Regulatory News:
Arkema (Paris:AKE):
Supported by accelerating demand for innovative,
high-performance materials, in an environment marked by strong
inflation of raw materials and supply chain disruptions, Group
EBITDA rose by a significant 54.4% year-on-year, and is well above
the pre-Covid level of 2019. This performance reflects in
particular the evolution in the Group's profile towards Specialty
Materials and its unique positioning to provide technological
solutions that address the major challenges linked to sustainable
development.
- Group sales of €2.4 billion, up, at constant
scope and currency, nearly 30% versus 2020 and approximately 17%
versus 2019:
- Accelerating demand for cutting-edge and sustainable solutions,
notably in batteries, material lightweighting and design,
high-performance bonding and more environmentally friendly
products
- Solid growth in volumes (+5.3% versus Q3’20) in an operating
context marked by the shortage of an increasing number of raw
materials and logistics constraints in Asia and the United
States
- In a context of strong raw materials and energy inflation,
significant increase in selling prices (+23.8% versus Q3’20),
reflecting the Group’s initiatives to adapt to the situation, as
well as an improved product mix
- EBITDA of €474 million, up by a strong 54.4%
compared to Q3’20, and EBITDA margin of close to 20%,
a record level for a third quarter:
- Specialty Materials’ EBITDA up 57.1% to €421 million, with
growth across all segments, and well above the pre-Covid level
(+34.9% versus Q3’19)
- Intermediates’ EBITDA of €74 million, benefiting from favorable
market conditions that more than offset the negative scope effect
related to the PMMA divestment
- Adjusted net income multiplied by 2.4 at €258
million, representing €3.44 per share
- Net debt of €1.255 billion (including €700
million in hybrid bonds), representing 0.8x last-twelve-months
EBITDA, integrating a recurring cash flow (1) of €236
million
- New step in the strategy to refocus on Specialty Materials with
the acquisition of Ashland’s performance adhesives business on 31
August
- Full-year targets significantly raised again: for 2021,
Arkema is now targeting growth of at least 40% in Specialty
Materials’ EBITDA relative to 2020 at constant scope and currency
(2), resulting in a new forecast for Group EBITDA at around €1.6
billion
Following Arkema’s Board of Directors' meeting, held on 9
November 2021 to review the Group’s consolidated financial
information for the third quarter of 2021, Chairman and CEO Thierry
Le Hénaff said:
“We can be proud of Arkema’s strong financial performance,
achieved in a complex and demanding operating environment. I would
like to particularly thank our teams, as these results reflect both
their high quality work and their faultless level of
commitment.
It is our whole sustainable growth strategy which really stands
out. Our Specialty Materials are fully benefiting from their
positioning on societal megatrends. We are seeing our developments
accelerate structurally across many high-stake markets, such as
batteries, 3D printing, eco-friendly paint, sports, home comfort
and electronics.
Moreover, we are actively continuing the roll-out of our 2024
strategy and the refocusing of the Group toward Specialty
Materials. Thus, by acquiring Ashland’s performance adhesives
business, we will strengthen our Adhesive Solutions segment with
this first-class activity, which through its technological
know-how, will enable Bostik to accelerate its growth. The
divestment of our epoxides business to Cargill is also in line with
our pro-active management of the portfolio.
These positive developments make us truly confident about the
future. In this fast-changing world, our cutting-edge innovation in
high-performance materials for sustainable solutions, our current
and prospective major industrial projects, and our bolt-on
acquisition policy provide us with many growth opportunities.”
KEY FIGURES FOR THIRD-QUARTER 2021
in millions of euros
Q3'21
Q3'20
Change
Sales
2,398
1,909
+25.6%
EBITDA
474
307
+54.4%
Specialty Materials
421
268
+57.1%
Intermediates
74
55
+34.5%
Corporate
-21
-16
EBITDA margin
19.8%
16.1%
Specialty Materials
20.1%
16.9%
Intermediates
24.7%
17.5%
Recurring operating income (REBIT)
343
171
+100.6%
REBIT margin
14.3%
9.0%
Adjusted net income
258
109
+136.7%
Adjusted net income per share (in €)
3.44
1.42
+142.3%
Recurring cash flow
236
311
-24.1%
Free cash flow
74
285
-74.0%
Net debt including hybrid bonds
1,255
1,869
€1,910m as of 31/12/2020
THIRD-QUARTER 2021 BUSINESS PERFORMANCE
Sales rose 25.6% year-on-year to €2,398
million. At constant scope and currency, sales were up 29.1%
compared to last year and 17.2% versus Q3’19. Despite shortages in
an increasing number of raw materials, particularly in Adhesive
Solutions, and certain logistics constraints in Asia and the United
States, volumes rose by 5.3%, supported by accelerating demand for
sustainable, high-performance materials used in applications
relating to societal megatrends. Driven by the Group’s innovation
and technological know-how, growth remained strong in the battery,
consumer goods, electronics and transportation markets, although a
slowdown was observed in the automotive sector. The oil & gas
and paper markets remained lower year-on-year. The 23.8% positive
price effect reflects the continuation of the Group’s active policy
to pass on in its sales prices the significant inflation in raw
materials, energy and logistics costs, tight market conditions in
the acrylics chain, as well as mix improvement through the
development of high value-added products. The scope effect was a
negative 4.6%, as the divestment of PMMA was only partially offset
by acquisitions in Adhesive Solutions and Advanced Materials. The
currency effect was limited (+1.1%). In third-quarter 2021,
Specialty Materials sales accounted for 87.5% of total Group sales
(83% in Q3'20).
EBITDA was up sharply by almost 55% to €474
million, despite a negative scope effect of approximately €30
million and a complex operating environment. This very good
performance, driven by the increase in volumes, particularly in
High Performance Polymers and Coating Solutions, and by the
improved product mix toward solutions with high technological
content, is also a reflection of the Group’s positioning in
structurally growing applications and markets. Supported by price
increases in each segment in an environment of high inflation in
raw materials, energy and transportation costs, and benefiting from
a favorable context in acrylics, all segments grew significantly,
also reflecting the diversity of the Group’s end markets and
geographic exposure. Specialty Materials’ EBITDA came in at €421
million, up by a sharp 57.1% year-on-year and by 34.9% versus
Q3’19.
In this context, the Group's EBITDA margin, up 370 bps to
19.8%, reached a record level for a third quarter.
At €343 million, recurring operating income
(REBIT) doubled year-on-year. This figure includes recurring
depreciation and amortization of €131 million, down €5 million
compared to third-quarter 2020, primarily due to the scope effect.
The REBIT margin improved significantly by 530 bps to reach
14.3%.
Adjusted net income rose very sharply to €258
million, representing €3.44 per share, versus €109
million in Q3'20. For the first nine months of the year, excluding
exceptional items, the tax rate came in at 20% of recurring
operating income.
CASH FLOW AND NET DEBT AT 30 SEPTEMBER 2021
In third-quarter 2021, Arkema reported recurring cash
flow of €236 million (€311 million in third-quarter
2020). This figure includes an outflow of €103 million (inflow of
€158 million in Q3’20), linked to the increase in working capital
in a context marked by a strong inflation of raw materials prices
and a progressive rebuilding of inventories relative to a
particularly low level at the end of June. At end-September 2021,
working capital remained tightly controlled and represented 12.3%
of annualized sales (13.9% at end-September 2020 and 16.4% at
end-September 2019), a ratio that is still below the normative
level in a context of sustained demand and tightness in certain raw
materials. Recurring cash flow also includes recurring capital
expenditure of €111 million, virtually stable year-on-year (€105
million in Q3'20).
Free cash flow came in at €74 million (€285
million in Q3’20) and includes a non-recurring outflow of €98
million corresponding mainly to the payment of part of the capital
gains tax linked to the divestment of PMMA. The free cash flow
figure also includes the ramp-up of exceptional capital expenditure
(€64 million versus €33 million in Q3'20), relating to the
bio-based polyamides unit in Singapore and the hydrofluoric acid
supply project with Nutrien in the United States.
At 30 September 2021, including hybrid bonds, net debt of
€1.255 billion was stable versus 30 June 2021 (€1.28 billion)
and the net debt (including hybrid bonds) to last-twelve-months
EBITDA ratio stood at 0.8x.
THIRD-QUARTER 2021 PERFORMANCE BY SEGMENT
ADHESIVE SOLUTIONS (24% OF TOTAL GROUP
SALES)
in millions of euros
Q3'21
Q3'20
Change
Sales
568
516
+10.1%
EBITDA
79
73
+8.2%
EBITDA margin
13.9%
14.1%
Recurring operating income (REBIT)
63
57
+10.5%
REBIT margin
11.1%
11.0%
Sales of the Adhesive Solutions segment totaled €568
million, up 10.1% relative to third-quarter 2020. In a context
of robust demand in the construction market and in high-performance
industrial applications, volumes were impacted by difficulties to
source raw materials and logistics constraints, particularly in the
United States and in Asia. They fell 2.3% compared to the high
comparison base of Q3’20, which was supported by a strong rebound
in the construction market. Up 6.6%, the price effect reflected the
Group’s actions to pass on the sustained inflation in raw
materials. The 4.8% positive scope effect corresponds to the
integration of Fixatti, Ideal Work, Poliplas and Edge Adhesives
Texas, and the currency effect was a positive 1.0%.
At €79 million, EBITDA for the segment was up 8.2%
relative to third-quarter 2020, and the EBITDA margin
remained at a very high level of 13.9%, stable compared to
the prior year (14.1% in Q3’20) despite the mechanical dilutive
impact of price increases on this ratio. This robust performance
integrates the benefits of pricing actions to offset increases in
raw material prices, and also reflects operational excellence
actions, the repositioning toward higher added-value applications,
and the integration of bolt-on acquisitions. In this context, which
is less favorable than expected, the Group is maintaining its 14%
EBITDA margin target for the full year, representing an increase of
almost 100 bps compared to last year.
ADVANCED MATERIALS (32.5% OF TOTAL
GROUP SALES)
in millions of euros
Q3'21
Q3'20
Change
Sales
781
603
+29.5%
EBITDA
174
127
+37.0%
EBITDA margin
22.3%
21.1%
Recurring operating income (REBIT)
111
66
+68.2%
REBIT margin
14.2%
10.9%
At €781 million, sales of the Advanced Materials
segment were up a very significant 29.5% year-on-year. With volumes
up 13.3%, the Advanced Materials segment continued to benefit from
the strong increase in volumes of High Performance Polymers linked
to major sustainable trends, notably in batteries, sports and
bio-based consumer goods. Performance Additives recorded more
moderate growth, impacted by health restrictions in Malaysia, and
soft demand in the oil & gas and paper markets. The price
effect was up by a sharp 14.6%, reflecting price increase
initiatives in the context of raw materials inflation and an
improved product mix toward high-performance applications. The 0.8%
positive scope effect reflects the integration of Agiplast. The
currency effect on the segment was a positive 0.8% over the
quarter.
In this context of accelerating demand for sustainable,
high-performance materials, EBITDA for the segment was up
37.0% year-on-year to €174 million, far exceeding the
pre-Covid level of Q3’19 (€159 million). This figure reflects the
strong dynamic of new business development in solutions for
sustainable development, while the automotive (excluding batteries)
and oil & gas markets were less supportive. The EBITDA
margin reached the high level of 22.3% (21.1% in Q3’20
and 22.5% in Q3’19).
COATING SOLUTIONS (31% OF TOTAL GROUP
SALES)
in millions of euros
Q3'21
Q3'20
Change
Sales
742
469
+58.2%
EBITDA
168
68
+147.1%
EBITDA margin
22.6%
14.5%
Recurring operating income (REBIT)
138
39
+253.8%
REBIT margin
18.6%
8.3%
At €742 million, sales of the Coating Solutions
segment were up sharply by 58.2% compared to last year. Despite the
impact of the shortage of certain raw materials, volumes increased
by 5.8%, driven by continued strong demand in decorative paints,
industrial coatings, 3D printing, graphic arts and electronics. The
positive 52.4% price effect is linked both to price actions
implemented in downstream product lines to offset the strong
inflation in raw materials, and relative tightness of the acrylics
market. The currency effect was neutral on third-quarter 2021
sales.
With a very sharp rise in EBITDA to €168 million
(€68 million in Q3’20 and €82 million in Q3’19), the Coating
Solutions segment delivered another very good quarter. It benefited
from accelerating demand for more environmentally friendly and
higher added-value solutions, as well as from improved market
conditions in the acrylics. In this favorable environment, the
EBITDA margin remained at a very high level at 22.6%
(14.5% in third-quarter 2020 and 15.4% in third-quarter 2019).
INTERMEDIATES (12.5% OF TOTAL GROUP
SALES)
in millions of euros
Q3'21
Q3'20
Change
Sales
300
315
-4.8%
EBITDA
74
55
+34.5%
EBITDA margin
24.7%
17.5%
Recurring operating income (REBIT)
53
27
+96.3%
REBIT margin
17.7%
8.6%
At €300 million, sales of the Intermediates
segment decreased by 4.8% year-on-year. The divestment of the PMMA
business, finalized in May 2021, resulted in a negative scope
effect of 37.5%. The price effect for the quarter was significant
(+27.6%), mainly reflecting more favorable market conditions for
acrylics in Asia and an improvement in Fluorogases in the United
States. Volumes in the segment grew by 1.6%, held back by the
reduction in acrylics production toward the end of the quarter,
following the Chinese authorities' measures aimed at limiting
energy consumption. The currency effect was a positive 3.5%.
Intermediates EBITDA increased by 34.5% to €74
million, and the EBITDA margin came in at 24.7%
compared to 17.5% in the prior-year period.
THIRD-QUARTER 2021 HIGHLIGHTS
In line with the Group’s ambition to become a pure Specialty
Materials player by 2024, Arkema announced on 31 August 2021 the
proposed acquisition of Ashland’s performance adhesives business, a
first-class leader in high-performance adhesives in the United
States. With sales of around US$ 360 million (3) and EBITDA at the
very high level of around US$ 95 million (3) in 2021, Ashland
offers a portfolio of high-performance adhesive solutions in high
value-added industrial applications. The offer was made on the
basis of a US$ 1,650 million enterprise value, or 15x estimated
2021 EBITDA (3) after taking into account the tax benefits linked
to the structure of the transaction. The EV/EBITDA multiple is
reduced to 8.7 by 2026 including pre-tax synergies, estimated at
12.5% of sales. This acquisition also allows Arkema to revise
upwards the 2024 profitability target of the Adhesive Solutions
segment, which now aims for an EBITDA margin above 17%, among the
best in the industry, and sales exceeding €3 billion.
On 27 September 2021, Arkema also announced the proposed
divestment of its epoxides business to Cargill, a leader in
agricultural products and services, pursuing the repositioning of
its portfolio on its core businesses.
Moreover, in September 2021, the Group received an ESG score of
67/100 from the V.E (Vigeo Eiris) rating agency, placing it in the
top percentile of companies across all sectors, thereby recognizing
its performance in Corporate Social Responsibility.
Finally, on 6 July 2021, Arkema announced that it had acquired a
stake in Verkor, a French start-up specialized in the production of
high-performance batteries. Arkema, a key player thanks to its
cutting-edge materials and the innovative solutions that it
provides in batteries, in particular for electric vehicles, is thus
strengthening its development in batteries and clean mobility.
SUBSEQUENT EVENTS
In parallel with its major project to increase global capacity
of bio-based polyamide 11 by 50% in Singapore, on 11 October 2021,
Arkema announced the construction of a polyamide 11 powders plant
on its Changshu platform in China, scheduled to come on stream in
the first quarter of 2023. This investment will further support the
growing demand for advanced bio-circular materials in Asia and is
included in the €450 million exceptional capital expenditure
envelope dedicated to polyamide expansion in Asia.
OUTLOOK FOR 2021
Activity in the fourth quarter of 2021 is expected to be in line
with the previous few months. Operational performance will continue
to be impacted by the unavailability and inflation of certain raw
materials, logistical difficulties and rising energy and
transportation costs. These factors will continue to guide the
Group’s selling price policy. The automotive sector will also
remain impacted by the shortage of electronic components, and
energy restrictions in China could temporarily reduce demand in the
region.
While remaining attentive to the evolution of the macro-economic
context, Arkema will continue to greatly benefit from the
repositioning of its portfolio towards Specialty Materials and from
the very positive momentum driven by major sustainable trends,
particularly in the fields of materials lightweighting, clean
mobility, natural resource management, and living comfort and home
efficiency.
Taking all of these elements into account, the Group is once
again significantly raising its annual guidance. Arkema is now
aiming for growth of at least 40% in Specialty Materials’ EBITDA in
2021 relative to 2020 at constant scope and currency (4), versus
the 30% announced at the first-half 2021 financial results
publication. Group EBITDA should therefore reach around €1.6
billion for the full year. In addition, the Group confirms its full
year EBITDA margin target of 14% for the Adhesive Solutions
segment, an increase of one percentage point compared to 2020, thus
demonstrating the segment’s resilience in an exceptional context of
strong raw materials inflation and shortages.
Finally, the Group will continue to implement its strategy in
line with its ambition to become a pure sustainable and
high-performance Specialty Materials player by 2024.
Further details concerning the Group’s third-quarter 2021
results are provided in the “Third-quarter 2021 results and
outlook” presentation and the Factsheet, both available on Arkema’s
website at: www.finance.arkema.com.
FINANCIAL CALENDAR
24 February 2022: publication of full-year 2021 results
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 pandemic persists
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 30
September 2021 reviewed by Arkema’s Board of Directors on 9
November 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.
Building on its unique set of expertise in materials science,
Arkema offers a portfolio of first-class technologies 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 3 complementary, resilient
and highly innovative segments dedicated to Specialty
Materials–Adhesive solutions, Advanced Materials, and Coating
Solutions–accounting for some 82% of Group sales in 2020, and a
well-positioned and competitive Intermediates segment. Arkema
offers cutting-edge technological solutions to meet the challenges
of, among other things, new energies, access to water, recycling,
urbanization and mobility, and fosters a permanent dialogue with
all its stakeholders. The Group reported sales of around €8 billion
in 2020, and operates in some 55 countries with 20,600 employees
worldwide.
A French société anonyme (limited company) with share capital of
€767,364,760 – Registered in Nanterre: RCS 445 074 685 Nanterre
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___________________ (1) Recurring cash flow corresponds to free
cash flow before exceptional items. It excludes non-recurring items
and exceptional capital expenditure (2) With the assumption of a
€/$ exchange 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 (3) Including pro forma
adjustments (4) With the assumption of a €/$ exchange 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
ARKEMA financial
statements
Consolidated financial information - At the
end of September 2021
CONSOLIDATED INCOME STATEMENT
3rd quarter
2021
3rd quarter
2020
(In millions of euros)
Sales
2,398
1,909
Operating expenses
(1,826)
(1,518)
Research and development expenses
(59)
(57)
Selling and administrative expenses
(187)
(177)
Other income and expenses
1
(9)
Operating income
327
148
Equity in income of affiliates
(1)
0
Financial result
(15)
(23)
Income taxes
(64)
(32)
Net income
247
93
Attributable to non-controlling interests
0
1
Net income - Group share
247
92
Earnings per share (amount in euros)
3.19
1.02
Diluted earnings per share (amount in euros)
3.16
1.02
End of
September 2021
End of
September 2020
(In millions of euros)
Sales
7,019
5,899
Operating expenses
(5,407)
(4,729)
Research and development expenses
(178)
(177)
Selling and administrative expenses
(574)
(561)
Other income and expenses
709
84
Operating income
1,569
516
Equity in income of affiliates
0
(1)
Financial result
(43)
(68)
Income taxes
(327)
(156)
Net income
1,199
291
Attributable to non-controlling interests
2
2
Net income - Group share
1,197
289
Earnings per share (amount in euros)
15.57
3.60
Diluted earnings per share (amount in euros)
15.47
3.59
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
3rd quarter
2021
3rd quarter
2020
(In millions of euros)
Net
income
247
93
Hedging adjustments
6
17
Other items
-
-
Deferred taxes on hedging adjustments and other items
(1)
(3)
Change in translation adjustments
82
(92)
Other recyclable comprehensive income
87
(78)
Impact of remeasuring unconsolidated investments
(1)
-
Actuarial gains and losses
(5)
(12)
Deferred taxes on actuarial gains and losses
0
2
Other non-recyclable comprehensive income
(6)
(10)
Total income and expenses recognized directly in equity
81
(88)
Total comprehensive income
328
5
Attributable to non-controlling interest
1
0
Total comprehensive income - Group share
327
5
End of
September 2021
End of
September 2020
(In millions of euros)
Net
income
1,199
291
Hedging adjustments
(19)
25
Other items
-
-
Deferred taxes on hedging adjustments and other items
(1)
(3)
Change in translation adjustments
174
(128)
Other recyclable comprehensive income
154
(106)
Impact of remeasuring unconsolidated investments
(3)
-
Actuarial gains and losses
62
(50)
Deferred taxes on actuarial gains and losses
(14)
12
Other non-recyclable comprehensive income
45
(38)
Total income and expenses recognized directly in equity
199
(144)
Total comprehensive income
1,398
147
Attributable to non-controlling interest
4
1
Total comprehensive income - Group share
1,394
146
INFORMATION BY SEGMENT
3rd quarter
2021 (In millions of euros)
Adhesive Solutions
Advanced Materials
Coating Solutions
Intermediates
Corporate
Total
Sales
568
781
742
300
7
2,398
EBITDA
79
174
168
74
(21)
474
Recurring depreciation and amortization of property, plant and
equipment and intangible assets
(16)
(63)
(30)
(21)
(1)
(131)
Recurring operating income (REBIT)
63
111
138
53
(22)
343
Depreciation and amortization related to the revaluation of
property, plant and equipment and intangible assets as part of the
allocation of the purchase price of businesses
(12)
(4)
(1)
-
-
(17)
Other income and expenses
(5)
(1)
0
4
3
1
Operating income
46
106
137
57
(19)
327
Equity in income of affiliates
-
0
-
(1)
-
(1)
Intangible
assets and property, plant, and equipment additions
15
108
22
26
5
176
Of which: recurring capital expenditure
15
56
21
14
5
111
3rd quarter 2020 (In millions of euros)
Adhesive Solutions
Advanced Materials
Coating Solutions
Intermediates
Corporate
Total
Sales
516
603
469
315
6
1,909
EBITDA
73
127
68
55
(16)
307
Recurring depreciation and amortization of property, plant and
equipment and intangible assets
(16)
(61)
(29)
(28)
(2)
(136)
Recurring operating income (REBIT)
57
66
39
27
(18)
171
Depreciation and amortization related to the revaluation of
property, plant and equipment and intangible assets as part of the
allocation of the purchase price of businesses
(8)
(4)
(2)
-
-
(14)
Other income and expenses
(7)
(2)
-
(1)
1
(9)
Operating income
42
60
37
26
(17)
148
Equity in income of affiliates
-
1
-
(1)
-
0
Intangible
assets and property, plant, and equipment additions
18
64
19
34
4
139
Of which: recurring capital expenditure
18
47
18
18
4
105
INFORMATION BY SEGMENT
End of September
2021 (In millions of euros)
Adhesive Solutions
Advanced Materials
Coating Solutions
Intermediates
Corporate
Total
Sales
1,698
2,213
2,021
1,066
21
7,019
EBITDA
247
494
403
236
(70)
1,310
Recurring depreciation and amortization of property, plant and
equipment and intangible assets
(48)
(186)
(88)
(72)
(5)
(399)
Recurring operating income (REBIT)
199
308
315
164
(75)
911
Depreciation and amortization related to the revaluation of
property, plant and equipment and intangible assets as part of the
allocation of the purchase price of businesses
(36)
(11)
(4)
-
-
(51)
Other income and expenses
(34)
(115)
(13)
880
(9)
709
Operating income
129
182
298
1,044
(84)
1,569
Equity in income of affiliates
-
1
-
(1)
-
0
Intangible
assets and property, plant, and equipment additions
43
267
47
92
12
461
Of which: recurring capital expenditure
43
141
43
37
12
276
End of September 2020 (In millions of euros)
Adhesive Solutions
Advanced Materials
Coating Solutions
Intermediates
Corporate
Total
Sales
1,484
1,883
1,422
1,091
19
5,899
EBITDA
192
373
192
189
(53)
893
Recurring depreciation and amortization of property, plant and
equipment and intangible assets
(46)
(185)
(89)
(92)
(6)
(418)
Recurring operating income (REBIT)
146
188
103
97
(59)
475
Depreciation and amortization related to the revaluation of
property, plant and equipment and intangible assets as part of the
allocation of the purchase price of businesses
(26)
(12)
(5)
-
-
(43)
Other income and expenses
(36)
(20)
(3)
183
(40)
84
Operating income
84
156
95
280
(99)
516
Equity in income of affiliates
-
(1)
-
0
-
(1)
Intangible
assets and property, plant, and equipment additions
52
147
48
96
11
354
Of which: recurring capital expenditure
52
102
46
51
11
262
CONSOLIDATED CASH FLOW STATEMENT
End of
September 2021
End of
September 2020
(In millions of euros)
Operating cash flows
Net income
1,199
291
Depreciation, amortization and impairment of assets
571
576
Other provisions and deferred taxes
34
42
(Gains)/losses on sales of long-term assets
(960)
(247)
Undistributed affiliate equity earnings
0
1
Change in working capital
(248)
133
Other changes
11
21
Cash flow from operating activities
607
817
Investing cash flows
Intangible assets and property, plant, and
equipment additions
(461)
(354)
Change in fixed asset payables
(14)
(54)
Acquisitions of operations, net of cash acquired
(41)
(94)
Increase in long-term loans
(20)
(26)
Total expenditures
(536)
(528)
Proceeds from sale of operations, net of cash
transferred
12
3
Variation des créances sur cession d'immobilisations
0
-
Proceeds from sale of intangible assets and property, plant, and
equipment
1,122
327
Proceeds from sale of unconsolidated investments
8
-
Repayment of long-term loans
44
58
Total divestitures
1,186
388
CASH FLOW FROM INVESTING ACTIVITIES
650
(140)
Financing cash flows
Issuance (repayment) of shares and paid-in
surplus
-
7
Purchase of treasury shares
(240)
(21)
Issuance of hybrid bonds
-
299
Rachat d'obligations hybrides
-
-
Dividends paid to parent company shareholders
(191)
(168)
Interest paid to bearers of subordinated perpetual notes
(15)
(14)
Dividends paid to non-controlling interests
(2)
(2)
Increase in long-term debt
7
3
Decrease in long-term debt
(46)
(58)
Increase / (Decrease) in short-term debt
(57)
(531)
CASH FLOW FROM FINANCING ACTIVITIES
(544)
(485)
Net increase/(decrease) in cash and cash
equivalents
713
192
Effect of exchange rates and changes in scope
(14)
48
Cash and cash equivalents at beginning of period
1,587
1,407
CASH AND CASH EQUIVALENTS AT END OF PERIOD
2,286
1,647
CONSOLIDATED BALANCE SHEET
30
September 2021
31
December 2020
(In millions of euros)
ASSETS
Goodwill
1,911
1,933
Intangible assets, net
1,500
1,433
Property, plant and equipment, net
2,906
2,828
Equity affiliates: investments and loans
29
29
Other investments
55
57
Deferred tax assets
150
159
Other non-current assets
196
209
TOTAL NON-CURRENT ASSETS
6,747
6,648
Inventories
1,254
881
Accounts receivable
1,394
1,131
Other receivables and prepaid expenses
177
163
Income tax receivables
67
70
Other current financial assets
67
40
Cash and cash equivalents
2,286
1,587
Assets held for sale
4
191
TOTAL CURRENT ASSETS
5,249
4,063
TOTAL ASSETS
11,996
10,711
LIABILITIES AND
SHAREHOLDERS' EQUITY Share
capital
767
767
Paid-in surplus and retained earnings
5,395
4,458
Treasury shares
(245)
(6)
Translation adjustments
140
(32)
SHAREHOLDERS' EQUITY - GROUP SHARE
6,057
5,187
Non-controlling interests
52
48
TOTAL SHAREHOLDERS' EQUITY
6,109
5,235
Deferred tax liabilities
347
320
Provisions for pensions and other employee benefits
514
530
Other provisions and non-current liabilities
406
383
Non-current debt
2,673
2,663
TOTAL NON-CURRENT LIABILITIES
3,940
3,896
Accounts payable
1,097
987
Other creditors and accrued liabilities
439
339
Income tax payables
191
69
Other current financial liabilities
52
15
Current debt
168
134
Liabilities related to assets held for sale
-
36
TOTAL CURRENT LIABILITIES
1,947
1,580
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY
11,996
10,711
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
Shares issued
Treasury shares Shareholders'equity - Groupshare
Non-controllinginterests Shareholders'equity (In
millions of euros)
Number Amount
Paid-insurplus Hybridbonds
Retainedearnings Translationadjustments
Number Amount At 1 January 2021
76,736,476
767
1,272
700
2,486
(32)
(59,756)
(6)
5,187
48
5,235
Cash dividend
-
-
-
-
(206)
-
-
-
(206)
(2)
(208)
Issuance of share capital
-
-
-
-
-
-
-
-
-
-
-
Purchase of treasury shares
-
-
-
-
-
-
(2,277,309)
(240)
(240)
-
(240)
Annulation d'actions propres
-
-
-
-
-
-
-
-
-
-
-
Grants of treasury shares to employees
-
-
-
-
(1)
-
14,722
1
-
-
-
Cessions d'actions propres
-
-
-
-
-
-
-
-
-
-
-
Share-based payments
-
-
-
-
13
-
-
-
13
-
13
Issuance of hybrid bonds
-
-
-
-
-
-
-
-
-
-
-
Redemption of hybrid bonds
-
-
-
-
-
-
-
-
-
-
-
Other
-
-
-
-
(91)
-
-
-
(91)
2
(89)
Transactions with shareholders
-
-
-
-
(285)
-
(2,262,587)
(239)
(524)
-
(524)
Net income
-
-
-
-
1,197
-
-
-
1,197
2
1,199
Total income and expense recognized directly through equity
-
-
-
-
25
172
-
-
197
2
199
Comprehensive income
-
-
-
-
1,222
172
-
-
1,394
4
1,398
At 30 September 2021
76,736,476
767
1,272
700
3,423
140
(2,322,343)
(245)
6,057
52
6,109
ALTERNATIVE PERFORMANCE INDICATORS
To monitor and analyse the financial performance of the Group
and its activities, the Group management uses alternative
performance indicators. These are financial indicators that are not
defined by the IFRS. This note presents a reconciliation of these
indicators and the aggregates from the consolidated financial
statements under IFRS.
RECURRING OPERATING INCOME (REBIT) AND EBITDA
(In millions of euros)
End of
September 2021
End of
September 2020
3rd
quarter 2021
3rd
quarter 2020
OPERATING INCOME
1,569
516
327
148
- Depreciation and amortization related to the revaluation of
tangible and intangible assets as part of the allocation of the
purchase price of businesses
(51)
(43)
(17)
(14)
- Other income and expenses
709
84
1
(9)
RECURRING OPERATING INCOME (REBIT)
911
475
343
171
- Recurring depreciation and amortization of tangible and
intangible assets
(399)
(418)
(131)
(136)
EBITDA
1,310
893
474
307
Details of depreciation and
amortization of tangible and intangible assets:
(In
millions of euros)
End of
September 2021
End of
September 2020
3rd
quarter 2021
3rd
quarter 2020
Depreciation and amortization
of tangible and intangible assets
(571)
(576)
(150)
(154)
Of which: Recurring depreciation and amortization of tangible and
intangible assets
(399)
(418)
(131)
(136)
Of which: Depreciation and amortization related to the revaluation
of assets as part of the allocation of the purchase price of
businesses
(51)
(43)
(17)
(14)
Of which: Impairment included in other income and expenses
(121)
(115)
(2)
(4)
ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE
(In millions of euros)
End of
September 2021
End of
September 2020
3rd
quarter 2021
3rd
quarter 2020
NET INCOME - GROUP SHARE
1,197
289
247
92
- Depreciation and amortization related to the revaluation of
tangible and intangible assets as part of the allocation of the
purchase price of businesses
(51)
(43)
(17)
(14)
- Other income and expenses
709
84
1
(9)
- Other income and expenses - Non-controlling interests
-
-
-
-
- Taxes on depreciation and amortization related to the revaluation
of assets as part of the allocation of the purchase price of
businesses
12
10
4
3
- Taxes on other income and expenses
(162)
(61)
(4)
3
- One-time tax effects
5
-
5
-
ADJUSTED NET INCOME
684
299
258
109
- Weighted average number of ordinary shares
75,865,209
76,424,364
- Weighted average number of potential ordinary
shares
76,316,982
76,690,590
ADJUSTED EARNINGS PER SHARE (€)
9.02
3.91
3.44
1.42
DILUTED ADJUSTED EARNINGS PER SHARE (€)
8.96
3.90
3.41
1.42
RECURRING CAPITAL EXPENDITURE
(In millions of euros)
End of
September 2021
End of
September 2020
3rd
quarter 2021
3rd
quarter 2020
INTANGIBLE ASSETS AND
PROPERTY, PLANT, AND EQUIPMENT ADDITIONS
461
354
176
139
- Exceptional capital expenditure
181
90
64
33
- Investments relating to portfolio management operations
-
-
-
-
- Capital expenditure with no impact on net debt
4
2
1
1
RECURRING CAPITAL EXPENDITURE
276
262
111
105
FREE CASH FLOW (In
millions of euros)
End of
September 2021
End of
September 2020
3rd
quarter 2021
3rd
quarter 2020
Cash flow from operating
activities
607
817
174
401
+ Cash flow from investing activities
650
(140)
(110)
(121)
NET CASH FLOW
1,257
677
64
280
- Net cash flow from portfolio management operations
886
142
(10)
(5)
FREE CASH FLOW
371
535
74
285
- Non-recurring cash flow including exceptional capital expenditure
(163)
(47)
(162)
(26)
RECURRING CASH FLOW
534
582
236
311
The net cash flow from portfolio
management operations corresponds to the impact of acquisition and
divestment operations.
NET DEBT (In
millions of euros)
End of
September 2021
End of
December 2020
Non-current debt
2,673
2,663
+ Current debt
168
134
- Cash and cash equivalents
2,286
1,587
NET DEBT
555
1,210
+ Hybrid bonds
700
700
NET DEBT AND HYBRID BONDS
1,255
1,910
WORKING CAPITAL
(In millions of euros)
End of
September 2021
End of
December 2020
Inventories
1,254
881
+ Accounts receivable
1,394
1,131
+ Other receivables including income taxes
244
233
+ Other current financial assets
67
40
- Accounts payable
1,097
987
- Other liabilities including income taxes
630
408
- Other current financial liabilities
52
15
WORKING CAPITAL
1,180
875
CAPITAL EMPLOYED
(In millions of euros)
End of
September 2021
End of
December 2020
Goodwill, net
1,911
1,933
+ Intangible assets (excluding goodwill), and property, plant and
equipment, net
4,406
4,261
+ Investments in equity affiliates
29
29
+ Other investments and other non-current assets
251
266
+ Working capital
1,180
875
CAPITAL EMPLOYED
7,777
7,364
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211109006622/en/
Investor relations Béatrice Zilm +33 (0)1 49 00 75 58
beatrice.zilm@arkema.com Peter Farren +33 (0)1 49 00 73 12
peter.farren@arkema.com Mathieu Briatta +33 (0)1 49 00 72 07
mathieu.briatta@arkema.com Caroline Chung +33 (0)1 49 00 74 37
caroline.chung@arkema.com
Media Gilles Galinier +33 (0)1 49 00 70 07
gilles.galinier@arkema.com Véronique Obrecht +33 (0)1 49 00 88 41
veronique.obrecht@arkema.com
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