Regulatory News:
Arkema (Paris:AKE):
In a context of clearly improving market conditions, the Group reported strong earnings growth in the first quarter, driven in particular by a rise in volumes of innovative and sustainable Specialty Materials (1), which benefited from their unique positioning and cutting-edge innovation related to global megatrends.
Given its confidence in its development dynamic, Arkema is significantly increasing its financial targets for 2021.
- Sales of €2.23 billion, up 12.7% versus Q1'20 at constant scope and currency
- Significant increase in volumes (+7.7%), in the continuity of the rebound already observed in Q4'20 (+5.2%)
- Strong momentum in most of the Group's end markets, and contribution of new developments driven by sustainable innovation
- EBITDA of €358 million, up sharply by almost 20% (€300 million in Q1'20), and EBITDA margin of 16.1%
- Specialty Materials' EBITDA of €306 million, up 19.5%, supported by strong increases in the three segments Adhesive Solutions, Advanced Materials and Coating Solutions
- Intermediates' EBITDA of €75 million, up 10.3% (up 18.5% at constant scope)
- Adjusted net income up 59% to €159 million, representing €2.08 per share
- Well controlled net debt, at €2.0 billion (including €700 million in hybrid bonds), representing 1.6x LTM EBITDA
- Major milestone in Arkema's evolution with the finalization of the divestment of PMMA to Trinseo on 3 May 2021, supplemented by Bostik's recent acquisition of Poliplas
- 2021 guidance significantly raised, with the Group now targeting around 20% growth in Specialty Materials' EBITDA relative to 2020 at constant scope and currency (2) excluding a systemic resumption of the health crisis
Following Arkema's Board of Directors' meeting, held on 5 May 2021 to review the Group's consolidated financial information for the first quarter of 2021, Chairman and CEO Thierry Le Hénaff said:
"The pace of activity accelerated in the first quarter in the context of better economic indicators. Our growth reflects first and foremost the strength of our innovation over the past few years to position our Specialty Materials in structural growth segments, along with positive momentum in most of our end markets and our balanced geographical footprint. While remaining attentive to the evolution of the health crisis and to the volatility of the environment, in light of our very good first-quarter results and our development opportunities, the Group is strongly raising its annual targets for Specialty Materials, which represent the essential part of our scope following the divestment of PMMA.
This year marks the start of a new era of growth for Arkema, consistent with the ambitions unveiled at our April 2020 Capital Markets Day. Supported by our teams' strong commitment to the company's strategy, we are accelerating our innovation projects and investments in promising high growth markets driven by sustainable megatrends, such as clean mobility, lightweight materials, 3D printing and energy efficiency."
Key figures for first-quarter 2021
(In millions of euros) | Q1'21 | Q1'20 | YoY change |
Sales | 2,226 | 2,088 | +6.6% |
EBITDA | 358 | 300 | +19.3% |
Specialty Materials | 306 | 256 | +19.5% |
Intermediates | 75 | 68 | +10.3% |
Corporate | -23 | -24 | |
EBITDA margin | 16.1% | 14.4% | |
Specialty Materials | 16.8% | 15.2% | |
Intermediates | 19.0% | 17.1% | |
Recurring operating income (REBIT) | 223 | 160 | +39.4% |
REBIT margin | 10.0% | 7.7% | |
Adjusted net income | 159 | 100 | +59.0% |
Adjusted net income per share (in €) | 2.08 | 1.31 | +58.8% |
Free cash flow | -16 | -38 | |
Net debt including hybrid bonds | 2,002 | 2,481 | |
€1,910m as of 31/12/2020 |
First-quarter 2021 business performance
Sales rose by 6.6% year on year, to €2,226 million. The 7.7% rise in volumes was driven by overall strong momentum and in particular in the construction and DIY, batteries, electronics, transportation and consumer goods markets. This good performance reflects Arkema's ability to capitalize on rising demand for sustainable,
high-performance materials thanks to its offering of innovative products with a high technological content. Certain markets such as packaging and crop nutrition nevertheless reported less buoyant growth, due to a high
first-quarter 2020 comparison base, while the oil and gas market remained down. The 5.0% positive price effect mainly reflected increased prices in the acrylics chain in the face of higher propylene and initiatives to raise prices in Specialty Materials. The scope effect was a negative 1.7%, with the divestment of Functional Polyolefins only partly offset by the integration of Fixatti and Ideal Work in Adhesive Solutions. The currency effect was a negative 4.4%, primarily owing to the euro's rise against the US dollar. In first-quarter 2021, Specialty Materials sales accounted for 82% of total Group sales (81% in Q1'20).
Group EBITDA grew by a very strong 19.3% to €358 million, driven by the rise in volumes, the acceleration of new business development, particularly in High Performance Polymers, as well as tight control over fixed costs, and impacted by a close to €15 million unfavorable currency effect. In spite of the strong increase in raw material prices and transportation costs, all of the Group's segments reported a significant earnings improvement, reflecting the good positioning of the Group's product offering to leverage megatrends, the diversity of its end markets, and its balanced geographical footprint. Specialty Materials' EBITDA grew by 19.5% versus last year to €306 million, and Intermediates' EBITDA increased 10.3% to €75 million. In this context, the Group EBITDA margin rose by 170 bps to 16.1%
As a result, recurring operating income (REBIT) was up almost 40% year on year, to €223 million. This amount includes recurring depreciation and amortization of €135 million, down €5 million compared to first-quarter 2020, primarily due to the currency effect. The REBIT margin improved by 230 bps to 10.0%
Adjusted net income also increased sharply by 59% to €159 million, representing €2.08 per share. Excluding exceptional items, the Group's tax rate amounted to 22% of recurring operating income.
Cash flow and net debt at March 31, 2021
Arkema reported free cash flow of negative €16 million in first-quarter 2021 (negative €38 million in first-quarter 2020). In an environment marked by a rebound in activity, this figure includes an increase in working capital, which is related to the seasonal rise in volumes and raw materials inflation. Working capital remained at a very good level, representing 12.7% of annualized sales at end-March 2021 (16.5% at end-March 2020 and 15.1% at end-March 2019). This reflects, in addition to strict management, inventories that are still below their normative level in the face of good customer demand.
The free cash flow figure also includes the ramp-up of exceptional capital expenditure (€53 million versus €13 million in Q1'20), relating to the bio-based polyamides project in Singapore and the hydrofluoric acid supply project with Nutrien in the United States. Recurring capital expenditure amounted to €72 million over the quarter (€79 million in Q1'20).
Including hybrid bonds, net debt was stable at 31 March 2021, at €2.0 billion (€1.9 billion at 31 December 2020), and the net debt (including hybrid bonds) to last-twelve-months EBITDA ratio stood at 1.6x.
First-quarter 2021 performance by segment
Adhesive Solutions (25% of total Group sales)
(In millions of euros) | Q1'21 | Q1'20 | YoY change |
Sales | 555 | 515 | +7.8% |
EBITDA | 86 | 69 | +24.6% |
EBITDA margin | 15.5% | 13.4% | |
Recurring operating income (REBIT) | 71 | 54 | +31.5% |
REBIT margin | 12.8% | 10.5% |
Sales for the Adhesive Solutions segment totaled €555 million, up 7.8% compared to first-quarter 2020, driven mainly by the 8.6% rise in volumes. Momentum remained strong in the construction and DIY markets, particularly in Europe and Asia, in the continuity of second-half 2020, and the segment also benefited from the recovery of industrial markets in high-performance adhesives. Growth in the packaging and hygiene markets was more subdued, owing to a high prior-year comparison base. The 0.4% negative price effect reflects changes in the product mix that overshadowed the impact of higher prices in a context of raw materials inflation. Nevertheless, the price effect is positive sequentially. The positive scope effect of 3.5% corresponds to the integration of Fixatti and Ideal Work, and the currency effect was a negative 3.9%.
At €86 million, EBITDA for the segment rose sharply by almost 25% compared to first-quarter 2020, and the EBITDA margin reached its highest ever level in a quarter at 15.5%, a significant 210-bp increase. This excellent performance notably reflects the momentum in volumes, the impact of our operational excellence initiatives, the repositioning toward higher value-added applications, and the integration of our acquisitions. This helps to reinforce the 14% EBITDA margin target for the year, up by almost 100 bps compared to last year.
Advanced Materials (31.5% of total Group sales)
(In millions of euros) | Q1'21 | Q1'20 | YoY change |
Sales | 703 | 652 | +7.8% |
EBITDA | 142 | 122 | +16.4% |
EBITDA margin | 20.2% | 18.7% | |
Recurring operating income (REBIT) | 81 | 61 | +32.8% |
REBIT margin | 11.5% | 9.4% |
At €703 million, sales for the Advanced Materials segment were up almost 8% year on year.Volumes rose by 9.5%, driven primarily by strong growth in High Performance Polymers, and reflect the benefits of innovation and new developments in the batteries, automotive, sports equipment and water filtration markets, while the oil and gas market declined. The rebound observed in fourth-quarter 2020 in several industrial sectors was confirmed, and was accompanied by a rebuilding of inventories by some of our customers. The price effect was a positive 2.6%, reflecting price increase initiatives in a context of raw materials inflation. The currency effect was a negative 4.3% over the quarter.
In this context of increasing demand for sustainable, high-performance materials, EBITDA for the segment was up 16.4% year on year, to €142 million. The EBITDA margin reached a high level at 20.2% (18.7% in first-quarter 2020).
Coating Solutions (25.5% of total Group sales)
(In millions of euros) | Q1'21 | Q1'20 | YoY change |
Sales | 567 | 517 | +9.7% |
EBITDA | 78 | 65 | +20.0% |
EBITDA margin | 13.8% | 12.6% | |
Recurring operating income (REBIT) | 49 | 36 | +36.1% |
REBIT margin | 8.6% | 7.0% |
At €567 million, sales for the Coating Solutions segment were up by 9.7% year on year, given a 9.1% positive price which offset higher propylene prices. Volumes rose by 5.8%, driven by a strong dynamic in the decorative paints, 3D printing, industrial coatings, graphic arts and electronics markets, partly offset by product availability temporarily affected by winter storm Uri in the United States. The currency effect reduced segment sales by 5.2%.
At €78 million, EBITDA of the Coating Solutions segment was up sharply by 20% on first-quarter 2020, benefiting from the improvement in volumes, price increases in the context of raw materials inflation, and the integration within the acrylics chain of the segment's activities. EBITDA margin was therefore up, at 13.8% (12.6% in first-quarter 2020).
Intermediates (18% of total Group sales)
(In millions of euros) | Q1'21 | Q1'20 | YoY change |
Sales | 395 | 397 | -0.5% |
EBITDA | 75 | 68 | +10.3% |
EBITDA margin | 19.0% | 17.1% | |
Recurring operating income (REBIT) | 47 | 35 | +34.3% |
REBIT margin | 11.9% | 8.8% |
At €395 million, sales for the Intermediates segment decreased by a slight 0.5% year on year. The 13.6% negative scope effect resulting from the divestment of Functional Polyolefins at 1 June 2020, along with the 4.0% negative currency effect, were more than offset by organic growth of 17.1%. Organic growth was driven by a 10.8% positive price effect and by a 6.3% increase in volumes, mainly reflecting more favorable market conditions in acrylics in Asia, still challenging conditions in Fluorogases in Europe and in Asia, and more limited growth in PMMA given the high prior-year comparison base in the context of the pandemic.
In this environment, EBITDA for the segment rose by 10.3% to €75 million (+18.5% at constant scope), and the EBITDA margin came in at 19.0% compared to 17.1% in the prior-year period.
First-quarter 2021 highlights
In order to accelerate the development and production of high value-added engineering adhesives, on 19 January 2021 Arkema announced an investment in CMC (Crackless Monomer Company), a joint venture between Bostik and Taiwanese company Cartell Chemical Co, a leading supplier of cyanoacrylate solutions.
On 1 March 2021, Arkema also finalized its acquisition of Poliplas, a Brazilian leader in hybrid-technology sealants and adhesives for the construction market, which had sales of around €10 million in 2020.
Moreover, on 23 February 2021, Arkema announced a new 35% increase in fluoropolymer production capacities in Changshu, China in 2022. This new investment is supported by ever-growing demand in the lithium-ion battery sector, as well as significant opportunities in the water filtration, construction coatings and semiconductor industries.
Lastly, on 23 March 2021, Arkema joined the new CAC40 ESG index on the Paris stock exchange. This new index, which lists the 40 companies in the CAC Large 60 index that have demonstrated environmental, social and governance (ESG) best practices, promotes the Group's commitments and successes over the past several years for a sustainable economy.
Subsequent events
On 3 May 2021, Arkema reached a new milestone in its evolution toward Specialty Materials by finalizing the divestment of its PMMA business to Trinseo. The net proceeds from the sale, which was carried out based on an enterprise value of €1,137 million, will take into account an estimated capital gains tax of around 15% of this amount.
Outlook for 2021
The positive market dynamics observed in the first quarter is continuing, supported by strong demand in the construction and DIY markets, and several industrial markets that are important for the Group.
Thanks to its innovation for sustainable development and recent industrial capacity expansions, while being attentive to the market environment, which remains volatile, Arkema considers it is very well positioned to benefit from the strongly rising demand for high-performance materials.
In this environment of robust demand, raw materials inflation should accelerate in the second quarter. The Group will continue its initiatives to increase prices to offset this impact.
In this context, and also in light of its first-quarter financial performance, the Group has raised significantly the Specialty Materials' guidance for 2021. Excluding a systemic resumption of the health crisis,
- Specialty Materials' EBITDA is now expected to grow by around 20% in 2021 compared to 2020 at constant scope and currency (3)
- Bostik, in line with its 2024 trajectory, confirms its EBITDA margin target of 14% in the year, and Intermediates' EBITDA should at least reach last year's level at constant scope (4) andcurrency (3)
Finally, Arkema will continue to move ahead with its ambition to become a pure Specialty Materials player by 2024.
Further details concerning the Group's first-quarter 2021 results are provided in the "First quarter 2021 results and outlook" presentation and the Factsheet available on Arkema's website www.finance.arkema.com.
Financial calendar
20 May 2021 26 May 2021 29 July 2021 10 November 2021 | Annual general meeting, held behind closed doors Shares trade ex-dividend Publication of first-half 2021 results Publication of third-quarter 2021 results |
Building on its unique set of expertise in materials science, Arkema offers a world-leading technology portfolio 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 three complementary, resilient and highly innovative segments dedicated to Specialty Materials Adhesive Solutions, Advanced Materials and Coating Solutions accounting for some 82% of Group sales, and a well-positioned and competitive Intermediates segment. Arkema offers cutting-edge technological solutions to meet the challenges of, inter alia, new energies, access to water, recycling, urbanization and mobility, and fosters a permanent dialogue with all its stakeholders. The Group reported sales of around €8 billion in 2020, and operates in some 55 countries with 20,600 employees worldwide. www.arkema.com
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 the evolution of the situation as well as the magnitude of its impacts on the global economy are highly 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 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 2020 reviewed by Arkema's Board of Directors on 5 May 2021. 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.
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
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
4 The combined EBITDA contribution of Functional Polyolefins, divested on 1 June 2020, and of PMMA, divested on 3 May 2021, was close to €135m in 2020 and €45m in 2021 (January April, PMMA only)
ARKEMA Financial Statements
Consolidated financial information At the end of March 2021
CONSOLIDATED INCOME STATEMENT | ||
1st quarter 2021 | 1st quarter 2020 | |
(In millions of euros) | (non audited) | (non audited) |
Sales | 2,226 | 2,088 |
Operating expenses | (1,769) | (1,672) |
Research and development expenses | (61) | (64) |
Selling and administrative expenses | (190) | (206) |
Other income and expenses | (24) | (14) |
Operating income | 182 | 132 |
Equity in income of affiliates | (1) | (2) |
Financial result | (13) | (23) |
Income taxes | (43) | (28) |
Net income | 125 | 79 |
Of which non-controlling interests | 1 | 1 |
Net income Group share | 124 | 78 |
Earnings per share (amount in euros) | 1.56 | 1.02 |
Diluted earnings per share (amount in euros) | 1.55 | 1.02 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | ||
1st quarter 2021 | 1st quarter 2020 | |
(In millions of euros) | (non audited) | (non audited) |
Net income | 125 | 79 |
Hedging adjustments | (15) | (7) |
Other items | ||
Deferred taxes on hedging adjustments and other items | ||
Change in translation adjustments | 115 | 17 |
Other recyclable comprehensive income | 100 | 10 |
Actuarial gains and losses | 61 | (24) |
Deferred taxes on actuarial gains and losses | (13) | 8 |
Other non-recyclable comprehensive income | 48 | (16) |
Total income and expenses recognized directly through equity | 148 | (6) |
Comprehensive income | 273 | 73 |
Of which: non-controlling interest | 2 | 2 |
Comprehensive income Group share | 271 | 71 |
INFORMATION BY SEGMENT | |||||||||||||
(non audited) | |||||||||||||
1st quarter 2021 | |||||||||||||
(In millions of euros) | Adhesive Solutions | Advanced Materials | Coating Solutions | Intermediates | Corporate | Total | |||||||
Total sales | 555 | 703 | 567 | 395 | 6 | 2,226 | |||||||
EBITDA | 86 | 142 | 78 | 75 | (23) | 358 | |||||||
Recurring depreciation and amortization of tangible and intangible assets | (15) | (61) | (29) | (28) | (2) | (135) | |||||||
Recurring operating income (REBIT) | 71 | 81 | 49 | 47 | (25) | 223 | |||||||
Depreciation and amortization related to the revaluation of tangible 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 | 69 | 38 | 47 | (25) | 182 | |||||||
Equity in income of affiliates | (1) | (0) | (1) | ||||||||||
Intangible assets and property, plant and equipment additions | 15 | 58 | 11 | 40 | 3 | 127 | |||||||
Of which recurring capital expenditure | 15 | 33 | 9 | 12 | 3 | 72 | |||||||
1st quarter 2020 | |||||||||||||
(In millions of euros) | Adhesive Solutions | Advanced Materials | Coating Solutions | Intermediates | Corporate | Total | |||||||
Total sales | 515 | 652 | 517 | 397 | 7 | 2,088 | |||||||
EBITDA | 69 | 122 | 65 | 68 | (24) | 300 | |||||||
Recurring depreciation and amortization of tangible and intangible assets | (15) | (61) | (29) | (33) | (2) | (140) | |||||||
Recurring operating income (REBIT) | 54 | 61 | 36 | 35 | (26) | 160 | |||||||
Depreciation and amortization related to the revaluation of tangible and intangible assets as part of the allocation of the purchase price of businesses | (8) | (4) | (2) | (14) | |||||||||
Other income and expenses | (3) | (6) | (0) | (4) | (1) | (14) | |||||||
Operating income | 43 | 51 | 34 | 31 | (27) | 132 | |||||||
Equity in income of affiliates | (2) | 0 | (2) | ||||||||||
Intangible assets and property, plant and equipment additions | 15 | 38 | 14 | 23 | 2 | 92 | |||||||
Of which recurring capital expenditure | 15 | 25 | 14 | 23 | 2 | 79 |
CONSOLIDATED CASH FLOW STATEMENT | ||
End of March 2021 | End of March 2020 | |
(In millions of euros) | (non audited) | (non audited) |
Cash flow operating activities | ||
Net income | 125 | 79 |
Depreciation, amortization and impairment of assets | 146 | 156 |
Other provisions and deferred taxes | 12 | (7) |
(Gains)/losses on sales of long-term assets | (2) | |
Undistributed affiliate equity earnings | 1 | 2 |
Change in working capital | (137) | (132) |
Other changes | 6 | 5 |
Cash flow from operating activities | 151 | 103 |
Cash flow investing activities | ||
Intangible assets and property, plant, and equipment additions | (127) | (92) |
Change in fixed asset payables | (45) | (53) |
Acquisitions of operations, net of cash acquired | (14) | (90) |
Increase in long-term loans | (8) | (8) |
Total expenditures | (194) | (243) |
Proceeds from sale of intangible assets and property, plant and equipment | 5 | 1 |
Change in fixed asset receivables | ||
Proceeds from sale of businesses, net of cash transferred | ||
Proceeds from sale of unconsolidated investments | ||
Repayment of long-term loans | 6 | 6 |
Total divestitures | 11 | 7 |
Cash flow from investing activities | (183) | (236) |
Cash flow financing activities | ||
Issuance (repayment) of shares and other equity | ||
Purchase of treasury shares | (28) | |
Issuance of hybrid bonds | 299 | |
Redemption of hybrid bonds | ||
Dividends paid to parent company shareholders | ||
Interest paid to bearers of subordinated perpetual notes | (5) | |
Dividends paid to non-controlling interests | ||
Variation des dividendes payer | ||
Increase in long-term debt | 4 | 2 |
Decrease in long-term debt | (14) | (24) |
Increase/ decrease in short-term borrowings | (4) | 1 |
Cash flow from financing activities | (47) | 278 |
Net increase/(decrease) in cash and cash equivalents | (79) | 145 |
Effect of exchange rates and changes in scope | (14) | 5 |
Cash and cash equivalents at beginning of period | 1,587 | 1,407 |
Cash and cash equivalents at end of period | 1,494 | 1,557 |
CONSOLIDATED BALANCE SHEET | ||
31 March 2021 | 31 December 2020 | |
(In millions of euros) | (non audited) | (non audited) |
ASSETS | ||
Goodwill | 1,943 | 1,933 |
Other intangible assets, net | 1,489 | 1,433 |
Property, plant and equipment, net | 2,886 | 2,828 |
Equity affiliates: investments and loans | 30 | 29 |
Other investments | 57 | 57 |
Deferred tax assets | 156 | 159 |
Other non-current assets | 218 | 209 |
TOTAL NON-CURRENT ASSETS | 6,779 | 6,648 |
Inventories | 1,006 | 881 |
Accounts receivable | 1,377 | 1,131 |
Other receivables and prepaid expenses | 179 | 163 |
Income tax receivables | 71 | 70 |
Other current financial assets | 22 | 40 |
Cash and cash equivalents | 1,494 | 1,587 |
Assets held for sale | 202 | 191 |
TOTAL CURRENT ASSETS | 4,351 | 4,063 |
TOTAL ASSETS | 11,130 | 10,711 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Share capital | 767 | 767 |
Paid-in surplus and retained earnings | 4,616 | 4,458 |
Treasury shares | (34) | (6) |
Translation adjustments | 82 | (32) |
SHAREHOLDERS' EQUITY GROUP SHARE | 5,431 | 5,187 |
Non-controlling interests | 50 | 48 |
TOTAL SHAREHOLDERS' EQUITY | 5,481 | 5,235 |
Deferred tax liabilities | 346 | 320 |
Provisions for pensions and other employee benefits | 484 | 530 |
Other provisions and non-current liabilities | 406 | 383 |
Non-current debt | 2,663 | 2,663 |
TOTAL NON-CURRENT LIABILITIES | 3,899 | 3,896 |
Accounts payable | 1,085 | 987 |
Other creditors and accrued liabilities | 382 | 339 |
Income tax payables | 98 | 69 |
Other current financial liabilities | 19 | 15 |
Current debt | 133 | 134 |
Liabilities related to assets held for sale | 33 | 36 |
TOTAL CURRENT LIABILITIES | 1,750 | 1,580 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 11,130 | 10,711 |
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY | |||||||||||
(non audited) | |||||||||||
Shares issued | 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 January 1, 2021 | 76,736,476 | 767 | 1,272 | 700 | 2,486 | (32) | (59,756) | (6) | 5,187 | 48 | 5,235 |
Cash dividend | (5) | (5) | (5) | ||||||||
Issuance of share capital | |||||||||||
Purchase of treasury shares | (28) | (28) | (28) | ||||||||
Cancellation of purchased treasury shares | |||||||||||
Grants of treasury shares to employees | |||||||||||
Sale of treasury shares | |||||||||||
Share-based payments | 6 | 6 | 6 | ||||||||
Issuance of hybrid bonds | |||||||||||
Redemption of hybrid bonds | |||||||||||
Other | |||||||||||
Transactions with shareholders |
|
|
|
| 1 |
|
| (28) | (27) |
| (27) |
Net income | 124 | 124 | 1 | 125 | |||||||
Total income and expense recognized directly through equity | 33 | 114 | 147 | 1 | 148 | ||||||
Comprehensive income |
|
|
|
| 157 | 114 |
|
| 271 | 2 | 273 |
At December 31, 2021 | 76,736,476 | 767 | 1,272 | 700 | 2,644 | 82 | (59,756) | (34) | 5,431 | 50 | 5,481 |
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.
RECURRING OPERATING INCOME (REBIT) AND EBITDA
(In millions of euros) | 1st quarter 2021 | 1st quarter 2020 |
OPERATING INCOME | 182 | 132 |
- Depreciation and amortization related to the revaluation of tangible and intangible assets as part of the allocation of the purchase price of businesses | (17) | (14) |
- Other income and expenses | (24) | (14) |
RECURRING OPERATING INCOME (REBIT) | 223 | 160 |
- Recurring depreciation and amortization of tangible and intangible assets | (135) | (140) |
EBITDA | 358 | 300 |
Details of depreciation and amortization of tangible and intangible assets: | ||
(In millions of euros) | 1st quarter 2021 | 1st quarter 2020 |
Depreciation and amortization of tangible and intangible assets | (146) | (156) |
Of which: Recurring depreciation and amortization of tangible and intangible assets | (135) | (140) |
Of which: Depreciation and amortization related to the revaluation of assets as part of the allocation of the purchase price of businesses | (17) | (14) |
Of which: Impairment included in other income and expenses | 6 | (2) |
ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE | ||
(In millions of euros) | 1st quarter 2021 | 1st quarter 2020 |
NET INCOME GROUP SHARE | 124 | 78 |
- Depreciation and amortization related to the revaluation of tangible and intangible assets as part of the allocation of the purchase price of businesses | (17) | (14) |
- Other income and expenses | (24) | (14) |
- Other income and expenses Non-controlling interests | ||
- Taxes on depreciation and amortization related to the revaluation of assets as part of the allocation of the purchase price of businesses | 4 | 3 |
- Taxes on other income and expenses | 2 | 3 |
- One-time tax effects | ||
ADJUSTED NET INCOME | 159 | 100 |
- Weighted average number of ordinary shares | 76,479,782 | 76,492,807 |
- Weighted average number of potential ordinary shares | 76,736,476 | 76,658,760 |
ADJUSTED EARNINGS PER SHARE (in euros) | 2.08 | 1.31 |
DILUTED ADJUSTED EARNINGS PER SHARE (in euros) | 2.07 | 1.30 |
RECURRING CAPITAL EXPENDITURE | ||
(In millions of euros) | 1st quarter 2021 | 1st quarter 2020 |
INTANGIBLE ASSETS AND PROPERTY, PLANT, AND EQUIPMENT ADDITIONS | 127 | 92 |
- Exceptional capital expenditure | 53 | 13 |
- Investments relating to portfolio management operations | ||
- Capital expenditure with no impact on net debt | 2 | 0 |
RECURRING CAPITAL EXPENDITURE | 72 | 79 |
FREE CASH FLOW AND EBITDA TO CASH CONVERSION RATE | ||
(In millions of euros) | 1st quarter 2021 | 1st quarter 2020 |
Cash flow from operating activities | 151 | 103 |
+ Cash flow from investing activities | (183) | (236) |
NET CASH FLOW | (32) | (133) |
- Net cash flow from portfolio management operations | (16) | (95) |
FREE CASH FLOW | (16) | (38) |
The net cash flow from portfolio management operations corresponds to the impact of acquisition and divestment operations. |
NET DEBT | ||
(In millions of euros) | End of March 2021 | End of December 2020 |
Non-current debt | 2,663 | 2,663 |
+ Current debt | 133 | 134 |
- Cash and cash equivalents | 1,494 | 1,587 |
NET DEBT | 1,302 | 1,210 |
+ Hybrid bonds | 700 | 700 |
NET DEBT AND HYBRID BONDS | 2,002 | 1,910 |
WORKING CAPITAL | ||
(In millions of euros) | End of March 2021 | End of December 2020 |
Inventories | 1,006 | 881 |
+ Accounts receivable | 1,377 | 1,131 |
+ Other receivables including income taxes | 250 | 233 |
+ Other current financial assets | 22 | 40 |
- Accounts payable | 1,085 | 987 |
- Other liabilities including income taxes | 480 | 408 |
- Other current financial liabilities | 19 | 15 |
WORKING CAPITAL | 1,071 | 875 |
CAPITAL EMPLOYED | ||
(In millions of euros) | End of March 2021 | End of December 2020 |
Goodwill, net | 1,943 | 1,933 |
+ Intangible assets (excluding goodwill), and property, plant and equipment, net | 4,375 | 4,261 |
+ Investments in equity affiliates | 30 | 29 |
+ Other investments and other non-current assets | 275 | 266 |
+ Working capital | 1,071 | 875 |
CAPITAL EMPLOYED | 7,694 | 7,364 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210505006093/en/
Contacts:
INVESTOR RELATIONS CONTACTS
Béatrice Zilm +33 1 49 00 75 58 beatrice.zilm@arkema.com
Peter Farren +33 1 49 00 73 12 peter.farren@arkema.com
Mathieu Briatta +33 1 49 00 72 07 mathieu.briatta@arkema.com
Caroline Chung +33 1 49 00 74 37 caroline.chung@arkema.com
MEDIA CONTACT
Gilles Galinier +33 1 49 00 70 07 gilles.galinier@arkema.com
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