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Second-quarter 2021 results

- Press release
Corporate - Finance
The Group 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 (1) which benefited from strong demand for innovative, sustainable materials and from its unique positioning to support global megatrends. In this context, and in light of the quality of the performance achieved in the first half of the year, Arkema is once again significantly increasing its financial targets for 2021.
  •  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
  • Continuation of the strategy to refocus on Specialty Materials, with the finalization of the PMMA divestment and the acquisitions of Edge Adhesives and Agiplast
  • Full-year guidance significantly raised; Arkema is now targeting around 30% growth in Specialty Materials’ EBITDA relative to 2020 at constant scope and currency (2), which would result in Group EBITDA of around €1.4 billion, excluding a systemic resumption of the health crisis

     

(1) Specialty Materials include the following three segments: Adhesive Solutions, Advanced Materials and Coating Solutions

(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

Arkema Chairman and Chief Executive Officer

Following Arkema’s Board of Directors’ meeting held on 28 July 2021 to approve the Group’s consolidated financial statements for the first half of 2021, 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."

Outlook for 2021

The positive dynamic observed in the first half is continuing, benefiting from solid demand in most of the Group’s end markets. Arkema will nevertheless remain vigilant and ready to respond rapidly to the current evolution of the health crisis and the rising raw materials context, and will pursue its price increase initiatives.

Moreover, Arkema will continue to leverage its strong sustainable innovation dynamic and its recent capacity expansions in order to capitalize on accelerating demand for sustainable, high-performance solutions, driven by global megatrends.

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 (3), versus the 20% previously announced. Group EBITDA should therefore reach around €1.4 billion for the full year.

Finally, Arkema will continue to deploy its strategic roadmap, in line with its ambition to become a pure Specialty Materials player by 2024.

 

Further details concerning the Group’s second-quarter 2021 results are provided in the “Second-quarter 2021 results and outlook” presentation and the Factsheet, both  available on Arkema’s website www.finance.arkema.com.

 

(3) 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

Financial calendar

10 November 2021: Publication of third-quarter 2021 results

24 February 2022: Publication of full-year 2021 results

Contacts

Béatrice ZILM
Investor relations
Peter FARREN
Investor relations
Mathieu BRIATTA
Investor relations
Caroline CHUNG
Investor relations
Gilles GALINIER
VP Communication
Arkema
Véronique OBRECHT
Corporate Press relations
Arkema