Arkema, Full year 2016 results

February 2017

The Group achieved an excellent 4th quarter driven by excellent growth in volumes. For the year as a whole, financial performance was significantly up and cash generation was high

• EBITDA at a new record high of €1,189 million (+12.5% over last year), up significantly in each of the three business divisions
• Volumes up by +3.2% driven by innovation and Asia
• Significant increase in EBITDA margin to 15.8 % (13.8% in 2015)
• Adjusted net income +34% up, representing €5.56 per share
• Strong cash generation with +€426 million free cash flow*
• Gearing well under control at 35%, identical to last year despite Den Braven acquisition
• Proposed dividend increase of 8% at €2.05 per share
• 2017 outlook fully in line with the ambitious target announced in 2014

*Cash flow from operations and investments excluding the impact of portfolio management.

The Board of Directors of Arkema met on 27 February 2017 to close the Group’s consolidated accounts for 2016 and the annual financial statements of the parent company. At the close of the meeting, Chairman and CEO Thierry Le Hénaff stated:

“The Group achieved an excellent 4th quarter driven by excellent growth in volumes. For the year as a whole, financial performance was significantly up and cash generation was high.

These performances benefit from the projects implemented in recent years, and reflect the Group’s profile shift towards specialty chemicals and advanced materials. The swift and successful integration of Bostik has enabled us to achieve one year ahead of schedule the EBITDA growth target we had set ourselves for this acquisition and the acquisition of Den Braven represents a further growth milestone in adhesives.

Our ongoing efforts to develop innovative solutions in new materials are paying off with many commercial successes, in particular in Technical Polymers. Finally, growth in volumes has benefited from our balanced geographic positioning, with a strong presence in North America and in Asia which together account for some 60% of our sales.

The quality of the new Arkema profile, the growth catalysts in place, the management’s track record since the stock market listing ten years ago, and the Group’s solid financial structure are strong assets to continue creating value over the long term.”

2017 outlook
In 2017, the macroeconomic environment should remain characterized by moderate global growth, mixed dynamics by region, and volatility in energy prices, raw materials and currencies. Market conditions in acrylic monomers should gradually improve while PMMA should start to normalize in the second half of the year.

Over the year, Arkema will benefit in particular from the integration of Den Braven, innovation in materials and downstream acrylics and elements of progress in certain fluorogases. The Group will increase its selling prices to reflect higher raw materials. Finally, it will pursue its operational excellence initiatives aimed at offsetting part of the inflation on fixed costs.

Taking into account these elements and assuming a global macroeconomic environment comparable to that of 2016, the Group confirms its ambition announced in 2014 to achieve €1.3 billion EBITDA in 2017.