Arkema S.A.: history, ownership, mission, how it works & makes money

A Brief History of Arkema S.A.

Arkema S.A., a French specialty chemicals and advanced materials company, was established in 2004 as a spin-off from Total S.A. The company went public on the Euronext Paris in May 2006, raising approximately €1.13 billion. The initial public offering (IPO) was a significant milestone, providing capital for its aggressive growth strategy.

In its early years, Arkema focused on expanding its portfolio through acquisitions. In 2007, Arkema acquired the specialty chemicals business of the American company Total, enhancing its presence in the adhesives market. The acquisition added around €1.3 billion in revenue. By 2010, Arkema had established itself as a global leader in critical sectors, including coatings, adhesives, and high-performance materials.

2012 marked a pivotal moment for Arkema as the company expanded its production capabilities. A new world-scale facility for polyamide production was inaugurated in China, with an investment of approximately $200 million. This expansion was vital in meeting the growing demand in Asia-Pacific markets.

In 2015, Arkema achieved a record revenue of €7.5 billion, demonstrating a strong market position. The company’s EBITDA for the same year was reported at €1.4 billion, underscoring its operational efficiency and profitability amidst a challenging market environment.

The acquisition of Bostik in 2016 for approximately €1.7 billion further diversified Arkema’s offerings in the adhesives sector, positioning it as one of the top players globally. Bostik contributed about €1.6 billion in annual sales.

By 2018, Arkema announced its commitment to sustainability and innovation, setting ambitious goals to reduce greenhouse gas emissions by 30% compared to 2015 levels by 2030. The company invested heavily in R&D, allocating approximately €145 million in 2019 to develop sustainable solutions.

In 2020, despite the challenges posed by the COVID-19 pandemic, Arkema reported a resilient performance with revenues of around €7.76 billion. The company's net income stood at approximately €535 million, illustrating its capacity to adapt and thrive in a volatile environment.

As of 2021, Arkema announced its strategic plan to achieve €10 billion in sales by 2024. The company also increased its focus on advanced materials, targeting industries such as electronics and renewable energy, which are expected to drive future growth.

In 2023, Arkema continued its trajectory of growth, reporting a revenue of approximately €9.4 billion for the year. The net income for the same period was around €765 million, reflecting a strong recovery and robust demand in specialty chemicals and advanced materials.

The company also emphasized its dedication to sustainability, launching several new initiatives in renewable materials, such as bioplastics and sustainable coatings. Arkema allocated an estimated €300 million towards sustainable innovation projects in 2023.

This journey reflects Arkema S.A.’s evolution from a spinoff to a global leader in specialty chemicals, showcasing its agility in adapting to market trends while maintaining a commitment to innovation and sustainability.

A Who Owns Arkema S.A.

Arkema S.A. is a publicly traded French specialty chemicals and advanced materials company. As of October 2023, Arkema is listed on the Euronext Paris under the ticker symbol "AKE."

As of the last available data, Arkema’s ownership is distributed among various institutional investors and retail shareholders. The top shareholders include:

The institutional ownership accounts for approximately 20% of the total shares, with the remainder held by retail and other investors. This structure indicates strong public participation in the company's equity.

Arkema's market performance can be illustrated through its stock price history. As of October 2023, Arkema’s share price stood at approximately €97.25, with a 52-week range of €79.40 to €108.90.

In the most recent earnings report for Q3 2023, Arkema reported a revenue of approximately €3.5 billion, which reflects a year-over-year increase of 8%. The company also reported net income of around €270 million for the same period, translating to a net profit margin of about 7.7%.

Arkema has a market capitalization of approximately €5.45 billion as of the latest data. The company's P/E ratio stands at approximately 15.5, which indicates its valuation in the market.

The company operates across three main segments: Adhesive Solutions, Advanced Materials, and Coating Solutions. Each segment demonstrates different levels of revenue contribution, with Adhesives accounting for approximately 40% of total sales, followed by Advanced Materials at 35% and Coating Solutions at 25%.

In terms of geographical revenue distribution, North America contributes around 30%, while Europe contributes approximately 45%. The remaining 25% comes from the Asia-Pacific and other regions.

Arkema has committed to environmentally sustainable practices and aims to achieve a 50% reduction in its greenhouse gas emissions by 2030 compared to 2020 levels, enhancing its appeal to socially responsible investors.

Additionally, Arkema's dividend yield stands at approximately 2.2%, indicating a steady return to its shareholders.

Arkema S.A. Mission Statement

Arkema S.A., a key player in the specialty chemicals sector, emphasizes its commitment to innovation and sustainability. The company aims to provide innovative solutions that are beneficial for customers, the environment, and society as a whole. Their mission statement highlights the core values of performance, knowledge sharing, and ethical conduct.

The company's strategic vision focuses on four main pillars:

• Innovation: Arkema invests heavily in research and development, allocating approximately 3.6% of its annual sales to R&D initiatives.
• Sustainability: The company has set ambitious sustainability goals, including a goal to achieve 50% of its sales from sustainable products by 2030.
• Customer orientation: Arkema prioritizes understanding customer needs and developing tailored solutions.
• Ethics and Integrity: Arkema fosters a culture of transparency and accountability throughout its operations.

As of the end of 2022, Arkema reported total sales of approximately €10.2 billion. The company's operational performance reflects its focus on specialty chemicals and advanced materials, with a reported EBITDA margin of 15.6%.

Arkema’s commitment to sustainability is also reflected in its aim to reduce greenhouse gas emissions. The company targets a reduction of 26% by 2030 compared to 2015 levels.

The company's vision includes a focus on high-performance solutions for various industries such as construction, electronics, and renewable energies. In 2022, Arkema launched over 50 innovative products aligned with its sustainability objectives. This proactive approach allows Arkema to enhance its market position while catering to evolving customer demands.

Arkema's ongoing initiatives and mission statement underscore its determination to lead in the specialty chemicals market through responsible growth and innovative practices, aiming to be a trusted partner in sustainability-oriented solutions.

How Arkema S.A. Works

Arkema S.A., a French specialty chemicals company, operates in three main segments: High Performance Materials, Industrial Chemicals, and Coating Solutions. As of 2022, Arkema reported sales of approximately €10.3 billion, showcasing a significant increase from previous years.

The High Performance Materials segment, which includes products such as polymers and resins, contributed about 45% of the total sales. Key offerings in this area include polyamide and liquid resins, which cater to various industries, from automotive to electronics.

The Industrial Chemicals segment accounted for around 30% of the sales. In this sector, Arkema produces thiochemicals and hydrogen peroxide, serving customers in the energy, paper, and water treatment industries. The demand for hydrogen peroxide has increased significantly, reflecting a growing trend towards sustainable and environmentally friendly solutions.

Coating Solutions represented the remaining 25% of sales, with Arkema leading in the development of innovative coatings and adhesives. This segment focuses on sustainability, boasting a portfolio of products with enhanced performance characteristics and reduced environmental impact.

Arkema employs over 20,000 people globally, with a presence in more than 55 countries. Their innovative approach is supported by a robust R&D budget, which amounted to around €290 million in 2022.

Financially, Arkema's operating income was reported at approximately €1.4 billion, with an operating margin of roughly 13.6%. The company's net income for the year was about €1.1 billion, which translates to earnings per share of around €11.15.

To further illustrate Arkema's financial health, the company's return on equity (ROE) was approximately 12%, indicating effective management of shareholders’ equity. Additionally, Arkema's debt-to-equity ratio stood at 0.57, reflecting a balanced capital structure.

Arkema is also focused on sustainability, targeting a 30% reduction in greenhouse gas emissions by 2030. Their commitment to sustainability is evidenced by their investment in bio-based products and recycling initiatives.

In March 2023, Arkema announced the acquisition of a leading player in the bio-based materials market, which is expected to enhance their product offerings and market presence. The acquisition is projected to increase Arkema's sales by approximately €300 million annually.

Arkema also prioritizes dividends, offering a stable return to shareholders. For the financial year 2022, they declared a dividend of €3.50 per share, reflecting the company's strong cash flow generation capabilities.

Overall, Arkema's diversified portfolio, commitment to sustainability, and robust financial metrics position the company as a significant player in the specialty chemicals market.

How Arkema S.A. Makes Money

Arkema S.A., a global leader in specialty chemicals, operates through three primary business segments: High Performance Materials, Industrial Specialties, and Coating Solutions. These segments allow Arkema to diversify its revenue streams and leverage its technological expertise.

• High Performance Materials: This segment includes advanced materials such as thermoplastic polymers and high-performance adhesives. As of Q2 2023, this segment accounted for approximately 39% of Arkema's total revenue.
• Industrial Specialties: This portion focuses on products for coatings, additives, and other specialty markets. As of Q2 2023, it contributed about 35% to overall revenue.
• Coating Solutions: This segment deals with coatings and paint additives. It accounted for around 26% of Arkema's total revenue in Q2 2023.

In 2022, Arkema reported total revenues of approximately €10.4 billion, reflecting a growth of 14% compared to 2021. This revenue growth was primarily driven by strong demand in the High Performance Materials segment, particularly in the automotive and electronics markets.

Arkema's earnings before interest, taxes, depreciation, and amortization (EBITDA) for the full year 2022 reached about €2.3 billion, with an EBITDA margin of approximately 22%. This margin illustrates the company's efficiency in converting revenue into profit.

Arkema's strategic acquisitions have also played a crucial role in boosting revenue. For instance, the acquisition of the PMMA (Polymethyl Methacrylate) business from Degussa in 2021 expanded their product offerings in High Performance Materials.

The company continues to build on its sustainability initiatives, which are increasingly becoming a revenue driver. In 2022, Arkema generated roughly €900 million from sustainable product offerings, representing an increase of 25% compared to the previous year. This aligns with global trends towards sustainability and positions Arkema for future growth.

Geographically, Arkema also enjoys a diverse market presence. In 2022, sales in North America made up approximately 40% of total revenue, while Europe accounted for around 30%, and the Asia-Pacific region contributed about 25%.

Overall, Arkema's multifaceted approach, including a diverse product range, strategic acquisitions, and a focus on sustainability, contribute significantly to its revenue generation and operational success in the competitive specialty chemicals market.