2020 Integrated Report

Message by the President of the Executive Committee and CEO

Rhovanil® Natural CW (pictured)

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We reinvented progress in 2020

by Ilham Kadri, President of the Executive Committee and CEO

Ilham Kadri, President of the Executive Committee and CEO (picture)

2020 was the year we unveiled our Company Purpose… and literally just a few weeks after our inspiring inauguration, the tidal wave of Coronavirus submerged the world.

With today’s hindsight, I embrace this concomitance gratefully, because the outbreak and its consequences – albeit dramatic – allowed us to live our Purpose in full: “We bond people, ideas and elements to reinvent progress” was our beacon, our North Star. We demonstrated that we were essential to the world and we actually capitalized on the crisis, accelerating reforms to unleash our company’s full potential. Today, I can proudly assert that we have emerged stronger.

As an industrialist, I am first and foremost satisfied to see that Solvay has become a safer workplace: last year, fewer colleagues than ever before sustained an injury requiring medical treatment.

2020 also turned out to be the most opportune year to nurture our special bonds with our customers, if only to keep the supply chain operating smoothly, even though half of the globe was under lockdown. But we went beyond: we remained at their service, we adapted to their unprecedented challenges, we proposed solutions and even won new customers! One touching anecdote illustrates our state of mind – our customer obsession – which prevailed at the time: when Boeing was asked by the US government to manufacture face shields to protect lives, they turned to Solvay for support and high performing materials. It is no coincidence: our ambition is to be the first ones our customers call, always. Many of them actually called us to share their worries as they were facing starkly declining markets – which in turn prompted us to quickly adapt.

We took immediate measures to rein in our own production and furloughed a large portion of our workforce. At the same time, because we cherish our bonds with our employees, we immediately put in place a safety net to limit the social impact of the general slowdown. With the generous support of our Group leaders, our employees and our shareholders, we also created the Solvay Solidarity Fund to alleviate the hardship endured by the most severely hit. We kept in constant contact, with some 10,000 people working from home, through regular surveys and frequent webcasts open to all, during which I explained how we were navigating the crisis. On those occasions, our employees also expressed particular pride in our ability to support our communities.

Within days, teams had transformed Solvay facilities to churn out urgently-needed, life-saving products. Solvay donated over 700,000 liters of hydrogen peroxide; 350,000 facemasks; 114,000 pieces of Personal Protective Equipment; 1,000,000 bottles of disinfectant gel; materials to produce over 6,700 reusable face shields… The page compiling our colleagues’ initiatives was buzzing with an uninterrupted flow of generous news, acting as an emotional reminder that our activities are essential to the world. Governments concurred – and asked us to keep operating through all lockdowns, worldwide.

“Today, I can proudly assert that we have emerged stronger.”

Ilham Kadri

Our reactiveness as well as our ability to bond with our stakeholders allowed us to navigate the crisis successfully, which is reflected in our financial performance: 2020 was a year in which Solvay achieved an unprecedented level of Free cash flow. This made it possible, in turn, to remunerate our shareholders and pay a special reward to our employees, while at the same time unlocking investments for the future and maintaining our R&I effort.

Two innovations which we brought to the market in 2020 were particularly noteworthy in times of Covid: Amni® Virus-Bac OFF, a solution to make textile yarn permanently antiviral and antibacterial, hence blocking the retransmission of viruses. And our ActizoneTM disinfection technology protects surfaces for 24 hours, killing more than 99.9% of bacteria and viruses, including the flu and human coronavirus. Looking further and beyond, we were proud to announce the creation of a hydrogen platform that will bring together all of our innovative material and chemical solutions to advance the emerging green hydrogen and fuel cells economy, where we see a potential addressable market of €3 billion for the Solvay group.

The Hydrogen platform as well as its Batteries and Thermoplastic Composites (TPC) peers are instrumental in Solvay’s G.R.O.W. strategy, which we have begun deploying resolutely in 2020 – even though the crisis has prompted us to defer the Growth perspectives of our “G” segment. As part of our strategy, we have further accelerated the simplification of our portfolio with seven divestment operations totalling some €1.8 billion in net sales – including Polyamides. In the first quarter of 2020, we also aligned the structure of our GBUs, where relevant, to their new missions as set in our G.R.O.W. ambition. Furthermore, we have undertaken preparations for a sweeping reorganization of our business support activities, called WeShape, which was effectively launched at the outset of 2021.

As a final illustration of our ability to prepare for the future while at the same time navigating the crisis, we unveiled in 2020 our new sustainability ambition, Solvay One Planet, which is inspired by the United Nations Sustainable Development Goals. It features ten measurable commitments in three key focus areas: climate, resources and better life, which we presented to investors at a dedicated ESG webinar on October 2, 2020. We are for instance eliminating the use of coal for energy production, accelerating the circular economy and making paid parental leave accessible to all employees, worldwide, irrespective of gender or sexual orientation.

I am particularly proud that we raised the bar once again, as we aligned with the Science Based Targets initiative and decided to reduce our Greenhouse gas emissions twice as fast than under our previous goal for 2030, effectively closing up with a Paris Agreement trajectory. We more than lived up to our commitments last year, as we substituted coal for cleaner energies in two important production sites. Our emissions fell by 20%, including an 8% structural decrease (unrelated to the global economic slowdown) since 2018, which is more than twice the annual average dictated by the Paris Agreement.

“We bond people, ideas and elements to reinvent progress.”

Ilham Kadri

We are honored to see our sustainability achievements acknowledged by independent observers. Yet we must keep progressing, with objectivity and transparency. We at Solvay acknowledge that we are in some instances not yet where we want to be, and we are activating all the levers we have at our hand to find solutions where needed. Even more importantly, we know for certain that we are part of the solution to create a better world for our children. Chemistry is the mother of all industries and we are present in every value chain; our innovation is instrumental to separate, combine and recombine elements, making products and materials more durable and reusable. Without us, there will be no green hydrogen, no zero emission cars or no circular economy.

We are consequently certain that the combination of our agility in times of crisis, our ability to reinvent ourselves and to develop innovative solutions, all inspired by an engaging purpose, opens fabulous opportunities to create sustainable shared value for all – for our clients, our employees, our shareholders and for the generations to come.

Signature of Ilham Kadri (signature)

Ilham Kadri
President of the Executive Committee and CEO