Regulatory News:
ARKEMA (Paris:AKE):
In a context strongly marked by the pandemic, the Group’s
EBITDA margin remained robust at 15.0%, supported by the resilience
of its Specialty Materials (1) and by the rebound in volumes in the
fourth quarter (+5% vs Q4’19).
Arkema is well positioned to take advantage of the recovery
in 2021 and beyond, thanks to the benefits of its strong balance
sheet and its focus on sustainable and high performance Specialty
Materials.
Rebound in volumes in the fourth quarter and solid
performance during the year
- Rebound in the Group’s performance in the fourth quarter
- Sales growth of 2.1% at constant scope and currency,
driven by a significant improvement in volumes (+5.2% vs
Q4’19)
- Continued positive momentum in construction, decorative paints
and batteries, and recovery seen in several industrial markets
- EBITDA broadly stable at €289 million (€295
million in Q4’19), supported by the strong increase of Adhesive
Solutions (+15%) and Coating Solutions (+19%)
- €7.9 billion in sales in 2020, representing a
limited decline of 8% year on year at constant currency, reflecting
the impact of the pandemic on global demand
- EBITDA in 2020 of €1,182 million (-18.9%) and
EBITDA margin of 15.0%. Good resilience of Specialty
Materials (12% decrease in EBITDA and a 100 bp contraction in
EBITDA margin to 15.8% (2))
- Adjusted net income of €391 million in 2020,
representing €5.11 per share
- High free cash flow for the year at €651 million,
comparable to the level achieved in 2019, reflecting excellent
management of working capital (11.8% of sales at 31 December 2020)
and strict control of capital expenditure
- Net debt down strongly at €1,910 million
including hybrid bonds (€2,331 million at 31 December 2019),
representing 1.6x EBITDA for 2020
Confidence in the outlook for 2021 and in the execution of
the 2024 roadmap
- Significant progress made in 2020 on the strategy to
refocus on Specialty Materials
- Reinforced ambition in terms of CSR and creation
of the Innovation and Sustainable Growth committee, a new committee
of the Board of Directors
- Dynamic cash allocation in line with the guidelines of the
April 2020 Capital Markets Day
- Proposed dividend back at pre-Covid level at €2.50
per share (3)
- Share buyback program totaling €300 million to be
launched after the closing of the planned divestment of PMMA
(4)
- EBITDA growth in 2021 to be concentrated in Specialty Materials
(82% of Group sales in 2020). In an environment that is still
volatile, excluding a significant resumption of the pandemic,
Arkema aims, at constant currency (5) for Specialty Materials
EBITDA to grow by around 10% in 2021 relative to 2020, and for
EBITDA of Intermediates to be stable at constant currency
(5) and scope (closing of PMMA expected mid-2021).
Arkema’s Board of Directors met on 24 February 2021 to approve
the Group’s consolidated financial statements for 2020. Commenting
on the year’s results, Chairman and CEO Thierry Le Hénaff said:
“Last year we faced the challenging context of the pandemic and
first and foremost, I would like to thank the responsiveness and
mobilization of our employees across the world. Their unwavering
commitment, as well as Arkema’s geographic and technological
positioning, enabled the Group to deliver a robust financial
performance in 2020, be highly efficient in managing operations to
quickly adapt to the context, record a strong rebound in sales and
earnings in the fourth quarter, and look confidently ahead to
2021.
2020 was ultimately a year of major qualitative progress for
Arkema. Progress in refocusing the Group’s profile toward Specialty
Materials with the divestment of Functional Polyolefins to SK and
the proposed divestment of PMMA to Trinseo. Progress in our
innovation programs, in particular with the acceleration in our
high-performance adhesives, cutting-edge solutions for mobility and
natural resources management. Progress in CSR with the admission to
the DJSI World index, the strengthening of our environmental and
diversity targets, and the continued assessment of our solutions
portfolio based on sustainability criteria.
Despite the ongoing uncertainty of the health context, 2021
should be a year of good growth for Arkema. In addition, we will
continue to accelerate our high value-added developments in the 3
segments, Adhesive Solutions, Coating Solutions and Advanced
Materials, as well as the execution of our strongly value-creative
strategy to refocus entirely on Specialty Materials.”
Key figures
(In millions of euros)
Q4'20 Q4'19
YoY change
2020
2019
YoY change
Sales
1,985
2,053
-3.3%
7,884
8,738
-9.8%
EBITDA
289
295
-2.0%
1,182
1,457
-18.9%
Specialty Materials
261
250
+4.4%
1,018
1,158
-12.1%
Intermediates
42
59
-28.8%
231
381
-39.4%
Corporate
-14
-14
-67
-82
EBITDA margin
14.6%
14.4%
15.0%
16.7%
Specialty Materials
15.9%
15.2%
15.8%
16.8%
Intermediates
12.6%
14.5%
16.2%
21.0%
Recurring operating income (REBIT)
144
151
-4.6%
619
926
-33.2%
REBIT margin
7.3%
7.4%
7.9%
10.6%
Adjusted net income
92
102
-9.8%
391
625
-37.4%
Adjusted net income per share (in €)
1.20
1.33
-9.8%
5.11
8.20
-37.7%
Free cash flow
116
286
651
667
Net debt including hybrid bonds
1,910
2,331
Fourth-quarter 2020 business performance
Group sales amounted to €1,985 million for the
fourth quarter of 2020 (€2,053 million in Q4 2019), up 2.1% at
constant scope and currency. Volumes increased by a significant
5.2%, reflecting good momentum in the construction, decorative
paints and batteries markets, as well as the improvement observed
during the quarter in industrial markets, particularly in the
automotive market. Adhesive Solutions recorded a positive 2.0%
price effect and Advanced Materials prices remained stable,
mitigating the impact of lower propylene prices in Coating
Solutions and challenging market conditions in Fluorogases. The
overall price effect was -3.1%. The scope effect was a negative
1.3%, reflecting the divestment of Functional Polyolefins, partly
offset by the integration of acquisitions in Adhesive Solutions.
The depreciation of the US dollar and certain emerging currencies
against the euro accelerated and led to a negative 4.1% currency
effect in the quarter.
Group EBITDA of €289 million was comparable to
last year’s level (€295 million). This performance was supported by
an increase of nearly 5% for Specialty Materials, and in particular
by Adhesive Solutions and Coating Solutions, which recorded
respectively a 15% and 19% year-on-year rise in EBITDA. The
negative currency effect and sharp drop in earnings for Fluorogases
weighed on EBITDA, however. EBITDA margin rose to 14.6% (14.4% in
Q4 2019).
Fourth-quarter 2020 performance by segment
Adhesive solutions
(In millions of euros)
Q4'20 Q4'19
YoY change
Sales
512
500
+2.4% EBITDA
69
60
+15.0% EBITDA margin
13.5%
12.0%
Recurring operating income (REBIT)
52
45
+15.6% REBIT margin
10.2%
9.0%
Sales of the Adhesive Solutions segment totaled €512
million, up 2.4% relative to fourth-quarter 2019. At constant
scope and currency, they rose 2.7%, driven by a positive 2.0% price
effect, and reflect ongoing positive momentum in construction in
the continuity of the third quarter, as well as much better volumes
in engineering adhesives. Up by a strong 15% to €69 million,
EBITDA benefited from higher volumes, intensive efforts on
the product mix toward higher-value added solutions, fixed costs
control and the consolidation of acquisitions. EBITDA margin
improved by a significant 150 bps and reached 13.5% (12.0% in Q4
2019), a record high for a fourth quarter.
Advanced Materials
(In millions of euros)
Q4'20 Q4'19
YoY change
Sales
644
663
-2.9%
EBITDA
123
132
-6.8%
EBITDA margin
19.1%
19.9%
Recurring operating income (REBIT)
57
69
-17.4%
REBIT margin
8.9%
10.4%
In the Advanced Materials segment, sales declined 2.9% to
€644 million and EBITDA decreased 6.8% to €123
million, impacted mainly by a negative currency effect. At
constant scope and currency, the segment’s sales grew 0.8%, a much
improved performance relative to the 11.8% year-on-year decline in
the third quarter. The segment’s performance was driven by
innovation in sustainable growth platforms such as mobility, in
particular batteries, natural resource management, electronics
solutions and lightweight materials. EBITDA margin of 19.1%
remained at a high level (19.9% in Q4 2019).
Coating Solutions
(In millions of euros)
Q4'20 Q4'19
YoY change
Sales
489
477
+2.5% EBITDA
69
58
+19.0% EBITDA margin
14.1%
12.2%
Recurring operating income (REBIT)
39
28
+39.3% REBIT margin
8.0%
5.9%
At €489 million, sales of the Coating Solutions
segment were up 2.5% year on year. Volumes were up strongly
(+14.5%), rising in all of the segment’s businesses, driven in
particular by good momentum in the decorative paints, industrial
coatings, 3D printing and graphic arts markets, while lower
propylene weighed significantly on prices (price effect of negative
8.4%). In this context of improving volumes, EBITDA rose by
a sharp 19% to €69 million and EBITDA margin was up by
almost 200 bps to 14.1% (12.2% in Q4 2019).
Intermediates
(In millions of euros)
Q4'20 Q4'19
YoY change
Sales
334
408
-18.1%
EBITDA
42
59
-28.8%
EBITDA margin
12.6%
14.5%
Recurring operating income (REBIT)
12
26
-53.8%
REBIT margin
3.6%
6.4%
At €334 million, sales of the Intermediates segment were
down 18.1% on fourth-quarter 2019, impacted by a 13.3% negative
scope effect linked to the divestment of Functional Polyolefins.
Volumes rose 6.3% thanks to the strong growth of acrylic monomers
in Asia and the good performance of PMMA in the continuity of the
month of September, while Fluorogases volumes were lower. The
negative 7.7% price effect was mainly related to Fluorogases.
EBITDA came to €42 million (€59 million in Q4 2019),
impacted by the deconsolidation of Functional Polyolefins and lower
unit margins, essentially in Fluorogases.
2020 Business Performance
At €7,884 million, sales were down 9.8% relative
to last year, or 8.1% lower at constant currency, in an environment
marked by the health and economic crisis linked to the emergence of
Covid-19. In this context of the pandemic, the Group reacted
quickly and implemented strong measures to protect the health of
its employees while ensuring business and service continuity for
its customers. The Group decided very early on not to use the
French government’s assistance measures or furlough schemes. Arkema
also maintained strict control over its operating expenses,
generating savings of over €100 million in the year relative to the
initially planned level of fixed costs, its working capital and
capital expenditure.
After a strong slowdown in global demand in the second quarter,
the construction, DIY and decorative paints markets gradually
improved in the second half. The Group also benefited from its
innovation and its positioning in certain growing markets such as
batteries, medical, nutrition and packaging, as well as from the
diversity of its end markets and balanced geographical footprint.
The Group’s volumes decreased by 4.3% during the year, particularly
in the transportation, industrial and oil & gas markets. The
price effect was a negative 4.7% and was mainly due to the impact
of lower propylene prices in the Coating Solutions segment, as well
as the challenging market conditions in Intermediates, particularly
Fluorogases. The scope effect was a positive 0.9%, corresponding to
the contribution of acquisitions in the Adhesive Solutions segment,
and of ArrMaz in Advanced Materials in the first half of the year,
largely offset by the impact of the divestment of the Functional
Polyolefins business on 1 June. The depreciation of the US dollar
and certain emerging currencies against the euro resulted in a 1.7%
negative currency effect.
The share of Specialty Materials amounted to 82% of Group sales
in 2020 (79% in 2019), and would come to 89% of sales including the
full impact of the M&A transactions announced during the
year.
Finally, the geographic breakdown of sales was similar to 2019,
with Europe representing 36% of group sales (36% in 2019), North
America 33% (32% in 2019) and Asia and the rest of the world 31%
(32% in 2019).
EBITDA amounted to €1,182 million (€1,457 million
in 2019) and EBITDA margin held up well at 15.0%. The
Group’s performance was mainly impacted by the decline in volumes,
lower prices in Intermediates and an unfavorable currency effect,
partly offset by the benefits of innovation in faster-growing
segments, cost reduction initiatives, lower raw materials prices
and the positive impact of acquisitions. Specialty Materials
recorded a robust performance despite the difficult context, with
EBITDA declining 12% and a resilient EBITDA margin at 15.8% (16.8%
in 2019). Adhesive Solutions played their part in this very
challenging context, with EBITDA comparable to the 2019 level (€261
million versus €264 million in 2019), and EBITDA margin improving
to 13.1% (12.9% in 2019). EBITDA of Intermediates fell sharply,
reflecting the more cyclical nature of these businesses and
penalized by unfavorable market conditions, particularly in
Fluorogases, as well as by a negative scope effect related to the
divestment of Functional Polyolefins.
Recurring operating income (REBIT) totaled €619
million, representing a REBIT margin of 7.9%.
This figure includes recurring depreciation and amortization of
€563 million, up €32 million on 2019, mainly attributable to the
integration of acquisitions and the start-up of new production
units, partly offset by a favorable currency effect and the
divestment of Functional Polyolefins.
The financial result represented a net expense of €85
million, down by a significant €31 million compared with 2019.
This year-on-year change is primarily due to a better interest rate
on the portion of the Group’s debt swapped into US dollars, and to
the refinancing in December 2019, at favorable market conditions,
of the €480 million senior bonds that matured in April 2020.
Excluding exceptional items, the Group’s tax rate amounted to
22% of REBIT in 2020. In 2021, the tax rate excluding exceptional
items is expected to amount to around 22% of REBIT.
Adjusted net income came in at €391 million,
representing €5.11 per share.
Cash flow and net debt at 31 December 2020
Following a record third quarter, free cash flow amounted
to €116 million in the fourth quarter and reached €651
million for the full year, close to the excellent level
achieved in 2019 (€667 million).
This amount, which includes €140 million of exceptional capital
expenditure, led to an EBITDA to cash conversion rate of 67%
(6).
The 2020 free cash flow figure included a €196 million inflow
linked to the change in working capital (+€82 million in 2019),
reflecting strict management of inventories and receivables in a
very volatile year as well as the rebound in activity toward the
end of the year. At 31 December 2020, the ratio of working capital
to annual sales was at a record low of 11.8% (including the PMMA
business) compared with 13.8% at 31 December 2019.
Recurring and exceptional capital expenditure totaled €600
million for the year, €100 million lower than the amount originally
planned for 2020 and in line with the guidance issued on the
release of the Group’s first-quarter results. At €460 million,
recurring capital expenditure represented 5.8% of sales.
Exceptional capital expenditure totaled €140 million and is
expected to amount to around €250 million in 2021, with the
progress of the Nutrien project for the supply of hydrofluoric acid
in the United States and the construction of the bio-based
polyamide plant in Singapore. Consequently, recurring and
exceptional capital expenditure is expected to amount to around
€750 million in 2021.
Cash flows from portfolio management operations
represented a net inflow of €6 million in 2020. This amount
includes the bolt-on acquisitions of LIP, Fixatti and Ideal Work in
the Adhesive Solutions segment, as well as the acquisition of CPS
in Coating Solutions, offset by the proceeds received from the
divestment of Functional Polyolefins. In 2019, cash flows from
portfolio management operations represented a net outflow of €729
million and included notably the acquisition of ArrMaz in
Performance Additives.
Cash flow from financing activities represented a net
outflow of €535 million in 2020. This figure primarily
includes the proceeds from the €300 million green bond issue
dedicated to the financing of the bio-based polyamide plant in
Singapore, the reimbursement of the €480 million senior debt and
the payment of the 2019 dividend, which was limited to €2.20 per
share in the context of the pandemic, representing an aggregate
€168 million. The cost of share buybacks was €25 million in 2020,
and interest paid on the Group's €300 million and €400 million
hybrid bonds amounted to €28 million.
Including the hybrid bonds, net debt stood at €1.91
billion at end-December 2020 versus €2.33 billion at 31
December 2019. The ratio of net debt (including hybrid bonds) to
EBITDA remained well controlled at 1.6x, at the prior year
level.
As part of the policy to gradually increase shareholder returns,
the Group is proposing to implement a dynamic cash allocation
program in line with the guidelines presented at the Capital
Markets Day in April 2020. The Board of Directors has decided that
at the 20 May 2021 general meeting it will recommend a dividend
payment of €2.50 per share, to be paid entirely in cash. Shares
will be traded ex-dividend on 26 May 2021 and the dividend will be
paid as from 28 May 2021.
Moreover, the Group will implement a share buyback program for a
total amount of €300 million, after the closing of the divestment
of the PMMA business, which should be finalized mid-year. The
modalities of the implementation of this program will be announced
at a later stage.
These provisions include the restitution to shareholders of the
€0.50 per share portion of the dividend which had been retained in
2020 in the context of the pandemic.
CSR commitments
Since its creation, through its corporate social responsibility
(CSR) approach Arkema has been committed to creating sustainable
value across the whole value chain with its suppliers, partners,
employees and customers.
As part of the portfolio sustainability assessment, the Group
increased to 72% the share of sales assessed at end-2020, against
44% at end-2019. Based on this new scope, the proportion of sales
deemed to make a significant contribution to the United Nations'
Sustainable Development Goals (SDGs) stood at 50%, up 4 points
relative to 2019. In light of this progress driven by its
innovation dynamic and in order to reinforce its commitment in
terms of sustainable offerings, the Group has decided to set itself
the ambitious objective of increasing to 65% the proportion of its
sales that significantly contribute to the SDGs by 2030 (ImpACT+
objective).
The Group has also stepped up its expectations in terms of the
climate and environment and saw positive movements in its key
indicators in 2020. For example, greenhouse gas emissions (7) and
the intensity of chemical oxygen demand (7) were around 10% lower
than in 2019, thanks to direct actions taken by the Group and, to a
lesser extent, reduced production volumes. The Group is also
pursuing its measures to limit emissions of volatile organic
compounds (7), as well as net energy purchases, the intensity of
which decreased more moderately given the impact of lower volumes.
Additionally, 2020 was marked by a record-high safety performance
with a TRIR (8) of 1.0.
The Group has also set itself more ambitious objectives in terms
of diversity, reflecting the Group’s geographic expansion, its
commitment to equal opportunities and in clear recognition of the
positive contribution that diversity makes to the company’s
performance. Consequently, the Group has increased to 30% its
objective for the proportion of women in senior management by 2030
and to 50% that of non-French nationals.
Furthermore, in November 2020, Arkema joined the DJSI World
index, ranking sixth in the “Chemicals” category out of the 114
companies assessed, and S&P Global’s Sustainability Yearbook
2021, receiving the Bronze class distinction in early 2021. The
Group is thus rewarded for its performance in terms of
sustainability and for integrating its CSR approach into its
development strategy – an approach that will create long-term
value.
Finally, the Group announces the creation of a third committee
of the Board of Directors, the Innovation and Sustainable Growth
committee, whose mission will be in particular to assess the
contribution of Arkema’s innovation and strategy to environmental
challenges and sustainable growth. Together with the Audit and
Accounts committee and the Nominating, Compensation and Corporate
Governance committee, this committee will enable all the CSR issues
to be covered.
2020 performance by segment
Adhesive Solutions (25.5% of total Group sales)
(In millions of euros)
2020
2019
YoY change
Sales
1,996
2,055
-2.9%
EBITDA
261
264
-1.1%
EBITDA margin
13.1%
12.9%
Recurring operating income (REBIT)
198
205
-3.4%
REBIT margin
9.9%
10.0%
Sales of the Adhesive Solutions segment were down 2.9% to
€1,996 million in 2020. The 4.1% decline in volumes reflects
mainly the very strong slowdown in the construction market in the
second quarter and the decline in industrial markets during the
year. Prices held up well (+0.5%) in this context of low volumes.
The integration of LIP, Ideal Work and Fixatti resulted in a 3.1%
positive scope effect, while the currency effect trimmed 2.4% off
sales. The performance of Adhesive Solutions was very resilient in
2020 with EBITDA broadly stable at €261 million (€264
million in 2019). EBITDA margin amounted to
13.1%, up 20 bps on 2019, confirming the solidity of the
adhesives business when the environment is less favorable. The
margin also benefited from the improved operating efficiency of
this segment and mix optimization toward higher added value
products.
Advanced Materials (32% of total Group sales)
(In millions of euros)
2020
2019
YoY change
Sales
2,527
2,693
-6.2%
EBITDA
496
584
-15.1%
EBITDA margin
19.6%
21.7%
Recurring operating income (REBIT)
245
353
-30.6%
REBIT margin
9.7%
13.1%
Sales of the Advanced Materials segment were down 6.2% to
€2,527 million, impacted mainly by the 8.3% decline in
volumes in the context of the health crisis. In High Performance
Polymers, demand fell in the transportation, oil & gas and
consumer goods markets despite the improvement seen in the fourth
quarter, overshadowing the strong growth in batteries, where the
Group leveraged its innovation. The animal nutrition, crop
protection and medical markets supported Performance Additives,
partly offsetting the declines in industrial markets. The price
effect of -0.8% confirmed the segment’s ability to maintain stable
selling prices despite the strong decline in volumes. Finally, the
scope effect of +4.4% corresponded to the integration of ArrMaz in
the first half of the year, and the currency effect was a negative
1.5%. In this context, EBITDA declined 15.1% to €496
million, the reduction in fixed costs and more favorable raw
materials prices mitigating the impact of lower volumes. EBITDA
margin remained at a high level at 19.6% (21.7% in
2019), confirming the segment’s good performance in a more
challenging macroeconomic context.
Coating Solutions (24.5% of total Group sales)
(In millions of euros)
2020
2019
YoY change
Sales
1,911
2,148
-11.0%
EBITDA
261
310
-15.8%
EBITDA margin
13.7%
14.4%
Recurring operating income (REBIT)
142
197
-27.9%
REBIT margin
7.4%
9.2%
Sales of the Coating Solutions segment decreased 11.0% to
€1,911 million, reflecting a 9.4% negative price
effect which was mainly linked to the decline in propylene prices.
Volumes were down by 1.2%, with the strong recovery in the
decorative paints market in the second half of the year offsetting
to a large extent lower volumes in the segment’s other markets
during the year. At €261 million, Coating Solutions’
EBITDA was down 15.8% relative to last year, strongly
impacted by the acrylics activities that are not integrated
downstream. Performance for the segment’s other activities was
robust, with EBITDA up slightly on last year. EBITDA margin
resisted well at 13.7% (14.4% in 2019), supported by cost
reduction initiatives and synergies between the segment’s different
product lines.
Intermediates (18% of total Group sales)
(In millions of euros)
2020
2019
YoY change
Sales
1,425
1,816
-21.5%
EBITDA
231
381
-39.4%
EBITDA margin
16.2%
21.0%
Recurring operating income (REBIT)
109
261
-58.2%
REBIT margin
7.6%
14.4%
At €1,425 million, sales of the Intermediates segment
were down 21.5% year on year, impacted by unfavorable market
conditions, particularly in Fluorogases. The price effect was a
negative 10.8% and the volume effect was a negative 2.3%, supported
in the fourth quarter by improved demand in PMMA and acrylics in
Asia. The scope effect was a negative 7.1% and corresponded to the
divestment of the Functional Polyolefins business finalized on 1
June 2020. In the context of the pandemic, the segment’s
EBITDA decreased sharply year on year to €231 million
and EBITDA margin dropped to 16.2%.
Outlook for 2021
In an environment that is still uncertain, particularly with
regards to the pandemic, the start of the year is marked by an
increase in the level of global demand, in the continuity of
fourth-quarter 2020. EBITDA for first-quarter 2021 could
thus rise by around 10% relative to first-quarter 2020,
including a negative currency impact estimated at €15 million.
Moreover, the growth of Arkema’s EBITDA during the year should
be concentrated in Specialty Materials (82% of Group sales in
2020). Excluding a significant resumption of the pandemic,
- Arkema aims at constant currency (9) for Specialty Materials
EBITDA to grow by around 10% in 2021 relative to 2020
- Bostik, in line with its 2024 trajectory, is aiming
for 14% EBITDA margin in 2021, thanks to the benefits of its
positioning in the construction and high-performance industrial
adhesives markets, and its operational excellence initiatives, as
well as its acquisition strategy.
- The Advanced Materials segment should record a
significant rebound, driven in particular by its innovations in
batteries, electronics, lightweight materials, sporting goods and
filtration, as well as by higher demand in certain industrial
markets, animal nutrition and crop protection.
- Finally, earnings of Coating Solutions should be
supported by the growth momentum and sustainable innovation in the
paints, electronics and 3D printing markets.
- EBITDA for the Intermediates segment in 2021 is expected
to be at a comparable level to 2020 at constant currency (9)
and scope. The divestment of PMMA is expected to close in
mid-year.
Moreover, in 2021 the Group will continue to execute its
mid-term strategy presented at the Capital Markets Day in April
2020, in line with its ambition to become a pure Specialty
Materials player by 2024. In this respect, the two major industrial
projects – the bio-based polyamides plant in Singapore and
hydrofluoric acid plant in the United States – will progress as
expected and come on stream mid-2022. Arkema will pursue its
bolt-on acquisition strategy in Specialty Materials, particularly
in Adhesive Solutions, and will accelerate the strategic review of
Fluorogases. Lastly, the Group will reinforce its innovation for
sustainable development given the opportunities arising from
governments’ stimulus plans in the fields of new mobility, home
comfort and management of natural resources.
Subsequent events
In order to strengthen Bostik’s position in the fast-growing
construction adhesives market in Brazil, on 9 February 2021, Arkema
announced the planned acquisition of Poliplas, a leader in hybrid
technology sealants and adhesives, which generated almost €10
million in sales in 2020. This acquisition is aligned with Bostik’s
growth strategy in the construction market and will strengthen its
presence in high-growth regions.
Moreover, the exceptional cold spell which hit south western US
and in particular Texas in mid-February, led to important
operational disruptions across the whole industry. The Group, like
many other chemicals companies, has had to declare force majeure
for certain sites and has faced higher energy and raw material
prices. The teams are mobilized to resume operations in the best
conditions.
Finally, on 23 February 2021, Arkema announced it will invest to
further increase its Kynar® fluoropolymer production capacities by
35% at its Changshu site in China. This new investment is fueled by
further strong demand in the lithium-ion battery business as well
as significant opportunities in the water filtration, construction
coatings, and semiconductor industries. The increase in capacity is
scheduled to come on stream before the end of 2022.
Further details about the Group’s 2020 results and outlook are
provided in the “Full year 2020 results and outlook” presentation
available on Arkema’s website at
https://www.arkema.com/global/en/investor-relations/
The consolidated financial statements at 31 December 2020 have
been audited, and an unqualified certification report has been
issued by the Company’s statutory auditors. These financial
statements and the statutory auditors’ report will be available in
March in the Company’s Universal Registration Document 2020, which
will be posted on Arkema’s website at
www.arkema.com/global/en/investor-relations/
Financial calendar
6 May 2021
Publication of first-quarter 2021
results
20 May 2021
Annual General Meeting
29 July 2021
Publication of first-half 2021
results
10 November 2021
Publication of third-quarter 2021
results
Building on its unique set of expertise in materials science,
Arkema offers a world-leading technology portfolio to
address ever-growing demand for new and sustainable materials. With
the ambition to become in 2024 a pure player in Specialty
Materials, the Group is structured into three complementary,
resilient and highly innovative segments dedicated to Specialty
Materials – Adhesive Solutions, Advanced Materials and Coating
Solutions – accounting for some 82% of Group sales, and a
well-positioned and competitive Intermediates segment. Arkema
offers cutting-edge technological solutions to meet the challenges
of, inter alia, new energies, access to water, recycling,
urbanization and mobility, and fosters a permanent dialogue with
all its stakeholders. The Group reported sales of €7.9 billion in
2020, and operates in some 55 countries with 20,500 employees
worldwide. www.arkema.com
Disclaimer
The information disclosed in this press release may contain
forward-looking statements with respect to the financial position,
results of operations, business and strategy of Arkema.
In the current context, where the Covid-19 epidemic continues to
spread across the world, and the evolution of the situation as well
as the magnitude of its impacts on the global economy are highly
uncertain, the retained assumptions and forward-looking statements
could ultimately prove inaccurate.
Such statements are based on management’s current views and
assumptions that could ultimately prove inaccurate and are subject
to risk factors such as (but not limited to) changes in raw
materials prices, currency fluctuations, the pace at which
cost-reduction projects are implemented, developments in the
Covid-19 situation, and changes in general economic and financial
conditions. Arkema does not assume any liability to update such
forward-looking statements whether as a result of any new
information or any unexpected event or otherwise. Further
information on factors which could affect Arkema’s financial
results is provided in the documents filed with the French Autorité
des marchés financiers.
Balance sheet, income statement and cash flow statement data as
well as data relating to the statement of changes in shareholders’
equity and information by segment included in this press release
are extracted from the consolidated financial information at 31
December 2020 as reviewed by Arkema’s Board of Directors on 24
February 2021. Quarterly financial information is not audited.
Information by segment is presented in accordance with Arkema’s
internal reporting system used by management.
Details of the main alternative performance indicators used by
the Group are provided in the tables appended to this press
release. For the purpose of analyzing its results and defining its
targets, the Group also uses EBITDA margin, which corresponds to
EBITDA expressed as a percentage of sales, EBITDA equaling
recurring operating income (REBIT) plus recurring depreciation and
amortization of tangible and intangible assets, as well as REBIT
margin, which corresponds to recurring operating income (REBIT)
expressed as a percentage of sales.
For the purpose of tracking changes in its results, and
particularly its sales figures, the Group analyzes the following
effects (unaudited analyses):
- scope effect: the impact of changes in the Group’s scope
of consolidation, which arise from acquisitions and divestments of
entire businesses or as a result of the first-time consolidation or
deconsolidation of entities. Increases or reductions in capacity
are not included in the scope effect;
- currency effect: the mechanical impact of consolidating
accounts denominated in currencies other than the euro at different
exchange rates from one period to another. The currency effect is
calculated by applying the foreign exchange rates of the prior
period to the figures for the period under review;
- price effect: the impact of changes in average selling
prices is estimated by comparing the weighted average net unit
selling price of a range of related products in the period under
review with their weighted average net unit selling price in the
prior period, multiplied, in both cases, by the volumes sold in the
period under review;
- volume effect: the impact of changes in volumes is
estimated by comparing the quantities delivered in the period under
review with the quantities delivered in the prior period,
multiplied, in both cases, by the weighted average net unit selling
price in the prior period.
1 Specialty Materials include the three following segments:
Adhesive Solutions, Advanced Materials and Coating Solutions 2
Before allocation of corporate costs 3 Dividend proposed at the
general meeting of 20 May 2021 4 This project is still subject to
the approval of the relevant antitrust authorities and to an
information and consultation process involving Arkema’s employee
representative bodies 5 With the assumption of a €/$ rate of 1.2
for 2021, the impact on 2020 EBITDA is estimated at a negative €30
million for Specialty Materials and a negative €10 million for
Intermediates 6 EBITDA to cash conversion rate corresponds to free
cash flow excluding exceptional capital expenditure divided by
EBITDA 7 In absolute value terms for greenhouse gases and in
intensity terms for VOC, COD and energy 8 Total recordable injury
rate per million hours worked 9 With the assumption of a €/$ rate
of 1.2 for 2021, the impact on 2020 EBITDA is estimated at a
negative €30 million for Specialty Materials and a negative €10
million for Intermediates
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version on businesswire.com: https://www.businesswire.com/news/home/20210224006223/en/
INVESTOR RELATIONS Béatrice Zilm +33 1 49 00 75 58
beatrice.zilm@arkema.com Peter Farren +33 1 49 00 73 12
peter.farren@arkema.com Mathieu Briatta +33 1 49 00 72 07
mathieu.briatta@arkema.com Caroline Chung +33 1 49 00 74 37
caroline.chung@arkema.com MEDIA Gilles Galinier +33 1 49 00
70 07 gilles.galinier@arkema.com Véronique Obrecht +33 1 49 00 88
41 veronique.obrecht@arkema.com
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