The Board of Directors of Arkema reported second quarter 2014 results. Sales were €1,520 million, 3.3% down from 2Q 2013. In particular, the continuing challenging market conditions in fluorogases, temporary unfavorable factors in polyamides and lower volumes
than expected in acrylics
offset solid performance in the other product lines. There was good resilience of the EBITDA margin at 13.6% in this temporary more challenging environment.
The company reported €206 million EBITDA (2Q’13 at €273 million). In particular, the continuing challenging market conditions in fluorogases, temporary unfavorable factors in polyamides and lower volumes than expected in acrylics offset solid performance in the other product lines.
“The performance of the second quarter is below our expectations due to lower volumes than expected in acrylics as well as a number of specific elements in polyamides,” said Thierry Le Hénaff, chairman and CEO of Arkema. “It reflects neither the quality of Arkema’s business portfolio nor the projects currently underway, and masks the solid performance of the other product lines. We remain fully convinced of the relevance of the Group’s long-term strategy and of our ability to benefit over the next three years of our various ongoing projects.
“After a sharp growth in Arkema’s results in the six years following our stock market listing, 2013 and 2014 represent a transition phase marked by the launch of many growth projects and by more challenging market conditions notably in fluorogases,” Le Hénaff added, noting that 2015 should already benefit from a significant pick-up in growth with the larger contribution of both organic projects and acquisitions, the first benefits of well-identified elements in fluorogases and Arkema’s positive prospects in the oil and gas market.
“Following a thorough review of each business unit, we confirm our mid-term targets (€8 billion sales and 16% EBITDA margin),” Le Hénaff noted. “However, their achievement, initially planned for 2016, is now set for 2017 to take into account a more progressive return to normalized conditions.”
Second quarter 2014 sales stood at €1,520 million against €1,629 million in second quarter 2013. Volumes are up 1.1% (2.5% excluding the impact of the shutdown of Chauny in France effective first quarter), mostly supported by Industrial Specialties. The -4.4% price effect essentially concerns fluorogases and, to a lesser extent, High Performance Materials (mainly polyamides).
EBITDA amounted to €206 million against €273 million in second quarter 2013. This decrease reflects continuing challenging market conditions in fluorogases, specific temporary unfavorable factors in polyamide 12, and volumes below expectations in Coating Solutions. The other product lines reported a solid performance.
EBITDA margin held up well at 13.6% despite market conditions in fluorogases and acrylics. In line with the EBITDA trend, recurring operating income stood at €126 million against €195 million in second quarter 2013, after deduction of €80 million depreciation and amortization, slightly up on last year.