Solvay Sa · EURONEXT:SOLB
Solvay Sa — FY2021 Earnings Presentation
31 slides from Solvay Sa's earnings presentation, Feb 23, 2022
Slide 1: Full year 2021 Results
Dr. Ilham Kadri CEO and President of the Executive Leadership Team of Solvay Karim Hajjar Full year CFO of Solvay 2021 Results Philippe Kehren February 23, 2022 President of Soda Ash & Derivatives Full year 2021 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: Health and safety remain our top priority
Health and safety remain our top priority Measures in place Likely cases quarantine ● Safety measures for all our employees ● Responsible business travel policy Confirmed cases Solvay Solidarity Fund ● €6.4 million to date (individuals and community support) Source: Solvay page 3 Full year 2021 Earni
Slide 4: Making meaningful progress on the climate
Making meaningful progress on the climate Progress 2030 Target 2021 Comment versus 2018 targets Achieved 11% in aggregate versus 6.6% Paris Agreement -14% Reduce by 30% Align GHG emissions with Paris Agreement and SBTi (a) 11Mt -11% structural (-2.5%/yr) CLIMATE 27 Exit announced at Rheinberg in 202
Slide 5: ESG credentials widely recognized
ESG credentials widely recognized AA rating “Medium risk” Recognition on a scale from on Biodiversity AAA-CCC Member of FTSE4Good B rating #5 in the sector Prime company Top 1% A- CDP Climate Change page 5 Full year 2021 Earnings
Slide 6: Full year 2021 performance
Full year 2021 performance Double-digit sales, EBITDA and Returns Free ROCE Net Sales EBITDA Underlying Cash Flow Return on capital employed Continuing operations € 10.1bn € 2,356 m € 843 m 11.4% ● +17% organically yoy ● New record level ● 11th quarter of positive FCF ● New record level ● +12% drive
Slide 7: Soda Ash overview
Soda Ash overview Philippe Kehren President, Soda Ash & Derivatives
Slide 8: Global leader in Soda Ash & Derivatives
Global leader in Soda Ash & Derivatives Step-changing our Resilient business in Global leader with world environmental transition growing end markets class assets and competitiveness • Volumes back to pre-COVID levels • 75% of our capacity in the first quartile of • Already achieved 5%* reduction the
Slide 9: Essential chemicals serving growing and diverse end markets
Essential chemicals serving growing and diverse end markets • Glass for building • Glass for containers • Water softener for • Sodium bicarbonate for • Photovoltaic panels detergents clean air - SOLVAir® • Additive in other industrial • Feed, food, pharma applications page 9 Full year 2021 Earnings
Slide 10: Resilient top- and bottom-line
Resilient top- and bottom- line Demand back to pre-COVID levels Market volume and price evolution, IHS Solvay soda ash profitability evolution (Indexed to 2018) Years Years Profitability page 10 Full year 2021 Earnings Source: IHS (October 2021), based on average annual prices, Solvay internal data
Slide 11: Market-leading cost position
Market-leading cost position European delivered costs Due to highly competitive assets (illustrative) Solvay plants Other plants Regional Global assets Solvay “Regional” assets Solvay “world-class” assets best positioned to serve inland local customers best positioned to serve seaborne customers Tur
Slide 12: Paving the way to carbon neutrality
Paving the way to carbon neutrality Soda Ash & Derivatives energy transition plans underway * % of Group GHG emissions versus 2018 basis Biomass (Rheinberg, DE) GHG impact -4%* Stage 1 in 2021 Waste-To-Energy Stage 2 in 2025 (Dombasle, FR) GHG impact -2%* Coal to gas 2024 (Greenriver, WY, USA) Bioma
Slide 13: Materials
Materials Q4 2021 performance NET SALES EBITDA EBITDA y/y organic y/y organic margin Highlights + + 20 % 31 % 28 % • Record sales levels in Specialty Polymers driven primarily by automotive, EV battery and electronic markets • Civil aerospace demand began to recover thanks to single-aisle aircraft p
Slide 14: Solutions
Solutions Q4 2021 performance NET SALES EBITDA EBITDA y/y organic y/y organic margin Highlights + + 28 % 29 % 17 % • Broad based volume growth and pricing driven by agro, coatings and mining • Special Chem saw higher sales to electronics offset by lower sales to automotive related to the chip shorta
Slide 15: Chemicals
Chemicals Q4 2021 performance NET SALES EBITDA EBITDA y/y organic y/y organic margin Highlights + + 18 % 37 % 32 % • Exceptional performance in Coatis and Rusvinyl, driven by strong volumes and pricing • Higher sales at Soda Ash sales driven by pricing actions Net sales YoY reported YoY organic • Pe
Slide 16: Acceleration in pricing actions
Acceleration in pricing actions* Overcame €465m of inflationary costs in 2021 % price increase Q4 acceleration expected to continue into 2022 ~5%pts yoy improvement 2020 2021 page 16 Full year 2021 Earnings * Impact on net sales
Slide 17: Structural cost reduction
Structural cost reduction ~80% of 2024 cost savings achieved Realized in FY 2021 Total costs savings to date ~€ Permanent structural levers ● Restructuring 35% of total € 213m 390 m ● Indirect costs reductions 40% Costs savings by 2024 Productivity efficiencies 25% ● Realized in FY € 2020 € 500 m 175
Slide 18: Double-digit profit growth in 2021
Double-digit profit growth in 2021 €2,356m in 2021 vs. €1,945m in 2020 Net pricing Fixed costs Other 2021 earnings demonstrated Cost Savings: +77 Forex Structural +213 • Quality of our portfolio Scope Volume & mix Reversal of temporary -136 conversion Inflation - 58 Variable remuneration -57 Other -36
Slide 19: Strong free cash flow generation
Strong free cash flow generation Driven by profit, working capital discipline and reinvestments €843m in 2021 vs. €963m in 2020 Capex Working capital Main drivers Provisions Financing • Higher profits Taxes & Others • Reinvestments in growth • Lower pensions and financing EBITDA FCF 2021 2021 Comparison
Slide 20: 2022 Full Year Outlook
2022 Full Year Outlook EBITDA Free cash flow Underlying Continuing operations Mid-single digit to exceed growth* € 650m * based on organic growth page 20 Full year 2021 Earnings
Slide 21: Q&A
O&A Y¥fno wl % solvay.com
Slide 22: Annexes
Annexes page 22 Full year 2021 Earnings
Slide 23: Reinventing Solvay to unleash our full potential
Reinventing Solvay to unleash our full potential WHY HOW WHAT Our Our Our Our Purpose Strategy Organization Solutions and Culture We align our We bond people, G Growth technologies to customer ideas Our new common and societal needs driven and elements to operating model R Resilience by secular tren
Slide 24: 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% Latin America 13% 2% 25% 10% Asia and rest of the world 34% 36% 25% 40% End markets (% 2021 Net Sales) Group Materials Chemicals Solutions Automoti
Slide 25: 2030 Solvay One Planet goals
2030 Solvay One Planet goals 10 ambitious objectives to reduce our global impact 2020 results (Baseline 2018) Align greenhouse Phase out Reduce pressure CLIMATE gas emissions with coal on biodiversity1 Paris Agreement & SBTi* Fight against Reduce by 30% (-2.5% p.a.) Achieve 100% Reduce by 30% climat
Slide 26: Key figures
Key figures Q4 Q4 % FY FY % Underlying, in € million 2021 2020 yoy 2021 2020 yoy Net sales 2,703 2,214 +22.1% 10,105 8,965 +12.7% EBITDA 572 464 +23.4% 2,356 1,945 +21.1% EBITDA margin 21.2% 21.0% +0.2pp 23.3% 21.7% +1.6pp EBIT 374 260 +43.7% 1,600 1,110 +44.1% Net financial charges -54 -79 +32.3% -2
Slide 27: Segment review
Segment review Segment review Underlying (in € million) Q4 2021 Q4 2020 % yoy % organic FY 2021 FY 2020 % yoy % organic Net sales 2,703 2,214 +22.1% +22.4% 10,105 8,965 +12.7% +17.0% Materials 751 620 +21.2% +20.2% 2,903 2,695 +7.7% +11.5% Specialty Polymers 555 456 +21.9% - 2,173 1,820 +19.4% +20.4
Slide 28: Segment review
Segment review Segment review Underlying % % Q4 2021 Q4 2020 % yoy FY 2021 FY 2020 % yoy (in € million) organic organic EBIT 374 260 +43.7% - 1,600 1,110 +44.1% - Materials 143 92 +55.4% - 637 460 +38.6% - Chemicals 225 149 +50.6% - 782 552 +41.6% - Solutions 136 82 +65.1% - 511 350 +46.3% - Corpora
Slide 29: Balanced maturities
Balanced maturities Deleveraging and reduced of cost of debt Financial debt [1] in million € and $ NET DEBT Leverage ratio 1.7x S&P stable outlook Period 31 December 2020 31 December 2021 Variation over the period BBB Face value Avg. maturity Avg. cost Face value Avg. maturity Avg. cost Face value A
Slide 30: 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 31: Thank you.
Thank you. Investor Relations Shareholders services [email protected] [email protected] Rue de Ransbeek, 310 Rue des Champs Elysées, 43 1120 Brussels, Belgium 1050 Brussels, Belgium Follow us on solvay.com