2018 Full Year Results: 5.3% organic growth, sustained strong margins
February 27 2019 - 1:00AM
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Full Year Profit
Underlying
EBITDA €2,230 million +0% ;
+5.3% organically [1]
- Full year sales and underlying EBITDA grew
organically by +5.7% and +5.3% respectively, driven by higher
volumes in each operating segment and sustained net pricing.
Including adverse forex and scope effects, total underlying EBITDA
was stable.
- EBITDA margin sustained at 22%.
Advanced
Materials €1,197 million -0.4% ; +3.1% organically
[1]
- Full year EBITDA grew +3.1% organically, driven
by volume growth in automotive, aerospace, and healthcare
markets.
- Growth was partially offset by anticipated volume
decreases in smart devices, diesel automotive catalysts and
insulation markets.
Advanced
Formulations €521
million -0.4% ; +8.1% organically [1]
- Full year EBITDA grew +8.1% organically, led by
strong volume growth in the shale oil & gas stimulation market
through the first six months, followed by a significant decline in
fourth quarter.
- Pricing power and increased volumes across
markets supported growth in the year.
Performance
Chemicals €729 million -2.7% ; +1.6% organically
[1]
- Full year organic EBITDA grew +1.6% as a result
of strong performance in peroxides and favorable market conditions
in Brazil, supporting volumes and pricing.
- Solid demand and improving soda ash prices
limited margin erosion.
Underlying EPS [2] from
continuing operations €8.48 ; +12%
- The -17% reduction in net financial charges
reflected deleveraging and continued optimization of Solvay's
capital structure.
- Underlying tax rate was -1.4 percentage points
lower at 26% for the year.
- Total underlying EPS [2] of €10.57 increased +16%
versus 2017 primarily driven by the reduction in financial
charges.
4th Quarter Profit
Underlying
EBITDA €506 million +2.5% ;
+3.6% organically [1]
- Fourth quarter sales grew organically by +4.3%
driven mainly by pricing. Volume growth in aerospace composites as
well as in peroxides was partly offset by the anticipated drop in
smart devices as well as the significant decline in the shale oil
and gas market. Automotive sales remained supportive but signs of
weakening were observed toward the end of the year.
- Fourth quarter underlying EBITDA grew +3.6%
organically, with higher prices not fully offsetting an increase in
variable costs.
Full Year Cash
Free cash flow from continuing
operations €830 million vs €782
million in 2017
- Strong cash generation in the fourth quarter,
leading to total year free cash flow from continued operations of
€830 million, up +6.1% vs 2017.
- Free cash flow to Solvay shareholders of €725
million was +56% higher, supported both by the strong cash flow
from discontinued operations and by the reduction in financial
charges, leading to an operational deleveraging of €353 million of
net debt, after dividend payments.
Full Year Return
CFROI 6.9% ;
+0.0pp
- CFROI was stable at 6.9%, well in the value
creation zone, above WACC of 6.5%.
Dividend recommended €3.75
; +4.2%
- Total dividend recommended of €3.75 gross per
share. This leads to final gross dividend of €2.31 payable on May
23, 2019, following the payment of the interim gross dividend of
€1.44 in January.
Quote
CEO Jean-Pierre
Clamadieu: In 2018 Solvay once again
delivered organic EBITDA growth exceeding 5%, thanks to growth in
applications for sustainable mobility and resource efficiency. This
performance and the Group's transformation have led us to
outperform on all of our financial and extra-financial mid-term
targets set in 2016. Underlying EPS grew annually by +13% on
average in the same period and free cash flow to shareholders rose
from €148 to €725 million.
My mandate as CEO of Solvay
will end on March 1 and I am pleased to pass on the baton to Dr.
Ilham Kadri, who will begin a new chapter in this company's
extraordinary history, building on the great potential of its teams
and portfolio, and taking Solvay to the next level.
2019 Outlook [3]
In line with fourth quarter trends, Solvay
anticipates supportive market conditions to continue in most key
markets, though growth is likely to be moderated by conditions in
automotive, electronics and oil & gas. In this context we
remain focused on further developing our growth platforms.
Solvay thereby currently expects 2019 EBITDA to
grow modestly and to be back-ended, with organic growth in the
first quarter broadly flat, relative to the strong 2018
performance. Meanwhile, we will continue to focus on cost
discipline and on deleveraging the balance sheet with continued
solid operational free cash flow delivery.
-----
[1] Excluding forex conversion and scope
effects.
[2] Earnings per share, basis
calculation.
[3] A more detailed outlook can be found on page
12 of the financial report. The 2019 EBITDA growth compares to the
pro forma 2018 EBITDA of €2,330 million for the full year and €558
million for the first quarter, following the implementation of
IFRS16, and excludes forex conversion and scope effects. The full
pro forma P&L and key figures can be found on page 34 of the
financial report.
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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 27,000 employees in
62 countries. Net sales were €10.3 billion in 2018, 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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