Solvay Releases 2019 Third Quarter and Nine Months Results

November 11 2019

In Q3 underlying EBITDA was up +0.4%. Excluding conversion forex and scope impacts, underlying EBITDA fell -1.8% organically, as continued volume growth in composites, higher pricing in performance chemicals and particular focus on cost discipline mitigated the effects of persistent low demand in the automotive, electronics and oil & gas markets.

In the first nine months underlying EBITDA was largely stable at -0.2%. On an organic [2] basis, underlying EBITDA was -2.6% below last year. The underlying EBITDA margin was sustained at 23%.

Double-digit volume growth in composites for aircraft continued into Q3, resulting in record
performance, ahead of an anticipated slowdown in Q4.

The Q3 performance of the Specialty Polymers business was impacted by the continued headwinds in the automotive and electronics markets, and by the reduction of Solvay’s inventory levels, which adversely affected costs.

Aroma Performance as well as the coatings and care activities in Novecare remained solid in Q3. Order levels in agro and mining were lower, following a strong Q2. Numerous cost actions partly compensated the impact of lower sales on EBITDA.

The North American shale oil & gas market continued to decline in Q3 and Solvay’s competitive position further deteriorated in the quarter.

Price increases were maintained, leading to a strong increase of Q3 returns in the soda ash and peroxide businesses, in a stable demand environment. Results further benefited from deepened operational efficiency measures.

The evolution of the underlying EPS from continuing operations reflects the EBITDA performance in the first nine months of the year, as well as the effects of reduced financial charges and higher depreciation and amortization.

The further decline of the shale oil and gas stimulation market in North America and the pressure on field service companies drove the commoditization of fracking technologies, leading to a switch away from Solvay’s specialty solutions. These developments changed the underlying growth fundamentals of this business and reduced expectations on this business’ future growth.

A strong focus on working capital management contributed to the generation of free cash flow to
Solvay shareholders of 345 million euros on a continuing basis year to date, an improvement of +217 million euros. The strong delivery of 313 million euros in Q3 primarily reflects the improvement of quarterly cash phasing.

Solvay expects organic underlying EBITDA growth between ‑2% and ‑3% year on year and free cash flow to Solvay shareholders from continuing operations of around 490 million euros, in line with previous full year guidance. At current exchange rates, the expected underlying EBITDA translates into around 2,330 million euros, broadly flat compared to 2018.

Lucintel Corporate Customers

Market Entry, M & A, Opportunity Screening,...

Private Equity Customers

Buy Side Services (target screening, due diligence, ..)

Market Research Reports

Aerospace & Defense [51]
Chemical [231]
Composites & Advanced Materials [161]
Construction & Industrial [69]
Consumer and Retail [122]
Economic Analysis [78]
Energy & Utility [73]
Finance & Services [10]
Healthcare [57]
Media & Entertainment [16]
Metals & Mining [17]
Technology & Telecommunication [119]
Transportation [119]

Customer Quotes

"With more than 20 years experience in the industry, this is the first time we have come across such an extensive market analysis for our industry." Ven Cote, CEO, ZCL

"The insights we gained from Lucintel work helped with our business plan…a wonderful professional job…" Mike Jackson, Stahlin

"The report from Lucintel is useful not only for business planners, but also for the technology officers wanting to create a roadmap …" Dr. Giulio Ranzo, Booz Allen

"The information is so comprehensive, it has allowed us to identify & focus our business development efforts. It saved months of leg-work." Bill Barz, L&L Products

"We bought Lucintel report because it is the best report about our industry…a complete and appropriate analysis." Cesare Andrenacci, Ferretti

Quick Query

Lucintel Insights in News

Follow us on