Since the end of 2015, the Group has observed increased volatility in commodity markets and inventory adjustments for smart devices applications that are expected to continue in the first quarter of the year. In this environment, and assuming no further deterioration in market conditions, Solvay expects its REBITDA in 2016 to grow by high-single digits compared to the 2015 pro forma REBITDA  of €2,336 m (including Cytec).
Growth this year will likely be back-ended, reflecting the relatively strong comparables in the first half of 2015, destocking in smart devices, the phasing of our innovations and the benefits from Cytec synergies. More specifically, growth will be driven by volumes and continued evidence of pricing power as a result of the excellence programs, which are on course to exceed €800 m cumulative benefits to REBITDA by the end of 2016.
With €20 m of annual cost savings already achieved by January 1, Solvay is confident that Cytec integration cost synergies alone will exceed €100 m p.a. by 2018. Revenue synergies will be additional to that delivery.
Solvay anticipates pro forma REBITDA growth across all its four operating segments :
- Advanced Materials: Growth from its diversified end-markets will overcome the impact of first-quarter destocking in smart devices. In aerospace, continued growth is expected from the ramp-up of aircraft platforms containing more composites,
- Advanced Formulations: Growth in health and personal care, agro and Technology Solutions’ businesses is expected to offset continuing weakness in oil and gas markets;
- Performance Chemicals: Continued delivery in excellence programs is to be complemented by a gradual recovery in acetate tow filter demand;
- Functional Polymers: Profit restoration is expected to continue.
REBITDA growth combined with disciplined capital expenditure should lead to free cash flow in excess of €650 m, more than 30% higher than the prior year pro forma level.
The Group is committed to maintaining its investment grade credit rating. This 2016 outlook is based on a number of assumptions, inter alia, anticipated world GDP growth of ~3%, an oil price of 30 US$/barrel and no recovery in the U.S. oil and gas exploration activities, and on a 1.10 US$/€ exchange rate.
 The current definition of REBITDA equates to Underlying EBITDA going forward.
 Following the acquisition of Cytec, Solvay has re-organized its segment reporting structure to enhance strategic coherence and improve alignment. The segment reorganization is effective as from January 1, 2016 and is presented in the other article of Solvay in Action.