Arkema Reports 3Q 2023 Results

During third quarter 2023, Arkema achieved a solid EBITDA margin and high cash generation in an ongoing context of low volumes reflecting the current economic environment.

Arkema reported sales of €2.3 billion, down by 17.2% at constant currency compared with Q3 2022. Volumes were down by 6.6% year-on-year in an environment of generally slow demand comparable to that of previous quarters. A 10.6% negative price effect reflecting lower raw materials, as well as price normalization in PVDF and upstream acrylics following the exceptional market conditions in 2022.

EBITDA was €386 million, down compared with the prior year’s high comparison base (€495 million in Q3’22), and EBITDA margin holding up well at 16.6% (16.7% in Q3’22), reflecting the strength of the group’s positioning and the initiatives taken to adapt to the economic climate

Adjusted net income was €177 million (€260 million in Q3’22), representing €2.38 per share, with high cash generation with recurring cash flow of €312 million (€434 million in Q3’22) and net debt at €2,419 million including hybrid bonds (€2,645 million at end-June 2023), representing 1.7x last-twelve-months EBITDA.

“In line with the first half of the year, demand continued to be weak this quarter,” said Thierry Le Hénaff, Arkema’s chairman and CEO. “Arkema’s performance nevertheless remained solid, supported by the quality of its portfolio of technologies serving sustainable megatrends and by the strengthening of cost initiatives. In an uncertain context marked by heightened geopolitical tensions, we continue to strictly manage our operations and to adapt thanks to the agility and commitment of our teams.

“Moreover, Arkema is fully mobilized to prepare for the future,” Le Hénaff observed. “Arkema will focus its investments on high-growth areas, centered on innovative, high performance materials for a more sustainable world. Thanks to the technologies it has acquired or developed in recent years, and the expertise it has built up in markets with superior growth potential such as batteries, advanced electronics and sustainable consumer goods, the group is now ready to embark on this new stage in its development, mainly focused on organic growth. Several important projects, which started up this year or which will shortly be completed, will contribute to the group’s growth in 2024.

The economic environment remains challenging as the year draws to a close, in line with the level seen since the beginning of the year, and is marked by low volumes in most end markets and uncertainties in all three regions, as well as by heightened geopolitical tensions.

Arkema will ensure the successful completion of several key projects that will contribute to the growth in 2024, including the ramp-up of the bio-based plant in Singapore, HF supply in the United States, the development of Sartomer photocure resins in China, and the finalization in the United States of the HFO-1233zd project for batteries and building insulation.