Solvay S.A.

Underlying net sales in Q2 were slightly over EUR 1 billion, down 7% year over year. Underlying EBITDA was EUR 187 million, down 20% year over year, with an EBITDA margin of 18.1%. The main year-over-year EBITDA drivers were the Middle East conflict, especially the temporary shutdown of the Saudi peroxide plant, and the absence of a EUR 20 million one-off benefit in Special Chem in Q2 2025. Solvay also said it delivered EUR 26 million of cost savings in the quarter. For the first half, free cash flow to Solvay shareholders was EUR 15 million; underlying net debt was EUR 1.8 billion at the end of June; and leverage was temporarily above 2x, with a year-end target of around 2x. Management reaffirmed 2026 guidance for underlying EBITDA of EUR 770 million to EUR 850 million, free cash flow to Solvay shareholders from continuing operations above EUR 200 million, and CapEx around EUR 300 million.

Philippe Kehren emphasized safety, transformation, and selective growth. He said the company is improving its safety culture, is actively preparing to restart the Saudi peroxide plant before the end of Q3, and views the EU ETS draft as moving in the right direction for industrial competitiveness and decarbonization. He framed rare earths and electronic-grade peroxides as strategic growth areas, while also noting active portfolio review and footprint management to create long-term value.

Alexandre Blum said Q2 was pressured by weaker soda ash export pricing, the Middle East conflict, and broader geopolitical effects. He quantified the Q2 EBITDA decline at 20%, to EUR 187 million, and said roughly half of the drop related to the Saudi peroxide shutdown and the other half to the prior-year Special Chem one-off. He also highlighted EUR 26 million of quarterly cost savings, H1 free cash flow of EUR 15 million, H1 CapEx of approximately EUR 140 million, H1 working capital outflow of EUR 79 million, and H1 provisions cash outflow of EUR 106 million. He noted net debt of EUR 1.8 billion, the temporary leverage increase above 2x, and said the company expects leverage back around 2x by year-end.

Analysts pressed on confidence in the Sadara restart, soda ash pricing pressure from cheap Chinese exports, the modest size and funding of the rare earth expansion, and how Solvay can grow earnings into 2027. Management said the Saudi peroxide unit is being actively prepared for restart before the end of Q3, that Chinese soda ash is not currently reaching Europe in meaningful volumes because transport costs remain too high, and that the rare earth buildout is incremental because it leverages existing assets, customer commitments, and some government support or customer prefinancing. On the guidance range, management said the key swing factor is the peroxide restart; on cash, they said Q3 remains under pressure but Q4 should be more back-ended.