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1. Company Snapshot

1.a. Company Description

Solvay SA provides advanced materials and specialty chemicals worldwide.It operates through four segments: Materials, Chemicals, Solutions, and Corporate & Business Services.The Materials segment offers specialty polymers, including aromatic polymers, high barrier polymers, and fluoropolymers for the electronics, automotive, aircraft, and healthcare industries; and composite materials for aerospace engineered materials market.


The Chemicals segment produces and sells soda ash and sodium bicarbonate primarily to the flat and container glass industries, as well as for use in detergents, pharmaceutical, and feed and food industries; hydrogen peroxide for use primarily in the paper industry to bleach pulp, as well as chemicals, electronics, food, mining, and environment; and dispersible silica for tire manufacturers; and solvent solutions, specialty phenols, polyamide derivatives and smart, functional, and sustainable yarns and polymers.The Solutions segment offers specialty chemicals for agro, home and personal care, coatings, and industrial markets; technology solutions in specialty mining reagents, phosphine-based chemistry, and solutions for the stabilization of polymers; fluorine and rare-earth formulations for automotive, electronics, agrochemical, and construction applications; and vanillin for the flavors and fragrances industries, as well as synthetic intermediates used in pharmaceuticals, agrochemicals, and electronics.This segment also provides friction reducers, gelling agents, emulsion breakers, surfactants, inhibitors, cementing additives, and biocides for upstream oilfield chemicals sector, as well as sodium hypophosphite for metal plating and other applications.


The Corporate & Business Services segment provides energy and other business services.The company was founded in 1863 and is headquartered in Brussels, Belgium.

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1.b. Last Insights on SOLB

Solvay's recent performance has been impacted by mixed shareholder returns and financial signals. Analysts modestly lowered the Fair Value Estimate from €29.83 to €29.03 per share, increasing the discount rate for the company. Morgan Stanley's recent notifications indicate that they have crossed the 3% threshold, holding 0.03% voting rights and 3.06% equivalent financial instruments. The company's valuation has been questioned amidst short-term caution regarding its performance. Solvay's climate action report for COP30 highlights its commitment to sustainability. However, its PEEK market growth faces challenges, including high production costs. (Source: various reports)

1.c. Company Highlights

2. Solvay's Q3 2025 Earnings: A Resilient Performance Amidst Challenging Market Conditions

Solvay reported underlying net sales of EUR 1.040 billion in Q3 2025, down 7% year-on-year, with volumes declining by 4% mainly due to weaker performance in the Coatis business and soda ash seaborne market. Despite the challenging environment, the company maintained a solid EBITDA margin of 22%, with underlying EBITDA amounting to EUR 232 million, down 7% compared to last year. The actual EPS came out at '0.825', beating estimates of '0.55'.

Publication Date: Nov -15

📋 Highlights
  • CO2 Emission Rights Sale:: EUR 40M EBITDA and EUR 50M cash gain from Q3 sale, reflecting strategic decision to optimize carbon footprint.
  • Operational Excellence Cost Savings:: EUR 350M target by 2028 through digital infrastructure and condition-based maintenance, leveraging 9,000+ sensors by 2027.
  • Rare Earth Expansion:: EUR 50–100M investment planned to produce Nd-Pr and 3 additional rare earths by 2026, targeting 30% European market share in permanent magnets.
  • Q3 Financial Performance:: Underlying EBITDA EUR 232M (-7% YoY), with free cash flow EUR 117M and leverage ratio maintained at 1.8x.
  • Energy Transition Strategy:: CO2 price risk mitigation via 2030 coverage target, coupled with EUR 37M savings by 2027 from energy/material efficiency improvements.

Operational Challenges and Strategic Initiatives

The company's soda ash business is facing pressure in seaborne export markets due to Chinese overcapacity, prompting Solvay to reduce production in its European soda ash exporting plants. However, this move helped save CO2 emission rights consumption, and the company sold part of its CO2 emission rights inventory in Q3, generating EUR 40 million EBITDA and EUR 50 million cash gain. As Philippe Kehren stated, "this is not a one-off decision, but a business decision that may be repeated in the future if market conditions persist."

Transformation and Cost Savings

Solvay is focused on transforming the company through operational excellence, aiming to generate EUR 350 million of cost savings by 2028. The company has invested significantly in digital infrastructure and capability, creating a world-class data structure and leveraging its scale to quickly deploy across the organization. This has enabled Solvay to implement a Star factory program, transforming its maintenance strategy and redefining how it manages material and energy performance across its industrial operations.

Valuation and Outlook

With a P/E Ratio of 20.68 and an EV/EBITDA of 7.1, the market is pricing in a certain level of growth and profitability. Analysts estimate next year's revenue growth at 1.5%. Solvay confirms its full-year guidance for 2025, with underlying EBITDA expected to be between EUR 880 million and EUR 930 million. The company's Dividend Yield stands at 8.34%, indicating an attractive return for investors. Given the current challenges and opportunities, Solvay's strategic initiatives and cost-saving measures are expected to drive long-term value creation.

Rare Earth Business and Future Prospects

Solvay is expanding its rare earth business, having inaugurated a new production line in La Rochelle in April, producing Nd-Pr oxide for permanent magnets. The company plans to start separating and purifying three more rare earth elements by 2026, positioning itself to capture up to 30% of the European market. With a total investment of EUR 50 million to EUR 100 million expected to bring the assets to full capacity, Solvay is well-positioned to capitalize on the growing demand for rare earths driven by the energy transition.

3. NewsRoom

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Why USA Rare Earth Stock Soared Today

Dec -04

Source:

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Participation notification by UBS Group AG

Dec -04

Source:

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USA Rare Earth Subsidiary LCM Partners with Arnold Magnetic Technologies to Secure Rare Earth Metals Supply

Dec -04

Source: globenewswire.com

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This Rare Earths Stock Just Locked Down a New Supply Deal. Should You Buy Shares Here?

Nov -28

Source:

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Is Solvay an Opportunity After Strategic Asset Spin-Off and Recent Price Pullback?

Nov -27

Source:

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UAE Soda Ash Market Report 2025-2034: Solvay, Sisecam, and Tata Chemicals Strengthen Competitive Position Through Global Scale and Strategic Expansion

Nov -24

Source:

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Participation notifications by Morgan Stanley

Nov -21

Source:

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USA Rare Earth Subsidiary Less Common Metals and Solvay Sign Strategic Agreement to Provide Permag Secure, Stable Supply of Rare Earth Metals

Nov -20

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.75%)

6. Segments

Basic Chemicals

Expected Growth: 4.83%

Solvay SA's Basic Chemicals segment growth of 4.83% is driven by increasing demand for soda ash and sodium bicarbonate from the glass and detergent industries, respectively. Additionally, the company's strategic focus on sustainability and cost savings initiatives has improved operational efficiency, contributing to the segment's growth.

Performance Chemicals

Expected Growth: 4.65%

Solvay SA's Performance Chemicals segment growth of 4.65% is driven by increasing demand for sustainable solutions in the oil and gas industry, growth in the Asia-Pacific region, and the company's focus on innovation and R&D investments in specialty chemicals, such as surfactants and phosphorus-based products.

Corporate & Business Services

Expected Growth: 4.83%

Solvay SA's Corporate & Business Services segment growth of 4.83% is driven by increasing demand for sustainable solutions, cost savings initiatives, and strategic partnerships. The segment benefits from Solvay's diversified portfolio, operational efficiencies, and investments in digitalization, enabling it to capitalize on emerging trends in the chemicals and materials industry.

7. Detailed Products

Soda Ash

Sodium carbonate, commonly known as washing soda, is a natural mineral that is used in various industries such as glass manufacturing, paper production, and water treatment.

Bicar

Sodium bicarbonate, also known as baking soda, is a natural mineral that is used in various industries such as food, pharmaceuticals, and personal care.

Solvay Fluorides

Fluoride-based products used in various industries such as aluminum smelting, steel production, and pharmaceuticals.

Rhodiarone

A range of specialty polymers used in various industries such as automotive, aerospace, and industrial manufacturing.

Solvay Silica

Silica-based products used in various industries such as tires, coatings, and personal care.

Aerosil

Fumed silica used in various industries such as coatings, adhesives, and personal care.

Solvay Novecare

Specialty surfactants and polymers used in various industries such as personal care, cleaning, and oil and gas.

Solvay Aroma

Flavor and fragrance ingredients used in various industries such as food, beverages, and personal care.

8. Solvay SA's Porter Forces

Forces Ranking

Threat Of Substitutes

Solvay SA operates in a market with moderate threat of substitutes. While there are some alternatives available, they are not significantly cheaper or better, limiting the threat.

Bargaining Power Of Customers

Solvay SA's customers have limited bargaining power due to the company's strong brand reputation and diversified product portfolio.

Bargaining Power Of Suppliers

Solvay SA's suppliers have moderate bargaining power due to the company's dependence on certain raw materials and the presence of some large suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the chemical industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The chemical industry is highly competitive, with many established players competing for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 60.68%
Debt Cost 3.95%
Equity Weight 39.32%
Equity Cost 8.69%
WACC 5.81%
Leverage 154.32%

11. Quality Control: Solvay SA passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Buzzi Unicem

A-Score: 6.1/10

Value: 6.1

Growth: 7.3

Quality: 7.2

Yield: 3.8

Momentum: 8.0

Volatility: 4.3

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Kemira

A-Score: 5.9/10

Value: 6.5

Growth: 6.0

Quality: 6.0

Yield: 6.9

Momentum: 2.5

Volatility: 7.7

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SOL

A-Score: 5.3/10

Value: 2.2

Growth: 7.3

Quality: 4.9

Yield: 0.6

Momentum: 9.0

Volatility: 7.7

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Dottikon Es Holding

A-Score: 4.9/10

Value: 2.5

Growth: 8.6

Quality: 7.0

Yield: 0.0

Momentum: 6.5

Volatility: 4.7

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Solvay

A-Score: 4.7/10

Value: 6.0

Growth: 2.1

Quality: 3.4

Yield: 10.0

Momentum: 1.0

Volatility: 5.7

1-Year Total Return ->

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Bachem

A-Score: 4.1/10

Value: 3.3

Growth: 6.8

Quality: 6.4

Yield: 3.8

Momentum: 2.5

Volatility: 1.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

27.22$

Current Price

27.22$

Potential

-0.00%

Expected Cash-Flows