Slide 1: Second Quarter 2022 Results
Dr. Ilham Kadri CEO and President of the Executive Leadership Team of Solvay Second Quarter 2022 Results Karim Hajjar CFO of Solvay July 28, 2022 Second Quarter 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: Second quarter 2022 performance
Second quarter 2022 performance +33% sales growth driven by price and volume leads to record EBITDA Free ROCE Net Sales EBITDA Underlying Cash Flow Return on capital employed Continuing operations € € € 3.5bn 864 m 257m 13.7% ● +33% organically yoy ● Up by +35% organically yoy ● 13th quarter of posi
Slide 4: Strong pricing continued in Q2 2022
Strong pricing continued in Q2 2022 € 690m in price overcame €414m of inflationary costs 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 Solvay Pricing €13 €23 €1 -€13 €4 €29 €139 €269 €475 €690 Variable costs €2 -€8 €30 €19 -€15 -€50
Slide 5: Gearing toward net zero emissions with new scope 3 target
Gearing toward net zero emissions with new scope 3 target Our supplier Circular economy engagement program partnerships -24% 300 participants Solvay, Veolia and Renault collaboration to recycle EV batteries scope 3 GHG emissions by 2030* 136 in partnership with the Ellen MacArthur Foundation partici
Slide 6: Innovations, investments, and customers that support our future growth
Innovations, investments, and customers that support our future growth Deploying sustainable Customer recognition Investing for growth solutions ● Boeing ● Commitment to ● Greenfield site in USA ● Lockheed Martin phase out use of (Arizona) for new eH2O2 ● Samsung fluorosurfactants operations to suppor
Slide 7: Materials
Materials Q2 2022 performance Net sales EBITDA EBITDA y/y organic y/y organic margin Highlights + + 38 % 45 % 32.5 % • Specialty Polymers sales increased significantly to a new record, reflecting continued strong demand in all markets, and most notably automotive, batteries, medical devices, and elect
Slide 8: Chemicals
Chemicals Q2 2022 performance Net sales EBITDA EBITDA y/y organic y/y organic margin Highlights + + 27 % 18 % 28.2 % • Higher sales in Soda Ash & Derivatives driven by necessary price actions to offset significant rise in raw material and energy costs • Peroxides sales driven by strong demand in the
Slide 9: Solutions
Solutions Q2 2022 performance Net sales y/y organic EBITDA y/y organic EBITDA margin Highlights • Novecare increased significantly driven by pricing and volume growth + + in agriculture, coatings, and home & personal care 33 % 58 % 22.3 % • Special Chem saw higher sales in electronics that were parti
Slide 10: Structural cost reduction
Structural cost reduction ~85% of 2024 cost savings achieved Total costs savings to date ~€ Realized in FY 2020 Realized in FY 2021 Realized in H1 2022 430 m ~€ ~€ ~€ 175m 213m 44m Costs savings target by 2024 € Permanent structural levers 500 m ● Restructuring ~45% of total ● Indirect costs reducti
Slide 11: Double-digit profit growth
Double-digit profit growth Margin +0.3pp Margin 24.5% 24.8% € 864m in Q2 2022 vs. €602m in 2021 Million Fixed costs Other Main drivers € Cost savings +15 Investments -30 • Pricing more than offsetting Net pricing Inflation -30 Business activity -40 variable costs inflation Others -40 Forex • Sustained
Slide 12: Strong free cash flow generation
Strong free cash flow generation € million € 257m in Q2 2022 Capex vs. € 135m in 2021 Working capital Main drivers Provisions Financing Taxes €-90m • Higher profits Others €+3m • Investment in growth • Higher working capital EBITDA FCF Q2 2022 Q2 2022 • No dividend from Rusvinyl JV Comparison to 2021
Slide 13: Solvay's natural gas usage in Europe
Solvay’s natural gas usage Finland Total sites: 1 in Europe Germany Using natgas: 1 Total sites: 6 Using natgas: 4 Netherlands Total sites: 2 Using natgas: 1 Top-10 sites Belgium Total sites: 6 90% of total Using natgas: 4 32 of 45 sites use natgas UK Total sites: 4 Using natgas: 4 Top-20 sites Fran
Slide 14: Contingency plans launched to mitigate the risk and ensure business continuity
Contingency plans launched to mitigate the risk and ensure business continuity Activities in our control Industrial Procurement ● Ensure production continuity, prioritize critical/ high-margin for our ● Ensure security of supply of natgas & critical raw materials customers currently sourced from Eur
Slide 15: 2022 Full-year outlook increased
2022 Full-year outlook increased EBITDA Free cash flow underlying continuing operations to grow between Around 14% and 18% € 750 m previously mid-to-high single digit previously €650 m Organic growth page 15
Slide 16: Q&A
O&A Y¥fno wl % solvay.com
Slide 17: Annexes
Annexes page 17 Second Quarter 2022 Earnings
Slide 18: Key figures
Key figures Underlying, in € million Q2 2022 Q2 2021 % yoy H1 2022 H1 2021 % yoy Net sales 3,477 2,456 +41.5% 6,532 4,829 +35.3% EBITDA 864 602 +43.4% 1,576 1,185 +32.9% EBITDA margin 24.8% 24.5% +0.3pp 24.1% 24.5% -0.4pp EBIT 674 424 +59.1% 1,200 805 +49.0% Net financial charges -57 -54 -5.8% -106 -1
Slide 19: Segment review
Segment review Underlying, in € million Q2 2022 Q2 2021 % yoy % organic H1 2022 H1 2021 % yoy % organic Net sales 3,477 2,456 +41.5% +32.6% 6,532 4,829 +35.3% +29.5% Materials 1,048 711 +47.4% +38.2% 1,927 1,400 +37.7% +31.2% Specialty Polymers 810 536 +51.0% - 1,481 1,047 +41.4% - Composite Materia
Slide 20: Strengthening our balance sheet
Strengthening our balance sheet Reduction in net debt and provisions continue Net debt in million € vs end of 2021 Provisions in million € vs end of 2021 Underlying net debt at €4 billion Provisions decreased by ~€374 million to €2.23 billion ● Higher free cash flow generation in 2021 ● Higher discou
Slide 21: Balanced maturities
Balanced maturities Deleveraging and reduced of cost of debt Financial debt [1] in million € and $ NET DEBT Leverage ratio 1.5x S&P stable outlook Bond type Period 31 December 2021 Face value Avg. maturity Avg. cost Face value 30 June 2022 Avg. maturity Avg. cost Variation over the period Face value
Slide 22: Market segment & region annual figures
Market segment & region annual figures Region (% 2021 Net Sales) Group Materials Chemicals Solutions Europe 27% 31% 32% 21% North America 26% 31% 18% 29% TOP 3 Market position Latin America 13% 2% 25% 10% in ~ 90% of Asia and rest of the world 34% 36% 25% 40% portfolio End markets (% 2021 Net Sales)
Slide 23: Transition to EV doubles addressable market for Solvay
Transition to EV doubles addressable market for Solvay Electrical & Electronic systems Battery Pack MTM®/ VTM®/ LTM® / HTM® PPA /FKM / PPS /PEEK / PAI Structural Thermal & air & semi-structural parts Structural management systems & semi-structural parts Epoxy prepregs PPA /FKM / PPS /PEEK / PAI E-mo
Slide 24: 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
Slide 25: Thank you.
Thank you. Investor Relations Shareholders services investor.relations@solvay.com shareholders@solvay.com Rue de Ransbeek, 310 Rue des Champs Elysées, 43 1120 Brussels, Belgium 1050 Brussels, Belgium Follow us on solvay.com