Solvay S.A.

Underlying net sales in Q2 were slightly over EUR 1 billion, down 7% year over year and up sequentially across all business units. Underlying EBITDA was EUR 187 million, down 20% year over year, with an 18.1% margin. Management said around half of the EBITDA decline reflected the Middle East conflict, mainly the temporary shutdown of the Saudi peroxide plant, and the other half reflected the absence of a one-off benefit in Special Chem in Q2 2025. For the first half, free cash flow to Solvay shareholders was EUR 15 million, Q2 free cash flow was minus EUR 11 million, underlying net debt was EUR 1.8 billion at end-June, and the leverage ratio temporarily moved above 2x. For 2026, Solvay reaffirmed underlying EBITDA guidance of EUR 770 million to EUR 850 million, free cash flow above EUR 200 million, and CapEx of around EUR 300 million.

Philippe Kehren emphasized safety, saying the reportable injury rate improved again and that the company is reinforcing its safety culture. Strategically, he framed the quarter as a mix of strong positions in bicarbonate and electronic grade peroxides versus pressure in soda ash, while saying the group is continuing its transformation and selectively investing in growth areas. He was optimistic on rare earths, highlighting Solvay’s unique non-China separation capabilities, new sourcing agreements, and a step-up in heavy rare earth investment.

Alexandre Blum said Q2 EBITDA was hit by weaker soda ash export pricing, the Middle East conflict, and the more general geopolitical environment, but cost control remained strong with EUR 26 million of savings in the quarter. He noted free cash flow was seasonally negative in Q2, with first-half CapEx of about EUR 140 million, working-capital outflow of EUR 79 million, and provisions outflow of EUR 106 million tied mainly to transformation and restructuring. He also said corporate EBITDA was minus EUR 25 million and confirmed the full-year expectation for corporate credit costs remains between EUR 70 million and EUR 80 million, while net debt of EUR 1.8 billion and leverage above 2x should revert to around 2x by year-end.

Analysts pressed management on how confident it is in the Sadara peroxide restart, whether guidance assumes that restart, and how much the delayed soda ash shipments shifted between quarters. Management said it is actively preparing for a restart before the end of Q3 and expects to be ready, but acknowledged that if the conflict persists there are multiple scenarios to consider. On soda ash, management said the shipment delay was a logistics phasing issue and quantified the impact only as a single-digit million euro EBITDA effect. Questions also focused on China-driven soda ash price pressure, rare earth capex, and 2027 earnings visibility; management said Chinese imports are not currently pressuring Europe directly, rare earth investments are built on existing assets and supported by customers and some public funding, and it is too early to talk about 2027 earnings beyond continued transformation and selective growth.