Solvay S.A.
Brussels : SOLB

May 09, 2011 12:21 ET

Solvay Group results from the first quarter of 2011[1]

BRUSSELS, BELGIUM--(Marketwire - May 9, 2011) -


EMBARGO: Brussels, May 9, 2011 at 6:00 p.m. REGULATED INFORMATION


Solvay Group results from the first quarter of 2011[1]

                 Excellent operating result (EUR 197 million):
                   +79% compared to the first quarter of 2010
                  +37% compared to the fourth quarter of 2010

  * Group sales (EUR 1,670 million) improved by 23% compared to the first
    quarter of 2010, resulting from an increase in volumes (+10%) and sales
    price (+12%) in Group activities

  * Group operating result (EUR 197 million) balanced between the two
    Sectors:

      * Chemicals (EUR 101 million): record result (+55% compared to the
        first quarter of 2010); the increase in sales prices and volumes
        compensated for higher energy costs
      * Plastics (EUR 116 million): +108% compared to the first quarter of
        2010, primarily thanks to an increase in sales volumes in both
        Specialty Polymers and Vinyls

  * Net result from continuing operations (EUR 98 million)improved compared
    to the first quarter of 2010   (EUR  12 million)

  * New organizational structure (Horizon) in place since April 1, 2011

Agreement announced on April 4 for launch of a friendly cash offer for Rhodia; closing expected in August 2011 Group sales amounted to EUR 1,670 million, up by23% compared to the restated[1] sales of the 1(st) quarter 2010. This improvement was reflected in both Chemicals and Plastics. It is explained by an increase in volumes (+10%) and sales prices (+12%) across all activities. Sales in Asia and South America represent 25% of the total Group sales for the first quarter of 2011.

The Group's recurring operating result (REBIT[2]) amounted to EUR 197 million (+79%). There was a clear improvement in operating margin (REBIT on sales): 11.8% in the first quarter of 2011 compared to 8.1% in the first quarter of 2010 and 9.5% in the fourth quarter of 2010. This improvement is explained by better capacity utilization rates and by the increase in sales prices, which compensated for increased costs of energy and some raw materials. The margin improvement for Specialty Polymers was of particular note; it was sustained by additional growth in sales volumes, by an improvement in product mix and by slightly higher sales prices. Over the course of the upcoming quarters, the Group will continue to dynamically manage the increase in energy and ethylene costs.

The Group's REBITDA[3] amounted to EUR 285 million (+46%). At the end of March 2011, the Solvay Group was in a net cash surplus situation of EUR 2,689 million. The total cash available at the end of March 2011 amounts to EUR 5,386 million. It will partly be used to finance the purchase of the shares of Rhodia (up to EUR 3.4 billion) in the friendly cash offer announced on April 4(th), 2011.

Chemicals Sector sales (EUR 800 million) improved by 23%. Sales volumes remained high at the start of this year; they were up by 7% compared to the first quarter of 2010. The sustained level of demand contributed to an increase in sales prices (on average, up by 15%), which compensated overall for the rise in energy costs. The operating result of the Sector reached the record level of EUR 101 million; it was up by 55% compared to the first quarter of last year. This increase cut across all activities.

Plastics Sector sales (EUR 870 million) were up by 24%; this increase was seen both in Specialty Polymers (+23%) and in Vinyls (+24%). Specialty Polymers continued to benefit from very strong demand at the beginning of 2011. The improvement in their sales came from continued increases in sales volumes, a better product mix and, to a lesser extent, an increase in sales prices. This explains the improvement in margins and operating result for this cluster of activities. The net improvement in sales and operating result of the vinyls activities came from growth in sales volumes in Europe (SolVin) and in South America (Indupa) and the good performance of Vinythai (Asia). The operating result for the Plastics Sector (EUR 116 million) more than doubled compared to last year.


[1] Financial data for the year 2010 were restated to take into account
    the two following changes:
    Since January 1, 2011, the Group consolidates joint ventures
    using the equity method instead of the proportionate method (in line
    with IAS 31) with a negative impact on the sales of the 1(st) quarter
    2010 of EUR 244 million. More information about this is provided on
    pages 12 and 13 of this press release.
    Data from the results of the pharmaceuticals activities up to
    February 15, 2010 in the Group accounts are consolidated under a
    single heading in the income statement: "Result from discontinued
    operations".

[2] REBIT: measure of operating performance (this is not an IFRS
    concept as such)

[3] REBITDA: REBIT, before recurring depreciation and amortization

The Solvay Group is attentive to the macro-economic developments and the evolution of energy and ethylene costs. In the context of the globally favorable business climate and based on its strategy of sustainable and profitable growth, Solvay expects to improve its annual operating result, both in Chemicals and Plastics activities in 2011.


The full press release is available on http://www.solvay-investors.com/



Press release:

http://hugin.info/133981/R/1513825/449755.pdf




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Source: Solvay S.A. via Thomson Reuters ONE

[HUG#1513825]

Contact Information

  • To obtain additional information:

    Erik De Leye
    Corporate Press Officer (SOLVAY S.A.)
    Tel: 32 2 509 72 30
    E-mail: Email Contact

    Patrick VERELST
    Head of Investor Relations (SOLVAY S.A.)
    Tel: 32 2 509 72 43
    E-mail: Email Contact