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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Arkema | EU:AKE | Euronext | Ordinary Share |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 101.70 | 102.00 | 100.00 | 0.00 | 06:49:40 |
Regulatory News:
Arkema (Paris:AKE):
Supported by accelerating demand for innovative, high-performance materials, in an environment marked by strong inflation of raw materials and supply chain disruptions, Group EBITDA rose by a significant 54.4% year-on-year, and is well above the pre-Covid level of 2019. This performance reflects in particular the evolution in the Group's profile towards Specialty Materials and its unique positioning to provide technological solutions that address the major challenges linked to sustainable development.
Following Arkema’s Board of Directors' meeting, held on 9 November 2021 to review the Group’s consolidated financial information for the third quarter of 2021, Chairman and CEO Thierry Le Hénaff said:
“We can be proud of Arkema’s strong financial performance, achieved in a complex and demanding operating environment. I would like to particularly thank our teams, as these results reflect both their high quality work and their faultless level of commitment.
It is our whole sustainable growth strategy which really stands out. Our Specialty Materials are fully benefiting from their positioning on societal megatrends. We are seeing our developments accelerate structurally across many high-stake markets, such as batteries, 3D printing, eco-friendly paint, sports, home comfort and electronics.
Moreover, we are actively continuing the roll-out of our 2024 strategy and the refocusing of the Group toward Specialty Materials. Thus, by acquiring Ashland’s performance adhesives business, we will strengthen our Adhesive Solutions segment with this first-class activity, which through its technological know-how, will enable Bostik to accelerate its growth. The divestment of our epoxides business to Cargill is also in line with our pro-active management of the portfolio.
These positive developments make us truly confident about the future. In this fast-changing world, our cutting-edge innovation in high-performance materials for sustainable solutions, our current and prospective major industrial projects, and our bolt-on acquisition policy provide us with many growth opportunities.”
KEY FIGURES FOR THIRD-QUARTER 2021
in millions of eurosQ3'21
Q3'20
Change
Sales2,398
1,909
+25.6%
EBITDA474
307
+54.4%
Specialty Materials421
268
+57.1%
Intermediates74
55
+34.5%
Corporate-21
-16
EBITDA margin19.8%
16.1%
Specialty Materials20.1%
16.9%
Intermediates24.7%
17.5%
Recurring operating income (REBIT)343
171
+100.6%
REBIT margin14.3%
9.0%
Adjusted net income258
109
+136.7%
Adjusted net income per share (in €)3.44
1.42
+142.3%
Recurring cash flow236
311
-24.1%
Free cash flow74
285
-74.0%
Net debt including hybrid bonds1,255
1,869
€1,910m as of 31/12/2020THIRD-QUARTER 2021 BUSINESS PERFORMANCE
Sales rose 25.6% year-on-year to €2,398 million. At constant scope and currency, sales were up 29.1% compared to last year and 17.2% versus Q3’19. Despite shortages in an increasing number of raw materials, particularly in Adhesive Solutions, and certain logistics constraints in Asia and the United States, volumes rose by 5.3%, supported by accelerating demand for sustainable, high-performance materials used in applications relating to societal megatrends. Driven by the Group’s innovation and technological know-how, growth remained strong in the battery, consumer goods, electronics and transportation markets, although a slowdown was observed in the automotive sector. The oil & gas and paper markets remained lower year-on-year. The 23.8% positive price effect reflects the continuation of the Group’s active policy to pass on in its sales prices the significant inflation in raw materials, energy and logistics costs, tight market conditions in the acrylics chain, as well as mix improvement through the development of high value-added products. The scope effect was a negative 4.6%, as the divestment of PMMA was only partially offset by acquisitions in Adhesive Solutions and Advanced Materials. The currency effect was limited (+1.1%). In third-quarter 2021, Specialty Materials sales accounted for 87.5% of total Group sales (83% in Q3'20).
EBITDA was up sharply by almost 55% to €474 million, despite a negative scope effect of approximately €30 million and a complex operating environment. This very good performance, driven by the increase in volumes, particularly in High Performance Polymers and Coating Solutions, and by the improved product mix toward solutions with high technological content, is also a reflection of the Group’s positioning in structurally growing applications and markets. Supported by price increases in each segment in an environment of high inflation in raw materials, energy and transportation costs, and benefiting from a favorable context in acrylics, all segments grew significantly, also reflecting the diversity of the Group’s end markets and geographic exposure. Specialty Materials’ EBITDA came in at €421 million, up by a sharp 57.1% year-on-year and by 34.9% versus Q3’19.
In this context, the Group's EBITDA margin, up 370 bps to 19.8%, reached a record level for a third quarter.
At €343 million, recurring operating income (REBIT) doubled year-on-year. This figure includes recurring depreciation and amortization of €131 million, down €5 million compared to third-quarter 2020, primarily due to the scope effect. The REBIT margin improved significantly by 530 bps to reach 14.3%.
Adjusted net income rose very sharply to €258 million, representing €3.44 per share, versus €109 million in Q3'20. For the first nine months of the year, excluding exceptional items, the tax rate came in at 20% of recurring operating income.
CASH FLOW AND NET DEBT AT 30 SEPTEMBER 2021
In third-quarter 2021, Arkema reported recurring cash flow of €236 million (€311 million in third-quarter 2020). This figure includes an outflow of €103 million (inflow of €158 million in Q3’20), linked to the increase in working capital in a context marked by a strong inflation of raw materials prices and a progressive rebuilding of inventories relative to a particularly low level at the end of June. At end-September 2021, working capital remained tightly controlled and represented 12.3% of annualized sales (13.9% at end-September 2020 and 16.4% at end-September 2019), a ratio that is still below the normative level in a context of sustained demand and tightness in certain raw materials. Recurring cash flow also includes recurring capital expenditure of €111 million, virtually stable year-on-year (€105 million in Q3'20).
Free cash flow came in at €74 million (€285 million in Q3’20) and includes a non-recurring outflow of €98 million corresponding mainly to the payment of part of the capital gains tax linked to the divestment of PMMA. The free cash flow figure also includes the ramp-up of exceptional capital expenditure (€64 million versus €33 million in Q3'20), relating to the bio-based polyamides unit in Singapore and the hydrofluoric acid supply project with Nutrien in the United States.
At 30 September 2021, including hybrid bonds, net debt of €1.255 billion was stable versus 30 June 2021 (€1.28 billion) and the net debt (including hybrid bonds) to last-twelve-months EBITDA ratio stood at 0.8x.
THIRD-QUARTER 2021 PERFORMANCE BY SEGMENT
ADHESIVE SOLUTIONS (24% OF TOTAL GROUP SALES)
in millions of eurosQ3'21
Q3'20
Change
Sales568
516
+10.1%
EBITDA79
73
+8.2%
EBITDA margin13.9%
14.1%
Recurring operating income (REBIT)63
57
+10.5%
REBIT margin11.1%
11.0%
Sales of the Adhesive Solutions segment totaled €568 million, up 10.1% relative to third-quarter 2020. In a context of robust demand in the construction market and in high-performance industrial applications, volumes were impacted by difficulties to source raw materials and logistics constraints, particularly in the United States and in Asia. They fell 2.3% compared to the high comparison base of Q3’20, which was supported by a strong rebound in the construction market. Up 6.6%, the price effect reflected the Group’s actions to pass on the sustained inflation in raw materials. The 4.8% positive scope effect corresponds to the integration of Fixatti, Ideal Work, Poliplas and Edge Adhesives Texas, and the currency effect was a positive 1.0%.
At €79 million, EBITDA for the segment was up 8.2% relative to third-quarter 2020, and the EBITDA margin remained at a very high level of 13.9%, stable compared to the prior year (14.1% in Q3’20) despite the mechanical dilutive impact of price increases on this ratio. This robust performance integrates the benefits of pricing actions to offset increases in raw material prices, and also reflects operational excellence actions, the repositioning toward higher added-value applications, and the integration of bolt-on acquisitions. In this context, which is less favorable than expected, the Group is maintaining its 14% EBITDA margin target for the full year, representing an increase of almost 100 bps compared to last year.
ADVANCED MATERIALS (32.5% OF TOTAL GROUP SALES)
in millions of eurosQ3'21
Q3'20
Change
Sales781
603
+29.5%
EBITDA174
127
+37.0%
EBITDA margin22.3%
21.1%
Recurring operating income (REBIT)111
66
+68.2%
REBIT margin14.2%
10.9%
At €781 million, sales of the Advanced Materials segment were up a very significant 29.5% year-on-year. With volumes up 13.3%, the Advanced Materials segment continued to benefit from the strong increase in volumes of High Performance Polymers linked to major sustainable trends, notably in batteries, sports and bio-based consumer goods. Performance Additives recorded more moderate growth, impacted by health restrictions in Malaysia, and soft demand in the oil & gas and paper markets. The price effect was up by a sharp 14.6%, reflecting price increase initiatives in the context of raw materials inflation and an improved product mix toward high-performance applications. The 0.8% positive scope effect reflects the integration of Agiplast. The currency effect on the segment was a positive 0.8% over the quarter.
In this context of accelerating demand for sustainable, high-performance materials, EBITDA for the segment was up 37.0% year-on-year to €174 million, far exceeding the pre-Covid level of Q3’19 (€159 million). This figure reflects the strong dynamic of new business development in solutions for sustainable development, while the automotive (excluding batteries) and oil & gas markets were less supportive. The EBITDA margin reached the high level of 22.3% (21.1% in Q3’20 and 22.5% in Q3’19).
COATING SOLUTIONS (31% OF TOTAL GROUP SALES)
in millions of eurosQ3'21
Q3'20
Change
Sales742
469
+58.2%
EBITDA168
68
+147.1%
EBITDA margin22.6%
14.5%
Recurring operating income (REBIT)138
39
+253.8%
REBIT margin18.6%
8.3%
At €742 million, sales of the Coating Solutions segment were up sharply by 58.2% compared to last year. Despite the impact of the shortage of certain raw materials, volumes increased by 5.8%, driven by continued strong demand in decorative paints, industrial coatings, 3D printing, graphic arts and electronics. The positive 52.4% price effect is linked both to price actions implemented in downstream product lines to offset the strong inflation in raw materials, and relative tightness of the acrylics market. The currency effect was neutral on third-quarter 2021 sales.
With a very sharp rise in EBITDA to €168 million (€68 million in Q3’20 and €82 million in Q3’19), the Coating Solutions segment delivered another very good quarter. It benefited from accelerating demand for more environmentally friendly and higher added-value solutions, as well as from improved market conditions in the acrylics. In this favorable environment, the EBITDA margin remained at a very high level at 22.6% (14.5% in third-quarter 2020 and 15.4% in third-quarter 2019).
INTERMEDIATES (12.5% OF TOTAL GROUP SALES)
in millions of eurosQ3'21
Q3'20
Change
Sales300
315
-4.8%
EBITDA74
55
+34.5%
EBITDA margin24.7%
17.5%
Recurring operating income (REBIT)53
27
+96.3%
REBIT margin17.7%
8.6%
At €300 million, sales of the Intermediates segment decreased by 4.8% year-on-year. The divestment of the PMMA business, finalized in May 2021, resulted in a negative scope effect of 37.5%. The price effect for the quarter was significant (+27.6%), mainly reflecting more favorable market conditions for acrylics in Asia and an improvement in Fluorogases in the United States. Volumes in the segment grew by 1.6%, held back by the reduction in acrylics production toward the end of the quarter, following the Chinese authorities' measures aimed at limiting energy consumption. The currency effect was a positive 3.5%.
Intermediates EBITDA increased by 34.5% to €74 million, and the EBITDA margin came in at 24.7% compared to 17.5% in the prior-year period.
THIRD-QUARTER 2021 HIGHLIGHTS
In line with the Group’s ambition to become a pure Specialty Materials player by 2024, Arkema announced on 31 August 2021 the proposed acquisition of Ashland’s performance adhesives business, a first-class leader in high-performance adhesives in the United States. With sales of around US$ 360 million (3) and EBITDA at the very high level of around US$ 95 million (3) in 2021, Ashland offers a portfolio of high-performance adhesive solutions in high value-added industrial applications. The offer was made on the basis of a US$ 1,650 million enterprise value, or 15x estimated 2021 EBITDA (3) after taking into account the tax benefits linked to the structure of the transaction. The EV/EBITDA multiple is reduced to 8.7 by 2026 including pre-tax synergies, estimated at 12.5% of sales. This acquisition also allows Arkema to revise upwards the 2024 profitability target of the Adhesive Solutions segment, which now aims for an EBITDA margin above 17%, among the best in the industry, and sales exceeding €3 billion.
On 27 September 2021, Arkema also announced the proposed divestment of its epoxides business to Cargill, a leader in agricultural products and services, pursuing the repositioning of its portfolio on its core businesses.
Moreover, in September 2021, the Group received an ESG score of 67/100 from the V.E (Vigeo Eiris) rating agency, placing it in the top percentile of companies across all sectors, thereby recognizing its performance in Corporate Social Responsibility.
Finally, on 6 July 2021, Arkema announced that it had acquired a stake in Verkor, a French start-up specialized in the production of high-performance batteries. Arkema, a key player thanks to its cutting-edge materials and the innovative solutions that it provides in batteries, in particular for electric vehicles, is thus strengthening its development in batteries and clean mobility.
SUBSEQUENT EVENTS
In parallel with its major project to increase global capacity of bio-based polyamide 11 by 50% in Singapore, on 11 October 2021, Arkema announced the construction of a polyamide 11 powders plant on its Changshu platform in China, scheduled to come on stream in the first quarter of 2023. This investment will further support the growing demand for advanced bio-circular materials in Asia and is included in the €450 million exceptional capital expenditure envelope dedicated to polyamide expansion in Asia.
OUTLOOK FOR 2021
Activity in the fourth quarter of 2021 is expected to be in line with the previous few months. Operational performance will continue to be impacted by the unavailability and inflation of certain raw materials, logistical difficulties and rising energy and transportation costs. These factors will continue to guide the Group’s selling price policy. The automotive sector will also remain impacted by the shortage of electronic components, and energy restrictions in China could temporarily reduce demand in the region.
While remaining attentive to the evolution of the macro-economic context, Arkema will continue to greatly benefit from the repositioning of its portfolio towards Specialty Materials and from the very positive momentum driven by major sustainable trends, particularly in the fields of materials lightweighting, clean mobility, natural resource management, and living comfort and home efficiency.
Taking all of these elements into account, the Group is once again significantly raising its annual guidance. Arkema is now aiming for growth of at least 40% in Specialty Materials’ EBITDA in 2021 relative to 2020 at constant scope and currency (4), versus the 30% announced at the first-half 2021 financial results publication. Group EBITDA should therefore reach around €1.6 billion for the full year. In addition, the Group confirms its full year EBITDA margin target of 14% for the Adhesive Solutions segment, an increase of one percentage point compared to 2020, thus demonstrating the segment’s resilience in an exceptional context of strong raw materials inflation and shortages.
Finally, the Group will continue to implement its strategy in line with its ambition to become a pure sustainable and high-performance Specialty Materials player by 2024.
Further details concerning the Group’s third-quarter 2021 results are provided in the “Third-quarter 2021 results and outlook” presentation and the Factsheet, both available on Arkema’s website at: www.finance.arkema.com.
FINANCIAL CALENDAR
24 February 2022: publication of full-year 2021 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 the current context, where the Covid-19 pandemic persists across the world, and the evolution of the situation as well as the magnitude of its impacts on the global economy are highly 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, the pace at which cost-reduction projects are implemented, developments in the Covid-19 situation, 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 information at 30 September 2021 reviewed by Arkema’s Board of Directors on 9 November 2021. Quarterly financial information is not audited.
Information by segment is presented in accordance with Arkema’s internal reporting system used by management.
Details of the main alternative performance indicators used by the Group are provided in the tables appended to this press release. For the purpose of analyzing its results and defining its targets, the Group also uses EBITDA margin, which corresponds to EBITDA expressed as a percentage of sales, EBITDA equaling recurring operating income (REBIT) plus recurring depreciation and amortization of tangible and intangible assets, as well as REBIT margin, which corresponds to recurring operating income (REBIT) expressed as a percentage of sales.
For the purpose of tracking changes in its results, and particularly its sales figures, the Group analyzes the following effects (unaudited analyses):
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 in 2024 a pure player in Specialty Materials, the Group is structured into 3 complementary, resilient and highly innovative segments dedicated to Specialty Materials–Adhesive solutions, Advanced Materials, and Coating Solutions–accounting for some 82% of Group sales in 2020, 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 €8 billion in 2020, and operates in some 55 countries with 20,600 employees worldwide.
A French société anonyme (limited company) with share capital of €767,364,760 – Registered in Nanterre: RCS 445 074 685 Nanterre
Follow us on: Twitter: Twitter.com/Arkema_group LinkedIn: Linkedin.com/company/arkema
___________________ (1) Recurring cash flow corresponds to free cash flow before exceptional items. It excludes non-recurring items and exceptional capital expenditure (2) With the assumption of a €/$ exchange rate of 1.2 for 2021, the impact on 2020 EBITDA is estimated at a negative €30 million for Specialty Materials and a negative €10 million for Intermediates (3) Including pro forma adjustments (4) With the assumption of a €/$ exchange rate of 1.2 for 2021, the impact on 2020 EBITDA is estimated at a negative €30 million for Specialty Materials and a negative €10 million for Intermediates
ARKEMA financial statements
Consolidated financial information - At the end of September 2021
CONSOLIDATED INCOME STATEMENT3rd quarter 2021
3rd quarter 2020
(In millions of euros) Sales2,398
1,909
Operating expenses(1,826)
(1,518)
Research and development expenses(59)
(57)
Selling and administrative expenses(187)
(177)
Other income and expenses1
(9)
Operating income327
148
Equity in income of affiliates(1)
0
Financial result(15)
(23)
Income taxes(64)
(32)
Net income247
93
Attributable to non-controlling interests0
1
Net income - Group share247
92
Earnings per share (amount in euros)3.19
1.02
Diluted earnings per share (amount in euros)3.16
1.02
End of September 2021
End of September 2020
(In millions of euros) Sales7,019
5,899
Operating expenses(5,407)
(4,729)
Research and development expenses(178)
(177)
Selling and administrative expenses(574)
(561)
Other income and expenses709
84
Operating income1,569
516
Equity in income of affiliates0
(1)
Financial result(43)
(68)
Income taxes(327)
(156)
Net income1,199
291
Attributable to non-controlling interests2
2
Net income - Group share1,197
289
Earnings per share (amount in euros)15.57
3.60
Diluted earnings per share (amount in euros)15.47
3.59
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME3rd quarter 2021
3rd quarter 2020
(In millions of euros) Net income247
93
Hedging adjustments6
17
Other items-
-
Deferred taxes on hedging adjustments and other items(1)
(3)
Change in translation adjustments82
(92)
Other recyclable comprehensive income87
(78)
Impact of remeasuring unconsolidated investments(1)
-
Actuarial gains and losses(5)
(12)
Deferred taxes on actuarial gains and losses0
2
Other non-recyclable comprehensive income(6)
(10)
Total income and expenses recognized directly in equity81
(88)
Total comprehensive income328
5
Attributable to non-controlling interest1
0
Total comprehensive income - Group share327
5
End of September 2021
End of September 2020
(In millions of euros) Net income1,199
291
Hedging adjustments(19)
25
Other items-
-
Deferred taxes on hedging adjustments and other items(1)
(3)
Change in translation adjustments174
(128)
Other recyclable comprehensive income154
(106)
Impact of remeasuring unconsolidated investments(3)
-
Actuarial gains and losses62
(50)
Deferred taxes on actuarial gains and losses(14)
12
Other non-recyclable comprehensive income45
(38)
Total income and expenses recognized directly in equity199
(144)
Total comprehensive income1,398
147
Attributable to non-controlling interest4
1
Total comprehensive income - Group share1,394
146
INFORMATION BY SEGMENT 3rd quarter 2021 (In millions of euros)Adhesive Solutions
Advanced Materials
Coating Solutions
Intermediates
Corporate
Total
Sales568
781
742
300
7
2,398
EBITDA79
174
168
74
(21)
474
Recurring depreciation and amortization of property, plant and equipment and intangible assets(16)
(63)
(30)
(21)
(1)
(131)
Recurring operating income (REBIT)63
111
138
53
(22)
343
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(12)
(4)
(1)
-
-
(17)
Other income and expenses(5)
(1)
0
4
3
1
Operating income46
106
137
57
(19)
327
Equity in income of affiliates-
0
-
(1)
-
(1)
Intangible assets and property, plant, and equipment additions15
108
22
26
5
176
Of which: recurring capital expenditure15
56
21
14
5
111
3rd quarter 2020 (In millions of euros)Adhesive Solutions
Advanced Materials
Coating Solutions
Intermediates
Corporate
Total
Sales516
603
469
315
6
1,909
EBITDA73
127
68
55
(16)
307
Recurring depreciation and amortization of property, plant and equipment and intangible assets(16)
(61)
(29)
(28)
(2)
(136)
Recurring operating income (REBIT)57
66
39
27
(18)
171
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(8)
(4)
(2)
-
-
(14)
Other income and expenses(7)
(2)
-
(1)
1
(9)
Operating income42
60
37
26
(17)
148
Equity in income of affiliates-
1
-
(1)
-
0
Intangible assets and property, plant, and equipment additions18
64
19
34
4
139
Of which: recurring capital expenditure18
47
18
18
4
105
INFORMATION BY SEGMENT End of September 2021 (In millions of euros)Adhesive Solutions
Advanced Materials
Coating Solutions
Intermediates
Corporate
Total
Sales1,698
2,213
2,021
1,066
21
7,019
EBITDA247
494
403
236
(70)
1,310
Recurring depreciation and amortization of property, plant and equipment and intangible assets(48)
(186)
(88)
(72)
(5)
(399)
Recurring operating income (REBIT)199
308
315
164
(75)
911
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(36)
(11)
(4)
-
-
(51)
Other income and expenses(34)
(115)
(13)
880
(9)
709
Operating income129
182
298
1,044
(84)
1,569
Equity in income of affiliates-
1
-
(1)
-
0
Intangible assets and property, plant, and equipment additions43
267
47
92
12
461
Of which: recurring capital expenditure43
141
43
37
12
276
End of September 2020 (In millions of euros)Adhesive Solutions
Advanced Materials
Coating Solutions
Intermediates
Corporate
Total
Sales1,484
1,883
1,422
1,091
19
5,899
EBITDA192
373
192
189
(53)
893
Recurring depreciation and amortization of property, plant and equipment and intangible assets(46)
(185)
(89)
(92)
(6)
(418)
Recurring operating income (REBIT)146
188
103
97
(59)
475
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(26)
(12)
(5)
-
-
(43)
Other income and expenses(36)
(20)
(3)
183
(40)
84
Operating income84
156
95
280
(99)
516
Equity in income of affiliates-
(1)
-
0
-
(1)
Intangible assets and property, plant, and equipment additions52
147
48
96
11
354
Of which: recurring capital expenditure52
102
46
51
11
262
CONSOLIDATED CASH FLOW STATEMENTEnd of September 2021
End of September 2020
(In millions of euros) Operating cash flows Net income1,199
291
Depreciation, amortization and impairment of assets571
576
Other provisions and deferred taxes34
42
(Gains)/losses on sales of long-term assets(960)
(247)
Undistributed affiliate equity earnings0
1
Change in working capital(248)
133
Other changes11
21
Cash flow from operating activities607
817
Investing cash flows Intangible assets and property, plant, and equipment additions(461)
(354)
Change in fixed asset payables(14)
(54)
Acquisitions of operations, net of cash acquired(41)
(94)
Increase in long-term loans(20)
(26)
Total expenditures(536)
(528)
Proceeds from sale of operations, net of cash transferred12
3
Variation des créances sur cession d'immobilisations0
-
Proceeds from sale of intangible assets and property, plant, and equipment1,122
327
Proceeds from sale of unconsolidated investments8
-
Repayment of long-term loans44
58
Total divestitures1,186
388
CASH FLOW FROM INVESTING ACTIVITIES650
(140)
Financing cash flows Issuance (repayment) of shares and paid-in surplus-
7
Purchase of treasury shares(240)
(21)
Issuance of hybrid bonds-
299
Rachat d'obligations hybrides-
-
Dividends paid to parent company shareholders(191)
(168)
Interest paid to bearers of subordinated perpetual notes(15)
(14)
Dividends paid to non-controlling interests(2)
(2)
Increase in long-term debt7
3
Decrease in long-term debt(46)
(58)
Increase / (Decrease) in short-term debt(57)
(531)
CASH FLOW FROM FINANCING ACTIVITIES(544)
(485)
Net increase/(decrease) in cash and cash equivalents713
192
Effect of exchange rates and changes in scope(14)
48
Cash and cash equivalents at beginning of period1,587
1,407
CASH AND CASH EQUIVALENTS AT END OF PERIOD2,286
1,647
CONSOLIDATED BALANCE SHEET30 September 2021
31 December 2020
(In millions of euros) ASSETS Goodwill1,911
1,933
Intangible assets, net1,500
1,433
Property, plant and equipment, net2,906
2,828
Equity affiliates: investments and loans29
29
Other investments55
57
Deferred tax assets150
159
Other non-current assets196
209
TOTAL NON-CURRENT ASSETS6,747
6,648
Inventories1,254
881
Accounts receivable1,394
1,131
Other receivables and prepaid expenses177
163
Income tax receivables67
70
Other current financial assets67
40
Cash and cash equivalents2,286
1,587
Assets held for sale4
191
TOTAL CURRENT ASSETS5,249
4,063
TOTAL ASSETS11,996
10,711
LIABILITIES AND SHAREHOLDERS' EQUITY Share capital767
767
Paid-in surplus and retained earnings5,395
4,458
Treasury shares(245)
(6)
Translation adjustments140
(32)
SHAREHOLDERS' EQUITY - GROUP SHARE6,057
5,187
Non-controlling interests52
48
TOTAL SHAREHOLDERS' EQUITY6,109
5,235
Deferred tax liabilities347
320
Provisions for pensions and other employee benefits514
530
Other provisions and non-current liabilities406
383
Non-current debt2,673
2,663
TOTAL NON-CURRENT LIABILITIES3,940
3,896
Accounts payable1,097
987
Other creditors and accrued liabilities439
339
Income tax payables191
69
Other current financial liabilities52
15
Current debt168
134
Liabilities related to assets held for sale-
36
TOTAL CURRENT LIABILITIES1,947
1,580
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY11,996
10,711
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY Shares issued Treasury shares Shareholders'equity - Groupshare Non-controllinginterests Shareholders'equity (In millions of euros) Number Amount Paid-insurplus Hybridbonds Retainedearnings Translationadjustments Number Amount At 1 January 202176,736,476
767
1,272
700
2,486
(32)
(59,756)
(6)
5,187
48
5,235
Cash dividend-
-
-
-
(206)
-
-
-
(206)
(2)
(208)
Issuance of share capital-
-
-
-
-
-
-
-
-
-
-
Purchase of treasury shares-
-
-
-
-
-
(2,277,309)
(240)
(240)
-
(240)
Annulation d'actions propres-
-
-
-
-
-
-
-
-
-
-
Grants of treasury shares to employees-
-
-
-
(1)
-
14,722
1
-
-
-
Cessions d'actions propres-
-
-
-
-
-
-
-
-
-
-
Share-based payments-
-
-
-
13
-
-
-
13
-
13
Issuance of hybrid bonds-
-
-
-
-
-
-
-
-
-
-
Redemption of hybrid bonds-
-
-
-
-
-
-
-
-
-
-
Other-
-
-
-
(91)
-
-
-
(91)
2
(89)
Transactions with shareholders-
-
-
-
(285)
-
(2,262,587)
(239)
(524)
-
(524)
Net income-
-
-
-
1,197
-
-
-
1,197
2
1,199
Total income and expense recognized directly through equity-
-
-
-
25
172
-
-
197
2
199
Comprehensive income-
-
-
-
1,222
172
-
-
1,394
4
1,398
At 30 September 202176,736,476
767
1,272
700
3,423
140
(2,322,343)
(245)
6,057
52
6,109
ALTERNATIVE PERFORMANCE INDICATORS
To monitor and analyse the financial performance of the Group and its activities, the Group management uses alternative performance indicators. These are financial indicators that are not defined by the IFRS. This note presents a reconciliation of these indicators and the aggregates from the consolidated financial statements under IFRS.
RECURRING OPERATING INCOME (REBIT) AND EBITDA (In millions of euros)End of September 2021
End of September 2020
3rd quarter 2021
3rd quarter 2020
OPERATING INCOME1,569
516
327
148
- Depreciation and amortization related to the revaluation of tangible and intangible assets as part of the allocation of the purchase price of businesses(51)
(43)
(17)
(14)
- Other income and expenses709
84
1
(9)
RECURRING OPERATING INCOME (REBIT)911
475
343
171
- Recurring depreciation and amortization of tangible and intangible assets(399)
(418)
(131)
(136)
EBITDA1,310
893
474
307
Details of depreciation and amortization of tangible and intangible assets: (In millions of euros)End of September 2021
End of September 2020
3rd quarter 2021
3rd quarter 2020
Depreciation and amortization of tangible and intangible assets(571)
(576)
(150)
(154)
Of which: Recurring depreciation and amortization of tangible and intangible assets(399)
(418)
(131)
(136)
Of which: Depreciation and amortization related to the revaluation of assets as part of the allocation of the purchase price of businesses(51)
(43)
(17)
(14)
Of which: Impairment included in other income and expenses(121)
(115)
(2)
(4)
ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE (In millions of euros)End of September 2021
End of September 2020
3rd quarter 2021
3rd quarter 2020
NET INCOME - GROUP SHARE1,197
289
247
92
- Depreciation and amortization related to the revaluation of tangible and intangible assets as part of the allocation of the purchase price of businesses(51)
(43)
(17)
(14)
- Other income and expenses709
84
1
(9)
- Other income and expenses - Non-controlling interests-
-
-
-
- Taxes on depreciation and amortization related to the revaluation of assets as part of the allocation of the purchase price of businesses12
10
4
3
- Taxes on other income and expenses(162)
(61)
(4)
3
- One-time tax effects5
-
5
-
ADJUSTED NET INCOME684
299
258
109
- Weighted average number of ordinary shares75,865,209
76,424,364
- Weighted average number of potential ordinary shares76,316,982
76,690,590
ADJUSTED EARNINGS PER SHARE (€)9.02
3.91
3.44
1.42
DILUTED ADJUSTED EARNINGS PER SHARE (€)8.96
3.90
3.41
1.42
RECURRING CAPITAL EXPENDITURE (In millions of euros)End of September 2021
End of September 2020
3rd quarter 2021
3rd quarter 2020
INTANGIBLE ASSETS AND PROPERTY, PLANT, AND EQUIPMENT ADDITIONS461
354
176
139
- Exceptional capital expenditure181
90
64
33
- Investments relating to portfolio management operations-
-
-
-
- Capital expenditure with no impact on net debt4
2
1
1
RECURRING CAPITAL EXPENDITURE276
262
111
105
FREE CASH FLOW (In millions of euros)End of September 2021
End of September 2020
3rd quarter 2021
3rd quarter 2020
Cash flow from operating activities607
817
174
401
+ Cash flow from investing activities650
(140)
(110)
(121)
NET CASH FLOW1,257
677
64
280
- Net cash flow from portfolio management operations886
142
(10)
(5)
FREE CASH FLOW371
535
74
285
- Non-recurring cash flow including exceptional capital expenditure(163)
(47)
(162)
(26)
RECURRING CASH FLOW534
582
236
311
The net cash flow from portfolio management operations corresponds to the impact of acquisition and divestment operations. NET DEBT (In millions of euros)End of September 2021
End of December 2020
Non-current debt2,673
2,663
+ Current debt168
134
- Cash and cash equivalents2,286
1,587
NET DEBT555
1,210
+ Hybrid bonds700
700
NET DEBT AND HYBRID BONDS1,255
1,910
WORKING CAPITAL (In millions of euros)End of September 2021
End of December 2020
Inventories1,254
881
+ Accounts receivable1,394
1,131
+ Other receivables including income taxes244
233
+ Other current financial assets67
40
- Accounts payable1,097
987
- Other liabilities including income taxes630
408
- Other current financial liabilities52
15
WORKING CAPITAL1,180
875
CAPITAL EMPLOYED (In millions of euros)End of September 2021
End of December 2020
Goodwill, net1,911
1,933
+ Intangible assets (excluding goodwill), and property, plant and equipment, net4,406
4,261
+ Investments in equity affiliates29
29
+ Other investments and other non-current assets251
266
+ Working capital1,180
875
CAPITAL EMPLOYED7,777
7,364
View source version on businesswire.com: https://www.businesswire.com/news/home/20211109006622/en/
Investor relations Béatrice Zilm +33 (0)1 49 00 75 58 beatrice.zilm@arkema.com Peter Farren +33 (0)1 49 00 73 12 peter.farren@arkema.com Mathieu Briatta +33 (0)1 49 00 72 07 mathieu.briatta@arkema.com Caroline Chung +33 (0)1 49 00 74 37 caroline.chung@arkema.com
Media Gilles Galinier +33 (0)1 49 00 70 07 gilles.galinier@arkema.com Véronique Obrecht +33 (0)1 49 00 88 41 veronique.obrecht@arkema.com
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