Arkema Sa · EURONEXT:AKE
Arkema Sa — Q1 2024 Earnings Presentation
18 slides from Arkema Sa's earnings presentation, May 7, 2024
Slide 1: First quarter 2024 results and outlook
First quarter 2024 results and outlook 07/05/2024
Slide 2: Robust results in a broadly unchanged economic environment
Robust results in a broadly unchanged economic environment in €million Sales EBITDA Adj. Net Income Net Debt (incl. hybrid bonds) 2,524 162 2,341 367 350 3,063 2,930 138 Q1'23 Q1'24 Q1'23 Q1'24 Q1'23 Q1'24 31/12/23 31/03/24 Specialty Materials 93% Margin 15.0% Adj. EPS €1.84 ~2x LTM EBITDA First qua
Slide 3: Q1'24 financial highlights
Q1’24 financial highlights → Down 7.3% YoY €2,341m sales • Slight volume growth in the 3 Specialty Materials segments (+2.7%) • Good momentum in structural bonding, sports, automotive and energy markets • Negative 8.4% price effect in Specialty Materials mainly reflecting lower raw material prices a
Slide 4: Acquisition of Dow's flexible packaging laminating adhesives
Acquisition1 of Dow’s flexible packaging laminating adhesives: a high-quality business strengthening our existing position One of the global leaders for adhesives in flexible packaging A unique opportunity • Become a leader in the flexible packaging market Annual sales around US$ 250m • Become a tec
Slide 5: Acquisition of Dow's flexible packaging laminating adhesives: a highly value creative operation
Acquisition of Dow’s flexible packaging laminating adhesives business: a highly value creative operation • Based on a US$150m Enterprise Value Transaction price • Corresponding to book value of WC and assets • Representing around 10x EBITDA 2024F Implementation Around US$50m over the next three year
Slide 6: Step up in new generation of batteries
Step up in new generation of batteries Acquisition1 of a pioneering start-up and world leader in the field of ionic liquids Annual sales around €2.5m in 2023 Tiamat Ionic liquids are key components for • Start-up pioneer in sodium-ion the next generation of solid battery technology batteries with po
Slide 7: Successful start-up of PEBAX capacity increase
Successful start-up of PEBAX® capacity increase Capacity increase in Serquigny (France) • +40% in global Pebax® elastomers production capacity • New unit to produce both bio-circular Pebax® Rnew® and classical Pebax® elastomer ranges Designed with the latest advancements in industrial processes • Im
Slide 8: CSR highlights
CSR highlights New employer brand ISCC+ certification Production site in Campaign Villers-Saint-Paul (France) is the « What are you made of ? » first UV-LED-EB curable resins to support the recruitment manufacturing site in Europe to of 2,000 full time employees receive ISCC+ certification each year
Slide 9: Key figures
Key figures in €million Q1’24 Q1’23 Change Sales 2,341 2,524 -7.3% EBITDA 350 367 -4.6% Specialty Materials 342 347 -1.4% Intermediates 39 49 -20.4% Corporate -31 -29 EBITDA margin 15.0% 14.5% Specialty Materials 15.7% 15.1% Intermediates 24.7% 22.5% Recurring operating income (REBIT) 202 234 -13.7%
Slide 10: Sales evolution reflecting mainly lower raw materials
Sales evolution reflecting mainly lower raw materials Sales in €million -0.2% -7.2% -1.7% +1.8% Slight growth in the Ongoing Stronger euro Integration of PIAM, as 3 Specialty Materials unfavorable against US dollar well as Polytec PT and segments (+2.7%) conditions in and Chinese yuan Arc Building P
Slide 11: Adhesive Solutions (29% of Group sales)
Adhesive Solutions (29% of Group sales) Key figures Highlights in €m Q1’24 Q1’23 Change → Volumes up 1.7% YoY Sales 680 698 -2.6% • Stronger demand in structural bonding EBITDA 105 93 +12.9% and packaging in all 3 key regions • Construction activity slightly down EBITDA margin 15.4% 13.3% REBIT 82 7
Slide 12: Advanced Materials (38% of Group sales)
Advanced Materials (38% of Group sales) Key figures Highlights in €m Q1’24 Q1’23 Change → Volumes up 1.6% YoY Sales 878 937 -6.3% • Positive momentum in High Performance Polymers EBITDA 162 160 +1.3% in Asia, notably in the battery, automotive and sport markets EBITDA margin 18.5% 17.1% • Performanc
Slide 13: Coating Solutions (26% of Group sales)
Coating Solutions (26% of Group sales) Key figures Highlights in €m Q1’24 Q1’23 Change → Volumes up 5.3% YoY Sales 615 661 -7.0% • Improving demand in Coating Additives, notably EBITDA 75 94 -20.2% for industrial markets • Higher volumes in upstream acrylics in Europe EBITDA margin 12.2% 14.2% REBIT
Slide 14: Intermediates (7% of Group sales)
Intermediates (7% of Group sales) Key figures Highlights in €m Q1’24 Q1’23 Change Sales 158 218 -27.5% → Volumes down 30.7% YoY EBITDA 39 49 -20.4% • Mechanical impact on volumes from lower refrigerant gas quotas EBITDA margin 24.7% 22.5% • Lackluster business context for acrylics in REBIT 29 36 -19
Slide 15: Cash flow generation reflecting usual seasonality
Cash flow generation reflecting usual seasonality in €million Q1’24 Q1’23 EBITDA 350 367 → Q1’24 tax rate 22% of REBIT (excl. exceptional items) Current taxes -39 -55 Cost of debt -14 -16 Change in working capital and fixed assets payables (1) -255 -243 → Working capital Recurring capital expenditur
Slide 16: Net debt broadly stable around 2x EBITDA
Net debt broadly stable around 2x EBITDA in €million ~2x LTM EBITDA 22 21 5 25 60 3,063 2,930 31/12/2023 Rec. cash Exceptional M&A Dividends & FX and 31/03/2024 flow items Hybrid bonds others First quarter 2024 results and outlook 07/05/2024 16
Slide 17: Outlook
Outlook → The macroeconomic environment remains marked by a lack of visibility and ongoing geopolitical tensions, with no clear signs yet of a rebound in demand. → In this context, Arkema will focus primarily on internal momentum, and will benefit from the gradual ramp-up from Q2 onwards of several
Slide 18: Disclaimer
Disclaimer The information disclosed in this document may contain forward-looking statements with respect to the financial condition, results of operations, business and strategy of Arkema. In a context marked by strong geopolitical tensions, where the evolution of the world economy remain uncertain