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MarketScreener Homepage  >  Equities  >  Euronext Paris  >  Arkema    AKE   FR0010313833

ARKEMA

(AKE)
  Report
Real-time Estimate Quote. Real-time Estimate Tradegate - 08/10 03:59:59 pm
91.16 EUR   +1.20%
08/01ARKEMA : Amendment to the 2019 Universal Registration Document
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08/01ARKEMA : Investor and analyst factsheet
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08/01ARKEMA : Half-Year Financial Report
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Arkema : Investor and analyst factsheet

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08/01/2020 | 10:51am EDT

Investor and analyst factsheet

In millions of euros

Q2'20

Q2'19

Change

H1'20

H1'19

Change

Sales

1,902

2,254

-15.6%

3,990

4,469

-10.7%

Prices

-5.9%

-5.5%

Volumes

-12.2%

-8.6%

Currency

-0.4%

+0.2%

Scope

+2.9%

+3.2%

EBITDA

286

407

-29.7%

586

777

-24.6%

Adhesive Solutions

50

71

-29.6%

119

133

-10.5%

Advanced Materials

124

142

-12.7%

246

293

-16.0%

Coating Solutions

59

91

-35.2%

124

170

-27.1%

Intermediates

66

127

-48.0%

134

230

-41.7%

Corporate

-13

-24

-37

-49

EBITDA margin

15.0%

18.1%

14.7%

17.4%

Recurring depreciation and amortization

-142

-129

-282

-252

Recurring EBIT

144

278

-48.2%

304

525

-42.1%

REBIT margin

7.6%

12.3%

7.6%

11.7%

PPA depreciation and amortization

-15

-10

-29

-19

Non-recurring items

107

-11

93

-23

Equity in income of affiliates

1

0

-1

-1

Financial result

-22

-33

-33.3%

-45

-60

-25.0%

Income taxes

-96

-46

+108.7%

-124

-95

+30.5%

Net income - Group share

119

176

-32.4%

197

323

-39.0%

Adjusted net income

90

192

-53.1%

190

357

-46.8%

Adjusted EPS (€)

1.18

2.52

-53.2%

2.49

4.68

-46.8%

Weighted average number of ordinary shares

76,457,621

76,214,216

76,457,621

76,214,216

Recurring capital expenditure

78

101

-22.8%

157

187

-16.0%

Exceptional capital expenditure

44

20

57

38

Working capital (12/31 for prior year)

1,231

1,173

Net debt (12/31 for prior year)

2,134

2,331

OVERALL ROBUST Q2'20 PERFORMANCE IN THE EXCEPTIONAL COVID-19 CONTEXT

  • €1,902m sales, down 15.6% YoY (-10.7% in H1'20)
  1. (12.2)% volumes
    • Effect of lockdowns
    • Slowdown in construction, transportation and industrial sectors
    • Good demand in packaging, nutrition and hygiene
    • Improvement of the construction market in June in Europe/US
  1. (5.9)% prices
    • Resilient prices in Adhesive Solutions and Advanced Materials
    • More challenging market conditions for Intermediates in a context of lower demand
  1. +2.9% scope
    • Integration of ArrMaz, Lambson, Prochimir and LIP
    • Divestment of Functional Polyolefins on 1 June 2020
    1. (0.4)% currency
      • Devaluation of emerging currencies impacting mainly Adhesive Solutions
  • €286m EBITDA and 15.0% margin
    1. Resilient performance in view of the context
  1. Solid performance of Advanced Materials (20% EBITDA margin)
  1. Sharp rebound for Bostik in June
  1. Benefits of rapidly implemented interim fixed cost reduction initiatives

ARKEMA 420, rue d'Estienne d'Orves - F-92705 COLOMBES Cedex - France French société anonymewith share capital of €767,364,760 - 445 074 685 RCS

Q2'20 PERFORMANCE BY SEGMENT

In millions of euros

Q2'20

Q2'19

Change

Prices

Volumes

Currency

Scope

Sales

1,902

2,254

-15.6%

-5.9%

-12.2%

-0.4%

+2.9%

Adhesive Solutions

453

520

-12.9%

-0.9%

-13.2%

-1.5%

+2.7%

Advanced Materials

628

650

-3.4%

-2.0%

-11.5%

-

+10.1%

Coating Solutions

436

575

-24.2%

-9.5%

-15.8%

-0.1%

+1.2%

Intermediates

379

502

-24.5%

-12.3%

-8.1%

+0.1%

-4.2%

EBITDA

286

407

-29.7%

Adhesive Solutions

50

71

-29.6%

Advanced Materials

124

142

-12.7%

Coating Solutions

59

91

-35.2%

Intermediates

66

127

-48.0%

Corporate

-13

-24

EBITDA margin

15.0%

18.1%

Adhesive Solutions

11.0%

13.7%

Advanced Materials

19.7%

21.8%

Coating Solutions

13.5%

15.8%

Intermediates

17.4%

25.3%

Recurring EBIT

144

278

-48.2%

Adhesive Solutions

35

55

-36.4%

Advanced Materials

61

87

-29.9%

Coating Solutions

28

62

-54.8%

Intermediates

35

99

-64.6%

Corporate

-15

-25

H1'20 PERFORMANCE BY SEGMENT

In millions of euros

H1'20

H1'19

Change

Prices

Volumes

Currency

Scope

Sales

3,990

4,469

-10.7%

-5.5%

-8.6%

+0.2%

+3.2%

Adhesive Solutions

968

1,033

-6.3%

-0.2%

-8.2%

-0.7%

+2.8%

Advanced Materials

1,280

1,322

-3.2%

-1.8%

-10.7%

+0.4%

+8.9%

Coating Solutions

953

1,139

-16.3%

-8.9%

-9.3%

+0.5%

+1.4%

Intermediates

776

961

-19.3%

-12.2%

-5.3%

+0.4%

-2.2%

EBITDA

586

777

-24.6%

Adhesive Solutions

119

133

-10.5%

Advanced Materials

246

293

-16.0%

Coating Solutions

124

170

-27.1%

Intermediates

134

230

-41.7%

Corporate

-37

-49

EBITDA margin

14.7%

17.4%

Adhesive Solutions

12.3%

12.9%

Advanced Materials

19.2%

22.2%

Coating Solutions

13.0%

14.9%

Intermediates

17.3%

23.9%

Recurring EBIT

304

525

-42.1%

Adhesive Solutions

89

103

-13.6%

Advanced Materials

122

184

-33.7%

Coating Solutions

64

116

-44.8%

Intermediates

70

174

-59.8%

Corporate

-41

-52

ARKEMA 420, rue d'Estienne d'Orves - F-92705 COLOMBES Cedex - France French société anonymewith share capital of €767,364,760 - 445 074 685 RCS

Q2'20 PERFORMANCE BY SEGMENT

ADHESIVE SOLUTIONS (24% OF GROUP SALES)

  • €453m sales, down 12.9% YoY
    o Despite packaging and hygiene markets holding firm, volumes down 13.2%, impacted by the sharp slowdown in the construction, transportation and industrial sectors
    o Price -0.9% held up well, reflecting the optimization of the product mix in 2019 o +2.7% scope effect, on LIP and Prochimir integration
  • €50m EBITDA
    o EBITDA down 29.6% YoY on sharp volume contraction in construction in April and May, and weak demand in industrial assembly sector
    o Performance picked up sharply in June thanks to the rebound seen in the construction and DIY markets, industrial markets remaining mixed
    o Benefits from the operational excellence and fixed cost savings initiatives, as well as favorable impact of certain raw materials
    o EBITDA margin at 11.0%, temporarily down versus last year

ADVANCED MATERIALS (33% OF GROUP SALES)

  • €628m sales, slightly down 3.4% YoY
    o Volumes down 11.5%, with Covid-19 weighing strongly on demand for High Performance Polymers
    • significant decline in the transportation, consumer electronics, oil & gas and sports sectors
    • good performance of the nutrition market and certain niche applications used in the fight against the virus
  1. Limited price effect of -2.0%
    1. 10.1% positive scope effect relating to ArrMaz consolidation, driven by favorable end- markets such as crop nutrition
  • Resilient performance with €124m EBITDA and 19.7% EBITDA margin
    1. EBITDA down 12.7% YoY, reflecting sharp drop in volumes, notably for High Performance Polymers, partly offset by the good resistance of Performance Additives
  1. EBITDA margin at a high level, benefitting from a good product mix, the favorable evolution of certain raw materials and fixed costs reduction

COATING SOLUTIONS (23% OF GROUP SALES)

  • €436m sales, down 24.2% YoY
    o Volumes down 15.8%, due to weak demand in construction, paints and in some industrial markets
    o -9.5% price effect, stemming mainly from lower propylene prices o Scope effect +1.2% reflecting the integration of Lambson
  • €59m EBITDA and 13.5% EBITDA margin
    o EBITDA down 35.2% YoY compared to Q2'19 excellent performance (€91m) o Benefit from the improvement of the decorative paints market in June
    o EBITDA margin held up well, thanks in particular to the benefits of the integration between upstream and downstream activities

INTERMEDIATES (20% OF GROUP SALES)

  • €379m sales, down 24.5% YoY
    o -12.3% price effect mainly reflecting challenging market conditions in Fluorogases and lower propylene prices
    o Volumes down 8.1%
    • slowdown in the construction and automotive sectors

ARKEMA 420, rue d'Estienne d'Orves - F-92705 COLOMBES Cedex - France French société anonymewith share capital of €767,364,760 - 445 074 685 RCS

  • strong demand in the niche market for PMMA protective sheets, as in the first quarter
    1. Scope effect -4.2% corresponding to the Functional Polyolefins divestment finalized on 1 June 2020
  • €66m EBITDA and 17.4% EBITDA margin
    1. EBITDA down -48.0% YoY in a context of strong declines in volumes and prices
  1. Performance of Fluorogases impacted by illegal HFC imports into Europe, easing towards the end of the period

CASH FLOW

In millions of euros

Q2'19

Q2'20

Comments

EBITDA

407

286

Current taxes

(48) *

(29)

Tax rate H1'20: ~22% of REBIT (excl. exceptional items)

Cost of debt

(25)

(17)

Change in working capital and fixed asset

Strict working capital management

(103)

103

16.5% working capital on annualized sales

payables (1)

(16.0% end of June 2019)

Recurring capital expenditure

(101)

(78)

2020e capex (recurring + exceptional) at ~€600m

Exceptional capital expenditure

(20)

(44)

Non recurring and others

(20) *

67

Non-recurring items include tax savings linked to the use of tax

losses for an amount of €55m in Q2'20

Free cash flow

90

288

Impact of portfolio management

(24)

242

Mainly corresponding to Functional Polyolefins divestment

Net cash flow

66

530

* Restated for tax impact on non-recurring items

1. Excluding non-recurring items and impact of portfolio management

NET DEBT

  • €2,134m net debt (incl. €1bn hybrid bonds)
  1. Sharp decrease compared to 31 March 2020 (€2,481m)
  1. €168m dividend payment
  1. €246m net proceeds from Functional Polyolefins' divestment
  1. 1.7x EBITDA of last 12 months

OUTLOOK FOR 2020

Based on the progressive lifting of lockdown measures in some important countries for the Group, Arkema expects that demand will continue to improve gradually in the second part of the year, while remaining below last year's level. The pace and strength of this improvement are still uncertain, dependent on the evolution of the pandemic, and will vary between end-markets and geographies. Arkema estimates at this stage that sales in the third quarter will decline by around 10 % year-on-year at constant scope and currency, representing a clear improvement compared to the decline of around 20% recorded in the second quarter.

In this context, Arkema will focus its efforts on the elements that are within its control, in particular costs, capital expenditure and working capital in order to maintain a strong level of liquidity. The Group thus confirms it is on track to reduce in 2020 its fixed costs by €50 million compared to 2019 and to reduce capital expenditure by €100 million compared to the level originally planned. Its innovation efforts in Specialty Materials will be preserved in order to meet its customers' numerous technological and sustainable development opportunities. Thanks to those initiatives, and on the back of its solid performance in the second quarter given the current environment, the Group remains very confident in its ability to deal with this unprecedented crisis, drawing also on its balanced geographic exposure, diversified end markets and strong balance sheet.

Finally, Arkema will continue its acquisition strategy, the roll-out of its major organic growth projects, as well as its strategic review for Intermediates, in line with its ambition to become a pure Specialty Materials player by 2024.

ARKEMA 420, rue d'Estienne d'Orves - F-92705 COLOMBES Cedex - France French société anonymewith share capital of €767,364,760 - 445 074 685 RCS

Disclaimer

Arkema SA published this content on 29 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 August 2020 14:51:19 UTC

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Sales 2020 7 864 M 9 255 M 9 255 M
Net income 2020 365 M 430 M 430 M
Net Debt 2020 1 643 M 1 933 M 1 933 M
P/E ratio 2020 18,1x
Yield 2020 2,56%
Capitalization 6 883 M 8 113 M 8 100 M
EV / Sales 2020 1,08x
EV / Sales 2021 1,02x
Nbr of Employees 20 500
Free-Float 89,5%
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Number of Analysts 19
Average target price 95,57 €
Last Close Price 90,08 €
Spread / Highest target 22,1%
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Spread / Lowest Target -11,2%
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Thierry le Hénaff Chairman & Chief Executive Officer
Marc Schuller Chief Operating Officer
Marie-José Donsion Chief Financial Officer
Christian Collette Chief Technical Officer
Laurent Mignon Independent Non-Executive Director
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