Arkema recently announced details regarding its financial performance in the first quarter of 2022. Group sales rose by 29.7% compared to the 2021 quarter, to almost €2.9 billion (approximately $3 billion). Up against a high comparison base, volumes were down by 2.2%, impacted by logistics disruptions in Europe and the U.S. and the shortage of certain raw materials, particularly in the Adhesive Solutions segment.

While underlying demand remained fairly well-oriented in most of the group’s end markets and regions, a slowdown was nevertheless observed in China at the end of the quarter due to COVID-related lockdowns, as well as in construction in Europe. The 31.5% positive price effect reflects in particular Arkema’s ability to pass on in its Specialty Materials selling prices the very high inflation in raw materials, energy, and transportation costs, as well as better conditions in upstream acrylics.

The scope effect was a negative 4.9%, as the divestment of PMMA was only partially offset by the integration of acquisitions in Specialty Materials. The 5.3% positive currency effect was essentially attributable to the appreciation of the U.S. dollar against the euro.

Sales in the Adhesive Solutions segment rose by 20.7% compared with first-quarter 2021 to €670 million (~ $706.3 million), driven by a 15.8% price effect that reflects the group’s ongoing initiatives to pass on the significant inflation in raw materials, energy, and transportation costs. In a context of sustained demand, volumes nevertheless fell by 4.5% from the high level achieved last year, impacted by the slowdown recently observed in construction and DIY in Europe, logistics difficulties, as well as shortages of certain raw materials (which are gradually improving).

Arkema reports that its Adhesive Solutions volumes in the U.S. stood at a good level. The 6.3% positive scope effect corresponds to the integration of Ashland’s performance adhesives in March, as well as Poliplas and Edge Adhesives Texas over the quarter. The currency effect was a positive 3.1%.

According to Arkema, market conditions for the group remain positively oriented at the beginning of the second quarter, but with disparities between regions and end markets and an increased lack of visibility regarding the environment. The health situation in China, the war in Ukraine, high raw materials and energy cost inflation, and logistics disruptions are all factors that could weigh on global demand going forward. In this demanding context, the group will endeavor to optimize supply chain management and continue to dynamically adjust its selling prices.

“Our very good performance in the first quarter reflects the strength of our innovation for sustainable development and Arkema’s very solid positioning to address accelerating demand for cutting-edge solutions in high value-added markets,” said Thierry Le Hénaff, chairman and CEO. “In an operating context that continues to be particularly demanding, our balanced geographic footprint, our technologies, our customer intimacy and the commitment of Arkema’s teams are all valuable assets.

“Despite the uncertainties currently weighing on global growth, this first quarter’s very good results make us confident in our ability to surpass in 2022 last year’s record results and particularly motivate the teams to continue implementing our strategy focused on Specialty Materials. We are also pleased to have welcomed on 1 March Ashland’s adhesives’ teams, and this top-tier activity is already confirming all its potential. Lastly, we are delighted to start up very soon, on time and on budget, our two new plants in Singapore and the United States, which are fully in line with the decarbonization theme.”

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