May 4, 2023 at 7 a.m. CET
Solvay first quarter 2023 results
Strong pricing drives +22% organic EBITDA growth in the quarter
Upgraded full year EBITDA and FCF outlook
Net sales in the first quarter of 2023 grew +2.0% organically to €3.2 billion versus Q1 2022 driven by higher prices (+14%), overcoming lower volumes (-12%) due to softer demand across several end markets including batteries for auto, construction, and consumer-driven industries. Pricing measures of €421 million more than offset the €127 million impact from variable cost inflation resulting in €294 million of net price benefit in Q1 2023.
Underlying EBITDA in Q1 2023 of €839 million was up +22.0% versus Q1 2022 on an organic basis. Growth in Materials (+35%) and Chemicals (+19%) more than offset the decrease in Solutions (-9%). Sequentially, Q1 2023 EBITDA was up +14% versus Q4 2022.
Underlying EBITDA margin in Q1 2023 reached a new record level at 26.5%, +320 basis points higher than in Q1 2022.
Underlying net profit was €460 million in Q1 2023, up +24.5% compared to Q1 2022.
Free cash flow generation of €125 million in Q1 2023 reflects high profits, investments in working capital and capital expenditures, and the benefit of a settlement of litigation.
Simplified the portfolio with the sale of its 50% stake in RusVinyl, using proceeds to reduce net debt and further strengthen the balance sheet. The leverage ratio is at an historic low of 1.0x.
ROCE for Q1 2023 reached a record level at 16.7%.
Underlying, (in € million)
FCF conversion ratio (LTM)
Ilham Kadri, CEO
“I’m pleased to report that we sustained pricing in the context of a higher cost and weaker demand environment, which supported our strong EBITDA performance. We delivered our 16th consecutive quarter of positive free cash flow notwithstanding increased investments, and we intend to adapt working capital levels whilst ensuring that we continue to meet our customers’ needs. We remain focused on investing for growth and further reinforcing our solid foundations as we progress in our journey to separate into two strong, independent companies later this year.”
2023 Outlook update
The company increases its full-year underlying EBITDA organic growth estimate from the previously indicated guidance of between -3% and -9% to a range of between +2% and -5% versus 20222. The Free Cash Flow estimate is also increased from around €750 million to around €900 million.
1 Free cash flow is free cash flow to Solvay shareholders from continuing operations
2 On an organic basis means at constant forex and scope