Arkema: Full Year 2012 Results

  Arkema: Full Year 2012 Results

  *Strong financial performance in a mixed economic environment

       *Sales 8% up to €6.4billion
       *€996million EBITDA fully in line with guidance
       *15.6% EBITDA margin at the high end of the industry range
       *4^th quarter EBITDA at €171 million, up 8% versus 4Q’11
       *€441million adjusted net income of continuing operations
       *€900net debt and 39% gearing

  *Transformed and reinforced Group

       *Finalization of major acquisitions and divestments
       *Strong positions in diversified and high added value niche markets
       *Significant presence in North America (34% of sales) and in Asia (21%
         of sales)
       *Start-up of construction of the Thiochemicals platform in Malaysia

  *Proposed dividend of €1.80 per share
  *Confidence in achieving the targets set for 2016

Business Wire

COLOMBES, France -- February 28, 2013

Regulatory News:

The Board of Directors of Arkema (Paris:AKE) met on February 27^th 2013 to
close the consolidated accounts of Arkema for 2012 and the annual financial
statements of the parent company. At the end of the meeting, Thierry Le
Hénaff, Chairman and CEO of Arkema, stated:

«For the second year running, Arkema has delivered an EBITDA close to
€1billion and an EBITDA margin among the highest in the sector. This
performance, achieved in an economic environment that was less favorable than
in 2011, confirms the validity of the repositioning of the Group’s activities
portfolio towards high added value niche markets. Moreover, the Group’s
geographic presence is now more evenly balanced and is further strengthened by
several ongoing major investment projects in Asia and the United States.

On the basis of the financial performance achieved and to mark its confidence
in Arkema’s ability to reach the objectives set for 2016, the Board of
Directors has decided to propose a significant increase in the dividend, to
€1.80 per share.»

FULL YEAR 2012 KEY FIGURES

(In millions of euros)                              2012   2011   Variation
Sales                                               6,395  5,900  +8.4%
EBITDA                                              996    1,034  -3.7%
EBITDA margin                                       15.6%  17.5% 
Industrial Chemicals                                 15.9%   18.5%
Performance Products                                17.2%  17.3%  
Recurring operating income                          678    762    -11.0%
Non-recurring items                                 (27)   (45)   -
Adjusted net income of continuing operations        441    574    -23.2%
Net income of discontinued operations               (200)  (587)  -
Net income – Group share                            220    (19)   -
Diluted adjusted net income per share of            7.00   9.21   -24.0%
continuing operations (in €)
                                                                     

The contribution of the Vinyl activities, divested early July 2012, has been
presented in accordance with IFRS5 rules and terms. Income statement items
and balance sheet items (only for 2011 for the balance sheet) for this
business have been presented on a separate line in the income statement and
the balance sheet. However, the cash flow statement includes flows related to
the Vinyl business concerned.

FULL YEAR 2012 ACTIVITY

Sales reached €6.4billion, +8.4% up on 2011. This growth includes a +9.4%
change in the scope of business effect reflecting the contribution of
acquisitions (specialty resins acquired on 1^st July 2011 (Cray Valley and
Sartomer), Chinese companies Hipro Polymers and Casda Biomaterials,
alkoxylates, and an acrylic additive and emulsion site in Brazil) and the
impact of the divestment of the tin stabilizer business finalized on 1^st
October 2012. Volumes decreased slightly (-2.0%) compared to 2011 which
represented, over the first six months of the year, a high basis of comparison
marked by restocking and exceptional growth in Asia. Towards the end of the
year, volumes in certain product lines were affected by weak demand in Europe
and destocking in some sectors. The evolution of prices (-2.6% compared to
2011) essentially reflects the decrease expected in acrylic monomers and some
fluorogases. The translation effect, primarily related to the strengthening of
the US dollar against the euro, was positive (+3.6%).

In a less favorable and more volatile economic environment than in 2011,
EBITDA stood at €996million, close to last year’s record level
(€1,034million) and fully in line with the Group’s objective to generate in
2012 an EBITDA close to €1billion. The solid results of its activities in
North America where the Group has developed a significant presence (34% of the
Group’s total sales), the net contribution of acquisitions and divestments,
the optimization of the product mix in Performance Products, and the positive
impact of the translation effect have helped partially offset the slight
decrease in volumes, a return to mid-cycle conditions in acrylic monomers, and
noticeably lower unit margins for some fluorogases.

At 15.6%, the EBITDA margin remained among the highest in the industry. With
17.2% and 15.9% EBITDA margins respectively, fully in line with the targets
set for the medium term, the two business segments, Performance Products and
Industrial Chemicals, each achieved a very solid performance, reflecting the
Group’s positioning in higher added value specialty businesses.

Recurring operating income stood at €678million against €762million in 2011,
after deduction of €318million depreciation and amortization up by
€46million due primarily to acquisitions and the translation effect related
to the strengthening of the US dollar against the euro.

Non-recurring items reached -€27million, and correspond primarily to the
impact of the shortage in the supply of CDT, the raw material of polyamide 12,
following an incident on the Marl site of Evonik in Germany, accounting for
-€17million, and to various expenses related to the divestment and
acquisition operations.

The financial result stood at -€54million against -€37million in 2011. This
includes the cost of the debt for which the average interest rate was 3.4% in
2012 (3.5% in 2011).

Income taxes amounted to €186million in 2012 (€125million in 2011),
representing 27.4% of the recurring operating income. This rate reflects the
geographic breakdown of the results, with a significant part of the Group’s
results generated in North America and a smaller part in Europe.

Net income Group share of continuing operations stood at €420million, i.e.
€6.75 per share and 6.6% of the Group’s total sales.

Net income Group share of discontinued operations (Vinyl activities) reached
-€200million. This includes -€73million net result from operations as well
as other income and expenses amounting to -€127million including the
implementation of the warranties negotiated during the workers council’s
information / consultation process, the cost of establishing the business into
a self-sufficient structure (information systems, legal and accounting costs
related to the transfer of activities, etc.) and post-closing adjustments
related in particular to additional write-offs corresponding to changes in
working capital since the beginning of the year. In addition, as part of this
divestment, Arkema has set up some warranties to third parties for certain
contracts transferred. These warranties, which are covered by a collateral and
by a clause for indemnification by Klesch Chemicals Ltd, represent a maximum
net amount of 60millions euros.

Net income Group share stood at €220million.

Taking into account the Group’s confidence in its mid-term prospects and in
the strength of its balance sheet, and willing to continue to share with its
shareholders the success of its targeted growth strategy, the Board of
Directors has decided to increase the dividend proposed to the next
shareholders general meeting, raising it to €1.80 per share from €1.30 in
2011.This decision is consistent with the new dividend policy announced by
the Group at the Investor Day held in September 2012, and its intention to
significantly increase its dividend for 2012. The shares will be quoted
ex-dividend from 6 June 2013 and the dividend will be paid as from 11 June
2013.

FULL YEAR 2012 SEGMENT PERFORMANCE

PERFORMANCE PRODUCTS (HIGH PERFORMANCE MATERIALS)

Performance Products sales reached €2,101million, against €1,952million in
2011. This +7.6% increase reflects the contribution of portfolio management
(acquisition of Hipro Polymers and Casda Biomaterials in China in biosourced
specialty polyamides (PA 10) and of alkoxylates, and divestment of the tin
stabilizer business), the optimization of the product mix, and the positive
effect of the strengthening of the US dollar against the euro. Volumes
decreased compared to last year (-3%), reflecting weak demand in Europe and
destocking in automotive and photovoltaics.

EBITDA stood at €361million against €337million  in 2011, while EBITDA
margin stayed at historically high levels, above 17%.  Despite a slowdown
towards the end of the year mostly in Europe, Technical Polymers recorded an
excellent performance which reflects their successful positioning in high
added value niche markets (biosourced polymers, lightweight materials designed
for saving energy in transport), the benefit of a unique product range in
specialty polyamides (PA 10, 11 and 12), and an evenly balanced geographic
presence between each region. Organic peroxides continued to improve their
result while optimizing their product portfolio with the divestment of the tin
stabilizer business finalized on 1^st October. The Filtration and Adsorption
activity benefited in particular from the integration of alkoxylates, and once
again recorded a very solid result.

INDUSTRIAL CHEMICALS (INDUSTRIAL SPECIALTIES & COATING SOLUTIONS)

Industrial Chemicals sales grew by 8.7% to €4,271million against
€3,928million  in 2011. This increase primarily reflects the contribution in
the first six months of the year of the specialty resins that joined the Group
on 1^st July 2011 and of the positive effect of the strengthening of the US
dollar against the euro. These effects largely offset the decrease in volumes
in the first six months compared to a high basis of comparison in 2011, and
the evolution in the price of acrylic monomers and certain fluorogases.

EBITDA stood at €678million against €725million in 2011, with a 15.9% EBITDA
margin (18.5% in 2011).

Industrial Specialties sustained very high performance levels with
€399million EBITDA and a 19.0% EBITDA margin (respectively €441million and
20.9% in 2011). All of this segment’s BUs benefited from the very solid
performance of their activities in North America (PMMA in automotive,
Thiochemicals in animal feed, Fluorogases in air-conditioning and
refrigeration, Hydrogen Peroxide), which helped partially offset the
anticipated decrease in HFC-125 margins in China as well as the slowdown in
demand for PMMA in electronics (LED TV).

Coating Solutions delivered €279million  EBITDA and a 12.8% EBITDA margin
(respectively €284million  and 15.7% in 2011). In line with the assumptions
used for 2012, market conditions in acrylic monomers returned to mid-cycle
levels following their peak in 2011. In Coating Resins, demand for decorative
paints remained weak throughout the year in Europe and North America, but was
higher in industrial coatings. Coatex’s rheology additive activities and
Sartomer’s photocure resin business confirmed their good performance,
supported by both innovation and geographic expansion such as the acquisition
of an acrylic additives and emulsions production site in Brazil.

POST BALANCE SHEET EVENTS

A very serious technical incident occurred on the Total-Naphtachimie
steamcracker at Lavéra (France) which supplies to Arkema the propylene it uses
to produce the oxo alcohols used in the manufacture of acrylic esters. The
steamcracker restart date has yet to be announced. Within the Group, the
impact of this interruption in the supply of propylene should entail a
non-recurring expense which is estimated at some €5million  for the
1^stquarter 2013.

Furthermore, this accidental shutdown of the Total-Naphtachimie steamcracker
also affects the company Kem One. Accordingly, Arkema has agreed to defer the
settlement of certain invoices representing a total outstanding amount of
€65million.

CASH FLOW AND NET DEBT AT 31 DECEMBER 2012

In 2012, Arkema generated, for its continuing operations, €206million free
cash flow^1. This flow included investments amounting to €438million against
€365million  in 2011. These investments included €351million recurring
capital expenditure, €75million  non recurring investments related to various
industrial projects in the Group (Thiochemicals platform in Malaysia, Lacq
2014 project, conversion of mercury electrolysis in Jarrie), and a €12million
investment related to a threefold increase in polyamide 10 capacity at Hipro
in China, this latter capital expenditure being included in the acquisition
flow. It also includes other exceptional items related in particular to the
consequences of the force majeure declared in polyamide 12 and to
restructuring expenses. Working capital variation was limited to -€13million,
with the working capital to sales ratio remaining well under control at 15.2%.

Net debt stood at €900million at 31 December 2012 against €603million  at 31
December 2011, i.e. 39% gearing, in line with the objective to remain below
40%. In addition to the payment of a €1.30 dividend per share totalling
€81million, net debt includes the impact of acquisitions and divestments with
a cash outflow for a net amount of €231million, primarily corresponding to
the acquisition of Hipro Polymers and Casda Biomaterials in China as well as
the acquisition of an acrylic additives and emulsions site in Brazil and the
divestment of the tin stabilizer business finalized on 1^st October.

4^TH QUARTER 2012

(In millions of euros)                4^th quarter  4^th quarter  Variation
                                       2012           2011
Sales                                 1,447         1,400         +3.4%
EBITDA                                171           158           +8.2%
EBITDA margin                         11.8%         11.3%        
Industrial Chemicals                   12.5%          10.3%
Performance Products                  9.6%          13.6%         
Recurring operating income            80            76            +5.3%
Non-recurring items                   (2)           (11)          -
Adjusted net income of continuing     44            55            -20.0%
operations
Net income – Group share              16            (463)         -
Diluted adjusted net income per
share of continuing operations (in    0.68          0.88          -22.7%
€)
                                                                     

In 4^th quarter 2012 Arkema recorded a strong performance. Sales reached
€1,447million, 3.4% up over 4^th quarter 2011, while EBITDA stood at
€171million, 8% up, with an 11.8% EBITDA margin (11.3% in 4^th quarter 2011).

The 4^th quarter 2012 was marked by the traditional seasonality of the Group’s
activities at the end of the year and the cautious management by our customers
of their inventory levels.

The Performance Products segment, and more specifically Technical Polymers,
experienced destocking in 4^th quarter in certain end-markets, in particular
in Europe and in photovoltaics as well as some delays in a few projects in the
oil and gas sector. Unit margins showed good resilience. Meanwhile, the
contribution to sales of Hipro and Casda and of alkoxylates was partly offset
by the impact of the divestment of the tin stabilizer activity.

The Industrial Chemicals results improved significantly compared to the
previous year. With a 15.7% EBITDA margin, Industrial Specialties achieved a
very sound performance, sustained by favorable market conditions in North
America. Coating Solutions, although in low season, also improved over the
previous year, and achieved a 9.1% EBITDA margin benefiting from synergies
from the integration of newly acquired activities. Volumes grew despite
ongoing sluggish demand overall in decorative paints. Coatex’s rheology
additives and Sartomer’s photocure resins performed well.

OUTLOOK

For 2013, the Group is confident in its ability to achieve once again a strong
performance while remaining cautious about the macro-economic environment.

At the beginning of the year, the weak demand observed in certain High
Performance Materials end-markets at the end of 2012 continued. However, the
Group expects a gradual recovery of volumes in this segment during the first
half of the year.

Globally, over the year, market conditions should remain contrasted. They
should be solid in North America, with a gradual recovery in decorative paints
and should remain challenging in Europe. China should progressively return to
higher growth levels. Raw material cost and exchange rates in particular for
the US dollar against the euro should remain volatile.

In line with its 2016 ambition to become a world leader in specialty chemicals
and advanced materials, Arkema will focus its efforts on implementing its
major organic growth projects such as the construction of its Thiochemicals
platform in Malaysia, its capital expenditure program in Acrylics in North
America, and its industrial developments in fluoropolymers and biosourced
specialty polyamides in China.In order to support its organic growth, the
Group plans to spend some €500million capex in 2013 and will continue to look
for bolt-on acquisitions. The Group will also continue to invest significantly
in innovation, as the projects currently underway offer promising prospects in
particular in solutions for sustainable development. Finally, the Group will
continue to strictly control its costs and cash.

Thanks to the implementation of this targeted growth strategy, Arkema confirms
its ambition to achieve, by 2016, €8billion sales and a 16% EBITDA margin
while maintaining its gearing below 40%.

The 2012 results and the outlook are detailed in the presentation “Full year
2012 results” available on the website: www.finance.arkema.com

The consolidated accounts have been audited, and an unqualified certification
report has been issued by the Company’s statutory auditors. These consolidated
financial statements at 31 December 2012 and the statutory auditors’ report
will be available from March 1^st after the closing of the financial markets
on the Company’s website (www.finance.arkema.com).

FINANCIAL CALENDAR

15 May 2013         1^st quarter 2013 results
4 June 2013            Shareholders Annual General Meeting
1^st August 2013       1^st half 2013 results
                       

A global chemical company and France’s leading chemicals producer, Arkema is
building the future of the chemical industry every day. Deploying a
responsible, innovation-based approach, we produce state-of-the-art specialty
chemicals that provide customers with practical solutions to such challenges
as climate change, access to drinking water, the future of energy, fossil fuel
preservation and the need for lighter materials. With operations in more than
40 countries, some 14,000 employees and 10 research centers, Arkema generates
annual revenue of €6.5 billion, and holds leadership positions in all its
markets with a portfolio of internationally recognized brands.

Disclaimer

The information disclosed in this press release may contain forward-looking
statements with respect to the financial conditions, results of operations,
business and strategy of Arkema. Such statements are based on management’s
current views and assumptions that could ultimately prove inaccurate and are
subject to risk factors such as, among others, changes in raw materials
prices, currency fluctuations, implementation pace of cost-reduction projects
and changes in general economic and business conditions. Arkema does not
assume any liability to update such forward-looking statements whether as a
result of any new information or any unexpected event or otherwise. Further
information on factors which could affect Arkema’s financial results is
provided in the documents filed with the French Autorité des marchés
financiers.

Balance sheet, income statement, cash flow statement, statement of changes in
shareholders’ equity and information by business segment included in this
press release are extracted from the consolidated financial statements at
31^st December 2012 closed by the Board of Directors of Arkema SA on 27
February 2013.

Quarterly financial information is not audited.

Business segment information is presented in accordance with ARKEMA’s internal
reporting system used by the management.

The main performance indicators used are as follows:

  *Operating income: this includes all income and expenses of continuing
    operations other than financial result, equity in income of affiliates and
    income taxes;
  *Other income and expenses: these correspond to a limited number of
    well-identified non-recurring items of income and expense of a
    particularly material nature that the Group presents separately in its
    income statement in order to facilitate understanding of its recurring
    operational performance. These items of income and expense notably
    include:

       *Impairment losses in respect of property, plant and equipment and
         intangible assets,
       *Gains or losses on sale of assets, acquisition expenses, badwills and
         stock valuation adjustments between the fair value on the acquisition
         date and the replacement value
       *Certain large restructuring and environmental expenses which would
         hamper the interpretation of recurring operating income (including
         substantial modifications to employee benefit plans and the effect of
         onerous contracts),
       *Certain expenses related to litigation and claims or major damages,
         whose nature is not directly related to ordinary operations;

  *Recurring operating income: this is calculated as the difference between
    operating income and other income and expenses as previously defined;
  *Adjusted net income: this corresponds to “Net income – Group share”
    adjusted for the “Group share” of the following items:

       *Other income and expenses, after taking account of the tax impact of
         these items,
       *Income and expenses from taxation of an exceptional nature, the
         amount of which is deemed significant,
       *Net income of discontinued operations;

  *EBITDA: this corresponds to recurring operating income increased by
    depreciation and amortization;
  *Working capital: this corresponds to the difference between inventories,
    accounts receivable, other receivables and prepaid expenses, income tax
    receivables and other current financial assets on the one hand and
    accounts payable, other creditors and accrued liabilities, income tax
    liabilities and other current financial liabilities on the other hand.
    These items are classified in current assets and liabilities in the
    consolidated balance sheet;
  *Capital employed: this is calculated by aggregating the net carrying
    amounts of intangible assets, property, plant and equipment, equity
    affiliate investments and loans, other investments, other non-current
    assets (excluding deferred tax assets) and working capital;
  *Recurring investments: these correspond to tangible and intangible
    investments which exclude a small number of investments of an exceptional
    nature that the Group presents separately in order to facilitate the
    analysis of cash generation in its financial communication. These
    investments characterized by their size or their nature are presented
    either as non-recurring investments or in acquisitions and divestments;
  *Net debt: this is the difference between current and non-current debt and
    cash and cash equivalents.

^1 Cash flow from operations and investments excluding the impact of portfolio
management.

                         ARKEMA Financial Statements

       Consolidated financial statements - At the end of December 2012

CONSOLIDATED INCOME STATEMENT
                                                               
                           4th quarter   End of       4th quarter   End of
                           2012          December     2011          December
                                         2012                       2011
(In millions of euros)     (audited)     (audited)    (audited)     (audited)
                                                            
                                                                    
Sales                      1,447         6,395        1,400         5,900
                                                                    
Operating expenses         (1,217)       (5,137)      (1,188)       (4,632)
Research and development   (39)          (148)        (35)          (132)
expenses
Selling and               (111)        (432)       (101)        (374)
administrative expenses
Recurring operating       80           678         76           762
income
Other income and          (2)          (27)        (11)         (45)
expenses
Operating income          78           651         65           717
Equity in income of        2             10           2             17
affiliates
Financial result           (15)          (54)         (11)          (37)
Income taxes              (20)         (186)       20           (125)
Net income of continuing  45           421         76           572
operations
Net income of             (29)         (200)       (539)        (587)
discontinued operations
Net income                16           221         (463)        (15)
Of which non-controlling  -            1           -            4
interests
Net income - Group share  16           220         (463)        (19)
Of which continuing       45           420         76           568
operations
Of which discontinued     (29)         (200)       (539)        (587)
operations
Earnings per share         0.25          3.54         (7.52)        (0.31)
(amount in euros)
Earnings per share of
continuing operations      0.71          6.75         1.24          9.22
(amount in euros)
Diluted earnings per       0.24          3.49         (7.52)        (0.31)
share (amount in euros)
Diluted earnings per
share of continuing        0.70          6.67         1.22          9.12
operations (amount in
euros)
                                                            
Depreciation and           (91)          (318)        (82)          (272)
amortization
EBITDA                     171           996          158           1,034
Adjusted net income       41           368         26           500
Adjusted net income of    44           441         55           574
continuing operations
Adjusted net income per
share of continuing        0.69          7.09         0.89          9.31
operations (amount in
euros)
Diluted adjusted net
income per share of        0.68          7.00         0.88          9.21
continuing operations
(amount in euros)
                                                                    

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                                               
                           4th quarter   End of       4th quarter   End of
                           2012          December     2011          December
                                         2012                       2011
(In millions of euros)     (audited)     (audited)    (audited)     (audited)
                                                            
Net income                16           221         (463)        (15)
Hedging adjustments        (2)           (1)          7             3
Deffered taxes on          -             -            -             1
hedging adjustments
Actuarial gains and        (44)          (87)         (45)          (28)
losses
Deffered taxes on
actuarial gains and        11            20           16            11
losses
Other items                -             -            2             2
Deffered taxes on other    -             -            -             -
items
Change in translation      (25)          (13)         55            55
adjustments
Other comprehensive
income of continuing      (60)         (81)        35           44
operations
Other comprehensive
income of discontinued    -            (7)         -            1
operations
Total income and
expenses recognized       (60)         (88)        35           45
directly in equity
Comprehensive income      (44)         133         (428)        30
Of which:                 -            1           2            6
non-controlling interest
Comprehensive income -    (44)         132         (430)        24
Group share
                                                                    

CONSOLIDATED BALANCE SHEET
                                                           
                                           31 December 2012   31 December 2011
                                                              
                                           (audited)          (audited)
(In millions of euros)
ASSETS
Intangible assets, net                     962                777
Property, plant and equipment, net         1,852              1,706
Equity affiliates : investments and        71                 66
loans
Other investments                          36                 35
Deferred tax assets                        83                 66
Other non-current assets                   147                109
                                                              
TOTAL NON-CURRENT ASSETS                  3,151             2,759
                                                              
Inventories                                920                945
Accounts receivable                        920                834
Other receivables and prepaid expenses     147                117
Income taxes recoverable                   35                 36
Other current financial assets             8                  9
Cash and cash equivalents                  360                252
                                                              
TOTAL CURRENT ASSETS                      2,390             2,193
                                                              
Assets held for sale                       -                  380
                                                          
TOTAL ASSETS                               5,541              5,332
                                                              
LIABILITIES AND SHAREHOLDERS' EQUITY
Share capital                              629                619
Paid-in surplus and retained earnings      1,587              1,484
Treasury shares                            (16)               (10)
Translation adjustments                    82                 97
                                                              
SHAREHOLDERS' EQUITY - GROUP SHARE        2,282             2,190
                                                              
Non-controlling interests                 29                27
                                                              
TOTAL SHAREHOLDERS' EQUITY                2,311             2,217
                                                              
Deferred tax liabilities                   33                 35
Provisions and other non-current           878                791
liabilities
Non-current debt                           1,071              583
                                                              
TOTAL NON-CURRENT LIABILITIES             1,982             1,409
                                                              
Accounts payable                           683                665
Other creditors and accrued liabilities    318                265
Income taxes payable                       56                 39
Other current financial liabilities        2                  12
Current debt                               189                272
                                                              
TOTAL CURRENT LIABILITIES                 1,248             1,253
                                                              
Liabilities associated with assets held    -                  453
for sale
                                                          
TOTAL LIABILITIES AND SHAREHOLDERS'        5,541              5,332
EQUITY
                                                              

CONSOLIDATED CASH FLOW STATEMENT
                                                            
                                             End of December   End of December
                                             2012              2011
(In millions of euros)
                                             (audited)         (audited)
                                                               
Cash flow - operating activities
                                                               
Net income                                   221               (15)
Depreciation, amortization and impairment    362               592
of assets
Provisions, valuation allowances and         (23)              88
deferred taxes
(Gains)/losses on sales of assets            (26)              (37)
Undistributed affiliate equity earnings      (1)               (8)
Change in working capital                    (42)              (85)
Other changes                                8                 8
                                                           
Cash flow from operating activities         499              543
Of which cash flow from operating           (157)            (153)
activities of discontinued operations
                                                               
Cash flow - investing activities
                                                               
Intangible assets and property, plant, and   (479)             (424)
equipment additions
Change in fixed asset payables               (8)               24
Acquisitions of operations, net of cash      (264)             (580)
acquired
Increase in long-term loans                  (60)              (32)
                                                               
Total expenditures                           (811)             (1 012)
                                                               
Proceeds from sale of intangible assets      41                13
and property, plant and equipment
Change in fixed asset receivables            3                 -
Proceeds from sale of operations, net of     (6)               -
cash sold
Proceeds from sale of unconsolidated         -                 45
investments
Repayment of long-term loans                 19                12
                                                               
Total divestitures                           57                70
                                                           
Cash flow from investing activities         (754)            (942)
Of which cash flow from investing           (73)             (55)
activities from discontinued operations
                                                               
Cash flow - financing activities
                                                               
Issuance (repayment) of shares and other     47                10
equity
Purchase of treasury shares                  (13)              (10)
Dividends paid to parent company             (81)              (61)
shareholders
Dividends paid to minority shareholders      (1)               0
Increase/ decrease in long-term debt         497               15
Increase/ decrease in short-term             (94)              177
borrowings and bank overdrafts
                                                           
Cash flow from financing activities         355              131
                                                               
Net increase/(decrease) in cash and cash     100               (268)
equivalents
                                                               
Effect of exchange rates and changes in      6                 (5)
scope
Cash and cash equivalents at beginning of    254               527
period
                                                           
Cash and cash equivalents at end of period  360              254
Of which cash and cash equivalents of       -                2
discontinued operations
                                                               

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
(audited)
                                                                                                        
                                                                                              Shareholders'   Non-
               Shares issued                                        Treasury shares     equity -       controlling  Shareholders'
                                                                                              Group           interests     equity
                                                                                              share
(In millions   Number      Amount  Paid-in  Retained  Translation  Number     Amount                            
of euros)                             surplus   earnings   adjustments
At January 1,  61,864,577  619     1,021    463       97           (214,080)  (10)    2,190          27           2,217
2012
Cash dividend   -           -        (81)      -          -             -          -        (81)            (1)           (82)
Issuance of     1,012,638    10       37        -          -             -           -        47              -             47
share capital
Purchase of
treasury        -            -        -         -          -             (250,000)   (13)     (13)            -             (13)
shares
Cancellation
of purchased    -            -        -         -          -             -           -        -               -             -
treasury
shares
Grants of
treasury        -            -        -         (7)        -             150,046     7        -               -             -
shares to
employees
Sale of
treasury        -            -        -         -          -             -           -        -               -             -
shares
Share-based     -            -        -         9          -             -           -        9               -             9
payments
Other          -           -       -        (2)       -            -          -       (2)            2            -
Transactions
with           1,012,638   10      (44)     -         -            (99,954)   (6)     (40)           1            (39)
shareholders
Net income      -            -        -         220        -             -           -        220             1             221
Total income
and expense
recognized     -           -       -        (73)      (15)         -          -       (88)           -            (88)
directly
through
equity
Comprehensive  -           -       -        147       (15)         -          -       132            1            133
income
At December    62,877,215  629     977      610       82           (314,034)  (16)    2,282          29           2,311
31, 2012
                                                                                                                            

INFORMATION BY BUSINESS SEGMENT
(non audited)
                                                                    
                                  4th quarter 2012
(In millions of euros)            Industrial   Performance   Corporate   Total
                                  Chemicals    Products
                                                                         
Non-Group sales                   994          447           6           1,447
Inter segment sales               30           2             -
Total sales                      1,024       449          6          
EBITDA                           124         43           4          171
Depreciation and amortization    (56)        (29)         (6)        (91)
Recurring operating income       68          14           (2)        80
Other income and expenses         (7)          5             -           (2)
Operating income                 61          19           (2)        78
Equity in income of affiliates    -            -             2           2
                                                                         
Intangible assets and property,   102          49            5           156
plant and equipment additions
Of which recurring capex          79           43            5           127
                                                                         
                                  4th quarter 2011
(In millions of euros)            Industrial   Performance   Corporate   Total
                                  Chemicals    Products
                                                                         
Non-Group sales                   938          457           5           1,400
Inter segment sales               42           3             -
Total sales                      980         460          5          
EBITDA                           97          62           (1)        158
Depreciation and amortization    (54)        (29)         1          (82)
Recurring operating income       43          33           -          76
Other income and expenses         (37)         33            (7)         (11)
Operating income                 6           66           (7)        65
Equity in income of affiliates    -            -             2           2
                                                                         
Intangible assets and property,   124          36            6           166
plant and equipment additions
Of which recurring capex          89           36            6           131
                                                                         

INFORMATION BY BUSINESS SEGMENT
(non audited)
                                                                   
                     1st quarter 2012
(In millions of      High          Industrial    Coating
euros)               Performance   Specialties   Solutions   Corporate   Total
                     Materials
                                                                         
                                                                         
Non-Group sales      534           532           551         6           1,623
Inter segment        7             32            27          -
sales
Total sales         541          564          578        6          
EBITDA              102          97           73         (19)       253
Depreciation and    (26)         (27)         (20)       -          (73)
amortization
Recurring           76           70           53         (19)       180
operating income
Other income and     -             1             (1)         -           -
expenses
Operating income    76           71           52         (19)       180
Equity in income     -             -             -           3           3
of affiliates
                                                                         
Intangible assets
and property,
plant and            16            23            28          4           71
equipment
additions
Of which recurring   16            15            24          4           59
capex
                                                                         
                     2nd quarter 2012
(In millions of      High          Industrial    Coating
euros)               Performance   Specialties   Solutions   Corporate   Total
                     Materials
                                                                         
                                                                         
Non-Group sales      572           566           575         6           1,719
Inter segment        5             34            21          -
sales
Total sales         577          600          596        6          
EBITDA              109          125          83         (11)       306
Depreciation and    (27)         (29)         (20)       (1)        (77)
amortization
Recurring           82           96           63         (12)       229
operating income
Other income and     (25)          3             (2)         (1)         (25)
expenses
Operating income    57           99           61         (13)       204
Equity in income     -             -             -           3           3
of affiliates
                                                                         
Intangible assets
and property,
plant and            33            40            32          4           109
equipment
additions
Of which recurring   33            26            27          3           89
capex
                                                                         
                     3rd quarter 2012
(In millions of      High          Industrial    Coating
euros)               Performance   Specialties   Solutions   Corporate   Total
                     Materials
                                                                         
                                                                         
Non-Group sales      548           496           557         5           1,606
Inter segment        3             27            16          -
sales
Total sales         551          523          573        5          
EBITDA              107          98           78         (17)       266
Depreciation and    (27)         (28)         (21)       (1)        (77)
amortization
Recurring           80           70           57         (18)       189
operating income
Other income and     2             3             (2)         (3)         -
expenses
Operating income    82           73           55         (21)       189
Equity in income     1             -             -           1           2
of affiliates
                                                                         
Intangible assets
and property,
plant and            24            38            33          7           102
equipment
additions
Of which recurring   18            21            29          8           76
capex
                                                                         
                     4th quarter 2012
(In millions of      High          Industrial    Coating
euros)               Performance   Specialties   Solutions   Corporate   Total
                     Materials
                                                                         
                                                                         
Non-Group sales      447           502           492         6           1,447
Inter segment        2             16            14          -
sales
Total sales         449          518          506        6          
EBITDA              43           79           45         4          171
Depreciation and    (29)         (30)         (26)       (6)        (91)
amortization
Recurring           14           49           19         (2)        80
operating income
Other income and     5             (4)           (3)         -           (2)
expenses
Operating income    19           45           16         (2)        78
Equity in income     -             -             -           2           2
of affiliates
                                                                         
Intangible assets
and property,
plant and            49            58            44          5           156
equipment
additions
Of which recurring   43            36            43          5           127
capex
                                                                         

INFORMATION BY BUSINESS SEGMENT
(audited)
                                                                    
                                  End of December 2012
(In millions of euros)            Industrial   Performance   Corporate   Total
                                  Chemicals    Products
                                                                         
Non-Group sales                   4,271        2,101         23          6,395
Inter segment sales               187          17            -
Total sales                      4,458       2,118        23         
EBITDA                           678         361          (43)       996
Depreciation and amortization    (201)       (109)        (8)        (318)
Recurring operating income       477         252          (51)       678
Other income and expenses         (5)          (18)          (4)         (27)
Operating income                 472         234          (55)       651
Equity in income of affiliates    -            1             9           10
                                                                         
Intangible assets and property,   296          122           20          438
plant and equipment additions
Of which recurring capex          221          110           20          351
                                                                         
                                  End of December 2011
(In millions of euros)            Industrial   Performance   Corporate   Total
                                  Chemicals    Products
                                                                         
Non-Group sales                   3,928        1,952         20          5,900
Inter segment sales               181          17            -
Total sales                      4,109       1,969        20         
EBITDA                           725         337          (28)       1,034
Depreciation and amortization    (172)       (99)         (1)        (272)
Recurring operating income       553         238          (29)       762
Other income and expenses         (80)         33            2           (45)
Operating income                 473         271          (27)       717
Equity in income of affiliates    -            1             16          17
                                                                         
Intangible assets and property,   246          100           19          365
plant and equipment additions
Of which recurring capex          192          100           19          311
                                                                         

INFORMATION BY BUSINESS SEGMENT
(audited)
                                                                   
                     End of December 2012
(In millions of      High          Industrial    Coating
euros)               Performance   Specialties   Solutions   Corporate   Total
                     Materials
                                                                         
                                                                         
Non-Group sales      2,101         2,096         2,175       23          6,395
Inter segment        17            109           78          -
sales
Total sales         2,118        2,205        2,253      23         
EBITDA              361          399          279        (43)       996
Depreciation and    (109)        (114)        (87)       (8)        (318)
amortization
Recurring           252          285          192        (51)       678
operating income
Other income and     (18)          3             (8)         (4)         (27)
expenses
Operating income    234          288          184        (55)       651
Equity in income     1             -             -           9           10
of affiliates
                                                                         
Intangible assets
and property,
plant and            122           159           137         20          438
equipment
additions
Of which recurring   110           98            123         20          351
capex
                                                                         
                     End of December 2011
(In millions of      High          Industrial    Coating
euros)               Performance   Specialties   Solutions   Corporate   Total
                     Materials
                                                                         
                                                                         
Non-Group sales      1,952         2,114         1,814       20          5,900
Inter segment        17            99            82          -
sales
Total sales         1,969        2,213        1,896      20         
EBITDA              337          441          284        (28)       1,034
Depreciation and    (99)         (109)        (63)       (1)        (272)
amortization
Recurring           238          332          221        (29)       762
operating income
Other income and     33            (30)          (50)        2           (45)
expenses
Operating income    271          302          171        (27)       717
Equity in income     1             -             -           16          17
of affiliates
                                                                         
Intangible assets
and property,
plant and            100           126           120         19          365
equipment
additions
Of which recurring   100           98            94          19          311
capex
                                                                         
                     End of December 2010
(In millions of      High          Industrial    Coating
euros)               Performance   Specialties   Solutions   Corporate   Total
                     Materials
                                                                         
                                                                         
Non-Group sales     1,680        1,955        1,216      18         4,869
EBITDA              257          355          213        (16)       809
Depreciation and    (93)         (103)        (49)       (2)        (247)
amortization
Recurring           164          252          164        (18)       562
operating income
                                                                         
Intangible assets
and property,
plant and            109           89            62          5           265
equipment
additions
                                                                         

Contact:

Arkema
Investor Relations:
Sophie Fouillat: +33 1 49 00 86 37
sophie.fouillat@arkema.com
Jérôme Raphanaud: +33 1 49 00 72 07
jerome.raphanaud@arkema.com
or
Press Relations:
Gilles Galinier: +33 1 49 00 70 07
gilles.galinier@arkema.com
Sybille Chaix: +33 1 49 00 70 30
sybille.chaix@arkema.com
 
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