Solvay 2018 first half results: Strong volume growth counters forex headwinds
July 31 2018 - 1:00AM
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Underlying
EBITDA: €1,150 million -3% (+6% organically [1])
- Solid volume increase across Advanced Materials
and Advanced Formulations led to organic sales and EBITDA growth of
6%
- Underlying EBITDA fell 3%, mainly due to
significant forex conversion impact of 7%, principally as a
result of the US dollar
- EBITDA margin remained at a record 23%
- Advanced Materials: €630 million -3% (+5%
organically [1])
- Sustained demand for high-performance polymers
across applications, particularly in automotive, led to strong
volume growth
- Increased demand for aerospace composites,
including commercial, rotorcraft and military, supported solid
volume growth
- Advanced Formulations: €262 million +2% (+17%
organically [1])
- Volume growth was strong across end-markets and
especially in the North American oil & gas market
- Pricing power more than compensating for higher
raw material price
- Performance Chemicals: €365 million -9% (-3%
organically [1])
- Solid demand for soda ash continued in a context
of limited margin erosion
- Peroxides volume and price increased on solid
demand
Underlying EPS from continuing
operations: €4.65 +9%
- The €43 million reduction of net financial
charges, a 21% drop, reflects the deleveraging and optimization of
Solvay's capital structure
- The tax rate of 25% was down from 29% in
2017
Free cash flow from continuing
operations: €123 million vs €251 million in 2017
- Sustained cash generation led to €218 million of
free cash flow, including €123 million from continuing operations,
but this was lower than in 2017 due to working capital
fluctuations
- Free cash flow to Solvay shareholders increased
to €77 million from €33 million in 2017, thanks to the strong
contribution from discontinued operations and lower financial
payments
2018
outlook confirmed
- EBITDA growth of 5% to 7%, excluding scope and
forex effects
- Free cash flow from continuing operations above
the 2017 level
CEO Jean-Pierre
Clamadieu: Solvay's sales and EBITDA
grew 6% organically in the first half of 2018 driven again by
volume growth from our growth segments. Advanced Formulations
benefited in particular from the continued rise in activity of
North American shale oil & gas, while
Advanced Materials growth was supported
by automotive and aerospace. These strong results are a
clear manifestation of the portfolio transformation of the
past years. Internally, we are now focused on putting in place a simpler and more agile organization
to better serve our customers.
-----
All comparisons are made with the equivalent
period of the year before, except where mentioned explicitly
otherwise.
[1] Excluding forex conversion and scope
effects
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Solvay
is an advanced materials and specialty chemicals company, committed
to developing chemistry that addresses key societal challenges.
Solvay innovates and partners with customers worldwide in many
diverse end markets. Its products are used in planes, cars,
batteries, smart and medical devices, as well as in mineral and oil
and gas extraction, enhancing efficiency and sustainability. Its
lightweighting materials promote 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 26,800 employees in 61 countries. Net sales were €10.1
billion in 2017, with 90% from activities where Solvay ranks among
the world's top 3 leaders, resulting in an EBITDA margin of 22%.
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.
Financial figures take into account the planned
divestment of Polyamides. |
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Source: Solvay S.A. via Globenewswire
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