COLOMBES, France--(BUSINESS WIRE)--Regulatory News:
Arkema (Paris:AKE):
Following Arkema’s Board of Directors’ meeting held on 5 November 2024 to review the Group’s consolidated financial information for the third quarter of 2024, Chairman and CEO Thierry Le Hénaff said:
“Arkema's Specialty Materials sales grew by 4% year-on-year despite a third quarter marked by a challenging environment, particularly in Europe. After an encouraging July, the end of the quarter was marked by weaker demand. I would like to congratulate our teams, whose efforts in this unfavorable environment have enabled the Group to achieve a strong financial performance. In particular, our EBITDA margin increased to reach 17%, showing our resilience and validating our strategy of focusing on Specialty Materials.
Over the coming months, we will be maintaining our efforts on strict management of costs, capital expenditure and working capital. We will also continue to progress on our major growth projects in order to start 2025 in the best possible position. We are also looking forward to welcoming Dow’s teams very soon, following the closing of the acquisition of the flexible packaging laminating adhesives business, expected by the end of the year, and which will mark a new chapter in Bostik's growth in high-performance adhesives.”
KEY FIGURES FOR THIRD-QUARTER 2024
| in millions of euros | Q3'24 | Q3'23 | Change | |
| Sales | 2,394 |
2,326 |
+2.9% | |
| EBITDA | 407 |
386 |
+5.4% | |
| Specialty Materials | 377 |
346 |
+9.0% | |
| Intermediates | 51 |
55 |
-7.3% |
|
| Corporate | -21 |
-15 |
||
| EBITDA margin | 17.0% |
16.6% |
||
| Specialty Materials | 17.2% |
16.4% |
||
| Intermediates | 26.7% |
26.7% |
||
| Recurring operating income (REBIT) | 246 |
246 |
- |
|
| REBIT margin | 10.3% |
10.6% |
||
| Adjusted net income | 168 |
177 |
-5.1% |
|
| Adjusted net income per share (in €) | 2.25 |
2.38 |
-5.5% |
|
| Recurring cash flow | 190 |
312 |
||
| Free cash flow | 175 |
273 |
||
| Net debt including hybrid bonds | 3,111 |
2,419 |
||
| €2,930m as of 31/12/2023 |
THIRD-QUARTER 2024 BUSINESS PERFORMANCE
At €2,394 million, Group sales were up by 2.9% compared with third-quarter 2023, supported by Specialty Materials, which benefited in particular from positive organic growth in Asia and North America, while Europe was down, and from PIAM integration. In a macroeconomic environment still challenging, with no recovery in demand and marked by customer destocking at the end of the quarter, Group volumes were nevertheless up 2.2% on last year. Specialty Materials volumes increased by 3.8%, supported by some more buoyant markets such as energy, sports, packaging and healthcare, while construction is showing no signs of improvement and the automotive sector is slowing down, notably in Europe. Intermediates volumes were down by 12.1%, impacted by existing quota mechanisms in refrigerant gases. The price effect remained broadly stable (down 0.2%), with a slight decrease in Specialty Materials (down 0.7%), in line with the overall raw materials’ evolution, offset by a positive dynamic in refrigerant gases. The 2.3% positive scope effect corresponds essentially to the acquisition of PIAM in Advanced Materials. The currency effect was a negative 1.4%, reflecting the depreciation of the US dollar and Latin American currencies against the euro.
Group EBITDA was up 5.4% year-on-year to €407 million (€386 million in Q3'23). With an increase in each of its three segments and particularly in Adhesive Solutions and Advanced Materials, Specialty Materials EBITDA increased significantly by 9.0%. Intermediates remained at a solid level, although down on the prior year. EBITDA included the contribution of major organic growth projects, which will continue to ramp up over the coming quarters to serve attractive markets such as sustainable consumer goods, green energy, mobility, sports and efficient housing. The EBITDA margin was up 40 bps on last year, at a very good level of 17.0% (16.6% in Q3'23), reflecting, in this lackluster market environment, the quality of the Group's positioning and technology portfolio, its balanced geographical footprint as well as its strict management of operations.
At €246 million, recurring operating income (REBIT) was stable compared with third-quarter 2023, including €161 million in recurring depreciation and amortization, up €21 million year-on-year, mainly reflecting the consolidation of PIAM and the start-up of new production units for Advanced Materials. REBIT margin in the third quarter of 2024 thus amounted to 10.3% (10.6% in Q3’23).
Adjusted net income came to €168 million (€177 million in Q3’23), representing €2.25 per share, including a tax rate, excluding exceptional items, of 22% of recurring operating income.
CASH FLOW AND NET DEBT AT 30 SEPTEMBER 2024
Arkema delivered a solid recurring cash flow of €190 million. It was down compared with the prior year (€312 million in Q3'23), reflecting a less significant change in working capital and an increase in capital expenditure to €167 million (€137 million in Q3'23) corresponding to the implementation of major projects. Working capital remained well controlled, representing 16.4% of annualized sales at end-September 2024 (16.3% at end-September 2023). Over the full year, capital expenditure is expected to come in at around €770 million, in line with full-year guidance. After fine-tuning its analysis of potential future capital expenditure, and taking into account a slower pace of ramp-up of the electric vehicle market, the Group has adjusted the envelop of capital expenditure that was announced at the Capital Markets Day in September 2023, and now plans to spend between €650 million and €700 million a year.
At €175 million, free cash flow included a non-recurring cash outflow of €15 million related notably to start-up costs for the Singapore platform and restructuring expenses.
Net debt (including hybrid bonds) remained tightly controlled and decreased slightly over the quarter to €3,111 million (€3,270 million at end-June 2024), returning to the level of 2x last twelve-months EBITDA.
THIRD-QUARTER 2024 PERFORMANCE BY SEGMENT
ADHESIVE SOLUTIONS (29% OF TOTAL GROUP SALES)
| in millions of euros | Q3'24 | Q3'23 | Change | |
| Sales | 682 |
682 |
- |
|
| EBITDA | 107 |
98 |
+9.2% | |
| EBITDA margin | 15.7% |
14.4% |
||
| Recurring operating income (REBIT) | 86 |
77 |
+11.7% | |
| REBIT margin | 12.6% |
11.3% |
Sales in the Adhesive Solutions segment were stable year-on-year at €682 million. This was supported by a 1.9% rise in volumes, reflecting notably a good dynamic in the packaging and labelling markets, while the construction sector remained challenging. At negative 1%, the price effect was limited and reflected the lower price of certain raw materials. The positive scope effect of 0.6% corresponds to the integration of Arc Building Products, and the currency effect was a negative 1.5%.
At €107 million, EBITDA was up significantly by 9.2% compared with the previous year, and EBITDA margin reached a record level at 15.7%, up 130 bps on third-quarter 2023. This very good performance confirms the relevance of the segment's development strategy, which is based on product mix improvement toward higher value-added solutions, targeted high-quality acquisitions, active price and cost management as well as operational excellence initiatives.
ADVANCED MATERIALS (37% OF TOTAL GROUP SALES)
| in millions of euros | Q3'24 | Q3'23 | Change | |
| Sales | 885 |
856 |
+3.4% | |
| EBITDA | 189 |
172 |
+9.9% | |
| EBITDA margin | 21.4% |
20.1% |
||
| Recurring operating income (REBIT) | 95 |
100 |
-5.0% |
|
| REBIT margin | 10.7% |
11.7% |
Sales in the Advanced Materials segment were up by 3.4% compared with third-quarter 2023 to €885 million. The segment’s volumes rose by 2.0%, supported by the sports, energy and healthcare markets. However, they were negatively impacted by the slowdown in the automotive sector, notably in Europe, and the temporary shutdown of our German organic peroxides facility following the exceptional flooding of the Danube in early June. The price effect was a negative 2.3%, mainly reflecting changes in raw material prices. The segment's sales also benefited from a positive 5.7% scope effect due to the contribution of PIAM, and the currency was a negative 2.0%.
At €189 million, the segment's EBITDA rose sharply by 9.9% year-on-year (€172 million in Q3'23). High Performance Polymers EBITDA was up significantly, benefiting from the contribution of new projects, the integration of PIAM and good momentum in high value-added fluorospecialties. Performance Additives EBITDA was down on the Q3’23 high comparison base and included the negative impact of the temporary shutdown of the organic peroxides facility in Germany, estimated at approximately €8 million over the quarter. The EBITDA margin was substantially up reaching a very good level at 21.4% (20.1% in Q3’23).
COATING SOLUTIONS (26% OF TOTAL GROUP SALES)
| in millions of euros | Q3'24 | Q3'23 | Change | |
| Sales | 627 |
572 |
+9.6% | |
| EBITDA | 81 |
76 |
+6.6% | |
| EBITDA margin | 12.9% |
13.3% |
||
| Recurring operating income (REBIT) | 49 |
43 |
+14.0% | |
| REBIT margin | 7.8% |
7.5% |
Sales in the Coating Solutions segment were up by a sharp 9.6% compared with third-quarter 2023 to €627 million. Compared with last year's baseline, which was marked by destocking, volumes rose by 8.7% in an environment that remains relatively challenging, particularly in the upstream, and were supported mainly by the coatings, notably architectural, hygiene and water treatment markets. At a positive 2.1%, the price effect mainly reflected the impact of higher propylene prices in the United States on acrylic monomer prices, and the currency effect was a negative 1.2%.
At €81 million, the segment's EBITDA rose substantially by 6.6% (€76 million in Q3'23), supported by positive volume trends, strict management of costs and operations and the ramp-up of Sartomer's organic project in China. In this environment, the EBITDA margin held up well and stood at 12.9% (13.3% in Q3'23).
INTERMEDIATES (8% OF TOTAL GROUP SALES)
| in millions of euros | Q3'24 | Q3'23 | Change | |
| Sales | 191 |
206 |
-7.3% |
|
| EBITDA | 51 |
55 |
-7.3% |
|
| EBITDA margin | 26.7% |
26.7% |
||
| Recurring operating income (REBIT) | 39 |
42 |
-7.1% |
|
| REBIT margin | 20.4% |
20.4% |
Sales in the Intermediates segment totaled €191 million, down by 7.3% compared with third-quarter 2023. Volumes were down 12.1%, impacted by the effect of existing quota mechanisms in refrigerant gases, partly offset by higher acrylics volumes in China. Prices rose by 4.8%, driven essentially by the impact of quota mechanisms in refrigerant gases.
In this context, segment EBITDA came in at €51 million (€55 million in Q3’23) and the EBITDA margin remained at a good level at 26.7% (26.7% in Q3’23).
HIGHLIGHTS
On 29 August 2024, Arkema announced several appointments to its Executive Committee. Sophie Fouillat has been appointed as Executive Vice President, Strategy, replacing Bernard Boyer who is retiring. Tilo Quink has joined the Group to take up the role of Senior Vice President, Performance Additives. Laurent Tellier, who previously held this position, has been appointed Senior Vice President High Performance Polymers and Fluorogases, replacing Erwoan Pezron. Erwoan Pezron becomes advisor to the Chairman and Chief Executive Officer, while remaining a member of the Executive Committee until his retirement at the end of the year.
On 5 September 2024, Arkema successfully completed a €500 million senior bond issue with a 10-year maturity and an annual coupon of 3.50%. This operation will enable the Group to continue to refinance its upcoming bond maturities and extend the average maturity of its debt.
On 30 October 2024, Arkema finalized a share capital increase reserved for employees, for a total of close to 8,700 subscriptions and a global amount of €61.8 million, thus demonstrating the strong commitment of Group employees and their confidence in Arkema’s development opportunities. The newly issued shares are fully assimilated to the existing shares and will be entitled to the dividend payment in 2025.
OUTLOOK FOR 2024
With a still lackluster macroeconomic environment expected for the rest of the year, marked by limited visibility and a continued weak demand environment, the Group will focus on strictly managing its operating costs and optimizing its working capital in line with demand. In parallel, work on the longer term will continue, with the ongoing ramp-up of the organic projects, the closing of the acquisition of Dow's flexible packaging laminating adhesives business, as well as the first steps in the start-up of the HFO-1233zd fluorospecialties unit in the United States.
In this context, based on the results of the first nine months, Arkema expects to achieve in 2024 an EBITDA at the lower end of its guidance range of €1.53 billion.
Finally, the Group will continue to implement its strategic roadmap, leveraging its cutting-edge innovation, strengthening partnerships with its customers, and deploying its portfolio of technologies to support the development of solutions for a less carbon-intensive and more sustainable world.
Further details concerning the Group's third-quarter 2024 results are provided in the "Third-quarter 2024 results and outlook" presentation and the "Factsheet", both available on Arkema's website at: www.arkema.com/global/en/investor-relations/
FINANCIAL CALENDAR
27 February 2025: Publication of full-year results
7 May 2025: Publication of first-quarter 2025 results
DISCLAIMER
The information disclosed in this press release may contain forward-looking statements with respect to the financial position, results of operations, business and strategy of Arkema.
In a context of significant geopolitical tensions, where the outlook for the global economy remains uncertain, the retained assumptions and forward-looking statements could ultimately prove inaccurate.
Such statements are based on management's current views and assumptions that could ultimately prove inaccurate and are subject to risk factors such as (but not limited to) changes in raw material prices, currency fluctuations, the pace at which cost-reduction projects are implemented, escalating geopolitical tensions, and changes in general economic and financial 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 and cash flow statement data, as well as data relating to the statement of changes in shareholders' equity and information by segment included in this press release are extracted from the consolidated financial information at 30 September 2024, as reviewed by Arkema's Board of Directors on 5 November 2024. Quarterly financial information is not audited.
Information by segment is presented in accordance with Arkema's internal reporting system used by management.
Details of the main alternative performance indicators used by the Group are provided in the tables appended to this press release. For the purpose of analyzing its results and defining its targets, the Group also uses EBITDA margin, which corresponds to EBITDA expressed as a percentage of sales, EBITDA equaling recurring operating income (REBIT) plus recurring depreciation and amortization of tangible and intangible assets, as well as REBIT margin, which corresponds to recurring operating income (REBIT) expressed as a percentage of sales.
For the purpose of tracking changes in its results, and particularly its sales figures, the Group analyzes the following effects (unaudited analyses):
scope effect: the impact of changes in the Group's scope of consolidation, which arise from acquisitions and divestments of entire businesses or as a result of the first-time consolidation or deconsolidation of entities. Increases or reductions in capacity are not included in the scope effect;
currency effect: the mechanical impact of consolidating accounts denominated in currencies other than the euro at different exchange rates from one period to another. The currency effect is calculated by applying the foreign exchange rates of the prior period to the figures for the period under review;
price effect: the impact of changes in average selling prices is estimated by comparing the weighted average net unit selling price of a range of related products in the period under review with their weighted average net unit selling price in the prior period, multiplied, in both cases, by the volumes sold in the period under review; and
volume effect: the impact of changes in volumes is estimated by comparing the quantities delivered in the period under review with the quantities delivered in the prior period, multiplied, in both cases, by the weighted average net unit selling price in the prior period.
Building on its unique set of expertise in materials science, Arkema offers a portfolio of first-class technologies to address ever-growing demand for new and sustainable materials. With the ambition to become a pure player in Specialty Materials, the Group is structured into three complementary, resilient and highly innovative segments dedicated to Specialty Materials – Adhesive Solutions, Advanced Materials, and Coating Solutions – accounting for some 92% of Group sales in 2023, and a well-positioned and competitive Intermediates segment. Arkema offers cutting-edge technological solutions to meet the challenges of, among other things, new energies, access to water, recycling, urbanization and mobility, and fosters a permanent dialogue with all its stakeholders. The Group reported sales of around €9.5 billion in 2023, and operates in some 55 countries with 21,100 employees worldwide.
ARKEMA financial statements
Consolidated financial information at the end of September 2024
Consolidated financial statements as end of December 2023 have been audited.
| CONSOLIDATED INCOME STATEMENT | ||
| 3rd quarter 2024 | 3rd quarter 2023 | |
| (In millions of euros) | ||
| Sales | 2,394 |
2,326 |
| Operating expenses | (1,917) |
(1,835) |
| Research and development expenses | (47) |
(68) |
| Selling and administrative expenses | (222) |
(209) |
| Other income and expenses | (24) |
(32) |
| Operating income | 184 |
182 |
| Equity in income of affiliates | (2) |
(2) |
| Financial result | (20) |
(9) |
| Income taxes | (42) |
(54) |
| Net income | 120 |
117 |
| Attributable to non-controlling interests | 2 |
3 |
| Net income - Group share | 118 |
114 |
| Earnings per share (amount in euros) | 1.43 |
1.39 |
| Diluted earnings per share (amount in euros) | 1.42 |
1.37 |
| End of September 2024 | End of September 2023 | |
| (In millions of euros) | ||
| Sales | 7,271 |
7,292 |
| Operating expenses | (5,755) |
(5,757) |
| Research and development expenses | (184) |
(204) |
| Selling and administrative expenses | (695) |
(661) |
| Other income and expenses | (101) |
(71) |
| Operating income | 536 |
599 |
| Equity in income of affiliates | (4) |
(7) |
| Financial result | (53) |
(44) |
| Income taxes | (130) |
(146) |
| Net income | 349 |
402 |
| Attributable to non-controlling interests | 7 |
4 |
| Net income - Group share | 342 |
398 |
| Earnings per share (amount in euros) | 4.36 |
5.12 |
| Diluted earnings per share (amount in euros) | 4.34 |
5.09 |
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | ||
| 3rd quarter 2024 | 3rd quarter 2023 | |
| (In millions of euros) | ||
| Net income | 120 |
117 |
| Hedging adjustments | 13 |
(13) |
| Other items | — |
0 |
| Deferred taxes on hedging adjustments and other items | (1) |
0 |
| Change in translation adjustments | (155) |
109 |
| Other recyclable comprehensive income | (143) |
96 |
| Impact of remeasuring unconsolidated investments | 0 |
0 |
| Actuarial gains and losses | (14) |
26 |
| Deferred taxes on actuarial gains and losses | 3 |
(5) |
| Other non-recyclable comprehensive income | (11) |
21 |
| Total income and expenses recognized directly in equity | (154) |
117 |
| Total comprehensive income | (34) |
234 |
| Attributable to non-controlling interest | 2 |
3 |
| Total comprehensive income - Group share | (36) |
231 |
| End of September 2024 | End of September 2023 | |
| (In millions of euros) | ||
| Net income | 349 |
402 |
| Hedging adjustments | 10 |
(51) |
| Other items | 0 |
0 |
| Deferred taxes on hedging adjustments and other items | (1) |
2 |
| Change in translation adjustments | (84) |
(34) |
| Other recyclable comprehensive income | (75) |
(83) |
| Impact of remeasuring unconsolidated investments | (1) |
0 |
| Actuarial gains and losses | 4 |
19 |
| Deferred taxes on actuarial gains and losses | (1) |
(4) |
| Other non-recyclable comprehensive income | 2 |
15 |
| Total income and expenses recognized directly in equity | (73) |
(68) |
| Total comprehensive income | 276 |
334 |
| Attributable to non-controlling interest | (4) |
2 |
| Total comprehensive income - Group share | 280 |
332 |
| INFORMATION BY SEGMENT | |||||||||||||
| 3rd quarter 2024 | |||||||||||||
| (In millions of euros) | Adhesive Solutions | Advanced Materials | Coating Solutions | Intermediates | Corporate | Total | |||||||
| Sales | 682 |
885 |
627 |
191 |
9 |
2,394 |
|||||||
| EBITDA | 107 |
189 |
81 |
51 |
(21) |
407 |
|||||||
| Recurring depreciation and amortization of property, plant and equipment and intangible assets | (21) |
(94) |
(32) |
(12) |
(2) |
(161) |
|||||||
| Recurring operating income (REBIT) | 86 |
95 |
49 |
39 |
(23) |
246 |
|||||||
| Depreciation and amortization related to the revaluation of property, plant and equipment and intangible assets as part of the allocation of the purchase price of businesses | (28) |
(8) |
(2) |
- |
- |
(38) |
|||||||
| Other income and expenses | (9) |
(13) |
0 |
0 |
(2) |
(24) |
|||||||
| Operating income | 49 |
0 |
74 |
47 |
39 |
(25) |
184 |
||||||
| Equity in income of affiliates | - |
(2) |
- |
- |
- |
(2) |
|||||||
| Intangible assets and property, plant, and equipment additions | 21 |
100 |
28 |
3 |
15 |
167 |
|||||||
| Of which: recurring capital expenditure | 21 |
100 |
28 |
3 |
15 |
167 |
|||||||
| 3rd quarter 2023 | |||||||||||||
| (In millions of euros) | Adhesive Solutions | Advanced Materials | Coating Solutions | Intermediates | Corporate | Total | |||||||
| Sales | 682 |
856 |
572 |
206 |
10 |
2,326 |
|||||||
| EBITDA | 98 |
172 |
76 |
55 |
(15) |
386 |
|||||||
| Recurring depreciation and amortization of property, plant and equipment and intangible assets | (21) |
(72) |
(33) |
(13) |
(1) |
(140) |
|||||||
| Recurring operating income (REBIT) | 77 |
100 |
43 |
42 |
(16) |
246 |
|||||||
| Depreciation and amortization related to the revaluation of property, plant and equipment and intangible assets as part of the allocation of the purchase price of businesses | (26) |
(5) |
(1) |
0 |
- |
- |
(32) |
||||||
| Other income and expenses | (10) |
(21) |
0 |
0 |
(1) |
0 |
(32) |
||||||
| Operating income | 41 |
74 |
42 |
0 |
41 |
(16) |
182 |
||||||
| Equity in income of affiliates | - |
(2) |
- |
0 |
- |
- |
(2) |
||||||
| Intangible assets and property, plant, and equipment additions | 15 |
93 |
23 |
0 |
7 |
4 |
142 |
||||||
| Of which: recurring capital expenditure | 15 |
88 |
23 |
0 |
7 |
4 |
137 |
||||||
| INFORMATION BY SEGMENT | |||||||||||||
| End of September 2024 | |||||||||||||
| (In millions of euros) | Adhesive Solutions | Advanced Materials | Coating Solutions | Intermediates | Corporate | Total | |||||||
| Sales | 2,068 |
2,681 |
1,890 |
603 |
29 |
7,271 |
|||||||
| EBITDA | 321 |
541 |
247 |
174 |
(75) |
1,208 |
|||||||
| Recurring depreciation and amortization of property, plant and equipment and intangible assets | (65) |
(263) |
(93) |
(32) |
(5) |
(458) |
|||||||
| Recurring operating income (REBIT) | 256 |
278 |
154 |
142 |
(80) |
750 |
|||||||
| Depreciation and amortization related to the revaluation of property, plant and equipment and intangible assets as part of the allocation of the purchase price of businesses | (81) |
(27) |
(5) |
- |
- |
(113) |
|||||||
| Other income and expenses | (25) |
(64) |
0 |
(1) |
(11) |
(101) |
|||||||
| Operating income | 150 |
187 |
149 |
141 |
(91) |
536 |
|||||||
| Equity in income of affiliates | - |
(4) |
- |
- |
- |
(4) |
|||||||
| Intangible assets and property, plant, and equipment additions* | 48 |
276 |
71 |
14 |
27 |
436 |
|||||||
| Of which: recurring capital expenditure* | 48 |
276 |
71 |
14 |
27 |
0 |
436 |
||||||
| *includes a correction related to Q1’24 data resulting from a transfer of figures between Coating Solutions and Intermediates | |||||||||||||
| End of September 2023 | |||||||||||||
| (In millions of euros) | Adhesive Solutions | Advanced Materials | Coating Solutions | Intermediates | Corporate | Total | |||||||
| Sales | 2,072 |
2,705 |
1,850 |
636 |
29 |
7,292 |
|||||||
| EBITDA | 286 |
517 |
258 |
173 |
(64) |
1,170 |
|||||||
| Recurring depreciation and amortization of property, plant and equipment and intangible assets | (62) |
(207) |
(94) |
(38) |
(4) |
(405) |
|||||||
| Recurring operating income (REBIT) | 224 |
310 |
164 |
135 |
(68) |
765 |
|||||||
| Depreciation and amortization related to the revaluation of property, plant and equipment and intangible assets as part of the allocation of the purchase price of businesses | (77) |
(13) |
(5) |
— |
— |
(95) |
|||||||
| Other income and expenses | (22) |
(37) |
(1) |
(1) |
(10) |
(71) |
|||||||
| Operating income | 125 |
260 |
158 |
134 |
(78) |
599 |
|||||||
| Equity in income of affiliates | — |
(7) |
— |
— |
— |
(7) |
|||||||
| Intangible assets and property, plant, and equipment additions | 48 |
230 |
62 |
15 |
11 |
366 |
|||||||
| Of which: recurring capital expenditure | 48 |
213 |
62 |
15 |
11 |
349 |
|||||||
| CONSOLIDATED CASH FLOW STATEMENT | ||
| End of September 2024 | End of September 2023 | |
| (In millions of euros) | ||
| Operating cash flows | ||
| Net income | 349 |
402 |
| Depreciation, amortization and impairment of assets | 582 |
512 |
| Other provisions and deferred taxes | 16 |
(70) |
| (Gains)/losses on sales of long-term assets | 3 |
(29) |
| Undistributed affiliate equity earnings | 4 |
7 |
| Change in working capital | (262) |
(27) |
| Other changes | 22 |
15 |
| Cash flow from operating activities | 714 |
810 |
| Investing cash flows | ||
| Intangible assets and property, plant, and equipment additions | (436) |
(366) |
| Change in fixed asset payables | (75) |
(131) |
| Acquisitions of operations, net of cash acquired | (29) |
(66) |
| Increase in long-term loans | (63) |
(45) |
| Total expenditures | (603) |
(608) |
| Proceeds from sale of intangible assets and property, plant, and equipment | 5 |
8 |
| Proceeds from sale of operations, net of cash transferred | — |
32 |
| Repayment of long-term loans | 52 |
56 |
| Total divestitures | 57 |
96 |
| Cash flow from investing activities | (546) |
(512) |
| Financing cash flows | ||
| Issuance (repayment) of shares and paid-in surplus | — |
0 |
| Purchase of treasury shares | (24) |
(32) |
| Issuance of hybrid bonds | 399 |
— |
| Redemption of hybrid bonds | (400) |
— |
| Dividends paid to parent company shareholders | (261) |
(253) |
| Interest paid to bearers of subordinated perpetual notes | (16) |
(16) |
| Dividends paid to non-controlling interests and buyout of minority interests | (2) |
(3) |
| Increase in long-term debt | 494 |
397 |
| Decrease in long-term debt | (764) |
(63) |
| Increase / (Decrease) in short-term debt | 327 |
(31) |
| Cash flow from financing activities | (247) |
(1) |
| Net increase/(decrease) in cash and cash equivalents | (79) |
297 |
| Effect of exchange rates and changes in scope | 29 |
11 |
| Cash and cash equivalents at beginning of period | 2,045 |
1,592 |
| Cash and cash equivalents at end or the period | 1,995 |
1,900 |
| CONSOLIDATED BALANCE SHEET | ||
| 30 September 2024 | 31 December 2023 | |
| (In millions of euros) | ||
| ASSETS | ||
| Goodwill | 3,011 |
3,040 |
| Intangible assets, net | 2,331 |
2,416 |
| Property, plant and equipment, net | 3,735 |
3,730 |
| Equity affiliates: investments and loans | 11 |
13 |
| Other investments | 56 |
52 |
| Deferred tax assets | 111 |
157 |
| Other non-current assets | 258 |
251 |
| TOTAL NON-CURRENT ASSETS | 9,513 |
9,659 |
| Inventories | 1,392 |
1,208 |
| Accounts receivable | 1,412 |
1,261 |
| Other receivables and prepaid expenses | 195 |
170 |
| Income tax receivables | 106 |
142 |
| Other current financial assets | 24 |
32 |
| Cash and cash equivalents | 1,995 |
2,045 |
| Assets held for sale | 19 |
— |
| TOTAL CURRENT ASSETS | 5,143 |
4,858 |
| TOTAL ASSETS | 14,656 |
14,517 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Share capital | 750 |
750 |
| Paid-in surplus and retained earnings | 6,402 |
6,304 |
| Treasury shares | (44) |
(21) |
| Translation adjustments | 97 |
170 |
| SHAREHOLDERS' EQUITY - GROUP SHARE | 7,205 |
7,203 |
| Non-controlling interests | 247 |
252 |
| TOTAL SHAREHOLDERS' EQUITY | 7,452 |
7,455 |
| Deferred tax liabilities | 407 |
436 |
| Provisions for pensions and other employee benefits | 391 |
397 |
| Other provisions and non-current liabilities | 429 |
416 |
| Non-current debt | 3,540 |
3,734 |
| TOTAL NON-CURRENT LIABILITIES | 4,767 |
4,983 |
| Accounts payable | 993 |
1,036 |
| Other creditors and accrued liabilities | 472 |
392 |
| Income tax payables | 71 |
83 |
| Other current financial liabilities | 23 |
27 |
| Current debt | 866 |
541 |
| Liabilities related to assets held for sale | 12 |
— |
| TOTAL CURRENT LIABILITIES | 2,437 |
2,079 |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 14,656 |
14,517 |
| CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY | |||||||||||
| Shares issued | Treasury shares | Shareholders' equity - Group share | Non-controlling interests | Shareholders' equity | |||||||
| (In millions of euros) | Number | Amount | Paid-in surplus | Hybrid bonds | Retained earnings | Translation adjustments | Number | Amount | |||
| At 1 January 2024 | 75,043,514 |
750 |
1,067 |
700 |
4,537 |
170 |
(228,901) |
(21) |
7,203 |
252 |
7,455 |
| Cash dividend | - |
- |
- |
- |
(277) |
- |
- |
- |
(277) |
(2) |
(279) |
| Issuance of share capital | - |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
| Capital decrease by cancellation of treasury shares | - |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
| Purchase of treasury shares | - |
- |
- |
- |
- |
- |
(271,070) |
(24) |
(24) |
- |
(24) |
| Cancellation of purchased treasury shares | - |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
| Grants of treasury shares to employees | - |
- |
- |
- |
(1) |
- |
12,601 |
1 |
0 |
- |
0 |
| Sale of treasury shares | - |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
| Share-based payments | - |
- |
- |
- |
21 |
- |
- |
- |
21 |
- |
21 |
| Issuance of hybrid bonds | - |
- |
- |
400 |
(1) |
- |
- |
- |
399 |
- |
399 |
| Redemption of hybrid bonds | - |
- |
- |
(400) |
- |
- |
- |
- |
(400) |
- |
(400) |
| Other | - |
- |
- |
- |
3 |
- |
- |
- |
3 |
1 |
4 |
| Transactions with shareholders | - |
- |
- |
0 |
(255) |
- |
(258,469) |
(23) |
(278) |
(1) |
(279) |
| Net income | - |
- |
- |
- |
342 |
- |
- |
- |
342 |
7 |
349 |
| Total income and expense recognized directly through equity | - |
- |
- |
- |
11 |
(73) |
- |
- |
(62) |
(11) |
(73) |
| Comprehensive income | - |
- |
- |
- |
353 |
(73) |
- |
- |
280 |
(4) |
276 |
| At 30 September 2024 | 75,043,514 |
750 |
1,067 |
700 |
4,635 |
97 |
(487,370) |
(44) |
7,205 |
247 |
7,452 |
| ALTERNATIVE PERFORMANCE INDICATORS | ||||
| To monitor and analyse the financial performance of the Group and its activities, the Group management uses alternative performance indicators. These are financial indicators that are not defined by the IFRS. This note presents a reconciliation of these indicators and the aggregates from the consolidated financial statements under IFRS. | ||||
| RECURRING OPERATING INCOME (REBIT) AND EBITDA | ||||
| (In millions of euros) | End of September 2024 | End of September 2023 | 3rd quarter 2024 | 3rd quarter 2023 |
| OPERATING INCOME | 536 |
599 |
184 |
182 |
| - Depreciation and amortization related to the revaluation of tangible and intangible assets as part of the allocation of the purchase price of businesses | (113) |
(95) |
(38) |
(32) |
| - Other income and expenses | (101) |
(71) |
(24) |
(32) |
| RECURRING OPERATING INCOME (REBIT) | 750 |
765 |
246 |
246 |
| - Recurring depreciation and amortization of tangible and intangible assets | (458) |
(405) |
(161) |
(140) |
| EBITDA | 1,208 |
1,170 |
407 |
386 |
| Details of depreciation and amortization of tangible and intangible assets: | ||||
| (In millions of euros) | End of September 2024 | End of September 2023 | 3rd quarter 2024 | 3rd quarter 2023 |
| Depreciation and amortization of tangible and intangible assets | (582) |
(512) |
(200) |
(178) |
| Of which: Recurring depreciation and amortization of tangible and intangible assets | (458) |
(405) |
(161) |
(140) |
| Of which: Depreciation and amortization related to the revaluation of assets as part of the allocation of the purchase price of businesses | (113) |
(95) |
(38) |
(32) |
| Of which: Impairment included in other income and expenses | (11) |
12 |
(1) |
(6) |
| ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE | ||||
| (In millions of euros) | End of September 2024 | End of September 2023 | 3rd quarter 2024 | 3rd quarter 2023 |
| NET INCOME - GROUP SHARE | 342 |
398 |
118 |
114 |
| - Depreciation and amortization related to the revaluation of tangible and intangible assets as part of the allocation of the purchase price of businesses | (113) |
(95) |
(38) |
(32) |
| - Other income and expenses | (101) |
(71) |
(24) |
(32) |
| - Other income and expenses - Non-controlling interests | — |
— |
— |
— |
| - Taxes on depreciation and amortization related to the revaluation of assets as part of the allocation of the purchase price of businesses | 25 |
23 |
9 |
10 |
| - Taxes on other income and expenses | 17 |
14 |
5 |
6 |
| - One-time tax effects | (6) |
(19) |
(2) |
(15) |
| ADJUSTED NET INCOME | 520 |
546 |
168 |
177 |
| Weighted average number of ordinary shares | 74,699,795 |
74,636,305 |
||
| Weighted average number of potential ordinary shares | 75,114,108 |
75,043,514 |
||
| ADJUSTED EARNINGS PER SHARE (in euros) | 6.96 |
7.32 |
2.25 |
2.38 |
| DILUTED ADJUSTED EARNINGS PER SHARE (in euros) | 6.92 |
7.28 |
2.23 |
2.36 |
RECURRING CAPITAL EXPENDITURE |
||||
| (In millions of euros) | End of September 2024 | End of September 2023 | 3rd quarter 2024 | 3rd quarter 2023 |
| INTANGIBLE ASSETS AND PROPERTY, PLANT, AND EQUIPMENT ADDITIONS | 436 |
366 |
167 |
142 |
| - Exceptional capital expenditure | — |
17 |
— |
5 |
| - Investments relating to portfolio management operations | — |
— |
— |
— |
| - Capital expenditure with no impact on net debt | — |
— |
— |
— |
| RECURRING CAPITAL EXPENDITURE | 436 |
349 |
167 |
137 |
| CASH FLOWS | ||||
| (In millions of euros) | End of September 2024 | End of September 2023 | 3rd quarter 2024 | 3rd quarter 2023 |
| Cash flow from operating activities | 714 |
810 |
334 |
393 |
| + Cash flow from investing activities | (546) |
(512) |
(160) |
(125) |
| NET CASH FLOW | 168 |
298 |
174 |
268 |
| - Net cash flow from portfolio management operations | (42) |
(44) |
(1) |
(5) |
| FREE CASH FLOW | 210 |
342 |
175 |
273 |
| Exceptional capital expenditure | — |
(17) |
— |
(5) |
| - Non-recurring cash flow | (52) |
(77) |
(15) |
(34) |
| RECURRING CASH FLOW | 262 |
436 |
190 |
312 |
| - Recurring capital expenditure | (436) |
(349) |
(167) |
(137) |
| OPERATING CASH FLOW | 698 |
785 |
357 |
449 |
| Operating cash flow corresponds to recurring cash flow before recurring capital expenditure | ||||
| Net cash flow from portfolio management operations corresponds to the impact of acquisition and disposal operations. | ||||
| Non-recurring cash flow corresponds to cash flow from other income and expenses. | ||||
| NET DEBT | ||
| (In millions of euros) | End of September 2024 | End of December 2023 |
| Non-current debt | 3,540 |
3,734 |
| + Current debt | 866 |
541 |
| - Cash and cash equivalents | 1,995 |
2,045 |
| NET DEBT | 2,411 |
2,230 |
| + Hybrid bonds | 700 |
700 |
| NET DEBT AND HYBRID BONDS | 3,111 |
2,930 |
| WORKING CAPITAL | ||
| (In millions of euros) | End of September 2024 | End of December 2023 |
| Inventories | 1,392 |
1,208 |
| + Accounts receivable | 1,412 |
1,261 |
| + Other receivables including income taxes | 301 |
312 |
| + Other current financial assets | 24 |
32 |
| - Accounts payable | 993 |
1,036 |
| - Other liabilities including income taxes | 543 |
475 |
| - Other current financial liabilities | 23 |
27 |
| WORKING CAPITAL | 1,570 |
1,275 |
| CAPITAL EMPLOYED | ||
| (In millions of euros) | End of September 2024 | End of December 2023 |
| Goodwill, net | 3,011 |
3,040 |
| + Intangible assets (excluding goodwill), and property, plant and equipment, net | 6,066 |
6,146 |
| + Investments in equity affiliates | 11 |
13 |
| + Other investments and other non-current assets | 314 |
303 |
| + Working capital | 1,570 |
1,275 |
| CAPITAL EMPLOYED | 10,972 |
10,777 |