Skip to main content

Solvay 2023 third quarter results

November 3, 2023 at 7 a.m. CEST

Solvay 2023 third quarter results

Strong cash generation and sustained margins in a weak demand environment

 

Highlights

  • Net sales in the third quarter of 2023 were down by -20.3% organically versus a record Q3 2022 as expected due to -15% lower volumes (€-512 million) in a weaker macro environment and -5% lower prices (€-188 million) in a context of lower raw material costs and energy prices. On a sequential basis, net sales were down -11% versus Q2. The volume reduction was broad based across regions and businesses. 
  • Structural cost savings for the first nine months of 2023 amounted to €63 million, bringing the total savings since 2019 to €530 million.  
  • Underlying EBITDA of €702 million in Q3 2023 was down by -18.5% organically compared to a record Q3 2022 driven by lower volumes, partly offset by €36 million in positive net pricing and €41 million in lower fixed costs. Nine months EBITDA at €2,331 million is only down -1% organically versus 2022, a clear indication that strong historic pricing and cost discipline momentum is being maintained.
  • The underlying EBITDA margin of 25.6% in Q3 2023 was sustained relative to Q3 2022 despite lower volumes, while nine months EBITDA margin of 25.9% is +1.3pp higher, mainly as a result of positive net pricing and cost discipline. 
  • Underlying Net Profit was €340 million in Q3 2023 compared to €509 million in Q3 2022.  
  • Free Cash Flow of €346 million in Q3 2023 resulted in a nine-month 2023 total of €1,027 million and a FCF conversion ratio of 39.4%.     
  • ROCE was 15.2%, broadly in line with Q3 2022.
  • Continued strengthening of the balance sheet with underlying net debt at €2.8 billion, which translated to a historic low leverage of 0.9x.
  • As explained on page 2, an interim dividend of €1.62 gross per share has been validated by the Board of Directors, in line with historical interim dividend policy to be paid by Solvay SA on January 17, 2024.

 

   Third quarter   Nine Months
Underlying (in € million)   2023 2022 % yoy % organic  2023 2022 % yoy % organic
Net sales  2,747 3,609 -23.9% -20.3%  9,001 10,141 -11.2% -9.6%
EBITDA  702 917 -23.5% -18.5%  2,331 2,493 -6.5% -1.2%
EBITDA margin  25.6% 25.4% +0.1pp   25.9% 24.6% +1.3pp
FCF  346 452 -23.4%   1,027  924  +11.1%
FCF conversion ratio (LTM)  39.4%  36.8%  +2.6pp   39.4%  36.8%  +2.6pp
ROCE (LTM)   15.2%  15.4%  -0.2pp  –    15.2% 15.4% -0.2pp  – 

 

Ilham Kadri, CEO

“This quarter marks the last reporting period for 160 year-old Solvay as it exists today, as we prepare to separate into two respected industry leaders. I’m so proud of what our teams have accomplished again this quarter, with positive net pricing and additional cost savings leading to higher EBITDA margins and cash generation in the context of a weak demand environment. It’s clear that we are truly a stronger company today on all fronts. With our new leadership and board teams now in place and the highest level of people engagement in the past 5 years at 76%, we are well equipped to embark on a new journey filled with untapped opportunities, enhanced focus, and an exciting future for all.”  

2023 Outlook

Given the current volume momentum, we reconfirm our full year guidance, at the lower end of the prior EBITDA guidance range.

Register to the webcast here       Link to financial report

 

 

Attachments

Disclaimer & Cookie Notice

Welcome to GOLDEA services for Professionals

Before you continue, please confirm the following:

Professional advisers only

I am a professional adviser and would like to visit the GOLDEA CAPITAL for Professionals website.

Cookie Notice

We use cookies to improve your experience on our website

Information we collect about your use of Goldea Capital website

Goldea Capital website collects personal data about visitors to its website.

When someone visits our websites, we use a third party service, Google Analytics, to collect standard internet log information (such as IP address and type of browser they’re using) and details of visitor behavior patterns. We do this to allow us to keep track of the number of visitors to the various parts of the sites and understand how our website is used. We do not make any attempt to find out the identities or nature of those visiting our websites. We won’t share your information with any other organizations for marketing, market research or commercial purposes and we don’t pass on your details to other websites.

Use of cookies
Cookies are small text files that are placed on your computer or other device by websites that you visit. They are widely used to make websites work, or work more efficiently, as well as to provide information to the owners of the site.