Solvay Specialty Polymers Q1 Report 2024
“I’m proud of our performance in the first quarter, despite challenging macroeconomic conditions, as we focused on what is under our control: capex, costs and cash. Certain areas of our business have shown promising momentum compared to the trough from late 2023, but we cannot call it a recovery yet. We are rapidly deploying cost-saving initiatives that have already started to deliver. Looking ahead, we maintain confidence in meeting our targets for 2024. Our simplified portfolio, clear operating model and strong focus on cash are great assets to position Solvay for sustained success in the years to come.” Philippe Kehren, Solvay CEO
Highlights
- Net sales for Q1 2024 at €1,201 million were down -11.9% organically versus Q1 2023, with positive volume impact, for the first time in seven quarters, in both Basic and Performance Chemicals segments. Prices decreased, mostly reflecting the lower energy and raw material costs.
- Underlying EBITDA of €265 million for the first quarter was -13.6% lower organically compared to a high Q1 2023, with negative Net Pricing partially offset by positive volume impact and lower fixed costs. The EBITDA margin remained solid at 22.1%, and improved sequentially.
- First cost savings initiatives are already bearing fruit, with €19 million achieved in Q1 2024.
- Underlying net profit from continuing operations was €119 million in Q1 2024 vs. €187 million in Q1 2023.
- Free Cash Flow 1 was strong at €123 million in Q1 2024, from resilient EBITDA combined with discipline on working capital, costs and capex.
- ROCE was 19.8% in Q1 2024.
- Successful inaugural €1.5 billion bond issuance to refinance the bridge facility set up at the end of 2023, in relation to the partial demerger, bringing additional strength and stability to the balance sheet.
- Underlying Net Debt at €1.6 billion, implying a leverage ratio of 1.4x.
- 2024 Outlook: Organic growth of the underlying EBITDA of -10% to -20% compared to restated 2023; Free Cash Flow greater than €260 million.
