Solvay announces its G.R.O.W. strategy to drive growth, cash and returns
November 07 2019 - 1:00AM
Solvay announces its G.R.O.W. strategy to drive growth, cash and
returns
- Businesses realigned around distinct mandates
- New operating model – Solvay ONE – to leverage operational
efficiency within the Group
- Provides new mid-term financial targets through 2024
Brussels, November 7, 2019 ---
Solvay announces its G.R.O.W. strategy to drive growth, cash and
returns.
“Our G.R.O.W. strategy is the result of a comprehensive
strategic review of our entire portfolio,” said Ilham Kadri, CEO of
Solvay. “We will unleash Solvay’s full potential through a
disciplined and differentiated allocation of resources across the
Group, based on distinct business mandates and enabled by our new
operating model, Solvay ONE. We will focus on growth, cash and
returns, and will prioritize investment in the highest return
opportunities. We will also create a more effective way to serve
and innovate with our customers, as we increasingly deliver
sustainable solutions that meet the needs of a more ESG-focused
world. Therefore, we are well positioned to drive superior value
creation for shareholders, customers and all other
stakeholders.”
G.R.O.W. Solvay has realigned its
businesses into three segments, MATERIALS, CHEMICALS and SOLUTIONS,
each with a distinct mandate. The restated figures for the segments
are available on Solvay’s website
(https://www.solvay.com/en/investors/financial-reporting/solvay-earnings).
- MATERIALS to accelerate Growth: Materials
comprises Specialty Polymers and Composite Materials, which are
high-margin businesses with leading market positions that are
addressing the sustainability needs of the future. Solvay will
prioritize investment and innovation in this segment. We will
extend our leadership position as the #1 pure play advanced
materials business, leveraging synergy between Specialty Polymers
and Composite Materials to create a leading thermoplastics
platform.
- CHEMICALS to deliver Resilient cash: Solvay is
a global leader in Soda Ash, Peroxides and Silica, and its Coatis
and Rusvinyl businesses are regional leaders. Solvay will continue
to focus on delivering resilient cash flows and selectively invest
in these businesses to become the #1 cash conversion chemical
player.
- SOLUTIONS to Optimize returns: The Solutions
segment includes Novecare, Technology Solutions, Aroma and Special
Chem, which operate in diverse, niche markets. Solvay will optimize
these businesses, leverage its leadership positions, drive better
returns and unlock value.
- Solvay ONE to Win: The new operating model
will unleash the full potential of the Group through resource
prioritization, tailored approach to customers, and a repeatable
cost and cash playbook.
Solvay will deliver €300 million to €350 million of cost savings
on a run rate basis by 2024. Effective management of pension
liabilities, debt and working capital will generate approximately
€500 million in additional cash flow cumulatively over the
period.
Reflecting its new strategy, Solvay has set mid-term targets for
the Group:
- Underlying EBITDA to grow organically mid-single digit on
average from 2020-2024
- Free cash flow conversion to exceed 30 percent by 2024,
compared to approximately 22 percent in 2019
- ROCE to exceed 11 percent by 2024, compared to approximately 8
percent in 2019, equivalent to €300 million more annual pre-tax
profits
Third Quarter Earnings Release and Webcast
Separately today, Solvay released its results for the first nine
months and third quarter of 2019. The company’s earnings release
and infographic can be found on the company’s website at
https://www.solvay.com/en/investors/financial-reporting/solvay-earnings.
An analyst call will be held at 14:00 to discuss the third quarter
2019 results as well as the new strategic framework announced this
morning. Please see:
https://www.solvay.com/en/investors/financial-calendar-events-presentations/investor-days/2019-strategy-review.
A slide presentation will be included with the audio portion of the
webcast and will be posted online 30 minutes before the call
starts.
Safe harbor This press release may contain
forward-looking information. Forward-looking statements describe
expectations, plans, strategies, goals, future events or
intentions. The achievement of forward-looking statements contained
in this press release is subject to risks and uncertainties
relating to a number of factors, including general economic
factors, interest rate and foreign currency exchange rate
fluctuations, changing market conditions, product competition, the
nature of product development, impact of acquisitions and
divestitures, restructurings, products withdrawals, regulatory
approval processes, all-in scenario of R&I projects and other
unusual items. Consequently, actual results or future events may
differ materially from those expressed or implied by such
forward-looking statements. Should known or unknown risks or
uncertainties materialize, or should our assumptions prove
inaccurate, actual results could vary materially from those
anticipated. The Company undertakes no obligation to publicly
update or revise any forward-looking statements.
- 20191107-GROW-Strategy-EN
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