Story
Solvay Reaffirms 2026 Outlook as Q2 Sales Fall on Weaker Volumes and Pricing
Summary
The Belgian chemical company reported a 7.4% organic sales decline for the second quarter, driven by lower volumes and prices. Despite the sales miss, adjusted EBITDA slightly surpassed consensus estimates, and the company maintained its full-year 2026 financial guidance.
Solvay (EBR:SOLB) reported a decline in second-quarter sales amid falling volumes and prices but maintained its full-year financial guidance, according to a company release on Wednesday. The chemical manufacturer's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) came in slightly ahead of market expectations.
Quarterly Performance in Detail
For the second quarter, Solvay's group sales reached €1,031 million, missing the consensus analyst estimate of €1,046 million. The company reported a 7.4% organic sales decline, which it attributed to a 5.3% drop in volumes and a 2.2% decrease in pricing.
Despite the revenue shortfall, adjusted EBITDA was €187 million, which was 2% above consensus expectations, though 2% below Jefferies' forecast. The company's financial position showed strain, with free cash flow to shareholders turning to a negative €11 million, a sharp reversal from a positive €54 million in the same period of 2025. Net financial debt stood at €1,829 million, or 2.3 times net debt to EBITDA.
Segment Results Show Mixed Picture
The company's divisions delivered divergent results. The Basic Chemicals division posted a strong performance, with adjusted EBITDA of €134 million, beating consensus estimates by 5% and Jefferies' forecast by 22%. This came despite a 7.2% organic sales decline in the segment to €622 million.
AdWithin this division, Soda Ash sales fell to €404 million, an 8.4% organic drop, as pricing weakened in seaborne markets. Peroxides sales declined 4.9% organically to €218 million, impacted by an operational suspension at a site in Saudi Arabia. In contrast, the Performance Chemicals division's adjusted EBITDA of €78 million missed consensus by 8%, with sales falling 7.6% organically to €409 million.
Outlook and Cost Savings Confirmed
Solvay reaffirmed its financial outlook for the full year 2026, signaling confidence in its operational strategy despite the challenging quarter. The company's guidance includes:
- Adjusted EBITDA between €770 million and €850 million
- Free cash flow to shareholders above €200 million
- Capital expenditures of approximately €300 million
The company also highlighted progress on its cost-saving initiatives, stating that €288 million in savings have been achieved since 2024. This puts it on track to reach its cumulative target of approximately €300 million by the end of 2026.
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