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Solvay SA SOLB

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Morningstar’s Analysis

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Solvay Beats Third-Quarter Consensus and Tweaks Guidance Upward; Shares Fairly Valued

Rob Hales, CFA Equity Analyst

Analyst Note

| Rob Hales, CFA |

No-moat Solvay reported third-quarter EBITDA of EUR 599 million, up 31% organically over 2020 and beating Vara consensus by 5%. EBITDA guidance for 2021 of EUR 2.2 billion-2.3 billion was maintained but free cash flow is now expected to be EUR 800 million (EUR 750 million previously). Slight net positive changes to our outlook increase our fair value estimate to EUR 115 from EUR 109. At current levels, the shares look fairly valued.

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Company Profile

Business Description

Solvay is a Belgium-based producer of chemicals, plastics, and composites. The company has a top-three market position for nearly all of its products. Key business segments include materials, chemicals, and solutions. High-value products include aerospace composites and specialty polymers while traditional chemical products include soda ash and hydrogen peroxide. Geographical exposure is relatively balanced, with Europe, North America, and Asia each contributing a third of sales.

Rue De Ransbeek, 310
Brussels, B-1120, Belgium
T +32 22642111
Sector Basic Materials
Industry Chemicals
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 23,000