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Solvay (SLVYY)
OTHER OTC:SLVYY
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Solvay
(OTC:SLVYY)
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Rating:50Neutral
Price Target:
$3.50
▲(10.76% Upside)
Action:ReiteratedDate:02/26/26
The score is held back primarily by weakening profitability, contracting revenue, and higher leverage, partially offset by consistently positive and improving free cash flow. Technicals are moderately constructive, while valuation is a key risk due to the very high P/E despite an attractive dividend yield. Earnings guidance points to another year of EBITDA pressure, tempering the outlook.
Positive Factors
Free Cash Flow Strength
Consistently positive and materially improved free cash flow (EUR 350m in 2025) provides durable funding for essential capex, dividends and transformation costs. Strong cash conversion cushions earnings volatility and supports deleveraging and strategic investments over the medium term.
Structural Cost Savings
Delivering substantial, multi-year structural savings (EUR 101m in 2025; EUR 211m cumulative) enhances margin resilience and competitiveness. These persistent efficiency gains reduce break-even, improve cash flow durability and support reinvestment or balance-sheet repair over 2–3 years.
Targeted Strategic Investments
Selective capacity and product investments in higher-value, specialty segments (electronic-grade H2O2, BioSource silica, rare-earth capabilities) reinforce structural positioning in growth end-markets. This focus on advanced materials supports sustainable revenue mix improvement and long-term differentiation.
Negative Factors
Contracting Revenue
Top-line contraction and falling volumes signal weakening demand and reduced pricing power across key businesses. Persistent revenue decline erodes operating leverage, limits margin expansion from cost savings, and makes sustaining investment, dividends and debt reduction harder over multiple quarters.
Rising Leverage
A materially higher leverage profile and diminished equity cushion reduce financial flexibility if earnings remain weak. Lower ROE and thinner equity increase refinancing and covenant risks, slowing the pace at which cash generation can be deployed to repair the balance sheet without cutting investment or dividends.
Commodity Segment Pressure
Structural oversupply and trade distortions in Soda Ash and ongoing weakness in Coatis create prolonged margin pressure in basic chemicals. Exposure to these low-margin, cyclical markets limits overall margin sustainability and can offset specialty gains, posing multi-quarter earnings risk.
Solvay (SLVYY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.17B
Dividend Yield9.49%
Average Volume (3M)2.56K
Price to Earnings (P/E)―
Beta (1Y)0.35
Revenue Growth-4.18%
EPS Growth-90.40%
CountryUS
Employees9,000
SectorBasic Materials
Sector Strength58
IndustryChemicals
Share Statistics
EPS (TTM)0.01
Shares Outstanding1,058,760,000
10 Day Avg. Volume6,676
30 Day Avg. Volume2,556
Financial Highlights & Ratios
PEG Ratio-1.11
Price to Book (P/B)2.73
Price to Sales (P/S)0.61
P/FCF Ratio7.17
Enterprise Value/Market Cap1.38
Enterprise Value/Revenue0.93
Enterprise Value/Gross Profit4.38
Enterprise Value/Ebitda5.83
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.31
Revenue Forecast (FY)$5.08B
Solvay Business Overview & Revenue Model
Company DescriptionSolvay 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.
How the Company Makes MoneySolvay generates revenue through the sale of its advanced materials and specialty chemicals, which are utilized across various sectors. The company has key revenue streams from its Advanced Materials segment, which includes high-performance plastics and composites for the automotive and aerospace industries, and its Advanced Formulations segment, which provides specialty chemicals and formulations for industries such as consumer goods and pharmaceuticals. Additionally, Solvay benefits from long-term contracts with major clients, contributing to stable revenue streams. Strategic partnerships and collaborations with technology companies enhance its product offerings and create new market opportunities, further driving its earnings.
Solvay Earnings Call Summary
Earnings Call Date:Feb 24, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 07, 2026
Earnings Call Sentiment Neutral
The call presented a mixed but balanced picture: the company demonstrated strong cash generation (EUR 350m FCF), meaningful structural savings (EUR 101m in 2025, cumulative EUR 211m), solid progress on decarbonization (Scope 1/2 emissions down 29% vs 2021) and continued selective strategic investments and social achievements. However, these positives were offset by notable near-term commercial and earnings headwinds — sales down 6%, volumes down 4%, underlying EBITDA down 13% to EUR 881m, high transformation and provision cash outs (approx. EUR 260m), and challenging markets for Soda Ash and Coatis driven by China overcapacity and tariffs. Management has set a more conservative 2026 EBITDA guidance (EUR 770–850m) and emphasized temporary stranded costs and ERP investments that will weigh on near-term performance, while retaining focus on cost control, cash and long-term competitiveness.Q4-2025 Updates
Positive Updates
Strong Free Cash Flow Generation
Generated EUR 350 million of free cash flow in 2025 despite a weaker EBITDA, reflecting disciplined cash allocation, working capital optimization and limited CapEx (EUR 292 million, below the EUR 300 million guidance). Guidance for 2026 expects free cash flow to exceed EUR 200 million after covering EUR 90 million of transformation expenses.
Healthy Balance Sheet and Leverage
Underlying net debt of EUR 1.6 billion at year-end 2025, roughly stable versus 2024, with a leverage ratio of 1.8x, supporting the company's financial policy, dividend and investment-grade target.
Resilient Margins and EBITDA within Guidance
Underlying EBITDA of EUR 881 million in 2025 (down 13% year-on-year) with an underlying EBITDA margin close to 21%, noted as within the company's revised guidance range.
Large Structural Cost Savings Delivered
Achieved EUR 101 million of gross structural savings in 2025, bringing cumulative savings since start of the program to EUR 211 million and exceeding the 2025 target. Company expects cumulative savings around EUR 300 million by end-2026.
Significant Decarbonization Progress
Scope 1 & 2 CO2 emissions decreased by 29% versus 2021, close to the 2030 target of -30%; largest contributors were coal phaseout projects completed in 2024, with further energy transition projects (Dombasle cogeneration, Torrelavega project) progressing.
Selective Growth and Capacity Investments
Continued strategic investments: doubled electronic-grade hydrogen peroxide capacity in China, inaugurated BioSource silica production line in Livorno (Jan 2026), inaugurated rare earth workshop in La Rochelle, and completed new Soda Ash capacity in Green River — while keeping essential CapEx prioritized (~EUR 240 million).
Operational and Social Achievements
Launched major safety culture transformation program; severity of reportable injuries decreased; achieved 100% of own workforce receiving a living wage one year ahead of plan; 28.8% women in mid and senior management; biodiversity pilot launched with IUCN and 16% of lands under conservation/restoration at end-2025.
Proactive Industrial Footprint Optimization
Decisive actions to optimize footprint: closures (Salindres, Warrington, Povoa) and announced capacity reduction at Torrelavega (600,000 to 420,000 tonnes from Q3 2026) to align production with competitive, lower-carbon markets and preserve long-term competitiveness.
Dividend and Capital Allocation Discipline
Board proposed a total gross dividend of EUR 2.43 per share (including interim), and reiterated priority ordering for capital allocation: essential CapEx, stable/growing dividend, then variable options for future organic/inorganic investments.
Negative Updates
Revenue and Volume Declines
Underlying net sales declined to EUR 4.3 billion in 2025, down 6% year-on-year; volumes fell 4% year-on-year, mainly driven by Soda Ash and Coatis business units.
EBITDA Contraction and Segment Weakness
Underlying EBITDA fell 13% to EUR 881 million; Basic Chemicals (Soda Ash & derivatives) saw quarter sales down 13% and Q4 segment EBITDA down ~20%; Performance Chemicals segment EBITDA down 18% with EBITDA margin reduced to 14% in Q4.
Pricing Pressure and ForEx Headwinds
Net pricing decreased year-on-year, primarily due to weakness in seaborne Soda Ash and Coatis; foreign exchange was a negative for the year (strengthening euro vs USD and BRL) and guidance explicitly includes a EUR 20 million negative FX impact for 2026.
High One-Off Cash Outflows & Provisions
Total provision cash out of approximately EUR 260 million in 2025, including ~EUR 130 million normalized cash outs (pension/environment/restructuring), EUR 60 million for Dombasle Energy project and EUR 70 million for additional restructuring and transformation costs.
Transformation and Temporary Stranded Costs
Temporary stranded costs related to the TSA exit negatively impacted fixed cost by EUR 23 million in 2025 and will continue to weigh on 2026 cash generation; ERP and other split-related OpEx will impact 2026–2027.
Market Headwinds in Soda Ash and Coatis
Persistent overcapacity in China is keeping seaborne Soda Ash margins at trough levels and pressuring exports (including U.S. exports). Coatis volumes and prices remain weak across end markets, adversely affected by U.S. tariffs and market disruptions.
Lower EBITDA Guidance for 2026
2026 underlying EBITDA guidance of EUR 770 million to EUR 850 million implies a step down from 2025 levels and factors in EUR 40 million of transformation expenses and EUR 20 million FX headwind; free cash flow guidance (>EUR 200 million) is lower than 2025 actuals.
Corporate Segment Drag
Corporate segment reported a full-year 2025 EBITDA of minus EUR 40 million, which included a positive EUR 40 million from CO2 emission rights optimization but was otherwise depressed by stranded costs and split-related charges.
Uncertainty on EU ETS / CBAM Policy
Energy transition success depends partly on policy alignment—management flagged uncertainty around post-2030 ETS/CBAM rules, requested extended free allowances to fund historical site transformation, and emphasized potential competitive risks if policy support is insufficient.
Company Guidance
Solvay guided underlying EBITDA of €770–€850m for 2026 (vs €881m in 2025, down 13%, EBITDA margin ~21% in 2025), explicitly factoring in a c.€20m negative FX hit and c.€40m of transformation-related EBITDA headwinds while assuming a CO2 (EUA) sale contribution similar to 2025; free cash flow to Solvay shareholders (continuing operations) is expected to exceed €200m after covering €90m of transformation cash costs, with Group CapEx again limited to below €300m, cumulative structural savings targeted at ~€300m by end‑2026 (gross €101m achieved in 2025; €211m cumulative to date), net debt about €1.6bn (leverage ~1.8x), and the Board proposing a total dividend of €2.43 per share.Solvay Financial Statement Overview
Summary
Overall fundamentals are pressured: revenue has been contracting and 2025 net profitability is very low, while leverage has increased (debt-to-equity ~2.13). Offsetting this, operating cash flow stayed positive and free cash flow improved materially in 2025, providing some resilience despite weaker earnings quality.Income Statement
Revenue has been shrinking in the most recent years (down ~7% in 2025 and slightly down in 2024), signaling a weaker top-line environment. Profitability is mixed: gross and EBITDA margins remain healthy for the sector (2025 gross margin ~21% and EBITDA margin ~19%), but net profitability has deteriorated sharply (2025 net margin ~0.6% vs ~4.3% in 2024). 2023 shows unusually high net income and net margin versus other years, suggesting earnings volatility and/or non-recurring impacts; overall, the income statement profile looks less consistent than the operating margin line implies.44
Neutral
Balance Sheet
Leverage has risen meaningfully, with debt-to-equity increasing to ~2.13 in 2025 (up from ~1.60 in 2024), reflecting a thinner equity cushion relative to debt. Equity has stepped down versus prior years, and returns on equity have compressed to low-single digits in 2025 (~2.8%) after a much stronger 2024 (~16.7%), pointing to weaker profitability on the current capital base. Overall asset size remains solid, but the higher leverage profile increases financial risk and reduces flexibility if earnings remain pressured.36
Negative
Cash Flow
Cash generation is a relative bright spot: operating cash flow remained positive in 2025 (~572M) and free cash flow increased materially in 2025 (~388M, strong growth vs 2024). Free cash flow has consistently been positive across the period shown, supporting resilience and funding capacity. The main weakness is that cash flow has not scaled proportionally with debt levels (cash flow coverage of debt remains low in 2024–2025 at ~0.33 and ~0.31), which limits deleveraging speed if management prioritizes balance sheet repair.60
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 4.56B | 5.13B | 6.02B | 16.07B | 11.44B |
| Gross Profit | 963.41M | 1.15B | 1.38B | 4.03B | 2.93B |
| EBITDA | 859.68M | 805.00M | 1.31B | 1.36B | 1.95B |
| Net Income | 28.82M | 223.00M | 2.09B | 1.91B | 948.00M |
Balance Sheet | |||||
| Total Assets | 6.15B | 6.69B | 7.02B | 20.66B | 20.05B |
| Cash, Cash Equivalents and Short-Term Investments | 535.77M | 555.00M | 711.00M | 1.69B | 2.27B |
| Total Debt | 2.17B | 2.14B | 2.19B | 2.96B | 3.35B |
| Total Liabilities | 5.07B | 5.29B | 5.72B | 10.00B | 11.20B |
| Stockholders Equity | 1.02B | 1.34B | 1.26B | 10.60B | 8.74B |
Cash Flow | |||||
| Free Cash Flow | 388.06M | 330.00M | 847.00M | 1.10B | 863.00M |
| Operating Cash Flow | 571.52M | 615.00M | 1.91B | 2.01B | 1.50B |
| Investing Cash Flow | -193.07M | -281.00M | -1.79B | -831.00M | -470.00M |
| Financing Cash Flow | -365.00M | -364.00M | -455.00M | -1.19B | -1.10B |
Solvay Technical Analysis
Negative
3.16
Price Trends
3.13
Negative
3.12
Negative
3.18
Negative
Market Momentum
<0.01
Positive
42.37
Neutral
6.22
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SLVYY, the sentiment is Negative. The current price of 3.16 is below the 20-day moving average (MA) of 3.22, above the 50-day MA of 3.13, and below the 200-day MA of 3.18, indicating a bearish trend. The MACD of <0.01 indicates Positive momentum. The RSI at 42.37 is Neutral, neither overbought nor oversold. The STOCH value of 6.22 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SLVYY.
Solvay Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
58 Neutral | $5.60B | -3.97 | -24.70% | 0.29% | -7.34% | -382.79% | |
57 Neutral | $2.15B | ― | -9.63% | 8.44% | -3.46% | -191.77% | |
52 Neutral | $22.06B | -6.34 | -15.79% | 9.17% | -5.25% | -208.14% | |
51 Neutral | $1.10B | -1.41 | -29.57% | 8.27% | -7.81% | -334.15% | |
50 Neutral | $3.17B | -7.39 | 10.62% | 9.49% | -4.18% | -90.40% | |
47 Neutral | $1.56B | -49.30 | ― | ― | -10.68% | 36.31% |
* Basic Materials Sector Average
SLVYY
Solvay
3.06
-0.24
-7.26%
CE
Celanese
51.15
-3.05
-5.62%
BAK
Braskem SA
4.24
0.58
15.85%
HUN
Huntsman
12.89
-3.43
-20.99%
TROX
TRONOX
7.37
0.57
8.40%
DOW
Dow Inc
32.34
-3.04
-8.61%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.