Yahoo Finance

Brussels, July 29^th, 2016

Q2 2016 results ⁽¹⁾

• Net sales totaled € 2,946 m, down (6)%, as a result of a (4)% net impact of foreign exchange fluctuations on conversion and (2)% price decrease in a context of lower raw material and energy costs. Volumes were up by 1%, with solid growth across segments except Advanced Formulations.

• Underlying EBITDA grew 8% at € 652 m. EBITDA benefitted from sustained pricing power of 3%, while foreign exchange had a (4)% impact on conversion. The Group also benefitted from continuous excellence and Cytec synergy delivery. The underlying EBITDA margin widened to a record 22% of net sales, up 2.9 percentage points.

  • Advanced Materials at € 293 m, up 6.3% yoy, thanks to strength in automotive applications, healthcare and consumer goods, while the smart devices market remained subdued;

  • Advanced Formulations at € 124 m, down (11)% yoy, reflecting persistent weakness in oil & gas;

  • Performance Chemicals at € 224 m, up 20% yoy, thanks to strong volumes in soda ash, and continued recovery in acetate tow;

  • Functional Polymers at € 64 m, up 24% yoy, mainly driven by a higher contribution from RusVinyl;

  • Corporate & Business Services at € (53) m, versus € (50) m in Q2 2015.

• Net income, Solvay share, on an IFRS basis was € 185 m vs € 138 m in 2015. Underlying net income, Solvay share, was € 223 m, up 4%, with the higher operating profit more than offsetting the end of contributions from the discontinued European chlorovinyls activities.

• Free cash flow was € 174 m versus € 192 m in Q2 2015. Free cash flow from continuing operations was up € 37 m, thanks to higher EBITDA and stronger focus on cash generation. Contribution from discontinued operations was nil, since the European chlorovinyls was disposed mid 2015.

• Net debt on an IFRS basis was € (4.8) bn. Underlying net debt⁽²⁾ rose to € (7.0) bn from € (6.8) bn at the start of the quarter, following seasonal interest as well as final dividend payments. The latter includes the perpetual hybrid bonds.

H1 2016 results ⁽¹⁾

• Net sales totaled € 5,877 m, down (6)%, with average prices down (2)% linked to partial pass-through of lower raw material costs. Scope changes and foreign exchange impacts on conversion lowered sales by (1)% and (3)% respectively. Volumes were stable overall, with a decrease in Advanced Formulations offset by growth in the other segments.

• Underlying EBITDA grew 5% at € 1,253 m, as excellence initiatives, synergies and pricing power boosted performance by 6%. The foreign exchange effect on conversion was (2)% negative. Volume mix and scope both had a (1)% impact. The € 30 m one-off benefit recognized in the first quarter of 2015, linked to U.S. post-retirement benefits, was mostly compensated by the growing contribution of the RusVinyl joint venture.

• IFRS net income was € 200 m, vs € 126 m in 2015. Underlying net income, Solvay share, was € 416 m, in line with the € 418 m in H1 2015, as higher operating profit more than compensated for the scope effects in discontinued operations.

• Free cash flow of € 183 m vs € (166) m, with free cash flow from continuous operations up € 346 m, contributing the bulk of it as a result of higher EBITDA, lower capex and a significant reduction of seasonal working capital needs.