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At a strategy update meeting on April 2, Arkema set out its ambitious goal of becoming a world leader in specialty materials, which will revolve around Adhesive Solutions, Advanced Materials and Coating Solutions, three promising growth links Business is restructured
.
Although crisis management related to the Covid-19 pandemic requires everyone to be mobilized - doing everything possible to support customers and other stakeholders while prioritizing the health and safety of employees, Arkema has decided to On the 2nd, a strategy update meeting was held to share its vision and announce medium-term ambitious goals
.
Since 2006, the Group has continued its in-depth transformation, advancing and developing into a leading position in specialty materials through targeted investments, innovative policies focused on key sustainable development trends, and active portfolio management
.
Currently, Arkema is entering a new phase of transformation
.
It is based on three related and complementary business units focused on specialty materials, namely Adhesive Solutions, Advanced Materials and Coating Solutions, around which the world's growing demand for sustainable and high-performance materials, Arkema enjoy a unique status
.
Accordingly, the Group has decided to adjust its organizational structure and reporting mechanisms in line with this vision, including:
Three divisions will report separately, covering all of Arkema's specialty materials: "Adhesive Solutions", "Advanced Materials" and "Coating Solutions";
The "Intermediate" division, which consists of MMA/PMMA, Fluorine Gas and Asian Acrylic Businesses, integrates the more volatile businesses and implements a differentiation strategy
.
By 2024, Arkema aims to be a pure-play specialty materials producer with a strong and focused business portfolio characterized by high profitability and strong cash generation
.
As a result, Arkema is targeting sales of 10 to 11 billion euros in the Specialty Materials business with an EBITDA margin of around 17% (now 15.
8%)
.
Arkema will also maintain strict financial guidelines, with net debt (including hybrid bonds) to earnings before interest, tax, depreciation and amortization (EBITDA) of less than 2 and return on capital (ROCE) of more than 2024 10%
.
Over the next five years, the Group's cash generation capacity is expected to grow further compared to the previous five-year period (2015-2019)
.
By maintaining the ratio of net debt (including hybrid debt) to EBITDA at end-2019 levels, this will allow Arkema to finance major organic growth projects and portfolio management operations, while enhancing shareholder returns and achieving dividend payments through 2024 rate 40% target
.
Arkema will also be allowed to conduct opportunistic share buybacks under favorable market conditions
.
In the short term, in the context of the unprecedented Covid-19 pandemic, the Group is implementing crisis management measures, prioritizing employee health, adjusting supply chains and production facilities to optimally manage potential production disruptions and ensure that its customers in key markets supply continuity
.
The group will continue to monitor its cash generation and is taking proactive steps to reduce the level of investment and fixed spending initially forecast for 2020
.
In the first quarter, the impact of the COVID-19 outbreak on Group EBITDA is expected to be between EUR 40 million and EUR 50 million
.
Based on a very solid financial structure and liquidity levels, the group is confident in its ability to weather the difficult times of the global economy and be well positioned
.
