Solvay - Trading remains challenging in soda-ash
• We have lowered our adjusted EBITDA estimates by 5-10%, mainly to reflect ongoing pressure on volumes/pricing, in particular in soda-ash. • Nevertheless, our FCF estimates are less affected, as we expect Solvay to adjust capex. The attractive dividend of EUR 2.43 p/s is safe (10% yield). • We reiterate our Buy, but lower our TP from EUR 32 to EUR 31, based on our peer-group based target multiple of 5.7x and backed by DCF.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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