Solvay (SOLB) Q1 2025 earnings summary

Executive summary

• Q1 2025 underlying net sales were €1,122 million, down 6% year-over-year, mainly due to lower soda ash volumes, while other businesses remained resilient.

• Underlying EBITDA was €250 million, down 6% year-over-year, with a stable margin of 22.3%, supported by a one-off €10 million gain from a patent dispute.

• Structural cost savings delivered €27 million in Q1, totaling €137 million since early 2024.

• Free cash flow to shareholders was €42 million, reflecting normal seasonality.

• Safety remains a top priority, with no reportable high-severity injuries in Q1 and ongoing transformation initiatives.

Financial highlights

• Net sales declined 6.6% year-over-year, mainly due to a 6.3% drop in volumes, partially offset by a 0.6% price increase.

• EBITDA margin improved slightly to 22.3% year-over-year.

• Free cash flow to shareholders was €42 million, with capex at €70 million and working capital outflow of €46 million.

• Net financial debt increased to €1.7 billion, mainly due to interim dividends and lease liabilities for new biomass boilers, with a leverage ratio of 1.7x.

• ROCE stood at 17.2%, down from 19.8% year-over-year.

Outlook and guidance

• 2025 underlying EBITDA is expected in the lower half of the €1.0–1.1 billion range, with free cash flow guidance of €300 million and capex set at €300 million.

• Q2 2025 net sales expected to be stable sequentially, but EBITDA to decline due to absence of Q1’s one-off gain and higher stranded costs.

• Cost savings target of €200 million by end of 2025, with €90 million EBITDA impact in 2025.

• Most free cash flow generation expected in H2 due to seasonality.

• Currency movements estimated to impact EBITDA by €15 million per 5 USD cents and €5 million per 25 BRL cents.