At a Strategy Update meeting on April 2, Arkema unveiled its ambition to become a world leader in Specialty Materials realigned around three businesses: Adhesive Solutions, Advanced Materials, and Coating Solutions.
The Group unveiled its roadmap and its objectives for 2024 at this event.
The Group has decided to align its organization and reporting with this vision, which will now consist of:
- Three divisions that will be reported separately and will include all Arkema Specialty Materials: "Adhesive Solutions", "Advanced Materials", and "Coating Solutions;"
- An "Intermediates" division consisting of MMA/PMMA, Fluorogases and Asia Acrylics, consolidating activities with more volatile results and for which the Group will implement differentiated strategies. In particular, the Group will undertake a review of its strategic options for MMA/PMMA, explore possible alternatives to minimize its exposure to the most emissive applications of its Fluorogases, and rebalance its Asia Acrylics business between upstream and downstream;
- By 2024, Arkema aims to become a pure Specialty Materials player, with a focused portfolio, characterized by high profitability and strong cash generation. Thus, Arkema aims to generate sales of €10 to €11 billion and an EBITDA margin of around 17 percent compared to 15.8 percent for the Specialty Materials business. To carry through this latest stage in its development, the Group intends to build on its many innovation projects and investments in major projects such as the expansion of its specialty polyamides in Asia, which will help for example meet the challenges of material lightweighting, 3D-printing, new energies, and energy efficiency in buildings. Arkema also intends to continue playing an active part in the consolidation of the Adhesives market;
- Arkema will also maintain strict financial discipline, with net debt (including hybrid bonds) to EBITDA ratio of less than two and a return on capital employed (ROCE) in excess of 10 percent by 2024.
Over the next five years, the Group's cash generation is expected to grow further compared to the previous period (2015-2019). By maintaining the net debt (including hybrid bonds) to EBITDA ratio around end-2019 levels, it should allow Arkema to finance major organic growth projects and portfolio management operations, as well as raise shareholder returns, the goal being to achieve a dividend payout ratio of some 40 percent by 2024. It should also allow opportunistic share buy-backs under favorable market conditions.
In the context of COVID-19, Arkema also provided an update on the management and the consequences of this unprecedented health crisis.
While the management of the crisis related to COVID-19 requires everybody to be mobilized – priority being given to the health and safety of its employees while supporting its customers and its other stakeholders to the best of its abilities – Arkema decided to maintain its Strategy Update meeting to share its vision and unveil its ambitions for the mid-term.
