Solvay Sa · EURONEXT:SOLB
Solvay Sa — Q2 2023 Earnings Presentation
26 slides from Solvay Sa's earnings presentation, Aug 3, 2023
Slide 1: Q2 2023 results
Dr. Ilham Kadri CEO and President of the Executive Leadership Team of Solvay Q2 2023 results Karim Hajjar CFO of Solvay August 3, 2023 Second quarter / First half 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 Q2 2023
Pricing supports solid Q2 2023 € € € 3.1 bn 790 m 556 m 16.3% NET SALES EBITDA FCF ROCE % % -9.2 -2.6 organic organic 40% +2.6pp FCF conversion vs Q2 2022 +4.1% pricing -13.2% volumes 25.6% EBITDA margin page 3 Second quarter / First half 2023 Earnings
Slide 4: New biobased polymers for air and skin care
New biobased polymers for air and skin care New PEEK compound for e-motors Partnership towards sustainable aviation technologies and solutions Zotefoams, Spirit, Ascendance Green Hydrogen hub in Italy Flight technologies to decarbonize our operations Second quarter / First half 2023 Earnings
Slide 5: Materials Q2 2023
Materials Q2 2023 Q2 2023 (€m) % YoY % YoY organic Specialty Polymers 821 +1.4% +5% Composite Materials 271 +13.7% +16% Net Sales 1,092 +4.2% +7.3% EBITDA 365 +7.2% +9.4% 33.4% EBITDA Margin (+0.9pp) Q2 Highlights • Specialty Polymers’ sales improved primarily due to sustained prices. Volumes were s
Slide 6: Chemicals Q2 2023
Chemicals Q2 2023 Q2 2023 (€m) % YoY % YoY organic Soda Ash & Deriv. 518 -3% -3% Peroxides 161 -10.3% -9% Coatis 182 -23.1% -24% Silica 153 -8.6% -7% Net sales 1,014 -9.3% -8.9% EBITDA 308 -2.3% +10.3% 30.4% EBITDA Margin (+2.2pp) Q2 Highlights • Soda Ash & Derivatives’ lower volumes from reduction
Slide 7: Solutions Q2 2023
Solutions Q2 2023 Q2 2023 (€m) % YoY % YoY organic Novecare 338 -33.2% -30% Special Chem 255 -10.6% -9% Techn. Solutions 176 -15.2% -14% Aroma Performance 89 -46.7% -46% Oil & Gas Solutions 117 -18.4% -14% Net Sales 975 -25.5% -23% EBITDA 169 -42.1% -39.8% 17.3% EBITDA Margin (-5%pp) Q2 Highlights •
Slide 8: Improved EBITDA margin
Improved EBITDA margin Margin +0.7pp Margin 24.8% 25.6% € € 790m in Q2 2023 million vs. €864m in Q2 2022 Main drivers Forex Scope Fixed costs Other conversion • Higher prices • Lower volumes on subdued Volume & mix Net pricing demand and destocking • Inflation-driven fixed costs but contained by savin
Slide 9: Structural cost reduction
Structural cost reduction 2024 cost savings achieved 1.5 years ahead of time ✔ Total costs savings to date Realized in FY Realized in FY Realized in FY Realized YtD € 502 2020 2021 2022 2023 € € € € m 175m 213m 79m 36m Targeted annual run-rate by 2024 Permanent structural levers € ● ● Restructuring:
Slide 10: Positive free cash flow generation
Positive free cash flow generation € million € Provisions Employee benefits -24 Financing 556m in Q2 2023 Environment -18 Net interests -6 Taxes €-102 Other -34 Hybrid coupons -29 Capex Working Dividends to NCI -2 Other €23 vs. € 257m in Q2 2022 capital Working Main drivers capital • Investments in gr
Slide 11: Strengthening our balance sheet
Strengthening our balance sheet Net debt end of Q2 2023 (in € million) Provisions end of Q2 2023 (in € million) Leverage -0.2x Leverage 1.1x 0.9x Underlying net debt decreased by €539m to €3.05 billion Provisions increased by €417 million, of which €248 million in Q2 2023, to €2.5 ● €681 million str
Slide 12: Investment for more value
Investment for more value € billion ➔ Separation costs below benchmark (3% - 5% of revenues) ➔ Split of ~€3.5bn net debt: ○ EssentialCo: €1.9bn ○ SpecialtyCo: €1.6bn Po2-related End of 2022 underlying net debt End of 2023 Source: figures as announced on June 16 (capital structure) and June 28 (PFAS)
Slide 13: Outlook confirmed
Outlook confirmed FY 2023 EBITDA Free Cash Flow +2% to -5% € 900 million organic growth minimum * On an organic basis means at constant forex and scope. FY 2022 reported underlying EBITDA of €3,229 million included profits from Rusvinyl, which was divested in Q1 2023, and reflected stronger $/€ excha
Slide 14: Q&A
O&A Y¥fno wl % solvay.com
Slide 15: Annexes
Annexes Second quarter / First half 2023 Earnings
Slide 16: On track for December 2023
On track for December 2023 Shareholders’ meeting May 9 Full-year 2022 results Q1 2023 results Q2 2023 results Q3 2023 results February 23 May 4 August 3 November 3 2022 Q1 Q2Q2 Q3 Q4 2023 Webinars Webinars Capital H1 key figures Debt Capital markets Extraordinary Automotive/Batteries Soda Ash, Feb 26
Slide 17: Balanced maturities
Balanced maturities Record low leverage at 0.9x NET DEBT Leverage ratio Record low at Financial debt [1] in € and US$ million 0.9x Expected rating Period 31 December 2022 30 June 2023 Variation over the period Bond type Face value Avg. maturity Avg. cost Face value Avg. maturity Avg. cost Face value
Slide 18: Key figures
Key figures Underlying, in € million Q2 2023 Q2 2022 % yoy H1 2023 H1 2022 % yoy Net sales 3,087 3,477 -11.2% 6,254 6,532 -4.3% EBITDA 790 864 -8.6% 1,629 1,576 +3.4% EBITDA margin 25.6% 24.8% +0.7pp 26.1% 24.1% +1.9pp EBIT 599 674 -11.2% 1,241 1,200 +3.4% Net financial charges -49 -57 +13.1% -98 -106
Slide 19: Segment review
Segment review Underlying, in € million Q2 2023 Q2 2022 % yoy % organic H1 2023 H1 2022 % yoy % organic Net sales 3,087 3,477 -11.2% -9.2% 6,254 6,532 -4.3% -3.9% Materials 1,092 1,048 +4.2% +7.3% 2,114 1,927 +9.7% +11.1% Specialty Polymers 821 810 +1.4% +4.7% 1,594 1,481 +7.6% +9.5% Composite Mater
Slide 20: 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 21: 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 22: 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 22 Second quarter / First half 2023 Earning
Slide 23: 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 23 Second quarter / First half 2023 Earnings Definition of KPIs is available in the glossary of the Press Release
Slide 24: 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 25: 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 26: 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