NOTE F33 Net indebtedness
- Index
- 21 NOTE F21 Intangible assets
- 22 NOTE F22 Goodwill and business combinations
- 23 NOTE F23 Property, plant, and equipment
- 24 NOTE F24 Leases
- 25 NOTE F25 Assets held for sale
- 26 NOTE F26 Investments in associates and joint ventures
- 27 NOTE F27 Other investments
- 28 NOTE F28 Impairment of property, plant, and equipment, intangible assets, and equity method investees
- 29 NOTE F29 Inventories
- 30 NOTE F30 Other receivables (current)
- 31 NOTE F31 Provisions
- 32 NOTE F32 Financial instruments and financial risk management
- 33 NOTE F33 Net indebtedness
- 34 NOTE F34 Other liabilities (current)
- 35 NOTE F35 Share-based payments
The Group’s net indebtedness is the balance between its financial debts and other financial instruments receivables, and cash and cash equivalents.
In € million |
2017 |
2016 |
||
Financial debts |
4,226 |
5,426 |
||
Other financial instrument receivables |
(89) |
(101) |
||
Cash and cash equivalents |
(992) |
(969) |
||
Net indebtedness |
3,146 |
4,356 |
The decrease in the net indebtedness is due to the strong cash generation and the cashing-in of proceeds from divestments (Acetow and Vinythai).
During 2017 the two leading rating agencies reviewed the Group’s Investment Grade status, with a Baa2/P2 rating (stable outlook) by Moody’s and a BBB/A2 rating (stable outlook) by Standard & Poor’s.
Financial debt: main borrowings
In € million |
|
2017 |
2016 |
|||||
Nominal amount |
Coupon |
Maturity |
Secured |
Amount at amortized cost |
Fair value |
Amount at amortized cost |
Fair value |
|
Floating rate € notes |
|
Euribor 3m+82 bps |
2017 |
No |
|
|
998 |
1,005 |
Senior US$ note Cytec Industries Inc (issuance US$ 82.2 million) |
|
8.95% |
2017 |
No |
|
|
81 |
80 |
EMTN € bond (issuance € 500 million) |
382 |
4.625% |
2018 |
No |
381 |
391 |
496 |
535 |
Senior US$ notes (144A;US$ 800 million) |
667 |
3.40% |
2020 |
No |
665 |
681 |
756 |
774 |
Senior € notes |
750 |
1.625% |
2022 |
No |
743 |
788 |
742 |
786 |
Senior US$ note Cytec Industries Inc (issuance US$ 400 million) |
163 |
3.5% |
2023 |
No |
156 |
167 |
362 |
369 |
Senior US$ note Cytec Industries Inc (issuance US$ 250 m) |
136 |
3.95% |
2025 |
No |
134 |
140 |
233 |
232 |
Senior US$ notes (144A;US$ 800 million) |
667 |
4.45% |
2025 |
No |
663 |
708 |
755 |
785 |
Senior € notes |
500 |
2.75% |
2027 |
No |
495 |
560 |
495 |
559 |
Total |
|
|
|
|
3,237 |
3,435 |
4,916 |
5,126 |
Some of the above-mentioned borrowings were partially repaid in 2017 (see below).
There are no instances of default on the above-mentioned financial debts. There are no financial covenants, either on Solvay SA, or on any of the Group’s holding companies.
Other financial instrument receivables
In € million |
2017 |
2016 |
||
Currency swaps |
4 |
12 |
||
Other marketable securities >3 months |
56 |
32 |
||
Other current financial assets |
28 |
57 |
||
Other financial instrument receivables |
89 |
101 |
The “Other financial instruments receivables” amount to €89 million at the end of 2017 compared to €101 million at the end of 2016. They include currency swaps, other marketable securities > 3 months (bank drafts), and other current financial assets (mainly margin calls of Solvay Energy Services).
Cash and cash equivalents
In € million |
2017 |
2016 |
||
Cash |
835 |
773 |
||
Term deposits |
157 |
195 |
||
Others |
|
2 |
||
Cash and cash equivalents |
992 |
969 |
By their nature, the carrying amount of cash and cash equivalents is equal or very close to their fair values.
Changes in financial debt and in other financial instrument receivables arising from financing activities
In € million |
2016 |
2017 |
|||||||
Total |
Cash flows from increase of borrowings |
Cash flows from repayment of borrowings |
Changes in foreign exchange rates |
Changes in other current financial assets |
Other in financing cash flows |
Transfer from non-current to current |
Other |
Total |
|
Non-current financial debt |
4,087 |
183 |
(296) |
(257) |
|
|
(527) |
(8) |
3,182 |
Subordinated loans and bonds |
3,837 |
|
(257) |
(241) |
|
|
(500) |
18 |
2,856 |
Other non current debts |
200 |
183 |
(39) |
(11) |
|
|
(27) |
(24) |
282 |
Long-term finance lease obligations |
50 |
|
|
(5) |
|
|
|
(1) |
44 |
Current financial debt |
1,338 |
1,509 |
(2,288) |
(1) |
|
(14) |
527 |
(27) |
1,044 |
Short-term financial debt (excluding finance lease obligations) |
1,277 |
1,509 |
(2,288) |
|
|
(14) |
527 |
4 |
1,015 |
Currency swaps |
59 |
|
|
(1) |
|
|
|
(31) |
27 |
Short-term finance lease obligations |
2 |
|
|
|
|
|
|
|
2 |
Total financial debt |
5,425 |
1,692 |
(2,584) |
(258) |
|
(14) |
|
(35) |
4,226 |
Currency swaps |
(12) |
|
|
|
|
|
|
8 |
(4) |
Other marketable securities >3 months |
(32) |
|
|
3 |
(27) |
|
|
|
(56) |
Other current financial assets |
(57) |
|
|
|
|
31 |
|
(2) |
(28) |
Other financial instrument receivables |
(101) |
|
|
3 |
(27) |
31 |
|
6 |
(89) |
Total cash flow |
|
1,692 |
(2,584) |
|
(27) |
17 |
|
|
|
In 2017, the financial debt decreased from €5,425 million at the end of 2016 to €4,226 million at the end of 2017.
The net decrease in non-current financial debt from €4,087 million in 2016 to €3,182 million in 2017 is explained mainly by:
- the partial early repayments of US$204 million of Senior Notes 2023 (out of US$400 million) and of US$87 million of Senior Notes 2025 (out of US$250 million) of Cytec Industries (total € equivalent of €257 million),
- the transfer to current financial debt of €500 million (EMTN maturity 2018),
- the changes in foreign exchange rates (€258 million) generated mainly by the US$1,600 million Senior Notes and Senior US$ notes Cytec Industries Inc (US$348 million), and
- an increase of external financing (reported under other non-current debts) set up for our HPPO joint operation (Saudi Hydrogen Peroxide Co) 50/50 with Sadara in the Kingdom of Saudi Arabia (€134 million).
The net decrease in current financial debt from €1,338 million in 2016 to €1,044 million in 2017 is explained mainly by:
- The repayment of the Senior notes of US$82 million maturing in July 2017 (total € equivalent of €75 million),
- The repayment of the Solvay Floating Rate Notes of €1 billion maturing early December 2017,
- The transfer from non-current financial debt of €500 million (EMTN maturity 2018), of which €118 million was repaid prematurely during 2017, and
- The issuances of commercial paper for a net amount of €400 million. The amounts presented in the cash flow statement under “increase in borrowings” and “repayment of borrowings” include the issuance of €1,460 million and the repayment of €1,060 million in 2017.
The €17 million in “Other in financing cash flows” relates to the repayment of margin calls in connection with Solvay Energy Services activities. The cash out for the Rhodia liquidity convention (€(4) million) is not presented as other financial liabilities and explains the difference with the €13 million in the line “Other” in the cash flow from financing activities in the consolidated statement of cash flows.