Our parent company Arkema achieved a very solid financial performance in the third quarter, marked by a slight increase in EBITDA and strong cash flow generation in a more challenging economic environment. Results are contrasted by region and benefitted from the acceleration of innovation in sustainable megatrends. The Group confirms its EBITDA target for 2022.
- Sales up by 24% compared with Q3’21 to €3.0 billion:
- Growing demand for high value-added solutions in batteries, lightweighting, bio-based and recycled materials, 3D printing…
- Continuation of the Group’s initiatives to adjust its selling prices in the face of raw materials and energy cost inflation
- Volumes globally down, with contrasting trends by region and end-market
- EBITDA up slightly to €495 million (€474 million in Q3’21) and EBITDA margin of 16.7%. An 8% increase in Specialty Materials’ EBITDA, driven by the Adhesive Solutions and Advanced Materials segments, and an 18% decrease in Intermediates’ EBITDA
- Adjusted net income of €260 million (€258 million in Q3’21), representing €3.52 per share
- Strong cash generation, with recurring cash flow of €434 million (€236 million in Q3’21). Net debt tightly controlled at €2,615 million (€2,789 million at end-June 2022), including €700 million in hybrid bonds
- Strengthening of the Group’s CSR commitments and initiatives, in particular in terms of climate action, and further improvement in its Moody’s ESG Solutions score, positioning Arkema among the very best in its industry
- Full year guidance confirmed: Arkema aims to achieve EBITDA of €2,100 million in 2022, i.e. annual EBITDA growth of around 20% at constant scope compared with 2021
- Continued strategy to invest in Specialty Materials and strengthening of initiatives to reduce costs and improve competitiveness in the face of the economic slowdown
“Our financial performance benefited from the diversification of our end markets, our balanced geographic footprint, and our growth momentum from new opportunities created by global megatrends. Thanks to all the teams’ efforts, the Group has adapted to the strong inflation in energy and raw materials prices, the destocking observed among certain customers and the lack of visibility in our operating environment.
With its low-debt balance sheet, Arkema will continue to implement its long-term strategy focused on innovative materials for a sustainable world, while taking the necessary steps to adapt to the expected slowdown in the global economy, already observed in Europe. The Group will thus immediately step up its initiatives to improve its cost base, while benefiting from its new capacities in Asia and the United States, and from the ramp-up of Ashland’s adhesives. Moreover, Arkema will continue to invest significantly in high-growth areas, in particular batteries, 3D printing, medical applications, electronics, high performance sports, eco-friendly paints and, more generally, in its bio-based and recycled polymers and resins.
Lastly, supported by the commitment of all our employees, we will continue our actions for climate change, sustainable development and the circular economy, in line with the long-term evolution of the Group’s profile.”
Outlook for 2022
In this environment, the Group will continue to benefit from the strength of its innovation in high performance materials, its balanced geographical presence, the diversity of its end markets and the solidity of its low-debt balance sheet. It will ensure it adapts quickly to the evolution of the economic context, reinforcing its cost-saving initiatives, notably in Europe, and strictly managing its inventories.
In light of these elements, Arkema is confirming its annual target and thus aims to achieve EBITDA of €2,100 million in 2022, representing annual EBITDA growth at constant scope of around 20% compared with 2021. Fourth-quarter EBITDA, which includes the destocking expected at year-end, should be comparable to the pre-Covid level of 2019, but below Q4’21 which benefited from significant restocking.
Moreover, the Group is reaffirming its confidence in its ability to achieve the ambitious targets it has set for 2024. As of 2023, it will benefit from the start-up of several significant capacity expansions for growing, high value-added products, and will continue to implement its strategic roadmap for sustainable development.
Further details concerning the Group’s third-quarter 2022 results are provided in the “Third-quarter 2022 results and highlights” presentation and the “Factsheet” document, both available on Arkema’s website.