In an economic environment that was in line with that of recent quarters and marked by weak demand in most end markets, Arkema’s margin held up well, benefiting from the Group’s repositioning toward Specialty Materials. Arkema furthermore confirms its guidance for 2023.
- Sales of €2.4 billion, down by 23% compared with the particularly high level of Q2’22:
- Volumes down significantly, impacted by overall weak demand in most end markets and continued destocking. The automotive, battery and energy markets nevertheless remained well oriented
- Price effect positive in most product lines but negative at the Group level given, as in the first quarter, the normalization of PVDF and upstream acrylics
- Positive momentum in high performance solutions driven by sustainability trends, which are at the heart of the Group’s strategy
- EBITDA of €417 million, down compared with the exceptionally high performance of Q2’22 (€705 million). EBITDA margin reached a very good level at 17.1%, demonstrating the quality of the product portfolio and dynamic price and mix management
- Adjusted net income of €207 million, representing €2.77 per share (€5.99 in Q2’22)
- Recurring cash flow of €145 million, reflecting the robust results and including the seasonality of working capital
- Net debt including hybrid bonds up slightly to €2,645 million, integrating the dividend payment and representing 1.7x last-twelve-months EBITDA
- Strengthening of the Group’s specialty profile with the announcement on 28 June of the proposed acquisition of a controlling stake in PI Advanced Materials (1), a global leader in ultra-high performance polyimide films based in South Korea
- 2023 guidance confirmed, with Arkema aiming to achieve EBITDA of around €1.5 billion to €1.6 billion
“In the second quarter, in an environment marked by a low level of activity in the continuity of the first quarter, Arkema’s performance was solid, reflecting the Group’s excellent positioning in high performance niche markets, as well as tight management of our operations. The teams delivered high-quality work, enabling us to confirm our annual targets in a macroeconomic context with low visibility that is showing little signs of improvement.
In addition, with the proposed acquisition of 54% of PI Advanced Materials announced in late June, Arkema has taken another major step towards its ambition of becoming a world leader in Specialty Materials. This unique opportunity, which will offer the Group significant synergies thanks to strong geographical and technological complementarities, will enable us to accelerate our growth in the highly attractive electronics and battery markets.
Our Capital Markets Day, to be held in Paris on 27 September, will provide an opportunity to discuss Arkema’s innovation strategy and medium-term ambition in greater detail.”
Outlook for 2023
In this context, the Group will strive to continue tightly managing its operations, in particular by controlling fixed costs and optimizing working capital. It will also continue its innovation drive in high-growth areas linked to sustainability, and ramp up recently started growth capital expenditure projects.
In this environment, in light of its first-half results and based on the projected momentum in the second half, Arkema confirms its full-year guidance and aims to achieve in 2023 EBITDA of around €1.5 billion to €1.6 billion. Furthermore, the Group expects a high EBITDA to cash conversion rate over the year, consistent with its medium-term target of at least 40%.
Further details concerning the Group’s second-quarter 2023 results are provided in the “Second-quarter 2023 results and outlook” presentation and the “Factsheet”, both available on Arkema’s website at: www.arkema.com/global/en/investor-relations/
27 September 2023: 2023 Capital Markets Day
9 November 2023: Publication of third-quarter 2023 results
29 February 2024: Publication of full-year 2023 results