Solvay Sa · EURONEXT:SOLB
Solvay Sa — Investor Day (September 2016)
26 slides from Solvay Sa's investor day presentation, Sep 29, 2016
Slide 1: More Value That Stands the Test of Time
MORE VALUE THAT STANDS THE TEST OF TIME September 29, 2016 London
Slide 2: Disclaimer
DISCLAIMER 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 t
Slide 3: That Stands the Test of Time - Karim Hajjar, CFO
THAT STANDS THE TEST OF TIME Karim Hajjar Member of the Executive Committee & CFO
Slide 4: Looking Back: Value Delivery 2014-2015
LOOKING BACK VALUE DELIVERY 2 years 2 years 2014 - 2015 2014 - 2015 PROFIT GHG intensity -18% EBITDA [1] growth 10% PLANET kg CO2 eq. emissions / € EBITDA reduction to 7.3 yoy Sustainable Solutions 14% % Group sales increase to 33% CASH Free cash flow € 1.0 bn over 2 years Accident rate -27% PEOPLE
Slide 5: Financial Value Delivery Improved vs Benchmarks
FINANCIAL VALUE DELIVERY IMPROVED VS BENCHMARKS PROFIT CASH RETURNS EBITDA margin Cash conversion HOLT CFROI [2] 18.5% 17.5% 16.2% 16.6% 16.7% 65.2% 15.1% 62.0% 57.4% 5.8% 5.4% 51.7% 50.4% 5.0% 4.2% 4.3% 50.2% 2.7% Solvay Median and range of peers [1] 2010 2011 2012 2013 2014 2015 2010 2011 2012 201
Slide 6: More Value That Stands the Test of Time: 2016-2018 Targets
MORE VALUE THAT STANDS THE TEST OF TIME 3 years 3 years 2016 - 2018 2016 - 2018 GHG intensity -20% PLANET PROFIT kg CO2 eq. emissions / € EBITDA reduction to 5.8 Mid-to-high EBITDA [1] growth single digit Sustainable Solutions 7% % yoy % Group sales increase to 40% Accident rate -10% > € 2.4 bn PEOP
Slide 7: Reducing Greenhouse Gas Emissions to Reduce Climate Change Impact
REDUCING GREENHOUSE GAS EMISSIONS TO REDUCE CLIMATE CHANGE IMPACT GHG INTENSITY 8.1 (in kg CO2 eq. / € EBITDA) 7.3 KEY LEVERS 5.8 4.8 20% Portfolio 40% SolWatt excellence • Energy efficiency 2014 2015 2018 2025 • Energy mix 2.3 1.6 0.6 Capex challenge 2015 CO2 eq. EBITDA GHG intensity • Internal car
Slide 8: Building an Upgraded Portfolio with More Sustainable Solutions
BUILDING AN UPGRADED PORTFOLIO WITH MORE SUSTAINABLE SOLUTIONS SUSTAINABLE PORTFOLIO MANAGEMENT (in % of net sales) 2014 2018 2025 Low 50% of production & supply chain 25% 40% KEY LEVERS Environmental footprint 60% Sustainable solutions Portfolio Neutral impact 15% Capex Challenged applications High
Slide 9: Mid-to-High Single Digit Profit Growth
MID-TO-HIGH SINGLE DIGIT PROFIT GROWTH UNDERLYING EBITDA (in € m) OPERATIONAL EXCELLENCE Mid-to-high single digit € 450 m by 2018 % yoy 600 Cytec synergies CYTEC SYNERGIES 2,336 ~300 Business growth € 150 m by 2018 Cytec (net of 1,783 1,663 Cost Operational sales 1,955 inflation excellence erosi
Slide 10: More Operational Excellence: €450m by 2018
MORE OPERATIONAL EXCELLENCE € 450 m BY 2018 PURCHASING & MANUFACTURING SolWatt SUPPLY CHAIN EXCELLENCE EXCELLENCE EXCELLENCE • Operational costs • Inventory • Energy management efficiency • Maintenance costs • Payables • Energy mix • Capex spending & asset management utilization (OEE) • Freight mana
Slide 11: More & Faster Synergies from Cytec
MORE & FASTER SYNERGIES FROM CYTEC 50% INCREASE TO € 150 m BY 2018 EXPECTED 150 SYNERGIES Customer Market BY 2018 REVENUES Innovation > 100 relations penetration (in € m) 50% Streamlined Supply Corporate > 100 COST & G&A operating chain & > 80 model procurement Initially Currently 2016 2018 2018+
Slide 12: All Segments to Contribute Growth
ALL SEGMENTS TO CONTRIBUTE GROWTH UNDERLYING EBITDA (in € m) Mid-to-high single digit % yoy 2,336 MID-TO-HIGH MID-TO-HIGH GDP GROWTH SINGLE DIGIT SINGLE DIGIT & PROFIT GROWTH GROWTH RESTORATION • Innovation • Innovation • Operational • Synergies • Synergies excellence • Dynamic • Selective market gr
Slide 13: Capex Intensity Down & Cash Conversion Up
CAPEX INTENSITY DOWN & CASH CONVERSION UP CAPEX [1] CASH CONVERSION (in € m) 57% >60% (1,082) 52% 54% Cytec ~(950) (861) Reduced (738) intensity to ~100% Eco S. depreciation Solvay Median and range of peers [2] 2013 2014 2015 2016e 2017e 2018e 2013 2014 2015pf 2016e 2017e 2018e CAPEX down CAPEX disc
Slide 14: More Cash: FCF > €2.4bn Over 3 Years to 2018
MORE CASH FCF > € 2.4 bn OVER 3 YEARS TO 2018 FREE CASH FLOW Underlying EBITDA (in € m) mid-to-high single digit growth > € 2.4 bn Capex intensity 656 >650 to reduce Disc. 524 ops. 492 Net working capital intensity 511 Cytec stable Disc. ops. 391 Sustainable FCF growth Pensions & other provisions 19
Slide 15: Cash Returns to Improve 50-100 bp
CASH RETURNS TO IMPROVE 50-100 bp SOLVAY BASIS CFROI 8% 6.9% 6.9% 6.9% 50-100 bp 6.1% 80 bp Cytec Driven by goodwill • Growth in profit & cash generation • Reduction in capital intensity 4% 2013 2014 2015 2016e 2017e 2018e At constant forex and scope 2016 Capital Markets Day 15 September 29, 2016
Slide 16: Maintaining a Solid Financial Profile Balancing Value & Risk Management
MAINTAINING A SOLID FINANCIAL PROFILE BALANCING VALUE & RISK MANAGEMENT Robust & efficient Deleveraging capital structure over medium-term Underlying net debt [1] € 7 bn 2.9x net debt / EBITDA [3] Average maturity [2] 5.7 years to decrease, supported by: Unused credit facilities € 2.4 bn • E
Slide 17: Enduring Policy to Maintain or Grow Dividend
ENDURING POLICY TO MAINTAIN OR GROW DIVIDEND DIVIDEND GROWTH DIVIDEND YIELD (in € / share [1]) 3.30 4.1% 3.7% 3.6% ~5% CAGR 2.9% 3.0% 3.0% 0.62 Solvay Median and range of peers [2] 1982 1988 1994 2000 2006 2012 2010 2011 2012 2013 2014 2015 Track record of DIVIDEND YIELD DEPENDABLE REWARD in line wi
Slide 18: More Value That Stands the Test of Time
MORE VALUE PLANET PROFIT PEOPLE CASH SOCIETY RETURNS THAT STANDS THE TEST OF TIME 2016 Capital Markets Day 18 September 29, 2016
Slide 19: Appendix
S SOLVAY asking more from chemistry® APPENDIX
Slide 20: Extra-Financial Indicators: Delivery & Targets
EXTRA-FINANCIAL INDICATORS DELIVERY & TARGETS improvement 2013 2014 2015 2018 2025 2014-2015 2016-2018 2015-2025 vs 2013 vs 2015 Vs 2014 GHG intensity 18% 20% 40% 8.8 8.1 7.3 5.8 4.8 PLANET kg CO2 eq. emissions reduction reduction reduction / € EBITDA Sustainable 14pp 7pp 25pp Solutions 19% 25% 33%
Slide 21: Glossary
GLOSSARY Accident rate EBITDA margin Expressed in Medical Treatment Accident Rate (MTAR) or Underlying EBITDA / net sales number of accidents requiring medical treatment / million working hours Employee engagement index Index (0%-100%) probing the engagement of Solvay Capital expenditure (Capex) emp
Slide 22: Glossary
GLOSSARY Net working capital (NWC) intensity Underlying EBITDA Includes inventories, trade receivables and other current Earnings before interest and taxes, depreciation and receivables, netted with trade payables and other current amortization (EBITDA), with IFRS figures adjusted to provide liabili
Slide 23: Speaker's Resume
S SOLVAY asking more from chemistry® FUT! SPEAKER’S RESUME
Slide 24: Speaker's Resume
SPEAKERS’ RESUME Karim Hajjar began his career in 1984 at Grant Thornton Chartered Accountants and became a partner in 1993. He moved to Royal Dutch/Shell in 1995 and undertook a number of roles, the last of which was as Deputy Global CFO of Shell Chemicals. Karim Hajjar held the CFO position of Tar
Slide 25: Contact Information
CONTACT INFORMATION Maria Alcon Hidalgo Bisser Alexandrov Head of Investor Relations Investor Relations, Manager +32 2 264 3694 +32 2 264 3687 E-mail : [email protected] E-mail : [email protected] Kimberly Stewart Valérie-Anne Barriat Head of Investor Relations (effective Octo
Slide 26: www.solvay.com
www.solvay.com SO LVAY asking more from chemistry’