Arkema (AKE) Q1 2025 earnings summary

Executive summary

• Q1 2025 sales rose 1.7% year-over-year to €2.4 billion, with stable volumes and strong growth in High Performance Polymers, especially in Asia, while demand remained weak in Europe and North America.

• Specialty materials, representing 93% of sales, showed resilience with only a 3% EBITDA decline year-over-year, while Intermediates EBITDA fell nearly 40% due to weak refrigerant gases.

• Integration of Dow's laminating adhesives contributed to sales growth and is progressing well, but had a dilutive effect on margins; expected to generate significant synergies over five years.

• Major organic projects, including the 1233zd unit in the U.S., polyamide 11 plant in Singapore, and PVDF capacity expansion in Kentucky, are ramping up and expected to contribute more in H2 and beyond.

• Adjusted net income was €99 million (€1.31 per share), down 28.3% year-over-year.

Financial highlights

• Q1 2025 revenue was €2,381 million (+1.7% YoY); EBITDA was €329 million (-6% YoY); EBITDA margin was 13.8%, including a 50 bps dilutive effect from Dow's adhesives.

• Recurring operating income (REBIT) was €160 million (margin 6.7%), down 20.8% year-over-year.

• Adjusted net income was €99 million (-28.3% YoY); recurring cash flow was -€138 million, reflecting seasonal working capital outflow.

• Free cash flow was negative €155 million, including €17 million non-recurring outflow.

• Working capital at 17.4% of annualized sales at end March 2025, slightly up year-over-year.

Outlook and guidance

• 2025 EBITDA is targeted to be at least equal to 2024 at constant FX, with recurring cash flow guided close to €600 million, barring major global slowdown from tariffs.

• Q2 expected to show similar trends as Q1, with continued regional contrasts and FX headwinds; H2 anticipated to improve due to project ramp-ups and potential demand rebound.

• Ongoing focus on cost control, operational agility, and innovation in Specialty Materials.