By: ICN Bureau
Last updated : May 16, 2025 10:44 am
Net sales of €1.62 billion led by Composite Materials, Technology Solutions & Novecare; resilient underlying EBITDA of €311 million, up 5% sequentially; FY 2025 outlook unchanged
Syensqo has reported net sales of €1.6 billion, approximately flat year-on-year, due to lower volumes (-1%) while pricing remained stable. On a sequential basis, net sales increased by 1%, driven by higher pricing (1%) while volumes remained stable;
The company reported gross profit of €514 million, a drop of 12% year-on-year, primarily driven by unfavorable mix and lower volumes, resulting in gross margin of 31.7%; On a sequential basis, gross profit increased by 7% and gross margin expanded by 160 basis points. Meanwhile underlying EBITDA stood at €311 million, decreased by 15% year-on-year organically, primarily due to lower EBITDA in Specialty Polymers, partially offset by higher EBITDA in Technology solutions. On a sequential basis, underlying EBITDA increased by 5%. Underlying net profit reported at €100 million.
“The first quarter saw us deliver on our outlook, driven by double digit year-on-year revenue growth in Composite Materials and Technology Solutions as well as robust growth in Novecare. As expected, Specialty Polymers performance reflected the previously announced headwinds in Electronics; however, we continued to deliver resilient underlying margins supported by positive overall net pricing and disciplined cost control.
The start of the year has also seen increased uncertainty from ongoing tariff and global trade tensions. While we believe that the combination of our balanced regional footprint and mitigation actions positions us to see a limited direct impact to our full year outlook, the broader consequences on end demand and the global economy remain unknown. As we navigate this evolving period of uncertainty, our focus remains on executing on initiatives that we can control, such as completing our separation, accelerating restructuring and cost savings, and continuing to make disciplined, high-return investments to outperform our markets over the longer-term,” said Dr. Ilham Kadri, CEO of Syensqo.
2025 Outlook
For 2025, we continue to expect macroeconomic and demand uncertainty to continue across most of our end markets, exacerbated by recent tariff announcements and global trade tensions. In addition, the evolving dynamics and potential consequences to the global economy has resulted in foreign exchange rate volatility and impacted visibility across the majority of our end markets.
We believe our global manufacturing footprint and proximity to customers, coupled with the mitigation actions we are taking should serve us well as we adapt and manage our direct exposures to these headwinds. Mitigation measures already implemented include tariff surcharges, redirecting volumes to customers and regions unaffected by the higher tariffs, refining our supply chain exposures, and actions to further localize production.
In light of these external factors, we will accelerate our restructuring and cost savings initiatives, including a proposed reduction of approximately 200 positions. These actions are expected to both offset the inflationary impact on costs during the year, and deliver more than €200 million of run rate savings by the end of 2026.
As the estimated headwinds from the direct impact of tariffs and foreign exchange movements, are uncertain and subject to change, we have excluded their potential impacts from our full year 2025 outlook, which remains unchanged as follows:
Underlying EBITDA of at least €1.4 billion
Capital Expenditures to be approximately €600 million
Free Cash Flow of approximately €400 million
For the second quarter of 2025, near-term visibility remains challenging. Demand uncertainty is expected to continue across most of our end markets as customers adapt to the implementation of tariffs, most notably between the U.S. and China. On a quarterly basis, we continue to believe that the first quarter of 2025 will be the lowest EBITDA performance of the year, with a sequential improvement in the second quarter.
The second quarter is also expected to include a cash outflow of approximately €170 million related to the dividend payment on May 19, 2025.
Consistent with our previous outlook, we continue to expect higher underlying EBITDA in the second half of 2025, compared to the first half, supported by higher net sales in Electronics and Civil Aviation, as well as the phasing of cost saving actions, which are weighted towards the second half of 2025.
From a cashflow perspective, 2025 includes outflows related to the separation from Solvay and the final year of material investments related to the expansion of the Tavaux site in France, which are both expected to be significantly lower in 2026.