The Group’s net indebtedness is the balance between its financial debts and other financial instruments, and cash and cash equivalents.

In € million

 

2018

 

2017

Financial debt

 

3,810

 

4,226

Other financial instruments

 

(101)

 

(89)

Cash and cash equivalents

 

(1,103)

 

(992)

Net indebtedness

 

2,605

 

3,146

The decrease in the net indebtedness is due to strong cash generation and the cash proceeds from the issuance of a € 300 million hybrid bond.

Solvay Investment Grade rating is Baa2/P2 (stable outlook) with Moody’s and BBB/A2 (stable outlook) with Standard & Poor’s.

Financial debt: main borrowings

In € million
(except where indicated)

 

 

 

2018

 

2017

 

Nomi­nal amount

 

Coupon

 

Maturity

 

Secured

 

Amount at amort­ized cost

 

Fair value

 

Amount at amor­tized cost

 

Fair value

EMTN € bond (issuance € 500 million)

 

382

 

4.625%

 

2018

 

No

 

0

 

0

 

381

 

391

Senior US$ notes (144A;US$ 800 million)

 

698

 

3.40%

 

2020

 

No

 

697

 

697

 

665

 

681

Senior € notes

 

750

 

1.625%

 

2022

 

No

 

745

 

781

 

743

 

788

Senior US$ note Cytec Industries Inc (issuance US$ 400 million)

 

171

 

3.5%

 

2023

 

No

 

165

 

167

 

156

 

167

Senior US$ note Cytec Industries Inc (issuance US$ 250 million)

 

143

 

3.95%

 

2025

 

No

 

140

 

138

 

134

 

140

Senior US$ notes (144A;US$ 800 million)

 

698

 

4.45%

 

2025

 

No

 

695

 

706

 

663

 

708

Senior € notes

 

500

 

2.75%

 

2027

 

No

 

496

 

542

 

495

 

560

Total

 

 

 

 

 

 

 

 

 

2,937

 

3,032

 

3,237

 

3,435

The Senior US$ notes of Cytec Industries Inc. were partially repaid in 2017. The outstanding amount of the EMTN € 500 million bond was fully repaid in June 2018 (€ 382 million), after an early repayment of € 188 million already executed in 2017.

There are no instances of default on the above-mentioned financial debts. There are no financial covenants, either on Solvay SA, or on any of the Group’s holding companies.

Other financial instruments

In € million

 

2018

 

2017

Currency swaps

 

1

 

4

Other marketable securities > 3 months

 

68

 

56

Other current financial assets

 

32

 

28

Other financial instruments

 

101

 

89

The “Other financial instruments” amount to € 101 million at the end of 2018 as against € 89 million at the end of 2017. They include currency swaps, other marketable securities > three months (bank drafts), and other current financial assets (mainly margin calls of Energy Services for instruments with a negative fair value).

Cash and cash equivalents

In € million

 

2018

 

2017

Cash

 

907

 

835

Term deposits

 

197

 

157

Cash and cash equivalents

 

1,103

 

992

By their nature, the carrying amount of cash and cash equivalents is equal to, or a very good proxy of, its fair value.

Changes in financial debt and in other financial instruments arising from financing activities

In € million

 

2017

 

2018

 

Total

 

Cash flows from increase of borrowings

 

Cash flows from repayment of borrowings

 

Changes in foreign exchange rates

 

Changes in other current financial assets

 

Other in financing cash flows

 

Transfer from non-current to current

 

Other

 

Total

Bonds

 

2,856

 

 

 

 

 

76

 

 

 

 

 

 

 

4

 

2,936

Other non-current debts

 

282

 

16

 

(13)

 

(1)

 

 

 

 

 

(79)

 

4

 

208

Long-term finance lease obligations

 

44

 

 

 

 

 

2

 

 

 

 

 

(3)

 

(8)

 

35

Non-current financial debt

 

3,182

 

16

 

(13)

 

77

 

 

 

 

 

(82)

 

0

 

3,180

Short-term financial debt (excluding finance lease obligations)

 

1,015

 

2,428

 

(2,980)

 

(1)

 

 

 

126

 

79

 

(51)

 

616

Currency swaps

 

27

 

 

 

 

 

 

 

 

 

 

 

 

 

(16)

 

12

Short-term finance lease obligations

 

2

 

 

 

 

 

 

 

 

 

 

 

3

 

(3)

 

1

Current financial debt

 

1,044

 

2,428

 

(2,980)

 

0

 

 

 

126

 

82

 

(70)

 

630

Total financial debt

 

4,226

 

2,444

 

(2,994)

 

77

 

 

 

126

 

 

 

(70)

 

3,810

Currency swaps

 

(4)

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 

(1)

Other marketable securities > 3 months

 

(56)

 

 

 

 

 

 

 

(11)

 

 

 

 

 

 

 

(67)

Other current financial assets

 

(28)

 

 

 

 

 

 

 

(14)

 

11

 

 

 

 

 

(32)

Other financial instruments

 

(89)

 

 

 

 

 

 

 

(25)

 

11

 

 

 

2

 

(101)

Total cash flow

 

 

 

2,444

 

(2,994)

 

 

 

(25)

 

137

 

 

 

 

 

 

The financial debt decreased from € 4,226 million at the end of 2017 to € 3,810 million at the end of 2018.

The non-current financial debt remains rather stable:

  • on the one hand, the transfer to current financial debt for € 82 million; and
  • on the other hand, the changes in foreign exchange rates (€ 77 million) mainly generated by the US$ 1,600 million Senior Notes and Senior US$ notes Cytec Industries Inc (US$ 348 million).

The net decrease in current financial debt (from € 1,044 million in 2017 to € 630 million in 2018) is explained mainly by:

  • the transfer from non-current financial debt for € 82 million;
  • the repayment of the outstanding amount of the EMTN € bond (€ 382 million);
  • the decrease in commercial papers issued at the end of the year (€ 246 million in 2018 versus € 400 million in 2017).

The amounts presented in the cash flow statement under “increase in borrowings” and “repayment of borrowings” include the issuance of € 2,396 million and the repayment of € 2,550 million of commercial papers.

The € 137 million in “Other in financing cash flows” relates to the receipt of margin calls related to Energy Services activities (see note F18 Other cash flows from financing activities). The cash out for the Rhodia liquidity convention (€ (9) million) and other finance expenses (€ (4) million) are not presented as other financial liabilities and explain the difference with the € 123 million in the line “Other” in the cash flow from financing activities in the consolidated statement of cash flows.