Untitled

Annual Integrated Report

2021

Contents

04 Presidents’ messages

08 Essential Company and Specialty Company

10 Key figures

12 10 Highlights of 2021

14 A radical transformation in just three years

15 Strategy

39 Business environment

55 Sustainable value creation

65 Performance

88 Corporate governance statement

125 Risk management

139 Extra-financial statements

213 Financial statements

323 Auditor’s reports and Declaration

bythepersons responsible

340 Glossary

About this report

Solvay’s 2021 Annual Integrated Report provides

material information on Solvay for the year ending

December 31, 2021. This report reflects our

progress in our integrated management journey,

as it is the first edition that integrates all content

in one comprehensive document. It includes our

management report, as required by article 12 of

the Royal Decree of 14 November 2007 relating to

the obligations of issuers 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 Renumeration report, Risk management

report, Business performance review, Extra-financial

statements and Financial statements. Solvay’s

2021 Annual Integrated Report is based on the

Value Reporting Foundation Integrated Reporting

principles and elements of content, and aligned with

the GRI Standards and the WBCSD’s ESG Disclosure

Handbook.

f To learn more about this picture, see the back cover of the report.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

2021 AT A GLANCE

SOLVAY IN 2021

In 2021, we delivered on our commitments and raised the bar in all areas. This, in a challenging

environment marked by ination and logistics issues, and increased requirements to reduce our

environmental impact.

We improved our organic growth and continued to deliver a strong nancial performance by:

f Achieving strong growth in volume and price with continued cost discipline.

f Delivering class-leading EBITDA margins of 23.3%.

f Investing €736 million for future growth, while maintaining capital discipline and coherence with

strategic imperatives.

f Further improving our cash generation.

f Further improving our credit strength, by reducing our debt and pension obligations by €884 million.

f Simplifying our portfolio.

With our G.R.O.W. strategy and Solvay One Planet roadmap as a compass, we took bold actions in 2021 to

strengthen leadership positions, reallocating resources to growth and sustainable businesses. This included:

f Accelerating development of innovative solutions for now and the future, by further investing in our

“growth platforms”, dedicated to battery materials, thermoplastic composites (TPC) and green

hydrogen.

f Expanding our capacities, by establishing a new manufacturing facility for TPCs in the US and

announcing an investment to increase our PVDF production in Europe, among other intiatives.

f Reinforcing our bio-based seed care portfolio through an acquisition.

f Developing new biosourced solutions for home and personal care.

We raised the bar on sustainability, taking actions to move toward becoming a low-carbon and more

inclusive company:

f Creating an ESG Committee in Solvay’s Board of Directors, to help guide strategic priorities and ensure

that we execute on our commitments.

f Announcing a plan to achieve carbon-neutrality

before 2050, supported by a value-creating investment

program of around €2 billion.

f Accelerating the energy transition in our plants, with 36 projects underway across the globe.

f Engaging with our suppliers, calling on 400 of them to sign up to the SBTi, to help reduce emissions

along the value chain.

f Partnering with customers and key players to create circular businesses, including developing

sustainable tire technology with Bridgestone and Arlanxeo and working on recycling solutions for

advanced materials with Mitsubishi.

f Developing new non-uorosurfactant technologies, which has enabled us to explore technological

innovations that advance our sustainability ambitions while meeting customer needs.

f Launching Solvay One Dignity, committing to nine objectives and related action plans to drive more

diversity, equity and inclusion at Solvay.

f Announcing the launch of Solvay’s rst employee stock ownership plan.

At Solvay, we are REINVENTING ourselves and the way we serve our stakeholders by ensuring we make

our Purpose – We bond people, ideas and elements to reinvent progress – a reality. In doing so,

we are creating more sustainable value for all, as the information in this Annual Integrated Report shows.—

1. Scope 1 and 2 emissions

SOLVAY 2021 ANNUAL INTEGRATED REPORT

2021 AT A GLANCE

2021

BROUGHT US EVEN

CLOSER TO THE

SOCIETY WE SERVE

S

olvay makes bold decisions, thanks to the audacity and

drive of the Group’s management, which is marching

on with a comprehensive roadmap capable of aligning

sound industrial investment with the categorical imperatives of

sustainability. The appointment of Ilham Kadri as CEO has led to

an acceleration on all fronts and a change in direction, as Solvay is

now implementing structural measures to raise the bar in all domains

– strategy, mindset and operations – and amplifying our ability to

create value in the long term.

Equally striking was the manner in which these fundamental

decisions were made. The Management and Board of Directors

have reinvented their modus operandi, not only as a consequence

of the pandemic but also, much more profoundly, as the result of a

concerted effort to sustain trust through transparency. The Board

by Nicolas Boël,

Chairman of the Board

of Directors

SOLVAY 2021 ANNUAL INTEGRATED REPORT

2021 AT A GLANCE

and its different Committees held a total of 32 meetings in 2021.

Through these close and frequent contacts, we have implemented

a structured and objective approach that has allowed our Group to

progress on its transformation journey both promptly and smoothly.

I truly felt a step change in the Board of Directors’ activity. Many

major decisions were made, on substantial investments to curb

Solvay’s carbon footprint; our Solvay One Planet sustainability

ambition; the Solvay Solidarity Fund to alleviate the hardship

endured by those in need; and our One Dignity program to ensure

a more diverse, equitable and inclusive Solvay, among others. At

the same time, 2021 saw concrete structural initiatives, which are

bringing us even closer to the society we serve, with the creation of

an Environmental, Social and Governance (ESG) Committee and

the launch of a process aimed at more diversity, as well as better

representation of our different shareholders and stakeholders. Right

from the beginning, the newly appointed ESG Committee set the

bar very high, as its first decision was to support the Management’s

plans to reach carbon neutrality before 2040 in all businesses, and

before 2050 in soda ash.

You will certainly agree with me: the world that we see emerging

today is more complex than ever. Its contradictions appear to have

grown even more acute, as we are navigating a society that seeks to

restore pre-pandemic comfort, while at the same time demanding

solutions to ensure a sustainable future. That is why I would like

to pay homage to the Solvay teams, which have kept delivering

these solutions in spite of highly volatile conditions, generating

exceptional results in 2021 and rallying behind an ambitious

leadership team.

Lastly, I would like to reiterate my full support, as well as the Board of

Directors’, for the project to create two market leaders in Essentials

and in Specialties, which I see as an elegant illustration of our Group’s

ability to anticipate and make bold decisions in our own right. We are

going beyond our G.R.O.W. strategy, which set specific mandates

for our different business segments. Today, we are planning to

constitute two great companies, empowered to take their futures

into their own hands and exercise the freedom to mobilize the

resources they need to maximize sustainable, shared value for all.

Nicolas Boël

Chairman of the Board of Directors

“I would like to reiterate

myfull support, as well as

theBoard of Directors’,

for the project to create two

market leaders in Essentials

and in Specialties.”

ESSENTIAL

AND SPECIAL:

YESTERDAY,

TODAY AND

TOMORROW

How did you react to the invasion of Ukraine?

Ilham Kadri — We felt absolute shock and horror, seeing the

gruesome violence unleashed against innocent people. We

immediately made sure our team in Ukraine were safe; we mobilized

the Solvay Solidarity Fund to donate €1 million in relief aid; and

we channeled our employees’ own generosity and matched all

individual donations with an equal contribution. As an organization,

we unequivocally condemned the invasion and decided to suspend

all trade with Russia and Belarus, as well as dividend payments

from our 50:50 joint venture Rusvinyl, until peace returns. And we

considered alternative solutions for the raw materials we sourced

in Russia.

Can you guide us through the highlights of Solvay’s

performance in 2021?

I.K. — The Russian attack took place only the day after we

announced spectacular financial results, setting three new records in

EBITDA, net profit and returns. I would like us to pause and consider

the results from a longer-term perspective, as they represent the

successful outcome of our G.R.O.W. strategy, launched in the fall

of 2019.

In 2021, our EBITDA shot up by 27% compared to 2020 – and

we are rebounding higher, as it increased by 8% compared

with 2019 pre-pandemic levels, lifting our EBITDA margin to a

record 23.3%. We have built the muscle we need to power our

Growth, with accelerated innovation focused on three platforms:

Batteries, Thermoplastic Composites and Green Hydrogen. We

are also expanding to serve markets growing at high speed, with

new PVDF capacities for electric vehicle batteries in Europe and

China, for instance, or investing to reinforce our leading position in

sulfone polymers in the United States of America. We have clearly

demonstrated our Resilience as a Group, as we improved our cash

generation through the pandemic and subsequent recession,

totaling €2.4 billion in 2020-2021, and culminating in an FCF

conversion ratio of 37.6% in 2021. We are now facing the future

Ilham Kadri,

President of the Executive

LeadershipTeamand CEO

SOLVAY 2021 ANNUAL INTEGRATED REPORT

2021 AT A GLANCE

with increased confidence, as we strengthened Solvay’s balance

sheet with a total reduction in debt and pensions of €2.7 billion.

Our endeavor to Optimize our operations has borne fruit, as we

have simplified our portfolio by divesting non-core activities and

simplifying our industrial footprint. We achieved our Return on

Capital Employed target three years earlier than anticipated, as we

lifted our ROCE to 11.4% in 2021. We achieved all of this because

we have learned to Win together and be more effective in all we do,

with accelerated structural cost reductions totaling €390 million in

2020-2021. Looking back at these past three years, we got fit, and

now we are ready to change the game.

Can you elaborate on Solvay’s progress with regard to

sustainability?

I.K. — It’s at the heart of our strategy, and our vision is to create

sustainable shared value for all. I am particularly proud that we have

surpassed the Paris Agreement targets for carbon emission cuts,

as we achieved more than a 3.5% annual reduction since 2018,

which is better than the Science Based Target Initiative goal of minus

2.5% per annum. We are resolutely committed to our ambitious

Solvay One Planet goals, which we have stepped up to include

carbon neutrality by 2050 at the latest for soda ash, our most

energy-intensive activity, and before 2040 for all other businesses.

We are walking the talk to deliver on these bold commitments,

with the decision to phase out coal at three major sites: Rheinberg

(Germany) in 2020, Dombasle (France) in 2021 and partly at Devnya

(Bulgaria) in 2022.

I would also like to highlight another concrete achievement,

which further improves the sustainability profile of our industrial

activities. Last year we developed and implemented an innovative

polymerization technology which removes the need for

ﬂuorosurfactants in the production of ﬂuorinated materials. And

we are expanding our impact beyond our boundaries, as customer

intimacy has made us a partner of choice for leading manufacturers

and Fast Moving Consumer Goods companies, whom we help

to meet their own sustainability goals with natural or bio-based

ingredients, for instance, or through joint development programs,

such as our partnership with Renault and Veolia for battery

recycling. In 2021, we also launched a comprehensive sustainability

partnership with our suppliers to have an even bigger impact,

address indirect Scope 3 emissions and curb the CO

emissions

that are generated by our supply chain.

Has Solvay’s company culture changed over the past three

years?

I.K. — We have a strong heritage and deeply rooted values,

which were those of our founder, Ernest Solvay: faith in scientific

progress; the desire to serve humankind; and the ability to make

bold decisions. Our Purpose built on these strong roots and

transformed us into a truly daring AND caring organization, that

is both performance and people-minded. Throughout the crisis,

our Pulse surveys indicated how employee engagement at Solvay

resisted and emerged stronger as well. In that respect, I was

particularly pleased that 80% of respondents in our latest survey

feel they can be themselves at work, confirming that we are an

inclusive, welcoming company and encouraging us to press ahead

with Solvay One Dignity, the diversity, equity and inclusion ambition

that we unveiled last year. I am also proud to announce that you will

find in this report our first wage equity benchmark, as well as our

SOLVAY 2021 ANNUAL INTEGRATED REPORT

2021 AT A GLANCE

Ilham Kadri

President of the Executive Leadership Team and CEO

commitment for the future. Our ambition is to keep transforming

for the better, while remaining true to who we are.

Looking back at 2021, what are you most proud of and

what do you regret?

I.K. — I am most proud of our people, without a shadow of a doubt.

Their unwavering engagement and the stamina of our frontline

crew, which has spearheaded our topline growth and resistance to

inﬂationary pressures. We are definitely building up a strong, robust

company where meritocracy rules – and we will reinforce the bonds

with our teams even further, as we decided last year to launch a

global employee share program, open to all colleagues at Solvay.

Still on the financial front, the continued deleveraging of our balance

sheet in 2021 was a major source of pride.

We have also developed stronger bonds with our investors,

proactively addressing our Environmental, Social and Governance

(ESG) ambition in dedicated events and reaching out directly to

shareholder representatives and proxy voters more frequently, in

addition to our intense investor relations activity.

My biggest regret for 2021 is that we seem to have steered away

from our spectacular improvement trajectory for occupational

safety. We halved the number of reportable injuries and illnesses

(RII) at Solvay between 2015 and 2020 but saw a slight increase last

year. Even though we are still in line with the benchmark of industry

peers, we will do what it takes to continue improving and aim for

zero accidents.

What does the future look like for Solvay?

I.K. — It is more exciting than ever, as we are presenting the General

Assembly with a bold plan to create two fabulous new companies,

building on what Solvay has always been throughout history:

Essential AND Special. We are essential simply because the world

cannot work without us. And we are special, because the future

will not work without us. Going forward, if our project becomes

a reality, we will build on that duality to create two independent,

pure-play, public companies – one active in essential chemicals and

the other in specialities, one focusing more on resilience and cost

effectiveness and the other on customer intimacy and innovation.

We would be creating two strong industry leaders that would benefit

from the strategic and financial ﬂexibility to concentrate on their

distinctive business models, market and stakeholder priorities,

with the freedom to reach their fullest potential. The special bonds

with our shareholders would remain unchanged, as they would

be offered the opportunity to keep their equity position in both

companies, which would present distinctive investment profiles. The

creation of two market leaders would in fact be an unprecedented

opportunity to increase the total value of their shareholding in

Solvay. This is the beginning of two exciting stories… and I invite all

of our stakeholders to write them with us.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

Essential Company

andSpecialty Company

Building on the success of our G.R.O.W.

strategy

Over the past three years, we have accelerated the reinvention of the

Group and amplified the impact we have in the world. We have reinforced

our foundations, with a keen focus on Purpose, Strategy and Culture and

we have delivered. In spite of the highly volatile environment in which we

have been operating, we achieved our mid-term financial targets three

years earlier than planned, while also advancing on our Solvay One Planet

sustainability commitments. We are now ready to change the game and

show the world how we continue to Reinvent Progress.

Creating two strong industry leaders

The delivery of our G.R.O.W. strategy and business optimizations have

led to the emergence of two distinct groups of businesses: Essential and

Specialty chemicals. Both have incredible potential and are bold in their

ambitions, but they have different – sometimes competing – needs,

different operating requirements and different investment demands. In

March 2022, we therefore announced that we were reviewing plans to

separate the Company along these lines, into two independent, publicly

traded companies:

f EssentialCo would comprise the leading mono-technology

businesses in Solvay’s Chemicals segment, including Soda Ash,

Peroxides, Silica and Coatis, and the Special Chem business.

f SpecialtyCo would comprise Solvay’s Materials segment,

including our Specialty Polymers and Composites businesses,

our four Growth Platforms and the majority of Solvay’s Solutions

segment, including Novecare, Technology Solutions, Aroma

Performance, and Oil and Gas.

Upon completion, the separation would establish two strong industry

leaders that would benefit from the strategic and financial ﬂexibility

to focus on their distinctive business models, market and stakeholder

priorities and achieve their full potential. Following the separation,

each standalone company would be positioned to:

f intensify focus on its strategy and growth opportunities;

f prioritize resources to meet its unique business needs;

f apply differentiated operating models to better serve its customers;

f pursue distinct capital structures and capital allocation priorities;

f drive sustainability initiatives, including reaching carbon neutrality

before 2040 for SpecialtyCo, and before 2050 for EssentialCo;

f attract and retain the talent best suited for distinct businesses;

f provide a clear investment thesis and visibility to attract a long-term

investor base suited to each company.

EssentialCo –

An Essential Chemicals leader with resilient

cash generation

€4.1bn

2021 net sales

Soda Ash & Derivatives

#1 Soda Ash (global)

#1 Bicarbonate (global)

Peroxides #1 Hydrogen Peroxide (global)

Silica #1 Silica for tires (global)

Others (Coatis, Special Chem)

#1 Coatis (Latin America)

#1 Rare earths for automative

catalysts (global)

MARKET POSITION

22%

North America

40%

Europe

18%

Latin America

20%

Asia Pacific

EssentialCo would provide technologies that have proven essential

across a number of attractive and resilient end markets, including

building, consumer goods and automotive, and it will benefit from a

foundation of strong, global leadership positions. As an independent

company, EssentialCo would be positioned to further reinforce its

leadership through expansion and consolidation opportunities,

including accelerating growth in natural soda ash and sodium

bicarbonate, pursuing growth in the Asia-Pacific region and further

extending its leadership in a consolidating peroxide market. It would

also play a key role in accelerating the energy transition that began

in its soda ash business, in order to achieve carbon neutrality before

2050. Following the separation, EssentialCo would strengthen its

operating model by enhancing its cost leadership and maximizing

cash generation.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

For almost 160 years, Solvay has continually changed, transformed and reinvented, while always remaining

true to our heritage of social responsibility and innovation excellence. As part of our efforts to unleash

our full potential, we announced a bold new step in this ongoing journey: exploring a separation into two

independent, publicly listed companies.

SpecialtyCo –

A pure-play Specialty leader with

acceleratedgrowth potential

€6bn

2021 net sales

MARKET POSITION

Materials

Consumer

and

Resources

Speciality

Polymers

#1 High-performance polymers; leading

position in thermoplastic composites

Three growth platforms:

f Thermoplastic Composites

f Batteries

f Hydrogen

Composites

#2 Composites for civil aerospace

#1 Composites for defense

Novecare #2 Speciality surfacants and polymers

Aroma #1 Flavors & Fragrances; Natural Vanillin

Technology

Solutions

Oil & Gas

#1 Mining reagents

Two business segments

33%

North

America

28%

Europe

Latin America

33%

Asia Pacific

Unleashing our full potential to unlock

value

By strenthening the link between each company’s unique needs and

strategic path forward, we believe we can unleash our full potential

and unlock value for all stakeholders moving forward. Each company

would have a tailored capital structure that best supports its value

creation objectives: SpecialtyCo would be committed to a strong

investment-grade rating and would have full financial ﬂexibility at the

time of separation to fund its growth plan, while EssentialCo would

maintain a prudent financial policy to support cash generation.

Under the separation plan, Solvay’s shareholders would retain

their current shares of Solvay stock. The separation would be

effected by means of a partial demerger of Solvay whereby the

specialty businesses will be spun off to SpecialtyCo. At the time of

the separation, Solvay shareholders would also receive shares in

SpecialtyCo pro rata to their shareholding in Solvay SA. We expect

the shares of each company to be listed on Euronext Brussels and

Euronext Paris and plan to structure the separation in a manner that

would be tax efficient for a significant majority of shareholders in key

jurisdictions.

The transaction is subject to general market conditions and customary

closing conditions, including final approval by Solvay’s Board of

Directors, consent of certain financing providers and shareholder

approval at an Extraordinary General Meeting. We expect to

complete it in the second half of 2023. The Board of Directors of

Solvac, Solvay’s long-standing reference shareholder, has confirmed

its full support for this transaction.

SpecialtyCo would provide innovative, value-added solutions that

support a more sustainable world, driving above-market growth and

strong returns. It would comprise two business segments:

f Materials: an industry leader in advanced materials, focused

on bringing new solutions to customers that address critical

performance and environmental challenges. These businesses

have a strong track record of above-market growth, supported by

underlying megatrends including electrification, lightweighting,

sustainable mobility and digitalization. With a focus on innovation,

a robust commercial engine and a unique understanding of its

customer base, this segment would be positioned to drive continued

penetration of its sustainable solutions to help customers disrupt

there industries such as transportation, electronics and healthcare.

It would benefit from increased investments in capacity, innovation

and commercial capabilities to support above-market organic

growth at superior returns and industry-leading margins.

f Consumer and Resources: The Consumer & Resources segment

primarily consists of businesses within Solvay’s current Solutions

segment and would be a market leader in providing specialty

ingredients focused on more natural and sustainable solutions by

anticipating rapidly evolving customer needs. With a proven, asset-

light business model that is supported by underlying megatrends

including eco-friendly ingredients and resource efficiency, the

segment is well positioned to drive the consumer industry toward

biobased, natural and circular solutions, leveraging its portfolio of

innovative solutions and application expertise. The segment would

be positioned to drive above market growth at strong returns.

The separation will also enable SpecialtyCo to extend its leading

position in sustainability, with a clear path to achieving carbon neutrality

before 2040.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

2021 AT A GLANCE

2021 Key gures

Solvay

around the world

63 countries

We are a science company whose technologies bring benefits to many aspects of daily life. With

more than 21,000 employees in 63 countries, we bond people, ideas and elements to reinvent

progress. We seek to create sustainable shared value for all, notably through our Solvay One Planet

plan crafted around three pillars: protecting the climate, preserving resources and fostering better

life. Our innovative solutions contribute to safer, cleaner, and more sustainable products found in

homes, food and consumer goods, planes, cars, batteries, smart devices, health care applications,

water and air purification systems. Founded in 1863, Solvay today ranks among the world’s top

three companies for the vast majority of its activities.

27%

26%

13%

34%

47%

24%

10%

19%

Research and Innovation

€298M

R&I effort

78%

of expected R&I

revenuefrom sustainable

solutions

1,950

Employees

€10.1bn

Net sales

+21,000

Employees

Industrial

sites

Major research &

innovation centers

14%

New sales ratio

*% of products/applications < 5 years **according to our SPM methodology

Europe

North America

Latin America

Asia & Rest of

theWorld

Europe

North America

Latin America

Asia & Rest of

theWorld

Europe

North America

Latin America

Asia & Rest of

theWorld

Europe

North America

Latin America

Asia & Rest of

theWorld

SOLVAY 2021 ANNUAL INTEGRATED REPORT

2021 AT A GLANCE

Financial

indicators

Social and

environmental indicators

2021 versus 2020 2021 versus 2018

Climate Resources Better Life

€2,356M

Underlying EBITDA

+27% organic basis

€843M

Free cash ow

to Solvay shareholders from

continuing operations

11.4%

ROCE

+4.4pp

€3.85

Dividend

per share

1. Organic growth excludes forex conversion and

scope effects.

2. Free cash ow to Solvay shareholders is the

free cash ow after payment of net interests,

coupons of perpetual hybrid bonds and

dividends to non-controlling interests. This

represents the cash ow available to Solvay

shareholders, to pay their dividend and/or to

reduce the net nancial debt.

3. Return on Capital employed.

4. Recommended to the Shareholders meeting

on May 10, 2022.

5. Total greenhouse gas emissions, scopes 1 and 2. 6. In number of animal or plant species potentially

impacted in one year. ReCiPe method for biodiversity impact assessment.7. Circular economy

indicators are still in the development phase, in the frame of the Circulytics® approach, co-developed

with the Ellen MacArthur Foundation. 8. Number of work-related injuries and illnesses (employees

and contractors) resulting from an accident with severity above rst aid, according to US OSHA 29

CFR 1904, per 200,000 work hours.

27pj

Solid fuels

–18%

-13%

Pressure on biodiversity

-24%

25%

Inclusion & Diversity

Women in mid & senior

management

+1.3pp

0.43

Reportable Injuries and

IllnessesRate

(RIIR)

-16%

16 weeks

for all co-parents since

January2021

Gender equality

Extend maternity leave

Circular economy

% of Group sales based on circular

raw materials or energy

+1pp

11Mt.CO

eq.

Greenhouse gas emissions

-14% (-11% structural)

53%

Sustainable solutions (SPM)

% of Group sales

+3pp

58kt

Industrial waste not treated

ina sustainable way

-34%

315Mm

Freshwater withdrawal

–5%

SOLVAY 2021 ANNUAL INTEGRATED REPORT

2021 AT A GLANCE

✺ 02.

Accelerated projects to

phase out coal from our

energy mix by 2030

Our soda ash site in Dombasle, France,

received approval for a project to produce

energy from waste instead of coal, starting

in 2024. Meanwhile, our soda ash plant in

Rheinberg, Germany, is set to phase out

the use of thermal coal by 2025, through

the installation of a second biomass boiler.

These projects combined will cut Group

emissions by around 6%.

✺ 03.

Launched a

share purchase

plan for

employees

Our rst employee stock

ownership plan offers all

Solvay personnel globally

the opportunity to buy

company shares at a discount

of 10%. The initiative aims

to better align employees

with the Group’s performance

and encourage them

to develop an ownership

mindset that embraces

opportunities to drive

progress and create more

sustainable value for all.

✺ 01.

Set out our plan to

achieve carbon neutrality

before 2050

In October 2021, Solvay announced our plans

to reach carbon neutrality on scope 1 and

2 emissions before 2040 for all businesses,

except soda ash, and before 2050 in soda ash.

Consequently, the 2030 target for greenhouse

gas emissions was upgraded to reduce by -30%

from -26%, as compared to the 2018 baseline.

The scope 3 target shall at least meet the 2°C

criteria of the Science Based Targets initiative.

A strategic initiative was launched in 2021 to

spur transformative progress with our suppliers.

04.

Expanded our

thermoplastic composite

capacity in the US

The completion of our TPC manufacturing

facility in Greenville, South Carolina

is a milestone in our efforts to industrialize

Solvay’s capacity in this eld. It is part

of a series of strategic investments that

will allow us to expand alongside our

customers as demand for TPC – a solution

for lightweighting and emissions-reduction

used across several industries – continues

to grow.

f Page 28 f Page 21

f Page 23

f Page 27

Highlights

of 2021

1. Scope 1 and

2 emissions

2021 AT A GLANCE

05.

Created an

ESGCommittee at

Boardlevel

The main decisions made by Solvay’s Board

of Directors integrate ESG dimensions. In

recognition of this, we created a stand-alone

ESG Committee at Board level, charged

with further accelerating our sustainability

efforts by providing meaningful contributions

to the Board’s deliberations. Our new

carbon neutrality ambition was the rst

recommendation the new Committee made

to the Board.

✺ 07.

Launched Solvay One

Dignity (Diversity, Equity

and Inclusion)

Part of our sustainability roadmap, Solvay One

Dignity reinforces our commitment

to eliminate any form of discrimation

and cultivate an inclusive and diverse

environment that ensures equal opportunities

for all employees worldwide. It sets out nine

objectives to be achieved by 2025.

✺ 06.

New nancial

records

In 2021, we achieved three

records – EBITDA, Net Prot

and Returns. We reported a

record EBITDA of €2.4 billion,

up 27% organically versus

2020, achieving a 23.3%

EBITDA margin, despite the

higher inationary environment

and unfavorable energy

headwinds. Our underlying

net prot reached €1 billion,

and we increased our Returns

(ROCE) to 11.4%. Finally, we

continued to deliver strong

cash performance that enables

us to invest in our many

growth opportunities.

08.

Launched TECHSYN,

a new technology for

more sustainable tires

We teamed up with our long-term innovation

partners Bridgestone and Arlanxeo

to develop TECHSYN, a technology

that brings a circular, sustainable business

solution to the tire industry. It enables tires

to achieve up to 30% better wear efciency

and up to 6% less rolling resistance,

thereby reducing fuel and raw material

consumption, and cutting CO

emissions.

09.

Created a new joint

venture to serve

booming semiconductor

demand in South-East

Asia

Our joint venture with Shinkong Synthetic

Fibers Corporation is set to be operational

in early 2023. It will develop, produce and

market the best quality electronic grade

hydrogen peroxide, a chemical agent

needed for the production of integrated

electronic circuits.

✺ 10.

Announced a €300 million investment

to expand PVDF production capacity in

Europe

To meet growing demand for Solef® PVDF, which is used in electric

and hybrid vehicle batteries, we are creating the largest PVDF production

site in Europe. Alongside our existing PVDF operations in the US and China,

the new facility at our Tavaux site, in France, will help reinforce Solvay’s

global leadership in this eld.

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f Page 18

f Page 36

f Page 19

SOLVAY 2021 ANNUAL INTEGRATED REPORT

2021 AT A GLANCE

A radical transformation

in just three years

Over the past three years, we have accelerated our journey to transform and simplify Solvay.

We ascertained our culture through our Purpose, instilling a performance mindset throughout

our Group. We set up ambitious sustainability objectives through our Solvay One Planet roadmap,

raising the bar every year to meet our customers’ needs and contribute to building a better world.

We got fit, we built efficiencies and we executed on our G.R.O.W. strategy, which set clear

mandates for our businesses, focusing on higher growth and higher margin activities.

Coupledwith oursolid and improving portfolio, this has produced strong results and cash

generation, allowing us todeleverage our balance sheet and invest for future growth. We are now

ready tochange thegame and to unleash our full potential.

GETTING FIT AND CHANGING THE GAME

f Record structural cost reduction

of€390 million

f 11 consecutive quarters of

positivecash ﬂow

f Net debt reduced by

€1.6 billion

f Pensions deleveraged by

€1.1 billion

f Continued portfolio simplification

with~11transactions

f Reinvesting €736 million

ingrowth businesses

f G.R.O.W. Strategy

f Battery Materials strategic

Growth platform

f Thermoplastic Composites

strategic Growth platform

f Purpose, Values, Vision

f Culture and "At our best"

Behaviors

f Solvay One Planet

f Solvay Solidarity Fund

(€15 million collected)

f Green Hydrogen strategic

Growth platform

f Solvay One Dignity

(Diversity, Equity and

Inclusion)

f Carbon neutrality

roadmap

f Employee share purchase

plan

2020

2021

2019

2019 2020 2021

STRATEGY

16 G.R.O.W. strategy in

action

16 G.R.O.W. strategic roadmap

18 Delivering on our commitments

18 Taking actions to enhance

growth

18 — Simplifying the portfolio

19 — Investing in growth businesses

19 — Leveraging our potential

as ONE Group

21 — Innovating in Growth

platforms: Battery Materials,

Thermosplastic Composites,

Green Hydrogen

25 Raising the bar on

sustainability

26 Climate

27 — Targeting carbon neutrality

before 2050

30 — Acting to protect

biodiversity

32 Resources

33 — New partnerships to enable

a circular economy

34 — Enhancing sustainability

in Rosignano, Italy

35 Better life

36 — Advancing Diversity, Equity

and Inclusion

38 — Fostering better life at work

38 — Driving change through the

Sustainable Guar Initiative

38 — Innovating to raise the bar

with new non-fluorosurfactant

technologies

SOLVAY 2021 ANNUAL INTEGRATED REPORT

STRATEGY

2021 marks another great year of progress

in our transformation journey.

Weemerged stronger on all fronts, from

pricing power to protability, from cash

generation to returns. This year we faced

new challenges and overcame rising raw

material and energy costs, as well as

supply chain disruptions, while continuing

to build on our strong foundations.

Thededication of our people, the

progress we are making in serving our

customers, and the new investments we’re

making position us for superior growth in

the years ahead.

G.R.O.W. strategy

in action

SOLVAY 2021 ANNUAL INTEGRATED REPORT

STRATEGY

G.R.O.W. strategic

roadmap

Our Purpose

Our Vision

We bond

people,

ideas

and elements

to reinvent

progress

At Solvay,

we create

shared

sustainable

value for

all

SOLVAY 2021 ANNUAL INTEGRATED REPORT

STRATEGY

G.R.O.W. strategic

roadmap

Accelerate

Growth

Deliver Resilient

cash

Optimize

returns

Solvay ONE to WIN

Prioritize investments in high margin

MATERIALS businesses with high growth

potential, which are also our most sustainable

solutions.

Maximize cash ﬂow generation

fromourresilient CHEMICALS businesses

wherewehave a competitiveadvantage.

Optimize our SOLUTIONS andbusinesses

to unlock value and increasereturns.

Create a winning team and

operating model to support

aperformance-driven culture

andWIN with our customers

Extend position as

#1 pure-play advanced materials business

f Realign organization around growth opportunities

f Accelerate innovation with highest-growth customers

f Reallocate resources to battery materials, thermoplastic

composites and green hydrogen platforms to accelerate

customer wins

f Improve operational efficiencies through simplification,

order-to-cash optimization and digitalization.

Markets

Automotive and Aerospace, Healthcare, Electronics

Become #1 cash conversion chemical player

f Adapt organization to focus on cash and returns

f Drive focused productivity and rationalization programs

f Prioritize Capex to maintenance and invest selectively for

compelling cash returns, e.g. natural soda ash

f Focus R&I on process innovation

Markets

Industrial applications, Building, Consumer goods, Food,

Automotive

Unlock value and optimize returns

f Innovate selectively in specialty niche markets,

e.g.consumer goods

f Fix shale oil and gas and other low-return businesses

f Drive efficiency and address fragmented industrial footprint

Markets

Industrial applications, Consumer Goods, Food,

Healthcare,Mining

Implementation of a new operating model,

Solvay ONE, to reduce complexity and centrally

manage resources and deployment of capital

expenditures to the highest value opportunities.

f Customer and Supplier Engagement Programs

f Efficiency for growth initiatives

(e.g. Excellence, End-to End value chain)

f Industrial footprint optimization

f Organization reshaping

f Performance-driven culture

Global business trends

IoT/Digitalization

Resource efficiency

Expanding Healthcare

Lightweighting

Electrification

Global business trends

Resource efficiency

Expanding Healthcare

Global business trends

IoT/Digitalization

Resource efficiency

Eco-friendly based

solutions

MATERIALS

CHEMICALS

SOLUTIONS

Businesses

Specialty Polymers, Composite Materials

Businesses

Soda Ash & Derivatives, Peroxides, Silica,

Coatis

Businesses

Novecare, Technology Solutions, Special

Chem, Aroma Performance, Oil and Gas

Key asset

World-leaders in chemicals that

areessentialtodaily life.

Key asset

Unique high-performance polymers and

composite technologies.

Key asset

Unique formulation and application expertise.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

STRATEGY

Delivering on

ourcommitments

Solvay is more resilient today than before the onset of the global

pandemic. Our unwavering focus on cost reduction, disciplined

cash management and strategic investments in high-growth

sustainable solutions, consistent with our G.R.O.W. strategy,

enabled us to successfully pass the pandemic stress-test and to

emerge stronger, ready to deliver superior and sustainable growth.

We faced significant inflationary costs of €465million for the

full year 2021. About 70% of the increase was directly related

to raw materials and energy and the remainder to logistics and

packaging. To address this, we took actions across our businesses

to accelerate price increases. As a result, we overcame a significant

number of those costs while keeping our assets running safely with

very high utilization rates, ensuring supply to our customers, and

protecting our margins.

€390 million cost savings over two years,

well on track to achieve our 2024 target

We continued to make good progress on our structural cost

programs, totaling €213million for the year. We focused our

actions in three key areas:

f restructuring, with around €75million saved from reductions in

labor costs;

f indirect costs reduction of €85million;

f productivity efficiencies at our industrial sites totaling €53million.

In just two years, we have already achieved 80% of our target of

reaching €500million by the end of 2024.

Strong cash generation of €843million

For the eleventh quarter in a row, we have generated positive

free cash ﬂow (FCF), delivering a free cash ﬂow to shareholders

from continuing operations of €843million in 2021. This strong

performance reflects our continued careful and disciplined

management of working capital, effective Capex management,

cost reductions, adapted investments and lower pension cash,

cost and taxes.

As a result of these efforts, we were able to increase our investments

by 20% to €736million in 2021, in line with our guidance, focusing

on our growth businesses. This resulted in an FCF conversion ratio

of over 37% for the last twelve months – higher than our initial

ambition of 30%. The strong free cash ﬂow also allowed us to

further deleverage the balance sheet, bringing the leverage ratio

to 1.7x, which is the lowest since 2015.

“Solvay’s teams have raised the bar, setting

three new records - EBITDA, Net Prot and

Returns — as we accelerated our price actions

to overcome cost headwinds in 2021. We also

increased our investment by 20% and still

exceeded all expectations on cash generation.

As we look forward, we intend to ramp up our

investments even more, as we are now entering

a growth cycle to prepare for opportunities in

the coming years.ˮ

Karim Hajjar

Chief Financial Officer, Member of the Executive Leadership Team

Taking actions to enhance

growth

Our G.R.O.W. strategy is aligned with powerful global business

trends and our Solvay One Planet sustainability roadmap, and

guides every action we take. In 2021, we continued to simplify

our portfolio, reallocating resources to growth and sustainable

businesses. In parallel, we continued the profound transformation of

our operating model, to make the Group leaner and more efficient,

with a new culture focused on customers and performance.

Simplifying the portfolio

In line with G.R.O.W., we have taken significant action to refocus

our portfolio on our highest growth, highest margin opportunities

– which are also our most sustainable solutions.

In 2021, following the optimization of several businesses, we have

divested six commodity business lines, mainly in the Chemicals

and Solutions segments.

Over the past three years, we have simplified our portfolio and

footprint: we divested seven product lines and 28 sites, totaling

~€2billion in sales.

Moving forward, Solvay will continue to pursue opportunities to

further simplify our portfolio.

Read more » Performance chapter

page 65

SOLVAY 2021 ANNUAL INTEGRATED REPORT

STRATEGY

Investing in growth businesses

Through our cost-saving and rationalization programs we have

saved resources and invested for future growth. This has involved

strict Capex management and investment in activities aligned with

G.R.O.W. and our sustainability objectives.

Strengthening our portfolio in strategic

markets

f Agro: In 2021, we acquired Bayer’s global seed coatings

business, making us one of the three leading companies in seed

coating technology and strengthening our seed care portfolio in

bio-based, seed-applied solutions. Seed coatings are particularly

important for field crop seeds, protecting them against insects

and diseases and facilitating a better crop yield.

f Electronics: We launched a new joint venture with Shinkong

Synthetic Fibers Corporation in August 2021, to serve booming

semiconductor demand in South-East Asia. Shinsol Advanced

Chemicals is scheduled to begin operations in early 2023 and

will develop, produce and market electronic grade hydrogen

peroxide, an indispensable chemical agent for the production

of integrated electronic circuits.

f Healthcare: In May 2021, we invested in Invizius, a biotechnology

start-up in theUK that is developing an anti-inflammatory

solution for hemodialysis. With the need for dialysis treatment

rising, the global market for this solution is estimated to be worth

more than £1.5billion.

f Biotechnology: In December 2021, we invested in US-based

company DMC Biotechnologies. Their core technology

addresses a key challenge for biotech companies. It delivers

robust and predictably scalable biocatalysts using microbial

fermentation, resulting in cost-competitive bio-based chemicals

for use in animal feed, human nutrition, sustainable cleaning and

pharmaceutical applications.

Expanding capacities

We have prioritized investments that serve our growth markets.

This includes expanding our thermoplastic composites (TPC)

capacity by opening a new manufacturing facility in the US and

investing €300 million over the next two years in creating the

largest PVDF production site in Europe at our facility in Tavaux,

in France, to meet the growing demand for batteries. In addition,

we are investing in a research pilot line in La Rochelle (France),

the most advanced one in Europe, to develop essential materials

for solid-state electrolytes to be used in next-generation electric

vehicle (EV) batteries. And in response to growing demand from

mining operations for our copper solvent extraction products, we

also announced plans to expand capacity at our Mount Pleasant

Tennessee facility, in theUS, by 20%. Lastly, in early 2022, we

announced our intent to increase our capacity in the US sulfone

polymers market where we are leaders. These polymers address

growth in various markets, including health care, water filtration

and food.

Leveraging our potential as ONE Group

tobetter serve customers

We are reinventing the way we operate to become a simpler and

leaner company. This involves putting in place a new operating

model, which leverages our potential as ONEGroup to more

effectively serve our customers.

Focusing on customer needs

We have implemented a number of initiatives across the Group to

ensure that each of our customers receives the appropriate level

of service, thus enabling us to create more shared value. Through

the Group Strategic Key Account Program, we are strengthening

our relationships with the customers who drive our growth. This

is vital, as it will allow us to better understand their needs and

challenges and ensure they have access to our full portfolio of

technologies and skills, so that we can co-create tailored and

innovative solutions with and for them.

In addition to this, in early 2021, we launched our Sales Academy,

aimed at our frontline employees. This program targets each role

in the commercial organization and focuses on upgrading skills.

We invested around €2million in the program over just one year,

focused on training and replacing staff. So far we have delivered

11,500hours of training to frontline teams.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

STRATEGY

Optimizing organization and plant efciency

Reinventing how we operate has also meant simplifying the

organization. This has involved reshaping it to better fit our new

business profile, making it leaner, more agile and more focused

on customers’ needs. This has also enabled us to implement new

common ways of working that facilitate better collaboration across

our businesses and Functions.

We began this transformation by completely rethinking our

organization as if we were starting from a clean slate, implementing

a “zero-based approach.” Our aim was to connect our strategic

priorities with our organizational design, by identifying and

prioritizing the activities that best support our businesses and

customers. Each of Solvay’s Group Functions was challenged to

rethink their organization and ways of workingpoint après working.

As a result, 17 distinct functions were grouped into seven.

Creating the sustainable factories ofthefuture

In 2021 we launched a ten-year program to prepare our factories

for the future. Our STAR Factory program has environmental,

3 QUESTIONS FOR

HERVÉTIBERGHIEN,

Chief People Officer and Member of

theExecutive Leadership Team

HOW IS SOLVAY EVOLVING

ITS CULTURE TO SUPPORT ITS

G.R.O.W. STRATEGY?

H.T. — Our Purpose – We bond people,

ideas and elements to reinvent progress–

is the foundation of our G.R.O.W.

strategy and drives all of our entities and

activities. To make it happen, we are

developing a human-centric culture that

engages our people and in which we

value unity not uniformity to break down

silos and challenge the status quo. As a

strongly bonded community, sharing the

same ambitions, we aim to achieve our

passion for performance by caring and

collaborating.

WHAT IS THE “CARE AND DARE”

CULTURE ALL ABOUT?

H.T. — Its strength comes from the

power of the "and," of breaking down

silos and building the ability to deal

with ambiguity within our network.

The cultural shift here is more about

giving our employees’ well-being the

same weight as our expectations in

terms of performance or zero-based

mindset. It is about making everyone

feel they can bring their whole selves

to work while encouraging them to

explore the unknown. As we are facing

unprecedented times, we believe that

empowering our people and embracing

their differences will be key to fostering

innovative ideas to fulfill our customer

obsession. It is okay to try and fail;

your leaders will encourage you to get

back on your feet. This is a culture that

allows you to learn, unlearn and relearn

to answer the challenges of an ever-

changing world.

HOW ARE YOU ENGAGING

EMPLOYEES?

H.T. — Employee engagement is firstly

about listening to our employees: their

concerns, needs and what they are

satisfied with. That is what our Pulse

survey enables us to do. Then it is about

showing them that everyone deserves

and will have the same chance to evolve

in our organization, which, in practice,

is translated into action by our One

Dignity strategy. To go beyond, we try

to improve their quality of life through

Solvay Cares: through giving the same

parental leave to everyone or through

introducing the Employee Assistance

Program to try and ease their work life

integration. Within our employees’

careers at Solvay, we also focus on the

importance of giving them a unique

experience through the moments

that matter while letting them work

from where they are at their best. The

goal here is to put them in an owner’s

mindset, being actors in their own

development, to help them reach their

full potential.

social and corporate governance (ESG) at its heart and focuses

on putting One Solvay and One Planet into practice at site level.

We are in the process of defining clear KPIs and milestones for

our plants, to help them define their distinct site roadmaps.

To improve our performance and reduce costs, the STAR

Factory program involves investing in new tools and processes

to leverage digital and data science. We will also look for ways

to more positively impact our people and the communities we

serve, paying particular attention to diversity. Our ambition

is to deliver innovative products with a neutral or very light

environmental footprint. The program was launched in two of our

most critical sites for our materials business: Tavaux, in France,

and Spinetta, in Italy. By 2030, we want all Solvay plants to be

STAR Factory certified.

Reinventing progress: how we bond with our people together

byleading with purpose, heart and mind

SOLVAY 2021 ANNUAL INTEGRATED REPORT

STRATEGY

1. Our SPM tool ensures that our products will bring benets to society and the

environment while demonstrating a lower environmental impact in the production

phase.

Our Leaders Engagement Journey

Care and Dare starts with our leaders. To achieve our ambition, we

need to train our leaders to be the best in the industry.

This is why we have redesigned our leadership model and made

it a point of reference based on four principles: prepare for the

future, achieve results, lead people and develop capability. This

human-centric leadership is also articulated around the Care and

Dare approach:

f Care: leading by example with humility and integrity, having the

courage to change and ignite change or diving deeper when

"the story" does not align with "the facts."

f Dare: to value human skills as much as technical skills, to be

more DEI driven, to coach and be ready to be coached, and

–especially– to make it safe to try and safe to fail.

We are supporting leaders to be in the driver’s seat to inspire their

teams and deal with uncertainty. At the end of 2021, we began

rolling out the Performance Accelerator program. This program will

be delivered by a pool of 80 diverse Ambassadors, who provide

Solvay managers with the skills to passionately coach their teams,

help them give better and more constructive feedback and to be

comfortable with having courageous conversations. In2022, we

will launch new programs focusing on Care and Dare leadership,

aimed at developing self-awareness and personal growth to future-

proof our organizational capabilities. Renewed academies for

Manufacturing and R&I are also on the agenda for 2022.

A share purchase plan for employees

In December 2021, we announced the launch of

our first employee stock ownership plan, offering

Solvay personnel the opportunity to buy company

shares at a discount of 10%. The initiative, which

will be available to all Group employees globally,

aims to promote an ownership mindset and better

align employees with the Group’s performance,

encouraging them to embrace all opportunities

to drive the Group’s transformation and create

sustainable value for all.

Innovating in Growth platforms:

BatteryMaterials, Thermosplastic

Composites, Green Hydrogen

Using our Purpose and G.R.O.W. strategy as a compass, we have

strengthened our innovation portfolio, focusing most of our

resources on what we call our growth businesses. Sustainability

and circularity are integrated into our innovation projects from the

very beginning, with each project assessed using our Sustainability

Portfolio Management (SPM) methodology

. We are also using

digital tools to transform how we do research. This includes using

artificial intelligence, machine learning and computer simulations

to enable faster and cheaper innovation and accelerate time to

market.

“Our long-term investment orientation is

areal differentiating factor for our customers.

It’s crucial to the development of ourgrowth

platforms, helping us to establish strong

partnerships that will bring to market

theinnovative solutions that customers need.ˮ

Nicolas Cudre-Mauroux

Chief Technology Officer and

Materials Research andInnovationDirector

Increasing the speed of research in the agro

market

Solvay’s 45 years of expertise in agrochemical formulation

gives us a rather unique position in this market. However,

we were not organized in a way that allowed us to

efficiently store or save all of this R&I data. DataGrow is

a new and comprehensive digital formulation database

comprising more than 14,000agrochemical formulations,

2,600ingredients and 64,000tests. It allows us to share

information internally and accelerate our delivery to

customers, as well as to identify and reallocate our

resources to growth areas like crop protection and bio-

control. Our next step is to combine the benefits of the

database with the use of artificial intelligence to make

delivery times even quicker.

Read more » Solvay One Planet/Better life

page 35

SOLVAY 2021 ANNUAL INTEGRATED REPORT

STRATEGY

Three innovation platforms to prepare

for the future

We have developed three strategic Growth platforms that drive

innovation to enable the energy transition in three different fields:

battery materials, thermoplastic composites and green hydrogen.

The platforms meet market needs driven by business trends like

electrification and lightweighting, which have become a priority due

to stricter regulations on CO

emissions and the move toward zero-

emission mobility.

Run by small, agile teams with a start-up mindset, the platforms

offer customers what they need: one-stop-shop access to our

broad portfolio of products and technologies. They also foster

cross-innovation throughout the Group, enabling us to develop

tailor-made solutions that meet our customers’ specific application

and performance requirements. Our diverse portfolio includes

technologies at different stages of development, reﬂecting current

and future market needs.

A unique Battery Materials platform providing

wide-ranging solutions

An entire economy exists beyond the battery itself, including

battery cases, packs and recycling. Our Battery Materials platform

is unique in providing solutions in all of these areas. With the

transition to e-mobility solutions accelerating, there are plenty of

opportunities for future growth in the short- and long-term.

€2bn

estimated sales by 2030

A four-pillar strategy to capture signicant growth

opportunities

Our battery roadmap follows the development of the battery market,

which is growing quickly. It focuses our resources on areas in which

we are already, or have the potential to be, market leaders or market

makers. This includes expanding our capacity to produce our market-

leading Solef® PPVDF. This thermoplastic ﬂuoropolymer is used as

both a binder and a separator coating in lithium-ion batteries and is

essential for creating safer and longer-range performance.

At our site in Tavaux, in France, we are investing €300million

in creating the largest PVDF production site in Europe. The

new facility will be completed in December 2023. Combined

with capacity increases at our site in Changshu, in China, and

our existing operations in the US, the investment will reinforce

Solvay’s global leadership in the field and ensure that we are

well-positioned to meet growing demand for PVDF in hybrid and

electric vehicle applications.

SALES RAMP-UP

TECHNOLOGY DEVELOPMENT

04030201

BUILD ON

OUR STRENGTHS

ACCELERATE

DEVELOPMENT

INVEST

FOR THE FUTURE

EXTEND

THE SCOPE

Maintain or reinforce our

technology leadership and take

advantage of very strong market

growth expected over the next

10 years.

Our Solef® PVDF specialty

polymers for binders are the most

advanced in the world, allowing

us to create more energy-dense

batteries that enable increased

drive range.

Develop existing products,

mainly related to liquid

electrolytes, that present a

clear and substantiated value

proposition for battery makers

and can deliver revenue in five

years or less.

Our LiFSI conductive salt and

Energain® solvents can be used

to develop next-generation

batteries with increased drive

range.

Invest in the development of a

new class of materials required

for the batteries of the future,

which will make them lighter,

safer and more sustainable, and

increase drive range.

Our inorganic materials are key

enablers for solid-state batteries.

We develop the materials and

are also partnering with battery

manufacturers.

Go beyond the battery cell to

provide solutions along the

entire battery value chain.

Our unique technologies enable

us to recover 95% of high-purity

metals from used batteries,

enabling a circular business in the

battery value chain.

A FOUR-PILLAR STRATEGY TO CAPTURE SIGNIFICANT GROWTH OPPORTUNITIES

SOLVAY 2021 ANNUAL INTEGRATED REPORT

STRATEGY

Leading advances on next-gen solid-state

EVbatteries

Solvay is leading the development of advanced

inorganic materials for solid electrolytes, which are

needed for solid-state batteries, and accelerating

the scale-up of these materials. The French state

is supporting our efforts, as part of plans to build

a European value chain for EV batteries and boost

battery innovation in Europe. Investment began with

the opening of a dry room laboratory at our research

center, near Paris, in 2021, and was followed by a new

research and development pilot line in La Rochelle.

We are also a significant player in the European

Battery Alliance, and are committed to working with

this network to build an ecosystem across the entire

value chain, by delivering advanced materials and

partnering for innovation.

Innovating with customers

We are currently engaging with customers on a number

ofstrategic projects that are expected to be on the market

in the short or medium term. ACC (Automotive Cells

Company) is among the largest initiatives to manufacture

lithium-ion batteries for electrical vehicles in Europe. Over

the past few years, it has established a close collaboration

with Solvay to develop a new generation of batteries, in

the framework of the European Battery Alliance (Battery

IPCEI#1).

Accelerating innovation in Thermoplastic

Composites (TPCs)

TPCis a strong, chemically-resistant, lightweight and recyclable

material, with the high build rates necessary for mass production.

This makes it perfect for use in a number of demanding applications

and environments, across several industries, including aerospace,

Advanced Air Mobility, automotive and energy transition.

€500M

Addressable market for Solvay (Aerospace and

Oil&Gas) by 2030

A TPC roadmap for long-term innovation and growth

Solvay is the only company in the world with a diversified portfolio

of specialty polymers and composite processing technologies

capable of meeting all application needs. Our TPC growth platform

brings end-to-end innovation –from molecules to composites–

under one roof. Our state-of-the-art application and product

development centers in Brussels, Belgium, and Alpharetta,

Georgia in the US, allow us to collaborate with customers from

concept to commercial application, providing support in early-

stage design, prototyping and testing of parts. This drastically

reduces the time-to-market of our materials.

Our forward-looking timeline identifies opportunities for TPC

applications that allow us to take advantage of momentum across

multiple industries. In the medium term, this includes projects

for use in cars and trains, and the development of ﬂexible pipes,

which can be used in a number of applications to support energy

transition. In the long term, we are collaborating with partners to

develop commercial drones and air taxis, as well as hydrogen tanks

and storage solutions for the green hydrogen economy.

In 2021, we signed a “Joint Lab” agreement with Leonardo. The

goal is to develop composite materials and production processes

critical for the future of the aerospace industry, strengthening

our leadership position in this industry and others. We have also

partnered with 9TLabs, to help bring additively manufactured

carbon fiber-reinforced plastic (CFRP) parts to mass production.

These can replace metal as structural parts in the aerospace,

medical, luxury and leisure, automation, and oil and gas industries.

Combining 9T Labs’ innovative additive manufacturing technology

and Solvay’s high-performance thermoplastic polymers and

expertise in the production of thermoplastic composite prepreg

tape, the partnership significantly expands the portfolio of

sustainable, accessible and cost-competitive CFRP parts that

9TLabs can offer to customers.

Expanding our TPC capacities in the US

In2021, we opened a new manufacturing facility

in the US, located in Greenville, South Carolina.

This represents a major milestone in our efforts to

industrialize Solvay’s TPC capacity. It allows us to

expand alongside our customers as TPC technology

gains momentum in a growing number of applications

and in energy transition. Specifically, we now have

theability to manufacture unidirectional composite tape

from a range of high-performance polymers including

PVDF, PPS and PEEK, helping customers in the energy,

aerospace and automotive markets to reduce weight

and emissions. The new facility also marks the first step

in our plans to facilitate circularity for TPC, allowing

us to recycle scraps from our manufacturing plants.

The Greenville project is part of a series of strategic

investments in TPC, including the addition of capacity

inAnaheim, California.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

STRATEGY

Well positioned to become a global leader

inmaterials for green hydrogen

Green hydrogen is a key lever for the decarbonization of hard-to-

abate sectors, such as long-haul and heavy-duty transportation

and industries like steel and fertilizer, helping in the global fight

against climate change. Growth in the green hydrogen economy

is currently small, but is expected to grow exponentially within the

next ten years and is an area driven by significant government and

industry investment.

~€5bn

Addressable market for Solvay by 2030

Solvay products at every step of the green hydrogen

value chain

With relevant products and solutions all along the green hydrogen

value chain, our ambition is to be a leading material solutions

provider for the green hydrogen economy. Our current focus

is therefore on positioning ourselves within the market, and

developing partnerships and materials, so as to ensure that we

are able to make the most of future growth.

Our hydrogen platform brings together all the innovative material

and chemical solutions we have to offer to advance the emerging

green hydrogen economy, concentrating our resources and efforts

in one place. At the heart of the platform are products such as

our Aquivion® ionomer, Udel® polysulfone (PPS) and Cerium

Gadolinium Oxide (CGO). These are used in the core of hydrogen

systems, where the key reaction happens, to enable hydrogen

production and conversion in fuel cells. We also intend to expand

our offering for hydrogen applications, with products and solutions

for auxiliary components in fuel cells and electrolyzers, for example.

As part of our commitment to this growth industry, Solvay has

joined the Hydrogen Council, a global CEO-led initiative that

brings together leading companies with a united vision and long-

term ambition to make green hydrogen a catalyst for the clean

energy transition.

» Electrification

page 41

» Lightweigthing

page 42

» Clean mobility story

page 47

SOLVAY 2021 ANNUAL INTEGRATED REPORT

STRATEGY

Climate and environmental concerns now sit at

the top of government agendas, alongside

increasing recognition of the importance of

human dignity, with new regulations, standards

and mandatory disclosures forcing businesses to

take action. Solvay has anticipated this by

accelerating our sustainability roadmap and

raising the bar. This includes targeting carbon

neutrality before 2050, bonding along the value

chain to align with the Science Based Targets

initiative (SBTi), initiating partnerships to make

our businesses more circular and introducing our

Solvay One Dignity program to foster equity and

inclusion across the company.

Raising the bar

on sustainability

1. SBTi: Science Based Targets initiative.

2. ReCiPe method for biodiversity impact assessment (under development).

3. Circular economy indicators have been adapted to align with the Circulytics

approach

developed by the Ellen MacArthur Foundation.

4. Reportable Injury and Illness Rate (RIIR): number of work-related injuries and illnesses

(employees and contractors) resulting from an accident with severity above rst aid,

according to US OSHA 29 CFR 1904, per 200,000 work hours

Resources

Increase sustainable solutions

% of Group sales

Achieve 65% (versus 50%)

Increase circular economy

% of Group sales based on circular raw materials

or energy

More than double

Reduce non-recoverable industrial

waste

Reduce by 30%

Reduce intake of freshwater

Reduce by 25%

Climate

Align greenhouse gas emissions

with Paris Agreement & SBTi

Reduce by 30% (Scope 1 & 2)

Reach carbon neutrality

before 2040

(excl. soda ash) before 2050 incl. soda ash

Phase out coal for energy

production

(wherever renewable alternatives exist)

Achieve 100%

Reduce pressure on biodiversity

Reduce by 30%

Better life

Safety (RIIR

indicator)

Aim for zero

Inclusion and Diversity

Women in mid & senior management

Achieve 50%

Gender equality

Extend maternity leave

16 weeks for all co-parents

Solvay One Planet

2030 goals

10 ambitious objectives to

reduce our global impact

(baseline 2018)

ACHIEVED IN JANUARY 2021

“Solvay One Planet, our 2030 sustainability

program, is inspired by the UN Sustainable

Development Goals and we are committed to

supporting the UN Global compact principles.”

Ilham Kadri

Solvay CEO

SOLVAY 2021 ANNUAL INTEGRATED REPORT

STRATEGY

CLIMATE

Fighting against

climate change

€1.7bn

sales from solutions that

reduceour customers’ overall

climate impact

2030 goals

(baseline 2018)

Align greenhouse gas emissions

with Paris Agreement and SBTi

Reduce by 30% (Scope 1 & 2)

2021: 11Mt CO

eq.

-14% (-11% structural) vs 2018

Reach carbon neutrality

before 2040

(excl. soda ash) before 2050 incl. soda ash

Phase out coal for energy

production

(wherever renewable alternatives exist)

Achieve 100%

2021: 27pj (-18% vs 2018)

Solid fuels consumption

Reduce pressure on biodiversity

Reduce by 30%

2021: -13% (-24% vs 2018)

1. SBTi: Science Based Targets initiative.

2. ReCiPe method for biodiversity impact assessment (under

development).

Solvay operators at our Linne Herten peroxides plant in the

Netherlands, which is powered by an on-site solar farm.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

STRATEGY

n 2021, we took a major step in our ongoing sustainability

journey, unveiling our plan to reach carbon neutrality

(Scope1 and 2 emissions) before 2050. This includes

targeting carbon neutrality for six of our seven global

business units by 2040, and before 2050 for our hard-to-

abate soda ash activity. To support us in this, alongside the target

we set in 2020 to phase out coal usage in energy production

where renewable alternatives exist by 2030, we strengthened our

greenhouse gas reduction target for 2030 from -26% to -30%.

Investing in a carbon-neutral future

To achieve our carbon neutrality objectives, we need to invest in

innovation. Our efforts will focus on maximizing electrification and

Story. Targeting

carbon neutrality before 2050

clean energy use, such as solar power and sustainable biomass,

across our plants, as well as facilitating process innovations. We

plan to invest up to €1billion to reach carbon neutrality by 2040

in all our businesses other than soda ash. Additional investments

of approximately €1billion have been identified for soda ash,

in order to pave the way for full carbon neutrality for the Group

before 2050. We expect our investments, which represent an

average of up to 10% of our Capex spend, will be value accretive,

generating returns well in excess of our cost of capital, and as

these investments will be partially supported by non-recourse

financing, we will be able to continue to invest in our growth

platforms at the same time.

A three-phase approach spanning three decades, focused on switching energy sources to cut emissions

and on improving the Group’s carbon footprint across all our businesses and operational activities.

OUR ROADMAP TOWARD CARBON NEUTRALITY

CARBON NEUTRALITY

INALLBUSINESSES OUTSIDE

SODAASH

Solvay will continue to execute new

energy transition projects, targeting

carbon neutrality in all businesses outside

soda ash.

f Continuing to deploy and accelerate

electrification for low to medium energy-

intensive businesses.

f Driving process innovations and new

energy technologies for high-emissions

businesses and sites.

ENERGY TRANSITION

PROJECTS AT OUR PLANTS

WORLDWIDE

f Kickstarting a strong portfolio of

emissions reduction projects focused on

switching to biomass, biogas or waste

for heat production and to green power

for electricity.

36 projects underway at the end of 2021,

2,500,000 tons of CO

saved annually

f Embedding electrification and carbon

neutrality into upgrade and expansion

plans at our plants, reinventing

technologies and processes.

11% structural reductions achieved

attheend of 2021

CARBON NEUTRALITY IN

ALL SODA ASH PLANTS

f Focusing on the hard-to-abate soda ash

plants, through the development of new

technologies and energy sources.

f Using offsets for a volume up to 10%

of the 2018 baseline, primarily through

nature-based offsetting programs

adhering to high-quality sustainability

standards and in partnership with NGOs.

2040-2050

2020-2030

2030-2040

2020

Announcing our objective to align our

emissions reduction target with the Paris

Agreement and to join the SBTi

2021

Unveiling our roadmap to reach carbon

neutrality before 2050 and upgrading our

Scope 1 and 2 target to -30% by 2030

2022

Scope 3 targets to be defined

and receive SBTi validation

SOLVAY 2021 ANNUAL INTEGRATED REPORT

STRATEGY

What did we achieve in2021?

We accelerated projects to phase out coal

from our energy mix by 2030

Soda ash processing requires energy in the form of heat, which is

often produced from coal. This represents a significant share of our

greenhouse gas emissions. New, sustainable alternatives to coal-

based energy are currently being developed at two of our plants

and will cut the Group’s total emissions by 6%.

f Our Rheinberg plant, in Germany, is set to become the world’s

first soda ash plant powered primarily by renewable energy. The

first of two sustainable biomass boilers, fueled by discarded

wood chips supplied by local companies, went into operation

at the site in May 2021. With the second boiler in the pipeline,

the site is on course to meet its target to phase out the use of

thermal coal by 2025.

f At our soda ash site in Dombasle, France, Solvay’s Board of

Directors has approved a project to produce energy with

industrial, commercial and household wastes, instead of coal,

from 2024 onward. Developed with Veolia, this initiative will cut

the CO

emissions from the plant’s energy production by 50%,

while improving its competitiveness.

We continued to develop green electricity

sources for our sites

Building on the momentum of previous years, we have launched or

committed to several new renewable electricity projects in all regions

of the world. Once fully operational, more than 30% of the electricity

purchased and used by all our plants will come from renewable

sources.

f Since January 2021, our Aroma Performance, Specialty Polymers

and Novecare Global Business Units (GBUs) in the US, which

comprise 16sites, have been 100% reliant on renewable energy

sources for their electricity. This is achieved through the Solvay Solar

Energy farm in Jasper County, South Carolina, direct purchases of

renewable energy and Renewable Energy Certificates (RECs) from

the EarthEra Program

. Solvay is also a proud member of Apple’s

Supplier Clean Energy Program, and we continue to power our

Apple-related operations with 100% green electricity.

1. EarthEra is a renewable energy trust that is managed by an independent third-party trustee. Solvay USA, Inc will buy RECs from NextEra Energy Marketing under this program.

The RECs Solvay will receive will be GreenE certied RECs; 100% of the funds generated from the sale of the RECs go to the development of new renewable projects.

Renewable energy Other GHG reduction projects

36 PROJECTS TO ACHIEVE ENERGY TRANSITION,

REDUCING CO

EMISSIONS BY2,500,000 TONS PER YEAR

1 site biomass

steam (South Korea)

2019

1on-site

solar farm (CN)

2022 and 2023

1on-site biomass

steam (CN)

2019

2 sites solar and

wind electricity (IN)

2020 and 2022

1 on-site solar farm (IN)

2019

1 site biomass

steam (IN)

2020

1on-site solar farm (BG)

2022

on-site

biomass steam

(BG)

2022

Investing in China Renewable

Energy Fund (CN)

2018

1 site

wind electricity (FI)

2023

4 sites 100%

solar electricity (IT)

2022

GHG reduction

project (IT)

2018 and 2020

4 sites 100% renewable

electricity (UK)

2020

2 on-site solar

farms (Thailand)

2019 and 2022

2 on-site

biomass steam (DE)

2021 and 2025

1on-site solar farm (NL)

2020

1 on-site biomass

steam (ES)

2019

1 on-site solar farm (NJ)

2020

1 site zero carbon

electricity (IL)

2020

2 off-site solar farms (SC)

2018 and 2021

1 site 100%

solar electricity (TX)

2020

Biogas

for 4 sites (FR)

2020

2 on-site biomass

steam (FR)

2025

1 on-site waste to

energy project (FR)

2024

2 on-site

solar farms (FR)

2023

2 sites switch

from coal to gas (WY)

2021 and 2023

3 GBUs (16 sites)

100% renewable electricity

SOLVAY 2021 ANNUAL INTEGRATED REPORT

STRATEGY

f At the end of 2021, we signed a 15-year contract for a new solar

farm project in the US. Renewable electricity will be used to power

our Materials and Technology Solutions plants from late 2023

onwards.

f In Europe, more than 10% of our electricity needs are now supplied

by renewable energy sources. In May 2021, we signed our first

European Corporate Power Purchase Agreement (PPA) in Italy,

committing to purchase electricity from a solar farm in Puglia for

ten years. This will supply enough energy to cover 100% of the

electricity needs for four of our five sites in Italy, helping to reduce

our CO

footprint by 15,000tons every year.

f Operating under strict national regulations in Asia, we have

developed a number of on-site solar projects that meet between

5-15% of the current electricity needs of each site. Where

possible, we are also sourcing solar energy from external sources.

For example, in August 2021 we signed a contract to purchase

electricity from a solar farm in Maharashtra, in India. This will cover

around 60% of electricity needs at our Roha site from early 2022.

We bonded with customers

andsupplierstoreduce Scope 3 emissions

inthe value chain

Scope3 emissions comprising 26Mt of CO

are essentially

embedded in the goods and services purchased from our suppliers

(19%) or occur during the use of our products by our clients and

consumers, as well as at their end-of-life (65%).

f Our Scope3 target shall at least meet the 2°C criteria of the

Science Based Targets initiative.

f We called on our 400strategic suppliers to join us in our climate

journey. Climate commitments will become a criteria of choice

for future strategic supplier relationships.

f We raised our climate agenda with key customers, in order to

establish ways of reducing emissions along the value chain and

meeting customers’ demands for zero- or low-carbon products.

“We’ve worked hand in hand with Solvay to

accompany their evolving needs for low-carbon

hydrogen. As a pioneer in hydrogen for more

than 50 years, we know that the success of

a hydrogen project is collective! The Solvay

Supplier Days showed a clear will from Solvay to

decarbonize their existing processes and we are

pleased to be their key partner on this journey!ˮ

Slim Naanaa

Global Market Director, Energy & Chemicals Markets, Air Liquide

Supplier Engagement Program: building a

greener, more agile and resilient supply chain

In April 2021, we launched our first Supplier

Engagement Program, aimed at encouraging

our suppliers and buyers to adopt a sustainability

mindset. As part of our first Supplier Days, we set

up a collaborative platform to share experiences,

explore common challenges and propose

collaborative ideas. A call for collaborative projects

to help us reach our sustainability objectives was

launched in July, with the next stage of the initiative

due to take place in early 2022.

300

people

participating in ve

ESG workshops

250+

executives from 130+ companies in

Solvay’s rst Supplier Days

projects collected

addressingCO

emissions,

wastereduction,

circularity and social

impact

SOLVAY 2021 ANNUAL INTEGRATED REPORT

STRATEGY

he World Economic Forum has calculated that 50% of

the global economy is reliant on nature. Preserving the

world’s ecosystems to protect human, animal and plant

health is of critical importance to Solvay. That’s why

we’ve set a target to reduce our pressure on biodiversity by 30%

before 2030. Since 2018, we have already reduced our biodiversity

impact by 24%.

Providing sustainable solutions

for our customers

We are working closely with customers and suppliers to help reduce

the pressure on biodiversity across our value chain.

“We were extremely excited that Solvay joined

our member network in 2021. Solvay not only

has a deep understanding of the role that nature

plays in the world, but also the role Solvay

can play to support nature. Solvay is unique in

integrating biodiversity in business relationships

with customers as well as at an early stage

in development of focused projects. Solvay

recognizes that we can start actions at home, but

it’s also an imperative to implement actions across

the value chain. It’s an understanding that others

in all industry sectors should shareˮ

Margaret O’Gorman

President at the Wildlife Habitat Council

For example, Solvay has been a supplier and partner for Freeport-

McMoRan, one of the world’s leading producers of copper and gold,

for more than 20 years. Our products are essential to their business,

enabling them to achieve a better yield while helping them reduce

the impact of their activities on the environment.

Story.

Acting to protect

biodiversity

“Solvay’s ACORGA® extractants and AERO® promoters are core

to improving the efficiency of our mills and leaching (extraction)

operations,” says William Cobb, Vice President and Chief

Sustainability Officer at Freeport-McMoRan.

“Improving our effectiveness is important, but

improving our efciency provides even greater

benets, including positive contributions to

climate and water, both of which play a critical

role in preserving biodiversity. As it is imperative

to enable sustainable sourcing solutions, Solvay

and Freeport’s ambition is to accelerate impact

through collaboration, supporting biodiversity

impacts.”

William Cobb

VIce President and Chief Sustainability Officer, at Freeport-McMoran

Local initiatives inspiring

Group success

In February 2021, we joined the Wildlife Habitat Council (WHC), an

international NGO that works with businesses to promote biodiversity

conservation. This partnership helps us to focus our efforts and identify

areas for improvement, both at our sites and in collaboration with our

customers.

“Adopting a recognition standard such as WHC Conservation

Certification® offers us a great opportunity to launch local action plans,

but also to propose concrete collaborations to our clients to reduce

the pressure on biodiversity, protect habitats and species, and work

on the restoration and improvement of certain areas,” explains Pascal

Chalvon Demersay, Solvay’s Chief Sustainability and Government

Affairs Officer.

A good example of one of our local projects is a landscape recovery

initiative at a former limestone quarry near our Torrelavega site,

in Cuchia, Spain, for which we received the Cefic “Ecosystem

Preservation” award in October 2021. This vast project turned the

former quarry into a thriving wildlife reserve, with 169species of birds

and 289 varieties of plants.

The first chemical company in Brazil to be awarded

the WHC Gold Certification

Two rivers cross our 16 million square meter site in the

Atlantic Forest, which is home to a vast range of wildlife

species. Through activities such as reforestation,

riverbank recovery, education and the installation of a

fish ladder to enable fish to migrate for breeding, the

site has established itself as a wildlife haven. Close to

83 species of birds, mammals, fish, amphibians and

reptiles, and more than 90plants, call the site home,

and it even serves as a refuge for the endangered

maned wolf and pumas. In2021, the World Habitat

Council awarded the site its Gold Certification, making

Solvay the first chemical company in Brazil to achieve

such a rating.

“Winning the WHC certificate shows that progress

and the environment can walk together, combining

sustainability and good practices, always with respect

for the fauna and ﬂora that surround the company’s

site in Paulínia. Congratulations, Solvay Group!

Congratulations to its collaborators and partners

who engaged for this certification to take place. May

this achievement inspire other companies”

Du Cazellato

Mayor of Paulínia

Engaging employees globally through

ourannual Citizen Day

Our pioneering approach to assessing and reporting on our biodiversity

impact was recognized by Act4Nature International in 2020, an initiative

that encourages corporate action on biodiversity. Yet to be successful in

reaching our biodiversity target, our employees must play an active role.

To increase employee engagement and raise awareness of the

importance of biodiversity across the Group, we focused the 2021

edition of our annual Citizen Day on biodiversity. We also promised

that the more people who took part, the more money we would donate

to biodiversity associations.

Our employees across the world came together to take part in more

than 500biodiversity actions. At our Tavaux site, in France, for example,

employees were set a challenge to reduce their digital carbon footprint,

with one tree planted at the site for every 100,000emails they deleted.

In Thailand, around 300volunteers came together to clean up ten local

beaches, helping to save sea creatures and protect the environment,

while in Guatemala, employees created an on-site ecosystem for

endangered native bees,at their plant in Amatitlan.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

STRATEGY

Planting herbs, installation of birdhouses and a talk

byabeekeeper in the green area at our Bollate site, in Italy.

“To witness initiatives such as these being carried

out in our area by a company like Solvay is a

source of great pride and is further proof of the

effective and substantial collaboration between

the company and the public authorities, with a

shared commitment to sustainability. ˮ

Ida DeFlaviis

Councillor for Environmental and Educational Affairs at

BollateCityCouncil

Visit to a wetland nature reserve at the mouth

oftheYangtzeRiver, in China.

“This year’s citizen day is a very inspiring

experience. Living in the cities, we hardly have

any opportunity to get this close to the wild.

Sometimes the development of human society

leads to conicts with nature, but we have to learn

to share the Earth with all the creatures, because

if the environment deteriorates, the living

conditions for mankind would deteriorate too.ˮ

Shen Wenting

Technology Team Leader, Novecare GBU, China

15,000

employees

participating

121

sites worldwide

€20,000

raised for a selection

ofassociations acting

for biodiversity

>5,700

participants from

NGOs and local

communities

2021 CITIZEN DAY IN NUMBERS

Citizen Day at our plant in Long Beach, California (United States).

SOLVAY 2021 ANNUAL INTEGRATED REPORT

STRATEGY

RESOURCES

Protecting natural

resources

€3.7bn

sales from solutions that reduce

global resources consumption

2030 goals

(baseline 2018)

Increase sustainable solutions

% of Group sales

Achieve 65% (versus 50%)

2021: 53%

Increase circular economy

% of Group sales based on circular raw materials

or energy

More than double

2021: 5%

Reduce non-recoverable

industrial waste

Reduce by 30%

2021: 58kt (-34% vs 2018)

Reduce intake of freshwater

Reduce by 25%

2021: 315Mm

(-5% vs 2018)

1. Circular economy indicators have been adapted to align

with the Circulytics® approach developed by the Ellen MacArthur

Foundation.

Employees at our Amatitlan site in Guatemala build a vertical garden

to promote biodiversity for Solvay Citizen Day 2021.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

STRATEGY

New partnerships to enable a circular

economy

Chemistry is a key enabler of a circular economy. All our

businesses are engaged in developing a product portfolio based

on renewable feedstocks and energy. In parallel, we continue to

develop partnerships to advance this new economy and preserve

resources across our value chains. This includes partnering with

Veolia and Renault to develop solutions for the recycling and reuse

of electric car batteries and working with organizations such as the

Ellen MacArthur Foundation to accelerate the global transition

toward a circular economy. In 2021, we extended and deepened

our partnership with the Foundation, committing to more than

double our revenues from renewables and recycled-sourced

products by 2030.

TECHSYN, a new technology for increased

sustainability in the tire industry

In 2021, Bridgestone, Arlanxeo and Solvay launched TECHSYN,

a new technology that gives tires unrivaled strength and

environmental performance. It enables tires to achieve up to 30%

better wear efficiency and up to 6% less rolling resistance, without

compromising performance, helping to reduce fuel consumption

and CO

emissions, and to cut raw material consumption.

TECHSYN went from concept to reality in just 24months, thanks

to the expertise and close collaboration between the partners. This

includes Solvay’s unique advanced silica developments; Arlanxeo’s

expertise in developing, manufacturing and delivering novel tire

polymers and Bridgestone’s innovative compound technology.

“At Bridgestone, we fundamentally believe that

ground-breaking innovation and the future of

mobility can’t be achieved without collaboration.

The partnership in which TECHSYN is rooted has

evolved to become one of the most unique we

have ever been part of.ˮ

Laurent Dartoux

President and CEO, Bridgestone EMIA

“By bringing together in partnership the

combined know-how, skill and creativity of three

world-class companies that are championing

different parts of the tire supply chain, we

have been able to develop a new technology

platform that offers new ways to address

challenges specic to the tire industry.ˮ

Donald Chen

CEO, Arlanxeo

Partnering with Mitsubishi Chemical

Advanced Materials to further sustainability

Mitsubishi Chemicals Advanced Materials has significant

experience in the mechanical recycling of advanced materials.

Combined with Solvay’s chemistry expertise, we have the ideal

partnership to confront the challenges involved in recycling

demanding applications, such as long-term implantable medical

devices. After successfully reclaiming and recycling advanced

materials such as Polyetheretherketone (PEEK), both companies

are now actively engaged in exploring and testing new materials in

Solvay’s portfolio, such as Udel® polysulfone (PSU), with the aim of

eliminating polymer waste and supporting the circular economy in

healthcare applications.

“One of our guiding principles is to realize

KAITEKI, the vision of Mitsubishi Chemical

Holdings Corporation: The sustainable well-

being of people, society and our planet Earth.

Solvay has been an essential partner in recycling

medical equipment, and we look forward to

continuing a partnership based on our strong

synergies to help our common customers tackle

the challenges to eliminate plastic waste.ˮ

Michael Koch

Chief Executive Officer, Mitsubishi Chemical Advanced Materials

SOLVAY 2021 ANNUAL INTEGRATED REPORT

STRATEGY

Enhancing sustainability in Rosignano, Italy

Soda ash is made from three natural materials – limestone,

salt brine and water – and is mainly used to make glass. Solvay

has been producing it at our plant in Rosignano for more than

100years. Over the past 20years, we have invested more than

€400million, helping to decrease freshwater consumption, lower

energy usage, reduce greenhouse gas emissions and increase

recycling at the plant.

At the end of the soda ash production process, we dispose of

the remaining inert, natural materials in the sea. These consist

of powdery limestone mixed with gypsum, sand and clay - none

of which are toxic or dangerous. However, as this contributes to

the white color of the beach, we regularly face questions from

stakeholders and the public concerning the potential impact on

the environment.

Following discussions with local, regional and national authorities,

and supported by independent scientific bodies, a release to the

sea through an open channel was confirmed to be the best and

preferred solution for Rosignano. This is because underwater

currents ensure that the limestone does not accumulate, but

instead spreads evenly on the seabed, while the limestone that

ﬂows back onto the shore and the beach plays an important role

in stabilizing the coastline against erosion.

The process is undertaken in full compliance withEU and Italian

regulations, as well as our own high standards for health, safety and

environmental protection. Every step of the process is monitored

by Solvay, regulators and independent academic institutions and

all of this research demonstrates that the water near our operations

is safe, and consistent with the rest of the Tuscan coast.

Solvay also works hand in hand with the community to help protect

local biodiversity. For example, Solvay participated in the creation

of Italy’s first bird reserve around the nearby Santa Luce lake, which

is located on a migratory route and boasts over 3,000different

species. On land near the industrial site, the Group also manages

our own certified organic farm, which was set up in 2017.

Solvay has been cooperating with the towns of Cecina and

Rosignano through the Aretusa Consortium project since 2006,

whose facilities treat municipal wastewater that is reused in the

Rosignano plant for industrial purposes, reducing freshwater

withdrawals by 30%. Similarly, the Rosignano facility is also

committed to reducing its pressure on biodiversity by reducing

emissions. This has been achieved by implementing a

cogeneration plant and a high efficiency gas turbine on the site, and

by capturing part of the site’s emissions and reusing the captured

residue in the manufacturing process. Some further actions have

been carried out and are still underway to reduce the amount of

non-recoverable industrial waste and the quantities of natural

resources extracted from the environment, especially water, rock

salt and limestone.

BETTER LIFE

Improving quality

oflife for employees

and society

€3.2bn

sales from solutions that improve

society’s quality of life

2030 goals

(baseline 2018)

Reportable Injuries and Illnesses

Rate (RIIR

)

Aim for zero

0.43 (-16% vs 2018)

Inclusion and Diversity

Women in mid & senior management

Achieve 50%

2021: 25%

Gender equality

Extend maternity leave

16 weeks for all co-parents

regardless of gender

Achieved in January 2021

SOLVAY 2021 ANNUAL INTEGRATED REPORT

STRATEGY

1. Reportable Injuries and Illnesses Rate (RIIR) employees and

contractors: number of work-related injuries and illnesses resulting

from an accident with severity above rst aid, according to US

OSHA 29 CFR 1904, per 200,000 work hours

Employees in Shanghai and their families learn about migratory birds

at a nature reserve on the Yangtze River for Solvay Citizen Day 2021.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

STRATEGY

Advancing Diversity, Equity and Inclusion

In 2021, we launched the Solvay One Dignity program. Structured

around three pillars – diversity, equity and inclusion (DEI) – and

setting out objectives with their action plans to be achieved by

2025, it is part of the cultural change we are driving through our

company.

“I truly believe that companies that put human

dignity rst are the ones that will thrive, prosper

and last. All industries have been failing when

only targeting diversity guresˮ

Ilham Kadri

Solvay CEO

80%

employees feel they can be “themselves” at work

*source: Solvay Pulse, September 2021

3 QUESTIONS FOR

NATHALIE VAN YPERSELE,

Chief Diversity, Equity and Inclusion Officer

WHAT MAKES THE SOLVAY ONE DIGNITY

PROGRAM UNIQUE?

N.v.Y.— We see equity and inclusion as the building

blocks for diversity. Our focus is on building equity first

and creating the kind of inclusive environment that will

attract and retain diverse talent. If each of us – regardless

of our background or identity – feels respected, heard

andvalued, we will be more engaged, more innovative

and, as a consequence, will perform at our best. Ourbroad

program includes nine objectives and encourages a

bottom-up approach.

TELL US ABOUT THE PROGRESS MADE SO FAR

IN ACHIEVING THE ONE DIGNITY OBJECTIVES?

N.v.Y.— DEI is not a question of statistics, but of culture

and engaging people, so our focus right now is on

developing a new mindset within the company and among

employees. In just six months, we’ve made progress on

several fronts. We’re working to expand the talent pool

from which we will select future leaders, for example, and

we launched our very first company-wide inclusion survey

at the end of 2021, which will help us to set priorities and

measure our progress.

WHAT CHALLENGES DO YOU EXPECT TO FACE

MOVING FORWARD?

N.v.Y.— We are not yet where we want to be, but we now

have momentum. In 2022, we will define specific KPIs,

cascade DEI training down through the organization and

conduct pilot initiatives, to see what works and can be

scaled. For example, we‘re currently in discussion with

a specialized partner in the US to help us increase our

outreach efforts toward talents with disabilities.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

STRATEGY

Progressing our action plans in2021

To advance gender EQUITY, we:

f Conducted gender pay gap assessments: We are

collecting data to help us identify any unjustified or

unexplained gaps and we are defining a roadmap to

address them.

f Put in place mentoring programs: Almost 25% of our

female junior managers responded to a call for volunteers

to take part in The A Effect Ambition Challenge, an

international program designed to help women boost

their careers. A total of 150 women have already taken

part and 300others will participate in 2022.

To create a more INCLUSIVE culture, we:

f Kicked off our inclusive leadership journey at the very top:

Our Senior Leadership Team has already received specific

training on inclusion and we are now embedding it into our

leadership training programs.

f Supported the launch of three new Employee Resource

Groups (ERGs): These voluntary groups – we have seven at

Solvay – are run by and for employees. They offer colleagues

confronted with similar challenges an opportunity to discuss,

share experiences and exchange ideas to support one

another’s development.

f Made disability a priority: Working with Disability:IN, we have

initiated a comprehensive benchmarking project to identify

areas for improvement and develop a roadmap to improve

accessibility at Solvay.

9 DIVERSITY, EQUITY AND INCLUSION OBJECTIVES

TO BE ACHIEVED BY 2025

Objectives Action plans

Diversity

Accelerate gender parity at all mid and

senior levels by 2030

Attract and promote diverse talents to increase our

diverse talent pool

Make our workplace optimal for people with

disabilities

Set up a Solvay Disability Equality Index and improve

ourresults

Develop resource groups to encourage employees

tobringtheir “whole self” to work

Set up diverse Employee Resource Groups worldwide

Equity

Assess if there are undesired pay gaps and close

them if there are any

Potential structural pay gaps and gender pay gaps are

being constantly measured and a plan of action to close

them is developed and implemented if needed

Ensure fair recruitment

All mid and senior-level (S19 and up) job openings

haveashortlist comprising 50% of underrepresented

groups (including women)

Ensure equitable access to career opportunities

anddevelopment

Set up mentor/mentee programs starting with

underrepresented groups

Inclusion

Build an inclusive employee experience Set up an Inclusion Index and improve our score

Assessment and development program for Solvay

leaders to grow and nurture an inclusive mindset

The GBU presidents and Heads of Function have

a DEI score for their GBUs or Functions and develop a

plan to improve their score

Build a culture in which individuals feel empowered

to speak out or speak up when they experience or

witness non-inclusive behaviors

Set up a Speak up network where people can discuss

non-inclusive behaviors

1. In line with our Code of Business Integrity

SOLVAY 2021 ANNUAL INTEGRATED REPORT

STRATEGY

Fostering better life at work

Employee well-being is key to our success. During the pandemic,

we put in place dedicated tools to protect the health of employees

and their families. They help the Group, and managers worldwide,

to quickly adapt and put in place appropriate action plans. They

include:

f Global monthly monitoring of all employees who have tested

positive for Covid-19 or are in quarantine, which is used by site

managers to adapt safety measures locally.

f A Pulse survey, carried out worldwide every quarter, which

measures employee motivation and mindset and helps identify

areas for improvement. In September 2021, specific questions

were included to measure employee engagement and enable

us to monitor this key indicator over time.

f The Solvay Solidarity Fund continues to support employees

significantly impacted by the pandemic and natural disasters.

Over 850individual applications for support have been

processed since April 2020 and we have supported local

communities through 30distinct projects, including initiatives

relating to urgent healthcare needs, mental health support for

caregivers and assistance for schools affected by flooding. In

early 2022, we donated €1million to relief efforts in Ukraine and

promised to double future employee donations.

f Our Employee Assistance Program, launched globally in

November 2021, which offers confidential psychological

support and other assistance, such as life coaching and legal

and financial orientation, to all employees and members of their

households. In collaboration with Jaume I University of Valencia,

in Spain, we also launched a pilot initiative to create an employee

well-being observatory. Through a holistic well-being diagnosis

led in three Solvay sites, we will measure the effectiveness of our

efforts and design the course of action needed.

The following initiatives are also part of our well-being at work

policy:

f Starting on January 1, 2021, we increased our global maternity

leave policy to 16weeks and extended it to all co-parents

employed by the company. This is part of our Solvay Cares

benefit program, which provides a minimum level of company

social benefits to all employees worldwide.

f In 2021, more than 7,500of our people moved into a hybrid

mode of working across Solvay’s 35 administrative sites globally.

This is part of our mobile working framework, launched in 2020.

Driving change through the Sustainable

Guar Initiative

Solvay is a world leader in guar-based business and has been

acting as a change agent in this field through the Sustainable Guar

Initiative (SGI). The initiative was launched in 2015, in collaboration

with the NGO Technoserve and our customer L’Oreal, with another

customer, Henkel, joining shortly after. It aims to help make guar

cultivation more sustainable in Rajasthan, India, while empowering

women farmers through training in hygiene, health, and nutrition.

In 2021, we took the initiative a step further, partnering with

Technoserve and BanQu to further enhance our social impact.

Using blockchain, we have built a digital platform that allows

farmers to trace their guar from farm to shampoo, ensuring full

transparency on prices and volumes sold and enabling them to

benefit from direct payment. So far, 2,000farmers have started

using the platform, which also provides training on sustainable

farming practices and school attendance for children, and

includes programs dedicated to the empowerment of women

farmers. Perhaps most importantly, it enables women to access a

financial identity, giving them the opportunity to open their own

bank accounts and offering them opportunities to continue to do

business during pandemic restrictions.

Innovating to raise the bar with

new non-uorosurfactant technologies

Solvay’s goal, wherever possible, is to use non-ﬂuorosurfactant

technologies in our operations. It is an ongoing journey, which has

enabled us to explore new technological innovations that advance

our sustainability ambitions.

The launch of our new non-fluorosurfactant technologies,

Hylar®5000S and Tecnoﬂon® LX, in May 2021 is a great example

of how Solvay is leveraging our innovation engine to drive new

sustainable solutions for customers. These technologies use

a new polymerization process that does not require the use of

ﬂuorosurfactant process aids from the polyﬂuoroalkyl substances

(PFAS) family of compounds, while keeping important properties

required by customers and applications.

At our West Deptford facility, in New Jersey, our new non-

ﬂuorosurfactant technologies have been in full production since

July 2021. As a result, Solvay has been able to completely eliminate

the use of PFAS-based process aids in the US.

The phasing out of PFAS-based process aids is not yet feasible in

all applications. Research is ongoing to transform our products

and provide more specialized products that our customers can

qualify for use in a variety of applications that support a more

sustainable society and green mobility. This includes solutions

used in renewable energy installations, lithium-ion batteries and

components for compact engines in hybrid vehicles.

Today, we use a very limited number of ﬂuorosurfactant process

aids at our Spinetta plant, in Italy, where we apply state-of-the-

art techniques that eliminate nearly 100% of fluorosurfactant

emissions from our manufacturing. This is a concrete example of

how we are using science to focus on a more sustainable future.

» https://www.solvay.com/en/innovation/science-solutions/pfasRead more:

SOLVAY 2021 ANNUAL INTEGRATED REPORT

STRATEGY

40 Global business trends

driving our markets

41 Electrification

42 Lightweighting

43 Resource efficiency

44 Expanding healthcare

45 IoT and Digitalization

46 Eco-friendly based solutions

47 Enabling more

sustainable mobility

51 Our sustainable

solutions serving

fast-growing markets

51 Consumers

53 Agro

54 Electronics

SOLVAY 2021 ANNUAL INTEGRATED REPORT

BUSINESS ENVIRONMENT

BUSINESS

ENVIRONMENT

SOLVAY 2021 ANNUAL INTEGRATED REPORT

BUSINESS ENVIRONMENT

Chemistry is a core component of

everyday products and solutions.

In a growing world, in which we are

consuming resources at an

unsustainable rate, chemistry is also

the key to recycling what we use,

saving natural resources, ghting

climate change and improving quality

of life. Solvay’s wide and diversied

product portfolio offers innovations

that provide solutions to these global

challenges and reect the powerful

business trends driving growth in our

end markets.

Global

business trends

driving

our markets

A period of transition for our industry

In 2021, our industry, like others, was broadly impacted by

inﬂation, labor shortages and transport bottlenecks, which

demonstrated the importance of having resilient supply

chains based on circular economy principles. At the same

time, the challenge our industry faces – to serve the needs

of society while reducing the impact on our planet – has

never been greater.

Solvay is up to that challenge. We are relying on our

G.R.O.W. strategy, which is aligned with global business

trends, and on our Solvay One Planet sustainability

roadmap to drive circularity across our business, helping

us to remain resilient and grow.

In 2021, we witnessed an acceleration in some key business

trends for which our portfolio solutions can help our

customers to become more sustainable. They include:

f An increasing customer interest in eco-friendly based

chemical solutions and investment by chemical

companies in the circular economy.

f The opportunity for a green recovery, reflecting the

strong focus in the European recovery plan on zero-

emission mobility and the hydrogen economy, and

Chinese legislation to stimulate electric vehicles and

cleaner mobility.

f The acceleration of the digital transformation,

adjustments in work patterns and an increased role

for Robotic Process Automation (RPA) and artificial

intelligence (AI) in numerous sectors, including the

chemical industry.

Our businesses are aligned with six

global business trends

SOLVAY RAPPORT ANNUEL 2021

BUSINESS ENVIRONMENT

SOLVAY 2021 ANNUAL INTEGRATED REPORT

BUSINESS ENVIRONMENT

chieving climate neutrality has become

an even greater priority. Several

countries have introduced green

stimulus packages to revive their

economies, many of which focus on the automotive

industry’s transition to electric and hybrid vehicles.

This has helped spur further demand for batteries,

complemented by a strong push for a green

hydrogen (H

) economy and underpinned by a

buoyant consumer electronics market. Chemistry

is the key to creating the circular batteries of

the future, and Solvay is at the heart of the most

innovative circular economy solutions.

Challenges for customers

f Security of supply: The availability of raw

materials such as lithium and rare earths as the

need for electric vehicle (EV) battery materials

grows dramatically.

f Infrastructure: The need for increased electrical

grid capacity and for vehicles to be able to inject

into and receive power from the system.

f Recyclability: Conventional recycling processes

come with high costs and a high CO

footprint,

while critical metals are not always recovered

from EV batteries at their maximum value and

lower-grade metal mixes are not always suitable

for production of new batteries.

f Innovation for the next generation of batteries:

The need for cost-effective solutions for creating

fast-charging and safe batteries with increased

drive range.

Opportunities for Solvay

Our highly unique, twofold contribution

totheEV battery value chain:

f We are present in the EV and hybrid battery value

chain, providing high performance materials

and technologies for lithium-ion batteries

and developing key materials for solid-state

batteries.

f We are the only company with a chemical

refining process that optimizes the extraction

and purification of critical metals, such as cobalt,

nickel, and lithium, and transforms them into

high-purity raw materials for new batteries.

We are developing green hydrogen

solutions, which offer an alternative option

forelectrification. These include:

f Our ion-conducting polymer membrane

technology, Aquivion®, which is a key enabler

for hydrogen conversion, electricity storage, and

process reaction in fuel cells, and is crucial for

increasing their performance and durability.

f An electrolyte for Solid Oxide fuel cells, used in

stationary power generation.

f Electrolyzers for the production of electricity.

ELECTRIFI-

CATION

>20%

Compound Annual Growth

Rate(CAGR) in batteries

between 2018 and2030

~50%

Amount of electric or hybrid

vehicles in global production

by 2030¹

Sources:

1. Roland Berger

2. World Material Forum, Global Battery

Alliance.

€25bn

Total addressable market

SOLVAY 2021 ANNUAL INTEGRATED REPORT

BUSINESS ENVIRONMENT

he global drive to reduce CO

emissions

and use natural resources efficiently

makes lightweighting critical. Reducing

the weight of a vehicle by 10% can result

in 6-8% better fuel economy. Alternatives to heavier,

conventional materials include composites with

enhanced durability and lower maintenance costs,

or specialty adhesives that join materials that have

different chemical compositions. A wide variety of

customized and modular products also exist, made

possible by novel machining capabilities such as

additive manufacturing, while the rise of electric

vehicles presents new opportunities for the use of

adapted materials.

Challenges for customers

In addition to being lightweight, materials also need

to:

f be sustainable and recyclable;

f perform well in crash simulations and

demonstrate mechanical resistance;

f be competitively priced;

f have a faster production cycle.

Opportunities for Solvay

Many Original Equipment Manufacturers (OEMs)

are looking for solutions to help them adapt to the

electric vehicle market and respond to demand

for lightweight parts in a variety of other markets.

Solvay’s innovations put us in a strong position to

provide them with the lightweighting solutions they

need. They include:

f Our high-performance polymers, which are used

to improve automotive and aerospace engine

efficiency and downsizing.

f Our world-leading solutions for the aerospace

industry, including thermoset composites that

offer unique benefits in aerodynamics, design,

part integration and corrosion resistance.

f Our thermoplastic composites give us a unique

position in the market. They combine our broad

specialty polymers portfolio with our in-depth

expertise in composite material technologies,

providing solutions for the aerospace and

automotive industries, as well as in markets such

as energy transition and Advanced Air Mobility.

f Our silica for sustainable tires, included in

the new TECHSYN platform created with

Bridgestone and Arlanxeo, which produces

tires with unrivaled strength and environmental

performance.

LIGHT-

WEIGHTING

>€10bn

Total addressable market

+30%

CAGR in composites in the automotive

industry in next 10 years

Sources:

1. Roland Berger

SOLVAY RAPPORT ANNUEL 2021

BUSINESS ENVIRONMENT

SOLVAY 2021 ANNUAL INTEGRATED REPORT

BUSINESS ENVIRONMENT

4342

ir, soil and water pollution, the growing

pressure on biodiversity and the ever-

increasing importance of reducing

emissions are driving the urgent

search for new resource-efficient solutions. This has

inspired increased industrial innovation, which has

enabled more efficient use of resources through

modular design and manufacturing methods that

incorporate the principles of recycling and the

circular economy.

Challenges for customers

f Pressure to do more with less

f The need to work toward creating a circular

economy.

This includes lightweighting to ensure energy

savings and reducing dependence on raw materials.

Opportunities for Solvay

Solvay offers leading technologies to many of the

markets where resource efficiency is a key driver.

f We ensure our customers are able to optimize

their mining operations through facilitating

digitization in the industry. Our widely used Mining

Chemicals Handbook (MCH) is now available

through an easily-accessible, interactive and

customer-centric digital platform. And our unique

mining methodology and broad range of solvent

extractants makes it easier for customers to recover

valuable minerals, and increase and purify metals.

f Our soda ash is used to develop eco-efficient glass

for triple-glazed windows.

f Our formulations for eco-friendly production

processes are used in water and soil management.

f Our polymers are used to manufacture food

packaging that can be safely reused and recycled,

and are used in filter bags and membranes to treat

gases emitted by multiple industries.

RESOURCE

EFFICIENCY

Sources:

1-2. World Material Forum,

Global Battery Alliance

3. Accenture 2019

4. Solvay internal research

x6

Increase of lithium

supply by 2030

50%

Consumers

readytopay more

for aproduct

designed to be reused

orrecycled

>€50bn

Total addressable

market

~4Mt

Increase in copper

per year

+4%

Growth in water

treatment over the

next 5years

ealthcare and wellness are a priority

for consumers and companies. Market

drivers include a growing global

population, advances in treatments

and healthcare technologies, increased sterilization

capabilities and wider healthcare coverage in

developing markets. The Covid-19 pandemic has

also put the importance of health and hygiene in

the spotlight.

Challenges for customers

f Patients are increasingly well informed about and

involved in their healthcare.

f There is a growing need for more biocompatible

materials and high-performance materials that

can withstand the aggressive disinfectants and

chemicals used to prevent hospital-acquired

infections.

f There is a need for high-performing cleaning

disinfectants that not only kill microbes upon

application, but also provide all-day protection,

without negatively impacting the cleaning

experience.

Opportunities for Solvay

Solvay is the market leader for high-performance

polymer technologies. Our products can be used

in a range of applications:

f Our biomaterials are suitable for prolonged

or permanent exposure to bodily fluids and

tissues, enhancing the functional performance

of implantable devices.

f Our medical-grade thermoplastics are used in

implantable and other medical devices designed

for use in limited exposure applications, such

as surgical instruments, sterilization cases and

single-use instruments.

f Our revolutionary, high-performance

and biocompatible polymers are used for

hemodialysis membranes.

f Our innovative Actizone™ technology provides

reliable, long-lasting disinfection along with

other desirable cleaning properties.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

BUSINESS ENVIRONMENT

EXPANDING

HEALTHCARE

>6%

Growth of medical plastics

in short-term

+7%

>€10bn

CAGR in medical implants

in short-term

Total addressable market

Sources:

1 . Medical Implants Market: Global Industry Trends, Share,

Size and Forecast, Report by 2023, Kenneth Research,

August 1, 2019.

2 . BCC Research – 2018 report

SOLVAY RAPPORT ANNUEL 2021

BUSINESS ENVIRONMENT

SOLVAY 2021 ANNUAL INTEGRATED REPORT

BUSINESS ENVIRONMENT

IoT AND

DIGITALIZATION

igital technologies are generating

disruptive new business models.

The growing demand for hyper-

connectivity, the rapid development

of 5G and the exponential growth of data are key

market drivers. This is resulting in miniaturization,

the development of the Internet of Things (IoT) and

a need for components that consume less energy.

New opportunities are created by5G, which relies

on new high-performance polymers with specific

magnetic and electrical requirements.

Challenges for customers

As technology and 5Gnetworks continue their rapid

expansion, there is a need for:

f semiconductor minimization;

f faster connectivity speeds;

f higher frequencies and low-loss signals;

f coatings for sensing and monitoring systems.

Opportunities for Solvay

f Our advanced materials for applications meet

the growing demand for hyper-connectivity,

including miniaturization technologies.

f Our semiconductor industry consumables offer

solutions based on high-purity chemicals and

can be used in high temperatures and with

chemical-resistant materials.

f Our high-performance polymers are used in

new-generation OLED and ﬂexible displays.

>€50bn

Addressable market

+9%

CAGR in semiconductors by

2023

+25%

CAGR in smartphone

shipment by 2025

>12%

CAGR in IoT devices from

2020 to 2030

Sources:

1. OMDIA, October 2021

2. VLSI Forecast November 2021

SOLVAY 2021 ANNUAL INTEGRATED REPORT

BUSINESS ENVIRONMENT

onsumer behaviors are shifting toward

a concern for wellness. This includes

a desire for a better quality of life, a

healthier work-life balance, reduced

stress and higher quality food. These new priorities

drive consumer behavior, with many people now

demonstrating a preference for organic and natural

products. This trend will only strengthen as consumers

become more health-conscious and aware of the

impact products may have on the environment.

Challenges for customers

f Increased pressure on businesses to produce

more eco-friendly products.

f Higher costs as compared to using fossil-based

technologies.

Opportunities for Solvay

We are a market leader in some bio-based ingredients:

f We are a top producer of natural vanillin, bio-

sourced from rice bran.

f We are the world leader in the chemical

modification of guar, which is used in the agro and

nutrition and home and personal care markets.

f We produce bio-sourced solvents, such as

Augeo®, based on glycerin and developed for

cleaning products and fragrances.

Our waterborne coatings solutions address the

challenges of adhesion to difficult substrates and

overall durability while complying with ever-stricter

regulations.

Our polyphthalamide (PPA), which is used for

demanding electrical and electronic applications

in e-mobility, is made from non-food competing

sources, reducing environmental impact without

compromising on material performance.

FRIENDLY

ECO-

BASED SOLUTIONS

+ 6%

+ 3%

>€10bn >10%

CAGR in waterborne

coatings by 2025

CAGR in organic

shampoos through

2025

Total addressable

market

CAGR in natural

vanillin by 2024

Sources:

1. Solvay internal research

SOLVAY RAPPORT ANNUEL 2021

BUSINESS ENVIRONMENT

SOLVAY 2021 ANNUAL INTEGRATED REPORT

BUSINESS ENVIRONMENT

Increasingly stringent regulations,

attractive incentives, massive

investment in capacity and

infrastructure, and increased demand

for electric vehicle batteries have all

initiated a shift in the market. Original

Equipment Manufacturers are now

looking for more sustainable products

and solutions that will drastically

reduce environmental impact during

the current transition period, while

also helping to prepare for the future.

With our extensive and proprietary

range of high-performance polymers,

our composite materials technologies

and a forward-looking innovation

roadmap, Solvay is well-placed to

support them in this.

Story.

Enabling

sustainable

mobility

~€400bn

invested by OEMs in electrication over the

next ten years

3 QUESTIONS FOR MIKE FINELLI,

President of Solvay Growth Initiatives

HOW IS SOLVAY SUPPORTING OEMS

IN DEVELOPING CLEAN MOBILITY SOLUTIONS?

M.F.— For more than ten years, we have enabled OEMs

in their transition to electrification and lightweighting,

providing some of the most innovative solutions for clean

mobility. Our contribution to the electric and hybrid vehicle

value chain is unique because of our unmatched portfolio

of materials technologies and our long-term perspective:

we provide solutions that make vehicles lighter and more

efficient; we produce high-performance materials for lithium-

ion batteries and the technologies to recycle them; and we

are contributing to building the green hydrogen economy,

which is essential to reaching the net-zero emission target.

HOW IS SOLVAY CREATING VALUE FOR ITS

CUSTOMERS?

M.F.— We created three platforms focused on growth

businesses that are aligned with our G.R.O.W. strategy and

our sustainability roadmap. They drive innovation in three

different fields: battery materials, thermoplastic composites

and green hydrogen. All of these are key enablers in

developing the sustainable mobility solutions of the future.

These platforms offer our customers a single entry point

into our Group portfolio and foster cross-innovation within

the Group and in our state-of-the-art application centers.

For example, we are co-developing battery projects with

customers, tailored to meet their needs, and as the green

hydrogen economy begins to take off, we are partnering with

customers in the electrolyzer and fuel cell space to make it

happen.

WHAT ADDED VALUE DOES SOLVAY BRING

TO THE BATTERY INDUSTRY IN PARTICULAR?

M.F.— Our solutions help solve one of the biggest problems

in the EV industry: range anxiety. We’re building a portfolio

of battery materials that follows the different generations

of batteries as they develop, which makes us really unique

and attractive for our customers because we can align with

their roadmaps. We’re also enabling battery circularity by

using our unique expertise in extracting and recycling valued

metals from batteries. As a market leader, we can create

partnerships that lead to further developments, such as

processes to make cheaper, safer and more energy-dense

batteries.

» Innovation/ Growth platform

page 21

SOLVAY 2021 ANNUAL INTEGRATED REPORT

BUSINESS ENVIRONMENT

“As a technology leader in battery materials,

Solvay plays an active role in ESG management

and the development of clean mobility. For LG

Energy Solution, Solvay is a key strategic partner

with whom we can work to grow the battery

business, and sustainable business in general.

In the future, we look forward to receiving

competitive new products through Solvay’s

innovative technology development.ˮ

Lee, Jung-ah

Professional, Cell Procurement 3 Team, LG Energy Solution

Integrating batteries into the circular

economy

Our expertise goes beyond the battery cell itself. With the number

of electric vehicles expected to increase to nearly 120million

by2030, we need to find a way of recycling the whole battery

and integrating EV batteries into the circular economy. Moving

to a circular economy solution for batteries will ensure access to

critical raw materials and decrease recycling costs. It will also lower

the CO

footprint of the battery-making process, as the carbon

footprint associated with battery metal recycling is far lower than

that of primary metal extraction or mining. Solvay’s partnership with

Veolia and Renault puts us in a great position to provide solutions

in this area.

A new step in creating a circular battery system

with Veolia and Groupe Renault

In 2020, we partnered with Veolia and Renault to

optimize the reuse of critical metals in spent EV

batteries. Solvay’s contribution to this partnership is

our unique technology that allows for the extraction

and purification of up to 95% of critical metals in

batteries, such as lithium, cobalt, nickel and copper,

that can be transformed into high-purity raw materials

for use in new batteries. In 2021, we reached the next

step in our alliance with Veolia: the demonstration

plant phase. This is the longest and most critical

phase of the project. It involves validating and

optimizing the extraction and purification process for

recycled battery metals by running a scaled-down

production unit.

Leading the way in developing

thebatteries of the future

The main challenges in the development of electric car batteries

are energy density (drive range), fast charging, safety and cost.

Solvay either already provides solutions for these challenges, or is

developing solutions that will address them in the future.

Our high-performance materials, which include salts and additives

used in the electrolyte and specialty polymers used in the binders

and separators, make lithium-ion batteries safer and more energy-

efficient. Our binders are the most advanced in the world, enabling

us to improve drive range by putting more active ingredients in

the battery. And our polymers and composite materials can also

increase energy density and drive range, while making the battery

pack safer, lighter and more resistant.

In addition to this, our position as a leader in battery technology

makes us a key player in the development of the materials required

for the solid-state batteries of the future. With their ability to

further improve safety, increase performance and lower total

cost of ownership, solid-state batteries are expected to replace

lithium-ion batteries in the coming years and Solvay is well-placed

to support our customers in this transition.

BUSINESS ENVIRONMENT

SOLVAY 2021 ANNUAL INTEGRATED REPORT

BUSINESS ENVIRONMENT

Toward a future of green hydrogen

mobility solutions

To power clean mobility and reach carbon neutrality by 2050 we

will need more than just batteries. Over the next 10-15years,

the green hydrogen industry is expected to grow exponentially,

providing competitive low-carbon solutions to power heavy

industry, trucks and trains.

Our chemistry and components are present in the electrolyzers

that help create green hydrogen and in the fuel cell systems

that generate electricity, playing a key role in improving their

efficiency and durability. In addition, we provide materials for

hydrogen storage tanks and for the exchange membranes used

to turn hydrogen into electricity.

Providing lightweight materials

thatimprove EV performance

Solvay’s advanced materials also have an essential role to play in reducing

emissions, providing a lightweight alternative to metal that doesn’t

compromise on safety or performance. We are the only company in the

world able to combine the broadest portfolio of specialty polymers on the

market with strong competencies in composite technologies.

Our thermoplastic composite (TPC) solutions are 30-50% lighter than

metals, but incredibly strong. Not only can they be used today in

structural components and adhesives for vehicles, but they also have

future applications, including in fourth generation EV battery packs,

which are currently under development, and in fuel cells in hydrogen

tanks.

OUR PORTFOLIO ADDRESSES THE KEY CHALLENGES

OF THE BATTERY INDUSTRY

Cathode

precursors

KEY CHALLENGES

Energy density

Safety

Cost

Sustainability

Lithium

Cobalt

Nickel

MODULES AND

PACKS

Polymers and

Composites

BATTERY CELLS

Advanced

materials

RECYCLING

Chemicals for metal

recovery

Addibond

An innovative, chromium-free

additive for safer anti-corrosion

surface treatment, with best-in-

class adhesive performance and

durability.

f 4g of Addibond

saves

300kgCO

emissions per car

annually

f 58% bath temperature reduction

leading to water savings

Amni

Virus-Bac OFF

A new polyamide fiber

that “deactivates” 99%

of viruses and bacteria

on a textile surface,

using a permanent anti-

bacterial additive.

f Disables 99%

of viruses and bacteria

within 2 hours

Augeo® SL191

Bio-based solvents made from

glycerin – a renewable source

– for use as a safer alternative

to petroleum-based solvents in

paints and coatings.

f 49% CO

savings vs.

petroleum-based solvents

f 50% bio-based materials

Alve-One® Foaming Solutions

Innovative chemical blowing agents,

madefrom 100% safe ingredients that

reduce fogging and eliminate odors in

interior car parts while decreasing their

carbon footprint.

f 10x less CO

emissions in product life

cycle vs. ADCA alternatives

f Safer for human health and compliant

with stringent regulations

Amodel

Bios PPA

High-performance, bio-based polymer for use

in e-mobility, made with renewable electricity

and from a non-food competing crop.

f 100kg CO

emissions saved

per 100kg Amodel

Bios PPA manufactured

Ketaspire

PEEK

An advanced material that can

replace metal in insulation systems,

providing for more efficient, smaller

and lighter-weight eMotors.

f Eliminates VOC

emissions

associated with use of solvent-

based alternatives

10 solutions for more sustainable mobility

Solvalite™

Composites that are

up to 40% lighter than

aluminium, which can

be used to create more

energy-efficient vehicles

and enable much faster

production.

f Can save up to

2,000kg of CO

over

a vehicle’s lifetime vs.

mainstream alternative

Silica HDS Premium SW

A technology for tire

treads that reduces

rolling resistance by 25%,

helping to increase the

longevity of tires and

lower fuel consumption

by ~7%.

f 330kt of CO

saved

each year

f 2.3kt natural rubber

savings yearly

volatile organic compounds

corresponding to 7% of energy savings

Our components help to increase the sustainability of cars by reducing their climate impact

and raw material consumption.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

BUSINESS ENVIRONMENT

Cyanex

936P

A unique,

environmentally-friendly

extractant that reduces

lithium production time

for batteries and facilitates

battery recycling.

f >90% lithium recovery

rate

f requires 0.17km

land vs. 170km

for

traditional evaporation

process

Solef

PVDF

A high-performance

material for Li-ion

battery components

enabling faster

charging and

increased safety,

drive range and heat

resistance.

f Can save up to

1.67mt CO

emissions over a

vehicle’s useful life

BUSINESS ENVIRONMENTBUSINESS ENVIRONMENT

Our sustainable

solutions

serving

fast-growing

markets

Solvay’s businesses are closely aligned with the six global

trends driving growth in our end markets. Through our

G.R.O.W. strategy, we have refocused our resources on key

growth markets encompassed by these trends, including

transportation, home and personal care, healthcare and

electronics. Our broad portfolio of technologies and products,

our expertise and our close relationships with customers

have allowed us to build robust leadership positions in seven

fast-growing markets in particular, where we hold a top two

position and our innovative and competitive solutions bring

value.

More than 50% of the Group’s portfolio is positioned as

Sustainable Solutions, with sales generated in markets

relating to strong sustainability trends llike electrification

and lightweighting for clean mobility, digitalization and

connectivity, resource efficiency and eco-friendly based

solutions. In 2021, 5% of Groups sales were generated by

products based on circular raw materials or energy and this

is expected to more than double by 2030. This enables us

to meet growing customer demand for healthier and more

sustainable solutions.

In 2021, the Solar Impulse Foundation’s World Alliance

for Efficient Solutions awarded its Efficient Solutions label

to another Solvay product, bringing the number of Solvay

solutions recognized for their role in protecting people and

the environment in a profitable way to 13.

% of Group sales

24%

Automotive and

Aerospace

12%

Resources

and

Environment

20%

Industrial

Applications

13%

Agro, Feed and Food

16%

Consumer Goods,

Home and

Personal Care,

Healthcare

Electronics

Building

Consumers

Growing consumer demand for natural and bio-based solutions,

enhanced performance and convenience, and personalized

and premium products is driving the consumer goods market.

Solvay’s innovative, sustainable and competitive polymers and

surfactants are used in segments ranging from smart textiles to

personal and home care, while our components give household

products their expected properties, whether that’s surface

tension, foaming or viscosity.

Home care

Sustainability, high-performance cleaning and competitiveness

are important drivers for home care markets. For fragrance

markets, the priority is finding bio-renewable, sustainable and

safer alternatives to petrochemical solvents that also provide

good solubilization features, stability, adequate volatility and

improve how long a fragrance lasts. Solvay’s home care solutions

cater to these needs.

Actizone™: long-lasting disinfection

technology

Solvay’s Actizone™ is a unique disinfectant

solution

that instantly destroys over 99.9% of

microorganisms

, including coronaviruses, for

up to 24 hours. This long-lasting protection

differentiates it from other disinfectants currently

on the market, helping to dramatically reduce

chemical use. The United States Environmental

Protection Agency has approved Actizone™ F5

and, in October 2021, Actizone™ was awarded

first place in the innovation award category by

the SEPAWA® CONGRESS, the most important

European congress for this industry.

SOLVAY RAPPORT ANNUEL 2021

SOLVAY 2021 ANNUAL INTEGRATED REPORT

On November 12, 2021, the United States Environmental Protection Agency (EPA) approved

the registration of Actizone™ F5. Solvay is now working to obtain U.S. state registrations for

Actizone™ F5 required to market in specic states. Claims allowed by the EPA registration

include that Actizone™ F5: 1. provides initial disinfection on hard non-porous surfaces after

5 minutes of contact time against a wide range of viruses and bacteria, including SARS-CoV-2;

and 2. eliminates bacteria when applied to hard, non-porous surfaces for up to 24 hours. Solvay

is currently conducting studies to obtain EPA approval in the future for claims that certain

Actizone™ products are effective at eliminating viruses, including SARS-CoV-2, for up to

24-hours after application.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

BUSINESS ENVIRONMENT

Augeo®: innovative bio-based solvents

Our Augeo® line of bio-based solvents are used in air

and surface care, offering a safer, more sustainable and

high-performing alternative to petrochemical solvents.

Theselow-odor eco-solvents are developed from glycerin,

which is a renewable source, and are composed of versatile

and highly soluble molecules. They comply with the strictest

global legislation, including EPA-Inert and Safer Choice,

have a low carbon footprint and are not toxic to humans or

the environment. Augeo® is also a Vegan Society registered

product, catering to increasing consumer demand for

innovative vegan products.

Personal care

Facing increasingly stringent global regulations and changing

consumer preferences, formulators are under pressure to develop

high-performing products with advanced aesthetics, fewer

synthetic chemicals and more eco-friendly and natural materials.

Solvay is a leader in this area with a personal care portfolio focused

on “clean beauty” and plant-based products. Over 80% of our hair

and skin care portfolio is derived from natural origin, according to

ISO 16128:1. This includes our Jaguar® line, a range of bio-based

ingredients – 98% of which are plant-based and made from guar

gum partially sourced through our Sustainable Guar Initiative (SGI)

program – that provide conditioning and texturizing features for

hair and skin care. In 2021, we introduced two new biodegradable

Jaguar® grades.

Dermalcare® LIA MB: a sustainable alternative to

non-volatile silicones for hair care

Dermalcare® LIA MB is a readily biodegradable,

100%bio-sourced and plant-based hair

moisturizing emollient that can be used as a

sustainable alternative to non-volatile silicones

in hair care applications, including shampoo,

conditioner and treatments, and in body and

skin care applications. COSMOS1 certified , it

enables hair care formulators to design silicone-

free solutions that protect the integrity of the hair

and scalp and guarantee top quality results, while

respecting the planet.

Mackadet® OPR 2: a new generation,

naturally-derived opacifier

Mackadet® OPR 2 is a readily biodegradable solution

that acts as a pearling and opacifying agent, giving

cleansing products their creamy white appearance. It

is made from almost 100% bio-sourced ingredients,

providing a sustainable alternative to synthetic ingredients,

such as acrylate-based opacifiers. Sulfate, paraben and

formaldehyde-free, and with no need for heat in the

opacifying process, Mackadet® OPR 2 also helps to reduce

carbon emissions in the value chain.

Healthcare

A growing population, advances in treatments and health

technologies, increasing sterilization capabilities and wider

healthcare coverage in developing markets all serve as

market drivers in healthcare. Solvay’s extensive range of high-

performance polymers are used in orthopedics, medical devices

and equipment, surgical instruments and implantable devices.

This includes our Radel® PPSU, a remarkably strong polymer that

can be steam sterilized over more than a thousand cycles without

any significant loss of properties. It replaces metals in various

applications, including sterilization cases and trays, and surgical

instrument handles. We are also a world leader in high-barrier

polymers, used for pharmaceutical packaging.

Veradel® PESU and Udel® PSU: solutions

forhemodialysis

The need for hemodialysis is rising globally, due to

aging populations, increasing kidney failure factors,

such as obesity, and better access to healthcare,

particularly in Asia, where the number of untreated

patients is estimated to be high. Solvay is a world

leader in thermoplastics used to manufacture dialysis

membranes. Our high-purity, high-performance

polymers for hemodialysis, Udel® polysulfone

(PSU) and Veradel® polyethersulfone (PESU), were

developed in collaboration with hemodialysis

equipment manufacturers and have excellent

biocompatibility, meaning that patients’ blood can

come into contact with them and return to their

arteries without any risk.

SOLVAY RAPPORT ANNUEL 2021

BUSINESS ENVIRONMENT

SOLVAY 2021 ANNUAL INTEGRATED REPORT

BUSINESS ENVIRONMENT

Interox® H2O2: high-purity hydrogen

peroxidefor sterilization

Patient safety and well-being requires the decontamination

and sterilization of medical devices, isolators and rooms.

OurInterox® range of high-purity hydrogen peroxide

) can be used in vaporized form by the pharmaceutical

aseptic filling industry or as a disinfectant for medical devices.

Available in a vast range of standard and specialty grades, for

use across a number of different industries, Interox® offers the

highest possible quality for sterilization on the market.

Food

Strict regulations are in place to ensure global food security for

a growing global population. At the same time, consumers are

demanding healthier, more natural food, and bio-based solutions,

while the use of renewable raw materials from dedicated crops

and scraps is increasing. Solvay provides the food and beverage

industry with ﬂavors, aromas and ingredients for healthier and

more convenient food, as well as the materials needed for safe,

reliable and convenient food packaging.

Rhovanil® Natural CW: the market reference

fornatural vanillin solutions

Vanillin is the most popular food ﬂavoring in the world.

However, with strict regulations in place to ensure global

food security, sourcing this ﬂavor from the vanilla bean

is difficult and has become very expensive. Solvay’s

Rhovanil® Natural CW is a 100% vegetable-based, non-

GMO alternative to vanillin sourced from vanilla beans.

Obtained through the bioconversion of ferulic acid, found

in rice bran oil, it meets consumer demand for more natural

solutions and better quality food. It also serves as a global

reference, being the only natural vanillin to comply with the

strictest EU and US natural regulations.

Agro

An increasing number of agricultural areas worldwide are now

affected by extreme weather. At the same time, there is pressure

to ensure greater yields and better resource management to feed

a growing global population. The agricultural industry also faces

increasingly strict regulations, as well as changing consumer

preferences for bio-based solutions and better quality food. This

is all driving a shift in agricultural practices, with increased use of

renewable raw materials and a growing interest in biostimulant

formulation solutions for biological pest control. Solvay’s products

and solutions enable all segments of the agricultural industry to

improve yield with more sustainable agricultural practices. We also

offer pioneering automation and digital technology, as well as on-

target drift control adjuvants for agricultural spray drones.

Boosting seeds rather than treating plants:

apathtomore sustainable agriculture

Incorporating biostimulants in seed coatings can help them to

germinate faster and stronger. This reduces the need for chemical

protection against diseases and pests during the plant’s growth and

produces healthier crops, increasing efficiency and sustainability. Our

acquisition of Bayer’s seed coating product line in 2021 will allow us

to develop 2-in-1 products combining the acquired coatings with our

biostimulants. To make this an even more sustainable option, we are

also working on transitioning the range to biodegradable coatings.

AgRHO® S-Boost™: our bio-based

stimulant to encourage seed growth

Our AgRHO®S-Boost™ biostimulant is made from guar beans,

a 100% natural and renewable raw material. It is unique in being

able to shape soil properties around the seed to favor water

and nutrient uptake, enhance germination and strengthen

root development, helping crops to cope with increasingly

dry conditions and increasing yield by 3% compared to using

conventional amounts of fertilizer. This also reduces fertilizer use

by 13% and helps to optimize water usage.

Trends

SOLVAY 2021 ANNUAL INTEGRATED REPORT

BUSINESS ENVIRONMENT

Our Galden® PFPE ﬂuids, for example, act as heat-transfer liquids

in high-temperature conditions, ensuring the long-term reliability

and efficiency of advanced semiconductor applications. We also

provide high-purity chemical solutions needed for advanced

cleaning, which is becoming increasingly important as electronic

devices become smaller. Examples include our Interox® Pico Plus

hydrogen peroxide, which is the market reference in this area.

Solvaclean® : an environmentally-friendly

cleaning gas forsemiconductor tools

Semiconductor chip manufacturers use a variety of gases

to pattern silicon wafers. After a number of wafers are

processed, the process chambers must be cleaned. Made

from environmentally-friendly ﬂuorinated gas mixtures

that do not remain in the atmosphere, Solvaclean® can

be used by the semiconductor 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 for the cleaning process, it is also more

efficient, helping to save energy and water. Solvaclean®

was awarded the Solar Impulse Foundation’s Efficient

Solution Label in January 2021.

Structural components for smart devices

Smart sensing is driving market growth in smart devices and

components. This includes smartphones with advanced

functionalities, such as infinity display, artificial intelligence or

5G. Solvay’s Kalix® high-performance polyamide (HPPA) can

be used instead of metal in products where strength, rigidity,

aesthetics and unparalleled design ﬂexibility are important, such

as mobile phones, tablets and laptops. We have also developed

a sustainable, bio-sourced version of this product that is highly

resistant to impact. Kalix® 2000 is made from non-food competing

and GMO-free castor oil, and produced with 100% renewable

electricity.

Designing ingredients and formulation solutions

forbiological pest control

Building on more than 40 years as the industry leader in the

development of co-formulants for plant protection formulations,

we are now using our expertise to develop innovative ingredients

and formulations for biological pest control. Biological crop

protection products prevent or reduce damage from pests, weeds

and pathogens through the use of living microorganisms, natural

substances or semiochemicals and are emerging as one of the

most promising tools for sustainable agriculture. Our biocontrol

formulation solutions are Organic Materials Review Institute (OMRI)

listed, meaning they can be used in certified organic production

and processing in the US.

Electronics

Consumers and industries want multifunctional electronic products

that are compact, stylish, energy efficient and safe. Growing

demand for hyperconnectivity, the development of 5G and the

exponential growth of data are also driving the market, resulting

in miniaturization, the development of the Internet of Things and

a need for components that consume less energy. To facilitate

these developments, there is an increasing need for materials that

operate effectively and safely at high temperatures.

Solutions for semiconductors

Solvay’s specialty polymers support semiconductor processes,

providing excellent chemical stability and high heat

tolerance, as well as the ultra purity required by customers.

Trends

BUSINESS ENVIRONMENT

VALUE CREATION

SUSTAINABLE

56 Sustainable value

creation model

60 Value chain

62 Progressing with

stakeholders

64 Ratings

SOLVAY 2021 ANNUAL INTEGRATED REPORT

SUSTAINABLE VALUE CREATION

At Solvay we are committed to optimizing the

use of our resources to reduce our impact on

the planet. Our G.R.O.W. business strategy and

our Solvay One Planet sustainability program are

aligned with the powerful trends driving growth in

our end markets. And our Solvay ONE operating

model helps us work more efficiently and

effectively together to achieve our Purpose and

create the greatest shared value for society, our

employees, our customers and our shareholders.

Human

Financial

Natural

+21,000

Employees

€7bn

Equity attributable

to Solvay share

4,920kt

Raw materials

315Mm

Freshwater withdrawal

23%

Women

€4bn

Underlying

net debt

105pj

Energy consumption

Representing more than 100 nationalities, 47%

of our employees are located in Europe, 24% in

North America, 10% in Latin America and 19%

in Asia and the Rest of the World. Another 9%

work in Research & Innovation.

We have selectively invested €736 million

of Capex from continuing operations in our

growth businesses and €298 million to develop

innovative sustainable solutions.

Our net energy costs represented about

€789 million. The Group’s overall raw materials

expenses amounted to circa €3.2 billion.

Sustainable value

creation model

1. Excluding hydrid bonds;

2. Excluding the contribution from corporate and business services;

3. Recommended to the Shareholders meeting on May 10, 2022;

4. (Scope 1 & 2) at constant perimeter;

5. In number of animal or plant species potentially impacted in one year. ReCiPe method

for biodiversity impact assessment;

6. % of Group sales based on circular raw materials or energy; circular economy indicators

are still in the development phase, in the frame of the Circulytics approach, co-

developed with the Ellen MacArthur Foundation;

7. Number of work-related injuries and illnesses (employees and contractors) resulting

from an accident with severity above rst aid, according to US OSHA 29 CFR 1904, per

200,000 work hours;

8. All employees worldwide S14 grade or below.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

SUSTAINABLE VALUE CREATION

RESOURCES WE USE

Economical

Environmental

Social

weeks

Maternity leave time

open to all co-parents

3.5kt

Sulfur oxides

€3.7M

Group donations

0.43

Reportable Injury

and Illness Rate

(RIIR)

Mt CO

eq.

Greenhouse gas

emissions

€2.4bn

Underlying

EBITDA

€843M

FCF to Solvay

shareholders from

continuing operations

€3.85

per share

Recommended 2021

dividend

11.2%

Employee turnover

27pj

Solid fuels

315

Intake of freshwater

-13%

Pressure on

biodiversity

53%

Group net sales with

sustainable solutions

58kt

Industrial waste not

treated in a sustainable

way

Group net sales from

circular economy

€9.8M

Global Performance

Sharing Plan

25%

Women in mid and

senior management

5.9kt

Nitrogen oxides

€287M

Income taxes

448

Core suppliers

Unique high-performance polymers and

composite technologies

Innovative solutions for cleaner mobility

(lightweighting, batteries, CO

and energy

efficiency), Electronics and Healthcare.

34% of Group EBITDA

Our G.R.O.W. strategy is aligned with

global business trends that drive growth in

our end markets.

World leaders in essential chemicals for

daily life

Chemical intermediates used in a broad

range of applications in end markets like

Building, Industry, Healthcare, Personal and

Home Care, Feed and Food.

39% of Group EBITDA

Unique formulation and application

expertise

Customized specialty formulations for surface

chemistry and liquid behavior, maximizing yield

and efficiency and minimizing environmental

impact. Used in diverse markets like Agro,

Food, Electronics, Consumer Goods.

27% of Group EBITDA

New operating model and culture

Customers are at the heart of our new, more

agile organization and performance-driven

culture.

Materials

Chemicals

Solutions

Solvay ONE

SOLVAY 2021 ANNUAL INTEGRATED REPORT

SUSTAINABLE VALUE CREATION

HOW WE CREATE VALUE

WHERE WE CREATE VALUE

VALUE WE CREATE

Air emissions

% of Group sales

24%

Automotive and

Aerospace

12%

Resources

and

Environment

20%

Industrial

Applications

13%

Agro, Feed and Food

16%

Consumer Goods,

Home and

Personal Care,

Healthcare

Electronics

Building

SOLVAY 2021 ANNUAL INTEGRATED REPORT

SUSTAINABLE VALUE CREATION

Operating segments

and Global Business Units

Materials

MATERIALS offers a unique portfolio of high-performance polymers

and composite technologies that are used primarily in sustainable

mobility applications. These solutions enable weight reduction and

enhance performance, while improving CO

and energy efficiency.

Major markets served include next-generation mobility in automotive

and aerospace, healthcare and electronics.

Specialty Polymers

With over 1,500 products, Specialty Polymers offers the widest range of

high-performance polymers in the world. This allows us to create tailor-

made solutions, including pushing the limits of metal replacement

in the electronics, automotive, aircraft and healthcare industries.

Specialty Polymers has unparalleled expertise in three technologies:

aromatic polymers, high-barrier polymers and ﬂuoropolymers.

Composite Materials

Composite Materials is a top-tier supplier to the aerospace engineered

materials market, known for its expertise in design materials and

process engineering. We deliver optimal material solutions that

address the most challenging demands of our customers, who

need new, high-performance materials that reduce weight, improve

aerodynamics and ultimately lower their total part costs.

Chemicals

CHEMICALS hosts chemical intermediate businesses focused on

mature and resilient markets. Solvay is a world leader in soda ash

and peroxides, with the major markets we serve including building

and construction, consumer goods, and food. Our Silica, Coatis

and RusVinyl businesses are also high-quality assets, holding strong

positions in their markets.

Soda Ash and Derivatives

Soda Ash and Derivatives is a world leader in the production of soda

ash and sodium bicarbonate, which we sell primarily to the ﬂat and

container glass industries, but is also used in detergents and the

pharmaceutical, feed and food industries. SA&D production sites are

located both in the US (trona base) and in Europe ("Solvay" process)

to serve all continents..

Peroxides

Solvay is a market leader in hydrogen peroxide, both in market

share and technology. Hydrogen peroxide (H

) is used mainly

by the paper industry to bleach pulp and as an intermediate for the

production of chemicals, such as propylene oxide and caprolactam. Its

properties are also of interest in a number of other applications, such

as electronics, food, mining and the environment. Solvay Peroxides’

advanced production process includes three HPPO

mega plants,

based on Solvay technology and operated with Joint Venture partners.

Silica

Silica focuses on highly dispersible silica, used primarily in fuel-efficient

and performance tires. The primary focus of the business is to develop

innovative solutions for global tire manufacturers.

Coatis

Coatis provides high-performance solvent solutions, specialty

phenols, polyamide derivatives and smart, functional and sustainable

yarns and polymers, predominantly for the Latin American market. We

enjoy an undisputed market leadership position in Brazil for phenol

and derivatives, which are used in the production of synthetic resins

employed in foundries, construction and abrasives.

Solutions

SOLUTIONS offers unique formulation and application expertise

through customized specialty formulations for surface chemistry

and liquid behavior. These maximize the yield and efficiency of

the processes they are used in, while minimizing the eco-impact.

Novecare, Technology Solutions, Aroma Performance, Special Chem

and Oil & Gas focus on specific areas. These include: resources,

improving the extraction yield of metals, minerals and oil; industrial

applications, such as coatings; and consumer goods and healthcare,

including vanillin and guar for home and personal care.

Novecare

Novecare is a worldwide leader in specialty chemicals, offering a

portfolio of customized and sustainable solutions. Our diverse teams

combine Novecare’s core technologies – surfactants, natural and

synthetic polymers, and green solvents – with formulation know-how

and application knowledge to deliver high-performing, differentiated

solutions across the agro, home and personal care, coatings, and

industrial markets. Novecare’s manufacturing and research capabilities

are global in reach, with dedicated teams in each region to meet local

needs and requirements.

Technology Solutions

Technology Solutions is a global leader in specialty mining reagents,

phosphine-based chemistry and solutions for the stabilization

of polymers. Our portfolio includes world-class, leading-edge

technologies and unrivaled technical service and application expertise

that supports our customers in developing tailor-made solutions. This

is particularly true for mining, where Solvay’s products allow customers

to extract metal concentrates from increasingly complex and depleted

ores.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

SUSTAINABLE VALUE CREATION

1. Hydrogen Peroxide to Propylene Oxide

Special Chem

Special Chem produces fluorine and rare-earth formulations for

automotive, electronics, agrochemical and construction applications.

With our industrial know-how, global presence and proximity to

R&I, we position ourselves as a strategic partner for the automotive

sector, as a producer of materials used in emission-control catalysis

and aluminum brazing, and as a producer of cleaning and polishing

materials for semiconductors.

Aroma Performance

Aroma Performance is the world’s largest integrated producer of

vanillin for the ﬂavors and fragrances industries and also produces

synthetic intermediates used in pharmaceuticals, agrochemicals and

electronics.

Oil and Gas

Oil & Gas offers a wide product portfolio in the upstream oilfield

chemicals sector that includes friction reducers, gelling agents,

emulsion breakers, surfactants, inhibitors, cementing additives and

biocides. Outside of the oilfield, the business also produces sodium

hypophosphite for metal plating and other applications, as well as

PROBAN®, a technological process that gives durable ﬂame retardant

properties to cotton-based textiles.

Corporate and Business Services

Corporate and Business Services includes corporate and other

business services such as Group research and innovation, or energy

services, which works to optimize energy consumption and reduce

emissions across the Group.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

SUSTAINABLE VALUE CREATION

Value Chain

As a chemical manufacturer, our core activity is the production of

synthetic or natural ingredients, which we are committed to produce

using processes that have a 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, through processing chemicals or producing

formulations. In some cases, we blend or transform products so

that they offer more innovative features, with greater added value.

Examples include our surfactant and solvent formulations, as well

as copolymer blends or compounds in pellet form, and composite

materials.

Solvay collaborates with brand owners and their suppliers to

develop tailor-made solutions based on our products.

Main inputs Businesses Raw

materials

Production of

ingredients

Processing/

formulation

End markets

Raw materials

- Minerals

- Fossil-based

- Renewable/

recycled

Primary energy

- Fossil (gas, solid,

liquid)

- Renewable/

recycled

Secondary energy

- Electricity

- Heat

- Cooling

MATERIALS

Automotive and

Aerospace

Consumer Goods,

Home and Personal

Care, Healthcare

Resources and

Environment

Agro, Feed and Food

Electronics

Building

Industrial

Applications

Specialty Polymers

Composite Materials

CHEMICALS

Soda Ash and Derivatives

Peroxides

Silica

Coatis

SOLUTIONS

Novecare

Technology Solutions

Special Chem

Aroma Performance

Oil & Gas

Fully involved Partially involved Not involved Core activity of the business

End-to-End value creation

Involvement of businesses in production steps

SOLVAY RAPPORT ANNUEL 2021

SOLVAY 2021 ANNUAL INTEGRATED REPORT

BUSINESS ENVIRONMENTSUSTAINABLE VALUE CREATION

From the extraction of raw materials to production, processing, formulation and assembly, our solutions

go through many different modifications before they become part of our everyday lives.

At Solvay, we focus our expertise on the links in the value chain where we can make the biggest

contribution. Thismeans working closely with suppliers, partners, customers and brand owners to share

knowledge and unlock shared value for all. Our new End-to-End Value Chain initiative takes customer

service a step further, making the most of our internal resources and expertise.

Reinventing our end-to-end value chain

to unlock more value

Despite a challenging supply chain environment in 2021, we

continued our journey in transforming our value chain performance.

This included stepping-up a Logistics Crisis Team to help us to

navigate the logistical disruptions we faced.

Solvay’s objective is to provide the best customer experience

in line with our G.R.O.W. strategy, by finding the right balance

between cost, cash and service, and doing this in a sustainable

way. We approach this transformation by looking to optimize the

outcome of the entire end-to-end value chain, rather than the

outcome of each individual step.

To achieve our goals, we are leveraging the full potential of digital,

breaking silos through cross-functional collaboration, sharing best

practices to aid simplification and standardize our ways of working,

and providing transparency through rigorous performance

management.

For example, on the planning side we work cross-functionally,

involving supply chain, commercial and manufacturing to define

the right lead times and stockholding strategies, so that we are

able to offer the desired service level for our customers. We are

implementing this approach in a plant-by-plant roll out. We also

rely on digital to support our initiatives to improve forecasting,

advanced scheduling and planning maturity. These programs have

already delivered €202

million in value since 2019.

“To face the unprecedented logistical

challenges, we quickly assembled a team

ofcross-functional experts who helped Solvay

navigate the complex supply chain situation

supporting the various people involved

in operations around the world. This team

leveraged our expertise and relationships

to support better delivery to our customers,

helping to resolve well over 1,000complex

cases over a period of sixmonths.”

Scott Hain

Head of Value Chain Transformation

1. versus baseline and pro-forma sales 2019

SOLVAY 2021 ANNUAL INTEGRATED REPORT

SUSTAINABLE VALUE CREATION

Customers

f Engagement of major customers

on common high materiality

aspects

f Direct contacts with GBU teams

(management, R&I, sales, supply

chain)

f Rating questionnaires

(CDP,

EcoVadis)

f Sustainable Portfolio Management

(SPM) profiles

f Net Promoter score

(digital surveys every two years)

f Continued increase in number

of customers assessing Solvay’s

performance via EcoVadis, CDP,

orspecific questionnaires confirms

focus on risks and opportunities in

supply chain

f Increasing number of customers

expressneed for innovative

solutions inline with circular

economy principles

f About 150 customers

representing about 20% of our

sales require Solvay’s EcoVadis

evaluation

f Solvay in the top 1% of

companies assessed by

EcoVadis in the chemical

industry

f EcoVadis 360 screening identied

controversies, nes or penalties

relating to environmental/social

issues in the last ve years

f Reducing Scope 3 greenhouse gas

emissions linked to processing, use

and end of life of sold products

f Product design and lifecycle

management

f Customer welfare

f Hazardous materials

Employees

f Solvay One Dignity to accelerate Diversity,

Equity and Inclusion, with9 objectives and action

plans.

f Global employee share purchase plan

f Solvay Solidarity Fund: €2.4M to support employees

and their families since April 2020

f Extended 16 week maternity leave to all

co-parents worldwide

f Solvay Sales Academy: ~€2M invested over one

year; 11,500 hours of training

f Employee Assistance Program to provide mental

health support and other assistance

f 7,500+ employees moved into a hybrid working

mode

(

administrative sites globally).

f Global Performance Sharing Plan

f 100% employees covered by collective agreement

f Implementation of our plan to better align the

organization with G.R.O.W. strategy

f Involve employees in Solvay One Planet

initiatives, e.g. Stop Ofce Waste project

f Engagement on sustainability principles by

employees from top management to shop oor

f Covid-19 crisis management

f Employee health and safety

f Inclusion and diversity

f Employee engagement and well-being

f Solvay Solidarity Fund to enhance solidarity among

employees

f Pulse surveys every six weeks to improve our

people's well-being

f Communication between CEO and employees

using digital tools (Q&A sessions, virtual visits on

sites)

f Regular dialogue between Group managers and

employees through Performance and Development

annual appraisal

f Labor relations dialogue with employee

representative bodies at four levels: site, country,

Europe and Group

Investors

f Solvay One Dignity

f Announced carbon neutrality plans

f Announced employee share purchase

plan

f Dividend increase (+2.7% vs 2020)

f Capex of €736 million targeting

growth businesses

f Climate action conrmed as priority

topic

f Facing challenging environment in

key markets

f Impact of Covid–19 crisis

f Impact on reputation related to

controversies

f Solid nancial performance and consistent

shareholder reward

f Sustainability and focus on long-term value

creation

f Strong focus on innovation, governance,

ethics and transparency

f Rapid evolution of sustainability reporting

frameworks, particularly the new

International Sustainability Standards

Board in the US and the future European

sustainability standards in the framework

of the Corporate Sustainability Reporting

Directive (CSRD)

f All high materiality aspects

f 60 events with institutional

investors (15 digital roadshows, 6of

which were ESG roadshows, and

39conferences)

f Responding to rating agency

questionnaires, credit rating agencies,

proxy voting agencies

f Participation in diverse shareholder

events using digital tools

f One Solvay ESG webinar

Progressing

with our stakeholders

How we bonded in2021

High materiality aspects

Stakeholders’ expectations

Our responses

Our challenges

SOLVAY 2021 ANNUAL INTEGRATED REPORT

SUSTAINABLE VALUE CREATION

Suppliers

f 2040 suppliers assessed via

EcoVadis TfS Audit Program

f Launched Supplier Engagement

Program: 250+ executives from

130+ companies participated

in Solvay’s rst Supplier Day,

69 collaborative projects collected

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 processing

f More collaboration on goal

setting, strategic thinking and

sustainability

f Supply chain and procurement

f Materials sourcing and efciency

f Supplier Key Account Management

f Supplier commitment to Supplier

Code of Business Integrity

f Corporate Social Responsibility

questionnaire

f Third-party assessments through

EcoVadis and TfS

f Solvay's Supplier Days, a series

of exclusive events to engage

suppliers

Local Communities

f 15,000 employees worldwide on 121 sites

participated in Solvay’s 2021 Citizen Day

on Biodiversity, together with more than

5,700 participants from NGOs and local

communities; 523 actions achieved.

f 30 projects (€3.9 million) for communities,

related to urgent needs (e.g. health care,

ooding), organized through the Solvay

Solidarity Fun since April 2020.

f Take action on biodiversity: monitor and

reduce pressure on biodiversity beyond

climate change; develop local restoration

projects in partnership with associations

and local stakeholders

f Sensitive handling of social media, which

can make a local issue global

f Controversies related to efuents or

emissions

f Contribution to local material aspects

f Sensitivity to local environmental and social

issues

f Air quality

f Water and wastewater

f Waste

f Corporate Citizenship

f Engagement at site level within STAR

factory project and several dimensions of

Solvay One Planet actionable at this level

(biodiversity, Stop Ofce Waste program):

developing and steering relationships with

local stakeholders

f Annual Citizen Day at Group level

Planet

(NGOs & Government)

f Solvay One Planet targets

f Carbon neutrality before 2050

(greenhouse emissions in Scope 1 and 2)

f Our Scope 3 target shall at least meet the

2°C criteria of the SBTi.

f Reporting of corporate metrics in line with

the UN SDGs (WEF initiative)

f Conrmation of SDGs where Solvay can

have most impact across the value chain:

- Climate: 7, 13, 14 & 15

- Resources: 12

- Better Life: 3, 6, 8 & 17

f 10 ambitious goals dened through our

Solvay One Planet sustainablility roadmap

f Announced plans for carbon neutrality by

2050

f Acceleration of actions to reduce

Greenhouse gas emissions and address

climate change

f Conrmation of UN SDGs as reference for

sustainability priorities at planetary scale

f Introduction of metrics to describe

sustainable value creation as per WEF’s

International Business Council (IBC)

work on “Toward Common Metrics and

Consistent Reporting of Sustainable

Value Creation”

f Greenhouse gas

emissions

f Energy

f Biodiversity

f Constructive dialogue with public

authorities on issues of legitimate interest

to Solvay

f Participation in global and regional

trade associations (WBCSD, ICCA,

BusinessEurope, Cec) and scientic

organizations (IUCN, SETAC)

f Partnership with the Ellen MacArthur

Foundation

f Partnership with the Solar Impulse

Foundation

In 2021, the priorities in our Solvay One Planet sustainability roadmap were accelerated once again. We continued to strengthen

our bonds with our stakeholders, which include customers, employees, investors, suppliers, local communities and the planet

(governments and NGOs). We listened to their needs and built on their feedback, raising the bar to address our collective

impact on climate change, natural resources and quality of life. This included working with customers and suppliers to reduce the

environmental footprint of our products and committing to foster diversity, equity and inclusion throughout the Group.

How we bonded in2021

High materiality aspects

Stakeholders’ expectations

Our responses

Our challenges

f Management of

the Legal, Ethics

and Regulatory

framework

f Critical incident

risk management

f Hazardous

materials

SOLVAY 2021 ANNUAL INTEGRATED REPORT

Ratings

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 dimension

differently. This means, 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 comments

from ratings agencies very seriously. This includes addressing

operational eco-efficiency and the need to reduce emissions

faster through our Solvay One Planet commitments, which focus

on reducing emissions and efﬂuents that could impact biodiversity.

Solvay received the following awards

forsustainability reporting in 2021:

f Our integrated report was listed in the top ten

ofthe ninth edition of Reporting Matters, the World

Business Council for Sustainable Development’s

(WBCSD) annual review of its member companies’

sustainability and integrated reports.

f Chemical Week’s Best ESG Reporting Program

Sustainability Award, in recognition of our efforts

tobuild a more sustainable future.

f The Annual Award competition for Best Financial

Communication, a quality review for and by experts

of the international financial community, under

theauspices of the Belgian ABAF/BVFA.

1. Last updates in December 2021.

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-specic 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.

4. FTSE International Limited and Frank Russell Company.

Our main indexes

MSCI

World Index

In 2021, Solvay received a rating of AA (on a scale

of AAA-CCC) in the MSCI ESG Ratings assessment.

EcoVadis supplier sustainability ratings

Solvay is in the top 1% of chemical companies

rated by EcoVadis.

ISS-ESG

Solvay is rated as a Prime Company with a score of

B- by the ISS-ESG, ranking among the leaders in

chemicals.

CDP

Solvay is rated A- by the CDP in the 2021 Climate

Change questionnaire.

Moody’s ESG Solutions

Solvay ranks #6 in the chemical industry, with a

score of 61/100.

SUSTAINALYTICS

Solvay is rated “Medium ESG Risk” by

Sustainalytics.

Ethibel Sustainability Index (ESI)

Solvay has been confirmed as a constituent of

the Ethibel Sustainability Index (ESI) Excellence in

2021.

FTSE 4 Good

Solvay is in the FTSE4Good Index.

Solvay is committed to achieving strong ratings in

both financial and sustainability indexes. Positive

ratings help us to create a long-term relationship

with our stakeholders that is based ontrust. Agency

feedback also has a real impact onour priorities, as

it helps us to better understand our stakeholders’

key concerns.

SUSTAINABLE VALUE CREATION

SOLVAY 2021 ANNUAL INTEGRATED REPORT

PERFORMANCE

66 1. Overview of the

consolidated results

66 1.1. Financial figures

66 1.1.1. Key financial figures

67 1.1.2. Historical key financial

data

68 1.2. Extra-financial figures

71 2. Preparation

background

71 2.1. Comparability of results

& reconciliation of underlying

Income Statement indicators

71 2.2. Alternative performance

metrics (APM)

71 2.3. Description of the

operational segments

71 3. Underlying Group

figures

71 Note B1: Net sales

72 Note B2: Underlying raw

material & energy costs

72 Note B3: Underlying EBITDA

73 Note B4: Underlying

depreciation & amortization

73 Note B5: Underlying net

financial charges

73 Note B6: Underlying income

taxes

73 Note B7: Underlying profit

from discontinued operations

74 Note B8: Capex

75 Note B9: Free Cash Flow

76 Note B10: Net working

capital

76 Note B11: Underlying net

77 Note B12: Provisions

78 Note B13: CFROI

79 Note B14: ROCE

79 Note B15: Research &

innovation

80 4. Underlying figures

per segment

80 Segment overview

81 Note B16: Materials segment

82 Note B17: Chemicals

83 Note B18: Solutions

84 Note B19: Corporate &

Business Services

85 5. Reconciliation of

underlying and IFRS

measures

86 6. Notes to the

figures per share

86 Historical key share data

87 Note B20: Earnings per share

87 Note B21: Dividend

87 7. Outlook

PERFORMANCE

SOLVAY 2021 ANNUAL INTEGRATED REPORT

PERFORMANCE

Performance

SOLVAY 2021 ANNUAL INTEGRATED REPORT

PERFORMANCE

Performance

1. OVERVIEW OF THE CONSOLIDATED RESULTS

1.1. Financial gures

1.1.1. Key financial figures

IFRS Underlying

In €million

Notes FY2021 FY2020 % yoy FY2021 FY2020 % yoy

Net sales B1 10,105 8,965 +12.7% 10,105 8,965 +12.7%

Net operating costs, excluding depreciation&

amortization

B2 -8,066 -7,214 -11.8% -7,748 -7,020 -10.4%

EBITDA B3 2,038 1,751 +16.4% 2,356 1,945 +21.1%

EBITDA margin  - - - 23.3% 21.7% +1.6pp

Depreciation, amortization& impairments B4 -848 -2,416 +64.9% -756 -835 +9.4%

EBIT  1,190 -665 n.m. 1,600 1,110 +44.1%

Net financial charges B5 -96 -179 +46.3% -235 -284 +17.4%

Income tax expenses B6 110 -248 +55.8% -287 -195 -47.3%

Tax rate B6 - - - 23.5% 25.6% -2.1pp

Profit from discontinued operations B7 5 163 n.m. 2 19 -88.2%

Profit/(loss) for the period  989 -929 n.m. 1,081 650 +66.2%

(Profit)/loss attributable to non-controlling inter-

ests

 -41 -33 +26.8% -41 -33 +25.1%

Profit/(loss) attributable to Solvayshareholders  948 -962 n.m. 1,040 618 +68.3%

Basic earnings per share (in€) B19 9.15 -9.32 n.m. 10.05 5.99 +67.7%

of which from continuing operations B19 9.11 -10.90 n.m. 10.02 5.81 +72.6%

Dividend(1) B20 3.85 3.75 +2.7% 3.85 3.75 +2.7%

Capex in continuing operations B8 - 736 611 +20.5%

Cash conversion B8 - 68.8% 68.6% +0.2pp

FCF to Solvayshareholders from continuing

operations

B9 - 843 963 -12.5%

FCF to Solvayshareholders B9 - 830 951 -12.7%

FCF conversion ratio  - 37.6% 51.1% -13.6pp

Net working capital B10 1,373 1,108 +23.9% 1,373 1,108 +23.9%

Net working capital/sales(2) B10 12.7% 14.7% -2.0pp

Net financial debt(3) B11 2,149 2,398 -10.4% 3,949 4,198 -5.9%

Underlying leverage ratio B11 1.7 2.2 -22.3%

CFROI B12 6.9% 5.5% +1.5pp

ROCE B13 11.4% 6.9% +4.4pp

Research& innovation B14 298 291 +2.3%

Research& innovation intensity B14 2.9% 3.2% -0.3pp

(1) Recommended dividend for 2021

(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, accounted for as equity under IFRS

SOLVAY 2021 ANNUAL INTEGRATED REPORT

PERFORMANCE

1.1.2. Historical key financial data

As published

In € million  2017 2018 2019 2020 2021

Income statement data     

Sales a 10,891 11,299 11,227 9,714 11,434

Net sales b 10,125 10,257 10,244 8,965 10,105

Underlying EBITDA c 2,230 2,230 2,322 1,945 2,356

Underlying EBITDA margin d 22.0% 21.7% 22.7% 21.7% 23.3%

IFRS EBIT e 976 986 316 -665 1,190

Underlying profit for the period f 992 1,131 1,113 650 1,081

IFRS profit for the period g 1,116 897 157 -929 989

Underlying profit attributable to Solvay share h 939 1,092 1,075 618 1,040

IFRS profit attributable to Solvay share i 1,061 858 118 -962 948

Cash ﬂow data 

Capex j 822 833 967 643 736

of which from continuing operations k 716 711 826 611 736

Cash conversion l= (c+k)/c 67.9% 68.1% 64.4% 68.6% 68.8%

FCF m 871 989 1,072 1,206 1,043

FCF to Solvay shareholders n 466 725 801 951 830

Balance sheet data    

Net working capital o 1,414 1,550 1,560 1,108 1,373

Net working capital/sales

p= µ(o/a)

(1)

13.8% 15.3% 16.0% 14.7% 12.7%

Underlying net debt

(2)

q= r+s 5,346 5,105 5,386 4,198 3,949

Perpetual hybrid bonds r 2,200 2,500 1,800 1,800 1,800

IFRS net debt s 3,146 2,605 3,586 2,398 2,149

IFRS equity t 9,752 10,624 9,625 7,304 8,851

Equity attributable to non-controlling interests v 113 117 110 106 112

Perpetual hybrid bonds in equity u 2,188 2,486 1,789 1,787 1,787

Equity attributable to Solvay share w= t-u-v 7,451 8,021 7,725 5,411 6,953

Underlying leverage ratio

(3)

x= -q/c 2.17 2.01 2.00 2.16 1.68

Other key data    

CFROI z 6.9% 6.9% 6.5% 5.5% 6.9%

Research& innovation A 325 352 336 291 298

Research& innovation intensity B= -A/b 3.2% 3.4% 3.3% 3.2% 2.9%

(1)Average of the quarters

(2)Underlying net debt includes the perpetual hybrid bonds, accounted for as equity under IFRS

(3) For the years 2017-2019, as net debt at the end of the period did not yet reﬂect the net proceeds to be received on the divestment of discontinued operations, whe-

reas the underlying EBITDA excluded the contribution of discontinued operations, the underlying EBITDA was adjusted to calculate the leverage ratio. Polyamide’s under-

lying EBITDA was added.

The table above presents the historical figures of the Group as published at the reference date. These data have not been affected by possible

subsequent restatements due to perimeter changes, IFRS/IAS standards evolution, changes in definition of APM, etc.

Over the reference periods, the following main changes have occurred:

2017:

· Vinythai transaction completed end of February;

· Acetow transaction completed end of May;

· Divestment of Polyamide business classified as discontinued operations and assets and liabilities held for sale at the end of September 2017.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

PERFORMANCE

2018:

· Divestment of Polyamide business still classified as discontinued operations and assets and liabilities held for sale since September 2017.

2019:

· Implementation of IFRS 16;

· Divestment of Polyamide business still classified as discontinued operations and assets and liabilities held for sale since September 2017.

2020:

· Disposal of the Polyamide business completed on January 31, 2020.

· At the end of December 2020, the assets and liabilities related to some businesses have been reclassified as “held for sale” (assets for a total

amount of € 229 million and liabilities for a total amount of € 110 million):

- the Peroxides sodium chlorate business line and related assets in Povoa (Portugal);

- the various ﬂuorine chemicals assets in Onsan, South Korea, part of Special Chem;

- the commodity amphoterics surfactants activities in Novecare;

- the Peroxides sodium percarbonate business line and related assets in Bad Hönningen (Germany);

- the Barium Strontium business and the joint venture with Chemical Products Corporation (CPC); and

- the Process Materials business (part of Composites).

2021:

During 2021, the assets and liabilities related to the following businesses previously classified as “held for sale” were divested:

· the Peroxides sodium chlorate business line and related assets in Povoa (Portugal),

· the various ﬂuorine chemicals assets in Onsan, South Korea, part of Special Chem,

· the Peroxides sodium percarbonate business line and related assets in Bad Hönningen (Germany),

· the Barium Strontium business and the joint venture with Chemical Products Corporation (CPC),

· the Process Materials business (part of Composite Materials),

· the Novecare amphoterics surfactants activities, and

· the Novecare surfactants and anti-oxidants business in Rasal (India).

These divestments lead to a decrease in sales of €220 million in 2021 compared to 2020. There was no material capital gain/loss on these divestments.

On July 1, Solvay announced the closing of the acquisition, from Bayer, of a seed coating business, with facilities in Méréville, France, and tolling

operations in the U.S. and Brazil. This is a natural extension to Solvay’s own AgRHO® family of sustainable seed boosting solutions (part of Novecare)

and supports the drive toward more bio-based, sustainable technologies.

1.2. Extra-financial figures

Since 2019, Solvay has embarked on a sustainability journey that is captured in the Solvay One Planet roadmap, which is 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 is a

roadmap towards a sustainable future that provides shared value for all. Solvay made further advances on this journey in 2021, accelerating efforts

to meet stakeholders’ growing expectations, including protecting the most vulnerable during the pandemic; setting more ambitious environmental

targets and building partnerships to enable the circular economy. The table below provides an update on Solvay’s progress.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

PERFORMANCE

2018 2019 2020 2021 Comments

Progress vs

2018

Climate

Align greenhouse gas

emissions

with Paris Agreement and SBTi

(Mt)

12.7 12.1 10.2 11.0

Higher production levels in 2021 vs 2020

Achieved 11% in aggregate versus 6.6% Paris

Agreement

-14%

(-11%

structural)

Phase out coal

wherever renewable

alternatives exist (PJ)

33 32 27

(1 plant

exiting coal)

(1 plant

exiting coal)

Volume growth and exceptional energy

market conditions in 2021; Exit announced at

Rheinberg in 2020 and at Dombasle in 2021

-18%

Reduce negative pressure on

Biodiversity (yoy)

- -5% -7% -13%

Volume growth more than offset by improved

eco-profile accuracy

-24%

Resources

Increase sustainable solutions

% of Group sales

50% 53% 52% 53% (a)

Improved eco-profile and increased number

of sustainable solutions

+3pp

Increase circular economy

% of Group sales

- 4% 5% 5%

Long term projects with expected results as

from 2023

+1pp

Reduce non-recoverable

industrial waste (Kt)

89 76 64 58 Projects initiated in 2020 starting to deliver -34%

Reduce intake of freshwater

(Mm³)

330 330 314 315 Volume growth compensated by greater

efficiency

-5%

Better life

Safety

with a zero accident policy

(RIIR)

0.51 0.40 0.38 0.43

Reversal consistent with industry trends,

action plan on globalizing near misses

-16%

Accelerate inclusion & diversity

parity in mid & senior

management

23.7% 24.3% 24.6% 25.0% Launched Solvay One Dignity 9 goals +1.3pp

Gender equality

extend maternity leave

16 weeks policy open to all co-parents since

January 2021



Note: When necessary, historical numbers have been restated to be comparable with 2021 (scope and methodology).

(a) Effective 2022, the CO

price was increased from €75 to €100 per metric ton CO

eq. As a consequence, the level for 2021 will be restated to 50%.

Climate

In October 2021, Solvay announced its plans to reach carbon neutrality on scope 1 and 2 emissions before 2040 for all businesses except soda ash and

before 2050 in soda ash. Consequently, the 2030 target for greenhouse gas emissions was upgraded to reduce by -30% from -26%, as compared to

the 2018 baseline. The scope 3 target shall at least meet the 2°C criteria of the Science Based Targets initiative. A strategic initiative was also launched

in 2021 to spur transformative progress with its suppliers in 2021. The Group will continue its effort in that direction beyond 2030 within its neutrality

vision.

Previously, GHG emissions had been reduced by -14% at constant scope between 2018 and 2021, of which -11% relates to structural improvements

and -3% to lower levels of production. As part of its transition to cleaner energy sources, Solvay has 36 emission reduction projects identified, of which

21 are already underway. These represent 2.5 megatons of CO

annually, which is the equivalent of taking 1.4 million cars off the road.

The use of coal for energy production is already being phased out of two soda ash plants in Europe. In 2020, Rheinberg in Germany began switching

from coal to biomass, reducing the Group’s total emissions by -4% by 2025. More recently, the Dombasle site in France began exiting coal by

transitioning to primarily refuse-derived fuel, cutting another -2% of the Group’s total emissions by 2024. And now in 2022, Solvay takes the first step

to reduce coal usage in its largest European soda ash operation in Devnya, Bulgaria by converting a boiler to biomass. All projects generate returns

above 15% and further de-risk our operations.

Solvay has also decreased its pressure on biodiversity by -24% versus 2018 according to the ReCiPe methodology (reducing pressure on terrestrial

acidification, climate, water eutrophication, marine ecotoxicity). The overall trend is fully aligned with 2030 targets, with part of this progress related

to methodology improvements. In 2021, the Paulinia site in Brazil was awarded the Wildlife Habitat Council’s (WHC) Gold Certificate and our efforts

to restore the Cuchia Quarry in Spain also received recognition.

Solvay’s climate progress was recently recognized by CDP (formerly the “Carbon Disclosure Project'') who upgraded Solvay’s rating from B to A-,

which is in the leadership band, and higher than the chemical sector average of B.

Resources

In 2021, the proportion of sales from sustainable solutions improved by +1 percentage point, largely reﬂecting the reduction of environmental impact

in production within Specialty Polymers and Peroxides, the acquisition of new agriculture activities, and the requalification of some solutions for

coatings.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

PERFORMANCE

Regarding circularity, Solvay’s tripartite partnership between Veolia and Renault to establish a sustainable supply source for strategic battery raw

materials is on track. The hydrometallurgical process to extract and purify cobalt, lithium and nickel from Veolia’s battery cells at end of life has proven

successful. The project is now moving into an engineering phase for construction of a pilot plant.

Innovation to develop more sustainable solutions is a continuous process for Solvay teams collaborating with partners and customers to anticipate

future needs and identify higher performance requirements for new technologies. As an example, solutions for the next generation of battery

technologies are underway with a clear roadmap (Gen 3 and the solid state battery Gen 4). Solvay is the front-runner in Europe for this new technology,

and we are investing in the most advanced pilot plant in Europe. Also in the automotive market, Solvay partnered with Bridgestone and Arlanxeo

to launch TECHSYN, a new tire technology platform reducing overall fuel consumption and CO

emissions while enhancing tread mileage. In the

consumer space, customers are recognizing Solvay for its Actizone™ innovation— a unique long-lasting antimicrobial disinfection technology—

which is now commercialized.

In 2021, Solvay’s freshwater withdrawal remained essentially constant compared to 2020 (+1 Mm3), despite an organic sales growth of 17.0%.

In 2021, Solvay also successfully reached its target to reduce non-recoverable industrial waste by -30%, well in advance of its 2030 timeline. Much of

this was accomplished from waste valorization, which is the process of reusing, recycling, or composting waste and converting them to more useful

products. Some examples include repurposing waste for cement, transforming wastewater sludges into bricks for construction, and better monitoring

of the waste management data.

Better Life

Investing in human capital remains a high priority, as this underpins the foundation that propels Solvay forward.

Our safety results deteriorated in 2021 following the impact of the Covid-19 situation on behaviors and its impact on operations (volume growth,

supply chain disruptions) created by the very strong recovery. The results in 2021 versus 2018 show good progress.

In 2021, we launched the Solvay One Dignity program with the objective to accelerate diversity, equity and inclusion within our organization.

On Diversity, Solvay is accelerating gender equity at all mid and senior levels by 2030. The first step was to update a DEI dashboard with associated

metrics. In addition, a Gender Impact Assessment (GIA) is planned to identify where current policies may be negatively impacting the advancement

of female employees within the organization.

Solvay is also encouraging employees to bring their “whole self” to work and is supporting that ambition by helping colleagues create employee

resource groups (ERGs) worldwide. Two new ERGs were launched in 2021 for African American employees.

On gender equity, Solvay is also working to ensure fair recruitment and has set a target for 50% participation of under-represented groups, including

women, in the shortlist of all mid and senior level jobs. On pay equity, we are collecting data to help us identify if there are unjustified pay inequities

across Group profiles. While there is more progress to be made, the current ratio of basic salaries of women to men by management category is

encouraging. Solvay intends to publish these results for the most significant countries in its 2021 annual report, in an effort to promote transparency.

Another highlight includes the launch of a new mentoring program: Almost 25% of our female junior managers responded to a call for volunteers

to take part in “The A Effect Ambition Challenge”, an international program designed to help women boost their careers. In 2021, 150 women

participated in the program and another 300 women are scheduled to participate in 2022.

In our effort to build a more inclusive workplace, Solvay launched a global survey to assess the inclusive culture. The results have been added to the

DEI Dashboard and used as a baseline to track our progress. Eighty percent of employees feel they can be “themselves” at work. While this is a great

insight, it also highlighted certain areas where Solvay needs to focus its efforts in 2022, such as the importance of speaking up when experiencing

non inclusive behaviors.

In December 2021, Solvay launched a Global Share Ownership Program, which is historic for the company and its employees— the first of its kind

since the company went public in 1967. With this initiative, we seek to better align employees with the Group’s performance by offering them a

10% discount on Solvay shares. The aim is to promote an ownership mindset by broadening the employee perspective thereby promoting deeper

engagement and participation in driving superior value.

Solvay Solidarity Fund raised €15 million in 2020 thanks to the support of shareholders, directors, CEO and Executive managers, and employees.

Originally set up to help employees cope with hardship due to the Covid-19 pandemic, the fund this year also addresses other kinds of hardship

such as the aftermath of the ﬂoods in Belgium, Germany and China. To date €2.4 million has been provided to individuals and€4 million to collective

support: 30 projects in 13 countries.

More information in the extra-financial report.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

PERFORMANCE

2. PREPARATION BACKGROUND

2.1. Comparability of results & reconciliation of underlying Income Statement indicators

Besides 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 the Group’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. The underlying performance indicators 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, for impairments and for other elements that would distort the analysis of the Group’s underlying performance.

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 a

consistent 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

Solvay is organized in the following operating segments:

· Materials offer a unique portfolio of high-performance polymers and composite technologies used primarily in sustainable mobility applications.

Its solutions enable weight reduction and enhance performance while improving CO

and energy efficiency. Major markets served include next-

generation mobility in automotive and aerospace, healthcare and electronics.

· C hemicals 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. Its Silica, Coatis and RusVinyl businesses are also high quality

assets with strong positions in their markets. This segment provides resilient cash ﬂows and the company selectively invests in these businesses to

become the #1 cash conversion chemical player.

· Solutions offer a unique formulation & application expertise through customized specialty formulations for surface chemistry & liquid behavior,

maximizing yield and efficiency of the processes they are used in while minimizing the eco-impact. Novecare, Technology Solutions, Aroma, Special

Chem and Oil & Gas focus on specific areas such as resources (improving the extraction yield of metals, minerals and oil), industrial applications

(such as coatings) or consumer goods and healthcare (including vanillin and guar for home and personal care).

· Corporate&BusinessServices includes corporate and other business services, such as Group research & innovation or energy services, whose

mission is to optimize energy consumption and reduce CO

emissions.

3. UNDERLYING GROUP FIGURES

Note B1: Net sales

Net sales of €10,105 million in 2021 were up +12.7% (+17.0% organically) versus 2020 driven largely by volumes, and further supported with positive

pricing. Sales in 2021 were up +4% organically versus 2019.

Net sales - in € million

FY 2020 8,965

Scope -202

Forex conversion -124

Volume & Mix +1,022

Price +443

FY 2021 10,105

SOLVAY 2021 ANNUAL INTEGRATED REPORT

PERFORMANCE

SALES BY END-MARKET

2021 sales by end-markets (in %)

Materials Chemicals Solutions Solvay

Aeronautics and Automotive

50% 16% 10% 24%

Electrical and Electronics

15% 0% 6% 7%

Resources and Environment

4% 9% 19% 12%

Agro, feed and food

3% 17% 17% 13%

Consumer goods and healthcare

12% 23% 14% 16%

Building and Construction

4% 11% 10% 9%

Industrial applications

11% 23% 24% 20%

Note B2: Underlying raw materials & energy

The overall raw materials expense of the Group amounted to circa €3.2 billion in 2021 (vs. €2.2 billion in 2020). The raw materials expense can be

split into several categories: crude oil derivatives for 36%, minerals derivatives for 20% (e.g. glass fiber, sodium silica, calcium silicate, phosphorus,

sodium hydroxide…), natural gas derivatives circa 8%, biochemicals for 10% (e.g. glycerol, guar, fatty alcohol, ethyl alcohol…) and others for 25.5%

(composites...).

Net energy costs represented about €789 million (vs.€497 million in 2020). The distribution per region is the following: in Europe (63%) followed by the

Americas (21%), and Asia and the rest of the world (16%). The main energy sources expense are natural gas for 35% (25% in 2020, and 29% in 2019),

coke, anthracite, petcoke and coal for 21% (27% in 2020 and 29% in 2019), electricity for 31% (33% in 2020 and 31% in 2019), steam, hydrogen and

biomas for 12% (14% in 2020 and 11% in 2019), and fuel oil for 1% (stable vs 2020 and 2019). These percentages have been reviewed for previous years

following a change of methodology that now better reﬂects the energy sources as used by Solvay in its operations.

More information on the energy efficiency in the Extra-financial section of this Annual Report 4.2. Energy.

Note B3: Underlying EBITDA

Underlying EBITDA evolution

Underlying EBITDA- in € million

FY 2020 1,945

Scope -65

Forex conversion -25

Materials +180

Chemicals +224

Solutions +160

CBS -63

FY 2021 2,356

Underlying EBITDA- in € million

FY 2020 1,945

Scope -65

Forex conversion -25

Volume & mix +504

Net pricing -24

Fixed costs -74

Other +95

FY 2021 2,356

SOLVAY 2021 ANNUAL INTEGRATED REPORT

PERFORMANCE

Structural cost savings reached €213 million for the full year 2021, with €40 million realized in the fourth quarter. Approximately 40% of the savings

are from indirect spend, 35% are related to restructuring initiatives, and 25% are from productivity and efficiency improvements.

Underlying EBITDA of €2,356 million was up +21.1% (+27.0% organically) in 2021 versus 2020, and up +8% versus 2019 as a result of significantly

higher sales volumes. The EBITDA margin for full year 2021 was 23.3% thanks to higher volumes, increased pricing and delivery of cost measures.

Underlying EBITDA in the fourth quarter of €572 million increased +23.4% (24.0% organically) versus the fourth quarter 2020 and 16% organically

versus 2019 due mainly to price actions implemented to offset inﬂationary cost increases.

Note B4: Underlying depreciation & amortization

Amortization and depreciation & impairment charges were €756 million in 2021, compared to €835 million in 2020.

Note B5: Underlying net financial charges

In € million  FY 2021 FY 2020

Net cost of borrowings  -107 -114

Interest on loans & short term deposits  9 8

Other gains& losses on net indebtedness  2 -8

Net cost of borrowings a -96 -113

Coupons on perpetual hybrid bonds b -82 -91

Interests and realized foreign exchange gains (losses) onthe RusVinyl joint venture c -16 -19

Cost of discounting provisions d -47 -64

Result from equity instruments measured at fair value e 6 3

Net financial charges f= a+b+c+d+e -235 -284

The net cost of borrowings variance is mainly explained by the decrease:

· in the cost of borrowings attributable to the continuing efforts of repayment of debt, including the early repayment of €373 million on the € 750

million senior bond in December 2021;

· in other gains and losses on net indebtedness from € million for 2020 to € 2 million for 2021, largely attributable to currency swaps (interest element);

· i n the coupons on perpetual hybrid bonds, mainly thanks to the refinancing in September 2020 of the perpetual hybrid NC5.5 @5.118% by a new

perpetual hybrid bond of € 500 million (NC5.5@2.5%).

Discounting costs decreased as a result of the applicable discount rates for post-employment provisions.

Note B6: Underlying income taxes

In € million  FY 2021 FY 2020

Profit/(loss) for the period before taxes a 1,366 827

Earnings from associates& joint ventures b 159 83

Interests and realized foreign exchange gains (losses) onthe RusVinyl joint venture c -16 -19

Income taxes d -287 -195

Tax rate e= -d/(a-b-c) 23.5% 25.6%

The 2.1 percentage point decrease is mainly due to a more favorable mix of taxable profit by country.

Note B7: Underlying profit from discontinued operations

The disposal of the Performance Polyamides activities to BASF and Domo Chemicals has been completed on January 31, 2020. As a result, the

contribution of discontinued operations to the profit of Solvay in 2020 was limited to €19 million. Free cash ﬂow from discontinued operations in 2020

amounted to €-11 million.

In 2021, discontinued operations recorded an underlying net profit of €2 million. Free cash ﬂow from discontinued operations in 2021 amounted to

€-12 million.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

PERFORMANCE

Note B8: Capex

(in € million)  FY 2021 FY 2020

Acquisition (-) of tangible assets a -561 -454

Acquisition (-) of intangible assets b -75 -81

Payment of lease liabilities c -99 -108

Capex d = a+b+c -736 -643

Capex in discontinued operations e -33

Capex in continuing operations f = d-e -736 -611

Materials  -251 -193

Chemicals  -212 -184

Solutions  -172 -144

Corporate & Business Services  -101 -90

Underlying EBITDA g 2,356 1,945

Materials  879 712

Chemicals  1,009 816

Solutions  701 566

Corporate & Business Services  -232 -149

Cash conversion h = (f+g)/g 68.8% 68.6%

Materials  71.4% 72.9%

Chemicals  79% 77.4%

Solutions  75.5% 74.6%

Capex in continuing operations was €736 million in 2021, an increase of 20.5% compared to €611 million in 2020.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

PERFORMANCE

Note B9: Free Cash Flow

(in € million)  FY 2021 FY 2020

Cash ﬂow from operating activities a 1,499 1,242

of which voluntary pension contributions b -236 -552

of which cash ﬂow related to portfolio management c -7 0

Cash ﬂow from investing activities d -470 711

of which capital expenditures required by share sale agreement e - -14

Acquisition (-) of subsidiaries f -22 -12

Acquisition (-) of investments - Other g -22 -46

Loans to associates and non-consolidated companies h 4 -6

Sale (+) of subsidiaries and investments i 169 1,297

Recognition of factored receivables j - -22

Increase/decrease of borrowings related to environmental remediation k - 6

Payment of lease liabilities L -99 -108

FCF m = a-b-c+d-e-f-g-h-i-j+k+l 1,043 1,206

FCF from discontinued operations n -12 -11

FCF from continuing operations o 1,056 1,217

Net interests paid p -95 -103

Coupons paid on perpetual hybrid bonds q -75 -119

Dividends paid to non-controlling interests R -43 -32

FCF to Solvay shareholders s = m+p+q+r 830 951

FCF to Solvay shareholders from discontinued operations t -12 -11

FCF to Solvay shareholders from continuing operations u = s-t 843 963

FCF to Solvay shareholders from continuing operations (LTM) v 843 963

Dividends paid to non-controlling interests from continuing operations (LTM) w -43 -32

Underlying EBITDA (LTM) x 2,356 1,945

FCF conversion ratio y = (v-w)/x 37.6% 51.1%

Free cash ﬂow to shareholders from continuing operations reached €843million. Results reﬂect significant structural improvement in working capital

management, and reduced pension and interest cash costs of €89 million.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

PERFORMANCE

Note B10: Net working capital

(in € million)  December 31, 2021 December 31, 2020

Inventories a 1,745 1,241

Trade receivables b 1,805 1,264

Other current receivables c 2,005 519

Trade payables d -2,131 -1,197

Other current liabilities e -2,051 -720

Net working capital f= a+b+c+d+e 1,373 1,107

Sales g 3,277 2,418

Annualized quarterly total sales h = 4*g 13,108 9,673

Net working capital/sales I=f/h 10.5% 11.4%

Year-to-date average j= µ(q1,q2,q3,q4) 12.7% 14.7%

Net working capital over sales improved to 12.7% in 2021, due to the strong focus on working capital management and higher sales.

Note B11: Underlying net debt

(in € million)  December 31, 2021 December 31, 2020

Non-current financial debt a -2,576 -3,233

Current financial debt b -773 -287

IFRS gross debt c=a+b -3,349 -3,519

Underlying gross debt d=c+h -5,149 -5,319

Other financial instruments (current + non-current) e 259 119

Cash & cash equivalents f 941 1,002

Total cash and cash equivalents g=e+f 1,199 1,121

IFRS net debt I=c+g -2,149 -2,398

Perpetual hybrid bonds h -1,800 -1,800

Underlying net debt j=i+h -3,949 -4,198

Underlying EBITDA (LTM) k 2,356 1,945

Adjustment for discontinued operations l - -

Adjusted underlying EBITDA for leverage calculation m=k+l 2,356 1,945

Underlying leverage ratio n=-j/m 1.7 2.2

Underlying net financial debt decreased by €249 million in 2021 to 3.95 billion, driven by the higher free cash ﬂow generation in 2021.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

PERFORMANCE

Note B12: Provisions

Provisions are down €487 million to €2.6 billion thanks primarily to remeasurements related to employee benefits and the voluntary pension

contributions in Belgium and the UK totaling €236 million.

Provisions at the end of 2020

-3,087

Payments 303

Net new liabilities -464

Unwinding of provisions -100

Asset return 207

Additional voluntary pensions contributions 236

Remeasurements 416

Changes in scope and other -111

Provisions at the end of 2021 -2,600

SOLVAY 2021 ANNUAL INTEGRATED REPORT

PERFORMANCE

Note B13: CFROI

FY 2021 FY 2020

(in € million)  As

published

Adjustment As

calculated

pulished

Adjustment As

calculated

Underlying EBIT a 1,600  1,600 1,110  1,110

Underlying EBITDA b 2,356  2,356 1,945  1,945

Underlying earnings from

associates & joint ventures

c 159  159 83  83

Dividends received from

associates & joint ventures [1]

d 129 - 129 25 - 25

Recurring capex [2] e = -2.3%*m   -411   -408

Recurring income taxes [3] f = -27%*(a-c)   -389   -288

Recurring "CFROI" cash ﬂow

data

g = b-c+d+e+f   1,526   1,191

Materials    570   456

Chemicals    683   497

Solutions    454   353

Corporate &

Business Services

   -181   -115

Property, plant and

equipment

h 4,943   4,717  

Intangible assets i 2,103   2,141  

Right-of-use assets j 466   405  

Goodwill k 3,379   3,265  

Replacement value of goodwill &

fixed assets [4]

l = h+i+j+k 10,891 9,131 20,022 10,528 9,369 19,897

of which fixed assets m 7,046 10,829 17,875 6,858 10,870 17,728

Investments in associates &

joint ventures [5]

n 637 -71 565 495 4 499

Net working capital [5] o 1,373 49 1,422 1,107 347 1,454

"CFROI" invested capital p = l+n+o   22,009   21,850

Materials    6,363   6,260

Chemicals    6,527   6,492

Solutions    6,289   6,376

Corporate & Business

Services

   2,997   2,964

CFROI q = g/p   6.9%   5.5%

Materials    9.0%   7.3%

Chemicals    10.5%   7.7%

Solutions    7.2%   5.5%

[1] Excluding discontinued operations

[2] Currently estimated at 2.3% of replacement value of fixed assets

[3] Currently estimated at 27% of underlying EBIT (28% in 2020)

[4] The adjustment reﬂects the difference between the estimated replacement value of goodwill and fixed assets, and the accounting value. The changes over time come

from foreign exchange variations, new investments and portfolio moves. It also reﬂects the quarterly average over the year.

[5] The adjustment reﬂects the quarterly average over the year.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

PERFORMANCE

Note B14: ROCE

(in € million)  2021 As calcu-lated 2020 As calcu-lated

EBIT a 1,600 1,110

Non-cash accounting impact from amortization & depreciation of

purchase price allocation (PPA) from acquisitions

b -150 -181

Numerator c = a+b 1,450 929

WC industrial d 1,585 1,674

WC Other e -138 -242

Property, plant and equipment f 4,800 4,997

Intangible assets g 2,115 2,361

Right-of-use assets h 435 422

Investments in associates & joint ventures i 565 499

Other investments j 42 46

Goodwill k 3,341 3,621

Denominator l = d+e+f+g+h+i+j+k 12,745 13,378

ROCE m = c/l 11.4% 6.9%

ROCE has been defined as one of the key performance metrics to evaluate the success of the G.R.O.W. strategy. ROCE for 2021 reached a record

level at 11.4% versus 6.9% in 2020 and 8.1% in 2019.

Note B15: Research & Innovation

(in € million)  FY 2021 FY2020

IFRS research & development costs a -325 -300

Grants netted in research & development costs b 26 27

Depreciation, amortization & impairments included in research & development costs c -100 -89

Capex in research & innovation d -46 -54

Research & innovation e = a-b-c+d -298 -291

Materials  -138 -126

Chemicals  -28 -32

Solutions  -103 -103

Corporate & Business Services  -30 -30

Net sales f 10,105 8,965

Materials  2,903 2,695

Chemicals  3,357 2,948

Solutions  3,838 3,316

Corporate & Business Services  7 6

Research & innovation intensity g = -e/f 2.9% 3.2%

Materials  4.7% 4.7%

Chemicals  0.8% 1.1%

Solutions  2.7% 3.1%

R&I effort further increased slightly during 2021, compared to 2020. Corporate R&I efforts were strongly redirected towards the material activities in

preparation of the new G.R.O.W strategy.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

PERFORMANCE

4. UNDERLYING FIGURES PER SEGMENT

Segment overview

(in € million) FY 2021 FY 2020 % yoy % organic

Net sales 10,105 8,965 +12.7% +17.0%

Materials 2,903 2,695 +7.7% +11.5%

Specialty Polymers 2,173 1,820 +19.4% +20.4%

Composite Materials 730 875 -16.6% -8.6%

Chemicals 3,357 2,948 +13.9% +18.2%

Soda Ash & Derivatives 1,509 1,450 +4.1% +5.1%

Peroxides 636 642 -0.9% +9.5%

Coatis 745 470 +58.6% +68.7%

Silica 467 386 +20.7% +22.2%

Solutions 3,838 3,316 +15.8% +20.3%

Novecare [1] 1,546 1,330 +16.2% +20.4%

Special Chem 840 761 +10.4% +17.5%

Technology Solutions [1] 560 490 +14.3% +18.4%

Aroma Performance 473 435 +8.9% +9.4%

Oil & Gas [1] 418 299 +39.8% +72.7%

Corporate & Business Services 7 6 +15.8% +25.2%

EBITDA 2,356 1,945 +21.1% +27.0%

Materials 879 712 +23.4% +25.8%

Chemicals 1,009 816 +23.7% +28.6%

Solutions 701 566 +23.7% +29.5%

Corporate & Business Services -232 -149 -55.5% -

EBITDA margin 23.3% 21.7% +1.6pp -

Materials 30.3% 26.4% +3.9pp -

Chemicals 30.1% 27.7% +2.4pp -

Solutions 18.3% 17.1% +1.2pp -

EBIT 1,600 1,110 +44.1% -

Materials 637 460 +38.6% -

Chemicals 782 552 +41.6% -

Solutions 511 350 +46.3% -

Corporate & Business Services -331 -252 -31.6% -

Capex in continuing operations 736 611 +20.5% -

Materials 251 193 +30.1% 

Chemicals 212 184 +15.1% 

Solutions 172 144 +19.6% 

Corporate & Business Services 101 90 +12.4% 

Cash conversion 68.8% 68.6% +0.2pp -

Materials 71.4% 72.9% -1.5pp 

Chemicals 79.0% 77.4% +1.6pp 

Solutions 75.5% 74.6% +0.8pp 

SOLVAY 2021 ANNUAL INTEGRATED REPORT

PERFORMANCE

CFROI 6.9% 5.5% +1.5pp 

Materials 9.0% 7.3% +1.7pp 

Chemicals 10.5% 7.7% +2.8pp 

Solutions 7.2% 5.5% +1.7pp 

Research & innovation 298 291 +2.3% 

Materials 138 126 +9.0% 

Chemicals 28 32 -13.0% 

Solutions 103 103 -0.7% 

Corporate & Business Services 30 30 +0.8% 

Research & innovation intensity 2.9% 3.2% -0.3pp 

Materials 4.7% 4.7% +0.1pp 

Chemicals 0.8% 1.1% -0.3pp 

Solutions 2.7% 3.1% -0.4pp 

(1) Sales of Novecare and Technology Solutions in prior periods have been restated to reﬂect the creation of an Oil & Gas GBU as from July 1, 2021.

Note B16: Materials segment

(in € million) FY 2021 FY 2020 % yoy % organic

Net sales 2,903 2,695 +7/7% +11.5%

Specialty Polymers 2,173 1,820 +19.4% -

Composite Materials 730 875 -16.6% -

EBITDA 879 712 +23.4% +25.8%

EBITDA margin 30.3% 26.4% +3.9pp -

EBIT 637 460 +38.6% -

Capex in continuing operations 251 193 +30.1% -

Cash conversion 71.4% 72.9% -1.5pp -

CFROI 9.0% 7.3% +1.7pp -

Research & Innovation 138 126 +9.0% -

Research & Innovation intensity 4.7% 4.7% +0.1pp -

NET SALES BRIDGE

Underlying - in € million

FY 2020 2,695

Scope -60

Forex conversion -33

Volume & Mix 261

Price 39

FY 2021 2,903

SOLVAY 2021 ANNUAL INTEGRATED REPORT

PERFORMANCE

Sales in the full year 2021 were up +7.7% (+11.5% organically) to €2,903 million as a result of record sales levels in Specialty Polymers driven primarily

by automotive, EV battery and electronic markets. These gains were partially offset by scope and foreign exchange. Full year EBITDA was up +23.4%

(+25.8% organically), thanks to the increased volumes and pricing which drove 390 basis point margin expansion to 30.3% for the year.

Note B17: Chemicals

(in € million) FY 2021 FY 2020 % yoy % organic

Net sales 3,357 2,948 +13.9% +18.2%

Soda Ash & Derivatives 1,509 1,450 +4.1% -

Peroxides 636 642 -0.9% -

Coatis 745 470 +58.6% -

Silica 467 386 +20.7% -

EBITDA 1,009 816 +23.7% +28.6%

EBITDA margin 30.1% 27.7% +2.4pp -

EBIT 782 552 +41.6% -

Capex in continuing operations 212 184 +15.1% -

Cash conversion 79.0% 77.4% +1.6pp -

CFROI 10.5% 7.7% +2.8pp -

Research & Innovation 28 32 -13.0% -

Research & Innovation intensity 0.8% 1.1% -0.3pp -

NET SALES BRIDGE

Net sales FY - in € million

FY 2020 2,948

Scope -49

Forex conversion -59

Volume & Mix 301

Price 216

FY 2021 3,357

Full year 2021 sales in the segment were up +13.9% (+18.2% organically) to €3,357 million due to higher volumes and pricing. EBITDA in 2021 was

up +23.7% (+28.6% organically), thanks primarily to exceptional performance in Coatis and Rusvinyl which helped boost segment EBITDA margin to

30.1%, up 240 basis points.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

PERFORMANCE

Note B18: Solutions

(in € million) FY 2021 FY 2020 % yoy % organic

Net sales 3,838 3,316 +15.8% +20.3%

Novecare (1) 1,546 1,330 +16.2% -

Special Chem 840 761 +10.4% -

Technology Solutions (1) 560 490 +14.3% -

Aroma Performance 473 435 +8.9% -

Oil & Gas (1) 418 299 +39.8% -

EBITDA 701 566 +23.7% +29.5%

EBITDA margin 18.3% 17.1% +1.2pp -

EBIT 511 350 +46.3pp -

Capex in continuing operations 172 144 +19.6% -

Cash conversion 75.5% 74.6% +0.8pp -

CFROI 7.2% 5.5% +1.7pp -

Research & Innovation 103 103 -0.7% -

Research & Innovation intensity 2.7% 3.1% -0.4pp -

(1) Sales of Novecare and Technology Solutions in prior periods have been restated to reﬂect the creation of an Oil & Gas GBU as from July 1, 2021.

The Oil & Gas GBU was created on July 1, 2021, regrouping activities that were previously included in Novecare and Technology Solutions. The

following table presents restated figures for these GBUs since the beginning of 2020.

Net sales (in € million)

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021

Novecare (excl. Oil & Gas) 331 353 320 326 354 375 384 433

Special Chemicals 206 174 174 207 211 210 209 210

Technology Solutions (excl. Oil & Gas) 124 127 116 124 133 139 145 143

Aroma Performance 116 119 101 99 110 110 119 135

Oil & Gas 106 61 60 73 83 91 107 137

Solutions 883 834 770 829 891 925 964 1,058

NET SALES BRIDGE

Net sales FY – in € million

FY 2020 3,316

Scope -93

Forex conversion -31

Volume & Mix 459

Price 188

FY 2021 3,838

Full year 2021 sales were up +15.8% (+20.3% organically) to €3,838 million due mainly to volume recovery across businesses. Full year EBITDA was up

+23.7% (+29.5% organically), leading to 18.3% EBITDA margin for the year, up 120 basis points from 2020.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

PERFORMANCE

Note B19: Corporate & Business services

(in € million) FY 2021 FY 2020 % yoy % organic

Net sales 7 6 +15.8% 25.2%

EBITDA -232 -149 -55.5% -

EBIT -331 -252 -31.6% -

Capex in continuing operations 101 90 +12.4% -

Research & Innovation 30 30 +0.8% -

BRIDGE

in € million

FY 2020 6

Scope -

Forex conversion -

Volume & Mix 1

Price -

FY 2021 7

In the fourth quarter of 2021, a loss of €34 million was recorded in relation to the energy supply business of Solvay to third parties. The loss was caused

by an unprecedented rise in energy prices and increased market volatility in the European market.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

PERFORMANCE

5. RECONCILIATION OF UNDERLYING AND IFRS MEASURES

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 results over time.

EBITDA on an IFRS basis totaled €2,038 million versus €2,356 million on an underlying basis. The difference of €318 million is explained by the

following adjustments to IFRS results, which are done to improve the comparability of underlying results:

· €3 million to adjust for the “Cost of goods sold” resulting from the step up of the inventories of Novecare seeds coatings acquisition

· €1 million in “Earnings from associates & joint ventures” for Solvay’s share in the financial charges of the Rusvinyl joint venture. These elements are

reclassified in “Net financial charges”.

· €192 million to adjust for the “Result from portfolio management and major restructuring”, excluding depreciation, amortization and impairment

elements. This result comprises €181 million restructuring charges mainly related to the new simplification program of the support functions and net

expenses for €11 million related to disposals of subsidiaries.

· €123 million to adjust for the “Result from legacy remediation and major litigations”, primarily related to the remediation costs.

EBIT on an IFRS basis totaled €1,190 million versus €1,600 million on an underlying basis. The difference of €410 million is explained by the above-

mentioned €318 million adjustments at the EBITDA level and €92 million of “Depreciation, amortization & impairments”. The latter consists of:

· €150 million to adjust for the non-cash impact of purchase price allocation (PPA), consisting of amortization charges on intangible assets, which are

adjusted in “Cost of goods sold” for €3 million, in "Administrative costs" for €1 million, in "Research & development costs" for €3 million, and in

"Other operating gains & losses" for €147 million.

· €-58 million to adjust for the net impact of impairments and impairment reversals reported in “Result from portfolio management and major

restructuring” as a result of the impairment tests undertaken during 2021 and mainly related to RusVinyl impairment reversal (€67 million).

Net financial charges on an IFRS basis were €-96 million versus €-235 million on an underlying basis. The €-139 million adjustment made to

IFRS net financial charges consists of:

· €7 million for the costs related to the early repayment of €373 million on the €750 million senior bond tendered in December 2021.

· €-82 million reclassification of coupons on perpetual hybrid bonds, which are treated as dividends under IFRS, and as financial charges in underlying

results.

· €-16 million reclassification of financial charges and realized foreign exchange result on the €-denominated debt of RusVinyl as net financial charges.

· €-48 million for the net impact of increasing discount rates on the valuation of environmental liabilities in the period.

Income taxes on an IFRS basis were €-110 million versus €-287 million on an underlying basis. The €-178 million adjustment includes mainly the tax

effect of the adjustments of profit before taxes and reversal of valuation allowances on deferred tax assets on losses and other temporary differences.

Discontinued operations generated a profit of €5 million on an IFRS basis and €2 million on an underlying basis. The €-2 million adjustment to the

IFRS profit relates mainly to the Pharma business.

Profit / (loss) attributable to Solvay shareholders was €948 million on an IFRS basis and €1,040 million on an underlying basis. The delta of €92

million reﬂects the above-mentioned adjustments to EBIT, net financial charges, income taxes and discontinued operations. There was a €1 million

impact on non-controlling interests.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

PERFORMANCE

6. NOTES TO THE FIGURES PER SHARE

Historical key share data

2016 2017 2018 2019 2020 2021

Number of shares (in 1000 shares)      

Issued shares at end of year a 105,876 105,876 105,876 105,876 105,876 105,876

Treasury shares at end of year b 2,652 2,358 2,723 2,466 2,718 2,237

Shares held by Solvac c 32,511 32,511 32,511 32,511 32,511 32,511

Outstanding shares at the end of the

year

d = a-b 103,225 103,519 103,154 103,411 103,158 103,640

Average outstanding shares (basic

calculation)

e 103,294 103,352 103,277 103,177 103,140 103,527

Average outstanding shares

(diluted calculation)

f 103,609 104,084 103,735 103,403 103,170 103,788

Data per share (in €)      

Equity attributable to Solvay share g = .../d [2] 72.83 71.98 77.76 74.70 52.45 67.09

Underlying profit for the period (basic) h = .../e [2] 8.19 9.08 10.57 10.41 5.99 10.05

IFRS profit for the period (basic) i = .../e [2] 6.01 10.27 8.31 1.15 -9.32 9.15

IFRS profit for the period (diluted) j = .../f [2] 5.99 10.19 8.27 1.15 -9.32 9.13

Gross dividend [3] k 3.45 3.60 3.75 3.75 3.75 3.85

Net dividend [3] l = k*(1-…%) [4] 2.42 2.52 2.62 2.62 2.62 2.70

Share price data (in €) [5]      

Highest m 112.30 132.00 120.65 111.45 105.25 118.65

Lowest n 70.52 106.30 85.44 82.26 52.82 90.78

Average o = v/u 89.32 118.69 110.07 95.53 78.95 105.30

At the end of the year p 111.35 115.90 87.32 103.30 96.88 102.20

Underlying price/earnings q = p/h 13.6 12.8 8.3 9.9 16.2 10.2

IFRS price/earnings r = p/i 18.5 11.3 10.5 90.0 -10.4 11.2

Gross dividend yield s = k/p 3.1% 3.1% 4.3% 3.6% 3.9% 3.8%

Net dividend yield t = l/p 2.2% 2.2% 3.0% 2.5% 2.7% 2.6%

Stock market data [5]      

Annual volume (in 1000 shares) u 86,280 62,642 70,715 65,292 71,670 42,811

Annual volume (in € million) v 7,707 7,435 7,784 6,238 5,659 4,508

Market capitalisation, end of year

(in € million)

w = p*d 11,494.1 11,997.8 9,007.4 10,682.3 9,994.0 10,592

Velocity x = u/a 81.5% 59.2% 66.8% 61.7% 67.7% 40.4%

Velocity adjusted for free ﬂoat y = u/(a-b-c) 122.0% 88.2% 100.1% 92.1% 101.4% 60.2%

(1) These data are not presented on pro forma basis, i.e: excluding impacts of IFRS16 Leases for 2018.

(2) The numerator can be found under the same label in the historic key financial data table in section 1 of the Business review.

(3) Recommended 2021 dividend, pending General Shareholders meeting on May 10, 2022.

(4) Belgian withholding tax applicable in year of dividend payment, i.e. the following year: 27% in 2016, 30% from 2017 onward.

(5) The stock market data are based on all trades registered by Euronext.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

PERFORMANCE

Note B20: Earnings per share



FY2021 FY 2020

Profit attributable to Solvay share (in € m)

 

Underlying profit for the period a 1,040 618

Underlying profit from continuing operations b 1,038 599

IFRS profit for the period c 948 -962

IFRS profit/(loss) from continuing operations d 943 -1,124

Number of shares (in 1000 shares)  

Issued shares at end of year e 105,876 105,876

Treasury shares at end of year f 2,236 2,718

Outstanding shares at the end of the year g = e-f 103,640 103,158

Average outstanding shares (basic calculation) h 103,527 103,140

Average outstanding shares (diluted calculation) i 103,788 103,170

Data per share (in €)  

Underlying profit for the period (basic) j = a/h 10.05 5.99

Underlying profit from continuing operations (basic) k = b/h 10.02 5.81

IFRS profit for the period (basic) l = c/h 9.15 -9.32

IFRS profit from continuing operations (basic) m = d/h 9.11 -10.90

IFRS profit/loss for the period (diluted) p = c/i 9.13 -9.32

IFRS profit from continuing operations (diluted) q = d/i 9.09 -10.90

Note B21: Dividend

The Board of Directors decided to recommend to the General Shareholders’ Meeting of May 10, 2022 the payment of a total gross dividend of €3.85

per share. The dividend for the fiscal year 2021 is in line with the Group’s dividend policy of maintaining a stable to increasing dividend whenever

possible and, as far as possible, never reducing it.

Given the interim dividend of €1.50 gross per share, with 30% withholding tax, paid on January 17, 2022, the balance of the dividend in respect of

2021, equals €2.35 gross per share, which will be paid on May 19, 2022, provided prior agreement by General Shareholders Meeting.

7. OUTLOOK

Against an unprecedented inﬂationary cost environment, pricing actions in 2022 are expected to accelerate, and full year EBITDA is estimated to

grow organically by mid-single digits. With the current cycle of growth investments underway, Free Cash Flow is estimated to exceed €650 million.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

91 1. Introduction

91 2. Capital, shares and shareholders

94 3. Board of Directors

94 3.1. Board of Directors

101 3.2. Board committees

105 4. Executive leadership Team (ELT)

107 5. Remuneration report

120 6. Main characteristics of risk

management and internal control

systems

122 7. External audit

123 8. Items tobe disclosed

pusuanttoarticle34 of the Belgian royal

decree of November14,2017

Corporate

Governance Statement

CORPORATE

GOVERNANCE

STATEMENT

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

Highlights of 2021

Solvay’s governance bodies are responsible

for maintaining the Group’s long-term thinking,

pursuing the vision of Solvay’s founder and

implementing the Group’s strategy.

They guide us in creating sustainable value for all

our stakeholders, inline with our Purpose.

Through our engagement with investors and

analysts, we are continuously striving to improve our

governance and executive remuneration practices,

as our actions in 2021 demonstrate.

Board of Directors

In 2021, Solvay’s Board of Directors provided the CEO with

strong, collective support in managing the Group through the

rebound, challenging and overseeing executives and ensuring

that we continue to raise the bar in many areas. They met with

the Executive Leadership Team (ELT) eleven times. In particular,

the Board has strengthened its focus on Environmental Social and

Governance (ESG) factors. Business performance reviews at Board

level take into account progress on our One Planet sustainability

roadmap and every key decision made integrates essential ESG

dimensions. As part of their Continuous Training Program, the

Board also visited our Tavaux site, in France.

Main decisions in 2021:

f Creation of a stand-alone ESG Committee - This new

Committee oversees the Group’s ESG policies, progress and

effectiveness, helping Solvay to seize ESG opportunities that

create long-term value. The Chair of the ESG Committee, Matti

Lievonen, has significant experience in this area, having led

other companies’ sustainability transformations. In 2021, the

Committee provided a meaningful contribution to the Board’s

deliberations, helping to further accelerate our sustainability

efforts. Solvay’s new carbon neutrality ambition was the first

recommendation it made to the Board.

f Launch of a global share ownership program - The Board

supported the launch of our first employee share purchase plan,

offering Solvay personnel the opportunity to buy company

shares at a discount of 10%. The initiative aims to promote an

ownership mindset among Solvay employees.

f Evolution of the Board - The appointment of two new

independent members, Pierre Gurdjian and Laurence Debroux,

will be proposed and voted on at the Shareholders Meeting on

May 10, 2022.

directors

meetings

93%

attendance rate

non executive Board

Members

SOLVAY BOARD OF DIRECTORS

AT YEAR END 2021

2010 2015 2021

Nationalities 7 7 7

Women 13% 33% 43%

Independance 50% 67% 64%

AN INCREASINGLY DIVERSE

ANDINDEPENDENT BOARD

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

f Evolution of Remuneration report and policy - We have

enhanced our disclosure of remuneration following the

feedback shared by our stakeholders. This involved improving

our disclosure of ELT members’ remuneration by providing a

clear explanation of how the qualitative metrics (financial and

extra-financial) are assessed.

In addition, we have taken the opportunity to reflect on and

integrate stakeholder feedback into our executive remuneration

policy. A revised remuneration policy, taking into account

feedback received from key stakeholders, will be voted on at the

2022 General Shareholders Meeting. The key policy changes we

have made improve alignment with shareholder value creation,

strengthen the pay-for-performance model and increase emphasis

on the Solvay One Planet criteria. We also ensure that long term

incentives prioritize the delivery of strategic commitments related

to growth and greenhouse gas targets, while accentuating the

focus on returns.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

meetings

100%

attendance rate

nationalities

members

woman

THE EXECUTIVE LEADERSHIP TEAM

AT YEAR END 2021

Executive Leadership Team

(ELT)

To accelerate our G.R.O.W. transformation, in 2021 the ELT

decided to create an Operational Leadership Team composed of

business heads. This involved combining certain Solvay businesses

and simplifying our organization, with 17 distinct Functions being

grouped into seven. These changes reinforce the accountability of

the senior leadership team and will simplify and speed up decision

making.

In 2021, the ELT focused on the transformation of the Group. It also

prioritized engagement with a wide range of stakeholders on ESG

topics, with the full support of the Board.

More detailed information can be found in the respective sections

of the Corporate Governance statement, which includes the

Remuneration report.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

Corporate Governance

Statement

1. INTRODUCTION

Solvay SA – headquartered in Belgium – is committed to the highest level of Belgian governance principles. We seek to consistently strengthen our

corporate governance practices and disclosures, emphasizing transparency and promoting a culture of sustainable long-term value creation.

Solvay’s governance bodies are responsible for maintaining the Group’s long-term thinking, pursuing the vision of Solvay’s founder, and implementing

the Group’s strategy. The Board of Directors is entrusted with challenging and supporting the Executive Leadership Team (ELT) in implementing

Solvay’s strategy.

This Corporate Governance Statement adheres to the recommendations of the 2020 Belgian Corporate Governance Code (the “Belgian Governance

Code”), which companies can apply on a “comply or explain” basis. The Corporate Governance Statement includes additional factual information

with respect to Solvay’s corporate governance practices and relevant modifications thereto, together with details on directors’ and executive

remuneration and of relevant events that took place during the preceding year.

Except for the principles set out in provisions 7.6 and 7.9 of the Belgian Governance Code (see Remuneration Report), Solvay SA complies fully with

all the recommendations of the Belgian Governance Code.

The Corporate Governance Charter (the “Charter”) adopted by the Board of Directors of Solvay on December 11, 2019 is available on solvay.com and

describes the main aspects of the Solvay’s approach to corporate governance, including its governance structure and the internal rules of the Board

of Directors, the ELT and committees set up by the Board of Directors.

2. CAPITAL, SHARES AND SHAREHOLDERS

2.1. Capital

Solvay’s capital amounts to €1,588,146,240 and comprises 105,876,416 issued shares. No changes were made to Solvay’s capital in 2021.

2.2. Solvay shares

Solvay (SOLB.BE) is listed on Euronext Brussels, which is our primary listing. Solvay has a secondary listing on Euronext Paris. Since September 9, 2021,

Solvay shares have also been traded over the counter (OTC) as an unsponsored American Depository Receipt (ADR).

Solvay is a constituent of the BEL20, the main Belgian index. On September 14, 2018 Solvay became part of the Next20 index and is considered to

be the largest (specialty) chemicals company on the Paris stock exchange. Solvay shares are part of other major indexes including the BEL Chemicals,

STOXX family (DJ STOXX and DJ Euro STOXX), MSCI index, Euronext 100, Dow Jones Sustainability TM World Index and FTSE4Good Index.

During 2021, the average share price at end of day close was €106.02 while the 52-week range was €93.42 – €118 per share. Average daily trading

volume as reported by Euronext was 165,376 shares in 2021, compared to 278,870 shares in 2020. Solvay’s closing share price on December 31, 2021

was €102.2, which represents an increase of 5.5% compared to the end of 2020.

Solvay share prices and trading volumes from January 4, 2021 to December 31, 2021.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

2.3. Shareholders

2.3.1. Shareholder structure

As of December 31, 2021, Solvay’s capital was represented by 105,876,416 ordinary shares. All Solvay shares are entitled to the same rights. There are

no different classes of shares and the “one share, one vote, one dividend” principle is upheld.

Solvay ordinary shares can be held as:

· Registered shares: shares represented by an entry within Solvay’s share registry, managed by the Solvay Shareholders Service. This type of holding

enables shareholders to benefit from free custody and administration fees, an invitation to the Shareholders’ General Meeting, dividend and tax

reporting paid, among other things. Solvac SA holds its shares in registered form.

· Dematerialized shares: shares represented by a book entry in the name of the shareholder with a recognized account keeper or a clearing institution.

The chart below represents Solvay’s shareholder structure, including the notifications made by shareholders as of December 31, 2021. The transparency

notifications are required by Belgian law and/or pursuant to Solvay’s bylaws, when the shareholding crosses the thresholds of 3%, 5%, 7.5% or any

multiple of 5%.

Shareholder structure

100

120

200.000

400.000

600.000

volume

in shares

price in €

FEB.

MAR.

APR.

MAY

JUNE

JULY

AUG.

SEPT.

OCT.

NOV.

JAN. 2021

DEC. 2021

SOLVAY SHARE PRICES AND TRADING VOLUMES

(from January 2, 2021 to December 31, 2021)

Volume Price

SHAREHOLDER STRUCTURE

Solvac SA

SSOM

Blackrock Inc.

Other Investors

63.01%

2.99%

3.19%

30.81%

· Solvac SA gave notice that it held 30.81% of Solvay’s capital on March 19, 2021.

· Solvay Stock Option Management SRL notified Solvay, through Solvac SA, that its shareholding amounted to 2.99% (voting rights) on March 19,

2021.

· Blackrock Inc., an institutional investor, gave notice on May 19, 2021, that it holds a 3.19% interest.

The remaining shares, comprising approximately 63%, are held by institutional and retail shareholders.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

Solvac

Solvay’s largest shareholder is Solvac SA (“Solvac”), which holds 32,621,583 shares. This represents 30.81% of Solvay’s issued share capital.

Solvac SA is a public limited liability company established under Belgian law, founded in 1983. Its annual reports indicate that its primary asset consists

of shares in Solvay.

Solvac’s shares are traded on Euronext Brussels and have approximately 14,000 shareholders. Among them, approximately 2,300 individuals are

related to the founding families of Solvay, which, combined, are reported to hold approximately 77% of Solvac shares.

Solvac’s Board has expressed its strategic investment objective in Solvay in its 2020 Corporate Governance Statement:

“Solvac supports the development of Solvay’s strategy focused on its transformation towards world leadership in advanced materials and specialty

chemicals. Solvac supports the Solvay One Planet initiative and its ambitious commitments. Solvac underlines the importance for it to see Solvay

maintain its policy stable and, if possible, increasing dividends, as well as prudent financial discipline leading to an investment grade qualification of

its short and long term debt.”

Considering Solvac’s stated investment objective, and its engagement track-record with Solvay since its initial investment in 1983, a relationship

agreement with Solvac has not been considered necessary. As such, there is no requirement to have Solvac representation on Solvay’s Board.

Solvay Stock Option Management

Solvay Stock Option Management SRL, is an indirect subsidiary of Solvay, and holds 2.99% of Solvay’s capital through shares and purchase options.

These are held as part of the Group’s strategy to hedge the risk linked to stock options granted by Solvay to senior executives of the Group.

2.4. Relations with investors and analysts

Solvay establishes an open and constructive dialogue with the entire investment community. Solvay provides accurate information to promote the

understanding of its business and strategy, which leads to a fair assessment by the market. Detailed information on our business activities, strategy

and financial performance is available through various regulatory and other publications, such as the integrated annual report, financial reports and

press releases, as well as additional information, such as webcasts, which are available on the company's website (www.solvay.com).

The investor relations team maintains a close relationship with investors throughout the year. The CEO and CFO also prioritize interactions with the

various members of the investment community. The teams have been agile and ﬂexible in maintaining a wide range of interactions through digital

technologies.

It is important to note that all interactions are based on public information.

This year, as last year, Solvay reinforced our communication on our ESG strategy and performance. On December 2, 2021, we held our second

ESG webinar to present an update on our progress with the Solvay One Planet plan. The webinar, which was hosted by the CEO and members of

management, was attended by current shareholders, potential investors, market analysts, employees and other stakeholders. A recording of the

event is available on the solvay.com.

Finally, Solvay also adheres to the guidelines issued by the FSMA (Belgian Financial Services and Markets Authority) and fully complies with the

disclosure obligations defined by Belgian law and contained in the Market Abuse Regulation (EU) 596/2014 (MAR).

2.4.1. Interactions 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 private banks, regularly interacting with their analysts and participating in events dedicated to private

investors.

Solvay also has regular meetings with its major reference shareholder, Solvac. The CEO and CFO gave three digital presentations to Solvac’s Board of

Directors following the announcement of the Solvay Group’s half- and full-year results and general overview of the chemical environment.

In 2021, Solvay’s management participated in three digital events organized by Solvay’s founding families to update them on strategy and results.

2.4.2. Interactions with sell-side analysts

Solvay is covered by 21 sell-side analysts who regularly publish research on the Company. In 2021, one broker dropped coverage due to M&A and

one broker initiated coverage on Solvay. The up-to-date list of covering analysts can be found on Solvay’s website.

Apart from regular individual meetings, emails and phone conversations, Solvay organizes quarterly conference calls between the Executive

Leadership team and the sell-side analysts, following the publication of Group’s results. Although specifically geared to 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.

2.4.3. Interactions with institutional investors

Solvay mainly interacts with institutional investors following the announcement of our quarterly, half- and full-year results. As a result of Covid-19, all

one-on-one meetings and investor conferences have been attended by Solvay digitally from 2020 onwards.

In 2021, Solvay participated in 59 events, 28 of which involved senior management: 15 digital roadshows, 6 of which were dedicated to ESG and 39

conferences in countries across Europe, North America and Asia.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

In many of the meetings with the financial community, Solvay's CEO and the CFO are present. They discuss different topics, including quarterly

earnings results, market conditions, the prospects for the current year and the medium-term strategy. Particular attention was given in 2021 on

improving our cash conversion, generating cash, divesting businesses, deleveraging our net debt, maintaining a strong credit rating and sustaining

a strong dividend.

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

At least once a year, Solvay’s practice has been for the Head of Investor Relations and the Group Corporate Secretary to reach out directly to

stewardship teams of certain institutional investors and to ESG Research providers, including proxy advisors. The purpose of this engagement

exercise is to better understand the changes to their methodologies and policies as well as to actively solicit their feedback as to how Solvay can

further improve upon its ESG practices and disclosures.

During 2021, Solvay organized an ESG Roadshow to meet with the stewardship teams of its top shareholders. These meetings, attended by various

members of the Executive Leadership Team, including Solvay’s CEO, provided an update on Solvay’s key ESG targets as well as its performance.

3. BOARD OF DIRECTORS AND BOARD COMMITTEES

The Charter defines the role and mission, functioning, size, composition, training, and evaluation of the Board of Directors. The internal rules of the

Board of Directors are attached to the Charter.

3.1. The Board of Directors

3.1.1. Structure and composition

As of December 31, 2021 the Board was composed of 14 Directors and had the following attributes:

· The role of Chair and CEO are separated.

· Thirteen of the 14 Directors on the Board are non-executive, representing diverse competencies, as highlighted in the table below.

· Nine of the 14 Directors are considered to be independent non-executive directors according to the criteria defined by the Belgian Governance

Code, who have also been recognized as independent by the respective Ordinary Shareholders’ Meetings where such non-executive director was

elected.

· The Board's 14 members have a four-year mandate

· Directors represent seven different nationalities.

· Six of the 14 Directors are women.

· The overall meeting attendance by Directors stood at 93.52%

Ms. Evelyn du Monceau and Ms. Amparo Moraleda left the Board of Directors at the Ordinary Shareholders’ Meeting of May 11, 2021, and were

replaced by Mr. Edouard Janssen and Mr. Wolfgang Colberg, respectively. Their mandates will expire at the end of the Ordinary Shareholder’s

Meeting to be held in May 2025.

Mr. Bernard de Laguiche resigned from his position on Solvay's Board of Directors for personal reasons, effective September 24, 2021.

At the end of the Ordinary Shareholders’ Meeting of Tuesday, May 10, 2022:

· The mandate of Ms. Rosemary Thorne will expire (due to reaching the age limit of 70). Her mandate will be proposed for renewal for a limited period

of one year to ensure a smooth transition of her duties on the Board of Directors.

· The mandates of Mr. Gilles Michel, Mr. Philippe Tournay and Mr. Matti Livoenen will expire. Mr. Philippe Tournay has decided not to request the

renewal of his mandate. The mandate of Mr. Gilles Michel and Mr. Matti Lievonen will be proposed for renewal for another four-year term, until the

end of the Ordinary Shareholders’ Meeting to be held in May 2026.

· The appointment as new directors of Mr. Pierre Gurdjian and Ms. Laurence Debroux will be proposed for a four-year team, until the end of the

Ordinary Shareholders’ Meeting to be held in May 2026.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

✪ Year of first appointment  Presence at Board meetings in 2021

NICOLAS BOËL

Belgian / Born in: 1962

Non independent Director

✪ 1998  10/10

Solvay SA mandates

Chairman of the Board of Directors, Chairman of the Finance

Committee, Chairman of the Remuneration Committee,

Member of the Nomination Committee

Directorship expiry date: 2025

Diplomas:

MA in Economics (Université catholique de Louvain, Belgium).

Master of Business Administration (College of William and Mary,

Virginia, US)

Others directorships:

Publicly-listed companies: Board Member of Sofina SA.

ILHAM KADRI

French-Moroccan / Born in: 1969

Non independent Director

✪ 2019  10/10

Solvay SA mandates:

Chairwoman of the Executive Committee, Director, Member of

the Finance Committee and Member of the ESG Committee

Directorship expiry date: 2025

Diplomas:

Degree in chemical engineering from l’Ecole des Hauts

Polymères in Strasbourg, PhD in macromolecular physico-

chemistry from Strasbourg’s Louis Pasteur University

Others directorships:

Publicly-listed companies:

Board Member of A.O. Smith Corporation and L'Oreal SA.

BERNARD DE LAGUICHE

French-Brazilian / Born in: 1959

Non independent Director

✪ 2006  7/7

Solvay SA mandates:

Member of the Executive Committee since September 30, 2013,

Director, Member of the Finance Committee & Member of the

Audit Committee since May 13, 2014

Directorship expiry date: 2025 resignation September 2021

Diplomas:

MA in Economics and Business Administration, HSG (Universität

St. Gallen, Switzerland). MBA in Agribusiness, University of Sao

Paulo (USPESALQ)

CHARLES CASIMIR-LAMBERT

Belgian / Born in: 1967

Non independent Director

✪ 2007  10/10

Solvay SA mandates:

Director. Member of the Finance Committee

Directorship expiry date: 2023

Diplomas:

MBA Columbia Business School (New York, USA)/London

Business School (London, UK). Master’s degree (lic.oec.HSG) in

Economics, Management and Finance (Universität St. Gallen,

Switzerland)

Others directorships:

None

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

EVELYN DU MONCEAU

Belgian / Born in: 1950

Independent Director

✪ 2010  0/5

Solvay SA mandates:

Independent Director, Member of the Remuneration and

Nomination Committees

Directorship expiry date: 2021

Diplomas:

MA in Applied Economics from the Université Catholique de

Louvain (Belgium)

Others directorships:

Publicly-listed companies: Chair of the Board and Chair of the

Governance, Remuneration and Nomination Committee of UCB

SA; Board Member of La Financière de Tubize SA.

Other roles: Member of the Corporate Governance Committee

(Belgium).

HERVÉ COPPENS D’EECKENBRUGGE

Belgian / Born in: 1957

Non-independent Director

✪ 2009  10/10

Solvay SA mandates:

Member of the Finance and Audit Committees

Directorship expiry date: 2024

Diplomas:

MA in Law from the Université Catholique de Louvain

(Belgium). Diploma in Economics and Business, ICHEC

(Belgium)

Others directorships:

Publicly-listed companies: None

FRANÇOISE DE VIRON

Belgian / Born in: 1955

Independent Director

✪ 2013  9/10

Solvay SA mandates:

Independent Director, Member of the Remuneration and

Nomination Committees,

Directorship expiry date: 2025

Diplomas:

Doctorate of Science (Université catholique de Louvain, Belgium).

Master in Sociology (Université catholique de Louvain, Belgium)

Others directorships:

Publicly-listed companies: None.

Other roles: Professor emeritus at the Faculty of Psychology

and Education Sciences and Louvain School of Management

(Université catholique de Louvain, Belgium). Past President of

AISBL EUCEN – the European Universities Continuing Education

Network.

AMPARO MORALEDA MARTINEZ

Spanish / Born in: 1964

Independent Director

✪ 2013  5/5

Solvay SA mandates:

Independent Director, Member of the Remuneration and

Nomination Committees

Directorship expiry date: 2021

Diplomas:

Degree in Industrial Engineering, ICAI (Universidad Pontifica

Comillas, Spain) PDG. IESE Business School (Universidad de

Navarra, Spain)

Others directorships:

Publicly-listed companies: Board Member and Chair of the

Remuneration, Nomination and Governance Committee of

Airbus SE; Board Member and Chair of the Remuneration

Committee of CaixaBank SA; Board Member of Vodafone plc

Other roles: Member of the Supervisory Board of CSIC

(Consejo Superior de Investigaciones Cient ficas); Member

of the Advisory Board of SAP Spain; Member of the Advisory

Board of SAP Spain; Member of the Board of Directors of

Airbus Foundation

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

GILLES MICHEL

French / Born in: 1956

Independent Director

✪ 2014  10/10

Solvay SA mandates:

Independent Director, Member of the Finance Committee,

Member of the Remuneration and Nomination Committees since

March 2018

Directorship expiry date: 2022

Diplomas:

École Polytechnique (France). École Nationale de la Statistique

et de l’Administration économique (ENSAE) (France). Institut

d’Études Politiques (IEP)

Others directorships:

Publicly-listed companies: Board Member and Chair of

Governance Committee of IBL Ltd. and Board member and

Chair of Governance and Remuneration Committees of Valeo SA

(FR)Valeo SA

ROSEMARY THORNE

British / Born in: 1952

Independent Director

✪ 2014  10/10

Solvay SA mandates:

Independent Director, Chair of the Audit Committee

(Chairwoman since May 2018)

Directorship expiry date: 2022

Diplomas:

Honours Degree in Mathematics and Economics from the

University of Warwick (UK). Fellow of the Chartered Institute of

Management Accountants FCMA and CGMA. Fellow of the

Association of Corporate Treasurers FCT

Others directorships:

Publicly-listed companies: None

Other roles: Board Member and Chair of Audit Committee of

Merrill Lynch International (UK)

MARJAN OUDEMAN

Dutch / Born in: 1958

Independent Director

✪ 2015  10/10

Solvay SA mandates:

Independent Director, Member of the Audit Committee since

May 12, 2015

Directorship expiry date: 2023

Diplomas:

Law degree, Rijksuniversiteit Groningen (the Netherlands).

Masters Degree in Business Administration, Simon E. Business

School, University of Rochester (New York, USA), and Erasmus

Universiteit Rotterdam (the Netherlands)

Others directorships:

Publicly-listed companies: Board and audit committee

member UPM-Kymmene Oyi and Board member and chair

Auditcommittee Novolipetsk Steel.

Other roles: Board member SHV Holdings and KLM NV

AGNÈS LEMARCHAND

French / Born in: 1954

Independent Director

✪ 2017  5/10

Solvay SA mandates:

Independent Director, Member of the Remuneration and

Nomination Committees

Directorship expiry date: 2025

Diplomas:

Ecole Nationale Supérieure de Chimie de Paris (France).

Chemical engineering degree from MIT (Boston, US). MBA

degree from INSEAD

Others directorships:

Publicly-listed companies: Board Member and Chair of the

Corporate Social Responsibility Committee of Compagnie de

Saint-Gobain SA; Board Member of bioMerieux SA

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

PHILIPPE TOURNAY

Belgian / Born in: 1959

Independent Director

✪ 2018  10/10

Solvay SA mandates:

Independent Director. Member of the Audit Committee

Directorship expiry date: 2022

Diplomas:

MA in economics LSM-UCL (Université Catholique de Louvain,

Belgium). INSEAD, International Director Programme (IPD) 2020

Others directorships:

Publicly-listed companies: None

Other roles: Vice Chairman of Fondation Tournay Solvay

MATTI LIEVONEN

Finnish / Born in: 1958

Independent Director

✪ 2018  10/10

Solvay SA mandates:

Independent Director. Chairman of the ESG Committee.

Member of the Audit Committee

Directorship expiry date: 2022

Diplomas:

BSc (Eng.), Savonia University of Applied Science. EMBA, Aalto

University. DSc (Tec.) h.c Aalto University

Others directorships:

Publicly-listed companies: Board Chair and Chair of the

Nomination and Remuneration Committee of Fortum Oyj

Other roles: CEO of Oiltanking GmbH; Member of the

Shareholder Committee of Wintershall DEA

AUDE THIBAUT DE MAISIÈRES

Belgian / Born in: 1975

Independent Director

✪ 2010  10/10

Solvay SA mandates:

Independent Director, Member of the Remuneration and

Nomination Committees, Member of the ESG Committee

Directorship expiry date: 2024

Diplomas:

MBA Columbia Business School (New York, USA), MSc London

School of Economics (London, UK), MA University of La

Sorbonne (Paris, France)

Others directorships:

Publicly-listed companies: None

Other roles: Member of the Investment Committee of The

Innovation Fund; Co Founder, Sonic Womb Productions (London,

UK)

EDOUARD JANSSEN

Belgian / Born in: 1978

Non independent Director

✪ 2021  5/5

Solvay SA mandates:

Member of the Board

Directorship expiry date: 2025

Diplomas:

Solvay Brussels School: Master of Science in Finance &

Management (Magna cum laude and Prix de Barsy)

Insead MBA (July 2009, France & Singapour)

Others directorships:

Listed: Financière de Tubize

Other: Insead Hoffmann Institute for Business & Society

(advisory board member)

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

WOLFGANG COLBERG

German / Born in: 1959

Independent Director

✪ 2021  5/5

Solvay SA mandates:

Member of the Board, Member of the Audit and Finance

Committees

Directorship expiry date: 2025

Diplomas:

PhD in Political Science (Business Administration and Business

Informatics), University of Kiel

Others directorships:

Publicly-listed companies: Independent Director:Thyssenkrupp

AG (Germany), Non-Executive Director Pernod Ricard SA

(France), Independent Diretor Burelle SA (France)

Others: Chairman AMSik GmbH (DE), Chairman Efficient Energy

GmbH (DE), Board member at Dussur (SA), at Chemicalnvest

Holding BV (NL), Deutsche Invest and industrial partner Capital

Partners (DE)

3.1.2. Director skills and qualification matrix

The members of the Board of Directors collectively bring the wide set of skills and experience that is required to develop and oversee the Group’s

long-term strategy and also helps the Board to identify which skills may be needed when considering new Board members.

The skills and experience that the Board of Directors has ranges from strong experience of international industries and markets - for many of them at

executive level - to functional domains, like human resources.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

100

Each Director’s skills and experience is presented in the Board Skills Matrix below.

Chemical

industry

Finance Corporate

management

Industrial Research &

development

Digital/

Sustainable

development

Human

resources

International

experience

Nicolas Boël x x x x x x

Ilham Kadri x x x x x x x x x

Charles Casimir-Lambert x x x x x x

Hervé Coppens d'Eecken-

brugge

x x x x x

Françoise de Viron x x x x x x

Rosemary Thorne x x x x

Gilles Michel x x x x x

Marjan Oudeman x x x x x x x

Agnès Lemarchand x x x x x

Matti Lievonen x x x x x x x

Philippe Tournay x x x x

Aude Thibaut de Maisières x x x x x

Edouard Janssen x x x x x x

Wolfgang Colberg x x x x x x x x

3.1.3. Functioning of the Board of Directors

In 2021, the Board held five regular meetings and five additional meetings in order to react to current events and implement the board strategy, as

needed. Each Director’s attendance is shown in the table in section 3.1.1. Structure and composition.

The Board of Directors’ discussions, reviews and decisions focused on, but were not limited to, the annual review of Group strategy, strategic projects,

such as acquisitions, divestments and capital expenditure, capital allocation, financial reporting, the review of Solvay’s sustainability initiatives, risk

management, intra-group restructuring, Board composition and the reports and resolution proposals for the Shareholders’ Meeting.

The Board’s focus on ESG has been strengthened this year. The creation of a stand-alone ESG Committee provided a meaningful contribution to

the Board’s deliberations, helping to further accelerate our sustainability efforts. The new carbon neutrality ambition was the subject of the first ESG

Committee meeting and was also the first recommendation it made. The Remuneration Committee and the Board of Directors have been active to

further align our ESG mindset, behaviors and projects with our Executives’ remuneration. The Board also supported the launch of a Global Share

Ownership Program to encourage employees to invest in Solvay shares.

The Board is also very engaged in the company's ESG issues and carefully reviews the environmental and governance controversies encountered by

the Group.

To monitor the wellbeing of our employees, Solvay continued to launch Pulse Surveys during the year 2021, the results of which were regularly shared

with the Board of Directors.

The evolution of the Group’s financial situation was closely monitored, with a focus on cash ﬂow management (reduction of costs, reduction of Capex,

working capital requirement).

During 2021, article 7:96 of the Code of Companies and Associations, relating to conﬂict of interests, was applied by the Board of Directors on

February 23, 2021, in relation to decisions regarding the CEO’s remuneration:

Prior to any discussion or decision by the Board on this agenda item, Ilham Kadri declared that she had a direct financial interest in the implementation

of the Board's decisions regarding her ex-2020 Bonus and 2021 remuneration.

In accordance with Article 7:96 of the Companies and Associations Code, Ilham Kadri withdrew so as not to be present during the Board's deliberations

on this decision and not to take part in the vote.

The Board established that Article 7:96 of the Companies and Associations Code was applicable to this decision.

The Board had an exchange on the evaluation of the CEO's performance in 2020, and on the score attributed to each of the individual and collective

objectives, which were unanimously approved.

In line with the recommendation of the Remuneration Committee, the Board set the CEO's STI 2020 (payable in 2021) at 147.4% of her Base Salary,

i.e. €1,695,100.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

101

The Board congratulated Mrs. I. Kadri on the results achieved in 2021.

The Board then had an exchange on the basis of market references and set the CEO's 2021 remuneration:

· Base Salary: €1,250k, +9%.

· Bonus: principles unchanged

· LTI: principles unchanged; amount of LTI 2021: €862.5k in SOP and €862.5k in PSU (amounts unchanged)

· Exceptional allocation of €250k in the form of PSUs

The Board noted that the CEO's 2021 objectives will be finalized and submitted to the Board for approval after the Board has approved the 2021

Budget, based on the recommendation of the Remuneration Committee.

3.1.4. Evaluation

Board performance evaluations are undertaken every two to three years with the objective of identifying how to improve the way it functions and

better follow best practice. Evaluations focus primarily on the Board composition, including diversity and skills considerations), functioning, disclosures

and interactions with executive management, and the composition and functioning of the Committees it creates.

The evaluation was carried out at the end of January 2020, and consisted of a questionnaire based on the evaluation process developed by Guberna

(Belgian Association for Governance). The responses were very similar, notably in relation to the execution and implementation of Solvay’s business

and sustainability strategy and on the cultural evolution of the Group. The interaction and way of working with the CEO and the Executive Leadership

Team was appreciated by all Directors. As an area of improvement, the Board agreed to dedicate more time to human capital, including talent

development, and innovation.

It is foreseen that a new evaluation will be carried out in the course of 2022.

3.1.5. Induction and continuous Board training

An Induction Program is in place for new Directors and open to every Director who wishes to participate. The program includes a review of the

Group’s strategy and activities and of the main challenges in terms of growth and competition, as well as finance, research and innovation, human

resources management, legal context, corporate governance and compliance.

Site visits are part of the Board’s Continuous Training Program, combining meetings with management and local teams, business presentations and

field tours. In 2021, a site visit was organized at our Tavaux site in France.

The Board is actively engaged on the topic of sustainability. Every year the Board of Directors dedicates a specific session to receiving updates

on various themes, so as to better understand the Group’s strengths and weaknesses, including on ESG topics, and to determine the impacts of

emerging trends on the Group’s business and performance. In addition, the new ESG Committee created by the Board in 2021 will oversee the

Group’s ESG strategy, policies, progress and effectiveness to help us seize ESG opportunities to create long-term value whilst minimizing risks.

3.2. Board committees

The Board of Directors has set up the following permanent Committees: Audit Committee, Finance Committee, Remuneration Committee,

Nominations Committee and ESG Committee.

The terms of all the various Committee members expire on May 10, 2022. The mandate of most members will be renewed, with the following changes.

· Subject to his appointment as director by the Shareholder’s Meeting of Tuesday, May 10, 2022, Mr. Pierre Gurdjian will join the Nomination

Committee and the Remuneration Committee.

· Subject to her appointment as director by the Shareholder’s Meeting of Tuesday, May 10, 2022, Ms. Laurence Debroux will join the Audit Committee.

· Mr. Edouard Janssen will join the Audit Committee in replacement of Mr. Hervé Coppens d’Eeckenbrugge (who shall retain his membership on the

Finance Committee).

Further to these renewals and changes, all mandate will expire in May 2024.

The mandate of most members will be renewed, with the following changes.

· Subject to his appointment as director by the Shareholder’s Meeting of Tuesday, May 10, 2022, Mr. Pierre Gurdjian will join the Nomination

Committee and the Remuneration Committee.

· Subject to her appointment as director by the Shareholder’s Meeting of Tuesday, May 10, 2022, Ms. Laurence Debroux will join the Audit Committee.

· Mr. Edouard Janssen will join the Audit Committee in replacement of Mr. Hervé Coppens d’Eeckenbrugge (who shall retain his membership on the

Finance Committee).

Further to these renewals and changes, all mandate will expire in May 2024.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

102

Independent

Director

Audit

Committee

Finance

Committee

Remuneration

Committee

Nomination

Committee

ESG

Committee

Mr. Nicolas Boël

Chairman

Attendance:

7/7

Chairman

Attendance:

4/4

Member

Attendance:

3/3

Ms. Ilham Kadri

Member

Attendance: 7/7

Member

Attendance

2/2

Mr. Bernard

de Laguiche

Member

Attendance:

4/4

Member

Attendance: 3/3

Mr. Charles-Casimir

Lambert

Member

Attendance: 7/7

Mr. Hervé Coppens

d'Eeckenbrugge

Member

Attendance:

6/6

Member

Attendance: 7/7

Ms. Evelyn

du Monceau

Member

Attendance:

1/2

Member

Attendance:

1/1

Ms. Françoise de Viron x

Member

Attendance:

3/4

Member

Attendance:

3/3

Member

Attendance

2/2

Ms. Amparo Moraleda

Martinez

Member

Attendance:

2/2

Chairwoman

Attendance:

1/1

Ms. Rosemary Thorne x

Chairwoman

Attendance:

6/6

Mr. Gilles Michel x

Member

Attendance: 7/7

Member

Attendance:

4/4

Member

Chairman

(1)

Attendance:

3/3

Ms. Marjan Oudeman x

Member

Attendance:

6/6

Ms. Agnès Lemarchand x

Member

Attendance:

1/4

Member

Attendance:

2/3

Member

Attendance

1/2

Mr. Matti Lievonen x

Member

Attendance:

6/6

Member

Attendance: 7/7

Member

(Chairman)

Attendance: 2/2

Mr. Philippe Tournay x

Member

Attendance:

6/6

Ms. Aude Thibaut

de Maisières

Member

(3)

Attendance:

2/2

Member

Attendance:

2/2

Member

Attendance 2/2

Mr. Edouard Janssen

Mr. Wofgang Colberg x

Member

(2)

Attendance

2/2

Member

Attendance

4/4

(1) Mr. Gilles Michel was appointed as Chairman of the Nomination Committee after the 2021 Shareholders’ Meeting (after the departure of

Ms. Amparo Moraleda Martinez)

(2) Mr. Wolfgang Colberg was appointed as a member of the Audit and Finance Committees after the departure of Mr. Bernard de Laguiche .

(3) Ms. Aude Thibaut de Maisières was appointed as a member of the Nomination and Remuneration Committees after the 2021 Shareholders’ Meeting.

3.2.1. The Audit Committee

Composition:

· Six members. All members are non-executive Directors, a majority of whom are independent.

· The members must fulfill the competency criterion by virtue of the training and the experience they gained in previous functions (see section 3.1.1.

regarding the composition of the Board of Directors).

· The Secretary is a member of the Group’s internal legal department.

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103

Meetings:

· Six meetings took place in 2021, including four before the Board meetings scheduled to consider the publication of periodic results (quarterly,

semiannual and annual).

· Meeting attendance was 100%.

Activities:

· Review and consider reports from the CFO, the Head of the Group Internal Audit, and the auditor in charge of the external audit (Deloitte,

represented by Mr. Michel Denayer and Ms. Corine Magnin).

· During the period under review, the Audit Committee reviewed the independence and effectiveness of the external auditor, Deloitte.

· Examine the quarterly report by the Group General Counsel on significant ongoing legal disputes and reports on tax and intellectual property

disputes.

· Meet with the auditor in charge of the external audit whenever such a meeting is deemed useful.

· Monitor and assess risk exposure as well as the effectiveness of internal controls and mitigation plans.

· Meet once a year with the Chairman of the Executive Leadership Team and CEO. All other Board members are also invited on this occasion, to

discuss the major risks facing the Group.

3.2.2. The Finance Committee

Composition:

· Six non-executive Directors and the CEO.

· Mr. Karim Hajjar (CFO) is invited to attend Finance Committee meetings.

· The Secretary is the Group Corporate Secretary.

Meetings:

· The Finance Committee met seven times in 2021.

· Meeting attendance was 100%.

Activities:

· Gives an opinion on financial matters. These include the amount of the interim and final dividends, the levels, conditions and currencies of

indebtedness, monitoring of the credit strength of the 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.

· Finalizes preparation of press releases announcing the Group’s results.

· Gives opinions on Board policies on the above matters, when called upon.

3.2.3. The Remuneration Committee

Composition:

· Five members. All members are non-executive Directors, a majority of whom are independent.

· The Remuneration Committee has the expertise necessary to perform its mission.

· The Chairwoman of the Executive Leadership Team is invited to meetings, except in the case of matters that concern her personally.

· The Secretary is the Group Corporate Secretary.

Meetings:

· Meetings are prepared by the Group’s Chief People Officer, who attends the meetings.

· The Remuneration Committee met four times in 2021.

· Meeting attendance was 82,14%.

Activities:

The Compensation Committee fulfills the duties imposed on it by Article 7:100 of the Code of Companies and Associations. It advises the Board of

Directors on:

· The preparation of the Company’s remuneration policy and remuneration report

· Remuneration levels for members of the Board of Directors and the Executive Leadership Team

· Remuneration, short- and long-term incentives and the performance assessment for the Chairwoman of the Executive Leadership Team

· The allocation of long-term incentives (performance share units and stock options) to the Company’s senior management

· While fulfilling its tasks, the Remuneration Committee reviews the feedback received from shareholders on the Company’s remuneration practices

and disclosures. It prepares the annual remuneration report for the Corporate Governance Statement and receives a yearly report about the

compensation of Management.

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104

3.2.4. The Nomination Committee

Composition:

· All members are non-executive Directors, a majority of whom are independent.

· The Chairwoman of the Executive Leadership Team is invited to meetings, except in the case of matters that concern her personally.

· The Secretary is the Group Corporate Secretary.

Meetings:

· Three meetings were held in 2021.

· Meeting attendance was 95,23%.

Activities:

The Nomination Committee leads the composition review and the nomination process for any proposed appointment or renewal of appointments

to the Board of Directors (chairman, new members, renewals and committees), to Executive Leadership Team positions (chairman and members) and

to general management positions. It recommends suitable director candidates to the Board of Directors.

In 2021, taking into account the results of the externally facilitated Board evaluation process and the succession plans, the Nomination Committee

reviewed the composition of the Board of Directors to ensure that the relevant skills and experience are represented to help oversee Solvay’s

long-term strategy whilst ensuring continuity and stability. The Nomination Committee also took into account gender diversity requirements when

reviewing the Board composition. The committee assessed the profile of several candidates and such review was facilitated by an external consultant

search firm. The Nomination Committee also took into account the feedback from shareholders regarding the composition of the Board and its key

Committees.

This review by the Nominations Committee resulted in the unanimous proposal of the Board to the AGM for mandate renewals and new Board

members.

3.2.5. The Environmental, Social and Governance (ESG) Committee:

· The ESG Committee comprises five members, including the CEO and non-executive Directors.

· The majority are independent Directors.

· The Secretary is the Group Corporate Secretary.

Meetings:

· The ESG Committee meets two times per year, with one of these meetings including the full Board of Directors.

· Meeting attendance was 90 % in 2021.

Activities:

· The objective of the ESG Committee is:

- a) to consider the material ESG issues relevant to the Group’s business activities;

- b) to provide guidance and recommendations to the Board of Directors on these issues, including in the context of the implementation

and potential review of the Solvay One Planet sustainability strategy and the Group’s non-financial reporting;

- c) to be in line with the new Corporate Sustainability Reporting Directive (CSRD), when applicable.

· The ESG Committee oversees an annual review of the Group’s ESG policies, progress and effectiveness, taking into account:

- a) relevant risk & opportunity mapping;

- b) the new sustainability developments, and their impact on the Group;

- c) the Group’s current sustainability performance, and main strengths and challenges;

- d) future priorities, opportunities and challenges in this respect.

· The results of the Committee’s annual review shall be presented to the entire Board and include the following:

- Environmental topics, including climate-related risk mitigation, legacy environmental risks and regulatory developments, especially in the

chemical sector.

- Social topics, including the health, welfare, and careers of Solvay’s employees, contractors, suppliers and the broader communities where

we operate.

- Governance topics, including oversight of the integration of our ESG commitments into Solvay’s business activities and related internal

and external reporting, and the effectiveness of engagement with stakeholders, such as investors, agencies, experts, proxy advisors and

communities, on ESG-related matters. When appropriate, the ESG Committee will also collaborate with other Committees with oversight

responsibility for executive remuneration, talent management, compliance and other shared topics.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

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105

4. EXECUTIVE LEADERSHIP TEAM

The role, responsibilities, composition, procedures and evaluation of the Executive Leadership Team are described in detail in the Charter.

To accelerate our GROW transformation, the ELT decided the creation of an Operational Leadership Team comprised of heads of businesses,

the combination of certain businesses and additional simplification with 17 distinct functions being grouped into 7. These changes reinforce the

accountability of the senior leadership team and will simplify and speed up decision making.

✪ Year of first appointment  Presence at ELT meetings in 2021

ILHAM KADRI

French-Moroccan / Born in: 1969

✪ 2019  11/11

Term of office ends: 2023

Diplomas and main Solvay activities:

Degree in chemical engineering from l’Ecole des Hauts

Polymères in Strasbourg, PhD in macromolecular physico-

chemistry from Strasbourg’s Louis Pasteur University.

Chairwoman of the Executive Leadership Team

and CEO

VINCENT DE CUYPER

Belgian / Born in: 1961

✪ 2006  4/4

End of office: June 2021

Diplomas and main Solvay activities:

Chemical engineering degree (Catholic University of Leuven).

Master’s in Industrial Management (Catholic University of

Leuven). AMP Harvard.

Executive Leadership Team member

KARIM HAJJAR

British / Born in: 1963

✪ 2013  11/11

Term of office ends: 2023

Diplomas and main Solvay activities:

BSC (Hons) Economics (The City University, London). Chartered

Accountancy (ICAEW) qualification

Executive Leadership Team member and CFO

HUA DU

Chinese / Born in: 1969

✪ 2018  3/3

End of office: April 2021

Diplomas and main Solvay activities:

BS Chemistry (Being University) PhD. Organic Chemistry

(University of Illinois, UrbanaChampaign)

Executive Leadership Team member

SOLVAY 2021 ANNUAL INTEGRATED REPORT

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106

AUGUSTO DI DONFRANCESCO

Italian / Born in: 1959

✪ 2018  11/11

Term of office ends: 2022

Diplomas and main Solvay activities:

Graduated from Pisa University with a Master’s degree in

Chemical Engineering, Senior Executive program from London

Business School. Member of the Plastics Europe steering

Board.

Executive Leadership Team member

HERVÉ TIBERGHIEN

French / Born in: 1964

✪ 2019  11/11

Term of office ends: 2023

Diplomas and main Solvay activities:

Master in Human Resources, HEC St Louis, Brussels, Belgium

Executive Leadership Team member and Chief People Officer

DOMINIQUE GOLSONG

German / Born in: 1955

✪ 2021  8/8

Term of office ends: 2023

Diplomas and main Solvay activities:

LL.M in Law at Columbia Law School JD of Law at Université

de Lausanne

INSEAD YMP

Michigan University FMII

London Business School ADP

Executive Leadership Team member and Group General

Counsel & Corporate Secretary

* D. Golsong exercises his function via a SRL

MARC CHOLLET

Fench / Born in: 1964

✪ 2021  8/8

Term of office ends: 2023

Diplomas and main Solvay activities:

Engineer in Agronomy from the National Institute of Agro-

nomy Paris- Grignon. Specialization in Business Economics

& Marketing Management.

Executive Leadership Team member and Chief Strategy

Officer

During 2021, some changes occurred in the composition of the Executive Leadership Team.

· In April 2021, Mr. Hua Du left the Executive Leadership Team.

· At the end of June 2021, Mr. Vincent Decuyper left the Executive Leadership Team.

· In April 2021, Mr. Dominique Golsong and Mr. Marc Chollet became members of the Executive Leadership Team.

· On January 1, 2021, the Board of Directors renewed the mandate of Ms. Ilham Kadri for a two-year term.

· On September 1, 2021, the Board of Directors renewed the mandate of Mr. Hervé Tiberghien for a two-year term.

· On October 1, 2021, the Board of Directors renewed the mandate of Mr. Karim Hajjar for a two-year term.

· The Executive leadership Team carries out monthly deep-dives. consisting of in-depth reviews on People, Strategy, Finance, Innovation and other

specific topics, depending on current events.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

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107

5. REMUNERATION REPORT

5.1. Year in overview

In 2020 Solvay acted decisively to overcome the significant challenges resulting from the onset of the Covid-19 sanitary crisis, cutting costs, adapting

its capital investment plans and preserving its leading market positions thereby delivering record cash generation and profitability.

2021 was marked by a rapid resumption in demand, marred by significant dislocation in supply chains that constrained capacity and by exceptionally

strong cost inﬂationary headwinds that continue into 2022. These challenges tested Solvay’s teams to the fullest, and enabled us to show our strengths

as we accelerated the deployment of digital technologies to maximise production and by working diligently to meet our customers’ needs and

driving price increases in order to maintain margins. The focus on value creation also motivated us to resume our investment plans with discipline

and focused primarily on our high growth businesses.

The financial results that were delivered in 2021 exceeded all our expectations and indeed exceeded growth trends in a number of important end

markets as we leveraged on our unique technologies to deliver superior growth, always at the service of our customers.

Our organic EBITDA in 2021 reached an all-time record of €2.35Bn, a 27% increase compared to 2020, and an 8% increase compared to 2019 on a

like-for-like basis. This achievement is the combination of growth in the majority of markets, improved pricing power in the latter part of the year and

continued discipline and focus on cost reductions reaching €390m of structural savings in the period since 2019, significantly ahead of the €0.5Bn

promised by the end of 2024.

We were also able to accelerate investments, finishing the year at €736m Capex, in line with our indications, overcoming supply chain constraints in

the first half of 2021. Further, the focus on cash management was maintained and resulted in Free Cash Flow of €843m FCF and a class leading 38%

free cash ﬂow conversion.

The focus on returns also resulted in a record ROCE of 11.4%, reaching our mid-term guidance of exceeding 11%, a full three years earlier than

indicated in 2019. In short, 2021 can be credibly described as a year of significant progress in the group Transformation.

Finally and importantly, these results also reﬂect the dedication of Solvay’s employees, as none of that would have been possible without their

determination and engagement. Indeed, employees systematically and regularly provide feedback through pulse surveys using multiple channels. As

an example the Q3 pulse focused on engagement showed an overall engagement score of 80% for the Group, a record. These pulse surveys enable

Solvay managers to continually improve and embark employees on the Group’s transformation.

More details on our 2021 results and the impact of these on remuneration are disclosed in the relevant sections below.

Developing Solvay’s Employee Value Proposition (EVP)

Solvay has launched a number of programs aimed at supporting and empowering our employees. This includes the evolution of our Solvay Cares

benefit program, which now offers a global maternity/paternity & co-parent leave policy of 16 weeks for all new parents, regardless of gender and

orientation. Besides that Solvay started a global rollout of Employee wellbeing support program available to all employees and members of their

household (including children) easy, free and confidential access to mental health and other support services, like psychologist, legal, financial and

wellbeing (relating to nutrition, tobacco, mindfulness, parenting, etc.). Since the start of the pandemic, the Solidarity Fund has provided support

for employees and Solvay communities in need and in December 2021 we announced employee stock purchase program, aimed at increasing

employee alignment with Group performance and encouraging share ownership available to employees as of the second part of 2022.

In addition to other topics relating to remuneration, Solvay is excited to be among the very first to start discussions and hold a more open dialogue on

fair and equal pay in our Group. In addition to holding internal dialogue with our stakeholders, we are also disclosing the pay gaps in our organization.

This information can be found in section 6.3. Diversity and inclusion, as part of the Extra-financial statements of this report. From our 2022 report

onwards, we will communicate our progress in this area. We are committed to closing the gaps, and share plans as soon as possible.

Reinventing executive remuneration

In our journey to bond people, ideas and elements to reinvent progress, we are continuously striving to improve our governance practices, including

our approach to executive remuneration. The remuneration report of 2020 received lower shareholder support (87% compared to 95% the year

before). This lower level of support, based on our discussions with shareholders and proxy advisors, was primarily due to the discretion used by the

Remuneration Committee to adjust the bonus performance objectives in light of Covid-19. While the use of such discretion was considered a one-

off decision given Covid-19, the Remuneration Committee used such an opportunity to take a more holistic approach to review and strengthen our

Executive Remuneration Policy.

The revised policy, which is being put to a vote at the 2022 general shareholders meeting, takes into account the evolving legal, compliance and

regulatory framework and most importantly the feedback gathered through our continuous dialogue with our key stakeholders, namely shareholders,

investors, proxy advisors and independent advice from executive remuneration consultants.

The key policy changes we have made enhance alignment with shareholder value creation, strengthen the pay-for-performance model, reinforce the

link between executive remuneration and the interests of shareholders through the provision of shares and introducing share ownership requirements

for both Non-Executive Directors and ELT Members. The new policy will become effective following approval, if given, from our shareholders in May

2022.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

108

5.2. Remuneration of the board of directors

Solvay SA Directors are remunerated, in line with our Remuneration Policy, with fixed emoluments, the common basis for which is set at the Ordinary

Shareholders’ Meeting, with any addition to this decided by the Board of Directors. This process is based on Article 26 of our articles of association,

which states that:

· “Directors shall receive fixed emoluments payable; the Shareholders’ Meeting shall determine the amount and terms of payment”;

· “That decision shall stand until another decision is taken”;

· “The Board of Directors shall be authorized to grant Directors with special duties, different from their Director’s mandate, fixed emoluments in

addition to those provided for in the above paragraph”;

· “Each of the Directors responsible for day-to-day management and ELT Member, are also entitled to variable remuneration determined by the

Board of Directors on the basis of their individual results and of the consolidated results of the Solvay Group”.

5.2.1. Board of Directors individual remuneration

The Ordinary Shareholders’ Meetings of June 2005 and May 2012, which introduced member and attendance fees respectively, approved Directors’

pay to be set as follows, starting from the financial year 2005:

Board fees by type Gross amount

Annual gross fixed remuneration €35,000

Board Meeting attendance fee €4,000

Audit Committee Chairman attendance fee €6,000

Audit Committee Member attendance fee €4,000

Remuneration, Nominations, ESG and Financial Committee Chairman attendance fee €4,000

Remuneration, Nominations, ESG and Financial Committee Member attendance fee €2,500

· Directors sitting on both the Remuneration Committee and the Nominations Committee do not receive double remuneration if the meetings

happen on the same date.

· No attendance fees for the Chairman of the Board, the Chairman of the Executive Committee and the Executive directors taking part in these

committees.

· For the Chairman of the Board, the Board of Directors used its authorization under Article 24 of our articles of association to grant an additional

yearly fixed remunerationcompensation of €250,000 gross, unchanged since 2012.

· Non-executive Directors do not receive any other remuneration. More specifically, non-executive 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 through the provision of an office, use of the General Secretariat and a car 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 carrying out their duties.

Solvay acknowledges that the 2020 Belgian Code of Corporate Governance (the “Code”) recommends partial remuneration of our Board Members

in shares, and that our policy does not provide for this. The Remuneration Committee considers that the current Remuneration Policy remains

relevant, and is aligned with Solvay’s long-term strategy and Belgian market practice.

The Remuneration Committee frequently reviews Solvay’s Remuneration Policy and market practices. Any changes to the policy with regard to

remuneration of the Board will be submitted to our shareholders and only be implemented following shareholder consent.

Reﬂecting the Board’s particular engagement and interest in sustainability issues, which are central to all key decisions made at Board level, we

established an ESG Committee. This new Board Committee is responsible for overseeing the Group’s ESG policies, progress and effectiveness and

ensuring that we are able to make the most of ESG opportunities that could create long-term value. More on this can be found in the Governance

section of this report.

In 2021 the Remuneration Committee has not made any changes to the remuneration packages for the Board of Directors since 2012. In 2022 Share

ownership guideline requirements to be introduced for the Directors together with other changes proposed in Executive Remuneration policy as

indicated and explained in the section 5.1. Year in review of this report.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

109

5.2.2. Amount of the remuneration and other benefits granted directly or indirectly to the members of the Board

by the Company or by an affiliated company

GROSS REMUNERATION AND OTHER BENEFITS GRANTED TO DIRECTORS

In €

2021 2020

Total

gross

amount

including

fixed at-

tendance

and com-

mittee

fees

Board

fixed

remune-

ration

Board

meeting

atten-

dance

rate

For the

role in

Finance

Com-

mittee-

For the

role in

Audit

Com-

mittee

For the

role in

Remune-

ration

and

Nomina-

tion Com-

mittee

For the

role in

ESG

Com-

mittee

Total

gross

amount

including

fix fees

Board of

Directors

and Com-

mittees

atten-

dance

fees

N. Boël

Fixed

emoluments +

attendance fees

75,000 35,000 40,000 - - - - 75,000 40,000

“Article 24”

supplement

250,000 - - - 250,000

Ilham Kadri 75,000 35,000 40,000 - - - - 75,000 40,000

Casimir-Lambert

92,500 35,000 40,000 17,500 - - - 94,500 59,500

H. Coppens

d’Eeckenbrugge

116,500 35,000 40,000 17,500 24,000 - - 118,000 83,000

F. de Viron 86,000 35,000 36,000 - - 10,000 5,000 87,500 52,500

R. Thorne 111,000 35,000 40,000 - 36,000 - - 117,000 82,000

G. Michel 108,000 35,000 40,000 17,500 - 15,500 - 102,500 67,500

M. Oudeman 104,000 35,000 40,000 - 24,000 - 5,000 103,000 68,000

A. Lemarchand 57,500 35,000 20,000 - - 2,500 - 93,000 58,000

P. Tournay 99,000 35,000 40,000 - 24,000 - - 91,000 56,000

M. Lievonen 124,500 35,000 40,000 17,500 24,000 - 8,000 103,500 68,500

A. Thibaut de

Maisières

87,500 35,000 40,000 - - 7,500 5,000 46,222 24,000

du Monceau

(1)

15,000 12,500 - - - 2,500 - 86,000 51,000

A. Moraleda

(1)

39,000 12,500 20,000 - - 6,500 - 96,000 61,000

W.Colberg

(2)

60,500 22,500 20,000 10,000 8,000 - - - -

E.Janssen

(2)

42,500 22,500 20,000 - - - - - -

de Laguiche

(3)

77,087 25,587 28,000 7,500 16,000 - - 118,000 83,000

Total 1, 620,587 515,587 544,000 87,500 156,000 44,500 23,000 1,656,222 894,000

(1) E. du Monceau, A. Moraleda until May 11th, 2021

(2) W. Colberg, E. Janssen from May 11

, 2021

(3) B. de Laguiche until September 24th, 2021

5.3. Remuneration of the Executive Leadership Team (ELT)

5.3.1. Solvay’s remuneration philosophy and policy

Solvay’s Remuneration Policy aims to ensure that Solvay Executives are rewarded for their contribution to the execution of Solvay’s long-term strategy

according to their role, responsibilities and performance.

The remuneration structure is designed in line with the following principles, which apply equally to the ELT Members, other senior executives:

· 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.

· Short- and long-term variable remuneration is tied directly to the achievement of strategic objectives, including driving sustainable performance,

and recognizes excellent results once delivered.

· Remuneration decisions are compliant and equitable, and balance cost and value appropriately.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

110

In alignment with the Remuneration Policy, remuneration of the ELT Members is benchmarked against that of our peer group. This group remains the

same as for the previous reporting period and includes the following companies:

Long-Term Incentive

Short-Term Incentive

Benefits

Fixed base

remuneration

100%

I.Kadri

29%

42%

43%

30%

27%

41%

28%

31%

35%

25%

40%

24%

36%

22%

42%

K. Hajjar A. Di Donfrancesco

PAY MIX OF THE ELT MEMBERS

H. Tiberghien M. Chollet D. Goslong

75%

50%

25%

LTI STI Fixed base

Competitive

to relevant peers

to:

Attract, retain

and

motivate high

calibre

executives

~55%

of total as variable

remuneration

with upwards opportunity

for outperformance

~45%

of total as fixed

remuneration

Aligned with shareholder interests

Results driven

Aligned with our short, mid- and

long-term strategy,

objectives and aspirations

Reﬂection of Pay

for performance principle

Reﬂects experience, skills,

responsibilities and contribution

and is reﬂection of Solvay's reward

principle of Meritocracy

Set around the median of

the market and is a reﬂection of Solvay’s

principle of Care

LTI STI Fixed base

REMUNERATION OPPORTUNITY OF THE ELT MEMBERS

(full year with incentives at targets) in million of euros

€1.89

K. Hajjar

0.82

0,50

0.57

€1.62

A. Di Donfrancesco

0.66

0.50

0.46

€1.24

H. Tiberghien

0.44

0.50

0.30

€1.17

M. Chollet

0.42

0.50

0.25

D. Goslong

€1.10

0.44

0.40

0.26

I.Kadri

€4.37

1.25

1.87

Long-Term Incentive

Short-Term Incentive

Benefits

Fixed base

remuneration

100%

I.Kadri

29%

42%

43%

30%

27%

41%

28%

31%

35%

25%

40%

24%

36%

22%

42%

K. Hajjar A. Di Donfrancesco

PAY MIX OF THE ELT MEMBERS

H. Tiberghien M. Chollet D. Goslong

75%

50%

25%

LTI STI Fixed base

Competitive

to relevant peers

to:

Attract, retain

and

motivate high

calibre

executives

~55%

of total as variable

remuneration

with upwards opportunity

for outperformance

~45%

of total as fixed

remuneration

Aligned with shareholder interests

Results driven

Aligned with our short, mid- and

long-term strategy,

objectives and aspirations

Reﬂection of Pay

for performance principle

Reﬂects experience, skills,

responsibilities and contribution

and is reﬂection of Solvay's reward

principle of Meritocracy

Set around the median of

the market and is a reﬂection of Solvay’s

principle of Care

LTI STI Fixed base

REMUNERATION OPPORTUNITY OF THE ELT MEMBERS

(full year with incentives at targets) in million of euros

€1.89

K. Hajjar

0.82

0,50

0.57

€1.62

A. Di Donfrancesco

0.66

0.50

0.46

€1.24

H. Tiberghien

0.44

0.50

0.30

€1.17

M. Chollet

0.42

0.50

0.25

D. Goslong

€1.10

0.44

0.40

0.26

I.Kadri

€4.37

1.25

1.87

Air Liquide

DSM

Rolls Royce

BASF

Johnson Matthey

Umicore

BAE Systems

Evonik

Saint Gobain

Bayer

Lanxess

Valero SA

Covestro

Michelin

Vallourec

Solvay aims to position our remuneration levels at or around the relevant market median for the Total Cash Target (the sum of fixed base remuneration

and variable pay target) and benefits.

In summary key principles of our remuneration policy are as follows:

5.3.2. Remuneration opportunities and pay mix of the CEO and ELT Members as on December 31, 2021

Following the guidelines of the Executive remuneration disclosure, find below pay mix of the ELT members as at the end of the reporting period that

displays “at target” mix of Total direct remuneration package.

Long-Term Incentive

Short-Term Incentive

Benefits

Fixed base

remuneration

100%

I.Kadri

29%

42%

43%

30%

27%

41%

28%

31%

35%

25%

40%

24%

36%

22%

42%

K. Hajjar A. Di Donfrancesco

PAY MIX OF THE ELT MEMBERS

H. Tiberghien M. Chollet D. Goslong

75%

50%

25%

LTI STI Fixed base

Competitive

to relevant peers

to:

Attract, retain

and

motivate high

calibre

executives

~55%

of total as variable

remuneration

with upwards opportunity

for outperformance

~45%

of total as fixed

remuneration

Aligned with shareholder interests

Results driven

Aligned with our short, mid- and

long-term strategy,

objectives and aspirations

Reﬂection of Pay

for performance principle

Reﬂects experience, skills,

responsibilities and contribution

and is reﬂection of Solvay's reward

principle of Meritocracy

Set around the median of

the market and is a reﬂection of Solvay’s

principle of Care

LTI STI Fixed base

REMUNERATION OPPORTUNITY OF THE ELT MEMBERS

(full year with incentives at targets) in million of euros

€1.89

K. Hajjar

0.82

0,50

0.57

€1.62

A. Di Donfrancesco

0.66

0.50

0.46

€1.24

H. Tiberghien

0.44

0.50

0.30

€1.17

M. Chollet

0.42

0.50

0.25

D. Goslong

€1.10

0.44

0.40

0.26

I.Kadri

€4.37

1.25

1.87

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

111

Name,

Position

Variable Remuneration

Fixed

Remuneration

(on a

comparable full

year basis)

Value

measure-

ment

Short Term

Incentive

Target

LTI target

issued as

Performance

Share Units

LTI target

issued as

Stock

Options

Total LTI

Value

Total Direct

Remuneration /

Pay mix

Ilham Kadri

CEO and

Chairman of the

ELT

€1,250,000

Amount €1,250,000 €937,500 €937,500 €1,875,000 €4,375,000

% of Salary 100% 75% 75% 150% Fixed 30% / Variable 70%

Karim Hajjar

CFO and ELT

Member

€822,650

Amount €575,855 €250,000 €250,000 €500,000 €1,898,505

% of Salary 70% 30% 30% 61% Fixed 40% / Variable 60%

Augusto Di

Donfrancesco

ELT Member

€660,000

Amount €462,000 €250,000 €250,000 €500,000 €1,622,000

% of Salary 70% 38% 38% 76% Fixed 40% / Variable 60%

Hervé Tiberghien

ELT Member

€436,980

Amount €305,886 €250,000 €250,000 €500,000 €1,242,866

% of Salary 70% 57% 57% 114% Fixed 35% / Variable 65%

Marc Chollet

ELT Member (from

01.04.2021)

€420,000

Amount €252,000 €160,000 €160,000 €320,000 €992,000

% of Salary 60% 38% 38% 76% Fixed 40% / Variable 60%

Dominique

Golsong

ELT Member (from

01.04.2021)

€440,640

Amount €264,384 €160,000 €160,000 €320,000 €1,025,024

% of Salary 60% 36% 36% 73% Fixed 40% / Variable 60%

5.3.3. Base remuneration and Benefits

Fixed base remuneration

Fixed base remuneration reﬂects an individual’s experience, skills, duties, responsibilities, contribution and role within the Group. It is reviewed

annually and may be adjusted, taking into consideration a number of factors, including:

· (1) comparable salaries in appropriate comparator groups;

· (2) changes within the scope of the role;

· (3) changes in the Group’s size and profile;

· (4) 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 5.3.2. and 5.3.4. of this report.

Pension and other benefits for the CEO

In accordance with Belgian legal requirements, the CEO has a separate contractual agreement, given her self-employed status in Belgium. This

includes pension, death-in-service and disability provision. The CEO also receives a company car in line with market practice in Belgium.

Long-Term Incentive

Short-Term Incentive

Benefits

Fixed base

remuneration

100%

I.Kadri

29%

42%

43%

30%

27%

41%

28%

31%

35%

25%

40%

24%

36%

22%

42%

K. Hajjar A. Di Donfrancesco

PAY MIX OF THE ELT MEMBERS

H. Tiberghien M. Chollet D. Goslong

75%

50%

25%

LTI STI Fixed base

Competitive

to relevant peers

to:

Attract, retain

and

motivate high

calibre

executives

~55%

of total as variable

remuneration

with upwards opportunity

for outperformance

~45%

of total as fixed

remuneration

Aligned with shareholder interests

Results driven

Aligned with our short, mid- and

long-term strategy,

objectives and aspirations

Reﬂection of Pay

for performance principle

Reﬂects experience, skills,

responsibilities and contribution

and is reﬂection of Solvay's reward

principle of Meritocracy

Set around the median of

the market and is a reﬂection of Solvay’s

principle of Care

LTI STI Fixed base

REMUNERATION OPPORTUNITY OF THE ELT MEMBERS

(full year with incentives at targets) in million of euros

€1.89

K. Hajjar

0.82

0,50

0.57

€1.62

A. Di Donfrancesco

0.66

0.50

0.46

€1.24

H. Tiberghien

0.44

0.50

0.30

€1.17

M. Chollet

0.42

0.50

0.25

D. Goslong

€1.10

0.44

0.40

0.26

I.Kadri

€4.37

1.25

1.87

Long-Term Incentive

Short-Term Incentive

Benefits

Fixed base

remuneration

100%

I.Kadri

29%

42%

43%

30%

27%

41%

28%

31%

35%

25%

40%

24%

36%

22%

42%

K. Hajjar A. Di Donfrancesco

PAY MIX OF THE ELT MEMBERS

H. Tiberghien M. Chollet D. Goslong

75%

50%

25%

LTI STI Fixed base

Competitive

to relevant peers

to:

Attract, retain

and

motivate high

calibre

executives

~55%

of total as variable

remuneration

with upwards opportunity

for outperformance

~45%

of total as fixed

remuneration

Aligned with shareholder interests

Results driven

Aligned with our short, mid- and

long-term strategy,

objectives and aspirations

Reﬂection of Pay

for performance principle

Reﬂects experience, skills,

responsibilities and contribution

and is reﬂection of Solvay's reward

principle of Meritocracy

Set around the median of

the market and is a reﬂection of Solvay’s

principle of Care

LTI STI Fixed base

REMUNERATION OPPORTUNITY OF THE ELT MEMBERS

(full year with incentives at targets) in million of euros

€1.89

K. Hajjar

0.82

0,50

0.57

€1.62

A. Di Donfrancesco

0.66

0.50

0.46

€1.24

H. Tiberghien

0.44

0.50

0.30

€1.17

M. Chollet

0.42

0.50

0.25

D. Goslong

€1.10

0.44

0.40

0.26

I.Kadri

€4.37

1.25

1.87

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

112

Pension and other benefits for ELT Members

The ELT Members that perform their duties on the basis of a work contract are entitled to pension, death-in-service and disability benefits based

on the provisions of the plans applicable in their home countries. ELT Members who do not have a work contract receive remuneration payment of

management fees only.

Other benefits, such as medical plans and company cars or car allowances, are also provided, according to local policies. We aim to ensure that the

nature and level of these other benefits are in line with median market practice and other Executives in the Group.

5.3.4. Short- and Long-Term variable play

2021 Short-Term Incentive (STI) plan

As approved at the 2020 Annual Shareholders Meeting, the Short-Term Incentive plan (STI) provides a cash opportunity that is based solely on the

achievement of pre-set performance targets. The target opportunity provided by the STI plan for the CEO is 100% of fixed base remuneration, with

a maximum of 150% of the target. For the other ELT Members the target is up to 70% of fixed base remuneration, with a maximum of 200% of the

target (or 140% of fixed base remuneration).

The STI plan uses two performance categories:

· Group performance (60% for the CEO; 70% for other ELT Members).

· Individual performance (40% for the CEO; 30% for other ELT Members).

Considering the role and expectations relating to external and internal stakeholders, the weight of individual performance is slightly higher for the

CEO than for the other ELT Members.

Individual performance is measured against predetermined non-financial, quantitative and qualitative objectives. These are defined by the Board of

Directors for the CEO and then cascaded down to other Executives by the CEO. The CEO assesses the achievement of individual objectives by the

ELT Members, and this assessment is thenreviewed and validated by the Board of Directors. The individual performance of the CEO is assessed by

the Remuneration Committee, and this is then reviewed and validated by the Board of Directors. Details of the individual performance of the CEO,

including targets and their achievement, are explained below, right after the assessment of the Groups performance for the 2021.

Group performance 2021

The Group’s 2021 performance results are:

Climate

GreenHouse Gas (GHG)

emissions (current scope Mt)

% of sustainable solutions

in sales(constant rules)

Freshwater withdrawal

Industrial wastes

without valorization

Dimension of One Planet Result

Total One Planet Score

Min. Target Max.

Resources

Reportable injuries

& illness per 200,000 h

% of women managers

S19+

Better Life

60%

100%

200%

80%

88%

90%

10.8Mt11.3Mt 10.3Mt

78Kt82Kt 72Kt

58Kt

Min. Max.Target

0.340.37 0.31

0.43

25.6%24.6% 27.1%

52% 55%53%

314.6Mm

325Mm

300Mm

Min.

Max.Target

Min. Max.Target

315.4Mm

Underlying EBITDA

organic growth

Free cash ﬂow

conversion

Result for STI

payout calculationMin. Target Max.

Solvay One Planet

200%

155%

88%

11%5% 17%

27%

30% 40%35%

At 2019 level

of achievement

Improvement

compared to 2019

Significant improvement

compared to 2019

Min.

Max.Target

Min. Max.Target

25.0%

Actual

Actual performance

38%

11Mt

Note: figures do not include the changes of methodologies that occurred after the definition of the STI target

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

113

Climate

GreenHouse Gas (GHG)

emissions (current scope Mt)

% of sustainable solutions

in sales(constant rules)

Freshwater withdrawal

Industrial wastes

without valorization

Dimension of One Planet Result

Total One Planet Score

Min. Target Max.

Resources

Reportable injuries

& illness per 200,000 h

% of women managers

S19+

Better Life

60%

100%

200%

80%

88%

90%

10.8Mt11.3Mt 10.3Mt

78Kt82Kt 72Kt

58Kt

Min. Max.Target

0.340.37 0.31

0.43

25.6%24.6% 27.1%

52% 55%53%

314.6Mm

325Mm

300Mm

Min.

Max.Target

Min. Max.Target

315.4Mm

Underlying EBITDA

organic growth

Free cash ﬂow

conversion

Result for STI

payout calculationMin. Target Max.

Solvay One Planet

200%

155%

88%

11%5% 17%

27%

30% 40%35%

At 2019 level

of achievement

Improvement

compared to 2019

Significant improvement

compared to 2019

Min.

Max.Target

Min. Max.Target

25.0%

Actual

Actual performance

38%

11Mt

Climate

GreenHouse Gas (GHG)

emissions (current scope Mt)

% of sustainable solutions

in sales(constant rules)

Freshwater withdrawal

Industrial wastes

without valorization

Dimension of One Planet Result

Total One Planet Score

Min. Target Max.

Resources

Reportable injuries

& illness per 200,000 h

% of women managers

S19+

Better Life

60%

100%

200%

80%

88%

90%

10.8Mt11.3Mt 10.3Mt

78Kt82Kt 72Kt

58Kt

Min. Max.Target

0.340.37 0.31

0.43

25.6%24.6% 27.1%

52% 55%53%

314.6Mm

325Mm

300Mm

Min.

Max.Target

Min. Max.Target

315.4Mm

Underlying EBITDA

organic growth

Free cash ﬂow

conversion

Result for STI

payout calculationMin. Target Max.

Solvay One Planet

200%

155%

88%

11%5% 17%

27%

30% 40%35%

At 2019 level

of achievement

Improvement

compared to 2019

Significant improvement

compared to 2019

Min.

Max.Target

Min. Max.Target

25.0%

Actual

Actual performance

38%

11Mt

· Financial performance in 2021 was strong, with a record level of profit achieved and cash generation ahead of target. More information can be found

in the Performance review section of the Annual report.

· At first glance, our Solvay One Planet sustainability performance could be perceived as disappointing. However, it should be noted that we raised

the bar significantly, setting ambitious targets that go beyond the Paris agreement commitments. Our 2021 performance in this area is mixed and

consideration of the context is important. Further details and disclosures on this subject can be found in the Extra-financial statements of Annual

report.

Individual performance of the CEO for STI calculation

With individual performance counting for 40% of the total STI opportunity for the CEO, it plays a significant role in determining the overall assessment

and payout. The Board and Remuneration Committee both sets these objectives and tracks their achievement.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

114

For the performance year 2021, the Board of Directors has set and assessed following key objectives for the CEO:

Category Objective Key initiatives delivered as part of the objective Achievement

Strategy

15%

Define Solvay 2030-50 vision

Target: Finalization of 2030 roadmap

Extra achievement:

· Portfolio evolution with alignment with the strategy and future

opportunities

· further deployment of One Planet agenda and introduction of CO

neutrality roadmap

180%

Deploy and execute the

G.R.O.W strategy

Target:

· Deployment of Value Creation Plans of the segments in alignment with

G.R.O.W. strategy

Extra achievement:

· Acceleration of technological growth platforms

· Definition and deployment of Digital and Cyber Security roadmaps

· Rollout of Fuel For Growth program and mindset

· Launch of the new GreenHydrogen Platform

· Design and Execute systemic pricing initiatives

190%

Organization

15%

Diffuse the Enterprise leadership

culture

Target:

· Further deploy "at your best behaviors", role modeling values

andethics

· Embedding passion for excellence and performance

Extra achievement:

· Strengthening senior leadership team and introduction of a new Group-

wide operating model

180%

Define and deploy the Human

capital strategy

Target:

· Deployment of new Talent management processes

· Introduction of robust succession management processes for critical

positions

Extra achievement:

· Definition and roll-out of Diversity, Equity and Inclusion roadmap

through introduction of One Dignity and set of measurable objectives

· Extension of Solvay Cares program with Introduction and deployment

of Global Employee Wellbeing program and maternity / paternity &

co-parent leave

· Definition Future Top Leaders model and in-depth talent assessment

model of “TOP100”

· Definition of Global employee share purchase plan set for roll-out in

2022

180%

Others

10%

· Representation of the Group

Target: effective internal and external stakeholder engagement

Extra achievement:

· Fostering social dialogue with employees and broader society through

One Planet, Solvay Cares, One Dignity, Solvay Solidarity Fund and

other initiatives

200%

Total 40%

ofSTI

Final individual performance score: 187%

Overall performance of the CEO is recognized as exceptional, far exceeding the expectations for the year, recognizing that the payout of STI is

capped at 150%.

STI payout amounts with consideration of performance of the Group and Individual performance of each ELT member fo the results achieved in 2021

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 of

this report.

Long-term incentive (LTI)

Long-term incentive grants for the ELT Members were offered according to the current Remuneration Policy, using a mix of Stock Options (SOP) and

cash-settled Performance Share Units (PSU).

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

115

Long-term Incentive award opportunity

The CEO has an LTI grant target of 150% of fixed base remuneration, with a maximum of 200%. For all other ELT Members, the grant target value is

set at €500,000, with a maximum of €750,000.

The actual annual grant value, within the limits of the policy, is determined and approved by the Board of Directors.

Stock options (SOP)

Under Belgian law, unlike most other jurisdictions, taxes on stock options are due at the time of grant. Solvay, like other Belgian companies, therefore

sets no additional performance criteria for determining the vesting of stock options. The options have a vesting period of over three 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.

The SOP gives each beneficiary the right to buy Solvay shares at a strike price corresponding to the fair market value of the shares upon grant. Every

year, the Board of Directors determines the volume of stock options available for distribution, based on an assessment of the economic fair value at

grant using the Black Scholes valuation formula. The total volume of options available is subsequently allocated to the eligible population.

SOP features:

· Options are granted at the money (or fair market) value.

· Options become exercisable for the first time three full calendar years after they are granted.

· Options have a maximum term of eight years.

· Options are not transferable inter vivos.

· The plan includes a bad leaver clause.

Performance Share Units (PSUs)

Our PSUs are aligned with typical market practices, allowing Solvay to remain competitive in attracting, retaining and motivating key Executives,

aligning interests with shareholders and encouraging a pay for performance mindset.

The PSUs are cash-settled and vest three years from the date of grant, as long as certain, pre-set performance objectives are met. The payout varies

from a minimum of zero, if the minimum target is not met, to a maximum payout of 120%, if the maximum target is achieved.

Every year, the Board of Directors determines the budget available for distribution based on the 30 days average closing preceding the grant date of

Solvay’s share price on the Euronext. The total volume of PSUs available is subsequently allocated to the eligible population.

PSU features:

· The plan is purely cash-based and does not encompass any transfer of shares to beneficiaries.

· The vesting of awards is based on meeting pre-set performance targets (see below).

· The performance period is three years.

· An employment condition applies.

· The plan has a claw back provision for a period of three years after the payout, in case of erroneous results.

· The payout is based on the value of Solvay shares after the vesting.

· Dividends accrue only in respect of vested awards and are paid at the end of the performance period.

The Board of Directors assesses the achievement of the targets set, based on the audited results of the Group. They may use discretion to re-evaluate

the targets in exceptional situations. Where such discretion is applied by the Remuneration Committee, the rationale for the use of such discretion

will be disclosed. Additionally, discretion, if used, is subject to the award limit stated under the Executive Remuneration Policy. The Remuneration

Committee has not applied such discretion in the recent past.

Claw back provisions in respect of PSU plan

Solvay has the right to claim reimbursement of undue amounts paid in accordance with the plan from any PSU plan participant, during a period of

three years from the date of the payment, on the basis of erroneous results that were subsequently adjusted or corrected. This claw back clause has

not been applied in the recent past.

2018-2020 LTI Performance Share Unit plan performance results

The results of the PSU grant of 2018 were calculated and paid in June 2021, based on a three-year performance period ending on December 31, 2020.

As 2020 was heavily impacted by the Covid-19 pandemic, this has left a lasting impact on all Solvay’s PSU plans that include performance of the Group

in 2020. To date, the Board has not revised the PSU plan performance targets or their thresholds in the context of Covid-19.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

116

Performance against the objectives set in 2018 is summarized below.

Group performance

measured over

3 year period

Weight Minimum target

(0% payout)

Target

(100%)

Maximum

target

(120% payout)

Actual

result

Achievement

compared to

target

Performance

% used in PSU

calculation

Sum of underlying EBITDA

growth %

40% <15% 20% >25% <15% 0% 0%

CFROI base point

variation

40% <10 bp 50 bp >90 bp <10bp 0% 0%

Greenhouse gas intensity

kg/€

20% > 5,4 kg/€ 5,0 kg/€ < 4,7 kg/€ 5.25 kg/ € 88% 18%

Total 100% 18%

The share price differential (grant share price versus share price at vesting), and the total dividends, taking into account the number of vested units

calculated over three years (€11.25 per unit), resulted in a payout of 18.87% of the PSU value granted in 2018.

Payouts made in 2021 to the ELT Members with regard to the 2018-2020 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.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

117

5.3.5. 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 of Directors’ assessment of the performance of the Group and our Executives in 2021,

the remuneration of the CEO and other ELT Members was as follows:

Variable remuneration Benefits

Proportion of

fixed and va-

riable remune-

ration

Name,

Position

Fixed

remunera-

tion

Annual

variable pay

based on

2021 results

paid in 2022

The value of

vested equity

based

remuneration

2021

(2)

Total

direct

remunera-

tion

Extraordi-

nary

items

(4)

Pension Other

(3)

Total

Remune-

ration

Ilham Kadri,

CEO & Chair-

man ofthe ELT

1,225,000 1,875,000

(5)

NA 3,100,000 0 662,626 263,345 4,025,971

fixed 53%

variable 47%

Karim Hajjar,

CFO & ELT

member

830,392 950,000 105,194 1,885,586 0 228,341 317,532 2,431,459

fixed 57%

variable 43%

Dominique

Golsong,

ELT member

(from

01.04.2021)

(1a)

328,320 322,500 NA 650,820 0 0 0 650,820

fixed 50%

variable 50%

Marc Chollet,

ELT member

(from

01.04.2021)

315,000 322,500 30,072 667,572 0 140,709 12,353 820,634

fixed 57%

variable 43%

Augusto Di

Donfrancesco,

ELT member

(1b)

646,250 808,000 95,877 1,550,127 0 118,777 114,699 1,783,603

fixed 49%

variable 51%

Herve

Tiberghien,

ELT member

412,134 535,000 NA 947,134 0 107,874 103,696 1,158,704

fixed 54%

variable 46%

Vincent De

Cuyper,

ELT member

(Until

30.06.2021)

333,700 NA 95,877 429,577 5,184,046 107,869 31,659 5,753,151

fixed 83%

variable 17%

Hua Du,

ELT member

(until

31.03.2021)

(1c)

156,427 NA 95,877 252,304 0 14,958 25,875 293,137

fixed 67%

variable 33%

(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

(1c) Expatriate assignment in Belgium until March 31st, 2021; compensation paid in HKD; exchange rate 1Eur = 9.1926 HKD

(2) P SU 2018-2020 paid in June 2021; overall plan result 18% of 100% as disclosed in the section "2018-2020 LTI Performance Share Unit plan performance results" of this

report

(3) Long-term benefits (e.g. death-in-service, disability & medical benefits) & benefits in kind (e.g. company vehicle, education, expatriation package expenses, tax filing

assistance).

(4) statutory termination compensation in accordance with entitlements under the Belgian 1978 Employment Contract Act

(5) Payout capped at 150% of target according to Policy

SOLVAY 2021 ANNUAL INTEGRATED REPORT

CORPORATE GOVERNANCE STATEMENT

118

Stock options and PSU allotted in 2021 to the ELT members

In 2021, following the proposal of the Remuneration Committee, the Board of Directors allocated stock options to approximately 45 Senior Executives

in the Group, with an exercise price of €95.58. ELT Members, including the CEO, were offered a total of 95,731 options in February 2021. All options

granted were accepted in full.

In combination with the stock option plan, the Board of Directors granted PSUs to approximately 380 Executives and critical high potential talents, for

a possible payout in three years’ time, if pre-set performance objectives, namely underlying EBITDA growth, ROCE and GHG emissions reduction,

are met. ELT Members, including the CEO, were granted a total of 25,974 PSUs in February 2021.

STOCK OPTIONS AND PSUS ALLOTTED IN 2021 TO ELT MEMBERS

Country Name Function Number of Options

(1)

Number of PSUs

(2)

Belgium Kadri, Ilham CEO/Chairman of the ELT 36,985 11,640

Belgium Hajjar, Karim ELT Member 11,792 2,877

Belgium Di Donfrancesco, Augusto ELT Member 11,792 2,877

Belgium Du, Hua

(3)

ELT Member 10,720 2,616

Belgium Tiberghien, Herve ELT Member 10,720 2,616

Belgium Golsong, Dominique

(4)

ELT Member 6,861 1,674

France Chollet, Marc

(4)

ELT Member 6,861 1,674

Total 95,731 25,974

(1) Stock options: Black Scholes fair value for February 2021 grant was €23.32

(2) PSU’s share price for February 2021 grant was €95.58

(3) Grant issued before the exit from the ELT

(4) Grants issued before the ELT mandate start date, but covers the period of the ELT mandate

Stock options granted and held in 2021 by the ELT members as on December 31, 2021

Following the guidelines of the Executive remuneration disclosure, the table below shows the evolution of outstanding balances of stock options

issued to ELT Members and the balance of the Solvay Stock options held by the ELT Members at the end of the reporting period.

Changes during the year

Name Balance on

31/12/2020

Granted in

2021

Exercised

in 2021

Expired

in 2021

Vested Non vested Balance on

31/12/2021

Kadri, Ilham 105,169 36,985 0 0 0 142,154 142,154

Chollet, Marc 69,094 6,861 7,985 0 33,222 34,748 67,970

Di Donfrancesco, Augusto 122,166 11,792 12,477 0 54,103 67,378 121,481

Golsong, Dominique 0 6,861 0 0 0 6,861 6,861

Hajjar, Karim 124,832 11,792 0 0 66,628 69,996 136,624

Tiberghien, Herve 16,415 10,720 0 0 0 27,135 27,135

Total 437,676 85,011 20,462 0 153,953 348,272 502,225

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5.4. Comparative information on the evolution of remuneration and company performance

The 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.

Remuneration in € 2017 2018 2019 2020 2021

Remuneration of the Board 1,434,572 1,824,260 1,645,433 1,687,500 1,620,587

Remuneration of the CEO Ilham Kadri - - 3,328,604 3,790,614 4,025,971

Remuneration of other ELT Members 6,619,926

(1)

9,501,971

(2)

6,499,400

(3)

7,726,374

(4)

7,707,462

(5)

Average remuneration of employees 66,274 66,691 69,220 61,945

(6)

67,990

(7)

Ratio between the remuneration of the CEO and the

average remuneration of employees

(8)

48x 61x 59x

Solvay performance

Underlying profit for the period (€ million) 992 1,131 1,113 650 1,081

Underlying EBITDA (€ million) 2,230 2,230 2,322 1,945 2,356

Free Cash Flow (€ million) 871 989 1,072 1,206 1,043

(1) V. De Cuyper, R. Kearns, K. Hajjar, P. Juery

(2) V. De Cuyper, R. Kearns (9m), K. Hajjar, P. Juery, C. Tandeau de Marsac (10m), A. Di Donfrancesco (10m), H. Du (10m)

(3) V. De Cuyper, K. Hajjar, A. Di Donfrancesco, H. Du, H. Tiberghien (4m), P. Juery (2m), C. Tandeau de Marsac (2m)

(4) V. De Cuyper, K. Hajjar A. Di Donfrancesco, H. Du, H. Tiberghien

(5) K. Hajjar, A. Di Donfrancesco, H.Tiberghien, V.De Cuyper (6m), H.Du (3m), M.Chollet (9M), D. Golsong (9m)

(6) Impacted by furlough and other cost measures, while variable pay payouts where significantly higher in 2021 than the previous year

(7) Considers impact of 2020 bonus paid in 2021 above target for all employees and impacted by payroll inﬂation in 2021

(8) 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)

The remuneration of the CEO and the ELT Members includes:

· base remuneration paid in 2021;

· STI for the results of 2021;

· PSU value for the results of the 2018-2020 plan, paid in June 2021.

It does not include:

· grant or vested value of LTI’s during 2021, as SOPs do not represent a value until exercised and PSUs that vest on December 31 are paid in the

following year, taking into account the performance of the Group over the vesting period;

· 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 report.

Following the guidance issued by the Belgian Corporate Governance Commission with regard to remuneration disclosure, as 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 2021 is 90x, compared

to 108x in 2020. The ratio reduced in 2021, due to several reasons, including changes in the demographics of the lowest paid employee, indexation

of pay and higher incentives payouts in 2021 compared to 2020, but most importantly because there were no “one off” payments issued to the CEO

in 2021.

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.

5.5. Statements of compliance of remuneration for Chairman and ELT members

This report has been prepared by the Remuneration Committee.

The remuneration packages of Ms. Ilham Kadri, the Chairman of the ELT (or CEO) and the other ELT Members, are in compliance with Article 7:91 of

the Belgian 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 that

are objectively measurable over a period of at least three years.

The remuneration packages are set by the Board of Directors, based on recommendations from the Remuneration Committee. These remuneration

packages are also compliant with the Belgian Code of Corporate Governance (2020), except in regard to guidance on share ownership, as foreseen

by the Code. However following stakeholder recommendations, such guidelines will be proposed in the new Remuneration Policy, which will be

submitted for shareholder approval in 2022.

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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.

ELT Members, including the CEO, receive Stock Options and cash settled PSUs as explained above.

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.

5.6. Key provisions of Executive Leadership Team Members' contractual relationships

with the Company and/or an afliated company, including provisions relating to

remuneration 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 such directorships

are compensated, they are included in the amounts given above, regardless of whether the position is deemed to be salaried or undertaken on a

self-employed basis under local legislation.

At the time of departure from the ELT and the Group on June 30, 2021 Mr. Vincent De Cuyper has received a statutory termination compensation in

accordance with his statutory entitlements under the Belgian 1978 Employment Contract Act and taking into account his employment start date on

February 1, 1987.

Mr.Hua Du left ELT on the March 31, 2021 without any termination indemnity related thereto and undertook another executive role within the Group.

ELT Members will not benefit from any contractual departure indemnity linked to the exercise of their office. In case of early termination, only the legal

system applies, except for the CFO, Karim Hajjar, and the General Counsel and Corporate Secretary, Dominique Golsong

. The CFO’s employment

contract contains a contractual departure indemnity of 12 months of his salary after five years of seniority, and a non-competition clause of 12 months.

The General Counsel and Corporate Secretary’s services contract

(1)

is for a (renewable) fixed term that coincides with the mandate as ELT Member, but

which can be terminated with notice or a departure indemnity of three months’ base remuneration. A non-competition clause of 12 months applies

after termination. A non-competition clause of 12 months also exists for Hervé Tiberghien and Augusto Di Donfrancesco.

In the event of a decision to terminate Ms. Ilham Kadri's contract, she will be eligible for a contractual indemnity of 12 months of her total target

remuneration. In the event that Ms. Ilham Kadri resigns, she is subject to a non-competition clause of 12 months with no additional remuneration.

The above report and the decisions made during 2021 about the Remuneration of the Executives of the Group are aligned with the Remuneration

Policy approved at the Annual Shareholders’ meeting, which took place on May 12, 2020.

The above is in line with Belgian Corporate governance code requirements.

6. MAIN CHARACTERISTICS OF RISK MANAGEMENT AND INTERNAL CONTROL

SYSTEMS

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) provides advice and ensures that leaders address the challenges at stake. The team is

in charge of setting up and maintaining a comprehensive and consistent system for risk management and internal control across the Group.

The extent to which Solvay is willing to take risks in the pursuit of our business strategy and our objective to create shareholder value is defined by

a number of qualitative and quantitative expressions of risk appetite, operated through measures such as limits, triggers and indicators. The IA/RM

Department communicates directly with the Audit Committee, helping to regularly ensure that the risk appetite of Management is in alignment with

the risk appetite of the Board.

Solvay has set up an internal control system designed to provide reasonable assurance that:

· (i) current laws and regulations are respected;

· (ii) policies and objectives set by general management are implemented;

· (iii) financial and extra-financial information is accurate;

· (iv) internal processes are efficient, particularly those contributing to the protection of Solvay’s assets.

· The five components of the internal control system are described below.

1. Acting through Management company SRL Dominique Golsong

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6.1. The control environment

As the foundation of the internal control system, the control environment promotes awareness and compliant behavior among all employees. Its

various elements create a clear structure of principles, rules, roles and responsibilities, while demonstrating general management’s commitment to

compliance.

· The Code of Business Integrity is available on Solvay’s website. It refers to underlying policies and procedures. Employees receive training regularly

on the Code. More information can be found in the chapter on Corporate Governance and Extra-financial section in this report.

· An Ethics Helpline, managed by a third party, enables employees to report potential Code of Business Integrity violations if they cannot go through

their managers or through the Compliance organization, or if they wish to remain anonymous. More information can be found in the Extra-financial

section of this report.

· Standardized processes are in place for financial and non-financial activities.

6.2. The risk assessment process

The process of risk management 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 for adequacy and effectiveness.

More information on Enterprise Risk Management, including a description of the Group’s main risks and the actions taken to avoid or mitigate them,

can be found in the Risk management section of this report.

Our approach to designing internal controls for major processes includes a risk assessment step defining which key control objectives to tackle. In

particular, this is the case for processes at subsidiary, Shared Services, GBU or corporate level, leading to the production of reliable financial reporting.

6.3. Control activities

Solvay uses a systematic approach to designing and implementing control activities for the most relevant Solvay processes.

After the risk analysis and risk assessment phase, the controls are designed and described by the corporate process managers with the support of the

Risk Management team. The descriptions of the controls are used as a reference for the internal control assessment and roll-out across the Group.

At each level of the Group (corporate, Shared Services platforms, and GBUs), the manager operating the process is responsible for the control

execution.

Agile internal control governance has been set up under the CFO’s sponsorship: Corporate Process Owners and GBU representatives (Process Risk

Coordinators) are part of a network aiming to promote an Internal Control system tailored to the risks of each GBU.

Solvay implements policies and processes applicable to all employees in the following 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 in major

cross-Group 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 at every level of responsibility in the Company, including Solvay Business Services, the

Finance Director of the entity, Group Accounting and Reporting and the Executive Leadership Team. Elements are analyzed using various methods,

such as a variance analysis, plausibility and consistency checks, ratio analysis and comparison with forecasts.

In addition to the monthly reporting analysis prepared by Group Controlling teams, the Executive Leadership Team thoroughly reviews GBU

performance every quarter in the context of business forecast reviews.

6.4. Internal control monitoring

The Audit Committee is in charge of monitoring the effectiveness of internal control systems. It supervises the work of Internal Audit and Risk

Management with regard to financial, operational, and compliance monitoring. It is kept informed of the scope, programs and results of the internal

audit work, and it verifies that audit recommendations are properly implemented. The role and responsibilities of the Audit Committee are further

detailed in the Corporate Governance Charter.

Internal audit assignments are scoped, planned and defined on the basis of a risk analysis; due diligence focuses on the areas perceived as having the

highest risks. All the consolidated entities within the Group are inspected by Internal Audit at least every five years. Internal Audit recommendations

are implemented by management.

The Ethics and Compliance department coordinates investigations of potential Code of Business Integrity infringements.

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6.5. Information and communication

Group-wide information systems are managed by the IT department. A large majority of Group operations are supported by a small number of

integrated Enterprise Resource Planning (ERP) systems. Financial consolidation is supported by a dedicated tool.

All financial reporting procedures and internal controls ensure that all material information disclosed by Solvay to our 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 circulates detailed written instructions to all financial actors involved before each quarterly closing.

The publication of the quarterly financial results is subject to various checks and validations carried out in advance:

· 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 Committee ensures that financial statements and communications by the Company and the Group conform to generally accepted

accounting principles (IFRS for the Group, Belgian accounting law for the Company).

· The Board of Directors approves the consolidated periodic financial statements and those of Solvay SA (quarterly, semiannual and annual) and all

related communications.

7. EXTERNAL AUDIT

The audit of the Company’s financial situation, financial statements, extra-financial statements and the conformity of these statements – and the

entries 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. These are appointed at the 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 Shareholders’ Meeting sets the number of auditors and their emoluments in accordance with the law. Auditors are also entitled to reimbursement

of their travel expenses for auditing the Company’s sites and administrative offices.

· The Shareholders’ Meeting may also appoint one or more alternate auditors. Auditors are appointed for three-year renewable terms, which may not

be revoked by the Shareholders’ Meeting other than for good reason.

· The Audit Committee assesses the effectiveness, independence and objectivity of the external auditor having regard to the:

- Content, quality and insights provided in key external auditor plans and reports, in particular those summarizing audit work performed on

risks 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 ended December 31, 2021, professional services were performed by Deloitte Bedrijfsrevisoren BV, the member firms of Deloitte Touche

Tohmatsu Limited, and their respective affiliates.

The yearly 2021 audit fees for Solvay SA were set at €1.2 million. They include the audit of the statutory and consolidated accounts of Solvay SA.

Additional audit fees for Solvay affiliates in 2021 amount to €4.5 million. Supplementary non-audit fees of €1,1 million were paid in 2021 by Solvay SA

and affiliates of which:

· Invoiced by the statutory auditor of the Group:

- Other assurance missions: €0.3 million,

- Audit and reviews supporting divestiture activities: €0.2 million.

· Invoiced by other Deloitte entities:

- Other assurance missions: €0,6 million.

The mandate of Deloitte will expire at the end of the shareholders’ meeting of 10 May 2022 and the shareholders’ meeting will be requested to

approve the appointment of Ernst & Young Bedrijfsrevisoren BV as new statutory auditor of the company for a duration of three years ending after

the Ordinary Shareholders’ Meeting of 2025 which will be called to approve the accounts for the year 2024. It will be proposed to set the annual fees

of the new statutory auditor, which include the audit of the statutory accounts as well as the audit of the consolidation of the Group, at €1,278,402.

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8. ITEMS TO BE DISCLOSED PURSUANT TO ARTICLE 34 OF THE BELGIAN ROYAL

DECREE OF NOVEMBER 14, 2007

According to Article 34 of the Belgian Royal Decree of November 14, 2007, the Company hereby discloses the following items:

8.1. Capital structure

As of December 31, 2021, the capital of the Company amounted to €1,588,146,240, represented by 105,876,416 ordinary shares with no par value,

fully paid up.

All Solvay shares are entitled to the same rights. There are no different classes of shares.

8.2. Transfer of shares and shareholders’ arrangements

Solvay’s bylaws do not contain any restriction on the transfer of shares.

The Company has been informed that certain individual shareholders who hold shares directly in Solvay have decided 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.

Solvay is not aware of any other voting agreements among our shareholders or of the existence of a concert between our shareholders.

8.3. Holders of securities with special control rights

There are no such securities.

8.4. Control mechanism of any employee share scheme where the control rights are not

exercised directly by the employees

There is no employee share scheme with such a mechanism.

8.5. Restrictions on the exercise of voting rights

Each Solvay share entitles holders to exercise one vote at Shareholders’ 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 a

single representative to exercise the rights attached to the shares. The voting rights attached to the shares in Solvay held by Solvay Stock Option

Management, an indirect subsidiary of the company, are, as a matter of law, suspended.

8.6. 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 five

members, their number being determined by the Shareholders’ Meeting (Article 12). Directors are appointed by the Shareholders’ Meeting for four

years (and may be reappointed).

The Board of Directors submits Directors’ appointments, renewals, resignations or dismissals to the Ordinary Shareholders’ Meeting for approval. It also invites

such Shareholders’ Meetings to vote on the independence of the Directors fulfilling the related criteria, having first sought the advice of the Nominations

Committee, whose mission is to define and assess the profile of any new candidate using its criteria for appointment and for specific competences.

The Ordinary Shareholders’ Meeting decides on proposals made by the Board of Directors in 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.

8.7. 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 the

share capital of Solvay must be present or represented. In principle, amendments must be passed by a 75% majority of the votes cast.

If the attendance quorum is not met at the first Extraordinary Shareholders’ Meeting, a second Shareholders’ Meeting may be convened and will take

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.

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8.8. Powers of the board of directors

8.8.1. Powers of the Board of Directors

The Board of Directors is the highest management body of the Company.

It is entrusted with all the powers that are not reserved, by law or under the bylaws, to the Shareholders’ Meeting.

The Board of Directors has kept responsibility for certain key areas and has delegated the remainder of its powers to an Executive Leadership Team

(further detailed in the 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 by the Board of Directors.

8.8.2. The Board’s authorizations to issue and buy back shares and increase the capital

The Shareholders’ Meeting of May 12, 2020 authorized the Board of Directors to acquire Solvay’s own shares under the following conditions:

· The par value of the acquired shares (including those held in treasury and those acquired by direct subsidiaries) may not exceed 10% of the capital.

· Any purchase to be made at a unit price which may not be (i) more than 10% lower than the lowest price of the last 20 quotations preceding the

transaction; and (ii) more than 10% higher than the highest price of the last 20 quotations preceding the transaction, it being understood that the

price shall also comply with the requirements of Article 7:215 of the BCCA and Articles 8:2 and following of the Royal Decree implementing the

Companies and Associations Code.

· This authorization is valid for a duration of five years as of June 5, 2020.

At the same Shareholder’s Meeting, the right for the Board of Directors to increase the Capital of the Company was also authorized, under the

following conditions:

· Limitation to an amount of 158,000,000 euros.

· This authorization is valid for a duration of five years as of June 5, 2020.

· The Board of Directors can cancel the preference right of existing shareholders at the occasion of any increase it decides under the authorization..

8.9. Signicant agreements or securities that may be impacted by a change of control of

the company

The Ordinary Shareholders’ Meeting of May 10, 2016 approved the change of control provisions relating to the December 2015 Euro-denominated

senior and hybrid bonds and the USD-denominated senior notes issued to finance the acquisition of Cytec and the general corporate purposes of

the Solvay Group.

8.10. Agreements between the company and its directors or employees providing for

compensation if directors resign or are good leavers, or in the case of a public

takeover bid

Not applicable.

RISK

126 1. Risk management

process

127 2. Solvay’s main risks

128 2.1. Security

129 2.2. Environmental impact and

controversies

130 2.3. Compliance and business

integrity

131 2.4. Operations safety

134 2.5. Climate change

135 2.6. Regulatory framework for

chemicals sustainability

135 2.7. Emerging risk

135 3. Other risks

138 4. Litigation

MANAGEMENT

Risk

management

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Risk management

In a context of global economic and political uncertainty, volatile growth dynamics and market cycles and increased sensitivity and expectations

related to climate change and the imperatives of energy transition, we believe that effectively monitoring and managing risks is key to achieving

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 and provisions that we apply with

everyone from the Board of Directors and front-line workers to supply chain partners and customers demonstrates this. These processes include:

1.1. Risk analysis and decision on how to manage the critical risks

We analyze risks in three ways. This includes establishing their level of priority for Solvay, which means categorizing them as “main risks” (most

critical), “emerging risks” or “other risks”. We also identify in which area the risk would have the most impact: the environment, people, economic or

reputation. In addition, we classify risks according to their time horizon: short term (up to one year); medium term (more than one year and less than

five); and long term (more than five years).

1.2. Risk management in action

Solvay’s Enterprise Risk Management methodology requires our Global Business Units (GBUs) and Functions – and the Group as a whole – to

prioritize risks, develop and deliver on mitigation plans and continually scan the environment to assess whether risks and exposures are changing

and test whether priorities and plans remain appropriate. These assessments, which are recorded systematically, enable us to monitor decisions and

measure actions and progress.

Critical risks for the Group are closely and systematically monitored by the Group Risk Committee, which ensures that these risks are assessed

for materiality and are adequately addressed. The Committee is composed of the Executive Leadership Team (ELT), the Group General Manager

Research & Innovation and the Chief Sustainability and Government Affairs Officer.

Leaders of businesses and functions integrate risk management in decision making to support delivery of objectives

Leaders of GBUs and Functions are responsible for identifying, monitoring and managing the key risks in their domains. 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. Each GBU formally presents their risk matrix and follow-up actions to mitigate any critical risks to the ELT.

Group risks are overseen at Executive Leadership Team level

Group-level risks are managed and monitored at the top level. The Senior Leadership Team contributes to identifying risks, the Group Risk Committee

contributes to assessing risks and the ELT members contribute to risk sponsorship, treatment and response. Board members also provide inputs

independently, bringing to bear their broad expertise Additional input may be provided by the Corporate Risk Management Department, which

scans external sources such as the World Economic Forum Global Risks report, the Risk in Focus report from the ECIIA1 or the AXA Future risks

report, for relevant information. These inputs are reviewed and validated by the ELT once a year and are reviewed and updated more frequently when

necessary, such as with the significant impacts on market demand at the onset of the Covid pandemic in 2020.

The Audit Committee meets with the CEO and all other members of the Board once a year to discuss the major risks facing the Group. During the

year, the Audit Committee reviews progress systematically and covers every Group Risk at least once a year inviting the relevant leaders and Risk

Owners’ to provide overviews on their risk assessments and progress, such as industrial safety, security, cybersecurity, or ethics and compliance topics.

1. European Confederation of Institutes of Internal Auditing

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SOLVAY’S RISK MANAGEMENT PROCESS

Risk analysis & decision Implementation Monitoring

Board

Gather input through survey on

Group risks

–

Annual Group risk assessment and

validation

Audit Comittee

Gather input through survey on

Group risks

–

Assess effectiveness of risk management

Quaterly presentation by risk owners

Periodic assessment of Group risks

(minimum annually)

Senior Leadership Team

Define risks at business and function

levels

Mitigation plan developed with risk owners accountable for delivery

Ongoing systematic progress update

Regular update (minimum annually)

Executive Leadership Team

(ELT)

Provide input on Group risks

Oversees progress as individual Risk sponsors

Ad-hoc risk sessions + Group risk dashboard biannually

Group Risk Commitee

Decide Group risks – –

* The Group Risk Committee comprises the Executive Leadership Team, (ELT) the Group General Manager Research & Innovation and the Chief Sustainability

andGovernment Affairs Officer.

Assessment of major projects linked to Solvay’s transformation

An appropriate risk assessment methodology is applied to significant projects, such as acquisitions and major capital investments.

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 in

order to ensure that their business units and functions are prepared for specific crisis situations. These programs include crisis simulations, media

training for potential spokespersons, the 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.

2. SOLVAY’S MAIN RISKS

The Group Risk Committee assesses the impact of risks and the level of control we have over these risks. To assess impact, we use a four-level scale:

low, medium, high or very high.

Impact Low Medium High Very high

Economic Less than €10 million €10 million to €50 million €50 million to €100 million €100 million or larger

Injury to people

Nuisance

(noise, smoke, odor)

1 or multiple First Aid Injuries or

Shelter-in-place

· 1 irreversible Injury

· or multiple Reversible

Injuries

1 or multiple Fatalities

or multiple Irreversible Injuries

Reputation -

· Local news headlines

· Low activity in social media

· Moderate to strong

reaction from local

stakeholders

· National news headlines

· Strong activity in social

media

· Strong reaction from

stakeholders

· International news

headlines

· Massive activity in social

media

· Severe reaction from all

stakeholders

Environment

Non reportable Operating

Permit Limits Exceed

· Damages limited to the

immediate vicinity of the

site

· Minor impact on plants or

animals around the site

· Reversible damages off-

site

· Major impact on plants or

animals around the site

· Long-term damages off-

site

(10 years)

Level of control

The Group Risk Committee assesses the level of control by considering the following questions:

· Are key actions and controls clearly identified?

· Is the effectiveness of key actions and controls assessed?

· Is the level of control adequate and proportionate to the risk?

· Are additional mitigation actions appropriate?

Solvay main risks

To determine how critical a risk is, we combine the two ratings relating to impact and level of control.

Criticality Risk Time

horizon

Trends

(after mitigation)

Link with sustainable development

high materiality aspects

Very High

Security Short Improvement Data security

Environmental impact and

Controversies

Medium to long Improvement

Critical incident risk management

Air quality

Compliance and business

integrity

Short to medium Stable

Management of the legal, ethics &

regulatory framework

Operations safety Short Stable

Critical incident risk management

Employee health and safety

Hazardous materials

High

Climate change Long Improvement

Greenhouse gas emissions

Biodiversity

Energy management

Product design and lifecycle management

Waste and wastewatear

Analysis in progress

Regulatory framework for

chemicals sustainability

Medium N/A Critical incident risk management

Emerging

Geopolitical impacts on trade and

supply chain

Short to medium Emerging

–

Short term < 1 year < Medium term < 5 years < Long term

*Emerging risk: newly developing or changing risk that may have, on the long term, a significant impact which will need to be assessed in the future.

The description of 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.

2.1. Security

RISK HORIZON: SHORT TERM

TREND: IMPROVEMENT

2.1.1. Risk description

Certain security threats can have negative consequences for our business. These include terrorism, crime, violence, vandalism, theft and cyberattacks,

which impact employees or other stakeholders, sites, assets, critical information or intellectual property.

Solvay is exposed to physical security risks because it has 62 high-risk operations (high Seveso level, process safety management (PSM) covered).

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: 6.7 hazardous materials.

We also have sites located in countries where security concerns are rated high by SOS international. Of our 105 sites, 98 have undergone a Security

Vulnerability Self-Assessment (SVSA) and four have been assessed as having the highest level of security risk - level 1.

The exposure of Solvay to cyber risk, as for most major companies, comes from our extensive use of information and communication technologies

and the gradually increasing automation level of our sites. Like most multinationals, Solvay experiences cyber incidents and responds actively to those

incidents to limit the impact. The Solvay management team is not aware of any incident that would have significant consequences on the financial

statements or our business.

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2.1.2. Prevention and mitigation actions

Solvay has a risk-based security approach to protecting sites, information, and people.

· A Chief Security Officer coordinates all security activities globally in order to ensure efficient security risk mitigation. A Chief Information Security

Officer, reporting to the Chief Security Officer, coordinates all related information security activities.

· Three governance bodies lead the security risk management effort:

- a Security Board, chaired by the CEO, 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 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

and an optimized security program for the Group.

Solvay management provides updates on information security to the Board at least once a year.

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 Business Services professionals and mandatory security training for all employees;

· the regular publication of cubersecurity tips to increase employee awareness;

· some significant improvements in security posture have been achieved by deploying enhanced security technology across the network. These

include controls such as endpoint detection and response, multi-factor authentication, immutable back-ups, DMZ hardening.

A significant cyber-attack could negatively impact Solvay in many ways, including people, operations, results as well as know-how and intellectual

property. We will therefore continue to solidify our cyber defenses so that we are able to manage the evolving cyber threat landscape.

Insurance

Solvay is insured to a limited degree against the potential financial impact of a cyberattack. This insurance covers damage to assets, business

interruption and cases of fraud, and is only limited by the lack of sufficient insurance market capacity on such risks.

2.1.3. 2021 main actions

In 2021 we continued to implement our cyber security program, focusing on the following key aspects:

· governance and execution;

· cyber hygiene, including a remediation plan resulting from penetration tests;

· identity and access Management, including privileged access management;

· detection and response;

· network, data and application security.

2.2. Environmental impact and controversies

RISK HORIZON: SHORT, MEDIUM AND LONG TERM

TREND: IMPROVEMENT

2.2.1. Risk description

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 it is responsible, including divested or discontinued, ensuringcontinuous

compliancewith applicableenvironmental legislation. More information in the Extra financial chapter of the report.

These impacts on environment are in turn creating the following risks:

· The challenges and expenses related to meeting increasingly strict regulatory standards and changing customer expectations, standards and

purchasing 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.

2.2.2. Prevention and mitigation actions

· Careful monitoring and management of sites with a history of soil contamination by a dedicated expert team (about 300 locations throughout the

world are followed up).

· Rolling out a risk characterization approach at every affected site when relevant.

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· Local regulatory monitoring.

· The Group has a strategy to manage chemicals of concern and develop alternatives which reduce their human and/or environmental impact or

phase them out.

· We have 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; and

- setting more conservative in-house exposure limits for critical substances;

· We regularly review, and update, standards governing discharge from plants.

· We use our SPM tool to help identify substances that can deliver needed results with more limited environmental impact.

· We revise our materiality analysis on a yearly basis to align it with the evolution of stakeholder expectations, including environmental impacts.

2.2.3. 2021 main actions

· Execution of our Solvay One Planet sustainability roadmap, which includes programs to:

- identify substances of concern and the development of alternatives;

- reduce our pressure on biodiversity by 30% by 2030, which includes assessing our impact on climate change, terrestrial acidification, water

eutrophication and marine ecotoxicity;

- implement 36 energy transition projects and 18 waste projects.

· Implementation of Best Available Technologies defined by the regulators, monitoring our activities in collaboration with independent academic

institutions and engagement with local public authorities. At the end of the soda ash production process in Rosignano, we dispose of the remaining

inert, natural materials in the sea- none of which are toxic or dangerous. A release to the sea through an open channel was confirmed to be the

best and preferred solution for Rosignano, as it also plays an important role in stabilizing the coastline against erosion.The process is undertaken

in full compliance with EU and Italian regulations, as well as our own high standards for health, safety and environmental protection. Every step of

the process is monitored by Solvay, regulators and independent academic institutions and all of this research demonstrates that the water near our

operations is safe, and consistent with the rest of the Tuscan coast. However, as this contributes to the white color of the beach, we regularly face

questions from stakeholders and the public. For more information: see solvay.com.

· Launch of our non-ﬂuorosurfactants technology (Hylar® 5000S and Tecnoﬂon® LX) in New Jersey, in the US. Today Solvay can confirm that the

Group has successfully eliminated the use of ﬂuorosurfactant process aids in the U.S. We recognize however that its work is not yet done. Solvay

continues to use a limited number of ﬂuorosurfactant-based process aids in its facility in Spinetta, Italy. At present, The Group is applying state-of-the-

art techniques that eliminate nearly 100% of ﬂuorosurfactant emissions.

More information in the litigations section and in the Financial statement statements chapter of the report: F31.B and F36

2.3. Compliance and business integrity

RISK HORIZON: SHORT TO MEDIUM TERM

TREND: STABLE

2.3.1. Risk description

Solvay management, in alignment with the Board, adopts a zero-tolerance approach in relation to non-compliance toward its Compliance and

Business Integrity policy. Solvay’s activities require that the following 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 misstatements;

- corruption, misappropriation;

- by-passing corporate controls, and;

· Human rights violations.

· Failure to implement good governance in a joint venture.

· Failure to comply with chemical product usage standards, such as:

- 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.

Product liability risk is generally higher for products used in medical devices, healthcare, food contact and feed applications, and sensitive

applications in general;

- chemical and market regulations in countries where a product is marketed, which could have negative consequences.

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2.3.2. Prevention and mitigation actions

Solvay’s Code of Business Integrity, policies and procedures

· We made significant enhancements to the Code of Business Integrity in 2020 to broaden the scope and include the issues listed above. The new

version was deployed in early 2020, and 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 undertake and to pass. We also require that all employees sign an annual

acknowledgement that they have read the Code and that they have nothing to report. We have also created several training courses and

communication actions to address specific behavioral risks. These include:

- anti-bribery and anti-corruption;

- anti-competitive activity;

- confidential and proprietary information,

- conﬂict of interest;

- Human Rights in Business Policy: reporting non-compliance;

- 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.

Chemical product usage

· Solvay Safety Data Sheets (SDS) ensure harmonized content by implementing a common worldwide SAP system for the Group. This SAP system has

now been fully implemented across the company. Our Composite Materials activities were the last to join the SAP system (2020-2021).

· 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 Substances of Very High Concern (SVHC) - defined by Solvay - in the products they sell. A risk assessment

and analysis of any available safer alternatives is performed for each SVHC identified in the inventory.

· Recall procedures are developed and deployed as prescribed by the product stewardship programs.

· Insurance reduces the financial impact of a product liability risk, including for first-party and third-party product recalls.

2.3.3. 2021 main actions

Business Integrity

As part of our deployment of the new Code of Business Integrity in 2020, all employees were required to read the new Code, take a mandatory

e-learning course and sign an acknowledgement that they had read it. The e-learning training course focused on bribery and corruption, confidential

and proprietary information, conﬂicts of interest, harassment and how to lodge “Speak Up” complaints. A new round of training was launched in

2021.

· 99% of employees have received training on our Code of Business Integrity;

· All employees were required to take the training module on bribery and corruption and a separate Anti-Bribery and Anti-Corruption (ABAC) training

course is now available to employees through the Group’s e-training platform. In 2021, we launched a new ABAC training campaign, which resulted

in a participation rate of 96%.

Chemical product usage

The Solvay Product Safety Management Process (PSMP) identifies risks relating to products marketed by Solvay. All GBUs use this process, with a

specific focus on prioritizing the required risk assessments in the product portfolio and on regularly carrying out risk assessments for the most sensitive

product applications.

More information on this can be found in the Extra-financial chapter of the report: 3.2. Management of the legal, ethics, and regulatory framework.

2.4. Operations safety

RISK HORIZON: SHORT TERM

TREND: STABLE

2.4.1. Risk description

The safety of our people is a priority 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 industrial sites, like most industrial operations, carry out high pressure and 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, 6.8 Critical incident risk manage-

ment (process safety), 6.7 Hazardous materials.

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We have identified four major operational 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.

2.4.2. Prevention and mitigation actions

In 2018, Solvay redefined our Health, Safety and Environment (HSE) strategy and issued a new set of Minimum Requirements to create a shared

understanding and approach to mitigating major risks. As part of this new approach, we also introduced a new way of working, including a more

collaborative and supportive approach to 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, best practice, common methods and tools, Solvay HSE Minimum Requirements, external monitoring

and benchmarking to improve our HSE performance.

· Competency: ensuring all employees have the right level of knowledge and skills to put in place the HSE Minimum Requirements, starting with

those working in key positions.

· Compliance: detecting and mitigating regulatory and non-regulatory compliance issues, with a focus on priority risks, both in our operations and

commercialized products.

Occupational safety

Solvay has consistently prioritized occupational safety. The results of our efforts are positive, showing a 30% reduction in the total number of injuries,

and no fatalities, over the last three years. Our efforts to create a safety culture where all employees work together and care for one another are based

on:

· Solvay’s Safety Excellence Plan, which enables the involvement and engagement of all Solvay employees. It includes activities such as Safety Days,

Leadership Safety Visits, Behavior Based Safety programs, and an individual HSE annual objective for each employee.

· 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 & Occupational Health

Solvay has implemented a comprehensive approach to reducing the chemical exposure risk in the workplace. Our approach includes:

· 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.

Process safety management

Solvay has created and uses a Process Safety Management System. Among other things, this system includes:

· A preventive 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;

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· 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.

2.4.3. 2021 main actions

Occupational safety

· 95% implementation rate of the Solvay Life Saving Rules.

· Continuing deployment of our Safety Culture program (training and sharing).

· Systematic tracking and analysis of High Severity Potential (HSP) events.

· Adoption of the OSHA recordable incident reporting standard to enable better peer comparisons. This replaces the Medical Treatment Accident

standard.

More information can be found in the Extra-financial statements section of the report: 3.3. Health, safety and environment management.

Industrial Hygiene

We continued to roll-out the SOCRATES (Solvay Occupational Risk Assessment Tool for Employees), reaching an 85% deployment rate. This tool:

· provides easy access to IH methods, tools and databases;

· enable consistent documentation of IH assessments;

· enhances 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

Process Safety

· Application of Process Safety Management Audit protocol on 12 sites.

· Process Hazard Analyses carried out for all units, on all sites, within the last five years, in line with Group requirements.

· All detected high-risk situations are treated within one year, with any extensions having to be duly authorized.

· 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: 6.8. Critical incident risk management.

Transport Safety

· Improvement of our processes on Qualification of Logistics Service Providers for Dangerous Goods, including tolling and storage operations.

· Continued application of Transport Emergency Response in all countries for those classified as levels 1, 2 and 3.

· Continued development of expertise in Transport Safety in the following areas:

- Global Transport Safety Network.

- Feedback on transport accidents.

- Regular training of key people.

More information can be found in the Extra-financial statements chapter of the report: 6.8. Critical incident risk management

Environment

· Detailed annual reporting of environmental emissions (air and water), water management and waste. In particular, we focus on emissions of

Substances of Very High Concern (SVHC), 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 on 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, through

the application of best-in-class models and collaboration with external experts.

More information can be found in the Extra-financial statements chapter of the report: 5.3. Air quality, 5.4. Water and wastewater, 5.5. Waste

Occupational health

Many actions were taken to mitigate the impact of the global health crisis caused by the Covid-19 pandemic, including:

· Implementation of preventive measures, testing and return-to-work case management processes, as defined by the medical network.

· Purchase and distribution of Covid-19 tests at work sites.

· Promotion and facilitation of Covid-19 vaccination.

· Points of contact in each country or zone, able to advise the crisis management teams.

· Awareness raising and training of employees, through tools such as a wiki page, posters and other communications.

· Mental health support.

More information can be found in the Extra-financial statements chapter of the report: 6.1 Employees health and safety

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2.5. Climate change

RISK HORIZON: SHORT AND LONG TERM

TREND: IMPROVEMENT

2.5.1. Risk description

The Group strategy to address climate-related risks, as defined by the Task Force on Climate-related Financial Disclosures (TCFD), could be

ineffective and damage the environment, the lives of current and later generations and Solvay’s reputation. This, in turn, could cause business losses,

undervaluation and difficulty attracting long-term investors. The possible risks to Solvay that we have identified are as follows:

A - Transition risks:

Solvay’s energy mix (use of coal), raw materials (use of petrochemicals) and end markets (automotive and aerospace, building and construction) mean

that we are exposed to risks and opportunities as part of the energy transition. This transition risk can be further detailed as displayed hereafter:

· Policies and legal context: regulations and actions to limit CO

emissions, such as increasing carbon taxes, barring internal combustion engines,

mandating use of certain fuel types, 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 tightening

of environmental standards.

· Reputation: negative stakeholder attitudes caused by failing to address stakeholder climate change concerns effectively.

B- Physical risks:

· Sites in water scarcity regions

· Sites in ﬂood zone

2.5.2. Prevention and mitigation actions

· Implementation of a strategy focused on shifting to businesses with reduced environmental exposure and high value-adding potential that have

positive environmental effects.

· Progression toward ambitious 2030 goals to reduce greenhouse gas emissions from operations by 30% - an annual pace aligned with the Paris

Agreement objectives - and to phase-out the use of coal for energy where renewable alternatives exist.

· Design of a Carbon Neutrality roadmap to reach carbon neutrality on scope 1 and 2 by 2040 for all GBUs, expect Soda Ash and before 2050 for the

hard to abate Soda Ash activity. This roadmap will require around €2 bn investments and is expected to generate compelling economic returns.

· Develop scope 3 targets to set Science Based Targets by mid-2022, as committed in October 2020, connecting with customers and suppliers,

especially through the suppliers engagement program which engaged 250+ executives from 130+ companies, creating 60 collaborative projects.

· Assessment of potential climate change impacts on our operations due to ﬂooding, water scarcity, hurricanes, and other environmental events

through the application of best-in-class models and collaboration with external experts.

· Establishment of a task force that develops renewable energy and other energy transition projects adapted to local markets and regulations.

· Internal carbon price was raised from €50 to €100 per metric ton of CO

on greenhouse gas emissions from operations and a Sustainable Portfolio

Management tool (SPM) assessment on all capital investment decisions worldwide.

· Alignment of R&I projects with market expectations and assessment of operations exposure relating to the environment using an SPM lens.

· Linking long term incentives of senior executives to our achievements in reducing greenhouse gas emissions.

2.5.3. 2021 main actions

Our work covers four main workstreams:

· Climate emissions reductions actions are described in detail in the Extra-financial section of the report. Among the numerous actions taken,

- In Rheinberg (Germany), the first boiler shifting coal to biomass started in May 2021, and the decision to install a 2nd boiler to start before

2025 has been taken. This will allow to phase out coal and reduce the Group GHG emissions by 4%

- In Dombasle (France), the decision to shift from coal to RDF (Refuse Derived Fuel) has been taken and will allow to phase out coal by 2024

and reduce the Group GHG emissions by 2%

- The Energy Transition multiple projects implemented or committed globally in 2021 will reach 35% renewable electricity purchase

· An annual review of climate-related risks and opportunities for each product in each market performed with the Solvay SPM tool. This shows that

our climate-related “Solutions” (18% of sales) out number our climate-related “Challenges” (3% of sales). For more information, see 5.1 “Product

Design and Life Cycle Management” in the Extra-financial Statements section of this report.

· A scenario analysis, conforming to TCFD recommendations, was performed in 2019, using the International Energy Agency’s “Sustainable

Development” scenario as a reference. The impact on energy and CO

costs and on markets were assessed, showing that the potential impact on

sales outweighs the potential impact on costs. Four ELT members were directly involved in the exercise, which will be updated in 2022, taking into

account the IPCC AR6 report conclusions. Updates of the IEA “Sustainable Development” in 2020 did not justify a revision of the scenario analysis.

A full revision of the scenario analysis is planned in 2022, including reference to recent 1.5°C scenarios.

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· The current risk linked to ﬂoods and hurricanes is assessed annually with our insurers. This exercise identifies sites in risk areas and a maximum

foreseeable loss greater than 10M USD. Seven Solvay sites are located in high frequency (2% chance per year) ﬂood areas, with a loss expectancy

range of US$13.5-196.4 million. Fifteen Solvay sites are located in low frequency (0.2% chance per year) ﬂood areas, with a loss expectancy range of

US$14-243.3 million. One site is located in a wind exposed area, with a loss expectancy of US$17.3 million. Solvay has a damage insurance program

in place to cover catastrophic risks, while covering smaller losses through self-insurance.

· Sites in areas of water scarcity have been identified, and the risks have been assessed based on their water consumption and maximum foreseeable

loss. Thirty-one Solvay sites are located in areas subject to hydric stress, of which eight have been identified as having a high business impact. The

highest annual business interruption value is €400 million.

More information can be found in the Extra-financial statements chapter of the report: 4. Climate section

2.6. Regulatory framework for chemicals sustainability

RISK HORIZON: MEDIUM TERM

2.6.1. Risk description

In all major regions chemicals management legislation is developing and changing, but particularly in the EU and the US. We are closely monitoring

the upcoming European Union Chemical Strategy for Sustainability (CSS) regulatory framework, including its possible impact on our business and

operations. We are also considering the potential additional opportunities that could come from this legislation, regarding less harmful and more

biodegradable and sustainable products. Based on public comments from EU regulators and key decision makers the main focus will be on consumer

facing products and protecting human health and the environment. The US Administration is also developing a stricter regulatory framework for

chemicals, as well as a framework relating to Environmental Justice.

2.6.2. Prevention and mitigation actions

· Solvay has participated in an industry wide impact assessment, led by the European Chemical Industry Council (CEFIC), of the current proposals in

the CSS. Within this framework, the Sustainability Department of the Group of Solvay analysed the business impact with our GBUs.

· The Government and Public Affairs Department(GPA) of Solvay, together with the Product Stewardship team in our Industrial Function, is closely

monitoring the regulatory and legislative proposals that will come from the CSS, starting in Q1 2022. Meanwhile the GPA has set up a multidisciplinary

Task Force within Solvay to analyze new regulatory and legislative proposals and develop an advocacy strategy.

2.7. Emerging risk

2.7.1. Geopolitical impacts on trade and supply chain

Geopolitical rivalries can cause trade wars, supply chain constraints and regulatory deadlocks. This can make it impossible to trade across our three

key regions, impacting financial results, and potentially leading to fines and/or litigation. Our actions to mitigate this threat are currently being

defined.

3. OTHER RISKS

3.1. Market and growth – strategic risk

RISK HORIZON: MEDIUM TO LONG TERM

3.1.1. Risk description

Strategic risks in market and growth concern Solvay’s exposure to developments in our markets or our competitive environment, and the risk of

making erroneous strategic decisions.

3.1.2. Prevention and mitigation actions

· Systematic and formal analysis of markets and marketing challenges with respect to investments and innovation project ramp-ups.

· Regular performance review of strategy deployment.

· Development of long term GDP+ growth markets and building on sustainable development opportunities, particularly in the mobility, Home and

Personal Care, Healthcare, resources and environment, electrical and electronics, and Agro, Feed and Food markets.

· Development of customized, mission-critical solutions with Solvay key accounts.

· Adaptation of our operations to new energy and CO

markets.

· Strong focus on cash conversion and generation.

· Disposal of businesses that fall below the cyclicality threshold.

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3.2. Supply chain and manufacturing reliability risk

RISK HORIZON: SHORT TERM

3.2.1. Risk description

There are several risks relating 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.

· Close inspection loops with suppliers.

· Established 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 adhere to the Solvay Supplier Code of Business Integrity;

· Take ownership of mines and quarries of trona, limestone, and salt, and implement programs to reduce energy consumption.

· Improved our planning processes to help us anticipate demand, both in terms of volume and timing).

· Maintain contingency plans for the most critical suppliers.

More information can be found in the Extra-financial chapter of the report: 3.5. 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 to the consolidated financial statements, Financial instruments and financial risk management);

· Foreign exchange risk (see note F32 to the consolidated financial statements, Financial instruments and financial risk management).

· Interest-rate risk (see note F32 to the consolidated financial statements, Financial instruments and financial risk management).

· Counterparty risk (see note F32 to the consolidated financial statements, Financial instruments and financial risk management).

· Pension obligation risk (see note F31.A. Provisions for employee benefits.

· Tax litigation risk (see note F31.B. Provisions other for employee benefits.

3.3.2. Prevention and mitigation actions

A prudent financial profile and conservative financial discipline

· Investment Grade status: the Group is rated Baa2/P2 (stable outlook) by Moody’s and BBB/A2 (stable outlook) by Standard & Poor’s as of the 2021

closing.

· Solvay promotes transparency of information and engages in regular discussions with leading credit rating agencies.

Strong liquidity reserves

· As of the end of 2021, the Group has €1.2 billion in cash and cash equivalents (other current financial instruments), as well as €2.9 billion of committed

credit facilities (a multilateral revolving credit facility of €2.0 billion and an additional €0.9 billion from bilateral revolving credit facilities with key

international banking partners), which were all undrawn at the end of 2021.

· The Group has access to a Belgian Treasury Bill program for €1.5 billion and, as an alternative, to a US commercial paper program for US$500 million,

both unused at the end of 2021.

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 due to currency volatility for material exposures.

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· Mitigate the foreign exchange transactional risk at Group level by limiting P&L impact of rate ﬂuctuations between the time of invoicing and the

time of cash settlement.

· There are two periods of hedge: 2021/2025 (where Solvay is hedged at 64%) and 2026/2030 (where we are hedged at 42%). Overall avg hedge %

on 2021/2030 57%

Interest rate hedging policy

· The Group locks in the majority of its net indebtedness at fixed interest rates. Solvay monitors the interest rate market closely and enters into interest

rate swaps whenever they are deemed appropriate.

Energy and CO

hedging policy

· Solvay is hedging energy prices (gas, coal and electricity) based on the net exposure of our sales not indexed on energy prices. This policy includes

multi-year hedging transactions.

· The Group net exposure to carbon pricing is managed through hedging transactions spanning across the time horizon of the European Union

Emissions Trading Systems.

Monitoring of Group counterparties’ ratings

· For its 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 its exposure to each of these banks to a predefined threshold. We regularly monitor Credit

Default Swaps trends to assess changes in bank creditworthiness and take rapid action if required.

· For our commercial activities, Solvay’s external customer risk and cash collection are 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

· 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 practice and in full compliance with domestic regulatory expectations and laws.

· Pension plan optimization: we reduce the Group’s exposure to defined-benefit plans either by 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 thorough internal reviews and

audits 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. 2021 main actions

· Successful cash tender offer of the €750 million bonds due in September 2022 (3m par call, coupon of 1.625%) with a repurchase of €372.5 million

bonds (outstanding: €377.5 million).

· Monitoring of ESG debt capital market issuances in the chemical industry.

· Compliance for "Ibor-transition rates" to risk free rates and adjustments of financing documentations

· Competitive financing of both biomass boilers in Rheinberg (commission of a first boiler and construction of a second), including ESG content.

· Optimizing our liquidity reserves and rebalancing the refinancing strategy of some bilateral credit facilities.

· Extension of the Treasury Management Systems to bonds and credit facilities;

· Additional voluntary pension contributions: Belgium up to €100 million in Q1 2021; UK up to €140 million in Q4 2021. Further contribution of up to

€155 million in Germany under consideration for early 2022.

3.4. IT risk

3.4.1. Risk description

Our IT risk relates to an inability to:

· Ensure the continuity of digital technology services to business;

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· Provide our businesses with new and sustainable capabilities while deploying Solvay’s digital technology ambition under our new operating model.

3.4.2. Prevention and mitigation actions

· Close monitoring of the cybersecurity roadmap. (see cybersecurity section).

· Close monitoring of security and performance indicators.

· Annual IT audit program to ensure compliance with group security policies.

4. LITIGATION

With our variety of activities and geographic distribution, the Solvay Group is exposed to legal risks, particularly in the areas of product liability,

contractual relations, antitrust laws, patent disputes, tax assessments and HSE matters. In this context, litigation cannot be avoided and is sometimes

necessary in order to defend the rights and interests of the Group.

The outcome of proceedings cannot be predicted with certainty. It is therefore possible that adverse final court decisions or arbitration awards could

lead to liabilities (and expenses) that are not covered, or not fully covered, by provisions or insurance, and that could have a material impact on the

revenues and earnings of the Group.

Ongoing legal proceedings involving the Solvay Group that are currently considered to involve significant risks are outlined below. The legal

proceedings described below do not constitute an exhaustive list.

The fact that litigation proceedings are reported below is unrelated to the merits of the cases. In all the cases cited below, we are defending ourselves

vigorously and believe in the merits of our defense.

For certain cases, we have created reserves or provisions in accordance with accounting rules, to cover financial risk and defense costs (see the section

“Provisions for litigation to the consolidated financial statements” in this report).

Antitrust proceedings

In Brazil, CADE (the Brazilian antitrust authority) issued fines against Solvay and others in May 2012, relating tohydrogen peroxide activities, and in

February 2016, relating to perborate activities. Solvay’s share of these fines amounts to €29.6 million and €3.99 million respectively. We have filed a

claim with the Brazilian Federal Court contesting these administrative fines.

HSE related proceedings

· Asbestos Cases: Up to now, 21 civil proceedings have been brought before Italian Courts by past workers and relatives of deceased workers at

Solvay sites seeking damages, provisionally quantified at €12 million, in relation to diseases allegedly caused by exposure to asbestos.

- Five proceedings have ended with damages awarded for a total of around €40,000.

- One proceeding has ended with damages awarded of approximately €550,000.

- One proceeding has ended with a decision entirely favorable to Solvay, with an appeal pending.

- Ten proceedings are currently pending before the Courts of First Instance.

- One proceeding is presently pending before the Court of Appeal, after damages amounting to €13,000 were awarded by the Court of First

Instance.

- One proceeding is currently pending before the Cassation Court, after damages amounting to €3,000 were awarded by the Court of

Appeal.

- Two proceedings were settled before the Court of Appeal for about €8,000 each.

- One proceeding has been definitively terminated in favor of Solvay.

· Rosignano and Spinetta sites: criminal preliminary investigations are pending before the Criminal Court of Livorno and of Alessandria respectively,

regarding the contamination of certain areas outside these industrial sites.

· Bussi site: administrative litigation is pending in relation to the identification of the polluter of external areas at Bussi (external discharges, sold in

2017) and of the industrial site (divested in 2016).

· PFAs: Solvay Specialty Polymers USA, LLC (SpP) is a defendant in 25 separate lawsuits in the US relating to SpP’s use of per- and polyﬂuoroalkyl

substances (PFAS). The vast majority of these cases are in the federal and state courts in New Jersey, in the US, and the majority are claims by private

plaintiffs seeking medical monitoring or compensation for personal injury or other economic loss. Two of the cases involve civil claims by separate

US State governmental authorities - New Jersey and Michigan - seeking various damages, including natural resource damages. The lawsuit brought

by the State of New Jersey also seeks the environmental cleanup of PFAS pollution caused by SpP’s lone operating facility in New Jersey.

Pharmaceutical activities (discontinued):

The contractual arrangements for the sale of our pharmaceutical activities in February 2010 defined terms and conditions for the allocation and sharing

of liability arising out of activities carried out before the sale. This means that, subject to limited exceptions, Solvay’s exposure for indemnifications

to Abbott for liabilities arising out of sold activities is limited to an aggregate amount representing €500 million and with limited duration. All post-

closing indemnification claims made against Solvay have now been resolved except the following:

· 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 the €300 million received by Solvay as an additional purchase price based on post-closing ANDROGEL

sales.

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142 Overview of the

consolidated extra-

financial statements

145 Basis of preparation

145 Reporting practices

146 Materiality analysis

150 World Economic Forum:

Measuring Stakeholder

Capitalism: Core metrics and

disclosures

152 Task Force on Climate-related

Financial Disclosure

153 United Nations Sustainable

Development Goals

154 Sustainability Accounting

Standards Board (SASB)

156 Membership in associations

158 Governance

158 Solvay One Planet Guide

159 Management of the legal,

ethics, and regulatory

framework

164 Health, safety and environment

management

165 Research and innovation

167 Supply chain and procurement

169 Climate

169 Greenhouse gas emissions

172 Energy

173 Biodiversity

175 Resources

175 Product design and life cycle

management

178 Circular Economy

179 Air quality

180 Water and wastewater

182 Waste

183 Better life

183 Employee health and safety

187 Employee engagement and

well-being

189 Diversity and inclusion

192 Recruitment, development,

and retention

195 Customer welfare

197 Corporate citizenship

199 Hazardous materials

202 Critical incident risk

management

204 GRI content index

204 Statement of use and GRI 1

used

204 GRI 2: general disclosures

2021

206 GRI 3: material topics 2021

211 Moderate materiality aspects

also included in this report

Extra-nancial

statements

EXTRA-

FINANCIAL

STATEMENTS

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Highlights of 2021

In 2021, we made further advances in our

sustainability journey, in line with the targets set out

in our Solvay One Planet roadmap - an integral part

of our G.R.O.W. strategy and company Purpose.

Building on stakeholder feedback, we continued

to take actions toward becoming a low-carbon and

more inclusive company. This includes reallocating

resources to growth and sustainable businesses

and further integrating sustainability into all of

our key strategic decisions, including on research

and innovation, capital expenditure, mergers and

acquisitions activities, and investment.

In 2021, we raised the bar in the three main areas

of our Solvay One Planet roadmap

– Climate, Resources and Better Life – and we

delivered on our commitments.

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Climate

f Unveiling our plans to reach carbon neutrality on Scope 1 and 2

emissions before 2040 for all businesses except soda ash, and

before 2050 for soda ash. As a consequence, we upgraded our

2030 target for greenhouse gas emissions from -26% to -30%,

as compared to the 2018 baseline. Our Scope 3 target shall at

least meet the 2°C criteria of the Science Based Targets initiative.

Achieving a 14% (11% structural) reduction in Scope 1 and 2

emissions since 2018.

Accelerating the energy transition in our plants, with 36 projects

underway globally that will save 2.5 million tons of CO

emissions

per year.

Launching a strategic initiative to mobilize suppliers in working

together to transform the value chain. As part of this, we called

on our 400 strategic suppliers to join us in our climate journey.

Continuing our efforts to phase out the use of coal for energy

production by 2030 at a second soda ash plant, in Dombasle,

France. The plant is transitioning to primarily refuse-derived fuel.

Improving our CDP Climate rating from B to A-, which is higher

than the chemical sector average of B.

Receiving recognition for our progress in reducing our pressure

on biodiversity. Our Paulinia site in Brazil was awarded the

Wildlife Habitat Council’s (WHC) Gold Certificate, a first for a

chemical company

in this country.

f Mobilizing 15,000 employees and more than 7,500 people from

local communities and NGOs to participate in actions promoting

biodiversity, as part of our annual Citizen Day.

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Resources

f Equalling our 2019 record of 53% of Group sales generated by

sustainable solutions. We are focusing resources on developing

more sustainable solutions that meet higher performance

requirements. We have a clear roadmap for developing the

solutions for the next generation of battery technologies and, as

the European leader for this new technology, we are investing to

create the most advanced pilot plant in Europe.

f Reinforcing our portfolio of bio-based solutions, with the

acquisition of a bio-based seed care portfolio and the

development of new bio-sourced solutions for home and

personal care.

f Partnering to create circular businesses. This includes partnering

with Bridgestone and Arlanxeo to launch TECHSYN, a new

technology that gives tires unrivaled strength and environmental

performance, and advancing our tripartite partnership with

Veolia and Renault to establish a sustainable supply source for

strategic battery raw materials.

f Surpassing our 2030 target to reduce industrial waste not treated

in a sustainable way by 30%.

Better life

f Launching Solvay One Dignity, committing to nine objectives

and action plans to drive diversity, equity and inclusion at Solvay.

— Diversity: we are accelerating efforts to achieve gender

equity at all mid and senior levels by 2030. In 2021, the number

of women working at these levels reached 25%. Our upcoming

Gender Impact Assessment will help us identify where current

policies may be negatively impacting the advancement of

female employees. Three new employee resource groups (ERGs)

were also launched in 2021, helping to encourage employees to

bring their “whole self” to work.

— Equity: we are working to ensure fair recruitment. This

includes collecting data to help us identify any unjustified pay

inequities across Group profiles and publishing the results in this

report for the most significant countries, in an effort to promote

transparency. We also launched a new mentoring program

for women, which almost 25% of our female junior managers

volunteered to take part in.

— Inclusion: we launched a global survey assessing inclusive

culture at Solvay, the results of which will be used to track our

progress.

f Launching Solvay’s first employee share purchase program

to promote an ownership mindset among employees by

encouraging deeper engagement and driving value creation.

f Extending the scope of our Solvay Solidarity Fund to provide

support for employees and local communities facing hardship

in a variety of different situations, in addition to the pandemic.

f Hazardous materials: we closely monitor the Substances of

Very High Concern (SVHC) listed in the EU REACH Candidate

list and EU REACH Authorization list, by identifying all

marketed products sold in the EU and worldwide containing a

concentration of those substances above 0.1%. We go beyond

what is required by regulation, screening our own broader

internal reference list of SVHC for our products marketed

worldwide. Our target is to phase out all SVHCs present in our

marketed products at a concentration above 0.1% by 2030,

wherever feasible.

f EU Taxonomy eligible activities: we identified Solvay activities

eligible for the EU Taxonomy, an EU classification system aimed

at establishing a list of environmentally sustainable economic

activities to help the EU to scale up sustainable investment.

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Extra-financial statements

1. OVERVIEW OF THE CONSOLIDATED EXTRA-FINANCIAL STATEMENTS

Past figures are as published (without restatements).

R: reasonable assurance

L: limited assurance

Mt: Million metric tons

: Million cubic meters

PJ: Peta Joules

CLIMATE

Units 2021 2020 2019 2018 2017

PRIORITY ASPECTS

Greenhouse gas emissions

R Scope 1 Mt CO

eq. 9.6 8.9 10.6 10.4 10.2

R Scope 2 - gross market-based Mt CO

eq. 1.4 1.2 1.4 1.9 2.1

R Total Scope 1+2 Mt CO

eq.

11.0 10.1 12.0 12.3 12.3

R Scope 3 Mt CO

eq. 25.8 28.8 32.6 34.2 -

Total Scope 1+2+3 Mt CO

eq. 36.8 38.9 44.6 46.5 -

L Biodiversity

Species potentially affected Number

93 107 116 122 -

HIGH MATERIALITY ASPECTS

Energy

Fuel consumption for energy produc-

tion

PJ 105 99 107 93 92

Energy purchased PJ

33 34 38 45 49

Energy sold PJ 33 31 32 23 22

L Primary energy consumption PJ 106 103 113 115 119

L Solid fuels PJ 27 27 32 33 38

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RESOURCES

Units 2021 2020 2019 2018 2017

PRIORITY ASPECTS

Product design and life cycle management

Revenue breakdown by Sustainable Portfolio

Management (SPM) categories

R Solutions % 53 52 53 50 49

R Neutral % 28 27 27 30 31

R Challenges % 9 8 7 7 8

R Not evaluated % 10 13 13 13 12

SPM Solutions: sales by main impact category

Climate € billion 1.7 1.6 2.2 2.2 -

Resources € billion 3.7 3.2 3.5 3.1 -

Better life € billion 3.2 3.1 3.3 3.1 -

Total solutions net sales € billion 5.1 4.7 5.4 5.1 -

Circular economy

Share of of products based on recycled or re-

newable resources

% 5 5 4 - -

Water

R Total freshwater withdrawal Mm

315 314 330 330 326

Freshwater withdrawal in water-stressed areas Mm

30.7 29.0 - - -

L Chemical oxygen demand - COD metric tons

5,735 5,265 6,248 - -

Waste

R Non-hazardous industrial waste 1,000 tons 1,316 1,457 1,596 1,602 1,641

R Hazardous industrial waste 1,000 tons

74.8 71.6 86.6 93.1 99.7

R Total industrial waste 1,000 tons 1,391 1,529 1,682 1,696 1,741

Industrial non-hazardous waste not treated in a

sustainable way

1,000 tons

41.9 51.4 69.2 - -

Industrial hazardous waste not treated in a sus-

tainable way

1,000 tons

15.9 18.2 27.2 - -

Total industrial waste not treated in a sustainable

way

1,000 tons 57.8 69.7 96.4 - -

R Mining waste 1,000 tons

618 637 799 - -

HIGH MATERIALITY ASPECTS

Air emissions

L Nitrogen oxides - NOx metric tons 5,882 5,587 6,197 7,704 9,432

L Sulfur oxides - SOx metric tons

3,449 2,808 2,888 3,750 4,252

Non-methane volatile organic compounds -

NMVOC

metric tons 3,956 3,286 4,109 4,252 4,132

Ozone-depleting substances (ODS) metric tons 7.7 - - - -

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BETTER LIFE

Units 2021 2020 2019 2018 2017

PRIORITY ASPECTS

Employee health and safety

Reportable Injury and Illness Rate (RIIR)

employees and contractors

per 200,000

hours

0.43 - - - -

Lost Time Injury and Illness Rate (LTIIR)

employees and contractors

per 200,000

hours

0.22 0.14 0.13 - -

R Fatal accidents - employees and contractors number 0 0 0 0 1

Diversity and inclusion

Women in senior and middle management % 25.0 24.7 24.3 23.7 -

R Women in Solvay’s workforce %

23 24 23 23 23

R Total headcount 21,606 23,663 24,155 24,501 24,459

HIGH MATERIALITY ASPECTS

Employee engagement

L Coverage by collective agreements % 100 100 100 100 100

L Engagement index

Customer satisfaction

L Net Promoter Score® % 32 NA 33 42 36

Corporate Citizenship

Hazardous materials

Substance of very high concern (SVHC) according

to REACH criteria present in products sold

Number

37 40 29 - -

Percentage of completion of analysis of safer

alternatives for marketed products

45 51 54 - -

Of which effective replacement % 30 31 30 - -

Critical incident risk management

Process safety incident with release to

environment

Number 30 26 34 - -

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2. BASIS OF PREPARATION

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.

· United Nations Global Compact: the information provided serves as a progress report on implementation of the United Nations Global Compact’s

ten principles.

· International Integrated Reporting Council (IIRC): Solvay adheres to the principles and content elements of Integrated Reporting, as described in

the “International Framework” published by the IIRC.

· 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.

· 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.

· World Business Council for Sustainable Development (WBCSD): Solvay’s report aligns with the WBCSD ESG Disclosure Handbook guidance in

terms of process and content selection.

· World Economic Forum: Measuring Stakeholder Capitalism - Towards Common Metrics and Consistent Reporting of Sustainable Value Creation -

September 2020: Solvay reports on the WEF report Core Metrics and Disclosures.

· United Nations Sustainable Development Goals: Solvay has identified the nine Sustainable Development Goals on which it can have the most

impact, through its operations or across the value chain, in line with the materiality analysis.

· 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®.

· EU Taxonomy: a first estimate of eligible activities as defined by the EU Taxonomy in the delegated act of April 2021 is presented in 5.1. Product

design and life cycle management.

2.1. Reporting practices

GRI DISCLOSURES 2-2 2-3 2-4 2-7

2.1.1. Reporting scope and boundaries

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, social and environmental

indicators are consolidated according to the equity share approach described in the Greenhouse Gas Protocol Corporate Accounting and Reporting

Standard.

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 are not restated for extra-financial indicators.

The reporting scope includes all high materiality aspects, as identified in Solvay’s materiality analysis. Some low or moderate materiality aspects have

been included because they are requested by specific groups of stakeholders.

Reporting practices specific to the dimension reported are integrated in the corresponding “Definitions” subsection.

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2.2. Materiality analysis

GRI DISCLOSURES: 3-1 3-2

Solvay bases our sustainability priorities 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;

· Sustainability Accounting Standards Board (SASB) for the list of aspects and for prioritization criteria.

2.2.1. Materiality table

Category Moderate materiality High materiality and priorities

Governance

Customer privacy

Data security

Selling practices and product labeling

Risk management

Management of the legal, ethics and regulatory

framework

Climate Physical impacts of climate change

Greenhouse gas emissions

Energy

Biodiversity

Resources

Supply chain and procurement

Materials sourcing and efficiency

Product design and lifecycle management

Air quality

Water and wastewater

Waste

Better life

Recruitment, development and retention

Product quality

Access and affordability

Employee health and safety

Employee engagement and wellbeing

Diversity and inclusion

Customer welfare

Corporate citizenship

Hazardous materials

Critical incident risk management

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2.2.2. 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 ensuring consistency with

the Group’s risk analysis.

Identification of aspects

Use of the Value Reporting Foundation - SASB Materiality Map list of aspects.

The SASB Materiality Map identifies likely material sustainability

aspects on an industry-by-industry basis.

Prioritization of aspects

Use of the SASB Materiality Map prioritization criteria:

- Evidence of interest, for Solvay and/or for Solvay stakeholders, including evidence of potential

impacts

- Evidence 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 the prioritization analysis.

Validation

Review of the analysis by the Executive Committee and the Global Business Units and

Corporate Functions leaders. The review includes verification of the 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 and Solvay experts. The findings inform and contribute to the

prioritization review in the next reporting cycle.

Stakeholder inclusiveness and sustainability

context

Indirectly taken into account through:

- The exhaustive list of aspects of the SASB’s Materiality Map;

- The “evidence of interest criteria”, which includes the analysis of documents from

representatives of stakeholder groups, with emphasis on written evidence.

Report

The high materiality aspects are included in Solvay’s dashboards and reported in the annual

report, with assurance from corporate auditors.

2.2.3. 2021 updates

Solvay’s materiality analysis is unchanged compared to 2020. The Covid-19 crisis confirmed the priorities defined during the Solvay One Planet

preparative work, and in particular:

· An increased emphasis on climate change and biodiversity, with evidence of the link between human activities and the pandemic and the changes

in air quality during lockdown phases.

· An increased emphasis on social aspects, with evidence of minorities being the most vulnerable populations.

2.2.4. 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/.

GOVERNANCE

Aspect Boundaries Evidence of

interest

Evidence of

financial impact

Forward looking

adjustment

Materiality

Management of the legal,

ethics and regulatory

framework

Alignment to ethics

frameworks and regulatory

requirements.

Operations Value

chain SDG-12

High

High materiality

for the Chemical

industry

Medium

Revenue, costs: yes

Assets, liabilities:

yes

Cost of capital: no

Yes

Probability, magnitude:

yes

Externalities: yes

High

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CLIMATE

Aspect Boundaries Evidence of

interest

Evidence of

financial impact

Forward looking

adjustment

Materiality

Greenhouse gas emissions

Management of scope 1,

2 and 3 greenhouse gas

emissions Operations Value

chain SDG-13

High

High materiality

for the Chemical

industry;

Solvay is more

-intensive

than the chemical

industry average

High

Revenue, costs: yes

Assets, liabilities:

yes

Cost of capital: no

Yes

Probability, magnitude:

yes

Externalities: yes

Priority

Energy

Energy production and

consumption optimization

and management of energy

transition

Operations

Upstream value

chain

SDG-13

SDG-7

High

Solvay is more

energy-

intensive than the

chemical industry

average

High

Revenue, costs: yes

Assets, liabilities:

yes

Cost of capital: no

Yes

Probability, magnitude:

yes

Externalities: yes

Priority

Biodiversity

Management of impacts

on biodiversity through

operations and throughout

the value chain

Operations

Value chain

SDG-14

SDG-15

High

Priority issue at

planetary scale

Low

Revenue, costs: low

Assets, liabilities:

Cost of capital: no

Yes

Probability, magnitude:

yes

Externalities: yes

Priority

RESOURCES

Aspect Boundaries Evidence of

interest

Evidence of

financial impact

Forward looking

adjustment

Materiality

Product design and life cycle

management

Management of value chain

economic, environmental and

social impacts of products

and services

Operations

Value chain

SDG-12

High

High materiality

for the chemical

industry

High

Revenue, costs: yes

Assets, liabilities:

yes

Cost of capital: no

Yes

Probability, magnitude:

yes

Externalities: yes

Priority

Air quality

Management of emissions of

air pollutants from operations

Operations

SDG-15

High

High materiality

for the chemical

industry

High

Revenue, costs: yes

Assets, liabilities:

yes

Cost of capital: no

Yes

Probability, magnitude:

yes

Externalities: yes

High

Water and wastewater

Management of water

withdrawals, discharge and

consumption

Operations

SDG-6

SDG-14

High

High materiality

for the chemical

industry

High

Revenue, costs: yes

Assets, liabilities:

yes

Cost of capital: no

Yes

Probability, magnitude:

yes

Externalities: yes

Priority

Waste

Management of solid wastes

from operations, including

hazardous wastes

Operations

SDG-12

High

High materiality

for the chemical

industry

High

Revenue, costs: yes

Assets, liabilities:

yes

Cost of capital: no

Yes

Probability, magnitude:

yes

Externalities: yes

Priority

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BETTER LIFE

Aspect Boundaries Evidence of

interest

Evidence of

financial impact

Forward looking

adjustment

Materiality

Employee health and safety

Occupational safety,

industrial hygiene and health

management of employees

and contractors

Operation

Contractors SDG-3

High

High materiality

for the chemical

industry

High

Revenue, costs: yes

Assets, liabilities:

yes

Cost of capital: no

Yes

Probability, magnitude:

yes

Externalities: yes

Priority

Employee engagement and

well-being

Management of labor

practices, social dialogue and

employee well-being

Operations

SDG-8

High

Historical

commitment of the

Solvay Group since

its foundation

Medium

Revenue, costs: yes

Assets, liabilities:

yes

Cost of capital: no

Yes

Probability, magnitude:

Externalities: yes

High

Diversity and inclusion

Non-

discrimination and diversity

management in operations

and management structures

Operations

SDG-8

High

Growing

importance of

regional diversity

for specific

business units

Medium

Revenue, costs: yes

Assets, liabilities:

Cost of capital: no

Yes

Probability, magnitude:

yes

Externalities: yes

Priority

Customer welfare

Customer relations and

customer satisfaction

management

Downstream value

chain

SDG-12

Medium

High for some

business units

(access to

customers’

development

pipelines)

High

Revenue, costs: yes

Assets, liabilities:

Cost of capital: no

Yes

Probability, magnitude:

yes

Externalities: yes

High

Corporate citizenship

Management of community

relationships, corporate

citizenship and philanthropy.

Business programs for social

needs

Local communities

Value chain

Society at large

SDG-17

High

May be linked to

license to operate;

potential positive

or negative impacts

beyond chemical

value chain impacts

Low

Revenue, costs: no

Assets, liabilities:

yes

Cost of capital: no

Yes

Probability, magnitude:

yes

Externalities: no

High

Hazardous materials

Management of hazardous

materials in raw materials,

production processes and

sold products

Operations

Value chain

SDG-3

High

High materiality

for the chemical

industry;

REACH/SVHC

High

Revenue,costs: yes

Assets, liabilities:

yes

Cost of capital: no

Yes

Probability,

magnitude: yes

Externalities: yes

High

Critical incident risk

management

Process safety programs

and management

of consequences of

environmental accidents

Operations

Local communities

SDG-3

High

High materiality

for the chemical

industry

High

Revenue,costs: yes

Assets, liabilities:

yes

Cost of capital: no

Yes

Probability, magnitude:

yes

Externalities: yes

High

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2.3. World Economic Forum: Measuring Stakeholder Capitalism: Core metrics and

disclosures

Solvay discloses most of the sustainability disclosure topics and accounting metrics listed in the WEF report “Measuring Stakeholder Capitalism -

Towards Common Metrics and Consistent Reporting of Sustainable Value Creation”, September 2020.

Theme Governance: Core metrics and disclosures Reference

Governing

purpose

Setting purpose

The company’s stated purpose, as the expression of the means by which a business proposes

solutions to economic, environmental and social issues. Corporate purpose should create value

for all stakeholders, including shareholders.

https://www.solvay.com/en/

our-company/our-purpose

Quality of

governing body

Governance body composition

Composition of the highest governance body and its committees by: competencies relating

to economic, environmental and social topics; executive or non-executive; independence;

tenure on the governance body; number of each individual’s other significant positions and

commitments, and the nature of the commitments; gender; membership of under-represented

social groups; stakeholder representation.

Corporate governance

statement

Stakeholder

engagement

Material issues impacting stakeholders

A list of the topics that are material to key stakeholders and the company, how the topics were

identified and how the stakeholders were engaged.

Extra-financial statements:

2.2 Materiality analysis

Ethical behavior

Anti-corruption

1. Total percentage of governance body members, employees and business partners who have

received training on the organization’s anti-corruption policies and procedures, broken down by

region:

a) total number and nature of incidents of corruption confirmed during the current year, but

related to previous years; and

b) total number and nature of incidents of corruption confirmed during the current year, related

to this year.

2. Discussion of initiatives and stakeholder engagement to improve the broader operating

environment and culture, in order to combat corruption.

Corporate governance

statement

Extra-financial statements:

3.2. Management of the

legal, ethics and regulatory

framework

Protected ethics advice and reporting mechanisms

A description of internal and external mechanisms for:

1. seeking advice about ethical and lawful behavior and organizational integrity; and

2. reporting concerns about unethical or unlawful behavior and lack of organizational integrity.

Extra-financial statements:

3.2. Management of the

legal, ethics and regulatory

framework

Risk and

opportunity

oversight

Integrating risk and opportunity into business process

Company risk factor and opportunity disclosures that clearly identify the principal material risks

and opportunities facing the company specifically (as opposed to generic sector risks), the

company appetite with respect to these risks, how these risks and opportunities have moved

over time and the response to these changes. These opportunities and risks should integrate

material economic, environmental and social issues, including climate change and data

stewardship.

Risk management

Extra-financial statements:

5.1. Product design and life

cycle management

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Theme Planet: Core metrics and disclosures

Climate change

Greenhouse gas (GHG) emissions

For all relevant greenhouse gasses (e.g. carbon dioxide, methane, nitrous oxide, F-gasses, etc.),

report in metric tons of carbon dioxide equivalent (tCO

e) GHG Protocol scope 1 and scope 2

emissions.

Estimate and report material upstream and downstream (GHG Protocol scope 3) emissions

where appropriate.

Extra-financial statements:

4.1. Greenhouse gas

emissions

TCFD implementation

Fully implement the recommendations of the Task Force on Climate-related Financial

Disclosures (TCFD). If necessary, disclose a timeline of at most three years for full

implementation. Disclose whether you have set, or have committed to set, GHG emissions

targets that are in line with the goals of the Paris Agreement – to limit global warming to well

below 2°C above pre-industrial levels and pursue efforts to limit warming to 1.5°C – and to

achieve net-zero emissions before 2050.

Extra-financial statements:

2.4. Task force on Climate-

related Financial Disclosure

Nature loss

Land use and ecological sensitivity

Report the number and area (in hectares) of sites owned, leased or managed in or adjacent to

protected areas and/or key biodiversity areas (KBA).

Extra-financial statements:

4.3. Biodiversity

Freshwater

availability

Water consumption and withdrawal in water-stressed areas

Report for operations where material: megaliters of water withdrawn, megaliters of water

consumed and the percentage of each in regions with high or extremely high baseline

water stress, according to WRI Aqueduct water risk atlas tool. Estimate and report the same

information for the full value chain (upstream and downstream) where appropriate.

Extra-financial statements:

5.4. Water and wastewater

Theme People: Core metrics and disclosures

Dignity and

equality

Diversity and inclusion (%)

Percentage of employees per employee category, by age group, gender and other indicators

of diversity (e.g. ethnicity).

Extra-financial statements:

6.3. Diversity and inclusion

Pay equality (%)

Ratio of the basic salary and remuneration for each employee category by significant locations

of operation for priority areas of equality: women to men, minor to major ethnic groups and

other relevant equality areas.

Extra-financial statements:

6.3. Diversity and inclusion

Wage level (%)

Ratios of standard entry level wage by gender compared to local minimum wage.

Ratio of the annual total compensation of the CEO to the median of the annual total

compensation of all employees, except the CEO.

Wage level data is

disclosed according to

the legal requirements

of various countries but

metrics are not currently

unified. Work is ongoing

to define the appropriate

consolidation metric.

Corporate governance

statement: 6.

Compensation report

Risk for incidents of child, forced or compulsory labor

An explanation of the operations and suppliers considered as having significant risk for

incidents of child labor, forced or compulsory labor. Such risks could emerge in relation to:

a) type of operation (such as manufacturing plant) and type of supplier; and

b) countries or geographic areas with operations and suppliers considered at risk.

Extra-financial statements:

3.2. Management of the

legal, ethics, and regulatory

framework

Health and well-

being

Health and safety (%)

The number and rate of fatalities as a result of work-related injury; high-consequence work-

related injuries (excluding fatalities); recordable work-related injuries; main types of work-

related injury; and the number of hours worked.

An explanation of how the organization facilitates workers’ access to non-occupational medical

and healthcare services, and the scope of access provided for employees and workers.

Extra-financial statements:

6.1. Employee health and

safety

Skills for the

future

Training provided (#, $)

Average hours of training per person that the organization’s employees have undertaken during

the reporting period, by gender and employee category (total number of hours of training

provided to employees divided by the number of employees).

Average training and development expenditure per full time employee (total cost of training

provided to employees divided by the number of employees).

Extra-financial statements:

6.4. Recruitment,

development and retention

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Theme Prosperity: Core metrics and disclosures

Employment and

wealth generation

Absolute number and rate of employment

1. Total number and rate of new employee hires during the reporting period, by age group,

gender, other indicators of diversity and region.

2. Total number and rate of employee turnover during the reporting period, by age group,

gender, other indicators of diversity and region.

Extra-financial statements:

6.4. Recruitment,

development and retention

Community and

social vitality

Economic contribution

1. Direct economic value generated and distributed (EVG&D), on an accruals basis, covering

the basic components for the organization’s global operations, ideally split by:

– revenues

– operating costs

– employee wages and benefits

– payments to providers of capital

– payments to government

– community investment.

2. Financial assistance received from the government: total monetary value of financial

assistance received by the organization from any government during the reporting period.

Extra-financial statements:

1. Overview of the

consolidated results

Financial investment contribution

1. Total capital expenditures (Capex) minus depreciation, supported by narrative to describe

the company’s investment strategy.

2. Share buybacks plus dividend payments, supported by narrative to describe the company’s

strategy for returns of capital to shareholders.

Financial statements:

2. Notes to the

consolidated financial

statements

Innovation of

better products

and services

Total R&D expenses ($)

Total costs related to research and development.

Financial statements:

2. Notes to the

consolidated financial

statements

Community and

social vitality

Total tax paid

The total global tax borne by the company, including corporate income taxes, property taxes,

non-creditable VAT and other sales taxes, employer-paid payroll taxes and other taxes that

constitute costs to the company, by category of taxes.

Financial statements:

2. Notes to the

consolidated financial

statements

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 report, and provides a self-assessment of Solvay’s level of

alignment with the TCFD recommendations.

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TCFD recommendation Reference

GOVERNANCE

The Charter of Corporate Governance describes how the Board of Directors manages sustainability-related

aspects 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.

Corporate governance

statement

A Climate Risks Officer has been appointed at the Executive Committee level. They are in charge of ensuring

that climate-related aspects are adequately considered in the Group’s strategy and operations.

Risk management:

1. Risk management process

STRATEGY

Long-term horizon assumptions are presented in the description of megatrends in the “Global business trends

driving our markets” section of this report. Medium-term assumptions (in the coming five years) are explained

in the description of Solvay’s main markets. Short-term assumptions (one year) are presented in the Group’s

outlook.

Reinventing:

3. Business environment

Performance:

7. Outlook

Climate-related risks and opportunities were fully reviewed in 2019 and are described in the “Risk

management” chapter. Four main risk categories were analyzed:

value chain transition risks (using the Sustainable Portfolio Management methodology);

- scenario analysis, using the International Energy Agency “Sustainable Development” scenario as a

reference;

- acute physical risks linked to droughts, hurricanes and earthquakes;

- chronic physical risks linked to water scarcity.

Risk management:

2. Solvay’s main risks

A scenario analysis was conducted in 2019, using the International Energy Agency “Sustainable Development”

scenario as a reference. Impacts on energy and CO

costs (including impact on raw material costs) and impacts

on main markets were assessed. Four Executive Committee members were directly involved in the exercise.

According to this exercise, the order of magnitude of favorable impacts on markets outweighs the negative

impact on energy and CO

costs.

Risk management:

2. Solvay’s main risks

The presentation of the Group’s main risks includes timescales (short-, medium- or long-term horizons).

Quantification of impacts is not disclosed.

Risk management:

2. Solvay’s main risks

RISK MANAGEMENT

The risk management process, the main risks and the process used to rank them are described in the "Risk

management" chapter.

Risk management

Analysis of value chain sustainability-related risks and opportunities is done through the Sustainable Portfolio

Management methodology, for each product in each application or market, and includes climate change

transition risks.

Extra-financial statements:

5.1. Product design and life

cycle management

“Greenhouse gas emissions” (GHG) have been identified as a priority in the Group’s materiality 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. "Climate-related physical risks" have been

ranked up to now as “moderate materiality aspects”.

Extra-financial statements:

2.2. Materiality analysis

Risk management:

2. Solvay’s main risks

The Sustainable Portfolio Management tool is a requirement in key Group processes and, in particular, in the

assessment of capital expenditures projects, research and innovation projects, and acquisition and divestiture

projects.

Extra-financial statements:

5.1. Product design and life

cycle management

METRICS AND TARGETS

The strategic objectives used to drive sustainable value creation are described in the Solvay scorecard. They

have been fully reviewed in the context of the Solvay One Planet sustainability ambition, published in February

2020.

Reinventing:

4. Sustainable value creation

Greenhouse gas emissions, energy consumption, and Sustainable Portfolio Management metrics and targets are

reported in the “Extra-financial statements” chapter. Solvay has set a new 2030 objective to reduce scope 1 and

2 greenhouse gas emissions, in line with a “well below 2°C” trajectory, committed to set science-based targets,

in line with the Science Based Targets initiative requirements, and targets carbon neutrality before 2050. Solvay

will also not build new coal-powered plants and commits to phase out coal usage in energy production by 2030

wherever renewable alternatives exist.

Extra-financial statements:

4.1 Greenhouse gas

emissions

5.1. Product design and life

cycle management

Greenhouse gas scope 1, scope 2 and scope 3 emissions are fully reported and audited. The scope of emissions

reporting is consistent with financial reporting.

Extra-financial statements:

4.1 Greenhouse gas

emissions

2.5. 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) includes specific targets to be achieved by 2030. Achieving the SDGs requires efforts by governments, the private sector,

civil society, communities and individuals.

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Nine leading chemical companies, including Solvay, and two industry associations formed a dedicated working group, convened by the World

Business Council for Sustainable Development (WBCSD). This working group took a leadership role in piloting and refining the three-step framework

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 impacts can be grouped into three categories: climate, resources and quality of 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 and biodiversity, which includes the Group’s energy consumption and greenhouse gas emissions, and other emissions or efﬂuents that put

pressure on biodiversity, but also products that may impact customers’ energy consumption or greenhouse gas emissions:

- SDG 7: Affordable and clean energy

- SDG 13: Climate action

- SDG 14: Life below water

- SDG 15: Life on land

· Resources, which includes the Group’s raw material consumption, water consumption, efﬂuents, emissions and waste generation, but also products’

life cycles and end-of-life management:

- SDG 12: Responsible consumption and production

· Better life, which includes the Group’s management of hazardous materials, people, process and product safety, social dialogue initiatives and

potential social impacts of 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

2.6. Sustainability Accounting Standards Board (SASB)

Solvay bases our materiality analysis on the SASB Materiality Map® list of material aspects. In some cases, aspects have been rephrased to fit the

vocabulary commonly used in the chemical industry, or combined differently.

Solvay list of material aspects 2020 SASB Materiality Map® topics list

Management of the legal, ethics and regulatory framework

Business ethics, competitive behavior, human rights, management of the legal and

regulatory framework

Supply chain and procurement Supply chain management, materials sourcing and efficiency

Risk management Systemic risk management, physical impacts of climate change

Greenhouse gas emissions GHG emissions

Energy Energy management

Biodiversity Ecological impacts

Product design and life cycle management

Product design and life cycle management,

business model resilience

Air quality Air quality

Water and wastewater Water and wastewater management

Waste Waste

Employee health and safety Employee health and safety

Employee engagement and well-being Labor practices

Diversity and inclusion Diversity and inclusion

Recruitment, development and retention Employee engagement

Customer welfare Customer welfare

Corporate citizenship Community relations

Hazardous materials Hazardous materials management, product safety

Critical incident risk management Critical incident risk management

Solvay discloses most of the sustainability disclosure topics and accounting metrics listed in the SASB Chemicals Sustainability Accounting Standard

(October 2018).

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Topic SASB - CHEMICALS disclosure topics Reference

Greenhouse

gas emissions

Gross global Scope 1 emissions, percentage covered under emissions-limiting

regulations

Extra-financial statements:

4.1 Greenhouse gas emissions

Discussion of long-term and short-term strategy or plan to manage scope 1 emissions,

emissions reduction targets and an analysis of performance against those targets

Extra-financial statements:

4.1 Greenhouse gas emissions

Air quality

Air emissions of the following pollutants: (1) NOX (excluding N2O), (2) SOX, (3) volatile

organic compounds (VOCs), (4) hazardous air pollutants (HAPs)

Extra-financial statements:

5.3. Air quality

Hazardous air pollutants not

disclosed

Energy

management

(1) Total energy consumed, (2) percentage grid electricity, (3) percentage renewable

energy, (4) total self-generated energy

Extra-financial statements:

4.2. Energy

Water

management

(1) Total water withdrawn, (2) total water consumed, percentage of each in regions with

high or extremely high baseline water stress

Extra-financial statements:

5.4. Water and wastewater

Number of incidents of non-compliance associated with water quality permits,

standards and regulations

Extra-financial statements:

6.8. Critical incident risk

management

Description of water management risks and discussion of strategies and practices to

mitigate those risks

Extra-financial statements:

5.4. Water and wastewater

Hazardous

waste

management

Amount of hazardous waste generated, percentage recycled Extra-financial statements:

5.5. 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 and

contract workers to long-term (chronic) health risks

Extra-financial statements:

6.1. Employee health and safety

Product design for

use-phase

efficiency

Revenue from products designed for use-phase resource efficiency Extra-financial statements:

5.1. Product design and life

cycle management

Safety and

environmental

stewardship of

chemicals

(1) Percentage of products that contain Globally Harmonized System of Classification

and Labeling of Chemicals (GHS) Category 1 and 2 Health and Environmental

Hazardous Substances, (2) percentage of such products that have undergone a hazard

assessment

Extra-financial statements:

6.7. Hazardous materials

Discussion of strategy to (1) manage chemicals of concern and (2) develop alternatives

with reduced human and/or environmental impact

Extra-financial statements:

6.7. Hazardous materials

Genetically

modified

organisms

Percentage of products by revenue that contain genetically modified organisms (GMOs) Not disclosed

Management of the

legal

and regulatory

environment

Discussion of corporate positions related to government regulations and/or policy

proposals that address environmental and social factors affecting the industry

Extra-financial statements:

2.7. Membership in associations

Operational

safety,

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:

6.8. Critical incident risk

management

Number of transport incidents Extra-financial statements:

6.8. Critical incident risk

management

Activity metric

Production by reportable segment Solvay cannot share information

that can be considered

competitively sensitive for

antitrust compliance reasons.

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2.7. Membership in associations

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 disagreement in a number of ways, including internal

discussion within working groups or public stances that differ from those of the trade associations.

Senior Solvay representatives sit on the steering boards of many of those associations. 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.

2.7.1. International Council of Chemical Associations

Solvay is an active member of the International Council of Chemical Associations (ICCA). Solvay’s CEO, Ilham Kadri, is a member of the Board of

Directors. 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.

2.7.2. European Chemical Industry Council

The European Chemical Industry Council (Cefic) is the forum and the voice of the chemical industry in Europe. Solvay CEO Ilham Kadri is Vice-President

and Member of the Cefic Board ExCom. The association facilitates dialogue that 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 leading a proactive industry response to the need for a more innovative and sustainable

chemical industry.

2.7.3. 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 1200 companies nationwide, and provides expertise and support relating to technical, economic and fiscal legislation, and social and

labor affairs. Solvay representatives contribute to all key commissions. This includes those concerning competitiveness with two Solvay sites rated

among a pool of “unique” sites in France, energy and logistics, which focuses on the decarbonation subsidy plan, and health, safety and environment

(HSE).

2.7.4. 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 policy makers 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.

2.7.5. 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 product

stewardship 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.

2.7.6. Brazilian Chemical Industry Association

Solvay works with the Brazilian Chemical Industry Association (ABIQUIM) and its other members to help make Brazil’s chemical industry more

competitive and sustainable. Solvay is represented on the Board of Directors and 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 and trade remedies, logistics and supply chain, and innovation.

2.7.7. Indian Chemical Council

The Indian Chemical Council (ICC) is the leading industry body representing all segments of the Indian Chemical Industry. Solvay sits on the Executive

Council of the ICC. The ICC monitors and helps frame industry-specific government legislation, formally interacts with the relevant authorities

regarding policies and regulatory matters and is recognized as the official voice of the Indian Chemical Industry. It also provides a forum for dialogue

and debate within the chemical industry, channeling and reinforcing the industry’s endeavors to boost development in India. The ICC promotes the

Responsible Care® initiative and encourages safety, research and development, energy conservation and quality consciousness within the industry

by organizing workshops and seminars and presenting annual awards recognizing excellence and outstanding contributions to the chemical industry.

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2.7.8. 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 of this

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. Solvay CEO Ilham Kadri gave a virtual keynote speech at its annual event, “CPCIC”, in 2020.

2.7.9. Association of International Chemical Manufacturers

The AICM represents nearly 70 major multinational companies in the Chinese chemical industry 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 policy

makers, and strengthens the contributions made by the chemical industry to the economy.

2.7.10. 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 that

most inﬂuence the business performance and growth of European companies, in Europe and globally. Within this framework, 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 the federation position.

2.7.11. European Round Table of Industrialists

The European Round Table of Industrialists (ERT) is a forum that brings together around 50 CEOs of European companies. Solvay CEO Ilham Kadri

is a member of the Steering Committee of the ERT. Among its activities, the ERT 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. Solvay CFO Karim Hajjar is a member of the ERT Finance Task Force, and sustainable finance

is a key part of the agenda.

2.7.12. World Business Council for Sustainable Development

The World Business Council for Sustainable Development (WBCSD) is a CEO-led organization of over 200 leading businesses working together to

accelerate the transition to a sustainable world. Solvay has been an active member since 2010, and Solvay CEO Ilham Kadri is personally involved.

In 2021, the WBCSD appointed Ilham Kadri as its new executive committee chair. She is the WBCSD's first female chair in its 26-year history. Solvay

CFO Karim Hajjar serves as co-chair of the Redefining Value Program. Solvay plays an active role in four of the six programs:

· Redefining Value Program: Redefining Value helps companies measure and manage risk, gain competitive advantage and seize new opportunities

by understanding environmental, social and governance (ESG) information. By building collaborations and developing tools, guidance, case

studies, engagement and education opportunities to help companies incorporate ESG performance into mainstream business and finance systems,

the ultimate goal is to improve decision-making and external disclosure, eventually transforming the financial system so that it rewards the most

sustainable companies.

· Circular Economy: The future of business is circular, and there’s no room for waste in it. Factor 10, the WBCSD's circular economy program, brings

circularity into the heart of business leadership and practice. It builds a critical mass of engagement within and across businesses to spur the circular

economy to deliver and scale the solutions needed to build a sustainable world.

· Climate and Energy: Combating climate change and transforming the energy system are core challenges on the path to a sustainable future for

business, society and the environment. The Paris Agreement has sent a decisive and global signal that the start of the transition to a thriving, clean

economy is inevitable, irreversible and irresistible. The WBCSD Climate and Energy Program facilitates interaction on cutting-edge climate and

energy topics between WBCSD members, their peers and stakeholders as they address critical industry issues and share best practice and solutions.

· People: Our current society is characterized by a range of dynamic shifts and evolutions. We are faced with a world that is polarizing, a world that

presents risks and opportunities in the way we work, a world that is on the move and a world in which people are living beyond their means. The

People program provides solutions that support companies by ensuring that they remain in tune with the needs, rights, goals and aspirations of

society against the backdrop of this rapidly evolving landscape.

Solvay also plays an active role in the WBCSD Chemicals Group. Together with leading chemical company members, ACC and Cefic published the

SDG Roadmap for the Chemical Sector in 2018. This methodology provides clear guidance on how the chemical sector can contribute to change

across the spectrum of the SDGs, unlocking their value by acting on key impact opportunities. Notably, Solvay works proactively to accelerate

adoption of our Sustainable Portfolio Management system across the chemical industry and other sectors.

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3. GOVERNANCE

3.1. Solvay One Planet Guide

GRI DISCLOSURES 2-24

3.1.1. Definition

The Solvay One Planet Guide is the new sustainability reference framework for the Solvay Group. While the previous Solvay Way reference framework

focused mainly on processes, the Solvay One Planet Guide explains our ambitions and the reasons why we must act now.

This Guide is organized in three work axes: content, performance and assessment.

Through the content axis we help every Solvay employee understand the indicators that are part of our Solvay One Planet program. The Group

targets are sorted per impact category, namely climate, resources and better life, and for each target we describe:

What we are talking about, why it is important and the main legislation (where relevant).

Solvay’s ambition: internal definitions which are relevant for the target, our footprint, our actions and ambitions, and key contacts.

The performance axis includes a dashboard with the results of the Solvay One Planet targets for the entire Group.

The assessment axis allows us to identify each entity’s main strengths and weaknesses, and develop plans for improvement.

3.1.2. Management approach

The Solvay One Planet Guide was launched on September 1, 2021, and addressed to every Solvay employee.

Solvay’s Corporate Sustainable Development Function defines and deploys Solvay One Planet. The content axis has already been deployed, while

the performance axis is under construction, integrating all existing tools currently used to measure the performance of each component of the

strategy. The assessment axis is currently being evaluated in order to provide a solid framework for progress.

In each of our Global Business Units (GBUs), a member of the leadership team acts as head of sustainability. They are in charge of integrating

sustainability aspects into the GBU’s strategy and operations.

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 in the strategy and objectives, ensure necessary training is organized and develop an annual and multi-

year roadmap to meet final objectives. They are then responsible for implementing the roadmap in their 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:

· evolution of frameworks and reporting standards, such as GRI Standards;

· auditors report on high materiality aspects;

· feedback from practitioners;

· feedback from sustainability rating agencies;

· feedback received on the annual report, such as the World Business Council for Sustainable Development’s “Reporting Matters” yearly analysis;

· evolution of Solvay’s strategy.

3.1.3. Indicators and targets

Solvay One Planet is our roadmap to a sustainable future that provides shared value for all. It is structured around the three major impact categories,

climate, resources, and better life, and sets out the following main targets to be achieved by 2030, as compared to the 2018 baseline:

Climate Pillar

· GHG reduction: -30% of scope 1 and 2 greenhouse gas emissions by 2030 and carbon neutrality by 2050.

· Coal phase-out: phase out coal usage in energy production wherever renewable alternatives exist.

· Biodiversity preservation: -30% of negative pressure.

Resource Pillar

· Sustainable solutions: 65% of total Group sales from sustainable solutions.

· Circular economy: more than double total Group sales from renewable or recycled resources.

· Waste: -30% of industrial waste.

· Water: -25% of freshwater intake.

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Better Life Pillar

· Safety: make Solvay a safe organization with a zero accidents mindset.

· Inclusion and diversity: gender parity for mid- and senior-level management by 2030.

· Maternity and paternity leave: extended to 16 weeks and to co-parents inside the company regardless of gender in 2021.

3.2. Management of the legal, ethics, and regulatory framework

GRI DISCLOSURES 2-26 2-27 3-3 205-2 205-3 406-1 412-1 412-2 415-1

MATERIALITY: HIGH

Management of the legal, ethics and regulatory framework encompasses business ethics, namely human rights, anti-corruption and 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.

The Code of Business Integrity is available on Solvay's website.

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 or

entertainment 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 our 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 applicable in each

region, as well as charitable donations and sponsorship with charitable purpose and requires manager approval for accepting or giving them. The

use of 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 has a Global Human Rights Committee (GHRC), which oversees implementation of the policy, ensures compliance and monitors the Group’s

performance. Members of the Global Human Rights Committee include the heads of the following Solvay business service activities and/or their

delegates: General Counsel, Compliance, Human Resources, Procurement, Communication, Internal Audit and Risk Management, and Sustainable

Development. The GHRC is chaired by the Group General Counsel, who is the head of the General Counsel Function. Members of Solvay’s Global

Business Units and other business service activities contribute to the work of the GHRC on an ad hoc basis, as necessary.

The GHRC discusses its activities before the Group’s annual report is issued, and also validates any human rights reporting made in conjunction with

the report. Upon request, the Chair of the GHRC may be called upon to provide an annual report to the Audit Committee.

Human rights due diligence and risk assessment

Two parallel processes are used to assess human rights risks at Solvay sites. These focus on Solvay employees, based on internal data, or on our

business partners, namely suppliers and contractors identified according to the risk associated with the country they operate in. Six human rights

dimensions are considered: child labor; forced labor; trafficking in persons; human development; freedom of association; and collective bargaining.

The assessment is used by Solvay’s internal auditors to identify priorities for their work on the subject.

The assessment was suspended during the Covid-19 crisis, as priorities shifted to protecting the most vulnerable employees and local communities

from the impact and consequences of the pandemic.

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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 Policy

that stresses the importance of strict adherence to all competition laws. It has been approved by Solvay’s Executive Committee and is published on

the Solvay 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.

3.2.2. Resources and responsibilities

A compliance organization under the leadership of the Chief People Officer reinforces a Group-wide culture based on ethics and compliance.

The Ethics and Compliance Department consists of Regional Compliance Officers who serve in the four zones in which the Group operates, under the

direction of the Chief Compliance Officer. This department is responsible for investigating, either alone or with the assistance of other departments,

all reports that are brought to its attention. The Chief Compliance Officer reports to the Chief People Officer. All acts of non-compliance concerning

the Solvay Code of Business Integrity and the related policies and procedures, including Speak Up cases, are reported to the Leadership Team and

the Board of Directors Audit Committee annually.

For Competition Law, Solvay has a dedicated team within the General Counsel Function, which is responsible for implementing the Competition Law

Compliance Program. They are in charge of providing competition law advice and guidance, as well as deploying effective and regular communication

and training on competition law-related subjects.

Implementation of the Competition Law Policy

Solvay has put in place a Competition Law Compliance Program that propagates a zero-tolerance approach to competition law infringements. As

part of our Competition Law Compliance Program, Solvay provides a competition law toolkit on our 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 acquisitions

transactions, swaps, price announcements and vertical relationships.

To minimize cartel risks, Solvay has put in place a computer-based system that tracks all contacts that relevant employees have with competitors

through a managerial approval procedure.

3.2.3. Grievance mechanisms

Employees are encouraged to report suspected violations or concerns through various internal avenues, including management, Human Resources,

the General Counsel Function, Ethics and Compliance, Internal Audit, or through 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.

The following chart shows the types of claims made from January to December 2021 through Solvay’s Speak Up program.

Solvay’s speak up program

Categories have been modified in 2021.

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Number of claims 2021 2020 2019

Misconduct or inappropriate behavior 15 27 48

Discrimination 14

Harassment including Retaliation 28

Previously: Discrimination including harassment and retaliation 14 34

Conﬂict of interest 7 4 14

Computer, Email, Internet use and Social Media 3

Previously: Computer, email, internet 2 1

Environmental, Health or Safety 9

Previously: Environmental, health or safety law 14 5

Accounting, Auditing Matters, Financial Records and Banking 4

Previously: Accounting or auditing 0 4

Bribery/Corruption 2

Antitrust/Competition 2

Previously: Anti-bribery 5 0

Confidentiality and Misappropriation 5

Previously: Confidentiality/misappropriation 1 4

International Trade/Trade compliance 2

Previously: International trade compliance 0 0

Substance abuse 5 0 3

Embezzlement, Theft, Robbery 4

Previously: Theft 2 3

Violence or threat 3 3 0

HR Matters 23

Other 11 33 24

Total 137 105 140

Through the Speak Up program, any concern regarding a breach is investigated by the Ethics and Compliance Function. In keeping with our

commitment to transparency, the Speak Up tool is used to report progress on investigations and is used to communicate the results of investigations

directly to those concerned when concluded. Posters and an online brochure are available to employees and advertise the website and toll-free

numbers needed to access this tool in their regions. The Board’s Audit Committee oversees the running of Speak Up.

In 2021:

· 137 cases opened:

- 25 cases still in progress;

- 112 cases resolved. These include:

- 33 substantiated cases

- 51 unsubstantiated cases

- 6 insufficient information

- 21 misdirected

- 1 referred

RESOLVED CASES

No action

necessary

No action

taken

Policy / Process

review

Training Discipline Termination Resignation

Substantiated 0 (0%) 0 (0%) 4 (12,1%) 7 (21,2%) 9 (27,3%) 12 (36,4%) 1 (3%)

Unsubstantiated 17 (33,3%) 20 (39,2%) 8 (15,7%) 5 (9,8%) 1 (2%) 0 (0%) 0 (0%)

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3.2.4. Communication and training

Solvay’s Code of Business Integrity

Mandatory Code of Business Integrity training, both live and web-based, is organized for all employees to ensure understanding and to address

behavioral risks such as anti-bribery and corruption, conﬂict of interest and harassment. As part of this training, employees are also trained on the

Speak Up Helpline. Specific anti-corruption training is tailored to management. Special campaigns to maintain and enhance the level of awareness

within the Group are identified and adopted annually. In 2020-2021, 100% of the target population was trained on the Code of Business Integrity and

96% on the Anti-Bribery and Anti-Corruption Policy.

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 2021, it covered:

· an update of the existing Group policy on competition law and the relevant guidelines;

· continuation of the "General Antitrust Training" sessions for new employees, which was successfully completed by 93% of the targeted population;

· continuation of the roll-out of a video on the Contacts with Competitors Tracking System (CCTS), used to train 1470 of the individuals targeted;

· additional, tailored, face-to-face training sessions for 365 high-risk individuals;

· roll-out of a new trade association training, which was attended by 97% of the relevant target audience.

Anti-Corruption

Anti-Bribery and Anti-Corruption training is now done on a two-year cycle for the pre-identified target population. For the 2021 cycle, 96% of the

target population (all cadres S15 and above) completed the online training course. In addition, the Code of Business Integrity online training course

that is mandatory for all employees to complete, also covers the topic of anti-corruption.

3.2.5. Public policy

The Government Affairs and Country Management Function is responsible for raising Group awareness about the general political context, the main

challenges faced by public authorities and more specific policy issues. In line with Solvay’s Code of Business Integrity, and with the aim of ensuring

the best possible business environment, the Government Affairs and Country 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 in support of company strategy.

Issues that fall within the scope of activities of the Government Affairs Function include:

· Promoting climate change solutions for the energy transition: Solvay supports the UN Paris Climate Agreement and contributes to its implementation.

Solvay therefore argues for the development of a clear and predictable legislative framework that promotes sustainable growth while maintaining

competitiveness for industry, 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- and

risk-based regulations and standards in the interest of 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.

· Supporting the business: Solvay works to develop new markets and new geographies for business, and to obtain the necessary permits for our

facilities and registrations for our products.

Solvay’s public policy activities also include participation in many trade associations, as outlined in section 2.8.

The Group does not take part in party political activities, nor do we make corporate donations to political parties or candidates. 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 in the

political process must be done on an individual basis, on the employee’s own time and at the employee’s personal expense.

3.2.6. 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 the

hazards of our product in order to carry out our activities and to protect users, the general public, Solvay personnel and the environment. With society

expressing a continuing demand 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.

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Testing

To comply with new and existing chemical regulations, or to further consolidate safety data, Solvay commissioned animal tests in 2021. 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 by

actively advocating for the reuse of data from studies conducted within a given framework, such as REACH, for other registration systems.

Ethical compliance

Solvay’s policy, outlined in the Solvay Animal Care and Use Procedure, is to apply the “3R principles” (Replacement, Reduction and Refinement) in

each case and to comply with all applicable regulations. All of our studies comply with international standards, such as OECD guidelines. Regulatory

studies are almost exclusively performed by laboratories accredited by the Association for Assessment and Accreditation of Laboratory Animal Care

International (AAALAC). This worldwide organization sets quality standards for testing laboratories and ensures responsible and humane treatment

of laboratory animals. Before they start, all studies commissioned by 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 continuing qualification and evaluation

program for the laboratories. A dedicated Solvay corporate committee reviewed the animal testing activities commissioned by Solvay during 2021,

verifying conformity with the principles and the mandatory elements of Solvay’s Animal Care and Use Procedure.

VERTEBRATE ANIMAL TESTS COMMISSIONED BY SOLVAY IN 2021

Number of studies Number of vertebrates (*)

Registration obligations (EU, China, Korea, US) 20 9,963

Additional product safety questions (toxicity, classification) 7 200

Total 27 10,163

(*) Includes all animals, including control animals not being exposed to test substances and used as reference

Regulatory testing

In 2021, 99% of the vertebrate animals (representing 74% of the animal studies) were used to address mandatory requirements from authorities.

The remaining 1% were used to address additional product safety questions. In total, 10163 vertebrate animals (82% rats, 9% rabbits, 8% fish, 0.8%

guinea pigs and 0.2% mice) were used. Solvay did not commission any studies on dogs, cats, pigs or non-human primates. Most vertebrate animals

(99%) were used in 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 studies and vertebrate animals used in 2021 was about half that of 2020.

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. Further advances were made in quantitative structure-activity relationships (QSARs),

a computer-based method used to predict the properties of chemicals based on information about similar substances. These models are fit for

regulatory use and will increase our ability to avoid animal testing when assessing our products.

However, the higher tier animal studies requested by authorities, which required the largest number of animals in 2021, will continue to be the major

driver for animal tests in the near future. The EU chemicals strategy for sustainability, which was published at the end of 2020, does not suggest a

major shift in this respect. Solvay therefore fully supports the joint position of the European Chemicals Industry (Cefic) and Cruelty Free Europe,

published in July 2021, calling on the European Commission to include animal testing in the REACH Impact Assessment and to do more to support

non-animal methods.

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 nanomaterials and endocrine disruptors, more,

rather than less, animal testing appears to be required in Europe.

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3.3. Health, safety and environment management

GRI DISCLOSURE 2-25

MATERIALITY: PRIORITY

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, and 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.

· The HSE management system includes a Responsible Care Policy and a set of risk-based procedures that apply to all areas, including health

monitoring, industrial hygiene, occupational safety, process safety, transport safety, 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) is 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.

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, both on regulatory and internal requirements by a third party, either internal or external, at least once every five

years.

· Addresses all identified risks, areas for improvement and gaps in compliance.

Environmental rehabilitation

Solvay’s Sustainable Environment and Climate (SEC) Department is responsible for managing the environmental liabilities resulting from the Group’s

industrial and mining activities. SEC 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 the local regulations allow it, a risk-based approach is used to

define management actions. For our operational sites, SEC collaborates with the local HSE team. Our closed sites are managed directly by the SEC

team on behalf of the relevant GBU. SEC is also responsible and accountable for managing Group environmental provisions.

3.3.3. Indicators

Approved HSE management systems at sites

76% of our sites (96) have a management system and have been audited by a third party in the past five years. We aim to reach 100% by the end of

2022. Sites with fewer than ten people or that are not under Solvay’s operational control are excluded.

68 of our sites are certified by ISO 45001 or by the American Chemistry Council's Responsible Care Management System (ACC RCMS). 69 are certified

by ISO 14001 and/or by ACC RCMS 14001 and 52 have implemented both systems.

26 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.

At 24 of our sites, we plan to implement a management system by the end of 2022.

Regulatory Watch

100% of our sites have installed a systematic process for health, safety and environment regulatory watch.

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3.4. Research and innovation

MATERIALITY: PRIORITY

3.4.1. Definition

Solvay R&I is the Group engine for delivering highly differentiated and valuable innovations that address major human challenges associated with

resource scarcity, climate change and quality of life. Solvay wants to build a better future by developing profitable and sustainable innovative solutions

that turn science and chemistry into business and create value for the Group, our shareholders, our customers and all other stakeholders.

3.4.2. Management approach

Solvay’s G.R.O.W. strategy led to a redefinition of R&I priorities in 2020. Our priorities are now aligned with the ambitions and mandates of Solvay

GBUs and Growth Platforms, taking into account their missions and strategic directions. The Chief Technology Officer (CTO) is in charge of all Group

R&I activities and reports to the CEO.

The main missions of the CTO are:

· to define an innovation vision and strategy that is in alignment across the Group;

· to drive Group R&I portfolio management and allocation of resources to maximize and accelerate value delivery;

· to manage talent, efficiency and the implementation of transformational programs within the organization.

The key guiding principles for Solvay R&I are:

· Mobilization on market megatrends, namely lightweighting, electrification, resource efficiency, healthcare, digitalization and bio-based solutions,

meeting key customers’ priorities to accelerate business growth.

· Delivery of innovations in alignment with our Solvay One Planet sustainability roadmap.

· Reinforcement of a Group-wide scouting effort to identify and develop new growth opportunities beyond the core of the existing businesses.

· Deployment of a “one R&I” mindset that encourages agility and nurtures a community of talents.

In 2021, our main achievements in R&I were:

· The launch of the Green Hydrogen Platform: Aimed at contributing to the emerging hydrogen economy - an outstanding global market opportunity

- the platform is built around Solvay’s ion conducting polymer technology, which will be a key enabler for the proton exchange membrane (PEM)

electrolyzer and fuel cell markets.

· The creation of a single Materials GBU, integrating our Specialty Polymers and Composites businesses, including their research activities: Bringing

these activities together will enable us to fully leverage Solvay's connection to customers and R&I competencies across the enterprise.

· Connected Research: We launched a digital program to accelerate the virtualization of experiments and to better leverage internal and external

knowledge in order to improve R&I teams’ productivity and accelerate the time-to-market for innovations.

· Group R&I Technology Scouting: We created additional synergies between our breakthrough innovation program and the venturing activity (Solvay

Ventures), ensuring that we are able to make the most of Solvay’s scientific expertise to accelerate new venturing opportunities (VC investments

and partnerships).

· Allocation of budget and resources: We continued our efforts to allocate R&I budgets at Group level in a way that prioritizes growth businesses (the

“G” from G.R.O.W.) and our Growth Platforms, in order to optimize value creation. Our GBUs and R&I Function are now managed in an agile way,

in order to accommodate relevant shifts caused by the pandemic, while remaining aligned with their G.R.O.W. strategic mandate.

3.4.3. Indicators

2021 2020

Expected revenue from sustainable solutions % 78 77

R&I Effort € million 298 291

R&I Staff FTE 1,950 1,950

First patent filings Number 181 135

New sales ratio % 14 15

3.4.4. Key achievements

Together with customers and partners, Solvay innovates to develop sustainable solutions by addressing the key drivers that will shape our future and

focus on the world’s sustainability needs. Solvay also believes in the importance of working together with academia, and with other companies or

startups, to identify new solutions. In total, the Group currently manages more than 100 collaborative innovation projects.

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Innovations to fight the pandemic

Since the onset of the Covid-19 pandemic, consumers and businesses have been looking for ways to uphold health standards and feel protected in

an uncertain world. Actizone™, a patented technology, is a line of ready-to-use products and ingredients developed by Solvay that rapidly kills germs

to protect consumers from harmful bacteria and viruses, including coronavirus.

Amni® Virus-Bac OFF, is a functionalized polyamide textile yarn, developed to eliminate the proliferation of bacteria and inhibit the transmission

of viruses on textiles. The Amni® Antiviral yarn acts on groups of enveloped and non-enveloped viruses and bacteria, providing a powerful barrier

against the spread of Covid-19. Articles made with Amni® Virus-Bac OFF are long-lasting and durable. For example, it has been used successfully for

masks, school and professional uniforms, seat coverings in public transportation, sports clothing and hospital bed linen.

Solvay’s Materials GBU and emerging opportunities

Solvay’s Materials GBU continues to develop new solutions that enable sustainable mobility, digitalization and connectivity, and healthy living.

For example, our ability to deliver materials with both structural and electrical properties, such as Ketaspire® PEEK in e-motors, allows us to improve

energy and power density in electric vehicles (EV). The breadth of our materials portfolio has also enabled the development of multi-layer and

multi-material solutions for electronic shielding and transmissivity. Solvay's short and long fiber composites, compounds and adhesives enable

lightweighting, and we collaborate on these with customers who seek to transform the boundaries of mobility, such as Vertical Aerospace and Avio.

And through expanding the range of thermal conductivity, stiffness and compatibility in our polymer science capabilities, we are now able to provide

solutions for noise and vibration in consumer applications and advanced filtration.

We also continue to reinvent our portfolio through sustainable solutions. This includes increasing sourcing from renewable feedstocks. Our

collaborations range from producing bio-sourced acrylonitrile with Trillium, to introducing Amodel Bios PPA, our bio-based polymer for use in

e-mobility.

Batteries and the circular economy

Solvay and Veolia came together as a circular economy consortium to offer new solutions to improve resource efficiency for critical metals used

in lithium-ion EV batteries. We have since been joined in this consortium by Renault. Solvay's role in this project is to optimize the extraction and

purification of critical metals such as cobalt, nickel, and lithium and transform them into high-purity raw materials for new batteries, helping to close

the circular economy loop for EV batteries. The project is supported by BPi France.

While Solvay is present in the current EV and hybrid battery value chain, through our high-performance specialty polymers for binders and separators

and specialty additives for electrolytes, we are also focused on the future. Solvay is fully involved in the EU’s Horizon 2020 program, notably in the

field of batteries, through the CoFBAT, Spider and Naima projects. We are also part of both the European Battery Alliance and the IPCEI (Important

Project of Common European Interest), which are working to develop the solid-state battery of the future, which involves developing state-of-the-art

electrolytes, electrode binders and separators.

Open Innovation: a long tradition of collaboration with academia worldwide

Solvay continues to be heavily involved in high-level scientific collaborations with top universities globally. These collaborations range from direct

contracts to longer term partnerships. The latter includes our Joint Research Units set up with the CNRS (National Scientific Research Center) and

universities in Bordeaux, France, focused on microﬂuidics and high throughput screening, and in Shanghai, China, focused on organic chemistry and

catalysis. Other long-term partnerships established with Ecole Polytechnique Fédérale de Lausanne (EPFL) and the National Institute of Advanced

Industrial Science and Technology, Tsukuba (AIST), have delivered very interesting results on modeling and machine learning. A series of more

recent collaborations have also been launched on topics related to energy generation and storage), biobased chemistry, advanced polymers and

formulations with institutions such as the University of Chicago, Edinburgh University and Politecnico Milano.

Venture capital and start-ups

In 2021, Solvay’s venture capital fund of Solvay, Solvay Ventures, closed three new investments:

· DMC Biotechnologies is a developer of bio-based products designed for the low-cost and sustainable transformation of bio-based feedstocks.

DMC uses engineered microbes, leveraging a technology that reduces biological complexity and enhances the speed of development for new

sustainable markets.

· Sepion is an energy storage company aimed at speeding up the electrification revolution. Their unique material membrane can be used to

create safe, energy-dense, lithium-metal batteries for long-range and low-cost electric transportation. This investment is in alignment with the

acceleration of the Solvay battery platform.

· Longwater (fund II) is a venture capital fund dedicated to new technologies in material science and chemistry. Its management company, Longwater

Investment, is a partner of choice to help us tap into the dynamic innovation ecosystems in China.

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3.5. Supply chain and procurement

GRI DISCLOSURES 308-1 308-2 407-1 414-1

MATERIALITY: MODERATE

3.5.1. Definition

Our supply chain organization accounts for 2,200 people. Most of them are located in the Global Business Units (GBUs), where they are in charge

of planning, customer care, logistics operations and improvement projects. In addition to this, a small Supply Chain Excellence team is located in

Solvay’s Excellence Center. We have programs in place to foster continuous improvement in the value chain performance of our GBUs, while also

improving cash generation, cost and customer experience.

Our procurement organization consists of 580 people, located in Corporate Procurement, the GBUs, or Purchasing Service Line support.

3.5.2. Management approach

Solvay integrates our Corporate Social Responsibility (CSR) principles and Solvay One Planet ambition into our procurement processes and strategies

in order to create sustainable business value with our suppliers.

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 Code

of Business Integrity and our CSR agreements with IndustriALL Global Union. It was 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 a valid alternative. In addition, and even given

the existence of a written purchase contract, all of our Core Suppliers must subscribe to the principles detailed in the Supplier Code of Business

Integrity.

Together for Sustainability initiative

Solvay is a founding member of the Together for Sustainability (TfS) initiative, a unique member-driven organization set up in 2011 to help member

companies shape the future of the chemical industry together. A global, procurement-driven initiative, with regional representation in Asia and North

and South America, TfS provides the global standard for environmental, social and governance performance in chemical supply chains.

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 can be used to assess and improve the sustainability performance of chemical companies and their suppliers. The TfS program also

addresses scope 3 GHG emissions, Product Carbon Footprint and global capability building activities. TfS operates according to the principle of

“an assessment or audit for one member company is an assessment or audit for all”. By sharing supplier evaluations among the 34 global chemical

companies involved, we are able to lessen the administrative burden and leverage synergies among the member companies. 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 a TfS-approved audit company.

Solvay Chief Procurement Officer (CPO) Lynn De Proft is a member of the TfS Steering Committee.

Procurement strategy

Procurement strategies are defined by category experts in collaboration with the GBUs. These strategies are executed and deployed at global,

regional or local level, depending on the supplier market structure.

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 the common way of working known as the Solvay global procurement process. Procurement priorities are

centered around two main topics: “Act NOW”, focused on protecting and running the business in the present and “Prepare for the FUTURE”.

3.5.3. Indicators

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.

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Actions to be performed, such as performing a supplier evaluation survey, or requesting a mandatory third party sustainability assessment, are

defined 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 448 suppliers as Core Suppliers.

Core Supplier assessment

Our Core Suppliers are distributed is as follows:

Raw

Materials

Technical

Goods and

Services

Logistics and

Packaging

Energy General Expenses IT

and Telecom

Total

Asia Pacific 70 5 3 4 82

Europe, Middle East, Africa 86 47 29 8 46 216

Latin America 10 8 2 5 25

North America 78 13 17 1 16 125

Total 244 73 51 9 71 448

Ecovadis assessment

Within Solvay’s portfolio, 2,016 suppliers were assessed through EcoVadis in 2021. This makes Solvay the fourth best performer in terms of suppliers,

when compared to the other Together for Sustainability members.

Raw materials

As a large chemical manufacturer, Solvay uses raw materials from a range of suppliers and sources: the overall volume purchased in 2021 was over

4.92 million metric tons. The Solvay Group transforms large quantities of petrochemicals and uses large amounts of water.

Solvay is concerned that the trade in tantalum, tin, tungsten and gold, and the metals known as 3TGs that are refined from such minerals and mined

in certain conﬂict-affected and high-risk regions, such as the Democratic Republic of the Congo and neighboring countries, may be contributing to

human rights abuses. Our product portfolio does not contain 3TG products needed for the functioning or production of products that directly or

indirectly finance or benefit armed groups in these regions. We continue to work to verify the integrity of our sourcing, and to support the actions

of governments, our customers and suppliers toward achieving 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.

NON-BIOSOURCED AND BIOSOURCED RAW MATERIALS – MATERIAL PURCHASED

2021 2020 2019

Mineral products 1,000 metric tons 2,690 2,370 2,970

Biosourced products 1,000 metric tons 240 230 260

Natural gas 1,000 metric tons 940 900 980

Petrochemical 1,000 metric tons 950 830 980

Other raw materials 1,000 metric tons 100 120 390

Total 1,000 metric tons 4,920 4,450 5,580

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4. CLIMATE

4.1. Greenhouse gas emissions

4.1.1. Definitions

GRI DISCLOSURES 3-3 305-1 305-2 305-3 305-4 305-5

MATERIALITY: PRIORITY

SDG 3 12 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 the

World Business Council for Sustainable Development;

· the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard;

· the Greenhouse Gas Protocol Corporate Value Chain (scope 3) Standard.

To better reﬂect our sustainability policy, we decided to use the market-based method to calculate CO

emissions associated with purchased

electricity (scope2). To comply with Global Reporting Initiative requirements, we apply the following criteria (in decreasing order of priority) when

selecting the CO

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.

· 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.

4.1.2. Management approach

In October 2021 we announced our plans to reach carbon neutrality on scope 1 and 2 emissions before 2050. We have committed to set science

based targets in 2020. Our scope 3 target shall at least meet the 2C criteria of the Science Based Targets initiative. A strategic initiative has been

launched to spur transformative progress with our suppliers in 2021. We will continue our effort in that direction beyond 2030 within our 2050 neutrality

vision. We also upgraded our emissions scope 1 and scope 2 reduction target from -26% to -30% by 2030, as compared to the 2018 baseline.

To achieve our targets, we are taking a range of different actions. This includes transforming our energy mix and investing in clean technologies. We

are developing a growing pipeline of energy-climate transition opportunities through collaborations between a dedicated team of experts in energy

transition and operational teams at the industrial sites. For greenhouse gas emissions not related to energy, specific task forces have been set up with

strong technical support in order to help them develop the required clean technologies. In addition, Solvay applies an internal carbon price of €100

per metric ton of CO

to all greenhouse gas emissions in our capital investment decisions worldwide.

An externally verified greenhouse gas emission reporting system, and responses to rating agencies such as the Carbon Disclosure Project, help the

Group align our efforts with the magnitude of the greenhouse gas challenges we face.

4.1.3. Indicators

Solvay’s target is to reduce greenhouse gas emissions by 30% by 2030, compared to the 2018 baseline.

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GREENHOUSE GAS EMISSIONS – TARGET ACHIEVEMENT

Total greenhouse gas emissions (scope 1 and 2) in 2021 Mt CO

eq 11.0

Total greenhouse gas emissions (scope 1 and 2) in 2020 - as published Mt CO

eq 10.1

Variation due to changes in reporting scope (structural changes) Mt CO

eq -0.11

Variation due to changes in methodology or improvements in data accuracy Mt CO

eq +0.23

Emissions increase or reduction at constant scope year on year Mt CO

eq +0.78

Cumulative emissions increase or reduction since 2018 at constant scope Mt CO

eq -1.73

Percentage increase or reduction since 2018 at constant scope (reference 2018: 12.3 Mt CO

eq) % -14

Cumulative emissions increase or reduction since 2017 at constant scope Mt CO

eq -1.7

Cumulative emissions reduction since 2017 at constant scope is -1.7 Mt CO

eq. This is in line with our previous objective, to reduce scope 1 and 2

greenhouse gas emissions by one million tons in comparison with 2017 by no later than 2025 at constant scope.

Increased emissions of 0.78 Mt CO

eq in 2021 as compared to 2020 can be explained mainly by the restart of activity following the Covid-19

crisis.

GREENHOUSE GAS EMISSIONS (SCOPES 1 AND 2)

Units 2021 2020 2019

Direct and indirect CO

emissions (scopes 1 and 2) Mt CO

9.7 8.8 10.0

Other greenhouse gas emissions according to Kyoto Protocol (scope 1) Mt CO

eq 1.4 1.3 2.0

Total greenhouse gas emissions according to Kyoto Protocol Mt CO

eq 11.0 10.1 12.0

Other greenhouse gas / CO

emissions not according to Kyoto Protocol

(scope 1)

Mt CO

eq 0.0 0.0 0.1

DIRECT GREENHOUSE GAS EMISSIONS (SCOPE 1)

Units 2021 2020 2019

Methane – CH4 Mt CO

eq. 1.0 0.80 1.02

Nitrous oxide – N2O Mt CO

eq. 0.03 0.02 0.03

Sulfur hexaﬂuoride – SF6 Mt CO

eq. 0.00 0.05 0.07

Hydro ﬂuoro carbons – HFCs Mt CO

eq. 0.06 0.03 0.11

Perﬂuorocarbons – PFCs Mt CO

eq. 0.26 0.38 0.78

Nitrogen triﬂuoride – NF3 Mt CO

eq 0.0 0.0 0.0

Total other greenhouse gas emissions Mt CO

eq 1.36 1.28 2.01

Carbon dioxide - CO

Mt CO

8.23 7.6 8.58

Total direct emissions Mt CO

eq. 9.59 8.89 10.59

In 2021, direct emissions were 0.69 Mt CO

eq higher than in 2020. In addition to higher activity levels following Covid-19, the improvement in the

reduction of CF4 emissions in Spinetta, Italy (-0.13 Mt CO

eq) was offset by a degradation of CH

emissions at Green River (+0.19 Mt CO

eq), which

is linked to an increase in mine activity.

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INDIRECT CO

EMISSIONS (SCOPE 2)

Units 2021 2020 2019

Gross market based

Electricity purchased for consumption Mt CO

0.7 0.7 0.9

Steam purchased for consumption Mt CO

0.7 0.5 0.5

Total indirect CO

– Gross market-based Mt CO

1.4 1.2 1.4

Gross location based

Electricity purchased for consumption Mt CO

0.9 0.9 1.0

Steam purchased for consumption Mt CO

0.7 0.5 0.5

Total indirect CO

– Gross location based Mt CO

1.6 1.4 1.5

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.

The increase in indirect CO

emissions linked to the increase in activity following Covid-19 was offset by additional purchases of green electricity in

the US. The increase of 0.2 Mt CO

compared to 2020 results from a change in methodology.

OTHER INDIRECT GREENHOUSE GAS EMISSIONS (SCOPE 3)

Units 2021 2020 2019

Purchased goods and services Mt CO

eq 4.9 5.6 4.9

Capital goods Mt CO

eq 1.8 1.5 1.8

Fuel- and energy-related activities Mt CO

eq 1.3 1.0 1.0

Upstream transportation and distribution Mt CO

eq Included in purchased goods and services

Waste generated in operations Mt CO

eq Included in purchased goods and services

Business travel Mt CO

eq 0.001 0.002 0.01

Employee commuting Mt CO

eq 0.03 0.03 0.05

Upstream leased assets Mt CO

eq 0 0 0

Downstream transportation and distribution Mt CO

eq 0.7 0.5 0.6

Processing of sold products Mt CO

eq 3.2 4.3 5.6

Use of sold products Mt CO

eq 5.7 8.1 10.1

End-of-life treatment of sold products Mt CO

eq 7.8 6.9 7.4

Downstream leased assets Mt CO

eq 0 0 0

Franchises Mt CO

eq. 0 0 0

Investments Mt CO

eq 0.4 0.9 1.1

Total scope 3 emissions Mt CO

eq. 25.8 28.8 32.6

4.1.4. Key achievements

At Solvay’s Spinetta site in Italy, an innovative clean technology developed in-house and commissioned in 2019 with further add-ons led to a decrease

of 1.1 Mt CO

eq of CF4 emissions in 2021, compared to 2018.

At Rheinberg plant in Germany, the first biomass boiler was commissioned in 2021, replacing coal firing.

In 2021, 28 of our sites sourced a share of their electricity supply from renewable energy, such as solar or wind. This represents a total saving of

0.18 Mt CO

eq compared to 2020.

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4.2. Energy

GRI DISCLOSURES 3-3 302-1 302-2 302-3 302-4

MATERIALITY: PRIORITY

SDG 7 12 13

4.2.1. 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;

· 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).

4.2.2. Management approach

Solvay has both industrial activities that consume large amounts of energy, such as our synthetic soda ash plants and peroxides, and industrial

activities that have a relatively low energy content as a percentage of the sales price, such as ﬂuorinated polymers.

The Group considers it particularly important to swiftly transition our energy consumption towards zero- or low-carbon sources without compromising

competitiveness or supply security. We have therefore taken the following strategic initiatives:

· Creation of a Sustainable Environment and Climate (SEC) Department within Solvay’s Industrial Function to support the development of energy

transition projects worldwide, taking into account the specifics of each site’s local energy market.

· Technological leadership in processes and high-performance industrial operations to minimize energy consumption.

· Diversification and ﬂexible use of the different types and sources of primary energy.

· Periodic review of the condition of industrial sites’ energy assets and connections.

· A strategy of supply coverage, with long-term partnerships and medium- to long-term contracts, and price-hedging protection mechanisms when

needed.

· In-house market intelligence and direct access to energy markets, including gas hubs, electrical grids, financial spots and future exchanges, when

possible.

· Dedicated services aimed at optimizing energy purchasing and helping Global Business Units manage energy and greenhouse gas emissions.

The Group has reduced its overall energy intensity. Key factors in this progress have been the SOLWATT

energy efficiency program rolled out at

most plants worldwide and the dissemination of technological breakthroughs to improve the overall energy efficiency of our operations.

4.2.3. Indicators

FUEL CONSUMPTION FROM NON-RENEWABLE AND RENEWABLE SOURCES

Units 2021 2020 2019

Solid fuels PJ 27 27 32

Liquid fuels PJ 0.4 0.3 0.4

Gaseous fuels PJ 71 66 69

Total non-renewable energy sources PJ 99 93 102

Renewable energy sources PJ 6.2 5.7 5

Total fuel consumption PJ 105 99 107

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. Historical figures have been restated retroactively.

Fuel consumption from non-renewable sources increased in 2021. This variation is explained mainly by the restart of activity following the Covid-19

crisis. There is a decrease in coal use, from 32 PJ in 2019 to 27 PJ in 2021, which is in line with Solvay's objective of phasing out coal used as energy by

2030. Over the same period, renewable fuel consumption increased by 1.5 PJ, from 5 PJ in 2019 to 6.2 PJ in 2021.

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SECONDARY ENERGY PURCHASED FOR CONSUMPTION

Units 2021 2020 2019

Electricity PJ 20 22 26

Heating PJ 0 0 0

Cooling PJ 0 0 0

Steam PJ 13 12 12

Total PJ 33 34 38

In 2021, secondary energy purchased for consumption remained at the same level as in 2020.

ENERGY SOLD

Units 2021 2020 2019

Electricity PJ 18 17 19

Heating PJ 0 0 0

Cooling PJ 0 0 0

Steam PJ 15 14 13

Total PJ 33 31 32

In 2021, the sale of self-generated secondary energy remained at the same level as in 2020.

TOTAL RENEWABLE ENERGY

Units 2021 2020 2019

Energy produced from renewable energy sources PJ 6.2 5.7 5.1

Renewable electricity purchased PJ 1.6 1.0 0.5

Renewable electricity sold PJ 0 0 -

Total renewable energy PJ 7.8 6.7 5.6

ENERGY CONSUMPTION OUTSIDE THE ORGANIZATION

The life cycle assessment performed for the Sustainable Portfolio Management analysis makes it possible to estimate cradle-to-gate energy

consumption:

Units 2021 2020 2019

Cradle to gate energy consumption PJ 235 246 265

4.2.4. Key achievements

During 2021, we continued to increase our involvement in the production of renewable energy sources. In 2021, six sites derived part of their heat

production from biomass, which represents a total of 6 PJ, and two sites started to use biogas, representing a total of 0.2 PJ. The ramp-up of

renewable electricity purchases has continued for the third consecutive year with a further 0.6 PJ impact in 2021.

4.3. Biodiversity

GRI DISCLOSURE 3-3 304-1 304-2 304-3 304-4

MATERIALITY: PRIORITY

4.3.1. Definitions

The calculation of the Solvay Group’s pressure on biodiversity is performed along the value chain, from cradle-to-gate, for our entire portfolio of products.

This is a global approach that is based on a Life Cycle Impact Assessment (LCIA) methodology: the ReCiPe2016 method. This method translates emissions

and resource extractions into a limited number of environmental impact scores by means of what are known as characterization factors.

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The first step in this method involves using emissions from environmental reporting that are linked with the following “midpoint impact categories”:

· global warming, from CO

and greenhouse gas emissions, for example;

· water use;

· freshwater ecotoxicity;

· freshwater eutrophication;

· ozone depletion;

· terrestrial acidification;

· terrestrial ecotoxicity;

· marine ecotoxicity;

· land use or transformation;

· use of mineral resources;

· use of fossil resources.

The potential damage to nature is calculated by connecting the midpoint indicator with an endpoint factor, such as damage to freshwater, marine

or terrestrial species and natural resources. The unit for measuring ecosystem quality is local relative species loss in terrestrial, freshwater and marine

ecosystems, respectively, measured over space and time: potentially disappeared fraction of species per square meter per year or potentially

disappeared fraction of species per cubic meter per year).

4.3.2. Management approach

Local biodiversity

We have screened all of our sites and their potential impact on protected areas according to the International Union for the Conservation of Nature

(IUCN) management categories. We prioritized sites for risk assessment according to their proximity to protected areas and the IUCN management

category. This led to us working with local administrations in charge of the protected areas to track and analyze the actions required to alleviate our

impact, depending on the type of biodiversity that needed protecting.

For example, our Rosignano, in Italy, is located near the protected area of the Pelagos Sanctuary for the Conservation of Marine Mammals. The plant

is therefore currently working on an action plan to reduce its impact on marine biodiversity, through possible partnerships with local universities and

the possible rehabilitation of our quarries. The first actions to promote biodiversity at the site were undertaken during Solvay’s 2021 Citizen Day (see

section 3) and a detailed action plan will be launched in 2022.

Global biodiversity

As part of Solvay One Planet, we set a target to reduce our pressure on biodiversity by 30% by 2030, as compared to 2018. Using the environmental

profiles of our products, and looking at their entire life cycle from raw material to distribution, we were able to identify the areas of our portfolio

that contribute the most to biodiversity pressure. We found that greenhouse gas emissions, freshwater eutrophication, marine ecotoxicity and soil

acidification represent 90% of the drivers affecting biodiversity.

As part of our efforts to contribute to biodiversity preservation, Solvay joined the Caisse des Dépôts et Consignations’ Business for Biodiversity

(B4B+) interest group, which is working on an international Global Biodiversity Score (GBS) as part of a European initiative.Solvay is also a founding

member of Entreprises pour l’Environnement (EpE), which was created in 1992. It 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.

4.3.3. Indicators

Local biodiversity

55% of Solvay sites are within a 5km radius of a protected area.

Two sites have been prioritized for risk assessment as a result of their proximity to the closest protected area and their IUCN management category:

Country Site name Distance

(meters)

Name of protected area Category IUCN Management

category

Germany EPE 0

LSG-Eilermark, Eper Venn,

Graeser Venn

Landscape Protection

Area

Italy ROSIGNANO 500 – 2000

Pelagos Sanctuary for the

Conservation of Marine Mammals

Specially Protected

Areas of Mediterranean

Importance

(Barcelona Convention)

Not Assigned

IUCN Red List species and national conservation list species with habitats in areas affected by our operations have not yet been identified for all sites. Solvay has priori-

tized the work on global pressure on biodiversity, which has allowed us to identify areas in which we can take action.

The geographic location of all Solvay sites is available on our website.

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Global biodiversity

GLOBAL PRESSURE ON BIODIVERSITY

Units 2021 2020 2019

Species potentially affected Number 93 107 116

Of which:

Global warming potential % 50 43 43

Acidification % 11 14 14

Eutrophication % 15 16 16

Marine ecotox % 17 16 17

Other (Land use, Water…) % 7 11 10

Our baseline pressure on biodiversity, from 2018, was 122 species potentially affected. The results for 2021 show that we have decreased our

pressure on biodiversity by 24%. While we estimate that a significant part of this progress is explained by methodology improvements, such as

updated ecoprofiles, the overall trend is fully aligned with our objective to decrease our impact on biodiversity by 30% by 2030.

4.3.4. Key achievements

Our Paulinia site in Brazil was awarded the Wildlife Habitat Council’s (WHC) Gold Certificate in 2021. It is the highest level of certification awarded by

the WHC, an international organization promoting biodiversity conservation practices in the private sector. The site is a hub for wildlife in the region,

following several decades of work to promote harmonious coexistence with nature.

Our efforts to restore the Cuchia Quarry in Spain also received recognition in 2021. The project won the European Council of Chemical Industry

Federations (Cefic) award for ecosystem preservation. 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.

5. RESOURCES

5.1. Product design and life cycle management

GRI DISCLOSURE 3-3 416-1

MATERIALITY: PRIORITY

5.1.1. 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.

· 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 product

system throughout its life cycle. LCA methodologies meet 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 social

and environmental contribution to the customer’s performance and, at the same time, demonstrates a lower environmental impact in its production

phase.

5.1.2. 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 and Functions

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 mergers and acquisition projects, to determine whether an investment is feasible in light of Sustainable Portfolio

targets.

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· Investment decisions (capital expenditure above €10 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 best

practice. Core LCA activity is based on recognized tools, software and databases, and we also have our own database, specific to Solvay business and

innovation segments, for instance in material science or battery development.

The LCA team is also called upon to support business activity concerning customer relations, by sharing environmental and LCA data on products in

order to enhance understanding and environmental impact assessments along the value chain, from cradle to grave or recycling. Examples include

the automotive sector, the construction sector and Product Carbon Footprint declarations for our customers.

Taking part in world class Life Cycle Assessment platforms

To maintain a high level of LCA expertise, we participate 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 and

scientific actors, and to foster positive developments in environmental quantification methods, particularly in Life Cycle Assessments, to be shared

and recognized at the European and international levels.

· World Business Council for Sustainable Development (WBCSD): Solvay takes part in Life Cycle Assessment projects and Product Carbon Footprint

working groups organized by the WBCSD.

· Roundtable for Product Social Metrics: this association of industry representatives and consultants establishes guidelines for assessing the social

impacts of industrial product life cycles.

5.1.3. Indicators

Extensive cradle-to-gate Life Cycle Assessments were performed for 96% of our products, by turnover share, placed on the market, as compared

to 94% last year. Solvay’s LCA team manages its own product database representing more than 1,300 different chemicals and materials, which is

continuously updated to include the most recent industrial or innovation data. As set out in our Solvay One Planet sustainability roadmap, we will

continue to shift our portfolio toward opportunities that grow our sustainable solutions, with a target of increasing sustainable solutions to 65% of

total Group sales by 2030.

REVENUE BREAKDOWN BY SPM HEAT MAP CATEGORIES

Units 2021 2020 2019

Solutions % 53 52 53

Neutral % 28 27 27

Challenges % 9 8 7

Not evaluated % 10 13 13

In 2021, the proportion of sales from sustainable solutions improved by +1 percentage point, largely reﬂecting the reduction of environmental impact

in production within Specialty Polymers and Peroxides, the acquisition of new agriculture activities, and the requalification of some solutions for

coatings.

Effective 2022, the CO

reference price was increased from €75 to €100 per metric ton CO

eq. As a consequence, the level for 2021 will be restated

to 50%.

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SPM SOLUTIONS: SALES BY MAIN IMPACT CATEGORY

Units 2021 2020 2019

Climate € billion 1.7 1.6 2.2

Resources € billion 3.7 3.2 3.5

Better life € billion 3.2 3.1 3.3

Total Solutions net sales € billion 5.1 4.7 5.4

The total Solutions net sales figure is inferior to the sum of impact categories because products may have multiple impacts. For example, composite

materials used in planes make the plane lighter, allowing lower greenhouse gas emissions (climate impact), but they also increase the plane’s lifespan

(resources impact).

EXTERNAL VALIDATION

Since 2009 with the exception of 2019 and 2020, Arthur D. Little (ADL), our partner in developing and improving our SPM methodology, has performed

an in-depth verification of our market alignment results. In 2021, ADL screened every Product Application Combination (PAC) in the database and

selected 70 PACs for deeper review.

Discussions with Arthur D. Little revealed that we reach the same conclusion for 43 PACs out of the sample of 70, representing an agreement rate

of 61%. For 21 PACs (30%), Arthur D. Little came to a more negative conclusion than Solvay. For six PACs (9%), Arthur D. Little did not reach final

results. For these six PACs, all of which relate to the PFAS family of compounds, ADL identified indicative evidence for an ‘Exposed’ assessment, and

therefore recommended deeper exploration of PFAS before finalizing results. For a sizable number of the PACS concerned, we will not change our

SPM 2021 score. Instead, we will instead commit to exploring these results in depth in 2022. In the meantime, our 2021 conclusions remain as they

were.

EU TAXONOMY ELIGIBLE 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.

According to the new timeline set out in the Taxonomy’s Delegated Act 2021, companies will have to publish their first Taxonomy eligibility report in

2022.

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. Currently,

only climate mitigation and climate adaptation are considered. As such, the taxonomy only addresses a limited number of Solvay activities.

Our calculation of the share of 2021 Solvay sales eligible for the EU taxonomy is based on our best interpretation of the EU Taxonomy texts, including

the 2021 version of Technical Annex of the Taxonomy Report. Our only manufacturing activities eligible as "transition activities" are soda ash and

polymers.

Figures reported for soda ash correspond to the Soda Ash and derivatives business, which is a mono-technology business as described on Solvay’s

website.

Figures reported for plastics in primary form correspond to the Speciality Polymers business. Solvay’s portfolio of specialty polymers is 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 through their own performance. Such activities play a crucial role in the decarbonisation of the economy by directly enabling other

activities to be carried out at a low carbon level of environmental performance.

We identified eligible enabling activities using our Sustainable Portfolio Management methodology, taking into account product / 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.

Some of our activities, such as polymer membranes in batteries, or soda ash for glass in double glazing, may be eligible both as transitional and

enabling activities We have therefore removed these activities from the total of eligible activities.

The basis on which the turnover, capital expenditure and operating expenditure were calculated is explained in the Financial statements chapter of

this 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 and allocation rules have not been defined yet.

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Activities NACE

codes

2021 share

of sales

2021 share

of capital

expenditures

2021 share of

operational

expenditures

Eligible as transitional activities

Production of soda ash C.20.1.3 14.9% 19% 17%

Manufacture of plastics in primary forms C.20.1.6 21.5% 28% 20%

Total eligible as transitional activities 36.4% 47% 37%

Eligible as enabling activities

3.1. Manufacture of renewable energy technologies

C25 C26 C27

C28

0.1% NA NA

3.4. Manufacture of batteries C27.2, E38.3.2 1.7% NA NA

of which plastics 1.7% NA NA

3.6. Manufacture of other low carbon technologies C22.1.1, C22.2.9, 16.0% NA NA

of which soda ash 0.6% NA NA

of which plastics 3.1% NA NA

Total eligible as enabling activities 17.8% NA NA

Total of eligible activities 48.7%

NA: not available. Work is going on to adapt databases to be able to extract capital expenditures and operational expenditures corresponding to selected projects, and to

allocate the share of the capital expenditures of each project corresponding to enabling activities eligibility criteria.

5.2. Circular Economy

5.2.1. Definitions

Circular economy is a new approach to business that aims to decouple economic growth from resource consumption. 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 and renewable-based feedstock.

· Retaining the value of the products and materials currently in use by enabling recycling (process additives and technology) or recyclability (by

design) of the product.

· 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-based

materials from cultivation and animal-based materials from breeding. To fit in a circular economy, the material should be produced from food waste

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.

· Products enabling recycling: products designed to increase the recycling yield, with regard to quality and quantity.

· 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.

The measurement of products based on recycled or renewable materials and renewable energy is weighted by applying a factor of 85% to renewable

materials and 15% to renewable energy, according to the average manufacturing cost weight. A similar approach has been defined at the research

and innovation level to monitor the contribution of innovation projects to Solvay’s circularity ambition.

5.2.2. Management approach

Our Circular Economy Transition Program focuses on three categories of actions:

· Increasing the use of bio-based and recycled raw materials.

· Innovating with regard to materials recycling in closed and open circles, and business models.

· Innovating to increase the lifespan of materials.

The transformation of Solvay into a circular economy driver is embedded in our G.R.O.W. strategy. We are working individually and with customers,

suppliers and partners to identify opportunities where the Group can leverage our capabilities.

Our research and innovation project portfolio is screened and prioritized according to the principles of the circular economy and around 20% of our

innovation budget was attributed to circular innovation in 2021.

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By 2030 we want to more than double our sales of circular products to 15% of Group sales.

Solvay is the Chemical Strategic Partner of the Ellen MacArthur Foundation - to contribute to accelerating the transition towards a circular economy.

Chemistry, as a science and an industry, is a tremendously relevant and powerful enabler in material transformation and re-use.

5.2.3. Indicators

We monitor our progress in circular sales in accordance with the three principles of Solvay’s circular business solutions, outlined above.

Units 2021 2020 2019

Turnover of products based on recycled or renewable resources % 5 5 4*

Turnover of products enabling recycling % n.r. n.r. n.r.

Turnover of products increasing longevity % n.r. n.r. n.r.

n.r. (not relevant) these indicators will be deployed in 2022.

* : the method of reporting applied in 2019 was not applying a weight factor between the renewable raw materials and the renewable energy.

External assessment

Our Circular Economy performance level is assessed annually using the Circulytics® framework, co-developed with the Ellen MacArthur Foundation.

Circulytics® aims to:

· measure the entire company’s circularity, not just products and material ﬂows;

· support decision-making and strategy development for circular economy adoption;

· demonstrate strengths and highlight areas for improvement.

· Representatives from the main Solvay Functions and Global Business Units are involved in order to collect relevant information. This process is used

as an opportunity to develop a circular economy mindset throughout the organization.

A single point of contact is identified to consolidate the data and fill in the questionnaire for assessment. The scorecard and feedback provided by

the Foundation are shared and discussed at an appropriate level inside the Group.

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 (NO

), comprise the emissions of nitrogen monoxide (NO) and

nitrogen dioxide (NO

). 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.

Sulfur oxide (SOx) emissions, conventionally expressed as sulfur dioxide (SO

), comprise the emissions of sulfur dioxide (SO

) and sulfur trioxide (SO

SOx emissions arise mainly from the combustion of coal or 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 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 ODP Tonnes, which is defined as the metric tonnes of ODSs weighted by their Ozone Depletion

Potential (ODP).).

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 and those of the Group. Solvay works in close cooperation with local stakeholders to improve air quality at local and regional levels.

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5.3.3. Indicators

ABSOLUTE AIR EMISSIONS

Units 2021 2020 2019

Nitrogen oxides – NOx metric tons 5,882 5,587 6,197

Sulfur oxides – SOx metric tons 3,449 2,808 2,888

Non-methane volatile organic compounds – NMVOC metric tons 3,956 3,286 4,109

Ozone-depleting substances - ODS metric tons 7.7

In 2021, NOx emissions at Group level increased by 295 metric tons - equivalent to 5% - in comparison with 2020. This was mainly due to the economic

upsurge following the 2020 pandemic, which is reﬂected in higher auto-energy production, which increased by 2.7%). The increase is also partly

explained by the need to use more Russian coal instead of petcoke at our Devnya site in Bulgaria.

The SOx emissions at Group level increased by 641 metric tons - equivalent to 25% - between 2020 and 2021. The sites which have contributed the

most to this global change are Torrelavega, in Spain (+301 metric tons), Atequiza, in Mexico (+219 metric tons, due to the higher production rate of

dithiophosphate) and Devnya, in Bulgaria (+118 metric tons, caused by a boiler problem in the desulfurization unit).

The start-up of the new WoodPower I boiler in Rheinberg, in Germany, on April 1, 2021 resulted in an improvement in SOx emissions by 62 metric

tons, achieved through reduced coal usage. The impact of this new biomass boiler on our future SOx emissions will be more visible in 2022.

NMVOC emissions increased by 670 metric tons - equivalent to 20 % - in 2021, as compared to 2020. The biggest increases have been observed on

the sites of Green-River (+470 metric tons) and Panoli (+89 metric tons), both linked to far higher productions; and also on Saint-Fons (+81 metric tons)

due to an issue in one of the production units.

5.4. Water and wastewater

GRI DISCLOSURES 3-3 303-01 303-02 303-03 303-4 303-5

MATERIALITY: PRIORITY

SDG 3 6 12 15

5.4.1. 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 (e.g. drinking

water from the public network) or pumped by Solvay from the public network (drinking water), freshwater systems, such as rivers and lakes, and

groundwater sources (aquifers). 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 wastes. Forexample, water that is taken from a river for cooling and returned to it after

use counts as freshwater withdrawal but not as freshwater consumption.

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 species, COD also contributes to aquatic eutrophication.

Our estimation of water consumption for Solvay’s cradle-to-gate production is effectively equivalent to the water consumption of a product. Simply

put, it is the amount of water withdrawn, minus the amount of water of the same quality released back into the same watershed. This means that the

water used in turbines for hydropower and the cooling of water in open-loop systems are not included in this indicator. Solvay’s main areas of water

consumption are in production, or what is known as industrial water, and in irrigation for bio-based raw materials.

5.4.2. 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.

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The water balance of the Group for 2021 is shown in the table below.

Water withdrawal (Mm

) Water discharge (Mm

)

Surface water (freshwater) 199.8 Surface water (freshwater) 241.3

Surface water (other water) 0 Surface water (other water) 4.4

Groundwater (freshwater) 71.9 Groundwater (freshwater) 0

Groundwater (other water) 5.2 Groundwater (other water) 0

Sea water 79.5 Sea water 83.6

Third party water (freshwater) 130.6 Third party water (freshwater) 99.1

Third party water (other water) 13.5 Third party water (other water) 43.9

Other sources 15.7 All losses 43.3

TOTAL 516.3 TOTAL 515.5

5.4.3. Indicators

FRESHWATER WITHDRAWAL

Units 2021 2020 2019

Freshwater withdrawal Million cubic meter 315 314 330

The freshwater withdrawal at Group level for 2021 remained stable compared to 2020, despite an organic growth of 17%. The biggest changes were

observed on the sites of Dombasle (-6 Mm3, linked to a production decrease of -9 % ), Paulinia (+ 6.4 Mm3, linked to a 17 % higher production rate)

and Spinetta (+ 3.0 Mm3, linked to a +26 % production increase).

The table below shows the number and percentage of sites located in areas subject to hydric stress and gives the freshwater withdrawal and freshwater

consumption for each of these groups in 2021.

2021 Units Areas subject to

water stress

Areas not subject

to water stress

All areas

Number of sites Number 25 102 127

Percentage of industrial sites under operational control % 20.0% 80.0% 100%

Freshwater withdrawal (Million cubic meter)

Million cubic

meters

30.7 284 315

Freshwater consumption (Million cubic meter)

Million cubic

meters

11.6 31.7 43.3

CHEMICAL OXYGEN RELEASES

Units 2021 2020 2019

Chemical oxygen demand (COD) metric tons O

5,735 5,265 5,344

The Group’s 2021 Chemical Oxygen Demand was 470 metric tons O

(+8.9%) higher than in 2020. This global increase fits well with the organic growth

of +17%. Some deteriorations or improvements have been noticed on individual sites, which could be linked to production shutdowns/restarts,

changes in product mix or in the COD removal efficiency of our WWTPs (WasteWater Treatment Plants).

WATER CONSUMPTION IN THE VALUE CHAIN

Cradle-to-gate Life Cycle Assessments allow us to estimate water consumption, including in the upstream value chain.

Units 2021 2020 2019

Water consumption including the upstream value chain Millions cubic meters 195 501 541

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For 2021, the value reported here is lower due to a change in methodology. The 2021 figure corresponds to water consumption calculated as the

difference between intake and discharge, while the previous model used for 2020 and 2019 measured water intake.

5.5. Waste

GRI DISCLOSURES 3-3 306-1 306-2 306-3 306-4 306-5 416-1

MATERIALITY: PRIORITY

SDG 3 6 12 13 14

5.5.1. Definitions

Industrial waste is defined as the waste resulting from our regular manufacturing and research activities. It does not include domestic waste and waste

from demolition or construction projects. Mining waste, which results from the prospecting and extraction of minerals, is considered separately from

industrial 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.

5.5.2. Management approach

For industrial waste, and particularly hazardous industrial waste, Solvay’s focus is on switching to more sustainable methods of disposal that avoid

landfilling or incineration without energy recovery and therefore promote material or thermal recovery.

For non-hazardous, mostly mineral, waste, Solvay is launching material recovery initiatives aligned with our ambition to contribute to the circular

economy.

5.5.3. Indicators

WASTE PRODUCTION

Units 2021 2020 2019

Non-hazardous industrial waste 1,000 tons* 1,316 1,457 1,596

Hazardous industrial waste 1,000 tons* 74.8 71.6 86.6

Total industrial waste 1,000 tons* 1,391 1,529 1,682

Hazardous industrial waste not treated in a sustainable way 1,000 tons* 15.9 18.2 27.2

Non-hazardous industrial waste not treated in a sustainable way 1,000 tons* 41.9 51.4 69.2

Total industrial waste not treated in a sustainable way 1,000 tons* 57.8 69.7 96.4

Mining waste 1,000 tons* 618 637 799

* Metric tons of dry waste

The total industrial waste not treated in a sustainable way for the Group was 11.9 Kt (17%) lower in 2021 compared to 2020, of which:

· -5.9 Kt due to improvements in data accuracy

· -0.6 Kt due to scope changes,

· -3.0 Kt due to valorization of the dry matter content of the wastewater sludge in Zhanjiagang (China),

· -0.73 Kt due to process improvements in Salindres (France),

· -0.46 kt due to coal usage reduction in Tavaux (France),

· -0.43 Kt due to material recovery in diverse industrial applications in Massa (Italy).

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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, both collectively 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 the

way to or from home are not considered as work-related unless the worker was travelling 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 the

accident.

· 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 injury or illness 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 to contractors.

Hazard identification and risk assessments are performed according to Group procedures, which define minimum requirements for methods and the

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;

· 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);

· 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. Sites’ 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.

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Industrial hygiene (IH) ensures hazards are identified and eliminated. 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 to

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 work-related 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 for health promotion 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. During 2021, multilingual communication

campaigns strongly promoted Covid-19 vaccination at Group level.

6.1.3. Indicators

Improvements in occupational health and safety indicators result from the safety culture approach implemented to protect everyone working at

Solvay. This approach is explained in the Risk management chapter of this report.

Solvay started recording reportable injuries and illnesses on July 1, 2020.

The figures in the first three tables below relate to 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. The figures in the remaining tables relate to those manufacturing,

research and innovation, administrative and closed sites in the Solvay Group to which the relevant HSE domain and indicator apply.

NUMBER OF ACCIDENTS

Units 2021 2020 2019

Fatal accidents - Employees Number 0 0 0

Fatal accidents - Contractors Number 0 0 0

H-RII - Employees Number 8 6 11

H-RII - Contractors Number 19 3 1

H-RII - Employees and contractors Number 27 9 12

RII - Employees Number 90 - -

RII - Contractors Number 41 - -

RII - Employees and Contractors Number 131 - -

LTII - Employees Number 44 26 38

LTII - Contractors Number 24 16 13

LTII - Employees and contractors Number 68 42 51

Note: RII was introduced in mid-2020. In previous years, definitions of reportables were specific to Solvay and therefore cannot be compared.

HOURS WORKED

Units 2021 2020 2019

Work hours - Employees 1,000 hours 42,967 45,359 52,266

Work hours - Contractors 1,000 hours 18,622 16,577 25,491

Work hours - Employees and contractors 1,000 hours 61,589 61,936 77,758

Employees’ work hours are based on the full time equivalent multiplied by an average of work hours per employee per year in each country.

Contractors’ work hours are reported monthly by all sites.

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ACCIDENT FREQUENCY RATES

Units 2021 2020 2019

H-RIIR - Employees Accidents per 200,000 hours worked 0.04 0.03 0.04

H-RIIR - Contractors Accidents per 200,000 hours worked 0.2 0.04 0.01

H-RIIR - Employees and contractors Accidents per 200,000 hours worked 0.09 0.03 0.03

RIIR - Employees 0.42 - -

RIIR - Contractors 0.44 - -

RIIR - Employees and Contractors 0.43 - -

LTIIR - Employees Accidents per 200,000 hours worked 0.20 0.11 0.15

LTIIR - Contractors Accidents per 200,000 hours worked 0.26 0.19 0.10

LTIIR - Employees and contractors Accidents per 200,000 hours worked 0.22 0.14 0.13

Note: RII were introduced during 2020. 2021 is the first full year of application of the OSHA metrics.

The rate of high severity accidents (H-RIIR) was three times higher in 2021 than in 2020, mostly due to the impact of the Covid-19 situation on

behaviors and the impact on operations (volume growth, supply chain disruptions) created by the very strong recovery. In addition, four accidents

involving employees and resulting in amputations occurred in 2021 compared to zero in 2020 for both employees and contractors. The rate of Lost

Time accidents (LTIIR) also increased significantly for employees and contractors.

The Group objective of an RIIR below or equal to 0.34 for 2021 was not achieved. This objective was probably too ambitious, as it was based on only

six months of experience using OSHA reporting standards on all our sites. A target of an RIIR of less than 0.4 would have been more realistic, although

this is still lower than the result of 0.43 achieved in 2021.

Globally, our safety results deteriorated in 2021, for several reasons:

· Root causes: taking short-cuts to save time, lack of attention or a sense that something is “always done that way”.

· Behaviors:

- the impact of the Covid-19 situation, specifically a lower presence of leaders and support staff on site;

- moving from low to high production demand in a short time.

Ongoing changes have also added another level of complexity and increased workload.

To ensure improvements, the following actions will be implemented in 2022:

· ensuring that not only site but also Group safety results are communicated to front-line workers, in order to increase awareness of the shift in

performance;

· site leadership, including front-line leaders, are to spend more time in the field;

· providing support, through physical presence, on selected sites, to help identify risks and provide coaching;

· re-energizing campaigns relating to the Solvay Life Saving Rules;

· implementing Competency and Complacency training;

· sites are to share their HSE performance and commitment at Solvay’s Executive Leadership Team meetings.

Industrial hygiene (IH)

A key aspect of our approach to protecting health is the systematic assessment and management of workers’ potential exposures to ergonomic,

chemical and physical hazards. Global industrial hygiene (IH) procedures define minimum requirements for Solvay’s IH risk assessments and

management 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 approach

provides a simple, quick and easy-to-understand hazard ranking.

· Implementation of SOCRATES, a new global tool, at identified sites. We expect to complete this process by the end of 2022, ensuring:

- widespread and easy access to IH methods, tools, and databases;

- consistent performance and documentation of IH risk assessments;

- enhanced 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.

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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 exposures and suggest preventive actions.

· Stress prevention and well-being at work (see chapter 6.2.2 of this report): used to identify main causal factors and launch action plans atsite and

Group levels.

· Health promotion: encouraging employees to get the seasonal ﬂu vaccination.

RECOGNIZED OCCUPATIONAL ILLNESSES

Units 2021 2020 2019

Occupational illness frequency rate (OIFR) per million hours worked 0.23 0.49 0.54

OIFR is the total number of recognized occupational illnesses recorded per million hours worked. It covers Solvay workers who are active, retired or

have left the company and takes into account all recognized occupational diseases, not only short- or mid-latency diseases reported in previous years.

RECORDABLE OCCUPATIONAL ILLNESSES BY TYPE

Units 2021 2020 2019

Hearing disorders Number 0 3 3

Musculoskeletal diseases Number 2 5 10

Other non-carcinogenic diseases Number 1 9 9

Asbestos-related diseases and cancers Number 17 25 39

Other cancers Number 1 5 4

Not specified/Unknown Number 0 0 1

Total Number 21 47 66

The figures in the table above relate to recordable work-related illnesses contracted by Solvay employees who are active, retired or have left the

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 30%. This is the ratio of the total number of Chemical Risk Assessments, both inhalation

and dermal, completed by the site within the last five years, to the total number of Chemical Risk Assessments to be conducted based on the

Chemical Risk Assessment List established by the site.

· 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 2021, 61.9% of our manufacturing and research and innovation sites fulfilled all these criteria, as compared to 44% in 2020.

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 or

urine. It can be used to assess exposure to specific chemicals and helps to verify whether protective measures are effective.

In 2021, 19 sites performed HBM of exposure, for 30 different chemicals (substances/group of substances).

HUMAN BIOMONITORING (HBM) OF EXPOSURE

Units 2021 2020 2019

Sites performing HBM of exposure Number 19 25 35

Sites with at least one result above the Biological Limit Value (BLV) Number 0 1 3

For sites, which had results above the biological limit values, action plans were put in place to reduce the exposure levels.

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Flu vaccination campaign

An intensive awareness campaign was conducted in order to encourage employees to get vaccinated against seasonal ﬂu, specifically within the

context of Covid-19. This resulted in 20.18% of Solvay employees receiving the vaccination. The number of employees vaccinated is likely to be higher

than this, as the figure does not include vaccinations that may have been done by private physicians.

COVID-19 vaccination campaign

Solvay has actively promoted and facilitated Covid-19 vaccination. In countries where it was authorized and possible to do so, Solvay has organized

Covid-19 vaccination campaigns and administered vaccinations. In total, 22 sites administered vaccines and seven additional sites organized

vaccination for their employees.

6.1.4. Key achievements

In 2021, we obtained a Special Commendation in the CEFIC Responsible Care awards, for our project on supporting and transforming health and

well-being in times of Covid-19. It was a global project that included a range of initiatives in support of employee, community and societal health.

In particular, CEFIC appreciated our global approach to creating a sustainable and better life at work, as well as our donations to local communities.

6.2. Employee engagement and well-being

GRI DISCLOSURES 2-30 3-3 401-2 403-4 407-1

MATERIALITY: HIGH

SDG 3 8

6.2.1. 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 good

communication and collaboration, based on International Labor Organization and World Health Organization definitions.

6.2.2. Management approach

ONE Pulse

Employee engagement is measured through confidential surveys open to all employees. This includes global surveys as well as local initiatives, such

as “Voice of the People'' surveys.. The results of our surveys enable the Group and local management to identify strengths and areas where the

working environment and employee experience can be improved.

In 2021, we continued our series of short quarterly surveys, known as ONE Pulse surveys. Available in 14 languages, the ONE 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 experience at work. Our objective

was to equip leaders at all levels in the organization with insights about the wellbeing and experience of their team, foster open dialogue and ensure

continuous improvement throughout the year.

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, health, safety and environment experts, Global Business

Unit (GBU) representatives, and sustainable development experts, representing all regions.

In 2021, a new Better Life at Work program 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, as well as an employees’ representative. Solvay’s Chief

People Officer serves as the Sponsor.

· Observatory: the Better Life at Work Observatory includes indicators gathered from HR and HSE data, the Pulse surveys, and from diagnosis and

assessment (see below).

· Positive actions: These will be defined using the information gathered through the Observatory.

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For diagnosis, we have launched pilots at three Solvay sites, one each in Europe, the Americas and Asia, in collaboration with Jaume I University in

Spain. The project aims to assess not only risk factors we need to address for well-being at work, but also positive factors that we can build on, in

order to create a sustainable Better Life at Work. A similar approach is being developed in the European H-Work Project, which aims 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.

In September 2021, Solvay began deploying a new, standardized global well-being support program, which offers support to all employees requesting

coaching or psychological consultations. Previous to this, a third of Solvay's population was not covered by any mental health support plan. We have

also provided training from qualified experts for 66 physicians and nurses, to help them to support employees that may have been impacted by the

Covid-19 crisis.

Regarding labor relations, discussions and activities are held at four levels: site, country, european and Group.

Solvay Global Forum

In 2015, Solvay created a global employee representative body, the Solvay Global Forum, composed of nine employee representatives from the

main areas where Solvay operates, namely Europe, the US, China, Brazil, India and South Korea. Video Conferences are held quarterly, bringing

together the Solvay Global Forum and the Group’s top management to comment on and discuss the quarterly results of the Group and to keep

everyone informed of the main new projects. Two agreements have been signed with the Solvay Global Forum: Global Performance Sharing 2021 and

Solvay Cares, the latter of which extended maternity and co-parent leave to 16 weeks.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.

Solvay Shares program will be open to employees around the world, irrespective of their position or grading. The employees will get a discount

rate on the share price and free shares for every three shares they own after a lock-in period. By mid-2023, most of the employees will be offered

the possibility to buy shares, and get the same rights like every other shareholder. This program should increase their understanding of the Group’s

performance as well as their sense of belonging.

European Works Council

We have been in permanent dialogue with our European Works Council (EWC) for more than 20 years. In 2021, the EWC met physically on two

occasions and the EWC Secretariat met ten times, either virtually or physically, with senior Group management to help steer Solvay’s evolution. The

main topics discussed were reorganizations, actions taken by the Group to navigate the Covid-19 pandemic, digitization, the evolution of working

conditions with the extension of mobile working, the Group Sustainable Development strategy and Solvay’s financial results.

Solvay Cares

In February 2017 Solvay signed a global agreement guaranteeing a minimum level of welfare and healthcare protection for all Solvay Group employees

worldwide. 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;

· life insurance, including coverage for the family or partner.

An addendum to the agreement was signed in December 2021, offering to introduce more ﬂexibility for parents to enjoy parental leave according

to family needs, and adding the Employee Wellbeing Support program, through which we committed to giving all employees access to confidential

mental health support as from December 2021. By January 2023, when all provider contracts will be reviewed, globally aligned standards of the

Employee Wellbeing Support Program will apply, ensuring coverage not only for the employee, but also for all members of the employee’s household.

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 February 2017, we renewed our Global Framework Agreement with IndustriALL Global Union, adding new social projects, including societal

actions and the protection of mental safety in the workplace. Every year, IndustriALL Global Union representatives meet Solvay employees to check

on compliance in the field. Assessments take place at two different sites: one measures the results of the Group’s safety policy and the other examines

the application of the agreement, covering the following health and safety aspects:

· ensuring good working conditions;

· managing risk as a daily concern;

· defining demanding internal policies and their strict application;

· improving safety performance and regular monitoring of both Solvay’s and contractors’ employees;

· ensuring healthy working conditions for all, regardless of the job they perform and its associated risks.

In 2021, IndustriALL representatives, together with Solvay management, visited four of our Italian subsidiaries in order to assess labor relations. It was;

an opportunity to confirm the positive working atmosphere, safety situation and industrial relations, and identify areas for improvement.

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6.2.3. Indicators

With regards to engagement and well-being at work, four recurring surveys were launched worldwide between November 2020 and September

2021, collecting an average of 12,000 responses, a response rate 50% higher than for 2020 surveys.

Each survey is made up of between ten to 12 questions measuring well-being, safety and other dimensions related to employee experience, such as

relationships with managers, remote working, Solvay behaviors and workload.

In the four surveys, employees were asked how they were feeling. The percentage of respondents feeling “OK or better” was over 70% on average,

remaining relatively stable as compared to 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 ﬂyer for all employees, available in multiple languages., These provide guidance and suggestions about

where to turn for help and encouragement, in order to better support those employees who have reported feeling “less than OK”.

During the last four weeks, in general, how have you been feeling?

Units Nov. 2020 Mar. 2021 Jun. 2021 Sep. 2021

OK or better % 73 67 74 76

Less than OK % 27 33 26 24

We also include three engagement questions in our ONE Pulse survey annually. This revealed that about 75% of employees were satisfied and proud

to be working at Solvay and that about 70% would recommend the company as a great place to work.

Employee Representation Indicator

100% of Solvay employees are covered by a collective agreement. This is the Solvay Cares collective agreement with the global employee

representative body, the Solvay Global Forum.

Trade unions are present at a majority of Solvay sites around the world. Union membership is estimated at 20% in Europe, 25% in South America, 30%

in North America and 70% in Asia.

6.2.4. Key achievements

In responding to the Covid-19 crisis, it was proven that people could work collaboratively from outside the office. As a result, we successfully launched

a global mobile working policy, which was deployed across 35 of our administrative sites in 19 countries. More than 7,500 employees are now working

in a hybrid mode with both remote and on-site work.

During this period we continued to develop the framework used for meeting with our representatives in a hybrid mode. This involved face-to-face

meetings where possible, but also making use of the ﬂexibility offered by remote communication, especially in cases where a topic justified a shorter

discussion or needed to be held at shorter notice.

6.3. Diversity and inclusion

GRI DISCLOSURES 3-3 405-1 405-2

MATERIALITY: PRIORITY

SDG 8

6.3.1. Definitions

Solvay defines diversity, equity and inclusion in the following way:

· Diversity is the representation of various identities and differences of individuals in a group.

· Equity is creating equal access to opportunity by recognizing the existence of advantages for some and barriers for others; promoting justice,

impartiality and fairness within the procedures, processes and distribution of resources by institutions and systems.

· Inclusion is 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.

6.3.2. Management approach

We have identified nine action plans to foster diversity, equity and inclusion by 2025:

Diversity:

· Accelerate gender parity at all mid and senior levels: achieve gender parity by 2030. The first step is carrying out a Gender Impact Assessment (GIA)

to identify where current policies may be negatively impacting the advancement of female employees within the organization.

· Make our workplace more appropriate for people with disabilities: set up a Solvay Disability Equality Index and improve our results. The first step is

conducting an audit of the organization, encompassing everything from premises to services, to identify potential barriers.

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· Develop Resource Groups to encourage employees to bring their “whole self” to work: set up diverse employee resource groups (ERGs) worldwide.

The first step was to launch the first ERGs for Women, Men Advocating for Real Change, LGBTQ+ and at least one Ethnic Minority Group by the

end of 2021.

Equity:

· Assess if there are undesired pay gaps and close them: identify potential structural and gender pay gaps and develop and implement a plan of

action to close them. The first step is building and reporting the ratio of pay of women to men by management level.

· Ensure fair recruitment: all mid and senior level job openings to have a shortlist comprising 50% of under represented groups, including women.

The first step is reviewing and adjusting job descriptions and recruitment campaigns to be more diverse and friendly.

· Ensure equitable access to career opportunities and development: set up mentor/mentee programs starting with under-represented groups. The

first step was to ensure that all our selected Future Top Leader Women and Asian talents had a structured mentorship program in place by the end

of 2021.

Inclusion:

· Build an inclusive employee experience: set up an Inclusion Index and improve our score. The first steps are developing and deploying inclusive

training for new employees at Solvay, and setting up a survey to have a first point of reference.

· Assessment and development program for Solvay leaders to grow and nurture an inclusive mindset: the Global Business Unit (GBU) Presidents

and Heads of Functions have a DEI score for their GBUnit or Function and develop a plan to improve their score. The first step is enrolling all of the

Senior Leadership Team in inclusion workshops.

· Build a culture in which individuals feel empowered to speak out or speak up when they experience or witness non-inclusive behaviors, in line with

our Code of Business Integrity: 90% of our employees must feel safe to speak up or speak out when confronted with non-inclusive behaviors. The

first step is running an awareness campaign to inform all employees about what inclusive behavior is and what it is not.

6.3.3. 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:

· improving the gender mix at all levels of the organization;

· leveraging the generational mix to optimize learning, knowledge and experience;

· developing national and cultural talent that mirrors growth opportunities;

· enriching the team mix by leveraging experiences and backgrounds;

· 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, thanks to Solvay’s sustainability network and best practices.

WOMEN IN SENIOR + MIDDLE MANAGEMENT

Unit 2021 2020 2019

Senior and Middle management % 25.0 24.7 24.3

GENDER DIVERSITY BY EMPLOYEE CATEGORY

Units 2021 2020 2019

Women in senior management % 16 15 14

Women in middle management % 26 26 26

Women in junior management % 35 34 33

Women in non-managerial positions % 19 20 20

Total women in Solvay % 23 24 23

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AGE GROUP BY EMPLOYEE CATEGORY

Units 2021 2020 2019

Senior management headcount 328 364 369

Percentage under 30 years old % 0 0 0

Percentage between 30–49 years old % 29 27 29

Percentage 50 years old and older % 71 73 71

Middle management headcount 2,697 2,819 2,895

Percentage under 30 years old % 0 0 0

Percentage between 30–49 years old % 48 47 49

Percentage 50 years old and older % 52 53 51

Junior management headcount 4,743 4,993 5,246

Percentage under 30 years old % 8 8 10

Percentage between 30–49 years old % 65 65 64

Percentage 50 years old and older % 27 27 26

Non-managerial headcount 13,838 15,487 15,645

Percentage under 30 years old % 11 16 14

Percentage between 30–49 years old % 55 50 55

Percentage 50 years old and older % 33 34 32

SOLVAY’S WORKFORCE BY AGE

Units 2021 2020 2019

Under 30 years old Number 1,976 2,928 2,649

Between 30–49 years old Number 12,127 12,425 13,422

50 years old and older Number 7,503 8,310 8,084

Total headcount Number 21,606 23,663 24,155

According to the above table, the age structure is currently:

· 35% older than 50;

· 56% between the ages of 30 and 49;

· 9% younger than 30.

RATIO OF BASIC SALARY OF WOMEN TO MEN BY MANAGEMENT CATEGORY

The table below represents the ratio of unadjusted (without correction for age or seniority) average pay between male and female employees where

the average pay of male employees is 1.00:

Country Junior management Middle management Senior management

Belgium 0.97 0.96 1.06

Brazil 0.93 0.93 ND**

China 0.89 0.99 ND**

France 0.97 0.95 0.95

Italy 0.99 0.89 0.88

US 0.94 0.99 0.95

**ND: not disclosed; too few data points in one or two measurement groups to make a statistically meaningful measurement.

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6.4. Recruitment, development, and retention

GRI DISCLOSURES 2-7 2-8 3-3 401-1 401-2 404-1 404-2 404-3

MATERIALITY: MODERATE

6.4.1. Definitions

Recruitment, development and retention provide data linked to talent management. This relates to how Solvay is attracting, retaining and developing

talent and includes details on career management and access to training, coaching and mentoring that enables each employee to take 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 from our

figures.

6.4.2. Management approach

Recruitment and Retention

Of the 1,591 positions recruited for in 2021, 591 were filled by employees aged below 30. The Group also welcomed 238 apprentices, 51 trainees and

195 students.

Onboarding newcomers

Of all newcomers who joined Solvay in 2021, 94.2% were satisfied with the hiring process and 98.0% of newcomers were satisfied with their decision

to join the Group.

Learning and Development

AVERAGE HOURS OF TRAINING PER EMPLOYEE

By management level Units 2021 2020

Senior manager hours 11.6 7.02

Middle manager hours 13.3 5.29

Junior manager hours 14.8 8.75

Non managerial hours 15 14.27

AVERAGE TRAINING HOURS

By gender Units 2021 2020

Women hours 15.2 11.87

Men hours 14.5 11.92

Performance and development cycle

The performance and development cycle applies to the entire managerial population. It is also used by about 4,270 non-managerial employees,

representing 27% of the non-managerial population. Local performance and development tools and processes are available for the population not

covered by the performance and development cycle online tool.

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6.4.3. Indicators

SOLVAY’S WORKFORCE BY REGION

Units 2021 2020 2019

Europe Number 10,318 11,428 11,264

Women % 25 26 25

Permanent staff % 96 89 97

Asia-Pacific and rest of the world Number 4,088 4,336 4,411

Women % 25 25 25

Permanent staff % 78 77 73

North America Number 5,129 5,553 6,175

Women % 20 21 20

Permanent staff % 100 100 100

Latin America Number 2,071 2,346 2,305

Women % 19 20 20

Permanent staff % 89 93 98

Total headcount Number 21,606 23,663 24,155

Women % 23 24 23

Permanent staff % 92 90 93

The scope of this table is consistent with financial reporting.

SOLVAY’S WORKFORCE

Units 2021 2020 2019

By contract and by gender

Permanent contract Number 20,288 22,925 22,534

of which women % 23 24 23

Temporary contract Number 1,320 738 1,621

of which women % 29 22 28

By employment type

Full-time contract Number 20,981 22,621 23,575

of which women % 22 23 22

Part-time contract Number 417 524 580

of which women % 54 70 71

By employment category

Senior manager Number 328 364 369

Middle managers Number 2,697 2,819 2,895

Junior manager Number 4,743 4,993 5,246

Non managerial Number 13,838 15,487 15,645

Total headcount Number 21,606 23,663 24,155

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HIRINGS

Units 2021 2020 2019

By region

Asia and rest of the world Number 203 238 258

Europe Number 749 847 727

North America Number 488 273 520

Latin America Number 151 342 175

By gender

Male Number 1,103 1,081 1,185

Female Number 488 532 495

By age

<30 Number 591 959 759

30–49 Number 845 597 791

>49 Number 155 129 130

Total hirings Number 1,591 1,700 1,680

ALL LEAVES

Units 2021 2020 2019

By region

Asia and rest of the world Number 475 365 325

Europe Number 771 1,571 948

North America Number 865 989 632

Latin America Number 309 652 336

By gender

Male Number 1,724 2,450 1,636

Female Number 695 1,123 605

By age

<30 Number 392 1,253 458

30–49 Number 1,064 1,070 1026

>49 Number 964 1,253 757

Total leaves Number 2,420 3,577 2,241

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VOLUNTARY LEAVES

Units 2021 2020 2019

By region

Asia and rest of the world Number 236 207 208

Europe Number 304 591 396

North America Number 318 205 286

Latin America Number 57 322 88

By gender

Male Number 628 828 1636

Female Number 287 497 605

By age

<30 Number 213 594 274

30–49 Number 539 455 526

>49 Number 163 275 178

Total voluntary leaves Number 915 1,325 978

6.4.4. Key achievements

To support our employees through the Covid-19 crisis, we increased our focus on virtual delivery and virtual content, particularly with workshops

to help employees and managers with topics specific to the crisis. Employees have access to a pool of internal coaches and mentors, and can also

develop by contributing to a project. Some examples include:

· Upskill our Front line:

- Solvay’s Leadership Team approved a significant investment in the continued development of our customer-facing teams. The launch of our

Sales Academy will help our commercial teams continue to develop long-term, mutually beneficial relationships.

· Face the Crisis:

- Our internal coaching community has been mobilized to support more than 60 individuals. This includes “ﬂash coaching”, through three

targeted sessions, to boost remote management abilities, deal more efficiently with uncertainty and to re-engage more than 30 teams.

- Specific support has been provided to top leaders through reverse mentoring to upskill them in using remote collaboration tools to recon-

nect.

- Coaching tips are included in communications with senior managers, on topics such as performance dialogue and crisis management.

· Focus on Remote Learning:

- Instructor-led classes represented 33% of total training hours in 2021, as compared to 50% in 2020. Web-based and Virtual Classroom hours

increased by 108% compared to last year.

6.5. Customer welfare

GRI DISCLOSURES 3-3

MATERIALITY: HIGH

6.5.1. Definitions

The Net Promoter Score (NPS) is the indicator used to measure customer loyalty for each of Solvay’s Global Business Units (GBUs). The metric was

developed by, and is a registered trademark of, Fred Reichfeld, Bain & Company and Satmetrix. GBU scores are consolidated at the Group level

through a revenue-based weighted average.

The Net Promoter Score is calculated based on customer responses to a single question: “How likely is it that you would recommend our company

to a friend or colleague?” Answers can range from 0 to 10. Those who respond 9 or 10 are called Promoters and considered likely to exhibit value-

creating behaviors, making positive referrals to other potential customers. Those who respond with a score from 0 to 6 are labeled Detractors and

are not supportive. Those who give a response of 7 or 8 are labeled Passives. The Net Promoter Score is calculated by subtracting the percentage of

Detractors from the percentage of Promoters.

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Solvay uses the Net Promoter System

methodology to boost customer loyalty by promoting a culture of customer feedback and by developing

active listening skills at every single touchpoint in the customer journey. The objective is to go far beyond “just a score” toward a deep transformation

of the Group by fostering a more customer-centric culture.

The Net Promoter System

is structured around two pillars, allowing us to gather insights at both the strategic and operational levels. The objective

of the first and more strategic stage is to identify and further reinforce the areas where the Group truly stands out against the competition in order

to raise customer loyalty and accelerate growth. The second, more operational, stage captures how customers perceive our offer from a day-to-day

perspective. These key insights trigger tangible action plans – both account-specific and at the GBU level – to bring Solvay closer to our customers

and better serve them by delivering more suitable and efficient services.

6.5.2. Management approach

Since 2014, each GBU has conducted a customer satisfaction survey at least once every two years to check their strategic alignment with the trends in

their business environment. The aim is to identify and select the right areas for each GBU to focus on, as well as to foster differentiation and accelerate

growth.

The Net Promoter Score has been selected as the key indicator of customer loyalty for the Group. It is measured at the Global Business Unit level,

consolidated at the Group level and published annually.

In 2018, Solvay decided to take this approach to the next level by launching the Net Promoter System

, aimed at transforming the work practices of

the entire frontline population across all GBUs and geographies. This ensures that a customer feedback culture is embedded in our DNA.

The insights gathered from our customers trigger action plans, allowing us to continuously adapt our value proposition to better serve our customers

and increase our share of wallet.

6.5.3. Indicators

In 2021, we sent more than 10,000 surveys to our customers and collected more than 2,000 reponses. This feedback, provided by NPS surveys,

combined with other Voice of Customer feedback, was used to drive tactical and strategic changes. 

In 2022, the approach described above will evolve to ensure a better focus on customers that are generating the highest value for the company, in

line with our customer segmentation approach, in place from 2020.

Units 2021 2020 2019

Solvay’s Net Promoter Score (NPS) % 32 NA 33

ECOVADIS ASSESSMENT

About 150 customers, representing more than 20% of Solvay’s sales, use EcoVadis to assess Solvay’s performance as a supplier. The EcoVadis

sustainability assessment methodology is an evaluation of how well a company has integrated the principles of sustainability and Corporate Social

Responsibility (CSR) into their business and management system.

Solvay is in the top 1% of companies rated by EcoVadis in the manufacture of basic chemicals, fertilizers and nitrogen compounds, plastics and

synthetic rubber in primary forms industry.

SOLVAY’S ECOVADIS SCORE

Units 2021 2020 2019

Environment % 70 70 70

Labor and Human Rights % 80 80 80

Ethics % 70 70 70

Sustainable Procurement % 80 80 80

Overall score % 75 75 75

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6.6. Corporate citizenship

GRI DISCLOSURES 3-3 413-1

MATERIALITY: HIGH

SDG 9 17

Value creation is now a collaborative effort, both within Solvay and between Solvay and our stakeholders. We build on this collaborative effort by

facilitating employee participation in projects that serve society and by offering Solvay’s expertise in the regions where we operate. Disclosure of

Solvay’s indirect economic impact is provided in this section.

6.6.1. Definitions

Our corporate citizenship is carried out through societal actions, which consist of volunteer activities developed by a site or Global Business Unit

(GBU), or at the corporate level. These actions have a positive societal impact on at least one of the United Nations Sustainable Development Goals

and are aligned with one of the following three pillars: science and innovation, education and sustainability.

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. The latter are all presented to the Committee by an

internal sponsor, who is also the person who will follow up the project.

In 1923, Solvay created the Ernest Solvay Fund to honor the founder of the company, who died a year earlier. Today, the majority of Solvay’s corporate

philanthropy goes through the Ernest Solvay Fund, which is managed by the independent King Baudouin Foundation. Examples include the Solvay

Prize and the Solvay Institutes, our partnership with the Ellen MacArthur Foundation and the Bertrand Piccard Alliance.

Business Programs for Social Needs are programs that generate business value through addressing social needs. These programs fall under the

governance of the relevant GBU. Examples include the Sustainable Guar Initiative, managed by Novecare, and the Sustainable Vanilla Initiative,

managed by Aroma.

The Site Director is 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, the local sustainability correspondent and employee representatives.

Employee initiatives are encouraged and supported. An example of this are our Citizen Day actions. The event itself is organized and managed by

the Corporate Citizenship committee, but implemented by the individual sites.

6.6.3. Indicators

Citizen Day 2021

Citizen Day gives Solvay employees around the world the opportunity to engage in actions with local communities. The event was created by our

CEO, Ilham Kadri, in 2019 to reinforce our purpose - we bond people, ideas, and elements to reinvent progress - and encourage employees to act

as one team for one planet.

Biodiversity was the theme of our Citizen Day in 2021. The event provided a unique opportunity for Solvay employees to reconnect, raise awareness

on this topic and take actions to help strengthen biodiversity.

Employees involved in Citizen Day 2021 actions reported the following outcomes:

· 14,770 participations

· 523 actions

· 121 participating sites

· 20,000 Euros raised and donated to biodiversity-related NGOs

A diverse number of actions were organized as part of the event, from bird shelter building workshops to large conferences with talks from scientists.

It was also a great opportunity to present successful nature restoration projects. All organized events were recorded, creating a useful database for

future projects.

6.6.4. Major projects

Covid-19 actions and contributions

Solvay's various businesses around the globe have supported local communities and healthcare workers during the Covid-19 pandemic. We partnered

with customers to provide much-needed face shields, ventilators and other emergency supplies to help heroic healthcare and other workers on the

front line in the fight against the virus. Solvay also donated hydrogen peroxide and hand sanitizers to hospitals and pharmacies, and provided support

to local nonprofits and community organizations caring for the most vulnerable populations impacted by the pandemic.

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The Chemistry for the Future Solvay Prize

The Chemistry for the Future Solvay Prize recognizes major scientific discoveries with the potential to shape chemistry in the future and advance

human progress. Created in 2013, this prize perpetuates Ernest Solvay's lifelong support of, and passion for, scientific research. Our objective is to

endorse key research and highlight the essential role of chemistry, both as a science and an industry, in helping to solve some of the world’s most

pressing issues.

The 2022 Science for the Future Solvay Prize has been awarded to Katalin Karikó, Adjunct Professor at the University of Pennsylvania, in the US, and

Professor at the University of Szeged, in Hungary, for her work on the biochemical modification of synthetically produced messenger RNA (mRNA),

which has enabled the rapid development of vaccines. Her research was most notably used by Pfizer/BioNTech and Moderna to build Covid-19

mRNA vaccines, which have saved many lives. It could also help fight other diseases like cancer, infection from inﬂuenza, malaria or HIV in the future.

Professor Karikó has dedicated her 40-year career to using RNA as a therapeutic, with chemistry as a key element to modify the mRNA to avoid the

risk of rejection by the immune system.

The XperiLAB.be project

The XperiLAB.be project exists to increase awareness of science among young people, using a personal, hands-on approach. XperiLAB.be is also an

opportunity to give pupils and teaching staff the tools that they often lack in class. It is designed for children in the last two years of primary school

and the first two years of secondary school. Every year about 10,000 pupils attend sessions in the XperiLab.

Ellen MacArthur Foundation

In January 2018, Solvay and the Ellen MacArthur Foundation signed a three-year Global Partner agreement that gives the Group an opportunity to

make a difference in accelerating the transition to a circular economy in the chemicals sector.

Sustainable Guar Initiative

Solvay is the world’s leading producer of guar derivatives. Guar is a drought-resistant legume grown in semi-arid areas, predominantly in India.

Rajasthan accounts for approximately 70% of the country’s production.

Since 2015, Solvay has been spearheading a large-scale development initiative to make guar cultivation more sustainable, while boosting the incomes

of the farmers who produce it. In collaboration with L’Oreal and Henkel, two of our strategic customers active in personal care, and with the support

of the NGO TechnoServe, more than 7,000 farmers in Bikaner were trained over four years, and more than 971 kitchen gardens were developed in

36 villages.

The initiative’s primary objective is to encourage sustainable and climate-smart agriculture, thereby increasing farmers’ revenues through good guar

cultivation practices for seed selection, seed treatment, sowing and pest management. The initiative also empowers women through specific training

on hygiene, health, and nutrition, which enables us to:

· Encourage better nutritional practices by growing vegetables in kitchen gardens in a region where the traditional diet is very limited.

· Improve health and hygiene practices for the women themselves and their children.

The initiative also focuses on agroforestry, with more than 66,000 trees planted to fight sand movement and soil erosion in the fields. In addition to

this, trees are planted in communities and technical advice is provided, making 12 different types of fruit available to these communities.

As water is a rare resource in Rajasthan, a village pond with a capacity of 15.89 million liters was created, helping 150 households to have increased

access to drinking water. Rooftop rainwater harvesting systems were also installed, collecting 8,000 liters of water used for the kitchen gardens.

The Solvay Solidarity Fund has also donated €100,000 to help address Indian guar farmers’ urgent economic and sanitary needs resulting from the

Covid-19 crisis. Guar farmers have seen a drop in their income because of severe restrictions on movement. They have also been affected by poor

monsoon conditions, which have reduced guar yields. The donation will help the farmers meet their urgent needs, through the distribution of sanitary

kits and agricultural inputs, while also helping them to become more resilient in the future, by building lake ponds, for instance.

The result of this initiative is that guar farmers can earn a better living, global buyers can obtain higher quality guar and the market can benefit from

improved supply security.

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6.7. Hazardous materials

GRI DISCLOSURES 2-23 3-3 403-7 416-1

MATERIALITY: HIGH

SDG 3 6 12 13 14

6.7.1. Definitions

Product stewardship means managing risks throughout a product’s entire life cycle, from the design stage to end of life. Risks include the possibility

of 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 healthcare, food and feed

applications.

6.7.2. 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 the commercialization

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 the local languages.

In line with our Responsible Care commitment, we are constantly improving our knowledge of how Solvay products are used and the associated

risks. 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 chemicals regulations such as REACH (Registration,

Evaluation, Authorization and Restriction of Chemical Substances) in the European Union, UK REACH in the United Kingdom, K-REACH in South

Korea, 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 focus on the SVHC on the EU REACH authorization list (annex XIV) and EU REACH candidate list, but we also go beyond

this, following an internal process in our operations worldwide. Specifically, we have set up our own reference list of SVHCs, the Solvay-SVHC and

Substance Requiring Attention (SRA). This was established in 2015 and includes three categories:

· Black list Solvay-SVHCs: already undergoing a regulatory phasing out process with a known deadline in at least one country or zone, or a restriction

for Solvay relevant uses.

· 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 due to

their known hazardous properties or potential effects.

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 Analysis of Safer Alternatives (ASA) covering newly identified listed SVHC are performed within three years. All current Analysis of Safer

Alternatives shall be reviewed every three years.

6.7.3. Indicators

SAFETY DATA SHEETS

Solvay currently places over 15,000 products on the market and produces safety data sheets (SDS) in 41 languages and specific SDS for 65 countries.

Product Stewardship programs give adequate information and technical assistance to customers, ensuring a good understanding of products and

how to safely use and handle them. Each of our Global Business Units (GBUs) 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 2021, this automated shipping function was activated for 94.6% of Solvay sales, and the roll-out will continue in 2022.

This automatic delivery of the SDS was successful for 83% of shipments, where SDS were available for the delivery country and the customer’s email

address was also available). When errors occurred, SDS were emailed manually.

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PRODUCTS REGISTRATION

REACH 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 incurred

along the value chain. Solvay fully complies with the extensive REACH requirements for product registrations. We registered 744 dossiers and are

the lead or sole registrant for 263 substances. In accordance with the Cefic Action Plan program, we are also dedicated to improving the quality of

REACH dossiers.

Regular updates of dossiers are performed according to REACH obligations, either as new information becomes available or at the request of the

European Chemical Agency (ECHA). In total, we have carried out 621 REACH updates on dossiers, with 91 in 2018, 152 in 2019, 142 in 2020 and

236 in 2021.

Based on the knowledge we have gathered through REACH on our products and associated risks, Solvay has updated the classification of all

products based on the new Global Harmonized System.

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 13 dossiers in 2019 and 23 in 2021 in the framework of Korean REACH;

· reported 545 substances or polymers to be registered in the framework of KKDIK Reach Turkey, including 66 potential lead dossiers;

· reported 5,216 substances in the framework of “existing chemicals” in the Eurasian inventory;

· reported 275 substances in the framework of the National Chemical Inventory (NCI) of Vietnam;

· submitted 8 substances in the framework of the new Chinese MEE order N°12.

For UK REACH, Solvay successfully completed 136 grandfathering registrations and 1569 Downstream User Import Notifications (‘DUIN’) within the

relevant regulatory deadlines.

SAFER ALTERNATIVES FOR MARKETED PRODUCTS: SVHC according to the EU REACH legislation

Solvay is closely monitoring the SVHC according to the EU REACH Candidate list and EU REACH Authorization list (annex XIV) by identifying all

Marketed products containing a concentration above 0.1% of those substances,sold not only in the EU but Worldwide.

Units 2021 2020 2019

SVHCs EU REACH Candidate list

(1)

present in Marketed products above 0.1%

on a worldwide scope

Number 37 40 29

Analysis of safer alternatives required

(2)

Number 62

Of which completed % 58

Of which effective replacement achieved % 29

(1) According to the EU REACH authorization list (annex XIV) and EU REACH Candidate list. SVHCs manufactured by, or forming part of, the composition of products

sold by Solvay worldwide. REACH is a European Union Regulation, adopted to improve the protection of human health and the environment against the risks that can be

posed by chemicals.

(2) Analysis of Safer Alternatives for potential substitution for an SVHC. A substance may be present in more than one product.

Analysis of safer alternatives is required and planned for a total of 62 combinations of products and applications. Of the 35 analyses of safer alternatives

completed as of December 31, 2021, since the start of the program:

· 10 have led to effective replacement, either through SVHC substitution or reduction below required threshold, or through stopping production.

· 17 are ongoing, meaning that an alternative has been identified and discussed with customers for implementation.

· 8 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.

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The 37 substances identified from the EU REACH Candidate list and EU REACH Authorization list (annex XIV) , present in sold products above 0.1%

on a worldwide scope, are the following:

Substance CAS Number

1,2-Ethanediamine

2,2-bis(bromomethyl)propane-1,3-diol

2-Ethoxyethanol

2-Methoxyethanol

2-Methylimidazole

4,4'-Methylenedianiline

5-Methylhexahydrophthalic anhydride

Acrylamide

Benz[a]anthracene

Benzo  pyrene

Bis(2-methoxyethyl) ether

Chromic acid strontium salt

Chrysene

Decamethylcyclopentasiloxane

Dicyclohexyl phthalate

Dioxane

Ethanol, 2-[2-[2-[2-(4-nonylphenoxy)ethoxy]ethoxy]ethoxy]-

Ethoxylated nonylphenol (various grades of EO)

Ethoxylated octylphenol (9 EO)

Fluoranthene

Methoxyacetic acid

N, N-Dimethylacetamide

N,N-Dimethylformamide

N-Methylpyrrolidone

Nonylphenol Ethoxylate 6 mol

Nonylphenol, ethoxylated (various grades of EO)

Octamethylcyclotetrasiloxane

Octylphenol ethoxylated (various grades of EO)

Phenanthrene

Phenol, 4,4'-(1-methylethylidene)bis-

Phenol, 4-nonyl-, branched

Poly(oxy-1,2-ethanediyl), .alpha.-(isononylphenyl)-.omega.-hydroxy-

Poly(oxy-1,2-ethanediyl), .alpha.-[(1,1,3,3-tetramethylbutyl)phenyl]-.omega.-hydroxy

Poly(oxy-1,2-ethanediyl), -(4-nonylphenyl)--hydroxy-, branched

Pyrene

Refractory brick

Tris (nonylphenyl) phosphite

107-15-3

3296-90-0

110-80-5

109-86-4

693-98-1

101-77-9

19438-60-9

79-06-1

56-55-3

50-32-8

111-96-6

7789-06-2

218-01-9

541-02-6

84-61-7

123-91-1

7311-27-5

68412-54-4

9002-93-1

206-44-0

625-45-6

127-19-5

68-12-2

872-50-4

34166-38-6

9016-45-9

556-67-2

68987-90-6

85-01-8

80-05-7

84852-15-3

37205-87-1

9036-19-5

127087-87-0

129-00-0

142844-00-6

26523-78-4

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Safer alternatives for marketed products: beyond legislative requirements

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. Solvay has a target to phase out all substances of very high concern present in marketed

products at a quantity of more than 0.1% by 2030, whenever feasible.

Units 2021 2020 2019

All Solvay-SVHCs

(1)

present in Marketed products above 0.1% on a worldwide scope

Number 133 97 78

Analysis of safer alternatives required

(2)

Number 152 130 117

Of which completed % 45 51 54

Of which effective replacement achieved % 30 31 30

(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.

(2) Analysis of Safer Alternatives for potential substitution for an SVHC. A substance may be present in more than one product.

Analysis of safer alternatives is required and planned for a total of 152 combinations of products and applications. Of the 69 analyses of safer

alternatives completed as of December 31, 2021, since the start of the program:

· 22 have led to effective replacement, either through SVHC substitution or reduction below required threshold, or through stopping production.

- Example: N,N-Dimethylformamide: product commercialization stopped

- Example: N-Methylpyrrolidone: product replaced by an NMP-free product variant

· 24 are ongoing, meaning that an alternative has been identified and discussed with customers for implementation.

· 23 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.

6.8. Critical incident risk management

GRI DISCLOSURE 2-27 3-3 307-1

MATERIALITY: HIGH

SDG 3 12 13

6.8.1. Definitions

The 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 Full Time Equivalent (including employees and contractors and assuming 2,000 working hours per worker, per year). This rate

is monitored and enables benchmarking with peers.

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;

· Loading or unloading at an off-site location, if Solvay or a logistics provider contracted by Solvay is performing the loading or unloading.

6.8.2. Management approach

Process safety

Process Safety Management is a management system for designing and operating industrial processes that handle large quantities of hazardous

chemicals. For preventing and controlling incidents in industrial processes, Solvay applies the Process Safety Management Principles on all industrial

sites, regardless of whether or not 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 the

risk 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 the

application 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 as soon as possible, in order to identify root causes and implement preventive actions to avoid similar incidents

in the future.

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· 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.

· P ublication of Process Safety bulletins for the most significant incidents, distributed to all sites. These bulletins are used by the sites as support

materials for safety 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 main

elements are :

· regulatory watch and compliance with applicable transport regulations;

· training;

· selection process of 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 level 1, level 2 and level 3;

· incident reporting and investigation;

· auditing.

6.8.3. Indicators

Process safety

Solvay’s target is to avoid any high or catastrophic severity incidents and to reduce the Process Safety Incident rate.

Units 2021 2020 2019

Process Safety Incident rate per 100 FTE 0.9 0.9 0.9

Process Safety Incidents with high or catastrophic severity Number 0 0 1

Number of Process Safety Incidents per 100 full time employees (employees and contractors, assuming 2,000 hours of work per worker per year).

Units 2021 2020 2019

Process Safety Incidents with release to the environment Number 30 26 34

of which with operating permit exceedance Number 17 14 16

of which without permit exceedance Number 13 12 18

This consolidated data covers all operational sites, including research and innovation centers with significant chemical process risks, but excluding mines, quarries and

laboratories with lower risks.

No incidents with significant off-site environmental impact were reported in 2021. In 2021, 30 process incidents with release to the environment were

reported and, among those, 17 generated reportable cases of having exceeded an operating permit limit.The reduced number of releases into the

environment in 2020 is a consequence of the reduction in industrial activity caused by Covid-19.

Transport safety

All medium, high and catastrophic transport safety incidents must be reported in the corporate reporting tool, with a detailed description and

classification. Root cause analysis, including actions to prevent recurrence and lessons learned bulletins are mandatory for all high severity and

catastrophic incidents, and for medium severity incidents resulting in a fire or an explosion.

TRANSPORT SAFETY INCIDENTS:

Units 2021

Medium severity Number 7

High severity Number 0

Catastrophic Number 1

The main incident reported in 2021 was:

· Catastrophic: during a road pre-carriage operation prior to an air shipment, a truck driver had an accident while reversing on a parking lot at Mumbai

airport, which resulted in the death of one person.

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7. GRI CONTENT INDEX

7.1. Statement of use and GRI 1 used

Solvay has reported in accordance with the GRI Standards for the period January 1, 2021 to December 31, 2021.

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 the

report.

7.2. GRI 2: general disclosures 2021

THE ORGANIZATION AND ITS REPORTING PRACTICES

Disclosure Location Omission

2-1 Organizational details Financial statements: Note F1 Revenue and segment information, page 213

Note F40 List of companies included in the consolidation scope, page 312

2-2 Entities included in the organiza-

tion’s sustainability reporting

Extra-financial statements: 2.1. Reporting practices, page 145

Financial statements: Note F40 List of companies included in the consolidation

scope, page 312

2.3 Reporting period, frequency

and contact point

Reporting period: from January 1, 2021 to December 31, 2021

Frequency: yearly and aligned on financial reporting

Contact point: investor.relations@solvay.com

Publication date: April 4, 2022

2.4 Restatements of information Financial Statements: Consolidated Financial Statements: Main events and

changes in consolidation scope during the year, page 214

Extra-financial statements: 2.1. Reporting practices, page 145

2-5 External assurance Auditor’s report for the extra-financial statements, page 324

ACTIVITIES AND WORKERS

Disclosure Location Omission

2-6 Activities, value chain and other

business relationships

Value chain, page 60

Performance: Underlying figures per segment, page 80

2-7 Employees Extra-financial statements: 2.1. Reporting practices

Extra-financial statements: 6.4. Recruitment, development and retention, page 192

2-8 Workers who are not employees Extra-financial statements: 6.4. Recruitment, development and retention, page 192

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GOVERNANCE

Disclosure Location Omission

2-9 Governance structure and com-

position

Corporate Governance Statement: Board of Directors and Board Committees,

page 94

2-10 Nomination and selection of

the highest governance body

Corporate Governance Statement: Board of directors and board committees,

page 94

Charter of Corporate Governance

https://www.solvay.com/en/investors/corporate-governance

2-11 Chair of the highest gover-

nance body

Corporate Governance Statement: Board of directors and board committees,

page 94

2-12 Role of the highest governance

body in overseeing the management

of impacts

Charter of Corporate Governance

https://www.solvay.com/en/investors/corporate-governance

2-13 Delegation of responsibility for

managing impacts

Corporate Governance Statement, page 88

2-14 Role of the highest governance

body in sustainability reporting

About this report, page 2

Declaration by the persons responsible, page339

2-15 Conﬂicts of interest Corporate Governance Statement: Functioning of the Board of Directors,

page100

Corporate Governance Statement: Introduction, page 91

Charter of Corporate Governance

https://www.solvay.com/en/investors/corporate-governance

2-16 Communication of critical

concerns

Corporate Governance Statement: Functioning of the Board of Directors,

page100

2-17 Collective knowledge of the

highest governance body

Corporate Governance Statement: Induction and continuous Board training,

page101

2-18 Evaluation of the performance

of the highest governance body

Corporate Governance Statement: Evaluation, page 101

2-19 Remuneration policies Corporate Governance Statement: Remuneration report, page 107

2-20 Process to determine remune-

ration

Corporate Governance Statement: Remuneration report, page 107

2-21 Annual total compensation ratio Corporate Governance Statement: Remuneration report, page 107

STRATEGY, POLICIES AND PRACTICES

Disclosure Location Omission

2-22 Statement on sustainable deve-

lopment strategy

Presidents message, page 4

2-23 Policy commitments Extra-financial statements: 3.2. Management of the legal, ethics and regulatory

framework, page 159

Extra-financial statements: 6.7. Hazardous materials, page 199

2-24 Embedding policy commit-

ments

Extra-financial statements: 6.8. Critical incident risk management, page 202

Extra-financial statements: 3.1 Solvay One Planet Guide, page 158

2-25 Processes to remediate nega-

tive impacts

Extra-financial Statements: 6.1. Health, safety and environment management,

page 183

2-26 Mechanisms for seeking advice

and raising concerns

Extra-financial statements: 3.2. Management of the legal, ethics and regulatory

framework, page 159

2-27 Compliance with laws and

regulations

Extra-financial statements: 3.2. Management of the legal, ethics and regulatory

framework, page 159

Extra-financial statements: 6.8. Critical incident risk management, page 202

2-28 Membership associations Extra-financial statements: 2.7. Membership of associations, page 156

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STAKEHOLDER ENGAGEMENT

Disclosure Location Omission

2-29 Approach to stakeholder

engagement

Reinventing: Presidents message, page 156

2-30 Collective bargaining

agreements

Extra-financial statements: 6.2. Employee engagement and well-being, page 187

7.3. GRI 3: material topics 2021

Disclosure Location Omission

3-1 Process to determine material

topics

Extra-financial statements: 2.2. Materiality Analysis, page 146

3-2 List of material topics Extra-financial statements: 2.2. Materiality Analysis, page 146

MANAGEMENT OF THE LEGAL, ETHICS AND REGULATORY FRAMEWORK (HIGH MATERIALITY)

Source Disclosure Location Omission

GRI 3: Material Topics

2021

3-3 Management of material

topics

Extra-financial statements: 3.2. Management of the legal, ethics

and regulatory framework, page 159

GRI 205: Anti-corrup-

tion 2016

205-1 Operations assessed

for risks related to corruption

Risk management: Compliance and Business Integrity, page 130

GRI 205: Anti-corrup-

tion 2016

205-2 Communication and

training about anti-corrup-

tion policies and procedures

Extra-financial statements: 3.2. Management of the legal, ethics

and regulatory framework, page 159

GRI 205: Anti-corrup-

tion 2016

205-3 Confirmed incidents

of corruption and actions

taken

Risk management: Litigation, page 138

Extra-financial statements: 3.2. Management of the legal, ethics

and regulatory framework, page 159

GRI 206: Anti-competi-

tive behavior 2016

206-1 Legal actions for

anti-competitive behavior,

antitrust, and monopoly

practices

Risk management: Litigation, page 138

GRI 406: Non-discrimi-

nation 2016

406-1 Incidents of discrimi-

nation and corrective actions

taken

Extra-financial statements: 3.2. Management of the legal, ethics

and regulatory framework, page 159

GRI 412: Human rights

assessment 2016

412-1 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 159

GRI 412: Human rights

assessment 2016

412-2 Employee training

on human rights policies or

procedures

Extra-financial statements: 3.2. Management of the legal, ethics

and regulatory framework, page 159

GRI 415: Public policy

2016

415-1 Political contributions Extra-financial statements: 3.2. Management of the legal, ethics

and regulatory framework, page 159

GRI 419: Socioecono-

mic Compliance 2016

419-1 Non-compliance with

laws and regulations in the

social and economic area

Risk management: Litigation, page 138

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207

GREENHOUSE GAS EMISSIONS (PRIORITY)

Source Disclosure Location Omission

GRI 3: Material Topics

2021

3-3 Management of material

topics

Extra-financial statements: 4.1. Greenhouse gas emissions, page

169

GRI 305: Emissions

2016

305-1 Direct (scope 1) GHG

emissions

Extra-financial statements: 4.1. Greenhouse gas emissions, page

169

GRI 305: Emissions

2016

305-2 Energy indirect (scope

2) GHG emissions

Extra-financial statements: 4.1. Greenhouse gas emissions, page

169

GRI 305: Emissions

2016

305-3 Other indirect (scope

3) GHG emissions

Extra-financial statements: 4.1. Greenhouse gas emissions, page

169

GRI 305: Emissions

2016

305-4 GHG emissions in-

tensity

Extra-financial statements: 4.1. Greenhouse gas emissions, page

169

GRI 305: Emissions

2016

305-5 Reduction of GHG

emissions

Extra-financial statements: 4.1. Greenhouse gas emissions, page

169

ENERGY (PRIORITY)

Source Disclosure Location Omission

GRI 3: Material Topics

2021

3-3 Management of material

topics

Extra-financial statements: 4.2. Energy, page 172

GRI 302: Energy 2016 302-1 Energy consumption

within the organization

Extra-financial statements: 4.2. Energy, page 172

GRI 302: Energy 2016 302-2 Energy consumption

outside of the organization

Extra-financial statements: 4.2. Energy, page 172

GRI 302: Energy 2016 302-3 Energy intensity Extra-financial statements: 4.2. Energy, page 172

GRI 302: Energy 2016 302-4 Reduction of energy

consumption

Extra-financial statements: 4.2. Energy, page 172

BIODIVERSITY (PRIORITY)

Source Disclosure Location Omission

GRI 3: Material Topics

2021

3-3 Management of material

topics

Extra-financial statements: 4.3. Biodiversity, page 173

GRI 304: Biodiversity

2016

304-1 Operational sites

owned, leased, managed

in, or adjacent to, protected

areas and areas of high

biodiversity value outside

protected areas

Extra-financial statements: 4.3. Biodiversity, page 173

GRI 304: Biodiversity

2016

304-2 Significant impacts

of activities, products and

services on biodiversity

Extra-financial statements: 4.3. Biodiversity, page 173

GRI 304: Biodiversity

2016

304-3 Habitats protected or

restored

Extra-financial statements: 4.3. Biodiversity, page 173

GRI 304: Biodiversity

2016

304-4 IUCN Red List species

and national conservation

list species with habitats in

areas affected by operations

Extra-financial statements: 4.3. Biodiversity, page 173

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208

PRODUCT DESIGN & LIFECYCLE MANAGEMENT (PRIORITY)

Source Disclosure Location Omission

GRI 3: Material Topics

2021

3-3 Management of material

topics

Extra-financial statements: 5.1. Product design and lifecycle

management, page 175

GRI 416: Customer

health and safety 2016

416-1 Assessment of the

health and safety impacts

of product and service

categories

Extra-financial statements: 5.1. Product design and life cycle

management, page 175

Extra-financial statements: 5.5. Waste, page 182

Extra-financial statements: 6.7. Hazardous materials, page 199

GRI 416: Customer

health and safety 2016

416-2 Incidents of non-

compliance concerning the

health and safety impacts of

products and services

Risk management: Environmental impacts and controversies,

page 129

Solvay Products based on a circular

sourcing

Extra-financial statements: 5.2. Circular Economy, page 178

AIR QUALITY (HIGH MATERIALITY)

Source Disclosure Location Omission

GRI 3: Material Topics

2021

3-3 Management of material

topics

Extra-financial statements: 5.3. Air quality, page 179

GRI 305: Emissions

2016

Disclosure 305-6 Emissions

of ozone-depleting

substances (ODS)

Extra-financial statements: 5.3. Air quality, page 179

GRI 305: Emissions

2016

305-7 Nitrogen oxides

(NOx), sulfur oxides (SOx)

and other significant air

emissions

Extra-financial statements: 5.3. Air quality, page179 Requirement omitted:

Hazardous air pollutants,

Particulate matter

Reason: Information

unavailable / incomplete

Explanation: sites report

data according to national

requirements; this does

not allow consolidation.

There is no internationally

recognized reference list.

We are working on a global

list to report on and expect

to be able to report in 2023

WATER AND WASTEWATER (PRIORITY)

Source Disclosure Location Omission

GRI 3: Material Topics

2021

3-3 Management of material

topics

Extra-financial statements: 5.4. Water and wastewater, page 180

GRI 303: Water and

efﬂuents 2018

303-1 Interactions with water

as a shared resource

Extra-financial statements: 5.4. Water and wastewater, page 180

GRI 303: Water and

efﬂuents 2018

303-2 Management of water

discharge-related impacts

Extra-financial statements: 5.4. Water and wastewater, page 180

GRI 303: Water and

efﬂuents 2018

303-3 Water withdrawal Extra-financial statements: 5.4. Water and wastewater , page 180

GRI 303: Water and

efﬂuents 2018

303-4 Water discharge Extra-financial statements: 5.4. Water and wastewater, page 180

GRI 303: Water and

efﬂuents 2018

303-5 Water consumption Extra-financial statements: 5.4. Water and wastewater, page 180

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209

WASTE (PRIORITY)

Source Disclosure Location Omission

GRI 3: Material Topics

2021

3-3 Management of material

topics

Extra-financial statements: 5.4. Waste, page 182

GRI 306: Waste 2020 306-1 Waste generation and

significant waste-related

impacts

Extra-financial statements: 5.5. Waste, page 182

GRI 306: Waste 2020 306-2 Management of signi-

ficant waste-related impacts

Extra-financial statements: 5.5. Waste, page182

GRI 306: Waste 2020 306-3 Waste generated Extra-financial statements: 5.5. Waste, page 182

GRI 306: Waste 2020 306-4 Waste diverted from

disposal

Extra-financial statements: 5.5. Waste, page 182

GRI 306: Waste 2020 306-5 Waste directed to

disposal

Extra-financial statements: 5.5. Waste, page 182

EMPLOYEE HEALTH AND SAFETY (PRIORITY)

Source Disclosure Location Omission

GRI 3: Material Topics

2021

3-3 Management of material

topics

Extra-financial statements: 6.1. Employee health and safety, page

183

GRI 403: Occupational

health and safety 2018

403-1 Occupational health

and safety management

system

Extra-financial statements: 6.1. Employee health and safety, page

183

GRI 403: Occupational

health and safety 2018

403-2 Hazard identification,

risk assessment and incident

investigation

Extra-financial statements: 6.1. Employee health and safety, page

183

GRI 403: Occupational

health and safety 2018

403-3 Occupational health

services

Extra-financial statements: 6.1. Employee health and safety, page

183

GRI 403: Occupational

health and safety 2018

403-4 Worker participation,

consultation and

communication on

occupational health and

safety

Extra-financial statements: 6.1. Employee health and safety, page

183

Extra-financial statements: 6.2. Employee engagement and well-

being, page 187

GRI 403: Occupational

health and safety 2018

403-5 Worker training on

occupational health and

safety

Extra-financial statements: 6.1. Employee health and safety, page

183

GRI 403: Occupational

health and safety 2018

403-6 Promotion of worker

health

Extra-financial statements: 6.1. Employee health and safety, page

183

GRI 403: Occupational

health and safety 2018

403-7 Prevention and

mitigation of occupational

health and safety impacts

directly linked by business

relationships

Extra-financial statements: 6.1. Employee health and safety, page

183

GRI 403: Occupational

health and safety 2018

403-8 Workers covered by

an occupational health and

safety management system

Extra-financial statements: 6.1. Employee health and safety, page

183

GRI 403: Occupational

health and safety 2018

403-9 Work-related injuries Extra-financial statements: 6.1. Employee health and safety, page

183

GRI 403: Occupational

health and safety 2018

403-10 Work-related ill

health

Extra-financial statements: 6.1. Employee health and safety, page

183

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210

EMPLOYEE ENGAGEMENT AND WELL-BEING (HIGH MATERIALITY)

Source Disclosure Location Omission

GRI 3: Material Topics

2021

3-3 Management of material

topics

Extra-financial statements: 6.2. Employee engagement and well-

being, page 187

GRI 401: Employment

2016

401-2 Benefits provided to

full-time employees that are

not provided to temporary

or part-time employees

Extra-financial statements: 6.2. Employee engagement and well-

being, page 187

Extra-financial statements: 6.4. Recruitment, development and

retention, page 187

GRI 402: Labor/

Management Relations

2016

402-1 Minimum notice

periods regarding

operational changes

 Not applicable:

the minimum notice

periods are based

on local legislations

and local collective

agreements.

GRI 407: Freedom

of association and

collective bargaining

2016

407-1 Operations and

suppliers in which the right

to freedom of association

and collective bargaining

may be at risk

Extra-financial statements: 6.2. Employee engagement and well-

being, page 187

DIVERSITY AND INCLUSION (PRIORITY)

Source Disclosure Location Omission

GRI 3: Material Topics

2021

3-3 Management of material

topics

Extra-financial statements: 6.3. Diversity and inclusion, page 189

GRI 405: Diversity and

equal opportunity 2016

405-1 Diversity of gover-

nance bodies and em-

ployees

Extra-financial statements: 6.3. Diversity and inclusion, page 189

GRI 405: Diversity and

equal opportunity 2016

405-2 Ratio of basic salary

and remuneration of women

to men

Extra-financial statements: 6.3. Diversity and inclusion, page 189

CUSTOMER WELFARE (HIGH MATERIALITY)

Source Disclosure Location Omission

GRI 3: Material Topics

2021

3-3 Management of material

topics

Extra-financial statements: 6.5. Customer welfare, page 195

Net Promoter System Net Promoter Score Extra-financial statements: 6.5. Customer welfare, page 195

CORPORATE CITIZENSHIP (HIGH MATERIALITY)

Source Disclosure Location Omission

GRI 3: Material Topics

2021

3-3 Management of material

topics

Extra-financial statements: 6.6. Corporate citizenship, page 197

GRI 413: Local commu-

nities 2016

413-1 Operations with local

community engagement,

impact assessments and

development programs

Extra-financial statements: 6.6. Corporate citizenship, page 197

GRI 413: Local commu-

nities 2016

413-2 Operations with signi-

ficant actual and potential

negative impacts on local

communities

Risk management: Environmental impacts and controversies,

page 129

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211

HAZARDOUS MATERIALS (HIGH MATERIALITY)

Source Disclosure Location Omission

GRI 3: Material Topics

2021

3-3 Management of material

topics

Extra-financial statements: 6.7. Hazardous materials, page 199

GRI 403: Occupational

health and safety 2018

403-7 Prevention and mi-

tigation of occupational

health and safety impacts

directly linked by business

relationships

Extra-financial statements: 6.7. Hazardous materials, page 199

Extra-financial statements: 6.1. Employee health and safety, page

183

Solvay Safer alternatives for marke-

ted products

Extra-financial statements: 6.7. Hazardous materials, page 199

CRITICAL INCIDENT RISK MANAGEMENT (HIGH MATERIALITY)

Source Disclosure Location Omission

GRI 3: Material Topics

2021

3-3 Management of material

topics

Extra-financial statements: 6.8. Critical incident risk

management, page 202

GRI 307: Environmental

Compliance 2016

307-1 Non-compliance with

environmental laws and

regulations

Extra-financial statements: 6.8. Critical incident risk

management, page 202

7.4. Moderate materiality aspects also included in this report

RECRUITMENT, DEVELOPMENT AND RETENTION (MODERATE MATERIALITY)

Source Disclosure Location Omission

GRI 3: Material Topics

2021

3-3 Management of material

topics

Extra-financial statements: 6.4. Recruitment, development and

retention, page 192

GRI 401: Employment

2016

401-1 New employee hires

and employee turnover

Extra-financial statements: 6.4. Recruitment, development and

retention, page 192

GRI 401: Employment

2016

401-2 Benefits provided to

full-time employees that are

not provided to temporary

or part- time employees

Extra-financial statements: 6.4. Recruitment, development and

retention, page 192

GRI 404: Training and

education 2016

404-1 Average hours

of training per year per

employee

Extra-financial statements: 6.4. Recruitment, development and

retention, page 192

GRI 404: Training and

education 2016

404-2 Programs for

upgrading employee skills

and transition assistance

programs

Extra-financial statements: 6.4. Recruitment, development and

retention, page 192

GRI 404: Training and

education 2016

404-3 Percentage of

employees receiving regular

performance and career

development reviews

Extra-financial statements: 6.4. Recruitment, development and

retention, page 192

SOLVAY 2021 ANNUAL INTEGRATED REPORT

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212

SUPPLY CHAIN AND PROCUREMENT (MODERATE MATERIALITY)

Source Disclosure Location Omission

GRI 3: Material Topics

2021

3-3 Management of material

topics

Extra-financial statements: 3.5. Supply chain and procurement,

page 167

GRI 308: Supplier Envi-

ronmental Assessment

2016

308-1 New suppliers that

were screened using envi-

ronmental criteria

Extra-financial statements: 3.5. Supply chain and procurement,

page 167

GRI 308: Supplier Envi-

ronmental Assessment

2016

308-2 Negative environmen-

tal impacts in the supply

chain and actions taken

Extra-financial statements: 3.5. Supply chain and procurement,

page 167

GRI 407: Freedom of

Association and Collec-

tive Bargaining 2016

407-1 Operations and sup-

pliers in which the right to

freedom of association and

collective bargaining may

be at risk

Extra-financial statements: 3.5. Supply chain and procurement,

page 167

GRI 414: Supplier social

assessment 2016

414-1 New suppliers that

were screened using social

criteria

Extra-financial statements: 3.5. Supply chain and procurement,

page 167

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

213

FINANCIAL

STATEMENTS

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

213

Financial

Statements

214 Consolidated financial

statements

214 Main events and changes in the

consolidation scope

215 Consolidated income statement

216 Consolidated statement of

comprehensive income

217 Consolidated statement of cash flows

218 Consolidated cash flows from

discontinued operations

219 Consolidated statement of financial

position

220 Consolidated statement of changes in

equity

222 Notes to the consolidated

financial statements

222 IFRS general accounting policies

226 Critical accounting judgments and key

sources of estimation uncertainty

227 Non-IFRS (underlying) metrics

227 Notes to the consolidated income

statement

245 Notes to the consolidated statement of

comprehensive income

247 Notes to the consolidated statement of

cash flows (continuing and discontinued

operations)

249 Notes to the consolidated statement of

financial position

308 Miscellaneous notes

319 Summary financial

statements of Solvay SA

320 Balance sheet of Solvay SA (summary)

321 Income statement of Solvay SA

(summary)

321 Profit available for distribution

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

214

Financial statements

1. CONSOLIDATED FINANCIAL STATEMENTS

Solvay (the “Company”) is a public limited liability company governed by Belgian law and quoted on Euronext Brussels and Euronext Paris. The

principal activities of the Company, its subsidiaries, joint operations, jointventures and associates (jointly the“Group”) are described in noteF1 on

revenue and segment information.

On February22, 2022, the Board of Directors authorized the consolidated financial statements for issuance. They have been prepared in accordance

with IFRSaccounting policies as endorsed by the European Union, as disclosed hereafter.

MAIN EVENTS AND CHANGES IN THE CONSOLIDATION SCOPE

On January 18, 2021, Solvay sent a Call Option Notice to the European Bank for Reconstruction and Development (EBRD) to purchase the EBRD

shares in the Solvay holding of the Rusvinyl Joint Venture. The option price of € 52 million for the call option held by Solvay was equal to the option

price for the put option held by the EBRD, which was booked as an Other current liability at the end of 2020. The option price was paid in Q1, 2021,

thus settling the liability for the same amount.

In 2021, additional voluntary contributions of € 102 million and € 134 million were made to the Belgian and UK pension plans respectively. In 2020,

additional voluntary contributions of approximately € 380 million, € 80 million and € 95 million were made to the French, US and German pension

plans respectively.

In January 2021, Solvay launched a new chapter of its strategic transformation aimed to further align its structure to its G.R.O.W. strategy. This builds

on previous plans announced in 2020, and represents a profound simplification of all support functions to serve the business more effectively. The

plan will lead to an additional net reduction of approximately 500 roles by the end of 2022 and annual cost savings of € 75 million. As a consequence

of the new restructuring plan, a restructuring provision of around € 150 million was recognized in Q1 2021.

On November 29, 2021, Solvay closed its tender offer of the buyback operation related to its € 750 million senior bonds at 1.65% due in 2022

(ISIN:BE6282459609) accepting for purchase in cash all the validly tendered bonds in an aggregate principal amount of € 373 million. See note F33

Net Indebtedness for additional information.

Portfolio management

During 2021, the assets and liabilities related to the following businesses previously classified as “held for sale” were divested:

· the Peroxides sodium chlorate business line and related assets in Povoa (Portugal),

· the various ﬂuorine chemicals assets in Onsan, South Korea, part of Special Chem,

· the Peroxides sodium percarbonate business line and related assets in Bad Hönningen (Germany),

· the Barium Strontium business and the joint venture with Chemical Products Corporation (CPC),

· the Process Materials business (part of Composite Materials),

· the Novecare amphoterics surfactants activities, and

· the Novecare surfactants and anti-oxidants business in Rasal (India).

These divestments lead to a decrease in sales of € 220 million in 2021 compared to 2020. There was no material capital gain/loss on these divestments.

On January 31, 2020, Solvay announced it had formally completed the divestment of its Performance Polyamides activities to BASF and DOMO

Chemicals. The transaction is based on an enterprise value of € 1.6 billion and the selling proceeds net of costs of disposals on the combined

transaction were € 1.3billion (selling proceeds of € 1.5 billion received on January 31, 2020). The capital gain after taxes was € 140 million after the

agreement on the final purchase price with DOMO Chemicals, finalized in Q4 2020 and the final agreement with BASF reached in 2021 without

significant changes, but not yet settled.

On November 5, 2020, Solvay and Composites One LLC, entered into an exclusive negotiation period for the acquisition of Solvay’s Process Materials

(PM) business by Composites One. This business line had sales of approximately € 80 million in 2020 and operated 6 production sites in the US,

France, Italy and the United Kingdom. The transaction was completed in Q1 2021.

On November 23, 2020, Solvay reached an agreement with Latour Capital to sell its technical-grade barium and strontium business in Germany, Spain

and Mexico as well as its sodium percarbonate business in Germany. Solvay’s barium and strontium business includes a joint venture with Chemical

Products Corporation (CPC), which is part of the transaction. The transaction was completed in Q1 2021.

On December 22, 2020, Solvay signed an agreement to sell its North American and European amphoteric surfactant business to OpenGate Capital,

a private equity firm with headquarters in Los Angeles, California (USA). The sale includes three production sites supporting the amphoteric product

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

215

lines located in University Park, Illinois (USA), Genthin (Germany), Halifax (United Kingdom), and a tolling business in Turkey. The agreement also

includes tolling and service agreements between Solvay and OpenGate to ensure a seamless transition and minimal customer disruption. The Group

closed the sale in Q2 2021.

On July 1 2021, Solvay announced the closing of the acquisition, from Bayer, of a seed coating business, with facilities in Méréville, France, and tolling

operations in the U.S. and Brazil. This is a natural extension to Solvay’s own AgRHO® family of sustainable seed boosting solutions (part of Novecare)

and supports the drive toward more bio-based, sustainable technologies.

COVID-19 impact

The total net impact of COVID-19 on the full year 2021 EBITDA was not considered to be material to the Group (€ (434) million EBITDA impact in 2020)

as the short-term mitigation actions related to labor costs (including furloughs) and indirect spend were substantially completed at December 31,

2020. COVID-19 triggered some impacts and actions in 2020 that have been described in Note F24 Impairment. The Group will continue to monitor

any future evolution of the sanitary crisis.

CONSOLIDATED INCOME STATEMENT

In € million

Notes 2021 2020

Sales (F1) 11,434 9,714

of which revenue from non-core activities (F3) 1,330 749

of which net sales  10,105 8,965

Cost of goods sold  -8,508 -7,207

Gross margin  2,926 2,507

Commercial costs  -287 -312

Administrative costs  -946 -900

Research and development costs  -325 -300

Other operating gains and (losses) (F4) -80 -149

Earnings from associates and joint ventures (F23) 158 58

Results from portfolio management and major restructuring (F5) -133 -1,549

Results from legacy remediation and major litigations (F5) -123 -20

EBIT  1,190 -665

Cost of borrowings (F6) -107 -114

Interest on loans and short term deposits (F6) 9 8

Other gains and (losses) on net indebtedness (F6) -4 -8

Cost of discounting provisions (F6) 1 -68

Result from equity instruments measured at fair value  6 3

Profit/(loss) for the year before taxes  1,094 -844

Income taxes (F7) -110 -248

Profit/(loss) for the year from continuing operations  985 -1,092

Profit for the year from discontinued operations (F8) 5 163

Profit/(loss) for the year  989 -929

attributable to:

  

- Solvay share  948 -962

- non-controlling interests  41 33

Basic earnings per share from continuing operations (€)  9.11 -10.90

Basic earnings per share from discontinued operations (€)  0.04 1.58

Basic earnings per share (€) (F9) 9.15 -9.32

Diluted earnings per share from continuing operations (€)  9.09 -10.90

Diluted earnings per share from discontinued operations (€)  0.04 1.58

Diluted earnings per share (€) (F9) 9.13 -9.32

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

In € million

Notes 2021 2020

Profit/(loss) for the year  989 -929

Other comprehensive income

  

Gains and losses on hedging instruments in a cash ﬂow hedge (F10) -16 44

Currency translation differences - Subsidiaries and joint operations (F10) 487 -605

Share of other comprehensive income of associates and joint ventures (F10) 30 -99

Recyclable components  500 -660

Gains and losses on equity instruments measured at fair value through other comprehensive

income

(F10) 33 2

Remeasurements of the net defined benefit liability (F10) 562 -174

Share of other comprehensive income of associates and joint ventures (F10) 0 -1

Non-recyclable components  594 -174

Income tax relating to recyclable and non-recyclable components (F10) -78 -3

Other comprehensive income/(loss), net of related tax effects (F10) 1,017 -837

Comprehensive income/(loss) for the year  2,006 -1,766

attributable to:

  

- Solvay share  1,956 -1,793

- non-controlling interests  50 27

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CONSOLIDATED STATEMENT OF CASH FLOWS

The amounts below include both continuing and discontinued operations.

In € million

Notes 2021 2020

Profit/(loss) for the year  989 -929

Adjustments to profit / (loss) for the year

  

- Depreciation, amortization and impairments (F11) 849 2,416

- Earnings from associates and joint ventures (F23) -158 -58

- Other non-operating and non-cash items (F12) -113 -294

- Additions and reversals of provisions (F15) 464 186

- Net financial charges  94 182

- Income tax expense/income (F13) 110 444

Changes in working capital (F14) -92 249

Use of provisions (F15) -303 -331

Use of provisions for additional voluntary contributions (pension plans) (F15) -236 -552

Dividends received from associates and joint ventures (F23) 129 25

Income taxes paid (excluding income taxes paid on sale of investments) (F13) -233 -97

Cash ﬂow from operating activities  1,499 1,242

of which cash ﬂow related to internal portfolio management and excluded from Free Cash Flow  -7 0

Acquisition (-) of subsidiaries (F16) -22 -12

Acquisition (-) of investments - Other (F16) -22 -46

Loans to associates and non-consolidated companies  4 -6

Sale (+) of subsidiaries and investments (F16) 169 1,297

Acquisition (-) of property, plant and equipment (F16) -561 -454

of which capital expenditures required by share sale agreement and excluded from Free Cash Flow  0 -14

Acquisition (-) of intangible assets (F16) -75 -81

Sale (+) of property, plant and equipment and intangible assets (F16) 30 8

of which cash ﬂow related to the sale of real estate in the context of restructuring/dismantling/

remediation

 15 0

Dividends from equity instruments measured at fair value through other comprehensive income  5 4

Changes in non-current financial assets  2 2

Cash ﬂow from investing activities  -470 711

Proceeds from perpetual hybrid bonds issuance (F28) 0 493

Redemption of perpetual hybrid bonds (F28) 0 -499

Acquisition (-) / sale (+) of treasury shares (F30) 42 -19

Increase in borrowings (F33) 248 557

Repayment of borrowings (F33) -614 -1,368

Changes in other financial assets (F33) -130 -5

Payment of lease liabilities (F33) -99 -108

Net interests paid  -95 -103

Coupons paid on perpetual hybrid bonds (F28) -75 -119

Dividends paid  -431 -419

Other (F17) 50 -101

Cash ﬂow from financing activities  -1,104 -1,692

of which increase/decrease of borrowings related to environmental remediation  0 6

Net change in cash and cash equivalents  -76 261

Currency translation differences  7 -61

Opening cash balance  1,009 809

Closing cash balance (F33) 941 1,009

of which cash in assets held for sale  0 7

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CONSOLIDATED CASH FLOWS FROM DISCONTINUED OPERATIONS

In € million 2021 2020

Cash ﬂow from operating activities  -12 10

Cash ﬂow from investing activities  0 -34

Cash ﬂow from financing activities  0 6

Net change in cash and cash equivalents  -12 -17

See Note F18 Cash ﬂow from Discontinued Operations

SOLVAY 2021 ANNUAL INTEGRATED REPORT

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION

In € million

Notes December 31, 2021 December 31, 2020

Assets

  

Intangible assets (F19) 2,103 2,141

Goodwill (F20, F24) 3,379 3,265

Property, plant and equipment (F21) 4,943 4,717

Right-of-use assets (F22) 466 405

Equity instruments measured at fair value (F32) 114 66

Investments in associates and joint ventures (F23) 637 495

Other investments  42 42

Deferred tax assets (F7) 779 788

Loans and other assets (F32) 724 390

Other financial instruments (F33) 30 0

Non-current assets  13,216 12,308

Inventories (F25) 1,745 1,241

Trade receivables (F32) 1,805 1,264

Income tax receivables  109 109

Other financial instruments (F33) 229 119

Other receivables (F26) 2,004 519

Cash and cash equivalents (F33) 941 1,002

Assets held for sale (F27) 0 229

Current assets  6,833 4,484

Total assets  20,049 16,792

Equity & liabilities

  

Share capital (F28) 1,588 1,588

Share premiums  1,170 1,170

Other reserves  5,982 4,439

Non-controlling interests (F29) 112 106

Total equity  8,851 7,304

Provisions for employee benefits (F31) 1,574 2,209

Other provisions (F31) 724 689

Deferred tax liabilities (F7) 462 487

Financial debt (F33) 2,576 3,233

Other liabilities  331 95

Non-current liabilities  5,666 6,713

Other provisions (F31) 302 190

Financial debt (F33) 773 287

Trade payables (F32) 2,131 1,197

Income tax payables  115 113

Dividends payables  160 159

Other liabilities (F34) 2,051 720

Liabilities associated with assets held for sale (F27) 0 110

Current liabilities  5,531 2,775

Total equity and liabilities  20,049 16,792

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Equity attributable to equity holders of the parent Equity attributable to equity holders of the parent

Revaluation reserve (fair value)

In € million

Notes Share

capital

premiums

Treasury

Perpetual

hybrid

bonds

Retained

earnings

Currency

translation

differences

Equity instruments measured

at fair value through other

comprehensive income

Cash ﬂow

hedges

Defined

benefit

pension

plan

Total other

reserves

Non-

controlling

interests

Total

equity

December 31, 2019  1,588 1,170 -274 1,789 6,462 -454 10 -21 -756 6,757 111 9,625

Profit/(loss) for the year      -962     -962 33 -929

Items of other comprehensive income (F10)      -699 1 35 -169 -831 -6 -837

Comprehensive income      -962 -699 1 35 -169 -1,793 27 -1,766

Proceed from perpetual hybrid bonds (F28)    494      494  494

Redemption of perpetual hybrid bonds (F28)    -497 -3     -501  -501

Cost of stock options      7     7 0 7

Dividends      -387     -387 -31 -417

Coupons of perpetual hybrid bonds      -119     -119  -119

Acquisition (-) / sale (+) of treasury shares    -12  -7     -19  -19

Other      -6    5 -1 0 -1

December 31, 2020  1,588 1,170 -286 1,786 4,985 -1,153 12 14 -919 4,439 106 7,304

Profit for the year      948     948 41 989

Items of other comprehensive income (F10)      508 25 -11 486 1,008 9 1,017

Comprehensive income      948 508 25 -11 486 1,956 50 2,006

Cost of stock options      8     8  8

Dividends      -389     -389 -43 -432

Coupons of perpetual hybrid bonds      -75     -75  -75

Acquisition (-) / sale (+) of treasury shares    54  -12     42  42

Other      2 0 -14 0 12 1 -2 -1

December 31, 2021  1,588 1,170 -232 1,786 5,467 -645 23 3 -421 5,982 112 8,851

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Equity attributable to equity holders of the parent Equity attributable to equity holders of the parent

Revaluation reserve (fair value)

In € million

Notes Share

capital

premiums

Treasury

Perpetual

hybrid

bonds

Retained

earnings

Currency

translation

differences

Equity instruments measured

at fair value through other

comprehensive income

Cash ﬂow

hedges

Defined

benefit

pension

plan

Total other

reserves

Non-

controlling

interests

Total

equity

December 31, 2019  1,588 1,170 -274 1,789 6,462 -454 10 -21 -756 6,757 111 9,625

Profit/(loss) for the year      -962     -962 33 -929

Items of other comprehensive income (F10)      -699 1 35 -169 -831 -6 -837

Comprehensive income      -962 -699 1 35 -169 -1,793 27 -1,766

Proceed from perpetual hybrid bonds (F28)    494      494  494

Redemption of perpetual hybrid bonds (F28)    -497 -3     -501  -501

Cost of stock options      7     7 0 7

Dividends      -387     -387 -31 -417

Coupons of perpetual hybrid bonds      -119     -119  -119

Acquisition (-) / sale (+) of treasury shares    -12  -7     -19  -19

Other      -6    5 -1 0 -1

December 31, 2020  1,588 1,170 -286 1,786 4,985 -1,153 12 14 -919 4,439 106 7,304

Profit for the year      948     948 41 989

Items of other comprehensive income (F10)      508 25 -11 486 1,008 9 1,017

Comprehensive income      948 508 25 -11 486 1,956 50 2,006

Cost of stock options      8     8  8

Dividends      -389     -389 -43 -432

Coupons of perpetual hybrid bonds      -75     -75  -75

Acquisition (-) / sale (+) of treasury shares    54  -12     42  42

Other      2 0 -14 0 12 1 -2 -1

December 31, 2021  1,588 1,170 -232 1,786 5,467 -645 23 3 -421 5,982 112 8,851

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2. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

IFRS GENERAL ACCOUNTING POLICIES

1. Basis 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, 2021 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, 2021 are consistent with those used

to prepare the consolidated financial statements for the year ended December31, 2020. 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 2021

In August 2020, the IASB issued Interest Rate Benchmark Reform- Phase 2 (IBOR Reform) which amends IFRS 9 Financial Instruments, IAS 39 Financial

Instruments: Recognition & Measurement, IFRS 7 Financial Instruments: Disclosure, IFRS 4 Insurance Contracts, and IFRS 16 Leases which is effective

for periods commencing on or after January 1, 2021 and has been endorsed by the EU. The amendments enable entities to reﬂect the effects

of transitioning from benchmark interest rates, such as interbank offer rates (IBORs) to alternative benchmark interest rates without giving rise to

accounting impacts that would not provide useful information to users of financial statements.

During 2021, Solvay identified the main areas where the reform could have an impact and going forward will continue to monitor the market evolution

resulting from the decisions taken by each of the relevant authorities of such benchmarks. The identification covers all financial instruments where

a benchmark is referenced including loan and lease contracts for the purpose of calculating interest applicable to such financial instruments. As

displayed in note F32.D, Financial Risk Management, the majority of the underlying debts are at fixed rates, which indicates the impact of IBOR

Reform under the current understanding did not have more than an insignificant impact on the Group’s consolidated financial statements.

In March 2021, the IASB issued an amendment to IFRS 16 Leases COVID-19 Related Rent Concessions beyond June 30, 2021, which was endorsed by

the EU in August 2021 and was effective for annual periods starting on or after April 1, 2021. The amendment did not have more than an insignificant

impact on the Group’s consolidated financial statements.

In April 2021, the IFRS Interpretations Committee (IFRS IC) issued a final agenda decision on IAS 19 Employee Benefits, which included updates

regarding the periods of service to which an entity attributes benefit for a particular defined benefit plan. The application of this agenda decision

resulted in a decrease to the defined benefit obligation of € 8 million with the impact recorded in other comprehensive income. The Group is still

assessing the impact of this agenda decision in the various local entities and these impacts will only be determined in future accounting periods when

a globally consistent and locally supported methodology is reached.

In April 2021, the IFRS IC issued its second final agenda decision on IAS 38 Intangible Assets, which clarifies how a customer should account for the

costs of configuring or customizing the supplier’s application software in a Software as a Service (SaaS) arrangement that is determined to be a service

contract. The application of the agenda decision did not have more than an insignificant impact on the Group’s consolidated financial statements.

In addition to the standards, interpretations and amendments mentioned above, no other standards, interpretations, or amendments applicable for

the first time in 2021 had more than an insignificant impact on the Group’s consolidated financial statements.

Standards, interpretations andamendments applicable for the first time in 2022

Standards, interpretations, or amendments applicable for the first time in 2022 are not expected to have more than an insignificant impact on the

Group’s consolidated financial statements.

Standards, interpretations andamendments applicable for the first time after 2022

Standards, interpretations and amendments applicable for the first time after 2022 are not expected to have a more than insignificant impact on the

Group’s consolidated financial statements.

2. 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.

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 and

assumptions are material with respect to the consolidated financial statements are presented in the sectionCritical accounting judgments and key

sources of estimation uncertainty.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

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3. Principles of consolidation

3.1. Consolidation scope

3.1.1. General

The 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.

3.1.2. 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 of

subsidiaries 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 at

fair 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 of

subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests

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 is

recognized 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 value

of 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 the

subsidiary 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 lost is

considered to be the fair value on initial recognition for subsequent accounting in accordance with IFRS 9 Financial Instruments or, when applicable,

the cost on initial recognition of an investment in an associate or joint venture in accordance with IAS28 Investments in Associates and Joint Ventures.

3.1.3. 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 share of the joint operations’ assets, liabilities, revenue and expenses, based on its ownership interest in the joint operations.

3.1.4. 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 over those policies.

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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 the

unanimous 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 method

of 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 the

Group’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 part

of 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 is assessed

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 interest

in the relevant associate or joint venture.

4. 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 recognized at

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 not translated at the closing

rate.

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 other

comprehensive 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).

The main exchange rates used are:

Year-end rate Average rate

1 Euro = December 31, 2021 December 31, 2020 2021 2020

Brazilian Real BRL 6.3089 6.3731 6.3778 5.8950

Yuan Renminbi CNY 7.2188 8.0240 7.6275 7.8749

Pound Sterling GBP 0.8401 0.8981 0.8596 0.8896

Indian Rupee INR 84.1963 89.6502 87.4271 84.6303

Japanese Yen JPY 130.4077 126.4617 129.8783 121.8240

Korean Won KRW 1,346.4377 1,332.8358 1,353.6608 1,345.7603

Mexican Peso MXN 23.1537 24.4329 23.9889 24.5300

Russian Ruble RUB 85.3452 91.4630 87.1511 82.7249

US Dollar USD 1.13265 1.2270 1.1827 1.1420

5. Government grants

Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attaching to them and that

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.

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Other government grants are recognized as income on a systematic basis over the periods in which the related costs, which they are intended to

compensate, are recognized. Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose

of 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.

6. Climate Change

In preparing the consolidated financial statements, management has considered the impacts of climate change, particularly in the context of the

disclosures 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%, an annual pace aligned with the Paris Agreement objectives, and to phase-out the

use of coal for energy where renewable alternatives exist.

In October 2021, the Group also published its ambitions to become carbon neutral by 2040 for all businesses except Soda Ash, which is targeted to

be carbon neutral by 2050.

Solvay plans to invest up to € 1 billion to reach carbon neutrality by 2040 for all its businesses other than Soda Ash with an additional investment of

approximately € 1 billion identified for Soda Ash to pave its path towards full carbon neutrality for the Group before 2050. These investments will be

partially supported by non-recourse financing and government subsidies, enabling Solvay to also continue to invest in its growth initiatives. Further

studies on technology innovation will determine the future investment needs beyond 2040.

For a number of years now, the Group has adopted an internal carbon price and it has imputed that as an input cost into all investment decisions,

irrespective of prevailing market prices. The internal cost was originally set at € 25 per metric ton in 2015, was doubled to € 50 in 2019 and was raised

to € 100 per metric ton of CO

in 2021. This approach ensures that all investments contribute positively to the 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 climate

change commitments. These are extensively developed in the Sustainability Report. As an example of the Group’s commitment to phase out of coal

in Soda Ash business, two projects were initiated comprising:

· The construction of two waste-wood boilers accounted for as finance leases in Rheinberg, Germany;

· An equity investment at the Dombasle site of which Solvay has a 10% share. The project is valued at approximately € 225 million and is financed

largely through non-recourse debt executed in February 2022 and government subsidies. Included in the investment are two refuse derived fuel

boilers.

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.

For 2021, no material revisions were needed and there is no indication that any material amounts of existing assets would be impaired as a result of

the investment plans in other fuel types in the future.

The Group is also actively working on sourcing its energy needs from more environmentally friendly resources including long-term renewable energy

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.

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 used to:

· estimate future cash ﬂows used in impairment assessments of the carrying value of non-current assets (such as intangible assets and goodwill) (see

Note F24 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), provisions, etc.;

· estimate the long-term accounting assumptions, including CO

emission rights and energy prices for the energy intensive Soda Ash GBU.

The Group’s CO

emission rights and energy prices (gas/electricity/coal) are an important element of the cost structure, especially for the Soda Ash

business. 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 capex required by the energy transition of the business after the

hedged period. Considering the significant headroom on the Soda Ash CGU, no sensitivity is provided. See Note F24 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.

Refer also to note B2: Underlying raw material & energy costs in the Business Review section and Note F2 Consolidated Income Statement by Nature

for further insights on the main cost drivers of the business.

In summary, the Group’s climate change considerations mentioned above did not have a material impact on the financial reporting judgments and

estimates during the year. Further, the Group concludes that the climate change risk does not impact the going concern assessment for December

2021.

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226

CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF

ESTIMATION UNCERTAINTY

1. Critical accounting judgments

No critical accounting judgements have been identified for the year ended December 31, 2021.

2. 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 indicators that 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F20 Goodwill and Business Combinations and F24 Impairment.

Income taxes

Deferred tax assets

The carrying amount of the deferred tax assets is reviewed at each reporting date. The carrying amount of a deferred tax asset is reduced to the

extent that it is no longer probable that the Group will earn sufficient taxable profits against which the deductions can be utilized. Any such reduction

is reversed to the extent that it becomes probable that sufficient taxable profits will be available.

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’s deferred tax positions, is involved in assessing deferred tax assets.

Further details are provided in Note F7.C. Deferred taxes in the consolidated statement of financial position.

Provisions

Restructuring provision for the Group’s simplification and transformation program

In 2021, Solvay launched a new chapter of its strategic transformation aimed to further align its structure to its G.R.O.W. strategy. This builds on

previous plans announced in 2020, and represents a profound simplification of all support functions to serve the business more effectively. As a

consequence of the new restructuring plan, a restructuring provision of around € 150 million was recognized in Q1 2021.

The estimate of the provision is based on the number and the cost of redundancy and relocation packages that the Group expects to pay. It is

inherently subject to uncertainty and is monitored by the Human Resources department, in close cooperation with the Finance department.

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F31

Provisions. 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 check the reasonableness of the

results and ensure consistency in reporting.

Further details are provided in noteF31.A. Provisions for 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 whether there will be any obligation after the lapse of this period.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

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227

The forecasts of expenses are discounted to their present value. The discount rates fixed by geographical area correspond to the average risk-free

rate on 10-year government bonds or the inﬂation rate if higher. These rates are set annually by the Finance Department and can be revised based on

the evolution of economic parameters of the country involved. To reﬂect the passage of time, the provisions are increased each year at the discount

rates described above.

Further details are provided in noteF31.B. Provisions other than for employee benefits.

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, when

appropriate, of external counsels at least every quarter together with the Finance and Insurance Departments. This review includes an assessment of

the need to recognize provisions, disclose contingent liabilities and/or contingent assets.

Further details are provided in noteF31.B. Provisions other than for employee benefits and F36 Contingent assets, liabilities and financial guarantees.

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 described

in note F22 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 the IFRS accounts, the Group also presents underlying income statement performance indicators. The objective is to generate a

measure that avoids distortion and facilitates the appreciation of performance and comparability of results over time.

See Glossary for definitions of adjustments (IFRS vs Underlying metrics) and Business Review for more information and reconciliation with IFRS figures.

NOTES TO THE CONSOLIDATED INCOME STATEMENT

Preliminary comment: consistent with the presentation in the consolidated income statement, the notes to the consolidated income statement as

presented 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.

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 for

transferring 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.

As the Group is in the business of selling chemicals, contracts with customers generally concern the sale of goods. As a result, revenue

recognition generally occurs at a point 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 can

benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e. The good or

service is capable of being distinct); and (b) the Group’s promise to transfer the good or service to the customer is separately identifiable from

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 the corresponding

goods are sold to the customer.

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Variable consideration: some contracts with customers provide trade discounts or volume rebates. Trade discounts and volume rebates give

rise 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

a promised 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 many

cases a formality that would not affect the Group’s determination of when the customer has obtained control of the goods. Revenue from

services 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 Group

delivers a product to distributors for sale to end customers, the Group evaluates whether that distributor has obtained control of the product

at 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.

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.

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 is

available. Solvay’s chief operating decision maker is the Chief Executive Officer.

General

Solvay is organized into four Operating Segments:

· Materials offer a unique portfolio of high-performance polymers and composite technologies used primarily in sustainable mobility applications.

Its solutions enable weight reduction and enhance performance while improving CO

and energy efficiency. Major markets served include next-

generation mobility in automotive and aerospace, healthcare and electronics.

· 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. Its Silica, Coatis and Rusvinyl businesses are also high quality

assets with strong positions in their markets. This segment provides resilient cash ﬂows and the company selectively invests in these businesses to

become the #1 cash conversion chemical player.

· Solutions offer a unique formulation & application expertise through customized specialty formulations for surface chemistry & liquid behavior,

maximizing yield and efficiency of the processes they are used in while minimizing the eco-impact. Novecare, Technology Solutions, Aroma, Special

Chem and Oil & Gas focus on specific areas such as resources (improving the extraction yield of metals, minerals and oil), industrial applications

(such as coatings) or consumer goods and healthcare (including vanillin and guar for home and personal care).

· Corporate & Business Services includes corporate and other business services, such as Group research & innovation or energy services, whose

mission is to optimize energy consumption and reduce CO

emissions.

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229

External net sales by cluster

The Oil & Gas GBU was created on July 1, 2021, regrouping activities that were previously included in Novecare and Technology Solutions. The

following table presents restated figures for these GBUs since the beginning of 2020.

In € million

2021 2020

Materials 2,903 2,695

Specialty Polymers 2,173 1,820

Composite Materials 730 875

Chemicals 3,357 2,948

Soda Ash & Derivatives 1,509 1,450

Peroxides 636 642

Silica 467 386

Coatis 745 470

Solutions 3,838 3,316

Novecare 1,547 1,330

Special Chem 840 761

Technology Solutions 560 491

Aroma Performance 473 435

Oil and Gas 418 299

Corporate & Business Services 7 6

CBS and NBD 7 6

Total 10,105 8,965

Sales by market

Sales by market are presented in the Business Review, see note B1.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

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230

Net sales by country and region

The sales disclosed below are allocated based on the customers’ location.

In € million

2021 % 2020 %

Belgium 170 2% 146 2%

Germany 737 7% 647 7%

Italy 431 4% 403 4%

France 363 4% 337 4%

Netherlands 88 1% 87 1%

Spain 144 1% 148 2%

European Union - Other 491 5% 488 5%

European Union 2,423 24% 2,256 25%

Europe - Other 352 3% 330 4%

United States 2,496 25% 2,355 26%

Canada 134 1% 127 1%

North America 2,630 26% 2,482 28%

Brazil 813 8% 596 7%

Mexico 215 2% 186 2%

Latin America - Other 280 3% 194 2%

Latin America 1,308 13% 975 11%

Australia 90 1% 98 1%

China 1,203 12% 975 11%

Hong Kong 42 0% 37 0%

India 240 2% 191 2%

Indonesia 115 1% 87 1%

Japan 340 3% 310 3%

Russia 66 1% 55 1%

Saudi Arabia 128 1% 116 1%

South Korea 301 3% 273 3%

Thailand 175 2% 155 2%

Turkey 74 1% 74 1%

Other 617 6% 551 6%

Asia and rest of the world 3,391 34% 2,922 33%

Total 10,105 100% 8,965 100%

Sales from the UK were reclassified to Europe – Other due to the UK’s withdrawal from the European Union. 2020 amounts were reclassified to

conform to the 2021 presentation.

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231

Information per segment

2021 - In € million

Materials Chemicals Solutions Corporate

& Business

Services

Group

Total

Income statement items     

Net sales (including inter-segment sales) 2,912 3,395 3,844 7 10,157

- Inter-segment sales -9 -38 -6 -53

Net sales 2,903 3,357 3,838 7 10,105

Revenue from non-core activities 19 433 30 848 1,330

Gross margin 1,102 838 986 0 2,926

Depreciation and amortization 313 174 266 95 848

Earnings from associates and joint ventures 8 141 7 2 158

Underlying EBITDA

(1)

879 1,009 701 -232 2,356

EBIT 568 864 439 -680 1,190

Net financial charges     -96

Income taxes     -110

Profit for the year from discontinued operations     5

Profit/(loss) for the year     989

December 31, 2021 - In € million Materials Chemicals Solutions Corporate

& Business

Services

Group

Total

Statement of financial position and other items

    

Capital expenditures 250 212 172 101 736

Investments 1 1 32 11 44

Working capital

    

Inventories 684 425 607 28 1,745

Trade receivables 382 563 577 283 1,805

Trade payables 379 676 515 560 2,131

(1) Underlying EBITDA is a key performance indicator followed by management and includes other elements than those presented above (see Business Review section for

reconciliation of Underlying with IFRS figures).

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

232

2020 - In € million

Materials Chemicals Solutions Corporate

& Business

Services

Group

Total

Income statement items     

Net sales (including inter-segment sales) 2,702 2,982 3,318 6 9,009

- Inter-segment sales -7 -34 -3 -44

Net sales 2,695 2,948 3,316 6 8,965

Revenue from non-core activities 19 218 42 470 749

Gross margin 913 741 832 21 2,507

Depreciation and amortization 1,126 277 895 119 2,416

Earnings from associates and joint ventures 0 44 13 1 58

Underlying EBITDA

(1)

712 816 566 -149 1,945

EBIT -465 504 -366 -338 -665

Net financial charges     -179

Income taxes     -248

Profit for the year from discontinued operations     163

Profit/(loss) for the year     -929

    

December 31, 2020 - In € million

Materials Chemicals Solutions Corporate

& Business

Services

Group

Total

Statement of financial position and other items     

Capital expenditures (continuing operations) 191 183 142 95 611

Capital expenditures (discontinued operations)  33   33

Investments (continuing operations) 38 8 9 3 58

Working capital     

Inventories 483 303 432 23 1,241

Trade receivables 282 438 421 123 1,264

Trade payables 219 401 356 221 1,197

(1) Underlying EBITDA is a key performance indicator followed by management and includes other elements than those presented above (see Business Review section for

reconciliation of Underlying with IFRS figures).

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NON-CURRENT ASSETS, CAPITAL EXPENDITURES AND INVESTMENTS BY COUNTRY AND REGION

(CONTINUING OPERATIONS)

In € million

Non-current assets Capital expenditures and investments

December 31, 2021 % December 31, 2020 % 2021 % 2020 %

Belgium 272 2% 272 2% -22 3% -7 1%

Germany 400 3% 321 3% -44 6% -39 6%

Italy 626 5% 616 6% -111 14% -79 12%

France 2,764 24% 2,755 25% -178 23% -146 22%

Spain 134 1% 140 1% -16 2% -14 2%

European Union - Other 319 3% 335 3% -39 5% -26 4%

European Union 4,516 39% 4,439 40% -409 52% -310 46%

Europe - Other 159 1% 161 1% -17 2% -20 3%

United States 5,047 43% 4,752 43% -201 26% -233 35%

Canada 177 2% 170 2% -7 1% -9 1%

North America 5,225 45% 4,922 44% -208 27% -242 36%

Brazil 218 2% 204 2% -27 3% -17 3%

Latin America - Other 19 0% 29 0% -5 1% -3 0%

Latin America 238 2% 234 2% -32 4% -20 3%

Russia 293 3% 197 2% 0 0% 0 0%

Thailand 99 1% 114 1% -5 1% -3 0%

China 598 5% 527 5% -90 12% -49 7%

South Korea 77 1% 84 1% -4 1% -3 1%

India 240 2% 234 2% -5 1% -13 2%

Singapore 36 0% 40 0% -3 0% -3 0%

Japan 18 0% 20 0% -3 0% -2 0%

Other 185 2% 160 1% -3 0% -4 1%

Asia and rest of the

world

1,547 13% 1,376 12% -113 15% -77 11%

Total 11,684 100% 11,131 100% -779 100% -669 100%

Non-current assets, CapEx and investments in the UK were reclassified to Europe – Other due to the UK’s withdrawal from the European Union. 2020

amounts were reclassified to conform to the 2021 presentation.

Non-current assets are those other than deferred tax assets, loans and other assets, and other financial instruments. Capital expenditures and

investments include acquisitions of property, plant and equipment, right-of-use assets, intangible assets and investments in subsidiaries and other

investments (joint operations, joint ventures and associates). Both exclude discontinued operations.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

234

NOTEF2

CONSOLIDATED INCOME STATEMENT BY NATURE

In € million

Notes 2021 2020

Net sales (F1) 10,105 8,965

Revenue from non-core activities (F3) 1,330 749

Raw materials, utilities and consumables used  -5,910 -4,050

Changes in inventories  424 -103

Personnel expenses  -2,002 -1,999

Wages and direct social benefits  -1,469 -1,466

Employer's contribution for social insurance  -286 -262

Pensions and insurance benefits  -98 -95

Other personnel expenses  -148 -175

Amortization, depreciation and impairment (F11) -849 -2,416

Other variable logistics expenses  -776 -634

Other fixed expenses  -1,017 -1,061

Addition and reversal of provisions (excluding employee benefit provisions) (F31) -323 -148

Significant income related to prior years (F4) 97 

M&A costs and gains and losses on disposals (F5) -47 -25

Earnings from associates and joint ventures (F23) 158 58

EBIT  1,190 -665

M&A costs and gains and losses on disposals excludes a portion of PIS/COFINs.

NOTEF3

REVENUE FROM NON-CORE ACTIVITIES

This revenue primarily comprises commodity and utility third party transactions and other revenue, considered to not correspond to Solvay’s know-

how and core business. The increase compared to 2020 is mainly related to higher gas and electricity prices and to increased volumes after the

rebound in the activity of our customers.

NOTEF4

OTHER OPERATING GAINS AND LOSSES

In € million

2021 2020

Start-up and preliminary study costs -11 -13

Capital gains/losses on sales of property, plant and equipment and intangible assets 12 3

Net foreign exchange gains and losses 1 -1

Amortization of intangible assets resulting from PPA -147 -166

PIS/COFINs credits recognition 61 

Other 5 28

Other operating gains and losses -80 -149

A Supreme Court ruling in Brazil issued in August 2021 conferred the right to recover Federal indirect tax on sales, so-called “PIS/COFINs”, to a

number of companies, including Solvay. As a result of that ruling, a total gain of € 97 million related to operations from 2003 to the present date was

quantified and assessed as recoverable before tax of € (26) million. Of that, € 36 million were recognized under “Results from portfolio management

and major restructuring” mainly as the relevant period pre-dated the Groups’ acquisition of Rhodia in August 2011 (see note F5 Results from Portfolio

Management and Major Restructurings, Legacy Remediation and Major Litigations – included in line “M&A costs and gains and losses on disposals”).

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

235

The remaining € 61 million were recorded as "Other operating gains & losses" as the period related to operations subsequent to August 2011 and

still in Solvay’s perimeter. The € 97 million gain is expected to be recovered mainly through the offset of income tax payments over the next 3 years.

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 external 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

2021 2020

Restructuring costs and impairment -122 -1,523

Impairment 58 -1,401

Restructuring costs -181 -122

M&A costs and gains and losses on disposals -11 -25

Results from portfolio management and major restructuring -133 -1,548

RESULTS FROM LEGACY REMEDIATION AND MAJOR LITIGATIONS

In € million 2021 2020

Major litigations -26 -20

Remediation costs and other costs related to non-ongoing activities -97

Results from legacy remediation and major litigations -123 -20

In 2021, restructuring costs relate mainly to the new simplification program of the support functions for € 157 million. The impairments include the

impairment reversal of the joint venture RusVinyl for € 66 million (see note F24) and impairment losses of other non-performing assets for € (8) million.

In 2021, the M&A costs and gains and losses on disposals include a € 36 million gain related to PIS/COFINs (see note F4). The remediation costs

increased versus last year due to higher inﬂation assumptions and investigation costs. 2020 benefited from one-time settlement indemnities partially

compensating the remediation costs.

In 2020, impairments primarily relate to Composite Materials (€ (798) million), Technology Solution (€ (280) million), Novecare Oil & Gas (€ (155) million)

and other assets, mainly in the Solutions Segment (€ (168) million). Restructuring costs mainly related to the initiatives following the launching of the

G.R.O.W strategy for € (122) million.

See note F24 Impairment for more information.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

236

NOTEF6

NET FINANCIAL CHARGES

Accounting policy

Interest on borrowings is recognized in costs of borrowings as incurred, with the exception of borrowing costs directly attributable to the

acquisition, construction and production of qualifying assets (see note F21 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 instruments

that are hedging instruments in a cash ﬂow hedge relationship, and which are recognized on the same line as the hedged item, when the latter

affects profit or loss.

In € million 2021 2020

Cost of borrowings -89 -93

Interest expense on lease liabilities -19 -21

Interest on loans and short term deposits 9 8

Other gains and losses on net indebtedness -4 -8

Net cost of borrowings -103 -113

Cost of discounting provisions -47 -64

Impact of change of discount rate on provisions 48 -5

Result from equity instruments measured at fair value 6 3

Net financial charges -96 -179

Details are included in noteF33 Net indebtedness.

The net cost of borrowings variance is mainly explained by the decrease:

· in the cost of borrowings attributable to the continuing efforts of repayment of debt, including the early repayment of €372.5 million on the € 750

million senior bond in December 2021;

· in other gains and losses on net indebtedness from € (8) million for 2020 to € (4) million for 2021, largely attributable to currency swaps (interest

element) offset by one-off costs for €(6) million related to the early repayment of € 372.5 million on the € 750 million senior bond in December 2021.

The cost of discounting provisions relates to post-employment benefits (€ (12) million) and to environmental provisions (€ (34) million) and its decrease

is largely attributable to the evolution of the applicable discount rates (see also note F31 Provisions).

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

237

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 are

recognized 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 probable

that the temporary difference will not reverse in the foreseeable future.

The carrying amount of the deferred tax assets is reviewed at each reporting date. The carrying amount of a deferred tax asset is reduced to

the extent that it is no longer probable that the Group will earn sufficient taxable profits against which the deductions can be utilized. Any such

reduction is reversed to the extent that it becomes probable that sufficient taxable profits will be available.

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.B.

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 Group

intends to settle its current tax assets and liabilities on a net basis.

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 that are

recognized outside profit or loss (whether in other comprehensive income or directly in equity), in which case the tax is also recognized outside

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 of

dividends recognized on or after the beginning of the earliest comparative period, i.e. January 1, 2018. In 2018, the income tax consequences

of 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.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

238

F7.A. Income taxes

The income taxes (net expense) recognized in the consolidated income statement decreased by € 138 million in 2021 compared to 2020. The income

taxes (net expense) recognized in other comprehensive income increased by € (74) million in 2021 compared to 2020, mainly due to the movement in

employee benefit provisions (see note F31A).

In € million

2021 2020

Current taxes related to current year -236 -114

Provisions for tax litigations -1 1

Other current taxes related to prior years -3

Current taxes -237 -116

Changes in unrecognized deferred tax assets (a) 127 -27

Deferred tax income on amortization of PPA step-ups 37 44

Deferred tax impact of changes in the nominal tax rates -2 -5

Deferred taxes related to prior years 3 -10

Changes in deferred tax assets O&G US (b) 15 -110

Deferred taxes on impairments (c) 45

Other deferred taxes (d) -52 -68

Deferred taxes 127 -132

Income taxes recognized in the consolidated income statement -110 -248

Income taxes on items recognized in other comprehensive income -77 -3

The current taxes (net expense) related to the current year increased by € (121) million due to higher taxable profits in countries with high effective

tax rates.

(a) Changes in unrecognized deferred tax assets:

In 2021, this change amounts to € 127 million resulting mainly from a revision of the forecasts of utilization of tax losses carried forward in the holding

companies (€ 76 million), in China (€ 9 million), Belgium (€ 7 million) and from changes in deferred taxes (mainly on tangible assets) in the United States

(€ 19 million).

In 2020, this change amounted to € (27) million resulting mainly from the reversal of deferred taxes in the United Kingdom (€ (23) million) (mainly on

capital allowances deemed not to be utilized within the next five years).

(b) The deferred tax assets on the goodwill and other tangible and intangible assets for Oil & Gas in the United States were written-down in the US

tax unit in 2020 for € (110) million based on Management’s assessment of the recoverability of these deferred tax assets. In 2021, this write-down

has been partially reversed for € 15 million based on a reassessment of recoverability of these deferred tax assets.

(c) In 2020, a deferred tax asset was recognized on the impairment excluding non-deductible goodwill related to Composite Materials, Technology

Solutions, Oil & Gas (O&G) and other assets in the Solutions Segment (Spec Chem) for a total amount of € (1,400) million of which € (1,050) million

was on non-deductible goodwill).

(d) Other deferred taxes:

In 2021, the other deferred income taxes (€ (52) million) included:

· The utilization of tax losses carried forward for € (29) million;

· The net tax impact of additional pension contributions in Belgium (€ (15) million);

· The utilization of deferred tax assets on temporary disallowed interests in the United States for € (10) million;

· The recognition of deferred taxes related to the Brazilian PIS/COFINs credits temporarily not taxable for € (16) million;

· Other net increases and reversals of other temporary differences for € 18 million.

In 2020, the other deferred income taxes (€ (68) million) included:

· The net impact of additional pension contributions (€ (60) million);

· The recognition of deferred tax assets on temporary disallowed interests in the United States for € 37 million;

· The outside basis differences for overseas investments held by the United States which would be realizable upon disposal with a tax effect for € (58)

million;

· Other net increases and reversals of other temporary differences for € 12 million.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

239

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.

In € million 2021 2020

Profit/(Loss) for the year before taxes

1,094 -844

Earnings from associates and joint ventures 158 58

Profit/(Loss) for the year before taxes excluding earnings from associates and joint ventures 936 -902

Reconciliation of the tax income/(expense)

 

Total tax income/(expense) of the Group entities computed on the basis of the respective local

nominal rates

-284 143

Weighted average nominal rate 30% 16%

Tax effect of changes in nominal tax rates -2 -5

Changes in unrecognized deferred tax assets 127 -27

Tax effect of permanent differences 37 28

Gain and losses with no tax expense and income 10 -9

US taxes disconnected from profit for the year before taxes -9 0

Non-deductible impairment of the goodwill -248

Changes in deferred tax assets O&G US 15 -110

Provisions for tax litigations -1 1

Other tax effect of current and deferred tax adjustments related to prior years 3 -13

Tax effect on distribution of dividends -6 -5

Effective tax income/(expense) -110 -248

Effective tax rate 10% -29%

The weighted average nominal rate increased from 2020 (16%) to 2021 (30%) mainly due to higher results in countries with higher nominal tax rates

(e.g. Brazil) and from the impact of withholding taxes on dividends mainly from Rusvinyl.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

240

F7.C. Deferred taxes in the consolidated statement of financial position

2021 - In € million

Opening

balance

Recognized

in income

statement

Recognized

in other

comprehensive

income

Exchange

rate effect

Other

acquisition

/ disposal

Transfer to

assets held

for sale

Closing

balance

Temporary differences

Employee benefits obligations 403 -12 -104 2 -5 5 289

Provisions other than employee

benefits

204 -4  6 -1 2 208

Property, plant and equipment -262 27 32 -19 2 -5 -225

Intangible assets -311 65  -24 -4 -274

Right-of-use assets -74 4  -3 1 -2 -74

Lease liabilities 76 -4  3 -1 1 75

Goodwill 3     3

Other temporary differences 26 -4 -4 2 20

Tax losses 209 50  5 -3 3 263

Tax credits 27 5  1   33

Total (net amount) 301 127 -77 -27 -10 3 318

2020 - In € million

Opening

balance

Recognized

in income

statement

Recognized

in other

comprehensive

income

Exchange

rate effect

Other

acquisition

/ disposal

Transfer to

assets held

for sale

Closing

balance

Temporary differences

Employee benefits obligations 563 -153 3 -14 9 -5 403

Provisions other than employee

benefits

243 -11  -21 -5 -2 204

Property, plant and equipment -229 -67  24 5 5 -262

Intangible assets -432 85  30 5 -311

Right-of-use assets & Lease liabilities -1 2  1 2

Goodwill 91 -87     3

Other temporary differences 55 5 -6 -5 -24 26

Tax losses 214 100  -9 -93 -3 209

Tax credits 34 -5  -2   27

Total (net amount) 538 -132 -3 2 -103 -3 301

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

241

The significant components of the deferred tax assets and deferred tax liabilities at the end of 2021 and 2020 are as follows:

In € million

2021

Deferred tax

assets

Deferred tax

liabilities

Net deferred taxes

before impairment

Impairment Net deferred

taxes

Employee benefits obligations 413 -123 290 -1 289

Provisions other than employee benefits 244 -38 206 1 208

Property, plant and equipment 118 -314 -195 -30 -225

Intangible assets 107 -385 -277 3 -274

Right-of-use assets 0 -74 -74 -74

Lease liabilities 77 -1 75 75

Goodwill 3 3 3

Other 105 -78 27 -7 20

Temporary differences 1,068 -1,012 56 -34 22

Operational losses 1,566 1,566 -1,398 169

Non-operational losses 331 331 -237 95

Tax losses 1,898 1,898 -1,635 263

Tax credits carried forward 78 78 -45 33

Netting deferred taxes -551 551

Deferred taxes 2,492 -461 2,031 -1,713 318

In € million 2020

Deferred tax

assets

Deferred tax

liabilities

Net deferred taxes

before impairment

Impairment Net deferred

taxes

Employee benefits obligations 491 -9 482 -79 403

Provisions other than employee benefits 249 -21 228 -24 204

Property, plant and equipment 73 -300 -228 -34 -262

Intangible assets 93 -402 -309 -2 -311

Right-of-use assets & Lease liabilities 75 -73 2 2

Goodwill 3 3 3

Other 89 -51 38 -13 26

Temporary differences 1,073 -856 217 -151 66

Operational losses 1,567 1,567 -1,429 138

Non-operational losses 335 335 -264 71

Tax losses 1,902 1,902 -1,694 209

Tax credits carried forward 73 73 -46 27

Netting deferred taxes -620 620

Deferred taxes 2,428 -236 2,192 -1,891 301

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

242

The total net deferred tax assets of € 318 million at year-end 2021 are € 17 million higher than in 2020. The main changes in 2021 are related to the

following items:

· deferred tax assets on employee benefit obligations: € 289 million at year-end 2021 - € 114 million lower than in 2020, explained by the significant

decrease in pension obligations in 2021 notably in the United Kingdom where the deferred tax liability on plan asset surplus have been recognized,

offset by the reversal of the write-down on deferred taxes on capital allowances in the United Kingdom for € 32 million;

· deferred tax liabilities on Property, plant and equipment: € (225) million at year-end 2021 - € 37 million lower than in 2020 mainly due to the reversal

of the write-down on deferred taxes on capital allowances in the United Kingdom for € 32 million;

· deferred tax liabilities on intangible assets: € (274) million at year-end 2021 - € 37 million lower than in 2020. The decrease in these liabilities in 2021

mainly reﬂects:

- exchange rate impacts of € (24) million;

- the tax impact of € 37 million of amortization in the consolidated income statement of the step-up of intangible assets resulting from Pur-

chase Price Allocation;

- the partial reversal of the write-off of the deferred taxes on tangible and intangible assets for Oil & Gas in the United States for € 15 million,

corresponding to the portion of the deferred taxes that are considered to be utilized in 2022 without any changes in the deferred taxes

impairment hypothesis for future years.

· deferred taxes on operational and non-operational tax losses: € 263 million at year-end 2021 - € 55 million higher than in 2020 mainly due to the (key)

changes in unrecognized deferred tax assets on losses due to revised forecasts for € 92 million offset against the newly created or utilized deferred

tax on tax losses for € (37) million.

· deferred tax assets on other temporary differences: € 20 million at year-end 2021 - € 6 million lower than in 2020 mainly due to the utilization of

deferred tax assets on temporary disallowed interests in the United States for € (10) million and due to the recognition of deferred taxes related to

the Brazilian PIS/COFINs credits for € (16) million.

At year-end 2021, € (53) million for deferred tax liabilities on unremitted earnings were recognized in the Other Temporary differences. An amount of

€ 29 million was not recognized because the Group controls the timing of the reversal of the temporary differences and it is probable that they will

not reverse in the foreseeable future.

Recognized deferred tax assets 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

€ 268 million. 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 located

in countries where they can be carried forward indefinitely.

The tax losses carried forward generating deferred tax assets are given below by expiration date.

In € million 2021 2020

Within 1 year 15

Within 2 years 16

Within 3 years 2 20

Within 4 years 2 2

Within 5 or more years 28 44

No time limit 974 767

Total of losses carried forward which have generated recognized deferred tax assets 1,037 833

Tax losses carried forward for which no deferred tax assets were recognized 6,050 6,448

Total of tax losses carried forward 7,087 7,281

The tax losses carried forward of €1,037million (€ 833 million in 2020) have generated deferred tax assets for €263million (€ 209 million in 2020).

The increase of tax losses carried forward which have generated deferred tax assets, is largely due to the revised forecast for the holding companies

in China and Belgium.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

243

NOTEF8

DISCONTINUED OPERATIONS

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 (see note F27

Assets 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 re-presented for prior periods presented.

In € million 2021 2020

Other Total Polyamides Other Total

Net sales 126 126

EBIT 2 2 359 3 362

Financial result 2 2 0 -3 -3

Tax -196 -196

Profit from discontinued operations 5 5 162 163

attributable to Solvay share 5 5 162 163

In 2021 and 2020, the “Other” column includes post-closing warranties related to the disposal of the Pharma business.

In 2020, the Profit from discontinued operations for Polyamides includes the capital gain on disposal after tax of € 140 million and the results of the

Polyamides business for the month of January 2020 (€ 21 million). The capital gain after taxes reﬂects the final agreement with DOMO, which took

place in Q4 2020. The final agreement with BASF has been reached in 2021 without significant adjustments.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

244

NOTEF9

EARNINGS 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 the

reporting 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 issuance of

share options.

The number of dilutive potential ordinary shares is calculated for the weighted average number of share options outstanding during the

reporting period as the difference between the average market price of ordinary shares during the reporting period and the exercise price of

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.

Number of shares (in units)

2021 2020

Weighted average number of ordinary shares (basic)  103,527,423  103,139,855

Dilution effect  260,419  30,187

Weighted average number of ordinary shares (diluted)  103,787,842  103,170,042

2021 2020

Basic Diluted Basic Diluted

Profit/(loss) for the year (Solvay share) including discontinued operations

(in € thousands)

947,738 947,738 -961,627 -961,627

Profit/(loss) for the year (Solvay share) excluding discontinued operations

(in € thousands)

943,177 943,177 -1,124,336 -1,124,336

Earnings per share (including discontinued operations) (in €) 9.15 9.13 -9.32 -9.32

Earnings per share (excluding discontinued operations) (in €) 9.11 9.09 -10.90 -10.90

Full data per share, including dividend per share, can be found in the Business Review section.

The average market price during 2021 was €106.01 per share (2020: €79.29 per share). 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F30 Share-based payments):

Antidilutive share options per plans

Date

granted

Exercise

price (in €)

Number of share

options granted

Number of share

options outstanding

2015 February 25, 2015 114.51 346,617 332,565

2017 February 23, 2017 111.27 316,935 308,450

2018 - 1 February 27, 2018 113.11 400,704 391,280

2018 - 2 July 30, 2018 108.38 72,078 72,078

Total   1,136,334 1,104,373

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

245

NOTES TO THE CONSOLIDATED STATEMENT OFCOMPREHENSIVE INCOME

NOTEF10

CONSOLIDATED 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-controlling

interests.



2021



In € million

Before-tax

amount

Tax expense

(-)/income

Net of tax

amount

Effective portion of gains and losses on hedging instruments in a cash ﬂow hedge 71 5 76

Recycling to the income statement -87  -87

Gains and losses on hedging instruments in a cash ﬂow hedge (see note F32) -17 5 -11

Currency translation differences arising during the year 432  432

Recycling of currency translations differences relating to foreign operations disposed

ofin the year

47  47

Other movement of currency translation differences (NCI) relating to foreign operations 8  8

Currency translation differences - Subsidiaries and joint operations 487  487

Share of other comprehensive income of associates and joint ventures 29  29

Recyclable components 500 5 505

Gains and losses on equity instruments measured at fair value through other compre-

hensive income

33 -8 25

Remeasurements of the net defined benefit liability (see notes F7 & F31) 562 -75 487

Non-recyclable components 594 -83 512

Other comprehensive income/(loss) 1,094 -78 1,017

The € 33 million gain on equity instruments measured at fair value through other comprehensive income mainly relates to a Solvay Ventures investment

that was listed in Q4 of 2021.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

246

2020

In € million

Before-tax

amount

Tax expense

(-)/income

Net of tax

amount

Effective portion of gains and losses on hedging instruments in a cash ﬂow hedge -24 -9 -33

Recycling to the income statement 68  68

Gains and losses on hedging instruments in a cash ﬂow hedge (see note F32) 44 -9 35

Currency translation differences arising during the year -579  -579

Recycling of currency translations differences relating to foreign operations disposed of

in the year

-21  -21

Other movement of currency translation differences (NCI) relating to foreign operations -5  -5

Currency translation differences - Subsidiaries and joint operations -605  -605

Share of other comprehensive income of associates and joint ventures -99  -99

Recyclable components -661 -9 -670

Gains and losses on equity instruments measured at fair value through other

comprehensive income

2 2

Remeasurements of the net defined benefit liability (see note F31) -174 7 -167

Share of comprehensive income of associates and joint ventures -1  -1

Non-recyclable components -174 7 -167

Other comprehensive income/(loss) -834 -3 -837

The low tax credit (€ 7 million) on remeasurement of the net defined liabilities in 2020 was due to the non-recognition of deferred taxes on

the remeasurement in the UK.

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 the

period 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 “currency

translation 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, or a partial disposal involving loss of control over a subsidiary that includes

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 non-controlling interests are derecognized,

but they are not reclassified to profit or loss;

· a partial disposal of an interest in a joint arrangement or an associate that includes a foreign operation, when the retained interest is a

financial asset. In this case, all of the accumulated exchange differences in respect of that operation attributable to the Group are reclassified

to profit or loss;

· a partial disposal of an interest in a joint venture or an associate that includes a foreign operation and that continues to be accounted for as

a joint venture or an associate. In this case, a proportionate share of the accumulated exchange differences is reclassified to profit or loss.

In case of a partial disposal of a subsidiary (i.e. No loss of control) that includes a foreign operation, the proportionate share of accumulated

exchange differences is reattributed to non-controlling interests and is not recognized in profit or loss.

In case of (a) a capital decrease of a subsidiary without loss of control, or (b) a capital decrease of an equity method investee or a joint operation

without modification of the share of equity interest held in that investee, then no accumulated exchange differences are reclassified from

equity to profit or loss.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation

and translated into the Group’s presentation currency at the closing rate.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

247

The total currency translation gain amounts to €508 million in 2021, and only relates to the Group’s share (2020: loss of €(699)million). They are linked

to the revaluation of the US dollar (€ 331 million) (2020: € (449) million), Chinese Renminbi (€ 83 million) (2020: € (21) million), the Brazilian Real (€ 11

million) (2020: € (99) million), the Russian ruble (€ 21 million) (2020: € (59) million), compared to the Euro.

NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS

(CONTINUING AND DISCONTINUED OPERATIONS)

NOTEF11

DEPRECIATION, AMORTIZATION ANDIMPAIRMENTS

In 2021 total depreciation, amortization and impairment losses (reversal) amount to € 849 million (€ 2,416 million in 2020), of which:

Straight-line depreciation and amortization of €906million (€ 1,016 million in 2020) for continuing operations recorded in:

· Cost of goods sold €564million (€ 649 million in 2020),

· Administrative costs €82 million (€ 97 million in 2020),

· Research and development costs €100million (€ 89 million in 2020),

· Other €160million (€ 181 million in 2020), including €147million (€ 166 million in 2020) for PPA amortization (see noteF4 Other operating gains

and losses);

In 2021, the impairments include the impairment reversal of the joint venture RusVinyl for € 66 million (see note F24 Impairment) and impairment

losses of other non-performing assets for € (8) million.

In 2020, net impairment loss of €1,400million on Composite Materials, Technology Solutions and Novecare Oil & Gas business (€ 1,232 million) and

on other small groups of assets, mainly in the Solutions Segment (€ 168 million); see note F24 Impairment.

NOTEF12

OTHER NON OPERATING ANDNON CASHITEMS

The other non-operating and non-cash items for 2021 of € (113) million relate mainly to non-cash capital gains and other results for M&A deals. In

2020, € (294) million mainly related to the Polyamide capital gain before taxes.

NOTEF13

INCOME TAXES IN THE STATEMENT OF CASH FLOWS

Income tax expense in 2021 amounts to € 110 million (€ 444 million in 2020), of which € 110 million (€ 248 million in 2020) was from continuing

operations.

Income tax paid in 2021 amounts to € 233 million (€ 97 million in 2020), of which € 227 million (€ 96 million in 2020) was from continuing operations. The

income tax paid for discontinuing operations in 2021 (€ 6 million) relates to a tax audit on the Pharma business in Germany that was closed in 2021.

The income tax paid has increased compared to previous years due to increased profits mainly in Brazil and Italy and due to increased withholding

taxes paid on dividends distributed, mainly by Rusvinyl.

The major components of Income taxes are discussed in note F7 Income taxes in income statement and statement of financial position.

NOTEF14

CHANGES IN WORKING CAPITAL

In € million 2021 2020

Inventories -427 100

Trade receivables -459 87

Trade payables 775 3

Other receivables/payables 20 59

Changes in working capital -92 249

Of which discontinued operations -5 -11

See comments in the Business Review section.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

248

NOTEF15

ADDITIONS, REVERSALS AND USE OF PROVISIONS

Additions and reversals on provisions in 2021 amount to € 464 million (€ 186 million in 2020) and concern mainly employee benefits € 46 million (€ 58

million in 2020), restructuring € 184 million (€ 118 million in 2020) and environment for € 90 million (€ 15 million in 2020).

Use of provisions in 2021 amounts to € (303) million (€ (331) million in 2020) and concerns mainly employee benefits € (89) million (€ (125) million in

2020), environment € (61) million (€ (67) million in 2020) and restructuring € (118) million (€ (92) million in 2020).

In 2021, use of provisions for additional voluntary contributions in pension plans relates to € (134) million in the United Kingdom and to € (102) million

in Belgium. In 2020, use of provisions for additional voluntary contributions in pension plans in France, USA and Germany amounted to € (552) million.

See note F31 Provisions for more information.

NOTEF16

CASH FLOWS FROM INVESTING ACTIVITIES –

ACQUISITION/DISPOSAL OFASSETSANDINVESTMENTS

2021 - In € million Acquisitions Disposals Total

Investments -44 169 125

Subsidiaries -22 169 147

Other -22  -22

Property, plant and equipment/Intangible assets -637 30 -606

Total -681 200 -481

2020 - In € million Acquisitions Disposals Total

Total investments -58 1,297 1,239

Subsidiaries -12 1,297 1,285

Other -46  -46

Property, plant and equipment/Intangible assets -535 8 -527

Total -593 1,305 712

2021

The acquisition of subsidiaries (€(22)million) mainly relates to the acquisition of a seed coating business from Bayer.

Other acquisitions mainly relate to the investment in Shinsol Advanced Chemicals Corporation and in equity instruments measured at fair value.

The disposal of subsidiaries (€ 169 million) mainly relates to the proceeds after taxes from:

· the sodium chlorate business line and related assets in Povoa, Portugal;

· the ﬂuorine chemicals assets in Onsan, South Korea;

· the sodium percarbonate business line and related assets in Bad Hönningen, Germany;

· the Barium Strontium business and the joint venture with Chemical Products Corporation (CPC);

· the Process Materials business;

· the amphoterics surfactants activities; and

· the surfactants and anti-oxidants business in Rasal, India.

The acquisition of property, plant and equipment and intangible assets (€ (636) million) relates to various projects:

· Soda Ash: coal energy phase-out in Green River (USA)

· Aroma performance: internalization of natural vanillin purification in Saint Fons (France)

· Specialty Polymers: water treatment in Spinetta (Italy)

· Specialty Polymers: Tecnoﬂon capacity expansion in Spinetta (Italy)

· Specialty Polymers: Polyvinylidene Fluoride (PVDF) capacity increase in Changshu (PRC)

· Composite Materials: new production unit dedicated to thermoplastic composites in Piedmont, South Carolina (USA)

· Soda Ash & Derivatives: new production unit dedicated to Bicarbonate in Devnya (Bulgaria)

· Specialty Polymers: Polyvinylidene Fluoride (PVDF) capacity increase in Tavaux (France)

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

249

2020

The acquisition of subsidiaries (€(12)million) mainly relates to post-acquisition payments of Cytec and Aqua Pharma.

Other acquisitions mainly relate to the investment in the Strata Solvay Advanced Materials Joint Venture.

The disposal of subsidiaries (€ 1,297 million) mainly relates to the proceeds after taxes from the Polyamides divestment.

The acquisition of property, plant and equipment and intangible assets (€ (535) million) relates to various projects:

· Specialty Polymers: Tecnoﬂon capacity expansion in Spinetta (Italy)

· Specialty Polymers: Polyvinylidene Fluoride (PVDF) capacity increase in Changshu (PRC)

· Composite Materials: new production unit dedicated to thermoplastic composites in Piedmont, South Carolina (USA)

· Soda Ash & Derivatives: new production unit dedicated to Bicarbonate in Devnya (Bulgaria)

· Specialty Polymers: Polyvinylidene Fluoride (PVDF) capacity increase in Tavaux (France).

NOTEF17

OTHER CASH FLOWS FROM FINANCING ACTIVITIES

The € 50 million of other cash ﬂows from financing activities in 2021 (€ (101) million in 2020) mainly relate to margin calls on hedging instruments as

part of Energy Services’ activities for € 108 million and to the payment of the EBRD option paid for € (52) million to purchase the EBRD shares in the

Solvay holding of the Rusvinyl Joint Venture.

For trading in futures of different commodities (CO

, 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 is out 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.

NOTEF18

CASH FLOW FROM DISCONTINUED OPERATIONS

The 2021 cash ﬂow from discontinued operations amounts to € (12) million related to the Pharma business and Polyamides. In 2020, the amount of

€(17) million related to Polyamides.

NOTES TO THE CONSOLIDATED STATEMENT OFFINANCIALPOSITION

NOTEF19

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 of

being 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 its purchase

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.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

250

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 are accounted

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 cost of goods sold, administrative costs, research and

development 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 F24

Impairment).

Intangible 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 the 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 the

moment they are available for use, i.e. When they are in the location and condition necessary for them to be capable of operating in the

manner 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.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

251

In € million

Development

costs

Patents and

trademarks

Customer

relationships

Other intangible

assets

Total

Gross carrying amount     

December 31, 2019 432 1,672 1,986 760 4,851

Additions 57 8  16 81

Disposals and closures -17 -12  -2 -31

Currency translation differences -13 -99 -130 -46 -288

Other 6 57  -49 14

Transfer to assets held for sale -1 -6  -19 -26

December 31, 2020 464 1,620 1,856 661 4,601

Additions 48 4  23 75

Disposals and closures -9 -21  -4 -33

Increase through business combinations  7 7

Currency translation differences 12 79 117 49 257

Other 1 2  4 7

December 31, 2021 517 1,686 1,973 739 4,914

Accumulated amortization     

December 31, 2019 -141 -865 -758 -443 -2,208

Amortization -50 -109 -91 -41 -291

Impairment -3 -17 -12 -107 -139

Disposals and closures 17 12  2 31

Currency translation differences 4 44 25 46 119

Other -1 12 -7 4

Transfer to assets held for sale 7  18 26

December 31, 2020 -173 -930 -824 -531 -2,459

Amortization -65 -104 -82 -13 -264

Impairment 5 -5

Disposals and closures 8 21  4 32

Currency translation differences -3 -36 -36 -42 -116

Other 0 -3  -1 -5

December 31, 2021 -233 -1,047 -941 -590 -2,811

Net carrying amount     

December 31, 2019 291 807 1,228 318 2,642

December 31, 2020 291 690 1,032 129 2,142

December 31, 2021 283 638 1,031 150 2,103

Intangibles mainly relate to the intangibles acquired through the acquisitions of Rhodia and Cytec. The average remaining useful life of Cytec’s assets

is 11 years. The impairments recognized in 2020 mainly relate to the Novecare Oil & Gas business.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

252

NOTEF20

GOODWILL AND BUSINESS COMBINATIONS

Accounting policy

General

Acquisitions of subsidiaries are accounted for using the acquisition method. The consideration for each acquisition is measured at the

aggregate of the fair values (at the date of acquisition) of assets transferred and liabilities incurred or assumed, and equity instruments issued

by the Group in exchange for control of the acquiree. Acquisition-related costs are recognized in profit or loss as incurred.

Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent consideration arrangement,

measured at its acquisition-date fair value. Subsequent changes in such fair values are adjusted against the cost of acquisition where they

qualify as measurement period adjustments (see below). All other subsequent changes in the fair value of contingent consideration classified

as an asset or liability are accounted for in accordance with relevant IFRSs, generally through profit or loss.

Where a business combination is achieved in stages, the Group’s previously held interests in the acquired entity are remeasured to fair value

at the acquisition date (i.e. The date the Group obtains control) and the resulting gain or loss, if any, is recognized in profit or loss. Amounts

arising from interests in the acquiree prior to the acquisition date that have previously been recognized in other comprehensive income are

reclassified to profit or loss, where such treatment would be appropriate if that interest were disposed of.

The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 Business

Combinations are recognized and measured at their fair value at the acquisition date, except that:

· deferred tax assets or liabilities, and liabilities or assets related to employee benefit arrangements are recognized and measured in

accordance with IAS12 Income Taxes, and IAS19 Employee Benefits, respectively;

· liabilities or equity instruments related to the replacement by the Group of an acquiree’s share-based payment awards are measured in

accordance with IFRS2 Share-based Payment; and

· assets (or disposal groups) that are classified as held for sale in accordance with IFRS5 Non-current Assets Held for Sale and Discontinued

Operations are measured in accordance with that Standard.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the

Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the

measurement period (see paragraph below), or additional assets or liabilities are recognized, to reﬂect new information obtained about facts

and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognized as of that date.

The measurement period is the period from the date of acquisition to the date the Group obtains complete information about facts and

circumstances that existed as of the acquisition date, and does not exceed twelve months.

Goodwill

Goodwill arising in a business combination is recognized as an asset at the date that control is obtained (the acquisition date). Goodwill is

measured 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,

over the 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 recognized

on 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 is

included in the determination of the profit or loss on disposal. It is measured on the basis of the relative values of the operation disposed of

and the portion of the CGU retained, unless another method better reﬂects the goodwill associated with the operation disposed of.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

253

Goodwill – overview

In € million

Total

December 31, 2019 4,468

Currency translation differences -153

Impairment -1,050

December 31, 2020 3,265

Currency translation differences 115

Disposals -1

December 31, 2021 3,379

In 2020, the impairment mainly relates to Composite Materials (€ (761) million) and Technology Solutions (€ (265) million).

In 2021 and 2020, the currency translation differences mainly relate to goodwill expressed in US dollars.

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 business combination.



2021

 

In € million

At beginning

of the period

Disposals Currency

translation

differences

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 509  46 555

Novecare 542 -1 13 553

Technology Solutions 636  54 690

Special Chem 210  210

Specialty Polymers 177



2 179

Soda Ash and Derivatives 162   162

Coatis 82   82

Silica 72   72

Aroma Performance 49   49

Energy Services 50   50

Hydrogen Peroxide Europe 21   21

Hydrogen Peroxide Mercosul 14   14

Hydrogen Peroxide Nafta 7   7

Hydrogen Peroxide Asia 11  11

Total goodwill 3,265 -1 115 3,379

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

254

  2020

In € million At beginning

of the

period

Transfer Impairment Currency

translation

differences

At the end of

the period

Operating segments - Groups of CGUs     

Materials  341   341

Chemicals  121   121

Solutions  266 -2  264

Advanced Materials 493 -493   

Advanced Formulations 148 -148   

Performance Chemicals 86 -86   

(Groups of) CGUs

Composite Materials 1,334  -761 -64 509

Novecare 569  -7 -20 542

Technology Solutions 966  -265 -65 636

Special Chem 226  -15 -1 210

Specialty Polymers 180   -3 177

Soda Ash and Derivatives 162    162

Coatis 82    82

Silica 72    72

Aroma Performance 49    49

Energy Services 50    50

Hydrogen Peroxide Europe 21    21

Hydrogen Peroxide Mercosul 14    14

Hydrogen Peroxide Nafta 7    7

Hydrogen Peroxide Asia 11   -1 11

Total goodwill 4,468 0 -1,050 -153 3,265

See note F24 Impairment

NOTEF21

PROPERTY, PLANT AND EQUIPMENT

Accounting policy

General

Property, 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.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

255

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 of operating

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.

Items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives. The components of an item

of 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 Plant Strategy (see Note Climate Change in the IFRS general accounting policies). Any changes in

estimates are accounted for prospectively.

Buildings 30-40 years

IT equipment 3-5 years

Machinery and equipment 10-20 years

Transportation equipment 5-20 years

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 F24 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 arising from the 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 this

expenditure is to maintain the proper working order of certain installations without altering their useful life. This expenditure is considered as a

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 to ensure the safety compliance of the discontinued

sites or installations.

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take

a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are

substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted

from the borrowing costs eligible for capitalization.

All other borrowing costs are recognized in profit or loss in the period in which they are incurred.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

256

In € million

Land and

buildings

Fixtures and

equipment

Other tangible

assets

Property, plant and

equipment under

construction

Total

Gross carrying amount     

December 31, 2019 3,013 9,939 425 678 14,056

Additions 24 144 13 215 395

Disposals and closures -17 -92 -10 -119

Currency translation differences -126 -490 -20 -29 -665

Other 47 397 14 -455 2

Transfer to assets held for sale -122 -199 -8 -3 -331

December 31, 2020 2,819 9,699 414 405 13,337

Additions 18 88 13 452 571

Disposals and closures -16 -101 -29 -146

Increase through business combinations 4 2 7

Currency translation differences 101 348 13 24 486

Other 15 151 7 -193 -20

December 31, 2021 2,941 10,187 418 688 14,235

Accumulated depreciation     

December 31, 2019 -1,487 -6,770 -327  -8,584

Depreciation -82 -501 -31  -614

Impairment -67 -132 -8  -207

Disposals and closures 16 91 9  116

Currency translation differences 59 330 15  405

Other 11 -1 6  16

Transfer to assets held for sale 71 170 7  248

December 31, 2020 -1,478 -6,813 -329  -8,620

Depreciation -73 -436 -27  -535

Impairment -5 -4  -9

Reversal of impairment 1  1

Disposals and closures 12 101 29  143

Currency translation differences -43 -226 -10  -278

Other 5 2  7

December 31, 2021 -1,580 -7,375 -337  -9,291

Net carrying amount     

December 31, 2019 1,527 3,169 98 678 5,472

December 31, 2020 1,342 2,886 85 405 4,717

December 31, 2021 1,361 2,813 81 688 4,943

The impairment in 2020 mainly relates to the assets of the Special Chem GBU (Fluor Gas – Solutions Segment), which were impacted by the COVID-19

crisis.

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.

Cash ﬂows related to major investments are disclosed in note F16 Cash ﬂows from investing activities – acquisition/disposal ofassetsandinvestments.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

257

NOTE F22

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 of time 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 period of

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 period

of 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 the Group’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 the

likelihood 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 the

asset 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 are

presented as part of financial debt.

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 the lease 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 useful life and the end

of the lease term, in all other cases.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

258

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 is

recognized within cost of sales. At the end of 2021, the total (gross) value of palladium leased still to be returned amounted to € 50 million (end

of 2020: € 63 million) valued at the year-end closing rate.

In € million

Land Buildings Transportation

equipment

Industrial

equipment

Other tangible

assets

Total

Gross carrying amount      

December 31, 2019 18 209 185 153 7 571

Additions 39 28 12 2 82

Disposals and closures -7 -4 -12

Currency translation differences -1 -12 -11 -8 -32

Other 1 7 11 2 1 23

Transfer to assets held for sale -10 -1 -12

December 31, 2020 18 227 207 159 9 620

Additions 29 23 82 1 134

Disposals and closures -1 -3 -4

Currency translation differences 9 11 7 27

Other 3 10 3 1 17

December 31, 2021 19 266 248 251 11 795

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

259

In € million

Land Buildings Transportation

equipment

Industrial

equipment

Other tangible

assets

Total

Accumulated depreciation      

December 31, 2019 -1 -47 -45 -28 -3 -124

Depreciation -1 -43 -45 -22 -3 -114

Impairment -1 -1

Disposals and closures 7 4 12

Currency translation differences 4 4 2 10

Other -3 -1 -4

Transfer to assets held for sale 7 1 8

December 31, 2020 -2 -77 -83 -47 -6 -215

Depreciation -1 -36 -42 -26 -3 -107

Disposals and closures 1 3 4

Currency translation differences -4 -5 -3 -11

December 31, 2021 -4 -115 -127 -75 -8 -329

Net carrying amount      

December 31, 2019 16 162 139 125 4 447

December 31, 2020 16 150 124 112 4 405

December 31, 2021 15 151 121 176 3 466

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 2021, additions include € 68 million for the construction of a waste-wood boiler, steam turbine

and auxiliaries in Germany.

Lease contracts generally 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 account when

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 €

143 million at December 31, 2021 (€ 165 million at December 31, 2020).

Lease contracts signed not yet commenced amount to € 135 million at December 31, 2021 (€ 139 million for 2020) and mainly relate to a second waste

wood boiler, steam turbine and auxiliaries in Germany, and industrial equipment in the United States.

Total cash outﬂows for leases amount to € 118 million for 2021, of which € 99 million related to payment of lease liabilities and € 19 million of interest

expenses. Information on the corresponding lease liabilities (€ 505 million) can be found in the note F33 Net indebtedness. Information on the finance

expense related to lease liabilities can be found in note F6 Net financial charges.

NOTEF23

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, 2021



December 31, 2020

Associates Joint ventures Total



Associates Joint ventures Total

Investments in associates and joint

ventures

18 619 637  16 479 495

Earnings from associates and joint

ventures

2 157 159  2 56 58

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

260

INVESTMENTS IN ASSOCIATES

In € million 2021 2020

January 1 16 17

Profit for the year 2 2

Dividends received -2 -2

Currency translation differences 1 -1

December 31 18 16

The tables below present the summary of the statement of financial position and income statement of the associates as if they were proportionately

consolidated.

In € million

December 31, 2021 December 31, 2020

Statement of financial position

 

Non-current assets 14 14

Current assets 16 13

Cash and cash equivalents 3 3

Non-current liabilities 2 1

Non-current financial debt 1 1

Current liabilities 10 9

Current financial debt 2 2

Investments in associates 18 16

  

Income statement 2021 2020

Sales 33 31

Depreciation and amortization -1 -1

Interest on loans and short term deposits

Profit for the year from continuing operations 2 2

Profit for the year 2 2

 

Total comprehensive income 3 2

  

Dividends received 1 1

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

261

INVESTMENTS IN JOINT VENTURES

In € million 2021 2020

January 1 479 538

Additions 8

Capital increase 28

Profit for the year 157 56

Dividends received -127 -23

Currency translation differences 34 -100

Transfer to assets held for sale  -22

Impairment reversal 67 

Other 1 2

December 31 619 479

In 2021, the impairment reversal of € 67 million and the dividend received of € 127 million mainly concern the joint venture Rusvinyl.

In 2021 and 2020, the currency translation differences mainly relate to the evolution of the Russian ruble, of the Brazilian real and of the Indian rupee

compared to the euro.

In 2020, the capital increase related to the investment in the Strata Solvay Advanced Materials Joint Venture. The transfer to assets held for sale in

2020 refers to the investment in the Solvay-CPC Barium Strontium Joint Venture.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

262

The tables below present the summary of the statement of financial position and income statement of the material joint ventures as if they were

proportionately consolidated.

December

31, 2021

Rusvinyl

OOO

Peroxidos

do Brasil

Ltda

Strata -

Solvay

Advanced

Material JV

Shandong

Huatai

Interox

Chemical

Co. Ltd

Hindustan

Gum &

Chemicals

Ltd

Aqua

Pharma

Group

EECO

Holding and

subsidiaries

Shinsol

Advanced

Chemicals

Cogeneration

Rosignano

In € million         

Ownership

interest

50% 69.40% 50% 50% 50% 50% 33.3% 51% 25.4%

Operating

Segment

Chemicals Chemicals Materials Chemicals Solutions Chemicals Corporate

& Business

Services

Solutions Corporate

& Business

Services

Statement

of financial

position

        

Non-current

assets

324 61 29 4 5 16 10  5

Current assets 82 58 10 12 156 12 15 8 4

Cash and cash

equivalents

57 25 10 9 138 6 2 8 3

Non-current

liabilities

50 7 5 4 8  4

Non-current

financial debt

30 4 8  4

Current

liabilities

64 26 3 5 8 1 9  1

Current financial

debt

39 4 8  1

Investments in

joint ventures

292 87 36 11 149 23 8 8 4

        

2021 income

statement



       

Sales 276 88 13 22 22 18 0 

Depreciation and

amortization

-22 -4 -1 -1 -2 -1  -1

Cost of

borrowings

-7 -1 

Interest on loans

and short-term

deposits

2 1 7 1 

Income taxes -28 -11 -1 -2 -1 

Profit for the

year from

continuing

operations

111 26 9 2 5 1 1 

Profit for the

year

111 26 9 2 5 1 1 

Other

comprehensive

income

21 2 1 8 2 

Total

comprehensive

income

132 28 9 3 14 3 

Dividends

received

103 15 1 2 -1 

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

263

Other comprehensive income mainly comprises the currency translation differences.

December

31, 2020

Rusvinyl

OOO

Peroxidos

do Brasil

Ltda

Strata -

Solvay

Advanced

Material JV

Shandong

Huatai

Interox

Chemical

Co. Ltd

Hindustan

Gum &

Chemicals

Ltd

Aqua

Pharma

Group

EECO

Holding and

subsidiaries

Cogeneration

Rosignano

In € million 

  



 

Ownership

interest

50% 69.40% 50% 50% 50% 50% 33.3% 25.4%

Operating

Segment

Chemicals Chemicals Materials Chemicals Solutions Chemicals Corporate

& Business

Services

Corporate

& Business

Services

Statement

of financial

position

       

Non-current

assets

264 56 28 5 6 18 11 8

Current assets 73 48  7 142 10 17 2

Cash and cash

equivalents

49 21  5 130 4 3 1

Non-current

liabilities

84 7  - 4 2 12 5

Non-current

financial debt

64 4  1 12 4

Current

liabilities

56 21  3 8 3 11 1

Current financial

debt

39 2  10 1

Investments in

joint ventures

196 76 28 9 137 23 6 4



      

2020 income

statement



      

Sales 168 77  17 17 20

Depreciation and

amortization

-22 -4  -1 -3 -1 -1

Cost of

borrowings

-11 -1

Interest on loans

and short-term

deposits

1 1  11 1

Income taxes -4 -10  -2 -1

Profit for the

year from

continuing

operations

16 23  2 5 2 1

Profit for the

year

16 23  2 5 2 1

Other

comprehensive

income

-58 -23  -15 1 

Total

comprehensive

income

-41  1 -11 3

Dividends

received

6 9  2 1

Other comprehensive income mainly comprises the currency translation differences.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

264

NOTEF24

IMPAIRMENT

Accounting policy

General

At the end of each reporting period, the Group reviews whether there is any indication that those 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 to individual

CGUs, or otherwise they are allocated to the smallest group of CGUs for which a reasonable and consistent allocation basis can be 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 the

discount 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 (net

of 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 sale

In 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 of

disposal, and their value in use. The latter equals the present value of the future cash ﬂows expected to be derived from each asset, CGU or

group 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, forecast

changes 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 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 the same methodology applied in previous years and after extensive

benchmarking with peers.

· A short term WACC of 5.1% was utilized in 2021 (6.4% in 2020) to discount the expected cash ﬂows of the initial four years, computed

consistently with previous years based on prevailing discount rates;

· A long term WACC of 6.8% was utilized in 2021 (7.2% in 2020) to discount the expected cash ﬂows of the fifth year and the Terminal Value,

and is a rolling 8-year average of historical short term WACCs.

Long-term growth rates

The long-term growth rates used in 2021 are based:

· on the comprehensive review of the entire business portfolio performed in 2019 with the definition of the G.R.O.W Strategy when each

CGU was assigned to one of three agile business segments that became effective as from 2020: Materials, Chemicals and Solutions, with

different growth opportunities, consistent with the long term growth rates of the market they serve and the Group competitive position in

those markets; and

· on the long term growth potential for Composite Materials and Technology Solutions assessed during the 2020 impairment test which

remain very strong.

After reassessment of the long-term growth prospects the Group concluded that the prior year rates are still applicable and were thus set at:

· 2% for the Specialty Polymers CGU and 3% for the Composite Materials CGU

· 0% in the Segment Chemicals, except for Soda Ash and Peroxides, for which a 1% rate was set, and

· 1% for the other CGUs in the Segment Solutions (excluding Technology Solutions, for which 1.5% was used, and Oil & Gas).

Other key assumptions are specific to each CGU (utility price, volumes, margin, etc.).

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

265

Impairment Test 2021

The impairment tests performed at CGU level at December 31, 2021, were based on the budget 2022 approved by the Board and the Mid Term

Plan 2023-2025 which reﬂect the economic rebound after last year crisis and the results of the structural cost saving measures adopted by the Group.

They 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, the difference between the (groups of) CGUs’ value in use and their carrying amount (headroom) represented in all cases more than 10%

of their carrying amount. As a result, for these (groups of) CGUs, a reasonable change in a key assumption relating to the recoverable amount for

which the (groups of) CGUs is based, would not result in an impairment loss.

Fully consolidated CGUs

In 2020, the Oil & Gas market deteriorated significantly and the value pool for fracking chemicals further decreased with reduced volumes and prices.

Consequently, an additional impairment loss of € (155) million was recorded on tangible and intangible fixed assets. In 2021 although the profitability

has improved, the long-term prospects remain uncertain and the impairments recorded in prior years were not reversed.

Considering the impairment losses for Composite Materials and Technology Solutions recorded in 2020 and the consequently higher risk of

impairment in case of changes in the Discount rate and Long term growth assumptions used for their test, the following sensitivity analyses are

reported for these two groups of CGUs. A broader range of discount rates was used in the sensitivity analysis as compared to the prior year.

Composite Materials

In € billion December 31, 2021

Assumptions: 

Discount rate = 6.8% 

Long term growth rate = 3%

Sensitivity to:

Impact on recoverable amount Revised headroom

Discount rate - 1% 1.3 2.4

Discount rate + 1% -0.7 0.4

Long term growth rate - 1% -0.6 0.5

Long term growth rate +1% 1.0 2.1

In € billion December 31, 2020

Assumptions: 

Discount rate = 7.2%

Long term growth rate = 3%

Impact on recoverable amount Revised headroom

Discount rate - 0.5% 0.3 0.5

Discount rate + 0.5% -0.3 -0.1

Long term growth rate - 1% -0.4 -0.2

Long term growth rate +1% 0.6 0.8

The table below shows the break-even analysis for the headroom of Composite Materials:

Discount rate Long term growth rate

Base rate Break-even rate Base rate Break-even rate

December 31, 2021 6.8% 8.6% 3.0% 0.6%

December 31, 2020 7.2% 7.5% 3.0% 2.6%

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

266

Technology Solutions

After the impairment, Technology Solutions has limited headroom at the end of Q4 2021 and is sensitive to changes in assumptions related to the

discount rate and the long-term growth rate.

In € billion December 31, 2021

Assumptions: 

Discount rate = 6.8%

Long term growth rate = 1.5%

Sensitivity to:

Impact on recoverable amount Revised headroom

Discount rate - 1% 0.5 0.9

Discount rate + 1% -0.3 0.1

Long term growth rate - 1% -0.3 0.2

Long term growth rate +1% 0.4 0.8

In € billion December 31, 2020

 Assumptions: 

 Discount rate = 7.2%



Long term growth rate = 1.5%

Sensitivity to:

Impact on recoverable amount Revised headroom

Discount rate - 0,5% 0.2 0.2

Discount rate + 0,5% -0.1 0.0

Long term growth rate - 1% -0.2 -0.1

Long term growth rate +1% 0.3 0.3

The table below shows the break-even analysis for the headroom of Technology Solutions:

Discount rate Long term growth rate

Base rate Break-even rate Base rate Break-even rate

December 31, 2021 6.8% 8.3% 1.5% 0.3%

December 31, 2020 7.2% 7.5% 1.5% 1.1%

Other small groups of assets (Solutions)

Several production sites, mainly in the Special Chem CGU for Fluor Gases, with independent cash inﬂows were impacted by the COVID-19 crisis. The

impact resulted in 2020 in an impairment loss of € (169) million, of which € (24) million is related to the Goodwill, € (41) million is related to Intangible

assets, and € (104) million for tangible assets. Even if the results of this CGU improved in 2021, the long-term prospects remain unchanged.

RusVinyl equity investment

RusVinyl is a Russian joint venture in chlorovinyls (included in the Chemicals Segment:) in which Solvay holds a 50% equity interest, together with Sibur

who holds the remaining 50% equity interest.

In the fourth quarter of 2014, the Group accounted for a € 110 million impairment charge for the RusVinyl joint venture. The impairment was partially

reversed in 2015 for €19 million after the new business plan was prepared at that time for the company’s refinancing.

In 2021, the recoverable amount of the investment has been estimated based on a dividend discount model taking into account the latest business

plan, which reﬂects the improved profitability and the deleveraging of the euro denominated debt. At the average RUB/EUR rates used for the

conversion, the impairment test in 2021 resulted in an impairment reversal of € 66 million reported in the Note 5 Results from Portfolio Management,

Major Restructurings, Legacy Remediation and Major Litigations.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

267

Impairment tests Q2 2020

A review was undertaken during Q2, 2020, to assess whether the consequences of COVID-19 indicate that some assets could be impaired. The review

confirmed that there was an indication of impairment for the CGUs with the lowest impairment headroom at December 31, 2019 (see Note F27 in

2019 Annual report). The analysis resulted in impairments within the following CGUs:

· Composite Materials (Materials) - An impairment loss of € (0.8) billion which was fully allocated to Goodwill, except for the tangible assets related

to two shutdown plants.

· Technology Solutions (Solutions) - An impairment loss of € (0.3) billion which was fully allocated to Goodwill, with the exception of € (15) million which

was allocated to tangible assets.

· Oil & Gas (Solutions) - An impairment loss of € (155) million, of which € (61) million was allocated to tangible assets and € (94) million was allocated

to intangible assets related to customer relationships.

· Other small groups of assets (Solutions)- an impairment loss of € (169) million, of which € (24) million is related to the Goodwill, € (41) million is related

to Intangible assets, and € (104) million for tangible assets.

Q4 2020 update

An impairment test for Goodwill was performed at year-end based on the 2021 budget and the Mid Term Plan 2022-2024, and the test did not lead

to any additional impairments.

Additional information on the impairment reviews undertaken in 2020 can be found in Note F27 of the 2020 Annual Report.

NOTEF25

INVENTORIES

Accounting policy

Cost of inventories includes the purchase, conversion and other costs incurred in bringing the inventories to their present location and

condition. The cost of inventories is determined by using the weighted average cost method.

Inventories are measured at the lower of purchasing cost (raw materials and merchandise) or production cost (work in progress and finished

goods) and net realizable value. Net realizable value represents the estimated selling price, less all estimated costs of completion and the

estimated costs necessary to make the sale.

emission rights

With respect to the mechanism set up by the European Union to encourage manufacturers to reduce their greenhouse gas emissions, carbon

dioxide (CO

) emission rights are granted to the Group for free. The Group is also involved in Clean Development Mechanism (CDM) under

the Kyoto protocol. Under these projects, the Group has deployed facilities in order to reduce greenhouse gas emissions at the relevant sites

in return for Certified Emission Reductions (CER).

In the absence of any IFRS regulating the accounting treatment of CO

emission rights, the Group applies the Trade/Production model,

according to which CO

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 CO

emission rights’ trading, arbitrage and hedging

activities. 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 CO

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 CO

emission rights. In some cases, Energy Services

rolls forward CO

credits, with continued own use exception, to match credits delivery and consumption in the production process.

In light of its centralized CO

emission rights’ portfolio management, for emission rights that are substitutable between subsidiaries, the

Group’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 CO

emission rights at 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.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

268

In € million

December 31, 2021 December 31, 2020

Finished goods 1,155 834

Raw materials and supplies 661 468

Work in progress 20 21

Total 1,837 1,323

Write-downs -92 -82

Net total 1,745 1,241

In previous years the Group forward purchased EUA certificates (own use) to cover deficits. The acquired quotas to cover deficits after 2022 were

reported for € 67 million under Other non-current assets.

NOTEF26

OTHER RECEIVABLES (CURRENT)

In € million December 31, 2021 December 31, 2020

VAT and other taxes 321 196

Advances to suppliers 189 69

Financial instruments - operational 1,326 131

Insurance premiums 38 28

Loan receivables 28 36

Other 102 58

Other current receivables 2,004 519

Financial instruments – operational includes held for trading and cash ﬂow hedge derivatives (see noteF32.A. Overview of financial instruments).

NOTEF27

ASSETSHELD FOR SALE

Accounting policy

A disposal group is a group of assets to be disposed of, by sale or otherwise, together as a group in a single transaction, and liabilities directly

associated with those assets that will be transferred in the transaction. The group includes goodwill acquired in a business combination if the

group is a cash-generating unit to which goodwill has been allocated, or if it is an operation within such a cash-generating unit.

Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale

transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or

disposal group) is available for immediate sale in its present condition. For a sale to be highly probable, management should be committed

to a plan to sell the asset (or disposal group), an active program to locate a buyer and complete the plan should be initiated, the asset (or

disposal group) should be actively marketed at a price which is reasonable in relation to its current fair value, the sale should be expected to

be completed within one year from the date of classification, and actions required to complete the plan should indicate that it is unlikely that

significant changes to the plan will be made or that the plan will be withdrawn.

When the Group is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that subsidiary are

classified as held for sale when the criteria described above are met, regardless of whether the Group will retain a non-controlling interest in

its former subsidiary after the sale.

Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their previous carrying amount and fair value

less costs to sell. Any excess of the carrying amount over the fair value less costs to sell is recognized as an impairment loss. Depreciation

of such assets is discontinued as from their classification as held for sale. Prior period consolidated statements of financial position are not

restated to reﬂect the new classification of a non-current asset (or disposal group) as held for sale.

At the end of 2021 there are no assets classified as held for sale.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

269

In € million December 31, 2020

Technical-grade barium

and strontium

Sodium

percarbonate

Fluorine fine

chemicals

Commodity

amphoterics

Process

materials

Sodium

chlorate

Operating Segment Solutions Solutions Solutions Solutions Materials Chemicals

Property, plant and

equipment

7 5 27 37 7

Intangible assets 1

Right-of-use assets -1 1 4

Investments 22

Deferred tax assets 5 1 3 2 3 1

Inventories 2 5 5 13 13 1

Trade receivables 1 17 5 15 14

Other assets 4 1 3 7

Assets held for sale 41 28 39 69 36 16

Provisions 28 8 1 4 3 8

Deferred tax liabilities 1 3 1 5 1

Other non-current liabilities 3

Trade payables 1 1 1 12 7 2

Income tax payables 4

Other liabilities 1 5 2 6 1

Liabilities associated with

assets held for sale

31 13 10 19 24 12

Net carrying amount of

the disposal group

10 15 29 50 12 4

Included in other

comprehensive income



    

Currency translation

differences

-15 1 -4 -24

Defined benefit plans -11 -3 -1 4

Other comprehensive

income

-26 -3 1 -1 -4 -19

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

270

NOTEF28

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, from the

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 the

perpetual 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 remeasurement of equity instruments measured at fair value through other comprehensive income;

· the impacts of the fair value remeasurement 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, and

corresponds to the interests in subsidiaries that are not held by the Company or its subsidiaries.

NUMBER OF SHARES (IN UNITS)

December 31, 2021 December 31, 2020

Shares issued and fully paid 105,876,416 105,876,416

Treasury shares held 2,236,739 2,718,122

The treasury shares held by the Group have been deducted from consolidated shareholders’ equity.

Perpetual hybrid bonds

To strengthen its capital structure, Solvay issued undated deeply subordinated perpetual bonds (“perpetual hybrid bonds”) of € 1.8 billion as per the

following table:

In € million

Issuance date Nominal value % Annual coupon First call / reset date

Hybrid bond NC10 November 12, 2013 500 5.425% 27 November 12, 2023

Hybrid bond NC8.5 December 2, 2015 500 5.869% 29 June 3, 2024

Hybrid bond NC5.25* December 4, 2018 300 4.250% 13 March 4, 2024

Hybrid bond NC5.5* September 2, 2020 500 2.500% 13 March 2, 2026

* with 3 months call option at par

In September 2020, Solvay issued a new perpetual hybrid bond for an aggregate principal amount of € 500 million (NC5.5 @ 2.5 %). The first coupon

was paid in March 2021 (€ 6.2 million, and will continue to be paid annually (€ 12.5 million) until the first reset date in 2026).

This new issue was aimed at refinancing in advance the existing perpetual hybrid (NC5.5 @ 5.118%) with an initial first call in June 2021. The transaction

took place as follows:

· the initial purchase of 91.58% of the € 500 million (€ 457 million net of issuance costs) through a cash tender offer at 103.75%; and

· the redemption of the remaining 8.42% of the € 500 million (the remaining € 43 million net of issuance costs) as per Solvay’s right under the terms

and conditions of this hybrid bond.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

271

In addition to the € 500 million principal amount repaid, the transaction has generated a cash outﬂow of € 23.6 million (including the premium for the

cash tender and the accrued coupon on the € 500 million until the relevant repurchase dates).

All perpetual hybrid bonds are classified as equity absent any unavoidable contractual obligation to repay the principal and interest of the perpetual

hybrid bonds, specifically:

· No maturity, yet the issuer has a call option at every reset date to redeem the instrument;

· At the option of the issuer, interest payments can be deferred indefinitely.

The coupons related to the perpetual hybrid bonds are recognized as equity transactions and are deducted from equity upon declaration (see

consolidated statement of changes in equity). These coupons amount to€ 75million in 2021 (€ 119 million in 2020).

Should Solvay have elected not to pay any interests to the perpetual hybrid bond holders, then any payment of dividends to the ordinary shareholders

or repayment of ordinary shares would trigger a contractual obligation to pay previously unpaid interests to the perpetual hybrid bond holders.

Tax impacts related to the perpetual hybrid bonds are recognized in profit or loss.

NOTEF29

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 2021, the following subsidiaries have non-controlling interests totaling € 93 million (out of a total of € 112 million).

In € million

Zhejiang

Lansol

Solvay Special

Chem Japan

Solvay Soda

Ash

Solvay Hengchang

Zhangjiagang Special

Chem

Non-controlling ownership interest 45% 33% 20% 30%

Statement of financial position

   

Non-current assets 28 17 285 18

Current assets 37 19 75 70

Non-current liabilities 2 1 19 0

Current liabilities 15 2 79 44

Income statement

   

Sales 80 63 309 136

Profit for the year 5 3 135 21

Other comprehensive income 4 -1 -8 3

Total comprehensive income 9 2 127 25

Dividends paid to non-controlling interests 3 1 34 1

Share of non-controlling interest in the profit for the

year

2 1 27 6

Accumulated non-controlling interests 21 11 49 12

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

272

At the end of 2020, the following subsidiaries have non-controlling interests totaling € 90 million (out of a total of € 106 million).

In € million

Zhejiang

Lansol

Solvay Special

Chem Japan

Solvay Soda

Ash

Solvay Hengchang

Zhangjiagang Special

Chem

Non-controlling ownership interest 45% 33% 20% 30%

Statement of financial position    

Non-current assets 25 18 267 16

Current assets 33 20 26 24

Non-current liabilities 2 1 16

Current liabilities 11 3 21 18

Income statement    

Sales 63 53 296 67

Profit for the year 3 4 116 4

Other comprehensive income -1 18

Total comprehensive income 2 3 134 3

Dividends paid to non-controlling interests 0 1 25 2

Share of non-controlling interest in the profit for the

year

1 1 23 2

Accumulated non-controlling interests 20 11 52 7

NOTEF30

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 share

options). 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 equity-

instruments with the recognition of a corresponding adjustment in equity. The fair value of services rendered is measured based on the fair

value of the equity-instruments on the grant date. It is not subsequently remeasured. At each reporting date, the Group re-estimates the

number 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 issuance

of 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 Group

re-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 value

of 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.

Stock Option Plan

In 2021, the Board of Directors offered to executive staff (47 beneficiaries) a share option plan with a view to involve them more closely in the long-

term development of the Group. The plan is an equity-settled share-based plan. The majority of the managers involved subscribed to the options

offered to them in 2021 with an exercise price of € 95.58 representing the average stock market price of the share for the 30 days prior to the offer.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

273

Share option plans 2021 2020 2019 2018 - 2 2018 - 1 2017

Number of share options granted and still outstanding at December

31, 2020

 405,670 438,107 72,078 400,704 316,935

Granted share options 265,433     

Forfeitures of rights and expiries  -10,506 -9,004  -9,424 -8,485

Share options exercised

     

Number of share options at December 31, 2021 265,433 395,164 429,103 72,078 391,280 308,450

Share options exercisable at December 31, 2021      308,450

Exercise price (in €) 95.58 95.80 97.05 108.38 113.11 111.27

Fair value of options at measurement date (in €) 23.32 15.23 17.77 20.81 19.10 23.57

2016 2015 2014 2013

Number of share options granted and still outstanding at December

31, 2020

696,144 346,617 351,482 367,171

Granted share options

   

Forfeitures of rights and expiries  -6,526 -5,485 -102,973

Share options exercised -175,049 -7,526 -141,210 -264,198

Number of share options at December 31, 2021 521,095 332,565 204,787

Share options exercisable at December 31, 2021 521,095 332,565 204,787

Exercise price (in €) 75.98 114.51 101.14 104.33

Fair value of options at measurement date (in €) 17.07 24.52 22.79 20.04

2021 2020

Number of share

options

Weighted

average exercise

price

Number of share

options

Weighted

average exercise

price

January 1 3,394,908 103.63 3,310,749 102.60

Granted during the year 265,433 95.58 405,670 95.80

Forfeitures of rights and expiries during the year -152,403 104.56 -149,456 83.57

Exercised during the year -587,983 95.25 -172,055 82.81

December 31 2,919,955 104.54 3,394,908 103.63

Exercisable at December 31 1,366,897  1,761,414 

In 2021, the share options resulted in an expense of € 8 million, which was calculated by third parties according to the Black-Scholes model, and

recognized in the consolidated income statement as part of administrative costs.

The valuation of the stock option plan of 2021 is based on:

· the price of the underlying asset (Solvay share): € 98.58 at February 23, 2021;

· the time outstanding until the option maturity: exercisable from January 1, 2025, until February 23, 2029, taking into account the fact that some of

them will be exercised before the option maturity;

· the option exercise price: € 95.58;

· the risk-free return: (0.20)% (on average);

· the average volatility of the underlying yield, estimated based on the option price: 28.49%;

· an average dividend yield of 2.86%.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

274

Weighted average remaining contractual life of the share option plans:

In years

2021 2020

2013 0.2

2014 0.2 1.2

2015 1.2 2.2

2016 2.2 3.2

2017 3.2 4.2

2018-1 4.2 5.2

2018-2 4.6 5.6

2019 5.2 6.2

2020 6.2 7.2

2021 7.1 

Performance Share Units Plan (PSU)

In 2021, the Board of Directors offered to executive staff a Performance Share Unit Plan, with the objective of involving them more closely in the

development of the Group, making this part of the long-term incentive policy. All the managers involved subscribed to the PSU offered to them

in 2021 with a grant price of €95.58. The Performance Share Units is a cash-settled share-based plan through which beneficiaries will obtain a cash

benefit based on the Solvay share price, as well as performance conditions and accrued dividends.

Each plan has a 3-year vesting period, after which a cash settlement will take place, if vesting conditions are met.

Performance share units Plan 2021 Plan 2020

Number of PSUs 194,130 236,802

Grant date

23/02/2021 25/02/2020

Acquisition date 01/01/2024 01/01/2023

Vesting period 31/03/2021 to 31/12/2023 31/03/2020 to 31/12/2022

Performance

conditions

40% of the initial granted PSUs are subject to the

achievement of Year over Year Underlying EBITDA

growth target for each of the 3 (2021, 2022, 2023)

performance years ending on December 31, 2023

40% of the initial granted PSUs are subject to the

achievement of Year over Year Underlying EBITDA

growth target for each of the 3 (2020, 2021, 2022)

performance years ending on December 31, 2022

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

40% of the initial granted PSUs are subject to the

sustained and /or improved ROCE % of the Company

for each of the 3 (2020, 2021, 2022) performance years

20% of the initial granted PSUs are subject to the

reduction of GHG absolute emissions during the same 3

years (2021, 2022, 2023)

20% of the initial granted PSUs are subject to the

reduction of GHG absolute emissions during the same 3

years (2020, 2021, 2022)

Achievement of the plan is measured for each separate

performance year. The score achieved 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 the

achievement of the other years

Validation of

performance conditions

By the Board of Directors By the Board of Directors

In 2021, the impact on the consolidated income statement regarding PSUs (net of hedging) amounts to a cost of €(17) million, compared to an income

of €8 million in 2020. The carrying amount of the PSU liability at the end of 2021 amounts to € 31 million, compared to € 17 million at the end of 2020.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

275

NOTE F31

PROVISIONS

In € million

Employee

benefits

Restructuring Environment Litigation Other Total

December 31, 2020 2,209 120 615 61 84 3,088

Additions 68 196 100 16 149 528

Reversals of unused amounts -22 -12 -10 -9 -11 -64

Uses -89 -118 -61 -7 -28 -303

Use of provisions for additional voluntary

contributions (pension plans)

-236     -236

Increase through discounting 13 -13 1 0

Remeasurements -576 -576

Currency translation differences 35 1 16 1 1 54

Acquisitions and changes in consolidation scope 2 1 3

Disposals -1 4 3

Other 171 3 -2 -70 102

December 31, 2021 1,574 191 648 62 126 2,600

Of which current provisions 126 105 13 58 302

The provisions decreased by € (488) million in 2021, of which € (635) million for Employee benefits, partially offset by an increase of € 71 million for

Restructuring and € 33 million for Environment.

New provisions for restructuring exceeded the payments by € 66 million.

For employee benefits, the deleveraging of € (635) million is explained as follows:

· payments (uses) for € (89) million, and voluntary contributions of € (236) million to pension funds to deleverage and de-risk;

· net new liabilities (additions and reversals) for € 46 million;

· remeasurements, resulting from the changes in assumptions related to the gross liability for € (422) million (mainly due to changes in discount rates);

· return on plan assets reducing the liability by € (207) million, of which € (53) million in deduction of “Increase through discounting” and € (154) million

in deduction of “Remeasurements” for the assets return exceeding the discount rate, which excludes the impact of remeasurements on the plan

assets surplus (€ 12 million);

· increase through discounting for € 66 million for the unwinding of the discount rate on the gross liability;

· other increases in net debt for € 206 million mainly due to the reclassification of the amounts recognized in asset surplus and currency translation

differences.

Net additions of provisions for Environment (€ 90 million) resulted mainly from the revised assumptions of higher inﬂation rates, partially offset by the

impact of higher discount rates reducing the present value of the liability by € (48) million. This effect, combined with the unwinding of the opening

liabilities for € 34 million resulted in a net decrease of € (13) million related to discounting.

The movements in Other provisions mainly relate to post-closing adjustments resulting from M&A warranties as well as indemnities for environmental

remediation.

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

Total provisions for environment 302 90  256  648

Total provisions for litigation 57 5    62

Total provisions for restructuring and other 300  16   316

December 31, 2021 660  110  256  1,026

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

276

F31.A. Provisions for employee benefits

Accounting policy

General

The Group’s employees are offered various post-employment benefits, other long-term employee benefits, and termination benefits as a

result 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 subsequent

obligation, 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;

· other long-term employee benefits: long-service benefits granted to employees according to their seniority in the Group;

· termination benefits such as early pension 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 of

financial 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 recognized

in 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 by

multiplying 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 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.

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OVERVIEW

In € million

December 31, 2021 December 31, 2020

Post-employment benefits 1,371 2,006

Other long-term benefits 153 148

Termination benefits 50 54

Total employee benefits 1,574 2,209

POST-EMPLOYMENT BENEFITS

A. Defined contribution plans

For defined contribution plans, Solvay pays contributions to publicly or privately administered pension funds or insurance companies. For 2021, the

expense amounts to € 56 million compared to € 57 million for 2020.

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, 2021 December 31, 2020

Provisions 1,371 2,006

Asset plan surplus -248 -31

Net liability 1,123 1,975

  

 2021 2020

Operational expense 19 38

Finance expense 13 26

The operating expense includes current service cost for € 43 million (€ 44 million in 2020) (see also B.3.).

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 existing

plans into pension plans with a lower risk profile (hybrid plans, cash balance plans and defined contribution plans) or by closing them to new entrants.

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.

Inﬂation risk

The defined benefit obligations are linked to inﬂation, and higher inﬂation will lead to higher liabilities (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 is either unaffected by or only partially correlated

with inﬂation, meaning that an increase in inﬂation will also increase the plans’ net liabilities.

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 the

plans’ liabilities.

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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.

For more information about Solvay risk management, please refer to the “Management of risks” section of the present document.

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 with

established practices, which generate constructive obligations.

The largest post-employment plans in 2021 are in the United Kingdom, the United States, France, Germany and Belgium. These five countries

represent 95% of the total defined benefit obligations.

December 31, 2021

In € million

Defined benefit

obligations

In % Recognized

plan assets

Net liability/

(asset)

In % Ratio plan

assets on

defined benefit

obligations

of which

asset surplus

recognized in the

balance sheet

United Kingdom 1,618 32%  1,678 -60 -5% 104% 76

United States 1,315 26%  1,230 86 8% 93% 66

France 953 19%  372 582 52% 39% 50

Germany 516 10%  70 446 40% 14%

Belgium 384 8%  405 -21 -2% 105% 51

Other countries 229 5%  139 90 8% 61% 5

Total 5,016 100%  3,893 1,123 100% 78% 248

December 31, 2020

In € million

Defined benefit

obligations

In % Recognized

plan assets

Net liability/

(Asset)

In % Ratio plan

assets on

defined benefit

obligations

of which

asset surplus

recognized in the

balance sheet

United Kingdom 1,731 32% 1,394 337 17% 81%

United States 1,327 24% 1,175 152 8% 89% 28

France 1,101 20% 349 753 38% 32%

Germany 583 11% 95 488 25% 16%

Belgium 422 8% 294 128 6% 70%

Other countries 273 5% 155 118 6% 57% 3

Total 5,436 100% 3,461 1,975 100% 64% 31

United Kingdom

Solvay sponsors a few defined benefit plans in the United Kingdom; the largest one is the Rhodia Pension Fund. This is a final salary funded pension

plan, with entitlement to accrue a percentage of salary per year of service. It was closed to new entrants in 2003 and replaced by a defined contribution

plan.

Broadly, about 9% of the liabilities are attributable to current employees, 29% to former employees and 62% to current pensioners.

The Fund functions and complies with UK 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, the Fund is subject to Scheme Specific Funding which requires that pension

plans are funded prudently.

The UK Rhodia 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.

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The Rhodia Pension Fund is 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. The

last completed valuation was as of January 1, 2020, which established a fixed contribution rate of pensionable pay for active members plus a deficit

recovery plan which aims to fully fund the scheme’s technical provisions by the end of 2030 in accordance with local regulations. At the end of 2021 a

voluntary contribution was paid (£ 115 million)). This contribution will significantly reduce the recovery contributions to be paid until 2027.

The guarantee provided by Solvay (£ 362million) is based on local regulations and exceeds the recognized liability – See note F36 Contingent assets,

liabilities and financial guarantees for more information.

France

Solvay sponsors different defined benefit plans in France. The largest plans are the French compulsory retirement indemnity plan and three closed

top hat plans. Indeed, as required by the “Loi Pacte”, the open top hat plan (so called “ARS”) has been closed at the end of 2019 and replaced by a

defined contribution plan.

The main plan is for all former Rhodia current and retired 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. This plan is partially funded.

In accordance with French legislation, adequate guarantees have been provided.

United States

Solvay sponsored five different defined benefit pension plans in the United States (two qualified plans and three non-qualified plans). A qualified plan

is an employer-sponsored retirement plan that qualifies for special tax treatment under Section 401(a) of the Internal Revenue Code. At this moment

all defined benefit plans are closed to new entrants where newly hired employees are eligible to participate in a defined contribution plan. Note that

both qualified defined benefit pension plans are funded while the three non-qualified defined benefit pension plans are unfunded. The qualified

plans make up the vast majority of the pension liabilities as of December 31, 2021.

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 US qualified plans, 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.

Broadly, about 24% of the liabilities are attributable to current employees, 11% to former employees for whom benefit payments have not yet

commenced and 65% to current pensioners.

In 2021, in the United States Solvay contributed to two multiemployer pension plans under collective bargaining agreements that cover certain of

its union-represented employees. Each of the multiemployer plans is a defined benefit pension plan. None of the multiemployer plans provide an

allocation of its assets, liabilities, or costs among contributing employers. None of the multiemployer plans provides sufficient information to permit

Solvay, or other contributing employers, to account for the multiemployer plan as a defined benefit plan. Accordingly, the company accounts for

its participation in each of the multiemployer plans as if they were a defined contribution plan. For multiemployer plans, during 2021 and 2020, the

annual contributions paid are less than € 1 million.

Germany

Solvay sponsors various defined benefit plans in Germany. The largest plans are a closed final-pay plan and an open cash balance plan. Broadly,

about 68% of the liabilities are attributable to current pensioners. These plans are partially funded; an additional voluntary contribution of € 155 million

to the Contractual Trust Agreement will be paid during the first quarter of 2022.

Belgium

Solvay sponsors two defined benefit plans in Belgium. These are funded pension plans. The plan for executives has been closed since the end of

2006, and the plan for the White and Blue collars has been closed since 2004. The past service benefits provided under these plans continue to

be 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. In January 2021, a voluntary contribution of € 102 million was

paid into the pension fund, the objective being to fully fund all Defined Benefit obligations (incl. Dynamic management).

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 the

end of 2021, 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 a General Assembly

and a Board of Directors delegating day-to-day activities to an operational Committee.

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280

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 the United States), there are also post-employment medical plans,

which represent 4% (4% in 2020) of the total defined benefit obligation.

B.3. Financial impacts

Changes in net liability

In € million 2021 2020

Net amount recognized at beginning of period  1,975  2,475

Net expense recognized in P&L - Defined benefit plans  33  64

Actual employer contributions / direct actual benefits paid  -292  -654

Acquisitions and disposals  -1  -1

Remeasurements before impact of asset ceiling  -564  176

Change in the effect of the asset ceiling limit on remeasurements  2  -3

Reclassifications  -56  -1

Currency translation differences  25  -49

Transfer to (liabilities associated with) assets held for sale   -32

Net amount recognized at end of period  1,123  1,975

Remeasurements including the impact of asset ceiling € (562) million comprise:

· the favorable investment return on plan assets (excluding interests reported in the consolidated income statement) for € (140) million;

· increase in discount rates € (459) million mainly in the United States, United Kingdom, Brazil and Eurozone;

· increase in inﬂation rate (€ 102 million) for United Kingdom and Eurozone;

· other remeasurements due to changes in the other financial assumptions, demographic and experience effects € (57) million.

· The application of the April 2021 IFRIC agenda decision regarding the periods of service to which an entity attributes benefits for defined

benefit plans and the caps on such benefits, resulted in a decrease to the defined benefit obligation of € 8 million, which was recognized in other

comprehensive income. However, the Group is still assessing the impact of this agenda decision in the various local entities and these impacts will

only be determined in future accounting periods when a globally consistent and locally supported methodology is reached.

Net expense

In € million 2021 2020

Current service costs 43 44

Past service costs (including curtailments and settlements) -26 -11

Service costs 17 33

Interest cost 66 99

Interest income -53 -73

Net interest 13 26

Administrative expenses paid 3 4

Net expense recognized in P&L - Defined benefit plans 33 64

Remeasurements recognized in other comprehensive income -562 174

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 2021 the Group’s current service costs amount to € 43 million (€ 44 million in 2020), of which € 32 million (€ 33 million in 2020) related to funded plans

and € 11 million (€ 11 million in 2020) related to unfunded plans.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

281

Net liability

In € million December 31, 2021 December 31, 2020

Defined benefit obligations - Funded plans 4,468 4,824

Fair value of plan assets at end of period -3,896 -3,461

Deficit for funded plans 573 1,363

Defined benefit obligations - Unfunded plans 548 612

Deficit / surplus (-) 1,120 1,975

Amounts not recognized as asset due to asset ceiling (recognized in other

comprehensive income)

Net liability (asset) 1,123 1,975

Provision recognized 1,371 2,006

Asset recognized -248 -31

Changes in defined benefit obligations

In € million 2021 2020

Defined benefit obligation at beginning of period  5,436 5,511

Current service costs  43 44

Past service costs (including curtailments)  -26 -15

Interest cost  66 99

Employee contributions  4 4

Settlements  -2 -3

Acquisitions and disposals (-)  -8

Remeasurements in other comprehensive income  -422 386

Actuarial gains and losses due to changes in demographic assumptions  -36 -2

Actuarial gains and losses due to changes in financial assumptions  -322 348

Actuarial gains and losses due to experience  -64 39

Actual benefits paid  -302 -286

Currency translation differences  225 -270

Reclassification and other movements  1 -1

Transfer from/to (liabilities associated with) assets held for sale  -34

Defined benefit obligation at end of period  5,016 5,436

Defined benefit obligations - Funded plans  4,468 4,824

Defined benefit obligations - Unfunded plans  548 612

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

282

Changes in the fair value of plan assets

In € million 2021 2020

Fair value of plan assets at beginning of period  3,461 3,040

Interest income  53 73

Remeasurements in other comprehensive income  142 210

Return on plan assets (excluding amounts in net interests including on asset

surplus)

 142 210

Employer contributions  292 654

Employee contributions  4 4

Administrative expenses paid  -3 -4

Acquisitions / Disposals (-)  -7

Settlements  -2 -7

Actual benefits paid  -302 -286

Currency translation differences  200 -220

Reclassification and other movements  57

Transfer from/to (liabilities associated with) assets held for sale  -3

Fair value of plan assets at end of period  3,896 3,461

Actual return on plan assets (including on asset surplus)  195 283

In 2021, the total return on plan assets, i.e. including interest income, amounts to € 195 million against € 283 million in 2020.

In 2021, the Group’s cash contributions amount to € 292 million (€ 654 million in 2020), of which € 29 million (€ 48 million in 2020) of mandatory

contributions to funds, € 236 million (€ 552 million in 2020) of voluntary cash contributions, and € 27 million (€ 54 million in 2020) of direct benefits

payments.

In 2020, the voluntary cash contributions were made to improve the funding level of the US pension plans (€ 78 million) and partially fund French (€

379 million) and German (€ 95 million) unfunded pension plans and increase de-risking with plan assets.

In 2021, the voluntary cash contributions were made to improve the funding level of the Belgian pension plans (€ 102 million) and of the Rhodia UK

pension plan (€ 134 million) and increase de-risking with the additional plans assets.

Except for any significant change in the regulatory environment (see “regulatory risk” above), the Group’s mandatory cash contributions and

direct benefits payments in 2022 are expected to decrease to approximately € 51 million due to the action plans undertaken by the Group on the

management of pension funding, and a voluntary cash contribution of approximately € 155 million, which is expected in the 1st quarter 2022 for

Germany.

Categories of plan assets

December 31, 2021 December 31, 2020

Equities 23% 30%

Bonds 62% 53%

Properties and infrastructures 3% 4%

Cash and cash equivalents 5% 7%

Derivatives 2%

Others 6% 4%

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 other

assets occupied or used by Solvay. This does not exclude Solvay shares being included in mutual investment fund type investments.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

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Changes in asset ceiling

In € million 2021 2020

Effect of the asset ceiling limit at beginning of period  4

Change in the effect of the asset ceiling limit on remeasurements  2 -4

Effect of the asset ceiling limit at end of period  2

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 cost

of 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 plans take

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 inﬂation assumption is presented separately as salary growth and pension growth assumptions encompass more variables than inﬂation.

Eurozone UK USA

2021 2020 2021 2020 2021 2020

Discount rates 1.00% 0.25% 2.00% 1.25% 2.75% 2.25%

Expected rates of future salary

increases

1,75% - 4,00% 1,75% - 3,75% 2,50% - 3,00% 2,00% - 2,75% 3,00% - 3,50% 3,00% - 3,75%

Inﬂation 1,75% - 2,00% 1,50% - 1,75% 3.00% 2.75% 2.50% 2.00%

Expected rates of pension

growth

0,00% - 2.00% 0,00% - 1.75% 2.85% 2.60% NA NA

Actuarial assumptions used in determining the annual cost

Eurozone UK USA

2021 2020 2021 2020 2021 2020

Discount rates 0.25% 0.75% 1.25% 2.00% 2.25% 3.00%

Expected rates of future salary

increases

1,75% - 3,75% 1,75% - 3,75% 2,00% - 2,75% 1,90% - 3,00% 3,00% - 3,50% 3,00% - 3,75%

Inﬂation 1,50% - 1,75% 1.75% 2.75% 3.00% 2.00% 2.25%

Expected rates of pension

growth

0,00% - 1.75% 0,00% - 1.75% 2.70% 2.85% NA NA

Actuarial assumptions regarding future mortality are based on recent country specific mortality tables. These assumptions translate at January 1, 2021

into an average remaining life expectancy in years for a pensioner retiring at age 65:

In years



Belgium France Germany United

Kingdom

United States

Retiring at the end of the

reportingperiod

     

Male  19 25 20 20 20

Female  22 28 24 23 22

Retiring 20 years after the end of the

reportingperiod

    

Male  20 28 23 21 22

Female  24 31 26 24 24

For most countries the mortality assumptions reﬂect actual scheme experience and/or Solvay’s expectations in terms of future mortality improvements.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

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284

The actuarial assumptions used in determining the employee benefits obligation at December31 are based on the following employee benefits

liabilities durations:

Eurozone United Kingdom United States

Duration in years 12.1 15.5 10.0

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 affect multiple

assumptions simultaneously.

Sensitivity to a change of percentage in the discount rates:

In € million 0.25% increase 0.25% decrease

Eurozone -53 55

United Kingdom -60 62

United States -32 32

Others -4 4

Total -149 153

Sensitivity to a change of percentage in the inﬂation rates:

In € million

0.25% increase 0.25% decrease

Eurozone 50 -49

United Kingdom 39 -38

United States

Others 3 -3

Total 92 -90

Sensitivity to a change of percentage in salary growth rates:

In € million

0.25% increase 0.25% decrease

Eurozone 9 -8

United Kingdom 3 -3

United States

Others 1 -1

Total 13 -12

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 -87 90

United Kingdom -68 69

United States -33 33

Others -6 6

Total -194 198

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285

F31.B. Provisions other than for employee benefits

Accounting policy

General

Provisions 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 the

reporting period, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is

material, 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 is

recognized as an asset if it is virtually certain that reimbursement will be received when the Group settles the obligation.

Onerous contracts

An onerous contract is a contract in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits

expected to be received under it. Present obligations arising from onerous contracts are recognized and measured as provisions.

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 those

affected by it. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring, which are

those 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 for which

Solvay keeps commitments) and, to a lower extent, to ongoing activities (see comments below).

An environmental provision is recognized, in accordance to IAS 37, when there is a current legal or constructive obligation resulting from past

events which will result in a probable outﬂow of resources (expenses / cash outs) to settle it and for which a reliable estimate of such outﬂows

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 cash ﬂows forecasts needed, for current and

future years, to settle remediation obligations. Forecast expenditures are based on external consultant estimates, where appropriate and

possible. Future expenditures are forecast and revised formally biannually and validated quarterly by Solvay financial 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

Restructuring provisions

In 2021, these provisions amount to €191million, compared with €120million at the end of 2020.

The provisions at the end of 2021 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 announced on February 24, 2021 (€ 100 million).

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Environmental provisions

These provisions amount to €648million at the end of 2021, compared with €615million at the end of 2020, and pertain to:

· mines and drilling operations to the extent that legislation and/or operating permits in relation to quarries, mines and drilling operations contain

requirements to pay compensation to third parties. Most of these provisions, based on local expert advice, can be expected to be used over a 1-20

year horizon and amount to €136 million;

· the dismantling of the last mercury electrolysis activities was completed in 2019. The remaining provisions related to those activities will be used for

the management of contamination of soil and groundwater, mostly over the next 20 years.

· lime dikes (settling ponds related mainly to soda ash plant), 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 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, 2021 December 31, 2020

In € million Provisions In % Provisions

ongoing

activities

Use of

provisions

Provisions In % Provisions

ongoing

activities

Use of

provisions

France 152 24% -13 136 22% -12

Germany 117 18% 7 -4 119 19% 7 -5

Rest of Europe 161 25% 5 -14 155 25% 5 -13

North America 151 23% -24 121 20% -29

Rest of the world 66 10% -6 83 14% 1 -10

Total 648 100% 13 -61 614 100% 14 -68

Provisions for litigation

Provisions for litigation refer to indirect tax and legal exposures. They amount to €62million in 2021 (€ 61 million in 2020). The balance at the end of

2021 relates to indirect tax risks (€13million) and legal claims (€49million).

Other provisions

Other provisions relate to the shutdown or disposal of activities and amount to €126million, compared with €84million at the end of 2020.

NOTEF32

FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT

Accounting policy

General

Financial 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 not

consider 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 case for

substantially all trade receivables. Other financial assets are initially measured at fair value plus, in the case of a financial asset not at fair value

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.

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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;

· a debt instrument that (i) is held within a business model whose objective is achieved both by collecting contractual cash ﬂows and selling

financial assets and (ii) has contractual terms that give rise on specified dates to cash ﬂows that are solely payments of principal and interest

on the principal amount outstanding, is measured at fair value through other comprehensive income (FVTOCI), unless the asset is designated

at FVTPL under the fair value option. Upon derecognition, the cumulative gains and losses previously recognized in other comprehensive

income are reclassified to profit or loss;

· 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 business

combination, 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 with

gains 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 in

an 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 fair value, 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 the

weighted 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 is

measured 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 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.

Impairment losses are recognized in the consolidated income statement, except for debt instruments measured at fair value through other

comprehensive 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 at

fair value;

· financial guarantee contracts. After initial recognition, guarantees are subsequently measured at the higher of the expected losses and the

amount 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 of the

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.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

288

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 CO

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, unless

the 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 affect

profit 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 a financial

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 twelve 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 share

price risk, and commodity risk (mainly utility and CO

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 relationship between

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 item that 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 the same

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).

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 other

comprehensive 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 the hedged

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, the Group

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 or loss (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 the

qualifying criteria (after taking into account any rebalancing of the hedging relationship, if applicable). This includes instances when the

hedging instrument expires or is sold, terminated or exercised.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

289

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.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

290

The following table presents the financial assets and liabilities as current or non-current according to their classification under IFRS 9.

December 31, 2021 December 31, 2020

In € million Classification Carrying amount Carrying amount

Non-current assets - Financial instruments  553 346

Equity instruments measured at fair value

through other comprehensive income

Financial assets measured at fair value through

other comprehensive income

51 66

Equity instruments measured at fair value

through profit or loss

Financial assets measured at fair value through

profit or loss

Loans and other non-current assets (exclu-

ding pension fund surpluses and long-term

inventory balance)

Financial assets measured at amortized cost 252 280

Financial instruments - Operational  187

Held for trading Held for trading 108

Derivative financial instruments designated

in a cash ﬂow hedge relationship

Cash-ﬂow hedge 79

Current assets - Financial instruments  4,300 2,517

Trade receivables Financial assets measured at amortized cost 1,805 1,264

Other financial instruments  229 119

Other marketable securities >3 months Financial assets measured at amortized cost 70 42

Currency swaps Held for trading 4 1

Other current financial assets Financial assets measured at amortized cost 155 76

Financial instruments - Operational  1,326 131

Held for trading Held for trading 1,101 99

Derivative financial instruments designated

in a cash ﬂow hedge relationship

Cash-ﬂow hedge 225 32

Cash and cash equivalents Financial assets measured at amortized cost 941 1,002

Total assets - Financial instruments  4,853 2,863

Non-current liabilities - Financial instru-

ments



2,907 3,328

Financial debt  2,576 3,233

Bonds Financial liabilities measured at amortized cost 2,112 2,776

Other non-current debts Financial liabilities measured at amortized cost 55 116

Lease liabilities IFRS 16 - Non-current

portion

Lease liabilities measured at amortized cost 408 341

Other liabilities Financial liabilities measured at amortized cost 153 95

Financial instruments - Operational  178

Held for trading Held for trading 107

Derivative financial instruments desi-

gnated in a cash ﬂow hedge relationship

Cash-ﬂow hedge 71

Current liabilities - Financial instruments  4,414 1,743

Financial debt  773 287

Short-term financial debt Financial liabilities measured at amortized cost 673 185

Currency swaps Held for trading 3 10

Lease liabilities IFRS 16 - Current portion Lease liabilities measured at amortized cost 97 92

Trade payables Financial liabilities measured at amortized cost 2,131 1,197

Financial instruments - Operational  1,350 101

Held for trading Held for trading 1,118 86

Derivative financial instruments desi-

gnated in a cash ﬂow hedge relationship

Cash-ﬂow hedge 232 15

Dividends payables Financial liabilities measured at amortized cost 160 159

Total liabilities - Financial instruments  7,320 5,072

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

291

Long-term CO

inventory balances reported are not financial assets and hence are not included in the table above. They are presented as other non-

current assets (see note F25 Inventories).

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, 2021 December 31, 2020

In € million Carrying amount Carrying amount

Fair value through profit or loss 1,579 132

Held for trading (financial instruments - operational - see note F26) 1,209 99

Held for trading (other financial instruments - see note F33, table Changes in financial debt) 4 1

Derivative financial instruments designated in a cash ﬂow hedge relationship (see note F26) 304 32

Equity instruments measured at fair value through profit or loss 62

Financial assets measured at amortized cost 3,223 2,665

Financial assets measured at amortized cost (including cash and cash equivalents, trade

receivables, loans and other current/non-current assets except pension fund surpluses and

long-term inventory balance)

3,223 2,665

Financial assets measured at fair value through other comprehensive income 51 66

Equity instruments measured at fair value through other comprehensive income 51 66

Total financial assets 4,853 2,863



Fair value through profit or loss -1,531 -111

Held for trading (financial instruments - operational - see note F34) -1,225 -86

Held for trading (financial debt - see note F33, table Changes in financial debt) -3 -10

Derivative financial instruments designated in a cash ﬂow hedge relationship (see note F34) -304 -15

Financial liabilities measured at amortized cost -5,284 -4,528

Financial liabilities measured at amortized cost (excluding dividends payable and IFRS 16 lease

liabilities)

-5,124 -4,369

Dividends payables -160 -159

Lease liabilities measured at amortized cost -505 -433

Lease liabilities IFRS16 measured at amortized cost -505 -433

Total financial and lease liabilities -7,320 -5,072

The category “Held for trading” only contains derivative financial instruments that are used for management of foreign currency risk, interest rate

risk, utility and CO

emission rights price risks, index and Solvay share price. 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”. Equity instruments measured at fair value through OCI and through profit or loss pertain to Solvay’s New Business Development (NBD)

activity: the Group has built a Corporate Venturing portfolio, which consists of direct investments in start-up companies and of investments in venture

capital funds. If the Group does not have significant inﬂuence or joint control, the investments are measured at fair value according to the valuation

guidelines published by the European Private Equity and Venture Capital Association. The impacts of the direct investments are recognized in other

comprehensive income while the venture capital funds are generally recognized through the profit and loss.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

292

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 fair valued 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 based on

discounted cash ﬂow analysis.

Fair value of financial instruments measured at amortized cost (excluding IFRS 16 lease liabilities)

In € million December 31, 2021 December 31, 2020

Carrying

amount

Fair value Carrying

amount

Fair value

Non-current assets - Financial instruments  252 252  280 280

Loans and other non-current assets (except pension fund surpluses

and long-term inventory balance)



252 252  280 280

      

Non-current liabilities - Financial instruments  -2,321 -2,465  -2,988 -3,234

Bonds  -2,112 -2,256  -2,776 -3,022

Other non-current debts  -55 -55  -116 -116

Other liabilities  -153 -153  -95 -95

The carrying amounts of current financial assets and liabilities are estimated to reasonably approximate their fair values, such in light of short terms

to maturity.

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 fair value 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 through profit 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 non-

utility derivative financial instruments, and the non-derivative financial liabilities, (b) the Sustainable Development and Energy department for the

utility derivative financial instruments and (c) the Finance department for non-derivative financial assets.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

293

Financial instruments measured at fair value in the consolidated statement of financial position

December 31, 2021

In € million Level 1 Level 2 Level 3 Total

Held for trading 773 439  1,212

Foreign currency risk  7  7

Utility risk 769 429  1,198

risk 4 4

Solvay share price  2  2

Index  2  2

Equity instruments measured at fair value through profit

or loss

  62 62

New Business Development   62 62

Cash ﬂow hedges 38 266  304

Foreign currency risk  5  5

Utility risk 38 260  298

Solvay share price  1  1

Equity instruments measured at fair value through other

comprehensive income

35  17 51

New Business Development 35  17 51

Total assets 846 705 79 1,630

    

Held for trading -620 -608  -1,228

Foreign currency risk  -4  -4

Utility risk -620 -598  -1,217

risk 0 -4  -5

Index  -2  -2

Cash ﬂow hedges -232 -72  -304

Foreign currency risk  -13  -13

Utility risk -232 -59  -291

Total liabilities -852 -679  -1,531

In 2021, the fair value of the financial instruments to manage the utility risk significantly increased after an unprecedented rise in the prices of power

and gas.

Derivatives for utilities, CO

and commodities

   

2021

Amounts recognized in the statement

of financial position

Amounts by counterparty

€ in million Non-

current

Current Total Market

cleared

Negotiated

with EFET/ISDA

counterparties

Other Total

Cash ﬂow hedges 79 218 298

   

Held for trading 108 1,093 1,201

   

Total assets 187 1,312 1,499 891 390 218 1,499

Cash ﬂow hedges -71 -219 -291

   

Held for trading -107 -1,116 -1,222

   

Total liabilities -178 -1,335 -1,513 -931 -143 -439 -1,513

       

EFET = European Federation of Energy Traders (EFET), ISDA = International Swaps and Derivatives Association 

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

294

The amounts of these financial instruments are significant as they are presented gross in accordance with IAS 32. However, the credit risk remains

limited considering that:

· Most instruments are negotiated with market cleared counterparties;

· Very low risk is associated with counterparty members of the European Federation of Energy Traders or of the International Swaps and Derivatives

Association, with high credit ratings (A-1/A+).

· The amount of "Other" assets of € 218 million would reduce to € 87 million when considering offsetting clauses (close-out netting…) that do not

meet the offsetting criteria set out in IAS 32.

No significant credit value adjustment is reﬂected in these derivatives’ fair market value.

December 31, 2020

In € million Level 1 Level 2 Level 3 Total

Held for trading 48 52  100

Foreign currency risk  6  6

Utility risk 47 44  92

risk 1  1

certificates futures and forward contracts 1  1

Solvay share price  1  1

Index  1  1

Cash ﬂow hedges 1 31  32

Foreign currency risk  16  16

Utility risk 1 13  14

Solvay share price  2  2

Equity instruments measured at fair value through other

comprehensive income

  66 66

New Business Development   66 66

Total assets 49 83 66 198

    

Held for trading -39 -57  -96

Foreign currency risk  -10  -10

Interest rate risk  -1  -1

Utility risk -39 -44  -82

risk -1  -2

certificates futures and forward contracts -1  -2

Index  -1  -1

Cash ﬂow hedges -7 -8  -15

Foreign currency risk  -1  -1

Utility risk -7 -7  -14

Total liabilities -46 -65  -111

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

295

Movements of the period

Reconciliation of level 3 fair value measurements of financial assets and liabilities

December 31, 2021

At fair value through profit

or loss

At fair value through other

comprehensive income

Total

In € million Equity instruments Equity instruments 

January 1 55 11 66

Total gains or losses   

- Recognized in profit or loss 1  

- Recognized in other comprehensive income  1 1

Acquisitions 6 7 13

Capital decreases 0 0 -1

Transfers out of level 3  -2 -2

December 31 62 17 79

December 31, 2020

At fair value through profit

or loss

At fair value through other

comprehensive income

Total

In € million Derivatives Equity instruments

January 1 56 56

Total gains or losses  

- Recognized in other comprehensive income 4 4

Acquisitions 7 7

Capital decreases -1 -1

December 31 66 66

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

296

Income and expenses of financial instruments recognized in the consolidated income statement and in other comprehen-

sive income

In € million 2021 2020

Recognized in the consolidated income statement 

Recycling from OCI of derivative financial instruments designated in a cash ﬂow hedge relationship  

Foreign currency risk 9 -25

Utility risk 78 -35

Changes in the fair value of financial instruments held for trading  

Utility risk 88 -7

risk -4 -19

Recognized in the gross margin 170 -86

Recycling from OCI of derivative financial instruments designated in a cash ﬂow hedge relationship  

Foreign currency risk -6

Solvay share price -2

Changes in the fair value of financial instruments held for trading  

Solvay share price 2 -9

Gains and losses (time value) on derivative financial instruments designated in a cash ﬂow hedge

relationship

 

Foreign currency risk 1

Foreign operating exchange gains and losses 1 -1

Recognized in other operating gains and losses 3 -18

Recycling from OCI of derivative financial instruments designated in a cash ﬂow hedge relationship  

Foreign currency risk 1

Recognized in results from portfolio management and reassessments 1

Net interest expense -80 -85

Financial charge on lease liabilities -19 -21

Other gains and losses on net indebtedness (excluding gains and losses on items not related to financial

instruments)

 

Foreign currency risk -1 -2

Interest element of financial instruments 8 2

Others -7 -1

Recognized in charges on net indebtedness (*) -100 -107

Dividends from equity instruments measured at fair value through other comprehensive income 6 3

Total recognized in the consolidated income statement 80 -207

(*) The note F6 Net Financial Charges shows an amount of € (103) million for 2021 (€ (107) million for 2020) reported under “Net cost of borrowings”. This amount in-

cludes € (3) million for 2021 (€(6) million for 2020) of financial expenses not related to financial instruments that are excluded in this table from the line item “Recognized

in charges on net indebtedness”.

The gain on highly probable sales in foreign currency recognized in gross margin for € 9 million and on utility instruments for € 78 million is the result

of the recycling of gains and losses of derivative financial instruments designated in a cash ﬂow hedge relationship. The gain on utility for € 78 million

is mainly related to gas procurement for € 171 million, benzene for € 5 million and coal for € 13 million, partially offset by a loss on power procurement

for € 113 million.

The change in fair value of financial instruments held for trading recognized in gross margin is explained by:

· a gain of € 88 million (€ (7) million in 2020) mainly due to the price increase of gas and electricity;

· a loss of € (4) million (a loss of € (19) million in 2020) mainly due to the price variation of CO

;

· a gain of € 2 million (a loss of € (9) million in 2020) recognized in other operating gains and losses is the result of the change in fair value of equity

swaps for long-term incentives.

In the caption other gains and losses on net indebtedness, the gain of € 8 million (€ 2 million for 2020) is related to the interest element of financial

derivatives (forward points). This gain is partially offset by the other costs that include a one-off for € (6) million related to the early repayment of € 372.5

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

297

million on the € 750 million senior bond in December 2021.

Income and expenses on financial instruments recognized in other comprehensive income include the following:

In € million Cash ﬂow hedges

Foreign currency

risk

Interest rate risk Commodity risk Risk on Solvay

share price

Total

2021 2020 2021 2020 2021 2020 2021 2020 2021 2020

January 1 16 1 -28 2 17 -27

Recycling from other

comprehensive income of

derivative financial instruments

designated in a cash ﬂow hedge

relationship

-9 31   -78 35  2 -87 68

Effective portion of changes in

fair value of cash ﬂow hedge

-14 -17   85 -7 71 -24

December 31 -7 16 7 2 2 1 17

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 for

shareholders, maintaining an investment-grade rating, and minimizing the cost of debt.

The capital structure of the Group consists of equity (including perpetual hybrid bonds (see note F28 Equity) and of net debt (see note F33 Net

indebtedness). Perpetual hybrid bonds are nevertheless considered as debt in the Group’s Underlying metrics.

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, CO

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 in accordance

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 CO

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 a multi-specialty chemical company with operations worldwide, and hence undertakes transactions denominated in foreign currencies.

Consequently, the Group is exposed to exchange rate ﬂuctuations. In 2021, the Group was mainly exposed to US dollar, Chinese yuan, Brazilian real

and Japanese yen.

To mitigate its foreign currency risk, the Group has defined a hedging policy that is essentially based on the principles of financing its activities in

local 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).

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 2021, the EUR/USD exchange rate moved from 1.2270 at the start of January to 1.1326 at the end of December (from 1.1231 to 1.2270

in 2020).

A ﬂuctuation of (0.10) to the US$/€ exchange rate, would generate in 2021 about € 120 million (€ 100 million for 2020) variation to the EBITDA. 58% of

this variation is at conversion level and 42% 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 2021, a strengthening of the US dollar vs EUR would increase the net debt by approximately € 79 million (€ 56 million in 2020) per 0.10

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

298

US$/€ ﬂuctuation. Conversely, a weakening of the US dollar vs EUR would decrease the net debt by approximately € 66 million (€ 47 million in 2020)

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 other than

the EUR (the Group’s presentation currency).

During 2021 and 2020, 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 Group considers

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 2021, the notional amounts transacted to manage the transactional risk are:

· a short position of € (660) million (compared to € (760) million in 2020);

· a long position of € 605 million (compared to € 263 million in 2020).

This evolution is mainly explained by a significant reduction of foreign exchange risk exposure (US dollar) and internal restructuring optimization

activity (mainly Sterling pound).

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 2021 2020 2021 2020 2021 2020

Held for trading long position 605 263 3 1 -2 -2

Held for trading short position -660 -760 4 5 -2 -8

Total   7 6 -4 -10

(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 a recognized

financial asset or liability when generally no cash ﬂow hedge relationship is documented. Most hedges are transaction related.

At the end of 2021, the Group had mainly hedged highly probable sales in foreign currencies (short position) in a nominal amount of US$ 727 million

(€ 642 million) and JP¥ 9,948 million (€ 76 million). All cash ﬂow hedge contracts that exist at the end of December 2021 will be settled within the next

12 months, and will impact profit or loss during that period.

The following table details the notional amounts of Solvay’s derivatives contracts outstanding at the end of the period:

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

299

NOTIONAL AMOUNTS

December 31, 2021

In € million

Notional

amount of the

instrument

(1)

Notional

amount

of the risk

exposure

(1)

Percentage

exposure

hedged



Average hedge

exchange rate per

risk category

Cash ﬂow

hedge

reserve

Fair value of the

hedging instrument

     Equity Assets Liabilities

Cash ﬂow hedges -

Forecasted sales and

purchases

(3)



 



 

JPY/EUR -45 -110 41%  130.80 1

JPY/USD -31 -64 48%

(2)

111.66 1 1

Total JPY -76 -174    1 1

USD/BRL -146 -194 75%

(2)

5.26

USD/CNY -122 -225 54%

(2)

6.58 3 3

USD/EUR -314 -634 50%  1.18 12 12

USD/MXN -40 -89 45%

(2)

21.73 2 2

USD/THB -20 -44 45%  32.51 1 1

Total USD -642 -1,187    17 4 13

Total -718 -1,361    18 5 13

(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.

December 31, 2020

In € million

Notional

amount of the

instrument

(1)

Notional

amount

of the risk

exposure

(1)

Percentage

exposure

hedged

Average hedge

exchange rate per

risk category

Cash ﬂow

hedge

reserve

Fair value of the

hedging instrument

Equity Assets Liabilities

Cash ﬂow hedges -

Forecasted sales and

purchases

(3)



 



 

JPY/EUR -43 -91 47%  123.83 1 1 0

JPY/USD -22 -46 47%

(2)

105.24 0 0 0

Total JPY -64 -138    1 1 0

USD/BRL -98 -130 75%

(2)

5.02 0 0 0

USD/CNY -90 -185 49%

(2)

6.72 3 3 0

USD/EUR -205 -454 45%  1.16 11 11 0

USD/MXN -4 -44 10%

(2)

22.99 1 1 0

USD/THB -13 -29 45%  30.71 0 0 0

Total USD -410 -843    15 15 0

KRW/EUR -42 -42 100%  1,313.80 1 1 0

Total KRW -42 -42    1 1 0

Total -517 -1,023    16 16 -1

(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 2021

(3) The Hedging instruments are located in the line item: "Other Receivables" and "Other Liabilities" in the statement of financial position.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

300

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 is

managed 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, 2021 December 31, 2020

Currency Fixed rate Floating rate Total Fixed rate Floating rate Total

Financial debt      

EUR -1,923 -18 -1,941 -2,119 -56 -2,175

USD -1,246 -23 -1,269 -1,157 -7 -1,164

SAR  -18 -18  -54 -54

INR -39 -39 -26 -1 -27

KRW -21 -1 -22 -24 -2 -26

THB -11 -11 -17 -5 -22

BRL -9 -2 -11 -13 -13

Other -28 -8 -37 -32 -7 -39

Total -3,277 -71 -3,349 -3,387 -132 -3,520

Cash and cash equivalents      

EUR  206 206  215 215

USD  458 458  534 534

CAD  5 5  3 3

THB  36 36  34 34

SAR  15 15  7 7

BRL  53 53  73 73

CNY  35 35  43 43

KRW  7 7  27 27

JPY  33 33  20 20

Other  93 93  48 48

Total  941 941  1,002 1,002

Other financial instruments      

CNY  70 70  42 42

EUR  160 160  55 55

SAR  21 21  16 16

Other  8 8  6 6

Total  259 259  119 119

      

Total -3,277 1,128 -2,149 -3,387 989 -2,398

At the end of 2021, approximately € 3.3 billion of the Group’s gross debt was at fixed-rate, and is largely comprised of:

· Senior EUR Bonds for a total of € 1,478 million maturing in 2022, 2027 and 2029 (carrying amount of € 1,470 million);

· Remaining part (US$ 196 million) of the US$ Senior Bonds 2023 of US$ 400 million (carrying amount of € 172 million);

· Remaining part (US$ 163 million) of the US$ Senior Bonds 2025 of US$ 250 million (carrying amount of € 143 million);

· Senior US$ Bonds for a total of US$ 800 million (carrying amount of € 704 million);

· IFRS 16 lease liability for a total of € 505 million (carrying amount of € 505 million).

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

301

The ﬂoating rate debts that are subject to interest rate swaps are discussed below.

The impact of interest rate volatility at the end of 2021 compared to 2020 is the following:

Sensitivity to a + 100bp movement in EUR

market interest rates

Sensitivity to a - 100bp movement in

EUR market interest rates

In € million 2021 2020 2021 2020

Profit or loss -1 1

The sensitivity to interest rates’ volatility remains stable at the end of 2021 compared to 2020. The ﬂoating rate debt is very limited and part of it is

hedged by interest rate swaps and cross-currency interest rate swaps reducing even more its volatility.

Interest rate risk hedged by instrument accounted for as held for trading

In € million

Notional amount Fair value assets Fair value liabilities

December 31 2021 2020 2021 2020 2021 2020

Held for trading 18 48 -1

Total 18 48 -1

The fair value reported under “held for trading” is mainly explained by a cross currency swap contracted in May 2017 to mitigate the volatility (forex

and interest rate) of the external financing set up for our HPPO joint operation (Saudi Hydrogen Peroxide Company) 50/50 with Sadara in Saudi Arabia

(notional amount € 18 million corresponding to 50%).

Interest rate risk hedged by instrument accounted for as a hedging instrument in a cash ﬂow hedge

In 2021, there are no outstanding interest rate instruments accounted for under cash ﬂow hedges. The hedged item (ﬂoating rate debt) presented in

2020 and the dedicated hedging instruments were all settled in the course of 2021.

December 31, 2020

Notional amount of

the instrument

(1)

Notional amount

of the risk

exposure

(2)

Hedge interest

rate per risk

category

Fair value of the hedging

instrument

In € million Assets Liabilities

Cash ﬂow hedges - Floating rate debt -5 -9 

Pay Fix 3.125%

Receive THBFIX6M

Total -5 -9  

(1) The hedging instruments are located in the line item: "Other Receivables" and "Other Liabilities" in the consolidated statement of financial position.

(2) The hedging item is located in the line item: "Current financial debt" in the consolidated statement of financial position.

Other market risks

— Utility and CO

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 (e.g. benzene). 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 (not derivatives) and constitute a natural hedge. Those have not been

included in this note.

Similarly, the Group's exposure to CO

price is partially hedged by forward purchases of European Union Allowances (EUA). Forward purchases with

physical delivery for use in the Group's operations are qualified as own use contracts (not derivatives).

Finally, some exposure to gas, coal and electricity prices may arise from the production of electricity on Solvay sites (mostly from cogeneration units

in Europe), which can be hedged by means of forward purchases and forward sales or optional schemes. In this case, cash ﬂow hedge accounting is

applied.

Financial hedging of utility and CO

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 CO

(see Business Review).

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

302

The following tables detail the notional principal amounts and fair values of utility and CO

derivative financial instruments outstanding at the end of

the reporting period:

Held for trading

Notional amount of

the instrument

(1)

Notional amount of the instrument

(in units)

Fair value of the

instrument - Asset

Fair value of the

instrument - Liability

December 31 2021 2020 2021 2020 2021 2020 2021 2020

In € million (except where indicated)

Coal 1  24,008 Tons 

Power 1,189 619 21,005,859 19,565,300 MWh 764 54 -781 -51

Standard Quality Gas 613 317 27,701,363 22,730,352 MWh 434 34 -437 -31

11 12 206,294 421,395 Tons 4 4 -5 -2

Total 1,813 949    1,202 92 -1,223 -84

(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 sourced through Energy Services, and not the

full Group utility hedging needs.



December 31, 2021

Cash

ﬂow

hedge

Notional

amount

of the

instru-

ment

(1)

Notional

amount of

the instru-

ment (in

units)

 Notional

amount

of the risk

exposure

Notional

amount

of the risk

exposure (in

units)

 Percen-

tage of

exposure

hedged

Average

hedge

price

per risk

catego-

 Cash

ﬂow

hedge

reserve

Fair value

of the ins-

trument

- Asset

Fair

value

of the

instru-

ment -

Liability

In € million (except where indicated)

Benzene 1 1,477 Tons 1 1,479 Tons 100% 556 EUR/ton

Coal 17 243,000 Tons 62 702,041 Tons 35% 77 USD/ton 5 6 -1

Power 154 2,506,335 MWh 607 3,591,600 MWh 70% 62

EUR/

MWh

-270 1 -271

Standard

Quality

Gas

254 13,648,389 MWh 954 24,096,508 MWh 57% 19

EUR/

MWh

273 291 -18

Total 426   1,625      8 298 -290

(1) The hedging instruments are located in the line item: "Other Receivables" and "Other Liabilities" in the consolidated statement of financial position.



December 31, 2020



Cash

ﬂow

hedge

Notional

amount

of the

instru-

ment

(1)

Notional

amount of

the instru-

ment (in

units)

 Notional

amount

of the risk

exposure

Notional

amount

of the risk

exposure (in

units)

 Percen-

tage of

exposure

hedged

Average

hedge

price

per risk

catego-

 Cash

ﬂow

hedge

reserve

Fair value

of the ins-

trument

- Asset

Fair

value

of the

instru-

ment -

Liability



In € million (except where indicated) 

Benzene 9 18,495 Tons 39 73,728 Tons 25% 509 EUR/ton 1 1

Coal 28 499,992 Tons 53 917,127 Tons 55% 68 USD/ton 1 1

Power 108 2,125,309 MWh 180 3,246,896 MWh 65% 50

EUR/

MWh

-7 1 -8

Standard

Quality

Gas

158 12,343,308 MWh 335 24,601,786 MWh 50% 15

EUR/

MWh

5 11 -6

Total 303   607

    

14 -14

(1) The hedging instruments are located in the line item: "Other Receivables" and "Other Liabilities" in the consolidated statement of financial position.

Performance Share Units Plan (PSU) risk on Solvay share price

In order to neutralize the volatility of the Solvay share price, which will impact the liability valuation relating to the PSUs (with related employer

charges), the Group entered into equity swaps covering approximately 90% of the risk. In 2021, a liability of € 24 million recognized for 2020 and 2021

PSU plans (in 2020, € 8 million for the 2020 PSU plan) corresponds to the best estimate of the amount due at maturity.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

303

Credit risk

See the Financial risk in the Management of risks section of this annual report for additional information on the 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, see

note 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 historical

information 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 ageing balance of receivables. As such, for all receivables overdue below 6 months, the Group considers percentages within a range

between 0.005% and 4.419%, depending on the rating class. For all receivables overdue in excess of 6 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.

The ageing of trade receivables, financial instruments - operational, loans and other non-current assets is as follows:

December 31, 2021



With expected loss allowance, not credit-impaired

In € million

Total Credit-

impaired

not past

due

less than 30

days past

due

between 30

and 60 days

past due

between 60

and 90 days

past due

than 90

days past

due

Trade receivables 1,857 50 1,765 36 2 1 3

Trade receivables - allowance -51 -49 -2    -1

Trade receivables - net 1,805 2 1,763 36 2 1 2

Financial instruments - operational 1,513  1,513    

Loans and other non-current assets 511 11 500   

Loans and other non-current assets

- allowance

-11 -11     

Loans and other non-current

assets - net

500 500

Total 3,818 2 3,776 36 2 1 2

The Loans and other non-currents assets do not include the long-term inventory balance.

December 31, 2020  With expected loss allowance, not credit-impaired

In € million

Total Credit-

impaired

not past

due

less than 30

days past

due

between 30

and 60 days

past due

between 60

and 90 days

past due

than 90

days past

due

Trade receivables 1,304 39 1,222 38 3 1 1

Trade receivables - allowance -39 -36 -2    -2

Trade receivables - net 1,264 4 1,220 38 3 1 -1

Financial instruments -

operational

131  131    

Loans and other non-current

assets

368 124 243   

Loans and other non-current

assets - allowance

-57 -57     

Loans and other non-current

assets - net

311 68 243

Total 1,706 71 1,594 38 3 1 -1

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

304

The table below presents the allowances on trade receivables:

In € million

2021 2020

January 1 -39 -46

Additions -19 -8

Uses 5 4

Reversal 2 3

Currency translation differences 5

Transfer to assets held for sale 2

Other 1

December 31 -51 -39

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.

The Finance Committee gives its opinion on the appropriate liquidity risk management for the Group’s short, medium and long term funding and

liquidity 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 be required

to pay.

The following tables present discounted amounts (carrying amounts):

In € million December 31, 2021

Outﬂows of cash : Total Within one year In year two In years three

to five

Beyond five years

Trade liabilities 2,131 2,131   

Dividends payables 160 160   

Financial instruments - operational 1,528 1,350 10 168 

Other non-current liabilities 153  25 78 49

Financial debt 2,844 676 187 873 1,108

Leasing debt 505 97 70 159 179

Total 7,320 4,413 292 1,278 1,336

In € million December 31, 2020

Outﬂows of cash : Total Within one year In year two In years three

to five

Beyond five years

Trade liabilities 1,197 1,197   

Dividends payables 159 159   

Financial instruments - operational 101 101   

Other non-current liabilities 95  36 22 38

Financial debt 3,086 194 809 966 1,117

Leasing debt 433 92 70 134 138

Total 5,072 1,743 914 1,122 1,292

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

305

The following tables present undiscounted amounts (nominal value):

In € million December 31, 2021

Outﬂows of cash : Total Within one

year

In year two In years three

to five

Beyond five

years

Trade liabilities 2,131 2,131   

Dividends payables 160 160   

Financial instruments - operational 1,528 1,350 10 168 

Other non-current liabilities 153  25 78 49

Financial debt 2,856 677 188 877 1,115

Leasing debt 505 97 70 159 179

Total 7,333 4,414 293 1,282 1,343

Interests on financial debt and lease liabilities 379 86 74 158 62

Total outﬂows of cash 7,712 4,500 367 1,439 1,405

In € million

December 31, 2020

Outﬂows of cash : Total Within one

year

In year two In years three

to five

Beyond five

years

Trade liabilities 1,197 1,197   

Dividends payables 159 159   

Financial instruments - operational 101 101   

Other non-current liabilities 95  36 22 38

Financial debt 3,107 194 812 976 1,125

Leasing debt 433 92 69 134 138

Total 5,092 1,743 917 1,131 1,301

Interests on financial debt and lease liabilities 447 89 88 190 81

Total outﬂows of cash 5,539 1,832 1,005 1,321 1,381

Solvay’s liquidity exceeds € 4 billion including € 941 million of cash and cash equivalents on the statement of financial position and €2.9 billion of

committed fully undrawn credit facilities (€ 2 billion multilateral RCF due 2024, and € 0.9 billion bilateral RCF, largely multi-year) unused at the end of

December 2021.

In addition, Solvay has access to a Belgian Treasury Bill program for € 1.5 billion and, alternatively, to a US commercial paper for $ 500 million (no

outstanding balance for both on December 31, 2021). The two programs are covered by back-up credit lines.

NOTEF33

NET INDEBTEDNESS

The Group’s net indebtedness is the balance between its financial debts and other financial instruments, and cash and cash equivalents.

In € million

December 31, 2021 December 31, 2020

Financial debt 3,349 3,519

Cash and cash equivalents -941 -1,002

Other financial instruments -259 -119

Net indebtedness 2,149 2,398

The decrease in the net indebtedness is mainly due to the strong free cash ﬂow generation.

Solvay Investment Grade rating is Baa2/P2 (stable outlook) with Moody’s and BBB/A2 (stable outlook) with Standard & Poor’s.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

306

Financial debt: main borrowings

December 31, 2021 December 31, 2020

In € million (except where

indicated)

Nominal

amount

Coupon Maturity Secured Amount at

amortized

cost

Fair

value

Amount at

amortized cost

Fair

value

Senior € notes 378 1.625% 2022 No 377 382 747 773

Senior US$ note Cytec

Industries Inc (issuance US$

400 million)

173 3.5% 2023 No 172 177 156 165

Senior US$ note Cytec

Industries Inc (issuance US$

250 million)

144 3.95% 2025 No 143 153 131 141

Senior US$ notes (144A;US$

800 million)

706 4.45% 2025 No 704 769 650 745

Senior € notes 500 2.75% 2027 No 497 564 497 587

Senior € notes 600 0.500% 2029 No 596 593 596 611

Total     2,489 2,638 2,776 3,022

There are no instances of default on the above-mentioned financial debts. There are no financial covenants, neither on Solvay SA, nor on any of the

Group’s holding companies.

Other financial instruments

In € million December 31, 2021 December 31, 2020

Non-current other financial instruments 30

Current other financial instruments 229 119

Currency swaps 4 1

Other marketable securities > 3 months 70 42

Other current financial assets 155 76

Other financial instruments 259 119

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

In € million

December 31, 2021 December 31, 2020

Cash 620 547

Term deposits 320 455

Cash and cash equivalents 941 1,002

By their nature, the carrying amount of cash and cash equivalents is equal to, or a very good proxy of, its fair value.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

307

Changes in financial debt and in other financial instruments arising from financing activities

2020 2021

In € million

Total Cash ﬂows

from in-

crease of

borrowings

Cash ﬂows

from re-

payment of

borrowings

Changes

in foreign

exchange

rates

Changes

in other

current

financial

assets

Other in

financing

cash

ﬂows

Trans-

fer from

non-current

to current

Pay-

ment

of lease

liabilities

Other Total

Bonds 2,776  -372 78  -377  7 2,112

Other non-

current debts

116 21 -25 2  -58  55

Long term

leasing debt

341   15   -101  154 409

Non-current

financial debt

3,233 21 -397 95 -536 161 2,576

Current

financial debt

287 227 -217 5 108 536 -99 -74 773

Total financial

debt

3,520 248 -614 100 108 -99 87 3,350

Other non-

current financial

instruments

    -30     -30

Currency swaps -1 0  -3 -4

Other

marketable

securities > 3

months

-42 -6 -21 -70

Other current

financial assets

-76 -1 -78 -155

Other financial

instruments

-119 -7 -100 -2 -229

Total cash ﬂow  248 -614 92 -130 108 -99 85 -310

The financial debt decreased from €3,519 million at the end of 2020 to €3,350 million at the end of 2021.

The non-current financial debt decreased by € (657) million, mainly resulting from:

· the repayment in December 2021 of € (372.5) million of the € 750 million bonds maturing initially in 2022;

· the transfer to current financial debt for € (536) million (mainly explained by the remaining portion of the € 750 million bond maturing in December

2022 for € 377 million and IFRS 16 leases for € 101 million);

· the change in foreign exchange rates for € 95 million (major impact of € 78 million on senior bonds in USD);

· the € 154 million in “Other” mainly relates to leases that commenced during the year, as well as lease modifications.

The current financial debt increased by € 487 million, mainly in short term financial debt:

· the transfer from non-current financial debt to current for € (536) million (mainly explained by the remaining portion of the € 750 million bond

maturing in December 2022 for € 377 million and IFRS 16 leases for € 101 million);

· the increase and decrease of borrowings is mainly explained by the drawdown on a 6-month term loan for € 150 million, fully repaid in September

2021;

· the increase of € 108 million of margin calls on hedging instruments as part of Energy Services’ activities;

· the repayment of short term finance lease obligations under IFRS 16 of € (99) million.

The other financial instruments increased by € 110 million, mainly for the collateral related to the margins call on energy services (see note F33 Net

indebtedness), following in the increase in the energy and gas prices.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

308

NOTEF34

OTHER LIABILITIES (CURRENT)

In € million

December 31, 2021 December 31, 2020

Wages and benefits debts 303 275

VAT and other taxes 153 104

Social security 58 60

Financial instruments - operational 1,350 101

Insurance premiums 19 12

Advances from customers 91 42

Other 76 126

Other current liabilities 2,051 720

The Other current liabilities at the end of 2020 include an amount of € 52 million due to EBRD for which a Call Option Notice was sent early 2021.

Financial instruments – operational include held for trading and cash ﬂow hedge derivatives (see noteF32.A. Overview of financial instruments).

MISCELLANEOUS NOTES

NOTEF35

COMMITMENTS TO ACQUIRE PROPERTY, PLANT AND EQUIPMENT

AND INTANGIBLE ASSETS

In € million

December 31, 2021 December 31, 2020

Commitments to acquire property, plant and equipment and intangible assets 301 169

The amount mainly relates to commitments for the acquisition of property, plant and equipment. The increase in 2021 over the prior year is primarily

driven by the planned € 84 million purchase of railcars in the US over the next several years.

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, the Group discloses

the contingent asset.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

309

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 are

disclosed 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 are presented in this note.

In € million

December 31, 2021 December 31, 2020

Contingent assets 91 

Financial guarantees Rusvinyl 83 84

Guarantees for pensions 348 335

Environmental contingent liabilities 301 301

Contingent liabilities 733 720

Contingent Asset

Following a legal proceeding started in 2012, the Arbitration Court of Geneva issued on June 22, 2021, a decision award in favor of Solvay, ordering

Edison S.p.A. to pay approximately € 91 million for the losses and damages incurred up to the end of 2016 in relation to the environmental issues of

the Spinetta Marengo and Bussi sites, previously owned and operated by Edison (Ausimont) SpA. A further phase of the arbitration proceeding or an

amicable settlement will define the compensation for the additional losses and damages from 2017 onwards, as well as the interests applicable to the

amount awarded and the costs of litigation. No income was recognized during 2021 in relation to the award, pending the enforcement procedures

of the arbitration, to which Edison appealed.

Contingent Liabilities

Financial guarantees related to Rusvinyl, the joint venture with SIBUR for the operation of a PVC plant in Russia, amount to € 83 million at December

31, 2021 (€ 84 million at the end of 2020). Those guarantees have been given on the basis of several liability by both shareholders, Solvin/Solvay and

SIBUR, proportionate to their equity interest (50/50). In light of Rusvinyl’s demonstrated capacity to honor its debt obligations, the probability of the

guarantees being called is considered to be highly remote.

The guarantees for pensions are related to the main UK Pension Funds (€ 348 million) – See note F31.B.2. Description of obligations. Such corresponds

to the amount by which the guarantee exceeds the recognized pension liability (as at December 31, 2020) or the recognized plan assets surplus

(€68million as per December 31, 2021). This guarantee applies to the pension liability measured based on a local UK regulatory basis (prudential

basis) plus an allocation 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.

Contingent liabilities of € 301 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 proceeding, which has not matured, and where the probability

of existing or future exposure is unlikely or uncertain, where financial impact is not estimable and for which no contingent liabilities are able to be

quantified. Additional information about litigation matters can be found in the Risk Report.

In the United States, Solvay Specialty Polymers USA, LLC (SpP) is a defendant in several litigation matters relating to per- and polyﬂuoroalkyl substances

(PFAS) commenced by governmental entities or private plaintiffs, including claims sounding in products liability, putative class action, environmental

cleanup, natural resource damages, civil penalties, and/or medical monitoring.

One of the litigation cases involves claims by the New Jersey Department of Environmental Protection seeking, among other things, natural resource

damages, civil penalties and environmental cleanup arising out of SpP's facility in West Deptford, New Jersey.

The company is vigorously defending all such matters, which are in their early stages.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

310

In Italy, criminal preliminary investigations are pending before the Criminal Court of Livorno and Alessandria, regarding the contamination of certain

areas outside the industrial sites of Rosignano and Spinetta, respectively. An administrative litigation is pending related to the identification of the

polluter of the industrial site of Bussi and related external areas, sold by Solvay in 2016 and 2017.

Based on the overall assessment, including compliance with applicable laws and regulations and the unlikely or uncertain probability of existing or

future exposure, as well as undefined financial impact, which is not estimable at this time, no additional provisions have been recorded in association

with these litigations and contingent liabilities cannot be quantified.

NOTEF37

RELATED PARTIES

Balances and transactions between SolvaySA 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, 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

2021 2020 2021 2020

Associates 13 9 -34 -18

Joint ventures 22 37 -16 -14

Other related parties 70 34 -56 -68

Total 106 81 -107 -100

In € million Amounts owed by related parties Amounts owed to related parties

December 31 2021 2020 2021 2020

Associates 1 5

Joint ventures 1 1 1

Other related parties 16 13 8 5

Total 16 15 14 6

Loans to related parties

In € million December 31, 2021 December 31, 2020

Loans to joint ventures 5

Loans to other related parties 24 29

Total 24 34

Compensation of key management personnel

Key management personnel is 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 obligations existing at the end of the year in the consolidated statement of financial position:

In € million

December 31, 2021 December 31, 2020

Wages, charges and short-term benefits 3 3

Long-term benefits 1 1

Cash-settled share-based payments liability 3 2

Total 7 6

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

311

Expenses of the year:

In € million

2021 2020

Wages, charges and short-term benefits -10 -9

Termination benefit -5 

Long-term benefits -2 -2

Share-based payments expenses -4 -1

Total -21 -11

Excluding employer social charges and taxes

Please refer to the Compensation Report for further details

NOTEF38

DIVIDENDS PROPOSED FOR DISTRIBUTION

The Board of Directors will propose to the “General Shareholders’ Meeting” a gross dividend of € 3.85 per share.

Taking into account the dividend advance payment distributed in January2022 of €1.50 per share, the dividends proposed for distribution, but not

yet recognized as a distribution to equity holders amount to €249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) are

recognized 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.

On February 1, 2022, the Group announced a € 300 million investment to support a fully integrated and digitalized PVDF operation, which will increase

capacity at Solvay's site in Tavaux, France to 35 kilotons – making it the largest PVDF production site in Europe.This investment will be completed

by December 2023 and reinforces Solvay’s global leadership in this field, positioning it to capitalize on the growing demand for electric and hybrid

vehicles.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

312

NOTEF40

LIST OF COMPANIES INCLUDED IN THE CONSOLIDATION SCOPE

The Group consists of SolvaySA and a total of 297 investees.

Of these 298investees, 151 are fully consolidated, 7 are proportionately consolidated and 24 are accounted for under the equity method, whilst the

other 116 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

UNITED ARAB EMIRATES Cytec Nibras LLC, Al Ain Meets the consolidation criteria



Strata - Solvay Advanced Materials Joint-Venture LLC, Al Ain Meets the consolidation criteria

UNITED STATES American Soda LLC, Houston, TX New company

TAIWAN Shinsol Advanced Chemicals Corporation, New Taipei New company

Companies leaving the consolidation scope

Country

Company

Comments

FRANCE Solvay - Fluorés - France S.A.S., Paris Merged into Solvay France S.A.



Solvin France S.A., Paris Merged into Solvay France S.A.



Solvay Specialty Polymers France S.A.S., Paris Merged into Solvay France S.A.



Cytec Process Materials Sarl, Toulouse Sold to Composites One LLC

GERMANY Solvay Infra Bad Hoenningen GmbH, Hannover Sold to Latour Capital



Solvay Persalze Gmbh, Hannover Sold to Latour Capital



Solvay P&S GmbH Sold to Opengate Capital



Solvay & CPC Barium Strontium GmbH & Co KG, Hannover Sold to Latour Capital



Solvay & CPC Barium Strontium International GmbH, Hannover Sold to Latour Capital

INDIA Sunshield Chemicals Limited, Mumbai Sold to Indus Petrochem Ltd

ITALY Cytec Process Materials S.r.l., Mondovi Sold to Composites One LLC

MEXICO

Solvay & CPC Barium Strontium Monterrey S. de R.L. de C.V., Mon-

terrey

Sold to Latour Capital

PORTUGAL Solvay Portugal - Produtos Quimicos S.A., Povoa Sold to Algora

SOUTH KOREA Daehan Solvay Special Chemicals Co., Ltd, Seoul Sold to KNW Co



Solvay Korea Co. Ltd, Seoul Sold to KNW Co



Solvay Energy Services Korea Co. Ltd , Seoul Liquidated

UNITED KINGDOM Cytec Med-Lab Ltd, Heanor Sold to Composites One LLC



Cytec Process Materials (Keighley) Ltd, Keighley Sold to Composites One LLC

UNITED STATES Cytec Aerospace Materials (ca) Inc., Sacramento California Merged into Cytec Industries Inc.



Cytec Process Materials (ca) Inc., Santa Fe Springs California Sold to Composites One LLC

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

313

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

Solvay Quimica SA, Buenos Aires 100

AUSTRALIA 

Cytec Asia Pacific Holdings Pty Ltd, Baulkham Hills 100

Cytec Australia Holdings Pty Ltd, Baulkham Hills 100

Solvay Interox Pty Ltd, Banksmeadow 100

AUSTRIA 

Solvay Österreich GmbH, Wien 100

BELGIUM 

Carrières les Petons S.P.R.L., Walcourt 100

Solvay Chemicals International S.A., Brussels 100

Solvay Chimie S.A., Brussels 100

Solvay Participations Belgique S.A., Brussels 100

Solvay Pharmaceuticals S.A. - Management Services, Brussels 100

Solvay Specialty Polymers Belgium SA / NV, Brussels 100

Solvay Stock Option Management S.P.R.L., Brussels 100

BRAZIL 

Cogeracao de Energia Electricica Paraiso 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 

Cytec Canada Inc, Niagara Falls Welland 100

Solvay Canada Inc, Toronto 100

CHINA 

Cytec Industries Co. Ltd, Shanghai 100

Cytec Engineered Materials Co. Ltd, Shanghai 100

Liyang Solvay Rare Earth New Material Co., Ltd, Liyang City 96.3

Rhodia Hong Kong Ltd , Hong Kong 100

Solvay (Shanghai) International Trading Co., Ltd, Shanghai 100

Solvay (Shanghai) Ltd, Shanghai 100

Solvay (Zhangjiangang) Specialty Chemicals Co. Ltd, Suzhou 100

Solvay (Zhenjiang) Chemicals Co., Ltd, Zhenjiang New area 100

Solvay Chemicals (Shanghai) Co. Ltd, Shanghai 100

Solvay China Co., Ltd , Shanghai 100

Solvay Fine Chemical Additives (Qingdao) Co., Ltd, Qingdao 100

Solvay Hengchang (Zhangjiagang) Specialty Chemical Co., Ltd, Zhangjiagang City 70

Solvay Lantian (Quzhou) Chemicals Co., Ltd, Zhejiang 55

Solvay Specialty Polymers (Changshu) Co. Ltd, Changshu 100

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

314

Zhuhai Solvay Specialty Chemicals Co Ltd, Zhuhai City 100

CHILE 

Cytec Chile Ltda, Santiago 100

FINLAND 

Solvay Chemicals Finland Oy, Voikkaa 100

FRANCE 

Cogénération Tavaux SAS, Paris 33.3

Rhodia Chimie S.A.S. , Aubervilliers 100

Rhodia Energy GHG S.A.S. , Puteaux 100

Rhodia Laboratoire du Futur S.A.S. , Pessac 100

Rhodia Operations S.A.S. , Aubervilliers 100

Rhodia Participations S.N.C. , Courbevoie 100

Rhodianyl S.A.S. , Saint-Fons 100

Solvay - Opérations - France S.A.S., Paris 100

Solvay Energie France S.A.S., Paris 100

Solvay Energy Services S.A.S. , Puteaux 100

Solvay Finance S.A., Paris 100

Solvay France S.A. , Courbevoie 100

GERMANY 

Cavity GmbH, Hannover 100

Cytec Engineered Materials GmbH, Oestringen 100

European Carbon Fiber GmbH , Kelheim 100

Horizon Immobilien AG, Hannover 100

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

Solvay GmbH, Hannover 100

Solvay Specialty Polymers Germany GmbH, Hannover 100

Solvin GmbH & Co. KG - PVDC, Rheinberg 100

Solvin Holding GmbH, Hannover 100

INDIA 

Solvay Specialities India Private Limited, Mumbai 100

INDONESIA 

PT. Cytec Indonesia, Jakarta 100

IRELAND 

Solvay Finance Ireland Unlimited , Dublin 100

ITALY 

Solvay Chimica Italia S.p.A., Milano 100

Solvay Energy Services Italia S.r.l., Bollate 100

Solvay Solutions Italia S.p.A. , Milano 100

Solvay Specialty Polymers Italy S.p.A., Milano 100

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

315

JAPAN 

Nippon Solvay KK, Tokyo 100

Solvay Japan K.K., Tokyo 100

Solvay Nicca Ltd, Tokyo 60

Solvay Special Chem Japan Ltd, Anan City 67

Solvay Specialty Polymers Japan KK, Minato Ku-Tokyo 100

LATVIA 

Solvay Business Services Latvia SIA, Riga 100

LUXEMBOURG 

Cytec Luxembourg International Holdings Sarl, Strassen 100

Solvay Chlorovinyls Holding S.a.r.l., Luxembourg 100

Solvay Finance (Luxembourg) SA, Luxembourg 100

Solvay Hortensia S.A., Luxembourg 100

Solvay Luxembourg S.a.r.l., Luxembourg 100

MEXICO 

Cytec de Mexico S.A. de C.V., Jalisco 100

Solvay Fluor Mexico S.A. de C.V., Ciudad Juarez 100

Solvay Mexicana S. de R.L. de C.V., Monterrey 100

NETHERLANDS 

Cytec Industries B.V., Vlaardingen 100

Rhodia International Holdings B.V., Den Haag 100

Solvay Chemicals and Plastics Holding B.V., Linne-Herten 100

Solvay Chemie B.V., Linne-Herten 100

Solvay Solutions Nederland B.V., Klundert 100

Solvin Holding Nederland B.V., Linne-Herten 100

NEW ZEALAND 

Solvay New Zealand Ltd, Auckland 100

PERU 

Cytec Peru S.A.C., Lima 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

RUSSIA 

Solvay Vostok OOO, Moscow 100

SINGAPORE 

Rhodia Amines Chemicals Pte Ltd , Singapore 100

Solvay Fluor Holding (Asia-Pacific) Pte. Ltd., Singapore 100

Solvay Specialty Chemicals Asia Pacific Pte. Ltd., Singapore 100

SOUTH KOREA 

Cytec Korea Inc, Seoul 100

Solvay Chemical Services Korea Co. Ltd, Seoul 100

Solvay Silica Korea Co. Ltd , Incheon 100

Solvay Specialty Polymers Korea Company Ltd, Seoul 100

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

316

SPAIN 

Solvay Quimica S.L., Barcelona 100

SWITZERLAND 

Solvay Vinyls Holding AG, Bad Zurzach 100

THAILAND 

Solvay Asia Pacific Company Ltd, Bangkok 100

Solvay (Bangpoo) Specialty Chemicals Ltd, Bangkok 100

Solvay (Thailand) Ltd, Bangkok 100

Solvay Peroxythai Ltd, Bangkok 100

TURKEY 

Solvay Istanbul Kimya Limited Sirketi, Istanbul 100

UNITED ARAB EMIRATES 

Cytec Nibras llc, Al Ain 100

UNITED KINGDOM 

Advanced Composites Group Investments Ltd, Heanor 100

Cytec Engineered Materials Ltd, Wrexham 100

Cytec Industrial Materials (Derby) Ltd, Heanor 100

Cytec Industrial Materials (Manchester) Ltd, Heanor 100

Cytec Industries UK Holdings Ltd, Wrexham 100

McIntyre Group Ltd , Watford 100

Rhodia Holdings Ltd , Watford 100

Rhodia International Holdings Ltd , Oldbury 100

Rhodia Limited , Watford 100

Rhodia Organique Fine Ltd , Watford 100

Rhodia Overseas Ltd , Watford 100

Rhodia Pharma Solutions Holdings Ltd, Cramlington 100

Rhodia Pharma Solutions Ltd, Cramlington 100

Rhodia Reorganisation, Watford 100

Solvay Interox Ltd, Warrington 100

Solvay Solutions UK Ltd, Watford 100

Solvay UK Holding Company Ltd, Warrington 100

Umeco Composites Ltd, Heanor 100

Umeco Ltd, Heanor 100

UNITED STATES 

American Soda LLC, Houston, Texas 100

Ausimont Industries, Inc., Wilmington, Delaware 100

CEM Defense Materials LLC, Tempe Arizona 100

Cytec Engineered Materials Inc., Princeton New Jersey 100

Cytec Global Holdings Inc., Princeton New Jersey 100

Cytec Industrial Materials (ok) Inc., Tulsa Oklahoma 100

Cytec Industries Inc, Princeton New Jersey 100

Cytec Korea Inc., Princeton New Jersey 100

Cytec Technology Corp., Princeton New Jersey 100

Garret Mountain Insurance Co., Burlington Vermont 100

Rocky Mountain Coal Company, LLC, Houston, Texas 100

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

317

Solvay America Holdings, Inc., Houston, Texas 100

Solvay America Inc., Houston, Texas 100

Solvay Chemicals, Inc., Houston, Texas 100

Solvay Finance (America) LLC, Houston, Texas 100

Solvay Fluorides, LLC., Greenwich, Connecticut 100

Solvay Holding Inc., Princeton, New Jersey 100

Solvay India Holding Inc., Princeton, New Jersey 100

Solvay Soda Ash Expansion JV, Houston, Texas 80

Solvay Soda Ash Joint Venture, Houston, Texas 80

Solvay Specialty Polymers USA, LLC, Alpharetta, Georgia 100

Solvay USA INC., Princeton, New Jersey 100

URUGUAY 

Zamin Company S/A, Montevideo 100

List of joint operations

Indicating the percentage holding.

AUSTRIA

Solvay Sisecam Holding AG, Wien 75

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

THAILAND 

MTP HP JV (Thailand) Ltd, Bangkok 50

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

318

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

BELGIUM 

EECO Holding SA, Brussels 33.3

BRAZIL 

Peroxidos 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

INDIA 

Hindustan Gum & Chemicals Ltd, New Delhi 50

IRELAND 

Aqua Pharma Ireland Ltd, Dublin 50

ITALY 

Cogeneration Rosignano S.r.l., Rosignano 25.4

Cogeneration Spinetta S.p.a., Bollate 33.3

NORWAY 

Aqua Pharma Group A.S., Lillehammer 50

Aqua Pharma A.S., Lillehammer 50

Haugaland Shipping A.S., Haugesund 50

RUSSIA 

Rusvinyl OOO, Moscow 50

TAIWAN 

Shinsol Advanced Chemicals Corporation, New Taipei 51

UNITED ARAB EMIRATES 

Strata - Solvay Advanced Materials Joint-Venture LLC, Al Ain 50

UNITED KINGDOM 

Aqua Pharma Technical Ltd, Inverness 50

Aqua Pharma Ltd, Inverness 50

UNITED STATES 

Aqua Pharma U.S. Inc, Kirkland 25

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

319

Associates

CHINA

Qingdao Hiwin Solvay Chemicals Co. Ltd, Qingdao 30

FRANCE



GIE Chime Salindres, Salindres 50

INDONESIA



Solvay Manyar P.T., Gresik 50

MEXICO



Silicatos y Derivados S.A. DE C.V., Estado de Mexico 20

UNITED KINGDOM



Penso Holdings Ltd, Coventry 20

3. SUMMARY FINANCIAL STATEMENTS OFSOLVAYSA

The annual financial statements of SolvaySA are presented in summary format below. In accordance with theBelgian Companies Code, the annual

financial statements of SolvaySA, 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

Rue

de Ransbeek 310

B– 1120 Brussels

The balance sheet of Solvay SA at the end of the year 2021 presented below is based on a dividend distribution of €3.85 per share.

At the end of 2021, Solvay SA has still one Branch, Solvay S.A. Italia (Viale Lombardia 20, 20021 Bollate, Italy).

The accounts of Solvay SA are prepared in accordance with Belgian generally accepted accounting principles.

The main activities of Solvay SA 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 also has a Group internal factoring activity without recourse. As a result, Solvay SA owns and manages

Group’s trade receivables from customers based in Europe and in Asia. It manages the research center at Neder-Over-Heembeek (Brussels, Belgium)

and a very limited number of commercial activities not undertaken through subsidiaries.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

320

BALANCE SHEET OF SOLVAYSA (SUMMARY)

In € million

December 31, 2021 December 31, 2020

ASSETS

 

Fixed assets 11,309 11,235

Start-up expenses and intangible assets 123 137

Tangible assets 70 64

Financial assets 11,116 11,034

Current assets 4,074 4,356

Inventories 11 0

Trade receivables 830 639

Other receivables 2,538 3,029

Short-term investments and cash equivalents 680 655

Accrued income and deferred charges 15 33

Total assets 15,383 15,591

SHAREHOLDERS' EQUITY AND LIABILITIES

 

Shareholders' equity 8,995 8,872

Capital 1,588 1,588

Share premiums 1,200 1,200

Reserves 1,982 1,982

Net income carried forward 4,225 4,101

Provisions and deferred taxes 188 578

Financial debt 2,803 3,153

- due in more than one year 2,421 3,152

- due within one year 382 1

Trade liabilities 128 100

Other liabilities 3,239 2,845

Accrued charges and deferred income 29 43

Total shareholders' equity and liabilities 15,383 15,591

The decrease of the total assets (€ (208) million) is the combination of:

· An increase of financial assets by € 82 million, resulting mainly from the impact of:

- The intragroup purchase of 49% of the Solvay Solutions Italia shares (€ 50 million);

- The capital increase of UK entities for € 410 million in order to cover pensions deficits;

- The impairment movements on the shares held in different companies (€ (345) million) including € (410) million regarding the capital injec-

tion in UK entities.

· A decrease of current assets by € (282) million, resulting mainly from:

- The increase of trade receivables (€ 191 million), mainly as a consequence of the Group’s strong recovery in 2021;

- The decrease of other receivables (€ (491) million) represented by current accounts with subsidiaries.

Shareholders’ equity increased by € 123 million due to the results of the year (€ 532 million) and the dividend to be distributed in 2022 (€ (408) million).

The provisions decrease (€ (390 million) in 2021 is linked to the use of a specific € 350 million provision set up in 2020 to cover risks related to UK

subsidiaries. As described in the financial assets section, an impairment of € 410 million has been performed and has been partly offset by this

provision movement. In addition, the provisions for pensions have been reduced by € 102 million linked to a contribution to the Belgian Pension Fund.

Other adjustments for provisions are related to intercompany recharges and restructuring provisions.

The financial debt totals € 2,803 million (compared to € 3,153 million at the end of 2020). The decrease of € (351) million is essentially linked to the

partial reimbursement (€ (372) million) of a senior bond initially due in 2022. The residual part (€ 378 million) will be reimbursed in 2022.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

321

Other liabilities increased by € 394 million in relation with the increase of current accounts vis-à-vis affiliates. Payable for dividend is € 11 million higher

compared to last year.

INCOME STATEMENT OF SOLVAYSA (SUMMARY)

In € million

2021 2020

Sales 51 11

Other operating income 1,368 857

Operating expenses -991 -1,122

Operating profit / (loss) 428 -255

Financial income and expenses 105 -1,815

Profit / (loss) for the year before taxes 533 -2,070

Income taxes -1 2

Profit / (loss) for the year 532 -2,068

Profit / (loss) for the year available for distribution 532 -2,068

In 2021 the net result for the year of Solvay SA is a profit of € 532 million, compared with a loss of (€ 2,068) million in 2020 and a profit of € 527 million

in 2019.

This result includes:

· The operating result amounting to € 428 million, compared with a loss of € (255) million in 2020, largely attributable to the reversal in 2021 of the

provision of € 350 million recognized in 2020 to cover risks on UK subsidiaries and by additional intercompany recharges;

· Financial gains and losses (€ 105 million) related to dividends received from affiliates (€ 470 million), the capital gain on the intragroup sale of Solvay

Specialty Korea (€ 47 million) partly offset by net Impairment losses/reversals on shares (€ (345) million) and net interest charges of € (73) million.

In 2020, the net result has been largely impacted by :

· An impairment on shares (€ (2.065) million), including impairment on shares of Solvay Holding Inc (€ (1.880) million) and on shares of Solvay Finance

Luxembourg (€ (185) million) partly offset by dividends received (€290 million)

· a provision of 350 million to cover the solvency risk of UK subsidiaries

In addition to the available reserves (€ 1,056 million), an amount of € 4,633 million including the net profit of the year is available for distribution as

follows:

PROFIT AVAILABLE FOR DISTRIBUTION

In € million

2021 2020

Profit / (loss) for the year available for distribution 532 -2,068

Carried forward 4,101 6,566

Total available to the General Shareholders' Meeting 4,633 4,498

Appropriation  

Gross dividend 408 397

Carried forward 4,225 4,101

Total 4,633 4,498

SOLVAY 2021 ANNUAL INTEGRATED REPORT

FINANCIAL STATEMENTS

322

SOLVAY 2021 ANNUAL INTEGRATED REPORT

DECLARATION BY THE PERSONS RESPONSIBLE

323

DECLARATIONS

Declarations:

Auditor’s reports and

Declaration bythepersons

responsible

324 Auditor’s reports

339 Declaration by the persons

responsible

340 Glossary

SOLVAY 2021 ANNUAL INTEGRATED REPORT

DECLARATION BY THE PERSONS RESPONSIBLE

323

SOLVAY 2021 ANNUAL INTEGRATED REPORT

DECLARATION BY THE PERSONS RESPONSIBLE

324

Solvay SA/NV | 31 December 2021

Assurance report of the statutory auditor on a selection of social,

environmental and other sustainable development information for the

year ended 31 December 2021

Pursuant to your request and in our capacity of statutory auditor of Solvay SA / NV (“the Company”), we hereby

present you our assurance report on a selection of social, environmental and other sustainable development

information disclosed in the Solvay Group Annual Integrated Report for the year ended 31 December 2021 (the “2021

Annual Integrated Report”), in the section “Extra-financial statements”, and identified by the symbol ‘L’ and ‘R’.

Responsibility of the Company

This selection of information (the “Information”) extracted from the 2021 Annual Integrated Report has been

prepared under the responsibility of Solvay Group management, in accordance with internal measurement and

reporting principles used by Solvay Group (the “Reporting Framework”). The Reporting Framework consists of specific

definitions and assumptions that are summarized in section “Extra-financial statements” of the 2021 Annual

Integrated Report.

Responsibility of the Statutory Auditor

It is our responsibility, based on the procedures performed by us, to express:

• “Limited assurance” for the Information identified by the symbol ‘L’ as included in the 2021 Annual Integrated

Report;

• “Reasonable assurance” for the Information identified by the symbol ‘R’ as included in the 2021 Annual Integrated

Report.

The complete list of Information in scope of our assurance engagement together with the type of assurance has been

included in appendix A of this report.

We conducted our procedures in accordance with the international standard as defined in ISAE (International

Standard on Assurance Engagements) 3000. With respect to independence rules, these are defined by the respective

legal and regulatory texts as well as by the professional Code of Ethics, issued by the International Federation of

Accountants (“IFAC”).

SOLVAY 2021 ANNUAL INTEGRATED REPORT

DECLARATION BY THE PERSONS RESPONSIBLE

325

Solvay SA/NV | 31 December 2021

Assurance report of the statutory auditor on a selection of social,

environmental and other sustainable development information for the

year ended 31 December 2021

Pursuant to your request and in our capacity of statutory auditor of Solvay SA / NV (“the Company”), we hereby

present you our assurance report on a selection of social, environmental and other sustainable development

information disclosed in the Solvay Group Annual Integrated Report for the year ended 31 December 2021 (the “2021

Annual Integrated Report”), in the section “Extra-financial statements”, and identified by the symbol ‘L’ and ‘R’.

Responsibility of the Company

This selection of information (the “Information”) extracted from the 2021 Annual Integrated Report has been

prepared under the responsibility of Solvay Group management, in accordance with internal measurement and

reporting principles used by Solvay Group (the “Reporting Framework”). The Reporting Framework consists of specific

definitions and assumptions that are summarized in section “Extra-financial statements” of the 2021 Annual

Integrated Report.

Responsibility of the Statutory Auditor

It is our responsibility, based on the procedures performed by us, to express:

• “Limited assurance” for the Information identified by the symbol ‘L’ as included in the 2021 Annual Integrated

Report;

• “Reasonable assurance” for the Information identified by the symbol ‘R’ as included in the 2021 Annual Integrated

Report.

The complete list of Information in scope of our assurance engagement together with the type of assurance has been

included in appendix A of this report.

We conducted our procedures in accordance with the international standard as defined in ISAE (International

Standard on Assurance Engagements) 3000. With respect to independence rules, these are defined by the respective

legal and regulatory texts as well as by the professional Code of Ethics, issued by the International Federation of

Accountants (“IFAC”).

SOLVAY 2021 ANNUAL INTEGRATED REPORT

DECLARATION BY THE PERSONS RESPONSIBLE

326

Solvay SA/NV | 31 December 2021

Nature and scope of procedures

We have carried out the following procedures:

• General procedures:

o We assessed the appropriateness of the Reporting Framework with respect to its relevance, completeness,

neutrality, clarity and reliability, by taking into consideration, when relevant, the sector reporting practices.

o We have verified the set-up within Solvay Group of the process to obtain, consolidate and check the selected

Information with regard to its completeness and consistency. We have familiarized ourselves with the internal

control and risk management procedures relating to the compilation of the information. We have conducted

interviews with individuals responsible for social, environmental and other sustainable development reporting.

o At the sites that we have selected based on their activity, their contribution to the consolidated data, their

location and a risk analysis, we have:

§ Conducted interviews to verify the proper application of procedures and obtained information to perform

our verifications;

§ Conducted substantive tests, using sampling techniques, to verify the calculations performed and reconcile

data with supporting evidence.

o Scope 3 emissions – all categories: There are limits inherent to the preparation of information. The indicators

linked to greenhouse gas emissions, in particular scope 3 may be subject to uncertainty inherent to the state of

scientific or economic knowledge and the quality of the external data used. Some data are sensitive to the

methodological choices, assumptions and/or estimates used for their establishment.

o All the audited sites and perimeters are listed in appendix B of this document.

• “Limited assurance” for the Information identified by the symbol ‘L’ as included in the 2021 Annual Integrated

Report:

o For the entity in charge of consolidation (“the Company”), as well as for the controlled entities, we have

designed analytical procedures and verified, using sampling techniques, the calculations as well as the

consolidation of this information in order to obtain limited assurance that the selected information does not

contain any material errors that would question its preparation, in all material respects, in accordance with the

Reporting Framework. A higher level of assurance would have required more extensive procedures.

• “Reasonable assurance” for the Information identified by the symbol ‘R’ as included in the 2021 Annual Integrated

Report:

o We conducted work of the same nature as the work described in section above (limited assurance) but in

further detail, in particular performing an increased number of tests. In these cases, the selected sample

represents between 19% and 50% of the published data.

Solvay SA/NV | 31 December 2021

Deloitte Bedrijfsrevisoren/Réviseurs d’Entreprises BV/SRL

Registered Office: Gateway building, Luchthaven Brussel Nationaal 1 J, B-1930 Zaventem

VAT BE 0429.053.863 - RPR Brussel/RPM Bruxelles - IBAN BE86 5523 2431 0050 - BIC GKCCBEBB

Member of Deloitte Touche Tohmatsu Limited

Conclusion

• For the indicators in scope of “limited assurance” (identified by the symbol ‘L’)

On the basis of the procedures performed by us, nothing came to our attention that causes us to believe that the

Information identified by the symbol ‘L’ as included in the 2021 Annual Integrated Report, is not prepared, in all

material respects, in accordance with the Reporting Framework.

• For the indicators in scope of “reasonable assurance” (identified by the symbol ‘R’)

In our opinion, based on the procedures performed, the Information identified by the symbol ‘R’ as included in the

2021 Annual Integrated Report, has been prepared in all material respects in accordance with the Reporting

Framework.

Signed at Zaventem on 18 March 2022

The statutory auditor

________________________________________________

Deloitte Bedrijfsrevisoren/Réviseurs d’Entreprises BV/SRL

Represented by Michel Denayer

________________________________________________

Deloitte Bedrijfsrevisoren/Réviseurs d’Entreprises BV/SRL

Represented by Corine Magnin

Appendices:

Appendix A – Overview of indicators reviewed

Appendix B – Overview of audited sites

SOLVAY 2021 ANNUAL INTEGRATED REPORT

DECLARATION BY THE PERSONS RESPONSIBLE

327

Solvay SA/NV | 31 December 2021

Deloitte Bedrijfsrevisoren/Réviseurs d’Entreprises BV/SRL

Registered Office: Gateway building, Luchthaven Brussel Nationaal 1 J, B-1930 Zaventem

VAT BE 0429.053.863 - RPR Brussel/RPM Bruxelles - IBAN BE86 5523 2431 0050 - BIC GKCCBEBB

Member of Deloitte Touche Tohmatsu Limited

Conclusion

• For the indicators in scope of “limited assurance” (identified by the symbol ‘L’)

On the basis of the procedures performed by us, nothing came to our attention that causes us to believe that the

Information identified by the symbol ‘L’ as included in the 2021 Annual Integrated Report, is not prepared, in all

material respects, in accordance with the Reporting Framework.

• For the indicators in scope of “reasonable assurance” (identified by the symbol ‘R’)

In our opinion, based on the procedures performed, the Information identified by the symbol ‘R’ as included in the

2021 Annual Integrated Report, has been prepared in all material respects in accordance with the Reporting

Framework.

Signed at Zaventem on 18 March 2022

The statutory auditor

________________________________________________

Deloitte Bedrijfsrevisoren/Réviseurs d’Entreprises BV/SRL

Represented by Michel Denayer

________________________________________________

Deloitte Bedrijfsrevisoren/Réviseurs

d’Entreprises BV/SRL

Represented by Corine Magnin

Appendices:

Appendix A – Overview of indicators reviewed

Appendix B – Overview of audited sites

SOLVAY 2021 ANNUAL INTEGRATED REPORT

DECLARATION BY THE PERSONS RESPONSIBLE

328

Solvay SA/NV | 31 December 2021

Appendix A - Overview of indicators reviewed for the year ended 31 December 2021

Indicators in bold are selected for reasonable assurance.

Reporting scope Information Audit Procedure Audit scope

Sustainable business

solutions

Product portfolio assessed

Reasonable Assurance Group level

Sustainable business solutions

Reasonable Assurance Group level

Circular economy

Percentage of turnover of products based on

circular

sourcing

Limited Assurance Group level

Greenhouse gas emissions

Greenhouse gas emissions intensity

Reasonable Assurance Group level

GHG reductions achieved compared to last year (at constant

scope and constant GHG accounting

methodology)

Reasonable Assurance Group level

Direct emissions (Scope 1)

Reasonable Assurance Site level

Indirect emissions (Scope 2)

Reasonable Assurance Site level

Total direct and indirect emissions (Scope 1+2)

Reasonable Assurance Site level

Other greenhouse gas emissions not in accordance with the

Kyoto Protocol (scope 1)

Reasonable Assurance Site level

Other greenhouse gas emissions in accordance with the

Kyoto Protocol (scope 1)

Reasonable Assurance Site level

Scope 3

emissions – all categories Reasonable Assurance Group level

Energy

Primary energy consumption

Limited Assurance Site level

Energy efficiency index

Limited Assurance Site level

Phase

-out of coal use in energy production Reasonable Assurance Group level

Air quality

Nitrogen oxides emissions

– NO

Limited Assurance Site level

Sulphur oxides emissions

– SO

Limited Assurance Site level

Non

-methane volatile organic compounds emissions –

NMVOC

Limited Assurance Site level

Water and wastewater

Freshwater withdrawal

Reasonable Assurance Site level

Chemical oxygen demand (COD)

Limited Assurance Site level

Solvay SA/NV | 31 December 2021

Reporting scope

Information

Audit Procedure

Audit scope

Waste and hazardous materials

Non-hazardous industrial waste

Reasonable Assurance

Site level

Hazardous industrial waste

Reasonable Assurance

Site level

Total industrial waste

Reasonable Assurance

Site level

Non-hazardous industrial waste not treated in a

sustainable way

Reasonable Assurance

Site level

Hazardous industrial waste not treated in a sustainable

way

Reasonable Assurance

Site level

Total industrial waste not treated in a sustainable way

Reasonable Assurance

Site level

Mining waste

Reasonable Assurance

Site level

Substance of very high concern (SVHC) according to REACH

criteria present in products sold

Limited Assurance

Group level

Percentage of completion of Analysis of Safer Alternatives

program for marketed substances

Limited Assurance

Group level

Employee health and safety

RIIR – Reportable Illnesses and Injuries

Reasonable Assurance

Site level

LTIIR – Lost time accidents

Reasonable Assurance

Site level

Fatal accidents of Solvay employees and contractors

Reasonable Assurance

Site level

Employee engagement and

wellbeing

Coverage by collective agreement

Limited Assurance

Group level

Solvay Engagement Index

Limited Assurance

Group level

Diversity and inclusion

Total headcount

Reasonable Assurance

Group level

Percentage of women in the Group

Reasonable Assurance

Group level

Headcount by employee category (senior manager, middle

manager, junior manager, non-manager)

Limited Assurance

Group level

Process accident and safety

Process safety incident rate

Limited Assurance

Group level

Process Safety Incidents with High or Catastrophic severity

Limited Assurance

Site level

Process Safety Incidents with environmental consequences

Limited Assurance

Site level

Process Safety Incidents with environmental consequences

in which the limits of the operating permit were exceeded

Limited Assurance

Site level

Customer welfare

Solvay’s Net Promoter Score (NPS)

Limited Assurance

Group level

Biodiversity

Pressure of Solvay products on biodiversity

Reasonable Assurance

Group level

SOLVAY 2021 ANNUAL INTEGRATED REPORT

DECLARATION BY THE PERSONS RESPONSIBLE

329

Solvay SA/NV | 31 December 2021

Reporting scope Information Audit Procedure Audit scope

Waste and hazardous materials

Non-hazardous industrial waste Reasonable Assurance Site level

Hazardous industrial waste Reasonable Assurance Site level

Total industrial waste Reasonable Assurance Site level

Non-hazardous industrial waste not treated in a

sustainable way

Reasonable Assurance Site level

Hazardous industrial waste not treated in a sustainable

way

Reasonable Assurance Site level

Total industrial waste not treated in a sustainable way Reasonable Assurance Site level

Mining waste Reasonable Assurance Site level

Substance of very high concern (SVHC) according to REACH

criteria present in products sold

Limited Assurance Group level

Percentage of completion of Analysis of Safer Alternatives

program for marketed substances

Limited Assurance Group level

Employee health and safety

RIIR

– Reportable Illnesses and Injuries Reasonable Assurance Site level

LTIIR

– Lost time accidents Reasonable Assurance Site level

Fatal accidents of Solvay employees and contractors

Reasonable Assurance Site level

Employee engagement and

wellbeing

Coverage by collective agreement

Limited Assurance Group level

Solvay

Engagement Index Limited Assurance Group level

Diversity and inclusion

Total headcount Reasonable Assurance Group level

Percentage of women in the Group Reasonable Assurance Group level

Headcount by employee category (senior manager, middle

manager, junior manager, non-manager)

Limited Assurance Group level

Process accident and safety

Process safety incident rate Limited Assurance Group level

Process Safety Incidents with High or Catastrophic severity Limited Assurance Site level

Process Safety Incidents with environmental consequences Limited Assurance Site level

Process Safety Incidents with environmental consequences

in which the limits of the operating permit were exceeded

Limited Assurance Site level

Customer welfare Solvay’s Net Promoter Score (NPS) Limited Assurance Group level

Biodiversity Pressure of Solvay products on biodiversity Reasonable Assurance Group level

SOLVAY 2021 ANNUAL INTEGRATED REPORT

DECLARATION BY THE PERSONS RESPONSIBLE

330

Solvay SA/NV | 31 December 2021

Reporting scope

Information

Audit Procedure Audit scope

Management of the legal,

ethics and regulatory

framework

Total claims made

Limited Assurance Group level

Total claims closed

including cases for which there was

insufficient information or cases that were misdirected or

referred

Limited Assurance Group level

Unsubstantiated claims among resolved cases

Limited Assurance Group level

Substantiated claims among resolved

cases Limited Assurance Group level

Solvay SA/NV | 31 December 2021

Appendix B - Overview of audited sites

A selection of indicators audited

All relevant indicators audited

Site audité

Pays

Indicateurs

Greenhouse

gas emissions

Energy

Air quality

Water and

waste water

Waste and

hazardous

substances

Mining waste

Employee health

and safety

Accident and

safety

management

Santo Andre

Brazil

Paulinia

Zhenjiang Songl

China

Collonges

France

Dombasle

Pont De Claix

Tavaux

Ospiate

Italy

Rosignano

Spinetta

Ciudad Juarez

Mexico

Wloclawek

Poland

Torrelavega

Spain

Asia Ind Estate

Thailand

Map Ta Phut

Alpharetta, GA

United States

Anaheim, CA

Cincinatti, OH

Green River, WY

Havre de Grace, MD

West Deptford, NJ

SOLVAY 2021 ANNUAL INTEGRATED REPORT

DECLARATION BY THE PERSONS RESPONSIBLE

331

Solvay SA/NV | 31 December 2021

Appendix B - Overview of audited sites

A selection of indicators audited

All relevant indicators audited

Site audité

Pays

Indicateurs

Greenhouse

gas emissions

Energy Air quality

Water and

waste water

Waste and

hazardous

substances

Mining waste

Employee health

and safety

Accident and

safety

management

Santo Andre

Brazil

Paulinia

Zhenjiang Songl

China

Collonges

France

Dombasle

Pont De Claix

Tavaux

Ospiate

Italy

Rosignano

Spinetta

Ciudad Juarez

Mexico

Wloclawek

Poland

Torrelavega

Spain

Asia Ind Estate

Thailand

Map Ta Phut

Alpharetta, GA

United States

Anaheim, CA

Cincinatti, OH

Green River, WY

Havre de Grace, MD

West Deptford, NJ

SOLVAY 2021 ANNUAL INTEGRATED REPORT

DECLARATION BY THE PERSONS RESPONSIBLE

332

Solvay SA | 31 December 2021

Statutory auditor’s report to the shareholders’ meeting of Solvay SA for

the year ended 31 December 2021 - Consolidated financial statements

In the context of the statutory audit of the consolidated financial statements of Solvay SA (“the company”) and its

subsidiaries (jointly “the group”), we hereby submit our statutory audit report. This report includes our report on the

consolidated financial statements and the other legal and regulatory requirements. These parts should be considered

as integral to the report.

We were appointed in our capacity as statutory auditor by the shareholders’ meeting of 14 May 2019, in accordance

with the proposal of the board of directors issued upon recommendation of the audit committee and presentation of

the works council. Our mandate will expire on the date of the shareholders’ meeting deliberating on the financial

statements for the year ending 31 December 2021. We have performed the statutory audit of the consolidated

financial statements of Solvay SA for 21 consecutive periods.

Report on the consolidated financial statements

Unqualified opinion

We have audited the consolidated financial statements of the group, which comprise the consolidated statement of

financial position as at 31 December 2021, the consolidated income statement, the consolidated statement of

comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash

flows for the year then ended, as well as the summary of significant accounting policies and other explanatory notes.

The consolidated statement of financial position shows total assets of 20 049 million EUR and the consolidated income

statement shows a profit for the year then ended of 989 million EUR.

In our opinion, the consolidated financial statements give a true and fair view of the group’s net equity and financial

position as of 31 December 2021 and of its consolidated results and its consolidated cash flow for the year then

ended, in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and

with the legal and regulatory requirements applicable in Belgium.

Basis for the unqualified opinion

We conducted our audit in accordance with International Standards on Auditing (ISA), as applicable in Belgium. In

addition, we have applied the International Standards on Auditing approved by the IAASB applicable to the current

financial year, but not yet approved at national level. Our responsibilities under those standards are further described

in the “Responsibilities of the statutory auditor for the audit of the consolidated financial statements” section of our

report. We have complied with all ethical requirements relevant to the statutory audit of consolidated financial

statements in Belgium, including those regarding independence.

We have obtained from the board of directors and the company’s officials the explanations and information necessary

for performing our audit.

We believe that the audit evidence obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the

consolidated financial statements of the current 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 we do not provide a

separate opinion on these matters.

SOLVAY 2021 ANNUAL INTEGRATED REPORT

DECLARATION BY THE PERSONS RESPONSIBLE

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