Solvay has posted strong growth in earnings for the 2016 full fiscal year despite lower sales.
The Brussels-based speciality company's net sales fell 4.7 percent to 10.9 billion euros in 2016 mainly due to lower sales prices in “a deflationary raw material price environment,” the company announced Feb. 24.
Also negative currency effects impacted sales while volumes remained stable.
Earnings before interest, taxes, depreciation and amortization EBITDA) grew 7.5 percent to 2.28 billion euros, driven by pricing power of 5.9 percent and fixed cost reduction benefits of 2.9 percent.
According to Solvay, "operational excellence” exceeded 200 million euros, while completion of the Cytec integration delivered 70 million euros of synergies.
There were no significant effects from volume/mix changes, while foreign exchange had a 1.9 percent negative effect.
Performance was generally strong in Q4, with net sales up by 1.6 percent at 2.8 billion euros compared to the same period last year.
The rise was mainly due to the 3.9 percent increase in volume, partially offset by the 2.2 percent reduction of sales prices.
Underlying EBITDA grew 16 percent to 527 million euros in Q4, with volumes as the main contributor across all segments.
Looking ahead, Solvay expects underlying EBITDA to grow by mid-single digit in 2017, mainly driven by Advanced Materials and Advanced Formulations.
"Solvay delivered solid full-year EBITDA growth supported by our transformation and subsequent improvement of our customer profile,” said CEO, Jean-Pierre Clamadieu.