Solvay new G.R.O.W. strategy to drive growth, cash and returns 

November 7, 2019 - Solvay just released its strategy review, with a clear objective of unleashing Solvay's full potential and accelerating value creation.  Ilham Kadri, CEO and Karim Hajjar, CFO shared our strategy roadmap with analysts and investors during a live webcast, which replay can be found here below.

Solvay 2019 Strategy Review

Download our Strategy Presentation 


Our strong foundations

Solvay has undergone an intense portfolio transformation, with a sequence of more than 50 M&A deals since 2012 - the most significant being the acquisition of Rhodia and Cytec. This context and decentralized operating model created organizational complexity and silos that led to sub-optimal capital allocation and structural inefficiencies.

The last key step in our transformation is to simplify Solvay to unleash its full potential - to bring together teams from these different legacies and to engage all our employees around ONE Solvay, a mission and a true customer culture. 

The arrival of Ilham Kadri in March 2019 as CEO marked a milestone in the development of a new Solvay. Her mandate? Develop a clear and shared vision to unleash the full potential of the Group.

Listening to our stakeholders (customers, investors and employees) provided us with valuable, useful and necessary information in the process of redefining our identity and establishing that vision. 

As the world becomes more populated, urbanized and prosperous, demand for food, water, and energy will continue to rise, and the pace at which we’re consuming our planet’s resources is not sustainable.  At Solvay, we will be part of the solution. 

Initial insights confirmed our businesses are closely aligned with the powerful megatrends that drive growth in our end markets, and in those markets we have #1 or #2 positions. Science, innovation, and sustainability are part of our DNA, and the passion, engagement, and talent of our people are a strong base that defines Solvay today.


Our new G.R.O.W. strategy

What we'll do differently and how

Our G.R.O.W. strategy is the result of a comprehensive strategic review of our entire portfolio. We will unleash Solvay’s full potential through a disciplined and differentiated allocation of resources across the Group, based on distinct business mandates and enabled by our new operating model, Solvay ONE.

Solvay has realigned its businesses into three segments, MATERIALS, CHEMICALS and SOLUTIONS, and assigned them with a distinct mandate and ambition.

We will focus on growth, cash and returns, and will prioritize investment in the highest return opportunities. We will also create a more effective way to serve and innovate with our customers, as we increasingly deliver sustainable solutions that meet the needs of a more ESG-focused world. Therefore, we are well positioned to drive superior value creation for shareholders, customers and all other stakeholders.

Solvay new G.R.O.W. strategy

The restated figures for the segments are available on Solvay’s website.


Materials: Accelerate growth

Our Materials segment comprises our high performance, high margin specialty polymers and composites businesses. Our ambition is to extend our leadership position as a #1 pure play advanced materials business. To realize this, we will accelerate growth.
To further accelerate growth, we will re-align resources from being a product driven organization to being a market driven organization serving aerospace, automotive, healthcare and electronics markets.  We will double-down our investments in innovation and commercial support to focus on attractive, high growth areas — thermoplastics and batteries-- where we have created common platforms with dedicated teams to leverage our expertise and accelerate innovation.

  • Innovation: Research, digital and technical support
  • Customers: Upgrade key account resources and e-commerce platforms
  • Investments: Prioritize investments for growth

Addressed megatrends: lightweighting, electrification, expanding healthcare, IoT digitalization, resource efficiency


Chemicals: Deliver resilient cash

Our Chemicals segment comprises largely mono-technology businesses, including Soda Ash, Peroxides, Coatis, Rusvinyl joint venture--and now we add Silica.  Asset management is a key focus. These businesses all have a demonstrated track record of resilient cash generation. Our ambition is to become the #1 cash conversion chemical player in the industry.

We will take a careful look at any investment opportunity and we will only invest selectively where we expect particularly compelling cash returns, such as our recently announced expansion of soda ash and bicarbonate capacity. 

We view cash generation from Chemicals as an effective way to fund  our attractive growth opportunities in Materials.

  • Innovation: Focus on process innovation
  • Customers: Leverage best-inclass global production assets
  • Investments: Selectively invest in capacity

Addressed megatrends: resource efficiency, expanding healthcare.


Solutions: Optimize returns

Solutions is a mix of businesses operating in diverse niche markets.  It includes Novecare, Technology Solutions, Aroma, and now we add Special Chem. Solvay will optimize these businesses, drive better returns and unlock value.

When we say unlock value, we mean improve returns.  We are not happy with the returns in this segment, which are below WACC. We will therefore allocate limited R&I and Capex that will be prioritized for the right projects.

  • Innovation: Focus on eco friendly solutions
  • Customers: Digitalization, focus on key accounts
  • Investments: Selective in niche opportunities

Addressed megatrends: IoT digitalization, resource efficiency, eco-friendly solutions

Solvay ONE an operating model

An equally important element of our value creation strategy is how we will WIN — with our Solvay ONE operating model. Solvay ONE entails a completely new way of working, leveraging  the many strengths and competencies across our enterprise, not just within each business.

The new operating model will impact how we do everything from how we collaborate with our customers, how we allocate our capital and R&I resources, and our approach to cost and cash management.

Solvay will deliver €300 million to €350 million of cost savings on a run rate basis by 2024. Effective management of pension liabilities, debt and working capital will generate approximately €500 million in additional cash flow cumulatively over the period.


Maximizing profitable growth and cash generation shareholder returns

This strategic roadmap is about maximizing profitable growth and cash generation shareholder returns. At Solvay, we have a strong foundation upon which to build, with leadership positions and sustainable solutions tied to megatrends. We are backed by a heritage and culture of innovation, and some of the most talented employees in the industry.  With our new distinct business mandates and our Solvay ONE operating model, we can deliver growth, cash and returns to unleash Solvay’s full potential.   

Our capital deployment priorities:

  • Disciplined approach to Capex, R & I and portfolio
  • Reduce liabilities
  • Maintain stable and growing dividend
  • Maintain investment grade rating


Reflecting our new strategy, we have set mid-term financial targets through 2024


2019 Estimate



Underlying EBITDA growth

~ 2% to ~ 3%

Mid-single digit / year average

50% Materials
25% Chemicals
25% Solutions

FCF conversion [1]

Around 22%

Exceed 30% by 2024

More than  ~€150m FCF[2] run rate


Around 8%

Exceed 11% by 2024

More than
~€300M EBIT
run rate

2020 outlook to be communicated in February 2020
All targets are on an organic basis (at constant forex and scope)

[1] FCF Conversion: FCF to Solvay shareholders (before netting of dividends paid to Non Consolidated
Interests) divided by the EBITDA
[2] FCF to Solvay shareholders

Ilham Kadri visiting Solvay's historical site in Bernburg Germany
Unleashing Solvay’s full potential.

New Solvay G.R.O.W. Strategy Unveiled