Arkema (AKE) Q3 2024 earnings summary

Executive summary

• Q3 2024 sales rose 2.9% year-over-year to €2,394 million, with volumes up 2.2% despite weak global demand, especially in Europe.

• EBITDA increased 5.4% to €407 million, with a margin of 17.0%, driven by strong growth in Specialty Materials and resilience in the US and Asia.

• Adjusted net income was €168 million (€2.25 per share), down 5.1% year-over-year, and net debt was tightly controlled at €3.1 billion, or 2.0x EBITDA.

• Major organic projects ramped up, including the restart of the Singapore polyamide 11 plant and new U.S. capacity investments.

• Progress continued on the CSR roadmap, notably reducing the carbon footprint of bio-based polyamide 11 by 80% compared to fossil-based alternatives.

Financial highlights

• Q3 2024 sales reached €2,394 million (+2.9% year-over-year); EBITDA: €407 million (+5.4%); EBITDA margin: 17.0%.

• Recurring EBIT was flat at €246 million; adjusted net income was €168 million (€2.25 per share).

• Recurring cash flow reached €190 million; free cash flow was €175 million for the quarter.

• Working capital at 16.4% of annualized sales at end-September 2024.

• Net debt at €3.1 billion, with a net debt/EBITDA ratio of 2.0x and average debt maturity of 4.3 years (excluding hybrids), average coupon 2.2%.

Outlook and guidance

• 2024 EBITDA is expected at the lower end of the €1.53 billion guidance range, with continued weak macroeconomic conditions and limited visibility.

• Focus remains on strict cost, capex, and working capital management, with ongoing ramp-up of growth projects and integration of Dow's flexible packaging adhesives business.

• 2025 and beyond: 12 major projects, nearly fully financed, are expected to add €100 million EBITDA annually, totaling €440–640 million by 2028.

• CapEx for 2024 is forecast at €770 million, with 2025 CapEx reduced to €650–700 million due to slower EV market development.