PARIS (Agefi-Dow Jones)–Solvay said on Wednesday it was aiming for organic growth in its gross operating surplus (EBITDA) of between 3% and 6% in 2022, the chemical company intending to further increase its selling prices to counter tensions. inflationary.
“In an unprecedented inflationary environment, our pricing actions are expected to accelerate and 2022 EBITDA should experience organic mid-single digit growth,” Solvay said in a statement. Financial director Karim Hajjar told the Agefi-Dow Jones agency that this English term, meaning “an average figure”, corresponded to an increase of between 3% and 6%.
In 2021, the increase in selling prices contributed 5 percentage points to Solvay’s organic growth, which reached 17%, for a turnover of 10.11 billion euros. More than half of this positive price effect was recorded in the fourth quarter, during which revenues jumped 22.4% on an organic basis, to 2.7 billion euros, Solvay said. Over the October-December period, price increases contributed 12 percentage points to the group’s organic growth.
“The acceleration in price increases more than offset the impact of 465 million euros linked to variable cost inflation” over the whole of 2021, added Solvay.
Ebitda exceeded expectations
Ebitda reached a new record last year, increasing by 27% in organic data, to 2.36 billion euros, while it was expected between 2.2 and 2.3 billion euros by the leaders and 2.3 billion euros by analysts. This indicator was driven by the rise in prices but also by the increase in volumes and by the advancement of the cost reduction program. It increased by 8% compared to its 2019 level, i.e. before the health crisis, still in organic data.
Cost savings in 2021 amounted to €213 million, “bringing total structural savings since 2019 to €390 million, or 80% of the €500 million (year-on-year) target to be achieved by the end of 2024 “Said Solvay.
In the fourth quarter, EBITDA stood at 572 million euros, up 24% organically, to come out 10.6% higher than forecasts by analysts who are members of the Vara Research consensus.
Record return on invested capital
Thanks to the significant structural improvement in working capital management, the group generated free cash flow of 843 million euros last year, down 12.5% but above the level of 800 million euros. euros screwed by the leaders. For the current year, they expect this indicator to exceed 650 million euros.
In 2021, Solvay managed to convert 37.6% of its Ebitda into free cash flow, against a conversion rate of 34.8% expected by analysts. Its rate of return on invested capital (ROCE) also reached a record level of 11.4% in 2021, compared to 6.9% in 2020 and 8.1% in 2019, the year in which Chief Executive Officer Ilham took office. Kadri.
“Since I joined Solvay, I have endeavored to make the group stronger, by investing mainly organically and we will continue on this path,” the manager told the Agefi-Dow Jones agency.
The balance sheet relief should enable Solvay to achieve this ambition and continue to reward its shareholders. Net debt stood at 3.95 billion euros at December 31, 2021, down 5.9% over one year. It represented 1.7 times EBITDA, compared to a debt ratio of 2.2 at the end of 2020.
At its next general meeting, Solvay will propose the payment of a dividend of 3.85 euros per share for the 2021 financial year, up 2.7% over one year.
-Dimitri Delmond, Agefi-Dow Jones; +33 (0)1 41 27 47 31; [email protected] ed: VLV
SOLVAY FINANCIAL RELEASES:
http://www.solvay.com/fr/investors/news_and_results/results/index.html
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February 23, 2022 01:07 ET (06:07 GMT)