From the Sector

• Solvay’s FY 2023 financial statements reflect the Partial Demerger completed on December 9, 2023, with the Specialty businesses transferred to Syensqo classified as discontinued operations for 2023.
• New Solvay leadership team committed to drive the transformation of the company.
• Net sales for the full year 2023 at €4,880 million were down -12.6% organically versus 2022, driven primarily by volume declines. In Q4, net sales decreased organically by -18.9% from both lower volumes and prices.
• Underlying EBITDA of €1,246 million for the full year 2023 was stable (+0.2%) on an organic basis compared to a record 2022, with positive Net Pricing and lower fixed costs offsetting the drop in volumes. EBITDA in the fourth quarter was down -24.5% organically vs Q4 2022, fully driven by lower volumes, with variable costs reduction offsetting price erosion, while fixed costs decreased slightly.
• Underlying net profit from continuing operations was €588 million in 2023 compared to €740 million in 2022.
• Free Cash Flow of €561 million in 2023 (+17.3% vs. €479 million in 2022) resulting in a record FCF conversion ratio of 45.4%, thanks to the strong EBITDA performance and to the positive impact from working capital variation.
• ROCE was 20.4% in 2023, -2.5pp compared to 2022 as a result of lower profit.
• Solid balance sheet at the end of December 2023, in line with the target capital structure announced in November 2023, with an underlying net debt of €1.5 billion, which translates into a leverage ratio of 1.2x.
• Total proposed gross dividend of €2.43 per share, subject to shareholders’ approval during the next Ordinary General Meeting of May 28, 2024.
• Solvay continues to reduce its GHG emissions (-19% vs 2021, scope 1 and 2).
• 2024 Outlook: Organic growth of the underlying EBITDA of -10% to -20% compared to restated 2023; Free cash flow of minimum €260 million

2024 outlook
Across its product portfolio, Solvay expects current demand levels to continue over the next few months and, as such, expects H1 2024 volumes to be broadly in line with H2 2023. At this point, there is little visibility on the second half of the year, however there are signs that the trend in the second half could improve. Solvay expects Soda Ash prices over FY 2024 to be lower than FY 2023, consistent with the current market environment, which will affect the business margin in 2024. Pricing trends across Solvay’s other businesses are forecasted to be more resilient year on year.

Lower energy and raw materials prices should offset some of the negative pressure on the topline. More importantly, Solvay has started to implement cost savings initiatives that will start to deliver results in 2024.

For full year 2024, Solvay expects an organic growth of the underlying EBITDA by -10% to -20% versus a high comparison base in 2023, especially in H1. This translates into a range of €925 million to €1,040 million at a 1.10 EUR/USD exchange rate.

The organic growth of the underlying EBITDA is calculated from a 2023 restated figure of €1,154 million (vs a reported figure of €1,246 million).

Free cash flow to Solvay shareholders from continuing operations is expected to be greater than €260 million, in line with the cash usage prioritization presented during the Capital Market Day in November 2023. It is supported by Solvay’s ability to manage its capex and working capital to ensure the financing of its businesses and the payment of dividends while keeping the strength of its balance sheet intact.

Solvay remains committed to implement its strategic roadmap and reconfirms its 2028 targets as communicated at the Capital Markets Day of November 2023.

• Revenues: 477.6 million euros (-6%)
• EBITDA before non-recurring items: 79.0 million euros (-15%)
• Net income: 32.6 million euros (-26%)
• Free cash flow before non-recurring items: 45.3 million euros
• Dividend: €0.36 per share

Lectra’s Board of Directors, chaired by Daniel Harari, reviewed the consolidated financial statements for the fiscal year 2023. Audit procedures have been performed by the Statutory Auditors.

Currency changes between 2022 and 2023 mechanically decreased revenues and EBITDA before non-recurring items by 3.9 million euros (-3%) and 1.7 million euros (-8%) respectively in Q4, and by 11.2 million euros (-2%) and 4.8 million euros (-6%) respectively in the year, at actual exchange rates compared to like-for-like figures.

OUTLOOK
While the 2023 full-year results were affected by the adverse environment, they also attest to the substantial improvement in the fundamentals of the Group's business model, which will have a positive impact on 2024 results. Persistent macroeconomic and geopolitical uncertainties could nevertheless continue to weigh on investment decisions by the Group's customers.

While the most recent indicators seem to suggest that the situation is unlikely to deteriorate further, the timing and magnitude of a rebound in new system orders remain uncertain.

Outlook for 2024
To facilitate analysis, the accounts of Lectra excluding the Launchmetrics acquisition ("Lectra 2023 Scope") will be analysed separately from the Launchmetrics accounts in 2024.

The Group has based its 2024 objectives on the exchange rates in effect on December 29, 2023, in particular $1.10/€1. When converting 2023 results using the exchange rates retained for 2024, 2023 revenues are mechanically reduced by 4.7 million euros (to 472.9 million euros) and 2023 EBITDA before non-recurring items is reduced by 2.2 million euros (to 76.8 million euros). Thus, for the Lectra 2023 Scope, the comparisons between 2024 and 2023 printed below are based on constant exchange rates.

At this early stage of 2024, continuing low visibility regarding orders and revenues from new systems makes it impossible to predict the actual timing and scale of the future rebound in this area. On the other hand, visibility is high for recurring revenues, which accounted for 68% of total revenues in 2023 and will continue to grow in 2024.

In light of the above, Lectra has set as its objective for 2024, for the Lectra 2023 Scope, to achieve revenues in the range of 480 to 530 million euros (+2% to +12%) and EBITDA before non-recurring items in the range of 85 to 107 million euros (+10% to +40%).

The low end of the revenues range is based on the absence of a rebound in new systems orders, which would remain stable in 2024 relative to 2023, with a 6% decline in revenues from perpetual software licenses, equipment and accompanying software and non-recurring services, as the order backlog was lower on December 31, 2023 than a year before.

The high end of the revenues range reflects a gradual rebound in new systems orders, which at year-end 2024 would be back to year-end 2022 level.
 
In addition, Launchmetrics revenues (for the consolidation period from January 23 to December 31) are projected to be in the range of 42 to 46 million euros, with an EBITDA margin before non-recurring items of more than 15% (assuming an exchange rate of $1.10/€1).

In a judgment in December 2023, the Supreme People’s Court of the People’s Republic of China ruled in favor of Rieter in a legal dispute. The case concerned the infringement of a Rieter patent by a competitor’s draw frame. Rieter protects its innovations with patents and registered designs and consistently takes action against infringements of its intellectual property.

Rieter draw frames are known for their stable operation with high sliver quality and productivity. Scanning precision and autoleveling dynamics ensure outstanding sliver evenness and thus the production of high-quality yarns. Draw frames have also been the subject of a patent litigation by Rieter in China at various levels of jurisdiction. Rieter had sued a competitor for unauthorized use of its patented draw frame technology.

In the summer of 2022, the Shanghai Intellectual Property Court confirmed the patent infringement identified by Rieter and prohibited the accused competitor from continuing to use Rieter’s patented technology. The infringing party was also ordered to pay damages to Rieter.

The culpable competitor then appealed the decision of the Shanghai court to the Supreme People’s Court of the People’s Republic of China.

In December 2023, the Supreme Court of China in Beijing upheld the Shanghai decision, confirming that the patent had been infringed. As a result, Rieter’s competitor is prohibited from selling the infringing machine types and is required to pay the damages determined by the court.

This Supreme Court decision represents a major success for Rieter in defending its proprietary technologies in China. It is further proof that foreign companies can effectively defend their intellectual property in China.

As the technology leader in spinning machinery manufacturing, Rieter invests around 5% of its turnover annually in research and development. Rieter protects its innovative products with patents and registered designs and takes consistent action against infringements of industrial property rights.

B&B Italia unveiled a special edition Camaleonda, the iconic sofa system by Mario Bellini, adorned in a brand-new fabric designed by Stella McCartney – platforming her S-Wave monogram. Marking the second chapter of the partnership between the British conscious luxury pioneer and the Italian design house, the collaboration was launched at Art Basel Miami Beach on 6th December 2023 as part of an installation at B&B Italia Design Studio’s grand opening. The Camaleonda is crafted from nearly entirely sustainable materials, materialising both brands’ nature-positive visions.

The partnership between B&B Italia and Stella McCartney was born of Stella’s long-time personal passion for Bellini’s works and started in 2022 with the Le Bambole armchair. It evolves now with the new version of Camaleonda, the sofa system originally designed in 1970, which made its comeback 50 years later in 2020 - speaking a contemporary language between structural solutions and sustainable choices.

The brand-new Stella McCartney X B&B Italia Camaleonda introduces the latest printed fabric “S-Wave”, which is the result of a next-generation sustainability innovation introduced by the design company’s R&D team. The S-Wave upholstery, available in two different colours, is based on OceanSafe naNea yarn, which is verified to be biodegradable, Cradle to Cradle Certified® Gold and does not contain harmful substances. The material does not shed persistent microplastics into the environment, however, performs like conventional materials.

HeiQ introduces a 100% biobased and long-lasting cosmetic finishing technology for textiles to the market. The newest addition to the HeiQ portfolio harnesses the power of active probiotics and selected prebiotics to enhance the skin microbiome, turning the human’s largest organ into the best-looking one.

HeiQ Skin Care is a synbiotic textile finish aimed at providing a balanced microbiome for glowing skin, even after repeated use and washing of textiles. Unlike conventional products, HeiQ Skin Care utilizes slow-release prebiotics and probiotics seamlessly integrated into a biobased textile matrix, enriching the skin's microbiome diversity, and offering long-lasting cosmetic benefits.

The synergistic combination of prebiotics and probiotics, known as synbiotics, delivers a soothing cosmetic skin treatment while relaxing, working, or sleeping. Probiotics not only restore and improve the skin's natural balance but also enhance its self-repair capabilities. Synbiotics promote skin renewal, rebalancing, and improved appearance, reducing the signs of aging and establishing a favorable environment for the skin's natural repair mechanisms.

A second skin that takes care of the first
The skin, the largest organ in human body, is home to a diverse community of microorganisms called the skin microbiome. It plays a crucial role in maintaining good skin condition, acting as a protective barrier against harmful agents. However, various factors, such as hormones, diet, smoking, environmental exposures, and excessive UV radiation, can disrupt its balance, leading to skin conditions like rashes, acne, psoriasis, rosacea, skin irritation, redness, eczema, and odor. Maintaining a balanced skin microbiome is essential for preserving skin integrity.

HeiQ Skin Care is suitable for all textile fibers, both natural and synthetic, and can be applied to all textile items that come in direct contact with the skin. This versatility makes it an ideal choice for daily use- at work, during sports, leisure activities, or as bedding items like bed sheets and pillows.

Intensive wear trials conducted during the development stage have proven the consistent release of synbiotics (prebiotics and probiotics) onto the skin, creating conditions to foster a well-balanced microbiome.

The continued weak development of the markets relevant to Lenzing, coupled with very cautious market expectations in 2023, requires a reassessment of Lenzing AG’s macroeconomic environment.

Taking into account the current lack of market recovery, the previous earnings forecast is not expected to be achieved. The Lenzing Group is therefore adjusting its forecast for earnings development and is assuming EBITDA in a range of EUR 270 mn to EUR 330 mn for the 2023 financial year.

CEO Stephan Sielaff: “The recovery expected for the second half of the year in the markets relevant to us has not yet occurred. This makes the early measures we took all the more correct. We launched an ambitious cost reduction program back in November 2022, which delivered the expected results ahead of schedule. Building on this, we are implementing a holistic and consistent value creation program with a focus on measures to strengthen profitability and cash flow generation and to exploit the growth potential in the fiber markets through targeted sales activities.”

The Lenzing Group will announce further details about the value creation program when it publishes its quarterly results on November 3, 2023.

As part of the 12-piece collection, adidas introduces the SST Jacket – for men and women – as well as the Avacourt in a refreshed look. Both pieces share a bold blue hue – synonymous with the outfit that Billie Jean King wore in the Battle of the Sexes match – which is applied throughout the collection as a consistent design story.

The SST Jacket is inspired by the classic adidas tennis tracksuits from the era when Billie Jean King was at the height of her career, changing tennis on and off the court for years to come.

The Avacourt, having originally launched in 2022, is created and engineered to best support women when playing tennis – featuring a women’s specific last, increased torsion, softer materials and a midfoot support saddle. Updates for the 2023 season bridge today’s silhouette with the one worn by Billie Jean King 50 years ago – which was adidas’ first ever signature tennis shoe for women – via its color story, as well as key material updates. The suede leather tongue has a retro feel and soft premium touch, with the toe guard made from a synthetic suede finishing. Adding to the comfort, the heel collar is lined with terry cloth – a fabric synonymous with the era.

Other key pieces in the collection include the Tennis Modular Leotard AEROREADY Pro with detachable skirt, the Tennis Transformative AEROREADY Dress Pro that evolves into two different styles, and the Tennis Reversible AEROREADY Match Skirt Pro with Tennis HEAT.RDY Short Tight Pro layered underneath. For men, key pieces include the Tennis HEAT.RDY Freelift Polo Shirt Pro, the Tennis Reversible AEROREADY Freelift T-Shirt Pro and the Tennis AEROREADY 2 IN 1 Short Pro.

Nylon 6, nylon 6,6, polypropylene, PET and calcium carbonate are available through the company’s proprietary carpet recycling process

Circular Polymers by Ascend, a market-leading recycler of post-consumer carpet, today the launch of Cerene™, a line of recycled polymers and materials made from the company’s proprietary carpet reclaiming technology. Cerene is available as polyamide 6 and 66, PET, polypropylene and calcium carbonate as a consistent,
sustainable feedstock for many applications, including molding and compounding.
Recycling experts from Circular Polymers will be showcasing Cerene at Compounding World Expo on June 14-15 at the Messe Essen in Germany.

Ascend Performance Materials, a fully integrated producer of durable high-performance materials and the majority owner of Circular Polymers by Ascend, is known for its innovations in nylon 6,6. Cerene will continue that legacy with offerings in nylon 6,6 while also bringing to market recycled polymers such as nylon 6, PET and PP.

“Customers around the globe are seeking consistent and reliable post-consumer recycled materials,” said Maria Field, business director of Circular Polymers by Ascend. “Cerene is mechanically recycled using a process that minimizes our carbon footprint and environmental impact.”

Circular Polymers by Ascend converts post-consumer carpet into fiber and pellets. The company uses a proprietary process in its California-based facilities to achieve high efficiency in recycling, successfully providing a new life for virtually every component of the carpet and backing. The company has redirected 85 million pounds of carpet from landfills into new goods since 2018.

Freudenberg Performance Materials (Freudenberg) is expanding its product portfolio by adding an elastic variant of its flexible superabsorbers for modern wound dressings. These superabsorbers increase the comfort level for patients as well as enabling longer wear time, thus reducing the frequency of dressing changes. Further highlights at EWMA include components for more sustainable wound care, PU foams with directly applied silicone adhesives, antimicrobial systems and an innovative hydrophilic debridement foam. The global manufacturer will be welcoming visitors to Exhibition Stand from May 3 – 5 at EWMA 2023.

Freudenberg uses a new technology to manufacture the elastic superabsorbers. Unlike other methods, this technology does not perforate or slit the material, thus achieving a high degree of consistent elasticity. Furthermore, the technology used by Freudenberg bonds the superabsorbent fibers more uniformly with the material, thus enhancing the integrity of this layer in the wound dressing.

Further highlights
Freudenberg is also presenting the M 1714 wound pad component, one example of a sustainable solution that simultaneously delivers on performance. The dressing consists of bio-based fibers and exhibits a smooth wound contact layer. M 1714 has been evaluated for industrial compostability and conforms to ISO 13432. This enables certification of product biodegradability. Further highlights to be presented in Milan include material systems for the antimicrobial treatment of chronic wounds, including systems that do not use active substances.

Wound dressing with silicone adhesive border
With Freudenberg’s silicone coated foams, manufacturers can reduce the number of process steps, thereby avoiding waste, saving energy and simplifying the supply chain. Compared with conventional foam dressings, the Freudenberg foam product also offers higher flexibility for optimal wound bed contouring and reduces the risk of infection by preventing exudate pooling. Freudenberg is showcasing the prototype of a bordered dressing with a silicone adhesive border. In addition, the variant with an extra-strong silicone border enables longer wear time while at the same time ensuring minimal adherence to new skin that forms at the wound edges.

More effective cleansing results and greater patient comfort
Freudenberg is also showcasing an innovative hydrophilic debridement foam. It is ideally suited for use in wound cavities, offers better cleansing results and reduced risk as well as greater patient comfort.

• Harmful PFAS chemicals, used in thousands of consumer products, are shaping up to be the big environmental and health threat of our time. The EU is now the first in the world to propose a broad ban on these chemicals.
• Consumer brands worth more than €130 billion support the ban on PFAS.  
• Investors with assets in PFAS-producing companies are calling for an end to production.

Many companies are taking a stand against PFAS chemicals as the EU invites the public to give its opinions on the proposed ban on these harmful chemicals.

108 companies dedicated to phasing out PFAS chemicals from products and processes have joined the PFAS Movement, an advocacy campaign initiated by environmental NGO ChemSec that calls for comprehensive regulation of PFAS in the EU. The members comprise many well-known brands, such as Inditex, Urbanears and the Cookware Company, representing various industries— fashion, home goods, food, and personal care. The members are worth more than €130 billion in total revenue.

“A European ban on PFAS chemicals will have huge repercussions for all manufacturing industries and require much work for companies in the global supply chain. However, some parts of the industry oppose this ban, claiming that the change is too big to be justified. That’s why the support for a ban from such influential consumer brands as those in the PFAS Movement is so important. It’s a strong sign that businesses want to eliminate PFAS chemicals in products and processes”, says Anne-Sofie Bäckar, Executive Director at ChemSec.

A Hollywood Helping Hand
ChemSec’s PFAS Movement is not only supported by the brands but also by Hollywood actor Mark Ruffalo who became a PFAS activist after his involvement in the film Dark Waters. The film depicts the real-life events following the massive uncovering of PFAS contamination in the USA. As a result, several PFAS producers in the USA are now involved in multimillion-dollar lawsuits.

The health and environmental threats of PFAS, along with all the lawsuits, have also created attention among another influential group: institutional investors. Last year, 47 institutional investors with US$8 trillion in assets sent a letter to 54 chemical companies named by ChemSec, calling for them to halt the production of persistent “forever chemicals”.

The EU ban on PFAS
The proposed EU ban on PFAS is extensive and the first of its kind worldwide. The idea was initially initiated by Sweden, Denmark, the Netherlands, Germany and Norway, who have spent almost three years mapping the implications of a ban on PFAS chemicals in a dossier that expands over nearly 2000 pages. The proposal shows, among other things, that the emissions of PFAS were 75 000 tonnes in 2020. If this continues, the emissions are expected to sit at 4.4 million tonnes in 30 years. The emissions originate from the production and use of the many products that contain PFAS; furniture, cosmetics, electronics and many more.