Earnings Release • Jul 31, 2013
Earnings Release
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2ND QUARTER & 1ST HALF YEAR 2013 FINANCIAL REPORT
REGULATED INFORMATION JULY 31, 2013 07:30 AM CET
All references to 2012 P&L data are to be deemed restated for the new business organization effective as from January 1st 2013, the reporting of Solvay Indupa as discontinued operations and for the application of IAS 19 revised. All P&L indicators referred to this document are to be deemed adjusted, unless otherwise stated as IFRS accounts. Adjusted indicators exclude non-cash PPA accounting impacts related to the Rhodia acquisition.
Consumer Chemicals at € 92 m, (40)% YoY, no longer benefiting from last year's exceptional peak guar prices, and suffering from strong temporary destocking in derivatized guar (€ (60)m combined impact); (19)% QoQ
Advanced Materials at € 160 m, (7)% YoY, but up 3% QoQ, with continued strength at Specialty Polymers and Silica but lower performance at Rare Earths
Performance Chemicals at € 180 m, (4)% YoY, but marked QoQ improvement of 16%, both evolutions driven primarily by Essential Chemicals
Functional Polymers at € 79 m, (9)% YoY, due to margin erosion and large maintenance turnaround at Polyamide; 10% QoQ
Solvay continued to face challenging trading conditions during the second quarter. Moreover, temporary destocking in the derivatized guar business and decisions by some of our customers to delay investments, have weighed on several of our "growth engines" businesses. In this context, the Group has forged ahead with its efficiency programs to improve its competitive position, particularly in its soda ash and polyamide activities. We are making good progress in the planned creation of our chlorovinyls joint venture with Ineos and, pending anti-trust clearance, we aim at closing the deal by the end of this year. These developments will significantly contribute to the reshaping of our portfolio and represent a major step towards our 2016 goals.
While we see some weak signs of improvement, this has yet to be confirmed in our order book. In a more challenging economic context, Solvay is confident in its ability to generate a REBITDA in 2013 comparable to last year's, excluding the impacts of the exceptional pricing of guar and the sale of carbon credits (combined totaling € 190 m in 2012). Our relentless execution of the operational excellence programs and accelerated transformation of the company will put us on a strong footing for when demand recovers.
| Key data (in million EUR except for per-share figures in EUR) |
Q2 2013 | Q2 2012 | % | IFRS Q2 2013 |
IFRS Q2 2012 |
|---|---|---|---|---|---|
| Net Sales | 3,062 | 3,197 | (4)% | 3,062 | 3,197 |
| REBITDA | 487 | 565 | (14)% | 487 | 565 |
| REBIT | 320 | 399 | (20)% | 270 | 366 |
| Non-recurring | (97) | 75 | n.m. | (97) | 75 |
| EBIT | 223 | 474 | (53)% | 173 | 441 |
| Net financial expenses | (53) | (110) | (52)% | (53) | (110) |
| Result before taxes | 170 | 364 | (53)% | 121 | 331 |
| Income taxes | (35) | (95) | (64)% | (24) | (84) |
| Net result from continuing operations | 136 | 269 | (50)% | 96 | 247 |
| Net result from discontinued operations | 27 | (16) | n.m. | 27 | (16) |
| Net income | 163 | 253 | (36)% | 123 | 231 |
| Non controlling interest | (14) | (14) | n.m. | (14) | (14) |
| Net income, Groupe share | 148 | 239 | (38)% | 109 | 217 |
| Basic EPS | 1.79 | 2.88 | (38)% | 1.32 | 2.63 |
| Free cash flow | 71 | 140 | (49)% | 71 | 140 |
In the second quarter of 2013, Group net sales amounted to € 3,062 m, down (4) % YoY. Net sales fell (6) % in Consumer Chemicals, (10) % in Advanced Materials, (2) % in Functional Polymers and were little changed in Performance Chemicals. The (1)% volume decline at Group level chiefly came from strong destocking in derivatized guar in the Novecare business unit and persistent sluggish demand for Electronics, seen since last year's second half, in the Rare Earth Systems business unit. Prices overall declined (2) % and foreign exchange evolutions against the euro represented a (1)% decline.
REBITDA fell (14)% to € 487 m in the quarter compared to the same period last year. Against demanding comparables, the overall volume decline and product mix combined accounted for (2.1)% of the REBITDA decrease. Further, at Consumer Chemicals, the business no longer benefited from last year's exceptional peak guar prices, and suffered from strong temporary destocking in derivatized guar (€ (60) m combined impacts). However, despite the unsupportive demand environment in a deflationary raw material context, the reduction of our selling prices by € (70) m YoY, was less than the savings in raw material and energy costs that amounted to € 74 m, thus resulting in a positive net price effect on REBITDA of € 4 m. By operating segments, Advanced Materials benefited from strong pricing power overall, despite the margin squeeze reported by Rare Earth Systems. Margins erosion continued at Functional Polymers and to a lesser extent at Performance Chemicals due to Emerging Biochemicals.
The YoY quarterly REBITDA evolution per operating segment broke down as follows: Consumer Chemicals (40)%, Advanced Materials (7)%, Performance Chemicals (4)% and Functional Polymers (9)%. The Group's REBITDA margin on net sales narrowed to 15.9% from 17.7% last year.
Non-recurring Items were € (97) m versus the € 75 m net gains reported last year. Restructuring charges totaled € (81) m and were related to the Soda Ash and integration restructuring plans.This caption also included a € (32) m impairment on various investments which outweighed other positive non-recurring elements. Last year, non recurring-items reported capital gains of € 115 m from the sale of Pipelife and buildings .
EBIT amounted to € 223 m, down (53) % from last year, with amortization and depreciation charges of € (167) m. On an IFRS basis, EBIT was at € 173 m. The difference between IFRS and adjusted figures reflects the PPA depreciation impact of € (50) m.
Net Financial Expenses declined to € (53) m from € (110) m in the same quarter of last year. Borrowing costs were at € (45) m, in line with last year and interest income was unchanged at € 4 m. The cost of discounting provisions for environmental reserves and pension liabilities fell to € (14) m from € (64) m last year. Tied to environmental reserves, Q2 2013 included a positive one-off impact of € 17 m due to an increase in discount rates in Brazil (+155bp) and in the United States (+50bp), while Q2 2012 included a negative one-off of € (22) m due to a 75 basis point decrease in the EURO discount rate. Lower discount rates on pension liabilities in the quarter resulted in € 12 m lower cost of discounting.
Income Taxes came in at € (35) m and amounted to € (24) m on an IFRS basis, with the difference coming from the tax impact of PPA adjustments. The effective tax rate in the second quarter stood at 21% due to positive nonrecurring elements. For the full year, the effective tax rate is estimated at around 30%.
Result from discontinued operations amounted to € 27 m in Q2 2013 versus € (16) m in Q2 2012 and corresponded to Solvay Indupa's and Pharma businesses. The second quarter included a reversal of provisions for Pharma of € 16 m and an adjustment to fair value of Solvay Indupa's net assets for € 12 m.
Net Income was € 163 m compared with € 253 m in the same quarter of 2012. Net income Group Share came in at € 148 m and basic earnings per share at €1.79. On an IFRS basis, Net income Group share amounted to € 109 m.
| Key data (in million EUR) | Q2 2013 | Q2 2012 | YoY evolution in % |
H1 2013 | H1 2012 | YoY evolution in % |
|---|---|---|---|---|---|---|
| Net sales | 3,062 | 3,197 | (4)% | 6,072 | 6,297 | (4)% |
| Consumer Chemicals | 599 | 636 | (6)% | 1,208 | 1,239 | (3)% |
| Advanced Materials | 658 | 729 | (10)% | 1,297 | 1,431 | (9)% |
| Performance Chemicals | 788 | 792 | 0% | 1,553 | 1,547 | 0% |
| Functional Polymers | 978 | 1,000 | (2)% | 1,959 | 1,998 | (2)% |
| Corporate and Energy | 38 | 40 | (6)% | 55 | 81 | (32)% |
| REBITDA | 487 | 565 | (14)% | 941 | 1,083 | (13)% |
| Consumer Chemicals | 92 | 153 | (40)% | 205 | 256 | (20)% |
| Advanced Materials | 160 | 172 | (7)% | 316 | 323 | (2)% |
| Performance Chemicals | 180 | 187 | (4)% | 336 | 375 | (11)% |
| Functional Polymers | 79 | 86 | (9)% | 151 | 170 | (11)% |
| Corporate and Energy | (25) | (33) | 24% | (67) | (40) | (66)% |
Consumer Chemicals serves the consumer products markets. Its growing product offering targets societal megatrends: demographic growth, the increasing purchasing power of emerging markets, the appearance of new modes of consumption, and a demand for safer, more sustainable products and renewable materials-based solutions.
Advanced Materials offers ultra high-performance applications for aerospace, high-speed trains, health, low-energy tires, automotive emission control, smartphones and hybrid vehicle batteries.
Functional Polymers brings together the chlorovinyls chain and the polyamide activities to serve mainly the construction, infrastructure, automotive and electrical/electronics markets.
Performance Chemicals operates in mature and resilient markets, where success is based on economies of scale, competitiveness and quality of service.
Corporate and Business Services includes the Energy Services GBU and Corporate Functions such as Business Services and the Research & Innovation Center. Energy Services' mission is optimize energy consumption and reduce emissions.
Solvay plans to reinforce its world leader position in soda ash and improve the activity's long-term profitability by reducing its 2012 European cost base by €100 m a year as of 2016. Worldwide demand for soda ash, used in for example in glass or detergents, has been growing at global GDP rates, but has been suffering from Europe's economic downturn and structural overcapacity. At its best-in-class trona-mining industrial assets in the United States, Solvay to raise its production capacity by about 12%. In Europe, Solvay will run an in-depth transformation program at its 6 main soda ash plants and close its Portuguese unit in 2014. These measures will lead to an optimized European production network and add to profitability as of 2014.
Solvay's Specialty Polymers business unit announced several key initiatives to expand the availability and supply of its ultra high-performance or polymers KetaSpire® polyetheretherketone (PEEK) and AvaSpire® polyaryletherketone (PAEK) to meet growth in demand for applications like transportation and oil and gas. The Group will deploy new assets at its Changshu site in China to produce those compounds and set up new distribution centers in Southeast Asia. Solvay's manufacturing presence and more agile global supply chain for KetaSpire® and AvaSpire® will also enhance the availability of Torlon® polyamide-imide. The investment places Solvay's very high-quality innovative materials at the doorstep of fastgrowing customers in the region.
Solvay is to build a state-of-the-art facility to make vanillin in China's Zhenjiang City, boosting its production capacities by 40% and enabling the Group to better serve the fast-growing Asian market. Solvay Aroma Performance is the world's biggest producer of vanillin and ethyl-vanillin with facilities in Baton Rouge in the United States and Saint-Fons in France. Thanks to the new plant, due to be operational by the end of 2014, Solvay has a unique, sustainable and fully integrated industrial vanillin platform that is spread over three continents. Controlling the entire production chain – from making the raw material catechol to end products like Rhovanil® vanillin – enables Solvay to meet strict regulatory and customer safety needs.
Solvay Polyamide & Intermediates (P&I) will cut energy consumption at its adipic acid production line at its French Chalampe plant, reinforcing its cost leadership. The investment will improve the line's manufacturing process, lower energy consumption by 8 MW and reduce CO2 emissions by 11,000-tons per year. This project is part of Solvay Group's goal to grow Polyamide REBITDA € 100 m by 2014. A one-month intervention, requiring a shutdown of the manufacturing process, will take place in the fourth quarter of 2013.
| Key data (in million EUR) | Q2 2013 | YoY evolution in % | H1 2013 | YoY evolution in % |
|---|---|---|---|---|
| Net sales | 599 | (6)% | 1,208 | (3)% |
| Novecare | 378 | (9)% | 776 | (4)% |
| Coatis | 128 | 3% | 250 | 1% |
| Aroma Performance | 93 | (4)% | 182 | (1)% |
| REBITDA | 92 | (40)% | 205 | (20)% |
| EBIT | 66 | (49)% | 157 | (25)% |
| EBIT IFRS | 56 | (53)% | 137 | (27)% |
Consumer Chemicals reported net sales of € 599 m, down (6) % compared to Q2 2012. Novecare sales fell (9) % to € 378 m compared to last year as prices dropped from last year's peak. Moreover a strong inventory correction in the derivatized guar business pushed down overall volume. In a decreasing guar pricing environment customers delayed their purchases. However, usage in the field remained solid. As of July, inventory and order patterns are turning back to more normalized levels. Excluding derivatized guar solutions, most markets remained strong.
Coatis sales grew 3 % to € 128 m against the same quarter of 2012. Solvay's ability to increase prices compensated for lower volumes amid weak Brazilian economy.
Aroma Performance reported net sales of € 93 m, down (4) % from the Q2 2012 level. The good dynamics in Food and Pharma partially made up for the slowdown of inhibitors solutions in China.
REBITDA amounted to € 92 m, which is (40) % lower compared to last year, and primarily linked to Novecare and to a lesser extent to Aroma Performance. At Novecare, the decrease was due to the absence of last year's exceptional profit made on guar peak prices, coupled with the severe destocking during the quarter which represented a combined effect of about € (60) m on a YoY comparison. However, profit in other markets, such as Agro, HPC and Coatings (which is gaining market share in the US housing recovery), showed high-single digit growth.
Profit at Coatis was little changed while Aroma Performance saw a lower contribution from inhibitors solutions.
Net sales at Consumer Chemicals reached € 1,208 m, down (3) % compared to H1 2012 with volume and selling prices respectively (4) % and (1) % lower.
REBITDA came in at € 205 m, a drop of (20) % against H1 2012 and reflecting mainly the exceptional profit from peak prices of guar last year and the temporary destocking of derivatized guar in this year's first semester. Guar is part of the Novecare business unit.
| Key data (in million EUR) | Q2 2013 | YoY evolution in % | H1 2013 | YoY evolution in % |
|---|---|---|---|---|
| Net sales | 658 | (10)% | 1,297 | (9)% |
| Specialty Polymers | 333 | (6)% | 645 | (5)% |
| Silica | 108 | 12% | 212 | 7% |
| Rare Earth Systems | 77 | (40)% | 159 | (39)% |
| Special Chemicals | 141 | (7)% | 281 | (5)% |
| REBITDA | 160 | (7)% | 316 | (2)% |
| EBIT | 115 | (13)% | 223 | (8)% |
| EBIT IFRS | 106 | 14% | 204 | 4% |
Specialty Polymers reported net sales of € 333 m, down (6) %. The good dynamics observed in most markets, especially in healthcare and consumer goods, were insufficient to compensate for delayed investments in Oil & Gas and depressed volumes in Photovoltaics. Smart Devices suffered from last year's high comparables.
Net sales of Silica grew 12 % to € 108 m, with volumes up in all geographical zones and satisfactory pricing. The niche position in the energy efficient tire market demonstrated improved penetration despite Europe's weak tire market.
Rare Earth Systems net sales amounted to € 77 m, down (40) % versus last year. Although volumes grew in Catalysis, continued weak demand in Electronics and the acceleration of price decreases in rare earths weighed on performance.
Special Chemicals reported net sales of € 141 m, down (7) %. Volumes declined, essentially due the divestment of the loss-making Life Sciences businesses. Fluor Specialties continued to face challenging competition in refrigerants.
REBITDA of Advanced Materials fell (7) % to € 160 m compared to Q2 2012 mainly due to the poor performance in Rare Earth Systems. Specialty Polymers reported stable REBITDA and strong margin, as good pricing power and operational excellence initiatives amply compensated for lower volumes in PVDF (primarily for Energy markets).
Profitability at Rare Earth Systems was severely penalized by ongoing poor volumes in Electronics while a cost-of-good reduction failed to offset a further margin squeeze from the deterioration in selling prices.
Special Chemicals profitability improvement continued, benefiting from lower losses in the Life Science business following its progressive strategic divestment.
Net sales of Advanced Materials reached € 1,297 m, down (9) %. All businesses suffered from lower volumes or different investment phasing. Silica was an exception with volumes up 6%. The (3) % price drop is linked to a deterioration of rare earths prices.
At REBITDA level, Advanced Materials showed good resilience at € 316 m, slightly down (2) % from H1 2012. Although performance grew in Specialty Polymers, Silica and Special Chemicals, it was not enough to make up for the poor contribution of Rare Earth Systems.
€ 160 m
REBITDA
| Key data (in million EUR) | Q2 2013 | YoY evolution in % | H1 2013 | YoY evolution in % |
|---|---|---|---|---|
| Net sales | 788 | 0% | 1,553 | 0% |
| Essential Chemicals | 440 | (4)% | 860 | (4)% |
| Acetow | 167 | 6% | 330 | 10% |
| Eco-Services | 74 | (7)% | 141 | (9)% |
| Emerging Biochemicals | 108 | 9% | 222 | 12% |
| REBITDA | 180 | (4)% | 336 | (11)% |
| EBIT | 75 | (43)% | 178 | (35)% |
| EBIT IFRS | 71 | (44)% | 170 | (36)% |
Net sales at € 788 m were stable compared to last year, with volumes 1 % higher and selling prices (2) % lower.
Net sales of Essential Chemicals amounted to € 440 m, down (4)% compared to last year namely in relation to Soda Ash business. Sequentially, sales volumes slightly recovered in Europe but were still down YoY, pushing overall sales volumes in Soda Ash slightly lower. The satisfactory level of demand in the US domestic market failed to compensate for low demand in Europe for flat glass. The export market remained contrasted, showing good resilience in Asia and lower demand in Latin America.
Bicarbonate activity showed good dynamics driven by demand in the food, feed and mining industry. Hydrogen Peroxide was resilient as growing volumes in emerging countries offset weak demand in pulp and paper in the United States.
Acetow net sales rose 6 % to € 167 m. Selling prices and volumes increased compared to last year thanks to innovation and manufacturing excellence actions.
Eco-Services net sales amounted to € 74 m, down (7) % versus last year demanding comparable. Lower needs from our customers weighed on volumes in both Regeneration and Virgin businesses.
Net sales of Emerging Biochemicals grew 9% to € 108 m compared to last year. The volume growth in Epichlorohydrin is primarily due to the production ramp-up phase of the new site in Thailand while the domestic vinyls business continued to feel fierce competition from
REBITDA of Performance Chemicals amounted to € 180 m, down (4) % compared to Q2 2012. In Essential Chemicals, good performance in the United States and resilience in Bicarbonate and Hydrogen Peroxide activities outweighed low demand for flat glass in Europe.
Acetow set another record performance in the quarter, as market share gains in higher value-added products along with the launch of innovative products allowed for favorable pricing power and a good product mix.
Profitability at Emerging Biochemicals was affected by severe competition from Northeast Asian players in Vinyls pushing down volumes and margins. Demand and margins in Epichlorohydrin remained poor.
Net sales of Performance Chemicals reached € 1,553 m, stable compared to H1 2012.
REBITDA were at € 336 m, a decline of (11) % compared to H1 2012. Acetow posted record results but Essential Chemicals, Eco Services and Emerging Biochemicals were faced with a high comparables in the same period last year as well as lower volumes and aggressive competitive pricing.
| Key data (in million EUR) | Q2 2013 | YoY evolution in % | H1 2013 | YoY evolution in % |
|---|---|---|---|---|
| Net sales | 978 | (2)% | 1,959 | (2)% |
| Polyamide | 427 | (2)% | 840 | (6)% |
| Chlorovinyls | 551 | (2)% | 1,118 | 1% |
| REBITDA | 79 | (9)% | 151 | (11)% |
| EBIT | 35 | (71)% | 57 | (63)% |
| EBIT IFRS | 30 | (72)% | 48 | (65)% |
Net sales decreased (2) % to € 978 m compared to last year with volumes up 2 % and selling prices down (4) %.
Polyamide reported net sales of € 427 m, down (2) %. Overall market conditions remained challenging and were marked by lower overall volumes (with Polyamide & Intermediates down more than offsetting growth at Engineering Plastics) and strong pricing pressure from competitors.
Chlorovinyls net sales fell (2) % to € 551 m, from Q2 2012. European PVC demand in the quarter grew 2% compared to last year, mainly catching up with the severe contraction seen in the prior quarter . Solvay volume grew 5% thanks to export sales.
REBITDA of Functional Polymers came in at € 79 m, down (9) % from last year's levels. In Polyamide, six-week maintenance works at the Butachimie plant, held every three years, impacted Q2 2013 performance by € (6) m. The plant is back up and running. In addition, improving dynamics at Engineering Plastics and the first results of the Fit4growth operational excellence program failed to compensate for difficult market conditions at the upstream level.
In Chlorovinyls, poor pricing power was more than offset by higher volumes.
During H1 2013, net sales of Functional Polymers reached € 1,959 m, down (2) % compared to H1 2012 with volumes increasing 1 % and selling prices decreasing (2) %.
REBITDA was (11) % lower at € 151 m compared to H1 2012. Overall market conditions and price pressure continued to dent the segment's performance.
| Key data (in million EUR) | Q2 2013 | YoY evolution in % | H1 2013 | YoY evolution in % |
|---|---|---|---|---|
| Net sales | 38 | (6)% | 55 | (32)% |
| Energy Services | 38 | (4)% | 54 | (32)% |
| CBS and NBD | 0 | n.m | 0 | n.m |
| REBITDA | (25) | 24% | (67) | (66)% |
| EBIT | (67) | (74)% | (142) | (21)% |
| EBIT IFRS | (89) | n.m | (168) | (18)% |
In Q2 2013, the REBITDA loss narrowed to € (25) m from (33) m in Q2 2012. Solvay Energy Services sold the 3.5 m tons of remaining CERs, hedged for 2013. Corporate costs edged higher due to integration related projects.
For H1 2013, Corporate and Energy REBITDA was € (67) m versus € (40) m last year.
Over the first semester of 2013, 4.5m tons of CER were sold for € 13.2 per ton on average. This compares to the sale of 14 m tons in 2012 at an average of € 11.1 per ton.
Factors influencing Consumer Chemicals' net sales YoY evolution (% of Q2'12 Group net sales)
| Key data (in million EUR except for per-share figures in EUR) |
H1 2013 | H1 2012 | % | IFRS H1 2013 |
IFRS H1 2012* |
|---|---|---|---|---|---|
| Net Sales | 6,072 | 6,297 | (4)% | 6,072 | 6,297 |
| REBITDA | 941 | 1,083 | (13)% | 941 | 1,038 |
| REBIT | 610 | 755 | (19)% | 527 | 641 |
| Non-recurring | (137) | 6 | n.s. | (137) | 6 |
| EBIT | 473 | 761 | (38)% | 390 | 647 |
| Net financial expenses | (137) | (190) | (28)% | (137) | (190) |
| Result before taxes | 336 | 571 | (41)% | 253 | 457 |
| Income taxes | (98) | (177) | (44)% | (78) | (146) |
| Net result from continuing operations | 237 | 394 | (40)% | 175 | 312 |
| Net result from discontinued operations | 26 | (22) | n.s. | 26 | (22) |
| Net income | 264 | 372 | (29)% | 201 | 290 |
| Non controlling interest | (30) | (23) | 29% | (30) | (23) |
| Net income, Groupe share | 234 | 349 | (33)% | 172 | 267 |
| Basic EPS | 2.81 | 4.24 | (34)% | 2.07 | 3.26 |
| Free cash flow | 54 | 190 | (72)% | 54 | 190 |
* Residual € (45) m Rhodia inventory step-up PPA impact reclassified into REBITDA
In the first semester of 2013, Group net sales fell (4) % to € 6,072 m. Net sales fell (3) % in Consumer Chemicals, (9) % in Advanced Materials, (2) % in Functional Polymers and stood stable in Performance Chemicals. The (1) % drop in Group volumes was primarily due to challenging global market conditions in Europe, temporary destocking in derivatized guar business at the Novecare business unit and continuous sluggish Electronics demand in Rare Earth Systems. Prices at Group level fell (1) % and foreign exchange evolutions were globally unsupportive (1)%
Factors influencing Group's net sales YoY evolution (% of H1 2012 Group's net sales)
REBITDA was (13) % lower at € 941m in the first half of the year compared to the same period last year. Against last year's demanding comparable, the overall volume decline and product mix accounted for (4.7)% of the REBITDA decrease. However, despite the unsupportive demand environment in a deflationary raw material context, the reduction of our selling prices by € (61) m YoY, was less than the savings in raw material and energy costs that amounted to € 82 m, resulting in pricing power or a positive net price effect on REBITDA of € 20 m. By operating segment, Consumer Chemicals showed strong pricing power overall as did Advanced Materials, despite the margin squeeze reported by Rare Earth Systems. Margin erosion continued at Functional Polymers. The YoY REBITDA evolution by operating segment breaks down as follows: Consumer Chemicals (20)%, Advanced Materials (2)%, Performance Chemicals (11)% and Functional Polymers (11)%.
The Group's margin on net sales narrowed to 15.5% from 17.2% last year.
Non-recurring Items were € (137) m compared with a € 6 m gain reported last year's first half. Restructuring charges totaled € (97) m and were related to the Soda Ash and integration restructuring plans. Other non-recurring items included a € (32) m impairment on several investments. Last year, Solvay reported capital gains related to the sale of Pipelife and buildings which totalled € 115 m.
EBIT amounted to € 473 m, down (38) % from last year, with amortization and depreciation charges of € (331) m. On an IFRS basis, EBIT was at € 390 m. The difference between IFRS and adjusted figures reflects the PPA depreciation impact of € (83) m.
Net Financial Expenses declined to € (137) m from € (190) m in the same semester of last year. Borrowing costs were at € (91) m, in line with last year and interest income stood stable at € 8 m. The cost of discounting provisions for environmental reserves and pension liabilities fell to € (53) m from € (103) m last year. Tied to environmental reserves, H1 2013 included a positive one-off impact of € 17 m due to an increase in discount rates in Brazil (+155bp) and in the United States (+50bp), while H1 2012 included a negative one-off of € (22) m due to a 75 basis point decrease in the EURO discount rate. Lower discount rates applicable in the semester on pension liabilities resulted in € 12 m lower cost of discounting.
Income Taxes increased to € (98) m and € (78) m on an IFRS basis. The difference between adjusted and IFRS figures reflects the tax impact of PPA adjustments. The effective tax rate was 29%. For the full year, the effective tax rate is estimated to be at around 30%.
Result from discontinued operations related to Solvay Indupa's and Pharma and amounted to € 26 m in H1 2013 versus € (22) m in H1 2012. The first semester included a reversal of provisions for Pharma for € 16 m and an adjustment to fair value of Solvay Indupa's net assets for € 12 m.
Net Income fell to € 264 m versus € 372 m the year-ago semester. Net income Group Share came in at € 234 m againts € 349 m last year and basic earnings per share at €2.81 compared with € 4.24. On an IFRS basis, Net income Group share was € 172 m versus € 267 m in H1 2012.
| 2nd Quarter | ||||||
|---|---|---|---|---|---|---|
| Million EUR (except for per-share figures in EUR) | IFRS | Adjusted2 | ||||
| 2013 | 2012 | 2013 | 2012 | |||
| Sales | 3,133 | 3,285 | 3,133 | 3,285 | ||
| Other non core revenues | 71 | 88 | 71 | 88 | ||
| Net sales | 3,062 | 3,197 | 3,062 | 3,197 | ||
| Cost of goods sold | (2,443) | (2,573) | (2,443) | (2,573) | ||
| Gross margin | 691 | 712 | 691 | 712 | ||
| Commercial and administrative costs | (314) | (288) | (314) | (288) | ||
| Research and development costs | (69) | (67) | (69) | (67) | ||
| Other operating gains and losses | (63) | (49) | (13) | (15) | ||
| Earnings from associates and JV accounted for using the equity me thod |
25 | 58 | 25 | 58 | ||
| REBITDA | 487 | 565 | 487 | 565 | ||
| Depreciation and Amortization (recurring) | (216) | (199) | (167) | (166) | ||
| REBIT | 270 | 366 | 320 | 399 | ||
| Non recurring items | (97) | 75 | (97) | 75 | ||
| EBIT | 173 | 441 | 223 | 474 | ||
| Cost of borrowings | (45) | (44) | (45) | (44) | ||
| Interest on lendings and short term deposits | 4 | 4 | 4 | 4 | ||
| Other gains and losses on net indebtedness | 1 | (5) | 1 | (5) | ||
| Cost of discounting provisions | (14) | (64) | (14) | (64) | ||
| Income/loss from available for sale investments | 2 | (1) | 2 | (1) | ||
| Result before taxes | 121 | 331 | 170 | 364 | ||
| Income taxes | (24) | (84) | (35) | (95) | ||
| Result from continuing operations | 96 | 247 | 136 | 269 | ||
| Result from discontinued operations | 27 | (16) | 27 | (16) | ||
| Net income | 123 | 231 | 163 | 253 | ||
| Non-controlling interests | (14) | (14) | (14) | (14) | ||
| Net income Solvay share | 109 | 217 | 148 | 239 | ||
| Basic EPS from continuing operations | 1.02 | 2.76 | 1.49 | 3.01 | ||
| Basic EPS | 1.32 | 2.63 | 1.79 | 2.88 | ||
| Diluted EPS from continuing operations | 1.01 | 2.74 | 1.47 | 3.00 | ||
| Diluted EPS | 1.30 | 2.62 | 1.76 | 2.87 |
1 Including the effects of the adoption of IAS-19 revised as of January 1, 2012 - see note 2
2 Exclude depreciation PPA accounting impacts related to the Rhodia acquisition
| First Semester | |||||||
|---|---|---|---|---|---|---|---|
| Million EUR (except for per-share figures in EUR) | IFRS | Adjusted2 | |||||
| 2013 | 2012 | 2013 | 2012 | ||||
| Sales | 6,288 | 6,483 | 6,288 | 6,483 | |||
| Other non core revenues | 216 | 186 | 216 | 186 | |||
| Net sales | 6,072 | 6,297 | 6,072 | 6,297 | |||
| Cost of goods sold | (4,945) | (5,152) | (4,945) | (5,107) | |||
| Gross margin | 1,343 | 1,330 | 1,343 | 1,375 | |||
| Commercial and administrative costs | (641) | (560) | (641) | (560) | |||
| Research and development costs | (125) | (130) | (125) | (130) | |||
| Other operating gains and losses | (97) | (86) | (14) | (18) | |||
| Earnings from associates and JV accounted for using the equity method |
48 | 88 | 48 | 88 | |||
| REBITDA | 941 | 1,038 | 941 | 1,083 | |||
| Depreciation and Amortization (recurring) | (414) | (397) | (331) | (328) | |||
| REBIT | 527 | 641 | 610 | 755 | |||
| Non recurring items | (137) | 6 | (137) | 6 | |||
| EBIT | 390 | 647 | 473 | 761 | |||
| Cost of borrowings | (91) | (90) | (91) | (90) | |||
| Interest on lendings and short term deposits | 8 | 9 | 8 | 9 | |||
| Other gains and losses on net indebtedness | (3) | (5) | (3) | (5) | |||
| Cost of discounting provisions | (53) | (103) | (53) | (103) | |||
| Income/loss from available for sale investments | 2 | (1) | 2 | (1) | |||
| Result before taxes | 253 | 457 | 336 | 571 | |||
| Income taxes | (78) | (146) | (98) | (177) | |||
| Result from continuing operations | 175 | 312 | 237 | 394 | |||
| Result from discontinued operations | 26 | (22) | 26 | (22) | |||
| Net income | 201 | 290 | 264 | 372 | |||
| Non-controlling interests | (30) | (23) | (30) | (23) | |||
| Net income Solvay share | 172 | 267 | 234 | 349 | |||
| Basic EPS from continuing operations | 1.79 | 3.43 | 2.54 | 4.42 | |||
| Basic EPS | 2.07 | 3.26 | 2.81 | 4.24 | |||
| Diluted EPS from continuing operations | 1.77 | 3.42 | 2.51 | 4.40 | |||
| Diluted EPS | 2.04 | 3.24 | 2.78 | 4.23 |
1 Including the effects of the adoption of IAS-19 revised as of January 1, 2012 - see note 2
2 Exclude depreciation PPA accounting impacts related to the Rhodia acquisition
The table hereafter reconciles Q2 and H1 2013 IFRS results (which include PPA impacts) with Q2 and H1 2013 Adjusted results (which exclude PPA impacts).
| Key data (in million EUR) | IFRS Q2 2013 |
PPA impacts |
Adjusted Q2 2013 |
IFRS H1 2013 |
PPA impacts |
Adjusted H1 2013 |
|---|---|---|---|---|---|---|
| Net Sales | 3,062 | 3,062 | 6,072 | 6,072 | ||
| REBITDA | 487 | 487 | 941 | 941 | ||
| REBIT | 270 | 50 | 320 | 527 | 83 | 610 |
| Non-recurring items | (97) | (97) | (137) | (137) | ||
| EBIT | 173 | 50 | 223 | 390 | 83 | 473 |
| Net financial expenses | (53) | (53) | (137) | (137) | ||
| Result before taxes | 121 | 50 | 170 | 253 | 83 | 336 |
| Income taxes | (24) | (11) | (35) | (78) | (21) | (98) |
| Net result from continuing operations | 96 | 39 | 136 | 175 | 62 | 237 |
| Net result from discontinued operations | 27 | 27 | 26 | 26 | ||
| Net income | 123 | 39 | 163 | 201 | 62 | 264 |
| Non controlling interests | (14) | (14) | (30) | (30) | ||
| Net income, Group share | 109 | 39 | 148 | 172 | 62 | 234 |
| MILLION EUR | Q2 | H1 | |||
|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | ||
| Net income | 123 | 231 | 201 | 290 | |
| Gains and losses on available-for-sale finan cial assets |
0 | 0 | 7 | 9 | |
| Gains and losses on hedging instruments in a cash flow hedge |
(3) | (33) | (28) | (19) | |
| Currency translation differences | (212) | 104 | (65) | 42 | |
| Actuarial gains and losses on defined benefit pension plans |
84 | (178) | 78 | (234) | |
| Income tax relating to components of other comprehensive income |
27 | 27 | 16 | 18 | |
| Other comprehensive income, net of related tax effects |
(105) | (81) | 7 | (186) | |
| Comprehensive income attributed to | 19 | 150 | 209 | 106 | |
| Owners of the parent | 32 | 136 | 190 | 82 | |
| Non-controlling interests | (13) | 13 | 19 | 24 |
| Million EUR | June 30, 2013 | December 31, 2012 restated |
|---|---|---|
| Non-current assets | 11,434 | 11,602 |
| Intangible assets | 1,388 | 1,462 |
| Goodwill | 2,720 | 2,717 |
| Tangible assets | 5,308 | 5,393 |
| Available-for-sale investments | 75 | 66 |
| Investments in JV and associates | ||
| equity method | 834 | 869 |
| Other investments | 120 | 123 |
| Deferred tax assets | 575 | 548 |
| Loans and other non-current assets | 413 | 424 |
| Current assets | 6,398 | 6,728 |
| Inventories | 1,473 | 1,422 |
| Trade receivables | 1,828 | 1,657 |
| Income tax receivables | 48 | 13 |
| Dividends receivables | 7 | 0 |
| Other current receivables-Financial | 843 | 758 |
| Other current receivables – Other | 582 | 685 |
| Cash and cash equivalents | 1,204 | 1,768 |
| Assets held for sale | 413 | 425 |
| TOTAL ASSETS | 17,832 | 18,330 |
| Total equity | 6,568 | 6,574 |
| Share capital | 1,271 | 1,271 |
| Reserves | 4,870 | 4,859 |
| Non-controlling interests | 427 | 443 |
| Non-current liabilities | 8,058 | 8,226 |
| Long-term provisions: employee benefits | 2,878 | 2,987 |
| Other long-term provisions | 1,174 | 1,214 |
| Deferred tax liabilities | 508 | 489 |
| Long-term financial debt | 3,311 | 3,321 |
| Other non-current liabilities | 187 | 216 |
| Current liabilities | 3,206 | 3,530 |
| Short-term provisions: employee benefits | 0 | 63 |
| Other short-term provisions | 266 | 243 |
| Short-term financial debt | 309 | 331 |
| Trade liabilities | 1,550 | 1,617 |
| Income tax payable | 42 | 69 |
| Dividends payable | 3 | 103 |
| Other current liabilities | 707 | 768 |
| Liabilities linked to assets held for sale | 328 | 337 |
| TOTAL EQUITY & LIABILITIES | 17,832 | 18,330 |
Equity attributable to equity holders of the parent company
| VALUE) | REVALUATION RESERVE (FAIR |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| EUR MILLION | CAPITAL SHARE |
PREMIUMS ISSUE |
RETAINED EARNINGS |
TREASURY SHARES |
TRANSLATION DIFFERENCES CURRENCY |
INVESTMENTS AVAILABLE FOR-SALE |
CASH FLOW HEDGES |
PENSION DEFINED BENEFIT |
TOTAL | CONTROLLING INTERESTS NON |
TOTAL EQUITY |
| Balance at 31/12/2012 | 1,271 | 18 | 6,039 | (160) | (455) | 17 | 15 | (592) | 6,152 | 444 | 6,597 |
| IAS19 Revised | (40) | 18 | (22) | (1) | (23) | ||||||
| Balance at 31/12/2012 after IAS19 Revised |
1,271 | 18 | 6,000 | (160) | (455) | 17 | 15 | (575) | 6,130 | 443 | 6,574 |
| Net profit for the period | 172 | 172 | 30 | 201 | |||||||
| Items of OCI | (54) | 7 | (24) | 89 | 18 | (11) | 7 | ||||
| Comprehensive income | 0 | 0 | 172 | 0 | (54) | 7 | (24) | 89 | 190 | 19 | 209 |
| Cost of stock options | 5 | 5 | 5 | ||||||||
| Dividends | (166) | (166) | (42) | (208) | |||||||
| Acquisitions/sale of treasury shares |
(11) | (11) | (11) | ||||||||
| Increase (decrease) through changes in ownership interests in subsidiaries that do not re sult in loss of control |
(8) | (8) | 8 | 0 | |||||||
| Balance at 30/06/2013 | 1,271 | 18 | 6,003 | (171) | (509) | 24 | (9) | (486) | 6,140 | 427 | 6,568 |
| Q2 | H1 | |||
|---|---|---|---|---|
| Million EUR | 2013 | 2012 | 2013 | 2012 |
| Net income | 123 | 236 | 201 | 300 |
| Depreciation, amortization and impairments | 219 | 208 | 418 | 415 |
| Changes in working capital | (61) | (101) | (233) | (321) |
| Changes in provisions | 35 | (24) | (17) | (59) |
| Dividends received from associates and joint ventures accounted for using equity method |
28 | 18 | 33 | 24 |
| Income tax | 25 | 88 | 81 | 148 |
| Income taxes paid | (140) | (45) | (201) | (65) |
| Equity earnings (-) | (25) | (59) | (48) | (88) |
| Net financial charges and Income / loss from available-for sale investments |
1 | 110 | 92 | 189 |
| Others | 12 | (187) | 29 | (107) |
| Cash flow from operating activities | 218 | 244 | 355 | 435 |
| Acquisition (-) of subsidiaries | 1 | 0 | 1 | 0 |
| Acquisition (-) of investments - Other | 16 | (4) | (11) | |
| Sale (+) of subsidiaries and investments (-) | (11) | 170 | (6) | 173 |
| Acquisition (-) of tangible and intangible assets | (174) | (180) | (330) | (324) |
| Sale (+) of tangible and intangible assets | 3 | 58 | 18 | 65 |
| Income from available-for-sale investments | 2 | 1 | 2 | 1 |
| Changes in other long term deposits | 22 | 17 | 9 | 13 |
| Cash flow from investing activities | (140) | 61 | (306) | (83) |
| Capital increase (+) / redemption (-) | (0) | (28) | (0) | (28) |
| Acquisition (-) / sale (+) of treasury shares | (41) | 6 | (11) | 106 |
| Changes in borrowings | 23 | (349) | 76 | (289) |
| Changes in other current financial assets | (107) | 28 | (187) | (151) |
| Net cash out related to cost of borrowings and interest on | ||||
| lendings and term deposits | (109) | (38) | (156) | (91) |
| Other | 32 | 8 | 5 | (60) |
| Dividends paid | (204) | (171) | (308) | (261) |
| Cash flow from financing activities | (406) | (544) | (582) | (775) |
| Net change in cash and cash equivalents | (329) | (239) | (533) | (423) |
| Currency translation differences | (41) | 14 | (27) | 5 |
| Opening cash balance | 1,586 | 1,752 | 1,778 | 1,943 |
| Ending cash balance | 1,218 | 1,525 | 1,218 | 1,525 |
| FREE CASH FLOW | ||||
| From continuing operations | 61 | 157 | (101) | 113 |
| From discontinued operations | 10 | (17) | 154 | 77 |
| Total free cash flow | 71 | 140 | 54 | 190 |
| Q2 | H1 | ||||
|---|---|---|---|---|---|
| Million EUR | 2013 | 2012 | 2013 | 2012 | |
| Cash flow from operating activities | 16 | (13) | 166 | 85 | |
| Cash flow from investing activities | (4) | (4) | (11) | (8) | |
| Cash flow from financing activities | (10) | 14 | (8) | (31) | |
| Net change in cash and cash equi valents |
1 | (3) | 146 | 46 |
Cash flow from operating activities was € 218 m compared to € 244 m last year. Besides net income of € 123 m, it consisted of:
Cash flow from investing activities was € (140) m and capital expenditures amounted to € (174) m including € (4) m from Solvay Indupa discontinued operations
Free Cash Flow was € 71 m, and included cash flow from discontinued operations for € 10 m mainly linked to Solvay Indupa
Cash flow from operating activities was € 355 m compared to € 435 m last year. Besides net income of € 201 m, it consisted of:
Cash flow from investing activities was € (306) m and capital expenditures amounted to € (330) m including € (11) m from Solvay Indupa discontinued operations
Free Cash Flow was € 54 m, and included cash flow from discontinued operations for € 154 m linked to postclosing adjustments subsequent to the sale of the pharmaceutical activities and Solvay Indupa
Solvay is a public limited liability company governed by Belgian law and quoted on NYSE Euronext Brussels and NYSE Euronext Paris.
These condensed consolidated financial statements were authorized for issue by the Board of Directors on July 30, 2013.
The following unusual items had an impact on the condensed consolidated financial statements for the six months ended June 30, 2013:
On May 7, 2013, Solvay and INEOS signed a non-binding letter of intent for the combination of their respective European Chlorovinyls activites into a 50/50 Joint Venture. The proposed transaction is subject to the applicable information/consultation procedures with employee representatives in the countries involved and to anti-trust approval from the relevant authorities. Until completion of the transaction, the occurrence and timing of which is dependent on such approval and procedures, Solvay and INEOS will continue to run their PVC businesses separately.
Solvay prepares its condensed consolidated financial statements on a quarterly basis, in accordance with IAS 34 Interim financial reporting. They do not include all the information required for the preparation of the annual financial statements and should be read in conjunction with the consolidated financial statements for the year ended December 31, 2012.
The condensed consolidated financial statements for the six months ended June 30, 2013 were prepared using the same accounting policies as those adopted for the preparation of the consolidated financial statements for the year ended December 31, 2012, except for the adoption of IAS-19 revised.
On June 16, 2011, the IASB published a revised IAS-19 Employee Benefits, applicable for annual periods beginning on or after January 1, 2013. Solvay applies the IAS-19 revised for the first time in the condensed consolidated financial statements as of March 31, 2013.
The comparative financial statements have been restated to include the effects of IAS-19 revised as of January 1, 2012. The effects of this restatement are as follows:
On the consolidated statement of financial position ended December 31, 2012:
| Assets | |
|---|---|
| Deferred tax assets | 1 |
| Liabilities | |
| Equity | (23) |
| Retained earnings | (41) |
| Other comprehensive income | 18 |
| Employee benefits provisions | 24 |
The impact of the IAS 19 revision on the measurement of the related provisions is limited to the inclusion of the taxes on contributions.
On the consolidated income statement for the six months ended June 30, 2012, net result was negatively impacted for € 10 m. This is mainly due to the replacement of the interest cost on the defined benefit obligation and the expected return on plan assets with a net interest cost based on the net defined benefit liability and the discount rate.
Effective January 1, 2013, Solvay is organized into five Operating Segments.
Consumer Chemicals serves the consumer products markets. Its growing product offering is directed at societal megatrends: demographic growth, the increasing purchasing power of emerging markets, the appearance of new modes of consumption, and a demand for safer, more sustainable products and renewable materials-based solutions.
Advanced Materials offers ultra high-performance applications for aerospace, high-speed trains, health, low-energy tires, automotive emission control, smartphones and hybrid vehicle batteries.
Performance Chemicals operates in mature and resilient markets, where success is based on economies of scale, competitiveness and quality of service.
Functional Polymers brings together the chlorovinyls chain and the polyamide activities to serve mainly the construction, infrastructure, automotive and electrical/electronics markets.
Corporate & Business Services includes the Energy Services GBU and Corporate Functions such as Business Services and the Research & Innovation Center. Energy Services' mission is optimize energy consumption and reduce emissions.
| Key data (in million EUR) | IFRS H1 2013 |
IFRS H1 2012 |
IFRS Q2 2013 |
IFRS Q2 2012 |
|---|---|---|---|---|
| Net sales by Segment | ||||
| Consumer Chemicals | 1,208 | 1,239 | 599 | 636 |
| Advanced materials | 1,297 | 1,431 | 658 | 729 |
| Performance Chemicals | 1,553 | 1,547 | 788 | 792 |
| Functional polymers | 1,959 | 1,998 | 978 | 1,000 |
| Corporate and Energy | 55 | 81 | 38 | 40 |
| Total Net sales | 6,072 | 6,297 | 3,062 | 3,197 |
| REBITDA to Net result Reconciliation | ||||
| REBITDA by Segment | ||||
| Consumer Chemicals | 205 | 256 | 92 | 153 |
| Advanced materials | 316 | 295 | 160 | 172 |
| Performance Chemicals | 336 | 375 | 180 | 187 |
| Functional polymers | 151 | 170 | 79 | 86 |
| Corporate and Energy | (67) | (57) | (25) | (33) |
| Total REBITDA | 941 | 1.038 | 487 | 565 |
| Recurring depreciation | (414) | (397) | (216) | (199) |
| REBIT | 527 | 641 | 270 | 366 |
| Non recurring items | (137) | 6 | (97) | 75 |
| EBIT | 390 | 647 | 173 | 441 |
| Net financial expenses | (137) | (190) | (53) | (110) |
| Result before taxes | 253 | 457 | 121 | 331 |
| Income taxes | (78) | (146) | (24) | (84) |
| Result from continuing operations | 175 | 312 | 96 | 247 |
| Result from discontinued opera tions |
26 | (22) | 27 | (16) |
| Net income | 201 | 290 | 123 | 231 |
On April 8, 2013, the third wave of the Rhodia integration plan was announced to the European Workers Council. The corresponding restructuring provision amounts to € 26 m as of June 30, 2013.
On June 6, 2013, Solvay announced the closure of its soda ash unit in Povoa (Portugal) to address structural overcapacity in the Mediterranean basin. The corresponding provision covers social, environmental and legal costs related to the restructuring decision. It amounts to € 45 m as of June 30, 2013.
On February 13, 2013 the Board of Director of Solvay SA decided to grant two long-term incentive plans for part of its key executives:
The details of the stock options plan are as follows:
| Stock option plan | |
|---|---|
| Number of stock options | 405,716 |
| Grant date | March 25, 2013 |
| Acquisition date | January 1, 2017 |
| Vesting period | Between March 25, 2013 and December 31, 2016 |
| Exercice price | 111,01 € |
| Exercice period | Between January 1, 2017 and March 24, 2021 |
This plan is accounted for as an equity-settled share-based plan. As of June 30, 2013, the impact on the income statement is below € 1 m.
The details of the Performance Share Units plan are as follows:
| 1st half of PSUs granted | 2nd half of PSUs granted | ||
|---|---|---|---|
| Number of PSU | 217,206 | ||
| Grant date | March 25, 2013 | ||
| Acquisition date | December 31, 2015 | ||
| Vesting period | Between March 25, 2013 and December 31, 2015 | ||
| Performance conditions | % of PSUs granted depending upon the level of REBITDA at closing Financial Year 2015 |
% of PSUs granted depending upon the level of CFROI at closing Financial Year 2015 |
|
| Validation of perfor mance conditions |
By the Board of Directors, subject to confirmation by Solvay statutory auditors |
The Performance Share Units is qualified as a cash-settled share-based plan. As of June 30, 2013, the impact on the income statement amounts to € 3 m.
Compared to December 31, 2012, there are no changes in valuation techniques.
For all financial instruments not measured at fair value in Solvay balance sheet, the fair value of those financial instruments is not significantly different from the ones as published in the note 34.1 of the consolidated financial statements for the year ended December 31, 2012.
For all financial instruments measured at fair value in Solvay balance sheet, the fair value of those instruments as of June 30, 2013 is not significantly different from the ones as published in the note 34.3 "Financial instruments measured at fair value in the consolidated statement of financial position" of the consolidated financial statements for the year ended December 31, 2012.
During the six months ended June 30, 2013, there were neither reclassifications between fair value levels, nor significant changes in the fair value of financial assets and liabilities measured at level 3.
During January 1, 2013 and June 30, 2013, 662,210 stock options were exercised.
| 6 months 2013 | 6 months 2012 | 2012 | |
|---|---|---|---|
| Number of shares issued at the end of the period | 84,701,133 | 84,701,133 | 84,701,133 |
| Average number of shares for IFRS calculation of earnings per share |
83,218,657 | 81,995,834 | 82,304,773 |
| Average number of shares for IFRS calculation of diluted income per share |
84,135,387 | 82,318,496 | 82,695,868 |
No post closing event has occurred.
Solvay SA/NV
Limited review report on the consolidated interim financial information for the six-month period ended 30 June 2013
To the board of directors
We have performed a limited review of the accompanying consolidated statement of financial position, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated cash flow statement, the consolidated statement of changes in equity and selective notes (jointly the "interim financial information") of Solvay SA/NV ("the company") and its subsidiaries (jointly "the group") for the six-month period ended 30 June 2013. The board of directors of the company is responsible for the preparation and fair presentation of this interim financial information. Our responsibility is to express a conclusion on this interim financial information based on our review.
The interim financial information has been prepared in accordance with international financial reporting standard IAS 34 – Interim Financial Reporting as adopted by the European Union.
Our limited review of the interim financial information was conducted in accordance with international standard ISRE 2410 – Review of interim financial information performed by the independent auditor of the entity. A limited review consists of making inquiries of group management and applying analytical and other review procedures to the interim financial information and underlying financial data. A limited review is substantially less in scope than an audit performed in accordance with the International Standards on Auditing (ISA). Accordingly, we do not express an audit opinion on the interim financial information.
Based on our limited review, nothing has come to our attention that causes us to believe that the interim financial information for the six-month period ended 30 June 2013 is not prepared, in all material respects, in accordance with IAS 34 – Interim Financial Reporting as adopted by the European Union.
Diegem, 30 July 2013
The statutory auditor
DELOITTE Bedrijfsrevisoren / Reviseurs d'Entreprises
BV o.v.v.e. CVBA / SC s.f.d. SCRL Represented by Eric Nys
Adjusted performance indicators exclude non-cash Purchase Price Allocation (PPA) accounting impacts related to the Rhodia acquisition.
Adjusted net income (Solvay share) divided by the weighted average number of shares, after deducting own shares purchased to cover stock option programs
Net income (Solvay share) excluding non-cash Purchase Price Allocation (PPA) accounting impacts related to the Rhodia acquisition
Net result excluding non-cash Purchase Price Allocation (PPA) accounting impacts related to the Rhodia acquisition
REBIT excluding non-cash Purchase Price Allocation (PPA) accounting impacts related to the Rhodia acquisition
Net income (Solvay's share) divided by the weighted average number of shares, after deducting own shares purchased to cover stock option programs
Cash flow from operating activities (including dividends from associates and joint ventures)+ cash flow from investing activities (excluding acquisitions and sales of subsidiaries and other investments).
International Financial Reporting Standards
Net financial expenses comprises cost of borrowings minus accrued interests on lendings and short-term deposits, plus other gains (losses) on net indebtedness and costs of discounting provisions (namely, related to Post-employment benefits and HSE liabilities)
Sales of goods and value added services corresponding to Solvay's know-how and core business. Net sales exclude other revenues primarily comprising commodity and utility trading transactions and other revenue deemed as incidental by the Group
Operating result, i.e. EBIT before non-recurring items
REBIT before depreciation and amortization
October 25, 2013: Announcement of the 3rd quarter and the nine months 2013 results and the interim dividend for 2013 (payable in January 2014, coupon no. 93) (at 07:30) November 11, 2013: Capital Markets Day
Maria Alcón-Hidalgo Investor Relations +32 2 264 1984 E-mail: [email protected]
Edward Mackay Investor Relations +32 2 264 3687 E-mail: [email protected]
Lamia Narcisse Media Relations +33 1 53 56 59 62 E-mail: [email protected]
Caroline Jacobs Media Relations +32 2 264 1530 E-mail: [email protected]
Solvay S.A. Rue de Ransbeek, 310 1120 Bruxelles Belgique T: +32 2 264 2111 F: +32 2 264 3061
As an international chemical group, Solvay assists industries in finding and implementing ever more responsible and value-creating solutions. The Group is firmly committed to sustainable development and focused on innovation and operational excellence. Solvay serves diversified markets, generating 90% of its turnover in activities where it is one of the top three worldwide. The Group is headquartered in Brussels, employs about 29,000 people in 55 countries and generated 12.4 billion euros in net sales in 2012. Solvay SA SOLB.BE) is listed on NYSE Euronext in Brussels and Paris (Bloomberg: SOLB.BB - Reuters: SOLBt.BR).
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