Full Year 2024 Arkema SA Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Aron Ceccarell - Berenberg - Analyst : Good morning. Hello, Thierry. Hello, Marie Jose. I have three questions, please. My first one is on your full year '25 guidance, specifically on the lower end of your target. Could you help me understand a little bit the assumption you're making in place. In this scenario, are you still assuming around EUR100 million contributions on, from new projects? Or is there any assumption from a business unit beside intermediates to decline? The second question is on Coating Solutions. It would be great if you can help me reconcile a little bit the strength in the downstream business with the weakness in the upstream critics. Is this a problem of supply if this is a problem of supply, where does this come from at this stage? My final one is on the Adhesive Solutions business. Historically, you have not been very pushing, let's say, on price increases. Raw materials are not declining anymore, but clearly the demand remains relatively soft. Would you expect pricing to be down on a year-over-year basis in '25? Thank you.

Question: Aron Ceccarell - Berenberg - Analyst : Thank you. Just a clarification. The impact from intermediate is expected EUR30 million. 30. Is that correct?

Question: Aron Ceccarell - Berenberg - Analyst : Okay, thanks very much.

Question: Matthew Yates - Bank of America - Analyst : Hey afternoon, (inaudible). I had a couple of questions for Marie-Jose really. Thank you for breaking down those EUR155 million of nonrecurring items. That was going to be one of my questions. When we look into 2025, can you talk a little bit about what items will still be there next year? Are we done now with the Singapore costs? I guess, M&A depends what you do, but things like restructuring environment, do those repeat as a normal course of business? And then there's somewhat of a sort of related follow-up. When you talk about EUR600 million of recurring cash flow, what is the number that your IFRS accounts will actually show this time next year? I think you stopped talking about exceptional CapEx at the last (inaudible). We removed that definition. But again, probably related to those nonrecurring items in the P&L, what are the other things that may sort of mean that EUR600 million of free cash flow number is not exactly what's reported Thanks you.

Question: Matthew Yates - Bank of America - Analyst : Sorry, in summary, is, so it's EUR600 million minus for the sake of argument, EUR60 million of exceptional items is the way to think about that?

Question: Matthew Yates - Bank of America - Analyst : Perfect. Thank you.

Question: Tom Wrigglesworth - Morgan Stanley - Analyst : Thank you very much. Two questions, if I may. The first one on the new projects and their ramp-up in particular, the PA11 plant post the, not the stop the reramp that took place at the end of last year. What's the current sales rate out of that facility versus the expected (inaudible). I think it's EUR300 million of sales at run rate that we're expecting. The second question, actually, let's, on Advanced Materials. So can you just give us a kind of a global picture [PBDF], are you building the new capacity in the US because the incentive pricing is there? Or is this a pre-emptive move ahead of anticipated demand? And the third question is on fluorogases in intermediates. Obviously, there's a EUR30 million reset this year. But how can you grow that business? Will the market normalize back to a high level of its own accord? Or will you look to drive growth through pricing different products? Thank you.

Question: Tom Wrigglesworth - Morgan Stanley - Analyst : Okay, great. Thank you, Thierry, very clear.

Question: Tony Jones - Redburn Atlantic - Analyst : Yes, good morning, everybody, and thanks for taking my questions. I've got two. Firstly, on growth projects. When you're deciding and budgeting to go ahead with these growth investments, how much visibility do you have on your demand? Are they usually offtake agreements with big customers? Or is it more speculative? And then secondly, on uses of cash. Share price is now trading at book value today. And you're not really getting much credit for the growth projects and acquisitions sadly. Is it now time to rethink about a major stock buyback program? Or is that just simply not going to happen? Thank you.

Question: Tony Jones - Redburn Atlantic - Analyst : Thank you, Thierry. That's very helpful.

Question: Chetan Udeshi - JPMorgan - Analyst : Yeah, hi, thanks. Actually, my questions are for Marie-Jose. First is, I saw there was a good step-up in recurring D&A in Q4. Can you just give any guidance on what you think is the right number to look for in terms of recurring D&A for 2025? The second question was just a clarification on the recurring free cash flow, again, just to on Matt's point earlier. Can I confirm you don't include the lease costs in that number. So that comes below that recurring cash flow. Is that right?

Question: Chetan Udeshi - JPMorgan - Analyst : Understood. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 27, 2025 / 10:30AM, AKE.PA - Full Year 2024 Arkema SA Earnings Call

Question: Jean-Lou Romain - CIC Market Solutions - Analyst : Thank you. Could you update us on potential consequences of recent-past legislation on PFAS in France. I guess it's not a lot, but I would like to have a confirmation.

Question: Jean-Lou Romain - CIC Market Solutions - Analyst : One question.

Question: Jean-Lou Romain - CIC Market Solutions - Analyst : Perfect. Thank you.

Question: Geoff Haire - UBS - Analyst : Yeah, good morning and thanks for the presentation. Just had two questions. First of all, sorry, in your comments on the outlook, you mentioned the customers were holding back orders because of the uncertainty around tariffs. Could you give a little bit more details on that and what areas of the business you're seeing that most acutely in. And also just on cost savings, you're obviously targeting the EUR250 million by 2028. Do you see a need to increase that number going forward just given the current macro environment?

Question: Geoff Haire - UBS - Analyst : Okay, thank you very much.

Question: Laurent Favre - BNP Pariba - Analyst : Yes, good morning. Two questions, please. Sorry, the first one on PM. I think you mentioned that you bought certifications for North American and European sales. I was wondering if you could talk about in which area, in terms of end markets or end products we should be thinking of? That's the first one. And the second one is on slide 10. I know it's a small difference, but at the Q3 stage, you were telling us that the bridge from 2024 to '28 would be EUR440 million, and you added PVDF in the US, but you've moved to EUR400 million plus. And I'm just wondering if you've made more conservative assumptions? Or you just prefer to show us a round number? Thank you.

Question: Laurent Favre - BNP Pariba - Analyst : And in Europe and North America, are we also looking at consumer electronics? Or is it other applications?

Question: Laurent Favre - BNP Pariba - Analyst : Okay, thank you.

Question: Jaideep Pandya - On Field Research - Analyst : Thank you. Firstly is on sort of adhesives, but more broadly in the context of construction chemicals industry. Thierry, a lot of companies in the construction chemicals space, be it in roofing or are targeting now sort of the adhesives piece, there's a lot of M&A that is going on, on the light side construction space. How do you see the competitive landscape evolving from where you guys sit? Is there more competition, but on the other hand, also more opportunities for adhesives to penetrate in the construction industry and what happens with regards to M&A for yourselves? Are there more opportunities or the multiple is actually going up because there are more people willing to invest in this area now. That's my first question. Second question is around the shutdowns that we are hearing on and off, especially from American companies in Europe. How do you see the upstream raw material availability, especially properly on a longer-term basis for euros? Is that an area of concern or you see abundant supply and therefore, we shouldn't worry about your acholic assets in Europe? Thanks a lot.

Question: Ranulf Orr - Citi - Analyst : Hi, yeah, thanks for taking the questions. Two, please. Firstly, China (inaudible) seems to move quite positively year-to-date. Is this something you're seeing? And if the spreads are maintained for the rest of the year. Can you give an idea of the positive incremental earnings impact you could see? And the second one is just on the outlook, apologies if I missed it, so feel free to skip. But could you expand a little bit more on the Q1 outlook by division and the sequential EBITDA progression? Thank you.

Question: Ranulf Orr - Citi - Analyst : Okay, thank you.