|Net Sales||Underlying EBITDA||Underlying net income (Group Share)|
|€2,930 m||€602 m||€192 m|
Underlying Adj. EPS (basic)
The results of former Cytec are consolidated in the Group’s income and cash flow statements since January 1, 2016. Comparative information for the first quarter and full year 2015 is presented on an unaudited pro forma basis as if the acquisition of Cytec had taken place on January 1, 2015.
Besides IFRS accounts, Solvay also presents underlying Income Statement performance indicators to provide a more consistent and comparable indication of the Group’s financial performance.The underlying performance indicators adjust IFRS figures for the non-cash Purchase Price Allocation (PPA) accounting impacts related to acquisitions, for the coupons of perpetual hybrid bonds, classified as equity under IFRS but treated as debt in the underlying statements, and for other elements that would distort the analysis of the Group’s underlying performance.
The comments on the results made on pages 3 to 13 are on an underlying basis, unless otherwise stated.
Q1 2016 underlying results 
- Net sales totaled € 2.9 bn, down (6)%, with average prices (2)% linked to partial pass-through of lower raw material costs in a deflationary environment. Scope changes and foreign exchange impacts on conversion decreased sales by (3)%. Volumes were stable overall, with growth in Advanced Materials and Functional Polymers offset by a drop in other segments.
- Underlying EBITDA grew 2% at € 602 m, as pricing power boosted performance by 10%, underpinned by Solvay’s excellence programs and transactional foreign exchange gains. The volume mix had a (3)% impact. The remaining (5)% is caused by the € 30 m one-off benefit recognized in the first quarter of 2015, linked to U.S. post-retirement benefits. The underlying EBITDA margin widened to 21%, up 1.4 pp.
- Advanced Materials at € 267 m, up 1.4% yoy, as growth in healthcare, consumer goods and sustainable mobility applications more than offset the impact of ongoing inventory adjustments in the smart devices market;
- Advanced Formulations at € 122 m, down (10)% yoy, reflecting weaker oil & gas market conditions compared to Q1 2015 when this market started to decline;
- Performance Chemicals at € 199 m, up 7% yoy, thanks to cost efficiency gains, especially in soda ash;
- Functional Polymers, at € 65 m, up 54% yoy, driven by demand, increased net pricing and a higher contribution from RusVinyl;
- Corporate and Business Services at € (51) m, benefiting from cost optimization programs and delivery of Cytec synergies; Q1 2015 underlying EBITDA was € (35) m, impacted by the € 30 m one-off post-retirement benefits.
- Underlying net income, Solvay share, was € 192 m, down (5)%, as a result of scope effects in discontinued operations, following the creation of Inovyn in July 2015.
- Free cash flow of € 9 m improved versus € (358) m in the first quarter of 2015, both on IFRS and underlying basis, primarily reflecting a significant reduction of seasonal working capital needs and the anticipated reduction of capital expenditure.
- Underlying net financial debt rose to € (6.8) bn from € (6.6) bn at the start of the year, following the € (138) m payment of the interim dividend to Solvay’s shareholders and other financial charges.
Q1 2016 IFRS results
- Net income, Solvay share, on an IFRS basis was € 15 m versus € (12) m in 2015 on a pro forma unaudited basis (see table on page 14), and € 140 m as reported historically .
- Net financial debt, on an IFRS basis, was € (4.6) bn, excluding the perpetual hybrid bonds.
 The underlying data compares to pro forma 2015, as if the Cytec acquisition had taken place on January 1, 2015. The end-of-period balance sheet data compare to the position at the start of the period.
 Cytec was not included in the 2015 IFRS financial statements, whereas the Q1 2016 net income includes the impacts of the purchase price allocation, as well as the related result from portfolio management and reassessments.
Quote of the CEO
In the first quarter of the year, we delivered on our priorities. The smooth and swift integration of the former Cytec teams and businesses as part of Solvay puts us well on track to achieve our recently increased synergy targets. Our earnings grew against strong comparables in 2015, supported by a ninth straight quarter of solid pricing power which contributed to a record margin of 21%. In Advanced Materials we offset the ongoing inventory adjustments in smart devices with growth in other applications. While Advanced Formulations continued to suffer from the downturn in oil and gas, we took measures to enhance competitiveness across operating segments. Our reinforced focus on cash, including more efficient working capital management and selective capex allocation, led to a substantial improvement in cash generation and paves the way to meet our objectives for the year.
Based on the first quarter results and the current macro-economic environment, Solvay reaffirms its guidance of high-single digit underlying EBITDA growth in 2016, compared to the pro forma € 2,336 m in 2015. This growth is expected to be back-end loaded. Free cash flow is expected to exceed € 650 m, more than 30% higher than the prior year pro forma level.
An international chemical and advanced materials company, Solvay assists its customers in innovating, developing and delivering high-value, sustainable products and solutions which consume less energy and reduce CO2 emissions, optimize the use of resources and improve the quality of life. Solvay serves diversified global end markets, including automotive and aerospace, consumer goods and healthcare, energy and environment, electricity and electronics, building and construction as well as industrial applications. Solvay is headquartered in Brussels with about 30,000 employees spread across 53 countries. It generated pro forma net sales of € 12.4 bn in 2015, with 90% made from activities where it ranks among the world’s top 3 players. Solvay SA (SOLB.BE) is listed on Euronext in Brussels and Paris (Bloomberg: SOLB:BB - Reuters: SOLB.BR).