Solvay - Rerating from separating
With the upcoming separation, we expect to see a multiple rerating of Syensqo, while ‘Solvay 2.0' will be an attractive dividend play (7-8% yield). The upcoming Q3-23 results will likely be challenging though.We reiterate our Buy and TP of EUR 143 p/s, broken down in EUR 111 p/s for Syensqo (target EV/EBITDA 7.5x) and EUR 32 for Solvay 2.0 (5.5x)Strong financial performance underlines successful transformationReport 30p. Since CEO Ilham Kadri took over in March 2019, we have seen significant improvement in portfolio, growth, margins, returns, FCF, balance sheet and ESG. In particular on pricing (+26% FY22, +9% in H1-23), Solvay hasSolvay 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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