Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on ARKEMA. We currently have 9 research reports from 1 professional analysts.
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Not the typical seasonality – more resilience ahead?
28 Feb 17
Arkema reported +5% (v: +6%; price: +1%; FX: -1%; portfolio: -1%) higher sales (to €1,852m) and the gross profit margin clearly improved from 18.0% to 19.3% in Q4. EBITDA strongly rose +26% to €246m and net profit attributable to shareholders jumped +76% to €86m. Operating CF came down from €380m to €246m, despite the higher operating performance, but NWC inflow declined from €205m to €97m and D/A was also lower. Investing CF moved from €-19m to €-327m burdened by significantly higher acquisition costs (€-337m after €2m) due to the closing of the Den Braven takeover. Financing CF was €-177m (€-57m), which suffered from higher net gross debt repayments (€-147m after €-25m). Management proposes a €0.15 higher dividend of €2.05 (€1.90) per share at the AGM on 23 May 2017. For 2017, management confirmed the achievement of the 2014 target of €1.3bn EBITDA. We expect the publication of the annual report in the coming weeks.
End of caution
10 Nov 16
Arkema’s Q3 sales dropped 6% to €1,838m, but the gross profit margin improved from 20.2% to 22.3%. EBITDA went up +5% to €284m and net profit attributable to shareholders rocketed +57% to €96m. 9M operating CF strongly grew (+20% to €575m) due to the higher operating performance, despite a strong increase in NWC outflow (€-86m after €-19m). Lacking the huge cash outflow for the Bostik acquisition, investing CF abated from €-1,616m to €-337m, seeing capex far below D/A. Financing CF swung from €428m to €-79m, primarily due to the strong decline in net gross debt issuance (€26m after €478m). Management lifted FY guidance again, now expecting EBITDA growth in the 9-10% (7-9%) range based on the assumption that energy costs, raw material costs and FX will be in line with current levels. This does not include the announced acquisition of Den Braven. Closing is still expected in Q4 16.
Strong performance in High Performance Materials – guidance raised
03 Aug 16
Arkema’s Q2 sales (-7% to €1,952m) suffered from lower prices (-5%) stemming from lower raw material prices, adverse FX developments (-3%) and divestments (-2%), which may have been partly offset by higher volumes (+3%). EBITDA saw a strong increase (+38% to €351m) and net profit attributable to shareholders was up +11% to €147m. Operating CF remained broadly unchanged at €259m after six months of 2016. The better operating performance was mostly absorbed by higher NWC outflows (€-186m after €-67m). Lacking the cash outflow for the Bostik acquisition (~€1.3bn) in the previous year’s period, investing CF declined from €-1,531m to €-222m. Financing CF swung from €484m to €-104m as net gross debt proceeds melted away (nil after €486m). Management lifted the FY guidance and now expects EBITDA growth in the 7-9% range based on the assumption that energy costs and FX will be in line with their current levels. This does not include the announced acquisition of Den Braven for which the close is still expected in Q4 2106.
Bostik’s top line effects are fading out
12 May 16
Q1 sales were slightly up (1% to €1,893m) seeing one month of Bostik and some divestments (portfolio: +5%) and higher volumes (+3%), but lower raw material prices and the low point of the acrylic cycle ate up 6%. The gross profit margin improved from 18.25% to 22.1% and EBITDA strongly rose +32% to €291m. Net profit attributable to shareholders more than doubled (€98m after €42m). Operating CF (€61m after €34m) reflected the stronger operating performance, which was partly offset by higher NWC outflow (€-151m after €-110m). In Q1 15, investing CF was characterised by the Bostik payment and CF came back to a more normal level (€-101m after €-1,415m). The same is true for the financing CF (€-10m after €489m), which saw very minimal financing activities. Management confirmed its previously given guidance, expecting EBITDA to grow based on the assumption that energy costs and FX will be in line with current levels.
Is everything going to be alright?
03 Mar 16
Bostik was a game-changing acquisition and the figures are dominated by this effect. In Q4, sales clearly improved +23% to €1,760m and the gross profit margin strongly improved from 15.5% to 18.0%. EBITDA went up +23% to €195m and net income attributable to shareholders nearly doubled (€49m after €27m). Operating CF more than doubled (€380m after €162m), driven by higher D/A and, additionally, propelled by a stronger NWC inflow (€205m after €61m), helped by lower inventories and receivables as well as higher payables. Investing CF came up from €-288m to €-19m as the previous year’s quarter was impacted by acquisition costs. Financing CF swung from €907m to €-57m. In the previous year’s quarter, Arkema issued a hybrid bond as a first building block to finance the Bostik acquisition. Management proposes a slightly higher dividend (€1.90 after €1.85 per share) at the next AGM on 7 June 2016. The payout ratio drops from 73.1% to 49.1%. For FY 2016, management is confident it can increase EBITDA, based on the assumption that energy costs and FX will be in line with current levels. The annual report should be available within the next few weeks.
The tide is turning
20 Apr 17
Any investor worth their salt knows it is impossible to precisely call a bottom in a particular stock. For Gattaca, though, we believe this moment has now passed given the compelling valuation (6.9x EV/EBIT vs 9.8x sector average), attractive 9.8% unlevered cashflow yield and constructive secular trends supporting its specialist markets. Sure, Net Fee Income (NFI) like-for-likes (LFL) have fallen of late, yet equally there are now early indications that organic growth may soon turn positive.
19 Apr 17
We take a look at the supply and demand dynamics of the world’s largest diamonds. Less than 200 very large (>200 carat) gem quality diamonds have ever been found, yet 23 of these have been found in the past three years. This dramatic increase is being driven by a combination of the rapid increase in the number of billionaires and hence price and demand, combined with technological developments that have improved large diamond recovery and a certain amount of geological good luck.
Small Cap Breakfast
19 Apr 17
Global Ports Holding—Intention to float on Standard List. International cruise ports operator. Seeking $250m raise including $75m primary offer. Dorcaster—Schedule One Update. Admission now expected 3 May. RTO of Escape Hunt raising £14m at 135p Verditek— Intention to float on AIM. On Admission, the Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Raising £3.5m. Admission in May. Eddie Stobart Logistics— Schedule 1. Admission expected 25 April but capital raising details TBC. ADES International Holding— Intends to join the Standard List in May raising up to $170m plus a vendor sale. Provider of offshore and onshore oil and gas drilling and production services in the Middle East and Africa. Admission expected in May. Tufton Oceanic Assets– Offer extended to 9 May to enable investors to complete further due diligence.
19 Apr 17
Lombard Risk Management* (LRM): Beats demanding growth and profit forecasts (CORP) | Frontier Developments* (FDEV): Steaming ahead (CORP) | Tax Systems* (TAX): Right place, right time (CORP) | Acal (ACL): Stronger H2 and brighter outlook (BUY) | Fenner (FENR): Interim results signal upgrades (BUY) | Minds + Machines* (MMX): US and Europe domain sales (CORP)