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Arkema (Paris:AKE):
Solid performance in 2024, with EBITDA slightly up at €1.53
billion and an EBITDA margin of 16.1%, reflecting the Group's
resilience and capacity to adapt in a challenging macroeconomic
environment.
- Sales of €9.5 billion, stable compared with 2023:
- Volumes up 2.4% supported by growth in Specialty Materials in
Asia
- More favorable volume dynamics in certain markets such as
sports, packaging, batteries and energy
- Negative 3.0% price effect, reflecting a slight decrease in raw
materials prices
- EBITDA of €1,532 million and EBITDA margin
at 16.1%, slightly up compared to last year, benefiting from
the Group's balanced geographical footprint and the quality of its
portfolio of technologies:
- Significant growth in Adhesive Solutions and High Performance
Polymers, while results of Performance Additives and Coating
Solutions were down
- Contrasting trends between regions, with very strong growth in
Asia, a relative stability in North America and a decline in
Europe
- Adjusted net income of €616 million, representing
€8.23 per share (€8.75 in 2023) and recurring cash flow of
€419 million. Net debt and hybrid bonds of €3.2
billion at end-December, representing 2.1x EBITDA for
the year
- A proposed dividend up 2.9% at €3.60 per share
(€3.50 in 2023)
- Finalization on 2 December 2024 of the acquisition of
Dow's flexible packaging laminating adhesives business, another
important milestone in the development of the Adhesive Solutions
segment
- Continued progress of CSR indicators, leading the Group
to strengthen several 2030 targets, notably relating to Scope 3
greenhouse gas emissions
Chairman and CEO Thierry Le Hénaff said:
“I would like first of all to thank Arkema’s teams who were able
to adapt to a demanding macroeconomic and geopolitical context last
year. The Group thus once again achieved a solid financial
performance in 2024 and continued to implement its innovation
strategy for more sustainable solutions and the execution of
large-scale projects in Asia and North America which will have a
strong contribution in the future. 2024 was also a year of progress
in terms of CSR, notably in the areas of safety, climate and
diversity, with several achievements ahead of long-term objectives.
We are also pleased to have finalized the acquisition of Dow's
flexible packaging adhesives last December, a new step in the
growth strategy of our Adhesive Solutions segment in high
value-added technologies.”
Outlook
In a macroeconomic environment which remains uncertain and
marked by weak demand at the start of the year, the Group aims for
its EBITDA to grow in 2025 and reach between €1.53 billion and
€1.67 billion, supported by a significant additional contribution
from its major projects in Specialty Materials of around €100
million EBITDA compared to 2024, while Intermediates are expected
to decrease. The Group also plans to strongly increase its
recurring cash flow to around 600 million euros in 2025.
KEY FIGURES FOR 2024
in millions of euros
2024
2023
Change Sales
9,544
9,514
+0.3% EBITDA (a)
1,532
1,501
+2.1% Specialty Materials
1,420
1,373
+3.4% Intermediates
198
213
-7.0%
Corporate
-86
-85
EBITDA margin (a)
16.1%
15.8%
Specialty Materials
16.2%
15.8%
Intermediates
25.8%
26.7%
Recurring operating income (REBIT) (a)
895
939
-4.7%
REBIT margin (a)
9.4%
9.9%
Adjusted net income (a)
616
653
-5.7%
Adjusted net income per share (in €) (a)
8.23
8.75
-5.9%
Operating income
586
681
-14.0%
Net income - Group share
354
418
-15.3%
Recurring cash flow (a)
419
761
-44.9%
Free cash flow (a)
358
625
-42.7%
Net debt and hybrid bonds (a)
3,241
2,930
(a) Alternative performance indicator : refer to the
consolidated financial information at the end of December 2024
available at the end of the document for the reconciliation tables
and the definitions, detailed in sections 6 and 8
2024 BUSINESS PERFORMANCE
Group sales were stable compared with 2023, at €9,544
million (+0.3%) in a macroeconomic context marked by globally
weak demand. Group volumes were nevertheless up 2.4% on the
previous year, led by Specialty Materials (+3.1%), up in each
segment. They benefited in particular from sustained growth in Asia
and improved momentum in certain markets such as sports, packaging,
batteries and energy. On the other hand, the construction and
automotive sectors operated in a more difficult environment.
Intermediates volumes were down by 4.8%, impacted mechanically by
the reduction in existing quotas of refrigerant gases. The negative
3.0% price effect reflected the slight decrease in raw materials
prices, that stabilized in the second half, as well as the
unfavorable market conditions in upstream acrylics. The 2.0%
positive scope effect corresponded essentially to the acquisition
of PIAM in Advanced Materials and Arc Building Products in Adhesive
Solutions. The currency effect was a negative 1.1%, mainly due to
the depreciation of Latin American currencies and Chinese yuan
against the euro, while the US dollar appreciated towards the
year-end.
In 2024, the share of Specialty Materials was stable compared
with 2023, and represented 92% of Group’s sales. In addition, the
geographic breakdown of sales reflected observed market trends in
the various regions, with Asia and the rest of the world accounting
now for 32% of the Group’s sales (29% in 2023), North America 35%
(37% in 2023) and Europe 33% (34% in 2023).
At €1,532 million (€1,501 million in 2023), EBITDA
was up 2.1% on the previous year, led by very strong growth in
Asia, partly offset by a marked downturn in Europe while North
America remained stable. Specialty Materials EBITDA was up 3.4% on
2023, benefiting from a strong increase in Adhesive Solutions and
High Performance Polymers, while Performance Additives were down on
the previous year's high basis of comparison and Coating Solutions
were affected by low cycle market conditions in upstream acrylics.
This performance included the contribution of around €50 million
from major organic growth projects that will continue to ramp up
over the coming years. Intermediates were down, reflecting the
effect of existing quota mechanisms in refrigerant gases in Europe
and North America.
In a lackluster market environment, the Group achieved a good
level of EBITDA margin at 16.1% (15.8% in 2023),
benefiting from its balanced geographical footprint and reflecting
the quality of its portfolio of technologies, the improved product
mix, the strict control of its operations and the dynamic price
management.
At €637 million, recurring depreciation and amortization were up
compared to previous year (€562 million in 2023), mainly due to the
consolidation of PIAM and the start-up of new production units in
Advanced Materials. Recurring operating income (REBIT)
therefore amounted to €895 million (€939 million in 2023)
and REBIT margin came in at 9.4% (9.9% in 2023).
The financial result was stable compared to 2023,
representing a net expense of €73 million (net expense of
€70 million in 2023).
Excluding exceptional items, the effective tax rate stood at 22%
of recurring operating income in 2024. Adjusted net income
thus amounted to €616 million, representing €8.23 per
share (€8.75 per share in 2023).
In line with the policy of gradually increasing the dividend and
given last year’s results, the Board of Directors has decided that
it would recommend, at the annual general meeting of 22 May 2025, a
2.9% increase in the dividend at €3.60 per share for
2024, representing a payout ratio of 44% in line with the Group’s
long-term objectives. The dividend will be paid entirely in cash as
from 28 May 2025, with an ex-dividend date on 26 May 2025.
CASH FLOW AND NET DEBT AT 31 DECEMBER 2024
Operating cash flow amounted to €1,180 million
(€1,369 million in 2023), including a €60 million outflow linked to
changes in working capital and in fixed assets payables (€127
million inflow in 2023, benefiting from a favorable price effect).
Working capital remained well controlled and represented 13.8% of
the Group’s annual sales at 31 December 2024, excluding the working
capital of Dow’s laminating adhesives business consolidated at the
very end of the year (13.1% at 31 December 2023 excluding PIAM).
The EBITDA to operating cash conversion rate stood at 77%, in line
with the 70% target announced by the Group at the Capital Markets
Day in September 2023.
Recurring cash flow amounted to €419 million (€761
million in 2023), including an increase in recurring capital
expenditure to €761 million (€608 million in 2023), in line with
the guidance and reflecting the progress of several major projects.
After fine-tuning its analysis of potential future capital
expenditure and taking into account a projected slower ramp-up of
the electric vehicle market, the Group adjusted the capital
expenditure envelop that was announced at the September 2023
Capital Markets Day, and now plans to spend between €650 million
and €700 million a year over the 2025-28 period, and the amount for
2025 should be in the middle of this range.
Free cash flow stood at €358 million on the year
(€625 million in 2023), including a non-recurring cash outflow of
€61 million in 2024 corresponding essentially to start-up costs for
the Singapore platform and restructuring costs.
Net cash flow from portfolio management operations
represented a net outflow of €177 million in 2024, reflecting
mainly the acquisition of Dow's flexible packaging laminating
adhesives business and of Arc Building Products. The €708 million
net outflow in 2023 reflected essentially the acquisition of a 54%
majority stake in PI Advanced Materials.
Net debt and hybrid bonds stood at €3,241 million
at end-2024 (€2,930 million at end-2023), including notably the
€3.50 dividend per share for 2023 for a total payout of €261
million, the €35 million cost of share buybacks carried out by the
Group and €16 million in interest paid on hybrid bonds. The debt
also included the renewal in 2024 of the 10-year lease commitments
of the French and American head offices. At end-2024, net debt and
hybrid bonds represented 2.1x last twelve months EBITDA.
CSR PERFORMANCE
In 2024, Corporate Social Responsibility remained at the heart
of the Group's initiatives, with excellent results, ahead of
long-term objectives in many fields.
In the area of safety, the accident rate per million hours
worked continued to decrease to reach by 2024 the 2030 target of
0.8 (0.9 in 2023), which has led the Group to revise this objective
to 0.7 accidents per million hours worked. The process safety event
rate per million hours worked also improved to 2.5 (2.8 in 2023),
in line with the 2030 objective.
Decarbonization efforts have continued to pay off, with a 42%
reduction in Scopes 1 and 2 greenhouse gas emissions at the end of
2024 compared to the 2019 reference (39% at end-2023) and a 62%
reduction in Scope 3 emissions (53% at end-2023). These excellent
results reflect the continuation of the roll-out of the Group’s
climate plan, as well as the progressive decline of the most
emissive activities. Arkema has thus already exceeded its 2030
objective for Scope 3 emissions defined as part of the 1.5°C
trajectory validated by the Science Based Targets Initiative (SBTi)
and has set a new, more ambitious target of a 67% reduction in
Scope 3 emissions in 2030 compared to 2019 (against 54%
previously).
Arkema has also significantly decreased its water withdrawals to
82 million cu.m. during the year, reaching already in 2024 the
target originally set for 2030. The Group thus set a more ambitious
target at 80 million cu.m in 2030, representing a 27% reduction
compared to 2019. The 2030 target was also already exceeded for
emissions to water, measured through the chemical oxygen demand,
which fell by 69% compared with the 2012 baseline, with a 2030
reduction target revised to 70% (from 65% previously).
In addition, the portion of sales contributing significantly to
Sustainable Development Goals increased again to reach 53% of sales
(51% in 2023). However, the Group has revised its 2030 target to
60% (against 65% initially), to take into account the
slower-than-expected growth of the electric vehicle market.
Finally, Arkema was once again certified Top Employer 2025 in
ten countries and was awarded the Top Employer Europe label.
Initiatives to promote diversity were pursued, enabling to meet
already in 2024 the 2030 target of 30% of senior management and
executive positions held by women and leading to raising this
objective to 35%.
2024 PERFORMANCE BY SEGMENT
ADHESIVE SOLUTIONS (29% OF TOTAL GROUP SALES)
in millions of euros
2024
2023
Change Sales
2,722
2,714
+0.3%
EBITDA (a)
412
380
+8.4%
EBITDA margin (a)
15.1%
14.0%
Recurring operating income (REBIT) (a)
323
293
+10.2%
REBIT margin (a)
11.9%
10.8%
(a) Alternative performance indicator : refer to the
consolidated financial information at the end of December 2024
available the end of the document for reconciliation tables and
definitions, detailed in sections 6 and 8
Sales in the Adhesive Solutions segment were stable
compared with 2023 at €2,722 million. Volumes rose 2.4%,
supported by industrial adhesives, notably in the packaging and
labeling markets, as well as in durable goods in the first part of
the year, while the construction market stabilized at a low level.
The price effect was a negative 2.0%, primarily reflecting the
decrease of certain raw materials prices, and the currency effect
was a negative 1.2%. The 1.1% positive scope effect corresponded to
the consolidation of Arc Building Products over the whole year,
while the contribution of Dow’s flexible packaging laminating
adhesives business, acquired on 2 December 2024, was very
limited.
Up sharply by 8.4% compared to last year, EBITDA stood at
€412 million and the EBITDA margin improved
significantly by 110 bps, reaching a record level of 15.1%
over the year (14.0% in 2023), which confirms the segment's full
potential. Including the contribution of the latest bolt-on
acquisitions and related synergies, this good performance also
reflected the improvement in the product mix, the dynamic
management of selling prices reflecting the high added-value of our
high performance solutions, and operational excellence
initiatives.
ADVANCED MATERIALS (37% OF TOTAL GROUP SALES)
in millions of euros
2024
2023
Change Sales
3,562
3,562
-
EBITDA (a)
707
666
+6.2%
EBITDA margin (a)
19.8%
18.7%
Recurring operating income (REBIT) (a)
336
366
-8.2%
REBIT margin (a)
9.4%
10.3%
(a) Alternative performance indicator : refer to the
consolidated financial information at the end of December 2024
available the end of the document for reconciliation tables and
definitions, detailed in sections 6 and 8
Advanced Materials sales were stable compared with 2023
at €3,562 million. Volumes grew 1.2%, supported by a
positive dynamic in Asia, partially offset by the marked decline in
Europe. High Performance Polymers volumes showed good growth,
supported notably by the battery, sports, energy and medical
markets, but impacted by the slowdown in the automotive market in
the second-half, notably in Europe. Performance Additives volumes
were stable over the year, despite the impact of the temporary
shutdown of our German organic peroxides site following the
exceptional flooding of the Danube at the beginning of June. The
price effect was a negative 4.4%, mainly reflecting the evolution
of raw material prices. The segment's sales benefited also from a
4.7% positive scope effect corresponding to the contribution of
PIAM and the currency effect was a negative 1.5%.
EBITDA of €707 million was up by 6.2% compared to
last year, driven by growth in High Performance Polymers, which
benefited from a strong geographical footprint in Asia, the
contribution of new applicative developments, for example in
sports, PIAM consolidation and the development of fluorospecialties
with low emissive impact. Performance Additives were down on last
year’s high comparison base and were impacted by the temporary
shutdown of our German organic peroxides site. The EBITDA
margin increased significantly by 110 bps and reached
19.8% compared to 18.7% in 2023.
COATING SOLUTIONS (26% OF TOTAL GROUP SALES)
in millions of euros
2024
2023
Change Sales
2,455
2,402
+2.2%
EBITDA (a)
301
327
-8.0%
EBITDA margin (a)
12.3%
13.6%
Recurring operating income (REBIT) (a)
174
201
-13.4%
REBIT margin (a)
7.1%
8.4%
(a) Alternative performance indicator : refer to the
consolidated financial information at the end of December 2024
available the end of the document for reconciliation tables and
definitions, detailed in sections 6 and 8
Coating Solutions sales were 2.2% higher compared to last
year, and stood at €2,455 million, around 30% of which were
in acrylic monomers. Volumes increased by 6.8%, driven by the
segment’s downstream activities, in particular in the industrial
coatings and electronics markets, and benefited also from the
ramp-up of Sartomer's UV curing resins capacity expansion in China.
Volumes were also higher in upstream acrylics in Europe compared to
a low comparison base last year, notably supported by the hygiene
and water treatment markets. The negative 4.1% price effect
reflected the decrease of certain raw material prices compared to
last year and unfavorable market conditions in upstream acrylics.
The currency effect was limited to a negative 0.5%.
At €301 million (€327 million in 2023), EBITDA was
impacted by low cycle market conditions in upstream acrylics while
the EBITDA of downstream activities grew, supported by the increase
in volumes and the development of high value-added solutions
focused notably on sustainability. In this context, the EBITDA
margin benefited from the integration in the acrylic chain and
stood at 12.3% (13.6% in 2023).
INTERMEDIATES (8% OF TOTAL GROUP SALES)
in millions of euros
2024
2023
Change Sales
768
797
-3.6%
EBITDA (a)
198
213
-7.0%
EBITDA margin (a)
25.8%
26.7%
Recurring operating income (REBIT) (a)
157
170
-7.6%
REBIT margin (a)
20.4%
21.3%
(a) Alternative performance indicator : refer to the
consolidated financial information at the end of December 2024
available the end of the document for reconciliation tables and
definitions, detailed in sections 6 and 8
Sales in the Intermediates segment were down 3.6%
compared to last year at €768 million. Volumes decreased by
4.8% reflecting the reduction in existing quotas in refrigerant
gases in Europe and the United States, partially compensated by an
increase in volumes in acrylics in China. Up 3.1%, prices mainly
reflected the increase in refrigerant gases. At a negative 1.2%,
the scope effect corresponded to the disposal of non-strategic
assets in sebacic acid in China in the fourth quarter and the
currency effect was a negative 0.7%.
The segment's EBITDA remained at the very solid level of
€198 million, although down 7.0% compared to last year, the
decline in volumes linked to the quota mechanisms in refrigerant
gases being largely offset by the increase in prices. Moreover,
market conditions stayed at a low point in acrylics in China. In
this context, the EBITDA margin stood at 25.8% (26.7%
in 2023).
KEY FIGURES FOR FOURTH-QUARTER 2024
in millions of euros
Q4'24 Q4'23 Change
Sales
2,273
2,222
+2.3%
EBITDA (a)
324
331
-2.1%
Specialty Materials
311
312
-0.3%
Adhesive Solutions
91
94
-3.2%
Advanced Materials
166
149
+11.4%
Coating Solutions
54
69
-21.7%
Intermediates
24
40
-40.0%
Corporate
-11
-21
EBITDA margin (a)
14.3%
14.9%
Specialty Materials
14.8%
15.2%
Adhesive Solutions
13.9%
14.6%
Advanced Materials
18.8%
17.4%
Coating Solutions
9.6%
12.5%
Intermediates
14.5%
24.8%
Recurring operating income (REBIT) (a)
145
174
-16.7%
REBIT margin (a)
6.4%
7.8%
Adjusted net income (a)
96
107
-10.3%
Adjusted net income per share (in €) (a)
1.27
1.43
-11.2%
Operating income
50
82
-39.0%
Net income - Group share
12
20
-40.0%
Recurring cash flow (a)
157
325
-51.7%
Free cash flow (a)
148
283
-47.7%
(a) Alternative performance indicator : refer to the consolidated
financial information at the end of December 2024 available at the
end of the document for reconciliation tables and definitions,
detailed in sections 6 and 8
Group sales in fourth-quarter 2024 increased by 2.3%
compared to last year and stood at €2,273 million. Up 3.2%,
volumes improved in all segments and remained driven by Asia. They
grew in the battery, sports and packaging markets, while the
automotive market remained down. The negative 1.9% price effect was
in line with the evolution of raw materials and reflected also
market conditions in acrylics. The 1.4% positive scope effect
corresponded essentially to the acquisition of PIAM in Advanced
Materials. The currency effect was limited to a negative 0.4%, the
depreciation of Latin American currencies against the euro being
offset by the appreciation of the US dollar and Chinese yuan during
the fourth quarter.
EBITDA was down slightly by 2.1% year on year, at €324
million. It was stable in Specialty Materials and down in
Intermediates compared to a high comparison base in refrigerant
gases in the fourth quarter of previous year. The EBITDA
margin was slightly down at 14.3% (14.9% in Q4'23).
Adhesive Solutions sales stood at €654 million, up
1.9% compared with fourth-quarter 2023, essentially reflecting the
2.2% positive scope effect which corresponded notably to the
consolidation of Dow’s laminating adhesives business in December.
Volumes were up 0.6%, while the currency effect was limited to a
negative 0.8% and the price effect was almost stable at a negative
0.1%.
At €91 million, the segment’s EBITDA was down
slightly by 3.2% compared to the particularly high comparison base
of the fourth quarter of last year and the EBITDA margin
stood at 13.9% (14.6% in Q4'23).
Up 2.8% compared to fourth-quarter 2023, sales in the
Advanced Materials segment stood at €881 million. Volumes
were up 2.4%, driven primarily by High Performance Polymers volumes
in the battery, sports and health markets. The negative 2.3% price
effect reflected the evolution of raw materials. The positive 3.3 %
scope effect corresponded to a contribution of two additional
months of PIAM in the fourth quarter of 2024 compared to last year.
The impact of the currency effect was low at a negative 0.6%.
The segment's EBITDA grew significantly by 11.4% to
€166 million, driven by High Performance Polymers, which
benefited from new developments linked to sustainable megatrends
and the contribution of PIAM. Performance Additives were down,
impacted notably by the residual effects of the temporary shutdown
of the organic peroxides site in Germany. The EBITDA margin
was sharply up by 140 bps and reached 18.8% (17.4% in
Q4'23).
At €565 million, Coating Solutions segment’s sales
were up 2.4% year-on-year, mainly driven by an increase in volumes
of 2.6 %, which improved notably in upstream acrylics in Europe
compared to a weak comparison base last year, supported in
particular by the hygiene and water treatment markets. The price
effect was stable, with the good performance of the segment's
downstream activities offsetting the unfavorable market conditions
in upstream acrylics. The currency effect was limited to a negative
0.2%.
EBITDA was down to €54 million (€69 million in
Q4’23), essentially impacted by low cycle margins in upstream
acrylics, while the EBITDA of the segment’s downstream activities
were stable compared to last year. The EBITDA margin stood
at 9.6% (12.5% in Q4'23).
At €165 million, sales of the Intermediates
segment increased by 2.5% compared to the fourth quarter of 2023.
It benefited from a marked increase in volumes of 20.5%, driven
mainly by acrylics in Asia, compared to a low point last year. The
price effect was a negative 13.0 % compared to a reference base for
last year which benefited from particularly favorable dynamics in
refrigerant gases in Europe and the United States. The scope effect
was a negative 6.2%, corresponding to the disposal of non-strategic
assets in sebacic acid in China in the fourth quarter, and the
currency effect was a positive 1.2%.
At €24 million (€40 million in Q4’23), EBITDA was
down year-on-year, mainly impacted by refrigerant gases. In this
context, the EBITDA margin stood at 14.5% (24.8% in
Q4'23).
FOURTH-QUARTER 2024 HIGHLIGHTS
On 2 December 2024, Arkema finalized the acquisition of Dow's
flexible packaging laminating adhesives business for an enterprise
value of US$150 million, marking an important milestone in the
strategy to strengthen the Group's position in the flexible
packaging adhesives market. This acquisition will enable Arkema to
ideally complement its existing commercial presence, product
offering and technological breadth for flexible packaging. Beyond
benefiting from the underlying growth and from the recovery of the
market, the Group aims to rapidly capture new growth opportunities.
It also expects to deliver a high level of cost and development
synergies, which should represent around US$30 million in EBITDA
after 5 years.
SUBSEQUENT EVENTS
On 21 January 2025, Arkema presented to the Central Works
Council a project to reorganize the activities of its Jarrie site
in order to ensure its future by refocusing on hydrogen peroxide,
chlorate and perchlorate activities, sectors in which Arkema is one
of the world leaders. The Jarrie site has been impacted since 23
October 2024, by the abrupt cessation of its salt supply by its
historical supplier Vencorex, which has been placed in receivership
by its Thai shareholder PTT GC. This project, which will allow the
consolidation and development of Jarrie’s major product lines,
would result in the shutdown of the chlorine, soda, methyl chloride
and technical fluids production activities and the loss of 154
jobs.
On 26 February 2025, Arkema announced a 15% capacity expansion
of its PVDF production site in Calvert City, Kentucky, representing
an investment of around 20 million US dollars, aligned with the
strategy of the Group to increase its global PVDF footprint at a
pace and with capabilities that match the development of the
market. This expansion, whose startup is planned for mid-2026, will
support the increasing demand for locally manufactured
high-performance resins for lithium-ion batteries, as well as the
growing semiconductor and cable markets.
OUTLOOK
In a macroeconomic environment that remains uncertain and marked
by weak demand at the start of the year, the Group will continue to
rely on its balanced geographical footprint and the diversity of
its end markets to benefit from the different regional dynamics and
will continue its cost control actions, as well as the strict
management of its operations.
Arkema has also strong development potential thanks to the major
growth projects, in which it has recently invested. These include
acquisitions in the polyimides sector with PIAM, and in the
adhesives sector with Ashland and Dow, as well as the new
production capacities in Advanced Materials to serve attractive
markets such as bio-based consumer products, new energies,
electrification, 3D printing or sports. Building on these projects
and the respective dynamics of each region, the Group’s sales
breakdown should continue to evolve and could reach in the
long-term around 40% in North America, 35% in Asia and the rest of
the world and 25% in Europe.
Based on these factors, the Group aims for its EBITDA to grow in
2025 and reach between €1.53 billion and €1.67 billion depending on
the evolution of macroeconomic conditions, with a first quarter
slightly below last year. The Group will benefit from the
progressive ramp up during the year of its major projects in
Specialty Materials, with a significant additional contribution of
around €100 million EBITDA compared to 2024, while Intermediates
are expected to decrease. The Group also plans to strongly increase
its recurring cash flow to around 600 million euros in 2025.
Arkema will also continue to implement its strategic roadmap
unveiled at the Capital Markets Day in September 2023, notably its
innovation efforts and the development of high-performance
solutions for a less carbon-intensive and more sustainable world,
in partnership with its customers.
Further details concerning the Group's 2024 results are provided
in the "Full-year 2024 results and outlook" presentation and the
"Factsheet", both available on Arkema's website at:
www.arkema.com/global/en/investor-relations/
The consolidated financial statements at 31 December 2024 have
been audited, and an unqualified certification report has been
issued by the Company's statutory auditors. These financial
statements and the statutory auditors’ report have been posted on
the Company’s website at:
www.arkema.com/global/en/investor-relations/
FINANCIAL CALENDAR
7 May 2025: Publication of first-quarter 2025 results
22 May 2025: Annual general meeting
31 July 2025: Publication of first-half 2025 results
7 November 2025: Publication of third-quarter 2025 results
DISCLAIMER
The information disclosed in this press release may contain
forward-looking statements with respect to the financial position,
results of operations, business and strategy of Arkema.
In a context of significant geopolitical tensions, where the
outlook for the global economy remains uncertain, the retained
assumptions and forward-looking statements could ultimately prove
inaccurate.
Such statements are based on management's current views and
assumptions that could ultimately prove inaccurate and are subject
to risk factors such as (but not limited to) changes in raw
materials prices, currency fluctuations, and the pace at which
cost-reduction projects are implemented, escalating geopolitical
tensions, and changes in general economic and financial conditions.
Arkema does not assume any liability to update such forward-looking
statements whether as a result of any new information or any
unexpected event or otherwise. Further information on factors which
could affect Arkema's financial results is provided in the
documents filed with the French Autorité des marchés
financiers.
Balance sheet, income statement and cash flow statement data, as
well as data relating to the statement of changes in shareholders'
equity and information by segment included in this press release
are extracted from the consolidated financial statements at 31
December 2024 as approved by Arkema's Board of Directors on 26
February 2025. Quarterly financial information is not audited.
Information by segment is presented in accordance with Arkema's
internal reporting system used by management. Definitions and
reconciliation tables for the main alternative performance
indicators used by the Group are provided in Sections 6 and 8 to
the 31 December 2024 consolidated financial information available
at the end of this document.
For the purpose of tracking changes in its results, and
particularly its sales figures, the Group analyzes the following
effects (unaudited analyses):
- scope effect: the impact of changes in the Group's scope
of consolidation, which arise from acquisitions and divestments of
entire businesses or as a result of the first-time consolidation or
deconsolidation of entities. Increases or reductions in capacity
are not included in the scope effect;
- currency effect: the mechanical impact of consolidating
accounts denominated in currencies other than the euro at different
exchange rates from one period to another. The currency effect is
calculated by applying the foreign exchange rates of the prior
period to the figures for the period under review;
- price effect: the impact of changes in average selling
prices is estimated by comparing the weighted average net unit
selling price of a range of related products in the period under
review with their weighted average net unit selling price in the
prior period, multiplied, in both cases, by the volumes sold in the
period under review; and
- volume effect: the impact of changes in volumes is
estimated by comparing the quantities delivered in the period under
review with the quantities delivered in the prior period,
multiplied, in both cases, by the weighted average net unit selling
price in the prior period.
Building on its unique set of expertise in materials science,
Arkema offers a portfolio of first-class technologies to
address ever-growing demand for new and sustainable materials. With
the ambition to become a pure player in Specialty Materials in
2024, the Group is structured into three complementary, resilient
and highly innovative segments dedicated to Specialty Materials -
Adhesive Solutions, Advanced Materials, and Coating Solutions -
accounting for some 92% of Group sales in 2024, and a
well-positioned and competitive Intermediates segment. Arkema
offers cutting-edge technological solutions to meet the challenges
of, among other things, new energies, access to water, recycling,
urbanization and mobility, and fosters a permanent dialogue with
all its stakeholders. The Group reported sales of around €9.5
billion in 2024 and operates in some 55 countries with 21,150
employees worldwide.
ARKEMA financial statements
Consolidated financial information - At the
end of December 2024
1. CONSOLIDATED INCOME STATEMENT 4th quarter 2024 4th quarter 2023 (In millions of euros)
Sales
2,273
2,222
Operating expenses
(1,873)
(1,797)
Research and development expenses
(71)
(71)
Selling and administrative expenses
(225)
(213)
Other income and expenses
(54)
(59)
Operating income
50
82
Equity in income of affiliates
(2)
(2)
Financial result
(20)
(26)
Income taxes
(20)
(31)
Net income
8
23
Attributable to non-controlling interests
(4)
3
Net income - Group share
12
20
Earnings per share (amount in euros)
0.15
0.27
Diluted earnings per share (amount in euros)
0.15
0.27
End of December 2024
End of December 2023 (In
millions of euros)
Sales
9,544
9,514
Operating expenses *
(7,605)
(7,554)
Research and development expenses *
(278)
(275)
Selling and administrative expenses
(920)
(874)
Other income and expenses
(155)
(130)
Operating income
586
681
Equity in income of affiliates
(6)
(9)
Financial result
(73)
(70)
Income taxes
(150)
(177)
Net income
357
425
Attributable to non-controlling interests
3
7
Net income - Group share
354
418
Earnings per share (amount in euros)
4.51
5.39
Diluted earnings per share (amount in euros)
4.49
5.36
*Includes a correction of Q3’24 data (transfer between
“Operating expenses” and “Research and development expenses”)
2.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
4th
quarter 2024 4th quarter 2023 (In millions of euros)
Net income
8
23
Hedging adjustments
(13)
6
Other items
—
—
Deferred taxes on hedging adjustments and other items
0
1
Change in translation adjustments
237
(155)
Other recyclable comprehensive income
224
(148)
Impact of remeasuring unconsolidated investments
(2)
—
Actuarial gains and losses
4
(41)
Deferred taxes on actuarial gains and losses
(1)
8
Other non-recyclable comprehensive income
1
(33)
Total other comprehensive income
225
(181)
Total comprehensive income
233
(158)
Attributable to non-controlling interest
(18)
(2)
Total comprehensive income - Group share
251
(156)
End of December
2024 End of December
2023 (In millions of euros)
Net income
357
425
Hedging adjustments
(3)
(45)
Other items
—
—
Deferred taxes on actuarial gains and losses
(1)
3
Change in translation adjustments
153
(189)
Other recyclable comprehensive income
149
(231)
Impact of remeasuring unconsolidated investments
(3)
—
Actuarial gains and losses
8
(22)
Deferred taxes on actuarial gains and losses
(2)
4
Other non-recyclable comprehensive income
3
(18)
Total other comprehensive income
152
(249)
Total comprehensive income
509
176
Attributable to non-controlling interest
(22)
0
Total comprehensive income - Group share
531
176
3. CONSOLIDATED CASH FLOW STATEMENT
End of December 2024
End of December 2023 (In
millions of euros) Net income
357
425
Depreciation, amortization and impairment of assets
802
718
Other provisions and deferred taxes
2
(30)
(Gains)/Losses on sales of long-term assets
(1)
(34)
Undistributed affiliate equity earnings
7
10
Change in working capital
(87)
158
Other changes
41
25
Cash flow from operating activities
1,121
1,272
Intangible assets and property, plant, and equipment
additions
(761)
(634)
Change in fixed asset payables
34
(44)
Acquisitions of operations, net of cash acquired
(150)
(714)
Increase in long-term loans
(132)
(71)
Total expenditures
(1,009)
(1,463)
Proceeds from sale of intangible assets and property, plant
and equipment
10
14
Change in fixed asset receivables
(7)
(1)
Proceeds from sale of operations, net of cash transferred
3
32
Repayment of long-term loans
63
63
Total divestitures
69
108
Cash flow from investing activities
(940)
(1,355)
Issuance/(Repayment) of shares and paid-in surplus
63
—
Acquisition/sale of treasury shares
(35)
(32)
Issuance of hybrid bonds
399
—
Redemption of hybrid bonds
(400)
—
Dividends paid to parent company shareholders
(261)
(253)
Interest paid to bearers of subordinated perpetual notes
(16)
(16)
Dividends paid to non-controlling interests and buyout of minority
interests
(2)
(3)
Increase in long-term debt
502
1,096
Decrease in long-term debt
(791)
(85)
Increase / (Decrease) in short-term debt
334
(191)
Cash flow from financing activities
(207)
516
Net increase/(decrease) in cash and cash equivalents
(26)
433
Effect of exchange rates and changes in scope
(6)
20
Cash and cash equivalents at beginning of period
2,045
1,592
Cash and cash equivalents at end of the period
2,013
2,045
4. CONSOLIDATED BALANCE SHEET 31 December 2024 31
December 2023 (In millions of euros)
ASSETS Goodwill
3,071
3,040
Other intangible assets, net
2,373
2,416
Property, plant and equipment, net
4,227
3,730
Investments in equity affiliates
11
13
Other investments
50
52
Deferred tax assets
155
157
Other non-current assets
327
251
TOTAL NON-CURRENT ASSETS
10,214
9,659
Inventories
1,348
1,208
Accounts receivable
1,312
1,261
Other receivables and prepaid expenses
201
170
Income taxes recoverable
101
142
Current financial derivative assets
20
32
Cash and cash equivalents
2,013
2,045
Assets held for sale
—
—
TOTAL CURRENT ASSETS *
4,995
4,858
TOTAL ASSETS
15,209
14,517
LIABILITIES AND SHAREHOLDERS' EQUITY
Share capital
761
750
Paid-in surplus and retained earnings
6,439
6,304
Treasury shares
(22)
(21)
Translation adjustments
348
170
SHAREHOLDERS' EQUITY - GROUP SHARE
7,526
7,203
Non-controlling interests
235
252
TOTAL SHAREHOLDERS' EQUITY
7,761
7,455
Deferred tax liabilities
435
436
Provisions for pensions and other employee benefits
391
397
Other provisions and non-current liabilities
456
416
Non-current debt
3,680
3,734
TOTAL NON-CURRENT LIABILITIES
4,962
4,983
Accounts payable
1,074
1,036
Other creditors and accrued liabilities
424
392
Income tax payables
82
83
Current financial derivative liabilities
32
27
Current debt
874
541
Liabilities associated with assets held for sale
—
—
TOTAL CURRENT LIABILITIES
2,486
2,079
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
15,209
14,517
* Includes a correction of Total Current Assets for 31 December
2023
5. CONSOLIDATED STATEMENT OF
CHANGES IN SHAREHOLDERS’ EQUITY
Shares issued
Treasury shares
Shareholders' equity - Group
share
Non-controlling
interests*
Shareholders' equity
(In millions of euros)
Number
Amount
Paid-in surplus
Hybrid bonds
Retained earnings
Translation
adjustments
Number
Amount
At 1st January 2024
75,043,514
750
1,067
700
4,537
170
(228,901)
(21)
7,203
252
7,455
Cash dividend
—
—
—
—
(277)
—
—
—
(277)
(2)
(279)
Issuance of share capital
1,017,317
11
50
—
—
—
—
—
61
—
61
Capital reduction by cancellation of treasury shares
—
—
—
—
—
—
—
—
—
—
—
Acquisition/sale of treasury shares
—
—
—
—
—
—
(404,485)
(35)
(35)
—
(35)
Grants of treasury shares to employees
—
—
—
—
(34)
—
376,226
34
0
—
0
Share-based payments
—
—
—
—
40
—
—
—
40
—
40
Issuance of hybrid bonds
—
—
—
400
(1)
—
—
—
399
—
399
Redemption of hybrid bonds
—
—
—
(400)
—
—
—
—
(400)
—
(400)
Other
—
—
—
—
4
—
—
—
4
7
11
Transactions with shareholders
—
11
50
0
(268)
—
(28,259)
(1)
(208)
5
(203)
Net income
—
—
—
—
354
—
—
—
354
3
357
Total income and expense recognized directly through equity
—
—
—
—
(1)
178
—
—
177
(25)
152
Total comprehensive income
—
—
—
—
353
178
—
—
531
(22)
509
At 31 December 2024
76,060,831
761
1,117
700
4,622
348
(257,160)
(22)
7,526
235
7,761
6. ALTERNATIVE PERFORMANCE INDICATORS The Group uses
performance indicators that are not directly defined in the
consolidated financial statements under IFRS and which are used as
monitoring and analysis tools. The purpose of these indicators is
to provide additional information to illustrate the Group's
financial performance and its various activities, notably by
eliminating exceptional or non-recurring items in certain cases, to
ensure period-on-period comparability. In some cases, the
indicators may also provide a consistent basis for comparison with
the financial performance of our peers. A reconciliation with the
aggregates of the IFRS consolidated financial statements is
presented in this note.
RECURRING OPERATING INCOME
(REBIT) AND EBITDA (In millions of euros)
End of December 2024
End of December 2023
4th
quarter 2024 4th quarter 2023 OPERATING INCOME
586
681
50
82
- Depreciation and amortization related to the revaluation of
property, plant and equipment and intangible assets as part of the
allocation of the purchase price of businesses
(154)
(128)
(41)
(33)
- Other income and expenses
(155)
(130)
(54)
(59)
RECURRING OPERATING INCOME (REBIT)
895
939
145
174
- Recurring depreciation and amortization of property, plant and
equipment and intangible assets
(637)
(562)
(179)
(157)
EBITDA
1,532
1,501
324
331
Details of depreciation and
amortization of property, plant and equipment and intangible
assets: (In millions of euros)
End of December 2024 End of December 2023 4th quarter 2024 4th quarter 2023 Depreciation and
amortization of property, plant and equipment and intangible
assets
(802)
(718)
(220)
(206)
Of which: Recurring depreciation and amortization of property,
plant and equipment and intangible assets
(637)
(562)
(179)
(157)
Of which: Depreciation and amortization related to the revaluation
of property, plant and equipment and intangible assets as part of
the allocation of the purchase price of businesses
(154)
(128)
(41)
(33)
Of which: Impairment included in other income and expenses
(11)
(28)
0
(16)
ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER
SHARE (In millions of euros)
End of December 2024 End of December 2023 4th quarter 2024 4th quarter 2023 NET INCOME - GROUP
SHARE
354
418
12
20
- Depreciation and amortization related to the revaluation of
property, plant and equipment and intangible assets as part of the
allocation of the purchase price of businesses
(154)
(128)
(41)
(33)
- Other income and expenses
(155)
(130)
(54)
(59)
- Other income and expenses attributable to non-controlling
interests
—
—
—
—
- Taxes on depreciation and amortization related to the revaluation
of property, plant and equipment and intangible assets as part of
the allocation of the purchase price of businesses
34
30
9
7
- Taxes on other income and expenses
21
14
4
0
- One-time tax effects
(8)
(21)
(2)
(2)
ADJUSTED NET INCOME
616
653
96
107
Weighted average number of ordinary shares
74,869,439
74,647,205
Weighted average number of potential ordinary shares
75,204,737
75,043,514
ADJUSTED EARNINGS PER SHARE (in euros)
8.23
8.75
1.27
1.43
DILUTED ADJUSTED EARNINGS PER SHARE (in euros)
8.19
8.70
1.27
1.42
RECURRING CAPITAL EXPENDITURE (In
millions of euros)
End of December
2024 End of December
2023 4th quarter 2024
4th
quarter 2023 INTANGIBLE
ASSETS AND PROPERTY, PLANT, AND EQUIPMENT ADDITIONS
761
634
325
268
- Exceptional capital expenditure
—
26
—
9
- Investments relating to portfolio management operations
—
—
—
—
- Capital expenditure with no impact on net debt
—
—
—
—
RECURRING CAPITAL EXPENDITURE
761
608
325
259
CASH FLOWS AND EBITDA TO CASH CONVERSION RATE
(In millions of euros)
End of
December 2024 End of December
2023 4th quarter 2024
4th
quarter 2023 Cash flow from
operating activities
1,121
1,272
407
462
+ Cash flow from investing activities
(940)
(1,355)
(394)
(843)
NET CASH FLOW
181
(83)
13
(381)
- Net cash flow from portfolio management operations
(177)
(708)
(135)
(664)
FREE CASH FLOW
358
625
148
283
Exceptional capital expenditure
—
(26)
—
(9)
- Non-recurring cash flow
(61)
(110)
(9)
(33)
RECURRING CASH FLOW
419
761
157
325
- Recurring capital expenditure
(761)
(608)
(325)
(259)
OPERATING CASH FLOW
1,180
1,369
482
584
(In millions of euros)
End
of December 2024 End of
December 2023 RECURRING CASH FLOW
419
761
EBITDA
1,532
1,501
EBITDA TO CASH CONVERSION RATE
27.3%
50.7%
(In millions of euros)
End
of December 2024 End of
December 2023 OPERATING CASH FLOW
1,180
1,369
EBITDA
1,532
1,501
EBITDA TO OPERATING CASH CONVERSION RATE
77.0 %
91.2 %
NET DEBT (In millions of euros)
End of December 2024
End of December 2023
Non-current debt
3,680
3,734
+ Current debt
874
541
- Cash and cash equivalents
2,013
2,045
NET DEBT
2,541
2,230
+ Hybrid bonds
700
700
NET DEBT AND HYBRID BONDS
3,241
2,930
EBITDA
1,532
1,501
NET DEBT AND HYBRID BONDS TO EBITDA RATIO
2.12
1.95
WORKING CAPITAL (In millions of euros)
End of December 2024
End of December 2023
Inventories
1,348
1,208
+ Accounts receivable
1,312
1,261
+ Other receivables including income taxes recoverable
302
312
+ Current financial derivative assets
20
32
- Accounts payable (operating suppliers)
1,074
1,036
- Other liabilities including income taxes
506
475
- Current financial derivative liabilities
32
27
WORKING CAPITAL
1,370
1,275
CAPITAL EMPLOYED (In millions of euros)
End of December 2024
End of December 2023
Goodwill, net
3,071
3,040
+ Intangible assets (excluding goodwill), and property, plant and
equipment, net
6,600
6,146
+ Investments in equity affiliates
11
13
+ Other investments and other non-current assets
377
303
+ Working capital
1,370
1,275
CAPITAL EMPLOYED
11,429
10,777
Adjustment *
-
(1,038)
ADJUSTED CAPITAL EMPLOYED
11,429
9,739
* In 2023, capital employed of PIAM, consolidated at the end of the
year and with no material contribution to income for the year. No
adjustment in 2024 for the acquisition of Dow's flexible packaging
laminating adhesives, as the capital employed relating to this
business is not material for the Group.
RETURN ON CAPITAL
EMPLOYED (ROCE) (In millions of euros)
End of December 2024 End of December 2023 Recurring
operating income (REBIT)
895
939
Capital employed
11,429
10,777
RETURN ON CAPITAL EMPLOYED (ROCE)
7.8 %
8.7 %
RETURN ON ADJUSTED CAPITAL EMPLOYED (In
millions of euros)
End of December
2024 End of December
2023 Recurring operating income (REBIT)
895
939
Adjusted capital employed
11,429
9,739
RETURN ON ADJUSTED CAPITAL EMPLOYED
7.8 %
9.6 %
7. INFORMATION BY SEGMENT 4th quarter 2024 (In millions of euros)
Adhesive Solutions Advanced Materials Coating
Solutions Intermediates Corporate Total
Sales
654
881
565
165
8
2,273
EBITDA (a)
91
166
54
24
(11)
324
Recurring depreciation and amortization of property, plant and
equipment and intangible assets (a)
(24)
(108)
(34)
(9)
(4)
(179)
Recurring operating income (REBIT) (a)
67
58
20
15
(15)
145
Depreciation and amortization related to the revaluation of
property, plant and equipment and intangible assets as part of the
allocation of the purchase price of businesses
(27)
(13)
(1)
—
—
(41)
Other income and expenses
(18)
(25)
2
5
(18)
(54)
Operating income
22
20
21
20
(33)
50
Equity in income of affiliates
—
(2)
—
—
—
(2)
Intangible assets and property, plant, and equipment
additions
41
183
70
7
24
325
Of which: recurring capital expenditure (a)
41
183
70
7
24
325
4th quarter 2023
(In millions of euros)
Adhesive Solutions Advanced
Materials Coating Solutions Intermediates
Corporate Total Sales
642
857
552
161
10
2,222
EBITDA (a)
94
149
69
40
(21)
331
Recurring depreciation and amortization of property, plant and
equipment and intangible assets (a)
(25)
(93)
(32)
(5)
(2)
(157)
Recurring operating income (REBIT) (a)
69
56
37
35
(23)
174
Depreciation and amortization related to the revaluation of
property, plant and equipment and intangible assets as part of the
allocation of the purchase price of businesses
(25)
(6)
(2)
—
—
(33)
Other income and expenses
(10)
(44)
(2)
1
(4)
(59)
Operating income
34
0
6
33
36
(27)
82
Equity in income of affiliates
—
(3)
—
1
—
(2)
Intangible assets and property, plant, and equipment
additions
34
159
53
13
9
268
Of which: recurring capital expenditure (a)
34
150
53
13
9
259
(a) Alternative performance indicator: refer to sections 6
and 8 for reconciliation tables and definitions.
7. INFORMATION
BY SEGMENT End of December
2024 (In millions of euros)
Adhesive Solutions
Advanced Materials Coating Solutions
Intermediates Corporate Total
Sales
2,722
3,562
2,455
768
37
9,544
EBITDA (a)
412
707
301
198
(86)
1,532
Recurring depreciation and amortization of property, plant and
equipment and intangible assets (a)
(89)
(371)
(127)
(41)
(9)
(637)
Recurring operating income (REBIT) (a)
323
336
174
157
(95)
895
Depreciation and amortization related to the revaluation of
property, plant and equipment and intangible assets as part of the
allocation of the purchase price of businesses
(108)
(40)
(6)
—
—
(154)
Other income and expenses
(43)
(89)
2
4
(29)
(155)
Operating income
172
207
170
161
(124)
586
Equity in income of affiliates
—
(6)
—
—
—
(6)
Intangible assets and property, plant, and equipment
additions
89
459
141
21
51
761
Of which: recurring capital expenditure (a)
89
459
141
21
51
0
761
End of December
2023 (In millions of euros)
Adhesive Solutions
Advanced Materials Coating Solutions
Intermediates Corporate Total
Sales
2,714
3,562
2,402
797
39
9,514
EBITDA (a)
380
666
327
213
(85)
1,501
Recurring depreciation and amortization of property, plant and
equipment and intangible assets (a)
(87)
(300)
(126)
(43)
(6)
(562)
Recurring operating income (REBIT) (a)
293
366
201
170
(91)
939
Depreciation and amortization related to the revaluation of
property, plant and equipment and intangible assets as part of the
allocation of the purchase price of businesses
(102)
(19)
(7)
—
—
(128)
Other income and expenses
(32)
(81)
(3)
—
(14)
(130)
Operating income
159
266
191
170
(105)
681
Equity in income of affiliates
—
(10)
—
1
—
(9)
Intangible assets and property, plant, and equipment
additions
82
389
115
28
20
634
Of which: recurring capital expenditure (a)
82
363
0
115
28
20
608
(a) Alternative performance indicator: refer to sections 6
and 8 for reconciliation tables and definitions.
8. DEFINITIONS OF ALTERNATIVE PERFORMANCE
INDICATORS
- Recurring depreciation and amortization of property, plant
and equipment and intangible assets
This alternative performance indicator corresponds to
depreciation, amortization and impairment of property, plant and
equipment and intangible assets before taking into account:
- depreciation and amortization related to the revaluation of
property, plant and equipment and intangible assets as part of the
allocation of the purchase price of businesses, and
- impairment included in other income and expenses.
The indicator facilitates period-to-period comparisons by
eliminating non-recurring items.
This alternative performance indicator corresponds to the net
amount of current assets and liabilities relating to operating
activities, capital expenditure and financing activities. It
reflects the Group’s short-term financing requirements resulting
from cash flow timing differences between outflows and inflows
relating to operating activities.
This alternative performance indicator corresponds to the sum of
the following:
- the net book value of goodwill,
- the net book value of intangible assets (excluding goodwill)
and property, plant and equipment,
- the amount of investments in equity affiliates,
- the amount of other investments and other non-current assets,
and
- working capital.
Capital employed is used to analyze the amount of capital
invested by the Group to conduct its business.
- Adjusted capital employed
This alternative performance indicator corresponds to capital
employed adjusted for divestments and acquisitions, to ensure
consistency between the numerator and denominator items used to
calculate ROCE.
In the case of an announced divestment of a business announced
and not finalized by 31 December, the operating income of this
business remains consolidated in the income statement, and is
therefore included in the calculation of REBIT, whereas items
relating to capital employed are classified as assets/liabilities
held for sale and are therefore excluded from the calculation of
capital employed. To ensure consistency between the numerator and
denominator items used to calculate ROCE, capital employed at 31
December is increased by the capital employed relating to the
business being sold.
When an acquisition is finalized during the year, operating
results are only consolidated in the income statement from the date
of acquisition, and not for the full year, while capital employed
is recognized in full at 31 December. When the acquisition has not
generated a material contribution to the year's earnings, in order
to ensure consistency between the numerator and denominator items
used to calculate ROCE, capital employed at 31 December is reduced
by the capital employed relating to the acquired business, unless
they are considered as not material.
This alternative performance indicator corresponds to the sum of
current and non-current debt less cash and cash equivalents.
- Net debt and hybrid bonds
This alternative performance indicator corresponds to the amount
of net debt and hybrid bonds.
- Net debt and hybrid bonds to EBITDA ratio
This alternative performance indicator corresponds to the ratio
of net debt and hybrid bonds to EBITDA. The indicator measures the
level of debt in relation to the Group's operating performance, and
provides a consistent basis for comparison with our peers.
- Earnings Before Interest Taxes Depreciation &
Amortization (EBITDA)
The IFRS item most similar to this alternative performance
indicator is operating income.
The indicator corresponds to operating income before taking into
account:
- recurring depreciation and amortization of property, plant and
equipment and intangible assets,
- other income and expenses, and
- depreciation and amortization related to the revaluation of
property, plant and equipment and intangible assets as part of the
allocation of the purchase price of businesses.
This indicator is used to assess the Group's operating
profitability and its ability to generate operating cash flow
before changes in working capital, capital expenditure and cash
flow from financing and tax expenses. It also facilitates
period-to-period comparisons by eliminating non-recurring items,
and provides a consistent basis for comparison with our peers.
This alternative performance indicator corresponds to free cash
flow excluding non-recurring or exceptional items, i.e.,
non-recurring cash flow and exceptional capital expenditure. The
indicator enables period-to-period comparisons by eliminating the
impact of exceptional or non-recurring items and portfolio
management, and provides a consistent basis for comparison with our
peers. It is used to assess the Group's ability to generate cash to
finance its shareholder returns, non-recurring or exceptional items
and acquisitions.
This alternative performance indicator corresponds to net cash
flow before taking into account net cash flow from portfolio
management operations. It enables period-to-period comparisons by
eliminating portfolio management, and provides a consistent basis
for comparison with our peers.
This alternative performance indicator corresponds to the sum of
two IFRS items, cash flow from operations and cash flow from net
investments. It provides an estimate of Group cash flow before
changes in cash flow from financing activities.
- Net cash flow from portfolio management operations
This alternative performance indicator corresponds to cash flows
from acquisitions and divestments as described in notes 3.2.2
“Acquisitions during the year” and 3.3 “Business divestments”.
This alternative performance indicator corresponds to cash flow
from other income and expenses, as described in note 6.1.5 “Other
income and expenses”.
This alternative performance indicator corresponds to free cash
flow before taking into account intangible assets and property,
plant and equipment additions, adjusted for non-recurring cash
flows. It is used to assess the Group's ability to generate cash to
finance its intangible assets and property, plant and equipment
additions, shareholder returns and acquisitions. It corresponds to
and replaces the "Operating cash flow" indicator defined at the
Capital Markets Day on 27 September 2023.
- Recurring capital expenditure
The IFRS item most similar to this alternative performance
indicator is intangible assets and property, plant and equipment
additions. Recurring capital expenditure includes all intangible
assets and property, plant and equipment additions, adjusted for
exceptional capital expenditure, investments linked to portfolio
management operations and investments with no impact on net debt
(financed by third parties). This indicator enables
period-to-period comparisons by eliminating exceptional items, and
provides a consistent basis for comparison with our peers.
- Exceptional capital expenditure
Alternative performance indicator corresponding to a very
limited number of capital expenditure items for major development
projects that the Group presents separately in its financial
communication due to their size and nature.
This alternative performance indicator corresponds to the
recurring operating income (REBIT) to sales ratio. It facilitates
period-to-period comparisons by eliminating non-recurring items,
and provides a consistent basis for comparison with our peers.
This alternative performance indicator corresponds to the EBITDA
to sales ratio. It facilitates period-to-period comparisons by
eliminating non-recurring items, and provides a consistent basis
for comparison with our peers. It is also one of the financial
performance criteria linked to performance share plans.
- Recurring operating income (REBIT)
The IFRS item most similar to this alternative performance
indicator is operating income. The indicator corresponds to
operating income before taking into account:
- depreciation and amortization related to the revaluation of
property, plant and equipment and intangible assets as part of the
allocation of the purchase price of businesses, and
- other income and expenses.
The indicator assesses the Group's operating profitability
before tax and excluding non-recurring items, whatever the
financing structure, since it does not take into account financial
result. It facilitates period-to-period comparisons by eliminating
non-recurring items, and provides a consistent basis for comparison
with our peers.
The IFRS item most similar to this alternative performance
indicator is net income – Group share. This indicator corresponds
to net income – Group share before non-recurring items. Exceptional
or non-recurring items correspond to:
- other income and expenses, net of applicable taxes,
- depreciation and amortization related to the revaluation of
property, plant and equipment and intangible assets as part of the
allocation of the purchase price of businesses, net of applicable
taxes, and
- one-time tax effects unrelated to other income and expenses and
relating to events that are exceptional in terms of frequency and
amount, such as the recognition or impairment of deferred tax
assets, or the impact of a change in tax rates on deferred
taxes.
This indicator enables us to assess the Group's profitability by
taking account of not only operating items, but also the Group's
financing structure and income taxes. It facilitates
period-to-period comparisons by eliminating non-recurring items,
and provides a consistent basis for comparison with our peers.
- Adjusted earnings per share
This alternative performance indicator is calculated by dividing
adjusted net income for the period by the weighted average number
of ordinary shares outstanding during the period.
- Diluted adjusted earnings per share
This alternative performance indicator corresponds to earnings
per share adjusted for the dilutive effect of all potential
ordinary shares. It is calculated by dividing adjusted net income
for the period by the weighted average number of potential ordinary
shares outstanding during the period.
- Return on capital employed (ROCE)
This alternative performance indicator corresponds to the ratio
of recurring operating income (REBIT) for the period to capital
employed at the end of the period. It is used to assess the
profitability of capital expenditure over time.
- Return on adjusted capital employed
This alternative performance indicator corresponds to the ratio
of recurring operating income (REBIT) for the period to the
adjusted capital employed at the end of the period. It is used to
assess the profitability of capital expenditure over time, by
adjusting items relating to capital employed acquired during the
period or in the course of disposal to bring them into line with
the items used in REBIT.
- EBITDA to cash conversion rate
This alternative performance indicator corresponds to the ratio
of recurring cash flow to EBITDA. The indicator is used to assess
the Group's ability to generate cash to finance, in particular,
returns to shareholders, exceptional capital expenditure and
acquisitions.
- EBITDA to operating cash conversion rate
This alternative performance indicator corresponds to the ratio
of operating cash flow to EBITDA. The indicator provides a
consistent basis for comparison between periods and with our peers,
whatever the growth strategy adopted, whether external growth
through acquisitions or internal growth through capital
expenditure. It is also one of the financial performance criteria
linked to performance share plans. It corresponds to and replaces
the "Operating cash conversion rate" indicator defined at the
Capital Markets Day on 27 September 2023.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250226348081/en/
Investor relations contacts Béatrice Zilm +33 (0)1 49 00
75 58 beatrice.zilm@arkema.com James Poutier +33 (0)1 49 00 73 12
james.poutier@arkema.com Alexis Noël +33 (0)1 49 00 74 37
alexis.noel@arkema.com Colombe Boiteux +33 (0)1 49 00 72 07
colombe.boiteux@arkema.com
Media contacts Gilles Galinier +33 (0)1 49 00 70 07
gilles.galinier@arkema.com Anne Plaisance +33 (0)6 81 87 48 77
anne.plaisance@arkema.com
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