Solvay - Logical next steps in separation process
Solvay has announced the capital structures and financial policies of SpecialtyCo and EssentialsCo which are broadly in line with our expectations. EssentialsCo is also committed to have an investment grade rating, while paying out a solid dividend, which underlines the significant deleveraging delivered. These logical next steps confirm our positive stance as outlined in our recently published in-depth report called 'Value creation by separation'. We see room for a re-rating of SpecialtyCo. In our view Solvay deserves more credits for its successful transformation. We reiterate our Buy rating and TP of EUR 148 based on our 2024E SOTP.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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