Glossary
Adjustments
Adjustments made to IFRS results for elements distorting comparability of the Group underlying performance over time. These adjustments consist of:
- Results from portfolio management and reassessments
- Results from legacy remediation and major litigations
- M&A related impacts, consisting mainly of non-cash purchase price allocation impacts (e.g. inventory step-up and amortization of intangibles) and retention bonuses relative to Chemlogics and other acquisitions
- Net financial results relating to changes in discount rates, hyperinflation, coupons of hybrid bonds considered as dividends under IFRS, and debt management impacts (comprising mainly gains/(losses) relating to the early repayment of debt)
- Adjustments of equity earnings for impairment gains or losses and unrealized foreign exchange gains or losses on debt
- Results from available-for-sale financial assets
- Tax effects relating to the items listed above and tax expense or income of prior years.
- All adjustments listed above apply to both continuing and discontinued operations, and include the impacts on non-controlling interests.
Basic earnings per share
Net income (Solvay’s share) divided by the weighted average number of shares, after deducting own shares purchased to cover stock options program.
Carechem
Carechem 24 is a multilingual telephone advice service providing access to a team of trained responders 24 hours a day, 365 days a year. Carechem 24 provides companies all over the world with emergency product support during a hazardous materials incident.
CEFIC
European Chemical Industry Council.
CEO
Chief Executive Officer.
CFO
Chief Financial Officer.
CFROI
Cash Flow Return On Investment measures the cash returns of Solvay’s business activities. Movements in CFROI levels are relevant indicators for showing whether economic value is being added, though it is accepted that this measure cannot be benchmarked or compared with industry peers. The definition uses a reasonable estimate of the replacement cost of assets and avoids accounting distortions, e.g. for impairments. It is calculated as the ratio between recurring cash flow and invested capital, where:
- Recurring cash flow = Underlying EBITDA + Dividends from associates and joint ventures --- Earnings from associates and joint ventures +
Recurring capex + Recurring income taxes, - Invested capital = Replacement value of goodwill & fixed assets + Net working capital + Carrying amount of associates and joint ventures,
- Recurring capex is normalized at 2% of the replacement value of fixed assets net of goodwill values,
- Recurring income tax is normalized at 30% of (Underlying EBIT --- Earnings from associates and joint ventures)Cash flow return on investment, calculated as the ratio between recurring cash flow and invested capital, where
CGU
Cash-generating unit.
Code of Conduct
Solvay is committed to responsible behavior and integrity, taking into account the sustainable growth of its business and its good reputation in the communities in which it operates.
Comex
Executive Committee.
CSR
Corporate Social Responsibility.
Diluted earnings per share
Net income (Solvay’s share) divided by the weighted average number of shares adjusted for effects of dilution.
Discontinued operations
Component of the Group which the Group has disposed of or which is classified as held for sale, and:
- represents a separate major line of business or geographical area of operations
- is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations or
- is a subsidiary acquired exclusively with a view to resale.
Dividend yield (net)
Net dividend divided by the closing share price on December 31.
Dividend yield (gross)
Gross dividend divided by the closing share price on December 31.
DJ Stoxx
Dow Jones Stoxx is a European stock index composed of the 665 most important European shares.
DJ Euro Stoxx
Dow Jones Euro Stoxx is a pan-European stock index which includes the 326 most important shares of the general Dow Jones index, belonging to eleven countries of the Eurozone.
EBIT
Earnings before interest and taxes.
EBITDA
earnings before interest and taxes, depreciation and amortization.
Environmental Protection Agency
The U.S. Environmental Protection Agency (EPA or USEPA) is an agency of the United States federal government which was created for the purpose of protecting human health and the environment by writing and enforcing regulations based on laws passed by Congress.
Equity per share
Equity (Solvay share) divided by the number of outstanding shares at year end (issued shares – treasury shares).
Euronext
Global operator of financial markets and provider of trading technologies.
FKM
Fluoro-elastomer, polymer type.
Free Cash Flow
Free cash flow measures cash flow from operating activities, net of investments. It excludes any M&A or financing related activities, but includes elements like dividends from associates and joint-ventures, pensions, restructuring costs, etc. It is defined as cash flow from operating activities (excluding cash flows from expenses incurred in connection with acquisitions of subsidiaries) and cash flow from investing activities (excluding cash flows from or related to acquisitions and disposals of subsidiaries and other investments, and excluding loans to associates and non-consolidated investments, as well as related tax elements and recognition of factored receivables).
FTSEurofirst 300
The FTSEurofirst 300 Index tracks the equity performance across the region of the 300 largest companies ranked by market capitalization in the FTSE Developed Europe Index.
GBU
Global Business Unit.
Gearing ratio
Underlying net debt / total equity.
GHG
Greenhouse gas.
GRI
The Global Reporting Initiative (GRI) is a leading organization in the sustainability field. GRI promotes the use of sustainability reporting as a way for organizations to become more sustainable and contribute to sustainable development.
HBP
High-barrier polymer.
HDS
Highly Dispersible Silica.
HPPA
Polyamide High Performance.
HPPO
Hydrogen peroxide propylene oxide, a new technology to produce propylene oxide using hydrogen peroxide.
IFRS
International Financial Reporting Standards.
Integrated reporting
This is a process founded on integrated thinking, which results in a periodic integrated report by an organization about value creation over time and related communications regarding aspects of value creation.
ISO 9001
The ISO 9001 standard defines a set of requirements for the establishment of a system of quality management in an organization, whatever its size and activity.
ISO 14001
The ISO 14001 family addresses various aspects of environmental management. It provides practical tools for companies and organizations looking to identify and control their environmental impact and constantly improve their environmental performance.
ISO 14040
The ISO 14040 standard covers life cycle assessment (LCA) studies and life cycle inventory (LCI) studies.
ISO 26000
The ISO 26000 is a global standard which provides guidelines for organizations that wish to operate in a socially responsible manner. The standard was published in 2010 after five years of negotiations among a large number of stakeholders worldwide. Representatives of governments, NGOs, industry, consumer groups, and the world of work were involved in its development. It therefore represents an international consensus.
Leverage ratio
Underlying net debt / underlying EBITDA of the last 12 months.
Loss prevention process
Loss prevention aims at maintaining production flow and profitability of the plants by providing risk mitigation. It also contributes to increasing the protection of people and the environment.
LTAR
Lost Time Accident Rate.
LTI
Long Term Incentive.
M&A
Mergers and Acquisitions.
M&A related impacts
It mainly includes non-cash Purchase Price Allocation impacts (e.g. inventory step-up and amortization of intangibles other than for PPA Rhodia) and retention bonuses relative to Chemlogics and other acquisitions.
Materiality
Organizations are faced with a wide range of topics on which they could report. The relevant topics are those that may reasonably be considered important for reflecting the organization’s economic, environmental, and social impacts, or influencing the decisions of stakeholders, and therefore potentially merit inclusion in an annual report. Materiality is the threshold at which aspects become sufficiently important that they should be reported.
MTAR
Medical Treatment Accident Rate.
Natural Currency Hedge
A natural currency hedge is an investment that reduces the undesired risk by matching cash in and outflows.
Net cost of borrowings
cost of borrowings netted with interest on lendings and short-term deposits, as well as other gains (losses) on net indebtedness
Net debt
Non-current financial debt + current financial debt – cash & cash equivalents – other financial instrument receivables.
Net financial charges
net cost of borrowings, costs of discounting provisions (namely, related to post-employment benefits and HSE liabilities) and income / loss from available-for-sale financial assets.
Net pricing
The difference between the change in sales prices and the change in variable costs.
Net sales
Sales of goods and value added services corresponding to Solvay’s know-how and core business. Net sales exclude other revenues comprising primarily commodity and utility trading transactions and other revenue deemed as incidental by the Group.
Net working capital
Includes inventories, trade receivables, and other current receivables, netted with trade payables and other current liabilities.
OCI
Other Comprehensive Income.
OECD
Organisation for Economic Co-operation and Development.
OHSAS 18001
OHSAS 18001 is an international occupational health and safety management system specification.
OLED
Organic Light-Emitting Diode.
Open Innovation
Innovation that is enriched with outside expertise, through partnerships with the academic world and by shareholdings in start-ups, either directly or via investment funds.
Other adjustments
Adjustments made for elements distorting comparability over time of the underlying performance of the Group. They include results from portfolio management and reassessments and from legacy remediation and major litigation, M&A related impacts that include PPA impacts of acquisitions other than Rhodia and Cytec and retention bonus granted at closing date, net financial expense or income relating to change in discount rates, hyperinflation financial results and debt refinancing, adjustments of equity earnings for impairment gains or losses and unrealized foreign exchange gains or losses on debt, tax effects relating to the items listed before, tax expense or income of previous years, all adjustments listed before for continuing operations and impacting discontinued operations.
PA
Polyamide, polymer type.
PCC
Precipitated calcium carbonate.
PEEK
Polyetheretherketone.
pp
Unit of percentage points or 1.0%, used to express the evolution of ratios.
PPA
Purchase Price Allocation (PPA) accounting impacts related to acquisitions.
Pricing power
The ability to create positive net pricing.
PSU
Performance Share Unit.
PO
Propylene oxide.
PPS
Polyphenylene sulfide.
PPSU
Polyphenylsulfone.
Product Stewardship
A responsible approach in managing risks throughout the entire life cycle of a product, from the design stage to the end of life.
PVC
Polyvinyl chloride.
PVDF
Polyvinylidene fluoride.
R&I
Research & Innovation.
REACH
REACH is the European Community Regulation on chemicals and their safe use (EC 1907/2006). It deals with the registration, evaluation, authorization, and restriction of chemical substances. The law entered into force on June 1, 2007.
Responsible Care®
Responsible Care® is the global chemical industry’s unique initiative to improve health, environmental performance, enhance security, and to communicate with stakeholders about products and processes.
Result from legacy remediation and major litigations
It includes:
- The remediation costs not generated by on-going production facilities (shut-down of sites, discontinued productions, previous years’ pollution), and
- The impact of significant litigations.
Results from portfolio management and reassessments
It includes:
- Gains and losses on the sale of subsidiaries, joint operations, joint ventures, and associates that do not qualify as discontinued operations
- Acquisition costs of new businesses
- Gains and losses on the sale of real estate not directly linked to an operating activity
- Restructuring charges driven by portfolio management and reassessment, including impairment losses resulting from the shutdown of an activity or a plant and
- Impairment losses resulting from testing of CGUs.
It excludes non-cash accounting impact from amortization and depreciation resulting from the purchase price allocation (PPA) from acquisitions.
Revenue from non-core activities
Revenues comprising primarily commodity and utility trading transactions and other revenue deemed incidental by the Group, being regarded as inappropriate to Solvay’s know-how and core business.
ROE
Return on equity.
Safety Data Sheets
Safety Data Sheets are the main tool for ensuring that manufacturers and importers communicate enough information along the supply chain to allow safe use of their substances and mixtures.
SASB
Sustainability Accounting Standards Board. SASB’s mission is to develop and disseminate sustainability accounting standards that help public corporations disclose material, decision-useful information to investors. That mission is accomplished through a rigorous process that includes evidence-based research and broad, balanced stakeholder participation.
Seveso Regulations
The Control of Major Accident Hazards Involving Dangerous Substances Regulations. These regulations (often referred to as “COMAH Regulations” or “Seveso Regulations”) give effect to European Directive 96/82/EC. They apply only to locations where significant quantities of dangerous substances are stored.
Solvay Way
Launched in 2013 and aligned with ISO 26000, Solvay Way is the sustainability approach of the Group. It integrates social, societal, environmental, and economic aspects into the Company’s management and strategy, with the objective of creating value shared by all of its stakeholders. Solvay Way is based on an ambitious and pragmatic framework serving as a tool of both measurement and progress. Solvay Way lists 49 practices – practices that reflect the Solvay Way’s 22 commitments and are structured on a four-level scale (launch, deployment, maturity, performance).
SOP
Stock Option Plan.
SPM
The Sustainable Portfolio Management tool is integrated into the Solvay Way framework (linked to five practices). It serves as a strategic tool for developing information on our portfolio and analyzing the impacts of sustainability megatrends on our businesses.
STI
Short Term Incentive.
SVHC
Substance of Very High Concern (SVHC) is a chemical substance, the utilization of which within the European Union has been proposed to become subject to legal authorization under the REACH regulation.
Tax rate
Income taxes / (Result before taxes – Earnings from associates & joint ventures – interests & realized foreign exchange results on RusVinyl joint venture). The adjustment of the denominator regarding associates and joint ventures is made as these contributions are already net of income taxes.
Underlying
Underlying results are deemed to provide a more comparable indication of Solvay’s fundamental performance over the reference periods. They are defined as the IFRS figures adjusted for the “Adjustments” as defined above.
Underlying net debt
Underlying net debt reclassifies as debt 100% of the hybrid perpetual bonds, considered as equity under IFRS.
Velocity
Total number of shares traded during the year divided by the total number of listed shares, using the Euronext definition.
VCM
Vinyl chloride.
Velocity adjusted by free float
Velocity adjusted as a function of the percentage of the listed shares held by the public, using the Euronext definition.
WBCSD
World Business Council for Sustainable Development.
WCF
World Class Factory.
yoy
Year on year comparison.