Mastering the Essential
Annual Integrated Report 2023

WE MASTER
THE ELEMENTS

ESSENTIAL TO
OUR WORLDSOIN

OLVAYN 202303

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Table of contents

Partial Demerger of Solvay SA/NV and Spin-Offof its Specialty Businesses to Syensqo SA/NV

04

Presidents’ messages

08	Strong foundations
12

Solvay at a glance

22	Business environment and Strategy
50

Sustainable value creation

67

Performance83	Corporate governance statement
139

Risk management

161

Extra-financial statements

245

Financial statements

371	Auditor’s reports and Declarationby the persons responsible
389

Glossary

Until December 8, 2023, Solvay SA/NV owned andcontrolled the Specialty Polymers, Composites, Novecare,Technology Solutions, Aroma Performance and Oil and
Gas Solutions businesses (the “Specialty Businesses”),
and the Soda Ash and Derivatives, Peroxides, Silica, Special
Chem and Coatis businesses (the “Essential Businesses”).
Effective December 9, 2023, the Specialty Businesses wereseparated from Solvay through a partial demerger of theCompany, whereby the shares and other interests held by
the Company in the legal entities operating the Specialty
Businesses, the Company’s rights and obligations under theagreements entered into with those legal entities, as wellas certain other assets and liabilities were contributed to
Syensqo, and ordinary shares of Syensqo were issued andallocated directly to shareholders in Solvay on a pro rata
basis. In connection with the partial demerger, Syensqo
became a publicly listed company independent from Solvay
with its ordinary shares trading on the regulated markets
of Euronext in Brussels and Paris. Solvay’s ordinary sharesremained listed on the regulated markets of Euronext inBrussels and Paris.

The financial results of the Specialty Businesses for theperiods prior to, and until the effectiveness of, the partial
demerger have been reflected in Solvay’s Consolidated
Income Statement, retrospectively, as discontinued
operations. Subsequent to the completion of the partial
demerger, Solvay decided to depart from its previousorganization in four reporting segments (Materials,
Solutions, Chemicals and Corporate & Business Services)and now operates under three reporting segments: Basic
Chemicals, Performance Chemicals and Corporate. For
additional information on the impact of the partial demerger
on Solvay’s financial results, please refer to Solvay’s
consolidated financial statements for the year ended
December 31, 2023 included in this report.
The completion of the partial demerger also impacted thegovernance of the Company, as it led to changes to thecomposition of the Board of Directors and of the Executive
Leadership Team, in addition to amendments to theCompany’s Articles of Association and Governance Charter.
For more information, see chapter “Corporate GovernanceStatement” of this report.

04

CHAIRMAN STATEMENTS O LVAY 2 0 2 3 A N N U A L I N T E G R AT E D R E P O RT

The Solvay
spirit in actionW

hen future generations look back at the long
history of Solvay, stretching all the way to1863, this last year will certainly stand out asa milestone moment.

Mastery also implies the transmission of values and experience, from one person to another, from one team to another,from one generation to another. There is immense beautyand care in the act of genuine transmission.

In early December 2023, our shareholders voted overwhelmingly to approve the partial demerger and the spin-off ofour specialty businesses to Syensqo. This has created an
exceptional opportunity that few organizations are ever presented with: launching a new entity showcasing innovation
and renewal, while still leveraging a distinctive industrial
platform with strong foundations.

Finally, Mastery is about a double ambition: pursuing a demanding performance, while committing generously to anoble purpose.

Pulling this off has been achieved against a difficult external
macroeconomic environment with a background of geopolitical conflict, weak economic growth, high interest rates,
inflation, higher energy prices and high level of regulation in
Europe. Despite all of these challenges, building on all thegreat work accomplished over the last years, Solvay was still
able to deliver a strong financial performance, maintaining
our competitive position and at the same time continuing
to deliver on our ambitious sustainability targets. This is theSolvay spirit in action.
Having served on the previous Solvay Board, I have come toknow the company and its assets well. Solvay has always
been at the forefront of excellence and innovation becauseof the enduring values of our founder, Ernest Solvay: science,an eagerness to learn and improve, entrepreneurship and societal responsibility.
At Solvay, we are thus rediscovering our roots and spreading
our wings. At the heart lies a central concept: Mastery. Mastery is a rich, multi-faceted and profound concept.
It starts with a key mindset: honoring past experiences toguide us for the future. In today’s world we are too often absorbed by the problems of today and planning the future, andtend to forget that each day we walk on paths that have beencreated by our predecessors.
Then, Mastery is about the relentless drive to improve andperfect our scientific and technological capabilities. Like acraftsman, we must continually work and rework until wereach a level of perfection that we can be proud of. We must
both welcome and reinvent traditions.

Our endeavor therefore centers on our mastering of the elements essential to our world. There is a growing demand
for more sustainable products while remaining competitive,
which is why we are focused on applications that help shapea future where everyone thrives. That is the central transformation we are facing. 160 years ago, Ernest Solvay developed the soda ash process and, building on his legacy, we
remain committed to continued innovation and to perfecting
the science of essential chemistry for generations to come.
Nothing is impossible, Ernest Solvay would say, not evenre-inventing his original soda ash process as we recently did,which will result in a significant reduction of our carbon emissions and use of resources such as water.
One of the most important lessons I have learned in a longcareer advising large complex organizations is a very simple
but profound truth: in the end, it is all about people — real
people like you and me, of flesh and blood, fears and hopes,
dreams and ambitions, and with a desire to contribute tonoble goals that create pride. Organization and process areparamount, but in the end it is the human factor that counts
most. Looking at Solvay, at the core of our legacy and our future is our highly motivated and skilled workforce, who do notspare their efforts and energy. Our strength lies in our people
and their values, and how this is transferred from colleague
to colleague, from generation to generation. It is this collective journey that makes us successful, starting at the top of
the company with its leadership, leading all the way to empowering the base.
The new Board of ten directors, including six independentones, is diverse, skilled, experienced, and committed. More
importantly, we have people with the right mindset, wisdom
and ambition to step up Solvay’s performance and delivery.
To generate resilient cash and create sustainable and abundant value for all of our stakeholders. To serve our customers

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

CHAIRMAN STATEMENT

05

in a distinctive manner. To develop our people. To contributeto a more sustainable society. To earn the trust, confidence,and support of our shareholders, our anchor for the future.
We have committed to build a real and effective team with
the Board. A team bound by a deep sense of stewardship andwill to generate collective intelligence.
Building on the concept of Mastery, this Board will support
the Executive Leadership Team as they implement structural
measures to raise the bar in all domains – strategy, mindset
and operational excellence – to make Solvay more efficientand to enhance our ability to continue creating value in thelong term.
So, I want to take this opportunity to express not only mygratitude but the gratitude of the entire Board, to Solvay employees for their unwavering commitment; to the Solvay leaders and Chief Executive Officer, who have strived to set up a
new strategy at pace in doing so raising the bar; to our customers for their trust during this period of change and relying
on our products and solutions; to the Executive Leadership
Team and Board of the “old” Solvay who have made the split
possible, and finally to our shareholders for their continued
commitment and support for the split.
Building on our strong foundations, we embark with confidence and commitment on the next chapter in our history.
The spirit of Solvay is in action.

Pierre Gurdjian
Chairman of the Board of Directors

06

CEO STATEMENT

S

olvay has entered a new phase, marking a significant milestone in our history. I am honored to leadthe company forward, supported by a skilled teamof executives and the dedication of more than
9,000 employees worldwide. I thank the Board for entrusting
me with the responsibility of guiding Solvay into a future that
holds sustainability at its core.
With over 160 years of history, our portfolio spans key chemical sectors and includes five business lines: soda ash, peroxides, silica, rare earths, and fluorine. We hold global market and technological leadership in these areas, along with astrong regional business in Latin America, known as Coatis.
We focus on delivering essential products that play a crucialrole in the manufacturing of items integral to the day-to-day
life of consumers, such as glass for buildings and bottles,
detergents, paper, tires, semiconductors, food, and pharmaceuticals, positioning us across a wide array of markets. Inline with the legacy of our founder, Ernest Solvay, we are committed to mastering the core technologies and materials thatare essential to meeting our customers’ fast-evolving needs,building on our strong foundation.

S O LVAY 2 0 2 3 A N N U A L I N T E G R AT E D R E P O RT

DELIVERING ON OURCOMMITMENTS― In 2023, amid a challenging macroeconomic environment,
we recorded high-quality results. Our net sales reached€4.9bn. Our EBITDA stands strong at €1.2bn, stable versus
2022 on an organic basis, with the EBITDA margin increasing
to a record 25.5%. This demonstrates our ability to maintainsolid financial ground even in the face of declining volumes.
The higher profit and the simplification of our portfolio resulted in a high free cash flow of €0.6bn, with a record conversion ratio of 45.4%, further strengthening our financial health.
Sustainability is at the heart of our operations, reinforcing
our position as market leader and enhancing our competitive
advantage. We are committed to achieving carbon neutrality by 2050, and I am pleased to report that we are on theright path. In 2023, we significantly accelerated our energy
transition efforts. We achieved a 19% reduction in emissions
from our operations (Scope 1 and 2) compared to 2021. We
are actively advancing 27 energy transition projects globally and implementing energy efficiency upgrades across all
our facilities, making substantial progress in the transition

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

to renewable energy sources. These initiatives position us
strongly to achieve our ambitious target of reducing ouremissions by 30% by 2030.
We have made significant progress towards our goal of phasing out coal use in our soda ash plants, and at the beginningof 2024, we announced its complete phase-out at our Green
River, Wyoming, USA, facility. In 2025, our plants in Rheinberg,
Germany, and Dombasle, France, will also cease coal use.
Furthermore, our breakthrough e.Solvay soda ash process
which is currently being piloted at an industrial scale, will put
our carbon neutrality goal within reach by removing our emissions from the soda ash process.
Our emissions upstream and downstream in the value chain(Scope 3 for the “Focus 5” categories) have experienced an
impressive 16% reduction compared to 2021, positioning us
well on our trajectory towards achieving our 2030 target of a
20% reduction. To further this progress, we are collaboratingwith our top greenhouse gas (GHG)-emitting suppliers to better track and reduce emissions from our purchased goods
and services.

CEO STATEMENT

07

Further strengthening our technology leadership position,
we are establishing Europe’s first rare earths hub for a permanent magnets value chain in La Rochelle, France, to meetgrowing needs in the electronics, automotive and clean energy markets. In Saudi Arabia, we plan to construct the world’s first carbon-neutral soda ash facility using our innovativee.Solvay process. This initiative will set a new global standard in competitiveness and sustainability.
To drive excellence and competitiveness, we are transforming the way we operate. This means excelling as leaders inprocesses and cost savings, which we expect to be a major
driver of our EBITDA growth over the next five years. We havestarted deploying initiatives aimed at delivering savings, andwe are confident in achieving our goal of €300 million in annual savings by 2028.

LOOKING AHEAD:AMBITIOUS GOALS
Embracing our founder’s vision, safety is a critical value at
FOR A SUSTAINABLE
Solvay, and we will continue to push the boundaries to reachthe zero accident target. In parallel, we have committed to FUTURE
reducing inequalities by ensuring a living wage for all Solvay
employees by 2026. We initiated a pilot program to assess
our adherence to living wage standards in the U.S., U.K., andChina. The initial results have confirmed our compliance, affirming our status as a responsible employer.
We continue our efforts towards achieving gender balance inleadership in ten years and fostering social dialogue throughthe Solvay Global Forum. Our 2023 initiatives have further
integrated Diversity, Equity, and Inclusion (DEI) into our organization, including enhanced disability inclusion practices
across all levels.

OUR STRATEGY:LEADING WITH PROCESSINNOVATION ANDSUSTAINABILITY― We have a clear strategy. We aim to deliver value to our customers through our leadership positions in every market where
we operate. Our approach to achieving this is to grow in linewith our customers’needs and to innovate in our production processes. Our cutting-edge hydrogen peroxide facility in Taiwan isdesigned to meet the region’s growing demand for semiconductors, while our plant in Livorno, Italy, is introducing a new circular silica unit derived from rice husk ash, which will significantly
boost the sustainability of the tire industry.

Looking ahead, our ambitions are high. Building on our strong
foundation, we aim to further enhance our performance metrics. Our objective is not only to preserve our position in the
top quartile but also to establish new standards for the industry.
When it comes to creating sustainable value and a resilient,forward-looking business model, maintaining capital discipline is key. Our cash allocation strategy will be simplified
and more focused: one third of the generated cash will be directed towards essential capital expenditures, another third
will be allocated to our shareholders, to whom we pledge astable or increasing dividend, and the final third will support
growth initiatives.
I am excited about embarking on this new chapter with
Solvay. Our dedication to steering the industry towards asustainable future, through our mastery of technology andsustainable practices, will drive Solvay’s ongoing transformation. We aim to become a model of operational excellence,paving the way for a sustainable future that sets a standard
for others in our industry. This is our commitment to all our
stakeholders.

Philippe Kehren
Chief Executive Officer

08

STRONG FOUNDATIONSS O LVAY 2 0 2 3 A N N U A L I N T E G R AT E D R E P O RT

Strong foundations— For over 160 years, through continuous changes and transformations, Solvay has remained true to its legacy of innovation,social responsibility, and technical excellence. Over the past ten
years, we have achieved a radical transformation of our company. We deeply reshaped and streamlined our portfolio, withmore than 50 mergers and acquisitions in the past 15 years, exiting cyclical businesses. Our G.R.O.W. strategy and Solvay One
Planet sustainability objectives accelerated the momentum, allowing us to focus on higher growth and higher margin activities
while placing sustainability at the heart of what we do.
Through a gradual process, we have transitioned to more efficient operations to better serve customers and initiateda profound cultural change towards more agility and customer-centricity. We have achieved our financial mid-termtargets three years ahead of schedule and made significant

progress on our sustainability objectives. As a result of our successful transformation journey, two distinct business groups
emerged, focused respectively on essential and specialty chemicals. We decided to separate Solvay into two distinct listedcompanies (Solvay and Syensqo) in order to unlock the full potential of each of these business groups.
On December 8, 2023, our shareholders approved the partial
demerger of Solvay SA/NV and the spin-off of our specialty businesses to a new company named Syensqo. From that date,
we have welcomed the next chapter of Solvay’s heritage built
on the strong foundations of our past and strengthened by ourrecent transformation. And, as has been the case for 160 years,
our products remain at the heart of everyday lives. We are essential. We are SOLVAY.

01

Science,Innovation,
Excellence andLeadershipwithin our DNA
Ingrained in our DNA, you will findscience, progress, innovation,
excellence and leadership that can
all be traced back to our founder,
Ernest Solvay.
What started with the inventionof a synthetic soda ash process,a breakthrough that was moreenvironmentally friendly andrevolutionized the industry of thetime, has since opened the door
to other process innovations. Like
our founder, we never settle when it
comes to creating high-end chemistry.

We believe in science and, with it,
continuous progress.
At the end of the 19th century, wewere at the forefront of the firstindustrial globalization. Today, thanks
to the support of our shareholders
and our unshakeable commitment toprocess innovation and operational
excellence, we are able to maintainour technology and market leadership.
Based on our portfolio of quality
and expertise, we continue to build
upon the strong global leadership
positions existing in every one ofour businesses and lead process
technology improvements andsustainability.
Our culture of performance has
been over 160 years in the making.
We continuously seek to enhance
our performance and respond to
our customers’ essential needs,
expanding our culture of agility
and flexibility. This is how we havemaintained our leadership positions
throughout the years.

STRONG FOUNDATIONSA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

02
Responsible
businessat the heart ofour values
and culture
Since the creation of Solvay,
we have pioneered social welfare
and caring for our people.

weeks of parental leave for all parents,
health insurance, and disability and life
insurance.

Our founder was one of the first
corporate leaders to implement
what we today call Corporate Social
Responsibility (CSR), placing a strongemphasis on responsible capitalism
and the well-being of employees. The
Solvay legacy of CSR lives on throughseveral of our initiatives focused on
the well-being of our employees andour communities. For example, theSolvay Life Saving Rules have been
implemented to continuously improvesafety at the workplace and reinforce
our culture in this field.

In 2020, we launched the Solvay
Solidarity Fund to provide additional
support to our people or communities
facing hardship. Since then, the Fundhas donated more than €10.5 million
to individual and collective causes,
supporting 67 projects in 16 countries.

In the 1880s, Solvay led the way when
it came to social policy, taking careof employees through health andprotection initiatives and forminga key part of the company’s social
policy. We have continued to buildon this legacy through the launchof our Solvay Cares social program.
Solvay Cares provides a minimum
level of company social benefits for
employees worldwide and includes 16

At the cornerstone of our beliefs issocial dialogue. As the first chemicalcompany to establish a partnership with
IndustriALL Global Union back in 2005,
we recently renewed and strengthened
our Solvay Global Forum Agreement andGlobal Framework Agreement with them.
Our efforts to reinforce our employees’
sense of belonging has also included
our first employee share plan launchedin 2022, which achieved an impressive
participation rate ahead of thebenchmark for similar initiatives, with
one out of four employees being Solvay
shareholders – a testament to their highlevel of engagement.

In order to develop and protect ourculture of integrity, we have set up a
Code of Business Integrity as part ofour Ethics & Compliance program.
It applies to every Solvay employee,regardless of location or role, andto all third parties acting on Solvay’s
behalf, including suppliers. Suchinternal due diligence procedures arepivotal to mitigating risk across ourvalue chains.

09

10

STRONG FOUNDATIONS

03
Sustainability
at the coreof our businessand operations

One of the driving forces behind
Ernest Solvay’s initial innovationof the soda ash process was
sustainability.

We have long been committed
to offering our customers moresustainable products and reducing
our impact on the planet basedon clear objectives. Within thepast few years, we stepped up oursustainability ambitions by creating
our Solvay One Planet roadmap,
establishing 10 objectives to reduce
our impact on the climate andnatural resources and to improve
the quality of life of our people andcommunities. This unique approachto sustainability topics provides aholistic view of many areas, such as
biodiversity, circularity, quality of life,and more.
We have built a very ambitious
roadmap to achieve our goal ofcarbon neutrality on Scopes 1 and 2
greenhouse gas (GHG) emissions
by 2050. We have taken big steps
towards reducing our carbon
footprint, heavily investing to phaseout coal for energy production at oursoda ash plants, accelerating the shift
to renewable energy worldwide, andconstantly innovating to make ourprocesses more sustainable and lesscarbon intensive.

S O LVAY 2 0 2 3 A N N U A L I N T E G R AT E D R E P O RT

Furthermore, our solid and unique
Sustainable Portfolio Management(SPM) methodology helps us
embed sustainability in our key
business decisions. And we havemade progress, delivering moresustainable solutions, such as ourflue gas treatment product based on
sodium bicarbonate SOLVair® anda wastewater disinfection treatment
based on hydrogen peroxide, allwhile reinventing a more sustainablesoda ash manufacturing process.
We launched our One Dignity
program, a comprehensive initiative
featuring nine objectives with actionplans designed to accelerate thecompany-wide adoption of a DEI
mindset. What sets us apart is our
specific approach of using equity
and inclusion as building blocks fordiversity. To measure our progress,
we launched an annual Groupwide Pulse survey. Tackling genderinequities, we were among the very
first companies to publish a gender
pay gap report and launch a pay
equity correction exercise covering
mid and senior management acrossthe Group.
As a continuous effort,
sustainability is deeply embedded
in our culture and operations. This
is why we recently increased thesustainability criteria, that now
includes DEI, in employees’ shortterm incentives to 15%.

STRONG FOUNDATIONSA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 304Strongfinancialfoundations

With a long track record of resilient
growth, our financial foundations
are very strong.

of our resilience and our ability
to quickly adapt to unexpected
turnarounds.

Thanks to the profoundtransformation implemented by
Solvay over the past four years anddriven by our G.R.O.W. strategy,
we have repeatedly generated
record results while significantly
strengthening our capital structure.

We have evolved into a uniquecompany within our industry andare positioned among the top
quartile in all measures of financial
performances.

Over the course of that period, we
have been able to deliver consistentstrong financial performance.
This growth occurred in the faceof several unprecedented crises,
such as the COVID-19 pandemic,
Ukrainian war, and energy crisis in
Europe, and is a clear demonstration

We rank in the top positions among
our peers in EBITDA margin, cash
conversion1 and ROCE2.

rating of BBB- (stable outlook).
This robust situation gives us more
flexibility to take advantage of newopportunities.
Overall, it is clear that themagnitude of our transformationand our strong financial situation
are providing solid foundationsfor Solvay as a new global leader,poised and resourced to generate
superior and sustainable value
creation.

We have been able to convert
these strong results into thedeleveraging of our balance sheet,allowing Solvay to open this new
chapter with a very solid financial
position and an investment grade

1. Cash conversion = (Underlying EBITDA– CAPEX from continuing operations)/
Underlying EBITDA.
2. Return on capital employed (ROCE) calculated as the ratio between Underlying
EBIT (before adjustment for the amortization of Purchase Price Allocation) andcapital employed.

11

12

SOLVAY AT A GLANCE

01

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

SOLVAY AT A GLANCE
We master the elements

14	A new chapter

18

14
15

18	New Board of Directors: independentand diverse
18	Our Executive Leadership Team embodies
collective expertise and visionary leadership

Our Vision and Ambition
Unlocking value creation

16	Key figures 2023

20

Governance

Highlights of the year

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

SOLVAY AT A GLANCE

13

14

SOLVAY AT A GLANCEA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

WE MASTELEMENTA new chapter
The successful completion of the partial
demerger marks a significant strategic shift
and positions us as a frontrunner in essential
chemicals on a global level. This pivotal
moment in our rich history prepares us to entera new stage of sustainable growth, building on
our strengths, sharpening our focus on corebusiness areas, and reaffirming our dedication
to market leadership, social responsibility,and decarbonization. We believe Solvay will bebetter able to create sustainable shared value
for all, both now and in the future.

OUR VISION ANDAMBITION— Just as Ernest Solvay and his brother Alfred mastered the soda ash process over 160 years ago, today
we are mastering the elements essential to our world.
From glass windows, solar panels, and microchips toelectric vehicle batteries, hemodialysis treatments,
and green tires – our products are at the heart of everyone’s lives – subtly enhancing everyday life. As wemove into the next chapter of our history, we carryforward our legacy of progress and leadership as we
focus on mastering the essential.
Driven by our founder’s visionary spirit, our mission is
to harness the power of chemistry in order to create
sustainable products that address the world’s mostpressing challenges and needs.
At the heart of our journey is our determination toachieve carbon neutrality. Such a commitment involves introducing process innovations and sustainableproducts while minimizing our environmental footprint.
We are constantly improving, optimizing, and redesigning our processes with these in mind. Through ourcommitment to sustainable practices and our masteryof technologies, we are not just adapting to a changing
world; we are crafting a path to a sustainable futurethat others in our industry may follow.
This is our ambition, our promise to you, as we embark on this new chapter.

SOLVAY AT A GLANCEA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

15

TER THETS
Building on

160 yearsof mastering the elements to craft a path toa sustainable future for the industry

5

main business lines
with leading positions intheir markets

termediates, while our presence in multiple end-markets driven by megatrends strengthens our resilience.
In addition, our unique global footprint, featuring global and regional manufacturing plants, gives us theflexibility to cater to a diverse and sustainability-focused customer base.

More focused to drive greater value

UNLOCKING VALUECREATION— Focusing on our essential chemical businesses
places us in a strong position to reinforce our trackrecord of achieving strong top-quartile margins, generating cash, and delivering attractive returns.

— The decision to spin off our specialty activities toSyensqo marks a significant strategic move and will
unlock value for our shareholders, customers, andemployees. We are a major player in the essential
chemical arena and are positioned to deliver greater
value.

The separation will enable us to:f Bring together businesses that have the same profile, the same requirements, and the same strategic
imperatives. We will be able to build a fit-for-purpose operating model that will generate cost efficiency and support our market leadership position
going forward.
f 
Streamline operations through standardization andend-to-end optimization. This means cutting out
complexity and acting decisively to respond to market dynamics swiftly and effectively.
f 
Focus our investments and human resources on
essential capex and attractive returns. This involves
allocating capital to areas with the highest returns,
including decarbonization and digitization.

A major player in the industry— We operate five main business lines that hold leadership positions in their respective markets. They
include soda ash and sodium bicarbonate, hydrogen
peroxide, highly dispersible silica, fluorine and rareearths formulations. And beyond that, we have a regional leadership in Latin America focused on phenol
and solvents. Our key mono technologies make us avital and reliable supplier of chemical products and in-

16

SOLVAY AT A GLANCEA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3Key figures 2023
At Solvay, we are mastering the elements essential to our world.
We believe in science and we thrive on process innovation.
As a pioneering chemical company with a legacy rooted infounder Ernest Solvay’s pivotal innovations in the soda ash
process, we are dedicated to delivering essential products to abroad array of markets.

Since 1863, we have harnessed the power of chemistry tocreate innovative, sustainable products that address theworld’s most essential needs, focusing on applications
that help shape a future where everyone thrives. Their
purposes include purifying the air we breathe, protecting ourhealth, creating eco-friendly clothing, making car tires moresustainable, cleaning our homes, and supporting the transition
to vehicle electrification and digitalization.

Our five major businesses — soda ash, peroxides, silica, rareearths and fluorine — hold global market and technology
leadership positions, and we have a strong regional business
in Latin America relying on phenol and solvents.

Sustainability is embedded in our operations and culture, andwe are committed to driving the transition towards a carbonneutral future by 2050.

A balanced global presence

41 countries

Net Sales

36%
Europe€4.9bnEmployees

18%
North
America

61%

North
America+9,00020

Europe45
1. Includes the Middle East and Africa.

Asia & Rest of
the world1

Latin
America

10% 16%

EuropeProduction sites

27%

19%

7

North
America

6

Latin
America

Latin
America

12

13%Asia &
Rest ofthe world1

Asia & Rest of
the world1

SOLVAY AT A GLANCEA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

17

Financial indicators

Extra-Financial indicators

2023 vs 2022

2023 vs 2021

Underlying
EBITDA+0.2% (organic basis )€1,246M

Underlying
EBITDA margin+1.0pp25.5%

Free Cash Flow

2

to Solvay shareholders
from continuing
operations€561M

per share

Scope 1 and 26-19%

Scope 37

-16%

Phase out solid fuels8-10%

7.3Mt CO2eq.

12.4Mt CO2eq.
24.4PJ+8.9pp45.4%

Dividend5

Greenhouse gas emissions+17.3%

FCF conversion ratio3

ROCE4

CLIMATE1-2.5pp

20.4%
€2.43

1. Organic growth excludes forex conversion and scope effects. 2. Free cash
flow to Solvay shareholders is the free cash flow after payment of net interests,
coupons of perpetual hybrid bonds and dividends to non-controlling interests. This
represents the cash flow available to Solvay shareholders, to pay their dividend and/or to reduce the net financial debt. 3. FCF conversion ratio = FCF (before netting ofdividends paid to non-controlling interest) / Underlying EBITDA. 4. Return on Capital
employed. 5. Recommended to the Shareholders meeting on May 28, 2024. 6. Total
emissions from Solvay operations. 7. Emissions upstream and downstream in thevalue chain (suppliers and customers) from its “Focus 5” categories which are 1.
Purchased goods and services. 2. Fuel and energy related activities. 3. Processingof sold products. 4. Use of sold products. 5. End-of-life treatment of sold products.
8. Wherever renewable alternatives exist. 9. Number of work-related injuries andillnesses (employees and contractors) resulting from an accident with severity above
first aid, according to US OSHA 29 CFR 1904, per 200,000 work hours. 10. Positive
kickoff in 2023 with pilots conducted in the US, the UK and China, representing 16%
of Solvay’s internal workforce.

BETTER LIFE
Safety0.27

Reportable Injuries andIllness Rate (RIIR)9

Gender parity
Women in mid and senior
management

26.3%

UN living wage initiative
100% employees-1.7pppilot

10

NEW objective

18

SOLVAY AT A GLANCEA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3GovernanceThe completion of the Partial Demerger in December 2023 led to changes in the compositionof Solvay’s Board of Directors, Executive Leadership Team (ELT), and governance principles,
among others. Our new governance will support sustainable value creation for all Solvay
stakeholders.

An independent Board
representing all stakeholders―The new Board, made up of 10 directors, possesses the experience, leadership,
independence, and diversity needed to help Solvay usher in a new era ofsustainable value creation.
Main changes in the Board’s governance include the formal separation between
the roles of the Chairperson and CEO, as well as the election of a Vice Chair.
A testimonial to Solvay’s strong focus on sustainability, the ESG Committee is
now formally integrated into the Governance Charter(1), with missions and KPIs
reflective of recent developments in this area.

Solvay Board of Directors at year end 2023
01. Pierre Gurdjian
Chairman,
Chair of the FinanceCommittee,
Independant Director
02. Philippe Kehren
Chief Executive Officer
03. Thomas Aebischer
Chair of the Audit andRisk Committee,
Independant Director

Separate Chair
and CEO

60%

independent

04. Aude Thibaut deMaisières
Vice Chair, Chair of
the ESG Committee,
Reference
Shareholder Director
05. Wolfgang Colberg
Chair of theCompensation
Committee,
Independant Director
06. Marjan Oudeman
Chair of the Nomination
Committee,
Independant Director

07. Thierry Bonnefous
Reference Shareholder
Director
08. Melchior de Vogüé
Reference Shareholder
Director
09. Annette Stube
Independent Director
10. Yves Bonte
Independent Director

Our Executive
Leadership Team
embodies collective
expertise andvisionary leadership―Solvay’s five new ELT members bringstrong expertise in terms of people
leadership, energy transition, costand process excellence, and capitaldiscipline. Their terms of office havebeen extended to four years, providing aguarantee of stability for Solvay.

Philippe Kehren
Chief Executive Officer
 1. Alexandre Blum
1
Chief Finance and Strategy Officer
12. Lisa Brown
Group General Counsel and Corporate
Secretary
13. Mark van Bijsterveld
Chief People Officer
14. Lanny Duvall
Chief Operations Officer

10

6

5

6

30%

4

directors

nationalities

New Board
members

women

members1

woman

nationalities

1.The Governance Charter defines the role and mission, functioning, size, composition, training and evaluation of the Board. A new version was approved by the Board on
December 9, 2023 and is available on www.solvay.com.

SOLVAY AT A GLANCEA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

01.

02.

03.

04.

05.

06.

07.

08.

09.

10.

11.

12.

13.

14.

19

20

SOLVAY AT A GLANCEA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3Highlightsof the year
01
02
SOLVAY TO LAUNCHINNOVATIVE BIO-CIRCULAR
SILICA IN EUROPE
We are investing at our Livorno,
Italy, site to launch our first unit ofcircular highly dispersible silica(HDS) made from rice husk ash. It
will significantly increase the useof sustainable raw materials andreduce the CO2 footprint in the tire
industry.

03

SOLVAY SHAREHOLDERS APPROVE
THE SPIN-OFF OF THE SPECIALTY
ACTIVITIES TO SYENSQOAt Solvay EGM, on December 8, 2023, ourshareholders approved the Partial Demerger of Solvay
SA/NV and the spin-off of our specialty businesses
to a new company named Syensqo. Focusing on our
essential chemical businesses places us in a strong
position to reinforce our track record of achieving
strong top-quartile margins, delivering resilient cash
generation and attractive returns.
f Read page 14

f Read page 35

HIGLIGHTTHE
COMMITTED TO ENSURING A FAIR LIVING WAGE
TO ALL EMPLOYEES BY 2026

We joined the UN Global Compact living wage initiative andare assessing our living wage equity with plans to close any
potential gaps within the company by 2030, starting with
China, the UK, and the US.
f Read page 46

04

SOLVAY TO SUPPLY TECHNOLOGY
LICENSE FOR HYDROGEN PEROXIDEMEGAPLANT TO GUANGXICHLOR-ALKALI CHEMICAL IN CHINA

This agreement will also support the strategic
growth of our hydrogen peroxide business in China,
particularly in the southern part of the country.

SOLVAY AT A GLANCEA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

2105

INAUGURATION OF A STATE-OF-THEART ELECTRONIC-GRADE HYDROGENPEROXIDE PLANT IN TAIWANA MILESTONE IN OUR PLAN TO DEVELOPA MAJOR HUB FOR RARE EARTHMAGNETS IN EUROPE
Our agreement with Cyclic Materials will provide
our site in La Rochelle, in France with recycled
mixed rare earth oxides (rMREO), which areessential raw materials for the production of rareearths used in magnets and electronics. We are
expanding rare earths operations at this site as we
aim to become a leading European player in thevalue chain for rare earth magnets.
f Read page 31

Built through our joint venture with Shinkong
Synthetic Fibers, this plant will primarily address
the increasing demand for semiconductors
in Taiwan, leveraging our global technology
expertise.
f Read page 31

07
SOLVAY AND ENOWA TO
BUILD FIRST CARBONNEUTRAL SODA ASH PLANT
IN SAUDI ARABIA BY 2030

08

TS

PRODUCTION OF GREENHYDROGEN FOR OURPEROXIDES ACTIVITY IN
ROSIGNANO, ITALY

In a joint development with Sapio,
we will establish Europe’s first
hub for the production of greenhydrogen peroxide by mid-2026
and help decarbonize the plantand our products.
f Read page 38

06

Solvay is partnering with ENOWA,
NEOM’s energy and watercompany, to create the world’s
first carbon-neutral soda ash
production facility in NEOM, Saudi
Arabia. This partnership paves theway for a new global benchmark,championing competitiveness,circularity, and carbon neutrality.

OF
YEAR
f Read page 52

09

SOLVAY COMPLETES COAL PHASE-OUT AT
ITS US GREEN RIVER SODA ASH PLANT

Affirming our commitment to pursue sustainable
operational practices, our plant at Green River,Wyoming has stopped using coal. The decision
to power this strategic, natural soda ash facility
with natural gas enhances Solvay’s long-termcompetitiveness and sustainability.
f Read page 37

22

BUSINESS ENVIRONMENT & STRATEGY02

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

BUSINESSENVIRONMENTAND STRATEGY
Focusing on excellence and sustainability

24	Story : STAR Factory program
expands, transforming ourindustrial sites
26	Sustainable megatrends
driving our end-markets
26
28
29

Efficient and sustainable resources
Renewable energy
Evolving demographics

30

Strategy: four core priorities

30	Deliver value for customers through market
leadership
31
Drive excellence and competitiveness
36
Reinforce sustainability commitments
36— Climate40— Nature45— Better life
49
Prioritize focused cash allocation

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

BUSINESS ENVIRONMENT & STRATEGY

23

24

BUSINESS ENVIRONMENT & STRATEGYSOA
N LVAYN U A L 2I0N2T3E GAR
NATN UEADL RI N
EP
TO
EG
RT
R AT
S OELVAY
D R E P2O
0 RT
23STAR Factory program
expands, transforming
our industrial sitesW

ith both short- and long-term goals, our STAR
Factory program aims to create a radical transformation in all of our plants in order to drastically
improve their performance, competitiveness and sustainability. The program addresses all aspects of the plants, suchas safety, operational performance, competitiveness, people
development, and sustainability, with digitalization acting as a
key accelerator for these changes.
Launched in 2021 among pilot sites, the program has provento be a real game changer in terms of business and environmental performance. Not only does it provide a frameworkto efficiently implement our new operating model and energy transition roadmap at all of our sites, but it also helps toprioritize resources to support each one. By upgrading thecapabilities and operational efficiencies of our plants, we will
be able to better meet the increasingly higher expectations ofcustomers and of the communities around. It is now underway
at half of our industrial sites and will be implemented at all
45 of our sites before mid-2024.
Within the program, each plant defines its own unique roadmap and sets bold objectives that address five main areas:f Safety, aiming for zero accidents.
f Operational excellence: Implementing best practices andleveraging digital technologies to achieve and maintainbest-in-industry excellence.
fS ustainability: Reducing environmental footprint, improving diversity, equity and inclusion (DEI) performance andbeing a responsible community partner.
f Digitalization: Accelerating delivery of digital- and data-enabled value for customers.
f People development: Upskilling our manufacturing teams,
empowering them, and developing future talents.
The STAR Factory program’s mindset – Standardize,Transform, Accelerate, Repeat – reflects our new operating
model. Through sharing best practices and duplicating andapplying them to all sites, we will be able to streamline ouroperations and further leverage our excellence, elevating
our performance. STAR Factory is a drastic change initiative
where people engagement plays a critical role to drive cultural change and inspire teams, making it a success.

NICOLAS DUGENETAY

Site Manager, Rosignano, Italy“Our 'Zero Events' Safety program isbuilt on partnerships with the suppliers
and leverages technology tools like3D goggles.”Gaining positive momentum
at our Rosignano site
— Following a roadmap consolidation exercise in 2022, ourRosignano, Italy, site implemented STAR Factory at the end of2023. Since beginning its journey, the site has seen progress
made in several areas, specifically competitiveness, sustainability and safety, with additional plans to enhance customer
satisfaction, employee engagement and digitalization.
The site has made considerable advancements in optimizing
their energy consumption and achieving energy efficiencies.
It also reduced well water use for industrial purposes by 80%
and freshwater intake by 25%. This has all been made possible by high employee engagement as the site continues tofurther develop its well-being at work initiatives.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

BUSINESS ENVIRONMENT & STRATEGY

25

100%

Sites involved by mid-2024>300kt CO2
Emissions abatedat the end of 2023

STAR Factory set to boost
sustainability efforts and moreat our site in Collonges

We talk to…

SEBASTIENDUVALSite Leader, Collonges,
FranceOur Collonges, France, site has
already taken significant steps
aimed at achieving its sustainability
commitments, such as theexecution of their project to build
an electrical furnace to replace theexisting fuel-oil powered one. Thereis potential to achieve even more byjoining the STAR Factory program.

Can you tell us about
the site's STAR Factory
journey?
Sebastien Duval — We spentsome time in 2023 building
the site roadmap, beginningwith defining the site’s vision
and working with streams
focused on specific topics
such as quality, safety,
digital, lean management,
environment and energy. We
also launched several quickwin initiatives that included
increasing our capacity torecycle, reusing 5% of oursecond-choice products that
do not match customers’
expectations in order tomanufacture new ones andcontinuing to expand ourmultimodal transportation
to save on cost and reduce

CO2 emissions linked totransport.

reducing our environmental
impact.

What are yourexpectations of the
program for your site ?

How will thisinitiative impact yourstakeholders?

S.D. — STAR Factory
provides resources for
implementing key initiatives
that will make a difference,
acting as transformation
levers to improve the site’scompetitiveness, safety,
people engagement andother dimensions, thanks
to new digital tools for
instance.
The program also provides
an opportunity to empower
people, giving employees
a chance to learn andgrow. People expectations
include taking a transversal
approach to set up toolsthat enable quick action
implementation and

S.D. — Local communities
will benefit from ouractions with smarter
solutions to reduce our
impact on biodiversity andwater resources, notably
by reusing and recycling
wastewater. STAR Factory
will also help us provide
benefits to customers that
include improved productquality, reliable supply,
flexibility and availability,
which are key as we need tobe agile and respond swiftly
to customers expectations.

26

BUSINESS ENVIRONMENT & STRATEGYSOA
N LVAYN U A L 2I0N2T3E GAR
NATN UEADL RI N
EP
TO
EG
RT
R AT
S OELVAY
D R E P2O
0 RT
23

Sustainable megatrends
driving our end-markets

Our portfolio is aligned with key societal
megatrends that drive the leading trends ineach of our businesses’ main end-markets,
such as the increased use of renewableenergy, the drive towards sustainable
resources and resource efficiency, anddemographic evolution. These trends play
to Solvay’s strengths across its businesses
and end-markets, providing it with unique
opportunities in each of its main businesslines.

Sustainable andefficient resources

Sustainable and efficient
resources
Renewable energy

Evolving demographics— As a result of customers’ strong demand for resource-efficient solutions driven by the growing pressure on protecting biodiversity and natural resources,
there is an increase in industrial innovation and manufacturing methods that incorporate the principles ofrecycling and the circular economy.
Consumer behaviors have evolved, with increased preferences for organic and natural products that utilize
sustainable raw materials, and have a reduced impact
on the environment. Consequently, our customers embrace and accelerate trends related to sustainability,
carbon neutrality, and sustainable sourcing.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Shifts and challenges markets facef Increased focus on sustainable practices and environmental responsibility.
f Growing demand for circular economy models, recycling, and waste reduction.
f A
doption of green chemistry principles and renewable feedstocks.
f Rising interest in bio-based materials and advanced
technologies for eco-friendly alternatives.
f E
volving regulatory frameworks focused on environmental protection and product safety.
f E
volving regulations around emissions, waste disposal and hazardous materials.

Opportunities for Solvay
Our products help save resourcesf Soda ash for flat glass used in double and triple
glazing meets the increased demand for insulationmaterials in construction.
f M ore than 80% of residues generated from flue gas
cleaning through our SOLVAir® technology can berecycled into purified brine, serving as a circular raw
material in soda ash manufacturing.
f Hydrogen peroxide is used in emerging applications
and technologies such as urban mining and battery
recycling, enabling recovery of scarce metals fromelectronic waste and end-of-life batteries.

BUSINESS ENVIRONMENT & STRATEGY

27

We answer customers’ needs for sustainable
resourcesf Developed from a renewable source, our Augeo®
line of bio-based solvents offers a readily biodegradable, safer and low-carbon alternative to petrochemical solvents for home and personal careindustries.
f I
nvestment in sodium bicarbonate production to
support growing demand in our SOLVAir® range
which provides flue gas cleaning solutions.
f Launch of SCS-certified Rhodianyl polymer with
100% recycled content, a high-quality polyamide
6.6, for the consumer goods and engineering plastic markets.
f 
Our Alve-One® chemical blowing agents are used
for foam insulation in various markets such as theautomotive industry. Made from sodium bicarbonate, they provide a safe and efficient alternative
to substances like ADCA1, with ten times less CO2
emissions.
f Solvaclean®

provides the semiconductor industry with an alternative cleaning option made fromfluorinated gas mixtures with much lower environmental impact.
f Shifting highly dispersible silica production to biobased raw material derived from rice husk ashes
will offer the tire industry a circular silica with a reduced carbon footprint.

f Oxystrong®, a safe and sustainable solution for municipal wastewater disinfection made of hydrogen
peroxide and acetic acid, enables wastewater to berecycled for irrigation.
f O
ur new soda ash process, e.Solvay, is expected toreduce CO2 emissions by 50%, and the consumption of natural resources, to result in 20% less waterand salt and 30% less limestone.

>5%

CAGR 2023-2030
Demand forSolvay's sodium
bicarbonate for
SOLVAir®

50%

Consumers readyto pay more for a
product designed
to be reused or
recycled2

1. Azodicarbonamide, classified as a Substance of Very High Concern by REACH.
2. Accenture 2019.

28

BUSINESS ENVIRONMENT & STRATEGYSOA
N LVAYN U A L 2I0N2T3E GAR
NATN UEADL RI N
EP
TO
EG
RT
R AT
S OELVAY
D R E P2O
0 RT
23

Renewableenergy— Renewables, including solar, wind and biofuel, are essential for transitioning to a less carbon-intensive andmore sustainable energy system. The increased investment in this area reflects an acceleration in demand forclean energy supplies to tackle the ongoing global energy and climate crises.

Shifts and challenges markets facef Increased focus on sustainable practices and environmental responsibility.
f R ising interest in advanced technologies for
eco-friendly alternatives.
f Evolving emissions regulations.

Opportunities for Solvayf U sing high-quality soda ash for flat glass in solar
photovoltaic panels to meet increased demand forcleaner energy.
f Developing a technology to separate rare earths
elements to be used in the production of innovative rare earths permanent magnet solutions fordiverse markets like electric vehicles and clean energy (wind power). We are investing at our plant in
La Rochelle, France, to develop a hub that will help
Europe create more autonomous and sustainable
solutions in these areas.

~9%

CAGR 2023-2030
Demand for Solvay's soda ash in
photovoltaic panels

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

BUSINESS ENVIRONMENT & STRATEGY

29

Opportunities for Solvay
Supporting the need for high quality, safe, andsufficient food

Evolving
demographics— The world’s population is projected to reach 9 billion
in 20371. This unprecedented growth is due to the gradual increase in the human lifespan resulting from improvements in public health, nutrition, personal hygiene
and medicine, as well as high and persistent levels of
fertility in some countries. Managing this will require
constant improvements in healthcare and hygiene, as
well as solutions to ensure adequate food and watersupplies. Within the industry, it means creating products that help address these challenges and acting
responsibly, addressing climate change, social inequality, and improving the quality of life for impacted communities.

Shifts and challenges markets facef

 ecognizing the impact of population growth onRoverall chemical demand.

fAcknowledging consumption growth from the expanding middle class.

f onsidering the impact of urbanization trends onCsupply chain logistics and distribution — produce
local to supply local.

46.6 million

plastic bottles/carton containers sanitized peryear with INTEROX® AG

1. United Nations Report, World population prospects 2022.

f ur sodium bicarbonate, which is used as a leaveOning agent for bakery, for effervescent drinks andas a feed ingredient for ruminants, and swine andpoultry breeding, meets the increased demand for
ingredients, ensuring high quality and food safety,
as well as improved performance and wellbeing forlivestock.

f

INTEROX® Aseptic Grade (AG) is used to provide
sustainable packaging, as it sterilizes paperboard
carton containers and plastic bottles prior to fillingwith UHT or pasteurized food.

f oda ash is in high demand within the food inS
dustry, as it is used for glass containers and helps
reduce plastic in recyclable food packaging.

High-performing products for the pharmaceuticalindustryf ur pharma-grade Bicar®, a high-purity sodiumObicarbonate, is used as an active pharmaceuticalingredient (API), as an effervescent excipient, or toprovide electrolytes to stabilize the pH in hemodialysis.

f he INTEROX® range of high-purity hydrogen peT
roxide offers the highest possible sterilization quality on the market and serves as a disinfectant for
medical devices.

Enabling cleaner mobilityf oda ash is used in mineral extraction and the proS
duction of lithium carbonate for Li-ion batteries topower electric vehicles.

> 1 million

patients treated with our Hemodialysis Bicar®
solutions every year

30

BUSINESS ENVIRONMENT & STRATEGYS O LVAY 2 0 2 3 A N N U A L I N T E G R AT E D R E P O RT

Strategy:four core priorities

We announced our ambition to maintain ournumber one market positions, become thebenchmark on costs, sustaintop-quartile
profitability and returns, and deliver carbon
neutrality through process innovation. To
help us deliver on these goals, our strategy
centers around four core priorities consistingof market leadership, cost and processleadership, energy transition, and capitaldiscipline.

12

MARKETLEADERSHIPEXCELLENCE &COMPETITIVENESS

1

DELIVER VALUE FOR
CUSTOMERS THROUGH
MARKET LEADERSHIP
Strong competitive advantages— We operate five major businesses and one strong regional business in Latin America, and we hold leading positions
in every single one of them. Our strong position is primarily
due to a combination of advantages such as product quality and safety, our expertise, and leading process technology
strengthened by continued innovation, reliable supply chains,
and a well-balanced geographical footprint of manufacturing
sites ensuring proximity with customers. Our cost-competitive position is supported by our proprietary technologies,
vertical integration in the value chain of our main businesses,
our track-record of continuous improvement, and operational
excellence.
In addition, we benefit from long-term growth trends that are
in line with GDP growth in our principal markets and strong
tailwinds from sustainable megatrends.

A balanced portfolio ensuring bothresilience and further value creation

3

SUSTAINABILITYCOMMITMENTS

CASH
ALLOCATION

4— Approximately 75% of our product portfolio, including soda
ash, hydrogen peroxide, and silica, is growing alongside global economic growth. These essential products make us resilient through economic cycles. They are critical inputs fora wide range of consumer and industrial products. For instance, our soda ash serves markets such as glass used for
double and triple glazing for insulation, a strong driver in theconstruction market.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

The remaining 25% of our portfolio serves markets that are
growing at a faster rate than global economic growth, driving
value further. To illustrate:f  Our soda ash goes into lithium carbonate that is used inbatteries, a market that is growing at 20%1.
f  
our green solvents for industrial cleaning products, paints,
and coatings benefit from a 15-20%1 growth in their markets.
f  
Our new circular silica based on rice husk ash will be usedto produce more sustainable automotive tires and this market is growing at 25%1 — an example of how our process
innovation helps us answer our customers much-neededsustainable solutions.
f  
Our electronic grades of hydrogen peroxide are used inmicrochips manufacturing, a segment that is growing at
25%1 per year.

Capacity expansion and partnerships to
support market leadership
The way we are strengthening our position in trona-based
soda ash in the United States illustrates our strategy well.
After taking full ownership of the Green River, Wyoming, site,
we are expanding our production capacity by 600 kt, withstart-up scheduled in 2025. This expansion will meet thegrowing need of our customers in the Americas and overseas for a secure and cost-competitive source of supply
and enable us to bring lower-carbon-intensive soda ash to
the market. We also increased sodium bicarbonate capacity
at our Devnya, Bulgaria site by 200kt in anticipation of highgrowth rates.

A MILESTONE FOR THE RARE EARTH
PERMANENT MAGNETS EUROPEAN SUPPLYCHAIN
For decades, we have been the technology leader in rareearths separation, purification, finishing, and formulation. In
early 2023, we signed a memorandum of understanding with
Cyclic Materials, a Canadian cleantech startup that produces
sustainable rare earth elements for downstream processing.
Under this agreement, Cyclic Materials will provide oursite in La Rochelle, France, with recycled mixed rare earthoxides (rMREO). These are key raw materials for our plant tosuccessfully produce circular rare earth oxides for magnet
manufacturing, electronics, and automotive catalysts. The
move comes as we are implementing plans to develop amajor hub for rare earth magnets in Europe, specifically our
expansion of rare earths operations at our La Rochelle site.

1. Market annual Growth Rate 2022-2028 (internal source).

BUSINESS ENVIRONMENT & STRATEGY

31

Opening a state-of-the-art electronic-grade hydrogen
peroxide plant in Taiwan— Built through our joint venture with Shinkong Synthetic
Fibers, this plant will primarily address the increasing demand for semiconductors in Taiwan, leveraging our global
expertise. With an annual production capacity of 35,000 tonsof electronic-grade high-purity hydrogen peroxide crafted tomeet the stringent global market standards, it will play a pivotal role, as this product is a vital chemical agent in integrated
electronic circuit manufacturing. Full-scale production isplanned for early 2024.

2

DRIVE EXCELLENCE AND
COMPETITIVENESS
Simplification, standardization anddigitalization drive our new operatingmodel— As part of our 2028 financial objectives, we announced
that the partial demerger would allow us to generate approximately €300 million of gross savings (i.e. excluding theeffect of any inflationary increases) from our new operating
model. Simplification, standardization and digital transformation will significantly reduce costs, while our process innovation leadership, with sustainability at its heart, will deliver more progress over time. This will enable us to further
anchor our leadership in our markets and create more value
for our stakeholders. Lanny Duvall, Chief Operations Officer,
explains how.

32

BUSINESS ENVIRONMENT & STRATEGYSOA
N LVAYN U A L 2I0N2T3E GAR
NATN UEADL RI N
EP
TO
EG
RT
R AT
S OELVAY
D R E P2O
0 RT
23Interview withLANNY DUVALL

Member of the Executive Leadership Team,
Chief Operations Officer

Can you describe Solvay's
new operating model?
Lanny Duvall — Being an essential
chemicals company gives us a clear
and simple framework which allows
us to focus on delivering value toour customers. Our businesses now
have the same profile, requirements
and strategic imperatives, allowing
us to be more efficient and act faster.
This helps us build a fit-for-purpose
operating model with a strong central
governance that will generate cost
efficiency.
We will drive simplification andstandardization, duplicating whatworks in one organization. Soda
ash, peroxides and silica represent
70% of our assets and are based on
three technologies. We will focus onefficiently scaling our improvements
across these technologies.
We are also incredibly fortunate
to have talented people who are
already driving transformations within
their own plants and organizations.
Looking forward, we will lift up thosebest practices and implement them,creating standards. Safety remains
our core value and we will continue
to progress towards our goal of zero
injuries and incidents.
In addition, we will continue to drive
process innovation across ourbusinesses, investing to become safer
and more reliable, make our operations
and products more sustainable andcost-competitive, and disrupt themarket. Examples include e.Solvay, ourbreakthrough soda ash manufacturing
process, and our new circular silica fortires.

How will Solvay achieve
its ambition to become theindustry benchmark on
costs?
L.D. — Our achievements will come asa result of our efforts in three areas:
implementing a standard operating
strategy, creating a simplified ERP
landscape and leveraging our digitaltransformation.
Our first step is to implement an
operating strategy that will deliverlean and efficient operations. We havea wide range of operational maturity
across our organization, with someplants having elements that are
best-in-class while others can still be
improved.
For example, we have several plantsthat have world-class predictive
maintenance practices resulting inhigher plant availability and lower
cost. However, these practices weredeveloped in isolation. There are manyother similar examples across thecompany.
Furthermore, creating a simplified ERP
landscape will enable efficiencies inmany of our support functions, suchas supply chain and logistics. This
critical component will help us movefrom being top-quartile to becoming

the industry benchmark in terms ofgeneral and administrative expenses.

Can you further explain therole of digital transformation
as a key enabler?
L.D. —This is our biggest opportunity
to improve our business in every
dimension. In digital, it all starts withdata. We are in the process of creatinga structured data platform where themajority of our improvements willtake place. We simplified the digital
agenda to focus on short- to mediumterm opportunities while creating theopportunities to explore advanced
tools.
As an example, there are multiple
facilities that have implemented an
IoT strategy to improve the reliabilityof our assets. We have demonstrated
a significant improvement in the costand reliability of our assets. As aresult of the effort to create a clear
data structure we can now implement
this improvement across all of ourplants. This is just one example. We
have a whole list of improvements inall of our technologies and the factthat we have repeatable technologies
that allow us to go further and faster.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

BUSINESS ENVIRONMENT & STRATEGY

33

Process innovation to make ouroperations more sustainable“Our achievements will comeas a result of our efforts inthree areas: implementing astandard operating strategy,
creating a simplified ERP
landscape, and leveraging ourdigital transformation.”

How will you implement thisstrategy across the company?
L.D. —There is still more to tackle
to drive excellence and efficiency inthe organization. We are working ontransforming how we operate companywide, looking at all aspects to standardize
business performance with a strong central
governance.
To support this, our STAR Factory programis being deployed in all 45 sites. It has
proven to be a realgame-changer in termsof business performance, providing aframework to efficiently implement our
improvements across our sites andprioritize resources to support. The STAR
Factory program is so successful that
we recently launched STAR Operations to
support the company-wide transformation.
These are the activities that will ensure that,in addition to being low cost and highly
competitive, we are safe, environmentallyconscious, and careful about being a
responsible partner in the communities
where we operate. It will also be a key lever
to attract and retain talent.
We already have the elements for success.
Our teams are hard at work building on
the momentum that we have, and I am
confident we will deliver on our commitment
to make our plants “THE benchmark” in theindustry.

— Without process innovation, Solvay would not be the industry leader that we are today. Process innovation is in our
DNA. It has enabled us to continuously disrupt the industry
and we will continue to do so. By improving or reinventing
our processes to make them more competitive and sustainable, we will strengthen our market leadership. Here are two
examples of how we are mastering the elements essential
to our world.

204

28

6

€40 M

employees

major R&I centerspatents filed in 2023

R&I effort

160 years of mastering process
innovation…
1861
Schaerbeek pilot
plant, Belgium

1863
Ernest Solvay inventsa new process for
producing soda ash

1866
Solvay builds firstsoda ash industrial
plant in Couillet site,
Belgium

1958
Solvay’s firsthydrogenperoxide (H2O2) plantin Jemeppe-surSambre, Belgium

1990
Solvay invents
precipitatedsilica for green tires

1996
Acquisition of
Devnya, Bulgaria,
the largest European
soda ash plant

2011
World’s largest H2O2
mega-plant inThailand2022
Launch ofbreakthroughe.Solvay process

34

BUSINESS ENVIRONMENT & STRATEGYS O LVAY 2 0 2 3 A N N U A L I N T E G R AT E D R E P O RT

Our e.Solvay, a game-changer in the soda ash
industry— 160 years ago, Ernest Solvay transformed the soda ash
industry with a process that surpassed the existing Leblancprocess. Solvay’s process was much more effective, competitive, and sustainable. Our founder established the continuous cultivation of innovation into our DNA and today, we
carry on his legacy, once again reinventing our process tostay ahead of the competition.
To provide our customers with the sustainable and competitive products they require, we need to go beyond decarbonizing our plants, phasing out coal, and adopting renewableenergy sources as we are currently doing. We must change
the process itself. Accounting for a significant amount of
our emissions, our founder’s process produces high levelsof GHG emissions related to the steam generation required
as part of it.
To address this, we are once again at the forefront of innovation, reimagining the soda ash production process resulting
in our patented new e.Solvay technology. After investing acumulative €40 million in research over the past 30 years, today, we are the only one in the world to propose such a breakthrough technology that adopts an electrochemical process
powered by renewable energy.
We built a pilot production unit at our research center in
Dombasle, France, to validate the new process at an industrial scale. It is currently running in shifts and can produce
500t of soda ash per year. Even though this is 1/1000 of atypical soda ash plant operation, it is an appropriate scale-up
for an electrochemical process. The pilot study will enable us
to make necessary adjustments.

Complementing our energy transition program, this technology replaces lime kilns with an electrochemical process thatcan be powered by renewable energy instead of fossil fuels
while requiring 20% less energy than the existing process. It
will reduce our CO2 emissions by 50% compared to the current process. Because it is more efficient, it will also reduce
our consumption of natural resources, specifically 20% lesswater and salt and 30% less limestone, while significantly
reducing the limestone residues. Before 2030, our existing
plants will gradually be converted to e.Solvay. From 2030
onwards, we will build new greenfield plants using this technology. This transformation will enable us to achieve carbon
neutrality on Scope 1 and 2 emissions by 2050.
Reducing our energy requirements and dependence on fossil fuels will improve our competitiveness and ability to keep
up with customer demand overall. Through this more sustainable e.Solvay process, we will also set a new standard forthe soda ash industry.

50%

reduction of CO2
emissions20%

less water and salt

30%

less limestoneA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

BUSINESS ENVIRONMENT & STRATEGY

35

A bio-sourced silica reducing carbon footprintof the tire industry— As a leader in highly dispersible silica (HDS), we are continuously developing breakthrough innovative products inpartnership with customers to improve the sustainabilityof the tire industry. When added to a tire, our HDS helps decrease the CO2 emissions of thermal engines by approximately 7% and extends the battery range for electric vehicles up
to 10% without wear compromise by combining best-in-classtechnologies, while improving the lifetime of tires and thegrip performance for safety.
Tire manufacturers have set up ambitious targets in termsof sustainable raw materials, and precipitated silica is instrumental to achieving them. For example, Michelin has a target
of using 40% sustainable raw materials by 2030 and 100% by
2050, while Pirelli is targeting 60% by 2030.
In response, Solvay has developed a patented proprietary process for biosourced HDS from rice husk ashes, a rice byproduct, making it a circular material. This breakthrough silicate
process provides a circular solution, giving a second life torice husks ashes in local value chains. Both customers andour planet benefit from this new process, which features acircular HDS with 100% locally sourced raw materials, a 35%
reduction of CO2 emissions per metric ton of precipitated silica, thanks to a less-energy-intensive manufacturing process,and the same performance of current grades, shortening thequalification process. This project makes Solvay the first
HDS producer in Europe with a circular production. This newprocess is under industrialization at our plant in Livorno, Italy,
with production expected to begin in early 2025.

This launch is only the beginning of our silica circular journey.
The new generation of precipitated silica will also be able toaddress needs in other markets, such as Home & Personal
Care and Feed & Food, where silica is used in products ranging from toothpaste to animal feed in all regions, as circular
projects are being investigated in Asia and the Americas. For
circular HDS, a promising future awaits!

35%

reduction of CO2
emissions per
metric ton

100%

locally sourced

2025

starting production

36

BUSINESS ENVIRONMENT & STRATEGYSOA
N LVAYN U A L 2I0N2T3E GAR
NATN UEADL RI N
EP
TO
EG
RT
R AT
S OELVAY
D R E P2O
0 RT
23

Climate3

REINFORCE OURSUSTAINABILITYCOMMITMENTS
Sustainability is key for Solvay. It secures our position as aleading supplier for our customers and preserves our competitive advantage in the long run. With the spin-off of Syensqo
in December 2023, we have closed our Solvay One Planet
roadmap and opened a new chapter for our sustainability
commitments as the new Solvay. We look to provide thebest results when it comes to our commitments, including
reaching carbon neutrality on Scope 1 and 2 by 2050 and improving the quality of life for our employees and communities with a safety goal of zero accidents, and gender parity in
mid and senior management within ten years. We continue todrive progress, committing to a living wage for all employees
worldwide by 2026 (as defined by the UN Global Compact
Initiative).

2030 goals
ClimateSafety (RIIR 4)

Aim for zero

-20%
Scope 32

f by 2030

Coal3 Phaseout
f by 2030

Carbon neutral by 2050
(Scope 1 and 2)-30%
2023: 7.3Mt CO2eq.
-19% (-5% structural)

1

f by 2030

Baseline 2021

Greenhouse gas emissions
Scope 1 and 21

Better life

Greenhouse gas
emissions-30%
Scope 1 and 2

Baseline 2021

2030 goals

Gender parity

Women in mid and senior
management

50%

Greenhouse gas emissions
Scope 32f in 10 years

UN Living wage
initiative 
to

NEW

100%

-20%
2023: 12.4Mt CO2eq.
-16%

of employees

f by 2026
1. Total emissions from Solvay operations.
2. Emissions upstream and downstream in the value chain (suppliers and customers)from its "Focus 5" categories which are 1. Purchased goods and services. 2. Fueland energy related activities. 3. Processing of sold products. 4. Use of sold products.
5. End-of-life treatment of sold products.
3. Where renewable alternatives exist.
4. Number of work-related injuries and illnesses (employees and contractors) resulting
from an accident with severity above first aid, according to US OSHA 29 CFR 1904,
per 200,000 work hours.

Coal phase out3

2023: 24.4PJ-10%

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3Following the spin-off of the specialty businesses toSyensqo in December 2023, Solvay has reconfirmed
and even reinforced its ambitious commitment to reduce its CO2 emissions. Our new baseline has shifted from2018 to 2021 while maintaining a goal of a 30% reduction on
Scope 1 and 2 emissions and a reduction of 20% of Scope 3(upstream and downstream) emissions by 2030. We are also
maintaining our objective to phase out coal from energy production in soda ash by 2030 wherever an alternative exists.
In addition, carbon neutrality by 2050 remains an overarching
objective.
Solvay joined the Science-Based Targets initiative (SBTi) in
October 2020, receiving a formal approval from the Initiative(well below 2°C) in early 2023 for its 2030 climate targets.
The spin-off of Syensqo has triggered the need for a reassessment that will start with SBTi in 2024.

Accelerating our energy transition
roadmap— Our current objectives are supported by a global energy
transition roadmap made of already validated and financed
projects with a strong delivery anticipated in 2025, as well as
a portfolio of projects (still under validation process) groupedby type:f  Energy transition projects for which a significant investment is necessary to use a less emitting primary source ofenergy.
f  Energy efficiency projects that allows us to consume lessenergy per production unit.
f Renewable sourcing consisting of the substitution of current fossil energy with a renewable or low carbon option.
In 2023, Scope 1 and 2 emissions decreased by 1.7 Mt CO2eq.
(-19%) compared to 2021 and 1.2 Mt CO2eq. compared to 2022,
which can be explained by lower activity, new GHG reduction
projects, including biomass consumption in Devnya in substitution to coal, better mine gas usage in Green River, and otherenergy efficiency projects. Overall, we have more than 27 projects around the world that are either completed or underway,
including four new ones that were validated in 2023.
By the end of 2023, we had already delivered a 5% structural emission reduction in Scope 1 and 2 compared to 2021
thanks to our projects in Rheinberg, Germany, Devnya,
Bulgaria, and Green River, Wyoming, United States. We havelaunched new projects that will deliver an additional 15%
emission reduction by 20251, with designs for more plans tosave another 10% by 20301.

BUSINESS ENVIRONMENT & STRATEGY

37

Energy transition to phase out coal from theenergy mix at our soda ash plants— Soda ash production is based on an energy-intensive process, originally relying on local coal sources. Phasing out coalfrom our energy mix is obviously necessary to achieve thecarbon neutrality target. This journey is almost completed at
Green River, US, plant (Q1 2024) and underway at Rheinberg,
Germany, and Dombasle, France, with the construction of validated projects (Q1 and Q2 2025 respectively).
Devnya, Bulgaria, and Torrelavega, Spain, are in the final stepof defining their own roadmap. In addition:f The Green River, Wyoming, US plant will complete its fullcoal phase-out by Q1 2024. The full substitution of coal by
natural gas will allow a CO2 emission reduction close to
280 kt/y.
f The Rheinberg, Germany, plant will be primarily powered by
locally sourced biomass waste. The first step of the projectis already completed (2022) while the second one will befinalized by the end of 2024 to deliver 485 kt/y CO2 emission reduction.
f  
In Dombasle, France, where Solvay is partnering with

Veolia, the plant expected to completely phase out the useof coal for energy generation by mid-2025. The coal will
be substituted by local refuse-derived fuel (RDF). After thecompletion of the project, the plant is expected to emit 240
kt/y less CO2 than in 2021.
f  
 
The Devnya, Bulgaria, plant has already adapted one of its
existing boilers to increase its co-combustion rate with biomass. The boiler, which can be powered by 30% biomass
fuel from a variety of sources, including locally sourced sunflower husk pellets, it reduced the plant’s CO2 emissions byaround 100 kt in 2023 compared to the current process.

Energy transition to phase out fuel oil at our
Collonges silica plant— In 2023, Solvay announced that our Silica business wasplanning to construct an electric furnace to replace the existing fuel-powered one at our Collonges, France, facility, with
operations scheduled to start in 2025. This strategic shift
towards clean energy sources is expected to reduce by 20 kt
per year the CO2 emissions related to Silica production activities compared to the current process. This new investment
will secure long-term sustainability and competitivenesstargets and delivers enduring advantages to our customers.
Combined with our circular silica offering, this should position us to provide a unique value proposition to customers
and consumers alike.

38

BUSINESS ENVIRONMENT & STRATEGYA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Reducing emissions through process upgrades
rated by on-site solar energy. This project will further enable thedecarbonization of Solvay’s activities in Rosignano, leading toa reduction of CO2 emissions for peroxides-related operations.

— In order to further reduce our carbon emissions, Solvay isconstantly innovating and upgrading its processes across allof its business units.
Soda Ashf  In Green River, Solvay is implementing a breakthrough technology to reduce emissions originating from trona mining
operations. This innovation makes us one of the first companies to implement regenerative thermal oxidation technology to decrease emissions in a trona mine. With an anticipated launch before the end of 2024, the project is expected
to reduce our GHG emission by 740 kt/y. In combination
with our coal phase out plan, it will aid in reducing Scope
1 and 2 emissions by 20% despite the capacity expansion.
f  In Dombasle, our new e.Solvay soda ash manufacturing process is being piloted and will enable a 50% reduction in CO2emissions compared to our current process.

Accelerating our switch to renewable energy
sourcing

Peroxides— Our peroxides business is focused on the reduction of steam
consumption and energy excellence, including the use of decarbonized hydrogen. Through our partnership with Sapio, we willdevelop Europe’s first hub for the production of green hydrogen
peroxide at our Rosignano, Italy, plant. Beginning mid-2026, we
will produce hydrogen peroxide using green hydrogen gene-We also have a biogas project at our site in Juarez, Mexico,
to install a biodigester onsite in order to produce biomethane
using slurries from the city’s wastewater treatment plants.
Operation is expected to start in Q2 2024.

— The shift towards more renewable energy sources instead offossil fuel is reflected in the power purchase agreements for our
peroxides business, as well as in a solar panel installation program, which includes a project at our Silica plant in Qingdao,
China, starting in 2024.
In addition, our production site in Voikkaa, Finland, began operating on 100% renewable electricity at the end of 2023. This isa significant step in decarbonizing the production of hydrogen
peroxide at Voikkaa.

1. These figures do not take into account the activity increase compared to baseline.

27 energy transition projects (1.8 Mt of CO2 per year)
60+ projects in energy efficiency (0.2 Mt of CO2 per year)
f equivalent to taking 1.2 million cars off the road1 site (Fl)

2 sites (DE)

2023

2023

1 site (NL)

1 site (US)2020

2021, 2023,
2025

1 site (US)

1 site (KR)

1 site (DE)2019

2021, 2025

1 site (PL)

1 site (DE)

2020

2022

2022

1 site (UK)

1 site (PL)2023

1 site (CN)

2019

2024
NEW

3 sites (US)2023

4 sites (CN)2023

3 sites (US)2020, 2022, 2025

1 site (ES)

2023

NEW

1 site (ES)

1 site (BG)

2019, 2023

2023

NEW

1 site (BG)2022

2 sites (FR)
2023

2024

1 site (FR)2025

Energy transition

Reduced primary energy source emissions

Energy efficiency

Reduced energy consumption per production unit

Decarbonized sourcing

1 site (BG)2022

1 site (MX)NEW

1 site (IT)2023

1 site (BR)2023

1 site (FR)2025

2 sites (IT)2022

1 site (TH)2022

1 site (CN)2023

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

BUSINESS ENVIRONMENT & STRATEGY

Collaborating with suppliers to reducevalue chain emissions

We talk to...

— Scope 3 emissions include all indirect upstream anddownstream GHG emissions occurring in the value chain.
Upstream emissions come from the suppliers of goods andservices we purchase. Downstream emissions are associatedwith the use and disposal of our products by the consumer.
As part of our climate roadmap, we engaged to reduce by
20% the emissions of our five main categories of Scope 3 by2030 compared to 2021. A change in our Scope 3 methodology impacted 2023 results by -1.1 Mt CO2 (rf. Section 4.2 Extra
Financial Statements). Despite the change, we were able toreduce overall Scope 3 (for our five1 main categories) GHG
emissions by 16% in 2023 compared to 2021, inclusive of themethodological change.
Collaborating with suppliers is key to achieving our target andaddressing the first and main category: purchased goods andservices.
We have active collaboration with our most GHG-emitting raw
materials suppliers to collect data on the product carbon footprint (PCF) of the raw materials they supply to us — a preliminary step that enables us to track and manage progress. In
2023, we collected more than 50%2 of the PCF coverage ofour raw materials. We have also created a more dedicated andspecific approach with suppliers, for example, understanding
their Scope 1 and 2 climate strategies and their potential impacts on our Scope 3 emissions.
In Q4 2023, we called on some of our top raw materials suppliers to share their actions towards decarbonization and climate strategies so that we can better understand how theirplans will impact our PCF. The first wave consisted of eightsuppliers, and a second wave of requests is planned for 2024.
Our objective is to create a clear upstream Scope 3 roadmap
featuring specific actions to help us reach our goal.
Furthermore, Solvay is partnering with transportation providers to reduce upstream emissions resulting from transportation. The Voikkaa site, for example, takes an additional step
forward as it transitions transportation fuel from diesel tobiofuel. This shift will result in a significant reduction of over
700 tons of CO2 emissions in 2024, representing more than
80% of the site transportation carbon footprint.
Besides suppliers, Solvay is looking to engage its employees in
reducing Scope 3 emissions linked to business travel. In 2023,
Solvay launched the Travel Carbon Fund to track its carbon
travel footprint, raising awareness of responsible and sustainable travel. In doing so, we ultimately aim to finance a fundfor sponsoring sustainability projects with a carbon-offset focus wherever feasible. Starting in 2023, Global Business Units
began contributing a monetary amount based on the entity’s
travel footprint, calculated at €100 per ton of CO2, to the Fund.

39

JORGE SOTO
Sustainable Development
Director, Braskem

Braskem, a global petrochemicalcompany has been a key
supplier for Solvay for several
decades. We have developed
strong relationships based on
our common commitment tosustainability, competitiveness,and innovative solutions to stayahead of market needs. Braskem
is engaged in contributing to thevalue chain to strengthen thecircular economy.

What is the driving
force behind therelationship between
Braskem andSolvay?
Jorge Soto — Braskem
and Solvay’s long-lasting
business relationship is
directly aligned to bothcompanies’ sustainable
development goals.
Since the 70s, Braskem’s
Cumene plant located in
Mauá – São Paulo, has
focused on supplying
Solvay’s Paulínia –São Paulo site, withraw material, for their
Coatis business in Latin
America.

How is Braskem
reducing its carbon
footprint?
J.S. — At our Mauá
unit, Braskem produces
an array of chemical
products as well as
polymers, while focusing

on the continuous
improvements of ourenvironmental key
indicators, such as GHG,
water and waste. ThroughBraskem´s sustainability
efforts, our objective is
to become a standard insustainable developmentin the chemical andplastics industry globally.

How could ourcompanies further
collaborate to bringmore sustainability
across the value
chain?
J.S — Solvay and Braskem
are committed to working
on new opportunities
focused on thesustainability of the value
chain, such as evaluating
the development of
Bio/Circular feedstock,through mass balance.
For Braskem, ourrelationship with Solvay
represents an important
contribution to what we
believe to be essential tosustainable development
and the circular economy.
It is only possible toachieve sustainability
goals throughout thevalue chain by working
together and adding
efforts.

1. 1. Purchased goods and services. 2. Fuel and energy related activities.
3. Processing of sold products. 4. Use of sold products. 5. End-of-life treatmentof sold products.
2. Based on identified raw materials purchases done in 2022 and secondary
CO2 data40

NatureBUSINESS ENVIRONMENT & STRATEGYA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3W

e remain focused on reducing our environmental
footprint by prioritizing actions to mitigate environmental and climate risks at our plants. We arealso preserving local biodiversity through site-specific actions and engaging in a circular economy.
In addition, improving waste recovery and water-use efficiency helps us to create value by enhancing the sustainability of
our sites, processes, and products, and allows us to better
cater to the needs and expectations of our customers. Our
STAR Factory program, which is currently being rolled out
globally across our sites, defines clear roadmaps for eachplant with targeted actions that will be pursued long term.
They include initiatives to reduce our non-sustainable industrial waste and freshwater intake where applicable.

Reducing pressure on biodiversity—Since 2020, Solvay has been combining a global and local
approach with the aim of reducing pressure and damage,and progressively restoring biodiversity around our sites.
We want to contribute to the main objectives of the Global
Biodiversity Framework adopted in Montréal-Kumming COP
15 in December 2022, which are to stop biodiversity loss andreverse the trend.
By understanding and addressing our impact throughout thevalue chain, from raw materials to production, we have foundways to reduce pressure on biodiversity. Since 2018, we havedecreased our impact by 20%. Our impact on biodiversity is
calculated across the value chain for our entire portfolio1 of
products.

Recognized for our actions to protect and restore
biodiversity— Our Paulínia, Brazil, Torrelavega, Spain, and Rosignano,
Italy sites were recognized by the International Union forConservation of Nature (IUCN) for contributing to the protection and restoration of biodiversity. In its 2023 report, theIUCN compiled 28 case studies that highlighted the initiatives from several multinational companies among which ourthree sites were recognized. This demonstrates our proactive
approach to safeguarding natural ecosystems and setting
a higher standard for biodiversity conservation within ouroperational areas. Our approach not only aims for the protection of natural environments but also actively contributes tolocal communities and ecological education.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

BUSINESS ENVIRONMENT & STRATEGY41

Our roadmaps aim to:
GOING BEYOND REGULATORY OBLIGATIONSAT OUR PLANT IN TORRELAVEGA
Today, the Cuchía quarry in Torrelavega, Spain is an areafull of new life where you can observe 169 species of birds,
19 of mammals, seven of amphibians, six of reptiles, and289 varieties of plants. From 1927 to 2006, the Cuchía quarry
supplied limestone to our soda ash factory in Torrelavega.
When the quarry ceased activity in 2006, we went beyond
regulatory obligations ahead of the quarry’s closure. Focusedon landscape integration and biodiversity, we launched theEcological Recovery Plan, planting thousands of native trees
and documenting diverse wildlife. We also collaborated withorganizations like SEO BirdLife and the European Union’s LIFEf  
Develop a vision for improved integration of the site into its
local environment and communities.
f  
Identify and implement projects at sites and in surrounding
areas to protect biodiversity and support regeneration.
f  Develop “nature-based solutions” that will bring economic,
environmental, and social benefits.
Out of the 16 priority sites, nine of them have already validated their roadmap and started implementation, including
Dombasle and La Rochelle in France, Linne Herten in the
Netherlands, Anan in Japan, Paulinia in Brazil, Torrelavega in
Spain, and Rosignano in Italy.

Stop Cortaderia project to further enhance restoration. Thistransformed area now thrives as a bird sanctuary and is anatural area available to the local community.

Launching SBTs to prioritize actions forour plants— In 2023, the first two steps of the method developed by
the Science Based Targets Network were applied to our sites.
They consisted of evaluating impacts and dependencies onnature all along the value chain and prioritizing key issues
and locations for taking action.

Preserving local biodiversity through site-specificobjectives— All of our sites have been assessed based on their sensitivity towards biodiversity using two international reference tools: the IUCN Integrated Biodiversity Assessment
Tool (IBAT) and the World Wide Fund for Nature’s (WWF)Biodiversity Risk Filter. These tools identify protected
species and areas around a specific location, as wellas “Key Biodiversity Areas,” which play a significant rolein biodiversity conservation and sensitive ecosystems.
An update of previous assessments was performed in 2023
to consider additional information from these international
databases.
Based on this evaluation, we have prioritized 16 of our manufacturing sites and are developing and implementing biodiversity roadmaps for each.

1. This global approach is based on a Life Cycle Impact
Assessment (LCIA) methodology known as the ReCiPe method that translatesemissions and resource extraction into an environmental impact score.

The results from step two confirmed the importance of investing in the carbon neutrality trajectory, as climate change
is the main pressure on biodiversity from direct operations.
Brazilian sites from Coatis appear in the top three priorities
for land use pressure while soda ash sites have to be prioritized based on water consumption, especially when the sites
are located in water stressed areas. For upstream supply, mineral raw materials represent the main pressure on natureand the use of coal in a few remaining sites is the primarypressure related to energy.
The Science Based Targets Network by the Global Common
Alliance has developed methods to support companies tooperate within environmental boundaries on a social equitablebasis through the setting of science-based targets (SBTs).
SBTs are measurable, actionable and time-bound objectives
based on best-available science that allow companies to alignwith Earth’s limits and social sustainability goals.

Managing our water-related risks— 2023 was again a year marked by record high temperatures, long periods without rainfall around the world, andmore frequent extreme events such as floods. NASA andother climate observatories like Copernicus in Europe confirmed 2023 as being the warmest year on record. Because
water is essential to our operations, shortages can have asignificant impact and even lead to production losses.

42

BUSINESS ENVIRONMENT & STRATEGY

Repeated episodes of drought and the associated environmental and industrial risks have been the driving force
behind the construction of a roadmap for water sobriety,focused on the following areas:f  Consolidated annual reporting of water withdrawals andin priority sites, direct monitoring of water consumption,with weekly reporting in the event of a drought crisis. We
can now monitor more than 90% of Solvay’s daily freshwater intake across the world, thanks to the dashboard put inplace last year.
f  Drawing up and/or updating water-related risk mitigationplans for each industrial site.
f  
Launching water consumption reduction projects to manage risks at priority sites.
In 2023, we reduced our freshwater intake by around 20 million m3 compared to last year, and by 9% compared to 2021,
mainly due to lower volumes of production.

S O LVAY 2 0 2 3 A N N U A L I N T E G R AT E D R E P O RT

Number of initiatives across our sites— To address water scarcity at our sites, we have launched various water management initiatives. Through our STAR Factory
program, we are developing water intake and consumption reduction roadmaps for over 20 of our sites.
At our silica plant in Włocławek, Poland, we were able to reduce the freshwater intake by 8% in 2023 compared to 2022,
at similar production levels, thanks to water reuse and recycling initiatives.
In parallel, to minimize the consumption of surface water andcontrol well water intake, we continued to optimize the operation of cooling towers. Actions were implemented in several sites, such as our soda ash plant in Bernburg, Germany,
where we put in place a tracer-based river water system targeted at reducing river water intake by 250.000 m³ on a yearlybasis beginning in 2023.

The investment procedure was also revised to integratecosts of externalities for water. This project includes comprehensive cost of water use, pre-treatment, and post-treatment
before release to the environment.

Projects to reduce freshwater intake underway
at more than 20 sites accross the world

Gunsan (KR)Bad Wimpfen(DE)
Dombasle (FR)Voikkaa (FI)Qingdao (CN)

Włocławek (PL)Zhenjiang(CN)

Deer Park(TX)
Chicago Heights (IL)

Anan
(JP)

Devnya (BG)
Torrelavega (ES)

La Rochelle (FR)

Juarez (MX)Operational projects
 Committed projects
 Ongoing feasibility study Cooling water optimization
Effluent recycle

Quzhou(CN)

Bernburg (DE)Map Ta Phut (TH)Liyang (CN)Paulinia (BR)Collonges (FR)Rosignano (IT)A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Addressing water risks at our sites— We have conducted a review of water risks in about 80%
of our sites, assessing them according to several criteria including water scarcity, quality of effluents, and risks related
to regulations. This led to the implementation of seven additional water risk mitigation plans in 2023. In total, we now
have 10 plants with water mitigation plans, with the potential
to achieve 10% water intake reduction through specific waterprojects and even possibly go beyond this thanks to our carbon neutrality strategy.
To mitigate the impact of drought, we conducted several onsite diagnostics at our plants in Dombasle and Collonges inFrance. In Dombasle, the shortage of water could jeopardize
plant operations and may lead to severe reduction of production capacity of the site. Water scarcity impacts both theavailability of cooling water and of process water for the production of its final product. A project was launched in 2023
to create a detailed mapping of all process water flows andusages. An action plan was made to reduce, recycle, andreuse the process water in order to be better prepared for
drought. This plan will be implemented in the frame of the
National French program to reach -10% water intake by 2030
compared to 2023.

Our initiatives to reduce non-sustainableindustrial waste— Non-sustainable industrial waste is waste that is disposedof without energy recovery, for example through incineration.
At Solvay, we are committed to reducing our impact on nature and we have long been taking initiatives to reduce thistype of waste. This means finding ways to either reduce it at
the source, reuse it in the same process, recycle it in anotherprocess, or recover energy from it.

BUSINESS ENVIRONMENT & STRATEGY43

In 2023, we had projects deployed at more than 20 plants
across the world to address non-sustainable industrial waste
and this is expected to continue growing through our STAR
Factory program.
Recycling is one of our ways to reduce our industrial waste,contributing to a circular economy along with preserving resources and nature.

CREATING A CIRCULAR ECONOMY FOR THE
RESIDUES GENERATED FROM OUR SOLVAIR®
TECHNOLOGYFor decades, Solvay has been dedicated to establishing acircular economy for the residues generated from flue gas
cleaning through our SOLVAir® technology. More than 80% of
SOLVAir® residue can be recycled into purified brine, serving
as a circular raw material in soda ash manufacturing at ourfacilities in Dombasle, France, and Rosignano, Italy.
In January 2024, we announced capacity expansions for
our Resolest®1 and Solval® units, specifically designed forrecycling residues from the flue gas cleaning process using
the market-leading SOLVAir® solution. The rising demand
for this advanced technology stems from the enforcementof stringent environmental standards governing emissions
across various industries. By the end of 2025, Resolest®
is poised to undergo a significant 60% surge in recycling
capacity. Likewise, commencing January 2024, Solval® is set
to witness a substantial 30% increase in its capacity.
This aligns with our dedication to a circular economy,
supporting initiatives such as the European Green Deal. By
doing so, we support our customers from various industries
in their sustainability journey while fostering responsible
business growth at Solvay. In addition, this innovative process
empowers both plants to reduce natural brine consumption,
actively contributing to resource conservation. SOLVAir®
patented sodium-based solutions enable various industries toefficiently eliminate over 99% of pollutants.

1. A joint-venture between Solvay and Sarp Industries.

44

BUSINESS ENVIRONMENT & STRATEGYS O LVAY 2 0 2 3 A N N U A L I N T E G R AT E D R E P O RT

Recycling wastewater treatment sludges at ourplant in Paulínia, Brazil

Giving a second life to soda ash production
waste— At our Paulínia site, we wanted to reduce our industrial
waste in a more sustainable way. In order to implement morecircular processes, we looked for partnerships outside of thevalue chain and worked with open innovation to find new feasible solutions that would create additional value for all. For
wastewater treatment sludge and water treatment sludge,
we are currently working with partners and circular alternatives of waste recovery, where these materials will be usedin the bricks for the fertilizers industry. In 2023, while we areworking on those alternatives, we sent approximately 36% of
the sludge from the water treatment unit to partners in the
cement industry to be incorporated as raw material (co-processing).

— At the Solvay site in Torrelavega, Spain, where we produce
soda ash and bicarbonate, discussions about sustainability
and circularity have led to new partnerships. When looking
to create sustainable solutions for waste, team members
developed external collaborations to find a second life forselect materials, such as ashes resulting from the soda ash
manufacturing process. This led to a partnership with a cement plant with whom we worked closely to sort, adapt, andupgrade our ashes in order to meet their needs and quality
specifications. This win-win situation, made possible thanks
to transparency, flexibility, and agility from both sides, enabled us to recycle about 35% of the non-hazardous waste
generated by the plant in 2023.

Projects deployed at over 20 plants across the world
to address non-sustainable industrial waste

Qingdao (CN)Collonges (FR)

Chicago Heights(IL)

Rheinberg (DE)Zhenjiang (CN)Map Ta Phut(TH)
Torrelavega (ES)

Rosignano(IT)

Paulinia (BR)Salindres (FR)Operational projects
Commited projects
Ongoing feasibility study azardous wasteHdiverted from landfill

ReduceReuse
RecycleWaste to cement

Jubail(SA)

Gunsan(KR)

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

BUSINESS ENVIRONMENT & STRATEGY

45

Better life

Goals

Baseline 2021

Safety RIIR1

Aim for Zero
2023: 0.27
Gender parity

Women in mid and senior management

50% in ten years
2023: 26.3%
Living wage to100% of employees
by 2026
NEW

Pilot2

1. Number of work-related injuries and illnesses (employees
and contractors) resulting from an accident with severity
above first aid, according to US OSHA 29 CFR 1904, per200,000 work hours.
2. P ositive kick off in 2023 with pilots conducted in the US, theUK and China, representing 16% of our internal workforce.

S

olvay is proud of the legacy of its founder, Ernest
Solvay, who was one of the first corporate leaders
to implement what we call today Corporate Social
Responsibility (CSR), placing a strong emphasis on responsible capitalism. In 2023, our commitment to improving
the quality of life of our employees and communities was in
the spotlight through initiatives like committing to a fair living
wage (as defined by the UN Global Compact initiative) for
100% of our employees by 2026 and bringing an additional
benefit to our Solvay Cares program. We are also driving various initiatives with dedicated objectives across areas suchas safety, well-being, and diversity, equity, and inclusion (DEI).

Committed to being a responsible
employer— Our comprehensive social benefits program provides employees with the support they need to perform at their bestand results in a positive impact on our local communities. Our
Better Life at Work program offers our colleagues worldwide
a range of well-being webinars and workshops along with an
Employee Assistance Program, which includes free psychological support, well-being advice, life coaching, and mindfulness for all employees and members of their households.

Additional benefit for Solvay Cares— Our Solvay Cares program aims to provide all of our employees with social benefits addressing major healthcare
costs, disability leave, parental leave, adoption leave, life insurance, and more. In 2023, a new Solvay Cares Agreement
was signed with the Solvay Global Forum to include an additional benefit: Solvay will now also support employees withcaregiving duties. Employees will be able to take a maximumof five days each year to handle unexpected situations where
they must care for a loved one, so as to complement any provisions of local legislation. In addition, Solvay is creating aholiday donation bank with 100 days of leave for employees
to use for caregiving purposes.

46

BUSINESS ENVIRONMENT & STRATEGYS O LVAY 2 0 2 3 A N N U A L I N T E G R AT E D R E P O RT

ENSURING A FAIR LIVING WAGE FOR ALL
EMPLOYEESIn 2023, we joined the UN Global Compact living wage action,
part of the organization's Forward Faster initiative that calls
for ambitious corporate action in order to accelerate progress.
As a result, we are assessing our living wage equity with plansto close any potential gaps within the company by 2030.
This will ensure that our 9,000+ employees around the world
receive a fair living wage by 2026, meaning a sufficient salary
to afford a standard of living for each employee even if theyshould become the single income earner of their family. In
order to do so, we have partnered with experts, such as the
Fair Wage Network, an independent organization that provides
a comprehensive and updated database used to define, buildand deploy living wage assessments to make concrete steps
towards improved fair wage practices. The first assessments
have taken place in China, the US and the UK, which represent
16% of our internal workforce. As part of this step towards
securing a more equitable workplace, Solvay will report on thefair living wage initiative progress annually to the UN Global
Compact.

Strong commitment to ethics and compliance— Ethical and compliant behavior is essential to how Solvay
does business. In 2023, we published a new section on our
corporate website, highlighting our commitment to ethics andcompliance, our Code of Business Integrity, and our policies,
actions, and audited data. All of our employees are required toundertake mandatory annual training, and our Speak Up service gives employees a way to safely report or seek assistanceif they witness any inappropriate or unethical behaviors.

Social dialogue key in times of strategic
disruption— Good social dialog is key to driving commitment, motivation, and business success. We ensure our employees’ representatives stay informed about strategic decisions and encourage feedback. As a result, we experience a high level ofmaturity, transparency, and trust among senior management
and employees. This greatly contributed to our successful
separation from Syensqo.
In 2022, we renewed and strengthened our Solvay Global
Forum Agreement and Global Framework Agreement with
the IndustriALL union, the global union for the chemical industry. Current commitments in the agreements address theareas of mental and physical health and safety at work, including the fight against discrimination, promotion of inclusionand diversity, remote work rights, and respect for the environment. The latest addition to our Agreement is that Solvay
expects its suppliers, contractors, and subcontractors tocontribute to Solvay’s compliance with the provisions of thisagreement.
Throughout the partial demerger project, regular discussion
took place with both the Solvay Global Forum (SGF) andthe European Works Council (EWC), both before and after
the official consultation, through the creation of an “Ad Hoc
Committee.” This enabled us to address the concerns of therepresentatives at an early stage and to provide responses,
such as the support put in place for the exit from the MasterTransitional Service Agreements (TSAs) entered into between
Solvay and Syensqo in connection with the partial demerger.

BUSINESS ENVIRONMENT & STRATEGYA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

We talk to...

MARCO
ROUMEN

Solvay Global Forum Coordinator

As a result of the separation, a new
Solvay Global Forum was elected
and Marco Roumen remained the
Coordinator. The SGF is a global body
representing the interests of 9,000
Solvay colleagues worldwide, ensuring
their voices are heard by leadership andtheir rights are protected. We had thechance to interview Marco and discuss
how we can best use our Solvay legacy
to build our next chapter.

How was the Solvay Global
Forum involved in theprocess that led to the partial
demerger?
Marco Roumen — We were involved
from the beginning, a day after theannouncement, and we kept discussing
from day one until spin off. It’s something
we are very proud of and that is unique.
The company really listened and evenchanged some decisions based on the
feedback that was received. We also
applied what we learned from previous
experiences, such as improving theVoluntary Separation Plan (VSP) to makeit as clear as possible, and we could evensave some jobs.

What do you value most from
Solvay legacy that we should
build on in the new company?

47

challenging, but changes also happen
naturally, and that’s a great thing to see.
Lastly, we keep the agreements andsocial benefits from Solvay legacy andwe can continue building on them.

What are your priorities as SGF
coordinator? How could the
new Solvay become an evenmore attractive employer?
M.R. — We have made a lot of progress,
but we must remain honest andacknowledge that we still have work to
do. We need to be more inclusive anddiverse, respecting everybody’s opinions
and the way every individual acts in life,
which is not always the case across thecompany. In addition, we’ll have to facea more challenging global economic
situation and the constraints that comewith it.

M.R. — Our open dialogue is oneof-a-kind. We have a hierarchy but
our leaders are always available toemployees, who have the opportunity
to speak with their high-level managers.
This is something that not many
companies have.

A critical point for the future is to lookafter all our talents, not only the highpotential ones. We have to create
opportunities for the many talents wehave working on shop floors, especiallyin the many small sites we have, in orderto keep them in the company for a much
longer time.

We also enjoy a wide range ofnationalities and cultures, notably in
production teams where people havelearned to listen and understand eachother beyond their differences. Providing
and implementing DEI initiatives is

We have a very open and transparent
atmosphere in many areas of thecompany and we need to continue
working to make that available
everywhere. Let’s celebrate our progressand our unique social dialogue!

Embedding DEI in the day-to-day
business and industrial sites— In 2023, we continued to progress in implementing our
Solvay One Dignity program, launched in 2021. After firstestablishing our vision and baseline for diversity, equity,and inclusion (DEI) and then putting into motion the major
cultural change to make it a reality, we were ready for the
next phase. Last year, we continued to carry out our strategic
roadmap, aiming to strengthen DEI within our organization’s
culture and embed it in our day-to-day business through initiatives that focused on leaders, employees, industrial sites,customers, and suppliers, using our nine Employee Resource
Groups (ERGs) to help raise awareness through our organization.

Throughout the year, we focused on gender parity during
recruitment as well as the nomination of Solvay leaders. In
2023, 26.3% of mid and senior managers were women.
Additionally, we have progressed forward on our pay equity
journey, ensuring this is done in a gender-neutral manner. We
conducted off-cycle reviews using a statistically sound model
for computing “expected salaries ” by country and job class. A
review was conducted for 9511 employees identified as a priority. When the pay gap could not be justified by performance,
seniority or another objective reason, it led to an off-cycle salary increase, performed in January 2023.

1. Within the Solvay group before completion of the partial demerger in December

48

BUSINESS ENVIRONMENT & STRATEGY

Driving change begins with our leaders— Two key initiatives helped to further embed DEI in our dayto-day business operations:f  Inclusive leadership training. This four-hour Inclusive
Leadership Workshop was attended by +6001 leaders in
2023 and provided the tools and resources needed to recognize their own unconscious biases and foster an environment where everyone feels valued, respected, andincluded. The session also provided a space for leaders toengage in meaningful conversations with peers and share
their experiences and challenges.
f  ERG mentorship. As a vital part of our DEI program, mentorship provides underrepresented groups with equitablecareer opportunities and helps to diversify our talent pipeline. Several of our leaders participated in mentorshipprograms, mentoring members of our ERGs.

S O LVAY 2 0 2 3 A N N U A L I N T E G R AT E D R E P O RT

NEW DEI INITIATIVE PROMOTES INCLUSIONAMONG SHOP FLOOR EMPLOYEES AT OURPAULINIA SITE
When Claudinei Alves, supervisor and local Eureka ERG
member, had trouble participating in events and meetings due
to revolving shift schedules, he knew this was a problem manyof his colleagues faced. Eureka, our Latin American based
ERG that helps employees nurture theirwell-being at work,
planned and implemented the action led by Claudinei, whoshared information among shop floor employees, encouraged
open conversation, and built unity among teams, creating asafe space for all to share and learn about DEI. Acting as thevoice for all shifts, Claudinei participates in events, taking
notes and materials to share with shop floor employees. The
response from every shift has been overwhelmingly positive,
with plans to expand and enhance this initiative.
“Schedules are always in flux and these meetings require
careful planning for every shift, but this is something that

Including all employees from offices to shop floors— For employees, we are advancing our DEI practices throughimproving our disability inclusion and encouraging hands-on
participation at industrial sites, notably through our STAR
Factory program.
To assess and improve our disability inclusion, we began
implementation of the Disability Equity Index in partnershipwith Disability:IN, the leading nonprofit resource for businessdisability inclusion worldwide. The Index is a comprehensive
benchmarking tool that helps us advance our disability inclusion practices. To further align with this initiative, we havestarted to assess our digital accessibility through internal
reviews as well as external benchmarking.
Sites within our STAR factory program were invited to create
their specific DEI targets related to people and capabilities aspart of their roadmaps.

can be done in all areas,” explained Claudinei. “There is astrong need for this initiative, similar to the way we do safety
meetings. It is a matter that matters for everyone.”

Solvay awarded Great Place To Work® for its
plants in Portugal and Brazil— We are proud to have two of our sites recognized for ourcommitment to creating a culture of employee well-being
in the workplace. Awarded by the Great Place To Work®
organization, a leading player in the field of quality of life atwork, this certification is the highest level of recognition of
the quality of a company’s working environment.

Promoting diversity among ourcustomers and supply chain— We are also working to promote diverse suppliers who
source from companies that may be owned by minority underrepresented groups, employ individuals who have a disability, etc. in the Solvay marketplace. Through our partnershipwith Amazon’s B2B marketplace, we are able to buy from andsupport diverse suppliers. This aligns with our objective toimplement diversity not just within our teams and among leadership, but also within our value chain.

1. Within the Solvay group before completion of the partial demerger in December, representing around 200 leaders from Solvay as it exists today.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

BUSINESS ENVIRONMENT & STRATEGY49

4

PRIORITIZE FOCUSEDCASH ALLOCATIONOur capital discipline is key and we are prioritizing a simple
and focused cash allocation strategy. With a business that is
highly cash-generative, how we allocate our capital matters.
Our essential capex consumes approximately one third of
our pre-capex cash, addressing maintenance and regulatory
improvements, a key priority for our plants to run efficiently
for our customers and safely for our employees. This also includes our investments related to our energy transition commitments. These are essential for the planet and for the competitiveness of our operations.
Approximately another third is devoted to rewarding ourshareholders, whose support is essential to our success,through our dividend policy of paying stable to growing dividends year after year, in the continuation of Solvay for morethan 30 years.
The remaining cash will be allocated with discipline and returns at the front of our minds. Discretionary capex decisions
will be made on the basis of merit and affordability in thedomains of process efficiency and of capacity expansion, inorder for Solvay to grow its production capacities in line withcustomers’ needs. As many of our end-markets are growing
2-3% per year in line with GDP, we will need to expand our capacities to respond to the increasing demand.

ALEXANDRE BLUM

Member of the Executive Leadership Team,
Chief Finance and Strategy Officer“In everything we do, we will ensurethat we focus on delivering the value,
improving margins, cash and returns
within two main red lines, our dividends
distribution and maintaining ourinvestment grade rating.”

Expanding hydrogen peroxides capacities in China— We are extending our leadership position in the globalhydrogen peroxide market through a capacity expansion at
the Shandong Huatai INTEROX® Chemical site in China. This
investment will position us to efficiently meet the rising demand from the photovoltaic industry, strengthen our ability
to secure a more significant share of the growing Chinese
market, and further enhance our strong industrial presencein the region.

Increasing soda ash capacity in Green River (USA)— Solvay is investing in the construction of a 600kt soda
ash capacity expansion in its trona-based Green River sitein Wyoming, USA, extending its position as a global leader.
Production is expected to start in 2025, in time to meet customers’ growing needs for a secure and cost-competitive
supply source.

50

SUSTAINABLE VALUE CREATION03

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

SUSTAINABLE VALUECREATION
Essential products drive progress and create
sustainable value

62

Value chain

52	Story — Building the world’s firstcarbon-neutral soda ash plant in
Saudi Arabia

62
End-to-end value creation
63	Our segments and Global Business Units

54	Essential products serving
multiple end-markets

64	Engaging stakeholders to drive
progress

60	Creating sustainable value
for all

66

Ratings

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

SUSTAINABLE VALUE CREATION

51

52

SUSTAINABLE VALUE CREATIONA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Building the world's firstcarbon-neutral soda ash plantin Saudi ArabiaAs an example of our pioneering mindset, Solvay
is partnering with ENOWA, the energy and watercompany of NEOM, to build the world’s first carbon-neutral soda ash production facility. Equipped with the e.Solvay process, the state-of-the-art facility willuse converted brine from seawater desalination as its raw
material and is expected to set a new global benchmark forcompetitiveness, circularity, and sustainability.
Located at the crossroads of the world in northwest Saudi
Arabia, NEOM’s greenfield site provides unrivalled access torenewable resources and a unique opportunity to advanceenergy and water innovation. The Solvay-ENOWA partnershipwill lay the foundation for building the soda ash plant of the
future that competes effectively and also maintains neutral
environmental impact.
“The preliminary discussions with ENOWA convinced bothparties that there was a strong fit between Solvay and NEOM,"
said Jean-Charles Djelalian, Chief Sustainability Officer at
Solvay. “The partnership allows us to conduct an in-depth
feasibility assessment in view of constructing by the end of
the decade the first ever carbon neutral soda ash plant. This
strategic move further reinforces our position as a global
leader, securing a sustainable supply to our valued customers.”
Earlier this year, the e.Solvay pilot production process began operations in Europe. Designed to evaluate the viabilityof a more sustainable and competitive soda ash production
technology, the pilot has yielded positive results: showcasing
potential for low emissions, reduced resource and energy
consumption, and removal of limestone residues. The next
two-year pilot phase will set the stage for industrial-scale production to begin in the latter half of the decade, aligning with
the NEOM implementation timeline.
Pending approval, the project will commence with an initial capacity of 500,000 tons of soda ash by 2030 and production isplanned to gradually increase, ultimately reaching 1.5 million

JEAN-CHARLES DJELALIAN

Chief Sustainability Officer“The partnership allows us to conduct anin-depth feasibility assessment in view of
constructing by the end of the decade thefirst ever carbon neutral soda ash plant.
This strategic move further reinforces
our position as a global leader, securing
a sustainable supply to our valued
customers."
tons by 2035. Situated strategically along the Red Sea coast
to facilitate market access throughout the Middle East, Africa, and South East Asia, the future soda ash plant at NEOM
intends to serve our customers in these regions. This facility
will offer valuable insights beneficial to our current network of
Solvay plants in Europe, which is undergoing energy transitionand process innovation.
By combining our innovative process with NEOM’s renewableenergy and circular raw materials, Solvay will lead the market
to carbon-neutral soda ash and shape the future of the global
industry.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

SUSTAINABLE VALUE CREATION53

We talk to…

GAVIN VAN
TONDER
Solvay soda ash pioneering the industry

Managing Director, Water Sector,
ENOWA

1863
Ernest Solvay reinvents soda ash
manufacturing using a more competitiveand sustainable process.

1865 — 1916
Rapid expansion in Europe and USA withmore than 9 plants operated.

2022

1865
Solvay builds its first
Soda Ash plant in
Couillet, Belgium,and then pioneers
the heavy chemicalindustry in numerous
countries.

160 years later, we unveiled
our new, breakthroughe.Solvay process and weremain the undisputed
market leader, producing
soda ash through bothnatural trona-based andsynthetic processes insome of the most costefficient, vertically integrated
production facilities in theworld.

Why do you thinka Solvay-NEOM
partnership is a winwin proposition?

Why do so many
companies wantto join you in yourjourney?

Gavin Van Tonder —Being a market leader
for 160 years, Solvay isreconceiving Soda Ash tomeet the environmental
and economic expectationsof the industry. As
a new region underdevelopment, NEOM in
Saudi Arabia is being
built as a living laboratory
for new sustainable andcircular technologies.
This partnership offers an
unprecedented opportunity
for Solvay to build the soda
ash plant of the future,leveraging access toabundant renewable energy
and strategic proximity to
global markets.

G.V.T. — NEOM is the landof the future, founded on its
vision to redefine livability
and sustainability. As theenergy and water companyof NEOM, ENOWA willproduce green chemicals
from seawater brine and ison-track to build the world’s
largest green chemical
production facility. This
commitment could be
instrumental in propelling
forward the future of green
chemicals powered by 100%
renewable energy. Thisis especially attractive topartners and investors whowant to be at the forefrontof this journey.

54

SUSTAINABLE VALUE CREATIONA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Essential products serving
multiple end-marketsWe have a global market and technology leadership on our five major business lines that
include soda ash and sodium bicarbonate,hydrogen peroxide, highly dispersible silica,
fluorine, and rare earth formulations. We also have a regional
leadership in Latin America on phenol and solvents.
Our products are essential to multiple end-markets driven bymegatrends with sustainability at their core. 44% of Solvay’s
net sales are generated by “sustainable solutions” according
to our Sustainable Portfolio Management (SPM) methodo-

logy: in a given application, our “sustainable solutions” makea greater social and environmental contribution to the customer’s performance while demonstrating a lower environmental impact in their production phase.
In addition, eight of our products have been labeled as Efficient Solutions by the Solar Impulse Foundation, meaning
they offer profitable and sustainable solutions that tackle
the world’s environmental and health challenges and help toachieve the United Nations’ Sustainable Development Goals(SDGs).

18%
Automotive

17%

17%

Consumer goods, Home &Health CareAgro, Feed & Food

22%

Industrial Applications& Chemical industry

4%Electronics% of Solvay net sales

13%

Building & Others

10%

Resources, Environment& Energy

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

SUSTAINABLE VALUE CREATION

55

Powertrain efficiency
Recognized as a benchmark in the industry the
NOCOLOK® aluminum brazing solution improves heatexchanger performance in new energy vehicles andInternal Combustion Engine thermal management systems, saving emissions and resources.

Automotive
18% of Solvay net sales

ALVE-ONE®* FOR SAFER AND MORESUSTAINABLE CAR INTERIORS
Our Alve-One® foaming solutions are an innovative generationof high-performance, sustainable and cost-effective chemical
blowing agents. Based on sodium bicarbonate, a 100% safe
raw material, they offer customers a safe alternative to
ADCA**, ensuring that environments, like car interiors, containnegligible quantities of volatile organic compounds (VOC),

Sustainable and efficient resources

and contributing to significantly improved vehicle indoor air
and quality. Helping fulfill the plastic industry’s move towards
a circular economy, they provide the specific properties
needed for insulation, strength, and lightweighting.

― Our products enable safer, cleaner, and more energy-efficient automotive solutions. They meet our customers’ demand for sustainability, stringent regulations
on CO2, and particulate emissions that are driving theautomotive industry to develop cleaner mobility systems.

*Alve-One® was awarded the Solar Impulse Foundation’s Efficient Solution Label.
** Azodicarbonamide, classified as a Substance of Very High Concern (SVHC) by
REACH.

Clean and green technologies
f We offer the widest performing range of highly dispersible silica (HDS) for sustainable mobility andenergy-efficient tires. Our best-in-class Zeosil® specialty grades for electric vehicles improve wear androlling resistance up to 30% with no compromise on
wet grip, contributing to boost EV battery autonomy
range up to 10%.
f We are developing a circular silica made with biobased sodium silicate derived from rice husk ash.
Supported by major tire manufacturers, it will offer
the same level of performance as current grades,
helping the tire industry to significantly reduce their
CO2 footprint.
f Several Solvay solutions are used in automotive catalytic converters to minimize pollutant emissions,boost performance, and reduce fuel consumption.
f Our cutting-edge solutions for body and chassis applications put the planet first. Our oxygenated solvents offer non-toxic, high-performance solutions forautomotive coatings. And Rhodianyl, used in many
parts of the car, offers a 100% recycled grade polyamide 6.6 polymer for engineering plastics.

C onsumer goods,
Home and
Health Care
17% of Solvay net sales
Sustainable and efficient resources
Evolving demographics

56

SUSTAINABLE VALUE CREATION― Our products meet consumers’ demand for morenatural and biobased ingredients, making the products
they use healthier and more eco-friendly. We also provide solutions for the increasing needs in the healthcare
market, driven by the world’s growing and older population, advances in treatments and health technologies,
and high sterilization capabilities to name a few.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

RHODIANYL HELPS TEXTILE AND ENGINEERING
PLASTICS INDUSTRIES ADVANCE THE
CIRCULAR ECONOMY
Solvay continuously improves its production process andproducts to offer more sustainable raw materials to the textile
and engineering plastics industries. Launched in 2023, ournew and innovative specialized grade of Rhodianyl, a PA66

Home and hygiene

polymer made of 100% pre-consumer recycled polyamide,achieved SCS Recycled Content Certification, reaffirming
Solvay’s commitment to circular economy. Our Santo Andre,f Our soda ash is essential as a water softener and adetergent (i.e. saponification effect).
f In fragrance markets, the priority is finding bio-renewable, sustainable, and safer alternatives to petrochemical solvents. Our Augeo®* line of bio-based
solvents for air care and home cleaning meet theseneeds. Developed from glycerin, a renewable source,
they comply with the strictest global legislation, arereadily biodegradable, have a low carbon footprint,
and are not toxic to humans or the environment.
f Our silicas, such as Tixosil SoftClean™, meet the oral
care market’s current demand for softness and enamel protection, while offering sufficient abrasivenessto get teeth clean.

Brazil, plant recovers and reintroduces textile polymers
production waste into the manufacturing lines, transforming
them into new polymers.

Consumer goods
Our solutions bring performance and healthcare benefits, enabling a new generation in textiles. We developed the world’s first polyamide yarn with accelerated
decomposition and the first partially bio-based polyamide textile yarn, Bio Amni®, designed for breathability
and moisture absorption.

Pharmaceuticals
f To ensure safety and patient well-being, medical devices, isolators and room decontamination must be
sterile. Whether in vaporized form for the pharmaceutical aseptic filling industry or as a disinfectant
for medical devices, our INTEROX® range of high-purity hydrogen peroxide (H2O2) offers the highest possible disinfection quality on the market.
f Based on high-purity sodium bicarbonate,
Bicar®pharma is optimal for use as an active pharmaceutical ingredient (API), an effervescent excipient
and to stabilize the pH in hemodialysis, enhancing
the efficiency and dependability of the procedure.

*Augeo® was awarded the Solar Impulse Foundation’s Efficient Solution LabelR esources,
Environment andEnergy10% Solvay net sales
Sustainable and efficient resources
Renewable energy― Our chemical formulations enable the recovery, purification, and reuse of natural resources, including thewater we use, and the metals and minerals on whichsociety depends. With our products, the industry canmeet ever-stricter regulations and growing demandfor innovations for more efficient processes and morecompetitive products to address air pollution, especially in Asian markets.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

SUSTAINABLE VALUE CREATION

57

Energyf
We respond to the increasing demand for cleaner
mobility and renewable energy with our soda ash,which is used as a precipitating agent for mineral
extraction and the production of lithium carbonate
used in Li-ion batteries while its high-quality grade
helps to manufacture the flat glass used for solar
photovoltaic panels.
f We are also developing a technology to separate rareearths elements used in the production of innovative
rare earths permanent magnet solutions, serving various markets like electric vehicles and wind power.

Water treatmentf Our hydrogen peroxide plays a key role in water treatment, providing eco-friendly solutions that eliminate
pollutants and pathogens in municipal and industrial
segments.
f
We also help purify wastewater or polluted waterwith Oxystrong®, a completely safe and sustainable
solution for municipal wastewater disinfection madeof hydrogen peroxide and acetic acid, enabling water
to be recycled for irrigation or return to environment.

MiningIn mining, there is a strong demand for more sustainable solutions with stricter standards to minimize
the impact on the environment and employees alike.
Our hydrogen peroxide products enhance metal
recovery, extraction performance, leaching, purification, and separation, improving yields. Our high-purity
INTEROX® helps reduce cyanide consumption duringleaching, boosting gold and silver recovery while protecting the environment, ensuring safe water is releasedback into the environment.

SOLVAIR®* AND SOLVAIR® MARINE*: FOR
CLEANER AIR AND ENERGY EFFICIENCYSOLVAir® provides simple, innovative, and efficient flue gas
cleaning solutions. This sodium-based sorbent can efficiently
remove up to around 99% of SOx, HR, and HCI emissions fromexhausts in a range of sectors, including energy from waste,energy production, cement manufacturing, and marine industry.
Our SOLVAir® Marine solution is designed for ships that use
heavy fuel oil and enables them to avoid releasing wastewaterback to the sea and features quick installation without
dry docking. It helps reduce pollutant emissions, meetinga crucial need from the marine industry to comply with
International Maritime Organization regulations.

*SOLVair® and SOLVair® Marine were awarded the Solar Impulse Foundation’s
Efficient Solution LabelA gro, Feed andFood
17% Solvay net sales
Sustainable and efficient resources
Evolving demographics― Feeding a growing global population while adapting
to increasingly strict regulations and changing consumer preferences for healthier, more natural, and moreconvenient food drives the agriculture, food, and feedmarkets. Our products meet our customers’ need forbetter performance and sustainability.

Food packagingf
Our products help make food packaging healthierand safer for consumers. Our oxygenated solvents
for inks are aromatic-free and safe for use on wrappers that come in direct contact with food and the
aseptic grade of our hydrogen peroxide, INTEROX®
AG is used during packaging to sterilize paperboard
carton containers or plastic bottles before filling with
UHT or pasteurized food.
f
Our soda ash is also used to manufacture glass
containers, contributing to reduced plastic in recyclable food packaging.

Animal nutrition
Our supplements for healthier livestock and fish farming are designed to improve productivity, nutrient use,
and overall animal health. They include our Bicar®Z, asodium bicarbonate-based feed ingredient for livestock
breeding that improves well-being and performance.

58

SUSTAINABLE VALUE CREATIONBICAR®FOOD, A HIGH-QUALITY INGREDIENTFOR MORE THAN 150 YEARSA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Coatings and paints

Our Bicar®Food, a premium sodium bicarbonate used asa leavening agent for baked goods like cakes or biscuits,
can also be a tenderizer for meat and seafood or a carbon
dioxide source for effervescent drinks. This environmentallyfriendly mineral substance, without risk for human health orfor the environment, meets the highest and most stringent
international food safety standards.

By improving durability, our coating solutions such as
Augeo® SL 191, a bio-based non-corrosive solvent witha low odor profile and low volatility, contribute to longer
end-product lifetimes. With over 60 years of expertise,
Solvay is a leader in Latin America in the productionof non-toxic oxygenated solvents, offering superior performance in coating formulations.

SODA SOLVAY® FOR ENERGY-EFFICIENTBUILDINGS
As a global leader in the production of sodium carbonate, we
supply one of the main raw materials for the manufacturingof flat glass for construction used in energy-saving
double- and triple-glazed windows, creating more energyefficient buildings. Our Soda Solvay® is used as a melting
and flux agent to lower the melting point of silica in glass
manufacturing, resulting in a reduced energy consumption
process.

Building andOthers
13% Solvay net sales
Sustainable and efficient resources
Evolving demographics― Buildings represent 40% of the world’s energy
consumption, and with a growing urban population,
there is a need for durable, safer, energy-efficient, andsustainable buildings. From paints and plumbing to insulation and glass, our innovative products and solutions are found throughout buildings.

S O LVAY 2 0 2 3 A N N U A L I N T E G R AT E D R E P O RT

Electronics
4% Solvay net sales
Sustainable and efficient resources
Evolving demographics

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

SUSTAINABLE VALUE CREATION

59― The growing demand for hyperconnectivity, development of 5G and Artificial Intelligence, and exponential
growth of data driving the market, have resulted inminiaturization and a need for more environmentally-friendly chemicals. In the semiconductor industry,
our innovative solutions help redefine manufacturing
processes, making them more precise and sustainable.

― As manufacturers must comply with ever-stricter regulations and constraints on resources, they rely on innovations for greener and more efficient processes, aswell as the development of more competitive products.
Our products help industrial manufacturers meet strict
environmental regulations while maintaining stringent
quality control.

Semiconductors

Industrial and protective coatings

Our Cerium abrasives like Zenus® are used in a criticalstep of the semiconductor manufacturing process toremove excess materials and create a smooth surface
on each wafer layer.

We offer oxygenated and bio-based solvents for industrial coatings used in a broad range of industrial
applications. In addition to investments in production
decarbonization and innovation, Solvay is investing resources in a broad process of digital transformation ofsolvent operations, with the adoption of virtual reality
technologies and industry 4.0.

INTEROX® HYDROGEN PEROXIDE PICO ANDPICOPLUS FOR ADVANCED SEMICONDUCTOR
CLEANING
We provide high-purity chemical solutions needed foradvanced cleaning, an increasingly important requirement aselectronic devices become smaller. Our INTEROX® Hydrogen
Peroxide Pico and PicoPlus are two of a range of Electronic
Wet Chemicals, primarily used in the cleaning and etchingstages of semiconductor chip production, and are the market
reference in this area amid rapidly growing demand.

Metal and surface treatment
Our Aqueous Hydrofluoric Acid is crucial for steel manufacturers to “pickle” stainless steel to remove impurities, and for quartz purification in the rapidly growing
photovoltaics market.

Cutting-edge solutions for industrial
applications
Through our Hydrogen Peroxide to Propylene Oxide(HPPO) technology mega plants in Belgium, Thailand,
and Saudi Arabia, we produce propylene oxide (PO), a
crucial organic building block in industry that is used
to produce polyurethane foam, found in everythingfrom mattresses to thermal insulation, and is a key
component of a food and cosmetics ingredient. Thesecutting-edge plants significantly reduce wastewater, increase energy efficiency, and lower operational costs.

SOLVACLEAN®*:AN ENVIRONMENTALLY-FRIENDLY CLEANINGGAS FOR SEMICONDUCTOR TOOLS

I ndustrial
applications andChemical industry
22% Solvay net sales
Sustainable and efficient resources

Semiconductor manufacturers use a variety of gasses topattern silicon wafers. Made from environmentally-friendly
fluorinated gas mixtures, Solvaclean® offers a zero global
warming potential shaping a more sustainable future for thesemiconductor industry as an alternative to usual cleaning
options. Not only does it help to reduce the industry’s climate
impact by reducing emissions, but as less gas is required forthe cleaning process, it also helps to save energy and water.

*Solvaclean® was awarded the Solar Impulse Foundation’s Efficient Solution Label.

60

SUSTAINABLE VALUE CREATION

Creating
sustainablevalue for all

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3Resources we use
SOCIAL
+9,00024%

Employees

Women

f
61% in Europef
10% in North Americaf
16% in Latin Americaf
13% in Asia & Rest of
the world

We are mastering the elements
essential to our world.
We are committed to optimizing theuse of our resources to reducing our
impact on people and the environmentand reach carbon neutrality by 2050.
This involves transforming the way weoperate and introducing process
innovations to support our market
leadership, enhance competitiveness,and drive energy transition.
Our products and technologies serve
very diverse end-markets, contributing
to our resilience. In 2023, we delivereda solid financial performance andstrong progress towards our ambitious
sustainability objectives. We arecommitted to creating greater
sustainable value for our stakeholders.

79

Nationalities

204
R&I employees

ECONOMICAL€1.3bn€1.5bnEquity attributable toSolvay share

Underlying Net Debt

€450m

€835m

Capex from continued
operations

Total personal
expenses

232
Core Suppliers

ENVIRONMENTAL
Raw materials

1. Number of work-related injuries and illnesses (employees and contractors)
Resulting from an accident with severity above first aid, according to US
OSHA 29 CFR 1904, per 200,000 work hours.

2,865kt~ €1bnConsumption

Overall expenses

2. P ositive kick off in 2023 with pilots conducted in the US, the UK and China,
representing 16% of our internal workforce.
3. Recommended to the Shareholders meeting on May 28, 2024.
4. D ue to the partial demerger, this number is based on an assumption (55%of the total number of evaluated suppliers before the split).
5. Total emissions from Solvay operations.
6. Emissions upstream and downstream in the value chain (suppliers andcustomers) from its «focus five» categories which are 1. Purchased goods
and services. 2. Fuel and energy related activities. 3. Processing of soldproducts. 4. Use of sold products. 5. End-of-life treatment of sold products.

Energy70.1PJ€0.8bnConsumption

Net costs

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

SUSTAINABLE VALUE CREATION

How we create value

Value we create

Two operating segments

61

SOCIAL

Basic Chemicals

Performance Chemicals

Chemical intermediatebusinesses focused on
mature and resilient markets.
We are a world leader in soda
ash, bicarbonate, andperoxides, serving major
markets.

Wide range of products, in
Silica, Coatis, and Special
Chem businesses, that can becustomized based on uniqueformulation & application
expertise. They hold strong
positions in their markets.

~60%of Solvay's Net sales~40%of Solvay's Net sales

Four strategic priorities

0.27

26.3%

Reportable Injury andIllness rate (RIIR1)

Women in mid and senior
management

Pilot2 NEW

14h

UN Living wage initiative
for 100% workforce

Average training hours/
employee

8.8%

38% in 22 countries

Employee turnover

Employees are Solvay
shareholders€400,000

Deliver value for customers through market
leadership
Drive excellence and competitiveness throughprocess leadership and cost savings
Reinforce sustainability commitments andachieve energy transition to deliver carbon
neutrality by 2050
Prioritize focused cash allocation

Solvay donations€1.2bn€0.6bnUnderlying Ebitda

FCF to Solvay shareholders
from continuing operations

Recommended 2023
dividend3

18%

€198m

Underlying Income taxes

28

1,600 4

Patents filed in 2023

Suppliers assessed
through Together for
Sustainability

Essential products serving
multiple end-markets
Automotive

participants to Corporate
citizenship activities

ECONOMICAL€2.43 per share

Where we create value

6,900

ENVIRONMENTAL

17%

Consumer goods,
Home & Health Care

17%

Agro, Feed &
Food

22%

Industrial
Applications& Chemicalindustry

7.3Mt CO2eq.

12.4Mt CO2eq.

24.4PJ

44%

Solid fuels consumption

Solvay’s net sales
with sustainable solutions

Scope 1 and 25
13%

Building &others4%

Scope 36

Air emissions

Electronics

10%% of Solvay’s Net sales

Greenhouse gas emissions

Resources,
Environment & Energy

4.3kt

Nitrogen oxides

2.1kt

Sulfur oxides

62

SUSTAINABLE VALUE CREATIONA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Value chain
END-TO-END VALUE CREATIONO

ur core activity as a chemical manufacturer is the
production of synthetic and natural ingredients which
we are committed to produce using processes witha reduced environmental impact. Depending on our different
business models, we are involved upstream in the value chain,producing some of the raw materials we use, or downstream,
processing chemicals or producing formulations.

In addition, we work closely with suppliers, partners, customers, and brand owners to share knowledge and unlock shared value all across the value chain. This includes
constantly raising the bar to reach our sustainability commitments by working together to build a greener, more agile, andresilient supply chain. In 2023, we mapped more than 50% of
the product carbon footprint (PCF) coverage of our raw materials.

To offer more innovative features and bring greater added value to customers, we blend or transform products. We alsocollaborate with brand owners and their suppliers to develop
tailor-made solutions based on our products.
Main inputs

Businesses

Raw materials- Minerals- Fossil-based- Renewable/
recycled

Soda Ash and
Derivatives

Primary energy-F ossil (gas, solid,
liquid)- Renewable/
recycled

Peroxides

Secondary energy- Electricity- Heat- CoolingRawmaterials

Production ofingredients

Processing/
Formulation

End-markets

Automotive

Consumer Goods,
Home and Healthcare

Resources,
Environment andEnergySilicaAgro, Feed and Food

Electronics
CoatisBuilding and others

Industrial Applications
andChemical Industry

Special Chem

Involvement of businesses in production steps
Fully involved

Partially involved

Not involvedCore activity of the businessA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

OUR SEGMENTS AND
GLOBAL BUSINESS
UNITS
Basic Chemicals— This segment hosts global chemical intermediate businesses focused on mature and resilient markets.

Soda Ash and Derivatives€2.1bn Underlying net sales— Solvay is a world leader in the production of soda ash andsodium bicarbonate. We provide a secure and sustainableglobal supply of soda ash used by customers in glass for building, solar panels, glass containers and packaging; lithiumion batteries for electric vehicles; detergents; and chemicals.
Our solutions based on sodium bicarbonate serve the healthcare, food, animal feed, and flue gas cleaning markets. To
achieve carbon neutrality by 2050 and ensure our long-termcompetitiveness, we are developing process innovations,such as our new e.Solvay process, and implementing energy
transition projects at our plants.

Peroxides€0.9bn1,2 Underlying net sales— Solvay is a world leader in hydrogen peroxide. This environmentally friendly oxidant is used for bleaching, decontamination, disinfection, and antiseptic purposes in industries
including pulp, textile, water, and food. It serves as an intermediate for the production of chemicals, such as propyleneoxide and caprolactam. It is also essential in growing andemerging applications such as in semiconductors, photovoltaic, urban mining and battery sectors. Our tailored solutions
cater to our customers’ specific needs. The myH2O2 plant, acompact version of a standard H2O2 facility, addresses application challenges in remote areas, and our mega-plants, representing advanced H2O2 manufacturing, are ideally suitedfor large scale chemical processes.

1. Special Chem and Peroxides net sales take into account the transfer of eH2O2
business from Special Chem to Peroxides (effective in 2024) for €0.1bn.
2. Peroxides: including changes related to Peroxidos do Brazil and Zhenjiang for€+0.1bn.
3. Special Chem net sales exclude thermal insulation business (phased out in 2023)
for €-0.1bn.

SUSTAINABLE VALUE CREATION

63

Performance Chemicals— This segment hosts a wider range of products (in the Silica,
Coatis, and Special Chem businesses) that are subject to customization based on unique formulation and application expertise. These businesses hold strong positions in their markets.

Silica€0.6bn Underlying net sales— Solvay is a worldwide innovation leader in Highly Dispersible Silica (HDS), which is primarily used in fuel-efficientand performance tires and is also an essential component inapplications in the home and personal care, feed and foodindustries. Solvay is the inventor of HDS for tire applications
and offers global tire manufacturers the broadest HDS portfolio available, enabling lower fuel consumption and extended
battery range in electric vehicles. We have developed a bio-circular silica from rice husk ashes and we are investing at ourplant in Livorno, Italy, where we will produce it using our proprietary process technology.

Special Chem
€0.7bn1,3 Underlying net sales— We produce fluorine and rare-earth formulations for automotive, electronics, agrochemical, and construction applications. With our industrial know-how, global presence, andproximity to research and innovation, we position ourselves
as a strategic partner for the automotive sector, as a producerof materials used in emission-control catalysis and aluminum
brazing, and for the electronics industry, with cleaning andpolishing materials for semiconductors. In our La Rochelle,
France, plant, we are developing a European rare earths hub
for a permanent magnets value chain to support Europe’s
self-sufficiency in its transition to vehicle electrification, windenergy, and digitalization.

Coatis
€0.6bn Underlying net sales— Solvay provides phenols and derivatives, polyamide derivatives, high-performance and bio-based solvents, and smart,functional and sustainable yarns and polymers, predominantly for the Latin American market. We are a strong regional
leader in oxygenated solvents used in paintings, hygiene andhome care applications, and for the production of phenol andderivatives, used as intermediates to produce synthetic resins employed in foundries, construction, and abrasives. We
are the only producer of adipic acid in Latin America with a
low CO2 footprint in the process, and our polyamide polymers
and yarns enable the sustainable fashion industry to reduce
its environmental impact.

64

SUSTAINABLE VALUE CREATIONA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Engaging stakeholders
to drive progress
Customers

Employees

Investors

HOW WE BOUNDED IN 2023f Engaging major customers on common
high-materiality topics
f Direct contact with GBU teams(management, industrial, sales, supply
chain)f Rating questionnaires (CDP, EcoVadis)f Sustainable Portfolio Management (SPM)
profilesf Two internal Pulse surveys focused on employee wellbeingf Communication between CEO and employees on aregular basis
f Digital communication with employeesf Regular dialogue between managers and employees,e.g., through annual performance and development
appraisalf Labor relations dialogue with employee representative
bodies at site, country, European, and Group levelsf Partnership with IndustriAll Global Unionf Many investors interactions: Virtual events, roadshows,conferences across Europe and NA
f Participation in diverse shareholder eventsf Responding to rating agency questionnaires, credit rating
agencies, proxy voting agencies
f Webinar on Soda Ash and Bicar business (February)f Specific information shared on the New Solvay remaining
activities and financial policies ahead of the partial
demerger: Target capital structure and Information
document with Proforma accounts for 2020, 2021, and2022 (June), H1 2023 proforma accounts (August)f Capital Markets Day on November 13: Unveiling new
management, strategy, financial and extra financial
targets following the completion of the partial demerger

H I G H M AT E R I A L I T Y A S P E C T S
f Product design and life cycle managementf Hazardous materialsf Product quality and safety
f Business ethicsf Greenhouse gas emissions

f Employee health andsafetyf Inclusion and diversityf Employee engagementf 
Labor practicesf Human rights &community relations

f All high-materiality aspects

O U R S TA K E H O L D E R S ’ E X P E C TAT I O N S
f Increasing number of customers
assessing Solvay’s performance through
EcoVadis, CDP, or specific questionnaires,confirming focus on risks andopportunities in supply chainf Customers want us to help them reduce
their Scope 3

f Management of the partial demerger project andtransition to the new Solvay company
f Well-being at workf  Impact of inflation on well-beingf 
>200 customers require Solvay’s EcoVadis
evaluationf Solvay is in the top 6% of companies
assessed by EcoVadis in the chemicalindustryf Confirmation of our goal to reduce Scope 1
and 2 by 30% by 2030
f Our process innovations like e.Solvay andcircular silica help customers to reduce
their environmental footprint and facilitate acircular economy respectivelyf Diversity, Equity, Inclusion (DEI): 2023 achievements
include assessing and closing gender pay gaps; aroadmap to improve inclusion for people with disabilities;
mentoring actions and inclusive leadership team sessions.
f Solvay joined the UN Living Wage initiative and committed
to ensure a fair living wage to 100% workforce by 2026
and to close gaps before 2030. Pilots launched in the UK,
the US, and China (16% of employees)f Two Solvay plants (Portugal and Brazil) awarded Great
Place to Work®
f 14 training hours per employee in averagef 100% employees covered by collective agreementf Regular discussion between the management and boththe Solvay Global Forum (SGF) and the European Works
Council (EWC) on the partial demerger projectf Consistent financial performance and solid cash flow
generation, to sustain dividend policyf Focus on long-term value creationf Necessity to make the energy transition and phaseout coal

OUR RESPONSES
f Strong free cash flow performance in 2023
f Dividend of €2.43 for Solvay
f Ambitious 2028 financial objectives including
gross savings of €300M by 2028
f Acceleration of our transformation program
to deliver savings while enhancing thecompetitiveness and sustainability of our plants
and processesf Confirmation of carbon neutrality by 2050 and of
our Scope 1, 2, and 3 goals

OUR CHALLENGES
f Continuous process to improve our scorewith EcoVadis
f Reducing Scope 3 emissions linked to
raw materials and processing, use, andend of life of sold productsf DEI: Gender parity objective in mid and senior
managementf Talent recruitmentf Realize the energy transition to reduce our
impact on the environment and sustain thecompetitiveness of our plantsf Challenging macro-environment in key marketsf 
Uncertain geo-political environment

SUSTAINABLE VALUE CREATIONA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

65

In 2023, we continued our efforts to deliver on the priorities defined through our sustainability roadmap. We continuously
seek to strengthen our bonds with our stakeholders, listening to their expectations and building on their feedback to progress.
We are committed to working together to address our collective impact on climate change, natural resources, and quality oflife. This includes working with our suppliers to reduce the environmental footprint of our products and committing to foster
diversity, equity, and inclusion throughout the company.

Suppliers

Local Communities

Planet (NGOs & Government)

HOW WE BOUNDED IN 2023
f Supplier Key Account Managementf Supplier commitment to Supplier Code ofBusiness Integrityf Corporate Social Responsibility
questionnairef Third-party assessments through
EcoVadis and Together for Sustainability(TfS)
f Engaging suppliers to reduce value chain
emissions through several initiatives

f Engagement at site level through the STAR
Factory project and our sustainability
initiatives (biodiversity, DEI), developing
and managing relationships with local
stakeholdersf Partnership with Wildlife Habitat Councilf Constructive dialogue with public authorities on
issues of legitimate interest to Solvay
f Participation in global and regional tradeassociations (ICCA, BusinessEurope, CEFIC) andscientific organizations (IUCN, SETAC)H I G H M AT E R I A L I T Y A S P E C T S
f Management of the legal, ethics andregulatory frameworkf Human rights & community relations
f Business ethicsf Biodiversity
f Air qualityf Water and wastewater f Critical incident risk
managementf Wastef Hazardous materials f Human rights &community relationsf All high-materiality aspects

S TA K E H O L D E R S ’ E X P E C TAT I O N S
f Increased collaboration on goal setting,strategic thinking and sustainabilityf Contribution to local material topics
f Sensitivity to local environmental and social
issuesf 1,600 suppliers assessed via EcoVadis
TfS Audit Programf Collaboration with our suppliers to collectdata on the product carbon footprint(PCF) of the raw materials they supply to
us: >50% of the PCF coverage of our raw
materials collectedf Partnering with industry leaders todevelop the next generation of productcarbon footprint (PCF) assessments
and accelerate transparency in the value
chain with customers and suppliers.
Examples include initiative from Together
for Sustainability (TfS).

f Plants are implementing initiatives to reducepressure on biodiversity and address water scarcity
f Partneship with the CERN aimed at igniting apassion for STEM among younger generationf Supporting the XperiLab project that promotes
science in schools with the help of its mobilelaboratoryf Acceleration of actions to reduce greenhouse gas
emissions and address climate changef Confirmation of UN SDGs as reference forsustainability priorities at planetary scale

OUR RESPONSESf Confirmation of SDGs where Solvay can havemost impact across the value chain:— SDGs 7, 13, 14 & 15 on Climate;— SDG 12 on Resources;— SDGs 3, 6, 8 & 17 on Better Lifef Carbon neutrality by 2050 confirmed as a key
objectivef Six goals defined through our new Solvay’s
sustainability roadmapf Confirmation of our 2030 objectives to reduce
Scope 1 and 2 emissions by 30% and Scope 3
emissions by 20%

OUR CHALLENGES
f Mitigate CSR risks in our supply chain
through due diligence and traceability
f Reduce Scope 3 greenhouse gas
emissions linked to raw material
extraction and processingf Sensitive handling of social media, which can makea local issue global
f Controversies related to effluents or emissions
f Increased sensitivity to potential exposure to
substances of concern

f Our sustainability objectivesf Carbon neutrality before 2050, Scope 1 and 2
f Scope 3 GHG emissions reduction

66

SUSTAINABLE VALUE CREATIONA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Ratings
Solvay is committed to achieving strong ratings in both financial and sustainability indexes
to maintain our stakeholders’ trust. Agency feedback has a real impact on our priorities,
as it helps us to better understand our stakeholders’ key concerns and is an invaluable
measurement of our strengths as well as areas where we need to improve.

In previous years, we have focused our action plans on
addressing the common strengths and weaknesses identified by the ratings agencies. This allowed us to achieve results in the top quartile, and sometimes even the top ten.
However, questionnaires are evolving and agencies are now
sometimes assessing the same dimensions differently. Thismeans, for example, that while some ratings agencies identify “green sales” as a strength for Solvay, based on the use of
our Sustainable Portfolio Management methodology, others
identify it as a weakness because of our limited use of biosourced raw materials.
Despite these challenges, we continue to take commentsfrom ratings agencies very seriously. This includes addressing operational eco-efficiency, the need to reduce emissions
while monitoring our impact on biodiversity and on the entire
value chain. We have developed an ESG risk management

approach for our supply chain, to address human rights andenvironmental impacts across our value chain, and we are
implementing specific actions, among others, with our suppliers.
Solvay continues its upward trajectory with a C+ grade with
ChemScore, demonstrating considerable progress over the
past four years. We improved in circular topics and controversies but not yet as much on reducing hazardous substances
to further improve our score. We are addressing that topic
thanks to extensive assessments, such as life cycle assessments and intrinsic hazard evaluations, and we expect to see
a positive impact in 2024.
We are also performing gap analysis with the rating agencies
to better understand our areas of improvement and to implement actions and initiatives accordingly.

OUR MAIN INDEXES1MSCI 2

Ecovadis

ESG Ratings assessment.

70/100

CDP 3

Sustainalytics

A (scale AAA to CCC) in the MSCIIn the top 15% in chemicals

Ain the 2023 Climate Change
questionnaire (from F to A).
Among the top 8% assessed for supplierengagement on climate change

In the top 6% in our category

24

Solvay is rated“Medium ESG Risk”

Chemscore

Vigeo eirisC+

65/100In the top 6% in our category

1.Last updated in March 2024. 2. MSCI ESG Research provides MSCI ESG Ratings on global public and a few private companies on a scale of AAA (leader) to CCC (laggard),
according to exposure to industry-specific ESG risks and the ability to manage these risks relative to peers. 3. An international organization, CDP analyzes how companies
integrate climate change into their strategies.

PERFORMANCEA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

04

67

PERFORMANCE

68

1. Overview of the consolidated results

68
69

Financial figures
Extra-financial figures70

2. Preparation background

70
70
70

2.1. Comparability of results & reconciliation of underlying Income Statement indicators
2.2. Alternative performance metrics (APM)
2.3. Description of the operational segments

71

3. Underlying Group figures

71
71
72
72
72
73
73
74
75
76
76
77
77

Note P1: Net sales
Note P2: Underlying raw materials & energy costs
Note P3: Underlying EBITDA
Note P4: Underlying depreciation & amortization
Note P5: Underlying net financial charges
Note P6: Underlying income taxes
Note P7: Underlying profit from discontinued operations
Note P8: Capex
Note P9: Free Cash Flow
Note P10: Net working capital
Note P11: Underlying net debt
Note P12: Provisions
Note P13: ROCE

78

4. Underlying figures per segment

78
78
79
80

Segment overview
Note P14: Basic Chemicals
Note P15: Performance Chemicals
Note P16: Corporate & Business Services

80

5. Reconciliation of underlying and IFRS measures81

6. Notes to the figures per share

81
81

Note P17: Earnings per share
Note P18: Dividend

81

7. Outlook

68

PERFORMANCEA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Performance
Note to the Performance section: The comparative figures have been restated in accordance with IFRS 5.

1. OVERVIEW OF THE CONSOLIDATED RESULTS
Financial figures
FY key figuresNotes(in € million)

IFRS

Underlying

FY 2023

FY 2022% YoY

FY 2023

FY 2022% YoY

Net sales

P1

4,880

5,539

-11.9%

4,880

5,539

-11.9%Net operating costs, excluding
depreciation & amortization

P2-4,178-4,117-1.5%-3,633-4,181+13.1%EBITDA

P3

701

1,422

-50.7%EBITDA margin
Depreciation, amortization &impairments

P4

EBIT

-423

-301

-40.4%

1,246

1,359

-8.3%

25.5%

24.5%

+1.0pp

-321

-321

+0.1%

278

1,121

-75.2%

926

1,038-10.8%Net financial charges

P5

-98

11

n.m.

-140

-121

-16.0%

Income tax expenses

P6

-208

-228

+8.6%

Tax rate

P6

Profit from continuing
operations
Profit from discontinued
operations

P7

Profit / (loss) for the period(Profit) / loss attributable to noncontrolling interests
Profit / (loss) attributable toSolvay shareholders

-198

-177

-11.7%

26.7%

22.4%

+4.3pp

-28

904

n.m.

588

740

-20.6%

2,132

1,030

n.m.

842

1,032

-18.4%

2,105

1,934

+8.8%

1,430

1,772

-19.3%-12-29-58.7%-13-29-56.4%

2,093

1,905

+9.8%

1,417

1,743

-18.7%

Basic earnings per share (in €)

P24

20.09

18.37

+9.4%

13.61

16.80

-19.0%of which from continuing
operations

P24

-0.36

8.58

n.m.

5.55

6.99

-20.6%

Dividend [1]

P25

2.43

4.05

-40.0%

2.43

4.05-40.0%

Capex in continuing operations

P8

450

380

+18.4%

P8

63.9%

72.0%

-8.1%

P9

561

479

+17.3%

P9

1,042

1,094

-4.8%

45.4%

36.5%

+8.9pp509

1,969

Cash conversion (continuing
operations)FCF to Solvay shareholders
from continuing operations
FCF to Solvay shareholders
FCF conversion ratio (LTM,
continuing operations)
Net working capital [2]

P10

509

1,969

Net working capital / quarterly
total sales

P10

9.5%

12.6%

Net financial debt [3]

P11

1,489

3,591

Underlying leverage ratio

P11

ROCE (continuing operations)
1) Recommended dividend for 2023.
2) Net working capital/sales ratio is the average of the quarterly net working capital/sales ratios.
3) Underlying net debt includes the perpetual hybrids bonds for 2022, accounted for as equity under IFRS.

-58.5%

1.2

1.1

+7.5%

20.4%

22.9%

-2.5ppPERFORMANCEA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

69

Extra-financial figures
In 2020, Solvay embarked on a sustainability journey captured in the Solvay One Planet roadmap, which was an integral element of its G.R.O.W.
strategy and company Purpose. Structured around the three major categories of climate, resources and better life, Solvay One Planet was aroadmap towards a sustainable future that provides shared value for all. The 2023 achievements on the 10 targets of this One Planet Roadmap canbe found on Solvay’s website.
Following the Partial Demerger on December 9, 2023, Solvay has re-endorsed the One Planet targets that are appropriate to its activities, and iscurrently reviewing and designing an updated ESG roadmap that will be shared later in 2024.
The table below provides an update on Solvay’s progress in 2023 on the six KPIs that were presented during the Capital Market Day on November
13, 2023.
2023

2022

2021

Greenhouse gas emissions(scopes 1&2) (Mt)

7.3

8.5

9.0

Greenhouse gas emissions(scope 3) (Mt)
Focus 5 categories (a)12.4

12.6 (b)14.7 (b)Solid fuels (Petajoules) (c )

24.4

28.3

2023

2022

ClimateBetter life

Progress
vs 2021Comment

2030 target-19% out of which -4% structural-19% savings notably in Rheinberg, Devnya
and Green River-30 vs 2021

-16%

-16% for the focus 5 categories and-19% for the whole scope 3-20 vs 2021

27.2

-10%

Substitution of coal in Rheinberg,
Devnya and Green River

Thermal coal phase
outwhen renewable
alternatives exist

2021

Progress
vs 2021Comment

targetZero accident

Gender parity in
10 years

Safety (Reportable Injury andIllness rate - RIIR) (d)

0.27

0.27

0.34

-21%

Step change achieved in 2022 andconfirmed in 2023 with leaders backto the field after Covid19 sanitarycrisisDiversity (% of women in
middle/senior management) (e)

26.3

28.8

28.0

-1.7ppMid and senior management
reshuffling after Syensqo’s spin-offs

Living Wage initiative (f)Newcommitment

Living wage for
Positive kick off in 2023 with pilots
100% of the
conducted in the US, UK and China. workforce by 2026(a) scope 3 emissions focus 5 categories are “Purchased goods and services”, “Fuel and energy related activities”, “processing of sold products”, “Use of soldproducts” and “End-of-life treatment of sold products”. Total Scope 3 greenhouse gas emissions indicator is in the scope of the reasonable assurance report from our
independent auditor while Scope 3 “focus 5” categories greenhouse gas emissions indicator is not in the scope of our Independent auditor.
(b) 2022 and 2021 Scope 3 emissions focus 5 categories adjusted with 2023 new methodology.
(c) Includes coal and petcoke used in energy production. Coke and anthracite used in the soda ash production process are not included.
(d) The definition of the indicator changed in 2020: RIIR replaced MTAR - RIIR: (Reportable Injury & Illness rate): number of reportable injury or illness per 200,000 work
hours. Scope: Employees and contractors.
(e) Management categories are defined on the basis of the Hay Job Evaluation Methodology. Middle and senior management levels refer to the entire active internal
workforce having Hay points above 530 and 2022 is out of the audit scope.
(f) This KPI is out of the scope of the audit.

ClimateIn November 2023, Solvay renewed its ambition to become carbon neutral by 2050 and confirmed its mid-term targets of -30% for scope 1 & 2, and-20% for scope 3 greenhouse gas emissions by 2030 vs. 2021 baseline.
Scope 1 & 2 emissions decreased by 1.7 Mt CO2eq (-19%) as compared to 2021 and 1.2 Mt CO2eq as compared to 2022 which can be explainedby lower activity (0.8 Mt CO2eq), new GHG reduction projects (0.3 Mt CO2eq), including biomass consumption in Devnya in substitution to coal,better mine gas usage in Green River and other energy efficiency projects. Building on the 5% structural savings achieved from 2018 to 2021, Solvay
launched new projects that will deliver additional 20% emission reductions by 2025, with plans to save another 10% by 2030.
Coal phase-out was completed in Green River, U.S. in Q1 2024, and is underway in Rheinberg, Germany and Dombasle, France. Plants in Devnya,
Bulgaria and Torrelavega, Spain have started their journey with partial introduction of biomass co-firing. The shift towards more renewable energy
sources is also advancing with for instance the switch to 100% wind power in Voikkaa, Finland starting 2023.
In addition, the roll-out of the STAR Factory program which started in 2022 led to an acceleration of energy efficiency initiatives through deployment
on about half of the sites. Thanks to a standardized methodology, 60+ projects have been implemented saving fossil-based heat and electricity.
Electricity consumptions have been reduced thanks to process control actions and installation of variable frequency drives.

70

PERFORMANCEA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Solvay’s scope 3 emissions (focus 5 categories) decreased by 16% versus 2021. Solvay is collaborating with its most GHG-emitting raw materials
suppliers to track and to improve its purchased goods and services emissions (category 1). The Group already mapped a total of more than 50% of
the product carbon footprint (PCF) coverage of its raw materials. Solvay also aims at reducing its employees scope 3 emissions linked to businesstravels (category 6). Concretely, as from January 2023, an internal tax – based on the travel footprint calculated at €100 per ton of CO2 – is charged
to every business. It will finance a Travel Carbon Fund with the aim of sponsoring sustainability projects with a carbon-offset focus wherever feasible.

Better LifeIn 2023, the rate of reportable injuries and illnesses remained stable versus 2022 at 0.27. This performance derives from the safety culture deployed
across the Group with interactive safety dialogues, near misses reporting, Solvay Life Saving Rules improvement initiatives and audit findings.
In 2023, Solvay progressed in its Solvay One Dignity program launched in 2021. The Group took concrete actions to strengthen DEI (diversity,
equity and inclusion) within its company's culture and to embed it in its day-to-day activities with a clear focus on leaders and employees. Solvay
has nine Employee Resource Groups (ERGs) that encourage employees to recognize and celebrate diversity, which is a critical component to guidethe DEI journey. With the spin-off of Syensqo, the population of mid and senior management at Solvay shrank by -4.3% and resulted in a drop of
the proportion of women in mid and senior management from 28.8% (end of 2022) to 26.3% (end of 2023) without changing Solvay’s dedication togender parity within 10 years.
In 2023, the Group joined the UN Global Compact living wage action, part of its Forward Faster initiative. As a result, Solvay is undertaking living
wage equity with the objective to close any potential gaps by 2026. The 9,000+ Solvay employees will receive a fair living wage by 2026, meaninga sufficient salary to afford a standard of living for each employee even if they should become the single income earner of their family. The Groupis partnering with the Fair Wage Network, an independent organization that provides their expertise to deploy living wage assessments and to
improve fair wage practices. The first assessments took place in China, the US and the UK, which represents 16% of Solvay’s workforce. As part of thisstep towards securing a more equitable workplace, Solvay will report on the fair living wage initiative progress annually to the UN Global Compact.
More information will be available in the Solvay Annual Integrated Report to be published in April 2024.

2. PREPARATION BACKGROUND
2.1. Comparability of results & reconciliation of underlying Income Statement indicators
In addition to IFRS accounts, Solvay also presents underlying Income Statement performance indicators to provide a more consistent and comparable
indication of Solvay’s economic performance. These figures adjust IFRS figures for the non-cash Purchase Price Allocation (PPA) accounting impacts
related to acquisitions, for the coupons of perpetual hybrid bonds classified as equity under IFRS but treated as debt in the underlying statements,and for other elements to generate a measure that avoids distortion and facilitates the appreciation of performance and comparability of resultsover time.

2.2. Alternative performance metric (APM)
Solvay measures its financial performance using alternative performance metrics, which can be found below. Solvay believes that these measurements
are useful for analyzing and explaining changes and trends in its historical results of operations, as they allow performance to be compared on aconsistent basis. Definitions of the different metrics presented here are included in the glossary at the end of this financial report.

2.3. Description of the operational segments
Following the Partial Demerger of the Specialty business on December 9, 2023, Solvay restructured its operating segments to better align with theGroup’s strategy and is organized in the following operating segments:· Basic Chemicals host chemical intermediate businesses focused on mature and resilient markets. Solvay is a world leader in soda ash and peroxides
and major markets served include building and construction, consumer goods and food.
· Performance Chemicals offer a unique formulation & application expertise through customized specialty formulations. Its Silica, Coatis and Special
Chem businesses are also high quality assets with strong positions in their markets.
· Corporate comprises corporate and other business services, such as Group research & innovation.

PERFORMANCEA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

71

3. UNDERLYING GROUP FIGURES
Note P1: Net sales
Net sales of €4,880 million for the full year 2023 were lower by -11.9% versus 2022 (-12.6% organically) primarily due to lower volumes (-14.8%), as aresult of softer demand across all end markets, while prices were slightly up.

Net sales - in € million
FY 2022

5,539

Scope

+77

Forex conversion-37

Volume & mix

-820

Price

+120

FY 2023

4,880

SALES BY END-MARKET
2023 sales by end-markets (in %)Basic Chemicals

Performance Chemicals

SolvayAutomotive

0%

41%

18%

Electronics

0%

9%

4%

Agro, feed and food

24%

7%

17%

Resources and environment

15%

4%

10%

Consumer goods, healthcare and HPC

21%

12%

17%

Building and others

14%

11%

13%

Industrial applications and chemical industry

26%

15%

22%

Note P2: Underlying raw materials & energy costs
The overall raw materials expense of the Group amounted to circa €1.0 billion in 2023 (vs. €1.4 billion in 2022). The raw materials expense can be
split into several categories: minerals derivatives for 32% (e.g., sodium silicate, calcium fluoride, sodium hydroxide…), crude oil derivatives for 27%,
natural gas derivatives circa 22% and others for 19%.
Net energy costs represented around €0.8 billion (vs €1.3 billion in 2022). The distribution per region is the following: in Europe (70%) followed by theAmericas (21%), and Asia and the rest of the world (8%). The main energy sources expense are natural gas for 33% (vs 44% in 2022), coke, anthracite,
petcoke and coal for 39% (vs 29% in 2022), electricity for 21% (vs 21% in 2022), steam, hydrogen and biomass for 6% (vs 5% in 2022).
More information on energy efficiency is available in the Extra-financial section of this Annual Report 4.2. Energy.

72

PERFORMANCEA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Note P3: Underlying EBITDA
Underlying EBITDA evolution
Underlying EBITDA - in € million
FY 2022

1,359

Scope

-110

Forex conversion-5

Basic Chemicals+65

Performance Chemicals-14

Corporate-48

FY 2023

1,246

Underlying EBITDA - in € million
FY 2022

1,359

Scope

-110

Forex conversion-5

Volume & mix-324

Net pricing+308

Fixed costs

+18

Other

-

FY 2023

1,246

Underlying EBITDA of €1,246 million in 2023 was down -8.3%, including the impact from the divestment of RusVinyl in Q1 2023, and essentially flatorganically (+0.2%), with lower volumes being offset by increased Net Pricing and lower fixed costs from strong costs discipline. Overall, the EBITDA
margin increased by +1.0pp to a record +25.5%.

Note P4: Underlying depreciation & amortization
Amortization and depreciation & impairment charges were €321 million in 2023, equal to €321 million in 2022.

Note P5: Underlying net financial charges
Net financial charges

Underlying
FY 2023

FY 2022

Cost of borrowings

-63

-43

Interest on loans and short term deposits

36

16

Other gains and losses on net indebtedness

2

27

a

-25

-

Coupons on perpetual hybrid bonds

b

-70

-82

Interests and realized foreign exchange gains (losses) on the RusVinyl joint venture

c

-

-15

Cost of discounting provisions

d

-45

-23

Result from equity instruments measured at fair value

e

-

-

f=
a+b+c+d+e

-140

-121

(in € million)

Net cost of borrowings

Net financial charges

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

PERFORMANCE73

The variance in the underlying net financial charges is mainly explained by the increase in the cost of borrowing and by the higher cost of discounting
provisions.

Note P6: Underlying income taxes(in € million)

FY 2023

FY 2022

Profit / (loss) for the period before taxes

a

786

917

Earnings from associates and joint ventures

b

46

143

Interests and realized foreign exchange gains (losses) on the RusVinyl joint venture

c

-

-15

Income taxes

d

-198

-177

e = -d/(a-b-c)

26.7%

22.4%

Underlying tax rate

The 4.3 percentage point increase is mainly due to the change in taxable profit by country following the Partial Demerger.

Note P7: Underlying profit from discontinued operations
The profit from discontinued operations in the consolidated income statement is analyzed as follows (2023 – from January 1, 2023, to December
8, 2023).
(in € million)

2023

2022

Sales

6,656

8,092

167

205

of which net sales

6,489

7,887

Cost of goods sold

-4,357-5,489Gross margin

2,299

2,604

Commercial costs

-272

-222

Administrative costs

-466

-617

Research and development costs

-318

-312

Other operating gains / (losses)

-132

-152

Earnings from associates and joint ventures

18

18

Results from portfolio management and major restructuring

-53

-37

Results from legacy remediation and major litigations

-274

-182

EBIT

802

1,100

Cost of borrowings

-54

-63

Interest on loans and short term deposits

14

1

Other gains and (losses) on net indebtedness

-22

-24

Cost of discounting provisions

-20

18

3

-13

Profit/(loss) for the year before taxes

723

1,019

Income taxes

-242

11

Profit for the year from discontinued operations

481

1,029

Gain on Partial Demerger according to IFRIC17

1,651

0

Profit for the year from discontinued operations

2,132

1,029

of which revenue from non-core activities

Result from equity instruments measured at fair value

74

PERFORMANCEA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Note P8: Capex
FY 2023

FY 2022

a

-967

-815

b

57

-

Acquisition (-) of intangible assets

c

-97

-94

Payment of lease liabilities

d

-112

-113

e = a+b+c+d-1,119-1,022

-669

-642

-450

-380

Basic Chemicals

-294

-235

Performance Chemicals

-121

-102

Corporate

-35

-43

1,246

1,359

Basic Chemicals

916

859

Performance Chemicals

405

414

Corporate

-75

86

63.9%

72.0%

Basic Chemicals

67.9%

72.7%

Performance Chemicals

70.2%

75.4%

(in € million)

Acquisition (-) of tangible assetsof which capital expenditures required for the Partial Demerger and excluded from Free
Cash Flow

Capex
Capex in discontinued operations
Capex in continuing operationsf

Underlying EBITDA

Cash conversion (continuing operations)gh = (g+f)/g

Capex in continuing operations was €450 million in 2023, an increase of 18% compared to €380 million in 2022.
Among the major Capex projects for the year was the soda ash capacity expansion at our US facility in Green River, Wyoming.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

PERFORMANCE

75

Note P9: Free Cash Flow
Free Cash Flow (FCF)FY 2023

FY 2022

a

1,911

2,006

b

-116

-155

c

-270

-67

d

-1,792

-831

e

-57

-

Acquisition (-) of subsidiaries

f

-2

-

Acquisition (-) of investments – Other

g

-12

-14

Loans to associates and non-consolidated companies

h

-4

-23

Sale (+) of subsidiaries and investments

i

-718

94

Recognition of factored receivables

j

-

-26

(in € million)

Cash flow from operating activitiesof which voluntary pension contributionsof which cash flow related to internal portfolio management and excluded
from Free Cash Flow
Cash flow from investing activitiesof which capital expenditures required for the Partial Demerger and excluded from Free Cash Flow

Payment of lease liabilities

k

-112

-113

l = a-b-c+d-e-f-g-hi-j+k

1,187

1,255

m

528

684

n = l-m

659

571

Net interests received/(paid) from continuing operations

o

1

-1

Coupons paid on perpetual hybrid bonds

p

-95

-82

Dividends paid to non-controlling interests (continuing operations)

q

-4

-9

r = l+o+p+q

1,042

1,094

s

480

615

t = r-s

561

479

FCF to Solvay shareholders from continuing operations (LTM)

u

561

479

Dividends paid to non-controlling interests (continuing operations) fromcontinuing operations (LTM)

v

-4

-17

w

1,246

1,359

x = (u-v)/w

45.4%

36.5%

FCF
FCF from discontinued operations
FCF from continuing operations

FCF to Solvay shareholders
FCF to Solvay shareholders from discontinued operations
FCF to Solvay shareholders from continuing operations

Underlying EBITDA (LTM)
FCF conversion ratio (LTM, continuing operations)Free cash flow to shareholders from continuing operations amounted to €561 million in 2023 (+17.3% higher than in 2022) thanks to the solid EBITDA
performance. Additionally, the softer demand around year end, combined with the effects of the simplification of our portfolio (spin-off of Syensqo
activities and phasing out of our energy and thermal insulation businesses) led to a positive upside in working capital variation of €+88 million.

76

PERFORMANCEA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Note P10: Net working capital(in € million)

December 31, 2023

December 31, 2022

Inventories

a

642

2,109

Trade receivables

b

840

2,026

Other current receivables

c

462

1,629

Trade payables

d

-850

-2,296

Other current liabilities

e

-585

-1,499

Net working capitalf = a+b+c+d+e

509

1,969

Quarterly total sales

g

1,341

3,907

Annualized quarterly total sales

h = 4*g

5,365

15,626

Net working capital / quarterly total sales

i=f/h

9.5%

12.6%

Net working capital over sales improved to 9.5% in 2023, due to softer demand around year end, combined with the effects of the simplification of
our portfolio (spin-off of Syensqo activities and phasing out of our energy and thermal insulation businesses).

Note P11: Underlying net debt
(in € million)

December 31, 2023

December 31, 2022

Non-current financial debt

a-1,981-2,450Current financial debt

b

-211

-510

IFRS gross debt

c = a+b-2,192-2,959Underlying gross debt

d = c+h-2,192-4,759Other financial instruments (current + non-current)

e

118

236

Cash and cash equivalents

f

584

932

g = e+f

703

1,168

i = c+g-1,489-1,791h--1,800j = i+h-1,489-3,591

Underlying EBITDA (LTM)

k

1,246

3,229

Underlying leverage ratiol = -j/k

1.2

1.1

Total cash and cash equivalents
IFRS net debt
Perpetual hybrid bonds
Underlying net debt

Underlying net financial debt was €1.5 billion at the end of 2023. The capital structure of Solvay after the completion of the Partial Demerger isgenerally in line with the target capital structure announced in June 2023. This will allow Solvay to deploy its strategy in the coming years, while
upholding its commitment regarding dividend payments. The underlying leverage ratio was 1.2x at the end of 2023.

PERFORMANCEA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 377Note P12: Provisions
Provisions at the end of 2022 (in € million)-2,097

Payments

304

Net new provisions-644

Unwinding of provisions-118

Additional voluntary pensions contributions

116

Asset return

66

Remeasurements-173

Separation project, changes in scope and other901

Provisions at the end of 2023

-1,645

Provisions amounted to €1.6 billion at the end of 2023, and included €793 million of provisions relating to employee benefits (primarily pensions)and €506 million of environmental provisions.

Note P13: ROCE
2023 as calculated

2022 as calculated

a

926

1,038

b

-7

-8

c = a+b

918

1,030

WC industrial

d

533

381

WC other

e

99

172

Property, plant and equipment

f

2,152

2,092

Intangible assets

g

216

232

Right-of-use assets

h

273

272

Investments in associates and joint ventures

i

417

517

Other investments

j

32

35

(in € million)

EBIT (LTM)
Accounting impact from EUAs and amortization and depreciation of purchase price allocation (PPA) from acquisitions
Numerator

Goodwill
Denominator

k

783

802

l=
d+e+f+g+h+i+j+k

4,506

4,503

m = c/l

20.4%

22.9%

ROCE

ROCE was 20.4% in 2023, -2.5pp compared to 2022 as a result of lower profit.

78

PERFORMANCEA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

4. UNDERLYING FIGURES PER SEGMENT
SEGMENT OVERVIEW(in € million)

Net sales
Basic Chemicals
Soda Ash & Derivatives
Peroxides
Performance Chemicals
SilicaFY 2023

FY 2022% YoY% Organic

4,880

5,539

-11.9%-12.6%

2,726

2,994

-9.0%

-9.4%

2,093

2,221

-5.8%

-6.8%

633

773

-18.1%-16.9%

2,148

2,542

-15.5%-16.4%

583

631

-7.7%

-6.8%

Coatis646

870-25.8%-29.0%

Special Chem

919

1,040

-11.7%-11.1%

Corporate
EBITDA

6

4

n.m.

n.m

1,246

1,359

-8.3%

+0.2%

Basic Chemicals

916

859

+6.7%

+7.6%

Performance Chemicals

405

414

-2.1%

-3.3%

Corporate

-75

86

n.m.

n.m

EBITDA margin

25.5%

24.5%

+1.0pp-Basic Chemicals

33.6%

28.7%

+4.9pp-

Performance Chemicals

18.9%

16.3%

+2.6pp-Capex in continuing operations

450

380

+18.4%-

Basic Chemicals

294

235

+25.4%

Performance Chemicals

121

102

+18.4%

35

43-19.7%

63.9%

72.0%

-8.1ppCorporate
Cash conversion (continuing operations)-

Basic Chemicals

67.9%

72.7%

-4.8pp

Performance Chemicals

70.2%

75.4%

-5.1pp(in € million)

FY 2023

FY 2022% YoY% Organic

Net sales

2,726

2,994

-9.0%

-9.4%

Soda Ash & Derivatives

2,093

2,221

-5.8%

-6.8%

Note P14: Basic Chemicals

Peroxides

633

773

-18.1%-16.9%EBITDA

916

859

+6.7%

+7.6%

33.6%

28.7%

+4.9pp

-

294

235

+25.4%

-

67.9%

72.7%

-4.8pp-

EBITDA margin
Capex in continuing operations
Cash conversion

NET SALES BRIDGE(in € million)

FY 2022

2,994

Scope

42

Forex conversion-28

Volume and Mix

-422

Price

140

2023

2,726

PERFORMANCEA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 379

Basic Chemicals sales in the full year 2023 were down -9.0% (-9.4% organically) compared to 2022, mainly due to lower volumes (-14.1%) while pricing
was up (+4.7%). Full year EBITDA for the segment was up +6.7% (+7.6% organically) thanks to strong Net Pricing more than offsetting the negative
impact from lower volumes. The EBITDA margin increased by +4.9pp to 33.6%.
Soda Ash & Derivatives sales for 2023 were lower by -5.8% (-6.8% organically), with continued low demand for soda ash in both flat glass andcontainer glass applications, while bicarbonate volumes were also down. This was partially offset by higher prices especially in Europe.
Peroxides sales decreased by -18.1% (-16.9% organically) in 2023, driven by lower volumes from reduced demand mostly in merchant markets,particularly in pulp and paper.

Note P15: Performance Chemicals(in € million)

FY 2023

FY 2022% YoY% Organic

Net sales

2,148

2,542

-15.5%-16.4%

Silica

583

631

-7.7%

-6.8%

Coatis646

870-25.8%-29.0%

Special Chem

919

1,040

-11.7%-11.1%EBITDA

405

414

-2.1%

-3.3%

18.9%

16.3%

+2.6pp

-

121

102

+18.4%

-

70.2%

75.4%

-5.1pp-

EBITDA margin
Capex in continuing operations
Cash conversion

NET SALES BRIDGE(in € million)

FY 2022

2,542

Scope

35

Forex conversion-9

Volume & mix

-401

Price

-21

FY 2023

2,148

Performance Chemicals sales for the full year 2023 were down -15.5% (-16.4% organically) compared to 2022, entirely from lower volumes (-15.8%)
while prices were essentially flat (-0.8%). The EBITDA for the full year was down -2.1% (-3.3% organically), with the drop of volumes not totally offset
by higher Net Pricing and positive impact from fixed cost discipline, while the EBITDA margin was up by +2.6pp at 18.9%.
Silica sales for the 2023 year were lower by -7.7% (-6.8% organically), from lower volumes in the tire and consumer and industrial goods markets.
Coatis sales in 2023 were down by -25.8% (-29.0% organically) from lower volumes and pricing in a continued competitive environment, especiallyin the phenol and derivatives market.
Special Chem sales were lower by -11.7% (-11.1% organically), from lower volumes in most end markets.

80

PERFORMANCEA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Note P16: Corporate & Business services(in € million)

FY 2023

FY 2022% YoY% Organic

Net sales

6

4

n.m.

n.m.

EBITDA

-75

86

n.m.

n.m.

Capex in continuing operations

35

43-19.7%-

Corporate activities include the RusVinyl joint venture activities for 2022, which were divested in Q1 2023.
For the full year 2023, EBITDA was €-75 million, €-161 million lower (€-48 million organically, i.e. excluding the RusVinyl impact) compared to 2022,
the difference being explained by various impacts relating to energy activities.

5. RECONCILIATION OF UNDERLYING AND IFRS MEASURESIn addition to IFRS accounts, Solvay also presents underlying Income Statement performance indicators to provide a more consistent and comparable
indication of Solvay’s economic performance. These figures adjust IFRS figures for the non-cash Purchase Price Allocation (PPA) accounting impacts
related to acquisitions, for the coupons of perpetual hybrid bonds classified as equity under IFRS but treated as debt in the underlying statements,and for other elements to generate a measure that avoids distortion and facilitates the appreciation of performance and comparability of resultsover time.
EBITDA on an IFRS basis totaled €701 million, versus €1,246 million on an underlying basis. The difference of €545 million is explained by thefollowing adjustments to IFRS results, which are done to improve the comparability of underlying results:· €455 million to adjust for the “Result from portfolio management and major restructuring” (excluding depreciation, amortization and impairment
elements), including the loss on RusVinyl disposal and the restructuring and other costs incurred for the project aimed at the separation of theGroup into two independent, publicly listed companies and other restructuring initiatives.
· €50 million to adjust for the “Result from legacy remediation and major litigations”, mainly due to environmental provisions accrued.
· €68 million to adjust for the pure corporate cost related to the project aimed at the separation of the Group into two independent listed companies· €-21 million to exclude net losses/gains related to the management of the CO2 hedges not accounted for as Cash Flow Hedge, deferred inadjustments until the maturity of the economic hedge· €-7 million to exclude contribution to equity earnings of RusVinyl, disposed of in Q1 2023.
EBIT on an IFRS basis totaled €278 million, versus €926 million on an underlying basis. The difference of €647 million is explained by the abovementioned €545 million adjustments at the EBITDA level and €102 million of “Depreciation, amortization & impairments”. The latter consist of:· €7 million to adjust for the non-cash impact of purchase price allocation (PPA), consisting of amortization charges on intangible assets,· which are adjusted in "Other operating gains & losses" for €7 million.
· €95 million to adjust for the impact of impairment of other non-performing assets in “Results from portfolio management and major restructuring”
Net financial charges on an IFRS basis were €-99 million versus €-140 million on an underlying basis. The €-41 million adjustment made to IFRS net
financial charges mainly consists of:· €-70 million reclassification of coupons on perpetual hybrid bonds, which are treated as dividends under IFRS, and as financial charges inunderlying results· €17 million related to the impact of decreasing discount rates on environmental provisions· €16 million related to costs for the refinancing in the context of the Partial Demerger.
Income taxes on an IFRS basis were €-208 million, versus €-198 million on an underlying basis. The €10 million adjustment mainly relates to theadjustments of the earnings before taxes described above and valuation allowances on deferred tax assets.
Discontinued operations generated €2,132 million profit on an IFRS basis and a profit of €842 million on an underlying basis.
Profit / (loss) attributable to Solvay shareholders was €2,093 million on an IFRS basis and €1,417 million on an underlying basis. The delta of €-676
million reflects the above-mentioned adjustments to EBIT, net financial charges and income taxes.

PERFORMANCEA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

81

6. NOTES TO THE FIGURES PER SHARE
Note P17: Earnings per share
Earnings per share

Footnote
A

FY 2023

FY 2022

Underlying profit for the period

a

1,417

1,743

Underlying profit from continuing operations

b

578

725

IFRS profit for the period

c

2,093

1,905

IFRS profit from continuing operations

d

-37

890

Issued shares at end of yeare105,876

105,876

Treasury shares at end of year

f

862

2,107

g = e-f

105,014103,769

Average outstanding shares (basic calculation)h104,162

103,744

Average outstanding shares (diluted calculation)i

105,437

104,143

Underlying profit for the period (basic)

j = a/h

13.61

16.80

Underlying profit from continuing operations (basic)k = b/h

5.55

6.99

IFRS profit for the period (basic)l = c/h

20.09

18.37

IFRS profit from continuing operations (basic)m = d/h

-0.36

8.58

IFRS profit for the period (diluted)

p = c/i

19.85

18.30

IFRS profit from continuing operations (diluted)

q = d/i

-0.35

8.55

Profit attributable to Solvay share (in € m)

Number of shares (in 1,000 shares)

Outstanding shares at the end of year

Data per share (in €)Note P18: Dividend
The Board of Directors has decided to propose a total gross dividend of €2.43 per share, subject to shareholders’ approval during the Ordinary
General Meeting scheduled for May 28, 2024. If approved and taking into account the interim gross dividend of €1.62 per share paid on January 17,
2024, a final gross dividend of €0.81 per share will be paid on June 5, 2024.
In addition, the Board has confirmed the dividend policy of Solvay as follows:“Solvay’s policy is to propose a stable or growing dividend to its shareholders. Solvay yearly dividend is paid in two installments:· the interim dividend (typically 40% of the previous year’s total dividend) is announced with the Third Quarter Results and paid in January.
· the final dividend is announced in February/March, along with the Full Year Results, and is paid, if approved, after the Ordinary General Meeting.”
For over 40 years, the dividend has been stable or has gradually increased, and has never been reduced.

7. OUTLOOK
Across its product portfolio, Solvay expects current demand levels to continue over the next few months and, as such, expects H1 2024 volumes
to be broadly in line with H2 2023. At this point, there is little visibility on the second half of the year, however there are signs that the trend in thesecond half could improve. Solvay expects Soda Ash prices over FY 2024 to be lower than FY 2023, consistent with the current market environment,
which will affect the business margin in 2024. Pricing trends across Solvay’s other businesses are forecasted to be more resilient year on year.
Lower energy and raw materials prices should offset some of the negative pressure on the topline. More importantly, Solvay has started to implement
cost savings initiatives that will start to deliver results in 2024.
For full year 2024, Solvay expects an organic growth of the underlying EBITDA by -10% to -20% versus a high comparison base in 2023, especiallyin H1. This translates into a range of €925 million to €1,040 million at a 1.10 EUR/USD exchange rate.

82

PERFORMANCEA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3The organic growth of the underlying EBITDA is calculated from a 2023 restated figure of €1,154 million (vs a reported figure of €1,246 million),including the following elements:· Phase-out of the thermal insulation HFCs business: -€54 million· Phase-out of the third party energy supply activities: -€41 million· Dis-synergies, net of the “Transition Services Agreement” mark-up: -€12 million· Change in consolidation method of Solvay (Zhenjiang) Chemicals, part of Peroxides, where Solvay retains 9% ownership resulting in the loss ofcontrol due to the Partial Demerger. Impact on the underlying EBITDA: -€8 million· Change in scope of the APM: as from January 1, 2024, the Group’s net sales and underlying EBITDA will include Solvay’s share of net sales andunderlying EBITDA of Peroxidos do Brasil. Impact on the underlying EBITDA : €+23 million.
Free cash flow to Solvay shareholders from continuing operations is expected to be greater than €260 million, in line with the cash usage prioritization
presented during the Capital Market Day in November 2023. It is supported by Solvay’s ability to manage its capex and working capital to ensure
the financing of its businesses and the payment of dividends while keeping the strength of its balance sheet intact.
Solvay remains fully committed to implement its strategic roadmap and reconfirms its 2028 targets as communicated at the Capital Markets Day of
November 2023.
Summary table with Underlying EBITDA and Net Sales impacts:
impact(in € million)

2023 underlying figures, as published

Underlying
EBITDA

Underlying
net sales% organic

1,246

4,880

n.m.

— phase-out thermal insulation business

scope

-54

-107

n.m.

— phase-out third party energy supply activities

scope

-41

N/A

-

— Dis-synergies, net of the “Transition Services Agreement” mark-up

scope

-12

N/A

— Zhenjiang

scope

-8

-25

— Peroxidos do Brasil

APM

+23

+163

1,154

4,911

2023 underlying figures, new baseIn addition, on January 1, 2024, as communicated in Solvay’s Capital Market Day presentation on November 13, 2023, the “eH2O2” (electronicgrade hydrogen peroxide) business has been transferred from GBU Special Chem to GBU Peroxides.

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 305

CORPORATEGOVERNANCE
STATEMENT84	1. Introduction84	2. Highlights of the year87	3. Capital, shares and shareholders
91	4. Board of Directors and Board Committees
91
99

4.1. Board of Directors
4.2. Board committees

103	5. Executive Leadership Team (ELT)106	6. Remuneration report132	7. Main characteristics of risk management, internal
control and internal audit
135	8. External audit
136	9. Deviation from the 2020 Code136	10. Items to be disclosed pursuant to article 34 of
the Belgian Royal Decree of November 14, 2007

83

84

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Corporate governancestatement
1. INTRODUCTION
Solvay SA/NV (“Solvay” or the “Company”) – headquartered in Belgium and listed on Euronext Brussels and Euronext Paris – is committed to
upholding the highest level of Belgian governance practices and disclosures. We consistently seek to strengthen our corporate governancepractices and disclosures, emphasizing transparency and promoting a culture of sustainable long-term value creation, in line with our Purpose.
Solvay’s Board is responsible for maintaining the Solvay Group’s long-term strategic thinking and for overseeing, challenging and supporting the
Executive Leadership Team’s implementation of Solvay’s strategy.
In accordance with Belgian law, Solvay adheres to the principles and provisions of the 2020 Belgian Corporate Governance Code (the “Belgian
Governance Code”), which is based on a “comply or explain” principle. The English, French and Dutch versions of the Belgian Governance Codecan be found on the website of the Belgian Corporate Governance Committee.
Solvay’s Board has adopted a Corporate Governance Charter (the “Governance Charter”). The Governance Charter was last amended on
December 9, 2023 (see section 2.4. below for further details on the latest changes to the Governance Charter) and is available in English, Frenchand Dutch on Solvay’s corporate website. It describes the main aspects of Solvay’s approach to corporate governance, including the governancestructure and the internal rules of the Board, the Executive Leadership Team and the Committees set up by the Board.
In addition, Solvay publishes a Corporate Governance Statement in the Annual Integrated Report, which includes the information required by the
Belgian Code of Companies and Associations (hereafter the “Code of Companies and Associations” or “BCCA”) and the Belgian GovernanceCode. The Corporate Governance Statement includes additional factual information regarding Solvay’s corporate governance practices andrelevant modifications thereto, together with details on the remuneration of directors and executives and on relevant events that took place during
the preceding year.
This section of the Annual Integrated Report constitutes Solvay’s Corporate Governance Statement for the year 2023.

2. HIGHLIGHTS OF THE YEAR
2023 was a pivotal year for the Solvay Group with the completion of the separation of Solvay into two independent publicly listed companies.
On December 8, 2023, the Extraordinary Shareholders’ Meetings of the Company and Syensqo SA/NV (“Syensqo”) approved the Partial Demergerof the Company whereby the shares and other interests the Company held in the legal entities operating the so-called “Specialty Businesses,” itsrights and obligations under the agreements entered into with those legal entities, as well as certain other assets and liabilities were transferred to
Syensqo (the “Partial Demerger”), with 99.53% of positive votes.
Accordingly, the Partial Demerger became effective at 00:00 am CET during the night of December 8, 2023 to December 9, 2023 (the “Partial
Demerger Date”), at which time the assets and liabilities of the Company set forth in the Partial Demerger proposal were transferred pursuant to auniversal succession regime to Syensqo.
The completion of the Partial Demerger impacted the governance of Solvay. Amongst others, it led to changes to the composition of the Board of
Directors and of the Executive Leadership Team and to amendments to the Articles of Association and to the Governance Charter. In accordancewith Principle 1.3 of the Belgian Governance Code, these changes are further described below.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

CORPORATE GOVERNANCE STATEMENT

85

2.1. Changes to the composition of the Board of Directors
Before the Partial Demerger Date, the Board of Directors was composed of the following 15 directors (the “Pre-Demerger Board”):· Mr. Nicolas Boël· Ms. Ilham Kadri· Mr. Charles Casimir-Lambert*· Mr. Wolfgang Colberg· Mr. Hervé Coppens d’Eeckenbrugge· Ms. Françoise de Viron· Ms. Laurence Debroux*· Mr. Pierre Gurdjian· Mr. Edouard Janssen· Ms. Agnès Lemarchand· Mr. Matti Lievonen· Mr. Gilles Michel· Ms. Marjan Oudeman· Ms. Aude Thibaut de Maisières· Ms. Rosemary Thorne*At the Annual Shareholders Meeting of the Company held on May 9, 2023, Mr. Charles Casimir-Lambert’s mandate ended and was not renewed and
Ms. Laurence Debroux resigned from her mandate.

At the Extraordinary Shareholders’ Meeting of the Company held on December 8, 2023, which approved the Partial Demerger of the Company:· Mr. Nicolas Boël, Ms. Ilham Kadri, Mr. Hervé Coppens d’Eeckenbrugge, Ms. Françoise de Viron, Mr. Edouard Janssen, Ms. Agnès Lemarchand,
Mr. Matti Lievonen, Mr. Gilles Michel and Ms. Rosemary Thorne, resigned from their mandate of Director· Mr. Philippe Kehren, Mr. Thomas Aebischer, Mr. Thierry Bonnefous, Mr. Yves Bonte, Mr. Melchior de Vogüé and Ms. Annette Stube, were appointed
directors of the Company for a four-year term
Following completion of the Partial Demerger, the Board of Directors is composed of the 10 following directors (referred in this section as the“Board”):· Mr. Pierre Gurdjian (Chair and Independent director)· Mr. Philippe Kehren (Executive director and Chief Executive Officer)· Mr. Thomas Aebischer (Independent director)· Mr. Thierry Bonnefous*· Mr. Yves Bonte (Independent director)· Mr. Wolfgang Colberg (Independent director)· Mr. Melchior de Vogüé*· Ms. Marjan Oudeman (Independent director)· Ms. Annette Stube (Independent director)· Ms. Aude Thibaut de Maisières* (Vice-Chair)*Director whose appointment was proposed by Solvac SA to the Company.

The directors of Solvay collectively possess a wealth of expertise in areas such as governance and strategic planning, global chemicals and industrials
sectors, ESG, corporate financial management and business development.
For more details on the Board of Directors and the Board Committees, please refer to section 4 of the Corporate Governance Statement.

2.2. Changes to the composition of the Executive Leadership Team
Before the Partial Demerger Date, the Executive Leadership Team was composed as follows (the “Pre-Demerger ELT”):· Ms. Ilham Kadri, (Chief Executive Officer and Chair of the ELT)
· Mr. Marc Chollet (Chief Strategy Officer)· Mr. Augusto Di Donfrancesco (Chief Transformation and Operations Officer)· Mr. Dominique Golsong (Group General Counsel and Corporate Secretary)· Mr. Karim Hajjar (Chief Financial Officer)· Mr. Hervé Tiberghien (Chief People Officer)
Following the completion of the Partial Demerger, the mandates of Ms. Ilham Kadri, Mr. Marc Chollet, Mr. Augusto Di Donfrancesco, Mr. Dominique
Golsong, Mr. Karim Hajjar and Mr. Hervé Tiberghien as members of the Executive Leadership Team were terminated.

86

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3On the Partial Demerger Date, the Board appointed the following new members of the Executive Leadership Team (referred in this section as the“ELT”):· Mr. Philippe Kehren (Chief Executive Officer and Chair of the ELT)
· Mr. Alexandre Blum (Chief Financial and Strategy Officer)· Ms. Lisa J. Brown (Group General Counsel and Corporate Secretary)· Mr. Lanny Duvall (Chief Operations Officer)· Dr. Mark van Bijsterveld (Chief People Officer)
The ELT brings decades of expertise to drive market leadership, people leadership, cost and process excellence, energy transition, governanceand capital discipline.
For more details on the ELT, please refer to section 5 of the Corporate Governance Statement.

2.3. Amendments to the Articles of Association
In the context of the Partial Demerger, the Articles of Association of the Company were amended.
The main changes were as follows:· Vice-Chairperson: The Articles of Association were amended to allow the Board of Directors to appoint a Vice-Chairperson from among its
members.
· Thresholds for supermajority matters at Board level: The monetary thresholds for actions or decisions to qualify as “actions that would
substantially modify the activities of the Company or its Group,” which require a majority of three-quarters of the votes (rounded up to the nearestunit) of the directors present or represented, were reduced to reflect the impact of the Partial Demerger.
· Vote by correspondence: Additional means for shareholders to vote before the future Shareholders’ Meetings of the Company, by correspondenceor via the Company’s website, were added.
· Date of 2024 AGM: Exceptionally, the Annual Shareholders’ Meeting of Solvay to be held in 2024 to resolve on the Company’s financial
statements for the year ended December 31, 2023, will take place on May 28, 2024.
· Share capital: As a result of the Partial Demerger, the capital of the Company was reduced from one billion five hundred eighty eight million one
hundred forty-six thousand two hundred forty euros (EUR 1,588,146, 240.00) to two hundred and thirty-six million five hundred and eighty-three
thousand four hundred and forty-seven euros and eighteen cents (EUR 236,583,447.18) without cancelation of existing shares.
· Authorized capital: The balance of the authorization granted to the Board of Directors by the Extraordinary Shareholders’ Meeting of May 12,
2020, was canceled and replaced with new authorizations to increase the capital, including in the event of a takeover bid (see section 10 of thisCorporate Governance Statement for a description of such authorizations).
· Share buy-backs: The authorization granted to the Board of Directors by the Extraordinary Shareholders’ Meeting of May 12, 2020, was canceledand replaced with new authorizations to acquire, pledge, dispose and cancel own shares, including in the event of a takeover bid (see section 10of this Corporate Governance Statement for a description of such authorizations).

2.4. Amendments to the Governance Charter
The Governance Charter defines the role and mission, functioning, size, composition, training and evaluation of the Board. The internal rules of theBoard and the Committees are attached to the Governance Charter, available on the Company’s corporate website. The Governance Charter wasamended in the context of the Partial Demerger and a new version was approved by the Board on December 9, 2023.
The main changes to the Governance Charter related to the below topics:· Separation between the roles of the Chairperson and the CEO: The principle pursuant to which the Chairperson of the Board of Directors shallnot be the CEO was formally added to the Governance Charter.
· Vice-Chairperson: If a Vice-Chairperson is elected, he or she shall be a non-independent director if the Chairperson is independent.
· Age limit for directors: The age limit for directors was increased to 75 years old.
· Solvac: Considering the level of its stake in the share capital of Solvay, Solvac should be entitled to propose the appointment of three directors,
and the Board may appoint on each Board Committee one of the directors appointed upon proposal of Solvac (subject to such director having
the appropriate skills and experience to serve in the relevant Committee).
· Board Committees:-

The Audit committee was renamed “Audit and Risk Committee.”
The Environmental, Social and Governance (ESG) Committee was formally added to the Governance Charter.
The respective roles and missions of the ESG Committee and the Audit and Risk Committee in terms of ESG KPIs were specified, taking
into account recent developments in this respect.

· ELT: The default duration of ELT members’ terms of office was increased to four years.
· Board and ELT nomination and evaluation: The process for the nomination and evaluation of Board and ELT members was reviewed andupdated.

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 387

3. CAPITAL, SHARES AND SHAREHOLDERS
3.1. Capital
As a result of the Partial Demerger which became effective on December 9, 2023, the capital was reduced from €1,588,146,240.00 to €236,583,447.18.
On December 31, 2023, Solvay’s share capital amounted to €236,583,447.18 and was represented by 105,876,416 issued ordinary shares.

3.2. Solvay shares
Solvay (SOLB.BE) is listed on Euronext Brussels, which is its primary listing. Solvay has a secondary listing on Euronext Paris. Solvay shares are also
traded over the counter (OTC) as an unsponsored American Depository Receipt (ADR).
On December 31, 2023, Solvay was a member of the BEL20, the main Belgian index. Solvay shares are also part of other major indexes including the
BEL Chemicals, indexes from the STOXX (DJ STOXX, DJ Euro STOXX, STOXX Europe 600 chemicals) and MSCI families, Euronext 100, Dow Jones
Sustainability World Index and FTSE4Good Index.
Between January 1, 2023, and December 8, 2023 (i.e., before completion of the Partial Demerger), the average closing price of the Solvay sharewas €104.27, the price range was €94.12 to €113.05 and the average daily trading volume as reported by Euronext was 196,583 (compared to207,208 shares for the full year 2022).
Between December 11, 2023 and December 29, 2023 (i.e., after completion of the Partial Demerger), the average closing price of one Solvay
share was €25.41, the price range was €17.90 to €27.96 and the average daily trading volume as reported by Euronext was 1,818,168 (compared to207,208 shares for the full year 2022).
Solvay’s closing share price on December 29, 2023, was €27.73.

SOLVAYSHAREPRICESAND
TRADINGVOLUMESFROM JANUARY
2023 TO DECEMBER
8 2023SOLVAY SHAREPRICESAND
TRADINGVOLUMESFROM JANUARY
2023 TO DECEMBER
8, 2023

volumein shares

shareprice in €800.000120

700.000100

600.00080

500.00060
400.000
40
2000.00020
100.000

VolumeDEC. 8

NOV.

OCT.

SEPT.

AUG.

JULY

JUNE

MAY

APR.

MAR.

FEB.

0
JAN. 23

0Price

SOLVAY SHARE PRICES AND TRADING VOLUMES FROM DECEMBER 11 2023 TO DECEMBER 29, 2023

volumein shares

shareprice in €10.000.000

30

9.000.000
8.000.000
7.000.000
6.000.000

20

D

JA

Volume88

Price

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

SOLVAYSHAREPRICESAND
TRADINGVOLUMESFROM DECEMBER
TO DECEMBERSOLVAY SHAREPRICESAND
TRADINGVOLUMESFROM DECEMBER
11 2023 TO11
DECEMBER
29, 2023 29, 2023

volumein shares

shareprice in €10.000.000

30

9.000.000
8.000.000
7.000.000

20

6.000.000
5.000.000
4.000.000

10

3.000.000
2.000.000

VolumeDEC.29DEC.27

DEC.25

DEC.23

DEC.21

DEC.19DEC.17

DEC.13

DEC.150
DEC.111.000.000

Price

3.3. Shareholders
Shareholder structure
As of December 31, 2023, Solvay’s capital was represented by 105,876,416 ordinary shares. As there are no different classes of shares, all Solvay
shares carry the same rights. Each share comes with the right to one vote, following the “one share, one vote” principle.
Solvay ordinary shares can be held as either:· Registered shares: shares represented by an entry within Solvay’s share registry, managed by Solvay’s Shareholder Services· Dematerialized shares: shares represented by a book entry in the name of the shareholder with a recognized account keeper or a clearing
institution
The transparency notifications are required by Belgian law and Solvay’s bylaws when an investor crosses the thresholds of 3%, 5%, 7.5% or any
multiple of 5% of Solvay voting rights. Unless otherwise indicated, section 2.3.1 of this Annual Integrated Report refers to theoretical voting rights,
taking into account all the shares to which voting rights are attached, even if the exercise of these rights is suspended.

SolvacSolvay’s largest shareholder is Solvac SA (“Solvac”). Solvac is a public limited liability company established under Belgian law, founded in 1983. Itsannual reports indicate that its primary asset consists of shares in Solvay.
Its most recent notification to Solvay is dated from March 29, 2021, and indicates it owns 32,621,583 shares of Solvay, representing 30.81% of thetotal number of shares issued by Solvay.
Solvac’s shares are traded on Euronext Brussels. It has approximately 14,000 shareholders. Among these, approximately 2,400 individuals are related
to the founding families of Solvay and Solvac, which, combined, are reported to hold approximately 77.32% of Solvac’s shares.
In the context of the Partial Demerger, Solvac’s Board expressed its strategic investment objective in Solvay as follows (press release dated
November 14, 2023):“Over the last few years, Solvay has undergone a successful transformation in a highly volatile global environment. The contemplated separation
would firmly establish two industry leaders respectively in essential and specialty chemicals, each positioned to meet their key strategic, financial
and sustainability goals.
Solvac continues to be convinced of the role that essential chemistry plays to respond to humanity’s needs and of the impact of innovation thatspecialty chemistry will play to answer future sustainability challenges.
“Following Solvac’s initial expression of support in its press release of March 15, 2022, Solvay has published further information with respect to theA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

CORPORATE GOVERNANCE STATEMENT

89

project, which Solvac has analyzed with its independent financial advisors PJT Partners and KBC Securities and with its legal advisor, Freshfields
Bruckhaus Deringer LLP. This project is intended to be completed shortly, with a Solvay shareholder meeting vote on the Partial Demerger plannedon December 8, 2023. The Board of Directors of Solvac, on the basis thereof, confirms Solvac’s continued full support of the project as announced
on Solvay’s website and as presented in the documents and the capital market day relating to it.”A relationship agreement with Solvac has not been considered necessary so far. Under the new Corporate Governance, Solvay welcome theproportional representation of Solvac’s representative on the Board of Solvay as a sign of long term commitment to Solvay’s new chapter and its
continued success.

Solvay Stock Option Management
Solvay Stock Option Management SRL (SSOM) is a wholly-owned indirect subsidiary of Solvay. As of December 31, 2023, SSOM held 868,990 Solvay
shares and 279,880 call options entitling it to purchase Solvay shares. Those shares and options are held by SSOM on its own account, as part of its
strategy to cover the obligations assumed by SSOM regarding stock options granted by Solvay to Solvay Group senior executives.
The voting rights attached to the shares held by Solvay Stock Option Management are, as a matter of law, suspended.

Employee Share Purchase Plan
In December 2021, Solvay announced a global employee shareholding initiative, the Employee Share Purchase Program (“ESPP”), in coordination
with the Solvay Global Forum, a global employee representative body created in 2015 to meet with Solvay’s top management on a quarterly basis tocomment on and discuss the quarterly results of Solvay and to keep everyone informed of the main new projects. The ESPP was set-up to increase
the Solvay Group employees’ understanding of Solvay’s performance and enhance their sense of belonging and ownership in Solvay.
In September 2022, 6,105 employee shareholders participated to the first employee shareholder plan. As at December 31, 2023, 2,075 active
employees at Solvay were part of the ESPP.
In October 2024 they will receive their free and matching Solvay shares. The number of those free and/or matching shares will be determined basedon the 30-day average closing price of the Solvay share relative to the combined 30-day average closing prices of the Syensqo share and the Solvay
share.

3.4. Relations with investors and analysts
Solvay maintains an open, ongoing and constructive dialogue with the investment community. We always seek to provide pertinent and accurate
information to ensure understanding of Solvay’s business and strategy, helping the financial community to make make its own informed assessments
and judgments. Detailed information on our business activities, strategy and financial performance is available through various regulatory and otherpublications, such as the Annual Integrated Report, financial reports and press releases, as well as other media, such as webcasts, which are available
on our website.
The Investor Relations team maintains a close relationship with investors throughout the year. The CEO and CFO also prioritize interactions with theinvestment community. Solvay’s teams have been agile and flexible in maintaining these interactions, supplementing the use of digital technologies
with a return to face-to-face meetings.
In February 2023, the webinar series that we initiated in 2022 continued with a focus on the Soda Ash business, showcasing the leading positions
and growth prospects. Another webinar on the Composite Materials segment focused on innovation and growth opportunities in the aerospaceand defense market.
Further, throughout 2023, specific information was shared with the financial community regarding the activities of Solvay that remained with Solvay
following the completion of the Partial Demerger:· Mid-June 2023, Solvay announced the capital structure and financial policies applicable to Solvay after the Partial Demerger.
· On June 30, 2023, Solvay published an information document providing additional information, including pro forma financial information, about
Solvay and how it would operate following completion of the Partial Demerger.
· On August 28, 2023, Solvay published H1 2023 unaudited pro forma financial information covering Solvay’s activities following completion of thePartial Demerger.
· On November 13, 2023, at its Capital Market Day, Solvay unveiled its new management, new strategy and financial and extra-financial targets
following completion of the Partial Demerger. In that context, Solvay confirmed its climate commitments, driving towards carbon neutrality by
2050 through its investment in energy transition.
· On November 20, 2023, Solvay published a supplement to its information document dated June 30, 2023.
· On December 8, 2023, at the Extraordinary General Shareholders’ Meeting of Solvay SA/NV, the separation plan was supported by 99.53% of
positive votes, officially establishing Syensqo as a separate new entity.
These documents, as well as recordings of these events, are available on the investors section of our website.

90

3.4.1.

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3Interactions with shareholders, Solvac and Solvay founding families

Every shareholder has access to clear, comprehensive, transparent information, tailored to his or her individual needs, through a dedicated section
on the Solvay website. Solvay also engages with retail banks, regularly interacting with their analysts and participating in events dedicated to private
investors.
In 2023, Solvay held regular meetings with its reference shareholder, Solvac. The CEO and CFO gave three presentations to Solvac’s Board of
Directors in 2023, covering the Solvay Group’s half- and full-year results and the progress on the project to separate Solvay into two companies.
Solvay’s management participated in two events organized by shareholders from Solvay’s founding families to update them on strategy and results.
In addition, the IR team participated in Finance Avenue – a shareholder event hosted in Brussels – prior to the Extraordinary General Shareholders’Meeting to share information related to the Partial Demerger.

3.4.2.

Interactions with sell-side analysts

Solvay is covered by 19 sell-side analysts who regularly publish research on the Company. The up-to-date list of analysts can be found on Solvay’s
website.
Apart from regular individual meetings, emails and phone conversations, Solvay organizes quarterly conference calls and webinar series between
the senior management and the financial community, following the publication of the Group’s results. Although specifically geared toward analysts,
these conference calls are accessible live to all investors, and remain available in the form of a video and transcript on the Solvay website.
Where opportunities permit, such as when Solvay management undertakes investor roadshows or participates in investor conferences, face-to-facemeetings with analysts are also periodically arranged in major financial cities, including Brussels, London, Paris, New York and Boston.

3.4.3.

Interactions with institutional investors

Solvay mainly interacts with institutional investors following the announcement of quarterly, half- and full-year results. In 2023, Solvay participatedin many events, including with senior management. This included roadshows, virtual meetings and investor conferences in countries across Europe
and North America.
Solvay's CEO and CFO attended many of the meetings with the financial community. They discussed different topics, including quarterly earnings
results, market conditions, the prospects for the current year and the medium-term strategy. In 2023, the executive management was also particularly
active in communicating information about the separation project at various events organized with institutional investors.

3.4.4.

Interactions with stewardship teams at shareholders and ESG research providers, including proxy advisors

At least once a year, the CEO, the CFO, the Group General Counsel and Corporate Secretary, the Chief People Officer, the Chief Sustainability
and Government Affairs Officer, and the Head of Investor Relations meet with the stewardship teams of institutional investors and ESG research
providers, including proxy advisors. The purpose of this engagement exercise is to provide an update on Solvay’s key ESG targets, as well as our
performance. In 2023, topics included:· The strengthening of Solvay’s climate commitments through our new Scope 3 objective.
· The impact of the separation project: employees’ commitment, culture, performance, governance.
· The definition and functioning of the Boards of Solvay and Syensqo following the Partial Demerger.
· The biodiversity roadmap and results.
· The actions and investments made to reinforce responsible site management.
· The impact of the Partial Demerger for the Solvay One Planet program.
Solvay also treats these engagements as an opportunity to understand changes in the methodologies and policies used by the stewardship teams
and service providers, as well as to actively solicit their feedback on how Solvay can improve its ESG practices and disclosures.
During 2023, Solvay engaged with its top investors’ stewardship teams and leading service providers. These meetings were attended by various
members of the Pre-Demerger ELT, including Solvay’s former CEO at the relevant time.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

CORPORATE GOVERNANCE STATEMENT

91

4. BOARD OF DIRECTORS AND BOARD COMMITTEES
4.1. Board of Directors
4.1.1.

Structure and composition

The composition and functioning of the Board of Directors is continuously reviewed to ensure that the right profiles are represented, with the skills
and experience considered necessary to drive Solvay’s business and sustainability strategy.
In the context of the Partial Demerger of the Company, the composition of the Board of Directors was reviewed so that it would continue tocomprise, after the Partial Demerger, a diverse group of accomplished leaders with global industrial expertise, deep strategic insight, strong
financial acumen and proven track records of driving value creation.
The composition of the Board of Directors before and after completion of the Partial Demerger is summarized below:

Pre-Demerger Board (January 1-December 8)

Board (December 9- December 31)· Mr. Nicolas Boël (Chair)· Ms. Ilham Kadri (Executive director and Chief Executive Officer)· Mr. Charles Casimir-Lambert*· Mr. Wolfgang Colberg (Independent director)· Mr. Hervé Coppens d’Eeckenbrugge· Ms. Françoise de Viron (Independent director)· Ms. Laurence Debroux (Independent director)*· Mr. Pierre Gurdjian (Independent director)· Mr. Edouard Janssen· Ms. Agnès Lemarchand (Independent director)· Mr. Matti Lievonen (Independent director)· Mr. Gilles Michel (Independent director)· Ms. Marjan Oudeman (Independent director)· Ms. Aude Thibaut de Maisières (Independent director)· Ms. Rosemary Thorne (Independent director)· Mr. Pierre Gurdjian (Chair and Independent director)· Mr. Philippe Kehren (Executive director and Chief
Executive Officer)· Mr. Thomas Aebischer (Independent director)· Mr. Thierry Bonnefous*· Mr. Yves Bonte (Independent director)· Mr. Wolfgang Colberg (Independent director)· Mr. Melchior de Vogüé*· Ms. Marjan Oudeman (Independent director)· Ms. Annette Stube (Independent director)· Ms. Aude Thibaut de Maisières* (Vice-Chair)*Director whose appointment was proposed by Solvac to theCompany.

*At the Annual Shareholder Meeting of the Company held on May 9, 2023, Mr. Charles
Casimir-Lambert’s mandate ended and was not renewed and Ms. Laurence Debroux resigned
from her mandate.

As a result, as of December 31, 2023, the Board was composed of 10 directors and had the following attributes:· The role of Chair of the Board and CEO are separated.
· Nine of the 10 directors on the Board are non-executive and represent diverse competencies, as highlighted in the directors’ skills and qualification
matrix below.
· Three of the ten directors are women.
· Six of the 10 directors are considered to be independent non-executive directors, according to the criteria defined by the Belgian Governance
Code, and have been recognized as such by the respective Annual and Extraordinary Shareholders’ Meetings during which they were elected.
Three of the 10 directors were appointed upon the proposal of Solvac.
· Each of the ten members of the Board has a four-year mandate.
· The Board is represented with six different nationalities.

92

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3The table that follows includes information about the members of the Board as of December 31, 2023:✪ Year of first appointment☑ Presence at Board meetings in 2023 based on their date of appointment

PIERRE GURDJIANPHILIPPE KEHREN

Belgian/Born in: 1961

French/Born in: 1971

Chair of the Board of Directors

Executive Director

Independent Director✪ 2022 ☑ 18/18

Solvay SA mandates:
Chair of the Board of Directors
Chair of the Finance Committee
Member of the Compensation and Nomination Committees
Directorship expiry date: 2026
Diplomas:
Degree in Commercial Engineering from the Free University ofBrussels (VUB), (Belgium)MBA from Harvard Business School, (USA)
Other roles:
Board Member of Lhoist; Board Member ofQueen Elisabeth Music Chapel Belgium
Co-founder of Belgium’s 40 under 40 societal leadershipdevelopment platform
Directorships in public companies:
Board Member of UCB SA✪ 2023 ☑ 1/1

Solvay SA mandates:
Chair of the Executive Leadership Team
Member of the Finance and ESG Committees
Directorship expiry date: 2027
Diplomas:
Master of Science in Chemical Engineering from the University of
Wisconsin - Madison (USA)
Bachelor in Engineering-Petroleum (Spec. in Refining,
Engineering and Gas) from the French Institute ofPetroleumSchool - Paris (France)
Bachelor in Engineering from École Polytechnique - Paris (France)
Other roles: None
Directorships in public companies: NoneA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

CORPORATE GOVERNANCE STATEMENTTHOMAS AEBISCHERTHIERRY BONNEFOUS

Swiss/Born in: 1961

French/Born in: 1979

Independent Director

Non-independent Director

Solvay SA mandates:
Chair of the Audit and Risk Committee

Solvay SA mandates:
Member of the ESG Committee

Member of the Finance Committee

Directorship expiry date: 2027

✪ 2023 ☑ 1/1

Directorship expiry date: 2027
Diplomas:
Advanced Management Program, Harvard Business School (USA)
Trustee Exams and School for Swiss Certified Accountants, Zurich(Switzerland)
Other roles:
Audit Committee Chair and Vice-Chairman of the Board of dormakaba,
Rümlang, CH
Directorships in public companies:
Board Member of dormakaba, Rümlang, CH

93✪ 2023 ☑ 1/1

Diplomas:
Master of Engineering, Science and Technology from École
Polytechnique – Paris (France)
Master of Science in Project, Innovation and Design Managementfrom École Polytechnique, École des Mines and École des Ponts –ParisTech (France)
INSEAD – Advanced Management Executive
Programme (Singapore & France)
Auditor of the Moisson-Desroches cycle – Fer de France – Paris(France)
Other roles:
Digital Train Program Director at Alstom
Directorship in public companies:
None

94

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

YVES BONTEWOLFGANG COLBERG

Belgian/Born in: 1961

German/Born in: 1959

Independent Director

Independent Director✪ 2023 ☑ 1/1

Solvay SA mandates:
Member of the Nomination and of the Compensation Committees
Directorship expiry date: 2027
Diplomas:
Post-graduate degree in Business, Administration and Management,
and Master’s degree in Civil Engineering (Metallurgy and Materials
Engineering) from the University of Leuven (Belgium)
International Directors Programme at INSEAD Business School –Paris (France)✪ 2021 ☑ 18/18

Solvay SA mandates:
Chairman of the Compensation Committee
Member of the Audit and Risk, Finance and Nomination
Committees
Directorship expiry date: 2025
Diplomas:
PhD in Political Science (Business Administration and BusinessInformatics) from the University of Kiel, (Germany)

Other roles:
Chair of the Board of Directors and Chief Executive Officer at Domo
Chemicals NV

Other roles:
Chairman of AMSilk GmbH (Germany)

Chair of the Board of Domo Chemicals Holding NV

Chairman of Chemicalnvest Holding BV (the Netherlands)

Directorships in public companies:
None

Industrial Partner of Deutsche Invest Capital Partners (Germany)

Board member of Dussur (SA)Board Member of Fire (BC) Holdco Ltd. (UK)

Directorships in public companies:
Board Member of Thyssenkrupp AG, Pernod Ricard SA,
and Burelle SA

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

MARJAN OUDEMANCORPORATE GOVERNANCE STATEMENTANNETTE STUBE

Dutch/Born in: 1958

Danish/Born in: 1967

Independent Director

Independent Director

Solvay SA mandates:
Chair of the Nomination Committee

Solvay SA mandates:
Member of the ESG Committee

Member of the Audit and Risk Committee

Directorship expiry date: 2027

✪ 2015 ☑ 18/18

Member of the ESG and Compensation Committees
Directorship expiry date: 2027
Diplomas:
Law Degree from Rijksuniversiteit Groningen, the Netherlands
Master’s Degree in Business Administration from the Universityof Rochester New York (USA) and Erasmus Universiteit
Rotterdam (the Netherlands)
Other roles:
Board Member SHV Holdings NV and KLM NV
Chair of Groenvermogen, Dutch innovation Fund for Green
HydrogenDirectorships in public companies:
Board Member of UPM-Kymmene Oyi✪ 2023 ☑ 1/1

Diplomas:
Master's degree in Psychology (Spec. in Organizational
Development) from the University of Copenhagen (Denmark)
Other roles:
Chief Sustainability Officer at the LEGO group
Member of the Board of Directors of WWF (Denmark)Directorships in public companies:
None

95

96

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

AUDE THIBAUT DE MAISIÈRES

MELCHIOR DE VOGÜÉ

Belgian/Born in: 1975

French/Born in: 1962

Non-independent Director

Non-independent Director

Solvay SA mandates:
Vice-Chair of the Board of Directors

Solvay SA mandates:
Member of the Audit and Risk and Finance Committees

Chair of the ESG Committee

Directorship expiry date: 2027

✪ 2020 ☑ 18/18✪ 2023 ☑ 1/1

Member of the Nomination and of the Compensation Committees
Directorship expiry date: 2024
Diplomas:
MBA from Columbia Business School, New York, (USA)MSc from the London School of Economics, London, (UK)MA from the University of La Sorbonne, Paris, (France)
Other roles:
Member of the Investment Committee, The Innovation Fund SA/
NV
Board Member, Paradigm Capital Value Fund SICAV
Cofounder & Managing Director, Sonic Womb Productions Limited
Directorships in public companies: None

4.1.2.

Diplomas:
Master's degree in Business, Administration and Managementfrom the École des Hautes Études Commerciales – Paris (France)
Master's degree in Business, Administration and Management at
the Paris IX-Dauphine University (France)
Certified Analyst degree from the French Society of Financial
Analysts – Paris (France)
Other roles:
Board Member of Centre Médical de Bligny
Chief Financial Officer of the Etex Group
Directorships in public companies:
Board Member and Chairman of the Risk and Audit Committeeof Solvac SA

Director skills and qualification matrix

Collectively, the members of the Board bring the wide set of skills and experience required to develop and oversee the Solvay Group’s longterm strategy. This experience has been aggregated in the Director Skills and Qualification Matrix. The Board’s skills and experience ranges frominternational industries and markets – for many of them at executive level – to functional domains, like human resources.
This matrix also helps the Nominations Committee, together with the Board, to identify the skills and experience needed to help drive Solvay’s
business and sustainability strategy when considering new Board members.

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 397Each director’s skills and experience is presented in the Director Skills and Qualification Matrix below.

Chemicalindustry

Finance

Corporate
governanceIndustrial

X

X

X

Pierre Gurdjian
Philippe Kehren

X

X

Thomas Aebischer

X

X

X
X

X

X

X

Wolfgang Colberg

X

X

X

X

Marjan Oudeman

X

X

X

X

X

X

Aude Thibaut de Maisières

X

X

X

Melchior de Vogüé

X

X

X

International

X
X

X
X

X

4.1.3.

X

X

Yves Bonte

ESG

X

X

Thierry Bonnefous

Annette Stube

Research & Digital/
Human
Development
ITresources

X

X

X
X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

Diversity at Board level

Solvay values diversity of its directors, including in terms of gender, age, nationalities, experience, education and skill sets. Details of the qualifications
and experience of the Board members can be found in sections 4.1.1 and 4.1.2. The composition of the Board satisfies the legal requirements
applicable in Belgium relating to gender diversity though the Board considers this to be the minimum threshold to be met and will continuously
review the requirements of its institutional investors and proxy advisors. Furthermore, Solvay’s commitment to diversity at Board level is further
evidenced by the criteria for appointment of directors listed in section 5.2.3 of the Governance Charter, which is available on Solvay’s corporatewebsite.

4.1.4.

Functioning· The Articles of Association provide that the Board shall meet as often as the Company’s interests so require. The meeting of the Board is convenedby the Chairperson or, in the absence of the Chairperson, the Vice-Chairperson or a director with day-to-day responsibilities. The Board of Directors
shall be convened each time that the Executive Leadership Team, a director with day-to-day responsibilities or three directors so request(s) it.
Further information on the functioning of the Board of Directors is provided for in the Governance Charter.
· 2023 was an exceptional year for the Company as it worked intensively towards the Partial Demerger. The Board undertook an active role in thegovernance of the project, which is reflected by the number of Board meetings held during the year. The below table indicates the individual
attendance rate of directors at Board meetings in 2023.

Number of meetings

Attendance

Pre-Demerger Board

Board

17 meetings from January1-December 8

1 meeting from December 9-December 31· Mr. Nicolas Boël: 17/17· Ms. Ilham Kadri: 17/17· Mr. Charles Casimir-Lambert: 3/3*
· Mr. Wolfgang Colberg: 17/17· Mr. Hervé Coppens d’Eeckenbrugge:16/17· Ms. Françoise de Viron: 14/17· Ms. Laurence Debroux: 1/3**· Mr. Pierre Gurdjian: 17/17· Mr. Edouard Janssen: 15/17· Ms. Agnès Lemarchand: 9/17
· Mr. Matti Lievonen: 16/17· Mr. Gilles Michel: 14/17· Ms. Marjan Oudeman: 17/17· Ms. Aude Thibaut de Maisières:17/17· Ms. Rosemary Thorne: 17/17· Mr. Pierre Gurdjian: 1/1· Mr. Philippe Kehren: 1/1· Mr. Thomas Aebischer: 1/1· Mr. Thierry Bonnefous: 1/1· Mr. Yves Bonte: 1/1· Mr. Wolfgang Colberg: 1/1· Mr. Melchior de Vogüé: 1/1· Ms. Marjan Oudeman: 1/1· Ms. Aude Thibaut de Maisières: 1/1· Ms. Annette Stube: 1/1* Mr. Charles Casimir-Lambert’s mandate ended at the Annual General
Meeting held on May 9, 2023.
** Ms. Laurence Debroux resigned at the Annual General Meeting held on
May 9, 2023.

98

CORPORATE GOVERNANCE STATEMENT

Main areas of
discussion, review anddecisions4.1.5.

· Finalization of the project to separate Solvay into two independent
publicly listed companies (Power of 2), achieving the next phase of
Solvay’s transformation.
· Completion of the sale of Solvay’s entire 50% stake in RusVinyl toits joint venture partner Sibur. This marked the final step in Solvay’s
strategy to exit its cyclical global polyvinyl chloride (PVC) operations· Settlement between Solvay Specialty Polymers USA, LLC (nowa subsidiary of Syensqo) and the New Jersey Department ofEnvironment Protection on PFAs remediation .
· Selection of the candidate directors for Solvay following completionof the Partial Demerger, submitted to the vote of the December 8,2023 Extraordinary General Meeting, and for Syensqo.
· Selection of the candidate members of the Executive Leadership
Team of Solvay following completion of the Partial Demerger and of
Syensqo.
· Investment for the expansion of the China Research and Innovation
Center .
· Approval of the new capital structure and financial policies for Solvay
and Syensqo.
· Commitment to the UN Global Compact call for action on Living
Wage.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3· Composition of the Board Committees· Appointment of the new Executive
Leadership Team· Delegation of powers to the Executive
Leadership Team· The Board also attended an onboarding
session on the Partial Demerger, itsconsequences and the key agreements inplace between Solvay and Syensqo in thisrespect.

Disclosure pursuant to Article 7:96 of the Code of Companies and Associations

Before the Partial Demerger, Article 7:96 of the Code of Companies and Associations, relating to conflicts of interests, was applied by the PreDemerger Board on two occasions.
On November 2, 2023, the procedure was applied in relation to the remuneration of Ilham Kadri, Chief Executive Officer of the Company before
the Partial Demerger Date, as follows:“Before starting the discussion on this agenda item, Ilham Kadri, Chief Executive Officer, announced the existence of a potential conflict of interestsof financial nature within the meaning of Article 7:96 of the Code of Companies and Associations, arising from the fact that some of the resolutions
to be taken concerned (i) her Po2 constitution achievement bonus as CEO potential compensation as CEO of Syensqo, should the demerger takeplace. The Board of Directors took note of this statement and noted that the Chief Executive Officer left the meeting during the deliberations
and decisions relating to her (see point 1 of the resolution, below). The Board reviewed the Remuneration Committee recommendations for theBase remuneration, STI and LTI for the future Solvay ECo) and Syensqo respective Executive Leadership Team members, which were unanimously
approved, as follows (see points 2 and 3, below).
Resolutions: After deliberation, the Board of Directors with the exception of Ilham Kadri who did not take part in the deliberations or decisions
relating to her, unanimously approved the recommendation of the Remuneration Committee, should the spin-off occur, as follows: (i) Po2 constitution
achievement bonus of 12 MEUR, as CEO of Solvay; (ii) Transfer of her existing CEO convention with Solvay SA to Syensqo (contract in place prior to
the spin-off, including the SLTI and LTI parameters), including an annual base salary corresponding to the indexed current contractual base salary(1.5 MEUR as of January 1, 2024 / December 2023) and a customary health, benefits and retention scheme.”
On December 7, 2023 the procedure was applied in relation to the remuneration of Ilham Kadri, Chief Executive Officer of the Company before thePartial Demerger Date, as follows:“Before starting the discussion on this agenda item, Ilham Kadri, Chief Executive Officer, announced the existence of a potential conflict of interestsof financial nature within the meaning of Article 7:96 of the Code of Companies and Associations, arising from the fact that her remuneration as
Solvay CEO (STI and LTI for 2023) was to be discussed. The Board of Directors took note of this statement and noted that the Chief Executive Officer
left the meeting during the deliberations and decisions relating to her.
CEO STI and LTI for 2023: The CEO left the room for the discussion related to her remuneration.
Having previously reviewed the achievements of the CEO, the Board noted that her achievements in 2023 were exceptional, the headlines being:· Despite strong headwinds of stagnating key economies (notably Europe, China and the US), the business results were broadly in line with market
guidance. This is significant considering a number of key competitors issues profit warnings during 2023.
· The CEO drove a boost in reputation by engaging with stakeholders on sustainability issues, receiving SBTi validation on our climate objectives,
boosting our Chemscore to rank 6th among 50 peers, marking a gain of nine positions from 2022.
· Improvement of the safety record.
· Delivering of the Po2 separation project on time, below budget and with key stakeholder backing.
· As a consequence of this exceptional performance and recognition of it, the Board agreed:· A 200% individual performance factor which is 20% of the target amount, resulting in a bonus award for 2023 of: €2,135,000· An LTI grant for 2024 to the value of €3,200,000 – this is within the mandate and the use of discretion of the Remuneration Committee in rewarding
and recognizing the CEO’s exceptional performance.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

CORPORATE GOVERNANCE STATEMENT

99

Resolution: After deliberation, the Board of Directors, with the exception of the Chief Executive Officer who did not take part in the deliberations or
decisions relating to herself, unanimously approved: the 2023 STI and 2024 LTI award for the CEO as proposed.”
After completion of the Partial Demerger, there was no application of Article 7:96 of the Code of Companies and Associations, relating to conflictsof interests.

4.1.6.

Evaluation

In accordance with the Governance Charter, the Board, under the direction of the Chairperson of the Board of Directors and the Chairpersonof the Nomination Committee, evaluates on a regular basis its composition, its functioning, its information and interactions with the executive
management and the composition and functioning of the Committees created by it.
The members of the Board of Directors are invited to express their opinions on those various points.
In addition, every three years, the evaluation is led by an external consultant.
The Chairperson of the Board of Directors and the Chairperson of the Nomination Committee, together with an external consultant whereapplicable, analyze the outcome of the evaluation and submit conclusions and recommendations to the Board of Directors. The Board of Directors
decides on possible improvements to be made at the end of this evaluation process.
· Considering the new composition of the Board, the next external evaluation is foreseen in 2026.

4.1.7.

Induction and continuous Board training

An Induction Program is in place for new directors. The program includes a review of the Group’s strategy, activities and corporate governance.
On December 15, 2023, the Board had a dedicated induction session on the Partial Demerger, its consequences and key agreements in place inthis respect.
The Board is also actively engaged on the topic of sustainability. Every year, a specific session is organized, dedicated to receiving updates on
various themes from sustainability teams, so as to better understand the Group’s strengths and weaknesses, and to determine the impact of
emerging trends on the Group’s business and performance.
Site visits are also part of the Board’s continuous training program. They consist of meetings with management and local teams, businesspresentations and field tours.

4.2. Board committees
The Board of Directors has the following permanent committees: Audit and Risk Committee (formerly named “Audit Committee”), FinanceCommittee, Compensation Committee, Nomination Committee and ESG Committee. The principles governing the composition, role and missionsof the committees, as well as their internal rules, are set out in the Governance Charter.
The composition of the key committees is regularly reviewed, including whether they meet the expectations of the market and our diverse
shareholder base. As we continue to refresh the Board, we also consider adding independent members to our committees. As of today, all key
committees (Audit and Risk Committee, and the Nomination and Compensation Committees) are composed solely of non-executive directors, amajority of which are independent. More importantly, these committees comprise members that have the experience and skills necessary to add
value and deliver effectively on their mandate. The Group Corporate Secretary acts as Secretary to each of the Board committees.

100

4.2.1.

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

The Audit and Risk Committee

Composition and functioning
The below table indicates the composition of the Audit and Risk Committee before and after the Partial Demerger Date as well as the number of
meetings organized respectively during these periods.

Number of meetings

Before the Partial Demerger Date

After the Partial Demerger Date

The Audit and Risk Committee met 14 times
from January 1-December 8

No meeting December 9- December 31· Ms. Rosemary Thorne (Chair): 14/14· Mr. Wolfgang Colberg: 14/14· Ms. Laurence Debroux*: 4/4· Mr. Edouard Janssen: 14/14· Mr. Matti Lievonen: 14/14· Ms. Marjan Oudeman: 14/14

Composition· Mr. Thomas Aebischer (Chair)· Mr. Wolfgang Colberg· Mr. Melchior de Vogüé· Ms. Marjan Oudeman*At the Annual Shareholder Meeting of the Company heldon May 9, 2023, Ms. Laurence Debroux resigned from her
mandate.

As of December 31, 2023, the composition was as follows:· Four members· The CFO is invited to meetings· All members are non-executive directors, a majority of whom are independent· All the members fulfill the competency criterion by virtue of the training and the experience they gained in previous functions
Internal rules relating to the Audit and Risk Committee are set out in the Governance Charter.

Report of activities
Over the course of the financial year 2023, the Audit and Risk Committee met 14 times and mainly:· Reviewed and considered reports from the CFO, the Head of the Group Internal Audit, and the auditor in charge of the external audit, Ernst &Young (represented by Ms. Marie Kaisin)· Reviewed the independence and effectiveness of the external auditor, Ernst & Young· Reviewed the proposal of registration and information documents for Solvay and Syensqo in the framework of the Partial Demerger· Reviewed the quarterly report by the Group General Counsel on significant ongoing legal disputes and reports

4.2.2.

The Finance Committee

Composition and functioning
The below table indicates the composition of the Finance Committee before and after the Partial Demerger Date as well as the number of meetingsorganized respectively during these periods.

Before the Partial Demerger Date

After the Partial Demerger Date

Number of meetings

The Finance Committee met eight times fromJanuary 1-December 8

No meeting December 9- December 31

Composition· Mr. Nicolas Boël (Chair): 8/8· Ms. Ilham Kadri: 8/8· Mr. Charles Casimir-Lambert*: 3/3· Mr. Wolfgang Colberg: 8/8· Mr. Hervé Coppens d'Eeckenbrugge: 8/8· Ms. Matti Lievonen: 8/8· Mr. Gilles Michel: 8/8· Mr. Pierre Gurdjian (Chair)· Mr. Philippe Kehren (CEO)· Mr. Thomas Aebischer· Mr. Wolfgang Colberg· Mr. Melchior de Vogüé*At the Annual Shareholder Meeting of the Company held on May
9, 2023, Mr. Charles Casimir-Lambert’s mandate ended and was notrenewed andA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

CORPORATE GOVERNANCE STATEMENT

101

As of December 31, 2023, the composition was as follows:· Five members· Four non-executive directors and the CEO· The CFO is invited to meetings· All the members fulfill the competency criterion by virtue of the training and the experience they gained in previous functions
Internal rules relating to the Finance Committee are set out in the Governance Charter.

Report of activities
Over the course of the financial year 2023, the Finance Committee met eight times and mainly:· Provided opinions on financial matters. This included the amount of the interim and final dividends, the levels, conditions and currencies ofindebtedness, monitoring of the credit strength of the Solvay Group’s balance sheet, hedging foreign exchange and risks, the hedging policy for
our long-term incentive plans, the content of financial communication and the financing of major investments· Finalized the preparation of press releases announcing the Solvay Group’s results· Reviewed the proposal for the capital structure and liability management in the context of the Partial Demerger

4.2.3.

The Compensation Committee

Composition and functioning
The below table indicates the composition of the Compensation Committee before and after the Partial Demerger Date as well as the number of
meetings organized respectively during these periods.
Before the Partial Demerger Date

After the Partial Demerger Date

Number of meetings

The Compensation Committee met eight times
from January 1-December 8

No meeting December 9- December 31

Composition· Mr. Nicolas Boël (Chair): 8/8· Ms. Françoise de Viron: 8/8· Mr. Pierre Gurdjian: 8/8· Ms. Agnès Lemarchand: 2/8· Mr. Gilles Michel: 8/8· Ms. Aude Thibaut de Maisières: 8/8· Ms. Rosemary Thorne: 5/5· Mr. Wolfgang Colberg (Chair)· Mr. Yves Bonte· Mr. Pierre Gurdjian· Ms. Marjan Oudeman· Ms. Aude Thibaut de Maisières

As of December 31, 2023, the composition was as follows:· Five members· All members are non-executive directors, a majority of whom are independent· The Chief People Officer is invited to the meetings as well as the Chief Executive Officer (except for the matters in relation to the Chief Executive
Officer personally)· All the members fulfill the competency criterion by virtue of the training and the experience they gained in previous functions
Internal rules relating to the Compensation Committee are set out in the Governance Charter.

4.2.4.

Report of activities

Over the course of the financial year 2023, the Compensation Committee met eight times and mainly:· Reviewed the remuneration report of the Company for the Corporate Governance Statement in the Annual Report· Reviewed the remuneration levels for members of the Board and the ELT including the proposed use of the discretion given to the Compensation
Committee by the remuneration policy to reward the CEO of Solvay until the Partial Demerger Date for her extraordinary commitment to thecompletion of the Partial Demerger· Reviewed the remuneration, both the short- and long-term incentives as well as the performance assessment· Reviewed the allocation of long-term incentives (performance share units and stock options) to the Company’s senior management· Reviewed the compensation packages of the new Boards and new ELT members of Solvay and Syensqo following completion of the Partial
Demerger, and the exit terms of certain members of Solvay’s senior management

102

4.2.5.

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

The Nomination Committee

Composition and functioning
The below table indicates the composition of the Nomination Committee before and after the Partial Demerger Date as well as the number of
meetings organized respectively during these periods.
Before the Partial Demerger Date

After the Partial Demerger Date

Number of meetings

The Nomination Committee met nine times fromJanuary 1- December 8

No meeting December 9- December 31

Composition· Mr. Gilles Michel (Chair): 9/9· Mr. Nicolas Boël: 9/9· Ms. Françoise de Viron: 9/9· Mr. Pierre Gurdjian: 9/9· Ms. Agnès Lemarchand: 4/9· Ms. Aude Thibaut de Maisières: 9/9· Ms. Rosemary Thorne: 3/3· Ms. Marjan Oudeman (Chair)· Mr. Yves Bonte· Mr. Wolfgang Colberg· Mr. Pierre Gurdjian· Ms. Aude Thibaut de Maisières

As of December 31, 2023, the composition was as follows:· Five members· All members are non-executive directors, a majority of whom are independent· The Chief Executive Officer is invited to meetings, except in the case of matters that concern the Chief Executive Officer personally· All the members fulfill the competency criterion by virtue of the training and the experience they gained in previous functions
Internal rules relating to the Nomination Committee are set out in the Governance Charter.

Report of activities
Over the course of the financial year 2023, the Nomination Committee met nine times and mainly:· Led the composition review, succession plans, and the nomination process for any proposed appointment or renewal of appointments to theBoard (chair, committee chair and committee memberships), to ELT positions (chair and members), and to general management positions· Recommended on the future ELTs of Solvay and Syensqo in the framework of the Partial Demerger· Recommended the candidate for the Board of Solvay and Syensqo following completion of the Partial Demerger

4.2.6.

The Environmental, Social and Governance (ESG) Committee

Composition and functioning
The below table indicates the composition of the ESG Committee before and after the Partial Demerger as well as the number of meetingsorganized respectively during these periods.
Before the Partial Demerger Date

After the Partial Demerger Date

Number of meetings

The ESG Committee met three times from January
1-December 8

No meeting December 9- December 31

Composition· Mr. Matti Lievonen (Chair): 3/3· Ms. Françoise de Viron: 3/3· Ms. Ilham Kadri: 3/3· Ms. Marjan Oudeman: 3/3· Ms. Aude Thibaut de Maisières: 3/3· Ms. Aude Thibaut de Maisières (Chair)· Mr. Thierry Bonnefous· Mr. Philippe Kehren· Ms. Marjan Oudeman· Ms. Annette Stube

The ESG Committee was created in 2021 and is continually evaluated and evolving. In this respect, in the framework of the amendments to theGovernance Charter following the Partial Demerger, the respective roles and missions of the ESG Committee, the Audit and Risk Committee interms of ESG KPIs were specified.
As of December 31, 2023, the ESG Committee was:
· Composed of five members, including the CEO and non-executive directors· All the members fulfill the competency criterion by virtue of the training and the experience they gained in previous functions
Internal rules relating to the ESG Committee are set out in the Governance Charter.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

CORPORATE GOVERNANCE STATEMENT

103

Report of activities
Over the course of the financial year 2023, the ESG Committee met three times and mainly:· Considered the material ESG issues relevant to the Solvay Group’s business activities· Provided guidance and recommendations to the Board on these issues, including for the implementation and potential review of the sustainability
strategy and the Solvay Group’s non-financial reporting· Advised the Board to be in line with the EU Corporate Sustainability Reporting Directive (CSRD), its implementing laws and regulations and othersimilar laws and regulations· Reviewed the KPI’s following completion of the Partial Demerger· Performed periodic reviews of the Solvay Group’s ESG policies, progress and effectiveness5. EXECUTIVE LEADERSHIP TEAM (ELT)5.1. ELT before the Partial Demerger Date
Before the Partial Demerger Date, the Executive Leadership Team was composed as follows (the “Pre-Demerger ELT”):· Ms. Ilham Kadri, (Chief Executive Officer)· Mr. Marc Chollet (Chief Strategy Officer)· Mr. Augusto Di Donfrancesco (Chief Transformation and Operations Officer)· Mr. Dominique Golsong (Group General Counsel and Corporate Secretary)*· Mr. Karim Hajjar (Chief Financial Officer)· Mr. Hervé Tiberghien (Chief People Officer)*Mr. Golsong exercised his function via a SRL/BV.

The macroeconomic and geopolitical context in 2023 remained challenging, and Solvay teams focused on actions within their control to maintain its
competitive edge, to its strengthen differentiated portfolios, focus on its value-based pricing and its unrelenting actions to reduce costs and drive
superior performance. Consequently, the Pre-Demerger ELT promoted actions to manage both the short term headwinds while simultaneously
investing to support the long-term growth which will set a strong foundation for both future companies.
In addition, these structural savings enabled the Group to invest in projects to support the future growth of both Solvay and Syensqo, like theexpansion of sulfone technologies in the US to support healthcare market growth, the new bio-circular highly dispersible silica process, the natural
Soda Ash expansion in Green River, Wyoming, the plan to produce Green Hydrogen at the Rosignano site, Italy through a partnership with Sapio,
the launch of a new PEEK compound for electric-motors, a polymer collaboration with Zoatfoams to extend the reach of polymers into the aero
market.
Progress was made in relation to our Solvay One Planet targets, especially with the validation by SBTi of the climate targets of Solvay before
the Partial Demerger. The recent Partial Demerger has triggered the need for a reassessment that will start with SBTi in 2024. In addition, Solvay
commits to assess the company’s living wage equity and close any potential gaps before 2030.
The Pre-Demerger ELT met 10 times in 2023 to share information, align priorities, and decide upon activities within its mandate and to alignpriorities allowing Solvay to deliver excellent performance.

104

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

5.2. ELT after the Partial Demerger Date
Following completion of the Partial Demerger, the Board appointed the following members of the Executive Leadership Team (“ELT”):· Mr. Philippe Kehren (Chief Executive Officer)· Mr. Alexandre Blum (Chief Financial and Strategy Officer)· Ms. Lisa J. Brown (Group General Counsel and Corporate Secretary)· Mr. Lanny Duvall (Chief Operations Officer)· Dr. Mark van Bijsterveld (Chief People Officer)
The table that follows includes information about the members of the ELT as of December 31, 2023:✪ Year of appointment

PHILIPPE KEHRENALEXANDRE BLUM

Chief Executive Officer

Chief Financial and Strategy Officer

French/Born in: 1971
✪ 2023

French/Born in: 1973
✪ 2023

Term of office ends: 2027

Term of office ends: 2027

Diplomas and main Solvay activities:
Master of Science in Chemical Engineering from the
University of Wisconsin – Madison (USA)

Diplomas and main Solvay activities:
Master's degree in Business Administration and Managementfrom HEC (École des Hautes Etudes Commerciales) – Paris(France)

Bachelor in Engineering-Petroleum (Spec. in Refining,
Engineering and Gas) from the French Institute ofPetroleumSchool – Paris (France)
Bachelor in Engineering from École Polytechnique - Paris(France)
Chair of the Executive Leadership Team
Member of the Finance and ESG Committees

Executive Leadership Team member and Chief Financial andStrategy Officer

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

CORPORATE GOVERNANCE STATEMENTLISA J. BROWNLANNY DUVALL

Group General Counsel and Corporate Secretary

Chief Operations Officer

British/Belgian/Born in: 1978
✪ 2023
Term of office ends: 2027
Diplomas and main Solvay activities:
LL.B. (Hons) Law from the University of Derby (UK)
Diploma in Legal Practice from Nottingham Law School (UK)
UK Chartered Trade Mark Attorney, London (UK)105

American/Born in: 1968
✪ 2023
Term of office ends: 2027
Diplomas and main Solvay activities:
Bachelor of Science, Chemical Engineering at the University ofWashington, Seattle (USA)
Executive Leadership Team member and Chief Operations
Officer

Executive Leadership Team member and Group GeneralCounsel and Corporate Secretary

MARK VAN BIJSTERVELD
Chief People Officer
Dutch/Born in: 1969
✪ 2023
Term of office ends: 2027
Diplomas and main Solvay activities:
PhD in Business Studies at Radboud University –Nijmegen (the Netherlands)
Masters in Organizational Psychology atLeiden University (the Netherlands)
Executive Leadership Team member and Chief People
Officer

The role, responsibilities, composition, procedures and evaluation of the ELT are described in detail in the Governance Charter, which is available
on Solvay’s corporate website. The ELT carries out monthly deep-dives consisting of in-depth reviews on people, strategy, finance, sustainability,
innovation and other specific topics, depending on current events.

106

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

6. REMUNERATION REPORTNote to readersThis year's Remuneration Report is unique in the sense that it presents information on two different Board of Directors and Executive Leadership
Teams (ELT) that led Solvay during the 2023 financial year. The unique nature of the Remuneration Report is owed to the significant transformationthat Solvay underwent to unlock value through a successful Partial Demerger of Syensqo in early December 2023. The Partial Demerger, which saw
near full support from our shareholders, will allow each company to optimize its capital allocation priorities, refine its capital structures to ensure
efficiency and resilience, prioritize talent attraction and retention strategies to foster a high-performing workforce, enhance operational capabilities
to drive efficiency and innovation, and steadfastly advance its sustainability initiatives to create long-term value for all stakeholders.
Following shareholder approval on December 8, 2023, Solvay has a new Board of Directors and Executive Leadership Team (ELT) to deliver on
its communicated objectives. To ease the understanding of the Remuneration Report, the remuneration of the new ELT is provided on a blue
background during the transitional phase from December 9, 2023, to December 31, 2023.

6.1. Year in overview
Solvay proved resilient in an atypical year
During a period marked by significant changes and challenging conditions, we have demonstrated resilience. Despite facing obstacles such assoft key economies and geopolitical tensions, we have maintained our focus on safeguarding our position. Additionally, we have worked towards
ensuring the successful Partial Demerger of Syensqo. Our margins rose to 25%, limiting EBITDA erosion to 4.9%, and we sustained strong cash
generation, allowing us to distribute dividends. These results have enabled us to set ourselves apart from our peers. We were among the minorityof chemical companies that met guidance without needing to issue a profit warning.
Amidst challenging circumstances, we showcased our innovative spirit and resilience by prioritizing various aspects beyond just financial results. This
included expediting the adoption of digital technologies to enhance production efficiency, diligently catering to customer demands, upholding
safety as paramount, and implementing price adjustments to sustain margins, all while adhering to disciplined cost and cash management practices.
Thanks to the dedication and work of Solvay employees, we have emerged as a more robust organization across all aspects. Their commitment
enables us to embark on a journey of further transformation, equipping us with the readiness to embrace a new chapter filled with opportunities.

Committed to our people
While we were driving a significant transformation of the Company, we remained steadfast in supporting our employees financially, socially, andprofessionally, as we continue to master the elements essential to our world to create sustainable solutions. The continuous dialogue with theEuropean Works Council (EWC) and social partners was crucial during this transformational period and we are proud to have maintained a stronglevel of employee engagement of 76%, the highest engagement rate in the last five years.

FinanciallyAt the beginning of 2023, the Executive Leadership Team (ELT) approved the anticipated payment of a portion of the Short-term Incentive (for cadre
employees) and the Global Performance Sharing (GPS) bonus (for non-cadre employees), the payments were made in January 2023 supporting our
employees to cope in an increasing inflationary environment.

Socially
We further enhanced our Solvay Cares benefits program, by including a new benefit to support employees with caregiving duties. Our employees
are now able to take up to five days a year to handle unexpected situations where they must care for a loved one, so as to complement any
provisions of local legislation. Furthermore, Solvay created a holiday donation bank with 100 days of leave for employees to use for caregiving
purposes. Employees can also donate days off to their fellow colleagues.

Professionally
As we embarked on the transformative project, we continued to invest in the growth and development of our employees, recognizing the learning
opportunities inherent in a project of this magnitude. Through the Solvay Career Catalyst Program, employees had the opportunity to engage inintrospection regarding their roles, strengths, networks, and acquiring new soft and technical skills. This Program included self-assessments, crafting
career visions, and honing skills necessary for advancement, aimed at guiding employees to explore potential career pathways aligned with theGroup's transformation.
As of December 2023, we established two industry-leading entities – Solvay and Syensqo – each equipped with robust teams, allocated to facilitate
a seamless transition preceding the separation. A comprehensive selection process was undertaken to assemble well-rounded business leaders,experts, and professionals possessing the requisite experience, skills, and diversity, aligning with the distinct strategies of each company.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

CORPORATE GOVERNANCE STATEMENT

107

Remuneration of the new Solvay’s Executive Leadership Team after the Partial Demerger
At the May 2022 Ordinary General Shareholders’ Meeting, approximately 96% of participating shareholders supported Solvay’s Remuneration
Policy, a result confirming that Solvay’s remuneration philosophy, pay elements, pay mix, variable incentive design, and disclosures werebroadly aligned with market expectations. The Board decided that the current Remuneration Policy should remain in place to provide theframework as to how the new ELT and Board members’ remuneration is determined.
To determine the remuneration levels of the new ELT members since December 9, 2023, a benchmarking assessment was conducted against
a revised peer group. Solvay's updated peer group mirrors the company's redefined scope and executive talent pool, offering a wellrounded selection of companies across diverse countries and industries, encompassing varying sizes and levels of complexity. The resultsof this benchmarking exercise suggested that discretion is needed to be applied by the Compensation Committee to reduce the award
opportunities available for the CEO under both short- and long-term incentives. The Board of Directors does not foresee a revision to thebase salary of the CEO and other ELT members in 2024 as it remains aligned with the market median. Details of remuneration payable to ELT
members are set out on the following pages.

Our commitment to shareholder alignment with the new Solvay
The Compensation Committee, and the Board as a whole, have taken note of the concerns raised by some of the shareholders and proxy advisors
regarding pay decisions made in the lead up to the Partial Demerger to retain key employees as well as recognize tremendous efforts to successfully
deliver on communicated objectives. Solvay’s new Compensation Committee will gather feedback from its shareholders and proxy advisors tobetter refine its practices and disclosures.
Solvay’s Compensation Committee, and the Board as a whole, will also review the Remuneration Policy in 2024 and assess whether any amendment
would be necessary for the Company’s remuneration practices and disclosures taking into account the peer practices, global best practicerecommendations, as well as direct feedback from shareholders and proxy advisors.

6.2. Remuneration of the Board of Directors
Solvay Directors are remunerated, in line with Solvay’s Remuneration Policy, with fixed emoluments, the common basis for which is set at theOrdinary Shareholders Meeting. Any additional remuneration is decided by the Board. The process is based on Article 24 of our Articles of
Association (Articles), which states that:· “Directors shall receive fixed emoluments, the amount and terms of which shall be determined by the General Meeting. The decision of theGeneral Meeting shall stand until otherwise decided.
· The Board of Directors is authorized to grant fixed emoluments in addition to the emoluments provided for in the preceding paragraph to
Directors entrusted with special duties, distinct from their directorship.
· The Directors responsible for day-to-day management and the members of the Executive Committee, are also each entitled to a variable
remuneration determined by the Board of Directors on the basis of their individual performance and the consolidated performance of the SolvayGroup.”
Board fees are determined after considering the roles and responsibilities of each director, and the practices of companies of a similar size andinternational complexity. An assessment of market practice is conducted on a regular basis and the fees are disclosed in the Remuneration Report
each year.

108

6.2.1.

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Board of Directors individual remuneration

The Ordinary Shareholders Meetings of June 2005 and May 2012, which introduced membership and attendance fees respectively, approved
directors’ pay to be set as follows, starting from the financial year 2005. The Board fees have not been increased since 2005.
Board members that were appointed by the Extraordinary Shareholders’ Meeting of December 8, 2023, will be entitled to the same fees.
Board fees by type

Gross amount

Annual gross fixed remuneration€35,000

Board meeting attendance fee€4,000

Audit and Risk Committee Chairperson attendance fee€6,000

Audit and Risk Committee Member attendance fee€4,000Compensation, Nomination, ESG, and Finance Committees Chairperson attendance fee€4,000Compensation, Nomination, ESG, and Finance Committees Member attendance fee€2,500Additional considerations in relation to the Board of Directors’ remuneration:· Directors sitting on both the Compensation Committee and the Nomination Committee do not receive double remuneration if the meetings
happen on the same date.
· In accordance with the Remuneration Policy, the annual gross fixed remuneration for the CEO is offset in the annual remuneration fees as an ELT
member, and the Board meeting attendance fees are paid for the board meetings attended.
· There are no committee attendance fees for the Chairman of the Board, nor the CEO.
· For the Chairman of the Board, the Board used its authorization under Article 24 of its Articles to grant an additional yearly fixed remunerationcompensation of €250,000 gross, paid in monthly installments, unchanged since 2012.
· Non-executive directors do not receive any additional remuneration linked to results or other performance criteria. More specifically, nonexecutive directors are not entitled to annual bonuses, stock options, or performance share units, or to any supplemental pension scheme.
· Solvay reimburses directors’ travel and expenses for meetings related to their Board and Board Committee functions.
· The Group provides administrative support, in the form of an office, and use of the General Secretariat to the Chairman of the Board only. The
other non-executive directors receive logistical support from the General Secretariat when needed.
· Solvay also provides customary insurance policies covering the Board of Directors’ activities when they are carrying out their duties.

6.2.2.

Share ownership guidelines for the Board

Solvay acknowledges that the Belgian Governance Code recommends that a portion of the remuneration paid to Board members be in shares(Principle 7.6), and that Solvay’s Remuneration Policy does not provide for this. However, the Compensation Committee considers that the current
Remuneration Policy complies with the spirit of Principle 7.6 of the Belgian Governance Code, because of the Share Ownership Guidelines
applicable to non-executive directors requiring them to hold shares equivalent to 100% of their gross annual fixed board fees. These shares shouldbe held until at least one year after the non-executive director leaves the Board of Directors and, in any case, for at least three years after the shareswere acquired. The dividends attached to these shares are paid at the same time as for the other shareholders.
The Compensation Committee regularly reviews Solvay’s remuneration practices, disclosures and market practices to determine whether theRemuneration Policy currently in practice remains appropriate. Any changes to the Remuneration Policy regarding the Board’s remuneration will be
submitted to shareholders in accordance with the BCCA.

6.2.3.

Amount of remuneration and other benefits granted directly or indirectly to Board members by theCompany or by an affiliated company

GROSS REMUNERATION AND OTHER BENEFITS GRANTED TO DIRECTORSAs described in section 2 of the Corporate Governance Statement, in the context of the Partial Demerger, the composition of the Board of Directorsof Solvay changed. This section presents the amount of remuneration and other benefits granted directly or indirectly to the members of the Board
before and after the Partial Demerger date.

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

109

FOR DIRECTORS FROM JANUARY 1, 2023, TO DECEMBER 8, 2023 (BEFORE THE PARTIAL DEMERGER DATE)
in €2023						2022

Total
gross
amountincluding
fixed fees

Board
Board
fixed meeting
remuneattenration dance fee

For therole inFinanceCommittee

For the For the role inrole in Compensation
Audit
and NominaComtion
Committee
mitteeFor theTotalrole ingross
ESG
amountCom- including
mittee fixed fees

Board ofDirectors
and committee
attendancefees

71,00036,000N. Boël
Fixed emoluments +attendance fees
Article 24 supplement
Chair Fees

100,917

32,91768,000235,110

235,110

I. Kadri

100,917

32,91768,000

C. Casimir-Lambert
H. Coppensd’Eeckenbrugge

31,92812,42812,000116,917

32,91764,000F. de Viron

119,917

32,91752,000R. Thorne

192,417

32,91768,000G. Michel

153,917

32,91760,000M. Oudeman

164,417

32,91768,000

A. Lemarchand

82,91732,91740,000M. Lievonen

184,917

32,91764,000A. Thibaut de Maisières

135,917

32,91768,000W. Colberg

176,917

32,91768,000E. Janssen

148,917

32,91760,000L. Debroux32,42812,4284,000

P. Gurdjian
Total

128,417

32,91768,0002,106,891

452,772

832,000

71,00036,0007,500

79,50044,50020,000100,500

65,50091,00056,0007,500

107,000

72,00041,000101,500

66,5007,500

98,50063,50066,50031,50012,000122,000

87,00027,50084,00020,00056,0007,500

10,00020,00056,00020,00056,00027,50087,50091,00056,000112,500

77,50056,00083,00048,00016,00050,53828,000324,000

7,500

27,50039,53817,000141,000

34,500 1,575,538

512,538

Increase of total gross amount compared to 2022 is due to the higher number of meetings in 2023.

FOR DIRECTORS FROM DECEMBER 9, 2023 TO DECEMBER 31, 2023, (AFTER THE PARTIAL DEMERGER DATE)
2023

Total grossBoard fixedamount remuneration
including fixed
fees

Board
meeting
attendancefee

For the rolein FinanceCommittee

P. Gurdjian
Fixed emoluments +attendance fees
Article 24 supplement
Chair Fees

6,083

2,083

4,000 --

14,881

P. Kehren

6,083

2,083

4,000

M. Oudeman

6,083

2,083

4,000

A. Thibaut de Maisières

6,083

2,083

4,000

W. Colberg

6,083

2,083

4,000

T. Aebischer

6,083

2,083

4,000

M. de Vogüé

6,083

2,083

4,000

Y. Bonte

6,083

2,083

4,000

A. Stube

6,083

2,083

4,000

T. Bonnefous

6,083

2,083

4,000

Total

75,714

20,83340,000For the rolein Audit
Committee

For the role in
For theCompensation role in ESG
and Nomination Committee
Committee

110

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

6.3. Remuneration of the Executive Leadership Team (ELT)
6.3.1.

Solvay’s remuneration philosophy and policy

Solvay's Remuneration Policy is designed to appropriately reward the Executive Leadership Team (ELT) based on their expertise, responsibilities,
and individual performance. The Policy emphasizes meritocracy and performance, striving to optimize returns responsibly and sustainably for the
benefit of all stakeholders. It aims to attract, motivate, and retain top executive talent, aligning with market standards and the long-term interests ofshareholders. These guiding principles also shape the remuneration policies and programs extended to Solvay employees worldwide.
The remuneration structure is designed in line with the following principles, which apply both to ELT members and other senior executives:· Fixed remuneration aims to provide market-aligned cash income, which is regularly reviewed by the Compensation Committee considering
positioning relative to the peer market median, performance, indexation, and role changes.
· Short- and long-term variable remuneration is tied to the achievement of strategic objectives, including driving sustainable performance, andrecognizes excellent results once delivered.
· Total remuneration is set at a level that is competitive in the relevant market and sector, in order to attract, retain, and motivate the high-caliber
talent needed to deliver the Group’s strategy and drive business performance.
· Remuneration decisions are compliant and equitable, keeping in mind pay levels within the wider workforce, and balance cost and value
appropriately.
The following table summarizes the core elements and key principles of Solvay’s Remuneration Policy:

Long-Term Incentive

Competitive
to relevant peers
to:Attract, retain
andmotivate highcaliber
executives

Short-Term Incentive

Aligned with shareholder interests~55%
of total as variable
remuneration
with upwards opportunity
for outperformance

Results driven
Aligned with our short, mid- andlong-term strategy,
objectives and aspirations
Reflection of Pay
for performance principle

Set around the median of
the market and is a reflection of Solvay’s
principle of Care

Benefits~45%
of total as fixed
remuneration
Fixed baseremuneration

Reflects experience, skills,
responsibilities and contribution
and is reflection of Solvay's reward
principle of Meritocracy

The Compensation Committee retains discretion to adjust performance outcomes under the Short-term Incentive (STI) and Long-term Incentive(LTI) programs based on various factors, including unforeseen circumstances, shareholder experience, and other relevant considerations, with
explanations provided in the annual Remuneration Report. Additionally, the Committee may apply discretion to adjust award opportunities, withdetails as to how discretion was applied to be disclosed in the Remuneration Report for shareholder approval. To this end, the Compensation
Committee used its discretionary power to reduce award opportunities under the STI and LTI programs for the new ELT to ensure total remuneration
offered remained within the new benchmark.

6.3.2.

Use of market dataIn alignment with the Remuneration Policy, remuneration of ELT members is benchmarked against a peer group. Although the peer group had
generally remained unchanged over the years, in light of Solvay’s new scope of activities after the Partial Demerger, a review of the peer group was
imperative to select companies that better reflected Solvay’s size and business, while also ensuring that it could offer competitive remuneration to
attract the relevant talent for the nomination of new ELT members.
Solvay’s peer group is built around a selection of relevant European chemical and industrial companies whose international operational footprint
and model, as well as annual revenues and headcount, positions Solvay broadly at the median of the peer group. The Compensation Committee
aims to position Solvay’s remuneration at the market median for all key elements of the package.

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

111

Former peer group
The peer group considered for the previous ELT included the following companies until December 8, 2023:

BAE Systems

BASF

Bayer

Covestro

DSM

EvonikJohnson Matthey

Lanxess

Michelin

Saint Gobain

UmicoreValeo SA

New peer group
Starting December 9, 2023, the peer group considered for the new ELT underwent a review to mirror Solvay'’s new scope, to ensure its
relevance for remuneration benchmarking. As mentioned earlier, the new peer group positions Solvay at median of the peer group in terms of
its attributes, while the Compensation Committee aims to position remuneration offered at market median.

ACEA

Alfa Laval

ArcadisCovestro

Drax Group

EvonikFuchs SE

Holcim Ltd

IMI plc

K+S

Kemira Oyj

Lanxess

OCI

Saint-Gobain

SSAB AB

Umicore SA

Valeo SE

Wacker Chemie AG

Weir Group(In blue are companies which have been added to the new Peers Group.)

6.3.3.

Pay mix and remuneration opportunities for the ELT members

The pay mix of ELT members at the end of the reporting period is outlined below, and displays their Total Direct Remuneration at target. As
described in Section 2 of the Corporate Governance Statement, in the context of the Partial Demerger, the composition of Solvay’s ELT has
wholly changed with a new ELT that is being led by Philippe Kehren, who has been internally promoted and recognized for his successfultransformation of the Soda Ash and Bicarbonates business. This Section therefore presents the amount of remuneration of ELT members
before and after the Partial Demerger Date.

6.3.3.1 Solvay’s ELT before the Partial Demerger Date
Overview
The below table provides the pay mix of the members of the Pre-Demerger ELT, which covers base remuneration and both short-term and long-term
incentives at target for the full year 2023 (but excludes, for the avoidance of doubt, any extraordinary items granted in relation to the transformation
project). It is also worth highlighting that the below tables display the aforementioned components of the remuneration to which ELT members
would have been entitled, at target, for the period from January 1, 2023, until December 31, 2023. The below table does not take into account the
ELT’s transfer to Syensqo or resignation as ELT members upon completion of the Partial Demerger and any proratisation resulting therefrom. Actual
remuneration paid to ELT members before the Partial Demerger Date is described in section 6.3.6.

112

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

PAY MIX OF THE ELT MEMBERS
in million of euros

€5.31

2.15

41%

€2.73
1.72

1.43

I. KadriFixed base

32%

27%

€2.11
1.15

€1.53

42%

0.64

24%

0.92

34%

0.89

42%

0.50

24%

0.71

34%

K. Hajjar

A. Di Donfrancesco

STI

LTI

€1.40

0.65

42%

0.36
0.52

24%
34%

H. Tiberghien

0.59
0.33
0.47

€1.39
42%
24%
34%

M. Chollet

0.59

0.33
0.47

42%
24%
34%

D. Golsong

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

113

DETAILED TABLE AS ON DECEMBER 8, 2023
in €Variable remuneration as of December 8, 2023
Fixed
remuneration(on acomparable
full year
basis)
Ilham Kadri
CEO and Chair of
the ELT
Karim Hajjar
CFO and ELT
member

1,435,200

926,436

Augusto Di
Donfrancesco
ELT member

717,600

Hervé Tiberghien
ELT member

520,574

Marc Chollet
ELT member

477,000

DominiqueGolsong
ELT member

472,238

Value
measurement

STI target

LTI target
issued as
Performance
Share Units

LTI target
issued as
Restricted
Share Units

Total LTI
value

Total direct
remuneration

Amount

1,722,240

1,506,960

645,840

2,152,800

5,310,240% of Salary

120%

105%

45%

150%

Fixed 27%/Variable 73%

Amount648,505

810,631

347,413

1,158,045

2,732,986% of Salary

70%

87.5%

37.5%

125%

Fixed 34%/Variable 66%

Amount502,320

627,900

269,100

897,000

2,116,920% of Salary

70%

87.5%

37.5%

125%

Fixed 34%/Variable 66%

Amount364,402455,502

195,215650,718

1,535,694% of Salary

70%

87.5%

37.5%

125%

Fixed 34%/Variable 66%

Amount333,900

417,375

178,875

596,250

1,407,150% of Salary

70%

87.5%

37.5%

125%

Fixed 34%/Variable 66%

Amount330,567

413,208

177,089590,298

1,393,102% of Salary

70%

87.5%

37.5%

125%

Fixed 34%/Variable 66%

Note: As with other Belgium-based employees, indexation has been applied to ELT members' fixed remuneration under a local Belgian contract in 2023.

6.3.3.2 Solvay ELT after the Partial Demerger Date

DETAILED TABLE AS OF DECEMBER 31, 2023
Overview
The below table provides the pay mix of the new ELT members appointed effective upon completion of the Partial Demerger, annualizedbased on their remuneration as of December 31, 2023, covering base remuneration and both short- and long-term incentives at target. It isalso worth highlighting that the below tables display the aforementioned components of the remuneration to which ELT members would havebeen entitled, at target, for the period from January 1, 2023 until December 31, 2023. It does not take into account that they were appointed as
ELT members upon completion of the Partial Demerger and any proratisation resulting therefrom, nor any remuneration to which they would
have been entitled in their prior roles at Solvay. Actual remuneration paid to ELT members after the Partial Demerger Date is described in
section 6.3.6.

114

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

REMUNERATION OPPORTUNITY OF THE ELT MEMBERS(full year with incentives at targets) in million of euros

€2.51
0.93

37%

0.76

31%

€1.30

0.81

32%

P. Kehren

Fixed base

€1.24

€1.19

€1.15

0.47

37%

0.45

37%

0.43

37%

0.42

37%

0.32

25%

0.31

25%

0.29

25%

0.28

25%

0.50

38%

0.48

38%

0.46

38%

0.44

38%

A. Blum

L. Duval

STI

M. Van Bijsterveld

L. Brown

LTI

DETAILED TABLE AS ON DECEMBER 31, 2023
in €Variable remuneration as of December 31, 2023
Fixed
remuneration(on acomparable
full year
basis)
Philippe Kehren
CEO and Chairmanof the ELT

810,000

Alexandre Blum
CFO and ELT member

500,000

Lanny Duvall
ELT member

480,000

Mark Van Bijsterveld
ELT member

460,000

Lisa Brown
ELT member

445,000

Value
measurement

STI target

LTI target
issued as
Performance
Share Units

LTI target
issued as
Restricted
Share Units

Total LTI
value

Total direct
remuneration

Amount

769,500

652,050

279,450

931,500

2,511,000% of Salary

95%

80.5%

34.5%

115%

Fixed 32%/Variable 68%

Amount325,000

332,500

142,500

475,000

1,300,000% of Salary

65%

67%

29%

95%

Fixed 38%/Variable 62%

Amount312,000

319,200

136,800

456,000

1,248,000% of Salary

65%

67%

29%

95%

Fixed 38%/Variable 62%

Amount299,000

305,900

131,100

437,000

1,196,000% of Salary

65%

67%

29%

95%

Fixed 38%/Variable 62%

Amount289,250

295,925

126,825

422,750

1,157,000% of Salary

65%

67%

29%

95%

Fixed 38%/Variable 62%

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

6.3.4.

CORPORATE GOVERNANCE STATEMENT

115

Base remuneration and benefits

Fixed base remuneration
Fixed base remuneration reflects an individual’s experience, skills, responsibilities, and performance. It is reviewed annually and may be adjusted,taking into consideration a number of factors, including:· comparable salaries in appropriate comparator groups;· changes within the scope of the role;· changes in the Group’s size and profile; and· inflation following legal requirements in different countries.
Base remuneration, which does not include the value of any benefits offered to ELT Members, is used to calculate targets for variable remuneration.
Details of the base remuneration of the CEO and ELT Members are disclosed in sections 6.3.2. and 6.3.6. of this Annual Integrated Report.
· Fixed base remuneration for the new ELT members in 2024.
· The Board of Directors does not foresee, in 2024, increases to the base salary of the CEO and other ELT members, as disclosed in the table
above, as it remains aligned with the market median of the new peer group.

Benefits, including pension
In alignment with the Solvay Cares aspirations, benefits are seen as a critical part of Solvay’s remuneration offering and are not dependent on an
individual’s performance. Solvay aims to ensure that the nature and level of these other benefits are in line with market practice and what is provided
to other executives in the Group.
The CEO of the Company before the Partial Demerger date, Ilham Kadri, was self-employed and had entered into a contractual agreement with theCompany, which provided for specific provisions with respect to pension contributions, death-in-service, and disability benefits. Such agreement
was transferred to Syensqo as part of the Partial Demerger.

The CEO since the Partial Demerger date, Philippe Kehren, is self-employed and has entered into a contractual agreement with the Company
in Belgium. This agreement includes pension contributions, death-in-service, and disability benefits.
The other ELT members can either work under local employment contract as employee of the company, or enter into separate contractual
agreements with the Company, giving them self-employed status in Belgium.
· ELT members who are employees under a local contract are granted benefits such as a pension, death-in-service, and disability benefits
according to the provisions of the plans applicable in line with home country market practice.
· Self-employed ELT members (other than the CEO) are entitled to the payment of an annual fixed base fee under their contractual agreementwith the Company, which also covers pension contributions, death-in-service, disability, and healthcare benefits, as well as certain benefitsin-kind (e.g., company car).
As from the Partial Demerger date, ELT members Alexandre Blum (CFO) and Lisa Brown (General Counsel and Corporate Secretary) haveentered into separate contractual agreements with the Company, giving them self-employed status in Belgium. Mark Van Bijsterveld (Chief
People Officer) based in the Netherlands, is under a local employment contract. As the change of status from employee to self-employed
under a management agreement requires a change in immigration status, the transition from employee status to self-employed for Lanny
Duvall (Chief Operations Officer), based in Belgium, will enter into force in the following months once the required documents are granted
from the Belgian authorities. In the meantime, Lanny Duvall remains an employee.

6.3.5.

Short- and long-term variable play

6.3.5.1. Short-term Incentive (STI) plan
Maximum award opportunities
As per the Remuneration Policy, the STI target is 120% of fixed base remuneration for the CEO and up to 70% of fixed base remuneration for other
ELT members. The minimum payout is 0% and maximum is 200% of target STI.
In line with the Remuneration Policy, the target opportunity provided by the STI plan for the CEO before the Partial Demerger date, Ilham Kadri,was 120% of fixed base remuneration, and up to 70% of fixed base remuneration for other former ELT members.

116

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 32024 STI award opportunity for new ELT members
The Compensation Committee used its discretionary power to reduce STI award opportunities for ELT members following the Partial
Demerger, to align with peer practice to better reflect Solvay’s new scope. To this end, the target award opportunity provided by the STI planfor the CEO, Philippe Kehren, since the Partial Demerger Date, is 95% of fixed base remuneration, and 65% of fixed base remuneration forother current ELT members.

Malus and clawback
As per the Remuneration Policy, the Compensation Committee may exercise discretion to activate malus and clawback provisions in exceptional
circumstances, such as serious reputational damage, risk management failures, financial errors, misconduct, regulatory breaches, significant losses,
or deteriorating financial health, with clawback potentially extending up to three years for awards under the Remuneration Policy.

Setting STI performance objectives
Annually, the Board establishes performance objectives for both the Group and the CEO, a process typically conducted during the February Board
meeting. The performance objective-setting aims to establish challenging yet achievable targets, incorporating input from various perspectives
within the business while ensuring alignment with Solvay's long-term growth and sustainability goals communicated to the market. Moreover, thisprocess is also mindful of not incentivizing executives to take excessive risks that could jeopardize the company's stability, reputation, and long-termsustainability.
Solvay's strategy for performance objectives tied to Short-term Incentives (STIs) involves establishing ambitious, growth-focused targets for thetarget award level, while maximum awards are reserved for achieving exceptionally high performance levels, ensuring adherence to the principleof pay-for-performance.
In line with market practice, and due to the commercial sensitivity of disclosing short-term targets prospectively, Solvay discloses the performance
objectives set and the performance against them on a retrospective basis only. The next section provides a breakdown of how the CEO performed
against the targets set under the STI plan for the 2023 financial year.

2023 STI performance objectives
The STI plan provides a cash opportunity that is based solely on the achievement of pre-determined annual financial, non-financial, and individual
objectives.

Target amountPayout calculated on the basis ofachievement of STI 3 elements

Payout range(achievement of each element)

65% Financial results+
Set a % of fixed
remuneration

15% One Planet progress+
20% Individual performance

0% to 200%

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

117

The STI plan focuses on three broad performance categories with the following weightings for all ELT members:· Financial objectives (65% of the STI): Underlying EBITDA organic growth and free cash flow (FCF) conversion.
· Solvay One Planet objectives (15% of the STI): Solvay One Planet is structured around the three major pillars of Climate, Resources, and Better
Life, and serves as our roadmap toward a sustainable future. Specific KPIs are selected under each major pillar to measure our performance inways that are material, quantifiable, and relevant to driving long-term value for all stakeholders. More information on Solvay One Planet can befound on our corporate website.
· Individual objectives (20% of the STI): Customized for each ELT member to align with their specific roles and responsibilities within the organization.
They may include objectives related to areas such as project milestones, innovation initiatives, leadership development, or any other relevant
metrics that measure the ELT member’s impact on the Company’s success. These objectives are pre-determined, and may be quantitative and/or qualitative. These are defined by the Board for the CEO and then cascaded down to other ELT members by the CEO. The CEO assesses
the achievement of individual objectives by ELT members, and this assessment is then reviewed and validated by the Board. The individual
performance of the CEO is assessed by the Compensation Committee, and this is then reviewed and validated by the Board. The CEO is absent
from the Compensation Committee and Board meetings during all discussions relating to CEO pay. Details of the individual performance of theCEO, including the targets set and their achievement, are explained below.

Group performance 2023
The Group’s 2023 performance results are based on the Solvay perimeter prior to the Partial Demerger, which includes the Specialty Businesses
presented as "discontinued operations" in the consolidated financial statements. The final scores have been approved by the Board of Directors at
the time of the Partial Demerger and based on the best available forecasts of the financial performance.

GROUP PERFORMANCE 2023

Min.

Organic EBITDA
growth-8%

Target

-3%

5%

Min.

TargetMax.

-4,90%

Free cash flow
conversion

26%

28%

33%

Min.

TargetMax.

Solvay One Planet

At 2019 levelof achievement
Min.

Actual performance

Result for STI
payout calculation

Max.

Significant improvementcompared to 2019
Max.

62%

34%

200%

111%

118

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

DIMENSION OF ONE PLANET SOLVAY

Dimension of One Planet

ClimateMin.

TargetGreenHouse Gas (GHG)
emissions (current scope Mt)

10.8Mt10.4MtMin.

TargetSustainable solutions(% Operational Progress)

0.00%

1.25%

Min.

TargetWater de-risking plans

Max.

10.2Mt+1.75%

2.5%

140%

Max.

all critical sites with
mitigation planwith mitigation plan to exit the
Risk Zone

Min.

200%

Max.

10 new top critical sites

0 new site with
mitigation plan

9.2Mt

Result100%

Max.

TargetResources
Industrial wastes without
valorization (kt)

Share of revenue inCircular Business (% sales)

Better Life

Reportable Injuries & Illness
per 200,000 work hours (50%)
Near Misses Occupational
Safety / Process Safety –Low (15%) Safety Dialogue(20%) Revitalize Life Saving
Rules (15%)

Diversity
number of initiatives+9kt

versus 2022 result
Min.

9%

-5kt

versus 2022 result

Target

Max.

9,3%

10%

11%

Min.

TargetMax.

0.36

6000 OS / 4000 PS-L
LT 0/yr - Sites 0/mth R&I 0/mth
0 LSR audits/Q/sites
Min.

0 initiative
implemented
Min.

Total One Planet Score+0kt

versus 2022 result

+4kt

0.32

7000 OS / 4500 PS-L
LT 4/yr - Sites 4/mth R&I 1/mth
3 LSR audits/Q/site

Target

0%

0.30

0.27
8600 OS / 4000 PS-L
LT 4/yr - Sites 5.2/mth R&I 1.1/mth
2.4 LSR audits/Q/site

Target7 Initiatives
implemented

50%8000 OS / 5000 PS-L
LT 8/yr - Sites 8/mth R&I 2/mth
6 LSR audits/Q/site

150%

Max.

9

10 Initiatives + External
outstanding recognition

135%

Max.

111%

ActualDespite strong headwinds of stagnating key economies, the business results were broadly in line with market guidance. Following a record 2022,
Solvay showcased its resilience and protected its position. Our margins rose to 25%, limiting EBITDA erosion to 4.9% and we sustained strong cash
generation and cost discipline, securing dividends distribution, and allowing us to stand out against our peers. Solvay’s strong TSR performanceis another external measurement of success that establishes a clear focus for the ELT and has a direct link with the value being delivered toshareholders. More information can be found in the Performance Review section of this Annual Integrated Report.
The Solvay One Planet targets for 2023 apply to the former Solvay scope (before the Partial Demerger). They were composed of seven targets withan equal weight:· Five quantitative targets measuring the performance in terms of GHG emissions (result 2), sustainable solutions (result 1.4), industrial waste without
valorization (result 0), circular business (result 0), and safety (result 1.5).
· Two qualitative targets measuring the progress in the execution of action plans regarding water (result 1) and diversity (result 1.35). The strong
performance on GHG is due to emission-reduction projects which started to deliver savings in 2023 as well as some drop of production. We’reprogressing as expected with plans to mitigate the risk of water scarcity on critical sites. However, the act of substituting lower-quality coal banned
Russian sources and generated more wastes which we were not able to fully valorize in 2023.

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

119

The ongoing transformation of our business portfolio significantly increased the share of sustainable solutions in 2023, however it impacted
marginally the share of circular businesses. The good performance on safety reflects our continued efforts to deploy a safety culture among Solvay
employees and contractors while we’ve been successfully deploying our action plan to promote diversity, equity, and inclusion.

Summary of CEO STI objectives for 2023
The below section provides an overview of the STI objectives set for the CEO before the Partial Demerger date, Ilham Kadri, as the performanceachieved against the targets set.
Objectives

Overall weight

Financial

65%

Sustainability

15%

Individual
non-financial

20%

KPI

Sub-weight

EBITDA (70%)

45.5%Free Cash Flow (30%)

19.5%

One Planet

15%

Solvay 2030

5%

GROW 2.0

5%

Pursue Solvay's transformation (culture and structure)5%

Be a leading ambassador for the chemical industry and Solvay activities

5%

STI Results in 2023
Category

Objective

Solvay 2030 vision:
Partial Demerger
5%

Key initiatives delivered as part of the objective
·
·
·
·
·

Strategy·
GROW 2.0
Pursue GROW
Strategy and Carbon
Neutrality targets
5%

Pursue Solvay's
transformation(culture and structure)and instill purpose
and values in new
Companies
5%
Organization

·
·
·
·
·
·
·
·
·
·
·

Be a leadingambassador for thechemical industry andSolvay activities
5%

Total 20% of STI

·
·
·
·

Achievement

Manage the PMO and secure successful implementation.
Design two new archetypes and launch Day 1 operating model.
Develop a robust engagement strategy at all levels of the organization,
via town halls and webcasts for all employees and retreats with the SLT,
to embark, co-create, and develop a change management culture.
Design two new company governances, align with shareholders(including reference shareholders) and implement (including two newhigh profile boards).
Manage debt, credit rating, and liabilities of the two new companies.

10%

Approve and start PVDF USA and pursue PVDF Tavaux (Inovyn
agreements in place).
Launch second H2O2 licensing in China.
Industrial: STAR Factory* progress after flagship sites in place (in 2022).
Composites Strategy review and refresh including carbon fiber.
Pursue Soda Ash decarbonization investments in Rheinberg, Dombasle,
Green River, and Devnya; relaunch Argo.

10%

Groom/coach successors for top roles.
Decide next chapter of OLT (business leadership) organization.
Manage gaps for Day 1/Day 90 and hire new senior leaders to close
gaps.
Define a roadmap to create two companies culture fit for purpose.
Continue promoting our values and behaviors across company (CoBi).
Drive Solvay 160 years celebrations.

10%

Lead a responsible and sustainable fluorochemical industry in ECHA
consultation.
Interact with government to support chemical industry and Solvay.
Lead external institutions (WBCSD, CEFIC) to promote a sustainablechemical industry.
Participate in top level meetings in various events (ERT, WEF, ISSB).
Manage controversies.

10%

Final individual performance score

40%* STAR Factory is about transforming the capabilities and operational efficiencies of our plants to ensure they are best-in-class in all areas.

The overall performance of the CEO, during an unprecedented transformational year, was recognized as exceptional by the Board. Despite strong headwindsof stagnating key economies, the business results were broadly in line with market guidance. This is significant considering a number of key competitors
having issued profit warnings during 2023. Ilham Kadri managed to deliver the Partial Demerger on time and with key stakeholder backing. She drove aboost in reputation by engaging with stakeholders on sustainability issues, receiving SBTi validation on the Climate Objectives of Solvay before the Partial
Demerger, boosting our Chemscore to rank sixth among 50 peers, marking a gain of nine positions from 2022 and the safety record continued to improve.
For this exceptional performance the Board agreed a 200% individual performance factor which is 20% of the target amount, resulting in a bonus award for2023 of €2,135,000.

120

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

STI payout amounts, taking into account the Group and individual performance of each ELT member for the results achieved in 2023, are disclosed
in section 5.3.4. Amount of remuneration paid and other benefits granted directly or indirectly to the CEO and other ELT members.

2024 STI objectives for new ELT members
The Board decided to maintain the same breakdown of performance objectives for new ELT members for the 2024 financial year – 65% basedon financial results, 15% on sustainability, and 20% on individual objectives. However, as in previous years, due to the commercial sensitivity
surrounding the short-term targets set, Solvay will disclose on a retrospective basis the performance achieved against the specific performance
objectives set by the Board.

CEO’S PERFORMANCE MEASURES AND WEIGHTINGS FOR THE 2024 FINANCIAL YEAR
Objectives

Performance measures

Weighting

EBITDA €Free Cash Flow €Sub-weighting
25%

65%

25%

Cost savings €15%

One Planet – Diversity progress

5%

Group

One Planet – Safety (RIIR)

15%

One Planet – GHG emissions

5%

Build credibility of the new Solvay on the market
Individual

5%

10%
20%

Achieve the transformation of the Group

10%

6.3.5.2. Long-term Incentive (LTI)
Solvay aims to incentivize its ELT members by implementing a Long-term Incentive (LTI), wherein a substantial portion of equity awards is contingent
upon performance criteria aligned with the Company's communicated strategy. This approach fosters alignment with shareholder interests,
promoting accountability and driving long-term value creation through strategic execution and performance excellence.
Solvay uses two equity programs to incentivize its ELT members. The first is through the Performance-based Share Units (PSUs) which vest bymeeting pre-defined long-term financial and non-financial objectives over a three-year performance period to promote a focus on long-term
enterprise value growth and sustainability. The second equity program is comprised of Restricted Stock Units (RSUs) which vests over three years
and aims to align ELT members’ interests with that of shareholders and foster the retention of key personnel.
As per the Remuneration Policy, LTI grants for ELT members were offered with the following split:· 70% of the annual grant value delivered in the form of Performance-based Share Units (PSU); and· 30% of the award offered in the form of Restricted Share Units (RSU).

2024 LTI structure for new ELT members.
 he Board has decided, in line with the Remuneration Policy, to maintain the same split of long-term incentive programs for new ELT membersTfor the 2024 financial year – 70% in the form of PSUs and the remaining 30% in the form of RSUs.

LTI award opportunity
As per the Remuneration Policy, the LTI target is 150% of fixed base remuneration for the CEO and up to 125% of fixed base remuneration for other
ELT members. Outcomes range from zero if the minimum targets are not met, to maximum of 150% of target if all plan objectives are achieved.
The CEO before the Partial Demerger, Ilham Kadri, had an LTI grant target of 150% of fixed base remuneration. For all other former ELT members,
the grant target value was up to 125% of the fixed based remuneration.
The actual annual grant value, within the limits of the Remuneration Policy as explained above, is determined and approved by the Board.
In February 2023, the Board granted a total of 43,610 PSUs and 18,692 RSUs to ELT members. Approximately 360 executives and high-potential
employees also participated in the LTI Plan.

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

1212024 LTI award opportunity for new ELT members
The Compensation Committee used its discretionary power to reduce LTI award opportunities for ELT members following the Partial Demerger
to align with peer practice to better reflect Solvay’s new scope. The CEO after the Partial Demerger, Philippe Kehren, has an LTI grant targetof 115% of fixed base remuneration. For all other current ELT members, the grant target value is up to 95% of the fixed based remuneration.

Performance Share Units (PSUs)
The PSUs determine 70% of the annual LTI grant, which vest three years from the date of grant, subject to the achievement of the pre-set performance
objectives. The opportunity varies from a minimum of zero, if the minimum target is not met, to a maximum payout of 150%, if the maximum target
is achieved.
Performance objectives are distributed across financial (60% to 80% of the award) and One Planet (20% to 40% of the award) categories, with targets
and their respective weights established to align with the Group's mid- and long-term strategy. In addition, when determining the level of vestingfor PSUs, an additional performance measure was introduced as of 2023 to compare the performance of the Group to the TSR performance of the
Stoxx 600 Index ensuring a clear focus within the ELT to create shareholder value. Where the PSU result is above zero, the TSR measure can decrease
the PSU outcome by 25% when the TSR is in the lower quartile of the Stoxx 600 Index, and increase the PSU result by 25% when the TSR is in the
top quartile of the Stoxx 600 Index.
The Board assesses the achievement of the targets set, based as a rule on the audited results of the Group.
Every year, the Board determines the budget available for distribution and the total volume of PSUs available is subsequently allocated to theeligible population.

Restricted Share Units (RSUs)
The remaining portion of the LTI grant is in RSUs (30%), where executives receive shares that vest after three years. RSUs feature employment orpresence conditions, and dividends accrue solely on vested awards, paid out at the conclusion of the three-year vesting period.

PSUS, RSUS ALLOTTED IN 2023 (UNTIL DECEMBER 8, 2023) TO ELT MEMBERS BEFORE THE PARTIAL
DEMERGER DATECountry

Name

Function

Number of PSUs (1)Number of RSUs (2)Belgium

Ilham Kadri

CEO/Chair of the ELT until the Partial Demerger date

20,295

8,698

Belgium

Karim Hajjar

ELT member until the Partial Demerger date

5,898

2,528

Belgium

Augusto Di Donfrancesco

ELT member until the Partial Demerger date

5,898

2,528

Belgium

Hervé Tiberghien

ELT member until the Partial Demerger date

4,302

1,844

Belgium

Dominique Golsong

ELT member until the Partial Demerger date

3,400

1,458

FranceMarc Chollet

ELT member until the Partial Demerger date

3,817

1,636

43,61018,692

Total(1) PSUs share price for March 2023 grant was €100.89.
(2) RSUs share price for March 2023 grant was €100.89.

No PSUs or RSUs were granted to ELT members between December 9 and December 31, 2023.
The 2023 PSU and RSU plans, among other LTI plans, were adjusted in the context of the Partial Demerger. Such adjustments are described below
under the Adjustments to the outstanding SOPs and PSUs and RSUs plans section.

Clawback provisions relating to LTI
Solvay has the right to claim reimbursement of any amounts paid in accordance with the plan from any PSU and RSU plan participant, during aperiod of three years from the date of the payment, on the basis of erroneous results that were subsequently adjusted or corrected. This clawback
clause has not been applied in the past because there have not been any instances where such events occurred.

2020-2022 LTI Performance Share Unit plan performance results
The results of the 2020 PSU grant were calculated in April 2023 and paid in June 2023, based on a three-year performance period ending on
December 31, 2022, with a vesting factor of 100% of target.

122

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Performance against the objectives set at the start of the performance period in 2020, for the three years performance under the 2020 plan, issummarized below:
Performance
criteria

WeightPerformanceyear 2020

Performanceyear 2021

Performanceyear 2022

TargetResultTargetResultTargetResultUnderlying EBITDA organic growth

40%

-2%

-14%

5%

27%

5%

29%

ROCE growth (bp)40%0-120bp

+50bp

443bp

+100bp470bp

CO2 emissions reduction

20%-200Kt-1900Kt-200Kt

900Kt-200Kt-600KtBased on the performance achieved against the targets set at the start of the performance period, this resulted in a payout of 100% of the PSU value
granted in 2020, with the addition of the total dividends, taking into account the number of vested units calculated over three years (€11.65 per unit).
Payouts made in 2023 to ELT members relating to the 2020-2022 PSU plan are disclosed in the section below: 5.3.5 Amount of remuneration paid
and other benefits granted directly or indirectly to the CEO and other ELT members.

Stock option plans (SOP)The historical Stock Option Plan has been replaced by the PSU and RSU plans detailed above. However as of December 31, 2023, stock options
remained outstanding under the 2016, 2017, 2018, 2019, 2020, and 2021 SOPs and the rules thereof are reiterated below.
Under Belgian law, unlike most other jurisdictions, taxes on stock options are due at the time of grant. Solvay, like other Belgian companies, had
therefore set no additional performance criteria for determining the vesting of stock options. The options have a vesting period of three full calendar
years, meaning that options will vest on the first day of the fourth year after the grant year, followed by a four-year exercise period.
When they were granted, the SOPs gave each beneficiary the right to buy Solvay shares at a strike price corresponding to the fair market valueof the shares upon grant. Every year, the Board determined the volume of stock options available for distribution, based on an assessment of theeconomic fair value at grant, using the Black Scholes valuation formula. The total volume of options available was subsequently allocated to theeligible population.
Features:· Options are granted at money or fair market value.
· They become exercisable for the first time three full calendar years after they are granted.
· They have a maximum term of eight years.
· They are not transferable inter vivos.
· The plan includes a bad leaver clause.
The outstanding SOPs were adjusted in the context of the Partial Demerger with a view to safeguard the interests of the beneficiaries. Suchadjustments are described in the Adjustments to the outstanding SOPs and PSUs and RSUs plans section.
In addition, SOPs also remain outstanding under the 2022 SOP, which was approved by shareholders at the May 9, 2023, Annual General Meetingwith the following features:· Stock options were subject to performance conditions – implementation of separation and value creation – and would have been forfeited in full
if the Partial Demerger had not occurred by 2025.
· The combined share prices of Solvay and Syensqo following completion of the Partial Demerger had to be above €100 for at least 15 trading days
in total (not required to be consecutive days) for the options to become exercisable as from January 1, 2026, and deliver value. If this criteria had
not been met, the award would have lapsed.
· The options may be exercised by beneficiaries between January 1, 2026, and December 31, 2027, inclusive, providing presence and performance
criteria are met.
· Taxes are paid at the time of the grant in Belgium and cannot be recouped if the options do not vest or upon voluntary departure, demonstrating
executives' commitment and belief in the success of the Partial Demerger and value creation for both companies.
· The Exercise Price of each option is €84.34, which was the fair market value of the Solvay share at the time of the grant (August 2022).
· Each stock option entitles its holder to acquire one Solvay share and one Syensqo share against payment of the exercise price (basket option).
· Stock options were determined as a multiple of annual base salary in a range between 50% and 200%, depending on the Board’s view of how
critical the role of the beneficiary was for the Partial Demerger.
The 2022 SOP plan was not adjusted in the context of the Partial Demerger. Accordingly, the 2022 stock options remain basket options, entitling
their holders to acquire one Solvay share and one Syensqo against payment of the exercise price.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

CORPORATE GOVERNANCE STATEMENT

123

Adjustments to the outstanding SOPs, PSUs, and RSUs in the context of the Partial Demerger
Overview
Plan

Plan adjustment

Vesting

PSU 2021 (cash settled)

Payout determined based on Solvay share price from
November 17-30, 2023

December 31,2023
Cash payout in June 2024

PSU 2022 (equity settled)"Shareholder approach" and converted into RSU

December 31, 2024

RSU 2022 (equity settled)"Shareholder approach"December 31, 2024

PSU 2023 (equity settled)"Employer approach"New targets set for 2024 and 2025

December 31, 2025

RSU 2023 (equity settled)"Employer approach"December 31, 2025

In the context of the Partial Demerger, most outstanding long-term incentive plans of the Group were adjusted by the Board, upon the advice of
the Compensation Committee, to take into account the impact of the Partial Demerger, as follows:· The 2016-2021 SOPs were adjusted to allow the beneficiaries to receive for each outstanding stock option, giving the right to acquire one Solvay
share and the right to acquire one Syensqo share (in addition to the right to acquire one Solvay share). The initial exercise price of the stock options
was split between both the Solvay share and the Syensqo share, based, as a rule, on the closing prices of the Solvay share (€20.62) and of the
Syensqo share (€98.93) on the first trading day following the Partial Demerger Date (December 11, 2023).
· The 2021 cash-settled PSU plan was adjusted so that (i) the performance for the 2023 financial year would be assessed based on the data available
as of the time of the Partial Demerger and (ii) the payout would be determined based on the average of the last ten closing prices of the Solvay
share for the period ending on November 30, 2023 (from November 17-30, 2023 included). Payout will occur in June 2024 in accordance with theoriginal plan rules.
· The 2022 PSU plan was adjusted to allow the relevant beneficiaries to receive for each 2022 PSU held, entitling them to receive one Solvay shareand one PSU entitling them to receive one Syensqo share (in addition to the 2022 PSU entitling them to receive one Solvay share they alreadyheld). In addition, the Board of Directors decided that (i) the performance for year 2024 would be extrapolated from the performance for the years
2022 and 2023, and (ii) the vesting multiplier dependent on Solvay’s performance against the median of total shareholders return of the Stoxx 600
Index peer group (TSR) would be measured on the basis of the average closing prices of the Solvay share over the three-month period ending on
November 30, 2023. The vesting period and conditions remain unchanged.
· The terms of the 2022 RSU plan were adjusted to allow the relevant beneficiaries to receive for each RSU held, entitling them to receive one Solvay
share and one RSU entitling them to receive one Syensqo share (in addition to the RSU entitling them to receive one Solvay share they alreadyheld).
· The 2023 PSU plan was adjusted so that the number of PSUs held at the time of the Partial Demerger by participants who would remain employeesof Solvay or any of its affiliates following the Partial Demerger, or were former employees of Solvay or any of its affiliates as of the Partial Demerger
date, would be multiplied by a factor determined based on the average closing prices of the Solvay share relative to the combined averageclosing prices of the Solvay share and the Syensqo share over the 30 trading days starting immediately following the completion of the Partial
Demerger. In addition, the performance conditions linked to the 2024 and 2025 performance years are being adjusted to reflect the strategy of
Solvay and the impact of the Partial Demerger. The vesting period and conditions remain unchanged.
· The 2023 RSU plan was adjusted so that the number of RSUs held at the time of the Partial Demerger by participants who would remain employeesof Solvay or any of its affiliates following completion of the Partial Demerger, or were former employees of Solvay or any of its affiliates as of thePartial Demerger date, would be multiplied by a factor determined based on average closing prices of the Solvay share relative to the combined
average closing prices of the Solvay share and the Syensqo share over the 30 trading days starting immediately following the completion of thePartial Demerger.
As part of the Partial Demerger, Solvay transferred to Syensqo its rights and obligations under its outstanding incentive plans (including the 2022
stock option grant), in each case to the extent the beneficiaries of such plans (including members of the ELT before the Partial Demerger date) are
employed by Syensqo or one of its affiliates following completion of the Partial Demerger. Specific adjustments were made to the 2023 PSU andRSU plans for such beneficiaries.

Stock options and share plans granted and held in 2023 by ELT members
The table below shows the evolution of outstanding balances of stock options, RSUs, and PSUs issued and held by:· ELT members before the Partial Demerger date as of December 8, 2023, (i.e., before the adjustments described above became effective); and· ELT members following the Partial Demerger as of December 31, 2023. No new stock options were granted in 2023 (i.e., after the adjustments
described above became effective).

124

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

ELT members before the Partial Demerger date

Stock options
Name

Balance on
12/31/2022

Kadri, Ilham

271,572

Hajjar, Karim

168,257

Di Donfrancesco, Augusto

153,444

Tiberghien, Herve

50,490Golsong, Dominique

29,454Chollet, Marc

83,349

Total

756,566

Grantedin 2023 by
December,
2023-

Exercisedin 2023 by
December,
2023

Expired in
2023 byDecember 8,2023

VestedNonvestedBalance on
12/8/2023

48,537-56,632

166,403

223,035

14,857

10,19588,811

54,394

143,205

20,211

10,19568,31454,724

123,038--

16,41534,07550,490-29,45429,454

12,8886,526

34,67529,26063,93596,493

26,916

264,847

368,310633,157

Shares plan (PSU and RSU)
Name

Kadri, Ilham

Hajjar, Karim

Di Donfrancesco, Augusto

Tiberghien, Herve

Chollet, Marc

Total

Numbers of shares

Balance on 12/8/2023

VestedNon vested

PSU (phantom shares – PSU 2021)

11,64011,640PSU (performance shares)

37,221

37,221

RSU (restricted shares)

15,952

15,952

PSU (phantom shares – PSU 2021)

2,877

2,877

PSU (performance shares)

10,734

10,734

RSU (restricted shares)

4,601

4,601

PSU (phantom shares – PSU 2021)

2,877

PSU (performance shares)

10,734

RSU (restricted shares)

4,601

PSU (phantom shares – PSU 2021)

2,616

PSU (performance shares)

8,320

2,877
10,734
4,601
2,616
8,320

RSU (restricted shares)

3,566

PSU (phantom shares – PSU 2021)

1,674

3,566

PSU (performance shares)

7,537

7,537

RSU (restricted shares)

3,231

3,231

PSU (phantom shares – PSU 2021)

21,684

PSU (performance shares)

74,54674,546

RSU (restricted shares)

31,951

31,951

1,674

21,684

As described above (Adjustments to the outstanding SOP, and PSU and RSU plans in the context of the Partial Demerger), the SOPs, PSUs, and
RSUs were adjusted in the context of the Partial Demerger and the obligations of Solvay under SOPs, PSUs, and RSUs held by members of the ELT
before the Partial Demerger date who transferred to Syensqo (i.e., Ilham Kadri, Herve Tiberghien, Marc Chollet, and Augusto Di Donfrancesco) weretransferred to Syensqo pursuant to the Partial Demerger.

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

125

ELT members after the Partial Demerger date
Stock options
Name

Philippe Kehren

Alexandre Blum

SOP

Grantedin 2023

VestedExpiredbetweenthe December
9-31,
2023

Exercised
betweenthe December
9-31,
2023

Non
vestedBalance on
12/31/2023

2,573

2,573

Solvay (segregatedoptions) (1)2,573

Syensqo (segregatedoptions) (1)

2,573

2,573

2,573

Basket options

7,616

7,616

7,616

(2)

-

-

-

-

Solvay (segregatedoptions) (1)16,307

7,370

Syensqo (segregatedoptions) (1)16,307--

13,091

3,216

16,307

-

-

-

-

-

5,721

5,789

11,51013,091

5,789

18,880

7,616

7,616

Basket options

Total

Balance on
12/9/2023(2)-

Solvay (segregatedoptions) (1)18,880

Syensqo (segregatedoptions) (1)18,880Basket options

7,616

(2)

-

7,370

5,721

3,216

8,937

(1) Options granted under the historical SOPs reflecting the adjustments described above (Adjustments to the outstanding SOP, and PSU and RSU plans in thecontext of the Partial Demerger) and which, accordingly, entitle their holder to acquire a Solvay share or a Syensqo share against the payment of separate exercise
prices.
(2) Options granted under the 2022 Partial Demerger SOP and which, accordingly, entitle their holder to Solvay share and a Syensqo share against the payment of asingle exercise price.
None of the other ELT members held any stock options as of December 31, 2023.

126

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EShares plan (PSU and RSU)
Name

Numbers of shares

Balance on 12/31/2023

Vested628

628

PSU 2021 (phantom shares)
RSU 2022 (restricted shares) – Solvay
Philippe Kehren

3,402

(1)

RSU 2022 (restricted shares) – Syensqo

3,402

3,402

10,056

10,056

RSU 2023 (restricted shares) (2)

4,311

4,311

785

RSU 2022 (restricted shares) – Solvay

Lisa Brown

Mark Van Bijsterveld

1,595

1,595

1,595

1,595

PSU 2023 (performance shares)

4,714

4,714

(1)

(2)

2,024

2,024

PSU 2023 (performance shares) (2)

4,714

4,714

RSU 2023 (restricted shares) (2)

(2)

4,270

4,270

(2)

10,056

10,056

4,311

4,311

PSU 2023 (performance shares) (2)10,056

10,056

PSU 2023 (performance shares)
RSU 2023 (restricted shares)(2)

RSU 2023 (restricted shares) (2)4,311

PSU 2021 (phantom shares)

1,413

RSU 2022 (restricted shares) – Solvay (1)
Total

785

RSU 2022 (restricted shares) – Syensqo (1)RSU 2023 (restricted shares)
Lanny Duvall

3,402

PSU 2023 (performance shares) (2)(1)

PSU 2021 (phantom shares)

Alexandre BlumNon vested

RSU 2022 (restricted shares) – Syensqo
PSU 2023 (performance shares)

(1)

(2)

RSU 2023 (restricted shares) (2)

4,311
1,413

4,997

4,997

4,997

4,997

39,596

39,596

19,227

19,227(1) RSUs granted under the 2022 RSU Plan reflecting the adjustments described above (Adjustments to the outstanding SOP, and PSU and RSU plans in the context
of the Partial Demerger) and which, accordingly, entitle their holder to receive either a Solvay share or a Syensqo share.
(2) PSUs and RSUs granted under the 2023 PSU and RSU Plans reflecting the adjustments described above (Adjustments to the outstanding SOP, and PSU and RSU
plans in the context of the Partial Demerger) and which were, accordingly, multiplied by a factor determined based on the average closing prices of the Solvay sharerelative to the combined average closing prices of the Solvay share and the Syensqo share over the 30 trading days starting immediately following the completionof the Partial Demerger.

Share ownership guidelines
To align executives’ interests with those of shareholders, a requirement to build and maintain a shareholding in Solvay equivalent to 150% of
fixed base remuneration for the CEO and 100% of fixed base remuneration for other ELT members is included in the Remuneration Policy. This
shareholding should normally be built up over a period not exceeding five years.
Any shares acquired to meet this requirement should be held until at least one year after the ELT member leaves the Group and, in any case, for atleast three years after the shares were acquired.
At this stage every ELT member is building his or her shareholding.

6.3.5.3 Extraordinary items
Retention premium relating to the Group Portfolio Transformation
In 2022, the Group announced plans to create two distinct, independent, publicly listed industry leaders. The successful implementation of thisproject depended on the performance of Solvay’s ELT and key senior executives. As the Solvay Group moved forward with the Partial Demerger it
was considered critical by the Board to retain those key leaders.
For this reason, next to an incentive element for the success of the Partial Demerger consisting in a share option plan, and upon recommendation of
the Compensation Committee of March 8, 2022, the Board of Directors of March 14, 2022 approved a cash retention plan to Solvay’s ELT members,
including the CEO, other executive officers, Global Business Unit (GBU) presidents, and heads of key functions.
The retention plans, crafted in alignment with the Remuneration Policy, were strategically devised to retain pivotal individuals crucial for spearheading
the transformation project during a period of significant personal uncertainty. Their retention was considered imperative by the Board to maintainunwavering focus, mitigate distractions, and safeguard business continuity. Importantly, the payout of the retention bonus was contingent upon
meeting performance criteria and maintaining active involvement within the Group up to the time of the Partial Demerger.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

CORPORATE GOVERNANCE STATEMENT127

The premium amount was calculated based on a multiple of the monthly base salary as of April 2022 and the short-term incentive at target for 2022,
ranging from 12-18 months.
This retention premium for those who were eligible are disclosed under the table in the section 6.3.6.1.

Exceptional bonus for the CEO before the Partial Demerger date, Ilham Kadri
Upon the recommendation of the Compensation Committee on October 30, 2023, the Board approved an extraordinary bonus of €12,000,000(gross) for Ilham Kadri. This decision was based on the Board's acknowledgment, afforded through the Remuneration Policy and the spirit of the
Corporate Governance Code, of Ilham Kadri's instrumental role in both devising and executing the transformational project, overcoming stringent
deadlines, and unprecedented challenges. This transformational project, notable for its scale, underscored a significant leap in sustainable value
creation for all stakeholders, marking a historic moment in the Group's 160-year history through the creation of two industry-leading champions inessential and specialty chemical products. Since the announcement of the Partial Demerger on March 25, 2022, Ilham Kadri's steadfast commitment
to the Group played a pivotal role in successfully concluding the separation within the allotted time frame, while maintaining high team engagementlevels, close to 80%.
During her tenure as CEO of Solvay, Ilham Kadri consistently delivered exceptional performance, navigating the company through a volatileenvironment marked by inflation, geopolitical tensions, and economic uncertainties. Despite these hurdles, Ilham Kadri's disciplined cost andcash management, alongside her efforts in reducing the company's indebtedness, accelerated the Group's transformation while solidifying its
financial position, bolstering a robust balance sheet and industry-leading sustainability credentials. These efforts laid the groundwork for the Partial
Demerger which culminated in the emergence of two distinct business entities, achieving a milestone three years ahead of the original schedule
outlined in the G.R.O.W. strategy.
Given the direct link between this exceptional bonus and the success of the Partial Demerger, its grant was subject to approval by the Extraordinary
Shareholders Meeting held on December 8, 2023, which was approved by shareholders.

128

6.3.6.

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Amount of remuneration paid and other benefits granted directly or indirectly to the CEO and other
ELT members

According to the Remuneration Policy and based on the Board’s assessment of the performance of the Group and ELT members in 2023, theremuneration of the CEO and other ELT members was as follows:

6.3.6.1 Solvay ELT from January 1, 2023, to December 8, 2023 (Before the Partial Demerger date)
The table below presents the payments made, including the extraordinary elements, to the previous ELT.

Name,
Position

Fixed
Remuneration/BasesalaryUntil
December
8 2023

Variable remuneration
Annualvariablepay
based
on 2023
paid in
2024

The valueofvestedequitybased remuneration
2023 (2)Total
directremuneration

Extraordinary items(4)

Benefits

Total
remuneration

PensionOther(3)

Ilham Kadri,
CEO & Chairof the ELT

1,315,971

2,135,000

1,025,982

4,476,953

16,290,000

953,080

274,643 21,994,676

Karim Hajjar,
CFO & ELT
member

1,004,513

543,000

297,436

1,844,949

3,819,897

247,502

192,934

6,105,281

DominiqueGolsong,
ELT member(1a)451,114

276,000

0727,114895,420001,622,534

Marc Chollet,
ELT member

440,758

381,000

190,313

1,012,071

765,000

235,482

14,8182,027,372

Augusto Di
Donfrancesco,
ELT member(1b)666,632

621,000

297,436

1,585,068

1,759,500

326,881

127,667

3,799,116

HervéTiberghien,
ELT member

508,481472,000

297,436

1,277,917

1,613,285

129,557

143,889

3,164,649

Proportion of
fixed andvariable
remuneration(excluding
extraordinary
items)

Fixed

45%

Variable

55%

Fixed

63%

Variable

37%

Fixed

62%

Variable

38%

Fixed

55%

Variable

45%

Fixed

55%

Variable

45%

Fixed

50%

Variable50%

Under the column Proportion of fixed and variable remuneration, extraordinary items have been excluded from the calculation as they were related to the one-off
transformational project relating to the Partial Demerger.
(1a) Acting through and remuneration paid to management company "SRL Dominique Golsong" as such not eligible to any company paid benefits.
(1b) Expatriate assignment in Belgium until the end of March 31, 2023.
(2) PSU 2020-2022 paid in June 2023; overall plan result 100% of 120% as disclosed in the section "2020-2022 LTI Performance Share Unit plan performance results" ofthis report.
(3) Long-term non benefits (e.g. death-in-service, disability, and medical benefits) and benefits in kinds (e.g. company vehicle, education, expatriation package expenses).
(4) Ilham Kadri: Retention premium (4,290,000 € gross) relating to the Group Portfolio Transformation of 18 months monthly fee and short term incentive fee at target on
April 2022 approved by the Board of Directors on March 14, 2022 and exceptional bonus of 12,000,000€ gross as approved by the EGM on December 8, 2023.
(4) Karim Hajjar: Termination indemnity (3,344,288 € gross) of 12 months of total remuneration according to his employment contract as mentioned under section 5.5.Key
provisions and other mandatory elements related to the end of contract (holiday pay upon termination, balance of end year premium).
(4) Dominique Golsong: Termination indemnity (120,420 € excl. VAT) of three months (fixed) fee, in compliance with the terms of his service contract. Mr. Golsong shall beentitled to an additional indemnity in an amount of 775.000 € excl. VAT payable in 2024 in consideration for the retention arrangements that were made in 2022.
(4) Marc Chollet: Retention premium (765,000 € gross) relating to the Group Portfolio Transformation of 12 months base salary and short term incentive at target on April
2022 approved by the Board of Directors on March 14, 2022.
(4) Augusto Di Donfrancesco Retention premium (1,759,500 € gross) relating to the Group Portfolio Transformation of 18 months base salary and short term incentive attarget on April 2022 approved by the Board of Directors on March 14, 2022.
(4) Hervé Tiberghien: Retention premium (1,196,460 € gross) relating to the Group Portfolio Transformation of 18 months base salary and short term incentive at target
on April 2022 approved by the Board of Directors on March 14, 2022 and other mandatory elements related to the mutual determination of his employment contract on
December 8, 2023, due to his change of status under new standalone Syensqo (holiday pay upon termination, balance of end year premium).

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

1296.3.6.2 Solvay ELT from December 9-31, 2023 (after the Partial Demerger date)
The table below presents the payments made, where no additional remuneration payouts were provided to the new ELT.

Name,
Position

Fixed
Remuneration/
Base salary
From December
9-31, 2023 (1)Variable remuneration
Annualvariablepay
based on2023 paidin 2024(2)

The valueofvested equity based
remuneration 2023
(3)

Total
directremuneration

Extraordinary items

Benefits
Pension
(4)

Other
(5)

Total remuneration
From December
9-31, 2023 (1)Excluding theone-off pension
contribution (4)Philippe
Kehren,CEO & Chairmanof the ELT

48,21455,084-103,298-374,361

19,978138,096

Alexandre
Blum,
CFO & ELT
member

29,762

21,217-50,979-210,836

13,89473,690

Lanny Duvall,
ELT member

23,777

20,368-44,145

-

8,042

8,549

60,736

Lisa Brown,
ELT member

26,48818,883-45,371

-

7,752

5,747

58,871

Mark Van
Bijsterveld,
ELT member

25,44919,519-44,968

-

8,230

4,461

57,659(1) Remuneration paid for the period related to their ELT mandate in from December 9-31, 2023 (i.e., in their capacity of ELT member).
(2) Annual variable pay based on 2023 paid in 2024 for the time related to their ELT mandate from the December 9-31, 2023.
(3) The PSU 2020-2022 has been paid in June 2023, no payout during the period of December 9-31, 2023.
(4) Include a one-off pension contribution related to the transfer of the provision already accrued in France under the ARS pension to the Belgian pension scheme
for Philippe Kehren (amount of 359,541€) and for Alexandre Blum (amount of 202,019€).
(5) Long-term non pension benefits (e.g. death-in-service, disability, and medical benefits) and benefits in kinds (e.g. company vehicle, relocation expenses).

130

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

COMPARATIVE INFORMATION ON THE EVOLUTION OF REMUNERATION AND COMPANY PERFORMANCEThe table below shows the change in remuneration of the Board and the ELT in comparison to the Group’s performance over a period of five years.
2019

2020

2021

2022

2023

Remuneration of the Board (€)

1,645,433

1,687,500

1,620,587

1,575,538

2,182,606

Remuneration of the CEO

3,328,604

3,790,614

4,025,971

5,738,535 (8)5,842,772— Ilham Kadri (€) (CEO until December 8, 2023)

3,328,604

3,790,614

4,025,971

5,738,535 (8)5,704,676 (9)Remuneration— Philippe Kehren (€) (CEO as of December 9, 2023)

-

-

-

-

138,096 (10)6,499,400 (1)7,726,374 (2)7,707,462 (3)8,327,681 (4)8,117,104 (11)69,22061,945 (5)67,990 (6)76,58868,424

48x

61x

59x

75x

85x

Solvay Performance (0)

2019

2020

2021

2022

2023

Underlying profit for the period (€ million)

1,113

650

1,081

1,772

1,430

Underlying EBITDA (€ million)

2,322

1,945

2,356

3,229

2923

Free Cash Flow (€ million)

1,072

1,206

1,043

1,255

1041

Remuneration of ELT members (€)
Average remuneration of employees (€)
Ratio between the remuneration of the CEO and the average
remuneration of employees (7)(0) Solvay Performance - 2023 figures:-U nderlying profit: Calculated as the sum of Solvay’s underlying profit for the financial year ending on December 31, 2023 (588m€) and the underlying profit of Syensqo
from January 1, 2023 to December 8, 2023 (842m€).
- Underlying

EBITDA: Calculated as the sum of Solvay’s underlying EBITDA for the financial year ending on December 31, 2023 (1,246m€) and the Underlying EBITDA of
Syensqo for the period from January 1, 2023 to December 8, 2023 (1,677m€).
-F ree Cash Flow: Calculated as the sum of the Free Cash Flow of Solvay for the financial year ending on December 31, 2023 (561m€) and the Free Cash Flow of Syensqo
for the period from January 1, 2023 to December 8, 2023 (480m€).
(1) V. De Cuyper, K. Hajjar, A. Di Donfrancesco, H. Du, H. Tiberghien (4 months), P. Juery (two months), C. Tandeau de Marsac (two months)		
(2) V. De Cuyper, K. Hajjar, A. Di Donfrancesco, H. Du, H. Tiberghien(3) K.Hajjar, A. Di Donfrancesco, H. Tiberghien, V. De Cuyper (three months), H. Du (three months), M. Chollet (nine months), D. Golsong (nine months)(4) K. Hajjar, A. Di Donfrancesco, H. Tiberghien, M. Chollet, D. Golsong(5) Impacted by furlough and other cost measures, while variable pay payouts were significantly higher in 2021 than the previous year.
(6) Considers impact of 2020 bonus paid in 2021 above target for all employees and impacted by payroll inflation in 2021.
(7) Ratio will increase in the future considering the performance and vesting of the PSU plan for the CEO (first grant of 2019 will vest in 2022).
(8) Higher short incentive payout related to 2022 due to the exceptional results and accomplishments and 2019 PSU payout in 2022 which increased the total
CEO remuneration.
(9) Total CEO remuneration from January 1, 2023 until December 8, 2023 excluding exceptional bonus and Partial Demerger retention premium relating to the Group
Portfolio Transformation.
(10) Total CEO remuneration from December 9, 2023 until December 31, 2023 excluding the one-off pension contribution related to the transfer of the provision alreadyaccrued in France under the ARS pension to the Belgian pension scheme (amount of € 359,541).
(11) Calculated as the sum of the remuneration of the members total of the ELT remuneration before the Partial Demerger from January 1, 2023 until December 8, 2023,
excluding the retention premium relating to the Group Portfolio Transformation (total amount of € 7,865,850, and the remuneration of the members of the ELT after thePartial Demerger from December 9, 2023 until December 31, 2023 (amount of €251,254).						The remuneration of the CEO and the ELT members includes: (1) base remuneration paid in 2023; (2) STI for the results of 2023; and (3) PSU value forthe results of the 2020-2022 plan, paid in June 2023 for the ELT members before the Partial Demerger. It does not include: (1) granted or vested valueof LTIs during 2023, as SOPs do not represent a value until exercised and PSUs that vest on December 31 are paid the following year, taking into
account the performance of the Group over the vesting period; and (3) any one-time payments. Average remuneration of employees is calculated
as: “total wages and direct social benefits” divided by the “number of employees on a year-over-year basis for continued operations,” as disclosed
in the respective sections of this Annual Integrated Report.
Following the guidance issued by the Belgian Corporate Governance Commission regarding remuneration disclosure, published in November
2020, the ratio of the CEO’s pay (highest paid executive in the Group) to that of the lowest paid Solvay employee in Belgium in 2023 is 125x,
compared to 114x in 2022, 90x in 2021, and 108x in 2020. The CEO remuneration for 2023 is calculated as the sum of the remuneration of the CEO
before the Partial Demerger, Ilham Kadri, from January 1, 2023, until December 8, 2023, and the remuneration of the CEO after the Partial Demerger,
Philippe Kehren, from December 9, 2023, until December 31, 2023.
The lowest paid employee is defined as a full-time employee in Belgium who has worked for a full year and holds the lowest base salary at year end.
The actual total remuneration received by this employee is considered in the calculation of the ratio.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

CORPORATE GOVERNANCE STATEMENT

131

6.4. Statements of compliance of remuneration for Chairman and ELT members
This report has been prepared by the Compensation Committee.
The remuneration packages of the former and actual CEO and the other former or actual ELT members, are in compliance with Article 7:91 of theBelgian Code of Companies and Associations, which provides that, in the absence of statutory provisions to the contrary or express approval by the
Annual General Meeting of Shareholders, at least 25% of the variable remuneration shall be linked to predetermined performance criteria that are
objectively measurable over a period of at least two years, and at least another 25% should be based on predetermined performance criteria thatare objectively measurable over a period of at least three years.
The remuneration packages are set by the Board, based on recommendations from the Compensation Committee. These remuneration packages
are also compliant with the Belgian Code of Corporate Governance (2020).
Variable remuneration consisted of an annual incentive based on the performance achieved relative to the Group’s economic and sustainable
development performance objectives, and on the performance of the individual as measured against a set of pre-determined individual objectives.
Since 2022, ELT members, including the CEO, receive PSUs and RSUs in the form of shares.
The expenses of the ELT members, including those of its Chairman (the CEO), are governed by the same rules that apply to all senior management
staff, namely the justification of all business expenses, item by item. Private expenses are not reimbursed. In the case of mixed business and private
expenses, such as cars, a proportionate rule is applied in the same way as to all management staff in the same position.
According to Belgian Law, any changes to our Remuneration Policy need to be submitted to shareholders for approval before implementation.

6.5. Key provisions of Executive Leadership Team members' contractual relationships
with the Company and/or an affiliated company, including provisions relating toremuneration in the event of early departure
ELT members, including the Chairman (or CEO), have directorships in Group subsidiaries as a function of their responsibilities. Where suchdirectorships are compensated, they are included in the amounts given above, regardless of whether the position is deemed to be salaried orundertaken on a self-employed basis under local legislation.

6.5.1.

ELT members from January 1, 2023 until December 8, 2023 (before the Partial Demerger Date)

The key provisions of the contracts with the members of the ELT of Solvay until December 8, 2023, including those relating to remuneration in theevent of early departure, have been reported under section 6.5 of the previous remuneration reports.
In the context of the Partial Demerger, and as announced on November 3, 2023, three members of the ELT of Solvay have joined the ELT of Syensqo:
Dr. Ilham Kadri, Mr. Hervé Tiberghien, and Mr. Marc Chollet. Mr. Augusto Di Donfrancesco joined Syensqo after the Partial Demerger, without beinga member of the ELT. They have therefore left the ELT of Solvay on December 8, 2023.
As they joined Syensqo as of December 9, 2023, Dr. Ilham Kadri, Mr. Hervé Tiberghien, Mr. Marc Chollet, and Mr. Di Donfrancesco have not received
any termination payment when leaving the ELT of Solvay in 2023. However, Mr. Tiberghien received mandatory elements related to the mutual
termination of his employment contract (holiday pay upon termination and balance of end year premium) on December 8, 2023, due to his changeof status under new standalone Syensqo.
Mr. Karim Hajjar left the ELT of Solvay on December 8, 2023. He received a contractual departure indemnity of 12 months remuneration (computedon his total remuneration), in compliance with Belgian law and the terms of his employment contract, disclosed in the previous report (p. 147).
Mr. Dominique Golsong left the ELT of Solvay on December 8, 2023. He received a contractual departure indemnity of three months (fixed)
remuneration, in compliance with the terms of his service contract, disclosed in the previous report (p. 147). Mr. Golsong shall be entitled to an
additional indemnity in an amount of € 775.000 (equivalent to nine months remuneration, computed on his total remuneration), payable in 2024.
Solvay waived the non-competition clauses for Mr. Golsong and Mr. Hajjar. Hence, no non-competition payment has been made.

132

6.5.2.

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

ELT members as of December 9, 2023 (after the Partial Demerger Date)

ELT members of the new standalone Solvay as of December 9, 2023, have been appointed under a self-employed status and have amanagement agreement of Belgian law with Solvay for a definite period of four years that is tacitly renewed when their mandate is renewed.
By way of exception, the CPO (Mr. Mark Van Bijsterveld) has an employment contract of Dutch law and the COO (Mr. Lanny Duvall) has an
employment contract of Belgian law, both for an indefinite period (as mentioned above the intention is to move to a self-employment contract
when the change in immigration status of Mr. Lanny Duvall will be completed).
The following termination arrangements have been agreed upon with the ELT members of the new standalone Solvay:
For the CEO it was decided to apply a severance fee equivalent to 12 months of remuneration in case Solvay terminates the agreement. Thisdeviates from the provisions of the agreement with the former CEO as set out in the Remuneration Policy which provided for a fee equivalent
to 18 months. Despite a technical deviation from the Remuneration Policy, this reduction better aligns to practice under the Belgian Corporate
Governance Code.
Additionally, for the new ELT members the following provisions apply:
In the event that Solvay terminates the contract of the CEO (Mr. Philippe Kehren), the CFO (Mr. Alexandre Blum), or the General Counsel (Ms.
Lisa Brown), or if their mandate is not renewed at the end of a four-year period, they will be eligible for a contractual termination indemnity
equal to six months remuneration (calculated on the basis of the annual fixed fees and the short-term variable fees at target) for a seniority ofless than one year within the Solvay Group at the time of the termination, or 12 months for a seniority of more than one year. Their management
contracts provide for a non-competition period of 12 months after termination, with an indemnity equal to 50% of the remuneration for
the non-competition period unless Solvay waives the application of the clause. This indemnity, if due by the Company, is included in thetermination indemnity, from which it shall be deducted.
In the event that Solvay terminates the employment contract of the CPO (Mr. Mark Van Bijsterveld) he will receive a severance package equal tothe higher of the statutory transition payment according to Dutch law or 12 months gross salary (the basis for the calculation of this severance
package is the annual gross salary and the average of the STIs received in the past three years). His employment contract provides for a noncompetition period of 12 months after termination.
In the event that Solvay terminates the employment contract of the COO (Mr. Lanny Duvall), the legal system according to Belgian law applies.
A non-competition period of 12 months after termination applies, with an indemnity equal to the higher of (i) 60% of his gross remuneration(including fixed remuneration, non-fixed remuneration, and benefits) and (ii) 80% of the gross fixed remuneration (if Solvay does not waive theapplication of the clause).
In the event that Mr. Philippe Kehren resigns, he has to respect a notice period of six months. In the event that Mr. Alexandre Blum, Ms. Lisa
Brown, and Mr. Mark Van Bijsterveld resign, they have to respect a notice period of three months. In the event that Mr. Lanny Duvall resigns,
Belgian law applies.
All ELT members are subject to the non-competition agreements described above in the event of resignation, unless Solvay waives theapplication of the clauses.
In the event of a change in control over the Company, Ms. Lisa Brown may terminate the management agreement with three months noticeto the Company within six months after the occurrence of such change in control. In such event, she will receive a termination indemnity at thesame conditions as in case of termination by Solvay (the non-competition indemnity, if due by the Company, is included in the terminationindemnity, from which it shall be deducted).

7. MAIN CHARACTERISTICS OF RISK MANAGEMENT, INTERNAL CONTROL AND
INTERNAL AUDIT
7.1. Roles and responsibilities
Solvay leaders and managers are accountable for ensuring the adequacy of the risk management and internal control framework in their respective
Global Business Units (GBUs) and Functions.
The Internal Audit and Risk Management department (IA/RM) organizes internal audit, internal control and risk management activities in a global
assurance function to strengthen the efficiency and effectiveness of the risk management and internal control systems.
The Risk Management and Internal Control teams provide advice and ensure that leaders address the challenges at stake. They are in chargeof setting up and maintaining a comprehensive and consistent system for risk management and internal control across the Group, which is
independently reviewed by the Internal Audit team.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

CORPORATE GOVERNANCE STATEMENT

133

TITLE INFOGRAPHIC

Independent review ofthe system
Feedback on levelof control

Internal Audit

Audit Plan

Sharedframework

Recommendations

Procedure
and controls

Risk Management

Control on risks

Internal Control

Risk identification
and assessment

Process risks

Internal Control Design
and implementation

The extent to which Solvay is willing to take risk in pursuit of the Group’s business strategy and the objective to create shareholder value is definedand managed by a number of qualitative and quantitative measures such as limits, triggers and indicators according to its risk appetite. The IA/
RM department communicates directly with the Audit and Risk Committee on a regular basis to ensure that risk management activities by Solvay
management are aligned with the Board.
Solvay has set up an internal control system designed to provide reasonable assurance that:· current laws and regulations are respected;· policies and objectives set by general management are implemented;· financial and extra-financial information is accurate; and· internal processes are efficient and effective, particularly those contributing to the protection of Solvay’s assets.
The five components of the internal control system and the role of internal audit as an independent assurance provider are described below.

7.2. The control environment
As the foundation of the internal control system, the control environment reflects the tone from the top, thus promoting awareness and compliant
behavior among all employees. Its various elements create a clear structure of principles, rules, roles and responsibilities, while demonstrating
management’s commitment to compliance.
· The Code of Business Integrity is available on Solvay’s website. It refers to underlying policies and procedures. Employees regularly receive
training on the Code. More information can be found in the Extra-Financial Statements section of this report.
· An Ethics Hotline, managed by a third party, enables employees to report potential Code of Business Integrity violations if they cannot approach
their managers or the compliance organization, or if they wish to remain anonymous. More information can be found in the Extra-Financial
Statements section of this report.
· Standardized processes and controls, including delegations of authority and signature rules, as well as the application of the segregation of duties
principle, are in place for financial and non-financial activities and transactions.

7.3. The risk assessment process
The Group-wide risk management process takes into account the organization’s strategic objectives and is structured into the following phases:· Risk analysis (identification and evaluation), risk assessment and decision on how to manage the critical risks· Implementation of mitigation plans with risk owners accountable for delivery· Monitoring of risk mitigation plans to ensure adequacy and effectiveness

134

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

The Audit and Risk Committee meets with the CEO and all other members of the Board once a year to discuss and approve the major risks facing
the Group (“Group Risks”). During the year, the Audit and Risk Committee systematically reviews progress and regularly invites the relevant leaders
and risk owners to provide overviews of their risk assessments and progress on mitigating actions. In accordance with the defined Group Risks,
topics such as industrial safety, physical security, cybersecurity, ESG-related subjects, or ethics and compliance matters are addressed.
More information on Enterprise Risk Management, including a description of the Group’s main risks and the actions taken to avoid or mitigate themat different levels in the organization can be found in the Risk Management section of this report.

7.4. Control activities
Solvay uses a systematic approach to design and implement internal control activities for the Group’s most relevant processes. It includes a risk
assessment step to define the key control objectives for processes at corporate, global shared services platforms named Global Business Services(GBS), Global Business Unit (GBU) and site level to ensure the production of reliable Financial Statements. Under the sponsorship of the CFO, a
network of corporate process owners and GBU representatives has been set up to promote an internal control system tailored to the risks of each
GBU and corporate function.
Following the risk assessment phase, the controls are designed and described by the corporate process owners with the support of the Internal
Control team. The control descriptions are used as a reference for the internal control roll-out and assessment across the Group. At each level in theorganization, the manager in charge of the process is responsible for control execution.
Solvay implements policies and processes applicable to all employees in the following financial domains: management control, financing and cash
flow; financial control; financial communication; tax and insurance policies. Control activities are defined for all of these financial processes and for
major Group-wide projects, like acquisitions and divestitures. Furthermore, an online Financial Reporting Guide explains how the IFRS rules should
be applied throughout the Group.
Financial elements are consolidated monthly and analyzed by Controlling teams at all levels in the organization, as well as by Group Accounting andReporting and the Executive Leadership Team. Elements are analyzed using plausibility and consistency checks, as well as various other methods,
such as variance analysis, ratio analysis and comparison with forecasts.
In addition to the monthly reporting analysis, the Executive Leadership Team thoroughly reviews GBU performance every quarter in the context ofbusiness forecast reviews.

7.5. Internal control monitoring
The Audit and Risk Committee monitors and assesses the effectiveness of the internal control system. It supervises the work of the Internal Audit
and Risk Management team relating to financial, operational and compliance monitoring. It is kept informed of the scope, programs and resultsof internal control testing, internal control self-assessments, and internal audit work. It also verifies that audit recommendations are properly
implemented (for additional information on the work of Internal Audit see section below). The role and responsibilities of the Audit and Risk
Committee are detailed in the Audit and Risk Committee Charter included in the Governance Charter.
Besides that, the Ethics and Compliance department coordinates investigations of potential Code of Business Integrity violations. More informationon the work of the Ethics and Compliance department can be found in the Extra-financial Statements section of this report.

7.6. Information and communication
Group-wide information systems are operated by the IT department. A large majority of Group operations are supported by a small number ofintegrated Enterprise Resource Planning (ERP) systems. Financial consolidation is supported by a dedicated tool.
Financial reporting procedures and internal controls ensure that all material information disclosed by Solvay to investors, creditors and regulators
is accurate, transparent and timely, and that it fairly represents the Group’s most relevant developments, financial fundamentals and performance.
The Group Accounting and Reporting department provides detailed written instructions to all financial actors involved before each quarterly
closing.
The publication of the quarterly financial results is subject to various review and approval steps:· The Investor Relations team designs, develops and issues messages and information about the Group with the needs of financial markets in mind.
It does so under the supervision and control of the Executive Leadership Team.
· The Audit and Risk Committee ensures that financial statements and communications by Solvay SA and the Group conform to generally accepted
accounting principles (IFRS for the Group, Belgian accounting law for Solvay SA).
· The Board of Directors approves the consolidated periodic financial statements and those of Solvay SA (quarterly, semi-annual and annual) andall related communications.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

CORPORATE GOVERNANCE STATEMENT

135

7.7. Internal Audit
The Internal Audit team provides risk-based, independent and objective assurance to enhance and protect the organization’s value. It uses a
systematic and methodological approach to evaluate and improve the effectiveness of governance, risk management, and internal control
processes and procedures, helping the organization accomplish its objectives.
The team performs internal audit assignments across the entire Group on the basis of its Audit Charter and the risk-based annual internal audit
plan approved by the Audit and Risk Committee. The audit plan takes into consideration internal and external data, risk factors and benchmarks.
It includes both entity-level audits and group-wide transversal assignments to address the Group’s main risks, which are identified as part of theenterprise risk management process. Internal Audit aims to inspect consolidated entities within the Group at least every five years.
The assignments are scoped, planned and defined on the basis of a risk analysis focusing on key risk areas. It is the management’s responsibility
to ensure that internal audit recommendations are translated into action plans and implemented. The implementation status is monitored by theInternal Audit team and reported to the Executive Leadership Team, senior management, and the Audit and Risk Committee on a regular basis.
In 2023, the Internal Audit team conducted 17 assignments across all Solvay regions relating to the efficiency of operations and internal controls, aswell as to governance, compliance, business integrity, ESG, safety of operations, information security and value protection topics.
The Head of Internal Audit and Risk Management reports to the Chief Financial Officer and maintains reporting relationships with the Chair of
the Audit and Risk Committee and the CEO. She attends all Audit and Risk Committee meetings and periodically presents an activity reportsummarizing audit missions performed, the follow-up of recommendations and the annual audit program. She has direct access at all times to the
Chair of the Audit and Risk Committee and the CEO.

8. EXTERNAL AUDITThe audit of the Company’s financial situation, financial statements, extra-financial statements and the conformity of these statements – and theentries to be recorded in the financial statements in accordance with the Code of Companies and Associations and the bylaws – are entrusted to
one or more auditors. The auditors are appointed at the Annual Shareholders’ Meeting and chosen from among the members, either natural or
legal persons, of the Belgian Institute of Company Auditors.
The responsibilities and powers of the auditor(s) are set by law.
· The Annual Shareholders’ Meeting sets the number of auditors and their emoluments in accordance with the law. Auditors are also entitled toreimbursement of their travel expenses for auditing the Company’s sites and administrative offices.
· The Annual Shareholders’ Meeting may also appoint one or more alternate auditors. Auditors are appointed for three-year renewable terms,
which cannot be revoked by the Annual Shareholders’ Meeting without good reason.
· The Audit and Risk Committee assesses the effectiveness, independence and objectivity of the external auditor with regard to the:-content, quality and insights provided in key external auditor plans and reports, in particular those summarizing audit work performed onrisks identified by the Company
engagement with the external auditor during Committee meetings
robustness of the external auditor in their handling of key accounting principles
provision of non-audit services

For the year ending December 31, 2023, professional services were performed by Ernst and Young Réviseurs d’Entreprises SRL, duly incorporated
and validly existing under the laws of Belgium, whose registered office is at Kouterveldstraat 7b, 1831 Diegem, Belgium, registered in the registerof legal entities of Brussels under business registration number 0446.334.711, and their respective affiliates.
The yearly 2023 audit fees for Solvay SA were set at €1.3 million. They include the audit of the statutory and consolidated accounts of Solvay SA.
Audit fees for Solvay affiliates in 2023 amount to €2.2 million. Additionally, audit fees for affiliates that were discontinued as a result of the Syensqo
Group demerger amount to €2 million. Supplementary non-audit fees of €3.5 million were engaged in 2023 by Solvay SA and affiliates (out of
which €0.5 million non-audit services for affiliates that were discontinued as a result of the Syensqo Group demerger) of which:· Other assurance service missions:Invoiced by the statutory auditor of the Group: €2.8 million.
Invoiced by other EY entities: €0.4 million.
· Other services: €0.3 million.
The Ernst & Young mandate has started at the date of the Shareholders’ meeting of May 10, 2022. EY is the statutory auditor of the company for aduration of three years, ending after the Ordinary Shareholders’ Meeting of 2025, which will be called upon to approve the accounts for the year
2024.

136

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

9. DEVIATION FROM THE 2020 CODE
The Company deviates from Rule 7.6 of the Corporate Governance Code which recommends that a portion of the remuneration paid to nonexecutive directors be in shares. The Company considers however that its remuneration practices remain relevant and comply with the spirit ofRule 7.6 because non-executive directors are required to hold a number of Company shares equivalent to 100% of their gross annual fixed board
fees.
For further details, please see section 6 of the Corporate Governance Statement.

10. ITEMS TO BE DISCLOSED PURSUANT TO ARTICLE 34 OF THE BELGIAN ROYALDECREE OF NOVEMBER 14, 2007
According to Article 34 of the Belgian Royal Decree of November 14, 2007, the Company hereby discloses the following items:

Capital structure
As of December 31, 2023, the capital of the Company amounted to €236,583,447.18, represented by 105,876,416 ordinary shares with no designatedpar value, fully paid up.
All Solvay shares are entitled to the same rights. There are no different classes of shares.

Transfer of shares and shareholders’ arrangements
Solvay’s Articles of Association do not contain any restriction on the transfer of shares.
To the Company’s knowledge, there are no binding agreements among shareholders relating to the Company that may result in restrictions on thetransferability of the Company’s shares, or the exercise of voting rights. However, the Company is informed that certain individual shareholders who
hold shares directly in Solvay may decide to consult one another when questions of particular strategic importance are submitted by the Board of
Directors to the Shareholders’ Meeting. Each of these shareholders, however, remains free to vote as he or she chooses. None of these individuals,
either individually or in concert with others, reaches the initial 3% transparency notification threshold (as Solvay has not been notified of any suchholding).
Solvay is not aware of any voting agreements among our shareholders or of the existence of a concert between our shareholders.

Holders of securities with special control rights
There are no such securities.

Control mechanism of any employee share scheme where the control rights are not exercised directly by theemployees
There is no employee share scheme with such a mechanism.

Restrictions on the exercise of voting rights
Each Solvay share entitles its holder to exercise one vote at shareholder Meetings.
Article 10 of the Company’s Articles of Association provides that the exercise of voting rights and other rights attached to shares that are jointly
owned, or of which the usufruct and bare ownership rights have been separated or are pledged, are suspended pending the appointment of asingle representative to exercise the rights attached to the shares.
The voting rights attached to the shares in Solvay held by Solvay Stock Option Management, a wholly-owned indirect subsidiary of the company,
are, as a matter of law, suspended.

Appointment, renewal, resignation and dismissal of directors
The Articles of Association of the Company provide that the Company is to be managed by a Board of Directors composed of no less than fivemembers, their number being determined by the Shareholders’ Meeting (Article 12). Directors are, in principle, appointed by the Shareholders’Meeting for four years, and may be reappointed (Article 13).
The Board of Directors submits directors’ appointments, renewals, resignations or dismissals to the Ordinary Shareholders’ Meeting for approval.
The Ordinary Shareholders’ Meeting decides on proposals made by the Board of Directors on this matter by a simple majority.
If a directorship becomes vacant during a term of office, the Board of Directors may appoint a new member, subject to ratification at the next
Ordinary Shareholders’ Meeting.

Amendment of Solvay’s Articles of Association
Amendments to the Company’s Articles of Association must be submitted as a resolution to the Shareholders’ Meeting, at which at least 50% of theshare capital of Solvay must be present or represented. In principle, amendments must be passed by a 75% majority of the votes cast.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

CORPORATE GOVERNANCE STATEMENT

137

If the attendance quorum is not met at the first Extraordinary Shareholders’ Meeting, a second Shareholders’ Meeting may be convened and willtake a decision without any attendance quorum requirement.
For certain other matters, such as amendment of the purpose of the Company, higher voting majorities may apply.

Powers of the Board of Directors
The Company has adopted a “one tier” governance structure whereby the Board of Directors is vested with the power to perform all acts that arenecessary or useful for the realization of the Company’s corporate purpose, except for those actions that are specifically reserved by law or the
Articles of Association to the shareholders’ meeting.
On December 9, 2023, the Board delegated certain powers to the ELT. Such delegations of powers are reflected in the Governance Charter.
In all matters for which it has exclusive responsibility, the Board of Directors works in close cooperation with the Executive Leadership Team, which,in particular, is responsible for preparing most of the proposals for decisions made by the Board of Directors.
The Extraordinary Shareholders’ Meeting of December 8, 2023, granted the following authorizations to the Board of Directors:· Authorized capital:-

Authorization to increase the capital pursuant to Articles 7:198 and following of the BCCA, in one or several instances, for a period of five(5) years, up to a maximum of €23,650,000 (excluding any issuance premium).
Authorization to increase the capital in the event of a takeover bid on Solvay, in one or several instances, for a period of two (2) years,
under the conditions and within the limits set out in the new Article 8 of the Articles of Association and Article 7:202 of the BCCA.

· Acquisition, disposal and cancelation of own shares:---

Authorization to acquire and pledge, for a period of five (5) years, own shares at a unit price which may not be lower than one euro (€1.00)
and which may not be higher than ten percent (10%) higher than the highest price of the last twenty (20) trading days preceding the transaction, without Solvay at any time holding more than ten percent (10%) of the total number of shares issued.
Authorization to acquire and pledge own shares when such acquisition or pledging is necessary to prevent serious and imminent harm to
Solvay, including in case of a public takeover bid on Solvay, for a period of two (2) years, in accordance with Article 7:215, §1, paragraphs
four and five of the BCCA.
Authorization to dispose of own shares to one or more specified persons other than employees, subject to the conditions and within thelimits set out in Article 7:218, §1, 4° of the BCCA.
Authorization to dispose of own shares in order to prevent serious and imminent harm to Solvay, including in case of a public takeoverbid on Solvay, for a period of two (2) years, in accordance with Article 7:218, §1, 3° of the BCCA.
Authorization to cancel, at any time, treasury shares and to amend the Articles of Association to reflect the reduction of the total numberof shares of Solvay.

Significant agreements or securities that may be impacted by a change of control of the company· Separation Agreement dated December 4, 2023
In the context of the Partial Demerger, Solvay and Syensqo entered into a separation agreement governing certain matters relating to theseparation of Syensqo from Solvay and prior reorganization transactions, and the relationship of Solvay, Syensqo and their respective affiliates
as from the effective date of the Partial Demerger, and implementing certain additional arrangements relating thereto, including certain
cross-indemnification undertakings related to environmental liabilities (the “Separation Agreement”). Under Section 4.2 of the Separation
Agreement, Syensqo has the right to terminate (for the future) its indemnification undertakings towards Solvay for environmental liabilities
allocable to Syensqo for which Solvay would remain liable notwithstanding the Partial Demerger, in the event of a change of control over Solvay(defined as the case where a third party reaches or crosses, alone or in concert, the threshold of 25% of voting securities of the Company,irrespective of whether this threshold is reached or crossed as a result of an acquisition of voting securities or otherwise, and subject to certain
exceptions relating to Solvac). The change of control clause was approved by the Extraordinary Shareholders’ Meeting of December 8, 2023.
· U.S. Tax Matters Agreement dated October 31, 2023
In the context of the Partial Demerger, Solvay and Syensqo entered into a U.S. tax matters agreement, governing the respective rights,
responsibilities and obligations of the Company and Syensqo with respect to certain U.S. tax matters, including with respect to U.S. tax liabilities(including, generally, responsibility and potential indemnification obligations for U.S. taxes attributable to each company’s business and taxes andlosses arising, under certain circumstances, in connection with the intragroup spin-off of certain U.S. entities (the “U.S. Spin-Off”) and the Partial
Demerger (and certain related transactions), U.S. tax attributes, U.S. tax contests and U.S. tax returns (the “U.S. Tax Matters Agreement”). Under
Section 3.02 of the U.S. Tax Matters Agreement, the Company may be required to indemnify Syensqo or Solvay Holding, Inc. for certain adverse
U.S. federal income tax consequences that may result from (i) certain future actions or omissions that could reasonably be expected to cause thePartial Demerger or the U.S. Spin-Off (or certain associated transactions) to fail to qualify for their intended U.S. tax treatment, including actions oromissions which lead to or may lead to a change of control over the Company (within the meaning of Article 1:14 and following of the BCCA), or(ii) the acquisition by one or more persons of a 50% or greater interest (measured by vote or value) in the capital of the Company, including for the
avoidance of doubt pursuant to a takeover bid (even if Solvay does not participate in or otherwise facilitate the acquisition). The change of control
clause was approved by the Extraordinary Shareholders’ Meeting of December 8, 2023.

138

CORPORATE GOVERNANCE STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Agreements between the Company and its directors or employees providing for compensation if directors resign orare good leavers, or in the case of a public takeover bid
Not applicable.

RISK MANAGEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

06

RISK
MANAGEMENT

XX	
140	
A 1.
new
Risk
chaptermanagement
processXX
Mastering
the Essential
XX140	Unlocking1.1. Riskvalue
analysiscreationand decisions on
how to manage critical risks
140
1.2. Risk management in action
141 Profile
1.3. Crisis
preparedness
XX	
& Key
figures 2023
XX
Global reach, close to our customers
2.infographic
Solvay’s main risks
XX142 KPIs
144
2.1. Compliance and business integrity
146
2.2. Security
2.3. Operations safety
XX148 Governance
150 New
2.4.
Climatechange independent
XX	
Board
of Directors:
152	
2.5.
Environmental impact andanddiverseXX	Ourcontroversies
Executive Leadership Team153	
2.6. Geopolitical
onand
trade andembodies
collectiveimpacts
expertise
supply leadershipchain
visionary153	2.7. Digital and people transformationXX	
154 Our
3. people
Other risks
underpin our
154 ambition
3.1. Marketandandfuture
growth-strategic
successrisk
155	3.2. Supply chain and manufacturing
reliability risk
3.3. Financial
XX155 Highlights
ofriskthe year157
3.4. IT risk

158

4. Litigation

139

140

RISK MANAGEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Risk management
In a context of elevated global economic and geopolitical uncertainty, increasingly volatile market cycles, supply chain constraints, and heightened
sensitivity and expectations related to climate change and sustainability, we believe that effectively monitoring and managing risks is key toachieving Solvay’s strategic objectives.

1. RISK MANAGEMENT PROCESS
Value can be created when risk is well understood and managed. Anticipating, mitigating, measuring, and monitoring risks is as important to Solvay
as the related activity of identifying, managing, and optimizing opportunities. The extensive risk-related processes that we apply to everyone acrossthe entire organization and value chain, from the Board of Directors and frontline workers to supply chain partners and customers demonstrates
this. These processes are outlined below.

1.1. Risk analysis and decisions on how to manage critical risks
We analyze risks in three steps. First, we establish their level of priority for Solvay, which means categorizing them as “main risks” (most critical),“emerging risks,” or “other risks.” Second, we identify in which area the risk would have the most impact: the environment, people, economic, or
reputation. And third, we classify risks according to their time horizon: short term (up to one year), medium term (more than one year and less thanfive), and long term (more than five years).
In accordance with the Task Force on Climate-related Financial Disclosures (TCFD), the EU Taxonomy frameworks and upcoming Corporate
Sustainability Reporting Directive (CSRD) requirements, we also assess and categorize our main risks as “Environmental (E),” “Social (S)” or“Governance (G),” where applicable.

1.2. Risk management in action
Solvay’s Enterprise Risk Management methodology, which is inspired by the Committee of Sponsoring Organizations (COSO) principles, requires ourGlobal Business Units (GBUs) and Functions – and the Group as a whole – to prioritize risks, develop and deliver on mitigation plans, and continuallyscan the environment to assess whether risks and exposures are changing and test whether priorities and plans remain appropriate. This process is
closely followed by the Risk Management team, with systematically recorded assessments enabling us to monitor decisions and measure actions andprogress.
The process we use is regularly adjusted, in order to constantly improve the identification and classification of risks. In 2023, we generalized the useof a systematic classification process to help us integrate ESG risks into our Enterprise Risk Management methodology, by establishing a catalog
of typical ESG risk categories. This tool embeds typical risks for climate change adaptation and climate change mitigation risks following the TCFD
framework. It also comprises items from the European Sustainability Reporting Standards, at the time when drafts were available for the risk review
exercise in 2023. This enabled us to further improve the completeness of our ESG risk universe.
Critical risks for the Group are closely and systematically monitored by the Group Risk Committee, which ensures that these risks are assessed formateriality and adequately addressed. The Committee is composed of the Executive Leadership Team (ELT), establishing a direct link between theGroup’s strategy and the risk management process, the Chief Sustainability Officer, the Senior Vice President of Communication and Public Affairs,
and the Capital Markets Director. Group Risk Committee meetings are facilitated by the Head of Internal Audit and Risk Management.

Global Business Unit and Function leaders integrate risk management into decision-making to support delivery ofobjectives
Leaders of GBUs and Functions are responsible for identifying, monitoring, and managing the key risks in their scope of responsibility. Risk
management is embedded in the day-to-day operations of each entity, and operational managers are expected to anticipate and react rapidly
when circumstances change. The GBU risk matrices and follow-up actions needed to mitigate any critical risks are formally presented to the ELT.

Group risks are overseen at Executive Leadership Team level
Group-level risks are managed and monitored at the top level. The Group Risk Committee contributes to identifying and assessing risks and the ELT
members act as risk sponsors contributing to risk treatment and response. Board Members also provide independent input based on their broad
expertise. Additional input may be provided by the Corporate Internal Audit and Risk Management Department, which scans external sources,
such as the World Economic Forum Global Risks report, the Risk in Focus report from the ECIIA1, the AXA Future Risks Report, or the Economist
Intelligence Unit Risk Outlook for relevant information. In principle, this input is reviewed and validated by the ELT once a year, while risk-mitigating
initiatives are presented at least twice a year. More frequent updates are prepared and reviewed when necessary.
1. European Confederation of Institutes of Internal Auditing

RISK MANAGEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

141

The Audit and Risk Committee meets with the CEO and CFO as well as all other members of the Board once a year to discuss the major risksfacing the Group. During the year, the Audit and Risk Committee systematically review progress and regularly invite the relevant leaders and Risk
Owners to provide overviews of their risk assessments and progress on mitigating actions. In accordance with the defined Group risks, topics suchas industrial safety, physical security, cyber security, ESG-related subjects, or ethics and compliance matters are addressed.

SOLVAY’S RISK MANAGEMENT PROCESS
Risk analysis and decision

Board

Audit and Risk Committee

Gather input through periodic survey onGroup risks

Gather input through survey ordedicated session on Group risks·Group Risk Committee*

Executive Leadership Team
(ELT)

GBUs and Functions·

Contribute to identifying andaddressing risks.
Decide upon definition of Grouprisks

Provide input on Group risks
establishing a direct link between
the Group strategy and the risk
management process·

Define risks at business andfunction levels·

Escalate critical risks to Group level

Implementation

–

–

–

Monitoring·

Annual Group risk assessment andapproval···

Assess effectiveness of risk management
Quarterly presentations by risk owners
Periodic review (minimum biannually)
and assessment of Group risks (minimum annually)·

Annual Group risk assessment andreview of mitigating actions based onGroup risk dashboards··

Oversee progress as individual risk sponsors
Ad-hoc risk sessions and biannual review of mitigating actions based onGroup risk dashboards·

Mitigation plan developed with risk owners accountable for delivery··

Ongoing systematic progress update
Regular update (minimum twice per year) and disclosure to ELT (at least
annually)* The Group Risk Committee comprises the Executive Leadership Team (ELT), the Chief Sustainability Officer, the Senior Vice President of Communication and Public Affairs
and the Capital Markets Director.

Management of major projects linked to Solvay’s transformation
An appropriate risk assessment methodology is applied to significant transformation initiatives. This was, amongst others, the case for the
successful Partial Demerger project, splitting the Group into the two independent publicly traded companies Solvay and Syensqo, for which a
distinct organization and governance structure had been implemented and a dedicated risk identification, mitigation, and monitoring process had
been established.

Internal control
Internal control is a key aspect of risk management. The Corporate Governance chapter of this report provides a detailed description of Solvay’s risk
management and internal control system (see chapter 6).

1.3. Crisis preparedness
There is a structured network within the Group to ensure crisis preparedness. Members of this network perform tasks and implement programs inorder to ensure that their business units and functions are prepared for specific crisis situations. These programs include crisis simulations, media
training for potential spokespersons, maintenance of key databases, and analysis of relevant internal and external events. The risks identified using
our Enterprise Risk Management methodology influence the scenarios used in our simulations.

142

RISK MANAGEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

2. SOLVAY’S MAIN RISKSThe Group Risk Committee assesses the risks against two dimensions: the level of impact and the level of control.

Level of Impact
To assess the impact, we use a four-level scale: low, medium, high, or very high.
ImpactLow

MediumHigh

Very highEconomicLess than €10 million€10 million to €50 million€50 million to €100 million€100 million or more

Injury to people

Nuisance(noise, smoke, odor)

One or multiple first aid injuries
or shelter-in-place

One irreversible injury or
multiple reversible injuries

One or multiple fatalities ormultiple irreversible injuries

Reputation

A specific impact scale is used for reputation since 2023 - see details below

Environment

Non-reportable
operating permit limits
exceeded···

Damages limited to theimmediate vicinity of thesite·

Minor impact on plants oranimals around the site

Reversible damages off-site·

Major impact on plants oranimals around the siteLong-term damages off-site(greater than or equal to ten
years)

A specific Reputation Impact Scale has been established following the type of stakeholders involved, grouped here as risk factors:

Risk factors

Potential impact·

Shareholders
perception··
Government/
political
intervention/
Regulators,
Supervisory
Authorities,
Judiciary

Internationalorganizations···

Business
partners,
contracting
parties

Financing
partners·

Obstacles tooperations or
projects
Regulatory
scrutiny
Litigation/Fines·

Point of time loss

·
·

·
·

Minor delay toprojects
Local authority
reminder of rules
Amount atstake < €10 million

·

·

High

Lower share pricefor a period
Activism without
large shareholder
base support·

Impairment tooperations or
projects with
by-pass solution
possible
Local authority
challenge€10m < Stake <
€50m

·

·

·
·

Very highContinued
share priceundervaluation
High profile
activism·

Significant
impairment tooperations or
significant delayof project
National level
litigation€50m < Stake <
€100m

·
·
·
·

Ban on operation
Asset seizure
National or
multinational
litigation
Stake> €100m·

Continued
share priceundervaluation
Shareholders’assembly
challenge

NegativereportingBlack lists·

Mention in a report·

Negative
depiction of thecompany·

Named andshamed atinternational
level

·

Blacklisting

Protests,
blockades
Compensations·

Limited social
media negative
item, without
physical protests·

Large and long
lasting social
media noise
Short or small
number ofphysical protests·

Extended social
media impact(national)
Demonstrations
blocking
operations·

Extended social
media impact(international)
Demonstrations
with attack on
our people orassets.

Negative
campaigning
PR costs··

Isolated news
Limited social
media

·

Local NGO
campaign ormedia news
Large social
media noise·

National NGO
campaign ormedia news
Extended social
media impact·

Global media/
campaign·

Termination
or rejection ofcooperation·

Minor cooperation
delayed·Significant
cooperation
delayed·Significant
cooperation
stopped·Major deal
broken·Limitation
or loss offinancing·

Minor issues with
suppliers·

Significant issue
with supplier orbank still withfinancing access·Significant loss offinancing·

Major loss offinancing···
NGO andmedia

Loss in value /share price
Activism

Medium··General public

Low

·

·

·

·

·

·

The impact assessment considers all relevant types of potential consequences and retains the highest level, which becomes applicable to the risk.

RISK MANAGEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

143

Level of control
The Group Risk Committee reviews and acknowledges the level of control over the main Group risks on the basis of a Group risk dashboard review
by considering the following questions:· Are key actions and controls clearly identified?
· Was the effectiveness of key actions and controls assessed?
· Was the level of control adequate and proportionate to the risk?
· Are additional mitigation actions appropriate?

Solvay’s main risks
To determine how critical a risk is, we combine the two dimensions described above, i.e. the level of impact and the level of control. All risks with avery high impact are considered to be critical, independently from their level of control.

Level ofimpact

ESG

Risk

Time
horizon

Trends of levelof control

G

Compliance andbusiness integrity

Short to medium

StableSecurity

Short

Very high

N/A

StableLink with high materiality sustainable
development aspects·

Management of the legal, ethics andregulatory framework·

Product quality and safety

Data security·
S

Operations safety

Short

StableE

Climate change

Short to long

StableE

Environmental impact
and controversies

Short to long

StableN/A

Geopolitical impacts on
trade and supply chain

Short to medium

StableS

Digital and People
Transformation

Short to medium

Under review(new risk)··

Critical incident risk management
Employee health and safety
Hazardous materials management·

Community relations·

Greenhouse gas emissions·

Physical impacts of climate change·

Critical incident risk management··

Air quality
Waste and wastewater management·

Employee engagement, diversity, andinclusion·

Labor practices

Short term ≤ 1 year < Medium term ≤ 5 years < Long term

The risks relevant to Solvay and the Group’s risk-reduction actions are listed below. The mitigation efforts described do not guarantee that risks will
not materialize or impact the Group, but they show how we proactively manage our exposure to risk.

144

RISK MANAGEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

RISK CORRELATION

Market or customer dependency

Innovation / new business failure

Chemical productregulation
Environment
impacts

Climate transition

Financial risks

Major projects
management

Industrial &transport safety

Business integrity
breachCybersecurity

Climate change
physical risks
Supply chain &Raw material

Exportcompliance
Geopolitical risks

Digital and people
transformation risk

Risks of different categories are often inter-connected, and these correlations are identified during the risk management exercises at GBU andGroup level.
Using such correlation analysis, it is possible to obtain a wider view of the potential consequences, and thus of the impacts of the risks, as wellas having a better grasp of the causes of the risks, and design more adequate mitigation strategies.
The chart above displays the correlation between the most relevant risks as presented in the following section of the annual report.
Risk categories
Climate risks

Financial risksMarket and growthCompliance and business integrity

Risks on operations

Environment

Main risk­

2.1. Compliance and business integrity
RISK HORIZON: SHORT TO MEDIUM TERM
TREND: IMPROVEMENT
2.1.1.

Risk description

Non-compliance (competition law, export control, anti-bribery, industrial) causes major financial and reputational damages.
A major violation of Solvay business integrity standards, linked to its operations and value-chain, leads to economic and/or reputational damages.
A forbidden or inappropriate use of our products creates personal or environmental damages, or major disturbances in downstream uses, leading
to legal consequences, financial losses, or loss of reputation.
Solvay adopts a zero-tolerance approach in relation to non-compliance with its Code of Business Integrity. Solvay’s activities require that thefollowing risk categories - among others - be considered in relation to compliance and business integrity:· Failure to comply with governmental laws and regulations in jurisdictions in which Solvay operates.
· Failure to comply with Solvay’s Code of Business Integrity, including:-intentional misconducts;
corruption, misappropriation;
by-passing corporate controls, and fraud.

· Human rights violations.
· Failure to implement good governance in a joint venture.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

RISK MANAGEMENT

145· Failure to comply with chemical product usage standards, such as:--

2.1.2.

Inappropriate use of a Solvay product by Solvay personnel or customers, which can lead to adverse health and environmental impacts,
property damage and resulting litigation.
Production of faulty products, which can result in exposure to liability for injury, health impairment and damage, or product recalls. Productliability risk is generally higher for products used in medical devices, healthcare, food contact and feed applications, and sensitive applications ingeneral.
Failure to comply with chemical and market regulations in countries where a product is sold. There are a lot of regulatory activities
worldwide, in particular, we are closely monitoring the upcoming European Union Chemical Strategy for Sustainability (CSS) regulatory
framework, including its possible impact on our business and operations and potential opportunities stemming from it. The U.S.
Administration is also developing a stricter regulatory framework for chemicals, as well as a framework relating to environmental justice.

Prevention and mitigation actions

Solvay’s Code of Business Integrity, policies, and procedures
Our Code of Business Integrity includes a wide range of topics, among those listed above. It applies to all employees and majority-owned joint
venture partners. Our Supplier Code of Business Integrity applies to suppliers.
We introduced training courses which all employees are required to attend and obtain a certificate of completion. We require that all employees
certify through an annual acknowledgement integrated in the Code of Business Integrity training that they have read and understood the Code,that they are in compliance with its requirements, and that they have nothing to report. We have created increased awareness through training
courses and communication to address specific behavioral risks. These include:· a culture of business integrity;· anti-bribery and anti-corruption;· anti-competitive activity;· confidential and proprietary information;· data protection and privacy;· reporting non-compliance with human rights in business policy;· use of a gifts and entertainment tracking system;· use of third-party reporting hotlines and a Group-wide “Speak Up” program to report non-compliance;· sanctions and export control.
Before entering into a business relationship, our suppliers are required to sign our Supplier Code of Business Integrity and commit to its principles.
In addition, we are increasing our oversight on third parties and suppliers in the field of human rights, anti-bribery and corruption, and environmental
breaches through proactive screening by third-party service providers. Human rights has now been integrated in our Ethics Helpline as a matter typeand is also open to the employees of our suppliers.

Product and markets regulated risks· Solvay Safety Data Sheets (SDS) ensure harmonized content by implementing a common worldwide SAP system for the Group. This SAP system
is fully implemented across the company.
· SDS are constantly maintained for all products and are distributed worldwide to all customers, in compliance with local regulations and in the local
language. Our GBUs ensure that SDS are revised at least once every three years for all the products they sell.
· All GBUs perform an annual inventory of Solvay – Substances of Very High Concern (Solvay – SVHC) – defined by Solvay, in the marketed products
and in raw materials. A risk assessment and analysis of any available safer alternatives is being performed for each Solvay - SVHC identified in theinventory of marketed products. Solvay also takes a phase-out approach on top of the analysis of safer alternatives.
· Recall procedures are developed and deployed as prescribed by the product stewardship programs.
· Insurance reduces the financial impact of a product liability risk, including first-party and third-party product recalls.

2.1.3.

Main developments in 2023

Business integrity
Mandatory annual training and certification ensures all Solvay employees know our Code of Business Integrity. We measure performance not only
by what people deliver, but also on how they deliver, in line with the Group’s values and behaviors.
In 2023 our training focused on protecting a culture of integrity at Solvay, on speaking up and listening, on non-retaliation, on data privacy, andon gifts, entertainment, and charitable donations. All employees are required to take the training and to certify that they have read the Code ofBusiness Integrity and will apply it.

146

RISK MANAGEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

We continued increasing awareness about speaking up and raising concerns when people notice a potential breach of regulation, our policies, or
our Code of Business Integrity, without fear of retaliation. Our Ethics Helpline was further upgraded and made more accessible in 2023, ensuringthat incidents can be easily reported and investigated as required. Fraud was added as a new topic to our Ethics Helpline. The Speak Up program
was also part of the annual mandatory training for all our employees, and we raised awareness amongst employees that they can speak up about
the full spectrum of topics referenced in the Code of Business Integrity. This resulted in a continued increase of reported incidents and increased
our ability to detect, identify, and address issues and risks at an early stage. The increase in reported incidents does not imply that there were more
incidents in 2023 than before, but shows that employees reach out more to report potential breaches, enabling us to investigate and address thosebreaches, identify root causes, adapt processes, or take disciplinary actions when necessary. Specific training modules for managers increased
awareness on their role in a culture of integrity and how to listen and act on employees' concerns.
To tackle human rights and environmental impacts across our upstream value chains, Solvay further improved our ESG risk management approachfor our supply chain. It provides a systematic approach for identifying risks and assessing their severity in more than 60 upstream value chains, andtriggers risk mitigation action plans. In 2023, we increased our efforts towards our suppliers to identify the human rights risks based on an internal
analysis by country and value chain and we started to work with an external provider to screen against adverse media. This allowed us to categorize
our suppliers in high, medium, and low risk clusters. Ensuring compliance with social and environmental standards, including respect for humanrights, in our supplier network is important to us.
We developed a new external Ethics and Compliance website that was launched in 2023, ensuring that information on the program, the Code ofBusiness Integrity, ethics and compliance policies, as well as our Ethics Helpline are available and easily accessible to employees and externals. This
increases awareness of Solvay's culture of integrity and the detection, identification, and addressing of potential issues and risks, as concerns or
potential breaches that relate to our supply chain can be reported by any third party, including by the employees of our suppliers, also on Human
Rights and Environmental violations. Reported incidents are investigated and preventive and corrective actions implemented when required.
In 2023, we also conducted an internal audit exclusively focused on ESG matters where we reviewed the commitment of our suppliers to our
Supplier Code of Business Integrity and also conducted a compliance audit on business integrity, bribery and corruption, and travel and expenses
in APAC.

Product and markets regulated risks
The Solvay Product Safety Management Process (PSMP) identifies risks relating to products marketed by Solvay. All GBUs use this process,which involves prioritizing the required risk assessments in the product portfolio and carrying out risk assessments for the most sensitive productapplications.
More information on this can be found in the Extra-financial chapter of the report: 5.5 Hazardous materials.

2.2. Security
RISK HORIZON: SHORT TERM
TREND: IMPROVEMENT
2.2.1.

Risk description

Certain security threats can have negative consequences for our business. These include terrorism, crime, violence, vandalism, theft, andcyberattacks, which impact employees or other stakeholders, sites, assets, critical information, or intellectual property.
Solvay is exposed to physical security risks because it has 45 industrial sites, a large part of which have a high Seveso level (number of sites
considered post Partial Demerger). A number of our products, if mishandled, can cause severe damage.
For more information on this, see the Extra-financial statements section of the report: 5.5 Hazardous materials.

We also have sites located in countries where security concerns are rated high by International SOS. Forty-five industrial and fourteen administrativeand R&I sites (number of sites considered post Partial Demerger) have undergone a Security Vulnerability Self-Assessment (SVSA) and only one
industrial site has been assessed as having the highest level of security risk – Level 1 – since the previous SVSA.
Solvay’s exposure to cyber risk, as for most major companies, stems from our extensive use of information and communication technologies and thegradually increasing automation level of our sites. Following the Partial Demerger, Solvay is also exposed to this risk in connection with major grouptransformations and reorganizations, as well as the services it provides to Syensqo under the Master Transition Services Agreement (MTSA). Like
most multinationals, Solvay experiences cyber incidents and actively responds to those incidents to limit the impact. The Solvay management teamis not aware of any incident that would have significant consequences for our financial statements or our business.

2.2.2.

Prevention and mitigation actions

Solvay has a risk-based security approach to protecting sites, information, and people.
· A Chief Security Officer (CSO) coordinates all security activities globally in order to ensure efficient security risk mitigation. A Chief Information
Security Officer (CISO), reporting to the Chief Security Officer, coordinates all related cyber security activities.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

RISK MANAGEMENT

147

Three governance bodies lead the security risk management effort:· A Security Board, chaired by an ELT member, which provides strategic direction for the Group’s security risk mitigation.
· A Cyber Security Leadership Committee, chaired by the Chief Information Security Officer, which oversees all cyber security activities and provides
budget and priority recommendations to the Security Board.
· A Security Coordination Working Group, chaired by the Chief Security Officer, which runs a continuous security threat monitoring program andan optimized security program for the Group.
Solvay management provides updates on information security to the Board at least once a year and even more frequently to the Audit Committee
and Risk Committee.

Cyber security program
The three governance bodies leading the security risk management effort also supervise our cyber security program, which includes:· The use of assessments conducted by external experts.
· The use of penetration tests and internal phishing simulations.
· Substantial training for all Solvay Global Business Services and Digital Technology (DT) professionals, and mandatory security training for all
employees.
· The regular publication of cyber security tips to increase employee awareness.
· Some significant improvements in security posture, which have been achieved by deploying enhanced security technology across the network. This
includes controls such as endpoint detection and response, multi-factor authentication, immutable back-ups and a stronger network segregation.
A significant cyberattack could negatively impact Solvay in many ways, including people, operations and results, and services we deliver to Syensqo
under the MTSA entered into in connection with the Partial Demerger, as well as know-how and intellectual property. We will therefore continue tosolidify our cyber defenses so that we are able to manage the evolving cyber threat landscape.

Insurance
Solvay is insured against the potential financial impact of a cyberattack. This insurance covers damage to assets, business interruption, ransomware,and third-party liability in case of loss of confidential third-party information. Solvay is also a founding member of MIRIS (Mutual of Cyber Insurance)that provides exclusive additional capacity and loss prevention advice to their members.

2.2.3.

Main developments in 2023

Our commitment to managing the security-related risks remains solid, guided by efficiency and by the belief that proactive measures are vital insafeguarding our assets and ensuring the resilience of our operations.
As we navigate the evolving threat landscape, we acknowledge the need for a security governance model that is aligned with the new organization.
Therefore, in anticipation of the challenges that lie ahead, we have defined a new governance model that is meticulously crafted to seamlessly
integrate with our business strategy, ensuring that security is not a standalone function. The collaboration is at the heart of our approach, encouraging
a culture where expertise from various facets of security converges to create a robust defense strategy.
Moreover, the year 2023 provided us with a unique opportunity to review and fortify our network segregation and access rights as well as revamping
our security awareness strategy.
In terms of personnel security, we ensured a greater visibility on business travel and set up active monitoring for all medium- and high-risk countries
where Solvay employees travel to in order to better anticipate threats and be able to alert accordingly. This was enabled by working on ourreporting tools as well as by reaching out to travelers individually to ensure that they have the necessary tools to receive live alerts in the unfortunate
event of a security-related incident.
Direct lines of communication have also been opened between Group Security and site managers, making an early warning system possible, andensuring greater reactivity at site level as well as at the Group Security level.
In 2023, Solvay kept the commitment of the previous years to enhance physical security measures, recognizing the importance of safeguarding
our assets and sensitive sites. We prioritized standardization to ensure a robust and consistent security infrastructure across all our facilities. Our
dedicated projects aimed at elevating security levels involved the integration of advanced surveillance systems, access control mechanisms, andintrusion detection technologies. We tailored our strategies and investments to create a layered defense that not only deters potential threats but
also promptly responds to any security incidents.

148

RISK MANAGEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

2.3. Operations safety
RISK HORIZON: SHORT TERM
TREND: STABLE
2.3.1.

Risk description

A major accident on site (occupational, process) or a chronic exposure of employees (industrial hygiene) causes fatalities, irreversible injuries,
environmental damages, or asset damages.
An accident off site (transportation, warehousing, tolling) causes fatalities/irreversible injuries or environmental damages.
The safety of our people is a core value for Solvay, as is specified in our Solvay One Planet sustainability roadmap. A major accident – whether
occupational, process, or transport related – that is linked to our internal or outsourced activities may cause human, environmental, or asset
damages, lead to significant exposure or cause injuries or fatalities. Solvay’s industrial sites, like most industrial operations, carry out high pressureand high temperature processes. We also use chemical substances that have risks associated with their chemical composition.
For more information about Solvay’s management approach, see the Extra-financial chapter of the report: 6.1 Employee Health and Safety, 6.2. Critical incident risk
management (process safety), 5.5 Hazardous materials.

We have identified four major operational safety risks:· An occupational safety incident which results in a fatality or irreversible (life-altering) injury.
· A severe process safety incident which results in fatalities, irreversible injuries, environmental harm, and/or loss of physical assets.
· Chronic exposure to occupational agents – chemical, physical, biological or psychological – known to cause work-related disease.
· A severe transport accident in connection with hazardous chemical transportation which results in irreversible injuries, fatalities, or environmental
damages.

2.3.2.

Prevention and mitigation actions

Solvay issued a new set of minimum requirements to create a shared understanding and approach to mitigating major operational safety risks. As
part of this approach, we also introduced a new way of working, including a more collaborative and supportive approach to health, safety, and theenvironment (HSE) across the Group.
Our HSE strategy is based on the following four levers:· Culture: Promoting a culture of safety for all employees and contractors.
· Continuous improvement: Utilizing networking, scaling best practices, common methods and tools, Solvay HSE minimum requirements, externalmonitoring, and benchmarking to improve our HSE performance. Sites are audited on Group HSE procedures at least once every five years.
· Competency: Ensuring all employees have the right level of knowledge and skills to put in place the HSE minimum requirements starting withthose working in key positions.
· Compliance: Detecting and mitigating regulatory and non-regulatory compliance issues, with a focus on priority risks, both in our operations andcommercialized products.

Occupational safety
Solvay has consistently prioritized occupational safety. Our efforts to create a safety culture where all employees work together and care for one
another are based on:· Solvay’s Safety Plan, which involves and engages all Solvay employees. It includes activities such as Safety Days, Leadership Safety Visits, BehaviorBased Safety programs, Safety dialogues, and Safety Culture training.
· The Solvay HSE minimum requirements for the Solvay Life Saving Rules (SLSR).
· The Creating Safety program for leadership teams, aimed at changing mindsets and behavior.
· A monthly review of occupational safety results by the relevant GBUs and at the Executive Leadership Team level.

Industrial hygiene and occupational health
Solvay has implemented a comprehensive approach to reducing risks in the workplace. Our approach includes:· Risk assessments and risk-based medical surveillance, using both qualitative and quantitative methodologies, with a focus on chemicals;· Pandemic preparedness and mitigation plans;· Human biomonitoring, when warranted;· Improving and adapting working conditions;· Deployment of a well-being at work program;· Promoting general physical and mental health;· Setting more conservative in-house exposure limits for critical substances.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

RISK MANAGEMENT

149

Process safety management
Solvay has created and uses a Process Safety Management System. Among other things, this system includes:· A preventative risk-based approach founded on systematic Process Hazard Analyses (PHA), and the identification of critical scenarios for which
mitigation action must be implemented in a committed time frame;· Management of changes (MOC);· A team of process safety experts trained to apply the PHA methodologies.

Transport safety
We have put in place a number of tools and procedures that allow us to identify and take action to mitigate transport-related risks. These include:· Qualification standards for carriers of dangerous goods;· Enhanced training where appropriate;· Implementation of safety procedures and guidelines;· Collection and sharing of lessons learned;· Providing emergency response hotlines worldwide and in many languages.

Environment
To mitigate environmental risks, the following minimum requirements must be respected:· The discharge of substances, wastewater, and atmospheric emissions from our plants must meet all applicable emission limit values.
· Waste must be disposed of using appropriate technologies and qualified companies.
· For the long-term release of potentially dangerous chemicals, risk assessments must be carried out on a periodic basis to ensure that the impact
on the environment or on the neighboring population falls within strict limits, determined by environmental quality standards or by exposure limits.

2.3.3.

Main achievements in 2023

Occupational safety· Successful implementation of Solvay Life Saving Rules at site level.
· Continuing deployment of our Safety Culture program (training and sharing). For example, training to avoid complacency and over-confidence
has been rolled out this year and in 2022.
· Systematic tracking and analysis of High Severity Potential (HSPo) events. These events, as well as other types of significant incidents in process ortransport safety, are subject to a root cause analysis.
More information can be found in the Extra-financial statements section of the report: 3.3. Health, safety and environment management and 6.1 Employee health andsafety.

Industrial hygiene
We continued to roll out SOCRATES (Solvay Occupational Risk Assessment Tool for Employees), reaching an 85% deployment rate in 2023. Thistool:
· provides easy access to industrial hygiene (IH) methods, tools, and databases;· enables consistent documentation of IH assessments;· enhances the traceability of potential exposure throughout a person’s working life.
More information can be found in the Extra-financial statements chapter of the report: 3.3. Health, safety and environmental management and 6.1 Employee health andsafety.

Process safety· Application of Process Safety Management Audit protocol at 20 sites (number of sites considered in post partial demerger scope).
· Process Hazard Analyses carried out for 98% of all units, at all sites, within the last five years (Group requirement).
· All detected high-risk situations are treated within one year, with any extensions having to be duly authorized. Only three situations at one site havebeen granted such an extension and with compensating measures implemented in the interim.
· Investigation of a selection of Process Safety Incidents and lessons learned shared with all sites.
More information can be found in the Extra-financial statements chapter of the report: 6.2. Critical incident risk management.

Transport safety· Improvement of our Group processes on qualification/vetting and selection of logistics service providers for dangerous goods, including tollingand storage operations has been finalized.
· Continued application of a global Transport Emergency Response covering Level 1, Level 2, and Level 3 in all countries.
· Continued development of expertise in transport safety through the following activities:-

Global Transport Safety Network;
feedback on transport accidents;
regular training of people involved in the transportation of dangerous goods with connection to supply chain, global business units, andcorporate, following best international practices.

150

RISK MANAGEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3More information can be found in the Extra-financial statements chapter of the report: 6.2. Critical incident risk management.

Environment· Detailed annual reporting of environmental emissions (air and water), water management, and waste. We focus on emissions of Substances ofVery High Concern (SVHC) in particular, which are tracked and used for regular exposure assessments. We have also defined internal emission
reduction targets for SVHC emissions in air and water.
· Reporting of all types of environmental non-compliance, including any occasions in which we have exceeded emission limits due to a process
issue or process safety incident.
· Assessing potential climate change impact on our operations due to flooding, water scarcity, hurricanes, and other environmental events, throughthe application of best-in-class models and collaboration with external experts. See more detailed information in the following section 2.4 Climate
Change – physical risk
More information can be found in the Extra-financial statements chapter of the report: 5.3. Air quality, 5.1. Water and wastewater, 5.2. Waste.

Occupational health
Deployment of a global program for health and well-being at work that includes:· Monitoring indicators;· End-of-year survey on well-being at work to help us set action plans;· Quarterly pulse surveys to help us understand the psychological climate at Solvay;· Training on resilience offered to all employees;· Training for managers on “Leading on well-being mindset;”· Stress management training facilitated by internal trainers;· Communication campaigns on Health Promotion;· Inclusion of health and well-being in site Health and Safety Days.
More information can be found in the Extra-financial statements chapter of the report 6.1 Employee health and safety.

2.4. Climate change
RISK HORIZON: SHORT, MEDIUM, AND LONG TERM
TREND: IMPROVEMENT
2.4.1.

Risk description

The Group strategy to address climate-related risks, as defined by the Task Force on Climate-related Financial Disclosures, could be ineffective anddamage the environment, the lives of current and later generations, and Solvay’s reputation. This, in turn, could cause business losses, undervaluationand difficulties in attracting long-term investors. The possible risks to Solvay that we have identified are as follows:

A - Transition risks:
As we embark on a transition path, more transition risks will materialize which will have strategic implications for the Group. Solvay’s energy mix (whichuses coal, our raw materials (including petrochemicals) and our end markets (including the automotive, aerospace, and building and constructionindustries) mean that it is exposed to risks and opportunities as part of the energy transition. These transition risks include the following:· Policies and legal context: regulations and actions to limit CO2 emissions, such as increasing carbon taxes, barring internal combustion engines,
mandating the use of certain fuel types, and tightening environmental standards;· Technology: unsuccessful investment in new, lower-emission technologies;· Markets: failure to adapt to changing customer behavior;· Financial: inability to cope with the influence of climate change on investors’ and lenders’ decisions;· Changed climate: failing to adequately anticipate the impact of upcoming changes on industrial operations and in the value chain or the tighteningof environmental standards;· Reputation: negative stakeholder attitudes caused by failing to address stakeholder climate change concerns effectively.

B - Physical risks:
If we do not contain climate change, more physical risks will materialize. Those risks concern our assets and operations and will influence ourinvestment decisions.

Acute· Sites in flood zones;· Sites in drought zones;· Sites in cyclones and hurricanes regions.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

RISK MANAGEMENT

151

Chronic· Sites in water scarcity regions
More information on Transition risks and Physical risks can be found in the Extra-financial section 4.1 Climate risks analysis.

2.4.2.

Main developments and results in 2023

A - Transition risks:
The Sustainable Portfolio Management (SPM) global and systematic assessment helps alert our businesses to sustainability market signals, inparticular on climate risk and opportunities, to anticipate their impact and develop the right answers in a timely manner. SPM is a robust, fact-based,
future-oriented compass that allows us to take a snapshot of products’ sustainability risks and opportunities in their business environment.
SPM informs us about the contributions Solvay’s products make to sustainability along the value chain considering both:· their environmental manufacturing footprint and the associated risks and opportunities – vertical axis – with a quantitative assessment using
21 impact indicators; and· how their applications bring benefits or face challenges from a holistic market perspective – horizontal axis – with a qualitative assessment of socialand environmental topics covering four main themes, namely health and safety, climate change, resources, and opinion leaders.
For more details about SPM, see section 7.1 Product design and life cycle management and the SPM guide published on Solvay’s website.

Climate change is one of the focus areas for SPM assessment. This involves identifying if a product in a given application brings a climate change
benefit or challenge. Product-Application Combinations (PACs) that lead to benefits are identified as "climate solutions," while those that posechallenges are considered "climate challenges."
Solvay’s SPM tool classifies a sustainable solution as a product in a given application that makes a significant climate change contribution to thecustomer’s performance while also demonstrating a lower carbon impact in its production phase. The SPM methodology is also used to identify
eligible enabling activities, requested under the Taxonomy’s Delegated Act 2021.
For more details about Taxonomy reporting, see section 7.3 EU Taxonomy.

SPM is a key tool for enabling Solvay to integrate the sustainability dimension into strategic and operational decision-making in key businessprocesses, such as strategy, research and innovation, investment, marketing and sales, and mergers and acquisitions. We also apply the SPM tool
to strategic projects, using the same logic as for our portfolio, to make sure that these projects are heading toward business solutions that support
growth and value creation. This makes SPM a key tool for Solvay to identify if an investment or a strategic or innovation project can be considereda climate transition opportunity for Solvay.
Climate emissions reduction actions are described in detail in the Extra-financial section of the Annual Integrated Report. Among the numerous
actions taken is the following:· In Devnya, Bulgaria, we have adapted one of the existing boilers to increase its co-combustion rate with non-recyclable biomass. Powered by 30%
biomass fuel from a variety of sources, including locally-sourced sunflower husk pellets, it reduces our plant’s CO2 emissions by 20% from 2023.
See other examples and details in Greenhouse gas emissions section , 4.2.4 Key achievements of the Extra-financial statements.

B - Physical risks:
The current risk linked to floods and hurricanes is assessed annually with our insurers. This exercise identifies sites in risk areas with a maximum
foreseeable loss greater than $10 million. Five Solvay sites (number of sites considered in post Partial Demerger scope) are located in high frequency(2% chance per year) flood areas, with a loss expectancy range of $15-168 million. Nine Solvay sites (number of sites considered in post Partial
Demerger scope) are located in low frequency (0.2% chance per year) flood areas, with a loss expectancy range of $15-208 million. One site is
located in a wind-exposed area, with a loss expectancy of $16 million. Solvay has a damage insurance program in place to cover catastrophic risks,
while covering smaller losses through self-insurance.
A lot of prevention efforts have been deployed to protect sites against flood risks. These efforts have been concentrated on improving the humanprocedure in case of flood (risk assessment, flood emergency response) but also in physical protection. The Torrelavega site that was one of themost exposed is now out of the list thanks to a strong levee now surrounding the site. A plan has been developed for all sites to solve key exposures.
Sites in areas of water scarcity have been identified, and the risks have been assessed based on their water consumption and maximum foreseeable
loss. Fourteen Solvay sites (number of sites considered in post Partial Demerger scope) are located in areas subject to hydric stress, of which four
have been identified as having a high business impact. The highest annual business interruption value is €152 million.
More information can be found in the Climate change section , 4.1.2 Physical risks of the Extra-financial statements.

152

RISK MANAGEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

2.5. Environmental impact and controversies
RISK HORIZON: SHORT, MEDIUM, AND LONG TERM
TREND: IMPROVEMENT
2.5.1.

Risk description

Failure to meet evolving regulatory obligations and growing societal expectations related to human health and the environment, may lead tosignificant reputational damages, third-party claims, and liabilities.
Solvay’s activities impact the environment through:· our use of raw materials based on fossil or non-renewable resources and our consumption of energy;· our access to scarce resources, including water;· our management of waste, by-products, emissions, and effluents.
Solvay manages or remediates historical soil contamination at all sites for which we are responsible, including divested or discontinued operations(including, under the Separation Agreement entered into between Solvay and Syensqo, with respect to certain sites that became part of the
Syensqo group upon completion of the Partial Demerger), ensuring continuous compliance with the applicable environmental legislation. Moreinformation can be found in the Extra-financial section of the Annual Integrated Report.
These impacts on the environment, in turn, create the following risks:· Challenges and expenses related to meeting increasingly strict regulatory standards and changing customer expectations, standards, andpurchasing decisions;· Changes in investor sentiment and preferences as a result of the changing investor environment;· Impact on our ability to recruit employees due to negative public perceptions of environmental issues.

2.5.2.

Prevention and mitigation actions

Since 2021, an Environmental SteerCo meets quarterly and addresses all environmental topics, including remediation, operations, and potential
risks. Prevention and mitigation activities include:· Careful monitoring and management of sites with a history of soil contamination by a dedicated expert team. We follow up on approximately
150 locations across the world.
· Rolling out a risk characterization approach at every affected site, when relevant.
· Regulatory monitoring to proactively assess and address upcoming changes in legislation.
· Our Group strategy for managing chemicals of concern and developing alternatives with a reduced human and environmental impact, or phasing
them out completely.
We have also implemented a comprehensive program to reduce workplace chemical exposure using:· chemical risk assessments and risk-based medical surveillance, using both qualitative and quantitative methodologies;· pandemic preparedness and mitigation plans;· human biomonitoring, when warranted;· improving and adapting working conditions;· promoting general physical and mental health;· setting more conservative in-house exposure limits for critical substances.
We regularly review and update standards governing discharge from plants and we use our Sustainable Portfolio Management (SPM) tool to help
identify substances that can deliver the needed results but with a more limited environmental impact. We revise our materiality analysis on a yearlybasis to align with evolving stakeholder expectations, including environmental impacts.
Solvay is insured up to €200 million per claim and in the annual aggregate for unknown gradual pollution and sudden and accidental pollution.
Coverage includes defense costs, clean-up costs, and third-party liability.

2.5.3.

Main developments in 2023

We continued to execute our Solvay One Planet sustainability roadmap in 2023, featuring programs that:· identify substances of concern and develop alternatives, with a focus on Product Stewardship and industrial environmental emissions;· ongoing carbon neutrality ambition, with energy transition projects either completed or underway (more details in the extra-financial report forGreenhouse Gas emissions section 4.2 and Energy section 4.3);· focus on improving our investment portfolio with regard to water consumption, to meet our 2030 ambitions;· systematically collect fines and settlements received at our sites and quarterly reporting to the ELT;
· approve sustainable investment projects using a Solvay One Planet profile review;· identify and launch R&I projects that tackle potential risks;· reduce our pressure on biodiversity by 30% by 2030, which includes assessing our impact on climate change, terrestrial acidification, water
eutrophication, and marine ecotoxicity;· address the Solvay sites most at risk of drought;· roll out the STAR Factory program site roadmaps (50% completed), which include a sustainability pillar.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

RISK MANAGEMENT

153

2.6. Geopolitical impacts on trade and supply chain
RISK HORIZON: SHORT TO MEDIUM TERM
2.6.1.

Risk description

Geopolitical rivalries can cause trade wars, supply chain constraints, and regulatory deadlocks, leading to an inability or impairment to trade anddevelop our businesses across the key regions of the world.

2.6.2.

Prevention and mitigation actions

The geographical balance of our Group activities across the major regions of the world, and the fact that in many of our global businesses we serve
our customers locally, mitigate these risks up to a certain point, but this is nevertheless limited by the characteristics of our business supply chains.

2.6.3.

Main actions in 2023

The consequences of the war that erupted in Ukraine in 2022, continued to be felt in 2023. The Group continued to take action on several topics:· Ensuring the safety of the few Solvay employees based in Ukraine.
· Ensuring the continuity of raw material supply by selecting alternative sources to Russia.
· Implementing contingency plans for energy restrictions in Europe, including restrictions to access natural gas. Every European site has developed
a contingency plan.
· Ensuring that we comply with the export controls and sanctions enforced by the EU, the U.S. and other countries.
In 2023, new geopolitical events had the potential to impact our business.
China reopening after the end of the zero-COVID policy created expectations that global demand would be driven up, but for the most part thisfailed to materialize. At the same time, tensions between U.S. and China contributed to an increased polarization of the world, triggering an initialinternal assessment of its long term implications for Solvay. Our relatively small exposure to China, as well as the fact that many of our customers areserved locally from plants located in each region, provided a relative protection from the situation in the short term.
The terror attacks in Israel and the ensuing war with Hamas created another source of instability and tension for the world but the direct impact
on our business was relatively limited. The more recent attacks of Houthis in the Red Sea may have more impactful consequences if the induced
increase in shipping costs does not abate quickly. In the meantime, the short-term impact is somewhat positive as those higher shipping costs
protect some of our markets from low-cost Chinese competitors' products.

2.7. Digital and people transformation (new risk)
RISK HORIZON: SHORT TO MEDIUM TERM
2.7.1.

Risk description

Failure to achieve our digital transformation and attract, retain, and diversify human capital may jeopardize our competitive edge.
Solvay, like the rest of the chemical industry, is undergoing significant changes due to technology evolution which result in important investments
in digitalization to further enhance operational efficiency, support sustainability standards, promote business resilience, and create competitive
advantages. However, the implementation of these transformation initiatives, may sometimes not occur at the envisaged pace and/or their fullpotential may not always lead immediately to the desired results. In addition, the required changes could potentially influence employment trends
and lead to shifts in job profiles due to automation and artificial intelligence (AI). This will make it even more necessary to rethink talent attraction,
retention, and diversification strategies.

2.7.2.

Prevention and mitigation actions· Deployment of the STAR Factory program as a response to the fast-changing world to transform our manufacturing sites into industry benchmarks.
Successfully launched in 2021 and based on a pilot approach at two sites, the program is being rolled out to all Solvay sites. A “Forum & Field”
approach is used to support the sites in their journey and to roll out STAR Factory in a harmonized way across the company. This will further be
supported by a STAR Academy to provide dedicated learning and sharing.
· Dedicated training and development initiatives as well as regular best practice sharing to ensure that our employees actively engage in our digital
initiatives and remain at the forefront of digital competencies.
· Systematic talent development initiatives at all levels in the organization based on an early identification process, quarterly performance reviews,
dedicated training modules for subject-matter experts and first-line managers, as well as for more senior managers, Young Professionals Network,
Future Top-leader Community (FTL community), bonding sessions with senior leaders in the organization, and internal and external mentoring
programs.
· Active monitoring of key employee attrition rates and implementation of appropriate measures, such as incentive and retention plans, as wellincreased management involvement in maintaining an active dialogue with employees.

154

RISK MANAGEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3· Succession planning for critical positions and capabilities: The leadership team leads a yearly identification of business-critical roles within
the organization, mapping talent and expert other resources to ensure business continuity planing. Possible gaps in short- and middle-term
capabilities are addressed through action plans.
· Customized DEI training modules to further strengthen awareness across the organization and proactively address any implicit bias.
· Employee well-being program preventing and addressing, among other things, physical and mental health issues, accompanying employees inperiods of change and helping them to navigate uncertainty.

2.7.3.

Main actions in 2023

· Completion of the detailed STAR Factory program roadmaps for 50% of all sites.
· Creation of a dedicated STAR Factory community to facilitate exchanges and share best practices, lessons learned, guides and training.
· Provision of an Industrial Analytics training module through our global online Training Academy platform.
· Group-wide webinars on how to make the most of generative AI based on concrete examples and pilots.
· Creation of a platform composed of Solvay’s most senior female leaders to foster DEI in general and promote career development opportunities
for female leaders in particular.
· Comprehensive well-being and change management program by HSE specialists and a network of ambassadors from all GBUs and Functions
to accompany our employees during the Partial Demerger process and prepare them for their new roles.
Additional mitigation and prevention actions are currently being defined for this new risk.

3. OTHER RISKS
3.1. Market- and growth-strategic risk
RISK HORIZON: MEDIUM TO LONG TERM
3.1.1.

Risk description

Solvay is exposed to a wide range of end markets and as a result targets a growth more or less in line with GDP. The ability to capture that growth
relies on our relative cost competitiveness and on having production capacity available to supply the market. Strategic risks related to markets andgrowth concern Solvay’s exposure to cyclical or phasing out applications or our competitive environment (for example, exposure to high energy or
raw materials costs), and the risk of making erroneous strategic decisions (for example, failing to invest at the right time or in the right geographies,
selection of new business development opportunities), etc.

3.1.2.

Prevention and mitigation actions· Continuous investment in innovation and process improvement to achieve and/or defend benchmark performance. This is what we do, forinstance, with the introduction of the next generation soda ash process, eSolvay.
· Long-term contract agreement with large global or regional customers to secure stable market positions and prices.
· Built-in energy component in our price mechanisms to hedge our exposure to energy costs.
· Continuous cost improvement projects (STAR Factory program, operating model optimization) to improve and defend our cost competitiveness.
· Capture new applications opportunities for our products (for instance, sodium bicarbonate used for flue gas treatment or rare earths for permanent
magnets applications) in fast-growing end markets.
· Introduction of sustainable offers to differentiate from competitor’s products (for instance, investment in rice husk-derived Silica or in biobased
solvents).
· Adaptation of our operations to new energy and CO2 markets leveraging third parties to reduce cost and optimize investment efficiency.
· Systematic and formal analysis of markets and marketing challenges with respect to investments and innovation project ramp-ups.
· Rigorous allocation of our capex and strong focus on cash generation.
· Adjustment of our production capacity to adapt to market demand and balance offer when needed (for instance, reduction of production capacityof soda ash in Torrelavega).

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

RISK MANAGEMENT

155

3.2. Supply chain and manufacturing reliability risk
RISK HORIZON: SHORT TERM
3.2.1.

Risk description

There are several risks related to raw materials, energy, materials and equipment for construction and maintenance, suppliers, production, storage
units, and inbound and outbound transportation. These include:· Inability of suppliers to deliver contracted volumes or capacities in line with required specifications, due to force majeure, for example, or because
the supplier has insufficient access to Logistic Service Provider capacities.
· Insufficient contracting of volumes or capacities, from both a volume and delivery timing perspective, to fulfill our demand.
· Delayed delivery of volumes or capacities.

3.2.2.

Prevention and mitigation actions

In order to ensure manufacturing reliability, we:· Ensure our production units are distributed across the world.
· Use Process Safety Management.
· Define equipment and materials as critical elements to be ordered ahead for projects and maintenance.
· Organize regular performance reviews with our key suppliers.
· Establish the Group property loss prevention program, which focuses on the prevention and mitigation of damage to assets and loss of profit due
to fire, explosion, accidental chemical release, and other adverse events, like natural catastrophes.
To mitigate risks in our supply chain we:· Use third-party corporate social responsibility assessments and ask that our suppliers adhere to the Solvay Supplier Code of Business Integrity.
· Continuously focus on improving our planning processes to help us anticipate demand, both in terms of volume and timing.
· Maintain contingency plans for the most critical suppliers.

3.2.3.

Main developments and results in 2023

With uncertainty and volatility continuing to prevail, supply chains need to continue their transformation toward additional agility using end-to-end
process revision and the implementation of new tools.
Based on our experience in 2022, we have tested several options which would give us increased flexibility in sourcing, providing us with opportunities
should risk materialize. Our inventory management has also improved toward a more segmented approach better visibility with better end-to-endalignment. Additional efforts are planned in 2024.
More information can be found in the Extra-financial chapter of the report: 3.4. Supply Chain and Procurement.

3.3. Financial risk
RISK HORIZON: SHORT TO MEDIUM TERM
3.3.1.

Risk description

We face various different types of financial risk. These include:· Liquidity risk (see note F32 in the consolidated financial statements : Financial instruments and financial risk management).
· Foreign exchange risk (see note F32 in the consolidated financial statements: Financial instruments and financial risk management).
· Interest-rate risk (see note F32 in the consolidated financial statements: Financial instruments and financial risk management).
· Counterparty risk (see note F32 in the consolidated financial statements: Financial instruments and financial risk management).
· Pension obligation risk (see note F30 in the consolidated financial statements: Employee benefits).
· Tax litigation risk (see note F31 in the consolidated financial statements: Provisions).

3.3.2.

Prevention and mitigation actions

A prudent financial profile and conservative financial disciplineInvestment grade status: BBB-/A3 (stable outlook) by Standard & Poor’s as of the Partial Demerger that occurred on December 11, 2023. Before
completion of the Partial Demerger, Solvay’s rating by Standard & Poor’s was BBB/A-2. While Solvay’s long-term senior debt has been assigned aninvestment grade rating by Standard & Poor’s, no assurance can be given that Solvay will be able to receive or maintain such a rating. A decreasein the ratings assigned to Solvay by a rating agency may negatively impact Solvay’s access to the debt markets and increase its cost of borrowing.
Solvay promotes transparency of information and engages in regular discussions with credit rating agencies.

156

RISK MANAGEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Strong liquidity reserves
As of the end of 2023, the Group had €0.6bn in cash and cash equivalents other current financial instruments, as well as €1.5 billion of committed
credit facilities (a multilateral revolving credit facility of €1.1 billion and an additional €0.3 billion from bilateral revolving credit facilities with key
international banking partners), which were all undrawn at the end of 2023.
In connection with liability management transactions carried out prior to the completion of the Partial Demerger, Solvay has also secured a €1.5 billion
Bridge Term Loan ending in October 2024, the amount has been fully drawn. The company has an unconditional right to extend two times thematurity by 6 months, until October 2025. The Group has access to a Belgium Treasury Bill program for €1 billion, unused at the end of 2023.

Currency hedging policy
Solvay monitors the foreign exchange market closely and takes hedging measures to:· Limit the fluctuation of the Group’s forecasted gross margin caused by currency volatility for material exposures.
· Mitigate the foreign exchange transactional risk at Group level by limiting the profit and loss (P&L) impact of rate fluctuations between the timeof invoicing and the time of cash settlement.

Interest rate hedging policy he Group locks in the majority of its net indebtedness at fixed interest rates. Solvay monitors the interest rate market closely and enters intoT
derivative instruments (interest rate swaps and zero cost collars) whenever they are deemed appropriate.

Energy and CO2 hedging policy
Solvay hedges energy prices – gas and electricity – based on the net exposure of our sales not indexed on energy prices. This policy includes
multiyear hedging transactions. The Group net exposure to carbon pricing is managed through hedging transactions spanning the time horizon of
the European Union Emissions Trading Systems.

Monitoring of Group counterparties’ ratings
For our treasury activities, Solvay works with banking institutions of high creditworthiness (investment grade, selected based on major rating
systems) and minimizes the concentration of risk by limiting our exposure to each of these banks to a predefined threshold. We regularly monitor
trends in credit default swaps to assess changes in bank creditworthiness and take rapid action if required.
For our commercial activities, Solvay’s external customer risk and cash collection is monitored by a professional network of credit managers and cash
collectors located in the Group’s various operating regions and countries. Their controls are supported by a set of detailed procedures and managed
through Corporate and GBU Credit Committees. These loss mitigation measures have led, over the past few years, to a record low rate of customer
defaults.

Pension governance and pension plan optimization
With regard to pension governance, Solvay engages proactively and constructively with trustees and stakeholders to ensure that funding, liability
management, and investment policies are appropriate, in line with best practices and in full compliance with domestic regulatory expectations andlaws.
In terms of pension plan optimization, we reduce the Group’s exposure to defined benefit plans by either converting existing plans into pension
plans with a lower risk profile for future services or closing them to new entrants.
For each of the main Group pension plans, which represent about 90% of the Group’s gross or net pension obligations, Asset Liability Management(ALM) analyses are performed at least once every three years to identify and manage corresponding risks.

Control processes for tax regulation compliance and transfer pricing policies
Our control processes for tax regulation compliance involve monitoring procedures and systems, which we carry out through internal reviews andaudits performed by reputable external consultants.
Our transfer pricing policies, procedures, and controls are aimed at meeting the requirements of the authorities.
Solvay’s Tax Department pays close attention to the correct interpretation and application of new tax rules. This ensures compliance with applicable
rules and regulations and avoids tax and future litigation risks.

3.3.3.

Main actions in 2023

· Successful liability management exercise before completion of the Partial Demerger to implement the target, post-spin-off capital structure ofSolvay and Syensqo.
· Set up of new liquidity reserves following the execution of the Partial Demerger.
· Further contribution in the Solvay UK pension funds of €11 million in Q2 and a contribution in France of €18 million in Q4 in the AXA pension fundfor Rhodia Chimie.
· Compliance for IBOR-transition rates to risk-free rates and adjustments of financial documentation.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

RISK MANAGEMENT

157

3.4. IT risk
3.4.1.

Risk description· Ensure the continuity of digital technology services to business; support business continuity.
· Deliver cyber security services and roadmap within IT portfolio; handle data security and non-compliance risk, supplier sustainability and security.
· Support major group transformations and deliver timely transformation initiatives, while being bound to provide IT systems and infrastructureservices under the Master Transition Services Agreement (MTSA) entered into between Solvay and Syensqo for a period of up to two years endingin December 2025.

3.4.2.

Prevention and mitigation actions· Close monitoring of major transformation initiatives.
· Timely definition and implementation of Post-Demerger roadmaps to ensure the exit of the IT Transition Service Agreements between Solvay andSyensqo by December 2025.
· Close monitoring of security and performance indicators.
· Close monitoring of workforce and talent management.
· Ad hoc actions to boost recognition, motivation, and support well-being and caring.
· Increased security requirements from third parties.
· Globally, close monitoring of IT/Digital Technology (DT) risks.
· Annual IT audit program to ensure compliance with group security policies.
· ISO 27001 and ISO 9001 certification.

3.4.3.

Main developments in 2023

In 2023, the main challenge was to leverage IT best practices (in the fields of change management, security, etc.) while delivering a very demanding
initiative portfolio required to support the group transformation.
More than 300 major transformations orchestrated and synchronized with the Solvay transformation in 2023.

Command Center· Set up of a Command Center organization.
· Deployment of ITIL (Information Technology Infrastructure Library) practice in the field of incident management, change management, problem
management, etc.
· Set up a SIEM (Security Information and Event Management) service.
· Close monitoring of critical services.
· All application portfolios reassessed.

Security· Security in projects: Security by design process has been running for more than a year.
· Security standards deployment.

Process improvement· Improvement of end-to-end services like onboarding of employees.
· Automation of identity and access management.
· Resource/capacity planning.

Areas of practice· Set up of areas of practice (service owners, service delivery managers, initiative owners, etc.).

DT risk management· Digital technology risks are monitored on a monthly basis together with the DT Leadership team.
· Digital technology risks were reassessed in September 2023.
· Synchronization with operational risk management has been reinforced (risks in projects, third-party risks, cyber-security risks, etc.).
· High implementation rate of audit action plans has further improved and been sustained in 2023.

158

RISK MANAGEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Litigation section
INTRODUCTION
As a result of the diverse nature of its activities, and the geographic footprint of its operations, the Solvay Group is exposed to legal risks,particularly in the areas of product liability, contractual relations, antitrust laws, patent disputes, tax assessments and health, safety and environment (HSE) matters.
In this context, litigation is a normal recurring feature of the Solvay Group’s operating businesses, both to protect against claims, some ofwhich we believe to be without merit, and to defend the rights and interests of the Solvay Group.
Ongoing legal proceedings involving the Solvay Group that are currently considered to potentially involve significant risks are outlined below.
The legal proceedings described below do not constitute an exhaustive list.
The proceedings summarized below represent the material matters pending against Solvay or its subsidiaries regardless of the merits of theclaims and the strengths of Solvay’s defenses. There can be no assurance regarding the outcome of any proceeding described below; theSolvay Group will continue to vigorously defend itself based on the merits of its defenses while opportunistically seeking consensual resolution in appropriate cases.
For certain cases, we have created reserves or provisions in accordance with appropriate accounting rules and policies, to cover financial
risk and defense costs. Please refer to Notes F8, “Discontinued Operations”, F31 “Provisions” and F36 “Contingent Assets, Liabilities andFinancial Guarantees” to Solvay’s consolidated financial statements for the year ended December 31, 2023 for additional information regarding such reserves or provisions. In doing so, we do not ordinarily disclose the extent to which provisions are made in relation to individual
proceedings, because to do so would be prejudicial to Solvay’s interests. In addition, we maximize all available insurance coverage. Adverse
outcomes of material contested matters, individually or in the aggregate, could exceed the amounts of applicable provisions or insurance
coverage, and could have a material adverse effect on the revenues and earnings of the Group.

ANTITRUST PROCEEDINGSIn Brazil, CADE (the Brazilian antitrust authority) levied fines against subsidiaries of Solvay and other third parties in May 2012, relating tohydrogen peroxide activities, and in May 2016, relating to sodium perborate activities. Solvay’s aggregate share of these fines amounts to€29.6 million and €3.99 million respectively. We have since brought a lawsuit before the Brazilian Federal Court to contest these administrativefines.

HSE-RELATED PROCEEDINGS· Asbestos Cases: Twenty-nine civil proceedings have been brought before Italian courts by past workers and relatives of deceased workers at
Solvay sites seeking damages, currently estimated at approximately €32 million, in relation to diseases allegedly caused by exposure to asbestos. Thirteen proceedings are still pending before courts of first instance, Courts of Appeal and the Supreme Court (Corte di Cassazione)
whilst the remaining 16 proceedings definitively ended as a result of dismissals, court settlements, and condemnations to pay damages.
· Rosignano site: The Public Prosecutor’s Office of the Criminal Court of Livorno, Italy initiated preliminary criminal investigations in 2019
regarding the alleged contamination of certain water tables outside our site and in our former landfill of Rosignano, Italy site. These investigations are still ongoing.

BULGARIAIn Bulgaria, Solvay Sodi AD, a subsidiary of Solvay, is subject to certain state-imposed obligations for emergency oil stocks (reserves) for 2021
through 2023, for which it was not able to comply. As a result, the competent Bulgarian authority imposed fines for 2021 and 2022 on Solvay
Sodi AD of approximately €15 million for our share of the penalties which were fully provisioned. For 2023, the order is suspended and as aresult no fine is imposed and therefore no provision has been recorded.
Should this suspension be lifted, an additional penalty of €9 million may be imposed on Solvay Sodi AD. Solvay Sodi AD has brought a lawsuit to contest these fines and is seeking relief through national authorities pleading that the existing Bulgarian emergency stocks system is
not compatible with the EU law.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

RISK MANAGEMENT

159

PHARMACEUTICAL ACTIVITIES (DISCONTINUED)
The contractual arrangements for the sale of our pharmaceutical activities in February 2010 established the terms and conditions for the
allocation and sharing of liability arising out of activities carried out before the sale. Subject to limited exceptions, Solvay’s exposure for indemnification to Abbott for liabilities arising out of sold activities is limited to an aggregate amount of €500 million, with limited duration. All
post-closing indemnification claims made against Solvay have now been resolved except liabilities arising from private civil antitrust claims
made against the buyer of the business. Solvay's potential exposure is limited to a possible clawback of up to the €300 million received by
Solvay as an additional purchase price based on post-closing ANDROGEL® sales.

SPECIALTY BUSINESSES TRANSFERRED TO SYENSQO AS PART OF THE PARTIAL
DEMERGER (DISCONTINUED)
On December 8, 2023, the Extraordinary Shareholders’ Meetings of the Company and Syensqo SA/NV (“Syensqo”) approved the partial
demerger of the Company whereby the shares and other interests the Company held in the legal entities operating the so-called “Specialty
Businesses”, its rights and obligations under the agreements entered into with those legal entities, as well as certain other assets and liabilities were transferred to Syensqo (the “Partial Demerger”), with 99.53 % of positive votes. The Partial Demerger was completed on December
9, 2023.
With effect from December 9, 2023, as a result of the Partial Demerger, Syensqo owns certain legal entities which were involved in ongoingproceedings prior to the Partial Demerger. Accordingly, as part of the deconsolidation of the Specialty businesses of Solvay (including thelegal entities transferred to Syensqo as part of the Partial Demerger) as from December 9, 2023, the provisions booked in Solvay’s consolidated financial statements, prior to completion of the Partial Demerger, in respect of proceedings involving legal entities transferred to Syensqo
are no longer reflected in Solvay’s consolidated financial statements. For additional information, please refer to Section 1 of the consolidated
financial statements and Notes F8, “Discontinued Operations” and F40 “List of Companies included in the Consolidation Scope” for the year
ended December 31, 2023. Proceedings involving legal entities transferred to Syensqo included, in particular, the following:· US PFAS-related proceedings, including West Deptford site: Solvay Specialty Polymers USA, LLC (Specialty Polymers), a former subsidiaryof Solvay transferred to Syensqo as part of the Partial Demerger, owns and operates the West Deptford, New Jersey site. In 2023, Specialty
Polymers was a defendant in 36 separate lawsuits in the United States relating to such subsidiary’s alleged use of per- and polyfluoroalkyl
substances (PFAS). Of these 36 cases, 15 reached resolution in 2023 and are expected to be dismissed in 2024, including the litigation
filed by the New Jersey Department of Environmental Protection (NJDEP). On June 28, 2023, Solvay Specialty Polymers USA, LLC and the
NJDEP announced they reached a settlement resolving certain PFAS-related claims in New Jersey. As a result of this settlement, Solvay
increased its existing provision by around $250 million as of June 30, 2023, with $175 million cash out in 2024 and the balance over a 30-year
period. This additional provision was included within discontinued operations in the Consolidated Income Statement for the year ended
December 31, 2023. [As noted above, as a result of the deconsolidation of the Specialty businesses of Solvay as from December 9, 2023,
the amounts provisioned in respect of the abovementioned PFAS-related proceedings are no longer reflected in Solvay’s consolidated
financial statements.]· Edison-related proceedings: Syensqo received compensation of €91.6 million after decisions by the International Chamber of Commerce,
Commerce's Arbitration Court, the Swiss Supreme Court, and the Milan Court of Appeal, all of which ruled in favor of Solvay Specialty Polymers Italy S.p.A. The compensation relates to losses, damages and costs incurred up to the end of 2016 in relation to certain environmental
issues at the Spinetta Marengo and Bussi sites, previously owned and operated by (Mont)Edison S.p.A. and Ausimont S.p.A. The compensation received in 2023 was included within discontinued operations in the Consolidated Income Statement.

160

RISK MANAGEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

07

161

EXTRA-FINANCIAL
STATEMENT
162	1. O
 verview of theconsolidated extrafinancial statements
164	2. Basis of preparation
164
165
166

2.1. Reporting frameworks
2.2. Reporting scope and boundaries
2.3. Materiality analysis

175	3. Governance175
3.1. One Planet
176	3.2. Management of the legal, ethics,
and regulatory framework
182	3.3. Health, safety and environmental
management
183
3.4. Supply chain and procurement
185
3.5. Main partnerships
187
3.6. Membership and advocacy

189

4. Climate

189
191
196

4.1. Climate change
4.2. Greenhouse gas emissions
4.3. Energy

199

5. Nature

199
201
201
203
206

5.1. Water and wastewater
5.2. Waste
5.3. Air quality
5.4. Biodiversity
5.5. Hazardous materials

208

6. Better life

208
6.1. Employee health and safety212	6.2. Critical incident risk
management
214
6.3. Labor practices
217
6.4. Diversity and inclusion
220	6.5. Recruitment, development, andretention
223
6.6. Corporate citizenship225	7. Sustainable portfolio
225	7.1. Product design and life-cycle
management
227
7.2. Circular economy
228
7.3. EU taxonomy activities

236

8. GRI content index236

 .1. Statement of use and GRI 1
8
used
8.2. GRI 2: general disclosures 2021
8.3. GRI 3: material topics 2021

236
238

162

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Extra-financial statements
1. OVERVIEW OF THE CONSOLIDATED EXTRA-FINANCIAL STATEMENTS
Past figures are restated to the 2023 scope.
R: Reasonable assurance
L: Limited assurance
Mt: Million metric tons
Mm3: Million cubic meters
PJ: Peta Joules

CLIMATE
Units

2023

2022

PRIORITY ASPECTS
Greenhouse gas emissions
R

Scope 1

Mt CO2 eq.

6.7

7.8

R

Scope 2 – gross market-based

Mt CO2 eq.

0.6

0.7

R

Total Scope 1+2

Mt CO2 eq.

7.3

8.5

R

Scope 3 – all categories

Mt CO2 eq.

14.0

15.5

Total scopes 1+2+3

Mt CO2 eq.

21.3

24

Number63

56

Primary energy purchase for consumption (1)

PJ

71.9

79.4

Secondary energy purchase for consumption (2)

PJ

17.2

18.9

Energy sold (3)

PJ

19.0

19.6

Biodiversity
R

Pressure of Solvay products on biodiversity
HIGH MATERIALITY ASPECTS
EnergyL

Energy consumption* (1)+(2)-(3)

PJ

70.1

78.7

L

Renewable energy consumption

PJ

6.9

6.0

R

Phase-out of coal use in total energy production

PJ

24

28

*A change in the reporting scope took place, with the exclusion of all emissions in the joint-venture in Zhenjiang, China, and Tavaux, France, sites in our reporting scope.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENT

163

NATURE
Units

2023

2022

PRIORITY ASPECTS
R

Product portfolio assessed

%

92

91

R

Sustainable solutions – % Group sales

%

44

43

%

4

5

Total freshwater withdrawal

Mm3

223

244

Freshwater withdrawal in water-stressed areas

Mm3

33

37

Circular economy
L% of sales aligned with circular economy principles
Water

R

L

Chemical oxygen demand (COD)

Metric tons

1,970

1,848

L

Persistent organic pollutants (POP)Metric tons

0

1.6E-05

Waste
R

Non-hazardous industrial waste

1,000 tons

1,365

1,460

R

Hazardous industrial waste

1,000 tons

26

35

R

Total industrial waste

1,000 tons

1,392

1,495

R

Industrial non-hazardous waste not treated in a sustainable way

1,000 tons

17

11

R

Industrial hazardous waste not treated in a sustainable way

1,000 tons

5

6

R

Total industrial waste not treated in a sustainable way

1,000 tons

23

16

R

Mining waste

1,000 tons

432

600

HIGH MATERIALITY ASPECTS
Air quality
L

Nitrogen oxides (NOx)Metric tons

4,324

4,954

L

Sulfur oxides (SOx)Metric tons

2,047

2,363

L

Non-methane volatile organic compounds (NMVOC)

Metric tons

2,341

1,743

L

Ozone-depleting substances (ODS)

Metric tons

0.7

1.6

L

Persistent organic pollutants (POP)Metric tons

4.3E-08

3.6E-08

Number

26

24

%

94

68

HAZARDOUS MATERIALSLAll Solvay-Substance of Very High Concern (Solvay-SVHC) present in marketed products

L% of completion of Analysis of Safer Alternatives program for marketed substances

164

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

BETTER LIFE
Units

2023

2022

PRIORITY ASPECTS
Employee health and safety
R

Reportable Injury and Illness Rate (RIIR) employees and contractors

per 200,000 hours

0.27

0.27

R

Lost Time Injury and Illness Rate (LTIIR) employees and contractors

per 200,000 hours

0.18

0.18

R

Fatal accidents – employees and contractors

Number

0

0

Diversity and inclusion
R

Women in senior and middle management

%

26.3

28.8

R

Women in Solvay’s workforce

%

24

24

R

Total headcount

9,105

9,379

%

100

100

Medium or higher
severity incidents per
200,000 hours worked

0.42

0.82

Number

5

14

HIGH MATERIALITY ASPECTS
L

Coverage by collective agreements
Critical incident risk management

L

Process safety incident rate

L

Process safety incident (M, H, C) with environmental consequences (M, H, C) of
which with reportable operating permit limit exceedance and with a chemical
release (L, M)

2. BASIS OF PREPARATION
2.1. Reporting frameworks
The main reporting frameworks used to prepare the Annual Integrated Report are:· Global Reporting Initiative (GRI): The GRI standards are the main reference for Solvay’s sustainability reporting; the latest edition of the standards
is used, including the new GRI-1 and GRI-2 universal standards.
· 2014/95/EU: Solvay uses the GRI Standards to comply with Directive 2014/95/EU of the European Parliament and of the Council of October 22,
2014 amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information. The Directive was transposed into Belgian
law in September 2017.
· EU Taxonomy: A first estimate of eligible activities as defined by the EU Taxonomy in the delegated act of April 2021 is presented in 7.3. EU
Taxonomy.
· United Nations Global Compact: The information provided serves as a progress report on implementation of the United Nations Global Compact’s
10 principles.
· Task force on Climate-related Financial Disclosures (TCFD): Solvay reports on our alignment with the 11 recommendations of the TCFD.
· Responsible Care®: Solvay is a signatory to the International Council of Chemical Associations’ (ICCA) Responsible Care Global Charter®.
· Integrated Reporting Framework: Solvay adheres to the principles and content elements of Integrated Reporting, as described in the “International
Framework” published by the IFRS Foundation.
· Sustainability Accounting Standards Board (SASB): Solvay aligns our materiality analysis with the SASB approach to prepare the SASB Materiality
Map™. For more details, see the Materiality Analysis section of this chapter.
· United Nations Sustainable Development Goals: Solvay has identified the nine Sustainable Development Goals on which it can have the mostimpact, through its operations or across the value chain, in line with the materiality analysis.
· World Business Council for Sustainable Development (WBCSD): Solvay’s report aligns with the WBCSD ESG Disclosure Handbook guidance interms of process and content selection.
Solvay also monitors developments in the European Sustainability Reporting Standards (ESRS), included in the new European Union Corporate
Sustainability Reporting Directive, as well as the IFRS Sustainability Standards.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENT

165

2.2. Reporting scope and boundaries
GRI Disclosures 2-2 2-3 2-4 2-7
Unless stated otherwise, the environmental and social reporting boundaries are consistent with the financial reporting scope and boundaries, as
described in the “List of companies included in the consolidation scope” in the financial statements. In other words, in line with the approachdescribed in the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard, sustainability indicators consolidation include fully
consolidated companies (subsidiaries), and companies that qualify as joint-operations. Apart from exceptions listed below, joint operations areconsolidated in line with the Group contractual share of the joint operations’ assets, liabilities, revenue, and expenses, which is generally alignedwith the ownership interest in the joint operations. Companies consolidated by applying the equity method of accounting (joint-ventures andassociates) are excluded from the environmental and social reporting boundaries.
More specifically, indicators linked to operations (greenhouse gas emissions, energy, air, water, waste, and critical incident risk management) arecovering only production and research and innovation sites on which Solvay has operational control or exercises joint control that qualify as joint
operation.
As an exception to the above rules, air, water, and waste indicators:· for Zhenjiang company (fully integrated in Syensqo but in which Solvay has a minority share), have been split based on actual emissions by
Syensqo and Solvay workshops; and· for Devnya, Bulgaria, have been consolidated at 75%.
Employee health and safety indicators encompass all sites on which Solvay has operational control, regardless of the site’s company consolidation
method. The data is calculated on a monthly basis.
Critical incident risk management indicators encompass all industrial functions and sites at which Solvay has operational control, regardless of thesite’s company consolidation method. The data is calculated on a monthly basis.
The other Better Life social indicators include all Solvay employees (regardless of the employee’s company consolidation method) who have an
employment contract with Solvay and are classified as active, as they have a position in the organizational chart on December 31, 2023.
Employee health & safety indicators encompass all sites on which Solvay has operational control, regardless of the site’s company consolidation
method.
The other Better Life social indicators include all Solvay employees (regardless of the employee’s company consolidation method) who have an
employment contract with Solvay and are classified as active, as they have a position in the organizational chart.
Collective agreements cover all Solvay employees in companies in which Solvay has a majority stake.
Solvay uses the “rolling base year” approach described in the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard to calculate
target achievements.
Unless stated otherwise, past years have not been restated for extra-financial indicators, with the major exception of Solvay-Syensqo impact, where
2022 and 2023 data have been split with Solvay scope and boundaries. Other exceptions are documented in the KPI section.
Before the December 2023 spin-off, Solvay Group was including Syensqo perimeter. Therefore, indicators related to the pre spin-off period havebeen split between Syensqo and the remaining Solvay Group, based on the following simplified approach inspired by the approach used for the
combined financial statements:· Each business unit was allocated 100% to either Solvay or Syensqo.
· Corporate and shared Research and Innovation services were allocated 100% to Syensqo (except for the Paulinia site, allocated to Solvay).
· Digital Technology Function and Shared Business Services were allocated 100% to Solvay (those Solvay teams are engaged in the Transition
Service Agreement with Syensqo).
· The remainder (mainly Corporate and Business Services perimeter not covered above, or elements that were not tracked by business units) was
allocated 39.55% to Solvay and 60.45% to Syensqo. This allocation rule was also applied for Citizen Days participation (participation to Citizen
Days is in 6.6. Corporate Citizenship).
Those rules may cause a rounding error on indicators without decimals (for instance the Speak Up program, or number of accidents). The actual
indicator before the split may differ by one unit from the consolidation of Solvay and Syensqo split indicators.
There is an exception to the above rules for sites shared between Solvay and Syensqo. In 2023, both Tavaux and Zhenjiang plants are allocated fully
to Syensqo, except for air, water, waste, process safety, speak-up claims, and employee health and safety indicators, which are split based on actual
workshops allocation.
Administrative sites that are part of greenhouse gas emissions and energy reportings are split as follows: Watford site and Brussels campus in
Neder-Over-Heembeek are included in Solvay perimeter; while Aubervilliers, St-Fons Research and Innovation center, Bristol, and Butte sites areallocated to Syensqo.

166

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 32022 Solvay Group headcounts have been restated from 22,047 to 21,998 (i.e., -49 headcounts), due to retroactive employee data changes
performed in 2023 (inactive headcount departure, new hires, terminations). This 49 headcount gap has been allocated to Syensqo (60.45%, i.e., -30
headcounts) and the new Solvay (39.55%, i.e., -19 headcounts).

2.3. Materiality analysis
GRI DISCLOSURES: 3-1 3-2
Solvay adopts sustainability priorities based on a materiality analysis. This approach identifies economic, environmental, and social aspects which
can impact Solvay, or on which Solvay has the most impact, positive or negative.
Solvay uses two external references for our materiality analysis:· Global Reporting Initiative (GRI) for the materiality analysis process, and· SASB Standards (now part of IFRS Foundation) for the list of aspects and for prioritization criteria.

2.3.1.

Materiality table

Category

Not material for reporting purposes

Material for reporting purposes

Governance

·
·
·
·

·
·
·

Management of the legal, ethics, and regulatory framework
Data security
Business ethics···

Physical impacts of climate change
Greenhouse gas emissions
EnergyCustomer privacy
Selling practices and product labeling
Systemic risk management
Business model resilience

ClimateNature··Supply chain and procurement
Materials sourcing and efficiency

·
·
·
·
·

Air quality
Water and wastewater
Waste
Biodiversity
Hazardous materials

Better life··

Access and affordability
Customer welfare

·
·
·
·
·
·
·

Employee health and safety
Labor practices
Employee engagement, diversity and inclusion
Human rights and community relations
Product quality and safety
Critical incident risk management
Product design and life-cycle management

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

2.3.2.

EXTRA-FINANCIAL STATEMENT

167

Materiality analysis process

Solvay’s Sustainable Development Function coordinates materiality analysis with an internal network of Sustainability Champions in the Global
Business Units and Functions. Experts in each Corporate Function review the analysis of each aspect, paying particular attention to ensuringconsistency with the Group’s risk analysis. These assessments are then reviewed and validated by the relevant business leadership teams, which is a
critical step in ensuring that business priorities and decisions reflect sustainability matters appropriately.

Identification of aspects

Use of the SASB list of sustainability-related risks and opportunities as presented on the SASB Standards website.
··

Prioritization of aspects··

Use of the SASB Materiality Map prioritization criteria:- Demonstration of interest, for Solvay and/or for Solvay stakeholders, including evidence of potential impacts.
- Demonstration of financial impact, actual or potential: sales, profit, return or risk profile.
- Forward-looking adjustment.
The network of Sustainability Champions and internal experts for each high materiality aspect was involved in theprioritization analysis.
In addition to the SASB prioritization criteria, an additional focus on external impacts has been included in the assessment since the publication of Solvay’s Purpose in 2019. This led to the review of the materiality analysis, which led tothe publication of the Solvay One Planet sustainability ambition in 2020.
In 2023 the alignment with Solvay’s risk analysis was added, in a first step to align with the Corporate Sustainability
Reporting Directive definition of double materiality: if a risk has been identified as a group main risk, as described in
the Risk Management chapter of this report, the corresponding sustainability topics are considered financially material.

Validation

Review of the analysis by the Executive Committee and the Global Business Units and Corporate Functions leaders. The
review includes verifying consistency with the analysis of the Group’s main risks, and a comparison with the Value Reporting
Foundation – SASB Materiality Finder for the chemical sector.

Review

A review led by the Sustainable Development Function takes place annually, based on feedback from stakeholders andSolvay experts. The findings inform and contribute to the prioritization review in the next reporting cycle.

Stakeholder
inclusiveness andsustainability
context···

the exhaustive list of aspects in the SASB’s Materiality Map;the “Demonstration interest criteria,” which includes the analysis of documents from representatives of stakeholder
groups, with emphasis on written evidence; andidentification of the main impacts.

The high materiality aspects are included in Solvay’s dashboards and reported in the annual report, with assurance from
corporate auditors.

Report2.3.3.

Indirectly taken into account through:2023 updates

In 2023, a review of the materiality analysis has been performed in order to anticipate some of the provisions of the EU Corporate Sustainability
Reporting Directive (CSRD):· Alignment to the CSRD double materiality definition, as described in the “EFRAG implementation guidance for the materiality assessment”
published in August 2023, and in particular, better alignment with Solvay’s risks analysis as described in the Risk Management chapter of thisreport. This led to an increased focus on potential impacts (economic, social, and environmental) in addition to existing impacts.
· Stricter alignment to the “SASB list of sustainability-related risks and opportunities” as presented on the SASB Standards website.
· Preliminary assessment focusing on the new Solvay scope of activities on the basis of our perception of impact severity.
The following corrections have been made compared to the 2022 materiality table:· “Data security” has been identified as material, as it is part of one of Solvay’s main risks (security – physical and information).
· “Physical impacts of climate change” has been identified as material, as it is part of one of Solvay’s main risks (climate change).
· “Product quality and safety” has been identified as material, as it is part of one of Solvay’s main risks (products and regulated market risks).
· “Customer Welfare” was considered not material, as the elements covered under this SASB topic are already covered under “Product quality andsafety” for a chemical company.
The analysis was carried out by Solvay’s Sustainable Development team, involving in-house experts of each topic. It is considered a preliminary
analysis, as stakeholders have not been engaged yet. The analysis was presented to Solvay’s Executive Leadership team in September 2023.

2.3.4.

Why is it material?

The tables below summarize Solvay’s assessment of high materiality aspects for each category. The corresponding United Nations Sustainable
Development Goals (SDGs) are used to describe what impacts are considered, where they may occur, and how they may be caused. For more
information about these goals see https://www.globalgoals.org/.

168

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

GOVERNANCE

Topic

Scope andboundaries

Demonstration of
impact on Solvay

Demonstration of impact on people
and the environment

Material for reporting
purposes

Business ethics

Operations
value chain

Compliance andbusiness integrity isidentified as a mainrisk

Severe reaction from stakeholders expectedin case of breachMaterial; combined into
"Management of the legal,
ethics and regulatory
framework"

Competitive
behavior

Operations
value chain

Compliance andbusiness integrity isidentified as a mainrisk

Severe reaction from stakeholders expectedin case of breachMaterial; combined into
"Management of the legal,
ethics and regulatory
framework"

Customer privacy

Downstream
value chain

Data security

Operations
value chain

Data security isidentified as a main
riskManagement of thelegal & regulatoryenvironment

Operations
value chain

Compliance andbusiness integrity isidentified as a main
risk

Selling practices &product labeling

Downstream
value chain

Not material

Systemic risk
management

Operations
value chain

Not material

Business model
resilience

Operations
value chain

Covered under "Productdesign and life-cycle
management"

Not material
Material; combined to Security
group Risk
Potential environmental or social impacts
in own operations in case of lower standards
selection

Material; combined into
"Management of the legal,
ethics and regulatory
framework"

CLIMATE

Demonstration of
impact on Solvay

Demonstration of impact on people
and the environment

Topic

Scope andboundaries

Energy management

Operations
upstream value
chain

·
·

SDG-13
SDG-7·

Material for reporting
purposes

CO2 emissions
Solid fuels exposure, possible reaction
from stakeholders
Forward looking adjustment: yes,
growing importanceMaterial

GHG emissions

Operations
value chain
SDG-13

Climate change isidentified as a main
risk

·
·
·
·

Material for the chemical industry
High intensity of CO2e emissions
SF6 sales, potential impact on Scope 3
Forward looking adjustment: yes,
growing importanceMaterial

Physical impacts of climatechangeOperations
value chain
SDG-13

Climate change isidentified as a mainrisk·

Potential social and environmental
impacts of extreme climate events on
own operations and the value chain

Material

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

169

NATURE

Topic

Scope andboundaries

Demonstration of impact
on Solvay

Demonstration of impact on people
and the environment

Material forreporting purposes

Air quality

Operations

Environmental impact andcontroversies is identified
as a main risk··

Material

SDG-3
SDG-15Materials sourcing &efficiency (=management of
impacts on supply chain)

Upstream value
chain

Hazardous materials
management (in raw
materials/intermediates/end
product/emissions/effluents)

Operations
value chain

Material for the chemical industry
High intensity of NOx and SOx emissions

Not material

Operations safety isidentified as a main risk

SDG-3

·
·

SDG-6
SDG-12·

SDG-14

Hazardous materials are one of thepotential causes of harm to people or theenvironment
Chronic exposure to occupational agents –chemical, physical, biological, or psychological – known to cause work-related disease
SoC emissions in air and water

Material

High reputational impact: international
news headlines, activity on social media
Potential pressure on biodiversity throughsupply chain and own operations’ environmental impacts
Limestone quarries operations may affectlocal biodiversity
Forward looking adjustment: yes, growing
importanceMaterial

SDG-15
Biodiversity

Operations·

value chain·

SDG-13
SDG-14SDG-15··

Waste management(including hazardous
wastes)Operations
SDG-3
SDG-6

Environmental impact andcontroversies is identified
as a main risk···

Material for the chemical industry
High intensity of waste production
Rosignano controversy

Material

Environmental impact andcontroversies is identified
as a main risk··

Material for the chemical industry
High intensity of water intake

Material

SDG-12
SDG-14SDG-15
Water & wastewater
management

Operations
SDG-3
SDG-6
SDG-14SDG-15

170

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

BETTER LIFE

Topic

Scope andboundaries

Demonstration of
impact on Solvay

Access & affordability
Community relations

Local communities
Society at large
SDG-17

Security is identified
as a main risk

Demonstration of impact on people
and the environment

Material for reporting
purposes

No impact on or from Solvay’s products

Not material··

Seveso sites
Potential high impacts on people andthe environment in case of action against
production sites
Ongoing controversies (Rosignano)

Material·
Critical incident risk
management (process
safety)Operations
Local communities
SDG-3

Operations safety
is identified as amain risk·

Potential impacts of process accidents or
security risks on people and the environment

Material

Growing interest on
diversity impacts·

Potential social impacts in case of major
restructuring or site closure

Material·

Potential social impacts in case of breach ofsocial standards or human rights aspects
Labor relations is part of the company DNA
since Ernest Solvay
Potential social impacts in case of restructuring

Material

Material for the chemical industry
Accidents may cause fatalities or irreversible
injuries

Material

SDG-12
SDG-13
Employee engagement,
diversity and inclusion(including recruitment,
retention, development)

Operations
SDG-8

Labor practices

Operations··
Employee health & safety

Operations
Contractors
SDG-3

Product quality & safety

Product design & lifecycle management(including Business Model
Resilience) for sustainable
portfolio

Operations safety
is identified as amain risk··

Products andregulated market
risks is identified asa main risk
Operations
value chain

Market and growth– strategic risk (butnot a main risk)

Material···

Multiple positive or negative impacts
throughout the value chain assessed throughthe Sustainable Portfolio Management
methodology
Positive impacts: silica for green tires,
bio-circular silica, new soda ash manufacturing process
SF6 recycling

Material

2.4. Task Force on Climate-related Financial Disclosure
The Financial Stability Board Task Force on Climate-related Financial Disclosures (TCFD) developed voluntary, consistent, climate-related financial
risk disclosures, which can be used by companies to provide information to investors, lenders, insurers, and other stakeholders.
The Task Force structured its recommendations around four themes that represent key aspects of how organizations operate: governance, strategy,
risk management, and metrics and targets.
This section addresses the disclosures, with links to the relevant sections of the Annual Integrated Report, and provides a self-assessment of Solvay’s
level of alignment with the TCFD recommendations.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

TCFD recommendation

EXTRA-FINANCIAL STATEMENT

171

Implementation

Referencea. Describe the Board’s
oversight of climate-related risks
and opportunities.

·

The Charter of Corporate Governance describes how the Board of Directors manages
sustainability-related topics and is available on the Solvay website. The Board devotes
at least one meeting per year to an update on trends in global sustainable development issues, including climate change risks and opportunities. The ESG Committee
considers the material ESG issues relevant to the Group’s business activities andprovides guidance and recommendations to the Board.

5. Corporate
governance statement

b. Describe management’s rolein assessing and managing
climate-related risks andopportunities.

·

A Climate Risks Officer has been appointed at the Executive Committee level. The
person in charge of ensuring that climate-related aspects are adequately consideredin the Group’s strategy and operations.

·Long-term-horizon assumptions are presented in the description of megatrends in the
Sustainable value creation section of this Annual Integrated Report. Medium-term assumptions (in the coming five years) are explained in the description of Solvay’s mainmarkets. Short-term assumptions (one year) are presented in the Group’s outlook.
The presentation of the Group’s main risks includes timescales (short-, medium- or
long-term horizons). Quantification of impacts is not disclosed.

GOVERNANCE
Disclose the organization’s
governance around climaterelated risks and opportunities.

6. Risk management
process

STRATEGY
a. Describe the climate-relatedrisks and opportunities thecompany has identified over the
short, medium, and long term.

·b. Describe the impact
of climate-related risks
and opportunities on theorganization’s businesses,
strategy, and financial planning.

···c. Describe the resilience of theorganization’s strategy, taking
into consideration different
climate-related scenarios,
including a 2°C or lower
scenario.

·

Climate-related risks and opportunities were reviewed in 2022-2023. On transition
risks, a new climate transition scenario analysis was performed in 2023, in line with the
TCFD’s updated recommendation for scenario analysis. Two scenarios were considered: the 2021 International Energy Agency “Stated Policies Scenario” and the “Net
Zero Emissions by 2050” scenario.
Acute physical climate risks linked to droughts, floods, and hurricanes are assessedannually with our insurers.
Chronic climate physical risks focus on water scarcity: sites in areas of water scarcity have been identified, and the risks have been assessed based on their water
consumption and maximum foreseeable loss.

2. Businessenvironment andstrategy
Performance:
4. Outlook
6. Solvay’s main risks
6. Solvay’s main risks
Extra-financial
statements:
4.1. Climate change

Solvay’s climate transition risk scenario analysis was updated in 2023, in line with the
TCFD’s 2020 guidance. The result of this analysis is described in a new section of thisAnnual Integrated Report.

Extra-financial
statements:
4.1. Climate change

RISK MANAGEMENT
a. Describe the organization’s
processes for identifying andassessing climate-related risks.

·

The risk management process, the main risks, and the process used to rank them aredescribed in the Risk management chapter.

6. Risk management

b. Describe the organization’s
processes for managing climaterelated risks.

·

Analysis of value chain sustainability-related risks and opportunities is done throughthe Sustainable Portfolio Management methodology, for each product in each application or market, and includes climate change transition risks.
Greenhouse gas emissions (GHG) have been identified as a priority in the Group’smateriality analysis. Climate transition risks have been identified as part of the Group’s
main risks. Links between main risks and high materiality issues are part of the materiality analysis process.

Extra-financial
statements:·

2.3. Materiality analysis
Risk management:
6. Solvay’s main risks
7.2. Product design andlife-cycle management
4.1. Climate changec. Describe how processes
for identifying, assessing, andmanaging climate-related risks
are integrated into the organization’s overall risk management.

·

The Sustainable Portfolio Management tool is a requirement in key group processes
and, in particular, in the assessment of capital expenditure projects, research andinnovation projects, and acquisition and divestiture projects.

Extra-financial statements:
7.2. Product design andlife-cycle management
4.1. Climate change

172

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

METRICS AND TARGETS
a. Disclose the metrics usedby the company to assess climate-related risks and opportunities in line with its strategy andrisk management process.

·The strategic objectives used to drive sustainable value creation are described in the
Performance chapter.

3. Sustainable value
creationb. Disclose Scope 1, Scope 2,
and, if appropriate, Scope 3
greenhouse gas (GHG) emissions, and the related risks.

·Greenhouse gas emissions, energy consumption, and Sustainable Portfolio Management metrics and targets are reported in the Extra-financial statements chapter. Solvay
has a 2030 objective to reduce Scope 1 and 2 greenhouse gas emissions by 30% inline with a “well below 2°C” trajectory and targets carbon neutrality before 2050.
Solvay will also not build new coal-powered plants and has committed to coal phaseout in energy production by 2030 wherever renewable alternatives exist. Solvay has
also set a 2030 target to reduce by 20% Scope 3 greenhouse gas emissions from its
Focus 5 categories both upstream and downstream in the value chain.

Extra-financial statements:
4.2. Greenhouse gas
emissions7.1. Product design andlife-cycle managementc. Describe the targets used by
the company to manage climate-related risks and opportunities and performance against
targets.

·

Scope 1, 2, and 3 greenhouse gas emissions are fully reported and audited. The
scope of emissions reporting is consistent with financial reporting.

Extra-financial statements:
4.2. Greenhouse gas
emissions2.5. United Nations Sustainable Development Goals
In 2015, the United Nations established a set of goals to end poverty, protect the planet, and ensure prosperity for all. Each of these 17 Sustainable
Development Goals (SDGs) include specific targets to be achieved by 2030. Achieving the SDGs requires efforts by governments, the private sector,
civil society, communities, and individuals.
Nine leading chemical companies, including Solvay, and two industry associations formed a working group dedicated to the SDGs, convened by
the World Business Council for Sustainable Development (WBCSD). This working group took a leadership role in piloting and refining the three-stepframework described in the WBCSD’s SDG Sector Roadmap Guidelines.
As part of this exercise, Solvay identified the Sustainable Development Goals on which we could have a material impact, positive or negative. We
then integrated these sustainable development goals into our materiality analysis as the official agenda of the “Planet” (Governments and NGOs)
stakeholder group.
This preliminary list was reviewed in 2019, within the context of the Solvay One Planet sustainability ambition, with an increasing focus on the impact
of products and operations.
Solvay’s main areas of impact can be grouped into three categories: climate, nature, and better life. The corresponding list of SDGs on which Solvay
can have the most impact, positive or negative, through our operations and the products we sell, is as follows:· Climate, which includes the Group’s energy consumption and greenhouse gas emissions, but also products that may impact customers’ energy
consumption or greenhouse gas emissions:-

SDG 7: Affordable and clean energy
SDG 13: Climate action· Nature, which includes the Group’s raw material consumption, water consumption, effluents, emissions and waste generation, management of
hazardous materials, and other emissions or effluents that put pressure on biodiversity:-

SDG 14: Life below water
SDG 15: Life on land

· Better life, which includes the Group’s management of people, process and product safety, social dialogue initiatives, and potential social impactsof our product portfolio:-

SDG 3: Good health and well-being
SDG 6: Clean water and sanitation
SDG 8: Decent work and economic growth
SDG 17: Partnership for the goals· Sustainable portfolio, which includes products’ life cycles and end-of-life management social impacts of our product portfolio:-

SDG 12: Responsible consumption and production

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENT

Solvay discloses impact indicators for the SDGs in the corresponding sections of the Annual Integrated Report:

United Nations Sustainable Development Goals

Reference

CLIMATESDG 7: Affordable and clean energy

Extra-financial statements:
4.3. Energy

SDG 13: Climate action

Extra-financial statements:
4.1. Climate change
4.2. Greenhouse gas emissions
4.3. Energy
5.4. Biodiversity
7.1. Product design and life-cycle management
7.2. Circular economy
6.2. Critical incident risk management

NATURESDG 14: Life below water

Extra-financial statements:
4.2. Greenhouse gas emissions
5.4. Biodiversity
5.1. Water and wastewater
5.2. Waste
5.5. Hazardous materials

SDG 15: Life on land

Extra-financial statements:
4.2. Greenhouse gas emissions
5.4. Biodiversity
5.3. Air quality
5.1. Water and wastewater
5.2. Waste
5.5. Hazardous materials

BETTER LIFE

SDG 3: Good health and well-being

Extra-financial statements:
3.3. Health, safety and environment management
6.1. Employee engagement and well-being

SDG 6: Clean water and sanitation

Extra-financial statements:
5.1. Water and wastewater
5.2. Waste
5.5. Hazardous materials

SDG 8: Decent work and economic growth

Extra-financial statements:
6.1. Employee engagement and well-being
6.3. Labor practices
6.4. Diversity and inclusion
6.5. Recruitment, development, and retention

SDG 17: Partnership for the goals

Extra-financial statements:
3.5. Main partnerships
3.6. Memberships and advocacy
6.6. Corporate citizenship

SUSTAINABLE PORTFOLIO
SDG 12: Responsible consumption and production

Extra-financial statements:
7.1. Product design and life-cycle management
7.2. Circular Economy
5.1. Water and wastewater
5.2. Waste
5.5. Hazardous materials

173

174

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

2.6. Sustainability Accounting Standards Board (SASB)
Solvay discloses most of the sustainability disclosure topics and accounting metrics listed in the SASB Chemicals Sustainability Accounting Standard(October 2018).
Topic

SASB - CHEMICALS disclosure topics

Reference

Greenhousegas emissions

Gross global Scope 1 emissions, percentage covered under emissionslimiting regulations

Extra-financial statements:
4.2. Greenhouse gas emissions

Discussion of long-term and short-term strategy or plan to manage Scope 1 Extra-financial statements:
emissions, emissions reduction targets, and an analysis of performance
4.2. Greenhouse gas emissions
against those targets
Air quality

Air emissions of the following pollutants: (1) NOX (excluding N2O), (2) SOX, Extra-financial statements:(3) volatile organic compounds (VOCs), and (4) hazardous air pollutants
5.3. Air quality(HAPs)
Hazardous air pollutants notdisclosed

Energymanagement(1) Total energy consumed, (2) percentage grid electricity, (3) percentage
renewable energy, (4) total self-generated energy

Extra-financial statements:
4.3. Energy

Watermanagement(1) Total water withdrawn, (2) total water consumed, (3) percentage of eachin regions with high or extremely high baseline water stress

Extra-financial statements:
5.1. Water and wastewater

Number of incidents of non-compliance associated with water quality
permits, standards and regulations

Extra-financial statements:
6.2. Critical incident risk
management

Description of water management risks and discussion of strategies andpractices to mitigate those risks

Extra-financial statements:
5.1. Water and wastewater

Hazardous waste
management

Amount of hazardous waste generated, percentage recycled

Extra-financial statements:
5.2. Waste

Community
relations

Discussion of engagement processes to manage risks and opportunities
associated with community interests

Extra-financial statements:
6.6. Corporate citizenship

Workforce health and safety(1) Total recordable incident rate (TRIR), (2) fatality rate for (a) direct
employees and (b) contract employees

Extra-financial statements:
6.1. Employee health and safety

Description of efforts to assess, monitor, and reduce exposure of employees Extra-financial statements:
and contract workers to long-term (chronic) health risks
6.1. Employee health and safety
Product design for use-phaseefficiency

Revenue from products designed for use-phase resource efficiency

Extra-financial statements:
7.1. Product design and life-cycle
management

Safety andenvironmental
stewardship of chemicals(1) Percentage of products that contain Globally Harmonized System ofExtra-financial statements:
Classification and Labeling of Chemicals (GHS) Category 1 and 2 Health and 5.5. Hazardous materials
Environmental Hazardous Substances, (2) percentage of such products thathave undergone a hazard assessment
Discussion of strategy to (1) manage chemicals of concern and (2) develop
alternatives with reduced human and/or environmental impact

Extra-financial statements:
5.5. Hazardous materials

Geneticallymodifiedorganisms

Percentage of products by revenue that contain genetically modified
organisms (GMOs)

Not disclosed

Management of the legal
and regulatoryenvironment

Discussion of corporate positions related to government regulations and/or policy proposals that address environmental and social factors affecting
the industry

Extra-financial statements:
3.6. Membership and advocacy

Operationalsafety,emergency
preparedness and response

Process Safety Incidents Count (PSIC), Process Safety Total Incident Rate
(PSTIR), and Process Safety Incident Severity Rate (PSISR)

Extra-financial statements:
6.2. Critical incident risk
management

Number of transport incidents

Extra-financial statements:
6.2. Critical incident risk
management

Activity metric

Production by reportable segment

Solvay cannot share informationthat can be considered
competitively sensitive for
antitrust compliance reasons

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENT

175

3. GOVERNANCE
3.1. One Planet
GRI DISCLOSURES 2-24
3.1.1.

Definition

One Planet is our roadmap for a sustainable future that provides shared value for all. Solvay has always been best-in-class regarding its ESG
initiatives and ESG will remain at the core of our business. We remain committed to the actions we started since we launched ONE Planet in 2019,
tailored to the remaining business of the new Solvay.
One Planet is sorted per impact category, namely climate, nature, and better life, and for each category we describe:· What we are talking about, why it is important, and the main legislation, where relevant.
· What we want to achieve: Internal definitions which are relevant for the category, our footprint, our actions and ambitions, and key contacts.

3.1.2.

Management approachAn effective governance is in place at different levels and covers the three pillars: Climate, Nature and Better life. It involves integrating environmental,social, and governance factors into decision-making processes, ensuring accountability, transparency, and ethical behavior throughout theorganization. To do so, we have set up three steering committees including members of the ELT, governing each pillar of our ESG strategy: Climate
Steering Committee, Nature Steering Committee, and Better Life Steering Committee.
On top we have the Ethics and Compliance Board and the Safety monthly review by the ELT. We further describe their respective governance in§3.2.2. and §3.3.2.
Our ELT chaired by our CEO, defines the ESG orientations and sets sustainability targets for the Group. Additionally, it oversees annual reportingand disclosures as well as the company culture and values.
Being strategic for the Group we have set up at the Supervisory Board level an ESG Committee. The ESG Committee considers the material ESG issues
relevant to the group’s business activities; provides guidance and recommendations to the board, including in the context of the implementationand potential review of “One Planet” sustainability strategy and the Group’s non-financial reporting; and ensures the implementation of the new
Corporate Sustainability Reporting Directive (CSRD), when applicable. The ESG Committee meets three times a year.
The management approach and metrics have been deployed in all entities of the Group. Each Global Business Unit (GBU) president is accountable
for the progress of One Planet in their business, and delegates the coordination of the roadmap to a senior executive in their leadership team.
A network of Sustainability Champions and correspondents ensures that the Guide is deployed in all Solvay sites, GBUs, and Corporate Functions.
They inform their entity about any changes to the strategy and objectives, ensure necessary training is organized, and develop an annual and multiyear roadmap to meet final objectives. They are then responsible for implementing the roadmap in their entity, though the leaders of every entity
take full ultimate responsibility for performance, also taking into account that progress relative to targets impacts the variable remuneration of allsenior staff in the entity.
Definitions, management approach, indicators and targets, and main actions specific to each topic are described in the corresponding sections of
the Extra-financial statements. The management approach is adjusted each year based on the following elements:· feedback from employees, suppliers, and customers;· knowledge gained from performance and progress in relation to strategic commitments;· challenges orchestrated by the Executive Leadership Team, facilitated by the Sustainable Development Function, taking into account changes in
the marketplace and higher expectations from Solvay executives;· the evolution of frameworks and reporting standards, such as GRI Standards;· the auditors’ report on high materiality aspects;· feedback from practitioners;· feedback from sustainability rating agencies; and· feedback received on the Annual Integrated Report, such as the World Business Council for Sustainable Development’s “Reporting Matters”
yearly analysis.

176

3.1.3.

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Indicators and targets

Performance is monitored through a dashboard with the results of One Planet for the entire group.
· We look to be leading when it comes to climate, with bold commitments. We aim at:-carbon neutrality (Scope 1 & 2) by 2050;
reducing Scope 1 & 2 emissions by 30% by 2030 and Scope 3 by 20% by 2030 (Focus 5 categories); andphasing out coal by 2030 when renewable alternatives are possible.

· Additionally, since the creation of Solvay, we have pioneered social welfare. We aim to remain outstanding on better life with:-zero accidents;
gender balance in top and mid management within 10 years; anda living wage to 100% of the workforce by 2026.

3.2. Management of the legal, ethics, and regulatory frameworkGRI DISCLOSURES 2-26 2-27 3-3 205-2 205-3 406-1 412-1 412-2 415-1
MATERIALITY: HIGHManagement of the legal, ethics, and regulatory framework encompasses business ethics, namely human rights, anti-corruption, non-discrimination,
and anti-competitive behavior.

3.2.1.

Commitments and policies

Solvay’s Code of Business Integrity
Solvay’s Code of Business Integrity and the policies and procedures adopted to enhance good governance apply to all employees wherever they
are located. In addition:· third parties are expected to act within the framework of the Code of Business Integrity;· all core suppliers must confirm that they adhere to the principles set out in the Solvay Supplier Code of Business Integrity;· majority-owned joint-ventures are held to the Solvay Code of Business Integrity, or to a separate code adopted based on similar principles;· Solvay’s Code of Business Integrity and Solvay’s Supplier Code of Business Integrity are available on Solvay’s website; and data security.

Anti-Bribery and Anti-Corruption Policy and Policy on Gifts and Entertainment
Solvay’s Code of Business Integrity expressly states that the Group prohibits bribery in any form. Solvay and our employees do not use gifts orentertainment to gain competitive advantage. Facilitation payments are not permitted by Solvay and disguising gifts or entertainment as charitable
donations is also a violation of the Code of Business Integrity.
The Code is supported by more detailed policies. At the end of 2020, Solvay split its Gifts, Entertainment, and Anti-Bribery Policy into two separate
policies: an Anti-Bribery and Anti-Corruption Policy and a Policy on Gifts, Entertainment, Charitable Donations, and Sponsorship.
The Group employs an internal tracking system to record gifts and entertainment that exceed the acceptable reasonable value as indicated in the
Policy, as well as charitable donations and sponsorship with charitable purpose, and requires managerial approval for accepting or giving them.
Ethics and Compliance Department analysis and prior approval is also required when the gift or entertainment is to be offered to a Government
Official, as well as for charitable donations exceeding a defined threshold, ensuring adherence to the policy and compliance with the law. The useof the Gift and Entertainment Tracking System (GETS) is part of Solvay’s Internal Audit review process.
Solvay is also a member of Transparency International Belgium.

Human Rights in Business Policy
Solvay’s Human Rights in Business Policy, published on our website, sets out Solvay’s commitment to respecting human rights and acting with due
diligence to avoid any infringement of human rights or any adverse impact on or abuses of such rights. The policy emphasizes Solvay’s commitments
to our stakeholders, namely our employees and business partners, the communities and environment in which we operate, and children. Solvay’s
policies on human rights are under review to ensure it is reflecting Solvay’s commitment to the evolving regulatory standards.

Human rights due diligence and risk assessment
Human rights risks at Solvay sites are assessed with a main focus on our business partners, namely suppliers and contractors identified according to
the risk associated with the country they operate in.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENT

177

To assess human rights risks and impacts across our upstream value chains, Solvay developed an ESG risk management approach for our supply
chain. This provides a systematic approach for identifying risks and assessing their severity in more than 60 upstream value chains. Using theresults of this exercise, Solvay has subscribed to a third-party risk management platform for adverse media screening in order to monitor andidentify risks and impacts related to different matters such as modern slavery and human rights (including forced labor and child labor); anti-bribery
and corruption; and environmental, social, and governance. This provides transparency through its value chain, enabling Solvay to develop risks
mitigation action and remediation plans.
In addition, the Internal Audit team gathers assessments to determine if the site has established policies and processes for addressing impacts
on value chain workers. This includes evaluating engagement, decision-making, remediation of negative impacts, and the presence of channels
for worker concerns. The assessment also covers planned actions and the percentage of suppliers committed to the Supplier Code of Business
Integrity.

Competition Law Policy
Solvay’s goal is to conduct business ethically and not to enter into any business arrangements that eliminate or distort competition. Solvay develops
and maintains a culture of compliance to keep the company and our people on the right side of the law. Solvay has a formal Competition Law Policythat stresses the importance of strict adherence to all competition laws. It has been approved by Solvay’s Executive Committee and is published on
Solvay’s intranet, to which all our employees have access. Any violation of this policy may result in disciplinary action, subject to, and in conformity
with, applicable laws.

Implementation of the Competition Law Policy
Solvay has put in place a Competition Law Compliance Program that has a zero-tolerance approach to competition law infringements. As part of
our Competition Law Compliance Program, we provide a competition law toolkit on the Solvay intranet that includes up-to-date guidelines on
specific areas of competition law, including guidance on dealing with competitors, dawn raids, information exchange on mergers and acquisitionstransactions, swaps, price announcements, and vertical relationships.
To minimize cartel risks, Solvay has put in place a computer-based system that tracks all contacts relevant employees have with competitors througha procedure based on managerial approval.

3.2.2.

Resources and responsibilities

Solvay set up a compliance organization to reinforce a group-wide culture based on ethics and compliance. The Ethics and Compliance Department
operates under the leadership of the Group General Counsel and Corporate Secretary General. It consists of Regional Compliance Officers who
are located in the regions in which the Group operates, reporting to the Chief Compliance Officer. This department is responsible for fostering
Solvay’s culture of integrity, overseeing the implementation of Solvay’s Ethics and Compliance Program, providing guidance and advice to theGroup leadership and operations, and investigating, either alone or with the assistance of other departments, all reports that are brought to its
attention. The Chief Compliance Officer chairs the Business Ethics Board and reports annually to the Audit Committee of Solvay’s Board of Directors
on general ethics and compliance matters and on trends and data related to the Speak Up Program in accordance with confidentiality standards.
Solvay has a dedicated team of legal experts for competition law within the General Counsel Function. They are responsible for implementing theCompetition Law Compliance Program and are in charge of providing competition law advice and guidance, as well as deploying effective andregular communication and training on subjects related to competition law.

3.2.3.

Grievance mechanisms

Employees have various internal channels through which they are encouraged to report suspected violations or concerns. These include line
management, Ethics and Compliance, the General Counsel Function, Internal Audit, Human Resources, and employees’ representatives.
A group-wide Speak Up program is in place and overseen by the Audit Committee of the Board of Directors. An external, third-party helpline,
active 24 hours a day, 365 days a year, allows employees to ask questions, raise concerns, or file reports. The helpline is open to internal and external
parties, available in 19 languages covering Solvay’s locations. The helpline can be found in the Ethics and Compliance section of Solvay’s website.
The following table shows the types of reports made from January to December 2023 through Solvay’s Speak Up program.

178

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

SOLVAY’S SPEAK UP PROGRAM
In line with paragraph 2.2 ("Reporting scope and boundaries"), we applied distribution keys to allocate the Speak Up program reports between
Solvay and Syensqo. When this split resulted in decimal numbers, the KPIs were adjusted to whole numbers to be displayed in the report. This
rounding caused negligible distortions between totals and breakdowns in below tables.
Reports in process respective to functions not allocated between Solvay and Syensqo were not split according to the distribution key for Speak
Up program reports of paragraph 2.2 ("Reporting scope and boundaries"), but attributed to the company actually managing the report after the
separation.

Number of reports

2023

2022

Misconduct or inappropriate behavior

16

12Discrimination

3

2

Harassment including retaliation

12

6

Conflict of interest

5

6Computer, email, internet use, and social media

1

2

1

2

3

2

Bribery/Corruption

2

1

Antitrust/Competition

1

0

0

4

Data privacy

22International trade/Trade compliance

10

Substance abuse

02

Embezzlement, theft, robbery

10Violence or threat00

HR matters

10

10Diversity, equity, and inclusion

5

5

1

0

1

0

Other

4

3

Total

69

59

Previously: Discrimination including harassment and retaliation

Previously: Computer, email, internet
Environmental, health, or safety
Previously: Environmental, health, or safety law
Accounting, auditing matters, finance and banking
Previously: Auditing matters, financial records and banking, accounting or auditing

Previously: Anti-bribery
Confidentiality and misappropriation
Previously: Confidentiality/Misappropriation

Previously: International trade compliancePreviously: Theft

Human rights violations
New category: Fraud

Through the Speak Up program, any concerns relating to a breach are followed-up on and investigated as appropriate by Ethics and Compliance.
In keeping with our commitment to transparency, the Ethics Helpline is used to report progress on investigations and give feedback to thoseconcerned as appropriate. The Ethics Helpline is easily accessible through Solvay’s website, a toll free number, or a QR-Code, and is available toemployees and third parties.
We continued increasing awareness about speaking up and raising concerns without fear of retaliation when people notice a potential breach of ourCode of Business Integrity. Speak Up was also part of the annual mandatory training for all our employees, in order to raise awareness that speaking
up applies to the full spectrum of topics referenced in the Code of Business Integrity. This led to a continuous increase in reported incidents, as
reflected in the overview, improving our ability to detect, identify, and address breaches. The increase in reported incidents does not imply that
there were more incidents or issues in 2023 than before, but shows that employees report concerns or potential breaches, enabling Ethics andCompliance to investigate and address them. A new topic, Fraud, was added to our Ethics Helpline.

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

179

The Board’s Audit Committee oversees the Speak Up program and reviews the effectiveness of the process and the outcomes.
In 2023:· 69 cases opened:-

13 cases still in progress
56 cases resolved. These include:
23 substantiated cases,
14 unsubstantiated cases,
6 insufficient information,
1 misdirected, and11 referred/transferred.

Definitions:· Substantiated: The allegation or at least one of the allegations are considered founded.
· Unsubstantiated: None of the allegations are considered founded.
· Misdirected: A case has been reported to Ethics and Compliance but does not fall under Ethics and Compliance’s scope.
· Referred/transferred: A case has been reported to Ethics and Compliance but needs to be addressed by another department.
· Insufficient information: If a reporter has not provided sufficient information and/or Ethics and Compliance is unable to collect sufficient information
to conclude whether an allegation is substantiated or unsubstantiated.

RESOLVED CASES
Cleared of
involvement

Termination

Final written/Legal
warning letter

No actionnecessary

Policy/Process review

Substantiated

0

2

1

0

1

Unsubstantiated

0

0

0

12

2

Performance
improvement plan

Training

Training/
Coaching required

Substantiated

0

2

1

12

3

Unsubstantiated

0

0

0

0

0

3.2.4.

Verbal feedback/
Written/
Warning Feedback warning

Communication and training

Solvay’s Code of Business Integrity
Mandatory Code of Business Integrity training, both in person and web-based, is organized for all employees to ensure a strong culture of integrityat Solvay, to understand and address behavioral risks, such as bribery and corruption, conflict of interest, and harassment. As part of this training,
employees are also trained on the Speak Up culture and Ethics Helpline. Specific training modules are tailored to the leadership, including Listening
Up. In the period 2022-2023, 99.6% of the target population was trained on the Code of Business Integrity, which is available in 18 languages. To
complete the training, employees must certify that they are in compliance with the Code of Business Integrity, understand their role in protecting aculture of integrity, and can report any violations to the available channels and Ethics Helpline. Internal Audit regularly reviews the implementationand completion rate of training modules as part of their audit engagements.

Competition law and antitrust
Solvay has a concrete Competition Law Compliance Action Plan, designed to mitigate the specific risks the Group has identified in this field of law.
It has been in force since 2003 and is updated yearly. In 2023, it covered e-learnings on competition law in general, on competitive intelligencegathering, and on the use of the above-mentioned computerized tracking system of meetings with competitors. We also organized ad hoc training
for specific high-risk target population. The participation rate of the relevant training campaign in 2023 was above 95%.

Anti-bribery and anti-corruption
Anti-bribery and anti-corruption web-based training is carried out on a two-year cycle for a pre-identified target population, which includes all
employees grade S15 and above. The most recent online training course, available in 16 languages, took place in 2023; 98.68% of the target
population was trained. The training will be rolled out again in 2025.

180

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Public policy
Solvay pursues a constructive dialogue with governmental and political stakeholders, both to ensure and improve our license to operate and as
part of our commitment to developing sustainable solutions with partners. This exchange helps us to understand societal trends and anticipate
legislative and regulatory expectations and developments as well as to advocate for and communicate our views in support of Solvay’s interests.
These include:· Promoting sustainable solutions to act on climate change and facilitate the energy transition: Solvay supports the UN Paris Climate Agreement
and contributes to implementing it. We therefore argue for the development of a clear and predictable legislative framework that promotes
sustainable growth while maintaining industry competitiveness and ensuring a balanced transition to a low-carbon economy.
· Competitiveness: Solvay advocates for a regulatory system that fosters entrepreneurship and industrial innovation by safeguarding or improving
competitiveness, and that creates highly skilled jobs worldwide.
· Environmental and chemical policy: Solvay collaborates with trade associations, public authorities, and other stakeholders to develop science- andrisk-based regulations and standards that promote a more sustainable industry and products.
· Promoting global trade: As an international company, Solvay recognizes the importance of free trade based on a multilateral and rules-based
trading system. Reducing trade barriers is essential for economic growth and thus for industrial activity.
· Geopolitical assessment: Solvay assesses the geopolitical situation in order to better understand the potential impact, in relation to trade, logistics,
investments and security, on our businesses.
Solvay’s Government Affairs and Country Management Function is responsible for coordinating our relations with government and political officials.
In line with Solvay’s Code of Business Integrity, and with the aim of ensuring the best possible business environment, the Government Affairs andCountry Management team works to foster long-term partnerships with public authorities and other relevant stakeholders. They do this by building
a transparent and constructive dialogue that supports company strategy.
In our relations with government officials, we commit ourselves to responsible, honest, and transparent action based on our values and principles.
We are committed to ensuring that our dialogue and advocacy complies with our Code of Business Integrity and the rules and principles set out inour policies. Employees involved in relations with government officials have to take mandatory training on business integrity, competition law, andantitrust and anti-corruption. In addition, we welcome initiatives for greater transparency in the area of interest representation and are listed as acompany in the Lobby and Transparency registers of the European Commission, the United States, France, and Germany.
Solvay’s public policy activities include participation in industry and trade associations, as outlined in section 3.6. Membership of associations. We
aim to conduct political relations and advocacy with our own staff resources, meaning that relevant contacts and meetings between Solvay andpolitical stakeholders are made and held by Solvay representatives in person, and not by agency or partner staff acting on behalf of Solvay.
The Group does not take part in political party activities, nor do we make corporate donations to political parties or candidates, as indicated in
the Group’s Policy on Gifts, Entertainment, Charitable Donations, and Sponsorship. We engage in constructive debate with public authorities on
subjects of legitimate interest to Solvay, where necessary, but only those employees specifically authorized to do so may carry out such activities.
Solvay respects the freedom of our employees to make their own political decisions. Any personal participation or involvement by an employee inthe political process must be done on an individual basis, on the employee’s own time, and at the employee’s personal expense.

Ethics and Compliance website
Solvay has implemented and launched in 2023 an Ethics and Compliance section on its website. The pages provide information on Solvay’s Ethics
and Compliance program, including its four pillars structure and alignment with our Core Beliefs, make the Code of Business Integrity and additional
Ethics and Compliance policies available and accessible, and provides information on the Ethics Helpline, as well as the link for employees andexternals to access the third-party helpline through which questions, concerns, or reports can be registered.

3.2.5.

Animal testing

Solvay provides innovative products for a wide variety of uses and a large number of users. The Group must have a proper understanding of thehazards of our products in order to carry out our activities and protect users, the general public, Solvay personnel, and the environment. With society
continually pushing for new, better, and safer chemicals and plastics, there is growing demand from both regulatory authorities and the public for
product risk and hazard assessments. These require testing, both with and without the use of animals.

Testing
To comply with new and existing chemical regulations, or to further consolidate safety data, Solvay commissioned animal tests in 2023. Solvay avoids
animal testing whenever possible, but in cases in which animal testing is required we commit to conducting studies that treat animals humanely,
giving them the best care possible, and using all animals responsibly, with great regard for their welfare. In compliance with European cosmetic
regulations, Solvay does not perform specific testing solely to support cosmetic uses.

Substance-based testing for multiple applications
Solvay carries out tests required for all regulations and applications relating to a given substance just once. We avoid the need for new studies byactively advocating for the reuse of data from studies conducted within a given framework, such as REACH, for other registration systems.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENT

181

Ethical compliance
Solvay’s policy, outlined in the Solvay Animal Care and Use Procedure, is to apply the “3R principles” (Replacement, Reduction, and Refinement) ineach case and to comply with all applicable regulations. All of our studies comply with international standards, such as Organization for Economic
Cooperation and Development (OECD) guidelines. The AAALAC accreditation is one of our selection criteria for labs performing toxicologicalstudies. For labs performing only ecotoxicological studies (with fish as vertebrates) this is not common. This worldwide organization sets quality
standards for testing laboratories and ensures responsible and humane treatment of laboratory animals. Before they start, all studies commissionedby Solvay are subject to an ethical assessment at local or national level by the laboratory conducting the study.
Once a study is underway, Solvay staff monitor the execution and quality of the studies and maintain a continuous qualification and evaluation
program for the laboratories. A dedicated Solvay corporate committee reviewed the animal testing activities commissioned by Solvay during 2023,
verifying conformity with the principles and mandatory elements of Solvay’s Animal Care and Use Procedure.

VERTEBRATE ANIMAL TESTS COMMISSIONED BY SOLVAY IN 2023
Number of studies

Number of vertebrates (*)

10

4,236

10

4,236

Registration obligations (EU, China, Korea, US)
Additional product safety questions (toxicity, classification)
Total(*) Includes all animals, including control animals not being exposed to test substances and used as reference.

Regulatory testing
In 2023, 100% of the vertebrate animals were used to address mandatory requirements from authorities. In total, 4,236 vertebrate animals (96% rats,
4% rabbits) were used. Solvay did not commission any studies on dogs, cats, pigs, or non-human primates. Most vertebrate animals (95%) were usedin tests required by the EU REACH Regulation, although these studies will also be valid for demonstrating compliance with chemical regulations
elsewhere in the world. The number of vertebrate animals used in 2023 was at a similar level as previous year with the same scope (without Syensqo).

Drivers for the future
While studies are needed for regulatory and scientific purposes, Solvay continues to strengthen its capabilities and understanding of alternative
methodologies that do not involve vertebrate animals. In addition, QSARs and Read-across approaches are applied to avoid new studies onvertebrate animals to be launched.
However, the higher tier animal studies requested by authorities, which required the largest number of animals in 2023, will continue to be the major
driver for animal tests in the near future. A significantly higher number of these studies is already ongoing and it is therefore expected that the
number animals in 2024 will increase in comparison with 2023.
Advances in the implementation of non-animal methods and alternative hazard identification strategies are crucial if a reduction of animal use
in hazard assessment is to be achieved. For instance, with the upcoming information requirements for endocrine disruptors and aquatic chronic
toxicity, more, rather than less, animal testing appears to be required in Europe.

182

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

3.3. Health, safety and environmental management
GRI DISCLOSURE 2-25
MATERIALITY: PRIORITY
SDG 3, 6, 7, 12, 14, 15
3.3.1.

Definition

Solvay’s health, safety, and environment (HSE) management system is aligned with ISO 45001 and ISO 14001 definitions and our Responsible Care
Policy.
Through our Responsible Care Policy, we commit to safeguarding people and the environment, by continuously improving our environmental,
health and safety performance, the security of our facilities, processes, technologies, and chemical product safety and stewardship throughout the
supply chain. This reflects Solvay’s position as a signatory to the ICCA’s Responsible Care Global Charter®.

3.3.2.

Management approach

Solvay’s HSE strategy relies on the following:· An approved HSE management system, which is implemented at every industrial (manufacturing and research and innovation) site. This includes
a Responsible Care Policy and a set of risk-based procedures that apply to all areas, including health monitoring, industrial hygiene, occupationalsafety, process safety, transport safety, and environment and product safety. For each domain, a network is organized at group level to ensure
implementation of the procedures, compliance with regulations and sharing of good practice.
· A Product Safety Management System (PSMS), applied in every Global Business Unit.
· A safety culture approach, which ensures people’s safety, health, and well-being. It relies on a safety leadership style, where managers act as
mentors and demonstrate genuine care for all.
· A reporting process used to evaluate performance, analyze events, and define short- and long-term improvement plans.
Safety is supervised by the ELT as part of its monthly session agenda. Performance is reviewed including the analysis and learnings of most recent
events and ELT provides its orientations.

Industrial sites
Each industrial site:· Implements at least one approved health, safety and/or environment management system, in compliance with Solvay’s Responsible Care Policy.
· Sets up a dedicated, systematic regulatory watch mechanism.
· Undergoes a compliance audit conducted by an internal or external third party at least once every five years, addressing both regulatory andinternal requirements.
· Addresses all identified risks, areas for improvement and gaps in compliance.

Environmental rehabilitation
Solvay’s HSER Department is responsible for managing the environmental liabilities resulting from the Group’s industrial and mining activities.
HSER helps the sites and GBUs manage their environmental legacy, whether historical or recent, providing them with technical expertise and cash
management through environmental provisions. Where local regulations allow, a risk-based approach is used to define management actions. For
our operational sites, HSER collaborates with the local HSE team. Our closed sites are managed directly by the HSER team on behalf of the relevant
legal entities. HSER is also responsible and accountable for managing group environmental provisions.

3.3.3.

Indicators

Approved HSE management systems at sites
Of our 45 sites, 91% have a management system in place and have been audited by a third party in the past five years. Sites with fewer than
10 people or that are not under Solvay’s operational control are excluded.
Twenty-four of our sites are certified by ISO 45001, 32 are certified by at least one of ISO 14001 and ACC RCMS 14001, and 26 are certified and have
implemented both ISO 45001 and ISO/RC 14000 systems.
Twenty-eight of our sites have another approved management system in place:· The Responsible Care Program by Asociación Nacional de la Industria Química (ANIQ) in Mexico.
· The Responsible Care Program by Associação Brasileira da Indústria Química (ABIQUIM) in Brazil.
· The Occupational Safety and Health management system (GB/T 33000-2016) in China.
· The Occupational Safety and Health Administration Voluntary Protection Programs (OSHA VPP management system) in the US.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENT

183

Regulatory Watch
Solvay has installed a systematic process for monitoring regulation in all domains – health and safety, process safety, environment, and transport
safety – at 85% of our sites.

3.4. Supply chain and procurement
GRI DISCLOSURES 308-1 308-2 407-1 414-1
MATERIALITY: MODERATE
3.4.1.

Definition

Our supply chain organization accounts for about 850 people. Almost all of them are located in the GBUs, where they are in charge of planning,customer care, logistics operations, and improvement projects. We also have programs in place to foster continuous improvement in the value
chain performance of our GBUs, while also contributing positively to cost and cash management, as well as fulfillment at the service of customers.
Our procurement organization consists of about 450 people, located in Corporate Procurement and the Purchasing Service Line support teams.
Their mission is to source products and services leveraging scale and expertise, and to secure sustainable value creation and supply security todirectly support Solvay’s strategy and One Planet agenda.

3.4.2.

Management approach

Solvay integrates our Corporate Social Responsibility (CSR) principles and One Planet ambition into our procurement processes and strategies inorder to create sustainable business value in collaboration with our suppliers.

Procurement strategy
Procurement resources and capabilities are shared across an international network of category and sourcing managers, and individuals responsible
for site procurement, all of whom follow a common way of working known as the Solvay global procurement process.
Our procurement strategies are defined by category experts in collaboration with the GBUs. These strategies are then executed and deployedat global, regional, or local level, depending on the category specifics and suppliers’ market structure. Our strategies include ESG elements andcriteria.

Core suppliers
Solvay applies supplier segmentation in order to identify key suppliers, which we refer to as core suppliers. Core suppliers encompass three
categories:· Strategic Alliances: Strategic suppliers at group level that contribute to Solvay’s growth, market differentiation, and innovation.
· Strategic Partners: Suppliers that deliver strategic materials or services to Solvay that can have a possible business impact.
· Bottlenecks: Suppliers that represent a high potential risk to Solvay or the business.
This approach enables Solvay to focus on managing performance, mitigating supply risk, and improving relationships, while also forming the basis
for collaboration and stimulating innovation.
Actions to be performed, such as carrying out a supplier evaluation survey, or requesting a mandatory third-party sustainability assessment, aredefined according to the type of supplier. Key Account Managers are appointed for some of our core suppliers, allowing us to generate additional
value and mitigate risk through strategic relationships. We have identified 232 suppliers as core suppliers and 92% of them are currently covered bya third-party sustainability assessment.

Together for Sustainability initiative
Solvay is a founding member of Together for Sustainability (TfS), a global procurement-driven initiative that aims to improve the sustainability
performance of chemical companies and their suppliers.
The TfS program is based on the UN Global Compact and Responsible Care® principles. It provides a framework and tools – TfS Assessments and
TfS Audits – that enable TFS member companies to assess, drive, and improve the sustainability performance of chemical supply chains through ashared infrastructure. TfS assessments are carried out by the initiative’s key partner EcoVadis, a global service provider specialized in sustainability
performance assessments. For audits, TfS cooperates with TfS-approved audit companies.
Since last year TfS also provides Product Carbon Footprint (PCF) Guidelines which enable chemical companies and our suppliers to share anddevelop high-quality carbon footprint data, which is an essential tool to drive decarbonization initiatives in the industry.
In the meantime, in 2023, the TfS Academy, which was rolled out the previous year, extended to more than 390 capability building courses in
11 languages.
Furthermore, membership in TfS grew to 50 by the end of 2023. This increased the reach and impact on the sustainability performance of chemical
supply chains, covering over €500 billion of combined spend and over €800 billion of global turnover.

184

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

ESG risk in the supply chain
To tackle human rights and environmental impacts across our value chains and to comply with the dynamic regulatory landscape, Solvay has
developed an ESG risk management approach for our supply chain. The aim is to comply with the existing and upcoming ESG regulations,especially on environment and human rights (e.g., EU Mandatory Human Rights and Environmental Due Diligence Legislation and the German
Supply Chain Due Diligence Act). This requires corporate governance practices to better integrate risk management and risk mitigation in theirprocesses. Our policy for ESG Risk Management (build and maintain overall ESG risk matrix and supplier risk management) provides a systematic
approach for risk identification and risk severity assessment of more than 60 upstream value chains and triggers risk mitigation action plans. In
addition to the internal risk management framework, we have also incorporated a third-party risk management tool for adverse media screening on:· environmental, social, and governance;· anti-bribery and corruption; and· human rights.
We have already incorporated around 5,000 suppliers in the tool. The suppliers were screened and are monitored on a permanent basis. We will
extend the suppliers number in 2024 and the following years. The suppliers we have selected are our core suppliers and the ones we consider underhigh ESG risk.
Furthermore, thanks to our due diligence process, 20 suppliers conducted a TfS audit in 2023 and 1,600* suppliers performed an EcoVadis
assessment.

Supplier Code of Business Integrity
Our Supplier Code of Business Integrity is key for the implementation of our Responsible Procurement Policy. It is fully aligned with Solvay’s Codeof Business Integrity and inspired by the UN Global Compact principles and Responsible Care® practices.
All written procurement contracts must make reference to the Supplier Code of Business Integrity or an acceptable alternative. Suppliers or partners
are invited to report any breach of Solvay’s ethical policies or Supplier Code of Business Integrity through the Solvay Ethics Helpline. Every report is
carefully reviewed by the Ethics and Compliance team, who review the case and conduct an investigation as appropriate.
Solvay is concerned that the trade in tantalum, tin, tungsten, gold, and the metals known as 3TGs that are refined from such minerals and mined incertain conflict-affected and high-risk regions, such as the Democratic Republic of the Congo and neighboring countries, may be contributing tohuman rights abuses. We are continuously working to improve our overview on 3TGs included in products, components, and materials supplied
to Solvay. Consistent with Solvay’s Supplier Code of Business Integrity, we require the cooperation of our suppliers in the implementation of
Solvay Policy on Conflict Minerals. As part of that process, we conduct due diligence concerning the necessary conflict minerals in the products
it manufactures or contracts to manufacture in accordance with the Organisation for Economic Co-operation and Development’s Due Diligence
Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (the “OECD Guidance”).
We continue to work to verify the integrity of our sourcing, and to support the actions of governments, our customers, and suppliers towardachieving this aim globally. If our suppliers fail to meet our expectations in this regard, we will take these factors into consideration when making
future business and sourcing decisions.

Renewable Raw Materials Platform
In 2023 we launched the Eiffel database – a collaborative online platform which allows everyone at Solvay to find renewable alternatives toconventional raw materials. It helps us to speed our transition towards a more sustainable and circular raw materials portfolio. Switching to massbalance, bio-based, recycled, or CO2 derived raw materials is key to help us develop lower carbon footprint solutions. The platform enables us
to find renewable alternatives that could be of interest in both the short and long term. It features an interactive and user-friendly dashboard with
key information such as the type of material and feedstock, certification details, suppliers, the region it is sourced from, how long Solvay has beensourcing it, and the end product it is used in.

One Buyer One ProjectIn 2023 we also launched the One Buyer One Project initiative aimed at reinforcing sustainability culture at Solvay and promoting best practices.
This ambition encourages each buyer to initiate and lead at least one sustainability project. Currently, there are 120 projects at different stages ofmaturity and impact. The projects are related to different areas in sustainability – from CO2, water, or waste reduction to renewable energy to circular
economy, biodiversity, etc. Many of these projects are replicable. We continue ramping up the projects and leveraging the initiative.

3.4.3.

Indicators

EcoVadis assessment
One of our main priorities for 2023 was to assess our core suppliers and suppliers identified via ESG risk management. During the year, a total of
1,600* Solvay suppliers were assessed through EcoVadis. These assessments currently cover 215 of our 232 core suppliers.

Raw materials
As a large chemical manufacturer, Solvay uses raw materials from a range of suppliers and sources: the overall volume purchased in 2023 was over2.86 million metric tons.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENT

185

NON-BIOSOURCED AND BIOSOURCED RAW MATERIALS – MATERIAL PURCHASED
2023

2022

Mineral products

1,000 metric tons

2,056

2,182

Biosourced products

1,000 metric tons

10

13

Natural gas

1,000 metric tons

537

621

Petrochemical

1,000 metric tons

247

309

Other raw materials

1,000 metric tons

15

17

Total

1,000 metric tons

2,865

3,141

Product Carbon Footprint (PCF)
One of our main priorities in 2023 was the collection of PCFs from our most GHG emitting raw materials’ suppliers. We have contacted 34 suppliers
who together emit around 80% of the CO2 in our upstream Scope 3 raw materials GHG emissions targeted scope as per secondary data. With anobjective to collect 35% of the product carbon footprint of the targeted scope, we have outperformed our target by reaching 54%.
To make further progress in reaching our Scope 3 target, in Q4 2023 we called on some of our top materials’ suppliers to share their climate strategy
and actions towards decarbonization so that we could understand how their plans would positively impact the carbon footprint of our products. The
first wave consisted of eight suppliers. A second wave of requests is planned for 2024.

Procurement Sustainability Training
Three hundred and thirty Sustainability Training sessions have been followed by our procurement organization employees. Every new hired employee in
Procurement follows all Procurement Sustainability Training modules. In 2024 we will update the training modules and launch a new training campaign.
*Due to the split of the company, this number is based on an assumption (55% of the total number of evaluated suppliers before the split).

3.5. Main partnerships
25. SDG 17
IndustriALL Global Union
Building on 20 years of strong industrial relations between IndustriALL and Solvay, we signed an improved Global Framework Agreement (GFA) on
March 31, 2022. The content of the agreement was strengthened around several important areas, including:· Telework rights· C190· EU due diligence and UN binding treaty – supply chain oversight· Just transition· Conflict resolution· Maintaining the agreement following the upcoming split of the company· Workers’ rights to health and safety· Skills transfer· Battery supply chain· US Taskforce Agreement renewed for the duration of the GFA
The four-year agreement includes serious commitments on due diligence along the supply chain. Taking note of the different international standards
on this issue, including the upcoming EU Directive on corporate sustainability due diligence, the agreement establishes a new working group of
workers and management to investigate supplier respect for core labor rights and seek remediation where problems are found. Solvay commits tosuspend contracts with suppliers that fail to remedy human rights and environmental abuses following warnings.

Wildlife Habitat Council
In 2021 we joined the Wildlife Habitat Council (WHC), an international NGO that works with businesses to encourage, promote, and certify
biodiversity conservation. The partnership helps us to better focus our efforts on biodiversity and identify areas for improvement, both at our sites
and in collaboration with our customers.
WHC is the only international conservation NGO focused exclusively on the private sector and is a leader in taking bold action for biodiversity
conservation through partnerships and education. WHC provides a framework for voluntary conservation action on a wide variety of corporate
lands, promoting a collaborative and comprehensive approach to conservation activities around the world.
Membership in the WHC helps us to implement conservation projects that are locally relevant, practical and adaptable to any regulatory requirements,
but which don’t conflict with operations. As part of our partnership, we work to mainstream biodiversity across sectors, in collaboration with our partners
and sites, taking concrete actions to protect species and habitats, and deliver impact through biodiversity restoration and enhancement at a local level.

186

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Entreprises pour l’Environnement
Entreprises pour l’Environnement (EpE) is the French partner of the World Business Council for Sustainable Development (WBCSD). Solvay is part of
the founding members of the association created in 1992 and gathering French and international companies committed to the ecological transition.
Solvay is active in the Biodiversity and Climate Change commissions. In 2023 Solvay sponsored and participated in the publication of the report“2030 Milestone for the Ecological Transition.” This survey conducted with partners in climate and ecological transition provides a global view of
the actions required to put France on a credible ecological transition trajectory by 2030, in line with the European commitments on climate andbiodiversity. The study findings opened the way to new business models structured around frameworks for actions. Solvay is already committed withclimate and Nature priorities, for example with the “act4nature International” engagements.

CSR Europe
CSR Europe is the leading European business network for Corporate Sustainability and Responsibility. With our corporate members, National
Partner Organizations (NPOs), and Associated Partners, we unite, inspire and support over 10,000 enterprises at local, European, and global level.
CSR Europe supports businesses and industry sectors in their transformation and collaboration towards practical solutions and sustainable growth.
They are for systemic change. Following the SDGs, CSR Europe wants to co-build with the European leaders and stakeholders an overarchingstrategy for a sustainable Europe 2030.

Society of Environmental Toxicology and Chemistry
SETAC is a global scientific organization (5,000 members) established in 1979, promoting research in environmental sciences and use of the research
results in policies. SETAC is an organization with a tripartite participation (academia, industry and authorities) in all its committees. Solvay is actively
participating in several committees (awards and science) and interest groups in the European branch of the association. As a member of the SETAC
EU board, Solvay participates to strategic decisions for the organization like the recent recognition of the organization at the International Platform
on Chemicals, Waste and Pollution (IPCP). As such, SETAC plays an important role in the evolution of environmental and chemical policies (e.g.,
Green Deal, CSRD, etc.). Finally, Solvay is actively participating in EU annual meetings, for example with the organization of a session on biodiversity.
Solvay toxicologists are also recognized scientists with participation in the Scientific Committee of the Belgian Association of Toxicologists (BelTox),
the French Society of Toxicology (SFT) and three Solvay experts are registered under the European Register of Toxicologists.

CERN: Fostering interest in STEM and STEM careers
As part of our efforts to get children and young people involved in science, technology, engineering, and mathematics (STEM) subjects, Solvay has
partnered with CERN, the European Laboratory for Particle Physics, to launch a three-year education program for high school students.
At CERN, physicists and engineers of more than 100 nationalities study nature’s tiniest building blocks, the fundamental particles, to find out how
our world and the universe work. They use the world’s largest and most complex scientific instruments, driving progress in a range of cutting-edge
technologies. Part of CERN’s mission is to inspire and train future generations of scientists and engineers to carry on this journey of exploration.
Every year, thousands of students and teachers, from all over the world, participate in CERN’s education and outreach program.
The CERN-Solvay Education Programme was launched in January 2022. Designed to foster interest in STEM and STEM careers, the program
combines both online and onsite learning at CERN, starting with education content aimed at a global online audience and progressing to an
opportunity for students to engage more deeply with research at CERN.
It is part of the education portfolio of Science Gateway, CERN’s new flagship project for science education and outreach.
The program has three levels – Level 1: Online social media education content; Level 2: Online course for high school students; Level 3: Onsite
CERN-Solvay student camps for high schoolers.
Main KPIs for Level 3: 797 applications started; 607 applications completed; 72 nationalities; and 82 binational applicants.

SCOPE

KPI’S (CERN)

worldwide +1.3 millions views

90 courtries

10.000 online students

44% female applicants

30 residentially for summer camps

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENT

187

Well-being at work
Workplace Options
We have a single global contract since December 2021 with Workplace Options, which ensures our Employee Well-being Support program worldwide. All
the employees and their family members have access 24/7 to confidential mental health support by psychologists in their own language. Apart from thisassistance, they can be contacted for additional services such as coaching, work-life services, individual mindfulness, managers’ development, or training.

Empreinte Humaine
This is an international consultant company for well-being at work and prevention of psycho-social risk factors. We have been collaborating withthem since 2018 for training on well-being at work, including workshops for managers and employees, webinars and e-learning. In 2023, they
provided face-to-face workshops for managers “Leading with a well-being mindset” in 13 languages and 18 countries.

University Jaume
Since 2021 we have been collaborating with Dr. Salanova, Chair of Organizational Psychology in the University Jaume I (Spain) and an international referencein Positive Organizational Psychology. She is involved with a similar approach in the European H-Work Project aiming to promote mental health in small
and medium-sized enterprises and public workplaces, drawing on funding from the European Union’s Horizon 2020 research and innovation program. Withher, we deployed at Solvay a model of Healthy and Resilient Organization (HERO), starting with a pilot phase, and following with a global HERODEI survey
at the end of 2022. This helped us to assess which risk factors we need to address for well-being at work, as well as the positive factors that we can build
on to create a sustainable better life at work, at Group and site level. Action plans were defined and integrated in STAR Factory as a consequence.

Diversity, equity, and inclusion
Catalyst
Solvay has partnered with Catalyst, a global nonprofit, to help build workplaces that work for women through advocacy, research, and education.
The organization focuses on five key areas: (1) advancing women, (2) women and the future of work, (3) lead for equity and inclusion, (4) MARC – Men
Advocating Real Change, and (5) the Frontline Employee Initiative. Since 1962, Catalyst has conducted a wealth of research to support companies’
DEI initiatives to make change, measure impact, and accelerate progress for women through workplace inclusion.

Disability:IN
Disability:IN is a leading global nonprofit resource for business disability inclusion. The organization’s network of over 500 businesses expands
opportunities for people with disabilities around the world. Disability:IN’s head office and 25 affiliates serve as a collective voice effecting change
in business for people with disabilities. Initiatives include focusing on digital accessibility, hosting an employer roundtable for neurodiversity atwork, and running a next generation leadership program for college students and recent graduates with disabilities. Solvay first partnered with
Disability:IN in 2021 and we continue to participate in their Disability Equality Index, an annual benchmarking of corporate disability inclusion
policies and programs in which we have continued to improve on.

Out & Equal
Through their worldwide programs and events and Fortune 500 partnerships, Out & Equal helps LGBTQ+ individuals flourish, supportingorganizations in creating a culture of belonging for all and establishing LGBTQ+ workplace equality. Solvay has partnered with Out & Equal towork on LGBTQ+ workplace equity, inclusion, and belonging. Among the Out & Equal programs are DEI education in the workplace, inclusion
frameworks with a regional focus on LGBTQ+ community engagement groups, and their annual Summit, the largest LGBTQ+ workplace inclusion
event in the world where we had three employees represent Solvay to participate in meaningful discussions, panels, and workshops and to discuss
actions to advance LGBTQ+ inclusion and well-being in the workplace.

3.6. Membership and advocacy
GRI DISCLOSURES 2-28
The Group maintains a dialogue with stakeholders and is a member of several associations at global, regional, and national levels. Trade associations adopt
policy positions as close as possible to a consensus. Member companies can still express their specific positions in a number of ways, including discussions
within working groups or public stances that may differ from those of the trade associations.
According to internal rules, memberships should be aligned with our business strategy and our company interests. The association should support Solvay’s
business and company interests, and should be in alignment with Solvay’s public policy interests. The memberships are reviewed on a regular basis, tocheck whether positions taken by associations are still aligned with Solvay’s interests.
Senior Solvay representatives sit on the steering boards of many of the associations we are a member of. We also participate in working groups, and policy
coordination groups. The major association memberships in the regions and countries where Solvay is present are listed below.

3.6.1.

International Council of Chemical Associations

Solvay is a member of the International Council of Chemical Associations (ICCA). Through Responsible Care®, which is an essential part of the ICCA’s
contribution to the Strategic Approach to International Chemicals Management (SAICM), global chemical manufacturers commit to pursuing safe chemical
management and performance excellence worldwide.

188

3.6.2.

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

European Chemical Industry Council

The European Chemical Industry Council (Cefic) is the forum and the voice of the chemical industry in Europe. The association facilitates dialoguethat allows the industry to share its technical expertise with policymakers and other stakeholders. Solvay experts provide input on energy, industrial,
environmental, and research policy, as well as on issues relating to product stewardship. Solvay representatives also work with the different Cefic
sector groups on specific issues related to individual substances or groups of substances. In addition, we play an active role within Cefic in leadinga proactive industry response to the need for a more innovative and sustainable chemical industry. In 2023, Cefic decided on joining the Science
Based Targets initiative (SBTi) standards for the chemical industry. Solvay also participated on behalf of Cefic in the EU Commission high-level
roundtable on the EU Chemicals Strategy, an active stakeholder platform with business representatives, NGOs and academics, and has beenclosely involved in developing a policy response to competitiveness challenges in Europe for the chemical industry.

3.6.3.

France Chimie

France Chimie represents chemical sector companies in France in front of public authorities at national, European, and international level. Solvay
France Délégué Général François Pontais is a Member of France Chemie’s Board and ExCom. The association integrates 12 regional federations,representing 1,300 companies nationwide, and provides expertise and support relating to technical, economic and fiscal legislation, and social andlabor affairs. Solvay representatives contribute to all key commissions. This includes those concerning competitiveness, with two Solvay sites rated
among a pool of sites at “competition risk” in France; energy and logistics, which focuses on the decarbonization subsidy plan; and health, safety,
and environment (HSE). In 2023, Solvay actively supported France Chimie positions to further decarbonize the chemical industry and promote theuse of renewable energy sources. Solvay also supported water management approaches through the French “Water plan” launched in the spring
and through participation to the board of the Agence de l’Eau Rhône Méditerranée Corse and the “Comité de Bassin.”

3.6.4.

Federchimica

Federchimica is the Italian chemical industry association. Our Country Manager in Italy is Vice President of the association’s Board. Federchimica
facilitates dialogue with regional and national policymakers and government bodies, by sharing technical expertise and knowledge with policymakers
and other stakeholders. Solvay experts participating in Federchimica provide input on energy, industrial, environmental, and research policy, as well
as issues relating to product stewardship.

3.6.5.

American Chemistry Council

The American Chemistry Council (ACC) represents a diverse set of companies engaged in the chemistry business. Solvay sits on the Executive
Committee, as well as on several Board-level committees that contribute to setting the association’s strategy. Solvay representatives contribute
their expertise to the ACC’s work on transportation, energy, environment, sustainability, chemical management, process safety, trade, and productstewardship issues. Solvay experts also provide technical input for activities that focus on product-related issues relevant for Solvay businesses,
such as advanced materials and sustainable technologies. In 2023, Solvay actively supported ACC-led advocacy efforts and participated in thedevelopment of policy positions in key areas of interest. ACC continues to work diligently to demonstrate, to elected officials and the public,
the importance of industry partnership in building a cleaner, safer and more sustainable future. Solvay’s engagement on tax, trade, rail, andenvironmental regulations increased awareness of the complex ways chemistries support our everyday lives.

3.6.6.

Brazilian Chemical Industry Association

Solvay works with the Brazilian Chemical Industry Association (ABIQUIM) and its other members to help make Brazil’s chemical industry morecompetitive and sustainable. Solvay’s representative in the Board of Directors has taken over the ABIQUIM Presidency in 2023. Solvay is also
represented in all of ABIQUIM’s key commissions and supported activities. These cover topics such as the Chemical Industry Parliamentary
Coalition, Responsible Care management, energy and climate change, product stewardship, community dialogue, labor, international trade andtrade remedies, logistics, supply chain, and innovation. In 2023, the entity’s advocacy initiatives in the face of the new Federal Administration werea priority to review the ancillary anti-dumping regulation and to enable the implementation of transitional tariff measures within the scope of
Mercosur, in view of the surge in imports throughout the year and aiming preserve chemical industrial chains and competitiveness.

3.6.7.

China Petroleum and Chemical Industry Federation

The China Petroleum and Chemical Industry Federation (CPCIF) is a comprehensive national industry organization and the official representative of
the Chinese chemical industry in the International Chemical Industry Association (ICCA). The CPCIF speaks up for the interests of the industry, while
also serving as a bridge between businesses and the government in China. Solvay sits on the Executive Board of the Committee of Multinationals(MNC) of the CPCIF, which is a CPCIF sub-committee representing nearly 70 multinational companies in China. Solvay is a founding member ofthis committee, which was set up in 2013. Key interests of the committee include, but are not limited to, industrial policies, regulatory demands,chemical management, carbon trade, sustainability, and innovation. In 2023, Solvay worked together with peer companies in CPCIF’s MNC, actively
promoting sustainability for the chemical industry. Solvay participated in dialogues, organized by CPCIF, with governments and authorities who
managed chemical parks, for development of chemical parks and companies in the parks targeting carbon reductions and neutrality as well as
environmental standards such as in the framework of the Yangtze River Protection Law. Solvay also contributed expertise to the CPCIF to prepare
input on the central government’s National Development and Reform Commission, aimed at developing China’s carbon system in line withinternational standards.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

3.6.8.

EXTRA-FINANCIAL STATEMENT

189

Association of International Chemical Manufacturers

The Association of International Chemical Manufacturers (AICM) represents nearly 70 major multinational companies in the Chinese chemicalindustry active in the manufacture, transportation, distribution, and disposal of chemicals. Together with other leading international chemical
players in China, Solvay helps promote Responsible Care® and other globally recognized chemical management principles among all stakeholders,
advocates cost-effective, science- and risk-based policies to policymakers, and strengthens the contributions made by the chemical industry to theeconomy.

3.6.9.

BusinessEurope

BusinessEurope is the leading European business trade association. Its direct members are national business federations, but selected companies
may participate in BusinessEurope through the Advisory and Support group (ASG). BusinessEurope and its members campaign on the issues thatmost influence the business performance and growth of European companies, in Europe and globally. Solvay provides input through participation
in working groups dealing with energy, environment and research, as well as trade policy. Solvay’s position on climate is more ambitious than thefederation position.

3.6.10. European Round Table of Industrialists
The European Round Table of Industrialists (ERT) is a forum that brings together around 50 CEOs of European companies. Among its activities, theERT advocates policies to improve European competitiveness, growth, and employment. In particular, Solvay actively participates in the working
groups dealing with energy, trade, competitiveness and innovation, jobs and skills, and finance, as well as competition policies. In the ERT, Solvay
focused in particular on promoting the human skills agenda, supporting the creation of new jobs through the transition to a more sustainableeconomy, as well as participated in a study on decarbonization and competitiveness for the energy intensive industry.

4. CLIMATE
4.1.

Climate change

GRI DISCLOSURES 3-3 305-1 305-2 305-3 305-4 305-5
MATERIALITY: PRIORITY
SDG 13 14 15
4.1.1.

Transition risks and opportunities

If we embark on a transition path, more transition risks and opportunities will materialize which will have strategic implications for the Group. With
Solvay’s energy mix, which uses coal; our raw materials which include petrochemicals; and our end markets, which include the automotive, building
and construction industries; means that we are exposed to risks and opportunities:· Policies and legal context: Regulations and actions to limit CO2 emissions, such as increasing carbon taxes, banning internal combustion engines,
mandating the use of certain fuel types, and tightening environmental standards.
· Technology: Investment in new, lower-emission technologies.
· Markets: Adaptation to changing customer behavior.
· Financial: Ability to cope with the influence of climate change on investors’ and lenders’ decisions.
· Changed climate: Impact of upcoming changes on industrial operations and in the value chain.
· Reputation: Stakeholder attitudes caused by ability to address stakeholder climate change concerns effectively.

Mapping transition risks and opportunities
The Sustainable Portfolio Management (SPM) global and systematic assessment helps alert our businesses to sustainability market signals, inparticular on climate risk and opportunities, to anticipate their impact and develop the right answers in a timely manner. SPM is a robust, fact-based,
future-oriented compass that allows us to take a snapshot of products’ sustainability risks and opportunities in their business environment.
SPM informs us about the contribution Solvay’s products make to sustainability along the value chain considering both:· their environmental manufacturing footprint and the associated risks and opportunities – vertical axis – with a quantitative assessment using
21 impact indicators; and· how their applications bring benefits or face challenges from a holistic market perspective – horizontal axis – with a qualitative assessment of socialand environmental topics covering four main themes, namely health and safety, climate change, resources and opinion leaders.
For more details about SPM, see section 7.1 Product design and life-cycle management and the SPM guide published on Solvay’s website.
Climate change is one of the focus areas for SPM assessment. This involves identifying if a product in a given application brings a climate change
benefit or challenge. Product-Application Combinations (PACs) that lead to benefits are identified as "climate solutions," while those that posechallenges are considered "climate challenges."

190

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Solvay’s Sustainable Portfolio Management tool classifies a sustainable solution as a product in a given application that makes a significant
climate change contribution to the customer’s performance while also demonstrating a lower carbon impact in its production phase. The SPM
methodology is also used to identify eligible enabling activities, requested under the Taxonomy’s Delegated Act 2021. For more details about
Taxonomy reporting, see section 7.3 EU Taxonomy Eligible Activities.
SPM is a key tool for enabling Solvay to integrate the sustainability dimension into strategic and operational decision making in key businessprocesses, such as strategy, research and innovation, investment, marketing and sales, and mergers and acquisitions. We also apply the SPM tool
to strategic projects, using the same logic as for our portfolio, to make sure that these projects are heading toward business solutions that support
growth and value creation. This makes SPM a key tool for Solvay to identify if an investment, or a strategic or innovation project, can be considereda climate transition opportunity for Solvay.

Scenario analysis
In 2022 and 2023, we revised our scenario analysis under the following scope:· Focusing on the three business units (Soda Ash and Derivatives, Peroxides, and Special Chem) representing 73% of Solvay’s 2022 sales.
· Two International Energy Agency (IEA) scenarios: 1.5°C Scenario (IEA Net Zero Emissions Scenario 2021) and 3°C Scenario (IEA Stated Policy
Scenario 2021).
· Using a leading audit, tax and consulting service company’s tool for climate scenario analyses.
· Assumptions of price and cost changes, volume changes, and adaptation potential (cost pass-through) were taken from the consultant’s models.
This included price trajectories up to 2050 for oil, coal, gas, CO2, electricity, and energy usage in transport, in our own operations and upstream.
· Analysis of the market dynamics and identification of the essential characteristics of individual sites was based on the consultant and Solvay sector
and climate expertise, considering products sold in main markets, namely construction, packaging, automotive, oil and gas, home and personalcare, food and feed, and electronics.
The conclusions of the scenario analysis confirm the robustness of our business portfolio supported by positive drivers overcoming the negative
ones as summarized below with impacts quantified from (-3) to +3:

Financial impact drivers

Technology

MarketPolicyReputation

4.1.2.

1.5°C scenario

3°C scenario

Green hydrogen

(-2)

0

Coal phase-out+2+1

Oil and gas

+1

(-2)

Electronics+2+2

Automotive

(-2)

+1

Buildings+2+1

CO2 price

(-3)

(-2)

CO2 emission reduction+2+1

Supply chain engagements+1+1

Physical risks

Acute risks
Solvay sites in areas currently exposed to natural hazards, with loss expectancy, calculated by our insurers, of higher than €10 million (physicaldamage and contribution margin loss):· Five Solvay sites are located in 100-year frequency (2% chance per year) flood areas, with a loss expectancy range of €15-168 million.
· Nine Solvay sites are located in 500-year frequency (0.2% chance per year) flood areas, with a loss expectancy range of €15-208 million.
· One site is in a wind exposed area, with a loss expectancy of €16 million.
 olvay has a property damage and business interruption insurance program in place to cover catastrophic risks, and covers smaller losses throughS
self-insurance.
The risk is continually assessed throughout the year, with the support of Solvay’s Property insurer FM Global and reinsurers, like Swiss Re, based on
their proprietary flood modeling. Each site with reported insured values greater than €50 million is visited by FM Global loss prevention engineers
and benchmarked with FM Global’s resilience index, which takes into account inherent risks and completion of any recommendations.
Each site has received a list of recommendations to prioritize to reduce the risk. Recommendations can be related to procedural improvements,
like developing a flood, drought, freeze, or wind response plan, or physical improvements, like installing flood barriers or improving levees. The
Torrelavega site was one of the most exposed to flood and has made significant improvements by raising the level of their flood dike.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENT

191

Chronic risks
Solvay uses the database from Hoekstra et al. (2016), in conjunction with QGIS, a Free and Open Source Geographic Information System, to identify
areas subject to water scarcity.
· Of the 45 production sites, 14 are in areas subject to water stress. These sites withdraw a total of 36.8 million cubic meters of water, out of a totalof 247.5 million cubic meters (14.5 %) withdrawn by Solvay sites.
· Four sites have been prioritized based on a risk analysis combining three criteria: location, freshwater intake, and business interruption value.

Scenario analysis
On top of the annual risk assessment carried out with our insurers, a climate physical risks scenario analysis focusing on future climate impacts has
been performed in 2023:· 
Considering two scenarios: >4°C of global warming (corresponding with the IPCC’s RCP 8.5 and SSP-5.85) and 3°C of global warming(corresponding with the IPCC’s RCP 4.5 and SSP-2.45), corresponding to a "business as usual" reference scenario.
· Time horizons: 2030, 2050 and 2100.
· Qualitative analysis considering own operations countries: All countries in which Solvay has a site; procurement countries: top 25 by procurement
amount (EUR) and headquarter country; market countries: top 25 by revenue.
· Considering changes in hazard frequency in the scenarios for 2030, 2050 and 2100 per country, versus a 2020 basis, using the World Bank
Knowledge Portal and scientific papers.
· Using a leading audit firm’s tool for climate scenario analysis, which allows to include an external perspective and challenge Solvay’s assumptions.
· Using sector vulnerabilities to each hazard as assessed by the leading audit firm based on literature review.
· Computing Risk scores based on the statistical global distribution per hazard. The thresholds for each risk category are hazard specific.
· Quantitative analysis focusing on the sites with the highest contribution margin (including impacts on other sites): Green River (US), Linne Herten(NL), Paulinia (BR), Devnya (BG)
The main conclusions of the analysis are:
· The difference between the 3°C scenario and the >4°C scenario for the selected sites is marginal.
· Solvay’s main physical risks lie mainly around flooding, particularly in Brazil.
· Flood and convective storms might cause the highest damages until 2090.
· Flood damage increase compared to today is minimal.
· Tropical cyclone and wildfire do not pose a considerable financial impact across all locations.
· Overall risk levels are moderate:-

Paulinia is the most impacted site.
The other sites are significantly less impacted by both asset damage and business interruption with values ranging below 5% of the sitevalue or contribution margin, respectively.
Business interruption in absolute terms is generally lower than asset damage.

4.2.

Greenhouse gas emissions

4.2.1.

Definitions

GRI DISCLOSURES 3-3 305-1 305-2 305-3 305-4 305-5
MATERIALITY: PRIORITY
SDG 13 14 15
Solvay uses the following references to address greenhouse gas emissions:· The Guidance for Accounting and Reporting Corporate Greenhouse Gas Emissions (GHG) in the Chemical Sector Value Chain published by theWorld Business Council for Sustainable Development.
· The Greenhouse Gas Protocol Corporate Accounting and Reporting Standard.
· The Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Standard.
· The Fifth Assessment Report (AR5) of the Intergovernmental Panel on Climate Change (IPCC) for global warming potentials on fluorinatedgreenhouse gasses (European Regulation (EU) No 517/2014).
To better reflect our sustainability policy, we decided to use the market-based method to calculate CO2 emissions associated with purchased
electricity (Scope 2). To comply with Global Reporting Initiative requirements, we apply the following criteria, listed in decreasing order of priority,
when selecting the CO2 emission factor of each electricity supply contract:· Energy attribute certificates: Emission factors resulting from specific instruments, such as green energy certificates.
· Contract-based: The emission factor obtained from contract agreements on specific sources for which there is no emission of specific attributes.
· Supplier or utility emission rates: The emission factor disclosed as a result of the supplier’s retail mix.
· Residual mix: If a residual mix is unavailable, grid-average emission factors are used as a proxy.

192

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Location-based: If none of the above factors are available, we use the national emission factor published by national authorities or the International
Energy Agency. Based on a World Resources Institute (WRI) recommendation, Emissions and Generation Resource Integrated Database (eGRID)
emission factors published by the United States Environmental Protection Agency are used for the US, instead of the state emission factor. Similarly,
grid emission factors published by the Ministry of Ecology and Environment are used for China, instead of the state emission factors.

4.2.2.

Management approach

Following the spin-off of Syensqo in December 2023, Solvay has confirmed its commitment to reduce its CO2 emissions. Our new baseline has
shifted from 2018 to 2021 while maintaining a goal of a 30% reduction on Scope 1 and 2 emissions and a reduction of 20% of Scope 3 (upstream
and downstream) emissions by 2030. We also pursue our objective to phase out coal by 2030 wherever an alternative exists. In addition, carbon
neutrality by 2050 remains an overarching objective.
Solvay joined SBTi in October 2020, receiving a formal approval from the Initiative in early 2023 for its climate targets. The spin-off of Syensqo hastriggered the need for a reassessment that will start with SBTi in 2024.
Our current objectives are supported by a global energy transition roadmap made of already validated and financed projects (with a strong delivery
anticipated in 2025), as well as a portfolio of projects (still under validation process) clustered by typology:· Energy transition project for which a significant investment is necessary to use less emitting primary source of energy.
· Energy efficiency project which allows to consume less energy per production unit.
· Decarbonized sourcing consisting of the substitution of current fossil energy by a renewable one or low carbon one.
An externally verified greenhouse gas emission reporting system and responses to rating agencies, such as the Carbon Disclosure Project, help theGroup align our efforts with the magnitude of the greenhouse gas challenges we face.
In 2023, four new projects have been validated. Overall, we have more than 26 projects around the world that are either completed or underway.
In terms of methodology, STAR Factory program deployment at site level enables identification of energy transition opportunities throughcollaboration between a dedicated team of experts in energy transition and site operational industrial teams.
These opportunities are then evaluated, challenged and prioritized by business from an affordability point of view, including an internal carbon priceof €100 per metric ton of CO2 to all greenhouse gas emissions.
The execution of roadmaps depends on the category of the projects. Energy efficiency projects are managed at site level whereas energy transition
and renewable sourcing projects are managed at central level.

4.2.3.

Indicators

Solvay targets to reduce Scope 1 and 2 greenhouse gas emissions by 30% by 2030, compared to the 2021 baseline, and to reach carbon neutrality
by 2050. Solvay also targets to reduce Scope 3 emissions (focus five categories) by 20% by 2030.

GREENHOUSE GAS EMISSIONS (SCOPE 1 AND 2)
Total greenhouse gas emissions (Scope 1 and 2) in 2023

Mt CO2eq

7.3

Total greenhouse gas emissions (Scope 1 and 2) in 2022

Mt CO2eq

8.5

Total greenhouse gas emissions (Scope 1 and 2) in 2021 – as published

Mt CO2eq

9.0

Variation due to changes in reporting scope (structural changes)

Mt CO2eq-0.1

Variation due to changes in methodology or improvements in data accuracy

Mt CO2eq

0

Emissions increase or reduction at constant scope year on year

Mt CO2eq-1.2

Cumulative emissions increase or reduction since 2021 at constant scope

Mt CO2eq

-1.7

%

-19

Percentage increase or reduction since 2021 at constant scope(reference 2021: 9.0 Mt CO2eq)-1.1

The cumulative emissions reduction since 2021 at constant scope is -1.6 Mt CO2eq.
Decreased emissions of 1.2 Mt CO2eq in 2023, as compared to 2022, can be explained by lower activity (-0,9 Mt CO2eq), new GHG reduction
projects (-0.3 Mt CO2eq), including biomass consumption in Devnya in substitution to coal, better mine gas usage in Green River, and Voikkaa’s
100% renewable electricity consumption.
The GHG emissions in 2022 do not consider the changes in the scope of Tavaux and Zhenjiang, unlike 2023. This change has an impact on Scope
1 and 2 of 2022 (-0.1 MtCO2eq), mainly on Scope 2. Variation due to changes in reporting scope (structural changes) is explained by Tavaux and
Zhenjiang consolidated at 100% for Syensqo.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENT

193

GREENHOUSE GAS EMISSIONS (CO2 AND OTHER GHG)
Units

2023

2022

2021

Mt CO2

6.5

7.4

8.0

Other greenhouse gas emissions according to Kyoto Protocol (Scope 1)

Mt CO2eq

0.8

1.1

1.0

Total greenhouse gas emissions according to Kyoto Protocol

Mt CO2eq

7.3

8.5

9.0

Other greenhouse gas/CO2 emissions not according to Kyoto Protocol(Scope 1)

Mt CO2eq

<0.1

<0.1

<0.1

Units

2023

2022

2021

Methane – CH4

Mt CO2eq

0.80

1.07

0.99

Nitrous oxide – N2O

Mt CO2eq

0.01

0.02

0.02

Sulfur hexafluoride – SF6

Mt CO2eq000Hydro fluoro carbons – HFCs

Mt CO2eq000Perfluorocarbons – PFCs

Mt CO2eq000

Nitrogen trifluoride – NF3

Mt CO2eq000

Total other greenhouse gas emissions

Mt CO2eq

0.82

1.10

1.02

Carbon dioxide – CO2

Mt CO2

5.8

6.7

7.1

Total direct emissions

Mt CO2eq

6.62

7.80

8.12

Direct and indirect CO2 emissions (Scope 1 and 2)

DIRECT GREENHOUSE GAS EMISSIONS (SCOPE 1)

In 2023, direct emissions were 1.18 Mt CO2eq lower than in 2022. This improvement in the reduction of GHG emissions is mainly due to lower activity
compared to 2022 and better mine gas usage in Green River.

INDIRECT CO2 EMISSIONS (SCOPE 2)
Units

2023

2022

2021

Electricity purchased for consumption

Mt CO2

0.3

0.3

0.4

Steam purchased for consumption

Mt CO2

0.3

0.4

0.4

Total indirect CO2 – gross market-based

Mt CO2

0.6

0.7

0.8

Electricity purchased for consumption

Mt CO2

0.4

0.4

0.5

Steam purchased for consumption

Mt CO2

0.3

0.4

0.4

Total indirect CO2 – gross location-based

Mt CO2

0.7

0.8

0.9

Gross market-based

Gross location-based

Since implementing the market-based method, we carry out a detailed review of emissions factors for purchased electricity at all of our sites every
year. In 2023, indirect emissions were 0.1 Mt CO2eq lower than in 2022.

194

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

OTHER INDIRECT GREENHOUSE GAS EMISSIONS (SCOPE 3)
Units

202301202202202103Purchased goods and services

Mt CO2eq

3.6

1.7

1.7

Capital goods

Mt CO2eq

1.1

0.9

0.8

Fuel- and energy-related activities

Mt CO2eq

1.0

1.0

1.0

Upstream transportation and distribution

Mt CO2eq

Included in Purchased goods
and services

Waste generated in operations

Mt CO2eq

Included in Purchased goods
and services

Business travel

Mt CO2eq

0.002

0.002

0.001

Employee commuting

Mt CO2eq

0.014

0.015

0.016

Upstream leased assets

Mt CO2eq000

Downstream transportation and distribution

Mt CO2eq

0.3

0.4

0.4

Processing of sold products

Mt CO2eq

2.1

2.9

3.1

Use of sold products

Mt CO2eq

3.0

5.1

5.4

End-of-life treatment of sold products

Mt CO2eq

2.7

3.1

4.6

Downstream leased assets

Mt CO2eq000Franchises

Mt CO2eq

000Investments

Mt CO2eq

0.2

0.4

0.4

Mt CO2eq

14.0

15.5

17.4

13.8

15.8

Total Scope 3 emissions
Total Focus 5 categories Scope 3 emissions

Mt CO2eq

12.4

Variation due to changes in methodology or improvements in data
accuracy06

Mt CO2eq-1.1

Variation due to change in methodology in category 1

Mt CO2eq

1.0

Variation due to change in methodology in category 10, 11 and 12

Mt CO2eq

-2.1

04

05

Total Scope 3 greenhouse gas emissions indicator is in the scope of the reasonable assurance report from our independent auditor while Scope 3
Focus 5 categories greenhouse gas emissions indicator is not in the scope of our independent auditor.
Note: Solvay will continue working on aligning its methodology with the Scope 3 GHG Protocol for scope 3.1 (purchased goods and services),
scope 3.4 (upstream transportation and distribution) and scope 3.5 (waste generated in operations) and disaggregating emissions in its inventory forthese categories by end of 2024. Emissions reported herein under category 3.1 (purchased goods and services) include emissions from categories
3.4 (upstream transportation and distribution) and 3.5 (waste generated in operations). They are calculated by the difference between the cradleto-gate emissions of our products (including manufacturing) and on the Scope 1, Scope 2, and emissions from category 3 (fuel and energy-related
activities). We have identified a limit in the accuracy of the methodology with the reconciliation between energy bill of materials in life cycle
assessments and energy in Scope 1 and 2 emissions which affects the categories of emissions scope 3.1, scope 3.4, and scope 3.5 (purchased goods
and services, upstream transportation, distribution, and waste generated in operations). The revision of the methodology for the three categories
will include their direct determination (based on raw materials quantities purchased x emission factor), address the identified limitation in accuracy
and increase the use of suppliers’ specific emission factors.

01. 2023 values adjusted with the new methodology (rf. note).
02. Values as stated in annual integrated report in 2022.
03. Values as stated in annual integrated report in 2021.
04. The focus five categories are Purchased goods and services, Fuel and energy related activities, Processing of sold products, Use of sold products, and End-of-life
treatment of sold products.
05. After impact of the new methodology the Focus 5 categories of 2022 and 2021 are 12.2Mt, and 14.8Mt respectively.
06. Net impact due to changes in methodology in category 1 (Purchased goods and services), and categories 10, 11, and 12 (Processing of sold products, Use of soldproducts, End-of-life treatment of sold products).

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENT

195

Scope 3 greenhouse gas emissions are estimated as follows:
1. Purchased goods and services: We carry out a cradle-to-gate Life Cycle Analysis (LCA) for most of our products, representing 94% of our total
net sales. The calculated greenhouse gas emissions are extrapolated to reach the totality of our purchases. They include all emissions related to
raw material extraction and precursor processing, indirect emissions from energy use for these operations, and transport between suppliers andto our plants.
Note: In 2023, a change in methodology has taken place for emissions reported in category 3.1, which includes emissions in categories 3.4 and 3.5,
by excluding emissions related to energy sales to third parties from Scope 1, Scope 2, and Scope 3.3, thereby aligning with the boundary for cradleto-gate LCA emissions of products. It has induced + 1 MT_CO2 eq.
2. Capital goods: We have used the emission factors of the WBCSD Guidance for Accounting and Reporting Corporate GHG Emissions in theChemical Sector Value Chain, assuming that capital goods are a mix of concrete and steel.
3. Fuel-and energy-related activities not included in Scope 1 or Scope 2: They represent GHG emissions that occur during the extraction andtransport of energy.
4. Upstream transportation and distribution: This is included in category 1 (see above), purchased goods and services.
5. Waste generated in operations: This is included in category 1 (see above).
6. Business travel: Business travel undertaken by Solvay employees is recorded by our travel agency and monitored by our purchasing department.
For air and rail travel, travel mileage is recorded. This covers more than 95% of our air and rail travel. The calculated greenhouse gas emissions
are extrapolated to represent the totality of our travel. For each transportation mode, mileage is converted into CO2 equivalent using emission
factors from Ecoinvent.
7. Employee commuting: The estimation is based on assuming that Solvay employees based in industrial sites commute every day in an averagediesel or petrol car. Employees at administrative and R&I sites commute three times per week (i.e., home office two days per week).
8. Upstream leased assets: This is not applicable as we have no upstream leased assets.
9. Downstream transportation and distribution: Greenhouse gas emission during transportation of our products from our plants to our customers
are reported and monitored by our supply chain excellence department. Emissions factors from the European Chemical Industry Council (Cefic)
are used to calculate total emissions.
10. Processing of sold products: 11. Use of sold products; and 12. End-of-life treatment of sold products: the computation principles for thesethree categories are the same. The emissions due to product processing and transformation by third parties subsequent to sale by Solvay arecalculated according to product chemical composition and expected chemical reactions likely to generate emissions during the transformation,
the usage, and end-of-life of our product.
Note: The methodology, developed in 2018, for the accounting of SF6 impacts in categories 3.10, 3.11, and 3.12 has been revised. It aligns withthe change in business good practices (best estimates or latest standards of the emission factors during the processing, use, and end of life of
the equipment filled with SF6 and update of the market segmentation based on interviews with the most representative customer) and in theregulatory environment. Global warming potentials are taken from the reference table used in the current version of the European Regulation on
the fluorinated greenhouse gases (Regulation EU No 517/2014), meaning the Fifth Assessment Report of the Intergovernmental Panel on Climate
Change (AR5). It has induced -0.8 MT CO2eq in category 3.10 and -1.3 MT CO2eq in category 3.11.
13. Downstream leased assets: This is not applicable as Solvay has no leased assets.
14. Franchises: This is not applicable as Solvay has no franchises.
15.Investments: Scope 1 and 2 emissions from non-consolidated entities (that are not consolidated in Solvay’s Scope 1 and 2) are reported according
to Solvay’s financial interest in these entities, to ensure consistency with our financial statements.

196

4.2.4.

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3Key achievements

In 2023, the roll-out of the STAR Factory program (which started in 2022) led to an acceleration of initiatives identification through deployment on
about half of the sites.
The structural GHG reduction of 0.3 Mt CO2eq in 2023 are mainly due to following achievements:· Energy transition (0.1 Mt CO2 eq)-

At our soda ash Devnya, BG, site, an existing boiler has been adapted to increase its co-combustion rate with non-recyclable biomass.

-

In Torrelavega, we started from the second quarter of 2023 to operate a small biomass co-firing boiler with coal (3% mass or 1.4% energy
substitution).

· Energy efficiency (0.2 Mt CO2 eq)-

Among 60+ projects implemented, Green-River site from soda ash business significantly improved its mine gas usage (reducing direct
CH4 emission in the atmosphere).
Another soda ash site, Bernburg, worked on the optimization of energy production and consumptions.

· Decarbonized sourcing-

Voikkaa, F.I., production site, began operating on 100% renewable electricity in 2023. This is a significant step in decarbonizing the production of hydrogen peroxide at Voikkaa.

In Scope 3:· We have active collaboration with our most GHG-emitting raw materials suppliers to collect data on the product carbon footprint (PCF) of the
raw materials they supply to us – a preliminary step that enables us to track and manage progress in our purchased goods and services emissions(category 1). In 2023 we collected more than 50% of the PCF coverage of our raw materials.
· Looking to engage its own employees in the reduction of Scope 3 emissions linked to business travel (category 6), from January 2023, a monetaryamount based on the entity’s travel footprint calculated at €100 per ton of CO2 is charged to each GBU to finance a Travel Carbon Fund. It will be
used in 2024 for sponsoring sustainability projects with a carbon-offset focus wherever feasible.

4.3.

EnergyGRI DISCLOSURES 3-3 302-1 302-2 302-3 302-4
MATERIALITY: PRIORITY
SDG 7 134.3.1.

Definitions

The different components of Solvay’s energy consumption are converted into primary energy sources as follows:· fuels, using the net calorific values;· steam purchased, taking into account the boiler efficiency reference value for the type of fuel used to generate the steam, for example 90%
efficiency based on the net calorific value for natural gas; and· electricity purchased, assuming an average efficiency of 39.5% for all types of power production except for nuclear power (33%), hydro (100%),
solar (100%), and wind (100%), based on net calorific value (source: International Energy Agency – IEA).

4.3.2.

Management approach

Solvay considers it particularly important to swiftly transition our energy consumption toward zero- or low-carbon sources without compromising oncompetitiveness or supply security.
In order to avoid conflicts of interest, the Sustainability team who sets the Group’s guidelines and targets is separated from the Energy team whichis in charge of the execution.
Different expertises are in place to accelerate projects execution:· Energy department-

Energy sourcing with long-term partnerships and medium- to long-term contracts, and price-hedging protection mechanisms whenneeded.
Market intelligence and direct access to energy markets.
Dedicated services aimed at optimizing energy purchasing and helping Global Business Units manage energy and greenhouse gas
emissions.
Energy transition roadmap execution.

· Industrials sites expertise· Technological expertise in processes and process innovation

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENT

197· Public affairs· Legal· Procurement· Finance
Periodic reviews are in place to follow the projects validation and execution, including monthly project steering committees, quarterly roadmap
reviews for each business unit, a quarterly Group climate steering committees.

4.3.3.

Indicators

PRIMARY ENERGY PURCHASE FOR CONSUMPTION FROM NON-RENEWABLE AND RENEWABLE SOURCES

Solid fuels (1)

Units

2023

2022

2021

PJ

24.4

28.3

27.2

Liquid fuels

PJ

0.2

0.3

0.3

Gaseous fuels

PJ

41.4

45.7

51.8

Total non-renewable energy sources

PJ

65.9

74.7

79.3

Renewable energy sources (2)

PJ

6.9

6.0

5.9

Total fuel consumption

PJ

71.9

79.4

85.2

Note: The accounting methodology was adapted in 2020. Coke and anthracite used as raw materials in chemical reactions have been removed from classification as solid
fuels. High purity coke or anthracite are required in the chemical reactions of the soda ash production process, as a source of CO2. Historical figures have been restatedretroactively.
(1) Solid fuels only apply to coal and petcoke. Anthracite and coke are raw materials.
(2) Primary renewable energy sources and renewable electricity purchase.

We set the target to phase out coal usage in energy production where renewable alternatives exist by 2030. The decrease of 3.9 PJ (14%) in 2023
compared to 2022 results mainly from the activity decrease. Over a longer period, our solid fuels consumption decreased by 2.8 PJ (11%) from
27.2PJ in 2021 to 24.4 PJ in 2023.
Total fuel consumption decreased in 2023 by 10%, this variation is explained mainly by lower activity.

SECONDARY ENERGY PURCHASED FOR CONSUMPTION
Units

2023

2022

2021

Electricity

PJ

10.1

11.5

12.4

Heating

PJ

0Cooling

PJ

0

Steam

PJ

7.1

7.3

7.5

Total

PJ

17.1

18.8

19.9

Units

2023

2022

2021

PJ

11.7

12

15.1

Heating

PJ

0

0

0

Cooling

PJ

0

0

0

Steam

PJ

7.2

7.7

9.2

Total

PJ

18.7

19.7

24.3

Secondary energy purchased for consumption decreased in 2023, largely due to lower activity.

ENERGY SOLDElectricity

In 2023, the sale of self-generated secondary energy decreased due to the lower activity.

198

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

TOTAL RENEWABLE ENERGY
Units

2023

2022

2021

Energy produced from renewable energy sources

PJ

5.9

5.1

5.9

Renewable electricity purchased

PJ

1.0

0.9

1.0

Renewable electricity sold

PJ

0.0

0.0

0.0

Total renewable energy

PJ

6.9

6.0

6.8

Energy produced from renewable energy sources which is total Biomass

4.3.4.

Key achievements

In 2023, the roll-out of the STAR Factory program (which started in 2022) led to an acceleration of initiatives identification through deployment on
about half of the sites.
Thanks to a standardized methodology, 60+ projects have been implemented saving fossil-based heat and electricity for a total CO2 savings of
300 ktCO2 which leads to 1 PJ fossil energy savings. Replacement of dysfunctional steam traps which started in 2022, continued in 2023. In someother plants, operations on distillation columns have been improved. Electricity consumptions have been reduced thanks to process control actions
and installation of variable frequency drives.
In 2023, 100% of our operations in China are still supplied by renewable electricity - 0.2 PJ.
The substitution of coal by biomass in our Devyna and Torrelavega soda ash plants has an impact of 0.6 PJ in 2023.

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

199

5. NATURE
5.1. Water and wastewater
GRI DISCLOSURES 3-3 303-01 303-02 303-03 303-4 303-5
MATERIALITY: PRIORITY
SDG 3 6 12 15
5.1.1.

Definitions

Water management encompasses the management of water flows and water quality, from extraction from the natural environment to restitution in
the same or another part of the environment.
Freshwater withdrawal, measured in millions of cubic meters per year, is the amount of incoming freshwater purchased from third parties, such as
drinking water from the public network, or pumped by Solvay from freshwater systems, such as rivers and lakes, and from groundwater sources, suchas aquifers, or supplied from the public network (drinking water).
Freshwater consumption, also measured in millions of cubic meters per year, is calculated as the sum of water lost through evaporation, leakage,and exportation of products and waste. Water purchased or pumped for third parties are included in freshwater withdrawals. For example, waterthat is taken from a river for cooling and returned after use counts as freshwater withdrawal but not as freshwater consumption. Solvay’s main areasof water consumption are in production, or what is known as industrial water.
Areas subject to hydric stress are identified using the Aqueduct database, a Free and Open Source Geographic Information System.
Chemical Oxygen Demand (COD) is the amount of oxygen-reducing substances, mainly dissolved organic matter, discharged into aqueous
receivers. COD is expressed as metric tons of oxygen. In addition to nitrogen and phosphorus compounds, COD also contributes to aquatic
eutrophication.
Persistent Organic Pollutants (POPs) are toxic chemicals that are persistent in the environment and able to last for several years before breaking
down (UNEP/GPA 2006a). POPs circulate globally and chemicals released in one part of the world can be deposited at far distances from their
original source through a repeated process of evaporation and deposition. Persistent organic pollutants (POP) expressed in grams per year, are thesummed emissions from substances included in lists A, B, and C under The Stockholm Convention. For Solvay, POP in 2023 are specifically dioxins
and furans and are expressed in ton-equivalent toxicity per year (see chapter 5.3.3). POPs are reported by sites, according to their permit.

5.1.2.

Management approach

Solvay has a company-wide approach to water that includes limiting freshwater withdrawal and consumption, particularly in locations subject
to hydric stress, and ensuring that the water quality remains good in bodies of water in which effluents are discharged, so that the impact on
downstream users and natural biota is minimized. Specifically, we focus on reducing the impact of freshwater withdrawal and Chemical Oxygen
Demand releases.
The water balance of the Group for 2023 is shown in the table below.
Water input from (Mm3)
Surface water (freshwater)

Water discharge to (Mm3)187

Surface water (other water)

Surface water (freshwater)

164

Surface water (other water)

Groundwater (freshwater)

19

Groundwater (freshwater)

0.1

Groundwater (other water)

0.6

Groundwater (other water)

Sea water72

Sea water

79

Third party (freshwater)

20

Third party (freshwater)

21

Third party (other water)

7

Third party (other water)

30

Other sources

12

All losses

26

TOTAL

318

TOTAL

319

200

5.1.3.

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Indicators

FRESHWATER WITHDRAWAL
Units

2023

2022

Freshwater withdrawal

Million cubic meters

223

244

Total water withdrawal*

Million cubic meters

318

349

Water used for process*Million cubic meters

106

119

Water used for cooling (once-through)*

Million cubic meters

195

213

Water used for cooling (closed-loop)*

Million cubic meters

902

902

Water used for other uses (including domestic)

Million cubic meters

1.6

1.9

(*) Sum of freshwater and non-freshwater.

The total freshwater withdrawal at group level for 2023 is significantly lower than in 2022 (-21 million cubic meters or -9%) at constant scope andmethodology. The freshwater intake for our own operations decreased from 207 million cubic meters in 2022 to 186 million cubic meters in 2023(-10%). This decrease is thanks to improvement initiatives deployed across our production sites (e.g., water reuse/recycling and cooling tower
optimization) but mostly due to a reduction in production volumes. From this 186 million cubic meters, 26 million cubic meters (7%) is lost: 16 million
cubic meters through evaporation from industrial cooling towers and eight million cubic meters through exportation with aqueous end products,
such as hydrogen peroxide. The remaining volume is lost with exported wastes or through leakages from underground piping networks.
The table below shows the number and percentage of sites located in areas subject to hydric stress and gives the freshwater withdrawal andfreshwater consumption for these in 2023 compared to the areas not subject to hydric stress.

2023

Units

Areas subject towater stress

Areas not subject
to water stress

All areas

Number

14*

31

45

%

31%

69%

100%

Freshwater withdrawal

Million cubic meters

33

190

223

Freshwater consumption

Million cubic meters

5

21

26

Number of sites
Percentage of industrial sites under operational control(*) For 2023, the sites in areas subject to hydric stress have been determined using the Aqueduct tool included in WWF Water Risk Filter. Only sites with a scarcity score of
4 or 5 have been taken into account.

The chemical oxygen demand in wastewater increased from 1,848 tons O2 in 2022 to 1,970 tons O2 in 2023. This increase was mainly due to a new
COD monitoring and increase in monitoring frequency in Devnya, which leads to more precise data compared to 2022. The persistent organic
pollutants (POP) in wastewater decreased from 1.6E-05 metrics tons in 2022 to a non-detectable emission in 2023. This POP is a chlorinated aromaticno more used/produced in a Solvay European platform. The emission value for this substance has been permanently decreasing since 2018.

CHEMICAL OXYGEN DEMAND AND PERSISTENT ORGANIC POLLUTANTS
Units

2023

2022

Chemical oxygen demand (COD)

Metric tons O2

1,970

1,848

Persistent organic pollutants (POP)Metric tons

Below detection limits

1.6E-05

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENT

201

5.2. Waste
GRI DISCLOSURES 3-3 306-1 306-2 306-3 306-4 306-5 416-1
MATERIALITY: PRIORITY
SDG 3 6 12 14 15
5.2.1.

Definitions

Industrial waste is defined as the waste resulting from our regular manufacturing and research activities. It does not include domestic waste or wastefrom demolition or construction projects. Mining waste, which results from the prospecting and extraction of minerals, is reported separately fromindustrial waste. All our waste volumes are expressed as dry matter.
For EU sites, Hazardous Industrial Waste (HIW) is defined according to Appendix III of the Waste Framework Directive (2008/98/EC). For non-EU
countries, classification follows local legislation.
Non-sustainably treated waste comprises waste that is landfilled or incinerated without energy recovery. It includes the waste with unknown final
treatment at the time of reporting.

5.2.2.

Management approach

For industrial waste, and hazardous industrial waste in particular, Solvay’s focus is on switching to more sustainable disposal methods that avoid
landfill or incineration without energy recovery and therefore promote material or thermal recovery.
For non-hazardous waste, mostly mineral, Solvay is launching material recovery initiatives aligned with our ambition to contribute to the circular
economy.

5.2.3.

Indicators

WASTE PRODUCTION
Units

2023

2022

Non-hazardous industrial waste

1,000 tons*

1,365

1,460

Hazardous industrial waste

1,000 tons*

26.2

35.2

Total industrial waste

1,000 tons*

1,392

1,495

Hazardous industrial waste not treated in a sustainable way

1,000 tons*

5.2

5.6

Non-hazardous industrial waste not treated in a sustainable way

1,000 tons*

17.4

10.6

Total industrial waste not treated in a sustainable way

1,000 tons*

22.6

16.2

Mining waste

1,000 tons*

432

600

* Metric tons of dry waste.

Despite significant waste reduction initiatives initiated in 2022, the total non-sustainable industrial waste has increased from 16.2 kt in 2022 to 22.6 kt
in 2023.
The non-sustainable waste increased by 6.5 kt and is mainly due to the following changes:· +4.8 kt due to higher volumes of non-valorized DeSOx residues in our Dombasle and Torrelavega sites, linked to the transition towards analternative source of coal, with higher sulfur content, as a consequence of the conflict in Ukraine and the ban of Russian coal.
· +2.4 kt due to the partial excavation and maintenance of the evaporation ponds in our Parachute site.
· -0.7 kt in our Tavaux site for a decrease in suspended material in the effluent from our Special Chem operations.

5.3. Air quality
GRI DISCLOSURES 3-3 305-6 305-7
MATERIALITY: HIGH
SDG 3 15
5.3.1.

Definitions

Nitrogen oxide (NOx) emissions, conventionally expressed as nitrogen dioxide (NO2), comprise the emissions of nitrogen monoxide (NO) andnitrogen dioxide (NO2). NOx are reported due to their impact on acidification. NOx emissions from Solvay’s operations result mainly from the
combustion of fossil fuels. Emissions of nitrous oxide (N2O) are excluded from this definition, as they have no impact on acidification. The impact of
our N2O emissions is taken into account when assessing Solvay’s contribution to climate change.

202

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Sulfur oxide (SOx) emissions, conventionally expressed as sulfur dioxide (SO2), comprise the emissions of sulfur dioxide (SO2) and sulfur trioxide(SO3). SOx emissions arise mainly from the combustion of solid fuels (coal, anthracite).
According to the EU Solvent Directive 1999/13/EC, Volatile Organic Compounds (VOCs) are compounds with a standard boiling point below
or equal to 250°C. Non-methane volatile organic compounds (NMVOCs) include all VOCs other than methane. The impact of main methane
emissions from Solvay’s mining activity at Green River, Wyoming, in the US, is therefore not included here, but is taken into account when calculating
our contribution to climate change.
Ozone-depleting substances (ODS) are expressed as their summed CFC-11 equivalent, which is defined as the metric tons of ODS weighted bytheir Ozone Depletion Potential (ODP), updated with the WMO 2022 characterization factors.

5.3.2.

Management approach

Air quality is managed through the health, safety, and environment management systems deployed by our sites, in line with their regulatory
requirements. Sites report at minimum on the substances they are allowed to emit according to their exploitation permit. Solvay works in close
cooperation with local stakeholders to improve air quality at local and regional levels.

5.3.3.

Indicators

ABSOLUTE AIR EMISSIONS
Units

2023

2022

Nitrogen oxides – NOxMetric tons

4,324

4,954

Sulfur oxides – SOx

Metric tons

2,047

2,363

Non-methane volatile organic compounds – NMVOCMetric tons

2,341

1,743

Ozone-depleting substances – ODS

Metric tons

0.7

1.6

Persistent organic pollutants – POP

Metric tons

4.3E-08

3.6 E-08

Persistent Organic Pollutants (POPs) are toxic chemicals that are persistent in the environment and able to last for several years before breaking
down (UNEP/GPA 2006a). POPs circulate globally and chemicals released in one part of the world can be deposited at far distances from their
original source through a repeated process of evaporation and deposition.
In 2023 nitrogen oxides emissions decreased by 630t (13%) and sulfur oxides decreased by 316t (13%) mainly due to boiler operation optimization,a partial switch from coal to natural gas and biomass and an overall reduction in energy production in our soda ash plants.
Non-methane volatile organic compounds (NMVOC) emissions increased by 602t in total (35%) mainly due to a restatement of the methodology
for the emission measurements in the Coatis Paulinia plant by an external university (old factors from 2012 have been underestimated) (+866 tons),
compensated by a significant decrease of emissions from the mining activity in Green River (-205 tons). Other changes are minor at the Group level.
The emission of ozone-depleting substances (ODS) emissions more than halved in 2023 compared to 2022 mainly thanks to the optimized
abatement of N2O in the Coatis Paulinia plant.
The value of persistent organic pollutants (POP) emitted to air is related to dioxin and the measured value is close to the detection limit. The
emission of persistent organic pollutants (POP) increased from 3.6E-08 metric tons in 2022 to 4.3E-08 metric tons in 2023.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENT

203

5.4. Biodiversity
GRI DISCLOSURE 3-3 304-1 304-2 304-3 304-4
MATERIALITY: PRIORITY
SDG 13, 14, 15
5.4.1.

Definitions

Biodiversity around our sites
To assess the sensitivity of Solvay sites toward biodiversity, we use two international reference tools that help us understand and assess biodiversityrelated risks at Solvay’s operational locations:· The Integrated Biodiversity Assessment Tool (IBAT), a web-based map and reporting tool developed by the IBAT Alliance (BirdLife International,
Conservation International), UN Environment Programme World Conservation Monitoring Centre (UNEP-WCMC), and the International Union forConservation of Nature (IUCN). The IBAT tools provide integrated access to three of the world’s most authoritative global biodiversity datasets:--

The World Database on Protected Areas (WDPA). The IUCN defines a Protected Area as a “clearly defined geographical space, recognized,
dedicated and managed, through legal or other effective means, to achieve the long-term conservation of nature with associated ecosystemservices and cultural values.”
Key Biodiversity Areas (KBAs), which are sites recognized as contributing significantly to the global persistence of biodiversity in terrestrial,
freshwater, and marine ecosystems.
The IUCN Red List of Threatened Species. Vulnerable, endangered, and critically endangered species are considered to potentially be on
the path to global extinction.

· The Worldwide Fund for Nature (WWF) Biodiversity Risk Filter (BrF), a web-based tool covering physical and reputational biodiversity-related risks
that may affect our operational sites. These risks are evaluated through databases that provide 33 different indicators covering several aspects of
biodiversity. A final score is then calculated for each location, ranging from zero (very low risk) to five (very high risk).

Measurement of a global impact on biodiversity
The calculation of the Solvay Group’s pressure on biodiversity is performed along the value chain, from cradle-to-gate (from resource extraction to
the factory gate, before it is transported to the consumer), for our portfolio of products. This is a global approach that is based on a Life Cycle Impact
Assessment (LCIA) methodology. This method translates emissions and resource extractions into a limited number of environmental impact scores
through what are known as “characterization factors.”
The first step in this method is using emissions from environmental reporting that are linked with the following “midpoint impact categories”:· global warming, e.g., from CO2 and greenhouse gas emissions;· water use;
· freshwater ecotoxicity;· freshwater eutrophication;· photochemical oxidation;· terrestrial acidification;· terrestrial ecotoxicity;· marine ecotoxicity; and· land use.
The potential damage to nature is then calculated by connecting the midpoint indicator to an endpoint factor using the method ReCiPe 2016
Damage to freshwater, marine, and terrestrial species refers to the aggregated local loss of species. The unit for measuring impact on biodiversity
is a theoretical number of potential species affected in respective ecosystems, measured over space and time.

5.4.2.

Management approach

Local biodiversity
We screened 45 operational sites with both the IBAT and BrF tools to assess their biodiversity risks.
On the basis of the screening exercise, and considering other criteria such as climate change, environmental impact, and strategic dimensions,
16 sites were prioritized for the development of biodiversity roadmap. The first step consists in identifying a vision for the site based on the longterm goals it wants to achieve. In a second step, the site identifies possible actions that would support nature conservation and the restorationof biodiversity. This involves identifying the stakeholders supporting each action, such as employees, local communities, nature conservation
associations, and universities. Timeline, indicators, and associated budget are characterized as well. Each action is linked with an objective and whenpossible a method to monitor progress. Finally, governance and planification are key milestones to establish before the implementation phase.
The local assessment of the biodiversity-related risks related to Solvay’s operations is integrated into the STAR Factory program. Priority sites
involved in STAR Factory are developing a biodiversity roadmap as part of the sustainability workstream of the program.

204

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3The partnership with the Wildlife Habitat Council is providing efficient support to the sites in their local projects, connecting with actionable andscience-based actions.

Global biodiversity
Using the environmental profiles of our products, and looking at their life cycle from raw materials to the gate of our manufacturing sites, wewere able to identify the areas of our portfolio that put the most pressure on biodiversity. We found that greenhouse gas emissions, freshwater
eutrophication, marine ecotoxicity, and soil acidification represent 90% of the drivers affecting biodiversity.
With the adoption of the “Global Biodiversity Framework” at COP 15 in December 2022, the parties set an ambitious program of targets andrecommendations relating to biodiversity conservation and restoration where the private sector has an important role to play. Solvay’s activities onnature are willing to support the implementation of the Framework.
As part of our efforts to contribute to biodiversity preservation, Solvay is a founding member of Entreprises pour l’Environnement (EpE), which
was created in 1992. This is a think tank and platform for expertise, bringing together around 60 large French and international companies from all
sectors of the economy to work together to better integrate the environment into both their strategies and their day-to-day management. Within
the EpE, Solvay is an active member of the Commission on Biodiversity and is committed to act4nature International.
Finally, Solvay is connected with scientific organizations working on Biodiversity like IPBES07 and IUCN by participating in the IUCN Leaders
Forum in Geneva, in October 2023. The Forum was a great opportunity to connect with decision makers and CEOs to further integrate biodiversity
conservation into our strategy. The program included meetings with the Young Changemakers bringing a message of hope that demonstrates theimportance of empowering the next generation through business engagement.

5.4.3.

Indicators

Local biodiversity
Assessing our 45 operational sites for biodiversity risks using the IBAT and BrF tools revealed that:· 36 were within 5 km of a protected area;· eighteen sites were within 5km of a Key Biodiversity Area; and· more than 3,700 vulnerable, endangered, and critically endangered species are potentially present within 50 km of our sites.

IBAT AND BRF RESULTS FOR 16 PRIORITY SITES
Site

Number ofprotected areas
within 5 km

Number of key
biodiversity areas
within 5 km

Number of endangered
species within 50 km

BrF biodiversity-related
risk score (0-15)

Anan

4

1

160

7.1

Bad Wimpfen

13

2

86

7.9

Bernburg

8

0

63

8.7

Devnya

6

1

67

8.3

Dombasle

1

0

55

8.3

Gunsan

0

2

103

8.9

La Rochelle

8

1

92

9.0

Linne Herten

3

3

64

8.4

Livorno

17

1

140

9.0

Map Ta-Phut

0

0

187

8.2

Paulinia

1

0

59

8.2

Rheinberg

39

1

57

9.1

Rosignano

8

0

135

9.0

Torrelavega

2

0

121

7.8

Włocławek

3

1

41

8.5

Zandvliet

16

2

80

9.4

07. IPBES: Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENT

205

Units

2023

2022

Number

63

56

%

47

53

Global biodiversity

GLOBAL PRESSURE ON BIODIVERSITY

Species potentially affected (*)
Of which:
Global warming potential
Marine ecotoxicity

%

20

15

Eutrophication

%

14

15

Acidification

%

10

13

Other (land use, water, etc.)

%

9

5

(*) Calculated on volume of sales.

The increase of the impact calculated in 2023 is mainly explained by the upgrade of the life cycle assessment methods and databases (the database
was updated from ecoinvent 3.8 to 3.9.1, it is an incremental change, mainly to adapt to the database update including new flows and new
regionalized data). Nevertheless, Solvay has been able to decrease by 19.9% its impact along the value chain in reference to 2018 this is still in linewith the ambition to decrease the impact by 30% by 2030.

5.4.4.

Key achievements

Our Paulinia site in Brazil was awarded the Wildlife Habitat Council’s (WHC) Gold Certificate in 2021. This is the highest level of certification awarded
by the WHC, which is an international organization that promotes biodiversity conservation practices in the private sector. Following several decadesof work to promote harmonious coexistence with nature, the site has become a hub for wildlife in the region. The certification has given the sitea boost to continue increasing biodiversity protection and restoration. In 2022, a biologist was hired to conduct two inventories of species. These
inventories led to the identification of 183 native fauna species, including reptiles, amphibians, insects, mammals, and birds. Endangered species
were also identified, allowing us to plan conservation actions. For example, the puma which was specifically studied in order to help us protect its
habitat.
Our efforts to restore the Cuchia Quarry in Spain received a Cefic08 recognition in 2021. The quarry supplied our site in Torrelavega with limestone
for almost 80 years – from 1927 to 2006. Restoration efforts have been underway for the last 30 years, including when the quarry was still in operation.
Biodiversity roadmap development and implementation has progressed well at two other European sites.
At Dombasle, a site located Eastern of France in the “Lorraine” industrial emblematic area, several projects have been launched to protect species:
the great horned owl in a quarry, fish and flora species in proximity with salt mines, and reptiles and amphibians on the production plant. A
comprehensive project to restore an ecological corridor through several actions has also started. This includes biodiversity restoration around awater storage pond, management of invasive species and vegetation to allow migratory bird nesting in reed beds, planting hedges, and building
wildlife shelters. The actions are going beyond compliance requirements and they are representing a great opportunity to sensitize employees,
local communities, and to allow them to become actors of their natural environment.
Regarding the Rosignano site located in the Tuscany region of Italy, pursuant to the September 5, 2022, cooperation and settlement agreement
entered into between Solvay and one of its partner, Solvay undertook to publicly report on the implementation of its action plan regarding its soda
ash operations at least annually, through its annual report or otherwise.
The action plan announced on September 6, 2022, to reduce limestone residues released into the sea from Solvay Chimica Italia’s soda ash
production in Rosignano, as part of the Group’s efforts to continually optimize the efficiency and sustainability of its operations, and in line with the
IPPC* permit renewed in January 2022:· Represents an estimated €15 million investment in new technical and process solutions, some of which will require approval by the authorities. The
plan will include targeted improvements at different steps of the production process, as well as an optimization of the limestone granulometry
and quality.
· By 2030, Solvay’s objective is to lower by 20% the maximum volume of discharge currently set by its IPPC permit. Solvay will provide biannual
progress updates to the authorities.
· By 2040, Solvay’s ambition is to reduce the discharge of limestone to 40% versus IPPC permit, through investment in research and innovation, in
collaboration with the relevant stakeholders, subject to permit granting and public interest priorities.

08. Cefic: European Council of Chemical Industry Federation.

206

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Summary of the status sent to the Italian Ministry of Environment on February 8, 2024:· All the actions taken are advancing, some of them are concluded and some in progress, and the results are in line with the objective to achieve-20% by 2030.
· The CAPEX expenses are for the moment at the level of more than 10% of the global investment.
· In terms of suspended solid discharge for the year 2023, we are already at -20% and we need to consolidate these results in the next coming years
considering the evolution of limestone quality and the progress of the action plan.
On top, Rosignano biodiversity roadmap includes 35 different actions, with a total budget estimated at €5 million. Implementation of the roadmap
started with several projects on the site and its surroundings, including reshaping and vegetation of a storage area, planting programs around thesite, supportive actions towards several nature protection associations, and training/sensitization activities for the employees.
In addition, the Santa Luce Lake built in the 1960s to provide water to the plant has become a natural reserve. Certified as a Natura 2000 protected
area, the reserve is also used for educational and scientific projects, including studies by the LIPU bird protection association. The reserve is fully
connected with the local community in Santa Luce, which recognizes the importance of this reserve for economic, environmental, and social
activities. The project was chosen to test the IUCN09 Nature-based Solution standards – a tool used for projects providing environmental, economic,
and social benefits.

5.5. Hazardous materials
GRI DISCLOSURES 2-23 3-3 403-7 416-1
MATERIALITY: HIGH
SDG 3 6 12 14 15
5.5.1.

Definitions

Product stewardship means managing risks throughout a product’s entire life cycle, from the design stage to end of life. Risks include the possibilityof injury or impact on health for a third party or damage to third-party property arising from the misuse of Solvay products in a customer’s plant or
use in an application for which the product is not designed. Risk management is particularly important for products used in sensitive applications
like healthcare or food and feed.

5.5.2.

Management approach

Solvay’s Responsible Care policy requires the Group to:· Maintain a comprehensive understanding of each product’s hazards, risks, and impacts related to all life-cycle steps and intended applications.
· Manage product knowledge so as to comply with local requirements on product information, while ensuring worldwide consistency.
· 
Keep records of all necessary and required product safety information to ensure availability throughout the full life cycle, beyond thecommercialization period.
· Send standardized product safety data sheets to customers along with the first delivery and when required by local regulations. This key
information is consistently maintained and distributed worldwide for all products to all customers, in compliance with local regulations and in thelocal languages.
In line with our Responsible Care commitment, we are constantly improving our knowledge of how Solvay products are used and the associatedrisks. The extensive knowledge this represents allows Solvay to characterize and manage risks related to product handling and to prioritize mitigation
actions related to potential inappropriate use. The management of Safety Data Sheets reflects this commitment to ensuring the information on
hazards associated with our products is readily available to our employees and customers.
Solvay ensures that our product portfolio complies with all the relevant regional and national chemical regulations such as REACH (Registration,
Evaluation, Authorization and Restriction of Chemical Substances10) in the European Union, UK REACH in the United Kingdom, K-REACH in South
Korea, Chinese MEE order N°12 in China, KKDIK in Turkey, and TSCA in the US.
In addition, Solvay has a strategy to decrease the use of Substances of Very High Concern (SVHC) in marketed products and more broadly throughout
the entire value chain. We consider the SVHCs on the EU REACH authorization list (annex XIV) and EU REACH candidate list, but we also go beyond
this by including several lists coming from other countries (e.g., POP Stockholm Convention or Harmful Substances Prohibited from Manufacturing- ISHA, Korea), following an internal process in our operations worldwide. Specifically, we have set up our own reference list of SVHCs, the SolvaySVHC and Substance Requiring Attention (SRA). This was established in 2015 and includes three categories:· Black list Solvay-SVHCs: Already undergoing a regulatory phase out process with a known deadline in at least one country or zone, or a restriction
for uses relevant to Solvay.
· Red list Solvay-SVHCs: Currently included in regulatory lists of substances that could enter into a process of special authorization or restriction in
the medium term.
· Yellow list S-SRAs: Substances requiring specific attention, such as substances under scrutiny by authorities, NGOs, scientists, and industries dueto their known hazardous properties or potential effects.
09. IUCN: International Union for Conservation of Nature.
10. Candidate list released on January 17, 2023, and authorization list on April 13, 2022.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENT

207

Risk studies and Analysis of Safer Alternatives (ASA) for red and black Solvay-SVHCs placed on the market are underway, and substances are
replaced with safer alternatives where feasible.
New ASA covering newly identified listed SVHC are being performed within one year. All current Analysis of Safer Alternatives are being reviewed
every three years.

5.5.3.

Indicators

SAFETY DATA SHEETS
Solvay currently places over 1,000 products on the market and produces safety data sheets (SDS) in 41 languages, as well as specific SDS for
63 countries. Product Stewardship programs give adequate information and technical assistance to customers, ensuring a good understanding ofproducts and how to safely use and handle them. Each of our Global Business Units are responsible for ensuring that SDS are revised at least once
every three years, or every time a substance undergoes significant modifications. Solvay manages product information centrally and as legislation
continues to evolve the Group learns more about the conditions under which products are used, so as to record and assess any associated risks.
To make sure that customers are receiving new and updated Safety Data Sheets, and to limit the quantity of paper printed, Solvay uses an automatic
system to send SDS by email. In 2023, this automated shipping function was activated for 100% of Solvay sales. This automatic delivery of the SDS
was successful for 97.8% of shipments, where SDS were available for the delivery country and the customer’s email address was also available. Whenerrors occur, corrections are done and the SDS are automatically or manually sent.

PRODUCT REGISTRATIONREACH is an advanced European framework regulation requiring companies to have detailed knowledge of substances, their hazards, and risks
during use. This knowledge must be collected and organized into reliable and systematic safety information that includes all uses and risks incurredalong the value chain. Solvay fully complies with the extensive REACH requirements for product registrations. We have registered 233 dossiers andare the lead or sole registrant for 95 substances. In accordance with the Cefic Action Plan program, we are also dedicated to improving the qualityof REACH dossiers.
Regular updates of dossiers are performed according to REACH obligations, either as new information becomes available or at the request of theEuropean Chemical Agency (ECHA). We have carried out 20 REACH dossiers updates in 2022 and 19 in 2023.
In addition, Solvay continues to adapt to new product regulations in many countries, notably to cope with emerging, REACH-like regulations in
non-European countries. More specifically we have:· registered 22 in 2021 for TIER One in the framework of Korean REACH and registered eight dossiers in 2023 for the next registration deadline in
2024 (TIER Two);· reported 64 substances or polymers to be registered in the framework of KKDIK Reach Turkey by December 31, 2023 (active dossiers), andregistered 11 lead dossiers;· for UK REACH, Solvay successfully completed one new registration and 253 Downstream User Import Notifications (DUIN); and· submitted two substances in the framework of the new Chinese MEE order N°12 in 2023.

Safer alternatives for marketed products: beyond legislative requirements
Solvay is closely monitoring the Solvay-SVHCs on several worldwide relevant lists (banishment, restriction, etc.) including EU candidate list and
EU authorization list by identifying all marketed products containing a concentration above 0.1% of those substances, sold not only in the EU but
worldwide.
We go beyond what is required by regulation, screening our own broader internal reference list of substances of very high concern (Solvay-SVHCs,
as described above) for our products marketed worldwide.
Units

2023

2022

All Solvay-SVHCspresent in marketed products above 0.1% on a worldwide scope

Number26

24

Analysis of safer alternatives required(2)(1)

Number17

19

Of which completed

%

94

68

Of which effective replacement achieved

%

13

15

(1) According to the black and red Solvay-SVHC lists. SVHCs manufactured by, or forming part of, the composition of products sold by Solvay worldwide. Reference period
for the analysis: April 2022-March 2023.
(2) Analysis of Safer Alternatives (ASA) for potential substitution for an SVHC. A substance may be present in more than one product. One ASA can cover several substances(Grouping by the same concern).

208

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Analysis of safer alternatives is required and planned for a total of 17 combinations of products and applications. Of the 16 analyses of safer
alternatives completed as of December 31, 2023, since the start of the program:· two have led to effective replacement, either through SVHC substitution or reduction below required threshold, or through stopping production.
· two are ongoing, meaning that an alternative has been identified and discussed with customers for implementation.
· twelve have resulted in no available alternatives, either because no substitute is available, there are regulatory obligations to use SVHC for some
applications, or because an alternative has not been requested due to the application in the final product.
There is only one substance listed on the EU candidate list (Bisphenol A). It appears on the Solvay-SVHCs inventory because the analysis is done
worldwide. However, it is neither marketed nor sold in the EU.

Solvay’s ambition to phase out substances of very high concern
Solvay aims to phase out the Solvay substances of very high concern (Solvay SVHC) present in marketed products at a quantity of more than 0.1%,
whenever feasible.

6. BETTER LIFE
6.1. Employee health and safety
GRI DISCLOSURES 2-25 3-3 403-1 403-2 403-3 403-4 403-5 403-6 403-7 403-8 403-9 403-10
MATERIALITY: PRIORITY
SDG 3
6.1.1.

Definitions

Employee health and safety management encompasses occupational safety, industrial hygiene, and occupational health.
Occupational safety is about preventing work-related injuries. Accidents are mostly linked to falls at the same level, human energy, such as pushing,pulling or striking an object, and exposure while opening a line or system.
Industrial hygiene management encompasses the assessment, monitoring, and management of workers’ potential exposures to ergonomic,
chemical, and physical hazards.
Occupational health includes all the preventive actions undertaken in order to protect and promote physical and psychological health at work, bothcollectively and for each individual Solvay employee.
In mid-2020, Solvay began using the OSHA definitions of occupational accidents in order to comply with GRI and enable comparisons outside
Solvay. These are as follows:· Occupational accident: A work-related unexpected and undesirable event resulting in damage or harm, namely injury or illness. Accidents on theway to or from home are not considered work-related unless the worker was traveling for Solvay at the time of the accident.
· Lost Time Injury or Illness (LTII): A work-related injury or illness that results in a work interruption of one or more days, not including the day of theaccident.
· Lost Time Injury and Illness Rate (LTIIR): The number of LTIIs resulting from an accident per 200,000 work hours.
· Reportable Injury and Illness (RII): Work-related injury or illness resulting from an accident with severity above first aid, according to US OSHA 29
CFR 1904.
· Reportable Injury and Illness rate (RIIR): The number of reportable injuries or illnesses per 200,000 work hours.

6.1.2.

Management approach

Solvay requirements for implementing management systems on our sites are covered under section 3.3. Health, safety, and environment
management. The occupational health and safety management systems cover all Solvay employees, while external visitors, parcel delivery people,
and transport drivers not performing loading or unloading on-site fall outside the scope. In addition, our safety management system applies tocontractors.
Hazard identification and risk assessments are performed according to group procedures, which define minimum requirements for methods andthe hierarchy of controls. They cover the following topics or activities:· chemical hazard communication;· chemical risk assessment and management;· hearing conservation (noise exposure management);· prevention of legionellosis;· managing asbestos in buildings and facilities;· respiratory protection equipment;· Group requirements for occupational health;A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENT

209· minimum safety requirements for lifting;· working at height;· working on powered systems;· line breaking;· working in confined spaces;· working in an explosive atmosphere;· lifting;· excavation;· traffic;· personal protective equipment (PPE);· work permits;· management of change (MOC); and· contractor management.
All procedures contain training requirements, guidelines, and on-boarding presentations for use in implementation on our sites. Quality, evaluations,and process improvements are ensured through the sites’ management systems. Site reporting processes identify unsafe situations, near-misses,
incidents, or accidents, as well as those cases with potentially high severity, and also set guidelines for investigating incidents and taking corrective
actions.
Risk assessments are performed in collaboration with occupational health experts. Occupational physicians perform risk-based medical surveillance,
provide advice on improving and adapting working conditions, and promote physical and mental health. All these processes contribute to managing
and minimizing risks at work.
On the shop floor, workers collaborate with industrial hygienists on risk assessments using SOCRATES (Solvay Occupational Risk Assessment
Tool for Employees). This tool gives widespread, easy access to IH methods, tools and databases, consistently performs and documents IH risk
assessments, and enhances traceability of an individual’s potential exposures throughout their working life. Workers are informed of their workrelated risks by supervisors, industrial hygienists, and occupational physicians or nurses.
Formal joint management–worker health and safety committees are established on our sites according to country legislation. Solvay also contributes
to complementary health insurance, for which the terms vary according to the country.
Initiatives to promote health are taken at site level, in collaboration with local physicians and nurses. Examples of such initiatives include nutritional
advice, cardiovascular prevention programs, general check-ups, and fitness sessions led by trainers.

6.1.3.

Indicators

The occupational health and safety indicators result from the safety culture approach implemented to protect everyone working at Solvay. Thisapproach is explained in the Risk Management chapter of this Annual Integrated Report.
Solvay started recording reportable injuries and illnesses on July 1, 2020.
The reporting scope covers all sites under Solvay’s operational control for which the Group manages and monitors safety performance. This includes
our manufacturing, research and innovation, and administrative sites, as well as a series of closed sites with limited activities, and covers Solvay
employees and contractors working on these sites.

NUMBER OF ACCIDENTS
Units

2023

2022

Fatal accidents – Employees

Number00

Fatal accidents – Contractors

Number0

0

H-RII – Employees

Number7

7

H-RII – Contractors

Number

4

4

H-RII – Employees and contractors

Number11

11

RII – Employees

Number27

25

RII – Contractors

Number

18

22

RII – Employees and contractors

Number45

47

LTII – Employees

Number17

14

LTII – Contractors

Number12

17

LTII – Employees and contractors

Number30

31

Note: RII was introduced in mid-2020. In previous years, definitions of reportables were specific to Solvay and therefore cannot be compared.

210

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

HOURS WORKED
Units

2023

2022

Work hours – Employees

1,000 hours

19,91821,248Work hours – Contractors

1,000 hours

13,493

13,141Work hours – Employees and contractors

1,000 hours

33,411

34,389

Employees’ work hours are based on the sum of the monthly active internal workforce (headcount) multiplied by the coefficient of 2,000 hours for
all countries and sites. Contractors’ actual work hours are reported monthly by all sites.

ACCIDENT FREQUENCY RATES
Units

2023

2022

H-RIIR – Employees

Accidents per 200,000 hours worked

0.07

0.07

H-RIIR – Contractors

Accidents per 200,000 hours worked

0.06

0.06

H-RIIR – Employees and contractors

Accidents per 200,000 hours worked

0.07

0.06

RIIR – Employees

0.27

0.24

RIIR – Contractors

0.27

0.33

RIIR – Employees and contractors

0.27

0.27(1)

LTIIR – Employees

Accidents per 200,000 hours worked

0.17

0.13

LTIIR – Contractors

Accidents per 200,000 hours worked

0.18

0.26

LTIIR – Employees and contractors

Accidents per 200,000 hours worked

0.18

0.18

Note: RIIR was introduced during 2020, making 2021 the first full year of application of the OSHA metrics.
(1) 2022 RIIR - Employees and contractors is different than the value published in “supplement of the information document of Solvay in November 2023” due to changes
for the 2022 headcount figures and in the rules of split between Syensqo and the “new” Solvay Group as explained in the section 2.2 basis of preparation.

The Group objective of an RIIR below or equal to 0.32 for 2023 was achieved. The 0.27 performance is the result of the following actions implemented
in 2023:· Interactive safety dialogues in the field.
· Site leadership spending more time in the field.
· Near misses reporting.
· Process safety reporting including low events and actions.
· Solvay Life Saving Rules improvement initiatives with a focus on the top three based on incidents and audit findings to focus efforts on managementof change, work on powered systems, and line breaking. Engage everyone at the site level.
· Field check assessment on a quarterly basis.
· Interactive workshops on these three Solvay Life Saving Rules to discuss each identified Solvay Life Saving Rules.

Industrial hygiene (IH)
A key aspect of our approach to protecting health is the systematic assessment and management of workers’ potential exposure to ergonomic,
chemical, and physical hazards. Global industrial hygiene (IH) procedures define minimum requirements for Solvay’s IH risk assessments andmanagement strategies, including the hierarchy of controls. The IH program encompasses:· Comprehensive chemical inventories established and reviewed at site level, with screening and priority ranking of substances that carry potential
health impacts.
· Solvay Acceptable Exposure Limits (SAELs) developed internally for insufficient or outdated established Occupational Exposure Limits (OELs).
· Occupational Exposure Banding (OEB) in cases where no established OEL exists or there is limited toxicological data. Solvay’s OEB approachprovides a simple, quick, and easy-to-understand hazard ranking.
· Implementation of SOCRATES, a global tool at identified sites, ensuring:-widespread and easy access to IH methods, tools, and databases;
consistent performance and documentation of IH risk assessments; andenhanced traceability of an individual’s potential exposures throughout their working life.

· Established KPIs that allow for identification and tracking of the completion of site chemical and noise risk assessments.

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

211

Occupational health
Key indicators for occupational health are:· Occupational diseases: The incidence rate and causes of disease are used to define preventive and corrective actions.
· Advanced risk-based medical surveillance rate: Used to assess that our medical surveillance is effective.
· Human biomonitoring indicators: Used where applicable to assess chemical exposure and suggest preventive actions.
· Stress prevention and well-being at work (see chapter 6.2.2. of this Annual Integrated Report): Used to identify main causal factors and launch
action plans at site and group levels.
· Health promotion: Promoting a healthy lifestyle at work and beyond.

RECOGNIZED OCCUPATIONAL ILLNESSES

Occupational illness frequency rate (OIFR)

Units

2023

2022

2021

per million hours worked

0.25

0.33

0.50

 IFR is the total number of occupational illnesses recognized each year per million hours worked by Solvay employees. The number of occupationalO
illnesses covers Solvay workers who are active, retired, or have left the company. In 2023, four of the five recognized occupational diseases were in
retired workers, related to past asbestos exposure. One case of hearing loss was found in an active worker.
The figures of 2022 and 2021 have been recalculated for the new Solvay Company.
The majority of the recognized Occupational Illnesses from previous years (2022 and 2021) have been allocated to the perimeter of the new Solvay
Company, while the number of hours worked concerns only the new Solvay Company. That is why the OIFR for previous years could seem artificiallyhigher than what was published before the spin-off of Syensqo.

RECORDABLE OCCUPATIONAL ILLNESSES BY TYPE

Hearing disorders

Units

2023

2022

2021

Number3

2

0

Musculoskeletal diseases

Number2

3

2

Other non-carcinogenic diseases

Number2

1

1

Asbestos-related diseases and cancers

Number20

27

20

Other cancers

Number0

1

1

Not specified/Unknown

Number

0

0

0

Total

Number

27

34

24

The figures in the table above relate to recordable work-related illnesses contracted by Solvay employees who are active, retired, or have left thecompany.
The figures of 2022 and 2021 have been recalculated for the new Solvay company.

Advanced Risk-Based Medical Surveillance
A site is considered as performing Advanced Risk-Based Medical Surveillance if all the following criteria are fulfilled:· The Chemical Risk Assessment completion rate is at least 70%. This is the ratio of the total number of Chemical Risk Assessments, both inhalationand dermal, completed by the site within the last five years, to the total number of Chemical Risk Assessments to be conducted based on theChemical Risk Assessment List established by the site. Until 2022, we considered at least 30% for this criteria.
· The site regularly communicates identified potential occupational risks to the medical service provider.
· At least 70% of the employees scheduled for Risk-Based Medical Surveillance during the year have completed their medical visit.
· In 2023, 51% of our manufacturing and research and innovation sites fulfilled all the above criteria.

Human biomonitoring of exposure
Human biomonitoring (HBM) of exposure involves measuring the concentration of a substance or its metabolites in human fluids, such as blood orurine. It can be used to assess exposure to specific chemicals and helps to verify whether protective measures are effective.
In 2023, 14 sites performed HBM of exposure, for 25 different chemicals (substances or groups of substances).

212

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

HUMAN BIOMONITORING (HBM) OF EXPOSURE
Units

2023

2022

2021

Sites performing HBM of exposure

Number14

10

9Sites with at least one result above the Biological Limit Value (BLV)

Number

0

0

0

The figures of 2023, 2022, and 2021 have been calculated for the new Solvay company.

Health promotion
In 2023, at 89% of our sites, health and well-being topics were covered during our Health and Safety Days events. In addition, survey results showthat 96% of our sites report active promotion and support for the health and well-being activities listed in the following table:

2023
Health and well-being topics during the Health and Safety Days

89%

Permanent multidisciplinary committee that sets and follows actions on well-being at work

73%

Training sessions on well-being at work for employees

73%

Training sessions on well-being at work for leaders

53%

Promotion of physical activity

71%

Promotion of balanced nutrition

53%

Promotion of good sleep and recovery

36%

Prevention of cardiovascular risk

33%

Prevention of tobacco consumption

27%

Prevention of addictions

27%

Prevention and screening for cancer

38%

Seasonal flu annual campaign

84%

6.1.4.

Key achievements

In relation with well-being at work, two key achievements were made (see details in chapter 6.3.2. of this Annual Integrated Report):· Well-being at work training has been provided to 1,438 managers on leading with a well-being mindset.
· A diagnosis on well-being at work and Diversity, Equity, and Inclusion (DEI) was made at company and site level. Seventy sites received their own
report allowing them to make an action plan. This was also included in the STAR Factory project.

6.2. Critical incident risk management
GRI DISCLOSURE 2-27 3-3 307-1
MATERIALITY: HIGH
SDG 3 12 13
6.2.1.

Definitions

Solvay’s reporting of Process Safety Incidents is aligned with the globally harmonized metrics from the ICCA (International Council of Chemical
Associations) and Cefic (European Chemical Industry Council). The Process Safety Incident rate (PSI rate) corresponds to the number of Process
Safety Incidents per 100 employees, including both employees, assuming 2,000 working hours per worker, per year, and contractors. This rate ismonitored and enables benchmarking with peers.
Chemical release:
Low and medium process safety events involve a release of chemicals from a chemical process which meets the consequence thresholds as definedby ICCA Globally Harmonized Process Safety Metrics.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENT

213

Transport safety incidents are incidents occurring during the movement of a chemical product such as:· loading or unloading at a Solvay site;· circulating inside a Solvay site in a vehicle, on the way in or out of the site;· circulating on public roads, rail, air, inland waterways or sea; and· loading or unloading at an off-site location, if Solvay or a logistics provider contracted by Solvay is performing the loading or unloading.

6.2.2.

Management approach

Process safety
Process Safety Management is a management system for designing and operating industrial processes that handle large quantities of hazardous
chemicals. The topic applies to production sites and research and innovation center sites under operational control where a process risk may
be identified. This is an operational perimeter excluding all sites that are not in the process scope: administrative sites, business, engineering,corporate, environmental rehabilitation, etc., but also external warehouses, quarries, and mines, among others. For preventing and controllingincidents in industrial processes, Solvay applies the Process Safety Management PSM Principles on all industrial sites, regardless of whether the site
is covered by regulatory requirements.
Key elements are:· Completion of Process Hazard Analyses to identify high-risk situations. These are performed on each unit with a unique risk matrix to quantify therisk level of every potential accidental scenario, combining severity and probability factors.
· Activation of an Emergency Response Plan in case of severe incidents on site. Relevant internal and external parties are informed through theapplication of Solvay’s crisis management procedure. If needed, the Corporate Crisis Cell (crisis alert duty 24/7) is also activated.
· Systematic analysis of each incident is carried out as soon as possible, in order to identify root causes and implement preventive actions to avoid
similar incidents in the future.
· Central reporting of Process Safety Incidents. The incident severity – medium, high, or catastrophic – is assessed by applying internal criteria,
including consequences on-site or off-site, damage to the immediate vicinity, and quantity of spilled material.
· Publication of process safety bulletins for significant incidents, distributed to all sites. These bulletins are used by the sites as support materials forsafety talks to increase the process safety knowledge of employees.

Transport safety
The major goal of the Transport Safety Management system is a reduction in incidents that could lead to catastrophic consequences. The mainelements are:· regulatory watch and compliance with applicable transport regulations;· training;· selection process for Logistics Service Providers, based on hazard and risk assessment;· operational management of day-to-day transport operations, including loading and unloading;· emergency preparedness and response for levels 1, 2 and 3;· incident reporting and investigation; and· auditing.

Indicators
Process safety
Solvay’s target is to avoid any high, medium, or catastrophic severity incidents and to reduce the Process Safety Incident rate. In the dashboard you
can see the situation with medium and high severity.

Process Safety Incident rate
Process safety incidents (medium, high, catastrophic)1

Units

2023

2022

Medium or higher severity incidents per
200,000 hours worked

0.42

0.82

Number50

95

High or catastrophic severity: reversible injuries off-site, or irreversible injuries on-site, or reversible environmental damage off-site, or damage to equipment with direct
cost above €2 million. Medium severity incident: first aid injuries off-site, reversible injuries on-site, or operating permit limits exceedance, fire, explosion, rupture of a pieceof equipment with damage above €2,500, or chemical release with amount above the ICCA thresholds.

Employees’ work hours are based on the sum of the monthly active internal workforce (headcount) multiplied by the coefficient of 2,000 hours for
all countries and sites. Contractors’ work hours are reported monthly by all sites.

214

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Units

2023

2022

Process safety incidents (medium, high, catastrophic) with environmental consequences (medium,
high, or catastrophic)

Number7

14

Process safety incidents (M, H, C) with environmental consequences (M, H, C) of which with
reportable operating permit limit exceedance and with a chemical release (L, M)

Number5

10

of which without permit exceedance

Number2

4This consolidated data is aligned with the scope for headcount for all operational sites, including research and innovation centers with significant chemical process risks,
but excluding mines, quarries, and laboratories without pilot plants.

Transport safety
All medium, high, and catastrophic transport safety incidents must be reported in the corporate reporting tool, with a detailed description andclassification. Root cause analysis, including actions to prevent recurrence and lessons-learned bulletins are mandatory for all high and catastrophic
severity incidents, and for medium severity incidents resulting in a fire or an explosion, as well as for HSPos (High Severity Potential) Incidents.
These are low or medium severity incidents or near misses that might have been worse (high or catastrophic) if the circumstances had been slightly
different.

TRANSPORT SAFETY INCIDENTS
Units

2023

2022

Medium severity

Number4

4High severity

Number10Catastrophic

Number00

6.3. Labor practices
GRI DISCLOSURES 2-30 3-3 401-2 403-4 407-1
MATERIALITY: HIGH
SDG 3 86.3.1.

Definitions

Employee engagement is the level of commitment, passion, and loyalty an employee has toward their work, team, and company. Solvay believes
that engagement increases performance through higher productivity and employee retention and that engagement is fostered by fair labor
practices and well-being at work.
A constructive relationship with employees and their representatives, built on trust, is considered the basis of fair labor practices at Solvay. This
relationship reflects the Group’s commitment to respect employees’ fundamental human rights and guarantee their social rights.
Well-being at work is a holistic concept which relates to all aspects of the quality of working life that ensure workers are safe, physically and mentally
healthy, satisfied, engaged, and efficient. It addresses recognition and support, work-life balance, employee growth and development, and goodcommunication and collaboration, based on International Labor Organization and World Health Organization definitions.

6.3.2.

Management approach

Pulse surveys
Employee engagement is measured through confidential surveys open to all employees. This includes global surveys as well as local initiatives, suchas “Voice of the People” surveys. The results of our surveys enable the Group, local management, and all operational managers to identify strengths
and areas where the working environment and employee experience can be improved.
In 2023 we continued our series of short Pulse surveys. Two surveys took place in March and September 2023. Available in 14 languages, the Pulse
surveys enable us to listen to the feedback and opinions of Solvay employees around the world. This not only promotes a feedback culture, where
everyone can safely share their opinions and have open conversations with their team and leaders, but also helps to improve employee experienceat work. Our objective was to equip leaders at all levels in the organization with insights about the well-being and experience of their team, foster
open dialogue, and ensure continuous improvement throughout the year.
In November 2022, we conducted a survey for a diagnosis on well-being at work and DEI in collaboration with the University Jaume I. The data wasanalyzed in 2023, group and site reports were done, and actions were defined accordingly. More detail is provided in the next section “Better Lifeat work.”A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENT

215

Better Life at Work
Since October 2016, a multidisciplinary Committee on Better Life at Work (BLAW) has been in place to define and promote a well-being at work
(WBAW) program. It includes occupational physicians and psychologists, human resources experts, health, safety, and environment experts, Global
Business Unit representatives, and sustainable development experts, representing all regions.
In 2021, a new Better Life at Work strategy was launched, focused on three pillars:· Governance: A multidisciplinary Better Life at Work Steering Committee, including representatives from our Human Resources (HR), Occupational
Medicine, Health, Safety, and Environment (HSE), and Sustainable Development Functions, and an employee representative. Solvay’s Chief
People Officer serves as the Sponsor.
· Observatory: The Better Life at Work Observatory includes (1) indicators gathered from HR and HSE data (absenteeism, accidentability, turnover,and diversity) displayed in the Better Life dashboard, (2) the quarterly Pulse surveys, (3) diagnosis and assessment on well-being at work and DEI(HERO-DEI, see below), and (4) the Burnout Observatory. Managers can consult the indicators in the dashboard.
· Positive actions: These are defined using the information gathered through the Observatory. In 2023, training sessions on well-being at work were
provided to employees and managers (see below). Solvay offers mental health support for employees thanks to a global contract with WorkPlace
Options, also covering employees’ family members, and the global network of occupational physicians and nurses.
For diagnosis and assessment on well-being at work we have collaborated with the University of Jaume I in Spain since 2001. They are involved witha similar approach in the European H-Work Project aiming to promote mental health in small- and medium-sized enterprises and public workplaces,
drawing on funding from the European Union’s Horizon 2020 research and innovation program.
After a pilot phase, we carried out a HERODEI survey in November 2022, which included a diagnosis on well-being at work (HERO model) andDEI (Diversity, Equity, and Inclusion). This helps us to assess which risk factors we need to address for well-being at work, as well as the positive
factors that we can build on to create a sustainable Better Life at Work. The participation rate was 64.7%. The results at company and site level wereanalyzed at the beginning of 2023.
· Each site with a participation rate above 40% received its own report in order to set their action plan. This is also included in our project STAR
Factory. Seventy sites of the new Solvay received their report. In each report there was a benchmark with Solvay, an identification of the key drivers
for engagement and burnout risk, and recommendations by priorities. Several explicative and sharing sessions were organized, as well as support.
· At company level the main drivers impacting well-being were:
1) Positive drivers (Resources): Support to individual development, Recognition from the leader, Inclusive leader; and
2) Negative drivers (Demands): Role ambiguity, Mobbing risk, Emotional dissonance.
Recommended actions were mainly oriented on Positive and Inclusive leadership, and on increasing Engagement and decreasing Burnout risk by
acting in the main drivers mentioned above. That is why we decided to put a focus on leaders, offering worldwide training about “Leading with awell-being mindset.”
Between October 2022 and May 2023, workshops on leading with a well-being mindset were provided to leaders in all countries in collaboration
with Empreinte Humaine. In total, 1,438 leaders were trained, in 150 sessions, 13 languages, and 18 countries, being the majority of them presential(these figures also include Syensqo). They covered topics such as healthy work, healthy leadership, and providing healthy support to collaborators.
More than 75% of leaders rated the workshop very useful.

Solvay Global ForumRegarding labor relations, discussions and activities are held at four levels: site, country, European, and global.
In 2015, Solvay created a global employee representative body, the Solvay Global Forum, composed of employee representatives from the mainareas where Solvay operates, namely Europe, the US, Brazil, and China. Video conferences are held quarterly, bringing together the Solvay Global
Forum and the Group’s top management to comment on and discuss the Group’s quarterly results and to keep everyone informed of the main new
projects, like the Partial Demerger project. Two agreements have been signed with the Solvay Global Forum: Global Performance Sharing 2023 andSolvay Cares, the latter of which extended maternity and co-parent leave to 16 weeks. An ad hoc spin-off committee has also been set up, bringing
together members of the Solvay Global Forum and the European Works Council to cover this major project.

European Works Council
We have been in permanent dialogue with our European Works Council (EWC) for more than 20 years. In 2023, the EWC met physically on several
occasions and the EWC Secretariat met on a monthly basis, either virtually or physically, with senior group management, to help steer Solvay’s
evolution. The main topics discussed were the Partial Demerger project and Solvay’s and Syensqo’s new operating models, actions taken by theGroup to face the consequences of the Ukraine war, the energy crisis, the support given to employees to cope with high inflation, the Group
Sustainable Development strategy, and Solvay’s financial results.

216

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Solvay Cares
In February 2017 Solvay signed a global agreement guaranteeing a minimum level of welfare and healthcare protection for companies in which
Solvay SA owns a share, directly or indirectly, of more than 50%. Solvay Cares was fully deployed in 2019 and aims to provide four major benefits:· full income protection during parental leave, with 16 weeks for both parents;· a minimum coverage of 75% of medical fees in the event of hospitalization or severe illness;· disability insurance in the event of lasting incapacity; and· life insurance, including coverage for the family or partner.
An addendum to the agreement was signed in December 2021, introducing more flexibility for parents to enjoy parental leave according to familyneeds, and adding the Employee Well-being Support program, through which we committed to giving all employees access to confidential mental
health support as of December 2021. Since January 2023, globally aligned standards of the Employee Well-being Support Program have been
applied, ensuring coverage not only for the employee, but also for all members of the employee’s household. In 2023, a task force has been set up
to initiate a Fair Living Wage program with a pilot in three countries: US, China, and UK. The initiative will be continued in 2024 and extended toother countries with a commitment to cover 100% of Solvay employees by 2026. In 2023, we have also introduced the caregiver leave: a maximumof five days to support or care for a loved one.

The IndustriALL Global Union Framework Agreement
On December 17, 2013, Solvay signed a Corporate Social and Environmental Agreement for the whole group with IndustriALL Global Union.
This agreement is based on International Labor Organization standards and the principles of the United Nations Global Compact. It is a tangible
expression of Solvay’s determination to ensure that basic labor rights and the Group’s social standards in the areas of health, safety, and environmental
protection are respected at all of our sites.
In March 2022, we renewed our Global Framework Agreement with IndustriALL. We strengthened the content of the agreement in several important
areas, including teleworking rights, EU due diligence and UN binding treaty relating to the supply chain, just transition, skills transfer, and workers’
rights to health and safety.
With this renewed and strengthened agreement, Solvay commits to respecting the international social standards defined by the International
Labor Organization and the principles of the UN Global Compact, including in countries that have not ratified it, as well as the OECD Guidelines
for Multinational Enterprises.
The four-year agreement includes serious commitments on due diligence along the supply chain. The agreement establishes a new working groupof workers and management to investigate suppliers’ respect for core labor rights and seek remediation where problems are found. Solvay commits
to suspend contracts with suppliers that fail to remedy human rights and environmental abuses following warnings.
In 2023, IndustriALL representatives, together with Solvay management, visited three of our German subsidiaries in order to assess labor relations.
It was an opportunity to confirm the positive working atmosphere, safety situation and industrial relations, and to identify areas for improvement.

6.3.3.

Indicators

In 2023, two Pulse surveys were launched in March and September to measure employee engagement worldwide. An average of 6,000 responses
were gathered with a response rate of around 67%.
Each survey asked ~15 questions measuring several topics important to the organization such as well-being, motivation, performance andrecognition, safety, ethics and compliance, and organizational transformation.
Additionally, employees were asked how they were feeling with over 77% on average feeling “OK or better” which is slightly better than last year.
In addition to our Employee Assistance Program, Solvay has put together a guide for managers to help them better support their teams and a flier
for all employees, available in multiple languages. These provide guidance and suggestions about where to turn for help and encouragement, inorder to better support individuals who have reported feeling “less than OK.”

DURING THE LAST FOUR WEEKS, IN GENERAL, HOW HAVE YOU BEEN FEELING?
Units

March 23

Sept. 2023

OK or better

%

77

78

Less than OK

%

23

22

We also include two engagement questions in our Pulse survey annually. This revealed that about 76% of employees were satisfied with Solvay as
an employer and that about 72% would recommend the company as a great place to work.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENT

217

Employee Representation Indicator
All Solvay employees are covered by a collective agreement. This is the IndustriALL Global Union Framework Agreement which is behind thecreation of the Solvay Global Forum, and a signatory to agreements such as the Solvay Care Agreement and the Solvay Profit Sharing plan.
Trade unions are present at a majority of Solvay sites around the world. Union membership is estimated at 30% in Europe, 25% in South America,
6% in the US, 40% in Mexico and 45% in APAC (AU, JP, KR) with the exception of China (99%).

6.3.4.

Key achievements

First Employee Share Purchase Plan launched with high level of subscription
In December 2021, the Group launched a Global employee shareholding initiative that the Solvay Global forum wished to be an inclusive, simple,
and meaningful way to create sustainable shared value for all. The Solvay Shares program is now operational to employees around the world,
irrespective of their position or grading (excluding executive management). Employees get one free share on registration, then one free sharefor every two shares purchased. For every two shares they own after a lock-in period. Of our employees, 38% from 22 countries have subscribedto these shares, and get the same rights as every other shareholder. This program should increase employees’ understanding of the Group’s
performance, as well as their sense of belonging.

2023 Solvay Cares Agreement: A new commitment that supports caregiving
In 2023, Solvay CEO and Solvay Global Forum Coordinator have signed a new Solvay Cares Agreement. In addition to the current benefits, Solvay
now supports employees with caregiving duties. Employees can take a maximum of five days a year to handle unexpected situations where theymust care for a loved one.
Solvay opened a bank of days off and offered 40 days off to launch the program. Employees can also donate days off to their colleagues.
Solvay Cares already offers a minimum level of protection in terms of welfare and healthcare for all its employees worldwide. This protection
includes major healthcare costs, disability leave, maternity leave, paternity leave, adoption leave, support of the family in the case of the death ofan employee, and employee well-being support – and now caregiving is included. One of the key measures we took recently was to broaden our
Solvay Cares benefits by providing 16 weeks of parental leave to all co-parents employed by the company regardless of gender.

6.4. Diversity and inclusion
GRI DISCLOSURES 3-3 405-1 405-2
MATERIALITY: PRIORITY
SDG 8
6.4.1.

Definitions

Solvay defines diversity, equity, and inclusion in the following way:
· Diversity: The representation of various identities and differences of individuals in a group.
· Equity: Creating equal access to opportunity by recognizing the existence of advantages for some and barriers for others, promoting justice,impartiality and fairness within procedures, processes and distribution of resources by institutions and systems.
· Inclusion: Actively and intentionally engaging people with different identities and enabling them to feel valued, able to fully contribute, and be
welcomed within a given setting.
Management categories are defined on the basis of the Hay Job Evaluation Methodology:· Senior management: Hay points 924 and above.
· Middle management: Hay points from 531 to 923.
· Junior management: Hay points from 304 to 530.
For the Diversity and inclusion indicators, the active internal workforce on the December 31, 2023, has been considered.

6.4.2.

Management approach

We have identified nine action plans to foster diversity, equity, and inclusion:· Diversity-

Accelerate gender parity at all mid and senior levels.
Make our workplace more accessible for people with disabilities.
Develop Employee Resource Groups (ERGs) to create both a diverse work environment and an inclusive culture within the organization.

· Equity-

Assess if there are undesired pay gaps and close them.
Ensure fair recruitment: all mid and senior level job openings to have a shortlist comprising 50% of under-represented groups, including
women.
Ensure equitable access to career opportunities and development: set up mentor/mentee programs starting with under-represented groups.

218

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3· Inclusion-

6.4.3.

Build an inclusive employee experience: set up an inclusion index, monitor progress, and continuously improve.
Development program for Solvay leaders to grow and nurture an inclusive mindset.
Build a culture in which individuals feel empowered to speak out or speak up when they experience or witness non-inclusive behaviors.

Indicators

At group level, we have identified five areas of focus for diversity, which receive specific attention and monitoring to ensure consistent improvement
across the organization:· 1) Improving the gender mix at all levels of the organization.
· 2) Leveraging the generational mix to optimize learning, knowledge, and experience.
· 3) Developing national and cultural talent that mirrors growth opportunities.
· 4) Enriching the team mix by leveraging experiences and backgrounds.
· 5) Measuring the ratio of base salary of women to men by management categories in our largest countries of operation.
Country- and site-specific actions are also crafted in response to the local context, through Solvay’s sustainability network and best practices.

WOMEN IN SENIOR AND MIDDLE MANAGEMENT

Senior and middle management

Unit

2023

2022

%

26.3

28.8

With the spin-off of Syensqo, the population of mid and senior management at Solvay shrank by -4.3%, resulting in a drop of the proportion of
women in mid and senior management from 28.8% (end of 2022) to 26.3% (end of 2023) without changing Solvay’s dedication to gender parity
within 10 years.

GENDER DIVERSITY BY EMPLOYEE CATEGORY
Units

2023

2022

Women in senior management

%

23

21

Women in middle management

%

27

30

Women in junior management

%

38

38

Women in non-managerial positions

%

20

19

Total women in Solvay

%

24

24

Units

2023

2022

Headcount

105

114

AGE GROUP BY EMPLOYEE CATEGORY

Senior management
Percentage under 30 years old

%

0

0

Percentage between 30-49 years old

%

27

34

Percentage 50 years old and older
Middle management

%

73

66

Headcount

975

1,014

Percentage under 30 years old

%

0

0

Percentage between 30-49 years old

%

45

47

Percentage 50 years old and older

%

55

52

Headcount

1,768

1,864

%

6

7

Junior management
Percentage under 30 years old
Percentage between 30-49 years old

%

66

67

Percentage 50 years old and older

%

28

26
6,387

Headcount

6,257

Percentage under 30 years old

Non-managerial

%

14

14

Percentage between 30-49 years old

%

53

54

Percentage 50 years old and older

%

33

32

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

219

SOLVAY’S WORKFORCE BY AGE
Units

2023

2022

Under 30 years old

Number971

1,002

Between 30-49 years old

Number

4,962

5,221

50 years old and older

Number

3,170

3,155

Total headcountNumber9,105

9,379**2022 Solvay Group headcounts have been restated from 22,047 to 21,998 (i.e., -49 headcounts), due to retroactive employee data changes performed in 2023 (inactive
headcounts departure, new hires, terminations). This 49 headcount gap has been allocated Syensqo (60.45%, i.e., -30 headcounts) and the new Solvay (39.55%, i.e., -19
headcounts).

According to the above table, the age structure is currently:· 34% older than 50;· 56% between the ages of 30 and 49; and· 11% younger than 30.
Solvay performs regular employee surveys to take the pulse of its workforce. Once per year, the survey is dedicated to measuring the feeling ofinclusion and well-being; however, due to the Solvay spin-off in 2023, the next inclusion and well-being survey was postponed to 2024.
Employees have the ability to self-identify, allowing the identification of any inclusion experience gaps. Based on the 2022 survey, which wasanswered by 64.6% of Solvay’s workforce:· 4% of respondents self-identified as having a disability (visible or invisible, such as mental health challenges);· 2% of respondents self-identified as LGBTQ+; and· 8% of respondents self-identified as a member of an ethnically under-represented group in the country that they live in.

RATIO OF BASIC SALARY OF WOMEN TO MEN BY MANAGEMENT CATEGORY
The table below represents the ratio of unadjusted (without correction for seniority) average pay between male and female employees where theaverage pay of male employees is 1.00:

Country

Junior management

Middle management

Senior management

Belgium

1.19

0.94

0.66

Brazil

1.00

1.05

1.07

China

1.11

0.97

ND

France

0.97

0.98

0.62

Italy

0.96

0.89

ND

US

1.00

1.01

ND

**Not Disclosed (ND): Too few data points in one or two measurement groups to make a statistically meaningful measurement.

We created a statistically-sound model for computing an “expected salary” by country and job class, against which we measured pay gaps. On
that basis a pay gap review was conducted for 951 employees that were identified as priority for manual analysis. When the pay gap could not be
objectively justified by performance, seniority, or another objective reason, it led to an off-cycle salary increase, performed in January 2023. This
exercise was conducted in a gender neutral manner.

6.4.4.

Key achievements

Driving momentum and engagement through our Employee Resource groups (ERGs)
This year, we had a total of nine employee resource groups (ERGs) led and driven by our employees to create a network and community for thediversity of our company. The Voice of Asia ERG, aimed at establishing mutual understanding between Asian and Western cultures, officiallylaunched, sharing their mission with individuals with the company. In addition, our LGBTQ+ Alliance ERG created the Transgender and Gender
Non-Conforming Support group and spearheaded a new partnership with The GenderCool Project, a US non-profit helping replace negative
stereotypes and misinformation about being transgender and non-binary, presenting the world with positive stories about young non-binary andtransgender people who are thriving.
Co-sponsored by the LGBTQ+ Alliance ERG, our site in Anan, Japan, collaborated with the Japan LGBT Association to further engage employeeson DEI. A seminar was held in which over 70 participants attended both on-site and virtually. In addition, the Japan LGBT Association welcomed amember of the LGBTQ+ Alliance to speak on their radio show to discuss Solvay and its DEI activities.

220

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3Lastly, Solvay’s ADAPT ERG celebrated Disability Awareness Month for the first time, kicking-off with a Disability Awareness Panel featuring ourChief People Officer, Disability:IN, and one of Solvay’s sponsored paralympians. Other events from the month included a session with Lingvano tobring awareness on sign language and its importance to the community. At the end of last year, we also partnered with Wipro to launch a diagnosticof our digital accessibility practices to ensure employees can thrive in the workplace.

6.5. Recruitment, development, and retention
GRI DISCLOSURES 2-7 2-8 3-3 401-1 401-2 404-1 404-2 404-3
MATERIALITY: HIGH
SDG 8
6.5.1.

Definitions

Recruitment, development and retention provide data linked to talent management. This relates to how Solvay is attracting, retaining, anddeveloping talent and includes details on career management and access to training, coaching, and mentoring that enables each employee totake the lead in developing their career and reaching their full potential.
Headcount refers to employees that have a contract with Solvay and are classified as active, as they have a position in the organizational chart.
Full-Time Equivalent (FTE) corresponds to the working time capacity of active employees. Apprentices, trainees, and students are excluded fromour figures.

6.5.2.

Management approach

Recruitment and retention
Of the 983 positions recruited externally in 2023, 526 were filled by employees aged below 30. The Group also welcomed 76 apprentices and
167 trainees.

Onboarding newcomers
Of all newcomers who joined Solvay in 2023, 92% were satisfied with the hiring process and their decision to join the Group.

Learning and development

AVERAGE HOURS OF TRAINING PER EMPLOYEE
By management level

Units

2023

2022

Executive manager

Hours

11:57

13:37

Senior manager

Hours

14:08

15:36

Middle manager

Hours

14:26

11:28

Junior manager

Hours

17:27

16:17

Non-managerial

Hours

13:34

08:21

By gender

Units

2023

2022

Women

Hours

16:42

16:26

Men

Hours

12:58

12:22

14:04

13:23

AVERAGE TRAINING HOURS

Total

Performance and development cycle
The performance and development cycle applies to the entire managerial population. It is also used by about 1,035 non-managerial employees,
representing 33% of the non-managerial population. Local performance and development tools and processes are available for the population notcovered by the performance and development cycle online tool.

6.5.3.

Indicators

In 2023, Solvay’s total headcount was 9,105 active employees. The number of Full-Time Equivalent (FTE) employees was 9,043.4. Apprentices,trainees, and students are excluded from this figure.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENT221

SOLVAY’S WORKFORCE BY REGION
Units

2023

2022

EuropeNumber

5,524

5,616

Women

%

25

25

Permanent staff

%

97

97

Number

1,195

1,297

Women

%

32

32

Permanent staff

%

84

77

North America

Number

883

963

Women

%

20

18

Permanent staff

%

100

100

Latin America

Number

1,503

1,504

Women

%

18

18

Permanent staff

%

99

97

Asia-Pacific

TOTAL HEADCOUNT

Number

9,105

9,379

Women

%

24

24

Permanent staff

%

96

94

Units

2023

2022

Number

8,738

8,854

SOLVAY’S WORKFORCE

By contract and by gender
Permanent contract
Of which women

%

24

24

Number

366

526

%

36

33

Full-time contract

Number

8,869

9,144

of which women

%

23

23

Part-time contract

Number236

235

Of which women

%

63

62

Senior manager

Number104

114

Middle managers

Number975

1,014

Junior manager

Number

1,768

1,864

Non-managerial

Number

6,257

6,387

TOTAL HEADCOUNT

Number

9,105

9,379

Temporary contract
Of which women
By employment type

By employment category

222

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

HIRINGS
Units

2023

2022

Asia-Pacific

Number91

127

EuropeNumber586

745

North America

Number124

145

Latin America

Number

184

234

Male

Number600

797

FemaleNumber

350

438

<30

Number

526

605

30-49

Number

370

570

>49

Number

57

62

TOTAL HIRINGS

Number

984

1,251

Units

2023

2022

Asia-Pacific

Number109

118

EuropeNumber468

589

North America

Number78

112

Latin America

Number

142

183

Male

Number550

668

FemaleNumber

247

335

<30

Number

169

193

30-49

Number

301

426

>49

Number

327

384

TOTAL LEAVES

Number797

1,003

By region

By gender

By ageALL LEAVES

By region

By gender

By ageA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENT

223

VOLUNTARY LEAVES
Units

2023

2022

Asia-Pacific

Number51

69

EuropeNumber181

213

North America

Number32

50

Latin America

Number

36

59

Male

Number195

260

FemaleNumber

106

131

<30

Number

83

98

30-49

Number

176

239

>49

Number

41

54

TOTAL VOLUNTARY LEAVES

Number

301

391

By region

By gender

By age6.5.4.

Key achievements

In 2023, Solvay made a significant push towards DEI, through different initiatives such as the collection of information from candidates and employees– on a voluntary and self-declaration basis – to better understand the strengths and room for actions. Additionally, two major partnerships were builtwith major DEI associations to better diffuse inclusion culture within the Group and promote our engagement on this important matter.
On the recruitment angle, the Group started to develop an in-depth workforce needs planning, to accelerate both internal movement, and offer
more opportunities to our people, as well as external hiring to secure attracting the best talent on the market.
As a recognition of our people strategy, Solvay has been awarded as a Great Place to Work® for three of our most important countries around theglobe. This recognition is granted following a survey conducted among all local employees, assessing various angles of our HR practices.
Linked with our Partial Demerger roadmap, special care was provided for employees in order to mitigate the changes and impact, while ensuringbusiness continuity, through access to dedicated well-being moments, peer-to-peer sessions, and deepened HR support. This was also a major
opportunity for many colleagues to take part of once-in-a-lifetime projects and acquire new skills.
One of the most powerful enablers for employees has been the rollout of our STAR Factory massive investment program. Aiming to reshape thefuture of our manufacturing sites, it has proven to be a unique learning experience for hundreds of people at all levels, discovering new skills,
enhancing digital capabilities, and opening new career paths.
Over the past year, our organization has made remarkable progress in advancing the skills and knowledge of our team. The Sales Academy launched
15 extensive courses, blending e-learning with instructor-led sessions, attracting 424 unique participants for a total of 1,035 course completions,highlighting our commitment to ongoing learning and professional growth.
Our Leadership Academy’s journey saw 222 leaders participate, reflecting our dedication to cultivating leadership excellence. The involvement ofeight ambassadors significantly enhanced our global presence and organizational growth. The Career Catalyst Program, offering self-reflection
and career development resources, engaged 172 employees in 2023. Additionally, language development through Rosetta Stone was utilized by
718 employees and their families, covering 14 languages.
In 2023, our workforce at Solvay dedicated 4,771 hours to skill enhancement via the digital platform, averaging 2.3 hours per person. This substantialcommitment to skill development projects demonstrates Solvay’s focus on nurturing a knowledgeable and adaptable workforce ready to meet the
dynamic demands of the industry.

6.6. Corporate citizenship
GRI DISCLOSURES 3-3 413-1
MATERIALITY: HIGH
SDG 17
Solvay’s Corporate Citizenship program is our guide to making a positive impact on society at large, and our stakeholders, partners, employees,
investors, local communities, customers, and others. The contributions we make are derived from our technologies, solutions, and innovations, aswell as our spirit of service and giving. Disclosure of Solvay’s indirect economic impact is provided in this section.

224

6.6.1.

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Definitions

Solvay remains deeply committed to philanthropic endeavors through our contributions to worldwide societal challenges, supporting projects inthree distinct areas: Protecting the Planet, Nurturing Innovation, and Fostering Education. Our initiatives in each of these three categories are closelyaligned with our business, including our active involvement in several flagship endeavors that truly reflect the way we partner with our stakeholders.

6.6.2.

Management approach

The Corporate Citizenship Steering Committee is composed of five members and chaired by Solvay’s Chief Executive Officer. The Committee
gathers three times a year, approves budgets, and decides on projects costing €50,000 or more.
Business Programs for Social Needs are programs that generate business value through addressing social needs. These programs fall under thegovernance of the relevant GBU.
Site directors are accountable for developing and implementing each site’s societal actions plan. This involves assembling a dedicated working
group including the site director, HR manager, communication manager, local sustainability correspondent, and employee representatives.
Employee initiatives are encouraged and supported. An example of this is our Citizen Day actions: the concept is proposed by the Corporate
Citizenship committee, but implemented by the individual sites.

6.6.3.

Indicators

Citizen Day 2023
Citizen Day gives employees around the world the opportunity to engage in actions with local communities. The event was created in 2019 toencourage employees to act for the planet and local communities.
Citizen Day 2023 focused on our 160th anniversary celebration. Over the course of the year, we’ve taken a closer look at the early days of Solvay, therole of women in Solvay’s history, and our commitment to science, social responsibility, and sustainability, and the spirit of mentorship.
Citizen Day 2023 saw employees across all sites worldwide take action to create a better future through mentorship, hosting open days with local
communities, hosting a webcast with a top expert on the chemistry of cooking, and organizing workshops and games for employees to re-discoverand celebrate Solvay’s major milestones. Citizen Day activities took place at global, site, team, and individual levels, and in both virtual and in-personformats.
Key figures from Citizen Day 2023 include:· 6,900 participations, of which 2,600 external people from local communities taking part in our open days, volunteering or mentoring events;· more than 40 activities across the board; and· 21 participating sites.

Local societal actions in 2023
Solvay defines societal actions as a volunteer activity developed by our sites, extending beyond our established boundaries, with the goal ofgenerating positive impact on society or addressing social and environmental challenges. These actions are carried out and designed to promote
well-being, contribute to the betterment of communities, and align with one or more of the United Nations Sustainable Development Goals (SDGs).
In 2023, on the basis of voluntary reporting, 35 sites reported that more than 4,000 participants had participated in societal actions, while noting thatan employee may have participated in several actions.
The total amount donated through societal actions is around €400,000, on the basis of voluntary reporting.
Societal actions invested in education, mentoring, and training for students and children. Sites opened their doors to the community, offered
students training programs, and training to raise awareness on sustainable development. Societal actions supported local communities throughinvestments in accessibility and landscaping, food donations, blood donations, clothing collections, and essential goods distributions.

6.6.4.

Major projects

CERN: Fostering interest in STEM and STEM careers
The CERN-Solvay Education Programme was launched in January 2022. Designed to foster interest in science, technology, engineering, andmathematics (STEM) and STEM careers, the program combines both online and on-site learning at CERN, starting with education content aimed ata global online audience and progressing to an opportunity for students to engage more deeply with research at CERN.
The program is part of the education portfolio of Science Gateway, CERN’s new flagship project for science education and outreach. The program
has three levels:· Level 1: Online social media education content.
· Level 2: Online courses for high school students.
· Level 3: On-site international Solvay camp.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENT

225

XperiLabThe Foundation Enterprise Institute was set up by the Royal Institute of Natural Sciences in Belgium and Solvay to help raise awareness of scienceamong young people and to provide teachers with tools they do not always have in the classroom.
Since 2010, the Foundation has been running the XperiLab project. It consists of a 16-meter long, 32-tonne truck that unfolds into a laboratory
capable of accommodating a complete class of 10-14-year-old students, giving them an opportunity to experience science in a positive way,encouraging them to consider scientific and technological careers as a serious option. The laboratory truck goes from school to school, getting
young people in Belgium involved in science. The approach is supported by the Ministers of Education of the three Belgian communities and theobjective is to welcome three classes to the truck per day.

7. SUSTAINABLE PORTFOLIO
7.1. Product design and life-cycle management
GRI DISCLOSURE 3-3 416-1
MATERIALITY: PRIORITY
SDG 12, 13
7.1.1.

Definitions

Solvay’s Sustainable Portfolio Management (SPM) focuses on sustainable business solutions. The SPM methodology is designed to boost Solvay’s
business performance and deliver higher growth, by letting decision makers know how our products contribute to sustainability with regard to two
factors:· The environmental footprint related to their production and associated risks and opportunities, based on cradle-to-gate Life Cycle Assessments(from resource extraction to the factory gate, before it is transported to the consumer).
· How their applications create benefits or challenges from a market perspective, based on a qualitative assessment using a cradle-to-cradle scope.
Life Cycle Assessment (LCA) is a tool for compiling inputs and outputs, along with an evaluation of the potential environmental impacts of a productsystem throughout its life cycle. LCA methodologies follow international standards, namely ISO 14040, ISO 14044, and ISO 14046 norms.
A sustainable solution is defined by Solvay’s Sustainable Portfolio Management tool as a product in a given application that makes a greater socialand environmental contribution to the customer’s performance and, at the same time, demonstrates a lower environmental impact in its production
phase.

7.1.2.

Management approach

SPM assessments are performed every year in order to capture the most recent signals from the market and cover more than 80% of group revenue.
Since its implementation in 2009, the Sustainable Portfolio Management tool has been widely adopted by Solvay Global Business Units andFunctions to integrate sustainability into their key processes:· The Sustainable Portfolio Management profile is an integral part of strategic discussions between Global Business Units and the Executive
Committee.
· The SPM tool is used to evaluate merger and acquisition projects, to determine whether an investment is feasible in light of Sustainable Portfolio
targets.
· Investment decisions (capital expenditure above €4 million and acquisitions) made by the Executive Committee or the Board of Directors include
a sustainability aspect that involves an exhaustive SPM analysis of the potential investment.
· All research and innovation projects are evaluated using SPM.
· SPM is used in marketing and sales to engage customers on fact-based sustainability topics, such as climate change action, renewable energy,
recycling, and air quality, with the goal of differentiating and creating value for Solvay and the customer.
Solvay Life Cycle Assessments are managed by a dedicated corporate team with direct links to all business units and services. Having a dedicated
LCA team makes it possible to maintain a high level of staff competency and coordinate updates of the main methodologies used based on bestpractice. Core LCA activity is based on recognized tools, software, and databases, and we also have our own database, specific to Solvay businessand innovation segments.
The LCA team is also called upon to support business activity concerning customer relations, by sharing environmental and LCA data on products
to enhance understanding and environmental impact assessments along the value chain, from cradle-to-grave or recycling. Examples include theautomotive sector, the construction sector, and Product Carbon Footprint declarations for our customers.

226

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Taking part in world class Life Cycle Assessment platforms
To maintain a high level of LCA expertise, we participated in 2023 in the following collaborative platforms:· International Reference Centre for the Life Cycle of Products, Processes and Services (CIRAIG): Solvay joined CIRAIG in 2012 as an industrial
partner, ensuring access to high level research and expertise on Life Cycle Assessment methodologies.
· Association Chimie du Végétal: Solvay is a member of this association in France focused on the use of bio-sourced materials in chemistry.
· SCORE Life Cycle Assessment platform: This platform was created in March 2012 to promote collaboration between industrial, institutional, andscientific actors, and to foster positive developments in environmental quantification methods, particularly in Life Cycle Assessments, to be shared
and recognized at European and international levels.
· Roundtable for Product Social Metrics: This association of industry representatives and consultants establishes guidelines for assessing the social
impacts of industrial product life cycles.
· SETAC: Solvay has been a member of the SETAC LCA steering committee, an incubator for developing life cycle assessment (LCA) to advance thescience, practice, and application of LCAs to reduce the resource consumption and environmental burdens associated with products, packaging,processes, or activities.

7.1.3.

Indicators

In 2023, we continued to perform cradle-to-gate Life Cycle Assessments to cover our new products and the product changes. LCA team manages
a product database which is continuously updated to include the most recent industrial or innovation data.

REVENUE BREAKDOWN BY SPM HEAT MAP CATEGORIES
Units

2023

2022

Solutions

%

44

43

Potentials

%

15

15

Transitions

%

23

26

Challenges

%

10

8

Not evaluated

%

8

9

In 2023, the proportion of net sales from sustainable solutions improved by one percentage point. Although the net sales decreased about 12%
between 2022 and 2023, our sales of products in Solutions decreased only by 9%, explaining this increase and showing that those products areoffering a unique solution in the market. This is driven by the automotive market with Silica, the air and water treatments with Soda Ash andPeroxides, and better market alignment of our solutions toward sustainability with Peroxides.
Last year, we substituted the Neutral category with two new categories: Transitions and Potentials. The Potentials category mirrors the potential
to join the Solutions category by acting on the manufacturing environmental footprint which do not have negative nor outstanding sustainability
performance, if any. These are products that consumers need, but which environmental footprint can be improved. The Transitions category
identifies low negative sustainability.
Starting in 2024, the SPM tool will be reviewed in order to help us to track and follow new ESG material risks and opportunities. All the analysis andresults will also help to support the Group strategy.

External validation
Since 2009, with the exception of 2019 and 2020, Arthur D. Little (ADL), our partner in developing and improving our SPM methodology, hasperformed an in-depth verification of our market alignment results. In 2022, ADL screened every Product Application Combination in the databaseand 70 PACs were selected for deeper review, covering about 15% of the global net sales. In 2023, there was no review performed by Arthur D.
Little (ADL).

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENT

227

7.2. Circular economy
SDG 12, 13
7.2.1.

Definitions

Circular economy is a sustainable approach to business that aims to decouple economic growth from consumption of natural resources. Solvay’s
Circular Economy Business Solution Program is underpinned by a transition to renewable energy sources. It is based on three principles:· Shifting our product portfolio to bio-based feedstocks, recycled-based feedstock, and CO2-captured based feedstock.
· Retaining the value of the products and materials currently in use by enabling product recycling (process additives and technology) or recyclability
by design.
· Designing products that increase the longevity of reusable materials.
We use the following definitions:· Renewable resources: Materials that are continually replenished at a rate equal to or greater than the rate of depletion. This includes plant-basedmaterials from cultivation and animal-based materials from breeding. To fit in a circular economy, the material should be produced from foodwaste or using regenerative production practices.
· Renewable energy: Energy produced from renewable resources, namely solar, wind, hydroelectric power, biomass, or geothermal. Energy
provided by technological waste, such as solid recovered fuels, is not considered. Sales of energy to third parties are not included.
· Products enabling increased durability: Products designed to increase the longevity and durability of other products further down in the value
chain in such a way that encourages longer use than the industry standard and at scale, without compromising circularity at the end of the
product’s functional life.
· Products enabling recycling: Products designed to increase the recycling yield, with regard to quality and quantity.
The measurement of products based on recycled or renewable materials and renewable energy is weighted by applying a factor of 85% to renewablematerials and 15% to renewable energy, according to the average manufacturing cost weight. A similar approach has been defined at the researchand innovation level to monitor the contribution of innovation projects to Solvay’s circularity ambition.

7.2.2.

Management approach

We define circular revenues as revenues generated with products and solutions that meet the following specific requirements:· made of bio-based, recycled-based, and CO2 captured carbon based raw materials, or produced with renewable energy;· designed to increase the lifespan of end-products in such a way that encourages longer use than the industry standard in practice and at scale(e.g., marketing repair rather than replacement, timeless design with durable material choices) and in such a way that does not compromise
circular treatment at the end of functional life; and· innovative with regards to the recycling of materials in closed and open loops, and business models: designed to increase the recycling yield(quantity and quality) of the customers products.
The transformation of Solvay into a circular economy model is embedded in our business strategy. We are working individually and with customers,
suppliers, and partners to identify opportunities where we can leverage our capabilities.
Chemistry, as a science and an industry, is a tremendously relevant and powerful enabler of material transformation and re-use.

Indicators
We monitor our progress in circular sales in accordance with the three principles of Solvay’s circular business solutions, outlined above.

Units

2023

2022

Sales of products contributing to the circular economy (% Group sales)

%

4

5

Sales of products based on recycled or bio-based resources or produced with renewableenergy (% Group sales)

%

3

3

Sales of products increasing longevity (% Group sales)

%

2

1

Sales of products enabling recycling (% Group sales)

%

0

0

These indicators were deployed in 2022. Solvay notably measures final products’ circularity based on their renewable content. As of now, we calculate the renewable
content using the mass of renewable reactants (as shown in our bills of materials) over the mass of the final product. This approach has been reviewed by Ellen MacArthur
Foundation’s Circulytics team and has been applied consistently over the years. We identified limits in accuracy to this approach as the cumulated mass of all reactants
might be higher than the final mass of products for some products (due to evaporation processes, waste, and by-product generation) leading to a potential uncertainty of
the final renewable content. Therefore, for 2024, if we keep the same KPs, we will review the approach in order to bring the accuracy of renewable content measurement to
the highest standard and better reflect our contribution to circularity in our supply chain.

228

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

The Circularity KPI “share in circular revenues” is calculated by adding:· sales of products increasing longevity in the use phase downstream in the value chain;· sales based on recycled or renewable materials (85%) and renewable energy (15%); and· sales enabling recycling at the end-of-life downstream in the value chain.
Potential double counting is avoided by considering the above mentioned order of priority.

7.2.3.

Key achievements

To meet the unmet needs of our customers and to address the transition of our strategic markets in a circular economy, we accelerated ourtransformation.
At the Torrelavega site we used to send bottom ashes to a landfill. Four years ago, we started discussions about byproduct circularity. We stopped
thinking about the ashes as a waste and we started thinking about them as an opportunity for value creation. We needed to create an external
collaboration to develop a second life for our byproducts. We did so with a cement plant partner, with whom we worked closely to sort, adapt,and upgrade our ashes in order to meet their needs and quality specifications. Today it results in a win-win situation that is possible thanks totransparency, flexibility, and agility.
We launched our new SOLSYS® Bio Etac solvent. To advance sustainability in the field of oxygenated solvents, Solvay has developed SOLSYS®
Bio Etac, an ethyl acetate made entirely from renewable sources with the raw material being ethanol derived from sugarcane. The ethanol used issourced in Brazil, where SOLSYS® Bio Etac is produced and is obtained without causing deforestation.
We achieved the SCS Global Services certification for our Recycled Polymers. Solvay, a leader of high-performance and sustainable polyamide
6.6 polymers, continues to drive innovation in its portfolio with the introduction of a new, specialized grade of Rhodianyl, made of 100% pre-consumer
recycled polyamide, which is produced at its Santo Andre plant in Brazil. The product has achieved SCS Recycled Content Certification, reaffirming
Solvay’s commitment to circular economy. The internationally recognized third-party certification body SCS Global Services performed a rigorous
audit to verify the traceability of the Group’s entire manufacturing process, including scrap management and the cutting-edge depolymerization
reaction, which generates the final 100% recycled polymer.
Solvay is investing at its Livorno site, in Italy, to launch the company’s first unit of circular highly dispersible silica (HDS), made with bio-based sodium
silicate derived from rice husk ash. This new breakthrough silicate process provides a circular solution as it gives a second life to rice husk in a local
value chain. Coupled with renewable energy integration at the plant, it will allow Solvay to achieve a 50% reduction in CO2 per ton of silica. This
will make the Livorno site Europe’s best-in-class silica production site in terms of CO2 footprint. Production is expected to start by the end of 2024.

7.3. EU taxonomy activities
The EU taxonomy (2020/852) is a classification system, establishing a list of environmentally sustainable economic activities. It is intended to play
an important role in helping the EU scale up sustainable investment and implement the European Green Deal. The EU taxonomy would provide
companies, investors, and policymakers with appropriate definitions under which economic activities can be considered environmentally sustainable.
In order to be taxonomy-eligible, an economic activity must contribute substantially to at least one of the six environmental objectives – climate
mitigation, climate adaptation, water, circular economy, pollution prevention, and biodiversity – and do no significant harm to the others.
As such, the taxonomy only addresses a limited number of Solvay activities.
In order to be taxonomy-aligned, an economic activity needs first to be eligible as described above, and then fulfill the following criteria:· The economic activity must make a substantial contribution to one or more of the climate and environmental objectives relevant to that activity.
· The activity should do no significant harm to the other remaining objectives.
· The activity should fulfill the minimum social safeguard standards based on OECD and UN guidelines.
Our calculation of the share of 2023 Solvay sales eligible for, or aligned with the EU taxonomy, is based on our best interpretation of the EU
taxonomy texts, including the 2023 version of Technical Annex of the Taxonomy Report.
Figures reported for soda ash correspond to our Soda Ash and Derivatives business, which is a mono-technology business, as described on Solvay’s
website.
Enabling economic activities, as referred to in Article 10(1), point (i), of Regulation (EU) 2020/852, do not substantially contribute to climate change
mitigation on their own. Such activities play a crucial role in the decarbonization of the economy by directly enabling other activities to be carriedout at a low carbon level of environmental performance.
We identified eligible enabling activities using our Sustainable Portfolio Management methodology, taking into account product and application
combinations identified as “climate solutions,” as described above. This enables us to avoid double counting, as double counting is neutralized
in the Sustainable Portfolio Management reporting of solutions for each impact category, as described above. Possible double counting between
transition activities and enabling activities are detailed in the table.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENT

229

Some of our activities, such soda ash for glass in double glazing, may be eligible both as transitional and enabling activities. For calculating thetotal eligible activities and avoiding double counting, the eligible enabling activities related to eligible transitional activities are only counted once.
The basis on which the sales, capital expenditure, and operating expenditure were calculated is explained in the Financial Statements chapter ofthis report, note F1: revenue and segment information.
Capital expenditures and operating expenditures corresponding to enabling activities are not yet available. The eligible share of investments
depends on the estimation of the corresponding eligible share of future sales. The allocation rules chosen mean that we estimate that 1% of sales
required 1% of capital expenditure and 1% of operational expenditure.
We also believe that the share of group capital expenditure dedicated to research and innovation should be considered as eligible as it aims
to improve our product portfolio to become more sustainable. This means that our total eligible capital expenditures is the sum of eligible
capital expenditures from transition activities, the capital expenditures estimated for enabling activities, and the amount dedicated to the capital
expenditures spent on research and innovation. Similarly the total eligible operating expenses are calculated as the sum of eligible operational
expenditure from transition activities, the operational expenditures estimated for enabling activities, and the amount dedicated to the operational
expenditures spent on research and innovation.
Regarding reporting on our aligned activities, our only manufacturing activities eligible as "transition activities" is soda ash, and it is not consideredaligned for their sales as it does not meet the technical criteria. The activities eligible as “enabling activities” were also not considered for theirsales as we cannot demonstrate that they fulfill the “do no significant harm” criteria for water, biodiversity, circular economy, or pollution. However,
Solvay has launched our STAR Factory Program, which aims to fully implement our Solvay One Planet at site level. STAR Factory will progressively
be deployed in all our plants and we believe that it will gradually deliver the required data to qualify our activities as aligned.
About the calculation of the share of capital expenditures aligned with the EU taxonomy, we consider the capital expenditures spent on decreasing
the environmental footprint of our soda ash production plus the amount spent on research and innovation.
Following a similar reasoning, the calculation of operational expenditures aligned with the EU taxonomy mainly considers the share of operational
expenditures spent on research and innovation.
The Group works hard to constantly improve our share of economic activities considered eligible for, or aligned with, the EU taxonomy. We believethat STAR Factory and other major programs will deliver on these objectives in the coming years.

230

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EU TAXONOMY INDICATORS: 2023 SALES

Economic
activities

NACE
codes

Sales

Proportion ofsales

Climate change
mitigation

Climate change
adaptation

Water & marine
resources

Million €in %Yes/No/Insufficient data

Yes/No/Insufficient data

Yes/No/Insufficient data

2,106

35.0%

Yes

Yes

Insufficient data

2,106

35.0%

Yes

Yes

Insufficient data

3.1 Manufacture of renewable C25 C26
energy technologies
C27 C28

166

2.8%

Yes

Yes

Insufficient data

Of which soda ash

38

0.6%

Yes

Yes

Insufficient data

23

0.4%

Yes

Yes

Insufficient data

3.6 Manufacture of renewable
C22.1.1
energy technologies

486

8.1%

Yes

Yes

Insufficient data

Total eligible as enabling
activities

675

11.2%

Yes

Yes

Insufficient data

Sum A.1 + A.2

2,781

46.2%

Yes

Yes

Insufficient data

Sales from non-eligible
activities

3,243

53.8%

Sales

6,024

A. TAXONOMY LISTED ACTIVITIES
A.1 Eligible as transitional activities
Manufacture of soda ash

C20.13

Total eligible as transitional
activities
A.2 Eligible activities as enabling activities

3.4 Manufactures of batteries

C27.2

B. TAXONOMY NON-ELIGIBLE ACTIVITIESEXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

231

Do No Significant Harm Criteria (DNSH)
Circular economy

Pollution

Biodiversity& ecosystems

Minimum
safeguards

Proportion of taxonomy
aligned sales

Yes/No/Insufficient data

Yes/No/Insufficient data

Yes/No/Insufficient data

Yes/No/Insufficient datain %Insufficient data

Insufficient data

Insufficient dataYes

0

Insufficient data

Insufficient data

Insufficient dataYes

0

Insufficient data

Insufficient data

Insufficient dataYes

0

Insufficient data

Insufficient data

Insufficient dataYes

0

Insufficient data

Insufficient data

Insufficient dataYes

0

Insufficient data

Insufficient data

Insufficient dataYes

0

Insufficient data

Insufficient data

Insufficient dataYes

0

Insufficient data

Insufficient data

Insufficient data

Yes

0

232

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EU TAXONOMY INDICATORS: 2023 CAPITAL EXPENDITURES

Economic activities

NACE
codes

Capitalexpenditures

Proportion of ca- Climate change
pital expenditures mitigation

Climate change
adaptation

Million €in %Yes/NoYes/No

245

54.4%

Yes

Yes

Research & Innovation

0.7

0.2%

Total eligible as transitional activities

245

54.4%

Yes

Yes

15

3.4%

Yes

Yes

11

0.8%

Yes

Yes

A. TAXONOMY LISTED ACTIVITIES
A.1 Eligible as transitional activities
Manufacture of soda ash

C20.13

A.2 Eligible activities as enabling activities
3.1 Manufacture of renewable energy technologies

C25 C26
C27 C28

Of which soda ash
3.4 Manufactures of batteries

C27.2

10

0.5%

Yes

Yes

3.6 Manufacture of renewable energy
technologies

C22.1.1

24

10.0%

Yes

Yes

294

68.3%

Capital expenditures from non-eligible activities

156

31.7%

TOTAL

450

100.0%SUM A.1 + A.2
B. TAXONOMY NON-ELIGIBLE ACTIVITIESEXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

233

Water & marine
resources

Circular economy

Pollution

Biodiversity &ecosystems

Minimum
safeguards

Proportion of taxonomy aligned
capital expenditures

Yes/NoYes/NoYes/NoYes/NoYes/Noin %Insufficient data

Insufficient data

Insufficientdata

Insufficient data

Yes

0
0.2%

Insufficient data

Insufficient data

Insufficientdata

Insufficient data

Yes

0.2%
0

Insufficient data

Insufficient data

Insufficientdata

Insufficient dataYes

0

Insufficient data

Insufficient data

Insufficientdata

Insufficient dataYes

0

Insufficient data

Insufficient data

Insufficientdata

Insufficient dataYes

0

Insufficient data

Insufficient data

Insufficientdata

Insufficient data

Yes

0

234

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EU TAXONOMY INDICATORS: 2023 OPERATIONAL EXPENDITURES

Economic
activities

NACE
codes

Operational Proportion of Climate
expenditures operationalchangeexpenditures mitigation

Climatechangeadaptation

Water &
marineresources

CirculareconomyPollution

Million €in %Yes/NoYes/NoYes/NoYes/NoYes/No

606

44.8%

Yes

Yes

Insufficientdata

Insufficientdata

Insufficient
data

7

0.5%

A. TAXONOMY LISTED ACTIVITIES
A.1 Eligible as transitional activities
Manufacture ofsoda ash
Research &Innovation

C20.13

A.2 Eligible activities as enabling activities
3.1 Manufacture of
renewable energy
technologies

46

3.4%

Yes

Yes

Insufficientdata

Insufficientdata

Insufficientdata

Of which soda ash

17

0.8%

Yes

Yes

Insufficientdata

Insufficientdata

Insufficientdata

3.4 Manufacturesof batteries

1

0.5%

Yes

Yes

Insufficientdata

Insufficientdata

Insufficientdata

3.6 Manufacture of
renewable energy
technologies

60

10.0%

Yes

Yes

Insufficientdata

Insufficientdata

Insufficientdata

Sum A.1 + A.2

714

58.6%

B. TAXONOMY NON-ELIGIBLE ACTIVITIESOperational
expendituresfrom non-eligible
activities

639

41.4%

TOTAL

1,353

58.6%

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Biodiversity &ecosystems

235

Minimum
safeguards

Proportion of taxonomy
aligned operational
expenditures

Yes/NoYes/Noin %Insufficient
data

Yes

0

Climate change
mitigation

Climate change
adaptation

Water& marineresources

Circular
Economy

0.5%

Insufficient
data

Yes

0

Insufficient
data

Yes

0

Insufficient
data

Yes

0

Insufficient
data

Yes

0
0.5%

236

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

8. GRI CONTENT INDEX
8.1. Statement of use and GRI 1 used
Solvay has reported in accordance with the GRI Standards for the period January 1, 2023 to December 31, 2023.
GRI 1 used: GRI 1 Foundation 2021.
Applicable GRI Sector Standards: not applicable.
This report has been prepared in accordance with the GRI Standards. The GRI content index service was performed on the English version of thereport.

8.2. GRI 2: general disclosures 2021
THE ORGANIZATION AND ITS REPORTING PRACTICES
Disclosure

Location

2-1 Organizational details

Financial statements: Note F1 Revenue and segment information, page 266
Note F40 List of companies included in the consolidation scope, page 362

2-2 Entities included in the organization’ssustainability reporting

Extra-financial statements: 2.1. Reporting frameworks, page 164
Financial statements: Note F40 List of companies included in the consolidation scope, page 362

2.3 Reporting period, frequency and contact
point

Reporting period: from January 1, 2023 to December 31, 2023
Frequency: yearly and aligned on financial reporting
Contact point: investor.relations@solvay.com
Publication date: May 2024

2.4 Restatements of information

Financial Statements: Consolidated Financial Statements: Main events andchanges in consolidation scope during the year, page 246
Extra-financial statements: 2.1. Reporting frameworks, page 164

2-5 External assurance

Auditor’s report for the extra-financial statements, page 379

Omission

ACTIVITIES AND WORKERS
Disclosure

Location

2-6 Activities, value chain and other business
relationships

Performance: segments overview, page 78

2-7 Employees

Extra-financial statements: 2.1. Reporting frameworks p 164
Extra-financial statements: 6.5. Recruitment, development and retention,
page 220

2-8 Workers who are not employees

Extra-financial statements: 6.5. Recruitment, development and retention,
page 220

OmissionEXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

GOVERNANCE
Disclosure

Location

2-9 Governance structure and composition

Corporate Governance Statement: 4. Board of Directors and Board
Committees, page 91

2-10 Nomination and selection of the highest
governance body

Corporate Governance Statement: 4. Board of Directors and Board
Committees, page 91

2-11 Chair of the highest governance body

Corporate Governance Statement: 4. Board of Directors and Board
Committees, page 91

2-12 Role of the highest governance body inoverseeing the management of impacts

Charter of Corporate Governancehttps://www.solvay.com/en/investors/corporate-governance

2-13 Delegation of responsibility for managing impacts

Corporate Governance Statement, page 84

2-14 Role of the highest governance body insustainability reporting

Declaration by the persons responsible, page 388

2-15 Conflicts of interest

Corporate Governance Statement: 4.1.4 Functioning of the Board of
Directors, page 97
Corporate Governance Statement: Introduction, page 84
Charter of Corporate Governancehttps://www.solvay.com/en/investors/corporate-governance

2-16 Communication of critical concerns

Corporate Governance Statement: 4.1.4 Functioning of the Board of
Directors, page 97

2-17 Collective knowledge of the highest
governance body

Corporate Governance Statement: 4.1.7 Induction and continuous Board
training, page 99

2-18 Evaluation of the performance of thehighest governance body

Corporate Governance Statement: 4.1.6 Evaluation, page 99

2-19 Remuneration policies

Corporate Governance Statement: 6.2 Remuneration report, page 107

2-20 Process to determine remuneration

Corporate Governance Statement: 6.2 Remuneration report, page 107

2-21 Annual total compensation ratio

Corporate Governance Statement: 6.2 Remuneration report, page 107

Omission

STRATEGY, POLICIES AND PRACTICES
Disclosure

Location

2-22 Statement on sustainable development
strategy

Editorial, page 4

2-23 Policy commitments

Extra-financial statements: 3.2. Management of the legal, ethics andregulatory framework, page 176
Extra-financial statements: 5.5. Hazardous materials, page 206

2-24 Embedding policy commitments

Extra-financial statements: 6.2. Critical incident risk management, page 212
Extra-financial statements: 3.1 One Planet, page 175

2-25 Processes to remediate negative impacts Extra-financial statements: 3.3. Health, safety and environment management,
page 182
2-26 Mechanisms for seeking advice andraising concerns

Extra-financial statements: 3.2. Management of the legal, ethics andregulatory framework, page 176

2-27 Compliance with laws and regulations

Extra-financial statements: 3.2. Management of the legal, ethics andregulatory framework, page 176
Extra-financial statements: 6.2. Critical incident risk management, page 212

2-28 Membership associations

Extra-financial statements: 3.6. Membership of associations, page 187

Omission

237

238

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

STAKEHOLDER ENGAGEMENT
Disclosure

Location

Omission

2-29 Approach to stakeholder engagement

Editorial, page 4

2-30 Collective bargaining agreements

Extra-financial statements: 6.3. Labor practices,, page 214

8.3. GRI 3: material topics 2021
Disclosure

Location

Omission

3-1 Process to determine material topics

Extra-financial statements: 2.3. Materiality analysis, page 166

3-2 List of material topics

Extra-financial statements: 2.3. Materiality analysis, page 166

MANAGEMENT OF THE LEGAL, ETHICS AND REGULATORY FRAMEWORK (HIGH MATERIALITY)
SourceDisclosure

Location

GRI 3: Material Topics 2021

3-3 Management of material topics

Extra-financial statements: 3.2. Management of
the legal, ethics and regulatory framework, page176

GRI 205: Anti-corruption 2016

205-1 Operations assessed for risks
related to corruption

Risk management: 2.1 Compliance and businessintegrity, page 144

GRI 205: Anti-corruption 2016205-2 Communication and training
about anti-corruption policies andprocedures

Extra-financial statements: 3.2. Management of
the legal, ethics and regulatory framework, page176

GRI 205: Anti-corruption 2016

205-3 Confirmed incidents of corruption and actions taken

Risk management: Litigation section, page 158

GRI 206: Anti-competitive behavior 2016

206-1 Legal actions for anti-competitive behavior, antitrust, and monopoly
practices

Risk management: Litigation section, page 158

GRI 406: Non-discrimination
2016406-1 Incidents of discrimination andcorrective actions taken

Extra-financial statements: 3.2. Management of
the legal, ethics and regulatory framework, page
176

GRI 412: Human rights assessment 2016412-1 Operations that have been subject to human rights reviews or impact
assessments

Extra-financial statements: 3.2. Management of
the legal, ethics and regulatory framework, page
176

GRI 412: Human rights assessment 2016412-2 Employee training on humanrights policies or procedures

Extra-financial statements: 3.2. Management of
the legal, ethics and regulatory framework, page
176

GRI 415: Public policy 2016415-1 Political contributions

Extra-financial statements: 3.2. Management of
the legal, ethics and regulatory framework, page
176

GRI 419: Socioeconomic Compliance 2016419-1 Non-compliance with laws andregulations in the social and economic
area

Risk management: Litigation section, page 158

Extra-financial statements: 3.2. Management of
the legal, ethics and regulatory framework, page
176

Omission

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENTGREENHOUSE GAS EMISSIONS (PRIORITY)
SourceDisclosure

Location

GRI 3: Material Topics 2021

3-3 Management of material topics

Extra-financial statements: 2.3. Materiality analysis, page 166

GRI 305: Emissions 2016305-1 Direct (Scope 1) GHG emissions

Extra-financial statements: 4.2. Greenhouse gas
emissions, page 191

GRI 305: Emissions 2016305-2 Energy indirect (Scope 2) GHG
emissions

Extra-financial statements: 4.2. Greenhouse gas
emissions, page 191

GRI 305: Emissions 2016305-3 Other indirect (Scope 3) GHG
emissions

Extra-financial statements: 4.2. Greenhouse gas
emissions, page 191

GRI 305: Emissions 2016305-4 GHG emissions intensity

Extra-financial statements: 4.2. Greenhouse gas
emissions, page 191

GRI 305: Emissions 2016305-5 Reduction of GHG emissions

Extra-financial statements: 4.2. Greenhouse gas
emissions, page 191

SourceDisclosure

Location

GRI 3: Material Topics 2021

3-3 Management of material topics

Extra-financial statements: 2.3. Materiality
analysis, page 166

GRI 302: Energy 2016

302-1 Energy consumption within theorganization

Extra-financial statements: 4.3. Energy, page 196

GRI 302: Energy 2016302-2 Energy consumption outside of
the organization

Extra-financial statements: 4.3. Energy, page 196

GRI 302: Energy 2016302-3 Energy intensity

Extra-financial statements: 4.3. Energy, page 196

GRI 302: Energy 2016

302-4 Reduction of energy
consumption

Extra-financial statements: 4.3. Energy, page 196

SourceDisclosure

Location

GRI 3: Material Topics 2021

3-3 Management of material topics

Extra-financial statements: 2.3. Materiality
analysis, page 166

GRI 304: Biodiversity 2016

304-1 Operational sites owned, leased, Extra-financial statements: 5.4. Biodiversity, page203
managed in, or adjacentto, protected areas and areas of highbiodiversity value outside
protected areas

GRI 304: Biodiversity 2016

304-2 Significant impacts of activities,
products and services
on biodiversity

Extra-financial statements: 5.4. Biodiversity, page203

GRI 304: Biodiversity 2016

304-3 Habitats protected or restored

Extra-financial statements: 5.4. Biodiversity, page203

GRI 304: Biodiversity 2016

304-4 IUCN Red List species andnational conservation list
species with habitats in areas affectedby operations

Extra-financial statements: 5.4. Biodiversity, page
203

Omission

ENERGY (PRIORITY)
Omission

BIODIVERSITY (PRIORITY)
Omission

239

240

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

PRODUCT DESIGN & LIFECYCLE MANAGEMENT (PRIORITY)
SourceDisclosure

Location

GRI 3: Material Topics 2021

3-3 Management of material topics

Extra-financial statements: 2.3. Materiality
analysis, page 166

GRI 416: Customer health andsafety 2016416-1 Assessment of the health andsafety impacts of product and service
categories

Extra-financial statements: 7.1. Product designand life cycle management, page 225
Extra-financial statements: 5.2. Waste, page 201
Extra-financial statements: 5.5. Hazardous
materials, page 206

GRI 416: Customer health andsafety 2016416-2 Incidents of non-complianceconcerning the health and safety
impacts of products and services

Risk management: 2.5 Environmental impacts
and controversies, page 152

Omission

AIR QUALITY (HIGH MATERIALITY)
SourceDisclosure

Location

GRI 3: Material Topics 2021

3-3 Management of material topics

Extra-financial statements: 2.3. Materiality
analysis, page 166

GRI 305: Emissions 2016

Disclosure 305-6 Emissions of ozonedepleting substances (ODS)

Extra-financial statements: 5.3. Air quality,
page 201

GRI 305: Emissions 2016305-7 Nitrogen oxides (NOx), sulfur
oxides (SOx) and other significant air
emissions

Extra-financial statements: 5.3. Air quality,
page 201

Omission

WATER AND WASTEWATER (PRIORITY)
SourceDisclosure

Location

GRI 3: Material Topics 2021

3-3 Management of material topics

Extra-financial statements: 2.3. Materiality
analysis, page 166

GRI 303: Water and effluents2018

303-1 Interactions with water as ashared resource

Extra-financial statements: 5.1. Water andwastewater, page 199

GRI 303: Water and effluents2018

303-2 Management of water discharge- Extra-financial statements: 5.1. Water andrelated impacts
wastewater, page 199

GRI 303: Water and effluents2018

303-3 Water withdrawal

Extra-financial statements: 5.1. Water andwastewater, page 199

GRI 303: Water and effluents2018

303-4 Water discharge

Extra-financial statements: 5.1. Water andwastewater, page 199

GRI 303: Water and effluents2018

303-5 Water consumption

Extra-financial statements: 5.1. Water andwastewater, page 199

Omission

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENTWASTE (PRIORITY)
SourceDisclosure

Location

GRI 3: Material Topics 2021

3-3 Management of material topics

Extra-financial statements: 2.3. Materiality
analysis, page 166

GRI 306: Waste 2020306-1 Waste generation and significant Extra-financial statements: 5.2. Waste, page 201
waste-related impacts

GRI 306: Waste 2020306-2 Management of significant
waste-related impacts

Extra-financial statements: 5.2. Waste, page 201

GRI 306: Waste 2020306-3 Waste generated

Extra-financial statements: 5.2. Waste, page 201

GRI 306: Waste 2020

306-4 Waste diverted from disposal

Extra-financial statements: 5.2. Waste, page 201

GRI 306: Waste 2020306-5 Waste directed to disposal

Extra-financial statements: 5.2. Waste, page 201

Omission

EMPLOYEE HEALTH AND SAFETY (PRIORITY)
SourceDisclosure

Location

GRI 3: Material Topics 2021

3-3 Management of material topics

Extra-financial statements: 2.3. Materiality
analysis, page 166

GRI 403: Occupational healthand safety 2018403-1 Occupational health and safety
management system

Extra-financial statements: 6.1. Employee healthand safety, page 208

GRI 403: Occupational healthand safety 2018403-2 Hazard identification, risk
assessment and incident investigation

Extra-financial statements: 6.1. Employee healthand safety, page 208

GRI 403: Occupational healthand safety 2018403-3 Occupational health services

Extra-financial statements: 6.1. Employee healthand safety, page 208

GRI 403: Occupational healthand safety 2018403-4 Worker participation,
consultation and communication on
occupational health and safety

Extra-financial statements: 6.1. Employee healthand safety, page 208
Extra-financial statements: 6.3. Labor practices,page 214

GRI 403: Occupational healthand safety 2018403-5 Worker training on occupational
health and safety

Extra-financial statements: 6.1. Employee healthand safety, page 208

GRI 403: Occupational healthand safety 2018403-6 Promotion of worker health

Extra-financial statements: 6.1. Employee healthand safety, page 208

GRI 403: Occupational healthand safety 2018403-7 Prevention and mitigation ofExtra-financial statements: 6.1. Employee healthoccupational health and safety impacts and safety, page 208
directly linked by business relationships

GRI 403: Occupational healthand safety 2018403-8 Workers covered by an
occupational health and safety
management system

Extra-financial statements: 6.1. Employee healthand safety, page 208

GRI 403: Occupational healthand safety 2018403-9 Work-related injuries

Extra-financial statements: 6.1. Employee healthand safety, page 208

GRI 403: Occupational healthand safety 2018403-10 Work-related ill health

Extra-financial statements: 6.1. Employee healthand safety, page 208

Omission

241

242

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EMPLOYEE ENGAGEMENT AND WELL-BEING (HIGH MATERIALITY)
SourceDisclosure

Location

GRI 3: Material Topics 2021

3-3 Management of material topics

Extra-financial statements: 2.3. Materiality
analysis, page 166

GRI 401: Employment 2016

401-2 Benefits provided to full-time
employees that are not provided totemporary or part-time employees

Extra-financial statements: 6.5. Labor Practices,page 220
Extra-financial statements: 6.5. Recruitment,
development and retention, page 220

GRI 407: Freedom of association 407-1 Operations and suppliersand collective bargaining 2016
in which the right to freedom of
association and collective bargaining
may be at risk

Extra-financial statements: 6.3. Labor practices,page 214

Omission

DIVERSITY AND INCLUSION (PRIORITY)
SourceDisclosure

Location

GRI 3: Material Topics 2021

3-3 Management of material topics

Extra-financial statements: 2.3. Materiality
analysis, page 166

GRI 405: Diversity and equal
opportunity 2016405-1 Diversity of governance bodies
and employees

Extra-financial statements: 6.4. Diversity andinclusion, page 217

GRI 405: Diversity and equal
opportunity 2016405-2 Ratio of basic salary andremuneration of women to men

Extra-financial statements: 6.4. Diversity andinclusion, page 217

Omission

CORPORATE CITIZENSHIP (HIGH MATERIALITY)
SourceDisclosure

Location

GRI 3: Material Topics 2021

3-3 Management of material topics

Extra-financial statements: 2.3. Materiality
analysis, page 166

GRI 413: Local communities
2016413-1 Operations with local community Extra-financial statements: 6.6. Corporate
engagement, impact assessments and citizenship, page 223
development programs

GRI 413: Local communities
2016413-2 Operations with significant actual Risk management: 2.5 Environmental impacts
and potential negative impacts on local and controversies, page 152
communities

Omission

HAZARDOUS MATERIALS (HIGH MATERIALITY)
SourceDisclosure

Location

GRI 3: Material Topics 2021

3-3 Management of material topics

Extra-financial statements: 2.3. Materiality
analysis, page 166

GRI 403: Occupational healthand safety 2018403-7 Prevention and mitigation ofExtra-financial statements: 5.5. Hazardous
occupational health and safety impacts materials, page 206
directly linked by business relationships
Extra-financial statements: 6.1. Employee healthand safety, page 208

SolvaySafer alternatives for marketed
products

Omission

Extra-financial statements: 5.5. Hazardous
materials, page 206

CRITICAL INCIDENT RISK MANAGEMENT (HIGH MATERIALITY)
SourceDisclosure

Location

GRI 3: Material Topics 2021

3-3 Management of material topics

Extra-financial statements: 2.3. Materiality
analysis, page 166

GRI 307: Environmental
Compliance 2016

307-1 Non-compliance withenvironmental laws and regulations

Extra-financial statements: 6.2. Critical incident
risk management, page 212

Omission

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EXTRA-FINANCIAL STATEMENT

Moderate materiality aspects also included in this report
RECRUITMENT, DEVELOPMENT AND RETENTION (MODERATE MATERIALITY)
SourceDisclosure

Location

GRI 3: Material Topics 2021

3-3 Management of material topics

Extra-financial statements: 2.3. Materiality
analysis, page 166

GRI 401: Employment 2016

401-1 New employee hires andemployee turnover

Extra-financial statements: 6.4. Recruitment,
development and retention, page 238

GRI 401: Employment 2016

401-2 Benefits provided to full-time
employees that are not provided totemporary or part- time employees

Extra-financial statements: 6.5. Recruitment,
development and retention, page 220

GRI 404: Training and education
2016404-1 Average hours of training peryear per employee

Extra-financial statements: 6.5. Recruitment,
development and retention, page 220

GRI 404: Training and education
2016404-2 Programs for upgrading
employee skills and transition
assistance programs

Extra-financial statements: 6.5. Recruitment,
development and retention, page 220

GRI 404: Training and education
2016404-3 Percentage of employees
receiving regular performance andcareer development reviews

Extra-financial statements: 6.5. Recruitment,
development and retention, page 220

Omission

243

244

EXTRA-FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

08

245

FINANCIALSTATEMENT246	1. Consolidated financial
statements
250
1.1. Consolidated income statement251	1.2. Consolidated statement ofcomprehensive income
252	1.3. Consolidated statement of cash flows
253	1.4. Consolidated cash flows fromdiscontinued operations
254	1.5. Consolidated statement of financial
position258	2. Notes to the consolidated
financial statements
260
2.1. consolidation scope
266	Note F1 : revenue and segment information
274 	Note F2 : consolidated income statement
by nature275
Note F4 : other operating gains and losses
275	Note F5 : results from portfolio
management and major restructurings,
legacy remediation and major litigations
276
Note F6 : net financial charges
277	Note F7 : income taxes in the income
statement and the statement of financial
position
278	Note F8 : discontinued operations andpartial demerger
279
Note F9 : earnings per share288	note F10 : consolidated statement ofcomprehensive income
290	Note f11 : depreciation, amortization andimpairments
290	Note F12 : other non-operating and noncash items
290	Note F13 : income taxes in the statementof cash flows
291
Note F14 : changes in working capital
291	Note F15 : additions, reversals and use ofprovisions

292	Note F16 : cash flows from investing
activities – acquisition/disposal of assets
and investments
293	Note F17 : other cash flows from financing
activities
293
Note F18 : intangible assets
296	Note F19 : goodwill and businesscombinations
298
Note N20 : property, plant and equipment
301	Note F21 : right-of-use assets and leaseobligations
304	Note F22 : investments in associates andjoint ventures
308
Note F23 : impairment
310
Note F24 : inventories
311
Note F25 : other receivables (current)
311
Note F26 : assets held for sale
312
Note F27 : equity
313
Note F28 : non-controlling interests
314
Note F29 : share-based payments
321
Note F30 : employee benefits
331
Note F31 : provisions
334	Note F32 : financial instruments andfinancial risk management
355
Note F33 : net indebtedness358
Note F34 : other liabilities (current)358	Note F35 : commitments to acquire
property, plant and equipment andintangible assets
359	Note F36 : contingent assets, liabilities andfinancial guarantees
360
Note F37 : related parties361	Note F38 : dividends proposed for
distribution
361
Note F39 : events after the reporting period362	Note F40 : list of companies included in the
consolidation scope

368	3. Summary financial
statements of Solvay SA/NV

246

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Financial statements
1. CONSOLIDATED FINANCIAL STATEMENTS
Solvay SA/NV (the “Company” or “Solvay”) is a public limited liability company governed by Belgian law and listed on Euronext Brussels andEuronext Paris. The principal activities of the Company, its subsidiaries, joint operations, joint ventures and associates (jointly the “Group”) aredescribed in note F1 Revenue and Segment Information.
The Solvay Group operates in 45 industrial sites and 6 research centers and over 40 countries, employs approximately 9,000 employees anddelivered net sales of €4.9 billion in 2023. Solvay SA/NV is the Solvay Group’s ultimate parent with its registered office located at Rue Ransbeek 310,
B-1120 Brussels, Belgium.
On March 12, 2024, the Board of Directors authorized the consolidated financial statements for issuance.

MAIN EVENTS AND CHANGES IN THE CONSOLIDATION SCOPE
Partial Demerger of the Specialty Businesses
On March 15, 2022, the Group announced that it was reviewing plans to separate into two independent, publicly traded companies:· “EssentialCo”, which comprised the leading mono-technology businesses in the Group’s Chemicals segment and the Special Chem business.
Following the Partial Demerger (as defined below), the Group consists of EssentialCo.
· “SpecialtyCo” (now renamed to “Syensqo” or the “Syensqo Group”), which comprises the Group's Materials segment, and the majority of theGroup’s Solutions segment: Novecare, Technology Solutions, Aroma Performance, and Oil and Gas (together the “Specialty Businesses”).
The separation was effected by means of a partial demerger (“scission partielle”) of Solvay SA/NV, under Belgian law, whereby the shares and otherinterests the Company held in the legal entities operating the so-called “Specialty Businesses,” its rights and obligations under the agreements
entered into with those legal entities, as well as certain other assets and liabilities were contributed under a universal succession regime (“transmission
à titre universel”) to Syensqo SA/NV (the “Partial Demerger”).
The Partial Demerger was approved by Solvay SA/NV’s shareholders at the extraordinary general meeting held on December 8, 2023. The Partial
Demerger became effective on December 9, 2023, at 00:00 a.m. CET. In connection with the Partial Demerger, Syensqo became a public company,
independent from Solvay, with its ordinary shares trading on the regulated markets of Euronext in Brussels and Paris starting on December 11, 2023.
As a consequence, the Group presents the Specialty Businesses as discontinued operations:· In the consolidated income statement for the periods prior to, and until the effectiveness of, the Partial Demerger – that is the previous year’s
financial performance figures (the comparatives) have been restated. For 2023 financial year, the discontinued operations are included for theperiod until December 8, 2023.
· In the consolidated statement of financial position, the assets and liabilities related to the Specialty Businesses have been derecognized from theconsolidated statements as a part of the deconsolidation of the Specialty Businesses from the Group; the amounts in the consolidated statementof financial position of the previous year are presented in line with the previous method of presentation and are not restated in accordance withIFRS 5.
· In the consolidated statement of cash flows, the cash-flows were not restated and present both continuing and discontinued operations in the
primary statement. For 2023 financial year, the cash flows from discontinued operations are included for the period until December 8, 2023,
However, below the statement, Solvay separately presented the consolidated cash flows from discontinued operations.
Further information on the accounting treatment of Partial Demerger is provided in note F8.

The Separation Agreement
Solvay SA/NV and Syensqo SA/NV entered into a Separation Agreement on December 4, 2023, and effective from the completion of thePartial Demerger, to govern certain practical aspects of the separation of the two groups, as well as the allocation of certain liabilities, including
environmental liabilities. The Separation Agreement will be effective until the thirtieth anniversary of December 9, 2023, except with respect toclaims relating to environmental liabilities, which can be made until 12 months after the relevant statute of limitations expires. The Separation
Agreement may not be terminated early without written consent of each party.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT

247

The Separation Agreement governs certain aspects of the separation of Syensqo from the Solvay Group, including, among other arrangements,
those relating to:· (i) the settlement and termination of certain intercompany balances and arrangements – see note F37 Related parties, note F32 Financial
instruments;· (ii) the substitution, removal or release of legal entities that are part of the Solvay Group or the Syensqo Group, as applicable, in respect of certain
third-party credit or other support obligations, as well as the provision of counter guarantees – see note F32 Financial instruments and note F36
Contingent liabilities;· (iii) the allocation of certain fees, costs and expenses incurred in connection with the Partial Demerger – see note F8;· (iv) the transfer to the other party of any assets (identified within 24 months of the completion of the Partial Demerger) allocated erroneously to
the Syensqo Group or the Solvay Group;· (v) the transfer of all rights and obligations to Syensqo in relation to certain transferred employees’ supplementary pension schemes in Belgium– see note F30 Employee benefits.
The Separation Agreement contains provisions to allocate to the Solvay Group or the Syensqo Group environmental liabilities for certain operating,closed or divested sites, including sites for which provisions have been established in the Solvay Group’s consolidated financial statements, andcross-indemnity obligations applicable where a party incurs claims, liabilities or expenses for sites allocated to the other party in the Separation
Agreement.
Under the cross-indemnity provisions, each of the Solvay Group, on the one hand, and the Syensqo Group, on the other hand, have agreed toindemnify the other party for certain environmental liabilities allocated to the other party. The Separation Agreement includes provisions regarding
the management of environmental claims, remediation obligations and related actions. The Separation Agreement also provides that claims will
be deemed to have been made, automatically, under the cross-indemnity provisions for specifically allocated environmental liabilities that are thesubject of existing provisions as set forth in the Solvay Group consolidated financial statements as of and for the six-month period ended June 30,
2023. For all other environmental liabilities that are subject to the cross-indemnity provisions, claims may be submitted for up to 12 months following
the expiry of the relevant statute of limitations. The Separation Agreement also contains customary provisions aimed at avoiding double recoveries.
See note F31 Provisions for further details on provisions.

U.S. Tax Matters Agreement
The rules for determining whether a distribution such as the Partial Demerger and the internal separation of the U.S. Specialty Businesses and the
U.S. Essential Businesses (the “U.S. Spin-Off”) qualify for tax-free treatment for U.S. federal income tax purposes are complex and depend on all the
relevant facts and circumstances. Solvay intends for the Partial Demerger and the U.S. Spin-Off to each qualify as a tax-free reorganization under
Sections 368(a)(1)(D) and 355 of the U.S. Internal Revenue Code of 1986, as amended (the “U.S. IRC”). Solvay has received a private letter ruling fromthe U.S. Internal Revenue Service (the “IRS”) confirming such qualification (except with respect to certain requirements under Section 355 of the U.S.
IRC on which the IRS does not rule). Solvay also received a tax opinion from US tax counsel addressing those matters upon which the IRS would not
rule, and relying on the IRS’ ruling as to matters covered by the ruling.
In connection with the U.S. Spin-Off and the Partial Demerger, Solvay and Syensqo entered into a U.S. Tax Matters Agreement (the “U.S. TMA”)
intended to (among other things) preserve the tax-free treatment of the Partial Demerger and the U.S. Spin-Off for U.S. federal income tax purposes.
Under the U.S. TMA, Solvay and Syensqo will generally be required to indemnify the other for any U.S. taxes and certain related losses resulting
from (or relating to) the failure of the U.S. Spin-Off and the Partial Demerger (and certain associated transactions) to qualify for their intended U.S.
tax treatment, where such taxes or losses are attributable to (1) untrue representations and breaches of covenants made in connection with the U.S.
Spin-Off, the Partial Demerger or the U.S. TMA (including in the IRS ruling and tax opinion described above), (2) the application of certain provisionsof U.S. federal income tax law to the U.S. Spin-Off or the Partial Demerger (for example, in connection with a change of control of either party) or(3) other actions or omissions within the party’s control which give rise to U.S. taxes (or related losses) in connection with the U.S. Spin-Off and thePartial Demerger.
Under the U.S. TMA, Solvay and Syensqo are prohibited from taking actions that are reasonably expected to cause the Partial Demerger or U.S.
Spin-Off (or certain associated transactions) to fail to qualify for their intended U.S. tax treatment, or that could jeopardize the conclusions of, orthat are inconsistent with, the IRS ruling or the tax opinion discussed above. Additionally, the parties are generally prohibited (subject to certain
exceptions in the U.S. TMA), for the two-year period following completion of the Partial Demerger, from engaging in certain acquisitions, mergers,
liquidations, sales, and redemption transactions with respect to their respective stock and assets that could jeopardize the tax-free status of thePartial Demerger or the U.S. Spin-Off for U.S. federal income tax purposes. Neither Solvay’s nor Syensqo’s obligations under the U.S. TMA are
limited in amount or subject to any cap.
As of December 31, 2023, Solvay was not aware of any breach or alleged breach by it of its obligations under the U.S. TMA, and had not received
any notice from Syensqo relating to a breach or alleged breach thereof.

248

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

The Transition Services Agreement
Solvay SA/NV and Syensqo SA/NV entered into a transition services agreement (the “TSA”), effective from the completion of the Partial Demerger
for a non-renewable term of 24 months, whereby the Solvay Group and the Syensqo Group will, to the extent that certain business functions andcorporate functions have not been separated prior to the completion of the Partial Demerger, each provide to the other (or the other’s respective
subsidiaries) various services and support on an interim transitional basis. In particular, given that the Syensqo Group will not have certain internal
corporate functions fully in place upon completion of the Partial Demerger (such as finance, legal, tax, human resources, payroll, information
technology and other support services), the Solvay Group will provide support with such matters under the terms of the TSA. Upon termination of
the TSA, the Syensqo Group will bear wind-down charges covering certain restructuring costs incurred by the Solvay Group.
From the completion of the Partial Demerger and going forward, the fees payable by the Syensqo Group to the Solvay Group have been determinedinternally using a limited mark-up, in line with the Solvay Group’s practice for internal servicing, and have not been the subject of independent bids.
It is expected that, based on the assumed scope of services and related underlying cost structure, the annual aggregate fees for the services
provided by the Solvay Group under the TSA will amount to between €150 million and €200 million.
See note F37 Related Parties for further details on related party transactions.

Restructuring provision
In the context of the Group’s plan to separate into two independent publicly traded companies, new restructuring initiatives were launched in
2023. These initiatives lead to the net suppression of approximately 224 roles at the end of 2023. As a consequence, a restructuring provision of€83 million was recognized in 2023, prior to the Partial Demerger date out of which €67 million for continuing operations.

Group portfolio management
RusVinyl equity investment
RusVinyl is a former Russian joint venture in chlorovinyls in which Solvay held a 50% equity interest, together with Sibur who held the remaining 50%
equity interest. On March 24, 2023, the Group announced the completion of the sale of its 50% stake in RusVinyl, to its joint venture partner, Sibur.
At the time of closing, the Group received €432 million in cash proceeds in Belgium, which have been reported as cash flow from investing activities
in Q1 2023. A capital loss of €176 million has been recognized in Q1 2023, mainly reflecting recycling of the historical currency translation balances
to the consolidated income statement.

Liability management
Prior to the Partial Demerger, Solvay undertook various liability management exercises in respect of certain of its outstanding debt securities. The
purpose of the liability management exercises was to repurchase or redeem certain debt securities, and to transfer liability for the remaining relevant
debt securities or related guarantees to the Syensqo Group upon the Partial Demerger becoming effective. The liability management exercises
were also intended to amend certain contractual provisions in certain of the debt securities to facilitate the implementation of the Partial Demerger.
On September 4 and 5, 2023, Solvay announced the results of liability management transactions relating to certain senior and hybrid bonds
denominated in euros. The transactions included:· a request for consent of bondholders to the substitution, effective upon completion of the Partial Demerger, of Syensqo SA/NV for Solvay SA/
NV as issuer of (i) the €500,000,000 Undated Deeply Subordinated Fixed to Reset Rate Perp-NC5.5 Bonds with first call date on December 2, 2025
(ISIN: BE6324000858) (the “2025 Hybrid Bonds”), and (ii) the €500,000,000 2.750% Fixed Rate Bonds due December 2, 2027 (ISIN: BE6282460615)(the “2027 Bonds”).
· a tender offer relating to the €500,000,000 Undated Deeply Subordinated Fixed to Reset Rate Bonds with first optional redemption date ofJune 3, 2024 (ISIN: XS1323897725) (the “2024 Hybrid Bonds”) issued by Solvay Finance S.A. and irrevocably guaranteed on a subordinated basis
by Solvay (the “Tender Offer”).

The 2025 Hybrid Bonds, the 2027 Bonds and the 2024 Hybrid Bonds
At the meeting in respect of the 2025 Hybrid Bonds, the necessary quorum was achieved, the relevant extraordinary resolution was passed and therelevant condition was satisfied. As a result, Syensqo SA/NV was substituted for Solvay SA/NV as issuer of the 2025 Hybrid Bonds, effective uponcompletion of the Partial Demerger, and subject to the satisfaction or waiver of certain conditions set out in the consent solicitation notice.
At the meeting of the holders of the 2027 Bonds, the necessary quorum was achieved, the relevant extraordinary resolution was passed andthe relevant condition was satisfied. As a result, Syensqo SA/NV was substituted for Solvay SA/NV as issuer of the 2027 Bonds, effective uponcompletion of the Partial Demerger, and subject to the satisfaction or waiver of certain conditions set out in the consent solicitation notice.
On September 8, 2023, Solvay Finance S.A. accepted all validly tendered 2024 Hybrid Bonds pursuant to the Tender Offer for purchase in cash inan aggregate principal amount of €452,613,000 (representing approximately 90.52% in aggregate nominal amount of the outstanding 2024 Hybrid
Bonds). Because it has purchased more than 90% of the initial aggregate principal amount of the 2024 Hybrid Bonds, Solvay Finance S.A. had theoption, pursuant to the terms and conditions of the 2024 Hybrid Bonds, at any time, to redeem all of the remaining outstanding 2024 Hybrid Bonds
that were not validly tendered for purchase pursuant to the Tender Offer at their principal amount together with any accrued and unpaid interest(including any deferred interest) up to the redemption date. Solvay Finance S.A. exercised this option on September 6, 2023, and redeemed therelevant 2024 Hybrid Bonds on September 13, 2023, in cash and for an aggregate principal amount of €47,387,000.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT

249

The redemption of the 2024 Hybrid Bonds was financed with proceeds drawn under Solvay’s bridge facility (€520 million). The corresponding
obligations remained at Solvay and were not transferred to Syensqo SA/NV at the date of the Partial Demerger.

The 2029 Bonds
Solvay SA/NV has exercised its issuer make-whole call under the terms and conditions of the €600,000,000 0.500% Fixed Rate Bonds due
September 6, 2029 (ISIN: BE6315847804) (the “2029 Bonds”). The redemption of the 2029 Bonds was funded with a new bridge facility. The
additional funding cost for the anticipated long-term refinancing of the 2029 Bonds is estimated at approximately €20 million per year (after tax).
The redemption notice was delivered on September 7, 2023, announcing the redemption date of October 9, 2023, in accordance with the terms
and conditions of the 2029 Bonds. The outstanding amount of the 2029 Bonds (€597 million) were settled on October 9, 2023, with the proceedsfrom the Group’s bridge facility. The obligations under the bridge facility corresponding to the amount used for the redemption of the 2029 Bonds
were transferred to Syensqo SA/NV upon completion of the Partial Demerger.

USD 2025 Bonds
Solvay SA/NV announced on September 27, 2023, that it intends to exercise its issuer make-whole call option under the terms of the indenture
governing the 4.450% Senior Notes due 2025 issued by Solvay Finance (America), LLC for an amount outstanding of USD$800,000,000 andguaranteed by Solvay SA/NV(CUSIP: 834423 AB1 / U8344P AB5) (the “USD 2025 Bonds”). The redemption took place on November 15, 2023, for an
amount of €753 million and was funded with drawdowns on Solvay’s bridge facility. The obligations under the bridge facility corresponding to theamount used for the redemption of the USD 2025 Bonds were transferred to Syensqo SA/NV upon completion of the Partial Demerger.

Cytec 2025 Bonds
The 3.95% Senior Notes due 2025 issued by Cytec Industries Inc. (CUSIP: 232820 AK6) (the “Cytec 2025 Bonds”) were transferred to the Syensqo
Group upon completion of the Partial Demerger, as Cytec Industries Inc. is now an indirect subsidiary of Syensqo SA/NV. The Cytec 2025 Bonds
are outstanding for an amount of USD$163.5 million. A counter guarantee was issued by Syensqo SA/NV in favor of Solvay SA/NV as Solvay SA/NV
remained the original guarantor under the Cytec 2025 Bonds.

Redemption of €500 million Undated Deeply Subordinated Fixed to Reset Rate Perp-NC10 Bonds
Solvay SA/NV announced on October 5, 2023, that its subsidiary Solvay Finance SA will redeem its €500 million Undated Deeply Subordinated Fixed
to Reset Rate Perp-NC10 Bonds irrevocably guaranteed on a subordinated basis by Solvay SA/NV (ISIN: XS0992293901) on the first call date (being
November 12, 2023). This perpetual deeply subordinated bond, bearing an annual interest rate of 5.425%, was treated as equity under IFRS rules.
As November 12, 2023, falls on a non-business day, repayment, in accordance with the terms and conditions, occurred on November 13, 2023. The
redemption amount equaled the principal amount (€500 million) plus interest accrued and unpaid up to, but excluding, the redemption date (€27
million). The redemption was financed with proceeds drawn under Solvay’s bridge facility and Solvay’s obligations in respect of the amount of suchdrawings were not transferred to Syensqo SA/NV at the time of the Partial Demerger.

Redemption of €300 million Undated Deeply Subordinated Fixed to Reset Rate Perp-NC5.25 Bonds
Solvay SA/NV announced on October 20, 2023, that it will redeem its €300 million Undated Deeply Subordinated Fixed to Reset Rate Perp-NC5.25
Bonds (ISIN: BE6309987400) on December 4, 2023, as per its issuer general call option. This perpetual deeply subordinated bond, bearing an annualinterest rate of 4.25%, was treated as equity under IFRS rules. The redemption amount equaled the principal amount (€300 million) plus interest
accrued and unpaid up to, but excluding, the redemption date (€9.7 million). The redemption was financed with proceeds drawn under Solvay’s
bridge facility and Solvay’s obligations in respect of the amount of such drawings were not transferred to Syensqo SA/NV at the time of the Partial
Demerger.

250

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

1.1. Consolidated income statement
The 2022 amounts are restatedIn €million

Notes

2023

2022

Sales

(F1)

6,024

7,979

— of which revenue from non-core activities

(F3)

1,145

2,439

— of which net sales

4,880

5,539

Cost of goods sold

-4,642-6,554Gross margin

1,382

1,425

Commercial costs

-100

-94

Administrative costs

-426

-471

Research and development costs

-47

-46

Other operating gains and (losses)

(F4)

15

323

Earnings from associates and joint ventures

(F22)

53

153

Results from portfolio management and major restructuring

(F5)

-550

-68

Results from legacy remediation and major litigations

(F5)

-50

-101

278

1,121

EBIT
Cost of borrowings

(F6)

-71

-54

Interest on loans and short term deposits

(F6)

36

16

Other gains and (losses) on net indebtedness

(F6)

-6

27

Cost of discounting provisions

(F6)

-62

22

4

0

180

1,132

-208

-228

-28

904

2,132

1,030

2,105

1,934

— Solvay share – continuing operations

-37

890

— Solvay share – discontinued operations

2,130

1,015

— non-controlling interests – continuing operations

9

14— non-controlling interests – discontinued operations

2

14

Basic earnings per share from continuing operations (€)

-0.36

8.58

Basic earnings per share from discontinued operations (€)

20.45

9.79

20.09

18.37

Diluted earnings per share from continuing operations (€)

-0.35

8.55

Diluted earnings per share from discontinued operations (€)

20.20

9.75

19.85

18.30

Result from equity instruments measured at fair value
Profit/(loss) for the year before taxes
Income taxes(F7)

Profit/(loss) for the year from continuing operations
Profit for the year from discontinued operations(F8)

Profit/(loss) for the year
attributable to:

Basic earnings per share (€)

Diluted earnings per share (€)

(F9)

(F9)

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT

251

1.2. Consolidated statement of comprehensive income
The 2022 amounts are restatedIn €million

NotesProfit/(loss) for the year

2023

2022

2,105

1,934

Other comprehensive income
Gains and losses on hedging instruments in a cash flow hedge

(F10)

-228

80

Currency translation differences – Subsidiaries and joint operations

(F10)

-138

284

Share of other comprehensive income of associates and joint ventures

(F10)

202

21

-164

384

Recyclable components
Gains and losses on equity instruments measured at fair value through other comprehensive
income

(F10)

0

-25

Remeasurements of the net defined benefit liability

(F10)

-30

155

Share of other comprehensive income of associates and joint ventures

(F10)

0

0

-30

130

Non-recyclable components
Income tax relating to recyclable and non-recyclable components

(F10)

2

-67

Other comprehensive income/(loss), net of related tax effects

(F10)

-192

447

1,913

2,382

1,902

2,351

11

30

Comprehensive income/(loss) for the year
attributable to:— Solvay share— non-controlling interests

252

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

1.3. Consolidated statement of cash flows
The amounts below include both continuing and discontinued operations – the comparative figures for 2022 are not restated
The consolidated cash-flows from discontinued operations for both years are disclosed below this statement.
In €million

NotesProfit/(loss) for the year

2023

2022

2,105

1,934

Adjustments to profit/(loss) for the year
— Depreciation, amortization and impairments

(F11)

994

923

— Earnings from associates and joint ventures

(F22)

-71

-171

— Other non-operating and non-cash items(F12)-1,48143— Additions and reversal of employee benefits and other provisions

(F15)

644

336

178

69

— Income tax expense/income

(F13)

450

217

Changes in working capital— Net financial charges

(F14)

-78

-576

Payments related to employee benefits and use of provisions

(F15)

-304

-328

Use of provisions for additional voluntary contributions (pension plans)

(F15)

-116

-155

Dividends received from associates and joint ventures

(F22)

25

19

Income taxes paid (excluding income taxes paid on sale of investments)

(F13)

-434

-305

Cash flow from operating activities

1,911

2,006

of which cash flow related to portfolio management and excluded from Free Cash Flow

-270

-67

Acquisition (-) of subsidiaries

(F16)

-2

0

Acquisition (-) of investments - Other

(F16)

-12

-14

-4

-23

Sale (+) of subsidiaries and investments

(F16)

-718

94

Acquisition (-) of property, plant and equipment

(F16)

-967

-815

-57

0

(F16)

-97

-94

(F16)

7

21

of which cash flow related to the sale of real estate in the context of restructuring/dismantling/remediation-

11

Dividends from equity instruments measured at fair value

1

2

Loans to associates and non-consolidated companiesof which capital expenditures required by share sale agreement and excluded from Free Cash Flow
Acquisition (-) of intangible assets
Sale (+) of property, plant and equipment and intangible assets

Changes in non-current financial assets
Cash flow from investing activities
Proceeds from perpetual hybrid bonds issuance00-1,792

-831

(F27)

0

0

Redemption of perpetual hybrid bonds(F27)-1,3090Acquisition (-) / sale (+) of treasury shares

(F29)

39

7

Increase in borrowings

(F33)

3,221

248

Repayment of borrowings(F33)-1,500-796

Changes in other financial assets

(F33)

98

27

Payment of lease liabilities

(F33)

-112

-113

Net interests paid
Coupons paid on perpetual hybrid bonds(F27)

Dividends paid
Acquisition of non-controlling interests
Other

(F17)

Cash flow from financing activitiesof which increase/decrease of borrowings related to environmental remediation
Net change in cash and cash equivalents

-38

-62

-95

-82

-424

-417

0

-117

-337

112

-455

-1,191

-

0

-335

-15

Currency translation differences-13

7Opening cash balance

932

941

584

932

Closing cash balance(F33)

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT

253

1.4. Consolidated cash flows from discontinued operations
In €million

2023

2022

Cash flow from operating activities

1,108

1,234

Cash flow from investing activities

-675

-518

Cash flow from financing activities

-64

-286

Net change in cash and cash equivalents

368

430

254

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

1.5. Consolidated statement of financial position
Notes

December 31,
2023

December 31,
2022

(F18)

201

2,048

(F19, F23)

764

3,472

Property, plant and equipment

(F20)

2,144

5,311

Right-of-use assets

(F21)

267

474

Equity instruments measured at fair value

(F32)

88

71

Investments in associates and joint ventures

(F22)

230

809

33

36

Deferred tax assets

(F7)

317

932

Loans and other assets

(F32)

266

466

(F33)

0

30

4,309

13,651
2,109

In €million

ASSETS
Intangible assets
Goodwill

Other investments

Other financial instruments
Non-current assets
Inventories

(F24)

642

Trade receivables

(F32)

840

2,026

66

108

Income tax receivables
Other financial instruments

(F33)

118

206

Other receivables

(F25)

462

1,629

Cash and cash equivalents

(F33)

584

932

Current assets

2,714

7,010

Total assets

7,022

20,660237

1,588

Share premiums

174

1,170

Other reserves

853

7,845

EQUITY & LIABILITIESShare capital

Non-controlling interests

(F27)

(F28)

Total equity

42

61

1,305

10,664

Provisions for employee benefits

(F30)

793

1,057

Other provisions

(F31)

550

743

Deferred tax liabilities

(F7)

131

558

Financial debt

(F32)

1,981

2,450

70

303

3,525

5,111
297

Other liabilities
Non-current liabilities
Other provisions

(F31)

302

Financial debt

(F32)

211

510

(F32)

850

2,296

Income tax payables

68

119

Dividends payables

175

165

585

1,499

Trade payables

Other liabilities(F34)

Current liabilities

2,192

4,885

Total liabilities

5,717

9,997

Total equity and liabilities

7,022

20,660A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT

255

256

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity attributable to equity holders of the parent

In €million

Notes

Share
capitalSharepremiums

TreasurysharesPerpetual
hybrid bonds

Retainedearnings

Currency translationdifferences

1,588

1,170

-232

1,786

5,467

-645

-

-

-

-

1,905

-

-

-

-

-

-

304

Comprehensive income

-

-

-

-

1,905

304

Cost of share based payment
plans

-

-

-

-

14

-

Dividends

-

-

-

-

-403

-

Coupons of perpetual hybrid
bonds

-

-

-

-

-82

-

Acquisition (-) / sale (+) of treasury
shares

-

-

7

-

-

-

Other

-

-

-

-

-48

23

1,588

1,170

-225

1,786

6,854

-318

-

-

-

-

2,093

-

-

-

-

-

-

65

-

-

-

-

2,093

65

-

-

-

-1,292-16-

Cost of share based payment
plans

-

-

-

-

24

-

Effect of share based payment
plans modification

-

-

-

-

-20

-

Dividends

-

-

-

-

-420

-

Coupons of perpetual hybrid
bonds

-

-

-

-

-95

-

Acquisition (-) / sale (+) of treasury
shares

-

-

50

-

-11

-

-1,352

-995

79

-494

-6,729

-

-

-

81

-

3

-

237

174

-15

0

1,683

-253

December 31, 2021
Profit for the year
Items of other comprehensive
income(F10)

December 31, 2022
Profit for the year
Items of other comprehensive
income(F10)Comprehensive income
Redemption of perpetual hybrid
bonds

Partial Demerger of Syensqo
Other (*)
December 31, 2023

(F27)*) Other relates to the reclassification into equity investments at fair value through profit or loss due to the allocation of one Syensqo share for each Solvay share held by a subsidiaryof Solvay SA upon completion of the Partial Demerger (See Note F27 Equity)

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3257

Equity attributable to equity holders of the parent
Revaluation reserve (fair value)Non-controllinginterests

Total equity

5,982

112

8,851

-

1,905

29

1,934

73

88

446

2

447

-19

73

88

2,351

30

2,382

-

-

-

14

-

14

-

-

-

-403

-18

-421

-

-

-

-82

-

-82

-

-

-

7

-

7

0

0

1

-24

-63

-87

4

76

-332

7,846

61

10,664

-

-

-

2,093

12

2,105

0

-179

-76

-191

-1

-192

0

-179

-76

1,902

11

1,913

-

-

-

-1,308--1,308

-

-

-

24

-

24

-

-

-

-20

-

-20

-

-

-

-420

-12

-432

-

-

-

-95

-

-95

-

-

-

39

-

39

-4

-

-51

-7,199-17-9,563

-

-

0

84

-

84

0

-103

-459

853

42

1,305

Equity instruments measured at fairvalue through other comprehensive
incomeCash flow
hedgesDefined benefit
pension plan

Total otherreserves

23

3

-421

-

-

-19

258

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

2. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSIFRS GENERAL ACCOUNTING POLICIESBasis of preparation
This information was prepared in accordance with European Regulation (EC) 1606/2002 on the application of international accounting standards
dated July 19, 2002. The Group’s consolidated financial statements for the year ended December 31, 2023, were prepared in accordance with IFRS
(International Financial Reporting Standards) as published by the International Accounting Standards Board (IASB), and endorsed by the European
Union.
The accounting standards applied in the consolidated financial statements for the year ended December 31, 2023, are consistent with those used
to prepare the consolidated financial statements for the year ended December 31, 2022. The Group has not early adopted any other standards,
interpretations or amendments that have been issued but is not yet effective.

Standards, interpretations and amendments applicable for the first time in 2023
The standards, interpretations and amendments that became effective as of January 1, 2023, and which are relevant to the Group are presented
below. An assessment was made that these amendments had no material impact on the Group’s consolidated financial statements.

Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction
The amendments to IAS 12 Income Taxes narrow the scope of the initial recognition exception, so that it no longer applies to transactions that giverise to equal taxable and deductible temporary differences such as leases and decommissioning liabilities.
The Group assessed that the amendments had no material impact on its year-end report.

Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting
Policies
The amendments provide guidance on the application of materiality judgments to accounting policy disclosures. In IAS 1, the amendments replace
the requirement to disclose “significant” accounting policies with a requirement to disclose “material” accounting policies. Guidance and illustrative
examples are added in the Practice Statement 2 to assist in the application of the materiality concept when making judgments about accounting
policy disclosures. The Group assessed that the amendments had no material impact on its year-end report.

Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors: Definition of Accounting
Estimates
The amendments to IAS 8 clarify the distinction between changes in accounting estimates, changes in accounting policies and the correction oferrors. They also clarify how entities use measurement techniques and inputs to develop accounting estimates.
The amendments had no impact on the Group’s consolidated financial statements.

Amendments to IAS 12 Income Taxes: International Tax Reform – Pillar Two Model Rules
On May 23, 2023, the IASB issued the amendments to clarify the application of IAS 12 requirements to income taxes arising from tax law enacted
or substantively enacted to implement the Organization for Economic Co-operation and Development (OECD)/G20 Inclusive Framework on Base
Erosion and Profit Shifting (BEPS) Pillar Two model rules (Pillar Two income taxes).
The amendments introduce:· A mandatory temporary exception to the accounting for deferred taxes arising from the jurisdictional implementation of the Pillar Two model
rules; and· Disclosure requirements for affected entities to help users of the financial statements better understand an entity’s exposure to Pillar Two income
taxes arising from that legislation, particularly before its effective date.
The mandatory temporary exception – the use of which is required to be disclosed – applies immediately. The remaining disclosure requirements
apply for annual reporting periods beginning on or after January 1, 2023.
The Group applied the mandatory temporary exception to the accounting for deferred taxes. The management is currently assessing the accounting
implications and the jurisdictions that could give rise to additional taxation as a result of the implementation of the Pillar Two Model Rules in nationallaws, which is not expected to be material for the Group. See more information on International Tax Reform in Note F7.A.
There are other IFRS amendments applicable for the first time in 2023, but do not have a material impact on, or are not relevant for, the consolidated
financial statements of the Group and therefore have not been disclosed.

Standards, interpretations and amendments applicable for the first time after 2023
The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group’s financial
statements and which may have an impact on the Group are disclosed below. The Group intends to adopt these new and amended standards andinterpretations, if applicable, when they become effective.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT

259

Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback
On September 22, 2022, the IASB issued Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback. The amendments clarify how aseller-lessee subsequently measures sale and leaseback transactions that satisfy the requirements in IFRS 15 Revenue from Contracts with Customers
to be accounted for as a sale. The amendments are effective for annual periods beginning on or after January 1, 2024, and are not yet endorsed by
the EU. The Group is currently assessing the impact the amendments will have on its current accounting practices.

Amendments to IAS 1: Classification of Liabilities as Current or Non-current
These amendments provide a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangements in placeat the reporting date. The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in thestatement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due tobe settled within one year) or non-current. The amendments were originally effective for annual reporting periods beginning on or after January 1,
2023, however, their effective date has been delayed to January 1, 2024. The amendments are not yet endorsed by the EU. This amendment is notexpected to have a material impact on the Group’s consolidated financial statements.

Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments Disclosures: Supplier Finance Arrangements
In May 2023, the IASB issued amendments to IAS 7 and IFRS 7 to clarify the characteristics of supplier finance arrangements and require
additional disclosure of such arrangements. The disclosure requirements in the amendments are intended to assist users of financial statements
in understanding the effects of supplier finance arrangements on an entity’s liabilities, cash flows and exposure to liquidity risk. The amendments
will be effective for annual reporting periods beginning on or after January 1, 2024. Early adoption is permitted, but will need to be disclosed. The
Group is still assessing the impact the amendments will have on its current accounting practices and disclosures. These amendments are not yet
endorsed by the EU.

Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability
On August 15, 2023, the IASB issued the amendments to IAS 21 which are effective for annual periods beginning on or after January 1, 2025, andspecify when a currency is exchangeable into another currency and, consequently, when it is not, how an entity determines the exchange rate toapply when a currency is not exchangeable, and the disclosures an entity provides when a currency is not exchangeable. The Group is still assessing
the impact the amendments will have on its current accounting practices and disclosures. These amendments are not yet endorsed by the EU.

Basis of measurement and presentation
The consolidated financial statements are presented in millions of euros, which is also the functional currency of the parent company. Rounding
differences may occur in respect of individual amounts or percentages.
The preparation of the consolidated financial statements requires the use of estimates and assumptions that have an impact on the application of
accounting policies and the measurement of amounts recognized in the consolidated financial statements. The areas for which the estimates andassumptions are material with respect to the consolidated financial statements are presented in the section Critical accounting judgments and Key
sources of estimation uncertainty.

260

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Principles of consolidation
2.1. Consolidation scope
2.1.1.

GeneralThe consolidated financial statements incorporate the financial statements of the Company, and:· entities controlled by the Company (including through its subsidiaries) and that hence qualify as subsidiaries (see 3.1.2. below);· arrangements over which the Company (including through its subsidiaries) exercises joint control, and that qualify as joint operations (see 3.1.3.
below);· arrangements over which the Company (including through its subsidiaries) exercises joint control, and that qualify as joint ventures (see 3.1.4.
below);· entities over which the Company (including through its subsidiaries) has significant influence and that hence qualify as associates (see 3.1.4. below).
Where necessary, adjustments are made to the financial statements of the investees so as to align their accounting policies with those of the Group.
In accordance with the principle of materiality, certain companies, which are not of a significant size, have not been included in the consolidation
scope. Companies are deemed not to be significant when, during two consecutive years, they do not exceed any of the three following thresholds
in terms of their contribution to the Group’s accounts:· sales of €30 million;· total assets of €15 million;· headcount of 150 persons.
Companies that do not meet these criteria are, nevertheless, consolidated where the Group believes that they have a potential for rapid
development, or where they hold shares in other companies that are consolidated based on the above criteria.
In the aggregate, the non-consolidated companies have an immaterial impact on the consolidated financial statements of the Group.
The full list of companies can be obtained at the Company’s head office.

2.1.2.

Investments in subsidiaries

A subsidiary is an entity over which the Group has control. Control is achieved when the Group has (a) power over an investee, (b) exposure, or rights,
to variable returns from its involvement with the investee, and (c) the ability to use its power over the investee to affect the amount of the investor’s
returns. To assess whether the Group has control, potential voting rights are taken into account. Subsidiaries are fully consolidated. The results ofsubsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition and
up to the effective date of disposal.
Intra-group transactions, balances, income and expenses are eliminated on consolidation.
Non-controlling interests in subsidiaries are presented separately from the Group’s equity. Non-controlling interests are initially measured, either atfair value (full goodwill method), or at the non-controlling interests’ proportionate share in the recognized amounts of the acquiree’s identifiable net
assets (proportionate goodwill method). The choice of measurement is made on an acquisition-by-acquisition basis. Subsequent to the acquisition,
the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share ofsubsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controllinginterests having a deficit balance.
Changes in the Group’s equity interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The carrying
amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary.
Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received isrecognized directly in equity.
When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair valueof the consideration received and the fair value of any retained interest, and (ii) the previous carrying amount of the assets (including goodwill)
and liabilities of the subsidiary and any non-controlling interests. Amounts previously recognized in other comprehensive income in relation to thesubsidiary are accounted for (i.e. Reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be required
if the relevant assets or liabilities were disposed of. The fair value of any investment retained in the former subsidiary at the date when control is lostis considered to be the fair value on initial recognition for subsequent accounting in accordance with IFRS 9 or, when applicable, the cost on initialrecognition of an investment in an associate or joint venture in accordance with IAS 28 Investments in Associates and Joint Ventures.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

2.1.3.

FINANCIAL STATEMENT

261

Investments in joint operations

A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations
for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when
decisions about relevant activities require the unanimous consent of the parties sharing control. In its consolidated financial statements, the Group
recognizes its contractual share of the joint operations’ assets, liabilities, revenue and expenses, which is generally aligned with the ownershipinterest in the joint operations.

2.1.4.

Investments in associates and joint ventures

An associate is an entity over which the Group has significant influence and that is neither a subsidiary, nor an interest in a joint arrangement.
Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control overthose policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement.
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about relevant activities require theunanimous consent of the parties sharing control.
The results, assets and liabilities of associates and joint ventures are incorporated in the consolidated financial statements using the equity methodof accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5 Non-current
Assets Held for Sale and Discontinued Operations. Under the equity method, on initial recognition, investments in associates and joint ventures
are recognized in the consolidated statement of financial position at cost, and the carrying amount is adjusted for post-acquisition changes in theGroup’s share of the net assets of the associate or joint venture, less any impairment of the value of individual investments. Losses of an associate or
joint venture in excess of the Group’s interest in that associate or joint venture (which includes any long-term interests that, in substance, form partof the Group’s net investment in the associate or joint venture) are recognized only to the extent that the Group has incurred legal or constructive
obligations or made payments on behalf of the associate or joint venture.
Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets and (contingent) liabilities of the associate
or joint venture recognized at the date of acquisition is goodwill. The goodwill is included within the carrying amount of the investment and isassessed for impairment as part of that investment.
Where a Group entity transacts with an associate or joint venture of the Group, profits and losses are eliminated to the extent of the Group’s interestin the relevant associate or joint venture.
After application of the equity method, the Group reviews its investments in associates and joint ventures for impairment. At each reporting date,the Group determines whether there is objective evidence that the investment in the associate or joint venture is impaired. If there is such evidence,
the Group performs its analysis and calculates any impairment as the difference between the recoverable amount of the associate or joint venture
and its carrying value, and then recognizes the loss in the consolidated income statement.

Foreign currencies
The individual financial statements of each Group entity are prepared in the currency of the primary economic environment in which the entity
operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each Group entity
are expressed in euros (EUR), which is the presentation currency of the Group’s consolidated financial statements.
In preparing the financial statements of the individual entities, transactions in currencies other than the entities’ functional currency are recognizedat the exchange rates prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign
currencies are translated at the closing rate. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at
the rate when the fair value was measured. Non-monetary items that are measured in terms of historical cost in a foreign currency are translatedusing the exchange rates at the date of the initial transactions.
Exchange differences are recognized in profit or loss in the period in which they arise except for:· exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely
to occur in the foreseeable future (therefore forming part of the net investment in the foreign operation), which are recognized initially in othercomprehensive income under “currency translation differences;” and· exchange differences on transactions entered into in order to hedge certain foreign currency risks (see note F32 Financial instruments and financial
risk management for hedge accounting policies).

262

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

The main exchange rates used are:Year-end rate
1 Euro =Average rate

December 31, 2023

December 31, 2022

2023

2022

Brazilian RealBRL

5.36125.63545.40105.4391

Yuan Renminbi

CNY

7.83837.41997.66087.0781Pound Sterling

GBP

0.86900.88700.86980.8526

Indian Rupee

INR

91.967888.301989.310782.6910

Japanese Yen

JPY

156.3416

140.7248

151.9821

138.0176

Korean Won

KRW

1,423.3871

1,349.6641

1,412.4780

1,357.2278

Mexican Peso

MXN

18.7359

20.881119.1854

21.1921

US Dollar

USD

1.1052

1.06741.0813

1.0531Government grants
Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attaching to them andthat the grants will be received.
Government grants relating to the purchase of property, plant and equipment are deducted from the cost of those assets. They are recognized in
the consolidated statement of financial position at their expected value at the moment of initial recognition. The grant is recognized in profit or loss
over the depreciation period of the underlying assets as a reduction of depreciation expense.
Other government grants are recognized as income on a systematic basis over the periods in which the related costs, which they are intended tocompensate for, are recognized. Government grants that are receivable as compensation for expenses or losses already incurred or for the purposeof giving immediate financial support to the Group with no future related costs are recognized in profit or loss in the period in which they become
receivable.

Climate change
In preparing the consolidated financial statements, management has considered the impacts of climate change, particularly in the context of thedisclosures included in the Risk Report and Extra-financial Statements and the Group’s progression towards the ambitious 2030 goals to reduce
scope 1 and 2 greenhouse gas emissions from our operations by 30% and to achieve carbon neutrality by 2050.
Between 2021 and 2040, Solvay plans to invest up to €200 million to reach carbon neutrality for all its businesses other than Soda Ash with anadditional investment of €1 billion identified for Soda Ash until 2040 to pave its path towards full carbon neutrality for the Group by 2050 (withapproximately €250 million spent of the more than €600 million already engaged between Soda Ash and the rest). These investments are partially
supported by external parties through equity-accounted investments and include non-recourse financing and government subsidies, enabling
Solvay to remain competitive. Further studies on technology innovation will determine the future investment needs beyond 2040.
Since 2015 the Group has adopted an internal carbon price and it has imputed that as an input cost into all investment decisions, irrespectiveof prevailing market prices. The internal cost was originally set at €25 per metric ton in 2015, and was doubled to €50 in 2019. In 2021 it was thendecided to be raised to €100 per metric ton of CO2 with implementation in 2022. This approach ensures that all investments contribute positively tothe resilience of the Group in the face of climate change risk and are also oriented towards achieving carbon neutrality.
In addition to the strategic direction, policies and commitments, it is important to note that Solvay is taking concrete actions aligned with its climatechange commitments. These are extensively developed in the Sustainability Report. As an example of the Group’s commitment to phase out of coalin the Soda Ash business, several projects were initiated comprising:· The construction of two waste-wood boilers accounted for as finance leases in Rheinberg, Germany; the first of the two boilers was commissioned
in 2021. The second boiler will enter into operation by the end of 2024.
· In Devnya, Bulgaria, a variety of renewable sources including sunflower husk pellets will be used to power production processes at our largest
soda ash European site and reduce emissions related to energy production by 20%. As a consequence of this investment 130 kt CO2 were not
emitted in 2023.
· Already equipped with a waste to energy power plant since 2006, we recently further invested to modernize our gas cogeneration unit in Bernburg,
Germany, to maintain our low CO2 footprint at the site.
· In Green River, Wyoming, USA, our calciners and boilers are switching from coal to gas, a readily-available local resource, which will save 280 kilotons
of CO2 per year. This is in addition to the new project Solvay launched to deploy a new breakthrough technology that will abate greenhouse gas
emissions originating from Trona mining operations. This will reduce the site’s greenhouse gas emissions by 28% while growing its capacity. It will
also make Solvay the first company to implement regenerative thermal oxidation technology to cut emissions from a trona mine. In 2023, about
100 kt CO2 emissions were avoided.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT

263· An equity investment in Dombasle Energy, France, of which Solvay has a 10% share. The project is largely financed through non-recourse debt
executed in February 2022 and government subsidies. Included in the investment are two refuse derived fuel boilers. The project is expected to
be fully deployed in 2025.
When such investments are made, the Group verifies the useful life of the assets that are replaced and adjusts the estimated useful life if necessary.
The Group is also actively working on sourcing its energy needs from more environmentally friendly resources including long-term renewableenergy generation solutions both onsite and offsite at certain facilities. These include long-term solar and wind power purchase agreements
generally accounted for as executory own use contracts. In addition, the Group has entered into long-term contracts to purchase Renewable Energy
Certificates, which will cover almost one quarter of the electricity purchased and consumed in the United States. The latter are recorded in operating
expenses. In 2023, 100% of our operations in China are still supplied by renewable electricity (1.3 PJ) (see Chapter 4.2 Energy of the extra-financial
statements). From 6.3% of our renewable energy purchased versus our total amount of energy purchased in 2022, Solvay has improved its figureand has acquired 8.2% renewable energy purchased in 2023 versus total amount of energy purchased.
In addition the Star Factory program that embeds the design and execution of the ESG roadmap of each industrial sites including a specific effort
on energy efficiency initiatives on the top of Energy transition projects. It was decided to extend the methodology of Star Factory to include othershared function (Supply Chain & Procurement particularly) in order to develop the complementary roadmaps to tackle Scope 3 emission on the topof improving competitiveness.
Management has also considered the impact of climate change in making some key estimates within the consolidated financial statements,
including the execution of the Solvay One Planet strategy, which is included in the budgets, mid-term plan and long-term forecasts, which are usedto:· estimate future cash flows used in impairment assessments of the carrying value of non-current assets (such as intangible assets and goodwill)(see Note F23 Impairment);· estimate future profitability used in the assessment of the recoverability of deferred tax assets (see Note F7.C. Deferred taxes in the consolidated
statement of financial position);· estimate provisions (see Note F31);· estimate the long-term accounting assumptions, including CO2 emission rights and energy prices for the energy intensive Soda Ash GBU (seeNote F23 Impairment).
The Group’s CO2 emission rights and energy prices (gas/electricity/coal) are an important element of the cost structure, especially for the Soda Ashbusiness. The Group has hedged a significant portion of its expected use through 2030. The hedges were taken into consideration in the goodwill
impairment test performed and the long-term assumptions considered the higher capital expenditure required by the energy transition of thebusiness after the hedged period. Considering the significant headroom on the Soda Ash CGU, no sensitivity is provided. See Note F23 Impairment.
The same exercise was done for the other cash generating units and management believes there are no realistic scenarios regarding climate change
today, which would lead to an impairment of these assets.
In summary, the Group’s climate change considerations mentioned above did not have a material impact on the financial reporting judgments andestimates during the year. Further, the Group concludes that the climate change risk does not impact the going concern assessment for December
2023.

CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATIONUNCERTAINTY
Critical accounting judgments
Partial Demerger of Syensqo
On March 15, 2022, the Group announced its plan to separate into two independent publicly traded companies. On December 9, 2023, theseparation was effectuated through the means of the Partial Demerger. The Specialty Businesses were classified as discontinued operations
following the approval of Partial Demerger by the shareholders and the net assets were distributed. The 2022 Consolidated Statement of Income
was restated to reflect this classification. Solvay applied IFRIC 17 Distribution of Non cash-Assets to Owners to determine how to present the Partial
Demerger which included estimating the fair value of the distribution. Solvay estimated the fair value of Syensqo by taking an average of the closing
price of the first 30 days of trading activity of Syensqo to prevent distortions from short-term trading activity in the first weeks of trading. This being
a fair value with observable inputs and was considered to be representative of the fair value at the distribution date.
The fair value was determined to be €9.5 billion which resulted in a gain of €1.65 billion over the then carrying amount of the net assets. The impact
was recorded to the consolidated income statement in discontinued operations.
No other critical accounting judgments have been identified for the year ended December 31, 2023.

264

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Key sources of estimation uncertainty
Impairment
The Group performs annual impairment tests on (groups of) CGUs to which goodwill has been allocated, and each time there are indicatorsthat their carrying amount might be higher than their recoverable amount. This analysis requires management to estimate the future cash flows
expected to be generated by the CGUs and a suitable discount rate in order to calculate present value. The recoverable amount is highly sensitive
to discount and growth rates.
Further details are provided in note F19 Goodwill and Business Combinations and F23 Impairment.

Deferred tax assets
Deferred tax assets (DTA) are recognized for unused tax losses to the extent that it is probable that taxable profits will be available against which thelosses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based
upon the likely timing and the level of future taxable profits.
The Group has €1,520 million (2022: €5,203 million) of tax losses carried forward for which no deferred tax assets were recognized. These losses relate
to subsidiaries that have a history of losses, do not expire, and may not be used to offset taxable income elsewhere in the Group. The subsidiaries
do not have any taxable temporary differences that could partly support the recognition of these losses as deferred tax assets. On this basis, theGroup has determined that it cannot recognize deferred tax assets on these tax losses carried forward.
The goals referred to in Climate Change note may have an impact on the estimate of future probability used in the DTA recoverability assessment– see the note, above.
Further details are provided in Note F7.C. Deferred taxes in the consolidated statement of financial position and F7.D Other Information.

Defined benefit obligations – General
The actuarial assumptions used in determining the defined benefit obligations at December 31 as well as the annual cost can be found in note F30
Provisions for employee benefits. All main employee benefits plans are assessed annually by independent actuaries. Discount rates and inflation
rates are defined centrally by management. The other assumptions (such as future salary increases and expected rates of medical care cost increases)
are defined at a local level. All plans are supervised by the Group’s central Human Resources department with the help of a central actuary to checkthe reasonableness of the results and ensure consistency in reporting. All assumptions are reviewed at each reporting date.
Further details are provided in note F30 Employee benefits.

Environmental provisions
Environmental provisions are managed and coordinated jointly by the Environmental Rehabilitation department and the Finance department. In
case of environmental impacts stemming from historical production activities, generally, no provision is recognized for remediation works beyond
the 20 years due to the inherent high level of uncertainty as to the timing and amount.
The forecasts of expenses are discounted to their present value. The discount rates fixed by geographical area correspond to the average risk-freerate on 10-year government bonds or the inflation rate if higher. These rates are set annually by the Finance department and can be revised basedon the evolution of economic parameters of the country involved. To reflect the passage of time, the provisions are increased each year at thediscount rates described above.
Further details are provided in note F31 Provisions.

Provisions for litigations
Any significant litigations (post M&A and other, including threat of litigation) are reviewed by Solvay’s in-house lawyers with the support, whenappropriate, of external counsels at least every quarter together with the Finance and Insurance Departments. This review includes an assessmentof the need to recognize provisions, disclose contingent liabilities and/or contingent assets.
Further details are provided in note F31 Provisions and F36 Contingent assets, liabilities and financial guarantees.

Leases – Identifying whether a contract includes a lease
The Group enters into various contracts to obtain goods and services. Determining whether those contracts include a lease requires judgment.
Elements that are considered include assessing whether or not there is an identified asset. To make the determination the Group considers whether
or not it has the right to obtain substantially all of the economic benefit of the asset(s) throughout the period of use. Additionally, the Groupassesses the extent of its decision-making rights and the existence of any substantive substitution rights. All facts and circumstances relevant to theassessment are considered and the identification of a lease is determined with the support of the departments that have the relevant knowledge,
and which mainly includes the GBU management. Refer to note F21 Right-of-use assets and lease obligations for the leases that were identified by
the Group and accounted for in accordance with IFRS 16 Leases.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT

265

Leases – Assessment of lease term
Determining the lease term requires judgment. Elements that are considered include assessing the probability that early termination options or
extension options will be exercised. All facts and circumstances relevant to the assessment are considered, and the main ones have been describedin note F21 Right-of-use assets and lease obligations. Lease terms are determined with the support of the departments that have the relevant
knowledge, and that mainly includes the Purchasing department, and the Facilities department.

NON-IFRS (UNDERLYING) METRICS
In addition to IFRS accounts, Solvay also presents alternative performance indicators to provide a more consistent and comparable indication of
the Group’s underlying financial performance and financial position, as well as cash flows. These indicators provide a balanced view of the Group’s
operations and are considered useful to investors, analysts and credit rating agencies as these measures provide relevant information on theGroup’s past or future performance, position or cash flows. These indicators are generally used in the sector it operates in and therefore serve as a
useful aid for investors to compare the Group’s performance with its peers.
See note F1 Revenue and Segment Information for the reconciliation of the underlying EBITDA measure. Further information on definitions ofadjustments (IFRS vs Underlying metrics) can be found in Glossary, and more information about reconciliation of non-IFRS (underlying) metrics withIFRS figures in Business Review.

NOTES TO THE CONSOLIDATED INCOME STATEMENT
Preliminary comment: consistent with the presentation in the consolidated income statement, the notes to the consolidated income statement aspresented hereafter do not include the consolidated income statement impacts from discontinued operations that are presented on a separate
line. Those are disclosed in note F8 Discontinued operations.

266

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

NOTE F1
REVENUE AND SEGMENT INFORMATION

Accounting policy
IFRS 15 establishes a five-step model to account for revenue arising from contracts with customers:· Identify the contract,· Identify the performance obligations,· Determine the transaction price,· Allocate the transaction price to the performance obligations in the contract, and· Recognize revenue when or as the Group satisfies a performance obligation.
Under IFRS 15, revenue is recognized at an amount that reflects the consideration to which the Group expects to be entitled in exchange fortransferring goods or services to a customer.
Sale of goods: Contracts can be short term (including based only on a purchase order) or long term, some have minimum off-take requirements.
Contracts that contain take-or-pay provisions obligate customers to pay shortfall payments if the required volumes, as defined in the contracts,
are not purchased. Shortfall payments are recognized as revenues when the likelihood of the customer purchasing the minimum volume
becomes remote subject to renegotiation of the contract and collectability. As the Group is in the business of selling essential chemicals, andperformance chemicals, contracts with customers generally concern the sale of goods. As a result, revenue recognition generally occurs at apoint in time when control of the chemicals is transferred to the customer, generally on delivery of the goods.
Distinct elements: a good or service that is promised to a customer is distinct if both of the following criteria are met: (a) the customer canbenefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e. The goodor service is capable of being distinct); and (b) the Group’s promise to transfer the good or service to the customer is separately identifiablefrom other promises in the contract (i.e. The promise to transfer the good or service is distinct within the context of the contract).
The revenue of the Group consists mainly of sales of chemicals, which qualify as separate performance obligations. Value-added services– mainly customer assistance services – corresponding to Solvay’s know-how are rendered predominantly over the period that thecorresponding goods are sold to the customer.
Variable consideration: some contracts with customers provide trade discounts or volume rebates. Trade discounts and volume rebates giverise to variable consideration under IFRS 15, and are required to be estimated at contract inception and subsequently at each reporting date.
IFRS 15 requires the estimated variable consideration to be constrained to prevent overstatement of revenue.
Moment of recognition of revenue: revenue is recognized when (or as) the Group satisfies a performance obligation by transferring apromised good or service (i.e. an asset) to a customer. An asset is transferred when (or as) the customer obtains control of that asset.
Substantially all revenue stems from performance obligations satisfied at a point in time, i.e. The sale of goods. Revenue recognition for
those takes into account the following:· The Group has a present right to payment for the asset;· The customer has legal title to the asset;· The Group has transferred physical possession of the asset;· The customer has the significant risks and rewards of ownership of the asset (in this respect, incoterms are considered); and· The customer has accepted the asset.
Products sold to customers generally cannot be returned, other than for performance deficiencies. Customer acceptance clauses are in manycases a formality that would not affect the Group’s determination of when the customer has obtained control of the goods. Revenue fromservices is recognized in the period those services have been rendered.
The Group sells its chemicals to its customers, (a) directly, (b) through distributors, and (c) with the assistance of agents. When the Groupdelivers a product to distributors for sale to end customers, the Group evaluates whether that distributor has obtained control of the productat that point in time. No revenue is recognized upon delivery of a product to a customer or distributor if the delivered product is held on
consignment. Indicators of consignment inventory include:· The product is controlled by the Group until a specified event occurs, such as the sale of the product to a customer of the distributor or
until a specified period expires;· The Group is able to require the return of the product or transfer the product to a third party (such as another distributor); and· The distributor does not have an unconditional obligation to pay for the product (although he might be required to pay a deposit).
· Agents facilitate sales and do not purchase and resell the goods to the end customer.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT

267

Warranties: warranties provide a customer with assurance that the related product will function as the parties intended because it complies
with agreed-upon specifications. Substantially all warranties do not provide the customer with a service in addition to the assurance that the
product complies with agreed-upon specifications, and are hence accounted for in accordance with IAS 37 Provisions, Contingent Liabilities
and Contingent Assets.
Licensing: In case of performance obligations relating to licensing intellectual property (IP), the Group assesses if it grants a right to accessthe IP as it exists throughout the license period or a right to use the IP as it exists at the point in time at which the license is granted. If
the performance obligation is to grant a right to access, then the related revenue is recognized over the license period; otherwise, it isrecognized at a point in time, i.e. when the license period starts or when the customer starts using the IP. The Group assesses if the licenseprovided can be considered as being distinct in the context of the contract. If not, the license will have to be bundled with other goods orservices provided in the contract. Currently the Group grants a right to use IP, which means that revenue recognition occurs at a point in time.
An Operating Segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses,
whose operating results are regularly reviewed by the entity’s chief operating decision maker and for which discrete financial information isavailable.

GeneralFollowing the completion of the Partial Demerger of the Specialty Businesses on December 9, 2023, the structure of the internal organization
changed what impacted the composition of the segments. Consequently, Solvay restructured its operating segments to better align with theGroup’s strategy and is organized in the following reportable segments· Basic Chemicals: host chemical intermediate businesses focused on mature and resilient markets. Solvay is a world leader in soda ash, bicarbonate,
and peroxides. These global businesses share similar economic characteristics and serve major markets that include building and construction,
consumer goods, and food.
· Performance Chemicals: hosts a wider range of products (in our Silica, Coatis and Special Chem businesses) that are subject to customization
based on unique formulations and application expertise. These businesses share similar economic characteristics and are also high-quality assets
with strong positions in their markets.
· Corporate: comprises corporate and other business services, such as Group research & innovation.
Solvay organizes its structure and groups the businesses around their similarities in financial performance which is systematically reviewed by the
Chief Operational Decision Maker, products and production processes. Solvay’s chief operating decision maker is the Chief Executive Officer.
Prior year results were restated to align with the new reportable segments.

268

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

2.2. External net sales by cluster
The comparative figures for 2022 are restatedIn €million

2023

2022

Soda Ash & Derivatives

2,093

2,221

633

773

2,726

2,994

Silica583

631

Coatis646

870

Special Chem

919

1,040

2,148

2,542

CBS and NBD

6

4

Corporate & Business Services

6

4

4,880

5,540

Peroxides
Basic Chemicals

Performance Chemicals

Total

There are no individual customers that contribute 10% or more to the Group’s revenue or any individual segment’s revenue in either 2023 or 2022.

Sales by market
Sales by market are presented in the Business Review, see note B1.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT

269

Net sales by country and region
The sales disclosed below are allocated based on the customers’ location. The table presents restated information for 2022.
The comparative figures for 2022 are restatedIn €million

2023

%

2022

%

Belgium

92

2%

139

3%

Germany

449

9%

461

8%

Italy

267

5%

272

5%

France

236

5%

242

4%

Netherlands

55

1%

51

1%

Spain

130

3%

122

2%

European Union – Other

415

9%

428

8%

European Union

1,645

34%

1,717

31%

Europe – Other

108

2%

113

2%

United States

830

17%

943

17%

Canada

58

1%

54

1%

North America

888

18%

997

18%

Brazil

610

13%

806

15%

Mexico

156

3%

131

2%

Latin America – Other

149

3%

235

4%

Latin America

914

19%

1,171

21%

Australia

27

1%

30

1%

China

298

6%

305

6%

Egypt

43

1%

65

1%

India

55

1%

63

1%

Indonesia

65

1%

86

2%

Israel

34

1%

46

1%

Japan

100

2%

107

2%

Malaysia

66

1%

83

1%

Russia

0

0%

8

0%

Saudi Arabia

99

2%

121

2%

South Africa

32

1%

52

1%

South Korea

115

2%

105

2%

Thailand

139

3%

154

3%

Turkey

38

1%

46

1%

Vietnam

48

1%

54

1%

Other

164

3%

218

4%

Asia and rest of the world

1,325

27%

1,541

28%

Total

4,880

100%

5,539

100%

270

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3Information per segment
The comparative figures for 2022 are restated
Basic
Chemicals

Performance
Chemicals

Corporate &Business Services

Group Total

2,777

2,152

6

4,935

-51

-4

0

-55

2,726

2,148

6

4,880

Revenue from non-core activities

577

29

538

1,144

Gross margin

847

489

46

1,382

Depreciation and amortization

192

157

69

418

Earnings from associates and joint ventures

45

0

8

53

Underlying EBITDA(1)

916

405

-75

1,246

EBIT

712

186

-620

278

2023 – In €million
Income statement items
Net sales (including inter-segment sales)— Inter-segment sales
Net sales

Net financial charges-98

Income taxes-208

Profit for the year from discontinued operations

2,132

Profit/(loss) for the year

2,105

Basic
Chemicals

Performance
Chemicals

Corporate & Business
Services

Group Total

294

120

35

450

4

5

-427

-418

— Inventories

325

289

28

642

— Trade receivables

459

264

118

841

— Trade payables

412

260

181

853

December 31, 2023 – In €million
Statement of financial position and other items
Capital expenditures (2)Investments (3)Working capital(1) Underlying EBITDA is a key performance indicator followed by management and includes other elements than those presented above. See below for the reconciliation
between Underlying EBITDA and EBIT. See Business Review section for reconciliation of other Underlying measures with IFRS figures.
(2) Capital expenditures from continuing operations include acquisitions of property, plant and equipment, acquisition of intangible assets and acquisition of Right of use
assets.
(3) The negative figure of €(427) million relates to RusVinyl sale of investment.

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

271

Basic
Chemicals

Performance
Chemicals

Corporate& Business
Services

Group Total

3,064

2,554

4

5,622

-70

-12

0

-82

2,994

2,542

4

5,539

Revenue from non-core activities

937

24

1,478

2,439

Gross margin

837

510

76

1,423

Depreciation and amortization

195

66

40

301

Earnings from associates and joint ventures

36

1

117

153

Underlying EBITDA(1)

859

414

86

1,359

EBIT

638

342

141

1,121

2022 – In €million

Income statement items
Net sales (including inter-segment sales)— Inter-segment sales
Net sales

Net financial charges

11

Income taxes-228

Profit for the year from discontinued operations

1,030

Profit/(loss) for the year

1,934

Basic
Chemicals

Performance
Chemicals

Corporate& Business
Services

Specialty
Businesses

Group
Total

235

101

74

612

1,022

1

0

5

8

15

— Inventories

354

351

21

1,382

2,108

— Trade receivables

522

277

229

998

2,026

— Trade payables

569

288

515

924

2,296

December 31, 2022 – In €million
Statement of financial position and other items
Capital expenditures(2)Investments
Working capital(1) Underlying EBITDA is a key performance indicator followed by management and includes other elements than those presented above. See below for the reconciliation
between Underlying EBITDA and EBIT. See Business Review section for reconciliation of other Underlying measures with IFRS figures.
(2) Capital expenditures include acquisitions of property, plant and equipment, acquisition of intangible assets and acquisition of Right of use assets.

Reconciliation of Underlying EBITDA
The 2022 figures are restated2023 – In €million

Basic Chemicals

Performance
Chemicals

Corporate & Business
Services

Group Total

712

186

-620

278

Administrative costs

68

68

Other operating gains and (losses)

-14

-14

Earnings from associates and joint ventures

-7

-7

EBIT

Depreciation and amortization

191

94

36

321

Results from legacy remediation and major litigations

13

126

461

600

Underlying EBITDA

916

405

-76

1,246

Results from portfolio management and major restructuring

272

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

The reconciliation items “Result from portfolio management and major restructuring and results from legacy remediation and major litigations,”
mainly include the loss on RusVinyl disposal and the restructuring and other costs incurred for the project aimed at the separation of the Group into
two independent, publicly listed companies and other restructuring initiatives, and the environmental provisions accrued. The item depreciation
and amortization exclude €102 million consisting of €7 million of the non-cash impact of purchase price allocation (PPA), amortization charges on
intangible assets, and €95 million to adjust for the impact of impairment of other non-performing assets. The amount of €68 million includes the purecorporate costs related to the project aimed at the separation of the Group into two independent listed companies.
2022 – In €million

Basic Chemicals

Performance
Chemicals

Corporate & Business
Services

Group Total

638

342

141

1,121

71

71

Other operating gains and (losses)

-313

-313

Earnings from associates and joint ventures

-10

-10

EBIT
Administrative costs

Depreciation and amortization

192

89

40

321

Results from legacy remediation and major litigations

28

-14

158

172

Underlying EBITDA

859

416

86

1,361

Results from portfolio management and major
restructuring andFINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

273

NON-CURRENT ASSETS, CAPITAL EXPENDITURES AND INVESTMENTS BY COUNTRY AND REGION
Non-current assets

In €million

Capital expenditures and investments

December31, 2023%

December31, 2022

%

2023

%

2022

%

Belgium

272

7%

288

2%

-26

2%

-32

3%

Germany

338

9%

438

4%

-56

5%

-55

5%

Italy

259

7%

655

5%

-131

12%

-125

12%

France

653

18%

2,876

24%

-318

28%

-242

23%

Spain

128

3%

130

1%

-12

1%

-13

1%

European Union – Other

710

19%

314

3%

-33

3%

-37

4%

European Union

2,359

63%

4,702

38%

-577

51%

-504

49%

Europe – Other

6

0%

150

1%

-16

1%

-20

2%

United States

709

19%

5,273

43%

-390

34%

-348

34%

0

0%

175

1%

-19

2%

-12

1%

North America

709

19%

5,448

45%

-409

36%

-360

35%

Brazil

276

7%

277

2%

-41

4%

-34

3%

Latin America – Other

11

0%

22

0%

-5

0%

-5

1%

Latin America

287

8%

299

2%

-46

4%

-39

4%

Russia

0

0%

432

4%

0

0%

0

0%

Thailand

72

2%

91

1%

-5

0%

-5

0%

China

102

3%

588

5%

-54

5%

-79

8%

South Korea

50

1%

73

1%

-5

0%

-7

1%

India

0

0%

233

2%

-12

1%

-8

1%

Singapore

0

0%

3

0%

-1

0%

-3

0%

Japan

15

0%

19

0%

-3

0%

-3

0%

Other

125

3%

186

2%

-4

0%

-6

1%

Asia and rest of the world

364

10%

1,624

13%

-84

7%

-112

11%

3,726

100%

12,223100%-1,132100%-1,036

100%

CanadaTotal

Non-current assets are those other than deferred tax assets, loans and other assets, and other financial instruments. Capital expenditures andinvestments include acquisitions of property, plant and equipment, right-of-use assets, intangible assets and investments in subsidiaries and otherinvestments (joint operations, joint ventures and associates). Both exclude discontinued operations.

274

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

NOTE F2CONSOLIDATED INCOME STATEMENT BY NATURE
The comparative figures for 2022 are restatedIn €million

Notes

2023

2022

Net sales

(F1)

4,880

5,539

Revenue from non-core activities

(F3)

1,145

2,439

-2,802-4,790Changes in inventories

-78

76

Personnel expenses

-835

-827

— Wages and direct social benefits

-623

-620

— Employer's contribution for social insurance

-163

-145

— Pensions and insurance benefits

-26

-48

— Other personnel expenses

-22

-14

-423

-301

Other variable logistics expenses

-568

-695

Other fixed expenses

-412

-350

Raw materials, utilities and consumables used

Amortization, depreciation and impairment(F11)

Addition and reversal of provisions (excluding employee benefit provisions)

(F31)

-279

-138

Significant income related to prior years

(F4)

0

97

M&A costs and gains and losses on disposals

(F5)

-404

-83

Earnings from associates and joint ventures

(F22)

53

153

278

1,121

EBIT

Other fixed expenses mainly include costs of services, licenses, and professional fees.
The change in raw materials, utilities, and consumables used is largely explained by the decrease in energy prices, and lower volume.

NOTE F3
REVENUE FROM NON-CORE ACTIVITIESThis revenue primarily comprises commodity and utility third party transactions, non-core licensing transactions, and other revenue, considered to
not correspond to Solvay’s core business (mainly in France and Italy). The decrease compared to 2022 is mainly related to the reduction in gas andelectricity price.

FINANCIAL STATEMENT

275

2023

2022

Start-up and preliminary study costs-2-3

Capital gains/losses on sales of property, plant and equipment and intangible assets

3

3

Net foreign exchange gains and losses

2

10

Amortization of intangible assets resulting from PPA-7-8Gain (loss) on CO2 hedge management (1)

-14

322

Financial result linked to operational activities

14

3

Other

19

-4

Other operating gains and losses

15

323

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

NOTE F4
OTHER OPERATING GAINS AND LOSSES
In €million

The comparative figures for 2022 are restated.
(1) In 2022, the gain of €322 million relates to the change in accounting treatment of the entire portfolio of CO2 emission rights following the reconsideration of the IFRS 9
own use exemption.

NOTE F5
RESULTS FROM PORTFOLIO MANAGEMENT AND MAJOR RESTRUCTURINGS,LEGACY REMEDIATION AND MAJOR LITIGATIONS

Accounting policy
Results from portfolio management and major restructurings include:· gains and losses on the sale of subsidiaries, joint operations, joint ventures, and associates that do not qualify as discontinued operations;· acquisition costs of new businesses;· one-off operating costs related to internal management of portfolio (carve-out of major lines of businesses);· gains and losses on the sale of real estate not directly linked to an operating activity;· restructuring charges driven by portfolio management and by major reorganizations of business activities, including impairment losses
resulting from the shutdown of an activity or a plant;· impairment losses (reversals) resulting from testing of CGUs.
Results from legacy remediation and major litigations include:· the remediation costs not generated by on-going production facilities (shut-down of sites, discontinued productions, previous years’
pollution); and· the impact of significant litigations.

Results from portfolio management and major restructuring
In €million

2023

2022

Restructuring costs and impairment

-146

15

Impairment

-95

28

Restructuring costs

-51

-13

M&A costs and gains and losses on disposals

-404

-83

Results from portfolio management and major restructuring

-550

-68

The comparative figures for 2022 are restated.

In 2023, the impairment includes goodwill impairment of energy CGU €(38) million, and impairment in the Special Chem CGU for Fluor Gases in
Europe for €(48) million – see note F23 for further details on the impairment.
The restructuring costs are mainly linked to the separation plan of the Solvay Group €(35) million.

276

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3In 2023, M&A costs is mainly explained by the costs incurred for the ongoing separation plan of the Solvay Group €(218) million, and the recyclingof RusVinyl of currency Translation Adjustment reserve €(176) million.
In 2022, impairment includes the reversal of impairment losses in the Special Chem CGU for Fluor Gases in Europe for €37 million, impairment lossesof other non-performing assets for €(9) million.
The 2022 increase in M&A costs is mainly explained by the costs incurred for the ongoing separation plan of the Solvay Group. For the movement
in restructuring and remediation costs please refer to the note F31 Provisions.

RESULTS FROM LEGACY REMEDIATION AND MAJOR LITIGATIONS
2023

2022

Major litigations

-12

-30

Remediation costs and other costs related to non-ongoing activities

-38

-71

Results from legacy remediation and major litigations

-50

-101

In €million

The comparative figures for 2022 are restated.

For the movement in litigation costs and remediation costs, please refer to the note F31. Provisions.

NOTE F6NET FINANCIAL CHARGES

Accounting policy
Interest on borrowings is recognized in costs of borrowings as incurred, with the exception of borrowing costs directly attributable to theacquisition, construction and production of qualifying assets (see note F20 Property, Plant and Equipment).
Net foreign exchange gains or losses on financial items and changes in fair value of derivative financial instruments related to net indebtedness
are presented in “Other gains and losses on net indebtedness,” with the exception of changes in fair value of derivative financial instrumentsthat are hedging instruments in a cash flow hedge relationship, and which are recognized on the same line as the hedged item, when thelatter affects profit or loss.

2023

2022

Cost of borrowings

-60

-45

Interest expense on lease liabilities

-11

-10

Interest on loans and short term deposits

36

16

Other gains and losses on net indebtedness-627

Net cost of borrowings

-41

-12

Cost of discounting provisions

-45

-23

Impact of change of discount rate on provisions

-17

45

4

0

-98

11

In €million

Result from equity instruments measured at fair value
Net financial charges
The comparative figures for 2022 are restated.

Details are included in note F33 Net indebtedness.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT

277

The net cost of borrowings variance is mainly explained by:· Higher cost of borrowings for €(15) million largely explained by the replacement of perpetual hybrid bonds that qualified as equity (for which
coupons were deducted from equity upon declaration) by other non-current debts triggering interest expenses.
· Higher interest income on loans and deposits (higher volumes and increase in interest rates).
· Other gains and losses on net indebtedness from €27 million for 2022 to €(6) million for 2023, attributable to lower currency swaps income€(5) million (interest element), other financial charges for €(15) million mainly explained by costs related to the separation plan and lower foreignexchange income for €(13) million.
The cost of discounting provisions relates to post-employment benefits (€(26) million) and to environmental provisions (€(19) million) and its increaseis largely attributable to the evolution of the applicable discount rates (see also note F30 Employee benefits and note F31 Provisions).

NOTE F7
INCOME TAXES IN THE INCOME STATEMENT AND THE STATEMENT OF FINANCIAL POSITION

Accounting policy
Current taxes
The current tax payable is based on taxable profit of the year. Taxable profit differs from profit as reported in the consolidated income statement
because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred taxes
Deferred taxes are recognized for temporary differences between the carrying amounts of assets and liabilities in the consolidated financial
statements and their corresponding tax bases used in the computation of taxable profit.
Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will
be available against which those deductible temporary differences can be utilized.
Deferred tax liabilities are generally recognized for all taxable temporary differences.
No deferred tax liabilities are recognized following the initial recognition of goodwill. In addition, no deferred tax assets or liabilities arerecognized with respect to the initial recognition of an asset or liability in a transaction which is not a business combination and affects neither
accounting profit nor taxable profit.
Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, joint operations, joint
ventures, and associates, except where the Group is able to control the timing of the reversal of the temporary difference and it is probablethat the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable thatsufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are
re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow thedeferred tax asset to be recovered. Deferred tax assets other than tax loss carryforwards are analyzed on a case by case basis, taking into
account all relevant facts and circumstances. For example, a zero taxable profit, after deducting the amounts paid to retirees under a defined
benefit plan and for which a deductible temporary difference existed, can justify the recognition of the underlying deferred tax assets.
Recognition of deferred tax assets for tax loss carryforwards requires a positive taxable profit during the year that enables the utilization of
tax losses that originated in the past. Because of uncertainties inherent to predicting such positive taxable profit, recognition of deferred tax
assets from tax loss carryforwards is based on a case by case analysis, which is usually based on five-year profit forecasts, except with respect
to any financial company for which ten-year financial profit forecasts are considered highly predictable and are consequently used.
The corporate tax reporting team, which monitors the Group deferred tax positions, is involved in assessing deferred tax assets.
Further details are provided in note F7.C.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or
the asset is realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group
expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Current tax assets and liabilities are offset when there is a legally enforceable right to set off the recognized amounts and when the Groupintends to settle its current tax assets and liabilities on a net basis.

278

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities
and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities
on a net basis.

Current and deferred taxes for the period
Current and deferred taxes for the period are recognized as an expense or income in profit or loss, except when they relate to items thatare recognized outside profit or loss (whether in other comprehensive income or directly in equity), in which case the tax is also recognizedoutside profit or loss, or when they arise from the initial accounting for a business combination. In the case of a business combination, the tax
effect is taken into account in the accounting for the business combination.
Exception to the above, as from January 1, 2019, the Group applies the amendments to IAS 12, that apply to the income tax consequences ofdividends recognized on or after the beginning of the earliest comparative period, i.e. January 1, 2018. In 2018, the income tax consequencesof the coupons on perpetual hybrid bonds classified as equity were recognized in equity. As a result of the adoption of the amendment,
those income tax consequences are now recognized in profit or loss.

F7.A.

Income taxes

The income taxes (net expense) recognized in the consolidated income statement decreased by €29 million in 2023 compared to 2022. The income
taxes (net expense) recognized in other comprehensive income decreased by €58 million in 2023 compared to 2022, mainly due to the movement in
employee benefit provisions (see note F30 Employee benefits) and due to the variation of the CO2 emission rights contracts (see note F32 Financial
instruments and Financial risk management).
In €million

2023

2022

Current taxes related to current year

-180

-107

Provisions for tax litigations

1

11

Other current taxes related to prior years

54

Current taxes

-174

-92

Changes in unrecognized deferred tax assets (a)

-91

-7

Deferred tax income on amortization of PPA step-ups

2

3

Deferred tax impact of changes in the nominal tax rates

2

4

Deferred taxes related to prior years-5

3

Other deferred taxes (b)

59

-138

Deferred taxes

-34

-135

Income taxes recognized in the consolidated income statement

-208

-228

2

-66

Income taxes on items recognized in other comprehensive income

The current taxes (net expense) related to the current year increased by €(73) million due to higher taxable profits in countries with high effective tax
rates (e.g. Italy, Belgium, and Germany) slightly offset by the reversal of provisions for tax litigation.
(a)In 2023, the change in unrecognized deferred tax assets amounted to €91 million resulting mainly from a revision of the forecasted taxable results
mainly due to the exit from the tax unit in France as a consequence of the Partial Demerger of the Group.
(b) In 2023, the other deferred taxes (€63 million) mainly relate to provisions other than employee benefits and tangible assets.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT

279

Developments in International Taxation
Solvay SA/NV is closely monitoring the laws which the various jurisdictions are adopting following the Organization for Economic Co-operation
and Development (OECD) and EU-initiatives regarding the Pillar Two Global Minimum Tax of 15% and the potential impact thereof. A preliminary
assessment of this potential impact, which has been conducted with support of an independent advisor using financial information of financial year
2022 of Solvay SA/NV (prior to the partial demerger of December 8, 2023), indicated that no material tax impact is reasonably to be expected.
Because of the complexity of the Pillar Two rules, the continued further guidance and supplementation of the legislation and the complexity of
Solvay’s partial demerger from both a financial and transactional perspective, the financial year 2023 is considered not a suitable reference and theimpact assessment will continue in the course of 2024.
Solvay SA/NV will continue to conduct tax technical analyses and further develop its tools and processes over the next few months and continue to
involve, inform and educate key stakeholders, both internal and external.

F7.B. Reconciliation of the income tax expense
The effective income tax expense has been reconciled with the theoretical tax expense obtained by applying to the pre-tax profit of each Group
entity the nominal tax rate prevailing in the country in which it operates.
2023

2022

Profit/(Loss) for the year before taxes

180

1,132

Earnings from associates and joint ventures

53

153

Profit/(Loss) for the year before taxes excluding earnings from associates and joint ventures

127

979

Total tax income/(expense) of the Group entities computed on the basis of the respective local nominal
rates

-27

-222

Weighted average nominal rate

21%

25%

Withholding taxes

-31

-21

2

4

Changes in unrecognized deferred tax assets

-91

-7

Tax effect of permanent differences

-36

17

Gain and losses with no tax expense and income

-20

-12

Provisions for tax litigations

1

11

Other tax effect of current and deferred tax adjustments related to prior years

07

Tax effect on distribution of dividends-4-4Effective tax income/(expense)

-208

-227

Effective tax rate

116%

20%

In €million

Reconciliation of the tax income/(expense)

Tax effect of changes in nominal tax rates

The weighted average nominal rate decreased from 2022 (25%) to 2023 (21%).
The higher effective tax rate is mainly due to the changes in recognition of deferred tax assets in France and the impact of the RusVinyl disinvestment.

280

F7.C.

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Deferred taxes in the consolidated statement of financial position

2023 – In €million

Openingbalance

Recognized
in incomestatement

Recognizedin other comprehensive
incomeExchangerateeffectEmployee benefits obligations

234

-90

-47

Provisions other than employee
benefits

175

Property, plant and equipment

Other acquisition /disposal

Other

PartialDemerger

Closingbalance

0

-1

1

98

24

1

-1

-164

35

-234

34

11

145

-44

Intangible assets

-196

28

-3

178

7

Right-of-use assets

-81

4

1

35

-40

Lease liabilities

82

-4

-1

-34

43

Goodwill

58

0

-1

-57

0

Other temporary differences-66

2

Tax losses

375

Tax credits

Temporary differences

49

0

4

-3

-14

-17

0

-1

-257

99

27

-16

0

-9

2

Total (net amount)

374

-34

2

-166

186

2022 – In €million

Openingbalance

Recognized
in incomestatement

Recognizedin other comprehensive
incomeExchange
rate effectTransfer
to assetsheld forsale

Closingbalance

Employee benefits obligations

289

7

-68

5

1

234

Provisions other than employee benefits

208

-42

9

0

0

175

Property, plant and equipment

-225

7

-15

0

-1

-234

Intangible assets

-274

96

-17

0

Right-of-use assets

-74

-4

-2

0

Lease liabilities

75

4

3

Goodwill

3

56

-1

Other temporary differences

20

-84

Tax losses

263

Tax credits
Total (net amount)

8

2

Other
acquisition/ disposal

Temporary differences

1

0

109

3

0

33

-7

1

318

141

-18

0

-81

0

82
58

-3

-66

-196

0

-66
375
27

0

0

374

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

281

The significant components of the deferred tax assets and deferred tax liabilities at the end of 2023 and 2022 are as follows:2023

In €million

Deferred tax
assetsDeferred tax
liabilities

Net deferredtaxes before
write-down

Write-down ofdeferred tax
assets (unrecognized portion)

Net deferredtaxes

Employee benefits obligations

208

-25

182

-84

98

Provisions other than employee benefits

165

-57

108

-73

35

Property, plant and equipment

56

-108

-52

8

-44

Intangible assets

14

-16

-1

8

7

Right-of-use assets

-6

-42

-47

7

-40

Lease liabilities

52

-1

51

-8

43

Goodwill

0

0

0

0

0

Other

200

-211

-10

-3

-14

Temporary differences

689

-459

230

-145

85

Operational losses

218

0

218

-165

53

Non-operational losses

58

0

58

-13

46

Tax losses

276

0

276

-178

99

2

0

2

0

2

Netting deferred taxes

-328

328

0

0

0

Deferred taxes

639

-131

508

-322

186

Tax credits carried forward2022

In €million

Deferred tax
assetsDeferred tax
liabilities

Net deferredtaxes before
write-down

Write-down ofdeferred tax
assets (unrecognized portion)

Net deferredtaxes

Employee benefits obligations

328

-94

234

0

234

Provisions other than employee benefits

241

-66

174

1

175

Property, plant and equipment

69

-275

-207

-28

-234

Intangible assets

261

-381

-120

-76

-196

Right-of-use assets

0

-82

-81

0

-81

Lease liabilities

80

2

82

0

82

Goodwill

58

0

58

0

58

Other

175

-238

-63

-3

-66

Temporary differences

1,211-1,133

76

-105

-29

Operational losses

1,479

0

1,479

-1,187

292

308

0

308

-225

83

1,787

0

1,787

-1,412

375

81

1

81

-55

27

Netting deferred taxes

-575

575

0

0

0

Deferred taxes

2,504

-557

1,945

-1,572374

Non-operational losses
Tax losses
Tax credits carried forward

282

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3The evolution of the net deferred taxes between 2023 and 2022 mainly relates to the following items:· The total net deferred taxes of €186 million at year-end 2023 are €188 million lower than in 2022.
· The main changes in 2023 are related to the following items:· Deferred taxes on employee benefit obligations: €98 million at year-end 2023 - €136 million lower than in 2022, explained by the non-recognitionof deferred taxes in France (€(48) million in income statement and €(28) million in other comprehensive income) and by the decrease of postemployment benefits obligations mainly in France.
· Deferred taxes on provisions other than employee benefits: €35 million at year-end 2023 - €140 million lower than in 2022; mainly due to the Partial
Demerger (€164 million)· Deferred taxes on intangible assets: €7 million at year-end 2023 - €203 million lower than in 2022. The decrease in these liabilities in 2023 is mainly
due to the Partial Demerger (€178 million)· deferred taxes on operational and non-operational tax losses: €99 million at year-end 2023 - €276 million lower than in 2022 mainly due to thePartial Demerger (€257 million) and less recognition in Belgium (€6 million).
· Deferred tax assets on other temporary differences: €(14) million at year-end 2023 - €52 million lower than in 2022 mainly due to the derecognitionof the CO2 emission rights contracts in several legal entities.
· Deferred tax liabilities on unremitted earnings were recognized in the Other Temporary differences for €(16) million at year-end 2023 (€(56) million
at year-end 2022). The amounts of deferred tax liabilities not recognized, provided that the Group controls the timing of the reversal of thetemporary differences and it is probable that they will not reverse in the foreseeable future were €36 million at year-end 2023 (€32 million at yearend 2022).
Recognized deferred taxes for which utilization depends on future taxable profits in excess of the profit arising from the reversal of existing taxable
temporary differences within entities that have suffered a tax loss in either current or preceding years in the related tax jurisdiction, amount to€187 million (€134 million in 2022). This recognition is supported by favorable expectations of future taxable profits.

F7.D. Other information
For the majority of the Group’s tax loss carryforwards, no deferred tax assets have been recognized. The unrecognized tax losses are mainly locatedin countries where they can be carried forward indefinitely.
The tax losses carried forward generating deferred tax assets are given below by expiration date.
2023

2022

Within 1 year

130Within 2 years

7

1Within 3 years

2

1

Within 4 years

00Within 5 or more years

53

12

No time limit

316

1,402

Total of losses carried forward which have generated recognized deferred tax assets

391

1,417

Tax losses carried forward for which deferred tax assets were written-down

1,520

5,203

Total of tax losses carried forward

1,911

6,620

In €million

The tax losses carried forward of €391 million (€1,417 million in 2022) have generated deferred tax assets for €100 million (€375 million in 2022).
The decrease of tax losses carried forward which have generated a reduction of tax assets, is largely due to the Partial Demerger of the GroupA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT

283

NOTE F8DISCONTINUED OPERATIONS AND PARTIAL DEMERGER

Accounting policy
A discontinued operation is a component of the Group which the Group has disposed of or which is classified as held for sale, and which:· represents a separate major line of business or geographical area of operations;· is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or· is a subsidiary acquired exclusively with a view to resale.
A component of the Group consists of operations and cash flows, which can be clearly distinguished operationally and for financial reporting
purposes, from the rest of the Group.
In the consolidated statement of comprehensive income, the consolidated statement of cash flows, and disclosures, discontinued operations
are restated for prior periods presented.
In accordance with IFRIC 17 Distribution of Non-cash Assets to Owners, and IFRS 10 Consolidated Financial Statements – chapter on lossof control – Solvay measures the profit on distribution in the form of demerger as the excess amount of the fair value of the distributed net
assets over the then-carrying value of the net assets of the distributed businesses, adjusted for the related NCI.
The recognition of the fair value of the distributed net assets may require the use of valuation techniques. Solvay uses the observable values
as input for such valuation techniques.
Solvay applies IFRS 5 requirements after intercompany elimination.

F8.A. Partial Demerger of the Specialty Businesses
On March 15, 2022, the Group announced that it was reviewing plans to separate into two independent, publicly traded companies. Effective
December 9, 2023, at 00:00 a.m. CET, the Group’s Materials segment, and the majority of the Group’s Solutions segment (i.e., Novecare, Technology
Solutions, Aroma Performance, and Oil and Gas) (together the “Specialty Businesses”) were separated from Solvay SA/NV by way of a partial
demerger of Solvay SA/NV under Belgian law (the “Partial Demerger”), whereby the shares and other interests held by Solvay SA/NV in the legal
entities operating the Specialty Businesses, Solvay SA/NV’s rights and obligations under the agreements entered into with those legal entities, aswell as certain other assets and liabilities were contributed to Syensqo SA/NV.
The Partial Demerger had not satisfied the criteria of discontinued operations until the decision of the extraordinary shareholders’ meeting held on
December 8, 2023, to approve the Partial Demerger. In consequence, the Specialty Businesses were not presented as discontinued operations in
the Group’s 2022 annual integrated report. As mentioned above, the effective date of the Partial Demerger was December 9, 2023.
Discontinued operations include the operational results of the Specialty Businesses, mentioned above, certain corporate activities attributable tothese businesses business prior to the Partial Demerger, and the gain on non-cash distribution of Specialty Businesses to Syensqo shareholders.
The operations of Specialty Businesses are presented as discontinued operations in these financial statements.
The energy and CO2 contracts related to the Specialty Businesses were transferred during the Partial Demerger.
Solvay SA/NV and Syensqo SA/NV entered into a Separation Agreement on December 4, 2023, to govern (i) certain practical aspects of theseparation of the two groups, as well as the (ii) creation of cross indemnities to adjust, where necessary, the allocation of certain liabilities resulting
from the legal structuring, and (iii) the allocation of certain liabilities, including environmental liabilities. Please refer to “Main Events and Changes
in the Consolidation Scope” for further details on the “Separation Agreement” and “Liability management.”
The Partial Demerger impacted the market value of all of the issued and outstanding shares of Solvay SA and the options on these shares. This
includes the shares held by Solvay Stock Option Management SRL (“SSOM"), a wholly owned subsidiary of Solvay, for the purposes of hedging
its exposure under LTI plans. For each share of Solvay SA/NV held by SSOM upon completion of the Partial Demerger, SSOM received one newly
issued share of Syensqo SA/NV; the newly issued Syensqo shares were classified as investments at fair value through profit or loss and reclassified
out of equity. The details on treasury shares and equity investments at fair value through profit or loss are provided in Notes F30 Equity, andF32 Financial Instruments.

284

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3The profit from discontinued operations in the consolidated income statement is analyzed as follows (2023 – from January 1, 2023, to December 8,2023):In €million

2023

2022

Sales

6,656

8,092

167

205

— of which net sales

6,489

7,887

Cost of goods sold

-4,357-5,489Gross margin

2,299

2,604

Commercial costs

-272

-222

Administrative costs

-466

-617

Research and development costs

-318

-312

Other operating gains and (losses)

-132

-152

Earnings from associates and joint ventures

18

18

Results from portfolio management and major restructuring

-53

-37

Results from legacy remediation and major litigations

-274

-182

EBIT

802

1,100

Cost of borrowings

-54

-63

Interest on loans and short term deposits

14

1

Other gains and (losses) on net indebtedness

-22

-24

Cost of discounting provisions

-20

18

3

-13

Profit/(loss) for the year before taxes

723

1,019

Income taxes

-242

11

Profit for the year from discontinued operations

481

1,030

Gain on Partial Demerger according to IFRIC 17

1,651

Profit for the year from discontinued operations with the gain on the Partial Demerger

2,132— of which revenue from non-core activities

Result from equity instruments measured at fair value

The gain on Partial Demerger is analyzed below.

1,030

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT

285

F8.B. Partial Demerger - other related information
Net assets of the demerged Specialty Businesses:
In €million

Upon completion of the Partial Demerger (Dec. 9, 2023)

ASSETS
Intangible assets

1,678

Goodwill

2,637

Property, plant and equipment

3,481

Right-of-use assets

189

Equity instruments measured at fair value

79

Investments in associates and joint ventures

202

Other investments

4

Deferred tax assets

884

Loans and other assets

178

Other financial instruments

30

Non-current assets

9,362

Inventories

1,256

Trade receivables

1,083

Income tax receivables

55

Other financial instruments

56

Other receivables

320

Cash and cash equivalents

1,143

Current assets

3,913

Total assets

13,274

LIABILITIESProvisions for employee benefits

333

Other provisions

303

Deferred tax liabilities

718

Financial debt

816

Other liabilities

22

Non-current liabilities

2,192

Other provisions

315

Financial debt

1,472

Trade payables

923

Income tax payables

52

Other liabilities

401

Current liabilities

3,163

Total liabilities

5,355

Net assets directly associated with disposal group

7,920

286

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Gain on Partial Demerger according to IFRIC 17:
In €million

Fair value of the distribution

9,546

Net assets-7,920

Other adjustments

7

Non-controlling interest associated with the net assets of Specialty
Businesses

17

Gain on the Partial Demerger

1,651

The fair value of the distribution was measured by reference to the average of the closing price of the first 30 days of trading activity of Syensqo
shares, following the Partial Demerger. This being a fair value measured with observable inputs, was considered to be representative of the fair valueof the assets and liabilities effected by the demerger at the distribution date.

F8.C. Other information relevant to discontinued operations
EdisonIn February 2023, Solvay Specialty Polymers Italy S.p.A., a former subsidiary of Solvay transferred to Syensqo as part of the Partial Demerger,
received compensation of €91.6 million after decisions by the International Chamber of Commerce's Arbitration Court, the Swiss Supreme Court,
and the Milan Court of Appeal, all of which ruled in favor of Solvay Specialty Polymers Italy S.p.A. The compensation relates to losses, damages
and costs incurred up to the end of 2016 in relation to certain environmental issues at the Spinetta Marengo and Bussi sites, previously owned andoperated by (Mont)Edison S.p.A. and Ausimont S.p.A. The compensation received in 2023 was included within discontinued operations in theConsolidated Income Statement.

Environmental liabilities
On June 28, 2023, Solvay Specialty Polymers USA, LLC, a former subsidiary of Solvay transferred to Syensqo as part of the Partial Demerger, and the
New Jersey Department of Environmental Protection (NJDEP) announced they reached a settlement resolving certain PFAS-related claims in New
Jersey. As a result of this settlement, Solvay increased its existing provision by around US$250 million as of June 30, 2023, with US$175 million cashout in 2024 and the balance over a 30-year period. There were no further changes prior to the Partial Demerger. The provision was derecognized asa part of the Partial Demerger and transferred to Syensqo as from December 9, 2023.

NOTE F9EARNINGS PER SHARE

Accounting policy
The basic earnings per share are obtained by dividing profit for the year by the weighted average number of ordinary shares outstanding
during the reporting period. The weighted average number of ordinary shares excludes the treasury shares held by the Group over thereporting period.
The diluted earnings per share are obtained by dividing profit for the year, adjusted for the effects of dilutive potential ordinary shares, by
the weighted average number of ordinary shares, also adjusted by the number of dilutive potential ordinary shares attached to the issuanceof share options.
The number of dilutive potential ordinary shares is calculated for the weighted average number of share options outstanding during thereporting period as the difference between the average market price of ordinary shares during the reporting period and the exercise priceof the share option. Share options have a dilutive effect only when the average market price is above the exercise price (share options are“in the money”).
For the purpose of calculating diluted earnings per share, there were no adjusting elements to the profit for the year (Solvay share).
Basic and diluted amounts per share for discontinued operations are presented in the consolidated income statement.

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Number of shares (in units)
Weighted average number of ordinary shares (basic)
Dilution effectWeighted average number of ordinary shares (diluted)

287

2023

2022

104,160,774

103,744,461

1,288,845

398,745

105,449,619

104,143,206

2023

2022

Basic

Diluted

Basic

Diluted

2,092,753

2,092,753

1,905,417

1,905,417-37,172-37,172

890,040

890,040

Earnings per share (including discontinued operations) (in €)

20.09

19.85

18.37

18.30

Earnings per share (excluding discontinued operations) (in €)

-0.36

-0.35

8.58

8.55

Profit/(loss) for the year (Solvay share) including discontinued
operations (in €thousands)
Profit/(loss) for the year (Solvay share) excluding
discontinued operations (in €thousands)

The 2022 figures were restated.

More information regarding shares, including dividend per share, can be found in the Business Review section.
The average market price during 2023 was €26.93 per share. In connection with the listing of Syensqo SA/NV following completion of the Partial
Demerger, Euronext Brussels restated the quotation data for 2023. For the purpose of calculating the average, we based on this restated data.
The following share options were out of the money, and therefore antidilutive for the period presented, but could potentially dilute basic earnings
per share in the future (see note F29 Share-based payments):

Antidilutive share options per plans

Date granted

Exercise
price (in €)Number of shareoptions granted

Number of share options
outstanding

2016

February 24, 2016

13.11

696,144

168,4292017

February 23, 201719.19

316,935

216,7092018 – 1

February 27, 2018

19.51

400,704

260,6112018 – 2

July 30, 2018

18.69

72,07853,6402019

February 27, 2019

16.74

438,107

175,1092020

February 26, 2020

16.52

405,670

171,4272021

February 24, 2021

16.49

265,433

105,5942022

September 28, 2022

84.34

386,867

102,336

2,981,938

1,253,855

Total

The 2022 plan has not been split and the underlying is a combined instrument of Solvay SA/NV and Syensqo SA/NV shares. Consequently, the strikeprice (€84.34) has not been adjusted.

288

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

NOTES TO THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

NOTE F10CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Accounting policy
In accordance with IAS 1 Presentation of Financial Statements, the Group elected to present two statements, i.e. a consolidated income
statement immediately followed by a consolidated statement of comprehensive income.
The components of other comprehensive income (OCI) are presented before related tax effects with one amount shown for the aggregate
amount of income tax relating to those components. Tax impacts are further disclosed in this note.

Presentation of the tax effect relating to each item of other comprehensive income
Note: the below table presents the total other comprehensive income items for the aggregate of the shares of Solvay and the non-controllinginterests.
2023
Before-tax
amountTax expense(-)/income

Net of tax
amountEffective portion of gains and losses on hedging instruments in a cash flow hedge

-208

49

-159

Recycling to the income statement-20

Gains and losses on hedging instruments in a cash flow hedge (see note F32)

-228

Currency translation differences arising during the year

-423

-423

Recycling of currency translations differences relating to foreign operations disposed ofin the year

287

287

Other movement of currency translation differences (NCI) relating to foreign operations

-1

-1

-138

-138

Currency translation differences arising during the year

23

23

Recycling of currency translations differences relating to foreign operations disposed ofin the year

179

179

Share of other comprehensive income of associates and joint ventures

202

202

Recyclable components

-164

49

-115

0

0

0

Remeasurements of the net defined benefit liability (see notes F7 & F30)

-30

-47

-77

Non-recyclable components

-30

-47

-77

Other comprehensive income/(loss)

-194

2

-192

In €million

Currency translation differences – Subsidiaries and joint operations

Gains and losses on equity instruments measured at fair value through othercomprehensive income

-20
49

-179

In 2023, the recycling of the currency translation differences was mainly due to the Partial Demerger €(292) million and due to derecognition of
RusVinyl €(169) million.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT

289

2022
Before-tax
amountTax expense(-)/income

Net of tax
amountEffective portion of gains and losses on hedging instruments in a cash flow hedge

305

-7

298

Recycling to the income statement-226

In €million-226

Gains and losses on hedging instruments in a cash flow hedge (see note F32)

79

-7

72

Currency translation differences arising during the year

285

285

Recycling of currency translations differences relating to foreign operations disposed ofin the year

-1

-1

Other movement of currency translation differences (NCI) relating to foreign operations

0

0

Currency translation differences – Subsidiaries and joint operations

284

284

Share of other comprehensive income of associates and joint ventures

22

22

Recyclable components

385

-7

377

Gains and losses on equity instruments measured at fair value through othercomprehensive income

-25

6

-19

Remeasurements of the net defined benefit liability (see note F30)

155

-66

89

Non-recyclable components

130

-60

70

Other comprehensive income/(loss)

515

-67

447

Currency translation differences

Accounting policy
For the purpose of presenting consolidated financial statements at the end of each reporting period, the assets and liabilities of the Group’s
foreign operations are expressed in euros using closing rates. Income and expense items are translated at the average exchange rates for theperiod except when the impact of applying the average rate is materially different from applying the spot rate at the respective transactions’dates, in which case the latter is applied. Exchange differences arising, if any, are recognized in other comprehensive income as “currencytranslation differences”.
Currency translation differences are reclassified from equity to profit or loss, on:· A disposal of the Group’s entire interest in a foreign operation. In this case, all of the accumulated exchange differences in respect of that
operation attributable to the Group are reclassified to profit or loss. Any exchange differences that have previously been attributed to noncontrolling interests are derecognized, but they are not reclassified to profit or loss.

At the end of 2023, the carrying amount of Currency Translation consists of €(288) million on BRL, €(211) linked to the conversion of Member States’
currencies to Euro, and €256 million on USD.

290

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS(CONTINUING AND DISCONTINUED OPERATIONS)NOTE F11
DEPRECIATION, AMORTIZATION AND IMPAIRMENTS
The depreciation, amortization and impairment losses (reversal) amount to €994 million in 2023 (€923 million in 2022), of which €500 million related
to discontinued operations (€622 million in 2022).
The table below presents the amounts of the total depreciation, amortization and impairment losses (reversals) of continuing operations includedin the various headings of the Consolidated Statements of Income.
2023

2022

Cost of goods sold

269

264

Administrative costs

37

42

Research and development costs

12

10

Other operating gains and (losses)

1013— Of which PPA (see Note F4)78

Total depreciation and amortization

328

329

Goodwill Impairment

38

0

Other net Impairment

57

-28

Total depreciation, amortization and impairment losses (reversal)

423

301

In €million

The comparative figures for 2022 are restated.

In 2023, the impairments include the €38 million of impaired Energy CGU’s goodwill and an impairment of €48 million of underperforming site within
Special Chem CGU.

NOTE F12
OTHER NON-OPERATING AND NON-CASH ITEMSThe other non-operating and non-cash items for 2023 of €(1,481) million mainly comprise the result linked to the Partial Demerger €(1,651) million(see Note F8 for the details), reduced by recycling of CTA of RusVinyl €176 million.
In 2022, (€43) million mainly relate to non-cash capital gains and other results for M&A deals.

NOTE F13
INCOME TAXES IN THE STATEMENT OF CASH FLOWS
Income tax expense in 2023 amounts to €450 million (€217 million in 2022).
Income tax paid in 2023 amounts to €434 million (€305 million in 2022). The income tax paid has increased compared to previous years due toincreased profits mainly in China, the US and Italy.
The major components of Income taxes are discussed in note F7 income taxes in income statement and statement of financial position.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT

291

NOTE F14
CHANGES IN WORKING CAPITAL
In €million

2023

2022

Inventories

215

-300

Trade receivables

122

-193

Trade payables

-495

115

Other receivables/payables

79

-197

Changes in working capital

-78

-576

Of which discontinued operations

-55

-268

The decrease in trade payables in 2023 results mainly from lower energy prices and the process of the Partial Demerger.

NOTE F15
ADDITIONS, REVERSALS AND USE OF PROVISIONSIn €million

2023

2022

Additions and reversal of employee benefits and other provisions

644

336

— Employee benefits

44

63— Restructuring

104

32

— Environment

346

177

Payments related to employee benefits and use of provisions

-304

-328

— Employee benefits

-85

-101

— Restructuring

-92

-106

— Environment

-72

-90

Use of provisions for additional voluntary contributions(pension plans)

-116

-155

Of which:

Of which:

See note F31 for more information.

292

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

NOTE F16
CASH FLOWS FROM INVESTING ACTIVITIES – ACQUISITION/DISPOSAL OF ASSETS AND INVESTMENTS
The cash-flows in the table below present both continuing and discontinued operations.
2023 – In €million
Investments

Acquisitions

Disposals

Total

-12

-718

-730

433

433

-1,151-1,151— Subsidiaries— Cash in Partial Demerger— Other-12-12Property, plant and equipment/Intangible assets-1,0637-1,057

Total-1,075-711-1,786

Acquisitions

Disposals

Total

-14

95

81

94

95

2022 – In €million
Total investments— Subsidiaries— Other-14-14

Property, plant and equipment/Intangible assets

-909

21

-888

Total

-923

116

-807

2023
In 2023, the amounts related to investment in subsidiaries related to the sale of RusVinyl. In regard to cash in the Partial Demerger, this is a result of
the cash position in the demerged subsidiaries of Syensqo SA/NV.
The acquisition includes the following main projects:· Soda Ash & Derivatives: Soda ash capacity increase in Green River (USA)· Soda Ash & Derivatives: Coal phase-out in Green River (USA)· Peroxides: Hydrogen Peroxide capacity increase in Antwerp (Belgium)· Silica: New electric furnace in Collonges (France) to reduce CO2 emissions· Specialty Polymers: Polyvinylidene Fluoride (PVDF) capacity increase in Tavaux (France)· Specialty Polymers: DCDPS monomer capacity increase in Augusta (USA)· Specialty Polymers: Udel polysulfone capacity increase in Marietta (USA)· Specialty Polymers: Compounding capacity increase at Changshu (PRC)· Specialty Polymers: Waste water treatment units at Tavaux (France) and Changshu (PRC)· Novecare: internalization of IRIS intermediate chemical production in Melle (France)· Aroma performance: internalization of natural vanillin fermentation (Portugal) and purification (France)· Technology Solutions: Aldoxime capacity increase in Mount Pleasant (USA)· O&G: Friction reducers production capacity in West Texas (USA)2022
The other acquisitions (€(14) million) mainly relate to several investments of the Corporate Venturing portfolio (New Business Development).
The disposal of subsidiaries (€95 million) mainly relates to the proceeds after taxes related to the final price adjustments for the disposal of theBarium Strontium business and the joint venture with Chemicals Products Corporation, the Polyamide business and the disposal of the Novecare
Alkoxylation plant in Singapore.
The acquisition of property, plant and equipment and intangible assets (€(909) million) includes the following main projects:· Specialty Polymers: Polyvinylidene Fluoride (PVDF) capacity increase in Tavaux (France) and Changshu (PRC)· Soda Ash & Derivatives: Soda ash capacity increase in Green River (USA)· Novecare: internalization of IRIS intermediate chemical production in Melle (France)· Technology Solutions: Aldoxime capacity increase in Mount Pleasant (USA)· Aroma performance: internalization of natural vanillin purification in Saint Fons (France)· Specialty Polymers: DCDPS monomer capacity increase in Augusta (USA)· Specialty Polymers: Udel polysulfone capacity increase in Marietta (USA)· Soda Ash & Derivatives: methane emissions abatement in Green River (USA)FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

293

NOTE F17
OTHER CASH FLOWS FROM FINANCING ACTIVITIESThe €(337) millions of other cash flows from financing activities in 2023 (€112 million in 2022) mainly relate to margin calls on hedging instruments aspart of Energy Services’ activities for €(317) million (€128 million in 2022).
For trading in futures of different commodities (CO2, power, gas, coal), Energy Services uses brokers. These deals are subject to margin calls. To
cover the credit risk of the counterparty, brokers pay a margin call to Solvay in case the instrument is in the money for Solvay. If the instrument isout of the money for Solvay, Solvay pays a margin call to the brokers. The margin calls are presented as part of financial debt (see note F33 Net
indebtedness). Cash flows from margin calls are recognized as financing cash flows that fluctuate with the fair value of the instrument. The actual
settlement of these commodity derivatives is net of margin calls and the gross amount (including margin calls that are reclassified from financing
cash flows) is recognized in operating cash flows.

NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITIONNOTE F18
INTANGIBLE ASSETS

Accounting policy
An intangible asset is an identifiable non-monetary asset without physical substance. It is identifiable when it is separable, i.e. Is capable ofbeing separated or divided from the Group, or when it arises from contractual or other legal rights. An intangible asset shall be recognized
if, and only if:· (a) it is probable that the expected future economic benefits that are attributable to the asset will flow to the Group; and· (b) the cost of the asset can be measured reliably.
Intangible assets acquired or developed internally are initially measured at cost. The cost of an acquired intangible asset comprises itspurchase price, import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, and any directly attributable
cost of preparing the asset for its intended use. Subsequent expenditure on intangible assets is capitalized only if it is probable that it will
increase the future economic benefits associated with the specific asset. Other expenditure is expensed as incurred.
After initial recognition, intangible assets are measured at cost less accumulated amortization and impairment losses, if any.
Intangible assets are amortized on a straight-line basis over their estimated useful lives, which do not exceed the contractual period, if any.
The estimated useful lives, residual values and amortization methods are reviewed at each year-end, and any changes in estimates areaccounted for prospectively.
Patents and trademarks

2-20

years

Software

3-5

years

Development expenditures

2-5

years

Customer relationships

5-29

years

Other intangible assets – Technologies

5-20

years

Amortization expense is included in the consolidated income statement within the cost of goods sold, administrative costs, research anddevelopment costs and other operating gains and losses.
The asset is tested for impairment if (a) there is a trigger for impairment, and (b) annually for projects under development (see note F23
Impairment).

294

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3Intangible assets are derecognized from the consolidated statement of financial position on disposal or when no future economic benefits
are expected from their use or disposal. The gain or loss arising from derecognition of an intangible asset is recognized in profit or loss at
the moment of derecognition.

Research and development costs
Research costs are expensed in the period in which they are incurred.
Development costs are capitalized if, and only if, all the following conditions are fulfilled:· the cost of the asset can be reliably measured;· the technical feasibility of the product has been demonstrated;· the product or process will be placed on the market or used internally;· the assets will generate future economic benefits (a potential market exists for the product or, where it is to be used internally, its future
utility has been demonstrated);· the technical, financial and other resources required to complete the project are available.
Development costs comprise employee expenses, the cost of materials and services directly attributable to the projects, and an appropriate
share of directly attributable fixed costs including, and where applicable, borrowing costs. The intangible assets are amortized as from themoment they are available for use, i.e. When they are in the location and condition necessary for them to be capable of operating in themanner intended by management. Development costs, which do not satisfy the above conditions are expensed as incurred.

Patents, trademarks and customer relationships
Those intangible assets have mainly been acquired through business combinations. Customer relationships consist of customer lists.

Other intangible assets
Other intangible assets mainly include technology acquired separately or in a business combination.

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

295

In the table below, additions and depreciation expenses include the items of Specialty Businesses until the Partial Demerger.
Development
costs

Patents andtrademarks

Customer
relationships

Otherintangible
assets

Total

December 31, 2021

517

1,686

1,973

739

4,914

Additions

67

3

24

94

Disposals and closures

-22

-16

-5

-43

Increase through business combinations

0

0

0

0

Currency translation differences

7

60

22

183

Other

7

11

-15

3

December 31, 2022

577

1,744

765

5,152

Additions

71

1

33

105

Disposals and closures

-66

-74

-100

-239

Increase through business combinations

0

0

0

0

Currency translation differences

-3

-25

-37

-14

-80

-482

-1,079-1,781-582-3,924

Other

1

5

-9

-3

December 31, 2023

98

572

248

92

1,010

December 31, 2021

-233

-1,047-941-590-2,812

Amortization

-63

-97

-90

-14

-265

Impairment

0

0

0

0

0

Reversal of impairment

0

0

8

8

Disposals and closures

22

16

5

43

Currency translation differences

-2

-26

-21

-78

Other

0

0

0

0

December 31, 2022

-277

-1,155-1,061-611-3,104

Amortization

-54

-72

-85

-17

-228

Impairment

0

0

0

0

0

Reversal of impairment

0

0

0

0

Disposals and closures

61

74

100

235

Currency translation differences

1

13

16

13

43

223

651

887

485

2,246

0

24

-25

-1

-45

-466

-244

-55

-809

December 31, 2021

283

638

1,031

149

2,100

December 31, 2022

300

589

1,005

153

2,048

December 31, 2023

52

107

5

37

201

In €million

Gross carrying amountPartial Demerger

93

2,066

Accumulated amortization

Partial Demerger
Other
December 31, 2023

-29

Net carrying amountOn December 31, 2023, intangibles mainly relate to the intangibles acquired through the acquisitions of Rhodia.

296

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

NOTE F19
Goodwill and business combinations

Accounting policy
Goodwill
Goodwill arising in a business combination is recognized as an asset at the date that control is obtained (the acquisition date). Goodwill ismeasured as the excess of the sum of:· (a) the consideration transferred;· (b) the amount of any non-controlling interests in the acquiree; and· (c) in a business combination achieved in stages, the acquisition-date fair value of the previously held equity interest in the acquiree, overthe share acquired by the Group in the fair value of the entity’s identifiable net assets at the acquisition date.
Goodwill is not amortized but is tested for impairment on an annual basis, and more frequently if there are any impairment triggers identified.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (or groups of cash-generating
units) in accordance with IAS 36 Impairment of Assets.
A cash-generating unit (CGU) is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash
inflows from other group(s) of assets.
These tests consist of comparing the carrying amount of the assets or (groups of) CGUs with their recoverable amount. The recoverable
amount of an asset or a (group of) CGU(s) is the higher of its fair value less costs to sell and its value in use. If the recoverable amount of the
CGU is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit
and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognizedon goodwill shall not be reversed in a subsequent period.
Assets held for sale include their related goodwill.
On disposal of an operation within a CGU to which goodwill has been allocated, the goodwill associated with the operation disposed of isincluded in the determination of the profit or loss on disposal. It is measured on the basis of the relative values of the operation disposed ofand the portion of the CGU retained, unless another method better reflects the goodwill associated with the operation disposed of.

Goodwill – overview
In €million

Total

December 31, 2021

3,379

Currency translation differences

94

Disposals

0

December 31, 2022
Addition
Currency translation differences

3,472
2
-36

Disposals

0

Impairment-38

Partial Demerger
December 31, 2023

-2,637764

In 2023 and 2022, the currency translation differences mainly relate to goodwill expressed in US dollars. Most of the goodwill expressed in US dollars
are located in Specialty Businesses.
Regarding the impairment, see note F23 for more details.

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

297

Goodwill by (groups of) CGU(s)Goodwill acquired in a business combination is allocated to the CGUs or groups of CGUs that are expected to benefit from that businesscombination.
As a result of the Partial Demerger of the Specialty Business the Group realigned its Operating Segments as detailed in note F1 Revenue andSegment Information. The realignment resulted in the reallocation of segment level goodwill of €186 million (see column Transfer). The goodwill
was reallocated to the CGUs using a relative value approach (respective fair values). The reallocation did not have any significant impact on the
impairment analysis performed.

In €million

At beginningof the period

Additions

Impairment

Currencytranslationdifferences

Transfer

PartialDemergerAt theend of theperiod-341

0Operating segments – Groups of CGUs
— Materials

341— Chemicals

121

-121

— Solutions

264

-65

0
-199

0

-15

-577

0

-3

-564

0

-716

0

(Groups of) CGUs
— Composite Materials

591— Novecare

565— Technology Solutions

734

-17

— Special Chem

210

0

— Specialty Polymers

181

-1

— Soda Ash and Derivatives

162— Coatis82

82— Silica

72

72— Aroma Performance49— Energy Services

50— Hydrogen Peroxide Europe

21

17

37

— Hydrogen Peroxide Mercosul

14

14

27

— Hydrogen Peroxide Nafta

7

8

15

— Hydrogen Peroxide Asia

11

0

8

19

-35

0

Total goodwill

3,472

2

65

275
-180

75

-38

2

-38

0
237

-49

0

-12

0

-2,637764

298

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

2022
At beginning of
the period

In €million

Disposals

Currencytranslationdifferences

At the end of
the period

Operating segments – Groups of CGUs
— Materials

341

341

— Chemicals

121

121

— Solutions

264

264

(Groups of) CGUs
— Composite Materials

555

37

591

— Novecare

553

12

565

— Technology Solutions

690

43

734

— Special Chem

210

0

210

— Specialty Polymers

179

1

181

— Soda Ash and Derivatives

162

162

— Coatis82

82— Silica

72

72— Aroma Performance49

49— Energy Services

50

50— Hydrogen Peroxide Europe

21

21— Hydrogen Peroxide Mercosul

14

14— Hydrogen Peroxide Nafta

7

7— Hydrogen Peroxide Asia

11

Total goodwill

3,379

0

0

0

11

94

3,472

See note F23 Impairment.

NOTE F20
PROPERTY, PLANT AND EQUIPMENT

Accounting policy
GeneralProperty, plant and equipment are tangible items that:· are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and· are expected to be used during more than one period.
The items of property, plant and equipment owned by the Group are recognized as property, plant and equipment when the following
conditions are satisfied:· it is probable that the future economic benefits associated with the asset will flow to the Group;· the cost of the asset can be measured reliably.
Items of property, plant and equipment are initially measured at cost. The cost of an item of property, plant and equipment comprises
its purchase price and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable ofoperating in the manner intended by management. If applicable, the cost comprises borrowing costs during the construction period.
After initial recognition, items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses,
if any.

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3299

Items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives. The components of an itemof property, plant and equipment with different useful lives are depreciated separately. Land is not depreciated. The estimated useful lives,
residual values and depreciation methods are reviewed at each year end, also taking into account the potential impact of climate change
including the execution of the Solvay One Planet Strategy (see Note on Climate Change in the IFRS general accounting policies). Anychanges in estimates are accounted for prospectively.

Within Land and Buildings group— Buildings

30-40

years

3-5

years

— Machinery and equipment

10-20

years

— Transportation equipment

5-20

years

Within Fixtures and equipment group— IT equipment

Depreciation expense is included in the consolidated income statement within cost of goods sold, administrative costs, and R&D costs.
The asset is tested for impairment if there is a trigger for impairment (see note F23 Impairment).
Items of property, plant and equipment are derecognized from the consolidated statement of financial position on disposal or when no
future economic benefits are expected from their use or disposal. The gain or loss which arises from derecognition of an item of property,
plant and equipment is recognized in profit or loss at the moment of derecognition.

Subsequent expenditure
Subsequent expenditure related to items of property, plant and equipment is capitalized only if it is probable that it will increase the future
economic benefits associated with the specific asset. Other expenditure is expensed as incurred. Subsequent expenditure incurred for the
replacement of a component of an item of property, plant and equipment is only recognized as an asset when it satisfies the recognition
criteria mentioned above. The carrying amount of replaced items is derecognized.
Repair and maintenance costs are recognized in the consolidated income statement as incurred.
Regarding its industrial activity, Solvay incurs expenditure for major repairs over several years for most of its sites. The purpose of thisexpenditure is to maintain the proper working order of certain installations without altering their useful life. This expenditure is considered asa specific component of the item of property, plant and equipment and is depreciated over the period during which the economic benefits
are expected to be obtained, i.e. the major repairs’ intervals.

Dismantling and restoration costs
Dismantling and restoration costs are included in the cost of an item of property, plant and equipment if the Group has a legal or constructive
obligation to dismantle or restore. They are depreciated over the useful life of the items to which they pertain.
Generally, Solvay’s obligation to dismantle and/or restore its operating sites is only likely to arise upon the discontinuation of a site’s activities.
A provision for dismantling of discontinued sites or installations is recognized when there is a legal obligation (due to a request or injunction
from the relevant authorities), or when there is no technical alternative than to dismantle, so as to ensure the safety compliance of the
discontinued sites or installations.

300

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

In the table below, additions and depreciation expenses include the items of Specialty Businesses until the Partial Demerger.

Land andbuildings

Fixtures andequipment

Other tangible
assetsProperty, plant andequipment underconstruction

Total

2,941

10,187418

688

14,235Additions

28

103

8

715

854

Disposals and closures

In €million

Gross carrying amount
December 31, 2021

-28

-132

-19

0

-179

Increase through businesscombinations

0

0

0

0

0

Currency translation differences

44

206

8

15

273

Other

35

284

11

-385

-55

3,021

10,648425

1,033

15,128Additions

77

136

7

777

998

Disposals and closures

-23

-216

-17

-3

-258

0

1

0

0

1

-35

-126

-4

-16

-181

-1,516-5,458-186-955-8,115

68

393

20

-354

128

1,593

5,379

246

483

7,700

-1,580-7,375-337-9,291

Depreciation

-80

-464

-27

-570

Impairment

0

-6

0

-6

Reversal of impairment

8

21

0

29

Disposals and closures

26

130

19

175

Currency translation differences

-25

-151

-7

-183

December 31, 2022

Increase through businesscombinations
Currency translation differences
Partial Demerger
Other
December 31, 2023
Accumulated depreciation
December 31, 2021

Other

3

26

0

30

-1,648-7,818-351-9,816

Depreciation

-76

-459

-22

-557

Impairment

-11

-44

-2

-57

Reversal of impairment

0

0

0

0

Disposals and closures

18

214

16

249

Currency translation differences

16

87

3

105

Partial Demerger

694

3,788

153

4,634

Other

-19

-90

-5

-114

-1,027-4,323-206

0-5,556

December 31, 2021

1,361

2,813

81

688

4,943

December 31, 2022

1,373

2,830

75

1,033

5,311

December 31, 2023

566

1,056

39

483

2,144

December 31, 2022

December 31, 2023
Net carrying amountThe additions and depreciation figures include the amounts related to the Specialty Businesses until the Partial Demerger on December 8, 2023.
Please see Note F1 for the split of the capital expenditure by segments.
In 2023 and 2022, no borrowing costs were capitalized.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT

301

The line “Other” mainly includes changes following portfolio transactions and reclassification of property, plant and equipment under construction
to the appropriate categories when they are ready for intended use, excluding the movements related to the Partial Demerger.

NOTE F21
RIGHT-OF-USE ASSETS AND LEASE OBLIGATIONS

Accounting policy
Definition of a lease
At inception of a contract, which generally coincides with the date the contract is signed, the Group assesses whether a contract is, or
contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period oftime in exchange for consideration.
An asset is typically identified by being explicitly specified in a contract. However, an asset can also be identified by being implicitly specified
at the time that the asset is made available for use by the customer. If the supplier has a substantive substitution right, then the asset is not
identified. A substantive substitution right means that (a) the supplier has the practical ability to substitute the asset throughout the periodof use, and (b) would economically benefit from doing so.
To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether, throughout the periodof use, it has:
· the right to obtain substantially all of the economic benefits from use of the identified asset; and· the right to direct the use of the identified asset. This is generally the case when the Group has the decision-making rights regarding how
and for what purpose the asset is used.
The Group’s leased assets relate mainly to buildings, transportation equipment, and industrial equipment.

Lease term
The Group determines the lease term as the non-cancellable period of a lease, together with both:· periods covered by an option to extend the lease if the Group is reasonably certain to exercise that option; and· periods covered by an option to terminate the lease if the Group is reasonably certain not to exercise that option.
In its assessment, the Group considers the impact of the following factors (non-exhaustive):· contractual terms and conditions for the optional periods, compared with market rates;· significant leasehold improvements undertaken (or expected to be undertaken) over the term of the contract;· costs relating to the termination of the lease, including relocation costs, costs of identifying another underlying asset suitable for theGroup’s needs, costs of integrating a new asset into the Group’s operations, and termination penalties;· the importance of that underlying asset to the Group’s operations, including the availability of suitable alternatives;· conditionality associated with exercising the option (i.e. When the option can be exercised only if one or more conditions are met), and thelikelihood that those conditions will exist; and· past practice.

Right-of-use asset and lease liability
The Group recognizes a right-of-use asset and a lease liability at the lease commencement date, which is the date that the lessor makes theasset available for use by the Group except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low
value assets. The right-of-use assets are presented separately in the consolidated statement of financial position, and the lease liabilities arepresented as part of financial debt.

302

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Right-of-use asset
The right-of-use asset is initially measured at cost, which comprises:· the amount of the initial measurement of the lease liability;· any lease payments made at or before the commencement date, less any lease incentive received; and· any initial direct costs incurred by the Group.
After the commencement date, the right-of-use asset is measured at cost less any accumulated depreciation and any accumulated
impairment losses. Right-of-use assets are depreciated using the straight-line depreciation method, from the commencement date to (a)the end of the useful life of the underlying asset, in case the lease transfers ownership of the underlying asset to the Group by the end of thelease term, or the lease contains a purchase option that the Group is reasonably certain to exercise, or (b) the earlier of the end of the usefullife and the end of the lease term, in all other cases.

Lease liability
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted
using the interest rate implicit in the lease or, if that rate cannot be readily determined, the respective Group entity’s incremental borrowing
rate. Lease payments included in the measurement of the lease liability comprise the following:· fixed payments, less any lease incentives receivable;· variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;· amounts expected to be payable by the Group under residual value guarantees;· the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and· payments of penalties for early terminating the lease, if the Group is reasonably certain to exercise an option to early terminate the lease.
Service components (e.g. utilities, maintenance, insurance) are excluded from the measurement of the lease liability.
After the commencement date, the lease liability is measured by:· increasing the carrying amount to reflect interest on the lease liability;· reducing the carrying amount to reflect the lease payments made; and· remeasuring the carrying amount to reflect any reassessment or lease modifications, or to reflect the impact from a revised index or rate.

Leasing of Palladium
The Group uses palladium, a precious metal, for certain of its operations. Next to purchasing this palladium, the Group also enters into
various “leasing” agreements with financial institutions that give the Group the right to use palladium for a certain period and then return it at
the end of the "lease". Based on our analysis of these agreements, these contracts are not in the scope of IFRS 16 Leases or IFRS 9 Financial
Instruments. Due to the lack of clear IFRS guidance, the Group applied judgment to determine whether these rights and obligations shall be
accounted for on a gross or a net basis. Considering that the Group bears no price risk during the "lease" term and is not in full control of
the asset (in accordance with the IFRS Conceptual Framework), the Group believes a net presentation gives a better view on the economic
substance of the transaction. As a result, only accruals are recorded for the production losses and regeneration costs and the “lease” fee isrecognized within cost of sales.

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

303

Land

Buildings

Transportationequipment

Industrial equipment

Other tangible
assets

Total

December 31, 2021

19

266

248

251

11

795

Additions

0

8

46

27

5

86

Disposals and closures

0

-38

-28

-11

-3

-79

Currency translationdifferences

0

7

8

5

0

21

Other

0

7

15

5

1

28

Transfer to assets held
for sale

0

0

0

0

0

0

December 31, 2022

19

250

289

279

16

852

Additions

0

17

62

15

7

101

Disposals and closures

0

-25

-16

-18

-2

-62

Currency translationdifferences

0

-3

-7

-3

0

-14

Partial Demerger

-11

-170

-82

-133

-12

-409

0

5

15

-10

1

11

In €million

Gross carrying amount

Other
Transfer to assets held
for sale

0
8

73

261

128

8

479

December 31, 2021

-4

-115

-127

-75

-8

-329

Depreciation

-1

-33

-46

-34

-3

-117

Impairment

0

-3

0

0

0

-3

Disposals and closures

0

38

28

11

3

79

Currency translationdifferences

0

-3

-4

-2

0

-9

December 31, 2022

-5

-115

-148

-100

-9

-377

Depreciation

-1

-31

-47

-32

-3

-114

Impairment

0

-1

0

0

0

-1

Disposals and closures

0

16

16

18

2

53

Currency translationdifferences

0

2

3

1

0

6

Partial Demerger

4

90

54

67

5

219

December 31, 2023

-2

-39

-122

-45

-5

-213

December 31, 2021

15

151

121

176

3

466

December 31, 2022

14

134

141

178

6

474

December 31, 2023

6

34

139

83

3

267

December 31, 2023
Accumulated
depreciation

Net carrying amountThe figures contain the amounts related to Specialty Businesses until December 8, 2023.
The Group primarily leases buildings that include office buildings, and warehouses. Those leases are generally long-term leases and may include
extension options.
Next, the Group leases transportation equipment that mainly consists of railcars and containers to transport the Group’s products.
Industrial equipment mainly relates to utility assets. In 2023, additions include €15 million for industrial equipment, €46 million for transportation and€17 million for buildings.

304

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Generally, lease contracts are negotiated by the local teams, and contain a wide range of different terms and conditions. Many lease contracts
contain extension options and/or early termination options to provide the Group with operational flexibility. Such options are taken into accountwhen determining the lease term and the lease liability when it is reasonably certain that they will be exercised.
If the Group exercised its extension options not currently included in the lease liability, the present value of additional payments would amount to€42 million at December 31, 2023 (€100 million at December 31, 2022).
Lease contracts signed not yet commenced amount to €210 million at December 31, 2023 (€137 million for 2022) and mainly relate to a second waste
wood boiler, steam turbine and auxiliaries in Germany, industrial equipment in France and rail cars in the United States.
Total cash outflows for leases amount to €134 million for 2023, of which €112 million related to payment of lease liabilities and €22 million of interest
expenses (including the discontinued operations of €11 million). Information on the corresponding lease liabilities (after the demerger, long-term
part of €243 million and short-term part of €63 million) can be found in the note F32 Financial Instruments. Information on the finance expense
related to lease liabilities can be found in note F6 Net financial charges.

LEASE OF PALLADIUM
At the end of 2023, the total (gross) value of palladium leased still to be returned amounted to €33 million (end of 2022: €59 million). The difference
is mainly due to the change of the market price of the commodity.

NOTE F22
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
The list of associates and joint ventures is available in the note F40 List of companies included in the consolidation scope.
The associates and joint ventures not classified as held for sale/discontinued operations are accounted for under the equity method of accounting.
In €million

December 31, 2023

December 31, 2022

Associates

Joint ventures

Total

Associates

Joint ventures

Total

Investments in associates and joint
ventures

42

188

230

18

790

809

Earnings from associates and joint
ventures

3

53

53

0

153

153

INVESTMENTS IN ASSOCIATESIn €million

2023

2022

January 1

18

18

Profit for the year

4

1

Dividends received-1-1Currency translation differences

00Partial Demerger

20

December 31

42

18

The amount in Partial Demerger results mainly from loss of control due to demerger and the change of the consolidation scope from full consolidation to equity
accounting.
The figures contain the amounts related to Specialty Businesses until December 8, 2023.

The tables below present the summarized financial information of the associates together with the major one. The associates had no contingent
liabilities or capital commitments as at December 31, 2023 and 2022.

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3In €million

December 31, 2023
Total

305

December 31, 2022

Of which Quingdao
Hiwin Solvay Chemicals

Of which Solvay(Zhenjiang) Chemicals

Total

Of which Quingdao
Hiwin Solvay Chemicals

Ownership interest

30%

9%

30%

Operating Segment

Performance Chemicals

Basic Chemicals

Performance Chemicals

Statement of financial positionNon-current assets

163

24

130

38

29

Current assets

231

20

202

39

18

139

4

135

6

1

4

2

1

5

2

2

0

0

2

0

86

20

61

31

22

4

4

0

6

6

Net asset

304

23

270

42

23

Carrying Amount of the interestin the Associate

42

7

25

18

7

Cash and cash equivalents
Non-current liabilities
Non-current financial debt
Current liabilities
Current financial debt

Income statement

2023

2022

Sales

69

54

102

61

Depreciation and amortization

3

3

3

3

Interest on loans and short term
deposits

2

0

0

0

Profit for the year fromcontinuing operations

3

1

4

2

Profit for the year

3

1

4

2

Total comprehensive income

4

1

4

2

Dividends received

1

0

1

INVESTMENTS IN JOINT VENTURES
In €million

2023

2022

January 1

790

619

Additions00Capital increase / (decrease)-3-5Profit for the year

67

170

Dividends received

-24

-18

Currency translation differences

-13

24

Impairment reversal

0

0

Other

-3

1

Sale of RusVinyl-428

Partial Demerger-197

December 31

188

790

The figures contain the amounts related to Specialty Businesses until December 8, 2023.
The amount in Partial Demerger mainly consists of demerged Strata Solvay Advanced Materials and Hindustan Gum & Chemicals.
The tables below present the summarized financial information of the material joint ventures. The joint ventures had no contingent liabilities or capital commitments as at
December 31, 2023 and 2022.

306

FINANCIAL STATEMENT

December 31, 2023

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Peroxidos do Brasil Ltda

Shandong Huatai Interox
Chemical Co. Ltd

Aqua Pharma Group

Shinsol Advanced
Chemicals

Ownership interest

69.40%

50%

50%

51.0%

Operating Segment

Basic Chemicals

Basic Chemicals

Basic Chemicals

Performance Chemicals

Non-current assets

121

7

24

22

Current assets

144

28

20

6

Cash and cash
equivalents

84

22

9

6

Non-current liabilities

8

-

2

4

Non-current financial
debt

1

0

0

4

Current liabilities

50

10

5

2

Current financial debt

6

0

0

0

Net asset

206

25

38

23

Carrying amount of
the interest in the joint
venture

143

12

19

12

195

40

32

0

Depreciation andamortization

-7

-1

-3

0

Cost of borrowings

0

0

0

0

Interest on loans andshort-term deposits

8

0

0

0

Income taxes

-23

-3

-2

0

Profit for the year fromcontinuing operations

56

8

-2

-2

Profit for the year

56

8

-2

-2

Other comprehensive
income

4

0

-3

0

Total comprehensive
income

61

8

-5

-2

Dividends received

18

2

0

0

In €million

Statement of financial
position

2023 income statement
Sales

Other comprehensive income mainly comprises the currency translation differences.

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

December 31,
2022

307

RusVinyl
OOO

Peroxidos
do Brasil
Ltda

Strata –SolvayAdvanced
Material
JV

Shandong
HuataiInteroxChemicalCo. Ltd

HindustanGum &Chemicals
Ltd

Aqua
PharmaGroup

EECO
Holdingand subsidiaries

Shinsol
Advanced
Chemicals

Cogeneration
Rosignano

Ownership
interest

50%

69.4%

50%

50%

50%

50%

33.3%

51.0%

25.4%

OperatingSegment

Performance
Chemicals

Basic
Chemicals

Specialty
Businesses

Basic
Chemicals

Specialty
Businesses

Basic
Chemicals

Corporate& Business Performance
ChemicalsServices

Corporate& Business
ServicesIn €million

Statement of financial positionNon-current
assets

668

105

69

7

9

29

33

Current assets

294

128

19

24

307

19

38

16

9

Cash and cash
equivalents

226

57

17

17

276

11

11

16

6

Non-current
liabilities

59

9

-

-

9

2

18

13

Non-current
financial debt

12

4

-0

0

0

0

18

13

Current
liabilities

41

54

2

10

14

4

20

1

Current
financial debt

3

10

-

0

0

0

19

0

Net asset

862

169

87

21

292

42

33

16

12

Carrying
Amount of
the interestin the Joint
Venture

431

118

43

11

146

21

9

8

3

Sales

609

209

24

39

73

31

0

0

Depreciation
andamortization

-53

-7

0

-1

-1

-4

-4

-3

Cost ofborrowings

-14

0

0

0

0

0

-2

0

Interest on
loans andshort-term
deposits

15

5

0

0

13

0

1

0

Income taxes

-58

-23

0

-2

-3

-1

-2

0

Profit for theyear fromcontinuing
operations

233

48

18

4

12

1

10

2

Profit for the
year

233

48

18

4

12

1

10

2

Other comprehensive
income

22

9

0

0

-8

0

0

Total comprehensive
income

255

57

18

4

4

1

0

0

Dividends
received

0

12

0

2

2

-1

0

0

17

2022 income statement

Other comprehensive income mainly comprises the currency translation differences.

308

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

NOTE F23
IMPAIRMENT

Accounting policy
GeneralAt the end of each reporting period, the Group reviews whether there is any indication that assets have suffered an impairment loss. If any
such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the
CGU to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are allocated toindividual CGUs, or otherwise they are allocated to the smallest group of CGUs for which a reasonable and consistent allocation basis canbe identified.
The recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre-tax discount rate. Future cash flows are adjusted for risks not incorporated into thediscount rate.
If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is
reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or CGU) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined (netof amortization or depreciation) had no impairment loss been recognized for the asset (or CGU) in prior years. A reversal of an impairment
loss is recognized immediately in profit or loss. An impairment loss recognized for goodwill shall not be reversed in a subsequent period.

Assets other than non-current assets held for saleIn accordance with IAS 36 Impairment of Assets, the recoverable amount of property, plant and equipment, intangible assets, right-of-use
assets, CGUs or groups of CGUs, including goodwill, and equity method investees corresponds to the higher of their fair value less costs ofdisposal, and their value in use. The latter equals the present value of the future cash flows expected to be derived from each asset, CGU orgroup of CGUs, and equity method investees and is determined using the following inputs:· business plan approved by management based on growth and profitability assumptions, taking into account past performances, forecastchanges in the economic environment and expected market developments, including opportunity and risks resulting from climate change(taking into account the Solvay One Planet strategy – see note Climate change in the IFRS general accounting policies) and environmental
regulations such as products phasing out. For further details, refer to the Risk Management Section. Such business plan generally covers
five years, unless management is confident that projections over a longer period are reliable;· consideration of a terminal value determined based on the cash flows generally obtained by extrapolating the cash flows of the last years of
the business plan referred to above, affected by a long-term growth rate deemed appropriate for the activity and the location of the assets;· discounting of expected cash flows at a rate determined using the weighted average cost of capital formula.

Discount rate
Weighted average cost of capital (WACC) was computed using a consistent methodology to account for the separation, new reference peers, andan extensive benchmarking. The short term WACC is utilized to discount the expected cash flows of the initial four years, and is computed based onprevailing discount rates. The long term WACC is utilized to discount the expected cash flows starting from the fifth year and for the Terminal Value.
The long term WACC is based on the three-year averages of key parameters (risk free rates, betas, spreads). In 2022, a rolling eight-year average ofhistorical short term WACCs was used to calculate the long term WACC.

2023

2022

Short term discount rate (WACC)

9.9%

6.6%

Long term discount rate (WACC)

8.2%

6.5%

The increase in the WACCs is mainly due to the increase in the risk free rate reflecting tightening of monetary conditions by central banks andcontinued high inflation expectations. These WACCs are in the low range of the observed Peers’ WACC estimates.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT

309

Long-term growth rates
The long-term growth rates used in 2023 are based on the comprehensive review of the entire business portfolio performed in 2019 with thedefinition of the G.R.O.W. Strategy when each CGU was assigned to one of business segments with different growth opportunities, consistent withthe long term growth rates of the market they serve and the Group competitive position in those markets; and on the long term growth remains
very strong.
After the reassessment of the long-term growth prospects the Group concluded that the prior year rates are still applicable, are consistent with therates communicated during the capital market day in November 2023, and were thus set at:· Coatis – 0%
· Peroxides – 1%
· Silica – 0%
· Soda Ash – 1%
· Spec Chem – 1%
Other key assumptions are specific to each CGU (utility price, volumes, margin, etc.).

Impairment test 2023
The impairment tests performed at CGU level at December 31, 2023, were based on the budget 2024 and the Mid Term Plan 2025-2028. With the
exception of the Energy CGU the tests did not lead to any impairment of assets, as the recoverable amounts of the (groups of) CGUs were higher
than their carrying amounts. More specifically, in all cases, the difference between the (groups of) CGUs’ value in use and their carrying amount(headroom) represented in all a percentage of the carrying amount significantly exceeding 10%. As a result, for these (groups of) CGUs, a reasonablechange in a key assumption relating to the recoverable amount for which the (groups of) CGUs is based, would not result in an impairment loss.
Given the significant headroom no sensitivities were performed.
Due to the significant volatility in the Energy markets, the Group has decided to exit its external energy business. The Group’s decision resulted
in €38 million full impairment of the Energy CGU’s goodwill. The impairment was recorded within results from portfolio management and major
restructuring in the Consolidated Income Statement. The discount rate used was consistent with the Group model.
As a result of the Partial Demerger of the Specialty Business the Group realigned its Operating Segments as detailed in note F1 Revenue andSegment Information. The realignment resulted in the reallocation of segment level goodwill of €186 million. The goodwill was reallocated to the
CGUs based on a relative value approach. The reallocation did not have any significant impact on the impairment analysis performed. For additional
information on the reallocation of goodwill see note F19 Goodwill and Business Combinations.
Climate related matters were considered in the 2023 impairment analysis, however, it did not give rise to any impairments. More specifically, thegroup considered capital expenditures of over €1 billion within its Soda Ash and Derivatives CGU related to its carbon neutrality initiative within
annual impairment testing.
As detailed in the note on climate change, the management has considered the impact of climate change, and more specifically the impact of
the execution of the Solvay One Planet strategy, in the assessment of impairment. Furthermore, the long-term accounting assumptions, including
CO2 emission rights and energy prices for the energy intensive Soda Ash GBU have been considered together with applied relevant hedges.
Considering the significant headroom on the Soda Ash CGU, the management believes that this headroom is enough to absorb climate change
scenarios. Consequently, no sensitivity is provided. The same exercise was done for the other cash generating units and management believes
there are no realistic scenarios regarding climate change today, which would lead to an impairment of these assets.

Other small groups of assets (Performance Chemicals)
In 2023, The Group impaired the tangible assets of the underperforming production assets within the Special Chem CGU for Fluor Gases in
Europe (€48 million; Operating Segment: Performance Chemicals). Following a price improvement in 2021-2022, the 2020 impairment related
to Fluor Gases was partially reversed in 2022. However, in 2023, due to stronger competition, deterioration in Agro market, and volume demand
reduction, the impairment was re-recognized. The impairment was recorded within Results from portfolio management and major restructuring in
the Consolidated Income Statement. The discount rate used was consistent with the Group model.

310

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

NOTE F24
INVENTORIES

Accounting policy
Cost of inventories includes the purchase, conversion and other costs incurred in bringing the inventories to their present location andcondition. The cost of inventories is generally determined by using the weighted average cost method except for CO2 emission rights (seebelow).
Inventories are measured at the lower of purchasing cost (raw materials and merchandise) or production cost (work in progress and finishedgoods) and net realizable value. Net realizable value represents the estimated selling price, less all estimated costs of completion and theestimated costs necessary to make the sale.

CO2 emission rights
With respect to the mechanism set up by the European Union to encourage manufacturers to reduce their greenhouse gas emissions,carbon dioxide (CO2) emission rights are granted to the Group for free.
In the absence of any IFRS regulating the accounting treatment of CO2 emission rights, the Group applies the Trade/Production model,
according to which CO2 emission rights are presented as inventories if they will be consumed in the production process within the next
12 months, or as derivatives if they are held for trading. Energy Services is involved in CO2 emission rights’ trading, arbitrage and hedging
activities. In the inventory, each batch of EUA is tracked separately and the cost recognition formula is based on specific identification.
The net income or expense from these activities is recognized in “other operating gains and losses” (a) for the industrial component, where
Energy Services sells the excess CO2 emission rights generated by Solvay or where a Group deficit is recognized, as well as (b) for the trading
component, where Energy Services acts as a trader/broker with respect to those CO2 emission rights.
In light of its centralized CO2 emission rights’ portfolio management, for emission rights that are substitutable between subsidiaries, theGroup’s financial statements reflect the Group’s net position. If this net position is negative, a provision is recognized, measured based on
the market price of the CO2 emission rights at the reporting date.

Energy savings certificates (ESCs)
Energy savings certificates are presented as inventory items in finished goods. They are measured at weighted average cost. As their cost is
not separately identifiable, and as they are a by-product, they are measured at their net realizable value upon initial recognition.

December 31, 2023

December 31, 2022

Finished goods

373

1,352

Raw materials and supplies

296

838

4

21

Total

673

2,211

Write-downs

-31

-102

Net total

642

2,109

In €million

Work in progress

The decrease of inventory is linked to the Partial Demerger (see Note F8)
The CO2 emission rights amount to €49 million at the end of 2023 – this includes €12 million related to 2023 obligations and is included in inventory,and €38 million related to obligations after 2023 what is included in Other non-current assets. See Note F32 Financial instruments for further details
on CO2 hedging.
Inventory write-downs are included in cost-of-goods-sold in the consolidated income statement.

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

311

NOTE F25
OTHER RECEIVABLES (CURRENT)
December 31, 2023

December 31, 2022

VAT and other taxes

202

398

Advances to suppliers

37

149

Financial instruments – operational

56

929

Insurance premiums

36

31

Loan receivables

5

43

Other

125

79

Other current receivables

462

1,629

In €million

The reduction of the Other current receivables is mainly explained by the Partial Demerger.
The main differences relate to the Partial Demerger and changes in energy (gas and electricity) prices.
The row Other contains a pending insurance reimbursement of €32 million which will be transferred to Syensqo (see also Note F34 Other liabilities)
and Fluor quotas of €16 million.
Financial instruments – operational includes held for trading and cash flow hedge derivatives (see note F32.A. Overview of financial instruments).

NOTE F26ASSETS HELD FOR SALE
At the end of 2023 and 2022, there were no assets and liabilities classified as held for sale.

312

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

NOTE F27
EQUITY

Accounting policy
Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issuance of new share capital are directly recognized in equity as a deduction, net of tax, fromthe equity issuance proceeds.

Reserves
The reserves include:· treasury shares;· perpetual hybrid bonds that qualify as equity absent any unavoidable contractual obligation to repay the principal and interest of theperpetual hybrid bonds (no maturity, interest is payable annually but can be deferred indefinitely at the issuer’s discretion);· retained earnings;· currency translation differences from the consolidation process relating to the translation of the financial statements of foreign operations
prepared in a non-euro functional currency to the euro presentation currency;· the impacts of the fair value re-measurement of equity instruments measured at fair value through other comprehensive income;· the impacts of the fair value re-measurement of financial instruments documented as hedging instruments in cash flow hedges;· actuarial gains and losses related to defined benefit plans.

Non-controlling interests
Those represent the share of non-controlling interests in the net assets and comprehensive income of subsidiaries of the Group, andcorrespond to the interests in subsidiaries that are not held by the Company or its subsidiaries.

NUMBER OF SHARES (IN UNITS)

Shares issued and fully paid
Treasury shares held

December 31, 2023

December 31, 2022

105,876,416

105,876,416

868,490

2,107,752

The treasury shares held by the Group have been deducted from consolidated shareholders’ equity.
The shares issued by Solvay have no par value.

Treasury shares
During 2023, Solvay has sold €50 million treasury shares in order to fulfill its employee benefits commitments.
As part of the Partial Demerger, the treasury shares held by a former subsidiary of Solvay transferred to Syensqo as part of the Partial Demerger, attheir carrying amount of €79 million, were transferred to Syensqo SA/NV as part of the Specialty Businesses.
As a result of the Partial Demerger, for each treasury share held by Solvay Stock Option Management SRL (“SSOM”), a wholly owned subsidiary of
Solvay, for the purposes of hedging its exposure under LTI plans, SSOM received one Syensqo share. Consequently, Solvay reclassified part of theequity (€81 million) related to treasury shares to equity investments at fair value through profit or loss.

Perpetual hybrid bonds
In connection with the Partial Demerger, all perpetual hybrid bonds were either transferred to Syensqo (€0.5 billion) or paid in full (€1.3 billion). For
additional information see the Liability Management section of the Main Events and Changes in the Consolidation Scope in Note 1.

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

313

NOTE F28
NON-CONTROLLING INTERESTS
The amounts disclosed below are fully consolidated amounts and do not reflect the impacts from elimination of intragroup transactions.
At the end of 2023, the following most material subsidiaries have non-controlling interests (NCI) totaling €35 million out of total NCI of €42 million.

Solvay Lantian (Quzhou)
Chemicals

Salzgewinnungsgezellschaft
Westfalen

45%

35%

Non-current assets

26

55

Current assets

47

22

Non-current liabilities

3

41

Current liabilities

15

4

Sales

89

11

Profit for the year

10

7

Other comprehensive income-2-1

Total comprehensive income

86Dividends paid to non-controlling interests

30

Share of non-controlling interest in the profit for the year

4

2

Accumulated non-controlling interests

24

11

In €million

Non-controlling ownership interest
Statement of financial position

Income statement(i) Solvay Lantian (Quzhou) Chemicals was Zhejiang Lansol in 2022.

At the end of 2022, the following subsidiaries had non-controlling interests totaling €49 million, out of a total of €61 million.

Zhejiang Lansol

Solvay Hengchang
Zhangjiagang Special Chem

Salzgewinnungsgezellschaft
Westfalen

45%

30%

35%

Non-current assets

28

17

56

Current assets

47

72

12

Non-current liabilities

2

1

40

Current liabilities

17

34

3

Sales

93

168

11

Profit for the year

9

36

4

Other comprehensive income

-3

-3

2

Total comprehensive income

6

32

6

Dividends paid to non-controlling interests

0

6

0

Share of non-controlling interest in the profit for the
year

4

11

1

Accumulated non-controlling interests

24

16

9

In €million

Non-controlling ownership interest
Statement of financial position

Income statement

314

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3During 2022 the Group purchased the remaining outstanding ownership interest in Solvay Soda Ash (20% for US$120 million) and Solvay Special
Chem Japan (33% for €3.55 million) with the difference between the consideration paid and the net book value of the non-controlling interest being
recorded as a component of equity (loss of €88 million on the purchase of Solvay Soda Ash and a gain of €9.5 million on the purchase of Special
Chem Japan).

NOTE F29
SHARE-BASED PAYMENTS

Accounting policy
Solvay has set up compensation plans, including equity-settled and cash-settled share-based compensation plans.
In its equity-settled plans, the Group receives services as consideration for its own equity instruments (namely through the issuance of shareoptions). The fair value of services rendered by employees in consideration for the granting of equity-instruments represents an expense.
This expense is recognized on a straight-line basis in the consolidated income statement over the vesting periods relating to these equityinstruments with the recognition of a corresponding adjustment in equity. The fair value of services rendered is measured based on the fairvalue of the equity-instruments on the grant date. It is not subsequently remeasured. At each reporting date, the Group re-estimates thenumber of share options likely to vest. The impact of the revised estimates is recognized in profit or loss against a corresponding adjustment
in equity.
In its cash-settled plans, the Group acquires services by incurring a liability to transfer to its employees rendering those services amounts
that are based on the price (or value) of equity instruments (including shares or share options) of the Group (namely through the issuanceof performance share units). The fair value of services rendered by employees in consideration for the granting of share-based payments
represents an expense. This expense is recognized on a straight-line basis in the consolidated income statement over the vesting periods
relating to these share-based payments with the recognition of a corresponding adjustment in liabilities. At each reporting date, the Groupre-estimates the number of options likely to vest, with the impact of the revised estimates recognized in profit or loss. The Group measures
the services acquired and the liability incurred at the fair value of the liability. Until the liability is settled, the Group remeasures the fair valueof the liability at the end of each reporting period and at the date of settlement, with any changes in fair value recognized in profit or loss
for the period.
Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but thelikelihood of the conditions being met is assessed as part of the Group’s best estimate of the number of equity instruments that will ultimately
vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without
an associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of anaward and lead to immediate expensing of an award unless there are also service and/or performance conditions. No expense is recognized
for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include
a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting condition issatisfied, provided that all other performance and/or service conditions are satisfied.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share (further
details are given in Note F9 Earnings per share).

Awards on shares of Syensqo SA/NV
The awards granted on shares of the Syensqo Group are not in scope of IFRS 2 Share Based Payments. Therefore the Management hasestablished the accounting policy for these awards.
For the awards granted on Syensqo Group shares, a liability is recognized and measured based on the fair value of the Syensqo Group
awards at each reporting date. On initial recognition of the liability at the Partial Demerger date, a corresponding entry is recognized inequity for the vesting period that has passed to date and the remaining amount is recognized as Other Receivables. This asset represents
the services that have yet to be rendered by the beneficiaries. The asset will be amortized to the consolidated income statement over theremaining vesting period of the plans.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT315

The costs of the awards related to the Syensqo Group are presented within operational (Administrative) expenses. The fair value fluctuationon the liability will be presented in Financial Results together with the fair value fluctuation on the hedging options/shares, which will partiallyhedge the impact.
The liability will be remeasured to its fair value at each reporting date. This applies equally to vested plans so long as there remains
outstanding (unexercised) options.
The liabilities related to the fully vested plans are disclosed as current given that the beneficiaries may exercise their awards at any time. The
liabilities related to the unvested plans are disclosed as non-current..

Effects of the Partial Demerger – amendments to the plans
As part of the Partial Demerger, the Solvay Board approved the amendments to the existing long term incentive plans (LTI). The LTIs were adjusted
based on the following approaches:· 1. Shareholder approach – The existing awards were adjusted to entitle beneficiaries to receive one share option of Solvay SA/NV and one shareoption of Syensqo SA/NV.
· 2. Employer approach – The existing awards were adjusted to entitle beneficiaries to receive a certain number of awards of their future employer(i.e. either the Syensqo Group or the Solvay Group).
· 3. Basket approach – The existing awards were modified to entitle beneficiaries to receive an option on both Solvay SA/NV and Syensqo SA/NV.
Stock option plans (shareholder approach)All outstanding stock options were converted into options on both the Solvay Group and Syensqo Group shares, as described above. The options
can be exercised individually on each Group’s shares with the exception of the 2022 SOP, which is a basket option i.e. the option is exercised on
both shares of Solvay and Syensqo simultaneously.
The 2022 SOP is no longer classified as an equity settled plan due to the basket option feature. This plan will be treated similarly to the awards on
Syensqo’s shares. At the date of the Partial Demerger, the fair value of the 2022 SOP was recalculated using the Monte Carlo model and the plan
was reclassified. A liability of €4 million was recognized, with corresponding entries to equity (€0.6 million) and Other Receivables (€0.4 million).
The exercise prices of all the stock options (excluding the 2022 SOP) were reset at the Partial Demerger date taking into consideration the Solvay
and Syensqo closing share prices at December 11, 2023. As per Belgian law requirements, the sum of new exercise prices of the Solvay and Syensqo
options equal the original exercise price of the plans.
2022 Performance Share Unit (PSU) plan (shareholder approach)The performance metrics were measured for the full year 2022 and 2023. The PSUs were converted to RSUs by applying an extrapolation method tothe third performance year (2024). The vesting period remains unchanged. The RSUs will vest at the end of December 2024 and the shares of Solvay
and Syensqo Goup will be delivered to the beneficiaries in Q1 2025.
2023 PSU and Restricted Share Unit (RSU) (employer approach)The performance metrics were measured for the full year 2023. For the performance years 2024 and 2025, new KPIs were approved by the Group’s
Board. The vesting period remains unchanged. The PSUs and RSUs will vest at the end of December 2025 and the Solvay shares will be delivered
to the beneficiaries in Q1 2026.
To ensure the beneficiaries were not disadvantaged by the amendments to the plan, the number of PSUs and RSUs per beneficiary was adjusted
taking into account the 30 trading-days post-demerger average share price of Solvay and Syensqo.
2022 Employee Stock Purchase Plan (ESPP) (employer approach)To ensure the beneficiaries were not disadvantaged by the amendments to the plan, the number of free and matching shares per beneficiary was
adjusted taking into account the 30 trading-days post-demerger average share price of Solvay. The vesting period remains unchanged. The ESPP
free and matching shares will vest at the end of September 2024.
Awards on Solvay Group shares
For the awards granted on Syensqo shares, a liability is recognized at the Partial Demerger date based on the fair value of the Syensqo Group
awards, and it was re-measured on December 31 to €36 million. A corresponding entry is recognized in equity (€25 million) for the vesting periodthat has passed to date and the remaining amount is recognized as Other Receivables (€4 million). This asset represents the services that have yet
to be rendered by the beneficiaries. The asset will be amortized to operational (Administrative) expenses in the consolidated income statement
over the remaining vesting period of the plans.

316

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3The costs of the awards related to the Syensqo (€3 million) are presented within operational (administrative) expenses in the Consolidated Income
statement. The fair value fluctuation on the liability (€4 million) is presented in Financial Results.
Modification accounting
In accordance with the requirements of IFRS 2 modification accounting, the Group obtained updated fair values using Black-Scholes models of all
the share based payment plans at the date of the Partial Demerger based on (i) the original terms but updated to the Partial Demerger date, and (ii)the modified terms. The fair values were compared and where there was an increase in fair value under the modified terms, the Group will recognize
this additional cost over the remaining vesting period for the unvested plans. The additional cost related to vested plans was recognized in full in
Administrative Expenses for the year ended December 31, 2023. The impact of the incremental fair value for both unvested and vested plans was
not material to the Group.

The Partial Demerger
As part of the Partial Demerger, Solvay transferred to Syensqo its rights and obligations under its outstanding incentive plans (including the PO2
SOP plan), in each case to the extent the beneficiaries of such plans (including members of the ELT before the Partial Demerger Date) are employed
by Syensqo or one of its affiliates following completion of the Partial Demerger. Specific adjustments were made to the 2023 PSU and RSU plans
for such beneficiaries.

Stock Option Plans
Prior to the Partial Demerger, all the stock option plans were equity settled. Following the Partial Demerger, the Group also has to account forawards granted on Syensqo shares (see the Shareholder approach). The table below includes both the options on Solvay shares as well as Syensqo
shares. There was no stock option plan granted in 2023.

Share option plans
Number of share options
granted and still outstandingat December 31, 2022

2021

2020

2019

2018 – 22018 – 1

2017

2016

2015

259,001

395,164

429,103

72,078391,280

308,450

497,845

332,409-44,531-15,041-50,005-6,425-25,228-23,505-25,263-332,409-96,959-12,013-19,277-22,152-389,437-86,164-46,084-14,210Granted share options
Forfeitures of rights andexpiries
Share options exercised
Partial Demerger of Syensqo
Number of Solvay shareoptions at December 31,
2023

1)

-108,876-208,696-116,300

105,594

171,427

165,839

53,640260,611

216,709

68,935

165,839

53,640260,611

216,709

68,935

Solvay share options
exercisable at December 31,
2023
Exercise price (in €)

16.49

16.52

16.74

18.69

19.51

19.19

13.11

Fair value of options at
measurement date (in €)

4.56

4.42

4.16

2.68

2.68

2.25

6.30

105,594

171,427

177,10965,653279,888

238,861

220,140

Number of Syensqo shareoptions at December 9,2023 2)
Share options exercised
Number of Syensqo shareoptions at December 31,
2023-51,711
105,594

171,427

Syensqo share options
exercisable at December 31,
2023

177,10965,653279,888

238,861

168,429

177,10965,653279,888

238,861

168,429

Exercise price (in €)

79.09

79.28

80.31

89.69

93.60

92.08

62.87

Fair value of options at
measurement date (in €)

22.45

21.76

20.5

13.37

13.37

11.27

31.22

1) This row presents the number of plan participants that were Syensqo Group employees.
2) On December 9, 2023, following the Partial Demerger, the number of options on Solvay SA/NV was equal to the number of options on shares of Syensqo SA/NV – see
the Shareholder approach. Starting from that date, under the Shareholder approach, the participants are able to exercise the options on Solvay SA/NV shares and theoptions on Syensqo shares separately.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Share option plans
Number of share options granted and still outstanding at December 31, 2022

FINANCIAL STATEMENT

317

2022
386,867

Granted share options
Forfeitures of rights and expiries-88,389

Share options exercised
Partial Demerger of Syensqo-196,142

Number of basket share options at December 31, 2023

102,336

Basket share options exercisable at December 31, 2023
Exercise price (in €)84.34

Fair value of options at measurement date (in €)30.58

The options in 2022 SOP have a higher exercise price compared to other SOPs because this plan was converted using the Basket approach andfor each option exercised, the holder will acquire one Solvay SA/NV share and one Syensqo SA/NV share against payment of the exercise price.

318

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

2023

January 1

2022

Number of shareoptions

Weighted average
exercise price

Number of shareoptions

Weighted average
exercise price

3,072,197

102.452,919,955

104.54

386,867

84.34

Granted during the year
Forfeitures of rights and expiries during the year

-610,796

28.22-7,246

96.49

Exercised during the year

-539,838

14.36-227,379

98.57

Partial Demerger of Syensqo-776,472
21.82

3,072,197

102.45

December 31
Exercisable at December 31

1,145,091
765,734

1,602,062

Shareholder approach— Options on Solvay Shares— Solvay share options exercisable at
December 31, 2023
— Options on Syensqo Shares— Syensqo share options exercisable at
December 31, 2023

1,042,755

17.74

765,734
1,258,672

83.54

929,940

Basket approach— Basket options— Basket share options exercisable at December
31, 2023

102,33684.34

01) Before the Partial Demerger, only options on Solvay shares existed.
2) Following the completion of the Partial Demerger, the Shareholder approach or Basket approach were applied to SOP plans.

In 2023, the share options resulted in an expense of €3 million, which includes the impact of the plan amendments, and is recognized in the
consolidated income statement as part of administrative costs. The carrying amount of the liability for stock options on Syensqo shares at December
31, 2023 is €28 million.
The updated valuation of the stock option plan of 2022 is based on:· the price of the underlying asset (sum of the Solvay and Syensqo share): €109.45 at December 11, 2023;· the time outstanding until option maturity: exercisable from January 1, 2026, until December 31, 2027, taking into account the fact that some ofthem will be exercised before the option maturity;· the option exercise price: €84.34;· the risk-free return: 2.52% (on average);· the average volatility of the underlying yield, estimated based on the option price: 27.0%;· an average dividend yield of 3.7%.
The performance condition has already been met and therefore is not factored into the model.

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

319

Weighted average remaining contractual life of the share option plans:

WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE
2023

In years

2022

2015

0.2

2016

0.2

1.2

2017

1.2

2.2

2018-1

2.2

3.2

2018-2

2.6

3.6

2019

3.2

4.2

2020

4.2

5.2

2021

5.1

6.1

2022

4.0

5.0

Performance Share Units Plan (PSU)
In 2023, the Board of Directors offered to executive staff a Performance Share Unit Plan, with the objective of promoting long-term success and toincrease the focus on sustainable performance for the benefit of the Solvay Group and its stakeholders. All the managers involved subscribed to
the PSU offered to them in 2023 with a grant date fair value of €108.56 representing the average stock market price of the share for the 30 days prior
to the offer. In accordance with IFRS 2 requirements, the fair value of each PSU in this plan has been updated to €23.98, being the initial grant datefair value adjusted by the weighted average closing price of both Groups for the 30 days post the Partial Demerger (22% of the initial grant datefair value allocated to Solvay). The PSU plan 2023 is an equity-settled share-based plan with a three-year vesting period, after which shares will be
issued, if vesting conditions are met.
The following table on the PSU plans contains the information as the plans were before the Partial Demerger.
Performance
share units

Plan 2023

Plan 2022

Plan 2021

Number of
PSUs

190,156

196,605

194,130

Grant date

07/03/2023

17/05/2022

23/02/2021

Vesting date

01/01/2026

01/01/2025

01/01/2024

Vesting period

07/03/2023 to 31/12/2025

17/05/2022 to 31/12/2024

31/03/2021 to 31/12/2023

Performance
conditions

40% of the initial granted PSUs
are subject to the achievement ofYear over Year Underlying EBITDA
growth target for each of the 3(2023, 2024, 2025) performance
years ending on December 31,
2025

40% of the initial granted PSUs are
subject to the achievement of Year overYear Underlying EBITDA growth target
for each of the 3 (2022, 2023, 2024)
performance years ending on December
31, 2024

40% of the initial granted PSUs are subject
to the achievement of Year over Year
Underlying EBITDA growth target for eachof the 3 (2021, 2022, 2023) performance
years ending on December 31, 2023

40% of the initial granted PSUs
are subject to the sustained and/or improved ROCE % of theCompany for each of the 3 (2023,
2024, 2025) performance years

40% of the initial granted PSUs are
subject to the sustained and /or
improved ROCE % of the Company
for each of the 3 (2022, 2023, 2024)
performance years

40% of the initial granted PSUs are subject
to the sustained and /or improved ROCE
% of the Company for each of the 3 (2021,
2022, 2023) performance years

20% of the initial granted PSUs are
subject to the reduction of GHG
absolute emissions during thesame 3 years (2023, 2024, 2025)

20% of the initial granted PSUs are
subject to the reduction of GHG
absolute emissions during the same 3
years (2022, 2023, 2024)

20% of the initial granted PSUs are
subject to the reduction of GHG absoluteemissions during the same 3 years (2021,
2022, 2023)

Achievement of the plan ismeasured for each separate
performance year. The scoreachieved for each individual year
is acquired definitively, whatever
the achievement of the other years

Achievement of the plan is measured
for each separate performance year. The
score achieved for each individual year
is acquired definitively, whatever theachievement of the other years

Achievement of the plan is measured
for each separate performance year. The
score achieved for each individual year
is acquired definitively, whatever theachievement of the other years

By the Board of Directors

By the Board of Directors

By the Board of Directors

Validation of
performance
conditions

320

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

For the PSU plan 2023, the participants who are also members of the Executive Leadership Team (including the CEO) on the grant date mustachieve an additional performance condition. If achievement of the performance conditions outlined in the above table is positive (above zero),delivery of the PSUs is subject to further adjustment based on the Total Shareholder Return (TSR) performance of the Group in comparison to the
TSR of the Stoxx 600 index companies for the period equal to the Performance Period.
The TSR performance condition was met at the end of 2023.
The PSU plan 2021 is a cash settled plan with a three year vesting period that vested on December 31, 2023. The payout was determined on thebasis of the Solvay Group average share price (€104.29) during a 10-day trading period ending on November 30, 2023. At December 31, 2023,
cumulative liability was (€9 million). At December 31, 2022, there was a liability of €39 million (this relates to all the plan members before the Partial
Demerger) with the difference when compared to 2023 consists of the settlement of the 2020 PSU plan.
In 2023, the impact on the consolidated income statement regarding PSUs (net of hedging – see note F32 Financial instruments) amounts to a costof €(12) million compared to a cost of €(20) million in 2022. Included in the 2023 PSU cost is €2 million related to the equity-settled plan.
At December 31, 2023, there were 57,410 outstanding PSUs for the 2023 equity settled plan and 67,304 for the 2021 cash-settled plan.
As mentioned above, the PSU plan 2022 has been converted to an RSU plan at the Partial Demerger date, consequently, there are no more
performance share units left in PSU 2022.

Restricted Share Units (RSU)
In 2023 prior to the Partial Demerger, the Board of Directors offered to executive staff two Restricted Share Unit Plans, with the objective of
encouraging beneficiaries to remain employed by the Group by allowing them to become shareholders of the Group. All the managers involved
subscribed to the RSUs offered to them in 2023 with a grant date fair value of €108.56 representing the average Solvay Group stock market price ofthe share for the 30 days prior to the offer. In accordance with IFRS 2 requirements, the fair value of each RSU in these plans has been updated to€23.98, being the initial grant date fair value adjusted by the weighted average closing price of both Groups for the 30 days post the Partial
Demerger (22% of the initial grant date fair value allocated to Solvay).
The Restricted Share Units are equity-settled share-based plans with a vesting date of December 31, 2025, after which shares will be issued, if vesting
conditions are met.
In 2023, the impact on the consolidated income statement of the RSUs amounts to a cost of €8 million and includes the cost of the converted
2022 PSU plan post the Partial Demerger. The carrying amount of the liability for the 2022 RSU plan on awards on Solvay Group shares amounts to€8 million at the end of 2023.
At December 31, 2023, there were 25,654 RSUs 2023 options outstanding, and 85,428 RSUs 2022 options outstanding, what includes the transferfrom PSU 2022 plan.

Employee Stock Purchase Plan (ESPP)In September 2022, Solvay launched its first employee share purchase plan. By participating in the plan, employees have the opportunity topurchase Solvay Group shares on preferential terms. The grant date fair value was €82.85 representing the average stock market price of the sharefor the 30 days prior to the offer. In accordance with IFRS 2 requirements, the fair value of the ESPP has been updated to €18.23, being the initial
grant date fair value adjusted by the weighted average closing price of both Groups for the 30 days post the Partial Demerger (22% of the initial
grant date fair value allocated to Solvay).
These employees will receive one free Solvay Group share for joining the plan as well as one matching share for every two shares purchased. The
ESPP is an equity-settled share-based plan with a vesting date of September 30, 2024, after which the free and matching shares will be issued, if
vesting conditions are met.
On December 31, 2023, 24,493 shares are expected to be granted to the employees. The impact on the consolidated income statement of the
ESPP amounts to a cost of €2 million.
There was no effect of the Partial Demerger on the ESPP plan because the plan was already fully settled.

Hedging
All hedging with call options on PSU, RSU and ESPP have been unwound in cash at the end September 2023.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT321

NOTE F30
EMPLOYEE BENEFITS

Accounting policy
GeneralThe Group’s employees are offered various post-employment benefits, other long-term employee benefits, and termination benefits as aresult of legislation applicable in certain countries, and contractual agreements entered into by the Group with its employees or constructive
obligations.
The post-employment benefits are classified as defined contribution or defined benefit plans.

Defined contribution plans
Defined contribution plans involve the payment of fixed contributions to a separate entity, and release the employer from any subsequentobligation, as this separate entity is solely responsible for paying the amounts due to the employee. The expense is recognized when an
employee has rendered services to the Group during the period.

Defined benefit plans
Defined benefit plans concern all plans other than defined contribution plans, and include:· post-employment benefits: pension plans, other post-employment obligations and supplemental benefits such as post-employment
medical plans.
Taking into account projected final salaries on an individual basis, post-employment benefits are measured by applying a method (projected
unit credit method) using assumptions involving discount rate, life expectancy, turnover, wages, annuity revaluation and medical cost
inflation. The assumptions specific to each plan take into account the local economic and demographic contexts.
The discount rates are interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid,
and that have terms to maturity approximating the terms of the related pension obligation.
The amount recognized under post-employment obligations corresponds to the difference between the present value of future obligations
and the fair value of the plan assets funding the plan, if any. If this calculation gives rise to a deficit, an obligation is recognized in liabilities.
Otherwise, a net asset limited to the lower of the surplus in the defined benefit plan and the present value of any future plan refunds or any
reduction in future contributions to the plan is recognized. Therefore the amount at which such an asset is recognized in the statement offinancial position may be subject to a ceiling.
The defined benefit cost consists of service cost and net interest expense (based on discount rate) on the net liability or asset, both recognizedin profit or loss, and remeasurements of the net liability or asset, recognized in other comprehensive income.
Service cost consists of current service cost, past service cost resulting from plan amendments or curtailments and settlement gains or losses.
The interest expenses arising from the reverse discounting of the benefit obligations, the financial income on plan assets (determined bymultiplying the fair value of the plan assets by the discount rate) as well as interest on the effect of the asset ceiling are recognized on a net
basis in the net financial charges (cost of discounting of provisions).
Remeasurements of the net liability or asset consist of:· actuarial gains and losses on the benefit obligations arising from experience adjustments and/or changes in actuarial assumptions(including the effect of changes in the discount rate) recognized in other comprehensive income;· changes as a consequence of plan amendments, recognized in profit or loss;· the return on plan assets (excluding amounts in net interest) and changes in the limitation of the net asset recognized.

Other long-term employee and termination benefits
Other long-term employee benefits related to long service benefits granted to employees according to their seniority in the Group.
Termination benefits include early pension plans. Other long-term employee and termination benefits are accounted for in the same way
as post-employment benefits but remeasurements are fully recognized in the net financial charges during the period in which they occur.
The actuarial calculations of the main post-employment obligations and other long-term benefits are performed by independent actuaries.

322

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Overview

PROVISIONS BY TYPE OF BENEFITS
December 31, 2023

December 31, 2022

Post-employment benefits

705

873

Other long-term benefits

47

136

Termination benefits

42

49

Total employee benefits

794

1,057

In €million

POST-EMPLOYMENT BENEFITS
A. Defined contribution plans
For defined contribution plans, Solvay pays contributions to publicly or privately administered pension funds or insurance companies.

B. Defined benefit plans
Defined benefit plans can be either funded via outside pension funds or insurance companies (“funded plans”) or financed within the Group(“unfunded plans”). Unfunded plans have no plan assets dedicated to them.
The net liability results from the net of the provisions and the asset plan surplus.

In €million

December 31, 2023

December 31, 2022

Provisions

705

873

Asset plan surplus (included in non-current loans and other assets)

-90

-62

Net liability

614

810

2023

2022

Operational expense

31

18

Finance expense

34

12

The operating expense includes current service cost for €28 million (€15 million in 2022) (see also B.3.).
The 2022 figures were restated.

B.1. Management of risks
Over recent years, the Group has reduced its exposure to defined benefit plan obligations stemming from future services by converting existingplans into pension plans with a lower risk profile (hybrid plans, cash balance plans and defined contribution plans) or by closing them to newentrants.
Solvay continuously monitors its risk exposure, focusing on the following risks:
Asset volatility
Equity instruments, even though expected to outperform corporate bonds in the long-term, create volatility and risk in the short-term. To mitigate
this risk, the allocation to equity instruments is monitored using Assets and Liabilities Management techniques, to ensure it remains appropriate
given the respective schemes’ and Group’s long term objectives.
Changes in bond yields
A decrease in corporate bond yields will increase the carrying amount of the plans’ liabilities. For funded schemes this impact will be partially offset
by an increase in the fair value of the plan assets.
Corporate bond yields are highly dependent on global and local market situations, the decisions of central banks and the political situation.

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

323

Events that are currently impacting the financial markets are:· the perspective of slow growth in the world with a fragmentation by geographic zones;· the anticipation of a decrease of rates by the US and European central banks;· a reduction of the inflation but with signs of resistance of some elements of the underlying inflation;· continuing political instability due to the war in Gaza, Ukraine and tension with China plus US elections.
Consequently, yields in the major currency zones (Eurozone, the UK, and the US) are decreasing since Q4 2023 and are close or below levels at theend of 2022 (see Actuarial assumptions used in determining the liability). The result is an increase in the Group's defined benefit obligations in 2023.
Inflation risk
The defined benefit obligations are linked to inflation, and as a result, higher inflation may lead to an increase in the benefit obligation (although,in most cases, caps on the level of inflationary increases are in place to protect against extreme inflation). A limited part of the assets are either
unaffected by or only partially correlated with inflation, meaning that an increase in inflation will also increase the plans’ net liabilities.
The inflation rate in each country is based on the Global Economic Consensus Forecast (GCF) with the exception of the UK, where the information
is derived from the Bank of England. Long-term inflation assumptions have limited downward variation in the Eurozone in comparison to 2022. In
the UK, the outlook for the retail price index and consumer price index has decreased slightly from 2022.
Life expectancy
The majority of the schemes’ obligations are to provide benefits for the life of the member. Increases in life expectancy will therefore increase theplans’ liabilities.
Regulatory risk
Especially with respect to funded plans, the Group is exposed to the risk of external funding following regulatory constraints. This should not impact
the defined benefit obligation but could expose the Group to a potential significant cash outlay.

B.2. Description of obligations
The provisions have been set up to cover post-employment benefits granted by most Group companies in line, either with local rules and /or withestablished practices, which generate constructive obligations.
The largest post-employment plans in 2023 are in the United Kingdom, the United States, France, Germany, Belgium and Brazil. These six countries
represent 91% of the total defined benefit obligations and represent 98% of the total recognized plan assets.

December 31, 2023
Defined benefit obligations

In %Recognizedplan assets

Net liability/(asset)In %Ratio plan assets
on defined benefit obligationsof which asset surplus
recognized in thebalance sheet

United Kingdom

142

8%

139

3

0%

98%

12

United States

231

13%

207

24

4%

89%

10

France

632

34%

288

344

56%

46%

33

Germany

388

21%

190

199

32%

49%

0

Belgium

274

15%

292

-18

-3%

107%

34

Brazil

129

7%

90

39

6%

70%

0

Other countries

38

2%

16

23

4%

41%

2

1,836

100%

1,222

614

100%

67%

90

In €million

Total

The asset surplus represents an economic benefit for the Group or can revert to the company in case of wind up of the plans. The main countries
where recognized assets are surplus are in Belgium and France. In Belgium the surplus can be used to offset employer contributions. For France
the surplus relates to receivables for pensioners with annuity that are administered by the Group but are partially born by third party companies.

324

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

December 31, 2022
Definedbenefitobligations

In %Recognizedplan assets

Net liability/(asset)In %Ratio plan assets
on defined benefit
obligationsof which asset surplus
recognized in the balancesheet

United Kingdom

1,045

27%

1,031

14

2%

99%

0

United States

1,097

29%

984

113

14%

90%

0

France

722

19%

309

414

51%

43%

32

Germany

399

10%

201

198

24%

50%

0

Belgium

328

9%

330

-2

0%

101%

23

Brazil

114

3%

85

29

4%

74%

Other countries

95

3%

51

44

5%

54%

7

3,801

100%

2,990

810

100%

79%

62

In €million

Total

United Kingdom
Before the Partial Demerger, Solvay sponsored a few defined benefit plans in the United Kingdom; the largest one being the Rhodia Pension Fund.
It was closed to new entrants in 2003 and replaced by a defined contribution plan.
After the Partial Demerger, one defined benefit plans remains with Solvay, the Solvay Defined Benefits Pension Fund. It is a final salary fundedpension plan, with entitlement to accrue a percentage of salary per year of service. It was closed to new entrants in 2005 and replaced by a defined
contribution plan.
At December 31, 2023, about 9% of the liabilities are attributable to current employees, 25% to former employees and 66% to current pensioners.
Pension funds in the UK function and comply with local legislation under a large regulatory framework. The Pensions Regulator has a risk-based
approach to regulation and a code of practice, which provides practical guidance to trustees and employers of defined benefit schemes on how
to comply with the scheme funding requirements. In accordance with UK legislation, pension funds are subject to Scheme Specific Funding, which
requires that pension plans are funded prudently.
Each pension fund is governed by a Board of Trustees. They manage the fund with prudent and fair judgment. The Trustees determine the liabilities
used for Statutory Funding Objectives based on prudent actuarial and economic assumptions. Any shortfall or deficit once these liabilities have been
deducted from the fund’s assets must be reduced by additional contributions and in a time frame determined in accordance with the employer’s
ability to pay and the strength of covenant or contingent security being offered by the employer.
Pension funds are subject to a triennial valuation cycle for funding purposes. This valuation is performed by the scheme actuary in line with UK
regulations and is discussed between the Trustees and the sponsoring employer to agree the valuation assumptions and a funding plan.
For the Rhodia Pension Fund the last completed valuation was as of July 1, 2021. It established a fixed contribution rate of pensionable pay for
active members plus a deficit recovery plan. Recovery contributions have been increased so that the plan is expected to be fully funded by the endof 2027 in accordance with local regulations. In December 2023, before the plan was demerged, Solvay made a voluntary contribution (£75 million).
For the Solvay Defined Benefits Pension Fund, the last completed valuation was as of March 31, 2022, which established a fixed contribution rate ofpensionable pay for active members plus a deficit recovery plan. The current recovery plan foresees recovery contributions until June 2023. In May
2023 a voluntary contribution was paid to the fund (£10 million).
FranceSolvay sponsors several defined benefit plans in France. The largest plans are the French compulsory retirement indemnity plan and three closed
top hat plans. Solvay retains most of the liabilities for the defined benefit plans after Partial Demerger.
The main plan is for all former Rhodia employees who contributed to the plan prior to its closure in the 1970s. It offers a full benefit guarantee
based on the end-of-career salary; more than 99% of the liabilities are attributable to current pensioners. The plan is partially funded. At the end of
December 2023, an additional voluntary contribution was paid to the plan (€18 million).
In accordance with French legislation, adequate guarantees have been provided.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT

325

United States
Before the Partial Demerger, Solvay sponsored four defined benefit pension plans in the United States, one qualified plan and three non-qualified
plans. After the Partial Demerger, Solvay retains liabilities for members of the qualified plan and for members of one non-qualified plan.
A qualified plan is an employer-sponsored retirement plan that qualifies for special tax treatment under Section 401(a) of the Internal Revenue Code.
The defined benefit plans are closed to new entrants where newly hired employees are eligible to participate in a defined contribution plan. The
qualified defined benefit pension plan is funded while the non-qualified defined benefit pension plan is unfunded. The qualified plan makes up
most of the pension liabilities as of December 31, 2023.
Solvay's plans are in compliance with local laws regarding audited financial statements, governmental filings, and Pension Benefit Guaranty
Corporation insurance premiums where applicable. The plans are reviewed and monitored locally by fiduciary committees for purposes of plan
investments and administrative matters.
For the qualified plan, Solvay’s contributions take into account minimum (tax-deductible) funding requirements as well as maximum tax-deductible
contributions, both regulated by the tax authorities.
Certain eligible participants may elect to receive their pension in a single lump sum payment instead of a monthly payment.
At year-end, about 47% of the liabilities are attributable to current employees, 6% to former employees for whom benefit payments have not yet
commenced and 47% to current pensioners.
Germany
Solvay sponsors various defined benefit plans in Germany. The largest plans are a closed final-pay plan and an open cash balance plan. Most of theliabilities were retained by Solvay after the Partial Demerger. At December 31, 2023, broadly about 78% of the liabilities are attributable to current
pensioners. The plans are partially funded.
Belgium
Solvay sponsors two defined benefit plans in Belgium. These are funded pension plans. The plan for executives has been closed since the endof 2006, and the plan for the white and blue collars has been closed since 2004. The past service benefits provided under these plans continue tobe adapted each year considering annual salary increase and inflation (“Dynamic management”). In accordance with market practice in Belgium,
because of favorable retirement lump sum taxation, most benefits are paid as lump sum.
Furthermore, Solvay sponsors two open defined contribution plans, classified as defined benefit plans for accounting purposes due to the minimum
guarantees explained hereafter. These are funded pension plans which are open since the beginning of 2007 for the one in favor of the executives
and since the beginning of 2005 for the one in favor of the white and blue collars. Participants may choose to invest their contributions amongst four
different investment funds (from “Prudent” to “Dynamic”). However, regardless of their choices, the Belgian law foresees that the employer must
guarantee a return on employer contribution and on personal contribution, creating that way a potential liability for the Group. Since 2016 the return
has been fixed at 1.75% for both types of contributions, at the minimum of the range provided by law since January 1, 2016 (1.75% to 3.75%). At theend of 2023, net liability recognized in the consolidated statement of financial position concerning these plans is not material.
Solvay’s plans are administered through the Solvay Pension Fund that operates in compliance with local laws regarding minimum funding,investments principles, audited financial statements, governmental filings, and governance principles. The Pension Fund is managed through aGeneral Assembly and a Board of Directors delegating day-to-day activities to an operational committee.
Approximately 20% of the liability and plan assets were transferred out from the Solvay Pension Fund to a separate pension fund and are includedin the Partial Demerger.
Solvay sponsors a few other smaller pension plans. All these plans are insured.
Other plans
The majority of the obligations relate to pension plans. In some countries (mainly Belgium, Brazil, and the United States), there are also postemployment medical plans, which represent 4% (4% in 2022) of the total defined benefit obligation.

326

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

B.3. Financial impacts
Changes in net liability
2023

2022

Net amount recognized at beginning of period

810

1,123

Net expense recognized in P&L – Defined benefit plans

65

58

Actual employer contributions / direct actual benefits paid

-173

-227

Acquisitions and disposals

00Remeasurements before impact of asset ceiling

31

-157

Change in the effect of the asset ceiling limit on remeasurements-42

Reclassifications

2

2

Currency translation differences

09

The effect of Partial Demerger-116

Net amount recognized at end of period614

In €million

810

Remeasurements before the impact of asset ceiling €31 million comprise:· the favorable investment return on plan assets (excluding interests reported in the consolidated income statement) for €(132) million;· decrease in discount rates of €34 million mainly in the United States, United Kingdom, Brazil and Eurozone;· decrease in inflation rate of €(12) million for Eurozone;· other remeasurements due to changes in the other financial assumptions, demographic and experience effects of €141 million of which €114
million is due to effect of Partial Demerger.
Net expense
2023

2022

Current service costs

28

15

Past service costs (including curtailments and settlements)

10Service costs

29

15

Interest cost

86

35

Interest income

-52

-23

Net interest

34

12Administrative expenses paid

1

3

Net expense recognized in P&L – Defined benefit plans

65

30

Remeasurements recognized in other comprehensive income

26

-220

In €million

The 2022 figures are restated.
The service costs and administrative expenses of these benefit plans are recognized within cost of sales, administrative costs, research & development
costs or operating gains and losses and results from legacy remediation, and the net interest is recognized as a finance expense.
In 2023 the Group’s current service costs amount to €28 million (€20 million in 2022), of which €25 million (€11 million in 2022) related to funded plansand €4 million (€4 million in 2022) related to unfunded plans.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT

327

Net liability
December 31, 2023

December 31, 2022

Defined benefit obligations – Funded plans

1,678

3,477

Fair value of plan assets at end of period-1,222-2,995

Deficit for funded plans

456

482

Defined benefit obligations – Unfunded plans

159

323

Deficit / surplus (-)

614

805

0

4

Net liability (asset)

614

810

Provision recognized

705

873

Asset recognized

-90

-62

In €million

Amounts not recognized as asset due to asset ceiling (recognized in othercomprehensive income)Changes in defined benefit obligations
In €million

2023

2022

Defined benefit obligation at beginning of period

3,800

5,016

Current service costs

28

38

Past service costs (including curtailments)

1

1

Interest cost

86

99

Employee contributions

2

4

Settlements

00Acquisitions and disposals (-)

0

0

162

-1,067

Actuarial gains and losses due to changes in demographic assumptions

7-26

Actuarial gains and losses due to changes in financial assumptions-1-1,100

Actuarial gains and losses due to experience

156

59

Actual benefits paid

-134

-324

0

32

Remeasurements in other comprehensive income

Currency translation differences
Partial Demerger
Reclassification and other movements-2,14837

2

Defined benefit obligation at end of period

1,836

3,800

Defined benefit obligations – Funded plans

1,678

3,477

Defined benefit obligations – Unfunded plans

159

323

328

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Changes in the fair value of plan assets
In €million

2023

2022

Fair value of plan assets at beginning of period

2,995

3,896

Interest income

52

85

Remeasurements in other comprehensive income

132

-910

Return on plan assets (excluding amounts in net interests including on asset
surplus)

132

-910

Employer contributions

173

227

Employee contributions

2

4

Administrative expenses paid

-1

-5Acquisitions / Disposals (-)

00

Settlements

0

0

-134

-324

0

-23

Actual benefits paid
Currency translation differences
Partial Demerger-2,032

Reclassification and other movements

350Fair value of plan assets at end of period

1,222

2,995

184

-825

Actual return on plan assets (including on asset surplus)

In 2023, the total return on plan assets, i.e. including interest income, is a gain of €184 million against €825 million loss in 2022.
In 2023, the Group’s cash contributions amount to €173 million (€227 million in 2022), of which €29 million (€155 million in 2022) of voluntary cash
contributions, and €144 million (€72 million in 2022) of direct benefits payments and mandatory contributions to funds.
In 2023, the voluntary cash contributions were made to improve the funding level of the UK pension plans (€11 million) and France pension fund(€18 million) and increase de-risking with the additional plans assets.

Categories of plan assets
December 31, 2023

December 31, 2022

Equities

18%

20%

Bonds

76%

74%

Properties and infrastructures2%

3%

Cash and cash equivalents

3%

2%

Others

1%

1%

Total

100%

100%

With respect to the invested assets, it should be noted that these assets do not contain any direct investment in Solvay shares or in property or otherassets occupied or used by Solvay. This does not exclude Solvay shares being included in mutual investment fund type investments.

Changes in asset ceiling
2023

2022

Effect of the asset ceiling limit at beginning of period

42Partial Demerger-40Change in the effect of the asset ceiling limit on remeasurements

02

Effect of the asset ceiling limit at end of period

04

In €million

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

329

Assumptions regarding future benefits paid
The following are the expected benefits paid by the defined benefit plan in the future years.

In €million
PeriodTotal

Eurozone

United Kingdom

USA

Other

2024

137

94

7

21

15

2025

141

98

7

21

15

2026–2028

440

309

24

61

46

Actuarial assumptions used in determining the liability
Some of the retirement plans that Solvay has in place provide annuity payments that are adjusted on a regular basis to mitigate the effects for costof living increases.
The salary growth assumption is used to determine what will be the salary at the end of the career of the individuals, as the defined benefit planstake into account the last salary of the individuals. This assumption includes impacts of both inflation and merit increases.
The pension growth assumption defines the expected future adjustments for these annuity payments. The plan defines how these annuity payments
will be adjusted, and might be linked to inflation. Pension growth assumptions mainly apply for the defined benefit retirement plans in the United
Kingdom, France and Germany.
The long term inflation assumption is presented separately as salary growth and pension growth assumptions encompass more variables thaninflation.
Eurozone

Discount rates

UK

United States

2023

2022

2023

2022

2023

2022

3.00%

3.75%

4.50%

4.75%

4.75%

5.00%

Expected rates of future salary
increases

2.00% – 4.00%

2.00% – 4.25%

2.75%

2.50% – 3.00%

3.75%

3.00% – 3.50%

Long term inflation

2.00% – 2.25%

2.00% – 2.50%

2.75%

3.00%

2.25%

2.50%

Expected rates of pension growth

0.00% – 2.25%

0.00% – 2.50%

2.55%

2.80%

NA

NA

Actuarial assumptions used in determining the annual cost
Eurozone

USA

2023

2022

2023

2022

2023

2022

3.75%

1.00%

4.75%

2.00%

5.00%

2.75%

2.00% – 4.25%

1.75% – 4.00%

2.50% – 3.00%

2.50% – 3.00%

3.75%

3.00% – 3.50%

Discount rates
Expected rates of future salary
increases

UK

Long term inflation

2.00% – 2.50%

1.75% – 2.00%

3.00%

3.00%

2.50%

2.50%

Expected rates of pension growth

0.00% – 2.50%

0.00% – 2.00%

2.80%

2.80%

NA

NA

Actuarial assumptions regarding future mortality are based on recent country specific mortality tables. These assumptions translate at January 1,
2023, into an average remaining life expectancy in years for a pensioner retiring at age 65:
Belgium

FranceGermany

United Kingdom

United States

Male

19

25

21

22

21

Female

22

29

24

24

23

Male

20

28

23

23

22

Female

24

31

26

26

24

In years

Retiring at the end of the reporting period

Retiring 20 years after the end of the reporting period

330

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

For most countries the mortality assumptions reflect actual scheme experience and/or Solvay’s expectations in terms of future mortality improvements.
The actuarial assumptions used in determining the employee benefits obligation at December 31, 2023, are based on the following employee
benefits liabilities durations:
Duration in years

Eurozone

United Kingdom

United States

9.2

12.8

6.6

Sensitivities on the defined benefits obligation for the post-employment benefits
Each sensitivity amount is calculated assuming that all other assumptions are held constant. The economic factors and conditions often affectmultiple assumptions simultaneously.
Sensitivity to a change of percentage in the discount rates:

In €million

0.25% increase

0.25% decrease

Eurozone-28

28

United Kingdom-44United States-4

4

Others

-3

3

Total

-39

39

In €million

0.25% increase

0.25% decrease

Eurozone

25-24

United Kingdom

3-3

United States

00

Sensitivity to a change of percentage in the inflation rates:

Others

3

-2

Total

31

-29

0.25% increase

0.25% decrease

Eurozone3-3

United Kingdom

00

Sensitivity to a change of percentage in salary growth rates:

In €million

United States00

Others

0

0

Total

3

-3

Sensitivity to a change of one year on mortality tables – The table shows impacts when the age of all beneficiaries increases or decreases by one
year:

In €million

Age correction +1 year

Age correction -1 year

Eurozone-52

52

United Kingdom-44United States-4

4

Others

-4

4

Total

-64

64

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT331

NOTE F31
PROVISIONS

Accounting policy
GeneralProvisions are recognized when (a) the Group has a present obligation (legal or constructive) as a result of a past event, (b) it is probable that
the Group will be required to settle the obligation, and (c) a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of thereporting period, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money ismaterial, the amount is the present value of expenditures required to settle the obligation. Impacts of changes in discount rates are generally
recognized in the financial result.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable isrecognized as an asset if it is virtually certain that reimbursement will be received when the Group settles the obligation.

Restructurings
A restructuring provision is recognized when the Group has developed a detailed formal plan for the restructuring and has raised a valid
expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to thoseaffected by it. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring, which arethose amounts that are both necessarily entailed by the restructuring and not associated with the ongoing activities of the entity.

Environmental remediation costs
Environmental liabilities are mainly related to non-ongoing activities (shut-down sites, discontinued activities or divested activities where
Solvay maintains certain commitments) and, to a lower extent, to ongoing activities (see comments below).
An environmental provision is recognized, in accordance with IAS 37, when there is a current legal or constructive obligation resulting frompast events which will result in a probable outflow of resources (expenses / cash outs) to settle it and for which a reliable estimate of suchoutflows and timing can be made.
· The environmental expenses encompass, but are not limited to, the following key matters· Sampling and analytical costs for soil and ground water monitoring· Cost related to dismantling when required to meet a remediation or permit obligation· Asbestos removal when obligated by regulation· Environmental investigations and studies (Risk Assessments, Phase I and II soil and groundwater)
The closing amount of the environmental provisions is based on the net present value of the future cash flows needed, for current and futureyears, to settle remediation obligations. Forecast expenditures are based on external consultant estimates, where appropriate and possible.
Future expenditures are forecast and revised biannually and validated quarterly by Solvay finance and suitably qualified industrial experts
led by the Group Environmental Rehabilitation Director and benefit from inputs of legal department staff for the evolution of Environmental
Regulations.
In the absence of probable obligations, a contingent liability may be disclosed to represent the future possible liability. In some cases,
contingent liabilities cannot be quantified. See Note F36 Contingent assets, liabilities and financial guarantees.

332

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Restructuring

Environment

Litigation

Other

Total

December 31, 2022

119

702

97

123

1,041

Additions

104

362

28

147

641

0

-16

-10

-14

-40

-92

-72

-20

-37

-221

0

38

0

39

-3

1

-3

-47

-501

-35

Other

0

-4

December 31, 2023

83

506

Of which current provisions

36

87

In €million

Reversals of unused amounts
Uses
Increase/decrease through discounting
Remeasurements
Currency translation differences
Acquisitions and changes in consolidation scope
Disposals
Partial Demerger

-34

-617

16

12

61

202

852

19

161

302

The provisions decreased by €(189) million in 2023, of which, €(36) million for Restructuring, €(196) million for Environment and €(36) million for
Litigation, partially offset by an increase of €79 million for others.
See below for more details on the recognition and additions to the provisions.
The Provision decreased as consequence of Partial Demerger by €(617) millions
The movements in Other provisions mainly relate to post-closing adjustments resulting from M&A warranties including indemnities for environmental
remediation on sites subject to disinvestment.
Management expects provisions (other than employee benefits) to be used (cash outlays) as follows:In €million

up to 5 years

between 5 and 10 years

beyond 10 years

Total

208

506

Total provisions for environment

243

55

Total provisions for litigation

56

5

61

Total provisions for restructuring and other

279

6

285

December 31, 2023

578

66

208

852

Restructuring provisions
In 2023, these provisions amount to €83 million, compared with €119 million at the end of 2022.
The provisions at the end of 2023 mainly relate to the restructuring charges for the simplification of all support functions in the frame of the Group’s
simplification and transformation program, including the strategic transformation measures.

Environmental provisions
These provisions amount to €506 million at the end of 2023, compared with €702 million at the end of 2022, and pertain to:· mines and drilling operations to the extent that legislation and/or operating permits in relation to quarries, mines and drilling operations containrequirements to remedy or to pay compensation to third parties. Those provisions amount to €133 million at the end of 2023 and most of these,
based on local expert advice, can be expected to be used within 20 year horizon.
· lime dikes (settling ponds related mainly to soda ash plants), dump at sites and third party dump sites (linked to several industrial activities). These
provisions have an horizon of 1 to 20 years.
· Various types of pollution (organic, inorganic) coming from miscellaneous chemical productions; these provisions mainly cover discontinued
activities or closed plants. Most of these provisions have a horizon of 1 to 20 years;· The environmental provision decreased as consequence of Partial Demerger by €(501) millions which includes the environmental remediation of€323 million with NJDEP in US (see note F8).

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

333

The variation of environmental provisions also was impacted by lower discount rate increasing the present value of the overall liability by €16 million.
This effect, combined with the unwinding of the opening liabilities for €22 million resulted in a net increase of €38 million related to discounting.
The estimated amounts are discounted based on the probable date of settlement, and are periodically adjusted to reflect the passage of time.
The breakdown of the environmental provisions and related uses for the main countries/regions is reported here below:
December 31, 2023

December 31, 2022

Provisions

In %Provisions
ongoing
activities

Use ofprovisions

Provisions

In %Provisions
ongoing
activities

Use ofprovisions

France

147

29%

0

-21

145

21%

1

-24

Germany

115

23%

6

-4

112

16%

7

-5

Rest of Europe

170

34%

5

-17

144

21%

5

-15

In €million

North America

5

1%

0

-23

226

32%

0

-37

Rest of the world

69

13%

1

-10

74

11%

0

-8

Total

506

100%

12

-75

702

100%

12

-90

Provisions for litigation
Provisions for litigation refer to indirect tax and legal exposures. They amount to €61 million in 2023 (€97 million in 2022). The balance at the end of2023 relates to indirect tax risks (€11 million) and legal claims (€50 million).

Other provisions
Other provisions increased from €123 million at the end of 2022 to €202 million at the end of 2023. They relate to various risks, of which the mainones concern (i) the shutdown or disposal of activities and (ii) risk related to the execution of contracts or termination. Other provisions also included
a provision for litigation post M&A deal for which an indemnification asset for €21 million (In Other receivables/payables) has been recognized asforeseen in the Separation Agreement.
Other provisions relate to the shutdown or disposal of activities and amount to €202 million in 2023, compared with €123 million at the end of 2022.

334

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

NOTE F32
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT

Accounting policy
GeneralFinancial assets and liabilities are recognized when, and only when Solvay becomes a party to the contractual provisions of the instrument.
Amortized cost is the amount at which the financial asset or financial liability is measured at initial recognition minus the principal repayments,
plus or minus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity
amount and, for financial assets, adjusted for any loss allowance. The effective interest rate is the rate that exactly discounts estimated future
cash payments or receipts through the expected life of the financial asset or financial liability to the gross carrying amount of a financial asset
or to the amortized cost of a financial liability. When calculating the effective interest rate, the Group estimates the expected cash flows by
considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does notconsider the expected credit losses. The calculation includes all fees and points paid or received between parties to the contract that are an
integral part of the effective interest rate, transaction costs, and all other premiums or discounts.

Financial assets
Trade receivables are initially measured at their transaction price, if they do not contain a significant financing component, which is the casefor substantially all trade receivables. Other financial assets are initially measured at fair value plus, in the case of a financial asset not at fairvalue through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset.
A financial asset is classified as current when the cash flows expected to flow from the instrument mature within one year.
All recognized financial assets will subsequently be measured at either amortized cost or fair value under IFRS 9 Financial Instruments,
specifically:· A debt instrument that (i) is held within a business model whose objective is to collect the contractual cash flows and (ii) has contractual cash
flows that are solely payments of principal and interest on the principal amount outstanding is measured at amortized cost (net of any write
down for impairment), unless the asset is designated at fair value through profit or loss (FVTPL) under the fair value option.
· All other debt instruments are measured at FVTPL.
· All equity investments are measured in the consolidated statement of financial position at fair value, with gains and losses recognized in
profit or loss except that if an equity investment is not held for trading, nor contingent consideration recognized by an acquirer in a businesscombination, an irrevocable election can be made at initial recognition to measure the investment at FVTOCI, with dividend income
recognized in profit or loss. This classification is determined on an instrument-by-instrument basis. Upon derecognition, the cumulative
gains or losses previously recognized in other comprehensive income are reclassified to retained earnings.
· Equity investments in partnerships of investment funds are measured in the consolidated statement of financial position at fair value withgains and losses recognized in profit or loss. Based on the analysis of the characteristics of these funds the Group determined that they
were not eligible for the FVTOCI option and therefore are accounted for at FVTPL.
For instruments quoted in an active market, the fair value corresponds to a market price (level 1). For instruments that are not quoted inan active market, the fair value is determined using valuation techniques including reference to recent arm’s length market transactions
or transactions involving instruments which are substantially the same (level 2), or discounted cash flow analysis including, to the greatest
possible extent, assumptions consistent with observable market data (level 3). However, in limited circumstances, cost of equity instruments
may be an appropriate estimate of their fair value. That may be the case if insufficient more recent information is available to measure fairvalue, or if there is a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.

Impairment of financial assets
The impairment loss of a financial asset measured at amortized cost is calculated based on the expected loss model, representing theweighted average of credit losses with the respective risks of a default occurring as the weights. Expected credit losses are based on the
difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive,
discounted at an approximation of the original effective interest rate.
For trade receivables that do not contain a significant financing component (i.e. substantially all trade receivables), the loss allowance ismeasured at an amount equal to lifetime expected credit losses. Those are the expected credit losses that result from all possible default
events over the expected life of those trade receivables, using a provision matrix that takes into account historical information on defaults
adjusted for the forward-looking information per customer. The Group considers a financial asset in default risk when contractual payments
are 60 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external
information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit
enhancements held by the Group. A financial asset is fully impaired when there is no reasonable expectation of recovering the contractual
cash flows.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT

335

Impairment losses are recognized in the consolidated income statement, except for debt instruments measured at fair value through othercomprehensive income. In this case, the allowance is recognized in other comprehensive income.

Financial liabilities
Financial liabilities are initially measured at fair value minus, in the case of a financial liability not at fair value through profit or loss, transaction
costs that are directly attributable to the issue of the financial liability. Subsequently, they are measured at amortized cost, except for:· financial liabilities at fair value through profit or loss. Such liabilities, including derivatives that are liabilities, are subsequently measured atfair value;· financial guarantee contracts. After initial recognition, guarantees are subsequently measured at the higher of the expected losses and theamount initially recognized.

Derivative financial instruments
A derivative financial instrument is a financial instrument or other contract within the scope of IFRS 9 Financial Instruments with all three ofthe following characteristics:· its value changes in response to the change in a specified interest rate, financial instrument price, commodity price, foreign exchange rate,index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not
specific to a party to the contract (sometimes called the "underlying");· it requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would
be expected to have a similar response to changes in market factors;· it is settled at a future date.
The Group enters into a variety of derivative financial instruments (forward, future, option, collars and swap contracts) to manage its exposure
to interest rate risk, foreign exchange rate risk, and commodity risk (mainly utility and CO2 emission rights price risks).
As explained above, derivatives are initially recognized at fair value at the date a derivative contract is entered into and are subsequently
remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in income or expense, unlessthe derivative is designated and effective as a hedging instrument. The Group designates certain derivatives as hedging instruments of the
exposure to variability in cash flows with respect to a recognized asset or liability or a highly probable forecast transaction that could affectprofit or loss (cash flow hedges).
A derivative with a positive fair value is recognized as a financial asset whereas a derivative with a negative fair value is recognized as afinancial liability. Derivative instruments (or portions of them) are presented as non-current assets or non-current liabilities if the remaining
maturity of the underlying settlements is more than 12 months after the reporting period. Other derivative instruments (or portions of them)are presented as current assets or current liabilities.

Hedge accounting
The Group designates certain derivatives and embedded derivatives, in respect of interest rate risk, foreign exchange rate risk, Solvay shareprice risk, and commodity risk (mainly utility and CO2 emission rights price risks), as hedging instruments in a cash flow hedge relationship.
At the inception of the hedge relationship, there is a formal designation and documentation of the hedging relationship and the Group’s
risk management objective and strategy for undertaking the hedge. So to apply hedge accounting: (a) there is an economic relationshipbetween the hedged item and the hedging instrument, (b) the effect of credit risk does not dominate the value changes that result from that
economic relationship, and (c) the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged itemthat the Group actually hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged
item.
The requirement under (a) above that an economic relationship exists means that there is an expectation that the value of the hedging
instrument and the value of the hedged item will systematically change in the opposite direction in response to movements in either thesame underlying (or underlyings that are economically related in such a way that they respond in a similar way to the risk that is being
hedged).

336

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Cash flow hedges
The effective portion of changes in the fair value of hedging instruments that are designated in a cash flow hedge is recognized in othercomprehensive income.
The gain or loss relating to the ineffective portion is recognized immediately in profit or loss.
As long as cash flow hedge qualifies, the hedging relationship is accounted for as follows:· a) the separate component of equity associated with the hedged item (cash flow hedge reserve) is adjusted to the lower of the following(in absolute amounts):-(i) the cumulative gain or loss on the hedging instrument from inception of the hedge; and(ii) the cumulative change in fair value (present value) of the hedged item (i.e. the present value of the cumulative change in thehedged expected future cash flows) from inception of the hedge.

· b) the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge (i.e. The portion that is offset by
the change in the cash flow hedge reserve calculated in accordance with (a)) is recognized in other comprehensive income;· c) any remaining gain or loss on the hedging instrument (or any gain or loss required to balance the change in the cash flow hedge reserve
calculated in accordance with (a)) is hedge ineffectiveness that is recognized in profit or loss.
· d) the amount that has been accumulated in the cash flow hedge reserve in accordance with (a) is accounted for as follows:---(i) if a hedged forecast transaction subsequently results in the recognition of a non-financial asset or a non-financial liability, theGroup removes that amount from the cash flow hedge reserve and includes it directly in the initial cost or other carrying amount of
the asset or the liability. This is not a reclassification adjustment and hence it does not affect other comprehensive income;(ii) for cash flow hedges other than those covered by i), that amount is reclassified from the cash flow hedge reserve to profit or loss
as a reclassification adjustment in the same period or periods during which the hedged expected future cash flows affect profit orloss (for example, in the periods that interest income or interest expense is recognized or when a forecast sale occurs);(iii) however, if that amount is a loss and the Group expects that all or a portion of that loss will not be recovered in one or more
future periods, it immediately reclassifies the amount that is not expected to be recovered into profit or loss as a reclassification
adjustment.

Most hedged items are transaction related. The time value of options, forward elements of forward contracts, and foreign currency basis
spreads of financial instruments that are hedging the items affect profit or loss at the same time as those hedged items.
Hedge accounting is discontinued prospectively when the hedging relationship (or a part of a hedging relationship) ceases to meet thequalifying criteria (after taking into account any rebalancing of the hedging relationship, if applicable). This includes instances when thehedging instrument expires or is sold, terminated or exercised.
When the Group discontinues hedge accounting for a cash flow hedge it accounts for the amount that has been accumulated in the cash
flow hedge reserve as follows:· if the hedged future cash flows are still expected to occur, that amount remains in the cash flow hedge reserve until the future cash flows
occur. However, if that amount is a loss and the Group expects that all or a portion of that loss will not be recovered in one or more future
periods, it immediately reclassifies the amount that is not expected to be recovered into profit or loss as a reclassification adjustment;· if the hedged future cash flows are no longer expected to occur, that amount is immediately reclassified from the cash flow hedge reserve
to profit or loss as a reclassification adjustment. A hedged future cash flow that is no longer highly probable to occur may still be expected
to occur.

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

337

The following table presents the financial assets and liabilities as current or non-current according to their classification under IFRS 9.

In €million

Classification

Non-current assets – Financial instruments

December 31,
2023

December 31,
2022

Carrying
amountCarrying
amount234

464

Equity instruments measured at fair value through othercomprehensive income

Financial assets measured at fair value
through other comprehensive income1

24

Equity instruments measured at fair value through profit or loss

Financial assets measured at fair value
through profit or loss

87

47

Loans and other non-current assets (excluding pension fundsurpluses and long-term inventory balance)

Financial assets measured at amortized
cost

136

197

Financial instruments – Operational

10

196

Held for trading

5

130

Derivative financial instruments designated in a cash flow hedge Cash-flow hedge
relationship

5

66

1,598

4,093

840

2,026

118

206

Held for trading

Current assets – Financial instruments
Trade receivables

Financial assets measured at amortized
cost

Other financial instruments
Other marketable securities >3 months

Financial assets measured at amortized
cost

50

43

Currency swaps

Held for trading

2

1

Other current financial assets

Financial assets measured at amortized
cost

66

162

Financial instruments – Operational

56

929

Held for trading

11

553

Derivative financial instruments designated in a cash flow hedge Cash-flow hedge
relationship

45

376

584

932

Total assets – Financial instruments

1,833

4,557

Non-current liabilities – Financial instruments

2,051

2,753

Financial debt

1,981

2,450

Held for trading

Cash and cash equivalents

Financial assets measured at amortized
cost

Bonds

Financial liabilities measured atamortized cost

0

1,994

Other non-current debts

Financial liabilities measured atamortized cost

1,735

42

2

0

Derivative financial instruments designated in a cash flow hedge Cash-flow hedge
relationship
Lease liabilities IFRS 16 – Non-current portion

Lease liabilities measured at amortized
cost

243

413

Other liabilities

Financial liabilities measured atamortized cost

39

112

Financial instruments – Operational

32

192

Held for trading

17

146

Derivative financial instruments designated in a cash flow hedge Cash-flow hedge
relationship

15

46

1,344

3,646

Held for trading

Current liabilities – Financial instruments
Financial debt

211

510

Short-term financial debt

Financial liabilities measured atamortized cost

88

397

Currency swaps

Held for trading

1

2

Derivative financial instruments designated in a cash flow hedge Cash-flow hedge
relationship59

0

Lease liabilities IFRS 16 – Current portion

Lease liabilities measured at amortized
cost

63

111

Trade payables

Financial liabilities measured atamortized cost

850

2,296

108

676

19

492

Financial instruments – Operational
Held for trading

Held for trading

338

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Derivative financial instruments designated in a cash flow hedge Cash-flow hedge
relationship
Dividends payables

88

183

175

165

3,395

6,399

Financial liabilities measured atamortized cost

Total liabilities – Financial instruments

In 2022 and 2023, long-term CO2 inventory balances reported are not financial assets and hence are not included in the table above. They arepresented as other non-current assets.

F32.A. Overview of financial instruments
The following table gives an overview of the carrying amount of all financial instruments by category as defined by IFRS 9.

Financial Instruments
December 31, 2023

December 31, 2022

Carrying amount

Carrying amount

Fair value through profit or loss

105

731

In €million

Held for trading (financial instruments – operational – see note F25)

16

683

Held for trading (other financial instruments – see note F33, table Changes in financial debt)

2

1

Equity instruments measured at fair value through profit or loss

87

47

Financial assets measured at amortized cost

1,677

3,360

Financial assets measured at amortized cost (including cash and cash equivalents, tradereceivables, loans and other current/non-current assets except pension fund surpluses andlong-term inventory balance)

1,677

3,360

Financial assets measured at fair value through other comprehensive income

51

466

Derivative financial instruments designated in a cash flow hedge relationship (see note F25)

50

442

Equity instruments measured at fair value through other comprehensive income

1

24

1,833

4,557

Fair value through profit or loss

-37

-641

Held for trading (financial instruments – operational – see note F34)

-36

-639

Held for trading (financial debt – see note F33, table Changes in financial debt)-1-2

Financial liabilities measured at amortized cost

-2,887-5,005

Financial liabilities measured at amortized cost (excluding dividends payable and IFRS 16 leaseliabilities)-2,712-4,841Dividends payables

-175

-165

Lease liabilities measured at amortized cost

-307

-524

Lease liabilities IFRS 16 measured at amortized cost

-307

-524

Financial liabilities measured at fair value through other comprehensive income

-165

-229

Derivative financial instruments designated in a cash flow hedge relationship (see note F34)

-165

-229

-3,395-6,399Total financial assets

Total financial and lease liabilities

The category “Held for trading” contains derivative financial instruments that are used for management of foreign currency risk, utility and CO2
emission rights price risks, index and shares. Contracts which have been documented as hedging instruments (hedge accounting under IFRS 9
Financial Instruments) or which meet the exemption criteria for own use are not included in the category “Held for trading.”

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3339

Equity instruments measured at fair value through OCI pertained to Solvay’s New Business Development (NBD) activity that is, now, a part ofSyensqo and was subject to the Partial Demerger. In turn, at the end of 2023, €87 million of instruments at fair value through profit or loss relate tocapital instruments related to Syensqo Group.

F32.B. Fair value of financial instruments
Valuation techniques and assumptions used for measuring fair value.

Accounting policy
Quoted market prices are available for financial assets and financial liabilities with standard terms and conditions that are traded on active
markets. The fair values of derivative financial instruments are equal to their quoted prices, if available. In case such quoted prices are
not available, the fair value of the financial instruments is determined based on a discounted cash flow analysis using the applicable yield
curve derived from quoted interest rates matching maturities of the contracts for non-optional derivatives. Optional derivatives are fairvalued based on option pricing models, taking into account the present value of probability weighted expected future payoffs, using market
reference formulas.
The fair values of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models basedon discounted cash flow analysis.

Fair value of financial instruments measured at amortized cost (excluding IFRS 16 lease liabilities)
In €million

December 31, 2023

December 31, 2022

Carrying amount

Fair value

Carrying amount

Fair value

Non-current assets – Financial instruments

136

136

197

197

Loans and other non-current assets (except pension
fund surpluses and long-term inventory balance)

136

136

197

197

-1,774-1,774-2,148-1,994Non-current liabilities – Financial instruments
Bonds
Other non-current debts
Other liabilities

00-1,994-1,830-1,735-1,735

-42

-42

-39

-39

-112

-112

The carrying amounts of current financial assets and liabilities are estimated to reasonably approximate their fair values, due to the short term tomaturity.

Financial instruments measured at fair value in the consolidated statement of financial position
The table “Financial instruments measured at fair value in the consolidated statement of financial position” provides an analysis of financial
instruments that, subsequent to their initial recognition, are measured at fair value, grouped into Levels 1 to 3 based on the degree to which the fairvalue is observable. Financial instruments, classified as held for trading and as hedging instruments in cash flow hedges are mainly grouped into
Levels 1 and 2. They are fair valued based on forward pricing and swap models using present value calculations. The models incorporate various
inputs including foreign exchange spot and interest rates of the respective currencies, currency basis spreads between the respective currencies,
interest rate curves and forward rate curves of the underlying commodity. The equity instruments measured at fair value through OCI and throughprofit and loss are presented within Level 1 and 3. The fair value of the instruments presented under Level 3 is measured based on the guidelines
recommended by The International Private Equity and Venture Capital Valuation (IPEV).
In accordance with the Group internal rules, the responsibility for measuring the fair value level resides with (a) the Treasury department for the nonutility derivative financial instruments, and the non-derivative financial liabilities, (b) the Sustainable Development and Energy department for theutility derivative financial instruments and (c) the Finance department for non-derivative financial assets.
The Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level
input that is significant to the fair value measurement as a whole) at the end of each reporting period. During the year, no such transfers haveoccurred.

340

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Financial instruments measured at fair value in the consolidated statement of financial position
December 31, 2023
In €million

Level 1

Level 2

Level 3

Total

Held for trading

17

18— Foreign currency risk

3

3

— Utility risk

4

5

— Shares88— Index22— CO risk
2

Equity instruments measured at fair value through profit or loss
— Shares87

Cash flow hedges

0

87
50

50

— Foreign currency risk

22

— Interest rate risk

00

— Utility risk

47

48

— CO risk
200— Shares—E quity instruments measured at fair value through other comprehensive
income11— New Business Development

1

1

1

156

Total assets

8767

Held for trading

-37

-37

— Foreign currency risk

-1

-1

— Utility risk

-8-8

— CO risk

-26

-26

-2

-2

-165

-165

— Foreign currency risk

-1

-1

— Interest rate risk

-61

-61

— Utility risk

-59

-59

— CO risk

-44

-44

-202

-202

— Interest rate risk

2

— Shares— Index
Cash flow hedges

2— SharesTotal liabilities

The fair value of the financial instruments to manage the utility risk significantly reduced in 2023. This is mainly explained by the price decrease of
power and gas in 2023 in comparison to 2022.

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

341

December 31, 2022
In €million

Held for trading

Level 1

Level 2

483

200

683

5

5

— Foreign currency risk

Level 3Total

— Utility risk

466

188

654

— CO risk

17

4

21

— Solvay share price22— Index222

Equity instruments measured at fair value through profit or loss

47

47

— New Business Development

47

47

Cash flow hedges

184— Foreign currency risk

259

442

20

20

— Utility risk

44

236

280

— CO risk

140

2

142

2

Equity instruments measured at fair value throughother comprehensive income

2424— New Business Development

24

24

71

1,197

Total assets

667

459

Held for trading

-275

-366

-640

-3

-3

-313

-588

— CO risk

-46

-46

— Solvay share price-1–1— Index

-2

-2

-102

-229

-7

-7

— Foreign currency risk
— Utility risk

-275

2

Cash flow hedges-127— Foreign currency risk
— Utility risk

-103

-93

-195

— CO risk

-24

-2

-26

-1

-1

-468

-869

2

— Solvay share priceTotal liabilities

-401

342

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Movements of the period
Reconciliation of level 3 fair value measurements of financial assets and liabilities.
December 31, 2023
At fair value
through profit
or loss

At fair value through othercomprehensive income

Total

In €million

Equity instruments

Equity instruments

January 1

47

24

71

Total gains or losses— Recognized in profit or loss

2

2

— Recognized in other comprehensive income

0

0

8

8

-1

-1

-49

-30

-79

0

1

1

At fair value
through profit
or loss

At fair value through othercomprehensive income

Total

In €million

Equity instruments

Equity instruments

January 1

6217

Acquisitions

0

Capital decreases
Transfers out of level 3
Partial Demerger
December 31

December 31, 2022

79

Total gains or losses— Recognized in profit or loss

-15

— Recognized in other comprehensive income
Acquisitions

-15
8

8

-1

-1

-2

47

24

70

Capital decreases
Transfers out of level 3
December 31

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT

343

Income and expenses of financial instruments recognized in the consolidated income statement and in other comprehensive income
The figures for 2022 are restated.
2023

2022

— Foreign currency risk

39

-27

— Utility risk

-1

231

— Utility risk

86

259

— CO2 risk

15

2

Recognized in the gross margin

138

465

In €million

Recognized in the consolidated income statement
Recycling from OCI of derivative financial instruments designated in a cash flow hedge relationship

Changes in the fair value of financial instruments held for trading

Recycling from OCI of derivative financial instruments designated in a cash flow hedge relationship— Foreign currency risk
— Solvay share price
Changes in the fair value of financial instruments held for trading— CO2 risk

188

— Solvay share price-2

Gains and losses (time value) on derivative financial instruments designated in a cash flow hedge relationship— Foreign currency risk
Foreign operating exchange gains and losses

2

10

Recognized in other operating gains and losses

2

196— Recycling from OCI of derivative financial instruments designated in a cash flow hedge relationship— Foreign currency risk

0

Recognized in results from portfolio management and reassessments

0

Net interest expense

-24

-29

Financial charge on lease liabilities

-11

-10

Foreign currency risk

1

14Interest element of financial instruments

6

11

Others-7

Recognized in charges on net indebtedness (*)

-35

-14

106

647

Other gains and losses on net indebtedness (excluding gains and losses on items not related to financial
instruments)

Dividends from equity instruments measured at fair value through other comprehensive income
Total recognized in the consolidated income statement(*) The note F6 Net Financial Charges shows an amount of €(41) million for 2023 (€(12) million for 2022) reported under “Net cost of .” This amount includes€(6) million for 2023 (€3 million for 2022) of financial expenses not related to financial instruments that are excluded in this table from the line item “Recognized incharges on net indebtedness.”

The gain on highly probable sales in foreign currency recognized in gross margin for €39 million is mainly explained by the hedging of the US$
currency and the loss recognized on utility instruments for €(1) million are the result of the recycling of gains and losses of derivative financial
instruments designated in a cash flow hedge relationship.

344

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3The change in fair value of financial instruments held for trading recognized in gross margin is explained by:· a gain of €86 million (€259 million in 2022) mainly due to the price increase of gas and electricity;· a gain of €15 million (a gain of €2 million in 2022) mainly due to the price variation of CO2;In 2022, the gain of €188 million recognized in other operating gains and losses is mainly explained by the CO2 emission rights, previously considered
under the “own use” exemption. The remaining amounts are related to changes in fair value of equity swaps for long-term incentives.
In 2023, in the caption other gains and losses on net indebtedness, the foreign exchange income decreased by €(13) million in comparison to 2022.
The gain of €6 million (€11 million for 2022) is related to the interest element of financial derivatives (forward points). The other costs increased by€(7) million in 2023 in comparison to 2022 due to one off costs incurred in the frame of the separation plan.
Income and expenses on financial instruments recognized in other comprehensive income include the following:
Cash flow hedges

In €million

Foreign currency
riskInterest rate risk
2023

2022

Commodity risk

Risk on Solvay
share price

2023

2022

2023

67

7

2023

2022

January 1

13-7

Recycling from other comprehensive income of derivative financial
instruments designated in a cash
flow hedge relationship

-41

31

9

13

-257

Effective portion of changes in fairvalue of cash flow hedge

29

-10

-70

-167

317

December 31

1

13

-61

-87

67

Total

2022

2023

2022

2

81

1

-20

-226

-1

-209

306

1

-148

81

Conventionally, (+) indicates an increase and (-) a reduction in equity.

F32.C. Capital management
See 2 Capital, shares and shareholders in respect of capital in the Corporate Governance statement chapter of this annual report.
The Group manages its funding structure with the objective of safeguarding its ability to continue as a going concern, optimizing the return forshareholders, maintaining an investment-grade rating, and minimizing the cost of debt.
The capital structure of the Group consisted of equity (including perpetual hybrid bonds on December 31, 2022 (see note F28 Equity)) and of net
debt (see note F33 Net indebtedness). Perpetual hybrid bonds were nevertheless considered as debt in the Group’s underlying metrics. There areno hybrid bonds at the end of 2023.
Besides the statutory minimum equity funding requirements that apply to the Company’s subsidiaries in the different countries, Solvay is not subject
to any additional legal capital requirements.
The Treasury department reviews the capital structure on an ongoing basis under the authority and the supervision of the Chief Financial Officer. As
appropriate, the Legal department is involved to ensure compliance with legal and contractual requirements.

F32.D. Financial risk management
The Group is exposed to market risk from movements in foreign exchange rates, interest rates and other market prices (utility prices, CO2 emission
rights prices and equity prices). The Group’s senior management oversees the management of these risks and is supported by the Treasury
department (non-commodity risks) and Solvay Sustainable Development and Energy department that advise on financial risks and the appropriate
financial risk governance framework for the Group. Both departments provide assurance to the Group’s senior management that the Group’s
financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed inaccordance with the Group’s policies and risk objectives. Solvay uses derivative financial instruments to hedge clearly identified foreign exchange,interest rate, index, utility price and CO2 emission rights price risks (hedging instruments). All derivative activities for risk management purposes
are carried out by specialist teams that have the appropriate skills, experience and supervision. However, the required criteria to apply hedge
accounting are not met in all cases.
Furthermore, the Group is also exposed to liquidity risks and credit risks.

Foreign currency risks· The Group is an essential chemical company with operations worldwide, and hence undertakes transactions denominated in foreign currencies.
Consequently, the Group is exposed to exchange rate fluctuations. In 2023, the Group was mainly exposed to US Dollar, Chinese Yuan andBrazilian Real.
· To mitigate its foreign currency risk, the Group has defined a hedging policy that is essentially based on the principles of financing its activities inlocal currency and hedges the transactional exchange risk at the time of invoicing (risk which is certain). The Group constantly monitors its activities
in foreign currencies and hedges, where appropriate, the exchange rate exposures on expected cash flows (risk which is highly probable).

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

345· Exchange rate exposures are managed within approved policy parameters utilizing forward foreign exchange contracts or, when appropriate,
other derivatives like currency options.
· In the course of 2023, the €/US$ exchange rate moved from 1.0674 at the start of January to 1.1052 at the end of December (from 1.1327 to 1.0674
in 2022).
· A fluctuation of (0.10) to the US$/€exchange rate, would generate in 2023 about €30 million (€180 million for 2022) variation to the EBITDA; 63% of
this variation is at conversion level and 37% at transaction level, the latter being mostly hedged. EBITDA is the key non-IFRS metric for operational
performance as defined in the glossary.
· At the end of 2023, a strengthening of the US dollar vs euro would increase the net debt by approximately €0 million (€87 million in 2022) per 0.10
US$/€fluctuation. Conversely, a weakening of the US dollar vs euro would decrease the net debt by approximately €0 million (€72 million in 2022)
per 0.10 US$/€fluctuation.
· The Group’s currency risk can be split into two categories: translation and transactional risk.

Translation risk
· The translation exchange risk is the risk affecting the Group’s consolidated financial statements related to investees operating in a currency otherthan the euro (the Group’s presentation currency).
· During 2023 and 2022, the Group did not hedge the currency risk of foreign operations.

Transactional risk
The transactional risk is the exchange risk linked to a specific transaction, such as a Group entity buying or selling in a currency other than its
functional currency.
To the largest extent possible, the Group manages the transactional risk on receivables and borrowings centrally and locally when centralization is
not possible.
The choice of borrowing currency depends mainly on the opportunities offered by the various markets. This means that the selected currency is
not necessarily that of the country in which the funds will be invested. Nonetheless, operating entities are financed essentially in their functional
currencies.
In emerging countries, it is not always possible to borrow in local currency, either because funds are not available in local financial markets, or
because the financial conditions are too onerous. In such a situation, the Group has to borrow in a different currency. Nonetheless, the Groupconsiders opportunities to refinance its borrowings in emerging countries with local currency debt.
Derivatives are initially recognized at fair value at the date a derivative contract is entered into and are classified into the two categories described
below.

Held for trading
The transactional risk is managed either by spot or forward contracts. Unless documented as hedging instruments (see above), derivative financial
instruments are classified as held for trading.
In 2023, the notional amounts transacted to manage the transactional risk are:· a long position of €271 million (compared to €343 million in 2022);· a short position of €(284) million (compared to €(666) million in 2022);· In comparison to 2022, the separation plan that occurred in 2023 led to a decrease of the transactional risk (mainly in China) that impacted theshort position by €(382) million.
The following table details the notional amounts of the Group’s derivatives contracts outstanding at the end of the period:
In €million

Notional amount (1)Fair value assets

Fair value liabilities

December 31

2023

2022

2023

2022

2023

2022

Held for trading long position

271

343

1

1

-1

-1

Held for trading short position

-284

-666

2

4

0

-2

Total

-13

-323

3

5

-1

-3

(1) Long/(short) positions (if the foreign exchange transaction does not involve the functional currency, both notional amounts are considered).

Cash flow hedge
The Group uses derivatives to hedge identified foreign exchange rate risks. It documents those as hedging instruments unless it hedges arecognized financial asset or liability when generally no cash flow hedge relationship is documented. Most hedges are transaction related.
At the end of 2023, the Group had mainly hedged highly probable sales in foreign currencies (short position) in a nominal amount of US$203 million(€184 million) and JP¥134 million (€1 million). All cash flow hedge contracts that exist at the end of December 2023 will be settled within the next
12 months, and will impact profit or loss during that period.

346

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3The following table details the notional amounts of Solvay’s derivatives contracts outstanding at the end of the period:

NOTIONAL AMOUNTS
December 31, 2023
In €million

Notional
amount oftheinstrument (1)Notional
amountof the risk
exposure (1)Percentageof exposure
hedgedAverage hedge
exchange rate
per risk category

Cash flow
hedge
reserve

Fair value of thehedging instrument

EquityAssetsLiabilities

Cash flow hedges – Forecasted sales and purchases (3)JPY/EUR

-1

-1

50%

(2)

126.940

0

0

JPY/USD

0

-3

4%

(4)

145.331

10

Total JPY

-1

-4

1

1

0

USD/BRL

-63

-106

60%

(2)

4.78

0

0

0

USD/CNY

-68

-138

49%

(2)

6.92

0

0

0

USD/EUR

-24

-37

66%

(2)

1.13

0

1

-1

USD/MXN

-11

-23

48%

(2)

18.32

-1

0

-1

USD/THB

-17

-39

44%

(2)

33.75

0

0

0

Total USD

-184

-342

-1

1

-2

Total

-185

-346

0

2

-2

(1) Long/(short) positions.
(2) In compliance with Group Treasury Policy the percentage of hedged exposure will reach the progressive minimum compliance level of 60% in 2023.
(3) The hedging instruments are located in the line item: "Other Receivables" and "Other Liabilities" in the statement of financial position.
(4) In compliance with Group Treasury Policy the hedging will be stopped in 2024 due to the low materiality exposure.

Hedge relationships are seldom perfect. Therefore, ineffectiveness could arise with the result that changes in the fair value or cash flows of thehedged item that are attributable to a hedged risk and the hedging instrument do not offset within a period. The sources of hedge ineffectivenessthat could potentially affect the hedging relationship during its term are listed below:· A reduction in the amount of the forecast sales resulting in quantity or notional amount differences – the hedged item and hedging instrument
are based on different quantities or notional amounts.
· A significant change in the credit risk of parties.
Timing differences – the hedged item and hedging instrument occur or are settled at different dates.
In 2023, no hedge ineffectiveness was recognized in the consolidated income statement.
December 31, 2022
In €million

Notional
amount of
the instrument (1)Notional
amount of therisk exposure (1)Percentageof exposure
hedgedAverage hedge
exchange rate
per risk category

Cash flow
hedge
reserve
EquityCash flow hedges – Forecasted sales and purchases
JPY/EUR-71

Fair value of thehedging instrument

AssetsLiabilities

(3)

-147

48%
48%

(2)

139.170

1

1132.47

-1

1

2

-1

1

2

JPY/USD-42-87

Total JPY

-113

-234

USD/BRL

-187

-285

66%

(2)

5.28

3

3

0

USD/CNY

-157

-353

45%

(2)

6.82

-1

1

2

USD/EUR

-340

-674

50%

1.05

8

10

2

USD/MXN

-66

-135

49%

(2)

21.01

3

3

0

USD/THB

-36

-79

45%

34.69

1

1

0

Total USD

-786

-1,525

14

19

5

Total

-899

-1,7591320

7(1) Long/(short) positions.
(2) In compliance with Group Treasury Policy the percentage of hedged exposure will reach the progressive minimum compliance level of 60% in 2022.
(3) The hedging instruments are located in the line item: "Other Receivables" and "Other Liabilities" in the statement of financial position.

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3347

Effects of IBOR market developments
All the new Liquidity Facilities (RCF, Bilateral lines) have been negotiated using only SOFR reference index and not IBOR anymore. This will not have
any impact financially.
The ISDA's agreements were as well amended to include the SOFR.
All the other old agreements (before June 2023) still reflect IBOR on the agreements. Banks in that case will apply market standard approach anduse the new SOFR reference rate for those agreements, therefore will not have an impact on our financial charges nor relations.

Interest rate risks
See the Financial risk in the Management of risks section of this annual report for additional information on the interest rate risks management.
· Interest rate risk is managed at Group level.
· The Group is exposed to interest rate risk because entities in the Group borrow funds at both fixed and floating interest rates. Interest rate risk ismanaged at Group level by maintaining an appropriate mix between fixed and floating rate borrowings.
Interest rate exposure by currency is summarized below:
In €million

December 31, 2023

December 31, 2022

Fixed rate

Floating rate

Total

Fixed rate

Floating rate

Total

EUR

-164

-1,840-2,003-1,642-32-1,673

USD

-137

-2

-139

-1,153-11-1,163

BGN

-1

-1

-2

0

-33

-33

Currency
Financial debt

INR

0

0

0

-11

-6

-17

KRW

-2

-10

-12

-19

-7

-26

THB

-9

0

-10

-12

0

-12

BRL

-8

-2

-10

-12

0

-12

Other

-13

-3

-16

-22

-1

-23

Total

-333

-1,859-2,192-2,870-90-2,959

EUR

297

297

201

201

USD

138

138

320

320

Cash and cash equivalents

CAD

2

2

53

53

THB

22

22

28

28

SAR

8

8

11

11

BRL

65

65

177

177

CNY

16

16

22

22

KRW

6

6

7

7

JPY

10

10

30

30

Other

20

20

83

83

Total

584

584

932

932

CNY

12

12

43

43

EUR

65

65

185

185

SAR

4

4

4

4

Other financial instruments

Other

38

38

4

4

Total

118

118

236

236

-1,156-1,4891,078-1,791

Total

-333

At the end of 2023, €1,859 million of the Group’s gross debt was at floating-rate, and is largely comprised of:· bridge facility in for a total of €1,500 million maturing in 2025 (carrying amount of €1,500 million);· a term loan for an amount of €200 million.

-2,870

348

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3The latter are subject to interest rate hedging via zero cost interest collar (for the bridge facility of €1,500 million) and interest rate swaps (for the termloan of €200 million) reducing the volatility to interest rate fluctuations (discussed below).
The fixed-rate debt is mainly comprised of IFRS 16 lease liability for a total of €307 million (carrying amount of €307 million).
The impact of interest rate volatility at the end of 2023 compared to 2022 is the following:Sensitivity to a + 100bp movement in
EUR market interest rates
In €million

Profit or loss

Sensitivity to a - 100bp movementin EUR market interest rates

2023

2022

2023

2022

-7

-1

6

1

The sensitivity to interest rates volatility on the floating gross financial debt remains insignificant at the end of 2023 compared to 2022 thanks to theinterest rates hedging. Most of the sensitivity disclosed in 2023 corresponds to the remaining volatility between the maximum interest rate payable(cap strike rate) and the minimum rate (floor strike rate) following the hedging of the bridge facility (€1,500 million) via zero cost interest collar.

Interest rate risk hedged by instrument accounted for as held for trading
In 2023 and 2022, there are no outstanding interest rate instruments accounted for as held for trading.

Interest rate risk hedged by instrument accounted for as a hedging instrument in a cash flow hedge
In 2022, there are no outstanding interest rate instruments accounted for under cash flow hedges. In 2023, in the context of the execution of liability
management prior to the Partial Demerger the Group has decided to hedge executed floating rate debts and drawdowns executed in 2023(€1.7 billion) as well as future long-term refinancing:

December 31, 2023
In €million

Notional
amount oftheinstrument

Notional
amount of therisk exposure(1)

Percentageof exposure
hedgedHedge interest
rate per risk
category

Cash flow
hedge
reserve(1)

Cash flow hedges on
floating interests rates

Fair value ofthehedging
instrument

Equity Assets

Liabilities

Floating rate debt
(Euribor6M)

200

200

100%

3.52%

-2

0

-2

Floating rate debt
(Euribor1M)

1,500

1,500

100%

3.55%

-1

0

-1

Future long-term
refinancing (Euribor6M)

750

750

100%

3.20%
+ Fixed margin

-25

0

-25

Future long-term
refinancing (Euribor6M)

750

750

100%

3.05%
+ Fixed margin

-33

0

-33

3,200

3,200

-61

0

-61

Total

Other market risks
Utility and CO2 price risks
The Group purchases a large portion of its coal, gas and electricity needs in Europe and the United States based on fluctuating liquid market indices.
Moreover, the Group purchases raw materials with a price formula referring to market indices. In order to reduce the cost volatility, the Group has
developed a policy for exchanging variable price against fixed price through derivative financial instruments. Most of these hedging instruments
can be documented as hedging instruments of the underlying purchase contracts. Utility purchase contracts at fixed price with a physical delivery
for use in the Group's operations are qualified as own use contracts and constitute a natural hedge. Those have not been included in this note.
Financial hedging of utility and CO2 emission rights price risks is managed centrally by Energy Services on behalf of the Group entities.
Energy Services also carries out trading transactions with respect to utility and CO2.

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

349

The following tables detail the notional principal amounts and fair values of utility and CO2 derivative financial instruments outstanding at the endof the reporting period:
Held for trading

Notional amount of
the instrument (1)December 31

2023

Notional amount of the instrument(in units)

2022

2023

2022

Fair value of the
instrument – AssetFair value of the instrument – Liability

2023

2022

2023

2022

In €million (except where indicated)
Coal

Tons

Power

22

922

118,090

7,318,874

MWh

0

307

-13

-306

Standard Quality Gas

21

619

811,174

13,372,959

MWh

10

347

0

-282

394,500

707,550

Tons

0

21

-26

-46

10

675

-39

-634

CO2

9

10

Total

52

1,550

(1) The hedging instruments are located in the line item: "Other Receivables" and "Other Liabilities" in the consolidated statement of financial position.

The amounts presented in the tables hereafter include hedging needs of the GBUs of the Group that are sourced through Energy Services, and not
the full Group utility hedging needs.
December 31, 2023
Cash flow
hedge

Notional
amountof theinstrument

Notional
amount of the
instrument (inunits)(1)

Notional
amountof the risk
exposure

Notional amountof the risk
exposure (inunits)

Percentageof
exposure
hedgedAveragehedge
price
per risk
category

Cash
flow
hedge
reserve

Fair valueof theinstrument– AssetFair valueof theinstrument– Liability

In €million (except where indicated)
Benzene
Coal
Power

112

781,326MWh

181

1,763,316

MWh

44%

142

EUR/
MWh

30

33

-3

Standard
QualityGas

245

12,343,602

MWh

579

24,542,118

MWh

50%

27

EUR/
MWh

-41

15

-56

CO (2)

553

3,469,500

Tons

801

9,230,909

Tons

38%

87 EUR/Tons

Total

909

2

1,561

-43

0

-44

-54

48

-102

Cash
flow
hedge
reserve

Fair valueof theinstrument– AssetFair valueof theinstrument– Liability(1) The hedging instruments are located in the line item: "Other Receivables" and "Other Liabilities" in the consolidated statement of financial position.
(2) Excluding the reserve frozen in OCI, following roll-over transactions (€(33) million)

December 31, 2022
Cash flow
hedge

Notional Notional amountamount of the instrumentof the(in units)
instrument

Notional
amountof the risk
exposure(1)

Notional
amount of therisk exposure(in units)

Percentageof
exposure
hedgedAveragehedge
price
per risk
categoryIn €million (except where indicated)
Benzene
Coal
Power

154

1,078,973

MWh

702

3,505,469

MWh

31%

132

EUR/
MWh

71

40

-111

Standard
QualityGas

330

13,525,810

MWh

1,650

34,722,420

MWh

39%

33

EUR/
MWh

-156

240

-84

CO

368

5,440,050

Tons

1,150

24,096,508

Tons

45%

61

EUR/
Tons

152

142

-26

Total

852

67

422

-221

2

3,502

(1) The hedging instruments are located in the line item: "Other Receivables" and "Other Liabilities" in the consolidated statement of financial position.

Solvay's strategic decision to discontinue external commercial activities and the Partial Demerger resulted in the reduction of volumes and notionalamounts, aligning with our continuous efforts to optimize the portfolio, concentrate on core activities, and enhance operational efficiency.

350

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Hedge relationships are seldom perfect. Therefore, ineffectiveness could arise with the result that changes in the fair value or cash flows of thehedged item that are attributable to a hedged risk and the hedging instrument do not offset within a period. The sources of hedge ineffectivenessthat could potentially affect the hedging relationship during its term are listed below:· A reduction in the amount of the forecast sales resulting in quantity or notional amount differences – the hedged item and hedging instrument
are based on different quantities or notional amounts.
· A significant change in the credit risk of parties.
· Timing differences – the hedged item and hedging instrument occur or are settled at different dates.
In 2023, no hedge ineffectiveness was recognized in the consolidated income statement.

Fair value hedge
The Group covered a part of its CO2 emission rights in inventory by forward sales of CO2 emission rights to a related party. The Group qualifies thishedging strategy as fair value hedge. The change in fair value of forward sales are accounted for in profit and loss, concomitantly with the revaluationof the CO2 emission rights held in inventory.
The Group has established a 1:1 hedge ratio for the underlying risk of the forward sales of CO2 emission rights to the related party that is identicalto the hedged risk component.
The impact of the hedging instrument on the statement of financial position as at December 31, 2023, is as follows:
December 31, 2023
Carrying amount

Notional
In Tons

AssetsIn €million

Balance sheetline item(s)Liabilities

Change in fair value used
for calculating hedge
ineffectiveness
AssetsIn €million

Liabilities

In €million

Fair Value Hedge
CO2 emission
rights forwards

25,000

0

Financial
Instrument

-2

1

-1

December 31, 2023
Balance sheetline item(s)Carrying amount
Notional

AssetsIn Tons

In €million

In €million

25,00002Liabilities

Change in fair value used for
calculating hedge
ineffectiveness
AssetsLiabilities

In €million

Fair value hedge
CO2 emission
rights forwards

Inventories

1

December 31, 2022
Carrying amount
Notional

AssetsBalance sheet line
item(s)Liabilities

Change in fair value used for calculating hedge
ineffectiveness
AssetsIn Tons In €million In €million

Liabilities

In €million

Fair value hedge
CO emission rights
forwards
2

86,500

1-6

Financial
instrument-6

December 31, 2022
Carrying amount
Notional

AssetsChange in fair value used for
calculating hedge ineffectiveness

Balance sheet line item(s)Liabilities

AssetsIn Tons In €million In €million

In €million

Fair value hedge
CO emission rights
forwards
2

86,500-1

7Liabilities

Inventories

6

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

351

The sensitivities of commodity derivative financial instruments as of December 31, 2023, are presented below.
The sensitivities were defined based on the price levels and volatility levels of each commodity. These assumptions do not constitute an estimationof future market prices and the sensitivities presented are not representative of future changes in Solvay's equity and results.
December 31, 2023
Price change

Other comprehensive income

Profit or loss

Natural gas+€10 / MWh82

0Natural gas-€10 / MWh-820Electricity+€30 / MWh-230Electricity-€30 / MWh230

CO2 emission rights+€5€ / T

220

CO2 emission rights-€5 / T

-22

0

In €million

Performance Share Units Plan (PSU) risk on Solvay share priceIn order to neutralize the volatility of the Solvay share price, which will impact the liability valuation relating to the cash settled PSU plans (with related
employer charges), the Group entered into a hedge covering 100% of the risk for 2023 employee reward plan (fully unwound prior to separation).
PSU plan 2022 hedges were unwound during the 2023 year prior separation date. The group will assess during 2024 the necessary steps to mitigate
future potential risk.

Credit risk
See the Financial risk in the Management of risks section of this annual report for additional information on credit risk management.
The Group continuously monitors the credit risk of important business partners.
The Group engages in transactions only with financial institutions with a good credit rating. The Group monitors and manages exposures to financial
institutions within approved counterparty credit limits and credit risk parameters in order to mitigate the risk of default. For financial guarantees, seenote F36 Contingent assets, liabilities and financial guarantees.
The Group recognizes expected credit losses on all of its trade receivables: it applies the simplified approach and recognizes lifetime expected
losses on all trade receivables, using a provision matrix in order to calculate the lifetime expected credit losses for trade receivables, using historicalinformation on defaults adjusted for the forward-looking information.
The Group classifies the customers and their related receivables in various rating classes, based on the risks’ grading attributed to the customers
and on the aging balance of receivables. As such, for all receivables overdue below six months, the Group considers percentages within a range
between 0.005% and 4.031%, depending on the rating class. For all receivables overdue in excess of six months, the Group considers a rate of 50%
or of 100%, depending on the rating class. The customer’s grading is reviewed annually for customers assessed as low risk profile, and every six
months for customers assessed as higher risk profile.
There is no significant concentration of credit risk at Group level because the receivables’ credit risk is spread over a large number of customers
and markets.

352

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3The aging of trade receivables, financial instruments – operational, loans and other non-current assets is as follows:
December 31, 2023

With expected loss allowance, not credit-impaired
Total

Creditimpaired

Not pastdueLess than
30 dayspast due

Between 30
and 60 days
past due

Between 60
and 90 days
past dueMorethan 90days
past due

Trade receivables

894

55

802

28

1

6

3

Trade receivables – allowance

-54

-53

-1

Trade receivables – net

840

3

801

Financial instruments –operational

66

Loans and other non-current assets

140

4Loans and other non-current assets– allowance

-4

-4

136
1,042

In €million(1)

Loans and other non-current
assets – net
Total
(1)

28

1

6

2

66
135

0

0

135

0

0

0

0

3

1,002

28

1

6

2

Loans and other non-current assets do not include pension fund surplus and long-term inventory.

December 31, 2022

With expected loss allowance, not credit-impaired
Total

Creditimpaired

Not pastdueLess than
30 dayspast due

Between 30
and 60 days
past due

Between 60
and 90 days
past dueMorethan 90days past
due

2,098

68

1,986

33

6

1

3

-72

-67

-2

0

Trade receivables – net

2,026

1

1,984

33

Financial instruments –operational

1,125

In €million

Trade receivables
Trade receivables – allowance

-2
6

1

1

1,125

Loans and other non-current
assets (1)

208

11

Loans and other non-current
assets – allowance

-11

-11

Loans and other non-current
assets – net (1)

197
3,348

Total
(1)

-1

197

0

0

197

0

0

0

0

1

3,306

33

6

1

2

Loans and other non-current assets do not include pension fund surplus and long-term inventory.

The table below presents the allowances on trade receivables:In €million

2023

2022

January 1

-72

-51

Additions

-11

-22

Uses

5

2

Reversal

91

Currency translation differences-1-2

Transfer to assets held for sale00Partial Demerger

14

Other

0

0

-54

-72

December 31

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3353

Liquidity risk
See the Financial risk in the Management of risks section of this annual report for additional information on the liquidity risk management.
Liquidity risk relates to Solvay’s ability to service and refinance its debt (including notes issued) and to fund its operations.
This depends on its ability to generate cash from operations and not to overpay for acquisitions. In addition, external factors impacting the global
liquidity markets could also make financing sources less accessible.
The Finance Committee gives its opinion on the appropriate liquidity risk management for the Group’s short, medium and long term funding andliquidity management requirements.
The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring
forecasts and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
The Group staggers the maturities of its financing sources over time in order to limit amounts to be refinanced each year.
The following tables detail the Group’s remaining contractual maturity for its financial liabilities with contractual repayment periods.
The tables have been prepared using the discounted cash flows of financial liabilities, based on the earliest date on which the Group can berequired to pay.
The following tables present discounted amounts (carrying amounts):
December 31, 2023

In €million

Outflows of cash:

Total

Within one year

Trade payables

850

850

Dividends payables

175

175

Financial instruments – operational

140

108

Other non-current liabilities

34

In year two

In years three
to five

Beyond five years

12

2

20

32

Financial debt

1,885

148

1,711

23

3

Leasing debt

307

63

44

92

107

3,390

1,344

1,799

117

130

In year two

In years three
to five

Beyond five years

20

172

59

26

14

Total

December 31, 2022

In €million

Total

Within one year

2,296

2,296

Dividends payables

165

165

Financial instruments – operational

867

675

Other non-current liabilities

99

Outflows of cash:
Trade payables

Financial debt

2,435

399

10

1,423

604

Leasing debt

524

111

90

160

164

6,386

3,646

178

1,781

782

Total

354

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3The following tables present undiscounted amounts (nominal value):
December 31, 2023

In €million

Total

Within one
year

Trade payables

850

850

Dividends payables

175

175

Financial instruments – operational

140

108

Other non-current liabilities

34

Outflows of cash:

In year two

In years three
to five

Beyond five
years

12

2

20

32

Financial debt

1,886

148

1,711

23

4

Leasing debt

307

63

44

92

107

3,391

1,344

1,799

117

131

179

82

61

17

19

3,570

1,426

1,860

134

150

In year two

In years three
to five

Beyond five
years

20

172

59

26

14

Total
Interests on financial debt and lease liabilities
Total outflows of cash

December 31, 2022

In €million

Total

Within one
year

2,296

2,296

Dividends payables

165

165

Financial instruments – operational

867

675

Other non-current liabilities

99

Outflows of cash:
Trade payables

Financial debt

2,444

399

9

1,428

608

Leasing debt

524

111

90

160

164

6,395

3,646

178

1,786

785

321

78

73

122

48

6,717

3,724

251

1,908

833

Total
Interests on financial debt and lease liabilities
Total outflows of cash

Trade payables include €70 million (2022: €172 million) due to suppliers that have signed up for a supply chain financing program, under which the
suppliers can elect to receive a discounted early payment from the partner bank rather than being paid in line with the agreed payment terms. If
the option is taken, the Group’s liability is assigned by the supplier to the partner bank. The value of the Group's liability remains unchanged. The
Group assesses each arrangement against indicators to determine if the liabilities which suppliers have sold to the partner bank under the supplierfinancing scheme continue to meet the definition of trade payables or should be classified as financial debt. On December 31, 2023 and 2022, theliabilities met the criteria of Trade Payables.
Solvay’s liquidity amounts to €2.1 billion including €0.7 billion of cash and cash equivalents on the statement of financial position and €1.4 billion ofcommitted fully undrawn credit facilities (€1.1 billion multilateral RCF due 2028 with extension possibility, and €0.3 billion bilateral RCF due in 2026
with extension possibilities) unused at the end of December 2023. Solvay is negotiating two other bilateral lines for up to €0.15 billion).
In addition, Solvay has access to a Belgian Treasury Bill program for €1.0 billion (no outstanding balance on December 31, 2023). The program iscovered by a back-up credit line.

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

355

NOTE F33
NET INDEBTEDNESSThe Group’s net indebtedness is the balance between its financial debts and other financial instruments, and cash and cash equivalents.

December 31, 2023

December 31, 2022

Financial debt

2,192

2,959

Cash and cash equivalents

-584

-932

Other financial instruments

-118

-236

Net indebtedness

1,489

1,791

In €million

The 2022 figures relate to the net indebtedness balance of the Group prior to the Partial Demerger.
After Partial Demerger, the financial debt at the end of 2023 includes:· four drawdowns (€1,500 million) for the execution of the liability management prior to the Partial Demerger,· a term loan for an amount of €200 million· the lease debt IFRS16 (€307 million)· other financial debt (€185 million, excluding lease debt) mainly short term
Solvay is Investment Grade rating BBB-/A3 (stable outlook) by Standard & Poor’s (as of December 11th, 2023).

Financial debt: main borrowings
December 31, 2023
CouponMaturity

SecuredCytec 2025 Bonds(issuance US$ 250 million)

3.95%

2025

USD 2025 Bonds(144A;US$ 800 million)

4.45%

2025

In €million (except
where indicated)

NominalamountDecember 31, 2022
Amount atamortized cost

Fair
value

No

152

147

No

748

721

900

868

Total senior US$ notes

Amount atamortized
cost

0

Fair
value

0

2027 Bonds (issuance€500 million)

2.75%

2027

No

497

482

2029 Bonds (issuance€600 million)

0.500%

2029

No

597

479

Total senior €notes
Bridge facility drawdown(€1,500 million) (1)1,500

Total Bridge facilities

1,500

Floating
rate

Floating
rate

2025

0

1,094

961

1,500

1,500

0

0

1,500

1,500

0

0

200

200

0

0

Term loan (€200 million)

200

Other borrowings fromthird parties

185

185

185

441

441

Lease debts IFRS16

307

307

307

524

524

2,192

2,192

2,959

2,794

Total

2025

0

(1) The Solvay bridge facility has as initial maturity in October 2024, but the company has an unconditional right to extend two times the maturity by 6 months, until October
2025. The bridge facility has therefore been classified as non-current.

356

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

There are no instances of default on the above-mentioned financial debts. There are no financial covenants breach, neither on Solvay SA/NV, nor
on any of the Group’s holding companies.
As a result of the Partial Demerger all Senior notes were either transferred to Syensqo or paid in full. For additional information see the Liability
Management section of the Main Events and Changes in the Consolidation Scope in Note 1.

Other financial instruments

December 31, 2023

December 31, 2022

0

30

119

206

— Currency swaps

2

1— Other marketable securities >3 months

50

43— Other current financial assets

67

162

Other financial instruments

119

236

In €million

Non-current other financial instruments
Current other financial instruments

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

December 31, 2023

December 31, 2022

Cash

300

630

Short-term deposits

285

303

Cash and cash equivalents

584

932

In €million

By their nature, the carrying amount of cash and cash equivalents is equal to, or a very good proxy of, its fair value.

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

357

Changes in financial debt and in other financial instruments arising from financing activities
December31, 2022
In €million

Bonds

Total

2023
Cash
flows fromincreaseof borrowings

Cashflows fromrepaymentofborrowings

1,994

Changes inforeignexchange
rates

Changesin othercurrent
financialassetsOtherin financing
cash
flows

Transferfromnoncurrent
to current

Other

PartialDemerger

Total

-13

-1,336

1

-647

0

0

-8

11

-10

1,737

-6

-116

112

-160

243

Other noncurrent debts

42

Long termleasing debt

413

Interest rate
swaps

0

Non-current
financial debt

2,450

1,702

Current
financial debt

510

1,519

-1,500

-17

-279

1,460

Total financial
debt

2,960

3,221

-1,500

-36

-279

0

Other non-current financial
instruments-30

Currency
swaps

-1

Other
marketablesecurities >3months-43

Other current
financial assets-162

Other financial
instruments-206

Total cash flow

-366

1,702

Paymentof leaseliabilities

2-19-1,460

2

126

-817

1,983

-112

102

-1,472

211

-112

228

-2,289

2,192

30

0

-1

2

3,221

-1,500

-2

-2

-58

51

-50

100

-10

5

-67

2

98

-69

-1

56

-119

-34

98

-347

227

-2,233

-679

0

-112

The financial debt decreased from €2,960 million at the end of 2022 to €2,192 million at the end of 2023.
The non-current financial debt decreased by €(467) million, mainly resulting from:· the increase of €1,702 million is mainly explained by:-four drawdowns of €1,500 million for the execution of the liability management prior to the Partial Demerger,a term loan for an amount of €200 million· the change in foreign exchange rates for €(19) million;· the transfer to current financial debt for €(1,460) million mainly explained by:-

the 2029 Bonds €(600) million redeemed on October 9, 2023
the 2025 USD Bonds $ (800) million redeemed on November 15, 2023, for an amount of €(738) million· the transfer to Syensqo of Cytec 2025 Bonds US$(163.5) million, the 2027 Bonds €(500) million and leases liabilities for €(160) million for a total
amount of €(817) million.
The current financial debt decreased by €(299) million, mainly in short term financial debt:· the increase in borrowings of €1,519 million is mainly explained by the drawdowns under a bridge facility (€600 million and US$816 million) and acredit facility (US$200 million).
· the decrease in borrowings of €(1,500) million is explained by the repayment of the 2029 Bonds for €(600) million, the redemption of the USD 2025
Bonds for $(800) million and the repayment of the credit facility for US$200 million.
· the decrease reported under other financing cash flows of €(279) million is explained by margin calls on hedging instruments as part of Energy
Services’ activities;· the transfer from non-current financial debt to current of €1,460 million is explained above;· the transfer to Syensqo for €(1,472) million mainly explained by the bridge facilities of €600 million and US$816 million.
The other financial instruments decreased by €(87) million, mainly for the collateral related to the margin calls on energy services, following thedecrease in the energy, CO2 and gas prices.

358

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

NOTE F34
OTHER LIABILITIES (CURRENT)
December 31, 2023

December 31, 2022

Wages and benefits debts

125

371

VAT and other taxes

107

184

In €million

Social security

29

51

Financial instruments – operational

108

676

Insurance premiums

31

15

Advances from customers

30

97

Long Term Incentive – current part

31

Other

126

106

Other current liabilities

585

1,499

Other includes insurance reimbursements of €32 million that will be paid to Syensqo (see Note F25 Other receivables) and Compliance EU
Allowances of €24 million.
The decrease in value is due to the Partial Demerger and 2023 values are presented after the demerger.
Financial instruments – operational include held for trading and cash flow hedge derivatives (see note F32 Overview of financial instruments).

OTHER NOTESNOTE F35
COMMITMENTS TO ACQUIRE PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETSIn €million

December 31, 2023

December 31, 2022

124

457

Commitments to acquire property, plant and equipment and intangible assets

The amount mainly relates to commitments for the acquisition of industrial property, plant and equipment.
The amount in 2022 was higher compared to 2023, mainly due to the planned purchase of the new Solvay Group headquarters in Belgium as wellas the acquisition of industrial equipment for the extension of the Tavaux site in France.

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

359

NOTE F36
CONTINGENT ASSETS, LIABILITIES AND FINANCIAL GUARANTEES

Accounting policy
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or
nonoccurrence of one or more uncertain future events not wholly within the control of the Group.
Contingent assets are not recognized in the consolidated financial statements since this may result in the recognition of income that
may never be realized. However, when the realization of income is virtually certain, then the related asset is not a contingent asset and its
recognition is appropriate.
Contingent assets are assessed continually to ensure that developments are appropriately reflected in the consolidated financial statements.
If it has become virtually certain that an inflow of economic benefits will arise, the asset and the related income are recognized in the
consolidated financial statements of the period in which the change occurs. If an inflow of economic benefits has become probable, theGroup discloses the contingent asset.
A contingent liability is:· (a) a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of
one or more uncertain future events not wholly within the control of the Group; or· (b) a present obligation that arises from past events but is not recognized because:-(i) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or(ii) the amount of the obligation cannot be measured with sufficient reliability

Contingent liabilities are not recognized in the consolidated financial statements, except if they arise from a business combination. They aredisclosed unless the possibility of an outflow of economic benefits is remote.
Financial guarantees are contracts that require the Group to make specified payments to reimburse the holder for a loss it incurs because a
specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.
In order to avoid double counting, only guarantees in excess of liabilities recognized or disclosures made elsewhere in the Group's
consolidated financial statements are disclosed in this note. Regarding financial guarantees, all financial guarantees of the Group arepresented in this note.

In €million

December 31, 2023

December 31, 2022

Contingent assets

91

Guarantees for pensions

55

378

Environmental contingent liabilities

271

315

Guarantee on Cytec 2025 Bonds

151

0

Contingent liabilities

477

693

Contingent assets
There are no contingent assets at the end of 2023. See Note F8 Discontinued operations for additional information on the collection of thecontingent assets from Edison in Q1, 2023.

Contingent liabilities
The guarantees for pensions are related to the main UK Pension Funds (€55 million) – See note F32.B.2. Description of obligations. Such corresponds
to the recognized plan assets surplus as at December 31, 2023 or the amount by which the guarantee exceeds the recognized pension liability(as at December 31, 2022). This guarantee applies to the pension liability measured based on a local UK regulatory basis (prudential basis) plus anallocation for market risk, which is higher when compared to the IAS 19 methodology. The probability of the guarantees being called is considered
to be highly remote. The decrease over the prior year is mainly attributable to the Partial Demerger of Syensqo.
Contingent liabilities of €271 million above relate to environmental remediation matters that can be estimated with sufficient reliability.
Generally, in line with good business practice, we are not reporting any pending or threatened proceeding, which has not matured, and where theprobability of existing or future exposure is unlikely or uncertain, where financial impact is not estimable and for which we are not able to quantify
contingent liabilities.
See note F31.B Provisions for additional information.

360

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

HSE related proceedings
Rosignano site: The Public Prosecutor’s Office of the Criminal Court of Livorno, Italy initiated preliminary criminal investigations in 2019 regarding
the alleged contamination of certain water tables outside our site and in our former landfill of Rosignano, Italy site. These investigations are stillongoing.
Bulgaria
In Bulgaria, Solvay Sodi AD, a subsidiary of Solvay, is subject to certain state-imposed obligations for emergency oil stocks (reserves) for 2021
through 2023, for which it was not able to comply. As a result, the competent Bulgarian authority imposed fines for 2021 and 2022 on Solvay Sodi
AD of approximately €15 million for our share of the penalties which were fully provisioned. For 2023, the order is suspended and as a result no fineis imposed and therefore no provision has been recorded. Should this suspension be lifted, an additional penalty of €9 million may be imposed on
Solvay Sodi AD. Solvay Sodi AD has brought a lawsuits to contest these fines and is seeking relief through national authorities pleading that theexisting Bulgarian emergency stocks system is not compatible with the EU law, and in its current form obligations for emergency oil reserves should
apply only to companies trading in crude oil and liquid fuels.
Financial Guarantees
Cytec 2025 Bonds
The 3.95% Senior Notes due 2025 issued by Cytec Industries Inc. (the “Cytec 2025 Bonds”) were transferred to Syensqo SA/NV with Cytec Industries
Inc. as of December 8, 2023, for US$163.5 million (151.2 million euros at December 31, 2023). A counter guarantee was issued from Syensqo SA/
NV in favor of Solvay SA/NV as Solvay SA/NV remained the original guarantor. As Syensqo SA/NV, the ultimate parent of Cytec Industries, Inc. isan investment grade company and due to the short period of time before the bonds are due to be repaid, the Group deemed risk of default to be
remote, and as such no provision was recorded.

NOTE F37
RELATED PARTIES
Balances and transactions between Solvay SA/NV and (a) its subsidiaries and (b) its joint operations for the Group’s share of the respective joint
operations, which are related parties of Solvay SA/NV, have been eliminated in consolidation and are not disclosed in this note. Details of transactions
between the Group and other related parties are disclosed below.

Sale and purchase transactions
In €million

Sale of goods

Purchase of goods

2023

2022

2023

2022

Associates

12

20

-35

-38

Joint ventures

8

31

-3

-20

Other related parties

23

91

-45

-98

Total

43

142

-82

-157

In €million

December 31

Amounts owed by related parties

Amounts owed to related parties

2023

2022

2023

2022

Associates

0

0

9

4

Joint ventures

0

0

0

1

Other related parties

14

15

4

28

Total

14

15

13

34

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT

361

Loans to related parties
December 31, 2023

December 31, 2022

Loans to associates

1

2

Loans to other related parties

18

54

Total

19

55

Loans from other related parties-3-4

In €million

Compensation of key management personnel
Key management personnel are composed of all members of the Board of Directors and members of the Executive Leadership Team.
Amounts due in respect of the year (compensation) and liabilities existing at the end of the year in the consolidated statement of financial position:

In €million

Wages, charges and short-term benefits

December 31, 2023

December 31, 2022

6

4Long-term benefits01Cash-settled share-based payments liability

1

4

Total

7

9

Expenses of the year:

2023

2022

Wages, charges and short-term benefits

-35

-11

Long-term benefits-2-2In €million

Share-based payments expenses

-4

-5

Total

-41

-18

Excluding employer social charges and taxes.

The increase in wages, charges and short-term benefits compared to 2022 mainly relates to the short-term incentives associated with the Partial
Demerger.

NOTE F38
DIVIDENDS PROPOSED FOR DISTRIBUTION
The Board of Directors will propose to the General Shareholders’ Meeting a gross dividend of €2.43 per share.
Taking into account the dividend advance payment distributed in January 2024 of €1.62 per share, the dividends proposed for distribution, but not
yet recognized as a distribution to equity holders amount to €86 million.

NOTE F39
EVENTS AFTER THE REPORTING PERIOD

Accounting policy
Events after the reporting period which provide evidence of conditions that existed at the end of the reporting period (adjusting events) arerecognized in the consolidated financial statements. Events indicative of conditions that arose after the reporting period are non-adjusting
events and are disclosed in the notes if material.

362

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

NOTE F40
LIST OF COMPANIES INCLUDED IN THE CONSOLIDATION SCOPE
The Group consists of Solvay SA/NV and a total of 150 investees.
Of these 150 investees, 76 are fully consolidated, 7 are proportionately consolidated and 17 are accounted for under the equity method, whilst theother 50 do not meet the criteria of significance.
In accordance with the concept of materiality, certain companies (Other Investments), which are insignificant, have not been included in the
consolidation scope. They are measured at cost and tested for impairment on an annual basis, which is considered a good proxy of their fair value.
For more information, refer to Principles of consolidation.

List of companies entering or leaving the consolidation scope
Companies entering the consolidation scope

Country

Company

Comments

ARGENTINA

Quimicos Esenciales de Argentina SA, Buenos Aires

New company

CHINA

Essential (Shanghai) Enterprise Management Co., Shanghai

New company

ITALY

Essentials Chemicals Italy S.p.a., Livorno

New company

INDIA

ES Essential Chemicals Private Limited, Mumbai

New company

SOUTH AFRICA

Solvay Polymers and Chemicals South Africa (PTY) Ltd, Johannesburg

Meets the consolidation criteria

SOUTH KOREA

Special Chem Korea Co., Ltd., Gunsan

New company

TURKEY

Essential Istanbul Chemical Items Industry and Trade Limited Company, Istanbul

New company

UNITED STATES

Essential Finance (America) LLC, Wilmington DE

New company

Essential Holding America, LLC, Wilmington, DE

New company

Essential Elements USA LLC, Wilmington, DE

New company

Essential Chemicals USA LLC, Wilmington, DE

New company

Companies leaving the consolidation scope

Country

Company

Comments

ARGENTINA

Solvay Quimica SA, Buenos Aires

Partial Demerger of Syensqo

AUSTRALIA

Cytec Asia Pacific Holdings Pty Ltd, Baulkham Hills

Partial Demerger of Syensqo

Cytec Australia Holdings Pty Ltd, Baulkham Hills

Partial Demerger of Syensqo

EECO Holding SA, Brussels

Partial Demerger of Syensqo

Solvay Participations Belgique S.A., Brussels

Partial Demerger of Syensqo

Solvay Specialty Polymers Belgium SA / NV, Brussels

Partial Demerger of Syensqo

CANADA

Cytec Canada Inc, Niagara Falls Welland

Partial Demerger of Syensqo

CHINA

Cytec Industries Co. Ltd, ShanghaiPartial Demerger of Syensqo

Cytec Engineered Materials Co. Ltd, ShanghaiPartial Demerger of Syensqo

Rhodia Hong Kong Ltd, Hong Kong

Partial Demerger of Syensqo

Solvay (Shanghai) Ltd, ShanghaiPartial Demerger of Syensqo

Solvay (Zhangjiangang) Specialty Chemicals Co. Ltd, Suzhou

Partial Demerger of Syensqo

Solvay China Co., Ltd, ShanghaiPartial Demerger of Syensqo

Solvay Hengchang (Zhangjiagang) Specialty Chemical Co., Ltd, Zhangjiagang City

Partial Demerger of Syensqo

BELGIUM

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT

363

Solvay Specialty Polymers (Changshu) Co. Ltd, Changshu

Partial Demerger of Syensqo

Zhuhai Solvay Specialty Chemicals Co Ltd, Zhuhai City

Partial Demerger of Syensqo

CHILE

Cytec Chile Ltda, Santiago

Partial Demerger of Syensqo

FRANCE

Cogénération Tavaux SAS, Paris

Partial Demerger of Syensqo

Rhodia Energy GHG S.A.S., PuteauxPartial Demerger of Syensqo

Rhodia Laboratoire du Futur S.A.S., Pessac

Partial Demerger of Syensqo

Rhodia Participations S.N.C., Courbevoie

Partial Demerger of Syensqo

Rhodianyl S.A.S., Saint-Fons

Partial Demerger of Syensqo

Solvay Energie France S.A.S., Paris

Partial Demerger of Syensqo

Solvay France S.A., Courbevoie

Partial Demerger of Syensqo

Cytec Engineered Materials GmbH, OestringenPartial Demerger of Syensqo

European Carbon Fiber GmbH, Kelheim

Partial Demerger of Syensqo

GERMANY

Solvay Specialty Polymers Germany GmbH, HannoverPartial Demerger of Syensqo

Hindustan Gum & Chemicals Ltd, New Delhi

Partial Demerger of Syensqo

Solvay Specialty Polymers Italy S.p.A., Milano

Partial Demerger of Syensqo

INDONESIA

PT. Cytec Indonesia, Jakarta

Partial Demerger of Syensqo

Solvay Manyar P.T., Gresik

Partial Demerger of Syensqo

IRELAND

Solvay Finance Ireland Unlimited, Dublin

Partial Demerger of Syensqo

ITALY

Cogeneration Spinetta S.p.a., Bollate

Partial Demerger of Syensqo

Solvay Solutions Italia S.p.A., Milano

Partial Demerger of Syensqo

INDIA

Solvay Specialty Polymers Italy S.p.A., Milano

Partial Demerger of Syensqo

Solvay Japan K.K., Tokyo

Partial Demerger of Syensqo

Solvay Nicca Ltd, Tokyo

Partial Demerger of Syensqo

Solvay Specialty Polymers Japan KK, Minato Ku-Tokyo

Partial Demerger of Syensqo

Cytec Luxembourg International Holdings Sarl, Strassen

Partial Demerger of Syensqo

Solvay Finance (Luxembourg) SA, Luxembourg

Partial Demerger of Syensqo

Solvay Hortensia S.A., Luxembourg

Partial Demerger of Syensqo

Solvay Luxembourg S.a.r.l., Luxembourg

Partial Demerger of Syensqo

MEXICO

Cytec de Mexico S.A. de C.V., Jalisco

Partial Demerger of Syensqo

NETHERLANDS

Cytec Industries B.V., VlaardingenPartial Demerger of Syensqo

Solvay Solutions Nederland B.V., Klundert

Partial Demerger of Syensqo

Solvay New Zealand Ltd, Auckland

Partial Demerger of Syensqo

JAPAN

LUXEMBOURGNEW ZEALAND
PERU

Cytec Peru S.A.C., Lima

Partial Demerger of Syensqo

PORTUGAL

Solvay Biotecnologia Portugal LDA, Carnaxide

Partial Demerger of Syensqo

RUSSIA

RusVinyl OOO, Moscow

Sold to Sibur

Solvay Vostok OOO, Moscow

No longer meets theconsolidation criteria

Rhodia Amines Chemicals Pte Ltd, Singapore

Partial Demerger of Syensqo

Solvay Specialty Chemicals Asia Pacific Pte. Ltd, Singapore

Partial Demerger of Syensqo

SOUTH KOREA

Cytec Korea Inc, Seoul

Partial Demerger of Syensqo

Solvay Specialty Polymers Korea Company Ltd, Seoul

Partial Demerger of Syensqo

THAILAND

Solvay (Bangpoo) Specialty Chemicals Ltd, Bangkok

Partial Demerger of Syensqo

Solvay (Thailand) Ltd, Bangkok

Partial Demerger of Syensqo

Solvay Istanbul Kimya Limited Sirketi, Istanbul

Partial Demerger of Syensqo

SINGAPORE

TURKEYUNITED ARAB EMIRATES Cytec Nibras LLC, Al Ain
Strata - Solvay Advanced Materials Joint-Venture LLC, Al Ain

Partial Demerger of Syensqo
Partial Demerger of Syensqo

364

FINANCIAL STATEMENTUNITED KINGDOMUNITED STATESURUGUAYA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3Advanced Composites Group Investments Ltd, Heanor

Partial Demerger of Syensqo

Cytec Engineered Materials Ltd, Wrexham

Partial Demerger of Syensqo

Cytec Industrial Materials (Derby) Ltd, Heanor

Partial Demerger of Syensqo

Cytec Industrial Materials (Manchester) Ltd, Heanor

Partial Demerger of Syensqo

Cytec Industries UK Holdings Ltd, Wrexham

Partial Demerger of Syensqo

McIntyre Group Ltd, Watford

Partial Demerger of Syensqo

Oldbury Energy Solutions UK Ltd, Oldbury

Partial Demerger of Syensqo

Rhodia Holdings Ltd, Watford

Partial Demerger of Syensqo

Rhodia International Holdings Ltd, Oldbury

Partial Demerger of Syensqo

Rhodia Organique Fine Ltd , Watford

Partial Demerger of Syensqo

Rhodia Overseas Ltd, Watford

Partial Demerger of Syensqo

Rhodia Pharma Solutions Holdings Ltd, Cramlington

Partial Demerger of Syensqo

Rhodia Pharma Solutions Ltd, Cramlington

Partial Demerger of Syensqo

Rhodia Reorganisation, Watford

Partial Demerger of Syensqo

Solvay Solutions UK Ltd, Watford

Partial Demerger of Syensqo

Umeco Composites Ltd, Heanor

Partial Demerger of Syensqo

Umeco Ltd, Heanor

Partial Demerger of Syensqo

Ausimont Industries, Inc., Wilmington, Delaware

Partial Demerger of Syensqo

CEM Defense Materials LLC, Tempe Arizona

Partial Demerger of Syensqo

Cytec Engineered Materials Inc., Princeton New Jersey

Partial Demerger of Syensqo

Cytec Global Holdings Inc., Princeton New Jersey

Partial Demerger of Syensqo

Cytec Industrial Materials (ok) Inc., Tulsa Oklahoma

Partial Demerger of Syensqo

Cytec Industries Inc, Princeton New Jersey

Partial Demerger of Syensqo

Cytec Korea Inc., Princeton New Jersey

Partial Demerger of Syensqo

Cytec Technology Corp., Princeton New Jersey

Partial Demerger of Syensqo

Energy Solutions US LLC, Breckenridge, Texas

Partial Demerger of Syensqo

Garret Mountain Insurance Co., Burlington Vermont

Partial Demerger of Syensqo

Solvay America Inc., Houston, Texas

Partial Demerger of Syensqo

Solvay Finance (America) LLC, Houston, Texas

Partial Demerger of Syensqo

Solvay Holding Inc., Princeton, New Jersey

Partial Demerger of Syensqo

Solvay India Holding Inc., Princeton, New Jersey

Partial Demerger of Syensqo

Solvay Specialty Polymers USA, LLC, Alpharetta, Georgia

Partial Demerger of Syensqo

Solvay USA INC., Princeton, New Jersey

Partial Demerger of Syensqo

Zamin Company S/A, Montevideo

Liquidated

Companies changing the consolidation method

Country

Company

Comments

CHINA

Solvay (Zhenjiang) Chemicals Co., Ltd, Zhenjiang
New area1)

Change from full consolidation to equity method due to theloss of control during the Partial Demerger

ITALY

Cogeneration Rosignano S.r.l., Rosignano

Change from equity method to full consolidation due to thepurchase of the Marubeni's shares1) Following the change in the consolidation scope, Solvay (Zhenjiang) Chemicals Co., Ltd was assessed to satisfy the criteria of an associate as the Group maintains
significant influence.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT

365

List of subsidiaries
Indicating the percentage holding.
The percentage of voting rights is very close to the percentage holding.

ARGENTINA
Solvay Argentina SA, Buenos Aires

100

Quimicos Esenciales de Argentina SA, Buenos Aires100

AUSTRALIA
Solvay Interox Pty Ltd, Banksmeadow

100

AUSTRIA
Solvay Österreich GmbH, Wien100

BELGIUM
Carrières les Petons S.P.R.L., Walcourt

100

Solvay Chemicals International S.A., Brussels

100

Solvay Chimie S.A., Brussels

100

Solvay Pharmaceuticals S.A. - Management Services, Brussels

100

Solvay Stock Option Management S.P.R.L., Brussels

100

BRAZIL
Cogeracao de Energia Electricica Rhodia Brotas SA, Brotas

100

Rhodia Brasil SA, Sao Paolo

100

Rhodia Poliamida Brasil Ltda , Sao Paolo

100

Rhopart-Participacoes Servidos e Comercio Ltda, Sao Paolo

100

BULGARIA
Solvay Bulgaria EAD, Devnya

100

CANADA
Solvay Canada Inc, Toronto

100

CHINA
Essential (Shanghai) Enterprise Management Co. , Shanghai

100

Liyang Solvay Rare Earth New Material Co., Ltd, Liyang City

96.3

Solvay (Shanghai) International Trading Co., Ltd, Shanghai

100

Solvay Chemicals (Shanghai) Co. Ltd, Shanghai

100

Solvay Fine Chemical Additives (Qingdao) Co., Ltd, Qingdao

100

Solvay Lantian (Quzhou) Chemicals Co., Ltd, Zhejiang

55

FINLAND
Solvay Chemicals Finland Oy, Voikkaa

100

FRANCE
Rhodia Chimie S.A.S. , Aubervilliers

100

Rhodia Operations S.A.S. , Aubervilliers

100

Solvay - Opérations - France S.A.S., Paris

100

Solvay Energy Services S.A.S. , Puteaux

100

Solvay Finance S.A., Paris100

GERMANY
Cavity GmbH, Hannover100

Horizon Immobilien AG, Hannover100

Salzgewinnungsgesellschaft Westfalen GmbH & Co KG, Hannover

65

German limited partnership, which makes use of the exemptions offered by Section 264(b) of the German
Commercial Code, not to publish their annual financial statements.
Solvay Chemicals GmbH, Hannover

100

Solvay Fluor GmbH, Hannover

100

Solvay Flux GmbH, Hannover

100

366

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Solvay GmbH, Hannover

100

Solvin GmbH & Co. KG - PVDC, Rheinberg

100

Solvin Holding GmbH, Hannover

100

INDIA
ES Essential Chemicals Private Limited, Mumbai

100

ITALY
Cogeneration Rosignano S.r.l., Rosignano

100

Essentials Chemicals Italy S.p.a., Livorno

100

Solvay Chimica Italia S.p.A., Milano

100

Solvay Energy Services Italia S.r.l., Bollate

100

JAPAN
Nippon Solvay KK, Tokyo

100

Solvay Special Chem Japan Ltd, Anan City100

LUXEMBOURG
Renestia S.A., Capellen

100

Solvay Chlorovinyls Holding S.a.r.l., Luxembourg

100

MEXICO
Solvay Fluor Mexico S.A. de C.V., Ciudad Juarez

100

Solvay Mexicana S. de R.L. de C.V., Monterrey

100

NETHERLANDS
Rhodia International Holdings B.V., Den Haag

100

Solvay Chemicals and Plastics Holding B.V., Linne-Herten

100

Solvay Chemie B.V., Linne-Herten

100Solvin Holding Nederland B.V., Linne-Herten

100

POLAND
Solvay Poland Sp. z o.o., Gorzow Wielkopolski

100

PORTUGAL
Solvay Business Services Portugal Unipessoal LDA, Carnaxide

100

Solvay Peroxidos Portugal Unipessoal LDA, Povoa

100

SINGAPORE
Solvay Fluor Holding (Asia-Pacific) Pte. Ltd., Singapore

100

SOUTH AFRICA
Solvay Polymers and Chemicals South Africa (PTY) Ltd, Johannesburg

100

SOUTH KOREA
Special Chem Korea Co. Ltd, Gunsan

100

Solvay Chemical Services Korea Co. Ltd, Seoul

100

Solvay Silica Korea Co. Ltd, Incheon

100

SPAIN
Solvay Quimica S.L., Barcelona

100

SWITZERLAND
Solvay Vinyls Holding AG, Bad Zurzach

100

THAILAND
Solvay Asia Pacific Company Ltd, Bangkok

100

Solvay Peroxythai Ltd, Bangkok

100

TURKEY
Essential Istanbul Chemical Items Industry and Trade Limited Company, Istanbul

100

UNITED KINGDOM
Rhodia Limited, Watford

100

Solvay Interox Ltd, Warrington

100

Solvay UK Holding Company Ltd, Warrington

100

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT

367

UNITED STATESAmerican Soda LLC, Houston, TX

100

Essential Finance (America) LLC, Wilmington, DE

100

Essential Holding America, LLC, Wilmington, DE

100

Essential Elements USA LLC, Wilmington, DE

100

Essential Chemicals USA LLC, Wilmington, DE

100

Rocky Mountain Coal Company, LLC, Houston, TX

100

Solvay America Holdings, Inc., Houston, TX

100

Solvay Chemicals, Inc., Houston, TX

100

Solvay Fluorides, LLC, St Louis, IL

100

List of joint operations
Indicating the percentage holding.

AUSTRIA
Solvay Sisecam Holding AG, Wien75

BELGIUM
BASF Interox H2O2 Production N.V., Brussels

50

BULGARIA
Solvay Sodi AD, Devnya

73.5

NETHERLANDS
MTP HP JV C.V., Weesp

50

MTP HP JV Management bv, Weesp

50

SAUDI ARABIA
Saudi Hydrogen Peroxide Co, Jubail

50

THAILANDMTP HP JV (Thailand) Ltd, Bangkok

50

List of companies consolidated by applying the equity method of accounting
Indicating the percentage holding.

Joint ventures

AUSTRALIA
Aqua Pharma Australia Pty Ltd, Armidale

50

BRAZILPeroxidos do Brasil Ltda, Sao Paulo

69.4

CANADA
Aqua Pharma Inc, Saint John

50

CHILE
Aqua Pharma Chile Spa, Puerto Montt

50

CHINA
Shandong Huatai Interox Chemical Co. Ltd, Dongying

50

IRELAND
Aqua Pharma Ireland Ltd, Dublin

50

NORWAY
Aqua Pharma Group A.S., Lillehammer

50

Aqua Pharma A.S., Lillehammer

50

Haugaland Shipping A.S., Haugesund

50

368

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

TAIWAN
Shinsol Advanced Chemicals Corporation, New Taipei

51

UNITED KINGDOM
Aqua Pharma Technical Ltd, Inverness

50

Aqua Pharma Ltd, Inverness

50

UNITED STATES
Aqua Pharma U.S. Inc, Kirkland

25

Associates

CHINA
Qingdao Hiwin Solvay Chemicals Co. Ltd, Qingdao
Solvay (Zhenjiang) Chemicals Co., Ltd, Zhenjiang New Area 1)

30
9.35

FRANCE
GIE Chime Salindres, Salindres

50

MEXICO
Silicatos y Derivados S.A. DE C.V., Estado de Mexico

201) Following the change in the consolidation scope, Solvay (Zhenjiang) Chemicals Co., Ltd was assessed to satisfy the criteria of an associate as the Group maintains
significant influence.

3. SUMMARY FINANCIAL STATEMENTS OF SOLVAY SA/NV
The annual financial statements of Solvay SA/NV are presented in a summary format below. In accordance with the Belgian Code of Companies
and Asociations, the annual financial statements of Solvay SA/NV, the management report and the statutory auditor’s report will be filed with the
National Bank of Belgium.
These documents are also available free of charge on the internet or upon request sent to:
Solvay SA/NV
Rue de Ransbeek 310
B – 1120 Brussels

Introductory note
Until December 8, 2023, Solvay SA/NV (“Solvay” or the “Company”) owned and controlled the Specialty Polymers, Composites, Novecare,Technology Solutions, Aroma Performance and Oil and Gas Solutions businesses (together, the “Specialty Businesses”), and the Soda Ash and
Derivatives, Peroxides, Silica, Special Chem and Coatis businesses (together, the “Essential Businesses”). Effective December 9, 2023, at 00:00 a.m.
CET, the Specialty Businesses were separated from Solvay by way of a partial demerger of the Company under Belgian law (the “Partial Demerger”),
whereby the shares and other interests held by the Company in the legal entities operating the Specialty Businesses, the Company’s rights andobligations under the agreements entered into with those legal entities, as well as certain other assets and liabilities were contributed to Syensqo
SA/NV (“Syensqo”), and ordinary shares of Syensqo were issued and allocated directly to shareholders in Solvay on a pro rata basis.
It should be noted that from an accounting point of view, this Partial Demerger had retroactive effect to July 1, 2023. In addition, the Belgian tax
authorities (Service des Décisions Anticipées en matière fiscale) agreed to consider July 1, 2023, for the purposes of the application of Belgian
corporate income tax rules to Solvay. The significant variations that appear in 2023 in the accounts of Solvay SA/NV are largely justified by the effectsof the Partial Demerger and the subsequent contributions to the Belgian company Syensqo SA/NV.
The balance sheet of Solvay SA/NV at the end of the year 2023 presented below is based on a dividend distribution of €2.43 per share.
At the end of 2023, Solvay SA/NV still has one Branch, Solvay S.A. Italia (Viale Lombardia 20, 20021 Bollate, Italy).
The accounts of Solvay SA/NV are prepared in accordance with Belgian generally accepted accounting principles.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

FINANCIAL STATEMENT

369

The main activities of Solvay SA/NV consist of holding and managing a number of investments in Group companies and of financing the Group’s
activities from the bank and bond markets. Solvay SA/NV also has a Group internal factoring activity without recourse. As a result, Solvay SA/NV
owns and manages Group’s trade receivables from customers based in Europe and in Asia. It manages a research center at Neder-Over-Heembeek(Brussels, Belgium) and a very limited number of commercial activities not undertaken through subsidiaries.

BALANCE SHEET OF SOLVAY SA/NV (SUMMARY)
December 31 2023

December 31 2022

4,558

11,438Start-up expenses and intangible assets

65

117

Tangible assets

56

73

Financial assets

4,436

11,248Current assets

1,021

4,508

7

3

Trade receivables

379

1,000

Other receivables

328

2,827

Short-term investments and cash equivalents

284

656

Accrued income and deferred charges

24

22

5,579

15,946

1,856

9,020

Capital

237

1,588

Issue premiums

179

1,200

Reserves

141

1,982

1,298

4,250

191

230

Financial debt

1,586

2,429

— due in more than one year

1,500

1,922

— due within one year

86

507

Trade liabilities

156

147

Other liabilities

1,749

4,081

Accrued charges and deferred income

42

38

Total shareholders' equity and liabilities

5,579

15,946In €million

ASSETS
Fixed assets

Inventories

Total assets
SHAREHOLDERS' EQUITY AND LIABILITIESShareholders' equity

Net income carried forward
Provisions and deferred taxes

The total assets decrease of €10,367 million is resulting from:· the reduction of financial assets (€(6,812) million) linked to the transfer of several investments to Syensqo SA/NV as part of the Partial Demerger(mainly Solvay Holding Inc, Solvay France, Solvay Participations Belgique, Solvay Specialty Polymers Italy) (€7,968 million), the intragroup sale of
the Dutch company Solvay Chemicals and Plastics Holding (€494 million), the intragroup acquisition of shares for a total of €1,653 million (notably
Solvay GmbH, Rhodia Operations, Essentials Chemicals Italy), an impairment of €685 million on different subsidiaries (mainly Solvay Holding Inc,
Essential Holding America), and the conclusion of new loans to affiliates for €681 million.
· the decrease of trade receivables (€(621) million) mainly caused by the transfer of receivables as part of the Partial Demerger (€660 million);· the other receivables decrease (€(2,499) million) linked to the transfer to Syensqo SA/NV as part of the Partial Demerger of current accounts andloans with subsidiaries (€2.287 million).

370

FINANCIAL STATEMENTA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

The Shareholders equity decrease (€(7,165) million) is due to the transfer of equity to Syensqo SA/NV as part of the Partial Demerger(€(8,502) million), the profit of the year (€1,593 million) and the dividend to be distributed in 2024 (€( 257) million).
The financial debt totals €1,586 million compared to €2,429 million at the end of 2022. The decrease of €843 million is mainly due to the reimbursementof loans (€(800) million), the transfer of loans (€1,622 million) to Syensqo SA/NV as part of the Partial Demerger and the new subscribed loans for€1,500 million.
Other liabilities decrease by €2,331 million due the transfer of current accounts to Syensqo SA/NV (€(1,889) million) and to a reduction of thedividend payable ((€172) million) as a result of the Partial Demerger.

INCOME STATEMENT OF SOLVAY SA/NV (SUMMARY)
2023

2022

111

141

Other operating income

1,099

1,141

Operating expenses-1,229-1,154-19

128

Financial income and expenses

1,615

338

Profit / (loss) for the year before taxes

1,597

466

-4

-12

Profit / (loss) for the year

1,593

454

Profit / (loss) for the year available for distribution

1,593

454

In €million

Sales

Operating profit / (loss)

Income taxes

In 2023, the net result for the year of Solvay SA/NV is a profit amounting to €1,593 million, compared with a profit of €454 million in 2022.
This result includes:· The operating result amounted to an operating loss of €-19 million, compared with an operating profit of €128 million in 2022. This decrease ismainly driven by costs incurred in the context of the Partial Demerger.
· Financial gain and losses (€1,615 million) impacted in 2023 by dividends received for €1,797 million (€421 million in 2021) and net financial interests
charges of €174 million (€90 million in 2022);· Impairment on shares (€685 million) is offset by a capital gain on the intragroup sale of Solvay Chemicals and Plastics Holding BV to Solvay GmbH(€680 million).

PROFIT AVAILABLE FOR DISTRIBUTION

In €million

2023

2022

Profit / (loss) for the year available for distribution

1,593

454

-37

4,225

1,555

4,679

Gross dividend

257

429

Carried forward

1,298

4,250

Total

1,555

4,679

Carried forward
Total available to the General Shareholders' Meeting
Appropriation

DECLARATIONSA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

09

DECLARATIONS:AUDITOR’S REPORTS
AND
DECLARATION BY
THE PERSONSRESPONSIBLE
372

Auditor’s reports

388	Declaration by the persons
responsible

389

Glossary

371

372

DECLARATIONSEY Bedrijfsrevisoren
EY Réviseurs d’Entreprises
Kouterveldstraat
7b bus 001
EY Bedrijfsrevisoren
B - 1831
DiegemEY
Réviseursd’Entreprises
Kouterveldstraat 7b bus 001
B - 1831 Diegem

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Tel: +32 (0) 2 774 91 11
ey.comTel: +32 (0) 2 774 91 11
ey.comIndependent auditor’s report to the general meeting of Solvay SA for theyear
ended 31
December
2023
Independent
auditor’sreportto the general meeting of Solvay SA for theyear ended 31 December 2023

In the context of the statutory audit of the Consolidated Financial Statements of Solvay SA (the“Company”) and its subsidiaries (together the “Group”), we report to you as statutory auditor. ThisIn
the context
theopinion
statutory
auditof the Consolidated
Financial
Statements
SA (thereportincludesofour
on theconsolidated
statementof financial
positionof
asSolvayat“Company”)
andits
subsidiaries(togetherthe“Group”),
wereporttoyouasstatutory
auditor. This31 December 2023, the consolidated income statement, the consolidated statement of comprehensive
reportincludesouropiniononthe
consolidated
statementoffinancial
positionasatincome, the consolidated statement of changes in equity and the consolidated statement of cash flows
31
2023,
consolidated
theconsolidated
statementof comprehensive
for December
the year ended
31theDecember
2023income
and thestatement,
disclosures
includingmaterial
accounting
policyincome,theconsolidated
statementofchangesinequityandtheconsolidated
statement
ofreport
cash flows
information (all elements together the “Consolidated Financial Statements”) as well as our
on
for
the
year
ended
31
December
2023
and
the
disclosures
includingmaterial
accounting
policyother legal and regulatory requirements. These two reports are considered one report and are
information
inseparable.(all elements together the “Consolidated Financial Statements”) as well as our report onother legal and regulatory requirements. These two reports are considered one report and are
We have been
. appointed as statutory auditor by the shareholders’ meeting of 10 May 2022, in
inseparable
accordance with the proposition by the Board of Directors following recommendation of the Audit
We
have been
statutory auditor
shareholders’of 10expires
May 2022,
inCommittee
andappointed
following as
recommendationof bythetheworkers’council. meeting
Our mandate
at theaccordancewiththeproposition
by
the
Board
of
Directors
followingrecommendation
of
the
Audit
shareholders’ meeting that will deliberate on the Consolidated Financial Statements for the year ending
Committee
andfollowingrecommendation
of of
the
workers’council.
Our mandate
expiresofatthe
theGroup
31 December
2024.
We performed
the audit
theConsolidated
Financial
Statements
shareholders’meetingthatwilldeliberateontheConsolidated
Financial
Statements
fortheyear ending
during 2 consecutive years.
31 December 2024. We performed the audit of the Consolidated Financial Statements of the Group
Reporton the audit
during 2 consecutive
years.of the Consolidated Financial Statements

Unqualified
for theStatements
unqualified opinion
Report on opinion
the audit of the ConsolidatedBasis
FinancialWe
have audited
the Consolidated Financial
Unqualified
opinionStatements of Solvay SA, that comprise of theWe have audited
the Consolidated
consolidated
statementof financialFinancial
position on 31
Statements2023,
of Solvay
SA, that compriseof theDecemberthe consolidated
incomeconsolidated
statementof financial
positionstatement,
theconsolidated
statementof on 31
December 2023,
the consolidated
incomecomprehensive
income,the consolidated
statement,oftheconsolidated
statement
statementchangesin equityand the ofcomprehensive
income, of
thecashconsolidated
consolidated
statement
flows for the year
statementof changes2023,
in equity
ended
31 December
and andthe thedisclosures,consolidated
statementof cashpolicy
flowsinformation,
for the year
includingmaterial
accounting
ended show
31 December
2023, balance
and the sheet
disclosures,
which
a consolidated
total ofincludingmaterial
accounting
policyinformation,€
7,022 million
andof which theconsolidated
which
a consolidatedbalance
totalofof
incomeshow
statementshows a profit
forsheetthe year€
7,022 million.
million and of which the consolidated€ 2,105
income statement shows a profit for the year of
In 2,105
our opinion,€
million.the Consolidated Financial
Statements give a true and fair view of theIn
our opinion,
theConsolidated
Financialconsolidated
netequityand financial
position asStatements
give
a
true
and
fair
view
of theat 31 December 2023, and of its consolidated
consolidated
equityfinancial
positionresults for thenet
year
thenandended,
prepared
in as
at
31
December
2023,
and
of
its
consolidated
accordance with the International Financial
resultsfor Standards
the year thenended, preparedin
Reportingas adopted
by the European
accordancewiththeInternational
Financial
Union (“IFRS”) and with applicable legal andReportingas adopted
by the European
regulatory Standards
requirements
in Belgium.
Union (“IFRS”) and with applicable legal andregulatory requirements in Belgium.

Besloten vennootschap
Société à responsabilité limitée
RPR Brussel - RPM Bruxelles - BTW-TVA BE0446.334.711-IBAN N° BE71 2100 9059 0069
*handelendin naam van een vennootschap:/agissant au nom d'une société
Besloten vennootschap
Société à responsabilité limitéeA
memberfirmof Ernst& YoungGlobal Limited
RPR
Brussel- RPM
Bruxelles- BTW-TVA
BE0446.334.711-IBAN N° BE71 2100 9059 0069
*handelend in naam van een vennootschap:/agissant au nom d'une société
A member firm of Ernst & Young Global LimitedWe
conducted
audit in accordance
Basisfor theour
unqualified
opinion with
International Standards on Auditing (“ISA’s”)
We conducted
our audit
accordance
withapplied
applicablein Belgium.
Inin
addition,
we have
International
Standards
onInternational
Auditing (“ISA’s”)
the
ISA's approvedby theAuditing
applicablein Belgium.
In addition,
we have applied
and AssuranceStandards
Board (“IAASB”)
that
the
ISA's
approved
the International
Auditing
apply
at thecurrentby
year-end
date and havenotandAssurance
Standards
Board(“IAASB”)
yet been
approved
at national
level.
Our thatapply
at the current
date andarehavenotresponsibilities
underyear-end
those standards
furtheryetbeen approvedat national
level. Our
described
in the “Ourresponsibilities
for the audit
responsibilities
under
those standards
are furtherof the Consolidated
Financial
Statements”
sectiondescribed
in the “Our responsibilities for the auditof our report.
of the Consolidated Financial Statements” section
Weour
have
complied with all ethical requirementsofreport.
that are relevant to our audit of the ConsolidatedWe
have compliedwithethical including
requirements
Financial
Statements
inall
Belgium,
those
that
are
relevant
to
our
audit
of
the
Consolidatedwith respect to independence.
Financial Statements in Belgium, including those
We haveobtainedfrom the Board of Directors andwithrespect
to independence.
the officials of the Company the explanations andWehave obtained
fromforthetheBoardof Directors
informationnecessary
performanceof andourtheofficials
the Company
explanations
and
audit
and weofbelievethat thethe
audit
evidence we
informationnecessaryfor theof ourhave obtained
is sufficientandperformance
appropriate to
audit
and
we believe
that
the audit evidence weprovidea basisfor our
opinion.
have obtained is sufficient and appropriate toprovide a basis for our opinion.

DECLARATIONSA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

373

Audit report dated 12 April 2024 on the Consolidated Financial Statementsof Solvay SA as of andfor the year ended 31 December 2023 (continued)

Key audit mattersmanagement’s assessment of the fulfillmentof the criteria pursuant to IFRS 5, Non-current
Assets Held for Sale and Discontinued
Operations, for the classification as
discontinued operations of the Specialty
Businesses.

Key audit matters are those matters that, in our
professional judgment, were of most significancein our audit of the Consolidated Financial
Statements of the current reporting period.
These matters were addressed in the context of
our audit of the Consolidated Financial
Statements as a whole and in forming our opinion
thereon, and consequently we do not provide aseparate opinion on these matters.

Accounting effect of the partial demerger of
Syenqo SA•

We assessed the accuracy of the classificationand presentation of the Specialty Businesses
as discontinued operations in theConsolidated Financial Statements, and of theaccurate separation of the discontinued
operations from the continuing operations.

•

We examined whether the comparative figuresof the discontinued operations for the year
ended 31 December 2022 were accurately
restated as required by IFRS 5.

•

We assessed the reasonableness ofmanagement’s fair value measurement of the
distribution pursuant to IFRIC 17,
Distributions of Non-cash Assets to Owners,
by recomputing the average of the closing
price of the first 30 days of trading activity ofSyensqo SA shares.

Description of the key audit matter
As disclosed in the note F8, the Group’s Materials
segment, and the majority of the Group’s
Solutions segment (i.e., Novecare, Technology
Solutions, Aroma Performance, and Oil and Gas)
(together the “Specialty Businesses”) wereseparated from Solvay SA/NV via a partial
demerger of Solvay SA/NV (the “Partial
Demerger”), effective December 9, 2023 at
00:00 am CET.
This partial demerger was accounted under IFRS 5
and IFRIC 17 and as a result, the Groupderecognized the assets and liabilities related tothe discontinued operations and recorded a gainfrom discontinued operation in the amount of€1,651 million, representing the excess of the fairvalue of the distribution over the carrying value of
distributed assets and liabilities at the date of thePartial Demerger.

•

We recalculated the gain on the Partial
Demerger by comparing the fair value of the
distribution with the carrying value of theassets and liabilities of the Specialty
Businesses.

•

This area is important to our audit because of themagnitude of the amounts, the pervasive impact
on the Consolidated Financial statements as wellas on the judgment involved in the determinationof the fair market value of the distributed assets
and liabilities at the date of the Partial Demerger.

We have assessed the completeness andaccuracy of note F8 “Discontinued operations
and partial demerger” of the Consolidated
Financial Statements in accordance with IFRS
5 and IFRIC 17, as well as the adequacy of thedisclosures of the other impacts of the Partial
Demerger within the notes of theConsolidated Financial Statements.

Defined benefit obligations

Summary of the procedures performed•

We held meetings, performed inquiries withmanagement and read minutes of the board of
directors’ meetings to obtain anunderstanding of the demerger process andthe internal controls set up by management
over the Partial Demerger Process.

•As part of our audit of the Consolidated
Financial Statements, we evaluatedDescription of the key audit matter
The defined benefit obligations mainly relate topost-employment pension plans and amount to€ 614 million as at 31 December 2023, and aredisclosed in note F30 of the Consolidated
Financial Statements. It consists of gross defined
benefit obligations (€ 1,836 million) offset
partially by plan assets (€ 1,222 million). The
largest plans in 2023 are in the United Kingdom,France, the United States, Germany, Brazil andBelgium and represent 98% of the total defined
benefit obligations of the Group.

2

374

DECLARATIONSA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Audit report dated 12 April 2024 on the Consolidated Financial Statementsof Solvay SA as of andfor the year ended 31 December 2023 (continued)

This area is important to our audit because of themagnitude of the amounts, management’s
judgment involved in determining actuarial
assumptions (more in particular discount rates
and inflation rates) and plan assets’ fair values andthe technical expertise required to evaluate theseobligations and properly reflect the impacts in theConsolidated Financial Statements in accordancewith IAS 19 “Employee Benefits”.

•

We validated that the actuarial calculations
are properly recorded in the Consolidated
Financial Statements in accordance with
IAS19;•

We assessed the roll-forward of the provisions
to understand the changes in the valuation of
the provisions compared to last year;•

We assessed the adequacy and completenessof the disclosures presented in the note F30of the Consolidated Financial Statement basedon the requirements of IAS 19.

Summary of the procedures performed••

We obtained an understanding of the Groupestimation process to evaluate the definedbenefit obligations and plan assets as well as
the related management review controls;
We assessed the design of the internal
controls established by the Group to manage
the underlying participant data and to ensurethat the amendments to the plans areproperly and timely reflected in theConsolidated Financial Statements;•

We reconciled, on a sample basis, the fairvalue of the plan assets to external
confirmations;•

We assessed the expertise, independence andintegrity of the external actuaries engaged by
the Group;•With the assistance of our internal actuarial
specialists, we assessed the actuarial report
prepared by the external actuaries engaged
by the Group to ensure that the main changes
to the plans were properly considered in theactuarial calculations;•

We compared, on a sample basis, the input
data used for the calculation of the provisions
by the external actuary (such as population,age, years of service, wage,…) with source
information of the human resources
department of the Group;•

We assessed the appropriateness of the key
actuarial assumptions (discount rates andinflation rates) with the assistance of ourinternal actuarial specialists;

Impairment of goodwill and other noncurrent assets of the CGU’s “Soda Ash and
Derivatives” and “Special Chem”
Description of the key audit matter
Following the Group’s past acquisitions, significant
goodwill has arisen, amounting to € 764 million as
at 31 December 2023, which represents 11% of
the consolidated total assets and includes€ 275 million of goodwill for Special Chem and €237 million for Soda Ash and Derivatives.
As described in notes F19 (Goodwill and businesscombinations) and F23 (Impairment), theCompany reviews the carrying amounts of its cash
generating units (“CGU’s”) annually or more
frequently if impairment indicators are present.
The impairment assessment involves acomparison of the estimated value in use of the
CGU to its carrying amount. The assessment is a
judgmental process which requires estimatesconcerning the projected future cash flows
associated with the CGU, the weighted average
cost of capital (“WACC”) and the growth rate ofrevenue and costs to be applied in determining
the value in use.
This area is important to our audit because of themagnitude of the amounts, the judgments, andthe technical expertise required to perform theimpairment testing of long-term assets.
Summary of the procedures performed•

We obtained an understanding of the Groupimpairment testing process;3

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

DECLARATIONS

375

Audit report dated 12 April 2024 on the Consolidated Financial Statementsof Solvay SA as of andfor the year ended 31 December 2023 (continued)•

We evaluated and challenged management
determination of CGU's and allocation of
goodwill to those CGU’s for the purpose of
impairment testing;•

We evaluated the discount rate bycomparison to (i) peer-group information,(ii) the Group’s cost of capital and (iii) relevantrisk factors; and the long-term growth rate bycomparing with shadow computation
performed by our valuation experts;•

We assessed the mathematical accuracy andconformity with IAS 36 of the valuation model
used by the Group;•

We tested the reasonableness of projectedcash flows considering the Group’s historic
forecasting accuracy and compared theseprojections with the budget 2024 approved by
the Board of Directors and the mid-termplans, including with respect to the impact ofclimate change and the alignment with theSolvay One Planet objectives;•

We included our internal valuation specialiston our team to analyze and test the valuation
model and the abovementioned criticalassumptions used in the valuation model aswell as the reasonableness of impairment loss
booked during the period;•

We analyzed and tested the sensitivity
analysis prepared by management, tounderstand the impact of reasonable changes
in the key assumptions on the available
headroom for the two CGU’s;•

We assessed the Group reconciliation of thevalue in use derived from the impairment
tests to the market capitalization;•

We considered additional impairment orreversal of impairment indicators and triggers
by reading minutes of the board of directors’
meetings, and we held regular discussions
with the management and the audit
committee;•

We assessed the appropriateness andcompleteness of the disclosures in the Notes
to the Consolidated Financial Statements inaccordance with IAS 36.

Responsibilities of the Board of Directors
for the preparation of the Consolidated
Financial Statements
The Board of Directors is responsible for the
preparation of the Consolidated Financial
Statements that give a true and fair view inaccordance with IFRS and with applicable legal
and regulatory requirements in Belgium and forsuch internal controls relevant to the preparationof the Consolidated Financial Statements that are
free from material misstatement, whether due tofraud or error.
As part of the preparation of Consolidated
Financial Statements, the Board of Directors is
responsible for assessing the Company’s ability tocontinue as a going concern, and provide, if
applicable, information on matters impacting
going concern, The Board of Directors should
prepare the financial statements using the going
concern basis of accounting, unless the Board of
Directors either intends to liquidate the Company
or to cease business operations, or has no realistic
alternative but to do so.

Our responsibilities for the audit of theConsolidated Financial Statements
Our objectives are to obtain reasonable assurance
whether the Consolidated Financial Statements
are free from material misstatement, whether due
to fraud or error, and to express an opinion onthese Consolidated Financial Statements based on
our audit. Reasonable assurance is a high level ofassurance, but not a guarantee that an audit
conducted in accordance with the ISA’s will always
detect a material misstatement when it exists.
Misstatements can arise from fraud or error andconsidered material if, individually or in theaggregate, they could reasonably be expected toinfluence the economic decisions of users takenon the basis of these Consolidated Financial
Statements.
In performing our audit, we comply with the legal,
regulatory and normative framework that applies
to the audit of the Consolidated Financial
Statements in Belgium. However, a statutory
audit does not provide assurance about the future
viability of the Company and the Group, nor about
the efficiency or effectiveness with which theboard of directors has taken or will undertake theCompany's and the Group’s business operations.

4

376

DECLARATIONSA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Audit report dated 12 April 2024 on the Consolidated Financial Statementsof Solvay SA as of andfor the year ended 31 December 2023 (continued)

Our responsibilities with regards to the going
concern assumption used by the board of
directors are described below.

related disclosures in the Consolidated
Financial Statements or, if such disclosures
are inadequate, to modify our opinion. Our
conclusions are based on audit evidence
obtained up to the date of the auditor’sreport. However, future events or conditions
may cause the Company to cease to continue
as a going-concern;

As part of an audit in accordance with ISA’s, we
exercise professional judgment and we maintainprofessional skepticism throughout the audit. We
also perform the following tasks:••

identification and assessment of the risks ofmaterial misstatement of the Consolidated
Financial Statements, whether due to fraud or
error, the planning and execution of audit
procedures to respond to these risks andobtain audit evidence which is sufficient andappropriate to provide a basis for our opinion.
The risk of not detecting material
misstatements resulting from fraud is higher
than when such misstatements result fromerrors, since fraud may involve collusion,forgery, intentional omissions,misrepresentations, or the override ofinternal control;
obtaining insight in the system of internal
controls that are relevant for the audit andwith the objective to design audit proceduresthat are appropriate in the circumstances, but
not for the purpose of expressing an opinion
on the effectiveness of the Company’s
internal control;•

evaluating the selected and applied
accounting policies, and evaluating thereasonability of the accounting estimates andrelated disclosures made by the Board of
Directors as well as the underlying
information given by the Board of Directors;•

conclude on the appropriateness of the Boardof Directors’ use of the going-concern basis ofaccounting, and based on the audit evidence
obtained, whether or not a material
uncertainty exists related to events orconditions that may cast significant doubt on
the Company’s or Group’s ability to continue
as a going concern. If we conclude that amaterial uncertainty exists, we are required to
draw attention in our auditor’s report to the•evaluating the overall presentation, structure
and content of the Consolidated Financial
Statements, and evaluating whether theConsolidated Financial Statements reflect atrue and fair view of the underlying
transactions and events.

We communicate with the Audit Committee within
the Board of Directors regarding, among othermatters, the planned scope and timing of theaudit and significant audit findings, including any
significant deficiencies in internal control that we
identify during our audit.
Because we are ultimately responsible for theopinion, we are also responsible for directing,supervising and performing the audits of thesubsidiaries. In this respect we have determined
the nature and extent of the audit procedures tobe carried out for group entities.
We provide the Audit Committee within the Boardof Directors with a statement that we havecomplied with relevant ethical requirements
regarding independence, and to communicate
with them all relationships and other matters that
may reasonably be thought to bear on our
independence, and where applicable, related
safeguards.
From the matters communicated with the Audit
Committee within the Board of Directors, we
determine those matters that were of mostsignificance in the audit of the Consolidated
Financial Statements of the current period andare therefore the key audit matters. We describe
these matters in our report, unless the law or
regulations prohibit this.

Report on other legal and regulatory requirements
Responsibilities of the Board of Directors
The Board of Directors is responsible for the
preparation and the content of the Board of

Directors’ report on the Consolidated Financial
Statements, the non-financial information
attached to the Board of Directors’ report, andother information included in the annual report.

5

DECLARATIONSA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

377

Audit report dated 12 April 2024 on the Consolidated Financial Statementsof Solvay SA as of andfor the year ended 31 December 2023 (continued)

Responsibilities of the auditor
In the context of our mandate and in accordancewith the additional standard to the ISA’s
applicable in Belgium, it is our responsibility toverify, in all material respects, the Board of
Directors’ report on the Consolidated Financial
Statements, the non-financial information
attached to the Board of Directors’ report, andother information included in the annual report,
as well as to report on these matters.

Aspects relating to Board of Directors’
report and other information included in
the annual report
In our opinion, after carrying out specificprocedures on the Board of Directors’ report, theBoard of Directors’ report is consistent with theConsolidated Financial Statements and has been
prepared in accordance with article 3:32 of theCode of companies and associations.
In the context of our audit of the Consolidated
Financial Statements, we are also responsible toconsider whether, based on the information that
we became aware of during the performance of
our audit, the Board of Directors’ report andother information included in the annual report,
being:•

Business environment and Strategy•

Sustainable value creation

contain any material inconsistencies or contains
information that is inaccurate or otherwise
misleading. In light of the work performed, there
are no material inconsistencies to be reported.
The non–financial information required by article
3:32, § 2, of the Code of companies andassociations has been included in the Board of
Directors’ report on the Consolidated Financial
Statements. The Company has prepared this nonfinancial information based on Global Reporting
Initiatives standards (“GRI”). However, in
accordance with article 3:80 § 1, 5° of the Codeof companies and associations, we do not express
any opinion on the question whether this nonfinancial information has been established inaccordance with the GRI framework. As requestedby the Company, we have issued a separate
reasonable and limited assurance report on aselection of sustainability indicators inaccordance with the International Standard on
Assurance Engagements ISAE 3000. We do not

express any assurance on the sustainability
indicators not covered by our separate
reasonable and limited assurance report.

Independence matters
Our audit firm and our network have not
performed any services that are not compatible
with the audit of the Consolidated Financial
Statements and have remained independent of
the Company during the course of our mandate.
The fees related to additional services which arecompatible with the audit of the Consolidated
Financial Statements as referred to in article 3:65
of the Code of companies and associations were
duly itemized and valued in the notes to theConsolidated Financial Statements (chapter
corporate governance).

European single electronic format(“ESEF”)
In accordance with the standard on the audit of
the conformity of the financial statements with
the European single electronic format(hereinafter "ESEF"), we have carried out theaudit of the compliance of the ESEF format withthe regulatory technical standards set by theEuropean Delegated Regulation No 2019/815 of
17 December 2018 (hereinafter: "DelegatedRegulation").
The board of directors is responsible for the
preparation, in accordance with the ESEF
requirements, of the consolidated financial
statements in the form of an electronic file in
ESEF format (hereinafter 'the digital consolidated
financial statements') included in the annual
financial report available on the portal of the
FSMA (https://www.fsma.be/en/stori).
It is our responsibility to obtain sufficient andappropriate supporting evidence to conclude thatthe format and markup language of the digitalconsolidated financial statements comply in allmaterial respects with the ESEF requirements
under the Delegated Regulation.
Based on the work performed by us, we conclude
that the format and tagging of information in thedigital consolidated financial statements of Solvay
SA per 31 December 2023 included in the annual
financial report available on the portal of the
FSMA (https://www.fsma.be/en/stori) are, in allmaterial respects, in accordance with the ESEF
requirements under the Delegated Regulation.

6

378

DECLARATIONSA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Audit report dated 12 April 2024 on the Consolidated Financial Statementsof Solvay SA as of andfor the year ended 31 December 2023 (continued)

Other communications.
•This report is consistent with our
supplementary declaration to the Audit
Committee as specified in article 11 of theregulation (EU) nr. 537/2014.

Diegem, 12 April 2024
EY Bedrijfsrevisoren BV
Statutory auditor
Represented byMarie Kaisin*
Partner*Acting on behalf of a BV
24MK0026

7

DECLARATIONSA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

EY Bedrijfsrevisoren
EY Réviseurs d’Entreprises
Kouterveldstraat 7B 001
B - 1831 Diegem

Tel: +32 (0) 2 774 91 11
ey.comIndependent auditor’s assurance report
Scope
We have been engaged by Solvay SA (hereafter the “Company” or “Solvay”) to perform a reasonableassurance engagement in accordance with the International Standard on Assurance Engagements Other
Than Audits or Reviews of Historical Financial Information (“ISAE 3000 revised”), hereafter referred to as“the Engagement 1”, to report on Solvay SA’s sustainability indicators listed in Appendix A (“Subject MatterA”), and included in the accompanying annual report 2023 (the “Report”) for the period from 1 January2023 to 31 December 2023.
We have also been engagement by Solvay SA to perform a limited assurance engagement in accordancewith ISAE 3000 revised, hereafter referred to as “the Engagement 2”, to report on Solvay SA’s
sustainability indicators listed in Appendix B (“Subject Matter B”), and included in the accompanying annual
report 2023 (the “Report”) for the period from 1 January 2023 to 31 December 2023.
Together, the sustainability indicators in Appendix A (“Subject Matter A”) and B (“Subject Matter B”) arereferred to as “the Subject Matters”.
Other than as described in the preceding paragraphs, which set out the scope of our engagement, we did
not perform assurance procedures on the remaining information included in the Report, and accordingly,
we do not express an opinion on this information.
Criteria applied by Solvay SA
In preparing the Subject Matters, Solvay SA applied the Value Reporting Foundation Integrated Reporting
principles, certain of the Global Reporting Initiative (“GRI”) Standards, and certain of the World BusinessCouncil for Sustainable Development (“WBCSD”) disclosures of the ESG Disclosure Handbook, as well as aset of own reporting criteria as disclosed in the Glossary and throughout the Report (“the Criteria”).
Solvay’s responsibilities
Solvay’s management is responsible for selecting the Criteria, and for presenting, in all material respect,
the Subject Matters in accordance with those Criteria. This responsibility includes establishing andmaintaining internal controls, maintaining adequate records and making estimates that are relevant to the
preparation of the subject matter, such that it is free from material misstatement, whether due to fraud or
error.
EY’s responsibilities under a reasonable assurance engagement
Our responsibility is to express a reasonable assurance opinion on the presentation of Solvay SA’s
sustainability indicators listed in Appendix A based on the evidence we have obtained.
We conducted our reasonable engagement in accordance with the International Standard on Assurance
Engagements Other Than Audits or Reviews of Historical Financial Information (“ISAE 3000 revised”).
Those standards require that we plan and perform our engagement to obtain reasonable assurance about
whether, in all material respects, the Subject Matter is presented in accordance with the Criteria, and toissue a report. The nature, timing, and extent of the procedures selected depend on our judgment,
including an assessment of the risk of material misstatement, whether due to fraud or error.
A reasonable assurance engagement undertaken in accordance with ISAE 3000 revised involves assessing
the suitability of the Company’s use of the Criteria as the basis for the preparation of the Subject Matter A,
assessing the risks of material misstatement whether due to fraud or error, responding to the assessedrisks as necessary in the circumstances, and evaluating the overall presentation of the Subject Matter A.
Besloten vennootschap
Société à responsabilité limitée
RPR Brussel - RPM Bruxelles - BTW-TVA BE0446.334.711-IBAN N° BE71 2100 9059 0069
*handelend in naam van een vennootschap:/agissant au nom d'une société
A member firm of Ernst & Young Global Limited

1

379

380

DECLARATIONSA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
reasonable assurance opinion.
EY’s responsibilities under a limited assurance engagement
Our responsibility is to express a limited assurance conclusion on the presentation of Solvay SA’s
sustainability indicators listed in Appendix B based on the evidence we have obtained.
We conducted our limited assurance engagement in accordance with the International Standard on
Assurance Engagements Other Than Audits or Reviews of Historical Financial Information (“ISAE 3000
revised”). Those standards require that we plan and perform our engagement to express a conclusion onwhether we are aware of any material modifications that need to be made to the Subject Matter B in orderfor it to be in accordance with the Criteria, and to issue a report. The nature, timing, and extent of theprocedures selected depend on our judgment, including an assessment of the risk of material
misstatement, whether due to fraud or error.
A limited assurance engagement undertaken in accordance with ISAE 3000 revised involves assessing thesuitability of the Company’s use of the Criteria as the basis for the preparation of the Subject Matter B,
assessing the risks of material misstatement whether due to fraud or error, responding to the assessedrisks as necessary in the circumstances, and evaluating the overall presentation of the Subject Matter B.
A limited assurance engagement is more limited in scope than a reasonable assurance engagement inrelation to the risk assessment procedures, including an understanding of internal control, and theprocedures performed in response to the assessed risks. A limited assurance engagement consists ofmaking inquiries, primarily of persons responsible for preparing the Subject Matter and related information
and applying analytical and other appropriate procedures. A higher level of assurance, i.e. reasonableassurance, would have required more extensive procedures.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
limited assurance conclusion.
Our Independence and Quality Control
We have maintained our independence and confirm that we have met the requirements of the Code of
Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants,
and have the required competencies and experience to conduct this assurance engagement.
Our firm applies International Standard on Quality Management 1, which requires us to design, implement
and operate a system of quality management including policies or procedures regarding compliance withethical requirements, professional standards and applicable legal and regulatory requirements.
Description of procedures performed
Reasonable assurance engagement
Procedures performed in a reasonable assurance engagement vary in nature and timing and are more
extensive than for a limited assurance engagement. Consequently, the level of assurance obtained in areasonable assurance engagement is substantially higher than the assurance that would have been obtained
had a limited assurance engagement been performed.

2

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

DECLARATIONS

381

Although we considered the design of management’s internal controls when determining the nature andextent of our procedures, our assurance engagement was not designed to provide assurance on internal
controls. Our procedures did not include testing controls or performing procedures relating to checking
aggregation or calculation of data within IT systems.
Our procedures included amongst other:•

Obtaining an understanding of the reporting processes for Subject Matter A;•

Evaluating the consistent application of the Criteria;•

Assessing the appropriateness of the Company’s own reporting criteria in terms of its relevance,completeness, reliability, impartiality and clarity;•

Interviewing relevant staff at local level responsible for data collection, reporting and calculation of
Subject Matter A;•

Interviewing management and relevant staff at corporate level responsible for consolidating andcarrying out internal control procedures on Subject Matter A;•

Interviewing relevant staff responsible for reporting Subject Matter A in the Report;•

Determining the nature and extent of the procedures for each of the locations contributing to Subject
Matter A. Based on the site scoping, 8 sites (Bernburg Koeth, Dombasle-sur-Meurthe, Green River(WY), Lisbon, Linne-Herten, Paulinia, Torrelavega and Zhenjiang Songl) were selected to validate thedata and evaluate the design and implementation of data collection and calculation processes as wellas validation procedures related to Subject Matter A. For the remaining locations contributing to thesustainability indicators listed in Appendix A, procedures were carried out centrally to review thereasonableness of the data collection, data calculation, and data validation procedures;•

Obtaining information that Subject Matter A reconciles with underlying records of the Company;•

Obtaining internal and external documentation that reconciles with Subject Matter A;•

Performing an analytical review of the data and trends in Subject Matter A for consolidation at
corporate level and the data reported by the sites;•

Performing tests of details and tracing the input information to supporting invoices or otherevidence;•

Evaluating the overall presentation of Subject Matter A in the Report.

We also performed such other procedures as we considered necessary in the circumstances.

3

382

DECLARATIONSA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3Limited assurance engagement
Procedures performed in a limited assurance engagement vary in nature and timing and are less extensive
than for a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited
assurance engagement is substantially lower than the assurance that would have been obtained had areasonable assurance engagement been performed.
A limited assurance engagement consists of making enquiries, primarily of persons responsible for preparing
the Subject Matter B and related information, and applying analytical and other appropriate procedures.
Although we considered the effectiveness of management’s internal controls when determining the natureand extent of our procedures, our assurance engagement was not designed to provide assurance on internal
controls. Our procedures did not include testing controls or performing procedures relating to checking
aggregation or calculation of data within IT systems.
Our procedures included amongst other:•

Obtaining an understanding of the reporting processes for Subject Matter B;•

Evaluating the consistent application of the Criteria;•

Assessing the appropriateness of the Company’s own reporting criteria in terms of its relevance,completeness, reliability, impartiality and clarity;•

Interviewing relevant staff at local level responsible for data collection, reporting and calculation of
Subject Matter B;•

Interviewing management and relevant staff at corporate level responsible for consolidating andcarrying out internal control procedures on Subject Matter B;•

Interviewing relevant staff responsible for reporting Subject Matter B in the Report;•

Determining the nature and extent of the review procedures for each of the locations contributing to
Subject Matter B. Based on the site scoping, 8 sites (Bernburg Koeth, Dombasle-sur-Meurthe, Green
River (WY), Lisbon, Linne-Herten, Paulinia, Torrelavega and Zhenjiang Songl) were visited to validate
the data and evaluate the design and implementation of data collection and calculation processes aswell as validation procedures related to Subject Matter B. For the remaining locations contributing to
the sustainability indicators listed in Appendix B, procedures were carried out centrally to review thereasonableness of the data collection, data calculation, and data validation procedures;•

Obtaining information that Subject Matter B reconciles with underlying records of the Company;•

Obtaining internal and external documentation that reconciles with Subject Matter B;•

Performing an analytical review of the data and trends in Subject Matter B for consolidation at
corporate level and the data reported by the sites;•

Performing limited tests of details and tracing the input information to supporting invoices or otherevidence;•

Evaluating the overall presentation of Subject Matter B in the Report.

We also performed such other procedures as we considered necessary in the circumstances.

4

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

DECLARATIONS

383

Conclusion and Opinion
Reasonable assurance engagement opinion
In our opinion, the Solvay SA’s sustainability indicators listed in Appendix A for the period from 1 January2023 to 31 December 2023 are presented in all material respects, in accordance with the Criteria.
Limited assurance engagement conclusion
Based on our limited assurance engagement, nothing has come to our attention that makes us to believethat Solvay SA’s sustainability indicators listed in Appendix B for the period from 1 January 2023 to 31
December 2023, are not presented, in all material respects, in accordance with the Criteria.
Diegem, 12 April 2024
EY Réviseurs d’Entreprises SRL
Represented byMarie Kaisin*
Partner*Acting on behalf of an SRL
24MK0027

5

384

DECLARATIONSA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Appendix A

Domain

CLIMATERESOURCESTopic

Sustainability indicators

Level of
Assurance

GHG emissions

Emissions increase or reduction at constant scope
year on year

Reasonable

GHG emissions

Direct CO2 emissions (Scope 1)

Reasonable

GHG emissions

Indirect CO2 emissions (Scope 2)

Reasonable

GHG emissions

Other greenhouse gas emissions not according to
Kyoto (Scope 1)

Reasonable

GHG emissions

Other greenhouse gas emissions according to Kyoto
Protocol (Scope 1)

Reasonable

GHG emissions

Total direct and indirect emissions (Scopes 1 & 2)

Reasonable

GHG emissions

Scope 3 emissions – all categories

Reasonable

EnergyPhase-out of coal use in total energy production

Reasonable

Biodiversity

Pressure of Solvay products on biodiversity

Reasonable

Water & wastewater

Freshwater withdrawal

Reasonable

Waste

Non-hazardous industrial waste

Reasonable

Waste

Hazardous industrial waste

Reasonable

Waste

Total industrial waste

Reasonable

Waste

Non-hazardous industrial waste not treated in asustainable way

Reasonable

Waste

Hazardous industrial waste not treated in asustainable way

Reasonable

Waste

Total industrial waste not treated in a sustainable way

Reasonable

6

DECLARATIONSA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

BETTER LIFE

Waste

Mining waste

Reasonable

Sustainable businesssolutions

Product portfolio assessed

Reasonable

Sustainable businesssolutionsSustainable solutions - % Group sales

Reasonable

Employee health &Safety (occupationalsafety – OS)

RIIR - Reportable Injuries and Illnesses Rate

Reasonable

Employee health &Safety (occupationalsafety – OS)

LTIIR – Lost Time Injuries and Illnesses Rate

Reasonable

Employee health &Safety (occupationalsafety – OS)

Fatal accidents of Solvay employees and contractors

Reasonable

Diversity & inclusion

Total headcountReasonable

Diversity & inclusion

Percentage of women in the Group

Reasonable

Diversity & inclusion

Percentage of women in senior and middle
management

Reasonable

385

7

386

DECLARATIONSA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Appendix B

Domain

CLIMATERESOURCESTopic

Sustainability indicators

Level
of
Assurance

EnergyPrimary Energy consumption

LimitedEnergyRenewable energy consumption

LimitedCircular economy

Percentage of sales aligned with circular economy
principles

LimitedWater & wastewater

Chemical oxygen demand (COD)

LimitedWater & wastewater

Persistent organic pollutants (POP)

LimitedHazardous materials

Substance of very high concern (SVHC) according to
REACH criteria present in products sold

LimitedHazardous materials

Percentage of completion of Analysis of Safer
Alternatives program for marketed substances

LimitedAir quality

Nitrogen oxides emissions – NOx

LimitedAir quality

Sulphur oxides emissions – SOx

LimitedAir quality

Non-methane volatile organic compounds emissions –NMVOC

LimitedAir quality

Ozone depleting substances - ODP

LimitedAir quality

Persistent organic pollutants - POP

LimitedDiversity & inclusion

Headcount by employee category (senior manager,
middle manager, junior manager, non-manager)

LimitedProcess accident &safety (PS)

Process safety incident rate

LimitedProcess accident &safety (PS)

Number of incidents (Medium, High, Catastrophic)

LimitedProcess accident &safety (PS)

Number of incidents (Medium, High, Catastrophic) withenvironmental consequences

Limited8

DECLARATIONSA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

BETTER LIFE

Process accident &safety (PS)

Number of incidents (Medium, High, Catastrophic) withenvironmental consequences in which the limits of theoperating permit were exceeded

LimitedEmployee
Engagement andwellbeing

Coverage by collective agreement

LimitedManagement of thelegal ethics andRegulatory
framework

Total claims made

LimitedManagement of thelegal ethics andRegulatory
framework

Total claims closed including cases for which there wasinsufficient information or cases that were misdirectedor referred

LimitedManagement of thelegal ethics andRegulatory
framework

Unsubstantiated claims among resolved cases

LimitedManagement of thelegal ethics andRegulatory
framework

Substantiated claims among resolved cases

Limited

387

9

388

DECLARATIONSA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Declaration by the persons
responsible
The Board of Directors hereby declares that, to the best of its knowledge:· The financial statements, prepared in accordance with International Financial Reporting Standards (“IFRS”), give a true and fair view of the assets,
liabilities, financial position, and earnings of the issuer and of the entities included in the consolidation;· The extra-financial statements are prepared in accordance with the GRI standards and the Integrated Reporting Framework;· The management report includes an accurate review of the business developments, earnings, and financial position of the issuer and of theentities included in the consolidation, as well as a description of the main risks and uncertainties that these entities face.

Pierre Gurdjian

Philippe Kehren

Chairman of the Board of Directors

Chief Executive Officer, Director

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

GLOSSARY

389

Glossary
Adjustments
Each of these adjustments made to the IFRS results is considered to be significant in nature and/or value. Excluding these items from the profit
metrics provides readers with relevant additional information on the Group’s underlying performance over time because it is consistent with how
the business’ performance is reported to the Board of Directors and the Executive Committee. These adjustments consist of:· Results from portfolio management and major restructurings;· Results from legacy remediation and major litigations;· Amortization of intangible assets resulting from Purchase Price Allocation (PPA) and inventory step-up in gross margin;· Net financial results related to changes in discount rates, coupons of hybrid bonds deducted from equity under IFRS, and debt management
impacts (mainly including gains/(losses) related to the early repayment of debt;· Adjustments of equity earnings for impairment gains or losses and unrealized foreign exchange gains or losses on debt and contribution to IFRS
equity earnings of equity investments disposed of in the period;· Results from equity instruments measured at fair value, and remeasurement of the long-term incentive plans related to Syensqo Group shares andthe related hedging instruments.
· Gains and losses, related to the management of the CO2 hedges not accounted for as Cash Flow Hedge, deferred in adjustments until thematurity of the economic hedge;· Tax effects related to the items listed above and tax expense or income of prior years;· All adjustments listed above apply to both continuing and discontinuing operations, and include the impacts on non-controlling interests.

Basic earnings per share
Net income (Solvay’s share) divided by the weighted average number of shares, after deducting own shares purchased to cover Long Term Incentive
programs.

Capital expenditure (capex)
Cash paid for the acquisition of tangible and intangible assets presented in cash flows from investing activities, and cash paid on the lease liabilities(excluding interests paid), presented in cash flows from financing activities. This indicator is used to manage capital employed in the Group.

Cash conversion
Is a ratio used to measure the conversion of EBITDA into cash. It is defined as (Underlying EBITDA + Capex from continuing operations) / Underlying
EBITDA.

CARECHEM
Carechem 24 is a multilingual telephone advice service providing access to a team of trained responders 24 hours a day, 365 days a year. Carechem
24 provides companies all over the world with emergency product support during a hazardous materials incident.

CGU
Cash-generating unit.

Code of conduct
Solvay is committed to responsible behavior and integrity, taking into account the sustainable growth of its business and its good reputation in thecommunities in which it operates.

CTA
Currency Translation Adjustment.

Diluted earnings per share
Net income (Solvay’s share) divided by the weighted average number of shares adjusted for effects of dilution.

Discontinued operations
Component of the Group which the Group has disposed of or which is classified as held for sale, and:· Represents a separate major line of business or geographical area of operations;· Is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations;· Is a subsidiary acquired exclusively with a view to resale.

Dividend yield (net)
Net dividend divided by the closing share price on December 31.

390

GLOSSARYA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Dividend yield (gross)
Gross dividend divided by the closing share price on December 31.

DJ STOXXDow Jones Stoxx is a European stock index composed of the 665 most important European shares.

DJ EURO STOXXDow Jones Euro Stoxx is a pan-European stock index which includes the 326 most important shares of the general Dow Jones index, belonging toeleven countries of the Eurozone.

EBIT
Earnings before interest and taxes. Performance indicator that is a measure of the Group’s operating profitability irrespective of the funding’s
structure.

EBITDA
Earnings before interest and taxes, depreciation and amortization. The Group has included EBITDA as an alternative performance indicator because
management believes that the measure provides useful information to assess the Group’s operating profitability as well as the Group’s ability togenerate operating cash flows.

Eco-profile
A description of the magnitude and significance of the environmentally relevant inputs and outputs (including, as appropriate, raw materials,
intermediate products, emissions and waste) associated with a product throughout its lifecycle.

ESPP
Employee Stock Purchase Plan.

Environmental protection agency
The U.S. Environmental Protection Agency (EPA or USEPA) is an agency of the United States federal government that was created for the purposeof protecting human health and the environment by writing and enforcing regulations based on laws passed by Congress.

Equity per share
Equity (Solvay share) divided by the number of outstanding shares at year-end (issued shares - treasury shares).

EURONEXT
Global operator of financial markets and provider of trading technologies.

Free cash flow
Cash flows from operating activities (excluding cash flows linked to acquisitions or disposals of subsidiaries, cash outflows of Voluntary Pension
Contributions, as they are deleveraging in nature as a reimbursement of debt and cash flows related to internal management of portfolio suchas one-off external costs of internal carve-out and related taxes...), cash flows from investing activities (excluding cash flows from or related to theacquisitions and disposals of subsidiaries and cash flows associated with the partial demerger project), and other investments, and excluding loans
to associates and non-consolidated investments, and recognition of factored receivables), payment of lease liabilities, and increase/decrease ofborrowings related to environmental remediation. Prior to the adoption of IFRS 16, operating lease payments were included within free cash flow.
Following the application of IFRS 16, because leases are generally considered to be operating in nature, free cash flow incorporates the paymentof the lease liability (excluding the interest expense). Excluding this item in the free cash flow would result in a significant improvement of free cash
flow compared to prior periods, whereas the operations themselves have not been affected by the implementation of IFRS 16. It is a measure of
cash generation, working capital efficiency and capital discipline of the Group.

Free cash flow to Solvay shareholders
Free cash flow after payment of net interests, coupons of perpetual hybrid bonds and dividends to non-controlling interests. This represents the
cash flow available to Solvay shareholders, to pay their dividend and/or to reduce the net financial debt.

Free cash flow conversion
Calculated as the ratio between the free cash flow to Solvay shareholders of the last rolling 12 months (before netting of dividends paid to noncontrolling interest) and underlying EBITDA of the last rolling 12 months.

FTSEUROFIRST 300
The FTSEurofirst 300 Index tracks the equity performance across the region of the 300 largest companies ranked by market capitalization in the
FTSE Developed Europe Index.

GBU
Global business unit.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

GLOSSARY

391

Gearing ratio
Underlying net debt / total equity.

GRI
GRI (Global Reporting Initiative) is the independent, international organization that helps businesses and other organizations take responsibility
for their impacts, by providing them with the global common language to communicate those impacts. GRI provides the world’s most widely used
standards for sustainability reporting – the GRI Standards.

HPPO
Hydrogen peroxide propylene oxide, a new technology to produce propylene oxide using hydrogen peroxide.

ICCA
International Council of Chemistry Associations.

IFRS
International Financial Reporting Standards.

Integrated reporting
This is a process founded on integrated thinking, which results in a periodic integrated report by an organization about value creation over time andrelated communications regarding aspects of value creation.

ISO 9001
The ISO 9001 standard defines a set of requirements for the establishment of a system of quality management in an organization, whatever its size
and activity.

ISO 14001
The ISO 14001 family addresses various aspects of environmental management. It provides practical tools for companies and organizations looking
to identify and control their environmental impact and constantly improve their environmental performance.

ISO 14040
The ISO 14040 standard covers life cycle assessment (LCA) studies and life cycle inventory (LCI) studies.

ISO 26 000
The ISO 26000 is a global standard that provides guidelines for organizations that wish to operate in a socially responsible manner. The standard
was published in 2010 after five years of negotiations among a large number of stakeholders worldwide. Representatives of governments, NGOs,
industry, consumer groups, and the world of work were involved in its development. It therefore represents an international consensus.

LCA
Life Cycle Assessment.

Leverage ratio
Net debt / underlying EBITDA of the last 12 months. Underlying leverage ratio = underlying net debt / underlying EBITDA of the last 12 months.

Loss prevention process
Loss prevention aims at maintaining the production flow and profitability of the plants by providing risk mitigation. It also contributes to increasing
the protection of people and the environment.

LTII
Lost Time Injury or Illness: A Work Related Injury or Illness that results in a work interruption of one or more days, not including the day of theaccident.

LTIIR
Lost Time Injury and Illness Rate: number of Lost Time Injuries and Illnesses resulting from accidents per 200,000 work hours.

Mandatory contributions to employee benefits plans
For funded plans, contributions to plan assets correspond to amounts required to be paid during the respective period, in accordance withagreements with trustees or regulation, as well as, for unfunded plans, benefits paid to beneficiaries.

Materiality
Organizations are faced with a wide range of topics on which they could report. The relevant topics are those that may reasonably be considered
important for reflecting the organization’s economic, environmental, and social impacts, or influencing the decisions of stakeholders, and therefore
potentially merit inclusion in an annual report. Materiality is the threshold at which aspects become sufficiently important that they should bereported.

392

GLOSSARYA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

Natural currency hedge
A natural currency hedge is an investment that reduces the undesired risk by matching cash in and outflows.

Near missAccident or collision narrowly avoided.

Net cost of borrowings
Cost of borrowings netted with interest on loans and short-term deposits, as well as other gains (losses) on net indebtedness.

Net financial debt (IFRS)(IFRS) net debt = Non-current financial debt + current financial debt – cash & cash equivalents – other financial instruments (current and noncurrent).
Underlying net debt reclassifies as debt 100% of the hybrid perpetual bonds, considered as equity under IFRS. It is a key measure of the strength of
the Group’s financial position and is widely used by credit rating agencies.

Net financial charges
Net cost of borrowings, and costs of discounting provisions (namely, related to post-employment benefits and Health Safety and Environmental
liabilities).

Net pricing
The difference between the change in sales prices versus the change in variable costs.

Net sales
Sales of goods and value-added services corresponding to Solvay’s know-how and core business. Net sales exclude Revenue from non- core
activities.

Net working capital
Includes inventories, trade receivables and other current receivables, netted with trade payables and other current liabilities.

Occupational accident
Accident which occurred during the execution of a work contract with Solvay. Accidents on the way to/from home are not considered as workrelated except if at the time of the accident, the worker was traveling for Solvay.

OCI
Other Comprehensive Income.

OECD
Organization for Economic Co-operation and Development.

OHSAS 18001
OHSAS 18001 is an international occupational health and safety management system specification.

Open innovation
Innovation that is enriched with outside expertise, through partnerships with the academic world and by shareholdings in start-ups, either directlyor via investment funds.

Operational deleveraging
Reduction of liabilities (net debt or provisions) through operational performance only, i.e. excluding impacts from acquisitions and divestitures, aswell as remeasurement impacts (changes of foreign exchange, inflation, mortality, and discount rates).

Organic growth
Growth of Net sales or underlying EBITDA excluding scope changes (related to small M&A not leading to restatements) and forex conversion
effects. The calculation is made by rebasing the prior period at the business scope and forex conversion rate of the current period.

OSHA
United States Occupational Safety and Health Administration.

PA
Polyamide, Polymer type.

PP
Unit of percentage points, used to express the evolution of ratios.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

GLOSSARY

393

PPA
Purchase Price Allocation (PPA) accounting impacts related to acquisitions..

PSM
Process safety management.

PSU
Performance Share Unit.

Product stewardship
A responsible approach in managing risks throughout the entire life cycle of a product, from the design stage to the end of life.

Research & innovation
Research & development costs recognized in the income statement and as capital expenditure before deduction of related subsidies, royalties anddepreciation and amortization expense. It measures the total cash effort in research & innovation, regardless of whether the costs were expensed
or capitalized.

Research & innovation intensity
Ratio of research & innovation / net sales.

REACH
REACH is the European Community Regulation on chemicals and their safe use (EC 1907/2006). It deals with the registration, evaluation,authorization, and restriction of chemical substances. The law entered into force on June 1, 2007.

Responsible care®
Responsible Care® is the global chemical industry’s unique initiative to improve health, environmental performance, enhance security, and tocommunicate with stakeholders about products and processes.

Result from legacy remediation and major litigations
It includes:· The remediation costs not generated by on-going production facilities (shut-down of sites, discontinued productions, previous years’ pollution),and· The impact of significant litigations.

Results from portfolio management and major restructuring
It includes:· Gains and losses on the sale of subsidiaries, joint operations, joint ventures, and associates that do not qualify as discontinued operations;· Acquisition costs of new businesses;· One-off operating costs related to internal management of portfolio (carve-out of major lines of businesses);· Gains and losses on the sale of real estate not directly linked to an operating activity;· Restructuring charges driven by portfolio management and by major reorganization of business activities, including impairment losses resulting
from the shutdown of an activity or a plant;· Impairment losses resulting from testing of Cash Generating Units (CGUs).
· It excludes non-cash accounting impact from amortization and depreciation resulting from the purchase price allocation (PPA) from acquisitions.

Revenue from non-core activities
Revenues primarily comprising commodity and utility trading transactions and other revenue, considered to not correspond to Solvay’s know-how
and core business.

RII
Reportable Injury & Illness: work related injury or illness resulting from an accident with severity above first aid, according to US OSHA 29 CFR 1904.

RIIR
Reportable Injury & Illness rate): number of reportable injury or illness per 200,000 work hours.

ROCE
Return on Capital Employed, calculated as the ratio between underlying EBIT (before adjustment for the amortization of PPA) and capital employed.
Capital employed consists of net working capital, tangible and intangible assets, goodwill, rights-of-use assets, investments in associates & joint
ventures and other investments, and is taken as the average of the situation at the end of the last 4 quarters.

394

GLOSSARYA N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

ROE
Return on equity.

RSU
Restricted Share Units.

Safety data sheets
Safety Data Sheets are the main tool for ensuring that manufacturers and importers communicate enough information along the supply chain toallow safe use of their substances and mixtures.

SAELs
Solvay Acceptable Exposure Limits

SBTI
Science Based target initiative

SDG
United Nations Sustainable Development Goals.

Seveso regulations
The Control of Major Accident Hazards Involving Dangerous Substances Regulations. These regulations (often referred to as “COMAH Regulations”
or “Seveso Regulations”) give effect to European Directive 96/82/EC. They apply only to locations where significant quantities of dangerous
substances are stored.

SOCRATES
Global tool for industrial hygiene management.

SOLVAY WAY
Launched in 2013 and aligned with ISO 26000, Solvay Way is the sustainability approach of the Group. It integrates social, societal, environmental,
and economic aspects into the Company’s management and strategy, with the objective of creating value shared by all of its stakeholders. Solvay
Way is based on an ambitious and pragmatic framework serving as a tool of both measurement and progress. Solvay Way lists 49 practices –practices that reflect the Solvay Way’s 22 commitments and are structured on a four-level scale (launch, deployment, maturity, performance).

SOP
Stock Option Plan.

SPM
The Sustainable Portfolio Management tool is integrated into the Solvay Way framework (linked to five practices). It serves as a strategic tool fordeveloping information on our portfolio and analyzing the impacts of sustainability megatrends on our businesses.

SVHC
Substance of Very High Concern (SVHC) is a chemical substance, the utilization of which within the European Union has been proposed to become
subject to legal authorization under the REACH regulation.

TCFD
Task Force on Climate-related Financial Disclosure.

Underlying
Underlying results are deemed to provide a more comparable indication of Solvay’s fundamental performance over the reference periods. They
are defined as the IFRS figures adjusted for the “Adjustments” as defined above. They provide readers with additional information on the Group’s
underlying performance over time as well as the financial position and they are consistent with how the business’ performance and financial position
are reported to the Board of Directors and the Executive Committee.

Underlying net debt
Underlying net debt reclassifies 100% of the perpetual hybrid bonds, which are considered as equity under IFRS, as debt

Underlying tax rate
Income taxes / (Result before taxes – Earnings from associates & joint ventures) – all determined on an Underlying basis. The adjustment of thedenominator regarding associates and joint ventures is made as these contributions are already net of income taxes. This provides an indication of
the tax rate across the Group.

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

GLOSSARY

395

Voluntary pension contributions
Contributions to plan assets in excess of Mandatory contributions to employee benefits plans. These payments are discretionary and are driven by
the objective of value creation. These voluntary contributions are excluded from free cash flow as they are deleveraging in nature as a reimbursementof debt.

WACC
Weighted Average Cost of Capital.

Velocity
Total number of shares traded during the year divided by the total number of listed shares, using the Euronext definition.

Velocity adjusted by free float
Velocity adjusted as a function of the percentage of the listed shares held by the public, using the Euronext definition.

WBCSDWorld Business Council for Sustainable Development.

YOY
Year-over-year comparison.

396

GLOSSARY

Shareholders’diary
MAY 7, 2024
First quarter 2024 results

MAY 28, 2024
Ordinary General Shareholders’ meeting

JUNE 3, 2024
Ex-coupon date

JUNE 5, 2024
Final dividend: payment date

JULY 31, 2024
First half 2024 results

NOVEMBER 6, 2024
Nine months 2024 results

A N N U A L I N T E G R AT E D R E P O RT S O LVAY 2 0 2 3

About this report
Solvay’s 2023 Annual Integrated Report provides material information on Solvay for the year ending December 31, 2023. This report integrates all content in
one comprehensive document. The first chapters highlight the strong legacy that lay the foundations of Solvay in its new perimeter as a result of the spin-off ofspecialty businesses to Syensqo. They provide a detailed presentation of the company, its strategy, business environment and main achievements in 2023.
Our Annual Integrated Report includes our management report, as required by article 12 of the Royal Decree of 14 November 2007 relating to the obligations ofissuers of financial instruments admitted for trading on a regulated market. The information required by articles 3:6 and 3:32 of the Belgian Code of Companies
and Associations can be found in the different chapters of the report. This includes our Corporate governance statement, our Remuneration report, Risk
management report, Business performance review, Extra-financial statements, and Financial statements. Solvay’s 2023 Annual Integrated Report is based on
the Value Reporting Foundation Integrated Reporting principles and elements of content, and aligned with the GRI Sustainability Reporting Standards and theWorld Business Council for Sustainable Development (WBCSD) Environmental, Social, and Governance (ESG) Disclosure Handbook.
Solvay’s 2023 Annual Integrated Report has been validated by Solvay’s Executive Leadership Team and Board of Directors.

Layout, concept and production: WordAppeal, France / Printing: Cousto, Belgium / Publication management: Solvay Communications
Credits: @Solvay - Solvay/JM Byl - Solvay/Capa Pictures - David Coulon - Solvay/Didier Vandenbosch - Frank Rogozienski, Solvay, CAPA
Pictures - Solvay/CAPA pictures/Alex Ojeda - Shutterstock/Solvay - Shutterstock/Travelpixs - Solvay/Hans Debauw - Koko Productions &Photography, OFFSET by Shutterstock, Solvay - Solvay, Néstor Revuelta Zarzosa - Unsplash
Ce rapport est également disponible en français. Dit jaarverslag is ook beschikbaar in het Nederlands.
Printed on FSC paper.

SOLVAY SA
Rue de Ransbeek, 310 — 1120 Brussels, Belgium+32 2 264 2111
www.solvay.com