SOLVAY GROUP - SECOND QUARTER & FIRST HALF 2017 FINANCIAL REPORT
August 01 2017 - 1:00AM
Brussels, August 1, 2017
HIGHLIGHTS
-
Volume growth contributes to
strong EBITDA performance and a record EBITDA margin
-
Sustained cash generation, with
free cash flow from continuing operations at €85 million
-
Full year 2017 EBITDA outlook
raised to high single-digit growth
Second quarter 2017 results
Net sales
totaled €3.0 billion, up 11%, with 8.1% from volume and mix, and
2.8% from price.
Underlying EBITDA grew 18% to €705 million,
mostly driven by volume growth across each operating segment. This
included a one-time €38 million synergy benefit on post-retirement
obligations. Overall, the EBITDA margin reached a record 23%.
Operational excellence measures partly offset higher fixed
costs.
- Advanced Materials: €356 million, up
22% year on year with strong volume growth in automotive and
improvement in aerospace composites; both are benefiting from
sustainable mobility drivers.
- Advanced Formulations: €130
million, up 5% year on year due to an improvement in oil & gas
and continued growth in agro.
- Performance Chemicals: €190 million, up
1% year on year supported by the Sadara HPPO contract.
- Functional Polymers: €82 million, up
57% year on year driven by robust net pricing and continued
automotive demand.
- Corporate & Business Services: €(53) million versus
€(58) million in the second quarter of 2016.
Profit attributable to Solvay share on an IFRS
basis was €378 million. On an underlying basis it was €309 million,
up 38% from €223 million in 2016, reflecting higher earnings and
lower financial charges.
Free cash flow from continuing operations was
€85 million.
First half 2017 results
Net sales
totaled €6.0 billion, up 11%, fueled by volume growth and aided by
positive currency effects and price increases.
Underlying EBITDA grew 15% to €1,321 million,
reflecting volume growth across each of the operating segments and
the €38 million one-time gain. Operational excellence measures more
than offset variable net pricing headwinds, while one-time gains
mitigated increased fixed costs. The underlying EBITDA margin grew
0.8 percentage points to 22%.
Profit attributable to Solvay share on an IFRS
basis was €613 million. On an underlying basis it grew 36% to €565
million, reflecting higher earnings and lower financial
charges.
Free cash flow from continuing operations
doubled to €245 million, from €123 million in the same period in
2016.
Underlying net debt1 decreased
to €(5.7) billion from €(6.6) billion at the start of the year,
following the completion of divestments, such as Acetow. Net debt
on an IFRS basis was €(3.5) billion.
CEO Jean-Pierre Clamadieu's
comment
"In the second quarter, we continued to deliver
volume growth across all segments, which contributed to strong
earnings and cash generation. Our delivery is consistent with our
mid-term financial and extra-financial objectives. Solvay's
strategic transformation progressed with further portfolio
upgrades."
2017 Outlook2
Based on its strong first half 2017 results,
Solvay raises its full year outlook for underlying EBITDA, which it
expects to grow by high single-digits. Solvay expects to generate
more than €800 million of free cash flow from continuing
operations.
1
Underlying net debt includes the perpetual hybrid bonds, accounted
for as equity under IFRS.
2 Outlook based
on constant scope and foreign exchange.
Forenote
Following the announcements in late 2016 of plans to divest the
Acetow and Vinythai businesses, these have been reclassified as
discontinued operations and as assets held for sale. For
comparative purposes, the second quarter and first half year of
2016 income statement has been restated. The Vinythai transaction
was completed end of February 2017 and the Acetow transaction end
of May 2017.
Besides IFRS accounts, Solvay also presents underlying Income
Statement performance indicators to provide a more consistent and
comparable indication of the Group's financial performance. The
underlying performance indicators 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 that would distort
the analysis of the Group's underlying performance. The comments on
the results made on pages 2 to 11 are on an underlying basis,
unless otherwise stated.
For more information, please take a
look at our Investors website
Follow us on
twitter @SolvayGroup
Solvay is a multi-specialty
chemical company, committed to developing chemistry that addresses
key societal challenges. Solvay innovates and partners with
customers in diverse global end markets. Its products and solutions
are used in planes, cars, smart and medical devices, batteries, in
mineral and oil extraction, among many other applications promoting
sustainability. Its lightweighting materials enhance cleaner
mobility, its formulations optimize the use of resources and its
performance chemicals improve air and water quality. Solvay is
headquartered in Brussels with around 27,000 employees in 58
countries. Pro forma net sales were € 10.9 billion in
2016, with 90% from activities where Solvay ranks among the world's
top 3 leaders. Solvay SA (SOLB.BE) is listed on Euronext Brussels
and Paris (Bloomberg: SOLB.BB - Reuters: SOLB.BR) and in the United
States its shares (SOLVY) are traded through a
level-1 ADR program.
Caroline Jacobs |
Kimberly Stewart |
Jodi Allen |
Geoffroy Raskin |
Bisser Alexandrov |
Media Relations |
Investor Relations |
Investor Relations |
Investor Relations |
Investor Relations |
+32 2 264 1530 |
+32 2 264 3694 |
+1 9733573283 |
+32 2 264 1540 |
+32 2 264 3687 |
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Source: Solvay S.A. via Globenewswire
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