Solvay
2019 Annual Integrated Report

Our Purpose

Presidents’ message

GRI Disclosures

2019 was a year of notable progress, in which we delivered on our financial and environmental commitments in a challenging environment by focusing on customers, cost discipline and cash management. We also made step changes on three fronts – Strategy, Structure and Culture.

Our Group overcame significant external headwinds, demonstrated resilience through the delivery of stable underlying EBITDA and generated record free cash flow with improved phasing relative to prior years. Solvay proposed to its shareholders to maintain the 2019 dividend at 3.75 euros per share. In terms of the Group portfolio, we completed the divestment of the Polyamides activities to BASF and Domo Chemicals, which closed in early 2020. Proceeds will help us to deleverage our balance sheet and decrease pension liabilities in 2020.

We initiated a comprehensive strategy review of all our businesses and our operating model. We confirmed our strong foundation in science, sustainability and innovation – a core part of our DNA! We challenged and validated the alignment of key businesses to powerful megatrends that will drive superior growth in important end markets, where we hold leadership positions.

Yet, we want to better respond to challenges and opportunities – and to develop our path to achieving greater value, faster. Our review resulted in the G.R.O.W. strategy, founded on three new business segments which will operate with distinct strategic mandates.

The pure-play Materials segment, which comprises the high performance, high margin specialty polymers and composites businesses, has a sole mission to “accelerate topline Growth”.

The Chemicals segment comprises “mono-technology” businesses, each has a leading market position with competitive global advantage. The mandate is to consistently deliver “Resilient cash”.

Ilham Kadri, Chairman of the Executive Committee and CEO

Nicolas Boël, Chairman of the Board of Directors

The Solutions segment represents a mix of different businesses operating in diverse, niche markets. Its strategic mandate is to “Optimize” its return on capital employed.

The new Operating Model will realise more synergy transversally, will fully leverage the strength and competencies across businesses to “Win together”, to unlock the full value of our Group, fast.

Many stakeholders – our employees as well as clients and investors – contributed to the development of our Purpose: “We Bond People, Ideas and Elements to Reinvent Progress”. It calls on all of us to go beyond who we are, to bond together as teams and with all our stakeholders, as we know that what brought us here today will not take us there tomorrow.

Looking ahead, we began aligning our organization structure to our G.R.O.W. strategy, leveraging procurement, manufacturing & supply chain opportunities, leading to additional efficiency plans and measures that will enable us to operate as a leaner, nimble organization, better positioned to support our customers and create value.

“I am very satisfied with our progress in 2019. We have set an ambitious course for Solvay and defined clear objectives to unleash our full potential, while at the same time remaining focused and addressing short-term challenges.”

Nicolas Boël

“What a year! 2019 had its share of challenges and it helped to bring us together as a One Solvay team, to overcome and to propel us forward. We redefined who we are, we agreed how we will thrive together in a sustainable way, and we committed to each other to always aim high, to deliver fast. We started to confront complexity that was holding us back and we’re well on the way to driving the cultural transformation that will help each and every one of us to be at our best, at the service of customers, employees, communities and shareholders. Thank you.”

Ilham Kadri

Critical in helping Solvay unleash its full potential are our new sustainability goals included in Solvay ONE Planet, to help our Group positively shape our impact in three areas: climate, resources, and quality of life, through the next decade and beyond. Solvay ONE Planet is ambitious as we are aligning our emissions with the Paris agreement trajectory and we are stopping any future investment in coal-powered energy plants.

But we are also raising the bar in natural resources management and are equally supporting a better life for our people and the communities in which we work. In short, Solvay ONE Planet is a concrete example of our new Purpose, as we seek to go beyond anything we’ve ever done before.

Indeed, every day, we seek to “progress beyond”. We look into the microscope, to 2020 and to the imperative of overcoming our short-term challenges and, at the same time, we look into the telescope, at our mid-term targets, and our long-term aspiration to unleash our potential, fast. We owe it to our stakeholders today, tomorrow and to the generations that will follow.

Ilham Kadri, Chairman of the Executive Committee and CEO (signature)

Ilham Kadri, Chairman of the Executive Committee and CEO

Nicolas Boël, Chairman of the Board of Directors (signature)

Nicolas Boël, Chairman of the Board of Directors