Adjustment

Adjustments made to IFRS results for elements distorting comparability over time of the Group underlying performance. These adjustments consist of:

  • Results from portfolio management and reassessments,
  • Results from legacy remediation and major litigations,
  • M&A related impacts, mainly including non-cash Purchase Price Acquisition impacts (e.g. inventory step-up and amortization of intangibles) and retention bonuses relative to Chemlogics and other acquisitions,
  • Net financial results related to changes in discount rates, hyperinflation, coupons of hybrid bonds considered as dividends under IFRS and debt management impacts (mainly including gains/(losses) related to the early repayment of debt),
  • Adjustments of equity earnings for impairment gains or losses and unrealized foreign exchange gains or losses on debt,
  • Results from available-for-sale financial assets,
  • Tax effects related to the items listed above and tax expense or income of prior years.
  • All adjustments listed above apply to both continuing and discontinuing operations, and include the impacts on non-controlling interests.

Basic earnings per share

Net income (Solvay’s share) divided by the weighted average number of shares, after deducting own shares purchased to cover stock option programs.

Capital expenditures (capex)

Cash paid for the acquisition of tangible and intangible assets

Carechem

Carechem 24 is a multilingual telephone advice service providing access to a team of trained responders 24 hours a day, 365 days a year. Carechem 24 provides companies all over the world with emergency product support during a hazardous materials incident.

Cash conversion

(Underlying EBITDA + Capex from continuing operations) / Underlying EBITDA

CEFIC

European Chemical Industry Council.

CEO

Chief Executive Officer.

CFO

Chief Financial Officer.

CFROI

Cash Flow Return On Investment, calculated as the ratio between recurring cash flow and invested capital, where

  •  Recurring cash flow = Underlying EBITDA + (Dividends from associates and joint ventures – Earnings from associates and joint ventures) + Recurring capex + Recurring income taxes;
  • Invested capital = Replacement value of goodwill & fixed assets + Net working capital + Carrying amount of associates and joint ventures;
  • Recurring capex is normalized at 2% of the Replacement value of fixed assets net of Goodwill values;
  • Recurring income taxes are normalized at 30% of (Underlying EBIT – Earnings from associates and joint ventures);

CGU

Cash-generating unit.

Code of Conduct

Solvay is committed to responsible behavior and integrity, taking into account the sustainable growth of its business and its good reputation in the communities in which it operates.

Comex

Executive Committee.

CSR

Corporate Social Responsibility.

Diluted earnings per share

Net income (Solvay’s share) divided by the weighted average number of shares adjusted for the effects of dilution.

Discontinued operations

Component of the Group which the Group has disposed of or which is classified as held for sale, and:

  • Represents a separate major line of business or geographical area of operations;
  • Is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or
  • Is a subsidiary acquired exclusively with a view to resale.

Dividend yield (gross)

Gross dividend divided by the closing share price on December 31.

Dividend yield (net)

Net dividend divided by the closing share price on December 31.

DJ Euro Stoxx

Dow Jones Euro Stoxx is a pan-European stock index which includes the 326 most important shares of the general Dow Jones index, belonging to eleven countries of the Eurozone.

DJ Stoxx

Dow Jones Stoxx is a European stock index composed of the 665 most important European shares.

EBIT

Earnings before interest and taxes.

EBITDA

Earnings before interest and taxes, depreciation and amortization.

Environmental Protection Agency

The U.S. Environmental Protection Agency (EPA or USEPA) is an agency of the United States federal government which was created for the purpose of protecting human health and the environment by writing and enforcing regulations based on laws passed by Congress.

Equity per share

Equity (Solvay share) divided by the number of outstanding shares at year end (issued shares - treasury shares).

Euronext

Global operator of financial markets and provider of trading technologies.

Free Cash Flow

Cash flow from operating activities (excluding cash flow related to acquisitions of subsidiaries) and Cash flow from investing activities (excluding acquisitions and disposals of subsidiaries and other investments and excluding loans to associates and non-consolidated investments, as well as related tax elements).

FTSEurofirst 300

The FTSEurofirst 300 Index tracks the equity performance across the region of the 300 largest companies ranked by market capitalization in the FTSE Developed Europe Index.

GBU

Global Business Unit.

GHG

Greenhouse gas.

GRI

The Global Reporting Initiative (GRI) is a leading organization in the sustainability field. GRI promotes the use of sustainability reporting as a way for organizations to become more sustainable and contribute to sustainable development.

HBP

High-barrier polymer.

HDS

Highly Dispersible Silica.

HPPA

Polyamide High Performance.

IFRS

International Financial Reporting Standards.

Integrated reporting

This is a process founded on integrated thinking, which results in a periodic integrated report by an organization about value creation over time and related communications regarding aspects of value creation.

ISO 9001

The ISO 9001 standard defines a set of requirements for the establishment of a system of quality management in an organization, whatever its size and activity.

ISO 14001

The ISO 14001 family addresses various aspects of environmental management. It provides practical tools for companies and organizations looking to identify and control their environmental impact and constantly improve their environmental performance.

ISO 14040

The ISO 14040 standard covers life cycle assessment (LCA) studies and life cycle inventory (LCI) studies.

ISO 26000

The ISO 26000 is a global standard which provides guidelines for organizations that wish to operate in a socially responsible manner. The standard was published in 2010 after five years of negotiations among a large number of stakeholders worldwide. Representatives of governments, NGOs, industry, consumer groups, and the world of work were involved in its development. It therefore represents an international consensus.

Leverage ratio

Net debt / underlying EBITDA of last 12 months. Underlying leverage ratio = underlying net debt / underlying EBITDA of last 12 months.

Loss prevention process

Loss prevention aims at maintaining production flow and profitability of the plants by providing risk mitigation. It also contributes to increasing the protection of people and the environment.

LTAR

Lost Time Accident Rate.

LTI

Long Term Incentive.

M&A

Mergers and Acquisitions.

M&A related impacts

This mainly includes non-cash Purchase Price Allocation impacts (e.g. inventory step-up and amortization of intangibles other than for PPA Rhodia) and retention bonuses relative to Chemlogics and other acquisitions.

Materiality

Organizations are faced with a wide range of topics on which they could report. The relevant topics are those that may reasonably be considered important for reflecting the organization’s economic, environmental, and social impacts, or influencing the decisions of stakeholders, and therefore potentially merit inclusion in an annual report. Materiality is the threshold at which aspects become sufficiently important that they should be reported.

MTAR

Medical Treatment Accident Rate.

Net cost of borrowings

Cost of borrowings netted with interest on lendings and short-term deposits, as well as other gains (losses) on net indebtedness

Net debt

Non-current financial debt + current financial debt – cash & cash equivalents – other financial instrument receivables. Underlying net debt reclassifies as debt 100% of the hybrid perpetual bonds, considered as equity under IFRS.

Net pricing

The difference between the change in sales prices versus the change in variable costs.

Natural Currency Hedge

A natural currency hedge is an investment that reduces the undesired risk by matching cash in and outflows.

Net Financial Charges

Net cost of borrowings, costs of discounting provisions (namely, related to post-employment benefits and HSE liabilities) and income / loss from available-for-sale financial assets.

Net Sales

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.

Net working capital

Includes inventories, trade receivables and other current receivables, netted with trade payables and other current liabilities.

OCI

Other Comprehensive Income.

OECD

Organisation for Economic Co-operation and Development.

OHSAS 18001

OHSAS 18001 is an international occupational health and safety management system specification.

OLED

Organic Light-Emitting Diode.

Open Innovation

Innovation that is enriched with outside expertise, through partnerships with the academic world and by shareholdings in start-ups, either directly or via investment funds.

PEEK

Polyetheretherketone.

PO

Propylene oxide.

pp

Unit of percentage points, used to express the evolution of ratios.

PPA

Purchase Price Allocation (PPA) accounting impacts related to acquisitions, primarily for Rhodia and Cytec.

Pricing power

The ability to create positive net pricing.

PPS

Polyphenylene sulfide.

PSU

Performance Share Unit.

PPSU

Polyphenylsulfone.

Product Stewardship

A responsible approach in managing risks throughout the entire life cycle of a product, from the design stage to the end of life.

PVC

Polyvinyl chloride.

PVDF

Polyvinylidene fluoride.

R&I

Research & Innovation.

R&I intensity

Research & innovation / net sales.

REACH

REACH is the European Community Regulation on chemicals and their safe use (EC 1907/2006). It deals with the registration, evaluation, authorization, and restriction of chemical substances. The law entered into force on June 1, 2007.

Results on disposals

It includes gains/(losses) from activities presented as discontinued operations.

Revenue from non-core activities

Revenues primarily comprising commodity and utility trading transactions and other revenue deemed as incidental by the Group, considered to not correspond to Solvay’s know-how and core business.

Responsible Care®

Responsible Care® is the global chemical industry’s unique initiative to improve health, environmental performance, enhance security, and to communicate with stakeholders about products and processes.

ROE

Return on equity.

Safety Data Sheets

Safety Data Sheets are the main tool for ensuring that manufacturers and importers communicate enough information along the supply chain to allow safe use of their substances and mixtures.

SASB

Sustainability Accounting Standards Board. SASB’s mission is to develop and disseminate sustainability accounting standards that help public corporations disclose material, decision-useful information to investors. That mission is accomplished through a rigorous process that includes evidence-based research and broad, balanced stakeholder participation.

Seveso Regulations

The Control of Major Accident Hazards Involving Dangerous Substances Regulations. These regulations (often referred to as “COMAH Regulations” or “Seveso Regulations”) give effect to European Directive 96/82/EC. They apply only to locations where significant quantities of dangerous substances are stored.

Solvay Way

Launched in 2013 and aligned with ISO 26000, Solvay Way is the sustainability approach of the Group. It integrates social, societal, environmental, and economic aspects into the Company’s management and strategy, with the objective of creating value shared by all of its stakeholders. Solvay Way is based on an ambitious and pragmatic framework serving as a tool of both measurement and progress. Solvay Way lists 49 practices – practices that reflect the Solvay Way’s 22 commitments and are structured on a four-level scale (launch, deployment, maturity, performance).

SOP

Stock Option Plan.

SPM

The Sustainable Portfolio Management tool is integrated into the Solvay Way framework (linked to five practices). It serves as a strategic tool for developing information on our portfolio and analyzing the impacts of sustainability megatrends on our businesses.

STI

Short Term Incentive.

SVHC

Substance of Very High Concern (SVHC) is a chemical substance, the utilization of which within the European Union has been proposed to become subject to legal authorization under the REACH regulation.

Tax rate

Income taxes / (Result before taxes – Earnings from associates & joint ventures – interests & realized foreign exchange results on RusVinyl joint venture). The adjustment of the denominator regarding associates and joint ventures is made as these contributions are already net of income taxes.

Underlying

Underlying results are deemed to provide a more comparable indication of Solvay’s fundamental performance over the reference periods. They are defined as the IFRS figures adjusted for the “Adjustments” as defined above.

VCM

Vinyl chloride.

Velocity

Total number of shares traded during the year divided by the total number of listed shares, using the Euronext definition.

Velocity adjusted by free float

Velocity adjusted as a function of the percentage of the listed shares held by the public, using the Euronext definition.

WBCSD

World Business Council for Sustainable Development.

WCF

World Class Factory.