Solvay third quarter and nine months results


The full financial report can be found on:
An analyst webcast will be held at 14:00, please see


Underlying[1] EBITDA (Q3: €601m +0.4%, -1.8% organic[2] ; 9M: €1,796m -0.2%, -2.6% organic[2])

  • In Q3 underlying [1] EBITDA was up +0.4%. Excluding conversion forex and scope impacts, underlying EBITDA fell -1.8% organically [2], as continued volume growth in composites, higher pricing in performance chemicals and particular focus on cost discipline mitigated the effects of persistent low demand in the automotive, electronics and oil & gas markets.
  • In the first nine months underlying EBITDA was largely stable at -0.2%. On an organic [2] basis, underlying EBITDA was -2.6% below last year. The underlying EBITDA margin was sustained at 23%.
  • Advanced Materials (Q3: €301m -1.6% organic [2] ; 9M: €891m -8.4% organic [2])
    • Double-digit volume growth in composites for aircraft continued into Q3, resulting in record performance, ahead of an anticipated slowdown in Q4.
    • The Q3 performance of the Specialty Polymers business was impacted by the continued headwinds in the automotive and electronics markets, and by the reduction of Solvay’s inventory levels, which adversely affected costs.
  • Advanced Formulations (Q3: €123m -17% organic [2] ; 9M: €388m -9.7% organic [2])
    • Aroma Performance as well as the coatings and care activities in Novecare remained solid in Q3. Order levels in agro and mining were lower, following a strong Q2. Numerous cost actions partly compensated the impact of lower sales on EBITDA.
    • The North American shale oil & gas market continued to decline in Q3 and Solvay’s competitive position further deteriorated in the quarter.
  • Performance Chemicals (Q3: €216m +4.4% organic [2] ; 9M: €646m +8.7% [2])
    • Price increases were maintained, leading to a strong increase of Q3 returns in the soda ash and peroxide businesses, in a stable demand environment. Results further benefited from deepened operational efficiency measures.

Underlying EPS [3] from continuing operations (9M: €6.68 -2.7%)

  • The evolution of the underlying EPS [3] from continuing operations reflects the EBITDA performance in the first nine months of the year, as well as the effects of reduced financial charges and higher depreciation and amortization.

Impairment impact €(656)m post-tax

  • The further decline of the shale oil and gas stimulation market in North America and the pressure on field service companies drove the commoditization of fracking technologies, leading to a switch away from Solvay’s specialty solutions. These developments changed the underlying growth fundamentals of this business and reduced expectations on this business’ future growth. This led to a non-cash impairment of €(656) million post-tax on the combined former Rhodia and Chemlogics oil & gas assets (see page 9).


FCF to Solvay shareholders from continuing operations (9M: €345m +€217m)

  • A strong focus on working capital management contributed to the generation of free cash flow to Solvay shareholders of €345 million on a continuing basis year to date, an improvement of +€217 million. The strong delivery of €313 million in Q3 primarily reflects the improvement of quarterly cash phasing.
  • Total free cash flow to Solvay shareholders was €527 million year to date, including €182 million from discontinued operations. This contributed to an operational deleveraging of net financial debt by €140 million, an improvement of €241 million over 2018.
  • Interim dividend of €1.50 gross per share [6], a +4.2% increase, will be payable on January 20, 2020.


2019 full year outlook confirmed

Solvay expects organic underlying EBITDA growth [4] between ‑2% and ‑3% year on year and free cash flow to Solvay shareholders from continuing operations [5] of around €490 million, in line with previous full year guidance. At current exchange rates, the expected underlying EBITDA translates into around €2,330 million, broadly flat compared to 2018.

CEO Ilham Kadri commented:

Solvay delivered solid earnings and cash in the first nine months, and particularly in the third quarter, overcoming persistent challenges in the macro-economic environment. This performance benefits from enterprise-wide discipline and focus on costs and cash, which gives us the confidence to overcome the headwinds and reconfirm the guidance.
Today, we also share our strategic roadmap, outlining the path to unleash Solvay’s full potential to drive growth and improve cash and returns.”


All comparisons are made year on year with 2018 pro forma figures, as if IFRS 16 had already been implemented in 2018, unless stated otherwise.
[1] Underlying figures adjust IFRS figures for the non-cash Purchase Price Allocation (PPA) accounting impacts related to acquisitions, for the coupons of perpetual hybrid bonds classified as equity under IFRS but treated as debt in the underlying statements, and for other elements to generate a measure that avoids distortion and facilitates the appreciation of performance and comparability of results over time.
[2] Organic growth excludes forex conversion and scope effects, as well as the effect from the implementation of IFRS 16.
[3] Underlying earnings per share, basic calculation.
[4] Organic growth excludes forex conversion and scope effects, and compares to €2,330 pro forma in 2018, which already includes the €100 million IFRS 16 effect.
[5] Free cash flow to Solvay shareholders is free cash flow post financing payments and dividends to non-controlling interests, and compares to €566 million in 2018.
[6] As in previous years, the interim dividend corresponds to 40% of the full year dividend of the prior year.


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