Arkema Reports Solid Cash Flow and Operational Discipline Amid a Challenging Market Environment
Arkema delivered a very solid level of cash flow generation in the third quarter of 2025, once again demonstrating the Group’s strong operational discipline and financial resilience in a persistently challenging economic environment. Despite subdued global demand and regional market headwinds, Arkema continued to execute its strategic priorities focused on innovation, cost efficiency, and value creation.
Solid Cash Flow Generation Despite Market Weakness
In the third quarter of 2025, Arkema generated sales of €2.2 billion, representing a 4.7% decline year-on-year at constant exchange rates. This performance reflects the broader macroeconomic softness across key geographies, particularly in the United States and Europe, where industrial activity and construction demand remained subdued. Nevertheless, the Group’s disciplined management of operations and focus on strategic markets supported solid cash flow generation and a continued reduction in net debt.
Volumes decreased by 2.5% compared with the same period in 2024, primarily due to weaker demand in the United States during the summer months and persistent softness across Europe. In contrast, Asia – and notably China – showed more resilience, helping to partially offset these declines.
Encouragingly, Arkema recorded approximately 20% year-on-year sales growth in several strategic and high-value markets that lie at the core of its innovation-driven growth strategy. These include batteries, sports, 3D printing, healthcare, and new-generation fluorospecialties. These segments reflect Arkema’s successful efforts to pivot toward sustainable and advanced material solutions aligned with long-term market trends.
Pricing had a negative impact of 3.7%, driven primarily by cyclical factors in the acrylic value chain and pricing pressure in older-generation refrigerant gases. However, prices across the rest of the Group’s activities remained relatively stable, underscoring Arkema’s diversified portfolio and its ability to maintain a solid pricing structure in most business lines.
EBITDA and Profitability Impacted by Market Conditions
Arkema’s EBITDA totaled €310 million for the quarter, compared with €407 million in the third quarter of 2024, reflecting a decline linked to lower volumes and less favorable market dynamics. The EBITDA margin stood at 14.2%, highlighting continued resilience given the prevailing economic backdrop.
Performance across Arkema’s business segments was mixed:
- Adhesive Solutions and Advanced Materials experienced weaker demand in Europe and the United States, mirroring the slowdown in industrial and construction markets. However, these segments benefited from Arkema’s development strategy focused on higher value-added solutions and growth in Asia. Net pricing was slightly negative, but the Group captured some benefit from lower raw material costs as they gradually filtered through the supply chain.
- Coating Solutions reported a significant decline, primarily due to the ongoing downturn in the acrylic cycle and a slowdown in the U.S. construction market, which remains a key end-user sector for coatings.
- Seasonal trends also led to a decrease in sales of refrigerant gases, further impacting performance.
The Group also faced an unfavorable currency impact of approximately €15 million, mainly due to the depreciation of the U.S. dollar against the euro during the quarter.
Earnings and Cash Flow
Arkema reported adjusted net income of €78 million, equivalent to €1.04 per share, compared with €2.25 per share in the third quarter of 2024. Despite lower earnings, cash generation remained a key strength.
Recurring cash flow amounted to €207 million, exceeding the level achieved in the same period last year. This improvement reflects the Group’s strict management of working capital and a reduction in capital expenditure (capex) compared to 2024. The continued focus on cash discipline underscores Arkema’s robust financial stewardship and its commitment to maintaining a solid balance sheet through the cycle.
As a result, net debt decreased by nearly €200 million during the quarter, reaching €3.4 billion, including hybrid bonds. The Group also enhanced its financing structure with the successful issuance of a €500 million green bond with an eight-year maturity and a 3.5% coupon. This transaction further supports Arkema’s commitment to sustainable finance and reflects investor confidence in the company’s long-term strategic vision.
Strengthening Cost-Cutting and Efficiency Initiatives
In response to the ongoing inflationary pressures and challenging macroeconomic environment, Arkema is intensifying its cost-optimization efforts across all divisions. The Group has launched a broad range of initiatives aimed at offsetting fixed cost inflation between 2025 and 2026, targeting significant savings through efficiency gains, process optimization, and organizational streamlining.
These efforts span all functions and business lines, reinforcing Arkema’s commitment to maintaining competitiveness and operational agility. Additionally, the Group is prioritizing disciplined capital allocation and a leaner investment profile.
Capex will be further reduced to around €600 million in 2026, representing a decrease of approximately €50 million compared with 2025, and €150 million compared with 2024. This reflects Arkema’s prudent approach to investment while ensuring that key strategic projects in innovation and sustainability continue to advance as planned.
2025 Guidance
Looking ahead, Arkema remains cautious about the near-term global economic outlook. The Group continues to operate in an environment characterized by subdued demand in mature economies, ongoing pressure on industrial output, and geopolitical uncertainty. The recent softening of U.S. demand has been more pronounced than initially expected, particularly affecting downstream sectors such as construction and consumer goods.
Nevertheless, Arkema remains confident in its ability to deliver resilient financial performance and to capitalize on long-term growth drivers in high-potential markets. For the full year 2025, the Group is targeting:
- EBITDA between €1.25 billion and €1.3 billion, and
- Recurring cash flow of approximately €300 million.
These objectives reflect Arkema’s disciplined management approach, the benefits of its innovation-led strategy, and the positive contributions expected from growth in Asia and in specialty markets such as batteries, 3D printing, and advanced fluorochemicals.
Source Link : https://www.arkema.com/
