Solvay reported a weaker second quarter as soft soda ash prices and the ongoing conflict in the Middle East weighed on earnings, although the chemicals group maintained its full-year guidance, citing an expected recovery in the second half of 2026.
Underlying net sales fell 7.4% organically year-on-year to €1.03 billion in the second quarter, reflecting continued weakness in soda ash pricing, particularly in seaborne markets, and disruption to operations caused by the conflict in the Middle East.
Underlying EBITDA declined 19.5% organically to €187 million, with the EBITDA margin narrowing to 18.1% from 20.9% a year earlier. Solvay said the year-on-year decline was driven equally by the impact of the Middle East conflict and the absence of a roughly €20 million one-off gain recorded in the second quarter of 2025.
The company said structural cost-saving initiatives generated another €26 million in savings during the quarter, primarily through operational excellence improvements at manufacturing plants, helping reduce fixed costs.
Underlying net profit from continuing operations dropped to €64 million, compared with €99 million a year earlier.
For the first half of 2026, free cash flow stood at €15 million, including negative free cash flow of €11 million in the second quarter, while capital expenditure reached €141 million. Underlying net debt stood at €1.8 billion at the end of June, following dividend payments, with a leverage ratio of 2.3 times.
Chief Executive Officer Philippe Kehren said the company continued to face difficult market conditions while managing operational disruptions.
“Our second quarter results reflect the continued challenging economic environment. “Our second quarter results reflect the continued challenging economic environment. The conflict in the Middle East had a negative impact on our performance, mainly due to the temporary shutdown since mid-March of our Peroxides plant in the region.
"Despite these headwinds, our teams remain focused on the transformation of our company and the tangible progress in our safety performance shows that our transformation is delivering results.
"We take the necessary actions to improve our operations and deliver on our guidance, while looking at opportunities to reinforce and expand our most promising activities in the future. Maintaining strong cash discipline remains another clear priority. Following the usual second quarter seasonality, we expect a stronger contribution in the second half and remain firmly focused on achieving our free cash flow guidance for the year.”
Solvay reaffirmed its full-year 2026 outlook, assuming the restart of its peroxides plant in Saudi Arabia during the third quarter.
The company expects underlying EBITDA of €770 million to €850 million, including a €20 million negative currency impact, based on an assumed EUR/USD exchange rate of 1.20, and around €40 million in transformation expenses.
It also expects free cash flow from continuing operations attributable to shareholders of at least €200 million, net of about €90 million in transformation expenses, with capital expenditure of around €300 million. Cumulative structural cost savings are projected to reach around €300 million by the end of 2026.
Separately, Solvay approved an additional €15 million to €20 million investment to expand rare earth separation capacity at its La Rochelle facility in France, one of the largest rare earth separation plants.
