Sequentially improved EBITDA and margin with solid cash performance supported by cost savings initiatives
Highlights
Net sales in Q2 2024 stabilized sequentially reaching €1,194 million. Net Sales were down -6.7% organically versus Q2 2023, with a positive impact from volumes for the second consecutive quarter, while prices were down year over year.
Underlying EBITDA in Q2 2024 increased sequentially by 2.6% reaching €272 million while the EBITDA margin improved sequentially for the second quarter in a row reaching 22.8%. Underlying EBITDA in Q2 was -17.2% lower organically compared to a record Q2 2023, with negative Net pricing partially offset by positive volume impact and further fixed costs improvements.
Structural cost savings initiatives delivered solid results, with €46 million in H1 2024, and are expected to reach €80 million for the full year.
Underlying net profit from continuing operations was €116 million in Q2 2024 vs. €211 million in Q2 2023.
Free Cash Flow1 was strong at €120 million in Q2 2024, from solid EBITDA performance combined with continued prudence on Capex and discipline on working capital.
ROCE was 17.6% in Q2 2024.
Underlying Net Debt at €1.6 billion, implying a leverage ratio of 1.5x.
2024 Outlook: Solvay tightens its guidance of organic growth of the underlying EBITDA to “-10% to -15%”. The guidance for Free Cash Flow1 is upgraded to “higher than €300 million”, including Capex between €300 million and €350 million in 2024.
Second quarter
First quarter
First half
(Underlying (in € million)
2024
2023
%yoy
% organic
2024
2023
2024
2023
% yoy
% organic
Net sales
1,194
1,274
-6.3%
-6.7%
1,201
1,355
2,396
2,629
-8.9%
-9.4%
EBITDA
272
357
-23.7%
-17.2%
265
365
538
722
-25.5%
-15.5%
EBITDA margin
22.8%
28.0%
-5.2pp
-
22.1%
26.9%
22.5%
27.4%
-5.0pp
-
FCF1
120
516
-76.7%
-
2123
-130
246
386
-36.2%
-
ROCE
17.6%
N/A
n.m
-
Note: 2023 figures were restated to reflect the changes mentioned in the Financial performance introduction.
“We continued to deliver a solid performance in the second quarter, in what continues to be a challenging environment. Our focus on deploying our cost-saving initiatives was key, and the €46 million of structural cost savings achieved so far are a testimony of the hard work of our teams. The new operating model is becoming a reality and will make our organization more agile and efficient. I am also particularly happy to see our employees embracing the change and playing an active role in our transformation.
Thanks to our proactivity and prudence in the first six months, we are now in a position to tighten our guidance and accelerate our investments in digitalization and in our future growth.”
2024 outlook
Solvay expects demand to remain broadly flat in the second half. Following the good performance in the first half and the accelerated delivery of cost savings, Solvay tightens its guidance of underlying EBITDA to -10% to -15% organic growth (previously -10% to -20%), which means circa €975 million to €1,040 million, at a 1.10 EUR/USD exchange rate. This is supported by €80 million expected cost savings for the full year.
Solvay upgrades its guidance of Free Cash Flow, which is now expected to be higher than €300 million. That includes an acceleration of the Capex in the second half, which is expected to be between €300 million and €350 million in 2024.
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, a pioneering chemical company with a legacy rooted in founder Ernest Solvay's pivotal innovations in the soda ash process, is dedicated to delivering essential solutions globally through its workforce of over 9,000 employees. Since 1863, Solvay harnesses the power of chemistry to create innovative, sustainable solutions that answer the world’s most essential needs such as purifying the air we breathe and the water we drink, preserving our food supplies, protecting our health and well-being, creating eco-friendly clothing, making the tires of our cars more sustainable and cleaning and protecting our homes. As a world-leading company with €4.9 billion in net sales in 2023 and listings on Euronext Brussels and Paris (SOLB), its unwavering commitment drives the transition to a carbon-neutral future by 2050, underscoring its dedication to sustainability and a fair and just transition. For more information about Solvay, please visit solvay.com or follow Solvay on Linkedin.
