Arkema has recorded excellent earnings growth in the second quarter, notably with EBITDA up 67% compared to 2020 and above the pre-crisis level of 2019.
This performance was driven by Specialty Materials, which benefited from strong demand for innovative, sustainable materials and from its unique positioning to support global megatrends.
Key highlights of Q1FY21:
- Group sales of €2.4 billion, up 34.6% versus 2020 and up 12.1% versus 2019 at constant scope and currency:
- Significant growth in volumes (+17.1% vs. Q2’20 and +3.0% vs. Q2’19), driven by high demand in most end markets and the strong dynamic of new developments
- 17.5% increase in selling prices on average compared to the prior year, reflecting the Group’s ability to offset the very marked rise in raw materials and energy costs
- Sharp acceleration in the benefits of sustainable innovation, particularly in the fast-growing batteries, bio-based materials, 3D printing, electronics and environmentally friendly paints markets
- EBITDA of €478 million, up 67.1% compared to Q2’20, and a historically high EBITDA margin of 20.0%:
- Strong growth in the three segments that constitute Specialty Materials, which recorded EBITDA of €417 million, up nearly 80% versus Q2’20 and 37% versus the pre-Covid reference of Q2’19
- Intermediates’ EBITDA of €87 million, up 31.8% despite a negative scope effect related to the PMMA divestment on 3 May 2021, benefiting from more favorable market conditions than in the prior year, which was marked by the health crisis
- Adjusted net income up almost threefold to €267 million, representing €3.50 per share
- Net debt of €1.28 billion (including €700 million in hybrid bonds), representing 0.9x last-twelve-months EBITDA and including €1.1 billion in gross proceeds from the PMMA divestment, €191 million in dividend payments and a €300 million commitment relating to the share buyback program launched at the end of May.
Chairman and CEO Thierry Le Hénaff said, “Arkema’s employees can be proud of the performance achieved in the second quarter and I’d like to take this opportunity to thank them warmly for their contribution. We expected the results to be significantly above 2020 levels. But very sharply outperforming 2019, particularly in Specialty Materials, is a great achievement that positions us perfectly on our trajectory to 2024. This performance fully confirms the validity of our strategy of sustainable growth and transformation towards innovative, high-performance materials.
In a fast-changing world full of opportunities, we firmly believe in the strength of our project, which is the product of our teams’ unwavering commitment since many years, enabling us to support in a unique manner our customers address the major challenges of sustainable development.
Our technologies, the partnerships we forge with our customers, our geographical footprint and our financial flexibility are all valuable assets that will contribute both to speeding up our organic growth via high-quality industrial projects and to strengthening our Specialty Materials through bolt-on acquisitions.
We’re more confident than ever in our potential to create value and enthusiastic about growth opportunities notably in such areas as lightweight and bio-based materials, batteries, hydrogen, 3D printing, technical adhesives and more environmentally friendly paints. Raising our guidance for the second time this year is a reflection of this confidence.”
In light of its first-half financial performance, and while remaining attentive to the macroeconomic context which remains volatile, the Group has significantly raised its full-year guidance once again. Excluding a systemic resumption of the health crisis, Arkema is now targeting for 2021, around 30% growth in Specialty Materials’ EBITDA relative to 2020 at constant scope and currency, versus the 20% previously announced. Group EBITDA should therefore reach around €1.4 billion for the full year.