Solvay (SOLB) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales stabilized sequentially at €1,194 million, but declined 6.7% organically year-over-year due to lower prices, partially offset by higher volumes for the second consecutive quarter.

• Underlying EBITDA in Q2 2024 increased 2.6% sequentially to €272 million, but was down 17.2% organically year-over-year, with margin at 22.8%.

• Transformation and cost savings initiatives delivered €46 million in H1 2024, targeting €80 million for the full year and €300 million structurally by 2028.

• Free cash flow was strong at €120 million in Q2 2024, supported by disciplined CapEx and working capital management.

• ROCE stood at 17.6% in Q2 2024, and underlying net debt was €1.6 billion with a leverage ratio of 1.5x.

Financial highlights

• Q2 2024 net sales: €1,194 million, down 6.3% to 7% year-over-year, mainly due to lower prices, partially offset by a 4.4% volume increase.

• Q2 2024 underlying EBITDA: €272 million, down 17% to 23.7% year-over-year, but up 2.6% sequentially; margin at 22.8%.

• H1 2024 free cash flow reached €246 million, with Q2 at €120 million, supported by disciplined CapEx and working capital management.

• Net debt stood at €1.6 billion as of June 30, 2024, with a leverage ratio of 1.5x.

• ROCE was 17.6% in Q2 2024.

Outlook and guidance

• 2024 underlying EBITDA organic growth guidance tightened to -10% to -15%, or €975–1,040 million, supported by €80 million expected cost savings.

• Free cash flow guidance upgraded to above €300 million for 2024, with CapEx expected between €300–350 million.

• Demand is expected to remain broadly flat in H2 2024, with continued short order book visibility and some uncertainty.

• CapEx acceleration planned in H2 for transformation and growth projects.