Solvay From gold to silver in soda ash
Solvay has lost its top spot in the global soda ash market following the acquisition of Genesis Alkali by WE Soda. Whilst soda ash prices continue to be impacted in 2025 by weak end markets, we still see a case for a gradual market tightening and increasing pricing power in the years ahead. Combined with continued savings deliveries, this translates into an adjusted EBITDA CAGR forecast of 5.5% for the period 2026-2028, after a presumed flat 2025. Solvay is a base chemicals group with a prudent balance sheet approach (net debt/EBITDA 1.5x) and focus on (mild) organic growth which results in a capital allocation that is mainly oriented towards dividend pay-outs (with a stable to progressive dividend policy currently representing a 6.8% dividend yield). On the back of this healthy dividend yield and attractive valuation, we maintain our Accumulate rating and € 40 TP.Solvay is engaged in chemical and plastic businesses worldwide. Co. offers chemical products such as advanced materials, barium strontium, calcium chloride, caustic soda, chlorinated products, fluor, peroxygen products, polyglycerols, precipitated calcium carbonate, soda ash, and sodium bicarbonate. It also provides specialty polymers, such as Spire ultra polymers, Solviva biomaterials, and sulfone polymers. Co. structures its activities around five operating segments: Advanced Formulations, Advanced Materials, Performance Chemicals, Functional Polymers and Corporate & Business Services, each with its own specific business model and each comprised of Global Business Units (GBUs).
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