Arkema recently announced its results for the third quarter of 2020, reporting sales of €1.9 billion (approximately $2.3 billion), a 9% decline at constant scope and currency compared to the 2019 quarter. Volumes declined by 4.4%. According to Arkema, it experienced a rebound in the construction and decorative paints markets; industrial markets remain down overall, despite growth in certain niches with a high technological content such as batteries.
“After a second quarter marked by the development of the Covid-19 health crisis, global demand recovered in the third quarter and was supported in particular by the strong improvement of market segments linked to construction,” said Thierry Le Hénaff, chairman and CEO. “Group volumes reflect a clear rebound compared to the previous quarter.
“In a context that remains volatile and uncertain, Arkema continues to demonstrate its solidity thanks to the responsiveness and daily commitment of its teams. Specialty Materials, which now account for 83% of Group sales, showed a good level of resilience given the current environment. The Group continued to roll out its cost reduction initiatives and to strictly adapt its working capital. The high level of cash generation in the third quarter enabled us to further strengthen our balance sheet structure.
“Beyond the short term, Arkema continues to implement its strategy announced on 2 April. Good progress has been made towards furthering the Group’s sustainable transformation and its social commitment. In early October, Bostik acquired Ideal Work, the third external growth operation in Adhesive Solutions this year after LIP and Fixatti. Arkema issued, with a very positive response from financial markets, its first ever green bond for a total amount of €300 million dedicated to the financing of the bio-based polyamide plant in Singapore. Major advances have been made in innovative projects in mobility, in relation to batteries, lightweight materials and more recently hydrogen transportation and storage. Lastly, and we are particularly proud of this, the Group has for the first time recorded an injury rate that fell below the symbolic threshold of one accident per million hours worked over a 12-month period.”
The fourth quarter is marked by a second wave of COVID-19 in many countries, especially in Europe, which could weigh on global demand. In this uncertain environment, Arkema estimates at this stage that activity levels should nevertheless be in the continuity of those of the third quarter, excluding a significant impact on the global economy linked to the new sanitary restrictions. Fourth quarter sales could therefore reportedly decline by around 7% year on year at constant scope and currency, reflecting a solid performance of the construction market for Bostik and Coating Solutions and a sequential improvement for High Performance Polymers, but a continued marked decline in Intermediates.
Arkema reports that it will therefore continue to focus its efforts on the elements that are within its control, notably cost reduction initiatives and the strict management of working capital and capital expenditure. The group will also continue to implement its long-term strategy, notably its major industrial projects, targeted acquisitions and innovation initiatives in Specialty Materials to meet its customers’ sustainable developments opportunities, as well as its strategic review for Intermediates.
For more information, visit www.arkema.com.