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Underlying Net Sales: Broadly stable year-on-year at slightly more than EUR1 billion; down 3% year-on-year, sequentially flat versus Q2.
Underlying EBITDA: EUR173 million in Q3, down 27% year-on-year; full-year 2026 guidance of EUR720 millionEUR740 million.
EBITDA Margin: Nearly 17% in Q3.
Middle East Conflict Impact: Minus EUR25 million total in Q3 (minus EUR15 million from Jubail Peroxides shutdown; remainder from higher energy and logistic costs).
Free Cash Flow: EUR54 million in Q3; EUR70 million for the first nine months; full-year 2026 guidance of EUR120 millionEUR150 million (after ~EUR90 million transformation costs).
CapEx: EUR203 million in the first nine months; full-year 2026 guidance below EUR300 million (including EUR15 millionEUR20 million for La Rochelle rare earths).
Working Capital: EUR105 million cash outflow at end of September; expected to reduce by year-end on usual seasonality.
Provisions Cash Outflow: EUR152 million, above normalized level, reflecting restructuring and transformation projects.
Tax and Other Items: Net cash outflow of EUR7 million, including a EUR28 million one-off insurance gain.
Financing Cash Outflow: EUR43 million, mainly net interest payments and dividends to non-controlling interests.
Net Debt: Underlying net debt of EUR1.8 billion at end of September versus EUR1.6 billion at end of last year; increase mainly reflects EUR254 million dividend payment.
Leverage Ratio: 2.4 at end of Q3.
Basic Chemicals Soda Ash and Derivatives Sales: Down 8% organically; domestic demand slightly lower, domestic pricing broadly stable, seaborne pricing below prior year.
Basic Chemicals Bicarbonate: Performance broadly stable year-on-year; now more than 14% of group sales.
Basic Chemicals Peroxides Sales: Down 10%, mainly due to continued suspension of HPPO operation in Jubail; partly offset by strong growth in electronic-grade peroxides.
Basic Chemicals EBITDA: Down 20%; EBITDA margin just above 20%.
Performance Chemicals Silica Sales: Increased year-on-year with stable volumes, benefiting from formula-based adjustments.
Performance Chemicals Coatis Sales: Increased significantly year-on-year on higher pricing across phenol and solvents; volumes broadly flat.
Performance Chemicals Special Chem Sales: Stable; lower autocatalysis volumes offset by stronger fluorine North America and electronic rare earth demand; pricing higher year-on-year.
Performance Chemicals EBITDA: Up 17%, with EBITDA margin of 17.1%.
Performance Chemicals (9M Underlying EBITDA): Stable year-on-year excluding non-recurring elements.
Corporate: Year-on-year variation mainly reflects circa EUR40 million gain from CO2 emission rights sale recorded in Q3 2025.
Release Date: November 04, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Solvay SA’s Performance Chemicals segment delivered a 17% year-on-year EBITDA increase, driven by improved pricing and a strong contribution from Coatis.
The company’s bicarbonate business remains resilient, now representing more than 14% of group sales, with stable performance year-on-year.
Solvay SA continues to see double-digit growth in electronic-grade peroxides and is investing in additional capacity, such as the recent joint venture in Taiwan.
The rare earths business is progressing with a long-term supply agreement with Viridis and discussions with OneIM for a potential joint venture, positioning Solvay SA for growth in the electrification market.
Operational savings and the phase-out of stranded costs contributed EUR31 million positively, demonstrating the continued delivery of structural cost-saving programs.
Negative Points
Solvay SA’s Q3 EBITDA declined 27% year-on-year to EUR173 million, primarily due to the temporary shutdown of the Peroxides plant in Jubail, Saudi Arabia, which had a negative impact of EUR15 million.
The ongoing conflict in the Middle East has driven higher energy, raw material, and logistics costs, with a total negative impact of EUR25 million in the quarter, and these cost increases are not always fully or immediately offset by indexation mechanisms.
Soda ash pricing remains near historical lows, and demand is subdued across most regions, with the recovery pace uncertain despite capacity closures in Europe, the US, and China.
Free cash flow guidance for the full year is EUR120-150 million, but the company needs to generate more than twice the Q3 free cash flow (excluding one-offs) in Q4 to reach the lower end, relying on working capital reversal and normal seasonality.
The dividend payout of EUR260 million exceeds the guided free cash flow of EUR120-150 million, raising questions about dividend sustainability, although the company maintains its commitment to the dividend and investment-grade rating.
Q & A Highlights
Q: To reach the low end of your free cash flow guidance, you would need to generate more than twice what you did this quarter, excluding the EUR30 million one-off. Without a clear recovery in end markets, what makes you confident? A: CFO Alexandre Blum explained that the full-year free cash flow guidance of EUR120 million to EUR150 million assumes no compensation for the Jubail HPPO unit. The big driver for Q4 is the reversal of working capital, which typically occurs between September (peak activity) and December (lowest level of the year). He noted that last year, the company generated EUR200 million in cash flow in Q4, demonstrating normal seasonality.
Q: Some market reports point to a 25% increase in soda ash prices in Q4 in Europe due to energy surcharges. Can you confirm this magnitude, and how are customers meeting these surcharges? A: CEO Philippe Kehren confirmed that contractual energy pass-through mechanisms in Europe are triggered above certain thresholds and cover most additional costs, but with a time lag of one to three months. While he could not confirm the exact 25% figure, he acknowledged a price increase due to higher energy costs. He emphasized that these costs have an inflationary impact and affect demand, which the company is monitoring carefully.
Q: On soda ash indexation, are you saying you are still not in a position to fully recover cost inflation in Q4? How should we think about 2027? A: CEO Philippe Kehren stated that while pass-through mechanisms in European and US markets are very good, they are not 100% perfect and have time lags, meaning part of Q4 price increases may only be recovered in Q1 2027. He noted the Middle East crisis impacts the company by around EUR25 million per quarter, with about EUR10 million from cost increases, including logistics. He added it is difficult to predict 2027, but customers are being extremely careful due to the inflationary environment, which will impact demand.
Q: Regarding the rare earths JV with OneIM, what changed in your strategy from investing yourself to forming a JV, and how should we think about the value uplift for Solvay? A: CEO Philippe Kehren explained that discussions are progressing but no agreement has been reached. The intent is to contribute rare earth activities into a new JV while retaining a significant minority ownership interest. He stated that partnering is necessary to fully develop the business and become a global player in rare earth separation. A key step was the announcement of the Viridis contract to secure sourcing, while the company also works with customers to secure offtake for future investments.
Q: On Coatis, is a large part of the 22% EBITDA increase in Performance Chemicals due to Coatis, and how sustainable is the current tightness in phenol and solvents? A: CFO Alexandre Blum confirmed that while all Performance Chemicals businesses broadly improved in Q3, Coatis had the highest recovery, coming from a trough in 2025 that was well below mid-cycle. Drivers included lower tariffs, good dynamics in South America, and higher freight costs for competitors due to the Middle East situation. CEO Philippe Kehren added that the business is recovering and will probably stabilize around mid-cycle in the coming quarters, though it is difficult to anticipate.
Q: Your free cash flow guidance of EUR120 million to EUR150 million cannot cover the EUR260 million dividend payout. Don’t you need to cut your dividend? A: CEO Philippe Kehren reiterated the capital allocation framework: essential CapEx of around EUR250 million, followed by dividend policy and investment-grade rating with equal importance, then growth investment based on affordability. He noted the Board regularly reviews the policy and that transformation costs of EUR90 million in 2026 will decrease to EUR50 million next year and gradually go to zero.
Q: Are you able to be more granular on how soda ash capacity is developing, particularly regarding Chinese capacity additions versus restructuring? A: CEO Philippe Kehren noted that restructuring is taking place in Europe (Torrelavega capacity reduction), the US (SVM closure in California), and now China has started to restructure significantly, offsetting new capacities. He mentioned there are still potential significant closures in China to monitor. While demand is not great, declining inventories are a positive signal, though it may take time to restore supply-demand balance.
Q: Can you provide an update on the multiyear transformation program and how transformation costs will trend into 2027 and 2028? A: CFO Alexandre Blum stated that transformation expenses will peak in 2026 at around EUR90 million for the full year, with a little less than half impacting EBITDA. He estimated next year should be around EUR50 million with limited EBITDA impact, and from 2028 onward, costs will be almost completely gone after rolling out the ERP and completing restructuring.
Q: How can dividend and investment-grade have equal importance, and have you considered a temporary dividend cut given some elements are temporary? A: CEO Philippe Kehren repeated that dividend policy and investment-grade are equally important, and the company allocates capital to meet both requirements after paying essential CapEx. He noted the company has been able to reduce the baseline for essential CapEx in current circumstances. The Board will constantly review the capital allocation policy to ensure it aligns with strategic priorities and balance sheet quality.
Q: Your leverage is already at 2.4, which is high for a cyclical business. How do you think about your leverage target and deleveraging ambition, and how would you use potential rare earths deal proceeds? A: CFO Alexandre Blum said leverage at 2.4 is the peak due to dividend payments earlier in the year and year-end cash flow generation. He stated there is no specific leverage target; the North Star is maintaining the S&P investment-grade rating, for which there is some headroom. He declined to comment on rare earths deal proceeds until a deal is concluded, at which point the company will be more explicit.
Q: On Special Chem, the trend looks better quarter-on-quarter. What are the drivers behind this? A: CFO Alexandre Blum explained that the automotive part is broadly stable sequentially, but two factors are helping the trend: good performance in certain electronic applications in fluorine and rare earths, and high demand for fluorine products used in US refineries given the current environment.
Q: What is your view on recent EU defense measures
For the complete transcript of the earnings call, please refer to the full earnings call transcript.