Arkema Reports Full Year 2022 Results

Arkema reported its full year 2022 results. Group sales of €11.5 billion, up by 21.3% compared with 2021. Organic sales growth was 13.6%, reflecting price increases in the face of significant raw materials and energy cost inflation and the improved product mix, as well as the slowdown in demand and significant destocking observed in the fourth quarter

Arkema reported acceleration in opportunities for innovative, high value-added solutions, particularly in low-carbon mobility, lightweighting, the circular economy and 3D printing.

EBITDA was at a historic high of €2,110 million, up by a strong 22.2% year-on-year, and EBITDA margin at 18.3% (18.1% in 2021). Specialty Materials’ EBITDA was up in each of the segments, to €1,900 million (€1,512 million in 2021) and Intermediates’ EBITDA was stable at €306 million (€307 million in 2021).

Q4’22 EBITDA was €291 million (€417 million in Q4’21), in line with the group’s guidance and including the strong destocking at year-end.

“Arkema achieved an excellent year in 2022 in many respects, first of all in terms of its financial performance, with EBITDA of over €2 billion, reflecting the efforts of all our employees, whom I would like to thank for their commitment in a demanding environment,” said chairman and CEO Thierry Le Hénaff. “We also finalized a high-quality acquisition, with Ashland’s adhesives, and entered the start-up phase at our production site in Singapore for polyamide 11 and its monomer, thus strengthening the Group’s profile, resolutely focused on innovative materials. It is also a great source of pride for the teams to be recognized by rating agencies as one of the leaders in our industry in terms of CSR.

“2023 has begun in an economic context of weak demand, which requires us to be strict in managing our costs and working capital, while preparing for an improvement of the environment during the course of the second quarter,” Le Hénaff added. “We have full confidence in the long-term prospects offered by our new developments focused on decarbonization and sustainable development, and we will continue to invest in these opportunities. We will leverage our cutting-edge innovation to continue to support our customers in their quest for sustainable performance.”

At the beginning of the year, the macroeconomic context is marked by a lack of visibility and ongoing weak demand, in the continuity of fourth-quarter 2022. A progressive improvement is expected from the spring and should gather momentum in the second part of the year. In this demanding context, Arkema will draw on the responsiveness and commitment of its teams to adapt to changes in the macroeconomic environment and will continue to focus on cash generation and cost management.

Moreover, the group will benefit from the contribution of its key expansion projects mainly in the second half of the year, namely the new bio-based PA11 plant in Singapore, the project with Nutrien in the United States, the PVDF units in China and France, and the expansion of the Sartomer plant in China and the Pebax plant in France, as well as from the ramp-up of Ashland’s performance adhesives.

In this context, Arkema aims to achieve in 2023 an EBITDA of approximately €1.5 billion to €1.6 billion and maintain a high EBITDA to cash conversion rate of over 40%.