5% YEAR-ON-YEAR EBITDA GROWTH IN Q4 & STRONG CASH FLOW GENERATION IN A CHALLENGING MARKET ENVIRONMENT
Q4 2024 Highlights
Net sales of €1.6 billion increased by 2% year-on-year organically, driven by higher volumes (+3%), partially offset by lower pricing (-1%); On a sequential basis, pricing increased by 1% compared to Q3 2024;
Gross profit of €482 million was approximately flat year-on-year including net pricing impact of €-26 million, resulting in gross margin of 30.2%;
Underlying EBITDA of €298 million increased by 5% year-on-year organically, driven by growth in both the Materials and Consumer & Resources segments; EBITDA margin of 18.6% increased by approximately 60 basis points organically;
Underlying net profit of €76 million;
Operating cash flow of €345 million increased by 77% year-on-year; Free cash flow of €159 million;
Share buyback program: repurchased and cancelled 843K shares, or €64 million
FY 2024 Highlights
Net sales of €6.6 billion declined by 3% year-on-year organically driven by lower pricing (-4%), partially offset by higher volumes (+1%) with improved net sales momentum in the second half; double digit growth in Composite Materials;
Gross profit of €2.2 billion included net pricing impact of €-97 million, resulting in gross margin of 33.8%;
Underlying EBITDA of €1.4 billion, in-line with expectations; EBITDA margin of 21.5%;
Underlying net profit of €553 million;
Operating cash flow of €841 million, with cash conversion of 82%1; Free cash flow 1 of €390 million;
Balance sheet: net debt of €1.86 billion with leverage ratio of 1.3x;
Increased shareholder returns: €300 million share buyback program announced at the end of Q3; Dividend for 2024 of €1.62 (payout ratio of 31%) will be proposed to the 2025 Annual General Meeting by the Board of Directors
Dr. Ilham Kadri, CEO
“2024 was a milestone year for Syensqo. With our sharper focus and a deeper understanding of our customers’ needs, we now have more clarity around how we will accelerate our innovation to outperform our markets and increase returns. We also used our balance sheet strength to increase direct shareholder returns, through the board’s proposed dividend payment as well as the ongoing share buyback program.”
“Our Q4 performance saw us return to year-on-year EBITDA growth, coupled with strong cash flow generation. This was achieved against the backdrop of macroeconomic softness and ongoing market uncertainties experienced across our sector. In this context, we will remain focused on executing initiatives in 2025 that we can control, accelerating cost actions to support our profitability, further refining our disciplined approach to capital allocation, and taking steps to unlock value. Underpinned by our strong balance sheet, we will also continue to balance cashflow generation and attractive growth investments with shareholder returns.”
“2025 will also see us continue to assess options to accelerate value creation, including through divestments, to become an even more focused specialty company. Having already determined that we will divest the Oil & Gas business, we now plan to do the same with Aroma.”
“The Americas is Syensqo’s largest region, representing more than 40% of our revenues and people, as well as more than half of our industrial footprint. In addition, we expect a major part of our future growth and investments to be in this strategically important region. I am therefore pleased to share that our Board of Directors has approved the exploration of a potential dual listing in the US, in addition to Brussels, which has the potential added benefits of expanding and enhancing our investor base.”
2025 Outlook
For 2025, we expect macroeconomic and demand uncertainty to continue across most of our end markets. Supported by our strong balance sheet, we will focus on accelerating initiatives that are within our control, increasing cost savings and further focusing our investments to outperform our markets.
Growth is expected to be led by Composite Materials, supported by strong underlying demand as well as our diverse range of customer programs and applications. For Specialty Polymers, we expect net sales to be approximately flat versus 2024, with growth primarily driven by Healthcare and Food Packaging, offset by the lower net sales in Electronics.
Overall, we expect flattish volumes in 2025. This includes the combined impact of approximately €80 million in Electronics, driven by a design change in a customer program, and in Aerospace, as a result of strike action at a major customer and its related impact on demand in the first half of the year.
In order to enhance our profitability in 2025 and beyond, we also plan to accelerate cost savings initiatives. This is expected to both offset the inflationary impact on costs during the year, and also deliver more than €200 million of run rate savings by the end of 2026.
On a full year basis, our outlook is as follows2:
Underlying EBITDA of at least €1.4 billion
Capital Expenditures to be approximately €600 million
Free Cash Flow of approximately €400 million
The first quarter of 2025 is expected to deliver the lowest quarterly EBITDA performance of 2025, given the expected impacts mentioned above as well as lower year-on-year overall demand. We therefore expect first quarter EBITDA to be at approximately the same level as Q4 2024.
(€ million)
Q4 2024
Q4 2023
Q3 2024
YoY change
YoY organic
QoQ change
FY 2024
FY 2023
YoY change
YoY organic
Net sales
1,598
1,577
1,633
1.3%
1.6%
-2.1%
6,563
6,834
-4.0%
-2.8%
Gross profit
482
485
572
-0.6%
-
-15.7%
2,219
2,375
-6.6%
-
Gross profit margin
30.2%
30.8%
35.0%
-60 bps
-
-490 bps
33.8%
34.8%
-90 bps
-
Underlying EBITDA
298
294
374
1.2%
5.1%
-20.4%
1,412
1,618
-12.7%
-10.0%
Underlying EBITDA margin
18.6%
18.7%
22.9%
0 bps
60 bps
-430 bps
21.5%
23.7%
-220 bps
-170 bps
Operating cash flow
345
195
210
77.1%
-
64.5%
841
1,275
-34.0%
-
Op. cash flow excl. €167mn payment to NJDEP in Q2'24
345
195
210
77.1%
-
64.5%
1,008
1,275
-20.9%
-
Free cash flow
159
-35
27
n.m.
-
n.m.
223
448
-50.2%
-
Free cash flow excl. €167mn payment to NJDEP in Q2'24
159
-35
27
n.m.
-
n.m.
390
448
-12.9%
-
Cash conversion (LTM)
71%
85%
69%
n.m.
-
n.m.
71%
85%
n.m.
-
Cash conversion (LTM) excl. €167mn payment to NJDEP in Q2'24
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.
