Underlying EBITDA of €326 million, resilient margin performance; Strong cash generation with FCF of €250 million in Q3; Agreement to divest Oil & Gas, advancing pure play specialty strategy
Q3 2025 Highlights
- Net sales of €1.52 billion impacted by unfavourable year-on-year foreign exchange movements (-5%), lower volumes (-1%); Strong year-on-year growth in Technology Solutions;
- Gross profit of €484 million decreased by 15% year-on-year, primarily driven by lower volumes and unfavorable foreign exchange movements, resulting in gross margin of 31.9%; On a sequential basis, gross margin was unchanged;
- Underlying EBITDA of €326 million decreased by 10% year-on-year organically, primarily due to lower underlying EBITDA in Specialty Polymers and Novecare partially offset by structural cost savings; On a sequential basis, underlying EBITDA decreased by 3%;
- Underlying EBITDA margin remains resilient, expanded 40 basis points sequentially to 21.5%, primarily driven by Specialty Polymers;
- Underlying net profit, Syensqo share of €110 million;
- Operating cash flow of €331 million; Free cash flow of €250 million;
- Agreement to divest the Oil & Gas business unit for an enterprise value of €135 million, or c.7x EV/EBITDA
The third quarter saw us deliver a resilient margin and strong free cash flow generation in a challenging macroeconomic environment. Our strong value proposition, and continued focus on what we can control drove another quarter of sequential EBITDA margin improvement. In addition, we have continued to execute our pure play specialty strategy with the recently announced divestment of the Oil & Gas business at an attractive valuation.
For the balance of the year we continue to see a slower recovery in volumes and have adjusted our full year outlook accordingly, broadly aligned with consensus expectations.
Finally, it has been the privilege of my career to serve Syensqo and its exceptional people for the past seven years. Together, we raised our ambitions, navigated crises, accomplished the historic demerger with Solvay, and launched one of the industry’s most innovative specialty companies. I want to express my deepest gratitude to every team member, whose dedication and belief made this transformation possible. As Syensqo steps boldly into its next chapter, I thank you for your passion, resilience, and the spirit of exploration that continues to shape our shared future. With deep gratitude for the trust and partnership of the investor and analyst community, the best is yet to come.
2025 Outlook
For the fourth quarter, we expect macroeconomic and demand weakness to continue across most of our end markets given evolving tariff and geopolitical dynamics. Over the course of the year, these external factors have seen customers adapting to broader demand uncertainty. For example, we see a slower recovery in Electronics volumes in the second half of the year, as customers manage their shorter-term inventories. In addition, we now expect the previously flagged destocking at a major civil aerospace customer to continue throughout 2025. Nevertheless, strong underlying demand in both civil aerospace and space & defence applications is expected to support strong growth in Composite Materials in 2026 and beyond.
We continue to benefit from cost saving initiatives and are accelerating initiatives to further strengthen our foundations for longer-term growth, targeting more than €200 million of run rate savings by the end of 2026. As demonstrated in our strong third quarter performance, cash flow generation remains a key area of focus and we will continue to take actions to mitigate volume uncertainty.
Our full year 2025 outlook, which also takes into account a further strengthening of the Euro against our major trading currencies, is now as follows:
- Underlying EBITDA of approximately €1.25 billion
- Capital Expenditures to be below €600 million
- Free Cash Flow of approximately €325 million
From a cashflow perspective, 2025 includes outflows related to the separation from Solvay and the final year of material investments related to the expansion of the Tavaux site in France, which are not expected to repeat in 2026.
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This press release may contain forward-looking information. Forward-looking statements describe expectations, plans, strategies, goals, future events or intentions. The achievement of forward-looking statements contained in this press release is subject to risks and uncertainties relating to a number of factors, including general economic factors, interest rate and foreign currency exchange rate fluctuations, changing market conditions, product competition, the nature of product development, impact of acquisitions and divestitures, restructurings, products withdrawals, regulatory approval processes, all-in scenario of R&I projects and other unusual items. Consequently, actual results or future events may differ materially from those expressed or implied by such forward-looking statements. Should known or unknown risks or uncertainties materialise, or should our assumptions prove inaccurate, actual results could vary materially from those anticipated. The Company undertakes no obligation to publicly update or revise any forward-looking statements.
Syensqo is a science company developing groundbreaking solutions that enhance the way we live, work, travel and play. Inspired by the scientific councils which Ernest Solvay initiated in 1911, we bring great minds together to push the limits of science and innovation for the benefit of our customers, with a diverse, global team of more than 13,000 associates.
Our solutions contribute to safer, cleaner, and more sustainable products found in homes, food and consumer goods, planes, cars, batteries, smart devices and health care applications. Our innovation power enables us to deliver on the ambition of a circular economy and explore breakthrough technologies that advance humanity.