Full year and 4th quarter 2012 Financial Report
Highlights Q4 2012
Net sales € 2,989 m, up 4% yoy with stable volumes, prices +2%, forex +2%
Adj. REBITDA at € 430 m, up 22% yoy
- Specialty Polymers and Consumer Chemicals continued delivering yoy double-digit growth, whilst Essential Chemicals remained very robust and Acetow & EcoServices resilient
- Difficult market conditions prevailed for Polyamide and Vinyls, and Rare Earths still suffered from Lighting market’s slow down
- Partial reversal of soda ash impairment of € 149 m
- Adj. EBIT at € 349 m compared to € 196 m last year
- Free Cash Flow of € 251 m
- Solvay Indupa reported as Assets held for sale as from Q4’12
Highlights FY 2012
Net sales up 2% yoy to € 12,435 m, with volumes (4)%, prices +2%, forex +3% and scope +1%
Adj. REBITDA at € 2,067 m, up 2% yoy
- Confirmed pricing power1
- Integration completed and faster delivery of cost efficiencies (€ 170 m in 2012 and € 400 m anticipated to 2014, vs 2010 cost base)
- Adj. EBIT at € 1,451 m compared to € 1,420 m last year
- Adj. Net Income (Group Share) of € 710 m compared to € 727 m in 2011 pro forma
- Free Cash Flow of € 787 m and improved Net Debt to € 1.1 bn versus € 1.8 bn in 2011.
Dividend proposed: EUR 3.20 gross per share, +4.3% compared to 2011
IFRS measures (non-PPA adjusted)
PPA charges relate to the impacts from the step-up of inventories and the Depreciation & Amortization from Rhodia’s revalued assets upon the acquisition. Overall net after-tax impact amounted to € (126) m in 2012.
- EBIT: FY’12 at € 1,275 m vs € 555 m in 2011; Q4’12 at € 317 m versus € 7 m the last year quarter;
- Net Income (Group Share): FY’12 at € 584 m vs € 247 m in 2011; Q4’12 at € 181 m versus € (23) m the last year quarter.
Quote of the CEO
Despite the difficult trading conditions experienced by our cycle sensitive businesses throughout the year, the mobilization of our teams and the strong delivery in cost efficiencies and integration synergies allowed us to meet profitability and exceed cash generation expectations. Beyond this performance, 2012 achievements were instrumental in strengthening Solvay’s foundations. We successfully completed the integration and the transformation of the Group, set up a clear strategic vision and put in place a more agile and decentralized organization to support our value creative ambition.
The macroeconomic environment remains contrasted in the beginning of the year, in line with the preceding quarter. The situation in Asia is improving and North America is pursuing its recovery path. However, the situation remains uncertain in Latin America and challenging in Europe. In this context, the Group will continue reshaping its business portfolio, optimizing its industrial footprint, and enhancing the implementation of operational excellence initiatives across the board. Solvay is committed to deliver on its €3 billion REBITDA ambition in 2016 at constant perimeter and will maintain selective investments to support its growth engines.
1 Pricing power impact in REBITDA of the year-on-year evolution of selling prices versus evolution of raw material and energy costs in Cost of Goods Sold.
- Solvay Indupa, Vinyls South America activity is reported as “Assets held for sale” as from Q4’12. As a consequence and for comparability purposes, all historical references within this report has been restated to present Solvay Indupa as discontinued activities and as “Assets held for sale”.
- Net sales comprise the sales of goods and value-added services corresponding to Solvay’s know-how and core business. Net sales exclude other revenues primarily comprising commodity and utility trading transactions and other revenue deemed as incidental by the Group.
- Adj. REBITDA: Operating result before depreciation and amortization, non-recurring items, financial charges and income taxes.
- Adjusted Profit & Loss indicators exclude non-cash Purchase Price Allocation (PPA) accounting impacts related to the Rhodia acquisition.
- Cash flow from operating activities (including dividends from associates and joint ventures) + cash flow from investing activities (excluding acquisitions and sales of subsidiaries and other investments).
- All references to year-on-year (yoy) evolution must be understood on a pro forma basis for 2011, as if the acquisition of Rhodia had become effective from the 1st of January 2011. On a pro forma basis Solvay 2011 historical figures were restated in order to harmonize accounting policies among the two Group Legacies. Pro forma results exclude impacts from i) purchase price allocation entries; ii) non-recurring acquisition costs related to the Rhodia transaction and iii) financial revenues on cash deposits and investments.
- All period changes throughout this document are to be deemed on a yoy pro forma 2011 basis unless otherwise stated.