Solvay 2023 net sales down 12.6% due to volume decline

Solvay 2023 net sales down 12.6% due to volume decline

Solid financial performance due to the stronger first half, and robust capital structure opening a new chapter of Solvay

  • By ICN Bureau | March 13, 2024

Solvay’s FY 2023 financial statements reflect the Partial Demerger completed on December 9, 2023, with the Specialty businesses transferred to Syensqo classified as discontinued operations for 2023. Solvay posted net sales for the full year 2023 at €4,880 million were down -12.6% organically versus 2022, driven primarily by volume declines. In Q4, net sales decreased organically by -18.9% from both lower volumes and prices.

The company has underlying EBITDA of €1,246 million for the full year 2023 was stable (+0.2%) on an organic basis compared to a record 2022, with positive Net Pricing and lower fixed costs offsetting the drop in volumes. EBITDA in the fourth quarter was down -24.5% organically vs Q4 2022, fully driven by lower volumes, with variable costs reduction offsetting price erosion, while fixed costs decreased slightly.

Meanwhile, underlying net profit from continuing operations was €588 million in 2023 compared to €740 million in 2022.

Philippe Kehren, CEO, Solvay, said: “Solvay is well positioned for its new chapter. We approach it with clear objectives and determination to achieve them.

“In 2023, despite macroeconomic challenges, we recorded high-quality results and I want to express my gratitude to all Solvay employees for this achievement. I also take this opportunity to thank all the teams, both at Solvay and Syensqo, who worked so hard on making the Partial Demerger a success.

“Solvay already started to deploy its new strategy, supported by a solid balance sheet and a clear cash usage prioritization. I’m also very pleased with the significant progress we are making in our ESG roadmap and we remain committed to executing our energy transition, recognizing its critical importance for the planet, our communities, our customers and our competitiveness. As we look ahead into 2024, the macroeconomic environment remains uncertain, yet we view the future with confidence as we deploy our new operating model and carefully invest to deliver on our promises.”

2024 outlook

Across its product portfolio, Solvay expects current demand levels to continue over the next few months and, as such, expects H1 2024 volumes to be broadly in line with H2 2023. At this point, there is little visibility on the second half of the year, however there are signs that the trend in the second half could improve. Solvay expects Soda Ash prices over FY 2024 to be lower than FY 2023, consistent with the current market environment, which will affect the business margin in 2024. Pricing trends across Solvay’s other businesses are forecasted to be more resilient year on year.

Lower energy and raw materials prices should offset some of the negative pressure on the topline. More importantly, Solvay has started to implement cost savings initiatives that will start to deliver results in 2024.

For full year 2024, Solvay expects an organic growth of the underlying EBITDA by -10% to -20% versus a high comparison base in 2023, especially in H1. This translates into a range of €925 million to €1,040 million at a 1.10 EUR/USD exchange rate.

The organic growth of the underlying EBITDA is calculated from a 2023 restated figure of €1,154 million (vs a reported figure of €1,246 million).

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