Q2 2025: Syensqo results down but margin improvement in key segments
Syensqo’s underlying EBITDA of €335 million increased 8% sequentially with improved margin in core segments. The company hopes to improve results for the second half of the year thanks to the exit from non-core businesses.
Here are the highlights of Syensqo’s 2nd quarter 2025 results:
- Netsales of €1.59 billion impacted by unfavourable year-on-year foreign exchange movements (-4%) and lower volumes (-3%) while pricing remained broadly stable; Year-on-year growth in Novecare;
- Gross profit of €506 million decreased by 13% year-on-year, primarily driven by lower volumes and unfavourable foreign exchange movements, resulting in gross margin of 31.9%; On a sequential basis, gross margin improved by 20 basis points;
- Underlying EBITDA of €335 million decreased by 8% year-on-year organically, primarily due to lower underlying EBITDA in Specialty Polymers; On a sequential basis, underlying EBITDA increased by 8%, led by Specialty Polymers;
- Underlying EBITDA margin contracted by approximately 110 basis points year-on-year organically, but expanded by 190 basis points sequentially to 21.1%, led by improvements in both Materials and Performance & Care;
- Underlying net profit, Syensqo share of €140 million;
- Operating cash flow of €20 million; Free cash flow was a €67 million outflow;
- Share buyback program: repurchased c.494,000 shares, or €30 million; 50% of €300 million program completed
Dr. Ilham Kadri, CEO, comments: “The second quarter saw us deliver on our outlook in a challenging macroeconomic environment. Our strong value proposition, and continued focus on what we can control drove a 8 per cent sequential improvement in EBITDA, resulting in another quarter of resilient margin performance.
“This was also achieved against the backdrop of a significant strengthening of the Euro. Based on what we know today and the actions we are taking, we continue to expect a limited direct impact of tariffs on our full year results. Excluding these external factors, our full year outlook remains unchanged.
“We also remain focused on advancing our transformation and increasing our agility to capture market share. Through the disciplined exit from non-core businesses, we will become a purer play specialty company and following our successful IT and shared service separation, we can now accelerate cost savings initiatives during the second half of the year to go even further to support long-term profitable growth.”
Outlook
Based on the assumptions provided in conjunction with our full year 2024 results (on February 27, 2025), our 2025 outlook remains unchanged.
For the balance of the year, we expect macroeconomic and demand weakness to continue across most of our end markets related to evolving tariff and geopolitical dynamics. These external factors are leading to reduced visibility as customers adapt to broader demand uncertainty. In addition, we have seen a significant strengthening of the Euro versus against major trading currencies, including the U.S. dollar.
Based on current information and subject to potential changes in tariffs, we continue to believe our global manufacturing footprint and proximity to customers, coupled with our mitigation actions should serve us well to manage our direct exposures to these headwinds, with limited impact currently expected to our full year underlying EBITDA.
Therefore, including the combined impacts of foreign exchange movements and tariffs (based on current information) of approximately €100 million, our full year 2025 outlook is as follows:
- Underlying EBITDA of approximately €1.3 billion
- Capital Expenditures to be below €600 million
- Free Cash Flow of approximately €350 million
Given the challenging and uncertain environment, our focus remains on executing our cost saving initiatives as well as accelerating restructuring and efficiency initiatives as we complete the separation from Solvay. We continue to expect the phasing of these cost saving measures to be weighted towards the second half of the year with more than €200 million of run rate savings by the end of 2026. We believe these cost saving and efficiency initiatives will provide a strong foundation for growth in 2026 and beyond.
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.
Cover photo: Syensqo’s booth at JEC World 2025
