Nouryon reports full-year 2024 results with adjusted EBITDA growing 9.5 percent and margins expanding 220 basis points over prior year

Full-Year 2024 Highlights

• Revenue of $5.13 billion, a 1.1 percent decrease versus 2023 (flat excluding foreign currency)
• Loss for the year of $339 million, reflecting financing costs of $545 million and net foreign exchange loss of $221 million
• Adjusted EBITDA of $1.16 billion, an increase of 9.5 percent versus 2023
• Adjusted EBITDA margin of 22.5 percent, an increase of 220 basis points versus 2023
• Reduced net debt leverage to 5.0x from 5.7x at year-end 2023

Nouryon today reported full-year 2024 results with revenue of $5.13 billion, a decrease of 1.1 percent year over year, and flat versus prior year excluding the negative impact of foreign currency translation. Volume growth of 6.5 percent, driven by positive contributions across all regions and business units, was offset by lower pricing. The lower pricing corresponded with a year-over-year benefit from variable input costs.

Adjusted EBITDA increased by 9.5 percent, or $100 million, year over year to $1.16 billion, and adjusted EBITDA margins increased 220 basis points. The increases were primarily driven by higher volumes, which more than offset the combined headwinds from net pricing and negative foreign currency translation.

Net cash from operating activities and free cash flow were $968 million and $728 million, respectively, versus $996 million and $604 million, respectively, in the prior-year period. The 21 percent increase in free cash flow reflects a stronger earnings result, coupled with a year-over-year decline in capital expenditures due to the completion of various organic growth projects now in operation.

“Nouryon’s 2024 full-year financial performance underscores the strength of our specialty portfolio, driving significant adjusted EBITDA growth and margin expansion," said Charlie Shaver, Nouryon Chairman and CEO. "Throughout the year, we achieved solid volume improvements across all business units and enhanced profitability through disciplined cost management. Having concluded 2024 with stable market conditions and positive momentum from our capex investments, we are well-positioned for continued growth in the coming year."

Reorganization of the company segments and business units

During the third quarter of 2024, Nouryon reorganized into three reporting segments: Consumer & Life Sciences, Performance Materials, and Resource Solutions. The Consumer & Life Sciences segment contains two business units: Home and Personal Care (“HPC”) and Life Sciences which includes our former Agriculture & Food business line as well as our pharma business. The Performance Materials segment contains two business units: Polymer Specialties and Paints & Coatings. The Resource Solutions segment contains two business units: Renewable Fibers and Industrials. The Industrials business unit is a renaming of our prior Natural Resources business line.

“The new segment structure enables us to accelerate our strategy and better focus on customers and end markets by prioritizing investments in innovation, capital expenditures, and acquisitions,” said Larry Ryan, Nouryon President.

Full Year Results

In the Consumer & Life Sciences segment, revenue increased by 1 percent year over year to $2.3 billion. This growth was driven by 9 percent higher volumes, partially offset by pricing declines and foreign currency translation headwinds. The lower pricing corresponded with a year-over-year benefit from variable input costs. Segment adjusted EBITDA increased 14 percent year over year to $517 million. Volume in the Life Sciences business unit saw double-digit improvement, particularly in the agriculture end market, which benefitted from the absence of the significant customer destocking in 2023. Volume in the HPC business unit was also significantly higher, led by the cleaning end market. Segment adjusted EBITDA margin in the Consumer and Life Sciences segment was 22.6 percent, a year-over-year increase of 250 basis points.

Revenue in the Performance Materials segment decreased by 3 percent year over year to $1.7 billion, as pricing declines and foreign currency translation headwinds more than offset 5 percent volume growth. The lower pricing corresponded with a year-over-year benefit from variable input costs. Segment adjusted EBITDA increased 7 percent year over year to $372 million. Volume in the Paints & Coatings business unit improved given increased demand relative to the customer destocking in 2023. Volume was also higher in the Polymer Specialties business unit. Segment adjusted EBITDA margin in Performance Materials segment was 21.3 percent, a year-over-year increase of 190 basis points.

Revenue in the Resource Solutions segment decreased by 3 percent year over year to $1.1 billion, as lower pricing and foreign currency headwinds more than offset 4 percent volume growth. The lower pricing corresponded with a year-over-year benefit from variable input costs. Segment adjusted EBITDA increased 6 percent year over year to $266 million. The Renewable Fibers business unit had strong volume growth from share gain and the opening of a new plant in the Americas. Volume was also higher in the Industrials business unit. Segment adjusted EBITDA margin in Resource Solutions segment was 24.3 percent, a year-over-year increase of 200 basis points.

“We delivered strong cash flows in 2024, helped by a more normalized level of capital expenditures, following three years of elevated growth investments,” said Sean Lannon, Nouryon Executive Vice President and Chief Financial Officer. “Our balance sheet continues to strengthen through a blend of earnings growth and net debt reduction with both debt pay-down and cash flow. We have also been proactive in the debt markets in 2024 and early 2025, executing on multiple repricings and increasing and extending the maturity of both our securitization and revolver facilities to improve our overall liquidity profile.”

Definitions of non-IFRS terms

_{This release contains financial measures presented on a non-IFRS basis, including adjusted EBITDA, free cash flow, adjusted EBITDA margins, net total debt and net debt leverage. Management believes that, when considered together with reported amounts, these measures are useful to third parties and management in understanding our ongoing operations and in the analysis of ongoing operating trends. These metrics should be considered in addition to, and not as replacements for, the most comparable IFRS measure. Refer to the reconciliations below of non-IFRS financial measures to the most directly comparable IFRS measures.}

• _{Adjusted EBITDA consists of (loss)/profit for the period before finance costs-net, income taxes, depreciation and amortization, non-operating income or expenses items, the impact of certain non-cash, or other items that are included in profit for the period that we do not consider indicative of our ongoing operating performance. A reconciliation of adjusted EBITDA to (loss)/profit for the period is presented below.}
• _{Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by revenue for the applicable period.}
• _{Net total debt is calculated as Total debt less Cash & cash equivalents.}
• _{Net debt leverage is calculated by dividing Net total debt by LTM adjusted EBITDA.}
• _{Free cash flow is calculated as Net cash from operating activities less Capital expenditures.}

1. _{Transaction related costs: Includes (i) purchase accounting impacts and transaction fees incurred as part of the Acquisition, (ii) certain third-party fees incurred in connection with the implementation of strategic initiatives, (iii) the costs associated with the energy hedge redesignation, and (iv) gain or loss on divestment of (or part of) business, a site or property, plant, and equipment}
2. _{Impairment of assets: Eliminates impairments of property, plant and equipment, right-of-use assets, intangible assets and goodwill.}
3. _{Equity-settled share-based arrangement and other retention payments: Eliminates costs associated with the management equity plan for the Company.}
4. _{Transition, transformation and integration expenses: Includes costs related to the initial public offering for the years ended December 31, 2023 and 2024. Furthermore, these expenses include expenses related to the restructuring and transformation of our business following the separation from AkzoNobel, mainly related to the strategic alignment of our business and functional organizations, including enhancements in our technology.}
5. _{Restructuring and severance-related costs: Eliminates charges resulting from restructuring activities principally from the Company’s cost reduction efforts.}
6. _{Other adjustments: Eliminates other non-cash and non-recurring costs to the business primarily including net gain arising from hyperinflation in Argentina, amortization of warranty and indemnity, management fees to the principal shareholders, and environmental costs.}