Solvay : Annual Integrated Report 2023

0 4 CHAIRMAN STATEMENT

SOLVAY 2023 ANNUAL INTEGRATED REPORT

W hen future generations look back at the long history of Solvay, stretching all the way to 1863, this last year will certainly stand out as a milestone moment.

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

Pulling this off has been achieved against a difficult external macroeconomic environment with a background of geopolitical conflict, weak economic growth, high interest rates, inflation, higher energy prices and high level of regulation in Europe. Despite all of these challenges, building on all the great work accomplished over the last years, Solvay was still able to deliver a strong financial performance, maintaining our competitive position and at the same time continuing to deliver on our ambitious sustainability targets. This is the Solvay spirit in action.

Having served on the previous Solvay Board, I have come to know the company and its assets well. Solvay has always been at the forefront of excellence and innovation because of the enduring values of our founder, Ernest Solvay: science, an eagerness to learn and improve, entrepreneurship and societal responsibility.

At Solvay, we are thus rediscovering our roots and spreading our wings. At the heart lies a central concept: Mastery. Mastery is a rich, multi-faceted and profound concept.

It starts with a key mindset: honoring past experiences to guide us for the future. In today's world we are too often absorbed by the problems of today and planning the future, and tend to forget that each day we walk on paths that have been created by our predecessors.

Then, Mastery is about the relentless drive to improve and perfect our scientific and technological capabilities. Like a craftsman, we must continually work and rework until we reach a level of perfection that we can be proud of. We must both welcome and reinvent traditions.

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

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

Our endeavor therefore centers on our mastering of the elements essential to our world. There is a growing demand for more sustainable products while remaining competitive, which is why we are focused on applications that help shape a future where everyone thrives. That is the central transformation we are facing. 160 years ago, Ernest Solvay developed the soda ash process and, building on his legacy, we remain committed to continued innovation and to perfecting the science of essential chemistry for generations to come. Nothing is impossible, Ernest Solvay would say, not even re-inventing his original soda ash process as we recently did, which will result in a significant reduction of our carbon emissions and use of resources such as water.

One of the most important lessons I have learned in a long career advising large complex organizations is a very simple but profound truth: in the end, it is all about people - real people like you and me, of flesh and blood, fears and hopes, dreams and ambitions, and with a desire to contribute to noble goals that create pride. Organization and process are paramount, but in the end it is the human factor that counts most. Looking at Solvay, at the core of our legacy and our future is our highly motivated and skilled workforce, who do not spare their efforts and energy. Our strength lies in our people and their values, and how this is transferred from colleague to colleague, from generation to generation. It is this collective journey that makes us successful, starting at the top of the company with its leadership, leading all the way to empowering the base.

The new Board of ten directors, including six independent ones, is diverse, skilled, experienced, and committed. More importantly, we have people with the right mindset, wisdom and ambition to step up Solvay's performance and delivery. To generate resilient cash and create sustainable and abundant value for all of our stakeholders. To serve our customers

ANNUAL INTEGRATED REPORT SOLVAY 2023

0 6 CEO STATEMENT

SOLVAY 2023 ANNUAL INTEGRATED REPORT

S olvay has entered a new phase, marking a significant milestone in our history. I am honored to lead the company forward, supported by a skilled team of executives and the dedication of more than

9,000 employees worldwide. I thank the Board for entrusting me with the responsibility of guiding Solvay into a future that holds sustainability at its core.

With over 160 years of history, our portfolio spans key chemical sectors and includes five business lines: soda ash, pe- roxides, silica, rare earths, and fluorine. We hold global market and technological leadership in these areas, along with a strong regional business in Latin America, known as Coatis. We focus on delivering essential products that play a crucial role in the manufacturing of items integral to the day-to-day life of consumers, such as glass for buildings and bottles, detergents, paper, tires, semiconductors, food, and pharma- ceuticals, positioning us across a wide array of markets. In line with the legacy of our founder, Ernest Solvay, we are committed to mastering the core technologies and materials that are essential to meeting our customers' fast-evolving needs, building on our strong foundation.

DELIVERING ON OUR COMMITMENTS

• In 2023, amid a challenging macroeconomic environment, we recorded high-quality results. Our net sales reached €4.9bn. Our EBITDA stands strong at €1.2bn, stable versus 2022 on an organic basis, with the EBITDA margin increasing to a record 25.5%. This demonstrates our ability to maintain solid financial ground even in the face of declining volumes. The higher profit and the simplification of our portfolio re- sulted in a high free cash flow of €0.6bn, with a record conver- sion ratio of 45.4%, further strengthening our financial health.

Sustainability is at the heart of our operations, reinforcing our position as market leader and enhancing our competitive advantage. We are committed to achieving carbon neutrality by 2050, and I am pleased to report that we are on the right path. In 2023, we significantly accelerated our energy transition efforts. We achieved a 19% reduction in emissions from our operations (Scope 1 and 2) compared to 2021. We are actively advancing 27 energy transition projects globally and implementing energy efficiency upgrades across all our facilities, making substantial progress in the transition

ANNUAL INTEGRATED REPORT SOLVAY 2023

to renewable energy sources. These initiatives position us strongly to achieve our ambitious target of reducing our emissions by 30% by 2030.

We have made significant progress towards our goal of phasing out coal use in our soda ash plants, and at the beginning of 2024, we announced its complete phase-out at our Green River, Wyoming, USA, facility. In 2025, our plants in Rheinberg, Germany, and Dombasle, France, will also cease coal use. Furthermore, our breakthrough e.Solvay soda ash process which is currently being piloted at an industrial scale, will put our carbon neutrality goal within reach by removing our emissions from the soda ash process.

Our emissions upstream and downstream in the value chain (Scope 3 for the "Focus 5" categories) have experienced an impressive 16% reduction compared to 2021, positioning us well on our trajectory towards achieving our 2030 target of a 20% reduction. To further this progress, we are collaborating with our top greenhouse gas (GHG)-emitting suppliers to better track and reduce emissions from our purchased goods and services.

Embracing our founder's vision, safety is a critical value at Solvay, and we will continue to push the boundaries to reach the zero accident target. In parallel, we have committed to reducing inequalities by ensuring a living wage for all Solvay employees by 2026. We initiated a pilot program to assess our adherence to living wage standards in the U.S., U.K., and China. The initial results have confirmed our compliance, affirming our status as a responsible employer.

We continue our efforts towards achieving gender balance in leadership in ten years and fostering social dialogue through the Solvay Global Forum. Our 2023 initiatives have further integrated Diversity, Equity, and Inclusion (DEI) into our or- ganization, including enhanced disability inclusion practices across all levels.

OUR STRATEGY: LEADING WITH PROCESS INNOVATION AND SUSTAINABILITY

• We have a clear strategy. We aim to deliver value to our cus- tomers through our leadership positions in every market where we operate. Our approach to achieving this is to grow in line with our customers'needs and to innovate in our production pro- cesses. Our cutting-edge hydrogen peroxide facility in Taiwan is designed to meet the region's growing demand for semiconduc- tors, while our plant in Livorno, Italy, is introducing a new circu- lar silica unit derived from rice husk ash, which will significantly boost the sustainability of the tire industry.

Further strengthening our technology leadership position, we are establishing Europe's first rare earths hub for a permanent magnets value chain in La Rochelle, France, to meet growing needs in the electronics, automotive and clean energy markets. In Saudi Arabia, we plan to construct the wor- ld's first carbon-neutral soda ash facility using our innovative e.Solvay process. This initiative will set a new global standard in competitiveness and sustainability.

To drive excellence and competitiveness, we are transforming the way we operate. This means excelling as leaders in processes and cost savings, which we expect to be a major driver of our EBITDA growth over the next five years. We have started deploying initiatives aimed at delivering savings, and we are confident in achieving our goal of €300 million in annual savings by 2028.

LOOKING AHEAD: AMBITIOUS GOALS FOR A SUSTAINABLE FUTURE

Looking ahead, our ambitions are high. Building on our strong foundation, we aim to further enhance our performance me- trics. Our objective is not only to preserve our position in the top quartile but also to establish new standards for the in- dustry.

When it comes to creating sustainable value and a resilient, forward-looking business model, maintaining capital discipline is key. Our cash allocation strategy will be simplified and more focused: one third of the generated cash will be directed towards essential capital expenditures, another third will be allocated to our shareholders, to whom we pledge a stable or increasing dividend, and the final third will support growth initiatives.

I am excited about embarking on this new chapter with Solvay. Our dedication to steering the industry towards a sustainable future, through our mastery of technology and sustainable practices, will drive Solvay's ongoing transforma- tion. We aim to become a model of operational excellence, paving the way for a sustainable future that sets a standard for others in our industry. This is our commitment to all our stakeholders.

Philippe Kehren

Chief Executive Officer

0 8 STRONG FOUNDATIONS

SOLVAY 2023 ANNUAL INTEGRATED REPORT

• For over 160 years, through continuous changes and trans- formations, Solvay has remained true to its legacy of innovation, social responsibility, and technical excellence. Over the past ten years, we have achieved a radical transformation of our com- pany. We deeply reshaped and streamlined our portfolio, with more than 50 mergers and acquisitions in the past 15 years, exi- ting cyclical businesses. Our G.R.O.W. strategy and Solvay One Planet sustainability objectives accelerated the momentum, al- lowing us to focus on higher growth and higher margin activities while placing sustainability at the heart of what we do.

Through a gradual process, we have transitioned to more efficient operations to better serve customers and initiated a profound cultural change towards more agility and customer -centricity. We have achieved our financial mid-term targets three years ahead of schedule and made significant

progress on our sustainability objectives. As a result of our successful transformation journey, two distinct business groups emerged, focused respectively on essential and specialty che- micals. We decided to separate Solvay into two distinct listed companies (Solvay and Syensqo) in order to unlock the full potential of each of these business groups.

On December 8, 2023, our shareholders approved the partial demerger of Solvay SA/NV and the spin-off of our specialty businesses to a new company named Syensqo. From that date, we have welcomed the next chapter of Solvay's heritage built on the strong foundations of our past and strengthened by our recent transformation. And, as has been the case for 160 years, our products remain at the heart of everyday lives. We are es- sential. We are SOLVAY.

ANNUAL INTEGRATED REPORT SOLVAY 2023

1 0 STRONG FOUNDATIONS

SOLVAY 2023 ANNUAL INTEGRATED REPORT

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Sustainability at the core

of our business and operations

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

We have long been committed to offering our customers more sustainable products and reducing our impact on the planet based on clear objectives. Within the past few years, we stepped up our sustainability ambitions by creating our Solvay One Planet roadmap, establishing 10 objectives to reduce our impact on the climate and natural resources and to improve the quality of life of our people and communities. This unique approach to sustainability topics provides a holistic view of many areas, such as biodiversity, circularity, quality of life, and more.

We have built a very ambitious roadmap to achieve our goal of carbon neutrality on Scopes 1 and 2 greenhouse gas (GHG) emissions by 2050. We have taken big steps towards reducing our carbon footprint, heavily investing to phase out coal for energy production at our soda ash plants, accelerating the shift to renewable energy worldwide, and constantly innovating to make our processes more sustainable and less carbon intensive.

Furthermore, our solid and unique Sustainable Portfolio Management (SPM) methodology helps us embed sustainability in our key business decisions. And we have made progress, delivering more sustainable solutions, such as our flue gas treatment product based on sodium bicarbonate SOLVair® and a wastewater disinfection treatment based on hydrogen peroxide, all while reinventing a more sustainable soda ash manufacturing process.

We launched our One Dignity program, a comprehensive initiative featuring nine objectives with action plans designed to accelerate the company-wide adoption of a DEI mindset. What sets us apart is our specific approach of using equity and inclusion as building blocks for diversity. To measure our progress, we launched an annual Group- wide Pulse survey. Tackling gender inequities, we were among the very first companies to publish a gender pay gap report and launch a pay equity correction exercise covering mid and senior management across the Group.

As a continuous effort, sustainability is deeply embedded in our culture and operations. This is why we recently increased the sustainability criteria, that now includes DEI, in employees' short- term incentives to 15%.