Solvay Group reported a decent performance in its second quarter sales and earnings thanks to record free cash flow from continuing operations, higher prices and an acceleration of cost-saving measures due to the impact of the COVID-19 pandemic.

Net sales in Q2 were down 18% to €2,175 million owing to lower demand in its businesses related to the oil and gas, aerospace, automotive and construction sectors.

The company reported free cash flow from continuing operations of €233 million for the second quarter, up 89.8% compared to previous year. For the first half, the company reported free cash flow of €435 million, up significantly versus €33 million in H1 FY19. The increase was predominantly driven by disciplined working capital management.

Second-quarter earnings before interest, tax, depreciation, and amortization (EBITDA) fell 29.5% from a year earlier to €439 million, above a company-compiled consensus of €427 million.

As indicated on June 24, 2020, a non-cash impairment totaling €1.46 billion was taken in the second quarter, mostly related to the goodwill of the Composites business.

Net Sales of €4,649 million in the first half were down 11% versus first half 2019, with headwinds from aero, auto, oil & gas, and construction markets impacting volumes since April. More resilient markets, including healthcare, agro/food, home and personal care and electronics helped to offset some of the challenged markets.

Ilham Kadri, CEO, Solvay commented, “Our steadfast focus on customers, cost and cash resulted in strong delivery of €170 million in cost reduction and record free cash flow generation of € 435 million in the first half of 2020. Our leadership positions in major markets and the breadth of our technologies and innovation enabled us to capture new business while protecting margins. We will continue to adapt to the challenges in the months ahead as we resume selective investments for the return to growth in 2021".

The company said it expects markets to remain challenging in the next three months before improving in the last quarter of the year. The focus on cost will continue with an expectation of delivering around €300 million of savings in full year 2020 and free cash flow generation similar to 2019.