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Tuesday 17 January, 2017

Solvay S.A.

Solvay restates 2015 and 2016 financial information following recent portfolio transformation steps

Solvay restates 2015 and 2016 financial information following recent portfolio transformation steps

Brussels, January 17, 2017, 07:30 --- Solvay publishes today restated consolidated financial information for 2015 and the first nine months of 2016. The restatement reflects the reclassification of the Acetow and Vinythai businesses in discontinued operations following the recent announcement of their divestment.

Solvay announced in December 2016 the agreement to sell its cellulose acetate tow business Acetow for an enterprise value of about € 1 billion, as well as a definitive agreement to sell its 59% stake in its Asian PVC activity Vinythai for an enterprise, based on an enterprise value of € 435 million. These transactions are expected to close in the first half of 2017. The sale of the Latin American PVC activity Indupa, which was closed in December 2016, has no impact on the restatement as it had been discontinued previously.

The table below summarizes the changes to underlying [1] pro forma [2] key figures.

Underlying key figures2015 FY pro forma2016 9M
(in € m) As published Restate-ment Restated As published Restate-ment Restated
Net sales12,378 (962)11,415 8,798 (680)8,117
of which Performance Chemicals 3,052 (526) 2,526 2,228 (392) 1,837
of which Functional Polymers 1,926 (437) 1,490 1,367 (289) 1,078
EBITDA2,336 (211)2,125 1,918 (162)1,756
of which Performance Chemicals 770 (142) 628 640 (112) 527
of which Functional Polymers 190 (49) 141 204 (34) 170
of which Corporate & Business Services (225) (20) (245) (138) (15) (153)
EBITDA margin19% 19%22% 22%
of which from continuing operations (1,092) 35 (1,057) (666) 25 (641)
Cash conversion53% 50%65% 63%
Free cash flow492 -492 464 -464
of which from continuing operations 500 (106) 394 477 (104) 374

The net sales and EBITDA restatements in the Performance Chemicals and Functional Polymers segments reflect respectively the discontinuation of the Acetow and Vinythai businesses. The EBITDA restatements in the Corporate & Business Services segment result from residual costs that were previously allocated to these discontinued business activities. Cost reduction measures to absorb these residual costs will continue to feature prominently in Solvay's excellence programs.

The 2016 fourth quarter and full year results will be published on February 24 on this restated basis. The balance sheet will reflect Acetow and Vinythai assets and liabilities moved into assets held for sale and associated liabilities. The 2016 outlook for underlying EBITDA growth and free cash flow are unaffected by the restatements.

More detailed figures are provided in the following pages and comprise:

  • Restated income statement, capex and free cash flow from continuing operations, as well as cash flow from discontinued operations per quarter, both on an IFRS basis and on an underlying pro forma basis;
  • Restated net sales, EBITDA and EBIT per quarter, as well as capex for the full year 2015, on an underlying pro forma  basis per segment;
  • Reconciliation per quarter of "as published" figures with restated figures on an IFRS basis, on an IFRS pro forma basis and on an underlying pro forma basis. For reconciliation purposes the 2015 tables also includes the previously published impact from the Cytec acquisition, which is not affected by the restatements.

The restated IFRS full year 2015 figures have been audited. Other figures are provided on an unaudited basis, i.e. quarterly IFRS 2015 and 2016 figures, as well as 2015 pro-forma figures.

Please click on the link at the bottom of this message to read the complete press release.

[1]  Besides IFRS accounts, Solvay presents underlying income statement performance indicators to provide a more consistent and comparable indication of the Group's financial performance. These adjust IFRS figures for the non-cash Purchase Price Allocation (PPA) accounting impacts related to acquisitions, for the coupons of perpetual hybrid bonds, which are classified as dividends under IFRS but treated as financial charges in the underlying statements, and for other elements to produce a measure that would otherwise distort the analysis of the Group's underlying performance.

[2]  Solvay presents pro forma financial information on an unaudited basis for 2015, as if the acquisition of Cytec had taken place on January 1, 2015. It combines Solvay's and Cytec's income and cash flow statements on a stand-alone basis, after alignment of accounting policies and purchase price allocation impacts (i.e. amortization of intangible fair value step-ups and recognition in cost of goods sold of the inventory fair value step-up). The pro forma information also takes into account the estimated additional financing costs related to the acquisition as well as the acquisition related costs. However, expected synergies have not been reflected.

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An international chemical and advanced materials company, Solvay assists its customers in innovating, developing and delivering high-value, sustainable products and solutions which consume less energy and reduce CO2 emissions, optimize the use of resources and improve the quality of life. Solvay serves diversified global end markets, including automotive and aerospace, consumer goods and healthcare, energy and environment, electricity and electronics, building and construction as well as industrial applications. Solvay is headquartered in Brussels with about 30,900 employees spread across 53 countries. It generated pro forma net sales of € 11.4 bn in 2015, with 90% made from activities where it ranks among the world's top 3 players. Solvay SA (SOLB.BE) is listed on Euronext in Brussels and Paris (Bloomberg: SOLB.BB - Reuters: SOLB.BR).

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Source: Solvay S.A. via Globenewswire

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