(Boursier.com) — The Q3 2023 turnover of Solvay was down 20.3% organically compared to a record Q3 2022, as expected, in a sluggish macroeconomic environment. Volumes fell by -15% (-512 million) and prices by -5% (-188 million) in a context of falling costs of raw materials and energy. The drop in turnover is 11% compared to the previous quarter. The reduction in volumes was widespread across all markets and geographic areas.
Structural cost savings over the first 9 months of 2023 amount to 63 million, bringing the total savings made since 2019 to 530 million euros.
Underlying EBITDA of 702 million euros in Q3 2023 is down organically by 18.5% compared to a record Q3 2022, due to lower volumes, partially offset by 36 million positive net prices and 41 million reduction in fixed costs.
EBITDA for the first 9 months amounted to 2,331 million euros, an organic decrease limited to -1% compared to 2022, which clearly confirms our ability to maintain sustained price dynamics as well as the discipline maintained in matter of costs.
The underlying EBITDA margin of 25.6% in Q3 2023 was maintained compared to Q3 2022 despite the decline in volumes, while the 9-month EBITDA margin of 25.9% is higher by 1. 3 points, mainly due to positive net prices and cost discipline.
Underlying net profit amounted to 340 million in Q3 2023, compared to 509 million in Q3 2022.
Free cash flow of 346 million euros in Q3 2023 contributed to a total for the first 9 months of 2023 of 1,027 million euros and a free cash flow conversion ratio of 39.4%.
ROCE stood at 15.2%, generally in line with Q3 2022.
The group highlights the continued strengthening of the balance sheet with an underlying net debt of 2.8 billion euros, which translates into a historically low leverage of 0.9x.
An interim dividend of 1.62 euros gross per share was validated by the Board of Directors, in line with the historical policy of an interim dividend, to be paid by Solvay SA on January 17, 2024.
Ilham Kadri, CE0, commented: “This quarter marks a historic milestone for Solvay in its 160-year adventure as it is the last quarter in which we report the Group’s results before its separation into two respected chemical leaders. I am very proud of what our teams have once again accomplished over the past quarter. Despite the challenging macroeconomic environment, we improved our EBITDA margin and cash generation, thanks to positive net pricing and additional cost reductions Solvay is today a stronger company. With the new management teams and boards of directors now in place, as well as the strong commitment of our employees (record score of 76% recorded over the last 5 years) we “We are embarking on a new journey. Our focus is on the many opportunities ahead, pointing to an exciting future for all stakeholders.”
Outlook 2023
“Given the current volume dynamics, we re-confirm our full-year EBITDA growth forecast at the lower end of the previous forecast range,” management concludes.
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