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.

• EBITDA declined 6% to €329 million, with a margin of 13.8%; Specialty Materials showed resilience, but Intermediates EBITDA fell nearly 40% due to refrigerant gases.

• Adjusted net income was €99 million (€1.31 per share), down 28.3% year-over-year; net debt and hybrid bonds totaled just over €3.4 billion, with a net debt/EBITDA ratio of 2.3x.

• Integration of Dow's laminating adhesives contributed to sales growth but diluted margins; major organic projects, including the Singapore polyamide 11 plant and U.S. PVDF expansion, are progressing.

Financial highlights

• Q1 2025 sales reached €2,381 million (+1.7% YoY); EBITDA: €329 million (-6% YoY); EBITDA margin: 13.8% (down from 15.0%).

• Recurring operating income (REBIT): €160 million (-20.8% YoY); REBIT margin: 6.7%.

• Adjusted net income: €99 million (-28.3% YoY); recurring cash flow: -€138 million; free cash flow: -€155 million.

• Net debt and hybrid bonds at just over €3.4 billion, with a net debt/EBITDA ratio of 2.3x at end-March 2025.

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

Outlook and guidance

• 2025 EBITDA is targeted to be at least equal to last year at constant exchange rates, with recurring cash flow close to €600 million, assuming no major global slowdown.

• Q2 expected to show similar trends as Q1: weak demand in Europe and North America, continued strength in Asia, and ongoing FX and tariff headwinds.

• H2 is expected to improve, driven by project ramp-ups, restocking, and potential demand rebound as geopolitical uncertainties stabilize.

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