continue Net debt 2021 - 2022 (in € million) Provisions 2021 - 2022 (in € million) Leverage -0.6x Leverage 1.7x 1.1x Underlying net debt slightly down at €3.6 billion Provisions decreased by €503 million to €2.1 billion, driven by:
Slide 26: 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 1.1x S&P Negative outlook Period 31 December 2021 31 December 2022 Variation over the period BBB Bond type Face value Avg. maturity Avg. cost Face value A
Slide 27: 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 28: 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