Arkema unveiled its ambition to become a world leader in Specialty Materials realigned around three businesses: Adhesive Solutions, Advanced Materials, and Coating Solutions at a Strategy Update meeting on April 2.
The Group unveiled its roadmap and its objectives for 2024 at this event.
The Group has decided to align its organization which will now consist of:
- Three divisions that will be reported separately and will include all Arkema Specialty Materials: “Adhesive Solutions”, “Advanced Materials”, and “Coating Solutions”;
- An “Intermediates” division consisting of MMA/PMMA, Fluorogases and Asia Acrylics, consolidating activities with more volatile results and for which the Group will implement differentiated strategies. In particular, the Group will undertake a review of its strategic options for MMA/PMMA, explore possible alternatives to minimize its exposure to the most emissive applications of its Fluorogases, and rebalance its Asia Acrylics business between upstream and downstream;
By 2024, Arkema aims to become a pure Specialty Materials player, with a focused portfolio, characterized by high profitability and strong cash generation. Thus, Arkema aims to generate sales of €10 to €11 billion and an EBITDA margin of around 17 percent compared to 15.8 percent for the Specialty Materials business.
To carry through this latest stage in its development, the Group intends to build on its many innovation projects and investments in major projects such as the expansion of its specialty polyamides in Asia.
Arkema will also maintain strict financial discipline, with net debt (including hybrid bonds) to EBITDA ratio of less than two and a return on capital employed (ROCE) in excess of 10 percent by 2024.
Regarding COVID-19, Arkema also provided an update on the management and the consequences of this unprecedented health crisis. In the first quarter, the impact of Covid-19 on the Group’s EBITDA is estimated at between €40 and 50 million. Given its very solid financial structure and liquidity levels, the Group is confident in its ability to get through these difficult times for the global economy and emerge in a position of strength.