SOLVAY GROUP - SECOND QUARTER & FIRST HALF 2017 FINANCIAL REPORT
(Thomson Reuters ONE) -
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 debt(1) 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 Outlook(2
)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 (at)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 Jodi Allen Geoffroy Raskin Bisser
Stewart Alexandrov
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To read the full report in PDF:
http://hugin.info/133981/R/2124530/810699.pdf
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Solvay S.A. via GlobeNewswire
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