Matthew Yates

Matthew Yates from Bank of America requested a regional breakdown of the onetime operating costs to understand their impact on EMEA versus Americas margins. He also asked about the likelihood of executing the proposed 10% share buyback, considering the company's strong balance sheet and M&A pipeline.

Answer

CFO Isabelle Adelt clarified that the share buyback authorization is a standard measure kept 'in the drawer' with no current plans for a new program. CEO Stefan Fuchs specified that the onetime costs were concentrated in North America, which explains the discrepancy between the region's strong sales growth and flat profit growth.

Matthew Yates questioned the financial model for the digitalization program, asking if it's a one-off investment or a recurring cost, and what makes Solvay's use of data proprietary and difficult for competitors to replicate.

Answer

COO Lanny Duvall explained the program is driven by developing internal capabilities rather than large capital outlays, with costs managed within the normal capital envelope. He stated the proprietary advantage stems from Solvay's scale and repetitive technologies, allowing learnings from one plant to be deployed across all similar assets, a capability many peers lack. CEO Philippe Kehren added this aligns with their process-know-how-based differentiation.

Matthew Yates asked about the financial model for the digitalization program, specifically whether costs are one-off or recurring, and what makes the benefits of this data-driven approach proprietary to Solvay.

Answer

COO Lanny Duvall explained that the rollout cost is manageable within the normal capital envelope, as it's focused on developing in-house capabilities rather than large external acquisitions. He stated the proprietary advantage stems from Solvay's scale and the repetitive nature of its technologies (e.g., across multiple peroxide or soda ash plants), which allows learnings to be replicated efficiently in a way competitors cannot. CEO Philippe Kehren added this aligns with their business model of differentiating through process know-how.

Requested more detail on the free cash flow guidance of at least €260 million, asking about major moving parts beyond EBITDA, such as restructuring charges and working capital changes.

Answer

The €260 million is a guaranteed minimum free cash flow to shareholders, regardless of market conditions within the EBITDA guidance range. The difference from 2023 is due to non-repeating items: about €100 million in EBITDA from phased-out businesses and one-off working capital optimizations in 2023. The decrease in activity impacting 2024 EBITDA will be partially compensated by lower CapEx.