Solvay Half-Year Report 2023
Solvay 2023 second-quarter results
Quality results with strong cash generation and improved margins in a weak demand
environment; 2023 full-year profit and cash guidance confirmed
Highlights
- Net sales in the second quarter of 2023 decreased by -9.2% organically versus Q2 2022 driven by -13% lower volumes (€-458 million) in a weaker macro environment, which were partly offset by +4% higher prices (+€144 million). The lower year-over-year volumes were broad-based across various end markets, including batteries, agro, construction, and consumer-facing industries.
- Structural cost savings for the first half of 2023 amounted to €36 million, bringing the total savings since 2019 to €502 million, 1.5 years ahead of our 2024 target.
- Underlying EBITDA of €790 million in Q2 2023 only decreased by -2.6% organically year on year, reflecting the quality of earnings. The year on year decline is due to the drop in volumes, partly offset by sustained net pricing and positive portfolio mix effects. The EBITDA decrease was contained to -6% sequentially vs Q1 2023.
- The underlying EBITDA margin of 25.6% in Q2 2023 is +0.7pp higher than in Q2 2022, mainly as a result of pricing and cost discipline, and despite lower volumes in a highly competitive environment.
- Underlying Net Profit was €426 million in Q2 2023 compared to €470 million in Q2 2022.
- Free Cash Flow of €556 million in Q2 2023 significantly increased year-on-year despite €59 million higher capex, reflecting working capital discipline including inventory reduction and low overdues.
- ROCE was 16.3%, +2.6 pp above Q2 2022 and +8.2 pp above 2019. Continued strengthening of the balance sheet with underlying net debt at €3.1 billion, reaching a historic low leverage of 0.9x.