- Index
- 20 NOTE F20 Intangible assets
- 21 NOTE F21 Goodwill and business combinations
- 22 NOTE F22 Property, plant and equipment
- 23 NOTE F23 Right-of-use assets and lease liabilities
- 24 NOTE F24 Joint operations
- 25 NOTE F25 Investments in associates and joint ventures
- 26 NOTE F26 Other investments
- 27 NOTE F27 Impairment of property, plant and equipment, intangible assets, right-of-use assets, and equity method investees
- 28 NOTE F28 Inventories
- 29 NOTE F29 Other receivables (current)
- 30 NOTE F30 Assets held for sale
- 31 NOTE F31 Equity
- 32 NOTE F32 Non-controlling interests
- 33 NOTE F33 Share-based payments
- 34 NOTE F34 Provisions
- 35 NOTE F35 Financial instruments and financial risk management
- 36 NOTE F36 Net indebtedness
- 37 NOTE F37 Other liabilities (current)
The Group’s net indebtedness is the balance between its financial debts and other financial instruments, and cash and cash equivalents.
In € million |
2019 |
2018 |
Financial debt |
4,513 |
3,810 |
Cash and cash equivalents |
(809) |
(1,103) |
Other financial instruments |
(119) |
(101) |
Net indebtedness |
3,586 |
2,605 |
The increase in the net indebtedness is mainly due to (a) the increase of the financial debt, resulting from the recognition of additional lease liabilities following the adoption of IFRS 16 Leases and that amount to € 470 million at the end of 2019, and (b) the increase of short-term treasury notes. The repayment of the € 700 million hybrid bond (recognized in equity) in June 2019, using available cash (partially resulting from the € 300 million cash available after the issuance of an hybrid bond in September 2018), also impacted cash and cash equivalents.
Solvay Investment Grade rating is Baa2/P2 (stable outlook) with Moody’s and BBB/A2 (stable outlook) with Standard & Poor’s.
Financial debt: main borrowings
In € million |
|
2019 |
2018 |
|||||
Nominal amount |
Coupon |
Maturity |
Secured |
Amount at amortized cost |
Fair value |
Amount at amortized cost |
Fair value |
|
Senior US$ notes (144A;US$ 800 million) |
712 |
3.40% |
2020 |
No |
|
|
697 |
697 |
Senior € notes |
750 |
1.625% |
2022 |
No |
746 |
781 |
745 |
781 |
Senior US$ note Cytec Industries Inc (issuance US$ 400 million) |
175 |
3.5% |
2023 |
No |
169 |
178 |
165 |
167 |
Senior US$ note Cytec Industries Inc (issuance US$ 250 million) |
146 |
3.95% |
2025 |
No |
143 |
150 |
140 |
138 |
Senior US$ notes (144A;US$ 800 million) |
712 |
4.45% |
2025 |
No |
709 |
775 |
695 |
706 |
Senior € notes |
500 |
2.75% |
2027 |
No |
496 |
584 |
496 |
542 |
Senior € notes |
600 |
0.500% |
2029 |
No |
595 |
582 |
|
|
Total |
|
|
|
|
2,859 |
3,049 |
2,937 |
3,032 |
In 2019 Solvay SA issued a 10-year Senior note (€ 600 million) with an 0.5% yearly coupon in parallel with the early repayment of the US$ 800 million Senior US$ notes of Solvay Finance America LLC, initially maturing in 2020.
There are no instances of default on the above-mentioned financial debts. There are no financial covenants, neither on Solvay SA, nor on any of the Group’s holding companies.
Other financial instruments
In € million |
2019 |
2018 |
Currency swaps |
3 |
1 |
Other marketable securities > 3 months |
44 |
68 |
Other current financial assets |
72 |
32 |
Other financial instruments |
119 |
101 |
The other marketable securities > 3 months include the bank drafts position.
The other current financial assets mainly include margin calls of Energy Services for instruments with a negative fair value, and represent collateral for the obligations.
Cash and cash equivalents
In € million |
2019 |
2018 |
Cash |
664 |
907 |
Term deposits |
144 |
197 |
Cash and cash equivalents |
809 |
1,103 |
By their nature, the carrying amount of cash and cash equivalents is equal to, or a very good proxy of, its fair value.
Changes in financial debt and in other financial instruments arising from financing activities
In € million |
2018 |
2019 |
|||||||||
Total |
IFRS 16 adoption |
Cash flows from increase of borrowings |
Cash flows from repayment of borrowings |
Cash flows from payment of lease liabilities |
Changes in foreign exchange rates |
Changes in other current financial assets |
Other in financing cash flows |
Transfer from non-current to current |
Other |
Total |
|
Bonds |
2,937 |
|
597 |
(712) |
|
36 |
|
|
|
|
2,859 |
Other non-current debts |
208 |
|
48 |
(10) |
|
3 |
|
|
(109) |
16 |
156 |
Long-term finance lease obligations |
35 |
(36) |
|
|
|
1 |
|
|
(2) |
1 |
|
Lease liabilities – Long-term portion |
|
376 |
|
|
|
5 |
|
|
(123) |
111 |
368 |
Non-current financial debt |
3,180 |
340 |
645 |
(721) |
|
45 |
|
|
(234) |
128 |
3,382 |
Short-term financial debt (excluding finance lease obligations) |
616 |
|
2,399 |
(2,054) |
|
|
|
(28) |
109 |
(22) |
1,020 |
Currency swaps |
12 |
|
|
|
|
|
|
|
|
(4) |
8 |
Short-term finance lease obligations |
1 |
|
|
|
|
|
|
|
2 |
(2) |
|
Lease liabilities – Short-term portion |
|
93 |
|
|
(110) |
|
|
|
123 |
(5) |
102 |
Current financial debt |
630 |
93 |
2,399 |
(2,054) |
(110) |
|
|
(28) |
234 |
(33) |
1,132 |
Total financial debt |
3,810 |
433 |
3,044 |
(2,776) |
(110) |
46 |
|
(28) |
|
95 |
4,513 |
Currency swaps |
(1) |
|
|
|
|
|
|
|
|
(1) |
(3) |
Other marketable securities > 3 months |
(67) |
|
|
|
|
(1) |
24 |
|
|
|
(44) |
Other current financial assets |
(32) |
|
|
|
|
|
(57) |
12 |
|
5 |
(73) |
Other financial instruments |
(101) |
|
|
|
|
(1) |
(32) |
12 |
|
3 |
(119) |
Total cash flows |
|
433 |
3,044 |
(2,776) |
(110) |
|
(32) |
(16) |
|
|
|
The financial debt increased from € 3,810 million at the end of 2018 to € 4,513 million at the end of 2019.
The non-current financial debt increases by € 202 million, mainly resulting from:
- the recognition of additional lease liabilities following the application of IFRS 16 Leases (€ 340 million at transition date, € 368 million at December 31, 2019);
- the issuance of Senior € notes for € 600 million;
- the early repayment of the US$ 800 million US$ Senior Bond;
- the transfer to current financial debt for € (234) million.
The current financial debt increases by € 503 million, mainly resulting from:
- the commercial papers outstanding at the end of the year (€ 700 million in 2019, against € 246 million in 2018);
- the transfer from non-current financial debt for € 234 million.
The amounts presented in the consolidated statement of cash flows under “increase in borrowings” and “repayment of borrowings” include the issuance of € 2,365 million and the repayment of € 1,911 million of commercial papers.
The € 111 million in “Other” mainly relates to leases that commenced during the year, as well as lease modifications.