Solvay second quarter 2021 results
Solvay raises full year guidance following double-digit sales and EBITDA growth in Q2 2021
- Net sales in the second quarter of 2021 were up +20% organically versus Q2 2020 and back to 2019 levels in most markets with particularly strong demand in automotive, electronics and building industries. Excluding composites and oil & gas, sales were up +22% versus Q2 2020 and up +6% versus Q2 2019.
- Structural cost savings of €51 million were delivered in Q2, totaling €131 million in the first half 2021, on track to meet the projected annual savings of €200 million.
- Underlying EBITDA of €602 million in Q2 2021 was up +47% year on year on a comparable scope and foreign exchange basis, reflecting strong demand and continued cost reductions. First half 2021 EBITDA is 5% higher than first half 2019.
- EBITDA margin of 24.5% is 4.3 percentage points higher than Q2 2020 as a result of the higher volumes and structural cost measures, though rising raw material, energy and logistics costs impacted Q2 by approximately €50 million.
- Underlying Net Profit was €276 million in Q2 2021, more than double the delivery in Q2 2020.
- Free Cash Flow was €135 million in Q2 2021 reflecting the expected seasonal payments of employee bonuses and higher financial charges. Excluding scope and one-time benefits in 2020, first half 2021 FCF of €417 million was around 25% stronger than in H1 2020.
- Portfolio simplification continues, with the divestment of six business lines and the completion of a bolt-on acquisition in Agro.
- Solvay ONE Planet extends the ‘better life’ pillar with the launch of Solvay ONE Dignity, which includes nine goals by 2025 to accelerate Diversity, Equity and Inclusion.
I’m proud of our team’s determination to take full advantage of the robust demand environment as we drive strong top line growth, with June volumes surpassing 2019 levels. Our structural cost actions and pricing initiatives sustained our leading margins in the quarter. Further, our disciplined approach to cash management is contributing to continued deleveraging. As we look ahead, we remain focused on mitigating the inflationary environment, and on reinvesting in our key growth areas including batteries and electronics, which will drive superior growth across the mid-term.
Full year underlying EBITDA estimate is increased from €2.0 to €2.2 billion previously to €2.2 to €2.3 billion. Free Cash Flow estimate is increased from €650 million previously to around €750 million.
1Barring additional deterioration related to another wave of Covid-19 in the second half.
This press release may contain forward-looking information. Forward-looking statements describe expectations, plans, strategies, goals, future events or intentions. The achievement of forward-looking statements contained in this press release is subject to risks and uncertainties relating to a number of factors, including general economic factors, interest rate and foreign currency exchange rate fluctuations, changing market conditions, product competition, the nature of product development, impact of acquisitions and divestitures, restructurings, products withdrawals, regulatory approval processes, all-in scenario of R&I projects and other unusual items. Consequently, actual results or future events may differ materially from those expressed or implied by such forward-looking statements. Should known or unknown risks or uncertainties materialize, or should our assumptions prove inaccurate, actual results could vary materially from those anticipated. The Company undertakes no obligation to publicly update or revise any forward-looking statements.
Solvay is a science company whose technologies bring benefits to many aspects of daily life. With more than 23,000 employees in 64 countries, Solvay bonds people, ideas and elements to reinvent progress. The Group seeks to create sustainable shared value for all, notably through its Solvay One Planet plan crafted around three pillars: protecting the climate, preserving resources and fostering better life. The Group’s innovative solutions contribute to safer, cleaner, and more sustainable products found in homes, food and consumer goods, planes, cars, batteries, smart devices, health care applications, water and air purification systems. Founded in 1863, Solvay today ranks among the world’s top three companies for the vast majority of its activities and delivered net sales of €9.0 billion in 2020. Solvay is listed on Euronext Brussels (SOLB) and Paris and in the United States, where its shares (SOLVY) are traded through a Level I ADR program. Learn more at www.solvay.com.