Solvay GROUP *
SECOND QUARTER 2012 BUSINESS REVIEW
Highlights
Growth engines and highly resilient businesses driving the good performance in Q2
- Net sales stable at EUR 3,331 million yoy with prices +2%, volumes (6)% and forex +4%.
- REBITDA1 at EUR 565 million (17% margin) up by 8% versus Q1'12 and (6)% down yoy against a peak comparable
- Record results in Specialty Polymers and Consumer Chemicals driven by strong pricing power
- Sustained high-level performance in Essential Chemicals and Acetow & Eco Services
- Persisting difficult market conditions, volume and margin squeeze for Vinyls and Polyamide
- Good progress of the integration and the delivery of cost efficiencies (EUR 55 million2 in H1'12)
- Management of assets (sale of PipeLife and corporate premises) resulting in after-tax capital gains of EUR 113 million
- Adjusted Net Income (Group Share) of EUR 244 million (IFRS Net Income of EUR 222 million)
- Free Cash Flow of EUR 138 million and stable Net Debt of EUR 1.8 billion
1. REBITDA: operating result before depreciation and amortization, non-recurring items, financial charges and income taxes.
2. versus 2010 pro forma cost base
Quote of the CEO
In the current uncertain environment, the good performance achieved in the quarter highlights the Group's solid fundamentals. Our growth engines continued to deliver strongly, mostly compensating for challenged cycle-sensitive businesses. We reinforced our expansion in high-growth countries, namely in China and India, with the commissioning of new production and R&D facilities. The building of the new Solvay is now well on-track and we are committed to realize our value-creative ambition.
Outlook
Business dynamics should remain healthy for our growth engines and challenging for our cycle sensitive businesses. Despite the slowing in demand observed in June in some business segments, the ongoing major transformation of the Group combined with our ability to fully deliver on our cost saving targets lead Solvay to reiterate its expectation to achieve a full year REBITDA similar to the strong 2011 pro forma level.
* Footnote applicable to the entire document: All references to year-on-year (yoy) evolution must be understood on a pro forma basis for 2011, as if the acquisition of Rhodia had become effective from the 1st of January 2011. On a pro forma basis Solvay 2011 historical figures were restated in order to have harmonized accounting policies among the two former Groups, policies that are to be used by the new Solvay going forward. Pro forma results exclude impacts from i) purchase price allocation entries; ii) non-recurring acquisition costs related to the Rhodia transaction and iii) financial revenues on cash deposits and investments. Adjusted Profit & Loss indicators exclude Purchase Price Allocation (PPA) non-cash accounting impacts related to the Rhodia acquisition.
All period changes throughout this document are to be deemed on a year-on-year bases unless otherwise stated.
The full press release is available on http://www.solvay.com/
