Syensqo (SYENS) Q3 2024 earnings summary

Executive summary

• Achieved 2% organic year-on-year net sales growth in Q3 2024, led by strong volume increases in Composite Materials (+14%) and Novecare (+10%).

• Underlying EBITDA was €374 million, down 11% year-over-year, but nearly flat sequentially; EBITDA margin improved 80 bps sequentially to 22.9%.

• Announced a €300 million share buyback program and completed a €75 million LTIP share purchase at €75.64/share.

• Free cash flow was €27 million in Q3, with cash conversion at 81% excluding a one-time €167 million payment to NJDEP.

• Net debt stood at €1.9 billion, leverage ratio at 1.3x, and gearing ratio at 21.5%.

Financial highlights

• Q3 2024 net sales: €1,633 million (flat reported, +2% organic YoY); gross profit: €572 million (-3% YoY); gross margin: 35.0% (-130 bps YoY, +90 bps QoQ).

• Underlying EBITDA: €374 million (-11% YoY, -1% QoQ); EBITDA margin: 22.9% (-280 bps YoY, +80 bps QoQ).

• Operating cash flow: €210 million; free cash flow: €27 million; cash and equivalents: €647 million.

• Underlying EPS for Q3: €1.55; 9M 2024: €4.54.

• Net income attributable to shareholders: €162 million (underlying); basic EPS €1.55.

Outlook and guidance

• Full-year 2024 underlying EBITDA expected between €1.4–1.44 billion.

• Free cash flow to shareholders projected at approximately €400 million, excluding the €167 million NJDEP payment and separation costs.

• Capital expenditures forecasted at €600–650 million.

• Q4 expected to see continued volume growth but impacted by Boeing strike and related supply chain disruptions.

• Net pricing reduction of €50–100 million and dissynergies of €30–40 million expected for 2024.