Arkema unveils ambitious targets for 2028 to accelerate organic growth in high-performance materials and sustainable solutions

At the Capital Markets Day held on September 27, 2023, Arkema presented a new phase of development. Based on the achievements achieved since the strategic upgrade in April 2020, the Group’s current goal is to leverage its recent or future industrial investments in high value-added technology solutions to provide services to the fast-growing market, supported by the megatrend of sustainable development. Served in market segments, thereby accelerating organic sales growth in the medium term.

• By 2028, Arkema aims to achieve sales of approximately €12 billion and an EBITDA margin of around 18%

• Sales are expected to average annual organic growth of approximately 4% and EBITDA annual organic growth of approximately 7-8% during 2024-28

• Over 2024-28, cash generation will remain strong and shareholder returns will increase by 30% compared to the previous 5-year period

• The Group will also further strengthen its decarbonization initiatives by leveraging the certification of its 1.5°C emissions reduction pathway by the near-term Science Based Targets (SBTi) organization, paving the way to net zero carbon emissions by 2050.

Since the strategic upgrade in April 2020, the group has unswervingly continued its value creation transformation. With targeted investment, advanced sustainable innovation and high value-added product portfolio management strategies, the group has basically completed its transformation into a pure specialty materials manufacturer. Currently, Arkema’s materials science expertise is organized around three related and complementary business units: Adhesive Solutions, Advanced Materials and Coating Solutions, with an unparalleled portfolio of cutting-edge technologies.

This transformation has brought strong financial returns to Arkema and helped the group improve its structural profitability. As a result, Arkema is on track to achieve the ambitious financial targets it has set for 2024, while continuing to
Since the beginning of the year, the Group has achieved 13
billion in shareholder returns and maintained strict financial discipline. Importantly, Arkema has also significantly improved its corporate social responsibility profile, notably by setting out an ambitious climate plan in line with the SBTi-certified 1.5°C emissions reduction pathway, as well as improving workplace safety and promoting diversity within the company. change.

Disruptive megatrends have accelerated the transformation of the world since the COVID-19 pandemic, and Arkema, with its high-performance innovative materials, is at the forefront of helping to achieve a more sustainable economy. 2020
Building on its successful growth over the years, the Group has acquired or built an unparalleled technology portfolio and is now ready to leverage its unique positioning to take Arkema’s growth trajectory to new heights.

Therefore, by 2028, Arkema aims to achieve sales of approximately 12 billion euros and an EBITDA margin of around 18%, that is, in 2024-28
During the year, the average annual organic growth rate of sales was approximately 4%, and the average annual organic growth rate of EBITDA was approximately 7-8%. The Group will also maintain its strict financial discipline with a net debt to EBITDA ratio of no more than 2
times.

To achieve this ambitious goal, Arkema will put sustainable development at the core of the group’s strategy through the following five driving forces:

(1) Leverage the power of “One Arkema” to empower employees and enhance customer intimacy

(2) Achieve superior growth through sustainable innovation in 5 key sub-markets driven by megatrends where Arkema has established a leading position with cutting-edge technologies

(3) Increase in near-term capital expenditures, especially on bio-based PA11 plants and PVDF in Singapore
production expansion projects and launch new high-return projects in areas such as batteries, renewable energy, decarbonization and bio-based products.

(4) Further strengthen the investment portfolio through bolt-on acquisitions and the complete divestment of the intermediates business

(5) Promote manufacturing excellence, including a focus on decarbonization and digitalization

During the period 2024-28, the Group’s cash generation will remain strong, with total disposable operating cash flow (1) expected to be approximately €7 billion, equivalent to an operating cash flow rate (2) of approximately 70%. The amount returned to shareholders will be around 30% higher than in the 2019-23 period, including steady growth in dividends, which will bring the payout ratio to nearly 40% in the 2024-28 period, as well as some opportunistic share buybacks. Net M&A will account for half of spend over the 2019-23 period, while capital expenditure will increase by approximately 15%, reflecting the impact of inflation, efforts on decarbonization and projects supporting the group’s growth, particularly in batteries. ).

The Group will also leverage SBTi’s recent certification of its 1.5°C decarbonization pathway to further strengthen its decarbonization initiatives, paving the way to net zero carbon emissions by 2050.