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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Alikem Limited | TSX:AKE | Toronto | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 8.86 | 7.50 | 7.50 | 0 | 01:00:00 |
Regulatory News:
Arkema (Paris:AKE):
The Group delivered a solid financial performance in 2023 in a demanding macroeconomic environment, with €1.5 billion in EBITDA, in line with its full-year guidance, and excellent cash generation. Arkema expects EBITDA to grow in 2024, mainly weighted to the second half of the year with the ramp-up of its major projects and a gradual improvement in market conditions.
Following Arkema’s Board of Directors’ meeting held on 28 February 2024 to approve the Group’s consolidated financial statements for 2023, Chairman and CEO Thierry Le Hénaff said:
“Arkema recorded a solid financial performance in 2023 in a particularly demanding macroeconomic context. I would like to thank our teams, who once again demonstrated their agility and unwavering commitment, enabling Arkema to deliver some important achievements in 2023, notably in terms of cash generation, CSR performance and the strengthening of the Group’s profile in Specialty Materials.
As 2024 has started in the continuity of the previous quarter, in a context of ongoing weak demand, we will continue to manage our operations tightly. We will benefit from the growing contribution, from spring onwards, of several major industrial projects in Asia and the United States, as well as from the integration of PI Advanced Materials’ activities.
In addition to managing the short-term, our teams are fully mobilized on our 2028 objectives which we unveiled at the Capital Markets Day last September.”
KEY FIGURES FOR 2023
in millions of euros2023
2022
Change Sales9,514
11,550
-17.6%
EBITDA1,501
2,110
-28.9%
Specialty Materials1,373
1,900
-27.7%
Intermediates213
306
-30.4%
Corporate-85
-96
EBITDA margin15.8%
18.3%
Specialty Materials15.8%
18.1%
Intermediates26.7%
30.0%
Recurring operating income (REBIT)939
1,560
-39.8%
REBIT margin9.9%
13.5%
Adjusted net income653
1,167
-44.0%
Adjusted net income per share (in €)8.75
15.75
-44.4%
Recurring cash flow761
933
-18.4%
Free cash flow625
784
-20.3%
Net debt including hybrid bonds2,930
2,366
2023 BUSINESS PERFORMANCE
Group sales came in at €9,514 million in 2023, down 17.6% on the previous year in a more challenging macroeconomic context, marked by lower underlying demand and destocking, first in Europe and then spreading to other regions of the world. The decline in volumes came in at 10% overall, affecting most of the Group’s important end markets like construction, industry and consumer goods. Some markets such as automotive and energy resisted much better, and the dynamic remained positive in high performance solutions addressing sustainable megatrends, particularly in new energies, bio-based and recycled products, as well as in the areas of energy efficiency and lightweighting. The negative 6.1% price effect reflects the decline of certain raw materials and the normalization of PVDF and upstream acrylics relative to the particularly favorable conditions of 2022. Moreover, Arkema benefited from the repositioning of its portfolio towards higher value-added solutions. The scope effect was small, standing at a positive 0.7%, and included mainly two months’ additional contribution from Ashland’s adhesives business and three small acquisitions, partially offset by the divestment of Febex at the beginning of the year. The currency effect was a negative 2.2%, mainly as a result of the depreciation of the US dollar and Chinese yuan against the euro.
The share of Specialty Materials within total sales grew slightly and represented 92% of the Group’s sales in 2023. Moreover, the geographic sales split saw the share of North America increase (37% of the Group’s sales in 2023 versus 35% in 2022), Asia and the rest of the world decline to 29% versus 32% in 2022, and Europe remain steady (34% of sales in 2023 versus 33% in 2022).
At €1,501 million (€2,110 million in 2022), EBITDA held up well in view of the economic context, while reflecting the absence of the exceptional contribution in the prior year of around €400 million from PVDF and upstream acrylics. The dynamics were mixed between the various product lines, with Adhesive Solutions and Performance Additives reporting good growth in the second half of the year, driven by the product mix, dynamic management of sales prices and continued operational excellence actions. In this less buoyant context than in the prior year, Arkema’s EBITDA margin came in at a good level at 15.8% (18.3% in 2022), reflecting notably the quality of the product mix in higher value-added solutions and appropriate management of pricing in a more normalized raw materials context.
At €562 million, recurring depreciation and amortization rose marginally year-on-year (€550 million in 2022). Recurring operating income (REBIT) therefore amounted to €939 million (€1,560 million in 2022) and REBIT margin came in at 9.9% (13.5% in 2022).
The financial result represented a net expense of €70 million (€61 million in 2022), up by €9 million relative to 2022, reflecting mainly the impact of the bond issues carried out in 2023.
Excluding exceptional items, the tax rate amounted to 21% of recurring operating income in 2023.
Adjusted net income thus amounted to €653 million, representing €8.75 per share (€15.75 per share in 2022).
The Board of Directors decided that it would recommend, at the annual general meeting of 15 May 2024, a 3% increase in the dividend at €3.50 per share for 2023, in line with the policy of a gradual increase and representing a payout ratio of 40%. The dividend will be paid entirely in cash as from 21 May 2024, with an ex-dividend date on 17 May 2024.
CASH FLOW AND NET DEBT AT 31 DECEMBER 2023
Recurring cash flow reached the high level of €761 million (€933 million in 2022). It includes a €170 million cash inflow linked to working capital, which reflects the price effect and strict management of inventories. Excluding PI Advanced Materials, working capital thus represented 13.1% of the Group’s annual sales at 31 December 2023 (12.6% at 31 December 2022). Recurring capital expenditure amounted to €608 million (€584 million in 2022) and represented 6.4% of Group sales in 2023. Calculated based on recurring cash flow, the EBITDA to cash conversion rate was 50.7%, exceeding the target of 40%.
Free cash flow totaled €625 million in the year (€784 million in 2022) and included residual exceptional capital expenditure of €26 million (€123 million in 2022) related to the bio-based polyamides project in Singapore and the hydrofluoric acid supply project with Nutrien in the United States. Thus, for full-year 2023, recurring and exceptional capital expenditure reached €634 million. Free cash flow also included a non-recurring outflow of €110 million in 2023, mainly corresponding to start-up costs for the Singapore platform and restructuring costs in order to adapt the cost structure to the economic context.
Net cash flow from portfolio management operations primarily reflected the acquisition of a 54% majority stake in PI Advanced Materials and amounted to a net outflow of €708 million in 2023.
Net debt including hybrid bonds stood at €2,930 million at end-2023, including the payment of a €3.40 dividend per share for 2022 for a total payout of €253 million, the €32 million cost of share buybacks carried out by the Group, and €16 million in interest paid on hybrid bonds. This net debt figure represents 1.95x last-twelve-months EBITDA.
CONTINUOUS PROGRESS IN CSR PERFORMANCE
The Group continued to implement its CSR actions in 2023 to support the sustainable and responsible growth of its activities and by offering its customers solutions that contribute to their sustainable performance.
Arkema thus reduced its Scope 1 and 2 greenhouse gas emissions by 7% in 2023 compared with 2022 (-39% vs 2019) and by 9% for Scope 3 (-53% vs 2019). These results reflect the ongoing proactive initiatives taken by Arkema as part of the roll-out of its climate plan, accentuated by the temporary decrease in production volumes, in line with its 1.5°C trajectory by 2030 validated by the SBTi. In addition, on 26 February 2024, Arkema announced that it had signed long-term renewable energy supply contracts in the United States for the Calvert City, Beaumont, Chatham and West Chester sites, as well as for all Bostik sites, allowing it, with existing contracts for the Clear Lake and Bayport sites, to cover 40% of the electricity needs for the Group's operations in the United States by the end of 2024.
Moreover, in order to encourage eco-design and develop the circular economy, the Group increased the proportion of its sales covered by a life-cycle assessment to 56% of Group sales in 2023 (41% in 2022), in line with its long-term target of 90%.
The Group also maintained its high safety standards, with an accident rate per million hours worked stable at 0.9, among the leaders of the industry, and the process safety event rate per million hours worked also stable at 2.8.
Lastly, as a certified Top Employer 2024 in ten countries and a holder of the Top Employer Europe certification, Arkema continued to promote inclusion and diversity, as illustrated notably by the percentage of women in senior management and executive positions reaching 29% at end-2023.
On the strength of the Group’s results and long-term commitments, its CDP climate change score was raised to A-. Its Sustainalytics score was also increased and the Group now ranks among the best in its sector. In addition, Arkema was once again included in S&P’s Global Sustainability Yearbook.
2023 PERFORMANCE BY SEGMENT
ADHESIVE SOLUTIONS (29% OF TOTAL GROUP SALES)
in millions of euros2023
2022
Change Sales2,714
2,898
-6.3%
EBITDA380
366
+3.8% EBITDA margin14.0%
12.6%
Recurring operating income (REBIT)293
288
+1.7% REBIT margin10.8%
9.9%
Sales in the Adhesive Solutions segment fell by 6.3% compared with 2022 to €2,714 million. This figure reflects mainly a 7.5% reduction in volumes linked to weak demand, as well as to destocking in the construction sector and certain industrial markets, which nevertheless subsided in the second half of the year. Sales also included a negative 2.8% currency effect. The price effect was slightly positive over the year, amounting to 0.9% and reflected on the one hand, during the first part of the year, the increased sales prices implemented in 2022 in response to cost inflation, and on the other hand, a negative price effect in the second half linked to the normalization of certain raw materials. The 3.1% positive scope effect corresponds to the integration of Polytec PT and Permoseal, as well as to the additional contribution from Ashland’s adhesives business in the first two months of the year.
Recording robust growth of 16% in the second half of the year, EBITDA grew 3.8% in 2023 compared with 2022 and reached €380 million. This higher year-on-year performance despite lower volumes reflects the dynamic management of sales prices in an evolving environment of raw materials, as well as operational excellence and cost control actions. It also incorporates the contribution of acquisitions. EBITDA margin improved significantly by 140 bps to 14.0%, also benefiting from the evolution in the product mix towards higher value-added applications.
ADVANCED MATERIALS (38% OF TOTAL GROUP SALES)
in millions of euros2023
2022
Change Sales3,562
4,341
-17.9%
EBITDA666
941
-29.2%
EBITDA margin18.7%
21.7%
Recurring operating income (REBIT)366
663
-44.8%
REBIT margin10.3%
15.3%
At €3,562 million, sales of the Advanced Materials segment were down 17.9% year-on-year. Reflecting lower demand, volumes declined by 8.0%, also impacted by destocking, mostly in the first half for High Performance Polymers, and throughout the whole year for Performance Additives, mainly in Europe. The business areas linked to sustainable megatrends grew, notably new energies and bio-based and recycled products, and the automotive and energy markets remained well oriented. In the second half of the year, High Performance Polymers volumes were up relative to the prior year, supported in particular by higher demand in batteries in China. The price effect was a negative 7.2%, essentially reflecting the normalization of PVDF in batteries following the significant tightness observed in the prior year. For the segment’s other activities, the price effect was broadly positive, demonstrating the strength of their positioning and an improved product mix towards higher value-added solutions. The scope effect was a negative 0.6%, corresponding to the divestment of Febex, and the currency effect was a negative 2.1%.
In this context, EBITDA of €666 million was down 29.2% relative to the prior year’s particularly high comparison base. Driven by significant growth in the second half, EBITDA for Performance Additives was up year-on-year despite lower volumes, supported by growth in high value-added applications in areas linked to sustainable megatrends, in particular new energies. The segment’s EBITDA margin thus came to 18.7% versus 21.7% in 2022.
COATING SOLUTIONS (25% OF TOTAL GROUP SALES)
in millions of euros2023
2022
Change Sales2,402
3,250
-26.1%
EBITDA327
593
-44.9%
EBITDA margin13.6%
18.2%
Recurring operating income (REBIT)201
466
-56.9%
REBIT margin8.4%
14.3%
Sales of the Coating Solutions segment fell sharply by 26.1% year-on-year and amounted to €2,402 million, around 30% of which were in acrylic monomers. Volumes in this segment were down 12.4% overall, reflecting subdued demand and destocking in Europe and the United States in the decorative paints and industrial markets. The price effect of negative 13.1% reflects mainly the progressive normalization of market conditions in upstream acrylics after an exceptional 2022, as well as the pass-through of certain lower raw materials prices in downstream product lines. The scope effect of positive 0.7% is linked to the integration of Polimeros Especiales, and the currency effect was limited at a negative 1.3%.
In this context, EBITDA declined 44.9% on 2022 to €327 million. Downstream activities nevertheless held up better than upstream acrylics, driven by the benefits of an improved product mix towards higher value-added solutions and by dynamic price management. In this context of low volumes, EBITDA margin held up relatively well at 13.6% (18.2% in 2022).
INTERMEDIATES (8% OF TOTAL GROUP SALES)
in millions of euros2023
2022
Change Sales797
1,020
-21.9%
EBITDA213
306
-30.4%
EBITDA margin26.7%
30.0%
Recurring operating income (REBIT)170
245
-30.6%
REBIT margin21.3%
24.0%
At €797 million, sales in the Intermediates segment fell by 21.9% year-on-year, impacted by an 18.7% drop in volumes linked notably to low demand for acrylics in Asia. The price effect was a positive 0.1%, reflecting good momentum for refrigerant gases in Europe and the United States, which offset less favorable market conditions for acrylics in Asia. The currency effect was a negative 3.3%.
In this context, EBITDA declined by 30.4% to €213 million and EBITDA margin remained at a high level of 26.7% (30.0% in 2022).
KEY FIGURES FOR FOURTH-QUARTER 2023
in millions of euros Q4'23 Q4'22 Change Sales2,222
2,507
-11.4%
EBITDA331
291
+13.7% Specialty Materials312
286
+9.1% Adhesive Solutions94
75
+25.3% Advanced Materials149
148
+0.7% Coating Solutions69
63
+9.5% Intermediates40
24
+66.7% Corporate-21
-19
EBITDA margin14.9%
11.6%
Specialty Materials15.2%
12.3%
Adhesive Solutions14.6%
10.8%
Advanced Materials17.4%
14.5%
Coating Solutions12.5%
10.4%
Intermediates24.8%
13.3%
Recurring operating income (REBIT)174
146
+19.2% REBIT margin7.8%
5.8%
Adjusted net income107
88
+21.6% Adjusted net income per share (in €)1.43
1.16
+23.3% Recurring cash flow325
238
+36.6% Free cash flow283
199
+42.2%Group sales declined 11.4% year-on-year to €2,222 million, impacted by a negative 10.5% price effect which reflected mainly a raw materials environment that was less tight. Volumes were up 2.0%, driven mainly by an improvement in Coating Solutions relative to the low comparison base of fourth-quarter 2022, and by the good performance of High Performance Polymers in Asia. The scope effect of positive 0.3% reflects the integration of Polytec PT in Adhesive Solutions and PI Advanced Materials in Advanced Materials in December, partially offset by the divestment of Febex. The currency effect of negative 3.2% was linked mainly to the appreciation of the euro against the US dollar.
At €331 million, EBITDA was 13.7% higher relative to fourth-quarter 2022, driven by the growth of Adhesive Solutions, the resilience of the other Specialty Materials segments and the good performance of refrigerant gases. EBITDA margin improved by 330 bps to 14.9%.
Sales of the Adhesive Solutions segment totaled €642 million, down 7.2% compared with fourth-quarter 2022, impacted notably by a 3.2% negative currency effect. The negative 3.2% price effect reflects essentially the evolution of certain raw materials. Volumes were down slightly by 1.3%, reflecting ongoing soft demand and some residual destocking in Europe and the United States. The scope effect was a positive 0.5%, corresponding to the integration of Polytec PT.
At €94 million, the segment’s EBITDA was up by a sharp 25.3% compared with fourth-quarter 2022, driven by the product mix, dynamic price management and ongoing operational excellence actions. EBITDA margin thus improved significantly to 14.6% (10.8% in Q4’22), reflecting Bostik’s teams’ thorough work.
Sales of the Advanced Materials segment came in at €857 million, down 16.1% compared with fourth-quarter 2022, impacted by a 15.9% negative price effect which takes into account the evolution of raw materials. Volumes rose 2.3%, driven in particular by High Performance Polymers in Asia. Performance Additives volumes were down slightly as a result of weak demand in Europe, overshadowing the good performance of the United States. The scope effect was a positive 0.5%, corresponding to the contribution of PI Advanced Materials in December, partly offset by the divestment of Febex. The currency effect was a negative 3.0%. The segment’s EBITDA was stable at €149 million (€148 million in Q4’22), and EBITDA margin improved by 290 bps to 17.4%, benefiting also from a favorable product mix linked to stronger demand for higher value-added solutions.
At €552 million, sales for the Coating Solutions segment declined by 8.5% year-on-year, strongly impacted by a 17.3% negative price effect reflecting both less favorable market conditions in upstream acrylics and lower raw materials in downstream activities. Volumes were up 11.8%, benefiting from improved activity levels in view of the prior year’s low point. The currency effect was a negative 3.0%. Driven notably by better volumes, EBITDA rose by 9.5% to €69 million, and EBITDA margin improved by 210 bps to 12.5%.
At €161 million, sales of the Intermediates segment were 11.0% lower than in fourth-quarter 2022, impacted by a 21.0% drop in volumes which reflects lower demand for acrylics in Asia. The price effect of positive 14.4% reflected the solid momentum of refrigerant gases in Europe and the United States. The currency effect reduced the segment’s sales by 4.4%.
EBITDA rose sharply to €40 million (€24 million in Q4’22), driven by the good contribution of refrigerant gases. EBITDA margin thus grew to 24.8% from 13.3% in fourth-quarter 2022.
FOURTH-QUARTER 2023 HIGHLIGHTS
On 1 December 2023, Arkema finalized the acquisition of Glenwood Private Equity’s 54% stake in the listed South Korean company PI Advanced Materials (PIAM), for an enterprise value of €728 million. This acquisition completes Arkema’s portfolio of high performance technologies for the fast-growing advanced electronics and electric mobility markets.
SUBSEQUENT EVENTS
On 2 January 2024, Arkema finalized the acquisition of Irish manufacturer Arc Building Products, specialized in construction adhesives and sealants and which generates around €15 million in annual sales.
OUTLOOK FOR 2024
In the first quarter, the macroeconomic context remains marked by a lack of visibility and soft demand in the continuity of fourth-quarter 2023. First-quarter EBITDA should thus be comparable to the fourth-quarter 2023 level and below the first-quarter 2023 level, which still benefited from favorable market conditions in PVDF and upstream acrylics, which progressively normalized during 2023.
Irrespective of a progressive rebound in demand, Arkema will benefit, starting in second-quarter 2024, from the ramp-up of several growth projects, which should contribute in the full year around €60 million to €70 million in terms of EBITDA. These projects include notably the hydrofluoric acid plant in partnership with Nutrien in the United States, the bio-based polyamide 11 unit in Singapore, the expansion of the Sartomer® plant in China and of the Pebax® plant in France, and the development of 1233zd fluorospecialties with low global warming potential. Arkema will also benefit from the contribution of the PIAM acquisition and from its associated growth synergies, in particular in the electronics and battery markets. Adhesive Solutions should achieve good growth in 2024, benefiting from the positive dynamic which started in second-half 2023.
Based on these factors, Arkema aims to achieve in 2024 a higher EBITDA, estimated at €1.5 billion to €1.7 billion depending on the level of recovery in demand, and with seasonality more weighted to the second half of the year.
Moreover, the Group will continue to implement its strategic roadmap unveiled at the Capital Markets Day of September 2023. It should notably confirm during the year its capital expenditure plan to support the growth of batteries for electric vehicles in the United States. It will continue to strengthen, in partnership with its customers, its innovation efforts in solutions for a less carbonized and more sustainable world, and pursue the implementation of its climate plan.
Further details concerning the Group’s 2023 results are provided in the “Full-year 2023 results and highlights” 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 2023 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 are available on the Company’s website at: www.arkema.com/global/en/investor-relations/
FINANCIAL CALENDAR
7 May 2024: Publication of first-quarter 2024 results
15 May 2024: Annual general meeting
1 August 2024: Publication of first-half 2024 results
6 November 2024: Publication of third-quarter 2024 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, 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 2023 as reviewed by Arkema’s Board of Directors on 28 February 2024. 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 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 2023, 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 2023, and operates in some 55 countries with 21,100 employees worldwide.
ARKEMA financial statements
Consolidated financial information - At the end of December 2023
Consolidated financial statements as end of December 2022 and 2023 have been audited.
CONSOLIDATED INCOME STATEMENT 4th quarter 2023 4th quarter 2022 (In millions of euros) Sales2,222
2,507
Operating expenses(1,797)
(2,129)
Research and development expenses(71)
(71)
Selling and administrative expenses(213)
(219)
Other income and expenses(59)
(70)
Operating income82
18
Equity in income of affiliates(2)
(2)
Financial result(26)
(30)
Income taxes(31)
23
Net income23
9
Attributable to non-controlling interests3
(2)
Net income - Group share20
11
Earnings per share (amount in euros)0.27
0.13
Diluted earnings per share (amount in euros)0.27
0.13
End of December 2023 End of December 2022 (In millions of euros) Sales9,514
11,550
Operating expenses(7,554)
(8,970)
Research and development expenses(275)
(270)
Selling and administrative expenses(874)
(868)
Other income and expenses(130)
(155)
Operating income681
1,287
Equity in income of affiliates(9)
(6)
Financial result(70)
(61)
Income taxes(177)
(254)
Net income425
966
Attributable to non-controlling interests7
1
Net income - Group share418
965
Earnings per share (amount in euros)5.39
12.81
Diluted earnings per share (amount in euros)5.36
12.75
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 4th quarter 2023 4th quarter 2022 (In millions of euros) Net income23
9
Hedging adjustments6
7
Other items0
1
Deferred taxes on hedging adjustments and other items1
1
Change in translation adjustments(155)
(459)
Other recyclable comprehensive income(148)
(450)
Impact of remeasuring unconsolidated investments—
—
Actuarial gains and losses(41)
(79)
Deferred taxes on actuarial gains and losses8
15
Other non-recyclable comprehensive income(33)
(64)
Total income and expenses recognized directly in equity(181)
(514)
Total comprehensive income(158)
(505)
Attributable to non-controlling interest(2)
(5)
Total comprehensive income - Group share(156)
(500)
End of December 2023 End of December 2022 (In millions of euros) Net income425
966
Hedging adjustments(45)
26
Other items0
1
Deferred taxes on actuarial gains and losses3
(2)
Change in translation adjustments(189)
108
Other recyclable comprehensive income(231)
133
Impact of remeasuring unconsolidated investments—
(1)
Actuarial gains and losses(22)
88
Deferred taxes on actuarial gains and losses4
(14)
Other non-recyclable comprehensive income(18)
73
Total income and expenses recognized directly in equity(249)
206
Total comprehensive income176
1,172
Attributable to non-controlling interest0
—
Total comprehensive income - Group share176
1,172
INFORMATION BY SEGMENT 4th quarter 2023 (In millions of euros) Adhesive Solutions Advanced Materials Coating Solutions Intermediates Corporate Total Sales642
857
552
161
10
2,222
EBITDA94
149
69
40
(21)
331
Recurring depreciation and amortization of property, plant and equipment and intangible assets(25)
(93)
(32)
(5)
(2)
(157)
Recurring operating income (REBIT)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 income34
6
33
36
(27)
82
Equity in income of affiliates—
(3)
—
1
—
(2)
Intangible assets and property, plant, and equipment additions34
159
53
13
9
268
Of which: recurring capital expenditure34
150
53
13
9
259
4th quarter 2022 (In millions of euros) Adhesive Solutions Advanced Materials Coating Solutions Intermediates Corporate Total Sales692
1,022
603
181
9
2,507
EBITDA75
148
63
24
(19)
291
Recurring depreciation and amortization of property, plant and equipment and intangible assets(21)
(74)
(32)
(16)
(2)
(145)
Recurring operating income (REBIT)54
74
31
8
(21)
146
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(53)
(4)
(1)
—
—
(58)
Other income and expenses(18)
(48)
(1)
0
(3)
(70)
Operating income(17)
22
29
8
(24)
18
Equity in income of affiliates—
(2)
—
—
—
(2)
Intangible assets and property, plant, and equipment additions37
202
59
11
9
318
Of which: recurring capital expenditure37
166
59
11
9
282
INFORMATION BY SEGMENT End of december 2023 (In millions of euros) Adhesive Solutions Advanced Materials Coating Solutions Intermediates Corporate Total Sales2,714
3,562
2,402
797
39
9,514
EBITDA380
666
327
213
(85)
1,501
Recurring depreciation and amortization of property, plant and equipment and intangible assets(87)
(300)
(126)
(43)
(6)
(562)
Recurring operating income (REBIT)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 income159
266
191
170
(105)
681
Equity in income of affiliates—
(10)
—
1
—
(9)
Intangible assets and property, plant, and equipment additions82
389
115
28
20
634
Of which: recurring capital expenditure82
363
115
28
20
608
End of december 2022 (In millions of euros) Adhesive Solutions Advanced Materials Coating Solutions Intermediates Corporate Total Sales2,898
4,341
3,250
1,020
41
11,550
EBITDA366
941
593
306
(96)
2,110
Recurring depreciation and amortization of property, plant and equipment and intangible assets(78)
(278)
(127)
(61)
(6)
(550)
Recurring operating income (REBIT)288
663
466
245
(102)
1,560
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(95)
(18)
(5)
—
—
(118)
Other income and expenses(63)
(79)
—
23
(36)
(155)
Operating income130
566
461
268
(138)
1,287
Equity in income of affiliates—
(6)
—
—
—
(6)
Intangible assets and property, plant, and equipment additions85
456
127
20
19
707
Of which: recurring capital expenditure85
333
127
20
19
584
CONSOLIDATED CASH FLOW STATEMENT End of december 2023 End of december 2022 (In millions of euros) Operating cash flows Net income425
966
Depreciation, amortization and impairment of assets718
707
Other provisions and deferred taxes(30)
(45)
(Gains)/losses on sales of long-term assets(34)
(38)
Undistributed affiliate equity earnings10
6
Change in working capital158
(137)
Other changes25
37
Cash flow from operating activities1,272
1,496
Investing cash flows Intangible assets and property, plant, and equipment additions(634)
(707)
Change in fixed asset payables(44)
(23)
Acquisitions of operations, net of cash acquired(714)
(1,616)
Increase in long-term loans(71)
(93)
Total expenditures(1,463)
(2,439)
Proceeds from sale of intangible assets and property, plant and equipment14
18
Change in fixed asset receivables(1)
—
Proceeds from sale of operations, net of cash transferred32
19
Repayment of long-term loans63
61
Total divestitures108
98
Cash flow from investing activities(1,355)
(2,341)
Financing cash flows Issuance (repayment) of shares and paid-in surplus—
48
Purchase of treasury shares(32)
(22)
Dividends paid to parent company shareholders(253)
(222)
Interest paid to bearers of subordinated perpetual notes(16)
(16)
Dividends paid to non-controlling interests and buyout of minority interests(3)
(4)
Increase in long-term debt1,096
6
Decrease in long-term debt(85)
(233)
Increase / (Decrease) in short-term debt(191)
611
Cash flow from financing activities516
168
Net increase/(decrease) in cash and cash equivalents433
(677)
Effect of exchange rates and changes in scope20
(16)
Cash and cash equivalents at beginning of period1,592
2,285
Cash and cash equivalents at end of the period2,045
1,592
CONSOLIDATED BALANCE SHEET 31 december 2023 31 december 2022 (In millions of euros) ASSETS Goodwill3,040
2,655
Other intangible assets, net2,416
2,178
Property, plant and equipment, net3,730
3,429
Equity affiliates: investments and loans13
24
Other investments52
52
Deferred tax assets157
166
Other non-current assets251
245
TOTAL NON-CURRENT ASSETS9,659
8,749
Inventories1,208
1,399
Accounts receivable1,261
1,360
Other receivables and prepaid expenses170
202
Income tax receivables142
130
Other current financial assets32
57
Cash and cash equivalents2,045
1,592
Assets held for sale—
22
TOTAL CURRENT ASSETS4,848
4,762
TOTAL ASSETS14,517
13,511
LIABILITIES AND SHAREHOLDERS' EQUITY Share capital750
750
Paid-in surplus and retained earnings6,304
6,218
Treasury shares(21)
(20)
Translation adjustments170
352
SHAREHOLDERS' EQUITY - GROUP SHARE7,203
7,300
Non-controlling interests252
39
TOTAL SHAREHOLDERS' EQUITY7,455
7,339
Deferred tax liabilities436
362
Provisions for pensions and other employee benefits397
382
Other provisions and non-current liabilities416
458
Non-current debt3,734
2,560
TOTAL NON-CURRENT LIABILITIES4,983
3,762
Accounts payable1,036
1,149
Other creditors and accrued liabilities392
437
Income tax payables83
109
Other current financial liabilities27
13
Current debt541
698
Liabilities related to assets held for sale—
4
TOTAL CURRENT LIABILITIES2,079
2,410
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY14,517
13,511
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 202375,043,514
750
1,067
700
4,451
352
(231,087)
(20)
7,300
39
7,339
Cash dividend—
—
—
—
(269)
—
—
—
(269)
(3)
(272)
Issuance of share capital—
—
—
—
—
—
—
—
—
—
—
Capital decrease by cancellation of treasury shares—
—
—
—
—
—
—
—
—
—
—
Purchase of treasury shares—
—
—
—
—
—
(357,726)
(32)
(32)
—
(32)
Grants of treasury shares to employees—
—
—
—
(31)
—
359,912
31
0
—
0
Share-based payments—
—
—
—
25
—
—
—
25
—
25
Issuance of hybrid bonds—
—
—
—
—
—
—
—
—
—
—
Redemption of hybrid bonds—
—
—
—
—
—
—
—
—
—
—
Other—
—
—
—
3
—
—
—
3
216
219
Transactions with shareholders—
—
—
—
(272)
—
2,186
(1)
(273)
213
(60)
Net income—
—
—
—
418
—
—
—
418
7
425
Total income and expense recognized directly through equity—
—
—
—
(60)
(182)
—
—
(242)
(7)
(249)
Comprehensive income—
—
—
—
358
(182)
—
—
176
0
176
At 31 december 202375,043,514
750
1,067
700
4,537
170
(228,901)
(21)
7,203
252
7,455
* The "Other" line corresponds to the share of the PI Advanced Materials acquisition 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 december 2023 End of december 2022 4th quarter 2023 4th quarter 2022 OPERATING INCOME681
1,287
82
18
- Depreciation and amortization related to the revaluation of tangible and intangible assets as part of the allocation of the purchase price of businesses(128)
(118)
(33)
(58)
- Other income and expenses(130)
(155)
(59)
(70)
RECURRING OPERATING INCOME (REBIT)939
1,560
174
146
- Recurring depreciation and amortization of tangible and intangible assets(562)
(550)
(157)
(145)
EBITDA1,501
2,110
331
291
Details of depreciation and amortization of tangible and intangible assets: (In millions of euros) End of december 2023 End of december 2022 4th quarter 2023 4th quarter 2022 Depreciation and amortization of tangible and intangible assets(718)
(707)
(206)
(215)
Of which: Recurring depreciation and amortization of tangible and intangible assets(562)
(550)
(157)
(145)
Of which: Depreciation and amortization related to the revaluation of assets as part of the allocation of thepurchase price of businesses(128)
(118)
(33)
(58)
Of which: Impairment included in other income and expenses(28)
(39)
(16)
(12)
ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE (In millions of euros) End of december 2023 End of december 2022 4th quarter 2023 4th quarter 2022 NET INCOME - GROUP SHARE418
965
20
11
- Depreciation and amortization related to the revaluation of tangible and intangible assets as part of the allocation of the purchase price of businesses(128)
(118)
(33)
(58)
- Other income and expenses(130)
(155)
(59)
(70)
- 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 businesses30
25
7
13
- Taxes on other income and expenses14
27
0
22
- One-time tax effects(21)
19
(2)
16
ADJUSTED NET INCOME653
1,167
107
88
Weighted average number of ordinary shares74,647,205
74,095,040
Weighted average number of potential ordinary shares75,043,514
74,420,933
ADJUSTED EARNINGS PER SHARE (in euros)8.75
15.75
1.43
1.16
DILUTED ADJUSTED EARNINGS PER SHARE (in euros)8.70
15.68
1.42
1.16
RECURRING CAPITAL EXPENDITURE (In millions of euros) End of december 2023 End of december 2022 4th quarter 2023 4th quarter 2022 INTANGIBLE ASSETS AND PROPERTY, PLANT, AND EQUIPMENT ADDITIONS634
707
268
318
- Exceptional capital expenditure26
123
9
36
- Investments relating to portfolio management operations—
—
—
—
- Capital expenditure with no impact on net debt—
—
0
—
RECURRING CAPITAL EXPENDITURE608
584
259
282
CASH FLOWS AND EBITDA TO CASH CONVERSION RATE (In millions of euros) End of december 2023 End of december 2022 4th quarter 2023 4th quarter 2022 Cash flow from operating activities1,272
1,496
462
457
+ Cash flow from investing activities(1,355)
(2,341)
(843)
(259)
NET CASH FLOW(83)
(845)
(381)
198
- Net cash flow from portfolio management operations(708)
(1,629)
(664)
(1)
FREE CASH FLOW625
784
283
199
Exceptional capital expenditure(26)
(123)
(9)
(36)
- Non-recurring cash flow(110)
(26)
(33)
(3)
RECURRING CASH FLOW761
933
325
238
The net cash flow from portfolio management operations corresponds to the impact of acquisition and divestment operations. Non-recurring cash flow corresponds to cash flow from other income and expenses. (In millions of euros) End of december 2023 End of december 2022 RECURRING CASH FLOW761
933
EBITDA1,501
2,110
EBITDA TO CASH CONVERSION RATE50.7%
44.2%
NET DEBT (In millions of euros) End of december 2023 End of december 2022 Non-current debt3,734
2,560
+ Current debt541
698
- Cash and cash equivalents2,045
1,592
NET DEBT2,230
1,666
+ Hybrid bonds700
700
NET DEBT AND HYBRID BONDS2,930
2,366
WORKING CAPITAL (In millions of euros) End of december 2023 End of december 2022 Inventories1,208
1,399
+ Accounts receivable1,261
1,360
+ Other receivables including income taxes312
332
+ Other current financial assets32
57
- Accounts payable1,036
1,149
- Other liabilities including income taxes475
546
- Other current financial liabilities27
13
WORKING CAPITAL1,275
1,440
CAPITAL EMPLOYED (In millions of euros) End of december 2023 End of december 2022 Goodwill, net3,040
2,655
+ Intangible assets (excluding goodwill), and property, plant and equipment, net6,146
5,607
+ Investments in equity affiliates13
24
+ Other investments and other non-current assets303
297
+ Working capital1,275
1,440
CAPITAL EMPLOYED10,777
10,023
Adjustment *(1,038)
13
ADJUSTED CAPITAL EMPLOYED9,739
10,036
* In 2022, elements of capital employed classified as assets held for sale (Febex).In 2023, capital employed relating to PIAM, consolidated at the end of the year and with no material contribution to income for the year. RETURN ON CAPITAL EMPLOYED (ROCE) (In millions of euros) End of december 2023 End of december 2022 Recurring operating income (REBIT)939
1,560
Adjusted capital employed9,739
10,036
ROCE9.6 %
15.5 %
View source version on businesswire.com: https://www.businesswire.com/news/home/20240228140627/en/
Investor relations contacts 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 Alexis Noël, +33 (0)1 49 00 74 37, alexis.noel@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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