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2022: staying on course in a volatile environment

2022 was a challenging year for everyone, and held its share of surprises. The year was marked by sharp, widespread inflation, exceptionally high prices for raw materials, supply chain obstacles and product shortages – not to mention the war in Ukraine, lockdowns in China and an energy crisis in Europe.

The two halves of the year were quite different:  we were supported in the first six months by strong demand and our ability to raise prices, while the latter half of the year brought lower sales volumes in several regions, particularly at year’s end.

In that volatile environment, we can take pride in our financial performance, our best ever, with EBITDA of €2.1 billion and growth in all three Specialty Materials segments. With those excellent results, we have the tools to deliver on our ambitious growth strategy. 

Adapting with confidence

With the slowdown in the world’s economy, 2023 is likely to prove more difficult. To meet that new challenge, we will need to respond in two ways. In the short term, we must continue to adapt, via our pricing policy at a time of high inflation, and by maintaining strict control over our costs, inventories, and investments. At the same time, we will resolutely press ahead with our growth strategy in Specialty Materials. That strategy is primed to succeed, thanks to our leading-edge innovation focused on sustainability and decarbonisation, our investments in support of our customers in growth markets, and our policy of high added-value acquisitions.

In 2023 the Group will reap the benefits of our major expansion projects, such as the start-up of production at the new bio-based polyamide 11 plant in Singapore, the hydrofluoric acid unit in the US with our partner Nutrien, and the fluoropolymer facilities in China and France, plus our enlarged production capacity for Sartomer® UV resins in China and Pebax® thermoplastics in France.

We also plan to capitalise on the growing strength of the former Ashland performance adhesives business. Given those circumstances, Arkema anticipates EBIDTA of €1.5 to 1.6 billion in 2023 – above pre-Covid levels, despite a weaker economy.

Innovating for sustainability

Arkema’s tagline – “Innovative materials for a sustainable world” – forcefully conveys our strategy for helping to tackle the world’s major social and environmental challenges. Sustainable development is driving our growth. Our vision is that in order for the world to change, its materials must change as well, in terms of their performance, sustainability, sourcing (including more renewable and recycled raw materials) and circularity. More than ever, innovation will continue to make a difference.

"Sustainable development is driving our growth"

The past few years have opened up a host of opportunities in fields such as batteries, new energies, more eco-friendly paints, and building energy efficiency, as well as in the markets for sport and electronics. Our innovations have enabled us to seize those opportunities. I met with many of our major customers in 2022, and they all were enthusiastic about the technological solutions we provide.

More than 90% of our patents are connected to sustainable development. That truly sets Arkema apart! And with nearly €300 million allocated to R&D annually and €700 million devoted to our industrial projects, we have never invested so extensively in the Group’s future growth.

The challenge of decarbonisation

In tandem with the sustainable products we offer, we need to take action to reduce our carbon footprint. Consistent with the Paris Agreement, which targets a global temperature rise of no more than 1.5°C by the end of the century, Arkema had set an ambitious objective of our own in July 2022 using the Science-Based Targets methodology: to reduce our greenhouse gas emissions by 46% between now and 2030.

In April 2023 that near-term goal was brought forward, and we are now targeting a 48.5% reduction in our Scopes 1 and 2 greenhouse gas emissions and a 54% reduction in our Scope 3 emissions by 2030. These new objectives have been validated by the Science-Based Targets initiative (SBTi).

"One priority is to switch to renewable energy sources to power our plants"

To meet our target for Scope 1 and 2 emissions reduction, one priority is to switch to renewable energy sources to power our plants. Our agreement with ENGIE to supply renewable biomethane is helping to shrink the carbon footprint of our bio-based materials in France even further; it’s a major success. We are also investing in processes at our plants worldwide to reduce their emissions. Our capital spending on those decarbonisation projects could total €400 million by 2030.

An appealing, inclusive group

Once again, our continuing progress in our CSR performance has been recognised by outside organisations: we were ranked third in our category in the Dow Jones Sustainability Index World for 2022, and we have been listed on the CAC 40 ESG since it was created in 2021. We take pride in the high rankings we continue to receive each year, since they play an important role in attracting the best talent.

Moreover, a company’s success can be measured by the level of employee support for the corporate mission, and I believe our workforce is genuinely dedicated to the Group. Our low turnover rate is a testament to that commitment, further evidence of which was shown by the Arkema Cares opinion survey last spring. That dedication is also nurtured by new working arrangements and procedures being gradually brought online: over the past three years we have offered the option of remote work wherever possible, implemented in a thoughtful, balanced way. That confidence in the Group is reflected in our employee shareholding as well, which now represents 7% of Arkema’s capital.

Every year, we welcome more than 2,000 new hires from every country and background, drawn by Arkema’s corporate purpose, the strength of our values, and the career opportunities we offer for men and women, young and not so young alike. In our view, diversity, inclusivity and equality of opportunity are genuine commitments, which we spotlighted this year with the publication of our global Inclusion and Diversity policy.

Those same values inform our philanthropic activities. Wherever the Group operates, we have chosen to support initiatives and organisations dedicated to the goals we stand for, such as education, and inclusivity. and inclusivity. Those actions are helping to make Arkema a model employer. To cite one example, Forbes magazine ranks us among the best employers in the world, and third among companies in the Chemicals sector. Performance, innovation, commitment, appeal: we can be proud of our strengths. They give me real confidence in our future.

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