SYENSQO - Third Quarter 2024 Results

SYENSQO THIRD QUARTER 2024 RESULTS

Brussels, Belgium – November 05, 2024 - 07:00 CET

RETURN TO VOLUME GROWTH WITH 5% YEAR-ON-YEAR INCREASE AND ROBUST MARGINS IN A CHALLENGING MARKET ENVIRONMENT

Underlying (€ million)	Q3 2024	Q3 2023	Q2 2024	YoY change	YoY organic	QoQ change	9M 2024	9M 2023	YoY change	YoY organic
Net sales	1,633	1,629	1,708	0.2%	1.6%	-4.4%	4,965	5,257	-5.6%	-4.1%
Gross profit	572	592	582	-3.4%	-	-1.7%	1,737	1,890	-8.1%	-
Gross profit margin	35.0%	36.4%	34.1%	-130 bps	-	100 bps	35.0%	35.9%	-100 bps	-
EBITDA	374	418	378	-10.5%	-7.9%	-0.9%	1,114	1,324	-15.8%	-13.3%
EBITDA margin	22.9%	25.7%	22.1%	-280 bps	-	80 bps	22.4%	25.2%	-270 bps	-
Operating cash flow	210	423	43	-50.4%	-	388%	497	1,080	-54.0%	-
Op. cash flow excl. €167mn payment to NJDEP	n.a.	423	210	n.a.	-	n.a.	664	1,080	-38.6%	-
Free cash flow	27	216	-120	-87.5%	-	-123%	65	483	-86.5%	-
FCF excl. €167mn payment to NJDEP	n.a.	216	47	n.a.	-	n.a.	232	483	-52.0%	-
Cash conversion (LTM)	69%	n.a.	77%	n.a.	-	-800 bps	n.a.	n.a.	n.a.	-
Cash conv. (LTM) excl. €167mn payment to NJDEP	81%	n.a.	88%	n.a.	-	-700 bps	n.a.	n.a.	n.a.	-
ROCE (LTM)	8.1%	n.a.	8.8%	n.a.	-	-70 bps	n.a.	n.a.	n.a.	-

Highlights

Net sales of €1.6 billion increased by 2% year-on-year organically, driven by higher volumes in both the Materials and Consumer & Resources segments. Strong performance in Composite Materials and Novecare with 14% and 10% year-on-year net sales growth respectively;
Underlying EBITDA of €374 million, approximately flat sequentially, included net pricing impact of €-12 million;
EBITDA margin of 22.9% increased by approximately 80 basis points sequentially with improvements in both the Materials and Consumer & Resources segments;
Underlying net profit of €162 million;
Operating cash flow of €210 million; Free cash flow of €27 million, with cash conversion of 81%¹;
Balance sheet: net debt of €1.9 billion, approximately flat sequentially; leverage ratio of 1.3x;
Completed €75 million Long Term Incentive Plan share repurchase at average price of €75.64;
New €300 million share buyback program announced at the end of Q3;
Full year outlook ranges updated, including the impact of strike at Boeing.

Dr. Ilham Kadri, CEO

“In the context of ongoing macroeconomic and demand uncertainty, I am pleased that we returned to year-on-year volume and top line growth in Q3, led by double digit increases in Composite Materials and Novecare. We also delivered another quarter of robust margin performance across most of our business units as well as sequential improvements in both segments, led by Specialty Polymers, Technology Solutions and Novecare.

“The sharper focus we have gained since the separation has allowed us to accelerate our strategy to create value for shareholders. This has included more optionality around how we allocate capital, prioritizing our investments towards the most attractive growth opportunities and continually reviewing our costs. Now that we see more clearly our needs and how we can better serve our customers, we plan to take actions to become even more efficient to further improve our operating leverage and support the delivery of our mid-term plan.”

“Aided by our strong financial position, our Board of Directors also approved a new EUR 300 million share buyback program at the end of the quarter, which we expect to commence immediately.”

2024 Outlook

While we expect year-on-year volume growth to continue in the fourth quarter of 2024, a number of our end markets continue to be impacted by ongoing macroeconomic and industry uncertainties, most notably Automotive and Aerospace.

In addition, our outlook reflects fourth quarter seasonality as well as the expected EBITDA and cash flow impacts from the strike at Boeing and its related supply chain disruption.

As a result, our full year 2024 outlook is now as follows:

Underlying EBITDA: in the range of €1.4 billion - €1.44 billion;
Capital expenditures: in the range of €600 - €650 million;
Free Cash Flow: approximately €400 million, excluding the €167 million payment to the New Jersey Department of Environmental Protection, which was made in April 2024.

Contacts

Investors & Analysts		Media
*Sherief Bakr* *+44 7920 575 989* *Loïc Flament* *+32 478 69 74 20*	*Bisser Alexandrov* *+33 607 635 280* *Callie Gauzer* *+1 908 642 7363*	*Perrine Marchal* *+32 478 32 62 72* *Laetitia Schreiber* *+32 487 74 38 07*
investor.relations@syensqo.com		media.relations@syensqo.com

Safe harbor

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 materialize, 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.

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