Arkema achieved a solid EBITDA margin and high cash generation in an ongoing context of low volumes reflecting the current economic environment.
- Sales of €2.3 billion, down by 17.2% at constant currency compared with Q3’22:
- Volumes down by 6.6% year-on-year in an environment of generally slow demand comparable to that of previous quarters
- 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 at €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 of €177 million (€260 million in Q3’22), representing €2.38 per share
- 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
- As indicated last September at the Capital Markets Day, Arkema confirms its EBITDA forecast of around €1.5 billion in 2023, supported in particular by the resilience of several product lines and ongoing cost-saving actions
Following Arkema’s Board of Directors’ meeting held on 8 November 2023 to review the Group’s consolidated financial information for the third quarter of 2023, Chairman and CEO Thierry Le Hénaff said:
“In line with the first half of the year, demand continued to be weak this quarter. 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. At the Capital Markets Day held in Paris on 27 September, we detailed our longer-term strategy and set ambitious financial targets for 2028. 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.
As a key component of our strategy, we will also pursue our climate actions, and in particular the reduction of our CO2 emissions, bolstered by the SBTi’s validation of our 1.5°C trajectory by 2030, and in order to pave the way for Net-Zero by 2050.”
Outlook for 2023
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.
In this context, the Group will continue to work on the elements under its control, in particular managing costs, optimizing working capital and rolling out ongoing technological developments with its customers and partners. Beyond that, 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.
Based on the results of the first nine months and the momentum expected in the fourth quarter, and as indicated last September at the Capital Markets Day, Arkema confirms its EBITDA forecast of around €1.5 billion in 2023, supported in particular by the resilience of several product lines and ongoing cost-saving initiatives. The Group is also aiming for a high EBITDA to cash conversion of around 40%.
Further details concerning the Group’s third-quarter 2023 results are provided in the “Third-quarter 2023 results and highlights” presentation and the “Factsheet”, both available on Arkema’s website at: www.arkema.com/global/en/investor-relations/
Financial calendar
29 February 2024: Publication of full-year 2023 results
7 May 2024: Publication of first-quarter 2024 results
15 May 2024: Annual general meeting