Arkema S.A. (AKE.PA) | Investment Case

1. Company Snapshot

1.a. Company Description

Arkema S.A. manufactures and sells specialty chemicals and advanced materials worldwide.The company operates through Adhesive Solutions, Advanced Materials, Coating Solutions, and Intermediates segments.It provides adhesive solutions for construction, renovation of buildings, DIY, durable goods, and packaging and non-woven applications; and supplies technologies used in building activities for businesses and individuals, including sealants, tiles, flooring adhesives and waterproofing systems, and technologies used in industry, which include automotive, textiles, glazing, flexible and rigid packaging, and hygiene markets.

The company also offers advanced materials consisting of specialty polyamides and polyvinylidene fluoride; and performance additives, such as specialty surfactants and molecular sieves, organic peroxides, thiochemicals, and hydrogen peroxide for use in automotive and transportation, oil and gas, renewable energies, consumer goods, electronics, construction, coatings, animal nutrition, and water treatment sectors.In addition, it provides coating solutions comprising EU/US acrylics and coating resins; sartomer photocure resins and coatex rheology additives; decorative paints, industrial coatings, and adhesives; and solutions for applications in the paper, superabsorbents, water treatment and oil and gas extraction, and 3D printing and electronics industries.Further, the company offers fluorogases and acrylics; and industrial intermediate chemicals used in construction, refrigeration and air conditioning, automotive, coatings, and water treatment sectors.

Arkema S.A. was incorporated in 2003 and is headquartered in Colombes, France.

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1.b. Last Insights on AKE

Arkema's recent performance was positively driven by its ongoing share buyback transactions, which have been consistently announced over the past three months. The company has been actively purchasing its own shares, with recent disclosures from June 9-13, June 16-18, and July 1-4, indicating a significant commitment to returning value to shareholders. Additionally, Arkema's strong presence in the hydrogen peroxide market, recognized for its eco-friendly profile and high-performance solutions, has positioned the company as a leader in sustainability and innovation. The company's second-quarter 2025 results, released on July 31, also contributed to its recent performance. According to Zacks, Arkema was removed from the Strong Sell List on July 7.

1.c. Company Highlights

Last Price	51.3
Change Percentage	0.79%
Open	51
Previous Close	50.9
Market Cap ( Millions)	3865
Volume	161175
Year High	85
Year Low	48.54
M A 50	51.87
M A 200	61.76

FCF Yield	5.46%
Dividend Yield	7.02%
ROE	3.16%
Debt / Equity	52.41%
Net Debt / EBIDTA	225.45%
Price To Book	0.53
Price Earnings Ratio	17.12
Price To FCF	18.32
Price To sales	0.41
EV / EBITDA	5.77

2. Arkema's Q3 2025: Resilience Amidst Macro Challenges

Arkema's Q3 2025 financial performance was marked by a decline in sales, down 8.6% year-on-year, due to a challenging macro environment, with weaker-than-anticipated trends in the US and low demand in Europe. Despite this, the company's earnings per share (EPS) came in at €1.02, beating estimates of €0.951. EBITDA was down to €310 million, impacted by a negative currency effect of around €15 million. The company's EBITDA margin was affected, but it remains committed to delivering cost savings, with a target of €100 million by year-end.

Publication Date: Nov -11

                                    📋 Highlights
                                    Macro Environment Impact::
                                                Q3 sales declined 8.6% YoY due to weak US demand, low European demand, and a 3.9% negative currency effect, with EBITDA at EUR 310M.
Growth Sectors Outperform::
                                                High-growth pockets (batteries, sports, 3D printing, healthcare) drove 20% sales growth, contributing ~7% of total sales.
Major Project Expansion::
                                                EBITDA contribution from a key project rose to EUR 60M in 2025 (vs. EUR 50M), driven by PVDF, Pebax, and 1233zd fluorospecialties.
Cost Savings Progress::
                                                On track for EUR 100M cost savings by year-end (2/3 fixed, 1/3 variable), offsetting EUR 50M in fixed cost inflation.
Data Center Growth Potential::
                                                Advanced electronics sales reached EUR 10M+ in 2025, with EUR 100M+ target by 2030, supported by refrigerant gases and heaters.

                                

Segment Performance

The company's growth pockets, such as batteries, sports, 3D printing, healthcare, and new generation fluorospecialties, delivered substantial growth, with sales up 20% in these key markets. High Performance Polymers (HPP) is a growing division, with four lines of business, including PVDF, specialty fluorogases, polyamide 11, and PIAM. Although HPP's performance is below expectations due to macroeconomic challenges, the division is considered resilient, with prospects for significant growth.

Growth Initiatives

Arkema is making significant investments in growth initiatives, including a new structure platform dedicated to data centers, which is expected to bring in significant growth prospects, with sales estimated to reach over €100 million by 2030. The company's refrigerant gases, such as Forane, will play a key role in the next generation of chillers. The company has developed mature technologies, but applications are not yet fully mature, requiring further development and qualification.

Cost Savings and Cash Flow

The company is on track to deliver €100 million of fixed and variable cost savings by year-end, with a focus on optimizing operations and working capital management. Arkema's recurring cash flow was €207 million, up compared to last year despite lower earnings. The company's cash generation is stable, with a stable sales seasonality in Q3.

Valuation and Outlook

With a P/E Ratio of 17.19 and an EV/EBITDA of 5.78, the market is pricing in a moderate growth outlook for Arkema. The company's dividend yield of 6.99% is attractive, with a sustainable payout covered by free cash flow. Analysts estimate next year's revenue growth at 2.1%, indicating a gradual recovery. Arkema's focus on cost reduction and cash optimization, while maintaining its ability to rebound when the cycle improves, positions the company for long-term success.

3. NewsRoom

Arkema and Semcorp Sign a Strategic Partnership in Battery Separators

Dec -04

Source:

Arkema SA (ARKAF) Q3 2025 Earnings Call Highlights: Navigating Challenges with Strategic Growth ...

Nov -07

Source:

Arkema: Third-Quarter 2025 Results

Nov -07

Source:

Arkema Continues to Decarbonize Its Lacq/Mourenx Site

Oct -23

Source:

Is Arkema’s Green Bond and Sustainability Push Shaping Its Long-Term Investment Story (ENXTPA:AKE)?

Sep -10

Source:

Laurent Peyronneau Is Appointed Executive Vice President of the Adhesive Solutions Segment (Bostik) and Member of Arkema’s Executive Committee

Sep -08

Source:

ARKEMA Has Successfully Placed a New €500 Million Green Bond

Sep -02

Source:

Vietnam Construction Chemicals Market Forecast Report 2025-2034 | Major Players are Investing Heavily in Sustainable Manufacturing Practices and Product Innovation to Gain a Competitive Edge

Sep -02

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.73%)

6. Segments

Advanced Materials

Expected Growth: 3.5%

Arkema's Advanced Materials segment growth is driven by increasing demand for sustainable and lightweight materials in the automotive and aerospace industries, as well as growing adoption of renewable energy sources. Additionally, the segment benefits from Arkema's innovative product offerings, such as its high-performance polymers and advanced composites, which cater to the needs of these industries.

Adhesive Solutions

Expected Growth: 3.8%

Arkema's Adhesive Solutions segment growth of 3.8% is driven by increasing demand for sustainable and eco-friendly adhesives in the packaging and construction industries, coupled with the company's strategic acquisitions and investments in R&D, enabling the development of innovative and high-performance adhesives.

Coating Solutions

Expected Growth: 4.2%

Arkema's Coating Solutions segment growth is driven by increasing demand for sustainable and eco-friendly coatings, expansion in the Asian market, and strategic acquisitions. Additionally, the segment benefits from the growing trend of waterborne coatings, driven by environmental regulations and consumer preferences for low-VOC products.

Intermediates

Expected Growth: 3.2%

Arkema S.A.'s intermediates segment growth of 3.2% is driven by increasing demand for specialty chemicals in the automotive and construction industries, coupled with the company's strategic expansion into high-growth markets, such as Asia, and its focus on innovative and sustainable products.

Corporate

Expected Growth: 2.8%

Arkema S.A.'s 2.8% corporate growth is driven by increasing demand for sustainable and specialty materials, strategic acquisitions, and operational efficiency improvements. The company's focus on high-margin businesses, such as adhesives and advanced materials, also contributes to its growth. Additionally, Arkema's commitment to innovation and R&D investments enables it to stay ahead in the competitive chemicals market.

7. Detailed Products

Adhesives

Arkema's adhesives are used in various industries such as construction, automotive, and consumer goods. They offer a range of adhesives including hot melts, pressure-sensitive adhesives, and reactive adhesives.

Advanced Organic Materials

Arkema's advanced organic materials are used in various applications such as electronics, aerospace, and industrial coatings. They offer a range of materials including fluoropolymers, specialty polyamides, and polyvinylidene fluoride (PVDF).

Coatings

Arkema's coatings are used in various industries such as construction, industrial, and automotive. They offer a range of coatings including acrylic, polyurethane, and epoxy-based coatings.

Fluoropolymers

Arkema's fluoropolymers are used in various applications such as non-stick coatings, semiconductor manufacturing, and industrial processing. They offer a range of fluoropolymers including Teflon, Kynar, and Rilsan.

Hydrogen Peroxide

Arkema's hydrogen peroxide is used in various applications such as paper bleaching, wastewater treatment, and chemical synthesis.

PVC

Arkema's PVC is used in various applications such as pipes, profiles, and vinyl compounds.

Rilsan Polyamide

Arkema's Rilsan polyamide is used in various applications such as oil and gas, industrial, and automotive.

Thiochemicals

Arkema's thiochemicals are used in various applications such as oil and gas, mining, and industrial.

8. Arkema S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Arkema S.A. operates in a market with moderate threat of substitutes. While there are some alternatives available, they are not significantly cheaper or better, limiting their appeal.

Bargaining Power Of Customers

Arkema S.A.'s customers have limited bargaining power due to the company's strong brand reputation and diversified product offerings.

Bargaining Power Of Suppliers

Arkema S.A. faces moderate bargaining power from its suppliers, as it relies on a diverse range of suppliers for its raw materials.

Threat Of New Entrants

The threat of new entrants is low for Arkema S.A. due to the high barriers to entry in the chemical industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The chemical industry is highly competitive, with many established players competing for market share, leading to a high intensity of rivalry for Arkema S.A.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	43.34%
Debt Cost	3.95%
Equity Weight	56.66%
Equity Cost	9.98%
WACC	7.37%
Leverage	76.50%

11. Quality Control: Arkema S.A. passed 4 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Evonik

A-Score: 5.4/10

Value: 7.7

Growth: 2.8

Quality: 3.9

Yield: 9.4

Momentum: 1.0

Volatility: 7.7

1-Year Total Return ->

Fuchs Petrolub

A-Score: 5.4/10

Value: 5.1

Growth: 5.6

Quality: 7.2

Yield: 5.0

Momentum: 3.0

Volatility: 6.3

1-Year Total Return ->

Brenntag

A-Score: 5.4/10

Value: 7.1

Growth: 5.6

Quality: 5.1

Yield: 5.6

Momentum: 1.5

Volatility: 7.3

1-Year Total Return ->

Arkema

A-Score: 4.7/10

Value: 7.3

Growth: 3.4

Quality: 3.2

Yield: 7.5

Momentum: 0.5

Volatility: 6.0

1-Year Total Return ->

Clariant

A-Score: 4.3/10

Value: 6.3

Growth: 3.7

Quality: 3.1

Yield: 6.9

Momentum: 0.0

Volatility: 6.0

1-Year Total Return ->

IMCD

A-Score: 4.2/10

Value: 4.2

Growth: 6.6

Quality: 5.0

Yield: 3.1

Momentum: 0.5

Volatility: 6.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

1.33%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.37%

Arkema S.A. - FR0010313833

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on AKE

1.c. Company Highlights

Medium Volatility

Stable Momentum

Fairly Valued

Earnings Beats

Revenues Miss

Average Yield

Revenues Beats

Average Quality

Weak Momentum

Earnings Miss

Average Growth

2. Arkema's Q3 2025: Resilience Amidst Macro Challenges

Segment Performance

Growth Initiatives

Cost Savings and Cash Flow

Valuation and Outlook

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.73%)

6. Segments

Advanced Materials

Expected Growth: 3.5%

Adhesive Solutions

Expected Growth: 3.8%

Coating Solutions

Expected Growth: 4.2%

Intermediates

Expected Growth: 3.2%

Corporate

Expected Growth: 2.8%

7. Detailed Products

Adhesives

Advanced Organic Materials

Coatings

Fluoropolymers

Hydrogen Peroxide

PVC

Rilsan Polyamide

Thiochemicals

8. Arkema S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Arkema S.A. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

51.3$

Current Price

51.3$

Potential

12.e Scoring ^Insights

12.f DCF ^BETA