NOTE B3 Underlying EBITDA
- 1 NOTE B1 Net sales
- 2 NOTE B2 Underlying raw material & energy costs
- 3 NOTE B3 Underlying EBITDA
- 4 NOTE B4 Underlying depreciation & amortization
- 5 NOTE B5 Underlying net financial charges
- 6 NOTE B6 Underlying income taxes
- 7 NOTE B7 Underlying profit from discontinued operations
- 8 NOTE B8 CAPEX
- 9 NOTE B9 Free Cash Flow
- 10 NOTE B10 Net working capital
- 11 NOTE B11 Net debt
- 12 NOTE B12 CFROI
- 13 NOTE B13 Research & Innovation
Underlying EBITDA grew 7.5% to € 2,284 m, driven by pricing power and fixed cost reduction benefits. Operational excellence exceeded € 200 m, while completion of the Cytec integration delivered € 70 m of synergies, well ahead of the initial plan. There were no significant effects from volume/mix changes. Foreign exchange fluctuations and scope had a slightly negative impact.
Volumes were largely flat and had no overall impact on EBITDA.
Continued pricing power pushed net pricing up 5.9% year on year. Lower sales prices were more than compensated by lower raw material costs and delivery of operational excellence initiatives in all segments, except in Advanced Formulations where the price pressure in the oil & gas market proved too heavy. Solvay’s rolling hedging policy protected the pricing power against short-term currency fluctuations.
Fixed costs were down, adding 2.9% to EBITDA, supported by operational excellence and synergies delivery, thereby more than compensating for inflation and the additional costs from increased production capacity.
The net foreign exchange impact on conversion was (1.9)%, mainly linked to the significant depreciation of the Venezuelan bolivar and Chinese yuan.
The scope effect on EBITDA accounted for (0.4)%.
The underlying EBITDA margin reached 21%, up 2.4 pp versus 2015, thereby exceeding 20% for the first time.