Arkema S.A. (AKE.PA) | Investment Case

1. Company Snapshot

1.a. Company Description

Arkema S.A. manufactures and sells specialty chemicals and advanced materials worldwide.The company operates through Adhesive Solutions, Advanced Materials, Coating Solutions, and Intermediates segments.It provides adhesive solutions for construction, renovation of buildings, DIY, durable goods, and packaging and non-woven applications; and supplies technologies used in building activities for businesses and individuals, including sealants, tiles, flooring adhesives and waterproofing systems, and technologies used in industry, which include automotive, textiles, glazing, flexible and rigid packaging, and hygiene markets.

The company also offers advanced materials consisting of specialty polyamides and polyvinylidene fluoride; and performance additives, such as specialty surfactants and molecular sieves, organic peroxides, thiochemicals, and hydrogen peroxide for use in automotive and transportation, oil and gas, renewable energies, consumer goods, electronics, construction, coatings, animal nutrition, and water treatment sectors.In addition, it provides coating solutions comprising EU/US acrylics and coating resins; sartomer photocure resins and coatex rheology additives; decorative paints, industrial coatings, and adhesives; and solutions for applications in the paper, superabsorbents, water treatment and oil and gas extraction, and 3D printing and electronics industries.Further, the company offers fluorogases and acrylics; and industrial intermediate chemicals used in construction, refrigeration and air conditioning, automotive, coatings, and water treatment sectors.

Arkema S.A. was incorporated in 2003 and is headquartered in Colombes, France.

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1.b. Last Insights on AKE

Arkema's recent performance was negatively impacted by a challenging macroeconomic environment, despite achieving significant cost savings and strong sales growth in key markets. The company's proposed divestment of its plastic additives business to Praana, aimed at refocusing on strategic activities, may also be perceived as a negative factor. Additionally, Arkema's expansion of its Kynar PVDF production capacity in China, while targeting strong market growth, may not offset the short-term challenges. The company's sustainability efforts, recognized by EcoVadis Gold Medal and CDP ratings, may not have been enough to mitigate these negative factors.

1.c. Company Highlights

Last Price	58.1
Change Percentage	-1.61%
Open	58.35
Previous Close	59.05
Market Cap ( Millions)	4394
Volume	187183
Year High	71.9
Year Low	48.3
M A 50	56.87
M A 200	56.11

FCF Yield	8.40%
Dividend Yield	6.20%
ROE	0.90%
Debt / Equity	88.66%
Net Debt / EBIDTA	272.57%
Price To Book	0.73
Price Earnings Ratio	69.68
Price To FCF	11.91
Price To sales	0.48
EV / EBITDA	6.5

2. Arkema's 2025 Earnings: A Resilient Performance Amidst Challenging Macro Conditions

Arkema reported revenues of €9.1 billion for 2025, down 5% year-on-year, with a negative 2.9% currency effect. Despite the challenging macroeconomic environment, the company generated a high level of cash at €464 million, above its revised guidance of €300 million. EBITDA stood at €1.25 billion with a margin of 13.8%. The adjusted net income was €328 million, or €4.34 per share, while the actual EPS came out at -0.89999 relative to estimates at 0.925.

Publication Date: Mar -01

                                    📋 Highlights
                                    Cash Generation::
                                                Arkema exceeded revised guidance with €464M cash, up from €300M target.
EBITDA Performance::
                                                EBITDA reached €1.25B, achieving 13.8% margin despite economic challenges.
Cost Savings::
                                                The company cut €90M in fixed/variable costs, doubling its initial 2025 target.
High-Growth Markets::
                                                Sales in batteries, 3D printing, and healthcare grew 16% YoY.
Dividend Stability::
                                                Proposed €3.60/share payout maintained amid 5% revenue decline and weak FX impact.

                                

Operational Highlights

The company's key attractive markets, such as batteries, sports, 3D printing, healthcare, and new generation fluorospecialties, showed strong dynamics, with sales up 16% year-on-year. Arkema delivered around €90 million of fixed and variable cost savings in 2025, nearly doubling its initial annual target. The company's working capital ended at 12.5% of annual sales, reflecting similar efforts by customers to manage their working capital.

Segment Performance

The High-Performance Polymers (HPP) segment saw a significant decline in sales in Q4, mainly due to customer destocking. Management does not see this as a new trend but rather a return to normal conditions. Advanced Materials Q4 numbers show destocking, mainly in Europe and the US, affecting high-value applications. The Specialty Materials performance was considered good, with EBITDA down only 5% in tough macroeconomic conditions.

Outlook and Guidance

For 2026, Arkema aims for its EBITDA to grow slightly at constant FX. The company expects its major projects to contribute around €50 million of additional EBITDA. Management expects a more balanced performance between the two halves, with the comparison with last year easing progressively until the end of the year. A seasonal rebound is expected in Q1, with revenue above Q4, driven by less destocking and typical seasonality.

Valuation and Dividend

With a P/E Ratio of 74.3 and an EV/EBITDA of 6.75, the market seems to be pricing in a challenging environment. The company's dividend yield stands at 5.81%, indicating an attractive return for shareholders. Arkema proposes a stable dividend of €3.60 per share despite the challenging macro environment, reflecting its commitment to returning value to shareholders.

Conclusion on Financial Health

Arkema's net debt and hybrid bonds were slightly down at €3.2 billion, with a net debt to last 12-month EBITDA ratio of 2.5x, indicating a relatively healthy financial position. The company's free cash flow yield stands at 7.88%, suggesting a decent return for investors. Overall, Arkema's resilient performance and guidance suggest that the company is well-positioned to navigate the challenging market conditions.

3. NewsRoom

Arkema Announces Expansion of Kynar PVDF Production Capacity in China

Mar -17

Source:

Arkema Expands Its Kynar® PVDF Production Capacity in China to Support Strong Market Growth

Mar -16

Source:

Arkema SA (ARKAF) Full Year 2025 Earnings Call Highlights: Navigating Challenges with Strategic ...

Feb -26

Source:

ARKEMA: Full-Year 2025 Results

Feb -26

Source:

Assessing Arkema (ENXTPA:AKE) Valuation After New Battery Alliance And Sustainability Recognition

Feb -03

Source:

Arkema and Senior Strengthen Cooperation to Advance Next-Generation Battery Materials

Feb -03

Source:

Does Arkema’s EcoVadis Gold and Low GWP Push Redefine Its Edge in Data Center Cooling (ENXTPA:AKE)?

Feb -03

Source:

[Latest] Global Automotive Adhesives and Sealants Market Size/Share Worth USD 13.18 Billion by 2035 at a 6.9% CAGR: Custom Market Insights (Analysis, Outlook, Leaders, Report, Trends, Forecast, Growth Rate, Value, SWOT Analysis)

Feb -03

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.73%)

6. Segments

Advanced Materials

Expected Growth: 3.5%

Arkema's Advanced Materials segment growth is driven by increasing demand for sustainable and lightweight materials in the automotive and aerospace industries, as well as growing adoption of renewable energy sources. Additionally, the segment benefits from Arkema's innovative product offerings, such as its high-performance polymers and advanced composites, which cater to the needs of these industries.

Adhesive Solutions

Expected Growth: 3.8%

Arkema's Adhesive Solutions segment growth of 3.8% is driven by increasing demand for sustainable and eco-friendly adhesives in the packaging and construction industries, coupled with the company's strategic acquisitions and investments in R&D, enabling the development of innovative and high-performance adhesives.

Coating Solutions

Expected Growth: 4.2%

Arkema's Coating Solutions segment growth is driven by increasing demand for sustainable and eco-friendly coatings, expansion in the Asian market, and strategic acquisitions. Additionally, the segment benefits from the growing trend of waterborne coatings, driven by environmental regulations and consumer preferences for low-VOC products.

Intermediates

Expected Growth: 3.2%

Arkema S.A.'s intermediates segment growth of 3.2% is driven by increasing demand for specialty chemicals in the automotive and construction industries, coupled with the company's strategic expansion into high-growth markets, such as Asia, and its focus on innovative and sustainable products.

Corporate

Expected Growth: 2.8%

Arkema S.A.'s 2.8% corporate growth is driven by increasing demand for sustainable and specialty materials, strategic acquisitions, and operational efficiency improvements. The company's focus on high-margin businesses, such as adhesives and advanced materials, also contributes to its growth. Additionally, Arkema's commitment to innovation and R&D investments enables it to stay ahead in the competitive chemicals market.

7. Detailed Products

Adhesives

Arkema's adhesives are used in various industries such as construction, automotive, and consumer goods. They offer a range of adhesives including hot melts, pressure-sensitive adhesives, and reactive adhesives.

Advanced Organic Materials

Arkema's advanced organic materials are used in various applications such as electronics, aerospace, and industrial coatings. They offer a range of materials including fluoropolymers, specialty polyamides, and polyvinylidene fluoride (PVDF).

Coatings

Arkema's coatings are used in various industries such as construction, industrial, and automotive. They offer a range of coatings including acrylic, polyurethane, and epoxy-based coatings.

Fluoropolymers

Arkema's fluoropolymers are used in various applications such as non-stick coatings, semiconductor manufacturing, and industrial processing. They offer a range of fluoropolymers including Teflon, Kynar, and Rilsan.

Hydrogen Peroxide

Arkema's hydrogen peroxide is used in various applications such as paper bleaching, wastewater treatment, and chemical synthesis.

PVC

Arkema's PVC is used in various applications such as pipes, profiles, and vinyl compounds.

Rilsan Polyamide

Arkema's Rilsan polyamide is used in various applications such as oil and gas, industrial, and automotive.

Thiochemicals

Arkema's thiochemicals are used in various applications such as oil and gas, mining, and industrial.

8. Arkema S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Arkema S.A. operates in a market with moderate threat of substitutes. While there are some alternatives available, they are not significantly cheaper or better, limiting their appeal.

Bargaining Power Of Customers

Arkema S.A.'s customers have limited bargaining power due to the company's strong brand reputation and diversified product offerings.

Bargaining Power Of Suppliers

Arkema S.A. faces moderate bargaining power from its suppliers, as it relies on a diverse range of suppliers for its raw materials.

Threat Of New Entrants

The threat of new entrants is low for Arkema S.A. due to the high barriers to entry in the chemical industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The chemical industry is highly competitive, with many established players competing for market share, leading to a high intensity of rivalry for Arkema S.A.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	43.34%
Debt Cost	3.95%
Equity Weight	56.66%
Equity Cost	9.98%
WACC	7.37%
Leverage	76.50%

11. Quality Control: Arkema S.A. passed 4 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Fuchs Petrolub

A-Score: 5.5/10

Value: 5.2

Growth: 5.6

Quality: 7.2

Yield: 5.0

Momentum: 3.0

Volatility: 7.0

1-Year Total Return ->

Brenntag

A-Score: 5.3/10

Value: 6.9

Growth: 5.4

Quality: 5.2

Yield: 5.6

Momentum: 1.5

Volatility: 7.3

1-Year Total Return ->

Evonik

A-Score: 5.0/10

Value: 6.3

Growth: 2.8

Quality: 2.8

Yield: 9.4

Momentum: 1.0

Volatility: 7.7

1-Year Total Return ->

Clariant

A-Score: 4.5/10

Value: 6.4

Growth: 3.7

Quality: 3.5

Yield: 6.9

Momentum: 0.5

Volatility: 6.3

1-Year Total Return ->

Arkema

A-Score: 4.4/10

Value: 6.5

Growth: 3.4

Quality: 2.7

Yield: 7.5

Momentum: 1.0

Volatility: 5.3

1-Year Total Return ->

IMCD

A-Score: 4.3/10

Value: 4.5

Growth: 6.7

Quality: 5.2

Yield: 3.8

Momentum: 0.5

Volatility: 5.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

0.48%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.37%

Arkema S.A. - FR0010313833

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on AKE

1.c. Company Highlights

Medium Volatility

Stable Momentum

Fairly Valued

Earnings Beats

Revenues Miss

Average Yield

Revenues Beats

Average Quality

Weak Momentum

Earnings Miss

Average Growth

2. Arkema's 2025 Earnings: A Resilient Performance Amidst Challenging Macro Conditions

Operational Highlights

Segment Performance

Outlook and Guidance

Valuation and Dividend

Conclusion on Financial Health

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.73%)

6. Segments

Advanced Materials

Expected Growth: 3.5%

Adhesive Solutions

Expected Growth: 3.8%

Coating Solutions

Expected Growth: 4.2%

Intermediates

Expected Growth: 3.2%

Corporate

Expected Growth: 2.8%

7. Detailed Products

Adhesives

Advanced Organic Materials

Coatings

Fluoropolymers

Hydrogen Peroxide

PVC

Rilsan Polyamide

Thiochemicals

8. Arkema S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Arkema S.A. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

58.1$

Current Price

58.1$

12.e Scoring ^Insights

12.f DCF ^BETA