Solvay SA reported mixed financial results for the fourth quarter ended December 31, with adjusted EBITDA of €169 million. That result was 6% above certain analyst estimates but still 1% lower than consensus expectations.
Revenue for the quarter was €995 million, missing analyst estimates of €1.04 billion and consensus of €1.02 billion. On an organic basis, sales declined 9.6% year-over-year, the company said, reflecting a 5.6% decrease in volumes and a 3.7% reduction in pricing.
Profitability metrics showed pressure. Adjusted EBITDA margins contracted by 560 basis points versus the prior-year period. Underlying EBITDA declined 29.8% organically, the company reported, with volumes down 18% while net pricing rose 1%.
Division-level performance
The Basic Chemicals division delivered a stronger-than-expected quarter, generating adjusted EBITDA of €160 million, beating estimates by 9%. Sales in Basic Chemicals totaled €635 million, down 8.5% on an organic basis.
Within Basic Chemicals, Soda Ash & Derivatives recorded sales of €406 million, a 12.9% organic decline attributed to continued pricing pressure in seaborne markets, while domestic markets remained stable. Peroxides sales reached €229 million, up 0.5% organically. Solvay noted stable merchant market volumes in peroxides alongside growth in electronic grades intended for the semiconductor industry.
Performance Chemicals underperformed expectations. Adjusted EBITDA for the division was €50 million, 8% below estimates, on sales of €359 million, down 11.6% organically. The report highlighted several product-line moves within the division: Coatis sales dropped to €97 million, down 32.4% organically amid difficult market conditions affected by U.S. tariffs and intense Asian pricing competition; Silica sales declined 8.1% organically to €116 million, reflecting weaker tire volumes; and Special Chemicals sales rose 6.9% organically to €147 million, supported by higher rare earth volumes used in electronics and medical applications.
Guidance and cash flow
For fiscal 2026, Solvay set a guidance range for underlying EBITDA of €770 million to €850 million. That range sits below an analyst estimate of €799 million and below a consensus figure of €824 million. The company projects free cash flow of at least €200 million, which is below consensus expectations of €252 million and beneath the level required to fully meet its targeted dividend payout.
Capital expenditures are expected to reach at most €300 million for the year. Solvay also anticipates cumulative structural cost savings of around €300 million by the end of 2026. The 2026 EBITDA guidance incorporates an assumed negative foreign exchange impact of €20 million based on an exchange rate of 1.20 EUR/USD, as well as an additional €40 million in transformation expenses.
On cash generation, fourth-quarter free cash flow to shareholders was €137 million, up from €41 million in the prior-year quarter, supported by improved working capital. Net financial debt stood at €1.6 billion, representing a ratio of 1.8 times net debt to EBITDA.
Solvay declared a full-year gross dividend of €2.43 per share, which the company said is in line with analyst expectations.
Takeaways
The quarter combined pockets of operational outperformance with broader end-market weakness. Basic Chemicals outpaced expectations, and Peroxides showed modest growth linked to electronic-grade applications for the semiconductor sector, while Performance Chemicals suffered from tariff effects, regional pricing competition, and lower tire volumes for silica products. Management issued conservative 2026 guidance that factors in currency and transformation costs and reflects a free cash flow path that does not meet consensus or the company’s dividend target.