Solvay 2019 First Quarter Results
07 Mai 2019 - 7:00AM
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Q1 Profit
Underlying
EBITDA €571 million +2.4% ;
-0.6% organically [1]
- Underlying EBITDA up 2% benefiting from forex
conversion and largely stable organically.
- Positive net pricing offset lower volumes in
automotive, electronics and oil & gas markets, as well as fixed
cost inflation.
- Underlying EBITDA margin remained solid at
22%.
Advanced
Materials €290 million -1.8% ; -5.7% organically
[1]
- Underlying EBITDA down due to volume and mix
effects and higher raw material costs.
- The drop in demand in automotive and electronics
markets was exacerbated by customer destocking. This was mitigated
by the double-digit volume growth in aerospace driven by commercial
and military program.
Advanced
Formulations €126
million +4.2% ; -1.7% organically [1]
- Underlying EBITDA slightly down organically due
to lower oil & gas volumes, partly offset by positive net
pricing.
- Demand from the oil & gas stimulation market
in North America was down year on year, but stabilized versus the
fourth quarter of 2018. Other markets, including mining, remained
overall supportive.
Performance
Chemicals €206 million +11% ; +9.9% organically
[1]
- Strong growth of underlying EBITDA thanks to
higher prices, which more than compensated higher raw material and
energy costs.
- Volumes remained solid in the soda ash and
peroxides businesses.
Underlying EPS [2] from
continuing operations €2.01 ; +1.0%
- Underlying EPS [2] from continuing operations
largely flat.
- Total underlying EPS [2] up 18%, at €2.80,
including strong contribution from discontinued polyamide
activities.
Q1 Cash
Free cash flow to Solvay
Shareholders from continuing operations €(91) million vs €100 million in 2018
- Free cash flow to Solvay shareholders turned
negative due to working capital phasing as well as higher
inventories given the weaker market conditions.
- Underlying net financial debt [3] rose to €(5.8)
billion, from €(5.5) billion at the start of the year, while the
underlying leverage ratio remained stable at 2.1x.
.
2019 Full Year
Outlook
The economic context has worsened since
February, and we expect that this will continue into the
second quarter. Solvay therefore now expects:
- Underlying EBITDA for 2019 to be flat to modestly
down organically [4];
- Free Cash Flow to shareholders from continuing
operations to be around €490 million [5], exceeding dividend
payout and enabling net debt deleveraging by some €100
million.
Quote
CEO Ilham Kadri
commented: Solvay's first quarter results
were in-line with our expectations, as macro-economic conditions
weighed on automotive, electronics and
oil & gas markets, while others, including aerospace,
experienced strong growth.
Since my start-day on March 1,
we have been focused on responding to the challenging market
conditions, in particular on cost management and
cash delivery. Together with
our realigned executive team, I also have initiated a comprehensive
strategic review with a clear objective to unleash
and accelerate value creation.
With a legacy of innovation, strong customer relationships and
commitment to sustainability, we are excited
about the opportunities
ahead.
-----
All year-on-year comparisons are made with 2018
pro forma figures, as if IFRS 16 had already been implemented in
2018.
[1] Organic growth excludes forex conversion and
scope effects, as well as the effect from the implementation of
IFRS 16.
[2] Underlying earnings per share, basic
calculation.
[3] Underlying net financial debt includes the
perpetual hybrid bonds, accounted for as equity under IFRS.
[4] Organic growth excludes forex conversion and
scope effects, and compares to €2,330 pro forma in 2018, which
already includes the €100 million IFRS 16 effect.
[5] Free cash flow to Solvay shareholders is
free cash flow post financing payments and dividends to
non-controlling interests, and compares to €566 million in 2018.
Free cash
flow from continuing operations (before
financing) is expected at around €770 million in 2019, compared to
€846 million pro forma in 2018.
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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 24,500 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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Financial report
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Source: Solvay S.A. via Globenewswire
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