From the Sector

Highlights

• Net sales in the third quarter of 2023 were down by -20.3% organically versus a record Q3 2022 as expected due to -15% lower volumes (€-512 million) in a weaker macro environment and -5% lower prices (€-188 million) in a context of lower raw material costs and energy prices. On a sequential basis, net sales were down -11% versus Q2. The volume reduction was broad based across regions and businesses.
• Structural cost savings for the first nine months of 2023 amounted to €63 million, bringing the total savings since 2019 to €530 million.
• Underlying EBITDA of €702 million in Q3 2023 was down by -18.5% organically compared to a record Q3 2022 driven by lower volumes, partly offset by €36 million in positive net pricing and €41 million in lower fixed costs. Nine months EBITDA at €2,331 million is only down -1% organically versus 2022, a clear indication that strong historic pricing and cost discipline momentum is being maintained.
• The underlying EBITDA margin of 25.6% in Q3 2023 was sustained relative to Q3 2022 despite lower volumes, while nine months EBITDA margin of 25.9% is +1.3pp higher, mainly as a result of positive net pricing and cost discipline.
• Underlying Net Profit was €340 million in Q3 2023 compared to €509 million in Q3 2022.
• Free Cash Flow of €346 million in Q3 2023 resulted in a nine-month 2023 total of €1,027 million and a FCF conversion ratio of 39.4%.
• ROCE was 15.2%, broadly in line with Q3 2022.
• Continued strengthening of the balance sheet with underlying net debt at €2.8 billion, which translated to a historic low leverage of 0.9x.
• As explained on page 2, an interim dividend of €1.62 gross per share has been validated by the Board of Directors, in line with historical interim dividend policy to be paid by Solvay SA on January 17, 2024.

2023 Outlook
Given the current volume momentum, Solvay reconfirm their full year guidance, at the lower end of the prior EBITDA guidance range.

• Revenues: 358.3 million euros (-7%)
• EBITDA before non-recurring items: 59.2 million euros (-17%)
• Net income: 24.9 million euros (-30%)
• Free cash flow before non-recurring items: 32.1 million euros
• 2023 outlook: revised revenues – confirmation of EBITDA before non-recurring items

Lectra’s Board of Directors, chaired by Daniel Harari, reviewed the consolidated financial statements for the third quarter and first nine months of 2023, which have not been reviewed by the Statutory Auditors.

Currency changes between 2022 and 2023 mechanically decreased revenues and EBITDA before non-recurring items by 6.4 million euros (-5%) and 2.8 million euros (-10%) respectively in Q3, and by 7.3 million euros (-2%) and 3.0 million euros (-5%) respectively in the first nine months of the year, at actual exchange rates compared to like-for-like figures.

Business Trends and Outlook
In its 2022 Financial Report, published February 8, 2023, Lectra presented its new roadmap for 2023-2025. The Group also specified that 2023 remained unpredictable given the degraded macroeconomic and geopolitical environment, which resulted in many uncertainties that could continue to weigh on its customers’ investment decisions.

At the beginning of the year, the Group set itself objectives of achieving, in 2023, revenues in the range of 522 to 576 million euros and EBITDA before non-recurring items in the range of 90 to 113 million euros. It subsequently reported on April 27 that it then anticipated revenues in the range of 485 to 525 million euros and EBITDA before non-recurring items in the range of 78 to 95 million euros.

In what continues to be a highly degraded environment in macroeconomic and geopolitical terms, orders and revenues from new systems in Q3 were lower than anticipated by the Group. Recurring revenues, on the other hand, which should account for over 65% of total revenues in 2023, continued to grow in Q3, and provide good visibility. In addition, the initial measures to reduce overhead costs have begun to bear fruit.

In light of these factors, full-year revenues are now anticipated in the range of 474 to 481 million euros, thus slightly lower than anticipated on April 27, and EBITDA before non-recurring items in the range of 78 to 82 million euros, in the lower part of the range indicated on April 27. These scenarios are based on September 30 exchange rates for Q4, including $1.06 to the euro.

Because the Group's customers operate in a highly competitive environment that demands they continue to improve performance, their investments will pick up as soon as the macroeconomic situation improves. Lectra's roadmap for 2023-2025, which was launched on January 1, 2023, will enable the Group to take full advantage of the upturn and accelerate its growth.

Solvay announced the future Board of Directors of SYENSQO, effective upon completion of the planned separation of Solvay into two companies – SOLVAY and SYENSQO – which is on track to be completed in December 2023.

SYENSQO’s Board will be composed of 10 members, including 6 independent members, 3 members representing the reference shareholder, Solvac, and the company CEO. They have deep expertise in specialty industries, international business operations, risk management, corporate governance, finance and clean technology.

The following individuals will serve on the SYENSQO Board of Directors:
Rosemary Thorne will serve as independent Director and Chair of the SYENSQO Board, as well as Chair of the Board’s Finance Committee. She is currently an Independent Director on the Solvay Board of Directors, appointed in 2014, and Chair of the Board’s Audit Committee. She is also an Independent Director on the Board of Merrill Lynch International (UK), a wholly-owned subsidiary of Bank of America, serving as Chair of the Audit Committee. Ms. Thorne has decades of financial leadership experience across a wide range of industries. She previously served as Chief Financial Officer at J. Sainsbury, the UK’s largest supermarket chain at the time; Bradford & Bingley; and Ladbrokes. Ms. Thorne previously sat as an Independent Director on the Boards of Royal Mail Group, Cadbury Schweppes, Santander UK, First Global Trust Bank and Smurfit Kappa Group.

Dr. Ilham Kadri will serve as Chief Executive Officer and member of the Board of Directors of SYENSQO. She is currently CEO and President of the Executive Committee at Solvay. Ms. Kadri has successfully led the turnaround of Solvay, delivering double-digit EBITDA growth and 18 consecutive quarters of positive free cash flow, deleveraging the balance sheet and promoting superior people engagement. She is an independent Board member at A.O. Smith and L’Oréal. She is active in non-profit organizations, as Chair of the World Business Council for Sustainable Development (WBCSD), member of the steering committee of the European Round Table of Industrialists (ERT) as well as a permanent member of the World Economic Forum’s International Business Council (WEF). Ms. Kadri has extensive leadership experience across a variety of industries in four continents and with leading industrial multinationals, including Shell, UCB, Huntsman, Dow, Sealed Air. Prior to Solvay, she was CEO and President of Diversey in the USA, led the company’s return to profitability and resulting spin off and divestiture to Bain Capital. She founded two non-Profit foundations: the Solvay Solidarity Fund in Belgium in 2020 which supported more than 7000 families affected by Covid-19 and natural disasters; and founded the ISSA Hygieia Network in 2015 in the USA, to help women in the cleaning industry. She received two Doctor Honoris Clausa from EWHA University in Korea and Université de Namur in Belgium.

Julian Waldron will serve as independent Director and Chair of the Audit Committee. He currently serves as Deputy Executive Chairman of privately-held Albea Group, a global beauty and personal care packaging company which operates 35 facilities in Europe, Asia and the Americas. Mr. Waldron has held senior leadership roles at several leading listed companies in the industrial, technology and services sectors and brings a wealth of expertise in finance and business operations. Prior to joining Albea in 2022, he was Chief Financial Officer of Suez for three years after serving as Chief Financial Officer and subsequently Chief Operating Officer of Technip. He started his career at UBS Warburg where he spent 14 years. Mr. Waldron also served as an independent Board member and Chairman of finance, risk and investments at Carbon Clean, a privately-owned carbon capture company dedicated to achieving net zero.

Heike Van de Kerkhof will serve as independent Director and Chair of the Nomination Committee. She currently sits on the Board of OCI N.V.. Ms. Van de Kerkhof brings more than 30 years of experience in the chemicals, oil & gas and materials industries, having served in numerous leadership roles around the globe. From 2020 to 2023, she was Chief Executive Officer of Archroma Management, a global specialty chemicals company. During her tenure, she successfully completed the transformational acquisition of Huntsman’s Textile Effects business. Prior to her role at Archroma, Ms. Van de Kerkhof served as Vice President of Lubricants, Western Hemisphere at BP, and held positions at Castrol, The Chemours Company, and Neste Corporation. She also held many leading roles within DuPont over 18 years.

Matti Lievonen will serve as independent Director and Chair of the Compensation Committee. He is currently an independent director on the Solvay Board, appointed in 2017. Mr. Lievonen is a proven executive in the energy, forestry, power and automation industries with an extensive track record of leading businesses through climate transition. For over ten years until 2018, he served as Chairman and Chief Executive Officer of Neste Corporation, a global leader in next-generation renewable fuels and chemicals. During his time at Neste, Mr. Lievonen successfully promoted the development of clean fuels as well as Finland’s bioeconomy strategy in advancing renewable transportation fuels. He has also been involved with organizations such as Fortum Board, SSAB, Nynäs AB, Ilmarinen, and the HE Finnish Fair Foundation. Until 2021, Mr. Lievonen was also Chairman of the Board of Directors at Fortum. He has been recognized for his admirable leadership and expertise, and in 2016 was awarded an Honorary Doctorate of Technology by the Aalto University Schools of Technology.

Dr. Françoise de Viron will serve as non-independent Director, Chair of the ESG Committee and Vice-Chair of the Board. She is currently a director of the Solvay Board, appointed in 2013. Ms. de Viron is a regarded academic leader and has extensive experience in innovation, R&D and qualitative research. She is a Professor Emeritus at the Faculty of Psychology and Education Sciences and Louvain School of Management at UCLouvain in Belgium where she has been an Academic Member of various groups at UCLouvain. Ms. de Viron previously served as the president of AISBL EUCEN – the European Universities Continuing Education Network. Prior to her university position, from 1985 to 2000, she was in charge of developing Artificial Intelligence applications at Tractebel S.A. (now Tractebel-Engie).

Roeland Baan will serve as independent Director. He currently serves as President and Chief Executive Officer of Topsoe, a privately-held leading provider of clean energy and petrochemical technologies. He is also Chairman of the Supervisory Board of SBM Offshore NV. Roeland Baan has extensive experience in supply chain management, M&A, business development and operations management. Prior to joining Topsoe in 2020, he was President and CEO of Outokumpu and has held several executive roles at global organizations such as Aleris International, ArcelorMittal and SHV NV. He spent over 16 years in various roles across the globe at Shell, living in South America, in Africa and in the United Kingdom.

Edouard Janssen will serve as non-independent Director. He is currently a Director on the Solvay Board, appointed in 2021. Earlier this year, he was appointed Chief Financial Officer of D’Ieteren Group, a European leader in automotive distribution services. Mr. Janssen is also a Board member of privately-held Financière de Tubize and Union Financière Boël, as well as Co-Founder and Chair of Trusted Family. Mr. Janssen is active in academics, as Vice-Chair of the International Advisory Board of the Solvay Brussels School of Economics and Management and on the advisory board of the INSEAD HGIBS. He brings expertise in finance, strategy, entrepreneurship, business management, planning and marketing. He has served as Solvay’s Vice President in strategy and M&A between 2019 and 2021, and prior to that, he was the US-based General Manager for North- and Latin America at Solvay’s Aroma Performance Global Business Unit.
 
Dr. Mary Meaney will serve as non-independent Director. She is currently a member of the Board of Directors and of the Audit Committee of Groupe Bruxelles Lambert SA. She also sits on the Board of Directors and the Remuneration Committee of Beamery, the privately-held talent management company. She is a member of the Board of Directors and of the Finance Committee of Imperial College, London.Dr. Meaney will bring expertise in Strategy, M&A, and change management, which she acquired over a 24-year career at McKinsey. She was a Senior Partner, served on the McKinsey Shareholders Council and led McKinsey’s global Organization practice.

Nadine Leslie will serve as independent Director and is based in the United States of America. She is currently a member of the Board of Directors of Provident Financial Services , as well as a Non-Executive Director of Seven Seas Water Corporation, a water and wastewater treatment multinational company. She also sits on the Board of Trustees of Hackensack Meridian Health Network and is active as strategic consultant for civil engineering firm T&M Associates. Over a 22-year career at Suez, Ms. Leslie held several leadership positions, the last one being Chief Executive Officer of Suez North America, until 2022. Previously she served as Executive Vice President Health & Safety.

Carbios announced the strengthening of its leadership team with the appointment of Bénédicte Garbil as Senior Vice President of Corporate Affairs and Sustainability. Bénédicte Garbil oversees three strategic areas: Public Affairs, Corporate Affairs, and Sustainability. In her Corporate Affairs role, she supervises Communication, Regulatory, Project Management, and Innovation Funding functions. In her Sustainability role, she oversees CSR, QHSE, and LCA functions. Bénédicte Garbil also joins the Group’s Executive Committee.

Bénédicte Garbil started as a public affairs advisor at the French Federation of Healthcare Industries before becoming Director of Public Affairs at a pharmaceutical laboratory. In 2013, she joined the public sector, first working at the General Directorate of Enterprises (DGE) as Head of the Health, Biotechnology, and Agri-food Industries Bureau, and then at the General Investment Commissioner’s Office (CGI) from 2014 to 2017 as Deputy Director of Health and Biotechnology. Her experience allowed her to gain expertise in public policies and funding innovative projects, contributing to the creation of public funding mechanisms supported by the French Program of Investments for the Future (PIA). After her public service, she led Edwards Lifesciences in France for 4 years, then founded a consulting company accompanying biotechnology and healthcare companies in their development, from valuation to market access, including industrial development in France. A graduate of Sciences Po Lille, she holds a master’s degree in health law and a university degree in pharmacoeconomics.

Dyneema^® announced the launch of a next-generation unidirectional (UD) material innovation based on its third-generation fiber at the polymer level: a development poised to enhance the safety and mobility of law enforcement officers and military forces through molecular engineering.

This evolution enables a higher-tenacity fiber – resulting in increased ballistic stopping power when used in the new UD material, Dyneema^® SB301, for protective armor applications. The seismic shift in performance enables body armor manufacturers to design soft armor vests 10–20% lighter than previous protective solutions.

Beyond strength, Dyneema^® SB301 has the advantage of being made from bio-based Dyneema^® fiber, which enables a carbon footprint up to 90% lower than generic high modulus polyethylene (HMPE) fiber.

Now available for use in law enforcement vests for the US market, Dyneema^® SB301 material is manufactured in Greenville, North Carolina, in compliance with the Berry Amendment, with additional markets to follow.

“In every situation, weight is now considered to be the top priority after ballistic stopping power,” said Marcelo van de Kamp, global business director for personal protection at Avient. “That’s because survivability is directly tied to weight savings when speed and agility determine outcomes. We’ve long been known as the ‘world’s strongest fiber™,’ but that won’t stop us from finding new opportunities to get stronger. This new product is the latest demonstration of our commitment to both innovation and protection.”

The new Orthopac RXVMC-20 automatic straightening system for forward control of knitwear with strong distortions can remove distortions in textile webs even faster and more precisely.

"With the new straightening concept, special attention was paid to the straightening mechanics and their interaction with the analysis electronics of the scanner system," explains Head of Sales Thomas Höpfl. Two individually controlled and driven straightening modules with a total of four bow and three skew rollers ensure that the correction of bow and skew distortions takes place in small steps. The control concept is also new. A scanner group at the infeed of the straightening machine detects distortions even before they reach the correction rollers. This way, the rollers are brought directly into position and the fabric is corrected from the very first centimetre. A scanner group at the outlet also detects possible residual distortion, which is corrected at the second straightening module. This enables an even more precise and faster response when it comes to reacting to rapidly changing distortions.

The Orthopac RXVMC therefore shows its full strength when straightening knitwear and distortion-sensitive fabrics. Knitted fabrics are special in terms of distortion dynamics. It is difficult for operators when changing the fabric rolls to join the relatively short fabric webs with weft and loop-straight seams. Before and after unavoidable insufficient seams, the distortion (e.g. right before to left before) changes abruptly. Conventionally, the distortion change is only detected by scanning at the output of the straightener.
 
The RXVMC concept enables a shortened reaction time to jumping distortion, (especially in the case of seams) due to the improved scanning concept with scanning at the outlet and inlet. This reduces knitted fabric outside the straightening tolerance up to 50 percent after each seam. Fewer fabric pieces have to be reprocessed. It guarantees higher quality goods and thus less waste.

Lectra, a leader in technology solutions for the fashion, automotive and furniture industries, announces the appointment of Frédéric Morel as President of the Asia-Pacific region and as a member of the Group's Executive Committee, where he replaces Edward Wang, who previously held the same position. This nomination comes as Lectra prepares to present its latest software and connected equipment offers at the CISMA (China International Sewing Machinery and Accessories) trade show in Shanghai, China, to enable Asian industry players to accelerate their transition to Industry 4.0.

Lectra's presence in the Asia-Pacific region began in 1985 with the opening of its first office in Japan. Today, Lectra employs 16% of its workforce in the region, which accounted for 25% of the Group's revenues in 2022. Thanks to its dynamism, economic fabric and position in world trade, China is a key market in this region, generating 9% of Lectra’s revenues in 2022.

Prior to joining Lectra, Frédéric Morel held the position of South East Asia & Pacific Executive Vice President at Vallourec. He had previously been appointed Sales Director and then Sales Vice President for Vallourec in the Middle East, after holding various sales and general management positions for the company in the Asia region. A graduate of the Institut d'Etudes Politiques d'Aix-en-Provence and the EMLYON business school, Frédéric Morel began his career in 2000 with Saint-Gobain.

Die AZL Aachen GmbH, bekannter Innovationspartner für Industriekooperationen auf dem Gebiet der Leichtbautechnologieforschung, startet eines neuen Projekts mit dem Titel "Trends und Designfaktoren für Wasserstoffdruckbehälter". Das Projekt wird Fragestellungen der Industrie in Bezug auf die Wasserstoffspeicherung adressieren.

AZL Aachen GmbH, a recognized innovator in lightweight technologies research and industry collaboration, announces the initiation of a new project titled "Trends and Design Factors for Hydrogen Pressure Vessels". The project aims to address industry needs surrounding hydrogen storage.

Hydrogen has gained significant attention as a key technological solution for decarbonization, with high pressure storage and transportation emerging as vital components. Its applications extend from stationary storage solutions to mobile pressure vessels employed in sectors such as transportation and energy systems.

The AZL team, renowned for its high reputation in providing market and technology insights as well as developing component and production concepts in the format of Joint Partner Projects seeks for companies along the whole composite value chain interested in further developing their application know how in this economically highly relevant field.

The project will provide an in depth exploration of market insights, regulatory standards, and intellectual property landscapes. Beyond this, there is a dedicated focus on staying updated with state of the art and advancements in design, materials, and man ufacturing techniques.

An integral component of the project involves the creation of reference designs by AZL´s engineering team. The reference designs will encompass a variety of pressure vessel configurations and will consider a diverse range of materials and production concep ts.

With the scheduled project start in October 2023, and a project timeline of approximately nine months, AZL encourages companies active across the composite value chain to participate. Companies interested in participating or seeking further information should reach out directly to the AZL expert team.

SETEX Schermuly textile computer GmbH, a global leader in manufacturing process management software and textile machinery controls, is pleased to announce the transfer of a majority stake to Elvaston Capital Management GmbH.

Private equity partner Elvaston has established the overarching Textile Solutions Holding GmbH. This company will manage a portfolio of technology companies that ensure seamless integration along the textile process chain and introduce unique market functionalities.

The current company owners of SETEX, Christoph and Oliver Schermuly, will continue their roles as managing directors.

SETEX is convinced that this step will further expand SETEX's competitiveness and growth potential.

DyStar, a leading specialty chemical company announced the release of its thirteenth annual Integrated Sustainability Report. The report is prepared in accordance with the updated GRI Standards 2021: Core Options. Despite the challenging business landscape and economic situations, DyStar remains committed to delivering tangible values that the Group has strategically created through the six major capitals, using the Integrated Reporting <IR> framework.

DyStar’s business strategies have proven their effectiveness and delivered significant progress toward its 2025 targets. The company has successfully reduced its environmental footprint in Greenhouse Gas Emission intensity and Wastewater production intensity by more than 30%, compared to the baseline year 2011.

More specifically, DyStar’s Scope 1 and Scope 2 Greenhouse Gas (GHG) Emissions intensity was 45% lower (tCO₂e per ton production) than the baseline year 2011, with a totaled GHG emission of 56.91 thousand tCO₂e. This is also 9% lower when compared to FY2021.

Similarly, for Wastewater production intensity, DyStar achieved a 52% reduction compared to baseline year 2011, and a 24% reduction from FY2021.

Some other key highlights and value-adds include (when compared to FY2021):

• Financial Capital: The results of production efficiency and streamlining manufacturing indirectly contributed to the reduction of 5.8% in operating cost
• Manufactured Capital: Apart from ensuring quality suppliers through DyStar’s internal audit, DyStar’s effort on environmental performance and climate impacts with the Institute of Public & Environmental Affairs (IPE) was recognized and ranked second by industry on IPE’s Green Supply Chain Corporate Information Transparency Index (CITI)
• Intellectual Capital: The innovative Cadira® modules continue to support the supply chain with a lower carbon footprint
• Human Capital: The full launch of DyStar University (DSU), a proprietary LMS, supports the learning and development of employees globally
• Social Capital: DyStar’s culturally diverse workforce organized a variety of activities and events in support of its global community and made a total contribution of USD 128,946 to various corporate social responsibility (“CSR”) program.

Despite the harsh economic headwinds, these figures further demonstrated the effectiveness of DyStar’s initiatives that were installed throughout the reporting year.

DyStar maintains a cautious yet optimistic outlook on its global performance.