Solvay Relies on Ongoing Transformation
At its Capital Markets Day in London Solvay S.A., Brussels, Belgium, presented its ongoing transformation to strengthen its business profile and confirms its strategy and vision, targeting higher growth, better returns and lower capital intensity. Over the past 18 months, the Group has reshaped its portfolio of activities enabled by a new organisation fostering an agile and entrepreneurial culture.
Solvay has built capability to seize opportunities with its Consumer Chemicals and Advanced Materials growth engines. It has also launched breakthrough excellence measures to fuel sustainable cash generation at its resilient segment Performance Chemicals and to restore profitability of the Functional Polymers segment. Among the main elements of its portfolio management, Solvay has bolstered its growth potential with the acquisition of U.S.-based Chemlogics, creating an extensive portfolio of tailored chemical solutions for the fast-growing oil and gas market. Moreover, Solvay has progressed in its plans to reduce exposure to the chlorovinyls business with a joint venture project in Europe and a divestment of its vinyls activity in Latin America, lowering cyclicality in its portfolio.
These moves allow Solvay to reposition itself towards a less asset-intensive and more sustainable business model. In addition, Solvay is rebalancing its geographical presence in Europe, Asia and the Americas and enhancing its exposure to various end-markets with superior growth potential.
More than 100 major commercial and manufacturing excellence programs spanning from energy to procurement and supply chain efficiencies have been deployed across the Group.
With these developments and its growth levers in place, Solvay now expects its REBITDA to reach between EUR 2.3 and EUR 2.5 billion by 2016. Solvay aims to expand REBITDA margins to 18% and to improve its cash flow return on investment (CFROI) by more than 100 basis points compared to 2012. REBITDA growth will largely be driven by excellence initiatives, which should contribute EUR 670 million versus 2013 levels. Throughout this period, Solvay also plans to selectively invest EUR 700 to EUR 800 million per year with more than two thirds of these investments focused on the Consumer Chemicals and Advanced Materials growth engines.
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