Solvay SA/NV (the \u201cCompany\u201d or \u201cSolvay\u201d) is a public limited liability company governed by Belgian law and listed on Euronext Brussels and Euronext Paris. The principal activities of the Company, its subsidiaries, joint operations, joint ventures and associates (jointly the \u201cGroup\u201d) are described in note F1 Revenue and Segment Information.
The Solvay Group operates in 44 production sites, 6 research centers, and over 41 countries, employs approximately 9,000 employees and delivered net sales of \u20ac4.5\u00a0billion in 2024. Solvay SA/NV is the Solvay Group\u2019s ultimate parent with its registered office located at Rue Ransbeek 310, B-1120 Brussels, Belgium.
On March 5, 2025, the Board of Directors authorized the consolidated financial statements for issuance.
This information was prepared in accordance with European Regulation (EC) 1606/2002 on the application of international accounting standards dated July 19, 2002. The Group\u2019s consolidated financial statements for the year ended December 31, 2024, were prepared in accordance with IFRS Accounting Standards as published by the International Accounting Standards Board (IASB) and endorsed by the European Union.
The accounting standards applied in the consolidated financial statements for the year ended December 31, 2024, are consistent with those used to prepare the consolidated financial statements for the year ended December 31, 2023. The Group has not early adopted any other standards, interpretations or amendments that have been issued but is not yet effective.
The Group has prepared the financial statements on the basis that it will continue to operate as a going concern.
The standards, interpretations and amendments that became effective for the financial statement beginning on January 1, 2024 or later, and which are relevant to the Group are presented below. An assessment was made that these amendments had no material impact on the Group\u2019s consolidated financial statements.
The amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures clarify the characteristics of supplier finance arrangements and require additional disclosure of such arrangements. The disclosure requirements in the amendments are intended to assist users of financial statements in understanding the effects of supplier finance arrangements on an entity\u2019s liabilities, cash flows and exposure to liquidity risk. As a result of implementing the amendments, the Group has provided additional disclosures about its supplier finance arrangement.
These amendments provide a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangements in place at the reporting date. The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current. The clarification confirmed our classification of the bridge facility as long term.
In September 2022, the IASB issued amendments to IFRS 16 to specify the requirements that a seller-lessee uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure the seller-lessee does not recognize any amount of the gain or loss that relates to the right of use it retains.
The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group\u2019s financial statements and which may have an impact on the Group are disclosed below. The Group intends to adopt these new and amended standards and interpretations, if applicable, when they become effective.
In August 2023, the IASB issued amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates to specify how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. The amendments also require disclosure of information that enables users of its financial statements to understand how the currency not being exchangeable into the other currency affects, or is expected to affect, the entity\u2019s financial performance, financial position and cash flows. The amendments will be effective for annual reporting periods beginning on or after January 1, 2025. Early adoption is permitted but will need to be disclosed. When applying the amendments, an entity cannot restate comparative information. The amendments are not expected to have a material impact on the Group\u2019s financial statements.
In April 2024, the IASB issued IFRS 18, which replaces IAS 1 Presentation of Financial Statements. IFRS 18 introduces new requirements for presentation within the statement of profit or loss, including specified totals and subtotals. Furthermore, entities are required to classify all income and expenses within the statement of profit or loss into one of five categories: operating, investing, financing, income taxes and discontinued operations, whereof the first three are new. It also requires disclosure of newly defined management-defined performance measures, subtotals of income and expenses, and includes new requirements for aggregation and disaggregation of financial information based on the identified \u2018roles\u2019 of the primary financial statements (PFS) and the notes. In addition, narrow-scope amendments have been made to IAS 7 Statement of Cash Flows, which include changing the starting point for determining cash flows from operations under the indirect method, from \u2018profit or loss\u2019 to \u2018operating profit or loss\u2019 and removing the optionality around classification of cash flows from dividends and interest. In addition, there are consequential amendments to several other standards. IFRS 18, and the amendments to the other standards, is effective for reporting periods beginning on or after January 1, 2027, but earlier application is permitted and must be disclosed. IFRS 18 will apply retrospectively. The Group is currently working to identify all impacts the amendments will have on the primary financial statements and notes to the financial statements.
On December 18, 2024, the IASB issued the amendments to help companies better report the financial effects of nature-dependent electricity contracts, which are often structured as power purchase agreements. The amendments clarify the application of the \u2018own use\u2019 requirements, permit hedge accounting if these contracts are used as hedging instruments, and add new disclosure requirements to enable investors to understand the effect of these contracts on a company\u2019s financial performance and cash flows. These amendments are required to be applied for annual reporting periods beginning on or after January 1, 2026. However, early application is permitted.
The consolidated financial statements are presented in millions of euros, which is also the functional currency of the parent company. Rounding differences may occur in respect of individual amounts or percentages.
The preparation of the consolidated financial statements requires the use of estimates and assumptions that have an impact on the application of accounting policies and the measurement of amounts recognized in the consolidated financial statements. The areas for which the estimates and assumptions are material with respect to the consolidated financial statements are presented in the section Key sources of estimation uncertainty.
The consolidated financial statements incorporate the financial statements of the Company, and:
hentities controlled by the Company (including through its subsidiaries) and that hence qualify as subsidiaries;
harrangements over which the Company (including through its subsidiaries) exercises joint control, and that qualify as joint operations;
harrangements over which the Company (including through its subsidiaries) exercises joint control, and that qualify as joint ventures;
hentities over which the Company (including through its subsidiaries) has significant influence and that hence qualify as associates.
Where necessary, adjustments are made to the financial statements of the investees so as to align their accounting policies with those of the Group.
In accordance with the principle of materiality, certain companies, which are not of a significant size, have not been included in the consolidation scope. Companies are deemed not to be significant when, during two consecutive years, they do not exceed any of the three following thresholds in terms of their contribution to the Group\u2019s accounts:
hsales of \u20ac18 million;
htotal assets of \u20ac11 million;
hheadcount of 100 persons.
Companies that do not meet these criteria are, nevertheless, consolidated where the Group believes that they have a potential for rapid development, or where they hold shares in other companies that are consolidated based on the above criteria.
In the aggregate, the non-consolidated companies have an immaterial impact on the consolidated financial statements of the Group.
In 2024, the above thresholds were updated to reflect the new size of the group following the Partial Demerger. There was no change in the consolidation scope resulting from the change in thresholds.
The full list of companies can be obtained at the Company\u2019s head office.
A subsidiary is an entity over which the Group has control. Control is achieved when the Group has (a) power over an investee, (b) exposure, or rights, to variable returns from its involvement with the investee, and (c) the ability to use its power over the investee to affect the amount of the investor\u2019s returns. To assess whether the Group has control, potential voting rights are taken into account. Subsidiaries are fully consolidated. The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition and up to the effective date of disposal.
Intra-group transactions, balances, income and expenses are eliminated on consolidation.
Non-controlling interests in subsidiaries are presented separately from the Group\u2019s equity. Non-controlling interests are initially measured, either at fair value (full goodwill method), or at the non-controlling interests\u2019 proportionate share in the recognized amounts of the acquiree\u2019s identifiable net assets (proportionate goodwill method). The choice of measurement is made on an acquisition-by-acquisition basis. Subsequent to the acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests\u2019 share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.
Changes in the Group\u2019s equity interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The carrying amounts of the Group\u2019s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.
When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest, and (ii) the previous carrying amount of the assets (including goodwill) and liabilities of the subsidiary and any non-controlling interests. Amounts previously recognized in other comprehensive income in relation to the subsidiary are accounted for (i.e.\u00a0Reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be required if the relevant assets or liabilities were disposed of. The fair value of any investment retained in the former subsidiary at the date when control is lost is considered to be the fair value on initial recognition for subsequent accounting in accordance with IFRS 9 or, when applicable, the cost on initial recognition of an investment in an associate or joint venture in accordance with IAS 28 Investments in Associates and Joint Ventures.
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about relevant activities require the unanimous consent of the parties sharing control. In its consolidated financial statements, the Group recognizes its contractual share of the joint operations\u2019 assets, liabilities, revenue and expenses, which is generally aligned with the ownership interest in the joint operations.
An associate is an entity over which the Group has significant influence and that is neither a subsidiary, nor an interest in a joint arrangement. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about relevant activities require the unanimous consent of the parties sharing control.
The results, assets and liabilities of associates and joint ventures are incorporated in the consolidated financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Under the equity method, on initial recognition, investments in associates and joint ventures are recognized in the consolidated statement of financial position at cost, and the carrying amount is adjusted for post-acquisition changes in the Group\u2019s share of the net assets of the associate or joint venture, less any impairment of the value of individual investments. Losses of an associate or joint venture in excess of the Group\u2019s interest in that associate or joint venture (which includes any long-term interests that, in substance, form part of the Group\u2019s net investment in the associate or joint venture) are recognized only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture.
Any excess of the cost of acquisition over the Group\u2019s share of the net fair value of the identifiable assets and (contingent) liabilities of the associate or joint venture recognized at the date of acquisition is goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of that\u00a0investment.
Where a Group entity transacts with an associate or joint venture of the Group, profits and losses are eliminated to the extent of the Group\u2019s interest in the relevant associate or joint venture.
After application of the equity method, the Group reviews its investments in associates and joint ventures for impairment. At each reporting date, the Group determines whether there is objective evidence that the investment in the associate or joint venture is impaired. If there is such evidence, the Group performs its analysis and calculates any impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value, and then recognizes the loss in the consolidated income statement.
The individual financial statements of each Group entity are prepared in the currency of the primary economic environment in which this Group entity operates (its functional currency). For the purpose of preparing the consolidated financial statements, the results and financial position of each Group entity are expressed in euros (EUR), which is the presentation currency of the Group\u2019s consolidated financial statements.
In preparing the financial statements of the individual entities, transactions in currencies other than the entities\u2019 functional currency are recognized at the exchange rates prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the closing rate. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rate when the fair value was measured. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the date of the initial transactions.
Exchange differences are recognized in profit or loss in the period in which they arise except for:
hexchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur in the foreseeable future (therefore forming part of the net investment in the foreign operation), which are recognized initially in other comprehensive income under \u201ccurrency translation differences;\u201d and
hexchange differences on transactions entered into in order to hedge certain foreign currency risks (see note F32 Financial instruments and financial risk management for hedge accounting policies).
The main exchange rates used are:
| \n 1 Euro = | \n\n \n | \n\n Year-end rate | \n\n Average rate | \n||
|---|---|---|---|---|---|
| \n December 31, 2024 | \n\n December 31, 2023 | \n\n 2024 | \n\n 2023 | \n||
| \n Brazilian Real | \n\n BRL | \n\n 6.4210 | \n\n 5.3612 | \n\n 5.8244 | \n\n 5.4010 | \n
| \n Yuan Renminbi | \n\n CNY | \n\n 7.5865 | \n\n 7.8383 | \n\n 7.7878 | \n\n 7.6608 | \n
| \n Pound Sterling | \n\n GBP | \n\n 0.8295 | \n\n 0.8690 | \n\n 0.8467 | \n\n 0.8698 | \n
| \n Indian Rupee | \n\n INR | \n\n 88.9827 | \n\n 91.9678 | \n\n 90.5498 | \n\n 89.3107 | \n
| \n Japanese Yen | \n\n JPY | \n\n 163.0481 | \n\n 156.3416 | \n\n 163.8445 | \n\n 151.9821 | \n
| \n Korean Won | \n\n KRW | \n\n 1,530.0792 | \n\n 1,423.3871 | \n\n 1,474.9032 | \n\n 1,412.4780 | \n
| \n Mexican Peso | \n\n MXN | \n\n 21.5452 | \n\n 18.7359 | \n\n 19.8164 | \n\n 19.1854 | \n
| \n US Dollar | \n\n USD | \n\n 1.0394 | \n\n 1.1052 | \n\n 1.0823 | \n\n 1.0813 | \n
On March 5, 2025, the Board of Directors authorized the consolidated financial statements for issuance.
On March 26, 2024, Solvay completed the placement of a 4-year \u20ac750 million bond maturing on April 3, 2028, and a 7.5-year \u20ac750 million bond maturing on October 3, 2031, with the coupons of 3.875% and 4.250% respectively \u2013 this represented an important milestone after the Partial Demerger effectuated in December 2023. The bonds were settled on April 3, 2024, and their trading began on the Euro MTF market of the Luxembourg Stock Exchange on the same day. Apart from the general corporate purposes, the proceeds from the bonds\u2019 issue, were used for the refinancing of the \u20ac1.5 billion bridge facility set up at the end of 2023 in relation to the Partial Demerger.
The interest rate of the issued bonds had been hedged in 2023 with two flexi-swap instruments. At the time of the bonds\u2019 placement, these instruments were unwound and replaced by two new instruments classified as financial debt (\u20ac 33 million in non-current and \u20ac 4 million in current), payable in instalments that match bonds' coupon payment dates. The conversion had no net cash-flow effect as the unwinding of the flexi-swap (\u20ac -37 million) was compensated with an equivalent amount received from the bank related to the two new instruments.
The cash flow hedge reserve accumulated in OCI and related to the unwound flexi-swap has been frozen and is being recycled to profit or loss over the duration of the two bonds (\u20ac 5.0 million recognized in borrowing costs in 2024). As at December 31, 2024, the remaining cash-flow hedge reserve accumulated in OCI linked to the flexi-swap is \u20ac-32 million.
Please refer to Note F32 Financial Instruments for further details.
Prior to the Partial Demerger, Solvay undertook various liability management exercises in respect of certain of its outstanding debt securities. The purpose of the liability management exercises was to repurchase or redeem certain debt securities, and to transfer liability for the remaining relevant debt securities or related guarantees to the Syensqo Group upon the Partial Demerger becoming effective. The liability management exercises were also intended to amend certain contractual provisions in certain of the debt securities to facilitate the implementation of the Partial Demerger.
On September 4 and 5, 2023, Solvay announced the results of liability management transactions relating to certain senior and hybrid bonds denominated in euros. The transactions included the following:
ha request for consent of bondholders to the substitution, effective upon completion of the Partial Demerger, of Syensqo SA/NV for Solvay SA/NV as issuer of (i) the \u20ac500,000,000 Undated Deeply Subordinated Fixed to Reset Rate Perp-NC5.5 Bonds with first call date on December 2, 2025 (ISIN: BE6324000858) (the \u201c2025 Hybrid Bonds\u201d), and (ii) the \u20ac500,000,000 2.750% Fixed Rate Bonds due December 2, 2027 (ISIN: BE6282460615) (the \u201c2027 Bonds\u201d).
ha tender offer relating to the \u20ac500,000,000 Undated Deeply Subordinated Fixed to Reset Rate Bonds with first optional redemption date of June 3, 2024 (ISIN: XS1323897725) (the \u201c2024 Hybrid Bonds\u201d) issued by Solvay Finance S.A. and irrevocably guaranteed on a subordinated basis by Solvay (the \u201cTender Offer\u201d).
Please refer to Note F33 Net Indebtedness for further details.
On September 24, 2024, Solvay announced a project to consult with its social partners to cease the production of TFA and its fluorinated derivatives at its Salindres site in France. The plan to cease production is due to the continued negative financial performance of the Salindres plant over the past few years, driven by unfavorable market conditions that are unlikely to improve in the future. The social consultation ended on December 19, 2024. The discontinuation of these activities will result in the suppression of 65 positions. As result of the announcement, the net book value of the site's assets of \u20ac9 million were impaired in Q3, 2024. Solvay recognized a provision of \u20ac51 million including severance costs, dismantling, demolition, exit costs, and for environmental provisions. Beyond the provision considered for remediation of the known pollution in the Salindres subsoil, some areas of the site will require further analyses to determine if additional remediation is needed. This uncertainty was reflected accordingly as a contingent liability.
Please see also Note F36 Contingent Liabilities.
In 2023, Solvay SA/NV and Syensqo SA/NV entered into a transition services agreement (the \u201cTSA\u201d), effective from the completion of the Partial Demerger for a non-renewable term of 24 months, whereby the Solvay Group and the Syensqo Group will, to the extent that certain business functions and corporate functions have not been separated prior to the completion of the Partial Demerger, each provide to the other (or the other\u2019s respective subsidiaries) various services and support on an interim transitional basis. In particular, given that the Syensqo Group will not have certain internal corporate functions fully in place upon completion of the Partial Demerger (such as finance, legal, tax, human resources, payroll, information technology and other support services), the Solvay Group will provide support with such matters under the terms of the TSA. From the completion of the Partial Demerger and going forward, the fees payable by the Syensqo Group to the Solvay Group have been determined internally using a limited mark-up, in line with the Solvay Group\u2019s practice for internal servicing and have not been the subject of independent bids.
In 2024, Solvay launched the process to exit from the TSA and redesign of Solvay\u2019s Global Business Services (GBS) and Digital Technology (DT) organization which is an important initial step in designing the future new Solvay Target Operating Model (TOM). At the end of TSA, which is expected for Q4 2025, employees who will not be part of the future Solvay organization and will not move to Syensqo will be impacted by the restructuring plan. In 2024 a restructuring provision currently estimated at \u20ac28 million was recognized and may be reduced should Solvay employees transfer to Syensqo in accordance with the terms of the TSA.
According to the TSA, Solvay will be compensated by Syensqo for restructuring costs currently estimated at \u20ac22 million (\u20ac19 million in Other Receivables, and \u20ac3\u00a0million in Loans and Other Assets).
Other operating gains and losses in the consolidated income statement (see also Note F4 Other Operating Gains and Losses), include a \u20ac29 million expense related to the increase of the provision in 2024 (coming on top of \u20ac49 million in 2023, of which \u20ac6 million was used in 2024) related to an onerous contract for an energy transition project in Dombasle, France. This provision (\u20ac72 million in total as of December 31, 2024) reflects the best estimate of the expenditure required to settle the present obligation at the end of December 2024, which relate to delays and overruns (mostly attributed to external factors, including record high inflation and supply disruptions). This situation is unique within the different energy transition projects already completed or in progress within the Group and has to do with the particular contractual engagement of this project. The project is expected to be completed in H2 2025.
In March 2024, the Group increased its ownership in its equity accounted investment in Shandong Huatai Interox Chemical Co. by 10% from 50% to 60%, for \u20ac4\u00a0million. The transaction resulted in Solvay obtaining control over the legal entity. The acquisition was accounted for as a business combination achieved in stages and resulted in a \u20ac10 million gain on derecognizing the equity investment and recognizing \u20ac18 million of goodwill and \u20ac3 million of intangible assets based on the fair value of the entity upon consolidation. The Group finalized the purchase price allocation in December 2024 and recognized no material change between the provisional asset carrying amounts and fair values.
On September 16, 2024, Solvay entered into an exclusive purchase option agreement with Revive a specialist in urban regeneration, regarding the NOH site in Brussels. The developer will be able to exercise the option and finalize the transfer of ownership following the due diligence process which is planned to end in 2025. Due to the ongoing due diligence, IFRS 5 condition of 'asset being available for sale in the present condition' is not met. Consequently, Solvay has not yet classified the NOH site as an asset held-for-sale. The asset\u2019s carrying amount is in line with the fair value less cost to sell.
On December 8, 2023, at the extraordinary general meeting, Solvay SA/NV\u2019s shareholders agreed that the group separates into two independent, publicly traded companies - Solvay Group and Specialty Businesses forming Syensqo Group. The separation was effected by means of a partial demerger (\u201cscission partielle\u201d) of Solvay SA/NV, under Belgian law. The Partial Demerger became effective on December 9, 2023 at 00:00 a.m. CET. In connection with the Partial Demerger, Syensqo became a public company, independent from Solvay, with its ordinary shares trading on the regulated markets of Euronext in Brussels and Paris starting on December 11, 2023. Consequently, in the comparative information in 2024, the Group presents the Specialty Businesses as discontinued operations:
hfor 2023 financial year, the discontinued operations are included for the period until December 8, 2023, in the income statement;
hin the consolidated statement of financial position, the assets and liabilities related to the Specialty Businesses have been derecognized from the consolidated statements as a part of the deconsolidation of the Specialty Businesses from the Group;
hin the consolidated statement of cash flows, the cash-flows present both continuing and discontinued operations in the primary statement. For 2023 financial year, the cash flows from discontinued operations are included for the period until December 8, 2023, Below the primary statement, Solvay separately presents the consolidated cash-flows from discontinued operations.
Solvay SA/NV and Syensqo SA/NV entered into a Separation Agreement on December 4, 2023, and effective from the completion of the Partial Demerger, to govern certain practical aspects of the separation of the two groups, as well as the allocation of certain liabilities, including environmental liabilities. The Separation Agreement will be effective until the thirtieth anniversary of December 9, 2023, except with respect to claims relating to environmental liabilities, which can be made until twelve months after the relevant statute of limitations expires. The Separation Agreement may not be terminated early without written consent of each party.
The Separation Agreement governs certain aspects of the separation of Syensqo from the Solvay Group, including, among other arrangements, those relating to:
i.the settlement and termination of certain intercompany balances and arrangements - see note F37 Related parties, note F32 Financial Instruments;
ii.the substitution, removal or release of legal entities that are part of the Solvay Group or the Syensqo Group, as applicable, in respect of certain third-party credit or other support obligations, as well as the provision of counter guarantees - see note F32 Financial Instruments and note F36 Contingent liabilities;
iii.the allocation of certain fees, costs and expenses incurred in connection with the Partial Demerger - see note F8;
iv.the transfer to the other party of any assets (identified within 24 months of the completion of the Partial Demerger) allocated erroneously to the Syensqo Group or the Solvay Group;
v.the transfer of all rights and obligations to Syensqo in relation to certain transferred employees\u2019 supplementary pension schemes in Belgium - see note F30 Employee Benefits.
The Separation Agreement contains provisions to allocate to the Solvay Group or the Syensqo Group environmental liabilities for certain operating, closed or divested sites, including sites for which provisions have been established in the Solvay Group\u2019s consolidated financial statements, and cross-indemnity obligations applicable where a party incurs claims, liabilities or expenses for sites allocated to the other party in the Separation Agreement.
Under the cross-indemnity provisions, each of the Solvay Group, on the one hand, and the Syensqo Group, on the other hand, have agreed to indemnify the other party for certain environmental liabilities allocated to the other party. The Separation Agreement includes provisions regarding the management of environmental claims, remediation obligations and related actions. The Separation Agreement also provides that claims will be deemed to have been made, automatically, under the cross-indemnity provisions for specifically allocated environmental liabilities that are the subject of existing provisions as set forth in the Solvay Group consolidated financial statements as of and for the six-month period ended June\u00a030, 2023. For all other environmental liabilities that are subject to the cross-indemnity provisions, claims may be submitted for up to 12 months following the expiry of the relevant statute of limitations. The Separation Agreement also contains customary provisions aimed at avoiding double recoveries. See note F31 Provisions for further details on provisions.
The rules for determining whether a distribution such as the Partial Demerger and the internal separation of the U.S. Specialty Businesses and the U.S. Essential Businesses (the \u201cU.S. Spin-Off\u201d) qualify for tax-free treatment for U.S. federal income tax purposes are complex and depend on all the relevant facts and circumstances. Solvay intends for the Partial Demerger and the U.S. Spin-Off to each qualify as a tax-free reorganization under Sections\u00a0368(a)(1)(D) and\u00a0355 of the U.S. Internal Revenue Code of 1986, as amended (the \u201cU.S. IRC\u201d). Solvay has received a private letter ruling from the U.S. Internal Revenue Service (the \u201cIRS\u201d) confirming such qualification (except with respect to certain requirements under Section 355 of the U.S. IRC on which the IRS does not rule). Solvay also received a tax opinion from US tax counsel addressing those matters upon which the IRS would not rule and relying on the IRS\u2019 ruling as to matters covered by the ruling.
In connection with the U.S. Spin-Off and the Partial Demerger, Solvay and Syensqo entered into a U.S. Tax Matters Agreement (the \u201cU.S. TMA\u201d) intended to (among other things) preserve the tax-free treatment of the Partial Demerger and the U.S. Spin-Off for U.S. federal income tax purposes. Under the U.S. TMA, Solvay and Syensqo will generally be required to indemnify the other for any U.S. taxes and certain related losses resulting from (or relating to) the failure of the U.S. Spin-Off and the Partial Demerger (and certain associated transactions) to qualify for their intended U.S. tax treatment, where such taxes or losses are attributable to (1)\u00a0untrue representations and breaches of covenants made in connection with the U.S. Spin-Off, the Partial Demerger or the U.S. TMA (including in the IRS ruling and tax opinion described above), (2) the application of certain provisions of U.S. federal income tax law to the U.S. Spin-Off or the Partial Demerger (for example, in connection with a change of control of either party) or (3) other actions or omissions within the party\u2019s control which give rise to U.S. taxes (or related losses) in connection with the U.S. Spin-Off and the Partial Demerger.
Under the U.S. TMA, Solvay and Syensqo are prohibited from taking actions that are reasonably expected to cause the Partial Demerger or U.S. Spin-Off (or certain associated transactions) to fail to qualify for their intended U.S. tax treatment, or that could jeopardize the conclusions of, or that are inconsistent with, the IRS ruling or the tax opinion discussed above. Additionally, the parties are generally prohibited (subject to certain exceptions in the U.S. TMA), for the two-year period following completion of the Partial Demerger, from engaging in certain acquisitions, mergers, liquidations, sales, and redemption transactions with respect to their respective stock and assets that could jeopardize the tax-free status of the Partial Demerger or the U.S. Spin-Off for U.S. federal income tax purposes. Neither Solvay\u2019s nor Syensqo\u2019s obligations under the U.S. TMA are limited in amount or subject to any cap.
As of December 31, 2024 Solvay was not aware of any breach or alleged breach by it of its obligations under the U.S. TMA and had not received any notice from Syensqo relating to a breach or alleged breach thereof.
This information was prepared in accordance with European Regulation (EC) 1606/2002 on the application of international accounting standards dated July 19, 2002. The Group\u2019s consolidated financial statements for the year ended December 31, 2024, were prepared in accordance with IFRS Accounting Standards as published by the International Accounting Standards Board (IASB) and endorsed by the European Union.
The accounting standards applied in the consolidated financial statements for the year ended December 31, 2024, are consistent with those used to prepare the consolidated financial statements for the year ended December 31, 2023. The Group has not early adopted any other standards, interpretations or amendments that have been issued but is not yet effective.
The Group has prepared the financial statements on the basis that it will continue to operate as a going concern.
The standards, interpretations and amendments that became effective for the financial statement beginning on January 1, 2024 or later, and which are relevant to the Group are presented below. An assessment was made that these amendments had no material impact on the Group\u2019s consolidated financial statements.
The amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures clarify the characteristics of supplier finance arrangements and require additional disclosure of such arrangements. The disclosure requirements in the amendments are intended to assist users of financial statements in understanding the effects of supplier finance arrangements on an entity\u2019s liabilities, cash flows and exposure to liquidity risk. As a result of implementing the amendments, the Group has provided additional disclosures about its supplier finance arrangement.
These amendments provide a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangements in place at the reporting date. The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current. The clarification confirmed our classification of the bridge facility as long term.
In September 2022, the IASB issued amendments to IFRS 16 to specify the requirements that a seller-lessee uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure the seller-lessee does not recognize any amount of the gain or loss that relates to the right of use it retains.
The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group\u2019s financial statements and which may have an impact on the Group are disclosed below. The Group intends to adopt these new and amended standards and interpretations, if applicable, when they become effective.
In August 2023, the IASB issued amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates to specify how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. The amendments also require disclosure of information that enables users of its financial statements to understand how the currency not being exchangeable into the other currency affects, or is expected to affect, the entity\u2019s financial performance, financial position and cash flows. The amendments will be effective for annual reporting periods beginning on or after January 1, 2025. Early adoption is permitted but will need to be disclosed. When applying the amendments, an entity cannot restate comparative information. The amendments are not expected to have a material impact on the Group\u2019s financial statements.
In April 2024, the IASB issued IFRS 18, which replaces IAS 1 Presentation of Financial Statements. IFRS 18 introduces new requirements for presentation within the statement of profit or loss, including specified totals and subtotals. Furthermore, entities are required to classify all income and expenses within the statement of profit or loss into one of five categories: operating, investing, financing, income taxes and discontinued operations, whereof the first three are new. It also requires disclosure of newly defined management-defined performance measures, subtotals of income and expenses, and includes new requirements for aggregation and disaggregation of financial information based on the identified \u2018roles\u2019 of the primary financial statements (PFS) and the notes. In addition, narrow-scope amendments have been made to IAS 7 Statement of Cash Flows, which include changing the starting point for determining cash flows from operations under the indirect method, from \u2018profit or loss\u2019 to \u2018operating profit or loss\u2019 and removing the optionality around classification of cash flows from dividends and interest. In addition, there are consequential amendments to several other standards. IFRS 18, and the amendments to the other standards, is effective for reporting periods beginning on or after January 1, 2027, but earlier application is permitted and must be disclosed. IFRS 18 will apply retrospectively. The Group is currently working to identify all impacts the amendments will have on the primary financial statements and notes to the financial statements.
On December 18, 2024, the IASB issued the amendments to help companies better report the financial effects of nature-dependent electricity contracts, which are often structured as power purchase agreements. The amendments clarify the application of the \u2018own use\u2019 requirements, permit hedge accounting if these contracts are used as hedging instruments, and add new disclosure requirements to enable investors to understand the effect of these contracts on a company\u2019s financial performance and cash flows. These amendments are required to be applied for annual reporting periods beginning on or after January 1, 2026. However, early application is permitted.
The consolidated financial statements are presented in millions of euros, which is also the functional currency of the parent company. Rounding differences may occur in respect of individual amounts or percentages.
The preparation of the consolidated financial statements requires the use of estimates and assumptions that have an impact on the application of accounting policies and the measurement of amounts recognized in the consolidated financial statements. The areas for which the estimates and assumptions are material with respect to the consolidated financial statements are presented in the section Key sources of estimation uncertainty.
This information was prepared in accordance with European Regulation (EC) 1606/2002 on the application of international accounting standards dated July 19, 2002. The Group\u2019s consolidated financial statements for the year ended December 31, 2024, were prepared in accordance with IFRS Accounting Standards as published by the International Accounting Standards Board (IASB) and endorsed by the European Union.
The accounting standards applied in the consolidated financial statements for the year ended December 31, 2024, are consistent with those used to prepare the consolidated financial statements for the year ended December 31, 2023. The Group has not early adopted any other standards, interpretations or amendments that have been issued but is not yet effective.
The Group has prepared the financial statements on the basis that it will continue to operate as a going concern.
This information was prepared in accordance with European Regulation (EC) 1606/2002 on the application of international accounting standards dated July 19, 2002. The Group\u2019s consolidated financial statements for the year ended December 31, 2024, were prepared in accordance with IFRS Accounting Standards as published by the International Accounting Standards Board (IASB) and endorsed by the European Union.
The accounting standards applied in the consolidated financial statements for the year ended December 31, 2024, are consistent with those used to prepare the consolidated financial statements for the year ended December 31, 2023. The Group has not early adopted any other standards, interpretations or amendments that have been issued but is not yet effective.
The Group has prepared the financial statements on the basis that it will continue to operate as a going concern.
The standards, interpretations and amendments that became effective for the financial statement beginning on January 1, 2024 or later, and which are relevant to the Group are presented below. An assessment was made that these amendments had no material impact on the Group\u2019s consolidated financial statements.
The amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures clarify the characteristics of supplier finance arrangements and require additional disclosure of such arrangements. The disclosure requirements in the amendments are intended to assist users of financial statements in understanding the effects of supplier finance arrangements on an entity\u2019s liabilities, cash flows and exposure to liquidity risk. As a result of implementing the amendments, the Group has provided additional disclosures about its supplier finance arrangement.
These amendments provide a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangements in place at the reporting date. The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current. The clarification confirmed our classification of the bridge facility as long term.
In September 2022, the IASB issued amendments to IFRS 16 to specify the requirements that a seller-lessee uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure the seller-lessee does not recognize any amount of the gain or loss that relates to the right of use it retains.
The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group\u2019s financial statements and which may have an impact on the Group are disclosed below. The Group intends to adopt these new and amended standards and interpretations, if applicable, when they become effective.
In August 2023, the IASB issued amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates to specify how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. The amendments also require disclosure of information that enables users of its financial statements to understand how the currency not being exchangeable into the other currency affects, or is expected to affect, the entity\u2019s financial performance, financial position and cash flows. The amendments will be effective for annual reporting periods beginning on or after January 1, 2025. Early adoption is permitted but will need to be disclosed. When applying the amendments, an entity cannot restate comparative information. The amendments are not expected to have a material impact on the Group\u2019s financial statements.
In April 2024, the IASB issued IFRS 18, which replaces IAS 1 Presentation of Financial Statements. IFRS 18 introduces new requirements for presentation within the statement of profit or loss, including specified totals and subtotals. Furthermore, entities are required to classify all income and expenses within the statement of profit or loss into one of five categories: operating, investing, financing, income taxes and discontinued operations, whereof the first three are new. It also requires disclosure of newly defined management-defined performance measures, subtotals of income and expenses, and includes new requirements for aggregation and disaggregation of financial information based on the identified \u2018roles\u2019 of the primary financial statements (PFS) and the notes. In addition, narrow-scope amendments have been made to IAS 7 Statement of Cash Flows, which include changing the starting point for determining cash flows from operations under the indirect method, from \u2018profit or loss\u2019 to \u2018operating profit or loss\u2019 and removing the optionality around classification of cash flows from dividends and interest. In addition, there are consequential amendments to several other standards. IFRS 18, and the amendments to the other standards, is effective for reporting periods beginning on or after January 1, 2027, but earlier application is permitted and must be disclosed. IFRS 18 will apply retrospectively. The Group is currently working to identify all impacts the amendments will have on the primary financial statements and notes to the financial statements.
On December 18, 2024, the IASB issued the amendments to help companies better report the financial effects of nature-dependent electricity contracts, which are often structured as power purchase agreements. The amendments clarify the application of the \u2018own use\u2019 requirements, permit hedge accounting if these contracts are used as hedging instruments, and add new disclosure requirements to enable investors to understand the effect of these contracts on a company\u2019s financial performance and cash flows. These amendments are required to be applied for annual reporting periods beginning on or after January 1, 2026. However, early application is permitted.
The consolidated financial statements are presented in millions of euros, which is also the functional currency of the parent company. Rounding differences may occur in respect of individual amounts or percentages.
The preparation of the consolidated financial statements requires the use of estimates and assumptions that have an impact on the application of accounting policies and the measurement of amounts recognized in the consolidated financial statements. The areas for which the estimates and assumptions are material with respect to the consolidated financial statements are presented in the section Key sources of estimation uncertainty.
The consolidated financial statements incorporate the financial statements of the Company, and:
hentities controlled by the Company (including through its subsidiaries) and that hence qualify as subsidiaries;
harrangements over which the Company (including through its subsidiaries) exercises joint control, and that qualify as joint operations;
harrangements over which the Company (including through its subsidiaries) exercises joint control, and that qualify as joint ventures;
hentities over which the Company (including through its subsidiaries) has significant influence and that hence qualify as associates.
Where necessary, adjustments are made to the financial statements of the investees so as to align their accounting policies with those of the Group.
In accordance with the principle of materiality, certain companies, which are not of a significant size, have not been included in the consolidation scope. Companies are deemed not to be significant when, during two consecutive years, they do not exceed any of the three following thresholds in terms of their contribution to the Group\u2019s accounts:
hsales of \u20ac18 million;
htotal assets of \u20ac11 million;
hheadcount of 100 persons.
Companies that do not meet these criteria are, nevertheless, consolidated where the Group believes that they have a potential for rapid development, or where they hold shares in other companies that are consolidated based on the above criteria.
In the aggregate, the non-consolidated companies have an immaterial impact on the consolidated financial statements of the Group.
In 2024, the above thresholds were updated to reflect the new size of the group following the Partial Demerger. There was no change in the consolidation scope resulting from the change in thresholds.
The full list of companies can be obtained at the Company\u2019s head office.
A subsidiary is an entity over which the Group has control. Control is achieved when the Group has (a) power over an investee, (b) exposure, or rights, to variable returns from its involvement with the investee, and (c) the ability to use its power over the investee to affect the amount of the investor\u2019s returns. To assess whether the Group has control, potential voting rights are taken into account. Subsidiaries are fully consolidated. The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition and up to the effective date of disposal.
Intra-group transactions, balances, income and expenses are eliminated on consolidation.
Non-controlling interests in subsidiaries are presented separately from the Group\u2019s equity. Non-controlling interests are initially measured, either at fair value (full goodwill method), or at the non-controlling interests\u2019 proportionate share in the recognized amounts of the acquiree\u2019s identifiable net assets (proportionate goodwill method). The choice of measurement is made on an acquisition-by-acquisition basis. Subsequent to the acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests\u2019 share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.
Changes in the Group\u2019s equity interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The carrying amounts of the Group\u2019s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.
When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest, and (ii) the previous carrying amount of the assets (including goodwill) and liabilities of the subsidiary and any non-controlling interests. Amounts previously recognized in other comprehensive income in relation to the subsidiary are accounted for (i.e.\u00a0Reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be required if the relevant assets or liabilities were disposed of. The fair value of any investment retained in the former subsidiary at the date when control is lost is considered to be the fair value on initial recognition for subsequent accounting in accordance with IFRS 9 or, when applicable, the cost on initial recognition of an investment in an associate or joint venture in accordance with IAS 28 Investments in Associates and Joint Ventures.
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about relevant activities require the unanimous consent of the parties sharing control. In its consolidated financial statements, the Group recognizes its contractual share of the joint operations\u2019 assets, liabilities, revenue and expenses, which is generally aligned with the ownership interest in the joint operations.
An associate is an entity over which the Group has significant influence and that is neither a subsidiary, nor an interest in a joint arrangement. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about relevant activities require the unanimous consent of the parties sharing control.
The results, assets and liabilities of associates and joint ventures are incorporated in the consolidated financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Under the equity method, on initial recognition, investments in associates and joint ventures are recognized in the consolidated statement of financial position at cost, and the carrying amount is adjusted for post-acquisition changes in the Group\u2019s share of the net assets of the associate or joint venture, less any impairment of the value of individual investments. Losses of an associate or joint venture in excess of the Group\u2019s interest in that associate or joint venture (which includes any long-term interests that, in substance, form part of the Group\u2019s net investment in the associate or joint venture) are recognized only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture.
Any excess of the cost of acquisition over the Group\u2019s share of the net fair value of the identifiable assets and (contingent) liabilities of the associate or joint venture recognized at the date of acquisition is goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of that\u00a0investment.
Where a Group entity transacts with an associate or joint venture of the Group, profits and losses are eliminated to the extent of the Group\u2019s interest in the relevant associate or joint venture.
After application of the equity method, the Group reviews its investments in associates and joint ventures for impairment. At each reporting date, the Group determines whether there is objective evidence that the investment in the associate or joint venture is impaired. If there is such evidence, the Group performs its analysis and calculates any impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value, and then recognizes the loss in the consolidated income statement.
The individual financial statements of each Group entity are prepared in the currency of the primary economic environment in which this Group entity operates (its functional currency). For the purpose of preparing the consolidated financial statements, the results and financial position of each Group entity are expressed in euros (EUR), which is the presentation currency of the Group\u2019s consolidated financial statements.
In preparing the financial statements of the individual entities, transactions in currencies other than the entities\u2019 functional currency are recognized at the exchange rates prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the closing rate. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rate when the fair value was measured. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the date of the initial transactions.
Exchange differences are recognized in profit or loss in the period in which they arise except for:
hexchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur in the foreseeable future (therefore forming part of the net investment in the foreign operation), which are recognized initially in other comprehensive income under \u201ccurrency translation differences;\u201d and
hexchange differences on transactions entered into in order to hedge certain foreign currency risks (see note F32 Financial instruments and financial risk management for hedge accounting policies).
The main exchange rates used are:
| \n 1 Euro = | \n\n \n | \n\n Year-end rate | \n\n Average rate | \n||
|---|---|---|---|---|---|
| \n December 31, 2024 | \n\n December 31, 2023 | \n\n 2024 | \n\n 2023 | \n||
| \n Brazilian Real | \n\n BRL | \n\n 6.4210 | \n\n 5.3612 | \n\n 5.8244 | \n\n 5.4010 | \n
| \n Yuan Renminbi | \n\n CNY | \n\n 7.5865 | \n\n 7.8383 | \n\n 7.7878 | \n\n 7.6608 | \n
| \n Pound Sterling | \n\n GBP | \n\n 0.8295 | \n\n 0.8690 | \n\n 0.8467 | \n\n 0.8698 | \n
| \n Indian Rupee | \n\n INR | \n\n 88.9827 | \n\n 91.9678 | \n\n 90.5498 | \n\n 89.3107 | \n
| \n Japanese Yen | \n\n JPY | \n\n 163.0481 | \n\n 156.3416 | \n\n 163.8445 | \n\n 151.9821 | \n
| \n Korean Won | \n\n KRW | \n\n 1,530.0792 | \n\n 1,423.3871 | \n\n 1,474.9032 | \n\n 1,412.4780 | \n
| \n Mexican Peso | \n\n MXN | \n\n 21.5452 | \n\n 18.7359 | \n\n 19.8164 | \n\n 19.1854 | \n
| \n US Dollar | \n\n USD | \n\n 1.0394 | \n\n 1.1052 | \n\n 1.0823 | \n\n 1.0813 | \n
In preparing the consolidated financial statements, management has considered the impacts of climate change, particularly in the context of the disclosures included in the Risk Report and Sustainability Statements. Solvay\u2019s target is to become carbon neutral on GHG scope 1 and 2 emissions by 2050, and to reduce our scope 1 and 2 emissions by 30% and our scope 3 focus 5 categories emissions by 20% by 2030 vs. our 2021 baseline.
We are expecting to invest \u20ac30 million to \u20ac35 million per year toward Solvay\u2019s transition plan until 2030 and approximately \u20ac50 million per year in the following decade.
The Group\u2019s investments in this area are partially supported by external parties through equity-accounted investments and include non-recourse financing, government subsidies and tax credits, enabling Solvay to remain competitive. Further studies on technology innovation through our Star Factory program will determine the future investment needs beyond 2040.
Since 2015 the Group has adopted an internal carbon price and it has imputed that as an input cost into all investment decisions, irrespective of prevailing market prices. The Group has utilized a cost of \u20ac100 per ton since 2022. The profitability of all investment projects also factors in an internal price for water in order to assess the projects including the negative externalities or potential future water cost. Different prices of water have been defined depending on hydric stress and water usage and quality (cooling water vs process water). This approach ensures that all investments contribute positively to the resilience of the Group in the face of climate change risk and are oriented toward achieving carbon neutrality and reducing freshwater withdrawal in locations identified as water scarce.
In addition to the strategic direction, policies and commitments, it is important to note that Solvay is taking concrete actions aligned with its climate change commitments. These are extensively developed in the Sustainability Statements. As a demonstration of the Group's commitment to the reduction of its GHG scope 1 and 2 emissions by 30% by 2030, several investment projects were initiated or completed as of December 31, 2024.
hGreen River, Wyoming, USA - Solvay incurred capital expenditures to switch its coal boilers to natural gas in March 2024. From that date, Solvay has fully phased out coal in the US. Solvay also invested in a new breakthrough technology project that abates greenhouse gas emissions originating from Trona mining operations, and which was commissioned in October 2024. This makes Solvay the first company to implement regenerative thermal oxidation technology to cut emissions from a trona mine.
hRheinberg, Germany - The construction of two waste-wood boilers accounted for as finance leases; the first of the two boilers was commissioned in 2021 with the second boiler commissioned in November 2024. Solvay has now fully phased out coal in Germany.
hDombasle, France - An equity investment in a cogeneration unit running on refuse-derived fuel in Dombasle Energie, France, of which Solvay has a 10% share. The project is largely financed through non-recourse debt executed in February 2022 and government subsidies. The project is expected to be fully deployed by the end of 2025.
Solvay also committed to several other investments to continue reducing its carbon footprint. See Note E1-1 of the Sustainability statements.
When such investments are made, the Group verifies the useful life of the assets that are replaced and adjusts the estimated useful life if necessary. The Group is also actively working on sourcing its energy needs from more environmentally friendly resources including long-term renewable energy generation solutions both onsite and offsite at certain facilities. These include long-term solar and wind power purchase agreements generally accounted for as executory own use contracts.
In 2024, with 8.3% of renewable sources in total energy consumption, Solvay has improved by around 21.4% since 2021.
In addition, the Star Factory program embeds the design and execution of the ESG roadmap of each industrial site including a specific effort on energy efficiency initiatives on the top of Energy transition projects.
Management has also considered the impact of climate change in making some key estimates within the consolidated financial statements, including the execution of the Solvay Sustainability strategy, which is included in the budgets, mid-term plan and long-term forecasts, which are used to:
hestimate future cash flows used in impairment assessments of the carrying value of non-current assets (such as intangible assets and goodwill) (see Note F23 Impairment)\u00a0;
hestimate future profitability used in the assessment of the recoverability of deferred tax assets (see Note F7.C. Deferred taxes in the consolidated statement of financial position);
hestimate provisions (see Note F31);
hestimate the long-term accounting assumptions, including CO2 emission rights and energy prices for the energy intensive Soda Ash GBU (see Note F23 Impairment).
The Group\u2019s CO2 emission rights and energy prices (gas/electricity/coal) are an important element of the cost structure, especially for the Soda Ash business. The Group has hedged a portion of its expected use through 2030. The hedges were taken into consideration in the goodwill impairment test performed and the long-term assumptions considered the higher capital expenditure required by the energy transition of the business after the hedged period. Considering the significant headroom on the Soda Ash CGU, no sensitivity is provided. See Note F23 Impairment.
The same exercise was done for the other cash generating units and management believes there are no realistic scenarios regarding climate change today, which would lead to an impairment of these assets. In summary, the Group\u2019s climate change considerations mentioned above did not have a material impact on the financial reporting judgments and estimates during the year. Further, the Group concludes that the climate change risk does not impact the going concern assessment for December 2024.
Moreover, in 2024, while confirming its mid-term targets, the Group considered the results of changes in legislation and economic circumstances which required Solvay to reassess its forecasts of CO2 emissions used in its hedging documentation.\u00a0The reassessment resulted in the discontinuation of certain hedging relationships. Further details are available in Note 4 Other operating gains and losses and Note F32.D Other market risks.
The Group performs annual impairment tests on (groups of) CGUs to which goodwill has been allocated, and each time there are indicators that their carrying amount might be higher than their recoverable amount. This analysis requires management to estimate the future cash flows expected to be generated by the CGUs and a suitable discount rate in order to calculate present value. The recoverable amount is highly sensitive to discount and growth rates.
Further details are provided in note F19 Goodwill and Business Combinations and F23 Impairment.
Deferred tax assets (DTA) are recognized for unused tax losses to the extent that it is probable that taxable profits will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits.
The Group has \u20ac706 million (2023: \u20ac685 million) of tax losses carried forward for which no deferred tax assets were recognized. These losses relate to subsidiaries that have a history of losses, do not expire, and may not be used to offset taxable income elsewhere in the Group. The subsidiaries do not have any taxable temporary differences that could partly support the recognition of these losses as deferred tax assets. On this basis, the Group has determined that it cannot recognize deferred tax assets on these tax losses carried forward.
The goals referred to in the Climate Change Considerations note may have an impact on the estimate of future probability used in the DTA recoverability assessment \u2013 see the note, above.
Further details are provided in Note F7 Income Taxes.
The actuarial assumptions used in determining the defined benefit obligations at December 31 as well as the annual cost can be found in note F30 Provisions for employee benefits. All main employee benefits plans are assessed annually by independent actuaries. Discount rates and inflation rates are defined centrally by management. The other assumptions (such as future salary increases and expected rates of medical care cost increases) are defined at a local level. All plans are supervised by the Group\u2019s central Human Resources department with the help of a central actuary to check the reasonableness of the results and ensure consistency in reporting. All assumptions are reviewed at each reporting date.
Further details are provided in note F30 Employee benefits.
Environmental provisions are managed and coordinated jointly by the Environmental Rehabilitation department and the Finance department. In case of environmental impacts stemming from historical production activities, generally, no provision is recognized for remediation works beyond the 20 years due to the inherent high level of uncertainty as to the timing and amount.
The forecasts of expenses are discounted to their present value. The discount rates fixed by geographical area correspond to the average risk-free rate on 10-year government bonds or the inflation rate if higher. These rates are set annually by the Finance department and can be revised based on the evolution of economic parameters of the country involved. To reflect the passage of time, the provisions are increased each year at the discount rates described above.
Further details are provided in note F31 Provisions.
Any significant litigations (post M&A and other, including threat of litigation) are reviewed by Solvay\u2019s in-house lawyers with the support, when appropriate, of external counsels at least every quarter together with the Finance and Insurance Departments. This review includes an assessment of the need to recognize provisions and/or disclose contingent liabilities.
Further details are provided in note F31 Provisions and F36 Contingent liabilities and financial guarantees.
The Group enters into various contracts to obtain goods and services. Determining whether those contracts include a lease requires judgment. Elements that are considered include assessing whether or not there is an identified asset. To make the determination the Group considers whether or not it has the right to obtain substantially all of the economic benefit of the asset(s) throughout the period of use. Additionally, the Group assesses the extent of its decision-making rights and the existence of any substantive substitution rights. All facts and circumstances relevant to the assessment are considered and the identification of a lease is determined with the support of the departments that have the relevant knowledge, and which mainly includes the GBU management. Refer to note F21 Right-of-use assets and lease obligations for the leases that were identified by the Group and accounted for in accordance with IFRS 16 Leases.
Determining the lease term requires judgment. Elements that are considered include assessing the probability that early termination options or extension options will be exercised. All facts and circumstances relevant to the assessment are considered, and the main ones have been described in note F21 Right-of-use assets and lease obligations. Lease terms are determined with the support of the departments that have the relevant knowledge, and that mainly includes the Purchasing department, and the Facilities department.
To comply with its environmental obligations, Solvay initiated a range of projects intended to limit the emission of Carbon Dioxide (see the note Climate Change Considerations). Some of these projects intend to provide the energy to Solvay production sites. These projects require assessment to determine if they contain lease arrangements (IFRS 16), qualify for the 'own use' exemption (IFRS 9), or contain material embedded derivatives (IFRS 9). This requires material judgment and introduces estimation uncertainty.
Solvay hedges its risk related to the emission of carbon dioxide in the European Union, for the entire period of EU ETS phase 4 i.e. until the end of year 2030. Solvay applies Cash Flow hedge accounting to a range of instruments to minimize the exposure risk, and to determine the future cost related to the obligatory redemption of the allowances. However, the volume of future CO2 emission and the future free allowances granted by the EU state must be estimated, which introduces estimation uncertainty risk. Furthermore, because of the insufficient liquidity of EUA market regarding later years of the hedged period, Solvay decided to roll the existing instruments until they reach the desired delivery date. This introduces further cost estimation and allocation uncertainty.
See also the disclosure on Utility and CO2 price risks, in Note F32.D Financial Risk Management.
No critical accounting judgements have been identified for the year ended December 31, 2024.
The following critical accounting judgment has been identified for the year ended December 31, 2023.
On March 15, 2022, the Group announced its plan to separate into two independent publicly traded companies. On December 9, 2023, the separation was effectuated through the means of the Partial Demerger. The Specialty Businesses were classified as discontinued operations following the approval of Partial Demerger by the shareholders and the net assets were distributed. Solvay applied IFRIC 17 Distribution of Non-cash-Assets to Owners to determine how to present the Partial Demerger which included estimating the fair value of the distribution.\u00a0Solvay estimated the fair value of Syensqo by taking an average of the closing price of the first 30 days of trading activity of Syensqo to prevent distortions from short-term trading activity in the first weeks of trading. This being a fair value with observable inputs and was considered to be representative of the fair value at the distribution date.
The fair value was determined to be \u20ac 9.5 billion which resulted in a gain of \u20ac 1.65 billion over the then carrying amount of the net assets. The impact was recorded to the consolidated income statement in discontinued operations.
In addition to IFRS accounts, Solvay also presents alternative performance indicators to provide a more consistent and comparable indication of the Group\u2019s underlying financial performance and financial position, as well as cash flows. These indicators provide a balanced view of the Group\u2019s operations and are considered useful to investors, analysts and credit rating agencies as these measures provide relevant information on the Group\u2019s past or future performance, position or cash flows. These indicators are generally used in the sector it operates in and therefore serve as a useful aid for investors to compare the Group\u2019s performance with its peers.
See note F1 Revenue and Segment Information for the reconciliation of the underlying EBITDA measure. Further information on definitions of adjustments (IFRS vs Underlying metrics) can be found in Glossary, and more information about reconciliation of non-IFRS (underlying) metrics with IFRS figures in Business Performance.
Notes to the consolidated income\u00a0statement
Consistent with the presentation in the consolidated income statement, the notes to the consolidated income statement as presented hereafter do not include the consolidated income statement impacts from discontinued operations that are presented on a separate line. The impact of discontinued operations only relates to\u00a02023. Those are disclosed in note F8 Discontinued operations.
NOTE F1
Revenue and segment information
fAccounting policy
IFRS 15 establishes a five-step model to account for revenue arising from contracts with customers:
\u2022Identify the contract,
\u2022Identify the performance obligations,
\u2022Determine the transaction price,
\u2022Allocate the transaction price to the performance obligations in the contract, and
\u2022Recognize revenue when or as the Group satisfies a performance obligation.
Under IFRS 15, revenue is recognized at an amount that reflects the consideration to which the Group expects to be entitled in exchange for transferring goods or services to a customer.
Sale of goods: Contracts can be short term (including based only on a purchase order) or long term, some have minimum off-take requirements. Contracts that contain take-or-pay provisions obligate customers to pay shortfall payments if the required volumes, as defined in the contracts, are not purchased. Shortfall payments are recognized as revenues when the likelihood of the customer purchasing the minimum volume becomes remote subject to renegotiation of the contract and collectability. As the Group is in the business of selling essential chemicals, and performance chemicals, contracts with customers generally concern the sale of goods. As a result, revenue recognition generally occurs at a point in time when control of the chemicals is transferred to the customer, generally on delivery of the goods.
Distinct elements: a good or service that is promised to a customer is distinct if both of the following criteria are met: (a) the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e. The good or service is capable of being distinct); and (b) the Group\u2019s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e. The promise to transfer the good or service is distinct within the context of the contract).
The revenue of the Group consists mainly of sales of chemicals, which qualify as separate performance obligations. Value-added services \u2013 mainly customer assistance services \u2013 corresponding to Solvay\u2019s know-how are rendered predominantly over the period that the corresponding goods are sold to the customer.
Variable consideration: some contracts with customers provide trade discounts or volume rebates. Trade discounts and volume rebates give rise to variable consideration under IFRS 15 and are required to be estimated at contract inception and subsequently at each reporting date. IFRS 15 requires the estimated variable consideration to be constrained to prevent overstatement of revenue.
Moment of recognition of revenue: revenue is recognized when (or as) the Group satisfies a performance obligation by transferring a promised good or service (i.e. an asset) to a customer. An asset is transferred when (or as) the customer obtains control of that asset. Substantially all revenue stems from performance obligations satisfied at a point in time, i.e. The sale of goods. Revenue recognition for those takes into account the following:
\u2022The Group has a present right to payment for the asset;
\u2022The customer has legal title to the asset;
\u2022The Group has transferred physical possession of the asset;
\u2022The customer has the significant risks and rewards of ownership of the asset (in this respect, incoterms are considered); and
\u2022The customer has accepted the asset.
Products sold to customers generally cannot be returned, other than for performance deficiencies. Customer acceptance clauses are in many cases a formality that would not affect the Group\u2019s determination of when the customer has obtained control of the goods. Revenue from services is recognized in the period those services have been rendered.
The Group sells its products to its customers, (a) directly, (b) through distributors, and (c) with the assistance of agents. When the Group delivers a product to distributors for sale to end customers, the Group evaluates whether that distributor has obtained control of the product at that point in time. No revenue is recognized upon delivery of a product to a customer or distributor if the delivered product is held on consignment. Indicators of consignment inventory include:
\u2022The product is controlled by the Group until a specified event occurs, such as the sale of the product to a customer of the distributor or until a specified period expires;
\u2022The Group is able to require the return of the product or transfer the product to a third party (such as another distributor); and
\u2022The distributor does not have an unconditional obligation to pay for the product (although they might be required to pay a deposit).
\u2022Agents facilitate sales and do not purchase and resell the goods to the end customer.
Warranties: warranties provide a customer with assurance that the related product will function as the parties intended because it complies with agreed-upon specifications. Substantially all warranties do not provide the customer with a service in addition to the assurance that the product complies with agreed-upon specifications and are hence accounted for in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
Licensing: In case of performance obligations relating to licensing intellectual property (IP), the Group assesses if it grants a right to access the IP as it exists throughout the license period or a right to use the IP as it exists at the point in time at which the license is granted. If the performance obligation is to grant a right to access, then the related revenue is recognized over the license period; otherwise, it is recognized at a point in time, i.e. when the license period starts or when the customer starts using the IP. The Group assesses if the license provided can be considered as being distinct in the context of the contract. If not, the license will have to be bundled with other goods or services provided in the contract. Currently the Group grants a right to use IP, which means that revenue recognition occurs at a point in time.
An Operating Segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the entity\u2019s chief operating decision maker and for which discrete financial information is available.
NOTE F5
Results from portfolio management and\u00a0major restructurings, legacy\u00a0remediation and\u00a0major litigations
fAccounting policy
Results from portfolio management and major restructurings include:
\u2022gains and losses on the sale of subsidiaries, joint operations, joint ventures, and associates that do not qualify as discontinued operations;
\u2022acquisition costs of new businesses;
\u2022one-off operating costs related to internal management of portfolio (carve-out of major lines of businesses);
\u2022gains and losses on the sale of real estate not directly linked to an operating activity;
\u2022restructuring charges driven by portfolio management and by major reorganizations of business activities, including impairment losses resulting from the shutdown of an activity or a plant;
\u2022impairment losses (reversals) resulting from testing of CGUs.
\u2022It excludes non-cash accounting impact from amortization and depreciation resulting from the purchase price allocation (PPA) from acquisitions
Results from legacy remediation and major litigations include:
\u2022the remediation costs not generated by on-going production facilities (shutdown of sites, discontinued productions, previous years\u2019 pollution); and the impact of significant litigations.
NOTE F6
Net financial charges
fAccounting policy
Interest on borrowings is recognized in costs of borrowings as incurred, except for borrowing costs directly attributable to the acquisition, construction and production of qualifying assets (see note F20 Property, Plant and Equipment).
Net foreign exchange gains or losses on financial items and changes in fair value of derivative financial instruments related to net indebtedness are presented in \u201cOther gains and losses on net indebtedness,\u201d with the exception of changes in fair value of derivative financial instruments that are hedging instruments in a cash flow hedge relationship, and which are recognized on the same line as the hedged item, when the latter affects profit or loss.
NOTE F7
Income taxes in the income statement and\u00a0the statement of\u00a0financial\u00a0position
fAccounting policy
Current taxes
The current tax payable is based on taxable profit of the year. Taxable profit differs from profit as reported in the consolidated income statement because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group\u2019s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred taxes
Deferred taxes are recognized for temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and their corresponding tax bases used in the computation of taxable profit.
Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.
Deferred tax liabilities are generally recognized for all taxable temporary differences.
No deferred tax liabilities are recognized following the initial recognition of goodwill. In addition, no deferred tax assets or liabilities are recognized with respect to the initial recognition of an asset or liability in a transaction which is not a business combination and affects neither accounting profit nor taxable profit.
Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, joint operations, joint ventures, and associates, except where the Group can control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax assets other than tax loss carryforwards are analyzed on a case-by-case basis, considering all relevant facts and circumstances. For example, a zero taxable profit, after deducting the amounts paid to retirees under a defined benefit plan and for which a deductible temporary difference existed, can justify the recognition of the underlying deferred tax assets. Recognition of deferred tax assets for tax loss carryforwards requires a positive taxable profit during the year that enables the utilization of tax losses that originated in the past. Because of uncertainties inherent to predicting such positive taxable profit, recognition of deferred tax assets from tax loss carryforwards is based on a case-by-case analysis, which is usually based on five-year profit forecasts, except with respect to any financial company for which ten-year financial profit forecasts are considered highly predictable and are consequently used.
The corporate tax reporting team, which monitors the Group deferred tax positions, is involved in assessing deferred tax assets.
Further details are provided in note F7.C.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled, or the asset is realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the way the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Current tax assets and liabilities are offset when there is a legally enforceable right to set off the recognized amounts and when the Group intends to settle its current tax assets and liabilities on a net basis.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
Current and deferred taxes for the period
Current and deferred taxes for the period are recognized as an expense or income in profit or loss, except when they relate to items that are recognized outside profit or loss (whether in other comprehensive income or directly in equity), in which case the tax is also recognized outside profit or loss, or when they arise from the initial accounting for a business combination. In the case of a business combination, the tax effect is considered in the accounting for the business combination.
Exception to the above, as from January 1, 2019, the Group applies the amendments to IAS 12, that apply to the income tax consequences of dividends recognized on or after the beginning of the earliest comparative period, i.e. January 1, 2018. In 2018, the income tax consequences of the coupons on perpetual hybrid bonds classified as equity were recognized in equity. As a result of the adoption of the amendment, those income tax consequences are now recognized in profit or loss.
NOTE F8
Discontinued operations and\u00a0Partial Demerger
fAccounting policy
A discontinued operation is a component of the Group which the Group has disposed of, or which is classified as held for sale, and which:
\u2022represents a separate major line of business or geographical area of operations;
\u2022is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or
\u2022is a subsidiary acquired exclusively with a view to resale.
A component of the Group consists of operations and cash flows, which can be clearly distinguished operationally and for financial reporting purposes, from the rest of the Group.
In the consolidated statement of comprehensive income, the consolidated statement of cash flows, and disclosures, discontinued operations are restated for prior periods presented.
In accordance with IFRIC 17 Distribution of Non-cash Assets to Owners, and IFRS 10 Consolidated Financial Statements \u2013 chapter on loss of control \u2013 Solvay measures the profit on distribution in the form of demerger as the excess amount of the fair value of the distributed net assets over the then-carrying value of the net assets of the distributed businesses, adjusted for the related NCI.
The recognition of the fair value of the distributed net assets may require the use of valuation techniques. Solvay uses the observable values as input for such valuation techniques.
Solvay applies IFRS 5 requirements after intercompany elimination.
NOTE F9
Earnings per share
fAccounting policy
The basic earnings per share are obtained by dividing profit for the year by the weighted average number of ordinary shares outstanding during the reporting period. The weighted average number of ordinary shares excludes the treasury shares held by the Group over the reporting period.
The diluted earnings per share are obtained by dividing profit for the year, adjusted for the effects of dilutive potential ordinary shares, by the weighted average number of ordinary shares, also adjusted by the number of dilutive potential ordinary shares attached to the issuance of share options.
The number of dilutive potential ordinary shares is calculated for the weighted average number of share options outstanding during the reporting period as the difference between the average market price of ordinary shares during the reporting period and the exercise price of the share option. Share options have a dilutive effect only when the average market price is above the exercise price (share options are \u201cin the money\u201d).
For the purpose of calculating diluted earnings per share, there were no adjusting elements to the profit for the year (Solvay share).
Basic and diluted amounts per share for discontinued operations are presented in the consolidated income statement.
NOTE F10
Consolidated statement of\u00a0comprehensive income
fAccounting policy
In accordance with IAS 1 Presentation of Financial Statements, the Group elected to present two statements, i.e. a consolidated income statement immediately followed by a consolidated statement of comprehensive income.
The components of other comprehensive income (OCI) are presented before related tax effects with one amount shown for the aggregate amount of income tax relating to those components. Tax impacts are further disclosed in this note.
fAccounting policy
For the purpose of presenting consolidated financial statements at the end of each reporting period, the assets and liabilities of the Group\u2019s foreign operations are expressed in euros using closing rates. Income and expense items are translated at the average exchange rates for the period except when the impact of applying the average rate is materially different from applying the spot rate at the respective transactions\u2019 dates, in which case the latter is applied. Exchange differences arising, if any, are recognized in other comprehensive income as \u201ccurrency translation differences\u201d.
Currency translation differences are reclassified from equity to profit or loss, on:
A disposal of the Group\u2019s entire interest in a foreign operation. In this case, all of the accumulated exchange differences in respect of that operation attributable to the Group are reclassified to profit or loss. Any exchange differences that have previously been attributed to non-controlling interests are derecognized, but they are not reclassified to profit or loss.
NOTE F18
Intangible assets
fAccounting policy
An intangible asset is an identifiable non-monetary asset without physical substance. It is identifiable when it is separable, i.e. Is capable of being separated or divided from the Group, or when it arises from contractual or other legal rights. An intangible asset shall be recognized if, and only if:
(a)it is probable that the expected future economic benefits that are attributable to the asset will flow to the Group; and
(b)the cost of the asset can be measured reliably.
Intangible assets acquired or developed internally are initially measured at cost. The cost of an acquired intangible asset comprises its purchase price, import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, and any directly attributable cost of preparing the asset for its intended use. Subsequent expenditure on intangible assets is capitalized only if it is probable that it will increase the future economic benefits associated with the specific asset. Other expenditure is expensed as incurred.
After initial recognition, intangible assets are measured at cost less accumulated amortization and impairment losses, if any.
Intangible assets are amortized on a straight-line basis over their estimated useful lives, which do not exceed the contractual period, if any. The estimated useful lives, residual values and amortization methods are reviewed at each year-end, and any changes in estimates are accounted for prospectively.
| \n Patents and trademarks | \n\n 2-20 | \n\n years | \n
|---|---|---|
| \n Software | \n\n 3-5 | \n\n years | \n
| \n Development expenditures | \n\n 2-5 | \n\n years | \n
| \n Customer relationships | \n\n 5-29 | \n\n years | \n
| \n Other intangible assets - Technologies | \n\n 5-20 | \n\n years | \n
Amortization expense is included in the consolidated income statement within the cost of goods sold, administrative costs, research and development costs and other operating gains and losses.
The asset is tested for impairment if (a) there is a trigger for impairment, and (b) annually for projects under development (see note F23 Impairment).
Intangible assets are derecognized from the consolidated statement of financial position on disposal or when no future economic benefits are expected from their use or disposal. The gain or loss arising from derecognition of an intangible asset is recognized in profit or loss at the moment of derecognition.
Research and development costs
Research costs are expensed in the period in which they are incurred.
Development costs are capitalized if, and only if, all the following conditions are fulfilled:
\u2022the cost of the asset can be reliably measured;
\u2022the technical feasibility of the product has been demonstrated;
\u2022the product or process will be placed on the market or used internally;
\u2022the assets will generate future economic benefits (a potential market exists for the product or, where it is to be used internally, its future utility has been demonstrated);
\u2022the technical, financial and other resources required to complete the project are available.
Development costs comprise employee expenses, the cost of materials and services directly attributable to the projects, and an appropriate share of directly attributable fixed costs including, and where applicable, borrowing costs. The intangible assets are amortized as from the moment they are available for use, i.e. When they are in the location and condition necessary for them to be capable of operating in the manner intended by management. Development costs, which do not satisfy the above conditions are expensed as incurred.
Patents, trademarks and customer relationships
Those intangible assets have mainly been acquired through business combinations. Customer relationships consist of customer lists.
Other intangible assets
Other intangible assets mainly include technology acquired separately or in a business combination.
NOTE F19
Goodwill and business combinations
fAccounting policy
Goodwill
Goodwill arising in a business combination is recognized as an asset at the date that control is obtained (the acquisition date). Goodwill is measured as the excess of the sum of:
(a)the consideration transferred
(b)the amount of any non-controlling interests in the acquiree; and
(c)in a business combination achieved in stages, the acquisition-date fair value of the previously held equity interest in the acquiree, over the share acquired by the Group in the fair value of the entity\u2019s identifiable net assets at the acquisition date.
Goodwill is not amortized but is tested for impairment on an annual basis, and more frequently if there are any impairment triggers identified.
For impairment testing, goodwill is allocated to each of the Group\u2019s cash-generating units (or groups of cash-generating units) in accordance with IAS 36 Impairment of Assets.
A cash-generating unit (CGU) is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other group(s) of assets.
These tests consist of comparing the carrying amount of the assets or (groups of) CGUs with their recoverable amount. The recoverable amount of an asset or a (group of) CGU(s) is the higher of its fair value less costs to sell and its value in use. If the recoverable amount of the CGU is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognized on goodwill shall not be reversed in a subsequent period.
Assets held for sale include their related goodwill.
On disposal of an operation within a CGU to which goodwill has been allocated, the goodwill associated with the operation disposed of is included in the determination of the profit or loss on disposal. It is measured based on the relative values of the operation disposed of and the portion of the CGU retained, unless another method better reflects the goodwill associated with the operation disposed of.
NOTE F20
Property, plant and equipment
fAccounting policy
General
Property, plant and equipment are tangible items that:
\u2022are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and
\u2022are expected to be used during more than one period.
The items of property, plant and equipment owned by the Group are recognized as property, plant and equipment when the following conditions are satisfied:
\u2022it is probable that the future economic benefits associated with the asset will flow to the Group;
\u2022the cost of the asset can be measured reliably.
Items of property, plant and equipment are initially measured at cost. The cost of an item of property, plant and equipment comprises its purchase price and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. If applicable, the cost comprises borrowing costs during the construction period.
After initial recognition, items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses, if any.
Items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives. The components of an item of property, plant and equipment with different useful lives are depreciated separately. Land is not depreciated. The estimated useful lives, residual values and depreciation methods are reviewed at each year end, also considering the potential impact of climate change including the execution of the Solvay's sustainability strategy (see Note on Climate Change Considerations in the IFRS general accounting policies). Any changes in estimates are accounted for prospectively.
| \n Within Land and buildings group | \n\n \n | \n\n \n | \n
|---|---|---|
| \n Buildings | \n\n 30-40 | \n\n years | \n
| \n Within Fixtures and equipment group | \n\n \n | \n\n \n | \n
| \n IT equipment | \n\n 3-5 | \n\n years | \n
| \n Machinery and equipment | \n\n 10-20 | \n\n years | \n
| \n Transportation equipment | \n\n 5-20 | \n\n years | \n
Depreciation expense is included in the consolidated income statement within cost of goods sold, administrative costs, and R&D costs.
The asset is tested for impairment if there is a trigger for impairment (see note F23 Impairment).
Items of property, plant and equipment are derecognized from the consolidated statement of financial position on disposal or when no future economic benefits are expected from their use or disposal. The gain or loss which arises from derecognition of an item of property, plant and equipment is recognized in profit or loss at the moment of derecognition.
Subsequent expenditure
Subsequent expenditure related to items of property, plant and equipment is capitalized only if it is probable that it will increase the future economic benefits associated with the specific asset. Other expenditure is expensed as incurred. Subsequent expenditure incurred for the replacement of a component of an item of property, plant and equipment is only recognized as an asset when it satisfies the recognition criteria mentioned above. The carrying amount of replaced items is derecognized.
Repair and maintenance costs are recognized in the consolidated income statement as incurred.
Regarding its industrial activity, Solvay incurs expenditure for major repairs over several years for most of its sites. The purpose of this expenditure is to maintain the proper working order of certain installations without altering their useful life. This expenditure is considered as a specific component of the item of property, plant and equipment and is depreciated over the period during which the economic benefits are expected to be obtained, i.e. the major repairs\u2019 intervals.
Dismantling and restoration costs
Dismantling and restoration costs are included in the cost of an item of property, plant and equipment if the Group has a legal or constructive obligation to dismantle or restore. They are depreciated over the useful life of the items to which they pertain.
Generally, Solvay\u2019s obligation to dismantle and/or restore its operating sites is only likely to arise upon the discontinuation of a site\u2019s activities. A provision for dismantling of discontinued sites or installations is recognized when there is a legal obligation (due to a request or injunction from the relevant authorities), or when there is no technical alternative than to dismantle, to ensure the safety compliance of the discontinued sites or installations.
NOTE F21
Right-of-use assets and lease obligations
fAccounting policy
Definition of a lease
At inception of a contract, which generally coincides with the date the contract is signed, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
An asset is typically identified by being explicitly specified in a contract. However, an asset can also be identified by being implicitly specified at the time that the asset is made available for use by the customer. If the supplier has a substantive substitution right, then the asset is not identified. A substantive substitution right means that (a) the supplier has the practical ability to substitute the asset throughout the period of use, and (b) would economically benefit from doing so.
To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether, throughout the period of use, it has:
\u2022the right to obtain substantially all of the economic benefits from use of the identified asset; and
\u2022the right to direct the use of the identified asset. This is generally the case when the Group has the decision-making rights regarding how and for what purpose the asset is used.
The Group\u2019s leased assets relate mainly to buildings, transportation equipment, and industrial equipment.
Lease term
The Group determines the lease term as the non-cancellable period of a lease, together with both:
\u2022periods covered by an option to extend the lease if the Group is reasonably certain to exercise that option; and
\u2022periods covered by an option to terminate the lease if the Group is reasonably certain not to exercise that option.
In its assessment, the Group considers the impact of the following factors (non-exhaustive):
\u2022contractual terms and conditions for the optional periods, compared with market rates;
\u2022significant leasehold improvements undertaken (or expected to be undertaken) over the term of the contract;
\u2022costs relating to the termination of the lease, including relocation costs, costs of identifying another underlying asset suitable for the Group\u2019s needs, costs of integrating a new asset into the Group\u2019s operations, and termination penalties;
\u2022the importance of that underlying asset to the Group\u2019s operations, including the availability of suitable alternatives;
\u2022conditionality associated with exercising the option (i.e. When the option can be exercised only if one or more conditions are met), and the likelihood that those conditions will exist; and
\u2022past practice.
Right-of-use asset and lease liability
The Group recognizes a right-of-use asset and a lease liability at the lease commencement date, which is the date that the lessor makes the asset available for use by the Group except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. The right-of-use assets are presented separately in the consolidated statement of financial position, and the lease liabilities are presented as part of financial debt.
Right-of-use asset
The right-of-use asset is initially measured at cost, which comprises:
\u2022the amount of the initial measurement of the lease liability;
\u2022any lease payments made at or before the commencement date, less any lease incentive received; and
\u2022any initial direct costs incurred by the Group.
After the commencement date, the right-of-use asset is measured at cost less any accumulated depreciation and any accumulated impairment losses. Right-of-use assets are depreciated using the straight-line depreciation method, from the commencement date to (a) the end of the useful life of the underlying asset, in case the lease transfers ownership of the underlying asset to the Group by the end of the lease term, or the lease contains a purchase option that the Group is reasonably certain to exercise, or (b) the earlier of the end of the useful life and the end of the lease term, in all other cases.
Lease liability
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the respective Group entity\u2019s incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise the following:
\u2022fixed payments, less any lease incentives receivable;
\u2022variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
\u2022amounts expected to be payable by the Group under residual value guarantees;
\u2022the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
\u2022payments of penalties for early terminating the lease, if the Group is reasonably certain to exercise an option to early terminate the lease.
Service components (e.g. utilities, maintenance, insurance) are excluded from the measurement of the lease liability.
After the commencement date, the lease liability is measured by:
\u2022increasing the carrying amount to reflect interest on the lease liability;
\u2022reducing the carrying amount to reflect the lease payments made; and
\u2022remeasuring the carrying amount to reflect any reassessment or lease modifications, or to reflect the impact from a revised index or rate.
Leasing of Palladium
The Group uses palladium, a precious metal, for certain of its operations. Next to purchasing this palladium, the Group also enters into various \u201cleasing\u201d agreements with financial institutions that give the Group the right to use palladium for a certain period and then return it at the end of the \"lease\". Based on our analysis of these agreements, these contracts are not in the scope of IFRS 16 Leases or IFRS 9 Financial Instruments. Due to the lack of clear IFRS guidance, the Group applied judgment to determine whether these rights and obligations shall be accounted for on a gross or a net basis. Considering that the Group bears no price risk during the \"lease\" term and is not in full control of the asset (in accordance with the IFRS Conceptual Framework), the Group believes a net presentation gives a better view on the economic substance of the transaction. As a result, only accruals are recorded for the production losses and regeneration costs and the \u201clease\u201d fee is recognized within cost of sales.
NOTE F23
Impairment
fAccounting policy
General
At the end of each reporting period, the Group reviews whether there is any indication that assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the CGU to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are allocated to individual CGUs, or otherwise they are allocated to the smallest group of CGUs for which a reasonable and consistent allocation basis can be identified.
The recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate. Future cash flows are adjusted for risks not incorporated into the discount rate.
If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or CGU) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined (net of amortization or depreciation) had no impairment loss been recognized for the asset (or CGU) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss. An impairment loss recognized for goodwill shall not be reversed in a subsequent period.
Assets other than non-current assets held for sale
In accordance with IAS 36 Impairment of Assets, the recoverable amount of property, plant and equipment, intangible assets, right-of-use assets, CGUs or groups of CGUs, including goodwill, and equity method investees corresponds to the higher of their fair value less costs of disposal, and their value in use. The latter equals the present value of the future cash flows expected to be derived from each asset, CGU or group of CGUs, and equity method investees and is determined using the following inputs:
\u2022business plan approved by management based on growth and profitability assumptions, considering past performances, forecast changes in the economic environment and expected market developments, including opportunity and risks resulting from climate change (taking into account the Solvay's sustainability strategy \u2013 see note Climate change in the IFRS general accounting policies) and environmental regulations such as products phasing out. For further details, refer to the Risk Management Section. Such business plan generally covers five years, unless management is confident that projections over a longer period are reliable;
\u2022consideration of a terminal value determined based on the cash flows generally obtained by extrapolating the cash flows of the last years of the business plan referred to above, affected by a long-term growth rate deemed appropriate for the activity and the location of the assets;
\u2022discounting of expected cash flows at a rate determined using the weighted average cost of capital formula.
NOTE F24
Inventories
fAccounting policy
Cost of inventories includes the purchase, conversion and other costs incurred in bringing the inventories to their present location and condition. The cost of inventories is generally determined by using the weighted average cost method except for CO2 emission rights (see below).
Inventories are measured at the lower of purchasing cost (raw materials and merchandise) or production cost (work in progress and finished goods) and net realizable value. Net realizable value represents the estimated selling price, less all estimated costs of completion and the estimated costs necessary to make the sale.
CO2 emission rights
With respect to the mechanism set up by the European Union to encourage manufacturers to reduce their greenhouse gas emissions, carbon dioxide (CO2) emission rights are granted to the Group for free.
In the absence of any IFRS regulating the accounting treatment of CO2 emission rights, the Group applies the Trade/Production model, according to which CO2 emission rights are presented as inventories if they will be consumed in the production process within the next 12 months or in \u201cLoans and other assets\u201d for beyond 12 months. EUA inventory is carried at weighted average cost formula.
The result of hedging activities is recognized in OCI, while the recycling results in \u201cother operating gains and losses\u201d.
Considering its centralized CO2 emission rights\u2019 portfolio management, for emission rights that are substitutable between subsidiaries, the Group\u2019s financial statements reflect the Group\u2019s net position. If this net position is negative, a provision is recognized, measured based on the expected cost of redeemed EUA certificates.
Energy savings certificates (ESCs)
Energy savings certificates are presented as inventory items in finished goods. They are measured at weighted average cost. As their cost is not separately identifiable, and as they are a by-product, they are measured at their net realizable value upon initial recognition.
NOTE F27
Equity
fAccounting policy
Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issuance of new share capital are directly recognized in equity as a deduction, net of tax, from the equity issuance proceeds.
Reserves
The reserves include:
\u2022treasury shares;
\u2022perpetual hybrid bonds that qualify as equity absent any unavoidable contractual obligation to repay the principal and interest of the perpetual hybrid bonds (no maturity, interest is payable annually but can be deferred indefinitely at the issuer\u2019s discretion);
\u2022retained earnings;
\u2022currency translation differences from the consolidation process relating to the translation of the financial statements of foreign operations prepared in a non-euro functional currency to the euro presentation currency;
\u2022the impacts of the fair value re-measurement of equity instruments measured at fair value through other comprehensive income;
\u2022the impacts of the fair value re-measurement of financial instruments documented as hedging instruments in cash flow hedges;
\u2022actuarial gains and losses related to defined benefit plans.
Non-controlling interests
Those represent the share of non-controlling interests in the net assets and comprehensive income of subsidiaries of the Group and correspond to the interests in subsidiaries that are not held by the Company or its subsidiaries.
NOTE F29
Share-based payments
fAccounting policy
Solvay has set up compensation plans, including equity-settled and cash-settled share-based compensation plans.
In its equity-settled plans, the Group receives services as consideration for its own equity instruments (namely through the issuance of share options). The fair value of services rendered by employees in consideration for the granting of equity-instruments represents an expense. This expense is recognized on a straight-line basis in the consolidated income statement over the vesting periods relating to these equity-instruments with the recognition of a corresponding adjustment in equity. The fair value of services rendered is measured based on the fair value of the equity-instruments on the grant date. It is not subsequently remeasured. At each reporting date, the Group re-estimates the number of share options likely to vest. The impact of the revised estimates is recognized in profit or loss against a corresponding adjustment in equity.
In its cash-settled plans, the Group acquires services by incurring a liability to transfer to its employees rendering those services amounts that are based on the price (or value) of equity instruments (including shares or share options) of the Group (namely through the issuance of performance share units). The fair value of services rendered by employees in consideration for the granting of share-based payments represents an expense. This expense is recognized on a straight-line basis in the consolidated income statement over the vesting periods relating to these share-based payments with the recognition of a corresponding adjustment in liabilities. At each reporting date, the Group re-estimates the number of options likely to vest, with the impact of the revised estimates recognized in profit or loss. The Group measures the services acquired and the liability incurred at the fair value of the liability. Until the liability is settled, the Group remeasures the fair value of the liability at the end of each reporting period and at the date of settlement, with any changes in fair value recognized in profit or loss for the period.
Service and non-market performance conditions are not considered when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group\u2019s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to immediate expensing of an award unless there are also service and/or performance conditions. No expense is recognized for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share (further details are given in Note F9 Earnings per share).
Awards on shares of Syensqo SA/NV
The awards granted on shares of the Syensqo Group are not in scope of IFRS 2 Share Based Payments. Therefore, the Management has established the accounting policy for these awards.
For the awards granted on Syensqo Group shares, a liability is recognized and measured based on the fair value of the Syensqo Group awards at each reporting date. On initial recognition of the liability at the Partial Demerger date, a corresponding entry is recognized in equity for the vesting period that has passed to date and the remaining amount is recognized as Other Receivables. This asset represents the services that have yet to be rendered by the beneficiaries. The asset will be amortized to the consolidated income statement over the remaining vesting period of the plans.
The costs of the awards related to the Syensqo Group are presented within operational (Administrative) expenses. The fair value fluctuation on the liability will be presented in Financial Results together with the fair value fluctuation on the hedging options/shares, which will partially hedge the impact.
The liability will be remeasured to its fair value at each reporting date. This applies equally to vested plans so long as there remains outstanding (unexercised) options.
The liabilities related to the fully vested plans are disclosed as current given that the beneficiaries may exercise their awards at any time. The liabilities related to the unvested plans are disclosed as non-current.
As part of the Partial Demerger, the Solvay Board approved the amendments to the existing long term incentive plans (LTI). The LTIs were adjusted based on the following approaches:
1.Shareholder approach \u2013 The existing awards were adjusted to entitle beneficiaries to receive one share option of Solvay SA/NV and one share option of Syensqo SA/NV.
2.Employer approach \u2013 The existing awards were adjusted to entitle beneficiaries to receive a certain number of awards of their employer.
3.Basket approach \u2013 The existing awards were modified to entitle beneficiaries to receive an option on both Solvay SA/NV and Syensqo SA/NV.
NOTE F30
Employee Benefits
fAccounting policy
General
The Group\u2019s employees are offered various post-employment benefits, other long-term employee benefits, and termination benefits because of legislation applicable in certain countries, and contractual agreements entered into by the Group with its employees or constructive obligations.
The post-employment benefits are classified as defined contribution or defined benefit plans.
Defined contribution plans
Defined contribution plans involve the payment of fixed contributions to a separate entity, and release the employer from any subsequent obligation, as this separate entity is solely responsible for paying the amounts due to the employee. The expense is recognized when an employee has rendered services to the Group during the period.
Defined benefit plans
Defined benefit plans concern all plans other than defined contribution plans, and include:
\u2022post-employment benefits: pension plans, other post-employment obligations and supplemental benefits such as post-employment medical plans.
Considering projected final salaries on an individual basis, post-employment benefits are measured by applying a method (projected unit credit method) using assumptions involving discount rate, life expectancy, turnover, wages, annuity revaluation and medical cost inflation. The assumptions specific to each plan consider the local economic and demographic contexts.
The discount rates are interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related pension obligation.
The amount recognized under post-employment obligations corresponds to the difference between the present value of future obligations and the fair value of the plan assets funding the plan, if any. If this calculation gives rise to a deficit, an obligation is recognized in liabilities. Otherwise, a net asset limited to the lower of the surplus in the defined benefit plan and the present value of any future plan refunds or any reduction in future contributions to the plan is recognized. Therefore, the amount at which such an asset is recognized in the statement of financial position may be subject to a ceiling.
The defined benefit cost consists of service cost and net interest expense (based on discount rate) on the net liability or asset, both recognized in profit or loss, and remeasurements of the net liability or asset, recognized in other comprehensive income.
Service cost consists of current service cost, past service cost resulting from plan amendments or curtailments and settlement gains or losses.
The interest expenses arising from the reverse discounting of the benefit obligations, the financial income on plan assets (determined by multiplying the fair value of the plan assets by the discount rate) as well as interest on the effect of the asset ceiling are recognized on a net basis in the net financial charges (cost of discounting of provisions).
Remeasurements of the net liability or asset consist of:
\u2022actuarial gains and losses on the benefit obligations arising from experience adjustments and/or changes in actuarial assumptions (including the effect of changes in the discount rate) recognized in other comprehensive income;
\u2022changes as a consequence of plan amendments, recognized in profit or loss.
\u2022the return on plan assets (excluding amounts in net interest) and changes in the limitation of the net asset recognized.
Other long-term employee and termination benefits
\u2022Other long-term employee benefits related to long service benefits granted to employees according to their seniority in the Group. Termination benefits include early pension plans. Other long-term employee and termination benefits are accounted for in the same way as post-employment benefits but remeasurements are fully recognized in the net financial charges during the period in which they occur.
\u2022The actuarial calculations of the main post-employment obligations and other long-term benefits are performed by independent actuaries.
NOTE F31
Provisions
fAccounting policy
General
Provisions are recognized when (a) the Group has a present obligation (legal or constructive) as a result of a past event, (b) it is probable that the Group will be required to settle the obligation, and (c) a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount is the present value of expenditures required to settle the obligation. Impacts of changes in discount rates are generally recognized in the financial result.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received when the Group settles the obligation.
Restructurings
A restructuring provision is recognized when the Group has developed a detailed formal plan for the restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring, which are those amounts that are both necessarily entailed by the restructuring and not associated with the ongoing activities of the entity.
Environmental remediation costs
Environmental liabilities are mainly related to non-ongoing activities (shut-down sites, discontinued activities or divested activities where Solvay maintains certain commitments) and, to a lower extent, to ongoing activities (see comments below).
An environmental provision is recognized, in accordance with IAS 37, when there is a current legal or constructive obligation resulting from past events which will result in a probable outflow of resources (expenses / cash outs) to settle it and for which a reliable estimate of such outflows and timing can be made.
The environmental expenses encompass, but are not limited to, the following key matters:
\u2022Sampling and analytical costs for soil and ground water monitoring
\u2022Cost related to dismantling when required to meet a remediation or permit obligation
\u2022Asbestos removal when obligated by regulation
\u2022Environmental investigations and studies (Risk Assessments, Phase I and II soil and groundwater)
The closing amount of the environmental provisions is based on the net present value of the future cash flows needed, for current and future years, to settle remediation obligations. Forecast expenditures are based on external consultant estimates, where appropriate and possible. Future expenditures are forecast and revised biannually and validated quarterly by Solvay finance and suitably qualified industrial experts led by the Group Environmental Rehabilitation Director and benefit from inputs of legal department staff for the evolution of Environmental Regulations.
In the absence of probable obligations, a contingent liability may be disclosed to represent the future possible liability. In some cases, contingent liabilities cannot be quantified. See Note F36 Contingent liabilities and financial guarantees.
NOTE F32
Financial instruments and financial risk management
fAccounting policy
General
Financial assets and liabilities are recognized when, and only when Solvay becomes a party to the contractual provisions of the instrument.
Amortized cost is the amount at which the financial asset or financial liability is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity amount and, for financial assets, adjusted for any loss allowance. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial asset or financial liability to the gross carrying amount of a financial asset or to the amortized cost of a financial liability. When calculating the effective interest rate, the Group estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses. The calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs, and all other premiums or discounts.
Financial assets
Trade receivables are initially measured at their transaction price, if they do not contain a significant financing component, which is the case for substantially all trade receivables. Other financial assets are initially measured at fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset.
A financial asset is classified as current when the cash flows expected to flow from the instrument mature within one year.
All recognized financial assets will subsequently be measured at either amortized cost or fair value under IFRS 9 Financial Instruments, specifically:
\u2022A debt instrument that (i) is held within a business model whose objective is to collect the contractual cash flows and (ii) has contractual cash flows that are solely payments of principal and interest on the principal amount outstanding is measured at amortized cost (net of any write down for impairment), unless the asset is designated at fair value through profit or loss (FVTPL) under the fair value option.
\u2022All other debt instruments are measured at FVTPL.
\u2022All equity investments are measured in the consolidated statement of financial position at fair value, with gains and losses recognized in profit or loss except that if an equity investment is not held for trading, nor contingent consideration recognized by an acquirer in a business combination, an irrevocable election can be made at initial recognition to measure the investment at FVTOCI, with dividend income recognized in profit or loss. This classification is determined on an instrument-by-instrument basis. Upon derecognition, the cumulative gains or losses previously recognized in other comprehensive income are reclassified to retained earnings.
\u2022Equity investments in partnerships of investment funds are measured in the consolidated statement of financial position at fair value with gains and losses recognized in profit or loss. Based on the analysis of the characteristics of these funds the Group determined that they were not eligible for the FVTOCI option and therefore are accounted for at FVTPL.
\u2022For instruments quoted in an active market, the fair value corresponds to a market price (level 1). For instruments that are not quoted in an active market, the fair value is determined using valuation techniques including reference to recent arm\u2019s length market transactions or transactions involving instruments which are substantially the same (level 2), or discounted cash flow analysis including, to the greatest possible extent, assumptions consistent with observable market data (level 3). However, in limited circumstances, cost of equity instruments may be an appropriate estimate of their fair value. That may be the case if insufficient more recent information is available to measure fair value, or if there is a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.
Impairment of financial assets
\u2022The impairment loss of a financial asset measured at amortized cost is calculated based on the expected loss model, representing the weighted average of credit losses with the respective risks of a default occurring as the weights. Expected credit losses are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
\u2022For trade receivables that do not contain a significant financing component (i.e. substantially all trade receivables), the loss allowance is measured at an amount equal to lifetime expected credit losses. Those are the expected credit losses that result from all possible default events over the expected life of those trade receivables, using a provision matrix that considers historical information on defaults adjusted for the forward-looking information per customer. The Group considers a financial asset in default risk when contractual payments are 60 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is fully impaired when there is no reasonable expectation of recovering the contractual cash flows.
Impairment losses are recognized in the consolidated income statement, except for debt instruments measured at fair value through other comprehensive income.
In this case, the allowance is recognized in other comprehensive income.
Financial liabilities
Financial liabilities are initially measured at fair value minus, in the case of a financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the issue of the financial liability. Subsequently, they are measured at amortized cost, except for:
\u2022financial liabilities at fair value through profit or loss. Such liabilities, including derivatives that are liabilities, are subsequently measured at fair value;
\u2022financial guarantee contracts. After initial recognition, guarantees are subsequently measured at the higher of the expected losses and the amount initially recognized.
Derivative financial instruments
A derivative financial instrument is a financial instrument or other contract within the scope of IFRS 9 Financial Instruments with all three of the following characteristics:
\u2022its value changes in response to the change in a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract (sometimes called the \"underlying\");
\u2022it requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors;
\u2022it is settled at a future date.
The Group enters into a variety of derivative financial instruments (forward, future, option, collars and swap contracts) to manage its exposure to interest rate risk, foreign exchange rate risk, and commodity risk (mainly utility and CO2 emission rights price risks).
As explained above, derivatives are initially recognized at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in income or expense, unless the derivative is designated and effective as a hedging instrument. The Group designates certain derivatives as hedging instruments of the exposure to variability in cash flows with respect to a recognized asset or liability or a highly probable forecast transaction that could affect profit or loss (cash flow hedges).
A derivative with a positive fair value is recognized as a financial asset whereas a derivative with a negative fair value is recognized as a financial liability. Derivative instruments (or portions of them) are presented as non-current assets or non-current liabilities if the remaining maturity of the underlying settlements is more than 12 months after the reporting period. Other derivative instruments (or portions of them) are presented as current assets or current liabilities.
Hedge accounting
The Group designates certain derivatives and embedded derivatives, in respect of interest rate risk, foreign exchange rate risk, Solvay share price risk, and commodity risk (mainly utility and CO2 emission rights price risks), as hedging instruments in a cash flow hedge relationship.
At the inception of the hedge relationship, there is a formal designation and documentation of the hedging relationship and the Group\u2019s risk management objective and strategy for undertaking the hedge. So to apply hedge accounting: (a) there is an economic relationship between the hedged item and the hedging instrument, (b) the effect of credit risk does not dominate the value changes that result from that economic relationship, and (c) the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item.
The requirement under (a) above that an economic relationship exists means that there is an expectation that the value of the hedging instrument and the value of the hedged item will systematically change in the opposite direction in response to movements in either the same underlying (or underlyings that are economically related in such a way that they respond in a similar way to the risk that is being hedged).
Cash flow hedges
The effective portion of changes in the fair value of hedging instruments that are designated in a cash flow hedge is recognized in other comprehensive income.
The gain or loss relating to the ineffective portion is recognized immediately in profit or loss.
As long as cash flow hedge qualifies, the hedging relationship is accounted for as follows:
(a)the separate component of equity associated with the hedged item (cash flow hedge reserve) is adjusted to the lower of the following (in absolute amounts):
(i)the cumulative gain or loss on the hedging instrument from inception of the hedge; and
(ii)the cumulative change in fair value (present value) of the hedged item (i.e. the present value of the cumulative change in the hedged expected future cash flows) from inception of the hedge.
(b)the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge (i.e. The portion that is offset by the change in the cash flow hedge reserve calculated in accordance with (a)) is recognized in other comprehensive income;
(c)any remaining gain or loss on the hedging instrument (or any gain or loss required to balance the change in the cash flow hedge reserve calculated in accordance with (a)) is hedge ineffectiveness that is recognized in profit or loss.
(d)the amount that has been accumulated in the cash flow hedge reserve in accordance with (a) is accounted for as follows:
(i)if a hedged forecast transaction subsequently results in the recognition of a non-financial asset or a non-financial liability, the Group removes that amount from the cash flow hedge reserve and includes it directly in the initial cost or other carrying amount of the asset or the liability. This is not a reclassification adjustment and hence it does not affect other comprehensive income;
(ii)for cash flow hedges other than those covered by i), that amount is reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment in the same period or periods during which the hedged expected future cash flows affect profit or loss (for example, in the periods that interest income or interest expense is recognized or when a forecast sale occurs);
(iii)however, if that amount is a loss and the Group expects that all or a portion of that loss will not be recovered in one or more future periods, it immediately reclassifies the amount that is not expected to be recovered into profit or loss as a reclassification adjustment.
Most hedged items are transaction related. The time value of options, forward elements of forward contracts, and foreign currency basis spreads of financial instruments that are hedging the items affect profit or loss at the same time as those hedged items.
Hedge accounting is discontinued prospectively when the hedging relationship (or a part of a hedging relationship) ceases to meet the qualifying criteria (after considering any rebalancing of the hedging relationship, if applicable). This includes instances when the hedging instrument expires or is sold, terminated or exercised.
When the Group discontinues hedge accounting for a cash flow hedge it accounts for the amount that has been accumulated in the cash flow hedge reserve as follows:
\u2022if the hedged future cash flows are still expected to occur, that amount remains in the cash flow hedge reserve until the future cash flows occur. However, if that amount is a loss and the Group expects that all or a portion of that loss will not be recovered in one or more future periods, it immediately reclassifies the amount that is not expected to be recovered into profit or loss as a reclassification adjustment;
\u2022if the hedged future cash flows are no longer expected to occur, that amount is immediately reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment. A hedged future cash flow that is no longer highly probable to occur may still be expected to occur.
Valuation techniques and assumptions used for measuring fair value.
fAccounting policy
Quoted market prices are available for financial assets and financial liabilities with standard terms and conditions that are traded on active markets. The fair values of derivative financial instruments are equal to their quoted prices, if available. In case such quoted prices are not available, the fair value of the financial instruments is determined based on a discounted cash flow analysis using the applicable yield curve derived from quoted interest rates matching maturities of the contracts for non-optional derivatives. Optional derivatives are fair valued based on option pricing models, taking into account the present value of probability weighted expected future payoffs, using market reference formulas.
The fair values of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis.
fAccounting policy
General
The Group classifies financial liabilities that arise from supplier finance arrangements within Trade and other payables in the statement of financial position if they have a similar nature and function to trade payables. This is the case if the supplier finance arrangement is part of the working capital used in the Group\u2019s normal operating cycle, the level of security provided is similar to trade payables and the terms of the liabilities that are part of the supply chain finance arrangement are not substantially different from the terms of trade payables that are not part of the arrangement. Cash flows related to liabilities arising from supplier finance arrangements that are classified in Trade and other payables in the consolidated statement of financial position are included in operating activities in the consolidated statement of cash flows.
First application in 2024
This disclosure requirement was introduced by the Amendments Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7), published in May 2023 by the IASB. The amendments are effective for periods beginning on or after 1 January 2024. In the year of initial application, the requirements only apply to the annual financial report and the disclosure does not need to provide the comparative figures.
NOTE F36
Contingent liabilities and financial guarantees
fAccounting policy
A contingent liability is:
(a)a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group; or
(b) a present obligation that arises from past events but is not recognized because:
(i)it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or
(ii)the amount of the obligation cannot be measured with sufficient reliability
Contingent liabilities are not recognized in the consolidated financial statements, except if they arise from a business combination. They are disclosed unless the possibility of an outflow of economic benefits is remote.
Financial guarantees are contracts that require the Group to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.
To avoid double counting, only guarantees in excess of liabilities recognized or disclosures made elsewhere in the Group's consolidated financial statements are disclosed in this note. Regarding financial guarantees, all financial guarantees of the Group are presented in this note.
Note F39
Events after the reporting period
fAccounting policy
Events after the reporting period which provide evidence of conditions that existed at the end of the reporting period (adjusting events) are recognized in the consolidated financial statements. Events indicative of conditions that arose after the reporting period are non-adjusting events and are disclosed in the notes if material.
The Group has prepared the financial statements on the basis that it will continue to operate as a going concern.
The standards, interpretations and amendments that became effective for the financial statement beginning on January 1, 2024 or later, and which are relevant to the Group are presented below. An assessment was made that these amendments had no material impact on the Group\u2019s consolidated financial statements.
The amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures clarify the characteristics of supplier finance arrangements and require additional disclosure of such arrangements. The disclosure requirements in the amendments are intended to assist users of financial statements in understanding the effects of supplier finance arrangements on an entity\u2019s liabilities, cash flows and exposure to liquidity risk. As a result of implementing the amendments, the Group has provided additional disclosures about its supplier finance arrangement.
These amendments provide a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangements in place at the reporting date. The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current. The clarification confirmed our classification of the bridge facility as long term.
In September 2022, the IASB issued amendments to IFRS 16 to specify the requirements that a seller-lessee uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure the seller-lessee does not recognize any amount of the gain or loss that relates to the right of use it retains.
The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group\u2019s financial statements and which may have an impact on the Group are disclosed below. The Group intends to adopt these new and amended standards and interpretations, if applicable, when they become effective.
In August 2023, the IASB issued amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates to specify how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. The amendments also require disclosure of information that enables users of its financial statements to understand how the currency not being exchangeable into the other currency affects, or is expected to affect, the entity\u2019s financial performance, financial position and cash flows. The amendments will be effective for annual reporting periods beginning on or after January 1, 2025. Early adoption is permitted but will need to be disclosed. When applying the amendments, an entity cannot restate comparative information. The amendments are not expected to have a material impact on the Group\u2019s financial statements.
In April 2024, the IASB issued IFRS 18, which replaces IAS 1 Presentation of Financial Statements. IFRS 18 introduces new requirements for presentation within the statement of profit or loss, including specified totals and subtotals. Furthermore, entities are required to classify all income and expenses within the statement of profit or loss into one of five categories: operating, investing, financing, income taxes and discontinued operations, whereof the first three are new. It also requires disclosure of newly defined management-defined performance measures, subtotals of income and expenses, and includes new requirements for aggregation and disaggregation of financial information based on the identified \u2018roles\u2019 of the primary financial statements (PFS) and the notes. In addition, narrow-scope amendments have been made to IAS 7 Statement of Cash Flows, which include changing the starting point for determining cash flows from operations under the indirect method, from \u2018profit or loss\u2019 to \u2018operating profit or loss\u2019 and removing the optionality around classification of cash flows from dividends and interest. In addition, there are consequential amendments to several other standards. IFRS 18, and the amendments to the other standards, is effective for reporting periods beginning on or after January 1, 2027, but earlier application is permitted and must be disclosed. IFRS 18 will apply retrospectively. The Group is currently working to identify all impacts the amendments will have on the primary financial statements and notes to the financial statements.
On December 18, 2024, the IASB issued the amendments to help companies better report the financial effects of nature-dependent electricity contracts, which are often structured as power purchase agreements. The amendments clarify the application of the \u2018own use\u2019 requirements, permit hedge accounting if these contracts are used as hedging instruments, and add new disclosure requirements to enable investors to understand the effect of these contracts on a company\u2019s financial performance and cash flows. These amendments are required to be applied for annual reporting periods beginning on or after January 1, 2026. However, early application is permitted.
The consolidated financial statements are presented in millions of euros, which is also the functional currency of the parent company. Rounding differences may occur in respect of individual amounts or percentages.
The preparation of the consolidated financial statements requires the use of estimates and assumptions that have an impact on the application of accounting policies and the measurement of amounts recognized in the consolidated financial statements. The areas for which the estimates and assumptions are material with respect to the consolidated financial statements are presented in the section Key sources of estimation uncertainty.
The Group performs annual impairment tests on (groups of) CGUs to which goodwill has been allocated, and each time there are indicators that their carrying amount might be higher than their recoverable amount. This analysis requires management to estimate the future cash flows expected to be generated by the CGUs and a suitable discount rate in order to calculate present value. The recoverable amount is highly sensitive to discount and growth rates.
Further details are provided in note F19 Goodwill and Business Combinations and F23 Impairment.
Deferred tax assets (DTA) are recognized for unused tax losses to the extent that it is probable that taxable profits will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits.
The Group has \u20ac706 million (2023: \u20ac685 million) of tax losses carried forward for which no deferred tax assets were recognized. These losses relate to subsidiaries that have a history of losses, do not expire, and may not be used to offset taxable income elsewhere in the Group. The subsidiaries do not have any taxable temporary differences that could partly support the recognition of these losses as deferred tax assets. On this basis, the Group has determined that it cannot recognize deferred tax assets on these tax losses carried forward.
The goals referred to in the Climate Change Considerations note may have an impact on the estimate of future probability used in the DTA recoverability assessment \u2013 see the note, above.
Further details are provided in Note F7 Income Taxes.
The actuarial assumptions used in determining the defined benefit obligations at December 31 as well as the annual cost can be found in note F30 Provisions for employee benefits. All main employee benefits plans are assessed annually by independent actuaries. Discount rates and inflation rates are defined centrally by management. The other assumptions (such as future salary increases and expected rates of medical care cost increases) are defined at a local level. All plans are supervised by the Group\u2019s central Human Resources department with the help of a central actuary to check the reasonableness of the results and ensure consistency in reporting. All assumptions are reviewed at each reporting date.
Further details are provided in note F30 Employee benefits.
Environmental provisions are managed and coordinated jointly by the Environmental Rehabilitation department and the Finance department. In case of environmental impacts stemming from historical production activities, generally, no provision is recognized for remediation works beyond the 20 years due to the inherent high level of uncertainty as to the timing and amount.
The forecasts of expenses are discounted to their present value. The discount rates fixed by geographical area correspond to the average risk-free rate on 10-year government bonds or the inflation rate if higher. These rates are set annually by the Finance department and can be revised based on the evolution of economic parameters of the country involved. To reflect the passage of time, the provisions are increased each year at the discount rates described above.
Further details are provided in note F31 Provisions.
Any significant litigations (post M&A and other, including threat of litigation) are reviewed by Solvay\u2019s in-house lawyers with the support, when appropriate, of external counsels at least every quarter together with the Finance and Insurance Departments. This review includes an assessment of the need to recognize provisions and/or disclose contingent liabilities.
Further details are provided in note F31 Provisions and F36 Contingent liabilities and financial guarantees.
The Group enters into various contracts to obtain goods and services. Determining whether those contracts include a lease requires judgment. Elements that are considered include assessing whether or not there is an identified asset. To make the determination the Group considers whether or not it has the right to obtain substantially all of the economic benefit of the asset(s) throughout the period of use. Additionally, the Group assesses the extent of its decision-making rights and the existence of any substantive substitution rights. All facts and circumstances relevant to the assessment are considered and the identification of a lease is determined with the support of the departments that have the relevant knowledge, and which mainly includes the GBU management. Refer to note F21 Right-of-use assets and lease obligations for the leases that were identified by the Group and accounted for in accordance with IFRS 16 Leases.
Determining the lease term requires judgment. Elements that are considered include assessing the probability that early termination options or extension options will be exercised. All facts and circumstances relevant to the assessment are considered, and the main ones have been described in note F21 Right-of-use assets and lease obligations. Lease terms are determined with the support of the departments that have the relevant knowledge, and that mainly includes the Purchasing department, and the Facilities department.
To comply with its environmental obligations, Solvay initiated a range of projects intended to limit the emission of Carbon Dioxide (see the note Climate Change Considerations). Some of these projects intend to provide the energy to Solvay production sites. These projects require assessment to determine if they contain lease arrangements (IFRS 16), qualify for the 'own use' exemption (IFRS 9), or contain material embedded derivatives (IFRS 9). This requires material judgment and introduces estimation uncertainty.
Solvay hedges its risk related to the emission of carbon dioxide in the European Union, for the entire period of EU ETS phase 4 i.e. until the end of year 2030. Solvay applies Cash Flow hedge accounting to a range of instruments to minimize the exposure risk, and to determine the future cost related to the obligatory redemption of the allowances. However, the volume of future CO2 emission and the future free allowances granted by the EU state must be estimated, which introduces estimation uncertainty risk. Furthermore, because of the insufficient liquidity of EUA market regarding later years of the hedged period, Solvay decided to roll the existing instruments until they reach the desired delivery date. This introduces further cost estimation and allocation uncertainty.
See also the disclosure on Utility and CO2 price risks, in Note F32.D Financial Risk Management.
No critical accounting judgements have been identified for the year ended December 31, 2024.
The following critical accounting judgment has been identified for the year ended December 31, 2023.
On March 15, 2022, the Group announced its plan to separate into two independent publicly traded companies. On December 9, 2023, the separation was effectuated through the means of the Partial Demerger. The Specialty Businesses were classified as discontinued operations following the approval of Partial Demerger by the shareholders and the net assets were distributed. Solvay applied IFRIC 17 Distribution of Non-cash-Assets to Owners to determine how to present the Partial Demerger which included estimating the fair value of the distribution.\u00a0Solvay estimated the fair value of Syensqo by taking an average of the closing price of the first 30 days of trading activity of Syensqo to prevent distortions from short-term trading activity in the first weeks of trading. This being a fair value with observable inputs and was considered to be representative of the fair value at the distribution date.
The fair value was determined to be \u20ac 9.5 billion which resulted in a gain of \u20ac 1.65 billion over the then carrying amount of the net assets. The impact was recorded to the consolidated income statement in discontinued operations.
In addition to IFRS accounts, Solvay also presents alternative performance indicators to provide a more consistent and comparable indication of the Group\u2019s underlying financial performance and financial position, as well as cash flows. These indicators provide a balanced view of the Group\u2019s operations and are considered useful to investors, analysts and credit rating agencies as these measures provide relevant information on the Group\u2019s past or future performance, position or cash flows. These indicators are generally used in the sector it operates in and therefore serve as a useful aid for investors to compare the Group\u2019s performance with its peers.
See note F1 Revenue and Segment Information for the reconciliation of the underlying EBITDA measure. Further information on definitions of adjustments (IFRS vs Underlying metrics) can be found in Glossary, and more information about reconciliation of non-IFRS (underlying) metrics with IFRS figures in Business Performance.
Consistent with the presentation in the consolidated income statement, the notes to the consolidated income statement as presented hereafter do not include the consolidated income statement impacts from discontinued operations that are presented on a separate line. The impact of discontinued operations only relates to\u00a02023. Those are disclosed in note F8 Discontinued operations.
The consolidated financial statements incorporate the financial statements of the Company, and:
hentities controlled by the Company (including through its subsidiaries) and that hence qualify as subsidiaries;
harrangements over which the Company (including through its subsidiaries) exercises joint control, and that qualify as joint operations;
harrangements over which the Company (including through its subsidiaries) exercises joint control, and that qualify as joint ventures;
hentities over which the Company (including through its subsidiaries) has significant influence and that hence qualify as associates.
Where necessary, adjustments are made to the financial statements of the investees so as to align their accounting policies with those of the Group.
In accordance with the principle of materiality, certain companies, which are not of a significant size, have not been included in the consolidation scope. Companies are deemed not to be significant when, during two consecutive years, they do not exceed any of the three following thresholds in terms of their contribution to the Group\u2019s accounts:
hsales of \u20ac18 million;
htotal assets of \u20ac11 million;
hheadcount of 100 persons.
Companies that do not meet these criteria are, nevertheless, consolidated where the Group believes that they have a potential for rapid development, or where they hold shares in other companies that are consolidated based on the above criteria.
In the aggregate, the non-consolidated companies have an immaterial impact on the consolidated financial statements of the Group.
In 2024, the above thresholds were updated to reflect the new size of the group following the Partial Demerger. There was no change in the consolidation scope resulting from the change in thresholds.
The full list of companies can be obtained at the Company\u2019s head office.
A subsidiary is an entity over which the Group has control. Control is achieved when the Group has (a) power over an investee, (b) exposure, or rights, to variable returns from its involvement with the investee, and (c) the ability to use its power over the investee to affect the amount of the investor\u2019s returns. To assess whether the Group has control, potential voting rights are taken into account. Subsidiaries are fully consolidated. The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition and up to the effective date of disposal.
Intra-group transactions, balances, income and expenses are eliminated on consolidation.
Non-controlling interests in subsidiaries are presented separately from the Group\u2019s equity. Non-controlling interests are initially measured, either at fair value (full goodwill method), or at the non-controlling interests\u2019 proportionate share in the recognized amounts of the acquiree\u2019s identifiable net assets (proportionate goodwill method). The choice of measurement is made on an acquisition-by-acquisition basis. Subsequent to the acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests\u2019 share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.
Changes in the Group\u2019s equity interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The carrying amounts of the Group\u2019s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.
When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest, and (ii) the previous carrying amount of the assets (including goodwill) and liabilities of the subsidiary and any non-controlling interests. Amounts previously recognized in other comprehensive income in relation to the subsidiary are accounted for (i.e.\u00a0Reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be required if the relevant assets or liabilities were disposed of. The fair value of any investment retained in the former subsidiary at the date when control is lost is considered to be the fair value on initial recognition for subsequent accounting in accordance with IFRS 9 or, when applicable, the cost on initial recognition of an investment in an associate or joint venture in accordance with IAS 28 Investments in Associates and Joint Ventures.
An associate is an entity over which the Group has significant influence and that is neither a subsidiary, nor an interest in a joint arrangement. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about relevant activities require the unanimous consent of the parties sharing control.
The results, assets and liabilities of associates and joint ventures are incorporated in the consolidated financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Under the equity method, on initial recognition, investments in associates and joint ventures are recognized in the consolidated statement of financial position at cost, and the carrying amount is adjusted for post-acquisition changes in the Group\u2019s share of the net assets of the associate or joint venture, less any impairment of the value of individual investments. Losses of an associate or joint venture in excess of the Group\u2019s interest in that associate or joint venture (which includes any long-term interests that, in substance, form part of the Group\u2019s net investment in the associate or joint venture) are recognized only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture.
Any excess of the cost of acquisition over the Group\u2019s share of the net fair value of the identifiable assets and (contingent) liabilities of the associate or joint venture recognized at the date of acquisition is goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of that\u00a0investment.
Where a Group entity transacts with an associate or joint venture of the Group, profits and losses are eliminated to the extent of the Group\u2019s interest in the relevant associate or joint venture.
After application of the equity method, the Group reviews its investments in associates and joint ventures for impairment. At each reporting date, the Group determines whether there is objective evidence that the investment in the associate or joint venture is impaired. If there is such evidence, the Group performs its analysis and calculates any impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value, and then recognizes the loss in the consolidated income statement.
A subsidiary is an entity over which the Group has control. Control is achieved when the Group has (a) power over an investee, (b) exposure, or rights, to variable returns from its involvement with the investee, and (c) the ability to use its power over the investee to affect the amount of the investor\u2019s returns. To assess whether the Group has control, potential voting rights are taken into account. Subsidiaries are fully consolidated. The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition and up to the effective date of disposal.
Intra-group transactions, balances, income and expenses are eliminated on consolidation.
Non-controlling interests in subsidiaries are presented separately from the Group\u2019s equity. Non-controlling interests are initially measured, either at fair value (full goodwill method), or at the non-controlling interests\u2019 proportionate share in the recognized amounts of the acquiree\u2019s identifiable net assets (proportionate goodwill method). The choice of measurement is made on an acquisition-by-acquisition basis. Subsequent to the acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests\u2019 share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.
Changes in the Group\u2019s equity interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The carrying amounts of the Group\u2019s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.
When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest, and (ii) the previous carrying amount of the assets (including goodwill) and liabilities of the subsidiary and any non-controlling interests. Amounts previously recognized in other comprehensive income in relation to the subsidiary are accounted for (i.e.\u00a0Reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be required if the relevant assets or liabilities were disposed of. The fair value of any investment retained in the former subsidiary at the date when control is lost is considered to be the fair value on initial recognition for subsequent accounting in accordance with IFRS 9 or, when applicable, the cost on initial recognition of an investment in an associate or joint venture in accordance with IAS 28 Investments in Associates and Joint Ventures.
Those represent the share of non-controlling interests in the net assets and comprehensive income of subsidiaries of the Group and correspond to the interests in subsidiaries that are not held by the Company or its subsidiaries.
A subsidiary is an entity over which the Group has control. Control is achieved when the Group has (a) power over an investee, (b) exposure, or rights, to variable returns from its involvement with the investee, and (c) the ability to use its power over the investee to affect the amount of the investor\u2019s returns. To assess whether the Group has control, potential voting rights are taken into account. Subsidiaries are fully consolidated. The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition and up to the effective date of disposal.
Intra-group transactions, balances, income and expenses are eliminated on consolidation.
Non-controlling interests in subsidiaries are presented separately from the Group\u2019s equity. Non-controlling interests are initially measured, either at fair value (full goodwill method), or at the non-controlling interests\u2019 proportionate share in the recognized amounts of the acquiree\u2019s identifiable net assets (proportionate goodwill method). The choice of measurement is made on an acquisition-by-acquisition basis. Subsequent to the acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests\u2019 share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.
Changes in the Group\u2019s equity interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The carrying amounts of the Group\u2019s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.
When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest, and (ii) the previous carrying amount of the assets (including goodwill) and liabilities of the subsidiary and any non-controlling interests. Amounts previously recognized in other comprehensive income in relation to the subsidiary are accounted for (i.e.\u00a0Reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be required if the relevant assets or liabilities were disposed of. The fair value of any investment retained in the former subsidiary at the date when control is lost is considered to be the fair value on initial recognition for subsequent accounting in accordance with IFRS 9 or, when applicable, the cost on initial recognition of an investment in an associate or joint venture in accordance with IAS 28 Investments in Associates and Joint Ventures.
Those represent the share of non-controlling interests in the net assets and comprehensive income of subsidiaries of the Group and correspond to the interests in subsidiaries that are not held by the Company or its subsidiaries.
NOTE F28
Non-controlling interests
The amounts disclosed below are fully consolidated amounts and do not reflect the impacts from elimination of intragroup transactions.
At the end of 2024, the following most material subsidiaries have non-controlling interests (NCI) totaling \u20ac60 million out of total NCI of \u20ac65 million.
| \n In \u20ac million | \n\n Solvay Lantian (Quzhou) Chemicals | \n\n Salzgewinnungsgezellschaft Westfalen | \n\n Shandong Huatai Interox Chemicals | \n
|---|---|---|---|
| \n Non-controlling ownership interest | \n\n 45% | \n\n 35% | \n\n 40% | \n
| \n Statement of financial position | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current assets | \n\n 25 | \n\n 55 | \n\n 33 | \n
| \n Current assets | \n\n 60 | \n\n 37 | \n\n 21 | \n
| \n Non-current liabilities | \n\n 4 | \n\n 51 | \n\n 1 | \n
| \n Current liabilities | \n\n 14 | \n\n 6 | \n\n 7 | \n
| \n Income statement | \n\n \n | \n\n \n | \n\n \n | \n
| \n Sales | \n\n 86 | \n\n 11 | \n\n 28 | \n
| \n Profit for the year | \n\n 13 | \n\n 3 | \n\n 16 | \n
| \n Other comprehensive income | \n\n 2 | \n\n 1 | \n\n 1 | \n
| \n Total comprehensive income | \n\n 15 | \n\n 4 | \n\n 17 | \n
| \n Dividends paid to non-controlling interests | \n\n 2 | \n\n 0 | \n\n 0 | \n
| \n Share of non-controlling interest in the profit for the year | \n\n 6 | \n\n 1 | \n\n 2 | \n
| \n Accumulated non-controlling interests | \n\n 30 | \n\n 12 | \n\n 18 | \n
At the end of 2023, the following subsidiaries had non-controlling interests totaling \u20ac35 million, out of a total of \u20ac42 million.
| \n In \u20ac million | \n\n Solvay Lantian (Quzhou) Chemicals | \n\n Salzgewinnungsgezellschaft Westfalen | \n
|---|---|---|
| \n Non-controlling ownership interest | \n\n 45% | \n\n 35% | \n
| \n Statement of financial position | \n\n \n | \n\n \n | \n
| \n Non-current assets | \n\n 26 | \n\n 55 | \n
| \n Current assets | \n\n 47 | \n\n 22 | \n
| \n Non-current liabilities | \n\n 3 | \n\n 41 | \n
| \n Current liabilities | \n\n 15 | \n\n 4 | \n
| \n Income statement | \n\n \n | \n\n \n | \n
| \n Sales | \n\n 89 | \n\n 11 | \n
| \n Profit for the year | \n\n 10 | \n\n 7 | \n
| \n Other comprehensive income | \n\n -2 | \n\n -1 | \n
| \n Total comprehensive income | \n\n 8 | \n\n 6 | \n
| \n Dividends paid to non-controlling interests | \n\n 3 | \n\n 0 | \n
| \n Share of non-controlling interest in the profit for the year | \n\n 4 | \n\n 2 | \n
| \n Accumulated non-controlling interests | \n\n 24 | \n\n 11 | \n
Note F40
List of companies included in\u00a0the\u00a0consolidation scope
The Group consists of Solvay SA/NV and a total of 145 investees.
Of these 145 investees, 71 are fully consolidated, 7 are proportionately consolidated and 20 are accounted for under the equity method, while the other 47 are not material to the Group and therefore are not in the consolidation scope.
These Other Investments, which are insignificant are measured at cost and tested for impairment on an annual basis, which is considered a good proxy of their fair value. For more information, refer to Principles of consolidation.
| \n Country | \n\n Company | \n\n Comments | \n
|---|---|---|
| \n CHILE | \n\n Rhodia Chile Ltda, Santiago | \n\n Meets the consolidation criteria | \n
| \n Country | \n\n Company | \n\n Comments | \n
|---|---|---|
| \n FRANCE | \n\n Solvay Energy Services S.A.S., Puteaux | \n\n Merged into Rhodia Operations S.A.S. | \n
| \n GERMANY | \n\n Solvay Chemicals GmbH, Hannover | \n\n Merged into Solvay GmbH | \n
| \n Solvin GmbH & Co. KG - PVDC, Rheinberg | \n\n Merged into Solvay GmbH | \n|
| \n Solvay Flux GmbH, Hannover | \n\n Merged into Solvay GmbH | \n|
| \n Solvay Fluor GmbH, Hannover | \n\n Merged into Solvay GmbH | \n|
| \n Solvin Holding GmbH, Hannover | \n\n Merged into Solvay GmbH | \n|
| \n NETHERLANDS | \n\n Rhodia International Holdings B.V., Den Haag | \n\n Merged into Solvay Chemicals and Plastics Holding B.V. | \n
| \n Country | \n\n Company | \n\n Comments | \n
|---|---|---|
| \n CHINA | \n\n Shandong Huatai Interox Chemical Co. Ltd, Dongying | \n\n Change from equity method to full consolidation due to the\u00a0purchase of additional 10% of Dongying Huatai Chemicals Group's\u00a0shares | \n
Indicating the percentage holding.
The percentage of voting rights is very close to the percentage holding.
| \n ARGENTINA | \n\n \n | \n
|---|---|
| \n Solvay Argentina SA, Buenos Aires | \n\n 100 | \n
| \n Quimicos Esenciales de Argentina SA, Buenos Aires | \n\n 100 | \n
| \n AUSTRALIA | \n\n \n | \n
| \n Solvay Interox Pty Ltd, Banksmeadow | \n\n 100 | \n
| \n AUSTRIA | \n\n \n | \n
| \n Solvay \u00d6sterreich GmbH, Wien | \n\n 100 | \n
| \n BELGIUM | \n\n \n | \n
| \n Carri\u00e8res les Petons S.P.R.L., Walcourt | \n\n 100 | \n
| \n Solvay Chemicals International S.A., Brussels | \n\n 100 | \n
| \n Solvay Chimie S.A., Brussels | \n\n 100 | \n
| \n Solvay Pharmaceuticals S.A. - Management Services, Brussels | \n\n 100 | \n
| \n Solvay Stock Option Management S.P.R.L., Brussels | \n\n 100 | \n
| \n BRAZIL | \n\n \n | \n
| \n Cogeracao de Energia Electricica Rhodia Brotas SA, Brotas | \n\n 100 | \n
| \n Rhodia Brasil SA, Sao Paolo | \n\n 100 | \n
| \n Rhodia Poliamida Brasil Ltda , Sao Paolo | \n\n 100 | \n
| \n Rhopart-Participacoes Servidos e Comercio Ltda, Sao Paolo | \n\n 100 | \n
| \n BULGARIA | \n\n \n | \n
| \n Solvay Bulgaria EAD, Devnya | \n\n 100 | \n
| \n CANADA | \n\n \n | \n
| \n Solvay Canada Inc, Toronto | \n\n 100 | \n
| \n CHILE | \n\n \n | \n
| \n Rhodia Chile Ltda, Santiago | \n\n 100 | \n
| \n CHINA | \n\n \n | \n
| \n Essential (Shanghai) Enterprise Management Co., Shanghai | \n\n 100 | \n
| \n Liyang Solvay Rare Earth New Material Co., Ltd, Liyang City | \n\n 96.3 | \n
| \n Shandong Huatai Interox Chemical Co. Ltd, Dongying | \n\n 60 | \n
| \n Solvay (Shanghai) International Trading Co., Ltd, Shanghai | \n\n 100 | \n
| \n Solvay Chemicals (Shanghai) Co. Ltd, Shanghai | \n\n 100 | \n
| \n Solvay Fine Chemical Additives (Qingdao) Co., Ltd, Qingdao | \n\n 100 | \n
| \n Solvay Lantian (Quzhou) Chemicals Co., Ltd, Zhejiang | \n\n 55 | \n
| \n FINLAND | \n\n \n | \n
| \n Solvay Chemicals Finland Oy, Voikkaa | \n\n 100 | \n
| \n FRANCE | \n\n \n | \n
| \n Rhodia Chimie S.A.S., Aubervilliers | \n\n 100 | \n
| \n Rhodia Operations S.A.S., Aubervilliers | \n\n 100 | \n
| \n Solvay - Op\u00e9rations - France S.A.S., Paris | \n\n 100 | \n
| \n Solvay Finance S.A., Paris | \n\n 100 | \n
| \n GERMANY | \n\n \n | \n
| \n Cavity GmbH, Hannover | \n\n 100 | \n
| \n Horizon Immobilien AG, Hannover | \n\n 100 | \n
| \n Salzgewinnungsgesellschaft Westfalen GmbH & Co KG, Hannover | \n\n 65 | \n
| \n German limited partnership, which makes use of the exemptions offered by Section 264(b) of the German Commercial Code, not to publish their annual financial statements. | \n\n \n | \n
| \n Solvay GmbH, Hannover | \n\n 100 | \n
| \n INDIA | \n\n \n | \n
| \n ES Essential Chemicals Private Limited, Mumbai | \n\n 100 | \n
| \n ITALY | \n\n \n | \n
| \n Cogeneration Rosignano S.r.l., Rosignano | \n\n 100 | \n
| \n Essentials Chemicals Italy S.p.a., Livorno | \n\n 100 | \n
| \n Solvay Chimica Italia S.p.A., Milano | \n\n 100 | \n
| \n Solvay Energy Services Italia S.r.l., Bollate | \n\n 100 | \n
| \n JAPAN | \n\n \n | \n
| \n Nippon Solvay KK, Tokyo | \n\n 100 | \n
| \n Solvay Special Chem Japan Ltd, Anan City | \n\n 100 | \n
| \n LUXEMBOURG | \n\n \n | \n
| \n Renestia S.A., Capellen | \n\n 100 | \n
| \n Solvay Chlorovinyls Holding S.a.r.l., Luxembourg | \n\n 100 | \n
| \n MEXICO | \n\n \n | \n
| \n Solvay Fluor Mexico S.A. de C.V., Ciudad Juarez | \n\n 100 | \n
| \n Solvay Mexicana S. de R.L. de C.V., Monterrey | \n\n 100 | \n
| \n NETHERLANDS | \n\n \n | \n
| \n Solvay Chemicals and Plastics Holding B.V., Linne-Herten | \n\n 100 | \n
| \n Solvay Chemie B.V., Linne-Herten | \n\n 100 | \n
| \n Solvin Holding Nederland B.V., Linne-Herten | \n\n 100 | \n
| \n POLAND | \n\n \n | \n
| \n Solvay Poland Sp. z o.o. , Gorzow Wielkopolski | \n\n 100 | \n
| \n PORTUGAL | \n\n \n | \n
| \n Solvay Business Services Portugal Unipessoal Lda, Carnaxide | \n\n 100 | \n
| \n Solvay Peroxidos Portugal Unipessoal LDA , Povoa | \n\n 100 | \n
| \n SINGAPORE | \n\n \n | \n
| \n Solvay Fluor Holding (Asia-Pacific) Pte. Ltd., Singapore | \n\n 100 | \n
| \n SOUTH AFRICA | \n\n \n | \n
| \n Solvay Polymers and Chemicals South Africa (PTY) Ltd, Johannesburg | \n\n 100 | \n
| \n SOUTH KOREA | \n\n \n | \n
| \n Special Chem Korea Co. Ltd, Gunsan | \n\n 100 | \n
| \n Solvay Chemical Services Korea Co. Ltd, Seoul | \n\n 100 | \n
| \n Solvay Silica Korea Co. Ltd , Incheon | \n\n 100 | \n
| \n SPAIN | \n\n \n | \n
| \n Solvay Quimica S.L., Barcelona | \n\n 100 | \n
| \n SWITZERLAND | \n\n \n | \n
| \n Solvay Vinyls Holding AG, Bad Zurzach | \n\n 100 | \n
| \n THAILAND | \n\n \n | \n
| \n Solvay Asia Pacific Company Ltd, Bangkok | \n\n 100 | \n
| \n Solvay Peroxythai Ltd, Bangkok | \n\n 100 | \n
| \n TURKEY | \n\n \n | \n
| \n Essential Istanbul Chemical Items Industry and Trade Limited Company, Istanbul | \n\n 100 | \n
| \n UNITED KINGDOM | \n\n \n | \n
| \n Rhodia Limited , Watford | \n\n 100 | \n
| \n Solvay Interox Ltd, Warrington | \n\n 100 | \n
| \n Solvay UK Holding Company Ltd, Warrington | \n\n 100 | \n
| \n UNITED STATES | \n\n \n | \n
| \n American Soda LLC, Houston, TX | \n\n 100 | \n
| \n Essential Finance (America) LLC, Wilmington DE | \n\n 100 | \n
| \n Essential Holding America, LLC, Wilmington, DE | \n\n 100 | \n
| \n Essential Elements USA LLC, Wilmington, DE | \n\n 100 | \n
| \n Essential Chemicals USA LLC, Wilmington, DE | \n\n 100 | \n
| \n Rocky Mountain Coal Company, LLC, Houston, TX | \n\n 100 | \n
| \n Solvay America Holdings, Inc., Houston, TX | \n\n 100 | \n
| \n Solvay Chemicals, Inc., Houston, TX | \n\n 100 | \n
| \n Solvay Fluorides, LLC., St Louis, IL | \n\n 100 | \n
A subsidiary is an entity over which the Group has control. Control is achieved when the Group has (a) power over an investee, (b) exposure, or rights, to variable returns from its involvement with the investee, and (c) the ability to use its power over the investee to affect the amount of the investor\u2019s returns. To assess whether the Group has control, potential voting rights are taken into account. Subsidiaries are fully consolidated. The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition and up to the effective date of disposal.
Intra-group transactions, balances, income and expenses are eliminated on consolidation.
Non-controlling interests in subsidiaries are presented separately from the Group\u2019s equity. Non-controlling interests are initially measured, either at fair value (full goodwill method), or at the non-controlling interests\u2019 proportionate share in the recognized amounts of the acquiree\u2019s identifiable net assets (proportionate goodwill method). The choice of measurement is made on an acquisition-by-acquisition basis. Subsequent to the acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests\u2019 share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.
Changes in the Group\u2019s equity interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The carrying amounts of the Group\u2019s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.
When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest, and (ii) the previous carrying amount of the assets (including goodwill) and liabilities of the subsidiary and any non-controlling interests. Amounts previously recognized in other comprehensive income in relation to the subsidiary are accounted for (i.e.\u00a0Reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be required if the relevant assets or liabilities were disposed of. The fair value of any investment retained in the former subsidiary at the date when control is lost is considered to be the fair value on initial recognition for subsequent accounting in accordance with IFRS 9 or, when applicable, the cost on initial recognition of an investment in an associate or joint venture in accordance with IAS 28 Investments in Associates and Joint Ventures.
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about relevant activities require the unanimous consent of the parties sharing control. In its consolidated financial statements, the Group recognizes its contractual share of the joint operations\u2019 assets, liabilities, revenue and expenses, which is generally aligned with the ownership interest in the joint operations.
An associate is an entity over which the Group has significant influence and that is neither a subsidiary, nor an interest in a joint arrangement. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about relevant activities require the unanimous consent of the parties sharing control.
The results, assets and liabilities of associates and joint ventures are incorporated in the consolidated financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Under the equity method, on initial recognition, investments in associates and joint ventures are recognized in the consolidated statement of financial position at cost, and the carrying amount is adjusted for post-acquisition changes in the Group\u2019s share of the net assets of the associate or joint venture, less any impairment of the value of individual investments. Losses of an associate or joint venture in excess of the Group\u2019s interest in that associate or joint venture (which includes any long-term interests that, in substance, form part of the Group\u2019s net investment in the associate or joint venture) are recognized only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture.
Any excess of the cost of acquisition over the Group\u2019s share of the net fair value of the identifiable assets and (contingent) liabilities of the associate or joint venture recognized at the date of acquisition is goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of that\u00a0investment.
Where a Group entity transacts with an associate or joint venture of the Group, profits and losses are eliminated to the extent of the Group\u2019s interest in the relevant associate or joint venture.
After application of the equity method, the Group reviews its investments in associates and joint ventures for impairment. At each reporting date, the Group determines whether there is objective evidence that the investment in the associate or joint venture is impaired. If there is such evidence, the Group performs its analysis and calculates any impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value, and then recognizes the loss in the consolidated income statement.
NOTE F22
Investments in associates and\u00a0joint ventures
The list of associates and joint ventures is available in the note F40 List of companies included in the consolidation scope.
The associates and joint ventures not classified as held for sale/discontinued operations are accounted for under the equity method of accounting.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|---|
| \n Associates | \n\n Joint ventures | \n\n Total | \n\n Associates | \n\n Joint ventures | \n\n Total | \n|
| \n Investments in associates and joint ventures | \n\n 47 | \n\n 169 | \n\n 216 | \n\n 42 | \n\n 188 | \n\n 230 | \n
| \n Earnings from associates and joint ventures | \n\n 4 | \n\n 35 | \n\n 38 | \n\n 3 | \n\n 50 | \n\n 53 | \n
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n January 1 | \n\n 42 | \n\n 18 | \n
| \n Profit for the year | \n\n 4 | \n\n 4 | \n
| \n Dividends received | \n\n -1 | \n\n -1 | \n
| \n Currency translation differences | \n\n 3 | \n\n 0 | \n
| \n Partial Demerger | \n\n 0 | \n\n 20 | \n
| \n December 31 | \n\n 47 | \n\n 42 | \n
In 2023, the figures contain the amounts related to Specialty Businesses until December 8.
The amount in Partial Demerger results mainly from loss of control due to partial demerger and the change of the consolidation scope from full consolidation to equity accounting.
The tables below present the summarized financial information of all the associates and the summarized financial information of the major associates. The associates had no contingent liabilities or capital commitments as at December 31, 2024 and 2023.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|---|
| \n Total | \n\n Of which Quingdao Hiwin Solvay Chemicals | \n\n Of which Solvay (Zhenjiang) Chemicals | \n\n Total | \n\n Of which Quingdao Hiwin Solvay Chemicals | \n\n Of which Solvay (Zhenjiang) Chemicals | \n|
| \n Ownership interest | \n\n \n | \n\n 30% | \n\n 9% | \n\n \n | \n\n 30% | \n\n 9% | \n
| \n Operating Segment | \n\n \n | \n\n Performance Chemicals | \n\n Basic Chemicals | \n\n \n | \n\n Performance Chemicals | \n\n Basic Chemicals | \n
| \n Statement of financial position | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current assets | \n\n 169 | \n\n 22 | \n\n 137 | \n\n 163 | \n\n 24 | \n\n 130 | \n
| \n Current assets | \n\n 242 | \n\n 22 | \n\n 211 | \n\n 231 | \n\n 20 | \n\n 202 | \n
| \n Cash and cash equivalents | \n\n 9 | \n\n 7 | \n\n 1 | \n\n 139 | \n\n 4 | \n\n 135 | \n
| \n Non-current liabilities | \n\n 4 | \n\n 1 | \n\n 1 | \n\n 4 | \n\n 2 | \n\n 1 | \n
| \n Non-current financial debt | \n\n 2 | \n\n 0 | \n\n 1 | \n\n 2 | \n\n 0 | \n\n 0 | \n
| \n Current liabilities | \n\n 89 | \n\n 16 | \n\n 68 | \n\n 86 | \n\n 20 | \n\n 61 | \n
| \n Current financial debt | \n\n 4 | \n\n 4 | \n\n 1 | \n\n 4 | \n\n 4 | \n\n 0 | \n
| \n Net asset | \n\n 319 | \n\n 27 | \n\n 279 | \n\n 304 | \n\n 23 | \n\n 270 | \n
| \n Carrying Amount of the interest in the Associate | \n\n 47 | \n\n 8 | \n\n 26 | \n\n 42 | \n\n 7 | \n\n 25 | \n
| \n Income statement | \n\n 2024 | \n\n 2023 | \n||||
|---|---|---|---|---|---|---|
| \n Sales | \n\n 340 | \n\n 52 | \n\n 276 | \n\n 69 | \n\n 54 | \n\n \n | \n
| \n Depreciation and amortization | \n\n 3 | \n\n 3 | \n\n 0 | \n\n 3 | \n\n 3 | \n\n \n | \n
| \n Interest on loans and short term deposits | \n\n 1 | \n\n 0 | \n\n 0 | \n\n 2 | \n\n 0 | \n\n \n | \n
| \n Profit for the year from continuing operations | \n\n 29 | \n\n 3 | \n\n 25 | \n\n 3 | \n\n 1 | \n\n \n | \n
| \n Profit for the year | \n\n 29 | \n\n 3 | \n\n 25 | \n\n 3 | \n\n 1 | \n\n \n | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Total comprehensive income | \n\n 29 | \n\n 3 | \n\n 25 | \n\n 4 | \n\n 1 | \n\n \n | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends received | \n\n 1 | \n\n 0 | \n\n 1 | \n\n 1 | \n\n 0 | \n\n \n | \n
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n January 1 | \n\n 188 | \n\n 790 | \n
| \n Additions | \n\n 0 | \n\n 0 | \n
| \n Capital increase / (decrease) | \n\n 0 | \n\n -3 | \n
| \n Profit for the year | \n\n 35 | \n\n 67 | \n
| \n Dividends received | \n\n -20 | \n\n -24 | \n
| \n Currency translation differences | \n\n -13 | \n\n -13 | \n
| \n Impairment reversal | \n\n \n | \n\n 0 | \n
| \n Other | \n\n -21 | \n\n -3 | \n
| \n Sale of RusVinyl | \n\n \n | \n\n -428 | \n
| \n Partial Demerger | \n\n \n | \n\n -197 | \n
| \n December 31 | \n\n 169 | \n\n 188 | \n
In 2023, the figures contain the amounts related to Specialty Businesses until December 8.
The amount in Partial Demerger mainly consists of demerged Strata Solvay Advanced Materials and Hindustan Gum & Chemicals.
The tables below present the summarized financial information of the material joint ventures. The joint ventures had no contingent liabilities or capital commitments as at December 31, 2024 and 2023.
| \n December 31, 2024 | \n\n Peroxidos do Brasil Ltda | \n\n Aqua Pharma Group | \n\n Shinsol Advanced Chemicals | \n
|---|---|---|---|
| \n In \u20ac million | \n\n \n | \n\n \n | \n\n \n | \n
| \n Ownership interest | \n\n 69.40% | \n\n 50% | \n\n 51.0% | \n
| \n Operating Segment | \n\n Basic Chemicals | \n\n Basic Chemicals | \n\n Basic Chemicals | \n
| \n Statement of financial position | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current assets | \n\n 125 | \n\n 20 | \n\n 24 | \n
| \n Current assets | \n\n 152 | \n\n 30 | \n\n 3 | \n
| \n Cash and cash equivalents | \n\n 95 | \n\n 17 | \n\n 1 | \n
| \n Non-current liabilities | \n\n 8 | \n\n 2 | \n\n 6 | \n
| \n Non-current financial debt | \n\n 1 | \n\n 0 | \n\n 6 | \n
| \n Current liabilities | \n\n 69 | \n\n 6 | \n\n 2 | \n
| \n Current financial debt | \n\n 11 | \n\n 0 | \n\n 0 | \n
| \n Net asset | \n\n 199 | \n\n 42 | \n\n 20 | \n
| \n Carrying Amount of the interest in the Joint Venture | \n\n 138 | \n\n 21 | \n\n 10 | \n
| \n 2024 income statement | \n\n \n | \n\n \n | \n\n \n | \n
|---|---|---|---|
| \n Sales | \n\n 176 | \n\n 51 | \n\n 0 | \n
| \n Depreciation and amortization | \n\n -7 | \n\n -4 | \n\n 0 | \n
| \n Cost of borrowings | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Interest on loans and short-term deposits | \n\n 9 | \n\n 0 | \n\n 0 | \n
| \n Income taxes | \n\n -24 | \n\n -2 | \n\n 0 | \n
| \n Profit for the year from continuing operations | \n\n 49 | \n\n 6 | \n\n -6 | \n
| \n Profit for the year | \n\n 49 | \n\n 6 | \n\n -6 | \n
| \n Other comprehensive income | \n\n -12 | \n\n 5 | \n\n 0 | \n
| \n Total comprehensive income | \n\n 38 | \n\n 11 | \n\n -6 | \n
| \n Dividends received | \n\n 20 | \n\n 0 | \n\n 0 | \n
Other comprehensive income mainly comprises the currency translation differences.
| \n December 31, 2023 In \u20ac million | \n\n Peroxidos do Brasil Ltda | \n\n Shandong Huatai Interox Chemical Co. Ltd | \n\n Aqua Pharma Group | \n\n Shinsol Advanced Chemicals | \n
|---|---|---|---|---|
| \n Ownership interest | \n\n 69.40% | \n\n 50% | \n\n 50% | \n\n 51.0% | \n
| \n Operating Segment | \n\n Basic Chemicals | \n\n Basic Chemicals | \n\n Basic Chemicals | \n\n Performance Chemicals | \n
| \n Statement of financial position | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current assets | \n\n 121 | \n\n 7 | \n\n 24 | \n\n 22 | \n
| \n Current assets | \n\n 144 | \n\n 28 | \n\n 20 | \n\n 6 | \n
| \n Cash and cash equivalents | \n\n 84 | \n\n 22 | \n\n 9 | \n\n 6 | \n
| \n Non-current liabilities | \n\n 8 | \n\n - | \n\n 2 | \n\n 4 | \n
| \n Non-current financial debt | \n\n 1 | \n\n 0 | \n\n 0 | \n\n 4 | \n
| \n Current liabilities | \n\n 50 | \n\n 10 | \n\n 5 | \n\n 2 | \n
| \n Current financial debt | \n\n 6 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Net asset | \n\n 206 | \n\n 25 | \n\n 38 | \n\n 23 | \n
| \n Carrying Amount of the interest in the Joint Venture | \n\n 143 | \n\n 12 | \n\n 19 | \n\n 12 | \n
| \n 2023 income statement | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
|---|---|---|---|---|
| \n Sales | \n\n 195 | \n\n 40 | \n\n 32 | \n\n 0 | \n
| \n Depreciation and amortization | \n\n -7 | \n\n -1 | \n\n -3 | \n\n 0 | \n
| \n Cost of borrowings | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Interest on loans and short-term deposits | \n\n 8 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Income taxes | \n\n -23 | \n\n -3 | \n\n -2 | \n\n 0 | \n
| \n Profit for the year from continuing operations | \n\n 56 | \n\n 8 | \n\n -2 | \n\n -2 | \n
| \n Profit for the year | \n\n 56 | \n\n 8 | \n\n -2 | \n\n -2 | \n
| \n Other comprehensive income | \n\n 4 | \n\n 0 | \n\n -3 | \n\n 0 | \n
| \n Total comprehensive income | \n\n 61 | \n\n 8 | \n\n -5 | \n\n -2 | \n
| \n Dividends received | \n\n 18 | \n\n 2 | \n\n 0 | \n\n 0 | \n
Other comprehensive income mainly comprises the currency translation differences.
Peroxidos do Brasil and Solvay Brasil settled the antitrust cases with CADE (the Brazilian antitrust authority). The corresponding amounts and the legal fees were reflected in and adjusted the existing provisions, with a joint effect of \u20ac 3.6 million in the 2024 consolidated profit or loss.
Please refer to the Litigation section of the Risk Management chapter of the Annual Integrated Report for further details.
Those represent the share of non-controlling interests in the net assets and comprehensive income of subsidiaries of the Group and correspond to the interests in subsidiaries that are not held by the Company or its subsidiaries.
NOTE F28
Non-controlling interests
The amounts disclosed below are fully consolidated amounts and do not reflect the impacts from elimination of intragroup transactions.
At the end of 2024, the following most material subsidiaries have non-controlling interests (NCI) totaling \u20ac60 million out of total NCI of \u20ac65 million.
| \n In \u20ac million | \n\n Solvay Lantian (Quzhou) Chemicals | \n\n Salzgewinnungsgezellschaft Westfalen | \n\n Shandong Huatai Interox Chemicals | \n
|---|---|---|---|
| \n Non-controlling ownership interest | \n\n 45% | \n\n 35% | \n\n 40% | \n
| \n Statement of financial position | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current assets | \n\n 25 | \n\n 55 | \n\n 33 | \n
| \n Current assets | \n\n 60 | \n\n 37 | \n\n 21 | \n
| \n Non-current liabilities | \n\n 4 | \n\n 51 | \n\n 1 | \n
| \n Current liabilities | \n\n 14 | \n\n 6 | \n\n 7 | \n
| \n Income statement | \n\n \n | \n\n \n | \n\n \n | \n
| \n Sales | \n\n 86 | \n\n 11 | \n\n 28 | \n
| \n Profit for the year | \n\n 13 | \n\n 3 | \n\n 16 | \n
| \n Other comprehensive income | \n\n 2 | \n\n 1 | \n\n 1 | \n
| \n Total comprehensive income | \n\n 15 | \n\n 4 | \n\n 17 | \n
| \n Dividends paid to non-controlling interests | \n\n 2 | \n\n 0 | \n\n 0 | \n
| \n Share of non-controlling interest in the profit for the year | \n\n 6 | \n\n 1 | \n\n 2 | \n
| \n Accumulated non-controlling interests | \n\n 30 | \n\n 12 | \n\n 18 | \n
At the end of 2023, the following subsidiaries had non-controlling interests totaling \u20ac35 million, out of a total of \u20ac42 million.
| \n In \u20ac million | \n\n Solvay Lantian (Quzhou) Chemicals | \n\n Salzgewinnungsgezellschaft Westfalen | \n
|---|---|---|
| \n Non-controlling ownership interest | \n\n 45% | \n\n 35% | \n
| \n Statement of financial position | \n\n \n | \n\n \n | \n
| \n Non-current assets | \n\n 26 | \n\n 55 | \n
| \n Current assets | \n\n 47 | \n\n 22 | \n
| \n Non-current liabilities | \n\n 3 | \n\n 41 | \n
| \n Current liabilities | \n\n 15 | \n\n 4 | \n
| \n Income statement | \n\n \n | \n\n \n | \n
| \n Sales | \n\n 89 | \n\n 11 | \n
| \n Profit for the year | \n\n 10 | \n\n 7 | \n
| \n Other comprehensive income | \n\n -2 | \n\n -1 | \n
| \n Total comprehensive income | \n\n 8 | \n\n 6 | \n
| \n Dividends paid to non-controlling interests | \n\n 3 | \n\n 0 | \n
| \n Share of non-controlling interest in the profit for the year | \n\n 4 | \n\n 2 | \n
| \n Accumulated non-controlling interests | \n\n 24 | \n\n 11 | \n
The following table gives an overview of the carrying amount of all financial instruments by category as defined by IFRS 9.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Carrying amount | \n\n Carrying amount | \n|
| \n Fair value through profit or loss | \n\n 59 | \n\n 105 | \n
| \n Held for trading (financial instruments - operational - see note F26) | \n\n 2 | \n\n 16 | \n
| \n Held for trading (other financial instruments - see note F33, table Changes in financial debt) | \n\n 1 | \n\n 2 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n 55 | \n\n 87 | \n
| \n Financial assets measured at amortized cost | \n\n 1,497 | \n\n 1,677 | \n
| \n Financial assets measured at amortized cost (including cash and cash equivalents, trade receivables, loans and other current/non-current assets except pension fund surpluses and long-term inventory balance) | \n\n 1,497 | \n\n 1,677 | \n
| \n Financial assets measured at fair value through other comprehensive income | \n\n 85 | \n\n 51 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship (see note F26) | \n\n 78 | \n\n 50 | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n 8 | \n\n 1 | \n
| \n Total financial assets | \n\n 1,642 | \n\n 1,833 | \n
| \n \n | \n\n \n | \n\n \n | \n
| \n Fair value through profit or loss | \n\n -27 | \n\n -37 | \n
| \n Held for trading (financial instruments - operational - see note F34) | \n\n -26 | \n\n -36 | \n
| \n Held for trading (financial debt - see note F33, table Changes in financial debt) | \n\n -2 | \n\n -1 | \n
| \n Financial liabilities measured at amortized cost | \n\n -2,766 | \n\n -2,887 | \n
| \n Financial liabilities measured at amortized cost (excluding dividends payable and IFRS 16 lease liabilities) | \n\n -2,659 | \n\n -2,712 | \n
| \n Dividends payables | \n\n -107 | \n\n -175 | \n
| \n Lease liabilities measured at amortized cost | \n\n -306 | \n\n -307 | \n
| \n Lease liabilities IFRS16 measured at amortized cost | \n\n -306 | \n\n -307 | \n
| \n Financial liabilities measured at fair value through other comprehensive income | \n\n -88 | \n\n -165 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship (see note F34) | \n\n -88 | \n\n -165 | \n
| \n Total financial and lease liabilities | \n\n -3,187 | \n\n -3,395 | \n
The category \u201cHeld for trading\u201d contains derivative financial instruments that are used for management of foreign currency risk, utility and CO2 emission rights price risks, index and shares. Contracts which have been documented as hedging instruments (hedge accounting under IFRS 9 Financial Instruments) or which meet the exemption criteria for own use are not included in the category \u201cHeld for trading.\u201d
At the end of 2024, \u20ac55 million of instruments at fair value through profit or loss relate to equity instruments related to Syensqo Group.
Note F40
List of companies included in\u00a0the\u00a0consolidation scope
The Group consists of Solvay SA/NV and a total of 145 investees.
Of these 145 investees, 71 are fully consolidated, 7 are proportionately consolidated and 20 are accounted for under the equity method, while the other 47 are not material to the Group and therefore are not in the consolidation scope.
These Other Investments, which are insignificant are measured at cost and tested for impairment on an annual basis, which is considered a good proxy of their fair value. For more information, refer to Principles of consolidation.
| \n Country | \n\n Company | \n\n Comments | \n
|---|---|---|
| \n CHILE | \n\n Rhodia Chile Ltda, Santiago | \n\n Meets the consolidation criteria | \n
| \n Country | \n\n Company | \n\n Comments | \n
|---|---|---|
| \n FRANCE | \n\n Solvay Energy Services S.A.S., Puteaux | \n\n Merged into Rhodia Operations S.A.S. | \n
| \n GERMANY | \n\n Solvay Chemicals GmbH, Hannover | \n\n Merged into Solvay GmbH | \n
| \n Solvin GmbH & Co. KG - PVDC, Rheinberg | \n\n Merged into Solvay GmbH | \n|
| \n Solvay Flux GmbH, Hannover | \n\n Merged into Solvay GmbH | \n|
| \n Solvay Fluor GmbH, Hannover | \n\n Merged into Solvay GmbH | \n|
| \n Solvin Holding GmbH, Hannover | \n\n Merged into Solvay GmbH | \n|
| \n NETHERLANDS | \n\n Rhodia International Holdings B.V., Den Haag | \n\n Merged into Solvay Chemicals and Plastics Holding B.V. | \n
| \n Country | \n\n Company | \n\n Comments | \n
|---|---|---|
| \n CHINA | \n\n Shandong Huatai Interox Chemical Co. Ltd, Dongying | \n\n Change from equity method to full consolidation due to the\u00a0purchase of additional 10% of Dongying Huatai Chemicals Group's\u00a0shares | \n
Indicating the percentage holding.
The percentage of voting rights is very close to the percentage holding.
| \n ARGENTINA | \n\n \n | \n
|---|---|
| \n Solvay Argentina SA, Buenos Aires | \n\n 100 | \n
| \n Quimicos Esenciales de Argentina SA, Buenos Aires | \n\n 100 | \n
| \n AUSTRALIA | \n\n \n | \n
| \n Solvay Interox Pty Ltd, Banksmeadow | \n\n 100 | \n
| \n AUSTRIA | \n\n \n | \n
| \n Solvay \u00d6sterreich GmbH, Wien | \n\n 100 | \n
| \n BELGIUM | \n\n \n | \n
| \n Carri\u00e8res les Petons S.P.R.L., Walcourt | \n\n 100 | \n
| \n Solvay Chemicals International S.A., Brussels | \n\n 100 | \n
| \n Solvay Chimie S.A., Brussels | \n\n 100 | \n
| \n Solvay Pharmaceuticals S.A. - Management Services, Brussels | \n\n 100 | \n
| \n Solvay Stock Option Management S.P.R.L., Brussels | \n\n 100 | \n
| \n BRAZIL | \n\n \n | \n
| \n Cogeracao de Energia Electricica Rhodia Brotas SA, Brotas | \n\n 100 | \n
| \n Rhodia Brasil SA, Sao Paolo | \n\n 100 | \n
| \n Rhodia Poliamida Brasil Ltda , Sao Paolo | \n\n 100 | \n
| \n Rhopart-Participacoes Servidos e Comercio Ltda, Sao Paolo | \n\n 100 | \n
| \n BULGARIA | \n\n \n | \n
| \n Solvay Bulgaria EAD, Devnya | \n\n 100 | \n
| \n CANADA | \n\n \n | \n
| \n Solvay Canada Inc, Toronto | \n\n 100 | \n
| \n CHILE | \n\n \n | \n
| \n Rhodia Chile Ltda, Santiago | \n\n 100 | \n
| \n CHINA | \n\n \n | \n
| \n Essential (Shanghai) Enterprise Management Co., Shanghai | \n\n 100 | \n
| \n Liyang Solvay Rare Earth New Material Co., Ltd, Liyang City | \n\n 96.3 | \n
| \n Shandong Huatai Interox Chemical Co. Ltd, Dongying | \n\n 60 | \n
| \n Solvay (Shanghai) International Trading Co., Ltd, Shanghai | \n\n 100 | \n
| \n Solvay Chemicals (Shanghai) Co. Ltd, Shanghai | \n\n 100 | \n
| \n Solvay Fine Chemical Additives (Qingdao) Co., Ltd, Qingdao | \n\n 100 | \n
| \n Solvay Lantian (Quzhou) Chemicals Co., Ltd, Zhejiang | \n\n 55 | \n
| \n FINLAND | \n\n \n | \n
| \n Solvay Chemicals Finland Oy, Voikkaa | \n\n 100 | \n
| \n FRANCE | \n\n \n | \n
| \n Rhodia Chimie S.A.S., Aubervilliers | \n\n 100 | \n
| \n Rhodia Operations S.A.S., Aubervilliers | \n\n 100 | \n
| \n Solvay - Op\u00e9rations - France S.A.S., Paris | \n\n 100 | \n
| \n Solvay Finance S.A., Paris | \n\n 100 | \n
| \n GERMANY | \n\n \n | \n
| \n Cavity GmbH, Hannover | \n\n 100 | \n
| \n Horizon Immobilien AG, Hannover | \n\n 100 | \n
| \n Salzgewinnungsgesellschaft Westfalen GmbH & Co KG, Hannover | \n\n 65 | \n
| \n German limited partnership, which makes use of the exemptions offered by Section 264(b) of the German Commercial Code, not to publish their annual financial statements. | \n\n \n | \n
| \n Solvay GmbH, Hannover | \n\n 100 | \n
| \n INDIA | \n\n \n | \n
| \n ES Essential Chemicals Private Limited, Mumbai | \n\n 100 | \n
| \n ITALY | \n\n \n | \n
| \n Cogeneration Rosignano S.r.l., Rosignano | \n\n 100 | \n
| \n Essentials Chemicals Italy S.p.a., Livorno | \n\n 100 | \n
| \n Solvay Chimica Italia S.p.A., Milano | \n\n 100 | \n
| \n Solvay Energy Services Italia S.r.l., Bollate | \n\n 100 | \n
| \n JAPAN | \n\n \n | \n
| \n Nippon Solvay KK, Tokyo | \n\n 100 | \n
| \n Solvay Special Chem Japan Ltd, Anan City | \n\n 100 | \n
| \n LUXEMBOURG | \n\n \n | \n
| \n Renestia S.A., Capellen | \n\n 100 | \n
| \n Solvay Chlorovinyls Holding S.a.r.l., Luxembourg | \n\n 100 | \n
| \n MEXICO | \n\n \n | \n
| \n Solvay Fluor Mexico S.A. de C.V., Ciudad Juarez | \n\n 100 | \n
| \n Solvay Mexicana S. de R.L. de C.V., Monterrey | \n\n 100 | \n
| \n NETHERLANDS | \n\n \n | \n
| \n Solvay Chemicals and Plastics Holding B.V., Linne-Herten | \n\n 100 | \n
| \n Solvay Chemie B.V., Linne-Herten | \n\n 100 | \n
| \n Solvin Holding Nederland B.V., Linne-Herten | \n\n 100 | \n
| \n POLAND | \n\n \n | \n
| \n Solvay Poland Sp. z o.o. , Gorzow Wielkopolski | \n\n 100 | \n
| \n PORTUGAL | \n\n \n | \n
| \n Solvay Business Services Portugal Unipessoal Lda, Carnaxide | \n\n 100 | \n
| \n Solvay Peroxidos Portugal Unipessoal LDA , Povoa | \n\n 100 | \n
| \n SINGAPORE | \n\n \n | \n
| \n Solvay Fluor Holding (Asia-Pacific) Pte. Ltd., Singapore | \n\n 100 | \n
| \n SOUTH AFRICA | \n\n \n | \n
| \n Solvay Polymers and Chemicals South Africa (PTY) Ltd, Johannesburg | \n\n 100 | \n
| \n SOUTH KOREA | \n\n \n | \n
| \n Special Chem Korea Co. Ltd, Gunsan | \n\n 100 | \n
| \n Solvay Chemical Services Korea Co. Ltd, Seoul | \n\n 100 | \n
| \n Solvay Silica Korea Co. Ltd , Incheon | \n\n 100 | \n
| \n SPAIN | \n\n \n | \n
| \n Solvay Quimica S.L., Barcelona | \n\n 100 | \n
| \n SWITZERLAND | \n\n \n | \n
| \n Solvay Vinyls Holding AG, Bad Zurzach | \n\n 100 | \n
| \n THAILAND | \n\n \n | \n
| \n Solvay Asia Pacific Company Ltd, Bangkok | \n\n 100 | \n
| \n Solvay Peroxythai Ltd, Bangkok | \n\n 100 | \n
| \n TURKEY | \n\n \n | \n
| \n Essential Istanbul Chemical Items Industry and Trade Limited Company, Istanbul | \n\n 100 | \n
| \n UNITED KINGDOM | \n\n \n | \n
| \n Rhodia Limited , Watford | \n\n 100 | \n
| \n Solvay Interox Ltd, Warrington | \n\n 100 | \n
| \n Solvay UK Holding Company Ltd, Warrington | \n\n 100 | \n
| \n UNITED STATES | \n\n \n | \n
| \n American Soda LLC, Houston, TX | \n\n 100 | \n
| \n Essential Finance (America) LLC, Wilmington DE | \n\n 100 | \n
| \n Essential Holding America, LLC, Wilmington, DE | \n\n 100 | \n
| \n Essential Elements USA LLC, Wilmington, DE | \n\n 100 | \n
| \n Essential Chemicals USA LLC, Wilmington, DE | \n\n 100 | \n
| \n Rocky Mountain Coal Company, LLC, Houston, TX | \n\n 100 | \n
| \n Solvay America Holdings, Inc., Houston, TX | \n\n 100 | \n
| \n Solvay Chemicals, Inc., Houston, TX | \n\n 100 | \n
| \n Solvay Fluorides, LLC., St Louis, IL | \n\n 100 | \n
Indicating the percentage holding.
| \n AUSTRIA | \n\n \n | \n
|---|---|
| \n Solvay Sisecam Holding AG, Wien | \n\n 75 | \n
| \n BELGIUM | \n\n \n | \n
| \n BASF Interox H2O2 Production N.V., Brussels | \n\n 50 | \n
| \n BULGARIA | \n\n \n | \n
| \n Solvay Sodi AD, Devnya | \n\n 73.5 | \n
| \n NETHERLANDS | \n\n \n | \n
| \n MTP HP JV C.V., Weesp | \n\n 50 | \n
| \n MTP HP JV Management bv, Weesp | \n\n 50 | \n
| \n SAUDI ARABIA | \n\n \n | \n
| \n Saudi Hydrogen Peroxide Co, Jubail | \n\n 50 | \n
| \n THAILAND | \n\n \n | \n
| \n MTP HP JV (Thailand) Ltd, Bangkok | \n\n 50 | \n
Indicating the percentage holding.
| \n AUSTRALIA | \n\n \n | \n
|---|---|
| \n Aqua Pharma Australia Pty Ltd, Armidale | \n\n 50 | \n
| \n Aquatiq Prawns Ltd, Launceston | \n\n 50 | \n
| \n BELGIUM | \n\n \n | \n
| \n Aqua Pharma Belgium Srl, Herent | \n\n 50 | \n
| \n BRAZIL | \n\n \n | \n
| \n Peroxidos do Brasil Ltda, Sao Paulo | \n\n 69.4 | \n
| \n CANADA | \n\n \n | \n
| \n Aqua Pharma Inc, Saint John | \n\n 50 | \n
| \n CHILE | \n\n \n | \n
| \n Aqua Pharma Chile Spa, Puerto Montt | \n\n 50 | \n
| \n ECUADOR | \n\n \n | \n
| \n Aqua Pharma Ecuador S.A, Guayas | \n\n 50 | \n
| \n INDONESIA | \n\n \n | \n
| \n PT Aqua Pharma Indonesia Ltd, Jakarta | \n\n 50 | \n
| \n NORWAY | \n\n \n | \n
| \n Aqua Pharma Group A.S., Lillehammer | \n\n 50 | \n
| \n Aqua Pharma A.S., Lillehammer | \n\n 50 | \n
| \n Haugaland Shipping A.S., Haugesund | \n\n 50 | \n
| \n TAIWAN | \n\n \n | \n
| \n Shinsol Advanced Chemicals Corporation, New Taipei | \n\n 51 | \n
| \n UNITED KINGDOM | \n\n \n | \n
| \n Aqua Pharma Technical Ltd, Inverness | \n\n 50 | \n
| \n Aqua Pharma Ltd, Inverness | \n\n 50 | \n
| \n Pulcea Ltd, Edinburgh | \n\n 25 | \n
| \n UNITED STATES | \n\n \n | \n
| \n Aqua Pharma U.S. Inc, Kirkland | \n\n 50 | \n
| \n CHINA | \n\n \n | \n
|---|---|
| \n Qingdao Hiwin Solvay Chemicals Co. Ltd, Qingdao | \n\n 30 | \n
| \n Solvay (Zhenjiang) Chemicals Co., Ltd, Zhenjiang New area | \n\n 9.35 | \n
| \n FRANCE | \n\n \n | \n
| \n GIE Chime Salindres, Salindres | \n\n 50 | \n
| \n MEXICO | \n\n \n | \n
| \n Silicatos y Derivados S.A. DE C.V., Estado de Mexico | \n\n 20 | \n
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about relevant activities require the unanimous consent of the parties sharing control. In its consolidated financial statements, the Group recognizes its contractual share of the joint operations\u2019 assets, liabilities, revenue and expenses, which is generally aligned with the ownership interest in the joint operations.
The following table gives an overview of the carrying amount of all financial instruments by category as defined by IFRS 9.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Carrying amount | \n\n Carrying amount | \n|
| \n Fair value through profit or loss | \n\n 59 | \n\n 105 | \n
| \n Held for trading (financial instruments - operational - see note F26) | \n\n 2 | \n\n 16 | \n
| \n Held for trading (other financial instruments - see note F33, table Changes in financial debt) | \n\n 1 | \n\n 2 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n 55 | \n\n 87 | \n
| \n Financial assets measured at amortized cost | \n\n 1,497 | \n\n 1,677 | \n
| \n Financial assets measured at amortized cost (including cash and cash equivalents, trade receivables, loans and other current/non-current assets except pension fund surpluses and long-term inventory balance) | \n\n 1,497 | \n\n 1,677 | \n
| \n Financial assets measured at fair value through other comprehensive income | \n\n 85 | \n\n 51 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship (see note F26) | \n\n 78 | \n\n 50 | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n 8 | \n\n 1 | \n
| \n Total financial assets | \n\n 1,642 | \n\n 1,833 | \n
| \n \n | \n\n \n | \n\n \n | \n
| \n Fair value through profit or loss | \n\n -27 | \n\n -37 | \n
| \n Held for trading (financial instruments - operational - see note F34) | \n\n -26 | \n\n -36 | \n
| \n Held for trading (financial debt - see note F33, table Changes in financial debt) | \n\n -2 | \n\n -1 | \n
| \n Financial liabilities measured at amortized cost | \n\n -2,766 | \n\n -2,887 | \n
| \n Financial liabilities measured at amortized cost (excluding dividends payable and IFRS 16 lease liabilities) | \n\n -2,659 | \n\n -2,712 | \n
| \n Dividends payables | \n\n -107 | \n\n -175 | \n
| \n Lease liabilities measured at amortized cost | \n\n -306 | \n\n -307 | \n
| \n Lease liabilities IFRS16 measured at amortized cost | \n\n -306 | \n\n -307 | \n
| \n Financial liabilities measured at fair value through other comprehensive income | \n\n -88 | \n\n -165 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship (see note F34) | \n\n -88 | \n\n -165 | \n
| \n Total financial and lease liabilities | \n\n -3,187 | \n\n -3,395 | \n
The category \u201cHeld for trading\u201d contains derivative financial instruments that are used for management of foreign currency risk, utility and CO2 emission rights price risks, index and shares. Contracts which have been documented as hedging instruments (hedge accounting under IFRS 9 Financial Instruments) or which meet the exemption criteria for own use are not included in the category \u201cHeld for trading.\u201d
At the end of 2024, \u20ac55 million of instruments at fair value through profit or loss relate to equity instruments related to Syensqo Group.
Note F40
List of companies included in\u00a0the\u00a0consolidation scope
The Group consists of Solvay SA/NV and a total of 145 investees.
Of these 145 investees, 71 are fully consolidated, 7 are proportionately consolidated and 20 are accounted for under the equity method, while the other 47 are not material to the Group and therefore are not in the consolidation scope.
These Other Investments, which are insignificant are measured at cost and tested for impairment on an annual basis, which is considered a good proxy of their fair value. For more information, refer to Principles of consolidation.
| \n Country | \n\n Company | \n\n Comments | \n
|---|---|---|
| \n CHILE | \n\n Rhodia Chile Ltda, Santiago | \n\n Meets the consolidation criteria | \n
| \n Country | \n\n Company | \n\n Comments | \n
|---|---|---|
| \n FRANCE | \n\n Solvay Energy Services S.A.S., Puteaux | \n\n Merged into Rhodia Operations S.A.S. | \n
| \n GERMANY | \n\n Solvay Chemicals GmbH, Hannover | \n\n Merged into Solvay GmbH | \n
| \n Solvin GmbH & Co. KG - PVDC, Rheinberg | \n\n Merged into Solvay GmbH | \n|
| \n Solvay Flux GmbH, Hannover | \n\n Merged into Solvay GmbH | \n|
| \n Solvay Fluor GmbH, Hannover | \n\n Merged into Solvay GmbH | \n|
| \n Solvin Holding GmbH, Hannover | \n\n Merged into Solvay GmbH | \n|
| \n NETHERLANDS | \n\n Rhodia International Holdings B.V., Den Haag | \n\n Merged into Solvay Chemicals and Plastics Holding B.V. | \n
| \n Country | \n\n Company | \n\n Comments | \n
|---|---|---|
| \n CHINA | \n\n Shandong Huatai Interox Chemical Co. Ltd, Dongying | \n\n Change from equity method to full consolidation due to the\u00a0purchase of additional 10% of Dongying Huatai Chemicals Group's\u00a0shares | \n
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about relevant activities require the unanimous consent of the parties sharing control. In its consolidated financial statements, the Group recognizes its contractual share of the joint operations\u2019 assets, liabilities, revenue and expenses, which is generally aligned with the ownership interest in the joint operations.
An associate is an entity over which the Group has significant influence and that is neither a subsidiary, nor an interest in a joint arrangement. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about relevant activities require the unanimous consent of the parties sharing control.
The results, assets and liabilities of associates and joint ventures are incorporated in the consolidated financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Under the equity method, on initial recognition, investments in associates and joint ventures are recognized in the consolidated statement of financial position at cost, and the carrying amount is adjusted for post-acquisition changes in the Group\u2019s share of the net assets of the associate or joint venture, less any impairment of the value of individual investments. Losses of an associate or joint venture in excess of the Group\u2019s interest in that associate or joint venture (which includes any long-term interests that, in substance, form part of the Group\u2019s net investment in the associate or joint venture) are recognized only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture.
Any excess of the cost of acquisition over the Group\u2019s share of the net fair value of the identifiable assets and (contingent) liabilities of the associate or joint venture recognized at the date of acquisition is goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of that\u00a0investment.
Where a Group entity transacts with an associate or joint venture of the Group, profits and losses are eliminated to the extent of the Group\u2019s interest in the relevant associate or joint venture.
After application of the equity method, the Group reviews its investments in associates and joint ventures for impairment. At each reporting date, the Group determines whether there is objective evidence that the investment in the associate or joint venture is impaired. If there is such evidence, the Group performs its analysis and calculates any impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value, and then recognizes the loss in the consolidated income statement.
NOTE F22
Investments in associates and\u00a0joint ventures
The list of associates and joint ventures is available in the note F40 List of companies included in the consolidation scope.
The associates and joint ventures not classified as held for sale/discontinued operations are accounted for under the equity method of accounting.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|---|
| \n Associates | \n\n Joint ventures | \n\n Total | \n\n Associates | \n\n Joint ventures | \n\n Total | \n|
| \n Investments in associates and joint ventures | \n\n 47 | \n\n 169 | \n\n 216 | \n\n 42 | \n\n 188 | \n\n 230 | \n
| \n Earnings from associates and joint ventures | \n\n 4 | \n\n 35 | \n\n 38 | \n\n 3 | \n\n 50 | \n\n 53 | \n
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n January 1 | \n\n 42 | \n\n 18 | \n
| \n Profit for the year | \n\n 4 | \n\n 4 | \n
| \n Dividends received | \n\n -1 | \n\n -1 | \n
| \n Currency translation differences | \n\n 3 | \n\n 0 | \n
| \n Partial Demerger | \n\n 0 | \n\n 20 | \n
| \n December 31 | \n\n 47 | \n\n 42 | \n
In 2023, the figures contain the amounts related to Specialty Businesses until December 8.
The amount in Partial Demerger results mainly from loss of control due to partial demerger and the change of the consolidation scope from full consolidation to equity accounting.
The tables below present the summarized financial information of all the associates and the summarized financial information of the major associates. The associates had no contingent liabilities or capital commitments as at December 31, 2024 and 2023.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|---|
| \n Total | \n\n Of which Quingdao Hiwin Solvay Chemicals | \n\n Of which Solvay (Zhenjiang) Chemicals | \n\n Total | \n\n Of which Quingdao Hiwin Solvay Chemicals | \n\n Of which Solvay (Zhenjiang) Chemicals | \n|
| \n Ownership interest | \n\n \n | \n\n 30% | \n\n 9% | \n\n \n | \n\n 30% | \n\n 9% | \n
| \n Operating Segment | \n\n \n | \n\n Performance Chemicals | \n\n Basic Chemicals | \n\n \n | \n\n Performance Chemicals | \n\n Basic Chemicals | \n
| \n Statement of financial position | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current assets | \n\n 169 | \n\n 22 | \n\n 137 | \n\n 163 | \n\n 24 | \n\n 130 | \n
| \n Current assets | \n\n 242 | \n\n 22 | \n\n 211 | \n\n 231 | \n\n 20 | \n\n 202 | \n
| \n Cash and cash equivalents | \n\n 9 | \n\n 7 | \n\n 1 | \n\n 139 | \n\n 4 | \n\n 135 | \n
| \n Non-current liabilities | \n\n 4 | \n\n 1 | \n\n 1 | \n\n 4 | \n\n 2 | \n\n 1 | \n
| \n Non-current financial debt | \n\n 2 | \n\n 0 | \n\n 1 | \n\n 2 | \n\n 0 | \n\n 0 | \n
| \n Current liabilities | \n\n 89 | \n\n 16 | \n\n 68 | \n\n 86 | \n\n 20 | \n\n 61 | \n
| \n Current financial debt | \n\n 4 | \n\n 4 | \n\n 1 | \n\n 4 | \n\n 4 | \n\n 0 | \n
| \n Net asset | \n\n 319 | \n\n 27 | \n\n 279 | \n\n 304 | \n\n 23 | \n\n 270 | \n
| \n Carrying Amount of the interest in the Associate | \n\n 47 | \n\n 8 | \n\n 26 | \n\n 42 | \n\n 7 | \n\n 25 | \n
| \n Income statement | \n\n 2024 | \n\n 2023 | \n||||
|---|---|---|---|---|---|---|
| \n Sales | \n\n 340 | \n\n 52 | \n\n 276 | \n\n 69 | \n\n 54 | \n\n \n | \n
| \n Depreciation and amortization | \n\n 3 | \n\n 3 | \n\n 0 | \n\n 3 | \n\n 3 | \n\n \n | \n
| \n Interest on loans and short term deposits | \n\n 1 | \n\n 0 | \n\n 0 | \n\n 2 | \n\n 0 | \n\n \n | \n
| \n Profit for the year from continuing operations | \n\n 29 | \n\n 3 | \n\n 25 | \n\n 3 | \n\n 1 | \n\n \n | \n
| \n Profit for the year | \n\n 29 | \n\n 3 | \n\n 25 | \n\n 3 | \n\n 1 | \n\n \n | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Total comprehensive income | \n\n 29 | \n\n 3 | \n\n 25 | \n\n 4 | \n\n 1 | \n\n \n | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends received | \n\n 1 | \n\n 0 | \n\n 1 | \n\n 1 | \n\n 0 | \n\n \n | \n
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n January 1 | \n\n 188 | \n\n 790 | \n
| \n Additions | \n\n 0 | \n\n 0 | \n
| \n Capital increase / (decrease) | \n\n 0 | \n\n -3 | \n
| \n Profit for the year | \n\n 35 | \n\n 67 | \n
| \n Dividends received | \n\n -20 | \n\n -24 | \n
| \n Currency translation differences | \n\n -13 | \n\n -13 | \n
| \n Impairment reversal | \n\n \n | \n\n 0 | \n
| \n Other | \n\n -21 | \n\n -3 | \n
| \n Sale of RusVinyl | \n\n \n | \n\n -428 | \n
| \n Partial Demerger | \n\n \n | \n\n -197 | \n
| \n December 31 | \n\n 169 | \n\n 188 | \n
In 2023, the figures contain the amounts related to Specialty Businesses until December 8.
The amount in Partial Demerger mainly consists of demerged Strata Solvay Advanced Materials and Hindustan Gum & Chemicals.
The tables below present the summarized financial information of the material joint ventures. The joint ventures had no contingent liabilities or capital commitments as at December 31, 2024 and 2023.
| \n December 31, 2024 | \n\n Peroxidos do Brasil Ltda | \n\n Aqua Pharma Group | \n\n Shinsol Advanced Chemicals | \n
|---|---|---|---|
| \n In \u20ac million | \n\n \n | \n\n \n | \n\n \n | \n
| \n Ownership interest | \n\n 69.40% | \n\n 50% | \n\n 51.0% | \n
| \n Operating Segment | \n\n Basic Chemicals | \n\n Basic Chemicals | \n\n Basic Chemicals | \n
| \n Statement of financial position | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current assets | \n\n 125 | \n\n 20 | \n\n 24 | \n
| \n Current assets | \n\n 152 | \n\n 30 | \n\n 3 | \n
| \n Cash and cash equivalents | \n\n 95 | \n\n 17 | \n\n 1 | \n
| \n Non-current liabilities | \n\n 8 | \n\n 2 | \n\n 6 | \n
| \n Non-current financial debt | \n\n 1 | \n\n 0 | \n\n 6 | \n
| \n Current liabilities | \n\n 69 | \n\n 6 | \n\n 2 | \n
| \n Current financial debt | \n\n 11 | \n\n 0 | \n\n 0 | \n
| \n Net asset | \n\n 199 | \n\n 42 | \n\n 20 | \n
| \n Carrying Amount of the interest in the Joint Venture | \n\n 138 | \n\n 21 | \n\n 10 | \n
| \n 2024 income statement | \n\n \n | \n\n \n | \n\n \n | \n
|---|---|---|---|
| \n Sales | \n\n 176 | \n\n 51 | \n\n 0 | \n
| \n Depreciation and amortization | \n\n -7 | \n\n -4 | \n\n 0 | \n
| \n Cost of borrowings | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Interest on loans and short-term deposits | \n\n 9 | \n\n 0 | \n\n 0 | \n
| \n Income taxes | \n\n -24 | \n\n -2 | \n\n 0 | \n
| \n Profit for the year from continuing operations | \n\n 49 | \n\n 6 | \n\n -6 | \n
| \n Profit for the year | \n\n 49 | \n\n 6 | \n\n -6 | \n
| \n Other comprehensive income | \n\n -12 | \n\n 5 | \n\n 0 | \n
| \n Total comprehensive income | \n\n 38 | \n\n 11 | \n\n -6 | \n
| \n Dividends received | \n\n 20 | \n\n 0 | \n\n 0 | \n
Other comprehensive income mainly comprises the currency translation differences.
| \n December 31, 2023 In \u20ac million | \n\n Peroxidos do Brasil Ltda | \n\n Shandong Huatai Interox Chemical Co. Ltd | \n\n Aqua Pharma Group | \n\n Shinsol Advanced Chemicals | \n
|---|---|---|---|---|
| \n Ownership interest | \n\n 69.40% | \n\n 50% | \n\n 50% | \n\n 51.0% | \n
| \n Operating Segment | \n\n Basic Chemicals | \n\n Basic Chemicals | \n\n Basic Chemicals | \n\n Performance Chemicals | \n
| \n Statement of financial position | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current assets | \n\n 121 | \n\n 7 | \n\n 24 | \n\n 22 | \n
| \n Current assets | \n\n 144 | \n\n 28 | \n\n 20 | \n\n 6 | \n
| \n Cash and cash equivalents | \n\n 84 | \n\n 22 | \n\n 9 | \n\n 6 | \n
| \n Non-current liabilities | \n\n 8 | \n\n - | \n\n 2 | \n\n 4 | \n
| \n Non-current financial debt | \n\n 1 | \n\n 0 | \n\n 0 | \n\n 4 | \n
| \n Current liabilities | \n\n 50 | \n\n 10 | \n\n 5 | \n\n 2 | \n
| \n Current financial debt | \n\n 6 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Net asset | \n\n 206 | \n\n 25 | \n\n 38 | \n\n 23 | \n
| \n Carrying Amount of the interest in the Joint Venture | \n\n 143 | \n\n 12 | \n\n 19 | \n\n 12 | \n
| \n 2023 income statement | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
|---|---|---|---|---|
| \n Sales | \n\n 195 | \n\n 40 | \n\n 32 | \n\n 0 | \n
| \n Depreciation and amortization | \n\n -7 | \n\n -1 | \n\n -3 | \n\n 0 | \n
| \n Cost of borrowings | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Interest on loans and short-term deposits | \n\n 8 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Income taxes | \n\n -23 | \n\n -3 | \n\n -2 | \n\n 0 | \n
| \n Profit for the year from continuing operations | \n\n 56 | \n\n 8 | \n\n -2 | \n\n -2 | \n
| \n Profit for the year | \n\n 56 | \n\n 8 | \n\n -2 | \n\n -2 | \n
| \n Other comprehensive income | \n\n 4 | \n\n 0 | \n\n -3 | \n\n 0 | \n
| \n Total comprehensive income | \n\n 61 | \n\n 8 | \n\n -5 | \n\n -2 | \n
| \n Dividends received | \n\n 18 | \n\n 2 | \n\n 0 | \n\n 0 | \n
Note F40
List of companies included in\u00a0the\u00a0consolidation scope
The Group consists of Solvay SA/NV and a total of 145 investees.
Of these 145 investees, 71 are fully consolidated, 7 are proportionately consolidated and 20 are accounted for under the equity method, while the other 47 are not material to the Group and therefore are not in the consolidation scope.
These Other Investments, which are insignificant are measured at cost and tested for impairment on an annual basis, which is considered a good proxy of their fair value. For more information, refer to Principles of consolidation.
| \n Country | \n\n Company | \n\n Comments | \n
|---|---|---|
| \n CHILE | \n\n Rhodia Chile Ltda, Santiago | \n\n Meets the consolidation criteria | \n
| \n Country | \n\n Company | \n\n Comments | \n
|---|---|---|
| \n FRANCE | \n\n Solvay Energy Services S.A.S., Puteaux | \n\n Merged into Rhodia Operations S.A.S. | \n
| \n GERMANY | \n\n Solvay Chemicals GmbH, Hannover | \n\n Merged into Solvay GmbH | \n
| \n Solvin GmbH & Co. KG - PVDC, Rheinberg | \n\n Merged into Solvay GmbH | \n|
| \n Solvay Flux GmbH, Hannover | \n\n Merged into Solvay GmbH | \n|
| \n Solvay Fluor GmbH, Hannover | \n\n Merged into Solvay GmbH | \n|
| \n Solvin Holding GmbH, Hannover | \n\n Merged into Solvay GmbH | \n|
| \n NETHERLANDS | \n\n Rhodia International Holdings B.V., Den Haag | \n\n Merged into Solvay Chemicals and Plastics Holding B.V. | \n
| \n Country | \n\n Company | \n\n Comments | \n
|---|---|---|
| \n CHINA | \n\n Shandong Huatai Interox Chemical Co. Ltd, Dongying | \n\n Change from equity method to full consolidation due to the\u00a0purchase of additional 10% of Dongying Huatai Chemicals Group's\u00a0shares | \n
| \n CHINA | \n\n \n | \n
|---|---|
| \n Qingdao Hiwin Solvay Chemicals Co. Ltd, Qingdao | \n\n 30 | \n
| \n Solvay (Zhenjiang) Chemicals Co., Ltd, Zhenjiang New area | \n\n 9.35 | \n
| \n FRANCE | \n\n \n | \n
| \n GIE Chime Salindres, Salindres | \n\n 50 | \n
| \n MEXICO | \n\n \n | \n
| \n Silicatos y Derivados S.A. DE C.V., Estado de Mexico | \n\n 20 | \n
An associate is an entity over which the Group has significant influence and that is neither a subsidiary, nor an interest in a joint arrangement. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about relevant activities require the unanimous consent of the parties sharing control.
The results, assets and liabilities of associates and joint ventures are incorporated in the consolidated financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Under the equity method, on initial recognition, investments in associates and joint ventures are recognized in the consolidated statement of financial position at cost, and the carrying amount is adjusted for post-acquisition changes in the Group\u2019s share of the net assets of the associate or joint venture, less any impairment of the value of individual investments. Losses of an associate or joint venture in excess of the Group\u2019s interest in that associate or joint venture (which includes any long-term interests that, in substance, form part of the Group\u2019s net investment in the associate or joint venture) are recognized only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture.
Any excess of the cost of acquisition over the Group\u2019s share of the net fair value of the identifiable assets and (contingent) liabilities of the associate or joint venture recognized at the date of acquisition is goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of that\u00a0investment.
Where a Group entity transacts with an associate or joint venture of the Group, profits and losses are eliminated to the extent of the Group\u2019s interest in the relevant associate or joint venture.
After application of the equity method, the Group reviews its investments in associates and joint ventures for impairment. At each reporting date, the Group determines whether there is objective evidence that the investment in the associate or joint venture is impaired. If there is such evidence, the Group performs its analysis and calculates any impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value, and then recognizes the loss in the consolidated income statement.
NOTE F22
Investments in associates and\u00a0joint ventures
The list of associates and joint ventures is available in the note F40 List of companies included in the consolidation scope.
The associates and joint ventures not classified as held for sale/discontinued operations are accounted for under the equity method of accounting.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|---|
| \n Associates | \n\n Joint ventures | \n\n Total | \n\n Associates | \n\n Joint ventures | \n\n Total | \n|
| \n Investments in associates and joint ventures | \n\n 47 | \n\n 169 | \n\n 216 | \n\n 42 | \n\n 188 | \n\n 230 | \n
| \n Earnings from associates and joint ventures | \n\n 4 | \n\n 35 | \n\n 38 | \n\n 3 | \n\n 50 | \n\n 53 | \n
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n January 1 | \n\n 188 | \n\n 790 | \n
| \n Additions | \n\n 0 | \n\n 0 | \n
| \n Capital increase / (decrease) | \n\n 0 | \n\n -3 | \n
| \n Profit for the year | \n\n 35 | \n\n 67 | \n
| \n Dividends received | \n\n -20 | \n\n -24 | \n
| \n Currency translation differences | \n\n -13 | \n\n -13 | \n
| \n Impairment reversal | \n\n \n | \n\n 0 | \n
| \n Other | \n\n -21 | \n\n -3 | \n
| \n Sale of RusVinyl | \n\n \n | \n\n -428 | \n
| \n Partial Demerger | \n\n \n | \n\n -197 | \n
| \n December 31 | \n\n 169 | \n\n 188 | \n
In 2023, the figures contain the amounts related to Specialty Businesses until December 8.
The amount in Partial Demerger mainly consists of demerged Strata Solvay Advanced Materials and Hindustan Gum & Chemicals.
The tables below present the summarized financial information of the material joint ventures. The joint ventures had no contingent liabilities or capital commitments as at December 31, 2024 and 2023.
| \n December 31, 2024 | \n\n Peroxidos do Brasil Ltda | \n\n Aqua Pharma Group | \n\n Shinsol Advanced Chemicals | \n
|---|---|---|---|
| \n In \u20ac million | \n\n \n | \n\n \n | \n\n \n | \n
| \n Ownership interest | \n\n 69.40% | \n\n 50% | \n\n 51.0% | \n
| \n Operating Segment | \n\n Basic Chemicals | \n\n Basic Chemicals | \n\n Basic Chemicals | \n
| \n Statement of financial position | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current assets | \n\n 125 | \n\n 20 | \n\n 24 | \n
| \n Current assets | \n\n 152 | \n\n 30 | \n\n 3 | \n
| \n Cash and cash equivalents | \n\n 95 | \n\n 17 | \n\n 1 | \n
| \n Non-current liabilities | \n\n 8 | \n\n 2 | \n\n 6 | \n
| \n Non-current financial debt | \n\n 1 | \n\n 0 | \n\n 6 | \n
| \n Current liabilities | \n\n 69 | \n\n 6 | \n\n 2 | \n
| \n Current financial debt | \n\n 11 | \n\n 0 | \n\n 0 | \n
| \n Net asset | \n\n 199 | \n\n 42 | \n\n 20 | \n
| \n Carrying Amount of the interest in the Joint Venture | \n\n 138 | \n\n 21 | \n\n 10 | \n
| \n 2024 income statement | \n\n \n | \n\n \n | \n\n \n | \n
|---|---|---|---|
| \n Sales | \n\n 176 | \n\n 51 | \n\n 0 | \n
| \n Depreciation and amortization | \n\n -7 | \n\n -4 | \n\n 0 | \n
| \n Cost of borrowings | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Interest on loans and short-term deposits | \n\n 9 | \n\n 0 | \n\n 0 | \n
| \n Income taxes | \n\n -24 | \n\n -2 | \n\n 0 | \n
| \n Profit for the year from continuing operations | \n\n 49 | \n\n 6 | \n\n -6 | \n
| \n Profit for the year | \n\n 49 | \n\n 6 | \n\n -6 | \n
| \n Other comprehensive income | \n\n -12 | \n\n 5 | \n\n 0 | \n
| \n Total comprehensive income | \n\n 38 | \n\n 11 | \n\n -6 | \n
| \n Dividends received | \n\n 20 | \n\n 0 | \n\n 0 | \n
Other comprehensive income mainly comprises the currency translation differences.
| \n December 31, 2023 In \u20ac million | \n\n Peroxidos do Brasil Ltda | \n\n Shandong Huatai Interox Chemical Co. Ltd | \n\n Aqua Pharma Group | \n\n Shinsol Advanced Chemicals | \n
|---|---|---|---|---|
| \n Ownership interest | \n\n 69.40% | \n\n 50% | \n\n 50% | \n\n 51.0% | \n
| \n Operating Segment | \n\n Basic Chemicals | \n\n Basic Chemicals | \n\n Basic Chemicals | \n\n Performance Chemicals | \n
| \n Statement of financial position | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current assets | \n\n 121 | \n\n 7 | \n\n 24 | \n\n 22 | \n
| \n Current assets | \n\n 144 | \n\n 28 | \n\n 20 | \n\n 6 | \n
| \n Cash and cash equivalents | \n\n 84 | \n\n 22 | \n\n 9 | \n\n 6 | \n
| \n Non-current liabilities | \n\n 8 | \n\n - | \n\n 2 | \n\n 4 | \n
| \n Non-current financial debt | \n\n 1 | \n\n 0 | \n\n 0 | \n\n 4 | \n
| \n Current liabilities | \n\n 50 | \n\n 10 | \n\n 5 | \n\n 2 | \n
| \n Current financial debt | \n\n 6 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Net asset | \n\n 206 | \n\n 25 | \n\n 38 | \n\n 23 | \n
| \n Carrying Amount of the interest in the Joint Venture | \n\n 143 | \n\n 12 | \n\n 19 | \n\n 12 | \n
| \n 2023 income statement | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
|---|---|---|---|---|
| \n Sales | \n\n 195 | \n\n 40 | \n\n 32 | \n\n 0 | \n
| \n Depreciation and amortization | \n\n -7 | \n\n -1 | \n\n -3 | \n\n 0 | \n
| \n Cost of borrowings | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Interest on loans and short-term deposits | \n\n 8 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Income taxes | \n\n -23 | \n\n -3 | \n\n -2 | \n\n 0 | \n
| \n Profit for the year from continuing operations | \n\n 56 | \n\n 8 | \n\n -2 | \n\n -2 | \n
| \n Profit for the year | \n\n 56 | \n\n 8 | \n\n -2 | \n\n -2 | \n
| \n Other comprehensive income | \n\n 4 | \n\n 0 | \n\n -3 | \n\n 0 | \n
| \n Total comprehensive income | \n\n 61 | \n\n 8 | \n\n -5 | \n\n -2 | \n
| \n Dividends received | \n\n 18 | \n\n 2 | \n\n 0 | \n\n 0 | \n
Other comprehensive income mainly comprises the currency translation differences.
Peroxidos do Brasil and Solvay Brasil settled the antitrust cases with CADE (the Brazilian antitrust authority). The corresponding amounts and the legal fees were reflected in and adjusted the existing provisions, with a joint effect of \u20ac 3.6 million in the 2024 consolidated profit or loss.
Please refer to the Litigation section of the Risk Management chapter of the Annual Integrated Report for further details.
Note F40
List of companies included in\u00a0the\u00a0consolidation scope
The Group consists of Solvay SA/NV and a total of 145 investees.
Of these 145 investees, 71 are fully consolidated, 7 are proportionately consolidated and 20 are accounted for under the equity method, while the other 47 are not material to the Group and therefore are not in the consolidation scope.
These Other Investments, which are insignificant are measured at cost and tested for impairment on an annual basis, which is considered a good proxy of their fair value. For more information, refer to Principles of consolidation.
| \n Country | \n\n Company | \n\n Comments | \n
|---|---|---|
| \n CHILE | \n\n Rhodia Chile Ltda, Santiago | \n\n Meets the consolidation criteria | \n
| \n Country | \n\n Company | \n\n Comments | \n
|---|---|---|
| \n FRANCE | \n\n Solvay Energy Services S.A.S., Puteaux | \n\n Merged into Rhodia Operations S.A.S. | \n
| \n GERMANY | \n\n Solvay Chemicals GmbH, Hannover | \n\n Merged into Solvay GmbH | \n
| \n Solvin GmbH & Co. KG - PVDC, Rheinberg | \n\n Merged into Solvay GmbH | \n|
| \n Solvay Flux GmbH, Hannover | \n\n Merged into Solvay GmbH | \n|
| \n Solvay Fluor GmbH, Hannover | \n\n Merged into Solvay GmbH | \n|
| \n Solvin Holding GmbH, Hannover | \n\n Merged into Solvay GmbH | \n|
| \n NETHERLANDS | \n\n Rhodia International Holdings B.V., Den Haag | \n\n Merged into Solvay Chemicals and Plastics Holding B.V. | \n
| \n Country | \n\n Company | \n\n Comments | \n
|---|---|---|
| \n CHINA | \n\n Shandong Huatai Interox Chemical Co. Ltd, Dongying | \n\n Change from equity method to full consolidation due to the\u00a0purchase of additional 10% of Dongying Huatai Chemicals Group's\u00a0shares | \n
| \n AUSTRALIA | \n\n \n | \n
|---|---|
| \n Aqua Pharma Australia Pty Ltd, Armidale | \n\n 50 | \n
| \n Aquatiq Prawns Ltd, Launceston | \n\n 50 | \n
| \n BELGIUM | \n\n \n | \n
| \n Aqua Pharma Belgium Srl, Herent | \n\n 50 | \n
| \n BRAZIL | \n\n \n | \n
| \n Peroxidos do Brasil Ltda, Sao Paulo | \n\n 69.4 | \n
| \n CANADA | \n\n \n | \n
| \n Aqua Pharma Inc, Saint John | \n\n 50 | \n
| \n CHILE | \n\n \n | \n
| \n Aqua Pharma Chile Spa, Puerto Montt | \n\n 50 | \n
| \n ECUADOR | \n\n \n | \n
| \n Aqua Pharma Ecuador S.A, Guayas | \n\n 50 | \n
| \n INDONESIA | \n\n \n | \n
| \n PT Aqua Pharma Indonesia Ltd, Jakarta | \n\n 50 | \n
| \n NORWAY | \n\n \n | \n
| \n Aqua Pharma Group A.S., Lillehammer | \n\n 50 | \n
| \n Aqua Pharma A.S., Lillehammer | \n\n 50 | \n
| \n Haugaland Shipping A.S., Haugesund | \n\n 50 | \n
| \n TAIWAN | \n\n \n | \n
| \n Shinsol Advanced Chemicals Corporation, New Taipei | \n\n 51 | \n
| \n UNITED KINGDOM | \n\n \n | \n
| \n Aqua Pharma Technical Ltd, Inverness | \n\n 50 | \n
| \n Aqua Pharma Ltd, Inverness | \n\n 50 | \n
| \n Pulcea Ltd, Edinburgh | \n\n 25 | \n
| \n UNITED STATES | \n\n \n | \n
| \n Aqua Pharma U.S. Inc, Kirkland | \n\n 50 | \n
An associate is an entity over which the Group has significant influence and that is neither a subsidiary, nor an interest in a joint arrangement. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about relevant activities require the unanimous consent of the parties sharing control.
The results, assets and liabilities of associates and joint ventures are incorporated in the consolidated financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Under the equity method, on initial recognition, investments in associates and joint ventures are recognized in the consolidated statement of financial position at cost, and the carrying amount is adjusted for post-acquisition changes in the Group\u2019s share of the net assets of the associate or joint venture, less any impairment of the value of individual investments. Losses of an associate or joint venture in excess of the Group\u2019s interest in that associate or joint venture (which includes any long-term interests that, in substance, form part of the Group\u2019s net investment in the associate or joint venture) are recognized only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture.
Any excess of the cost of acquisition over the Group\u2019s share of the net fair value of the identifiable assets and (contingent) liabilities of the associate or joint venture recognized at the date of acquisition is goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of that\u00a0investment.
Where a Group entity transacts with an associate or joint venture of the Group, profits and losses are eliminated to the extent of the Group\u2019s interest in the relevant associate or joint venture.
After application of the equity method, the Group reviews its investments in associates and joint ventures for impairment. At each reporting date, the Group determines whether there is objective evidence that the investment in the associate or joint venture is impaired. If there is such evidence, the Group performs its analysis and calculates any impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value, and then recognizes the loss in the consolidated income statement.
An associate is an entity over which the Group has significant influence and that is neither a subsidiary, nor an interest in a joint arrangement. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about relevant activities require the unanimous consent of the parties sharing control.
The results, assets and liabilities of associates and joint ventures are incorporated in the consolidated financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Under the equity method, on initial recognition, investments in associates and joint ventures are recognized in the consolidated statement of financial position at cost, and the carrying amount is adjusted for post-acquisition changes in the Group\u2019s share of the net assets of the associate or joint venture, less any impairment of the value of individual investments. Losses of an associate or joint venture in excess of the Group\u2019s interest in that associate or joint venture (which includes any long-term interests that, in substance, form part of the Group\u2019s net investment in the associate or joint venture) are recognized only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture.
Any excess of the cost of acquisition over the Group\u2019s share of the net fair value of the identifiable assets and (contingent) liabilities of the associate or joint venture recognized at the date of acquisition is goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of that\u00a0investment.
Where a Group entity transacts with an associate or joint venture of the Group, profits and losses are eliminated to the extent of the Group\u2019s interest in the relevant associate or joint venture.
After application of the equity method, the Group reviews its investments in associates and joint ventures for impairment. At each reporting date, the Group determines whether there is objective evidence that the investment in the associate or joint venture is impaired. If there is such evidence, the Group performs its analysis and calculates any impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value, and then recognizes the loss in the consolidated income statement.
An associate is an entity over which the Group has significant influence and that is neither a subsidiary, nor an interest in a joint arrangement. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about relevant activities require the unanimous consent of the parties sharing control.
The results, assets and liabilities of associates and joint ventures are incorporated in the consolidated financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Under the equity method, on initial recognition, investments in associates and joint ventures are recognized in the consolidated statement of financial position at cost, and the carrying amount is adjusted for post-acquisition changes in the Group\u2019s share of the net assets of the associate or joint venture, less any impairment of the value of individual investments. Losses of an associate or joint venture in excess of the Group\u2019s interest in that associate or joint venture (which includes any long-term interests that, in substance, form part of the Group\u2019s net investment in the associate or joint venture) are recognized only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture.
Any excess of the cost of acquisition over the Group\u2019s share of the net fair value of the identifiable assets and (contingent) liabilities of the associate or joint venture recognized at the date of acquisition is goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of that\u00a0investment.
Where a Group entity transacts with an associate or joint venture of the Group, profits and losses are eliminated to the extent of the Group\u2019s interest in the relevant associate or joint venture.
After application of the equity method, the Group reviews its investments in associates and joint ventures for impairment. At each reporting date, the Group determines whether there is objective evidence that the investment in the associate or joint venture is impaired. If there is such evidence, the Group performs its analysis and calculates any impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value, and then recognizes the loss in the consolidated income statement.
The individual financial statements of each Group entity are prepared in the currency of the primary economic environment in which this Group entity operates (its functional currency). For the purpose of preparing the consolidated financial statements, the results and financial position of each Group entity are expressed in euros (EUR), which is the presentation currency of the Group\u2019s consolidated financial statements.
In preparing the financial statements of the individual entities, transactions in currencies other than the entities\u2019 functional currency are recognized at the exchange rates prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the closing rate. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rate when the fair value was measured. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the date of the initial transactions.
Exchange differences are recognized in profit or loss in the period in which they arise except for:
hexchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur in the foreseeable future (therefore forming part of the net investment in the foreign operation), which are recognized initially in other comprehensive income under \u201ccurrency translation differences;\u201d and
hexchange differences on transactions entered into in order to hedge certain foreign currency risks (see note F32 Financial instruments and financial risk management for hedge accounting policies).
The main exchange rates used are:
| \n 1 Euro = | \n\n \n | \n\n Year-end rate | \n\n Average rate | \n||
|---|---|---|---|---|---|
| \n December 31, 2024 | \n\n December 31, 2023 | \n\n 2024 | \n\n 2023 | \n||
| \n Brazilian Real | \n\n BRL | \n\n 6.4210 | \n\n 5.3612 | \n\n 5.8244 | \n\n 5.4010 | \n
| \n Yuan Renminbi | \n\n CNY | \n\n 7.5865 | \n\n 7.8383 | \n\n 7.7878 | \n\n 7.6608 | \n
| \n Pound Sterling | \n\n GBP | \n\n 0.8295 | \n\n 0.8690 | \n\n 0.8467 | \n\n 0.8698 | \n
| \n Indian Rupee | \n\n INR | \n\n 88.9827 | \n\n 91.9678 | \n\n 90.5498 | \n\n 89.3107 | \n
| \n Japanese Yen | \n\n JPY | \n\n 163.0481 | \n\n 156.3416 | \n\n 163.8445 | \n\n 151.9821 | \n
| \n Korean Won | \n\n KRW | \n\n 1,530.0792 | \n\n 1,423.3871 | \n\n 1,474.9032 | \n\n 1,412.4780 | \n
| \n Mexican Peso | \n\n MXN | \n\n 21.5452 | \n\n 18.7359 | \n\n 19.8164 | \n\n 19.1854 | \n
| \n US Dollar | \n\n USD | \n\n 1.0394 | \n\n 1.1052 | \n\n 1.0823 | \n\n 1.0813 | \n
The individual financial statements of each Group entity are prepared in the currency of the primary economic environment in which this Group entity operates (its functional currency). For the purpose of preparing the consolidated financial statements, the results and financial position of each Group entity are expressed in euros (EUR), which is the presentation currency of the Group\u2019s consolidated financial statements.
In preparing the financial statements of the individual entities, transactions in currencies other than the entities\u2019 functional currency are recognized at the exchange rates prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the closing rate. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rate when the fair value was measured. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the date of the initial transactions.
Exchange differences are recognized in profit or loss in the period in which they arise except for:
hexchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur in the foreseeable future (therefore forming part of the net investment in the foreign operation), which are recognized initially in other comprehensive income under \u201ccurrency translation differences;\u201d and
hexchange differences on transactions entered into in order to hedge certain foreign currency risks (see note F32 Financial instruments and financial risk management for hedge accounting policies).
The main exchange rates used are:
| \n 1 Euro = | \n\n \n | \n\n Year-end rate | \n\n Average rate | \n||
|---|---|---|---|---|---|
| \n December 31, 2024 | \n\n December 31, 2023 | \n\n 2024 | \n\n 2023 | \n||
| \n Brazilian Real | \n\n BRL | \n\n 6.4210 | \n\n 5.3612 | \n\n 5.8244 | \n\n 5.4010 | \n
| \n Yuan Renminbi | \n\n CNY | \n\n 7.5865 | \n\n 7.8383 | \n\n 7.7878 | \n\n 7.6608 | \n
| \n Pound Sterling | \n\n GBP | \n\n 0.8295 | \n\n 0.8690 | \n\n 0.8467 | \n\n 0.8698 | \n
| \n Indian Rupee | \n\n INR | \n\n 88.9827 | \n\n 91.9678 | \n\n 90.5498 | \n\n 89.3107 | \n
| \n Japanese Yen | \n\n JPY | \n\n 163.0481 | \n\n 156.3416 | \n\n 163.8445 | \n\n 151.9821 | \n
| \n Korean Won | \n\n KRW | \n\n 1,530.0792 | \n\n 1,423.3871 | \n\n 1,474.9032 | \n\n 1,412.4780 | \n
| \n Mexican Peso | \n\n MXN | \n\n 21.5452 | \n\n 18.7359 | \n\n 19.8164 | \n\n 19.1854 | \n
| \n US Dollar | \n\n USD | \n\n 1.0394 | \n\n 1.1052 | \n\n 1.0823 | \n\n 1.0813 | \n
fAccounting policy
For the purpose of presenting consolidated financial statements at the end of each reporting period, the assets and liabilities of the Group\u2019s foreign operations are expressed in euros using closing rates. Income and expense items are translated at the average exchange rates for the period except when the impact of applying the average rate is materially different from applying the spot rate at the respective transactions\u2019 dates, in which case the latter is applied. Exchange differences arising, if any, are recognized in other comprehensive income as \u201ccurrency translation differences\u201d.
Currency translation differences are reclassified from equity to profit or loss, on:
A disposal of the Group\u2019s entire interest in a foreign operation. In this case, all of the accumulated exchange differences in respect of that operation attributable to the Group are reclassified to profit or loss. Any exchange differences that have previously been attributed to non-controlling interests are derecognized, but they are not reclassified to profit or loss.
The individual financial statements of each Group entity are prepared in the currency of the primary economic environment in which this Group entity operates (its functional currency). For the purpose of preparing the consolidated financial statements, the results and financial position of each Group entity are expressed in euros (EUR), which is the presentation currency of the Group\u2019s consolidated financial statements.
In preparing the financial statements of the individual entities, transactions in currencies other than the entities\u2019 functional currency are recognized at the exchange rates prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the closing rate. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rate when the fair value was measured. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the date of the initial transactions.
Exchange differences are recognized in profit or loss in the period in which they arise except for:
hexchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur in the foreseeable future (therefore forming part of the net investment in the foreign operation), which are recognized initially in other comprehensive income under \u201ccurrency translation differences;\u201d and
hexchange differences on transactions entered into in order to hedge certain foreign currency risks (see note F32 Financial instruments and financial risk management for hedge accounting policies).
The main exchange rates used are:
| \n 1 Euro = | \n\n \n | \n\n Year-end rate | \n\n Average rate | \n||
|---|---|---|---|---|---|
| \n December 31, 2024 | \n\n December 31, 2023 | \n\n 2024 | \n\n 2023 | \n||
| \n Brazilian Real | \n\n BRL | \n\n 6.4210 | \n\n 5.3612 | \n\n 5.8244 | \n\n 5.4010 | \n
| \n Yuan Renminbi | \n\n CNY | \n\n 7.5865 | \n\n 7.8383 | \n\n 7.7878 | \n\n 7.6608 | \n
| \n Pound Sterling | \n\n GBP | \n\n 0.8295 | \n\n 0.8690 | \n\n 0.8467 | \n\n 0.8698 | \n
| \n Indian Rupee | \n\n INR | \n\n 88.9827 | \n\n 91.9678 | \n\n 90.5498 | \n\n 89.3107 | \n
| \n Japanese Yen | \n\n JPY | \n\n 163.0481 | \n\n 156.3416 | \n\n 163.8445 | \n\n 151.9821 | \n
| \n Korean Won | \n\n KRW | \n\n 1,530.0792 | \n\n 1,423.3871 | \n\n 1,474.9032 | \n\n 1,412.4780 | \n
| \n Mexican Peso | \n\n MXN | \n\n 21.5452 | \n\n 18.7359 | \n\n 19.8164 | \n\n 19.1854 | \n
| \n US Dollar | \n\n USD | \n\n 1.0394 | \n\n 1.1052 | \n\n 1.0823 | \n\n 1.0813 | \n
NOTE F6
Net financial charges
fAccounting policy
Interest on borrowings is recognized in costs of borrowings as incurred, except for borrowing costs directly attributable to the acquisition, construction and production of qualifying assets (see note F20 Property, Plant and Equipment).
Net foreign exchange gains or losses on financial items and changes in fair value of derivative financial instruments related to net indebtedness are presented in \u201cOther gains and losses on net indebtedness,\u201d with the exception of changes in fair value of derivative financial instruments that are hedging instruments in a cash flow hedge relationship, and which are recognized on the same line as the hedged item, when the latter affects profit or loss.
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Cost of borrowings | \n\n -96 | \n\n -60 | \n
| \n Interest expense on lease liabilities | \n\n -12 | \n\n -11 | \n
| \n Interest on loans and short term deposits | \n\n 17 | \n\n 36 | \n
| \n Other gains and losses on net indebtedness | \n\n 15 | \n\n -6 | \n
| \n Net cost of borrowings | \n\n -76 | \n\n -41 | \n
| \n Cost of discounting provisions | \n\n -41 | \n\n -45 | \n
| \n Impact of change of discount rate on provisions | \n\n 25 | \n\n -17 | \n
| \n Result from equity instruments measured at fair value | \n\n -22 | \n\n 4 | \n
| \n Net financial charges | \n\n -113 | \n\n -98 | \n
More details are included in note F33 Net indebtedness.
The net cost of borrowings variance is mainly explained as follows.
Higher cost of borrowings for \u20ac(36) million attributable to the liability management exercise that Solvay undertook in 2023 prior to the partial demerger during which the perpetual hybrid bonds that qualified as equity were replaced by other non-current debts triggering interest expenses. In 2023, coupons of perpetual hybrid bonds deducted from equity upon declaration amounted to \u20ac(70) million.
Lower interest income on loans and short-term deposits explained by lower volumes of excess cash following the partial demerger.
Other gains and losses on net indebtedness from \u20ac(6) million in 2023 to \u20ac15 million in 2024, attributable to :
hlower currency swaps income \u20ac5 million (interest element)
hother financial income \u20ac21 million mainly explained by the change in fair value of stock option plans which includes options on Syensqo SA shares
ha decrease in other financial charges by \u20ac8 million mainly explained by costs related to the separation plan in 2023.
hforeign exchange results \u20ac(3) million
The cost of discounting provision relates to post-employment benefits for \u20ac(22) million and to environmental provisions \u20ac(19) million.
The impact of a change of discount rates for \u20ac25 million is attributable to the evolution of the discount rates (see note F31 \u2013 part on environmental provisions).
The result of Equity Instruments measured at fair value through profit or loss relate to the variation of Syensqo SA share price, in the context of hedging of LTI plans prior to the Partial Demerger.
fAccounting policy
For the purpose of presenting consolidated financial statements at the end of each reporting period, the assets and liabilities of the Group\u2019s foreign operations are expressed in euros using closing rates. Income and expense items are translated at the average exchange rates for the period except when the impact of applying the average rate is materially different from applying the spot rate at the respective transactions\u2019 dates, in which case the latter is applied. Exchange differences arising, if any, are recognized in other comprehensive income as \u201ccurrency translation differences\u201d.
Currency translation differences are reclassified from equity to profit or loss, on:
A disposal of the Group\u2019s entire interest in a foreign operation. In this case, all of the accumulated exchange differences in respect of that operation attributable to the Group are reclassified to profit or loss. Any exchange differences that have previously been attributed to non-controlling interests are derecognized, but they are not reclassified to profit or loss.
At the end of 2024, the carrying amount of Currency Translation consists of \u20ac(339) million on BRL, \u20ac(190) linked to the conversion of Member States\u2019 currencies to Euro, and \u20ac303 million on USD.
| \n In \u20ac million | \n\n Total | \n
|---|---|
| \n December 31, 2022 | \n\n 3,472 | \n
| \n Addition | \n\n 2 | \n
| \n Currency translation differences | \n\n -36 | \n
| \n Disposals | \n\n 0 | \n
| \n Impairment | \n\n -38 | \n
| \n Partial Demerger | \n\n -2,637 | \n
| \n December 31, 2023 | \n\n 764 | \n
| \n Addition | \n\n 18 | \n
| \n Currency translation differences | \n\n 0 | \n
| \n Disposals | \n\n 0 | \n
| \n Impairment | \n\n 0 | \n
| \n December 31, 2024 | \n\n 782 | \n
In 2023, the currency translation differences mainly relate to goodwill expressed in US dollars, located in Specialty Businesses.
See note F23 for more details on impairment testing.
In March 2024, the Group increased its ownership in its equity accounted investment in Shandong Huatai Interox Chemical Co. by 10% from 50% to 60%, for \u20ac4 million. The transaction resulted in Solvay obtaining control over the legal entity. The acquisition was accounted for as a business combination achieved in stages and resulted in a \u20ac10 million gain on derecognizing the equity investment and recognizing \u20ac18 million of goodwill and \u20ac3 million of intangible assets based on the fair value of the entity upon consolidation. The Group finalized the purchase price allocation in December 2024 and recognized no material change.
Goodwill acquired in a business combination is allocated to the CGUs or groups of CGUs that are expected to benefit from that business combination.
| \n In \u20ac million | \n\n 2024 | \n||||
|---|---|---|---|---|---|
| \n At beginning of the period | \n\n Additions | \n\n Impairment | \n\n Currency translation differences | \n\n At the end of the period | \n|
| \n Special Chem | \n\n 275 | \n\n \n | \n\n \n | \n\n -1 | \n\n 275 | \n
| \n Soda Ash & Derivatives | \n\n 237 | \n\n \n | \n\n \n | \n\n \n | \n\n 237 | \n
| \n Coatis | \n\n 82 | \n\n \n | \n\n \n | \n\n \n | \n\n 82 | \n
| \n Silica | \n\n 72 | \n\n \n | \n\n \n | \n\n \n | \n\n 72 | \n
| \n Energy Services | \n\n 0 | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Hydrogen Peroxide Europe | \n\n 37 | \n\n \n | \n\n \n | \n\n \n | \n\n 37 | \n
| \n Hydrogen Peroxide Mercosul | \n\n 27 | \n\n \n | \n\n \n | \n\n \n | \n\n 27 | \n
| \n Hydrogen Peroxide Nafta | \n\n 15 | \n\n \n | \n\n \n | \n\n \n | \n\n 15 | \n
| \n Hydrogen Peroxide Asia | \n\n 19 | \n\n 18 | \n\n \n | \n\n 0 | \n\n 37 | \n
| \n Total goodwill | \n\n 764 | \n\n 18 | \n\n 0 | \n\n 0 | \n\n 782 | \n
| \n In \u20ac million | \n\n 2023 | \n||||||
|---|---|---|---|---|---|---|---|
| \n At beginning of the period | \n\n Additions | \n\n Impairment | \n\n Currency translation differences | \n\n Transfer | \n\n Partial Demerger | \n\n At the end of the period | \n|
| \n Operating segments - Groups of CGUs | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Materials | \n\n 341 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n -341 | \n\n 0 | \n
| \n Chemicals | \n\n 121 | \n\n \n | \n\n \n | \n\n \n | \n\n -121 | \n\n \n | \n\n 0 | \n
| \n Solutions | \n\n 264 | \n\n \n | \n\n \n | \n\n \n | \n\n -65 | \n\n -199 | \n\n 0 | \n
| \n (Groups of) CGUs | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Composite Materials | \n\n 591 | \n\n \n | \n\n \n | \n\n -15 | \n\n \n | \n\n -577 | \n\n 0 | \n
| \n Novecare | \n\n 565 | \n\n 2 | \n\n \n | \n\n -3 | \n\n \n | \n\n -564 | \n\n 0 | \n
| \n Technology Solutions | \n\n 734 | \n\n \n | \n\n \n | \n\n -17 | \n\n \n | \n\n -716 | \n\n 0 | \n
| \n Special Chem | \n\n 210 | \n\n \n | \n\n \n | \n\n 0 | \n\n 65 | \n\n \n | \n\n 275 | \n
| \n Specialty Polymers | \n\n 181 | \n\n \n | \n\n \n | \n\n -1 | \n\n \n | \n\n -180 | \n\n 0 | \n
| \n Soda Ash & Derivatives | \n\n 162 | \n\n \n | \n\n \n | \n\n \n | \n\n 75 | \n\n \n | \n\n 237 | \n
| \n Coatis | \n\n 82 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n 82 | \n
| \n Silica | \n\n 72 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n 72 | \n
| \n Aroma Performance | \n\n 49 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n -49 | \n\n 0 | \n
| \n Energy Services | \n\n 50 | \n\n \n | \n\n -38 | \n\n \n | \n\n \n | \n\n -12 | \n\n 0 | \n
| \n Hydrogen Peroxide Europe | \n\n 21 | \n\n \n | \n\n \n | \n\n \n | \n\n 17 | \n\n \n | \n\n 37 | \n
| \n Hydrogen Peroxide Mercosul | \n\n 14 | \n\n \n | \n\n \n | \n\n \n | \n\n 14 | \n\n \n | \n\n 27 | \n
| \n Hydrogen Peroxide Nafta | \n\n 7 | \n\n \n | \n\n \n | \n\n \n | \n\n 8 | \n\n \n | \n\n 15 | \n
| \n Hydrogen Peroxide Asia | \n\n 11 | \n\n \n | \n\n \n | \n\n 0 | \n\n 8 | \n\n \n | \n\n 19 | \n
| \n Total goodwill | \n\n 3,472 | \n\n 2 | \n\n -38 | \n\n -35 | \n\n 0 | \n\n -2,637 | \n\n 764 | \n
See also note F23 Impairment.
As a result of the Partial Demerger of the Specialty Business, effectuated in December 2023, the Group realigned its Operating Segments as detailed in note F1 Revenue and Segment Information. The realignment resulted in the reallocation of segment level goodwill of \u20ac186 million (see \u20ac121 million + \u20ac65 million in column Transfer in 2023 table) to the CGUs using a relative value approach (respective fair values). The reallocation had no significant impact on the impairment analysis performed.
NOTE F20
Property, plant and equipment
fAccounting policy
General
Property, plant and equipment are tangible items that:
\u2022are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and
\u2022are expected to be used during more than one period.
The items of property, plant and equipment owned by the Group are recognized as property, plant and equipment when the following conditions are satisfied:
\u2022it is probable that the future economic benefits associated with the asset will flow to the Group;
\u2022the cost of the asset can be measured reliably.
In the table below, additions and depreciation expenses include the items of Specialty Businesses until the Partial Demerger.
| \n In \u20ac million | \n\n Land and buildings | \n\n Fixtures and equipment | \n\n Other tangible assets | \n\n Property, plant and equipment under construction | \n\n Total | \n
|---|---|---|---|---|---|
| \n Gross carrying amount | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n 3,021 | \n\n 10,648 | \n\n 425 | \n\n 1,033 | \n\n 15,128 | \n
| \n Additions | \n\n 77 | \n\n 136 | \n\n 7 | \n\n 777 | \n\n 998 | \n
| \n Disposals and closures | \n\n -23 | \n\n -216 | \n\n -17 | \n\n -3 | \n\n -258 | \n
| \n Increase through business combinations | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 0 | \n\n 1 | \n
| \n Currency translation differences | \n\n -35 | \n\n -126 | \n\n -4 | \n\n -16 | \n\n -181 | \n
| \n Partial Demerger | \n\n -1,516 | \n\n -5,458 | \n\n -186 | \n\n -955 | \n\n -8,115 | \n
| \n Other | \n\n 68 | \n\n 393 | \n\n 20 | \n\n -354 | \n\n 128 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n December 31, 2023 | \n\n 1,593 | \n\n 5,379 | \n\n 246 | \n\n 483 | \n\n 7,700 | \n
| \n Additions | \n\n 8 | \n\n 39 | \n\n 4 | \n\n 201 | \n\n 252 | \n
| \n Disposals and closures | \n\n -6 | \n\n -87 | \n\n -5 | \n\n 0 | \n\n -99 | \n
| \n Increase through business combinations | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Currency translation differences | \n\n 3 | \n\n 24 | \n\n -1 | \n\n 12 | \n\n 39 | \n
| \n Other | \n\n 42 | \n\n 136 | \n\n 15 | \n\n -160 | \n\n 33 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n December 31, 2024 | \n\n 1,640 | \n\n 5,491 | \n\n 260 | \n\n 536 | \n\n 7,925 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Accumulated depreciation | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n -1,648 | \n\n -7,818 | \n\n -351 | \n\n 0 | \n\n -9,816 | \n
| \n Depreciation | \n\n -76 | \n\n -459 | \n\n -22 | \n\n \n | \n\n -557 | \n
| \n Impairment | \n\n -11 | \n\n -44 | \n\n -2 | \n\n \n | \n\n -57 | \n
| \n Reversal of impairment | \n\n 0 | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n
| \n Disposals and closures | \n\n 18 | \n\n 214 | \n\n 16 | \n\n \n | \n\n 249 | \n
| \n Currency translation differences | \n\n 16 | \n\n 87 | \n\n 3 | \n\n \n | \n\n 105 | \n
| \n Partial Demerger | \n\n 694 | \n\n 3,788 | \n\n 153 | \n\n \n | \n\n 4,634 | \n
| \n Other | \n\n -19 | \n\n -90 | \n\n -5 | \n\n \n | \n\n -114 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n
| \n December 31, 2023 | \n\n -1,027 | \n\n -4,323 | \n\n -206 | \n\n 0 | \n\n -5,556 | \n
| \n Depreciation | \n\n -35 | \n\n -178 | \n\n -13 | \n\n \n | \n\n -226 | \n
| \n Impairment | \n\n -6 | \n\n -36 | \n\n 0 | \n\n \n | \n\n -42 | \n
| \n Reversal of impairment | \n\n 0 | \n\n 1 | \n\n 0 | \n\n \n | \n\n 1 | \n
| \n Disposals and closures | \n\n 6 | \n\n 86 | \n\n 5 | \n\n \n | \n\n 97 | \n
| \n Currency translation differences | \n\n -2 | \n\n -20 | \n\n 1 | \n\n \n | \n\n -21 | \n
| \n Other | \n\n -3 | \n\n -27 | \n\n 0 | \n\n \n | \n\n -29 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n
| \n December 31, 2024 | \n\n -1,066 | \n\n -4,496 | \n\n -213 | \n\n 0 | \n\n -5,776 | \n
| \n Net carrying amount | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n 1,373 | \n\n 2,830 | \n\n 75 | \n\n 1,033 | \n\n 5,311 | \n
| \n December 31, 2023 | \n\n 566 | \n\n 1,056 | \n\n 39 | \n\n 483 | \n\n 2,145 | \n
| \n December 31, 2024 | \n\n 574 | \n\n 995 | \n\n 46 | \n\n 536 | \n\n 2,150 | \n
In 2024 and 2023, no borrowing costs were capitalized.
Please see Note F1 for the split of the capital expenditure by segments.
The line \u201cOther\u201d mainly includes changes following portfolio transactions and reclassification of property, plant and equipment under construction to the appropriate categories when they are ready for intended use.
The 2023 additions and depreciation figures include the amounts related to the Specialty Businesses until the Partial Demerger on December 8, 2023.
NOTE F21
Right-of-use assets and lease obligations
fAccounting policy
Definition of a lease
At inception of a contract, which generally coincides with the date the contract is signed, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
An asset is typically identified by being explicitly specified in a contract. However, an asset can also be identified by being implicitly specified at the time that the asset is made available for use by the customer. If the supplier has a substantive substitution right, then the asset is not identified. A substantive substitution right means that (a) the supplier has the practical ability to substitute the asset throughout the period of use, and (b) would economically benefit from doing so.
To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether, throughout the period of use, it has:
\u2022the right to obtain substantially all of the economic benefits from use of the identified asset; and
\u2022the right to direct the use of the identified asset. This is generally the case when the Group has the decision-making rights regarding how and for what purpose the asset is used.
The Group\u2019s leased assets relate mainly to buildings, transportation equipment, and industrial equipment.
Lease term
The Group determines the lease term as the non-cancellable period of a lease, together with both:
\u2022periods covered by an option to extend the lease if the Group is reasonably certain to exercise that option; and
\u2022periods covered by an option to terminate the lease if the Group is reasonably certain not to exercise that option.
In its assessment, the Group considers the impact of the following factors (non-exhaustive):
\u2022contractual terms and conditions for the optional periods, compared with market rates;
\u2022significant leasehold improvements undertaken (or expected to be undertaken) over the term of the contract;
\u2022costs relating to the termination of the lease, including relocation costs, costs of identifying another underlying asset suitable for the Group\u2019s needs, costs of integrating a new asset into the Group\u2019s operations, and termination penalties;
\u2022the importance of that underlying asset to the Group\u2019s operations, including the availability of suitable alternatives;
\u2022conditionality associated with exercising the option (i.e. When the option can be exercised only if one or more conditions are met), and the likelihood that those conditions will exist; and
\u2022past practice.
Right-of-use asset and lease liability
The Group recognizes a right-of-use asset and a lease liability at the lease commencement date, which is the date that the lessor makes the asset available for use by the Group except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. The right-of-use assets are presented separately in the consolidated statement of financial position, and the lease liabilities are presented as part of financial debt.
Right-of-use asset
The right-of-use asset is initially measured at cost, which comprises:
\u2022the amount of the initial measurement of the lease liability;
\u2022any lease payments made at or before the commencement date, less any lease incentive received; and
\u2022any initial direct costs incurred by the Group.
After the commencement date, the right-of-use asset is measured at cost less any accumulated depreciation and any accumulated impairment losses. Right-of-use assets are depreciated using the straight-line depreciation method, from the commencement date to (a) the end of the useful life of the underlying asset, in case the lease transfers ownership of the underlying asset to the Group by the end of the lease term, or the lease contains a purchase option that the Group is reasonably certain to exercise, or (b) the earlier of the end of the useful life and the end of the lease term, in all other cases.
Lease liability
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the respective Group entity\u2019s incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise the following:
\u2022fixed payments, less any lease incentives receivable;
\u2022variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
\u2022amounts expected to be payable by the Group under residual value guarantees;
\u2022the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
\u2022payments of penalties for early terminating the lease, if the Group is reasonably certain to exercise an option to early terminate the lease.
Service components (e.g. utilities, maintenance, insurance) are excluded from the measurement of the lease liability.
After the commencement date, the lease liability is measured by:
\u2022increasing the carrying amount to reflect interest on the lease liability;
\u2022reducing the carrying amount to reflect the lease payments made; and
\u2022remeasuring the carrying amount to reflect any reassessment or lease modifications, or to reflect the impact from a revised index or rate.
Leasing of Palladium
The Group uses palladium, a precious metal, for certain of its operations. Next to purchasing this palladium, the Group also enters into various \u201cleasing\u201d agreements with financial institutions that give the Group the right to use palladium for a certain period and then return it at the end of the \"lease\". Based on our analysis of these agreements, these contracts are not in the scope of IFRS 16 Leases or IFRS 9 Financial Instruments. Due to the lack of clear IFRS guidance, the Group applied judgment to determine whether these rights and obligations shall be accounted for on a gross or a net basis. Considering that the Group bears no price risk during the \"lease\" term and is not in full control of the asset (in accordance with the IFRS Conceptual Framework), the Group believes a net presentation gives a better view on the economic substance of the transaction. As a result, only accruals are recorded for the production losses and regeneration costs and the \u201clease\u201d fee is recognized within cost of sales.
| \n In \u20ac million | \n\n Land | \n\n Buildings | \n\n Transportation equipment | \n\n Industrial equipment | \n\n Other tangible assets | \n\n Total | \n
|---|---|---|---|---|---|---|
| \n Gross carrying amount | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n 19 | \n\n 250 | \n\n 289 | \n\n 279 | \n\n 16 | \n\n 852 | \n
| \n Additions | \n\n 0 | \n\n 17 | \n\n 62 | \n\n 15 | \n\n 7 | \n\n 101 | \n
| \n Disposals and closures | \n\n 0 | \n\n -25 | \n\n -16 | \n\n -18 | \n\n -2 | \n\n -62 | \n
| \n Increase through business combinations | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Currency translation differences | \n\n 0 | \n\n -3 | \n\n -7 | \n\n -3 | \n\n 0 | \n\n -14 | \n
| \n Partial Demerger | \n\n -11 | \n\n -170 | \n\n -82 | \n\n -133 | \n\n -12 | \n\n -409 | \n
| \n Other | \n\n 0 | \n\n 5 | \n\n 15 | \n\n -10 | \n\n 1 | \n\n 11 | \n
| \n December 31, 2023 | \n\n 8 | \n\n 73 | \n\n 261 | \n\n 128 | \n\n 8 | \n\n 479 | \n
| \n Additions | \n\n 0 | \n\n 2 | \n\n 38 | \n\n 7 | \n\n 3 | \n\n 50 | \n
| \n Disposals and closures | \n\n 0 | \n\n -3 | \n\n -16 | \n\n -5 | \n\n 0 | \n\n -25 | \n
| \n Increase through business combinations | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Currency translation differences | \n\n 0 | \n\n 0 | \n\n 11 | \n\n 1 | \n\n 0 | \n\n 13 | \n
| \n Other | \n\n 0 | \n\n -1 | \n\n 2 | \n\n 2 | \n\n 2 | \n\n 5 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n December 31, 2024 | \n\n 9 | \n\n 70 | \n\n 296 | \n\n 134 | \n\n 13 | \n\n 522 | \n
| \n Accumulated depreciation | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n -5 | \n\n -115 | \n\n -148 | \n\n -100 | \n\n -9 | \n\n -377 | \n
| \n Depreciation | \n\n -1 | \n\n -31 | \n\n -47 | \n\n -32 | \n\n -3 | \n\n -114 | \n
| \n Impairment | \n\n 0 | \n\n -1 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n -1 | \n
| \n Disposals and closures | \n\n 0 | \n\n 16 | \n\n 16 | \n\n 18 | \n\n 2 | \n\n 53 | \n
| \n Currency translation differences | \n\n 0 | \n\n 2 | \n\n 3 | \n\n 1 | \n\n 0 | \n\n 6 | \n
| \n Partial Demerger | \n\n 4 | \n\n 90 | \n\n 54 | \n\n 67 | \n\n 5 | \n\n 219 | \n
| \n December 31, 2023 | \n\n -2 | \n\n -39 | \n\n -122 | \n\n -45 | \n\n -5 | \n\n -213 | \n
| \n Depreciation | \n\n 0 | \n\n -10 | \n\n -33 | \n\n -16 | \n\n -2 | \n\n -62 | \n
| \n Impairment | \n\n 0 | \n\n -4 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n -4 | \n
| \n Disposals and closures | \n\n 0 | \n\n 3 | \n\n 16 | \n\n 5 | \n\n 0 | \n\n 25 | \n
| \n Currency translation differences | \n\n 0 | \n\n 0 | \n\n -5 | \n\n -1 | \n\n 0 | \n\n -5 | \n
| \n Other | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n December 31, 2024 | \n\n -3 | \n\n -48 | \n\n -144 | \n\n -56 | \n\n -7 | \n\n -258 | \n
| \n Net carrying amount | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n 14 | \n\n 134 | \n\n 141 | \n\n 178 | \n\n 6 | \n\n 474 | \n
| \n December 31, 2023 | \n\n 6 | \n\n 34 | \n\n 139 | \n\n 83 | \n\n 3 | \n\n 267 | \n
| \n December 31, 2024 | \n\n 6 | \n\n 22 | \n\n 152 | \n\n 78 | \n\n 6 | \n\n 264 | \n
The Group primarily leases buildings that include office buildings, and warehouses. Those leases are generally long-term leases and may include extension options.
The Group leases transportation equipment that mainly consists of railcars and containers to transport the Group\u2019s products.
Industrial equipment mainly relates to utility assets.
Generally, lease contracts are negotiated by the local teams and contain a wide range of different terms and conditions. Many lease contracts contain extension options and/or early termination options to provide the Group with operational flexibility. Such options are considered when determining the lease term and the lease liability when it is reasonably certain that they will be exercised.
If the group exercised its extension options not currently included in the lease liability, the present value of the additional payments would be \u20ac25 million at December\u00a031, 2024 (\u20ac42 million at December 31, 2023).
The lease contracts signed not yet commenced amount was \u20ac203 million at December 31, 2024 (\u20ac210 million at December 31, 2023) and is mainly related to a second waste-wood boiler in Germany, industrial equipment in France, and terminal services and rail cars in the United States.
Total cash outflows for leases amount to \u20ac75 million for 2024, of which \u20ac63 million related to payment of lease liabilities and \u20ac12 million of interest expenses. Information on the corresponding lease liabilities (long-term part of \u20ac236 million and short-term part of \u20ac70 million) can be found in the note F32 Financial Instruments. Information on the finance expense related to lease liabilities can be found in note F6 Net financial charges.
The 2023 figures contain the amounts related to Specialty Businesses until December 8, 2023.
In 2024, the expense related to both low-value and short-term leases was \u20ac5 million.
At the end of 2024, the total (gross) value of palladium leased still to be returned amounted to \u20ac28 million (end of 2023: \u20ac33 million). The difference is mainly due to the change of the market price of the commodity.
NOTE F22
Investments in associates and\u00a0joint ventures
The list of associates and joint ventures is available in the note F40 List of companies included in the consolidation scope.
The associates and joint ventures not classified as held for sale/discontinued operations are accounted for under the equity method of accounting.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|---|
| \n Associates | \n\n Joint ventures | \n\n Total | \n\n Associates | \n\n Joint ventures | \n\n Total | \n|
| \n Investments in associates and joint ventures | \n\n 47 | \n\n 169 | \n\n 216 | \n\n 42 | \n\n 188 | \n\n 230 | \n
| \n Earnings from associates and joint ventures | \n\n 4 | \n\n 35 | \n\n 38 | \n\n 3 | \n\n 50 | \n\n 53 | \n
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n January 1 | \n\n 42 | \n\n 18 | \n
| \n Profit for the year | \n\n 4 | \n\n 4 | \n
| \n Dividends received | \n\n -1 | \n\n -1 | \n
| \n Currency translation differences | \n\n 3 | \n\n 0 | \n
| \n Partial Demerger | \n\n 0 | \n\n 20 | \n
| \n December 31 | \n\n 47 | \n\n 42 | \n
In 2023, the figures contain the amounts related to Specialty Businesses until December 8.
The amount in Partial Demerger results mainly from loss of control due to partial demerger and the change of the consolidation scope from full consolidation to equity accounting.
The tables below present the summarized financial information of all the associates and the summarized financial information of the major associates. The associates had no contingent liabilities or capital commitments as at December 31, 2024 and 2023.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|---|
| \n Total | \n\n Of which Quingdao Hiwin Solvay Chemicals | \n\n Of which Solvay (Zhenjiang) Chemicals | \n\n Total | \n\n Of which Quingdao Hiwin Solvay Chemicals | \n\n Of which Solvay (Zhenjiang) Chemicals | \n|
| \n Ownership interest | \n\n \n | \n\n 30% | \n\n 9% | \n\n \n | \n\n 30% | \n\n 9% | \n
| \n Operating Segment | \n\n \n | \n\n Performance Chemicals | \n\n Basic Chemicals | \n\n \n | \n\n Performance Chemicals | \n\n Basic Chemicals | \n
| \n Statement of financial position | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current assets | \n\n 169 | \n\n 22 | \n\n 137 | \n\n 163 | \n\n 24 | \n\n 130 | \n
| \n Current assets | \n\n 242 | \n\n 22 | \n\n 211 | \n\n 231 | \n\n 20 | \n\n 202 | \n
| \n Cash and cash equivalents | \n\n 9 | \n\n 7 | \n\n 1 | \n\n 139 | \n\n 4 | \n\n 135 | \n
| \n Non-current liabilities | \n\n 4 | \n\n 1 | \n\n 1 | \n\n 4 | \n\n 2 | \n\n 1 | \n
| \n Non-current financial debt | \n\n 2 | \n\n 0 | \n\n 1 | \n\n 2 | \n\n 0 | \n\n 0 | \n
| \n Current liabilities | \n\n 89 | \n\n 16 | \n\n 68 | \n\n 86 | \n\n 20 | \n\n 61 | \n
| \n Current financial debt | \n\n 4 | \n\n 4 | \n\n 1 | \n\n 4 | \n\n 4 | \n\n 0 | \n
| \n Net asset | \n\n 319 | \n\n 27 | \n\n 279 | \n\n 304 | \n\n 23 | \n\n 270 | \n
| \n Carrying Amount of the interest in the Associate | \n\n 47 | \n\n 8 | \n\n 26 | \n\n 42 | \n\n 7 | \n\n 25 | \n
| \n Income statement | \n\n 2024 | \n\n 2023 | \n||||
|---|---|---|---|---|---|---|
| \n Sales | \n\n 340 | \n\n 52 | \n\n 276 | \n\n 69 | \n\n 54 | \n\n \n | \n
| \n Depreciation and amortization | \n\n 3 | \n\n 3 | \n\n 0 | \n\n 3 | \n\n 3 | \n\n \n | \n
| \n Interest on loans and short term deposits | \n\n 1 | \n\n 0 | \n\n 0 | \n\n 2 | \n\n 0 | \n\n \n | \n
| \n Profit for the year from continuing operations | \n\n 29 | \n\n 3 | \n\n 25 | \n\n 3 | \n\n 1 | \n\n \n | \n
| \n Profit for the year | \n\n 29 | \n\n 3 | \n\n 25 | \n\n 3 | \n\n 1 | \n\n \n | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Total comprehensive income | \n\n 29 | \n\n 3 | \n\n 25 | \n\n 4 | \n\n 1 | \n\n \n | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends received | \n\n 1 | \n\n 0 | \n\n 1 | \n\n 1 | \n\n 0 | \n\n \n | \n
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n January 1 | \n\n 188 | \n\n 790 | \n
| \n Additions | \n\n 0 | \n\n 0 | \n
| \n Capital increase / (decrease) | \n\n 0 | \n\n -3 | \n
| \n Profit for the year | \n\n 35 | \n\n 67 | \n
| \n Dividends received | \n\n -20 | \n\n -24 | \n
| \n Currency translation differences | \n\n -13 | \n\n -13 | \n
| \n Impairment reversal | \n\n \n | \n\n 0 | \n
| \n Other | \n\n -21 | \n\n -3 | \n
| \n Sale of RusVinyl | \n\n \n | \n\n -428 | \n
| \n Partial Demerger | \n\n \n | \n\n -197 | \n
| \n December 31 | \n\n 169 | \n\n 188 | \n
In 2023, the figures contain the amounts related to Specialty Businesses until December 8.
The amount in Partial Demerger mainly consists of demerged Strata Solvay Advanced Materials and Hindustan Gum & Chemicals.
The tables below present the summarized financial information of the material joint ventures. The joint ventures had no contingent liabilities or capital commitments as at December 31, 2024 and 2023.
| \n December 31, 2024 | \n\n Peroxidos do Brasil Ltda | \n\n Aqua Pharma Group | \n\n Shinsol Advanced Chemicals | \n
|---|---|---|---|
| \n In \u20ac million | \n\n \n | \n\n \n | \n\n \n | \n
| \n Ownership interest | \n\n 69.40% | \n\n 50% | \n\n 51.0% | \n
| \n Operating Segment | \n\n Basic Chemicals | \n\n Basic Chemicals | \n\n Basic Chemicals | \n
| \n Statement of financial position | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current assets | \n\n 125 | \n\n 20 | \n\n 24 | \n
| \n Current assets | \n\n 152 | \n\n 30 | \n\n 3 | \n
| \n Cash and cash equivalents | \n\n 95 | \n\n 17 | \n\n 1 | \n
| \n Non-current liabilities | \n\n 8 | \n\n 2 | \n\n 6 | \n
| \n Non-current financial debt | \n\n 1 | \n\n 0 | \n\n 6 | \n
| \n Current liabilities | \n\n 69 | \n\n 6 | \n\n 2 | \n
| \n Current financial debt | \n\n 11 | \n\n 0 | \n\n 0 | \n
| \n Net asset | \n\n 199 | \n\n 42 | \n\n 20 | \n
| \n Carrying Amount of the interest in the Joint Venture | \n\n 138 | \n\n 21 | \n\n 10 | \n
| \n 2024 income statement | \n\n \n | \n\n \n | \n\n \n | \n
|---|---|---|---|
| \n Sales | \n\n 176 | \n\n 51 | \n\n 0 | \n
| \n Depreciation and amortization | \n\n -7 | \n\n -4 | \n\n 0 | \n
| \n Cost of borrowings | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Interest on loans and short-term deposits | \n\n 9 | \n\n 0 | \n\n 0 | \n
| \n Income taxes | \n\n -24 | \n\n -2 | \n\n 0 | \n
| \n Profit for the year from continuing operations | \n\n 49 | \n\n 6 | \n\n -6 | \n
| \n Profit for the year | \n\n 49 | \n\n 6 | \n\n -6 | \n
| \n Other comprehensive income | \n\n -12 | \n\n 5 | \n\n 0 | \n
| \n Total comprehensive income | \n\n 38 | \n\n 11 | \n\n -6 | \n
| \n Dividends received | \n\n 20 | \n\n 0 | \n\n 0 | \n
Other comprehensive income mainly comprises the currency translation differences.
| \n December 31, 2023 In \u20ac million | \n\n Peroxidos do Brasil Ltda | \n\n Shandong Huatai Interox Chemical Co. Ltd | \n\n Aqua Pharma Group | \n\n Shinsol Advanced Chemicals | \n
|---|---|---|---|---|
| \n Ownership interest | \n\n 69.40% | \n\n 50% | \n\n 50% | \n\n 51.0% | \n
| \n Operating Segment | \n\n Basic Chemicals | \n\n Basic Chemicals | \n\n Basic Chemicals | \n\n Performance Chemicals | \n
| \n Statement of financial position | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current assets | \n\n 121 | \n\n 7 | \n\n 24 | \n\n 22 | \n
| \n Current assets | \n\n 144 | \n\n 28 | \n\n 20 | \n\n 6 | \n
| \n Cash and cash equivalents | \n\n 84 | \n\n 22 | \n\n 9 | \n\n 6 | \n
| \n Non-current liabilities | \n\n 8 | \n\n - | \n\n 2 | \n\n 4 | \n
| \n Non-current financial debt | \n\n 1 | \n\n 0 | \n\n 0 | \n\n 4 | \n
| \n Current liabilities | \n\n 50 | \n\n 10 | \n\n 5 | \n\n 2 | \n
| \n Current financial debt | \n\n 6 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Net asset | \n\n 206 | \n\n 25 | \n\n 38 | \n\n 23 | \n
| \n Carrying Amount of the interest in the Joint Venture | \n\n 143 | \n\n 12 | \n\n 19 | \n\n 12 | \n
| \n 2023 income statement | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
|---|---|---|---|---|
| \n Sales | \n\n 195 | \n\n 40 | \n\n 32 | \n\n 0 | \n
| \n Depreciation and amortization | \n\n -7 | \n\n -1 | \n\n -3 | \n\n 0 | \n
| \n Cost of borrowings | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Interest on loans and short-term deposits | \n\n 8 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Income taxes | \n\n -23 | \n\n -3 | \n\n -2 | \n\n 0 | \n
| \n Profit for the year from continuing operations | \n\n 56 | \n\n 8 | \n\n -2 | \n\n -2 | \n
| \n Profit for the year | \n\n 56 | \n\n 8 | \n\n -2 | \n\n -2 | \n
| \n Other comprehensive income | \n\n 4 | \n\n 0 | \n\n -3 | \n\n 0 | \n
| \n Total comprehensive income | \n\n 61 | \n\n 8 | \n\n -5 | \n\n -2 | \n
| \n Dividends received | \n\n 18 | \n\n 2 | \n\n 0 | \n\n 0 | \n
Other comprehensive income mainly comprises the currency translation differences.
Peroxidos do Brasil and Solvay Brasil settled the antitrust cases with CADE (the Brazilian antitrust authority). The corresponding amounts and the legal fees were reflected in and adjusted the existing provisions, with a joint effect of \u20ac 3.6 million in the 2024 consolidated profit or loss.
Please refer to the Litigation section of the Risk Management chapter of the Annual Integrated Report for further details.
NOTE F31
Provisions
fAccounting policy
General
Provisions are recognized when (a) the Group has a present obligation (legal or constructive) as a result of a past event, (b) it is probable that the Group will be required to settle the obligation, and (c) a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount is the present value of expenditures required to settle the obligation. Impacts of changes in discount rates are generally recognized in the financial result.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received when the Group settles the obligation.
Restructurings
A restructuring provision is recognized when the Group has developed a detailed formal plan for the restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring, which are those amounts that are both necessarily entailed by the restructuring and not associated with the ongoing activities of the entity.
Environmental remediation costs
Environmental liabilities are mainly related to non-ongoing activities (shut-down sites, discontinued activities or divested activities where Solvay maintains certain commitments) and, to a lower extent, to ongoing activities (see comments below).
An environmental provision is recognized, in accordance with IAS 37, when there is a current legal or constructive obligation resulting from past events which will result in a probable outflow of resources (expenses / cash outs) to settle it and for which a reliable estimate of such outflows and timing can be made.
The environmental expenses encompass, but are not limited to, the following key matters:
\u2022Sampling and analytical costs for soil and ground water monitoring
\u2022Cost related to dismantling when required to meet a remediation or permit obligation
\u2022Asbestos removal when obligated by regulation
\u2022Environmental investigations and studies (Risk Assessments, Phase I and II soil and groundwater)
The closing amount of the environmental provisions is based on the net present value of the future cash flows needed, for current and future years, to settle remediation obligations. Forecast expenditures are based on external consultant estimates, where appropriate and possible. Future expenditures are forecast and revised biannually and validated quarterly by Solvay finance and suitably qualified industrial experts led by the Group Environmental Rehabilitation Director and benefit from inputs of legal department staff for the evolution of Environmental Regulations.
In the absence of probable obligations, a contingent liability may be disclosed to represent the future possible liability. In some cases, contingent liabilities cannot be quantified. See Note F36 Contingent liabilities and financial guarantees.
| \n In \u20ac million | \n\n Restructuring | \n\n Environment | \n\n Litigation | \n\n Other | \n\n Total | \n
|---|---|---|---|---|---|
| \n December 31, 2023 | \n\n 83 | \n\n 506 | \n\n 61 | \n\n 202 | \n\n 852 | \n
| \n Additions | \n\n 123 | \n\n 97 | \n\n 14 | \n\n 80 | \n\n 314 | \n
| \n Reversals of unused amounts | \n\n -34 | \n\n -11 | \n\n -8 | \n\n -26 | \n\n -79 | \n
| \n Uses | \n\n -73 | \n\n -66 | \n\n -8 | \n\n -52 | \n\n -199 | \n
| \n Increase/decrease through discounting | \n\n 0 | \n\n -6 | \n\n 1 | \n\n 0 | \n\n -6 | \n
| \n Remeasurements | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Currency translation differences | \n\n 0 | \n\n -9 | \n\n -2 | \n\n 1 | \n\n -10 | \n
| \n Acquisitions and changes in consolidation scope | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Disposals | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Transfer to liabilities associated with assets held for sale | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Other | \n\n 0 | \n\n 0 | \n\n -3 | \n\n 1 | \n\n -2 | \n
| \n December 31, 2024 | \n\n 99 | \n\n 511 | \n\n 55 | \n\n 205 | \n\n 871 | \n
| \n Of which current provisions | \n\n 67 | \n\n 70 | \n\n 29 | \n\n 149 | \n\n 315 | \n
The provisions increased by \u20ac19 million in 2024, of which an increase of \u20ac16 million for Restructuring and \u20ac5 million for Environment partially offset by \u20ac(2) million for litigation and other provisions.
See below for more details on the recognition and additions to the provisions.
The movements in Other provisions mainly relate to post-closing adjustments resulting from M&A warranties including indemnities for environmental remediation on sites subject to disinvestment.
Management expects provisions (other than employee benefits) to be used (cash outlays) as follows:
| \n In \u20ac million | \n\n up to | \n\n between | \n\n beyond | \n\n Total | \n
|---|---|---|---|---|
| \n Total provisions for environment | \n\n 243 | \n\n 71 | \n\n 197 | \n\n 511 | \n
| \n Total provisions for litigation and other | \n\n 235 | \n\n 25 | \n\n 0 | \n\n 260 | \n
| \n Total provisions for restructuring | \n\n 99 | \n\n \n | \n\n \n | \n\n 99 | \n
| \n December 31, 2024 | \n\n 578 | \n\n 96 | \n\n 197 | \n\n 871 | \n
In 2024, these provisions amount to \u20ac99 million, compared with \u20ac83 million at the end of 2023.
The provisions at the end of 2024 mainly relate to the restructuring charges for the simplification of all support functions in the frame of the Group\u2019s simplification and transformation program, including the strategic transformation measures, site closures, and the exit from the Transition Services Agreement (TSA). According to the TSA, Solvay will be compensated by Syensqo for restructuring costs currently estimated at \u20ac22 million (\u20ac19 million in Other Receivables, and \u20ac3 million in Loans and Other Assets).
These provisions amount to \u20ac511 million at the end of 2024, compared with \u20ac506 million at the end of 2023, and pertain to:
hmines and drilling operations to the extent that legislation and/or operating permits in relation to quarries, mines and drilling operations contain requirements to remedy or to pay compensation to third parties. Those provisions amount to \u20ac148 million at the end of 2024 and most of these, based on local expert advice, can be expected to be used within the 20-year horizon.
hlime dikes (settling ponds related mainly to soda ash plants), landfills at sites and third-party landfills sites (linked to several industrial activities). These provisions have a horizon of 1 to 20 years.
hvarious types of pollution (organic, inorganic) coming from miscellaneous historical chemical productions; these provisions mainly cover discontinued activities or closed plants. Most of these provisions have a horizon of 1 to 20 years.
The variation of environmental provisions was also impacted by the higher discount rate reducing the present value of the overall liability by \u20ac (25) million. This effect, combined with the unwinding of the opening liabilities for \u20ac19 million resulted in a net decrease of \u20ac(6) million related to discounting. The estimated amounts are discounted based on the probable date of settlement and are periodically adjusted to reflect the passage of time.
The breakdown of the environmental provisions and related uses for the main countries/regions is as follows:
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|---|
| \n Provisions | \n\n In % | \n\n Provisions ongoing activities | \n\n Use of provisions | \n\n Provisions | \n\n In % | \n\n Provisions ongoing activities | \n\n Use of provisions | \n|
| \n France | \n\n 154 | \n\n 30% | \n\n 0 | \n\n -26 | \n\n 147 | \n\n 29% | \n\n 0 | \n\n -21 | \n
| \n Germany | \n\n 135 | \n\n 26% | \n\n 46 | \n\n -12 | \n\n 115 | \n\n 23% | \n\n 30 | \n\n -4 | \n
| \n Rest of Europe | \n\n 167 | \n\n 33% | \n\n 6 | \n\n -18 | \n\n 170 | \n\n 34% | \n\n 6 | \n\n -17 | \n
| \n North America | \n\n 4 | \n\n 1% | \n\n 0 | \n\n -1 | \n\n 5 | \n\n 1% | \n\n 0 | \n\n -23 | \n
| \n Rest of the world | \n\n 51 | \n\n 10% | \n\n 1 | \n\n -9 | \n\n 69 | \n\n 13% | \n\n 1 | \n\n -10 | \n
| \n Total | \n\n 511 | \n\n 100% | \n\n 53 | \n\n -66 | \n\n 506 | \n\n 100% | \n\n 37 | \n\n -75 | \n
The disclosure of comparatives related to environmental provisions was restated to follow the classification of some provisions as resulting from ongoing activities.
Provisions for litigation refer to indirect tax and legal exposures. They amount to \u20ac55 million in 2024 (\u20ac61 million in 2023). The balance at the end of 2024 relates to indirect tax risks (\u20ac13 million) and legal claims (\u20ac42 million).
Other provisions amount to \u20ac205 million in 2024 (\u20ac202 million in 2023) including \u20ac72 million linked to Dombasle Energie (see the part related to provisions in Main Events). They relate to various risks, of which the main risks concern (i) the shutdown or disposal of activities and (ii) risk related to the execution of contracts or termination. Other provisions also include a provision for litigation post M&A deal for which an indemnification asset for \u20ac24 million (In Loans and other assets) has been recognized as foreseen in the Separation Agreement.
NOTE F33
Net indebtedness
The Group\u2019s net indebtedness is the balance between its financial debts and other financial instruments, and cash and cash equivalents.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Financial debt | \n\n 2,138 | \n\n 2,192 | \n
| \n Cash and cash equivalents | \n\n -539 | \n\n -584 | \n
| \n Other financial instruments | \n\n -16 | \n\n -118 | \n
| \n Net indebtedness | \n\n 1,583 | \n\n 1,489 | \n
The financial debt at the end of 2024 includes:
htwo senior bonds for a total of \u20ac1,500 million (\u20ac750 million maturing in 2028 and \u20ac750 million maturing in 2031);
ha term loan for an amount of \u20ac200 million;
hthe lease debt IFRS16 \u20ac306 million;
hother financial debt (\u20ac140 million, excluding lease debt) mainly in current financial debt.
Solvay is Investment Grade rating BBB-/A3 (stable outlook) by Standard & Poor\u2019s (as of December 4, 2024).
| \n In \u20ac million (except where indicated) | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|---|
| \n Nominal amount | \n\n Coupon | \n\n Maturity | \n\n Secured | \n\n Amount at amortized cost | \n\n Fair value | \n\n Amount at amortized cost | \n\n Fair value | \n|
| \n 2028 Bonds (issuance \u20ac 750 million) | \n\n 750 | \n\n 3.875% | \n\n 2028 | \n\n No | \n\n 746 | \n\n 766 | \n\n n/a | \n\n n/a | \n
| \n 2031 Bonds (issuance \u20ac 750 million) | \n\n 750 | \n\n 4.250% | \n\n 2031 | \n\n No | \n\n 746 | \n\n 774 | \n\n n/a | \n\n n/a | \n
| \n Total senior \u20ac notes | \n\n 1,500 | \n\n \n | \n\n \n | \n\n \n | \n\n 1,492 | \n\n 1,540 | \n\n 0 | \n\n 0 | \n
| \n Credit lines Drawdown (\u20ac 1,500 million) | \n\n \n | \n\n Floating rate | \n\n 2025 | \n\n No | \n\n 0 | \n\n 0 | \n\n 1,500 | \n\n 1,500 | \n
| \n Total Bridge facilities(1) | \n\n 0 | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n\n 0 | \n\n 1,500 | \n\n 1,500 | \n
| \n Term loan (\u20ac 200 million) | \n\n 200 | \n\n Floating rate | \n\n 2026 | \n\n \n | \n\n 200 | \n\n 200 | \n\n 200 | \n\n 200 | \n
| \n Other borrowings from third parties | \n\n 140 | \n\n \n | \n\n \n | \n\n \n | \n\n 140 | \n\n 140 | \n\n 185 | \n\n 185 | \n
| \n Lease debts IFRS16 | \n\n 306 | \n\n \n | \n\n \n | \n\n \n | \n\n 306 | \n\n 306 | \n\n 307 | \n\n 307 | \n
| \n Total | \n\n 2,146 | \n\n \n | \n\n \n | \n\n \n | \n\n 2,138 | \n\n 2,186 | \n\n 2,192 | \n\n 2,192 | \n
(1)In 2023, the outstanding Solvay bridge facility had an initial maturity in October 2024, but the company had an unconditional right to extend two times the maturity by 6 months, until October 2025. The bridge facility was therefore classified as non-current.
There are no instances of default on the above-mentioned financial debts. There are no financial covenants breach, neither on Solvay SA/NV, nor on any of the Group\u2019s holding companies.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Non-current other financial instruments | \n\n 0 | \n\n 0 | \n
| \n Current other financial instruments | \n\n 16 | \n\n 119 | \n
| \n Currency swaps | \n\n 1 | \n\n 2 | \n
| \n Other marketable securities > 3 months | \n\n 4 | \n\n 50 | \n
| \n Other current financial assets | \n\n 11 | \n\n 67 | \n
| \n Other financial instruments | \n\n 16 | \n\n 119 | \n
The other marketable securities >3 months include the bank drafts position.
In 2024, the decrease in other current financial assets is explained by the transfers of CO2 derivative financial instruments to the OTC market (previously traded in the exchange market). As a consequence, margin calls of Energy Services for instruments with a negative fair value that represented collateral for the obligations decreased.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Cash | \n\n 211 | \n\n 300 | \n
| \n Term deposits | \n\n 328 | \n\n 285 | \n
| \n Cash and cash equivalents | \n\n 539 | \n\n 584 | \n
By their nature, the carrying amount of cash and cash equivalents is equal to, or a very good proxy of, its fair value.
As at December 31, 2024 and December 31, 2023, cash and cash equivalents were not subject to statutory, regulatory, or contractual restrictions and there were no material limitations on the ability to transfer cash or cash-equivalents within the group.
| \n In \u20ac million | \n\n Dec 31, 2023 | \n\n 2024 | \n|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| \n Total | \n\n Cash flows from increase of borrowings | \n\n Cash flows from repayment of borrowings | \n\n Changes in foreign exchange rates | \n\n Changes in other current financial assets | \n\n Other in financing cash flows | \n\n Transfer from non-current to current | \n\n Payment of lease liabilities | \n\n Other | \n\n Partial Demerger | \n\n Total | \n|
| \n Bonds | \n\n - | \n\n 1,492 | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n 1,492 | \n
| \n Other non-current debts | \n\n 1,737 | \n\n - | \n\n -1,500 | \n\n 0 | \n\n - | \n\n - | \n\n -11 | \n\n - | \n\n 30 | \n\n 0 | \n\n 255 | \n
| \n Long-term finance lease debt | \n\n 243 | \n\n - | \n\n - | \n\n 7 | \n\n - | \n\n - | \n\n -70 | \n\n - | \n\n 55 | \n\n - | \n\n 236 | \n
| \n Interests rate swaps | \n\n 2 | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n 0 | \n\n - | \n\n 2 | \n
| \n Non-current financial debt | \n\n 1,983 | \n\n 1,492 | \n\n -1,500 | \n\n 7 | \n\n - | \n\n - | \n\n -81 | \n\n - | \n\n 85 | \n\n 0 | \n\n 1,985 | \n
| \n Current financial debt | \n\n 211 | \n\n 191 | \n\n -242 | \n\n 0 | \n\n - | \n\n - | \n\n 81 | \n\n -64 | \n\n -22 | \n\n 0 | \n\n 156 | \n
| \n Total financial debt | \n\n 2,192 | \n\n 1,683 | \n\n -1,742 | \n\n 7 | \n\n - | \n\n - | \n\n - | \n\n -64 | \n\n 63 | \n\n 0 | \n\n 2,138 | \n
| \n Other Non-current financial instruments | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n
| \n Currency swaps | \n\n -2 | \n\n - | \n\n - | \n\n 0 | \n\n - | \n\n - | \n\n - | \n\n - | \n\n 1 | \n\n - | \n\n -1 | \n
| \n Other marketable securities > 3 months | \n\n -50 | \n\n - | \n\n - | \n\n 0 | \n\n 9 | \n\n 38 | \n\n - | \n\n - | \n\n - | \n\n - | \n\n -4 | \n
| \n Other current financial assets | \n\n -67 | \n\n - | \n\n - | \n\n 0 | \n\n 49 | \n\n - | \n\n - | \n\n - | \n\n 7 | \n\n - | \n\n -11 | \n
| \n Other financial instruments | \n\n -119 | \n\n - | \n\n - | \n\n 0 | \n\n 58 | \n\n 38 | \n\n - | \n\n - | \n\n 8 | \n\n - | \n\n -16 | \n
| \n Total | \n\n \n | \n\n 1,683 | \n\n -1,742 | \n\n 7 | \n\n 58 | \n\n 38 | \n\n - | \n\n -64 | \n\n 70 | \n\n 0 | \n\n 50 | \n
The financial debt decreased from \u20ac2,192 million at the end of 2023 to \u20ac2,138 million at the end of 2024.
The non-current financial debt in 2024 is stable compared to 2023. It is explained by:
hthe increase of \u20ac1,584 million, which is mainly explained by:
\u2014the issuance of two senior bonds for a total of \u20ac1,492 million,
\u2014two new instruments classified as financial debt for \u20ac30 million (non-current portion) following the unwinding of flexi-swaps transacted in 2023,
\u2014the increase of the long-term lease (IFRS 16) debt for \u20ac50 million,
\u2014the change in foreign exchange rates for \u20ac7 million.
hthe decrease of \u20ac(1,581) million, which is mainly explained by:
\u2014the repayment of \u20ac(1,500) million bridge facility set up at the end of 2023 in relation to the Partial Demerger
\u2014the transfer to current financial debt for \u20ac(70) million mainly on lease liabilities
The current financial debt decreased by \u20ac(56) million, is mainly resulting from:
hthe increase in borrowings of \u20ac191 million mainly explained by the drawdowns on credit lines of \u20ac185 million
hthe decrease of \u20ac(264) million explained by the repayment of the drawdowns on credit lines for \u20ac(185) million, the repayment of a current loan payable for \u20ac(52)\u00a0million, and net impact of unwinding of flexi-swaps transacted in 2023 for \u20ac(22) million
hthe transfer from non-current financial debt for \u20ac81 million mainly on lease liabilities
hthe repayment of lease (IFRS 16) debts of \u20ac(64) million.
The Group performs annual impairment tests on (groups of) CGUs to which goodwill has been allocated, and each time there are indicators that their carrying amount might be higher than their recoverable amount. This analysis requires management to estimate the future cash flows expected to be generated by the CGUs and a suitable discount rate in order to calculate present value. The recoverable amount is highly sensitive to discount and growth rates.
Further details are provided in note F19 Goodwill and Business Combinations and F23 Impairment.
NOTE F11
Depreciation, amortization and\u00a0impairments
The table below presents the amounts of the total depreciation, amortization and impairment losses (reversals) of continuing operations included in the various headings of the Consolidated Statements of Income.
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Cost of goods sold | \n\n 267 | \n\n 269 | \n
| \n Administrative costs | \n\n 35 | \n\n 37 | \n
| \n Research and development costs | \n\n 9 | \n\n 12 | \n
| \n Other operating gains and (losses) | \n\n 6 | \n\n 10 | \n
| \n Of Which PPA (see Note F4) | \n\n 4 | \n\n 7 | \n
| \n Total depreciation and amortization | \n\n 317 | \n\n 328 | \n
| \n Goodwill Impairment | \n\n 0 | \n\n 38 | \n
| \n Other net Impairment | \n\n 45 | \n\n 57 | \n
| \n Total depreciation, amortization and impairment losses (reversal) | \n\n 362 | \n\n 423 | \n
Please refer to Note F5 Results from portfolio management and major restructurings, legacy remediation and major litigations for the details on impairment.
NOTE F18
Intangible assets
fAccounting policy
An intangible asset is an identifiable non-monetary asset without physical substance. It is identifiable when it is separable, i.e. Is capable of being separated or divided from the Group, or when it arises from contractual or other legal rights. An intangible asset shall be recognized if, and only if:
(a)it is probable that the expected future economic benefits that are attributable to the asset will flow to the Group; and
(b)the cost of the asset can be measured reliably.
Intangible assets acquired or developed internally are initially measured at cost. The cost of an acquired intangible asset comprises its purchase price, import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, and any directly attributable cost of preparing the asset for its intended use. Subsequent expenditure on intangible assets is capitalized only if it is probable that it will increase the future economic benefits associated with the specific asset. Other expenditure is expensed as incurred.
After initial recognition, intangible assets are measured at cost less accumulated amortization and impairment losses, if any.
Intangible assets are amortized on a straight-line basis over their estimated useful lives, which do not exceed the contractual period, if any. The estimated useful lives, residual values and amortization methods are reviewed at each year-end, and any changes in estimates are accounted for prospectively.
fAccounting policy
Goodwill
Goodwill arising in a business combination is recognized as an asset at the date that control is obtained (the acquisition date). Goodwill is measured as the excess of the sum of:
(a)the consideration transferred
(b)the amount of any non-controlling interests in the acquiree; and
(c)in a business combination achieved in stages, the acquisition-date fair value of the previously held equity interest in the acquiree, over the share acquired by the Group in the fair value of the entity\u2019s identifiable net assets at the acquisition date.
Goodwill is not amortized but is tested for impairment on an annual basis, and more frequently if there are any impairment triggers identified.
For impairment testing, goodwill is allocated to each of the Group\u2019s cash-generating units (or groups of cash-generating units) in accordance with IAS 36 Impairment of Assets.
A cash-generating unit (CGU) is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other group(s) of assets.
These tests consist of comparing the carrying amount of the assets or (groups of) CGUs with their recoverable amount. The recoverable amount of an asset or a (group of) CGU(s) is the higher of its fair value less costs to sell and its value in use. If the recoverable amount of the CGU is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognized on goodwill shall not be reversed in a subsequent period.
Assets held for sale include their related goodwill.
On disposal of an operation within a CGU to which goodwill has been allocated, the goodwill associated with the operation disposed of is included in the determination of the profit or loss on disposal. It is measured based on the relative values of the operation disposed of and the portion of the CGU retained, unless another method better reflects the goodwill associated with the operation disposed of.
NOTE F20
Property, plant and equipment
fAccounting policy
General
Property, plant and equipment are tangible items that:
\u2022are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and
\u2022are expected to be used during more than one period.
The items of property, plant and equipment owned by the Group are recognized as property, plant and equipment when the following conditions are satisfied:
\u2022it is probable that the future economic benefits associated with the asset will flow to the Group;
\u2022the cost of the asset can be measured reliably.
In the table below, additions and depreciation expenses include the items of Specialty Businesses until the Partial Demerger.
| \n In \u20ac million | \n\n Land and buildings | \n\n Fixtures and equipment | \n\n Other tangible assets | \n\n Property, plant and equipment under construction | \n\n Total | \n
|---|---|---|---|---|---|
| \n Gross carrying amount | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n 3,021 | \n\n 10,648 | \n\n 425 | \n\n 1,033 | \n\n 15,128 | \n
| \n Additions | \n\n 77 | \n\n 136 | \n\n 7 | \n\n 777 | \n\n 998 | \n
| \n Disposals and closures | \n\n -23 | \n\n -216 | \n\n -17 | \n\n -3 | \n\n -258 | \n
| \n Increase through business combinations | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 0 | \n\n 1 | \n
| \n Currency translation differences | \n\n -35 | \n\n -126 | \n\n -4 | \n\n -16 | \n\n -181 | \n
| \n Partial Demerger | \n\n -1,516 | \n\n -5,458 | \n\n -186 | \n\n -955 | \n\n -8,115 | \n
| \n Other | \n\n 68 | \n\n 393 | \n\n 20 | \n\n -354 | \n\n 128 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n December 31, 2023 | \n\n 1,593 | \n\n 5,379 | \n\n 246 | \n\n 483 | \n\n 7,700 | \n
| \n Additions | \n\n 8 | \n\n 39 | \n\n 4 | \n\n 201 | \n\n 252 | \n
| \n Disposals and closures | \n\n -6 | \n\n -87 | \n\n -5 | \n\n 0 | \n\n -99 | \n
| \n Increase through business combinations | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Currency translation differences | \n\n 3 | \n\n 24 | \n\n -1 | \n\n 12 | \n\n 39 | \n
| \n Other | \n\n 42 | \n\n 136 | \n\n 15 | \n\n -160 | \n\n 33 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n December 31, 2024 | \n\n 1,640 | \n\n 5,491 | \n\n 260 | \n\n 536 | \n\n 7,925 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Accumulated depreciation | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n -1,648 | \n\n -7,818 | \n\n -351 | \n\n 0 | \n\n -9,816 | \n
| \n Depreciation | \n\n -76 | \n\n -459 | \n\n -22 | \n\n \n | \n\n -557 | \n
| \n Impairment | \n\n -11 | \n\n -44 | \n\n -2 | \n\n \n | \n\n -57 | \n
| \n Reversal of impairment | \n\n 0 | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n
| \n Disposals and closures | \n\n 18 | \n\n 214 | \n\n 16 | \n\n \n | \n\n 249 | \n
| \n Currency translation differences | \n\n 16 | \n\n 87 | \n\n 3 | \n\n \n | \n\n 105 | \n
| \n Partial Demerger | \n\n 694 | \n\n 3,788 | \n\n 153 | \n\n \n | \n\n 4,634 | \n
| \n Other | \n\n -19 | \n\n -90 | \n\n -5 | \n\n \n | \n\n -114 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n
| \n December 31, 2023 | \n\n -1,027 | \n\n -4,323 | \n\n -206 | \n\n 0 | \n\n -5,556 | \n
| \n Depreciation | \n\n -35 | \n\n -178 | \n\n -13 | \n\n \n | \n\n -226 | \n
| \n Impairment | \n\n -6 | \n\n -36 | \n\n 0 | \n\n \n | \n\n -42 | \n
| \n Reversal of impairment | \n\n 0 | \n\n 1 | \n\n 0 | \n\n \n | \n\n 1 | \n
| \n Disposals and closures | \n\n 6 | \n\n 86 | \n\n 5 | \n\n \n | \n\n 97 | \n
| \n Currency translation differences | \n\n -2 | \n\n -20 | \n\n 1 | \n\n \n | \n\n -21 | \n
| \n Other | \n\n -3 | \n\n -27 | \n\n 0 | \n\n \n | \n\n -29 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n
| \n December 31, 2024 | \n\n -1,066 | \n\n -4,496 | \n\n -213 | \n\n 0 | \n\n -5,776 | \n
| \n Net carrying amount | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n 1,373 | \n\n 2,830 | \n\n 75 | \n\n 1,033 | \n\n 5,311 | \n
| \n December 31, 2023 | \n\n 566 | \n\n 1,056 | \n\n 39 | \n\n 483 | \n\n 2,145 | \n
| \n December 31, 2024 | \n\n 574 | \n\n 995 | \n\n 46 | \n\n 536 | \n\n 2,150 | \n
In 2024 and 2023, no borrowing costs were capitalized.
Please see Note F1 for the split of the capital expenditure by segments.
The line \u201cOther\u201d mainly includes changes following portfolio transactions and reclassification of property, plant and equipment under construction to the appropriate categories when they are ready for intended use.
The 2023 additions and depreciation figures include the amounts related to the Specialty Businesses until the Partial Demerger on December 8, 2023.
NOTE F23
Impairment
fAccounting policy
General
At the end of each reporting period, the Group reviews whether there is any indication that assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the CGU to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are allocated to individual CGUs, or otherwise they are allocated to the smallest group of CGUs for which a reasonable and consistent allocation basis can be identified.
The recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate. Future cash flows are adjusted for risks not incorporated into the discount rate.
If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or CGU) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined (net of amortization or depreciation) had no impairment loss been recognized for the asset (or CGU) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss. An impairment loss recognized for goodwill shall not be reversed in a subsequent period.
Assets other than non-current assets held for sale
In accordance with IAS 36 Impairment of Assets, the recoverable amount of property, plant and equipment, intangible assets, right-of-use assets, CGUs or groups of CGUs, including goodwill, and equity method investees corresponds to the higher of their fair value less costs of disposal, and their value in use. The latter equals the present value of the future cash flows expected to be derived from each asset, CGU or group of CGUs, and equity method investees and is determined using the following inputs:
\u2022business plan approved by management based on growth and profitability assumptions, considering past performances, forecast changes in the economic environment and expected market developments, including opportunity and risks resulting from climate change (taking into account the Solvay's sustainability strategy \u2013 see note Climate change in the IFRS general accounting policies) and environmental regulations such as products phasing out. For further details, refer to the Risk Management Section. Such business plan generally covers five years, unless management is confident that projections over a longer period are reliable;
\u2022consideration of a terminal value determined based on the cash flows generally obtained by extrapolating the cash flows of the last years of the business plan referred to above, affected by a long-term growth rate deemed appropriate for the activity and the location of the assets;
\u2022discounting of expected cash flows at a rate determined using the weighted average cost of capital formula.
Weighted average cost of capital (WACC) was estimated based on an extensive benchmarking with peers based on which management concluded the following:
hA short term WACC of 7.9% was utilized in 2024 to discount the expected cash flows of the initial four years, computed based on prevailing discount rates;
hA long term WACC of 8.15% was utilized in 2024 to discount the expected cash flows of the fifth year and the Terminal Value and is based on the 3-year averages of key parameters (risk free rates, betas, spreads).
| \n \n | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Short term discount rate (WACC) | \n\n 7.9% | \n\n 9.9% | \n
| \n Long term discount rate (WACC) | \n\n 8.2% | \n\n 8.2% | \n
The decrease in the short-term WACC is mainly due to the variation in the Industry Capital Structure.
After the reassessment of the long-term growth prospects the Group set at:
hCoatis \u2013 0%
hPeroxides \u2013 1%
hSilica \u2013 1%
hSoda Ash \u2013 1%
hSpec Chem \u2013 1%
Other key assumptions are specific to each CGU (utility price, volumes, margin, etc.).
The impairment tests performed at the CGU level at December 31, 2024, were based on the budget 2025 approved by the Board and the Mid Term Plan 2025-2028.
The impairment tests performed at the CGU level at December 31, 2024, did not lead to any impairment of assets, as the recoverable amounts of the (groups of) CGUs were higher than their carrying amounts. More specifically, the difference between the (groups of) CGUs\u2019 value in use and their carrying amount (headroom) represented in all cases more than 10% of their carrying amount. As a result, for these (groups of) CGUs, a reasonable change in a key assumption relating to the recoverable amount for which the (groups of) CGUs is based, would not result in an impairment loss. Given the significant headroom no sensitivities were performed.
Climate related matters were considered in the 2024 impairment analysis; however, it did not give rise to any impairments. In the annual impairment testing, the group considered the planned capital expenditures in its Soda Ash & Derivatives CGU related to the carbon neutrality initiative.
As detailed in the note on climate change, the management has considered the impact of climate change, and more specifically the impact of the execution of the Solvay's sustainability strategy, in the assessment of impairment. Furthermore, the long-term accounting assumptions, including CO2 emission rights and energy prices for the energy intensive Soda Ash GBU have been considered together with applied relevant hedges. Considering the significant headroom on the Soda Ash CGU, the management believes that this headroom is enough to absorb climate change scenarios. Consequently, no sensitivity is provided. The same exercise was done for the other cash generating units and management believes there are no realistic scenarios regarding climate change today, which would lead to an impairment of these assets.
In 2024, the Group impaired some tangible assets in the Special Chem CGU for Fluorine business for an amount of \u20ac(9) million and in other non-cash-generating assets for an amount of \u20ac(36) million.
Deferred tax assets (DTA) are recognized for unused tax losses to the extent that it is probable that taxable profits will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits.
The Group has \u20ac706 million (2023: \u20ac685 million) of tax losses carried forward for which no deferred tax assets were recognized. These losses relate to subsidiaries that have a history of losses, do not expire, and may not be used to offset taxable income elsewhere in the Group. The subsidiaries do not have any taxable temporary differences that could partly support the recognition of these losses as deferred tax assets. On this basis, the Group has determined that it cannot recognize deferred tax assets on these tax losses carried forward.
The goals referred to in the Climate Change Considerations note may have an impact on the estimate of future probability used in the DTA recoverability assessment \u2013 see the note, above.
Further details are provided in Note F7 Income Taxes.
NOTE F7
Income taxes in the income statement and\u00a0the statement of\u00a0financial\u00a0position
fAccounting policy
Current taxes
The current tax payable is based on taxable profit of the year. Taxable profit differs from profit as reported in the consolidated income statement because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group\u2019s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred taxes
Deferred taxes are recognized for temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and their corresponding tax bases used in the computation of taxable profit.
Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.
Deferred tax liabilities are generally recognized for all taxable temporary differences.
No deferred tax liabilities are recognized following the initial recognition of goodwill. In addition, no deferred tax assets or liabilities are recognized with respect to the initial recognition of an asset or liability in a transaction which is not a business combination and affects neither accounting profit nor taxable profit.
Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, joint operations, joint ventures, and associates, except where the Group can control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax assets other than tax loss carryforwards are analyzed on a case-by-case basis, considering all relevant facts and circumstances. For example, a zero taxable profit, after deducting the amounts paid to retirees under a defined benefit plan and for which a deductible temporary difference existed, can justify the recognition of the underlying deferred tax assets. Recognition of deferred tax assets for tax loss carryforwards requires a positive taxable profit during the year that enables the utilization of tax losses that originated in the past. Because of uncertainties inherent to predicting such positive taxable profit, recognition of deferred tax assets from tax loss carryforwards is based on a case-by-case analysis, which is usually based on five-year profit forecasts, except with respect to any financial company for which ten-year financial profit forecasts are considered highly predictable and are consequently used.
The corporate tax reporting team, which monitors the Group deferred tax positions, is involved in assessing deferred tax assets.
Further details are provided in note F7.C.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled, or the asset is realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the way the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Current tax assets and liabilities are offset when there is a legally enforceable right to set off the recognized amounts and when the Group intends to settle its current tax assets and liabilities on a net basis.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
Current and deferred taxes for the period
Current and deferred taxes for the period are recognized as an expense or income in profit or loss, except when they relate to items that are recognized outside profit or loss (whether in other comprehensive income or directly in equity), in which case the tax is also recognized outside profit or loss, or when they arise from the initial accounting for a business combination. In the case of a business combination, the tax effect is considered in the accounting for the business combination.
Exception to the above, as from January 1, 2019, the Group applies the amendments to IAS 12, that apply to the income tax consequences of dividends recognized on or after the beginning of the earliest comparative period, i.e. January 1, 2018. In 2018, the income tax consequences of the coupons on perpetual hybrid bonds classified as equity were recognized in equity. As a result of the adoption of the amendment, those income tax consequences are now recognized in profit or loss.
The income taxes (net expense) recognized in the consolidated income statement decreased by \u20ac121 million in 2024 compared to 2023.
The income taxes (net expense) recognized in other comprehensive income increased by \u20ac26 million in 2024 compared to 2023, mainly due to the movement in employee benefit provisions (see note F30 Employee benefits) and due to the variation of the CO2 emission rights contracts (see note F32 Financial instruments and financial risk management).
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Current taxes related to current year | \n\n -107 | \n\n -180 | \n
| \n Provisions for tax litigations | \n\n -9 | \n\n 1 | \n
| \n Other current taxes related to prior years (a) | \n\n 14 | \n\n 5 | \n
| \n Current taxes | \n\n -102 | \n\n -174 | \n
| \n Changes in unrecognized deferred tax assets (b) | \n\n -13 | \n\n -91 | \n
| \n Deferred tax income on amortization of PPA step-ups | \n\n 1 | \n\n 2 | \n
| \n Deferred tax impact of changes in the nominal tax rates | \n\n 0 | \n\n 2 | \n
| \n Deferred taxes related to prior years (a) | \n\n 6 | \n\n -5 | \n
| \n Other deferred taxes (d) | \n\n 21 | \n\n 59 | \n
| \n Deferred taxes | \n\n 15 | \n\n -34 | \n
| \n Income taxes recognized in the consolidated income statement | \n\n -87 | \n\n -208 | \n
| \n Income taxes on items recognized in other comprehensive income | \n\n -24 | \n\n 2 | \n
The current taxes (net expense) related to the current year decreased by \u20ac(72) million due to lower taxable profits in countries with high current tax rates (Italy, Belgium, France and Germany) as well as some favorable tax adjustments related to prior years (mainly in Italy for \u20ac12 million). Those effects are slightly offset by higher additions to provisions for tax litigations.
i.In 2024, the change in unrecognized deferred tax assets amounted to \u20ac(13) million resulting mainly from non-recognition of DTA in France and from a revision of the forecasted taxable results in South Africa,
ii.In 2024, the other deferred taxes (\u20ac21 million) mainly relate to provisions other than employee benefits.
The effective income tax expense has been reconciled with the theoretical tax expense obtained by applying to the pre-tax profit of each Group entity the nominal tax rate prevailing in the country in which it operates.
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Profit/(Loss) for the year before taxes | \n\n 320 | \n\n 180 | \n
| \n Earnings from associates and joint ventures | \n\n 38 | \n\n 53 | \n
| \n Profit/(Loss) for the year before taxes excluding earnings from associates and joint ventures | \n\n 282 | \n\n 127 | \n
| \n Reconciliation of the tax income/(expense) | \n\n \n | \n\n \n | \n
| \n Total tax income/(expense) of the Group entities computed on the basis of the respective local nominal rates | \n\n -69 | \n\n -27 | \n
| \n Weighted average nominal rate | \n\n 25% | \n\n 21% | \n
| \n Withholding taxes | \n\n -11 | \n\n -31 | \n
| \n Tax effect of changes in nominal tax rates | \n\n 0 | \n\n 2 | \n
| \n Changes in unrecognized deferred tax assets | \n\n -13 | \n\n -91 | \n
| \n Tax effect of permanent differences | \n\n 23 | \n\n -36 | \n
| \n Gain and losses with no tax expense and income | \n\n -10 | \n\n -20 | \n
| \n Taxes disconnected from profit before taxes, and other tax effects without basis | \n\n -12 | \n\n 0 | \n
| \n Provisions for tax litigations | \n\n -8 | \n\n 1 | \n
| \n Other tax effect of current and deferred tax adjustments related to prior years | \n\n 20 | \n\n 0 | \n
| \n Tax effect on distribution of dividends | \n\n -8 | \n\n -4 | \n
| \n Effective tax income/(expense) | \n\n -87 | \n\n -208 | \n
| \n Effective tax rate | \n\n 27% | \n\n 116% | \n
The weighted average nominal rate increased from 2023 (21%) to 2024 (25%). This is due to mix effects between countries with different tax rates; in particular, the Bulgarian companies, where the nominal rate is low, had a higher contribution to the Group\u2019s profit before tax in 2023, thus lowering the average rate.
The higher effective tax rate in 2023 was mainly linked to the reorganization of the Group which led to significant withholding taxes and derecognition of tax assets, and the impact of the RusVinyl disinvestment.
| \n 2024 - In \u20ac million | \n\n Opening balance | \n\n Recognized in income statement | \n\n Recognized in other comprehensive income | \n\n Exchange rate effect | \n\n Other | \n\n Closing balance | \n
|---|---|---|---|---|---|---|
| \n Temporary differences | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Employee benefits obligations | \n\n 98 | \n\n 4 | \n\n -13 | \n\n -3 | \n\n \n | \n\n 86 | \n
| \n Provisions other than employee benefits | \n\n 35 | \n\n 8 | \n\n 0 | \n\n -5 | \n\n \n | \n\n 39 | \n
| \n Property, plant and equipment | \n\n -44 | \n\n -1 | \n\n 0 | \n\n -4 | \n\n \n | \n\n -49 | \n
| \n Intangible assets | \n\n 7 | \n\n -2 | \n\n 0 | \n\n 0 | \n\n -1 | \n\n 3 | \n
| \n Right-of-use assets | \n\n -40 | \n\n 4 | \n\n 0 | \n\n -2 | \n\n \n | \n\n -38 | \n
| \n Lease liabilities | \n\n 43 | \n\n -2 | \n\n 0 | \n\n 2 | \n\n \n | \n\n 42 | \n
| \n Goodwill | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n
| \n Other temporary differences | \n\n -14 | \n\n 3 | \n\n -12 | \n\n 0 | \n\n 5 | \n\n -18 | \n
| \n Tax losses | \n\n 99 | \n\n -2 | \n\n 0 | \n\n 0 | \n\n -3 | \n\n 94 | \n
| \n Tax credits | \n\n 2 | \n\n 4 | \n\n 0 | \n\n 0 | \n\n \n | \n\n 5 | \n
| \n Total (net amount) | \n\n 186 | \n\n 15 | \n\n -24 | \n\n -13 | \n\n 1 | \n\n 165 | \n
| \n 2023 - In \u20ac million | \n\n Opening balance | \n\n Recognized in income statement | \n\n Recognized in other comprehensive income | \n\n Exchange rate effect | \n\n Other | \n\n Closing balance | \n
|---|---|---|---|---|---|---|
| \n Temporary differences | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Employee benefits obligations | \n\n 234 | \n\n -90 | \n\n -47 | \n\n 0 | \n\n 1 | \n\n 98 | \n
| \n Provisions other than employee benefits | \n\n 175 | \n\n 24 | \n\n 0 | \n\n 1 | \n\n -164 | \n\n 35 | \n
| \n Property, plant and equipment | \n\n -234 | \n\n 34 | \n\n 0 | \n\n 11 | \n\n 145 | \n\n -44 | \n
| \n Intangible assets | \n\n -196 | \n\n 28 | \n\n 0 | \n\n -3 | \n\n 178 | \n\n 7 | \n
| \n Right-of-use assets | \n\n -81 | \n\n 4 | \n\n 0 | \n\n 1 | \n\n 35 | \n\n -40 | \n
| \n Lease liabilities | \n\n 82 | \n\n -4 | \n\n 0 | \n\n -1 | \n\n -34 | \n\n 43 | \n
| \n Goodwill | \n\n 58 | \n\n 0 | \n\n 0 | \n\n -1 | \n\n -57 | \n\n 0 | \n
| \n Other temporary differences | \n\n -66 | \n\n 2 | \n\n 49 | \n\n 0 | \n\n -3 | \n\n -14 | \n
| \n Tax losses | \n\n 375 | \n\n -17 | \n\n 0 | \n\n 0 | \n\n -257 | \n\n 99 | \n
| \n Tax credits | \n\n 27 | \n\n -16 | \n\n 0 | \n\n 0 | \n\n -9 | \n\n 2 | \n
| \n Total (net amount) | \n\n 374 | \n\n -34 | \n\n 2 | \n\n 8 | \n\n -166 | \n\n 186 | \n
The significant components of the deferred tax assets and deferred tax liabilities at the end of 2024 and 2023 are as follows:
| \n In \u20ac million | \n\n 2024 | \n||||
|---|---|---|---|---|---|
| \n Deferred tax assets | \n\n Deferred tax liabilities | \n\n Net deferred taxes before write-down | \n\n Write-down of deferred tax assets (unrecognized portion) | \n\n Net deferred taxes | \n|
| \n Employee benefits obligations | \n\n 187 | \n\n -34 | \n\n 153 | \n\n -68 | \n\n 86 | \n
| \n Provisions other than employee benefits | \n\n 175 | \n\n -49 | \n\n 127 | \n\n -87 | \n\n 39 | \n
| \n Property, plant and equipment | \n\n 48 | \n\n -107 | \n\n -59 | \n\n 10 | \n\n -49 | \n
| \n Intangible assets | \n\n 10 | \n\n -16 | \n\n -6 | \n\n 9 | \n\n 3 | \n
| \n Right-of-use assets | \n\n -4 | \n\n -41 | \n\n -45 | \n\n 7 | \n\n -38 | \n
| \n Lease liabilities | \n\n 50 | \n\n 0 | \n\n 49 | \n\n -7 | \n\n 42 | \n
| \n Goodwill | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Other | \n\n 148 | \n\n -159 | \n\n -11 | \n\n -7 | \n\n -18 | \n
| \n Temporary differences | \n\n 615 | \n\n -406 | \n\n 208 | \n\n -143 | \n\n 66 | \n
| \n Operational losses | \n\n 205 | \n\n -2 | \n\n 203 | \n\n -171 | \n\n 32 | \n
| \n Non-operational losses | \n\n 76 | \n\n -2 | \n\n 74 | \n\n -12 | \n\n 62 | \n
| \n Tax losses | \n\n 281 | \n\n -4 | \n\n 277 | \n\n -183 | \n\n 94 | \n
| \n Tax credits carried forward | \n\n 5 | \n\n 0 | \n\n 5 | \n\n 0 | \n\n 5 | \n
| \n Netting deferred taxes | \n\n -274 | \n\n 274 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Deferred taxes | \n\n 627 | \n\n -136 | \n\n 491 | \n\n -326 | \n\n 165 | \n
| \n In \u20ac million | \n\n 2023 | \n||||
|---|---|---|---|---|---|
| \n Deferred tax assets | \n\n Deferred tax liabilities | \n\n Net deferred taxes before write-down | \n\n Write-down of deferred tax assets (unrecognized portion) | \n\n Net deferred taxes | \n|
| \n Employee benefits obligations | \n\n 208 | \n\n -25 | \n\n 182 | \n\n -84 | \n\n 98 | \n
| \n Provisions other than employee benefits | \n\n 165 | \n\n -57 | \n\n 108 | \n\n -73 | \n\n 35 | \n
| \n Property, plant and equipment | \n\n 56 | \n\n -108 | \n\n -52 | \n\n 8 | \n\n -44 | \n
| \n Intangible assets | \n\n 14 | \n\n -16 | \n\n -1 | \n\n 8 | \n\n 7 | \n
| \n Right-of-use assets | \n\n -6 | \n\n -42 | \n\n -47 | \n\n 7 | \n\n -40 | \n
| \n Lease liabilities | \n\n 52 | \n\n -1 | \n\n 51 | \n\n -8 | \n\n 43 | \n
| \n Goodwill | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Other | \n\n 200 | \n\n -211 | \n\n -10 | \n\n -3 | \n\n -14 | \n
| \n Temporary differences | \n\n 689 | \n\n -459 | \n\n 230 | \n\n -145 | \n\n 85 | \n
| \n Operational losses | \n\n 218 | \n\n 0 | \n\n 218 | \n\n -165 | \n\n 53 | \n
| \n Non-operational losses | \n\n 58 | \n\n 0 | \n\n 58 | \n\n -13 | \n\n 46 | \n
| \n Tax losses | \n\n 276 | \n\n 0 | \n\n 276 | \n\n -178 | \n\n 99 | \n
| \n Tax credits carried forward | \n\n 2 | \n\n 0 | \n\n 2 | \n\n 0 | \n\n 2 | \n
| \n Netting deferred taxes | \n\n -328 | \n\n 328 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Deferred taxes | \n\n 639 | \n\n -131 | \n\n 508 | \n\n -322 | \n\n 186 | \n
The evolution of the net deferred taxes between 2024 and 2023 mainly relates to the following items:
hThe total net deferred taxes of \u20ac163 million at year-end 2024 are \u20ac23 million lower than in 2023.
hThe main changes in 2024 are related to the following items:
\u2014Change of deferred tax recognized in the income statement for \u20ac15 million, primarily concerning provisions other than employee benefits (\u20ac8 million), Employee benefits obligations (\u20ac4 million).
\u2014Change of deferred tax recognized as OCI for \u20ac(24) million, related to actuarial changes in post-employment benefit obligations, and financial instruments used for CO2 emission rights contracts mainly in France.
\u2014Exchange rate effect for \u20ac(13) million, mostly related to Brazilian companies.
Deferred tax liabilities on unremitted earnings were recognized in the Other Temporary differences for \u20ac(16) million at year-end 2024 (\u20ac(16) million at year-end 2023). The amounts of deferred tax liabilities not recognized, provided that the Group controls the timing of the reversal of the temporary differences, and it is probable that they will not reverse in the foreseeable future, were \u20ac37 million at year-end 2024 (\u20ac36 million at year end 2023).
Recognized deferred taxes for which utilization depends on future taxable profits in excess of the profit arising from the reversal of existing taxable temporary differences within entities that have suffered a tax loss in either current or preceding years in the related tax jurisdiction, amount to \u20ac156 million mainly in Belgium (\u20ac187 million in 2023). This recognition is supported by favorable expectations of future taxable profits.
In the assessment of the recoverability of deferred tax asset the management has also considered the impact of climate change in making some key estimates within the consolidated financial statements, including the execution of the Solvay Sustainability strategy.
For the majority of the Group\u2019s tax loss carryforwards, no deferred tax assets have been recognized. The unrecognized tax losses are mainly located in countries where they can be carried forward indefinitely.
The tax losses carried forward generating deferred tax assets are given below by expiration date.
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Within 1 year | \n\n 2 | \n\n 13 | \n
| \n Within 2 years | \n\n 2 | \n\n 7 | \n
| \n Within 3 years | \n\n 1 | \n\n 2 | \n
| \n Within 4 years | \n\n 4 | \n\n 0 | \n
| \n Within 5 or more years | \n\n 4 | \n\n 53 | \n
| \n No time limit | \n\n 347 | \n\n 316 | \n
| \n Total of losses carried forward which have generated recognized deferred tax assets | \n\n 360 | \n\n 391 | \n
| \n Tax losses carried forward for which no deferred tax assets were recognized | \n\n 706 | \n\n 685 | \n
| \n Total of tax losses carried forward | \n\n 1,065 | \n\n 1,076 | \n
The tax losses carried forward of \u20ac360 million (\u20ac391 million in 2023) have generated deferred tax assets for \u20ac94 million (\u20ac99 million in 2023).
The tax losses carried forward in 2023, disclosed in 2023 financial statements, included the tax losses (\u20ac835 million) related to some of the Syensqo Group subsidiaries. This number has been restated to reflect the post Partial Demerger status of the group entities.
Solvay operates in multiple jurisdictions with often complex legal and tax regulatory environments. The Group engages constructively with the tax authorities and where needed asks support from local advisors and counsels to obtain the most correct position on tax legislation and principles.
The estimates are based on an approach which provides the best prediction of the resolution of the uncertainties with the tax authorities and is calculated using the most likely single amount or expected value method following IFRIC 23. The estimates are based on facts and circumstances existing at the end of the reporting period. Currently, the major uncertain tax positions (UTP) related to ongoing potential tax litigations are in Germany and India.
The Pillar Two model rules were adopted in Belgium at the end of 2023 and are applicable starting from January 1, 2024. According to these rules, the Group is considered a multinational enterprise to which the Pillar Two rules shall be applied. At the same time, Pillar Two legislation has been enacted or substantially enacted in most jurisdictions in which the Group operates effective for the financial year beginning January 1, 2024.
The Group has performed an assessment of its potential exposure to Pillar Two income taxes based on the 2023 country-by-country reporting and 2024 financial information for the constituent entities in the Group. The Pillar Two effective tax rates in most of the jurisdictions in which the Group operates is above 15%. However, the Group has recognized a Pillar Two current tax expense of \u20ac2 million that arises in Bulgaria and Thailand due to low effective tax rates.
The Group continues to follow Pillar Two legislative developments, as further countries enact the Pillar Two model rules, to evaluate the potential future impact on its consolidated results of operations, financial position and cash flows.
Note: the below table presents the total other comprehensive income items for the aggregate of the shares of Solvay and the non-controlling interests.
| \n In \u20ac million | \n\n 2024 | \n||
|---|---|---|---|
| \n Before-tax amount | \n\n Tax expense (-)/income | \n\n Net of tax amount | \n|
| \n Effective portion of gains and losses on hedging instruments in a cash flow hedge | \n\n -7 | \n\n -11 | \n\n -18 | \n
| \n Recycling to the income statement | \n\n 55 | \n\n \n | \n\n 55 | \n
| \n Gains and losses on hedging instruments in a cash flow hedge (see note F32) | \n\n 48 | \n\n -11 | \n\n 37 | \n
| \n Currency translation differences arising during the year | \n\n 2 | \n\n \n | \n\n 2 | \n
| \n Recycling of currency translations differences relating to foreign operations disposed of in the year | \n\n 0 | \n\n \n | \n\n 0 | \n
| \n Other movement of currency translation differences (NCI) relating to foreign operations | \n\n 1 | \n\n \n | \n\n 1 | \n
| \n Currency translation differences - Subsidiaries and joint operations | \n\n 4 | \n\n \n | \n\n 4 | \n
| \n Currency translation differences arising during the year | \n\n -11 | \n\n \n | \n\n -11 | \n
| \n Recycling of currency translations differences relating to foreign operations disposed of in the year | \n\n 0 | \n\n \n | \n\n 0 | \n
| \n Share of other comprehensive income of associates and joint ventures | \n\n -11 | \n\n \n | \n\n -11 | \n
| \n Recyclable components | \n\n 41 | \n\n -11 | \n\n 30 | \n
| \n Gains and losses on equity instruments measured at fair value through other comprehensive income | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Remeasurements of the net defined benefit liability (see notes F7 & F30) | \n\n 60 | \n\n -13 | \n\n 46 | \n
| \n Share of other comprehensive income of associates and joint ventures | \n\n 0 | \n\n \n | \n\n 0 | \n
| \n Non-recyclable components | \n\n 60 | \n\n -13 | \n\n 46 | \n
| \n Other comprehensive income/(loss) | \n\n 100 | \n\n -24 | \n\n 76 | \n
| \n In \u20ac million | \n\n 2023 | \n||
|---|---|---|---|
| \n Before-tax amount | \n\n Tax expense (-)/income | \n\n Net of tax amount | \n|
| \n Effective portion of gains and losses on hedging instruments in a cash flow hedge | \n\n -208 | \n\n 49 | \n\n -159 | \n
| \n Recycling to the income statement | \n\n -20 | \n\n \n | \n\n -20 | \n
| \n Gains and losses on hedging instruments in a cash flow hedge (see note F32) | \n\n -228 | \n\n 49 | \n\n -179 | \n
| \n Currency translation differences arising during the year | \n\n -423 | \n\n \n | \n\n -423 | \n
| \n Recycling of currency translations differences relating to foreign operations disposed of in the year | \n\n 287 | \n\n \n | \n\n 287 | \n
| \n Other movement of currency translation differences (NCI) relating to foreign operations | \n\n -1 | \n\n \n | \n\n -1 | \n
| \n Currency translation differences - Subsidiaries and joint operations | \n\n -138 | \n\n \n | \n\n -138 | \n
| \n Currency translation differences arising during the year | \n\n 23 | \n\n \n | \n\n 23 | \n
| \n Recycling of currency translations differences relating to foreign operations disposed of in the year | \n\n 179 | \n\n \n | \n\n 179 | \n
| \n Share of other comprehensive income of associates and joint ventures | \n\n 202 | \n\n \n | \n\n 202 | \n
| \n Recyclable components | \n\n -164 | \n\n 49 | \n\n -115 | \n
| \n Gains and losses on equity instruments measured at fair value through other comprehensive income | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Remeasurements of the net defined benefit liability (see notes F7 & F30) | \n\n -30 | \n\n -47 | \n\n -77 | \n
| \n Share of other comprehensive income of associates and joint ventures | \n\n 0 | \n\n \n | \n\n 0 | \n
| \n Non-recyclable components | \n\n -30 | \n\n -47 | \n\n -77 | \n
| \n Other comprehensive income/(loss) | \n\n -194 | \n\n 2 | \n\n -192 | \n
In 2023, the recycling of the currency translation differences was mainly due to the Partial Demerger \u20ac(292) million and due to derecognition of RusVinyl \u20ac(169) million.
Deferred tax assets (DTA) are recognized for unused tax losses to the extent that it is probable that taxable profits will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits.
The Group has \u20ac706 million (2023: \u20ac685 million) of tax losses carried forward for which no deferred tax assets were recognized. These losses relate to subsidiaries that have a history of losses, do not expire, and may not be used to offset taxable income elsewhere in the Group. The subsidiaries do not have any taxable temporary differences that could partly support the recognition of these losses as deferred tax assets. On this basis, the Group has determined that it cannot recognize deferred tax assets on these tax losses carried forward.
The goals referred to in the Climate Change Considerations note may have an impact on the estimate of future probability used in the DTA recoverability assessment \u2013 see the note, above.
Further details are provided in Note F7 Income Taxes.
NOTE F7
Income taxes in the income statement and\u00a0the statement of\u00a0financial\u00a0position
fAccounting policy
Current taxes
The current tax payable is based on taxable profit of the year. Taxable profit differs from profit as reported in the consolidated income statement because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group\u2019s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred taxes
Deferred taxes are recognized for temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and their corresponding tax bases used in the computation of taxable profit.
Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.
Deferred tax liabilities are generally recognized for all taxable temporary differences.
No deferred tax liabilities are recognized following the initial recognition of goodwill. In addition, no deferred tax assets or liabilities are recognized with respect to the initial recognition of an asset or liability in a transaction which is not a business combination and affects neither accounting profit nor taxable profit.
Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, joint operations, joint ventures, and associates, except where the Group can control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax assets other than tax loss carryforwards are analyzed on a case-by-case basis, considering all relevant facts and circumstances. For example, a zero taxable profit, after deducting the amounts paid to retirees under a defined benefit plan and for which a deductible temporary difference existed, can justify the recognition of the underlying deferred tax assets. Recognition of deferred tax assets for tax loss carryforwards requires a positive taxable profit during the year that enables the utilization of tax losses that originated in the past. Because of uncertainties inherent to predicting such positive taxable profit, recognition of deferred tax assets from tax loss carryforwards is based on a case-by-case analysis, which is usually based on five-year profit forecasts, except with respect to any financial company for which ten-year financial profit forecasts are considered highly predictable and are consequently used.
The corporate tax reporting team, which monitors the Group deferred tax positions, is involved in assessing deferred tax assets.
Further details are provided in note F7.C.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled, or the asset is realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the way the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Current tax assets and liabilities are offset when there is a legally enforceable right to set off the recognized amounts and when the Group intends to settle its current tax assets and liabilities on a net basis.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
Current and deferred taxes for the period
Current and deferred taxes for the period are recognized as an expense or income in profit or loss, except when they relate to items that are recognized outside profit or loss (whether in other comprehensive income or directly in equity), in which case the tax is also recognized outside profit or loss, or when they arise from the initial accounting for a business combination. In the case of a business combination, the tax effect is considered in the accounting for the business combination.
Exception to the above, as from January 1, 2019, the Group applies the amendments to IAS 12, that apply to the income tax consequences of dividends recognized on or after the beginning of the earliest comparative period, i.e. January 1, 2018. In 2018, the income tax consequences of the coupons on perpetual hybrid bonds classified as equity were recognized in equity. As a result of the adoption of the amendment, those income tax consequences are now recognized in profit or loss.
The income taxes (net expense) recognized in the consolidated income statement decreased by \u20ac121 million in 2024 compared to 2023.
The income taxes (net expense) recognized in other comprehensive income increased by \u20ac26 million in 2024 compared to 2023, mainly due to the movement in employee benefit provisions (see note F30 Employee benefits) and due to the variation of the CO2 emission rights contracts (see note F32 Financial instruments and financial risk management).
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Current taxes related to current year | \n\n -107 | \n\n -180 | \n
| \n Provisions for tax litigations | \n\n -9 | \n\n 1 | \n
| \n Other current taxes related to prior years (a) | \n\n 14 | \n\n 5 | \n
| \n Current taxes | \n\n -102 | \n\n -174 | \n
| \n Changes in unrecognized deferred tax assets (b) | \n\n -13 | \n\n -91 | \n
| \n Deferred tax income on amortization of PPA step-ups | \n\n 1 | \n\n 2 | \n
| \n Deferred tax impact of changes in the nominal tax rates | \n\n 0 | \n\n 2 | \n
| \n Deferred taxes related to prior years (a) | \n\n 6 | \n\n -5 | \n
| \n Other deferred taxes (d) | \n\n 21 | \n\n 59 | \n
| \n Deferred taxes | \n\n 15 | \n\n -34 | \n
| \n Income taxes recognized in the consolidated income statement | \n\n -87 | \n\n -208 | \n
| \n Income taxes on items recognized in other comprehensive income | \n\n -24 | \n\n 2 | \n
The current taxes (net expense) related to the current year decreased by \u20ac(72) million due to lower taxable profits in countries with high current tax rates (Italy, Belgium, France and Germany) as well as some favorable tax adjustments related to prior years (mainly in Italy for \u20ac12 million). Those effects are slightly offset by higher additions to provisions for tax litigations.
i.In 2024, the change in unrecognized deferred tax assets amounted to \u20ac(13) million resulting mainly from non-recognition of DTA in France and from a revision of the forecasted taxable results in South Africa,
ii.In 2024, the other deferred taxes (\u20ac21 million) mainly relate to provisions other than employee benefits.
The effective income tax expense has been reconciled with the theoretical tax expense obtained by applying to the pre-tax profit of each Group entity the nominal tax rate prevailing in the country in which it operates.
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Profit/(Loss) for the year before taxes | \n\n 320 | \n\n 180 | \n
| \n Earnings from associates and joint ventures | \n\n 38 | \n\n 53 | \n
| \n Profit/(Loss) for the year before taxes excluding earnings from associates and joint ventures | \n\n 282 | \n\n 127 | \n
| \n Reconciliation of the tax income/(expense) | \n\n \n | \n\n \n | \n
| \n Total tax income/(expense) of the Group entities computed on the basis of the respective local nominal rates | \n\n -69 | \n\n -27 | \n
| \n Weighted average nominal rate | \n\n 25% | \n\n 21% | \n
| \n Withholding taxes | \n\n -11 | \n\n -31 | \n
| \n Tax effect of changes in nominal tax rates | \n\n 0 | \n\n 2 | \n
| \n Changes in unrecognized deferred tax assets | \n\n -13 | \n\n -91 | \n
| \n Tax effect of permanent differences | \n\n 23 | \n\n -36 | \n
| \n Gain and losses with no tax expense and income | \n\n -10 | \n\n -20 | \n
| \n Taxes disconnected from profit before taxes, and other tax effects without basis | \n\n -12 | \n\n 0 | \n
| \n Provisions for tax litigations | \n\n -8 | \n\n 1 | \n
| \n Other tax effect of current and deferred tax adjustments related to prior years | \n\n 20 | \n\n 0 | \n
| \n Tax effect on distribution of dividends | \n\n -8 | \n\n -4 | \n
| \n Effective tax income/(expense) | \n\n -87 | \n\n -208 | \n
| \n Effective tax rate | \n\n 27% | \n\n 116% | \n
The weighted average nominal rate increased from 2023 (21%) to 2024 (25%). This is due to mix effects between countries with different tax rates; in particular, the Bulgarian companies, where the nominal rate is low, had a higher contribution to the Group\u2019s profit before tax in 2023, thus lowering the average rate.
The higher effective tax rate in 2023 was mainly linked to the reorganization of the Group which led to significant withholding taxes and derecognition of tax assets, and the impact of the RusVinyl disinvestment.
| \n 2024 - In \u20ac million | \n\n Opening balance | \n\n Recognized in income statement | \n\n Recognized in other comprehensive income | \n\n Exchange rate effect | \n\n Other | \n\n Closing balance | \n
|---|---|---|---|---|---|---|
| \n Temporary differences | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Employee benefits obligations | \n\n 98 | \n\n 4 | \n\n -13 | \n\n -3 | \n\n \n | \n\n 86 | \n
| \n Provisions other than employee benefits | \n\n 35 | \n\n 8 | \n\n 0 | \n\n -5 | \n\n \n | \n\n 39 | \n
| \n Property, plant and equipment | \n\n -44 | \n\n -1 | \n\n 0 | \n\n -4 | \n\n \n | \n\n -49 | \n
| \n Intangible assets | \n\n 7 | \n\n -2 | \n\n 0 | \n\n 0 | \n\n -1 | \n\n 3 | \n
| \n Right-of-use assets | \n\n -40 | \n\n 4 | \n\n 0 | \n\n -2 | \n\n \n | \n\n -38 | \n
| \n Lease liabilities | \n\n 43 | \n\n -2 | \n\n 0 | \n\n 2 | \n\n \n | \n\n 42 | \n
| \n Goodwill | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n
| \n Other temporary differences | \n\n -14 | \n\n 3 | \n\n -12 | \n\n 0 | \n\n 5 | \n\n -18 | \n
| \n Tax losses | \n\n 99 | \n\n -2 | \n\n 0 | \n\n 0 | \n\n -3 | \n\n 94 | \n
| \n Tax credits | \n\n 2 | \n\n 4 | \n\n 0 | \n\n 0 | \n\n \n | \n\n 5 | \n
| \n Total (net amount) | \n\n 186 | \n\n 15 | \n\n -24 | \n\n -13 | \n\n 1 | \n\n 165 | \n
| \n 2023 - In \u20ac million | \n\n Opening balance | \n\n Recognized in income statement | \n\n Recognized in other comprehensive income | \n\n Exchange rate effect | \n\n Other | \n\n Closing balance | \n
|---|---|---|---|---|---|---|
| \n Temporary differences | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Employee benefits obligations | \n\n 234 | \n\n -90 | \n\n -47 | \n\n 0 | \n\n 1 | \n\n 98 | \n
| \n Provisions other than employee benefits | \n\n 175 | \n\n 24 | \n\n 0 | \n\n 1 | \n\n -164 | \n\n 35 | \n
| \n Property, plant and equipment | \n\n -234 | \n\n 34 | \n\n 0 | \n\n 11 | \n\n 145 | \n\n -44 | \n
| \n Intangible assets | \n\n -196 | \n\n 28 | \n\n 0 | \n\n -3 | \n\n 178 | \n\n 7 | \n
| \n Right-of-use assets | \n\n -81 | \n\n 4 | \n\n 0 | \n\n 1 | \n\n 35 | \n\n -40 | \n
| \n Lease liabilities | \n\n 82 | \n\n -4 | \n\n 0 | \n\n -1 | \n\n -34 | \n\n 43 | \n
| \n Goodwill | \n\n 58 | \n\n 0 | \n\n 0 | \n\n -1 | \n\n -57 | \n\n 0 | \n
| \n Other temporary differences | \n\n -66 | \n\n 2 | \n\n 49 | \n\n 0 | \n\n -3 | \n\n -14 | \n
| \n Tax losses | \n\n 375 | \n\n -17 | \n\n 0 | \n\n 0 | \n\n -257 | \n\n 99 | \n
| \n Tax credits | \n\n 27 | \n\n -16 | \n\n 0 | \n\n 0 | \n\n -9 | \n\n 2 | \n
| \n Total (net amount) | \n\n 374 | \n\n -34 | \n\n 2 | \n\n 8 | \n\n -166 | \n\n 186 | \n
The significant components of the deferred tax assets and deferred tax liabilities at the end of 2024 and 2023 are as follows:
| \n In \u20ac million | \n\n 2024 | \n||||
|---|---|---|---|---|---|
| \n Deferred tax assets | \n\n Deferred tax liabilities | \n\n Net deferred taxes before write-down | \n\n Write-down of deferred tax assets (unrecognized portion) | \n\n Net deferred taxes | \n|
| \n Employee benefits obligations | \n\n 187 | \n\n -34 | \n\n 153 | \n\n -68 | \n\n 86 | \n
| \n Provisions other than employee benefits | \n\n 175 | \n\n -49 | \n\n 127 | \n\n -87 | \n\n 39 | \n
| \n Property, plant and equipment | \n\n 48 | \n\n -107 | \n\n -59 | \n\n 10 | \n\n -49 | \n
| \n Intangible assets | \n\n 10 | \n\n -16 | \n\n -6 | \n\n 9 | \n\n 3 | \n
| \n Right-of-use assets | \n\n -4 | \n\n -41 | \n\n -45 | \n\n 7 | \n\n -38 | \n
| \n Lease liabilities | \n\n 50 | \n\n 0 | \n\n 49 | \n\n -7 | \n\n 42 | \n
| \n Goodwill | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Other | \n\n 148 | \n\n -159 | \n\n -11 | \n\n -7 | \n\n -18 | \n
| \n Temporary differences | \n\n 615 | \n\n -406 | \n\n 208 | \n\n -143 | \n\n 66 | \n
| \n Operational losses | \n\n 205 | \n\n -2 | \n\n 203 | \n\n -171 | \n\n 32 | \n
| \n Non-operational losses | \n\n 76 | \n\n -2 | \n\n 74 | \n\n -12 | \n\n 62 | \n
| \n Tax losses | \n\n 281 | \n\n -4 | \n\n 277 | \n\n -183 | \n\n 94 | \n
| \n Tax credits carried forward | \n\n 5 | \n\n 0 | \n\n 5 | \n\n 0 | \n\n 5 | \n
| \n Netting deferred taxes | \n\n -274 | \n\n 274 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Deferred taxes | \n\n 627 | \n\n -136 | \n\n 491 | \n\n -326 | \n\n 165 | \n
| \n In \u20ac million | \n\n 2023 | \n||||
|---|---|---|---|---|---|
| \n Deferred tax assets | \n\n Deferred tax liabilities | \n\n Net deferred taxes before write-down | \n\n Write-down of deferred tax assets (unrecognized portion) | \n\n Net deferred taxes | \n|
| \n Employee benefits obligations | \n\n 208 | \n\n -25 | \n\n 182 | \n\n -84 | \n\n 98 | \n
| \n Provisions other than employee benefits | \n\n 165 | \n\n -57 | \n\n 108 | \n\n -73 | \n\n 35 | \n
| \n Property, plant and equipment | \n\n 56 | \n\n -108 | \n\n -52 | \n\n 8 | \n\n -44 | \n
| \n Intangible assets | \n\n 14 | \n\n -16 | \n\n -1 | \n\n 8 | \n\n 7 | \n
| \n Right-of-use assets | \n\n -6 | \n\n -42 | \n\n -47 | \n\n 7 | \n\n -40 | \n
| \n Lease liabilities | \n\n 52 | \n\n -1 | \n\n 51 | \n\n -8 | \n\n 43 | \n
| \n Goodwill | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Other | \n\n 200 | \n\n -211 | \n\n -10 | \n\n -3 | \n\n -14 | \n
| \n Temporary differences | \n\n 689 | \n\n -459 | \n\n 230 | \n\n -145 | \n\n 85 | \n
| \n Operational losses | \n\n 218 | \n\n 0 | \n\n 218 | \n\n -165 | \n\n 53 | \n
| \n Non-operational losses | \n\n 58 | \n\n 0 | \n\n 58 | \n\n -13 | \n\n 46 | \n
| \n Tax losses | \n\n 276 | \n\n 0 | \n\n 276 | \n\n -178 | \n\n 99 | \n
| \n Tax credits carried forward | \n\n 2 | \n\n 0 | \n\n 2 | \n\n 0 | \n\n 2 | \n
| \n Netting deferred taxes | \n\n -328 | \n\n 328 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Deferred taxes | \n\n 639 | \n\n -131 | \n\n 508 | \n\n -322 | \n\n 186 | \n
The evolution of the net deferred taxes between 2024 and 2023 mainly relates to the following items:
hThe total net deferred taxes of \u20ac163 million at year-end 2024 are \u20ac23 million lower than in 2023.
hThe main changes in 2024 are related to the following items:
\u2014Change of deferred tax recognized in the income statement for \u20ac15 million, primarily concerning provisions other than employee benefits (\u20ac8 million), Employee benefits obligations (\u20ac4 million).
\u2014Change of deferred tax recognized as OCI for \u20ac(24) million, related to actuarial changes in post-employment benefit obligations, and financial instruments used for CO2 emission rights contracts mainly in France.
\u2014Exchange rate effect for \u20ac(13) million, mostly related to Brazilian companies.
Deferred tax liabilities on unremitted earnings were recognized in the Other Temporary differences for \u20ac(16) million at year-end 2024 (\u20ac(16) million at year-end 2023). The amounts of deferred tax liabilities not recognized, provided that the Group controls the timing of the reversal of the temporary differences, and it is probable that they will not reverse in the foreseeable future, were \u20ac37 million at year-end 2024 (\u20ac36 million at year end 2023).
Recognized deferred taxes for which utilization depends on future taxable profits in excess of the profit arising from the reversal of existing taxable temporary differences within entities that have suffered a tax loss in either current or preceding years in the related tax jurisdiction, amount to \u20ac156 million mainly in Belgium (\u20ac187 million in 2023). This recognition is supported by favorable expectations of future taxable profits.
In the assessment of the recoverability of deferred tax asset the management has also considered the impact of climate change in making some key estimates within the consolidated financial statements, including the execution of the Solvay Sustainability strategy.
For the majority of the Group\u2019s tax loss carryforwards, no deferred tax assets have been recognized. The unrecognized tax losses are mainly located in countries where they can be carried forward indefinitely.
The tax losses carried forward generating deferred tax assets are given below by expiration date.
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Within 1 year | \n\n 2 | \n\n 13 | \n
| \n Within 2 years | \n\n 2 | \n\n 7 | \n
| \n Within 3 years | \n\n 1 | \n\n 2 | \n
| \n Within 4 years | \n\n 4 | \n\n 0 | \n
| \n Within 5 or more years | \n\n 4 | \n\n 53 | \n
| \n No time limit | \n\n 347 | \n\n 316 | \n
| \n Total of losses carried forward which have generated recognized deferred tax assets | \n\n 360 | \n\n 391 | \n
| \n Tax losses carried forward for which no deferred tax assets were recognized | \n\n 706 | \n\n 685 | \n
| \n Total of tax losses carried forward | \n\n 1,065 | \n\n 1,076 | \n
The tax losses carried forward of \u20ac360 million (\u20ac391 million in 2023) have generated deferred tax assets for \u20ac94 million (\u20ac99 million in 2023).
The tax losses carried forward in 2023, disclosed in 2023 financial statements, included the tax losses (\u20ac835 million) related to some of the Syensqo Group subsidiaries. This number has been restated to reflect the post Partial Demerger status of the group entities.
Solvay operates in multiple jurisdictions with often complex legal and tax regulatory environments. The Group engages constructively with the tax authorities and where needed asks support from local advisors and counsels to obtain the most correct position on tax legislation and principles.
The estimates are based on an approach which provides the best prediction of the resolution of the uncertainties with the tax authorities and is calculated using the most likely single amount or expected value method following IFRIC 23. The estimates are based on facts and circumstances existing at the end of the reporting period. Currently, the major uncertain tax positions (UTP) related to ongoing potential tax litigations are in Germany and India.
The Pillar Two model rules were adopted in Belgium at the end of 2023 and are applicable starting from January 1, 2024. According to these rules, the Group is considered a multinational enterprise to which the Pillar Two rules shall be applied. At the same time, Pillar Two legislation has been enacted or substantially enacted in most jurisdictions in which the Group operates effective for the financial year beginning January 1, 2024.
The Group has performed an assessment of its potential exposure to Pillar Two income taxes based on the 2023 country-by-country reporting and 2024 financial information for the constituent entities in the Group. The Pillar Two effective tax rates in most of the jurisdictions in which the Group operates is above 15%. However, the Group has recognized a Pillar Two current tax expense of \u20ac2 million that arises in Bulgaria and Thailand due to low effective tax rates.
The Group continues to follow Pillar Two legislative developments, as further countries enact the Pillar Two model rules, to evaluate the potential future impact on its consolidated results of operations, financial position and cash flows.
Note: the below table presents the total other comprehensive income items for the aggregate of the shares of Solvay and the non-controlling interests.
| \n In \u20ac million | \n\n 2024 | \n||
|---|---|---|---|
| \n Before-tax amount | \n\n Tax expense (-)/income | \n\n Net of tax amount | \n|
| \n Effective portion of gains and losses on hedging instruments in a cash flow hedge | \n\n -7 | \n\n -11 | \n\n -18 | \n
| \n Recycling to the income statement | \n\n 55 | \n\n \n | \n\n 55 | \n
| \n Gains and losses on hedging instruments in a cash flow hedge (see note F32) | \n\n 48 | \n\n -11 | \n\n 37 | \n
| \n Currency translation differences arising during the year | \n\n 2 | \n\n \n | \n\n 2 | \n
| \n Recycling of currency translations differences relating to foreign operations disposed of in the year | \n\n 0 | \n\n \n | \n\n 0 | \n
| \n Other movement of currency translation differences (NCI) relating to foreign operations | \n\n 1 | \n\n \n | \n\n 1 | \n
| \n Currency translation differences - Subsidiaries and joint operations | \n\n 4 | \n\n \n | \n\n 4 | \n
| \n Currency translation differences arising during the year | \n\n -11 | \n\n \n | \n\n -11 | \n
| \n Recycling of currency translations differences relating to foreign operations disposed of in the year | \n\n 0 | \n\n \n | \n\n 0 | \n
| \n Share of other comprehensive income of associates and joint ventures | \n\n -11 | \n\n \n | \n\n -11 | \n
| \n Recyclable components | \n\n 41 | \n\n -11 | \n\n 30 | \n
| \n Gains and losses on equity instruments measured at fair value through other comprehensive income | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Remeasurements of the net defined benefit liability (see notes F7 & F30) | \n\n 60 | \n\n -13 | \n\n 46 | \n
| \n Share of other comprehensive income of associates and joint ventures | \n\n 0 | \n\n \n | \n\n 0 | \n
| \n Non-recyclable components | \n\n 60 | \n\n -13 | \n\n 46 | \n
| \n Other comprehensive income/(loss) | \n\n 100 | \n\n -24 | \n\n 76 | \n
| \n In \u20ac million | \n\n 2023 | \n||
|---|---|---|---|
| \n Before-tax amount | \n\n Tax expense (-)/income | \n\n Net of tax amount | \n|
| \n Effective portion of gains and losses on hedging instruments in a cash flow hedge | \n\n -208 | \n\n 49 | \n\n -159 | \n
| \n Recycling to the income statement | \n\n -20 | \n\n \n | \n\n -20 | \n
| \n Gains and losses on hedging instruments in a cash flow hedge (see note F32) | \n\n -228 | \n\n 49 | \n\n -179 | \n
| \n Currency translation differences arising during the year | \n\n -423 | \n\n \n | \n\n -423 | \n
| \n Recycling of currency translations differences relating to foreign operations disposed of in the year | \n\n 287 | \n\n \n | \n\n 287 | \n
| \n Other movement of currency translation differences (NCI) relating to foreign operations | \n\n -1 | \n\n \n | \n\n -1 | \n
| \n Currency translation differences - Subsidiaries and joint operations | \n\n -138 | \n\n \n | \n\n -138 | \n
| \n Currency translation differences arising during the year | \n\n 23 | \n\n \n | \n\n 23 | \n
| \n Recycling of currency translations differences relating to foreign operations disposed of in the year | \n\n 179 | \n\n \n | \n\n 179 | \n
| \n Share of other comprehensive income of associates and joint ventures | \n\n 202 | \n\n \n | \n\n 202 | \n
| \n Recyclable components | \n\n -164 | \n\n 49 | \n\n -115 | \n
| \n Gains and losses on equity instruments measured at fair value through other comprehensive income | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Remeasurements of the net defined benefit liability (see notes F7 & F30) | \n\n -30 | \n\n -47 | \n\n -77 | \n
| \n Share of other comprehensive income of associates and joint ventures | \n\n 0 | \n\n \n | \n\n 0 | \n
| \n Non-recyclable components | \n\n -30 | \n\n -47 | \n\n -77 | \n
| \n Other comprehensive income/(loss) | \n\n -194 | \n\n 2 | \n\n -192 | \n
In 2023, the recycling of the currency translation differences was mainly due to the Partial Demerger \u20ac(292) million and due to derecognition of RusVinyl \u20ac(169) million.
NOTE F13
Income taxes in the statement of\u00a0cash flows
Income tax expense in 2024 amounts to \u20ac87 million (\u20ac450 million in 2023).
Income tax paid in 2024 amounts to \u20ac109 million (\u20ac434 million in 2023). The income tax paid has decreased compared to previous years due to the partial demerger in December 2023.
The major components of Income taxes are discussed in note F7 income taxes in income statement and statement of financial position.
Deferred tax assets (DTA) are recognized for unused tax losses to the extent that it is probable that taxable profits will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits.
The Group has \u20ac706 million (2023: \u20ac685 million) of tax losses carried forward for which no deferred tax assets were recognized. These losses relate to subsidiaries that have a history of losses, do not expire, and may not be used to offset taxable income elsewhere in the Group. The subsidiaries do not have any taxable temporary differences that could partly support the recognition of these losses as deferred tax assets. On this basis, the Group has determined that it cannot recognize deferred tax assets on these tax losses carried forward.
The goals referred to in the Climate Change Considerations note may have an impact on the estimate of future probability used in the DTA recoverability assessment \u2013 see the note, above.
Further details are provided in Note F7 Income Taxes.
NOTE F7
Income taxes in the income statement and\u00a0the statement of\u00a0financial\u00a0position
fAccounting policy
Current taxes
The current tax payable is based on taxable profit of the year. Taxable profit differs from profit as reported in the consolidated income statement because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group\u2019s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred taxes
Deferred taxes are recognized for temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and their corresponding tax bases used in the computation of taxable profit.
Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.
Deferred tax liabilities are generally recognized for all taxable temporary differences.
No deferred tax liabilities are recognized following the initial recognition of goodwill. In addition, no deferred tax assets or liabilities are recognized with respect to the initial recognition of an asset or liability in a transaction which is not a business combination and affects neither accounting profit nor taxable profit.
Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, joint operations, joint ventures, and associates, except where the Group can control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax assets other than tax loss carryforwards are analyzed on a case-by-case basis, considering all relevant facts and circumstances. For example, a zero taxable profit, after deducting the amounts paid to retirees under a defined benefit plan and for which a deductible temporary difference existed, can justify the recognition of the underlying deferred tax assets. Recognition of deferred tax assets for tax loss carryforwards requires a positive taxable profit during the year that enables the utilization of tax losses that originated in the past. Because of uncertainties inherent to predicting such positive taxable profit, recognition of deferred tax assets from tax loss carryforwards is based on a case-by-case analysis, which is usually based on five-year profit forecasts, except with respect to any financial company for which ten-year financial profit forecasts are considered highly predictable and are consequently used.
The corporate tax reporting team, which monitors the Group deferred tax positions, is involved in assessing deferred tax assets.
Further details are provided in note F7.C.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled, or the asset is realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the way the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Current tax assets and liabilities are offset when there is a legally enforceable right to set off the recognized amounts and when the Group intends to settle its current tax assets and liabilities on a net basis.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
Current and deferred taxes for the period
Current and deferred taxes for the period are recognized as an expense or income in profit or loss, except when they relate to items that are recognized outside profit or loss (whether in other comprehensive income or directly in equity), in which case the tax is also recognized outside profit or loss, or when they arise from the initial accounting for a business combination. In the case of a business combination, the tax effect is considered in the accounting for the business combination.
Exception to the above, as from January 1, 2019, the Group applies the amendments to IAS 12, that apply to the income tax consequences of dividends recognized on or after the beginning of the earliest comparative period, i.e. January 1, 2018. In 2018, the income tax consequences of the coupons on perpetual hybrid bonds classified as equity were recognized in equity. As a result of the adoption of the amendment, those income tax consequences are now recognized in profit or loss.
Deferred tax assets (DTA) are recognized for unused tax losses to the extent that it is probable that taxable profits will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits.
The Group has \u20ac706 million (2023: \u20ac685 million) of tax losses carried forward for which no deferred tax assets were recognized. These losses relate to subsidiaries that have a history of losses, do not expire, and may not be used to offset taxable income elsewhere in the Group. The subsidiaries do not have any taxable temporary differences that could partly support the recognition of these losses as deferred tax assets. On this basis, the Group has determined that it cannot recognize deferred tax assets on these tax losses carried forward.
The goals referred to in the Climate Change Considerations note may have an impact on the estimate of future probability used in the DTA recoverability assessment \u2013 see the note, above.
Further details are provided in Note F7 Income Taxes.
NOTE F7
Income taxes in the income statement and\u00a0the statement of\u00a0financial\u00a0position
fAccounting policy
Current taxes
The current tax payable is based on taxable profit of the year. Taxable profit differs from profit as reported in the consolidated income statement because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group\u2019s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred taxes
Deferred taxes are recognized for temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and their corresponding tax bases used in the computation of taxable profit.
Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.
Deferred tax liabilities are generally recognized for all taxable temporary differences.
No deferred tax liabilities are recognized following the initial recognition of goodwill. In addition, no deferred tax assets or liabilities are recognized with respect to the initial recognition of an asset or liability in a transaction which is not a business combination and affects neither accounting profit nor taxable profit.
Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, joint operations, joint ventures, and associates, except where the Group can control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax assets other than tax loss carryforwards are analyzed on a case-by-case basis, considering all relevant facts and circumstances. For example, a zero taxable profit, after deducting the amounts paid to retirees under a defined benefit plan and for which a deductible temporary difference existed, can justify the recognition of the underlying deferred tax assets. Recognition of deferred tax assets for tax loss carryforwards requires a positive taxable profit during the year that enables the utilization of tax losses that originated in the past. Because of uncertainties inherent to predicting such positive taxable profit, recognition of deferred tax assets from tax loss carryforwards is based on a case-by-case analysis, which is usually based on five-year profit forecasts, except with respect to any financial company for which ten-year financial profit forecasts are considered highly predictable and are consequently used.
The corporate tax reporting team, which monitors the Group deferred tax positions, is involved in assessing deferred tax assets.
Further details are provided in note F7.C.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled, or the asset is realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the way the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Current tax assets and liabilities are offset when there is a legally enforceable right to set off the recognized amounts and when the Group intends to settle its current tax assets and liabilities on a net basis.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
Current and deferred taxes for the period
Current and deferred taxes for the period are recognized as an expense or income in profit or loss, except when they relate to items that are recognized outside profit or loss (whether in other comprehensive income or directly in equity), in which case the tax is also recognized outside profit or loss, or when they arise from the initial accounting for a business combination. In the case of a business combination, the tax effect is considered in the accounting for the business combination.
Exception to the above, as from January 1, 2019, the Group applies the amendments to IAS 12, that apply to the income tax consequences of dividends recognized on or after the beginning of the earliest comparative period, i.e. January 1, 2018. In 2018, the income tax consequences of the coupons on perpetual hybrid bonds classified as equity were recognized in equity. As a result of the adoption of the amendment, those income tax consequences are now recognized in profit or loss.
Environmental provisions are managed and coordinated jointly by the Environmental Rehabilitation department and the Finance department. In case of environmental impacts stemming from historical production activities, generally, no provision is recognized for remediation works beyond the 20 years due to the inherent high level of uncertainty as to the timing and amount.
The forecasts of expenses are discounted to their present value. The discount rates fixed by geographical area correspond to the average risk-free rate on 10-year government bonds or the inflation rate if higher. These rates are set annually by the Finance department and can be revised based on the evolution of economic parameters of the country involved. To reflect the passage of time, the provisions are increased each year at the discount rates described above.
Further details are provided in note F31 Provisions.
Any significant litigations (post M&A and other, including threat of litigation) are reviewed by Solvay\u2019s in-house lawyers with the support, when appropriate, of external counsels at least every quarter together with the Finance and Insurance Departments. This review includes an assessment of the need to recognize provisions and/or disclose contingent liabilities.
Further details are provided in note F31 Provisions and F36 Contingent liabilities and financial guarantees.
NOTE F15
Additions, reversals and use of provisions
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Additions and reversal of employee benefits and other provisions | \n\n 250 | \n\n 644 | \n
| \n Of which: | \n\n \n | \n\n \n | \n
| \n Employee benefits | \n\n 15 | \n\n 44 | \n
| \n Restructuring | \n\n 89 | \n\n 104 | \n
| \n Environment | \n\n 86 | \n\n 346 | \n
| \n Payments related to employee benefits and use of provisions | \n\n -225 | \n\n -304 | \n
| \n Of which: | \n\n \n | \n\n \n | \n
| \n Employee benefits | \n\n -38 | \n\n -85 | \n
| \n Restructuring | \n\n -73 | \n\n -92 | \n
| \n Environment | \n\n -66 | \n\n -72 | \n
| \n Use of provisions for additional voluntary contributions (pension plans) | \n\n -30 | \n\n -116 | \n
See note F30 Employee Benefits and F31 Provisions for more information.
NOTE F31
Provisions
fAccounting policy
General
Provisions are recognized when (a) the Group has a present obligation (legal or constructive) as a result of a past event, (b) it is probable that the Group will be required to settle the obligation, and (c) a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount is the present value of expenditures required to settle the obligation. Impacts of changes in discount rates are generally recognized in the financial result.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received when the Group settles the obligation.
Restructurings
A restructuring provision is recognized when the Group has developed a detailed formal plan for the restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring, which are those amounts that are both necessarily entailed by the restructuring and not associated with the ongoing activities of the entity.
Environmental remediation costs
Environmental liabilities are mainly related to non-ongoing activities (shut-down sites, discontinued activities or divested activities where Solvay maintains certain commitments) and, to a lower extent, to ongoing activities (see comments below).
An environmental provision is recognized, in accordance with IAS 37, when there is a current legal or constructive obligation resulting from past events which will result in a probable outflow of resources (expenses / cash outs) to settle it and for which a reliable estimate of such outflows and timing can be made.
The environmental expenses encompass, but are not limited to, the following key matters:
\u2022Sampling and analytical costs for soil and ground water monitoring
\u2022Cost related to dismantling when required to meet a remediation or permit obligation
\u2022Asbestos removal when obligated by regulation
\u2022Environmental investigations and studies (Risk Assessments, Phase I and II soil and groundwater)
The closing amount of the environmental provisions is based on the net present value of the future cash flows needed, for current and future years, to settle remediation obligations. Forecast expenditures are based on external consultant estimates, where appropriate and possible. Future expenditures are forecast and revised biannually and validated quarterly by Solvay finance and suitably qualified industrial experts led by the Group Environmental Rehabilitation Director and benefit from inputs of legal department staff for the evolution of Environmental Regulations.
In the absence of probable obligations, a contingent liability may be disclosed to represent the future possible liability. In some cases, contingent liabilities cannot be quantified. See Note F36 Contingent liabilities and financial guarantees.
| \n In \u20ac million | \n\n Restructuring | \n\n Environment | \n\n Litigation | \n\n Other | \n\n Total | \n
|---|---|---|---|---|---|
| \n December 31, 2023 | \n\n 83 | \n\n 506 | \n\n 61 | \n\n 202 | \n\n 852 | \n
| \n Additions | \n\n 123 | \n\n 97 | \n\n 14 | \n\n 80 | \n\n 314 | \n
| \n Reversals of unused amounts | \n\n -34 | \n\n -11 | \n\n -8 | \n\n -26 | \n\n -79 | \n
| \n Uses | \n\n -73 | \n\n -66 | \n\n -8 | \n\n -52 | \n\n -199 | \n
| \n Increase/decrease through discounting | \n\n 0 | \n\n -6 | \n\n 1 | \n\n 0 | \n\n -6 | \n
| \n Remeasurements | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Currency translation differences | \n\n 0 | \n\n -9 | \n\n -2 | \n\n 1 | \n\n -10 | \n
| \n Acquisitions and changes in consolidation scope | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Disposals | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Transfer to liabilities associated with assets held for sale | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Other | \n\n 0 | \n\n 0 | \n\n -3 | \n\n 1 | \n\n -2 | \n
| \n December 31, 2024 | \n\n 99 | \n\n 511 | \n\n 55 | \n\n 205 | \n\n 871 | \n
| \n Of which current provisions | \n\n 67 | \n\n 70 | \n\n 29 | \n\n 149 | \n\n 315 | \n
The provisions increased by \u20ac19 million in 2024, of which an increase of \u20ac16 million for Restructuring and \u20ac5 million for Environment partially offset by \u20ac(2) million for litigation and other provisions.
See below for more details on the recognition and additions to the provisions.
The movements in Other provisions mainly relate to post-closing adjustments resulting from M&A warranties including indemnities for environmental remediation on sites subject to disinvestment.
Management expects provisions (other than employee benefits) to be used (cash outlays) as follows:
| \n In \u20ac million | \n\n up to | \n\n between | \n\n beyond | \n\n Total | \n
|---|---|---|---|---|
| \n Total provisions for environment | \n\n 243 | \n\n 71 | \n\n 197 | \n\n 511 | \n
| \n Total provisions for litigation and other | \n\n 235 | \n\n 25 | \n\n 0 | \n\n 260 | \n
| \n Total provisions for restructuring | \n\n 99 | \n\n \n | \n\n \n | \n\n 99 | \n
| \n December 31, 2024 | \n\n 578 | \n\n 96 | \n\n 197 | \n\n 871 | \n
In 2024, these provisions amount to \u20ac99 million, compared with \u20ac83 million at the end of 2023.
The provisions at the end of 2024 mainly relate to the restructuring charges for the simplification of all support functions in the frame of the Group\u2019s simplification and transformation program, including the strategic transformation measures, site closures, and the exit from the Transition Services Agreement (TSA). According to the TSA, Solvay will be compensated by Syensqo for restructuring costs currently estimated at \u20ac22 million (\u20ac19 million in Other Receivables, and \u20ac3 million in Loans and Other Assets).
These provisions amount to \u20ac511 million at the end of 2024, compared with \u20ac506 million at the end of 2023, and pertain to:
hmines and drilling operations to the extent that legislation and/or operating permits in relation to quarries, mines and drilling operations contain requirements to remedy or to pay compensation to third parties. Those provisions amount to \u20ac148 million at the end of 2024 and most of these, based on local expert advice, can be expected to be used within the 20-year horizon.
hlime dikes (settling ponds related mainly to soda ash plants), landfills at sites and third-party landfills sites (linked to several industrial activities). These provisions have a horizon of 1 to 20 years.
hvarious types of pollution (organic, inorganic) coming from miscellaneous historical chemical productions; these provisions mainly cover discontinued activities or closed plants. Most of these provisions have a horizon of 1 to 20 years.
The variation of environmental provisions was also impacted by the higher discount rate reducing the present value of the overall liability by \u20ac (25) million. This effect, combined with the unwinding of the opening liabilities for \u20ac19 million resulted in a net decrease of \u20ac(6) million related to discounting. The estimated amounts are discounted based on the probable date of settlement and are periodically adjusted to reflect the passage of time.
The breakdown of the environmental provisions and related uses for the main countries/regions is as follows:
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|---|
| \n Provisions | \n\n In % | \n\n Provisions ongoing activities | \n\n Use of provisions | \n\n Provisions | \n\n In % | \n\n Provisions ongoing activities | \n\n Use of provisions | \n|
| \n France | \n\n 154 | \n\n 30% | \n\n 0 | \n\n -26 | \n\n 147 | \n\n 29% | \n\n 0 | \n\n -21 | \n
| \n Germany | \n\n 135 | \n\n 26% | \n\n 46 | \n\n -12 | \n\n 115 | \n\n 23% | \n\n 30 | \n\n -4 | \n
| \n Rest of Europe | \n\n 167 | \n\n 33% | \n\n 6 | \n\n -18 | \n\n 170 | \n\n 34% | \n\n 6 | \n\n -17 | \n
| \n North America | \n\n 4 | \n\n 1% | \n\n 0 | \n\n -1 | \n\n 5 | \n\n 1% | \n\n 0 | \n\n -23 | \n
| \n Rest of the world | \n\n 51 | \n\n 10% | \n\n 1 | \n\n -9 | \n\n 69 | \n\n 13% | \n\n 1 | \n\n -10 | \n
| \n Total | \n\n 511 | \n\n 100% | \n\n 53 | \n\n -66 | \n\n 506 | \n\n 100% | \n\n 37 | \n\n -75 | \n
The disclosure of comparatives related to environmental provisions was restated to follow the classification of some provisions as resulting from ongoing activities.
Provisions for litigation refer to indirect tax and legal exposures. They amount to \u20ac55 million in 2024 (\u20ac61 million in 2023). The balance at the end of 2024 relates to indirect tax risks (\u20ac13 million) and legal claims (\u20ac42 million).
Other provisions amount to \u20ac205 million in 2024 (\u20ac202 million in 2023) including \u20ac72 million linked to Dombasle Energie (see the part related to provisions in Main Events). They relate to various risks, of which the main risks concern (i) the shutdown or disposal of activities and (ii) risk related to the execution of contracts or termination. Other provisions also include a provision for litigation post M&A deal for which an indemnification asset for \u20ac24 million (In Loans and other assets) has been recognized as foreseen in the Separation Agreement.
Environmental provisions are managed and coordinated jointly by the Environmental Rehabilitation department and the Finance department. In case of environmental impacts stemming from historical production activities, generally, no provision is recognized for remediation works beyond the 20 years due to the inherent high level of uncertainty as to the timing and amount.
The forecasts of expenses are discounted to their present value. The discount rates fixed by geographical area correspond to the average risk-free rate on 10-year government bonds or the inflation rate if higher. These rates are set annually by the Finance department and can be revised based on the evolution of economic parameters of the country involved. To reflect the passage of time, the provisions are increased each year at the discount rates described above.
Further details are provided in note F31 Provisions.
Any significant litigations (post M&A and other, including threat of litigation) are reviewed by Solvay\u2019s in-house lawyers with the support, when appropriate, of external counsels at least every quarter together with the Finance and Insurance Departments. This review includes an assessment of the need to recognize provisions and/or disclose contingent liabilities.
Further details are provided in note F31 Provisions and F36 Contingent liabilities and financial guarantees.
NOTE F31
Provisions
fAccounting policy
General
Provisions are recognized when (a) the Group has a present obligation (legal or constructive) as a result of a past event, (b) it is probable that the Group will be required to settle the obligation, and (c) a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount is the present value of expenditures required to settle the obligation. Impacts of changes in discount rates are generally recognized in the financial result.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received when the Group settles the obligation.
Restructurings
A restructuring provision is recognized when the Group has developed a detailed formal plan for the restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring, which are those amounts that are both necessarily entailed by the restructuring and not associated with the ongoing activities of the entity.
Environmental remediation costs
Environmental liabilities are mainly related to non-ongoing activities (shut-down sites, discontinued activities or divested activities where Solvay maintains certain commitments) and, to a lower extent, to ongoing activities (see comments below).
An environmental provision is recognized, in accordance with IAS 37, when there is a current legal or constructive obligation resulting from past events which will result in a probable outflow of resources (expenses / cash outs) to settle it and for which a reliable estimate of such outflows and timing can be made.
The environmental expenses encompass, but are not limited to, the following key matters:
\u2022Sampling and analytical costs for soil and ground water monitoring
\u2022Cost related to dismantling when required to meet a remediation or permit obligation
\u2022Asbestos removal when obligated by regulation
\u2022Environmental investigations and studies (Risk Assessments, Phase I and II soil and groundwater)
The closing amount of the environmental provisions is based on the net present value of the future cash flows needed, for current and future years, to settle remediation obligations. Forecast expenditures are based on external consultant estimates, where appropriate and possible. Future expenditures are forecast and revised biannually and validated quarterly by Solvay finance and suitably qualified industrial experts led by the Group Environmental Rehabilitation Director and benefit from inputs of legal department staff for the evolution of Environmental Regulations.
In the absence of probable obligations, a contingent liability may be disclosed to represent the future possible liability. In some cases, contingent liabilities cannot be quantified. See Note F36 Contingent liabilities and financial guarantees.
The Group enters into various contracts to obtain goods and services. Determining whether those contracts include a lease requires judgment. Elements that are considered include assessing whether or not there is an identified asset. To make the determination the Group considers whether or not it has the right to obtain substantially all of the economic benefit of the asset(s) throughout the period of use. Additionally, the Group assesses the extent of its decision-making rights and the existence of any substantive substitution rights. All facts and circumstances relevant to the assessment are considered and the identification of a lease is determined with the support of the departments that have the relevant knowledge, and which mainly includes the GBU management. Refer to note F21 Right-of-use assets and lease obligations for the leases that were identified by the Group and accounted for in accordance with IFRS 16 Leases.
Determining the lease term requires judgment. Elements that are considered include assessing the probability that early termination options or extension options will be exercised. All facts and circumstances relevant to the assessment are considered, and the main ones have been described in note F21 Right-of-use assets and lease obligations. Lease terms are determined with the support of the departments that have the relevant knowledge, and that mainly includes the Purchasing department, and the Facilities department.
NOTE F21
Right-of-use assets and lease obligations
fAccounting policy
Definition of a lease
At inception of a contract, which generally coincides with the date the contract is signed, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
An asset is typically identified by being explicitly specified in a contract. However, an asset can also be identified by being implicitly specified at the time that the asset is made available for use by the customer. If the supplier has a substantive substitution right, then the asset is not identified. A substantive substitution right means that (a) the supplier has the practical ability to substitute the asset throughout the period of use, and (b) would economically benefit from doing so.
To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether, throughout the period of use, it has:
\u2022the right to obtain substantially all of the economic benefits from use of the identified asset; and
\u2022the right to direct the use of the identified asset. This is generally the case when the Group has the decision-making rights regarding how and for what purpose the asset is used.
The Group\u2019s leased assets relate mainly to buildings, transportation equipment, and industrial equipment.
Lease term
The Group determines the lease term as the non-cancellable period of a lease, together with both:
\u2022periods covered by an option to extend the lease if the Group is reasonably certain to exercise that option; and
\u2022periods covered by an option to terminate the lease if the Group is reasonably certain not to exercise that option.
In its assessment, the Group considers the impact of the following factors (non-exhaustive):
\u2022contractual terms and conditions for the optional periods, compared with market rates;
\u2022significant leasehold improvements undertaken (or expected to be undertaken) over the term of the contract;
\u2022costs relating to the termination of the lease, including relocation costs, costs of identifying another underlying asset suitable for the Group\u2019s needs, costs of integrating a new asset into the Group\u2019s operations, and termination penalties;
\u2022the importance of that underlying asset to the Group\u2019s operations, including the availability of suitable alternatives;
\u2022conditionality associated with exercising the option (i.e. When the option can be exercised only if one or more conditions are met), and the likelihood that those conditions will exist; and
\u2022past practice.
Right-of-use asset and lease liability
The Group recognizes a right-of-use asset and a lease liability at the lease commencement date, which is the date that the lessor makes the asset available for use by the Group except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. The right-of-use assets are presented separately in the consolidated statement of financial position, and the lease liabilities are presented as part of financial debt.
Right-of-use asset
The right-of-use asset is initially measured at cost, which comprises:
\u2022the amount of the initial measurement of the lease liability;
\u2022any lease payments made at or before the commencement date, less any lease incentive received; and
\u2022any initial direct costs incurred by the Group.
After the commencement date, the right-of-use asset is measured at cost less any accumulated depreciation and any accumulated impairment losses. Right-of-use assets are depreciated using the straight-line depreciation method, from the commencement date to (a) the end of the useful life of the underlying asset, in case the lease transfers ownership of the underlying asset to the Group by the end of the lease term, or the lease contains a purchase option that the Group is reasonably certain to exercise, or (b) the earlier of the end of the useful life and the end of the lease term, in all other cases.
Lease liability
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the respective Group entity\u2019s incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise the following:
\u2022fixed payments, less any lease incentives receivable;
\u2022variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
\u2022amounts expected to be payable by the Group under residual value guarantees;
\u2022the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
\u2022payments of penalties for early terminating the lease, if the Group is reasonably certain to exercise an option to early terminate the lease.
Service components (e.g. utilities, maintenance, insurance) are excluded from the measurement of the lease liability.
After the commencement date, the lease liability is measured by:
\u2022increasing the carrying amount to reflect interest on the lease liability;
\u2022reducing the carrying amount to reflect the lease payments made; and
\u2022remeasuring the carrying amount to reflect any reassessment or lease modifications, or to reflect the impact from a revised index or rate.
Leasing of Palladium
The Group uses palladium, a precious metal, for certain of its operations. Next to purchasing this palladium, the Group also enters into various \u201cleasing\u201d agreements with financial institutions that give the Group the right to use palladium for a certain period and then return it at the end of the \"lease\". Based on our analysis of these agreements, these contracts are not in the scope of IFRS 16 Leases or IFRS 9 Financial Instruments. Due to the lack of clear IFRS guidance, the Group applied judgment to determine whether these rights and obligations shall be accounted for on a gross or a net basis. Considering that the Group bears no price risk during the \"lease\" term and is not in full control of the asset (in accordance with the IFRS Conceptual Framework), the Group believes a net presentation gives a better view on the economic substance of the transaction. As a result, only accruals are recorded for the production losses and regeneration costs and the \u201clease\u201d fee is recognized within cost of sales.
| \n In \u20ac million | \n\n Land | \n\n Buildings | \n\n Transportation equipment | \n\n Industrial equipment | \n\n Other tangible assets | \n\n Total | \n
|---|---|---|---|---|---|---|
| \n Gross carrying amount | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n 19 | \n\n 250 | \n\n 289 | \n\n 279 | \n\n 16 | \n\n 852 | \n
| \n Additions | \n\n 0 | \n\n 17 | \n\n 62 | \n\n 15 | \n\n 7 | \n\n 101 | \n
| \n Disposals and closures | \n\n 0 | \n\n -25 | \n\n -16 | \n\n -18 | \n\n -2 | \n\n -62 | \n
| \n Increase through business combinations | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Currency translation differences | \n\n 0 | \n\n -3 | \n\n -7 | \n\n -3 | \n\n 0 | \n\n -14 | \n
| \n Partial Demerger | \n\n -11 | \n\n -170 | \n\n -82 | \n\n -133 | \n\n -12 | \n\n -409 | \n
| \n Other | \n\n 0 | \n\n 5 | \n\n 15 | \n\n -10 | \n\n 1 | \n\n 11 | \n
| \n December 31, 2023 | \n\n 8 | \n\n 73 | \n\n 261 | \n\n 128 | \n\n 8 | \n\n 479 | \n
| \n Additions | \n\n 0 | \n\n 2 | \n\n 38 | \n\n 7 | \n\n 3 | \n\n 50 | \n
| \n Disposals and closures | \n\n 0 | \n\n -3 | \n\n -16 | \n\n -5 | \n\n 0 | \n\n -25 | \n
| \n Increase through business combinations | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Currency translation differences | \n\n 0 | \n\n 0 | \n\n 11 | \n\n 1 | \n\n 0 | \n\n 13 | \n
| \n Other | \n\n 0 | \n\n -1 | \n\n 2 | \n\n 2 | \n\n 2 | \n\n 5 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n December 31, 2024 | \n\n 9 | \n\n 70 | \n\n 296 | \n\n 134 | \n\n 13 | \n\n 522 | \n
| \n Accumulated depreciation | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n -5 | \n\n -115 | \n\n -148 | \n\n -100 | \n\n -9 | \n\n -377 | \n
| \n Depreciation | \n\n -1 | \n\n -31 | \n\n -47 | \n\n -32 | \n\n -3 | \n\n -114 | \n
| \n Impairment | \n\n 0 | \n\n -1 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n -1 | \n
| \n Disposals and closures | \n\n 0 | \n\n 16 | \n\n 16 | \n\n 18 | \n\n 2 | \n\n 53 | \n
| \n Currency translation differences | \n\n 0 | \n\n 2 | \n\n 3 | \n\n 1 | \n\n 0 | \n\n 6 | \n
| \n Partial Demerger | \n\n 4 | \n\n 90 | \n\n 54 | \n\n 67 | \n\n 5 | \n\n 219 | \n
| \n December 31, 2023 | \n\n -2 | \n\n -39 | \n\n -122 | \n\n -45 | \n\n -5 | \n\n -213 | \n
| \n Depreciation | \n\n 0 | \n\n -10 | \n\n -33 | \n\n -16 | \n\n -2 | \n\n -62 | \n
| \n Impairment | \n\n 0 | \n\n -4 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n -4 | \n
| \n Disposals and closures | \n\n 0 | \n\n 3 | \n\n 16 | \n\n 5 | \n\n 0 | \n\n 25 | \n
| \n Currency translation differences | \n\n 0 | \n\n 0 | \n\n -5 | \n\n -1 | \n\n 0 | \n\n -5 | \n
| \n Other | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n December 31, 2024 | \n\n -3 | \n\n -48 | \n\n -144 | \n\n -56 | \n\n -7 | \n\n -258 | \n
| \n Net carrying amount | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n 14 | \n\n 134 | \n\n 141 | \n\n 178 | \n\n 6 | \n\n 474 | \n
| \n December 31, 2023 | \n\n 6 | \n\n 34 | \n\n 139 | \n\n 83 | \n\n 3 | \n\n 267 | \n
| \n December 31, 2024 | \n\n 6 | \n\n 22 | \n\n 152 | \n\n 78 | \n\n 6 | \n\n 264 | \n
The Group primarily leases buildings that include office buildings, and warehouses. Those leases are generally long-term leases and may include extension options.
The Group leases transportation equipment that mainly consists of railcars and containers to transport the Group\u2019s products.
Industrial equipment mainly relates to utility assets.
Generally, lease contracts are negotiated by the local teams and contain a wide range of different terms and conditions. Many lease contracts contain extension options and/or early termination options to provide the Group with operational flexibility. Such options are considered when determining the lease term and the lease liability when it is reasonably certain that they will be exercised.
If the group exercised its extension options not currently included in the lease liability, the present value of the additional payments would be \u20ac25 million at December\u00a031, 2024 (\u20ac42 million at December 31, 2023).
The lease contracts signed not yet commenced amount was \u20ac203 million at December 31, 2024 (\u20ac210 million at December 31, 2023) and is mainly related to a second waste-wood boiler in Germany, industrial equipment in France, and terminal services and rail cars in the United States.
Total cash outflows for leases amount to \u20ac75 million for 2024, of which \u20ac63 million related to payment of lease liabilities and \u20ac12 million of interest expenses. Information on the corresponding lease liabilities (long-term part of \u20ac236 million and short-term part of \u20ac70 million) can be found in the note F32 Financial Instruments. Information on the finance expense related to lease liabilities can be found in note F6 Net financial charges.
The 2023 figures contain the amounts related to Specialty Businesses until December 8, 2023.
In 2024, the expense related to both low-value and short-term leases was \u20ac5 million.
At the end of 2024, the total (gross) value of palladium leased still to be returned amounted to \u20ac28 million (end of 2023: \u20ac33 million). The difference is mainly due to the change of the market price of the commodity.
The Group enters into various contracts to obtain goods and services. Determining whether those contracts include a lease requires judgment. Elements that are considered include assessing whether or not there is an identified asset. To make the determination the Group considers whether or not it has the right to obtain substantially all of the economic benefit of the asset(s) throughout the period of use. Additionally, the Group assesses the extent of its decision-making rights and the existence of any substantive substitution rights. All facts and circumstances relevant to the assessment are considered and the identification of a lease is determined with the support of the departments that have the relevant knowledge, and which mainly includes the GBU management. Refer to note F21 Right-of-use assets and lease obligations for the leases that were identified by the Group and accounted for in accordance with IFRS 16 Leases.
Determining the lease term requires judgment. Elements that are considered include assessing the probability that early termination options or extension options will be exercised. All facts and circumstances relevant to the assessment are considered, and the main ones have been described in note F21 Right-of-use assets and lease obligations. Lease terms are determined with the support of the departments that have the relevant knowledge, and that mainly includes the Purchasing department, and the Facilities department.
NOTE F21
Right-of-use assets and lease obligations
fAccounting policy
Definition of a lease
At inception of a contract, which generally coincides with the date the contract is signed, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
An asset is typically identified by being explicitly specified in a contract. However, an asset can also be identified by being implicitly specified at the time that the asset is made available for use by the customer. If the supplier has a substantive substitution right, then the asset is not identified. A substantive substitution right means that (a) the supplier has the practical ability to substitute the asset throughout the period of use, and (b) would economically benefit from doing so.
To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether, throughout the period of use, it has:
\u2022the right to obtain substantially all of the economic benefits from use of the identified asset; and
\u2022the right to direct the use of the identified asset. This is generally the case when the Group has the decision-making rights regarding how and for what purpose the asset is used.
The Group\u2019s leased assets relate mainly to buildings, transportation equipment, and industrial equipment.
Lease term
The Group determines the lease term as the non-cancellable period of a lease, together with both:
\u2022periods covered by an option to extend the lease if the Group is reasonably certain to exercise that option; and
\u2022periods covered by an option to terminate the lease if the Group is reasonably certain not to exercise that option.
In its assessment, the Group considers the impact of the following factors (non-exhaustive):
\u2022contractual terms and conditions for the optional periods, compared with market rates;
\u2022significant leasehold improvements undertaken (or expected to be undertaken) over the term of the contract;
\u2022costs relating to the termination of the lease, including relocation costs, costs of identifying another underlying asset suitable for the Group\u2019s needs, costs of integrating a new asset into the Group\u2019s operations, and termination penalties;
\u2022the importance of that underlying asset to the Group\u2019s operations, including the availability of suitable alternatives;
\u2022conditionality associated with exercising the option (i.e. When the option can be exercised only if one or more conditions are met), and the likelihood that those conditions will exist; and
\u2022past practice.
Right-of-use asset and lease liability
The Group recognizes a right-of-use asset and a lease liability at the lease commencement date, which is the date that the lessor makes the asset available for use by the Group except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. The right-of-use assets are presented separately in the consolidated statement of financial position, and the lease liabilities are presented as part of financial debt.
Right-of-use asset
The right-of-use asset is initially measured at cost, which comprises:
\u2022the amount of the initial measurement of the lease liability;
\u2022any lease payments made at or before the commencement date, less any lease incentive received; and
\u2022any initial direct costs incurred by the Group.
After the commencement date, the right-of-use asset is measured at cost less any accumulated depreciation and any accumulated impairment losses. Right-of-use assets are depreciated using the straight-line depreciation method, from the commencement date to (a) the end of the useful life of the underlying asset, in case the lease transfers ownership of the underlying asset to the Group by the end of the lease term, or the lease contains a purchase option that the Group is reasonably certain to exercise, or (b) the earlier of the end of the useful life and the end of the lease term, in all other cases.
Lease liability
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the respective Group entity\u2019s incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise the following:
\u2022fixed payments, less any lease incentives receivable;
\u2022variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
\u2022amounts expected to be payable by the Group under residual value guarantees;
\u2022the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
\u2022payments of penalties for early terminating the lease, if the Group is reasonably certain to exercise an option to early terminate the lease.
Service components (e.g. utilities, maintenance, insurance) are excluded from the measurement of the lease liability.
After the commencement date, the lease liability is measured by:
\u2022increasing the carrying amount to reflect interest on the lease liability;
\u2022reducing the carrying amount to reflect the lease payments made; and
\u2022remeasuring the carrying amount to reflect any reassessment or lease modifications, or to reflect the impact from a revised index or rate.
Leasing of Palladium
The Group uses palladium, a precious metal, for certain of its operations. Next to purchasing this palladium, the Group also enters into various \u201cleasing\u201d agreements with financial institutions that give the Group the right to use palladium for a certain period and then return it at the end of the \"lease\". Based on our analysis of these agreements, these contracts are not in the scope of IFRS 16 Leases or IFRS 9 Financial Instruments. Due to the lack of clear IFRS guidance, the Group applied judgment to determine whether these rights and obligations shall be accounted for on a gross or a net basis. Considering that the Group bears no price risk during the \"lease\" term and is not in full control of the asset (in accordance with the IFRS Conceptual Framework), the Group believes a net presentation gives a better view on the economic substance of the transaction. As a result, only accruals are recorded for the production losses and regeneration costs and the \u201clease\u201d fee is recognized within cost of sales.
NOTE F1
Revenue and segment information
fAccounting policy
IFRS 15 establishes a five-step model to account for revenue arising from contracts with customers:
\u2022Identify the contract,
\u2022Identify the performance obligations,
\u2022Determine the transaction price,
\u2022Allocate the transaction price to the performance obligations in the contract, and
\u2022Recognize revenue when or as the Group satisfies a performance obligation.
Under IFRS 15, revenue is recognized at an amount that reflects the consideration to which the Group expects to be entitled in exchange for transferring goods or services to a customer.
Sale of goods: Contracts can be short term (including based only on a purchase order) or long term, some have minimum off-take requirements. Contracts that contain take-or-pay provisions obligate customers to pay shortfall payments if the required volumes, as defined in the contracts, are not purchased. Shortfall payments are recognized as revenues when the likelihood of the customer purchasing the minimum volume becomes remote subject to renegotiation of the contract and collectability. As the Group is in the business of selling essential chemicals, and performance chemicals, contracts with customers generally concern the sale of goods. As a result, revenue recognition generally occurs at a point in time when control of the chemicals is transferred to the customer, generally on delivery of the goods.
Distinct elements: a good or service that is promised to a customer is distinct if both of the following criteria are met: (a) the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e. The good or service is capable of being distinct); and (b) the Group\u2019s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e. The promise to transfer the good or service is distinct within the context of the contract).
The revenue of the Group consists mainly of sales of chemicals, which qualify as separate performance obligations. Value-added services \u2013 mainly customer assistance services \u2013 corresponding to Solvay\u2019s know-how are rendered predominantly over the period that the corresponding goods are sold to the customer.
Variable consideration: some contracts with customers provide trade discounts or volume rebates. Trade discounts and volume rebates give rise to variable consideration under IFRS 15 and are required to be estimated at contract inception and subsequently at each reporting date. IFRS 15 requires the estimated variable consideration to be constrained to prevent overstatement of revenue.
Moment of recognition of revenue: revenue is recognized when (or as) the Group satisfies a performance obligation by transferring a promised good or service (i.e. an asset) to a customer. An asset is transferred when (or as) the customer obtains control of that asset. Substantially all revenue stems from performance obligations satisfied at a point in time, i.e. The sale of goods. Revenue recognition for those takes into account the following:
\u2022The Group has a present right to payment for the asset;
\u2022The customer has legal title to the asset;
\u2022The Group has transferred physical possession of the asset;
\u2022The customer has the significant risks and rewards of ownership of the asset (in this respect, incoterms are considered); and
\u2022The customer has accepted the asset.
Products sold to customers generally cannot be returned, other than for performance deficiencies. Customer acceptance clauses are in many cases a formality that would not affect the Group\u2019s determination of when the customer has obtained control of the goods. Revenue from services is recognized in the period those services have been rendered.
The Group sells its products to its customers, (a) directly, (b) through distributors, and (c) with the assistance of agents. When the Group delivers a product to distributors for sale to end customers, the Group evaluates whether that distributor has obtained control of the product at that point in time. No revenue is recognized upon delivery of a product to a customer or distributor if the delivered product is held on consignment. Indicators of consignment inventory include:
\u2022The product is controlled by the Group until a specified event occurs, such as the sale of the product to a customer of the distributor or until a specified period expires;
\u2022The Group is able to require the return of the product or transfer the product to a third party (such as another distributor); and
\u2022The distributor does not have an unconditional obligation to pay for the product (although they might be required to pay a deposit).
\u2022Agents facilitate sales and do not purchase and resell the goods to the end customer.
Warranties: warranties provide a customer with assurance that the related product will function as the parties intended because it complies with agreed-upon specifications. Substantially all warranties do not provide the customer with a service in addition to the assurance that the product complies with agreed-upon specifications and are hence accounted for in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
Licensing: In case of performance obligations relating to licensing intellectual property (IP), the Group assesses if it grants a right to access the IP as it exists throughout the license period or a right to use the IP as it exists at the point in time at which the license is granted. If the performance obligation is to grant a right to access, then the related revenue is recognized over the license period; otherwise, it is recognized at a point in time, i.e. when the license period starts or when the customer starts using the IP. The Group assesses if the license provided can be considered as being distinct in the context of the contract. If not, the license will have to be bundled with other goods or services provided in the contract. Currently the Group grants a right to use IP, which means that revenue recognition occurs at a point in time.
An Operating Segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the entity\u2019s chief operating decision maker and for which discrete financial information is available.
Solvay organizes its structure and groups the businesses around their similarities in financial performance which is systematically reviewed by the Chief Operational Decision Maker, products and production processes. Solvay\u2019s chief operating decision maker is the Chief Executive Officer.
Following the completion of the Partial Demerger of the Specialty Businesses on December 9, 2023, the structure of the internal organization changed what impacted the composition of the segments. Consequently, Solvay restructured its operating segments to better align with the Group\u2019s strategy and, in 2024, the Group is internally organized in the following reportable segments:
hBasic Chemicals host chemical intermediate businesses focused on mature and resilient markets. Solvay is a world leader in soda ash, bicarbonate, and peroxides. These global businesses share similar economic characteristics and serve major markets that include building and construction, consumer goods, and food.
hPerformance Chemicals host a wider range of products (in our Silica, Coatis and Special Chem businesses) that are subject to customization based on unique formulations and application expertise. These businesses share similar economic characteristics and are high-quality assets with strong positions in their markets.
hCorporate comprises corporate and other business services, such as its Global Business services, as well as Procurement and Energy expertise.
The financial information related to 2023 was restated to reflect the change in segment composition and it reflects that \u201ceH2O2\u201d (electronic-grade hydrogen peroxide) business was transferred from GBU Special Chem to GBU Peroxides on January 1, 2024 (net sales of \u20ac109 million).
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Soda Ash & Derivatives | \n\n 1,907 | \n\n 2,093 | \n
| \n Peroxides | \n\n 789 | \n\n 742 | \n
| \n Basic Chemicals | \n\n 2,695 | \n\n 2,835 | \n
| \n Silica | \n\n 543 | \n\n 583 | \n
| \n Coatis | \n\n 631 | \n\n 646 | \n
| \n Special Chem | \n\n 660 | \n\n 810 | \n
| \n Performance Chemicals | \n\n 1,834 | \n\n 2,039 | \n
| \n CBS | \n\n 10 | \n\n 6 | \n
| \n Corporate | \n\n 10 | \n\n 6 | \n
| \n Total | \n\n 4,540 | \n\n 4,880 | \n
There are no individual customers that contribute 10% or more to the Group\u2019s revenue or any individual segment\u2019s revenue in either 2024 or 2023.
The non-core revenue is disclosed in Note F3 Revenue from non-core activities.
Sales by market are presented in the Business Performance section - see note P1.
The net sales disclosed below are allocated based on the customers\u2019 location.
| \n In \u20ac million | \n\n 2024 | \n\n % | \n\n 2023 | \n\n % | \n
|---|---|---|---|---|
| \n Belgium | \n\n 100 | \n\n 2% | \n\n 93 | \n\n 2% | \n
| \n Germany | \n\n 390 | \n\n 9% | \n\n 449 | \n\n 9% | \n
| \n Italy | \n\n 221 | \n\n 5% | \n\n 267 | \n\n 5% | \n
| \n France | \n\n 212 | \n\n 5% | \n\n 236 | \n\n 5% | \n
| \n Netherlands | \n\n 37 | \n\n 1% | \n\n 55 | \n\n 1% | \n
| \n Spain | \n\n 96 | \n\n 2% | \n\n 130 | \n\n 3% | \n
| \n European Union - Other | \n\n 379 | \n\n 8% | \n\n 414 | \n\n 8% | \n
| \n European Union | \n\n 1,435 | \n\n 32% | \n\n 1,645 | \n\n 34% | \n
| \n Europe - Other | \n\n 91 | \n\n 2% | \n\n 108 | \n\n 2% | \n
| \n United States | \n\n 839 | \n\n 18% | \n\n 830 | \n\n 17% | \n
| \n Canada | \n\n 58 | \n\n 1% | \n\n 58 | \n\n 1% | \n
| \n North America | \n\n 897 | \n\n 20% | \n\n 888 | \n\n 18% | \n
| \n Argentina | \n\n 42 | \n\n 1% | \n\n 39 | \n\n 1% | \n
| \n Chile | \n\n 85 | \n\n 2% | \n\n 68 | \n\n 1% | \n
| \n Brazil | \n\n 590 | \n\n 13% | \n\n 610 | \n\n 13% | \n
| \n Mexico | \n\n 118 | \n\n 3% | \n\n 156 | \n\n 3% | \n
| \n Latin America - Other | \n\n 49 | \n\n 1% | \n\n 42 | \n\n 1% | \n
| \n Latin America | \n\n 882 | \n\n 19% | \n\n 914 | \n\n 19% | \n
| \n Australia | \n\n 24 | \n\n 1% | \n\n 27 | \n\n 1% | \n
| \n China | \n\n 284 | \n\n 6% | \n\n 298 | \n\n 6% | \n
| \n Egypt | \n\n 35 | \n\n 1% | \n\n 43 | \n\n 1% | \n
| \n India | \n\n 43 | \n\n 1% | \n\n 55 | \n\n 1% | \n
| \n Indonesia | \n\n 60 | \n\n 1% | \n\n 65 | \n\n 1% | \n
| \n Israel | \n\n 41 | \n\n 1% | \n\n 34 | \n\n 1% | \n
| \n Japan | \n\n 73 | \n\n 2% | \n\n 100 | \n\n 2% | \n
| \n Malaysia | \n\n 71 | \n\n 2% | \n\n 66 | \n\n 1% | \n
| \n Philippines | \n\n 21 | \n\n 0% | \n\n 17 | \n\n 0% | \n
| \n Saudi Arabia | \n\n 111 | \n\n 2% | \n\n 99 | \n\n 2% | \n
| \n South Africa | \n\n 20 | \n\n 0% | \n\n 32 | \n\n 1% | \n
| \n South Korea | \n\n 97 | \n\n 2% | \n\n 115 | \n\n 2% | \n
| \n Thailand | \n\n 134 | \n\n 3% | \n\n 138 | \n\n 3% | \n
| \n Turkey | \n\n 37 | \n\n 1% | \n\n 38 | \n\n 1% | \n
| \n Vietnam | \n\n 38 | \n\n 1% | \n\n 48 | \n\n 1% | \n
| \n Other | \n\n 147 | \n\n 3% | \n\n 149 | \n\n 3% | \n
| \n Asia and rest of the world | \n\n 1,235 | \n\n 27% | \n\n 1,325 | \n\n 27% | \n
| \n Total | \n\n 4,540 | \n\n 100% | \n\n 4,880 | \n\n 100% | \n
| \n 2024 - In \u20ac million | \n\n Basic Chemicals | \n\n Performance Chemicals | \n\n Corporate | \n\n Group Total | \n
|---|---|---|---|---|
| \n Income statement items | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Sales | \n\n 3,218 | \n\n 1,877 | \n\n 35 | \n\n 5,130 | \n
| \n of which | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Net sales (including inter-segment sales) | \n\n 2,706 | \n\n 1,834 | \n\n 10 | \n\n 4,550 | \n
| \n \u2022Inter-segment sales | \n\n -10 | \n\n 0 | \n\n 0 | \n\n -10 | \n
| \n Net sales | \n\n 2,695 | \n\n 1,834 | \n\n 10 | \n\n 4,540 | \n
| \n Revenue from non-core activities | \n\n 523 | \n\n 43 | \n\n 25 | \n\n 590 | \n
| \n Gross margin | \n\n 735 | \n\n 404 | \n\n 7 | \n\n 1,146 | \n
| \n Depreciation and amortization | \n\n 221 | \n\n 106 | \n\n 34 | \n\n 362 | \n
| \n Earnings from associates and joint ventures | \n\n 38 | \n\n 1 | \n\n 0 | \n\n 38 | \n
| \n Underlying EBITDA(1) | \n\n 786 | \n\n 324 | \n\n -58 | \n\n 1,052 | \n
| \n EBIT | \n\n 499 | \n\n 165 | \n\n -230 | \n\n 433 | \n
| \n Net financial charges | \n\n \n | \n\n \n | \n\n \n | \n\n -113 | \n
| \n Income taxes | \n\n \n | \n\n \n | \n\n \n | \n\n -87 | \n
| \n Profit for the year from discontinued operations | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Profit/(loss) for the year | \n\n \n | \n\n \n | \n\n \n | \n\n 233 | \n
| \n 31 December 2024 - In \u20ac million | \n\n Basic Chemicals | \n\n Performance Chemicals | \n\n Corporate | \n\n Group Total | \n
|---|---|---|---|---|
| \n Statement of financial position and other items | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Capital expenditures(2) | \n\n 226 | \n\n 90 | \n\n 33 | \n\n 349 | \n
| \n Investments | \n\n 5 | \n\n 0 | \n\n 8 | \n\n 13 | \n
| \n Working capital | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n \u2022Inventories | \n\n 311 | \n\n 293 | \n\n 19 | \n\n 623 | \n
| \n \u2022Trade receivables | \n\n 496 | \n\n 212 | \n\n 118 | \n\n 826 | \n
| \n \u2022Trade payables | \n\n 452 | \n\n 247 | \n\n 111 | \n\n 810 | \n
| \n 2023 - In \u20ac million | \n\n Basic Chemicals | \n\n Performance Chemicals | \n\n Corporate | \n\n Group Total | \n
|---|---|---|---|---|
| \n Income statement items | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Sales | \n\n 3,411 | \n\n 2,068 | \n\n 544 | \n\n 6,024 | \n
| \n of which | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Net sales (including inter-segment sales) | \n\n 2,886 | \n\n 2,043 | \n\n 6 | \n\n 4,935 | \n
| \n \u2022Inter-segment sales | \n\n -51 | \n\n -4 | \n\n 0 | \n\n -55 | \n
| \n Net sales | \n\n 2,835 | \n\n 2,039 | \n\n 6 | \n\n 4,880 | \n
| \n Revenue from non-core activities | \n\n 577 | \n\n 29 | \n\n 538 | \n\n 1,144 | \n
| \n Gross margin | \n\n 887 | \n\n 449 | \n\n 46 | \n\n 1,382 | \n
| \n Depreciation and amortization | \n\n 185 | \n\n 163 | \n\n 69 | \n\n 418 | \n
| \n Earnings from associates and joint ventures | \n\n 45 | \n\n 0 | \n\n 8 | \n\n 53 | \n
| \n Underlying EBITDA(1) | \n\n 950 | \n\n 371 | \n\n -75 | \n\n 1,246 | \n
| \n EBIT | \n\n 739 | \n\n 159 | \n\n -620 | \n\n 278 | \n
| \n Net financial charges | \n\n \n | \n\n \n | \n\n \n | \n\n -98 | \n
| \n Income taxes | \n\n \n | \n\n \n | \n\n \n | \n\n -208 | \n
| \n Profit for the year from discontinued operations | \n\n \n | \n\n \n | \n\n \n | \n\n 2,132 | \n
| \n Profit/(loss) for the year | \n\n \n | \n\n \n | \n\n \n | \n\n 2,105 | \n
| \n 31 December 2023 - In \u20ac million | \n\n Basic Chemicals | \n\n Performance Chemicals | \n\n Corporate | \n\n Group Total | \n
|---|---|---|---|---|
| \n Statement of financial position and other items | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Capital expenditures(2) | \n\n 294 | \n\n 120 | \n\n 35 | \n\n 450 | \n
| \n Investments(3) | \n\n 4 | \n\n 5 | \n\n -427 | \n\n -418 | \n
| \n Working capital | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n \u2022Inventories | \n\n 332 | \n\n 282 | \n\n 28 | \n\n 642 | \n
| \n \u2022Trade receivables | \n\n 476 | \n\n 247 | \n\n 118 | \n\n 841 | \n
| \n \u2022Trade payables | \n\n 419 | \n\n 253 | \n\n 181 | \n\n 853 | \n
(1)Underlying EBITDA is a key performance indicator followed by management and includes other elements than those presented above. See below for the reconciliation between Underlying EBITDA and EBIT. See Business Performance section for reconciliation of other Underlying measures with IFRS figures.
(2)Capital expenditures from continuing operations include acquisitions of property, plant and equipment, acquisition of intangible assets and acquisition of Right of use assets.
(3)The negative figure of \u20ac(427) million relates to RusVinyl sale of investment.
| \n 2024 - In \u20ac million | \n\n Basic Chemicals | \n\n Performance Chemicals | \n\n Corporate | \n\n Group Total | \n
|---|---|---|---|---|
| \n EBIT | \n\n 499 | \n\n 165 | \n\n -230 | \n\n 433 | \n
| \n Administrative costs | \n\n \n | \n\n \n | \n\n -5 | \n\n -5 | \n
| \n Other costs | \n\n \n | \n\n \n | \n\n -11 | \n\n -11 | \n
| \n Other operating gains and (losses) | \n\n \n | \n\n \n | \n\n 89 | \n\n 89 | \n
| \n Earnings from joint venture Peroxidos do Brazil | \n\n -34 | \n\n \n | \n\n \n | \n\n -34 | \n
| \n Proportional consolidation of Peroxidos do Brazil | \n\n 52 | \n\n \n | \n\n \n | \n\n 52 | \n
| \n Depreciation and amortization | \n\n 205 | \n\n 85 | \n\n 30 | \n\n 320 | \n
| \n Results from portfolio management and major restructuring and results from legacy remediation and major litigations | \n\n 64 | \n\n 74 | \n\n 68 | \n\n 207 | \n
| \n Underlying EBITDA | \n\n 786 | \n\n 324 | \n\n -58 | \n\n 1,052 | \n
Other costs relate to energy-sold activity.
The other operating gains and losses primarily consist of the CO2 hedge management result (\u20ac69 million) and major change in environmental provisions at open sites (\u20ac15 million).
The reconciling items related to i) Earnings from associates and joint ventures, and ii) Proportional consolidation of Peroxidos do Brasil are linked to the change in Adjustments as explained in the Glossary.
For the reconciliation items \u201cResult from portfolio management and major restructuring and results from legacy remediation and major litigations,\u201d see note F5.
The item depreciation and amortization exclude \u20ac41 million consisting of \u20ac5 million of the non-cash impact of purchase price allocation (PPA), amortization charges on intangible assets, and \u20ac45 million to adjust for the impact of impairment of other non-cash generating assets and includes the depreciations and amortizations for \u20ac9 million related to Peroxidos do Brasil.
| \n 2023 - In \u20ac million | \n\n Basic Chemicals | \n\n Performance Chemicals | \n\n Corporate | \n\n Group Total | \n
|---|---|---|---|---|
| \n EBIT | \n\n 739 | \n\n 159 | \n\n -620 | \n\n 278 | \n
| \n Administrative costs | \n\n \n | \n\n \n | \n\n 68 | \n\n 68 | \n
| \n Other operating gains and (losses) | \n\n \n | \n\n \n | \n\n -14 | \n\n -14 | \n
| \n Earnings from associates and joint ventures | \n\n \n | \n\n \n | \n\n -7 | \n\n -7 | \n
| \n Depreciation and amortization | \n\n 184 | \n\n 101 | \n\n 36 | \n\n 321 | \n
| \n Results from portfolio management and major restructuring and results from legacy remediation and major litigations | \n\n 27 | \n\n 112 | \n\n 461 | \n\n 600 | \n
| \n Underlying EBITDA | \n\n 950 | \n\n 371 | \n\n -76 | \n\n 1,246 | \n
| \n In \u20ac million | \n\n Non-current assets | \n\n Capital expenditures and investments | \n||||||
|---|---|---|---|---|---|---|---|---|
| \n December 31, 2024 | \n\n % | \n\n December 31, 2023 | \n\n % | \n\n 2024 | \n\n % | \n\n 2023 | \n\n % | \n|
| \n Belgium | \n\n 228 | \n\n 6% | \n\n 272 | \n\n 7% | \n\n -29 | \n\n 8% | \n\n -26 | \n\n 2% | \n
| \n Germany | \n\n 346 | \n\n 9% | \n\n 338 | \n\n 9% | \n\n -48 | \n\n 13% | \n\n -56 | \n\n 5% | \n
| \n Italy | \n\n 264 | \n\n 7% | \n\n 259 | \n\n 7% | \n\n -32 | \n\n 9% | \n\n -131 | \n\n 12% | \n
| \n France | \n\n 633 | \n\n 17% | \n\n 653 | \n\n 18% | \n\n -50 | \n\n 14% | \n\n -318 | \n\n 28% | \n
| \n Spain | \n\n 124 | \n\n 3% | \n\n 128 | \n\n 3% | \n\n -12 | \n\n 3% | \n\n -12 | \n\n 1% | \n
| \n European Union - Other | \n\n 694 | \n\n 19% | \n\n 710 | \n\n 19% | \n\n -18 | \n\n 5% | \n\n -33 | \n\n 3% | \n
| \n European Union | \n\n 2,289 | \n\n 62% | \n\n 2,359 | \n\n 63% | \n\n -189 | \n\n 52% | \n\n -577 | \n\n 51% | \n
| \n Europe - Other | \n\n 2 | \n\n 0% | \n\n 6 | \n\n 0% | \n\n -2 | \n\n 1% | \n\n -16 | \n\n 1% | \n
| \n United States | \n\n 813 | \n\n 22% | \n\n 709 | \n\n 19% | \n\n -112 | \n\n 31% | \n\n -390 | \n\n 34% | \n
| \n Canada | \n\n 0 | \n\n 0% | \n\n 0 | \n\n 0% | \n\n 0 | \n\n 0% | \n\n -19 | \n\n 2% | \n
| \n North America | \n\n 813 | \n\n 22% | \n\n 709 | \n\n 19% | \n\n -112 | \n\n 31% | \n\n -409 | \n\n 36% | \n
| \n Brazil | \n\n 245 | \n\n 7% | \n\n 276 | \n\n 7% | \n\n -25 | \n\n 7% | \n\n -41 | \n\n 4% | \n
| \n Latin America - Other | \n\n 11 | \n\n 0% | \n\n 11 | \n\n 0% | \n\n -2 | \n\n 1% | \n\n -5 | \n\n 0% | \n
| \n Latin America | \n\n 256 | \n\n 7% | \n\n 287 | \n\n 8% | \n\n -27 | \n\n 7% | \n\n -46 | \n\n 4% | \n
| \n Thailand | \n\n 66 | \n\n 2% | \n\n 72 | \n\n 2% | \n\n -5 | \n\n 1% | \n\n -5 | \n\n 0% | \n
| \n China | \n\n 122 | \n\n 3% | \n\n 102 | \n\n 3% | \n\n -20 | \n\n 5% | \n\n -54 | \n\n 5% | \n
| \n South Korea | \n\n 41 | \n\n 1% | \n\n 50 | \n\n 1% | \n\n -3 | \n\n 1% | \n\n -5 | \n\n 0% | \n
| \n India | \n\n 0 | \n\n 0% | \n\n 0 | \n\n 0% | \n\n 0 | \n\n 0% | \n\n -12 | \n\n 1% | \n
| \n Singapore | \n\n 0 | \n\n 0% | \n\n 0 | \n\n 0% | \n\n 0 | \n\n 0% | \n\n -1 | \n\n 0% | \n
| \n Japan | \n\n 14 | \n\n 0% | \n\n 15 | \n\n 0% | \n\n -1 | \n\n 0% | \n\n -3 | \n\n 0% | \n
| \n Other | \n\n 117 | \n\n 3% | \n\n 125 | \n\n 3% | \n\n -3 | \n\n 1% | \n\n -4 | \n\n 0% | \n
| \n Asia and rest of the world | \n\n 360 | \n\n 10% | \n\n 364 | \n\n 10% | \n\n -32 | \n\n 9% | \n\n -84 | \n\n 7% | \n
| \n Total | \n\n 3,720 | \n\n 100% | \n\n 3,726 | \n\n 100% | \n\n -362 | \n\n 100% | \n\n -1,132 | \n\n 100% | \n
Non-current assets are those other than deferred tax assets, loans and other assets, and other financial instruments. Capital expenditures and investments include acquisitions of property, plant and equipment, right-of-use assets, intangible assets and investments in subsidiaries and other investments (joint operations, joint ventures and associates). Both exclude discontinued operations.
NOTE F1
Revenue and segment information
fAccounting policy
IFRS 15 establishes a five-step model to account for revenue arising from contracts with customers:
\u2022Identify the contract,
\u2022Identify the performance obligations,
\u2022Determine the transaction price,
\u2022Allocate the transaction price to the performance obligations in the contract, and
\u2022Recognize revenue when or as the Group satisfies a performance obligation.
Under IFRS 15, revenue is recognized at an amount that reflects the consideration to which the Group expects to be entitled in exchange for transferring goods or services to a customer.
Sale of goods: Contracts can be short term (including based only on a purchase order) or long term, some have minimum off-take requirements. Contracts that contain take-or-pay provisions obligate customers to pay shortfall payments if the required volumes, as defined in the contracts, are not purchased. Shortfall payments are recognized as revenues when the likelihood of the customer purchasing the minimum volume becomes remote subject to renegotiation of the contract and collectability. As the Group is in the business of selling essential chemicals, and performance chemicals, contracts with customers generally concern the sale of goods. As a result, revenue recognition generally occurs at a point in time when control of the chemicals is transferred to the customer, generally on delivery of the goods.
Distinct elements: a good or service that is promised to a customer is distinct if both of the following criteria are met: (a) the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e. The good or service is capable of being distinct); and (b) the Group\u2019s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e. The promise to transfer the good or service is distinct within the context of the contract).
The revenue of the Group consists mainly of sales of chemicals, which qualify as separate performance obligations. Value-added services \u2013 mainly customer assistance services \u2013 corresponding to Solvay\u2019s know-how are rendered predominantly over the period that the corresponding goods are sold to the customer.
Variable consideration: some contracts with customers provide trade discounts or volume rebates. Trade discounts and volume rebates give rise to variable consideration under IFRS 15 and are required to be estimated at contract inception and subsequently at each reporting date. IFRS 15 requires the estimated variable consideration to be constrained to prevent overstatement of revenue.
Moment of recognition of revenue: revenue is recognized when (or as) the Group satisfies a performance obligation by transferring a promised good or service (i.e. an asset) to a customer. An asset is transferred when (or as) the customer obtains control of that asset. Substantially all revenue stems from performance obligations satisfied at a point in time, i.e. The sale of goods. Revenue recognition for those takes into account the following:
\u2022The Group has a present right to payment for the asset;
\u2022The customer has legal title to the asset;
\u2022The Group has transferred physical possession of the asset;
\u2022The customer has the significant risks and rewards of ownership of the asset (in this respect, incoterms are considered); and
\u2022The customer has accepted the asset.
Products sold to customers generally cannot be returned, other than for performance deficiencies. Customer acceptance clauses are in many cases a formality that would not affect the Group\u2019s determination of when the customer has obtained control of the goods. Revenue from services is recognized in the period those services have been rendered.
The Group sells its products to its customers, (a) directly, (b) through distributors, and (c) with the assistance of agents. When the Group delivers a product to distributors for sale to end customers, the Group evaluates whether that distributor has obtained control of the product at that point in time. No revenue is recognized upon delivery of a product to a customer or distributor if the delivered product is held on consignment. Indicators of consignment inventory include:
\u2022The product is controlled by the Group until a specified event occurs, such as the sale of the product to a customer of the distributor or until a specified period expires;
\u2022The Group is able to require the return of the product or transfer the product to a third party (such as another distributor); and
\u2022The distributor does not have an unconditional obligation to pay for the product (although they might be required to pay a deposit).
\u2022Agents facilitate sales and do not purchase and resell the goods to the end customer.
Warranties: warranties provide a customer with assurance that the related product will function as the parties intended because it complies with agreed-upon specifications. Substantially all warranties do not provide the customer with a service in addition to the assurance that the product complies with agreed-upon specifications and are hence accounted for in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
Licensing: In case of performance obligations relating to licensing intellectual property (IP), the Group assesses if it grants a right to access the IP as it exists throughout the license period or a right to use the IP as it exists at the point in time at which the license is granted. If the performance obligation is to grant a right to access, then the related revenue is recognized over the license period; otherwise, it is recognized at a point in time, i.e. when the license period starts or when the customer starts using the IP. The Group assesses if the license provided can be considered as being distinct in the context of the contract. If not, the license will have to be bundled with other goods or services provided in the contract. Currently the Group grants a right to use IP, which means that revenue recognition occurs at a point in time.
An Operating Segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the entity\u2019s chief operating decision maker and for which discrete financial information is available.
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Soda Ash & Derivatives | \n\n 1,907 | \n\n 2,093 | \n
| \n Peroxides | \n\n 789 | \n\n 742 | \n
| \n Basic Chemicals | \n\n 2,695 | \n\n 2,835 | \n
| \n Silica | \n\n 543 | \n\n 583 | \n
| \n Coatis | \n\n 631 | \n\n 646 | \n
| \n Special Chem | \n\n 660 | \n\n 810 | \n
| \n Performance Chemicals | \n\n 1,834 | \n\n 2,039 | \n
| \n CBS | \n\n 10 | \n\n 6 | \n
| \n Corporate | \n\n 10 | \n\n 6 | \n
| \n Total | \n\n 4,540 | \n\n 4,880 | \n
There are no individual customers that contribute 10% or more to the Group\u2019s revenue or any individual segment\u2019s revenue in either 2024 or 2023.
The non-core revenue is disclosed in Note F3 Revenue from non-core activities.
Sales by market are presented in the Business Performance section - see note P1.
The net sales disclosed below are allocated based on the customers\u2019 location.
| \n In \u20ac million | \n\n 2024 | \n\n % | \n\n 2023 | \n\n % | \n
|---|---|---|---|---|
| \n Belgium | \n\n 100 | \n\n 2% | \n\n 93 | \n\n 2% | \n
| \n Germany | \n\n 390 | \n\n 9% | \n\n 449 | \n\n 9% | \n
| \n Italy | \n\n 221 | \n\n 5% | \n\n 267 | \n\n 5% | \n
| \n France | \n\n 212 | \n\n 5% | \n\n 236 | \n\n 5% | \n
| \n Netherlands | \n\n 37 | \n\n 1% | \n\n 55 | \n\n 1% | \n
| \n Spain | \n\n 96 | \n\n 2% | \n\n 130 | \n\n 3% | \n
| \n European Union - Other | \n\n 379 | \n\n 8% | \n\n 414 | \n\n 8% | \n
| \n European Union | \n\n 1,435 | \n\n 32% | \n\n 1,645 | \n\n 34% | \n
| \n Europe - Other | \n\n 91 | \n\n 2% | \n\n 108 | \n\n 2% | \n
| \n United States | \n\n 839 | \n\n 18% | \n\n 830 | \n\n 17% | \n
| \n Canada | \n\n 58 | \n\n 1% | \n\n 58 | \n\n 1% | \n
| \n North America | \n\n 897 | \n\n 20% | \n\n 888 | \n\n 18% | \n
| \n Argentina | \n\n 42 | \n\n 1% | \n\n 39 | \n\n 1% | \n
| \n Chile | \n\n 85 | \n\n 2% | \n\n 68 | \n\n 1% | \n
| \n Brazil | \n\n 590 | \n\n 13% | \n\n 610 | \n\n 13% | \n
| \n Mexico | \n\n 118 | \n\n 3% | \n\n 156 | \n\n 3% | \n
| \n Latin America - Other | \n\n 49 | \n\n 1% | \n\n 42 | \n\n 1% | \n
| \n Latin America | \n\n 882 | \n\n 19% | \n\n 914 | \n\n 19% | \n
| \n Australia | \n\n 24 | \n\n 1% | \n\n 27 | \n\n 1% | \n
| \n China | \n\n 284 | \n\n 6% | \n\n 298 | \n\n 6% | \n
| \n Egypt | \n\n 35 | \n\n 1% | \n\n 43 | \n\n 1% | \n
| \n India | \n\n 43 | \n\n 1% | \n\n 55 | \n\n 1% | \n
| \n Indonesia | \n\n 60 | \n\n 1% | \n\n 65 | \n\n 1% | \n
| \n Israel | \n\n 41 | \n\n 1% | \n\n 34 | \n\n 1% | \n
| \n Japan | \n\n 73 | \n\n 2% | \n\n 100 | \n\n 2% | \n
| \n Malaysia | \n\n 71 | \n\n 2% | \n\n 66 | \n\n 1% | \n
| \n Philippines | \n\n 21 | \n\n 0% | \n\n 17 | \n\n 0% | \n
| \n Saudi Arabia | \n\n 111 | \n\n 2% | \n\n 99 | \n\n 2% | \n
| \n South Africa | \n\n 20 | \n\n 0% | \n\n 32 | \n\n 1% | \n
| \n South Korea | \n\n 97 | \n\n 2% | \n\n 115 | \n\n 2% | \n
| \n Thailand | \n\n 134 | \n\n 3% | \n\n 138 | \n\n 3% | \n
| \n Turkey | \n\n 37 | \n\n 1% | \n\n 38 | \n\n 1% | \n
| \n Vietnam | \n\n 38 | \n\n 1% | \n\n 48 | \n\n 1% | \n
| \n Other | \n\n 147 | \n\n 3% | \n\n 149 | \n\n 3% | \n
| \n Asia and rest of the world | \n\n 1,235 | \n\n 27% | \n\n 1,325 | \n\n 27% | \n
| \n Total | \n\n 4,540 | \n\n 100% | \n\n 4,880 | \n\n 100% | \n
| \n 2024 - In \u20ac million | \n\n Basic Chemicals | \n\n Performance Chemicals | \n\n Corporate | \n\n Group Total | \n
|---|---|---|---|---|
| \n Income statement items | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Sales | \n\n 3,218 | \n\n 1,877 | \n\n 35 | \n\n 5,130 | \n
| \n of which | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Net sales (including inter-segment sales) | \n\n 2,706 | \n\n 1,834 | \n\n 10 | \n\n 4,550 | \n
| \n \u2022Inter-segment sales | \n\n -10 | \n\n 0 | \n\n 0 | \n\n -10 | \n
| \n Net sales | \n\n 2,695 | \n\n 1,834 | \n\n 10 | \n\n 4,540 | \n
| \n Revenue from non-core activities | \n\n 523 | \n\n 43 | \n\n 25 | \n\n 590 | \n
| \n Gross margin | \n\n 735 | \n\n 404 | \n\n 7 | \n\n 1,146 | \n
| \n Depreciation and amortization | \n\n 221 | \n\n 106 | \n\n 34 | \n\n 362 | \n
| \n Earnings from associates and joint ventures | \n\n 38 | \n\n 1 | \n\n 0 | \n\n 38 | \n
| \n Underlying EBITDA(1) | \n\n 786 | \n\n 324 | \n\n -58 | \n\n 1,052 | \n
| \n EBIT | \n\n 499 | \n\n 165 | \n\n -230 | \n\n 433 | \n
| \n Net financial charges | \n\n \n | \n\n \n | \n\n \n | \n\n -113 | \n
| \n Income taxes | \n\n \n | \n\n \n | \n\n \n | \n\n -87 | \n
| \n Profit for the year from discontinued operations | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Profit/(loss) for the year | \n\n \n | \n\n \n | \n\n \n | \n\n 233 | \n
| \n 31 December 2024 - In \u20ac million | \n\n Basic Chemicals | \n\n Performance Chemicals | \n\n Corporate | \n\n Group Total | \n
|---|---|---|---|---|
| \n Statement of financial position and other items | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Capital expenditures(2) | \n\n 226 | \n\n 90 | \n\n 33 | \n\n 349 | \n
| \n Investments | \n\n 5 | \n\n 0 | \n\n 8 | \n\n 13 | \n
| \n Working capital | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n \u2022Inventories | \n\n 311 | \n\n 293 | \n\n 19 | \n\n 623 | \n
| \n \u2022Trade receivables | \n\n 496 | \n\n 212 | \n\n 118 | \n\n 826 | \n
| \n \u2022Trade payables | \n\n 452 | \n\n 247 | \n\n 111 | \n\n 810 | \n
| \n 2023 - In \u20ac million | \n\n Basic Chemicals | \n\n Performance Chemicals | \n\n Corporate | \n\n Group Total | \n
|---|---|---|---|---|
| \n Income statement items | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Sales | \n\n 3,411 | \n\n 2,068 | \n\n 544 | \n\n 6,024 | \n
| \n of which | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Net sales (including inter-segment sales) | \n\n 2,886 | \n\n 2,043 | \n\n 6 | \n\n 4,935 | \n
| \n \u2022Inter-segment sales | \n\n -51 | \n\n -4 | \n\n 0 | \n\n -55 | \n
| \n Net sales | \n\n 2,835 | \n\n 2,039 | \n\n 6 | \n\n 4,880 | \n
| \n Revenue from non-core activities | \n\n 577 | \n\n 29 | \n\n 538 | \n\n 1,144 | \n
| \n Gross margin | \n\n 887 | \n\n 449 | \n\n 46 | \n\n 1,382 | \n
| \n Depreciation and amortization | \n\n 185 | \n\n 163 | \n\n 69 | \n\n 418 | \n
| \n Earnings from associates and joint ventures | \n\n 45 | \n\n 0 | \n\n 8 | \n\n 53 | \n
| \n Underlying EBITDA(1) | \n\n 950 | \n\n 371 | \n\n -75 | \n\n 1,246 | \n
| \n EBIT | \n\n 739 | \n\n 159 | \n\n -620 | \n\n 278 | \n
| \n Net financial charges | \n\n \n | \n\n \n | \n\n \n | \n\n -98 | \n
| \n Income taxes | \n\n \n | \n\n \n | \n\n \n | \n\n -208 | \n
| \n Profit for the year from discontinued operations | \n\n \n | \n\n \n | \n\n \n | \n\n 2,132 | \n
| \n Profit/(loss) for the year | \n\n \n | \n\n \n | \n\n \n | \n\n 2,105 | \n
| \n 31 December 2023 - In \u20ac million | \n\n Basic Chemicals | \n\n Performance Chemicals | \n\n Corporate | \n\n Group Total | \n
|---|---|---|---|---|
| \n Statement of financial position and other items | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Capital expenditures(2) | \n\n 294 | \n\n 120 | \n\n 35 | \n\n 450 | \n
| \n Investments(3) | \n\n 4 | \n\n 5 | \n\n -427 | \n\n -418 | \n
| \n Working capital | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n \u2022Inventories | \n\n 332 | \n\n 282 | \n\n 28 | \n\n 642 | \n
| \n \u2022Trade receivables | \n\n 476 | \n\n 247 | \n\n 118 | \n\n 841 | \n
| \n \u2022Trade payables | \n\n 419 | \n\n 253 | \n\n 181 | \n\n 853 | \n
(1)Underlying EBITDA is a key performance indicator followed by management and includes other elements than those presented above. See below for the reconciliation between Underlying EBITDA and EBIT. See Business Performance section for reconciliation of other Underlying measures with IFRS figures.
(2)Capital expenditures from continuing operations include acquisitions of property, plant and equipment, acquisition of intangible assets and acquisition of Right of use assets.
(3)The negative figure of \u20ac(427) million relates to RusVinyl sale of investment.
NOTE F3
Revenue from non-core activities
This revenue primarily comprises commodity and utility third party transactions, non-core licensing transactions, and other revenue, considered not to correspond to Solvay\u2019s core business (mainly in France and Italy).
In 2024, the non-core sales mainly include \u20ac469 million of sale of utilities, and \u20ac25 million of licensing transactions.
In 2023, this revenue primarily comprised commodity and utility third party transactions, mainly in France and Italy.
The decrease in 2024 compared to 2023 is mainly related to phasing out the Energy business and the rest from the decrease of utilities price.
NOTE F1
Revenue and segment information
fAccounting policy
IFRS 15 establishes a five-step model to account for revenue arising from contracts with customers:
\u2022Identify the contract,
\u2022Identify the performance obligations,
\u2022Determine the transaction price,
\u2022Allocate the transaction price to the performance obligations in the contract, and
\u2022Recognize revenue when or as the Group satisfies a performance obligation.
Under IFRS 15, revenue is recognized at an amount that reflects the consideration to which the Group expects to be entitled in exchange for transferring goods or services to a customer.
Sale of goods: Contracts can be short term (including based only on a purchase order) or long term, some have minimum off-take requirements. Contracts that contain take-or-pay provisions obligate customers to pay shortfall payments if the required volumes, as defined in the contracts, are not purchased. Shortfall payments are recognized as revenues when the likelihood of the customer purchasing the minimum volume becomes remote subject to renegotiation of the contract and collectability. As the Group is in the business of selling essential chemicals, and performance chemicals, contracts with customers generally concern the sale of goods. As a result, revenue recognition generally occurs at a point in time when control of the chemicals is transferred to the customer, generally on delivery of the goods.
Distinct elements: a good or service that is promised to a customer is distinct if both of the following criteria are met: (a) the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e. The good or service is capable of being distinct); and (b) the Group\u2019s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e. The promise to transfer the good or service is distinct within the context of the contract).
The revenue of the Group consists mainly of sales of chemicals, which qualify as separate performance obligations. Value-added services \u2013 mainly customer assistance services \u2013 corresponding to Solvay\u2019s know-how are rendered predominantly over the period that the corresponding goods are sold to the customer.
Variable consideration: some contracts with customers provide trade discounts or volume rebates. Trade discounts and volume rebates give rise to variable consideration under IFRS 15 and are required to be estimated at contract inception and subsequently at each reporting date. IFRS 15 requires the estimated variable consideration to be constrained to prevent overstatement of revenue.
Moment of recognition of revenue: revenue is recognized when (or as) the Group satisfies a performance obligation by transferring a promised good or service (i.e. an asset) to a customer. An asset is transferred when (or as) the customer obtains control of that asset. Substantially all revenue stems from performance obligations satisfied at a point in time, i.e. The sale of goods. Revenue recognition for those takes into account the following:
\u2022The Group has a present right to payment for the asset;
\u2022The customer has legal title to the asset;
\u2022The Group has transferred physical possession of the asset;
\u2022The customer has the significant risks and rewards of ownership of the asset (in this respect, incoterms are considered); and
\u2022The customer has accepted the asset.
Products sold to customers generally cannot be returned, other than for performance deficiencies. Customer acceptance clauses are in many cases a formality that would not affect the Group\u2019s determination of when the customer has obtained control of the goods. Revenue from services is recognized in the period those services have been rendered.
The Group sells its products to its customers, (a) directly, (b) through distributors, and (c) with the assistance of agents. When the Group delivers a product to distributors for sale to end customers, the Group evaluates whether that distributor has obtained control of the product at that point in time. No revenue is recognized upon delivery of a product to a customer or distributor if the delivered product is held on consignment. Indicators of consignment inventory include:
\u2022The product is controlled by the Group until a specified event occurs, such as the sale of the product to a customer of the distributor or until a specified period expires;
\u2022The Group is able to require the return of the product or transfer the product to a third party (such as another distributor); and
\u2022The distributor does not have an unconditional obligation to pay for the product (although they might be required to pay a deposit).
\u2022Agents facilitate sales and do not purchase and resell the goods to the end customer.
Warranties: warranties provide a customer with assurance that the related product will function as the parties intended because it complies with agreed-upon specifications. Substantially all warranties do not provide the customer with a service in addition to the assurance that the product complies with agreed-upon specifications and are hence accounted for in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
Licensing: In case of performance obligations relating to licensing intellectual property (IP), the Group assesses if it grants a right to access the IP as it exists throughout the license period or a right to use the IP as it exists at the point in time at which the license is granted. If the performance obligation is to grant a right to access, then the related revenue is recognized over the license period; otherwise, it is recognized at a point in time, i.e. when the license period starts or when the customer starts using the IP. The Group assesses if the license provided can be considered as being distinct in the context of the contract. If not, the license will have to be bundled with other goods or services provided in the contract. Currently the Group grants a right to use IP, which means that revenue recognition occurs at a point in time.
An Operating Segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the entity\u2019s chief operating decision maker and for which discrete financial information is available.
NOTE F1
Revenue and segment information
fAccounting policy
IFRS 15 establishes a five-step model to account for revenue arising from contracts with customers:
\u2022Identify the contract,
\u2022Identify the performance obligations,
\u2022Determine the transaction price,
\u2022Allocate the transaction price to the performance obligations in the contract, and
\u2022Recognize revenue when or as the Group satisfies a performance obligation.
Under IFRS 15, revenue is recognized at an amount that reflects the consideration to which the Group expects to be entitled in exchange for transferring goods or services to a customer.
Sale of goods: Contracts can be short term (including based only on a purchase order) or long term, some have minimum off-take requirements. Contracts that contain take-or-pay provisions obligate customers to pay shortfall payments if the required volumes, as defined in the contracts, are not purchased. Shortfall payments are recognized as revenues when the likelihood of the customer purchasing the minimum volume becomes remote subject to renegotiation of the contract and collectability. As the Group is in the business of selling essential chemicals, and performance chemicals, contracts with customers generally concern the sale of goods. As a result, revenue recognition generally occurs at a point in time when control of the chemicals is transferred to the customer, generally on delivery of the goods.
Distinct elements: a good or service that is promised to a customer is distinct if both of the following criteria are met: (a) the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e. The good or service is capable of being distinct); and (b) the Group\u2019s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e. The promise to transfer the good or service is distinct within the context of the contract).
The revenue of the Group consists mainly of sales of chemicals, which qualify as separate performance obligations. Value-added services \u2013 mainly customer assistance services \u2013 corresponding to Solvay\u2019s know-how are rendered predominantly over the period that the corresponding goods are sold to the customer.
Variable consideration: some contracts with customers provide trade discounts or volume rebates. Trade discounts and volume rebates give rise to variable consideration under IFRS 15 and are required to be estimated at contract inception and subsequently at each reporting date. IFRS 15 requires the estimated variable consideration to be constrained to prevent overstatement of revenue.
Moment of recognition of revenue: revenue is recognized when (or as) the Group satisfies a performance obligation by transferring a promised good or service (i.e. an asset) to a customer. An asset is transferred when (or as) the customer obtains control of that asset. Substantially all revenue stems from performance obligations satisfied at a point in time, i.e. The sale of goods. Revenue recognition for those takes into account the following:
\u2022The Group has a present right to payment for the asset;
\u2022The customer has legal title to the asset;
\u2022The Group has transferred physical possession of the asset;
\u2022The customer has the significant risks and rewards of ownership of the asset (in this respect, incoterms are considered); and
\u2022The customer has accepted the asset.
Products sold to customers generally cannot be returned, other than for performance deficiencies. Customer acceptance clauses are in many cases a formality that would not affect the Group\u2019s determination of when the customer has obtained control of the goods. Revenue from services is recognized in the period those services have been rendered.
The Group sells its products to its customers, (a) directly, (b) through distributors, and (c) with the assistance of agents. When the Group delivers a product to distributors for sale to end customers, the Group evaluates whether that distributor has obtained control of the product at that point in time. No revenue is recognized upon delivery of a product to a customer or distributor if the delivered product is held on consignment. Indicators of consignment inventory include:
\u2022The product is controlled by the Group until a specified event occurs, such as the sale of the product to a customer of the distributor or until a specified period expires;
\u2022The Group is able to require the return of the product or transfer the product to a third party (such as another distributor); and
\u2022The distributor does not have an unconditional obligation to pay for the product (although they might be required to pay a deposit).
\u2022Agents facilitate sales and do not purchase and resell the goods to the end customer.
Warranties: warranties provide a customer with assurance that the related product will function as the parties intended because it complies with agreed-upon specifications. Substantially all warranties do not provide the customer with a service in addition to the assurance that the product complies with agreed-upon specifications and are hence accounted for in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
Licensing: In case of performance obligations relating to licensing intellectual property (IP), the Group assesses if it grants a right to access the IP as it exists throughout the license period or a right to use the IP as it exists at the point in time at which the license is granted. If the performance obligation is to grant a right to access, then the related revenue is recognized over the license period; otherwise, it is recognized at a point in time, i.e. when the license period starts or when the customer starts using the IP. The Group assesses if the license provided can be considered as being distinct in the context of the contract. If not, the license will have to be bundled with other goods or services provided in the contract. Currently the Group grants a right to use IP, which means that revenue recognition occurs at a point in time.
An Operating Segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the entity\u2019s chief operating decision maker and for which discrete financial information is available.
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Soda Ash & Derivatives | \n\n 1,907 | \n\n 2,093 | \n
| \n Peroxides | \n\n 789 | \n\n 742 | \n
| \n Basic Chemicals | \n\n 2,695 | \n\n 2,835 | \n
| \n Silica | \n\n 543 | \n\n 583 | \n
| \n Coatis | \n\n 631 | \n\n 646 | \n
| \n Special Chem | \n\n 660 | \n\n 810 | \n
| \n Performance Chemicals | \n\n 1,834 | \n\n 2,039 | \n
| \n CBS | \n\n 10 | \n\n 6 | \n
| \n Corporate | \n\n 10 | \n\n 6 | \n
| \n Total | \n\n 4,540 | \n\n 4,880 | \n
There are no individual customers that contribute 10% or more to the Group\u2019s revenue or any individual segment\u2019s revenue in either 2024 or 2023.
The non-core revenue is disclosed in Note F3 Revenue from non-core activities.
Sales by market are presented in the Business Performance section - see note P1.
The net sales disclosed below are allocated based on the customers\u2019 location.
| \n In \u20ac million | \n\n 2024 | \n\n % | \n\n 2023 | \n\n % | \n
|---|---|---|---|---|
| \n Belgium | \n\n 100 | \n\n 2% | \n\n 93 | \n\n 2% | \n
| \n Germany | \n\n 390 | \n\n 9% | \n\n 449 | \n\n 9% | \n
| \n Italy | \n\n 221 | \n\n 5% | \n\n 267 | \n\n 5% | \n
| \n France | \n\n 212 | \n\n 5% | \n\n 236 | \n\n 5% | \n
| \n Netherlands | \n\n 37 | \n\n 1% | \n\n 55 | \n\n 1% | \n
| \n Spain | \n\n 96 | \n\n 2% | \n\n 130 | \n\n 3% | \n
| \n European Union - Other | \n\n 379 | \n\n 8% | \n\n 414 | \n\n 8% | \n
| \n European Union | \n\n 1,435 | \n\n 32% | \n\n 1,645 | \n\n 34% | \n
| \n Europe - Other | \n\n 91 | \n\n 2% | \n\n 108 | \n\n 2% | \n
| \n United States | \n\n 839 | \n\n 18% | \n\n 830 | \n\n 17% | \n
| \n Canada | \n\n 58 | \n\n 1% | \n\n 58 | \n\n 1% | \n
| \n North America | \n\n 897 | \n\n 20% | \n\n 888 | \n\n 18% | \n
| \n Argentina | \n\n 42 | \n\n 1% | \n\n 39 | \n\n 1% | \n
| \n Chile | \n\n 85 | \n\n 2% | \n\n 68 | \n\n 1% | \n
| \n Brazil | \n\n 590 | \n\n 13% | \n\n 610 | \n\n 13% | \n
| \n Mexico | \n\n 118 | \n\n 3% | \n\n 156 | \n\n 3% | \n
| \n Latin America - Other | \n\n 49 | \n\n 1% | \n\n 42 | \n\n 1% | \n
| \n Latin America | \n\n 882 | \n\n 19% | \n\n 914 | \n\n 19% | \n
| \n Australia | \n\n 24 | \n\n 1% | \n\n 27 | \n\n 1% | \n
| \n China | \n\n 284 | \n\n 6% | \n\n 298 | \n\n 6% | \n
| \n Egypt | \n\n 35 | \n\n 1% | \n\n 43 | \n\n 1% | \n
| \n India | \n\n 43 | \n\n 1% | \n\n 55 | \n\n 1% | \n
| \n Indonesia | \n\n 60 | \n\n 1% | \n\n 65 | \n\n 1% | \n
| \n Israel | \n\n 41 | \n\n 1% | \n\n 34 | \n\n 1% | \n
| \n Japan | \n\n 73 | \n\n 2% | \n\n 100 | \n\n 2% | \n
| \n Malaysia | \n\n 71 | \n\n 2% | \n\n 66 | \n\n 1% | \n
| \n Philippines | \n\n 21 | \n\n 0% | \n\n 17 | \n\n 0% | \n
| \n Saudi Arabia | \n\n 111 | \n\n 2% | \n\n 99 | \n\n 2% | \n
| \n South Africa | \n\n 20 | \n\n 0% | \n\n 32 | \n\n 1% | \n
| \n South Korea | \n\n 97 | \n\n 2% | \n\n 115 | \n\n 2% | \n
| \n Thailand | \n\n 134 | \n\n 3% | \n\n 138 | \n\n 3% | \n
| \n Turkey | \n\n 37 | \n\n 1% | \n\n 38 | \n\n 1% | \n
| \n Vietnam | \n\n 38 | \n\n 1% | \n\n 48 | \n\n 1% | \n
| \n Other | \n\n 147 | \n\n 3% | \n\n 149 | \n\n 3% | \n
| \n Asia and rest of the world | \n\n 1,235 | \n\n 27% | \n\n 1,325 | \n\n 27% | \n
| \n Total | \n\n 4,540 | \n\n 100% | \n\n 4,880 | \n\n 100% | \n
| \n 2024 - In \u20ac million | \n\n Basic Chemicals | \n\n Performance Chemicals | \n\n Corporate | \n\n Group Total | \n
|---|---|---|---|---|
| \n Income statement items | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Sales | \n\n 3,218 | \n\n 1,877 | \n\n 35 | \n\n 5,130 | \n
| \n of which | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Net sales (including inter-segment sales) | \n\n 2,706 | \n\n 1,834 | \n\n 10 | \n\n 4,550 | \n
| \n \u2022Inter-segment sales | \n\n -10 | \n\n 0 | \n\n 0 | \n\n -10 | \n
| \n Net sales | \n\n 2,695 | \n\n 1,834 | \n\n 10 | \n\n 4,540 | \n
| \n Revenue from non-core activities | \n\n 523 | \n\n 43 | \n\n 25 | \n\n 590 | \n
| \n Gross margin | \n\n 735 | \n\n 404 | \n\n 7 | \n\n 1,146 | \n
| \n Depreciation and amortization | \n\n 221 | \n\n 106 | \n\n 34 | \n\n 362 | \n
| \n Earnings from associates and joint ventures | \n\n 38 | \n\n 1 | \n\n 0 | \n\n 38 | \n
| \n Underlying EBITDA(1) | \n\n 786 | \n\n 324 | \n\n -58 | \n\n 1,052 | \n
| \n EBIT | \n\n 499 | \n\n 165 | \n\n -230 | \n\n 433 | \n
| \n Net financial charges | \n\n \n | \n\n \n | \n\n \n | \n\n -113 | \n
| \n Income taxes | \n\n \n | \n\n \n | \n\n \n | \n\n -87 | \n
| \n Profit for the year from discontinued operations | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Profit/(loss) for the year | \n\n \n | \n\n \n | \n\n \n | \n\n 233 | \n
| \n 31 December 2024 - In \u20ac million | \n\n Basic Chemicals | \n\n Performance Chemicals | \n\n Corporate | \n\n Group Total | \n
|---|---|---|---|---|
| \n Statement of financial position and other items | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Capital expenditures(2) | \n\n 226 | \n\n 90 | \n\n 33 | \n\n 349 | \n
| \n Investments | \n\n 5 | \n\n 0 | \n\n 8 | \n\n 13 | \n
| \n Working capital | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n \u2022Inventories | \n\n 311 | \n\n 293 | \n\n 19 | \n\n 623 | \n
| \n \u2022Trade receivables | \n\n 496 | \n\n 212 | \n\n 118 | \n\n 826 | \n
| \n \u2022Trade payables | \n\n 452 | \n\n 247 | \n\n 111 | \n\n 810 | \n
| \n 2023 - In \u20ac million | \n\n Basic Chemicals | \n\n Performance Chemicals | \n\n Corporate | \n\n Group Total | \n
|---|---|---|---|---|
| \n Income statement items | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Sales | \n\n 3,411 | \n\n 2,068 | \n\n 544 | \n\n 6,024 | \n
| \n of which | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Net sales (including inter-segment sales) | \n\n 2,886 | \n\n 2,043 | \n\n 6 | \n\n 4,935 | \n
| \n \u2022Inter-segment sales | \n\n -51 | \n\n -4 | \n\n 0 | \n\n -55 | \n
| \n Net sales | \n\n 2,835 | \n\n 2,039 | \n\n 6 | \n\n 4,880 | \n
| \n Revenue from non-core activities | \n\n 577 | \n\n 29 | \n\n 538 | \n\n 1,144 | \n
| \n Gross margin | \n\n 887 | \n\n 449 | \n\n 46 | \n\n 1,382 | \n
| \n Depreciation and amortization | \n\n 185 | \n\n 163 | \n\n 69 | \n\n 418 | \n
| \n Earnings from associates and joint ventures | \n\n 45 | \n\n 0 | \n\n 8 | \n\n 53 | \n
| \n Underlying EBITDA(1) | \n\n 950 | \n\n 371 | \n\n -75 | \n\n 1,246 | \n
| \n EBIT | \n\n 739 | \n\n 159 | \n\n -620 | \n\n 278 | \n
| \n Net financial charges | \n\n \n | \n\n \n | \n\n \n | \n\n -98 | \n
| \n Income taxes | \n\n \n | \n\n \n | \n\n \n | \n\n -208 | \n
| \n Profit for the year from discontinued operations | \n\n \n | \n\n \n | \n\n \n | \n\n 2,132 | \n
| \n Profit/(loss) for the year | \n\n \n | \n\n \n | \n\n \n | \n\n 2,105 | \n
| \n 31 December 2023 - In \u20ac million | \n\n Basic Chemicals | \n\n Performance Chemicals | \n\n Corporate | \n\n Group Total | \n
|---|---|---|---|---|
| \n Statement of financial position and other items | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Capital expenditures(2) | \n\n 294 | \n\n 120 | \n\n 35 | \n\n 450 | \n
| \n Investments(3) | \n\n 4 | \n\n 5 | \n\n -427 | \n\n -418 | \n
| \n Working capital | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n \u2022Inventories | \n\n 332 | \n\n 282 | \n\n 28 | \n\n 642 | \n
| \n \u2022Trade receivables | \n\n 476 | \n\n 247 | \n\n 118 | \n\n 841 | \n
| \n \u2022Trade payables | \n\n 419 | \n\n 253 | \n\n 181 | \n\n 853 | \n
(1)Underlying EBITDA is a key performance indicator followed by management and includes other elements than those presented above. See below for the reconciliation between Underlying EBITDA and EBIT. See Business Performance section for reconciliation of other Underlying measures with IFRS figures.
(2)Capital expenditures from continuing operations include acquisitions of property, plant and equipment, acquisition of intangible assets and acquisition of Right of use assets.
(3)The negative figure of \u20ac(427) million relates to RusVinyl sale of investment.
NOTE F3
Revenue from non-core activities
This revenue primarily comprises commodity and utility third party transactions, non-core licensing transactions, and other revenue, considered not to correspond to Solvay\u2019s core business (mainly in France and Italy).
In 2024, the non-core sales mainly include \u20ac469 million of sale of utilities, and \u20ac25 million of licensing transactions.
In 2023, this revenue primarily comprised commodity and utility third party transactions, mainly in France and Italy.
The decrease in 2024 compared to 2023 is mainly related to phasing out the Energy business and the rest from the decrease of utilities price.
NOTE F1
Revenue and segment information
fAccounting policy
IFRS 15 establishes a five-step model to account for revenue arising from contracts with customers:
\u2022Identify the contract,
\u2022Identify the performance obligations,
\u2022Determine the transaction price,
\u2022Allocate the transaction price to the performance obligations in the contract, and
\u2022Recognize revenue when or as the Group satisfies a performance obligation.
Under IFRS 15, revenue is recognized at an amount that reflects the consideration to which the Group expects to be entitled in exchange for transferring goods or services to a customer.
Sale of goods: Contracts can be short term (including based only on a purchase order) or long term, some have minimum off-take requirements. Contracts that contain take-or-pay provisions obligate customers to pay shortfall payments if the required volumes, as defined in the contracts, are not purchased. Shortfall payments are recognized as revenues when the likelihood of the customer purchasing the minimum volume becomes remote subject to renegotiation of the contract and collectability. As the Group is in the business of selling essential chemicals, and performance chemicals, contracts with customers generally concern the sale of goods. As a result, revenue recognition generally occurs at a point in time when control of the chemicals is transferred to the customer, generally on delivery of the goods.
Distinct elements: a good or service that is promised to a customer is distinct if both of the following criteria are met: (a) the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e. The good or service is capable of being distinct); and (b) the Group\u2019s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e. The promise to transfer the good or service is distinct within the context of the contract).
The revenue of the Group consists mainly of sales of chemicals, which qualify as separate performance obligations. Value-added services \u2013 mainly customer assistance services \u2013 corresponding to Solvay\u2019s know-how are rendered predominantly over the period that the corresponding goods are sold to the customer.
Variable consideration: some contracts with customers provide trade discounts or volume rebates. Trade discounts and volume rebates give rise to variable consideration under IFRS 15 and are required to be estimated at contract inception and subsequently at each reporting date. IFRS 15 requires the estimated variable consideration to be constrained to prevent overstatement of revenue.
Moment of recognition of revenue: revenue is recognized when (or as) the Group satisfies a performance obligation by transferring a promised good or service (i.e. an asset) to a customer. An asset is transferred when (or as) the customer obtains control of that asset. Substantially all revenue stems from performance obligations satisfied at a point in time, i.e. The sale of goods. Revenue recognition for those takes into account the following:
\u2022The Group has a present right to payment for the asset;
\u2022The customer has legal title to the asset;
\u2022The Group has transferred physical possession of the asset;
\u2022The customer has the significant risks and rewards of ownership of the asset (in this respect, incoterms are considered); and
\u2022The customer has accepted the asset.
Products sold to customers generally cannot be returned, other than for performance deficiencies. Customer acceptance clauses are in many cases a formality that would not affect the Group\u2019s determination of when the customer has obtained control of the goods. Revenue from services is recognized in the period those services have been rendered.
The Group sells its products to its customers, (a) directly, (b) through distributors, and (c) with the assistance of agents. When the Group delivers a product to distributors for sale to end customers, the Group evaluates whether that distributor has obtained control of the product at that point in time. No revenue is recognized upon delivery of a product to a customer or distributor if the delivered product is held on consignment. Indicators of consignment inventory include:
\u2022The product is controlled by the Group until a specified event occurs, such as the sale of the product to a customer of the distributor or until a specified period expires;
\u2022The Group is able to require the return of the product or transfer the product to a third party (such as another distributor); and
\u2022The distributor does not have an unconditional obligation to pay for the product (although they might be required to pay a deposit).
\u2022Agents facilitate sales and do not purchase and resell the goods to the end customer.
Warranties: warranties provide a customer with assurance that the related product will function as the parties intended because it complies with agreed-upon specifications. Substantially all warranties do not provide the customer with a service in addition to the assurance that the product complies with agreed-upon specifications and are hence accounted for in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
Licensing: In case of performance obligations relating to licensing intellectual property (IP), the Group assesses if it grants a right to access the IP as it exists throughout the license period or a right to use the IP as it exists at the point in time at which the license is granted. If the performance obligation is to grant a right to access, then the related revenue is recognized over the license period; otherwise, it is recognized at a point in time, i.e. when the license period starts or when the customer starts using the IP. The Group assesses if the license provided can be considered as being distinct in the context of the contract. If not, the license will have to be bundled with other goods or services provided in the contract. Currently the Group grants a right to use IP, which means that revenue recognition occurs at a point in time.
An Operating Segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the entity\u2019s chief operating decision maker and for which discrete financial information is available.
| \n 2024 - In \u20ac million | \n\n Basic Chemicals | \n\n Performance Chemicals | \n\n Corporate | \n\n Group Total | \n
|---|---|---|---|---|
| \n Income statement items | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Sales | \n\n 3,218 | \n\n 1,877 | \n\n 35 | \n\n 5,130 | \n
| \n of which | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Net sales (including inter-segment sales) | \n\n 2,706 | \n\n 1,834 | \n\n 10 | \n\n 4,550 | \n
| \n \u2022Inter-segment sales | \n\n -10 | \n\n 0 | \n\n 0 | \n\n -10 | \n
| \n Net sales | \n\n 2,695 | \n\n 1,834 | \n\n 10 | \n\n 4,540 | \n
| \n Revenue from non-core activities | \n\n 523 | \n\n 43 | \n\n 25 | \n\n 590 | \n
| \n Gross margin | \n\n 735 | \n\n 404 | \n\n 7 | \n\n 1,146 | \n
| \n Depreciation and amortization | \n\n 221 | \n\n 106 | \n\n 34 | \n\n 362 | \n
| \n Earnings from associates and joint ventures | \n\n 38 | \n\n 1 | \n\n 0 | \n\n 38 | \n
| \n Underlying EBITDA(1) | \n\n 786 | \n\n 324 | \n\n -58 | \n\n 1,052 | \n
| \n EBIT | \n\n 499 | \n\n 165 | \n\n -230 | \n\n 433 | \n
| \n Net financial charges | \n\n \n | \n\n \n | \n\n \n | \n\n -113 | \n
| \n Income taxes | \n\n \n | \n\n \n | \n\n \n | \n\n -87 | \n
| \n Profit for the year from discontinued operations | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Profit/(loss) for the year | \n\n \n | \n\n \n | \n\n \n | \n\n 233 | \n
| \n 31 December 2024 - In \u20ac million | \n\n Basic Chemicals | \n\n Performance Chemicals | \n\n Corporate | \n\n Group Total | \n
|---|---|---|---|---|
| \n Statement of financial position and other items | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Capital expenditures(2) | \n\n 226 | \n\n 90 | \n\n 33 | \n\n 349 | \n
| \n Investments | \n\n 5 | \n\n 0 | \n\n 8 | \n\n 13 | \n
| \n Working capital | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n \u2022Inventories | \n\n 311 | \n\n 293 | \n\n 19 | \n\n 623 | \n
| \n \u2022Trade receivables | \n\n 496 | \n\n 212 | \n\n 118 | \n\n 826 | \n
| \n \u2022Trade payables | \n\n 452 | \n\n 247 | \n\n 111 | \n\n 810 | \n
| \n 2024 - In \u20ac million | \n\n Basic Chemicals | \n\n Performance Chemicals | \n\n Corporate | \n\n Group Total | \n
|---|---|---|---|---|
| \n EBIT | \n\n 499 | \n\n 165 | \n\n -230 | \n\n 433 | \n
| \n Administrative costs | \n\n \n | \n\n \n | \n\n -5 | \n\n -5 | \n
| \n Other costs | \n\n \n | \n\n \n | \n\n -11 | \n\n -11 | \n
| \n Other operating gains and (losses) | \n\n \n | \n\n \n | \n\n 89 | \n\n 89 | \n
| \n Earnings from joint venture Peroxidos do Brazil | \n\n -34 | \n\n \n | \n\n \n | \n\n -34 | \n
| \n Proportional consolidation of Peroxidos do Brazil | \n\n 52 | \n\n \n | \n\n \n | \n\n 52 | \n
| \n Depreciation and amortization | \n\n 205 | \n\n 85 | \n\n 30 | \n\n 320 | \n
| \n Results from portfolio management and major restructuring and results from legacy remediation and major litigations | \n\n 64 | \n\n 74 | \n\n 68 | \n\n 207 | \n
| \n Underlying EBITDA | \n\n 786 | \n\n 324 | \n\n -58 | \n\n 1,052 | \n
Other costs relate to energy-sold activity.
The other operating gains and losses primarily consist of the CO2 hedge management result (\u20ac69 million) and major change in environmental provisions at open sites (\u20ac15 million).
The reconciling items related to i) Earnings from associates and joint ventures, and ii) Proportional consolidation of Peroxidos do Brasil are linked to the change in Adjustments as explained in the Glossary.
For the reconciliation items \u201cResult from portfolio management and major restructuring and results from legacy remediation and major litigations,\u201d see note F5.
The item depreciation and amortization exclude \u20ac41 million consisting of \u20ac5 million of the non-cash impact of purchase price allocation (PPA), amortization charges on intangible assets, and \u20ac45 million to adjust for the impact of impairment of other non-cash generating assets and includes the depreciations and amortizations for \u20ac9 million related to Peroxidos do Brasil.
| \n 2023 - In \u20ac million | \n\n Basic Chemicals | \n\n Performance Chemicals | \n\n Corporate | \n\n Group Total | \n
|---|---|---|---|---|
| \n EBIT | \n\n 739 | \n\n 159 | \n\n -620 | \n\n 278 | \n
| \n Administrative costs | \n\n \n | \n\n \n | \n\n 68 | \n\n 68 | \n
| \n Other operating gains and (losses) | \n\n \n | \n\n \n | \n\n -14 | \n\n -14 | \n
| \n Earnings from associates and joint ventures | \n\n \n | \n\n \n | \n\n -7 | \n\n -7 | \n
| \n Depreciation and amortization | \n\n 184 | \n\n 101 | \n\n 36 | \n\n 321 | \n
| \n Results from portfolio management and major restructuring and results from legacy remediation and major litigations | \n\n 27 | \n\n 112 | \n\n 461 | \n\n 600 | \n
| \n Underlying EBITDA | \n\n 950 | \n\n 371 | \n\n -76 | \n\n 1,246 | \n
NOTE F2
Consolidated income statement by nature
| \n In \u20ac million | \n\n Notes | \n\n 2024 | \n\n 2023 | \n
|---|---|---|---|
| \n Net sales | \n\n (F1) | \n\n 4,540 | \n\n 4,880 | \n
| \n Revenue from non-core activities | \n\n (F3) | \n\n 590 | \n\n 1,145 | \n
| \n Raw materials. utilities and consumables used | \n\n \n | \n\n -2,208 | \n\n -2,802 | \n
| \n Changes in inventories | \n\n \n | \n\n -18 | \n\n -78 | \n
| \n Personnel expenses | \n\n \n | \n\n -823 | \n\n -835 | \n
| \n Wages and direct social benefits | \n\n \n | \n\n -615 | \n\n -623 | \n
| \n Employer's contribution for social insurance | \n\n \n | \n\n -157 | \n\n -163 | \n
| \n Pensions and insurance benefits | \n\n \n | \n\n -30 | \n\n -26 | \n
| \n Other personnel expenses | \n\n \n | \n\n -21 | \n\n -22 | \n
| \n Amortization. depreciation and impairment | \n\n (F11) | \n\n -362 | \n\n -423 | \n
| \n Other variable logistics expenses | \n\n \n | \n\n -615 | \n\n -568 | \n
| \n Other fixed expenses | \n\n \n | \n\n -445 | \n\n -412 | \n
| \n Addition and reversal of provisions (excluding employee benefit provisions) | \n\n (F31) | \n\n -235 | \n\n -279 | \n
| \n Significant income related to prior years | \n\n (F4) | \n\n 0 | \n\n 0 | \n
| \n M&A costs and gains and losses on disposals | \n\n (F5) | \n\n -29 | \n\n -404 | \n
| \n Earnings from associates and joint ventures | \n\n (F22) | \n\n 38 | \n\n 53 | \n
| \n EBIT | \n\n \n | \n\n 433 | \n\n 278 | \n
Other fixed expenses mainly include costs of services, licenses, and professional fees.
The change in raw materials, utilities, and consumables used is largely explained by the decrease in energy prices, and lower volume.
NOTE F11
Depreciation, amortization and\u00a0impairments
The table below presents the amounts of the total depreciation, amortization and impairment losses (reversals) of continuing operations included in the various headings of the Consolidated Statements of Income.
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Cost of goods sold | \n\n 267 | \n\n 269 | \n
| \n Administrative costs | \n\n 35 | \n\n 37 | \n
| \n Research and development costs | \n\n 9 | \n\n 12 | \n
| \n Other operating gains and (losses) | \n\n 6 | \n\n 10 | \n
| \n Of Which PPA (see Note F4) | \n\n 4 | \n\n 7 | \n
| \n Total depreciation and amortization | \n\n 317 | \n\n 328 | \n
| \n Goodwill Impairment | \n\n 0 | \n\n 38 | \n
| \n Other net Impairment | \n\n 45 | \n\n 57 | \n
| \n Total depreciation, amortization and impairment losses (reversal) | \n\n 362 | \n\n 423 | \n
Please refer to Note F5 Results from portfolio management and major restructurings, legacy remediation and major litigations for the details on impairment.
NOTE F18
Intangible assets
fAccounting policy
An intangible asset is an identifiable non-monetary asset without physical substance. It is identifiable when it is separable, i.e. Is capable of being separated or divided from the Group, or when it arises from contractual or other legal rights. An intangible asset shall be recognized if, and only if:
(a)it is probable that the expected future economic benefits that are attributable to the asset will flow to the Group; and
(b)the cost of the asset can be measured reliably.
Intangible assets acquired or developed internally are initially measured at cost. The cost of an acquired intangible asset comprises its purchase price, import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, and any directly attributable cost of preparing the asset for its intended use. Subsequent expenditure on intangible assets is capitalized only if it is probable that it will increase the future economic benefits associated with the specific asset. Other expenditure is expensed as incurred.
After initial recognition, intangible assets are measured at cost less accumulated amortization and impairment losses, if any.
Intangible assets are amortized on a straight-line basis over their estimated useful lives, which do not exceed the contractual period, if any. The estimated useful lives, residual values and amortization methods are reviewed at each year-end, and any changes in estimates are accounted for prospectively.
| \n Patents and trademarks | \n\n 2-20 | \n\n years | \n
|---|---|---|
| \n Software | \n\n 3-5 | \n\n years | \n
| \n Development expenditures | \n\n 2-5 | \n\n years | \n
| \n Customer relationships | \n\n 5-29 | \n\n years | \n
| \n Other intangible assets - Technologies | \n\n 5-20 | \n\n years | \n
Amortization expense is included in the consolidated income statement within the cost of goods sold, administrative costs, research and development costs and other operating gains and losses.
The asset is tested for impairment if (a) there is a trigger for impairment, and (b) annually for projects under development (see note F23 Impairment).
Intangible assets are derecognized from the consolidated statement of financial position on disposal or when no future economic benefits are expected from their use or disposal. The gain or loss arising from derecognition of an intangible asset is recognized in profit or loss at the moment of derecognition.
Research and development costs
Research costs are expensed in the period in which they are incurred.
Development costs are capitalized if, and only if, all the following conditions are fulfilled:
\u2022the cost of the asset can be reliably measured;
\u2022the technical feasibility of the product has been demonstrated;
\u2022the product or process will be placed on the market or used internally;
\u2022the assets will generate future economic benefits (a potential market exists for the product or, where it is to be used internally, its future utility has been demonstrated);
\u2022the technical, financial and other resources required to complete the project are available.
Development costs comprise employee expenses, the cost of materials and services directly attributable to the projects, and an appropriate share of directly attributable fixed costs including, and where applicable, borrowing costs. The intangible assets are amortized as from the moment they are available for use, i.e. When they are in the location and condition necessary for them to be capable of operating in the manner intended by management. Development costs, which do not satisfy the above conditions are expensed as incurred.
Patents, trademarks and customer relationships
Those intangible assets have mainly been acquired through business combinations. Customer relationships consist of customer lists.
Other intangible assets
Other intangible assets mainly include technology acquired separately or in a business combination.
| \n In \u20ac million | \n\n Development costs | \n\n Patents and trademarks | \n\n Customer relationships | \n\n Other intangible assets | \n\n Total | \n
|---|---|---|---|---|---|
| \n Gross carrying amount | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n 577 | \n\n 1,744 | \n\n 2,066 | \n\n 765 | \n\n 5,153 | \n
| \n Additions | \n\n 71 | \n\n 1 | \n\n \n | \n\n 33 | \n\n 105 | \n
| \n Disposals and closures | \n\n -66 | \n\n -74 | \n\n \n | \n\n -100 | \n\n -239 | \n
| \n Increase through business combinations | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n Currency translation differences | \n\n -3 | \n\n -25 | \n\n -37 | \n\n -14 | \n\n -80 | \n
| \n Partial Demerger | \n\n -482 | \n\n -1,079 | \n\n -1,781 | \n\n -582 | \n\n -3,924 | \n
| \n Other | \n\n 1 | \n\n 5 | \n\n \n | \n\n -10 | \n\n -4 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n December 31, 2023 | \n\n 98 | \n\n 572 | \n\n 248 | \n\n 92 | \n\n 1,010 | \n
| \n Additions | \n\n 9 | \n\n 0 | \n\n \n | \n\n 4 | \n\n 13 | \n
| \n Disposals and closures | \n\n -2 | \n\n 0 | \n\n \n | \n\n 0 | \n\n -3 | \n
| \n Increase through business combinations | \n\n 0 | \n\n 0 | \n\n \n | \n\n 3 | \n\n 3 | \n
| \n Currency translation differences | \n\n -1 | \n\n 3 | \n\n 0 | \n\n 1 | \n\n 4 | \n
| \n Other | \n\n 1 | \n\n 25 | \n\n \n | \n\n 7 | \n\n 33 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n December 31, 2024 | \n\n 105 | \n\n 601 | \n\n 248 | \n\n 107 | \n\n 1,060 | \n
| \n Accumulated amortization | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n -277 | \n\n -1,155 | \n\n -1,061 | \n\n -611 | \n\n -3,104 | \n
| \n Amortization | \n\n -54 | \n\n -72 | \n\n -85 | \n\n -17 | \n\n -228 | \n
| \n Impairment | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Reversal of impairment | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n Disposals and closures | \n\n 61 | \n\n 74 | \n\n \n | \n\n 100 | \n\n 235 | \n
| \n Currency translation differences | \n\n 1 | \n\n 13 | \n\n 16 | \n\n 13 | \n\n 43 | \n
| \n Partial Demerger | \n\n 223 | \n\n 651 | \n\n 887 | \n\n 485 | \n\n 2,246 | \n
| \n Other | \n\n 0 | \n\n 24 | \n\n \n | \n\n -25 | \n\n 0 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n December 31, 2023 | \n\n -45 | \n\n -466 | \n\n -244 | \n\n -55 | \n\n -809 | \n
| \n Amortization | \n\n -7 | \n\n -14 | \n\n -1 | \n\n -6 | \n\n -29 | \n
| \n Impairment | \n\n 0 | \n\n -1 | \n\n 0 | \n\n -1 | \n\n -1 | \n
| \n Reversal of impairment | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n Disposals and closures | \n\n 2 | \n\n 0 | \n\n \n | \n\n 0 | \n\n 2 | \n
| \n Currency translation differences | \n\n 0 | \n\n 2 | \n\n 0 | \n\n -1 | \n\n 1 | \n
| \n Other | \n\n 0 | \n\n -8 | \n\n \n | \n\n -1 | \n\n -9 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n December 31, 2024 | \n\n -50 | \n\n -486 | \n\n -245 | \n\n -62 | \n\n -843 | \n
| \n Net carrying amount | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n 300 | \n\n 590 | \n\n 1,005 | \n\n 154 | \n\n 2,049 | \n
| \n December 31, 2023 | \n\n 52 | \n\n 107 | \n\n 5 | \n\n 37 | \n\n 201 | \n
| \n December 31, 2024 | \n\n 55 | \n\n 115 | \n\n 2 | \n\n 45 | \n\n 217 | \n
The line \u201cOther\u201d mainly includes changes following portfolio transactions.
NOTE F20
Property, plant and equipment
fAccounting policy
General
Property, plant and equipment are tangible items that:
\u2022are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and
\u2022are expected to be used during more than one period.
The items of property, plant and equipment owned by the Group are recognized as property, plant and equipment when the following conditions are satisfied:
\u2022it is probable that the future economic benefits associated with the asset will flow to the Group;
\u2022the cost of the asset can be measured reliably.
Items of property, plant and equipment are initially measured at cost. The cost of an item of property, plant and equipment comprises its purchase price and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. If applicable, the cost comprises borrowing costs during the construction period.
After initial recognition, items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses, if any.
Items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives. The components of an item of property, plant and equipment with different useful lives are depreciated separately. Land is not depreciated. The estimated useful lives, residual values and depreciation methods are reviewed at each year end, also considering the potential impact of climate change including the execution of the Solvay's sustainability strategy (see Note on Climate Change Considerations in the IFRS general accounting policies). Any changes in estimates are accounted for prospectively.
| \n Within Land and buildings group | \n\n \n | \n\n \n | \n
|---|---|---|
| \n Buildings | \n\n 30-40 | \n\n years | \n
| \n Within Fixtures and equipment group | \n\n \n | \n\n \n | \n
| \n IT equipment | \n\n 3-5 | \n\n years | \n
| \n Machinery and equipment | \n\n 10-20 | \n\n years | \n
| \n Transportation equipment | \n\n 5-20 | \n\n years | \n
Depreciation expense is included in the consolidated income statement within cost of goods sold, administrative costs, and R&D costs.
In the table below, additions and depreciation expenses include the items of Specialty Businesses until the Partial Demerger.
| \n In \u20ac million | \n\n Land and buildings | \n\n Fixtures and equipment | \n\n Other tangible assets | \n\n Property, plant and equipment under construction | \n\n Total | \n
|---|---|---|---|---|---|
| \n Gross carrying amount | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n 3,021 | \n\n 10,648 | \n\n 425 | \n\n 1,033 | \n\n 15,128 | \n
| \n Additions | \n\n 77 | \n\n 136 | \n\n 7 | \n\n 777 | \n\n 998 | \n
| \n Disposals and closures | \n\n -23 | \n\n -216 | \n\n -17 | \n\n -3 | \n\n -258 | \n
| \n Increase through business combinations | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 0 | \n\n 1 | \n
| \n Currency translation differences | \n\n -35 | \n\n -126 | \n\n -4 | \n\n -16 | \n\n -181 | \n
| \n Partial Demerger | \n\n -1,516 | \n\n -5,458 | \n\n -186 | \n\n -955 | \n\n -8,115 | \n
| \n Other | \n\n 68 | \n\n 393 | \n\n 20 | \n\n -354 | \n\n 128 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n December 31, 2023 | \n\n 1,593 | \n\n 5,379 | \n\n 246 | \n\n 483 | \n\n 7,700 | \n
| \n Additions | \n\n 8 | \n\n 39 | \n\n 4 | \n\n 201 | \n\n 252 | \n
| \n Disposals and closures | \n\n -6 | \n\n -87 | \n\n -5 | \n\n 0 | \n\n -99 | \n
| \n Increase through business combinations | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Currency translation differences | \n\n 3 | \n\n 24 | \n\n -1 | \n\n 12 | \n\n 39 | \n
| \n Other | \n\n 42 | \n\n 136 | \n\n 15 | \n\n -160 | \n\n 33 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n December 31, 2024 | \n\n 1,640 | \n\n 5,491 | \n\n 260 | \n\n 536 | \n\n 7,925 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Accumulated depreciation | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n -1,648 | \n\n -7,818 | \n\n -351 | \n\n 0 | \n\n -9,816 | \n
| \n Depreciation | \n\n -76 | \n\n -459 | \n\n -22 | \n\n \n | \n\n -557 | \n
| \n Impairment | \n\n -11 | \n\n -44 | \n\n -2 | \n\n \n | \n\n -57 | \n
| \n Reversal of impairment | \n\n 0 | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n
| \n Disposals and closures | \n\n 18 | \n\n 214 | \n\n 16 | \n\n \n | \n\n 249 | \n
| \n Currency translation differences | \n\n 16 | \n\n 87 | \n\n 3 | \n\n \n | \n\n 105 | \n
| \n Partial Demerger | \n\n 694 | \n\n 3,788 | \n\n 153 | \n\n \n | \n\n 4,634 | \n
| \n Other | \n\n -19 | \n\n -90 | \n\n -5 | \n\n \n | \n\n -114 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n
| \n December 31, 2023 | \n\n -1,027 | \n\n -4,323 | \n\n -206 | \n\n 0 | \n\n -5,556 | \n
| \n Depreciation | \n\n -35 | \n\n -178 | \n\n -13 | \n\n \n | \n\n -226 | \n
| \n Impairment | \n\n -6 | \n\n -36 | \n\n 0 | \n\n \n | \n\n -42 | \n
| \n Reversal of impairment | \n\n 0 | \n\n 1 | \n\n 0 | \n\n \n | \n\n 1 | \n
| \n Disposals and closures | \n\n 6 | \n\n 86 | \n\n 5 | \n\n \n | \n\n 97 | \n
| \n Currency translation differences | \n\n -2 | \n\n -20 | \n\n 1 | \n\n \n | \n\n -21 | \n
| \n Other | \n\n -3 | \n\n -27 | \n\n 0 | \n\n \n | \n\n -29 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n
| \n December 31, 2024 | \n\n -1,066 | \n\n -4,496 | \n\n -213 | \n\n 0 | \n\n -5,776 | \n
| \n Net carrying amount | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n 1,373 | \n\n 2,830 | \n\n 75 | \n\n 1,033 | \n\n 5,311 | \n
| \n December 31, 2023 | \n\n 566 | \n\n 1,056 | \n\n 39 | \n\n 483 | \n\n 2,145 | \n
| \n December 31, 2024 | \n\n 574 | \n\n 995 | \n\n 46 | \n\n 536 | \n\n 2,150 | \n
In 2024 and 2023, no borrowing costs were capitalized.
Please see Note F1 for the split of the capital expenditure by segments.
The line \u201cOther\u201d mainly includes changes following portfolio transactions and reclassification of property, plant and equipment under construction to the appropriate categories when they are ready for intended use.
The 2023 additions and depreciation figures include the amounts related to the Specialty Businesses until the Partial Demerger on December 8, 2023.
| \n In \u20ac million | \n\n Land | \n\n Buildings | \n\n Transportation equipment | \n\n Industrial equipment | \n\n Other tangible assets | \n\n Total | \n
|---|---|---|---|---|---|---|
| \n Gross carrying amount | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n 19 | \n\n 250 | \n\n 289 | \n\n 279 | \n\n 16 | \n\n 852 | \n
| \n Additions | \n\n 0 | \n\n 17 | \n\n 62 | \n\n 15 | \n\n 7 | \n\n 101 | \n
| \n Disposals and closures | \n\n 0 | \n\n -25 | \n\n -16 | \n\n -18 | \n\n -2 | \n\n -62 | \n
| \n Increase through business combinations | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Currency translation differences | \n\n 0 | \n\n -3 | \n\n -7 | \n\n -3 | \n\n 0 | \n\n -14 | \n
| \n Partial Demerger | \n\n -11 | \n\n -170 | \n\n -82 | \n\n -133 | \n\n -12 | \n\n -409 | \n
| \n Other | \n\n 0 | \n\n 5 | \n\n 15 | \n\n -10 | \n\n 1 | \n\n 11 | \n
| \n December 31, 2023 | \n\n 8 | \n\n 73 | \n\n 261 | \n\n 128 | \n\n 8 | \n\n 479 | \n
| \n Additions | \n\n 0 | \n\n 2 | \n\n 38 | \n\n 7 | \n\n 3 | \n\n 50 | \n
| \n Disposals and closures | \n\n 0 | \n\n -3 | \n\n -16 | \n\n -5 | \n\n 0 | \n\n -25 | \n
| \n Increase through business combinations | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Currency translation differences | \n\n 0 | \n\n 0 | \n\n 11 | \n\n 1 | \n\n 0 | \n\n 13 | \n
| \n Other | \n\n 0 | \n\n -1 | \n\n 2 | \n\n 2 | \n\n 2 | \n\n 5 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n December 31, 2024 | \n\n 9 | \n\n 70 | \n\n 296 | \n\n 134 | \n\n 13 | \n\n 522 | \n
| \n Accumulated depreciation | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n -5 | \n\n -115 | \n\n -148 | \n\n -100 | \n\n -9 | \n\n -377 | \n
| \n Depreciation | \n\n -1 | \n\n -31 | \n\n -47 | \n\n -32 | \n\n -3 | \n\n -114 | \n
| \n Impairment | \n\n 0 | \n\n -1 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n -1 | \n
| \n Disposals and closures | \n\n 0 | \n\n 16 | \n\n 16 | \n\n 18 | \n\n 2 | \n\n 53 | \n
| \n Currency translation differences | \n\n 0 | \n\n 2 | \n\n 3 | \n\n 1 | \n\n 0 | \n\n 6 | \n
| \n Partial Demerger | \n\n 4 | \n\n 90 | \n\n 54 | \n\n 67 | \n\n 5 | \n\n 219 | \n
| \n December 31, 2023 | \n\n -2 | \n\n -39 | \n\n -122 | \n\n -45 | \n\n -5 | \n\n -213 | \n
| \n Depreciation | \n\n 0 | \n\n -10 | \n\n -33 | \n\n -16 | \n\n -2 | \n\n -62 | \n
| \n Impairment | \n\n 0 | \n\n -4 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n -4 | \n
| \n Disposals and closures | \n\n 0 | \n\n 3 | \n\n 16 | \n\n 5 | \n\n 0 | \n\n 25 | \n
| \n Currency translation differences | \n\n 0 | \n\n 0 | \n\n -5 | \n\n -1 | \n\n 0 | \n\n -5 | \n
| \n Other | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n December 31, 2024 | \n\n -3 | \n\n -48 | \n\n -144 | \n\n -56 | \n\n -7 | \n\n -258 | \n
| \n Net carrying amount | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n 14 | \n\n 134 | \n\n 141 | \n\n 178 | \n\n 6 | \n\n 474 | \n
| \n December 31, 2023 | \n\n 6 | \n\n 34 | \n\n 139 | \n\n 83 | \n\n 3 | \n\n 267 | \n
| \n December 31, 2024 | \n\n 6 | \n\n 22 | \n\n 152 | \n\n 78 | \n\n 6 | \n\n 264 | \n
The Group primarily leases buildings that include office buildings, and warehouses. Those leases are generally long-term leases and may include extension options.
The Group leases transportation equipment that mainly consists of railcars and containers to transport the Group\u2019s products.
Industrial equipment mainly relates to utility assets.
Generally, lease contracts are negotiated by the local teams and contain a wide range of different terms and conditions. Many lease contracts contain extension options and/or early termination options to provide the Group with operational flexibility. Such options are considered when determining the lease term and the lease liability when it is reasonably certain that they will be exercised.
If the group exercised its extension options not currently included in the lease liability, the present value of the additional payments would be \u20ac25 million at December\u00a031, 2024 (\u20ac42 million at December 31, 2023).
The lease contracts signed not yet commenced amount was \u20ac203 million at December 31, 2024 (\u20ac210 million at December 31, 2023) and is mainly related to a second waste-wood boiler in Germany, industrial equipment in France, and terminal services and rail cars in the United States.
Total cash outflows for leases amount to \u20ac75 million for 2024, of which \u20ac63 million related to payment of lease liabilities and \u20ac12 million of interest expenses. Information on the corresponding lease liabilities (long-term part of \u20ac236 million and short-term part of \u20ac70 million) can be found in the note F32 Financial Instruments. Information on the finance expense related to lease liabilities can be found in note F6 Net financial charges.
The 2023 figures contain the amounts related to Specialty Businesses until December 8, 2023.
In 2024, the expense related to both low-value and short-term leases was \u20ac5 million.
At the end of 2024, the total (gross) value of palladium leased still to be returned amounted to \u20ac28 million (end of 2023: \u20ac33 million). The difference is mainly due to the change of the market price of the commodity.
NOTE F2
Consolidated income statement by nature
| \n In \u20ac million | \n\n Notes | \n\n 2024 | \n\n 2023 | \n
|---|---|---|---|
| \n Net sales | \n\n (F1) | \n\n 4,540 | \n\n 4,880 | \n
| \n Revenue from non-core activities | \n\n (F3) | \n\n 590 | \n\n 1,145 | \n
| \n Raw materials. utilities and consumables used | \n\n \n | \n\n -2,208 | \n\n -2,802 | \n
| \n Changes in inventories | \n\n \n | \n\n -18 | \n\n -78 | \n
| \n Personnel expenses | \n\n \n | \n\n -823 | \n\n -835 | \n
| \n Wages and direct social benefits | \n\n \n | \n\n -615 | \n\n -623 | \n
| \n Employer's contribution for social insurance | \n\n \n | \n\n -157 | \n\n -163 | \n
| \n Pensions and insurance benefits | \n\n \n | \n\n -30 | \n\n -26 | \n
| \n Other personnel expenses | \n\n \n | \n\n -21 | \n\n -22 | \n
| \n Amortization. depreciation and impairment | \n\n (F11) | \n\n -362 | \n\n -423 | \n
| \n Other variable logistics expenses | \n\n \n | \n\n -615 | \n\n -568 | \n
| \n Other fixed expenses | \n\n \n | \n\n -445 | \n\n -412 | \n
| \n Addition and reversal of provisions (excluding employee benefit provisions) | \n\n (F31) | \n\n -235 | \n\n -279 | \n
| \n Significant income related to prior years | \n\n (F4) | \n\n 0 | \n\n 0 | \n
| \n M&A costs and gains and losses on disposals | \n\n (F5) | \n\n -29 | \n\n -404 | \n
| \n Earnings from associates and joint ventures | \n\n (F22) | \n\n 38 | \n\n 53 | \n
| \n EBIT | \n\n \n | \n\n 433 | \n\n 278 | \n
Other fixed expenses mainly include costs of services, licenses, and professional fees.
The change in raw materials, utilities, and consumables used is largely explained by the decrease in energy prices, and lower volume.
NOTE F2
Consolidated income statement by nature
| \n In \u20ac million | \n\n Notes | \n\n 2024 | \n\n 2023 | \n
|---|---|---|---|
| \n Net sales | \n\n (F1) | \n\n 4,540 | \n\n 4,880 | \n
| \n Revenue from non-core activities | \n\n (F3) | \n\n 590 | \n\n 1,145 | \n
| \n Raw materials. utilities and consumables used | \n\n \n | \n\n -2,208 | \n\n -2,802 | \n
| \n Changes in inventories | \n\n \n | \n\n -18 | \n\n -78 | \n
| \n Personnel expenses | \n\n \n | \n\n -823 | \n\n -835 | \n
| \n Wages and direct social benefits | \n\n \n | \n\n -615 | \n\n -623 | \n
| \n Employer's contribution for social insurance | \n\n \n | \n\n -157 | \n\n -163 | \n
| \n Pensions and insurance benefits | \n\n \n | \n\n -30 | \n\n -26 | \n
| \n Other personnel expenses | \n\n \n | \n\n -21 | \n\n -22 | \n
| \n Amortization. depreciation and impairment | \n\n (F11) | \n\n -362 | \n\n -423 | \n
| \n Other variable logistics expenses | \n\n \n | \n\n -615 | \n\n -568 | \n
| \n Other fixed expenses | \n\n \n | \n\n -445 | \n\n -412 | \n
| \n Addition and reversal of provisions (excluding employee benefit provisions) | \n\n (F31) | \n\n -235 | \n\n -279 | \n
| \n Significant income related to prior years | \n\n (F4) | \n\n 0 | \n\n 0 | \n
| \n M&A costs and gains and losses on disposals | \n\n (F5) | \n\n -29 | \n\n -404 | \n
| \n Earnings from associates and joint ventures | \n\n (F22) | \n\n 38 | \n\n 53 | \n
| \n EBIT | \n\n \n | \n\n 433 | \n\n 278 | \n
Other fixed expenses mainly include costs of services, licenses, and professional fees.
The change in raw materials, utilities, and consumables used is largely explained by the decrease in energy prices, and lower volume.
NOTE F2
Consolidated income statement by nature
| \n In \u20ac million | \n\n Notes | \n\n 2024 | \n\n 2023 | \n
|---|---|---|---|
| \n Net sales | \n\n (F1) | \n\n 4,540 | \n\n 4,880 | \n
| \n Revenue from non-core activities | \n\n (F3) | \n\n 590 | \n\n 1,145 | \n
| \n Raw materials. utilities and consumables used | \n\n \n | \n\n -2,208 | \n\n -2,802 | \n
| \n Changes in inventories | \n\n \n | \n\n -18 | \n\n -78 | \n
| \n Personnel expenses | \n\n \n | \n\n -823 | \n\n -835 | \n
| \n Wages and direct social benefits | \n\n \n | \n\n -615 | \n\n -623 | \n
| \n Employer's contribution for social insurance | \n\n \n | \n\n -157 | \n\n -163 | \n
| \n Pensions and insurance benefits | \n\n \n | \n\n -30 | \n\n -26 | \n
| \n Other personnel expenses | \n\n \n | \n\n -21 | \n\n -22 | \n
| \n Amortization. depreciation and impairment | \n\n (F11) | \n\n -362 | \n\n -423 | \n
| \n Other variable logistics expenses | \n\n \n | \n\n -615 | \n\n -568 | \n
| \n Other fixed expenses | \n\n \n | \n\n -445 | \n\n -412 | \n
| \n Addition and reversal of provisions (excluding employee benefit provisions) | \n\n (F31) | \n\n -235 | \n\n -279 | \n
| \n Significant income related to prior years | \n\n (F4) | \n\n 0 | \n\n 0 | \n
| \n M&A costs and gains and losses on disposals | \n\n (F5) | \n\n -29 | \n\n -404 | \n
| \n Earnings from associates and joint ventures | \n\n (F22) | \n\n 38 | \n\n 53 | \n
| \n EBIT | \n\n \n | \n\n 433 | \n\n 278 | \n
Other fixed expenses mainly include costs of services, licenses, and professional fees.
The change in raw materials, utilities, and consumables used is largely explained by the decrease in energy prices, and lower volume.
NOTE F4
Other operating gains and losses
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Start-up and preliminary study costs | \n\n -3 | \n\n -2 | \n
| \n Capital gains/losses on sales of property, plant and equipment and intangible assets | \n\n 6 | \n\n 3 | \n
| \n Net foreign exchange gains and losses | \n\n 0 | \n\n 2 | \n
| \n Amortization of intangible assets resulting from PPA | \n\n -4 | \n\n -7 | \n
| \n Gain (Loss) on CO2 hedge management | \n\n -69 | \n\n -14 | \n
| \n Financial result linked to operational activities | \n\n 14 | \n\n 14 | \n
| \n Costs linked to energy transition project(1) | \n\n -29 | \n\n -50 | \n
| \n Other | \n\n -6 | \n\n 68 | \n
| \n Other operating gains and losses | \n\n -91 | \n\n 15 | \n
(1)Costs linked to energy transition project, were presented together with \u201cOther\u201d, in 2023.
The variation of the loss on CO2 hedge management includes the OCI recycling effect (\u20ac38 million) linked to the change in hedging strategy. See note F32 for more details.
The cost linked to the energy transition project are related to Dombasle Energie \u2013 See also Main Events and changes in the consolidation scope.
In 2023, the row Other mainly includes the gain realized on the settlement of the energy financial instruments in the context of the Partial Demerger (\u20ac52 million).
NOTE F5
Results from portfolio management and\u00a0major restructurings, legacy\u00a0remediation and\u00a0major litigations
fAccounting policy
Results from portfolio management and major restructurings include:
\u2022gains and losses on the sale of subsidiaries, joint operations, joint ventures, and associates that do not qualify as discontinued operations;
\u2022acquisition costs of new businesses;
\u2022one-off operating costs related to internal management of portfolio (carve-out of major lines of businesses);
\u2022gains and losses on the sale of real estate not directly linked to an operating activity;
\u2022restructuring charges driven by portfolio management and by major reorganizations of business activities, including impairment losses resulting from the shutdown of an activity or a plant;
\u2022impairment losses (reversals) resulting from testing of CGUs.
\u2022It excludes non-cash accounting impact from amortization and depreciation resulting from the purchase price allocation (PPA) from acquisitions
Results from legacy remediation and major litigations include:
\u2022the remediation costs not generated by on-going production facilities (shutdown of sites, discontinued productions, previous years\u2019 pollution); and the impact of significant litigations.
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Restructuring costs and impairment | \n\n -107 | \n\n -146 | \n
| \n Impairment | \n\n -45 | \n\n -95 | \n
| \n Restructuring costs | \n\n -62 | \n\n -51 | \n
| \n M&A costs and gains and losses on disposals | \n\n -27 | \n\n -404 | \n
| \n Results from portfolio management and major restructuring | \n\n -134 | \n\n -550 | \n
In 2024, The Group impaired some tangible assets in the Special Chem Fluorine business for \u20ac(9) million and other non-cash-generating assets for \u20ac(36) million \u2013 see Note F23 for further details on the impairment.
The restructuring costs are mainly linked to the shutdown of the site of Salindres for \u20ac(31) million, the Peroxide Footprint rationalization program \u20ac(13) million, and TSA exit (\u20ac28 million compensated by \u20ac22 million of indemnification asset).
In 2023, the impairment includes goodwill impairment of energy CGU \u20ac(38) million, and impairment in the Special Chem CGU for Fluor Gases in Europe for \u20ac(48)\u00a0million \u2013 see note F23 for further details on the impairment.
The restructuring costs in 2023 are mainly linked to the separation plan of the Solvay Group \u20ac(35) million.
In 2023, M&A costs is mainly explained by the costs incurred for the ongoing separation plan of the Solvay Group \u20ac(218) million, and the recycling of RusVinyl of currency Translation Adjustment reserve \u20ac(176) million.
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Major litigations | \n\n -1 | \n\n -12 | \n
| \n Remediation costs and other costs related to non-ongoing activities | \n\n -72 | \n\n -38 | \n
| \n Results from legacy remediation and major litigations | \n\n -73 | \n\n -50 | \n
Remediation costs and other costs related to non-ongoing activities increased mainly due to the shut-down of the Salindres site (\u20ac18 million).
NOTE F4
Other operating gains and losses
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Start-up and preliminary study costs | \n\n -3 | \n\n -2 | \n
| \n Capital gains/losses on sales of property, plant and equipment and intangible assets | \n\n 6 | \n\n 3 | \n
| \n Net foreign exchange gains and losses | \n\n 0 | \n\n 2 | \n
| \n Amortization of intangible assets resulting from PPA | \n\n -4 | \n\n -7 | \n
| \n Gain (Loss) on CO2 hedge management | \n\n -69 | \n\n -14 | \n
| \n Financial result linked to operational activities | \n\n 14 | \n\n 14 | \n
| \n Costs linked to energy transition project(1) | \n\n -29 | \n\n -50 | \n
| \n Other | \n\n -6 | \n\n 68 | \n
| \n Other operating gains and losses | \n\n -91 | \n\n 15 | \n
(1)Costs linked to energy transition project, were presented together with \u201cOther\u201d, in 2023.
The variation of the loss on CO2 hedge management includes the OCI recycling effect (\u20ac38 million) linked to the change in hedging strategy. See note F32 for more details.
The cost linked to the energy transition project are related to Dombasle Energie \u2013 See also Main Events and changes in the consolidation scope.
In 2023, the row Other mainly includes the gain realized on the settlement of the energy financial instruments in the context of the Partial Demerger (\u20ac52 million).
NOTE F5
Results from portfolio management and\u00a0major restructurings, legacy\u00a0remediation and\u00a0major litigations
fAccounting policy
Results from portfolio management and major restructurings include:
\u2022gains and losses on the sale of subsidiaries, joint operations, joint ventures, and associates that do not qualify as discontinued operations;
\u2022acquisition costs of new businesses;
\u2022one-off operating costs related to internal management of portfolio (carve-out of major lines of businesses);
\u2022gains and losses on the sale of real estate not directly linked to an operating activity;
\u2022restructuring charges driven by portfolio management and by major reorganizations of business activities, including impairment losses resulting from the shutdown of an activity or a plant;
\u2022impairment losses (reversals) resulting from testing of CGUs.
\u2022It excludes non-cash accounting impact from amortization and depreciation resulting from the purchase price allocation (PPA) from acquisitions
Results from legacy remediation and major litigations include:
\u2022the remediation costs not generated by on-going production facilities (shutdown of sites, discontinued productions, previous years\u2019 pollution); and the impact of significant litigations.
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Restructuring costs and impairment | \n\n -107 | \n\n -146 | \n
| \n Impairment | \n\n -45 | \n\n -95 | \n
| \n Restructuring costs | \n\n -62 | \n\n -51 | \n
| \n M&A costs and gains and losses on disposals | \n\n -27 | \n\n -404 | \n
| \n Results from portfolio management and major restructuring | \n\n -134 | \n\n -550 | \n
In 2024, The Group impaired some tangible assets in the Special Chem Fluorine business for \u20ac(9) million and other non-cash-generating assets for \u20ac(36) million \u2013 see Note F23 for further details on the impairment.
The restructuring costs are mainly linked to the shutdown of the site of Salindres for \u20ac(31) million, the Peroxide Footprint rationalization program \u20ac(13) million, and TSA exit (\u20ac28 million compensated by \u20ac22 million of indemnification asset).
In 2023, the impairment includes goodwill impairment of energy CGU \u20ac(38) million, and impairment in the Special Chem CGU for Fluor Gases in Europe for \u20ac(48)\u00a0million \u2013 see note F23 for further details on the impairment.
The restructuring costs in 2023 are mainly linked to the separation plan of the Solvay Group \u20ac(35) million.
In 2023, M&A costs is mainly explained by the costs incurred for the ongoing separation plan of the Solvay Group \u20ac(218) million, and the recycling of RusVinyl of currency Translation Adjustment reserve \u20ac(176) million.
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Major litigations | \n\n -1 | \n\n -12 | \n
| \n Remediation costs and other costs related to non-ongoing activities | \n\n -72 | \n\n -38 | \n
| \n Results from legacy remediation and major litigations | \n\n -73 | \n\n -50 | \n
Remediation costs and other costs related to non-ongoing activities increased mainly due to the shut-down of the Salindres site (\u20ac18 million).
NOTE F4
Other operating gains and losses
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Start-up and preliminary study costs | \n\n -3 | \n\n -2 | \n
| \n Capital gains/losses on sales of property, plant and equipment and intangible assets | \n\n 6 | \n\n 3 | \n
| \n Net foreign exchange gains and losses | \n\n 0 | \n\n 2 | \n
| \n Amortization of intangible assets resulting from PPA | \n\n -4 | \n\n -7 | \n
| \n Gain (Loss) on CO2 hedge management | \n\n -69 | \n\n -14 | \n
| \n Financial result linked to operational activities | \n\n 14 | \n\n 14 | \n
| \n Costs linked to energy transition project(1) | \n\n -29 | \n\n -50 | \n
| \n Other | \n\n -6 | \n\n 68 | \n
| \n Other operating gains and losses | \n\n -91 | \n\n 15 | \n
(1)Costs linked to energy transition project, were presented together with \u201cOther\u201d, in 2023.
The variation of the loss on CO2 hedge management includes the OCI recycling effect (\u20ac38 million) linked to the change in hedging strategy. See note F32 for more details.
The cost linked to the energy transition project are related to Dombasle Energie \u2013 See also Main Events and changes in the consolidation scope.
In 2023, the row Other mainly includes the gain realized on the settlement of the energy financial instruments in the context of the Partial Demerger (\u20ac52 million).
NOTE F5
Results from portfolio management and\u00a0major restructurings, legacy\u00a0remediation and\u00a0major litigations
fAccounting policy
Results from portfolio management and major restructurings include:
\u2022gains and losses on the sale of subsidiaries, joint operations, joint ventures, and associates that do not qualify as discontinued operations;
\u2022acquisition costs of new businesses;
\u2022one-off operating costs related to internal management of portfolio (carve-out of major lines of businesses);
\u2022gains and losses on the sale of real estate not directly linked to an operating activity;
\u2022restructuring charges driven by portfolio management and by major reorganizations of business activities, including impairment losses resulting from the shutdown of an activity or a plant;
\u2022impairment losses (reversals) resulting from testing of CGUs.
\u2022It excludes non-cash accounting impact from amortization and depreciation resulting from the purchase price allocation (PPA) from acquisitions
Results from legacy remediation and major litigations include:
\u2022the remediation costs not generated by on-going production facilities (shutdown of sites, discontinued productions, previous years\u2019 pollution); and the impact of significant litigations.
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Restructuring costs and impairment | \n\n -107 | \n\n -146 | \n
| \n Impairment | \n\n -45 | \n\n -95 | \n
| \n Restructuring costs | \n\n -62 | \n\n -51 | \n
| \n M&A costs and gains and losses on disposals | \n\n -27 | \n\n -404 | \n
| \n Results from portfolio management and major restructuring | \n\n -134 | \n\n -550 | \n
In 2024, The Group impaired some tangible assets in the Special Chem Fluorine business for \u20ac(9) million and other non-cash-generating assets for \u20ac(36) million \u2013 see Note F23 for further details on the impairment.
The restructuring costs are mainly linked to the shutdown of the site of Salindres for \u20ac(31) million, the Peroxide Footprint rationalization program \u20ac(13) million, and TSA exit (\u20ac28 million compensated by \u20ac22 million of indemnification asset).
In 2023, the impairment includes goodwill impairment of energy CGU \u20ac(38) million, and impairment in the Special Chem CGU for Fluor Gases in Europe for \u20ac(48)\u00a0million \u2013 see note F23 for further details on the impairment.
The restructuring costs in 2023 are mainly linked to the separation plan of the Solvay Group \u20ac(35) million.
In 2023, M&A costs is mainly explained by the costs incurred for the ongoing separation plan of the Solvay Group \u20ac(218) million, and the recycling of RusVinyl of currency Translation Adjustment reserve \u20ac(176) million.
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Major litigations | \n\n -1 | \n\n -12 | \n
| \n Remediation costs and other costs related to non-ongoing activities | \n\n -72 | \n\n -38 | \n
| \n Results from legacy remediation and major litigations | \n\n -73 | \n\n -50 | \n
Remediation costs and other costs related to non-ongoing activities increased mainly due to the shut-down of the Salindres site (\u20ac18 million).
NOTE F5
Results from portfolio management and\u00a0major restructurings, legacy\u00a0remediation and\u00a0major litigations
fAccounting policy
Results from portfolio management and major restructurings include:
\u2022gains and losses on the sale of subsidiaries, joint operations, joint ventures, and associates that do not qualify as discontinued operations;
\u2022acquisition costs of new businesses;
\u2022one-off operating costs related to internal management of portfolio (carve-out of major lines of businesses);
\u2022gains and losses on the sale of real estate not directly linked to an operating activity;
\u2022restructuring charges driven by portfolio management and by major reorganizations of business activities, including impairment losses resulting from the shutdown of an activity or a plant;
\u2022impairment losses (reversals) resulting from testing of CGUs.
\u2022It excludes non-cash accounting impact from amortization and depreciation resulting from the purchase price allocation (PPA) from acquisitions
Results from legacy remediation and major litigations include:
\u2022the remediation costs not generated by on-going production facilities (shutdown of sites, discontinued productions, previous years\u2019 pollution); and the impact of significant litigations.
NOTE F6
Net financial charges
fAccounting policy
Interest on borrowings is recognized in costs of borrowings as incurred, except for borrowing costs directly attributable to the acquisition, construction and production of qualifying assets (see note F20 Property, Plant and Equipment).
Net foreign exchange gains or losses on financial items and changes in fair value of derivative financial instruments related to net indebtedness are presented in \u201cOther gains and losses on net indebtedness,\u201d with the exception of changes in fair value of derivative financial instruments that are hedging instruments in a cash flow hedge relationship, and which are recognized on the same line as the hedged item, when the latter affects profit or loss.
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Cost of borrowings | \n\n -96 | \n\n -60 | \n
| \n Interest expense on lease liabilities | \n\n -12 | \n\n -11 | \n
| \n Interest on loans and short term deposits | \n\n 17 | \n\n 36 | \n
| \n Other gains and losses on net indebtedness | \n\n 15 | \n\n -6 | \n
| \n Net cost of borrowings | \n\n -76 | \n\n -41 | \n
| \n Cost of discounting provisions | \n\n -41 | \n\n -45 | \n
| \n Impact of change of discount rate on provisions | \n\n 25 | \n\n -17 | \n
| \n Result from equity instruments measured at fair value | \n\n -22 | \n\n 4 | \n
| \n Net financial charges | \n\n -113 | \n\n -98 | \n
More details are included in note F33 Net indebtedness.
The net cost of borrowings variance is mainly explained as follows.
Higher cost of borrowings for \u20ac(36) million attributable to the liability management exercise that Solvay undertook in 2023 prior to the partial demerger during which the perpetual hybrid bonds that qualified as equity were replaced by other non-current debts triggering interest expenses. In 2023, coupons of perpetual hybrid bonds deducted from equity upon declaration amounted to \u20ac(70) million.
Lower interest income on loans and short-term deposits explained by lower volumes of excess cash following the partial demerger.
Other gains and losses on net indebtedness from \u20ac(6) million in 2023 to \u20ac15 million in 2024, attributable to :
hlower currency swaps income \u20ac5 million (interest element)
hother financial income \u20ac21 million mainly explained by the change in fair value of stock option plans which includes options on Syensqo SA shares
ha decrease in other financial charges by \u20ac8 million mainly explained by costs related to the separation plan in 2023.
hforeign exchange results \u20ac(3) million
The cost of discounting provision relates to post-employment benefits for \u20ac(22) million and to environmental provisions \u20ac(19) million.
The impact of a change of discount rates for \u20ac25 million is attributable to the evolution of the discount rates (see note F31 \u2013 part on environmental provisions).
The result of Equity Instruments measured at fair value through profit or loss relate to the variation of Syensqo SA share price, in the context of hedging of LTI plans prior to the Partial Demerger.
NOTE F6
Net financial charges
fAccounting policy
Interest on borrowings is recognized in costs of borrowings as incurred, except for borrowing costs directly attributable to the acquisition, construction and production of qualifying assets (see note F20 Property, Plant and Equipment).
Net foreign exchange gains or losses on financial items and changes in fair value of derivative financial instruments related to net indebtedness are presented in \u201cOther gains and losses on net indebtedness,\u201d with the exception of changes in fair value of derivative financial instruments that are hedging instruments in a cash flow hedge relationship, and which are recognized on the same line as the hedged item, when the latter affects profit or loss.
NOTE F6
Net financial charges
fAccounting policy
Interest on borrowings is recognized in costs of borrowings as incurred, except for borrowing costs directly attributable to the acquisition, construction and production of qualifying assets (see note F20 Property, Plant and Equipment).
Net foreign exchange gains or losses on financial items and changes in fair value of derivative financial instruments related to net indebtedness are presented in \u201cOther gains and losses on net indebtedness,\u201d with the exception of changes in fair value of derivative financial instruments that are hedging instruments in a cash flow hedge relationship, and which are recognized on the same line as the hedged item, when the latter affects profit or loss.
NOTE F6
Net financial charges
fAccounting policy
Interest on borrowings is recognized in costs of borrowings as incurred, except for borrowing costs directly attributable to the acquisition, construction and production of qualifying assets (see note F20 Property, Plant and Equipment).
Net foreign exchange gains or losses on financial items and changes in fair value of derivative financial instruments related to net indebtedness are presented in \u201cOther gains and losses on net indebtedness,\u201d with the exception of changes in fair value of derivative financial instruments that are hedging instruments in a cash flow hedge relationship, and which are recognized on the same line as the hedged item, when the latter affects profit or loss.
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Cost of borrowings | \n\n -96 | \n\n -60 | \n
| \n Interest expense on lease liabilities | \n\n -12 | \n\n -11 | \n
| \n Interest on loans and short term deposits | \n\n 17 | \n\n 36 | \n
| \n Other gains and losses on net indebtedness | \n\n 15 | \n\n -6 | \n
| \n Net cost of borrowings | \n\n -76 | \n\n -41 | \n
| \n Cost of discounting provisions | \n\n -41 | \n\n -45 | \n
| \n Impact of change of discount rate on provisions | \n\n 25 | \n\n -17 | \n
| \n Result from equity instruments measured at fair value | \n\n -22 | \n\n 4 | \n
| \n Net financial charges | \n\n -113 | \n\n -98 | \n
More details are included in note F33 Net indebtedness.
The net cost of borrowings variance is mainly explained as follows.
Higher cost of borrowings for \u20ac(36) million attributable to the liability management exercise that Solvay undertook in 2023 prior to the partial demerger during which the perpetual hybrid bonds that qualified as equity were replaced by other non-current debts triggering interest expenses. In 2023, coupons of perpetual hybrid bonds deducted from equity upon declaration amounted to \u20ac(70) million.
Lower interest income on loans and short-term deposits explained by lower volumes of excess cash following the partial demerger.
Other gains and losses on net indebtedness from \u20ac(6) million in 2023 to \u20ac15 million in 2024, attributable to :
hlower currency swaps income \u20ac5 million (interest element)
hother financial income \u20ac21 million mainly explained by the change in fair value of stock option plans which includes options on Syensqo SA shares
ha decrease in other financial charges by \u20ac8 million mainly explained by costs related to the separation plan in 2023.
hforeign exchange results \u20ac(3) million
The cost of discounting provision relates to post-employment benefits for \u20ac(22) million and to environmental provisions \u20ac(19) million.
The impact of a change of discount rates for \u20ac25 million is attributable to the evolution of the discount rates (see note F31 \u2013 part on environmental provisions).
The result of Equity Instruments measured at fair value through profit or loss relate to the variation of Syensqo SA share price, in the context of hedging of LTI plans prior to the Partial Demerger.
NOTE F6
Net financial charges
fAccounting policy
Interest on borrowings is recognized in costs of borrowings as incurred, except for borrowing costs directly attributable to the acquisition, construction and production of qualifying assets (see note F20 Property, Plant and Equipment).
Net foreign exchange gains or losses on financial items and changes in fair value of derivative financial instruments related to net indebtedness are presented in \u201cOther gains and losses on net indebtedness,\u201d with the exception of changes in fair value of derivative financial instruments that are hedging instruments in a cash flow hedge relationship, and which are recognized on the same line as the hedged item, when the latter affects profit or loss.
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Cost of borrowings | \n\n -96 | \n\n -60 | \n
| \n Interest expense on lease liabilities | \n\n -12 | \n\n -11 | \n
| \n Interest on loans and short term deposits | \n\n 17 | \n\n 36 | \n
| \n Other gains and losses on net indebtedness | \n\n 15 | \n\n -6 | \n
| \n Net cost of borrowings | \n\n -76 | \n\n -41 | \n
| \n Cost of discounting provisions | \n\n -41 | \n\n -45 | \n
| \n Impact of change of discount rate on provisions | \n\n 25 | \n\n -17 | \n
| \n Result from equity instruments measured at fair value | \n\n -22 | \n\n 4 | \n
| \n Net financial charges | \n\n -113 | \n\n -98 | \n
More details are included in note F33 Net indebtedness.
The net cost of borrowings variance is mainly explained as follows.
Higher cost of borrowings for \u20ac(36) million attributable to the liability management exercise that Solvay undertook in 2023 prior to the partial demerger during which the perpetual hybrid bonds that qualified as equity were replaced by other non-current debts triggering interest expenses. In 2023, coupons of perpetual hybrid bonds deducted from equity upon declaration amounted to \u20ac(70) million.
Lower interest income on loans and short-term deposits explained by lower volumes of excess cash following the partial demerger.
Other gains and losses on net indebtedness from \u20ac(6) million in 2023 to \u20ac15 million in 2024, attributable to :
hlower currency swaps income \u20ac5 million (interest element)
hother financial income \u20ac21 million mainly explained by the change in fair value of stock option plans which includes options on Syensqo SA shares
ha decrease in other financial charges by \u20ac8 million mainly explained by costs related to the separation plan in 2023.
hforeign exchange results \u20ac(3) million
The cost of discounting provision relates to post-employment benefits for \u20ac(22) million and to environmental provisions \u20ac(19) million.
The impact of a change of discount rates for \u20ac25 million is attributable to the evolution of the discount rates (see note F31 \u2013 part on environmental provisions).
The result of Equity Instruments measured at fair value through profit or loss relate to the variation of Syensqo SA share price, in the context of hedging of LTI plans prior to the Partial Demerger.
NOTE F6
Net financial charges
fAccounting policy
Interest on borrowings is recognized in costs of borrowings as incurred, except for borrowing costs directly attributable to the acquisition, construction and production of qualifying assets (see note F20 Property, Plant and Equipment).
Net foreign exchange gains or losses on financial items and changes in fair value of derivative financial instruments related to net indebtedness are presented in \u201cOther gains and losses on net indebtedness,\u201d with the exception of changes in fair value of derivative financial instruments that are hedging instruments in a cash flow hedge relationship, and which are recognized on the same line as the hedged item, when the latter affects profit or loss.
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Cost of borrowings | \n\n -96 | \n\n -60 | \n
| \n Interest expense on lease liabilities | \n\n -12 | \n\n -11 | \n
| \n Interest on loans and short term deposits | \n\n 17 | \n\n 36 | \n
| \n Other gains and losses on net indebtedness | \n\n 15 | \n\n -6 | \n
| \n Net cost of borrowings | \n\n -76 | \n\n -41 | \n
| \n Cost of discounting provisions | \n\n -41 | \n\n -45 | \n
| \n Impact of change of discount rate on provisions | \n\n 25 | \n\n -17 | \n
| \n Result from equity instruments measured at fair value | \n\n -22 | \n\n 4 | \n
| \n Net financial charges | \n\n -113 | \n\n -98 | \n
More details are included in note F33 Net indebtedness.
The net cost of borrowings variance is mainly explained as follows.
Higher cost of borrowings for \u20ac(36) million attributable to the liability management exercise that Solvay undertook in 2023 prior to the partial demerger during which the perpetual hybrid bonds that qualified as equity were replaced by other non-current debts triggering interest expenses. In 2023, coupons of perpetual hybrid bonds deducted from equity upon declaration amounted to \u20ac(70) million.
Lower interest income on loans and short-term deposits explained by lower volumes of excess cash following the partial demerger.
Other gains and losses on net indebtedness from \u20ac(6) million in 2023 to \u20ac15 million in 2024, attributable to :
hlower currency swaps income \u20ac5 million (interest element)
hother financial income \u20ac21 million mainly explained by the change in fair value of stock option plans which includes options on Syensqo SA shares
ha decrease in other financial charges by \u20ac8 million mainly explained by costs related to the separation plan in 2023.
hforeign exchange results \u20ac(3) million
The cost of discounting provision relates to post-employment benefits for \u20ac(22) million and to environmental provisions \u20ac(19) million.
The impact of a change of discount rates for \u20ac25 million is attributable to the evolution of the discount rates (see note F31 \u2013 part on environmental provisions).
The result of Equity Instruments measured at fair value through profit or loss relate to the variation of Syensqo SA share price, in the context of hedging of LTI plans prior to the Partial Demerger.
NOTE F6
Net financial charges
fAccounting policy
Interest on borrowings is recognized in costs of borrowings as incurred, except for borrowing costs directly attributable to the acquisition, construction and production of qualifying assets (see note F20 Property, Plant and Equipment).
Net foreign exchange gains or losses on financial items and changes in fair value of derivative financial instruments related to net indebtedness are presented in \u201cOther gains and losses on net indebtedness,\u201d with the exception of changes in fair value of derivative financial instruments that are hedging instruments in a cash flow hedge relationship, and which are recognized on the same line as the hedged item, when the latter affects profit or loss.
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Cost of borrowings | \n\n -96 | \n\n -60 | \n
| \n Interest expense on lease liabilities | \n\n -12 | \n\n -11 | \n
| \n Interest on loans and short term deposits | \n\n 17 | \n\n 36 | \n
| \n Other gains and losses on net indebtedness | \n\n 15 | \n\n -6 | \n
| \n Net cost of borrowings | \n\n -76 | \n\n -41 | \n
| \n Cost of discounting provisions | \n\n -41 | \n\n -45 | \n
| \n Impact of change of discount rate on provisions | \n\n 25 | \n\n -17 | \n
| \n Result from equity instruments measured at fair value | \n\n -22 | \n\n 4 | \n
| \n Net financial charges | \n\n -113 | \n\n -98 | \n
More details are included in note F33 Net indebtedness.
The net cost of borrowings variance is mainly explained as follows.
Higher cost of borrowings for \u20ac(36) million attributable to the liability management exercise that Solvay undertook in 2023 prior to the partial demerger during which the perpetual hybrid bonds that qualified as equity were replaced by other non-current debts triggering interest expenses. In 2023, coupons of perpetual hybrid bonds deducted from equity upon declaration amounted to \u20ac(70) million.
Lower interest income on loans and short-term deposits explained by lower volumes of excess cash following the partial demerger.
Other gains and losses on net indebtedness from \u20ac(6) million in 2023 to \u20ac15 million in 2024, attributable to :
hlower currency swaps income \u20ac5 million (interest element)
hother financial income \u20ac21 million mainly explained by the change in fair value of stock option plans which includes options on Syensqo SA shares
ha decrease in other financial charges by \u20ac8 million mainly explained by costs related to the separation plan in 2023.
hforeign exchange results \u20ac(3) million
The cost of discounting provision relates to post-employment benefits for \u20ac(22) million and to environmental provisions \u20ac(19) million.
The impact of a change of discount rates for \u20ac25 million is attributable to the evolution of the discount rates (see note F31 \u2013 part on environmental provisions).
The result of Equity Instruments measured at fair value through profit or loss relate to the variation of Syensqo SA share price, in the context of hedging of LTI plans prior to the Partial Demerger.
NOTE F6
Net financial charges
fAccounting policy
Interest on borrowings is recognized in costs of borrowings as incurred, except for borrowing costs directly attributable to the acquisition, construction and production of qualifying assets (see note F20 Property, Plant and Equipment).
Net foreign exchange gains or losses on financial items and changes in fair value of derivative financial instruments related to net indebtedness are presented in \u201cOther gains and losses on net indebtedness,\u201d with the exception of changes in fair value of derivative financial instruments that are hedging instruments in a cash flow hedge relationship, and which are recognized on the same line as the hedged item, when the latter affects profit or loss.
NOTE F6
Net financial charges
fAccounting policy
Interest on borrowings is recognized in costs of borrowings as incurred, except for borrowing costs directly attributable to the acquisition, construction and production of qualifying assets (see note F20 Property, Plant and Equipment).
Net foreign exchange gains or losses on financial items and changes in fair value of derivative financial instruments related to net indebtedness are presented in \u201cOther gains and losses on net indebtedness,\u201d with the exception of changes in fair value of derivative financial instruments that are hedging instruments in a cash flow hedge relationship, and which are recognized on the same line as the hedged item, when the latter affects profit or loss.
NOTE F6
Net financial charges
fAccounting policy
Interest on borrowings is recognized in costs of borrowings as incurred, except for borrowing costs directly attributable to the acquisition, construction and production of qualifying assets (see note F20 Property, Plant and Equipment).
Net foreign exchange gains or losses on financial items and changes in fair value of derivative financial instruments related to net indebtedness are presented in \u201cOther gains and losses on net indebtedness,\u201d with the exception of changes in fair value of derivative financial instruments that are hedging instruments in a cash flow hedge relationship, and which are recognized on the same line as the hedged item, when the latter affects profit or loss.
NOTE F32
Financial instruments and financial risk management
fAccounting policy
General
Financial assets and liabilities are recognized when, and only when Solvay becomes a party to the contractual provisions of the instrument.
Amortized cost is the amount at which the financial asset or financial liability is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity amount and, for financial assets, adjusted for any loss allowance. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial asset or financial liability to the gross carrying amount of a financial asset or to the amortized cost of a financial liability. When calculating the effective interest rate, the Group estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses. The calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs, and all other premiums or discounts.
Financial assets
Trade receivables are initially measured at their transaction price, if they do not contain a significant financing component, which is the case for substantially all trade receivables. Other financial assets are initially measured at fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset.
A financial asset is classified as current when the cash flows expected to flow from the instrument mature within one year.
All recognized financial assets will subsequently be measured at either amortized cost or fair value under IFRS 9 Financial Instruments, specifically:
\u2022A debt instrument that (i) is held within a business model whose objective is to collect the contractual cash flows and (ii) has contractual cash flows that are solely payments of principal and interest on the principal amount outstanding is measured at amortized cost (net of any write down for impairment), unless the asset is designated at fair value through profit or loss (FVTPL) under the fair value option.
\u2022All other debt instruments are measured at FVTPL.
\u2022All equity investments are measured in the consolidated statement of financial position at fair value, with gains and losses recognized in profit or loss except that if an equity investment is not held for trading, nor contingent consideration recognized by an acquirer in a business combination, an irrevocable election can be made at initial recognition to measure the investment at FVTOCI, with dividend income recognized in profit or loss. This classification is determined on an instrument-by-instrument basis. Upon derecognition, the cumulative gains or losses previously recognized in other comprehensive income are reclassified to retained earnings.
\u2022Equity investments in partnerships of investment funds are measured in the consolidated statement of financial position at fair value with gains and losses recognized in profit or loss. Based on the analysis of the characteristics of these funds the Group determined that they were not eligible for the FVTOCI option and therefore are accounted for at FVTPL.
\u2022For instruments quoted in an active market, the fair value corresponds to a market price (level 1). For instruments that are not quoted in an active market, the fair value is determined using valuation techniques including reference to recent arm\u2019s length market transactions or transactions involving instruments which are substantially the same (level 2), or discounted cash flow analysis including, to the greatest possible extent, assumptions consistent with observable market data (level 3). However, in limited circumstances, cost of equity instruments may be an appropriate estimate of their fair value. That may be the case if insufficient more recent information is available to measure fair value, or if there is a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.
Impairment of financial assets
\u2022The impairment loss of a financial asset measured at amortized cost is calculated based on the expected loss model, representing the weighted average of credit losses with the respective risks of a default occurring as the weights. Expected credit losses are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
\u2022For trade receivables that do not contain a significant financing component (i.e. substantially all trade receivables), the loss allowance is measured at an amount equal to lifetime expected credit losses. Those are the expected credit losses that result from all possible default events over the expected life of those trade receivables, using a provision matrix that considers historical information on defaults adjusted for the forward-looking information per customer. The Group considers a financial asset in default risk when contractual payments are 60 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is fully impaired when there is no reasonable expectation of recovering the contractual cash flows.
Impairment losses are recognized in the consolidated income statement, except for debt instruments measured at fair value through other comprehensive income.
In this case, the allowance is recognized in other comprehensive income.
Financial liabilities
Financial liabilities are initially measured at fair value minus, in the case of a financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the issue of the financial liability. Subsequently, they are measured at amortized cost, except for:
\u2022financial liabilities at fair value through profit or loss. Such liabilities, including derivatives that are liabilities, are subsequently measured at fair value;
\u2022financial guarantee contracts. After initial recognition, guarantees are subsequently measured at the higher of the expected losses and the amount initially recognized.
Derivative financial instruments
A derivative financial instrument is a financial instrument or other contract within the scope of IFRS 9 Financial Instruments with all three of the following characteristics:
\u2022its value changes in response to the change in a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract (sometimes called the \"underlying\");
\u2022it requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors;
\u2022it is settled at a future date.
The Group enters into a variety of derivative financial instruments (forward, future, option, collars and swap contracts) to manage its exposure to interest rate risk, foreign exchange rate risk, and commodity risk (mainly utility and CO2 emission rights price risks).
As explained above, derivatives are initially recognized at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in income or expense, unless the derivative is designated and effective as a hedging instrument. The Group designates certain derivatives as hedging instruments of the exposure to variability in cash flows with respect to a recognized asset or liability or a highly probable forecast transaction that could affect profit or loss (cash flow hedges).
A derivative with a positive fair value is recognized as a financial asset whereas a derivative with a negative fair value is recognized as a financial liability. Derivative instruments (or portions of them) are presented as non-current assets or non-current liabilities if the remaining maturity of the underlying settlements is more than 12 months after the reporting period. Other derivative instruments (or portions of them) are presented as current assets or current liabilities.
Hedge accounting
The Group designates certain derivatives and embedded derivatives, in respect of interest rate risk, foreign exchange rate risk, Solvay share price risk, and commodity risk (mainly utility and CO2 emission rights price risks), as hedging instruments in a cash flow hedge relationship.
At the inception of the hedge relationship, there is a formal designation and documentation of the hedging relationship and the Group\u2019s risk management objective and strategy for undertaking the hedge. So to apply hedge accounting: (a) there is an economic relationship between the hedged item and the hedging instrument, (b) the effect of credit risk does not dominate the value changes that result from that economic relationship, and (c) the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item.
The requirement under (a) above that an economic relationship exists means that there is an expectation that the value of the hedging instrument and the value of the hedged item will systematically change in the opposite direction in response to movements in either the same underlying (or underlyings that are economically related in such a way that they respond in a similar way to the risk that is being hedged).
Cash flow hedges
The effective portion of changes in the fair value of hedging instruments that are designated in a cash flow hedge is recognized in other comprehensive income.
The gain or loss relating to the ineffective portion is recognized immediately in profit or loss.
As long as cash flow hedge qualifies, the hedging relationship is accounted for as follows:
(a)the separate component of equity associated with the hedged item (cash flow hedge reserve) is adjusted to the lower of the following (in absolute amounts):
(i)the cumulative gain or loss on the hedging instrument from inception of the hedge; and
(ii)the cumulative change in fair value (present value) of the hedged item (i.e. the present value of the cumulative change in the hedged expected future cash flows) from inception of the hedge.
(b)the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge (i.e. The portion that is offset by the change in the cash flow hedge reserve calculated in accordance with (a)) is recognized in other comprehensive income;
(c)any remaining gain or loss on the hedging instrument (or any gain or loss required to balance the change in the cash flow hedge reserve calculated in accordance with (a)) is hedge ineffectiveness that is recognized in profit or loss.
(d)the amount that has been accumulated in the cash flow hedge reserve in accordance with (a) is accounted for as follows:
(i)if a hedged forecast transaction subsequently results in the recognition of a non-financial asset or a non-financial liability, the Group removes that amount from the cash flow hedge reserve and includes it directly in the initial cost or other carrying amount of the asset or the liability. This is not a reclassification adjustment and hence it does not affect other comprehensive income;
(ii)for cash flow hedges other than those covered by i), that amount is reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment in the same period or periods during which the hedged expected future cash flows affect profit or loss (for example, in the periods that interest income or interest expense is recognized or when a forecast sale occurs);
(iii)however, if that amount is a loss and the Group expects that all or a portion of that loss will not be recovered in one or more future periods, it immediately reclassifies the amount that is not expected to be recovered into profit or loss as a reclassification adjustment.
Most hedged items are transaction related. The time value of options, forward elements of forward contracts, and foreign currency basis spreads of financial instruments that are hedging the items affect profit or loss at the same time as those hedged items.
Hedge accounting is discontinued prospectively when the hedging relationship (or a part of a hedging relationship) ceases to meet the qualifying criteria (after considering any rebalancing of the hedging relationship, if applicable). This includes instances when the hedging instrument expires or is sold, terminated or exercised.
When the Group discontinues hedge accounting for a cash flow hedge it accounts for the amount that has been accumulated in the cash flow hedge reserve as follows:
\u2022if the hedged future cash flows are still expected to occur, that amount remains in the cash flow hedge reserve until the future cash flows occur. However, if that amount is a loss and the Group expects that all or a portion of that loss will not be recovered in one or more future periods, it immediately reclassifies the amount that is not expected to be recovered into profit or loss as a reclassification adjustment;
\u2022if the hedged future cash flows are no longer expected to occur, that amount is immediately reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment. A hedged future cash flow that is no longer highly probable to occur may still be expected to occur.
Valuation techniques and assumptions used for measuring fair value.
fAccounting policy
Quoted market prices are available for financial assets and financial liabilities with standard terms and conditions that are traded on active markets. The fair values of derivative financial instruments are equal to their quoted prices, if available. In case such quoted prices are not available, the fair value of the financial instruments is determined based on a discounted cash flow analysis using the applicable yield curve derived from quoted interest rates matching maturities of the contracts for non-optional derivatives. Optional derivatives are fair valued based on option pricing models, taking into account the present value of probability weighted expected future payoffs, using market reference formulas.
The fair values of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis.
NOTE F6
Net financial charges
fAccounting policy
Interest on borrowings is recognized in costs of borrowings as incurred, except for borrowing costs directly attributable to the acquisition, construction and production of qualifying assets (see note F20 Property, Plant and Equipment).
Net foreign exchange gains or losses on financial items and changes in fair value of derivative financial instruments related to net indebtedness are presented in \u201cOther gains and losses on net indebtedness,\u201d with the exception of changes in fair value of derivative financial instruments that are hedging instruments in a cash flow hedge relationship, and which are recognized on the same line as the hedged item, when the latter affects profit or loss.
NOTE F25
Other receivables (current)
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n VAT and other taxes | \n\n 192 | \n\n 202 | \n
| \n Advances to suppliers | \n\n 32 | \n\n 37 | \n
| \n Financial instruments - operational | \n\n 67 | \n\n 56 | \n
| \n Insurance premiums | \n\n 23 | \n\n 36 | \n
| \n Loan receivables | \n\n 3 | \n\n 5 | \n
| \n Other | \n\n 80 | \n\n 127 | \n
| \n Other current receivables | \n\n 396 | \n\n 462 | \n
In 2023, the row Other contains a pending insurance reimbursement of \u20ac32 million (see also Note F34 Other liabilities) and Fluor quotas of \u20ac16 million, which both have been settled in 2024 with Syensqo.
Financial instruments \u2013 operational includes held for trading and cash flow hedge derivatives (see note F32.A. Overview of financial instruments).
NOTE F32
Financial instruments and financial risk management
fAccounting policy
General
Financial assets and liabilities are recognized when, and only when Solvay becomes a party to the contractual provisions of the instrument.
Amortized cost is the amount at which the financial asset or financial liability is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity amount and, for financial assets, adjusted for any loss allowance. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial asset or financial liability to the gross carrying amount of a financial asset or to the amortized cost of a financial liability. When calculating the effective interest rate, the Group estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses. The calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs, and all other premiums or discounts.
Financial assets
Trade receivables are initially measured at their transaction price, if they do not contain a significant financing component, which is the case for substantially all trade receivables. Other financial assets are initially measured at fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset.
A financial asset is classified as current when the cash flows expected to flow from the instrument mature within one year.
All recognized financial assets will subsequently be measured at either amortized cost or fair value under IFRS 9 Financial Instruments, specifically:
\u2022A debt instrument that (i) is held within a business model whose objective is to collect the contractual cash flows and (ii) has contractual cash flows that are solely payments of principal and interest on the principal amount outstanding is measured at amortized cost (net of any write down for impairment), unless the asset is designated at fair value through profit or loss (FVTPL) under the fair value option.
\u2022All other debt instruments are measured at FVTPL.
\u2022All equity investments are measured in the consolidated statement of financial position at fair value, with gains and losses recognized in profit or loss except that if an equity investment is not held for trading, nor contingent consideration recognized by an acquirer in a business combination, an irrevocable election can be made at initial recognition to measure the investment at FVTOCI, with dividend income recognized in profit or loss. This classification is determined on an instrument-by-instrument basis. Upon derecognition, the cumulative gains or losses previously recognized in other comprehensive income are reclassified to retained earnings.
\u2022Equity investments in partnerships of investment funds are measured in the consolidated statement of financial position at fair value with gains and losses recognized in profit or loss. Based on the analysis of the characteristics of these funds the Group determined that they were not eligible for the FVTOCI option and therefore are accounted for at FVTPL.
\u2022For instruments quoted in an active market, the fair value corresponds to a market price (level 1). For instruments that are not quoted in an active market, the fair value is determined using valuation techniques including reference to recent arm\u2019s length market transactions or transactions involving instruments which are substantially the same (level 2), or discounted cash flow analysis including, to the greatest possible extent, assumptions consistent with observable market data (level 3). However, in limited circumstances, cost of equity instruments may be an appropriate estimate of their fair value. That may be the case if insufficient more recent information is available to measure fair value, or if there is a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.
Impairment of financial assets
\u2022The impairment loss of a financial asset measured at amortized cost is calculated based on the expected loss model, representing the weighted average of credit losses with the respective risks of a default occurring as the weights. Expected credit losses are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
\u2022For trade receivables that do not contain a significant financing component (i.e. substantially all trade receivables), the loss allowance is measured at an amount equal to lifetime expected credit losses. Those are the expected credit losses that result from all possible default events over the expected life of those trade receivables, using a provision matrix that considers historical information on defaults adjusted for the forward-looking information per customer. The Group considers a financial asset in default risk when contractual payments are 60 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is fully impaired when there is no reasonable expectation of recovering the contractual cash flows.
Impairment losses are recognized in the consolidated income statement, except for debt instruments measured at fair value through other comprehensive income.
In this case, the allowance is recognized in other comprehensive income.
Financial liabilities
Financial liabilities are initially measured at fair value minus, in the case of a financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the issue of the financial liability. Subsequently, they are measured at amortized cost, except for:
\u2022financial liabilities at fair value through profit or loss. Such liabilities, including derivatives that are liabilities, are subsequently measured at fair value;
\u2022financial guarantee contracts. After initial recognition, guarantees are subsequently measured at the higher of the expected losses and the amount initially recognized.
Derivative financial instruments
A derivative financial instrument is a financial instrument or other contract within the scope of IFRS 9 Financial Instruments with all three of the following characteristics:
\u2022its value changes in response to the change in a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract (sometimes called the \"underlying\");
\u2022it requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors;
\u2022it is settled at a future date.
The Group enters into a variety of derivative financial instruments (forward, future, option, collars and swap contracts) to manage its exposure to interest rate risk, foreign exchange rate risk, and commodity risk (mainly utility and CO2 emission rights price risks).
As explained above, derivatives are initially recognized at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in income or expense, unless the derivative is designated and effective as a hedging instrument. The Group designates certain derivatives as hedging instruments of the exposure to variability in cash flows with respect to a recognized asset or liability or a highly probable forecast transaction that could affect profit or loss (cash flow hedges).
A derivative with a positive fair value is recognized as a financial asset whereas a derivative with a negative fair value is recognized as a financial liability. Derivative instruments (or portions of them) are presented as non-current assets or non-current liabilities if the remaining maturity of the underlying settlements is more than 12 months after the reporting period. Other derivative instruments (or portions of them) are presented as current assets or current liabilities.
Hedge accounting
The Group designates certain derivatives and embedded derivatives, in respect of interest rate risk, foreign exchange rate risk, Solvay share price risk, and commodity risk (mainly utility and CO2 emission rights price risks), as hedging instruments in a cash flow hedge relationship.
At the inception of the hedge relationship, there is a formal designation and documentation of the hedging relationship and the Group\u2019s risk management objective and strategy for undertaking the hedge. So to apply hedge accounting: (a) there is an economic relationship between the hedged item and the hedging instrument, (b) the effect of credit risk does not dominate the value changes that result from that economic relationship, and (c) the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item.
The requirement under (a) above that an economic relationship exists means that there is an expectation that the value of the hedging instrument and the value of the hedged item will systematically change in the opposite direction in response to movements in either the same underlying (or underlyings that are economically related in such a way that they respond in a similar way to the risk that is being hedged).
Cash flow hedges
The effective portion of changes in the fair value of hedging instruments that are designated in a cash flow hedge is recognized in other comprehensive income.
The gain or loss relating to the ineffective portion is recognized immediately in profit or loss.
As long as cash flow hedge qualifies, the hedging relationship is accounted for as follows:
(a)the separate component of equity associated with the hedged item (cash flow hedge reserve) is adjusted to the lower of the following (in absolute amounts):
(i)the cumulative gain or loss on the hedging instrument from inception of the hedge; and
(ii)the cumulative change in fair value (present value) of the hedged item (i.e. the present value of the cumulative change in the hedged expected future cash flows) from inception of the hedge.
(b)the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge (i.e. The portion that is offset by the change in the cash flow hedge reserve calculated in accordance with (a)) is recognized in other comprehensive income;
(c)any remaining gain or loss on the hedging instrument (or any gain or loss required to balance the change in the cash flow hedge reserve calculated in accordance with (a)) is hedge ineffectiveness that is recognized in profit or loss.
(d)the amount that has been accumulated in the cash flow hedge reserve in accordance with (a) is accounted for as follows:
(i)if a hedged forecast transaction subsequently results in the recognition of a non-financial asset or a non-financial liability, the Group removes that amount from the cash flow hedge reserve and includes it directly in the initial cost or other carrying amount of the asset or the liability. This is not a reclassification adjustment and hence it does not affect other comprehensive income;
(ii)for cash flow hedges other than those covered by i), that amount is reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment in the same period or periods during which the hedged expected future cash flows affect profit or loss (for example, in the periods that interest income or interest expense is recognized or when a forecast sale occurs);
(iii)however, if that amount is a loss and the Group expects that all or a portion of that loss will not be recovered in one or more future periods, it immediately reclassifies the amount that is not expected to be recovered into profit or loss as a reclassification adjustment.
Most hedged items are transaction related. The time value of options, forward elements of forward contracts, and foreign currency basis spreads of financial instruments that are hedging the items affect profit or loss at the same time as those hedged items.
Hedge accounting is discontinued prospectively when the hedging relationship (or a part of a hedging relationship) ceases to meet the qualifying criteria (after considering any rebalancing of the hedging relationship, if applicable). This includes instances when the hedging instrument expires or is sold, terminated or exercised.
When the Group discontinues hedge accounting for a cash flow hedge it accounts for the amount that has been accumulated in the cash flow hedge reserve as follows:
\u2022if the hedged future cash flows are still expected to occur, that amount remains in the cash flow hedge reserve until the future cash flows occur. However, if that amount is a loss and the Group expects that all or a portion of that loss will not be recovered in one or more future periods, it immediately reclassifies the amount that is not expected to be recovered into profit or loss as a reclassification adjustment;
\u2022if the hedged future cash flows are no longer expected to occur, that amount is immediately reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment. A hedged future cash flow that is no longer highly probable to occur may still be expected to occur.
The following table presents the financial assets and liabilities as current or non-current according to their classification under IFRS 9.
| \n In \u20ac million | \n\n Classification | \n\n 31 December 2024 | \n\n 31 December 2023 | \n
|---|---|---|---|
| \n Carrying amount | \n\n Carrying amount | \n||
| \n Non-current assets - Financial instruments | \n\n \n | \n\n 194 | \n\n 234 | \n
| \n Available-for-sale financial assets | \n\n \n | \n\n \n | \n\n \n | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n Financial assets measured at fair value through other comprehensive income | \n\n 8 | \n\n 1 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n Financial assets measured at fair value through profit or loss | \n\n 55 | \n\n 87 | \n
| \n Loans and other non-current assets (excluding pension fund surpluses and long-term inventory balance) | \n\n Financial assets measured at amortized cost | \n\n 118 | \n\n 136 | \n
| \n Others | \n\n \n | \n\n 118 | \n\n 136 | \n
| \n Financial instruments - Operational | \n\n \n | \n\n 13 | \n\n 10 | \n
| \n Held for trading | \n\n Held for trading | \n\n 0 | \n\n 5 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship | \n\n Cash-flow hedge | \n\n 13 | \n\n 5 | \n
| \n Current assets - Financial instruments | \n\n \n | \n\n 1,448 | \n\n 1,598 | \n
| \n Trade receivables | \n\n Financial assets measured at amortized cost | \n\n 826 | \n\n 840 | \n
| \n Other financial instruments | \n\n \n | \n\n 16 | \n\n 118 | \n
| \n Other marketable securities >3 months | \n\n Financial assets measured at amortized cost | \n\n 4 | \n\n 50 | \n
| \n Currency swaps | \n\n Held for trading | \n\n 1 | \n\n 2 | \n
| \n Other current financial assets | \n\n Financial assets measured at amortized cost | \n\n 11 | \n\n 66 | \n
| \n Financial instruments - Operational | \n\n \n | \n\n 67 | \n\n 56 | \n
| \n Held for trading | \n\n Held for trading | \n\n 2 | \n\n 11 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship | \n\n Cash-flow hedge | \n\n 64 | \n\n 45 | \n
| \n Cash and cash equivalents | \n\n Financial assets measured at amortized cost | \n\n 539 | \n\n 584 | \n
| \n Total assets - Financial instruments | \n\n \n | \n\n 1,642 | \n\n 1,833 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current liabilities - Financial instruments | \n\n \n | \n\n 2,017 | \n\n 2,051 | \n
| \n Financial debt | \n\n \n | \n\n 1,983 | \n\n 1,981 | \n
| \n Bonds | \n\n Financial liabilities measured at amortized cost | \n\n 1,492 | \n\n 0 | \n
| \n Other non-current debts | \n\n Financial liabilities measured at amortized cost | \n\n 253 | \n\n 1,735 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship | \n\n Cash-flow hedge | \n\n 2 | \n\n 2 | \n
| \n Lease liabilities IFRS 16 - Non-current portion | \n\n Lease liabilities measured at amortized cost | \n\n 236 | \n\n 243 | \n
| \n Other liabilities | \n\n Financial liabilities measured at amortized cost | \n\n 21 | \n\n 39 | \n
| \n Financial instruments - Operational | \n\n \n | \n\n 13 | \n\n 32 | \n
| \n Held for trading | \n\n Held for trading | \n\n 1 | \n\n 17 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship | \n\n Cash-flow hedge | \n\n 11 | \n\n 15 | \n
| \n Current liabilities - Financial instruments | \n\n \n | \n\n 1,170 | \n\n 1,344 | \n
| \n Financial debt | \n\n \n | \n\n 155 | \n\n 211 | \n
| \n Short-term financial debt | \n\n Financial liabilities measured at amortized cost | \n\n 83 | \n\n 88 | \n
| \n Currency swaps | \n\n Held for trading | \n\n 2 | \n\n 1 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship | \n\n Cash-flow hedge | \n\n \n | \n\n 59 | \n
| \n Lease liabilities IFRS 16 - Current portion | \n\n Lease liabilities measured at amortized cost | \n\n 70 | \n\n 63 | \n
| \n Trade payables | \n\n Financial liabilities measured at amortized cost | \n\n 810 | \n\n 850 | \n
| \n Financial instruments - Operational | \n\n \n | \n\n 98 | \n\n 108 | \n
| \n Held for trading | \n\n Held for trading | \n\n 24 | \n\n 19 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship | \n\n Cash-flow hedge | \n\n 74 | \n\n 88 | \n
| \n Dividends payables | \n\n Financial liabilities measured at amortized cost | \n\n 107 | \n\n 175 | \n
| \n Total liabilities - Financial instruments | \n\n \n | \n\n 3,187 | \n\n 3,395 | \n
In 2024 and 2023, long-term CO2 inventory balances reported are not financial assets and hence are not included in the table above. They are presented as other non-current assets.
The following table gives an overview of the carrying amount of all financial instruments by category as defined by IFRS 9.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Carrying amount | \n\n Carrying amount | \n|
| \n Fair value through profit or loss | \n\n 59 | \n\n 105 | \n
| \n Held for trading (financial instruments - operational - see note F26) | \n\n 2 | \n\n 16 | \n
| \n Held for trading (other financial instruments - see note F33, table Changes in financial debt) | \n\n 1 | \n\n 2 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n 55 | \n\n 87 | \n
| \n Financial assets measured at amortized cost | \n\n 1,497 | \n\n 1,677 | \n
| \n Financial assets measured at amortized cost (including cash and cash equivalents, trade receivables, loans and other current/non-current assets except pension fund surpluses and long-term inventory balance) | \n\n 1,497 | \n\n 1,677 | \n
| \n Financial assets measured at fair value through other comprehensive income | \n\n 85 | \n\n 51 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship (see note F26) | \n\n 78 | \n\n 50 | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n 8 | \n\n 1 | \n
| \n Total financial assets | \n\n 1,642 | \n\n 1,833 | \n
| \n \n | \n\n \n | \n\n \n | \n
| \n Fair value through profit or loss | \n\n -27 | \n\n -37 | \n
| \n Held for trading (financial instruments - operational - see note F34) | \n\n -26 | \n\n -36 | \n
| \n Held for trading (financial debt - see note F33, table Changes in financial debt) | \n\n -2 | \n\n -1 | \n
| \n Financial liabilities measured at amortized cost | \n\n -2,766 | \n\n -2,887 | \n
| \n Financial liabilities measured at amortized cost (excluding dividends payable and IFRS 16 lease liabilities) | \n\n -2,659 | \n\n -2,712 | \n
| \n Dividends payables | \n\n -107 | \n\n -175 | \n
| \n Lease liabilities measured at amortized cost | \n\n -306 | \n\n -307 | \n
| \n Lease liabilities IFRS16 measured at amortized cost | \n\n -306 | \n\n -307 | \n
| \n Financial liabilities measured at fair value through other comprehensive income | \n\n -88 | \n\n -165 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship (see note F34) | \n\n -88 | \n\n -165 | \n
| \n Total financial and lease liabilities | \n\n -3,187 | \n\n -3,395 | \n
The category \u201cHeld for trading\u201d contains derivative financial instruments that are used for management of foreign currency risk, utility and CO2 emission rights price risks, index and shares. Contracts which have been documented as hedging instruments (hedge accounting under IFRS 9 Financial Instruments) or which meet the exemption criteria for own use are not included in the category \u201cHeld for trading.\u201d
At the end of 2024, \u20ac55 million of instruments at fair value through profit or loss relate to equity instruments related to Syensqo Group.
Valuation techniques and assumptions used for measuring fair value.
fAccounting policy
Quoted market prices are available for financial assets and financial liabilities with standard terms and conditions that are traded on active markets. The fair values of derivative financial instruments are equal to their quoted prices, if available. In case such quoted prices are not available, the fair value of the financial instruments is determined based on a discounted cash flow analysis using the applicable yield curve derived from quoted interest rates matching maturities of the contracts for non-optional derivatives. Optional derivatives are fair valued based on option pricing models, taking into account the present value of probability weighted expected future payoffs, using market reference formulas.
The fair values of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||
|---|---|---|---|---|
| \n Carrying amount | \n\n Fair value | \n\n Carrying amount | \n\n Fair value | \n|
| \n Non-current assets - Financial instruments | \n\n 118 | \n\n 118 | \n\n 136 | \n\n 136 | \n
| \n Loans and other non-current assets (except pension fund surpluses and long-term inventory balance) | \n\n 118 | \n\n 118 | \n\n 136 | \n\n 136 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current liabilities - Financial instruments | \n\n -1,766 | \n\n -1,814 | \n\n -1,774 | \n\n -1,774 | \n
| \n Bonds | \n\n -1,492 | \n\n -1,540 | \n\n 0 | \n\n 0 | \n
| \n Other non-current debts | \n\n -253 | \n\n -253 | \n\n -1,735 | \n\n -1,735 | \n
| \n Other liabilities | \n\n -21 | \n\n -21 | \n\n -39 | \n\n -39 | \n
The carrying amounts of current financial assets and liabilities are estimated to reasonably approximate their fair values, due to the short term to maturity.
The table \u201cFinancial instruments measured at fair value in the consolidated statement of financial position\u201d provides an analysis of financial instruments that, after their initial recognition, are measured at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable. Financial instruments classified as held for trading and as hedging instruments in cash flow hedges are mainly grouped into Levels 1 and 2. They are fair valued based on forward pricing and swap models using present value calculations. The models incorporate various inputs including foreign exchange spot and interest rates of the respective currencies, currency basis spreads between the respective currencies, interest rate curves and forward rate curves of the underlying commodity. The equity instruments measured at fair value through OCI and through profit and loss are presented within Level 1 and 3. The fair value of the instruments presented under Level 3 is measured based on the guidelines recommended by The International Private Equity and Venture Capital Valuation (IPEV).
In accordance with the Group internal rules, the responsibility for measuring the fair value level resides with (a) the Treasury department for the non-utility derivative financial instruments, and the non-derivative financial liabilities, (b) the Sustainable Development and Energy department for the utility derivative financial instruments and (c) the Finance department for non-derivative financial assets.
The Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. During the year, no such transfers have occurred.
| \n In \u20ac million | \n\n December 31, 2024 | \n|||
|---|---|---|---|---|
| \n Level 1 | \n\n Level 2 | \n\n Level 3 | \n\n Total | \n|
| \n Held for trading | \n\n 0 | \n\n 4 | \n\n 0 | \n\n 4 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Shares | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022Index | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n 55 | \n\n \n | \n\n 0 | \n\n 55 | \n
| \n \u2022Shares | \n\n 55 | \n\n \n | \n\n \n | \n\n 55 | \n
| \n Cash flow hedges | \n\n 0 | \n\n 77 | \n\n 0 | \n\n 77 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n \n | \n\n 53 | \n\n 0 | \n\n 53 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 23 | \n\n 0 | \n\n 23 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n 0 | \n\n 0 | \n\n 8 | \n\n 8 | \n
| \n \u2022Shares | \n\n \n | \n\n \n | \n\n 8 | \n\n 8 | \n
| \n Total (assets) | \n\n 55 | \n\n 81 | \n\n 8 | \n\n 144 | \n
| \n \n | \n||||
| \n Held for trading | \n\n 0 | \n\n -27 | \n\n 0 | \n\n -27 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -4 | \n\n 0 | \n\n -4 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n -18 | \n\n 0 | \n\n -18 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Index | \n\n 0 | \n\n -3 | \n\n 0 | \n\n -3 | \n
| \n Cash flow hedges | \n\n 0 | \n\n -87 | \n\n 0 | \n\n -87 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -7 | \n\n 0 | \n\n -7 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n \u2022Utility risk | \n\n \n | \n\n -47 | \n\n 0 | \n\n -47 | \n
| \n \u2022CO2 risk | \n\n \n | \n\n -32 | \n\n 0 | \n\n -32 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total (liabilities) | \n\n 0 | \n\n -115 | \n\n 0 | \n\n -115 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n|||
|---|---|---|---|---|
| \n Level 1 | \n\n Level 2 | \n\n Level 3 | \n\n Total | \n|
| \n Held for trading | \n\n 0 | \n\n 17 | \n\n 0 | \n\n 18 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 3 | \n\n 0 | \n\n 3 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 4 | \n\n 0 | \n\n 5 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Shares | \n\n \n | \n\n 8 | \n\n 0 | \n\n 8 | \n
| \n \u2022Index | \n\n 0 | \n\n 2 | \n\n 0 | \n\n 2 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n 87 | \n\n 0 | \n\n 0 | \n\n 87 | \n
| \n \u2022Shares | \n\n 87 | \n\n \n | \n\n \n | \n\n 87 | \n
| \n Cash flow hedges | \n\n 0 | \n\n 50 | \n\n 0 | \n\n 50 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 2 | \n\n 0 | \n\n 2 | \n
| \n \u2022 Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 47 | \n\n 0 | \n\n 48 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n 0 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n Total (assets) | \n\n 87 | \n\n 67 | \n\n 1 | \n\n 156 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Held for trading | \n\n 0 | \n\n -37 | \n\n 0 | \n\n -37 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -1 | \n\n 0 | \n\n -1 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n -8 | \n\n 0 | \n\n -8 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n -26 | \n\n 0 | \n\n -26 | \n
| \n \u2022 Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Index | \n\n 0 | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n Cash flow hedges | \n\n 0 | \n\n -166 | \n\n 0 | \n\n -166 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -1 | \n\n 0 | \n\n -1 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n -61 | \n\n 0 | \n\n -61 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n -59 | \n\n 0 | \n\n -59 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n -44 | \n\n 0 | \n\n -44 | \n
| \n \u2022Shares | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n Total (liabilities) | \n\n 0 | \n\n -202 | \n\n 0 | \n\n -202 | \n
The fair value of the financial instruments to manage the utility risk reduced in 2024. This is mainly explained by the fact that Solvay had decided to concentrate on its own internal consumption only and the price increase of gas and electricity in comparison to 2023.
Reconciliation of level 3 fair value measurements of financial assets and liabilities.
| \n In \u20ac million | \n\n December 31, 2024 | \n||
|---|---|---|---|
| \n At fair value through profit or loss | \n\n At fair value through other comprehensive income | \n\n Total | \n|
| \n Equity instruments | \n\n Equity instruments | \n||
| \n Opening balance at January 1 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n Total gains or losses | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Recognized in profit or loss | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Recognized in other comprehensive income | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Acquisitions | \n\n \n | \n\n 7 | \n\n 7 | \n
| \n Capital decreases | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Partial Demerger | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Transfers out of level 3 | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Derivative instruments in designated hedge accounting relationships | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Transfer to assets held for sale | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Closing balance at December 31 | \n\n 0 | \n\n 8 | \n\n 8 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n||
|---|---|---|---|
| \n At fair value through profit or loss | \n\n At fair value through other comprehensive income | \n\n Total | \n|
| \n Equity instruments | \n\n Equity instruments | \n||
| \n Opening balance at January 1 | \n\n 47 | \n\n 24 | \n\n 71 | \n
| \n Total gains or losses | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Recognized in profit or loss | \n\n 2 | \n\n \n | \n\n 2 | \n
| \n Recognized in other comprehensive income | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Acquisitions | \n\n 0 | \n\n 8 | \n\n 8 | \n
| \n Capital decreases | \n\n \n | \n\n -1 | \n\n -1 | \n
| \n Partial Demerger | \n\n -49 | \n\n -30 | \n\n -79 | \n
| \n Closing balance at December 31 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Recognized in the consolidated income statement | \n\n \n | \n\n \n | \n
| \n Recycling from OCI of derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n -7 | \n\n 39 | \n
| \n \u2022Utility risk | \n\n -4 | \n\n -1 | \n
| \n \u2022Interest rate risk | \n\n \n | \n\n \n | \n
| \n Changes in the fair value of financial instruments held for trading | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n \n | \n\n \n | \n
| \n \u2022Utility risk | \n\n -2 | \n\n 86 | \n
| \n \u2022CO2 risk | \n\n \n | \n\n 15 | \n
| \n Recognized in the gross margin | \n\n -14 | \n\n 138 | \n
| \n Recycling from OCI of derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022CO2 risk | \n\n -38 | \n\n \n | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n
| \n Changes in the fair value of financial instruments held for trading | \n\n \n | \n\n \n | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022CO2 risk | \n\n 8 | \n\n 0 | \n
| \n \u2022Shares | \n\n -3 | \n\n 0 | \n
| \n Gains and losses (time value) on derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022CO2 risk | \n\n \n | \n\n \n | \n
| \n Foreign operating exchange gains and losses | \n\n 0 | \n\n 2 | \n
| \n Recognized in other operating gains and losses | \n\n -33 | \n\n 2 | \n
| \n Recycling from OCI of derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n Changes in the fair value of financial instruments held for trading | \n\n \n | \n\n \n | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022 Shares | \n\n 0 | \n\n 0 | \n
| \n Ineffective portion of derivative financial instruments designated in cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n Recognized in results from portfolio management and reassessments | \n\n 0 | \n\n 0 | \n
| \n Net interest expense | \n\n -79 | \n\n -24 | \n
| \n Financial charge on lease liabilities | \n\n -12 | \n\n -11 | \n
| \n Other gains and losses on net indebtedness (excluding gains and losses on items not related to financial instruments) | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n -3 | \n\n 1 | \n
| \n \u2022Interest element of financial instruments | \n\n 1 | \n\n 6 | \n
| \n \u2022Others | \n\n -3 | \n\n -6 | \n
| \n Recognized in charges on net indebtedness(*) | \n\n -97 | \n\n -33 | \n
| \n Dividends from equity instruments measured at fair value through other comprehensive income | \n\n \n | \n\n \n | \n
| \n Capital gain on available-for-sale investment posted directly to the income statement | \n\n \n | \n\n \n | \n
| \n Recycling from equity of unrecognized gain and losses related to disposed available-for-sale financial assets(*) | \n\n 0 | \n\n 0 | \n
| \n Recycling from equity of impairment losses on available-for-sale financial assets(*) | \n\n 0 | \n\n 0 | \n
| \n Total recognized in the consolidated income statement | \n\n -144 | \n\n 107 | \n
(*)The note F6 Net Financial Charges shows an amount of \u20ac(76) million for 2024 (\u20ac(41) million for 2023) reported under \u201cNet cost of borrowing\u201d. This amount includes \u20ac(3) million for 2024 (\u20ac(6) million for 2023) of financial expenses not related to financial instruments that are excluded in this table from the line item \u201cRecognized in charges on net indebtedness.\u201d
The loss on highly probable sales in foreign currency recognized in gross margin for \u20ac(7) million is mainly explained by the hedging of the US$ currency and the loss recognized on utility instruments for \u20ac(4) million.
The change in fair value of financial instruments held for trading recognized in gross margin is explained by:
ha gain of \u20ac86 million in 2023, due to the price increase of gas and electricity;
In 2024, the loss of \u20ac(33) million recognized in other operating gains and losses is mainly explained by:
hA gain of \u20ac8 million (a gain of \u20ac15 million in 2023) mainly due to the price variation of CO2.
hThe loss of \u20ac(38) million recognized in other operating gains and losses is explained by the discontinuance of cash flow hedge relationship on CO2 in 2024. Refer also to F32D Other market risks.
In 2024, in the caption other gains and losses on net indebtedness, the foreign exchange income decreased by \u20ac(4) million in comparison to 2023. The gain of \u20ac1\u00a0million (\u20ac6 million for 2023) is related to the interest element of financial derivatives (forward points). The other costs decreased by \u20ac(4) million in 2024 in comparison to 2023 due to one off costs incurred in the frame of the separation plan in 2023.
Net interest expense of \u20ac79 million includes \u20ac5 million of interest rate risk recycled from OCI.
| \n In \u20ac million | \n\n Cash flow hedges | \n|||||||
|---|---|---|---|---|---|---|---|---|
| \n Foreign currency risk | \n\n Interest rate risk | \n\n Commodity risk | \n\n Total | \n|||||
| \n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n|
| \n Balance at January 1 | \n\n 1 | \n\n 13 | \n\n -61 | \n\n 0 | \n\n -87 | \n\n 67 | \n\n -148 | \n\n 81 | \n
| \n Recycling from other comprehensive income of derivative financial instruments designated in a cash flow hedge relationship | \n\n 7 | \n\n -41 | \n\n 5 | \n\n 9 | \n\n 43 | \n\n 13 | \n\n 55 | \n\n -20 | \n
| \n Effective portion of changes in fair value of cash flow hedge | \n\n -13 | \n\n 29 | \n\n 23 | \n\n -70 | \n\n -15 | \n\n -167 | \n\n -6 | \n\n -209 | \n
| \n Balance at December 31 | \n\n -5 | \n\n 1 | \n\n -33 | \n\n -61 | \n\n -60 | \n\n -87 | \n\n -99 | \n\n -148 | \n
The Group is exposed to market risk from movements in foreign exchange rates, interest rates and other market prices (utility prices, CO2 emission rights prices and equity prices). The Group\u2019s senior management oversees the management of these risks and is supported by the Treasury department (non-commodity risks) and Solvay Sustainable Development and Energy department that advise on financial risks and the appropriate financial risk governance framework for the Group. Both departments provide assurance to the Group\u2019s senior management that the Group\u2019s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Group\u2019s policies and risk objectives. Solvay uses derivative financial instruments to hedge clearly identified foreign exchange, interest rate, index, utility price and CO2 emission rights price risks (hedging instruments). All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. However, the required criteria to apply hedge accounting are not met in all cases.
Furthermore, the Group is also exposed to liquidity risks and credit risks.
The Group is an essential chemical company with operations worldwide that result in transactions denominated in foreign currencies. Consequently, the Group is exposed to exchange rate fluctuations. In 2024, the Group was mainly exposed to US Dollar, Chinese Yuan and Brazilian Real.
To mitigate its foreign currency risk, the Group has defined a hedging policy that is essentially based on the principles of financing its activities in local currency and hedges the transactional exchange risk at the time of invoicing (risk which is certain). The Group constantly monitors its activities in foreign currencies and hedges, where appropriate, the exchange rate exposures on expected cash flows (risk which is highly probable).
Exchange rate exposures are managed within approved policy parameters utilizing forward foreign exchange contracts or, when appropriate, other derivatives like currency options.
In the course of 2024, the \u20ac/US$ exchange rate moved from 1.1052 at the start of January to 1.0394 at the end of December (from 1.0674 to 1.1052 in 2023).
A fluctuation of (0.10) to the US$/\u20acexchange rate, would generate in 2024 about \u20ac33 million (\u20ac30 million for 2023) variation to the EBITDA; 64% of this variation is at conversion level and 36% at transaction level, the latter being mostly hedged. EBITDA is the key non-IFRS metric for operational performance as defined in the glossary.
At the end of 2024, a strengthening of the US dollar vs euro would increase the net debt by approximately \u20ac8 million (\u20ac0 million in 2023) per 0.10 US$/\u20acfluctuation. Conversely, a weakening of the US dollar vs euro would decrease the net debt by approximately \u20ac7 million (\u20ac0 million in 2023) per 0.10 US$/\u20acfluctuation.
The Group\u2019s currency risk can be split into two categories: translation and transactional risk.
Translation risk
The translation exchange risk is the risk affecting the Group\u2019s consolidated financial statements related to investees operating in a currency other than the euro (the Group\u2019s presentation currency).
During 2024 and 2023, the Group did not hedge the currency risk of foreign operations.
Transactional risk
The transactional risk is the exchange risk linked to a specific transaction, such as a Group entity buying or selling in a currency other than its functional currency.
To the largest extent possible, the Group manages the transactional risk on receivables and borrowings centrally and locally when centralization is not possible.
The choice of borrowing currency depends mainly on the opportunities offered by the various markets. This means that the selected currency is not necessarily that of the country in which the funds will be invested. Nonetheless, operating entities are financed essentially in their functional currencies.
In emerging countries, it is not always possible to borrow in local currency, either because funds are not available in local financial markets, or because the financial conditions are too onerous. In such a situation, the Group has to borrow in a different currency. Nonetheless, the Group considers opportunities to refinance its borrowings in emerging countries with local currency debt.
Derivatives are initially recognized at fair value at the date a derivative contract is entered into and are classified into the two categories described below.
Held for trading
The transactional risk is managed either by spot or forward contracts. Unless documented as hedging instruments (see above), derivative financial instruments are classified as held for trading.
In 2024, the notional amounts transacted to manage the transactional risk are:
ha long position of \u20ac368 million (compared to \u20ac271 million in 2023);
ha short position of \u20ac(239) million (compared to \u20ac(284) million in 2023);
hin comparison to 2023, the optimization of the cash centralization model led to a net long position increase of \u20ac142 million (mainly Chinese Yuan and US Dollar).
The following table details the notional amounts of the Group\u2019s derivatives contracts outstanding at the end of the period:
| \n In \u20ac million | \n\n Notional amount(1) | \n\n Fair value assets | \n\n Fair value liabilities | \n|||
|---|---|---|---|---|---|---|
| \n December 31 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n
| \n Held for trading long position | \n\n 368 | \n\n 271 | \n\n 1 | \n\n 1 | \n\n -1 | \n\n -1 | \n
| \n Held for trading short position | \n\n -239 | \n\n -284 | \n\n 1 | \n\n 2 | \n\n -3 | \n\n 0 | \n
| \n Total | \n\n 129 | \n\n -13 | \n\n 2 | \n\n 3 | \n\n -4 | \n\n -1 | \n
(1)Long/(short) positions (if the foreign exchange transaction does not involve the functional currency, both notional amounts are considered).
Cash flow hedge
The Group uses derivatives to hedge identified foreign exchange rate risks. It documents those as hedging instruments unless it hedges a recognized financial asset or liability when generally no cash flow hedge relationship is documented. Most hedges are transaction related.
At the end of 2024, the Group had mainly hedged highly probable sales in foreign currencies (short position) in a nominal amount of US$190 million (\u20ac183 million) and PLN55 million (\u20ac13 million). All cash flow hedge contracts that existed at the end of December 2024 will be settled within the next 12 months and will impact profit or loss during that period.
The following table details the notional amounts of Solvay\u2019s derivatives contracts outstanding at the end of the period:
Notional amounts
| \n In \u20ac million | \n\n December 31, 2024 | \n|||||||
|---|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument(1) | \n\n Notional amount of the risk exposure(1) | \n\n Percentage of exposure hedged | \n\n \n | \n\n Average hedge exchange rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Equity | \n\n Assets | \n\n Liabilities | \n||||||
| \n Cash flow hedges - Forecasted sales and purchases(3) | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n EUR/PLN | \n\n -13 | \n\n -20 | \n\n 65% | \n\n (2) | \n\n 4.37 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total EUR | \n\n -13 | \n\n -20 | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n USD/BRL | \n\n -51 | \n\n -85 | \n\n 60% | \n\n (2) | \n\n 5.40 | \n\n -2 | \n\n 0 | \n\n 2 | \n
| \n USD/CNY | \n\n -60 | \n\n -113 | \n\n 53% | \n\n (2) | \n\n 7.00 | \n\n -2 | \n\n 0 | \n\n 2 | \n
| \n USD/EUR | \n\n -42 | \n\n -82 | \n\n 52% | \n\n (2) | \n\n 1.10 | \n\n -2 | \n\n 0 | \n\n 2 | \n
| \n USD/MXN | \n\n -13 | \n\n -18 | \n\n 68% | \n\n (2) | \n\n 19.69 | \n\n -1 | \n\n 0 | \n\n 1 | \n
| \n USD/THB | \n\n -17 | \n\n -35 | \n\n 50% | \n\n (2) | \n\n 34.77 | \n\n 0 | \n\n 1 | \n\n 0 | \n
| \n Total USD | \n\n -183 | \n\n -332 | \n\n \n | \n\n \n | \n\n \n | \n\n -6 | \n\n 1 | \n\n 7 | \n
| \n Total | \n\n -196 | \n\n -352 | \n\n \n | \n\n \n | \n\n \n | \n\n -6 | \n\n 1 | \n\n 7 | \n
(1)Long/(short) positions.
(2)In compliance with Group Treasury Policy the percentage of hedged exposure will reach the progressive minimum compliance level of 60% in 2024.
(3)The hedging instruments are in the line item: \"Other Receivables\" and \"Other Liabilities\" in the statement of financial position.
| \n In \u20ac million | \n\n December 31, 2023 | \n|||||||
|---|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument(1) | \n\n Notional amount of the risk exposure(1) | \n\n Percentage of exposure hedged | \n\n \n | \n\n Average hedge exchange rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Equity | \n\n Assets | \n\n Liabilities | \n||||||
| \n Cash flow hedges - Forecasted sales and purchases(3) | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n||
| \n JPY/EUR | \n\n -1 | \n\n -1 | \n\n 50% | \n\n (2) | \n\n 126.94 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n JPY/USD | \n\n 0 | \n\n -3 | \n\n 4% | \n\n (4) | \n\n 145.33 | \n\n 1 | \n\n 1 | \n\n 0 | \n
| \n Total JPY | \n\n -1 | \n\n -4 | \n\n \n | \n\n \n | \n\n \n | \n\n 1 | \n\n 1 | \n\n 0 | \n
| \n USD/BRL | \n\n -63 | \n\n -106 | \n\n 60% | \n\n (2) | \n\n 4.78 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n USD/CNY | \n\n -68 | \n\n -138 | \n\n 49% | \n\n (2) | \n\n 6.92 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n USD/EUR | \n\n -24 | \n\n -37 | \n\n 66% | \n\n (2) | \n\n 1.13 | \n\n 2 | \n\n 1 | \n\n 1 | \n
| \n USD/MXN | \n\n -11 | \n\n -23 | \n\n 48% | \n\n (2) | \n\n 18.32 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n USD/THB | \n\n -17 | \n\n -39 | \n\n 44% | \n\n (2) | \n\n 33.75 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total USD | \n\n -184 | \n\n -342 | \n\n \n | \n\n \n | \n\n \n | \n\n 3 | \n\n 2 | \n\n 1 | \n
| \n Total | \n\n -185 | \n\n -346 | \n\n \n | \n\n \n | \n\n \n | \n\n 4 | \n\n 2 | \n\n 1 | \n
(1)Long/(short) positions.
(2)In compliance with Group Treasury Policy the percentage of hedged exposure will reach the progressive minimum compliance level of 60% in 2023.
(3)The hedging instruments are recorded in the line item: \"Other Receivables\" and \"Other Liabilities\" in the statement of financial position.
(4)In compliance with Group Treasury Policy the hedging will be stopped in 2024 due to the low materiality exposure.
Hedge relationships are seldom perfect. Therefore, ineffectiveness could arise with the result that changes in the fair value or cash flows of the hedged item that are attributable to a hedged risk and the hedging instrument do not offset within a period. The sources of hedge ineffectiveness that could potentially affect the hedging relationship during its term are listed below:
hA reduction in the amount of the forecast sales resulting in quantity or notional amount differences \u2013 the hedged item and hedging instrument are based on different quantities or notional amounts.
hA significant change in the credit risk of parties.
Timing differences \u2013 the hedged item and hedging instrument occur or are settled at different dates.
In 2024, no hedge ineffectiveness was recognized in the consolidated income statement.
See the Financial risk in the Management of risks section of this annual report for additional information on the interest rate risks management.
hInterest rate risk is managed at Group level.
hThe Group is exposed to interest rate risk because entities in the Group borrow funds at both fixed and floating interest rates. Interest rate risk is managed at Group level by maintaining an appropriate mix between fixed and floating rate borrowings.
Interest rate exposure by currency is summarized below:
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|---|
| \n Currency | \n\n Fixed rate | \n\n Floating rate | \n\n Total | \n\n Fixed rate | \n\n Floating rate | \n\n Total | \n
| \n Financial debt | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n EUR | \n\n -1,721 | \n\n -216 | \n\n -1,937 | \n\n -164 | \n\n -1,840 | \n\n -2,003 | \n
| \n USD | \n\n -146 | \n\n 0 | \n\n -146 | \n\n -137 | \n\n -2 | \n\n -139 | \n
| \n BGN | \n\n -1 | \n\n -21 | \n\n -22 | \n\n -1 | \n\n -1 | \n\n -2 | \n
| \n GBP | \n\n -8 | \n\n 0 | \n\n -8 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n KRW | \n\n -1 | \n\n -3 | \n\n -4 | \n\n -2 | \n\n -10 | \n\n -12 | \n
| \n THB | \n\n -8 | \n\n 0 | \n\n -9 | \n\n -9 | \n\n 0 | \n\n -10 | \n
| \n BRL | \n\n -5 | \n\n -2 | \n\n -7 | \n\n -8 | \n\n -2 | \n\n -10 | \n
| \n Other | \n\n -5 | \n\n -1 | \n\n -5 | \n\n -13 | \n\n -3 | \n\n -16 | \n
| \n Total | \n\n -1,895 | \n\n -243 | \n\n -2,138 | \n\n -333 | \n\n -1,859 | \n\n -2,192 | \n
| \n Cash and cash equivalents | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n EUR | \n\n \n | \n\n 271 | \n\n 271 | \n\n \n | \n\n 297 | \n\n 297 | \n
| \n USD | \n\n \n | \n\n 68 | \n\n 68 | \n\n \n | \n\n 138 | \n\n 138 | \n
| \n CAD | \n\n \n | \n\n 0 | \n\n 0 | \n\n \n | \n\n 2 | \n\n 2 | \n
| \n THB | \n\n \n | \n\n 30 | \n\n 30 | \n\n \n | \n\n 22 | \n\n 22 | \n
| \n SAR | \n\n \n | \n\n 5 | \n\n 5 | \n\n \n | \n\n 8 | \n\n 8 | \n
| \n BRL | \n\n \n | \n\n 74 | \n\n 74 | \n\n \n | \n\n 65 | \n\n 65 | \n
| \n CNY | \n\n \n | \n\n 23 | \n\n 23 | \n\n \n | \n\n 16 | \n\n 16 | \n
| \n KRW | \n\n \n | \n\n 6 | \n\n 6 | \n\n \n | \n\n 6 | \n\n 6 | \n
| \n JPY | \n\n \n | \n\n 4 | \n\n 4 | \n\n \n | \n\n 10 | \n\n 10 | \n
| \n Other | \n\n \n | \n\n 57 | \n\n 57 | \n\n \n | \n\n 20 | \n\n 20 | \n
| \n Total | \n\n \n | \n\n 539 | \n\n 539 | \n\n \n | \n\n 584 | \n\n 584 | \n
| \n Other financial instruments | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CNY | \n\n \n | \n\n 4 | \n\n 4 | \n\n \n | \n\n 12 | \n\n 12 | \n
| \n EUR | \n\n \n | \n\n 7 | \n\n 7 | \n\n \n | \n\n 65 | \n\n 65 | \n
| \n SAR | \n\n \n | \n\n 4 | \n\n 4 | \n\n \n | \n\n 4 | \n\n 4 | \n
| \n Other | \n\n \n | \n\n 1 | \n\n 1 | \n\n \n | \n\n 38 | \n\n 38 | \n
| \n Total | \n\n \n | \n\n 16 | \n\n 16 | \n\n \n | \n\n 118 | \n\n 118 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Total | \n\n -1,895 | \n\n 312 | \n\n -1,583 | \n\n -333 | \n\n -1,156 | \n\n -1,489 | \n
At the end of 2024, \u20ac1,865 million of the Group\u2019s gross debt was at fixed-rate, and is largely comprised of:
hTwo senior bonds issued in April 2024 for a total of \u20ac1,500 million maturing in 2028 and 2031 (carrying amount of \u20ac1,492 million);
hIFRS 16 lease liability for a total of \u20ac306 million (carrying amount of \u20ac306 million).
The floating-rate debt is mainly comprised of a term loan for an amount of \u20ac200 million maturing in 2026 which is subject to interest rate hedging via interest rate swaps reducing the volatility to interest rate fluctuations (discussed below).
The impact of interest rate volatility at the end of 2024 compared to 2023 is the following:
| \n In \u20ac million | \n\n Sensitivity to a + 100bp movement in EUR market interest rates | \n\n Sensitivity to a - 100bp movement in EUR market interest rates | \n||
|---|---|---|---|---|
| \n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n|
| \n Profit or loss | \n\n 0 | \n\n -7 | \n\n 0 | \n\n 6 | \n
The sensitivity to interest rates volatility on the floating gross financial debt remains insignificant at the end of 2024 compared to 2023 thanks to the interest rates hedging. Most of the sensitivity disclosed in 2023 corresponds to the remaining volatility between the maximum interest rate payable (cap strike rate) and the minimum rate (floor strike rate) following the hedging of the bridge facility (\u20ac1,500 million) via zero cost interest collar.
Effects of IBOR market developments
All the new Liquidity Facilities (RCF, Bilateral lines) have been negotiated using only SOFR reference index and not IBOR anymore. This will not have any impact financially.
The ISDA's agreements were as well amended to include the SOFR.
All the other old agreements (before June 2023) still reflect IBOR on the agreements. Banks in that case will apply market standard approach and use the new SOFR reference rate for those agreements, therefore will not have an impact on our financial charges nor relations.
Interest rate risk hedged by instrument accounted for as held for trading
In 2024 and 2023, there are no outstanding interest rate instruments accounted for as held for trading.
Interest rate risk hedged by instrument accounted for as a hedging instrument in a cash flow hedge
In comparison to 2023, the remaining interest rate hedging is the hedge executed on the \u20ac200 million floating term loan.
All the other hedging relationships were settled following the repayment of the \u20ac1,500 million bridge facility drawdown and the issuance of the senior bonds totaling \u20ac1,500 million.
| \n Cash flow hedges on floating interests rates | \n\n December 31, 2024 | \n||||||
|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument | \n\n Notional amount of the risk exposure | \n\n Percentage of exposure hedged | \n\n Hedge interest rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Assets | \n\n Liabilities | \n||||||
| \n Floating rate debt (Euribor6M) | \n\n 200 | \n\n 200 | \n\n 100% | \n\n 3.52% | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n 1.99% | \n\n 0 | \n\n 0 | \n\n 0 | \n
As of December 31, 2024, the cash-flow hedge reserve for interest rate risk also includes an amount of \u20ac 31 million related to the unwound Flexiswap hedge instruments and is recycled to profit or loss over the duration of the two bonds. On the Statement of Financial Position, the Flexiswap hedging instruments were replaced by two new instruments classified as financial debt, presented within \"Other borrowings from third parties\" in Note F33.
| \n Cash flow hedges on floating interests rates | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument | \n\n Notional amount of the risk exposure | \n\n Percentage of exposure hedged | \n\n Hedge interest rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Assets | \n\n Liabilities | \n||||||
| \n Floating rate debt (Euribor6M) | \n\n 200 | \n\n 200 | \n\n 100% | \n\n 3.52% | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n Floating rate debt (Euribor1M) | \n\n 1,500 | \n\n 1,500 | \n\n 100% | \n\n 3.55% | \n\n -1 | \n\n 0 | \n\n -1 | \n
| \n Future long-term refinancing (Euribor6M) | \n\n 750 | \n\n 750 | \n\n 100% | \n\n 3,20% + Fixed Margin | \n\n -25 | \n\n 0 | \n\n -25 | \n
| \n Future long-term refinancing (Euribor6M) | \n\n 750 | \n\n 750 | \n\n 100% | \n\n 3,05% + Fixed Margin | \n\n -33 | \n\n 0 | \n\n -33 | \n
Utility and CO2 price risks
The Group purchases a large portion of its coal, gas and electricity needs in Europe and the United States based on fluctuating liquid market indices. Moreover, the Group purchases raw materials with a price formula referring to market indices. In order to reduce the cost volatility, the Group has developed a policy for exchanging variable price against fixed price through derivative financial instruments. Most of these hedging instruments can be documented as hedging instruments of the underlying purchase contracts. Utility purchase contracts at fixed price with a physical delivery for use in the Group's operations are qualified as own use contracts and constitute a natural hedge. Those have not been included in this note.
Financial hedging of utility and CO2 emission rights price risks is managed centrally by Energy Services on behalf of the Group entities.
Energy Services also carries out trading transactions with respect to utility and CO2.
The following tables detail the notional principal amounts and fair values of utility and CO2 derivative financial instruments outstanding at the end of the reporting period:
| \n Held for trading | \n\n Notional amount of the instrument(1) | \n\n Notional amount of the instrument (in units) | \n\n Fair value of the instrument - Asset | \n\n Fair value of the instrument - Liability | \n|||||
|---|---|---|---|---|---|---|---|---|---|
| \n December 31 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n \n | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n
| \n In \u20ac million (except where indicated) | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Power | \n\n \n | \n\n 22 | \n\n \n | \n\n 118,090 | \n\n MWh | \n\n 0 | \n\n 0 | \n\n 0 | \n\n -13 | \n
| \n Standard Quality Gas | \n\n 1 | \n\n 21 | \n\n 10,220 | \n\n 811,174 | \n\n MWh | \n\n 1 | \n\n 0 | \n\n -1 | \n\n 0 | \n
| \n CO2 | \n\n 9 | \n\n 9 | \n\n 360,250 | \n\n 394,500 | \n\n Tons | \n\n 0 | \n\n 0 | \n\n -18 | \n\n -26 | \n
| \n Total | \n\n 10 | \n\n 52 | \n\n \n | \n\n \n | \n\n \n | \n\n 1 | \n\n 0 | \n\n -19 | \n\n -39 | \n
(1)The hedging instruments are located in the line item: \"Other Receivables\" and \"Other Liabilities\" in the consolidated statement of financial position.
The amounts presented in the tables hereafter include hedging needs of the GBUs of the Group that are sourced through Energy Services, and not the full Group utility hedging needs.
| \n \n | \n\n December 31, 2024 | \n|||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| \n Cash flow hedge | \n\n Notional amount of the instrument(1) | \n\n Notional amount of\u00a0the instrument (in units) | \n\n \n | \n\n Notional amount of the risk exposure | \n\n Notional amount of the risk exposure (in units) | \n\n \n | \n\n Percentage of exposure hedged | \n\n Average hedge price per\u00a0risk category | \n\n \n | \n\n Cash flow hedge reserve | \n\n Fair value of the instrument - Asset | \n\n Fair value of the instrument - Liability | \n
| \n In \u20ac million | \n||||||||||||
| \n Power | \n\n 224 | \n\n 2,205,840 | \n\n MWh | \n\n 417 | \n\n 3,772,347 | \n\n MWh | \n\n 58% | \n\n 102 | \n\n EUR/MWh | \n\n -29 | \n\n 0 | \n\n -29 | \n
| \n Standard Quality Gas | \n\n 361 | \n\n 13,463,715 | \n\n MWh | \n\n 1,056 | \n\n 26,558,004 | \n\n MWh | \n\n 51% | \n\n 22 | \n\n EUR/MWh | \n\n 35 | \n\n 53 | \n\n -18 | \n
| \n CO2(2) | \n\n 341 | \n\n 4,292,750 | \n\n Tons | \n\n 872 | \n\n 10,616,000 | \n\n Tons | \n\n 40% | \n\n 75 | \n\n EUR/Tons | \n\n -9 | \n\n 23 | \n\n -32 | \n
| \n Total | \n\n 926 | \n\n \n | \n\n \n | \n\n 2,345 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n -3 | \n\n 76 | \n\n -79 | \n
(1)The hedging instruments are in the line item: \"Other Receivables\" and \"Other Liabilities\" in the consolidated statement of financial position.
(2)Excluding the reserve frozen in OCI, following roll-over transactions (\u20ac(44) million).
| \n Cash flow hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| \n In \u20ac million | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Power | \n\n 112 | \n\n 781,326 | \n\n MWh | \n\n 181 | \n\n 1,763,316 | \n\n MWh | \n\n 44% | \n\n 142 | \n\n EUR/MWh | \n\n 30 | \n\n 33 | \n\n -3 | \n
| \n Standard Quality Gas | \n\n 245 | \n\n 12,343,602 | \n\n MWh | \n\n 579 | \n\n 24,542,118 | \n\n MWh | \n\n 50% | \n\n 27 | \n\n EUR/MWh | \n\n -41 | \n\n 15 | \n\n -56 | \n
| \n CO2(2) | \n\n 553 | \n\n 3,469,500 | \n\n Tons | \n\n 801 | \n\n 9,230,909 | \n\n Tons | \n\n 38% | \n\n 87 | \n\n EUR/Tons | \n\n -43 | \n\n 0 | \n\n -44 | \n
| \n Total | \n\n 910 | \n\n \n | \n\n \n | \n\n 1,561 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n -54 | \n\n 48 | \n\n -102 | \n
(1)The hedging instruments are located in the line item: \"Other Receivables\" and \"Other Liabilities\" in the consolidated statement of financial position.
(2)Excluding the reserve frozen in OCI, following roll-over transactions (\u20ac(33) million).
In 2024, the group changed its hedge relationship on CO2 emission rights price risk which resulted in the discontinuance of hedging cash flow hedge relationship at the end of December 2024. The related loss of \u20ac(38) million was recognized in other operating gains and losses in the consolidated income statement.
Fair value hedge
The Group covered a part of its CO2 emission rights in inventory by forward sales of CO2 emission rights to a related party. The Group qualifies this hedging strategy as fair value hedge. The change in fair value of forward sales is accounted for in profit and loss, concomitantly with the revaluation of the CO2 emission rights held in\u00a0inventory.
The Group has established a 1:1 hedge ratio for the underlying risk of the forward sales of CO2 emission rights to the related party that is identical to the hedged risk component.
The impact of the hedging instrument on the statement of financial position as at December 31, 2024, is as follows:
| \n \n | \n\n December 31, 2024 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n \n | \n\n -1 | \n\n Financial Instrument | \n\n \n | \n\n 0 | \n
| \n \n | \n\n December 31, 2024 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n 2 | \n\n \n | \n\n Inventories | \n\n 0 | \n\n \n | \n
| \n \n | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n \n | \n\n -2 | \n\n Financial Instrument | \n\n 1 | \n\n -1 | \n
| \n \n | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n \n | \n\n 2 | \n\n Inventories | \n\n 1 | \n\n \n | \n
The sensitivities of commodity derivative financial instruments as of December 31, 2024, are presented below.
The sensitivities were defined based on the price levels and volatility levels of each commodity. These assumptions do not constitute an estimation of future market prices, and the sensitivities presented are not representative of future changes in Solvay's equity and results.
| \n In \u20acmillion | \n\n December 31, 2024 | \n||
|---|---|---|---|
| \n Price change | \n\n Other comprehensive income | \n\n Profit or loss | \n|
| \n Natural gas | \n\n +10\u20ac /MWh | \n\n -102 | \n\n 0 | \n
| \n Natural gas | \n\n -10\u20ac /MWh | \n\n 102 | \n\n 0 | \n
| \n Electricity | \n\n +30\u20ac /MWh | \n\n 66 | \n\n 0 | \n
| \n Electricity | \n\n -30\u20ac /MWh | \n\n -66 | \n\n 0 | \n
| \n CO2 emission rights | \n\n +5\u20ac /T | \n\n -21 | \n\n -2 | \n
| \n CO2 emission rights | \n\n -5\u20ac /T | \n\n 21 | \n\n 2 | \n
Performance Share Units Plan (PSU) and Restricted Share Units (RSU) risk on Solvay and Syensqo share price
The last cash settled PSU plan (granted in 2021) vested on 31/12/2023 and was paid out in June 2024. The PSU/RSU plans granted as from 2022 are equity settled. The RSU plan 2022 will deliver Solvay and Syensqo shares. The PSU/RSU plans 2023 and 2024 will deliver Solvay shares only. These PSU/RSU plans are hedged with treasury shares. However, in order to neutralize the volatility of the Syensqo share price, which will impact the liability valuation relating to the RSU plan 2022, the Group has entered into a hedge (equity forward transaction) covering 100% of the risk.
See the Financial risk in the Management of risks section of this annual report for additional information on credit risk management.
The Group continuously monitors the credit risk of important business partners.
The Group engages in transactions only with financial institutions with a good credit rating. The Group monitors and manages exposures to financial institutions within approved counterparty credit limits and credit risk parameters in order to mitigate the risk of default. For financial guarantees, see note F36 Contingent liabilities and financial guarantees.
The Group recognizes expected credit losses on all of its trade receivables: it applies the simplified approach and recognizes lifetime expected losses on all trade receivables, using a provision matrix in order to calculate the lifetime expected credit losses for trade receivables, using historical information on defaults adjusted for the forward-looking information.
The Group classifies the customers and their related receivables in various rating classes, based on the risks\u2019 grading attributed to the customers and on the aging balance of receivables. As such, for all receivables overdue below six months, the Group considers percentages within a range between 0.005% and 4.031%, depending on the rating class. For all receivables overdue in excess of six months, the Group considers a rate of 50% or of 100%, depending on the rating class. The customer\u2019s grading is reviewed annually for customers assessed as low risk profile, and every six months for customers assessed as higher risk profile.
There is no significant concentration of credit risk at Group level because the receivables\u2019 credit risk is spread over a large number of customers and markets.
The aging of trade receivables, financial instruments \u2013 operational, loans and other non-current assets is as follows:
| \n December 31, 2024 | \n\n With expected loss allowance, not credit-impaired | \n||||||
|---|---|---|---|---|---|---|---|
| \n In \u20ac million | \n\n Total | \n\n Credit-impaired | \n\n not past due | \n\n less than 30 days past due | \n\n between 30 and 60 days past due | \n\n between 60 and 90 days past due | \n\n more than 90 days past due | \n
| \n Trade receivables | \n\n 850 | \n\n 22 | \n\n 804 | \n\n 18 | \n\n 1 | \n\n 2 | \n\n 2 | \n
| \n Trade receivables - allowance | \n\n -23 | \n\n -20 | \n\n -1 | \n\n \n | \n\n \n | \n\n \n | \n\n -2 | \n
| \n Trade receivables - net | \n\n 826 | \n\n 2 | \n\n 803 | \n\n 18 | \n\n 1 | \n\n 2 | \n\n 0 | \n
| \n Financial instruments - operational | \n\n 80 | \n\n \n | \n\n 80 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets(1) | \n\n 116 | \n\n 4 | \n\n 111 | \n\n 0 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - allowance | \n\n -4 | \n\n -4 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - net(1) | \n\n 112 | \n\n 0 | \n\n 111 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total | \n\n 1,018 | \n\n 3 | \n\n 994 | \n\n 18 | \n\n 1 | \n\n 2 | \n\n 0 | \n
(1)Loans and other non-current assets do not include pension fund surplus and CO2 -term inventory.
| \n December 31, 2023 | \n\n With expected loss allowance, not credit-impaired | \n||||||
|---|---|---|---|---|---|---|---|
| \n In \u20ac million | \n\n Total | \n\n Credit-impaired | \n\n not past due | \n\n less than 30 days past due | \n\n between 30 and 60 days past due | \n\n between 60 and 90 days past due | \n\n more than 90 days past due | \n
| \n Trade receivables | \n\n 894 | \n\n 55 | \n\n 802 | \n\n 28 | \n\n 1 | \n\n 6 | \n\n 3 | \n
| \n Trade receivables - allowance | \n\n -54 | \n\n -53 | \n\n -1 | \n\n \n | \n\n \n | \n\n \n | \n\n -1 | \n
| \n Trade receivables - net | \n\n 840 | \n\n 3 | \n\n 801 | \n\n 28 | \n\n 1 | \n\n 6 | \n\n 2 | \n
| \n Financial instruments - operational | \n\n 66 | \n\n \n | \n\n 66 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets(1) | \n\n 140 | \n\n 4 | \n\n 135 | \n\n 0 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - allowance | \n\n -4 | \n\n -4 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - net(1) | \n\n 136 | \n\n 0 | \n\n 135 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total | \n\n 1,042 | \n\n 3 | \n\n 1,002 | \n\n 28 | \n\n 1 | \n\n 6 | \n\n 2 | \n
(1) Loans and other non-current assets do not include pension fund surplus and CO2 emission rights inventory.
The table below presents the allowances on trade receivables:
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n January 1 | \n\n -54 | \n\n -72 | \n
| \n Additions | \n\n -3 | \n\n -11 | \n
| \n Uses | \n\n 12 | \n\n 5 | \n
| \n Reversal | \n\n 15 | \n\n 9 | \n
| \n Currency translation differences | \n\n 2 | \n\n -1 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n
| \n Partial Demerger | \n\n \n | \n\n 14 | \n
| \n Other | \n\n 5 | \n\n 0 | \n
| \n December 31 | \n\n -23 | \n\n -54 | \n
See the Financial risk in the Management of risks section of this annual report for additional information on the liquidity risk management.
Liquidity risk relates to Solvay\u2019s ability to service and refinance its debt (including notes issued) and to fund its operations.
This depends on its ability to generate cash from operations and not to overpay for acquisitions. In addition, external factors impacting the global liquidity markets could also make financing sources less accessible.
The Finance Committee gives its opinion on the appropriate liquidity risk management for the Group\u2019s short-, medium-, and long-term funding and liquidity management requirements.
The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecasts and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
The Group staggers the maturities of its financing sources over time in order to limit amounts to be refinanced each year.
The following tables detail the Group\u2019s remaining contractual maturity for its financial liabilities with contractual repayment periods.
The tables have been prepared using the discounted cash flows of financial liabilities, based on the earliest date on which the Group can be required to pay.
The following tables present discounted amounts (carrying amounts):
| \n In \u20ac million | \n\n December 31, 2024 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 809 | \n\n 809 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 107 | \n\n 107 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 111 | \n\n 98 | \n\n 13 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 21 | \n\n \n | \n\n 5 | \n\n 5 | \n\n 11 | \n
| \n Financial debt | \n\n 1,831 | \n\n 84 | \n\n 217 | \n\n 777 | \n\n 753 | \n
| \n Leasing debt | \n\n 306 | \n\n 70 | \n\n 36 | \n\n 92 | \n\n 108 | \n
| \n Total | \n\n 3,186 | \n\n 1,169 | \n\n 271 | \n\n 874 | \n\n 872 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 850 | \n\n 850 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 175 | \n\n 175 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 140 | \n\n 108 | \n\n 32 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 34 | \n\n \n | \n\n 12 | \n\n 2 | \n\n 20 | \n
| \n Financial debt | \n\n 1,885 | \n\n 148 | \n\n 1,711 | \n\n 23 | \n\n 3 | \n
| \n Leasing debt | \n\n 307 | \n\n 63 | \n\n 44 | \n\n 92 | \n\n 107 | \n
| \n Total | \n\n 3,390 | \n\n 1,344 | \n\n 1,799 | \n\n 117 | \n\n 130 | \n
The following tables present undiscounted amounts (nominal value):
| \n In \u20ac million | \n\n December 31, 2024 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 809 | \n\n 809 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 107 | \n\n 107 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 111 | \n\n 98 | \n\n 13 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 21 | \n\n \n | \n\n 5 | \n\n 5 | \n\n 11 | \n
| \n Financial debt | \n\n 1,842 | \n\n 84 | \n\n 219 | \n\n 781 | \n\n 757 | \n
| \n Leasing debt | \n\n 306 | \n\n 70 | \n\n 36 | \n\n 92 | \n\n 108 | \n
| \n Total | \n\n 3,196 | \n\n 1,169 | \n\n 273 | \n\n 878 | \n\n 876 | \n
| \n Interests on financial debt and lease liabilities | \n\n 412 | \n\n 75 | \n\n 71 | \n\n 174 | \n\n 91 | \n
| \n Total outflows of cash | \n\n 3,608 | \n\n 1,244 | \n\n 345 | \n\n 1,052 | \n\n 967 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 850 | \n\n 850 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 175 | \n\n 175 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 140 | \n\n 108 | \n\n 32 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 34 | \n\n \n | \n\n 12 | \n\n 2 | \n\n 20 | \n
| \n Financial debt | \n\n 1,886 | \n\n 148 | \n\n 1,711 | \n\n 23 | \n\n 4 | \n
| \n Leasing debt | \n\n 307 | \n\n 63 | \n\n 44 | \n\n 92 | \n\n 107 | \n
| \n Total | \n\n 3,391 | \n\n 1,344 | \n\n 1,799 | \n\n 117 | \n\n 131 | \n
| \n Interests on financial debt and lease liabilities | \n\n 179 | \n\n 82 | \n\n 61 | \n\n 17 | \n\n 19 | \n
| \n Total outflows of cash | \n\n 3,570 | \n\n 1,426 | \n\n 1,860 | \n\n 134 | \n\n 150 | \n
Solvay\u2019s liquidity amounts to \u20ac2.0 billion including \u20ac0.6 billion of cash and cash equivalents on the statement of financial position and \u20ac1.4 billion of committed fully undrawn credit facilities (\u20ac1.1 billion multilateral RCF maturing in 2029 with extension possibility, and \u20ac0.3 billion bilateral RCF maturing in 2027 with extension possibilities) unused at the end of December 2024.
In addition, Solvay has access to a Belgian Treasury Bill program for \u20ac1.0 billion (no outstanding balance on December 31, 2024). The program is covered by a back-up credit line.
See below (section F32.E) for further details on supplier financing programs within trade payables.
fAccounting policy
General
The Group classifies financial liabilities that arise from supplier finance arrangements within Trade and other payables in the statement of financial position if they have a similar nature and function to trade payables. This is the case if the supplier finance arrangement is part of the working capital used in the Group\u2019s normal operating cycle, the level of security provided is similar to trade payables and the terms of the liabilities that are part of the supply chain finance arrangement are not substantially different from the terms of trade payables that are not part of the arrangement. Cash flows related to liabilities arising from supplier finance arrangements that are classified in Trade and other payables in the consolidated statement of financial position are included in operating activities in the consolidated statement of cash flows.
First application in 2024
This disclosure requirement was introduced by the Amendments Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7), published in May 2023 by the IASB. The amendments are effective for periods beginning on or after 1 January 2024. In the year of initial application, the requirements only apply to the annual financial report and the disclosure does not need to provide the comparative figures.
Terms and conditions
The Group has established a supplier finance arrangement that is offered to some of the Group\u2019s key suppliers. Participation in the arrangement is at the suppliers\u2019 own discretion. Suppliers that participate in the supplier finance arrangement will receive early payment on invoices sent to the Group from the Group\u2019s external finance provider. If suppliers choose to receive early payment, they pay a fee to the finance provider, to which the Group is not a party. For the finance provider to pay the invoices, the goods must have been received or supplied and the invoices approved by the Group. Payments to suppliers ahead of the invoice due date are processed by the finance provider and, in all cases, the Group settles the original invoice by paying the finance provider in line with the original invoice maturity date described above.
The Group assesses each arrangement against indicators to determine if the liabilities which suppliers have sold to the partner bank under the supplier financing scheme continue to meet the definition of trade payables or should be classified as financial debt. On December 31, 2024 and 2023, all trade payables subject to the supplier finance arrangement meet the criteria of trade payables and are included in trade payables in the consolidated statement of financial position.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n\n January 1, 2023 | \n
|---|---|---|---|
| \n Carrying amount of financial liabilities | \n\n \n | \n\n \n | \n\n \n | \n
| \n Presented in trade and other payables | \n\n 62 | \n\n N/A | \n\n N/A | \n
| \n \u2022of which suppliers have received payment from finance provider | \n\n 47 | \n\n N/A | \n\n N/A | \n
| \n Range of payment due dates (days after the invoice date) | \n\n \n | \n\n \n | \n\n \n | \n
| \n Liabilities that are part of the arrangement | \n\n 102-106 days | \n\n N/A | \n\n N/A | \n
| \n Comparable trade payables that are not part of the arrangements | \n\n 45-49 days | \n\n N/A | \n\n N/A | \n
NOTE F33
Net indebtedness
The Group\u2019s net indebtedness is the balance between its financial debts and other financial instruments, and cash and cash equivalents.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Financial debt | \n\n 2,138 | \n\n 2,192 | \n
| \n Cash and cash equivalents | \n\n -539 | \n\n -584 | \n
| \n Other financial instruments | \n\n -16 | \n\n -118 | \n
| \n Net indebtedness | \n\n 1,583 | \n\n 1,489 | \n
The financial debt at the end of 2024 includes:
htwo senior bonds for a total of \u20ac1,500 million (\u20ac750 million maturing in 2028 and \u20ac750 million maturing in 2031);
ha term loan for an amount of \u20ac200 million;
hthe lease debt IFRS16 \u20ac306 million;
hother financial debt (\u20ac140 million, excluding lease debt) mainly in current financial debt.
Solvay is Investment Grade rating BBB-/A3 (stable outlook) by Standard & Poor\u2019s (as of December 4, 2024).
| \n In \u20ac million (except where indicated) | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|---|
| \n Nominal amount | \n\n Coupon | \n\n Maturity | \n\n Secured | \n\n Amount at amortized cost | \n\n Fair value | \n\n Amount at amortized cost | \n\n Fair value | \n|
| \n 2028 Bonds (issuance \u20ac 750 million) | \n\n 750 | \n\n 3.875% | \n\n 2028 | \n\n No | \n\n 746 | \n\n 766 | \n\n n/a | \n\n n/a | \n
| \n 2031 Bonds (issuance \u20ac 750 million) | \n\n 750 | \n\n 4.250% | \n\n 2031 | \n\n No | \n\n 746 | \n\n 774 | \n\n n/a | \n\n n/a | \n
| \n Total senior \u20ac notes | \n\n 1,500 | \n\n \n | \n\n \n | \n\n \n | \n\n 1,492 | \n\n 1,540 | \n\n 0 | \n\n 0 | \n
| \n Credit lines Drawdown (\u20ac 1,500 million) | \n\n \n | \n\n Floating rate | \n\n 2025 | \n\n No | \n\n 0 | \n\n 0 | \n\n 1,500 | \n\n 1,500 | \n
| \n Total Bridge facilities(1) | \n\n 0 | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n\n 0 | \n\n 1,500 | \n\n 1,500 | \n
| \n Term loan (\u20ac 200 million) | \n\n 200 | \n\n Floating rate | \n\n 2026 | \n\n \n | \n\n 200 | \n\n 200 | \n\n 200 | \n\n 200 | \n
| \n Other borrowings from third parties | \n\n 140 | \n\n \n | \n\n \n | \n\n \n | \n\n 140 | \n\n 140 | \n\n 185 | \n\n 185 | \n
| \n Lease debts IFRS16 | \n\n 306 | \n\n \n | \n\n \n | \n\n \n | \n\n 306 | \n\n 306 | \n\n 307 | \n\n 307 | \n
| \n Total | \n\n 2,146 | \n\n \n | \n\n \n | \n\n \n | \n\n 2,138 | \n\n 2,186 | \n\n 2,192 | \n\n 2,192 | \n
(1)In 2023, the outstanding Solvay bridge facility had an initial maturity in October 2024, but the company had an unconditional right to extend two times the maturity by 6 months, until October 2025. The bridge facility was therefore classified as non-current.
There are no instances of default on the above-mentioned financial debts. There are no financial covenants breach, neither on Solvay SA/NV, nor on any of the Group\u2019s holding companies.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Non-current other financial instruments | \n\n 0 | \n\n 0 | \n
| \n Current other financial instruments | \n\n 16 | \n\n 119 | \n
| \n Currency swaps | \n\n 1 | \n\n 2 | \n
| \n Other marketable securities > 3 months | \n\n 4 | \n\n 50 | \n
| \n Other current financial assets | \n\n 11 | \n\n 67 | \n
| \n Other financial instruments | \n\n 16 | \n\n 119 | \n
The other marketable securities >3 months include the bank drafts position.
In 2024, the decrease in other current financial assets is explained by the transfers of CO2 derivative financial instruments to the OTC market (previously traded in the exchange market). As a consequence, margin calls of Energy Services for instruments with a negative fair value that represented collateral for the obligations decreased.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Cash | \n\n 211 | \n\n 300 | \n
| \n Term deposits | \n\n 328 | \n\n 285 | \n
| \n Cash and cash equivalents | \n\n 539 | \n\n 584 | \n
By their nature, the carrying amount of cash and cash equivalents is equal to, or a very good proxy of, its fair value.
As at December 31, 2024 and December 31, 2023, cash and cash equivalents were not subject to statutory, regulatory, or contractual restrictions and there were no material limitations on the ability to transfer cash or cash-equivalents within the group.
| \n In \u20ac million | \n\n Dec 31, 2023 | \n\n 2024 | \n|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| \n Total | \n\n Cash flows from increase of borrowings | \n\n Cash flows from repayment of borrowings | \n\n Changes in foreign exchange rates | \n\n Changes in other current financial assets | \n\n Other in financing cash flows | \n\n Transfer from non-current to current | \n\n Payment of lease liabilities | \n\n Other | \n\n Partial Demerger | \n\n Total | \n|
| \n Bonds | \n\n - | \n\n 1,492 | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n 1,492 | \n
| \n Other non-current debts | \n\n 1,737 | \n\n - | \n\n -1,500 | \n\n 0 | \n\n - | \n\n - | \n\n -11 | \n\n - | \n\n 30 | \n\n 0 | \n\n 255 | \n
| \n Long-term finance lease debt | \n\n 243 | \n\n - | \n\n - | \n\n 7 | \n\n - | \n\n - | \n\n -70 | \n\n - | \n\n 55 | \n\n - | \n\n 236 | \n
| \n Interests rate swaps | \n\n 2 | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n 0 | \n\n - | \n\n 2 | \n
| \n Non-current financial debt | \n\n 1,983 | \n\n 1,492 | \n\n -1,500 | \n\n 7 | \n\n - | \n\n - | \n\n -81 | \n\n - | \n\n 85 | \n\n 0 | \n\n 1,985 | \n
| \n Current financial debt | \n\n 211 | \n\n 191 | \n\n -242 | \n\n 0 | \n\n - | \n\n - | \n\n 81 | \n\n -64 | \n\n -22 | \n\n 0 | \n\n 156 | \n
| \n Total financial debt | \n\n 2,192 | \n\n 1,683 | \n\n -1,742 | \n\n 7 | \n\n - | \n\n - | \n\n - | \n\n -64 | \n\n 63 | \n\n 0 | \n\n 2,138 | \n
| \n Other Non-current financial instruments | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n
| \n Currency swaps | \n\n -2 | \n\n - | \n\n - | \n\n 0 | \n\n - | \n\n - | \n\n - | \n\n - | \n\n 1 | \n\n - | \n\n -1 | \n
| \n Other marketable securities > 3 months | \n\n -50 | \n\n - | \n\n - | \n\n 0 | \n\n 9 | \n\n 38 | \n\n - | \n\n - | \n\n - | \n\n - | \n\n -4 | \n
| \n Other current financial assets | \n\n -67 | \n\n - | \n\n - | \n\n 0 | \n\n 49 | \n\n - | \n\n - | \n\n - | \n\n 7 | \n\n - | \n\n -11 | \n
| \n Other financial instruments | \n\n -119 | \n\n - | \n\n - | \n\n 0 | \n\n 58 | \n\n 38 | \n\n - | \n\n - | \n\n 8 | \n\n - | \n\n -16 | \n
| \n Total | \n\n \n | \n\n 1,683 | \n\n -1,742 | \n\n 7 | \n\n 58 | \n\n 38 | \n\n - | \n\n -64 | \n\n 70 | \n\n 0 | \n\n 50 | \n
The financial debt decreased from \u20ac2,192 million at the end of 2023 to \u20ac2,138 million at the end of 2024.
The non-current financial debt in 2024 is stable compared to 2023. It is explained by:
hthe increase of \u20ac1,584 million, which is mainly explained by:
\u2014the issuance of two senior bonds for a total of \u20ac1,492 million,
\u2014two new instruments classified as financial debt for \u20ac30 million (non-current portion) following the unwinding of flexi-swaps transacted in 2023,
\u2014the increase of the long-term lease (IFRS 16) debt for \u20ac50 million,
\u2014the change in foreign exchange rates for \u20ac7 million.
hthe decrease of \u20ac(1,581) million, which is mainly explained by:
\u2014the repayment of \u20ac(1,500) million bridge facility set up at the end of 2023 in relation to the Partial Demerger
\u2014the transfer to current financial debt for \u20ac(70) million mainly on lease liabilities
The current financial debt decreased by \u20ac(56) million, is mainly resulting from:
hthe increase in borrowings of \u20ac191 million mainly explained by the drawdowns on credit lines of \u20ac185 million
hthe decrease of \u20ac(264) million explained by the repayment of the drawdowns on credit lines for \u20ac(185) million, the repayment of a current loan payable for \u20ac(52)\u00a0million, and net impact of unwinding of flexi-swaps transacted in 2023 for \u20ac(22) million
hthe transfer from non-current financial debt for \u20ac81 million mainly on lease liabilities
hthe repayment of lease (IFRS 16) debts of \u20ac(64) million.
NOTE F34
Other liabilities (current)
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Wages and benefits debts | \n\n 123 | \n\n 125 | \n
| \n VAT and other taxes | \n\n 105 | \n\n 107 | \n
| \n Social security | \n\n 18 | \n\n 29 | \n
| \n Financial instruments - operational | \n\n 98 | \n\n 108 | \n
| \n Insurance premiums | \n\n 14 | \n\n 31 | \n
| \n Advances from customers | \n\n 21 | \n\n 30 | \n
| \n Long Term Incentive - current part | \n\n 17 | \n\n 31 | \n
| \n Other | \n\n 61 | \n\n 126 | \n
| \n Other current liabilities | \n\n 458 | \n\n 585 | \n
The decrease in \u201cOther\u201d when compared to 2023 is primarily related to the Insurance reimbursement of \u20ac32 million (payable to Syensqo) which was outstanding at December 31, 2023 (see note F25 Other receivables) and paid in 2024.
Financial instruments \u2013 operational include held for trading and cash flow hedge derivatives (see note F32 Overview of financial instruments).
NOTE F6
Net financial charges
fAccounting policy
Interest on borrowings is recognized in costs of borrowings as incurred, except for borrowing costs directly attributable to the acquisition, construction and production of qualifying assets (see note F20 Property, Plant and Equipment).
Net foreign exchange gains or losses on financial items and changes in fair value of derivative financial instruments related to net indebtedness are presented in \u201cOther gains and losses on net indebtedness,\u201d with the exception of changes in fair value of derivative financial instruments that are hedging instruments in a cash flow hedge relationship, and which are recognized on the same line as the hedged item, when the latter affects profit or loss.
NOTE F33
Net indebtedness
The Group\u2019s net indebtedness is the balance between its financial debts and other financial instruments, and cash and cash equivalents.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Financial debt | \n\n 2,138 | \n\n 2,192 | \n
| \n Cash and cash equivalents | \n\n -539 | \n\n -584 | \n
| \n Other financial instruments | \n\n -16 | \n\n -118 | \n
| \n Net indebtedness | \n\n 1,583 | \n\n 1,489 | \n
The financial debt at the end of 2024 includes:
htwo senior bonds for a total of \u20ac1,500 million (\u20ac750 million maturing in 2028 and \u20ac750 million maturing in 2031);
ha term loan for an amount of \u20ac200 million;
hthe lease debt IFRS16 \u20ac306 million;
hother financial debt (\u20ac140 million, excluding lease debt) mainly in current financial debt.
Solvay is Investment Grade rating BBB-/A3 (stable outlook) by Standard & Poor\u2019s (as of December 4, 2024).
| \n In \u20ac million (except where indicated) | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|---|
| \n Nominal amount | \n\n Coupon | \n\n Maturity | \n\n Secured | \n\n Amount at amortized cost | \n\n Fair value | \n\n Amount at amortized cost | \n\n Fair value | \n|
| \n 2028 Bonds (issuance \u20ac 750 million) | \n\n 750 | \n\n 3.875% | \n\n 2028 | \n\n No | \n\n 746 | \n\n 766 | \n\n n/a | \n\n n/a | \n
| \n 2031 Bonds (issuance \u20ac 750 million) | \n\n 750 | \n\n 4.250% | \n\n 2031 | \n\n No | \n\n 746 | \n\n 774 | \n\n n/a | \n\n n/a | \n
| \n Total senior \u20ac notes | \n\n 1,500 | \n\n \n | \n\n \n | \n\n \n | \n\n 1,492 | \n\n 1,540 | \n\n 0 | \n\n 0 | \n
| \n Credit lines Drawdown (\u20ac 1,500 million) | \n\n \n | \n\n Floating rate | \n\n 2025 | \n\n No | \n\n 0 | \n\n 0 | \n\n 1,500 | \n\n 1,500 | \n
| \n Total Bridge facilities(1) | \n\n 0 | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n\n 0 | \n\n 1,500 | \n\n 1,500 | \n
| \n Term loan (\u20ac 200 million) | \n\n 200 | \n\n Floating rate | \n\n 2026 | \n\n \n | \n\n 200 | \n\n 200 | \n\n 200 | \n\n 200 | \n
| \n Other borrowings from third parties | \n\n 140 | \n\n \n | \n\n \n | \n\n \n | \n\n 140 | \n\n 140 | \n\n 185 | \n\n 185 | \n
| \n Lease debts IFRS16 | \n\n 306 | \n\n \n | \n\n \n | \n\n \n | \n\n 306 | \n\n 306 | \n\n 307 | \n\n 307 | \n
| \n Total | \n\n 2,146 | \n\n \n | \n\n \n | \n\n \n | \n\n 2,138 | \n\n 2,186 | \n\n 2,192 | \n\n 2,192 | \n
(1)In 2023, the outstanding Solvay bridge facility had an initial maturity in October 2024, but the company had an unconditional right to extend two times the maturity by 6 months, until October 2025. The bridge facility was therefore classified as non-current.
There are no instances of default on the above-mentioned financial debts. There are no financial covenants breach, neither on Solvay SA/NV, nor on any of the Group\u2019s holding companies.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Non-current other financial instruments | \n\n 0 | \n\n 0 | \n
| \n Current other financial instruments | \n\n 16 | \n\n 119 | \n
| \n Currency swaps | \n\n 1 | \n\n 2 | \n
| \n Other marketable securities > 3 months | \n\n 4 | \n\n 50 | \n
| \n Other current financial assets | \n\n 11 | \n\n 67 | \n
| \n Other financial instruments | \n\n 16 | \n\n 119 | \n
The other marketable securities >3 months include the bank drafts position.
In 2024, the decrease in other current financial assets is explained by the transfers of CO2 derivative financial instruments to the OTC market (previously traded in the exchange market). As a consequence, margin calls of Energy Services for instruments with a negative fair value that represented collateral for the obligations decreased.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Cash | \n\n 211 | \n\n 300 | \n
| \n Term deposits | \n\n 328 | \n\n 285 | \n
| \n Cash and cash equivalents | \n\n 539 | \n\n 584 | \n
By their nature, the carrying amount of cash and cash equivalents is equal to, or a very good proxy of, its fair value.
As at December 31, 2024 and December 31, 2023, cash and cash equivalents were not subject to statutory, regulatory, or contractual restrictions and there were no material limitations on the ability to transfer cash or cash-equivalents within the group.
| \n In \u20ac million | \n\n Dec 31, 2023 | \n\n 2024 | \n|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| \n Total | \n\n Cash flows from increase of borrowings | \n\n Cash flows from repayment of borrowings | \n\n Changes in foreign exchange rates | \n\n Changes in other current financial assets | \n\n Other in financing cash flows | \n\n Transfer from non-current to current | \n\n Payment of lease liabilities | \n\n Other | \n\n Partial Demerger | \n\n Total | \n|
| \n Bonds | \n\n - | \n\n 1,492 | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n 1,492 | \n
| \n Other non-current debts | \n\n 1,737 | \n\n - | \n\n -1,500 | \n\n 0 | \n\n - | \n\n - | \n\n -11 | \n\n - | \n\n 30 | \n\n 0 | \n\n 255 | \n
| \n Long-term finance lease debt | \n\n 243 | \n\n - | \n\n - | \n\n 7 | \n\n - | \n\n - | \n\n -70 | \n\n - | \n\n 55 | \n\n - | \n\n 236 | \n
| \n Interests rate swaps | \n\n 2 | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n 0 | \n\n - | \n\n 2 | \n
| \n Non-current financial debt | \n\n 1,983 | \n\n 1,492 | \n\n -1,500 | \n\n 7 | \n\n - | \n\n - | \n\n -81 | \n\n - | \n\n 85 | \n\n 0 | \n\n 1,985 | \n
| \n Current financial debt | \n\n 211 | \n\n 191 | \n\n -242 | \n\n 0 | \n\n - | \n\n - | \n\n 81 | \n\n -64 | \n\n -22 | \n\n 0 | \n\n 156 | \n
| \n Total financial debt | \n\n 2,192 | \n\n 1,683 | \n\n -1,742 | \n\n 7 | \n\n - | \n\n - | \n\n - | \n\n -64 | \n\n 63 | \n\n 0 | \n\n 2,138 | \n
| \n Other Non-current financial instruments | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n
| \n Currency swaps | \n\n -2 | \n\n - | \n\n - | \n\n 0 | \n\n - | \n\n - | \n\n - | \n\n - | \n\n 1 | \n\n - | \n\n -1 | \n
| \n Other marketable securities > 3 months | \n\n -50 | \n\n - | \n\n - | \n\n 0 | \n\n 9 | \n\n 38 | \n\n - | \n\n - | \n\n - | \n\n - | \n\n -4 | \n
| \n Other current financial assets | \n\n -67 | \n\n - | \n\n - | \n\n 0 | \n\n 49 | \n\n - | \n\n - | \n\n - | \n\n 7 | \n\n - | \n\n -11 | \n
| \n Other financial instruments | \n\n -119 | \n\n - | \n\n - | \n\n 0 | \n\n 58 | \n\n 38 | \n\n - | \n\n - | \n\n 8 | \n\n - | \n\n -16 | \n
| \n Total | \n\n \n | \n\n 1,683 | \n\n -1,742 | \n\n 7 | \n\n 58 | \n\n 38 | \n\n - | \n\n -64 | \n\n 70 | \n\n 0 | \n\n 50 | \n
The financial debt decreased from \u20ac2,192 million at the end of 2023 to \u20ac2,138 million at the end of 2024.
The non-current financial debt in 2024 is stable compared to 2023. It is explained by:
hthe increase of \u20ac1,584 million, which is mainly explained by:
\u2014the issuance of two senior bonds for a total of \u20ac1,492 million,
\u2014two new instruments classified as financial debt for \u20ac30 million (non-current portion) following the unwinding of flexi-swaps transacted in 2023,
\u2014the increase of the long-term lease (IFRS 16) debt for \u20ac50 million,
\u2014the change in foreign exchange rates for \u20ac7 million.
hthe decrease of \u20ac(1,581) million, which is mainly explained by:
\u2014the repayment of \u20ac(1,500) million bridge facility set up at the end of 2023 in relation to the Partial Demerger
\u2014the transfer to current financial debt for \u20ac(70) million mainly on lease liabilities
The current financial debt decreased by \u20ac(56) million, is mainly resulting from:
hthe increase in borrowings of \u20ac191 million mainly explained by the drawdowns on credit lines of \u20ac185 million
hthe decrease of \u20ac(264) million explained by the repayment of the drawdowns on credit lines for \u20ac(185) million, the repayment of a current loan payable for \u20ac(52)\u00a0million, and net impact of unwinding of flexi-swaps transacted in 2023 for \u20ac(22) million
hthe transfer from non-current financial debt for \u20ac81 million mainly on lease liabilities
hthe repayment of lease (IFRS 16) debts of \u20ac(64) million.
NOTE F6
Net financial charges
fAccounting policy
Interest on borrowings is recognized in costs of borrowings as incurred, except for borrowing costs directly attributable to the acquisition, construction and production of qualifying assets (see note F20 Property, Plant and Equipment).
Net foreign exchange gains or losses on financial items and changes in fair value of derivative financial instruments related to net indebtedness are presented in \u201cOther gains and losses on net indebtedness,\u201d with the exception of changes in fair value of derivative financial instruments that are hedging instruments in a cash flow hedge relationship, and which are recognized on the same line as the hedged item, when the latter affects profit or loss.
NOTE F6
Net financial charges
fAccounting policy
Interest on borrowings is recognized in costs of borrowings as incurred, except for borrowing costs directly attributable to the acquisition, construction and production of qualifying assets (see note F20 Property, Plant and Equipment).
Net foreign exchange gains or losses on financial items and changes in fair value of derivative financial instruments related to net indebtedness are presented in \u201cOther gains and losses on net indebtedness,\u201d with the exception of changes in fair value of derivative financial instruments that are hedging instruments in a cash flow hedge relationship, and which are recognized on the same line as the hedged item, when the latter affects profit or loss.
Financial liabilities
Financial liabilities are initially measured at fair value minus, in the case of a financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the issue of the financial liability. Subsequently, they are measured at amortized cost, except for:
\u2022financial liabilities at fair value through profit or loss. Such liabilities, including derivatives that are liabilities, are subsequently measured at fair value;
\u2022financial guarantee contracts. After initial recognition, guarantees are subsequently measured at the higher of the expected losses and the amount initially recognized.
NOTE F6
Net financial charges
fAccounting policy
Interest on borrowings is recognized in costs of borrowings as incurred, except for borrowing costs directly attributable to the acquisition, construction and production of qualifying assets (see note F20 Property, Plant and Equipment).
Net foreign exchange gains or losses on financial items and changes in fair value of derivative financial instruments related to net indebtedness are presented in \u201cOther gains and losses on net indebtedness,\u201d with the exception of changes in fair value of derivative financial instruments that are hedging instruments in a cash flow hedge relationship, and which are recognized on the same line as the hedged item, when the latter affects profit or loss.
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Cost of borrowings | \n\n -96 | \n\n -60 | \n
| \n Interest expense on lease liabilities | \n\n -12 | \n\n -11 | \n
| \n Interest on loans and short term deposits | \n\n 17 | \n\n 36 | \n
| \n Other gains and losses on net indebtedness | \n\n 15 | \n\n -6 | \n
| \n Net cost of borrowings | \n\n -76 | \n\n -41 | \n
| \n Cost of discounting provisions | \n\n -41 | \n\n -45 | \n
| \n Impact of change of discount rate on provisions | \n\n 25 | \n\n -17 | \n
| \n Result from equity instruments measured at fair value | \n\n -22 | \n\n 4 | \n
| \n Net financial charges | \n\n -113 | \n\n -98 | \n
More details are included in note F33 Net indebtedness.
The net cost of borrowings variance is mainly explained as follows.
Higher cost of borrowings for \u20ac(36) million attributable to the liability management exercise that Solvay undertook in 2023 prior to the partial demerger during which the perpetual hybrid bonds that qualified as equity were replaced by other non-current debts triggering interest expenses. In 2023, coupons of perpetual hybrid bonds deducted from equity upon declaration amounted to \u20ac(70) million.
Lower interest income on loans and short-term deposits explained by lower volumes of excess cash following the partial demerger.
Other gains and losses on net indebtedness from \u20ac(6) million in 2023 to \u20ac15 million in 2024, attributable to :
hlower currency swaps income \u20ac5 million (interest element)
hother financial income \u20ac21 million mainly explained by the change in fair value of stock option plans which includes options on Syensqo SA shares
ha decrease in other financial charges by \u20ac8 million mainly explained by costs related to the separation plan in 2023.
hforeign exchange results \u20ac(3) million
The cost of discounting provision relates to post-employment benefits for \u20ac(22) million and to environmental provisions \u20ac(19) million.
The impact of a change of discount rates for \u20ac25 million is attributable to the evolution of the discount rates (see note F31 \u2013 part on environmental provisions).
The result of Equity Instruments measured at fair value through profit or loss relate to the variation of Syensqo SA share price, in the context of hedging of LTI plans prior to the Partial Demerger.
NOTE F6
Net financial charges
fAccounting policy
Interest on borrowings is recognized in costs of borrowings as incurred, except for borrowing costs directly attributable to the acquisition, construction and production of qualifying assets (see note F20 Property, Plant and Equipment).
Net foreign exchange gains or losses on financial items and changes in fair value of derivative financial instruments related to net indebtedness are presented in \u201cOther gains and losses on net indebtedness,\u201d with the exception of changes in fair value of derivative financial instruments that are hedging instruments in a cash flow hedge relationship, and which are recognized on the same line as the hedged item, when the latter affects profit or loss.
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Cost of borrowings | \n\n -96 | \n\n -60 | \n
| \n Interest expense on lease liabilities | \n\n -12 | \n\n -11 | \n
| \n Interest on loans and short term deposits | \n\n 17 | \n\n 36 | \n
| \n Other gains and losses on net indebtedness | \n\n 15 | \n\n -6 | \n
| \n Net cost of borrowings | \n\n -76 | \n\n -41 | \n
| \n Cost of discounting provisions | \n\n -41 | \n\n -45 | \n
| \n Impact of change of discount rate on provisions | \n\n 25 | \n\n -17 | \n
| \n Result from equity instruments measured at fair value | \n\n -22 | \n\n 4 | \n
| \n Net financial charges | \n\n -113 | \n\n -98 | \n
More details are included in note F33 Net indebtedness.
The net cost of borrowings variance is mainly explained as follows.
Higher cost of borrowings for \u20ac(36) million attributable to the liability management exercise that Solvay undertook in 2023 prior to the partial demerger during which the perpetual hybrid bonds that qualified as equity were replaced by other non-current debts triggering interest expenses. In 2023, coupons of perpetual hybrid bonds deducted from equity upon declaration amounted to \u20ac(70) million.
Lower interest income on loans and short-term deposits explained by lower volumes of excess cash following the partial demerger.
Other gains and losses on net indebtedness from \u20ac(6) million in 2023 to \u20ac15 million in 2024, attributable to :
hlower currency swaps income \u20ac5 million (interest element)
hother financial income \u20ac21 million mainly explained by the change in fair value of stock option plans which includes options on Syensqo SA shares
ha decrease in other financial charges by \u20ac8 million mainly explained by costs related to the separation plan in 2023.
hforeign exchange results \u20ac(3) million
The cost of discounting provision relates to post-employment benefits for \u20ac(22) million and to environmental provisions \u20ac(19) million.
The impact of a change of discount rates for \u20ac25 million is attributable to the evolution of the discount rates (see note F31 \u2013 part on environmental provisions).
The result of Equity Instruments measured at fair value through profit or loss relate to the variation of Syensqo SA share price, in the context of hedging of LTI plans prior to the Partial Demerger.
NOTE F8
Discontinued operations and\u00a0Partial Demerger
fAccounting policy
A discontinued operation is a component of the Group which the Group has disposed of, or which is classified as held for sale, and which:
\u2022represents a separate major line of business or geographical area of operations;
\u2022is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or
\u2022is a subsidiary acquired exclusively with a view to resale.
A component of the Group consists of operations and cash flows, which can be clearly distinguished operationally and for financial reporting purposes, from the rest of the Group.
In the consolidated statement of comprehensive income, the consolidated statement of cash flows, and disclosures, discontinued operations are restated for prior periods presented.
In accordance with IFRIC 17 Distribution of Non-cash Assets to Owners, and IFRS 10 Consolidated Financial Statements \u2013 chapter on loss of control \u2013 Solvay measures the profit on distribution in the form of demerger as the excess amount of the fair value of the distributed net assets over the then-carrying value of the net assets of the distributed businesses, adjusted for the related NCI.
The recognition of the fair value of the distributed net assets may require the use of valuation techniques. Solvay uses the observable values as input for such valuation techniques.
Solvay applies IFRS 5 requirements after intercompany elimination.
On December 8, 2023 at the extraordinary general meeting, Solvay SA/NV\u2019s shareholders approved the partial demerger of the specialty businesses, which effected the separation of the Group into two public groups. Consequently, 2023 consolidated income statement figures reflect the Specialty Businesses as discontinued operations. In the consolidated statement of cash flows, the 2023 cash flows present both continuing and discontinued operations in the primary statement. However, below the primary cash flow statement, the consolidated cash flows from discontinued operations are disclosed.
The Partial Demerger impacted the market value of all of the issued and outstanding shares of Solvay SA/NV and the options on these shares. This includes the shares held by Solvay Stock Option Management SRL (SSOM), a wholly owned subsidiary of Solvay, for the purposes of hedging its exposure under LTI plans. For each share of Solvay SA/NV held by SSOM upon completion of the Partial Demerger, SSOM received one newly issued share of Syensqo SA/NV; the newly issued Syensqo shares were classified as investments at fair value through profit or loss and reclassified out of equity. The details on treasury shares and equity investments at fair value through profit or loss are provided in Notes F27 Equity, and F32 Financial Instruments.
The profit from discontinued operations in the consolidated income statement is analyzed as follows (where 2023 means from January 1, 2023, to December 8, 2023):
| \n In \u20ac million | \n\n 2023 | \n
|---|---|
| \n Sales | \n\n 6,656 | \n
| \n of which revenue from non-core activities | \n\n 167 | \n
| \n of which net sales | \n\n 6,489 | \n
| \n Cost of goods sold | \n\n -4,357 | \n
| \n Gross margin | \n\n 2,299 | \n
| \n Commercial costs | \n\n -272 | \n
| \n Administrative costs | \n\n -466 | \n
| \n Research and development costs | \n\n -318 | \n
| \n Other operating gains and (losses) | \n\n -132 | \n
| \n Earnings from associates and joint ventures | \n\n 18 | \n
| \n Results from portfolio management and major restructuring | \n\n -53 | \n
| \n Results from legacy remediation and major litigations(1) | \n\n -274 | \n
| \n EBIT | \n\n 802 | \n
| \n Cost of borrowings | \n\n -54 | \n
| \n Interest on loans and short term deposits | \n\n 14 | \n
| \n Other gains and (losses) on net indebtedness | \n\n -22 | \n
| \n Cost of discounting provisions | \n\n -20 | \n
| \n Result from equity instruments measured at fair value | \n\n 3 | \n
| \n Profit/(loss) for the year before taxes | \n\n 723 | \n
| \n Income taxes | \n\n -242 | \n
| \n Profit for the year from discontinued operations | \n\n 481 | \n
| \n Gain on Partial Demerger in accordance with IFRIC17 | \n\n 1,651 | \n
| \n Profit for the year from discontinued operations | \n\n 2,132 | \n
(1)The Results from legacy remediation and major litigation includes the impact of the settlement of Solvay Specialty Polymers USA, LLC with NJDEP (around USD 250 million) and a compensation received by Solvay Specialty Polymers Italy S.p.A. from (Mont)Edison S.p.A. and Ausimont S.p.A. (\u20ac91.6 million).
| \n In \u20ac million | \n\n \n | \n
|---|---|
| \n Fair value of the distribution | \n\n 9,546 | \n
| \n Net assets | \n\n -7,920 | \n
| \n Other adjustments | \n\n 7 | \n
| \n Non-controlling interest associated with the net assets of Specialty Businesses | \n\n 17 | \n
| \n Gain on the Partial Demerger | \n\n 1,651 | \n
The fair value of the distribution was measured by reference to the average of the closing price of the first 30 days of trading activity of Syensqo shares, following the Partial Demerger. This being a fair value measured with observable inputs, was considered to be representative of the fair value of the assets and liabilities effected by the demerger at the distribution date.
NOTE F26
Assets held for sale
At the end of 2024 and 2023, there were no assets and liabilities classified as held for sale.
NOTE F8
Discontinued operations and\u00a0Partial Demerger
fAccounting policy
A discontinued operation is a component of the Group which the Group has disposed of, or which is classified as held for sale, and which:
\u2022represents a separate major line of business or geographical area of operations;
\u2022is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or
\u2022is a subsidiary acquired exclusively with a view to resale.
A component of the Group consists of operations and cash flows, which can be clearly distinguished operationally and for financial reporting purposes, from the rest of the Group.
In the consolidated statement of comprehensive income, the consolidated statement of cash flows, and disclosures, discontinued operations are restated for prior periods presented.
In accordance with IFRIC 17 Distribution of Non-cash Assets to Owners, and IFRS 10 Consolidated Financial Statements \u2013 chapter on loss of control \u2013 Solvay measures the profit on distribution in the form of demerger as the excess amount of the fair value of the distributed net assets over the then-carrying value of the net assets of the distributed businesses, adjusted for the related NCI.
The recognition of the fair value of the distributed net assets may require the use of valuation techniques. Solvay uses the observable values as input for such valuation techniques.
Solvay applies IFRS 5 requirements after intercompany elimination.
NOTE F26
Assets held for sale
At the end of 2024 and 2023, there were no assets and liabilities classified as held for sale.
NOTE F8
Discontinued operations and\u00a0Partial Demerger
fAccounting policy
A discontinued operation is a component of the Group which the Group has disposed of, or which is classified as held for sale, and which:
\u2022represents a separate major line of business or geographical area of operations;
\u2022is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or
\u2022is a subsidiary acquired exclusively with a view to resale.
A component of the Group consists of operations and cash flows, which can be clearly distinguished operationally and for financial reporting purposes, from the rest of the Group.
In the consolidated statement of comprehensive income, the consolidated statement of cash flows, and disclosures, discontinued operations are restated for prior periods presented.
In accordance with IFRIC 17 Distribution of Non-cash Assets to Owners, and IFRS 10 Consolidated Financial Statements \u2013 chapter on loss of control \u2013 Solvay measures the profit on distribution in the form of demerger as the excess amount of the fair value of the distributed net assets over the then-carrying value of the net assets of the distributed businesses, adjusted for the related NCI.
The recognition of the fair value of the distributed net assets may require the use of valuation techniques. Solvay uses the observable values as input for such valuation techniques.
Solvay applies IFRS 5 requirements after intercompany elimination.
NOTE F8
Discontinued operations and\u00a0Partial Demerger
fAccounting policy
A discontinued operation is a component of the Group which the Group has disposed of, or which is classified as held for sale, and which:
\u2022represents a separate major line of business or geographical area of operations;
\u2022is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or
\u2022is a subsidiary acquired exclusively with a view to resale.
A component of the Group consists of operations and cash flows, which can be clearly distinguished operationally and for financial reporting purposes, from the rest of the Group.
In the consolidated statement of comprehensive income, the consolidated statement of cash flows, and disclosures, discontinued operations are restated for prior periods presented.
In accordance with IFRIC 17 Distribution of Non-cash Assets to Owners, and IFRS 10 Consolidated Financial Statements \u2013 chapter on loss of control \u2013 Solvay measures the profit on distribution in the form of demerger as the excess amount of the fair value of the distributed net assets over the then-carrying value of the net assets of the distributed businesses, adjusted for the related NCI.
The recognition of the fair value of the distributed net assets may require the use of valuation techniques. Solvay uses the observable values as input for such valuation techniques.
Solvay applies IFRS 5 requirements after intercompany elimination.
On December 8, 2023 at the extraordinary general meeting, Solvay SA/NV\u2019s shareholders approved the partial demerger of the specialty businesses, which effected the separation of the Group into two public groups. Consequently, 2023 consolidated income statement figures reflect the Specialty Businesses as discontinued operations. In the consolidated statement of cash flows, the 2023 cash flows present both continuing and discontinued operations in the primary statement. However, below the primary cash flow statement, the consolidated cash flows from discontinued operations are disclosed.
The Partial Demerger impacted the market value of all of the issued and outstanding shares of Solvay SA/NV and the options on these shares. This includes the shares held by Solvay Stock Option Management SRL (SSOM), a wholly owned subsidiary of Solvay, for the purposes of hedging its exposure under LTI plans. For each share of Solvay SA/NV held by SSOM upon completion of the Partial Demerger, SSOM received one newly issued share of Syensqo SA/NV; the newly issued Syensqo shares were classified as investments at fair value through profit or loss and reclassified out of equity. The details on treasury shares and equity investments at fair value through profit or loss are provided in Notes F27 Equity, and F32 Financial Instruments.
The profit from discontinued operations in the consolidated income statement is analyzed as follows (where 2023 means from January 1, 2023, to December 8, 2023):
| \n In \u20ac million | \n\n 2023 | \n
|---|---|
| \n Sales | \n\n 6,656 | \n
| \n of which revenue from non-core activities | \n\n 167 | \n
| \n of which net sales | \n\n 6,489 | \n
| \n Cost of goods sold | \n\n -4,357 | \n
| \n Gross margin | \n\n 2,299 | \n
| \n Commercial costs | \n\n -272 | \n
| \n Administrative costs | \n\n -466 | \n
| \n Research and development costs | \n\n -318 | \n
| \n Other operating gains and (losses) | \n\n -132 | \n
| \n Earnings from associates and joint ventures | \n\n 18 | \n
| \n Results from portfolio management and major restructuring | \n\n -53 | \n
| \n Results from legacy remediation and major litigations(1) | \n\n -274 | \n
| \n EBIT | \n\n 802 | \n
| \n Cost of borrowings | \n\n -54 | \n
| \n Interest on loans and short term deposits | \n\n 14 | \n
| \n Other gains and (losses) on net indebtedness | \n\n -22 | \n
| \n Cost of discounting provisions | \n\n -20 | \n
| \n Result from equity instruments measured at fair value | \n\n 3 | \n
| \n Profit/(loss) for the year before taxes | \n\n 723 | \n
| \n Income taxes | \n\n -242 | \n
| \n Profit for the year from discontinued operations | \n\n 481 | \n
| \n Gain on Partial Demerger in accordance with IFRIC17 | \n\n 1,651 | \n
| \n Profit for the year from discontinued operations | \n\n 2,132 | \n
(1)The Results from legacy remediation and major litigation includes the impact of the settlement of Solvay Specialty Polymers USA, LLC with NJDEP (around USD 250 million) and a compensation received by Solvay Specialty Polymers Italy S.p.A. from (Mont)Edison S.p.A. and Ausimont S.p.A. (\u20ac91.6 million).
| \n In \u20ac million | \n\n \n | \n
|---|---|
| \n Fair value of the distribution | \n\n 9,546 | \n
| \n Net assets | \n\n -7,920 | \n
| \n Other adjustments | \n\n 7 | \n
| \n Non-controlling interest associated with the net assets of Specialty Businesses | \n\n 17 | \n
| \n Gain on the Partial Demerger | \n\n 1,651 | \n
The fair value of the distribution was measured by reference to the average of the closing price of the first 30 days of trading activity of Syensqo shares, following the Partial Demerger. This being a fair value measured with observable inputs, was considered to be representative of the fair value of the assets and liabilities effected by the demerger at the distribution date.
NOTE F8
Discontinued operations and\u00a0Partial Demerger
fAccounting policy
A discontinued operation is a component of the Group which the Group has disposed of, or which is classified as held for sale, and which:
\u2022represents a separate major line of business or geographical area of operations;
\u2022is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or
\u2022is a subsidiary acquired exclusively with a view to resale.
A component of the Group consists of operations and cash flows, which can be clearly distinguished operationally and for financial reporting purposes, from the rest of the Group.
In the consolidated statement of comprehensive income, the consolidated statement of cash flows, and disclosures, discontinued operations are restated for prior periods presented.
In accordance with IFRIC 17 Distribution of Non-cash Assets to Owners, and IFRS 10 Consolidated Financial Statements \u2013 chapter on loss of control \u2013 Solvay measures the profit on distribution in the form of demerger as the excess amount of the fair value of the distributed net assets over the then-carrying value of the net assets of the distributed businesses, adjusted for the related NCI.
The recognition of the fair value of the distributed net assets may require the use of valuation techniques. Solvay uses the observable values as input for such valuation techniques.
Solvay applies IFRS 5 requirements after intercompany elimination.
NOTE F8
Discontinued operations and\u00a0Partial Demerger
fAccounting policy
A discontinued operation is a component of the Group which the Group has disposed of, or which is classified as held for sale, and which:
\u2022represents a separate major line of business or geographical area of operations;
\u2022is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or
\u2022is a subsidiary acquired exclusively with a view to resale.
A component of the Group consists of operations and cash flows, which can be clearly distinguished operationally and for financial reporting purposes, from the rest of the Group.
In the consolidated statement of comprehensive income, the consolidated statement of cash flows, and disclosures, discontinued operations are restated for prior periods presented.
In accordance with IFRIC 17 Distribution of Non-cash Assets to Owners, and IFRS 10 Consolidated Financial Statements \u2013 chapter on loss of control \u2013 Solvay measures the profit on distribution in the form of demerger as the excess amount of the fair value of the distributed net assets over the then-carrying value of the net assets of the distributed businesses, adjusted for the related NCI.
The recognition of the fair value of the distributed net assets may require the use of valuation techniques. Solvay uses the observable values as input for such valuation techniques.
Solvay applies IFRS 5 requirements after intercompany elimination.
NOTE F9
Earnings per share
fAccounting policy
The basic earnings per share are obtained by dividing profit for the year by the weighted average number of ordinary shares outstanding during the reporting period. The weighted average number of ordinary shares excludes the treasury shares held by the Group over the reporting period.
The diluted earnings per share are obtained by dividing profit for the year, adjusted for the effects of dilutive potential ordinary shares, by the weighted average number of ordinary shares, also adjusted by the number of dilutive potential ordinary shares attached to the issuance of share options.
The number of dilutive potential ordinary shares is calculated for the weighted average number of share options outstanding during the reporting period as the difference between the average market price of ordinary shares during the reporting period and the exercise price of the share option. Share options have a dilutive effect only when the average market price is above the exercise price (share options are \u201cin the money\u201d).
For the purpose of calculating diluted earnings per share, there were no adjusting elements to the profit for the year (Solvay share).
Basic and diluted amounts per share for discontinued operations are presented in the consolidated income statement.
| \n Number of shares (in units) | \n\n \n | \n\n 2024 | \n\n \n | \n\n 2023 | \n
|---|---|---|---|---|
| \n Weighted average number of ordinary shares (basic) | \n\n \n | \n\n 105,000,897 | \n\n \n | \n\n 104,160,774 | \n
| \n Dilution effect | \n\n \n | \n\n 1,053,934 | \n\n \n | \n\n 1,288,845 | \n
| \n Weighted average number of ordinary shares (diluted) | \n\n \n | \n\n 106,054,832 | \n\n \n | \n\n 105,449,619 | \n
| \n \n | \n\n 2024 | \n\n 2023 | \n||
|---|---|---|---|---|
| \n Basic | \n\n Diluted | \n\n Basic | \n\n Diluted | \n|
| \n Profit/(loss) for the year (Solvay share) including discontinued operations (in \u20ac thousands) | \n\n 223,000 | \n\n 223,000 | \n\n 2,092,753 | \n\n 2,092,753 | \n
| \n Profit/(loss) for the year (Solvay share) excluding discontinued operations (in \u20ac thousands) | \n\n 223,171 | \n\n 223,171 | \n\n -37,172 | \n\n -37,172 | \n
| \n Earnings per share (including discontinued operations) (in \u20ac) | \n\n 2.12 | \n\n 2.10 | \n\n 20.09 | \n\n 19.85 | \n
| \n Earnings per share (excluding discontinued operations) (in \u20ac) | \n\n 2.12 | \n\n 2.10 | \n\n -0.36 | \n\n -0.35 | \n
More information regarding shares, including dividend per share, can be found in the Business Performance section.
The average market price during 2024 was \u20ac30.68 per Solvay share.
All the share options outstanding per December 31, 2024 were in the money and therefore dilutive. The 2022 plan has not been split and the underlying is a combined instrument of Solvay SA/NV and Syensqo SA/NV shares. Consequently, the strike price (\u20ac84.34) has not been adjusted.
NOTE F9
Earnings per share
fAccounting policy
The basic earnings per share are obtained by dividing profit for the year by the weighted average number of ordinary shares outstanding during the reporting period. The weighted average number of ordinary shares excludes the treasury shares held by the Group over the reporting period.
The diluted earnings per share are obtained by dividing profit for the year, adjusted for the effects of dilutive potential ordinary shares, by the weighted average number of ordinary shares, also adjusted by the number of dilutive potential ordinary shares attached to the issuance of share options.
The number of dilutive potential ordinary shares is calculated for the weighted average number of share options outstanding during the reporting period as the difference between the average market price of ordinary shares during the reporting period and the exercise price of the share option. Share options have a dilutive effect only when the average market price is above the exercise price (share options are \u201cin the money\u201d).
For the purpose of calculating diluted earnings per share, there were no adjusting elements to the profit for the year (Solvay share).
Basic and diluted amounts per share for discontinued operations are presented in the consolidated income statement.
fAccounting policy
For the purpose of presenting consolidated financial statements at the end of each reporting period, the assets and liabilities of the Group\u2019s foreign operations are expressed in euros using closing rates. Income and expense items are translated at the average exchange rates for the period except when the impact of applying the average rate is materially different from applying the spot rate at the respective transactions\u2019 dates, in which case the latter is applied. Exchange differences arising, if any, are recognized in other comprehensive income as \u201ccurrency translation differences\u201d.
Currency translation differences are reclassified from equity to profit or loss, on:
A disposal of the Group\u2019s entire interest in a foreign operation. In this case, all of the accumulated exchange differences in respect of that operation attributable to the Group are reclassified to profit or loss. Any exchange differences that have previously been attributed to non-controlling interests are derecognized, but they are not reclassified to profit or loss.
At the end of 2024, the carrying amount of Currency Translation consists of \u20ac(339) million on BRL, \u20ac(190) linked to the conversion of Member States\u2019 currencies to Euro, and \u20ac303 million on USD.
NOTE F27
Equity
fAccounting policy
Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issuance of new share capital are directly recognized in equity as a deduction, net of tax, from the equity issuance proceeds.
Reserves
The reserves include:
\u2022treasury shares;
\u2022perpetual hybrid bonds that qualify as equity absent any unavoidable contractual obligation to repay the principal and interest of the perpetual hybrid bonds (no maturity, interest is payable annually but can be deferred indefinitely at the issuer\u2019s discretion);
\u2022retained earnings;
\u2022currency translation differences from the consolidation process relating to the translation of the financial statements of foreign operations prepared in a non-euro functional currency to the euro presentation currency;
\u2022the impacts of the fair value re-measurement of equity instruments measured at fair value through other comprehensive income;
\u2022the impacts of the fair value re-measurement of financial instruments documented as hedging instruments in cash flow hedges;
\u2022actuarial gains and losses related to defined benefit plans.
Non-controlling interests
Those represent the share of non-controlling interests in the net assets and comprehensive income of subsidiaries of the Group and correspond to the interests in subsidiaries that are not held by the Company or its subsidiaries.
| \n \n | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Shares issued and fully paid | \n\n 105,876,416 | \n\n 105,876,416 | \n
| \n Treasury shares held | \n\n 1,411,344 | \n\n 868,490 | \n
The treasury shares held by the Group have been deducted from consolidated shareholders\u2019 equity.
The shares issued by Solvay have no par value.
During 2024, Solvay has purchased \u20ac39 million treasury shares in order to hedge its exposure under ESPP and LTI plans. During 2024 Solvay has also sold \u20ac13 million treasury shares in order to fulfill its obligations under the Stock Option plans and has delivered 91,718 shares to the participants of the ESPP.
During 2023, Solvay has sold \u20ac 50 million treasury shares in order to fulfill its employee benefits commitments.
As part of the Partial Demerger, the treasury shares held by a former subsidiary of Solvay transferred to Syensqo as part of the Partial Demerger, at their carrying amount of \u20ac 79 million, were transferred to Syensqo SA/NV as part of the Specialty Businesses.
As a result of the Partial Demerger, for each treasury share held by Solvay Stock Option Management SRL (\u201cSSOM\u201d), a wholly owned subsidiary of Solvay, for the purposes of hedging its exposure under LTI plans, SSOM received one Syensqo share. Consequently, Solvay reclassified part of the equity (\u20ac 81 million) related to treasury shares to equity investments at fair value through profit or loss.
fAccounting policy
For the purpose of presenting consolidated financial statements at the end of each reporting period, the assets and liabilities of the Group\u2019s foreign operations are expressed in euros using closing rates. Income and expense items are translated at the average exchange rates for the period except when the impact of applying the average rate is materially different from applying the spot rate at the respective transactions\u2019 dates, in which case the latter is applied. Exchange differences arising, if any, are recognized in other comprehensive income as \u201ccurrency translation differences\u201d.
Currency translation differences are reclassified from equity to profit or loss, on:
A disposal of the Group\u2019s entire interest in a foreign operation. In this case, all of the accumulated exchange differences in respect of that operation attributable to the Group are reclassified to profit or loss. Any exchange differences that have previously been attributed to non-controlling interests are derecognized, but they are not reclassified to profit or loss.
At the end of 2024, the carrying amount of Currency Translation consists of \u20ac(339) million on BRL, \u20ac(190) linked to the conversion of Member States\u2019 currencies to Euro, and \u20ac303 million on USD.
Reserves
The reserves include:
\u2022treasury shares;
\u2022perpetual hybrid bonds that qualify as equity absent any unavoidable contractual obligation to repay the principal and interest of the perpetual hybrid bonds (no maturity, interest is payable annually but can be deferred indefinitely at the issuer\u2019s discretion);
\u2022retained earnings;
\u2022currency translation differences from the consolidation process relating to the translation of the financial statements of foreign operations prepared in a non-euro functional currency to the euro presentation currency;
\u2022the impacts of the fair value re-measurement of equity instruments measured at fair value through other comprehensive income;
\u2022the impacts of the fair value re-measurement of financial instruments documented as hedging instruments in cash flow hedges;
\u2022actuarial gains and losses related to defined benefit plans.
NOTE F11
Depreciation, amortization and\u00a0impairments
The table below presents the amounts of the total depreciation, amortization and impairment losses (reversals) of continuing operations included in the various headings of the Consolidated Statements of Income.
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Cost of goods sold | \n\n 267 | \n\n 269 | \n
| \n Administrative costs | \n\n 35 | \n\n 37 | \n
| \n Research and development costs | \n\n 9 | \n\n 12 | \n
| \n Other operating gains and (losses) | \n\n 6 | \n\n 10 | \n
| \n Of Which PPA (see Note F4) | \n\n 4 | \n\n 7 | \n
| \n Total depreciation and amortization | \n\n 317 | \n\n 328 | \n
| \n Goodwill Impairment | \n\n 0 | \n\n 38 | \n
| \n Other net Impairment | \n\n 45 | \n\n 57 | \n
| \n Total depreciation, amortization and impairment losses (reversal) | \n\n 362 | \n\n 423 | \n
Please refer to Note F5 Results from portfolio management and major restructurings, legacy remediation and major litigations for the details on impairment.
NOTE F12
Other non-operating and\u00a0non-cash\u00a0items
In 2024, \u20ac(48) million mainly relate to the transition service agreement invoicing, as well as non-cash capital gains and other results for M&A deals.
The other non-operating and non-cash items for 2023 of \u20ac(1,481) million mainly comprise the result linked to the Partial Demerger \u20ac(1,651) million (see Note F8 for the details), reduced by recycling of CTA of RusVinyl \u20ac176 million.
NOTE F13
Income taxes in the statement of\u00a0cash flows
Income tax expense in 2024 amounts to \u20ac87 million (\u20ac450 million in 2023).
Income tax paid in 2024 amounts to \u20ac109 million (\u20ac434 million in 2023). The income tax paid has decreased compared to previous years due to the partial demerger in December 2023.
The major components of Income taxes are discussed in note F7 income taxes in income statement and statement of financial position.
NOTE F14
Changes in working capital
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Inventories | \n\n 18 | \n\n 215 | \n
| \n Trade receivables | \n\n 3 | \n\n 122 | \n
| \n Trade payables | \n\n 17 | \n\n -495 | \n
| \n Other receivables/payables | \n\n -37 | \n\n 79 | \n
| \n Changes in working capital | \n\n 1 | \n\n -78 | \n
| \n Of which discontinued operations | \n\n 0 | \n\n -55 | \n
The higher numbers in 2023 result mainly from the process of the Partial Demerger.
NOTE F15
Additions, reversals and use of provisions
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Additions and reversal of employee benefits and other provisions | \n\n 250 | \n\n 644 | \n
| \n Of which: | \n\n \n | \n\n \n | \n
| \n Employee benefits | \n\n 15 | \n\n 44 | \n
| \n Restructuring | \n\n 89 | \n\n 104 | \n
| \n Environment | \n\n 86 | \n\n 346 | \n
| \n Payments related to employee benefits and use of provisions | \n\n -225 | \n\n -304 | \n
| \n Of which: | \n\n \n | \n\n \n | \n
| \n Employee benefits | \n\n -38 | \n\n -85 | \n
| \n Restructuring | \n\n -73 | \n\n -92 | \n
| \n Environment | \n\n -66 | \n\n -72 | \n
| \n Use of provisions for additional voluntary contributions (pension plans) | \n\n -30 | \n\n -116 | \n
See note F30 Employee Benefits and F31 Provisions for more information.
NOTE F16
Cash flows from investing activities \u2013 acquisition/disposal of\u00a0assets and investments
The cash-flows in the table below present both continuing and discontinued operations.
| \n 2024 - In \u20ac million | \n\n Acquisitions | \n\n Disposals | \n\n Total | \n
|---|---|---|---|
| \n Investments | \n\n -13 | \n\n 1 | \n\n -12 | \n
| \n Subsidiaries | \n\n -4 | \n\n 1 | \n\n -3 | \n
| \n Other | \n\n -9 | \n\n \n | \n\n -9 | \n
| \n Property, plant and equipment/Intangible assets | \n\n -285 | \n\n 11 | \n\n -274 | \n
| \n Total | \n\n -298 | \n\n 12 | \n\n -286 | \n
| \n 2023 - In \u20ac million | \n\n Acquisitions | \n\n Disposals | \n\n Total | \n
|---|---|---|---|
| \n Total investments | \n\n -12 | \n\n -718 | \n\n -730 | \n
| \n Subsidiaries | \n\n \n | \n\n 433 | \n\n 433 | \n
| \n Cash in Partial Demerger | \n\n \n | \n\n -1,151 | \n\n -1,151 | \n
| \n Other | \n\n -12 | \n\n \n | \n\n -12 | \n
| \n Property, plant and equipment/Intangible assets | \n\n -1,063 | \n\n 7 | \n\n -1,057 | \n
| \n Total | \n\n -1,075 | \n\n -711 | \n\n -1,786 | \n
2024
The acquisitions primarily relate to two following groups:
hEnergy Transition Projects (\u20ac15 million) out of which::
\u2014Soda Ash & Derivatives: RTO (Regenerative Thermal Oxidation) Unit (GHG reduction) in Green River
\u2014Silica: New Electric furnace in Collonges to reduce GHG
\u2014Silica: New capacity in Livorno for Circular Silicate from RHA (Rice Husk Ash)
hOther projects:
\u2014Soda Ash & Derivatives: capacity increase in Green River, Wyoming, (US)\u00a0
\u2014Peroxides: New capacity for pre-EG (pre- Electronic Grade) in China
\u2014Special Chem: Rare earths separation for Magnets in La Rochelle
2023
In 2023, the amounts related to investment in subsidiaries related to the sale of RusVinyl. In regard to cash in the Partial Demerger, this is a result of the cash position in the demerged subsidiaries of Syensqo SA/NV.
The acquisition includes the following main projects:
hSoda Ash & Derivatives: Soda ash capacity increase in Green River (USA)
hSoda Ash & Derivatives: Coal phase-out in Green River (USA)
hPeroxides: Hydrogen Peroxide capacity increase in Antwerp (Belgium)
hSilica: New electric furnace in Collonges (France) to reduce CO2 emissions
hSpecialty Polymers: Polyvinylidene Fluoride (PVDF) capacity increase in Tavaux (France)
hSpecialty Polymers: DCDPS monomer capacity increase in Augusta (USA)
hSpecialty Polymers: Udel polysulfone capacity increase in Marietta (USA)
hSpecialty Polymers: Compounding capacity increase at Changshu (PRC)
hSpecialty Polymers: Wastewater treatment units at Tavaux (France) and Changshu (PRC)
hNovecare: internalization of IRIS intermediate chemical production in Melle (France)
hAroma performance: internalization of natural vanillin fermentation (Portugal) and purification (France)
hTechnology Solutions: Aldoxime capacity increase in Mount Pleasant (USA)
hO&G: Friction reducers production capacity in West Texas (USA)
NOTE F17
Other cash flows from financing activities
The \u20ac34 millions of other cash flows from financing activities in 2024 (\u20ac(337) million in 2023) mainly relate to margin calls on hedging instruments as part of Energy Services\u2019 activities for \u20ac38 million (\u20ac(317) million in 2023).
For trading in futures of different commodities (CO2, power, gas), Energy Services uses brokers. These deals are subject to margin calls. To cover the credit risk of the counterparty, brokers pay a margin call to Solvay in case the instrument is in the money for Solvay. If the instrument is out of the money for Solvay, Solvay pays a margin call to the brokers. The margin calls are presented as part of financial debt (see note F33 Net indebtedness). Cash flows from margin calls are recognized as financing cash flows that fluctuate with the fair value of the instrument. The actual settlement of these commodity derivatives is net of margin calls and the gross amount (including margin calls that are reclassified from financing cash flows) is recognized in operating cash flows.
NOTE F14
Changes in working capital
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Inventories | \n\n 18 | \n\n 215 | \n
| \n Trade receivables | \n\n 3 | \n\n 122 | \n
| \n Trade payables | \n\n 17 | \n\n -495 | \n
| \n Other receivables/payables | \n\n -37 | \n\n 79 | \n
| \n Changes in working capital | \n\n 1 | \n\n -78 | \n
| \n Of which discontinued operations | \n\n 0 | \n\n -55 | \n
The higher numbers in 2023 result mainly from the process of the Partial Demerger.
NOTE F25
Other receivables (current)
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n VAT and other taxes | \n\n 192 | \n\n 202 | \n
| \n Advances to suppliers | \n\n 32 | \n\n 37 | \n
| \n Financial instruments - operational | \n\n 67 | \n\n 56 | \n
| \n Insurance premiums | \n\n 23 | \n\n 36 | \n
| \n Loan receivables | \n\n 3 | \n\n 5 | \n
| \n Other | \n\n 80 | \n\n 127 | \n
| \n Other current receivables | \n\n 396 | \n\n 462 | \n
In 2023, the row Other contains a pending insurance reimbursement of \u20ac32 million (see also Note F34 Other liabilities) and Fluor quotas of \u20ac16 million, which both have been settled in 2024 with Syensqo.
Financial instruments \u2013 operational includes held for trading and cash flow hedge derivatives (see note F32.A. Overview of financial instruments).
NOTE F14
Changes in working capital
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Inventories | \n\n 18 | \n\n 215 | \n
| \n Trade receivables | \n\n 3 | \n\n 122 | \n
| \n Trade payables | \n\n 17 | \n\n -495 | \n
| \n Other receivables/payables | \n\n -37 | \n\n 79 | \n
| \n Changes in working capital | \n\n 1 | \n\n -78 | \n
| \n Of which discontinued operations | \n\n 0 | \n\n -55 | \n
The higher numbers in 2023 result mainly from the process of the Partial Demerger.
fAccounting policy
General
The Group classifies financial liabilities that arise from supplier finance arrangements within Trade and other payables in the statement of financial position if they have a similar nature and function to trade payables. This is the case if the supplier finance arrangement is part of the working capital used in the Group\u2019s normal operating cycle, the level of security provided is similar to trade payables and the terms of the liabilities that are part of the supply chain finance arrangement are not substantially different from the terms of trade payables that are not part of the arrangement. Cash flows related to liabilities arising from supplier finance arrangements that are classified in Trade and other payables in the consolidated statement of financial position are included in operating activities in the consolidated statement of cash flows.
First application in 2024
This disclosure requirement was introduced by the Amendments Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7), published in May 2023 by the IASB. The amendments are effective for periods beginning on or after 1 January 2024. In the year of initial application, the requirements only apply to the annual financial report and the disclosure does not need to provide the comparative figures.
Terms and conditions
The Group has established a supplier finance arrangement that is offered to some of the Group\u2019s key suppliers. Participation in the arrangement is at the suppliers\u2019 own discretion. Suppliers that participate in the supplier finance arrangement will receive early payment on invoices sent to the Group from the Group\u2019s external finance provider. If suppliers choose to receive early payment, they pay a fee to the finance provider, to which the Group is not a party. For the finance provider to pay the invoices, the goods must have been received or supplied and the invoices approved by the Group. Payments to suppliers ahead of the invoice due date are processed by the finance provider and, in all cases, the Group settles the original invoice by paying the finance provider in line with the original invoice maturity date described above.
The Group assesses each arrangement against indicators to determine if the liabilities which suppliers have sold to the partner bank under the supplier financing scheme continue to meet the definition of trade payables or should be classified as financial debt. On December 31, 2024 and 2023, all trade payables subject to the supplier finance arrangement meet the criteria of trade payables and are included in trade payables in the consolidated statement of financial position.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n\n January 1, 2023 | \n
|---|---|---|---|
| \n Carrying amount of financial liabilities | \n\n \n | \n\n \n | \n\n \n | \n
| \n Presented in trade and other payables | \n\n 62 | \n\n N/A | \n\n N/A | \n
| \n \u2022of which suppliers have received payment from finance provider | \n\n 47 | \n\n N/A | \n\n N/A | \n
| \n Range of payment due dates (days after the invoice date) | \n\n \n | \n\n \n | \n\n \n | \n
| \n Liabilities that are part of the arrangement | \n\n 102-106 days | \n\n N/A | \n\n N/A | \n
| \n Comparable trade payables that are not part of the arrangements | \n\n 45-49 days | \n\n N/A | \n\n N/A | \n
NOTE F34
Other liabilities (current)
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Wages and benefits debts | \n\n 123 | \n\n 125 | \n
| \n VAT and other taxes | \n\n 105 | \n\n 107 | \n
| \n Social security | \n\n 18 | \n\n 29 | \n
| \n Financial instruments - operational | \n\n 98 | \n\n 108 | \n
| \n Insurance premiums | \n\n 14 | \n\n 31 | \n
| \n Advances from customers | \n\n 21 | \n\n 30 | \n
| \n Long Term Incentive - current part | \n\n 17 | \n\n 31 | \n
| \n Other | \n\n 61 | \n\n 126 | \n
| \n Other current liabilities | \n\n 458 | \n\n 585 | \n
The decrease in \u201cOther\u201d when compared to 2023 is primarily related to the Insurance reimbursement of \u20ac32 million (payable to Syensqo) which was outstanding at December 31, 2023 (see note F25 Other receivables) and paid in 2024.
Financial instruments \u2013 operational include held for trading and cash flow hedge derivatives (see note F32 Overview of financial instruments).
NOTE F14
Changes in working capital
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Inventories | \n\n 18 | \n\n 215 | \n
| \n Trade receivables | \n\n 3 | \n\n 122 | \n
| \n Trade payables | \n\n 17 | \n\n -495 | \n
| \n Other receivables/payables | \n\n -37 | \n\n 79 | \n
| \n Changes in working capital | \n\n 1 | \n\n -78 | \n
| \n Of which discontinued operations | \n\n 0 | \n\n -55 | \n
The higher numbers in 2023 result mainly from the process of the Partial Demerger.
NOTE F25
Other receivables (current)
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n VAT and other taxes | \n\n 192 | \n\n 202 | \n
| \n Advances to suppliers | \n\n 32 | \n\n 37 | \n
| \n Financial instruments - operational | \n\n 67 | \n\n 56 | \n
| \n Insurance premiums | \n\n 23 | \n\n 36 | \n
| \n Loan receivables | \n\n 3 | \n\n 5 | \n
| \n Other | \n\n 80 | \n\n 127 | \n
| \n Other current receivables | \n\n 396 | \n\n 462 | \n
In 2023, the row Other contains a pending insurance reimbursement of \u20ac32 million (see also Note F34 Other liabilities) and Fluor quotas of \u20ac16 million, which both have been settled in 2024 with Syensqo.
Financial instruments \u2013 operational includes held for trading and cash flow hedge derivatives (see note F32.A. Overview of financial instruments).
Financial assets
Trade receivables are initially measured at their transaction price, if they do not contain a significant financing component, which is the case for substantially all trade receivables. Other financial assets are initially measured at fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset.
A financial asset is classified as current when the cash flows expected to flow from the instrument mature within one year.
All recognized financial assets will subsequently be measured at either amortized cost or fair value under IFRS 9 Financial Instruments, specifically:
\u2022A debt instrument that (i) is held within a business model whose objective is to collect the contractual cash flows and (ii) has contractual cash flows that are solely payments of principal and interest on the principal amount outstanding is measured at amortized cost (net of any write down for impairment), unless the asset is designated at fair value through profit or loss (FVTPL) under the fair value option.
\u2022All other debt instruments are measured at FVTPL.
\u2022All equity investments are measured in the consolidated statement of financial position at fair value, with gains and losses recognized in profit or loss except that if an equity investment is not held for trading, nor contingent consideration recognized by an acquirer in a business combination, an irrevocable election can be made at initial recognition to measure the investment at FVTOCI, with dividend income recognized in profit or loss. This classification is determined on an instrument-by-instrument basis. Upon derecognition, the cumulative gains or losses previously recognized in other comprehensive income are reclassified to retained earnings.
\u2022Equity investments in partnerships of investment funds are measured in the consolidated statement of financial position at fair value with gains and losses recognized in profit or loss. Based on the analysis of the characteristics of these funds the Group determined that they were not eligible for the FVTOCI option and therefore are accounted for at FVTPL.
\u2022For instruments quoted in an active market, the fair value corresponds to a market price (level 1). For instruments that are not quoted in an active market, the fair value is determined using valuation techniques including reference to recent arm\u2019s length market transactions or transactions involving instruments which are substantially the same (level 2), or discounted cash flow analysis including, to the greatest possible extent, assumptions consistent with observable market data (level 3). However, in limited circumstances, cost of equity instruments may be an appropriate estimate of their fair value. That may be the case if insufficient more recent information is available to measure fair value, or if there is a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.
Impairment of financial assets
\u2022The impairment loss of a financial asset measured at amortized cost is calculated based on the expected loss model, representing the weighted average of credit losses with the respective risks of a default occurring as the weights. Expected credit losses are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
\u2022For trade receivables that do not contain a significant financing component (i.e. substantially all trade receivables), the loss allowance is measured at an amount equal to lifetime expected credit losses. Those are the expected credit losses that result from all possible default events over the expected life of those trade receivables, using a provision matrix that considers historical information on defaults adjusted for the forward-looking information per customer. The Group considers a financial asset in default risk when contractual payments are 60 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is fully impaired when there is no reasonable expectation of recovering the contractual cash flows.
Impairment losses are recognized in the consolidated income statement, except for debt instruments measured at fair value through other comprehensive income.
In this case, the allowance is recognized in other comprehensive income.
NOTE F18
Intangible assets
fAccounting policy
An intangible asset is an identifiable non-monetary asset without physical substance. It is identifiable when it is separable, i.e. Is capable of being separated or divided from the Group, or when it arises from contractual or other legal rights. An intangible asset shall be recognized if, and only if:
(a)it is probable that the expected future economic benefits that are attributable to the asset will flow to the Group; and
(b)the cost of the asset can be measured reliably.
Intangible assets acquired or developed internally are initially measured at cost. The cost of an acquired intangible asset comprises its purchase price, import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, and any directly attributable cost of preparing the asset for its intended use. Subsequent expenditure on intangible assets is capitalized only if it is probable that it will increase the future economic benefits associated with the specific asset. Other expenditure is expensed as incurred.
After initial recognition, intangible assets are measured at cost less accumulated amortization and impairment losses, if any.
Intangible assets are amortized on a straight-line basis over their estimated useful lives, which do not exceed the contractual period, if any. The estimated useful lives, residual values and amortization methods are reviewed at each year-end, and any changes in estimates are accounted for prospectively.
| \n Patents and trademarks | \n\n 2-20 | \n\n years | \n
|---|---|---|
| \n Software | \n\n 3-5 | \n\n years | \n
| \n Development expenditures | \n\n 2-5 | \n\n years | \n
| \n Customer relationships | \n\n 5-29 | \n\n years | \n
| \n Other intangible assets - Technologies | \n\n 5-20 | \n\n years | \n
Amortization expense is included in the consolidated income statement within the cost of goods sold, administrative costs, research and development costs and other operating gains and losses.
The asset is tested for impairment if (a) there is a trigger for impairment, and (b) annually for projects under development (see note F23 Impairment).
Intangible assets are derecognized from the consolidated statement of financial position on disposal or when no future economic benefits are expected from their use or disposal. The gain or loss arising from derecognition of an intangible asset is recognized in profit or loss at the moment of derecognition.
Research and development costs
Research costs are expensed in the period in which they are incurred.
Development costs are capitalized if, and only if, all the following conditions are fulfilled:
\u2022the cost of the asset can be reliably measured;
\u2022the technical feasibility of the product has been demonstrated;
\u2022the product or process will be placed on the market or used internally;
\u2022the assets will generate future economic benefits (a potential market exists for the product or, where it is to be used internally, its future utility has been demonstrated);
\u2022the technical, financial and other resources required to complete the project are available.
Development costs comprise employee expenses, the cost of materials and services directly attributable to the projects, and an appropriate share of directly attributable fixed costs including, and where applicable, borrowing costs. The intangible assets are amortized as from the moment they are available for use, i.e. When they are in the location and condition necessary for them to be capable of operating in the manner intended by management. Development costs, which do not satisfy the above conditions are expensed as incurred.
Patents, trademarks and customer relationships
Those intangible assets have mainly been acquired through business combinations. Customer relationships consist of customer lists.
Other intangible assets
Other intangible assets mainly include technology acquired separately or in a business combination.
In the table below, the 2023 additions and depreciation expenses include the items of Specialty Businesses until the Partial Demerger.
| \n In \u20ac million | \n\n Development costs | \n\n Patents and trademarks | \n\n Customer relationships | \n\n Other intangible assets | \n\n Total | \n
|---|---|---|---|---|---|
| \n Gross carrying amount | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n 577 | \n\n 1,744 | \n\n 2,066 | \n\n 765 | \n\n 5,153 | \n
| \n Additions | \n\n 71 | \n\n 1 | \n\n \n | \n\n 33 | \n\n 105 | \n
| \n Disposals and closures | \n\n -66 | \n\n -74 | \n\n \n | \n\n -100 | \n\n -239 | \n
| \n Increase through business combinations | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n Currency translation differences | \n\n -3 | \n\n -25 | \n\n -37 | \n\n -14 | \n\n -80 | \n
| \n Partial Demerger | \n\n -482 | \n\n -1,079 | \n\n -1,781 | \n\n -582 | \n\n -3,924 | \n
| \n Other | \n\n 1 | \n\n 5 | \n\n \n | \n\n -10 | \n\n -4 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n December 31, 2023 | \n\n 98 | \n\n 572 | \n\n 248 | \n\n 92 | \n\n 1,010 | \n
| \n Additions | \n\n 9 | \n\n 0 | \n\n \n | \n\n 4 | \n\n 13 | \n
| \n Disposals and closures | \n\n -2 | \n\n 0 | \n\n \n | \n\n 0 | \n\n -3 | \n
| \n Increase through business combinations | \n\n 0 | \n\n 0 | \n\n \n | \n\n 3 | \n\n 3 | \n
| \n Currency translation differences | \n\n -1 | \n\n 3 | \n\n 0 | \n\n 1 | \n\n 4 | \n
| \n Other | \n\n 1 | \n\n 25 | \n\n \n | \n\n 7 | \n\n 33 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n December 31, 2024 | \n\n 105 | \n\n 601 | \n\n 248 | \n\n 107 | \n\n 1,060 | \n
| \n Accumulated amortization | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n -277 | \n\n -1,155 | \n\n -1,061 | \n\n -611 | \n\n -3,104 | \n
| \n Amortization | \n\n -54 | \n\n -72 | \n\n -85 | \n\n -17 | \n\n -228 | \n
| \n Impairment | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Reversal of impairment | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n Disposals and closures | \n\n 61 | \n\n 74 | \n\n \n | \n\n 100 | \n\n 235 | \n
| \n Currency translation differences | \n\n 1 | \n\n 13 | \n\n 16 | \n\n 13 | \n\n 43 | \n
| \n Partial Demerger | \n\n 223 | \n\n 651 | \n\n 887 | \n\n 485 | \n\n 2,246 | \n
| \n Other | \n\n 0 | \n\n 24 | \n\n \n | \n\n -25 | \n\n 0 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n December 31, 2023 | \n\n -45 | \n\n -466 | \n\n -244 | \n\n -55 | \n\n -809 | \n
| \n Amortization | \n\n -7 | \n\n -14 | \n\n -1 | \n\n -6 | \n\n -29 | \n
| \n Impairment | \n\n 0 | \n\n -1 | \n\n 0 | \n\n -1 | \n\n -1 | \n
| \n Reversal of impairment | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n Disposals and closures | \n\n 2 | \n\n 0 | \n\n \n | \n\n 0 | \n\n 2 | \n
| \n Currency translation differences | \n\n 0 | \n\n 2 | \n\n 0 | \n\n -1 | \n\n 1 | \n
| \n Other | \n\n 0 | \n\n -8 | \n\n \n | \n\n -1 | \n\n -9 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n December 31, 2024 | \n\n -50 | \n\n -486 | \n\n -245 | \n\n -62 | \n\n -843 | \n
| \n Net carrying amount | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n 300 | \n\n 590 | \n\n 1,005 | \n\n 154 | \n\n 2,049 | \n
| \n December 31, 2023 | \n\n 52 | \n\n 107 | \n\n 5 | \n\n 37 | \n\n 201 | \n
| \n December 31, 2024 | \n\n 55 | \n\n 115 | \n\n 2 | \n\n 45 | \n\n 217 | \n
The line \u201cOther\u201d mainly includes changes following portfolio transactions.
NOTE F19
Goodwill and business combinations
fAccounting policy
Goodwill
Goodwill arising in a business combination is recognized as an asset at the date that control is obtained (the acquisition date). Goodwill is measured as the excess of the sum of:
(a)the consideration transferred
(b)the amount of any non-controlling interests in the acquiree; and
(c)in a business combination achieved in stages, the acquisition-date fair value of the previously held equity interest in the acquiree, over the share acquired by the Group in the fair value of the entity\u2019s identifiable net assets at the acquisition date.
Goodwill is not amortized but is tested for impairment on an annual basis, and more frequently if there are any impairment triggers identified.
For impairment testing, goodwill is allocated to each of the Group\u2019s cash-generating units (or groups of cash-generating units) in accordance with IAS 36 Impairment of Assets.
A cash-generating unit (CGU) is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other group(s) of assets.
These tests consist of comparing the carrying amount of the assets or (groups of) CGUs with their recoverable amount. The recoverable amount of an asset or a (group of) CGU(s) is the higher of its fair value less costs to sell and its value in use. If the recoverable amount of the CGU is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognized on goodwill shall not be reversed in a subsequent period.
Assets held for sale include their related goodwill.
On disposal of an operation within a CGU to which goodwill has been allocated, the goodwill associated with the operation disposed of is included in the determination of the profit or loss on disposal. It is measured based on the relative values of the operation disposed of and the portion of the CGU retained, unless another method better reflects the goodwill associated with the operation disposed of.
| \n In \u20ac million | \n\n Total | \n
|---|---|
| \n December 31, 2022 | \n\n 3,472 | \n
| \n Addition | \n\n 2 | \n
| \n Currency translation differences | \n\n -36 | \n
| \n Disposals | \n\n 0 | \n
| \n Impairment | \n\n -38 | \n
| \n Partial Demerger | \n\n -2,637 | \n
| \n December 31, 2023 | \n\n 764 | \n
| \n Addition | \n\n 18 | \n
| \n Currency translation differences | \n\n 0 | \n
| \n Disposals | \n\n 0 | \n
| \n Impairment | \n\n 0 | \n
| \n December 31, 2024 | \n\n 782 | \n
In 2023, the currency translation differences mainly relate to goodwill expressed in US dollars, located in Specialty Businesses.
See note F23 for more details on impairment testing.
In March 2024, the Group increased its ownership in its equity accounted investment in Shandong Huatai Interox Chemical Co. by 10% from 50% to 60%, for \u20ac4 million. The transaction resulted in Solvay obtaining control over the legal entity. The acquisition was accounted for as a business combination achieved in stages and resulted in a \u20ac10 million gain on derecognizing the equity investment and recognizing \u20ac18 million of goodwill and \u20ac3 million of intangible assets based on the fair value of the entity upon consolidation. The Group finalized the purchase price allocation in December 2024 and recognized no material change.
Goodwill acquired in a business combination is allocated to the CGUs or groups of CGUs that are expected to benefit from that business combination.
| \n In \u20ac million | \n\n 2024 | \n||||
|---|---|---|---|---|---|
| \n At beginning of the period | \n\n Additions | \n\n Impairment | \n\n Currency translation differences | \n\n At the end of the period | \n|
| \n Special Chem | \n\n 275 | \n\n \n | \n\n \n | \n\n -1 | \n\n 275 | \n
| \n Soda Ash & Derivatives | \n\n 237 | \n\n \n | \n\n \n | \n\n \n | \n\n 237 | \n
| \n Coatis | \n\n 82 | \n\n \n | \n\n \n | \n\n \n | \n\n 82 | \n
| \n Silica | \n\n 72 | \n\n \n | \n\n \n | \n\n \n | \n\n 72 | \n
| \n Energy Services | \n\n 0 | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Hydrogen Peroxide Europe | \n\n 37 | \n\n \n | \n\n \n | \n\n \n | \n\n 37 | \n
| \n Hydrogen Peroxide Mercosul | \n\n 27 | \n\n \n | \n\n \n | \n\n \n | \n\n 27 | \n
| \n Hydrogen Peroxide Nafta | \n\n 15 | \n\n \n | \n\n \n | \n\n \n | \n\n 15 | \n
| \n Hydrogen Peroxide Asia | \n\n 19 | \n\n 18 | \n\n \n | \n\n 0 | \n\n 37 | \n
| \n Total goodwill | \n\n 764 | \n\n 18 | \n\n 0 | \n\n 0 | \n\n 782 | \n
| \n In \u20ac million | \n\n 2023 | \n||||||
|---|---|---|---|---|---|---|---|
| \n At beginning of the period | \n\n Additions | \n\n Impairment | \n\n Currency translation differences | \n\n Transfer | \n\n Partial Demerger | \n\n At the end of the period | \n|
| \n Operating segments - Groups of CGUs | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Materials | \n\n 341 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n -341 | \n\n 0 | \n
| \n Chemicals | \n\n 121 | \n\n \n | \n\n \n | \n\n \n | \n\n -121 | \n\n \n | \n\n 0 | \n
| \n Solutions | \n\n 264 | \n\n \n | \n\n \n | \n\n \n | \n\n -65 | \n\n -199 | \n\n 0 | \n
| \n (Groups of) CGUs | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Composite Materials | \n\n 591 | \n\n \n | \n\n \n | \n\n -15 | \n\n \n | \n\n -577 | \n\n 0 | \n
| \n Novecare | \n\n 565 | \n\n 2 | \n\n \n | \n\n -3 | \n\n \n | \n\n -564 | \n\n 0 | \n
| \n Technology Solutions | \n\n 734 | \n\n \n | \n\n \n | \n\n -17 | \n\n \n | \n\n -716 | \n\n 0 | \n
| \n Special Chem | \n\n 210 | \n\n \n | \n\n \n | \n\n 0 | \n\n 65 | \n\n \n | \n\n 275 | \n
| \n Specialty Polymers | \n\n 181 | \n\n \n | \n\n \n | \n\n -1 | \n\n \n | \n\n -180 | \n\n 0 | \n
| \n Soda Ash & Derivatives | \n\n 162 | \n\n \n | \n\n \n | \n\n \n | \n\n 75 | \n\n \n | \n\n 237 | \n
| \n Coatis | \n\n 82 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n 82 | \n
| \n Silica | \n\n 72 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n 72 | \n
| \n Aroma Performance | \n\n 49 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n -49 | \n\n 0 | \n
| \n Energy Services | \n\n 50 | \n\n \n | \n\n -38 | \n\n \n | \n\n \n | \n\n -12 | \n\n 0 | \n
| \n Hydrogen Peroxide Europe | \n\n 21 | \n\n \n | \n\n \n | \n\n \n | \n\n 17 | \n\n \n | \n\n 37 | \n
| \n Hydrogen Peroxide Mercosul | \n\n 14 | \n\n \n | \n\n \n | \n\n \n | \n\n 14 | \n\n \n | \n\n 27 | \n
| \n Hydrogen Peroxide Nafta | \n\n 7 | \n\n \n | \n\n \n | \n\n \n | \n\n 8 | \n\n \n | \n\n 15 | \n
| \n Hydrogen Peroxide Asia | \n\n 11 | \n\n \n | \n\n \n | \n\n 0 | \n\n 8 | \n\n \n | \n\n 19 | \n
| \n Total goodwill | \n\n 3,472 | \n\n 2 | \n\n -38 | \n\n -35 | \n\n 0 | \n\n -2,637 | \n\n 764 | \n
See also note F23 Impairment.
As a result of the Partial Demerger of the Specialty Business, effectuated in December 2023, the Group realigned its Operating Segments as detailed in note F1 Revenue and Segment Information. The realignment resulted in the reallocation of segment level goodwill of \u20ac186 million (see \u20ac121 million + \u20ac65 million in column Transfer in 2023 table) to the CGUs using a relative value approach (respective fair values). The reallocation had no significant impact on the impairment analysis performed.
NOTE F18
Intangible assets
fAccounting policy
An intangible asset is an identifiable non-monetary asset without physical substance. It is identifiable when it is separable, i.e. Is capable of being separated or divided from the Group, or when it arises from contractual or other legal rights. An intangible asset shall be recognized if, and only if:
(a)it is probable that the expected future economic benefits that are attributable to the asset will flow to the Group; and
(b)the cost of the asset can be measured reliably.
Intangible assets acquired or developed internally are initially measured at cost. The cost of an acquired intangible asset comprises its purchase price, import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, and any directly attributable cost of preparing the asset for its intended use. Subsequent expenditure on intangible assets is capitalized only if it is probable that it will increase the future economic benefits associated with the specific asset. Other expenditure is expensed as incurred.
After initial recognition, intangible assets are measured at cost less accumulated amortization and impairment losses, if any.
Intangible assets are amortized on a straight-line basis over their estimated useful lives, which do not exceed the contractual period, if any. The estimated useful lives, residual values and amortization methods are reviewed at each year-end, and any changes in estimates are accounted for prospectively.
fAccounting policy
Goodwill
Goodwill arising in a business combination is recognized as an asset at the date that control is obtained (the acquisition date). Goodwill is measured as the excess of the sum of:
(a)the consideration transferred
(b)the amount of any non-controlling interests in the acquiree; and
(c)in a business combination achieved in stages, the acquisition-date fair value of the previously held equity interest in the acquiree, over the share acquired by the Group in the fair value of the entity\u2019s identifiable net assets at the acquisition date.
Goodwill is not amortized but is tested for impairment on an annual basis, and more frequently if there are any impairment triggers identified.
For impairment testing, goodwill is allocated to each of the Group\u2019s cash-generating units (or groups of cash-generating units) in accordance with IAS 36 Impairment of Assets.
A cash-generating unit (CGU) is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other group(s) of assets.
These tests consist of comparing the carrying amount of the assets or (groups of) CGUs with their recoverable amount. The recoverable amount of an asset or a (group of) CGU(s) is the higher of its fair value less costs to sell and its value in use. If the recoverable amount of the CGU is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognized on goodwill shall not be reversed in a subsequent period.
Assets held for sale include their related goodwill.
On disposal of an operation within a CGU to which goodwill has been allocated, the goodwill associated with the operation disposed of is included in the determination of the profit or loss on disposal. It is measured based on the relative values of the operation disposed of and the portion of the CGU retained, unless another method better reflects the goodwill associated with the operation disposed of.
NOTE F23
Impairment
fAccounting policy
General
At the end of each reporting period, the Group reviews whether there is any indication that assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the CGU to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are allocated to individual CGUs, or otherwise they are allocated to the smallest group of CGUs for which a reasonable and consistent allocation basis can be identified.
The recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate. Future cash flows are adjusted for risks not incorporated into the discount rate.
If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or CGU) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined (net of amortization or depreciation) had no impairment loss been recognized for the asset (or CGU) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss. An impairment loss recognized for goodwill shall not be reversed in a subsequent period.
Assets other than non-current assets held for sale
In accordance with IAS 36 Impairment of Assets, the recoverable amount of property, plant and equipment, intangible assets, right-of-use assets, CGUs or groups of CGUs, including goodwill, and equity method investees corresponds to the higher of their fair value less costs of disposal, and their value in use. The latter equals the present value of the future cash flows expected to be derived from each asset, CGU or group of CGUs, and equity method investees and is determined using the following inputs:
\u2022business plan approved by management based on growth and profitability assumptions, considering past performances, forecast changes in the economic environment and expected market developments, including opportunity and risks resulting from climate change (taking into account the Solvay's sustainability strategy \u2013 see note Climate change in the IFRS general accounting policies) and environmental regulations such as products phasing out. For further details, refer to the Risk Management Section. Such business plan generally covers five years, unless management is confident that projections over a longer period are reliable;
\u2022consideration of a terminal value determined based on the cash flows generally obtained by extrapolating the cash flows of the last years of the business plan referred to above, affected by a long-term growth rate deemed appropriate for the activity and the location of the assets;
\u2022discounting of expected cash flows at a rate determined using the weighted average cost of capital formula.
Impairment of financial assets
\u2022The impairment loss of a financial asset measured at amortized cost is calculated based on the expected loss model, representing the weighted average of credit losses with the respective risks of a default occurring as the weights. Expected credit losses are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
\u2022For trade receivables that do not contain a significant financing component (i.e. substantially all trade receivables), the loss allowance is measured at an amount equal to lifetime expected credit losses. Those are the expected credit losses that result from all possible default events over the expected life of those trade receivables, using a provision matrix that considers historical information on defaults adjusted for the forward-looking information per customer. The Group considers a financial asset in default risk when contractual payments are 60 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is fully impaired when there is no reasonable expectation of recovering the contractual cash flows.
Impairment losses are recognized in the consolidated income statement, except for debt instruments measured at fair value through other comprehensive income.
In this case, the allowance is recognized in other comprehensive income.
NOTE F18
Intangible assets
fAccounting policy
An intangible asset is an identifiable non-monetary asset without physical substance. It is identifiable when it is separable, i.e. Is capable of being separated or divided from the Group, or when it arises from contractual or other legal rights. An intangible asset shall be recognized if, and only if:
(a)it is probable that the expected future economic benefits that are attributable to the asset will flow to the Group; and
(b)the cost of the asset can be measured reliably.
Intangible assets acquired or developed internally are initially measured at cost. The cost of an acquired intangible asset comprises its purchase price, import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, and any directly attributable cost of preparing the asset for its intended use. Subsequent expenditure on intangible assets is capitalized only if it is probable that it will increase the future economic benefits associated with the specific asset. Other expenditure is expensed as incurred.
After initial recognition, intangible assets are measured at cost less accumulated amortization and impairment losses, if any.
Intangible assets are amortized on a straight-line basis over their estimated useful lives, which do not exceed the contractual period, if any. The estimated useful lives, residual values and amortization methods are reviewed at each year-end, and any changes in estimates are accounted for prospectively.
| \n Patents and trademarks | \n\n 2-20 | \n\n years | \n
|---|---|---|
| \n Software | \n\n 3-5 | \n\n years | \n
| \n Development expenditures | \n\n 2-5 | \n\n years | \n
| \n Customer relationships | \n\n 5-29 | \n\n years | \n
| \n Other intangible assets - Technologies | \n\n 5-20 | \n\n years | \n
Amortization expense is included in the consolidated income statement within the cost of goods sold, administrative costs, research and development costs and other operating gains and losses.
The asset is tested for impairment if (a) there is a trigger for impairment, and (b) annually for projects under development (see note F23 Impairment).
Intangible assets are derecognized from the consolidated statement of financial position on disposal or when no future economic benefits are expected from their use or disposal. The gain or loss arising from derecognition of an intangible asset is recognized in profit or loss at the moment of derecognition.
Research and development costs
Research costs are expensed in the period in which they are incurred.
Development costs are capitalized if, and only if, all the following conditions are fulfilled:
\u2022the cost of the asset can be reliably measured;
\u2022the technical feasibility of the product has been demonstrated;
\u2022the product or process will be placed on the market or used internally;
\u2022the assets will generate future economic benefits (a potential market exists for the product or, where it is to be used internally, its future utility has been demonstrated);
\u2022the technical, financial and other resources required to complete the project are available.
Development costs comprise employee expenses, the cost of materials and services directly attributable to the projects, and an appropriate share of directly attributable fixed costs including, and where applicable, borrowing costs. The intangible assets are amortized as from the moment they are available for use, i.e. When they are in the location and condition necessary for them to be capable of operating in the manner intended by management. Development costs, which do not satisfy the above conditions are expensed as incurred.
Patents, trademarks and customer relationships
Those intangible assets have mainly been acquired through business combinations. Customer relationships consist of customer lists.
Other intangible assets
Other intangible assets mainly include technology acquired separately or in a business combination.
In the table below, the 2023 additions and depreciation expenses include the items of Specialty Businesses until the Partial Demerger.
| \n In \u20ac million | \n\n Development costs | \n\n Patents and trademarks | \n\n Customer relationships | \n\n Other intangible assets | \n\n Total | \n
|---|---|---|---|---|---|
| \n Gross carrying amount | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n 577 | \n\n 1,744 | \n\n 2,066 | \n\n 765 | \n\n 5,153 | \n
| \n Additions | \n\n 71 | \n\n 1 | \n\n \n | \n\n 33 | \n\n 105 | \n
| \n Disposals and closures | \n\n -66 | \n\n -74 | \n\n \n | \n\n -100 | \n\n -239 | \n
| \n Increase through business combinations | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n Currency translation differences | \n\n -3 | \n\n -25 | \n\n -37 | \n\n -14 | \n\n -80 | \n
| \n Partial Demerger | \n\n -482 | \n\n -1,079 | \n\n -1,781 | \n\n -582 | \n\n -3,924 | \n
| \n Other | \n\n 1 | \n\n 5 | \n\n \n | \n\n -10 | \n\n -4 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n December 31, 2023 | \n\n 98 | \n\n 572 | \n\n 248 | \n\n 92 | \n\n 1,010 | \n
| \n Additions | \n\n 9 | \n\n 0 | \n\n \n | \n\n 4 | \n\n 13 | \n
| \n Disposals and closures | \n\n -2 | \n\n 0 | \n\n \n | \n\n 0 | \n\n -3 | \n
| \n Increase through business combinations | \n\n 0 | \n\n 0 | \n\n \n | \n\n 3 | \n\n 3 | \n
| \n Currency translation differences | \n\n -1 | \n\n 3 | \n\n 0 | \n\n 1 | \n\n 4 | \n
| \n Other | \n\n 1 | \n\n 25 | \n\n \n | \n\n 7 | \n\n 33 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n December 31, 2024 | \n\n 105 | \n\n 601 | \n\n 248 | \n\n 107 | \n\n 1,060 | \n
| \n Accumulated amortization | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n -277 | \n\n -1,155 | \n\n -1,061 | \n\n -611 | \n\n -3,104 | \n
| \n Amortization | \n\n -54 | \n\n -72 | \n\n -85 | \n\n -17 | \n\n -228 | \n
| \n Impairment | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Reversal of impairment | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n Disposals and closures | \n\n 61 | \n\n 74 | \n\n \n | \n\n 100 | \n\n 235 | \n
| \n Currency translation differences | \n\n 1 | \n\n 13 | \n\n 16 | \n\n 13 | \n\n 43 | \n
| \n Partial Demerger | \n\n 223 | \n\n 651 | \n\n 887 | \n\n 485 | \n\n 2,246 | \n
| \n Other | \n\n 0 | \n\n 24 | \n\n \n | \n\n -25 | \n\n 0 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n December 31, 2023 | \n\n -45 | \n\n -466 | \n\n -244 | \n\n -55 | \n\n -809 | \n
| \n Amortization | \n\n -7 | \n\n -14 | \n\n -1 | \n\n -6 | \n\n -29 | \n
| \n Impairment | \n\n 0 | \n\n -1 | \n\n 0 | \n\n -1 | \n\n -1 | \n
| \n Reversal of impairment | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n Disposals and closures | \n\n 2 | \n\n 0 | \n\n \n | \n\n 0 | \n\n 2 | \n
| \n Currency translation differences | \n\n 0 | \n\n 2 | \n\n 0 | \n\n -1 | \n\n 1 | \n
| \n Other | \n\n 0 | \n\n -8 | \n\n \n | \n\n -1 | \n\n -9 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n December 31, 2024 | \n\n -50 | \n\n -486 | \n\n -245 | \n\n -62 | \n\n -843 | \n
| \n Net carrying amount | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n 300 | \n\n 590 | \n\n 1,005 | \n\n 154 | \n\n 2,049 | \n
| \n December 31, 2023 | \n\n 52 | \n\n 107 | \n\n 5 | \n\n 37 | \n\n 201 | \n
| \n December 31, 2024 | \n\n 55 | \n\n 115 | \n\n 2 | \n\n 45 | \n\n 217 | \n
The line \u201cOther\u201d mainly includes changes following portfolio transactions.
NOTE F18
Intangible assets
fAccounting policy
An intangible asset is an identifiable non-monetary asset without physical substance. It is identifiable when it is separable, i.e. Is capable of being separated or divided from the Group, or when it arises from contractual or other legal rights. An intangible asset shall be recognized if, and only if:
(a)it is probable that the expected future economic benefits that are attributable to the asset will flow to the Group; and
(b)the cost of the asset can be measured reliably.
Intangible assets acquired or developed internally are initially measured at cost. The cost of an acquired intangible asset comprises its purchase price, import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, and any directly attributable cost of preparing the asset for its intended use. Subsequent expenditure on intangible assets is capitalized only if it is probable that it will increase the future economic benefits associated with the specific asset. Other expenditure is expensed as incurred.
After initial recognition, intangible assets are measured at cost less accumulated amortization and impairment losses, if any.
Intangible assets are amortized on a straight-line basis over their estimated useful lives, which do not exceed the contractual period, if any. The estimated useful lives, residual values and amortization methods are reviewed at each year-end, and any changes in estimates are accounted for prospectively.
| \n Patents and trademarks | \n\n 2-20 | \n\n years | \n
|---|---|---|
| \n Software | \n\n 3-5 | \n\n years | \n
| \n Development expenditures | \n\n 2-5 | \n\n years | \n
| \n Customer relationships | \n\n 5-29 | \n\n years | \n
| \n Other intangible assets - Technologies | \n\n 5-20 | \n\n years | \n
Amortization expense is included in the consolidated income statement within the cost of goods sold, administrative costs, research and development costs and other operating gains and losses.
The asset is tested for impairment if (a) there is a trigger for impairment, and (b) annually for projects under development (see note F23 Impairment).
Intangible assets are derecognized from the consolidated statement of financial position on disposal or when no future economic benefits are expected from their use or disposal. The gain or loss arising from derecognition of an intangible asset is recognized in profit or loss at the moment of derecognition.
Research and development costs
Research costs are expensed in the period in which they are incurred.
Development costs are capitalized if, and only if, all the following conditions are fulfilled:
\u2022the cost of the asset can be reliably measured;
\u2022the technical feasibility of the product has been demonstrated;
\u2022the product or process will be placed on the market or used internally;
\u2022the assets will generate future economic benefits (a potential market exists for the product or, where it is to be used internally, its future utility has been demonstrated);
\u2022the technical, financial and other resources required to complete the project are available.
Development costs comprise employee expenses, the cost of materials and services directly attributable to the projects, and an appropriate share of directly attributable fixed costs including, and where applicable, borrowing costs. The intangible assets are amortized as from the moment they are available for use, i.e. When they are in the location and condition necessary for them to be capable of operating in the manner intended by management. Development costs, which do not satisfy the above conditions are expensed as incurred.
Patents, trademarks and customer relationships
Those intangible assets have mainly been acquired through business combinations. Customer relationships consist of customer lists.
Other intangible assets
Other intangible assets mainly include technology acquired separately or in a business combination.
NOTE F18
Intangible assets
fAccounting policy
An intangible asset is an identifiable non-monetary asset without physical substance. It is identifiable when it is separable, i.e. Is capable of being separated or divided from the Group, or when it arises from contractual or other legal rights. An intangible asset shall be recognized if, and only if:
(a)it is probable that the expected future economic benefits that are attributable to the asset will flow to the Group; and
(b)the cost of the asset can be measured reliably.
Intangible assets acquired or developed internally are initially measured at cost. The cost of an acquired intangible asset comprises its purchase price, import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, and any directly attributable cost of preparing the asset for its intended use. Subsequent expenditure on intangible assets is capitalized only if it is probable that it will increase the future economic benefits associated with the specific asset. Other expenditure is expensed as incurred.
After initial recognition, intangible assets are measured at cost less accumulated amortization and impairment losses, if any.
Intangible assets are amortized on a straight-line basis over their estimated useful lives, which do not exceed the contractual period, if any. The estimated useful lives, residual values and amortization methods are reviewed at each year-end, and any changes in estimates are accounted for prospectively.
| \n Patents and trademarks | \n\n 2-20 | \n\n years | \n
|---|---|---|
| \n Software | \n\n 3-5 | \n\n years | \n
| \n Development expenditures | \n\n 2-5 | \n\n years | \n
| \n Customer relationships | \n\n 5-29 | \n\n years | \n
| \n Other intangible assets - Technologies | \n\n 5-20 | \n\n years | \n
Amortization expense is included in the consolidated income statement within the cost of goods sold, administrative costs, research and development costs and other operating gains and losses.
The asset is tested for impairment if (a) there is a trigger for impairment, and (b) annually for projects under development (see note F23 Impairment).
Intangible assets are derecognized from the consolidated statement of financial position on disposal or when no future economic benefits are expected from their use or disposal. The gain or loss arising from derecognition of an intangible asset is recognized in profit or loss at the moment of derecognition.
Research and development costs
Research costs are expensed in the period in which they are incurred.
Development costs are capitalized if, and only if, all the following conditions are fulfilled:
\u2022the cost of the asset can be reliably measured;
\u2022the technical feasibility of the product has been demonstrated;
\u2022the product or process will be placed on the market or used internally;
\u2022the assets will generate future economic benefits (a potential market exists for the product or, where it is to be used internally, its future utility has been demonstrated);
\u2022the technical, financial and other resources required to complete the project are available.
Development costs comprise employee expenses, the cost of materials and services directly attributable to the projects, and an appropriate share of directly attributable fixed costs including, and where applicable, borrowing costs. The intangible assets are amortized as from the moment they are available for use, i.e. When they are in the location and condition necessary for them to be capable of operating in the manner intended by management. Development costs, which do not satisfy the above conditions are expensed as incurred.
Patents, trademarks and customer relationships
Those intangible assets have mainly been acquired through business combinations. Customer relationships consist of customer lists.
Other intangible assets
Other intangible assets mainly include technology acquired separately or in a business combination.
NOTE F19
Goodwill and business combinations
fAccounting policy
Goodwill
Goodwill arising in a business combination is recognized as an asset at the date that control is obtained (the acquisition date). Goodwill is measured as the excess of the sum of:
(a)the consideration transferred
(b)the amount of any non-controlling interests in the acquiree; and
(c)in a business combination achieved in stages, the acquisition-date fair value of the previously held equity interest in the acquiree, over the share acquired by the Group in the fair value of the entity\u2019s identifiable net assets at the acquisition date.
Goodwill is not amortized but is tested for impairment on an annual basis, and more frequently if there are any impairment triggers identified.
For impairment testing, goodwill is allocated to each of the Group\u2019s cash-generating units (or groups of cash-generating units) in accordance with IAS 36 Impairment of Assets.
A cash-generating unit (CGU) is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other group(s) of assets.
These tests consist of comparing the carrying amount of the assets or (groups of) CGUs with their recoverable amount. The recoverable amount of an asset or a (group of) CGU(s) is the higher of its fair value less costs to sell and its value in use. If the recoverable amount of the CGU is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognized on goodwill shall not be reversed in a subsequent period.
Assets held for sale include their related goodwill.
On disposal of an operation within a CGU to which goodwill has been allocated, the goodwill associated with the operation disposed of is included in the determination of the profit or loss on disposal. It is measured based on the relative values of the operation disposed of and the portion of the CGU retained, unless another method better reflects the goodwill associated with the operation disposed of.
NOTE F18
Intangible assets
fAccounting policy
An intangible asset is an identifiable non-monetary asset without physical substance. It is identifiable when it is separable, i.e. Is capable of being separated or divided from the Group, or when it arises from contractual or other legal rights. An intangible asset shall be recognized if, and only if:
(a)it is probable that the expected future economic benefits that are attributable to the asset will flow to the Group; and
(b)the cost of the asset can be measured reliably.
Intangible assets acquired or developed internally are initially measured at cost. The cost of an acquired intangible asset comprises its purchase price, import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, and any directly attributable cost of preparing the asset for its intended use. Subsequent expenditure on intangible assets is capitalized only if it is probable that it will increase the future economic benefits associated with the specific asset. Other expenditure is expensed as incurred.
After initial recognition, intangible assets are measured at cost less accumulated amortization and impairment losses, if any.
Intangible assets are amortized on a straight-line basis over their estimated useful lives, which do not exceed the contractual period, if any. The estimated useful lives, residual values and amortization methods are reviewed at each year-end, and any changes in estimates are accounted for prospectively.
fAccounting policy
Goodwill
Goodwill arising in a business combination is recognized as an asset at the date that control is obtained (the acquisition date). Goodwill is measured as the excess of the sum of:
(a)the consideration transferred
(b)the amount of any non-controlling interests in the acquiree; and
(c)in a business combination achieved in stages, the acquisition-date fair value of the previously held equity interest in the acquiree, over the share acquired by the Group in the fair value of the entity\u2019s identifiable net assets at the acquisition date.
Goodwill is not amortized but is tested for impairment on an annual basis, and more frequently if there are any impairment triggers identified.
For impairment testing, goodwill is allocated to each of the Group\u2019s cash-generating units (or groups of cash-generating units) in accordance with IAS 36 Impairment of Assets.
A cash-generating unit (CGU) is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other group(s) of assets.
These tests consist of comparing the carrying amount of the assets or (groups of) CGUs with their recoverable amount. The recoverable amount of an asset or a (group of) CGU(s) is the higher of its fair value less costs to sell and its value in use. If the recoverable amount of the CGU is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognized on goodwill shall not be reversed in a subsequent period.
Assets held for sale include their related goodwill.
On disposal of an operation within a CGU to which goodwill has been allocated, the goodwill associated with the operation disposed of is included in the determination of the profit or loss on disposal. It is measured based on the relative values of the operation disposed of and the portion of the CGU retained, unless another method better reflects the goodwill associated with the operation disposed of.
NOTE F23
Impairment
fAccounting policy
General
At the end of each reporting period, the Group reviews whether there is any indication that assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the CGU to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are allocated to individual CGUs, or otherwise they are allocated to the smallest group of CGUs for which a reasonable and consistent allocation basis can be identified.
The recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate. Future cash flows are adjusted for risks not incorporated into the discount rate.
If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or CGU) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined (net of amortization or depreciation) had no impairment loss been recognized for the asset (or CGU) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss. An impairment loss recognized for goodwill shall not be reversed in a subsequent period.
Assets other than non-current assets held for sale
In accordance with IAS 36 Impairment of Assets, the recoverable amount of property, plant and equipment, intangible assets, right-of-use assets, CGUs or groups of CGUs, including goodwill, and equity method investees corresponds to the higher of their fair value less costs of disposal, and their value in use. The latter equals the present value of the future cash flows expected to be derived from each asset, CGU or group of CGUs, and equity method investees and is determined using the following inputs:
\u2022business plan approved by management based on growth and profitability assumptions, considering past performances, forecast changes in the economic environment and expected market developments, including opportunity and risks resulting from climate change (taking into account the Solvay's sustainability strategy \u2013 see note Climate change in the IFRS general accounting policies) and environmental regulations such as products phasing out. For further details, refer to the Risk Management Section. Such business plan generally covers five years, unless management is confident that projections over a longer period are reliable;
\u2022consideration of a terminal value determined based on the cash flows generally obtained by extrapolating the cash flows of the last years of the business plan referred to above, affected by a long-term growth rate deemed appropriate for the activity and the location of the assets;
\u2022discounting of expected cash flows at a rate determined using the weighted average cost of capital formula.
fAccounting policy
An intangible asset is an identifiable non-monetary asset without physical substance. It is identifiable when it is separable, i.e. Is capable of being separated or divided from the Group, or when it arises from contractual or other legal rights. An intangible asset shall be recognized if, and only if:
(a)it is probable that the expected future economic benefits that are attributable to the asset will flow to the Group; and
(b)the cost of the asset can be measured reliably.
Intangible assets acquired or developed internally are initially measured at cost. The cost of an acquired intangible asset comprises its purchase price, import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, and any directly attributable cost of preparing the asset for its intended use. Subsequent expenditure on intangible assets is capitalized only if it is probable that it will increase the future economic benefits associated with the specific asset. Other expenditure is expensed as incurred.
After initial recognition, intangible assets are measured at cost less accumulated amortization and impairment losses, if any.
Intangible assets are amortized on a straight-line basis over their estimated useful lives, which do not exceed the contractual period, if any. The estimated useful lives, residual values and amortization methods are reviewed at each year-end, and any changes in estimates are accounted for prospectively.
NOTE F20
Property, plant and equipment
fAccounting policy
General
Property, plant and equipment are tangible items that:
\u2022are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and
\u2022are expected to be used during more than one period.
The items of property, plant and equipment owned by the Group are recognized as property, plant and equipment when the following conditions are satisfied:
\u2022it is probable that the future economic benefits associated with the asset will flow to the Group;
\u2022the cost of the asset can be measured reliably.
Items of property, plant and equipment are initially measured at cost. The cost of an item of property, plant and equipment comprises its purchase price and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. If applicable, the cost comprises borrowing costs during the construction period.
After initial recognition, items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses, if any.
Items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives. The components of an item of property, plant and equipment with different useful lives are depreciated separately. Land is not depreciated. The estimated useful lives, residual values and depreciation methods are reviewed at each year end, also considering the potential impact of climate change including the execution of the Solvay's sustainability strategy (see Note on Climate Change Considerations in the IFRS general accounting policies). Any changes in estimates are accounted for prospectively.
| \n Within Land and buildings group | \n\n \n | \n\n \n | \n
|---|---|---|
| \n Buildings | \n\n 30-40 | \n\n years | \n
| \n Within Fixtures and equipment group | \n\n \n | \n\n \n | \n
| \n IT equipment | \n\n 3-5 | \n\n years | \n
| \n Machinery and equipment | \n\n 10-20 | \n\n years | \n
| \n Transportation equipment | \n\n 5-20 | \n\n years | \n
Depreciation expense is included in the consolidated income statement within cost of goods sold, administrative costs, and R&D costs.
Research and development costs
Research costs are expensed in the period in which they are incurred.
Development costs are capitalized if, and only if, all the following conditions are fulfilled:
\u2022the cost of the asset can be reliably measured;
\u2022the technical feasibility of the product has been demonstrated;
\u2022the product or process will be placed on the market or used internally;
\u2022the assets will generate future economic benefits (a potential market exists for the product or, where it is to be used internally, its future utility has been demonstrated);
\u2022the technical, financial and other resources required to complete the project are available.
Development costs comprise employee expenses, the cost of materials and services directly attributable to the projects, and an appropriate share of directly attributable fixed costs including, and where applicable, borrowing costs. The intangible assets are amortized as from the moment they are available for use, i.e. When they are in the location and condition necessary for them to be capable of operating in the manner intended by management. Development costs, which do not satisfy the above conditions are expensed as incurred.
Research and development costs
Research costs are expensed in the period in which they are incurred.
Development costs are capitalized if, and only if, all the following conditions are fulfilled:
\u2022the cost of the asset can be reliably measured;
\u2022the technical feasibility of the product has been demonstrated;
\u2022the product or process will be placed on the market or used internally;
\u2022the assets will generate future economic benefits (a potential market exists for the product or, where it is to be used internally, its future utility has been demonstrated);
\u2022the technical, financial and other resources required to complete the project are available.
Development costs comprise employee expenses, the cost of materials and services directly attributable to the projects, and an appropriate share of directly attributable fixed costs including, and where applicable, borrowing costs. The intangible assets are amortized as from the moment they are available for use, i.e. When they are in the location and condition necessary for them to be capable of operating in the manner intended by management. Development costs, which do not satisfy the above conditions are expensed as incurred.
NOTE F19
Goodwill and business combinations
fAccounting policy
Goodwill
Goodwill arising in a business combination is recognized as an asset at the date that control is obtained (the acquisition date). Goodwill is measured as the excess of the sum of:
(a)the consideration transferred
(b)the amount of any non-controlling interests in the acquiree; and
(c)in a business combination achieved in stages, the acquisition-date fair value of the previously held equity interest in the acquiree, over the share acquired by the Group in the fair value of the entity\u2019s identifiable net assets at the acquisition date.
Goodwill is not amortized but is tested for impairment on an annual basis, and more frequently if there are any impairment triggers identified.
For impairment testing, goodwill is allocated to each of the Group\u2019s cash-generating units (or groups of cash-generating units) in accordance with IAS 36 Impairment of Assets.
A cash-generating unit (CGU) is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other group(s) of assets.
These tests consist of comparing the carrying amount of the assets or (groups of) CGUs with their recoverable amount. The recoverable amount of an asset or a (group of) CGU(s) is the higher of its fair value less costs to sell and its value in use. If the recoverable amount of the CGU is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognized on goodwill shall not be reversed in a subsequent period.
Assets held for sale include their related goodwill.
On disposal of an operation within a CGU to which goodwill has been allocated, the goodwill associated with the operation disposed of is included in the determination of the profit or loss on disposal. It is measured based on the relative values of the operation disposed of and the portion of the CGU retained, unless another method better reflects the goodwill associated with the operation disposed of.
NOTE F19
Goodwill and business combinations
fAccounting policy
Goodwill
Goodwill arising in a business combination is recognized as an asset at the date that control is obtained (the acquisition date). Goodwill is measured as the excess of the sum of:
(a)the consideration transferred
(b)the amount of any non-controlling interests in the acquiree; and
(c)in a business combination achieved in stages, the acquisition-date fair value of the previously held equity interest in the acquiree, over the share acquired by the Group in the fair value of the entity\u2019s identifiable net assets at the acquisition date.
Goodwill is not amortized but is tested for impairment on an annual basis, and more frequently if there are any impairment triggers identified.
For impairment testing, goodwill is allocated to each of the Group\u2019s cash-generating units (or groups of cash-generating units) in accordance with IAS 36 Impairment of Assets.
A cash-generating unit (CGU) is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other group(s) of assets.
These tests consist of comparing the carrying amount of the assets or (groups of) CGUs with their recoverable amount. The recoverable amount of an asset or a (group of) CGU(s) is the higher of its fair value less costs to sell and its value in use. If the recoverable amount of the CGU is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognized on goodwill shall not be reversed in a subsequent period.
Assets held for sale include their related goodwill.
On disposal of an operation within a CGU to which goodwill has been allocated, the goodwill associated with the operation disposed of is included in the determination of the profit or loss on disposal. It is measured based on the relative values of the operation disposed of and the portion of the CGU retained, unless another method better reflects the goodwill associated with the operation disposed of.
NOTE F19
Goodwill and business combinations
fAccounting policy
Goodwill
Goodwill arising in a business combination is recognized as an asset at the date that control is obtained (the acquisition date). Goodwill is measured as the excess of the sum of:
(a)the consideration transferred
(b)the amount of any non-controlling interests in the acquiree; and
(c)in a business combination achieved in stages, the acquisition-date fair value of the previously held equity interest in the acquiree, over the share acquired by the Group in the fair value of the entity\u2019s identifiable net assets at the acquisition date.
Goodwill is not amortized but is tested for impairment on an annual basis, and more frequently if there are any impairment triggers identified.
For impairment testing, goodwill is allocated to each of the Group\u2019s cash-generating units (or groups of cash-generating units) in accordance with IAS 36 Impairment of Assets.
A cash-generating unit (CGU) is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other group(s) of assets.
These tests consist of comparing the carrying amount of the assets or (groups of) CGUs with their recoverable amount. The recoverable amount of an asset or a (group of) CGU(s) is the higher of its fair value less costs to sell and its value in use. If the recoverable amount of the CGU is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognized on goodwill shall not be reversed in a subsequent period.
Assets held for sale include their related goodwill.
On disposal of an operation within a CGU to which goodwill has been allocated, the goodwill associated with the operation disposed of is included in the determination of the profit or loss on disposal. It is measured based on the relative values of the operation disposed of and the portion of the CGU retained, unless another method better reflects the goodwill associated with the operation disposed of.
| \n In \u20ac million | \n\n Total | \n
|---|---|
| \n December 31, 2022 | \n\n 3,472 | \n
| \n Addition | \n\n 2 | \n
| \n Currency translation differences | \n\n -36 | \n
| \n Disposals | \n\n 0 | \n
| \n Impairment | \n\n -38 | \n
| \n Partial Demerger | \n\n -2,637 | \n
| \n December 31, 2023 | \n\n 764 | \n
| \n Addition | \n\n 18 | \n
| \n Currency translation differences | \n\n 0 | \n
| \n Disposals | \n\n 0 | \n
| \n Impairment | \n\n 0 | \n
| \n December 31, 2024 | \n\n 782 | \n
In 2023, the currency translation differences mainly relate to goodwill expressed in US dollars, located in Specialty Businesses.
See note F23 for more details on impairment testing.
In March 2024, the Group increased its ownership in its equity accounted investment in Shandong Huatai Interox Chemical Co. by 10% from 50% to 60%, for \u20ac4 million. The transaction resulted in Solvay obtaining control over the legal entity. The acquisition was accounted for as a business combination achieved in stages and resulted in a \u20ac10 million gain on derecognizing the equity investment and recognizing \u20ac18 million of goodwill and \u20ac3 million of intangible assets based on the fair value of the entity upon consolidation. The Group finalized the purchase price allocation in December 2024 and recognized no material change.
Goodwill acquired in a business combination is allocated to the CGUs or groups of CGUs that are expected to benefit from that business combination.
| \n In \u20ac million | \n\n 2024 | \n||||
|---|---|---|---|---|---|
| \n At beginning of the period | \n\n Additions | \n\n Impairment | \n\n Currency translation differences | \n\n At the end of the period | \n|
| \n Special Chem | \n\n 275 | \n\n \n | \n\n \n | \n\n -1 | \n\n 275 | \n
| \n Soda Ash & Derivatives | \n\n 237 | \n\n \n | \n\n \n | \n\n \n | \n\n 237 | \n
| \n Coatis | \n\n 82 | \n\n \n | \n\n \n | \n\n \n | \n\n 82 | \n
| \n Silica | \n\n 72 | \n\n \n | \n\n \n | \n\n \n | \n\n 72 | \n
| \n Energy Services | \n\n 0 | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Hydrogen Peroxide Europe | \n\n 37 | \n\n \n | \n\n \n | \n\n \n | \n\n 37 | \n
| \n Hydrogen Peroxide Mercosul | \n\n 27 | \n\n \n | \n\n \n | \n\n \n | \n\n 27 | \n
| \n Hydrogen Peroxide Nafta | \n\n 15 | \n\n \n | \n\n \n | \n\n \n | \n\n 15 | \n
| \n Hydrogen Peroxide Asia | \n\n 19 | \n\n 18 | \n\n \n | \n\n 0 | \n\n 37 | \n
| \n Total goodwill | \n\n 764 | \n\n 18 | \n\n 0 | \n\n 0 | \n\n 782 | \n
| \n In \u20ac million | \n\n 2023 | \n||||||
|---|---|---|---|---|---|---|---|
| \n At beginning of the period | \n\n Additions | \n\n Impairment | \n\n Currency translation differences | \n\n Transfer | \n\n Partial Demerger | \n\n At the end of the period | \n|
| \n Operating segments - Groups of CGUs | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Materials | \n\n 341 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n -341 | \n\n 0 | \n
| \n Chemicals | \n\n 121 | \n\n \n | \n\n \n | \n\n \n | \n\n -121 | \n\n \n | \n\n 0 | \n
| \n Solutions | \n\n 264 | \n\n \n | \n\n \n | \n\n \n | \n\n -65 | \n\n -199 | \n\n 0 | \n
| \n (Groups of) CGUs | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Composite Materials | \n\n 591 | \n\n \n | \n\n \n | \n\n -15 | \n\n \n | \n\n -577 | \n\n 0 | \n
| \n Novecare | \n\n 565 | \n\n 2 | \n\n \n | \n\n -3 | \n\n \n | \n\n -564 | \n\n 0 | \n
| \n Technology Solutions | \n\n 734 | \n\n \n | \n\n \n | \n\n -17 | \n\n \n | \n\n -716 | \n\n 0 | \n
| \n Special Chem | \n\n 210 | \n\n \n | \n\n \n | \n\n 0 | \n\n 65 | \n\n \n | \n\n 275 | \n
| \n Specialty Polymers | \n\n 181 | \n\n \n | \n\n \n | \n\n -1 | \n\n \n | \n\n -180 | \n\n 0 | \n
| \n Soda Ash & Derivatives | \n\n 162 | \n\n \n | \n\n \n | \n\n \n | \n\n 75 | \n\n \n | \n\n 237 | \n
| \n Coatis | \n\n 82 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n 82 | \n
| \n Silica | \n\n 72 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n 72 | \n
| \n Aroma Performance | \n\n 49 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n -49 | \n\n 0 | \n
| \n Energy Services | \n\n 50 | \n\n \n | \n\n -38 | \n\n \n | \n\n \n | \n\n -12 | \n\n 0 | \n
| \n Hydrogen Peroxide Europe | \n\n 21 | \n\n \n | \n\n \n | \n\n \n | \n\n 17 | \n\n \n | \n\n 37 | \n
| \n Hydrogen Peroxide Mercosul | \n\n 14 | \n\n \n | \n\n \n | \n\n \n | \n\n 14 | \n\n \n | \n\n 27 | \n
| \n Hydrogen Peroxide Nafta | \n\n 7 | \n\n \n | \n\n \n | \n\n \n | \n\n 8 | \n\n \n | \n\n 15 | \n
| \n Hydrogen Peroxide Asia | \n\n 11 | \n\n \n | \n\n \n | \n\n 0 | \n\n 8 | \n\n \n | \n\n 19 | \n
| \n Total goodwill | \n\n 3,472 | \n\n 2 | \n\n -38 | \n\n -35 | \n\n 0 | \n\n -2,637 | \n\n 764 | \n
See also note F23 Impairment.
As a result of the Partial Demerger of the Specialty Business, effectuated in December 2023, the Group realigned its Operating Segments as detailed in note F1 Revenue and Segment Information. The realignment resulted in the reallocation of segment level goodwill of \u20ac186 million (see \u20ac121 million + \u20ac65 million in column Transfer in 2023 table) to the CGUs using a relative value approach (respective fair values). The reallocation had no significant impact on the impairment analysis performed.
NOTE F19
Goodwill and business combinations
fAccounting policy
Goodwill
Goodwill arising in a business combination is recognized as an asset at the date that control is obtained (the acquisition date). Goodwill is measured as the excess of the sum of:
(a)the consideration transferred
(b)the amount of any non-controlling interests in the acquiree; and
(c)in a business combination achieved in stages, the acquisition-date fair value of the previously held equity interest in the acquiree, over the share acquired by the Group in the fair value of the entity\u2019s identifiable net assets at the acquisition date.
Goodwill is not amortized but is tested for impairment on an annual basis, and more frequently if there are any impairment triggers identified.
For impairment testing, goodwill is allocated to each of the Group\u2019s cash-generating units (or groups of cash-generating units) in accordance with IAS 36 Impairment of Assets.
A cash-generating unit (CGU) is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other group(s) of assets.
These tests consist of comparing the carrying amount of the assets or (groups of) CGUs with their recoverable amount. The recoverable amount of an asset or a (group of) CGU(s) is the higher of its fair value less costs to sell and its value in use. If the recoverable amount of the CGU is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognized on goodwill shall not be reversed in a subsequent period.
Assets held for sale include their related goodwill.
On disposal of an operation within a CGU to which goodwill has been allocated, the goodwill associated with the operation disposed of is included in the determination of the profit or loss on disposal. It is measured based on the relative values of the operation disposed of and the portion of the CGU retained, unless another method better reflects the goodwill associated with the operation disposed of.
| \n In \u20ac million | \n\n Total | \n
|---|---|
| \n December 31, 2022 | \n\n 3,472 | \n
| \n Addition | \n\n 2 | \n
| \n Currency translation differences | \n\n -36 | \n
| \n Disposals | \n\n 0 | \n
| \n Impairment | \n\n -38 | \n
| \n Partial Demerger | \n\n -2,637 | \n
| \n December 31, 2023 | \n\n 764 | \n
| \n Addition | \n\n 18 | \n
| \n Currency translation differences | \n\n 0 | \n
| \n Disposals | \n\n 0 | \n
| \n Impairment | \n\n 0 | \n
| \n December 31, 2024 | \n\n 782 | \n
In 2023, the currency translation differences mainly relate to goodwill expressed in US dollars, located in Specialty Businesses.
See note F23 for more details on impairment testing.
In March 2024, the Group increased its ownership in its equity accounted investment in Shandong Huatai Interox Chemical Co. by 10% from 50% to 60%, for \u20ac4 million. The transaction resulted in Solvay obtaining control over the legal entity. The acquisition was accounted for as a business combination achieved in stages and resulted in a \u20ac10 million gain on derecognizing the equity investment and recognizing \u20ac18 million of goodwill and \u20ac3 million of intangible assets based on the fair value of the entity upon consolidation. The Group finalized the purchase price allocation in December 2024 and recognized no material change.
Goodwill acquired in a business combination is allocated to the CGUs or groups of CGUs that are expected to benefit from that business combination.
| \n In \u20ac million | \n\n 2024 | \n||||
|---|---|---|---|---|---|
| \n At beginning of the period | \n\n Additions | \n\n Impairment | \n\n Currency translation differences | \n\n At the end of the period | \n|
| \n Special Chem | \n\n 275 | \n\n \n | \n\n \n | \n\n -1 | \n\n 275 | \n
| \n Soda Ash & Derivatives | \n\n 237 | \n\n \n | \n\n \n | \n\n \n | \n\n 237 | \n
| \n Coatis | \n\n 82 | \n\n \n | \n\n \n | \n\n \n | \n\n 82 | \n
| \n Silica | \n\n 72 | \n\n \n | \n\n \n | \n\n \n | \n\n 72 | \n
| \n Energy Services | \n\n 0 | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Hydrogen Peroxide Europe | \n\n 37 | \n\n \n | \n\n \n | \n\n \n | \n\n 37 | \n
| \n Hydrogen Peroxide Mercosul | \n\n 27 | \n\n \n | \n\n \n | \n\n \n | \n\n 27 | \n
| \n Hydrogen Peroxide Nafta | \n\n 15 | \n\n \n | \n\n \n | \n\n \n | \n\n 15 | \n
| \n Hydrogen Peroxide Asia | \n\n 19 | \n\n 18 | \n\n \n | \n\n 0 | \n\n 37 | \n
| \n Total goodwill | \n\n 764 | \n\n 18 | \n\n 0 | \n\n 0 | \n\n 782 | \n
| \n In \u20ac million | \n\n 2023 | \n||||||
|---|---|---|---|---|---|---|---|
| \n At beginning of the period | \n\n Additions | \n\n Impairment | \n\n Currency translation differences | \n\n Transfer | \n\n Partial Demerger | \n\n At the end of the period | \n|
| \n Operating segments - Groups of CGUs | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Materials | \n\n 341 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n -341 | \n\n 0 | \n
| \n Chemicals | \n\n 121 | \n\n \n | \n\n \n | \n\n \n | \n\n -121 | \n\n \n | \n\n 0 | \n
| \n Solutions | \n\n 264 | \n\n \n | \n\n \n | \n\n \n | \n\n -65 | \n\n -199 | \n\n 0 | \n
| \n (Groups of) CGUs | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Composite Materials | \n\n 591 | \n\n \n | \n\n \n | \n\n -15 | \n\n \n | \n\n -577 | \n\n 0 | \n
| \n Novecare | \n\n 565 | \n\n 2 | \n\n \n | \n\n -3 | \n\n \n | \n\n -564 | \n\n 0 | \n
| \n Technology Solutions | \n\n 734 | \n\n \n | \n\n \n | \n\n -17 | \n\n \n | \n\n -716 | \n\n 0 | \n
| \n Special Chem | \n\n 210 | \n\n \n | \n\n \n | \n\n 0 | \n\n 65 | \n\n \n | \n\n 275 | \n
| \n Specialty Polymers | \n\n 181 | \n\n \n | \n\n \n | \n\n -1 | \n\n \n | \n\n -180 | \n\n 0 | \n
| \n Soda Ash & Derivatives | \n\n 162 | \n\n \n | \n\n \n | \n\n \n | \n\n 75 | \n\n \n | \n\n 237 | \n
| \n Coatis | \n\n 82 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n 82 | \n
| \n Silica | \n\n 72 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n 72 | \n
| \n Aroma Performance | \n\n 49 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n -49 | \n\n 0 | \n
| \n Energy Services | \n\n 50 | \n\n \n | \n\n -38 | \n\n \n | \n\n \n | \n\n -12 | \n\n 0 | \n
| \n Hydrogen Peroxide Europe | \n\n 21 | \n\n \n | \n\n \n | \n\n \n | \n\n 17 | \n\n \n | \n\n 37 | \n
| \n Hydrogen Peroxide Mercosul | \n\n 14 | \n\n \n | \n\n \n | \n\n \n | \n\n 14 | \n\n \n | \n\n 27 | \n
| \n Hydrogen Peroxide Nafta | \n\n 7 | \n\n \n | \n\n \n | \n\n \n | \n\n 8 | \n\n \n | \n\n 15 | \n
| \n Hydrogen Peroxide Asia | \n\n 11 | \n\n \n | \n\n \n | \n\n 0 | \n\n 8 | \n\n \n | \n\n 19 | \n
| \n Total goodwill | \n\n 3,472 | \n\n 2 | \n\n -38 | \n\n -35 | \n\n 0 | \n\n -2,637 | \n\n 764 | \n
See also note F23 Impairment.
As a result of the Partial Demerger of the Specialty Business, effectuated in December 2023, the Group realigned its Operating Segments as detailed in note F1 Revenue and Segment Information. The realignment resulted in the reallocation of segment level goodwill of \u20ac186 million (see \u20ac121 million + \u20ac65 million in column Transfer in 2023 table) to the CGUs using a relative value approach (respective fair values). The reallocation had no significant impact on the impairment analysis performed.
NOTE F19
Goodwill and business combinations
fAccounting policy
Goodwill
Goodwill arising in a business combination is recognized as an asset at the date that control is obtained (the acquisition date). Goodwill is measured as the excess of the sum of:
(a)the consideration transferred
(b)the amount of any non-controlling interests in the acquiree; and
(c)in a business combination achieved in stages, the acquisition-date fair value of the previously held equity interest in the acquiree, over the share acquired by the Group in the fair value of the entity\u2019s identifiable net assets at the acquisition date.
Goodwill is not amortized but is tested for impairment on an annual basis, and more frequently if there are any impairment triggers identified.
For impairment testing, goodwill is allocated to each of the Group\u2019s cash-generating units (or groups of cash-generating units) in accordance with IAS 36 Impairment of Assets.
A cash-generating unit (CGU) is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other group(s) of assets.
These tests consist of comparing the carrying amount of the assets or (groups of) CGUs with their recoverable amount. The recoverable amount of an asset or a (group of) CGU(s) is the higher of its fair value less costs to sell and its value in use. If the recoverable amount of the CGU is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognized on goodwill shall not be reversed in a subsequent period.
Assets held for sale include their related goodwill.
On disposal of an operation within a CGU to which goodwill has been allocated, the goodwill associated with the operation disposed of is included in the determination of the profit or loss on disposal. It is measured based on the relative values of the operation disposed of and the portion of the CGU retained, unless another method better reflects the goodwill associated with the operation disposed of.
NOTE F20
Property, plant and equipment
fAccounting policy
General
Property, plant and equipment are tangible items that:
\u2022are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and
\u2022are expected to be used during more than one period.
The items of property, plant and equipment owned by the Group are recognized as property, plant and equipment when the following conditions are satisfied:
\u2022it is probable that the future economic benefits associated with the asset will flow to the Group;
\u2022the cost of the asset can be measured reliably.
Items of property, plant and equipment are initially measured at cost. The cost of an item of property, plant and equipment comprises its purchase price and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. If applicable, the cost comprises borrowing costs during the construction period.
After initial recognition, items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses, if any.
Items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives. The components of an item of property, plant and equipment with different useful lives are depreciated separately. Land is not depreciated. The estimated useful lives, residual values and depreciation methods are reviewed at each year end, also considering the potential impact of climate change including the execution of the Solvay's sustainability strategy (see Note on Climate Change Considerations in the IFRS general accounting policies). Any changes in estimates are accounted for prospectively.
| \n Within Land and buildings group | \n\n \n | \n\n \n | \n
|---|---|---|
| \n Buildings | \n\n 30-40 | \n\n years | \n
| \n Within Fixtures and equipment group | \n\n \n | \n\n \n | \n
| \n IT equipment | \n\n 3-5 | \n\n years | \n
| \n Machinery and equipment | \n\n 10-20 | \n\n years | \n
| \n Transportation equipment | \n\n 5-20 | \n\n years | \n
Depreciation expense is included in the consolidated income statement within cost of goods sold, administrative costs, and R&D costs.
The asset is tested for impairment if there is a trigger for impairment (see note F23 Impairment).
Items of property, plant and equipment are derecognized from the consolidated statement of financial position on disposal or when no future economic benefits are expected from their use or disposal. The gain or loss which arises from derecognition of an item of property, plant and equipment is recognized in profit or loss at the moment of derecognition.
Subsequent expenditure
Subsequent expenditure related to items of property, plant and equipment is capitalized only if it is probable that it will increase the future economic benefits associated with the specific asset. Other expenditure is expensed as incurred. Subsequent expenditure incurred for the replacement of a component of an item of property, plant and equipment is only recognized as an asset when it satisfies the recognition criteria mentioned above. The carrying amount of replaced items is derecognized.
Repair and maintenance costs are recognized in the consolidated income statement as incurred.
Regarding its industrial activity, Solvay incurs expenditure for major repairs over several years for most of its sites. The purpose of this expenditure is to maintain the proper working order of certain installations without altering their useful life. This expenditure is considered as a specific component of the item of property, plant and equipment and is depreciated over the period during which the economic benefits are expected to be obtained, i.e. the major repairs\u2019 intervals.
Dismantling and restoration costs
Dismantling and restoration costs are included in the cost of an item of property, plant and equipment if the Group has a legal or constructive obligation to dismantle or restore. They are depreciated over the useful life of the items to which they pertain.
Generally, Solvay\u2019s obligation to dismantle and/or restore its operating sites is only likely to arise upon the discontinuation of a site\u2019s activities. A provision for dismantling of discontinued sites or installations is recognized when there is a legal obligation (due to a request or injunction from the relevant authorities), or when there is no technical alternative than to dismantle, to ensure the safety compliance of the discontinued sites or installations.
In the table below, additions and depreciation expenses include the items of Specialty Businesses until the Partial Demerger.
| \n In \u20ac million | \n\n Land and buildings | \n\n Fixtures and equipment | \n\n Other tangible assets | \n\n Property, plant and equipment under construction | \n\n Total | \n
|---|---|---|---|---|---|
| \n Gross carrying amount | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n 3,021 | \n\n 10,648 | \n\n 425 | \n\n 1,033 | \n\n 15,128 | \n
| \n Additions | \n\n 77 | \n\n 136 | \n\n 7 | \n\n 777 | \n\n 998 | \n
| \n Disposals and closures | \n\n -23 | \n\n -216 | \n\n -17 | \n\n -3 | \n\n -258 | \n
| \n Increase through business combinations | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 0 | \n\n 1 | \n
| \n Currency translation differences | \n\n -35 | \n\n -126 | \n\n -4 | \n\n -16 | \n\n -181 | \n
| \n Partial Demerger | \n\n -1,516 | \n\n -5,458 | \n\n -186 | \n\n -955 | \n\n -8,115 | \n
| \n Other | \n\n 68 | \n\n 393 | \n\n 20 | \n\n -354 | \n\n 128 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n December 31, 2023 | \n\n 1,593 | \n\n 5,379 | \n\n 246 | \n\n 483 | \n\n 7,700 | \n
| \n Additions | \n\n 8 | \n\n 39 | \n\n 4 | \n\n 201 | \n\n 252 | \n
| \n Disposals and closures | \n\n -6 | \n\n -87 | \n\n -5 | \n\n 0 | \n\n -99 | \n
| \n Increase through business combinations | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Currency translation differences | \n\n 3 | \n\n 24 | \n\n -1 | \n\n 12 | \n\n 39 | \n
| \n Other | \n\n 42 | \n\n 136 | \n\n 15 | \n\n -160 | \n\n 33 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n December 31, 2024 | \n\n 1,640 | \n\n 5,491 | \n\n 260 | \n\n 536 | \n\n 7,925 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Accumulated depreciation | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n -1,648 | \n\n -7,818 | \n\n -351 | \n\n 0 | \n\n -9,816 | \n
| \n Depreciation | \n\n -76 | \n\n -459 | \n\n -22 | \n\n \n | \n\n -557 | \n
| \n Impairment | \n\n -11 | \n\n -44 | \n\n -2 | \n\n \n | \n\n -57 | \n
| \n Reversal of impairment | \n\n 0 | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n
| \n Disposals and closures | \n\n 18 | \n\n 214 | \n\n 16 | \n\n \n | \n\n 249 | \n
| \n Currency translation differences | \n\n 16 | \n\n 87 | \n\n 3 | \n\n \n | \n\n 105 | \n
| \n Partial Demerger | \n\n 694 | \n\n 3,788 | \n\n 153 | \n\n \n | \n\n 4,634 | \n
| \n Other | \n\n -19 | \n\n -90 | \n\n -5 | \n\n \n | \n\n -114 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n
| \n December 31, 2023 | \n\n -1,027 | \n\n -4,323 | \n\n -206 | \n\n 0 | \n\n -5,556 | \n
| \n Depreciation | \n\n -35 | \n\n -178 | \n\n -13 | \n\n \n | \n\n -226 | \n
| \n Impairment | \n\n -6 | \n\n -36 | \n\n 0 | \n\n \n | \n\n -42 | \n
| \n Reversal of impairment | \n\n 0 | \n\n 1 | \n\n 0 | \n\n \n | \n\n 1 | \n
| \n Disposals and closures | \n\n 6 | \n\n 86 | \n\n 5 | \n\n \n | \n\n 97 | \n
| \n Currency translation differences | \n\n -2 | \n\n -20 | \n\n 1 | \n\n \n | \n\n -21 | \n
| \n Other | \n\n -3 | \n\n -27 | \n\n 0 | \n\n \n | \n\n -29 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n\n 0 | \n\n \n | \n\n 0 | \n
| \n December 31, 2024 | \n\n -1,066 | \n\n -4,496 | \n\n -213 | \n\n 0 | \n\n -5,776 | \n
| \n Net carrying amount | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n December 31, 2022 | \n\n 1,373 | \n\n 2,830 | \n\n 75 | \n\n 1,033 | \n\n 5,311 | \n
| \n December 31, 2023 | \n\n 566 | \n\n 1,056 | \n\n 39 | \n\n 483 | \n\n 2,145 | \n
| \n December 31, 2024 | \n\n 574 | \n\n 995 | \n\n 46 | \n\n 536 | \n\n 2,150 | \n
In 2024 and 2023, no borrowing costs were capitalized.
Please see Note F1 for the split of the capital expenditure by segments.
The line \u201cOther\u201d mainly includes changes following portfolio transactions and reclassification of property, plant and equipment under construction to the appropriate categories when they are ready for intended use.
The 2023 additions and depreciation figures include the amounts related to the Specialty Businesses until the Partial Demerger on December 8, 2023.
NOTE F20
Property, plant and equipment
fAccounting policy
General
Property, plant and equipment are tangible items that:
\u2022are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and
\u2022are expected to be used during more than one period.
The items of property, plant and equipment owned by the Group are recognized as property, plant and equipment when the following conditions are satisfied:
\u2022it is probable that the future economic benefits associated with the asset will flow to the Group;
\u2022the cost of the asset can be measured reliably.
Items of property, plant and equipment are initially measured at cost. The cost of an item of property, plant and equipment comprises its purchase price and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. If applicable, the cost comprises borrowing costs during the construction period.
After initial recognition, items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses, if any.
Items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives. The components of an item of property, plant and equipment with different useful lives are depreciated separately. Land is not depreciated. The estimated useful lives, residual values and depreciation methods are reviewed at each year end, also considering the potential impact of climate change including the execution of the Solvay's sustainability strategy (see Note on Climate Change Considerations in the IFRS general accounting policies). Any changes in estimates are accounted for prospectively.
| \n Within Land and buildings group | \n\n \n | \n\n \n | \n
|---|---|---|
| \n Buildings | \n\n 30-40 | \n\n years | \n
| \n Within Fixtures and equipment group | \n\n \n | \n\n \n | \n
| \n IT equipment | \n\n 3-5 | \n\n years | \n
| \n Machinery and equipment | \n\n 10-20 | \n\n years | \n
| \n Transportation equipment | \n\n 5-20 | \n\n years | \n
Depreciation expense is included in the consolidated income statement within cost of goods sold, administrative costs, and R&D costs.
The asset is tested for impairment if there is a trigger for impairment (see note F23 Impairment).
Items of property, plant and equipment are derecognized from the consolidated statement of financial position on disposal or when no future economic benefits are expected from their use or disposal. The gain or loss which arises from derecognition of an item of property, plant and equipment is recognized in profit or loss at the moment of derecognition.
Subsequent expenditure
Subsequent expenditure related to items of property, plant and equipment is capitalized only if it is probable that it will increase the future economic benefits associated with the specific asset. Other expenditure is expensed as incurred. Subsequent expenditure incurred for the replacement of a component of an item of property, plant and equipment is only recognized as an asset when it satisfies the recognition criteria mentioned above. The carrying amount of replaced items is derecognized.
Repair and maintenance costs are recognized in the consolidated income statement as incurred.
Regarding its industrial activity, Solvay incurs expenditure for major repairs over several years for most of its sites. The purpose of this expenditure is to maintain the proper working order of certain installations without altering their useful life. This expenditure is considered as a specific component of the item of property, plant and equipment and is depreciated over the period during which the economic benefits are expected to be obtained, i.e. the major repairs\u2019 intervals.
Dismantling and restoration costs
Dismantling and restoration costs are included in the cost of an item of property, plant and equipment if the Group has a legal or constructive obligation to dismantle or restore. They are depreciated over the useful life of the items to which they pertain.
Generally, Solvay\u2019s obligation to dismantle and/or restore its operating sites is only likely to arise upon the discontinuation of a site\u2019s activities. A provision for dismantling of discontinued sites or installations is recognized when there is a legal obligation (due to a request or injunction from the relevant authorities), or when there is no technical alternative than to dismantle, to ensure the safety compliance of the discontinued sites or installations.
NOTE F22
Investments in associates and\u00a0joint ventures
The list of associates and joint ventures is available in the note F40 List of companies included in the consolidation scope.
The associates and joint ventures not classified as held for sale/discontinued operations are accounted for under the equity method of accounting.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|---|
| \n Associates | \n\n Joint ventures | \n\n Total | \n\n Associates | \n\n Joint ventures | \n\n Total | \n|
| \n Investments in associates and joint ventures | \n\n 47 | \n\n 169 | \n\n 216 | \n\n 42 | \n\n 188 | \n\n 230 | \n
| \n Earnings from associates and joint ventures | \n\n 4 | \n\n 35 | \n\n 38 | \n\n 3 | \n\n 50 | \n\n 53 | \n
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n January 1 | \n\n 42 | \n\n 18 | \n
| \n Profit for the year | \n\n 4 | \n\n 4 | \n
| \n Dividends received | \n\n -1 | \n\n -1 | \n
| \n Currency translation differences | \n\n 3 | \n\n 0 | \n
| \n Partial Demerger | \n\n 0 | \n\n 20 | \n
| \n December 31 | \n\n 47 | \n\n 42 | \n
In 2023, the figures contain the amounts related to Specialty Businesses until December 8.
The amount in Partial Demerger results mainly from loss of control due to partial demerger and the change of the consolidation scope from full consolidation to equity accounting.
The tables below present the summarized financial information of all the associates and the summarized financial information of the major associates. The associates had no contingent liabilities or capital commitments as at December 31, 2024 and 2023.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|---|
| \n Total | \n\n Of which Quingdao Hiwin Solvay Chemicals | \n\n Of which Solvay (Zhenjiang) Chemicals | \n\n Total | \n\n Of which Quingdao Hiwin Solvay Chemicals | \n\n Of which Solvay (Zhenjiang) Chemicals | \n|
| \n Ownership interest | \n\n \n | \n\n 30% | \n\n 9% | \n\n \n | \n\n 30% | \n\n 9% | \n
| \n Operating Segment | \n\n \n | \n\n Performance Chemicals | \n\n Basic Chemicals | \n\n \n | \n\n Performance Chemicals | \n\n Basic Chemicals | \n
| \n Statement of financial position | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current assets | \n\n 169 | \n\n 22 | \n\n 137 | \n\n 163 | \n\n 24 | \n\n 130 | \n
| \n Current assets | \n\n 242 | \n\n 22 | \n\n 211 | \n\n 231 | \n\n 20 | \n\n 202 | \n
| \n Cash and cash equivalents | \n\n 9 | \n\n 7 | \n\n 1 | \n\n 139 | \n\n 4 | \n\n 135 | \n
| \n Non-current liabilities | \n\n 4 | \n\n 1 | \n\n 1 | \n\n 4 | \n\n 2 | \n\n 1 | \n
| \n Non-current financial debt | \n\n 2 | \n\n 0 | \n\n 1 | \n\n 2 | \n\n 0 | \n\n 0 | \n
| \n Current liabilities | \n\n 89 | \n\n 16 | \n\n 68 | \n\n 86 | \n\n 20 | \n\n 61 | \n
| \n Current financial debt | \n\n 4 | \n\n 4 | \n\n 1 | \n\n 4 | \n\n 4 | \n\n 0 | \n
| \n Net asset | \n\n 319 | \n\n 27 | \n\n 279 | \n\n 304 | \n\n 23 | \n\n 270 | \n
| \n Carrying Amount of the interest in the Associate | \n\n 47 | \n\n 8 | \n\n 26 | \n\n 42 | \n\n 7 | \n\n 25 | \n
| \n Income statement | \n\n 2024 | \n\n 2023 | \n||||
|---|---|---|---|---|---|---|
| \n Sales | \n\n 340 | \n\n 52 | \n\n 276 | \n\n 69 | \n\n 54 | \n\n \n | \n
| \n Depreciation and amortization | \n\n 3 | \n\n 3 | \n\n 0 | \n\n 3 | \n\n 3 | \n\n \n | \n
| \n Interest on loans and short term deposits | \n\n 1 | \n\n 0 | \n\n 0 | \n\n 2 | \n\n 0 | \n\n \n | \n
| \n Profit for the year from continuing operations | \n\n 29 | \n\n 3 | \n\n 25 | \n\n 3 | \n\n 1 | \n\n \n | \n
| \n Profit for the year | \n\n 29 | \n\n 3 | \n\n 25 | \n\n 3 | \n\n 1 | \n\n \n | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Total comprehensive income | \n\n 29 | \n\n 3 | \n\n 25 | \n\n 4 | \n\n 1 | \n\n \n | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends received | \n\n 1 | \n\n 0 | \n\n 1 | \n\n 1 | \n\n 0 | \n\n \n | \n
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n January 1 | \n\n 188 | \n\n 790 | \n
| \n Additions | \n\n 0 | \n\n 0 | \n
| \n Capital increase / (decrease) | \n\n 0 | \n\n -3 | \n
| \n Profit for the year | \n\n 35 | \n\n 67 | \n
| \n Dividends received | \n\n -20 | \n\n -24 | \n
| \n Currency translation differences | \n\n -13 | \n\n -13 | \n
| \n Impairment reversal | \n\n \n | \n\n 0 | \n
| \n Other | \n\n -21 | \n\n -3 | \n
| \n Sale of RusVinyl | \n\n \n | \n\n -428 | \n
| \n Partial Demerger | \n\n \n | \n\n -197 | \n
| \n December 31 | \n\n 169 | \n\n 188 | \n
In 2023, the figures contain the amounts related to Specialty Businesses until December 8.
The amount in Partial Demerger mainly consists of demerged Strata Solvay Advanced Materials and Hindustan Gum & Chemicals.
The tables below present the summarized financial information of the material joint ventures. The joint ventures had no contingent liabilities or capital commitments as at December 31, 2024 and 2023.
| \n December 31, 2024 | \n\n Peroxidos do Brasil Ltda | \n\n Aqua Pharma Group | \n\n Shinsol Advanced Chemicals | \n
|---|---|---|---|
| \n In \u20ac million | \n\n \n | \n\n \n | \n\n \n | \n
| \n Ownership interest | \n\n 69.40% | \n\n 50% | \n\n 51.0% | \n
| \n Operating Segment | \n\n Basic Chemicals | \n\n Basic Chemicals | \n\n Basic Chemicals | \n
| \n Statement of financial position | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current assets | \n\n 125 | \n\n 20 | \n\n 24 | \n
| \n Current assets | \n\n 152 | \n\n 30 | \n\n 3 | \n
| \n Cash and cash equivalents | \n\n 95 | \n\n 17 | \n\n 1 | \n
| \n Non-current liabilities | \n\n 8 | \n\n 2 | \n\n 6 | \n
| \n Non-current financial debt | \n\n 1 | \n\n 0 | \n\n 6 | \n
| \n Current liabilities | \n\n 69 | \n\n 6 | \n\n 2 | \n
| \n Current financial debt | \n\n 11 | \n\n 0 | \n\n 0 | \n
| \n Net asset | \n\n 199 | \n\n 42 | \n\n 20 | \n
| \n Carrying Amount of the interest in the Joint Venture | \n\n 138 | \n\n 21 | \n\n 10 | \n
| \n 2024 income statement | \n\n \n | \n\n \n | \n\n \n | \n
|---|---|---|---|
| \n Sales | \n\n 176 | \n\n 51 | \n\n 0 | \n
| \n Depreciation and amortization | \n\n -7 | \n\n -4 | \n\n 0 | \n
| \n Cost of borrowings | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Interest on loans and short-term deposits | \n\n 9 | \n\n 0 | \n\n 0 | \n
| \n Income taxes | \n\n -24 | \n\n -2 | \n\n 0 | \n
| \n Profit for the year from continuing operations | \n\n 49 | \n\n 6 | \n\n -6 | \n
| \n Profit for the year | \n\n 49 | \n\n 6 | \n\n -6 | \n
| \n Other comprehensive income | \n\n -12 | \n\n 5 | \n\n 0 | \n
| \n Total comprehensive income | \n\n 38 | \n\n 11 | \n\n -6 | \n
| \n Dividends received | \n\n 20 | \n\n 0 | \n\n 0 | \n
Other comprehensive income mainly comprises the currency translation differences.
| \n December 31, 2023 In \u20ac million | \n\n Peroxidos do Brasil Ltda | \n\n Shandong Huatai Interox Chemical Co. Ltd | \n\n Aqua Pharma Group | \n\n Shinsol Advanced Chemicals | \n
|---|---|---|---|---|
| \n Ownership interest | \n\n 69.40% | \n\n 50% | \n\n 50% | \n\n 51.0% | \n
| \n Operating Segment | \n\n Basic Chemicals | \n\n Basic Chemicals | \n\n Basic Chemicals | \n\n Performance Chemicals | \n
| \n Statement of financial position | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current assets | \n\n 121 | \n\n 7 | \n\n 24 | \n\n 22 | \n
| \n Current assets | \n\n 144 | \n\n 28 | \n\n 20 | \n\n 6 | \n
| \n Cash and cash equivalents | \n\n 84 | \n\n 22 | \n\n 9 | \n\n 6 | \n
| \n Non-current liabilities | \n\n 8 | \n\n - | \n\n 2 | \n\n 4 | \n
| \n Non-current financial debt | \n\n 1 | \n\n 0 | \n\n 0 | \n\n 4 | \n
| \n Current liabilities | \n\n 50 | \n\n 10 | \n\n 5 | \n\n 2 | \n
| \n Current financial debt | \n\n 6 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Net asset | \n\n 206 | \n\n 25 | \n\n 38 | \n\n 23 | \n
| \n Carrying Amount of the interest in the Joint Venture | \n\n 143 | \n\n 12 | \n\n 19 | \n\n 12 | \n
| \n 2023 income statement | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
|---|---|---|---|---|
| \n Sales | \n\n 195 | \n\n 40 | \n\n 32 | \n\n 0 | \n
| \n Depreciation and amortization | \n\n -7 | \n\n -1 | \n\n -3 | \n\n 0 | \n
| \n Cost of borrowings | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Interest on loans and short-term deposits | \n\n 8 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Income taxes | \n\n -23 | \n\n -3 | \n\n -2 | \n\n 0 | \n
| \n Profit for the year from continuing operations | \n\n 56 | \n\n 8 | \n\n -2 | \n\n -2 | \n
| \n Profit for the year | \n\n 56 | \n\n 8 | \n\n -2 | \n\n -2 | \n
| \n Other comprehensive income | \n\n 4 | \n\n 0 | \n\n -3 | \n\n 0 | \n
| \n Total comprehensive income | \n\n 61 | \n\n 8 | \n\n -5 | \n\n -2 | \n
| \n Dividends received | \n\n 18 | \n\n 2 | \n\n 0 | \n\n 0 | \n
Other comprehensive income mainly comprises the currency translation differences.
Peroxidos do Brasil and Solvay Brasil settled the antitrust cases with CADE (the Brazilian antitrust authority). The corresponding amounts and the legal fees were reflected in and adjusted the existing provisions, with a joint effect of \u20ac 3.6 million in the 2024 consolidated profit or loss.
Note F40
List of companies included in\u00a0the\u00a0consolidation scope
The Group consists of Solvay SA/NV and a total of 145 investees.
Of these 145 investees, 71 are fully consolidated, 7 are proportionately consolidated and 20 are accounted for under the equity method, while the other 47 are not material to the Group and therefore are not in the consolidation scope.
These Other Investments, which are insignificant are measured at cost and tested for impairment on an annual basis, which is considered a good proxy of their fair value. For more information, refer to Principles of consolidation.
| \n Country | \n\n Company | \n\n Comments | \n
|---|---|---|
| \n CHILE | \n\n Rhodia Chile Ltda, Santiago | \n\n Meets the consolidation criteria | \n
| \n Country | \n\n Company | \n\n Comments | \n
|---|---|---|
| \n FRANCE | \n\n Solvay Energy Services S.A.S., Puteaux | \n\n Merged into Rhodia Operations S.A.S. | \n
| \n GERMANY | \n\n Solvay Chemicals GmbH, Hannover | \n\n Merged into Solvay GmbH | \n
| \n Solvin GmbH & Co. KG - PVDC, Rheinberg | \n\n Merged into Solvay GmbH | \n|
| \n Solvay Flux GmbH, Hannover | \n\n Merged into Solvay GmbH | \n|
| \n Solvay Fluor GmbH, Hannover | \n\n Merged into Solvay GmbH | \n|
| \n Solvin Holding GmbH, Hannover | \n\n Merged into Solvay GmbH | \n|
| \n NETHERLANDS | \n\n Rhodia International Holdings B.V., Den Haag | \n\n Merged into Solvay Chemicals and Plastics Holding B.V. | \n
| \n Country | \n\n Company | \n\n Comments | \n
|---|---|---|
| \n CHINA | \n\n Shandong Huatai Interox Chemical Co. Ltd, Dongying | \n\n Change from equity method to full consolidation due to the\u00a0purchase of additional 10% of Dongying Huatai Chemicals Group's\u00a0shares | \n
Indicating the percentage holding.
| \n AUSTRALIA | \n\n \n | \n
|---|---|
| \n Aqua Pharma Australia Pty Ltd, Armidale | \n\n 50 | \n
| \n Aquatiq Prawns Ltd, Launceston | \n\n 50 | \n
| \n BELGIUM | \n\n \n | \n
| \n Aqua Pharma Belgium Srl, Herent | \n\n 50 | \n
| \n BRAZIL | \n\n \n | \n
| \n Peroxidos do Brasil Ltda, Sao Paulo | \n\n 69.4 | \n
| \n CANADA | \n\n \n | \n
| \n Aqua Pharma Inc, Saint John | \n\n 50 | \n
| \n CHILE | \n\n \n | \n
| \n Aqua Pharma Chile Spa, Puerto Montt | \n\n 50 | \n
| \n ECUADOR | \n\n \n | \n
| \n Aqua Pharma Ecuador S.A, Guayas | \n\n 50 | \n
| \n INDONESIA | \n\n \n | \n
| \n PT Aqua Pharma Indonesia Ltd, Jakarta | \n\n 50 | \n
| \n NORWAY | \n\n \n | \n
| \n Aqua Pharma Group A.S., Lillehammer | \n\n 50 | \n
| \n Aqua Pharma A.S., Lillehammer | \n\n 50 | \n
| \n Haugaland Shipping A.S., Haugesund | \n\n 50 | \n
| \n TAIWAN | \n\n \n | \n
| \n Shinsol Advanced Chemicals Corporation, New Taipei | \n\n 51 | \n
| \n UNITED KINGDOM | \n\n \n | \n
| \n Aqua Pharma Technical Ltd, Inverness | \n\n 50 | \n
| \n Aqua Pharma Ltd, Inverness | \n\n 50 | \n
| \n Pulcea Ltd, Edinburgh | \n\n 25 | \n
| \n UNITED STATES | \n\n \n | \n
| \n Aqua Pharma U.S. Inc, Kirkland | \n\n 50 | \n
| \n CHINA | \n\n \n | \n
|---|---|
| \n Qingdao Hiwin Solvay Chemicals Co. Ltd, Qingdao | \n\n 30 | \n
| \n Solvay (Zhenjiang) Chemicals Co., Ltd, Zhenjiang New area | \n\n 9.35 | \n
| \n FRANCE | \n\n \n | \n
| \n GIE Chime Salindres, Salindres | \n\n 50 | \n
| \n MEXICO | \n\n \n | \n
| \n Silicatos y Derivados S.A. DE C.V., Estado de Mexico | \n\n 20 | \n
NOTE F24
Inventories
fAccounting policy
Cost of inventories includes the purchase, conversion and other costs incurred in bringing the inventories to their present location and condition. The cost of inventories is generally determined by using the weighted average cost method except for CO2 emission rights (see below).
Inventories are measured at the lower of purchasing cost (raw materials and merchandise) or production cost (work in progress and finished goods) and net realizable value. Net realizable value represents the estimated selling price, less all estimated costs of completion and the estimated costs necessary to make the sale.
CO2 emission rights
With respect to the mechanism set up by the European Union to encourage manufacturers to reduce their greenhouse gas emissions, carbon dioxide (CO2) emission rights are granted to the Group for free.
In the absence of any IFRS regulating the accounting treatment of CO2 emission rights, the Group applies the Trade/Production model, according to which CO2 emission rights are presented as inventories if they will be consumed in the production process within the next 12 months or in \u201cLoans and other assets\u201d for beyond 12 months. EUA inventory is carried at weighted average cost formula.
The result of hedging activities is recognized in OCI, while the recycling results in \u201cother operating gains and losses\u201d.
Considering its centralized CO2 emission rights\u2019 portfolio management, for emission rights that are substitutable between subsidiaries, the Group\u2019s financial statements reflect the Group\u2019s net position. If this net position is negative, a provision is recognized, measured based on the expected cost of redeemed EUA certificates.
Energy savings certificates (ESCs)
Energy savings certificates are presented as inventory items in finished goods. They are measured at weighted average cost. As their cost is not separately identifiable, and as they are a by-product, they are measured at their net realizable value upon initial recognition.
NOTE F24
Inventories
fAccounting policy
Cost of inventories includes the purchase, conversion and other costs incurred in bringing the inventories to their present location and condition. The cost of inventories is generally determined by using the weighted average cost method except for CO2 emission rights (see below).
Inventories are measured at the lower of purchasing cost (raw materials and merchandise) or production cost (work in progress and finished goods) and net realizable value. Net realizable value represents the estimated selling price, less all estimated costs of completion and the estimated costs necessary to make the sale.
CO2 emission rights
With respect to the mechanism set up by the European Union to encourage manufacturers to reduce their greenhouse gas emissions, carbon dioxide (CO2) emission rights are granted to the Group for free.
In the absence of any IFRS regulating the accounting treatment of CO2 emission rights, the Group applies the Trade/Production model, according to which CO2 emission rights are presented as inventories if they will be consumed in the production process within the next 12 months or in \u201cLoans and other assets\u201d for beyond 12 months. EUA inventory is carried at weighted average cost formula.
The result of hedging activities is recognized in OCI, while the recycling results in \u201cother operating gains and losses\u201d.
Considering its centralized CO2 emission rights\u2019 portfolio management, for emission rights that are substitutable between subsidiaries, the Group\u2019s financial statements reflect the Group\u2019s net position. If this net position is negative, a provision is recognized, measured based on the expected cost of redeemed EUA certificates.
Energy savings certificates (ESCs)
Energy savings certificates are presented as inventory items in finished goods. They are measured at weighted average cost. As their cost is not separately identifiable, and as they are a by-product, they are measured at their net realizable value upon initial recognition.
NOTE F24
Inventories
fAccounting policy
Cost of inventories includes the purchase, conversion and other costs incurred in bringing the inventories to their present location and condition. The cost of inventories is generally determined by using the weighted average cost method except for CO2 emission rights (see below).
Inventories are measured at the lower of purchasing cost (raw materials and merchandise) or production cost (work in progress and finished goods) and net realizable value. Net realizable value represents the estimated selling price, less all estimated costs of completion and the estimated costs necessary to make the sale.
CO2 emission rights
With respect to the mechanism set up by the European Union to encourage manufacturers to reduce their greenhouse gas emissions, carbon dioxide (CO2) emission rights are granted to the Group for free.
In the absence of any IFRS regulating the accounting treatment of CO2 emission rights, the Group applies the Trade/Production model, according to which CO2 emission rights are presented as inventories if they will be consumed in the production process within the next 12 months or in \u201cLoans and other assets\u201d for beyond 12 months. EUA inventory is carried at weighted average cost formula.
The result of hedging activities is recognized in OCI, while the recycling results in \u201cother operating gains and losses\u201d.
Considering its centralized CO2 emission rights\u2019 portfolio management, for emission rights that are substitutable between subsidiaries, the Group\u2019s financial statements reflect the Group\u2019s net position. If this net position is negative, a provision is recognized, measured based on the expected cost of redeemed EUA certificates.
Energy savings certificates (ESCs)
Energy savings certificates are presented as inventory items in finished goods. They are measured at weighted average cost. As their cost is not separately identifiable, and as they are a by-product, they are measured at their net realizable value upon initial recognition.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Finished goods | \n\n 343 | \n\n 373 | \n
| \n Raw materials and supplies | \n\n 305 | \n\n 296 | \n
| \n Work in progress | \n\n 6 | \n\n 4 | \n
| \n Total | \n\n 655 | \n\n 673 | \n
| \n Write-downs | \n\n -32 | \n\n -31 | \n
| \n Net total | \n\n 623 | \n\n 642 | \n
The CO2 emission rights amount to \u20ac38 million at the end of 2024 (at the end of 2023 \u20ac49 million) \u2013 this includes \u20ac14 million related to 2024 obligations (in 2023 this was \u20ac12 million) and is included in inventory, and \u20ac24 million related to obligations after 2024 (\u20ac38 million in 2023) which is included in Loans and other assets.
The cost of inventory is disclosed in Note F2 Consolidated income statement by nature \u2013 in line Raw materials, utilities, consumables used.
Inventory write-downs are included in cost-of-goods-sold in the consolidated income statement.
See Note F32 Financial instruments for further details on CO2 hedging.
NOTE F25
Other receivables (current)
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n VAT and other taxes | \n\n 192 | \n\n 202 | \n
| \n Advances to suppliers | \n\n 32 | \n\n 37 | \n
| \n Financial instruments - operational | \n\n 67 | \n\n 56 | \n
| \n Insurance premiums | \n\n 23 | \n\n 36 | \n
| \n Loan receivables | \n\n 3 | \n\n 5 | \n
| \n Other | \n\n 80 | \n\n 127 | \n
| \n Other current receivables | \n\n 396 | \n\n 462 | \n
In 2023, the row Other contains a pending insurance reimbursement of \u20ac32 million (see also Note F34 Other liabilities) and Fluor quotas of \u20ac16 million, which both have been settled in 2024 with Syensqo.
Financial instruments \u2013 operational includes held for trading and cash flow hedge derivatives (see note F32.A. Overview of financial instruments).
NOTE F25
Other receivables (current)
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n VAT and other taxes | \n\n 192 | \n\n 202 | \n
| \n Advances to suppliers | \n\n 32 | \n\n 37 | \n
| \n Financial instruments - operational | \n\n 67 | \n\n 56 | \n
| \n Insurance premiums | \n\n 23 | \n\n 36 | \n
| \n Loan receivables | \n\n 3 | \n\n 5 | \n
| \n Other | \n\n 80 | \n\n 127 | \n
| \n Other current receivables | \n\n 396 | \n\n 462 | \n
In 2023, the row Other contains a pending insurance reimbursement of \u20ac32 million (see also Note F34 Other liabilities) and Fluor quotas of \u20ac16 million, which both have been settled in 2024 with Syensqo.
Financial instruments \u2013 operational includes held for trading and cash flow hedge derivatives (see note F32.A. Overview of financial instruments).
Held for trading
The transactional risk is managed either by spot or forward contracts. Unless documented as hedging instruments (see above), derivative financial instruments are classified as held for trading.
In 2024, the notional amounts transacted to manage the transactional risk are:
ha long position of \u20ac368 million (compared to \u20ac271 million in 2023);
ha short position of \u20ac(239) million (compared to \u20ac(284) million in 2023);
hin comparison to 2023, the optimization of the cash centralization model led to a net long position increase of \u20ac142 million (mainly Chinese Yuan and US Dollar).
The following table details the notional amounts of the Group\u2019s derivatives contracts outstanding at the end of the period:
| \n In \u20ac million | \n\n Notional amount(1) | \n\n Fair value assets | \n\n Fair value liabilities | \n|||
|---|---|---|---|---|---|---|
| \n December 31 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n
| \n Held for trading long position | \n\n 368 | \n\n 271 | \n\n 1 | \n\n 1 | \n\n -1 | \n\n -1 | \n
| \n Held for trading short position | \n\n -239 | \n\n -284 | \n\n 1 | \n\n 2 | \n\n -3 | \n\n 0 | \n
| \n Total | \n\n 129 | \n\n -13 | \n\n 2 | \n\n 3 | \n\n -4 | \n\n -1 | \n
(1)Long/(short) positions (if the foreign exchange transaction does not involve the functional currency, both notional amounts are considered).
NOTE F25
Other receivables (current)
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n VAT and other taxes | \n\n 192 | \n\n 202 | \n
| \n Advances to suppliers | \n\n 32 | \n\n 37 | \n
| \n Financial instruments - operational | \n\n 67 | \n\n 56 | \n
| \n Insurance premiums | \n\n 23 | \n\n 36 | \n
| \n Loan receivables | \n\n 3 | \n\n 5 | \n
| \n Other | \n\n 80 | \n\n 127 | \n
| \n Other current receivables | \n\n 396 | \n\n 462 | \n
In 2023, the row Other contains a pending insurance reimbursement of \u20ac32 million (see also Note F34 Other liabilities) and Fluor quotas of \u20ac16 million, which both have been settled in 2024 with Syensqo.
Financial instruments \u2013 operational includes held for trading and cash flow hedge derivatives (see note F32.A. Overview of financial instruments).
The following table gives an overview of the carrying amount of all financial instruments by category as defined by IFRS 9.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Carrying amount | \n\n Carrying amount | \n|
| \n Fair value through profit or loss | \n\n 59 | \n\n 105 | \n
| \n Held for trading (financial instruments - operational - see note F26) | \n\n 2 | \n\n 16 | \n
| \n Held for trading (other financial instruments - see note F33, table Changes in financial debt) | \n\n 1 | \n\n 2 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n 55 | \n\n 87 | \n
| \n Financial assets measured at amortized cost | \n\n 1,497 | \n\n 1,677 | \n
| \n Financial assets measured at amortized cost (including cash and cash equivalents, trade receivables, loans and other current/non-current assets except pension fund surpluses and long-term inventory balance) | \n\n 1,497 | \n\n 1,677 | \n
| \n Financial assets measured at fair value through other comprehensive income | \n\n 85 | \n\n 51 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship (see note F26) | \n\n 78 | \n\n 50 | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n 8 | \n\n 1 | \n
| \n Total financial assets | \n\n 1,642 | \n\n 1,833 | \n
| \n \n | \n\n \n | \n\n \n | \n
| \n Fair value through profit or loss | \n\n -27 | \n\n -37 | \n
| \n Held for trading (financial instruments - operational - see note F34) | \n\n -26 | \n\n -36 | \n
| \n Held for trading (financial debt - see note F33, table Changes in financial debt) | \n\n -2 | \n\n -1 | \n
| \n Financial liabilities measured at amortized cost | \n\n -2,766 | \n\n -2,887 | \n
| \n Financial liabilities measured at amortized cost (excluding dividends payable and IFRS 16 lease liabilities) | \n\n -2,659 | \n\n -2,712 | \n
| \n Dividends payables | \n\n -107 | \n\n -175 | \n
| \n Lease liabilities measured at amortized cost | \n\n -306 | \n\n -307 | \n
| \n Lease liabilities IFRS16 measured at amortized cost | \n\n -306 | \n\n -307 | \n
| \n Financial liabilities measured at fair value through other comprehensive income | \n\n -88 | \n\n -165 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship (see note F34) | \n\n -88 | \n\n -165 | \n
| \n Total financial and lease liabilities | \n\n -3,187 | \n\n -3,395 | \n
The category \u201cHeld for trading\u201d contains derivative financial instruments that are used for management of foreign currency risk, utility and CO2 emission rights price risks, index and shares. Contracts which have been documented as hedging instruments (hedge accounting under IFRS 9 Financial Instruments) or which meet the exemption criteria for own use are not included in the category \u201cHeld for trading.\u201d
At the end of 2024, \u20ac55 million of instruments at fair value through profit or loss relate to equity instruments related to Syensqo Group.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||
|---|---|---|---|---|
| \n Carrying amount | \n\n Fair value | \n\n Carrying amount | \n\n Fair value | \n|
| \n Non-current assets - Financial instruments | \n\n 118 | \n\n 118 | \n\n 136 | \n\n 136 | \n
| \n Loans and other non-current assets (except pension fund surpluses and long-term inventory balance) | \n\n 118 | \n\n 118 | \n\n 136 | \n\n 136 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current liabilities - Financial instruments | \n\n -1,766 | \n\n -1,814 | \n\n -1,774 | \n\n -1,774 | \n
| \n Bonds | \n\n -1,492 | \n\n -1,540 | \n\n 0 | \n\n 0 | \n
| \n Other non-current debts | \n\n -253 | \n\n -253 | \n\n -1,735 | \n\n -1,735 | \n
| \n Other liabilities | \n\n -21 | \n\n -21 | \n\n -39 | \n\n -39 | \n
The carrying amounts of current financial assets and liabilities are estimated to reasonably approximate their fair values, due to the short term to maturity.
The table \u201cFinancial instruments measured at fair value in the consolidated statement of financial position\u201d provides an analysis of financial instruments that, after their initial recognition, are measured at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable. Financial instruments classified as held for trading and as hedging instruments in cash flow hedges are mainly grouped into Levels 1 and 2. They are fair valued based on forward pricing and swap models using present value calculations. The models incorporate various inputs including foreign exchange spot and interest rates of the respective currencies, currency basis spreads between the respective currencies, interest rate curves and forward rate curves of the underlying commodity. The equity instruments measured at fair value through OCI and through profit and loss are presented within Level 1 and 3. The fair value of the instruments presented under Level 3 is measured based on the guidelines recommended by The International Private Equity and Venture Capital Valuation (IPEV).
In accordance with the Group internal rules, the responsibility for measuring the fair value level resides with (a) the Treasury department for the non-utility derivative financial instruments, and the non-derivative financial liabilities, (b) the Sustainable Development and Energy department for the utility derivative financial instruments and (c) the Finance department for non-derivative financial assets.
The Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. During the year, no such transfers have occurred.
| \n In \u20ac million | \n\n December 31, 2024 | \n|||
|---|---|---|---|---|
| \n Level 1 | \n\n Level 2 | \n\n Level 3 | \n\n Total | \n|
| \n Held for trading | \n\n 0 | \n\n 4 | \n\n 0 | \n\n 4 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Shares | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022Index | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n 55 | \n\n \n | \n\n 0 | \n\n 55 | \n
| \n \u2022Shares | \n\n 55 | \n\n \n | \n\n \n | \n\n 55 | \n
| \n Cash flow hedges | \n\n 0 | \n\n 77 | \n\n 0 | \n\n 77 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n \n | \n\n 53 | \n\n 0 | \n\n 53 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 23 | \n\n 0 | \n\n 23 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n 0 | \n\n 0 | \n\n 8 | \n\n 8 | \n
| \n \u2022Shares | \n\n \n | \n\n \n | \n\n 8 | \n\n 8 | \n
| \n Total (assets) | \n\n 55 | \n\n 81 | \n\n 8 | \n\n 144 | \n
| \n \n | \n||||
| \n Held for trading | \n\n 0 | \n\n -27 | \n\n 0 | \n\n -27 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -4 | \n\n 0 | \n\n -4 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n -18 | \n\n 0 | \n\n -18 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Index | \n\n 0 | \n\n -3 | \n\n 0 | \n\n -3 | \n
| \n Cash flow hedges | \n\n 0 | \n\n -87 | \n\n 0 | \n\n -87 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -7 | \n\n 0 | \n\n -7 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n \u2022Utility risk | \n\n \n | \n\n -47 | \n\n 0 | \n\n -47 | \n
| \n \u2022CO2 risk | \n\n \n | \n\n -32 | \n\n 0 | \n\n -32 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total (liabilities) | \n\n 0 | \n\n -115 | \n\n 0 | \n\n -115 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n|||
|---|---|---|---|---|
| \n Level 1 | \n\n Level 2 | \n\n Level 3 | \n\n Total | \n|
| \n Held for trading | \n\n 0 | \n\n 17 | \n\n 0 | \n\n 18 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 3 | \n\n 0 | \n\n 3 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 4 | \n\n 0 | \n\n 5 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Shares | \n\n \n | \n\n 8 | \n\n 0 | \n\n 8 | \n
| \n \u2022Index | \n\n 0 | \n\n 2 | \n\n 0 | \n\n 2 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n 87 | \n\n 0 | \n\n 0 | \n\n 87 | \n
| \n \u2022Shares | \n\n 87 | \n\n \n | \n\n \n | \n\n 87 | \n
| \n Cash flow hedges | \n\n 0 | \n\n 50 | \n\n 0 | \n\n 50 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 2 | \n\n 0 | \n\n 2 | \n
| \n \u2022 Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 47 | \n\n 0 | \n\n 48 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n 0 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n Total (assets) | \n\n 87 | \n\n 67 | \n\n 1 | \n\n 156 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Held for trading | \n\n 0 | \n\n -37 | \n\n 0 | \n\n -37 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -1 | \n\n 0 | \n\n -1 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n -8 | \n\n 0 | \n\n -8 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n -26 | \n\n 0 | \n\n -26 | \n
| \n \u2022 Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Index | \n\n 0 | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n Cash flow hedges | \n\n 0 | \n\n -166 | \n\n 0 | \n\n -166 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -1 | \n\n 0 | \n\n -1 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n -61 | \n\n 0 | \n\n -61 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n -59 | \n\n 0 | \n\n -59 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n -44 | \n\n 0 | \n\n -44 | \n
| \n \u2022Shares | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n Total (liabilities) | \n\n 0 | \n\n -202 | \n\n 0 | \n\n -202 | \n
The fair value of the financial instruments to manage the utility risk reduced in 2024. This is mainly explained by the fact that Solvay had decided to concentrate on its own internal consumption only and the price increase of gas and electricity in comparison to 2023.
Reconciliation of level 3 fair value measurements of financial assets and liabilities.
| \n In \u20ac million | \n\n December 31, 2024 | \n||
|---|---|---|---|
| \n At fair value through profit or loss | \n\n At fair value through other comprehensive income | \n\n Total | \n|
| \n Equity instruments | \n\n Equity instruments | \n||
| \n Opening balance at January 1 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n Total gains or losses | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Recognized in profit or loss | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Recognized in other comprehensive income | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Acquisitions | \n\n \n | \n\n 7 | \n\n 7 | \n
| \n Capital decreases | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Partial Demerger | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Transfers out of level 3 | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Derivative instruments in designated hedge accounting relationships | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Transfer to assets held for sale | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Closing balance at December 31 | \n\n 0 | \n\n 8 | \n\n 8 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n||
|---|---|---|---|
| \n At fair value through profit or loss | \n\n At fair value through other comprehensive income | \n\n Total | \n|
| \n Equity instruments | \n\n Equity instruments | \n||
| \n Opening balance at January 1 | \n\n 47 | \n\n 24 | \n\n 71 | \n
| \n Total gains or losses | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Recognized in profit or loss | \n\n 2 | \n\n \n | \n\n 2 | \n
| \n Recognized in other comprehensive income | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Acquisitions | \n\n 0 | \n\n 8 | \n\n 8 | \n
| \n Capital decreases | \n\n \n | \n\n -1 | \n\n -1 | \n
| \n Partial Demerger | \n\n -49 | \n\n -30 | \n\n -79 | \n
| \n Closing balance at December 31 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Recognized in the consolidated income statement | \n\n \n | \n\n \n | \n
| \n Recycling from OCI of derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n -7 | \n\n 39 | \n
| \n \u2022Utility risk | \n\n -4 | \n\n -1 | \n
| \n \u2022Interest rate risk | \n\n \n | \n\n \n | \n
| \n Changes in the fair value of financial instruments held for trading | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n \n | \n\n \n | \n
| \n \u2022Utility risk | \n\n -2 | \n\n 86 | \n
| \n \u2022CO2 risk | \n\n \n | \n\n 15 | \n
| \n Recognized in the gross margin | \n\n -14 | \n\n 138 | \n
| \n Recycling from OCI of derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022CO2 risk | \n\n -38 | \n\n \n | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n
| \n Changes in the fair value of financial instruments held for trading | \n\n \n | \n\n \n | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022CO2 risk | \n\n 8 | \n\n 0 | \n
| \n \u2022Shares | \n\n -3 | \n\n 0 | \n
| \n Gains and losses (time value) on derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022CO2 risk | \n\n \n | \n\n \n | \n
| \n Foreign operating exchange gains and losses | \n\n 0 | \n\n 2 | \n
| \n Recognized in other operating gains and losses | \n\n -33 | \n\n 2 | \n
| \n Recycling from OCI of derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n Changes in the fair value of financial instruments held for trading | \n\n \n | \n\n \n | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022 Shares | \n\n 0 | \n\n 0 | \n
| \n Ineffective portion of derivative financial instruments designated in cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n Recognized in results from portfolio management and reassessments | \n\n 0 | \n\n 0 | \n
| \n Net interest expense | \n\n -79 | \n\n -24 | \n
| \n Financial charge on lease liabilities | \n\n -12 | \n\n -11 | \n
| \n Other gains and losses on net indebtedness (excluding gains and losses on items not related to financial instruments) | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n -3 | \n\n 1 | \n
| \n \u2022Interest element of financial instruments | \n\n 1 | \n\n 6 | \n
| \n \u2022Others | \n\n -3 | \n\n -6 | \n
| \n Recognized in charges on net indebtedness(*) | \n\n -97 | \n\n -33 | \n
| \n Dividends from equity instruments measured at fair value through other comprehensive income | \n\n \n | \n\n \n | \n
| \n Capital gain on available-for-sale investment posted directly to the income statement | \n\n \n | \n\n \n | \n
| \n Recycling from equity of unrecognized gain and losses related to disposed available-for-sale financial assets(*) | \n\n 0 | \n\n 0 | \n
| \n Recycling from equity of impairment losses on available-for-sale financial assets(*) | \n\n 0 | \n\n 0 | \n
| \n Total recognized in the consolidated income statement | \n\n -144 | \n\n 107 | \n
(*)The note F6 Net Financial Charges shows an amount of \u20ac(76) million for 2024 (\u20ac(41) million for 2023) reported under \u201cNet cost of borrowing\u201d. This amount includes \u20ac(3) million for 2024 (\u20ac(6) million for 2023) of financial expenses not related to financial instruments that are excluded in this table from the line item \u201cRecognized in charges on net indebtedness.\u201d
The loss on highly probable sales in foreign currency recognized in gross margin for \u20ac(7) million is mainly explained by the hedging of the US$ currency and the loss recognized on utility instruments for \u20ac(4) million.
The change in fair value of financial instruments held for trading recognized in gross margin is explained by:
ha gain of \u20ac86 million in 2023, due to the price increase of gas and electricity;
In 2024, the loss of \u20ac(33) million recognized in other operating gains and losses is mainly explained by:
hA gain of \u20ac8 million (a gain of \u20ac15 million in 2023) mainly due to the price variation of CO2.
hThe loss of \u20ac(38) million recognized in other operating gains and losses is explained by the discontinuance of cash flow hedge relationship on CO2 in 2024. Refer also to F32D Other market risks.
In 2024, in the caption other gains and losses on net indebtedness, the foreign exchange income decreased by \u20ac(4) million in comparison to 2023. The gain of \u20ac1\u00a0million (\u20ac6 million for 2023) is related to the interest element of financial derivatives (forward points). The other costs decreased by \u20ac(4) million in 2024 in comparison to 2023 due to one off costs incurred in the frame of the separation plan in 2023.
Net interest expense of \u20ac79 million includes \u20ac5 million of interest rate risk recycled from OCI.
| \n In \u20ac million | \n\n Cash flow hedges | \n|||||||
|---|---|---|---|---|---|---|---|---|
| \n Foreign currency risk | \n\n Interest rate risk | \n\n Commodity risk | \n\n Total | \n|||||
| \n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n|
| \n Balance at January 1 | \n\n 1 | \n\n 13 | \n\n -61 | \n\n 0 | \n\n -87 | \n\n 67 | \n\n -148 | \n\n 81 | \n
| \n Recycling from other comprehensive income of derivative financial instruments designated in a cash flow hedge relationship | \n\n 7 | \n\n -41 | \n\n 5 | \n\n 9 | \n\n 43 | \n\n 13 | \n\n 55 | \n\n -20 | \n
| \n Effective portion of changes in fair value of cash flow hedge | \n\n -13 | \n\n 29 | \n\n 23 | \n\n -70 | \n\n -15 | \n\n -167 | \n\n -6 | \n\n -209 | \n
| \n Balance at December 31 | \n\n -5 | \n\n 1 | \n\n -33 | \n\n -61 | \n\n -60 | \n\n -87 | \n\n -99 | \n\n -148 | \n
Held for trading
The transactional risk is managed either by spot or forward contracts. Unless documented as hedging instruments (see above), derivative financial instruments are classified as held for trading.
In 2024, the notional amounts transacted to manage the transactional risk are:
ha long position of \u20ac368 million (compared to \u20ac271 million in 2023);
ha short position of \u20ac(239) million (compared to \u20ac(284) million in 2023);
hin comparison to 2023, the optimization of the cash centralization model led to a net long position increase of \u20ac142 million (mainly Chinese Yuan and US Dollar).
The following table details the notional amounts of the Group\u2019s derivatives contracts outstanding at the end of the period:
| \n In \u20ac million | \n\n Notional amount(1) | \n\n Fair value assets | \n\n Fair value liabilities | \n|||
|---|---|---|---|---|---|---|
| \n December 31 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n
| \n Held for trading long position | \n\n 368 | \n\n 271 | \n\n 1 | \n\n 1 | \n\n -1 | \n\n -1 | \n
| \n Held for trading short position | \n\n -239 | \n\n -284 | \n\n 1 | \n\n 2 | \n\n -3 | \n\n 0 | \n
| \n Total | \n\n 129 | \n\n -13 | \n\n 2 | \n\n 3 | \n\n -4 | \n\n -1 | \n
(1)Long/(short) positions (if the foreign exchange transaction does not involve the functional currency, both notional amounts are considered).
NOTE F34
Other liabilities (current)
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Wages and benefits debts | \n\n 123 | \n\n 125 | \n
| \n VAT and other taxes | \n\n 105 | \n\n 107 | \n
| \n Social security | \n\n 18 | \n\n 29 | \n
| \n Financial instruments - operational | \n\n 98 | \n\n 108 | \n
| \n Insurance premiums | \n\n 14 | \n\n 31 | \n
| \n Advances from customers | \n\n 21 | \n\n 30 | \n
| \n Long Term Incentive - current part | \n\n 17 | \n\n 31 | \n
| \n Other | \n\n 61 | \n\n 126 | \n
| \n Other current liabilities | \n\n 458 | \n\n 585 | \n
The decrease in \u201cOther\u201d when compared to 2023 is primarily related to the Insurance reimbursement of \u20ac32 million (payable to Syensqo) which was outstanding at December 31, 2023 (see note F25 Other receivables) and paid in 2024.
Financial instruments \u2013 operational include held for trading and cash flow hedge derivatives (see note F32 Overview of financial instruments).
NOTE F25
Other receivables (current)
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n VAT and other taxes | \n\n 192 | \n\n 202 | \n
| \n Advances to suppliers | \n\n 32 | \n\n 37 | \n
| \n Financial instruments - operational | \n\n 67 | \n\n 56 | \n
| \n Insurance premiums | \n\n 23 | \n\n 36 | \n
| \n Loan receivables | \n\n 3 | \n\n 5 | \n
| \n Other | \n\n 80 | \n\n 127 | \n
| \n Other current receivables | \n\n 396 | \n\n 462 | \n
In 2023, the row Other contains a pending insurance reimbursement of \u20ac32 million (see also Note F34 Other liabilities) and Fluor quotas of \u20ac16 million, which both have been settled in 2024 with Syensqo.
Financial instruments \u2013 operational includes held for trading and cash flow hedge derivatives (see note F32.A. Overview of financial instruments).
NOTE F25
Other receivables (current)
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n VAT and other taxes | \n\n 192 | \n\n 202 | \n
| \n Advances to suppliers | \n\n 32 | \n\n 37 | \n
| \n Financial instruments - operational | \n\n 67 | \n\n 56 | \n
| \n Insurance premiums | \n\n 23 | \n\n 36 | \n
| \n Loan receivables | \n\n 3 | \n\n 5 | \n
| \n Other | \n\n 80 | \n\n 127 | \n
| \n Other current receivables | \n\n 396 | \n\n 462 | \n
In 2023, the row Other contains a pending insurance reimbursement of \u20ac32 million (see also Note F34 Other liabilities) and Fluor quotas of \u20ac16 million, which both have been settled in 2024 with Syensqo.
Financial instruments \u2013 operational includes held for trading and cash flow hedge derivatives (see note F32.A. Overview of financial instruments).
NOTE F27
Equity
fAccounting policy
Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issuance of new share capital are directly recognized in equity as a deduction, net of tax, from the equity issuance proceeds.
NOTE F27
Equity
fAccounting policy
Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issuance of new share capital are directly recognized in equity as a deduction, net of tax, from the equity issuance proceeds.
Those represent the share of non-controlling interests in the net assets and comprehensive income of subsidiaries of the Group and correspond to the interests in subsidiaries that are not held by the Company or its subsidiaries.
NOTE F28
Non-controlling interests
The amounts disclosed below are fully consolidated amounts and do not reflect the impacts from elimination of intragroup transactions.
At the end of 2024, the following most material subsidiaries have non-controlling interests (NCI) totaling \u20ac60 million out of total NCI of \u20ac65 million.
| \n In \u20ac million | \n\n Solvay Lantian (Quzhou) Chemicals | \n\n Salzgewinnungsgezellschaft Westfalen | \n\n Shandong Huatai Interox Chemicals | \n
|---|---|---|---|
| \n Non-controlling ownership interest | \n\n 45% | \n\n 35% | \n\n 40% | \n
| \n Statement of financial position | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current assets | \n\n 25 | \n\n 55 | \n\n 33 | \n
| \n Current assets | \n\n 60 | \n\n 37 | \n\n 21 | \n
| \n Non-current liabilities | \n\n 4 | \n\n 51 | \n\n 1 | \n
| \n Current liabilities | \n\n 14 | \n\n 6 | \n\n 7 | \n
| \n Income statement | \n\n \n | \n\n \n | \n\n \n | \n
| \n Sales | \n\n 86 | \n\n 11 | \n\n 28 | \n
| \n Profit for the year | \n\n 13 | \n\n 3 | \n\n 16 | \n
| \n Other comprehensive income | \n\n 2 | \n\n 1 | \n\n 1 | \n
| \n Total comprehensive income | \n\n 15 | \n\n 4 | \n\n 17 | \n
| \n Dividends paid to non-controlling interests | \n\n 2 | \n\n 0 | \n\n 0 | \n
| \n Share of non-controlling interest in the profit for the year | \n\n 6 | \n\n 1 | \n\n 2 | \n
| \n Accumulated non-controlling interests | \n\n 30 | \n\n 12 | \n\n 18 | \n
At the end of 2023, the following subsidiaries had non-controlling interests totaling \u20ac35 million, out of a total of \u20ac42 million.
| \n In \u20ac million | \n\n Solvay Lantian (Quzhou) Chemicals | \n\n Salzgewinnungsgezellschaft Westfalen | \n
|---|---|---|
| \n Non-controlling ownership interest | \n\n 45% | \n\n 35% | \n
| \n Statement of financial position | \n\n \n | \n\n \n | \n
| \n Non-current assets | \n\n 26 | \n\n 55 | \n
| \n Current assets | \n\n 47 | \n\n 22 | \n
| \n Non-current liabilities | \n\n 3 | \n\n 41 | \n
| \n Current liabilities | \n\n 15 | \n\n 4 | \n
| \n Income statement | \n\n \n | \n\n \n | \n
| \n Sales | \n\n 89 | \n\n 11 | \n
| \n Profit for the year | \n\n 10 | \n\n 7 | \n
| \n Other comprehensive income | \n\n -2 | \n\n -1 | \n
| \n Total comprehensive income | \n\n 8 | \n\n 6 | \n
| \n Dividends paid to non-controlling interests | \n\n 3 | \n\n 0 | \n
| \n Share of non-controlling interest in the profit for the year | \n\n 4 | \n\n 2 | \n
| \n Accumulated non-controlling interests | \n\n 24 | \n\n 11 | \n
Those represent the share of non-controlling interests in the net assets and comprehensive income of subsidiaries of the Group and correspond to the interests in subsidiaries that are not held by the Company or its subsidiaries.
NOTE F29
Share-based payments
fAccounting policy
Solvay has set up compensation plans, including equity-settled and cash-settled share-based compensation plans.
In its equity-settled plans, the Group receives services as consideration for its own equity instruments (namely through the issuance of share options). The fair value of services rendered by employees in consideration for the granting of equity-instruments represents an expense. This expense is recognized on a straight-line basis in the consolidated income statement over the vesting periods relating to these equity-instruments with the recognition of a corresponding adjustment in equity. The fair value of services rendered is measured based on the fair value of the equity-instruments on the grant date. It is not subsequently remeasured. At each reporting date, the Group re-estimates the number of share options likely to vest. The impact of the revised estimates is recognized in profit or loss against a corresponding adjustment in equity.
In its cash-settled plans, the Group acquires services by incurring a liability to transfer to its employees rendering those services amounts that are based on the price (or value) of equity instruments (including shares or share options) of the Group (namely through the issuance of performance share units). The fair value of services rendered by employees in consideration for the granting of share-based payments represents an expense. This expense is recognized on a straight-line basis in the consolidated income statement over the vesting periods relating to these share-based payments with the recognition of a corresponding adjustment in liabilities. At each reporting date, the Group re-estimates the number of options likely to vest, with the impact of the revised estimates recognized in profit or loss. The Group measures the services acquired and the liability incurred at the fair value of the liability. Until the liability is settled, the Group remeasures the fair value of the liability at the end of each reporting period and at the date of settlement, with any changes in fair value recognized in profit or loss for the period.
Service and non-market performance conditions are not considered when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group\u2019s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to immediate expensing of an award unless there are also service and/or performance conditions. No expense is recognized for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share (further details are given in Note F9 Earnings per share).
Awards on shares of Syensqo SA/NV
The awards granted on shares of the Syensqo Group are not in scope of IFRS 2 Share Based Payments. Therefore, the Management has established the accounting policy for these awards.
For the awards granted on Syensqo Group shares, a liability is recognized and measured based on the fair value of the Syensqo Group awards at each reporting date. On initial recognition of the liability at the Partial Demerger date, a corresponding entry is recognized in equity for the vesting period that has passed to date and the remaining amount is recognized as Other Receivables. This asset represents the services that have yet to be rendered by the beneficiaries. The asset will be amortized to the consolidated income statement over the remaining vesting period of the plans.
The costs of the awards related to the Syensqo Group are presented within operational (Administrative) expenses. The fair value fluctuation on the liability will be presented in Financial Results together with the fair value fluctuation on the hedging options/shares, which will partially hedge the impact.
The liability will be remeasured to its fair value at each reporting date. This applies equally to vested plans so long as there remains outstanding (unexercised) options.
The liabilities related to the fully vested plans are disclosed as current given that the beneficiaries may exercise their awards at any time. The liabilities related to the unvested plans are disclosed as non-current.
As part of the Partial Demerger, the Solvay Board approved the amendments to the existing long term incentive plans (LTI). The LTIs were adjusted based on the following approaches:
1.Shareholder approach \u2013 The existing awards were adjusted to entitle beneficiaries to receive one share option of Solvay SA/NV and one share option of Syensqo SA/NV.
2.Employer approach \u2013 The existing awards were adjusted to entitle beneficiaries to receive a certain number of awards of their employer.
3.Basket approach \u2013 The existing awards were modified to entitle beneficiaries to receive an option on both Solvay SA/NV and Syensqo SA/NV.
All outstanding stock options were converted into options on both the Solvay Group and Syensqo Group shares, as described above. The options can be exercised individually on each Group\u2019s shares except for the 2022 SOP, which is a basket option i.e. the option is exercised on both shares of Solvay and Syensqo simultaneously.
Since the Partial Demerger in 2023, the 2022 SOP is no longer classified as an equity settled plan due to the basket option feature. This plan is treated similarly to the awards on Syensqo\u2019s shares.
The exercise prices of all the stock options (excluding the 2022 SOP) were reset at the Partial Demerger date taking into consideration the Solvay and Syensqo closing share prices at December 11, 2023. As per Belgian law requirements, the sum of new exercise prices of Solvay and Syensqo options equal the original exercise price of the plans.
In 2023, the share options resulted in an expense of \u20ac3 million, which includes the impact of the plan amendments, and is recognized in the consolidated income statement as part of administrative costs. The carrying amount of the liability for stock options on Syensqo shares at December 31, 2023 is \u20ac28 million.
In accordance with the requirements of IFRS 2 modification accounting, the Group obtained updated fair values using Black-Scholes models of all the share-based payment plans at the date of the Partial Demerger based on (i) the original terms but updated to the Partial Demerger date, and (ii) the modified terms. The fair values were compared and where there was an increase in fair value under the modified terms, the Group will recognize this additional cost over the remaining vesting period for the unvested plans. The additional cost related to vested plans was recognized in full in Administrative Expenses for the year ended December 31, 2023. The impact of the incremental fair value for both unvested and vested plans was not material to the Group.
The performance metrics were measured for the full year 2022, 2023 and 2024. The PSUs were converted to RSUs by applying an extrapolation method to the third performance year (2024). The vesting period remains unchanged. The RSUs vested at the end of December 2024 and the shares of Solvay and Syensqo Group will be delivered to the beneficiaries in Q1 2025.
The performance metrics were measured for the full year 2023 and 2024. The PSUs and RSUs will vest at the end of December 2025 and the Solvay shares will be delivered to the beneficiaries in Q1 2026.
The performance metrics were measured for the full year 2024. The PSUs and RSUs will vest at the end of December 2026 and the Solvay shares will be delivered to the beneficiaries in Q1 2027.
The ESPP free and matching shares vested at the end of September 2024 and delivered to the employees at that date.
For the awards granted on Syensqo shares, a liability is recognized, and it is measured on December 31, 2024, at \u20ac9 million.
The costs of the awards related to the Syensqo shares (\u20ac1 million) are presented within operational (administrative) expenses in the Consolidated Income statement. The fair value fluctuation on the liability (\u20ac19 million) is presented in Financial Results.
Prior to the Partial Demerger, all the stock option plans were equity settled. Following the Partial Demerger, the Group also must account for awards granted on Syensqo shares (see the Shareholder approach). The table below includes both the options on Solvay shares as well as Syensqo shares. There was no stock option plan granted in 2024.
| \n Share option plans | \n\n 2021 | \n\n 2020 | \n\n 2019 | \n\n 2018 - 2 | \n\n 2018 - 1 | \n\n 2017 | \n\n 2016 | \n
|---|---|---|---|---|---|---|---|
| \n Number of share options granted and still outstanding at December 31, 2023 | \n\n 105,594 | \n\n 171,427 | \n\n 165,839 | \n\n 53,640 | \n\n 260,611 | \n\n 216,709 | \n\n 68,935 | \n
| \n Granted share options | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Forfeitures of rights and expiries | \n\n -6,432 | \n\n -5,417 | \n\n -13,225 | \n\n -5,588 | \n\n \n | \n\n -3,182 | \n\n -8,839 | \n
| \n Share options exercised | \n\n \n | \n\n -132,352 | \n\n -112,687 | \n\n -48,052 | \n\n -171,604 | \n\n -178,136 | \n\n -60,096 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Number of Solvay share options at December 31, 2024 | \n\n 99,162 | \n\n 33,658 | \n\n 39,927 | \n\n 0 | \n\n 89,007 | \n\n 35,391 | \n\n 0 | \n
| \n Solvay share options exercisable at December 31, 2024 | \n\n \n | \n\n 33,658 | \n\n 39,927 | \n\n 0 | \n\n 89,007 | \n\n 35,391 | \n\n 0 | \n
| \n Exercise price (in \u20ac) | \n\n 16.49 | \n\n 16.52 | \n\n 16.74 | \n\n 18.69 | \n\n 19.51 | \n\n 19.19 | \n\n 13.11 | \n
| \n Fair value of options at measurement date (in \u20ac) | \n\n 4.56 | \n\n 4.42 | \n\n 4.16 | \n\n 2.68 | \n\n 2.68 | \n\n 2.25 | \n\n 6.30 | \n
| \n Number of Syensqo share options at December 31, 2023 | \n\n 105,594 | \n\n 171,427 | \n\n 177,109 | \n\n 65,653 | \n\n 279,888 | \n\n 238,861 | \n\n 168,429 | \n
| \n Forfeitures of rights and expiries | \n\n -6,432 | \n\n -5,417 | \n\n -22,495 | \n\n -5,588 | \n\n \n | \n\n -3,182 | \n\n -108,833 | \n
| \n Share options exercised | \n\n \n | \n\n -41,302 | \n\n -31,593 | \n\n -12,013 | \n\n -12,999 | \n\n -21,637 | \n\n -59,596 | \n
| \n Number of Syensqo share options at December 31, 2024 | \n\n 99,162 | \n\n 124,708 | \n\n 123,021 | \n\n 48,052 | \n\n 266,889 | \n\n 214,042 | \n\n 0 | \n
| \n Syensqo share options exercisable at December 31, 2024 | \n\n \n | \n\n 124,708 | \n\n 123,021 | \n\n 48,052 | \n\n 266,889 | \n\n 214,042 | \n\n 0 | \n
| \n Exercise price (in \u20ac) | \n\n 79.09 | \n\n 79.28 | \n\n 80.31 | \n\n 89.69 | \n\n 93.60 | \n\n 92.08 | \n\n 62.87 | \n
| \n Fair value of options at measurement date (in \u20ac) | \n\n 22.45 | \n\n 21.76 | \n\n 20.50 | \n\n 13.37 | \n\n 13.37 | \n\n 11.27 | \n\n 31.22 | \n
| \n Share option plans | \n\n 2022 | \n
|---|---|
| \n Number of share options granted and still outstanding at December 31, 2023 | \n\n 102,336 | \n
| \n Granted share options | \n\n \n | \n
| \n Forfeitures of rights and expiries | \n\n \n | \n
| \n Share options exercised | \n\n \n | \n
| \n Partial Demerger of Syensqo | \n\n \n | \n
| \n Number of basket share options at December 31, 2024 | \n\n 102,336 | \n
| \n Basket share options exercisable at December 31, 2024 | \n\n 0 | \n
| \n Exercise price (in \u20ac) | \n\n 84.34 | \n
| \n Fair value of options at measurement date (in \u20ac) | \n\n 30.58 | \n
The options in 2022 SOP have a higher exercise price compared to other SOPs because this plan was converted using the Basket approach and for each option exercised, the holder will acquire one Solvay SA/NV share and one Syensqo SA/NV share against payment of the exercise price.
| \n \n | \n\n 2024 | \n\n 2023 | \n||
|---|---|---|---|---|
| \n Number of share options | \n\n Weighted average exercise price | \n\n Number of share options | \n\n Weighted average exercise price | \n|
| \n January 1 | \n\n 1,145,091 | \n\n 21.82 | \n\n 3,072,197 | \n\n 102.45 | \n
| \n Granted during the year | \n\n 0 | \n\n \n | \n\n 0 | \n\n \n | \n
| \n Forfeitures of rights and expiries during the year | \n\n -42,683 | \n\n 16.25 | \n\n -610,796 | \n\n 16.25 | \n
| \n Exercised during the year | \n\n -702,927 | \n\n 17.82 | \n\n -539,838 | \n\n 17.82 | \n
| \n Partial Demerger of Syensqo | \n\n 0 | \n\n \n | \n\n -776,472 | \n\n \n | \n
| \n December 31 | \n\n 399,481 | \n\n 34.81 | \n\n 1,145,091 | \n\n 21.82 | \n
| \n Exercisable at December 31 | \n\n 197,983 | \n\n \n | \n\n 765,734 | \n\n \n | \n
| \n Shareholder approach | \n\n \n | \n\n \n | \n\n
| \n\n
| \n
|---|---|---|---|---|
| \n \u2022Options on Solvay Shares | \n\n 297,145 | \n\n 17.75 | \n\n 1,042,755 | \n\n 17.74 | \n
| \n \u2022Solvay share options exercisable at December 31, 2024 | \n\n 197,983 | \n\n \n | \n\n 765,734 | \n\n
| \n
| \n \u2022Options on Syensqo Shares(1) | \n\n 875,874 | \n\n 87.47 | \n\n 1,258,672 | \n\n 83.54 | \n
| \n \u2022Syensqo share options exercisable at December 31, 2024 | \n\n 776,712 | \n\n \n | \n\n 929,940 | \n\n
| \n
| \n Basket approach(2) | \n\n \n | \n\n \n | \n\n
| \n\n
| \n
| \n \u2022Basket options | \n\n 102,336 | \n\n 84.34 | \n\n 102,336 | \n\n 84.34 | \n
| \n \u2022Basket share options exercisable at December 31, 2024 | \n\n 0 | \n\n \n | \n\n 0 | \n\n
| \n
(1)Before the Partial Demerger, only options on Solvay shares existed.
(2)Following the completion of the Partial Demerger, the Shareholder approach or Basket approach were applied to SOP plans.
In 2024, the share options resulted in an expense of \u20ac1 million and is recognized in the consolidated income statement as part of administrative costs. The carrying amount of the liability for stock options on Syensqo shares at December 31, 2024 is \u20ac9 million.
| \n In years | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n 2015 | \n\n \n | \n\n 0.0 | \n
| \n 2016 | \n\n 0.0 | \n\n 0.2 | \n
| \n 2017 | \n\n 0.2 | \n\n 1.2 | \n
| \n 2018-1 | \n\n 1.2 | \n\n 2.2 | \n
| \n 2018-2 | \n\n 1.6 | \n\n 2.6 | \n
| \n 2019 | \n\n 2.2 | \n\n 3.2 | \n
| \n 2020 | \n\n 3.2 | \n\n 4.2 | \n
| \n 2021 | \n\n 4.1 | \n\n 5.1 | \n
| \n 2022 | \n\n 3.0 | \n\n 4.0 | \n
| \n Performance share units | \n\n Plan 2024 | \n\n Plan 2023 | \n
|---|---|---|
| \n Number of PSUs | \n\n 265,834 | \n\n 190,156 | \n
| \n Grant date | \n\n 21/03/2024 | \n\n 07/03/2023 | \n
| \n Acquisition date | \n\n 01/01/2027 | \n\n 01/01/2026 | \n
| \n Vesting period | \n\n 21/03/2024 to 31/12/2026 | \n\n 07/03/2023 to 31/12/2025 | \n
| \n \n | \n\n \n | \n\n \n | \n
| \n Performance conditions | \n\n 40% of the initial granted PSUs are subject to the achievement of Year over Year Underlying EBITDA growth target for each of the 3 (2024,2025,2026) performance years ending on December 31, 2026 | \n\n 40% of the initial granted PSUs are subject to the achievement of Year over Year Underlying EBITDA growth target for each of the 3 (2023,2024,2025) performance years ending on December 31, 2025 | \n
| \n 40% of the initial granted PSUs are subject to the sustained and /or improved ROCE % of the Company for each of the 3 (2024,2025,2026) performance years | \n\n 40% of the initial granted PSUs are subject to the sustained and /or improved ROCE % of the Company for each of the 3 (2023,2024,2025) performance years | \n|
| \n 20% of the initial granted PSUs are subject to the reduction of GHG absolute emissions during the same 3 years (2024,2025,2026) | \n\n 20% of the initial granted PSUs are subject to the reduction of GHG absolute emissions during the same 3 years (2023,2024,2025) | \n|
| \n Achievement of the plan is measured for each separate performance year. The score achieved for each individual year is acquired definitively, whatever the achievement of the other years | \n\n Achievement of the plan is measured for each separate performance year. The score achieved for each individual year is acquired definitively, whatever the achievement of the other years | \n|
| \n Validation of performance conditions | \n\n By the Board of Directors | \n\n By the Board of Directors | \n
In 2024, the Board of Directors offered to executive staff a Performance Share Unit Plan, with the objective of promoting long-term success and to increase the focus on sustainable performance for the benefit of the Solvay Group and its stakeholders. All the managers involved subscribed to the PSU offered to them in 2024 with a grant date fair value of \u20ac24.83 representing the average stock market price of the share for the 30 days prior to the offer. The Total Shareholder Return (TSR) performance condition was met at the end of 2024.
For the PSU plan 2023, the participants who are also members of the Executive Leadership Team (including the CEO) on the grant date must achieve an additional performance condition. If achievement of the performance conditions outlined in the above table is positive (above zero), delivery of the PSUs is subject to further adjustment based on the TSR performance of the Group in comparison to the TSR of the Stoxx 600 index companies for the period equal to the Performance Period. The TSR performance condition was partially met at the end of 2024.
The PSU plan 2022 has been converted to an RSU plan in 2023. The shares will be delivered in March 2025.
The PSU plan 2021 is a cash settled plan with a three-year vesting period that vested on December 31, 2023. The payout was determined on the basis of the Solvay Group average share price (\u20ac104.29) during a 10-day trading period ending on November 30, 2023. At December 31, 2023, cumulative liability was (\u20ac9 million). In June 2024 the liability was settled.
In 2024, the impact on the consolidated income statement regarding PSUs (net of hedging \u2013 see note F32 Financial instruments) amounts to a cost of \u20ac(2) million compared to a cost of \u20ac(12) million in 2023.
At December 31, 2024, there were 265,834 PSUs 2024 and 259,924 PSUs 2023 outstanding. In order to settle the PSU 2023 plan in fully Solvay shares, a ratio of 4.53 has been used for the conversion and the result of the calculation has been rounded up to get a whole number of shares.
In 2024, the Board of Directors offered to executive staff two Restricted Share Unit Plans, with the objective of encouraging beneficiaries to remain employed by the Group by allowing them to become shareholders of the Group. All the managers involved subscribed to the RSUs offered to them in 2024 with a grant date fair value of \u20ac24.83 representing the average Solvay Group stock market price of the share for the 30 days prior to the offer.
The Restricted Share Units are equity-settled share-based plans with a vesting date of December 31, 2026, after which shares will be issued, if vesting conditions are met.
In 2024, the impact on the consolidated income statement of the RSUs amounts to a cost of \u20ac(6) million compared to \u20ac(8) million in 2023.
At December 31, 2024, there were 113,974 RSUs 2024, 144,369 RSUs 2023, and 79,628 RSUs 2022 outstanding. In order to settle the RSUs 2023 plan in full Solvay shares, a ratio of 4.53 has been used for the conversion and the result of the calculation has been rounded up to get a whole number of shares.
In September 2022, Solvay launched its first employee share purchase plan. By participating in the plan, employees had the opportunity to purchase Solvay Group shares on preferential terms. The grant date fair value was \u20ac82.85 representing the average stock market price of the share for the 30 days prior to the offer. In accordance with IFRS 2 requirements, the fair value of the ESPP has been updated to \u20ac18.23, being the initial grant date fair value adjusted by the weighted average closing price of both Groups for the 30 days post the Partial Demerger (22% of the initial grant date fair value allocated to Solvay).
These employees received one free Solvay Group share for joining the plan as well as one matching share for every two shares purchased.
On September 30, 2024, 91,718 shares were granted to the employees. In 2024, the impact on the consolidated income statement of the ESPP amounts to a cost of \u20ac(1) million.
The plan vested on September 30, 2024 which resulted in an issuance of free and matching shares.
The share buyback program allowed the Group to acquire 1,241,675 Solvay shares in 2024, for the purpose of meeting any delivery obligations of Solvay shares arising from grants of its 2022, 2023 and 2024 long-term incentive (Performance Share Units, Restricted Share Units and ESPP) plans.
Acquisition/sale of treasury shares in 2024 includes the cash proceeds received from the sale of Syensqo shares related to the settlement of long-term incentive plans for \u20ac15 million, from the sale of Solvay shares related to the settlement of long-term incentive plans for \u20ac7 million and the share buyback transactions for \u20ac(37) million.
NOTE F29
Share-based payments
fAccounting policy
Solvay has set up compensation plans, including equity-settled and cash-settled share-based compensation plans.
In its equity-settled plans, the Group receives services as consideration for its own equity instruments (namely through the issuance of share options). The fair value of services rendered by employees in consideration for the granting of equity-instruments represents an expense. This expense is recognized on a straight-line basis in the consolidated income statement over the vesting periods relating to these equity-instruments with the recognition of a corresponding adjustment in equity. The fair value of services rendered is measured based on the fair value of the equity-instruments on the grant date. It is not subsequently remeasured. At each reporting date, the Group re-estimates the number of share options likely to vest. The impact of the revised estimates is recognized in profit or loss against a corresponding adjustment in equity.
In its cash-settled plans, the Group acquires services by incurring a liability to transfer to its employees rendering those services amounts that are based on the price (or value) of equity instruments (including shares or share options) of the Group (namely through the issuance of performance share units). The fair value of services rendered by employees in consideration for the granting of share-based payments represents an expense. This expense is recognized on a straight-line basis in the consolidated income statement over the vesting periods relating to these share-based payments with the recognition of a corresponding adjustment in liabilities. At each reporting date, the Group re-estimates the number of options likely to vest, with the impact of the revised estimates recognized in profit or loss. The Group measures the services acquired and the liability incurred at the fair value of the liability. Until the liability is settled, the Group remeasures the fair value of the liability at the end of each reporting period and at the date of settlement, with any changes in fair value recognized in profit or loss for the period.
Service and non-market performance conditions are not considered when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group\u2019s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to immediate expensing of an award unless there are also service and/or performance conditions. No expense is recognized for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share (further details are given in Note F9 Earnings per share).
Awards on shares of Syensqo SA/NV
The awards granted on shares of the Syensqo Group are not in scope of IFRS 2 Share Based Payments. Therefore, the Management has established the accounting policy for these awards.
For the awards granted on Syensqo Group shares, a liability is recognized and measured based on the fair value of the Syensqo Group awards at each reporting date. On initial recognition of the liability at the Partial Demerger date, a corresponding entry is recognized in equity for the vesting period that has passed to date and the remaining amount is recognized as Other Receivables. This asset represents the services that have yet to be rendered by the beneficiaries. The asset will be amortized to the consolidated income statement over the remaining vesting period of the plans.
The costs of the awards related to the Syensqo Group are presented within operational (Administrative) expenses. The fair value fluctuation on the liability will be presented in Financial Results together with the fair value fluctuation on the hedging options/shares, which will partially hedge the impact.
The liability will be remeasured to its fair value at each reporting date. This applies equally to vested plans so long as there remains outstanding (unexercised) options.
The liabilities related to the fully vested plans are disclosed as current given that the beneficiaries may exercise their awards at any time. The liabilities related to the unvested plans are disclosed as non-current.
As part of the Partial Demerger, the Solvay Board approved the amendments to the existing long term incentive plans (LTI). The LTIs were adjusted based on the following approaches:
1.Shareholder approach \u2013 The existing awards were adjusted to entitle beneficiaries to receive one share option of Solvay SA/NV and one share option of Syensqo SA/NV.
2.Employer approach \u2013 The existing awards were adjusted to entitle beneficiaries to receive a certain number of awards of their employer.
3.Basket approach \u2013 The existing awards were modified to entitle beneficiaries to receive an option on both Solvay SA/NV and Syensqo SA/NV.
NOTE F30
Employee Benefits
fAccounting policy
General
The Group\u2019s employees are offered various post-employment benefits, other long-term employee benefits, and termination benefits because of legislation applicable in certain countries, and contractual agreements entered into by the Group with its employees or constructive obligations.
The post-employment benefits are classified as defined contribution or defined benefit plans.
Defined contribution plans
Defined contribution plans involve the payment of fixed contributions to a separate entity, and release the employer from any subsequent obligation, as this separate entity is solely responsible for paying the amounts due to the employee. The expense is recognized when an employee has rendered services to the Group during the period.
Defined benefit plans
Defined benefit plans concern all plans other than defined contribution plans, and include:
\u2022post-employment benefits: pension plans, other post-employment obligations and supplemental benefits such as post-employment medical plans.
Considering projected final salaries on an individual basis, post-employment benefits are measured by applying a method (projected unit credit method) using assumptions involving discount rate, life expectancy, turnover, wages, annuity revaluation and medical cost inflation. The assumptions specific to each plan consider the local economic and demographic contexts.
The discount rates are interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related pension obligation.
The amount recognized under post-employment obligations corresponds to the difference between the present value of future obligations and the fair value of the plan assets funding the plan, if any. If this calculation gives rise to a deficit, an obligation is recognized in liabilities. Otherwise, a net asset limited to the lower of the surplus in the defined benefit plan and the present value of any future plan refunds or any reduction in future contributions to the plan is recognized. Therefore, the amount at which such an asset is recognized in the statement of financial position may be subject to a ceiling.
The defined benefit cost consists of service cost and net interest expense (based on discount rate) on the net liability or asset, both recognized in profit or loss, and remeasurements of the net liability or asset, recognized in other comprehensive income.
Service cost consists of current service cost, past service cost resulting from plan amendments or curtailments and settlement gains or losses.
The interest expenses arising from the reverse discounting of the benefit obligations, the financial income on plan assets (determined by multiplying the fair value of the plan assets by the discount rate) as well as interest on the effect of the asset ceiling are recognized on a net basis in the net financial charges (cost of discounting of provisions).
Remeasurements of the net liability or asset consist of:
\u2022actuarial gains and losses on the benefit obligations arising from experience adjustments and/or changes in actuarial assumptions (including the effect of changes in the discount rate) recognized in other comprehensive income;
\u2022changes as a consequence of plan amendments, recognized in profit or loss.
\u2022the return on plan assets (excluding amounts in net interest) and changes in the limitation of the net asset recognized.
Other long-term employee and termination benefits
\u2022Other long-term employee benefits related to long service benefits granted to employees according to their seniority in the Group. Termination benefits include early pension plans. Other long-term employee and termination benefits are accounted for in the same way as post-employment benefits but remeasurements are fully recognized in the net financial charges during the period in which they occur.
\u2022The actuarial calculations of the main post-employment obligations and other long-term benefits are performed by independent actuaries.
Provisions by type of benefits
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Post-employment benefits | \n\n 596 | \n\n 705 | \n
| \n Other long-term benefits | \n\n 44 | \n\n 47 | \n
| \n Termination benefits | \n\n 33 | \n\n 42 | \n
| \n Total employee benefits | \n\n 674 | \n\n 794 | \n
For defined contribution plans, Solvay pays contributions to publicly or privately administered pension funds or insurance companies.
Defined benefit plans can be either funded via outside pension funds or insurance companies (\u201cfunded plans\u201d) or financed within the Group (\u201cunfunded plans\u201d). Unfunded plans have no plan assets dedicated to them.
The net liability results from the net of the provisions and the plan assets\u2019 surplus.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Provisions | \n\n 596 | \n\n 705 | \n
| \n Asset plan surplus (included in non-current loans and other assets) | \n\n -67 | \n\n -90 | \n
| \n Net liability | \n\n 529 | \n\n 614 | \n
| \n \n | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Operational expense | \n\n 9 | \n\n 31 | \n
| \n Finance expense | \n\n 22 | \n\n 34 | \n
The operating expense includes current service cost for \u20ac12 million (\u20ac28 million in 2023) (see also B.3.).
Over recent years, the Group has reduced its exposure to defined benefit plan obligations stemming from future services by converting existing plans into pension plans with a lower risk profile (hybrid plans, cash balance plans and defined contribution plans) or by closing them to new entrants.
Solvay continuously monitors its risk exposure, focusing on the following risks:
Equity instruments, even though expected to outperform corporate bonds in the long-term, create volatility and risk in the short-term. To mitigate this risk, the allocation to equity instruments is monitored using Assets and Liabilities Management techniques, to ensure it remains appropriate given the respective schemes and Group\u2019s long-term objectives.
A decrease in corporate bond yields will increase the carrying amount of the plans\u2019 liabilities. For funded schemes this impact will be partially offset by an increase in the fair value of the plan assets.
Corporate bond yields are highly dependent on global and local market situations, the decisions of central banks and the political situation.
Events that are currently impacting the financial markets are:
hthe perspective of slow growth in the world with a fragmentation by geographic zones;
hthe anticipation of a decrease of rates by the US and European central banks;
ha reduction of the inflation but with signs of resistance of some elements of the underlying inflation;
hcontinuing political instability due to the war in Gaza, Ukraine, tension with China, and outcome of US election.
Consequently, yields in the major currency zones (Eurozone, the UK, and the US) are increasing compared to the end of 2023 (see Actuarial assumptions used in determining the liability). The result is a decrease in the Group's defined benefit obligations in 2024.
The defined benefit obligations are linked to inflation, and as a result, higher inflation may lead to an increase in the benefit obligation (although, in most cases, caps on the level of inflationary increases are in place to protect against extreme inflation). A limited part of the assets is either unaffected by or only partially correlated with inflation, meaning that an increase in inflation will also increase the plans\u2019 net liabilities.
The inflation rate in each country is based on the Global Economic Consensus Forecast (GCF) except for the UK, where the information is derived from the Bank of England. Long-term inflation assumptions have limited downward variation in the Eurozone in comparison to 2023. In the UK, the outlook for the retail price index and consumer price index has increased slightly from 2023.
Most of the schemes\u2019 obligations are to provide benefits for the life of the member. Increases in life expectancy will therefore increase the plans\u2019 liabilities.
Especially with respect to funded plans, the Group is exposed to the risk of external funding following regulatory constraints. This should not impact the defined benefit obligation but could expose the Group to a potential significant cash outlay.
The provisions have been set up to cover post-employment benefits granted by most Group companies in line, either with local rules and /or with established practices, which generate constructive obligations.
The largest post-employment plans in 2024 are in the United Kingdom, the United States, France, Germany, Belgium and Brazil. These six countries represent 98% of the total defined benefit obligations and represent 99% of the total recognized plan assets.
| \n In \u20ac million | \n\n December 31, 2024 | \n||||||
|---|---|---|---|---|---|---|---|
| \n Defined benefit obligations | \n\n In % | \n\n Recognized plan assets | \n\n Net liability/(Asset) | \n\n In % | \n\n Ratio plan assets on defined benefit obligations | \n\n of which Asset surplus recognized in the B/S | \n|
| \n United Kingdom | \n\n 134 | \n\n 8% | \n\n 131 | \n\n 4 | \n\n 1% | \n\n 97% | \n\n 0 | \n
| \n United States | \n\n 231 | \n\n 13% | \n\n 208 | \n\n 23 | \n\n 4% | \n\n 90% | \n\n 3 | \n
| \n France | \n\n 574 | \n\n 33% | \n\n 293 | \n\n 282 | \n\n 53% | \n\n 51% | \n\n 34 | \n
| \n Germany | \n\n 362 | \n\n 21% | \n\n 175 | \n\n 187 | \n\n 35% | \n\n 48% | \n\n 0 | \n
| \n Belgium | \n\n 284 | \n\n 17% | \n\n 298 | \n\n -15 | \n\n -3% | \n\n 105% | \n\n 29 | \n
| \n Brazil | \n\n 93 | \n\n 5% | \n\n 66 | \n\n 27 | \n\n 5% | \n\n 71% | \n\n 0 | \n
| \n Other countries | \n\n 37 | \n\n 2% | \n\n 15 | \n\n 23 | \n\n 4% | \n\n 39% | \n\n 0 | \n
| \n Total | \n\n 1,714 | \n\n 100% | \n\n 1,185 | \n\n 529 | \n\n 100% | \n\n 69% | \n\n 67 | \n
The asset surplus represents an economic benefit for the Group or can revert to the company in case of wind up of the plans. The main countries where recognized assets are surplus are in Belgium and France. In Belgium the surplus can be used to offset employer contributions. For France the surplus relates to receivables for pensioners with annuity that are administered by the Group but are partially borne by third party companies.
| \n In \u20ac million | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|
| \n Defined benefit obligations | \n\n In % | \n\n Recognized plan assets | \n\n Net liability/(Asset) | \n\n In % | \n\n Ratio plan assets on defined benefit obligations | \n\n of which Asset surplus recognized in the B/S | \n|
| \n United Kingdom | \n\n 142 | \n\n 8% | \n\n 139 | \n\n 3 | \n\n 0% | \n\n 98% | \n\n 12 | \n
| \n United States | \n\n 231 | \n\n 13% | \n\n 207 | \n\n 24 | \n\n 4% | \n\n 89% | \n\n 10 | \n
| \n France | \n\n 632 | \n\n 34% | \n\n 288 | \n\n 344 | \n\n 56% | \n\n 46% | \n\n 33 | \n
| \n Germany | \n\n 388 | \n\n 21% | \n\n 190 | \n\n 199 | \n\n 32% | \n\n 49% | \n\n 0 | \n
| \n Belgium | \n\n 274 | \n\n 15% | \n\n 292 | \n\n -18 | \n\n -3% | \n\n 107% | \n\n 34 | \n
| \n Brazil | \n\n 129 | \n\n 7% | \n\n 90 | \n\n 39 | \n\n 6% | \n\n 70% | \n\n 0 | \n
| \n Other countries | \n\n 38 | \n\n 2% | \n\n 16 | \n\n 23 | \n\n 4% | \n\n 41% | \n\n 2 | \n
| \n Total | \n\n 1,836 | \n\n 100% | \n\n 1,222 | \n\n 614 | \n\n 100% | \n\n 67% | \n\n 90 | \n
Solvay sponsors several defined benefit plans in France. The largest plans are the French compulsory retirement indemnity plan and three closed top hat plans. Solvay retains most of the liabilities for the defined benefit plans after Partial Demerger.
The main plan is for all former Rhodia employees who contributed to the plan prior to its closure in the 1970s. It offers a full benefit guarantee based on the end-of-career salary; more than 99% of the liabilities are attributable to current pensioners. The plan is partially funded. At the end of December 2024, an voluntary contribution of \u20ac30 million was paid to the plan (\u20ac18 million in 2023).
In accordance with French legislation, adequate guarantees have been provided.
Solvay sponsors various defined benefit plans in Germany. The largest plans are a closed final-pay plan and an open cash balance plan. At December 31, 2024, broadly about 79% of the liabilities are attributable to current pensioners. The plans are partially funded.
Solvay sponsors two defined benefit plans in Belgium. These are funded pension plans. The plan for executives has been closed since the end of 2006, and the plan for the white and blue collars has been closed since 2004. The past service benefits provided under these plans continue to be adapted each year considering annual salary increase and inflation (\u201cDynamic management\u201d). In accordance with market practice in Belgium, because of favorable retirement lump sum taxation, most benefits are paid as lump sum.
Furthermore, Solvay sponsors two open defined contribution plans, classified as defined benefit plans for accounting purposes due to the minimum guarantees explained hereafter. These are funded pension plans which are open since the beginning of 2007 for the one in favor of the executives and since the beginning of 2005 for the one in favor of the white and blue collars. Participants may choose to invest their contributions amongst four different investment funds (from \u201cPrudent\u201d to \u201cDynamic\u201d). However, regardless of their choices, the Belgian law foresees that the employer must guarantee a return on employer contribution and on personal contribution, creating that way a potential liability for the Group. Since 2016 the return was fixed at 1.75% for both types of contributions, at the minimum of the range provided by law since January 1, 2016 (1.75% to 3.75%). As from January 1, 2025, the minimum return will be fixed at 2.50%. At the end of 2024, net liability recognized in the consolidated statement of financial position concerning these plans is not material.
Solvay\u2019s plans are administered through the Solvay Pension Fund that operates in compliance with local laws regarding minimum funding, investments principles, audited financial statements, governmental filings, and governance principles. The Pension Fund is managed through a General Assembly and a Board of Directors delegating day-to-day activities to an operational committee.
Solvay sponsors a few other smaller pension plans. All these plans are insured.
Solvay sponsored two defined benefit pension plans in the United States, one qualified plan and one non-qualified plan.
A qualified plan is an employer-sponsored retirement plan that qualifies for special tax treatment under Section 401(a) of the Internal Revenue Code. The defined benefit plans are closed to new entrants where newly hired employees are eligible to participate in a defined contribution plan. The qualified defined benefit pension plan is funded while the non-qualified defined benefit pension plan is unfunded. The qualified plan makes up most of the pension liabilities as of December 31, 2024.
Solvay's plans comply with local laws regarding audited financial statements, governmental filings, and Pension Benefit Guaranty Corporation insurance premiums where applicable. The plans are reviewed and monitored locally by fiduciary committees for purposes of plan investments and administrative matters.
For the qualified plan, Solvay\u2019s contributions consider minimum (tax-deductible) funding requirements as well as maximum tax-deductible contributions, both regulated by the tax authorities.
Certain eligible participants may elect to receive their pension in a single lump sum payment instead of a monthly payment.
At year-end, about 24% of the liabilities are attributable to current employees, 11% to former employees for whom benefit payments have not yet commenced and 65% to current pensioners.
Solvay sponsors one defined benefit plan, the Solvay Defined Benefits Pension Fund. It is a final salary funded pension plan, with entitlement to accrue a percentage of salary per year of service. It was closed to new entrants in 2005 and replaced by a defined contribution plan.
As of December 31, 2024, about 1% of the liabilities are attributable to current employees, 35% to former employees and 64% to current pensioners.
The Solvay Pension fund functions and complies with local legislation under a large regulatory framework. The Pensions Regulator has a risk-based approach to regulation and a code of practice, which provides practical guidance to trustees and employers of defined benefit schemes on how to comply with the scheme funding requirements. In accordance with UK legislation, it is subject to Scheme Specific Funding, which requires that pension plans are funded prudently.
The pension fund is governed by a Board of Trustees. They manage the fund with prudent and fair judgment. The Trustees determine the liabilities used for Statutory Funding Objectives based on prudent actuarial and economic assumptions. Any shortfall or deficit once these liabilities have been deducted from the fund\u2019s assets must be reduced by additional contributions and in a timeframe determined in accordance with the employer\u2019s ability to pay and the strength of covenant or contingent security being offered by the employer.
The pension fund is subject to a triennial valuation cycle for funding purposes. This valuation is performed by the scheme actuary in line with UK regulations and is discussed between the Trustees and the sponsoring employer to agree the valuation assumptions and a funding plan.
In December 2023, before the Rhodia Pension Fund was demerged, Solvay made a voluntary contribution of \u00a375 million.
The last completed valuation was as of March 31, 2022, which established a fixed contribution rate of pensionable pay for active members plus a deficit recovery plan. The recovery plan involved the payment of deficit contributions by the company up to June 30, 2023. In May 2023 an exceptional one-off voluntary contribution from the company was paid to the fund (\u00a310 million) which led to an agreement that no further deficit contributions are required to be paid by the company to the fund after June 2023.
The majority of the obligations relate to pension plans. In some countries (mainly Belgium, Brazil, and the United States), there are also post-employment medical plans, which represent 4% (4% in 2023) of the total defined benefit obligation.
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Net amount recognized at beginning of period | \n\n 614 | \n\n 810 | \n
| \n Net expense recognized in P&L - Defined benefit plans | \n\n 31 | \n\n 65 | \n
| \n Actual employer contributions / direct actual benefits paid | \n\n -52 | \n\n -173 | \n
| \n Acquisitions and disposals | \n\n 0 | \n\n 0 | \n
| \n Remeasurements before impact of asset ceiling | \n\n -60 | \n\n 31 | \n
| \n Change in the effect of the asset ceiling limit on remeasurements | \n\n 0 | \n\n -4 | \n
| \n Reclassification and other movements | \n\n 1 | \n\n 2 | \n
| \n Currency translation differences | \n\n -5 | \n\n 0 | \n
| \n Partial Demerger | \n\n 0 | \n\n -116 | \n
| \n Net amount recognized at end of period | \n\n 529 | \n\n 614 | \n
Remeasurements before the impact of asset ceiling \u20ac(60) million comprise:
hthe favorable investment return on plan assets (excluding interests reported in the consolidated income statement) for \u20ac(6) million;
hincrease in discount rates of \u20ac(83) million mainly in the United States, United Kingdom, Brazil and Eurozone;
hdecrease in inflation rate of \u20ac(17) million for Eurozone;
hother remeasurements due to changes in the other financial assumptions, demographic and experience effects of \u20ac46 million.
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Current service costs | \n\n 12 | \n\n 28 | \n
| \n Past service costs (including curtailments and settlements) | \n\n -5 | \n\n 1 | \n
| \n Service costs | \n\n 7 | \n\n 29 | \n
| \n Interest cost | \n\n 67 | \n\n 86 | \n
| \n Interest income | \n\n -45 | \n\n -52 | \n
| \n Net interest | \n\n 22 | \n\n 34 | \n
| \n Administrative expenses paid | \n\n 2 | \n\n 1 | \n
| \n Net expense recognized in P&L - Defined benefit plans | \n\n 31 | \n\n 65 | \n
| \n Remeasurements recognized in other comprehensive income | \n\n -60 | \n\n 26 | \n
The service costs and administrative expenses of these benefit plans are recognized within cost of sales, administrative costs, research & development costs or operating gains and losses and results from legacy remediation, and the net interest is recognized as a finance expense.
In 2024 the Group\u2019s current service costs amount to \u20ac12 million (\u20ac28 million in 2023), of which \u20ac10 million (\u20ac25 million in 2023) related to funded plans and \u20ac3 million (\u20ac4 million in 2023) related to unfunded plans.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Defined benefit obligations - Funded plans | \n\n 1,579 | \n\n 1,678 | \n
| \n Fair value of plan assets at end of period | \n\n -1,185 | \n\n -1,222 | \n
| \n Deficit for funded plans | \n\n 394 | \n\n 456 | \n
| \n Defined benefit obligations - Unfunded plans | \n\n 135 | \n\n 159 | \n
| \n Deficit / surplus (-) | \n\n 529 | \n\n 614 | \n
| \n Amounts not recognized as asset due to asset ceiling (recognized in other comprehensive income) | \n\n 0 | \n\n 0 | \n
| \n Net liability (asset) | \n\n 529 | \n\n 614 | \n
| \n Provision recognized | \n\n 596 | \n\n 705 | \n
| \n Asset recognized | \n\n -67 | \n\n -90 | \n
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Defined benefit obligation at beginning of period | \n\n 1836 | \n\n 3,800 | \n
| \n Current service costs | \n\n 12 | \n\n 28 | \n
| \n Past service costs (including curtailments) | \n\n -5 | \n\n 1 | \n
| \n Interest cost | \n\n 67 | \n\n 86 | \n
| \n Employee contributions | \n\n 2 | \n\n 2 | \n
| \n Settlements | \n\n 0 | \n\n 0 | \n
| \n Acquisitions and disposals (-) | \n\n 0 | \n\n 0 | \n
| \n Remeasurements in other comprehensive income | \n\n -54 | \n\n 162 | \n
| \n Actuarial gains and losses due to changes in demographic assumptions | \n\n 0 | \n\n 7 | \n
| \n Actuarial gains and losses due to changes in financial assumptions | \n\n -100 | \n\n -1 | \n
| \n Actuarial gains and losses due to experience | \n\n 45 | \n\n 156 | \n
| \n Actual benefits paid | \n\n -147 | \n\n -134 | \n
| \n Currency translation differences | \n\n 0 | \n\n 0 | \n
| \n Partial Demerger | \n\n 0 | \n\n -2,148 | \n
| \n Reclassification and other movements | \n\n 3 | \n\n 37 | \n
| \n Defined benefit obligation at end of period | \n\n 1714 | \n\n 1,836 | \n
| \n Defined benefit obligations - Funded plans | \n\n 1579 | \n\n 1,678 | \n
| \n Defined benefit obligations - Unfunded plans | \n\n 135 | \n\n 159 | \n
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Fair value of plan assets at beginning of period | \n\n 1,222 | \n\n 2,995 | \n
| \n Interest income | \n\n 45 | \n\n 52 | \n
| \n Remeasurements in other comprehensive income | \n\n 6 | \n\n 132 | \n
| \n Return on plan assets (excluding amounts in net interests including on asset surplus) | \n\n 6 | \n\n 132 | \n
| \n Employer contributions | \n\n 52 | \n\n 173 | \n
| \n Employee contributions | \n\n 2 | \n\n 2 | \n
| \n Administrative expenses paid | \n\n -2 | \n\n -1 | \n
| \n Acquisitions / Disposals (-) | \n\n 0 | \n\n 0 | \n
| \n Settlements | \n\n 0 | \n\n 0 | \n
| \n Actual benefits paid | \n\n -147 | \n\n -134 | \n
| \n Currency translation differences | \n\n 5 | \n\n 0 | \n
| \n Partial Demerger | \n\n 0 | \n\n -2,032 | \n
| \n Reclassification and other movements | \n\n 2 | \n\n 35 | \n
| \n Fair value of plan assets at end of period | \n\n 1,185 | \n\n 1,222 | \n
| \n Actual return on plan assets (including on asset surplus) | \n\n 51 | \n\n 184 | \n
In 2024, the total return on plan assets, i.e. including interest income, is a gain of \u20ac51 million against \u20ac184 million gain in 2023.
In 2024, the Group\u2019s cash contributions amounted to \u20ac52 million (\u20ac173 million in 2023), of which \u20ac30 million (\u20ac29 million in 2023) of voluntary cash contributions, and \u20ac22 million (\u20ac144 million in 2023) of direct benefits payments and mandatory contributions to funds.
In 2024, the voluntary cash contribution into the pension fund in France (\u20ac30 million) was made to improve the funding level and further de-risk with the additional plan assets.
| \n \n | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Equities | \n\n 17% | \n\n 18% | \n
| \n Bonds | \n\n 71% | \n\n 76% | \n
| \n Properties and infrastructures | \n\n 2% | \n\n 2% | \n
| \n Cash and cash equivalents | \n\n 3% | \n\n 3% | \n
| \n Derivatives | \n\n 0% | \n\n 0% | \n
| \n Others | \n\n 7% | \n\n 1% | \n
| \n Total | \n\n 100% | \n\n 100% | \n
With respect to the invested assets, it should be noted that these assets do not contain any direct investment in Solvay shares or in property or other assets occupied or used by Solvay. This does not exclude Solvay shares being included in mutual investment fund type investments.
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Effect of the asset ceiling limit at beginning of period | \n\n 0 | \n\n 4 | \n
| \n Partial Demerger | \n\n \n | \n\n -4 | \n
| \n Change in the effect of the asset ceiling limit on remeasurements | \n\n 0 | \n\n 0 | \n
| \n Effect of the asset ceiling limit at end of period | \n\n 0 | \n\n 0 | \n
The following are the expected benefits paid by the defined benefit plan in the future years.
| \n Period | \n\n Total | \n\n Eurozone | \n\n United Kingdom | \n\n United States | \n\n Other | \n
|---|---|---|---|---|---|
| \n 2025 | \n\n 137 | \n\n 94 | \n\n 7 | \n\n 23 | \n\n 13 | \n
| \n 2026 | \n\n 152 | \n\n 108 | \n\n 8 | \n\n 23 | \n\n 13 | \n
| \n 2027 - 2029 | \n\n 439 | \n\n 311 | \n\n 25 | \n\n 64 | \n\n 39 | \n
Some of the retirement plans that Solvay has in place provide annuity payments that are adjusted on a regular basis to mitigate the effects for cost-of-living increases.
The salary growth assumption is used to determine what will be the salary at the end of the career of the individuals, as the defined benefit plans consider the last salary of the individuals. This assumption includes impacts of both inflation and merit increases.
The pension growth assumption defines the expected future adjustments for these annuity payments. The plan defines how these annuity payments will be adjusted and might be linked to inflation. Pension growth assumptions mainly apply for the defined benefit retirement plans in the United Kingdom, France and Germany.
The long-term inflation assumption is presented separately as salary growth and pension growth assumptions encompass more variables than inflation.
| \n \n | \n\n Eurozone | \n\n United Kingdom | \n\n United States | \n|||
|---|---|---|---|---|---|---|
| \n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n|
| \n Discount rates | \n\n 3.40% | \n\n 3.00% | \n\n 5.50% | \n\n 4.50% | \n\n 5.40% | \n\n 4.75% | \n
| \n Expected rates of future salary increases | \n\n 1.80% - 4.00% | \n\n 2.00% - 4.00% | \n\n 3.00% | \n\n 2.75% | \n\n 3.10% | \n\n 3.75% | \n
| \n Long-term inflation | \n\n 1.80% - 2.00% | \n\n 2.00% - 2.25% | \n\n 3.00% | \n\n 2.75% | \n\n 2.20% | \n\n 2.25% | \n
| \n Expected rates of pension growth | \n\n 0.00% - 2.00% | \n\n 0.00% - 2.25% | \n\n 2.90% | \n\n 2.55% | \n\n N/A | \n\n N/A | \n
| \n \n | \n\n Eurozone | \n\n United Kingdom | \n\n United States | \n|||
|---|---|---|---|---|---|---|
| \n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n|
| \n Discount rates | \n\n 3.00% | \n\n 3.75% | \n\n 4.50% | \n\n 4.75% | \n\n 4.75% | \n\n 5.00% | \n
| \n Expected rates of future salary increases | \n\n 2.00% - 4.00% | \n\n 2.00% - 4.25% | \n\n 2.75% | \n\n 2.50% - 3.00% | \n\n 3.10% | \n\n 3.10% | \n
| \n Long-term inflation | \n\n 2.00% - 2.25% | \n\n 2.00% - 2.50% | \n\n 2.75% | \n\n 3.00% | \n\n 2.25% | \n\n 2.50% | \n
| \n Expected rates of pension growth | \n\n 0.00% - 2.25% | \n\n 0.00% - 2.50% | \n\n 2.55% | \n\n 2.80% | \n\n N/A | \n\n N/A | \n
Actuarial assumptions regarding future mortality are based on recent country specific mortality tables. These assumptions translate at January 1, 2024, into an average remaining life expectancy in years for a pensioner retiring at age 65:
| \n In years | \n\n Belgium | \n\n France | \n\n Germany | \n\n United Kingdom | \n\n United States | \n
|---|---|---|---|---|---|
| \n Retiring at the end of the reporting period | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Male | \n\n 19 | \n\n 25 | \n\n 21 | \n\n 22 | \n\n 21 | \n
| \n Female | \n\n 22 | \n\n 29 | \n\n 24 | \n\n 24 | \n\n 23 | \n
| \n Retiring 20 years after the end of the reporting period | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Male | \n\n 20 | \n\n 28 | \n\n 23 | \n\n 23 | \n\n 22 | \n
| \n Female | \n\n 24 | \n\n 32 | \n\n 26 | \n\n 26 | \n\n 24 | \n
For most countries the mortality assumptions reflect actual scheme experience and/or Solvay\u2019s expectations in terms of future mortality improvements.
The actuarial assumptions used in determining the employee benefits obligation at December 31, 2024, are based on the following employee benefits liabilities durations:
| \n \n | \n\n Eurozone | \n\n United Kingdom | \n\n United States | \n
|---|---|---|---|
| \n Duration in years | \n\n 9.2 | \n\n 12.7 | \n\n 7.2 | \n
Each sensitivity amount is calculated assuming that all other assumptions are held constant. The economic factors and conditions often affect multiple assumptions simultaneously.
Sensitivity to a change of percentage in the discount rates:
| \n In \u20ac million | \n\n 0.25% increase | \n\n 0.25% decrease | \n
|---|---|---|
| \n Eurozone | \n\n -25 | \n\n 25 | \n
| \n United Kingdom | \n\n -4 | \n\n 4 | \n
| \n United States | \n\n -4 | \n\n 4 | \n
| \n Others | \n\n -2 | \n\n 2 | \n
| \n Total | \n\n -35 | \n\n 35 | \n
Sensitivity to a change of percentage in the inflation rates:
| \n In \u20ac million | \n\n 0.25% increase | \n\n 0.25% decrease | \n
|---|---|---|
| \n Eurozone | \n\n 24 | \n\n -23 | \n
| \n United Kingdom | \n\n 3 | \n\n -3 | \n
| \n United States | \n\n 0 | \n\n 0 | \n
| \n Others | \n\n 2 | \n\n -2 | \n
| \n Total | \n\n 29 | \n\n -28 | \n
Sensitivity to a change of percentage in salary growth rates:
| \n In \u20ac million | \n\n 0.25% increase | \n\n 0.25% decrease | \n
|---|---|---|
| \n Eurozone | \n\n 2 | \n\n -2 | \n
| \n United Kingdom | \n\n 0 | \n\n 0 | \n
| \n United States | \n\n 0 | \n\n 0 | \n
| \n Others | \n\n 0 | \n\n 0 | \n
| \n Total | \n\n 2 | \n\n -2 | \n
Sensitivity to a change of one year on mortality tables \u2013 The table shows impacts when the age of all beneficiaries increases or decreases by one year:
| \n In \u20ac million | \n\n Age correction | \n\n Age correction | \n
|---|---|---|
| \n Eurozone | \n\n -49 | \n\n 50 | \n
| \n United Kingdom | \n\n -6 | \n\n 6 | \n
| \n United States | \n\n -5 | \n\n 5 | \n
| \n Others | \n\n -3 | \n\n 3 | \n
| \n Total | \n\n -63 | \n\n 64 | \n
NOTE F30
Employee Benefits
fAccounting policy
General
The Group\u2019s employees are offered various post-employment benefits, other long-term employee benefits, and termination benefits because of legislation applicable in certain countries, and contractual agreements entered into by the Group with its employees or constructive obligations.
The post-employment benefits are classified as defined contribution or defined benefit plans.
Defined contribution plans
Defined contribution plans involve the payment of fixed contributions to a separate entity, and release the employer from any subsequent obligation, as this separate entity is solely responsible for paying the amounts due to the employee. The expense is recognized when an employee has rendered services to the Group during the period.
Defined benefit plans
Defined benefit plans concern all plans other than defined contribution plans, and include:
\u2022post-employment benefits: pension plans, other post-employment obligations and supplemental benefits such as post-employment medical plans.
Considering projected final salaries on an individual basis, post-employment benefits are measured by applying a method (projected unit credit method) using assumptions involving discount rate, life expectancy, turnover, wages, annuity revaluation and medical cost inflation. The assumptions specific to each plan consider the local economic and demographic contexts.
The discount rates are interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related pension obligation.
The amount recognized under post-employment obligations corresponds to the difference between the present value of future obligations and the fair value of the plan assets funding the plan, if any. If this calculation gives rise to a deficit, an obligation is recognized in liabilities. Otherwise, a net asset limited to the lower of the surplus in the defined benefit plan and the present value of any future plan refunds or any reduction in future contributions to the plan is recognized. Therefore, the amount at which such an asset is recognized in the statement of financial position may be subject to a ceiling.
The defined benefit cost consists of service cost and net interest expense (based on discount rate) on the net liability or asset, both recognized in profit or loss, and remeasurements of the net liability or asset, recognized in other comprehensive income.
Service cost consists of current service cost, past service cost resulting from plan amendments or curtailments and settlement gains or losses.
The interest expenses arising from the reverse discounting of the benefit obligations, the financial income on plan assets (determined by multiplying the fair value of the plan assets by the discount rate) as well as interest on the effect of the asset ceiling are recognized on a net basis in the net financial charges (cost of discounting of provisions).
Remeasurements of the net liability or asset consist of:
\u2022actuarial gains and losses on the benefit obligations arising from experience adjustments and/or changes in actuarial assumptions (including the effect of changes in the discount rate) recognized in other comprehensive income;
\u2022changes as a consequence of plan amendments, recognized in profit or loss.
\u2022the return on plan assets (excluding amounts in net interest) and changes in the limitation of the net asset recognized.
Other long-term employee and termination benefits
\u2022Other long-term employee benefits related to long service benefits granted to employees according to their seniority in the Group. Termination benefits include early pension plans. Other long-term employee and termination benefits are accounted for in the same way as post-employment benefits but remeasurements are fully recognized in the net financial charges during the period in which they occur.
\u2022The actuarial calculations of the main post-employment obligations and other long-term benefits are performed by independent actuaries.
Other long-term employee and termination benefits
\u2022Other long-term employee benefits related to long service benefits granted to employees according to their seniority in the Group. Termination benefits include early pension plans. Other long-term employee and termination benefits are accounted for in the same way as post-employment benefits but remeasurements are fully recognized in the net financial charges during the period in which they occur.
\u2022The actuarial calculations of the main post-employment obligations and other long-term benefits are performed by independent actuaries.
NOTE F31
Provisions
fAccounting policy
General
Provisions are recognized when (a) the Group has a present obligation (legal or constructive) as a result of a past event, (b) it is probable that the Group will be required to settle the obligation, and (c) a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount is the present value of expenditures required to settle the obligation. Impacts of changes in discount rates are generally recognized in the financial result.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received when the Group settles the obligation.
Restructurings
A restructuring provision is recognized when the Group has developed a detailed formal plan for the restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring, which are those amounts that are both necessarily entailed by the restructuring and not associated with the ongoing activities of the entity.
Environmental remediation costs
Environmental liabilities are mainly related to non-ongoing activities (shut-down sites, discontinued activities or divested activities where Solvay maintains certain commitments) and, to a lower extent, to ongoing activities (see comments below).
An environmental provision is recognized, in accordance with IAS 37, when there is a current legal or constructive obligation resulting from past events which will result in a probable outflow of resources (expenses / cash outs) to settle it and for which a reliable estimate of such outflows and timing can be made.
The environmental expenses encompass, but are not limited to, the following key matters:
\u2022Sampling and analytical costs for soil and ground water monitoring
\u2022Cost related to dismantling when required to meet a remediation or permit obligation
\u2022Asbestos removal when obligated by regulation
\u2022Environmental investigations and studies (Risk Assessments, Phase I and II soil and groundwater)
The closing amount of the environmental provisions is based on the net present value of the future cash flows needed, for current and future years, to settle remediation obligations. Forecast expenditures are based on external consultant estimates, where appropriate and possible. Future expenditures are forecast and revised biannually and validated quarterly by Solvay finance and suitably qualified industrial experts led by the Group Environmental Rehabilitation Director and benefit from inputs of legal department staff for the evolution of Environmental Regulations.
In the absence of probable obligations, a contingent liability may be disclosed to represent the future possible liability. In some cases, contingent liabilities cannot be quantified. See Note F36 Contingent liabilities and financial guarantees.
| \n In \u20ac million | \n\n Restructuring | \n\n Environment | \n\n Litigation | \n\n Other | \n\n Total | \n
|---|---|---|---|---|---|
| \n December 31, 2023 | \n\n 83 | \n\n 506 | \n\n 61 | \n\n 202 | \n\n 852 | \n
| \n Additions | \n\n 123 | \n\n 97 | \n\n 14 | \n\n 80 | \n\n 314 | \n
| \n Reversals of unused amounts | \n\n -34 | \n\n -11 | \n\n -8 | \n\n -26 | \n\n -79 | \n
| \n Uses | \n\n -73 | \n\n -66 | \n\n -8 | \n\n -52 | \n\n -199 | \n
| \n Increase/decrease through discounting | \n\n 0 | \n\n -6 | \n\n 1 | \n\n 0 | \n\n -6 | \n
| \n Remeasurements | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Currency translation differences | \n\n 0 | \n\n -9 | \n\n -2 | \n\n 1 | \n\n -10 | \n
| \n Acquisitions and changes in consolidation scope | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Disposals | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Transfer to liabilities associated with assets held for sale | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Other | \n\n 0 | \n\n 0 | \n\n -3 | \n\n 1 | \n\n -2 | \n
| \n December 31, 2024 | \n\n 99 | \n\n 511 | \n\n 55 | \n\n 205 | \n\n 871 | \n
| \n Of which current provisions | \n\n 67 | \n\n 70 | \n\n 29 | \n\n 149 | \n\n 315 | \n
The provisions increased by \u20ac19 million in 2024, of which an increase of \u20ac16 million for Restructuring and \u20ac5 million for Environment partially offset by \u20ac(2) million for litigation and other provisions.
See below for more details on the recognition and additions to the provisions.
The movements in Other provisions mainly relate to post-closing adjustments resulting from M&A warranties including indemnities for environmental remediation on sites subject to disinvestment.
Management expects provisions (other than employee benefits) to be used (cash outlays) as follows:
| \n In \u20ac million | \n\n up to | \n\n between | \n\n beyond | \n\n Total | \n
|---|---|---|---|---|
| \n Total provisions for environment | \n\n 243 | \n\n 71 | \n\n 197 | \n\n 511 | \n
| \n Total provisions for litigation and other | \n\n 235 | \n\n 25 | \n\n 0 | \n\n 260 | \n
| \n Total provisions for restructuring | \n\n 99 | \n\n \n | \n\n \n | \n\n 99 | \n
| \n December 31, 2024 | \n\n 578 | \n\n 96 | \n\n 197 | \n\n 871 | \n
In 2024, these provisions amount to \u20ac99 million, compared with \u20ac83 million at the end of 2023.
The provisions at the end of 2024 mainly relate to the restructuring charges for the simplification of all support functions in the frame of the Group\u2019s simplification and transformation program, including the strategic transformation measures, site closures, and the exit from the Transition Services Agreement (TSA). According to the TSA, Solvay will be compensated by Syensqo for restructuring costs currently estimated at \u20ac22 million (\u20ac19 million in Other Receivables, and \u20ac3 million in Loans and Other Assets).
These provisions amount to \u20ac511 million at the end of 2024, compared with \u20ac506 million at the end of 2023, and pertain to:
hmines and drilling operations to the extent that legislation and/or operating permits in relation to quarries, mines and drilling operations contain requirements to remedy or to pay compensation to third parties. Those provisions amount to \u20ac148 million at the end of 2024 and most of these, based on local expert advice, can be expected to be used within the 20-year horizon.
hlime dikes (settling ponds related mainly to soda ash plants), landfills at sites and third-party landfills sites (linked to several industrial activities). These provisions have a horizon of 1 to 20 years.
hvarious types of pollution (organic, inorganic) coming from miscellaneous historical chemical productions; these provisions mainly cover discontinued activities or closed plants. Most of these provisions have a horizon of 1 to 20 years.
The variation of environmental provisions was also impacted by the higher discount rate reducing the present value of the overall liability by \u20ac (25) million. This effect, combined with the unwinding of the opening liabilities for \u20ac19 million resulted in a net decrease of \u20ac(6) million related to discounting. The estimated amounts are discounted based on the probable date of settlement and are periodically adjusted to reflect the passage of time.
The breakdown of the environmental provisions and related uses for the main countries/regions is as follows:
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|---|
| \n Provisions | \n\n In % | \n\n Provisions ongoing activities | \n\n Use of provisions | \n\n Provisions | \n\n In % | \n\n Provisions ongoing activities | \n\n Use of provisions | \n|
| \n France | \n\n 154 | \n\n 30% | \n\n 0 | \n\n -26 | \n\n 147 | \n\n 29% | \n\n 0 | \n\n -21 | \n
| \n Germany | \n\n 135 | \n\n 26% | \n\n 46 | \n\n -12 | \n\n 115 | \n\n 23% | \n\n 30 | \n\n -4 | \n
| \n Rest of Europe | \n\n 167 | \n\n 33% | \n\n 6 | \n\n -18 | \n\n 170 | \n\n 34% | \n\n 6 | \n\n -17 | \n
| \n North America | \n\n 4 | \n\n 1% | \n\n 0 | \n\n -1 | \n\n 5 | \n\n 1% | \n\n 0 | \n\n -23 | \n
| \n Rest of the world | \n\n 51 | \n\n 10% | \n\n 1 | \n\n -9 | \n\n 69 | \n\n 13% | \n\n 1 | \n\n -10 | \n
| \n Total | \n\n 511 | \n\n 100% | \n\n 53 | \n\n -66 | \n\n 506 | \n\n 100% | \n\n 37 | \n\n -75 | \n
The disclosure of comparatives related to environmental provisions was restated to follow the classification of some provisions as resulting from ongoing activities.
Provisions for litigation refer to indirect tax and legal exposures. They amount to \u20ac55 million in 2024 (\u20ac61 million in 2023). The balance at the end of 2024 relates to indirect tax risks (\u20ac13 million) and legal claims (\u20ac42 million).
Other provisions amount to \u20ac205 million in 2024 (\u20ac202 million in 2023) including \u20ac72 million linked to Dombasle Energie (see the part related to provisions in Main Events). They relate to various risks, of which the main risks concern (i) the shutdown or disposal of activities and (ii) risk related to the execution of contracts or termination. Other provisions also include a provision for litigation post M&A deal for which an indemnification asset for \u20ac24 million (In Loans and other assets) has been recognized as foreseen in the Separation Agreement.
NOTE F36
Contingent liabilities and financial guarantees
fAccounting policy
A contingent liability is:
(a)a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group; or
(b) a present obligation that arises from past events but is not recognized because:
(i)it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or
(ii)the amount of the obligation cannot be measured with sufficient reliability
Contingent liabilities are not recognized in the consolidated financial statements, except if they arise from a business combination. They are disclosed unless the possibility of an outflow of economic benefits is remote.
Financial guarantees are contracts that require the Group to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.
To avoid double counting, only guarantees in excess of liabilities recognized or disclosures made elsewhere in the Group's consolidated financial statements are disclosed in this note. Regarding financial guarantees, all financial guarantees of the Group are presented in this note.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Guarantees for pensions | \n\n 58 | \n\n 55 | \n
| \n Environmental contingent liabilities | \n\n 210 | \n\n 271 | \n
| \n Guarantees on Cytec 2025 Bonds(1) | \n\n 157 | \n\n 151 | \n
| \n Contingent liabilities | \n\n 425 | \n\n 477 | \n
(1)Guarantee on Cytec 2025 Bonds \u2013 see the comment on financial guarantees below
Generally, in line with good business practice, we are not reporting any pending or threatened proceeding, which has not matured, and where the probability of existing or future exposure is unlikely or uncertain, where financial impact is not estimable and for which we are not able to quantify contingent liabilities.
The contingent liabilities of \u20ac210 million mentioned above relate to environmental remediation matters for possible obligations arising from past events. The existence of these obligations will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the Group's control. While the nominal cashflows can be estimated with sufficient reliability, there remains a degree of uncertainty.
The Group has also present obligations that cannot be reliably estimated and are disclosed thereafter :
hIn Pont de Claix site, in France, Solvay has been prescribed to remedy several historical impacts in the subsoil and is proceeding accordingly. Related amounts have been provisioned (see note F31 - Environmental provisions). In a certain number of locations, impacts cannot be characterized nor treated due to the presence of several units in operations by third parties. The corresponding estimate cannot therefore be available. Moreover, in Pont de Claix, Solvay is closely monitoring the evolution of the situation with Vencorex since this company went into Redressement Judiciaire in September 2024. The business operated by Vencorex in Pont de Claix was acquired from Solvay in 2008. However, Solvay has retained energy production units, ownership of the subsoil and is implementing certain remediation activities. Those operations may be impacted by the current situation.
hSalindres site, France: Following the announcement of the shutdown of the site, Solvay has six months to prepare a detailed study of remediation to be undertaken for the attention of the French regional environmental agency (DREAL). Some of the remediations have already been provisioned (see note F31 - Environmental provisions) as their costs could be reliably estimated. However, some areas of the site will require further analyses to determine if additional remediations are needed and their related cost.
hThe Group has also obligations related to its Soda Ash facilities, specifically for the closure and remediation of major basins and dykes in Europe and the US, for which it is not yet possible to estimate the impact of the prescriptions in the future.
Rosignano site, Italy: The Public Prosecutor\u2019s Office of the Criminal Court of Livorno, Italy, initiated preliminary criminal investigations in 2019 regarding the alleged contamination of certain water tables outside our site and in our former landfill of Rosignano, Italy site. These procedures are still ongoing, and Solvay is working closely with Authorities to resolve these cases.
In Bulgaria, Solvay Sodi AD, a subsidiary of Solvay, is subject to certain state-imposed obligations for emergency oil stocks (reserves) for 2021 through 2023, for which Solvay was not able to comply. As a result, the Bulgarian authority imposed the fines for 2021 and 2022 on Solvay Sodi AD of approximately \u20ac15 million for our share of the penalties which were fully provisioned. For 2023, the order has been suspended, and no fine has been imposed and no provision has been recognized.\u00a0 Should this suspension be lifted, an additional penalty of \u20ac9 million may be imposed on Solvay Sodi AD. Solvay Sodi AD has brought a lawsuit to contest these fines and is seeking relief through national authorities pleading that the existing Bulgarian emergency stock system is not compatible with the EU law and, in its current form, the obligations for emergency oil reserves should apply only to companies trading in crude oil and liquid fuels. Starting from July 2024, Solvay Sodi AD complies with the requirements regarding emergency oil stocks.
The 3.95% Senior Notes due 2025 issued by Cytec Industries Inc. (the \u201cCytec 2025 Bonds\u201d) were transferred to Syensqo SA/NV with Cytec Industries Inc. as of December 8, 2023, for US$163.5 million (equivalent to \u20ac157.4 million euros at December 31, 2024). A counter guarantee was issued from Syensqo SA/NV in favor of Solvay SA/NV as Solvay SA/NV remained the original guarantor. As Syensqo SA/NV, the ultimate parent of Cytec Industries, Inc. is an investment grade company and due to the short period of time before the bonds are due to be repaid, the Group deemed risk of default to be remote, and as such no provision was recorded.
Syensqo SA/NV redeemed these Senior Notes in February 2025. The guarantee was therefore released at that time.
The guarantee for pensions is related to the main UK Pension Funds (\u20ac58 million) \u2013 see note F32. It corresponds to the recognized plan asset surplus on December\u00a031, 2024, or the amount by which the guarantee exceeds the recognized pension liability (on December 31, 2023). This guarantee applies to the pension liability measured in accordance with the local UK regulatory basis (prudential basis) with an allocation for market risk, which result in a higher measurement value compared to the IAS 19 requirements. The probability of the guarantees being called is considered to be remote.
Environmental remediation costs
Environmental liabilities are mainly related to non-ongoing activities (shut-down sites, discontinued activities or divested activities where Solvay maintains certain commitments) and, to a lower extent, to ongoing activities (see comments below).
An environmental provision is recognized, in accordance with IAS 37, when there is a current legal or constructive obligation resulting from past events which will result in a probable outflow of resources (expenses / cash outs) to settle it and for which a reliable estimate of such outflows and timing can be made.
The environmental expenses encompass, but are not limited to, the following key matters:
\u2022Sampling and analytical costs for soil and ground water monitoring
\u2022Cost related to dismantling when required to meet a remediation or permit obligation
\u2022Asbestos removal when obligated by regulation
\u2022Environmental investigations and studies (Risk Assessments, Phase I and II soil and groundwater)
The closing amount of the environmental provisions is based on the net present value of the future cash flows needed, for current and future years, to settle remediation obligations. Forecast expenditures are based on external consultant estimates, where appropriate and possible. Future expenditures are forecast and revised biannually and validated quarterly by Solvay finance and suitably qualified industrial experts led by the Group Environmental Rehabilitation Director and benefit from inputs of legal department staff for the evolution of Environmental Regulations.
In the absence of probable obligations, a contingent liability may be disclosed to represent the future possible liability. In some cases, contingent liabilities cannot be quantified. See Note F36 Contingent liabilities and financial guarantees.
NOTE F32
Financial instruments and financial risk management
fAccounting policy
General
Financial assets and liabilities are recognized when, and only when Solvay becomes a party to the contractual provisions of the instrument.
Amortized cost is the amount at which the financial asset or financial liability is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity amount and, for financial assets, adjusted for any loss allowance. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial asset or financial liability to the gross carrying amount of a financial asset or to the amortized cost of a financial liability. When calculating the effective interest rate, the Group estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses. The calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs, and all other premiums or discounts.
The following table presents the financial assets and liabilities as current or non-current according to their classification under IFRS 9.
| \n In \u20ac million | \n\n Classification | \n\n 31 December 2024 | \n\n 31 December 2023 | \n
|---|---|---|---|
| \n Carrying amount | \n\n Carrying amount | \n||
| \n Non-current assets - Financial instruments | \n\n \n | \n\n 194 | \n\n 234 | \n
| \n Available-for-sale financial assets | \n\n \n | \n\n \n | \n\n \n | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n Financial assets measured at fair value through other comprehensive income | \n\n 8 | \n\n 1 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n Financial assets measured at fair value through profit or loss | \n\n 55 | \n\n 87 | \n
| \n Loans and other non-current assets (excluding pension fund surpluses and long-term inventory balance) | \n\n Financial assets measured at amortized cost | \n\n 118 | \n\n 136 | \n
| \n Others | \n\n \n | \n\n 118 | \n\n 136 | \n
| \n Financial instruments - Operational | \n\n \n | \n\n 13 | \n\n 10 | \n
| \n Held for trading | \n\n Held for trading | \n\n 0 | \n\n 5 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship | \n\n Cash-flow hedge | \n\n 13 | \n\n 5 | \n
| \n Current assets - Financial instruments | \n\n \n | \n\n 1,448 | \n\n 1,598 | \n
| \n Trade receivables | \n\n Financial assets measured at amortized cost | \n\n 826 | \n\n 840 | \n
| \n Other financial instruments | \n\n \n | \n\n 16 | \n\n 118 | \n
| \n Other marketable securities >3 months | \n\n Financial assets measured at amortized cost | \n\n 4 | \n\n 50 | \n
| \n Currency swaps | \n\n Held for trading | \n\n 1 | \n\n 2 | \n
| \n Other current financial assets | \n\n Financial assets measured at amortized cost | \n\n 11 | \n\n 66 | \n
| \n Financial instruments - Operational | \n\n \n | \n\n 67 | \n\n 56 | \n
| \n Held for trading | \n\n Held for trading | \n\n 2 | \n\n 11 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship | \n\n Cash-flow hedge | \n\n 64 | \n\n 45 | \n
| \n Cash and cash equivalents | \n\n Financial assets measured at amortized cost | \n\n 539 | \n\n 584 | \n
| \n Total assets - Financial instruments | \n\n \n | \n\n 1,642 | \n\n 1,833 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current liabilities - Financial instruments | \n\n \n | \n\n 2,017 | \n\n 2,051 | \n
| \n Financial debt | \n\n \n | \n\n 1,983 | \n\n 1,981 | \n
| \n Bonds | \n\n Financial liabilities measured at amortized cost | \n\n 1,492 | \n\n 0 | \n
| \n Other non-current debts | \n\n Financial liabilities measured at amortized cost | \n\n 253 | \n\n 1,735 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship | \n\n Cash-flow hedge | \n\n 2 | \n\n 2 | \n
| \n Lease liabilities IFRS 16 - Non-current portion | \n\n Lease liabilities measured at amortized cost | \n\n 236 | \n\n 243 | \n
| \n Other liabilities | \n\n Financial liabilities measured at amortized cost | \n\n 21 | \n\n 39 | \n
| \n Financial instruments - Operational | \n\n \n | \n\n 13 | \n\n 32 | \n
| \n Held for trading | \n\n Held for trading | \n\n 1 | \n\n 17 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship | \n\n Cash-flow hedge | \n\n 11 | \n\n 15 | \n
| \n Current liabilities - Financial instruments | \n\n \n | \n\n 1,170 | \n\n 1,344 | \n
| \n Financial debt | \n\n \n | \n\n 155 | \n\n 211 | \n
| \n Short-term financial debt | \n\n Financial liabilities measured at amortized cost | \n\n 83 | \n\n 88 | \n
| \n Currency swaps | \n\n Held for trading | \n\n 2 | \n\n 1 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship | \n\n Cash-flow hedge | \n\n \n | \n\n 59 | \n
| \n Lease liabilities IFRS 16 - Current portion | \n\n Lease liabilities measured at amortized cost | \n\n 70 | \n\n 63 | \n
| \n Trade payables | \n\n Financial liabilities measured at amortized cost | \n\n 810 | \n\n 850 | \n
| \n Financial instruments - Operational | \n\n \n | \n\n 98 | \n\n 108 | \n
| \n Held for trading | \n\n Held for trading | \n\n 24 | \n\n 19 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship | \n\n Cash-flow hedge | \n\n 74 | \n\n 88 | \n
| \n Dividends payables | \n\n Financial liabilities measured at amortized cost | \n\n 107 | \n\n 175 | \n
| \n Total liabilities - Financial instruments | \n\n \n | \n\n 3,187 | \n\n 3,395 | \n
In 2024 and 2023, long-term CO2 inventory balances reported are not financial assets and hence are not included in the table above. They are presented as other non-current assets.
The following table gives an overview of the carrying amount of all financial instruments by category as defined by IFRS 9.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Carrying amount | \n\n Carrying amount | \n|
| \n Fair value through profit or loss | \n\n 59 | \n\n 105 | \n
| \n Held for trading (financial instruments - operational - see note F26) | \n\n 2 | \n\n 16 | \n
| \n Held for trading (other financial instruments - see note F33, table Changes in financial debt) | \n\n 1 | \n\n 2 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n 55 | \n\n 87 | \n
| \n Financial assets measured at amortized cost | \n\n 1,497 | \n\n 1,677 | \n
| \n Financial assets measured at amortized cost (including cash and cash equivalents, trade receivables, loans and other current/non-current assets except pension fund surpluses and long-term inventory balance) | \n\n 1,497 | \n\n 1,677 | \n
| \n Financial assets measured at fair value through other comprehensive income | \n\n 85 | \n\n 51 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship (see note F26) | \n\n 78 | \n\n 50 | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n 8 | \n\n 1 | \n
| \n Total financial assets | \n\n 1,642 | \n\n 1,833 | \n
| \n \n | \n\n \n | \n\n \n | \n
| \n Fair value through profit or loss | \n\n -27 | \n\n -37 | \n
| \n Held for trading (financial instruments - operational - see note F34) | \n\n -26 | \n\n -36 | \n
| \n Held for trading (financial debt - see note F33, table Changes in financial debt) | \n\n -2 | \n\n -1 | \n
| \n Financial liabilities measured at amortized cost | \n\n -2,766 | \n\n -2,887 | \n
| \n Financial liabilities measured at amortized cost (excluding dividends payable and IFRS 16 lease liabilities) | \n\n -2,659 | \n\n -2,712 | \n
| \n Dividends payables | \n\n -107 | \n\n -175 | \n
| \n Lease liabilities measured at amortized cost | \n\n -306 | \n\n -307 | \n
| \n Lease liabilities IFRS16 measured at amortized cost | \n\n -306 | \n\n -307 | \n
| \n Financial liabilities measured at fair value through other comprehensive income | \n\n -88 | \n\n -165 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship (see note F34) | \n\n -88 | \n\n -165 | \n
| \n Total financial and lease liabilities | \n\n -3,187 | \n\n -3,395 | \n
The category \u201cHeld for trading\u201d contains derivative financial instruments that are used for management of foreign currency risk, utility and CO2 emission rights price risks, index and shares. Contracts which have been documented as hedging instruments (hedge accounting under IFRS 9 Financial Instruments) or which meet the exemption criteria for own use are not included in the category \u201cHeld for trading.\u201d
At the end of 2024, \u20ac55 million of instruments at fair value through profit or loss relate to equity instruments related to Syensqo Group.
Valuation techniques and assumptions used for measuring fair value.
fAccounting policy
Quoted market prices are available for financial assets and financial liabilities with standard terms and conditions that are traded on active markets. The fair values of derivative financial instruments are equal to their quoted prices, if available. In case such quoted prices are not available, the fair value of the financial instruments is determined based on a discounted cash flow analysis using the applicable yield curve derived from quoted interest rates matching maturities of the contracts for non-optional derivatives. Optional derivatives are fair valued based on option pricing models, taking into account the present value of probability weighted expected future payoffs, using market reference formulas.
The fair values of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||
|---|---|---|---|---|
| \n Carrying amount | \n\n Fair value | \n\n Carrying amount | \n\n Fair value | \n|
| \n Non-current assets - Financial instruments | \n\n 118 | \n\n 118 | \n\n 136 | \n\n 136 | \n
| \n Loans and other non-current assets (except pension fund surpluses and long-term inventory balance) | \n\n 118 | \n\n 118 | \n\n 136 | \n\n 136 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current liabilities - Financial instruments | \n\n -1,766 | \n\n -1,814 | \n\n -1,774 | \n\n -1,774 | \n
| \n Bonds | \n\n -1,492 | \n\n -1,540 | \n\n 0 | \n\n 0 | \n
| \n Other non-current debts | \n\n -253 | \n\n -253 | \n\n -1,735 | \n\n -1,735 | \n
| \n Other liabilities | \n\n -21 | \n\n -21 | \n\n -39 | \n\n -39 | \n
The carrying amounts of current financial assets and liabilities are estimated to reasonably approximate their fair values, due to the short term to maturity.
The table \u201cFinancial instruments measured at fair value in the consolidated statement of financial position\u201d provides an analysis of financial instruments that, after their initial recognition, are measured at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable. Financial instruments classified as held for trading and as hedging instruments in cash flow hedges are mainly grouped into Levels 1 and 2. They are fair valued based on forward pricing and swap models using present value calculations. The models incorporate various inputs including foreign exchange spot and interest rates of the respective currencies, currency basis spreads between the respective currencies, interest rate curves and forward rate curves of the underlying commodity. The equity instruments measured at fair value through OCI and through profit and loss are presented within Level 1 and 3. The fair value of the instruments presented under Level 3 is measured based on the guidelines recommended by The International Private Equity and Venture Capital Valuation (IPEV).
In accordance with the Group internal rules, the responsibility for measuring the fair value level resides with (a) the Treasury department for the non-utility derivative financial instruments, and the non-derivative financial liabilities, (b) the Sustainable Development and Energy department for the utility derivative financial instruments and (c) the Finance department for non-derivative financial assets.
The Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. During the year, no such transfers have occurred.
| \n In \u20ac million | \n\n December 31, 2024 | \n|||
|---|---|---|---|---|
| \n Level 1 | \n\n Level 2 | \n\n Level 3 | \n\n Total | \n|
| \n Held for trading | \n\n 0 | \n\n 4 | \n\n 0 | \n\n 4 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Shares | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022Index | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n 55 | \n\n \n | \n\n 0 | \n\n 55 | \n
| \n \u2022Shares | \n\n 55 | \n\n \n | \n\n \n | \n\n 55 | \n
| \n Cash flow hedges | \n\n 0 | \n\n 77 | \n\n 0 | \n\n 77 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n \n | \n\n 53 | \n\n 0 | \n\n 53 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 23 | \n\n 0 | \n\n 23 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n 0 | \n\n 0 | \n\n 8 | \n\n 8 | \n
| \n \u2022Shares | \n\n \n | \n\n \n | \n\n 8 | \n\n 8 | \n
| \n Total (assets) | \n\n 55 | \n\n 81 | \n\n 8 | \n\n 144 | \n
| \n \n | \n||||
| \n Held for trading | \n\n 0 | \n\n -27 | \n\n 0 | \n\n -27 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -4 | \n\n 0 | \n\n -4 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n -18 | \n\n 0 | \n\n -18 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Index | \n\n 0 | \n\n -3 | \n\n 0 | \n\n -3 | \n
| \n Cash flow hedges | \n\n 0 | \n\n -87 | \n\n 0 | \n\n -87 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -7 | \n\n 0 | \n\n -7 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n \u2022Utility risk | \n\n \n | \n\n -47 | \n\n 0 | \n\n -47 | \n
| \n \u2022CO2 risk | \n\n \n | \n\n -32 | \n\n 0 | \n\n -32 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total (liabilities) | \n\n 0 | \n\n -115 | \n\n 0 | \n\n -115 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n|||
|---|---|---|---|---|
| \n Level 1 | \n\n Level 2 | \n\n Level 3 | \n\n Total | \n|
| \n Held for trading | \n\n 0 | \n\n 17 | \n\n 0 | \n\n 18 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 3 | \n\n 0 | \n\n 3 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 4 | \n\n 0 | \n\n 5 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Shares | \n\n \n | \n\n 8 | \n\n 0 | \n\n 8 | \n
| \n \u2022Index | \n\n 0 | \n\n 2 | \n\n 0 | \n\n 2 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n 87 | \n\n 0 | \n\n 0 | \n\n 87 | \n
| \n \u2022Shares | \n\n 87 | \n\n \n | \n\n \n | \n\n 87 | \n
| \n Cash flow hedges | \n\n 0 | \n\n 50 | \n\n 0 | \n\n 50 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 2 | \n\n 0 | \n\n 2 | \n
| \n \u2022 Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 47 | \n\n 0 | \n\n 48 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n 0 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n Total (assets) | \n\n 87 | \n\n 67 | \n\n 1 | \n\n 156 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Held for trading | \n\n 0 | \n\n -37 | \n\n 0 | \n\n -37 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -1 | \n\n 0 | \n\n -1 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n -8 | \n\n 0 | \n\n -8 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n -26 | \n\n 0 | \n\n -26 | \n
| \n \u2022 Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Index | \n\n 0 | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n Cash flow hedges | \n\n 0 | \n\n -166 | \n\n 0 | \n\n -166 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -1 | \n\n 0 | \n\n -1 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n -61 | \n\n 0 | \n\n -61 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n -59 | \n\n 0 | \n\n -59 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n -44 | \n\n 0 | \n\n -44 | \n
| \n \u2022Shares | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n Total (liabilities) | \n\n 0 | \n\n -202 | \n\n 0 | \n\n -202 | \n
The fair value of the financial instruments to manage the utility risk reduced in 2024. This is mainly explained by the fact that Solvay had decided to concentrate on its own internal consumption only and the price increase of gas and electricity in comparison to 2023.
Reconciliation of level 3 fair value measurements of financial assets and liabilities.
| \n In \u20ac million | \n\n December 31, 2024 | \n||
|---|---|---|---|
| \n At fair value through profit or loss | \n\n At fair value through other comprehensive income | \n\n Total | \n|
| \n Equity instruments | \n\n Equity instruments | \n||
| \n Opening balance at January 1 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n Total gains or losses | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Recognized in profit or loss | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Recognized in other comprehensive income | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Acquisitions | \n\n \n | \n\n 7 | \n\n 7 | \n
| \n Capital decreases | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Partial Demerger | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Transfers out of level 3 | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Derivative instruments in designated hedge accounting relationships | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Transfer to assets held for sale | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Closing balance at December 31 | \n\n 0 | \n\n 8 | \n\n 8 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n||
|---|---|---|---|
| \n At fair value through profit or loss | \n\n At fair value through other comprehensive income | \n\n Total | \n|
| \n Equity instruments | \n\n Equity instruments | \n||
| \n Opening balance at January 1 | \n\n 47 | \n\n 24 | \n\n 71 | \n
| \n Total gains or losses | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Recognized in profit or loss | \n\n 2 | \n\n \n | \n\n 2 | \n
| \n Recognized in other comprehensive income | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Acquisitions | \n\n 0 | \n\n 8 | \n\n 8 | \n
| \n Capital decreases | \n\n \n | \n\n -1 | \n\n -1 | \n
| \n Partial Demerger | \n\n -49 | \n\n -30 | \n\n -79 | \n
| \n Closing balance at December 31 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Recognized in the consolidated income statement | \n\n \n | \n\n \n | \n
| \n Recycling from OCI of derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n -7 | \n\n 39 | \n
| \n \u2022Utility risk | \n\n -4 | \n\n -1 | \n
| \n \u2022Interest rate risk | \n\n \n | \n\n \n | \n
| \n Changes in the fair value of financial instruments held for trading | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n \n | \n\n \n | \n
| \n \u2022Utility risk | \n\n -2 | \n\n 86 | \n
| \n \u2022CO2 risk | \n\n \n | \n\n 15 | \n
| \n Recognized in the gross margin | \n\n -14 | \n\n 138 | \n
| \n Recycling from OCI of derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022CO2 risk | \n\n -38 | \n\n \n | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n
| \n Changes in the fair value of financial instruments held for trading | \n\n \n | \n\n \n | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022CO2 risk | \n\n 8 | \n\n 0 | \n
| \n \u2022Shares | \n\n -3 | \n\n 0 | \n
| \n Gains and losses (time value) on derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022CO2 risk | \n\n \n | \n\n \n | \n
| \n Foreign operating exchange gains and losses | \n\n 0 | \n\n 2 | \n
| \n Recognized in other operating gains and losses | \n\n -33 | \n\n 2 | \n
| \n Recycling from OCI of derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n Changes in the fair value of financial instruments held for trading | \n\n \n | \n\n \n | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022 Shares | \n\n 0 | \n\n 0 | \n
| \n Ineffective portion of derivative financial instruments designated in cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n Recognized in results from portfolio management and reassessments | \n\n 0 | \n\n 0 | \n
| \n Net interest expense | \n\n -79 | \n\n -24 | \n
| \n Financial charge on lease liabilities | \n\n -12 | \n\n -11 | \n
| \n Other gains and losses on net indebtedness (excluding gains and losses on items not related to financial instruments) | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n -3 | \n\n 1 | \n
| \n \u2022Interest element of financial instruments | \n\n 1 | \n\n 6 | \n
| \n \u2022Others | \n\n -3 | \n\n -6 | \n
| \n Recognized in charges on net indebtedness(*) | \n\n -97 | \n\n -33 | \n
| \n Dividends from equity instruments measured at fair value through other comprehensive income | \n\n \n | \n\n \n | \n
| \n Capital gain on available-for-sale investment posted directly to the income statement | \n\n \n | \n\n \n | \n
| \n Recycling from equity of unrecognized gain and losses related to disposed available-for-sale financial assets(*) | \n\n 0 | \n\n 0 | \n
| \n Recycling from equity of impairment losses on available-for-sale financial assets(*) | \n\n 0 | \n\n 0 | \n
| \n Total recognized in the consolidated income statement | \n\n -144 | \n\n 107 | \n
(*)The note F6 Net Financial Charges shows an amount of \u20ac(76) million for 2024 (\u20ac(41) million for 2023) reported under \u201cNet cost of borrowing\u201d. This amount includes \u20ac(3) million for 2024 (\u20ac(6) million for 2023) of financial expenses not related to financial instruments that are excluded in this table from the line item \u201cRecognized in charges on net indebtedness.\u201d
The loss on highly probable sales in foreign currency recognized in gross margin for \u20ac(7) million is mainly explained by the hedging of the US$ currency and the loss recognized on utility instruments for \u20ac(4) million.
The change in fair value of financial instruments held for trading recognized in gross margin is explained by:
ha gain of \u20ac86 million in 2023, due to the price increase of gas and electricity;
In 2024, the loss of \u20ac(33) million recognized in other operating gains and losses is mainly explained by:
hA gain of \u20ac8 million (a gain of \u20ac15 million in 2023) mainly due to the price variation of CO2.
hThe loss of \u20ac(38) million recognized in other operating gains and losses is explained by the discontinuance of cash flow hedge relationship on CO2 in 2024. Refer also to F32D Other market risks.
In 2024, in the caption other gains and losses on net indebtedness, the foreign exchange income decreased by \u20ac(4) million in comparison to 2023. The gain of \u20ac1\u00a0million (\u20ac6 million for 2023) is related to the interest element of financial derivatives (forward points). The other costs decreased by \u20ac(4) million in 2024 in comparison to 2023 due to one off costs incurred in the frame of the separation plan in 2023.
Net interest expense of \u20ac79 million includes \u20ac5 million of interest rate risk recycled from OCI.
| \n In \u20ac million | \n\n Cash flow hedges | \n|||||||
|---|---|---|---|---|---|---|---|---|
| \n Foreign currency risk | \n\n Interest rate risk | \n\n Commodity risk | \n\n Total | \n|||||
| \n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n|
| \n Balance at January 1 | \n\n 1 | \n\n 13 | \n\n -61 | \n\n 0 | \n\n -87 | \n\n 67 | \n\n -148 | \n\n 81 | \n
| \n Recycling from other comprehensive income of derivative financial instruments designated in a cash flow hedge relationship | \n\n 7 | \n\n -41 | \n\n 5 | \n\n 9 | \n\n 43 | \n\n 13 | \n\n 55 | \n\n -20 | \n
| \n Effective portion of changes in fair value of cash flow hedge | \n\n -13 | \n\n 29 | \n\n 23 | \n\n -70 | \n\n -15 | \n\n -167 | \n\n -6 | \n\n -209 | \n
| \n Balance at December 31 | \n\n -5 | \n\n 1 | \n\n -33 | \n\n -61 | \n\n -60 | \n\n -87 | \n\n -99 | \n\n -148 | \n
Held for trading
The transactional risk is managed either by spot or forward contracts. Unless documented as hedging instruments (see above), derivative financial instruments are classified as held for trading.
In 2024, the notional amounts transacted to manage the transactional risk are:
ha long position of \u20ac368 million (compared to \u20ac271 million in 2023);
ha short position of \u20ac(239) million (compared to \u20ac(284) million in 2023);
hin comparison to 2023, the optimization of the cash centralization model led to a net long position increase of \u20ac142 million (mainly Chinese Yuan and US Dollar).
The following table details the notional amounts of the Group\u2019s derivatives contracts outstanding at the end of the period:
| \n In \u20ac million | \n\n Notional amount(1) | \n\n Fair value assets | \n\n Fair value liabilities | \n|||
|---|---|---|---|---|---|---|
| \n December 31 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n
| \n Held for trading long position | \n\n 368 | \n\n 271 | \n\n 1 | \n\n 1 | \n\n -1 | \n\n -1 | \n
| \n Held for trading short position | \n\n -239 | \n\n -284 | \n\n 1 | \n\n 2 | \n\n -3 | \n\n 0 | \n
| \n Total | \n\n 129 | \n\n -13 | \n\n 2 | \n\n 3 | \n\n -4 | \n\n -1 | \n
(1)Long/(short) positions (if the foreign exchange transaction does not involve the functional currency, both notional amounts are considered).
Cash flow hedge
The Group uses derivatives to hedge identified foreign exchange rate risks. It documents those as hedging instruments unless it hedges a recognized financial asset or liability when generally no cash flow hedge relationship is documented. Most hedges are transaction related.
At the end of 2024, the Group had mainly hedged highly probable sales in foreign currencies (short position) in a nominal amount of US$190 million (\u20ac183 million) and PLN55 million (\u20ac13 million). All cash flow hedge contracts that existed at the end of December 2024 will be settled within the next 12 months and will impact profit or loss during that period.
The following table details the notional amounts of Solvay\u2019s derivatives contracts outstanding at the end of the period:
Notional amounts
| \n In \u20ac million | \n\n December 31, 2024 | \n|||||||
|---|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument(1) | \n\n Notional amount of the risk exposure(1) | \n\n Percentage of exposure hedged | \n\n \n | \n\n Average hedge exchange rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Equity | \n\n Assets | \n\n Liabilities | \n||||||
| \n Cash flow hedges - Forecasted sales and purchases(3) | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n EUR/PLN | \n\n -13 | \n\n -20 | \n\n 65% | \n\n (2) | \n\n 4.37 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total EUR | \n\n -13 | \n\n -20 | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n USD/BRL | \n\n -51 | \n\n -85 | \n\n 60% | \n\n (2) | \n\n 5.40 | \n\n -2 | \n\n 0 | \n\n 2 | \n
| \n USD/CNY | \n\n -60 | \n\n -113 | \n\n 53% | \n\n (2) | \n\n 7.00 | \n\n -2 | \n\n 0 | \n\n 2 | \n
| \n USD/EUR | \n\n -42 | \n\n -82 | \n\n 52% | \n\n (2) | \n\n 1.10 | \n\n -2 | \n\n 0 | \n\n 2 | \n
| \n USD/MXN | \n\n -13 | \n\n -18 | \n\n 68% | \n\n (2) | \n\n 19.69 | \n\n -1 | \n\n 0 | \n\n 1 | \n
| \n USD/THB | \n\n -17 | \n\n -35 | \n\n 50% | \n\n (2) | \n\n 34.77 | \n\n 0 | \n\n 1 | \n\n 0 | \n
| \n Total USD | \n\n -183 | \n\n -332 | \n\n \n | \n\n \n | \n\n \n | \n\n -6 | \n\n 1 | \n\n 7 | \n
| \n Total | \n\n -196 | \n\n -352 | \n\n \n | \n\n \n | \n\n \n | \n\n -6 | \n\n 1 | \n\n 7 | \n
(1)Long/(short) positions.
(2)In compliance with Group Treasury Policy the percentage of hedged exposure will reach the progressive minimum compliance level of 60% in 2024.
(3)The hedging instruments are in the line item: \"Other Receivables\" and \"Other Liabilities\" in the statement of financial position.
| \n In \u20ac million | \n\n December 31, 2023 | \n|||||||
|---|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument(1) | \n\n Notional amount of the risk exposure(1) | \n\n Percentage of exposure hedged | \n\n \n | \n\n Average hedge exchange rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Equity | \n\n Assets | \n\n Liabilities | \n||||||
| \n Cash flow hedges - Forecasted sales and purchases(3) | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n||
| \n JPY/EUR | \n\n -1 | \n\n -1 | \n\n 50% | \n\n (2) | \n\n 126.94 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n JPY/USD | \n\n 0 | \n\n -3 | \n\n 4% | \n\n (4) | \n\n 145.33 | \n\n 1 | \n\n 1 | \n\n 0 | \n
| \n Total JPY | \n\n -1 | \n\n -4 | \n\n \n | \n\n \n | \n\n \n | \n\n 1 | \n\n 1 | \n\n 0 | \n
| \n USD/BRL | \n\n -63 | \n\n -106 | \n\n 60% | \n\n (2) | \n\n 4.78 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n USD/CNY | \n\n -68 | \n\n -138 | \n\n 49% | \n\n (2) | \n\n 6.92 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n USD/EUR | \n\n -24 | \n\n -37 | \n\n 66% | \n\n (2) | \n\n 1.13 | \n\n 2 | \n\n 1 | \n\n 1 | \n
| \n USD/MXN | \n\n -11 | \n\n -23 | \n\n 48% | \n\n (2) | \n\n 18.32 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n USD/THB | \n\n -17 | \n\n -39 | \n\n 44% | \n\n (2) | \n\n 33.75 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total USD | \n\n -184 | \n\n -342 | \n\n \n | \n\n \n | \n\n \n | \n\n 3 | \n\n 2 | \n\n 1 | \n
| \n Total | \n\n -185 | \n\n -346 | \n\n \n | \n\n \n | \n\n \n | \n\n 4 | \n\n 2 | \n\n 1 | \n
(1)Long/(short) positions.
(2)In compliance with Group Treasury Policy the percentage of hedged exposure will reach the progressive minimum compliance level of 60% in 2023.
(3)The hedging instruments are recorded in the line item: \"Other Receivables\" and \"Other Liabilities\" in the statement of financial position.
(4)In compliance with Group Treasury Policy the hedging will be stopped in 2024 due to the low materiality exposure.
Hedge relationships are seldom perfect. Therefore, ineffectiveness could arise with the result that changes in the fair value or cash flows of the hedged item that are attributable to a hedged risk and the hedging instrument do not offset within a period. The sources of hedge ineffectiveness that could potentially affect the hedging relationship during its term are listed below:
hA reduction in the amount of the forecast sales resulting in quantity or notional amount differences \u2013 the hedged item and hedging instrument are based on different quantities or notional amounts.
hA significant change in the credit risk of parties.
Timing differences \u2013 the hedged item and hedging instrument occur or are settled at different dates.
In 2024, no hedge ineffectiveness was recognized in the consolidated income statement.
See the Financial risk in the Management of risks section of this annual report for additional information on the interest rate risks management.
hInterest rate risk is managed at Group level.
hThe Group is exposed to interest rate risk because entities in the Group borrow funds at both fixed and floating interest rates. Interest rate risk is managed at Group level by maintaining an appropriate mix between fixed and floating rate borrowings.
Interest rate exposure by currency is summarized below:
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|---|
| \n Currency | \n\n Fixed rate | \n\n Floating rate | \n\n Total | \n\n Fixed rate | \n\n Floating rate | \n\n Total | \n
| \n Financial debt | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n EUR | \n\n -1,721 | \n\n -216 | \n\n -1,937 | \n\n -164 | \n\n -1,840 | \n\n -2,003 | \n
| \n USD | \n\n -146 | \n\n 0 | \n\n -146 | \n\n -137 | \n\n -2 | \n\n -139 | \n
| \n BGN | \n\n -1 | \n\n -21 | \n\n -22 | \n\n -1 | \n\n -1 | \n\n -2 | \n
| \n GBP | \n\n -8 | \n\n 0 | \n\n -8 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n KRW | \n\n -1 | \n\n -3 | \n\n -4 | \n\n -2 | \n\n -10 | \n\n -12 | \n
| \n THB | \n\n -8 | \n\n 0 | \n\n -9 | \n\n -9 | \n\n 0 | \n\n -10 | \n
| \n BRL | \n\n -5 | \n\n -2 | \n\n -7 | \n\n -8 | \n\n -2 | \n\n -10 | \n
| \n Other | \n\n -5 | \n\n -1 | \n\n -5 | \n\n -13 | \n\n -3 | \n\n -16 | \n
| \n Total | \n\n -1,895 | \n\n -243 | \n\n -2,138 | \n\n -333 | \n\n -1,859 | \n\n -2,192 | \n
| \n Cash and cash equivalents | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n EUR | \n\n \n | \n\n 271 | \n\n 271 | \n\n \n | \n\n 297 | \n\n 297 | \n
| \n USD | \n\n \n | \n\n 68 | \n\n 68 | \n\n \n | \n\n 138 | \n\n 138 | \n
| \n CAD | \n\n \n | \n\n 0 | \n\n 0 | \n\n \n | \n\n 2 | \n\n 2 | \n
| \n THB | \n\n \n | \n\n 30 | \n\n 30 | \n\n \n | \n\n 22 | \n\n 22 | \n
| \n SAR | \n\n \n | \n\n 5 | \n\n 5 | \n\n \n | \n\n 8 | \n\n 8 | \n
| \n BRL | \n\n \n | \n\n 74 | \n\n 74 | \n\n \n | \n\n 65 | \n\n 65 | \n
| \n CNY | \n\n \n | \n\n 23 | \n\n 23 | \n\n \n | \n\n 16 | \n\n 16 | \n
| \n KRW | \n\n \n | \n\n 6 | \n\n 6 | \n\n \n | \n\n 6 | \n\n 6 | \n
| \n JPY | \n\n \n | \n\n 4 | \n\n 4 | \n\n \n | \n\n 10 | \n\n 10 | \n
| \n Other | \n\n \n | \n\n 57 | \n\n 57 | \n\n \n | \n\n 20 | \n\n 20 | \n
| \n Total | \n\n \n | \n\n 539 | \n\n 539 | \n\n \n | \n\n 584 | \n\n 584 | \n
| \n Other financial instruments | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CNY | \n\n \n | \n\n 4 | \n\n 4 | \n\n \n | \n\n 12 | \n\n 12 | \n
| \n EUR | \n\n \n | \n\n 7 | \n\n 7 | \n\n \n | \n\n 65 | \n\n 65 | \n
| \n SAR | \n\n \n | \n\n 4 | \n\n 4 | \n\n \n | \n\n 4 | \n\n 4 | \n
| \n Other | \n\n \n | \n\n 1 | \n\n 1 | \n\n \n | \n\n 38 | \n\n 38 | \n
| \n Total | \n\n \n | \n\n 16 | \n\n 16 | \n\n \n | \n\n 118 | \n\n 118 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Total | \n\n -1,895 | \n\n 312 | \n\n -1,583 | \n\n -333 | \n\n -1,156 | \n\n -1,489 | \n
At the end of 2024, \u20ac1,865 million of the Group\u2019s gross debt was at fixed-rate, and is largely comprised of:
hTwo senior bonds issued in April 2024 for a total of \u20ac1,500 million maturing in 2028 and 2031 (carrying amount of \u20ac1,492 million);
hIFRS 16 lease liability for a total of \u20ac306 million (carrying amount of \u20ac306 million).
The floating-rate debt is mainly comprised of a term loan for an amount of \u20ac200 million maturing in 2026 which is subject to interest rate hedging via interest rate swaps reducing the volatility to interest rate fluctuations (discussed below).
The impact of interest rate volatility at the end of 2024 compared to 2023 is the following:
| \n In \u20ac million | \n\n Sensitivity to a + 100bp movement in EUR market interest rates | \n\n Sensitivity to a - 100bp movement in EUR market interest rates | \n||
|---|---|---|---|---|
| \n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n|
| \n Profit or loss | \n\n 0 | \n\n -7 | \n\n 0 | \n\n 6 | \n
The sensitivity to interest rates volatility on the floating gross financial debt remains insignificant at the end of 2024 compared to 2023 thanks to the interest rates hedging. Most of the sensitivity disclosed in 2023 corresponds to the remaining volatility between the maximum interest rate payable (cap strike rate) and the minimum rate (floor strike rate) following the hedging of the bridge facility (\u20ac1,500 million) via zero cost interest collar.
Effects of IBOR market developments
All the new Liquidity Facilities (RCF, Bilateral lines) have been negotiated using only SOFR reference index and not IBOR anymore. This will not have any impact financially.
The ISDA's agreements were as well amended to include the SOFR.
All the other old agreements (before June 2023) still reflect IBOR on the agreements. Banks in that case will apply market standard approach and use the new SOFR reference rate for those agreements, therefore will not have an impact on our financial charges nor relations.
Interest rate risk hedged by instrument accounted for as held for trading
In 2024 and 2023, there are no outstanding interest rate instruments accounted for as held for trading.
Interest rate risk hedged by instrument accounted for as a hedging instrument in a cash flow hedge
In comparison to 2023, the remaining interest rate hedging is the hedge executed on the \u20ac200 million floating term loan.
All the other hedging relationships were settled following the repayment of the \u20ac1,500 million bridge facility drawdown and the issuance of the senior bonds totaling \u20ac1,500 million.
| \n Cash flow hedges on floating interests rates | \n\n December 31, 2024 | \n||||||
|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument | \n\n Notional amount of the risk exposure | \n\n Percentage of exposure hedged | \n\n Hedge interest rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Assets | \n\n Liabilities | \n||||||
| \n Floating rate debt (Euribor6M) | \n\n 200 | \n\n 200 | \n\n 100% | \n\n 3.52% | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n 1.99% | \n\n 0 | \n\n 0 | \n\n 0 | \n
As of December 31, 2024, the cash-flow hedge reserve for interest rate risk also includes an amount of \u20ac 31 million related to the unwound Flexiswap hedge instruments and is recycled to profit or loss over the duration of the two bonds. On the Statement of Financial Position, the Flexiswap hedging instruments were replaced by two new instruments classified as financial debt, presented within \"Other borrowings from third parties\" in Note F33.
| \n Cash flow hedges on floating interests rates | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument | \n\n Notional amount of the risk exposure | \n\n Percentage of exposure hedged | \n\n Hedge interest rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Assets | \n\n Liabilities | \n||||||
| \n Floating rate debt (Euribor6M) | \n\n 200 | \n\n 200 | \n\n 100% | \n\n 3.52% | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n Floating rate debt (Euribor1M) | \n\n 1,500 | \n\n 1,500 | \n\n 100% | \n\n 3.55% | \n\n -1 | \n\n 0 | \n\n -1 | \n
| \n Future long-term refinancing (Euribor6M) | \n\n 750 | \n\n 750 | \n\n 100% | \n\n 3,20% + Fixed Margin | \n\n -25 | \n\n 0 | \n\n -25 | \n
| \n Future long-term refinancing (Euribor6M) | \n\n 750 | \n\n 750 | \n\n 100% | \n\n 3,05% + Fixed Margin | \n\n -33 | \n\n 0 | \n\n -33 | \n
Utility and CO2 price risks
The Group purchases a large portion of its coal, gas and electricity needs in Europe and the United States based on fluctuating liquid market indices. Moreover, the Group purchases raw materials with a price formula referring to market indices. In order to reduce the cost volatility, the Group has developed a policy for exchanging variable price against fixed price through derivative financial instruments. Most of these hedging instruments can be documented as hedging instruments of the underlying purchase contracts. Utility purchase contracts at fixed price with a physical delivery for use in the Group's operations are qualified as own use contracts and constitute a natural hedge. Those have not been included in this note.
Financial hedging of utility and CO2 emission rights price risks is managed centrally by Energy Services on behalf of the Group entities.
Energy Services also carries out trading transactions with respect to utility and CO2.
The following tables detail the notional principal amounts and fair values of utility and CO2 derivative financial instruments outstanding at the end of the reporting period:
| \n Held for trading | \n\n Notional amount of the instrument(1) | \n\n Notional amount of the instrument (in units) | \n\n Fair value of the instrument - Asset | \n\n Fair value of the instrument - Liability | \n|||||
|---|---|---|---|---|---|---|---|---|---|
| \n December 31 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n \n | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n
| \n In \u20ac million (except where indicated) | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Power | \n\n \n | \n\n 22 | \n\n \n | \n\n 118,090 | \n\n MWh | \n\n 0 | \n\n 0 | \n\n 0 | \n\n -13 | \n
| \n Standard Quality Gas | \n\n 1 | \n\n 21 | \n\n 10,220 | \n\n 811,174 | \n\n MWh | \n\n 1 | \n\n 0 | \n\n -1 | \n\n 0 | \n
| \n CO2 | \n\n 9 | \n\n 9 | \n\n 360,250 | \n\n 394,500 | \n\n Tons | \n\n 0 | \n\n 0 | \n\n -18 | \n\n -26 | \n
| \n Total | \n\n 10 | \n\n 52 | \n\n \n | \n\n \n | \n\n \n | \n\n 1 | \n\n 0 | \n\n -19 | \n\n -39 | \n
(1)The hedging instruments are located in the line item: \"Other Receivables\" and \"Other Liabilities\" in the consolidated statement of financial position.
The amounts presented in the tables hereafter include hedging needs of the GBUs of the Group that are sourced through Energy Services, and not the full Group utility hedging needs.
| \n \n | \n\n December 31, 2024 | \n|||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| \n Cash flow hedge | \n\n Notional amount of the instrument(1) | \n\n Notional amount of\u00a0the instrument (in units) | \n\n \n | \n\n Notional amount of the risk exposure | \n\n Notional amount of the risk exposure (in units) | \n\n \n | \n\n Percentage of exposure hedged | \n\n Average hedge price per\u00a0risk category | \n\n \n | \n\n Cash flow hedge reserve | \n\n Fair value of the instrument - Asset | \n\n Fair value of the instrument - Liability | \n
| \n In \u20ac million | \n||||||||||||
| \n Power | \n\n 224 | \n\n 2,205,840 | \n\n MWh | \n\n 417 | \n\n 3,772,347 | \n\n MWh | \n\n 58% | \n\n 102 | \n\n EUR/MWh | \n\n -29 | \n\n 0 | \n\n -29 | \n
| \n Standard Quality Gas | \n\n 361 | \n\n 13,463,715 | \n\n MWh | \n\n 1,056 | \n\n 26,558,004 | \n\n MWh | \n\n 51% | \n\n 22 | \n\n EUR/MWh | \n\n 35 | \n\n 53 | \n\n -18 | \n
| \n CO2(2) | \n\n 341 | \n\n 4,292,750 | \n\n Tons | \n\n 872 | \n\n 10,616,000 | \n\n Tons | \n\n 40% | \n\n 75 | \n\n EUR/Tons | \n\n -9 | \n\n 23 | \n\n -32 | \n
| \n Total | \n\n 926 | \n\n \n | \n\n \n | \n\n 2,345 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n -3 | \n\n 76 | \n\n -79 | \n
(1)The hedging instruments are in the line item: \"Other Receivables\" and \"Other Liabilities\" in the consolidated statement of financial position.
(2)Excluding the reserve frozen in OCI, following roll-over transactions (\u20ac(44) million).
| \n Cash flow hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| \n In \u20ac million | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Power | \n\n 112 | \n\n 781,326 | \n\n MWh | \n\n 181 | \n\n 1,763,316 | \n\n MWh | \n\n 44% | \n\n 142 | \n\n EUR/MWh | \n\n 30 | \n\n 33 | \n\n -3 | \n
| \n Standard Quality Gas | \n\n 245 | \n\n 12,343,602 | \n\n MWh | \n\n 579 | \n\n 24,542,118 | \n\n MWh | \n\n 50% | \n\n 27 | \n\n EUR/MWh | \n\n -41 | \n\n 15 | \n\n -56 | \n
| \n CO2(2) | \n\n 553 | \n\n 3,469,500 | \n\n Tons | \n\n 801 | \n\n 9,230,909 | \n\n Tons | \n\n 38% | \n\n 87 | \n\n EUR/Tons | \n\n -43 | \n\n 0 | \n\n -44 | \n
| \n Total | \n\n 910 | \n\n \n | \n\n \n | \n\n 1,561 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n -54 | \n\n 48 | \n\n -102 | \n
(1)The hedging instruments are located in the line item: \"Other Receivables\" and \"Other Liabilities\" in the consolidated statement of financial position.
(2)Excluding the reserve frozen in OCI, following roll-over transactions (\u20ac(33) million).
In 2024, the group changed its hedge relationship on CO2 emission rights price risk which resulted in the discontinuance of hedging cash flow hedge relationship at the end of December 2024. The related loss of \u20ac(38) million was recognized in other operating gains and losses in the consolidated income statement.
Fair value hedge
The Group covered a part of its CO2 emission rights in inventory by forward sales of CO2 emission rights to a related party. The Group qualifies this hedging strategy as fair value hedge. The change in fair value of forward sales is accounted for in profit and loss, concomitantly with the revaluation of the CO2 emission rights held in\u00a0inventory.
The Group has established a 1:1 hedge ratio for the underlying risk of the forward sales of CO2 emission rights to the related party that is identical to the hedged risk component.
The impact of the hedging instrument on the statement of financial position as at December 31, 2024, is as follows:
| \n \n | \n\n December 31, 2024 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n \n | \n\n -1 | \n\n Financial Instrument | \n\n \n | \n\n 0 | \n
| \n \n | \n\n December 31, 2024 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n 2 | \n\n \n | \n\n Inventories | \n\n 0 | \n\n \n | \n
| \n \n | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n \n | \n\n -2 | \n\n Financial Instrument | \n\n 1 | \n\n -1 | \n
| \n \n | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n \n | \n\n 2 | \n\n Inventories | \n\n 1 | \n\n \n | \n
The sensitivities of commodity derivative financial instruments as of December 31, 2024, are presented below.
The sensitivities were defined based on the price levels and volatility levels of each commodity. These assumptions do not constitute an estimation of future market prices, and the sensitivities presented are not representative of future changes in Solvay's equity and results.
| \n In \u20acmillion | \n\n December 31, 2024 | \n||
|---|---|---|---|
| \n Price change | \n\n Other comprehensive income | \n\n Profit or loss | \n|
| \n Natural gas | \n\n +10\u20ac /MWh | \n\n -102 | \n\n 0 | \n
| \n Natural gas | \n\n -10\u20ac /MWh | \n\n 102 | \n\n 0 | \n
| \n Electricity | \n\n +30\u20ac /MWh | \n\n 66 | \n\n 0 | \n
| \n Electricity | \n\n -30\u20ac /MWh | \n\n -66 | \n\n 0 | \n
| \n CO2 emission rights | \n\n +5\u20ac /T | \n\n -21 | \n\n -2 | \n
| \n CO2 emission rights | \n\n -5\u20ac /T | \n\n 21 | \n\n 2 | \n
Performance Share Units Plan (PSU) and Restricted Share Units (RSU) risk on Solvay and Syensqo share price
The last cash settled PSU plan (granted in 2021) vested on 31/12/2023 and was paid out in June 2024. The PSU/RSU plans granted as from 2022 are equity settled. The RSU plan 2022 will deliver Solvay and Syensqo shares. The PSU/RSU plans 2023 and 2024 will deliver Solvay shares only. These PSU/RSU plans are hedged with treasury shares. However, in order to neutralize the volatility of the Syensqo share price, which will impact the liability valuation relating to the RSU plan 2022, the Group has entered into a hedge (equity forward transaction) covering 100% of the risk.
See the Financial risk in the Management of risks section of this annual report for additional information on credit risk management.
The Group continuously monitors the credit risk of important business partners.
The Group engages in transactions only with financial institutions with a good credit rating. The Group monitors and manages exposures to financial institutions within approved counterparty credit limits and credit risk parameters in order to mitigate the risk of default. For financial guarantees, see note F36 Contingent liabilities and financial guarantees.
The Group recognizes expected credit losses on all of its trade receivables: it applies the simplified approach and recognizes lifetime expected losses on all trade receivables, using a provision matrix in order to calculate the lifetime expected credit losses for trade receivables, using historical information on defaults adjusted for the forward-looking information.
The Group classifies the customers and their related receivables in various rating classes, based on the risks\u2019 grading attributed to the customers and on the aging balance of receivables. As such, for all receivables overdue below six months, the Group considers percentages within a range between 0.005% and 4.031%, depending on the rating class. For all receivables overdue in excess of six months, the Group considers a rate of 50% or of 100%, depending on the rating class. The customer\u2019s grading is reviewed annually for customers assessed as low risk profile, and every six months for customers assessed as higher risk profile.
There is no significant concentration of credit risk at Group level because the receivables\u2019 credit risk is spread over a large number of customers and markets.
The aging of trade receivables, financial instruments \u2013 operational, loans and other non-current assets is as follows:
| \n December 31, 2024 | \n\n With expected loss allowance, not credit-impaired | \n||||||
|---|---|---|---|---|---|---|---|
| \n In \u20ac million | \n\n Total | \n\n Credit-impaired | \n\n not past due | \n\n less than 30 days past due | \n\n between 30 and 60 days past due | \n\n between 60 and 90 days past due | \n\n more than 90 days past due | \n
| \n Trade receivables | \n\n 850 | \n\n 22 | \n\n 804 | \n\n 18 | \n\n 1 | \n\n 2 | \n\n 2 | \n
| \n Trade receivables - allowance | \n\n -23 | \n\n -20 | \n\n -1 | \n\n \n | \n\n \n | \n\n \n | \n\n -2 | \n
| \n Trade receivables - net | \n\n 826 | \n\n 2 | \n\n 803 | \n\n 18 | \n\n 1 | \n\n 2 | \n\n 0 | \n
| \n Financial instruments - operational | \n\n 80 | \n\n \n | \n\n 80 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets(1) | \n\n 116 | \n\n 4 | \n\n 111 | \n\n 0 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - allowance | \n\n -4 | \n\n -4 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - net(1) | \n\n 112 | \n\n 0 | \n\n 111 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total | \n\n 1,018 | \n\n 3 | \n\n 994 | \n\n 18 | \n\n 1 | \n\n 2 | \n\n 0 | \n
(1)Loans and other non-current assets do not include pension fund surplus and CO2 -term inventory.
| \n December 31, 2023 | \n\n With expected loss allowance, not credit-impaired | \n||||||
|---|---|---|---|---|---|---|---|
| \n In \u20ac million | \n\n Total | \n\n Credit-impaired | \n\n not past due | \n\n less than 30 days past due | \n\n between 30 and 60 days past due | \n\n between 60 and 90 days past due | \n\n more than 90 days past due | \n
| \n Trade receivables | \n\n 894 | \n\n 55 | \n\n 802 | \n\n 28 | \n\n 1 | \n\n 6 | \n\n 3 | \n
| \n Trade receivables - allowance | \n\n -54 | \n\n -53 | \n\n -1 | \n\n \n | \n\n \n | \n\n \n | \n\n -1 | \n
| \n Trade receivables - net | \n\n 840 | \n\n 3 | \n\n 801 | \n\n 28 | \n\n 1 | \n\n 6 | \n\n 2 | \n
| \n Financial instruments - operational | \n\n 66 | \n\n \n | \n\n 66 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets(1) | \n\n 140 | \n\n 4 | \n\n 135 | \n\n 0 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - allowance | \n\n -4 | \n\n -4 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - net(1) | \n\n 136 | \n\n 0 | \n\n 135 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total | \n\n 1,042 | \n\n 3 | \n\n 1,002 | \n\n 28 | \n\n 1 | \n\n 6 | \n\n 2 | \n
(1) Loans and other non-current assets do not include pension fund surplus and CO2 emission rights inventory.
The table below presents the allowances on trade receivables:
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n January 1 | \n\n -54 | \n\n -72 | \n
| \n Additions | \n\n -3 | \n\n -11 | \n
| \n Uses | \n\n 12 | \n\n 5 | \n
| \n Reversal | \n\n 15 | \n\n 9 | \n
| \n Currency translation differences | \n\n 2 | \n\n -1 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n
| \n Partial Demerger | \n\n \n | \n\n 14 | \n
| \n Other | \n\n 5 | \n\n 0 | \n
| \n December 31 | \n\n -23 | \n\n -54 | \n
See the Financial risk in the Management of risks section of this annual report for additional information on the liquidity risk management.
Liquidity risk relates to Solvay\u2019s ability to service and refinance its debt (including notes issued) and to fund its operations.
This depends on its ability to generate cash from operations and not to overpay for acquisitions. In addition, external factors impacting the global liquidity markets could also make financing sources less accessible.
The Finance Committee gives its opinion on the appropriate liquidity risk management for the Group\u2019s short-, medium-, and long-term funding and liquidity management requirements.
The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecasts and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
The Group staggers the maturities of its financing sources over time in order to limit amounts to be refinanced each year.
The following tables detail the Group\u2019s remaining contractual maturity for its financial liabilities with contractual repayment periods.
The tables have been prepared using the discounted cash flows of financial liabilities, based on the earliest date on which the Group can be required to pay.
The following tables present discounted amounts (carrying amounts):
| \n In \u20ac million | \n\n December 31, 2024 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 809 | \n\n 809 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 107 | \n\n 107 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 111 | \n\n 98 | \n\n 13 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 21 | \n\n \n | \n\n 5 | \n\n 5 | \n\n 11 | \n
| \n Financial debt | \n\n 1,831 | \n\n 84 | \n\n 217 | \n\n 777 | \n\n 753 | \n
| \n Leasing debt | \n\n 306 | \n\n 70 | \n\n 36 | \n\n 92 | \n\n 108 | \n
| \n Total | \n\n 3,186 | \n\n 1,169 | \n\n 271 | \n\n 874 | \n\n 872 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 850 | \n\n 850 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 175 | \n\n 175 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 140 | \n\n 108 | \n\n 32 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 34 | \n\n \n | \n\n 12 | \n\n 2 | \n\n 20 | \n
| \n Financial debt | \n\n 1,885 | \n\n 148 | \n\n 1,711 | \n\n 23 | \n\n 3 | \n
| \n Leasing debt | \n\n 307 | \n\n 63 | \n\n 44 | \n\n 92 | \n\n 107 | \n
| \n Total | \n\n 3,390 | \n\n 1,344 | \n\n 1,799 | \n\n 117 | \n\n 130 | \n
The following tables present undiscounted amounts (nominal value):
| \n In \u20ac million | \n\n December 31, 2024 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 809 | \n\n 809 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 107 | \n\n 107 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 111 | \n\n 98 | \n\n 13 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 21 | \n\n \n | \n\n 5 | \n\n 5 | \n\n 11 | \n
| \n Financial debt | \n\n 1,842 | \n\n 84 | \n\n 219 | \n\n 781 | \n\n 757 | \n
| \n Leasing debt | \n\n 306 | \n\n 70 | \n\n 36 | \n\n 92 | \n\n 108 | \n
| \n Total | \n\n 3,196 | \n\n 1,169 | \n\n 273 | \n\n 878 | \n\n 876 | \n
| \n Interests on financial debt and lease liabilities | \n\n 412 | \n\n 75 | \n\n 71 | \n\n 174 | \n\n 91 | \n
| \n Total outflows of cash | \n\n 3,608 | \n\n 1,244 | \n\n 345 | \n\n 1,052 | \n\n 967 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 850 | \n\n 850 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 175 | \n\n 175 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 140 | \n\n 108 | \n\n 32 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 34 | \n\n \n | \n\n 12 | \n\n 2 | \n\n 20 | \n
| \n Financial debt | \n\n 1,886 | \n\n 148 | \n\n 1,711 | \n\n 23 | \n\n 4 | \n
| \n Leasing debt | \n\n 307 | \n\n 63 | \n\n 44 | \n\n 92 | \n\n 107 | \n
| \n Total | \n\n 3,391 | \n\n 1,344 | \n\n 1,799 | \n\n 117 | \n\n 131 | \n
| \n Interests on financial debt and lease liabilities | \n\n 179 | \n\n 82 | \n\n 61 | \n\n 17 | \n\n 19 | \n
| \n Total outflows of cash | \n\n 3,570 | \n\n 1,426 | \n\n 1,860 | \n\n 134 | \n\n 150 | \n
Solvay\u2019s liquidity amounts to \u20ac2.0 billion including \u20ac0.6 billion of cash and cash equivalents on the statement of financial position and \u20ac1.4 billion of committed fully undrawn credit facilities (\u20ac1.1 billion multilateral RCF maturing in 2029 with extension possibility, and \u20ac0.3 billion bilateral RCF maturing in 2027 with extension possibilities) unused at the end of December 2024.
In addition, Solvay has access to a Belgian Treasury Bill program for \u20ac1.0 billion (no outstanding balance on December 31, 2024). The program is covered by a back-up credit line.
See below (section F32.E) for further details on supplier financing programs within trade payables.
fAccounting policy
General
The Group classifies financial liabilities that arise from supplier finance arrangements within Trade and other payables in the statement of financial position if they have a similar nature and function to trade payables. This is the case if the supplier finance arrangement is part of the working capital used in the Group\u2019s normal operating cycle, the level of security provided is similar to trade payables and the terms of the liabilities that are part of the supply chain finance arrangement are not substantially different from the terms of trade payables that are not part of the arrangement. Cash flows related to liabilities arising from supplier finance arrangements that are classified in Trade and other payables in the consolidated statement of financial position are included in operating activities in the consolidated statement of cash flows.
First application in 2024
This disclosure requirement was introduced by the Amendments Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7), published in May 2023 by the IASB. The amendments are effective for periods beginning on or after 1 January 2024. In the year of initial application, the requirements only apply to the annual financial report and the disclosure does not need to provide the comparative figures.
Terms and conditions
The Group has established a supplier finance arrangement that is offered to some of the Group\u2019s key suppliers. Participation in the arrangement is at the suppliers\u2019 own discretion. Suppliers that participate in the supplier finance arrangement will receive early payment on invoices sent to the Group from the Group\u2019s external finance provider. If suppliers choose to receive early payment, they pay a fee to the finance provider, to which the Group is not a party. For the finance provider to pay the invoices, the goods must have been received or supplied and the invoices approved by the Group. Payments to suppliers ahead of the invoice due date are processed by the finance provider and, in all cases, the Group settles the original invoice by paying the finance provider in line with the original invoice maturity date described above.
The Group assesses each arrangement against indicators to determine if the liabilities which suppliers have sold to the partner bank under the supplier financing scheme continue to meet the definition of trade payables or should be classified as financial debt. On December 31, 2024 and 2023, all trade payables subject to the supplier finance arrangement meet the criteria of trade payables and are included in trade payables in the consolidated statement of financial position.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n\n January 1, 2023 | \n
|---|---|---|---|
| \n Carrying amount of financial liabilities | \n\n \n | \n\n \n | \n\n \n | \n
| \n Presented in trade and other payables | \n\n 62 | \n\n N/A | \n\n N/A | \n
| \n \u2022of which suppliers have received payment from finance provider | \n\n 47 | \n\n N/A | \n\n N/A | \n
| \n Range of payment due dates (days after the invoice date) | \n\n \n | \n\n \n | \n\n \n | \n
| \n Liabilities that are part of the arrangement | \n\n 102-106 days | \n\n N/A | \n\n N/A | \n
| \n Comparable trade payables that are not part of the arrangements | \n\n 45-49 days | \n\n N/A | \n\n N/A | \n
NOTE F32
Financial instruments and financial risk management
fAccounting policy
General
Financial assets and liabilities are recognized when, and only when Solvay becomes a party to the contractual provisions of the instrument.
Amortized cost is the amount at which the financial asset or financial liability is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity amount and, for financial assets, adjusted for any loss allowance. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial asset or financial liability to the gross carrying amount of a financial asset or to the amortized cost of a financial liability. When calculating the effective interest rate, the Group estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses. The calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs, and all other premiums or discounts.
Derivative financial instruments
A derivative financial instrument is a financial instrument or other contract within the scope of IFRS 9 Financial Instruments with all three of the following characteristics:
\u2022its value changes in response to the change in a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract (sometimes called the \"underlying\");
\u2022it requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors;
\u2022it is settled at a future date.
The Group enters into a variety of derivative financial instruments (forward, future, option, collars and swap contracts) to manage its exposure to interest rate risk, foreign exchange rate risk, and commodity risk (mainly utility and CO2 emission rights price risks).
As explained above, derivatives are initially recognized at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in income or expense, unless the derivative is designated and effective as a hedging instrument. The Group designates certain derivatives as hedging instruments of the exposure to variability in cash flows with respect to a recognized asset or liability or a highly probable forecast transaction that could affect profit or loss (cash flow hedges).
A derivative with a positive fair value is recognized as a financial asset whereas a derivative with a negative fair value is recognized as a financial liability. Derivative instruments (or portions of them) are presented as non-current assets or non-current liabilities if the remaining maturity of the underlying settlements is more than 12 months after the reporting period. Other derivative instruments (or portions of them) are presented as current assets or current liabilities.
Hedge accounting
The Group designates certain derivatives and embedded derivatives, in respect of interest rate risk, foreign exchange rate risk, Solvay share price risk, and commodity risk (mainly utility and CO2 emission rights price risks), as hedging instruments in a cash flow hedge relationship.
At the inception of the hedge relationship, there is a formal designation and documentation of the hedging relationship and the Group\u2019s risk management objective and strategy for undertaking the hedge. So to apply hedge accounting: (a) there is an economic relationship between the hedged item and the hedging instrument, (b) the effect of credit risk does not dominate the value changes that result from that economic relationship, and (c) the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item.
The requirement under (a) above that an economic relationship exists means that there is an expectation that the value of the hedging instrument and the value of the hedged item will systematically change in the opposite direction in response to movements in either the same underlying (or underlyings that are economically related in such a way that they respond in a similar way to the risk that is being hedged).
Cash flow hedges
The effective portion of changes in the fair value of hedging instruments that are designated in a cash flow hedge is recognized in other comprehensive income.
The gain or loss relating to the ineffective portion is recognized immediately in profit or loss.
As long as cash flow hedge qualifies, the hedging relationship is accounted for as follows:
(a)the separate component of equity associated with the hedged item (cash flow hedge reserve) is adjusted to the lower of the following (in absolute amounts):
(i)the cumulative gain or loss on the hedging instrument from inception of the hedge; and
(ii)the cumulative change in fair value (present value) of the hedged item (i.e. the present value of the cumulative change in the hedged expected future cash flows) from inception of the hedge.
(b)the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge (i.e. The portion that is offset by the change in the cash flow hedge reserve calculated in accordance with (a)) is recognized in other comprehensive income;
(c)any remaining gain or loss on the hedging instrument (or any gain or loss required to balance the change in the cash flow hedge reserve calculated in accordance with (a)) is hedge ineffectiveness that is recognized in profit or loss.
(d)the amount that has been accumulated in the cash flow hedge reserve in accordance with (a) is accounted for as follows:
(i)if a hedged forecast transaction subsequently results in the recognition of a non-financial asset or a non-financial liability, the Group removes that amount from the cash flow hedge reserve and includes it directly in the initial cost or other carrying amount of the asset or the liability. This is not a reclassification adjustment and hence it does not affect other comprehensive income;
(ii)for cash flow hedges other than those covered by i), that amount is reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment in the same period or periods during which the hedged expected future cash flows affect profit or loss (for example, in the periods that interest income or interest expense is recognized or when a forecast sale occurs);
(iii)however, if that amount is a loss and the Group expects that all or a portion of that loss will not be recovered in one or more future periods, it immediately reclassifies the amount that is not expected to be recovered into profit or loss as a reclassification adjustment.
Most hedged items are transaction related. The time value of options, forward elements of forward contracts, and foreign currency basis spreads of financial instruments that are hedging the items affect profit or loss at the same time as those hedged items.
Hedge accounting is discontinued prospectively when the hedging relationship (or a part of a hedging relationship) ceases to meet the qualifying criteria (after considering any rebalancing of the hedging relationship, if applicable). This includes instances when the hedging instrument expires or is sold, terminated or exercised.
When the Group discontinues hedge accounting for a cash flow hedge it accounts for the amount that has been accumulated in the cash flow hedge reserve as follows:
\u2022if the hedged future cash flows are still expected to occur, that amount remains in the cash flow hedge reserve until the future cash flows occur. However, if that amount is a loss and the Group expects that all or a portion of that loss will not be recovered in one or more future periods, it immediately reclassifies the amount that is not expected to be recovered into profit or loss as a reclassification adjustment;
\u2022if the hedged future cash flows are no longer expected to occur, that amount is immediately reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment. A hedged future cash flow that is no longer highly probable to occur may still be expected to occur.
The following table presents the financial assets and liabilities as current or non-current according to their classification under IFRS 9.
| \n In \u20ac million | \n\n Classification | \n\n 31 December 2024 | \n\n 31 December 2023 | \n
|---|---|---|---|
| \n Carrying amount | \n\n Carrying amount | \n||
| \n Non-current assets - Financial instruments | \n\n \n | \n\n 194 | \n\n 234 | \n
| \n Available-for-sale financial assets | \n\n \n | \n\n \n | \n\n \n | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n Financial assets measured at fair value through other comprehensive income | \n\n 8 | \n\n 1 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n Financial assets measured at fair value through profit or loss | \n\n 55 | \n\n 87 | \n
| \n Loans and other non-current assets (excluding pension fund surpluses and long-term inventory balance) | \n\n Financial assets measured at amortized cost | \n\n 118 | \n\n 136 | \n
| \n Others | \n\n \n | \n\n 118 | \n\n 136 | \n
| \n Financial instruments - Operational | \n\n \n | \n\n 13 | \n\n 10 | \n
| \n Held for trading | \n\n Held for trading | \n\n 0 | \n\n 5 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship | \n\n Cash-flow hedge | \n\n 13 | \n\n 5 | \n
| \n Current assets - Financial instruments | \n\n \n | \n\n 1,448 | \n\n 1,598 | \n
| \n Trade receivables | \n\n Financial assets measured at amortized cost | \n\n 826 | \n\n 840 | \n
| \n Other financial instruments | \n\n \n | \n\n 16 | \n\n 118 | \n
| \n Other marketable securities >3 months | \n\n Financial assets measured at amortized cost | \n\n 4 | \n\n 50 | \n
| \n Currency swaps | \n\n Held for trading | \n\n 1 | \n\n 2 | \n
| \n Other current financial assets | \n\n Financial assets measured at amortized cost | \n\n 11 | \n\n 66 | \n
| \n Financial instruments - Operational | \n\n \n | \n\n 67 | \n\n 56 | \n
| \n Held for trading | \n\n Held for trading | \n\n 2 | \n\n 11 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship | \n\n Cash-flow hedge | \n\n 64 | \n\n 45 | \n
| \n Cash and cash equivalents | \n\n Financial assets measured at amortized cost | \n\n 539 | \n\n 584 | \n
| \n Total assets - Financial instruments | \n\n \n | \n\n 1,642 | \n\n 1,833 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current liabilities - Financial instruments | \n\n \n | \n\n 2,017 | \n\n 2,051 | \n
| \n Financial debt | \n\n \n | \n\n 1,983 | \n\n 1,981 | \n
| \n Bonds | \n\n Financial liabilities measured at amortized cost | \n\n 1,492 | \n\n 0 | \n
| \n Other non-current debts | \n\n Financial liabilities measured at amortized cost | \n\n 253 | \n\n 1,735 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship | \n\n Cash-flow hedge | \n\n 2 | \n\n 2 | \n
| \n Lease liabilities IFRS 16 - Non-current portion | \n\n Lease liabilities measured at amortized cost | \n\n 236 | \n\n 243 | \n
| \n Other liabilities | \n\n Financial liabilities measured at amortized cost | \n\n 21 | \n\n 39 | \n
| \n Financial instruments - Operational | \n\n \n | \n\n 13 | \n\n 32 | \n
| \n Held for trading | \n\n Held for trading | \n\n 1 | \n\n 17 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship | \n\n Cash-flow hedge | \n\n 11 | \n\n 15 | \n
| \n Current liabilities - Financial instruments | \n\n \n | \n\n 1,170 | \n\n 1,344 | \n
| \n Financial debt | \n\n \n | \n\n 155 | \n\n 211 | \n
| \n Short-term financial debt | \n\n Financial liabilities measured at amortized cost | \n\n 83 | \n\n 88 | \n
| \n Currency swaps | \n\n Held for trading | \n\n 2 | \n\n 1 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship | \n\n Cash-flow hedge | \n\n \n | \n\n 59 | \n
| \n Lease liabilities IFRS 16 - Current portion | \n\n Lease liabilities measured at amortized cost | \n\n 70 | \n\n 63 | \n
| \n Trade payables | \n\n Financial liabilities measured at amortized cost | \n\n 810 | \n\n 850 | \n
| \n Financial instruments - Operational | \n\n \n | \n\n 98 | \n\n 108 | \n
| \n Held for trading | \n\n Held for trading | \n\n 24 | \n\n 19 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship | \n\n Cash-flow hedge | \n\n 74 | \n\n 88 | \n
| \n Dividends payables | \n\n Financial liabilities measured at amortized cost | \n\n 107 | \n\n 175 | \n
| \n Total liabilities - Financial instruments | \n\n \n | \n\n 3,187 | \n\n 3,395 | \n
In 2024 and 2023, long-term CO2 inventory balances reported are not financial assets and hence are not included in the table above. They are presented as other non-current assets.
The following table gives an overview of the carrying amount of all financial instruments by category as defined by IFRS 9.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Carrying amount | \n\n Carrying amount | \n|
| \n Fair value through profit or loss | \n\n 59 | \n\n 105 | \n
| \n Held for trading (financial instruments - operational - see note F26) | \n\n 2 | \n\n 16 | \n
| \n Held for trading (other financial instruments - see note F33, table Changes in financial debt) | \n\n 1 | \n\n 2 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n 55 | \n\n 87 | \n
| \n Financial assets measured at amortized cost | \n\n 1,497 | \n\n 1,677 | \n
| \n Financial assets measured at amortized cost (including cash and cash equivalents, trade receivables, loans and other current/non-current assets except pension fund surpluses and long-term inventory balance) | \n\n 1,497 | \n\n 1,677 | \n
| \n Financial assets measured at fair value through other comprehensive income | \n\n 85 | \n\n 51 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship (see note F26) | \n\n 78 | \n\n 50 | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n 8 | \n\n 1 | \n
| \n Total financial assets | \n\n 1,642 | \n\n 1,833 | \n
| \n \n | \n\n \n | \n\n \n | \n
| \n Fair value through profit or loss | \n\n -27 | \n\n -37 | \n
| \n Held for trading (financial instruments - operational - see note F34) | \n\n -26 | \n\n -36 | \n
| \n Held for trading (financial debt - see note F33, table Changes in financial debt) | \n\n -2 | \n\n -1 | \n
| \n Financial liabilities measured at amortized cost | \n\n -2,766 | \n\n -2,887 | \n
| \n Financial liabilities measured at amortized cost (excluding dividends payable and IFRS 16 lease liabilities) | \n\n -2,659 | \n\n -2,712 | \n
| \n Dividends payables | \n\n -107 | \n\n -175 | \n
| \n Lease liabilities measured at amortized cost | \n\n -306 | \n\n -307 | \n
| \n Lease liabilities IFRS16 measured at amortized cost | \n\n -306 | \n\n -307 | \n
| \n Financial liabilities measured at fair value through other comprehensive income | \n\n -88 | \n\n -165 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship (see note F34) | \n\n -88 | \n\n -165 | \n
| \n Total financial and lease liabilities | \n\n -3,187 | \n\n -3,395 | \n
The category \u201cHeld for trading\u201d contains derivative financial instruments that are used for management of foreign currency risk, utility and CO2 emission rights price risks, index and shares. Contracts which have been documented as hedging instruments (hedge accounting under IFRS 9 Financial Instruments) or which meet the exemption criteria for own use are not included in the category \u201cHeld for trading.\u201d
At the end of 2024, \u20ac55 million of instruments at fair value through profit or loss relate to equity instruments related to Syensqo Group.
Valuation techniques and assumptions used for measuring fair value.
fAccounting policy
Quoted market prices are available for financial assets and financial liabilities with standard terms and conditions that are traded on active markets. The fair values of derivative financial instruments are equal to their quoted prices, if available. In case such quoted prices are not available, the fair value of the financial instruments is determined based on a discounted cash flow analysis using the applicable yield curve derived from quoted interest rates matching maturities of the contracts for non-optional derivatives. Optional derivatives are fair valued based on option pricing models, taking into account the present value of probability weighted expected future payoffs, using market reference formulas.
The fair values of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||
|---|---|---|---|---|
| \n Carrying amount | \n\n Fair value | \n\n Carrying amount | \n\n Fair value | \n|
| \n Non-current assets - Financial instruments | \n\n 118 | \n\n 118 | \n\n 136 | \n\n 136 | \n
| \n Loans and other non-current assets (except pension fund surpluses and long-term inventory balance) | \n\n 118 | \n\n 118 | \n\n 136 | \n\n 136 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current liabilities - Financial instruments | \n\n -1,766 | \n\n -1,814 | \n\n -1,774 | \n\n -1,774 | \n
| \n Bonds | \n\n -1,492 | \n\n -1,540 | \n\n 0 | \n\n 0 | \n
| \n Other non-current debts | \n\n -253 | \n\n -253 | \n\n -1,735 | \n\n -1,735 | \n
| \n Other liabilities | \n\n -21 | \n\n -21 | \n\n -39 | \n\n -39 | \n
The carrying amounts of current financial assets and liabilities are estimated to reasonably approximate their fair values, due to the short term to maturity.
The table \u201cFinancial instruments measured at fair value in the consolidated statement of financial position\u201d provides an analysis of financial instruments that, after their initial recognition, are measured at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable. Financial instruments classified as held for trading and as hedging instruments in cash flow hedges are mainly grouped into Levels 1 and 2. They are fair valued based on forward pricing and swap models using present value calculations. The models incorporate various inputs including foreign exchange spot and interest rates of the respective currencies, currency basis spreads between the respective currencies, interest rate curves and forward rate curves of the underlying commodity. The equity instruments measured at fair value through OCI and through profit and loss are presented within Level 1 and 3. The fair value of the instruments presented under Level 3 is measured based on the guidelines recommended by The International Private Equity and Venture Capital Valuation (IPEV).
In accordance with the Group internal rules, the responsibility for measuring the fair value level resides with (a) the Treasury department for the non-utility derivative financial instruments, and the non-derivative financial liabilities, (b) the Sustainable Development and Energy department for the utility derivative financial instruments and (c) the Finance department for non-derivative financial assets.
The Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. During the year, no such transfers have occurred.
| \n In \u20ac million | \n\n December 31, 2024 | \n|||
|---|---|---|---|---|
| \n Level 1 | \n\n Level 2 | \n\n Level 3 | \n\n Total | \n|
| \n Held for trading | \n\n 0 | \n\n 4 | \n\n 0 | \n\n 4 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Shares | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022Index | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n 55 | \n\n \n | \n\n 0 | \n\n 55 | \n
| \n \u2022Shares | \n\n 55 | \n\n \n | \n\n \n | \n\n 55 | \n
| \n Cash flow hedges | \n\n 0 | \n\n 77 | \n\n 0 | \n\n 77 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n \n | \n\n 53 | \n\n 0 | \n\n 53 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 23 | \n\n 0 | \n\n 23 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n 0 | \n\n 0 | \n\n 8 | \n\n 8 | \n
| \n \u2022Shares | \n\n \n | \n\n \n | \n\n 8 | \n\n 8 | \n
| \n Total (assets) | \n\n 55 | \n\n 81 | \n\n 8 | \n\n 144 | \n
| \n \n | \n||||
| \n Held for trading | \n\n 0 | \n\n -27 | \n\n 0 | \n\n -27 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -4 | \n\n 0 | \n\n -4 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n -18 | \n\n 0 | \n\n -18 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Index | \n\n 0 | \n\n -3 | \n\n 0 | \n\n -3 | \n
| \n Cash flow hedges | \n\n 0 | \n\n -87 | \n\n 0 | \n\n -87 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -7 | \n\n 0 | \n\n -7 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n \u2022Utility risk | \n\n \n | \n\n -47 | \n\n 0 | \n\n -47 | \n
| \n \u2022CO2 risk | \n\n \n | \n\n -32 | \n\n 0 | \n\n -32 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total (liabilities) | \n\n 0 | \n\n -115 | \n\n 0 | \n\n -115 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n|||
|---|---|---|---|---|
| \n Level 1 | \n\n Level 2 | \n\n Level 3 | \n\n Total | \n|
| \n Held for trading | \n\n 0 | \n\n 17 | \n\n 0 | \n\n 18 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 3 | \n\n 0 | \n\n 3 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 4 | \n\n 0 | \n\n 5 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Shares | \n\n \n | \n\n 8 | \n\n 0 | \n\n 8 | \n
| \n \u2022Index | \n\n 0 | \n\n 2 | \n\n 0 | \n\n 2 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n 87 | \n\n 0 | \n\n 0 | \n\n 87 | \n
| \n \u2022Shares | \n\n 87 | \n\n \n | \n\n \n | \n\n 87 | \n
| \n Cash flow hedges | \n\n 0 | \n\n 50 | \n\n 0 | \n\n 50 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 2 | \n\n 0 | \n\n 2 | \n
| \n \u2022 Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 47 | \n\n 0 | \n\n 48 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n 0 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n Total (assets) | \n\n 87 | \n\n 67 | \n\n 1 | \n\n 156 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Held for trading | \n\n 0 | \n\n -37 | \n\n 0 | \n\n -37 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -1 | \n\n 0 | \n\n -1 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n -8 | \n\n 0 | \n\n -8 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n -26 | \n\n 0 | \n\n -26 | \n
| \n \u2022 Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Index | \n\n 0 | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n Cash flow hedges | \n\n 0 | \n\n -166 | \n\n 0 | \n\n -166 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -1 | \n\n 0 | \n\n -1 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n -61 | \n\n 0 | \n\n -61 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n -59 | \n\n 0 | \n\n -59 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n -44 | \n\n 0 | \n\n -44 | \n
| \n \u2022Shares | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n Total (liabilities) | \n\n 0 | \n\n -202 | \n\n 0 | \n\n -202 | \n
The fair value of the financial instruments to manage the utility risk reduced in 2024. This is mainly explained by the fact that Solvay had decided to concentrate on its own internal consumption only and the price increase of gas and electricity in comparison to 2023.
Reconciliation of level 3 fair value measurements of financial assets and liabilities.
| \n In \u20ac million | \n\n December 31, 2024 | \n||
|---|---|---|---|
| \n At fair value through profit or loss | \n\n At fair value through other comprehensive income | \n\n Total | \n|
| \n Equity instruments | \n\n Equity instruments | \n||
| \n Opening balance at January 1 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n Total gains or losses | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Recognized in profit or loss | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Recognized in other comprehensive income | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Acquisitions | \n\n \n | \n\n 7 | \n\n 7 | \n
| \n Capital decreases | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Partial Demerger | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Transfers out of level 3 | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Derivative instruments in designated hedge accounting relationships | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Transfer to assets held for sale | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Closing balance at December 31 | \n\n 0 | \n\n 8 | \n\n 8 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n||
|---|---|---|---|
| \n At fair value through profit or loss | \n\n At fair value through other comprehensive income | \n\n Total | \n|
| \n Equity instruments | \n\n Equity instruments | \n||
| \n Opening balance at January 1 | \n\n 47 | \n\n 24 | \n\n 71 | \n
| \n Total gains or losses | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Recognized in profit or loss | \n\n 2 | \n\n \n | \n\n 2 | \n
| \n Recognized in other comprehensive income | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Acquisitions | \n\n 0 | \n\n 8 | \n\n 8 | \n
| \n Capital decreases | \n\n \n | \n\n -1 | \n\n -1 | \n
| \n Partial Demerger | \n\n -49 | \n\n -30 | \n\n -79 | \n
| \n Closing balance at December 31 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Recognized in the consolidated income statement | \n\n \n | \n\n \n | \n
| \n Recycling from OCI of derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n -7 | \n\n 39 | \n
| \n \u2022Utility risk | \n\n -4 | \n\n -1 | \n
| \n \u2022Interest rate risk | \n\n \n | \n\n \n | \n
| \n Changes in the fair value of financial instruments held for trading | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n \n | \n\n \n | \n
| \n \u2022Utility risk | \n\n -2 | \n\n 86 | \n
| \n \u2022CO2 risk | \n\n \n | \n\n 15 | \n
| \n Recognized in the gross margin | \n\n -14 | \n\n 138 | \n
| \n Recycling from OCI of derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022CO2 risk | \n\n -38 | \n\n \n | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n
| \n Changes in the fair value of financial instruments held for trading | \n\n \n | \n\n \n | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022CO2 risk | \n\n 8 | \n\n 0 | \n
| \n \u2022Shares | \n\n -3 | \n\n 0 | \n
| \n Gains and losses (time value) on derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022CO2 risk | \n\n \n | \n\n \n | \n
| \n Foreign operating exchange gains and losses | \n\n 0 | \n\n 2 | \n
| \n Recognized in other operating gains and losses | \n\n -33 | \n\n 2 | \n
| \n Recycling from OCI of derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n Changes in the fair value of financial instruments held for trading | \n\n \n | \n\n \n | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022 Shares | \n\n 0 | \n\n 0 | \n
| \n Ineffective portion of derivative financial instruments designated in cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n Recognized in results from portfolio management and reassessments | \n\n 0 | \n\n 0 | \n
| \n Net interest expense | \n\n -79 | \n\n -24 | \n
| \n Financial charge on lease liabilities | \n\n -12 | \n\n -11 | \n
| \n Other gains and losses on net indebtedness (excluding gains and losses on items not related to financial instruments) | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n -3 | \n\n 1 | \n
| \n \u2022Interest element of financial instruments | \n\n 1 | \n\n 6 | \n
| \n \u2022Others | \n\n -3 | \n\n -6 | \n
| \n Recognized in charges on net indebtedness(*) | \n\n -97 | \n\n -33 | \n
| \n Dividends from equity instruments measured at fair value through other comprehensive income | \n\n \n | \n\n \n | \n
| \n Capital gain on available-for-sale investment posted directly to the income statement | \n\n \n | \n\n \n | \n
| \n Recycling from equity of unrecognized gain and losses related to disposed available-for-sale financial assets(*) | \n\n 0 | \n\n 0 | \n
| \n Recycling from equity of impairment losses on available-for-sale financial assets(*) | \n\n 0 | \n\n 0 | \n
| \n Total recognized in the consolidated income statement | \n\n -144 | \n\n 107 | \n
(*)The note F6 Net Financial Charges shows an amount of \u20ac(76) million for 2024 (\u20ac(41) million for 2023) reported under \u201cNet cost of borrowing\u201d. This amount includes \u20ac(3) million for 2024 (\u20ac(6) million for 2023) of financial expenses not related to financial instruments that are excluded in this table from the line item \u201cRecognized in charges on net indebtedness.\u201d
The loss on highly probable sales in foreign currency recognized in gross margin for \u20ac(7) million is mainly explained by the hedging of the US$ currency and the loss recognized on utility instruments for \u20ac(4) million.
The change in fair value of financial instruments held for trading recognized in gross margin is explained by:
ha gain of \u20ac86 million in 2023, due to the price increase of gas and electricity;
In 2024, the loss of \u20ac(33) million recognized in other operating gains and losses is mainly explained by:
hA gain of \u20ac8 million (a gain of \u20ac15 million in 2023) mainly due to the price variation of CO2.
hThe loss of \u20ac(38) million recognized in other operating gains and losses is explained by the discontinuance of cash flow hedge relationship on CO2 in 2024. Refer also to F32D Other market risks.
In 2024, in the caption other gains and losses on net indebtedness, the foreign exchange income decreased by \u20ac(4) million in comparison to 2023. The gain of \u20ac1\u00a0million (\u20ac6 million for 2023) is related to the interest element of financial derivatives (forward points). The other costs decreased by \u20ac(4) million in 2024 in comparison to 2023 due to one off costs incurred in the frame of the separation plan in 2023.
Net interest expense of \u20ac79 million includes \u20ac5 million of interest rate risk recycled from OCI.
| \n In \u20ac million | \n\n Cash flow hedges | \n|||||||
|---|---|---|---|---|---|---|---|---|
| \n Foreign currency risk | \n\n Interest rate risk | \n\n Commodity risk | \n\n Total | \n|||||
| \n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n|
| \n Balance at January 1 | \n\n 1 | \n\n 13 | \n\n -61 | \n\n 0 | \n\n -87 | \n\n 67 | \n\n -148 | \n\n 81 | \n
| \n Recycling from other comprehensive income of derivative financial instruments designated in a cash flow hedge relationship | \n\n 7 | \n\n -41 | \n\n 5 | \n\n 9 | \n\n 43 | \n\n 13 | \n\n 55 | \n\n -20 | \n
| \n Effective portion of changes in fair value of cash flow hedge | \n\n -13 | \n\n 29 | \n\n 23 | \n\n -70 | \n\n -15 | \n\n -167 | \n\n -6 | \n\n -209 | \n
| \n Balance at December 31 | \n\n -5 | \n\n 1 | \n\n -33 | \n\n -61 | \n\n -60 | \n\n -87 | \n\n -99 | \n\n -148 | \n
Held for trading
The transactional risk is managed either by spot or forward contracts. Unless documented as hedging instruments (see above), derivative financial instruments are classified as held for trading.
In 2024, the notional amounts transacted to manage the transactional risk are:
ha long position of \u20ac368 million (compared to \u20ac271 million in 2023);
ha short position of \u20ac(239) million (compared to \u20ac(284) million in 2023);
hin comparison to 2023, the optimization of the cash centralization model led to a net long position increase of \u20ac142 million (mainly Chinese Yuan and US Dollar).
The following table details the notional amounts of the Group\u2019s derivatives contracts outstanding at the end of the period:
| \n In \u20ac million | \n\n Notional amount(1) | \n\n Fair value assets | \n\n Fair value liabilities | \n|||
|---|---|---|---|---|---|---|
| \n December 31 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n
| \n Held for trading long position | \n\n 368 | \n\n 271 | \n\n 1 | \n\n 1 | \n\n -1 | \n\n -1 | \n
| \n Held for trading short position | \n\n -239 | \n\n -284 | \n\n 1 | \n\n 2 | \n\n -3 | \n\n 0 | \n
| \n Total | \n\n 129 | \n\n -13 | \n\n 2 | \n\n 3 | \n\n -4 | \n\n -1 | \n
(1)Long/(short) positions (if the foreign exchange transaction does not involve the functional currency, both notional amounts are considered).
Cash flow hedge
The Group uses derivatives to hedge identified foreign exchange rate risks. It documents those as hedging instruments unless it hedges a recognized financial asset or liability when generally no cash flow hedge relationship is documented. Most hedges are transaction related.
At the end of 2024, the Group had mainly hedged highly probable sales in foreign currencies (short position) in a nominal amount of US$190 million (\u20ac183 million) and PLN55 million (\u20ac13 million). All cash flow hedge contracts that existed at the end of December 2024 will be settled within the next 12 months and will impact profit or loss during that period.
The following table details the notional amounts of Solvay\u2019s derivatives contracts outstanding at the end of the period:
Notional amounts
| \n In \u20ac million | \n\n December 31, 2024 | \n|||||||
|---|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument(1) | \n\n Notional amount of the risk exposure(1) | \n\n Percentage of exposure hedged | \n\n \n | \n\n Average hedge exchange rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Equity | \n\n Assets | \n\n Liabilities | \n||||||
| \n Cash flow hedges - Forecasted sales and purchases(3) | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n EUR/PLN | \n\n -13 | \n\n -20 | \n\n 65% | \n\n (2) | \n\n 4.37 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total EUR | \n\n -13 | \n\n -20 | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n USD/BRL | \n\n -51 | \n\n -85 | \n\n 60% | \n\n (2) | \n\n 5.40 | \n\n -2 | \n\n 0 | \n\n 2 | \n
| \n USD/CNY | \n\n -60 | \n\n -113 | \n\n 53% | \n\n (2) | \n\n 7.00 | \n\n -2 | \n\n 0 | \n\n 2 | \n
| \n USD/EUR | \n\n -42 | \n\n -82 | \n\n 52% | \n\n (2) | \n\n 1.10 | \n\n -2 | \n\n 0 | \n\n 2 | \n
| \n USD/MXN | \n\n -13 | \n\n -18 | \n\n 68% | \n\n (2) | \n\n 19.69 | \n\n -1 | \n\n 0 | \n\n 1 | \n
| \n USD/THB | \n\n -17 | \n\n -35 | \n\n 50% | \n\n (2) | \n\n 34.77 | \n\n 0 | \n\n 1 | \n\n 0 | \n
| \n Total USD | \n\n -183 | \n\n -332 | \n\n \n | \n\n \n | \n\n \n | \n\n -6 | \n\n 1 | \n\n 7 | \n
| \n Total | \n\n -196 | \n\n -352 | \n\n \n | \n\n \n | \n\n \n | \n\n -6 | \n\n 1 | \n\n 7 | \n
(1)Long/(short) positions.
(2)In compliance with Group Treasury Policy the percentage of hedged exposure will reach the progressive minimum compliance level of 60% in 2024.
(3)The hedging instruments are in the line item: \"Other Receivables\" and \"Other Liabilities\" in the statement of financial position.
| \n In \u20ac million | \n\n December 31, 2023 | \n|||||||
|---|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument(1) | \n\n Notional amount of the risk exposure(1) | \n\n Percentage of exposure hedged | \n\n \n | \n\n Average hedge exchange rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Equity | \n\n Assets | \n\n Liabilities | \n||||||
| \n Cash flow hedges - Forecasted sales and purchases(3) | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n||
| \n JPY/EUR | \n\n -1 | \n\n -1 | \n\n 50% | \n\n (2) | \n\n 126.94 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n JPY/USD | \n\n 0 | \n\n -3 | \n\n 4% | \n\n (4) | \n\n 145.33 | \n\n 1 | \n\n 1 | \n\n 0 | \n
| \n Total JPY | \n\n -1 | \n\n -4 | \n\n \n | \n\n \n | \n\n \n | \n\n 1 | \n\n 1 | \n\n 0 | \n
| \n USD/BRL | \n\n -63 | \n\n -106 | \n\n 60% | \n\n (2) | \n\n 4.78 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n USD/CNY | \n\n -68 | \n\n -138 | \n\n 49% | \n\n (2) | \n\n 6.92 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n USD/EUR | \n\n -24 | \n\n -37 | \n\n 66% | \n\n (2) | \n\n 1.13 | \n\n 2 | \n\n 1 | \n\n 1 | \n
| \n USD/MXN | \n\n -11 | \n\n -23 | \n\n 48% | \n\n (2) | \n\n 18.32 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n USD/THB | \n\n -17 | \n\n -39 | \n\n 44% | \n\n (2) | \n\n 33.75 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total USD | \n\n -184 | \n\n -342 | \n\n \n | \n\n \n | \n\n \n | \n\n 3 | \n\n 2 | \n\n 1 | \n
| \n Total | \n\n -185 | \n\n -346 | \n\n \n | \n\n \n | \n\n \n | \n\n 4 | \n\n 2 | \n\n 1 | \n
(1)Long/(short) positions.
(2)In compliance with Group Treasury Policy the percentage of hedged exposure will reach the progressive minimum compliance level of 60% in 2023.
(3)The hedging instruments are recorded in the line item: \"Other Receivables\" and \"Other Liabilities\" in the statement of financial position.
(4)In compliance with Group Treasury Policy the hedging will be stopped in 2024 due to the low materiality exposure.
Hedge relationships are seldom perfect. Therefore, ineffectiveness could arise with the result that changes in the fair value or cash flows of the hedged item that are attributable to a hedged risk and the hedging instrument do not offset within a period. The sources of hedge ineffectiveness that could potentially affect the hedging relationship during its term are listed below:
hA reduction in the amount of the forecast sales resulting in quantity or notional amount differences \u2013 the hedged item and hedging instrument are based on different quantities or notional amounts.
hA significant change in the credit risk of parties.
Timing differences \u2013 the hedged item and hedging instrument occur or are settled at different dates.
In 2024, no hedge ineffectiveness was recognized in the consolidated income statement.
See the Financial risk in the Management of risks section of this annual report for additional information on the interest rate risks management.
hInterest rate risk is managed at Group level.
hThe Group is exposed to interest rate risk because entities in the Group borrow funds at both fixed and floating interest rates. Interest rate risk is managed at Group level by maintaining an appropriate mix between fixed and floating rate borrowings.
Interest rate exposure by currency is summarized below:
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|---|
| \n Currency | \n\n Fixed rate | \n\n Floating rate | \n\n Total | \n\n Fixed rate | \n\n Floating rate | \n\n Total | \n
| \n Financial debt | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n EUR | \n\n -1,721 | \n\n -216 | \n\n -1,937 | \n\n -164 | \n\n -1,840 | \n\n -2,003 | \n
| \n USD | \n\n -146 | \n\n 0 | \n\n -146 | \n\n -137 | \n\n -2 | \n\n -139 | \n
| \n BGN | \n\n -1 | \n\n -21 | \n\n -22 | \n\n -1 | \n\n -1 | \n\n -2 | \n
| \n GBP | \n\n -8 | \n\n 0 | \n\n -8 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n KRW | \n\n -1 | \n\n -3 | \n\n -4 | \n\n -2 | \n\n -10 | \n\n -12 | \n
| \n THB | \n\n -8 | \n\n 0 | \n\n -9 | \n\n -9 | \n\n 0 | \n\n -10 | \n
| \n BRL | \n\n -5 | \n\n -2 | \n\n -7 | \n\n -8 | \n\n -2 | \n\n -10 | \n
| \n Other | \n\n -5 | \n\n -1 | \n\n -5 | \n\n -13 | \n\n -3 | \n\n -16 | \n
| \n Total | \n\n -1,895 | \n\n -243 | \n\n -2,138 | \n\n -333 | \n\n -1,859 | \n\n -2,192 | \n
| \n Cash and cash equivalents | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n EUR | \n\n \n | \n\n 271 | \n\n 271 | \n\n \n | \n\n 297 | \n\n 297 | \n
| \n USD | \n\n \n | \n\n 68 | \n\n 68 | \n\n \n | \n\n 138 | \n\n 138 | \n
| \n CAD | \n\n \n | \n\n 0 | \n\n 0 | \n\n \n | \n\n 2 | \n\n 2 | \n
| \n THB | \n\n \n | \n\n 30 | \n\n 30 | \n\n \n | \n\n 22 | \n\n 22 | \n
| \n SAR | \n\n \n | \n\n 5 | \n\n 5 | \n\n \n | \n\n 8 | \n\n 8 | \n
| \n BRL | \n\n \n | \n\n 74 | \n\n 74 | \n\n \n | \n\n 65 | \n\n 65 | \n
| \n CNY | \n\n \n | \n\n 23 | \n\n 23 | \n\n \n | \n\n 16 | \n\n 16 | \n
| \n KRW | \n\n \n | \n\n 6 | \n\n 6 | \n\n \n | \n\n 6 | \n\n 6 | \n
| \n JPY | \n\n \n | \n\n 4 | \n\n 4 | \n\n \n | \n\n 10 | \n\n 10 | \n
| \n Other | \n\n \n | \n\n 57 | \n\n 57 | \n\n \n | \n\n 20 | \n\n 20 | \n
| \n Total | \n\n \n | \n\n 539 | \n\n 539 | \n\n \n | \n\n 584 | \n\n 584 | \n
| \n Other financial instruments | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CNY | \n\n \n | \n\n 4 | \n\n 4 | \n\n \n | \n\n 12 | \n\n 12 | \n
| \n EUR | \n\n \n | \n\n 7 | \n\n 7 | \n\n \n | \n\n 65 | \n\n 65 | \n
| \n SAR | \n\n \n | \n\n 4 | \n\n 4 | \n\n \n | \n\n 4 | \n\n 4 | \n
| \n Other | \n\n \n | \n\n 1 | \n\n 1 | \n\n \n | \n\n 38 | \n\n 38 | \n
| \n Total | \n\n \n | \n\n 16 | \n\n 16 | \n\n \n | \n\n 118 | \n\n 118 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Total | \n\n -1,895 | \n\n 312 | \n\n -1,583 | \n\n -333 | \n\n -1,156 | \n\n -1,489 | \n
At the end of 2024, \u20ac1,865 million of the Group\u2019s gross debt was at fixed-rate, and is largely comprised of:
hTwo senior bonds issued in April 2024 for a total of \u20ac1,500 million maturing in 2028 and 2031 (carrying amount of \u20ac1,492 million);
hIFRS 16 lease liability for a total of \u20ac306 million (carrying amount of \u20ac306 million).
The floating-rate debt is mainly comprised of a term loan for an amount of \u20ac200 million maturing in 2026 which is subject to interest rate hedging via interest rate swaps reducing the volatility to interest rate fluctuations (discussed below).
The impact of interest rate volatility at the end of 2024 compared to 2023 is the following:
| \n In \u20ac million | \n\n Sensitivity to a + 100bp movement in EUR market interest rates | \n\n Sensitivity to a - 100bp movement in EUR market interest rates | \n||
|---|---|---|---|---|
| \n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n|
| \n Profit or loss | \n\n 0 | \n\n -7 | \n\n 0 | \n\n 6 | \n
The sensitivity to interest rates volatility on the floating gross financial debt remains insignificant at the end of 2024 compared to 2023 thanks to the interest rates hedging. Most of the sensitivity disclosed in 2023 corresponds to the remaining volatility between the maximum interest rate payable (cap strike rate) and the minimum rate (floor strike rate) following the hedging of the bridge facility (\u20ac1,500 million) via zero cost interest collar.
Effects of IBOR market developments
All the new Liquidity Facilities (RCF, Bilateral lines) have been negotiated using only SOFR reference index and not IBOR anymore. This will not have any impact financially.
The ISDA's agreements were as well amended to include the SOFR.
All the other old agreements (before June 2023) still reflect IBOR on the agreements. Banks in that case will apply market standard approach and use the new SOFR reference rate for those agreements, therefore will not have an impact on our financial charges nor relations.
Interest rate risk hedged by instrument accounted for as held for trading
In 2024 and 2023, there are no outstanding interest rate instruments accounted for as held for trading.
Interest rate risk hedged by instrument accounted for as a hedging instrument in a cash flow hedge
In comparison to 2023, the remaining interest rate hedging is the hedge executed on the \u20ac200 million floating term loan.
All the other hedging relationships were settled following the repayment of the \u20ac1,500 million bridge facility drawdown and the issuance of the senior bonds totaling \u20ac1,500 million.
| \n Cash flow hedges on floating interests rates | \n\n December 31, 2024 | \n||||||
|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument | \n\n Notional amount of the risk exposure | \n\n Percentage of exposure hedged | \n\n Hedge interest rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Assets | \n\n Liabilities | \n||||||
| \n Floating rate debt (Euribor6M) | \n\n 200 | \n\n 200 | \n\n 100% | \n\n 3.52% | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n 1.99% | \n\n 0 | \n\n 0 | \n\n 0 | \n
As of December 31, 2024, the cash-flow hedge reserve for interest rate risk also includes an amount of \u20ac 31 million related to the unwound Flexiswap hedge instruments and is recycled to profit or loss over the duration of the two bonds. On the Statement of Financial Position, the Flexiswap hedging instruments were replaced by two new instruments classified as financial debt, presented within \"Other borrowings from third parties\" in Note F33.
| \n Cash flow hedges on floating interests rates | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument | \n\n Notional amount of the risk exposure | \n\n Percentage of exposure hedged | \n\n Hedge interest rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Assets | \n\n Liabilities | \n||||||
| \n Floating rate debt (Euribor6M) | \n\n 200 | \n\n 200 | \n\n 100% | \n\n 3.52% | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n Floating rate debt (Euribor1M) | \n\n 1,500 | \n\n 1,500 | \n\n 100% | \n\n 3.55% | \n\n -1 | \n\n 0 | \n\n -1 | \n
| \n Future long-term refinancing (Euribor6M) | \n\n 750 | \n\n 750 | \n\n 100% | \n\n 3,20% + Fixed Margin | \n\n -25 | \n\n 0 | \n\n -25 | \n
| \n Future long-term refinancing (Euribor6M) | \n\n 750 | \n\n 750 | \n\n 100% | \n\n 3,05% + Fixed Margin | \n\n -33 | \n\n 0 | \n\n -33 | \n
Utility and CO2 price risks
The Group purchases a large portion of its coal, gas and electricity needs in Europe and the United States based on fluctuating liquid market indices. Moreover, the Group purchases raw materials with a price formula referring to market indices. In order to reduce the cost volatility, the Group has developed a policy for exchanging variable price against fixed price through derivative financial instruments. Most of these hedging instruments can be documented as hedging instruments of the underlying purchase contracts. Utility purchase contracts at fixed price with a physical delivery for use in the Group's operations are qualified as own use contracts and constitute a natural hedge. Those have not been included in this note.
Financial hedging of utility and CO2 emission rights price risks is managed centrally by Energy Services on behalf of the Group entities.
Energy Services also carries out trading transactions with respect to utility and CO2.
The following tables detail the notional principal amounts and fair values of utility and CO2 derivative financial instruments outstanding at the end of the reporting period:
| \n Held for trading | \n\n Notional amount of the instrument(1) | \n\n Notional amount of the instrument (in units) | \n\n Fair value of the instrument - Asset | \n\n Fair value of the instrument - Liability | \n|||||
|---|---|---|---|---|---|---|---|---|---|
| \n December 31 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n \n | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n
| \n In \u20ac million (except where indicated) | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Power | \n\n \n | \n\n 22 | \n\n \n | \n\n 118,090 | \n\n MWh | \n\n 0 | \n\n 0 | \n\n 0 | \n\n -13 | \n
| \n Standard Quality Gas | \n\n 1 | \n\n 21 | \n\n 10,220 | \n\n 811,174 | \n\n MWh | \n\n 1 | \n\n 0 | \n\n -1 | \n\n 0 | \n
| \n CO2 | \n\n 9 | \n\n 9 | \n\n 360,250 | \n\n 394,500 | \n\n Tons | \n\n 0 | \n\n 0 | \n\n -18 | \n\n -26 | \n
| \n Total | \n\n 10 | \n\n 52 | \n\n \n | \n\n \n | \n\n \n | \n\n 1 | \n\n 0 | \n\n -19 | \n\n -39 | \n
(1)The hedging instruments are located in the line item: \"Other Receivables\" and \"Other Liabilities\" in the consolidated statement of financial position.
The amounts presented in the tables hereafter include hedging needs of the GBUs of the Group that are sourced through Energy Services, and not the full Group utility hedging needs.
| \n \n | \n\n December 31, 2024 | \n|||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| \n Cash flow hedge | \n\n Notional amount of the instrument(1) | \n\n Notional amount of\u00a0the instrument (in units) | \n\n \n | \n\n Notional amount of the risk exposure | \n\n Notional amount of the risk exposure (in units) | \n\n \n | \n\n Percentage of exposure hedged | \n\n Average hedge price per\u00a0risk category | \n\n \n | \n\n Cash flow hedge reserve | \n\n Fair value of the instrument - Asset | \n\n Fair value of the instrument - Liability | \n
| \n In \u20ac million | \n||||||||||||
| \n Power | \n\n 224 | \n\n 2,205,840 | \n\n MWh | \n\n 417 | \n\n 3,772,347 | \n\n MWh | \n\n 58% | \n\n 102 | \n\n EUR/MWh | \n\n -29 | \n\n 0 | \n\n -29 | \n
| \n Standard Quality Gas | \n\n 361 | \n\n 13,463,715 | \n\n MWh | \n\n 1,056 | \n\n 26,558,004 | \n\n MWh | \n\n 51% | \n\n 22 | \n\n EUR/MWh | \n\n 35 | \n\n 53 | \n\n -18 | \n
| \n CO2(2) | \n\n 341 | \n\n 4,292,750 | \n\n Tons | \n\n 872 | \n\n 10,616,000 | \n\n Tons | \n\n 40% | \n\n 75 | \n\n EUR/Tons | \n\n -9 | \n\n 23 | \n\n -32 | \n
| \n Total | \n\n 926 | \n\n \n | \n\n \n | \n\n 2,345 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n -3 | \n\n 76 | \n\n -79 | \n
(1)The hedging instruments are in the line item: \"Other Receivables\" and \"Other Liabilities\" in the consolidated statement of financial position.
(2)Excluding the reserve frozen in OCI, following roll-over transactions (\u20ac(44) million).
| \n Cash flow hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| \n In \u20ac million | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Power | \n\n 112 | \n\n 781,326 | \n\n MWh | \n\n 181 | \n\n 1,763,316 | \n\n MWh | \n\n 44% | \n\n 142 | \n\n EUR/MWh | \n\n 30 | \n\n 33 | \n\n -3 | \n
| \n Standard Quality Gas | \n\n 245 | \n\n 12,343,602 | \n\n MWh | \n\n 579 | \n\n 24,542,118 | \n\n MWh | \n\n 50% | \n\n 27 | \n\n EUR/MWh | \n\n -41 | \n\n 15 | \n\n -56 | \n
| \n CO2(2) | \n\n 553 | \n\n 3,469,500 | \n\n Tons | \n\n 801 | \n\n 9,230,909 | \n\n Tons | \n\n 38% | \n\n 87 | \n\n EUR/Tons | \n\n -43 | \n\n 0 | \n\n -44 | \n
| \n Total | \n\n 910 | \n\n \n | \n\n \n | \n\n 1,561 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n -54 | \n\n 48 | \n\n -102 | \n
(1)The hedging instruments are located in the line item: \"Other Receivables\" and \"Other Liabilities\" in the consolidated statement of financial position.
(2)Excluding the reserve frozen in OCI, following roll-over transactions (\u20ac(33) million).
In 2024, the group changed its hedge relationship on CO2 emission rights price risk which resulted in the discontinuance of hedging cash flow hedge relationship at the end of December 2024. The related loss of \u20ac(38) million was recognized in other operating gains and losses in the consolidated income statement.
Fair value hedge
The Group covered a part of its CO2 emission rights in inventory by forward sales of CO2 emission rights to a related party. The Group qualifies this hedging strategy as fair value hedge. The change in fair value of forward sales is accounted for in profit and loss, concomitantly with the revaluation of the CO2 emission rights held in\u00a0inventory.
The Group has established a 1:1 hedge ratio for the underlying risk of the forward sales of CO2 emission rights to the related party that is identical to the hedged risk component.
The impact of the hedging instrument on the statement of financial position as at December 31, 2024, is as follows:
| \n \n | \n\n December 31, 2024 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n \n | \n\n -1 | \n\n Financial Instrument | \n\n \n | \n\n 0 | \n
| \n \n | \n\n December 31, 2024 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n 2 | \n\n \n | \n\n Inventories | \n\n 0 | \n\n \n | \n
| \n \n | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n \n | \n\n -2 | \n\n Financial Instrument | \n\n 1 | \n\n -1 | \n
| \n \n | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n \n | \n\n 2 | \n\n Inventories | \n\n 1 | \n\n \n | \n
The sensitivities of commodity derivative financial instruments as of December 31, 2024, are presented below.
The sensitivities were defined based on the price levels and volatility levels of each commodity. These assumptions do not constitute an estimation of future market prices, and the sensitivities presented are not representative of future changes in Solvay's equity and results.
| \n In \u20acmillion | \n\n December 31, 2024 | \n||
|---|---|---|---|
| \n Price change | \n\n Other comprehensive income | \n\n Profit or loss | \n|
| \n Natural gas | \n\n +10\u20ac /MWh | \n\n -102 | \n\n 0 | \n
| \n Natural gas | \n\n -10\u20ac /MWh | \n\n 102 | \n\n 0 | \n
| \n Electricity | \n\n +30\u20ac /MWh | \n\n 66 | \n\n 0 | \n
| \n Electricity | \n\n -30\u20ac /MWh | \n\n -66 | \n\n 0 | \n
| \n CO2 emission rights | \n\n +5\u20ac /T | \n\n -21 | \n\n -2 | \n
| \n CO2 emission rights | \n\n -5\u20ac /T | \n\n 21 | \n\n 2 | \n
Performance Share Units Plan (PSU) and Restricted Share Units (RSU) risk on Solvay and Syensqo share price
The last cash settled PSU plan (granted in 2021) vested on 31/12/2023 and was paid out in June 2024. The PSU/RSU plans granted as from 2022 are equity settled. The RSU plan 2022 will deliver Solvay and Syensqo shares. The PSU/RSU plans 2023 and 2024 will deliver Solvay shares only. These PSU/RSU plans are hedged with treasury shares. However, in order to neutralize the volatility of the Syensqo share price, which will impact the liability valuation relating to the RSU plan 2022, the Group has entered into a hedge (equity forward transaction) covering 100% of the risk.
See the Financial risk in the Management of risks section of this annual report for additional information on credit risk management.
The Group continuously monitors the credit risk of important business partners.
The Group engages in transactions only with financial institutions with a good credit rating. The Group monitors and manages exposures to financial institutions within approved counterparty credit limits and credit risk parameters in order to mitigate the risk of default. For financial guarantees, see note F36 Contingent liabilities and financial guarantees.
The Group recognizes expected credit losses on all of its trade receivables: it applies the simplified approach and recognizes lifetime expected losses on all trade receivables, using a provision matrix in order to calculate the lifetime expected credit losses for trade receivables, using historical information on defaults adjusted for the forward-looking information.
The Group classifies the customers and their related receivables in various rating classes, based on the risks\u2019 grading attributed to the customers and on the aging balance of receivables. As such, for all receivables overdue below six months, the Group considers percentages within a range between 0.005% and 4.031%, depending on the rating class. For all receivables overdue in excess of six months, the Group considers a rate of 50% or of 100%, depending on the rating class. The customer\u2019s grading is reviewed annually for customers assessed as low risk profile, and every six months for customers assessed as higher risk profile.
There is no significant concentration of credit risk at Group level because the receivables\u2019 credit risk is spread over a large number of customers and markets.
The aging of trade receivables, financial instruments \u2013 operational, loans and other non-current assets is as follows:
| \n December 31, 2024 | \n\n With expected loss allowance, not credit-impaired | \n||||||
|---|---|---|---|---|---|---|---|
| \n In \u20ac million | \n\n Total | \n\n Credit-impaired | \n\n not past due | \n\n less than 30 days past due | \n\n between 30 and 60 days past due | \n\n between 60 and 90 days past due | \n\n more than 90 days past due | \n
| \n Trade receivables | \n\n 850 | \n\n 22 | \n\n 804 | \n\n 18 | \n\n 1 | \n\n 2 | \n\n 2 | \n
| \n Trade receivables - allowance | \n\n -23 | \n\n -20 | \n\n -1 | \n\n \n | \n\n \n | \n\n \n | \n\n -2 | \n
| \n Trade receivables - net | \n\n 826 | \n\n 2 | \n\n 803 | \n\n 18 | \n\n 1 | \n\n 2 | \n\n 0 | \n
| \n Financial instruments - operational | \n\n 80 | \n\n \n | \n\n 80 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets(1) | \n\n 116 | \n\n 4 | \n\n 111 | \n\n 0 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - allowance | \n\n -4 | \n\n -4 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - net(1) | \n\n 112 | \n\n 0 | \n\n 111 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total | \n\n 1,018 | \n\n 3 | \n\n 994 | \n\n 18 | \n\n 1 | \n\n 2 | \n\n 0 | \n
(1)Loans and other non-current assets do not include pension fund surplus and CO2 -term inventory.
| \n December 31, 2023 | \n\n With expected loss allowance, not credit-impaired | \n||||||
|---|---|---|---|---|---|---|---|
| \n In \u20ac million | \n\n Total | \n\n Credit-impaired | \n\n not past due | \n\n less than 30 days past due | \n\n between 30 and 60 days past due | \n\n between 60 and 90 days past due | \n\n more than 90 days past due | \n
| \n Trade receivables | \n\n 894 | \n\n 55 | \n\n 802 | \n\n 28 | \n\n 1 | \n\n 6 | \n\n 3 | \n
| \n Trade receivables - allowance | \n\n -54 | \n\n -53 | \n\n -1 | \n\n \n | \n\n \n | \n\n \n | \n\n -1 | \n
| \n Trade receivables - net | \n\n 840 | \n\n 3 | \n\n 801 | \n\n 28 | \n\n 1 | \n\n 6 | \n\n 2 | \n
| \n Financial instruments - operational | \n\n 66 | \n\n \n | \n\n 66 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets(1) | \n\n 140 | \n\n 4 | \n\n 135 | \n\n 0 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - allowance | \n\n -4 | \n\n -4 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - net(1) | \n\n 136 | \n\n 0 | \n\n 135 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total | \n\n 1,042 | \n\n 3 | \n\n 1,002 | \n\n 28 | \n\n 1 | \n\n 6 | \n\n 2 | \n
(1) Loans and other non-current assets do not include pension fund surplus and CO2 emission rights inventory.
The table below presents the allowances on trade receivables:
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n January 1 | \n\n -54 | \n\n -72 | \n
| \n Additions | \n\n -3 | \n\n -11 | \n
| \n Uses | \n\n 12 | \n\n 5 | \n
| \n Reversal | \n\n 15 | \n\n 9 | \n
| \n Currency translation differences | \n\n 2 | \n\n -1 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n
| \n Partial Demerger | \n\n \n | \n\n 14 | \n
| \n Other | \n\n 5 | \n\n 0 | \n
| \n December 31 | \n\n -23 | \n\n -54 | \n
See the Financial risk in the Management of risks section of this annual report for additional information on the liquidity risk management.
Liquidity risk relates to Solvay\u2019s ability to service and refinance its debt (including notes issued) and to fund its operations.
This depends on its ability to generate cash from operations and not to overpay for acquisitions. In addition, external factors impacting the global liquidity markets could also make financing sources less accessible.
The Finance Committee gives its opinion on the appropriate liquidity risk management for the Group\u2019s short-, medium-, and long-term funding and liquidity management requirements.
The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecasts and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
The Group staggers the maturities of its financing sources over time in order to limit amounts to be refinanced each year.
The following tables detail the Group\u2019s remaining contractual maturity for its financial liabilities with contractual repayment periods.
The tables have been prepared using the discounted cash flows of financial liabilities, based on the earliest date on which the Group can be required to pay.
The following tables present discounted amounts (carrying amounts):
| \n In \u20ac million | \n\n December 31, 2024 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 809 | \n\n 809 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 107 | \n\n 107 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 111 | \n\n 98 | \n\n 13 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 21 | \n\n \n | \n\n 5 | \n\n 5 | \n\n 11 | \n
| \n Financial debt | \n\n 1,831 | \n\n 84 | \n\n 217 | \n\n 777 | \n\n 753 | \n
| \n Leasing debt | \n\n 306 | \n\n 70 | \n\n 36 | \n\n 92 | \n\n 108 | \n
| \n Total | \n\n 3,186 | \n\n 1,169 | \n\n 271 | \n\n 874 | \n\n 872 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 850 | \n\n 850 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 175 | \n\n 175 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 140 | \n\n 108 | \n\n 32 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 34 | \n\n \n | \n\n 12 | \n\n 2 | \n\n 20 | \n
| \n Financial debt | \n\n 1,885 | \n\n 148 | \n\n 1,711 | \n\n 23 | \n\n 3 | \n
| \n Leasing debt | \n\n 307 | \n\n 63 | \n\n 44 | \n\n 92 | \n\n 107 | \n
| \n Total | \n\n 3,390 | \n\n 1,344 | \n\n 1,799 | \n\n 117 | \n\n 130 | \n
The following tables present undiscounted amounts (nominal value):
| \n In \u20ac million | \n\n December 31, 2024 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 809 | \n\n 809 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 107 | \n\n 107 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 111 | \n\n 98 | \n\n 13 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 21 | \n\n \n | \n\n 5 | \n\n 5 | \n\n 11 | \n
| \n Financial debt | \n\n 1,842 | \n\n 84 | \n\n 219 | \n\n 781 | \n\n 757 | \n
| \n Leasing debt | \n\n 306 | \n\n 70 | \n\n 36 | \n\n 92 | \n\n 108 | \n
| \n Total | \n\n 3,196 | \n\n 1,169 | \n\n 273 | \n\n 878 | \n\n 876 | \n
| \n Interests on financial debt and lease liabilities | \n\n 412 | \n\n 75 | \n\n 71 | \n\n 174 | \n\n 91 | \n
| \n Total outflows of cash | \n\n 3,608 | \n\n 1,244 | \n\n 345 | \n\n 1,052 | \n\n 967 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 850 | \n\n 850 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 175 | \n\n 175 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 140 | \n\n 108 | \n\n 32 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 34 | \n\n \n | \n\n 12 | \n\n 2 | \n\n 20 | \n
| \n Financial debt | \n\n 1,886 | \n\n 148 | \n\n 1,711 | \n\n 23 | \n\n 4 | \n
| \n Leasing debt | \n\n 307 | \n\n 63 | \n\n 44 | \n\n 92 | \n\n 107 | \n
| \n Total | \n\n 3,391 | \n\n 1,344 | \n\n 1,799 | \n\n 117 | \n\n 131 | \n
| \n Interests on financial debt and lease liabilities | \n\n 179 | \n\n 82 | \n\n 61 | \n\n 17 | \n\n 19 | \n
| \n Total outflows of cash | \n\n 3,570 | \n\n 1,426 | \n\n 1,860 | \n\n 134 | \n\n 150 | \n
Solvay\u2019s liquidity amounts to \u20ac2.0 billion including \u20ac0.6 billion of cash and cash equivalents on the statement of financial position and \u20ac1.4 billion of committed fully undrawn credit facilities (\u20ac1.1 billion multilateral RCF maturing in 2029 with extension possibility, and \u20ac0.3 billion bilateral RCF maturing in 2027 with extension possibilities) unused at the end of December 2024.
In addition, Solvay has access to a Belgian Treasury Bill program for \u20ac1.0 billion (no outstanding balance on December 31, 2024). The program is covered by a back-up credit line.
See below (section F32.E) for further details on supplier financing programs within trade payables.
fAccounting policy
General
The Group classifies financial liabilities that arise from supplier finance arrangements within Trade and other payables in the statement of financial position if they have a similar nature and function to trade payables. This is the case if the supplier finance arrangement is part of the working capital used in the Group\u2019s normal operating cycle, the level of security provided is similar to trade payables and the terms of the liabilities that are part of the supply chain finance arrangement are not substantially different from the terms of trade payables that are not part of the arrangement. Cash flows related to liabilities arising from supplier finance arrangements that are classified in Trade and other payables in the consolidated statement of financial position are included in operating activities in the consolidated statement of cash flows.
First application in 2024
This disclosure requirement was introduced by the Amendments Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7), published in May 2023 by the IASB. The amendments are effective for periods beginning on or after 1 January 2024. In the year of initial application, the requirements only apply to the annual financial report and the disclosure does not need to provide the comparative figures.
Terms and conditions
The Group has established a supplier finance arrangement that is offered to some of the Group\u2019s key suppliers. Participation in the arrangement is at the suppliers\u2019 own discretion. Suppliers that participate in the supplier finance arrangement will receive early payment on invoices sent to the Group from the Group\u2019s external finance provider. If suppliers choose to receive early payment, they pay a fee to the finance provider, to which the Group is not a party. For the finance provider to pay the invoices, the goods must have been received or supplied and the invoices approved by the Group. Payments to suppliers ahead of the invoice due date are processed by the finance provider and, in all cases, the Group settles the original invoice by paying the finance provider in line with the original invoice maturity date described above.
The Group assesses each arrangement against indicators to determine if the liabilities which suppliers have sold to the partner bank under the supplier financing scheme continue to meet the definition of trade payables or should be classified as financial debt. On December 31, 2024 and 2023, all trade payables subject to the supplier finance arrangement meet the criteria of trade payables and are included in trade payables in the consolidated statement of financial position.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n\n January 1, 2023 | \n
|---|---|---|---|
| \n Carrying amount of financial liabilities | \n\n \n | \n\n \n | \n\n \n | \n
| \n Presented in trade and other payables | \n\n 62 | \n\n N/A | \n\n N/A | \n
| \n \u2022of which suppliers have received payment from finance provider | \n\n 47 | \n\n N/A | \n\n N/A | \n
| \n Range of payment due dates (days after the invoice date) | \n\n \n | \n\n \n | \n\n \n | \n
| \n Liabilities that are part of the arrangement | \n\n 102-106 days | \n\n N/A | \n\n N/A | \n
| \n Comparable trade payables that are not part of the arrangements | \n\n 45-49 days | \n\n N/A | \n\n N/A | \n
NOTE F32
Financial instruments and financial risk management
fAccounting policy
General
Financial assets and liabilities are recognized when, and only when Solvay becomes a party to the contractual provisions of the instrument.
Amortized cost is the amount at which the financial asset or financial liability is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity amount and, for financial assets, adjusted for any loss allowance. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial asset or financial liability to the gross carrying amount of a financial asset or to the amortized cost of a financial liability. When calculating the effective interest rate, the Group estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses. The calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs, and all other premiums or discounts.
Financial assets
Trade receivables are initially measured at their transaction price, if they do not contain a significant financing component, which is the case for substantially all trade receivables. Other financial assets are initially measured at fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset.
A financial asset is classified as current when the cash flows expected to flow from the instrument mature within one year.
All recognized financial assets will subsequently be measured at either amortized cost or fair value under IFRS 9 Financial Instruments, specifically:
\u2022A debt instrument that (i) is held within a business model whose objective is to collect the contractual cash flows and (ii) has contractual cash flows that are solely payments of principal and interest on the principal amount outstanding is measured at amortized cost (net of any write down for impairment), unless the asset is designated at fair value through profit or loss (FVTPL) under the fair value option.
\u2022All other debt instruments are measured at FVTPL.
\u2022All equity investments are measured in the consolidated statement of financial position at fair value, with gains and losses recognized in profit or loss except that if an equity investment is not held for trading, nor contingent consideration recognized by an acquirer in a business combination, an irrevocable election can be made at initial recognition to measure the investment at FVTOCI, with dividend income recognized in profit or loss. This classification is determined on an instrument-by-instrument basis. Upon derecognition, the cumulative gains or losses previously recognized in other comprehensive income are reclassified to retained earnings.
\u2022Equity investments in partnerships of investment funds are measured in the consolidated statement of financial position at fair value with gains and losses recognized in profit or loss. Based on the analysis of the characteristics of these funds the Group determined that they were not eligible for the FVTOCI option and therefore are accounted for at FVTPL.
\u2022For instruments quoted in an active market, the fair value corresponds to a market price (level 1). For instruments that are not quoted in an active market, the fair value is determined using valuation techniques including reference to recent arm\u2019s length market transactions or transactions involving instruments which are substantially the same (level 2), or discounted cash flow analysis including, to the greatest possible extent, assumptions consistent with observable market data (level 3). However, in limited circumstances, cost of equity instruments may be an appropriate estimate of their fair value. That may be the case if insufficient more recent information is available to measure fair value, or if there is a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.
Financial liabilities
Financial liabilities are initially measured at fair value minus, in the case of a financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the issue of the financial liability. Subsequently, they are measured at amortized cost, except for:
\u2022financial liabilities at fair value through profit or loss. Such liabilities, including derivatives that are liabilities, are subsequently measured at fair value;
\u2022financial guarantee contracts. After initial recognition, guarantees are subsequently measured at the higher of the expected losses and the amount initially recognized.
Derivative financial instruments
A derivative financial instrument is a financial instrument or other contract within the scope of IFRS 9 Financial Instruments with all three of the following characteristics:
\u2022its value changes in response to the change in a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract (sometimes called the \"underlying\");
\u2022it requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors;
\u2022it is settled at a future date.
The Group enters into a variety of derivative financial instruments (forward, future, option, collars and swap contracts) to manage its exposure to interest rate risk, foreign exchange rate risk, and commodity risk (mainly utility and CO2 emission rights price risks).
As explained above, derivatives are initially recognized at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in income or expense, unless the derivative is designated and effective as a hedging instrument. The Group designates certain derivatives as hedging instruments of the exposure to variability in cash flows with respect to a recognized asset or liability or a highly probable forecast transaction that could affect profit or loss (cash flow hedges).
A derivative with a positive fair value is recognized as a financial asset whereas a derivative with a negative fair value is recognized as a financial liability. Derivative instruments (or portions of them) are presented as non-current assets or non-current liabilities if the remaining maturity of the underlying settlements is more than 12 months after the reporting period. Other derivative instruments (or portions of them) are presented as current assets or current liabilities.
The following table presents the financial assets and liabilities as current or non-current according to their classification under IFRS 9.
| \n In \u20ac million | \n\n Classification | \n\n 31 December 2024 | \n\n 31 December 2023 | \n
|---|---|---|---|
| \n Carrying amount | \n\n Carrying amount | \n||
| \n Non-current assets - Financial instruments | \n\n \n | \n\n 194 | \n\n 234 | \n
| \n Available-for-sale financial assets | \n\n \n | \n\n \n | \n\n \n | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n Financial assets measured at fair value through other comprehensive income | \n\n 8 | \n\n 1 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n Financial assets measured at fair value through profit or loss | \n\n 55 | \n\n 87 | \n
| \n Loans and other non-current assets (excluding pension fund surpluses and long-term inventory balance) | \n\n Financial assets measured at amortized cost | \n\n 118 | \n\n 136 | \n
| \n Others | \n\n \n | \n\n 118 | \n\n 136 | \n
| \n Financial instruments - Operational | \n\n \n | \n\n 13 | \n\n 10 | \n
| \n Held for trading | \n\n Held for trading | \n\n 0 | \n\n 5 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship | \n\n Cash-flow hedge | \n\n 13 | \n\n 5 | \n
| \n Current assets - Financial instruments | \n\n \n | \n\n 1,448 | \n\n 1,598 | \n
| \n Trade receivables | \n\n Financial assets measured at amortized cost | \n\n 826 | \n\n 840 | \n
| \n Other financial instruments | \n\n \n | \n\n 16 | \n\n 118 | \n
| \n Other marketable securities >3 months | \n\n Financial assets measured at amortized cost | \n\n 4 | \n\n 50 | \n
| \n Currency swaps | \n\n Held for trading | \n\n 1 | \n\n 2 | \n
| \n Other current financial assets | \n\n Financial assets measured at amortized cost | \n\n 11 | \n\n 66 | \n
| \n Financial instruments - Operational | \n\n \n | \n\n 67 | \n\n 56 | \n
| \n Held for trading | \n\n Held for trading | \n\n 2 | \n\n 11 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship | \n\n Cash-flow hedge | \n\n 64 | \n\n 45 | \n
| \n Cash and cash equivalents | \n\n Financial assets measured at amortized cost | \n\n 539 | \n\n 584 | \n
| \n Total assets - Financial instruments | \n\n \n | \n\n 1,642 | \n\n 1,833 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current liabilities - Financial instruments | \n\n \n | \n\n 2,017 | \n\n 2,051 | \n
| \n Financial debt | \n\n \n | \n\n 1,983 | \n\n 1,981 | \n
| \n Bonds | \n\n Financial liabilities measured at amortized cost | \n\n 1,492 | \n\n 0 | \n
| \n Other non-current debts | \n\n Financial liabilities measured at amortized cost | \n\n 253 | \n\n 1,735 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship | \n\n Cash-flow hedge | \n\n 2 | \n\n 2 | \n
| \n Lease liabilities IFRS 16 - Non-current portion | \n\n Lease liabilities measured at amortized cost | \n\n 236 | \n\n 243 | \n
| \n Other liabilities | \n\n Financial liabilities measured at amortized cost | \n\n 21 | \n\n 39 | \n
| \n Financial instruments - Operational | \n\n \n | \n\n 13 | \n\n 32 | \n
| \n Held for trading | \n\n Held for trading | \n\n 1 | \n\n 17 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship | \n\n Cash-flow hedge | \n\n 11 | \n\n 15 | \n
| \n Current liabilities - Financial instruments | \n\n \n | \n\n 1,170 | \n\n 1,344 | \n
| \n Financial debt | \n\n \n | \n\n 155 | \n\n 211 | \n
| \n Short-term financial debt | \n\n Financial liabilities measured at amortized cost | \n\n 83 | \n\n 88 | \n
| \n Currency swaps | \n\n Held for trading | \n\n 2 | \n\n 1 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship | \n\n Cash-flow hedge | \n\n \n | \n\n 59 | \n
| \n Lease liabilities IFRS 16 - Current portion | \n\n Lease liabilities measured at amortized cost | \n\n 70 | \n\n 63 | \n
| \n Trade payables | \n\n Financial liabilities measured at amortized cost | \n\n 810 | \n\n 850 | \n
| \n Financial instruments - Operational | \n\n \n | \n\n 98 | \n\n 108 | \n
| \n Held for trading | \n\n Held for trading | \n\n 24 | \n\n 19 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship | \n\n Cash-flow hedge | \n\n 74 | \n\n 88 | \n
| \n Dividends payables | \n\n Financial liabilities measured at amortized cost | \n\n 107 | \n\n 175 | \n
| \n Total liabilities - Financial instruments | \n\n \n | \n\n 3,187 | \n\n 3,395 | \n
In 2024 and 2023, long-term CO2 inventory balances reported are not financial assets and hence are not included in the table above. They are presented as other non-current assets.
The following table gives an overview of the carrying amount of all financial instruments by category as defined by IFRS 9.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Carrying amount | \n\n Carrying amount | \n|
| \n Fair value through profit or loss | \n\n 59 | \n\n 105 | \n
| \n Held for trading (financial instruments - operational - see note F26) | \n\n 2 | \n\n 16 | \n
| \n Held for trading (other financial instruments - see note F33, table Changes in financial debt) | \n\n 1 | \n\n 2 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n 55 | \n\n 87 | \n
| \n Financial assets measured at amortized cost | \n\n 1,497 | \n\n 1,677 | \n
| \n Financial assets measured at amortized cost (including cash and cash equivalents, trade receivables, loans and other current/non-current assets except pension fund surpluses and long-term inventory balance) | \n\n 1,497 | \n\n 1,677 | \n
| \n Financial assets measured at fair value through other comprehensive income | \n\n 85 | \n\n 51 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship (see note F26) | \n\n 78 | \n\n 50 | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n 8 | \n\n 1 | \n
| \n Total financial assets | \n\n 1,642 | \n\n 1,833 | \n
| \n \n | \n\n \n | \n\n \n | \n
| \n Fair value through profit or loss | \n\n -27 | \n\n -37 | \n
| \n Held for trading (financial instruments - operational - see note F34) | \n\n -26 | \n\n -36 | \n
| \n Held for trading (financial debt - see note F33, table Changes in financial debt) | \n\n -2 | \n\n -1 | \n
| \n Financial liabilities measured at amortized cost | \n\n -2,766 | \n\n -2,887 | \n
| \n Financial liabilities measured at amortized cost (excluding dividends payable and IFRS 16 lease liabilities) | \n\n -2,659 | \n\n -2,712 | \n
| \n Dividends payables | \n\n -107 | \n\n -175 | \n
| \n Lease liabilities measured at amortized cost | \n\n -306 | \n\n -307 | \n
| \n Lease liabilities IFRS16 measured at amortized cost | \n\n -306 | \n\n -307 | \n
| \n Financial liabilities measured at fair value through other comprehensive income | \n\n -88 | \n\n -165 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship (see note F34) | \n\n -88 | \n\n -165 | \n
| \n Total financial and lease liabilities | \n\n -3,187 | \n\n -3,395 | \n
The category \u201cHeld for trading\u201d contains derivative financial instruments that are used for management of foreign currency risk, utility and CO2 emission rights price risks, index and shares. Contracts which have been documented as hedging instruments (hedge accounting under IFRS 9 Financial Instruments) or which meet the exemption criteria for own use are not included in the category \u201cHeld for trading.\u201d
At the end of 2024, \u20ac55 million of instruments at fair value through profit or loss relate to equity instruments related to Syensqo Group.
Valuation techniques and assumptions used for measuring fair value.
fAccounting policy
Quoted market prices are available for financial assets and financial liabilities with standard terms and conditions that are traded on active markets. The fair values of derivative financial instruments are equal to their quoted prices, if available. In case such quoted prices are not available, the fair value of the financial instruments is determined based on a discounted cash flow analysis using the applicable yield curve derived from quoted interest rates matching maturities of the contracts for non-optional derivatives. Optional derivatives are fair valued based on option pricing models, taking into account the present value of probability weighted expected future payoffs, using market reference formulas.
The fair values of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||
|---|---|---|---|---|
| \n Carrying amount | \n\n Fair value | \n\n Carrying amount | \n\n Fair value | \n|
| \n Non-current assets - Financial instruments | \n\n 118 | \n\n 118 | \n\n 136 | \n\n 136 | \n
| \n Loans and other non-current assets (except pension fund surpluses and long-term inventory balance) | \n\n 118 | \n\n 118 | \n\n 136 | \n\n 136 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current liabilities - Financial instruments | \n\n -1,766 | \n\n -1,814 | \n\n -1,774 | \n\n -1,774 | \n
| \n Bonds | \n\n -1,492 | \n\n -1,540 | \n\n 0 | \n\n 0 | \n
| \n Other non-current debts | \n\n -253 | \n\n -253 | \n\n -1,735 | \n\n -1,735 | \n
| \n Other liabilities | \n\n -21 | \n\n -21 | \n\n -39 | \n\n -39 | \n
The carrying amounts of current financial assets and liabilities are estimated to reasonably approximate their fair values, due to the short term to maturity.
The table \u201cFinancial instruments measured at fair value in the consolidated statement of financial position\u201d provides an analysis of financial instruments that, after their initial recognition, are measured at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable. Financial instruments classified as held for trading and as hedging instruments in cash flow hedges are mainly grouped into Levels 1 and 2. They are fair valued based on forward pricing and swap models using present value calculations. The models incorporate various inputs including foreign exchange spot and interest rates of the respective currencies, currency basis spreads between the respective currencies, interest rate curves and forward rate curves of the underlying commodity. The equity instruments measured at fair value through OCI and through profit and loss are presented within Level 1 and 3. The fair value of the instruments presented under Level 3 is measured based on the guidelines recommended by The International Private Equity and Venture Capital Valuation (IPEV).
In accordance with the Group internal rules, the responsibility for measuring the fair value level resides with (a) the Treasury department for the non-utility derivative financial instruments, and the non-derivative financial liabilities, (b) the Sustainable Development and Energy department for the utility derivative financial instruments and (c) the Finance department for non-derivative financial assets.
The Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. During the year, no such transfers have occurred.
| \n In \u20ac million | \n\n December 31, 2024 | \n|||
|---|---|---|---|---|
| \n Level 1 | \n\n Level 2 | \n\n Level 3 | \n\n Total | \n|
| \n Held for trading | \n\n 0 | \n\n 4 | \n\n 0 | \n\n 4 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Shares | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022Index | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n 55 | \n\n \n | \n\n 0 | \n\n 55 | \n
| \n \u2022Shares | \n\n 55 | \n\n \n | \n\n \n | \n\n 55 | \n
| \n Cash flow hedges | \n\n 0 | \n\n 77 | \n\n 0 | \n\n 77 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n \n | \n\n 53 | \n\n 0 | \n\n 53 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 23 | \n\n 0 | \n\n 23 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n 0 | \n\n 0 | \n\n 8 | \n\n 8 | \n
| \n \u2022Shares | \n\n \n | \n\n \n | \n\n 8 | \n\n 8 | \n
| \n Total (assets) | \n\n 55 | \n\n 81 | \n\n 8 | \n\n 144 | \n
| \n \n | \n||||
| \n Held for trading | \n\n 0 | \n\n -27 | \n\n 0 | \n\n -27 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -4 | \n\n 0 | \n\n -4 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n -18 | \n\n 0 | \n\n -18 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Index | \n\n 0 | \n\n -3 | \n\n 0 | \n\n -3 | \n
| \n Cash flow hedges | \n\n 0 | \n\n -87 | \n\n 0 | \n\n -87 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -7 | \n\n 0 | \n\n -7 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n \u2022Utility risk | \n\n \n | \n\n -47 | \n\n 0 | \n\n -47 | \n
| \n \u2022CO2 risk | \n\n \n | \n\n -32 | \n\n 0 | \n\n -32 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total (liabilities) | \n\n 0 | \n\n -115 | \n\n 0 | \n\n -115 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n|||
|---|---|---|---|---|
| \n Level 1 | \n\n Level 2 | \n\n Level 3 | \n\n Total | \n|
| \n Held for trading | \n\n 0 | \n\n 17 | \n\n 0 | \n\n 18 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 3 | \n\n 0 | \n\n 3 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 4 | \n\n 0 | \n\n 5 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Shares | \n\n \n | \n\n 8 | \n\n 0 | \n\n 8 | \n
| \n \u2022Index | \n\n 0 | \n\n 2 | \n\n 0 | \n\n 2 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n 87 | \n\n 0 | \n\n 0 | \n\n 87 | \n
| \n \u2022Shares | \n\n 87 | \n\n \n | \n\n \n | \n\n 87 | \n
| \n Cash flow hedges | \n\n 0 | \n\n 50 | \n\n 0 | \n\n 50 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 2 | \n\n 0 | \n\n 2 | \n
| \n \u2022 Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 47 | \n\n 0 | \n\n 48 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n 0 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n Total (assets) | \n\n 87 | \n\n 67 | \n\n 1 | \n\n 156 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Held for trading | \n\n 0 | \n\n -37 | \n\n 0 | \n\n -37 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -1 | \n\n 0 | \n\n -1 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n -8 | \n\n 0 | \n\n -8 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n -26 | \n\n 0 | \n\n -26 | \n
| \n \u2022 Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Index | \n\n 0 | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n Cash flow hedges | \n\n 0 | \n\n -166 | \n\n 0 | \n\n -166 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -1 | \n\n 0 | \n\n -1 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n -61 | \n\n 0 | \n\n -61 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n -59 | \n\n 0 | \n\n -59 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n -44 | \n\n 0 | \n\n -44 | \n
| \n \u2022Shares | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n Total (liabilities) | \n\n 0 | \n\n -202 | \n\n 0 | \n\n -202 | \n
The fair value of the financial instruments to manage the utility risk reduced in 2024. This is mainly explained by the fact that Solvay had decided to concentrate on its own internal consumption only and the price increase of gas and electricity in comparison to 2023.
Reconciliation of level 3 fair value measurements of financial assets and liabilities.
| \n In \u20ac million | \n\n December 31, 2024 | \n||
|---|---|---|---|
| \n At fair value through profit or loss | \n\n At fair value through other comprehensive income | \n\n Total | \n|
| \n Equity instruments | \n\n Equity instruments | \n||
| \n Opening balance at January 1 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n Total gains or losses | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Recognized in profit or loss | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Recognized in other comprehensive income | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Acquisitions | \n\n \n | \n\n 7 | \n\n 7 | \n
| \n Capital decreases | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Partial Demerger | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Transfers out of level 3 | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Derivative instruments in designated hedge accounting relationships | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Transfer to assets held for sale | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Closing balance at December 31 | \n\n 0 | \n\n 8 | \n\n 8 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n||
|---|---|---|---|
| \n At fair value through profit or loss | \n\n At fair value through other comprehensive income | \n\n Total | \n|
| \n Equity instruments | \n\n Equity instruments | \n||
| \n Opening balance at January 1 | \n\n 47 | \n\n 24 | \n\n 71 | \n
| \n Total gains or losses | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Recognized in profit or loss | \n\n 2 | \n\n \n | \n\n 2 | \n
| \n Recognized in other comprehensive income | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Acquisitions | \n\n 0 | \n\n 8 | \n\n 8 | \n
| \n Capital decreases | \n\n \n | \n\n -1 | \n\n -1 | \n
| \n Partial Demerger | \n\n -49 | \n\n -30 | \n\n -79 | \n
| \n Closing balance at December 31 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Recognized in the consolidated income statement | \n\n \n | \n\n \n | \n
| \n Recycling from OCI of derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n -7 | \n\n 39 | \n
| \n \u2022Utility risk | \n\n -4 | \n\n -1 | \n
| \n \u2022Interest rate risk | \n\n \n | \n\n \n | \n
| \n Changes in the fair value of financial instruments held for trading | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n \n | \n\n \n | \n
| \n \u2022Utility risk | \n\n -2 | \n\n 86 | \n
| \n \u2022CO2 risk | \n\n \n | \n\n 15 | \n
| \n Recognized in the gross margin | \n\n -14 | \n\n 138 | \n
| \n Recycling from OCI of derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022CO2 risk | \n\n -38 | \n\n \n | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n
| \n Changes in the fair value of financial instruments held for trading | \n\n \n | \n\n \n | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022CO2 risk | \n\n 8 | \n\n 0 | \n
| \n \u2022Shares | \n\n -3 | \n\n 0 | \n
| \n Gains and losses (time value) on derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022CO2 risk | \n\n \n | \n\n \n | \n
| \n Foreign operating exchange gains and losses | \n\n 0 | \n\n 2 | \n
| \n Recognized in other operating gains and losses | \n\n -33 | \n\n 2 | \n
| \n Recycling from OCI of derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n Changes in the fair value of financial instruments held for trading | \n\n \n | \n\n \n | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022 Shares | \n\n 0 | \n\n 0 | \n
| \n Ineffective portion of derivative financial instruments designated in cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n Recognized in results from portfolio management and reassessments | \n\n 0 | \n\n 0 | \n
| \n Net interest expense | \n\n -79 | \n\n -24 | \n
| \n Financial charge on lease liabilities | \n\n -12 | \n\n -11 | \n
| \n Other gains and losses on net indebtedness (excluding gains and losses on items not related to financial instruments) | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n -3 | \n\n 1 | \n
| \n \u2022Interest element of financial instruments | \n\n 1 | \n\n 6 | \n
| \n \u2022Others | \n\n -3 | \n\n -6 | \n
| \n Recognized in charges on net indebtedness(*) | \n\n -97 | \n\n -33 | \n
| \n Dividends from equity instruments measured at fair value through other comprehensive income | \n\n \n | \n\n \n | \n
| \n Capital gain on available-for-sale investment posted directly to the income statement | \n\n \n | \n\n \n | \n
| \n Recycling from equity of unrecognized gain and losses related to disposed available-for-sale financial assets(*) | \n\n 0 | \n\n 0 | \n
| \n Recycling from equity of impairment losses on available-for-sale financial assets(*) | \n\n 0 | \n\n 0 | \n
| \n Total recognized in the consolidated income statement | \n\n -144 | \n\n 107 | \n
(*)The note F6 Net Financial Charges shows an amount of \u20ac(76) million for 2024 (\u20ac(41) million for 2023) reported under \u201cNet cost of borrowing\u201d. This amount includes \u20ac(3) million for 2024 (\u20ac(6) million for 2023) of financial expenses not related to financial instruments that are excluded in this table from the line item \u201cRecognized in charges on net indebtedness.\u201d
The loss on highly probable sales in foreign currency recognized in gross margin for \u20ac(7) million is mainly explained by the hedging of the US$ currency and the loss recognized on utility instruments for \u20ac(4) million.
The change in fair value of financial instruments held for trading recognized in gross margin is explained by:
ha gain of \u20ac86 million in 2023, due to the price increase of gas and electricity;
In 2024, the loss of \u20ac(33) million recognized in other operating gains and losses is mainly explained by:
hA gain of \u20ac8 million (a gain of \u20ac15 million in 2023) mainly due to the price variation of CO2.
hThe loss of \u20ac(38) million recognized in other operating gains and losses is explained by the discontinuance of cash flow hedge relationship on CO2 in 2024. Refer also to F32D Other market risks.
In 2024, in the caption other gains and losses on net indebtedness, the foreign exchange income decreased by \u20ac(4) million in comparison to 2023. The gain of \u20ac1\u00a0million (\u20ac6 million for 2023) is related to the interest element of financial derivatives (forward points). The other costs decreased by \u20ac(4) million in 2024 in comparison to 2023 due to one off costs incurred in the frame of the separation plan in 2023.
Net interest expense of \u20ac79 million includes \u20ac5 million of interest rate risk recycled from OCI.
| \n In \u20ac million | \n\n Cash flow hedges | \n|||||||
|---|---|---|---|---|---|---|---|---|
| \n Foreign currency risk | \n\n Interest rate risk | \n\n Commodity risk | \n\n Total | \n|||||
| \n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n|
| \n Balance at January 1 | \n\n 1 | \n\n 13 | \n\n -61 | \n\n 0 | \n\n -87 | \n\n 67 | \n\n -148 | \n\n 81 | \n
| \n Recycling from other comprehensive income of derivative financial instruments designated in a cash flow hedge relationship | \n\n 7 | \n\n -41 | \n\n 5 | \n\n 9 | \n\n 43 | \n\n 13 | \n\n 55 | \n\n -20 | \n
| \n Effective portion of changes in fair value of cash flow hedge | \n\n -13 | \n\n 29 | \n\n 23 | \n\n -70 | \n\n -15 | \n\n -167 | \n\n -6 | \n\n -209 | \n
| \n Balance at December 31 | \n\n -5 | \n\n 1 | \n\n -33 | \n\n -61 | \n\n -60 | \n\n -87 | \n\n -99 | \n\n -148 | \n
Held for trading
The transactional risk is managed either by spot or forward contracts. Unless documented as hedging instruments (see above), derivative financial instruments are classified as held for trading.
In 2024, the notional amounts transacted to manage the transactional risk are:
ha long position of \u20ac368 million (compared to \u20ac271 million in 2023);
ha short position of \u20ac(239) million (compared to \u20ac(284) million in 2023);
hin comparison to 2023, the optimization of the cash centralization model led to a net long position increase of \u20ac142 million (mainly Chinese Yuan and US Dollar).
The following table details the notional amounts of the Group\u2019s derivatives contracts outstanding at the end of the period:
| \n In \u20ac million | \n\n Notional amount(1) | \n\n Fair value assets | \n\n Fair value liabilities | \n|||
|---|---|---|---|---|---|---|
| \n December 31 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n
| \n Held for trading long position | \n\n 368 | \n\n 271 | \n\n 1 | \n\n 1 | \n\n -1 | \n\n -1 | \n
| \n Held for trading short position | \n\n -239 | \n\n -284 | \n\n 1 | \n\n 2 | \n\n -3 | \n\n 0 | \n
| \n Total | \n\n 129 | \n\n -13 | \n\n 2 | \n\n 3 | \n\n -4 | \n\n -1 | \n
(1)Long/(short) positions (if the foreign exchange transaction does not involve the functional currency, both notional amounts are considered).
Cash flow hedge
The Group uses derivatives to hedge identified foreign exchange rate risks. It documents those as hedging instruments unless it hedges a recognized financial asset or liability when generally no cash flow hedge relationship is documented. Most hedges are transaction related.
At the end of 2024, the Group had mainly hedged highly probable sales in foreign currencies (short position) in a nominal amount of US$190 million (\u20ac183 million) and PLN55 million (\u20ac13 million). All cash flow hedge contracts that existed at the end of December 2024 will be settled within the next 12 months and will impact profit or loss during that period.
The following table details the notional amounts of Solvay\u2019s derivatives contracts outstanding at the end of the period:
Notional amounts
| \n In \u20ac million | \n\n December 31, 2024 | \n|||||||
|---|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument(1) | \n\n Notional amount of the risk exposure(1) | \n\n Percentage of exposure hedged | \n\n \n | \n\n Average hedge exchange rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Equity | \n\n Assets | \n\n Liabilities | \n||||||
| \n Cash flow hedges - Forecasted sales and purchases(3) | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n EUR/PLN | \n\n -13 | \n\n -20 | \n\n 65% | \n\n (2) | \n\n 4.37 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total EUR | \n\n -13 | \n\n -20 | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n USD/BRL | \n\n -51 | \n\n -85 | \n\n 60% | \n\n (2) | \n\n 5.40 | \n\n -2 | \n\n 0 | \n\n 2 | \n
| \n USD/CNY | \n\n -60 | \n\n -113 | \n\n 53% | \n\n (2) | \n\n 7.00 | \n\n -2 | \n\n 0 | \n\n 2 | \n
| \n USD/EUR | \n\n -42 | \n\n -82 | \n\n 52% | \n\n (2) | \n\n 1.10 | \n\n -2 | \n\n 0 | \n\n 2 | \n
| \n USD/MXN | \n\n -13 | \n\n -18 | \n\n 68% | \n\n (2) | \n\n 19.69 | \n\n -1 | \n\n 0 | \n\n 1 | \n
| \n USD/THB | \n\n -17 | \n\n -35 | \n\n 50% | \n\n (2) | \n\n 34.77 | \n\n 0 | \n\n 1 | \n\n 0 | \n
| \n Total USD | \n\n -183 | \n\n -332 | \n\n \n | \n\n \n | \n\n \n | \n\n -6 | \n\n 1 | \n\n 7 | \n
| \n Total | \n\n -196 | \n\n -352 | \n\n \n | \n\n \n | \n\n \n | \n\n -6 | \n\n 1 | \n\n 7 | \n
(1)Long/(short) positions.
(2)In compliance with Group Treasury Policy the percentage of hedged exposure will reach the progressive minimum compliance level of 60% in 2024.
(3)The hedging instruments are in the line item: \"Other Receivables\" and \"Other Liabilities\" in the statement of financial position.
| \n In \u20ac million | \n\n December 31, 2023 | \n|||||||
|---|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument(1) | \n\n Notional amount of the risk exposure(1) | \n\n Percentage of exposure hedged | \n\n \n | \n\n Average hedge exchange rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Equity | \n\n Assets | \n\n Liabilities | \n||||||
| \n Cash flow hedges - Forecasted sales and purchases(3) | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n||
| \n JPY/EUR | \n\n -1 | \n\n -1 | \n\n 50% | \n\n (2) | \n\n 126.94 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n JPY/USD | \n\n 0 | \n\n -3 | \n\n 4% | \n\n (4) | \n\n 145.33 | \n\n 1 | \n\n 1 | \n\n 0 | \n
| \n Total JPY | \n\n -1 | \n\n -4 | \n\n \n | \n\n \n | \n\n \n | \n\n 1 | \n\n 1 | \n\n 0 | \n
| \n USD/BRL | \n\n -63 | \n\n -106 | \n\n 60% | \n\n (2) | \n\n 4.78 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n USD/CNY | \n\n -68 | \n\n -138 | \n\n 49% | \n\n (2) | \n\n 6.92 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n USD/EUR | \n\n -24 | \n\n -37 | \n\n 66% | \n\n (2) | \n\n 1.13 | \n\n 2 | \n\n 1 | \n\n 1 | \n
| \n USD/MXN | \n\n -11 | \n\n -23 | \n\n 48% | \n\n (2) | \n\n 18.32 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n USD/THB | \n\n -17 | \n\n -39 | \n\n 44% | \n\n (2) | \n\n 33.75 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total USD | \n\n -184 | \n\n -342 | \n\n \n | \n\n \n | \n\n \n | \n\n 3 | \n\n 2 | \n\n 1 | \n
| \n Total | \n\n -185 | \n\n -346 | \n\n \n | \n\n \n | \n\n \n | \n\n 4 | \n\n 2 | \n\n 1 | \n
(1)Long/(short) positions.
(2)In compliance with Group Treasury Policy the percentage of hedged exposure will reach the progressive minimum compliance level of 60% in 2023.
(3)The hedging instruments are recorded in the line item: \"Other Receivables\" and \"Other Liabilities\" in the statement of financial position.
(4)In compliance with Group Treasury Policy the hedging will be stopped in 2024 due to the low materiality exposure.
Hedge relationships are seldom perfect. Therefore, ineffectiveness could arise with the result that changes in the fair value or cash flows of the hedged item that are attributable to a hedged risk and the hedging instrument do not offset within a period. The sources of hedge ineffectiveness that could potentially affect the hedging relationship during its term are listed below:
hA reduction in the amount of the forecast sales resulting in quantity or notional amount differences \u2013 the hedged item and hedging instrument are based on different quantities or notional amounts.
hA significant change in the credit risk of parties.
Timing differences \u2013 the hedged item and hedging instrument occur or are settled at different dates.
In 2024, no hedge ineffectiveness was recognized in the consolidated income statement.
See the Financial risk in the Management of risks section of this annual report for additional information on the interest rate risks management.
hInterest rate risk is managed at Group level.
hThe Group is exposed to interest rate risk because entities in the Group borrow funds at both fixed and floating interest rates. Interest rate risk is managed at Group level by maintaining an appropriate mix between fixed and floating rate borrowings.
Interest rate exposure by currency is summarized below:
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|---|
| \n Currency | \n\n Fixed rate | \n\n Floating rate | \n\n Total | \n\n Fixed rate | \n\n Floating rate | \n\n Total | \n
| \n Financial debt | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n EUR | \n\n -1,721 | \n\n -216 | \n\n -1,937 | \n\n -164 | \n\n -1,840 | \n\n -2,003 | \n
| \n USD | \n\n -146 | \n\n 0 | \n\n -146 | \n\n -137 | \n\n -2 | \n\n -139 | \n
| \n BGN | \n\n -1 | \n\n -21 | \n\n -22 | \n\n -1 | \n\n -1 | \n\n -2 | \n
| \n GBP | \n\n -8 | \n\n 0 | \n\n -8 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n KRW | \n\n -1 | \n\n -3 | \n\n -4 | \n\n -2 | \n\n -10 | \n\n -12 | \n
| \n THB | \n\n -8 | \n\n 0 | \n\n -9 | \n\n -9 | \n\n 0 | \n\n -10 | \n
| \n BRL | \n\n -5 | \n\n -2 | \n\n -7 | \n\n -8 | \n\n -2 | \n\n -10 | \n
| \n Other | \n\n -5 | \n\n -1 | \n\n -5 | \n\n -13 | \n\n -3 | \n\n -16 | \n
| \n Total | \n\n -1,895 | \n\n -243 | \n\n -2,138 | \n\n -333 | \n\n -1,859 | \n\n -2,192 | \n
| \n Cash and cash equivalents | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n EUR | \n\n \n | \n\n 271 | \n\n 271 | \n\n \n | \n\n 297 | \n\n 297 | \n
| \n USD | \n\n \n | \n\n 68 | \n\n 68 | \n\n \n | \n\n 138 | \n\n 138 | \n
| \n CAD | \n\n \n | \n\n 0 | \n\n 0 | \n\n \n | \n\n 2 | \n\n 2 | \n
| \n THB | \n\n \n | \n\n 30 | \n\n 30 | \n\n \n | \n\n 22 | \n\n 22 | \n
| \n SAR | \n\n \n | \n\n 5 | \n\n 5 | \n\n \n | \n\n 8 | \n\n 8 | \n
| \n BRL | \n\n \n | \n\n 74 | \n\n 74 | \n\n \n | \n\n 65 | \n\n 65 | \n
| \n CNY | \n\n \n | \n\n 23 | \n\n 23 | \n\n \n | \n\n 16 | \n\n 16 | \n
| \n KRW | \n\n \n | \n\n 6 | \n\n 6 | \n\n \n | \n\n 6 | \n\n 6 | \n
| \n JPY | \n\n \n | \n\n 4 | \n\n 4 | \n\n \n | \n\n 10 | \n\n 10 | \n
| \n Other | \n\n \n | \n\n 57 | \n\n 57 | \n\n \n | \n\n 20 | \n\n 20 | \n
| \n Total | \n\n \n | \n\n 539 | \n\n 539 | \n\n \n | \n\n 584 | \n\n 584 | \n
| \n Other financial instruments | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CNY | \n\n \n | \n\n 4 | \n\n 4 | \n\n \n | \n\n 12 | \n\n 12 | \n
| \n EUR | \n\n \n | \n\n 7 | \n\n 7 | \n\n \n | \n\n 65 | \n\n 65 | \n
| \n SAR | \n\n \n | \n\n 4 | \n\n 4 | \n\n \n | \n\n 4 | \n\n 4 | \n
| \n Other | \n\n \n | \n\n 1 | \n\n 1 | \n\n \n | \n\n 38 | \n\n 38 | \n
| \n Total | \n\n \n | \n\n 16 | \n\n 16 | \n\n \n | \n\n 118 | \n\n 118 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Total | \n\n -1,895 | \n\n 312 | \n\n -1,583 | \n\n -333 | \n\n -1,156 | \n\n -1,489 | \n
At the end of 2024, \u20ac1,865 million of the Group\u2019s gross debt was at fixed-rate, and is largely comprised of:
hTwo senior bonds issued in April 2024 for a total of \u20ac1,500 million maturing in 2028 and 2031 (carrying amount of \u20ac1,492 million);
hIFRS 16 lease liability for a total of \u20ac306 million (carrying amount of \u20ac306 million).
The floating-rate debt is mainly comprised of a term loan for an amount of \u20ac200 million maturing in 2026 which is subject to interest rate hedging via interest rate swaps reducing the volatility to interest rate fluctuations (discussed below).
The impact of interest rate volatility at the end of 2024 compared to 2023 is the following:
| \n In \u20ac million | \n\n Sensitivity to a + 100bp movement in EUR market interest rates | \n\n Sensitivity to a - 100bp movement in EUR market interest rates | \n||
|---|---|---|---|---|
| \n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n|
| \n Profit or loss | \n\n 0 | \n\n -7 | \n\n 0 | \n\n 6 | \n
The sensitivity to interest rates volatility on the floating gross financial debt remains insignificant at the end of 2024 compared to 2023 thanks to the interest rates hedging. Most of the sensitivity disclosed in 2023 corresponds to the remaining volatility between the maximum interest rate payable (cap strike rate) and the minimum rate (floor strike rate) following the hedging of the bridge facility (\u20ac1,500 million) via zero cost interest collar.
Effects of IBOR market developments
All the new Liquidity Facilities (RCF, Bilateral lines) have been negotiated using only SOFR reference index and not IBOR anymore. This will not have any impact financially.
The ISDA's agreements were as well amended to include the SOFR.
All the other old agreements (before June 2023) still reflect IBOR on the agreements. Banks in that case will apply market standard approach and use the new SOFR reference rate for those agreements, therefore will not have an impact on our financial charges nor relations.
Interest rate risk hedged by instrument accounted for as held for trading
In 2024 and 2023, there are no outstanding interest rate instruments accounted for as held for trading.
Interest rate risk hedged by instrument accounted for as a hedging instrument in a cash flow hedge
In comparison to 2023, the remaining interest rate hedging is the hedge executed on the \u20ac200 million floating term loan.
All the other hedging relationships were settled following the repayment of the \u20ac1,500 million bridge facility drawdown and the issuance of the senior bonds totaling \u20ac1,500 million.
| \n Cash flow hedges on floating interests rates | \n\n December 31, 2024 | \n||||||
|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument | \n\n Notional amount of the risk exposure | \n\n Percentage of exposure hedged | \n\n Hedge interest rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Assets | \n\n Liabilities | \n||||||
| \n Floating rate debt (Euribor6M) | \n\n 200 | \n\n 200 | \n\n 100% | \n\n 3.52% | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n 1.99% | \n\n 0 | \n\n 0 | \n\n 0 | \n
As of December 31, 2024, the cash-flow hedge reserve for interest rate risk also includes an amount of \u20ac 31 million related to the unwound Flexiswap hedge instruments and is recycled to profit or loss over the duration of the two bonds. On the Statement of Financial Position, the Flexiswap hedging instruments were replaced by two new instruments classified as financial debt, presented within \"Other borrowings from third parties\" in Note F33.
| \n Cash flow hedges on floating interests rates | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument | \n\n Notional amount of the risk exposure | \n\n Percentage of exposure hedged | \n\n Hedge interest rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Assets | \n\n Liabilities | \n||||||
| \n Floating rate debt (Euribor6M) | \n\n 200 | \n\n 200 | \n\n 100% | \n\n 3.52% | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n Floating rate debt (Euribor1M) | \n\n 1,500 | \n\n 1,500 | \n\n 100% | \n\n 3.55% | \n\n -1 | \n\n 0 | \n\n -1 | \n
| \n Future long-term refinancing (Euribor6M) | \n\n 750 | \n\n 750 | \n\n 100% | \n\n 3,20% + Fixed Margin | \n\n -25 | \n\n 0 | \n\n -25 | \n
| \n Future long-term refinancing (Euribor6M) | \n\n 750 | \n\n 750 | \n\n 100% | \n\n 3,05% + Fixed Margin | \n\n -33 | \n\n 0 | \n\n -33 | \n
Utility and CO2 price risks
The Group purchases a large portion of its coal, gas and electricity needs in Europe and the United States based on fluctuating liquid market indices. Moreover, the Group purchases raw materials with a price formula referring to market indices. In order to reduce the cost volatility, the Group has developed a policy for exchanging variable price against fixed price through derivative financial instruments. Most of these hedging instruments can be documented as hedging instruments of the underlying purchase contracts. Utility purchase contracts at fixed price with a physical delivery for use in the Group's operations are qualified as own use contracts and constitute a natural hedge. Those have not been included in this note.
Financial hedging of utility and CO2 emission rights price risks is managed centrally by Energy Services on behalf of the Group entities.
Energy Services also carries out trading transactions with respect to utility and CO2.
The following tables detail the notional principal amounts and fair values of utility and CO2 derivative financial instruments outstanding at the end of the reporting period:
| \n Held for trading | \n\n Notional amount of the instrument(1) | \n\n Notional amount of the instrument (in units) | \n\n Fair value of the instrument - Asset | \n\n Fair value of the instrument - Liability | \n|||||
|---|---|---|---|---|---|---|---|---|---|
| \n December 31 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n \n | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n
| \n In \u20ac million (except where indicated) | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Power | \n\n \n | \n\n 22 | \n\n \n | \n\n 118,090 | \n\n MWh | \n\n 0 | \n\n 0 | \n\n 0 | \n\n -13 | \n
| \n Standard Quality Gas | \n\n 1 | \n\n 21 | \n\n 10,220 | \n\n 811,174 | \n\n MWh | \n\n 1 | \n\n 0 | \n\n -1 | \n\n 0 | \n
| \n CO2 | \n\n 9 | \n\n 9 | \n\n 360,250 | \n\n 394,500 | \n\n Tons | \n\n 0 | \n\n 0 | \n\n -18 | \n\n -26 | \n
| \n Total | \n\n 10 | \n\n 52 | \n\n \n | \n\n \n | \n\n \n | \n\n 1 | \n\n 0 | \n\n -19 | \n\n -39 | \n
(1)The hedging instruments are located in the line item: \"Other Receivables\" and \"Other Liabilities\" in the consolidated statement of financial position.
The amounts presented in the tables hereafter include hedging needs of the GBUs of the Group that are sourced through Energy Services, and not the full Group utility hedging needs.
| \n \n | \n\n December 31, 2024 | \n|||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| \n Cash flow hedge | \n\n Notional amount of the instrument(1) | \n\n Notional amount of\u00a0the instrument (in units) | \n\n \n | \n\n Notional amount of the risk exposure | \n\n Notional amount of the risk exposure (in units) | \n\n \n | \n\n Percentage of exposure hedged | \n\n Average hedge price per\u00a0risk category | \n\n \n | \n\n Cash flow hedge reserve | \n\n Fair value of the instrument - Asset | \n\n Fair value of the instrument - Liability | \n
| \n In \u20ac million | \n||||||||||||
| \n Power | \n\n 224 | \n\n 2,205,840 | \n\n MWh | \n\n 417 | \n\n 3,772,347 | \n\n MWh | \n\n 58% | \n\n 102 | \n\n EUR/MWh | \n\n -29 | \n\n 0 | \n\n -29 | \n
| \n Standard Quality Gas | \n\n 361 | \n\n 13,463,715 | \n\n MWh | \n\n 1,056 | \n\n 26,558,004 | \n\n MWh | \n\n 51% | \n\n 22 | \n\n EUR/MWh | \n\n 35 | \n\n 53 | \n\n -18 | \n
| \n CO2(2) | \n\n 341 | \n\n 4,292,750 | \n\n Tons | \n\n 872 | \n\n 10,616,000 | \n\n Tons | \n\n 40% | \n\n 75 | \n\n EUR/Tons | \n\n -9 | \n\n 23 | \n\n -32 | \n
| \n Total | \n\n 926 | \n\n \n | \n\n \n | \n\n 2,345 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n -3 | \n\n 76 | \n\n -79 | \n
(1)The hedging instruments are in the line item: \"Other Receivables\" and \"Other Liabilities\" in the consolidated statement of financial position.
(2)Excluding the reserve frozen in OCI, following roll-over transactions (\u20ac(44) million).
| \n Cash flow hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| \n In \u20ac million | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Power | \n\n 112 | \n\n 781,326 | \n\n MWh | \n\n 181 | \n\n 1,763,316 | \n\n MWh | \n\n 44% | \n\n 142 | \n\n EUR/MWh | \n\n 30 | \n\n 33 | \n\n -3 | \n
| \n Standard Quality Gas | \n\n 245 | \n\n 12,343,602 | \n\n MWh | \n\n 579 | \n\n 24,542,118 | \n\n MWh | \n\n 50% | \n\n 27 | \n\n EUR/MWh | \n\n -41 | \n\n 15 | \n\n -56 | \n
| \n CO2(2) | \n\n 553 | \n\n 3,469,500 | \n\n Tons | \n\n 801 | \n\n 9,230,909 | \n\n Tons | \n\n 38% | \n\n 87 | \n\n EUR/Tons | \n\n -43 | \n\n 0 | \n\n -44 | \n
| \n Total | \n\n 910 | \n\n \n | \n\n \n | \n\n 1,561 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n -54 | \n\n 48 | \n\n -102 | \n
(1)The hedging instruments are located in the line item: \"Other Receivables\" and \"Other Liabilities\" in the consolidated statement of financial position.
(2)Excluding the reserve frozen in OCI, following roll-over transactions (\u20ac(33) million).
In 2024, the group changed its hedge relationship on CO2 emission rights price risk which resulted in the discontinuance of hedging cash flow hedge relationship at the end of December 2024. The related loss of \u20ac(38) million was recognized in other operating gains and losses in the consolidated income statement.
Fair value hedge
The Group covered a part of its CO2 emission rights in inventory by forward sales of CO2 emission rights to a related party. The Group qualifies this hedging strategy as fair value hedge. The change in fair value of forward sales is accounted for in profit and loss, concomitantly with the revaluation of the CO2 emission rights held in\u00a0inventory.
The Group has established a 1:1 hedge ratio for the underlying risk of the forward sales of CO2 emission rights to the related party that is identical to the hedged risk component.
The impact of the hedging instrument on the statement of financial position as at December 31, 2024, is as follows:
| \n \n | \n\n December 31, 2024 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n \n | \n\n -1 | \n\n Financial Instrument | \n\n \n | \n\n 0 | \n
| \n \n | \n\n December 31, 2024 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n 2 | \n\n \n | \n\n Inventories | \n\n 0 | \n\n \n | \n
| \n \n | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n \n | \n\n -2 | \n\n Financial Instrument | \n\n 1 | \n\n -1 | \n
| \n \n | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n \n | \n\n 2 | \n\n Inventories | \n\n 1 | \n\n \n | \n
The sensitivities of commodity derivative financial instruments as of December 31, 2024, are presented below.
The sensitivities were defined based on the price levels and volatility levels of each commodity. These assumptions do not constitute an estimation of future market prices, and the sensitivities presented are not representative of future changes in Solvay's equity and results.
| \n In \u20acmillion | \n\n December 31, 2024 | \n||
|---|---|---|---|
| \n Price change | \n\n Other comprehensive income | \n\n Profit or loss | \n|
| \n Natural gas | \n\n +10\u20ac /MWh | \n\n -102 | \n\n 0 | \n
| \n Natural gas | \n\n -10\u20ac /MWh | \n\n 102 | \n\n 0 | \n
| \n Electricity | \n\n +30\u20ac /MWh | \n\n 66 | \n\n 0 | \n
| \n Electricity | \n\n -30\u20ac /MWh | \n\n -66 | \n\n 0 | \n
| \n CO2 emission rights | \n\n +5\u20ac /T | \n\n -21 | \n\n -2 | \n
| \n CO2 emission rights | \n\n -5\u20ac /T | \n\n 21 | \n\n 2 | \n
Performance Share Units Plan (PSU) and Restricted Share Units (RSU) risk on Solvay and Syensqo share price
The last cash settled PSU plan (granted in 2021) vested on 31/12/2023 and was paid out in June 2024. The PSU/RSU plans granted as from 2022 are equity settled. The RSU plan 2022 will deliver Solvay and Syensqo shares. The PSU/RSU plans 2023 and 2024 will deliver Solvay shares only. These PSU/RSU plans are hedged with treasury shares. However, in order to neutralize the volatility of the Syensqo share price, which will impact the liability valuation relating to the RSU plan 2022, the Group has entered into a hedge (equity forward transaction) covering 100% of the risk.
See the Financial risk in the Management of risks section of this annual report for additional information on credit risk management.
The Group continuously monitors the credit risk of important business partners.
The Group engages in transactions only with financial institutions with a good credit rating. The Group monitors and manages exposures to financial institutions within approved counterparty credit limits and credit risk parameters in order to mitigate the risk of default. For financial guarantees, see note F36 Contingent liabilities and financial guarantees.
The Group recognizes expected credit losses on all of its trade receivables: it applies the simplified approach and recognizes lifetime expected losses on all trade receivables, using a provision matrix in order to calculate the lifetime expected credit losses for trade receivables, using historical information on defaults adjusted for the forward-looking information.
The Group classifies the customers and their related receivables in various rating classes, based on the risks\u2019 grading attributed to the customers and on the aging balance of receivables. As such, for all receivables overdue below six months, the Group considers percentages within a range between 0.005% and 4.031%, depending on the rating class. For all receivables overdue in excess of six months, the Group considers a rate of 50% or of 100%, depending on the rating class. The customer\u2019s grading is reviewed annually for customers assessed as low risk profile, and every six months for customers assessed as higher risk profile.
There is no significant concentration of credit risk at Group level because the receivables\u2019 credit risk is spread over a large number of customers and markets.
The aging of trade receivables, financial instruments \u2013 operational, loans and other non-current assets is as follows:
| \n December 31, 2024 | \n\n With expected loss allowance, not credit-impaired | \n||||||
|---|---|---|---|---|---|---|---|
| \n In \u20ac million | \n\n Total | \n\n Credit-impaired | \n\n not past due | \n\n less than 30 days past due | \n\n between 30 and 60 days past due | \n\n between 60 and 90 days past due | \n\n more than 90 days past due | \n
| \n Trade receivables | \n\n 850 | \n\n 22 | \n\n 804 | \n\n 18 | \n\n 1 | \n\n 2 | \n\n 2 | \n
| \n Trade receivables - allowance | \n\n -23 | \n\n -20 | \n\n -1 | \n\n \n | \n\n \n | \n\n \n | \n\n -2 | \n
| \n Trade receivables - net | \n\n 826 | \n\n 2 | \n\n 803 | \n\n 18 | \n\n 1 | \n\n 2 | \n\n 0 | \n
| \n Financial instruments - operational | \n\n 80 | \n\n \n | \n\n 80 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets(1) | \n\n 116 | \n\n 4 | \n\n 111 | \n\n 0 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - allowance | \n\n -4 | \n\n -4 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - net(1) | \n\n 112 | \n\n 0 | \n\n 111 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total | \n\n 1,018 | \n\n 3 | \n\n 994 | \n\n 18 | \n\n 1 | \n\n 2 | \n\n 0 | \n
(1)Loans and other non-current assets do not include pension fund surplus and CO2 -term inventory.
| \n December 31, 2023 | \n\n With expected loss allowance, not credit-impaired | \n||||||
|---|---|---|---|---|---|---|---|
| \n In \u20ac million | \n\n Total | \n\n Credit-impaired | \n\n not past due | \n\n less than 30 days past due | \n\n between 30 and 60 days past due | \n\n between 60 and 90 days past due | \n\n more than 90 days past due | \n
| \n Trade receivables | \n\n 894 | \n\n 55 | \n\n 802 | \n\n 28 | \n\n 1 | \n\n 6 | \n\n 3 | \n
| \n Trade receivables - allowance | \n\n -54 | \n\n -53 | \n\n -1 | \n\n \n | \n\n \n | \n\n \n | \n\n -1 | \n
| \n Trade receivables - net | \n\n 840 | \n\n 3 | \n\n 801 | \n\n 28 | \n\n 1 | \n\n 6 | \n\n 2 | \n
| \n Financial instruments - operational | \n\n 66 | \n\n \n | \n\n 66 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets(1) | \n\n 140 | \n\n 4 | \n\n 135 | \n\n 0 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - allowance | \n\n -4 | \n\n -4 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - net(1) | \n\n 136 | \n\n 0 | \n\n 135 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total | \n\n 1,042 | \n\n 3 | \n\n 1,002 | \n\n 28 | \n\n 1 | \n\n 6 | \n\n 2 | \n
(1) Loans and other non-current assets do not include pension fund surplus and CO2 emission rights inventory.
The table below presents the allowances on trade receivables:
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n January 1 | \n\n -54 | \n\n -72 | \n
| \n Additions | \n\n -3 | \n\n -11 | \n
| \n Uses | \n\n 12 | \n\n 5 | \n
| \n Reversal | \n\n 15 | \n\n 9 | \n
| \n Currency translation differences | \n\n 2 | \n\n -1 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n
| \n Partial Demerger | \n\n \n | \n\n 14 | \n
| \n Other | \n\n 5 | \n\n 0 | \n
| \n December 31 | \n\n -23 | \n\n -54 | \n
See the Financial risk in the Management of risks section of this annual report for additional information on the liquidity risk management.
Liquidity risk relates to Solvay\u2019s ability to service and refinance its debt (including notes issued) and to fund its operations.
This depends on its ability to generate cash from operations and not to overpay for acquisitions. In addition, external factors impacting the global liquidity markets could also make financing sources less accessible.
The Finance Committee gives its opinion on the appropriate liquidity risk management for the Group\u2019s short-, medium-, and long-term funding and liquidity management requirements.
The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecasts and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
The Group staggers the maturities of its financing sources over time in order to limit amounts to be refinanced each year.
The following tables detail the Group\u2019s remaining contractual maturity for its financial liabilities with contractual repayment periods.
The tables have been prepared using the discounted cash flows of financial liabilities, based on the earliest date on which the Group can be required to pay.
The following tables present discounted amounts (carrying amounts):
| \n In \u20ac million | \n\n December 31, 2024 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 809 | \n\n 809 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 107 | \n\n 107 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 111 | \n\n 98 | \n\n 13 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 21 | \n\n \n | \n\n 5 | \n\n 5 | \n\n 11 | \n
| \n Financial debt | \n\n 1,831 | \n\n 84 | \n\n 217 | \n\n 777 | \n\n 753 | \n
| \n Leasing debt | \n\n 306 | \n\n 70 | \n\n 36 | \n\n 92 | \n\n 108 | \n
| \n Total | \n\n 3,186 | \n\n 1,169 | \n\n 271 | \n\n 874 | \n\n 872 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 850 | \n\n 850 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 175 | \n\n 175 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 140 | \n\n 108 | \n\n 32 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 34 | \n\n \n | \n\n 12 | \n\n 2 | \n\n 20 | \n
| \n Financial debt | \n\n 1,885 | \n\n 148 | \n\n 1,711 | \n\n 23 | \n\n 3 | \n
| \n Leasing debt | \n\n 307 | \n\n 63 | \n\n 44 | \n\n 92 | \n\n 107 | \n
| \n Total | \n\n 3,390 | \n\n 1,344 | \n\n 1,799 | \n\n 117 | \n\n 130 | \n
The following tables present undiscounted amounts (nominal value):
| \n In \u20ac million | \n\n December 31, 2024 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 809 | \n\n 809 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 107 | \n\n 107 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 111 | \n\n 98 | \n\n 13 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 21 | \n\n \n | \n\n 5 | \n\n 5 | \n\n 11 | \n
| \n Financial debt | \n\n 1,842 | \n\n 84 | \n\n 219 | \n\n 781 | \n\n 757 | \n
| \n Leasing debt | \n\n 306 | \n\n 70 | \n\n 36 | \n\n 92 | \n\n 108 | \n
| \n Total | \n\n 3,196 | \n\n 1,169 | \n\n 273 | \n\n 878 | \n\n 876 | \n
| \n Interests on financial debt and lease liabilities | \n\n 412 | \n\n 75 | \n\n 71 | \n\n 174 | \n\n 91 | \n
| \n Total outflows of cash | \n\n 3,608 | \n\n 1,244 | \n\n 345 | \n\n 1,052 | \n\n 967 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 850 | \n\n 850 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 175 | \n\n 175 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 140 | \n\n 108 | \n\n 32 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 34 | \n\n \n | \n\n 12 | \n\n 2 | \n\n 20 | \n
| \n Financial debt | \n\n 1,886 | \n\n 148 | \n\n 1,711 | \n\n 23 | \n\n 4 | \n
| \n Leasing debt | \n\n 307 | \n\n 63 | \n\n 44 | \n\n 92 | \n\n 107 | \n
| \n Total | \n\n 3,391 | \n\n 1,344 | \n\n 1,799 | \n\n 117 | \n\n 131 | \n
| \n Interests on financial debt and lease liabilities | \n\n 179 | \n\n 82 | \n\n 61 | \n\n 17 | \n\n 19 | \n
| \n Total outflows of cash | \n\n 3,570 | \n\n 1,426 | \n\n 1,860 | \n\n 134 | \n\n 150 | \n
Solvay\u2019s liquidity amounts to \u20ac2.0 billion including \u20ac0.6 billion of cash and cash equivalents on the statement of financial position and \u20ac1.4 billion of committed fully undrawn credit facilities (\u20ac1.1 billion multilateral RCF maturing in 2029 with extension possibility, and \u20ac0.3 billion bilateral RCF maturing in 2027 with extension possibilities) unused at the end of December 2024.
In addition, Solvay has access to a Belgian Treasury Bill program for \u20ac1.0 billion (no outstanding balance on December 31, 2024). The program is covered by a back-up credit line.
See below (section F32.E) for further details on supplier financing programs within trade payables.
fAccounting policy
General
The Group classifies financial liabilities that arise from supplier finance arrangements within Trade and other payables in the statement of financial position if they have a similar nature and function to trade payables. This is the case if the supplier finance arrangement is part of the working capital used in the Group\u2019s normal operating cycle, the level of security provided is similar to trade payables and the terms of the liabilities that are part of the supply chain finance arrangement are not substantially different from the terms of trade payables that are not part of the arrangement. Cash flows related to liabilities arising from supplier finance arrangements that are classified in Trade and other payables in the consolidated statement of financial position are included in operating activities in the consolidated statement of cash flows.
First application in 2024
This disclosure requirement was introduced by the Amendments Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7), published in May 2023 by the IASB. The amendments are effective for periods beginning on or after 1 January 2024. In the year of initial application, the requirements only apply to the annual financial report and the disclosure does not need to provide the comparative figures.
Terms and conditions
The Group has established a supplier finance arrangement that is offered to some of the Group\u2019s key suppliers. Participation in the arrangement is at the suppliers\u2019 own discretion. Suppliers that participate in the supplier finance arrangement will receive early payment on invoices sent to the Group from the Group\u2019s external finance provider. If suppliers choose to receive early payment, they pay a fee to the finance provider, to which the Group is not a party. For the finance provider to pay the invoices, the goods must have been received or supplied and the invoices approved by the Group. Payments to suppliers ahead of the invoice due date are processed by the finance provider and, in all cases, the Group settles the original invoice by paying the finance provider in line with the original invoice maturity date described above.
The Group assesses each arrangement against indicators to determine if the liabilities which suppliers have sold to the partner bank under the supplier financing scheme continue to meet the definition of trade payables or should be classified as financial debt. On December 31, 2024 and 2023, all trade payables subject to the supplier finance arrangement meet the criteria of trade payables and are included in trade payables in the consolidated statement of financial position.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n\n January 1, 2023 | \n
|---|---|---|---|
| \n Carrying amount of financial liabilities | \n\n \n | \n\n \n | \n\n \n | \n
| \n Presented in trade and other payables | \n\n 62 | \n\n N/A | \n\n N/A | \n
| \n \u2022of which suppliers have received payment from finance provider | \n\n 47 | \n\n N/A | \n\n N/A | \n
| \n Range of payment due dates (days after the invoice date) | \n\n \n | \n\n \n | \n\n \n | \n
| \n Liabilities that are part of the arrangement | \n\n 102-106 days | \n\n N/A | \n\n N/A | \n
| \n Comparable trade payables that are not part of the arrangements | \n\n 45-49 days | \n\n N/A | \n\n N/A | \n
Financial assets
Trade receivables are initially measured at their transaction price, if they do not contain a significant financing component, which is the case for substantially all trade receivables. Other financial assets are initially measured at fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset.
A financial asset is classified as current when the cash flows expected to flow from the instrument mature within one year.
All recognized financial assets will subsequently be measured at either amortized cost or fair value under IFRS 9 Financial Instruments, specifically:
\u2022A debt instrument that (i) is held within a business model whose objective is to collect the contractual cash flows and (ii) has contractual cash flows that are solely payments of principal and interest on the principal amount outstanding is measured at amortized cost (net of any write down for impairment), unless the asset is designated at fair value through profit or loss (FVTPL) under the fair value option.
\u2022All other debt instruments are measured at FVTPL.
\u2022All equity investments are measured in the consolidated statement of financial position at fair value, with gains and losses recognized in profit or loss except that if an equity investment is not held for trading, nor contingent consideration recognized by an acquirer in a business combination, an irrevocable election can be made at initial recognition to measure the investment at FVTOCI, with dividend income recognized in profit or loss. This classification is determined on an instrument-by-instrument basis. Upon derecognition, the cumulative gains or losses previously recognized in other comprehensive income are reclassified to retained earnings.
\u2022Equity investments in partnerships of investment funds are measured in the consolidated statement of financial position at fair value with gains and losses recognized in profit or loss. Based on the analysis of the characteristics of these funds the Group determined that they were not eligible for the FVTOCI option and therefore are accounted for at FVTPL.
\u2022For instruments quoted in an active market, the fair value corresponds to a market price (level 1). For instruments that are not quoted in an active market, the fair value is determined using valuation techniques including reference to recent arm\u2019s length market transactions or transactions involving instruments which are substantially the same (level 2), or discounted cash flow analysis including, to the greatest possible extent, assumptions consistent with observable market data (level 3). However, in limited circumstances, cost of equity instruments may be an appropriate estimate of their fair value. That may be the case if insufficient more recent information is available to measure fair value, or if there is a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.
Valuation techniques and assumptions used for measuring fair value.
fAccounting policy
Quoted market prices are available for financial assets and financial liabilities with standard terms and conditions that are traded on active markets. The fair values of derivative financial instruments are equal to their quoted prices, if available. In case such quoted prices are not available, the fair value of the financial instruments is determined based on a discounted cash flow analysis using the applicable yield curve derived from quoted interest rates matching maturities of the contracts for non-optional derivatives. Optional derivatives are fair valued based on option pricing models, taking into account the present value of probability weighted expected future payoffs, using market reference formulas.
The fair values of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||
|---|---|---|---|---|
| \n Carrying amount | \n\n Fair value | \n\n Carrying amount | \n\n Fair value | \n|
| \n Non-current assets - Financial instruments | \n\n 118 | \n\n 118 | \n\n 136 | \n\n 136 | \n
| \n Loans and other non-current assets (except pension fund surpluses and long-term inventory balance) | \n\n 118 | \n\n 118 | \n\n 136 | \n\n 136 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current liabilities - Financial instruments | \n\n -1,766 | \n\n -1,814 | \n\n -1,774 | \n\n -1,774 | \n
| \n Bonds | \n\n -1,492 | \n\n -1,540 | \n\n 0 | \n\n 0 | \n
| \n Other non-current debts | \n\n -253 | \n\n -253 | \n\n -1,735 | \n\n -1,735 | \n
| \n Other liabilities | \n\n -21 | \n\n -21 | \n\n -39 | \n\n -39 | \n
The carrying amounts of current financial assets and liabilities are estimated to reasonably approximate their fair values, due to the short term to maturity.
The table \u201cFinancial instruments measured at fair value in the consolidated statement of financial position\u201d provides an analysis of financial instruments that, after their initial recognition, are measured at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable. Financial instruments classified as held for trading and as hedging instruments in cash flow hedges are mainly grouped into Levels 1 and 2. They are fair valued based on forward pricing and swap models using present value calculations. The models incorporate various inputs including foreign exchange spot and interest rates of the respective currencies, currency basis spreads between the respective currencies, interest rate curves and forward rate curves of the underlying commodity. The equity instruments measured at fair value through OCI and through profit and loss are presented within Level 1 and 3. The fair value of the instruments presented under Level 3 is measured based on the guidelines recommended by The International Private Equity and Venture Capital Valuation (IPEV).
In accordance with the Group internal rules, the responsibility for measuring the fair value level resides with (a) the Treasury department for the non-utility derivative financial instruments, and the non-derivative financial liabilities, (b) the Sustainable Development and Energy department for the utility derivative financial instruments and (c) the Finance department for non-derivative financial assets.
The Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. During the year, no such transfers have occurred.
| \n In \u20ac million | \n\n December 31, 2024 | \n|||
|---|---|---|---|---|
| \n Level 1 | \n\n Level 2 | \n\n Level 3 | \n\n Total | \n|
| \n Held for trading | \n\n 0 | \n\n 4 | \n\n 0 | \n\n 4 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Shares | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022Index | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n 55 | \n\n \n | \n\n 0 | \n\n 55 | \n
| \n \u2022Shares | \n\n 55 | \n\n \n | \n\n \n | \n\n 55 | \n
| \n Cash flow hedges | \n\n 0 | \n\n 77 | \n\n 0 | \n\n 77 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n \n | \n\n 53 | \n\n 0 | \n\n 53 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 23 | \n\n 0 | \n\n 23 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n 0 | \n\n 0 | \n\n 8 | \n\n 8 | \n
| \n \u2022Shares | \n\n \n | \n\n \n | \n\n 8 | \n\n 8 | \n
| \n Total (assets) | \n\n 55 | \n\n 81 | \n\n 8 | \n\n 144 | \n
| \n \n | \n||||
| \n Held for trading | \n\n 0 | \n\n -27 | \n\n 0 | \n\n -27 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -4 | \n\n 0 | \n\n -4 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n -18 | \n\n 0 | \n\n -18 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Index | \n\n 0 | \n\n -3 | \n\n 0 | \n\n -3 | \n
| \n Cash flow hedges | \n\n 0 | \n\n -87 | \n\n 0 | \n\n -87 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -7 | \n\n 0 | \n\n -7 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n \u2022Utility risk | \n\n \n | \n\n -47 | \n\n 0 | \n\n -47 | \n
| \n \u2022CO2 risk | \n\n \n | \n\n -32 | \n\n 0 | \n\n -32 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total (liabilities) | \n\n 0 | \n\n -115 | \n\n 0 | \n\n -115 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n|||
|---|---|---|---|---|
| \n Level 1 | \n\n Level 2 | \n\n Level 3 | \n\n Total | \n|
| \n Held for trading | \n\n 0 | \n\n 17 | \n\n 0 | \n\n 18 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 3 | \n\n 0 | \n\n 3 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 4 | \n\n 0 | \n\n 5 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Shares | \n\n \n | \n\n 8 | \n\n 0 | \n\n 8 | \n
| \n \u2022Index | \n\n 0 | \n\n 2 | \n\n 0 | \n\n 2 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n 87 | \n\n 0 | \n\n 0 | \n\n 87 | \n
| \n \u2022Shares | \n\n 87 | \n\n \n | \n\n \n | \n\n 87 | \n
| \n Cash flow hedges | \n\n 0 | \n\n 50 | \n\n 0 | \n\n 50 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 2 | \n\n 0 | \n\n 2 | \n
| \n \u2022 Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 47 | \n\n 0 | \n\n 48 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n 0 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n Total (assets) | \n\n 87 | \n\n 67 | \n\n 1 | \n\n 156 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Held for trading | \n\n 0 | \n\n -37 | \n\n 0 | \n\n -37 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -1 | \n\n 0 | \n\n -1 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n -8 | \n\n 0 | \n\n -8 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n -26 | \n\n 0 | \n\n -26 | \n
| \n \u2022 Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Index | \n\n 0 | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n Cash flow hedges | \n\n 0 | \n\n -166 | \n\n 0 | \n\n -166 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -1 | \n\n 0 | \n\n -1 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n -61 | \n\n 0 | \n\n -61 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n -59 | \n\n 0 | \n\n -59 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n -44 | \n\n 0 | \n\n -44 | \n
| \n \u2022Shares | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n Total (liabilities) | \n\n 0 | \n\n -202 | \n\n 0 | \n\n -202 | \n
The fair value of the financial instruments to manage the utility risk reduced in 2024. This is mainly explained by the fact that Solvay had decided to concentrate on its own internal consumption only and the price increase of gas and electricity in comparison to 2023.
Reconciliation of level 3 fair value measurements of financial assets and liabilities.
| \n In \u20ac million | \n\n December 31, 2024 | \n||
|---|---|---|---|
| \n At fair value through profit or loss | \n\n At fair value through other comprehensive income | \n\n Total | \n|
| \n Equity instruments | \n\n Equity instruments | \n||
| \n Opening balance at January 1 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n Total gains or losses | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Recognized in profit or loss | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Recognized in other comprehensive income | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Acquisitions | \n\n \n | \n\n 7 | \n\n 7 | \n
| \n Capital decreases | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Partial Demerger | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Transfers out of level 3 | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Derivative instruments in designated hedge accounting relationships | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Transfer to assets held for sale | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Closing balance at December 31 | \n\n 0 | \n\n 8 | \n\n 8 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n||
|---|---|---|---|
| \n At fair value through profit or loss | \n\n At fair value through other comprehensive income | \n\n Total | \n|
| \n Equity instruments | \n\n Equity instruments | \n||
| \n Opening balance at January 1 | \n\n 47 | \n\n 24 | \n\n 71 | \n
| \n Total gains or losses | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Recognized in profit or loss | \n\n 2 | \n\n \n | \n\n 2 | \n
| \n Recognized in other comprehensive income | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Acquisitions | \n\n 0 | \n\n 8 | \n\n 8 | \n
| \n Capital decreases | \n\n \n | \n\n -1 | \n\n -1 | \n
| \n Partial Demerger | \n\n -49 | \n\n -30 | \n\n -79 | \n
| \n Closing balance at December 31 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Recognized in the consolidated income statement | \n\n \n | \n\n \n | \n
| \n Recycling from OCI of derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n -7 | \n\n 39 | \n
| \n \u2022Utility risk | \n\n -4 | \n\n -1 | \n
| \n \u2022Interest rate risk | \n\n \n | \n\n \n | \n
| \n Changes in the fair value of financial instruments held for trading | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n \n | \n\n \n | \n
| \n \u2022Utility risk | \n\n -2 | \n\n 86 | \n
| \n \u2022CO2 risk | \n\n \n | \n\n 15 | \n
| \n Recognized in the gross margin | \n\n -14 | \n\n 138 | \n
| \n Recycling from OCI of derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022CO2 risk | \n\n -38 | \n\n \n | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n
| \n Changes in the fair value of financial instruments held for trading | \n\n \n | \n\n \n | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022CO2 risk | \n\n 8 | \n\n 0 | \n
| \n \u2022Shares | \n\n -3 | \n\n 0 | \n
| \n Gains and losses (time value) on derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022CO2 risk | \n\n \n | \n\n \n | \n
| \n Foreign operating exchange gains and losses | \n\n 0 | \n\n 2 | \n
| \n Recognized in other operating gains and losses | \n\n -33 | \n\n 2 | \n
| \n Recycling from OCI of derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n Changes in the fair value of financial instruments held for trading | \n\n \n | \n\n \n | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022 Shares | \n\n 0 | \n\n 0 | \n
| \n Ineffective portion of derivative financial instruments designated in cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n Recognized in results from portfolio management and reassessments | \n\n 0 | \n\n 0 | \n
| \n Net interest expense | \n\n -79 | \n\n -24 | \n
| \n Financial charge on lease liabilities | \n\n -12 | \n\n -11 | \n
| \n Other gains and losses on net indebtedness (excluding gains and losses on items not related to financial instruments) | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n -3 | \n\n 1 | \n
| \n \u2022Interest element of financial instruments | \n\n 1 | \n\n 6 | \n
| \n \u2022Others | \n\n -3 | \n\n -6 | \n
| \n Recognized in charges on net indebtedness(*) | \n\n -97 | \n\n -33 | \n
| \n Dividends from equity instruments measured at fair value through other comprehensive income | \n\n \n | \n\n \n | \n
| \n Capital gain on available-for-sale investment posted directly to the income statement | \n\n \n | \n\n \n | \n
| \n Recycling from equity of unrecognized gain and losses related to disposed available-for-sale financial assets(*) | \n\n 0 | \n\n 0 | \n
| \n Recycling from equity of impairment losses on available-for-sale financial assets(*) | \n\n 0 | \n\n 0 | \n
| \n Total recognized in the consolidated income statement | \n\n -144 | \n\n 107 | \n
(*)The note F6 Net Financial Charges shows an amount of \u20ac(76) million for 2024 (\u20ac(41) million for 2023) reported under \u201cNet cost of borrowing\u201d. This amount includes \u20ac(3) million for 2024 (\u20ac(6) million for 2023) of financial expenses not related to financial instruments that are excluded in this table from the line item \u201cRecognized in charges on net indebtedness.\u201d
The loss on highly probable sales in foreign currency recognized in gross margin for \u20ac(7) million is mainly explained by the hedging of the US$ currency and the loss recognized on utility instruments for \u20ac(4) million.
The change in fair value of financial instruments held for trading recognized in gross margin is explained by:
ha gain of \u20ac86 million in 2023, due to the price increase of gas and electricity;
In 2024, the loss of \u20ac(33) million recognized in other operating gains and losses is mainly explained by:
hA gain of \u20ac8 million (a gain of \u20ac15 million in 2023) mainly due to the price variation of CO2.
hThe loss of \u20ac(38) million recognized in other operating gains and losses is explained by the discontinuance of cash flow hedge relationship on CO2 in 2024. Refer also to F32D Other market risks.
In 2024, in the caption other gains and losses on net indebtedness, the foreign exchange income decreased by \u20ac(4) million in comparison to 2023. The gain of \u20ac1\u00a0million (\u20ac6 million for 2023) is related to the interest element of financial derivatives (forward points). The other costs decreased by \u20ac(4) million in 2024 in comparison to 2023 due to one off costs incurred in the frame of the separation plan in 2023.
Net interest expense of \u20ac79 million includes \u20ac5 million of interest rate risk recycled from OCI.
| \n In \u20ac million | \n\n Cash flow hedges | \n|||||||
|---|---|---|---|---|---|---|---|---|
| \n Foreign currency risk | \n\n Interest rate risk | \n\n Commodity risk | \n\n Total | \n|||||
| \n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n|
| \n Balance at January 1 | \n\n 1 | \n\n 13 | \n\n -61 | \n\n 0 | \n\n -87 | \n\n 67 | \n\n -148 | \n\n 81 | \n
| \n Recycling from other comprehensive income of derivative financial instruments designated in a cash flow hedge relationship | \n\n 7 | \n\n -41 | \n\n 5 | \n\n 9 | \n\n 43 | \n\n 13 | \n\n 55 | \n\n -20 | \n
| \n Effective portion of changes in fair value of cash flow hedge | \n\n -13 | \n\n 29 | \n\n 23 | \n\n -70 | \n\n -15 | \n\n -167 | \n\n -6 | \n\n -209 | \n
| \n Balance at December 31 | \n\n -5 | \n\n 1 | \n\n -33 | \n\n -61 | \n\n -60 | \n\n -87 | \n\n -99 | \n\n -148 | \n
Financial assets
Trade receivables are initially measured at their transaction price, if they do not contain a significant financing component, which is the case for substantially all trade receivables. Other financial assets are initially measured at fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset.
A financial asset is classified as current when the cash flows expected to flow from the instrument mature within one year.
All recognized financial assets will subsequently be measured at either amortized cost or fair value under IFRS 9 Financial Instruments, specifically:
\u2022A debt instrument that (i) is held within a business model whose objective is to collect the contractual cash flows and (ii) has contractual cash flows that are solely payments of principal and interest on the principal amount outstanding is measured at amortized cost (net of any write down for impairment), unless the asset is designated at fair value through profit or loss (FVTPL) under the fair value option.
\u2022All other debt instruments are measured at FVTPL.
\u2022All equity investments are measured in the consolidated statement of financial position at fair value, with gains and losses recognized in profit or loss except that if an equity investment is not held for trading, nor contingent consideration recognized by an acquirer in a business combination, an irrevocable election can be made at initial recognition to measure the investment at FVTOCI, with dividend income recognized in profit or loss. This classification is determined on an instrument-by-instrument basis. Upon derecognition, the cumulative gains or losses previously recognized in other comprehensive income are reclassified to retained earnings.
\u2022Equity investments in partnerships of investment funds are measured in the consolidated statement of financial position at fair value with gains and losses recognized in profit or loss. Based on the analysis of the characteristics of these funds the Group determined that they were not eligible for the FVTOCI option and therefore are accounted for at FVTPL.
\u2022For instruments quoted in an active market, the fair value corresponds to a market price (level 1). For instruments that are not quoted in an active market, the fair value is determined using valuation techniques including reference to recent arm\u2019s length market transactions or transactions involving instruments which are substantially the same (level 2), or discounted cash flow analysis including, to the greatest possible extent, assumptions consistent with observable market data (level 3). However, in limited circumstances, cost of equity instruments may be an appropriate estimate of their fair value. That may be the case if insufficient more recent information is available to measure fair value, or if there is a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.
Valuation techniques and assumptions used for measuring fair value.
fAccounting policy
Quoted market prices are available for financial assets and financial liabilities with standard terms and conditions that are traded on active markets. The fair values of derivative financial instruments are equal to their quoted prices, if available. In case such quoted prices are not available, the fair value of the financial instruments is determined based on a discounted cash flow analysis using the applicable yield curve derived from quoted interest rates matching maturities of the contracts for non-optional derivatives. Optional derivatives are fair valued based on option pricing models, taking into account the present value of probability weighted expected future payoffs, using market reference formulas.
The fair values of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis.
Financial assets
Trade receivables are initially measured at their transaction price, if they do not contain a significant financing component, which is the case for substantially all trade receivables. Other financial assets are initially measured at fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset.
A financial asset is classified as current when the cash flows expected to flow from the instrument mature within one year.
All recognized financial assets will subsequently be measured at either amortized cost or fair value under IFRS 9 Financial Instruments, specifically:
\u2022A debt instrument that (i) is held within a business model whose objective is to collect the contractual cash flows and (ii) has contractual cash flows that are solely payments of principal and interest on the principal amount outstanding is measured at amortized cost (net of any write down for impairment), unless the asset is designated at fair value through profit or loss (FVTPL) under the fair value option.
\u2022All other debt instruments are measured at FVTPL.
\u2022All equity investments are measured in the consolidated statement of financial position at fair value, with gains and losses recognized in profit or loss except that if an equity investment is not held for trading, nor contingent consideration recognized by an acquirer in a business combination, an irrevocable election can be made at initial recognition to measure the investment at FVTOCI, with dividend income recognized in profit or loss. This classification is determined on an instrument-by-instrument basis. Upon derecognition, the cumulative gains or losses previously recognized in other comprehensive income are reclassified to retained earnings.
\u2022Equity investments in partnerships of investment funds are measured in the consolidated statement of financial position at fair value with gains and losses recognized in profit or loss. Based on the analysis of the characteristics of these funds the Group determined that they were not eligible for the FVTOCI option and therefore are accounted for at FVTPL.
\u2022For instruments quoted in an active market, the fair value corresponds to a market price (level 1). For instruments that are not quoted in an active market, the fair value is determined using valuation techniques including reference to recent arm\u2019s length market transactions or transactions involving instruments which are substantially the same (level 2), or discounted cash flow analysis including, to the greatest possible extent, assumptions consistent with observable market data (level 3). However, in limited circumstances, cost of equity instruments may be an appropriate estimate of their fair value. That may be the case if insufficient more recent information is available to measure fair value, or if there is a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.
Financial liabilities
Financial liabilities are initially measured at fair value minus, in the case of a financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the issue of the financial liability. Subsequently, they are measured at amortized cost, except for:
\u2022financial liabilities at fair value through profit or loss. Such liabilities, including derivatives that are liabilities, are subsequently measured at fair value;
\u2022financial guarantee contracts. After initial recognition, guarantees are subsequently measured at the higher of the expected losses and the amount initially recognized.
Derivative financial instruments
A derivative financial instrument is a financial instrument or other contract within the scope of IFRS 9 Financial Instruments with all three of the following characteristics:
\u2022its value changes in response to the change in a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract (sometimes called the \"underlying\");
\u2022it requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors;
\u2022it is settled at a future date.
The Group enters into a variety of derivative financial instruments (forward, future, option, collars and swap contracts) to manage its exposure to interest rate risk, foreign exchange rate risk, and commodity risk (mainly utility and CO2 emission rights price risks).
As explained above, derivatives are initially recognized at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in income or expense, unless the derivative is designated and effective as a hedging instrument. The Group designates certain derivatives as hedging instruments of the exposure to variability in cash flows with respect to a recognized asset or liability or a highly probable forecast transaction that could affect profit or loss (cash flow hedges).
A derivative with a positive fair value is recognized as a financial asset whereas a derivative with a negative fair value is recognized as a financial liability. Derivative instruments (or portions of them) are presented as non-current assets or non-current liabilities if the remaining maturity of the underlying settlements is more than 12 months after the reporting period. Other derivative instruments (or portions of them) are presented as current assets or current liabilities.
Valuation techniques and assumptions used for measuring fair value.
fAccounting policy
Quoted market prices are available for financial assets and financial liabilities with standard terms and conditions that are traded on active markets. The fair values of derivative financial instruments are equal to their quoted prices, if available. In case such quoted prices are not available, the fair value of the financial instruments is determined based on a discounted cash flow analysis using the applicable yield curve derived from quoted interest rates matching maturities of the contracts for non-optional derivatives. Optional derivatives are fair valued based on option pricing models, taking into account the present value of probability weighted expected future payoffs, using market reference formulas.
The fair values of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis.
Financial assets
Trade receivables are initially measured at their transaction price, if they do not contain a significant financing component, which is the case for substantially all trade receivables. Other financial assets are initially measured at fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset.
A financial asset is classified as current when the cash flows expected to flow from the instrument mature within one year.
All recognized financial assets will subsequently be measured at either amortized cost or fair value under IFRS 9 Financial Instruments, specifically:
\u2022A debt instrument that (i) is held within a business model whose objective is to collect the contractual cash flows and (ii) has contractual cash flows that are solely payments of principal and interest on the principal amount outstanding is measured at amortized cost (net of any write down for impairment), unless the asset is designated at fair value through profit or loss (FVTPL) under the fair value option.
\u2022All other debt instruments are measured at FVTPL.
\u2022All equity investments are measured in the consolidated statement of financial position at fair value, with gains and losses recognized in profit or loss except that if an equity investment is not held for trading, nor contingent consideration recognized by an acquirer in a business combination, an irrevocable election can be made at initial recognition to measure the investment at FVTOCI, with dividend income recognized in profit or loss. This classification is determined on an instrument-by-instrument basis. Upon derecognition, the cumulative gains or losses previously recognized in other comprehensive income are reclassified to retained earnings.
\u2022Equity investments in partnerships of investment funds are measured in the consolidated statement of financial position at fair value with gains and losses recognized in profit or loss. Based on the analysis of the characteristics of these funds the Group determined that they were not eligible for the FVTOCI option and therefore are accounted for at FVTPL.
\u2022For instruments quoted in an active market, the fair value corresponds to a market price (level 1). For instruments that are not quoted in an active market, the fair value is determined using valuation techniques including reference to recent arm\u2019s length market transactions or transactions involving instruments which are substantially the same (level 2), or discounted cash flow analysis including, to the greatest possible extent, assumptions consistent with observable market data (level 3). However, in limited circumstances, cost of equity instruments may be an appropriate estimate of their fair value. That may be the case if insufficient more recent information is available to measure fair value, or if there is a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.
Impairment of financial assets
\u2022The impairment loss of a financial asset measured at amortized cost is calculated based on the expected loss model, representing the weighted average of credit losses with the respective risks of a default occurring as the weights. Expected credit losses are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
\u2022For trade receivables that do not contain a significant financing component (i.e. substantially all trade receivables), the loss allowance is measured at an amount equal to lifetime expected credit losses. Those are the expected credit losses that result from all possible default events over the expected life of those trade receivables, using a provision matrix that considers historical information on defaults adjusted for the forward-looking information per customer. The Group considers a financial asset in default risk when contractual payments are 60 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is fully impaired when there is no reasonable expectation of recovering the contractual cash flows.
Impairment losses are recognized in the consolidated income statement, except for debt instruments measured at fair value through other comprehensive income.
In this case, the allowance is recognized in other comprehensive income.
Financial assets
Trade receivables are initially measured at their transaction price, if they do not contain a significant financing component, which is the case for substantially all trade receivables. Other financial assets are initially measured at fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset.
A financial asset is classified as current when the cash flows expected to flow from the instrument mature within one year.
All recognized financial assets will subsequently be measured at either amortized cost or fair value under IFRS 9 Financial Instruments, specifically:
\u2022A debt instrument that (i) is held within a business model whose objective is to collect the contractual cash flows and (ii) has contractual cash flows that are solely payments of principal and interest on the principal amount outstanding is measured at amortized cost (net of any write down for impairment), unless the asset is designated at fair value through profit or loss (FVTPL) under the fair value option.
\u2022All other debt instruments are measured at FVTPL.
\u2022All equity investments are measured in the consolidated statement of financial position at fair value, with gains and losses recognized in profit or loss except that if an equity investment is not held for trading, nor contingent consideration recognized by an acquirer in a business combination, an irrevocable election can be made at initial recognition to measure the investment at FVTOCI, with dividend income recognized in profit or loss. This classification is determined on an instrument-by-instrument basis. Upon derecognition, the cumulative gains or losses previously recognized in other comprehensive income are reclassified to retained earnings.
\u2022Equity investments in partnerships of investment funds are measured in the consolidated statement of financial position at fair value with gains and losses recognized in profit or loss. Based on the analysis of the characteristics of these funds the Group determined that they were not eligible for the FVTOCI option and therefore are accounted for at FVTPL.
\u2022For instruments quoted in an active market, the fair value corresponds to a market price (level 1). For instruments that are not quoted in an active market, the fair value is determined using valuation techniques including reference to recent arm\u2019s length market transactions or transactions involving instruments which are substantially the same (level 2), or discounted cash flow analysis including, to the greatest possible extent, assumptions consistent with observable market data (level 3). However, in limited circumstances, cost of equity instruments may be an appropriate estimate of their fair value. That may be the case if insufficient more recent information is available to measure fair value, or if there is a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.
Impairment of financial assets
\u2022The impairment loss of a financial asset measured at amortized cost is calculated based on the expected loss model, representing the weighted average of credit losses with the respective risks of a default occurring as the weights. Expected credit losses are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
\u2022For trade receivables that do not contain a significant financing component (i.e. substantially all trade receivables), the loss allowance is measured at an amount equal to lifetime expected credit losses. Those are the expected credit losses that result from all possible default events over the expected life of those trade receivables, using a provision matrix that considers historical information on defaults adjusted for the forward-looking information per customer. The Group considers a financial asset in default risk when contractual payments are 60 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is fully impaired when there is no reasonable expectation of recovering the contractual cash flows.
Impairment losses are recognized in the consolidated income statement, except for debt instruments measured at fair value through other comprehensive income.
In this case, the allowance is recognized in other comprehensive income.
Impairment of financial assets
\u2022The impairment loss of a financial asset measured at amortized cost is calculated based on the expected loss model, representing the weighted average of credit losses with the respective risks of a default occurring as the weights. Expected credit losses are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
\u2022For trade receivables that do not contain a significant financing component (i.e. substantially all trade receivables), the loss allowance is measured at an amount equal to lifetime expected credit losses. Those are the expected credit losses that result from all possible default events over the expected life of those trade receivables, using a provision matrix that considers historical information on defaults adjusted for the forward-looking information per customer. The Group considers a financial asset in default risk when contractual payments are 60 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is fully impaired when there is no reasonable expectation of recovering the contractual cash flows.
Impairment losses are recognized in the consolidated income statement, except for debt instruments measured at fair value through other comprehensive income.
In this case, the allowance is recognized in other comprehensive income.
Impairment of financial assets
\u2022The impairment loss of a financial asset measured at amortized cost is calculated based on the expected loss model, representing the weighted average of credit losses with the respective risks of a default occurring as the weights. Expected credit losses are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
\u2022For trade receivables that do not contain a significant financing component (i.e. substantially all trade receivables), the loss allowance is measured at an amount equal to lifetime expected credit losses. Those are the expected credit losses that result from all possible default events over the expected life of those trade receivables, using a provision matrix that considers historical information on defaults adjusted for the forward-looking information per customer. The Group considers a financial asset in default risk when contractual payments are 60 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is fully impaired when there is no reasonable expectation of recovering the contractual cash flows.
Impairment losses are recognized in the consolidated income statement, except for debt instruments measured at fair value through other comprehensive income.
In this case, the allowance is recognized in other comprehensive income.
See the Financial risk in the Management of risks section of this annual report for additional information on credit risk management.
The Group continuously monitors the credit risk of important business partners.
The Group engages in transactions only with financial institutions with a good credit rating. The Group monitors and manages exposures to financial institutions within approved counterparty credit limits and credit risk parameters in order to mitigate the risk of default. For financial guarantees, see note F36 Contingent liabilities and financial guarantees.
The Group recognizes expected credit losses on all of its trade receivables: it applies the simplified approach and recognizes lifetime expected losses on all trade receivables, using a provision matrix in order to calculate the lifetime expected credit losses for trade receivables, using historical information on defaults adjusted for the forward-looking information.
The Group classifies the customers and their related receivables in various rating classes, based on the risks\u2019 grading attributed to the customers and on the aging balance of receivables. As such, for all receivables overdue below six months, the Group considers percentages within a range between 0.005% and 4.031%, depending on the rating class. For all receivables overdue in excess of six months, the Group considers a rate of 50% or of 100%, depending on the rating class. The customer\u2019s grading is reviewed annually for customers assessed as low risk profile, and every six months for customers assessed as higher risk profile.
There is no significant concentration of credit risk at Group level because the receivables\u2019 credit risk is spread over a large number of customers and markets.
The aging of trade receivables, financial instruments \u2013 operational, loans and other non-current assets is as follows:
| \n December 31, 2024 | \n\n With expected loss allowance, not credit-impaired | \n||||||
|---|---|---|---|---|---|---|---|
| \n In \u20ac million | \n\n Total | \n\n Credit-impaired | \n\n not past due | \n\n less than 30 days past due | \n\n between 30 and 60 days past due | \n\n between 60 and 90 days past due | \n\n more than 90 days past due | \n
| \n Trade receivables | \n\n 850 | \n\n 22 | \n\n 804 | \n\n 18 | \n\n 1 | \n\n 2 | \n\n 2 | \n
| \n Trade receivables - allowance | \n\n -23 | \n\n -20 | \n\n -1 | \n\n \n | \n\n \n | \n\n \n | \n\n -2 | \n
| \n Trade receivables - net | \n\n 826 | \n\n 2 | \n\n 803 | \n\n 18 | \n\n 1 | \n\n 2 | \n\n 0 | \n
| \n Financial instruments - operational | \n\n 80 | \n\n \n | \n\n 80 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets(1) | \n\n 116 | \n\n 4 | \n\n 111 | \n\n 0 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - allowance | \n\n -4 | \n\n -4 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - net(1) | \n\n 112 | \n\n 0 | \n\n 111 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total | \n\n 1,018 | \n\n 3 | \n\n 994 | \n\n 18 | \n\n 1 | \n\n 2 | \n\n 0 | \n
(1)Loans and other non-current assets do not include pension fund surplus and CO2 -term inventory.
| \n December 31, 2023 | \n\n With expected loss allowance, not credit-impaired | \n||||||
|---|---|---|---|---|---|---|---|
| \n In \u20ac million | \n\n Total | \n\n Credit-impaired | \n\n not past due | \n\n less than 30 days past due | \n\n between 30 and 60 days past due | \n\n between 60 and 90 days past due | \n\n more than 90 days past due | \n
| \n Trade receivables | \n\n 894 | \n\n 55 | \n\n 802 | \n\n 28 | \n\n 1 | \n\n 6 | \n\n 3 | \n
| \n Trade receivables - allowance | \n\n -54 | \n\n -53 | \n\n -1 | \n\n \n | \n\n \n | \n\n \n | \n\n -1 | \n
| \n Trade receivables - net | \n\n 840 | \n\n 3 | \n\n 801 | \n\n 28 | \n\n 1 | \n\n 6 | \n\n 2 | \n
| \n Financial instruments - operational | \n\n 66 | \n\n \n | \n\n 66 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets(1) | \n\n 140 | \n\n 4 | \n\n 135 | \n\n 0 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - allowance | \n\n -4 | \n\n -4 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - net(1) | \n\n 136 | \n\n 0 | \n\n 135 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total | \n\n 1,042 | \n\n 3 | \n\n 1,002 | \n\n 28 | \n\n 1 | \n\n 6 | \n\n 2 | \n
(1) Loans and other non-current assets do not include pension fund surplus and CO2 emission rights inventory.
The table below presents the allowances on trade receivables:
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n January 1 | \n\n -54 | \n\n -72 | \n
| \n Additions | \n\n -3 | \n\n -11 | \n
| \n Uses | \n\n 12 | \n\n 5 | \n
| \n Reversal | \n\n 15 | \n\n 9 | \n
| \n Currency translation differences | \n\n 2 | \n\n -1 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n
| \n Partial Demerger | \n\n \n | \n\n 14 | \n
| \n Other | \n\n 5 | \n\n 0 | \n
| \n December 31 | \n\n -23 | \n\n -54 | \n
Impairment of financial assets
\u2022The impairment loss of a financial asset measured at amortized cost is calculated based on the expected loss model, representing the weighted average of credit losses with the respective risks of a default occurring as the weights. Expected credit losses are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
\u2022For trade receivables that do not contain a significant financing component (i.e. substantially all trade receivables), the loss allowance is measured at an amount equal to lifetime expected credit losses. Those are the expected credit losses that result from all possible default events over the expected life of those trade receivables, using a provision matrix that considers historical information on defaults adjusted for the forward-looking information per customer. The Group considers a financial asset in default risk when contractual payments are 60 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is fully impaired when there is no reasonable expectation of recovering the contractual cash flows.
Impairment losses are recognized in the consolidated income statement, except for debt instruments measured at fair value through other comprehensive income.
In this case, the allowance is recognized in other comprehensive income.
See the Financial risk in the Management of risks section of this annual report for additional information on credit risk management.
The Group continuously monitors the credit risk of important business partners.
The Group engages in transactions only with financial institutions with a good credit rating. The Group monitors and manages exposures to financial institutions within approved counterparty credit limits and credit risk parameters in order to mitigate the risk of default. For financial guarantees, see note F36 Contingent liabilities and financial guarantees.
The Group recognizes expected credit losses on all of its trade receivables: it applies the simplified approach and recognizes lifetime expected losses on all trade receivables, using a provision matrix in order to calculate the lifetime expected credit losses for trade receivables, using historical information on defaults adjusted for the forward-looking information.
The Group classifies the customers and their related receivables in various rating classes, based on the risks\u2019 grading attributed to the customers and on the aging balance of receivables. As such, for all receivables overdue below six months, the Group considers percentages within a range between 0.005% and 4.031%, depending on the rating class. For all receivables overdue in excess of six months, the Group considers a rate of 50% or of 100%, depending on the rating class. The customer\u2019s grading is reviewed annually for customers assessed as low risk profile, and every six months for customers assessed as higher risk profile.
There is no significant concentration of credit risk at Group level because the receivables\u2019 credit risk is spread over a large number of customers and markets.
The aging of trade receivables, financial instruments \u2013 operational, loans and other non-current assets is as follows:
| \n December 31, 2024 | \n\n With expected loss allowance, not credit-impaired | \n||||||
|---|---|---|---|---|---|---|---|
| \n In \u20ac million | \n\n Total | \n\n Credit-impaired | \n\n not past due | \n\n less than 30 days past due | \n\n between 30 and 60 days past due | \n\n between 60 and 90 days past due | \n\n more than 90 days past due | \n
| \n Trade receivables | \n\n 850 | \n\n 22 | \n\n 804 | \n\n 18 | \n\n 1 | \n\n 2 | \n\n 2 | \n
| \n Trade receivables - allowance | \n\n -23 | \n\n -20 | \n\n -1 | \n\n \n | \n\n \n | \n\n \n | \n\n -2 | \n
| \n Trade receivables - net | \n\n 826 | \n\n 2 | \n\n 803 | \n\n 18 | \n\n 1 | \n\n 2 | \n\n 0 | \n
| \n Financial instruments - operational | \n\n 80 | \n\n \n | \n\n 80 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets(1) | \n\n 116 | \n\n 4 | \n\n 111 | \n\n 0 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - allowance | \n\n -4 | \n\n -4 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - net(1) | \n\n 112 | \n\n 0 | \n\n 111 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total | \n\n 1,018 | \n\n 3 | \n\n 994 | \n\n 18 | \n\n 1 | \n\n 2 | \n\n 0 | \n
(1)Loans and other non-current assets do not include pension fund surplus and CO2 -term inventory.
| \n December 31, 2023 | \n\n With expected loss allowance, not credit-impaired | \n||||||
|---|---|---|---|---|---|---|---|
| \n In \u20ac million | \n\n Total | \n\n Credit-impaired | \n\n not past due | \n\n less than 30 days past due | \n\n between 30 and 60 days past due | \n\n between 60 and 90 days past due | \n\n more than 90 days past due | \n
| \n Trade receivables | \n\n 894 | \n\n 55 | \n\n 802 | \n\n 28 | \n\n 1 | \n\n 6 | \n\n 3 | \n
| \n Trade receivables - allowance | \n\n -54 | \n\n -53 | \n\n -1 | \n\n \n | \n\n \n | \n\n \n | \n\n -1 | \n
| \n Trade receivables - net | \n\n 840 | \n\n 3 | \n\n 801 | \n\n 28 | \n\n 1 | \n\n 6 | \n\n 2 | \n
| \n Financial instruments - operational | \n\n 66 | \n\n \n | \n\n 66 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets(1) | \n\n 140 | \n\n 4 | \n\n 135 | \n\n 0 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - allowance | \n\n -4 | \n\n -4 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - net(1) | \n\n 136 | \n\n 0 | \n\n 135 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total | \n\n 1,042 | \n\n 3 | \n\n 1,002 | \n\n 28 | \n\n 1 | \n\n 6 | \n\n 2 | \n
(1) Loans and other non-current assets do not include pension fund surplus and CO2 emission rights inventory.
The table below presents the allowances on trade receivables:
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n January 1 | \n\n -54 | \n\n -72 | \n
| \n Additions | \n\n -3 | \n\n -11 | \n
| \n Uses | \n\n 12 | \n\n 5 | \n
| \n Reversal | \n\n 15 | \n\n 9 | \n
| \n Currency translation differences | \n\n 2 | \n\n -1 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n
| \n Partial Demerger | \n\n \n | \n\n 14 | \n
| \n Other | \n\n 5 | \n\n 0 | \n
| \n December 31 | \n\n -23 | \n\n -54 | \n
Financial liabilities
Financial liabilities are initially measured at fair value minus, in the case of a financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the issue of the financial liability. Subsequently, they are measured at amortized cost, except for:
\u2022financial liabilities at fair value through profit or loss. Such liabilities, including derivatives that are liabilities, are subsequently measured at fair value;
\u2022financial guarantee contracts. After initial recognition, guarantees are subsequently measured at the higher of the expected losses and the amount initially recognized.
Derivative financial instruments
A derivative financial instrument is a financial instrument or other contract within the scope of IFRS 9 Financial Instruments with all three of the following characteristics:
\u2022its value changes in response to the change in a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract (sometimes called the \"underlying\");
\u2022it requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors;
\u2022it is settled at a future date.
The Group enters into a variety of derivative financial instruments (forward, future, option, collars and swap contracts) to manage its exposure to interest rate risk, foreign exchange rate risk, and commodity risk (mainly utility and CO2 emission rights price risks).
As explained above, derivatives are initially recognized at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in income or expense, unless the derivative is designated and effective as a hedging instrument. The Group designates certain derivatives as hedging instruments of the exposure to variability in cash flows with respect to a recognized asset or liability or a highly probable forecast transaction that could affect profit or loss (cash flow hedges).
A derivative with a positive fair value is recognized as a financial asset whereas a derivative with a negative fair value is recognized as a financial liability. Derivative instruments (or portions of them) are presented as non-current assets or non-current liabilities if the remaining maturity of the underlying settlements is more than 12 months after the reporting period. Other derivative instruments (or portions of them) are presented as current assets or current liabilities.
Hedge accounting
The Group designates certain derivatives and embedded derivatives, in respect of interest rate risk, foreign exchange rate risk, Solvay share price risk, and commodity risk (mainly utility and CO2 emission rights price risks), as hedging instruments in a cash flow hedge relationship.
At the inception of the hedge relationship, there is a formal designation and documentation of the hedging relationship and the Group\u2019s risk management objective and strategy for undertaking the hedge. So to apply hedge accounting: (a) there is an economic relationship between the hedged item and the hedging instrument, (b) the effect of credit risk does not dominate the value changes that result from that economic relationship, and (c) the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item.
The requirement under (a) above that an economic relationship exists means that there is an expectation that the value of the hedging instrument and the value of the hedged item will systematically change in the opposite direction in response to movements in either the same underlying (or underlyings that are economically related in such a way that they respond in a similar way to the risk that is being hedged).
Cash flow hedges
The effective portion of changes in the fair value of hedging instruments that are designated in a cash flow hedge is recognized in other comprehensive income.
The gain or loss relating to the ineffective portion is recognized immediately in profit or loss.
As long as cash flow hedge qualifies, the hedging relationship is accounted for as follows:
(a)the separate component of equity associated with the hedged item (cash flow hedge reserve) is adjusted to the lower of the following (in absolute amounts):
(i)the cumulative gain or loss on the hedging instrument from inception of the hedge; and
(ii)the cumulative change in fair value (present value) of the hedged item (i.e. the present value of the cumulative change in the hedged expected future cash flows) from inception of the hedge.
(b)the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge (i.e. The portion that is offset by the change in the cash flow hedge reserve calculated in accordance with (a)) is recognized in other comprehensive income;
(c)any remaining gain or loss on the hedging instrument (or any gain or loss required to balance the change in the cash flow hedge reserve calculated in accordance with (a)) is hedge ineffectiveness that is recognized in profit or loss.
(d)the amount that has been accumulated in the cash flow hedge reserve in accordance with (a) is accounted for as follows:
(i)if a hedged forecast transaction subsequently results in the recognition of a non-financial asset or a non-financial liability, the Group removes that amount from the cash flow hedge reserve and includes it directly in the initial cost or other carrying amount of the asset or the liability. This is not a reclassification adjustment and hence it does not affect other comprehensive income;
(ii)for cash flow hedges other than those covered by i), that amount is reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment in the same period or periods during which the hedged expected future cash flows affect profit or loss (for example, in the periods that interest income or interest expense is recognized or when a forecast sale occurs);
(iii)however, if that amount is a loss and the Group expects that all or a portion of that loss will not be recovered in one or more future periods, it immediately reclassifies the amount that is not expected to be recovered into profit or loss as a reclassification adjustment.
Most hedged items are transaction related. The time value of options, forward elements of forward contracts, and foreign currency basis spreads of financial instruments that are hedging the items affect profit or loss at the same time as those hedged items.
Hedge accounting is discontinued prospectively when the hedging relationship (or a part of a hedging relationship) ceases to meet the qualifying criteria (after considering any rebalancing of the hedging relationship, if applicable). This includes instances when the hedging instrument expires or is sold, terminated or exercised.
When the Group discontinues hedge accounting for a cash flow hedge it accounts for the amount that has been accumulated in the cash flow hedge reserve as follows:
\u2022if the hedged future cash flows are still expected to occur, that amount remains in the cash flow hedge reserve until the future cash flows occur. However, if that amount is a loss and the Group expects that all or a portion of that loss will not be recovered in one or more future periods, it immediately reclassifies the amount that is not expected to be recovered into profit or loss as a reclassification adjustment;
\u2022if the hedged future cash flows are no longer expected to occur, that amount is immediately reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment. A hedged future cash flow that is no longer highly probable to occur may still be expected to occur.
Derivative financial instruments
A derivative financial instrument is a financial instrument or other contract within the scope of IFRS 9 Financial Instruments with all three of the following characteristics:
\u2022its value changes in response to the change in a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract (sometimes called the \"underlying\");
\u2022it requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors;
\u2022it is settled at a future date.
The Group enters into a variety of derivative financial instruments (forward, future, option, collars and swap contracts) to manage its exposure to interest rate risk, foreign exchange rate risk, and commodity risk (mainly utility and CO2 emission rights price risks).
As explained above, derivatives are initially recognized at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in income or expense, unless the derivative is designated and effective as a hedging instrument. The Group designates certain derivatives as hedging instruments of the exposure to variability in cash flows with respect to a recognized asset or liability or a highly probable forecast transaction that could affect profit or loss (cash flow hedges).
A derivative with a positive fair value is recognized as a financial asset whereas a derivative with a negative fair value is recognized as a financial liability. Derivative instruments (or portions of them) are presented as non-current assets or non-current liabilities if the remaining maturity of the underlying settlements is more than 12 months after the reporting period. Other derivative instruments (or portions of them) are presented as current assets or current liabilities.
Hedge accounting
The Group designates certain derivatives and embedded derivatives, in respect of interest rate risk, foreign exchange rate risk, Solvay share price risk, and commodity risk (mainly utility and CO2 emission rights price risks), as hedging instruments in a cash flow hedge relationship.
At the inception of the hedge relationship, there is a formal designation and documentation of the hedging relationship and the Group\u2019s risk management objective and strategy for undertaking the hedge. So to apply hedge accounting: (a) there is an economic relationship between the hedged item and the hedging instrument, (b) the effect of credit risk does not dominate the value changes that result from that economic relationship, and (c) the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item.
The requirement under (a) above that an economic relationship exists means that there is an expectation that the value of the hedging instrument and the value of the hedged item will systematically change in the opposite direction in response to movements in either the same underlying (or underlyings that are economically related in such a way that they respond in a similar way to the risk that is being hedged).
Cash flow hedges
The effective portion of changes in the fair value of hedging instruments that are designated in a cash flow hedge is recognized in other comprehensive income.
The gain or loss relating to the ineffective portion is recognized immediately in profit or loss.
As long as cash flow hedge qualifies, the hedging relationship is accounted for as follows:
(a)the separate component of equity associated with the hedged item (cash flow hedge reserve) is adjusted to the lower of the following (in absolute amounts):
(i)the cumulative gain or loss on the hedging instrument from inception of the hedge; and
(ii)the cumulative change in fair value (present value) of the hedged item (i.e. the present value of the cumulative change in the hedged expected future cash flows) from inception of the hedge.
(b)the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge (i.e. The portion that is offset by the change in the cash flow hedge reserve calculated in accordance with (a)) is recognized in other comprehensive income;
(c)any remaining gain or loss on the hedging instrument (or any gain or loss required to balance the change in the cash flow hedge reserve calculated in accordance with (a)) is hedge ineffectiveness that is recognized in profit or loss.
(d)the amount that has been accumulated in the cash flow hedge reserve in accordance with (a) is accounted for as follows:
(i)if a hedged forecast transaction subsequently results in the recognition of a non-financial asset or a non-financial liability, the Group removes that amount from the cash flow hedge reserve and includes it directly in the initial cost or other carrying amount of the asset or the liability. This is not a reclassification adjustment and hence it does not affect other comprehensive income;
(ii)for cash flow hedges other than those covered by i), that amount is reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment in the same period or periods during which the hedged expected future cash flows affect profit or loss (for example, in the periods that interest income or interest expense is recognized or when a forecast sale occurs);
(iii)however, if that amount is a loss and the Group expects that all or a portion of that loss will not be recovered in one or more future periods, it immediately reclassifies the amount that is not expected to be recovered into profit or loss as a reclassification adjustment.
Most hedged items are transaction related. The time value of options, forward elements of forward contracts, and foreign currency basis spreads of financial instruments that are hedging the items affect profit or loss at the same time as those hedged items.
Hedge accounting is discontinued prospectively when the hedging relationship (or a part of a hedging relationship) ceases to meet the qualifying criteria (after considering any rebalancing of the hedging relationship, if applicable). This includes instances when the hedging instrument expires or is sold, terminated or exercised.
When the Group discontinues hedge accounting for a cash flow hedge it accounts for the amount that has been accumulated in the cash flow hedge reserve as follows:
\u2022if the hedged future cash flows are still expected to occur, that amount remains in the cash flow hedge reserve until the future cash flows occur. However, if that amount is a loss and the Group expects that all or a portion of that loss will not be recovered in one or more future periods, it immediately reclassifies the amount that is not expected to be recovered into profit or loss as a reclassification adjustment;
\u2022if the hedged future cash flows are no longer expected to occur, that amount is immediately reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment. A hedged future cash flow that is no longer highly probable to occur may still be expected to occur.
The following table gives an overview of the carrying amount of all financial instruments by category as defined by IFRS 9.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Carrying amount | \n\n Carrying amount | \n|
| \n Fair value through profit or loss | \n\n 59 | \n\n 105 | \n
| \n Held for trading (financial instruments - operational - see note F26) | \n\n 2 | \n\n 16 | \n
| \n Held for trading (other financial instruments - see note F33, table Changes in financial debt) | \n\n 1 | \n\n 2 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n 55 | \n\n 87 | \n
| \n Financial assets measured at amortized cost | \n\n 1,497 | \n\n 1,677 | \n
| \n Financial assets measured at amortized cost (including cash and cash equivalents, trade receivables, loans and other current/non-current assets except pension fund surpluses and long-term inventory balance) | \n\n 1,497 | \n\n 1,677 | \n
| \n Financial assets measured at fair value through other comprehensive income | \n\n 85 | \n\n 51 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship (see note F26) | \n\n 78 | \n\n 50 | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n 8 | \n\n 1 | \n
| \n Total financial assets | \n\n 1,642 | \n\n 1,833 | \n
| \n \n | \n\n \n | \n\n \n | \n
| \n Fair value through profit or loss | \n\n -27 | \n\n -37 | \n
| \n Held for trading (financial instruments - operational - see note F34) | \n\n -26 | \n\n -36 | \n
| \n Held for trading (financial debt - see note F33, table Changes in financial debt) | \n\n -2 | \n\n -1 | \n
| \n Financial liabilities measured at amortized cost | \n\n -2,766 | \n\n -2,887 | \n
| \n Financial liabilities measured at amortized cost (excluding dividends payable and IFRS 16 lease liabilities) | \n\n -2,659 | \n\n -2,712 | \n
| \n Dividends payables | \n\n -107 | \n\n -175 | \n
| \n Lease liabilities measured at amortized cost | \n\n -306 | \n\n -307 | \n
| \n Lease liabilities IFRS16 measured at amortized cost | \n\n -306 | \n\n -307 | \n
| \n Financial liabilities measured at fair value through other comprehensive income | \n\n -88 | \n\n -165 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship (see note F34) | \n\n -88 | \n\n -165 | \n
| \n Total financial and lease liabilities | \n\n -3,187 | \n\n -3,395 | \n
The category \u201cHeld for trading\u201d contains derivative financial instruments that are used for management of foreign currency risk, utility and CO2 emission rights price risks, index and shares. Contracts which have been documented as hedging instruments (hedge accounting under IFRS 9 Financial Instruments) or which meet the exemption criteria for own use are not included in the category \u201cHeld for trading.\u201d
At the end of 2024, \u20ac55 million of instruments at fair value through profit or loss relate to equity instruments related to Syensqo Group.
Valuation techniques and assumptions used for measuring fair value.
fAccounting policy
Quoted market prices are available for financial assets and financial liabilities with standard terms and conditions that are traded on active markets. The fair values of derivative financial instruments are equal to their quoted prices, if available. In case such quoted prices are not available, the fair value of the financial instruments is determined based on a discounted cash flow analysis using the applicable yield curve derived from quoted interest rates matching maturities of the contracts for non-optional derivatives. Optional derivatives are fair valued based on option pricing models, taking into account the present value of probability weighted expected future payoffs, using market reference formulas.
The fair values of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||
|---|---|---|---|---|
| \n Carrying amount | \n\n Fair value | \n\n Carrying amount | \n\n Fair value | \n|
| \n Non-current assets - Financial instruments | \n\n 118 | \n\n 118 | \n\n 136 | \n\n 136 | \n
| \n Loans and other non-current assets (except pension fund surpluses and long-term inventory balance) | \n\n 118 | \n\n 118 | \n\n 136 | \n\n 136 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current liabilities - Financial instruments | \n\n -1,766 | \n\n -1,814 | \n\n -1,774 | \n\n -1,774 | \n
| \n Bonds | \n\n -1,492 | \n\n -1,540 | \n\n 0 | \n\n 0 | \n
| \n Other non-current debts | \n\n -253 | \n\n -253 | \n\n -1,735 | \n\n -1,735 | \n
| \n Other liabilities | \n\n -21 | \n\n -21 | \n\n -39 | \n\n -39 | \n
The carrying amounts of current financial assets and liabilities are estimated to reasonably approximate their fair values, due to the short term to maturity.
The table \u201cFinancial instruments measured at fair value in the consolidated statement of financial position\u201d provides an analysis of financial instruments that, after their initial recognition, are measured at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable. Financial instruments classified as held for trading and as hedging instruments in cash flow hedges are mainly grouped into Levels 1 and 2. They are fair valued based on forward pricing and swap models using present value calculations. The models incorporate various inputs including foreign exchange spot and interest rates of the respective currencies, currency basis spreads between the respective currencies, interest rate curves and forward rate curves of the underlying commodity. The equity instruments measured at fair value through OCI and through profit and loss are presented within Level 1 and 3. The fair value of the instruments presented under Level 3 is measured based on the guidelines recommended by The International Private Equity and Venture Capital Valuation (IPEV).
In accordance with the Group internal rules, the responsibility for measuring the fair value level resides with (a) the Treasury department for the non-utility derivative financial instruments, and the non-derivative financial liabilities, (b) the Sustainable Development and Energy department for the utility derivative financial instruments and (c) the Finance department for non-derivative financial assets.
The Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. During the year, no such transfers have occurred.
| \n In \u20ac million | \n\n December 31, 2024 | \n|||
|---|---|---|---|---|
| \n Level 1 | \n\n Level 2 | \n\n Level 3 | \n\n Total | \n|
| \n Held for trading | \n\n 0 | \n\n 4 | \n\n 0 | \n\n 4 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Shares | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022Index | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n 55 | \n\n \n | \n\n 0 | \n\n 55 | \n
| \n \u2022Shares | \n\n 55 | \n\n \n | \n\n \n | \n\n 55 | \n
| \n Cash flow hedges | \n\n 0 | \n\n 77 | \n\n 0 | \n\n 77 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n \n | \n\n 53 | \n\n 0 | \n\n 53 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 23 | \n\n 0 | \n\n 23 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n 0 | \n\n 0 | \n\n 8 | \n\n 8 | \n
| \n \u2022Shares | \n\n \n | \n\n \n | \n\n 8 | \n\n 8 | \n
| \n Total (assets) | \n\n 55 | \n\n 81 | \n\n 8 | \n\n 144 | \n
| \n \n | \n||||
| \n Held for trading | \n\n 0 | \n\n -27 | \n\n 0 | \n\n -27 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -4 | \n\n 0 | \n\n -4 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n -18 | \n\n 0 | \n\n -18 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Index | \n\n 0 | \n\n -3 | \n\n 0 | \n\n -3 | \n
| \n Cash flow hedges | \n\n 0 | \n\n -87 | \n\n 0 | \n\n -87 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -7 | \n\n 0 | \n\n -7 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n \u2022Utility risk | \n\n \n | \n\n -47 | \n\n 0 | \n\n -47 | \n
| \n \u2022CO2 risk | \n\n \n | \n\n -32 | \n\n 0 | \n\n -32 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total (liabilities) | \n\n 0 | \n\n -115 | \n\n 0 | \n\n -115 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n|||
|---|---|---|---|---|
| \n Level 1 | \n\n Level 2 | \n\n Level 3 | \n\n Total | \n|
| \n Held for trading | \n\n 0 | \n\n 17 | \n\n 0 | \n\n 18 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 3 | \n\n 0 | \n\n 3 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 4 | \n\n 0 | \n\n 5 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Shares | \n\n \n | \n\n 8 | \n\n 0 | \n\n 8 | \n
| \n \u2022Index | \n\n 0 | \n\n 2 | \n\n 0 | \n\n 2 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n 87 | \n\n 0 | \n\n 0 | \n\n 87 | \n
| \n \u2022Shares | \n\n 87 | \n\n \n | \n\n \n | \n\n 87 | \n
| \n Cash flow hedges | \n\n 0 | \n\n 50 | \n\n 0 | \n\n 50 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 2 | \n\n 0 | \n\n 2 | \n
| \n \u2022 Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 47 | \n\n 0 | \n\n 48 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n 0 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n Total (assets) | \n\n 87 | \n\n 67 | \n\n 1 | \n\n 156 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Held for trading | \n\n 0 | \n\n -37 | \n\n 0 | \n\n -37 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -1 | \n\n 0 | \n\n -1 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n -8 | \n\n 0 | \n\n -8 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n -26 | \n\n 0 | \n\n -26 | \n
| \n \u2022 Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Index | \n\n 0 | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n Cash flow hedges | \n\n 0 | \n\n -166 | \n\n 0 | \n\n -166 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -1 | \n\n 0 | \n\n -1 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n -61 | \n\n 0 | \n\n -61 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n -59 | \n\n 0 | \n\n -59 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n -44 | \n\n 0 | \n\n -44 | \n
| \n \u2022Shares | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n Total (liabilities) | \n\n 0 | \n\n -202 | \n\n 0 | \n\n -202 | \n
The fair value of the financial instruments to manage the utility risk reduced in 2024. This is mainly explained by the fact that Solvay had decided to concentrate on its own internal consumption only and the price increase of gas and electricity in comparison to 2023.
Reconciliation of level 3 fair value measurements of financial assets and liabilities.
| \n In \u20ac million | \n\n December 31, 2024 | \n||
|---|---|---|---|
| \n At fair value through profit or loss | \n\n At fair value through other comprehensive income | \n\n Total | \n|
| \n Equity instruments | \n\n Equity instruments | \n||
| \n Opening balance at January 1 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n Total gains or losses | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Recognized in profit or loss | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Recognized in other comprehensive income | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Acquisitions | \n\n \n | \n\n 7 | \n\n 7 | \n
| \n Capital decreases | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Partial Demerger | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Transfers out of level 3 | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Derivative instruments in designated hedge accounting relationships | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Transfer to assets held for sale | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Closing balance at December 31 | \n\n 0 | \n\n 8 | \n\n 8 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n||
|---|---|---|---|
| \n At fair value through profit or loss | \n\n At fair value through other comprehensive income | \n\n Total | \n|
| \n Equity instruments | \n\n Equity instruments | \n||
| \n Opening balance at January 1 | \n\n 47 | \n\n 24 | \n\n 71 | \n
| \n Total gains or losses | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Recognized in profit or loss | \n\n 2 | \n\n \n | \n\n 2 | \n
| \n Recognized in other comprehensive income | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Acquisitions | \n\n 0 | \n\n 8 | \n\n 8 | \n
| \n Capital decreases | \n\n \n | \n\n -1 | \n\n -1 | \n
| \n Partial Demerger | \n\n -49 | \n\n -30 | \n\n -79 | \n
| \n Closing balance at December 31 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Recognized in the consolidated income statement | \n\n \n | \n\n \n | \n
| \n Recycling from OCI of derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n -7 | \n\n 39 | \n
| \n \u2022Utility risk | \n\n -4 | \n\n -1 | \n
| \n \u2022Interest rate risk | \n\n \n | \n\n \n | \n
| \n Changes in the fair value of financial instruments held for trading | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n \n | \n\n \n | \n
| \n \u2022Utility risk | \n\n -2 | \n\n 86 | \n
| \n \u2022CO2 risk | \n\n \n | \n\n 15 | \n
| \n Recognized in the gross margin | \n\n -14 | \n\n 138 | \n
| \n Recycling from OCI of derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022CO2 risk | \n\n -38 | \n\n \n | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n
| \n Changes in the fair value of financial instruments held for trading | \n\n \n | \n\n \n | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022CO2 risk | \n\n 8 | \n\n 0 | \n
| \n \u2022Shares | \n\n -3 | \n\n 0 | \n
| \n Gains and losses (time value) on derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022CO2 risk | \n\n \n | \n\n \n | \n
| \n Foreign operating exchange gains and losses | \n\n 0 | \n\n 2 | \n
| \n Recognized in other operating gains and losses | \n\n -33 | \n\n 2 | \n
| \n Recycling from OCI of derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n Changes in the fair value of financial instruments held for trading | \n\n \n | \n\n \n | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022 Shares | \n\n 0 | \n\n 0 | \n
| \n Ineffective portion of derivative financial instruments designated in cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n Recognized in results from portfolio management and reassessments | \n\n 0 | \n\n 0 | \n
| \n Net interest expense | \n\n -79 | \n\n -24 | \n
| \n Financial charge on lease liabilities | \n\n -12 | \n\n -11 | \n
| \n Other gains and losses on net indebtedness (excluding gains and losses on items not related to financial instruments) | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n -3 | \n\n 1 | \n
| \n \u2022Interest element of financial instruments | \n\n 1 | \n\n 6 | \n
| \n \u2022Others | \n\n -3 | \n\n -6 | \n
| \n Recognized in charges on net indebtedness(*) | \n\n -97 | \n\n -33 | \n
| \n Dividends from equity instruments measured at fair value through other comprehensive income | \n\n \n | \n\n \n | \n
| \n Capital gain on available-for-sale investment posted directly to the income statement | \n\n \n | \n\n \n | \n
| \n Recycling from equity of unrecognized gain and losses related to disposed available-for-sale financial assets(*) | \n\n 0 | \n\n 0 | \n
| \n Recycling from equity of impairment losses on available-for-sale financial assets(*) | \n\n 0 | \n\n 0 | \n
| \n Total recognized in the consolidated income statement | \n\n -144 | \n\n 107 | \n
(*)The note F6 Net Financial Charges shows an amount of \u20ac(76) million for 2024 (\u20ac(41) million for 2023) reported under \u201cNet cost of borrowing\u201d. This amount includes \u20ac(3) million for 2024 (\u20ac(6) million for 2023) of financial expenses not related to financial instruments that are excluded in this table from the line item \u201cRecognized in charges on net indebtedness.\u201d
The loss on highly probable sales in foreign currency recognized in gross margin for \u20ac(7) million is mainly explained by the hedging of the US$ currency and the loss recognized on utility instruments for \u20ac(4) million.
The change in fair value of financial instruments held for trading recognized in gross margin is explained by:
ha gain of \u20ac86 million in 2023, due to the price increase of gas and electricity;
In 2024, the loss of \u20ac(33) million recognized in other operating gains and losses is mainly explained by:
hA gain of \u20ac8 million (a gain of \u20ac15 million in 2023) mainly due to the price variation of CO2.
hThe loss of \u20ac(38) million recognized in other operating gains and losses is explained by the discontinuance of cash flow hedge relationship on CO2 in 2024. Refer also to F32D Other market risks.
In 2024, in the caption other gains and losses on net indebtedness, the foreign exchange income decreased by \u20ac(4) million in comparison to 2023. The gain of \u20ac1\u00a0million (\u20ac6 million for 2023) is related to the interest element of financial derivatives (forward points). The other costs decreased by \u20ac(4) million in 2024 in comparison to 2023 due to one off costs incurred in the frame of the separation plan in 2023.
Net interest expense of \u20ac79 million includes \u20ac5 million of interest rate risk recycled from OCI.
| \n In \u20ac million | \n\n Cash flow hedges | \n|||||||
|---|---|---|---|---|---|---|---|---|
| \n Foreign currency risk | \n\n Interest rate risk | \n\n Commodity risk | \n\n Total | \n|||||
| \n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n|
| \n Balance at January 1 | \n\n 1 | \n\n 13 | \n\n -61 | \n\n 0 | \n\n -87 | \n\n 67 | \n\n -148 | \n\n 81 | \n
| \n Recycling from other comprehensive income of derivative financial instruments designated in a cash flow hedge relationship | \n\n 7 | \n\n -41 | \n\n 5 | \n\n 9 | \n\n 43 | \n\n 13 | \n\n 55 | \n\n -20 | \n
| \n Effective portion of changes in fair value of cash flow hedge | \n\n -13 | \n\n 29 | \n\n 23 | \n\n -70 | \n\n -15 | \n\n -167 | \n\n -6 | \n\n -209 | \n
| \n Balance at December 31 | \n\n -5 | \n\n 1 | \n\n -33 | \n\n -61 | \n\n -60 | \n\n -87 | \n\n -99 | \n\n -148 | \n
Held for trading
The transactional risk is managed either by spot or forward contracts. Unless documented as hedging instruments (see above), derivative financial instruments are classified as held for trading.
In 2024, the notional amounts transacted to manage the transactional risk are:
ha long position of \u20ac368 million (compared to \u20ac271 million in 2023);
ha short position of \u20ac(239) million (compared to \u20ac(284) million in 2023);
hin comparison to 2023, the optimization of the cash centralization model led to a net long position increase of \u20ac142 million (mainly Chinese Yuan and US Dollar).
The following table details the notional amounts of the Group\u2019s derivatives contracts outstanding at the end of the period:
| \n In \u20ac million | \n\n Notional amount(1) | \n\n Fair value assets | \n\n Fair value liabilities | \n|||
|---|---|---|---|---|---|---|
| \n December 31 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n
| \n Held for trading long position | \n\n 368 | \n\n 271 | \n\n 1 | \n\n 1 | \n\n -1 | \n\n -1 | \n
| \n Held for trading short position | \n\n -239 | \n\n -284 | \n\n 1 | \n\n 2 | \n\n -3 | \n\n 0 | \n
| \n Total | \n\n 129 | \n\n -13 | \n\n 2 | \n\n 3 | \n\n -4 | \n\n -1 | \n
(1)Long/(short) positions (if the foreign exchange transaction does not involve the functional currency, both notional amounts are considered).
Cash flow hedge
The Group uses derivatives to hedge identified foreign exchange rate risks. It documents those as hedging instruments unless it hedges a recognized financial asset or liability when generally no cash flow hedge relationship is documented. Most hedges are transaction related.
At the end of 2024, the Group had mainly hedged highly probable sales in foreign currencies (short position) in a nominal amount of US$190 million (\u20ac183 million) and PLN55 million (\u20ac13 million). All cash flow hedge contracts that existed at the end of December 2024 will be settled within the next 12 months and will impact profit or loss during that period.
The following table details the notional amounts of Solvay\u2019s derivatives contracts outstanding at the end of the period:
Notional amounts
| \n In \u20ac million | \n\n December 31, 2024 | \n|||||||
|---|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument(1) | \n\n Notional amount of the risk exposure(1) | \n\n Percentage of exposure hedged | \n\n \n | \n\n Average hedge exchange rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Equity | \n\n Assets | \n\n Liabilities | \n||||||
| \n Cash flow hedges - Forecasted sales and purchases(3) | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n EUR/PLN | \n\n -13 | \n\n -20 | \n\n 65% | \n\n (2) | \n\n 4.37 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total EUR | \n\n -13 | \n\n -20 | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n USD/BRL | \n\n -51 | \n\n -85 | \n\n 60% | \n\n (2) | \n\n 5.40 | \n\n -2 | \n\n 0 | \n\n 2 | \n
| \n USD/CNY | \n\n -60 | \n\n -113 | \n\n 53% | \n\n (2) | \n\n 7.00 | \n\n -2 | \n\n 0 | \n\n 2 | \n
| \n USD/EUR | \n\n -42 | \n\n -82 | \n\n 52% | \n\n (2) | \n\n 1.10 | \n\n -2 | \n\n 0 | \n\n 2 | \n
| \n USD/MXN | \n\n -13 | \n\n -18 | \n\n 68% | \n\n (2) | \n\n 19.69 | \n\n -1 | \n\n 0 | \n\n 1 | \n
| \n USD/THB | \n\n -17 | \n\n -35 | \n\n 50% | \n\n (2) | \n\n 34.77 | \n\n 0 | \n\n 1 | \n\n 0 | \n
| \n Total USD | \n\n -183 | \n\n -332 | \n\n \n | \n\n \n | \n\n \n | \n\n -6 | \n\n 1 | \n\n 7 | \n
| \n Total | \n\n -196 | \n\n -352 | \n\n \n | \n\n \n | \n\n \n | \n\n -6 | \n\n 1 | \n\n 7 | \n
(1)Long/(short) positions.
(2)In compliance with Group Treasury Policy the percentage of hedged exposure will reach the progressive minimum compliance level of 60% in 2024.
(3)The hedging instruments are in the line item: \"Other Receivables\" and \"Other Liabilities\" in the statement of financial position.
| \n In \u20ac million | \n\n December 31, 2023 | \n|||||||
|---|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument(1) | \n\n Notional amount of the risk exposure(1) | \n\n Percentage of exposure hedged | \n\n \n | \n\n Average hedge exchange rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Equity | \n\n Assets | \n\n Liabilities | \n||||||
| \n Cash flow hedges - Forecasted sales and purchases(3) | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n||
| \n JPY/EUR | \n\n -1 | \n\n -1 | \n\n 50% | \n\n (2) | \n\n 126.94 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n JPY/USD | \n\n 0 | \n\n -3 | \n\n 4% | \n\n (4) | \n\n 145.33 | \n\n 1 | \n\n 1 | \n\n 0 | \n
| \n Total JPY | \n\n -1 | \n\n -4 | \n\n \n | \n\n \n | \n\n \n | \n\n 1 | \n\n 1 | \n\n 0 | \n
| \n USD/BRL | \n\n -63 | \n\n -106 | \n\n 60% | \n\n (2) | \n\n 4.78 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n USD/CNY | \n\n -68 | \n\n -138 | \n\n 49% | \n\n (2) | \n\n 6.92 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n USD/EUR | \n\n -24 | \n\n -37 | \n\n 66% | \n\n (2) | \n\n 1.13 | \n\n 2 | \n\n 1 | \n\n 1 | \n
| \n USD/MXN | \n\n -11 | \n\n -23 | \n\n 48% | \n\n (2) | \n\n 18.32 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n USD/THB | \n\n -17 | \n\n -39 | \n\n 44% | \n\n (2) | \n\n 33.75 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total USD | \n\n -184 | \n\n -342 | \n\n \n | \n\n \n | \n\n \n | \n\n 3 | \n\n 2 | \n\n 1 | \n
| \n Total | \n\n -185 | \n\n -346 | \n\n \n | \n\n \n | \n\n \n | \n\n 4 | \n\n 2 | \n\n 1 | \n
(1)Long/(short) positions.
(2)In compliance with Group Treasury Policy the percentage of hedged exposure will reach the progressive minimum compliance level of 60% in 2023.
(3)The hedging instruments are recorded in the line item: \"Other Receivables\" and \"Other Liabilities\" in the statement of financial position.
(4)In compliance with Group Treasury Policy the hedging will be stopped in 2024 due to the low materiality exposure.
Hedge relationships are seldom perfect. Therefore, ineffectiveness could arise with the result that changes in the fair value or cash flows of the hedged item that are attributable to a hedged risk and the hedging instrument do not offset within a period. The sources of hedge ineffectiveness that could potentially affect the hedging relationship during its term are listed below:
hA reduction in the amount of the forecast sales resulting in quantity or notional amount differences \u2013 the hedged item and hedging instrument are based on different quantities or notional amounts.
hA significant change in the credit risk of parties.
Timing differences \u2013 the hedged item and hedging instrument occur or are settled at different dates.
In 2024, no hedge ineffectiveness was recognized in the consolidated income statement.
See the Financial risk in the Management of risks section of this annual report for additional information on the interest rate risks management.
hInterest rate risk is managed at Group level.
hThe Group is exposed to interest rate risk because entities in the Group borrow funds at both fixed and floating interest rates. Interest rate risk is managed at Group level by maintaining an appropriate mix between fixed and floating rate borrowings.
Interest rate exposure by currency is summarized below:
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|---|
| \n Currency | \n\n Fixed rate | \n\n Floating rate | \n\n Total | \n\n Fixed rate | \n\n Floating rate | \n\n Total | \n
| \n Financial debt | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n EUR | \n\n -1,721 | \n\n -216 | \n\n -1,937 | \n\n -164 | \n\n -1,840 | \n\n -2,003 | \n
| \n USD | \n\n -146 | \n\n 0 | \n\n -146 | \n\n -137 | \n\n -2 | \n\n -139 | \n
| \n BGN | \n\n -1 | \n\n -21 | \n\n -22 | \n\n -1 | \n\n -1 | \n\n -2 | \n
| \n GBP | \n\n -8 | \n\n 0 | \n\n -8 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n KRW | \n\n -1 | \n\n -3 | \n\n -4 | \n\n -2 | \n\n -10 | \n\n -12 | \n
| \n THB | \n\n -8 | \n\n 0 | \n\n -9 | \n\n -9 | \n\n 0 | \n\n -10 | \n
| \n BRL | \n\n -5 | \n\n -2 | \n\n -7 | \n\n -8 | \n\n -2 | \n\n -10 | \n
| \n Other | \n\n -5 | \n\n -1 | \n\n -5 | \n\n -13 | \n\n -3 | \n\n -16 | \n
| \n Total | \n\n -1,895 | \n\n -243 | \n\n -2,138 | \n\n -333 | \n\n -1,859 | \n\n -2,192 | \n
| \n Cash and cash equivalents | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n EUR | \n\n \n | \n\n 271 | \n\n 271 | \n\n \n | \n\n 297 | \n\n 297 | \n
| \n USD | \n\n \n | \n\n 68 | \n\n 68 | \n\n \n | \n\n 138 | \n\n 138 | \n
| \n CAD | \n\n \n | \n\n 0 | \n\n 0 | \n\n \n | \n\n 2 | \n\n 2 | \n
| \n THB | \n\n \n | \n\n 30 | \n\n 30 | \n\n \n | \n\n 22 | \n\n 22 | \n
| \n SAR | \n\n \n | \n\n 5 | \n\n 5 | \n\n \n | \n\n 8 | \n\n 8 | \n
| \n BRL | \n\n \n | \n\n 74 | \n\n 74 | \n\n \n | \n\n 65 | \n\n 65 | \n
| \n CNY | \n\n \n | \n\n 23 | \n\n 23 | \n\n \n | \n\n 16 | \n\n 16 | \n
| \n KRW | \n\n \n | \n\n 6 | \n\n 6 | \n\n \n | \n\n 6 | \n\n 6 | \n
| \n JPY | \n\n \n | \n\n 4 | \n\n 4 | \n\n \n | \n\n 10 | \n\n 10 | \n
| \n Other | \n\n \n | \n\n 57 | \n\n 57 | \n\n \n | \n\n 20 | \n\n 20 | \n
| \n Total | \n\n \n | \n\n 539 | \n\n 539 | \n\n \n | \n\n 584 | \n\n 584 | \n
| \n Other financial instruments | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CNY | \n\n \n | \n\n 4 | \n\n 4 | \n\n \n | \n\n 12 | \n\n 12 | \n
| \n EUR | \n\n \n | \n\n 7 | \n\n 7 | \n\n \n | \n\n 65 | \n\n 65 | \n
| \n SAR | \n\n \n | \n\n 4 | \n\n 4 | \n\n \n | \n\n 4 | \n\n 4 | \n
| \n Other | \n\n \n | \n\n 1 | \n\n 1 | \n\n \n | \n\n 38 | \n\n 38 | \n
| \n Total | \n\n \n | \n\n 16 | \n\n 16 | \n\n \n | \n\n 118 | \n\n 118 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Total | \n\n -1,895 | \n\n 312 | \n\n -1,583 | \n\n -333 | \n\n -1,156 | \n\n -1,489 | \n
At the end of 2024, \u20ac1,865 million of the Group\u2019s gross debt was at fixed-rate, and is largely comprised of:
hTwo senior bonds issued in April 2024 for a total of \u20ac1,500 million maturing in 2028 and 2031 (carrying amount of \u20ac1,492 million);
hIFRS 16 lease liability for a total of \u20ac306 million (carrying amount of \u20ac306 million).
The floating-rate debt is mainly comprised of a term loan for an amount of \u20ac200 million maturing in 2026 which is subject to interest rate hedging via interest rate swaps reducing the volatility to interest rate fluctuations (discussed below).
The impact of interest rate volatility at the end of 2024 compared to 2023 is the following:
| \n In \u20ac million | \n\n Sensitivity to a + 100bp movement in EUR market interest rates | \n\n Sensitivity to a - 100bp movement in EUR market interest rates | \n||
|---|---|---|---|---|
| \n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n|
| \n Profit or loss | \n\n 0 | \n\n -7 | \n\n 0 | \n\n 6 | \n
The sensitivity to interest rates volatility on the floating gross financial debt remains insignificant at the end of 2024 compared to 2023 thanks to the interest rates hedging. Most of the sensitivity disclosed in 2023 corresponds to the remaining volatility between the maximum interest rate payable (cap strike rate) and the minimum rate (floor strike rate) following the hedging of the bridge facility (\u20ac1,500 million) via zero cost interest collar.
Effects of IBOR market developments
All the new Liquidity Facilities (RCF, Bilateral lines) have been negotiated using only SOFR reference index and not IBOR anymore. This will not have any impact financially.
The ISDA's agreements were as well amended to include the SOFR.
All the other old agreements (before June 2023) still reflect IBOR on the agreements. Banks in that case will apply market standard approach and use the new SOFR reference rate for those agreements, therefore will not have an impact on our financial charges nor relations.
Interest rate risk hedged by instrument accounted for as held for trading
In 2024 and 2023, there are no outstanding interest rate instruments accounted for as held for trading.
Interest rate risk hedged by instrument accounted for as a hedging instrument in a cash flow hedge
In comparison to 2023, the remaining interest rate hedging is the hedge executed on the \u20ac200 million floating term loan.
All the other hedging relationships were settled following the repayment of the \u20ac1,500 million bridge facility drawdown and the issuance of the senior bonds totaling \u20ac1,500 million.
| \n Cash flow hedges on floating interests rates | \n\n December 31, 2024 | \n||||||
|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument | \n\n Notional amount of the risk exposure | \n\n Percentage of exposure hedged | \n\n Hedge interest rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Assets | \n\n Liabilities | \n||||||
| \n Floating rate debt (Euribor6M) | \n\n 200 | \n\n 200 | \n\n 100% | \n\n 3.52% | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n 1.99% | \n\n 0 | \n\n 0 | \n\n 0 | \n
As of December 31, 2024, the cash-flow hedge reserve for interest rate risk also includes an amount of \u20ac 31 million related to the unwound Flexiswap hedge instruments and is recycled to profit or loss over the duration of the two bonds. On the Statement of Financial Position, the Flexiswap hedging instruments were replaced by two new instruments classified as financial debt, presented within \"Other borrowings from third parties\" in Note F33.
| \n Cash flow hedges on floating interests rates | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument | \n\n Notional amount of the risk exposure | \n\n Percentage of exposure hedged | \n\n Hedge interest rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Assets | \n\n Liabilities | \n||||||
| \n Floating rate debt (Euribor6M) | \n\n 200 | \n\n 200 | \n\n 100% | \n\n 3.52% | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n Floating rate debt (Euribor1M) | \n\n 1,500 | \n\n 1,500 | \n\n 100% | \n\n 3.55% | \n\n -1 | \n\n 0 | \n\n -1 | \n
| \n Future long-term refinancing (Euribor6M) | \n\n 750 | \n\n 750 | \n\n 100% | \n\n 3,20% + Fixed Margin | \n\n -25 | \n\n 0 | \n\n -25 | \n
| \n Future long-term refinancing (Euribor6M) | \n\n 750 | \n\n 750 | \n\n 100% | \n\n 3,05% + Fixed Margin | \n\n -33 | \n\n 0 | \n\n -33 | \n
Utility and CO2 price risks
The Group purchases a large portion of its coal, gas and electricity needs in Europe and the United States based on fluctuating liquid market indices. Moreover, the Group purchases raw materials with a price formula referring to market indices. In order to reduce the cost volatility, the Group has developed a policy for exchanging variable price against fixed price through derivative financial instruments. Most of these hedging instruments can be documented as hedging instruments of the underlying purchase contracts. Utility purchase contracts at fixed price with a physical delivery for use in the Group's operations are qualified as own use contracts and constitute a natural hedge. Those have not been included in this note.
Financial hedging of utility and CO2 emission rights price risks is managed centrally by Energy Services on behalf of the Group entities.
Energy Services also carries out trading transactions with respect to utility and CO2.
The following tables detail the notional principal amounts and fair values of utility and CO2 derivative financial instruments outstanding at the end of the reporting period:
| \n Held for trading | \n\n Notional amount of the instrument(1) | \n\n Notional amount of the instrument (in units) | \n\n Fair value of the instrument - Asset | \n\n Fair value of the instrument - Liability | \n|||||
|---|---|---|---|---|---|---|---|---|---|
| \n December 31 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n \n | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n
| \n In \u20ac million (except where indicated) | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Power | \n\n \n | \n\n 22 | \n\n \n | \n\n 118,090 | \n\n MWh | \n\n 0 | \n\n 0 | \n\n 0 | \n\n -13 | \n
| \n Standard Quality Gas | \n\n 1 | \n\n 21 | \n\n 10,220 | \n\n 811,174 | \n\n MWh | \n\n 1 | \n\n 0 | \n\n -1 | \n\n 0 | \n
| \n CO2 | \n\n 9 | \n\n 9 | \n\n 360,250 | \n\n 394,500 | \n\n Tons | \n\n 0 | \n\n 0 | \n\n -18 | \n\n -26 | \n
| \n Total | \n\n 10 | \n\n 52 | \n\n \n | \n\n \n | \n\n \n | \n\n 1 | \n\n 0 | \n\n -19 | \n\n -39 | \n
(1)The hedging instruments are located in the line item: \"Other Receivables\" and \"Other Liabilities\" in the consolidated statement of financial position.
The amounts presented in the tables hereafter include hedging needs of the GBUs of the Group that are sourced through Energy Services, and not the full Group utility hedging needs.
| \n \n | \n\n December 31, 2024 | \n|||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| \n Cash flow hedge | \n\n Notional amount of the instrument(1) | \n\n Notional amount of\u00a0the instrument (in units) | \n\n \n | \n\n Notional amount of the risk exposure | \n\n Notional amount of the risk exposure (in units) | \n\n \n | \n\n Percentage of exposure hedged | \n\n Average hedge price per\u00a0risk category | \n\n \n | \n\n Cash flow hedge reserve | \n\n Fair value of the instrument - Asset | \n\n Fair value of the instrument - Liability | \n
| \n In \u20ac million | \n||||||||||||
| \n Power | \n\n 224 | \n\n 2,205,840 | \n\n MWh | \n\n 417 | \n\n 3,772,347 | \n\n MWh | \n\n 58% | \n\n 102 | \n\n EUR/MWh | \n\n -29 | \n\n 0 | \n\n -29 | \n
| \n Standard Quality Gas | \n\n 361 | \n\n 13,463,715 | \n\n MWh | \n\n 1,056 | \n\n 26,558,004 | \n\n MWh | \n\n 51% | \n\n 22 | \n\n EUR/MWh | \n\n 35 | \n\n 53 | \n\n -18 | \n
| \n CO2(2) | \n\n 341 | \n\n 4,292,750 | \n\n Tons | \n\n 872 | \n\n 10,616,000 | \n\n Tons | \n\n 40% | \n\n 75 | \n\n EUR/Tons | \n\n -9 | \n\n 23 | \n\n -32 | \n
| \n Total | \n\n 926 | \n\n \n | \n\n \n | \n\n 2,345 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n -3 | \n\n 76 | \n\n -79 | \n
(1)The hedging instruments are in the line item: \"Other Receivables\" and \"Other Liabilities\" in the consolidated statement of financial position.
(2)Excluding the reserve frozen in OCI, following roll-over transactions (\u20ac(44) million).
| \n Cash flow hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| \n In \u20ac million | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Power | \n\n 112 | \n\n 781,326 | \n\n MWh | \n\n 181 | \n\n 1,763,316 | \n\n MWh | \n\n 44% | \n\n 142 | \n\n EUR/MWh | \n\n 30 | \n\n 33 | \n\n -3 | \n
| \n Standard Quality Gas | \n\n 245 | \n\n 12,343,602 | \n\n MWh | \n\n 579 | \n\n 24,542,118 | \n\n MWh | \n\n 50% | \n\n 27 | \n\n EUR/MWh | \n\n -41 | \n\n 15 | \n\n -56 | \n
| \n CO2(2) | \n\n 553 | \n\n 3,469,500 | \n\n Tons | \n\n 801 | \n\n 9,230,909 | \n\n Tons | \n\n 38% | \n\n 87 | \n\n EUR/Tons | \n\n -43 | \n\n 0 | \n\n -44 | \n
| \n Total | \n\n 910 | \n\n \n | \n\n \n | \n\n 1,561 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n -54 | \n\n 48 | \n\n -102 | \n
(1)The hedging instruments are located in the line item: \"Other Receivables\" and \"Other Liabilities\" in the consolidated statement of financial position.
(2)Excluding the reserve frozen in OCI, following roll-over transactions (\u20ac(33) million).
In 2024, the group changed its hedge relationship on CO2 emission rights price risk which resulted in the discontinuance of hedging cash flow hedge relationship at the end of December 2024. The related loss of \u20ac(38) million was recognized in other operating gains and losses in the consolidated income statement.
Fair value hedge
The Group covered a part of its CO2 emission rights in inventory by forward sales of CO2 emission rights to a related party. The Group qualifies this hedging strategy as fair value hedge. The change in fair value of forward sales is accounted for in profit and loss, concomitantly with the revaluation of the CO2 emission rights held in\u00a0inventory.
The Group has established a 1:1 hedge ratio for the underlying risk of the forward sales of CO2 emission rights to the related party that is identical to the hedged risk component.
The impact of the hedging instrument on the statement of financial position as at December 31, 2024, is as follows:
| \n \n | \n\n December 31, 2024 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n \n | \n\n -1 | \n\n Financial Instrument | \n\n \n | \n\n 0 | \n
| \n \n | \n\n December 31, 2024 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n 2 | \n\n \n | \n\n Inventories | \n\n 0 | \n\n \n | \n
| \n \n | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n \n | \n\n -2 | \n\n Financial Instrument | \n\n 1 | \n\n -1 | \n
| \n \n | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n \n | \n\n 2 | \n\n Inventories | \n\n 1 | \n\n \n | \n
The sensitivities of commodity derivative financial instruments as of December 31, 2024, are presented below.
The sensitivities were defined based on the price levels and volatility levels of each commodity. These assumptions do not constitute an estimation of future market prices, and the sensitivities presented are not representative of future changes in Solvay's equity and results.
| \n In \u20acmillion | \n\n December 31, 2024 | \n||
|---|---|---|---|
| \n Price change | \n\n Other comprehensive income | \n\n Profit or loss | \n|
| \n Natural gas | \n\n +10\u20ac /MWh | \n\n -102 | \n\n 0 | \n
| \n Natural gas | \n\n -10\u20ac /MWh | \n\n 102 | \n\n 0 | \n
| \n Electricity | \n\n +30\u20ac /MWh | \n\n 66 | \n\n 0 | \n
| \n Electricity | \n\n -30\u20ac /MWh | \n\n -66 | \n\n 0 | \n
| \n CO2 emission rights | \n\n +5\u20ac /T | \n\n -21 | \n\n -2 | \n
| \n CO2 emission rights | \n\n -5\u20ac /T | \n\n 21 | \n\n 2 | \n
Performance Share Units Plan (PSU) and Restricted Share Units (RSU) risk on Solvay and Syensqo share price
The last cash settled PSU plan (granted in 2021) vested on 31/12/2023 and was paid out in June 2024. The PSU/RSU plans granted as from 2022 are equity settled. The RSU plan 2022 will deliver Solvay and Syensqo shares. The PSU/RSU plans 2023 and 2024 will deliver Solvay shares only. These PSU/RSU plans are hedged with treasury shares. However, in order to neutralize the volatility of the Syensqo share price, which will impact the liability valuation relating to the RSU plan 2022, the Group has entered into a hedge (equity forward transaction) covering 100% of the risk.
See the Financial risk in the Management of risks section of this annual report for additional information on credit risk management.
The Group continuously monitors the credit risk of important business partners.
The Group engages in transactions only with financial institutions with a good credit rating. The Group monitors and manages exposures to financial institutions within approved counterparty credit limits and credit risk parameters in order to mitigate the risk of default. For financial guarantees, see note F36 Contingent liabilities and financial guarantees.
The Group recognizes expected credit losses on all of its trade receivables: it applies the simplified approach and recognizes lifetime expected losses on all trade receivables, using a provision matrix in order to calculate the lifetime expected credit losses for trade receivables, using historical information on defaults adjusted for the forward-looking information.
The Group classifies the customers and their related receivables in various rating classes, based on the risks\u2019 grading attributed to the customers and on the aging balance of receivables. As such, for all receivables overdue below six months, the Group considers percentages within a range between 0.005% and 4.031%, depending on the rating class. For all receivables overdue in excess of six months, the Group considers a rate of 50% or of 100%, depending on the rating class. The customer\u2019s grading is reviewed annually for customers assessed as low risk profile, and every six months for customers assessed as higher risk profile.
There is no significant concentration of credit risk at Group level because the receivables\u2019 credit risk is spread over a large number of customers and markets.
The aging of trade receivables, financial instruments \u2013 operational, loans and other non-current assets is as follows:
| \n December 31, 2024 | \n\n With expected loss allowance, not credit-impaired | \n||||||
|---|---|---|---|---|---|---|---|
| \n In \u20ac million | \n\n Total | \n\n Credit-impaired | \n\n not past due | \n\n less than 30 days past due | \n\n between 30 and 60 days past due | \n\n between 60 and 90 days past due | \n\n more than 90 days past due | \n
| \n Trade receivables | \n\n 850 | \n\n 22 | \n\n 804 | \n\n 18 | \n\n 1 | \n\n 2 | \n\n 2 | \n
| \n Trade receivables - allowance | \n\n -23 | \n\n -20 | \n\n -1 | \n\n \n | \n\n \n | \n\n \n | \n\n -2 | \n
| \n Trade receivables - net | \n\n 826 | \n\n 2 | \n\n 803 | \n\n 18 | \n\n 1 | \n\n 2 | \n\n 0 | \n
| \n Financial instruments - operational | \n\n 80 | \n\n \n | \n\n 80 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets(1) | \n\n 116 | \n\n 4 | \n\n 111 | \n\n 0 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - allowance | \n\n -4 | \n\n -4 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - net(1) | \n\n 112 | \n\n 0 | \n\n 111 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total | \n\n 1,018 | \n\n 3 | \n\n 994 | \n\n 18 | \n\n 1 | \n\n 2 | \n\n 0 | \n
(1)Loans and other non-current assets do not include pension fund surplus and CO2 -term inventory.
| \n December 31, 2023 | \n\n With expected loss allowance, not credit-impaired | \n||||||
|---|---|---|---|---|---|---|---|
| \n In \u20ac million | \n\n Total | \n\n Credit-impaired | \n\n not past due | \n\n less than 30 days past due | \n\n between 30 and 60 days past due | \n\n between 60 and 90 days past due | \n\n more than 90 days past due | \n
| \n Trade receivables | \n\n 894 | \n\n 55 | \n\n 802 | \n\n 28 | \n\n 1 | \n\n 6 | \n\n 3 | \n
| \n Trade receivables - allowance | \n\n -54 | \n\n -53 | \n\n -1 | \n\n \n | \n\n \n | \n\n \n | \n\n -1 | \n
| \n Trade receivables - net | \n\n 840 | \n\n 3 | \n\n 801 | \n\n 28 | \n\n 1 | \n\n 6 | \n\n 2 | \n
| \n Financial instruments - operational | \n\n 66 | \n\n \n | \n\n 66 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets(1) | \n\n 140 | \n\n 4 | \n\n 135 | \n\n 0 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - allowance | \n\n -4 | \n\n -4 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - net(1) | \n\n 136 | \n\n 0 | \n\n 135 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total | \n\n 1,042 | \n\n 3 | \n\n 1,002 | \n\n 28 | \n\n 1 | \n\n 6 | \n\n 2 | \n
(1) Loans and other non-current assets do not include pension fund surplus and CO2 emission rights inventory.
The table below presents the allowances on trade receivables:
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n January 1 | \n\n -54 | \n\n -72 | \n
| \n Additions | \n\n -3 | \n\n -11 | \n
| \n Uses | \n\n 12 | \n\n 5 | \n
| \n Reversal | \n\n 15 | \n\n 9 | \n
| \n Currency translation differences | \n\n 2 | \n\n -1 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n
| \n Partial Demerger | \n\n \n | \n\n 14 | \n
| \n Other | \n\n 5 | \n\n 0 | \n
| \n December 31 | \n\n -23 | \n\n -54 | \n
See the Financial risk in the Management of risks section of this annual report for additional information on the liquidity risk management.
Liquidity risk relates to Solvay\u2019s ability to service and refinance its debt (including notes issued) and to fund its operations.
This depends on its ability to generate cash from operations and not to overpay for acquisitions. In addition, external factors impacting the global liquidity markets could also make financing sources less accessible.
The Finance Committee gives its opinion on the appropriate liquidity risk management for the Group\u2019s short-, medium-, and long-term funding and liquidity management requirements.
The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecasts and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
The Group staggers the maturities of its financing sources over time in order to limit amounts to be refinanced each year.
The following tables detail the Group\u2019s remaining contractual maturity for its financial liabilities with contractual repayment periods.
The tables have been prepared using the discounted cash flows of financial liabilities, based on the earliest date on which the Group can be required to pay.
The following tables present discounted amounts (carrying amounts):
| \n In \u20ac million | \n\n December 31, 2024 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 809 | \n\n 809 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 107 | \n\n 107 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 111 | \n\n 98 | \n\n 13 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 21 | \n\n \n | \n\n 5 | \n\n 5 | \n\n 11 | \n
| \n Financial debt | \n\n 1,831 | \n\n 84 | \n\n 217 | \n\n 777 | \n\n 753 | \n
| \n Leasing debt | \n\n 306 | \n\n 70 | \n\n 36 | \n\n 92 | \n\n 108 | \n
| \n Total | \n\n 3,186 | \n\n 1,169 | \n\n 271 | \n\n 874 | \n\n 872 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 850 | \n\n 850 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 175 | \n\n 175 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 140 | \n\n 108 | \n\n 32 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 34 | \n\n \n | \n\n 12 | \n\n 2 | \n\n 20 | \n
| \n Financial debt | \n\n 1,885 | \n\n 148 | \n\n 1,711 | \n\n 23 | \n\n 3 | \n
| \n Leasing debt | \n\n 307 | \n\n 63 | \n\n 44 | \n\n 92 | \n\n 107 | \n
| \n Total | \n\n 3,390 | \n\n 1,344 | \n\n 1,799 | \n\n 117 | \n\n 130 | \n
The following tables present undiscounted amounts (nominal value):
| \n In \u20ac million | \n\n December 31, 2024 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 809 | \n\n 809 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 107 | \n\n 107 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 111 | \n\n 98 | \n\n 13 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 21 | \n\n \n | \n\n 5 | \n\n 5 | \n\n 11 | \n
| \n Financial debt | \n\n 1,842 | \n\n 84 | \n\n 219 | \n\n 781 | \n\n 757 | \n
| \n Leasing debt | \n\n 306 | \n\n 70 | \n\n 36 | \n\n 92 | \n\n 108 | \n
| \n Total | \n\n 3,196 | \n\n 1,169 | \n\n 273 | \n\n 878 | \n\n 876 | \n
| \n Interests on financial debt and lease liabilities | \n\n 412 | \n\n 75 | \n\n 71 | \n\n 174 | \n\n 91 | \n
| \n Total outflows of cash | \n\n 3,608 | \n\n 1,244 | \n\n 345 | \n\n 1,052 | \n\n 967 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 850 | \n\n 850 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 175 | \n\n 175 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 140 | \n\n 108 | \n\n 32 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 34 | \n\n \n | \n\n 12 | \n\n 2 | \n\n 20 | \n
| \n Financial debt | \n\n 1,886 | \n\n 148 | \n\n 1,711 | \n\n 23 | \n\n 4 | \n
| \n Leasing debt | \n\n 307 | \n\n 63 | \n\n 44 | \n\n 92 | \n\n 107 | \n
| \n Total | \n\n 3,391 | \n\n 1,344 | \n\n 1,799 | \n\n 117 | \n\n 131 | \n
| \n Interests on financial debt and lease liabilities | \n\n 179 | \n\n 82 | \n\n 61 | \n\n 17 | \n\n 19 | \n
| \n Total outflows of cash | \n\n 3,570 | \n\n 1,426 | \n\n 1,860 | \n\n 134 | \n\n 150 | \n
Solvay\u2019s liquidity amounts to \u20ac2.0 billion including \u20ac0.6 billion of cash and cash equivalents on the statement of financial position and \u20ac1.4 billion of committed fully undrawn credit facilities (\u20ac1.1 billion multilateral RCF maturing in 2029 with extension possibility, and \u20ac0.3 billion bilateral RCF maturing in 2027 with extension possibilities) unused at the end of December 2024.
In addition, Solvay has access to a Belgian Treasury Bill program for \u20ac1.0 billion (no outstanding balance on December 31, 2024). The program is covered by a back-up credit line.
See below (section F32.E) for further details on supplier financing programs within trade payables.
fAccounting policy
General
The Group classifies financial liabilities that arise from supplier finance arrangements within Trade and other payables in the statement of financial position if they have a similar nature and function to trade payables. This is the case if the supplier finance arrangement is part of the working capital used in the Group\u2019s normal operating cycle, the level of security provided is similar to trade payables and the terms of the liabilities that are part of the supply chain finance arrangement are not substantially different from the terms of trade payables that are not part of the arrangement. Cash flows related to liabilities arising from supplier finance arrangements that are classified in Trade and other payables in the consolidated statement of financial position are included in operating activities in the consolidated statement of cash flows.
First application in 2024
This disclosure requirement was introduced by the Amendments Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7), published in May 2023 by the IASB. The amendments are effective for periods beginning on or after 1 January 2024. In the year of initial application, the requirements only apply to the annual financial report and the disclosure does not need to provide the comparative figures.
Terms and conditions
The Group has established a supplier finance arrangement that is offered to some of the Group\u2019s key suppliers. Participation in the arrangement is at the suppliers\u2019 own discretion. Suppliers that participate in the supplier finance arrangement will receive early payment on invoices sent to the Group from the Group\u2019s external finance provider. If suppliers choose to receive early payment, they pay a fee to the finance provider, to which the Group is not a party. For the finance provider to pay the invoices, the goods must have been received or supplied and the invoices approved by the Group. Payments to suppliers ahead of the invoice due date are processed by the finance provider and, in all cases, the Group settles the original invoice by paying the finance provider in line with the original invoice maturity date described above.
The Group assesses each arrangement against indicators to determine if the liabilities which suppliers have sold to the partner bank under the supplier financing scheme continue to meet the definition of trade payables or should be classified as financial debt. On December 31, 2024 and 2023, all trade payables subject to the supplier finance arrangement meet the criteria of trade payables and are included in trade payables in the consolidated statement of financial position.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n\n January 1, 2023 | \n
|---|---|---|---|
| \n Carrying amount of financial liabilities | \n\n \n | \n\n \n | \n\n \n | \n
| \n Presented in trade and other payables | \n\n 62 | \n\n N/A | \n\n N/A | \n
| \n \u2022of which suppliers have received payment from finance provider | \n\n 47 | \n\n N/A | \n\n N/A | \n
| \n Range of payment due dates (days after the invoice date) | \n\n \n | \n\n \n | \n\n \n | \n
| \n Liabilities that are part of the arrangement | \n\n 102-106 days | \n\n N/A | \n\n N/A | \n
| \n Comparable trade payables that are not part of the arrangements | \n\n 45-49 days | \n\n N/A | \n\n N/A | \n
NOTE F33
Net indebtedness
The Group\u2019s net indebtedness is the balance between its financial debts and other financial instruments, and cash and cash equivalents.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Financial debt | \n\n 2,138 | \n\n 2,192 | \n
| \n Cash and cash equivalents | \n\n -539 | \n\n -584 | \n
| \n Other financial instruments | \n\n -16 | \n\n -118 | \n
| \n Net indebtedness | \n\n 1,583 | \n\n 1,489 | \n
The financial debt at the end of 2024 includes:
htwo senior bonds for a total of \u20ac1,500 million (\u20ac750 million maturing in 2028 and \u20ac750 million maturing in 2031);
ha term loan for an amount of \u20ac200 million;
hthe lease debt IFRS16 \u20ac306 million;
hother financial debt (\u20ac140 million, excluding lease debt) mainly in current financial debt.
Solvay is Investment Grade rating BBB-/A3 (stable outlook) by Standard & Poor\u2019s (as of December 4, 2024).
| \n In \u20ac million (except where indicated) | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|---|
| \n Nominal amount | \n\n Coupon | \n\n Maturity | \n\n Secured | \n\n Amount at amortized cost | \n\n Fair value | \n\n Amount at amortized cost | \n\n Fair value | \n|
| \n 2028 Bonds (issuance \u20ac 750 million) | \n\n 750 | \n\n 3.875% | \n\n 2028 | \n\n No | \n\n 746 | \n\n 766 | \n\n n/a | \n\n n/a | \n
| \n 2031 Bonds (issuance \u20ac 750 million) | \n\n 750 | \n\n 4.250% | \n\n 2031 | \n\n No | \n\n 746 | \n\n 774 | \n\n n/a | \n\n n/a | \n
| \n Total senior \u20ac notes | \n\n 1,500 | \n\n \n | \n\n \n | \n\n \n | \n\n 1,492 | \n\n 1,540 | \n\n 0 | \n\n 0 | \n
| \n Credit lines Drawdown (\u20ac 1,500 million) | \n\n \n | \n\n Floating rate | \n\n 2025 | \n\n No | \n\n 0 | \n\n 0 | \n\n 1,500 | \n\n 1,500 | \n
| \n Total Bridge facilities(1) | \n\n 0 | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n\n 0 | \n\n 1,500 | \n\n 1,500 | \n
| \n Term loan (\u20ac 200 million) | \n\n 200 | \n\n Floating rate | \n\n 2026 | \n\n \n | \n\n 200 | \n\n 200 | \n\n 200 | \n\n 200 | \n
| \n Other borrowings from third parties | \n\n 140 | \n\n \n | \n\n \n | \n\n \n | \n\n 140 | \n\n 140 | \n\n 185 | \n\n 185 | \n
| \n Lease debts IFRS16 | \n\n 306 | \n\n \n | \n\n \n | \n\n \n | \n\n 306 | \n\n 306 | \n\n 307 | \n\n 307 | \n
| \n Total | \n\n 2,146 | \n\n \n | \n\n \n | \n\n \n | \n\n 2,138 | \n\n 2,186 | \n\n 2,192 | \n\n 2,192 | \n
(1)In 2023, the outstanding Solvay bridge facility had an initial maturity in October 2024, but the company had an unconditional right to extend two times the maturity by 6 months, until October 2025. The bridge facility was therefore classified as non-current.
There are no instances of default on the above-mentioned financial debts. There are no financial covenants breach, neither on Solvay SA/NV, nor on any of the Group\u2019s holding companies.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Non-current other financial instruments | \n\n 0 | \n\n 0 | \n
| \n Current other financial instruments | \n\n 16 | \n\n 119 | \n
| \n Currency swaps | \n\n 1 | \n\n 2 | \n
| \n Other marketable securities > 3 months | \n\n 4 | \n\n 50 | \n
| \n Other current financial assets | \n\n 11 | \n\n 67 | \n
| \n Other financial instruments | \n\n 16 | \n\n 119 | \n
The other marketable securities >3 months include the bank drafts position.
In 2024, the decrease in other current financial assets is explained by the transfers of CO2 derivative financial instruments to the OTC market (previously traded in the exchange market). As a consequence, margin calls of Energy Services for instruments with a negative fair value that represented collateral for the obligations decreased.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Cash | \n\n 211 | \n\n 300 | \n
| \n Term deposits | \n\n 328 | \n\n 285 | \n
| \n Cash and cash equivalents | \n\n 539 | \n\n 584 | \n
By their nature, the carrying amount of cash and cash equivalents is equal to, or a very good proxy of, its fair value.
As at December 31, 2024 and December 31, 2023, cash and cash equivalents were not subject to statutory, regulatory, or contractual restrictions and there were no material limitations on the ability to transfer cash or cash-equivalents within the group.
| \n In \u20ac million | \n\n Dec 31, 2023 | \n\n 2024 | \n|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| \n Total | \n\n Cash flows from increase of borrowings | \n\n Cash flows from repayment of borrowings | \n\n Changes in foreign exchange rates | \n\n Changes in other current financial assets | \n\n Other in financing cash flows | \n\n Transfer from non-current to current | \n\n Payment of lease liabilities | \n\n Other | \n\n Partial Demerger | \n\n Total | \n|
| \n Bonds | \n\n - | \n\n 1,492 | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n 1,492 | \n
| \n Other non-current debts | \n\n 1,737 | \n\n - | \n\n -1,500 | \n\n 0 | \n\n - | \n\n - | \n\n -11 | \n\n - | \n\n 30 | \n\n 0 | \n\n 255 | \n
| \n Long-term finance lease debt | \n\n 243 | \n\n - | \n\n - | \n\n 7 | \n\n - | \n\n - | \n\n -70 | \n\n - | \n\n 55 | \n\n - | \n\n 236 | \n
| \n Interests rate swaps | \n\n 2 | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n 0 | \n\n - | \n\n 2 | \n
| \n Non-current financial debt | \n\n 1,983 | \n\n 1,492 | \n\n -1,500 | \n\n 7 | \n\n - | \n\n - | \n\n -81 | \n\n - | \n\n 85 | \n\n 0 | \n\n 1,985 | \n
| \n Current financial debt | \n\n 211 | \n\n 191 | \n\n -242 | \n\n 0 | \n\n - | \n\n - | \n\n 81 | \n\n -64 | \n\n -22 | \n\n 0 | \n\n 156 | \n
| \n Total financial debt | \n\n 2,192 | \n\n 1,683 | \n\n -1,742 | \n\n 7 | \n\n - | \n\n - | \n\n - | \n\n -64 | \n\n 63 | \n\n 0 | \n\n 2,138 | \n
| \n Other Non-current financial instruments | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n
| \n Currency swaps | \n\n -2 | \n\n - | \n\n - | \n\n 0 | \n\n - | \n\n - | \n\n - | \n\n - | \n\n 1 | \n\n - | \n\n -1 | \n
| \n Other marketable securities > 3 months | \n\n -50 | \n\n - | \n\n - | \n\n 0 | \n\n 9 | \n\n 38 | \n\n - | \n\n - | \n\n - | \n\n - | \n\n -4 | \n
| \n Other current financial assets | \n\n -67 | \n\n - | \n\n - | \n\n 0 | \n\n 49 | \n\n - | \n\n - | \n\n - | \n\n 7 | \n\n - | \n\n -11 | \n
| \n Other financial instruments | \n\n -119 | \n\n - | \n\n - | \n\n 0 | \n\n 58 | \n\n 38 | \n\n - | \n\n - | \n\n 8 | \n\n - | \n\n -16 | \n
| \n Total | \n\n \n | \n\n 1,683 | \n\n -1,742 | \n\n 7 | \n\n 58 | \n\n 38 | \n\n - | \n\n -64 | \n\n 70 | \n\n 0 | \n\n 50 | \n
The financial debt decreased from \u20ac2,192 million at the end of 2023 to \u20ac2,138 million at the end of 2024.
The non-current financial debt in 2024 is stable compared to 2023. It is explained by:
hthe increase of \u20ac1,584 million, which is mainly explained by:
\u2014the issuance of two senior bonds for a total of \u20ac1,492 million,
\u2014two new instruments classified as financial debt for \u20ac30 million (non-current portion) following the unwinding of flexi-swaps transacted in 2023,
\u2014the increase of the long-term lease (IFRS 16) debt for \u20ac50 million,
\u2014the change in foreign exchange rates for \u20ac7 million.
hthe decrease of \u20ac(1,581) million, which is mainly explained by:
\u2014the repayment of \u20ac(1,500) million bridge facility set up at the end of 2023 in relation to the Partial Demerger
\u2014the transfer to current financial debt for \u20ac(70) million mainly on lease liabilities
The current financial debt decreased by \u20ac(56) million, is mainly resulting from:
hthe increase in borrowings of \u20ac191 million mainly explained by the drawdowns on credit lines of \u20ac185 million
hthe decrease of \u20ac(264) million explained by the repayment of the drawdowns on credit lines for \u20ac(185) million, the repayment of a current loan payable for \u20ac(52)\u00a0million, and net impact of unwinding of flexi-swaps transacted in 2023 for \u20ac(22) million
hthe transfer from non-current financial debt for \u20ac81 million mainly on lease liabilities
hthe repayment of lease (IFRS 16) debts of \u20ac(64) million.
The following table gives an overview of the carrying amount of all financial instruments by category as defined by IFRS 9.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Carrying amount | \n\n Carrying amount | \n|
| \n Fair value through profit or loss | \n\n 59 | \n\n 105 | \n
| \n Held for trading (financial instruments - operational - see note F26) | \n\n 2 | \n\n 16 | \n
| \n Held for trading (other financial instruments - see note F33, table Changes in financial debt) | \n\n 1 | \n\n 2 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n 55 | \n\n 87 | \n
| \n Financial assets measured at amortized cost | \n\n 1,497 | \n\n 1,677 | \n
| \n Financial assets measured at amortized cost (including cash and cash equivalents, trade receivables, loans and other current/non-current assets except pension fund surpluses and long-term inventory balance) | \n\n 1,497 | \n\n 1,677 | \n
| \n Financial assets measured at fair value through other comprehensive income | \n\n 85 | \n\n 51 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship (see note F26) | \n\n 78 | \n\n 50 | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n 8 | \n\n 1 | \n
| \n Total financial assets | \n\n 1,642 | \n\n 1,833 | \n
| \n \n | \n\n \n | \n\n \n | \n
| \n Fair value through profit or loss | \n\n -27 | \n\n -37 | \n
| \n Held for trading (financial instruments - operational - see note F34) | \n\n -26 | \n\n -36 | \n
| \n Held for trading (financial debt - see note F33, table Changes in financial debt) | \n\n -2 | \n\n -1 | \n
| \n Financial liabilities measured at amortized cost | \n\n -2,766 | \n\n -2,887 | \n
| \n Financial liabilities measured at amortized cost (excluding dividends payable and IFRS 16 lease liabilities) | \n\n -2,659 | \n\n -2,712 | \n
| \n Dividends payables | \n\n -107 | \n\n -175 | \n
| \n Lease liabilities measured at amortized cost | \n\n -306 | \n\n -307 | \n
| \n Lease liabilities IFRS16 measured at amortized cost | \n\n -306 | \n\n -307 | \n
| \n Financial liabilities measured at fair value through other comprehensive income | \n\n -88 | \n\n -165 | \n
| \n Derivative financial instruments designated in a cash flow hedge relationship (see note F34) | \n\n -88 | \n\n -165 | \n
| \n Total financial and lease liabilities | \n\n -3,187 | \n\n -3,395 | \n
The category \u201cHeld for trading\u201d contains derivative financial instruments that are used for management of foreign currency risk, utility and CO2 emission rights price risks, index and shares. Contracts which have been documented as hedging instruments (hedge accounting under IFRS 9 Financial Instruments) or which meet the exemption criteria for own use are not included in the category \u201cHeld for trading.\u201d
At the end of 2024, \u20ac55 million of instruments at fair value through profit or loss relate to equity instruments related to Syensqo Group.
Held for trading
The transactional risk is managed either by spot or forward contracts. Unless documented as hedging instruments (see above), derivative financial instruments are classified as held for trading.
In 2024, the notional amounts transacted to manage the transactional risk are:
ha long position of \u20ac368 million (compared to \u20ac271 million in 2023);
ha short position of \u20ac(239) million (compared to \u20ac(284) million in 2023);
hin comparison to 2023, the optimization of the cash centralization model led to a net long position increase of \u20ac142 million (mainly Chinese Yuan and US Dollar).
The following table details the notional amounts of the Group\u2019s derivatives contracts outstanding at the end of the period:
| \n In \u20ac million | \n\n Notional amount(1) | \n\n Fair value assets | \n\n Fair value liabilities | \n|||
|---|---|---|---|---|---|---|
| \n December 31 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n
| \n Held for trading long position | \n\n 368 | \n\n 271 | \n\n 1 | \n\n 1 | \n\n -1 | \n\n -1 | \n
| \n Held for trading short position | \n\n -239 | \n\n -284 | \n\n 1 | \n\n 2 | \n\n -3 | \n\n 0 | \n
| \n Total | \n\n 129 | \n\n -13 | \n\n 2 | \n\n 3 | \n\n -4 | \n\n -1 | \n
(1)Long/(short) positions (if the foreign exchange transaction does not involve the functional currency, both notional amounts are considered).
NOTE F34
Other liabilities (current)
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Wages and benefits debts | \n\n 123 | \n\n 125 | \n
| \n VAT and other taxes | \n\n 105 | \n\n 107 | \n
| \n Social security | \n\n 18 | \n\n 29 | \n
| \n Financial instruments - operational | \n\n 98 | \n\n 108 | \n
| \n Insurance premiums | \n\n 14 | \n\n 31 | \n
| \n Advances from customers | \n\n 21 | \n\n 30 | \n
| \n Long Term Incentive - current part | \n\n 17 | \n\n 31 | \n
| \n Other | \n\n 61 | \n\n 126 | \n
| \n Other current liabilities | \n\n 458 | \n\n 585 | \n
The decrease in \u201cOther\u201d when compared to 2023 is primarily related to the Insurance reimbursement of \u20ac32 million (payable to Syensqo) which was outstanding at December 31, 2023 (see note F25 Other receivables) and paid in 2024.
Financial instruments \u2013 operational include held for trading and cash flow hedge derivatives (see note F32 Overview of financial instruments).
Valuation techniques and assumptions used for measuring fair value.
fAccounting policy
Quoted market prices are available for financial assets and financial liabilities with standard terms and conditions that are traded on active markets. The fair values of derivative financial instruments are equal to their quoted prices, if available. In case such quoted prices are not available, the fair value of the financial instruments is determined based on a discounted cash flow analysis using the applicable yield curve derived from quoted interest rates matching maturities of the contracts for non-optional derivatives. Optional derivatives are fair valued based on option pricing models, taking into account the present value of probability weighted expected future payoffs, using market reference formulas.
The fair values of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||
|---|---|---|---|---|
| \n Carrying amount | \n\n Fair value | \n\n Carrying amount | \n\n Fair value | \n|
| \n Non-current assets - Financial instruments | \n\n 118 | \n\n 118 | \n\n 136 | \n\n 136 | \n
| \n Loans and other non-current assets (except pension fund surpluses and long-term inventory balance) | \n\n 118 | \n\n 118 | \n\n 136 | \n\n 136 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Non-current liabilities - Financial instruments | \n\n -1,766 | \n\n -1,814 | \n\n -1,774 | \n\n -1,774 | \n
| \n Bonds | \n\n -1,492 | \n\n -1,540 | \n\n 0 | \n\n 0 | \n
| \n Other non-current debts | \n\n -253 | \n\n -253 | \n\n -1,735 | \n\n -1,735 | \n
| \n Other liabilities | \n\n -21 | \n\n -21 | \n\n -39 | \n\n -39 | \n
The carrying amounts of current financial assets and liabilities are estimated to reasonably approximate their fair values, due to the short term to maturity.
The table \u201cFinancial instruments measured at fair value in the consolidated statement of financial position\u201d provides an analysis of financial instruments that, after their initial recognition, are measured at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable. Financial instruments classified as held for trading and as hedging instruments in cash flow hedges are mainly grouped into Levels 1 and 2. They are fair valued based on forward pricing and swap models using present value calculations. The models incorporate various inputs including foreign exchange spot and interest rates of the respective currencies, currency basis spreads between the respective currencies, interest rate curves and forward rate curves of the underlying commodity. The equity instruments measured at fair value through OCI and through profit and loss are presented within Level 1 and 3. The fair value of the instruments presented under Level 3 is measured based on the guidelines recommended by The International Private Equity and Venture Capital Valuation (IPEV).
In accordance with the Group internal rules, the responsibility for measuring the fair value level resides with (a) the Treasury department for the non-utility derivative financial instruments, and the non-derivative financial liabilities, (b) the Sustainable Development and Energy department for the utility derivative financial instruments and (c) the Finance department for non-derivative financial assets.
The Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. During the year, no such transfers have occurred.
| \n In \u20ac million | \n\n December 31, 2024 | \n|||
|---|---|---|---|---|
| \n Level 1 | \n\n Level 2 | \n\n Level 3 | \n\n Total | \n|
| \n Held for trading | \n\n 0 | \n\n 4 | \n\n 0 | \n\n 4 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Shares | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022Index | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n 55 | \n\n \n | \n\n 0 | \n\n 55 | \n
| \n \u2022Shares | \n\n 55 | \n\n \n | \n\n \n | \n\n 55 | \n
| \n Cash flow hedges | \n\n 0 | \n\n 77 | \n\n 0 | \n\n 77 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n \n | \n\n 53 | \n\n 0 | \n\n 53 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 23 | \n\n 0 | \n\n 23 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n 0 | \n\n 0 | \n\n 8 | \n\n 8 | \n
| \n \u2022Shares | \n\n \n | \n\n \n | \n\n 8 | \n\n 8 | \n
| \n Total (assets) | \n\n 55 | \n\n 81 | \n\n 8 | \n\n 144 | \n
| \n \n | \n||||
| \n Held for trading | \n\n 0 | \n\n -27 | \n\n 0 | \n\n -27 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -4 | \n\n 0 | \n\n -4 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n -18 | \n\n 0 | \n\n -18 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Index | \n\n 0 | \n\n -3 | \n\n 0 | \n\n -3 | \n
| \n Cash flow hedges | \n\n 0 | \n\n -87 | \n\n 0 | \n\n -87 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -7 | \n\n 0 | \n\n -7 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n \u2022Utility risk | \n\n \n | \n\n -47 | \n\n 0 | \n\n -47 | \n
| \n \u2022CO2 risk | \n\n \n | \n\n -32 | \n\n 0 | \n\n -32 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total (liabilities) | \n\n 0 | \n\n -115 | \n\n 0 | \n\n -115 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n|||
|---|---|---|---|---|
| \n Level 1 | \n\n Level 2 | \n\n Level 3 | \n\n Total | \n|
| \n Held for trading | \n\n 0 | \n\n 17 | \n\n 0 | \n\n 18 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 3 | \n\n 0 | \n\n 3 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 4 | \n\n 0 | \n\n 5 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Shares | \n\n \n | \n\n 8 | \n\n 0 | \n\n 8 | \n
| \n \u2022Index | \n\n 0 | \n\n 2 | \n\n 0 | \n\n 2 | \n
| \n Equity instruments measured at fair value through profit or loss | \n\n 87 | \n\n 0 | \n\n 0 | \n\n 87 | \n
| \n \u2022Shares | \n\n 87 | \n\n \n | \n\n \n | \n\n 87 | \n
| \n Cash flow hedges | \n\n 0 | \n\n 50 | \n\n 0 | \n\n 50 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 2 | \n\n 0 | \n\n 2 | \n
| \n \u2022 Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 47 | \n\n 0 | \n\n 48 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Equity instruments measured at fair value through other comprehensive income | \n\n 0 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n Total (assets) | \n\n 87 | \n\n 67 | \n\n 1 | \n\n 156 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Held for trading | \n\n 0 | \n\n -37 | \n\n 0 | \n\n -37 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -1 | \n\n 0 | \n\n -1 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n -8 | \n\n 0 | \n\n -8 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n -26 | \n\n 0 | \n\n -26 | \n
| \n \u2022 Shares | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n \u2022Index | \n\n 0 | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n Cash flow hedges | \n\n 0 | \n\n -166 | \n\n 0 | \n\n -166 | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n -1 | \n\n 0 | \n\n -1 | \n
| \n \u2022Interest rate risk | \n\n 0 | \n\n -61 | \n\n 0 | \n\n -61 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n -59 | \n\n 0 | \n\n -59 | \n
| \n \u2022CO2 risk | \n\n 0 | \n\n -44 | \n\n 0 | \n\n -44 | \n
| \n \u2022Shares | \n\n 0 | \n\n \n | \n\n 0 | \n\n 0 | \n
| \n Total (liabilities) | \n\n 0 | \n\n -202 | \n\n 0 | \n\n -202 | \n
The fair value of the financial instruments to manage the utility risk reduced in 2024. This is mainly explained by the fact that Solvay had decided to concentrate on its own internal consumption only and the price increase of gas and electricity in comparison to 2023.
Reconciliation of level 3 fair value measurements of financial assets and liabilities.
| \n In \u20ac million | \n\n December 31, 2024 | \n||
|---|---|---|---|
| \n At fair value through profit or loss | \n\n At fair value through other comprehensive income | \n\n Total | \n|
| \n Equity instruments | \n\n Equity instruments | \n||
| \n Opening balance at January 1 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n Total gains or losses | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Recognized in profit or loss | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Recognized in other comprehensive income | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Acquisitions | \n\n \n | \n\n 7 | \n\n 7 | \n
| \n Capital decreases | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Partial Demerger | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Transfers out of level 3 | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Derivative instruments in designated hedge accounting relationships | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Transfer to assets held for sale | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Closing balance at December 31 | \n\n 0 | \n\n 8 | \n\n 8 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n||
|---|---|---|---|
| \n At fair value through profit or loss | \n\n At fair value through other comprehensive income | \n\n Total | \n|
| \n Equity instruments | \n\n Equity instruments | \n||
| \n Opening balance at January 1 | \n\n 47 | \n\n 24 | \n\n 71 | \n
| \n Total gains or losses | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Recognized in profit or loss | \n\n 2 | \n\n \n | \n\n 2 | \n
| \n Recognized in other comprehensive income | \n\n \n | \n\n \n | \n\n 0 | \n
| \n Acquisitions | \n\n 0 | \n\n 8 | \n\n 8 | \n
| \n Capital decreases | \n\n \n | \n\n -1 | \n\n -1 | \n
| \n Partial Demerger | \n\n -49 | \n\n -30 | \n\n -79 | \n
| \n Closing balance at December 31 | \n\n 0 | \n\n 1 | \n\n 1 | \n
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Recognized in the consolidated income statement | \n\n \n | \n\n \n | \n
| \n Recycling from OCI of derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n -7 | \n\n 39 | \n
| \n \u2022Utility risk | \n\n -4 | \n\n -1 | \n
| \n \u2022Interest rate risk | \n\n \n | \n\n \n | \n
| \n Changes in the fair value of financial instruments held for trading | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n \n | \n\n \n | \n
| \n \u2022Utility risk | \n\n -2 | \n\n 86 | \n
| \n \u2022CO2 risk | \n\n \n | \n\n 15 | \n
| \n Recognized in the gross margin | \n\n -14 | \n\n 138 | \n
| \n Recycling from OCI of derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022CO2 risk | \n\n -38 | \n\n \n | \n
| \n \u2022Shares | \n\n 0 | \n\n 0 | \n
| \n Changes in the fair value of financial instruments held for trading | \n\n \n | \n\n \n | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022CO2 risk | \n\n 8 | \n\n 0 | \n
| \n \u2022Shares | \n\n -3 | \n\n 0 | \n
| \n Gains and losses (time value) on derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022CO2 risk | \n\n \n | \n\n \n | \n
| \n Foreign operating exchange gains and losses | \n\n 0 | \n\n 2 | \n
| \n Recognized in other operating gains and losses | \n\n -33 | \n\n 2 | \n
| \n Recycling from OCI of derivative financial instruments designated in a cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n Changes in the fair value of financial instruments held for trading | \n\n \n | \n\n \n | \n
| \n \u2022Utility risk | \n\n 0 | \n\n 0 | \n
| \n \u2022 Shares | \n\n 0 | \n\n 0 | \n
| \n Ineffective portion of derivative financial instruments designated in cash flow hedge relationship | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n 0 | \n\n 0 | \n
| \n Recognized in results from portfolio management and reassessments | \n\n 0 | \n\n 0 | \n
| \n Net interest expense | \n\n -79 | \n\n -24 | \n
| \n Financial charge on lease liabilities | \n\n -12 | \n\n -11 | \n
| \n Other gains and losses on net indebtedness (excluding gains and losses on items not related to financial instruments) | \n\n \n | \n\n \n | \n
| \n \u2022Foreign currency risk | \n\n -3 | \n\n 1 | \n
| \n \u2022Interest element of financial instruments | \n\n 1 | \n\n 6 | \n
| \n \u2022Others | \n\n -3 | \n\n -6 | \n
| \n Recognized in charges on net indebtedness(*) | \n\n -97 | \n\n -33 | \n
| \n Dividends from equity instruments measured at fair value through other comprehensive income | \n\n \n | \n\n \n | \n
| \n Capital gain on available-for-sale investment posted directly to the income statement | \n\n \n | \n\n \n | \n
| \n Recycling from equity of unrecognized gain and losses related to disposed available-for-sale financial assets(*) | \n\n 0 | \n\n 0 | \n
| \n Recycling from equity of impairment losses on available-for-sale financial assets(*) | \n\n 0 | \n\n 0 | \n
| \n Total recognized in the consolidated income statement | \n\n -144 | \n\n 107 | \n
(*)The note F6 Net Financial Charges shows an amount of \u20ac(76) million for 2024 (\u20ac(41) million for 2023) reported under \u201cNet cost of borrowing\u201d. This amount includes \u20ac(3) million for 2024 (\u20ac(6) million for 2023) of financial expenses not related to financial instruments that are excluded in this table from the line item \u201cRecognized in charges on net indebtedness.\u201d
The loss on highly probable sales in foreign currency recognized in gross margin for \u20ac(7) million is mainly explained by the hedging of the US$ currency and the loss recognized on utility instruments for \u20ac(4) million.
The change in fair value of financial instruments held for trading recognized in gross margin is explained by:
ha gain of \u20ac86 million in 2023, due to the price increase of gas and electricity;
In 2024, the loss of \u20ac(33) million recognized in other operating gains and losses is mainly explained by:
hA gain of \u20ac8 million (a gain of \u20ac15 million in 2023) mainly due to the price variation of CO2.
hThe loss of \u20ac(38) million recognized in other operating gains and losses is explained by the discontinuance of cash flow hedge relationship on CO2 in 2024. Refer also to F32D Other market risks.
In 2024, in the caption other gains and losses on net indebtedness, the foreign exchange income decreased by \u20ac(4) million in comparison to 2023. The gain of \u20ac1\u00a0million (\u20ac6 million for 2023) is related to the interest element of financial derivatives (forward points). The other costs decreased by \u20ac(4) million in 2024 in comparison to 2023 due to one off costs incurred in the frame of the separation plan in 2023.
Net interest expense of \u20ac79 million includes \u20ac5 million of interest rate risk recycled from OCI.
| \n In \u20ac million | \n\n Cash flow hedges | \n|||||||
|---|---|---|---|---|---|---|---|---|
| \n Foreign currency risk | \n\n Interest rate risk | \n\n Commodity risk | \n\n Total | \n|||||
| \n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n|
| \n Balance at January 1 | \n\n 1 | \n\n 13 | \n\n -61 | \n\n 0 | \n\n -87 | \n\n 67 | \n\n -148 | \n\n 81 | \n
| \n Recycling from other comprehensive income of derivative financial instruments designated in a cash flow hedge relationship | \n\n 7 | \n\n -41 | \n\n 5 | \n\n 9 | \n\n 43 | \n\n 13 | \n\n 55 | \n\n -20 | \n
| \n Effective portion of changes in fair value of cash flow hedge | \n\n -13 | \n\n 29 | \n\n 23 | \n\n -70 | \n\n -15 | \n\n -167 | \n\n -6 | \n\n -209 | \n
| \n Balance at December 31 | \n\n -5 | \n\n 1 | \n\n -33 | \n\n -61 | \n\n -60 | \n\n -87 | \n\n -99 | \n\n -148 | \n
See 2 Capital, shares and shareholders in respect of capital in the Corporate Governance statement chapter of this annual report.
The Group manages its funding structure with the objective of safeguarding its ability to continue as a going concern, optimizing the return for shareholders, maintaining an investment-grade rating, and minimizing the cost of debt.
The capital structure of the Group consisted of equity and of net debt (see note F33 Net indebtedness).
Besides the statutory minimum equity funding requirements that apply to the Company\u2019s subsidiaries in the different countries, Solvay is not subject to any additional legal capital requirements.
The Treasury department reviews the capital structure on an ongoing basis under the authority and the supervision of the Chief Financial Officer. As appropriate, the Legal department is involved to ensure compliance with legal and contractual requirements.
The Group is exposed to market risk from movements in foreign exchange rates, interest rates and other market prices (utility prices, CO2 emission rights prices and equity prices). The Group\u2019s senior management oversees the management of these risks and is supported by the Treasury department (non-commodity risks) and Solvay Sustainable Development and Energy department that advise on financial risks and the appropriate financial risk governance framework for the Group. Both departments provide assurance to the Group\u2019s senior management that the Group\u2019s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Group\u2019s policies and risk objectives. Solvay uses derivative financial instruments to hedge clearly identified foreign exchange, interest rate, index, utility price and CO2 emission rights price risks (hedging instruments). All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. However, the required criteria to apply hedge accounting are not met in all cases.
Furthermore, the Group is also exposed to liquidity risks and credit risks.
The Group is an essential chemical company with operations worldwide that result in transactions denominated in foreign currencies. Consequently, the Group is exposed to exchange rate fluctuations. In 2024, the Group was mainly exposed to US Dollar, Chinese Yuan and Brazilian Real.
To mitigate its foreign currency risk, the Group has defined a hedging policy that is essentially based on the principles of financing its activities in local currency and hedges the transactional exchange risk at the time of invoicing (risk which is certain). The Group constantly monitors its activities in foreign currencies and hedges, where appropriate, the exchange rate exposures on expected cash flows (risk which is highly probable).
Exchange rate exposures are managed within approved policy parameters utilizing forward foreign exchange contracts or, when appropriate, other derivatives like currency options.
In the course of 2024, the \u20ac/US$ exchange rate moved from 1.1052 at the start of January to 1.0394 at the end of December (from 1.0674 to 1.1052 in 2023).
A fluctuation of (0.10) to the US$/\u20acexchange rate, would generate in 2024 about \u20ac33 million (\u20ac30 million for 2023) variation to the EBITDA; 64% of this variation is at conversion level and 36% at transaction level, the latter being mostly hedged. EBITDA is the key non-IFRS metric for operational performance as defined in the glossary.
At the end of 2024, a strengthening of the US dollar vs euro would increase the net debt by approximately \u20ac8 million (\u20ac0 million in 2023) per 0.10 US$/\u20acfluctuation. Conversely, a weakening of the US dollar vs euro would decrease the net debt by approximately \u20ac7 million (\u20ac0 million in 2023) per 0.10 US$/\u20acfluctuation.
The Group\u2019s currency risk can be split into two categories: translation and transactional risk.
Translation risk
The translation exchange risk is the risk affecting the Group\u2019s consolidated financial statements related to investees operating in a currency other than the euro (the Group\u2019s presentation currency).
During 2024 and 2023, the Group did not hedge the currency risk of foreign operations.
Transactional risk
The transactional risk is the exchange risk linked to a specific transaction, such as a Group entity buying or selling in a currency other than its functional currency.
To the largest extent possible, the Group manages the transactional risk on receivables and borrowings centrally and locally when centralization is not possible.
The choice of borrowing currency depends mainly on the opportunities offered by the various markets. This means that the selected currency is not necessarily that of the country in which the funds will be invested. Nonetheless, operating entities are financed essentially in their functional currencies.
In emerging countries, it is not always possible to borrow in local currency, either because funds are not available in local financial markets, or because the financial conditions are too onerous. In such a situation, the Group has to borrow in a different currency. Nonetheless, the Group considers opportunities to refinance its borrowings in emerging countries with local currency debt.
Derivatives are initially recognized at fair value at the date a derivative contract is entered into and are classified into the two categories described below.
Held for trading
The transactional risk is managed either by spot or forward contracts. Unless documented as hedging instruments (see above), derivative financial instruments are classified as held for trading.
In 2024, the notional amounts transacted to manage the transactional risk are:
ha long position of \u20ac368 million (compared to \u20ac271 million in 2023);
ha short position of \u20ac(239) million (compared to \u20ac(284) million in 2023);
hin comparison to 2023, the optimization of the cash centralization model led to a net long position increase of \u20ac142 million (mainly Chinese Yuan and US Dollar).
The following table details the notional amounts of the Group\u2019s derivatives contracts outstanding at the end of the period:
| \n In \u20ac million | \n\n Notional amount(1) | \n\n Fair value assets | \n\n Fair value liabilities | \n|||
|---|---|---|---|---|---|---|
| \n December 31 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n
| \n Held for trading long position | \n\n 368 | \n\n 271 | \n\n 1 | \n\n 1 | \n\n -1 | \n\n -1 | \n
| \n Held for trading short position | \n\n -239 | \n\n -284 | \n\n 1 | \n\n 2 | \n\n -3 | \n\n 0 | \n
| \n Total | \n\n 129 | \n\n -13 | \n\n 2 | \n\n 3 | \n\n -4 | \n\n -1 | \n
(1)Long/(short) positions (if the foreign exchange transaction does not involve the functional currency, both notional amounts are considered).
Cash flow hedge
The Group uses derivatives to hedge identified foreign exchange rate risks. It documents those as hedging instruments unless it hedges a recognized financial asset or liability when generally no cash flow hedge relationship is documented. Most hedges are transaction related.
At the end of 2024, the Group had mainly hedged highly probable sales in foreign currencies (short position) in a nominal amount of US$190 million (\u20ac183 million) and PLN55 million (\u20ac13 million). All cash flow hedge contracts that existed at the end of December 2024 will be settled within the next 12 months and will impact profit or loss during that period.
The following table details the notional amounts of Solvay\u2019s derivatives contracts outstanding at the end of the period:
Notional amounts
| \n In \u20ac million | \n\n December 31, 2024 | \n|||||||
|---|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument(1) | \n\n Notional amount of the risk exposure(1) | \n\n Percentage of exposure hedged | \n\n \n | \n\n Average hedge exchange rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Equity | \n\n Assets | \n\n Liabilities | \n||||||
| \n Cash flow hedges - Forecasted sales and purchases(3) | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n EUR/PLN | \n\n -13 | \n\n -20 | \n\n 65% | \n\n (2) | \n\n 4.37 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total EUR | \n\n -13 | \n\n -20 | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n USD/BRL | \n\n -51 | \n\n -85 | \n\n 60% | \n\n (2) | \n\n 5.40 | \n\n -2 | \n\n 0 | \n\n 2 | \n
| \n USD/CNY | \n\n -60 | \n\n -113 | \n\n 53% | \n\n (2) | \n\n 7.00 | \n\n -2 | \n\n 0 | \n\n 2 | \n
| \n USD/EUR | \n\n -42 | \n\n -82 | \n\n 52% | \n\n (2) | \n\n 1.10 | \n\n -2 | \n\n 0 | \n\n 2 | \n
| \n USD/MXN | \n\n -13 | \n\n -18 | \n\n 68% | \n\n (2) | \n\n 19.69 | \n\n -1 | \n\n 0 | \n\n 1 | \n
| \n USD/THB | \n\n -17 | \n\n -35 | \n\n 50% | \n\n (2) | \n\n 34.77 | \n\n 0 | \n\n 1 | \n\n 0 | \n
| \n Total USD | \n\n -183 | \n\n -332 | \n\n \n | \n\n \n | \n\n \n | \n\n -6 | \n\n 1 | \n\n 7 | \n
| \n Total | \n\n -196 | \n\n -352 | \n\n \n | \n\n \n | \n\n \n | \n\n -6 | \n\n 1 | \n\n 7 | \n
(1)Long/(short) positions.
(2)In compliance with Group Treasury Policy the percentage of hedged exposure will reach the progressive minimum compliance level of 60% in 2024.
(3)The hedging instruments are in the line item: \"Other Receivables\" and \"Other Liabilities\" in the statement of financial position.
| \n In \u20ac million | \n\n December 31, 2023 | \n|||||||
|---|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument(1) | \n\n Notional amount of the risk exposure(1) | \n\n Percentage of exposure hedged | \n\n \n | \n\n Average hedge exchange rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Equity | \n\n Assets | \n\n Liabilities | \n||||||
| \n Cash flow hedges - Forecasted sales and purchases(3) | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n||
| \n JPY/EUR | \n\n -1 | \n\n -1 | \n\n 50% | \n\n (2) | \n\n 126.94 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n JPY/USD | \n\n 0 | \n\n -3 | \n\n 4% | \n\n (4) | \n\n 145.33 | \n\n 1 | \n\n 1 | \n\n 0 | \n
| \n Total JPY | \n\n -1 | \n\n -4 | \n\n \n | \n\n \n | \n\n \n | \n\n 1 | \n\n 1 | \n\n 0 | \n
| \n USD/BRL | \n\n -63 | \n\n -106 | \n\n 60% | \n\n (2) | \n\n 4.78 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n USD/CNY | \n\n -68 | \n\n -138 | \n\n 49% | \n\n (2) | \n\n 6.92 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n USD/EUR | \n\n -24 | \n\n -37 | \n\n 66% | \n\n (2) | \n\n 1.13 | \n\n 2 | \n\n 1 | \n\n 1 | \n
| \n USD/MXN | \n\n -11 | \n\n -23 | \n\n 48% | \n\n (2) | \n\n 18.32 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n USD/THB | \n\n -17 | \n\n -39 | \n\n 44% | \n\n (2) | \n\n 33.75 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total USD | \n\n -184 | \n\n -342 | \n\n \n | \n\n \n | \n\n \n | \n\n 3 | \n\n 2 | \n\n 1 | \n
| \n Total | \n\n -185 | \n\n -346 | \n\n \n | \n\n \n | \n\n \n | \n\n 4 | \n\n 2 | \n\n 1 | \n
(1)Long/(short) positions.
(2)In compliance with Group Treasury Policy the percentage of hedged exposure will reach the progressive minimum compliance level of 60% in 2023.
(3)The hedging instruments are recorded in the line item: \"Other Receivables\" and \"Other Liabilities\" in the statement of financial position.
(4)In compliance with Group Treasury Policy the hedging will be stopped in 2024 due to the low materiality exposure.
Hedge relationships are seldom perfect. Therefore, ineffectiveness could arise with the result that changes in the fair value or cash flows of the hedged item that are attributable to a hedged risk and the hedging instrument do not offset within a period. The sources of hedge ineffectiveness that could potentially affect the hedging relationship during its term are listed below:
hA reduction in the amount of the forecast sales resulting in quantity or notional amount differences \u2013 the hedged item and hedging instrument are based on different quantities or notional amounts.
hA significant change in the credit risk of parties.
Timing differences \u2013 the hedged item and hedging instrument occur or are settled at different dates.
In 2024, no hedge ineffectiveness was recognized in the consolidated income statement.
See the Financial risk in the Management of risks section of this annual report for additional information on the interest rate risks management.
hInterest rate risk is managed at Group level.
hThe Group is exposed to interest rate risk because entities in the Group borrow funds at both fixed and floating interest rates. Interest rate risk is managed at Group level by maintaining an appropriate mix between fixed and floating rate borrowings.
Interest rate exposure by currency is summarized below:
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|---|
| \n Currency | \n\n Fixed rate | \n\n Floating rate | \n\n Total | \n\n Fixed rate | \n\n Floating rate | \n\n Total | \n
| \n Financial debt | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n EUR | \n\n -1,721 | \n\n -216 | \n\n -1,937 | \n\n -164 | \n\n -1,840 | \n\n -2,003 | \n
| \n USD | \n\n -146 | \n\n 0 | \n\n -146 | \n\n -137 | \n\n -2 | \n\n -139 | \n
| \n BGN | \n\n -1 | \n\n -21 | \n\n -22 | \n\n -1 | \n\n -1 | \n\n -2 | \n
| \n GBP | \n\n -8 | \n\n 0 | \n\n -8 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n KRW | \n\n -1 | \n\n -3 | \n\n -4 | \n\n -2 | \n\n -10 | \n\n -12 | \n
| \n THB | \n\n -8 | \n\n 0 | \n\n -9 | \n\n -9 | \n\n 0 | \n\n -10 | \n
| \n BRL | \n\n -5 | \n\n -2 | \n\n -7 | \n\n -8 | \n\n -2 | \n\n -10 | \n
| \n Other | \n\n -5 | \n\n -1 | \n\n -5 | \n\n -13 | \n\n -3 | \n\n -16 | \n
| \n Total | \n\n -1,895 | \n\n -243 | \n\n -2,138 | \n\n -333 | \n\n -1,859 | \n\n -2,192 | \n
| \n Cash and cash equivalents | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n EUR | \n\n \n | \n\n 271 | \n\n 271 | \n\n \n | \n\n 297 | \n\n 297 | \n
| \n USD | \n\n \n | \n\n 68 | \n\n 68 | \n\n \n | \n\n 138 | \n\n 138 | \n
| \n CAD | \n\n \n | \n\n 0 | \n\n 0 | \n\n \n | \n\n 2 | \n\n 2 | \n
| \n THB | \n\n \n | \n\n 30 | \n\n 30 | \n\n \n | \n\n 22 | \n\n 22 | \n
| \n SAR | \n\n \n | \n\n 5 | \n\n 5 | \n\n \n | \n\n 8 | \n\n 8 | \n
| \n BRL | \n\n \n | \n\n 74 | \n\n 74 | \n\n \n | \n\n 65 | \n\n 65 | \n
| \n CNY | \n\n \n | \n\n 23 | \n\n 23 | \n\n \n | \n\n 16 | \n\n 16 | \n
| \n KRW | \n\n \n | \n\n 6 | \n\n 6 | \n\n \n | \n\n 6 | \n\n 6 | \n
| \n JPY | \n\n \n | \n\n 4 | \n\n 4 | \n\n \n | \n\n 10 | \n\n 10 | \n
| \n Other | \n\n \n | \n\n 57 | \n\n 57 | \n\n \n | \n\n 20 | \n\n 20 | \n
| \n Total | \n\n \n | \n\n 539 | \n\n 539 | \n\n \n | \n\n 584 | \n\n 584 | \n
| \n Other financial instruments | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CNY | \n\n \n | \n\n 4 | \n\n 4 | \n\n \n | \n\n 12 | \n\n 12 | \n
| \n EUR | \n\n \n | \n\n 7 | \n\n 7 | \n\n \n | \n\n 65 | \n\n 65 | \n
| \n SAR | \n\n \n | \n\n 4 | \n\n 4 | \n\n \n | \n\n 4 | \n\n 4 | \n
| \n Other | \n\n \n | \n\n 1 | \n\n 1 | \n\n \n | \n\n 38 | \n\n 38 | \n
| \n Total | \n\n \n | \n\n 16 | \n\n 16 | \n\n \n | \n\n 118 | \n\n 118 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Total | \n\n -1,895 | \n\n 312 | \n\n -1,583 | \n\n -333 | \n\n -1,156 | \n\n -1,489 | \n
At the end of 2024, \u20ac1,865 million of the Group\u2019s gross debt was at fixed-rate, and is largely comprised of:
hTwo senior bonds issued in April 2024 for a total of \u20ac1,500 million maturing in 2028 and 2031 (carrying amount of \u20ac1,492 million);
hIFRS 16 lease liability for a total of \u20ac306 million (carrying amount of \u20ac306 million).
The floating-rate debt is mainly comprised of a term loan for an amount of \u20ac200 million maturing in 2026 which is subject to interest rate hedging via interest rate swaps reducing the volatility to interest rate fluctuations (discussed below).
The impact of interest rate volatility at the end of 2024 compared to 2023 is the following:
| \n In \u20ac million | \n\n Sensitivity to a + 100bp movement in EUR market interest rates | \n\n Sensitivity to a - 100bp movement in EUR market interest rates | \n||
|---|---|---|---|---|
| \n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n|
| \n Profit or loss | \n\n 0 | \n\n -7 | \n\n 0 | \n\n 6 | \n
The sensitivity to interest rates volatility on the floating gross financial debt remains insignificant at the end of 2024 compared to 2023 thanks to the interest rates hedging. Most of the sensitivity disclosed in 2023 corresponds to the remaining volatility between the maximum interest rate payable (cap strike rate) and the minimum rate (floor strike rate) following the hedging of the bridge facility (\u20ac1,500 million) via zero cost interest collar.
Effects of IBOR market developments
All the new Liquidity Facilities (RCF, Bilateral lines) have been negotiated using only SOFR reference index and not IBOR anymore. This will not have any impact financially.
The ISDA's agreements were as well amended to include the SOFR.
All the other old agreements (before June 2023) still reflect IBOR on the agreements. Banks in that case will apply market standard approach and use the new SOFR reference rate for those agreements, therefore will not have an impact on our financial charges nor relations.
Interest rate risk hedged by instrument accounted for as held for trading
In 2024 and 2023, there are no outstanding interest rate instruments accounted for as held for trading.
Interest rate risk hedged by instrument accounted for as a hedging instrument in a cash flow hedge
In comparison to 2023, the remaining interest rate hedging is the hedge executed on the \u20ac200 million floating term loan.
All the other hedging relationships were settled following the repayment of the \u20ac1,500 million bridge facility drawdown and the issuance of the senior bonds totaling \u20ac1,500 million.
| \n Cash flow hedges on floating interests rates | \n\n December 31, 2024 | \n||||||
|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument | \n\n Notional amount of the risk exposure | \n\n Percentage of exposure hedged | \n\n Hedge interest rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Assets | \n\n Liabilities | \n||||||
| \n Floating rate debt (Euribor6M) | \n\n 200 | \n\n 200 | \n\n 100% | \n\n 3.52% | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n 1.99% | \n\n 0 | \n\n 0 | \n\n 0 | \n
As of December 31, 2024, the cash-flow hedge reserve for interest rate risk also includes an amount of \u20ac 31 million related to the unwound Flexiswap hedge instruments and is recycled to profit or loss over the duration of the two bonds. On the Statement of Financial Position, the Flexiswap hedging instruments were replaced by two new instruments classified as financial debt, presented within \"Other borrowings from third parties\" in Note F33.
| \n Cash flow hedges on floating interests rates | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument | \n\n Notional amount of the risk exposure | \n\n Percentage of exposure hedged | \n\n Hedge interest rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Assets | \n\n Liabilities | \n||||||
| \n Floating rate debt (Euribor6M) | \n\n 200 | \n\n 200 | \n\n 100% | \n\n 3.52% | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n Floating rate debt (Euribor1M) | \n\n 1,500 | \n\n 1,500 | \n\n 100% | \n\n 3.55% | \n\n -1 | \n\n 0 | \n\n -1 | \n
| \n Future long-term refinancing (Euribor6M) | \n\n 750 | \n\n 750 | \n\n 100% | \n\n 3,20% + Fixed Margin | \n\n -25 | \n\n 0 | \n\n -25 | \n
| \n Future long-term refinancing (Euribor6M) | \n\n 750 | \n\n 750 | \n\n 100% | \n\n 3,05% + Fixed Margin | \n\n -33 | \n\n 0 | \n\n -33 | \n
Utility and CO2 price risks
The Group purchases a large portion of its coal, gas and electricity needs in Europe and the United States based on fluctuating liquid market indices. Moreover, the Group purchases raw materials with a price formula referring to market indices. In order to reduce the cost volatility, the Group has developed a policy for exchanging variable price against fixed price through derivative financial instruments. Most of these hedging instruments can be documented as hedging instruments of the underlying purchase contracts. Utility purchase contracts at fixed price with a physical delivery for use in the Group's operations are qualified as own use contracts and constitute a natural hedge. Those have not been included in this note.
Financial hedging of utility and CO2 emission rights price risks is managed centrally by Energy Services on behalf of the Group entities.
Energy Services also carries out trading transactions with respect to utility and CO2.
The following tables detail the notional principal amounts and fair values of utility and CO2 derivative financial instruments outstanding at the end of the reporting period:
| \n Held for trading | \n\n Notional amount of the instrument(1) | \n\n Notional amount of the instrument (in units) | \n\n Fair value of the instrument - Asset | \n\n Fair value of the instrument - Liability | \n|||||
|---|---|---|---|---|---|---|---|---|---|
| \n December 31 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n \n | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n
| \n In \u20ac million (except where indicated) | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Power | \n\n \n | \n\n 22 | \n\n \n | \n\n 118,090 | \n\n MWh | \n\n 0 | \n\n 0 | \n\n 0 | \n\n -13 | \n
| \n Standard Quality Gas | \n\n 1 | \n\n 21 | \n\n 10,220 | \n\n 811,174 | \n\n MWh | \n\n 1 | \n\n 0 | \n\n -1 | \n\n 0 | \n
| \n CO2 | \n\n 9 | \n\n 9 | \n\n 360,250 | \n\n 394,500 | \n\n Tons | \n\n 0 | \n\n 0 | \n\n -18 | \n\n -26 | \n
| \n Total | \n\n 10 | \n\n 52 | \n\n \n | \n\n \n | \n\n \n | \n\n 1 | \n\n 0 | \n\n -19 | \n\n -39 | \n
(1)The hedging instruments are located in the line item: \"Other Receivables\" and \"Other Liabilities\" in the consolidated statement of financial position.
The amounts presented in the tables hereafter include hedging needs of the GBUs of the Group that are sourced through Energy Services, and not the full Group utility hedging needs.
| \n \n | \n\n December 31, 2024 | \n|||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| \n Cash flow hedge | \n\n Notional amount of the instrument(1) | \n\n Notional amount of\u00a0the instrument (in units) | \n\n \n | \n\n Notional amount of the risk exposure | \n\n Notional amount of the risk exposure (in units) | \n\n \n | \n\n Percentage of exposure hedged | \n\n Average hedge price per\u00a0risk category | \n\n \n | \n\n Cash flow hedge reserve | \n\n Fair value of the instrument - Asset | \n\n Fair value of the instrument - Liability | \n
| \n In \u20ac million | \n||||||||||||
| \n Power | \n\n 224 | \n\n 2,205,840 | \n\n MWh | \n\n 417 | \n\n 3,772,347 | \n\n MWh | \n\n 58% | \n\n 102 | \n\n EUR/MWh | \n\n -29 | \n\n 0 | \n\n -29 | \n
| \n Standard Quality Gas | \n\n 361 | \n\n 13,463,715 | \n\n MWh | \n\n 1,056 | \n\n 26,558,004 | \n\n MWh | \n\n 51% | \n\n 22 | \n\n EUR/MWh | \n\n 35 | \n\n 53 | \n\n -18 | \n
| \n CO2(2) | \n\n 341 | \n\n 4,292,750 | \n\n Tons | \n\n 872 | \n\n 10,616,000 | \n\n Tons | \n\n 40% | \n\n 75 | \n\n EUR/Tons | \n\n -9 | \n\n 23 | \n\n -32 | \n
| \n Total | \n\n 926 | \n\n \n | \n\n \n | \n\n 2,345 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n -3 | \n\n 76 | \n\n -79 | \n
(1)The hedging instruments are in the line item: \"Other Receivables\" and \"Other Liabilities\" in the consolidated statement of financial position.
(2)Excluding the reserve frozen in OCI, following roll-over transactions (\u20ac(44) million).
| \n Cash flow hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| \n In \u20ac million | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Power | \n\n 112 | \n\n 781,326 | \n\n MWh | \n\n 181 | \n\n 1,763,316 | \n\n MWh | \n\n 44% | \n\n 142 | \n\n EUR/MWh | \n\n 30 | \n\n 33 | \n\n -3 | \n
| \n Standard Quality Gas | \n\n 245 | \n\n 12,343,602 | \n\n MWh | \n\n 579 | \n\n 24,542,118 | \n\n MWh | \n\n 50% | \n\n 27 | \n\n EUR/MWh | \n\n -41 | \n\n 15 | \n\n -56 | \n
| \n CO2(2) | \n\n 553 | \n\n 3,469,500 | \n\n Tons | \n\n 801 | \n\n 9,230,909 | \n\n Tons | \n\n 38% | \n\n 87 | \n\n EUR/Tons | \n\n -43 | \n\n 0 | \n\n -44 | \n
| \n Total | \n\n 910 | \n\n \n | \n\n \n | \n\n 1,561 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n -54 | \n\n 48 | \n\n -102 | \n
(1)The hedging instruments are located in the line item: \"Other Receivables\" and \"Other Liabilities\" in the consolidated statement of financial position.
(2)Excluding the reserve frozen in OCI, following roll-over transactions (\u20ac(33) million).
In 2024, the group changed its hedge relationship on CO2 emission rights price risk which resulted in the discontinuance of hedging cash flow hedge relationship at the end of December 2024. The related loss of \u20ac(38) million was recognized in other operating gains and losses in the consolidated income statement.
Fair value hedge
The Group covered a part of its CO2 emission rights in inventory by forward sales of CO2 emission rights to a related party. The Group qualifies this hedging strategy as fair value hedge. The change in fair value of forward sales is accounted for in profit and loss, concomitantly with the revaluation of the CO2 emission rights held in\u00a0inventory.
The Group has established a 1:1 hedge ratio for the underlying risk of the forward sales of CO2 emission rights to the related party that is identical to the hedged risk component.
The impact of the hedging instrument on the statement of financial position as at December 31, 2024, is as follows:
| \n \n | \n\n December 31, 2024 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n \n | \n\n -1 | \n\n Financial Instrument | \n\n \n | \n\n 0 | \n
| \n \n | \n\n December 31, 2024 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n 2 | \n\n \n | \n\n Inventories | \n\n 0 | \n\n \n | \n
| \n \n | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n \n | \n\n -2 | \n\n Financial Instrument | \n\n 1 | \n\n -1 | \n
| \n \n | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n \n | \n\n 2 | \n\n Inventories | \n\n 1 | \n\n \n | \n
The sensitivities of commodity derivative financial instruments as of December 31, 2024, are presented below.
The sensitivities were defined based on the price levels and volatility levels of each commodity. These assumptions do not constitute an estimation of future market prices, and the sensitivities presented are not representative of future changes in Solvay's equity and results.
| \n In \u20acmillion | \n\n December 31, 2024 | \n||
|---|---|---|---|
| \n Price change | \n\n Other comprehensive income | \n\n Profit or loss | \n|
| \n Natural gas | \n\n +10\u20ac /MWh | \n\n -102 | \n\n 0 | \n
| \n Natural gas | \n\n -10\u20ac /MWh | \n\n 102 | \n\n 0 | \n
| \n Electricity | \n\n +30\u20ac /MWh | \n\n 66 | \n\n 0 | \n
| \n Electricity | \n\n -30\u20ac /MWh | \n\n -66 | \n\n 0 | \n
| \n CO2 emission rights | \n\n +5\u20ac /T | \n\n -21 | \n\n -2 | \n
| \n CO2 emission rights | \n\n -5\u20ac /T | \n\n 21 | \n\n 2 | \n
Performance Share Units Plan (PSU) and Restricted Share Units (RSU) risk on Solvay and Syensqo share price
The last cash settled PSU plan (granted in 2021) vested on 31/12/2023 and was paid out in June 2024. The PSU/RSU plans granted as from 2022 are equity settled. The RSU plan 2022 will deliver Solvay and Syensqo shares. The PSU/RSU plans 2023 and 2024 will deliver Solvay shares only. These PSU/RSU plans are hedged with treasury shares. However, in order to neutralize the volatility of the Syensqo share price, which will impact the liability valuation relating to the RSU plan 2022, the Group has entered into a hedge (equity forward transaction) covering 100% of the risk.
See the Financial risk in the Management of risks section of this annual report for additional information on credit risk management.
The Group continuously monitors the credit risk of important business partners.
The Group engages in transactions only with financial institutions with a good credit rating. The Group monitors and manages exposures to financial institutions within approved counterparty credit limits and credit risk parameters in order to mitigate the risk of default. For financial guarantees, see note F36 Contingent liabilities and financial guarantees.
The Group recognizes expected credit losses on all of its trade receivables: it applies the simplified approach and recognizes lifetime expected losses on all trade receivables, using a provision matrix in order to calculate the lifetime expected credit losses for trade receivables, using historical information on defaults adjusted for the forward-looking information.
The Group classifies the customers and their related receivables in various rating classes, based on the risks\u2019 grading attributed to the customers and on the aging balance of receivables. As such, for all receivables overdue below six months, the Group considers percentages within a range between 0.005% and 4.031%, depending on the rating class. For all receivables overdue in excess of six months, the Group considers a rate of 50% or of 100%, depending on the rating class. The customer\u2019s grading is reviewed annually for customers assessed as low risk profile, and every six months for customers assessed as higher risk profile.
There is no significant concentration of credit risk at Group level because the receivables\u2019 credit risk is spread over a large number of customers and markets.
The aging of trade receivables, financial instruments \u2013 operational, loans and other non-current assets is as follows:
| \n December 31, 2024 | \n\n With expected loss allowance, not credit-impaired | \n||||||
|---|---|---|---|---|---|---|---|
| \n In \u20ac million | \n\n Total | \n\n Credit-impaired | \n\n not past due | \n\n less than 30 days past due | \n\n between 30 and 60 days past due | \n\n between 60 and 90 days past due | \n\n more than 90 days past due | \n
| \n Trade receivables | \n\n 850 | \n\n 22 | \n\n 804 | \n\n 18 | \n\n 1 | \n\n 2 | \n\n 2 | \n
| \n Trade receivables - allowance | \n\n -23 | \n\n -20 | \n\n -1 | \n\n \n | \n\n \n | \n\n \n | \n\n -2 | \n
| \n Trade receivables - net | \n\n 826 | \n\n 2 | \n\n 803 | \n\n 18 | \n\n 1 | \n\n 2 | \n\n 0 | \n
| \n Financial instruments - operational | \n\n 80 | \n\n \n | \n\n 80 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets(1) | \n\n 116 | \n\n 4 | \n\n 111 | \n\n 0 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - allowance | \n\n -4 | \n\n -4 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - net(1) | \n\n 112 | \n\n 0 | \n\n 111 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total | \n\n 1,018 | \n\n 3 | \n\n 994 | \n\n 18 | \n\n 1 | \n\n 2 | \n\n 0 | \n
(1)Loans and other non-current assets do not include pension fund surplus and CO2 -term inventory.
| \n December 31, 2023 | \n\n With expected loss allowance, not credit-impaired | \n||||||
|---|---|---|---|---|---|---|---|
| \n In \u20ac million | \n\n Total | \n\n Credit-impaired | \n\n not past due | \n\n less than 30 days past due | \n\n between 30 and 60 days past due | \n\n between 60 and 90 days past due | \n\n more than 90 days past due | \n
| \n Trade receivables | \n\n 894 | \n\n 55 | \n\n 802 | \n\n 28 | \n\n 1 | \n\n 6 | \n\n 3 | \n
| \n Trade receivables - allowance | \n\n -54 | \n\n -53 | \n\n -1 | \n\n \n | \n\n \n | \n\n \n | \n\n -1 | \n
| \n Trade receivables - net | \n\n 840 | \n\n 3 | \n\n 801 | \n\n 28 | \n\n 1 | \n\n 6 | \n\n 2 | \n
| \n Financial instruments - operational | \n\n 66 | \n\n \n | \n\n 66 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets(1) | \n\n 140 | \n\n 4 | \n\n 135 | \n\n 0 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - allowance | \n\n -4 | \n\n -4 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Loans and other non-current assets - net(1) | \n\n 136 | \n\n 0 | \n\n 135 | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total | \n\n 1,042 | \n\n 3 | \n\n 1,002 | \n\n 28 | \n\n 1 | \n\n 6 | \n\n 2 | \n
(1) Loans and other non-current assets do not include pension fund surplus and CO2 emission rights inventory.
The table below presents the allowances on trade receivables:
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n January 1 | \n\n -54 | \n\n -72 | \n
| \n Additions | \n\n -3 | \n\n -11 | \n
| \n Uses | \n\n 12 | \n\n 5 | \n
| \n Reversal | \n\n 15 | \n\n 9 | \n
| \n Currency translation differences | \n\n 2 | \n\n -1 | \n
| \n Transfer to assets held for sale | \n\n 0 | \n\n 0 | \n
| \n Partial Demerger | \n\n \n | \n\n 14 | \n
| \n Other | \n\n 5 | \n\n 0 | \n
| \n December 31 | \n\n -23 | \n\n -54 | \n
See the Financial risk in the Management of risks section of this annual report for additional information on the liquidity risk management.
Liquidity risk relates to Solvay\u2019s ability to service and refinance its debt (including notes issued) and to fund its operations.
This depends on its ability to generate cash from operations and not to overpay for acquisitions. In addition, external factors impacting the global liquidity markets could also make financing sources less accessible.
The Finance Committee gives its opinion on the appropriate liquidity risk management for the Group\u2019s short-, medium-, and long-term funding and liquidity management requirements.
The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecasts and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
The Group staggers the maturities of its financing sources over time in order to limit amounts to be refinanced each year.
The following tables detail the Group\u2019s remaining contractual maturity for its financial liabilities with contractual repayment periods.
The tables have been prepared using the discounted cash flows of financial liabilities, based on the earliest date on which the Group can be required to pay.
The following tables present discounted amounts (carrying amounts):
| \n In \u20ac million | \n\n December 31, 2024 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 809 | \n\n 809 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 107 | \n\n 107 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 111 | \n\n 98 | \n\n 13 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 21 | \n\n \n | \n\n 5 | \n\n 5 | \n\n 11 | \n
| \n Financial debt | \n\n 1,831 | \n\n 84 | \n\n 217 | \n\n 777 | \n\n 753 | \n
| \n Leasing debt | \n\n 306 | \n\n 70 | \n\n 36 | \n\n 92 | \n\n 108 | \n
| \n Total | \n\n 3,186 | \n\n 1,169 | \n\n 271 | \n\n 874 | \n\n 872 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 850 | \n\n 850 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 175 | \n\n 175 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 140 | \n\n 108 | \n\n 32 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 34 | \n\n \n | \n\n 12 | \n\n 2 | \n\n 20 | \n
| \n Financial debt | \n\n 1,885 | \n\n 148 | \n\n 1,711 | \n\n 23 | \n\n 3 | \n
| \n Leasing debt | \n\n 307 | \n\n 63 | \n\n 44 | \n\n 92 | \n\n 107 | \n
| \n Total | \n\n 3,390 | \n\n 1,344 | \n\n 1,799 | \n\n 117 | \n\n 130 | \n
The following tables present undiscounted amounts (nominal value):
| \n In \u20ac million | \n\n December 31, 2024 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 809 | \n\n 809 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 107 | \n\n 107 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 111 | \n\n 98 | \n\n 13 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 21 | \n\n \n | \n\n 5 | \n\n 5 | \n\n 11 | \n
| \n Financial debt | \n\n 1,842 | \n\n 84 | \n\n 219 | \n\n 781 | \n\n 757 | \n
| \n Leasing debt | \n\n 306 | \n\n 70 | \n\n 36 | \n\n 92 | \n\n 108 | \n
| \n Total | \n\n 3,196 | \n\n 1,169 | \n\n 273 | \n\n 878 | \n\n 876 | \n
| \n Interests on financial debt and lease liabilities | \n\n 412 | \n\n 75 | \n\n 71 | \n\n 174 | \n\n 91 | \n
| \n Total outflows of cash | \n\n 3,608 | \n\n 1,244 | \n\n 345 | \n\n 1,052 | \n\n 967 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 850 | \n\n 850 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 175 | \n\n 175 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 140 | \n\n 108 | \n\n 32 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 34 | \n\n \n | \n\n 12 | \n\n 2 | \n\n 20 | \n
| \n Financial debt | \n\n 1,886 | \n\n 148 | \n\n 1,711 | \n\n 23 | \n\n 4 | \n
| \n Leasing debt | \n\n 307 | \n\n 63 | \n\n 44 | \n\n 92 | \n\n 107 | \n
| \n Total | \n\n 3,391 | \n\n 1,344 | \n\n 1,799 | \n\n 117 | \n\n 131 | \n
| \n Interests on financial debt and lease liabilities | \n\n 179 | \n\n 82 | \n\n 61 | \n\n 17 | \n\n 19 | \n
| \n Total outflows of cash | \n\n 3,570 | \n\n 1,426 | \n\n 1,860 | \n\n 134 | \n\n 150 | \n
Solvay\u2019s liquidity amounts to \u20ac2.0 billion including \u20ac0.6 billion of cash and cash equivalents on the statement of financial position and \u20ac1.4 billion of committed fully undrawn credit facilities (\u20ac1.1 billion multilateral RCF maturing in 2029 with extension possibility, and \u20ac0.3 billion bilateral RCF maturing in 2027 with extension possibilities) unused at the end of December 2024.
In addition, Solvay has access to a Belgian Treasury Bill program for \u20ac1.0 billion (no outstanding balance on December 31, 2024). The program is covered by a back-up credit line.
See below (section F32.E) for further details on supplier financing programs within trade payables.
fAccounting policy
General
The Group classifies financial liabilities that arise from supplier finance arrangements within Trade and other payables in the statement of financial position if they have a similar nature and function to trade payables. This is the case if the supplier finance arrangement is part of the working capital used in the Group\u2019s normal operating cycle, the level of security provided is similar to trade payables and the terms of the liabilities that are part of the supply chain finance arrangement are not substantially different from the terms of trade payables that are not part of the arrangement. Cash flows related to liabilities arising from supplier finance arrangements that are classified in Trade and other payables in the consolidated statement of financial position are included in operating activities in the consolidated statement of cash flows.
First application in 2024
This disclosure requirement was introduced by the Amendments Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7), published in May 2023 by the IASB. The amendments are effective for periods beginning on or after 1 January 2024. In the year of initial application, the requirements only apply to the annual financial report and the disclosure does not need to provide the comparative figures.
Terms and conditions
The Group has established a supplier finance arrangement that is offered to some of the Group\u2019s key suppliers. Participation in the arrangement is at the suppliers\u2019 own discretion. Suppliers that participate in the supplier finance arrangement will receive early payment on invoices sent to the Group from the Group\u2019s external finance provider. If suppliers choose to receive early payment, they pay a fee to the finance provider, to which the Group is not a party. For the finance provider to pay the invoices, the goods must have been received or supplied and the invoices approved by the Group. Payments to suppliers ahead of the invoice due date are processed by the finance provider and, in all cases, the Group settles the original invoice by paying the finance provider in line with the original invoice maturity date described above.
The Group assesses each arrangement against indicators to determine if the liabilities which suppliers have sold to the partner bank under the supplier financing scheme continue to meet the definition of trade payables or should be classified as financial debt. On December 31, 2024 and 2023, all trade payables subject to the supplier finance arrangement meet the criteria of trade payables and are included in trade payables in the consolidated statement of financial position.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n\n January 1, 2023 | \n
|---|---|---|---|
| \n Carrying amount of financial liabilities | \n\n \n | \n\n \n | \n\n \n | \n
| \n Presented in trade and other payables | \n\n 62 | \n\n N/A | \n\n N/A | \n
| \n \u2022of which suppliers have received payment from finance provider | \n\n 47 | \n\n N/A | \n\n N/A | \n
| \n Range of payment due dates (days after the invoice date) | \n\n \n | \n\n \n | \n\n \n | \n
| \n Liabilities that are part of the arrangement | \n\n 102-106 days | \n\n N/A | \n\n N/A | \n
| \n Comparable trade payables that are not part of the arrangements | \n\n 45-49 days | \n\n N/A | \n\n N/A | \n
The Group is exposed to market risk from movements in foreign exchange rates, interest rates and other market prices (utility prices, CO2 emission rights prices and equity prices). The Group\u2019s senior management oversees the management of these risks and is supported by the Treasury department (non-commodity risks) and Solvay Sustainable Development and Energy department that advise on financial risks and the appropriate financial risk governance framework for the Group. Both departments provide assurance to the Group\u2019s senior management that the Group\u2019s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Group\u2019s policies and risk objectives. Solvay uses derivative financial instruments to hedge clearly identified foreign exchange, interest rate, index, utility price and CO2 emission rights price risks (hedging instruments). All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. However, the required criteria to apply hedge accounting are not met in all cases.
Furthermore, the Group is also exposed to liquidity risks and credit risks.
The Group is an essential chemical company with operations worldwide that result in transactions denominated in foreign currencies. Consequently, the Group is exposed to exchange rate fluctuations. In 2024, the Group was mainly exposed to US Dollar, Chinese Yuan and Brazilian Real.
To mitigate its foreign currency risk, the Group has defined a hedging policy that is essentially based on the principles of financing its activities in local currency and hedges the transactional exchange risk at the time of invoicing (risk which is certain). The Group constantly monitors its activities in foreign currencies and hedges, where appropriate, the exchange rate exposures on expected cash flows (risk which is highly probable).
Exchange rate exposures are managed within approved policy parameters utilizing forward foreign exchange contracts or, when appropriate, other derivatives like currency options.
In the course of 2024, the \u20ac/US$ exchange rate moved from 1.1052 at the start of January to 1.0394 at the end of December (from 1.0674 to 1.1052 in 2023).
A fluctuation of (0.10) to the US$/\u20acexchange rate, would generate in 2024 about \u20ac33 million (\u20ac30 million for 2023) variation to the EBITDA; 64% of this variation is at conversion level and 36% at transaction level, the latter being mostly hedged. EBITDA is the key non-IFRS metric for operational performance as defined in the glossary.
At the end of 2024, a strengthening of the US dollar vs euro would increase the net debt by approximately \u20ac8 million (\u20ac0 million in 2023) per 0.10 US$/\u20acfluctuation. Conversely, a weakening of the US dollar vs euro would decrease the net debt by approximately \u20ac7 million (\u20ac0 million in 2023) per 0.10 US$/\u20acfluctuation.
The Group\u2019s currency risk can be split into two categories: translation and transactional risk.
Translation risk
The translation exchange risk is the risk affecting the Group\u2019s consolidated financial statements related to investees operating in a currency other than the euro (the Group\u2019s presentation currency).
During 2024 and 2023, the Group did not hedge the currency risk of foreign operations.
Transactional risk
The transactional risk is the exchange risk linked to a specific transaction, such as a Group entity buying or selling in a currency other than its functional currency.
To the largest extent possible, the Group manages the transactional risk on receivables and borrowings centrally and locally when centralization is not possible.
The choice of borrowing currency depends mainly on the opportunities offered by the various markets. This means that the selected currency is not necessarily that of the country in which the funds will be invested. Nonetheless, operating entities are financed essentially in their functional currencies.
In emerging countries, it is not always possible to borrow in local currency, either because funds are not available in local financial markets, or because the financial conditions are too onerous. In such a situation, the Group has to borrow in a different currency. Nonetheless, the Group considers opportunities to refinance its borrowings in emerging countries with local currency debt.
Derivatives are initially recognized at fair value at the date a derivative contract is entered into and are classified into the two categories described below.
Held for trading
The transactional risk is managed either by spot or forward contracts. Unless documented as hedging instruments (see above), derivative financial instruments are classified as held for trading.
In 2024, the notional amounts transacted to manage the transactional risk are:
ha long position of \u20ac368 million (compared to \u20ac271 million in 2023);
ha short position of \u20ac(239) million (compared to \u20ac(284) million in 2023);
hin comparison to 2023, the optimization of the cash centralization model led to a net long position increase of \u20ac142 million (mainly Chinese Yuan and US Dollar).
The following table details the notional amounts of the Group\u2019s derivatives contracts outstanding at the end of the period:
| \n In \u20ac million | \n\n Notional amount(1) | \n\n Fair value assets | \n\n Fair value liabilities | \n|||
|---|---|---|---|---|---|---|
| \n December 31 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n
| \n Held for trading long position | \n\n 368 | \n\n 271 | \n\n 1 | \n\n 1 | \n\n -1 | \n\n -1 | \n
| \n Held for trading short position | \n\n -239 | \n\n -284 | \n\n 1 | \n\n 2 | \n\n -3 | \n\n 0 | \n
| \n Total | \n\n 129 | \n\n -13 | \n\n 2 | \n\n 3 | \n\n -4 | \n\n -1 | \n
(1)Long/(short) positions (if the foreign exchange transaction does not involve the functional currency, both notional amounts are considered).
Cash flow hedge
The Group uses derivatives to hedge identified foreign exchange rate risks. It documents those as hedging instruments unless it hedges a recognized financial asset or liability when generally no cash flow hedge relationship is documented. Most hedges are transaction related.
At the end of 2024, the Group had mainly hedged highly probable sales in foreign currencies (short position) in a nominal amount of US$190 million (\u20ac183 million) and PLN55 million (\u20ac13 million). All cash flow hedge contracts that existed at the end of December 2024 will be settled within the next 12 months and will impact profit or loss during that period.
The following table details the notional amounts of Solvay\u2019s derivatives contracts outstanding at the end of the period:
Notional amounts
| \n In \u20ac million | \n\n December 31, 2024 | \n|||||||
|---|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument(1) | \n\n Notional amount of the risk exposure(1) | \n\n Percentage of exposure hedged | \n\n \n | \n\n Average hedge exchange rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Equity | \n\n Assets | \n\n Liabilities | \n||||||
| \n Cash flow hedges - Forecasted sales and purchases(3) | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n EUR/PLN | \n\n -13 | \n\n -20 | \n\n 65% | \n\n (2) | \n\n 4.37 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total EUR | \n\n -13 | \n\n -20 | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n USD/BRL | \n\n -51 | \n\n -85 | \n\n 60% | \n\n (2) | \n\n 5.40 | \n\n -2 | \n\n 0 | \n\n 2 | \n
| \n USD/CNY | \n\n -60 | \n\n -113 | \n\n 53% | \n\n (2) | \n\n 7.00 | \n\n -2 | \n\n 0 | \n\n 2 | \n
| \n USD/EUR | \n\n -42 | \n\n -82 | \n\n 52% | \n\n (2) | \n\n 1.10 | \n\n -2 | \n\n 0 | \n\n 2 | \n
| \n USD/MXN | \n\n -13 | \n\n -18 | \n\n 68% | \n\n (2) | \n\n 19.69 | \n\n -1 | \n\n 0 | \n\n 1 | \n
| \n USD/THB | \n\n -17 | \n\n -35 | \n\n 50% | \n\n (2) | \n\n 34.77 | \n\n 0 | \n\n 1 | \n\n 0 | \n
| \n Total USD | \n\n -183 | \n\n -332 | \n\n \n | \n\n \n | \n\n \n | \n\n -6 | \n\n 1 | \n\n 7 | \n
| \n Total | \n\n -196 | \n\n -352 | \n\n \n | \n\n \n | \n\n \n | \n\n -6 | \n\n 1 | \n\n 7 | \n
(1)Long/(short) positions.
(2)In compliance with Group Treasury Policy the percentage of hedged exposure will reach the progressive minimum compliance level of 60% in 2024.
(3)The hedging instruments are in the line item: \"Other Receivables\" and \"Other Liabilities\" in the statement of financial position.
| \n In \u20ac million | \n\n December 31, 2023 | \n|||||||
|---|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument(1) | \n\n Notional amount of the risk exposure(1) | \n\n Percentage of exposure hedged | \n\n \n | \n\n Average hedge exchange rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Equity | \n\n Assets | \n\n Liabilities | \n||||||
| \n Cash flow hedges - Forecasted sales and purchases(3) | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n||
| \n JPY/EUR | \n\n -1 | \n\n -1 | \n\n 50% | \n\n (2) | \n\n 126.94 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n JPY/USD | \n\n 0 | \n\n -3 | \n\n 4% | \n\n (4) | \n\n 145.33 | \n\n 1 | \n\n 1 | \n\n 0 | \n
| \n Total JPY | \n\n -1 | \n\n -4 | \n\n \n | \n\n \n | \n\n \n | \n\n 1 | \n\n 1 | \n\n 0 | \n
| \n USD/BRL | \n\n -63 | \n\n -106 | \n\n 60% | \n\n (2) | \n\n 4.78 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n USD/CNY | \n\n -68 | \n\n -138 | \n\n 49% | \n\n (2) | \n\n 6.92 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n USD/EUR | \n\n -24 | \n\n -37 | \n\n 66% | \n\n (2) | \n\n 1.13 | \n\n 2 | \n\n 1 | \n\n 1 | \n
| \n USD/MXN | \n\n -11 | \n\n -23 | \n\n 48% | \n\n (2) | \n\n 18.32 | \n\n 1 | \n\n 0 | \n\n 1 | \n
| \n USD/THB | \n\n -17 | \n\n -39 | \n\n 44% | \n\n (2) | \n\n 33.75 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Total USD | \n\n -184 | \n\n -342 | \n\n \n | \n\n \n | \n\n \n | \n\n 3 | \n\n 2 | \n\n 1 | \n
| \n Total | \n\n -185 | \n\n -346 | \n\n \n | \n\n \n | \n\n \n | \n\n 4 | \n\n 2 | \n\n 1 | \n
(1)Long/(short) positions.
(2)In compliance with Group Treasury Policy the percentage of hedged exposure will reach the progressive minimum compliance level of 60% in 2023.
(3)The hedging instruments are recorded in the line item: \"Other Receivables\" and \"Other Liabilities\" in the statement of financial position.
(4)In compliance with Group Treasury Policy the hedging will be stopped in 2024 due to the low materiality exposure.
Hedge relationships are seldom perfect. Therefore, ineffectiveness could arise with the result that changes in the fair value or cash flows of the hedged item that are attributable to a hedged risk and the hedging instrument do not offset within a period. The sources of hedge ineffectiveness that could potentially affect the hedging relationship during its term are listed below:
hA reduction in the amount of the forecast sales resulting in quantity or notional amount differences \u2013 the hedged item and hedging instrument are based on different quantities or notional amounts.
hA significant change in the credit risk of parties.
Timing differences \u2013 the hedged item and hedging instrument occur or are settled at different dates.
In 2024, no hedge ineffectiveness was recognized in the consolidated income statement.
See the Financial risk in the Management of risks section of this annual report for additional information on the interest rate risks management.
hInterest rate risk is managed at Group level.
hThe Group is exposed to interest rate risk because entities in the Group borrow funds at both fixed and floating interest rates. Interest rate risk is managed at Group level by maintaining an appropriate mix between fixed and floating rate borrowings.
Interest rate exposure by currency is summarized below:
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|---|
| \n Currency | \n\n Fixed rate | \n\n Floating rate | \n\n Total | \n\n Fixed rate | \n\n Floating rate | \n\n Total | \n
| \n Financial debt | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n EUR | \n\n -1,721 | \n\n -216 | \n\n -1,937 | \n\n -164 | \n\n -1,840 | \n\n -2,003 | \n
| \n USD | \n\n -146 | \n\n 0 | \n\n -146 | \n\n -137 | \n\n -2 | \n\n -139 | \n
| \n BGN | \n\n -1 | \n\n -21 | \n\n -22 | \n\n -1 | \n\n -1 | \n\n -2 | \n
| \n GBP | \n\n -8 | \n\n 0 | \n\n -8 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n KRW | \n\n -1 | \n\n -3 | \n\n -4 | \n\n -2 | \n\n -10 | \n\n -12 | \n
| \n THB | \n\n -8 | \n\n 0 | \n\n -9 | \n\n -9 | \n\n 0 | \n\n -10 | \n
| \n BRL | \n\n -5 | \n\n -2 | \n\n -7 | \n\n -8 | \n\n -2 | \n\n -10 | \n
| \n Other | \n\n -5 | \n\n -1 | \n\n -5 | \n\n -13 | \n\n -3 | \n\n -16 | \n
| \n Total | \n\n -1,895 | \n\n -243 | \n\n -2,138 | \n\n -333 | \n\n -1,859 | \n\n -2,192 | \n
| \n Cash and cash equivalents | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n EUR | \n\n \n | \n\n 271 | \n\n 271 | \n\n \n | \n\n 297 | \n\n 297 | \n
| \n USD | \n\n \n | \n\n 68 | \n\n 68 | \n\n \n | \n\n 138 | \n\n 138 | \n
| \n CAD | \n\n \n | \n\n 0 | \n\n 0 | \n\n \n | \n\n 2 | \n\n 2 | \n
| \n THB | \n\n \n | \n\n 30 | \n\n 30 | \n\n \n | \n\n 22 | \n\n 22 | \n
| \n SAR | \n\n \n | \n\n 5 | \n\n 5 | \n\n \n | \n\n 8 | \n\n 8 | \n
| \n BRL | \n\n \n | \n\n 74 | \n\n 74 | \n\n \n | \n\n 65 | \n\n 65 | \n
| \n CNY | \n\n \n | \n\n 23 | \n\n 23 | \n\n \n | \n\n 16 | \n\n 16 | \n
| \n KRW | \n\n \n | \n\n 6 | \n\n 6 | \n\n \n | \n\n 6 | \n\n 6 | \n
| \n JPY | \n\n \n | \n\n 4 | \n\n 4 | \n\n \n | \n\n 10 | \n\n 10 | \n
| \n Other | \n\n \n | \n\n 57 | \n\n 57 | \n\n \n | \n\n 20 | \n\n 20 | \n
| \n Total | \n\n \n | \n\n 539 | \n\n 539 | \n\n \n | \n\n 584 | \n\n 584 | \n
| \n Other financial instruments | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CNY | \n\n \n | \n\n 4 | \n\n 4 | \n\n \n | \n\n 12 | \n\n 12 | \n
| \n EUR | \n\n \n | \n\n 7 | \n\n 7 | \n\n \n | \n\n 65 | \n\n 65 | \n
| \n SAR | \n\n \n | \n\n 4 | \n\n 4 | \n\n \n | \n\n 4 | \n\n 4 | \n
| \n Other | \n\n \n | \n\n 1 | \n\n 1 | \n\n \n | \n\n 38 | \n\n 38 | \n
| \n Total | \n\n \n | \n\n 16 | \n\n 16 | \n\n \n | \n\n 118 | \n\n 118 | \n
| \n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Total | \n\n -1,895 | \n\n 312 | \n\n -1,583 | \n\n -333 | \n\n -1,156 | \n\n -1,489 | \n
At the end of 2024, \u20ac1,865 million of the Group\u2019s gross debt was at fixed-rate, and is largely comprised of:
hTwo senior bonds issued in April 2024 for a total of \u20ac1,500 million maturing in 2028 and 2031 (carrying amount of \u20ac1,492 million);
hIFRS 16 lease liability for a total of \u20ac306 million (carrying amount of \u20ac306 million).
The floating-rate debt is mainly comprised of a term loan for an amount of \u20ac200 million maturing in 2026 which is subject to interest rate hedging via interest rate swaps reducing the volatility to interest rate fluctuations (discussed below).
The impact of interest rate volatility at the end of 2024 compared to 2023 is the following:
| \n In \u20ac million | \n\n Sensitivity to a + 100bp movement in EUR market interest rates | \n\n Sensitivity to a - 100bp movement in EUR market interest rates | \n||
|---|---|---|---|---|
| \n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n|
| \n Profit or loss | \n\n 0 | \n\n -7 | \n\n 0 | \n\n 6 | \n
The sensitivity to interest rates volatility on the floating gross financial debt remains insignificant at the end of 2024 compared to 2023 thanks to the interest rates hedging. Most of the sensitivity disclosed in 2023 corresponds to the remaining volatility between the maximum interest rate payable (cap strike rate) and the minimum rate (floor strike rate) following the hedging of the bridge facility (\u20ac1,500 million) via zero cost interest collar.
Effects of IBOR market developments
All the new Liquidity Facilities (RCF, Bilateral lines) have been negotiated using only SOFR reference index and not IBOR anymore. This will not have any impact financially.
The ISDA's agreements were as well amended to include the SOFR.
All the other old agreements (before June 2023) still reflect IBOR on the agreements. Banks in that case will apply market standard approach and use the new SOFR reference rate for those agreements, therefore will not have an impact on our financial charges nor relations.
Interest rate risk hedged by instrument accounted for as held for trading
In 2024 and 2023, there are no outstanding interest rate instruments accounted for as held for trading.
Interest rate risk hedged by instrument accounted for as a hedging instrument in a cash flow hedge
In comparison to 2023, the remaining interest rate hedging is the hedge executed on the \u20ac200 million floating term loan.
All the other hedging relationships were settled following the repayment of the \u20ac1,500 million bridge facility drawdown and the issuance of the senior bonds totaling \u20ac1,500 million.
| \n Cash flow hedges on floating interests rates | \n\n December 31, 2024 | \n||||||
|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument | \n\n Notional amount of the risk exposure | \n\n Percentage of exposure hedged | \n\n Hedge interest rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Assets | \n\n Liabilities | \n||||||
| \n Floating rate debt (Euribor6M) | \n\n 200 | \n\n 200 | \n\n 100% | \n\n 3.52% | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n 1.99% | \n\n 0 | \n\n 0 | \n\n 0 | \n
As of December 31, 2024, the cash-flow hedge reserve for interest rate risk also includes an amount of \u20ac 31 million related to the unwound Flexiswap hedge instruments and is recycled to profit or loss over the duration of the two bonds. On the Statement of Financial Position, the Flexiswap hedging instruments were replaced by two new instruments classified as financial debt, presented within \"Other borrowings from third parties\" in Note F33.
| \n Cash flow hedges on floating interests rates | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|
| \n Notional amount of the instrument | \n\n Notional amount of the risk exposure | \n\n Percentage of exposure hedged | \n\n Hedge interest rate per risk category | \n\n Cash flow hedge reserve | \n\n Fair value of the hedging instrument | \n||
| \n Assets | \n\n Liabilities | \n||||||
| \n Floating rate debt (Euribor6M) | \n\n 200 | \n\n 200 | \n\n 100% | \n\n 3.52% | \n\n -2 | \n\n 0 | \n\n -2 | \n
| \n Floating rate debt (Euribor1M) | \n\n 1,500 | \n\n 1,500 | \n\n 100% | \n\n 3.55% | \n\n -1 | \n\n 0 | \n\n -1 | \n
| \n Future long-term refinancing (Euribor6M) | \n\n 750 | \n\n 750 | \n\n 100% | \n\n 3,20% + Fixed Margin | \n\n -25 | \n\n 0 | \n\n -25 | \n
| \n Future long-term refinancing (Euribor6M) | \n\n 750 | \n\n 750 | \n\n 100% | \n\n 3,05% + Fixed Margin | \n\n -33 | \n\n 0 | \n\n -33 | \n
Utility and CO2 price risks
The Group purchases a large portion of its coal, gas and electricity needs in Europe and the United States based on fluctuating liquid market indices. Moreover, the Group purchases raw materials with a price formula referring to market indices. In order to reduce the cost volatility, the Group has developed a policy for exchanging variable price against fixed price through derivative financial instruments. Most of these hedging instruments can be documented as hedging instruments of the underlying purchase contracts. Utility purchase contracts at fixed price with a physical delivery for use in the Group's operations are qualified as own use contracts and constitute a natural hedge. Those have not been included in this note.
Financial hedging of utility and CO2 emission rights price risks is managed centrally by Energy Services on behalf of the Group entities.
Energy Services also carries out trading transactions with respect to utility and CO2.
The following tables detail the notional principal amounts and fair values of utility and CO2 derivative financial instruments outstanding at the end of the reporting period:
| \n Held for trading | \n\n Notional amount of the instrument(1) | \n\n Notional amount of the instrument (in units) | \n\n Fair value of the instrument - Asset | \n\n Fair value of the instrument - Liability | \n|||||
|---|---|---|---|---|---|---|---|---|---|
| \n December 31 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n\n \n | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n
| \n In \u20ac million (except where indicated) | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Power | \n\n \n | \n\n 22 | \n\n \n | \n\n 118,090 | \n\n MWh | \n\n 0 | \n\n 0 | \n\n 0 | \n\n -13 | \n
| \n Standard Quality Gas | \n\n 1 | \n\n 21 | \n\n 10,220 | \n\n 811,174 | \n\n MWh | \n\n 1 | \n\n 0 | \n\n -1 | \n\n 0 | \n
| \n CO2 | \n\n 9 | \n\n 9 | \n\n 360,250 | \n\n 394,500 | \n\n Tons | \n\n 0 | \n\n 0 | \n\n -18 | \n\n -26 | \n
| \n Total | \n\n 10 | \n\n 52 | \n\n \n | \n\n \n | \n\n \n | \n\n 1 | \n\n 0 | \n\n -19 | \n\n -39 | \n
(1)The hedging instruments are located in the line item: \"Other Receivables\" and \"Other Liabilities\" in the consolidated statement of financial position.
The amounts presented in the tables hereafter include hedging needs of the GBUs of the Group that are sourced through Energy Services, and not the full Group utility hedging needs.
| \n \n | \n\n December 31, 2024 | \n|||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| \n Cash flow hedge | \n\n Notional amount of the instrument(1) | \n\n Notional amount of\u00a0the instrument (in units) | \n\n \n | \n\n Notional amount of the risk exposure | \n\n Notional amount of the risk exposure (in units) | \n\n \n | \n\n Percentage of exposure hedged | \n\n Average hedge price per\u00a0risk category | \n\n \n | \n\n Cash flow hedge reserve | \n\n Fair value of the instrument - Asset | \n\n Fair value of the instrument - Liability | \n
| \n In \u20ac million | \n||||||||||||
| \n Power | \n\n 224 | \n\n 2,205,840 | \n\n MWh | \n\n 417 | \n\n 3,772,347 | \n\n MWh | \n\n 58% | \n\n 102 | \n\n EUR/MWh | \n\n -29 | \n\n 0 | \n\n -29 | \n
| \n Standard Quality Gas | \n\n 361 | \n\n 13,463,715 | \n\n MWh | \n\n 1,056 | \n\n 26,558,004 | \n\n MWh | \n\n 51% | \n\n 22 | \n\n EUR/MWh | \n\n 35 | \n\n 53 | \n\n -18 | \n
| \n CO2(2) | \n\n 341 | \n\n 4,292,750 | \n\n Tons | \n\n 872 | \n\n 10,616,000 | \n\n Tons | \n\n 40% | \n\n 75 | \n\n EUR/Tons | \n\n -9 | \n\n 23 | \n\n -32 | \n
| \n Total | \n\n 926 | \n\n \n | \n\n \n | \n\n 2,345 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n -3 | \n\n 76 | \n\n -79 | \n
(1)The hedging instruments are in the line item: \"Other Receivables\" and \"Other Liabilities\" in the consolidated statement of financial position.
(2)Excluding the reserve frozen in OCI, following roll-over transactions (\u20ac(44) million).
| \n Cash flow hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| \n In \u20ac million | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n Power | \n\n 112 | \n\n 781,326 | \n\n MWh | \n\n 181 | \n\n 1,763,316 | \n\n MWh | \n\n 44% | \n\n 142 | \n\n EUR/MWh | \n\n 30 | \n\n 33 | \n\n -3 | \n
| \n Standard Quality Gas | \n\n 245 | \n\n 12,343,602 | \n\n MWh | \n\n 579 | \n\n 24,542,118 | \n\n MWh | \n\n 50% | \n\n 27 | \n\n EUR/MWh | \n\n -41 | \n\n 15 | \n\n -56 | \n
| \n CO2(2) | \n\n 553 | \n\n 3,469,500 | \n\n Tons | \n\n 801 | \n\n 9,230,909 | \n\n Tons | \n\n 38% | \n\n 87 | \n\n EUR/Tons | \n\n -43 | \n\n 0 | \n\n -44 | \n
| \n Total | \n\n 910 | \n\n \n | \n\n \n | \n\n 1,561 | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n -54 | \n\n 48 | \n\n -102 | \n
(1)The hedging instruments are located in the line item: \"Other Receivables\" and \"Other Liabilities\" in the consolidated statement of financial position.
(2)Excluding the reserve frozen in OCI, following roll-over transactions (\u20ac(33) million).
In 2024, the group changed its hedge relationship on CO2 emission rights price risk which resulted in the discontinuance of hedging cash flow hedge relationship at the end of December 2024. The related loss of \u20ac(38) million was recognized in other operating gains and losses in the consolidated income statement.
Fair value hedge
The Group covered a part of its CO2 emission rights in inventory by forward sales of CO2 emission rights to a related party. The Group qualifies this hedging strategy as fair value hedge. The change in fair value of forward sales is accounted for in profit and loss, concomitantly with the revaluation of the CO2 emission rights held in\u00a0inventory.
The Group has established a 1:1 hedge ratio for the underlying risk of the forward sales of CO2 emission rights to the related party that is identical to the hedged risk component.
The impact of the hedging instrument on the statement of financial position as at December 31, 2024, is as follows:
| \n \n | \n\n December 31, 2024 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n \n | \n\n -1 | \n\n Financial Instrument | \n\n \n | \n\n 0 | \n
| \n \n | \n\n December 31, 2024 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n 2 | \n\n \n | \n\n Inventories | \n\n 0 | \n\n \n | \n
| \n \n | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n \n | \n\n -2 | \n\n Financial Instrument | \n\n 1 | \n\n -1 | \n
| \n \n | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|
| \n \n | \n\n \n | \n\n Carrying amount | \n\n Balance sheet line item(s) | \n\n Change in fair value used for calculating hedge ineffectiveness | \n|||
| \n Notional | \n\n \n | \n\n Assets | \n\n Liabilities | \n\n \n | \n\n Assets | \n\n Liabilities | \n|
| \n In Tons | \n\n In \u20acmillion | \n\n In \u20acmillion | \n\n \n | \n\n \n | \n\n In \u20acmillion | \n\n \n | \n|
| \n Fair Value Hedge | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n\n \n | \n
| \n CO2 emission rights forwards | \n\n 25.000 | \n\n 0 | \n\n \n | \n\n 2 | \n\n Inventories | \n\n 1 | \n\n \n | \n
The sensitivities of commodity derivative financial instruments as of December 31, 2024, are presented below.
The sensitivities were defined based on the price levels and volatility levels of each commodity. These assumptions do not constitute an estimation of future market prices, and the sensitivities presented are not representative of future changes in Solvay's equity and results.
| \n In \u20acmillion | \n\n December 31, 2024 | \n||
|---|---|---|---|
| \n Price change | \n\n Other comprehensive income | \n\n Profit or loss | \n|
| \n Natural gas | \n\n +10\u20ac /MWh | \n\n -102 | \n\n 0 | \n
| \n Natural gas | \n\n -10\u20ac /MWh | \n\n 102 | \n\n 0 | \n
| \n Electricity | \n\n +30\u20ac /MWh | \n\n 66 | \n\n 0 | \n
| \n Electricity | \n\n -30\u20ac /MWh | \n\n -66 | \n\n 0 | \n
| \n CO2 emission rights | \n\n +5\u20ac /T | \n\n -21 | \n\n -2 | \n
| \n CO2 emission rights | \n\n -5\u20ac /T | \n\n 21 | \n\n 2 | \n
Performance Share Units Plan (PSU) and Restricted Share Units (RSU) risk on Solvay and Syensqo share price
The last cash settled PSU plan (granted in 2021) vested on 31/12/2023 and was paid out in June 2024. The PSU/RSU plans granted as from 2022 are equity settled. The RSU plan 2022 will deliver Solvay and Syensqo shares. The PSU/RSU plans 2023 and 2024 will deliver Solvay shares only. These PSU/RSU plans are hedged with treasury shares. However, in order to neutralize the volatility of the Syensqo share price, which will impact the liability valuation relating to the RSU plan 2022, the Group has entered into a hedge (equity forward transaction) covering 100% of the risk.
fAccounting policy
General
The Group classifies financial liabilities that arise from supplier finance arrangements within Trade and other payables in the statement of financial position if they have a similar nature and function to trade payables. This is the case if the supplier finance arrangement is part of the working capital used in the Group\u2019s normal operating cycle, the level of security provided is similar to trade payables and the terms of the liabilities that are part of the supply chain finance arrangement are not substantially different from the terms of trade payables that are not part of the arrangement. Cash flows related to liabilities arising from supplier finance arrangements that are classified in Trade and other payables in the consolidated statement of financial position are included in operating activities in the consolidated statement of cash flows.
First application in 2024
This disclosure requirement was introduced by the Amendments Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7), published in May 2023 by the IASB. The amendments are effective for periods beginning on or after 1 January 2024. In the year of initial application, the requirements only apply to the annual financial report and the disclosure does not need to provide the comparative figures.
Terms and conditions
The Group has established a supplier finance arrangement that is offered to some of the Group\u2019s key suppliers. Participation in the arrangement is at the suppliers\u2019 own discretion. Suppliers that participate in the supplier finance arrangement will receive early payment on invoices sent to the Group from the Group\u2019s external finance provider. If suppliers choose to receive early payment, they pay a fee to the finance provider, to which the Group is not a party. For the finance provider to pay the invoices, the goods must have been received or supplied and the invoices approved by the Group. Payments to suppliers ahead of the invoice due date are processed by the finance provider and, in all cases, the Group settles the original invoice by paying the finance provider in line with the original invoice maturity date described above.
The Group assesses each arrangement against indicators to determine if the liabilities which suppliers have sold to the partner bank under the supplier financing scheme continue to meet the definition of trade payables or should be classified as financial debt. On December 31, 2024 and 2023, all trade payables subject to the supplier finance arrangement meet the criteria of trade payables and are included in trade payables in the consolidated statement of financial position.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n\n January 1, 2023 | \n
|---|---|---|---|
| \n Carrying amount of financial liabilities | \n\n \n | \n\n \n | \n\n \n | \n
| \n Presented in trade and other payables | \n\n 62 | \n\n N/A | \n\n N/A | \n
| \n \u2022of which suppliers have received payment from finance provider | \n\n 47 | \n\n N/A | \n\n N/A | \n
| \n Range of payment due dates (days after the invoice date) | \n\n \n | \n\n \n | \n\n \n | \n
| \n Liabilities that are part of the arrangement | \n\n 102-106 days | \n\n N/A | \n\n N/A | \n
| \n Comparable trade payables that are not part of the arrangements | \n\n 45-49 days | \n\n N/A | \n\n N/A | \n
See the Financial risk in the Management of risks section of this annual report for additional information on the liquidity risk management.
Liquidity risk relates to Solvay\u2019s ability to service and refinance its debt (including notes issued) and to fund its operations.
This depends on its ability to generate cash from operations and not to overpay for acquisitions. In addition, external factors impacting the global liquidity markets could also make financing sources less accessible.
The Finance Committee gives its opinion on the appropriate liquidity risk management for the Group\u2019s short-, medium-, and long-term funding and liquidity management requirements.
The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecasts and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
The Group staggers the maturities of its financing sources over time in order to limit amounts to be refinanced each year.
The following tables detail the Group\u2019s remaining contractual maturity for its financial liabilities with contractual repayment periods.
The tables have been prepared using the discounted cash flows of financial liabilities, based on the earliest date on which the Group can be required to pay.
The following tables present discounted amounts (carrying amounts):
| \n In \u20ac million | \n\n December 31, 2024 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 809 | \n\n 809 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 107 | \n\n 107 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 111 | \n\n 98 | \n\n 13 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 21 | \n\n \n | \n\n 5 | \n\n 5 | \n\n 11 | \n
| \n Financial debt | \n\n 1,831 | \n\n 84 | \n\n 217 | \n\n 777 | \n\n 753 | \n
| \n Leasing debt | \n\n 306 | \n\n 70 | \n\n 36 | \n\n 92 | \n\n 108 | \n
| \n Total | \n\n 3,186 | \n\n 1,169 | \n\n 271 | \n\n 874 | \n\n 872 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 850 | \n\n 850 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 175 | \n\n 175 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 140 | \n\n 108 | \n\n 32 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 34 | \n\n \n | \n\n 12 | \n\n 2 | \n\n 20 | \n
| \n Financial debt | \n\n 1,885 | \n\n 148 | \n\n 1,711 | \n\n 23 | \n\n 3 | \n
| \n Leasing debt | \n\n 307 | \n\n 63 | \n\n 44 | \n\n 92 | \n\n 107 | \n
| \n Total | \n\n 3,390 | \n\n 1,344 | \n\n 1,799 | \n\n 117 | \n\n 130 | \n
The following tables present undiscounted amounts (nominal value):
| \n In \u20ac million | \n\n December 31, 2024 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 809 | \n\n 809 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 107 | \n\n 107 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 111 | \n\n 98 | \n\n 13 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 21 | \n\n \n | \n\n 5 | \n\n 5 | \n\n 11 | \n
| \n Financial debt | \n\n 1,842 | \n\n 84 | \n\n 219 | \n\n 781 | \n\n 757 | \n
| \n Leasing debt | \n\n 306 | \n\n 70 | \n\n 36 | \n\n 92 | \n\n 108 | \n
| \n Total | \n\n 3,196 | \n\n 1,169 | \n\n 273 | \n\n 878 | \n\n 876 | \n
| \n Interests on financial debt and lease liabilities | \n\n 412 | \n\n 75 | \n\n 71 | \n\n 174 | \n\n 91 | \n
| \n Total outflows of cash | \n\n 3,608 | \n\n 1,244 | \n\n 345 | \n\n 1,052 | \n\n 967 | \n
| \n In \u20ac million | \n\n December 31, 2023 | \n||||
|---|---|---|---|---|---|
| \n Outflows of cash: | \n\n Total | \n\n Within one year | \n\n In year two | \n\n In years three to five | \n\n Beyond five years | \n
| \n Trade payables | \n\n 850 | \n\n 850 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Dividends payables | \n\n 175 | \n\n 175 | \n\n \n | \n\n \n | \n\n \n | \n
| \n Financial instruments - operational | \n\n 140 | \n\n 108 | \n\n 32 | \n\n \n | \n\n \n | \n
| \n Other non-current liabilities | \n\n 34 | \n\n \n | \n\n 12 | \n\n 2 | \n\n 20 | \n
| \n Financial debt | \n\n 1,886 | \n\n 148 | \n\n 1,711 | \n\n 23 | \n\n 4 | \n
| \n Leasing debt | \n\n 307 | \n\n 63 | \n\n 44 | \n\n 92 | \n\n 107 | \n
| \n Total | \n\n 3,391 | \n\n 1,344 | \n\n 1,799 | \n\n 117 | \n\n 131 | \n
| \n Interests on financial debt and lease liabilities | \n\n 179 | \n\n 82 | \n\n 61 | \n\n 17 | \n\n 19 | \n
| \n Total outflows of cash | \n\n 3,570 | \n\n 1,426 | \n\n 1,860 | \n\n 134 | \n\n 150 | \n
Solvay\u2019s liquidity amounts to \u20ac2.0 billion including \u20ac0.6 billion of cash and cash equivalents on the statement of financial position and \u20ac1.4 billion of committed fully undrawn credit facilities (\u20ac1.1 billion multilateral RCF maturing in 2029 with extension possibility, and \u20ac0.3 billion bilateral RCF maturing in 2027 with extension possibilities) unused at the end of December 2024.
In addition, Solvay has access to a Belgian Treasury Bill program for \u20ac1.0 billion (no outstanding balance on December 31, 2024). The program is covered by a back-up credit line.
See below (section F32.E) for further details on supplier financing programs within trade payables.
NOTE F33
Net indebtedness
The Group\u2019s net indebtedness is the balance between its financial debts and other financial instruments, and cash and cash equivalents.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Financial debt | \n\n 2,138 | \n\n 2,192 | \n
| \n Cash and cash equivalents | \n\n -539 | \n\n -584 | \n
| \n Other financial instruments | \n\n -16 | \n\n -118 | \n
| \n Net indebtedness | \n\n 1,583 | \n\n 1,489 | \n
The financial debt at the end of 2024 includes:
htwo senior bonds for a total of \u20ac1,500 million (\u20ac750 million maturing in 2028 and \u20ac750 million maturing in 2031);
ha term loan for an amount of \u20ac200 million;
hthe lease debt IFRS16 \u20ac306 million;
hother financial debt (\u20ac140 million, excluding lease debt) mainly in current financial debt.
Solvay is Investment Grade rating BBB-/A3 (stable outlook) by Standard & Poor\u2019s (as of December 4, 2024).
| \n In \u20ac million (except where indicated) | \n\n December 31, 2024 | \n\n December 31, 2023 | \n||||||
|---|---|---|---|---|---|---|---|---|
| \n Nominal amount | \n\n Coupon | \n\n Maturity | \n\n Secured | \n\n Amount at amortized cost | \n\n Fair value | \n\n Amount at amortized cost | \n\n Fair value | \n|
| \n 2028 Bonds (issuance \u20ac 750 million) | \n\n 750 | \n\n 3.875% | \n\n 2028 | \n\n No | \n\n 746 | \n\n 766 | \n\n n/a | \n\n n/a | \n
| \n 2031 Bonds (issuance \u20ac 750 million) | \n\n 750 | \n\n 4.250% | \n\n 2031 | \n\n No | \n\n 746 | \n\n 774 | \n\n n/a | \n\n n/a | \n
| \n Total senior \u20ac notes | \n\n 1,500 | \n\n \n | \n\n \n | \n\n \n | \n\n 1,492 | \n\n 1,540 | \n\n 0 | \n\n 0 | \n
| \n Credit lines Drawdown (\u20ac 1,500 million) | \n\n \n | \n\n Floating rate | \n\n 2025 | \n\n No | \n\n 0 | \n\n 0 | \n\n 1,500 | \n\n 1,500 | \n
| \n Total Bridge facilities(1) | \n\n 0 | \n\n \n | \n\n \n | \n\n \n | \n\n 0 | \n\n 0 | \n\n 1,500 | \n\n 1,500 | \n
| \n Term loan (\u20ac 200 million) | \n\n 200 | \n\n Floating rate | \n\n 2026 | \n\n \n | \n\n 200 | \n\n 200 | \n\n 200 | \n\n 200 | \n
| \n Other borrowings from third parties | \n\n 140 | \n\n \n | \n\n \n | \n\n \n | \n\n 140 | \n\n 140 | \n\n 185 | \n\n 185 | \n
| \n Lease debts IFRS16 | \n\n 306 | \n\n \n | \n\n \n | \n\n \n | \n\n 306 | \n\n 306 | \n\n 307 | \n\n 307 | \n
| \n Total | \n\n 2,146 | \n\n \n | \n\n \n | \n\n \n | \n\n 2,138 | \n\n 2,186 | \n\n 2,192 | \n\n 2,192 | \n
(1)In 2023, the outstanding Solvay bridge facility had an initial maturity in October 2024, but the company had an unconditional right to extend two times the maturity by 6 months, until October 2025. The bridge facility was therefore classified as non-current.
There are no instances of default on the above-mentioned financial debts. There are no financial covenants breach, neither on Solvay SA/NV, nor on any of the Group\u2019s holding companies.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Non-current other financial instruments | \n\n 0 | \n\n 0 | \n
| \n Current other financial instruments | \n\n 16 | \n\n 119 | \n
| \n Currency swaps | \n\n 1 | \n\n 2 | \n
| \n Other marketable securities > 3 months | \n\n 4 | \n\n 50 | \n
| \n Other current financial assets | \n\n 11 | \n\n 67 | \n
| \n Other financial instruments | \n\n 16 | \n\n 119 | \n
The other marketable securities >3 months include the bank drafts position.
In 2024, the decrease in other current financial assets is explained by the transfers of CO2 derivative financial instruments to the OTC market (previously traded in the exchange market). As a consequence, margin calls of Energy Services for instruments with a negative fair value that represented collateral for the obligations decreased.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Cash | \n\n 211 | \n\n 300 | \n
| \n Term deposits | \n\n 328 | \n\n 285 | \n
| \n Cash and cash equivalents | \n\n 539 | \n\n 584 | \n
By their nature, the carrying amount of cash and cash equivalents is equal to, or a very good proxy of, its fair value.
As at December 31, 2024 and December 31, 2023, cash and cash equivalents were not subject to statutory, regulatory, or contractual restrictions and there were no material limitations on the ability to transfer cash or cash-equivalents within the group.
| \n In \u20ac million | \n\n Dec 31, 2023 | \n\n 2024 | \n|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| \n Total | \n\n Cash flows from increase of borrowings | \n\n Cash flows from repayment of borrowings | \n\n Changes in foreign exchange rates | \n\n Changes in other current financial assets | \n\n Other in financing cash flows | \n\n Transfer from non-current to current | \n\n Payment of lease liabilities | \n\n Other | \n\n Partial Demerger | \n\n Total | \n|
| \n Bonds | \n\n - | \n\n 1,492 | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n 1,492 | \n
| \n Other non-current debts | \n\n 1,737 | \n\n - | \n\n -1,500 | \n\n 0 | \n\n - | \n\n - | \n\n -11 | \n\n - | \n\n 30 | \n\n 0 | \n\n 255 | \n
| \n Long-term finance lease debt | \n\n 243 | \n\n - | \n\n - | \n\n 7 | \n\n - | \n\n - | \n\n -70 | \n\n - | \n\n 55 | \n\n - | \n\n 236 | \n
| \n Interests rate swaps | \n\n 2 | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n 0 | \n\n - | \n\n 2 | \n
| \n Non-current financial debt | \n\n 1,983 | \n\n 1,492 | \n\n -1,500 | \n\n 7 | \n\n - | \n\n - | \n\n -81 | \n\n - | \n\n 85 | \n\n 0 | \n\n 1,985 | \n
| \n Current financial debt | \n\n 211 | \n\n 191 | \n\n -242 | \n\n 0 | \n\n - | \n\n - | \n\n 81 | \n\n -64 | \n\n -22 | \n\n 0 | \n\n 156 | \n
| \n Total financial debt | \n\n 2,192 | \n\n 1,683 | \n\n -1,742 | \n\n 7 | \n\n - | \n\n - | \n\n - | \n\n -64 | \n\n 63 | \n\n 0 | \n\n 2,138 | \n
| \n Other Non-current financial instruments | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n\n - | \n
| \n Currency swaps | \n\n -2 | \n\n - | \n\n - | \n\n 0 | \n\n - | \n\n - | \n\n - | \n\n - | \n\n 1 | \n\n - | \n\n -1 | \n
| \n Other marketable securities > 3 months | \n\n -50 | \n\n - | \n\n - | \n\n 0 | \n\n 9 | \n\n 38 | \n\n - | \n\n - | \n\n - | \n\n - | \n\n -4 | \n
| \n Other current financial assets | \n\n -67 | \n\n - | \n\n - | \n\n 0 | \n\n 49 | \n\n - | \n\n - | \n\n - | \n\n 7 | \n\n - | \n\n -11 | \n
| \n Other financial instruments | \n\n -119 | \n\n - | \n\n - | \n\n 0 | \n\n 58 | \n\n 38 | \n\n - | \n\n - | \n\n 8 | \n\n - | \n\n -16 | \n
| \n Total | \n\n \n | \n\n 1,683 | \n\n -1,742 | \n\n 7 | \n\n 58 | \n\n 38 | \n\n - | \n\n -64 | \n\n 70 | \n\n 0 | \n\n 50 | \n
The financial debt decreased from \u20ac2,192 million at the end of 2023 to \u20ac2,138 million at the end of 2024.
The non-current financial debt in 2024 is stable compared to 2023. It is explained by:
hthe increase of \u20ac1,584 million, which is mainly explained by:
\u2014the issuance of two senior bonds for a total of \u20ac1,492 million,
\u2014two new instruments classified as financial debt for \u20ac30 million (non-current portion) following the unwinding of flexi-swaps transacted in 2023,
\u2014the increase of the long-term lease (IFRS 16) debt for \u20ac50 million,
\u2014the change in foreign exchange rates for \u20ac7 million.
hthe decrease of \u20ac(1,581) million, which is mainly explained by:
\u2014the repayment of \u20ac(1,500) million bridge facility set up at the end of 2023 in relation to the Partial Demerger
\u2014the transfer to current financial debt for \u20ac(70) million mainly on lease liabilities
The current financial debt decreased by \u20ac(56) million, is mainly resulting from:
hthe increase in borrowings of \u20ac191 million mainly explained by the drawdowns on credit lines of \u20ac185 million
hthe decrease of \u20ac(264) million explained by the repayment of the drawdowns on credit lines for \u20ac(185) million, the repayment of a current loan payable for \u20ac(52)\u00a0million, and net impact of unwinding of flexi-swaps transacted in 2023 for \u20ac(22) million
hthe transfer from non-current financial debt for \u20ac81 million mainly on lease liabilities
hthe repayment of lease (IFRS 16) debts of \u20ac(64) million.
NOTE F34
Other liabilities (current)
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Wages and benefits debts | \n\n 123 | \n\n 125 | \n
| \n VAT and other taxes | \n\n 105 | \n\n 107 | \n
| \n Social security | \n\n 18 | \n\n 29 | \n
| \n Financial instruments - operational | \n\n 98 | \n\n 108 | \n
| \n Insurance premiums | \n\n 14 | \n\n 31 | \n
| \n Advances from customers | \n\n 21 | \n\n 30 | \n
| \n Long Term Incentive - current part | \n\n 17 | \n\n 31 | \n
| \n Other | \n\n 61 | \n\n 126 | \n
| \n Other current liabilities | \n\n 458 | \n\n 585 | \n
The decrease in \u201cOther\u201d when compared to 2023 is primarily related to the Insurance reimbursement of \u20ac32 million (payable to Syensqo) which was outstanding at December 31, 2023 (see note F25 Other receivables) and paid in 2024.
Financial instruments \u2013 operational include held for trading and cash flow hedge derivatives (see note F32 Overview of financial instruments).
NOTE F34
Other liabilities (current)
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Wages and benefits debts | \n\n 123 | \n\n 125 | \n
| \n VAT and other taxes | \n\n 105 | \n\n 107 | \n
| \n Social security | \n\n 18 | \n\n 29 | \n
| \n Financial instruments - operational | \n\n 98 | \n\n 108 | \n
| \n Insurance premiums | \n\n 14 | \n\n 31 | \n
| \n Advances from customers | \n\n 21 | \n\n 30 | \n
| \n Long Term Incentive - current part | \n\n 17 | \n\n 31 | \n
| \n Other | \n\n 61 | \n\n 126 | \n
| \n Other current liabilities | \n\n 458 | \n\n 585 | \n
The decrease in \u201cOther\u201d when compared to 2023 is primarily related to the Insurance reimbursement of \u20ac32 million (payable to Syensqo) which was outstanding at December 31, 2023 (see note F25 Other receivables) and paid in 2024.
Financial instruments \u2013 operational include held for trading and cash flow hedge derivatives (see note F32 Overview of financial instruments).
NOTE F34
Other liabilities (current)
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Wages and benefits debts | \n\n 123 | \n\n 125 | \n
| \n VAT and other taxes | \n\n 105 | \n\n 107 | \n
| \n Social security | \n\n 18 | \n\n 29 | \n
| \n Financial instruments - operational | \n\n 98 | \n\n 108 | \n
| \n Insurance premiums | \n\n 14 | \n\n 31 | \n
| \n Advances from customers | \n\n 21 | \n\n 30 | \n
| \n Long Term Incentive - current part | \n\n 17 | \n\n 31 | \n
| \n Other | \n\n 61 | \n\n 126 | \n
| \n Other current liabilities | \n\n 458 | \n\n 585 | \n
The decrease in \u201cOther\u201d when compared to 2023 is primarily related to the Insurance reimbursement of \u20ac32 million (payable to Syensqo) which was outstanding at December 31, 2023 (see note F25 Other receivables) and paid in 2024.
Financial instruments \u2013 operational include held for trading and cash flow hedge derivatives (see note F32 Overview of financial instruments).
NOTE F35
Commitments to acquire property, plant and\u00a0equipment and\u00a0intangible\u00a0assets
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Commitments to acquire property, plant and equipment and intangible assets | \n\n 101 | \n\n 124 | \n
The amount mainly relates to commitments for the acquisition of industrial property, plant and equipment.
The amount in 2023 was higher compared to 2024, mainly due to spending on Soda Ash capacity increase in Green River site throughout 2024.
NOTE F36
Contingent liabilities and financial guarantees
fAccounting policy
A contingent liability is:
(a)a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group; or
(b) a present obligation that arises from past events but is not recognized because:
(i)it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or
(ii)the amount of the obligation cannot be measured with sufficient reliability
Contingent liabilities are not recognized in the consolidated financial statements, except if they arise from a business combination. They are disclosed unless the possibility of an outflow of economic benefits is remote.
Financial guarantees are contracts that require the Group to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.
To avoid double counting, only guarantees in excess of liabilities recognized or disclosures made elsewhere in the Group's consolidated financial statements are disclosed in this note. Regarding financial guarantees, all financial guarantees of the Group are presented in this note.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Guarantees for pensions | \n\n 58 | \n\n 55 | \n
| \n Environmental contingent liabilities | \n\n 210 | \n\n 271 | \n
| \n Guarantees on Cytec 2025 Bonds(1) | \n\n 157 | \n\n 151 | \n
| \n Contingent liabilities | \n\n 425 | \n\n 477 | \n
(1)Guarantee on Cytec 2025 Bonds \u2013 see the comment on financial guarantees below
Generally, in line with good business practice, we are not reporting any pending or threatened proceeding, which has not matured, and where the probability of existing or future exposure is unlikely or uncertain, where financial impact is not estimable and for which we are not able to quantify contingent liabilities.
The contingent liabilities of \u20ac210 million mentioned above relate to environmental remediation matters for possible obligations arising from past events. The existence of these obligations will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the Group's control. While the nominal cashflows can be estimated with sufficient reliability, there remains a degree of uncertainty.
The Group has also present obligations that cannot be reliably estimated and are disclosed thereafter :
hIn Pont de Claix site, in France, Solvay has been prescribed to remedy several historical impacts in the subsoil and is proceeding accordingly. Related amounts have been provisioned (see note F31 - Environmental provisions). In a certain number of locations, impacts cannot be characterized nor treated due to the presence of several units in operations by third parties. The corresponding estimate cannot therefore be available. Moreover, in Pont de Claix, Solvay is closely monitoring the evolution of the situation with Vencorex since this company went into Redressement Judiciaire in September 2024. The business operated by Vencorex in Pont de Claix was acquired from Solvay in 2008. However, Solvay has retained energy production units, ownership of the subsoil and is implementing certain remediation activities. Those operations may be impacted by the current situation.
hSalindres site, France: Following the announcement of the shutdown of the site, Solvay has six months to prepare a detailed study of remediation to be undertaken for the attention of the French regional environmental agency (DREAL). Some of the remediations have already been provisioned (see note F31 - Environmental provisions) as their costs could be reliably estimated. However, some areas of the site will require further analyses to determine if additional remediations are needed and their related cost.
hThe Group has also obligations related to its Soda Ash facilities, specifically for the closure and remediation of major basins and dykes in Europe and the US, for which it is not yet possible to estimate the impact of the prescriptions in the future.
Rosignano site, Italy: The Public Prosecutor\u2019s Office of the Criminal Court of Livorno, Italy, initiated preliminary criminal investigations in 2019 regarding the alleged contamination of certain water tables outside our site and in our former landfill of Rosignano, Italy site. These procedures are still ongoing, and Solvay is working closely with Authorities to resolve these cases.
In Bulgaria, Solvay Sodi AD, a subsidiary of Solvay, is subject to certain state-imposed obligations for emergency oil stocks (reserves) for 2021 through 2023, for which Solvay was not able to comply. As a result, the Bulgarian authority imposed the fines for 2021 and 2022 on Solvay Sodi AD of approximately \u20ac15 million for our share of the penalties which were fully provisioned. For 2023, the order has been suspended, and no fine has been imposed and no provision has been recognized.\u00a0 Should this suspension be lifted, an additional penalty of \u20ac9 million may be imposed on Solvay Sodi AD. Solvay Sodi AD has brought a lawsuit to contest these fines and is seeking relief through national authorities pleading that the existing Bulgarian emergency stock system is not compatible with the EU law and, in its current form, the obligations for emergency oil reserves should apply only to companies trading in crude oil and liquid fuels. Starting from July 2024, Solvay Sodi AD complies with the requirements regarding emergency oil stocks.
The 3.95% Senior Notes due 2025 issued by Cytec Industries Inc. (the \u201cCytec 2025 Bonds\u201d) were transferred to Syensqo SA/NV with Cytec Industries Inc. as of December 8, 2023, for US$163.5 million (equivalent to \u20ac157.4 million euros at December 31, 2024). A counter guarantee was issued from Syensqo SA/NV in favor of Solvay SA/NV as Solvay SA/NV remained the original guarantor. As Syensqo SA/NV, the ultimate parent of Cytec Industries, Inc. is an investment grade company and due to the short period of time before the bonds are due to be repaid, the Group deemed risk of default to be remote, and as such no provision was recorded.
Syensqo SA/NV redeemed these Senior Notes in February 2025. The guarantee was therefore released at that time.
The guarantee for pensions is related to the main UK Pension Funds (\u20ac58 million) \u2013 see note F32. It corresponds to the recognized plan asset surplus on December\u00a031, 2024, or the amount by which the guarantee exceeds the recognized pension liability (on December 31, 2023). This guarantee applies to the pension liability measured in accordance with the local UK regulatory basis (prudential basis) with an allocation for market risk, which result in a higher measurement value compared to the IAS 19 requirements. The probability of the guarantees being called is considered to be remote.
NOTE F35
Commitments to acquire property, plant and\u00a0equipment and\u00a0intangible\u00a0assets
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Commitments to acquire property, plant and equipment and intangible assets | \n\n 101 | \n\n 124 | \n
The amount mainly relates to commitments for the acquisition of industrial property, plant and equipment.
The amount in 2023 was higher compared to 2024, mainly due to spending on Soda Ash capacity increase in Green River site throughout 2024.
NOTE F36
Contingent liabilities and financial guarantees
fAccounting policy
A contingent liability is:
(a)a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group; or
(b) a present obligation that arises from past events but is not recognized because:
(i)it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or
(ii)the amount of the obligation cannot be measured with sufficient reliability
Contingent liabilities are not recognized in the consolidated financial statements, except if they arise from a business combination. They are disclosed unless the possibility of an outflow of economic benefits is remote.
Financial guarantees are contracts that require the Group to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.
To avoid double counting, only guarantees in excess of liabilities recognized or disclosures made elsewhere in the Group's consolidated financial statements are disclosed in this note. Regarding financial guarantees, all financial guarantees of the Group are presented in this note.
NOTE F36
Contingent liabilities and financial guarantees
fAccounting policy
A contingent liability is:
(a)a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group; or
(b) a present obligation that arises from past events but is not recognized because:
(i)it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or
(ii)the amount of the obligation cannot be measured with sufficient reliability
Contingent liabilities are not recognized in the consolidated financial statements, except if they arise from a business combination. They are disclosed unless the possibility of an outflow of economic benefits is remote.
Financial guarantees are contracts that require the Group to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.
To avoid double counting, only guarantees in excess of liabilities recognized or disclosures made elsewhere in the Group's consolidated financial statements are disclosed in this note. Regarding financial guarantees, all financial guarantees of the Group are presented in this note.
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Guarantees for pensions | \n\n 58 | \n\n 55 | \n
| \n Environmental contingent liabilities | \n\n 210 | \n\n 271 | \n
| \n Guarantees on Cytec 2025 Bonds(1) | \n\n 157 | \n\n 151 | \n
| \n Contingent liabilities | \n\n 425 | \n\n 477 | \n
(1)Guarantee on Cytec 2025 Bonds \u2013 see the comment on financial guarantees below
Generally, in line with good business practice, we are not reporting any pending or threatened proceeding, which has not matured, and where the probability of existing or future exposure is unlikely or uncertain, where financial impact is not estimable and for which we are not able to quantify contingent liabilities.
The contingent liabilities of \u20ac210 million mentioned above relate to environmental remediation matters for possible obligations arising from past events. The existence of these obligations will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the Group's control. While the nominal cashflows can be estimated with sufficient reliability, there remains a degree of uncertainty.
The Group has also present obligations that cannot be reliably estimated and are disclosed thereafter :
hIn Pont de Claix site, in France, Solvay has been prescribed to remedy several historical impacts in the subsoil and is proceeding accordingly. Related amounts have been provisioned (see note F31 - Environmental provisions). In a certain number of locations, impacts cannot be characterized nor treated due to the presence of several units in operations by third parties. The corresponding estimate cannot therefore be available. Moreover, in Pont de Claix, Solvay is closely monitoring the evolution of the situation with Vencorex since this company went into Redressement Judiciaire in September 2024. The business operated by Vencorex in Pont de Claix was acquired from Solvay in 2008. However, Solvay has retained energy production units, ownership of the subsoil and is implementing certain remediation activities. Those operations may be impacted by the current situation.
hSalindres site, France: Following the announcement of the shutdown of the site, Solvay has six months to prepare a detailed study of remediation to be undertaken for the attention of the French regional environmental agency (DREAL). Some of the remediations have already been provisioned (see note F31 - Environmental provisions) as their costs could be reliably estimated. However, some areas of the site will require further analyses to determine if additional remediations are needed and their related cost.
hThe Group has also obligations related to its Soda Ash facilities, specifically for the closure and remediation of major basins and dykes in Europe and the US, for which it is not yet possible to estimate the impact of the prescriptions in the future.
Rosignano site, Italy: The Public Prosecutor\u2019s Office of the Criminal Court of Livorno, Italy, initiated preliminary criminal investigations in 2019 regarding the alleged contamination of certain water tables outside our site and in our former landfill of Rosignano, Italy site. These procedures are still ongoing, and Solvay is working closely with Authorities to resolve these cases.
In Bulgaria, Solvay Sodi AD, a subsidiary of Solvay, is subject to certain state-imposed obligations for emergency oil stocks (reserves) for 2021 through 2023, for which Solvay was not able to comply. As a result, the Bulgarian authority imposed the fines for 2021 and 2022 on Solvay Sodi AD of approximately \u20ac15 million for our share of the penalties which were fully provisioned. For 2023, the order has been suspended, and no fine has been imposed and no provision has been recognized.\u00a0 Should this suspension be lifted, an additional penalty of \u20ac9 million may be imposed on Solvay Sodi AD. Solvay Sodi AD has brought a lawsuit to contest these fines and is seeking relief through national authorities pleading that the existing Bulgarian emergency stock system is not compatible with the EU law and, in its current form, the obligations for emergency oil reserves should apply only to companies trading in crude oil and liquid fuels. Starting from July 2024, Solvay Sodi AD complies with the requirements regarding emergency oil stocks.
The 3.95% Senior Notes due 2025 issued by Cytec Industries Inc. (the \u201cCytec 2025 Bonds\u201d) were transferred to Syensqo SA/NV with Cytec Industries Inc. as of December 8, 2023, for US$163.5 million (equivalent to \u20ac157.4 million euros at December 31, 2024). A counter guarantee was issued from Syensqo SA/NV in favor of Solvay SA/NV as Solvay SA/NV remained the original guarantor. As Syensqo SA/NV, the ultimate parent of Cytec Industries, Inc. is an investment grade company and due to the short period of time before the bonds are due to be repaid, the Group deemed risk of default to be remote, and as such no provision was recorded.
Syensqo SA/NV redeemed these Senior Notes in February 2025. The guarantee was therefore released at that time.
The guarantee for pensions is related to the main UK Pension Funds (\u20ac58 million) \u2013 see note F32. It corresponds to the recognized plan asset surplus on December\u00a031, 2024, or the amount by which the guarantee exceeds the recognized pension liability (on December 31, 2023). This guarantee applies to the pension liability measured in accordance with the local UK regulatory basis (prudential basis) with an allocation for market risk, which result in a higher measurement value compared to the IAS 19 requirements. The probability of the guarantees being called is considered to be remote.
NOTE F37
Related parties
Balances and transactions between Solvay SA/NV and (a) its subsidiaries and (b) its joint operations for the Group\u2019s share of the respective joint operations, which are related parties of Solvay SA/NV, have been eliminated in consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below.
| \n In \u20ac million | \n\n Sale of goods | \n\n Purchase of goods | \n||
|---|---|---|---|---|
| \n \n | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n
| \n Associates | \n\n 6 | \n\n 12 | \n\n -54 | \n\n -35 | \n
| \n Joint ventures | \n\n 2 | \n\n 8 | \n\n 0 | \n\n -3 | \n
| \n Other related parties | \n\n 11 | \n\n 23 | \n\n -18 | \n\n -45 | \n
| \n Total | \n\n 19 | \n\n 43 | \n\n -72 | \n\n -82 | \n
| \n In \u20ac million | \n\n Amounts owed by related parties | \n\n Amounts owed to related parties | \n||
|---|---|---|---|---|
| \n December 31 | \n\n 2024 | \n\n 2023 | \n\n 2024 | \n\n 2023 | \n
| \n Associates | \n\n 0 | \n\n 0 | \n\n 7 | \n\n 9 | \n
| \n Joint ventures | \n\n 0 | \n\n 0 | \n\n 0 | \n\n 0 | \n
| \n Other related parties | \n\n 48 | \n\n 14 | \n\n 5 | \n\n 4 | \n
| \n Total | \n\n 48 | \n\n 14 | \n\n 12 | \n\n 13 | \n
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Loans to associates | \n\n 1 | \n\n 1 | \n
| \n Loans to other related parties | \n\n 18 | \n\n 18 | \n
| \n Total | \n\n 19 | \n\n 19 | \n
| \n Loans from other related parties | \n\n -3 | \n\n -3 | \n
Key management personnel are composed of all members of the Board of Directors and members of the Executive Leadership Team.
Amounts due in respect of the year (compensation) and liabilities existing at the end of the year in the consolidated statement of financial position:
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Wages, charges and short-term benefits | \n\n 2 | \n\n 6 | \n
| \n Long-term benefits | \n\n 0 | \n\n 0 | \n
| \n Cash-settled share-based payments liability | \n\n 0 | \n\n 1 | \n
| \n Total | \n\n 2 | \n\n 7 | \n
In 2024, there are no cash-settled share-based payments liability anymore, as all plans are equity-settled in 2024, see note F29 \u2013 share-based payments.
| \n In \u20ac million | \n\n 2024 | \n\n 2023 | \n
|---|---|---|
| \n Wages, charges and short-term benefits | \n\n -5 | \n\n -35 | \n
| \n Long-term benefits | \n\n -1 | \n\n -2 | \n
| \n Share-based payments expenses | \n\n -1 | \n\n -4 | \n
| \n Total | \n\n -7 | \n\n -41 | \n
The decrease in wages, charges and short-term benefits compared to 2023 mainly relates to the short-term incentives associated with the Partial Demerger.
Key management personnel are composed of all members of the Board of Directors and members of the Executive Leadership Team.
Amounts due in respect of the year (compensation) and liabilities existing at the end of the year in the consolidated statement of financial position:
| \n In \u20ac million | \n\n December 31, 2024 | \n\n December 31, 2023 | \n
|---|---|---|
| \n Wages, charges and short-term benefits | \n\n 2 | \n\n 6 | \n
| \n Long-term benefits | \n\n 0 | \n\n 0 | \n
| \n Cash-settled share-based payments liability | \n\n 0 | \n\n 1 | \n
| \n Total | \n\n 2 | \n\n 7 | \n
In 2024, there are no cash-settled share-based payments liability anymore, as all plans are equity-settled in 2024, see note F29 \u2013 share-based payments.
Note F38
Dividends proposed for distribution
The Board of Directors will propose to the General Shareholders\u2019 Meeting a gross dividend of \u20ac2.43 per share.
Taking into account the dividend advance payment distributed in January 2025, of \u20ac0.97 per share, the dividends proposed for distribution, but not yet recognized as a distribution to equity holders, amount to \u20ac154 million.
Note F39
Events after the reporting period
fAccounting policy
Events after the reporting period which provide evidence of conditions that existed at the end of the reporting period (adjusting events) are recognized in the consolidated financial statements. Events indicative of conditions that arose after the reporting period are non-adjusting events and are disclosed in the notes if material.
Syensqo SA/NV has publicly declared its intention to reimburse the 3.95% Senior Notes issued by Cytec Industries Inc. by February 1, 2025. As an outcome of the Liability Management process undertaken for the partial Demerger, Solvay SA/NV remained the original guarantor of the bonds while a counter guarantee was issued from Syensqo SA/NV in favor of Solvay SA/NV.
Syensqo SA/NV redeemed these Senior Notes on February 1, 2025. The guarantee was therefore released on that date, following the reimbursement by Syensqo.
Please refer to Note F36 for further details.
In 2016, Solvay initiated infringement proceedings against a competitor for infringement of one of its patents for automotive catalyst materials. In late February 2025, the court awarded the Group \u20ac10.3 million in damages and additional procedural interest for the related damages case. The court decision may be appealed by either party within one month. The damages and related interest are considered contingent assets.
Note F40
List of companies included in\u00a0the\u00a0consolidation scope
The Group consists of Solvay SA/NV and a total of 145 investees.
Of these 145 investees, 71 are fully consolidated, 7 are proportionately consolidated and 20 are accounted for under the equity method, while the other 47 are not material to the Group and therefore are not in the consolidation scope.
These Other Investments, which are insignificant are measured at cost and tested for impairment on an annual basis, which is considered a good proxy of their fair value. For more information, refer to Principles of consolidation.
| \n Country | \n\n Company | \n\n Comments | \n
|---|---|---|
| \n CHILE | \n\n Rhodia Chile Ltda, Santiago | \n\n Meets the consolidation criteria | \n
| \n Country | \n\n Company | \n\n Comments | \n
|---|---|---|
| \n FRANCE | \n\n Solvay Energy Services S.A.S., Puteaux | \n\n Merged into Rhodia Operations S.A.S. | \n
| \n GERMANY | \n\n Solvay Chemicals GmbH, Hannover | \n\n Merged into Solvay GmbH | \n
| \n Solvin GmbH & Co. KG - PVDC, Rheinberg | \n\n Merged into Solvay GmbH | \n|
| \n Solvay Flux GmbH, Hannover | \n\n Merged into Solvay GmbH | \n|
| \n Solvay Fluor GmbH, Hannover | \n\n Merged into Solvay GmbH | \n|
| \n Solvin Holding GmbH, Hannover | \n\n Merged into Solvay GmbH | \n|
| \n NETHERLANDS | \n\n Rhodia International Holdings B.V., Den Haag | \n\n Merged into Solvay Chemicals and Plastics Holding B.V. | \n
| \n Country | \n\n Company | \n\n Comments | \n
|---|---|---|
| \n CHINA | \n\n Shandong Huatai Interox Chemical Co. Ltd, Dongying | \n\n Change from equity method to full consolidation due to the\u00a0purchase of additional 10% of Dongying Huatai Chemicals Group's\u00a0shares | \n
Indicating the percentage holding.
The percentage of voting rights is very close to the percentage holding.
| \n ARGENTINA | \n\n \n | \n
|---|---|
| \n Solvay Argentina SA, Buenos Aires | \n\n 100 | \n
| \n Quimicos Esenciales de Argentina SA, Buenos Aires | \n\n 100 | \n
| \n AUSTRALIA | \n\n \n | \n
| \n Solvay Interox Pty Ltd, Banksmeadow | \n\n 100 | \n
| \n AUSTRIA | \n\n \n | \n
| \n Solvay \u00d6sterreich GmbH, Wien | \n\n 100 | \n
| \n BELGIUM | \n\n \n | \n
| \n Carri\u00e8res les Petons S.P.R.L., Walcourt | \n\n 100 | \n
| \n Solvay Chemicals International S.A., Brussels | \n\n 100 | \n
| \n Solvay Chimie S.A., Brussels | \n\n 100 | \n
| \n Solvay Pharmaceuticals S.A. - Management Services, Brussels | \n\n 100 | \n
| \n Solvay Stock Option Management S.P.R.L., Brussels | \n\n 100 | \n
| \n BRAZIL | \n\n \n | \n
| \n Cogeracao de Energia Electricica Rhodia Brotas SA, Brotas | \n\n 100 | \n
| \n Rhodia Brasil SA, Sao Paolo | \n\n 100 | \n
| \n Rhodia Poliamida Brasil Ltda , Sao Paolo | \n\n 100 | \n
| \n Rhopart-Participacoes Servidos e Comercio Ltda, Sao Paolo | \n\n 100 | \n
| \n BULGARIA | \n\n \n | \n
| \n Solvay Bulgaria EAD, Devnya | \n\n 100 | \n
| \n CANADA | \n\n \n | \n
| \n Solvay Canada Inc, Toronto | \n\n 100 | \n
| \n CHILE | \n\n \n | \n
| \n Rhodia Chile Ltda, Santiago | \n\n 100 | \n
| \n CHINA | \n\n \n | \n
| \n Essential (Shanghai) Enterprise Management Co., Shanghai | \n\n 100 | \n
| \n Liyang Solvay Rare Earth New Material Co., Ltd, Liyang City | \n\n 96.3 | \n
| \n Shandong Huatai Interox Chemical Co. Ltd, Dongying | \n\n 60 | \n
| \n Solvay (Shanghai) International Trading Co., Ltd, Shanghai | \n\n 100 | \n
| \n Solvay Chemicals (Shanghai) Co. Ltd, Shanghai | \n\n 100 | \n
| \n Solvay Fine Chemical Additives (Qingdao) Co., Ltd, Qingdao | \n\n 100 | \n
| \n Solvay Lantian (Quzhou) Chemicals Co., Ltd, Zhejiang | \n\n 55 | \n
| \n FINLAND | \n\n \n | \n
| \n Solvay Chemicals Finland Oy, Voikkaa | \n\n 100 | \n
| \n FRANCE | \n\n \n | \n
| \n Rhodia Chimie S.A.S., Aubervilliers | \n\n 100 | \n
| \n Rhodia Operations S.A.S., Aubervilliers | \n\n 100 | \n
| \n Solvay - Op\u00e9rations - France S.A.S., Paris | \n\n 100 | \n
| \n Solvay Finance S.A., Paris | \n\n 100 | \n
| \n GERMANY | \n\n \n | \n
| \n Cavity GmbH, Hannover | \n\n 100 | \n
| \n Horizon Immobilien AG, Hannover | \n\n 100 | \n
| \n Salzgewinnungsgesellschaft Westfalen GmbH & Co KG, Hannover | \n\n 65 | \n
| \n German limited partnership, which makes use of the exemptions offered by Section 264(b) of the German Commercial Code, not to publish their annual financial statements. | \n\n \n | \n
| \n Solvay GmbH, Hannover | \n\n 100 | \n
| \n INDIA | \n\n \n | \n
| \n ES Essential Chemicals Private Limited, Mumbai | \n\n 100 | \n
| \n ITALY | \n\n \n | \n
| \n Cogeneration Rosignano S.r.l., Rosignano | \n\n 100 | \n
| \n Essentials Chemicals Italy S.p.a., Livorno | \n\n 100 | \n
| \n Solvay Chimica Italia S.p.A., Milano | \n\n 100 | \n
| \n Solvay Energy Services Italia S.r.l., Bollate | \n\n 100 | \n
| \n JAPAN | \n\n \n | \n
| \n Nippon Solvay KK, Tokyo | \n\n 100 | \n
| \n Solvay Special Chem Japan Ltd, Anan City | \n\n 100 | \n
| \n LUXEMBOURG | \n\n \n | \n
| \n Renestia S.A., Capellen | \n\n 100 | \n
| \n Solvay Chlorovinyls Holding S.a.r.l., Luxembourg | \n\n 100 | \n
| \n MEXICO | \n\n \n | \n
| \n Solvay Fluor Mexico S.A. de C.V., Ciudad Juarez | \n\n 100 | \n
| \n Solvay Mexicana S. de R.L. de C.V., Monterrey | \n\n 100 | \n
| \n NETHERLANDS | \n\n \n | \n
| \n Solvay Chemicals and Plastics Holding B.V., Linne-Herten | \n\n 100 | \n
| \n Solvay Chemie B.V., Linne-Herten | \n\n 100 | \n
| \n Solvin Holding Nederland B.V., Linne-Herten | \n\n 100 | \n
| \n POLAND | \n\n \n | \n
| \n Solvay Poland Sp. z o.o. , Gorzow Wielkopolski | \n\n 100 | \n
| \n PORTUGAL | \n\n \n | \n
| \n Solvay Business Services Portugal Unipessoal Lda, Carnaxide | \n\n 100 | \n
| \n Solvay Peroxidos Portugal Unipessoal LDA , Povoa | \n\n 100 | \n
| \n SINGAPORE | \n\n \n | \n
| \n Solvay Fluor Holding (Asia-Pacific) Pte. Ltd., Singapore | \n\n 100 | \n
| \n SOUTH AFRICA | \n\n \n | \n
| \n Solvay Polymers and Chemicals South Africa (PTY) Ltd, Johannesburg | \n\n 100 | \n
| \n SOUTH KOREA | \n\n \n | \n
| \n Special Chem Korea Co. Ltd, Gunsan | \n\n 100 | \n
| \n Solvay Chemical Services Korea Co. Ltd, Seoul | \n\n 100 | \n
| \n Solvay Silica Korea Co. Ltd , Incheon | \n\n 100 | \n
| \n SPAIN | \n\n \n | \n
| \n Solvay Quimica S.L., Barcelona | \n\n 100 | \n
| \n SWITZERLAND | \n\n \n | \n
| \n Solvay Vinyls Holding AG, Bad Zurzach | \n\n 100 | \n
| \n THAILAND | \n\n \n | \n
| \n Solvay Asia Pacific Company Ltd, Bangkok | \n\n 100 | \n
| \n Solvay Peroxythai Ltd, Bangkok | \n\n 100 | \n
| \n TURKEY | \n\n \n | \n
| \n Essential Istanbul Chemical Items Industry and Trade Limited Company, Istanbul | \n\n 100 | \n
| \n UNITED KINGDOM | \n\n \n | \n
| \n Rhodia Limited , Watford | \n\n 100 | \n
| \n Solvay Interox Ltd, Warrington | \n\n 100 | \n
| \n Solvay UK Holding Company Ltd, Warrington | \n\n 100 | \n
| \n UNITED STATES | \n\n \n | \n
| \n American Soda LLC, Houston, TX | \n\n 100 | \n
| \n Essential Finance (America) LLC, Wilmington DE | \n\n 100 | \n
| \n Essential Holding America, LLC, Wilmington, DE | \n\n 100 | \n
| \n Essential Elements USA LLC, Wilmington, DE | \n\n 100 | \n
| \n Essential Chemicals USA LLC, Wilmington, DE | \n\n 100 | \n
| \n Rocky Mountain Coal Company, LLC, Houston, TX | \n\n 100 | \n
| \n Solvay America Holdings, Inc., Houston, TX | \n\n 100 | \n
| \n Solvay Chemicals, Inc., Houston, TX | \n\n 100 | \n
| \n Solvay Fluorides, LLC., St Louis, IL | \n\n 100 | \n
Indicating the percentage holding.
| \n AUSTRIA | \n\n \n | \n
|---|---|
| \n Solvay Sisecam Holding AG, Wien | \n\n 75 | \n
| \n BELGIUM | \n\n \n | \n
| \n BASF Interox H2O2 Production N.V., Brussels | \n\n 50 | \n
| \n BULGARIA | \n\n \n | \n
| \n Solvay Sodi AD, Devnya | \n\n 73.5 | \n
| \n NETHERLANDS | \n\n \n | \n
| \n MTP HP JV C.V., Weesp | \n\n 50 | \n
| \n MTP HP JV Management bv, Weesp | \n\n 50 | \n
| \n SAUDI ARABIA | \n\n \n | \n
| \n Saudi Hydrogen Peroxide Co, Jubail | \n\n 50 | \n
| \n THAILAND | \n\n \n | \n
| \n MTP HP JV (Thailand) Ltd, Bangkok | \n\n 50 | \n
Indicating the percentage holding.
| \n AUSTRALIA | \n\n \n | \n
|---|---|
| \n Aqua Pharma Australia Pty Ltd, Armidale | \n\n 50 | \n
| \n Aquatiq Prawns Ltd, Launceston | \n\n 50 | \n
| \n BELGIUM | \n\n \n | \n
| \n Aqua Pharma Belgium Srl, Herent | \n\n 50 | \n
| \n BRAZIL | \n\n \n | \n
| \n Peroxidos do Brasil Ltda, Sao Paulo | \n\n 69.4 | \n
| \n CANADA | \n\n \n | \n
| \n Aqua Pharma Inc, Saint John | \n\n 50 | \n
| \n CHILE | \n\n \n | \n
| \n Aqua Pharma Chile Spa, Puerto Montt | \n\n 50 | \n
| \n ECUADOR | \n\n \n | \n
| \n Aqua Pharma Ecuador S.A, Guayas | \n\n 50 | \n
| \n INDONESIA | \n\n \n | \n
| \n PT Aqua Pharma Indonesia Ltd, Jakarta | \n\n 50 | \n
| \n NORWAY | \n\n \n | \n
| \n Aqua Pharma Group A.S., Lillehammer | \n\n 50 | \n
| \n Aqua Pharma A.S., Lillehammer | \n\n 50 | \n
| \n Haugaland Shipping A.S., Haugesund | \n\n 50 | \n
| \n TAIWAN | \n\n \n | \n
| \n Shinsol Advanced Chemicals Corporation, New Taipei | \n\n 51 | \n
| \n UNITED KINGDOM | \n\n \n | \n
| \n Aqua Pharma Technical Ltd, Inverness | \n\n 50 | \n
| \n Aqua Pharma Ltd, Inverness | \n\n 50 | \n
| \n Pulcea Ltd, Edinburgh | \n\n 25 | \n
| \n UNITED STATES | \n\n \n | \n
| \n Aqua Pharma U.S. Inc, Kirkland | \n\n 50 | \n
| \n CHINA | \n\n \n | \n
|---|---|
| \n Qingdao Hiwin Solvay Chemicals Co. Ltd, Qingdao | \n\n 30 | \n
| \n Solvay (Zhenjiang) Chemicals Co., Ltd, Zhenjiang New area | \n\n 9.35 | \n
| \n FRANCE | \n\n \n | \n
| \n GIE Chime Salindres, Salindres | \n\n 50 | \n
| \n MEXICO | \n\n \n | \n
| \n Silicatos y Derivados S.A. DE C.V., Estado de Mexico | \n\n 20 | \n
Note F41
Audit fees
For the year ending December 31, 2024, professional services were performed by EY Bedrijfsrevisoren BV / EY R\u00e9viseurs d\u2019Entreprises SRL, duly incorporated and validly existing under the laws of Belgium, whose registered office is at Kouterveldstraat 7b, 1831 Diegem, Belgium, registered in the register of legal entities of Brussels under business registration number 0446.334.711, and their respective affiliates.
The yearly 2024 audit fees for Solvay SA were set at \u20ac1.2 million. They include the audit of the statutory and consolidated accounts of Solvay SA. Audit fees for Solvay affiliates in 2024 amount to \u20ac2.1 million. The fee for the 2024 CSRD limited assurance engagement was \u20ac0.6 million. Supplementary non-audit fees of \u20ac1.7 million were engaged in 2024 by Solvay SA and affiliates of which:
hOther assurance service missions:
\u2014Invoiced by the statutory auditor of the group (\u20ac1.4 million)
\u2014Invoiced by other EY entities (\u20ac0.2 million)
hOther services: \u20ac0.1 million.