EuroBusiness Media (EBM): Solvay, a world leader in customised chemical solutions, reports results for 2013. Jean-Pierre Clamadieu welcome. You are the CEO of Solvay, what are your comments on your 2013 results?
Jean-Pierre Clamadieu: Well, 2013 was a very important year for us. We’ve accelerated very much our transformation with a focus on the portfolio transformation. As far as results are concerned, it has been a challenging year. We have suffered from the weak macro-economic environment, especially in Europe. On top of that, we had two specific issues which impacted our results in 2013, the end of the guar bubble and the end of our carbon credit programme. These two elements are behind us today and if we leave them aside, most of our businesses have performed very well in this challenging environment and we have been able to generate almost €1.7 billion of Recurring EBITDA.
EBM: What is your update on how you performed in the fourth quarter?
Jean-Pierre Clamadieu: Well, if we look at the fourth quarter, first we’ve seen a seasonality which is less pronounced than usual, and again if we leave aside the two exceptional items that I just mentioned, we have seen growth of around 8%, which I think is a good sign that things are slightly improving.
EBM: What is your update on your plans to transform the company to return to growth?
Jean-Pierre Clamadieu: Well, first we have worked very much on our portfolio with a significant acquisition, Chemlogics, which allows us to improve significantly our position as a supplier of chemical solutions to the oil and gas industry, mostly in North America. Second, we have worked on our chlorovinyl positions with the (intended) divestiture of our business in Latin America and the creation of a JV in Europe with Ineos. Then we have launched a number of Excellence initiatives with a very simple objective: make sure that we make the best out of our assets and business position. This plan deals with our manufacturing capabilities, supply chain management, commercial excellence, innovation… and I think that we have started to create a dynamic which will help us improve significantly our performance in the next few years.
EBM: What is your update on winning EU clearance for your Joint Venture in PVC with Ineos?
Jean-Pierre Clamadieu: This is a complex negotiation but Ineos and ourselves are very committed to finding the right solution with the EU teams. So this is an ongoing process and we expect to have the solution in the next couple of months.
EBM: Last year you bought Chemlogics in the US for €1 billion. What is your update on how the integration is going and how do you see it contributing to future earnings?
Jean-Pierre Clamadieu: First, this is a great project. It’s a fantastic opportunity for Solvay to be exposed to the very favourable US energy scenario by providing to the oil and gas companies the chemicals and the solutions they need to be able to produce both unconventional oil and gas. The integration is going very well, Chemlogics has been part of Solvay since the end of October 2013. There is a very strong dynamic between the teams, to work together. The results are very encouraging and overall I think it will be a great acquisition for Solvay.
EBM: After exiting from PVC through a Joint Venture, what are other candidates for disposal?
Jean-Pierre Clamadieu: We have decided to look at strategic opportunities for Eco Services business, it’s a sulphuric acid regeneration business based in the US. Very steady cash generation, but limited growth opportunities and certainly a business for which exploring other strategic options makes sense.
EBM: What types of targets are you looking at for acquisitions?
Jean-Pierre Clamadieu: We have very clearly defined the business segments in which we want to grow. Advanced Materials on the one hand, Advanced Formulations on the other hand and it’s clearly within these business segments that we are looking at growth opportunities. In terms of geographies today, Asia or North America are certainly keys, but we can also look at businesses which would bring us new technologies in these segments.
EBM: After flat, underlying EBIDTA in 2013 what are your plans to return to profitability growth in 2014?
Jean-Pierre Clamadieu: I think the transformations we achieved in 2013 put us in very good conditions to benefit from some improvement in the macro-economic scenario and indeed we start to see – especially in Europe – some signs that things could get better. The Excellence initiatives I was mentioning are there to help us make the most out of these improving conditions. And yes, indeed, our objective is to make sure that we grow our EBITDA in 2014 versus the 2013 base.
EBM: Jean-Pierre Clamadieu, CEO of Solvay, thank you very much.
Jean-Pierre Clamadieu: Thank you.
