Strong profit due to high demand, price and mitigation actions overcoming significant inflationary pressure
- Net sales in the third quarter of 2021 were up +25% organically versus Q3 2020 and up by +6% organically compared to Q3 2019 (+12% excluding Composites), reflecting continued strong demand in most of our markets including record sales in Specialty Polymers. Nine months 2021 sales were 15% organically above 9M 2020, and up +0.5% (+6% excluding Composites) compared to 2019.
- Underlying EBITDA at €599 million in Q3 2021 was up +31% year on year on a comparable scope and foreign exchange basis, reflecting demand recovery, mitigating actions in the face of sharp increases in energy prices, raw materials and logistics, and structural cost savings of €41 million. Nine months 2021 EBITDA is 28% higher than in 2020 and is 6% higher compared to 2019 (at constant scope and currency).
- EBITDA margin at 23.3% is 0.8 percentage points higher than Q3 2020 thanks to higher volumes, pricing, and structural cost measures which partially offset the €145 million impact from rising raw materials, energy and logistics costs.
- Underlying Net Profit at €273 million in Q3 2021, 55% higher than versus Q3 2020.
- Free Cash Flow1 amounted to €276 million in Q3 2021, marking the 10th consecutive quarter of positive free cash flow and bringing the nine months 2021 total to €692 million.
- Interim dividend of €1.50 gross per share decided by the Board of Directors, stable year on year, to be paid on January 17, 2022.
- Solvay ONE Planet sustainability roadmap strengthened with new commitment to reach carbon neutrality before 2050.
I want to thank our teams for another strong set of results. We saw continued demand recovery in most of our businesses and achieved record sales in Specialty Polymers. Indeed, our Q3 sales performance represents high single-digit growth versus 2019 despite slower dynamics in civil aerospace. Our relentless focus on cost and price actions allowed margins to remain stable comparatively to their pre-covid19 level. Looking forward, further actions are being implemented to account for the rising raw materials, energy and logistics costs. Despite these macro headwinds, we maintain our EBITDA guidance and upgrade our Free Cash Flow estimate by €50 million. As we execute on our GROW strategy, we continue to disproportionately allocate resources to our growth businesses and platforms in order to further enhance our capacity to generate superior and sustainable growth for the future.
I am also proud to announce today that Solvay has targeted carbon neutrality before 2050. We remain focused on delivering on our Solvay One Planet priorities and we will raise the bar in response to climate change. Today’s announcement represents a key step forward in our journey toward net-zero emissions.
Full year underlying EBITDA estimate is maintained in the range of €2.2 to €2.3 billion notwithstanding the expectation that high energy prices will persist into Q4 2021. The free cash flow estimate is upgraded to around €800 million.
1Free cash flow is free cash flow to Solvay shareholders from continuing operations
2 Barring additional deterioration related to another wave of Covid-19 in the fourth quarter.
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.