Arkema presents the new stage of its development at the
Capital Markets Day of 27 September 2023. Building on the
achievements since the April 2020 strategy update, the Group now
aims to accelerate its organic sales growth in the medium term, by
capitalizing on its recent or future industrial investments in high
value-added technological solutions serving fast-growing market
segments supported by sustainable megatrends.
- By 2028, Arkema aims to achieve sales of around €12bn with
an elevated EBITDA margin of around 18%
- Average organic sales growth is expected at around 4% per
year and average organic EBITDA growth at 7 to 8% per year over the
2024-28 period
- Cash generation should remain strong and shareholder returns
increase by 30% over the 2024-28 period versus the prior 5 year
period
- The Group will also capitalize on the recent validation of
its 1.5°C trajectory by SBTi to further strengthen its
decarbonization initiatives, paving the way for Net-Zero by
2050
Regulatory News:
Arkema (Paris:AKE):
Since the April 2020 Strategy Update, the Group has steadfastly
continued its value-creative transformation, nearly completing its
shift into a pure Specialty Materials player thanks to targeted
investments, cutting-edge sustainable innovation and a high
value-added portfolio management strategy. Arkema’s materials
science expertise is now built around the three coherent and
complementary segments of Adhesive Solutions, Advanced Materials,
and Coating Solutions, with an unmatched portfolio of cutting-edge
technologies.
This transformation has generated strong financial returns for
Arkema and enabled the Group to increase structural profitability.
Arkema is thus on track to achieve the ambitious financial targets
it set for 2024, while delivering €1.3bn of shareholder returns
since 2020 via dividends and share buybacks and maintaining strict
financial discipline. Importantly, Arkema has also markedly
improved its corporate social responsibility profile, notably with
an ambitious climate plan aligned with the 1.5°C trajectory
validated by SBTi, as well as improvements in workplace safety and
in promoting diversity within the organization.
Since Covid, disruptive megatrends have accelerated the world’s
transformation, and Arkema is at the forefront of enabling change
toward a more sustainable economy thanks to its high performance,
innovative materials. Building on its successful evolution since
2020, having acquired or built an unparalleled portfolio of
technologies, the Group is now ready to progress to the next level
of its growth trajectory by leveraging its unique position.
Thus, by 2028, Arkema aims to achieve sales of around €12bn with
an elevated EBITDA margin of around 18%, translating into average
organic sales growth of around 4% per year and average organic
EBITDA growth at 7% to 8% per year in the 2024-28 period. The Group
will also maintain its strict financial discipline with a net debt
to EBITDA ratio not greater than 2x.
In order to achieve this ambition, Arkema will place
sustainability at the heart of its strategy through 5 main
drivers:
(i)
Leveraging the strength of One Arkema to
enhance employee empowerment and customer intimacy
(ii)
Achieving superior growth from sustainable
innovation in 5 key submarkets driven by megatrends where Arkema
has built leading positions with cutting-edge technologies
(iii)
Ramping up recent capex, notably the
bio-based PA11 plant in Singapore and PVDF expansions, and carrying
out new high return projects in batteries, renewable energy,
decarbonization and bio-based products
(iv)
Further strengthening the portfolio with
bolt-on acquisitions and the finalization of the divestment of
Intermediates
(v)
Driving manufacturing excellence including
a strong focus on decarbonization and digitalization
Cash generation over the 2024-28 period should remain strong and
the total amount of operating cash flow (1) to allocate is expected
to reach around €7bn, equating to an operating cash conversion rate
(2) at around 70%. The amount returned to shareholders should
increase by around 30% versus the 2019-23 period, including steady
dividend growth leading to a payout ratio of close to 40% over the
2024-28 period, and some opportunistic share buybacks. Net M&A
should represent half of the amount spent during the 2019-23 period
while capex should increase by around 15%, reflecting inflation,
decarbonization efforts and projects to support the Group’s growth
notably in batteries.
The Group will also capitalize on the recent validation of its
1.5°C trajectory by SBTi to further strengthen its decarbonization
initiatives, paving the way for Net-Zero by 2050.
All these elements are detailed in the "Strategy Update - Lead
for sustainable growth" presentation which will be available on the
Company's website: www.finance.arkema.com.
DISCLAIMER
The information disclosed in this document may contain
forward-looking statements with respect to the financial condition,
results of operations, business and strategy of Arkema. In the
current context, where the world economy and the consequences of
the Russian offensive in Ukraine on geopolitical equilibriums
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 material risk factors such as among others, changes in raw
material prices, currency fluctuations, implementation pace of
cost-reduction projects, development of the Russian offensive
against Ukraine, and changes in general economic and business
conditions. These risk factors are further developed in the 2022
Universal Registration Document.
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 2022 Universal Registration
Document and other documents filed with the French Autorité des
marchés financiers.
Financial information since 2006 is extracted from the
consolidated financial statements of Arkema. The business segment
information is presented in accordance with Arkema’s internal
reporting system used by the management.
Besides its IFRS accounts, Arkema also uses alternative
performance indicators to provide a more consistent and comparable
analysis of the Group’s financial performance. Such indicators are
defined in the 2022 Universal Registration Document. In this
document, the Group uses in particular the following
indicators:
EBITDA margin: corresponds to EBITDA as a percentage of
sales, EBITDA equaling recurring operating income (REBIT) plus
recurring depreciation and amortization of tangible and intangible
assets
Operating cash flow: corresponds to free cash flow before
capex (intangible assets and property, plant and equipment
additions)
Operating cash conversion rate: corresponds to operating
cash flow divided by EBITDA
This document contains forward looking information, which
describe expectations, strategies, future events or intentions.
Forecasts and financial objectives are defined in normalized
macroeconomic and market conditions, among other EUR/USD exchange
rate of 1.1, GDP of 3% and oil price at US$80/bbl. The achievement
of these forecasts and financial objectives is therefore subject to
uncertainties regarding these economic factors, as well as
regarding changing market conditions, competitive landscape,
regulatory evolutions, and other unplanned events. As a
consequence, results may differ from those expressed or implied in
this document.
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 91% of Group sales in 2022, 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 €11.5 billion in
2022, and operates in some 55 countries with 21,100 employees
worldwide.
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_______________________________________________ (1) Free cash
flow before capex (intangible assets and property, plant and
equipment additions) (2) Operating cash flow divided by EBITDA
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version on businesswire.com: https://www.businesswire.com/news/home/20230926445443/en/
Investor Relations Contacts: 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
Press Contact: Anne Plaisance +33 (0)6 81 87 48 77
anne.plaisance@arkema.com
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