Syensqo SA: Syensqo full-year 2023 results

Press release
Regulated information
March 12, 2024 at 7 a.m. CET

Syensqo full-year 2023 results

MILESTONE YEAR SUCCESSFULLY COMPLETED; EBITDA IN-LINE WITH OUTLOOK AND ACCELERATION OF INVESTMENTS TO EXTEND LEADERSHIP POSITION & SUPPORT FUTURE VALUE CREATION

		Fourth quarter 2023					Full year 2023
Underlying (in € million)		2023	2022	% YoY	% organic		2023	2022	% YoY	% organic
Net sales		1,577	1,930	-18.3%	-14.2%		6,834	7,890	-13.4%	-10.2%
EBITDA		294	397	-25.9%	-20.6%		1,618	1,863	-13.1%	-10.0%
EBITDA margin		18.7%	20.6%	-190 bps	-		23.7%	23.6%	+10 bps	-
Operating cash flow		-	-	-	-		1,275	1,336	-4.6%	-
Free cash flow1		-	-	-	-		448	577	-22.4%	-
ROCE (LTM)2		-	-	-	-		10.6%	13.7%	-310 bps	-

FY 2023 Highlights

• Successfully completed separation from Solvay to create a new independently listed speciality chemical leader focused on innovation and growth
• Net sales of €6.8 billion decreased by 10% organically versus a record full year 2022, driven by 11% lower volumes and 1% increase in prices. Volumes were impacted by the more challenging macroeconomic environment and customer destocking, partially offset by strong growth in Composite Materials
• Underlying EBITDA of €1.6 billion in-line with full year 2023 outlook; EBITDA margin of 23.7% increased by 10 basis points year-on-year, supported by strong net pricing
• Underlying net profit of €752 million
• Strong operating cash flow of €1.3 billion allowing for an acceleration in growth investments to extend leadership position and drive long term profitable growth. Free cash flow to shareholders of €448 million
• Strengthened balance sheet with year end net debt of €1.6 billion and leverage ratio of 1.0x
• Return on Capital Employed (ROCE) of 10.6%
• Proposed dividend of €1.62 per share (payout ratio of 23%), as announced in November 2023, subject to shareholders' approval during the Annual General Meeting scheduled for May 23, 2024
• Launched new and more ambitious sustainability goals, targeting carbon neutrality by 2040
• 50% of 2030 Scope 1, 2 and 3³ greenhouse gas emissions (GHG) reduction targets already achieved
  

Ilham Kadri, CEO

"2023 was a historic year for Syensqo and I am proud of our achievements. We successfully completed our separation, listed on Euronext Brussels and Paris in December, while meeting our full year EBITDA target, and further strengthening our balance sheet. This was all achieved in the context of a volatile macroeconomic and business environment. We also used our strong cash generation to accelerate the pace of our capital investments in key strategic technologies and platforms, aligned with our mid-term targets.

"Over the last two years, we have significantly outperformed our markets and peer group. While we currently expect a muted recovery in demand in many of our markets during 2024, I have never been more confident in the long-term drivers of our business and our teams' ability to innovate and win new customers to unlock shareholder value."

2024 Outlook

For 2024, we expect the overall demand dynamics across our major end markets to reflect the trends we saw towards the end of 2023, with flattish overall volumes. In addition, the end of customer destocking in a number of our end markets has started to prompt a more stable demand outlook since the start of the year. More specifically, and based on our year-to-date performance, we expect our Q1 2024 underlying EBITDA to increase by approximately 20% versus the level achieved in Q4 2023.

Full-year underlying EBITDA is currently estimated to be in the range of €1.4 billion and €1.55 billion. The lower end of range is aligned with current market dynamics and the annualised EBITDA performance we expect to achieve in Q1 2024. The higher end of the range assumes a modest year-on-year volume recovery, predominantly in the second half of the year, subject to the overall macroeconomic and demand environments.

Capital expenditures are expected to be in the range of €600-€650 million as we prioritise our investments based on the outlook for 2024 and take into account the acceleration of overall spend in 2023. Free Cash Flow is estimated to be in the range of €400 million and €500 million, excluding the previously announced c.$180million PFAS payment to the New Jersey Department of Environmental Protection, which is expected to be made during Q2 2024.

Aligned with the mid-term financial targets provided at our recent Capital Markets Day, the Syensqo team is focused on accelerating value creation by delivering superior revenue growth, margin expansion and increasing returns.



Mid-term Financial Targets

Syensqo's mid-term financial targets, as set at our Capital Markets Day, are as follows:

• Net sales growth: 5% to 7% (2024-2028)
• Underlying EBITDA Margin (in %): to mid-20s by 2028
• Return on Capital Employed:to mid-teens by 2028
  
  

Register to the webcast scheduled at 14:00 CET here- Financial report- Financial calendar

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¹Free cash flow after payment of net interests, coupons of perpetual hybrid bonds and dividends to non-controlling interests. This represents the cash flow available to Syensqo shareholders, to pay its dividend and/or to reduce the net financial debt.
² Return on Capital Employed (LTM = last twelve months)
³ Focus 5 categories covering at least 70% of the full scope, eligible for SBTi

Contacts

Media relations	Investor relations
Perrine Marchal [phone] Laetitia Schreiber [phone] [e-mail] (mailto:[e-mail])	Sherief Bakr [phone] Bisser Alexandrov [phone] Imtiyaz Lokhandwala [phone] [e-mail] (mailto:[e-mail])

Safe harbour

This press release may contain forward-looking information. Forward-looking statements describe expectations, plans, strategies, goals, future events or intentions. The achievement of forward-looking statements contained in this press release is subject to risks and uncertainties relating to a number of factors, including general economic factors, interest rate and foreign currency exchange rate fluctuations, changing market conditions, product competition, the nature of product development, impact of acquisitions and divestitures, restructurings, products withdrawals, regulatory approval processes, all-in scenario of R&I projects and other unusual items. Consequently, actual results or future events may differ materially from those expressed or implied by such forward-looking statements. Should known or unknown risks or uncertainties materialise, or should our assumptions prove inaccurate, actual results could vary materially from those anticipated. The Company undertakes no obligation to publicly update or revise any forward-looking statements.

About Syensqo

Syensqo is a science company developing groundbreaking solutions that enhance the way we live, work, travel and play. Inspired by the scientific councils which Ernest Solvay initiated in 1911, we bring great minds together to push the limits of science and innovation for the benefit of our customers, with a diverse, global team of more than 13,000 associates.
Our solutions contribute to safer, cleaner, and more sustainable products found in homes, food and consumer goods, planes, cars, batteries, smart devices and health care applications. Our innovation power enables us to deliver on the ambition of a circular economy and explore breakthrough technologies that advance humanity.

Attachments

• 2023Q4_PR_EN_FINAL (https://ml-eu.globenewswire.com/Resource/Download/4e683dc2-d8b7-4094-b711-db0a6db799f3)
• 2023Q4_Financialreport_EN_FINAL (https://ml-eu.globenewswire.com/Resource/Download/4d390462-2c25-4962-a02a-005a693b5a7d)