In a context of clearly improving market conditions, the Group reported strong earnings growth in the first quarter, driven in particular by a rise in volumes of innovative and sustainable Specialty Materials (1), which benefited from their unique positioning and cutting-edge innovation related to global megatrends.
Given its confidence in its development dynamic, Arkema is significantly increasing its financial targets for 2021.
- Sales of €2.23 billion, up 12.7% versus Q1’20 at constant scope and currency
- Significant increase in volumes (+7.7%), in the continuity of the rebound already observed in Q4’20 (+5.2%)
- Strong momentum in most of the Group’s end markets, and contribution of new developments driven by sustainable innovation
- EBITDA of €358 million, up sharply by almost 20% (€300 million in Q1’20), and EBITDA margin of 16.1%
- Specialty Materials’ EBITDA of €306 million, up 19.5%, supported by strong increases in the three segments Adhesive Solutions, Advanced Materials and Coating Solutions
- Intermediates’ EBITDA of €75 million, up 10.3% (up 18.5% at constant scope)
- Adjusted net income up 59% to €159 million, representing €2.08 per share
- Well controlled net debt, at €2.0 billion (including €700 million in hybrid bonds), representing 1.6x LTM EBITDA
- Major milestone in Arkema’s evolution with the finalization of the divestment of PMMA to Trinseo on 3 May 2021, supplemented by Bostik’s recent acquisition of Poliplas
- 2021 guidance significantly raised, with the Group now targeting around 20% growth in Specialty Materials’ EBITDA relative to 2020 at constant scope and currency (2) excluding a systemic resumption of the health crisis
(1) Specialty Materials include the following three segments: Adhesive Solutions, Advanced Materials and Coating Solutions
(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
Following Arkema’s Board of Directors’ meeting, held on 5 May 2021 to review the Group’s consolidated financial information for the first quarter of 2021, Chairman and CEO Thierry Le Hénaff said:
“The pace of activity accelerated in the first quarter in the context of better economic indicators. Our growth reflects first and foremost the strength of our innovation over the past few years to position our Specialty Materials in structural growth segments, along with positive momentum in most of our end markets and our balanced geographical footprint. While remaining attentive to the evolution of the health crisis and to the volatility of the environment, in light of our very good first-quarter results and our development opportunities, the Group is strongly raising its annual targets for Specialty Materials, which represent the essential part of our scope following the divestment of PMMA.
This year marks the start of a new era of growth for Arkema, consistent with the ambitions unveiled at our April 2020 Capital Markets Day. Supported by our teams’ strong commitment to the company’s strategy, we are accelerating our innovation projects and investments in promising high growth markets driven by sustainable megatrends, such as clean mobility, lightweight materials, 3D printing and energy efficiency.”
Outlook for 2021
The positive market dynamics observed in the first quarter is continuing, supported by strong demand in the construction and DIY markets, and several industrial markets that are important for the Group.
Thanks to its innovation for sustainable development and recent industrial capacity expansions, while being attentive to the market environment, which remains volatile, Arkema considers it is very well positioned to benefit from the strongly rising demand for high-performance materials.
In this environment of robust demand, raw materials inflation should accelerate in the second quarter. The Group will continue its initiatives to increase prices to offset this impact.
In this context, and also in light of its first-quarter financial performance, the Group has raised significantly the Specialty Materials’ guidance for 2021. Excluding a systemic resumption of the health crisis,
- Specialty Materials’ EBITDA is now expected to grow by around 20% in 2021 compared to 2020 at constant scope and currency (3)
- Bostik, in line with its 2024 trajectory, confirms its EBITDA margin target of 14% in the year, and Intermediates’ EBITDA should at least reach last year’s level at constant scope (4) and currency (3).
Finally, Arkema will continue to move ahead with its ambition to become a pure Specialty Materials player by 2024.
Further details concerning the Group’s first-quarter 2021 results are provided in the “First quarter 2021 results and outlook” presentation and the Factsheet available on Arkema’s website www.finance.arkema.com.
(3) 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
(4) The combined EBITDA contribution of Functional Polyolefins, divested on 1 June 2020, and of PMMA, divested on 3 May 2021, was close to €135m in 2020 and €45m in 2021 (January – April, PMMA only)
20 May 2021: Annual general meeting, held behind closed doors
26 May 2021: Shares trade ex-dividend
29 July 2021: Publication of first-half 2021 results
10 November 2021: Publication of third-quarter 2021 results