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Arkema: 2nd Quarter 2013 Results



  Arkema: 2nd Quarter 2013 Results

            Solid Performance in a Contrasted Economic Environment

  * €1,629 million sales, 1.7% down at constant exchange rate and scope of
    business
  * Volumes +3.5% up, mainly supported by Coating Solutions segment
  * €273 million EBITDA and 16.8% EBITDA margin

       * High Performance Materials result significantly up versus 1^st
         quarter 2013 but down versus high basis of comparison of 2012
       * Strong margin in Industrial Specialties despite adverse impact of
         weather conditions on fluorogases
       * Resilient performance of Coating Solutions but mixed results between
         the regions

  * €112 million net income Group share, i.e. 7% of sales

Business Wire

COLOMBES, France -- August 1, 2013

Regulatory News:

The Board of Directors of Arkema (Paris:AKE) met on July 31^st 2013 to close
the condensed consolidated accounts of Arkema for 1^st half 2013. At the end
of the meeting, Thierry Le Hénaff, Chairman and CEO, stated:

« In 2^nd quarter, Arkema confirmed the strength of its results in a less
favorable economic environment than last year which also shows strong
disparities from one geographic region to another. Market conditions in Europe
are challenging, in particular in France where growth prospects have
deteriorated since the end of last year and where the Group continues to
consider ways to improve its productivity. Nevertheless, the Group benefited
from its balanced geographic presence worldwide, its growing footprint in
North America, and its diversified end-markets and continued to benefit from
its positioning in high added value specialty businesses.

The Group actively reinforced its assets as shown by the capacity extension of
its acrylic production capacities in North America in the 2^nd quarter, and
the construction of its Thiochemicals platform in Malaysia. »

2^ND QUARTER 2013 KEY FIGURES

(In millions of euros)         2^nd quarter       2^nd quarter       Variation
                               2012               2013
Sales                          1,719              1,629              -5.2%
EBITDA                         306                273                -10.8%
EBITDA margin                  17.8%              16.8%             
High Performance               19.1%              19.5%
Materials
Industrial Specialties         22.1%              21.1%
Coating Solutions              14.4%              14.0%               
Recurring operating            229                195                -14.8%
income
Non-recurring items            (25)               (13)               n.a.
Adjusted net income*           151                124                -17.9%
Net income – Group share       (12)               112                n.a.
Diluted adjusted net           2.40               1.96               -18.3%
income per share* (in €)

* For 2^nd quarter 2012, adjusted net income of continuing operations
(excluding impact of vinyl activities sold beginning of July 2012).

2^ND QUARTER 2013 PERFORMANCE

Sales in 2^nd quarter 2013 stood at €1,629 million against €1,719 million in
2^nd quarter 2012. The +3.5% growth in volumes was mainly supported by the
Coating Solutions segment which benefited from an increasing presence in North
America where the housing market has been gradually improving. The -5.2% price
/ product mix effect reflected in particular the decrease in certain raw
material costs and a different product mix than in 2012 in High Performance
Materials. The -2.3% scope of business effect related to the divestment of the
tin stabilizer business finalized on 1^st October 2012. The -1.2% translation
effect mostly corresponded to the slight strengthening of the euro versus the
US dollar.

In an economic environment that was less favorable than last year, EBITDA, as
expected, stood at €273 million in-between the high reference of the 2^nd
quarter 2012 (€306 million) and the 1^st quarter of 2013 (€234 million),
thereby confirming the strength of the portfolio of the Group’s specialty
activities and its balanced geographic presence. The performance of High
Performance Materials improved compared to 1^st quarter 2013, but was still
below last year due to ongoing weak demand in the photovoltaic market and to
delays in certain oil and gas projects. Industrial Specialties continued to
deliver a high level of performance despite weaker fluorogas business versus
last year. Coating Solutions reported a strong and stable result compared with
last year, with improving conditions in North America offsetting the more
challenging market conditions in decorative paints and construction in Europe.
Finally, EBITDA was negatively impacted by the strengthening of euro versus US
dollar and by the drop of the yen which resulted in a negative transaction
effect.

EBITDA margin maintained a very good level at 16.8% and once again stood among
the highest in the industry.

Recurring operating income stood at €195 million against €229 million in 2^nd
quarter 2012, following deduction of €78 million depreciation and
amortization, virtually stable compared to last year.

Non-recurring items stood at -€13 million against -€25 million in 2^nd quarter
2012. They included in particular some restructuring charges. In 2^nd quarter
2012, these items mostly included the impact of the shortage in the supply of
CDT (the raw material for polyamide 12) amounting to -€16 million in total as
well as various charges related to divestment and acquisition operations.

Financial result stood at -€13 million, close to 2^nd quarter 2012
(-€14 million).

Income taxes amounted to €57 million, i.e. 29.2% of recurring operating
income. They included a €3 million tax due on the dividend paid in June 2013.
Excluding this tax, the tax rate would stand at 27.7% of the recurring
operating income, reflecting the geographic spread of the results with a
significant part of the Group’s results achieved in North America and a
smaller part in Europe.

Net income Group share stood at €112 million against a -€12 million loss in
2^nd quarter 2012.

SEGMENT PERFORMANCE IN 2^ND QUARTER 2013

HIGH PERFORMANCE MATÉRIALS

High Performance Materials sales reached €477 million against €572 million in
2^nd quarter 2012. The divestment of the tin stabilizer activities represented
nearly half of the sales decrease. The negative price effect mostly reflected
the lower raw material costs and a different product mix than in 2012.
Finally, volumes were slightly down compared to last year.

With €93 million EBITDA and a 19.5% EBITDA margin, the performance of the
segment showed a significant improvement compared to 1^st quarter 2013
(€70 million EBITDA) while being below the 2^nd quarter 2012 (€109 million
EBITDA). The decrease compared to 2012 resulted mainly from weaker demand in
photovoltaic market and by delays in some oil and gas projects already
mentioned in the 1^st quarter 2013. Specialty Polyamides delivered an
excellent performance which reflected the innovation momentum in the field of
lightweight materials and a stronger seasonality than expected. The Organic
Peroxides EBITDA margin benefited from its reshaped portfolio of businesses
following the divestment of the tin stabilizer business.

INDUSTRIAL SPECIALTIES

With an EBITDA margin above 21%, the performance of Industrial Specialties
segment was maintained at a very high level despite fluorogas business being
down versus last year on adverse weather conditions in Europe and competitive
pressure in China and Europe on certain gases. Sales reached €540 million
against €566 million in 2^nd quarter 2012. EBITDA stood at €114 million
reflecting the ongoing favorable environment in the United States where the
Group has developed over the years a strong industrial presence.

The solid results of Thiochemicals were supported by refining and
petrochemicals markets in the US. In PMMA, performances in North America and
in Europe were mixed reflecting different momentum in the automotive and
construction markets by region. Finally, Hydrogen Peroxide performance
remained stable overall.

COATING SOLUTIONS

Coating Solutions sales reached €602 million against €575 million in 2^nd
quarter 2012. This 4.7% increase reflected mostly higher volumes in North
America, supported by a gradual improvement in demand in the residential
housing market and the startup of the acrylic acid production capacity
extension in Clear Lake (Texas).

EBITDA stood at €84 million and EBITDA margin at 14.0% against €83 million and
14.4% respectively in 2^nd quarter 2012. Acrylics benefited from volumes up
year-on-year while unit margins were lower than their high level of the 2^nd
quarter 2012 which was then supported by sharply decreasing propylene prices.
Market conditions in Coating Resins remained mixed. Demand grew in North
America, but remained lackluster in Europe where weather conditions remained
adverse in the quarter. Finally, the performance of Sartomer and Coatex
remained resilient sustained by new product development.

HIGHLIGHTS SINCE 1^ST APRIL 2013

Organic growth projects

On 5^th June 2013, Arkema announced the startup of the acrylic acid capacity
extension at its Clear Lake site in the United States. This project, which
raises the site’s capacity to some 270KT per year, represents the main part of
the US$110 M investment plan announced in November 2010.

On 18^th June 2013, Arkema announced a 15% increase in its bis-peroxide global
capacities at both its Spinetta (Italy) and Franklin (Virginia, United States)
sites. These new capacities, already operational, represent the first stage of
a program designed to increase bis-peroxyde global capacity by 30% by end of
2014. These will help meet strong demand in the synthetic rubber industry for
crosslinking agents, in particular in Asia, while also supporting recent
developments.

Acquisitions

Arkema completed two acquisitions in line with its strategy in High
Performance Materials:

  * Securing access to its strategic raw materials:

On 11^th April 2013, Arkema signed an agreement with Indian company Jayant
Agro, one of the world leading producers of castor oil and derivatives, with a
view to acquiring a stake of around 25% in Ihsedu Agrochem, one of its
subsidiaries specializing in castor oil production. This operation will
provide Arkema with competitive and secure long-term access to this strategic
raw material for the manufacture of its biosourced polyamides (PA 10 and PA
11). This project should be finalized in 3^rd quarter 2013.

  * Speeding up development through innovation:

On 3^rd April 2013, Arkema announced its acquisition of a majority stake in
AEC Polymers, which produces in particular structural adhesives from
methacrylates developed by an Arkema technology.

Other highlights

On 3^rd July 2013, the Fonds Stratégique de Participation (FSP), a mutual fund
set up by four major insurance companies in France – BNP Paribas Cardif, CNP
Assurances, Crédit Agricole Assurances through its subsidiary Predica, and
Sogécap (Société Générale Group) – in order to promote long-term investment in
listed companies, announced that it now owns 6% of Arkema’s share capital.

Arkema considers this acquisition of a stake in its share capital as a
positive sign showing the confidence of the FSP in the long-term strategy
implemented by the Group and in its management.

With a prospect of maintaining a long-term investment of at least 6% of
Arkema's share capital, the FSP has shared with the Board of Directors its
intent to seek the appointment of a representative on the Board of Directors.
The Board of Directors will consider favorably this request for the
appointment of an independent representative made by the FSP.

1^ST HALF 2013 KEY FIGURES

(In millions of euros)               1^st half       1^st half       Variation
                                     2012            2013
Sales                                3,342           3,192           -4.5%
EBITDA                               559             507             -9.3%
EBITDA margin                        16.7%           15.9%          
High Performance Materials           19.1%           17.6%
Industrial Specialties               20.2%           20.2%
Coating Solutions                    13.9%           13.8%            
Recurring operating income           409             353             -13.7%
Non-recurring items                  (25)            (140)           n.a.
Adjusted net income*                 274             221             -19.3%
Net income – Group share             88              82              -6.8%
Diluted adjusted net income          4.37            3.49            -20.1%
per share* (in €)

* For 1^st half 2012, adjusted net income of continuing operations (excluding
impact of vinyl activities sold beginning of July 2012).

CASH FLOW AND NET DEBT AT 30^TH JUNE 2013

In 2^nd quarter 2013, free cash flow^1  stood at +€44 million against
-€28 million in 2^nd quarter 2012. Over the 1^st half of the year, it stood at
-€16 million against -€23 million in 1^st half 2012. On the first 6 months,
this flow included a -€156 million variation in working capital related to the
traditional increase in sales in the first half of the year. The working
capital to sales ratio, however, remained well under control at 17.3%, at the
same level as at 30^th June 2012. Capital expenditure reached €174 million in
the first six months and should accelerate in the 2^nd half of the year, as it
is the case each year, to reach €500 million for the full year 2013.

The Group also paid on 11^th June a €1.80 dividend per share, totaling
€113 million. Moreover, as part of its commitments previously made regarding
Kem One, Arkema cashed out an amount of €75 million in the 2^nd quarter. This
amount was already fully booked in the accounts at the end of the 1^st
quarter.

Net debt stood at €1,150 million at 30^th June 2013 (€900 million at 31^st
December 2012), i.e. 49.6% gearing, close to last year’s level (48.7% at 30^th
June 2012). However, the Group confirmed its objective to reduce its gearing
to around 40% by the end of the year.

^1 Cash flow from operations and investments, excluding impact of portfolio
management and before the impact of cash-outs related to Kem One situation.

OUTLOOK

Market conditions in the second half of the year should be in the continuity
of the first half of the year with a marked contrast by regions and a limited
visibility. They should continue to be solid in North America, and challenging
but stable in Europe. In Asia, China in particular, growth should remain
slower than expected. High Performance Materials should continue to be
impacted in the 3^rd quarter by the weakness in photovoltaic market and delays
in some oil and gas projects. However, those markets should as expected
improve by year end.

In this environment, Arkema should achieve in the second half of the year an
EBITDA similar to the record level of the 2^nd half of 2012. Compared to 2012,
the 3^rd quarter EBITDA should be lower than the high reference of last year
and the 4^th quarter stronger. The Group thereby confirms its ability to
achieve a strong annual performance in a macro-economic environment that is
less favorable than in 2012. The Group, however, will continue to carefully
monitor the macro-economic environment developments and will implement the
necessary adjustment initiatives if it was to be necessary.

The Group continues to implement its focused growth strategy with several
progresses and confirms its ambition for 2016 to achieve €8 billion sales and
16% EBITDA margin while maintaining gearing below 40%.

The 2^nd quarter 2013 results and the outlook are detailed in the presentation
“2^nd Quarter 2013 Results and Highlights” available on the website:
www.finance.arkema.com. The 1^st Half 2013 Financial Report is also available
on the website.

FINANCIAL CALENDAR

7^th November 2013       Publication of 3^rd quarter 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 €6.4 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 30
June 2013 closed by the Board of Directors of Arkema SA on 31 July 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.

 
ARKEMA Financial Statements
 
 
Consolidated financial statements - At the end of June 2013
 
 

CONSOLIDATED INCOME STATEMENT
 
 
                       2^nd           End of          2^nd           End of
                       quarter        June 2013       quarter        June 2012
                       2013                           2012
(In millions of        (non           (audited)       (non           (audited)
euros)                 audited)                       audited)
                                                                      
                                                                      
                                                                      
Sales                  1,629          3,192           1,719          3,342
                                                                      
Operating              (1,293)        (2,549)         (1,348)        (2,645)
expenses
Research and
development            (37)           (76)            (36)           (74)
expenses
Selling and
administrative         (104)          (214)           (106)          (214)
expenses
Recurring              195            353             229            409
operating income
Other income and       (13)           (140)           (25)           (25)
expenses
Operating income       182            213             204            384
Equity in income       1              3               3              6
of affiliates
Financial result       (13)           (27)            (14)           (25)
Income taxes           (57)           (106)           (63)           (112)
Net income of
continuing             113            83              130            253
operations
Net income of
discontinued           -              -               (141)          (164)
operations
Net income             113            83              (11)           89
Of which
non-controlling        1              1               1              1
interests
Net income -           112            82              (12)           88
Group share
Of which
continuing             112            82              129            252
operations
Of which
discontinued           -              -               (141)          (164)
operations
Earnings per
share (amount in       1.79           1.31            (0.20)         1.42
euros)
Earnings per
share of
continuing             1.79           1.31            2.08           4.07
operations
(amount in
euros)
Diluted earnings
per share              1.77           1.29            (0.20)         1.40
(amount in
euros)
Diluted earnings
per share of
continuing             1.77           1.29            2.05           4.02
operations
(amount in
euros)
                                                                      
Depreciation and       (78)           (154)           (77)           (150)
amortization
EBITDA                 273            507             306            559
Adjusted net
income of              124            221             151            274
continuing
operations
Adjusted net
income per share
of continuing          1.98           3.53            2.43           4.42
operations
(amount in
euros)
Diluted adjusted
net income per
share of
continuing             1.96           3.49            2.40           4.37
operations
(amount in
euros)
                                                                      
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
 
 
                       2^nd           End of          2^nd           End of
                       quarter        June 2013       quarter        June 2012
                       2013                           2012
(In millions of        (non           (audited)       (non           (audited)
euros)                 audited)                       audited)
                                                                      
Net income             113            83              (11)           89
Hedging                1              (2)             1              (6)
adjustments
Other items            -              -               -              -
Deffered taxes
on hedging             -              -               -              -
adjustments and
other items
Change in
translation            (37)           1               79             40
adjustments
Other recyclable
comprehensive
income of              (36)           (1)             80             34
continuing
operations
Actuarial gains        41             41              (44)           (44)
and losses
Deffered taxes
on actuarial           (16)           (16)            9              9
gains and losses
Other
non-recyclable
comprehensive          25             25              (35)           (35)
income of
continuing
operations
Other
comprehensive
income of              (11)           24              45             (1)
continuing
operations
Other
comprehensive
income of              -              -               1              (5)
discontinued
operations
Total income and
expenses
recognized             (11)           24              46             (6)
directly in
equity
Comprehensive          102            107             35             83
income
Of which:
non-controlling        -              1               2              1
interest
Comprehensive
income - Group         102            106             33             82
share
                                                                      

CONSOLIDATED BALANCE SHEET
 
 
                                            30 June 2013           31 December
                                                                   2012
                                                                    
                                            (audited)              (audited)
(In millions of euros)
ASSETS
                                                                    
Intangible assets, net                      969                    962
Property, plant and equipment, net          1,876                  1,852
Equity affiliates : investments and         67                     71
loans
Other investments                           58                     36
Deferred tax assets                         67                     83
Other non-current assets                    151                    147
                                                                    
TOTAL NON-CURRENT ASSETS                    3,188                  3,151
                                                                    
Inventories                                 954                    920
Accounts receivable                         1,024                  920
Other receivables and prepaid               172                    147
expenses
Income taxes recoverable                    27                     35
Other current financial assets              3                      8
Cash and cash equivalents                   299                    360
                                                                    
TOTAL CURRENT ASSETS                        2,479                  2,390
                                                                    
Assets held for sale                        -                      -
                                                                    
TOTAL ASSETS                                5,667                  5,541
                                                                    
                                                                    
LIABILITIES AND SHAREHOLDERS' EQUITY
                                                                    
Share capital                               629                    629
Paid-in surplus and retained earnings       1,581                  1,587
Treasury shares                             (12)                   (16)
Translation adjustments                     83                     82
                                                                    
SHAREHOLDERS' EQUITY - GROUP SHARE          2,281                  2,282
                                                                    
Non-controlling interests                   36                     29
                                                                    
TOTAL SHAREHOLDERS' EQUITY                  2,317                  2,311
                                                                    
Deferred tax liabilities                    43                     33
Provisions for pensions and other           392                    432
employee benefits
Other provisions and non-current            413                    446
liabilities
Non-current debt                            1,068                  1,071
                                                                    
TOTAL NON-CURRENT LIABILITIES               1,916                  1,982
                                                                    
Accounts payable                            739                    683
Other creditors and accrued                 272                    318
liabilities
Income taxes payable                        40                     56
Other current financial liabilities         2                      2
Current debt                                381                    189
                                                                    
TOTAL CURRENT LIABILITIES                   1,434                  1,248
                                                                    
Liabilities associated with assets          -                      -
held for sale
                                                                    
TOTAL LIABILITIES AND SHAREHOLDERS'         5,667                  5,541
EQUITY
 
 
CONSOLIDATED CASH FLOW STATEMENT
 
 
                                            End of June 2013       End of June
                                                                   2012
(In millions of euros)
                                            (audited)              (audited)
                                                                    
Cash flow - operating activities
                                                                    
Net income                                  83                     89
Depreciation, amortization and              155                    188
impairment of assets
Provisions, valuation allowances and        (24)                   14
deferred taxes
(Gains)/losses on sales of assets           (4)                    (10)
Undistributed affiliate equity              6                      3
earnings
Change in working capital                   (156)                  (209)
Other changes                               4                      3
                                                                    
Cash flow from operating activities         64                     78
Of which cash flow from operating           -                      (123)
activities of discontinued operations
                                                                    
Cash flow - investing activities
                                                                    
Intangible assets and property,             (174)                  (217)
plant, and equipment additions
Change in fixed asset payables              (25)                   (32)
Acquisitions of operations, net of          (10)                   (243)
cash acquired
Increase in long-term loans                 (16)                   (25)
                                                                    
Total expenditures                          (225)                  (517)
                                                                    
Proceeds from sale of intangible
assets and property, plant and              5                      13
equipment
Change in fixed asset receivables           -                      -
Proceeds from sale of operations, net       -                      -
of cash sold
Proceeds from sale of unconsolidated        -                      -
investments
Repayment of long-term loans                14                     8
                                                                    
Total divestitures                          19                     21
                                                                    
Cash flow from investing activities         (206)                  (496)
Of which cash flow from investing
activities from discontinued                -                      (48)
operations
                                                                    
Cash flow - financing activities
                                                                    
Issuance (repayment) of shares and          8                      33
other equity
Purchase of treasury shares                 -                      (13)
Dividends paid to parent company            (113)                  (81)
shareholders
Dividends paid to minority                  -                      (1)
shareholders
Increase/ decrease in long-term debt        (5)                    226
Increase/ decrease in short-term            191                    106
borrowings and bank overdrafts
                                                                    
Cash flow from financing activities         81                     270
                                                                    
Net increase/(decrease) in cash and         (62)                   (148)
cash equivalents
                                                                    
Effect of exchange rates and changes        1                      1
in scope
Cash and cash equivalents at                360                    254
beginning of period
                                                                    
Cash and cash equivalents of
discontinued operations at end of           -                      -
period
Cash advance granted to discontinued        -                      -
operations
                                                                    
Cash and cash equivalents at end of         299                    107
period
Of which cash and cash equivalents of       -                      -
discontinued operations
                                                                    

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
(audited)
                                                                                                                                                                     
                    Shares issued                                                                Treasury shares              Shareholders'       Non-             
                                                                                                                              equity -            controlling       Shareholders'
(In millions        Number           Amount       Paid-in       Retained       Translation       Number          Amount       Group               interests         equity
of euros)                                         surplus       earnings       adjustments                                    share
At January 1,       62,877,215       629          977           610            82                (314,034)       (16)         2,282               29                2,311
2013
Cash dividend       -                -            (113)         -              -                 -               -            (113)               -                 (113)
Issuance of         70,958           -            2             -              -                 -               -            2                   -                 2
share capital
Purchase of
treasury            -                -            -             -              -                 -               -            -                   -                 -
shares
Cancellation
of purchased        -                -            -             -              -                 -               -            -                   -                 -
treasury
shares
Grants of
treasury            -                -            -             (4)            -                 87,060          4            -                   -                 -
shares to
employees
Sale of
treasury            -                -            -             -              -                 -               -            -                   -                 -
shares
Share-based         -                -            -             4              -                 -               -            4                   -                 4
payments
Other               -                -            -             -              -                 -               -            -                   6                 6
Transactions
with                70,958           -            (111)         -              -                 87,060          4            (107)               6                 (101)
shareholders
Net income          -                -            -             82             -                 -               -            82                  1                 83
Total income
and expense
recognized          -                -            -             23             1                 -               -            24                  -                 24
directly
through
equity
Comprehensive       -                -            -             105            1                 -               -            106                 1                 107
income
At June 30,         62,948,173       629          866           715            83                (226,974)       (12)         2,281               36                2,317
2013
                                                                                                                                                                     

INFORMATION BY BUSINESS SEGMENT
(non audited)
                                                                                      
                                                                                        
                   2^nd quarter 2013
(In millions       High              Industrial        Coating
of euros)          Performance       Specialties       Solutions       Corporate       Total
                   Materials
                                      
                                                                                        
Non-Group          477               540               602             10              1,629
sales
Inter
segment            3                 26                21              -
sales
Total sales        480               566               623             10               
EBITDA             93                114               84              (18)            273
Depreciation
and                (25)              (29)              (23)            (1)             (78)
amortization
Recurring
operating          68                85                61              (19)            195
income
Other income       (5)               -                 (4)             (4)             (13)
and expenses
Operating          63                85                57              (23)            182
income
Equity in
income of          -                 -                 -               1               1
affiliates
                                                                                        
Intangible
assets and
property,          18                49                25              7               99
plant and
equipment
additions
Of which
recurring          15                22                25              7               69
capex
                                                                                        
                   2^nd quarter 2012
(In millions       High              Industrial        Coating
of euros)          Performance       Specialties       Solutions       Corporate       Total
                   Materials
                                                                                        
                                                                                        
Non-Group          572               566               575             6               1,719
sales
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
operating          82                96                63              (12)            229
income
Other income       (25)              3                 (2)             (1)             (25)
and expenses
Operating          57                99                61              (13)            204
income
Equity in
income of          -                 -                 -               3               3
affiliates
                                                                                        
Intangible
assets and
property,          33                40                32              4               109
plant and
equipment
additions
Of which
recurring          33                26                27              3               89
capex
                                                                                        
                                                                                        
                                                                                        
INFORMATION BY BUSINESS SEGMENT
(audited)
                                                                                        
                                                                                        
                   End of June 2013
(In millions       High              Industrial        Coating
of euros)          Performance       Specialties       Solutions       Corporate       Total
                   Materials
                                                                                        
                                                                                        
Non-Group          925               1,079             1,164           24              3,192
sales
Inter
segment            6                 52                42              -
sales
Total sales        931               1,131             1,206           24               
EBITDA             163               218               161             (35)            507
Depreciation
and                (51)              (57)              (45)            (1)             (154)
amortization
Recurring
operating          112               161               116             (36)            353
income
Other income       (7)               -                 (5)             (128)           (140)
and expenses
Operating          105               161               111             (164)           213
income
Equity in
income of          -                 -                 -               3               3
affiliates
                                                                                        
Intangible
assets and
property,          31                85                45              13              174
plant and
equipment
additions
Of which
recurring          27                35                44              13              119
capex
                                                                                        
                                                                                        
                                                                                        
                   End of June 2012
(In millions       High              Industrial        Coating
of euros)          Performance       Specialties       Solutions       Corporate       Total
                   Materials
                                                                                        
                                                                                        
Non-Group          1,106             1,098             1,126           12              3,342
sales
Inter
segment            12                66                48              -
sales
Total sales        1,118             1,164             1,174           12               
EBITDA             211               222               156             (30)            559
Depreciation
and                (53)              (56)              (40)            (1)             (150)
amortization
Recurring
operating          158               166               116             (31)            409
income
Other income       (25)              4                 (3)             (1)             (25)
and expenses
Operating          133               170               113             (32)            384
income
Equity in
income of          -                 -                 -               6               6
affiliates
                                                                                        
Intangible
assets and
property,          49                63                60              8               180
plant and
equipment
additions
Of which
recurring          49                41                51              7               148
capex

Contact:

Arkema
Investor Relations:
Sophie Fouillat, +33 1 49 00 86 37
sophie.fouillat@arkema.com
or
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
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