Syensqo has reported Q2 2024 net sales at €1.7 billion, reflecting an increase of 5 per cent sequentially driven by growth in both the Materials and Consumer & Resources segments.

On a year-on-year basis, net sales decreased by 5 per cent organically versus Q2 2023, driven by lower prices (5%), most notably in Consumer & Resources and Specialty Polymers. Volumes were flat year-on-year reflecting continued improvement in momentum compared to Q1 2024, most notably in Novecare; strong performance in Composite Materials with 14% year-on-year net sales growth;

* Underlying EBITDA of €378 million increased by 4% sequentially;

* EBITDA margin of 22.1% was approximately flat sequentially, including net pricing impact of €-24 million in the quarter;

* Underlying net profit of €159 million;

*Excluding the previously announced €167 million payment to the New Jersey Department of Environmental Protection (NJDEP), operating cash flow was €210 million and Free cash flow was €47 million, with cash conversion of 88%;

*Balance sheet: net debt of €1.9 billion, in line with expectations, included €154 million in dividend payments, €167 million related to the settlement with NJDEP and €90 million liability recognition related to the share repurchase program; leverage ratio of 1.3x;

*Decision to rephase investment timeline for North American battery materials by up to two years, aligned with industry demand.

Commenting on the result, Ilham Kadri, CEO, Syensqo, said: “We delivered on our outlook for the second quarter, thanks in particular to improved year-on-year volume momentum, most notably in Novecare, as well as discipline on pricing and control of our costs. We also saw another quarter of double digit growth in Composite Materials and continued to generate robust cash flow.

“While we expect to return to year-on-year volume growth in the second half of 2024, we see a slower recovery in certain end markets, as well as ongoing macroeconomic uncertainty. Nevertheless, we remain relentlessly focused on what is within our control, bringing solutions that our customers need, tightly managing our costs and capital expenditure to further improve our operating leverage and returns, which will allow Syensqo to deliver growth and value creation as markets improve.”

2024 Outlook

While our second quarter 2024 results benefited from improved volume momentum, we do not expect a broader recovery in overall demand in the second half of the year that would support the higher end of our previous outlook ranges.

More specifically, we now expect a slower recovery in a number of end markets impacted by ongoing macroeconomic uncertainty, most notably Automotive, Agro, Industrial and Medical while we expect continued strong growth in the Aerospace and Defence markets.

For the second half of 2024, we expect to return to year-on-year volume growth, driven by higher volumes in all business units, particularly in Novecare.

As a result, our full year 2024 outlook is now as follows:

* Underlying EBITDA to be in the range of €1.4 billion - €1.475 billion;

* Capital expenditures to be in the range of €600 - €650 million;

* Free Cash Flow to be in the range of €400 - €450 million, excluding the previously announced €167 million payment to the New Jersey Department of Environmental Protection, which was made in April 2024.