Solvay (EssentialCo) aims gross savings of €300 million by 2028

Solvay (EssentialCo) aims gross savings of €300 million by 2028

EssentialCo unveils its new strategy and 2028 financial targets

  • By ICN Bureau | November 13, 2023

Today marks a new era for Solvay and its stakeholders as it looks to a future as a simpler, more focused company post the Syensqo spin-off (subject to the approval by Solvay’s shareholders at the Extraordinary General Meeting on December 8, 2023). Solvay’s incoming management team will share its strategy, mid-term financial targets and will confirm its sustainability commitments at Solvay’s Capital Markets Day today.

The company is committed to delivering profitable growth, resilient cash generation and attractive returns that will fuel all relevant process innovation investment, as well as Solvay’s endeavor to reach carbon neutrality by 2050.

Solvay’s ambition is to become THE industry leader, in both scale and cost. It aims at maintaining a top-quartile position in profitability and returns. Additionally, it confirms its commitment to energy transition and reach carbon neutrality by 2050.

Mid-term targets to 2028

Solvay targets further build on a proven track record of consistently delivering stable top-quartile industry margins, cash generation and returns.Specifically, Solvay’s 2028 targets are: Annual average organic underlying EBITDA growth of mid-single digit (in %), Underlying EBITDA margin expansion (in %) to mid-to-high 20s, Total gross savings of €300 million annual run-rate, Free cash flow conversion (in %) exceeding mid-30s and ROCE (in %) increasing to low 20s.

In terms of One Planet climate commitments, Solvay confirms its commitments, driving towards Carbon Neutrality by 2050 through its investment in Energy Transition. Solvay’s specific 2030 targets include reducing scope 1, 2 and 3 emissions as well as coal phase out where alternative energy sources exist.

Solvay opens this new chapter with a strong financial position and an expected investment grade rating of BBB-. With its disciplined capital allocation approach, Solvay highlights its commitment to prioritize stable to increasing dividend for the use of its cash after essential investments.

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