WE WANT TO BE FULLY FOCUSED ON SPECIALTY MATERIALS BY 2024. AT THE MOMENT THEY REPRESENT 79% OF OUR ACTIVITY. IN FIVE YEARS THIS WILL BE 100%.
In the current context, our responsiveness has already been a key element, and will continue to be so.
In the current context, our responsiveness has already been a key element, and will continue to be so. It is essential that we adapt our inventory, our operational spending, and our investments, intelligently and determinedly and without delay. As part of our responsible approach, we must also start to prepare for life after the crisis and to consider the way we operate, particularly as lockdown eases.
Looking back at 2019, did Arkema perform well again?
T. L. H. – 2019 feels like a long time ago in the circumstances, but it is important to review it. The macroeconomic context was less buoyant in 2019 than in 2018. Our revenue totaled €8.7 billion, largely in line with the previous year, and EBITDA reached €1,457 million, comparable with the record performance of the previous year. Cash generation remained very solid and reached a historical high, with free cash flow of €667 million, a significant rise, and an operating-cash-flow-to-EBITDA ratio of 52%.
This financial performance reflects the Group’s solidity and resilience in an economic environment that was already being affected by a slowdown in certain key end markets. It also confirms the quality of our business portfolio and the soundness of our strategy to move towards specialties. These product lines registered a 13% increase in EBITDA in 2019. They have overtaken the Intermediates businesses, which were down overall, notably due to difficult market conditions in fluorogases.
Our performance also reflects the relevance of our strategy and the efforts made by Arkema’s teams to adapt to the volatility of the macroeconomic environment.
At the beginning of 2020, Arkema defined an ambitious new road map for 2024. What are its main themes?
T. L. H. – Since Arkema was founded, we have always had a clear vision of what we wanted to become: A leader in Specialty Materials. Starting with the spin-off in 2006, we transformed our Group, altering our business portfolio, making our organizational structure more effective and competitive, and focusing our innovation on sustainable development. It altered our business portfolio, made our organizational structure more effective and competitive, and set us on a clear path of innovating for sustainable development.
In April 2020, we presented this new Arkema at a meeting with investors – a pure player in Specialty Materials, worth €10 to €11 billion, with a simplified, resilient portfolio focused on sustainable solutions. It is a clear vision, an ambitious project, and an important source of value for all our stakeholders.
In our new position, we will be better placed to offer solutions to fulfill the strong demand for new materials in mobility, urbanization, and environmental protection, and new technologies such as 3D printing. Our clients need high-tech, lightweight, bio-based, and recyclable materials. We can supply them thanks to our areas of expertise in materials science.
We have structured these areas of expertise, including glues, substitution, and lightening and protecting materials, into three coherent, complementary platforms for growth: Adhesives, Advanced Materials, and Coating Solutions. Together, these three segments make up Specialty Materials, and define the Group’s medium-term profile.
Our vision is also based on a strategic review of our Intermediates segment, where we are considering a number of disposals and partnerships.