In an economic environment that was in line with that of
recent quarters and marked by weak demand in most end markets,
Arkema’s margin held up well, benefiting from the Group’s
repositioning toward Specialty Materials. Arkema furthermore
confirms its guidance for 2023.
Regulatory News:
Arkema (Paris:AKE):
- Sales of €2.4 billion, down by 23% compared with
the particularly high level of Q2’22:
- Volumes down significantly, impacted by overall weak demand in
most end markets and continued destocking. The automotive, battery
and energy markets nevertheless remained well oriented
- Price effect positive in most product lines but negative at the
Group level given, as in the first quarter, the normalization of
PVDF and upstream acrylics
- Positive momentum in high performance solutions driven by
sustainability trends, which are at the heart of the Group’s
strategy
- EBITDA of €417 million, down compared with the
exceptionally high performance of Q2’22 (€705 million). EBITDA
margin reached a very good level at 17.1%, demonstrating the
quality of the product portfolio and dynamic price and mix
management
- Adjusted net income of €207 million, representing
€2.77 per share (€5.99 in Q2’22)
- Recurring cash flow of €145 million, reflecting
the robust results and including the seasonality of working
capital
- Net debt including hybrid bonds up slightly to €2,645
million, integrating the dividend payment and representing
1.7x last-twelve-months EBITDA
- Strengthening of the Group’s specialty profile with the
announcement on 28 June of the proposed acquisition of a
controlling stake in PI Advanced Materials (1), a global
leader in ultra-high performance polyimide films based in South
Korea
- 2023 guidance confirmed, with Arkema aiming to achieve
EBITDA of around €1.5 billion to €1.6 billion
Following Arkema’s Board of Directors’ meeting held on 27 July
2023 to approve the Group’s consolidated financial statements for
the first half of 2023, Chairman and CEO Thierry Le Hénaff
said:
“In the second quarter, in an environment marked by a low level
of activity in the continuity of the first quarter, Arkema’s
performance was solid, reflecting the Group’s excellent positioning
in high performance niche markets, as well as tight management of
our operations. The teams delivered high-quality work, enabling us
to confirm our annual targets in a macroeconomic context with low
visibility that is showing little signs of improvement.
In addition, with the proposed acquisition of 54% of PI Advanced
Materials announced in late June, Arkema has taken another major
step towards its ambition of becoming a world leader in Specialty
Materials. This unique opportunity, which will offer the Group
significant synergies thanks to strong geographical and
technological complementarities, will enable us to accelerate our
growth in the highly attractive electronics and battery
markets.
Our Capital Markets Day, to be held in Paris on 27 September,
will provide an opportunity to discuss Arkema’s innovation strategy
and medium-term ambition in greater detail.”
______________________________ (1) This operation is subject to
the approval of Chinese and Korean anti-trust authorities
KEY FIGURES
in millions of euros
Q2'23
Q2'22
Change
H1'23
H1'22
Change
Sales
2,442
3,184
-23.3%
4,966
6,071
-18.2%
EBITDA
417
705
-40.9%
784
1,324
-40.8%
Specialty
Materials
368
600
-38.7%
715
1,156
-38.1%
Intermediates
69
129
-46.5%
118
223
-47.1%
Corporate
-20
-24
-49
-55
EBITDA margin
17.1%
22.1%
15.8%
21.8%
Specialty
Materials
16.6%
21.0%
15.8%
21.2%
Intermediates
32.5%
40.1%
27.4%
37.6%
Recurring operating income (REBIT)
285
570
-50.0%
519
1,058
-50.9%
REBIT margin
11.7%
17.9%
10.5%
17.4%
Adjusted net income
207
443
-53.3%
369
819
-54.9%
Adjusted net income per share (in €)
2.77
5.99
-53.8%
4.94
11.07
-55.4%
Recurring cash flow
145
235
-38.3%
124
261
-52.5%
Free cash flow
115
211
-45.5%
69
188
-63.3%
Net debt including hybrid bonds
2,645
2,789
2,645
2,789
€2,366m as of 31/12/2022
(*) As of 1 January 2022, the
fluorospecialties activity is consolidated in the Advanced
Materials segment (High Performance Polymers Business Line)
instead of the Intermediates segment. 2021 data have been adjusted
to take into account this modification.
SECOND-QUARTER 2023 BUSINESS PERFORMANCE
At €2,442 million, sales were down by 23.3%
relative to the particularly elevated level of second-quarter 2022.
Group volumes declined by 15.2% in an environment marked by
continued destocking and overall weak demand, particularly in
Europe and the United States. Most end markets were down, although
the energy, automotive, medical and battery markets showed positive
momentum. The price effect was a negative 6.6%, impacted by the
expected normalization of market conditions in PVDF and upstream
acrylics, but it was positive in most other product lines,
reflecting the strength of Arkema’s positions. The scope effect was
limited (+0.4%), with the integrations of Permoseal and Polytec PT
in Adhesive Solutions and of Polimeros Especiales in Coating
Solutions offset by the divestment of Febex in early January 2023.
The currency effect was a negative 1.9%, primarily reflecting a
stronger euro against the US dollar.
At €417 million, EBITDA was down relative to the prior
year (€705 million in Q2’22), which included exceptional profits in
PVDF and upstream acrylics. This figure also reflects the general
economic slowdown and the benefits from easing tightness in raw
materials. Despite significantly lower volumes, the EBITDA
margin held up well at 17.1%, supported in particular by
dynamic price management and an improved mix toward higher
value-added solutions.
Including virtually stable recurring depreciation and
amortization of €132 million (€135 million Q2’22), recurring
operating income (REBIT) amounted to €285 million (€570
million in Q2’22), and REBIT margin reached 11.7% (17.9% in
Q2’22).
Adjusted net income came to €207 million (€443
million in Q2’22), representing €2.77 per share, based on a
tax rate, excluding exceptional items, of 21% of recurring
operating income.
CASH FLOW AND NET DEBT AT 30 JUNE 2023
In second-quarter 2023, recurring cash flow came to
€145 million (€235 million in Q2’22). This figure reflects
the Group’s solid operating performance and includes a limited
increase in working capital, in a context of decreasing raw
material costs and weak activity. At end-June 2023, working capital
represented 16.9% of annualized sales (14.9% at end-June 2022).
Recurring cash flow also included recurring capital expenditure of
€130 million versus €99 million in the prior-year period.
At €115 million, free cash flow included
exceptional capital expenditure of €5 million (€26 million in
Q2’22), as well as a non-recurring cash outflow of €25 million
linked mainly to start-up costs for the Singapore plant and
restructuring costs.
The net cash outflow from portfolio management operations
of €69 million in second-quarter 2023 corresponds mainly to the
acquisition of Polytec PT in high performance adhesives.
At €2,645 million, net debt including
hybrid bonds was slightly higher than at end-March 2023 (€2,389
million) and included the dividend payment of €3.40 per share for a
total of €253 million. Arkema’s balance sheet remains solid, with
net debt (including hybrid bonds) to last-twelve-months EBITDA
ratio standing at 1.7x. In this context, on 6 July 2023, credit
rating agency Standard & Poor’s raised the outlook associated
to the Group’s rating from ‘stable’ to ‘positive’ while confirming
its rating of BBB+/A-2.
Moreover, on 5 July 2023, the Group extended its €1.1 billion
syndicated line of credit by one year, with maturity now on 28 July
2028.
SECOND-QUARTER 2023 PERFORMANCE BY SEGMENT
ADHESIVE SOLUTIONS (28.5% OF TOTAL GROUP SALES)
in millions of euros
Q2'23
Q2'22
Change
Sales
692
779
-11.2%
EBITDA
95
111
-14.4%
EBITDA margin
13.7%
14.2%
Recurring operating income (REBIT)
75
92
-18.5%
REBIT margin
10.8%
11.8%
Sales in the Adhesive Solutions segment totaled €692
million, down by 11.2% compared to second-quarter 2022. In the
continuity of the first quarter, sales were impacted by a 12.7%
volume decrease, reflecting continued destocking and overall weaker
demand in most end markets, with the exception of the automotive
market which was better oriented. The price effect was a positive
2.3% and reflects the price increases implemented last year in
response to cost inflation. The scope effect, which added 1.9% to
sales, corresponds to the integration of Permoseal and, to a lesser
extent, Polytec PT. The currency effect was a negative 2.7%.
EBITDA for the segment came in at €95 million
(€111 million in Q2’22), impacted mainly by the decline in volumes,
but benefiting nevertheless from the shift in the product mix
towards higher value-added solutions and the raw material costs
decrease at the end of the quarter. In this context, the EBITDA
margin held up well at 13.7% (14.2% in Q2’22).
ADVANCED MATERIALS (37.5% OF TOTAL GROUP SALES)
in millions of euros
Q2'23
Q2'22
Change
Sales
912
1,113
-18.1%
EBITDA
185
282
-34.4%
EBITDA margin
20.3%
25.3%
Recurring operating income (REBIT)
117
215
-45.6%
REBIT margin
12.8%
19.3%
Sales in the Advanced Materials segment were down by
18.1% compared to second-quarter 2022 to €912 million.
Segment volumes fell by 8.1%, essentially in Performance Additives,
impacted by destocking and lower demand. Volumes of High
Performance Polymers rose, driven in particular by demand in the
automotive and energy markets, as well as by improved momentum in
batteries in China following the destocking observed at the start
of the year. The price effect of negative 7.1% reflects the
expected normalization of PVDF in batteries, which overshadowed a
positive trend in the segment’s other activities linked to the
pricing policy implemented since last year in the face of
inflation, as well as a positive product mix supported by new
developments. The scope effect was a negative 1.1%, linked to the
divestment of Febex, and the currency effect was a negative
1.8%.
At €185 million, EBITDA for the segment was down
compared with the prior year’s very high comparison base (€282
million in Q2’22, €184 million in Q2’21), which was linked to
exceptionally favorable conditions in PVDF for batteries. Although
impacted by sharply lower volumes, Performance Additives’ EBITDA
was stable, reflecting the quality and resilience of the portfolio.
In this context, the segment’s EBITDA margin reached a good
level of 20.3%, supported by the positive momentum in high
performance solutions.
COATING SOLUTIONS (25% OF TOTAL GROUP SALES)
in millions of euros
Q2'23
Q2'22
Change
Sales
617
960
-35.7%
EBITDA
88
207
-57.5%
EBITDA margin
14.3%
21.6%
Recurring operating income (REBIT)
58
175
-66.9%
REBIT margin
9.4%
18.2%
Sales in the Coating Solutions segment were down by a
sharp 35.7% compared with the very high comparison base of
second-quarter 2022 and amounted to €617 million. In
a context of falling overall demand in Europe and the United
States, volumes were down by 22.9%, also penalized by the effects
of destocking in decorative paints and industrial markets. The
12.7% negative price effect mainly reflects markedly less favorable
conditions in upstream acrylics. The scope effect was a positive
0.9%, corresponding to the integration of Polimeros Especiales, and
the currency effect was a negative 1.0%.
In this context, segment EBITDA fell sharply and amounted
to €88 million (€207 million in Q2’22), impacted above all
by the normalization of market conditions in upstream acrylics and
by sharply lower volumes, while downstream activities proved far
more resilient. The EBITDA margin held up well given the
economic context, coming in at 14.3%.
INTERMEDIATES (9% OF TOTAL GROUP SALES)
in millions of euros
Q2'23
Q2'22
Change
Sales
212
322
-34.2%
EBITDA
69
129
-46.5%
EBITDA margin
32.5%
40.1%
Recurring operating income (REBIT)
57
114
-50.0%
REBIT margin
26.9%
35.4%
Sales in Intermediates fell by 34.2% to €212
million. Volumes were down by 23.3%, impacted in particular by
weak demand for acrylics in China. The 8.4% negative price effect
reflects markedly less favorable market conditions in acrylics in
Asia, offset in part by positive price dynamics in refrigerant
gases. The currency effect was a negative 2.5%.
In this context, segment EBITDA amounted to €69
million (€129 million in Q2’22) and the EBITDA margin
reached 32.5% (40.1% in Q2’22).
SECOND-QUARTER 2023 HIGHLIGHTS
On 1 June 2023, Arkema finalized the acquisition of Polytec PT,
a German company specialized in adhesives for batteries and
electronics applications, which will strengthen Bostik’s product
offering to serve these fast-growing markets.
Moreover, on 28 June 2023, Arkema announced the proposed
acquisition of Glenwood Private Equity’s 54% stake in the listed
South Korean company PI Advanced Materials (PIAM), for an
enterprise value of €728 million, marking a new significant
milestone in the Group’s transformation into a pure Specialty
Materials player. With sales of over €200 million, an EBITDA margin
of around 30% and best-in-class manufacturing, PIAM is the global
leader in polyimide films, delivering superior growth in the
attractive consumer electronics and electric vehicles markets. This
transaction will broaden Arkema’s polymer range with ultra-high
performance and cutting-edge technology, strengthening the Advanced
Materials segment’s portfolio and performance. The deal, which is
subject to the approval of Chinese and Korean anti-trust
authorities, should be finalized end-2023.
OUTLOOK FOR 2023
In a macroeconomic environment which is in line with that of the
first six months of the year, volumes remain sharply lower than
last year with reduced visibility at the start of the second half.
The price of certain raw materials and energy continues to
decrease.
In this context, the Group will strive to continue tightly
managing its operations, in particular by controlling fixed costs
and optimizing working capital. It will also continue its
innovation drive in high-growth areas linked to sustainability, and
ramp up recently started growth capital expenditure projects.
In this environment, in light of its first-half results and
based on the projected momentum in the second half, Arkema confirms
its full-year guidance and aims to achieve in 2023 EBITDA of around
€1.5 billion to €1.6 billion. Furthermore, the Group expects a high
EBITDA to cash conversion rate over the year, consistent with its
medium-term target of at least 40%.
Further details concerning the Group’s second-quarter 2023
results are provided in the “Second-quarter 2023 results and
outlook” presentation and the “Factsheet”, both available on
Arkema’s website at:
www.arkema.com/global/en/investor-relations/
REGULATORY INFORMATION
The half-year financial report for the six months ended 30 June
2023 is available on the Group’s website (www.arkema.com) under
Investors/Financials/Financial results.
FINANCIAL CALENDAR
27 September 2023: 2023 Capital Markets Day
9 November 2023: Publication of third-quarter 2023 results
29 February 2024: Publication of full-year 2023 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 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, 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 condensed consolidated financial statements
at 30 June 2023 as approved by Arkema’s Board of Directors on 27
July 2023. 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 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.
Follow us on: Twitter.com/Arkema_group
Linkedin.com/company/arkema
ARKEMA financial statements
Consolidated financial information - At the
end of June 2023
Half-year information is subject to a limited
review by auditors.
Consolidated financial statements as of
December 2022 have been audited.
CONSOLIDATED INCOME STATEMENT
2nd quarter 2023
2nd quarter 2022
(In millions of euros)
Sales
2,442
3,184
Operating expenses
(1,900)
(2,350)
Research and development expenses
(66)
(67)
Selling and administrative expenses
(223)
(218)
Other income and expenses
(32)
(35)
Operating income
221
514
Equity in income of affiliates
(2)
(0)
Financial result
(16)
(6)
Income taxes
(51)
(106)
Net income
152
402
Attributable to non-controlling interests
0
1
Net income - Group share
152
401
Earnings per share (amount in euros)
2.03
5.42
Diluted earnings per share (amount in euros)
2.03
5.40
1st half 2023
1st half 2022
(In millions of euros)
Sales
4,966
6,071
Operating expenses
(3,922)
(4,485)
Research and development expenses
(136)
(133)
Selling and administrative expenses
(452)
(435)
Other income and expenses
(39)
(70)
Operating income
417
948
Equity in income of affiliates
(5)
(1)
Financial result
(35)
(14)
Income taxes
(92)
(201)
Net income
285
732
Attributable to non-controlling interests
1
2
Net income - Group share
284
730
Earnings per share (amount in euros)
3.73
9.80
Diluted earnings per share (amount in euros)
3.72
9.76
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
2nd quarter 2023
2nd quarter 2022
(In millions of euros)
Net
income
152
402
Hedging adjustments
(20)
17
Other items
-
-
Deferred taxes on hedging adjustments and other items
0
(3)
Change in translation adjustments
(53)
237
Other recyclable comprehensive income
(73)
251
Impact of remeasuring unconsolidated investments
-
-
Actuarial gains and losses
(3)
65
Deferred taxes on actuarial gains and losses
1
(10)
Other non-recyclable comprehensive income
(2)
55
Autres éléments du résultat global
(75)
306
Autres éléments du résultat global des activités abandonnées
-
-
Total income and expenses recognized directly in equity
(75)
306
Total comprehensive income
77
708
Attributable to non-controlling interest
(2)
2
Total comprehensive income - Group share
79
706
1st half 2023
1st half 2022
(In millions of euros)
Net
income
285
732
Hedging adjustments
(38)
16
Other items
0
-
Deferred taxes on hedging adjustments and other items
2
(3)
Change in translation adjustments
(143)
327
Other recyclable comprehensive income
(179)
340
Impact of remeasuring unconsolidated investments
-
(1)
Actuarial gains and losses
(7)
115
Deferred taxes on actuarial gains and losses
1
(19)
Other non-recyclable comprehensive income
(6)
95
Total income and expenses recognized directly in equity
(185)
435
Total comprehensive income
100
1,167
Attributable to non-controlling interest
(1)
3
Total comprehensive income - Group share
101
1,164
INFORMATION BY SEGMENT
2nd quarter 2023 (In millions of euros)
Adhesive Solutions
Advanced Materials
Coating Solutions
Intermediates
Corporate
Total
Sales
692
912
617
212
9
2,442
EBITDA
95
185
88
69
(20)
417
Recurring depreciation and amortization of property, plant and
equipment and intangible assets
(20)
(68)
(30)
(12)
(2)
(132)
Recurring operating income (REBIT)
75
117
58
57
(22)
285
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
(26)
(3)
(3)
-
-
(32)
Other income and expenses
(5)
(26)
0
0
(1)
(32)
Operating income
44
88
55
57
(23)
221
Equity in income of affiliates
-
(2)
-
-
-
(2)
Intangible assets and
property, plant, and equipment additions
18
85
25
5
2
135
Of which: recurring capital expenditure
18
80
25
5
2
130
2nd quarter 2022 (In millions of euros)
Adhesive Solutions
Advanced Materials
Coating Solutions
Intermediates
Corporate
Total
Sales
779
1,113
960
322
10
3,184
EBITDA
111
282
207
129
(24)
705
Recurring depreciation and amortization of property, plant and
equipment and intangible assets
(19)
(67)
(32)
(15)
(2)
(135)
Recurring operating income (REBIT)
92
215
175
114
(26)
570
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
(15)
(5)
(1)
-
-
(21)
Other income and expenses
(14)
(19)
(0)
(2)
0
(35)
Operating income
63
191
174
112
(26)
514
Equity in income of affiliates
-
(0)
-
(0)
-
(0)
Intangible assets and
property, plant, and equipment additions
12
84
24
3
2
125
Of which: recurring capital expenditure
12
58
24
3
2
99
INFORMATION BY SEGMENT
End of June
2023 (In millions of euros)
Adhesive Solutions
Advanced Materials
Coating Solutions
Intermediates
Corporate
Total
Sales
1,390
1,849
1,278
430
19
4,966
EBITDA
188
345
182
118
(49)
784
Recurring depreciation and amortization of property, plant and
equipment and intangible assets
(41)
(135)
(61)
(25)
(3)
(265)
Recurring operating income (REBIT)
147
210
121
93
(52)
519
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
(51)
(8)
(4)
-
-
(63)
Other income and expenses
(12)
(16)
(1)
0
(10)
(39)
Operating income
84
186
116
93
(62)
417
Equity in income of affiliates
-
(5)
-
-
-
(5)
Intangible assets and
property, plant, and equipment additions
33
137
39
8
7
224
Of which: recurring capital expenditure
33
125
39
8
7
212
End of June 2022 (In millions of euros)
Adhesive Solutions
Advanced Materials
Coating Solutions
Intermediates
Corporate
Total
Sales
1,449
2,188
1,822
593
19
6,071
EBITDA
201
556
399
223
(55)
1,324
Recurring depreciation and amortization of property, plant and
equipment and intangible assets
(36)
(134)
(63)
(30)
(3)
(266)
Recurring operating income (REBIT)
165
422
336
193
(58)
1,058
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
(28)
(9)
(3)
—
—
(40)
Other income and expenses
(32)
(22)
(0)
(2)
(14)
(70)
Operating income
105
391
333
191
(72)
948
Equity in income of affiliates
—
(1)
—
0
—
(1)
Intangible assets and
property, plant, and equipment additions
27
160
39
5
6
237
Of which: recurring capital expenditure
27
94
39
5
6
171
CONSOLIDATED CASH FLOW STATEMENT
End of
June 2023
End of
June 2022
(In millions of euros)
Operating cash flows
Net income
285
732
Depreciation, amortization and impairment of assets
334
326
Other provisions and deferred taxes
(26)
(22)
(Gains)/losses on sales of long-term assets
(28)
(4)
Undistributed affiliate equity earnings
5
2
Change in working capital
(164)
(518)
Other changes
11
15
Cash flow from operating activities
417
531
Investing cash
flows Intangible assets and
property, plant, and equipment additions
(224)
(237)
Change in fixed asset payables
(124)
(99)
Acquisitions of operations, net of cash acquired
(65)
(1,493)
Increase in long-term loans
(33)
(40)
Total expenditures
(446)
(1,869)
Proceeds from sale of intangible assets and
property, plant, and equipment
7
6
Proceeds from sale of operations, net of cash transferred
32
-
Repayment of long-term loans
20
13
Total divestitures
59
19
Cash flow from investing
activities
(387)
(1,850)
Financing cash
flows Issuance (repayment)
of shares and paid-in surplus
0
-
Purchase of treasury shares
(23)
(2)
Dividends paid to parent company shareholders
(253)
(222)
Interest paid to bearers of subordinated perpetual notes
(5)
(5)
Dividends paid to non-controlling interests and buyout of minority
interests
(2)
(1)
Increase in long-term debt
396
3
Decrease in long-term debt
(42)
(37)
Increase / (Decrease) in short-term debt
(34)
648
Cash flow from financing
activities
37
384
Net increase/(decrease) in cash and cash
equivalents
67
(935)
Effect of exchange rates and changes in scope
7
(8)
Cash and cash equivalents at beginning of period
1,592
2,285
Cash and cash equivalents at end or the
period
1,666
1,342
CONSOLIDATED BALANCE SHEET
30 June
2023
31
December 2022
(In millions of euros)
ASSETS
Goodwill
2,676
2,655
Intangible assets, net
2,109
2,178
Property, plant and equipment, net
3,364
3,429
Equity affiliates: investments and loans
18
24
Other investments
52
52
Deferred tax assets
163
166
Other non-current assets
256
245
TOTAL NON-CURRENT ASSETS
8,638
8,749
Inventories
1,379
1,399
Accounts receivable
1,460
1,360
Other receivables and prepaid expenses
218
202
Income tax receivables
112
130
Other current financial assets
43
57
Cash and cash equivalents
1,666
1,592
Assets held for sale
—
22
TOTAL CURRENT ASSETS
4,878
4,762
TOTAL ASSETS
13,516
13,511
LIABILITIES AND SHAREHOLDERS' EQUITY
Share capital
750
750
Paid-in surplus and retained earnings
6,214
6,218
Treasury shares
(43)
(20)
Translation adjustments
211
352
SHAREHOLDERS' EQUITY - GROUP
SHARE
7,132
7,300
Non-controlling interests
39
39
TOTAL SHAREHOLDERS' EQUITY
7,171
7,339
Deferred tax liabilities
354
362
Provisions for pensions and other employee benefits
389
382
Other provisions and non-current liabilities
429
458
Non-current debt
2,951
2,560
TOTAL NON-CURRENT LIABILITIES
4,123
3,762
Accounts payable
998
1,149
Other creditors and accrued liabilities
424
437
Income tax payables
88
109
Other current financial liabilities
52
13
Current debt
660
698
Liabilities related to assets held for sale
-
4
TOTAL CURRENT LIABILITIES
2,222
2,410
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY
13,516
13,511
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 2023
75,043,514
750
1,067
700
4,451
352
(231,087)
(20)
7,300
39
7,339
Cash dividend
-
-
-
-
(258)
-
-
-
(258)
(1)
(259)
Issuance of share capital
-
-
-
-
-
-
-
-
-
-
-
Capital decrease by cancellation of treasury shares
-
-
-
-
-
-
-
-
-
-
-
Purchase of treasury shares
-
-
-
-
-
-
(257,726)
(23)
(23)
-
(23)
Grants of treasury shares to employees
-
-
-
-
0
-
1,185
0
-
-
-
Sale of treasury shares
-
-
-
-
-
-
-
-
-
-
-
Share-based payments
-
-
-
-
12
-
-
-
12
-
12
Issuance of hybrid bonds
-
-
-
-
-
-
-
-
-
-
-
Redemption of hybrid bonds
-
-
-
-
-
-
-
-
-
-
-
Other
-
-
-
-
-
-
-
-
-
2
2
Transactions with shareholders
-
-
-
-
(246)
-
(256,541)
(23)
(269)
1
(268)
Net income
-
-
-
-
284
-
-
-
284
1
285
Total income and expense recognized directly through equity
-
-
-
-
(42)
(141)
-
-
(183)
(2)
(185)
Comprehensive income
-
-
-
-
242
(141)
-
-
101
(1)
100
At 30 June 2023
75,043,514
750
1,067
700
4,447
211
(487,628)
(43)
7,132
39
7,171
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)
End of
June 2023
End of
June 2022
2nd quarter 2023
2nd quarter 2022
OPERATING INCOME
417
948
221
514
- Depreciation and amortization related to the revaluation of
tangible and intangible assets as part of the allocation of the
purchase price of businesses
(63)
(40)
(32)
(21)
- Other income and expenses
(39)
(70)
(32)
(35)
RECURRING OPERATING INCOME (REBIT)
519
1,058
285
570
- Recurring depreciation and amortization of tangible and
intangible assets
(265)
(266)
(132)
(135)
EBITDA
784
1,324
417
705
Details of depreciation and
amortization of tangible and intangible assets:
(In
millions of euros)
End of
June 2023
End of
June 2022
2nd quarter 2023
2nd quarter 2022
Depreciation and amortization
of tangible and intangible assets
(334)
(326)
(170)
(172)
Of which: Recurring depreciation and amortization of tangible
and intangible assets
(265)
(266)
(132)
(135)
Of which: Depreciation and amortization related to the
revaluation of assets as part of the allocation of the purchase
price of businesses
(63)
(40)
(32)
(21)
Of which: Impairment included in other income and expenses
(6)
(20)
(6)
(16)
ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER
SHARE (In millions of
euros)
End of
June 2023
End of
June 2022
2nd quarter 2023
2nd quarter 2022
NET INCOME - GROUP SHARE
284
730
152
401
- Depreciation and amortization related to the revaluation of
tangible and intangible assets as part of the allocation of the
purchase price of businesses
(63)
(40)
(32)
(21)
- Other income and expenses
(39)
(70)
(32)
(35)
- 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
13
8
7
4
- Taxes on other income and expenses
8
7
4
4
- One-time tax effects
(4)
6
(2)
6
ADJUSTED NET INCOME
369
819
207
443
- Weighted average number of ordinary shares
74,716,206
73,954,187
-
-
- Weighted average number of potential ordinary shares
75,043,514
74,286,041
-
-
ADJUSTED EARNINGS PER SHARE (in euros)
4.94
11.07
2.77
5.99
DILUTED ADJUSTED EARNINGS PER SHARE (in euros)
4.92
11.02
2.76
5.96
RECURRING CAPITAL EXPENDITURE
(In millions of euros)
End of
June 2023
End of
June 2022
2nd quarter 2023
2nd quarter 2022
INTANGIBLE ASSETS AND PROPERTY, PLANT, AND EQUIPMENT
ADDITIONS
224
237
135
125
- Exceptional capital expenditure
12
66
5
26
- Investments relating to portfolio management operations
-
-
-
-
- Capital expenditure with no impact on net debt
-
0
0
0
RECURRING CAPITAL EXPENDITURE
212
171
130
99
CASH FLOWS
(In millions of euros)
End of
June 2023
End of
June 2022
2nd quarter 2023
2nd quarter 2022
Cash flow from operating
activities
417
531
274
381
+ Cash flow from investing activities
(387)
(1,850)
(228)
(181)
NET CASH FLOW
30
(1,319)
46
200
- Net cash flow from portfolio management operations
(39)
(1,507)
(69)
(11)
FREE CASH FLOW
69
188
115
211
Exceptional capital expenditure
(12)
(66)
(5)
(26)
- Non-recurring cash flow
(43)
(7)
(25)
2
RECURRING CASH FLOW
124
261
145
235
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
June 2023
End of
December 2022
Non-current debt
2,951
2,560
+ Current debt
660
698
- Cash and cash equivalents
1,666
1,592
NET DEBT
1,945
1,666
+ Hybrid bonds
700
700
NET DEBT AND HYBRID BONDS
2,645
2,366
WORKING CAPITAL
(In millions of euros)
End of
June 2023
End of
December 2022
Inventories
1,379
1,399
+ Accounts receivable
1,460
1,360
+ Other receivables including income taxes
330
332
+ Other current financial assets
43
57
- Accounts payable
998
1,149
- Other liabilities including income taxes
512
546
- Other current financial liabilities
52
13
WORKING CAPITAL
1,650
1,440
CAPITAL EMPLOYED (In millions of euros)
End of
June 2023
End of
December 2022
Goodwill, net
2,676
2,655
+ Intangible assets (excluding goodwill), and property, plant and
equipment, net
5,473
5,607
+ Investments in equity affiliates
18
24
+ Other investments and other non-current assets
308
297
+ Working capital
1,650
1,440
CAPITAL EMPLOYED
10,125
10,023
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230727947416/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 Media contacts Gilles Galinier +33
(0)1 49 00 70 07 gilles.galinier@arkema.com Anne Plaisance +33 (0)6
81 87 48 77 anne.plaisance@arkema.com
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