Syensqo - First Quarter 2025 Results

Syensqo SA

Wed, May 14, 2025, 11:00 PM 6 min read

Net sales of €1.6 billion were approximately flat year-on-year, due to lower volumes (-1%) while pricing remained stable; Double digit year-on-year growth in Composite Materials & Technology Solutions; On a sequential basis, net sales increased by 1%, driven by higher pricing (1%) while volumes remained stable;
Gross profit of €514 million decreased by 12% year-on-year, primarily driven by unfavorable mix and lower volumes, resulting in gross margin of 31.7%; On a sequential basis, gross profit increased by 7% and gross margin expanded by 160 basis points;
Underlying EBITDA of €311 million decreased by 15% year-on-year organically, primarily due to lower EBITDA in Specialty Polymers, partially offset by higher EBITDA in Technology solutions. On a sequential basis, underlying EBITDA increased by 5%;
Underlying EBITDA margin contracted by 310 basis points year-on-year, but increased by 60 basis points sequentially to 19.2%;
Underlying net profit of €100 million;
Operating cash flow of €176 million; Free cash flow of €37 million impacted by the phasing of capital expenditures;
Share buyback program: repurchased c. 758,000 shares, or €56 million.

Underlying (€ million)	Q1 2025	Q1 2024	Q4 2024	YoY change	YoY organic	QoQ change
Net sales	1,619	1,624	1,598	-0.3%	-1.4%	1.3%
Gross profit	514	583	482	-11.9%	-	6.5%
Gross profit margin	31.7%	35.9%	30.2%	-420 bps	-	160 bps
Underlying EBITDA	311	363	298	-14.2%	-15.1%	4.5%
Underlying EBITDA margin	19.2%	22.3%	18.6%	-310 bps	-310 bps	60 bps
Operating cash flow	176	244	345	-27.9%	-	-49.1%
Free cash flow	37	157	159	n.m.	-	n.m.
Cash conversion (LTM)	68%	89%	71%	n.m.	-	n.m.
Cash conversion (LTM) excl. €167mn payment to NJDEP in Q2'24	80%	89%	82%	-850 bps	-	-190 bps
ROCE (LTM)	7.1%	9.6%	7.9%	-250 bps	-	-80 bps

Dr. Ilham Kadri, CEO

“The first quarter saw us deliver on our outlook, driven by double digit year-on-year revenue growth in Composite Materials and Technology Solutions as well as robust growth in Novecare. As expected, Specialty Polymers performance reflected the previously announced headwinds in Electronics; however, we continued to deliver resilient underlying margins supported by positive overall net pricing and disciplined cost control.

“The start of the year has also seen increased uncertainty from ongoing tariff and global trade tensions. While we believe that the combination of our balanced regional footprint and mitigation actions positions us to see a limited direct impact to our full year outlook, the broader consequences on end demand and the global economy remain unknown. As we navigate this evolving period of uncertainty, our focus remains on executing on initiatives that we can control, such as completing our separation, accelerating restructuring and cost savings, and continuing to make disciplined, high-return investments to outperform our markets over the longer-term.”

2025 Outlook

For 2025, we continue to expect macroeconomic and demand uncertainty to continue across most of our end markets, exacerbated by recent tariff announcements and global trade tensions. In addition, the evolving dynamics and potential consequences to the global economy has resulted in foreign exchange rate volatility and impacted visibility across the majority of our end markets.

We believe our global manufacturing footprint and proximity to customers, coupled with the mitigation actions we are taking should serve us well as we adapt and manage our direct exposures to these headwinds. Mitigation measures already implemented include tariff surcharges, redirecting volumes to customers and regions unaffected by the higher tariffs, refining our supply chain exposures, and actions to further localize production.

In light of these external factors, we will accelerate our restructuring and cost savings initiatives, including a proposed reduction of approximately 200 positions. These actions are expected to both offset the inflationary impact on costs during the year, and deliver more than €200 million of run rate savings by the end of 2026.

As the estimated headwinds from the direct impact of tariffs and foreign exchange movements, are uncertain and subject to change, we have excluded their potential impacts from our full year 2025 outlook, which remains unchanged as follows¹:

Underlying EBITDA of at least €1.4 billion
Capital Expenditures to be approximately €600 million
Free Cash Flow of approximately €400 million

For the second quarter of 2025, near-term visibility remains challenging. Demand uncertainty is expected to continue across most of our end markets as customers adapt to the implementation of tariffs, most notably between the U.S. and China. On a quarterly basis, we continue to believe that the first quarter of 2025 will be the lowest EBITDA performance of the year, with a sequential improvement in the second quarter.

The second quarter is also expected to include a cash outflow of approximately €170 million related to the dividend payment on May 19, 2025.

Consistent with our previous outlook, we continue to expect higher underlying EBITDA in the second half of 2025, compared to the first half, supported by higher net sales in Electronics and Civil Aviation, as well as the phasing of cost saving actions, which are weighted towards the second half of 2025.

From a cashflow perspective, 2025 includes outflows related to the separation from Solvay and the final year of material investments related to the expansion of the Tavaux site in France, which are both expected to be significantly lower in 2026.

Contacts

Investors & Analysts investor.relations@syensqo.com		Media media.relations@syensqo.com
Sherief Bakr Bisser Alexandrov Loïc Flament Robbin Moore-Randolph	+44 7920 575 989 +33 607 635 280 +32 478 69 74 20 +1 470 493 2433	Perrine Marchal Laetitia Schreiber	+32 478 32 62 72 +32 487 74 38 07

Safe harbor
This press release may contain forward-looking information. Forward-looking statements describe expectations, plans, strategies, goals, future events or intentions. The achievement of forward-looking statements contained in this press release is subject to risks and uncertainties relating to a number of factors, including general economic factors, interest rate and foreign currency exchange rate fluctuations, changing market conditions, product competition, the nature of product development, impact of acquisitions and divestitures, restructurings, products withdrawals, regulatory approval processes, all-in scenario of R&I projects and other unusual items. Consequently, actual results or future events may differ materially from those expressed or implied by such forward-looking statements. Should known or unknown risks or uncertainties materialize, or should our assumptions prove inaccurate, actual results could vary materially from those anticipated. The Company undertakes no obligation to publicly update or revise any forward-looking statements.

About Syensqo
Syensqo is a science company developing groundbreaking solutions that enhance the way we live, work, travel and play. Inspired by the scientific councils which Ernest Solvay initiated in 1911, we bring great minds together to push the limits of science and innovation for the benefit of our customers, with a diverse, global team of more than 13,000 associates.
Our solutions contribute to safer, cleaner, and more sustainable products found in homes, food and consumer goods, planes, cars, batteries, smart devices and health care applications. Our innovation power enables us to deliver on the ambition of a circular economy and explore breakthrough technologies that advance humanity.

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