Regulatory News:
Arkema (Paris:AKE) delivered an excellent financial
performance in the first quarter, despite high raw materials and
energy cost inflation and some disparities in growth between
regions and markets. These results were driven by the Group’s
acceleration in high performance materials, its ability to
incorporate cost increases into its selling prices and its agility
in a complex global environment.
- Group sales of €2.9 billion, up by 30%
year-on-year at constant scope and currency:
- Volumes down slightly from last year’s high level, impacted
mainly by logistics disruptions and raw materials shortages
- Continued product mix improvement, reflecting the acceleration
in demand for high performance solutions
- Adjustment to selling prices offsetting very significant raw
materials, energy and transportation cost inflation
- Specialty Materials representing 90% of Group sales (82% in
Q1’21)
- EBITDA of €619 million, up by 72.9%
compared with Q1’21, and EBITDA margin up sharply to
21.4%:
- EBITDA of Specialty Materials up by 82% at €556 million (€306
million in Q1’21), benefiting from solid volumes, the selling price
policy against a highly inflationary context, and the development
of high value-added applications linked to sustainable megatrends
(batteries, 3D, lightweighting, bio-based materials, more
eco-friendly paints, etc.)
- Intermediates’ EBITDA up by 25%, supported by the improvement
of Fluorogases and better conditions in upstream acrylics in
Asia
- Adjusted net income multiplied by 2.4 to €376
million, representing €4.96 per share (€2.08 in Q1’21)
- Recurring cash flow of €26 million (€53 million
in Q1’21), including the seasonal increase in working capital, as
well as higher selling and raw materials prices
- Net debt tightly controlled at €2,703 million –
of which €700 million in hybrid bonds – including the acquisition
of Ashland’s performance adhesives finalized on 28 February 2022,
and representing 1.4x last-twelve-months EBITDA
Given this excellent start to the year, while remaining
attentive to the evolution of the macroeconomic environment, Arkema
now aims to achieve in 2022 at constant scope, Specialty Materials
EBITDA and Group EBITDA slightly above the record level of
2021.
Following Arkema’s Board of Directors’ meeting, held on 4 May
2022 to review the Group’s consolidated financial information for
the first quarter of 2022, Chairman and CEO Thierry Le Hénaff
said:
“Our very good performance in the first quarter reflects the
strength of our innovation for sustainable development and Arkema’s
very solid positioning to address accelerating demand for
cutting-edge solutions in high value-added markets. In an operating
context that continues to be particularly demanding, our balanced
geographic footprint, our technologies, our customer intimacy and
the commitment of Arkema’s teams are all valuable assets. Despite
the uncertainties currently weighing on global growth, this first
quarter’s very good results make us confident in our ability to
surpass in 2022 last year’s record results and particularly
motivate the teams to continue implementing our strategy focused on
Specialty Materials.
We are also pleased to have welcomed on 1 March Ashland’s
adhesives’ teams, and this top-tier activity is already confirming
all its potential. Lastly, we are delighted to start up very soon,
on time and on budget, our two new plants in Singapore and the
United States, which are fully in line with the decarbonization
theme.”
KEY FIGURES FOR FIRST-QUARTER 2022
in millions of euros
Q1'22
Q1'21 (1)
Change
Sales
2,887
2,226
+29.7% EBITDA
619
358
+72.9% Specialty Materials
556
306
+81.7% Intermediates
94
75
+25.3% Corporate
-31
-23
EBITDA margin
21.4
%
16.1
%
Specialty Materials
21.3
%
16.3
%
Intermediates
34.7
%
21.7
%
Recurring operating income (REBIT)
488
223
+118.8% REBIT margin
16.9
%
10.0
%
Adjusted net income
376
159
+136.5% Adjusted net income per share (in €)
4.96
2.08
+138.5%
Recurring cash flow
26
53
-50.9
%
Free cash flow
-23
-16
Net debt including hybrid bonds
2,703
2,002
€1,177m as of 31/12/2021
FIRST-QUARTER 2022 BUSINESS PERFORMANCE
Sales rose by 29.7% year-on-year to €2,887
million. Up against a high comparison base, volumes were down
by a slight 2.2%, impacted by logistics disruptions in Europe and
the United States and the shortage of certain raw materials,
particularly in the Adhesive Solutions segment. While underlying
demand remained fairly well oriented in most of the Group’s end
markets and regions, a slowdown was nevertheless observed in China
at the end of the quarter due to Covid-related lockdowns, as well
as in construction in Europe. The 31.5% positive price effect
reflects in particular Arkema’s ability to pass on in its Specialty
Materials selling prices the very high inflation in raw materials,
energy and transportation costs, as well as better conditions in
upstream acrylics. The scope effect was a negative 4.9%, as the
divestment of PMMA was only partially offset by the integration of
acquisitions in Specialty Materials. The 5.3% positive currency
effect was essentially attributable to the appreciation of the US
dollar against the euro.
In first-quarter 2022, Specialty Materials’ sales accounted for
90% of Group sales (82% in Q1’21), confirming the benefits of the
Group’s strategy.
Group EBITDA, up by a strong 72.9% to €619
million, was driven in particular by the improvement in the
product mix linked to strong demand for solutions with high
technological content in batteries, consumer goods, electronics and
3D printing, by the Group’s ability to pass on very high cost
inflation, as well as by favorable market conditions in upstream
acrylics. Specialty Materials’ EBITDA was up by 81.7% to €556
million, supported by the good performance achieved by all its
business segments. Intermediates’ EBITDA increased by 25.3% to €94
million. In this demanding and complex yet nevertheless buoyant
context, the Group’s EBITDA margin rose by 530 bps to
21.4%.
Recurring operating income (REBIT) more than doubled
year-on-year to €488 million. This figure includes €131
million in recurring depreciation and amortization, down by €4
million compared with first-quarter 2021, mainly reflecting the
scope effect linked to the divestment of PMMA in May 2021. The
REBIT margin amounted to 16.9% (10.0% in Q1’21).
Adjusted net income rose sharply to €376 million
(€159 million in Q1’21), representing €4.96 per share.
Excluding exceptional items, the tax rate amounted to 21% of
recurring operating income.
CASH FLOW AND NET DEBT AT 31 MARCH 2022
Recurring cash flow came to €26 million, down
slightly from first-quarter 2021 (€53 million). While the Group’s
operating performance improved significantly compared with the
prior year, the increase in working capital was also more marked,
reflecting unprecedented inflation in raw materials and energy
costs, higher selling prices, as well as the traditional
seasonality of volumes observed in the first quarter. At end-March
2022, working capital returned to a more normative level,
representing 14.0% of annualized sales (12.7% at end-March 2021 and
16.5% at end-March 2020). Recurring cash flow also included
recurring capital expenditure of €72 million, stable
year-on-year.
Free cash flow amounted to a negative €23 million
(negative €16 million in Q1’21), and included exceptional capital
expenditure of €40 million, down by €13 million year-on-year, as
the two major projects concerned enter the final phase of their
implementation.
Net cash flow from portfolio management operations
represented an outflow of €1,496 million in first-quarter
2022, mainly reflecting the payment of the Ashland performance
adhesives acquisition finalized on 28 February 2022.
As a result, net debt including hybrid bonds was up
significantly, totaling €2,703 million compared with €1,177
million at end-2021. Nevertheless, the net debt (including hybrid
bonds) to last-twelve-months EBITDA ratio remained well below the
2x threshold, standing at 1.4x. On a pro forma basis, including the
twelve-months EBITDA of Ashland’s adhesives and excluding the
residual contribution of PMMA, this ratio came to 1.3x.
FIRST-QUARTER 2022 PERFORMANCE BY SEGMENT
ADHESIVE SOLUTIONS (23% OF TOTAL GROUP
SALES)
in millions of euros
Q1'22 Q1'21 Change
Sales
670
555
+20.7% EBITDA
90
86
+4.7% EBITDA margin
13.4
%
15.5
%
Recurring operating income (REBIT)
73
71
+2.8% REBIT margin
10.9
%
12.8
%
Sales in the Adhesive Solutions segment rose sharply by
20.7% compared with first-quarter 2021 to €670 million,
driven by a 15.8% price effect which reflects the Group’s ongoing
initiatives to pass on the significant inflation in raw materials,
energy and transportation costs. In a context of sustained demand,
volumes nevertheless fell by 4.5% from the high level achieved last
year, impacted by the slowdown recently observed in construction
and DIY in Europe, by logistics difficulties, as well as by
shortages of certain raw materials, which are gradually improving.
Volumes in the United States stood at a good level. The 6.3%
positive scope effect corresponds to the integration of Ashland’s
performance adhesives in March, as well as Poliplas and Edge
Adhesives Texas over the quarter. The currency effect was a
positive 3.1%.
At €90 million, the segment’s EBITDA increased by
4.7% compared with first-quarter 2021, and the EBITDA margin
came in at 13.4% (15.5% in Q1’21), impacted essentially by
the mechanical dilutive effect of price increases covering all raw
materials costs. This performance reflects the benefit of price
increase initiatives, the product mix improvement toward high
performance adhesive solutions in high value-added applications, as
well as to a lesser extent the integration of acquisitions, in
particular Ashland’s performance adhesives in March.
ADVANCED MATERIALS (37% OF TOTAL GROUP
SALES)
in millions of euros
Q1'22
Q1'21 (1)
Change
Sales
1,075
752
+43.0% EBITDA
274
142
+93.0% EBITDA margin
25.5
%
18.9
%
Recurring operating income (REBIT)
207
75
+176.0% REBIT margin
19.3
%
10.0
%
Up by 43.0% compared with first-quarter 2021, sales in
the Advanced Materials segment amounted to €1,075 million.
In an environment still characterized by favorable demand in most
industrial markets except automotive, which remained down, volumes
decreased slightly by 2.0% year-on-year, impacted mainly by
logistics disruptions. Strongly favorable in the segment’s two
Business Lines, the price effect of positive 39.4% reflects
initiatives to increase selling prices in the context of still
marked raw materials, energy and transportation cost inflation, as
well as the clear improvement in the product mix toward high
performance solutions that address global megatrends. In
particular, momentum remained strong in batteries, lightweighting,
sports, bio-based materials and electronics. The 0.5% negative
scope effect corresponds to the divestment of the epoxides business
in December 2021, which was partly offset by the integration of
Agiplast, and the currency effect was a positive 6.1%.
The segment’s EBITDA reached a record level of €274
million, a 93.0% year-on-year increase, thanks notably to the
segment’s positioning on higher value-added solutions. The
EBITDA margin increased by a significant 660 bps to
25.5%, reflecting the high quality of the Group’s innovation
portfolio.
COATING SOLUTIONS (30% OF TOTAL GROUP
SALES)
in millions of euros
Q1'22
Q1'21
Change
Sales
862
567
+52.0% EBITDA
192
78
+146.2% EBITDA margin
22.3
%
13.8
%
Recurring operating income (REBIT)
161
49
+228.6% REBIT margin
18.7
%
8.6
%
At €862 million, sales in the Coating Solutions
segment were up by 52% year-on-year. At a positive 41.8%, the price
effect was sustained across all the segment’s activities. In an
environment of high raw materials, energy and transportation cost
inflation, this reflects both the price increase initiatives
undertaken by the Group to offset the impact of higher costs, and
more favorable conditions in upstream acrylics. Volumes were up by
4.2%, benefiting from continued well-oriented demand and a
relatively favorable comparison base due to the slowdown linked to
winter storm Uri in the United States last year, but remained
impacted by logistics difficulties encountered in shipping and
receiving products. The currency effect increased segment sales by
6.0%.
In this context, the Coating Solutions segment achieved an
excellent financial performance, with EBITDA of €192
million versus €78 million in the prior year, which was
impacted by the consequences of winter storm Uri in the United
States. Both upstream acrylics and downstream activities were up
significantly. The EBITDA margin came to 22.3%,
benefiting from the improvement in the product mix toward higher
value-added solutions that address notably challenges in living
comfort & home efficiency and new energies, as well as needs in
electronics and 3D printing.
INTERMEDIATES (10% OF TOTAL GROUP
SALES)
in millions of euros
Q1'22
Q1'21 (1)
Change
Sales
271
346
-21.7
%
EBITDA
94
75
+25.3% EBITDA margin
34.7
%
21.7
%
Recurring operating income (REBIT)
79
53
+49.1% REBIT margin
29.2
%
15.3
%
Sales in the Intermediates segment amounted to €271
million, down by 21.7% compared with first-quarter 2021,
reflecting in particular a 40.2% negative scope effect relating to
the divestment of the PMMA business in May 2021. Benefiting from
continued favorable market conditions in acrylics in Asia and a
positive dynamic in Fluorogases in the United States, the price
effect was a positive 23.1%. Volumes decreased by 10.4%, as the
acrylics business was impacted at the end of the quarter by strict
lockdown measures in China, and Fluorogases by the mechanical
effect of quotas in the United States. The currency effect was a
positive 5.8%.
At €94 million, EBITDA was up by 25.3%
year-on-year, despite a negative scope effect of around €30
million. The EBITDA margin grew strongly to 34.7%
(21.7% in Q1’21), reflecting the recovery of Fluorogases margins
from the low level of previous years, and more favorable conditions
in upstream acrylics in Asia.
FIRST-QUARTER 2022 HIGHLIGHTS
On 28 February 2022, Arkema finalized the acquisition of
Ashland’s Performance Adhesives business. This operation, based on
a US$1,650 million enterprise value, i.e., 8.7x the expected 2026
EBITDA after taking into account growth and synergies estimated at
12.5% of sales, marks a major step in Arkema’s strengthening of its
Adhesive Solutions segment.
The Group also expanded its offering of engineering adhesives
with the acquisition, finalized on 1 April 2022, of Shanghai
Zhiguan Polymer Materials (PMP) in China, specialized in hot-melt
adhesives for the consumer electronics market.
In Advanced Materials, Arkema announced on 26 January 2022 that
it was now targeting a capacity increase of 50% in fluoropolymer
production at its Changshu site in China to support strong demand
in lithium-ion batteries and in other important markets, with the
start-up expected at end-2022.
Also in Advanced Materials, on 17 January 2022, Arkema announced
plans to increase its global production capacity for Pebax®
elastomers by 25% through an investment at its Serquigny plant in
France, to support its customers’ strong growth, in particular in
the sports and consumer goods markets.
Moreover, following the completion on 24 November 2021 of the
€300 million share buyback program, the Board of Directors decided
on 24 January 2022 to reduce Arkema’s share capital by 3.19%, by
canceling 2,450,435 treasury shares acquired at a total cost of
€270 million. Following this operation, Arkema’s share capital
amounted to €742,860,410, divided into 74,286,041 shares with a par
value of €10.
Lastly, in early January, the Group and other founding members
of the “Pragati” project for sustainable castor crop farming,
published the results of the fifth year of their program, which saw
a 50% increase in certified castor beans (36,000 tons) and over
5,800 farmers trained by the end of this fifth year.
OUTLOOK FOR 2022
Market conditions remain positively oriented at the beginning of
the second quarter, but with disparities between regions and end
markets and an increased lack of visibility regarding the
environment. The health situation in China, the war in Ukraine,
high raw materials and energy cost inflation, and logistics
disruptions are all factors that could weigh on global demand going
forward.
In this demanding context, the Group will endeavor to optimize
supply chain management and continue to dynamically adjust its
selling prices. Moreover, Arkema will pursue its cutting-edge
innovation to develop, in partnership with its customers, its
Specialty Materials and high performance solutions for sustainable
development.
While remaining attentive to the evolution of the macroeconomic
environment, the Group aims to reach in second-quarter 2022 a
strong increase in its EBITDA compared with the prior year, driven
in particular by high organic growth in Advanced Materials and
Coating Solutions. The Adhesive Solutions segment, still impacted
by certain raw materials shortages, will benefit from the
integration of Ashland’s adhesives business.
Moreover, Arkema now aims to achieve in 2022, at constant scope,
Specialty Materials EBITDA and Group EBITDA slightly above the
record level of 2021.
In line with its strategy to become a pure Specialty Materials
player in 2024, Arkema will continue in 2022 its bolt-on
acquisition policy, as well as its review of the Intermediates
segment. Beyond the start-up, expected in the coming months, of the
two major industrial projects, namely the bio-based polyamides
plant in Singapore and the hydrofluoric acid plant in the United
States, Arkema will continue to selectively increase its industrial
capacities to support its growth.
Lastly, the Group is reaffirming its confidence in its ability
to achieve the ambitious targets it has set for 2024. It will
continue to implement its strategic roadmap, notably by stepping up
its innovation efforts for sustainable development. Arkema thus
aims to generate €1.5 billion of new revenues from 2019 to 2030
around its five large innovation platforms, namely lightweight
materials and design, electronics solutions, new energies, living
comfort and home efficiency and natural resources management.
Further details concerning the Group’s first-quarter 2022
results are provided in the “First-quarter 2022 results and
outlook” presentation and the “Factsheet”, both available on
Arkema’s website at:
www.arkema.com/global/en/investor-relations/
FINANCIAL CALENDAR
19 May 2022: Annual general meeting 29 July 2022: Publication of
second-quarter 2022 results 10 November 2022: Publication of
third-quarter 2022 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 the current context, where the Covid-19 pandemic persists
across the world, and where the consequences of the Russian
offensive in Ukraine and the resulting economic sanctions against
Russia on geopolitical stability and the global economy remain
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, developments in the
Russian offensive in Ukraine, developments in the Covid-19
situation, 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 information at 31
March 2022 reviewed by Arkema’s Board of Directors on 4 May 2022.
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):
- scope effect: the impact of changes in the Group’s scope
of consolidation, which arise from acquisitions and divestments of
entire businesses or as a result of the first-time consolidation or
deconsolidation of entities. Increases or reductions in capacity
are not included in the scope effect;
- currency effect: the mechanical impact of consolidating
accounts denominated in currencies other than the euro at different
exchange rates from one period to another. The currency effect is
calculated by applying the foreign exchange rates of the prior
period to the figures for the period under review;
- price effect: the impact of changes in average selling
prices is estimated by comparing the weighted average net unit
selling price of a range of related products in the period under
review with their weighted average net unit selling price in the
prior period, multiplied, in both cases, by the volumes sold in the
period under review;
- volume effect: the impact of changes in volumes is
estimated by comparing the quantities delivered in the period under
review with the quantities delivered in the prior period,
multiplied, in both cases, by the weighted average net unit selling
price in the prior period.
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 in 2024 a pure player in Specialty
Materials, the Group is structured into 3 complementary, resilient
and highly innovative segments dedicated to Specialty Materials
-Adhesive Solutions, Advanced Materials, and Coating Solutions-
accounting for some 85.5% of Group sales in 2021, 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 2021, and operates in some 55 countries with 20,200
employees worldwide.
A French société anonyme (limited company) with share capital of
€742,860,410 Registered in Nanterre: RCS 445 074 685 Nanterre
Follow us on: Twitter.com/Arkema_group
Linkedin.com/company/arkema
(1) Integrates the reclassification of the upstream of PVDF in
the Advanced Materials segment (ex Intermediates segment)
ARKEMA financial
statements
Consolidated financial information - At the
end of March 2022
Consolidated financial statements as of December 2021 have been
audited.
CONSOLIDATED INCOME STATEMENT
1st quarter 2022
1st quarter 2021 (In millions
of euros)
Sales
2,887
2,226
Operating expenses
(2,135
)
(1,769
)
Research and development expenses
(66
)
(61
)
Selling and administrative expenses
(217
)
(190
)
Other income and expenses
(35
)
(24
)
Operating income
434
182
Equity in income of affiliates
(1
)
(1
)
Financial result
(8
)
(13
)
Income taxes
(95
)
(43
)
Net income
330
125
Attributable to non-controlling interests
1
1
Net income - Group share
329
124
Earnings per share (amount in euros)
4.28
1.56
Diluted earnings per share (amount in euros)
4.26
1.55
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
1st
quarter 2022
1st
quarter 2021
(In millions of euros)
Net income
330
125
Hedging adjustments
(1
)
(15
)
Other items
-
-
Deferred taxes on hedging adjustments and other items
0
-
Change in translation adjustments
90
115
Other recyclable comprehensive income
89
100
Impact of remeasuring unconsolidated investments
(1
)
-
Actuarial gains and losses
50
61
Deferred taxes on actuarial gains and losses
(9
)
(13
)
Other non-recyclable comprehensive income
40
48
Total income and expenses recognized directly in equity
129
148
Total comprehensive income
459
273
Attributable to non-controlling interest
1
2
Total comprehensive income - Group share
458
271
INFORMATION BY SEGMENT
1st quarter 2022* (In millions
of euros)
AdhesiveSolutions AdvancedMaterials
CoatingSolutions Intermediates Corporate
Total Sales
670
1,075
862
271
9
2,887
EBITDA
90
274
192
94
(31
)
619
Recurring depreciation and amortization of property, plant and
equipment and intangible assets
(17
)
(67
)
(31
)
(15
)
(1
)
(131
)
Recurring operating income (REBIT)
73
207
161
79
(32
)
488
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
(13
)
(4
)
(2
)
-
-
(19
)
Other income and expenses
(18
)
(3
)
-
0
(14
)
(35
)
Operating income
42
200
159
79
(46
)
434
Equity in income of affiliates
-
(1
)
-
-
-
(1
)
Intangible assets and property, plant, and equipment
additions
15
76
15
2
4
112
Of which: recurring capital expenditure
15
36
15
2
4
72
1st quarter 2021*
(In millions of euros)
AdhesiveSolutions
AdvancedMaterials CoatingSolutions
Intermediates Corporate Total
Sales
555
752
567
346
6
2,226
EBITDA
86
142
78
75
(23
)
358
Recurring depreciation and amortization of property, plant and
equipment and intangible assets
(15
)
(67
)
(29
)
(22
)
(2
)
(135
)
Recurring operating income (REBIT)
71
75
49
53
(25
)
223
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
(12
)
(4
)
(1
)
-
-
(17
)
Other income and expenses
(6
)
(8
)
(10
)
0
0
(24
)
Operating income
53
63
38
53
(25
)
182
Equity in income of affiliates
-
(1
)
-
-
-
(1
)
Intangible assets and property, plant, and equipment
additions
15
89
11
9
3
127
Of which: recurring capital expenditure
15
36
9
9
3
72
* Integrates the reclassification of the upstream of PVDF in
the Advanced Materials segment (ex Intermediates segment).
CONSOLIDATED CASH FLOW STATEMENT
End of
March 2022
End of
March 2021
(In millions of euros)
Operating
cash flows Net income
330
125
Depreciation, amortization and impairment of assets
154
146
Other provisions and deferred taxes
(13
)
12
(Gains)/losses on sales of long-term assets
-
(2
)
Undistributed affiliate equity earnings
1
1
Change in working capital
(332
)
(137
)
Other changes
10
6
Cash flow from operating activities
150
151
Investing cash flows Intangible assets and
property, plant, and equipment additions
(112
)
(127
)
Change in fixed asset payables
(79
)
(45
)
Acquisitions of operations, net of cash acquired
(1,481
)
(14
)
Increase in long-term loans
(6
)
(8
)
Total expenditures
(1,678
)
(194
)
Proceeds from sale of intangible assets and property, plant,
and equipment
1
5
Proceeds from sale of operations, net of cash transferred
-
-
Proceeds from sale of unconsolidated investments
-
-
Repayment of long-term loans
8
6
Total divestitures
9
11
Cash flow from investing activities
(1,669
)
(183
)
Financing cash flows Issuance (repayment) of
shares and paid-in surplus
-
-
Purchase of treasury shares
(2
)
(28
)
Issuance of hybrid bonds
-
-
Redemption of hybrid bonds
-
-
Dividends paid to parent company shareholders
-
-
Interest paid to bearers of subordinated perpetual notes
(5
)
(5
)
Dividends paid to non-controlling interests
-
-
Increase in long-term debt
1
4
Decrease in long-term debt
(21
)
(14
)
Increase / (Decrease) in short-term debt
489
(4
)
Cash flow from financing activities
462
(47
)
Net increase/(decrease) in cash and cash equivalents
(1,057
)
(79
)
Effect of exchange rates and changes in scope
29
(14
)
Cash and cash equivalents at beginning of period
2,285
1,587
Cash and cash equivalents at end or the period
1,257
1,494
CONSOLIDATED BALANCE SHEET 31 March 2022 31
December 2021 (In millions of euros)
ASSETS Goodwill
3,129
1,925
Intangible assets, net
1,679
1,517
Property, plant and equipment, net
3,140
3,031
Equity affiliates: investments and loans
28
29
Other investments
51
52
Deferred tax assets
141
144
Other non-current assets
217
218
TOTAL NON-CURRENT ASSETS
8,385
6,916
Inventories
1,527
1,283
Accounts receivable
1,848
1,432
Other receivables and prepaid expenses
187
181
Income tax receivables
101
91
Other current financial assets
35
109
Cash and cash equivalents
1,257
2,285
Assets held for sale
4
4
TOTAL CURRENT ASSETS
4,959
5,385
TOTAL ASSETS
13,344
12,301
LIABILITIES AND SHAREHOLDERS' EQUITY
Share capital
743
767
Paid-in surplus and retained earnings
5,721
5,598
Treasury shares
(37
)
(305
)
Translation adjustments
333
243
SHAREHOLDERS' EQUITY - GROUP SHARE
6,760
6,303
Non-controlling interests
49
47
TOTAL SHAREHOLDERS' EQUITY
6,809
6,350
Deferred tax liabilities
341
342
Provisions for pensions and other employee benefits
440
493
Other provisions and non-current liabilities
444
443
Non-current debt
2,690
2,680
TOTAL NON-CURRENT LIABILITIES
3,915
3,958
Accounts payable
1,381
1,274
Other creditors and accrued liabilities
448
430
Income tax payables
206
155
Other current financial liabilities
15
52
Current debt
570
82
Liabilities related to assets held for sale
-
-
TOTAL CURRENT LIABILITIES
2,620
1,993
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
13,344
12,301
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 1 January 2022
76,736,476
767
1,272
700
3,626
243
(2,779,553
)
(305
)
6,303
47
6,350
Cash dividend
-
-
-
-
(5
)
-
-
-
(5
)
-
(5
)
Issuance of share capital
-
-
-
-
-
-
-
-
-
-
-
Capital decrease by cancellation of treasury shares
(2,450,435
)
(24
)
(246
)
-
-
-
2,450,435
270
-
-
-
Purchase of treasury shares
-
-
-
-
-
-
(20,000
)
(2
)
(2
)
-
(2
)
Grants of treasury shares to employees
-
-
-
-
-
-
-
-
-
-
-
Share-based payments
-
-
-
-
7
-
-
-
7
-
7
Issuance of hybrid bonds
-
-
-
-
-
-
-
-
-
-
-
Redemption of hybrid bonds
-
-
-
-
-
-
-
-
-
-
-
Other
-
-
-
-
(1
)
-
-
-
(1
)
1
-
Transactions with shareholders
(2,450,435
)
(24
)
(246
)
-
1
-
2,430,435
268
(1
)
1
-
Net income
-
-
-
-
329
-
-
-
329
1
330
Total income and expense recognized directly throughequity
-
-
-
-
39
90
-
-
129
-
129
Comprehensive income
-
-
-
-
368
90
-
-
458
1
459
At 31 March 2022
74,286,041
743
1,026
700
3,995
333
(349,118
)
(37
)
6,760
49
6,809
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)
1st quarter
2022 1st quarter
2021 OPERATING INCOME
434
182
- Depreciation and amortization related to the revaluation of
tangible and intangible assets as part of theallocation of the
purchase price of businesses
(19
)
(17
)
- Other income and expenses
(35
)
(24
)
RECURRING OPERATING INCOME (REBIT)
488
223
- Recurring depreciation and amortization of tangible and
intangible assets
(131
)
(135
)
EBITDA
619
358
Details of depreciation and
amortization of tangible and intangible assets:
(In millions of euros)
1st quarter
2022 1st quarter
2021 Depreciation and amortization of tangible
and intangible assets
(154
)
(146
)
Of which: Recurring depreciation and amortization of tangible and
intangible assets
(131
)
(135
)
Of which: Depreciation and amortization related to the revaluation
of assets as part of the allocation of thepurchase price of
businesses
(19
)
(17
)
Of which: Impairment included in other income and expenses
(4
)
6
ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER
SHARE (In millions of euros)
1st quarter 2022 1st
quarter 2021 NET INCOME - GROUP SHARE
329
124
- Depreciation and amortization related to the revaluation of
tangible and intangible assets as part of theallocation of the
purchase price of businesses
(19
)
(17
)
- Other income and expenses
(35
)
(24
)
- Other income and expenses - Non-controlling interests
-
-
- Taxes on depreciation and amortization related to the revaluation
of assets as part of the allocation of thepurchase price of
businesses
4
4
- Taxes on other income and expenses
3
2
- One-time tax effects
-
-
ADJUSTED NET INCOME
376
159
- Weighted average number of ordinary shares
75,747,926
76,479,782
- Weighted average number of potential ordinary shares
76,083,027
76,736,476
ADJUSTED EARNINGS PER SHARE (in euros)
4.96
2.08
DILUTED ADJUSTED EARNINGS PER SHARE (in euros)
4.94
2.07
RECURRING CAPITAL EXPENDITURE (In
millions of euros)
1st quarter
2022 1st quarter
2021 INTANGIBLE ASSETS AND PROPERTY, PLANT,
AND EQUIPMENT ADDITIONS
112
127
- Exceptional capital expenditure
40
53
- Investments relating to portfolio management operations
-
-
- Capital expenditure with no impact on net debt
0
2
RECURRING CAPITAL EXPENDITURE
72
72
CASH FLOWS (In millions of euros)
1st quarter 2022
1st quarter 2021 Cash
flow from operating activities
150
151
+ Cash flow from investing activities
(1,669
)
(183
)
NET CASH FLOW
(1,519
)
(32
)
- Net cash flow from portfolio management operations
(1,496
)
(16
)
FREE CASH FLOW
(23
)
(16
)
Exceptional capital expenditure
(40
)
(53
)
- Non-recurring cash flow
(9
)
(16
)
RECURRING CASH FLOW
26
53
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.
NET DEBT (In millions of euros)
End of March 2022
End of December 2021
Non-current debt
2,690
2,680
+ Current debt
570
82
- Cash and cash equivalents
1,257
2,285
NET DEBT
2,003
477
+ Hybrid bonds
700
700
NET DEBT AND HYBRID BONDS
2,703
1,177
WORKING CAPITAL
(In millions of euros)
End of March
2022 End of December
2021 Inventories
1,527
1,283
+ Accounts receivable
1,848
1,432
+ Other receivables including income taxes
288
272
+ Other current financial assets
35
109
- Accounts payable
1,381
1,274
- Other liabilities including income taxes
654
585
- Other current financial liabilities
15
52
WORKING CAPITAL
1,648
1,185
CAPITAL EMPLOYED
(In millions of euros)
End of March
2022 End of December
2021 Goodwill, net
3,129
1,925
+ Intangible assets (excluding goodwill), and property, plant and
equipment, net
4,819
4,548
+ Investments in equity affiliates
28
29
+ Other investments and other non-current assets
268
270
+ Working capital
1,648
1,185
CAPITAL EMPLOYED
9,892
7,957
Elements of capital employed classified as assets held for sale
4
4
CAPITAL EMPLOYED ADJUSTED
9,896
7,961
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220504005940/en/
Investor relations 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 Caroline Chung +33 (0)1 49 00 74 37
caroline.chung@arkema.com
Media Gilles Galinier +33 (0)1 49 00 70 07
gilles.galinier@arkema.com Véronique Obrecht +33 (0)1 49 00 88 41
veronique.obrecht@arkema.com
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