Pro forma 2011: REBITDA of EUR 2 068 million, improvement in each Sector of activity, Pro forma Free Cash Flow of EUR 656 million
The business report shown is based on pro forma figures. Those pro forma figures show the income statement as if the acquisition of Rhodia had become effective from the 1st of January 2010, harmonizing the accounting rules and eliminating the Purchase Price Allocation (PPA) impacts.
The PPA impacts are created by the reevaluation of assets, liabilities and contingent liabilities of Rhodia at fair value at acquisition date (IFRS 3).
This pro forma presentation shows the evolution of the economic performance of the Solvay Group on a full year basis in 2011 and on a comparable basis with 2010.
Pro forma 2011: REBITDA of EUR 2 068 million, an improvement in each
Sector of activity; Pro forma Free Cash Flow of EUR 656 million
- Overall sustained level of activity with sales volumes up by 3% with constant perimeter
- Strong improvement in REBITDA of 11% to EUR 2 068 million
- Good generation of Free Cash Flow: EUR 656 million on a pro forma basis
4th quarter of 2011: REBITDA of EUR 355 million and
Free Cash Flow of EUR 246 million
- Good overall resilience in sales; significant slowdown in demand for Vinyls in Europe, and to a lesser extent, in Polyamide Materials
- First contribution of Rhodia to REBITDA amounted to EUR 231 million
- Group REBITDA down by 23% on a pro forma basis primarily due to Vinyls in Europe
- Priority given to cash: significant decrease of inventories with a negative impact on result estimated to EUR 50 million; Free Cash Flow generation of EUR 246 million.
- Net result: EUR 122 million
Dividend proposed: EUR 3.0667 gross per share, stable compared to 2010.
Quote of the CEO
The first contribution by Rhodia to the Group’s quarterly results is substantial. It confirms the ambition pursued to create a leading chemical player serving highly diversified markets globally, with reduced cyclical exposure. With 2/3 of its sales in resilient market segments and 40% in fast growing regions, Solvay is well positioned to capture growth opportunities in promising business segments responding to the industry’s undergoing megatrends. Potential cost savings will be an additional source of value creation.
In an uncertain economic environment in Europe and in some segments of the demand, but differentiated from one world region to another, overall market conditions seem to progressively recover. In this context, Solvay emphasizes a stringent operational and financial management. As a major player in chemistry and a global leader in its activities, Solvay enjoys solid competitive advantages. The good progress with Rhodia integration and the deployment of Horizon are essential levers.
Integration of Rhodia into Solvay is progressing as planned
The integration process is combining Solvay’s and Rhodia’s strengths and excellence.
Significant actions have already been launched.
Cost savings programs related to procurement and logistic have been launched and will generate savings of EUR 250 million per year. They will be fully effective within 3 years.
The new corporate function organizations should be put into place in the first half of 2012. The program to align the other functions is continued.
Solvay Energy Services was created on January 1, 2012.
Solvay is confident in its capacity to deliver the announced integration synergies of EUR 250 million per year by 2014. They will be added to the
Horizon program savings amounting to EUR 120 million per year from 2012.
These two optimization programs should generate more than EUR 100 million in gross savings1during 2012.
1 Before associated costs, one-off costs