Resilient earnings and operations, recognized social commitment, a high level of employee involvement, ongoing innovation and investment. Thierry Le Hénaff, the Group’s Chairman and Chief Executive Officer, is confident about what lies ahead for Arkema. Sights are set on the 2024 target of becoming a pure-play Specialty Materials company with sales in excess of €10 billion—an ambitious plan that remains on track despite the health and economic crisis.
2020 A SINGULAR YEAR
The COVID-19 pandemic spread like a tsunami, followed by an unprecedented global economic collapse. This impacted every country in which we operate, without exception.
2020 was a year like no other, turning our lives upside down. It took a huge amount of effort from our staff, and these efforts were not in vain. Arkema was able to weather the storm better than many other companies and is now in an enviable position, well placed to benefit from the rebound in 2021 and beyond.
ACKNOWLEDGEMENTS
Crises reveal a company’s strengths and the staff at Arkema really proved their worth in responding to these events. This period has also illustrated the Group’s solidarity, one of our four core values. Despite difficulties relating to the crisis, everyone played their role to the full and adapted to the situation.
For example, we were quick to enable employees to work from home. Despite restrictions, we were able to continue production and to serve our clients effectively. The Group did not merely cope with the pandemic, but made real progress in a number of areas, stepping up its innovation programs, launching two major industrial projects, rolling out new business and operational excellence initiatives and pursuing its long-term strategy.
RESILIENCE
The Group demonstrated adaptability and responsiveness. Full-year earnings were down but volumes fell by just 4%, with EBITDA margin remaining robust at 15%. Specialty Materials, which represent 82% of Group sales and are at the heart of our development efforts, suffered a drop in EBITDA of just 12%, confirming our strategic focus. We also managed to generate a high level of cash flow, with €651 million, comparable to the record achieved in 2019. We therefore ended the year in a very solid financial position, giving us the leeway needed to pursue the Group’s ambitious growth plans.
A CLEAR COURSE OF ACTION
In response to the pandemic, we worked on a progression of targets over time: managing the crisis in 2020; being ready for the rebound in 2021; and actively continuing to implement our vision for 2024 of becoming a leading name in Specialty Materials. That is why we maintained capital expenditure of €600 million, despite the challenging environment, with major industrial launches in Malaysia, Japan and China.
We began construction of two major new projects presenting an attractive environmental profile and proven high rates of return: a 100% bio-sourced polymer production plant in Singapore and the hydrofluoric acid facility at the Nutrien site in the U.S. We also stepped up our rate of innovation, with promising opportunities in batteries and hydrogen tanks, lightweight materials, 3D printing, low VOC1 paints, filtration membranes, recyclable composites and high-performance adhesives for industry and construction.
We finalized the sale of the functional polyolefins business to Korean group SK and at the end of the year signed the proposal to sell PMMA to U.S. company Trinseo, which will take on our Altuglas International employees. We made a number of targeted acquisitions in adhesives, including LIP, Fixatti and Ideal Work, and acquired stakes in start-ups with promising technologies. We aim to become a leading name in sustainable materials and technologies and to exceed sales of €10 billion in 2024.
1. Volatile Organic Compounds
