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MarketScreener Homepage  >  Equities  >  Euronext Paris  >  Arkema    AKE   FR0010313833

ARKEMA

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Arkema : Third-quarter 2020 results

11/05/2020 | 01:22am EST
Third-quarter 2020 results
11/05/2020- Press release
Corporate -Finance
Strong improvement in the Group's volumes compared to the second quarter and excellent cash generation in an environment which remains uncertain.
  • Sales of €1.9 billion (€2.2 billion in Q3'19):
    • 9% decline at constant scope and currency (-18% in Q2'20), in line with the guidance of around -10% issued end July. Negative volume effect of 4.4%
    • Rebound in the construction and decorative paints markets. Industrial markets remain well down overall, despite growth in certain niches with a high technological content such as batteries
  • EBITDA of €307 million (€385 million in Q3'19) and EBITDA margin of 16.1%:
    • Moderate decline in Specialty Materials (1) EBITDA, supported by Bostik's growth and the resilience of Advanced Materials' and Coating Solutions' margins
    • Marked decline in Intermediates despite the sequential improvement in PMMA
    • Continued fixed cost reduction initiatives
  • Adjusted net income of €109 million (€166 million in Q3'19), representing €1.42 per share
  • High free cash flow at €285 million (€218 million in Q3'19), reflecting the strict management of working capital and moderation of capital expenditure
  • Net debt down €265 million on 30 June 2020, at €1,869 million including hybrid bonds (€2,470 million at 30 September 2019)
  • Very successful issuance of the Group's first ever green bond for a total amount of €300 million dedicated to financing the growth project in bio-based polyamides in Singapore
  • Ongoing PMMA divestment process. New bolt-on acquisitions in Adhesive Solutions with the finalization on 1 October of the acquisitions of Fixatti and Ideal Work

(1) Specialty Materials include the three following segments: Adhesive Solutions, Advanced Materials and Coating Solutions

Following Arkema's Board of Directors' meeting, held on 4 November 2020 to review the Group's consolidated financial information for the third quarter of 2020, Chairman and CEO Thierry Le Hénaff said:

'After a second quarter marked by the development of the Covid-19 health crisis, global demand recovered in the third quarter and was supported in particular by the strong improvement of market segments linked to construction. Group volumes reflect a clear rebound compared to the previous quarter.

In a context that remains volatile and uncertain, Arkema continues to demonstrate its solidity thanks to the responsiveness and daily commitment of its teams. Specialty Materials, which now account for 83% of Group sales, showed a good level of resilience given the current environment. The Group continued to roll out its cost reduction initiatives and to strictly adapt its working capital. The high level of cash generation in the third quarter enabled us to further strengthen our balance sheet structure.

Beyond the short term, Arkema continues to implement its strategy announced on 2 April. Good progress has been made towards furthering the Group's sustainable transformation and its social commitment. In early October, Bostik acquired Ideal Work, the third external growth operation in Adhesive Solutions this year after LIP and Fixatti. Arkema issued, with a very positive response from financial markets, its first ever green bond for a total amount of €300 million dedicated to the financing of the bio-based polyamide plant in Singapore. Major advances have been made in innovative projects in mobility, in relation to batteries, lightweight materials and more recently hydrogen transportation and storage. Lastly, and we are particularly proud of this, the Group has for the first time recorded an injury rate that fell below the symbolic threshold of one accident per million hours worked over a 12-month period.'

Outlook

The fourth quarter is marked by a second wave of Covid-19 in many countries, especially in Europe, which could weigh on global demand. In this uncertain environment, Arkema estimates at this stage that activity levels should nevertheless be in the continuity of those of the third quarter, excluding a significant impact on the global economy linked to the new sanitary restrictions. Fourth-quarter sales could therefore decline by around 7% year on year at constant scope and currency, reflecting a solid performance of the construction market for Bostik and Coating Solutions, a sequential improvement for High Performance Polymers, but a continued marked decline in Intermediates.

Arkema will therefore continue to focus its efforts on the elements that are within its control, notably cost reduction initiatives and the strict management of working capital and capital expenditure.

The Group will also continue to implement its long-term strategy, notably its major industrial projects, targeted acquisitions and innovation initiatives in Specialty Materials to meet its customers' sustainable developments opportunities, as well as its strategic review for Intermediates, in line with its ambition to become a pure player in Specialty Materials by 2024.

Further details concerning the Group's third-quarter 2020 results are provided in the 'Third-quarter 2020 results' presentation and the Factsheet, both available on Arkema's website at www.arkema.com/en/investor-relations

Financial calendar
25 February 2021 Publication of full-year 2020 results
Contacts
Béatrice ZILM
Investor relations
Tel:+33 (0)1 49 00 86 37
Peter FARREN
Investor relations
Tel:+33 01 49 00 73 12
Arie TAIEB
Investor relations
Tel:+33 (0)1 49 00 72 07
Caroline CHUNG
Investor relations
Tel:+33 (0)1 49 00 74 37
Gilles GALINIER
VP Communication
Tel:+33 (0)1 49 00 70 07
Arkema
Véronique OBRECHT
Corporate Press relations
Tel:+33 (0)1 49 00 88 41
Arkema

Disclaimer

Arkema SA published this content on 05 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 November 2020 06:21:01 UTC


© Publicnow 2020
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Financials
Sales 2020 7 749 M 9 389 M 9 389 M
Net income 2020 367 M 445 M 445 M
Net Debt 2020 1 612 M 1 953 M 1 953 M
P/E ratio 2020 21,0x
Yield 2020 2,49%
Capitalization 7 437 M 8 982 M 9 011 M
EV / Sales 2020 1,17x
EV / Sales 2021 1,10x
Nbr of Employees 20 500
Free-Float 89,2%
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Technical analysis trends ARKEMA
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Income Statement Evolution
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Mean consensus OUTPERFORM
Number of Analysts 18
Average target price 100,58 €
Last Close Price 97,50 €
Spread / Highest target 14,9%
Spread / Average Target 3,16%
Spread / Lowest Target -9,74%
EPS Revisions
Managers and Directors
NameTitle
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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