Arkema Navigates Tough 2025, Bets on New Structure and Innovation

PARIS, France – February 26, 2026 – Specialty materials giant Arkema has detailed a year of strategic resilience, navigating a difficult global economic landscape to deliver on its financial guidance for 2025 while laying the groundwork for a more focused future. In its full-year results, the company reported an EBITDA of €1,251 million and a remarkable recurring cash flow of €464 million, significantly outperforming its €300 million guidance. The performance comes amidst a 5% drop in annual sales to €9.1 billion, a reflection of sluggish demand in Europe and North America.

More significantly, the French chemical producer announced a major overhaul of its reporting structure, set to take effect in 2026. This move will create a new 'Primary Materials' segment, effectively separating its more cyclical businesses from its core, high-growth Specialty Materials portfolio. The strategy aims to provide investors with a clearer view of the company's resilient, high-value platforms, which are central to its long-term vision.

Weathering the Economic Storm

Arkema’s 2025 performance was set against a backdrop of significant macroeconomic headwinds that have broadly impacted the global chemical industry. Slowing GDP growth, persistent inflationary pressures, and weak industrial output, particularly in Europe, created a challenging operating environment. The company cited a “weak demand environment” and significant destocking by customers, especially in the fourth quarter, as primary drivers for the decline in sales volumes.

Despite these challenges, the company demonstrated robust operational and financial discipline. Through what Chairman and CEO Thierry Le Hénaff described as a focus on “what is under our control,” Arkema implemented strict cost controls that successfully offset fixed cost inflation for the year. This discipline, combined with tight management of working capital, enabled the company to generate a recurring cash flow that was more than 50% above its revised guidance. This strong cash generation has further solidified its balance sheet, a key advantage in an uncertain market.

“In 2025 the macroeconomic environment was particularly demanding and more challenging than initially expected at the start of the year,” stated Le Hénaff in the company’s press release. He praised his teams for their “strong commitment and agility,” which allowed the company to generate strong cash flow and strengthen its balance sheet, positioning it well for when the market rebounds.

A Strategic Pivot for Clarity and Growth

The most significant announcement from Arkema is its plan to reorganize its business segments starting in 2026. The creation of a new “Primary Materials” segment is a decisive move to enhance financial transparency and sharpen the company's strategic focus. This new segment will house businesses with more cyclical earnings profiles, including global acrylic monomers, legacy refrigerants, and the hydrogen peroxide business. These activities, while important, are subject to greater market volatility and have different growth dynamics than the company's core focus.

By isolating these businesses, Arkema aims to shine a brighter spotlight on its three Specialty Materials segments: Adhesive Solutions, Advanced Materials, and Coating Solutions. Pro-forma figures for 2025 show that these specialty segments account for approximately 85% of group sales and have demonstrated strong resilience, with a comparatively moderate 5% EBITDA decline at constant exchange rates despite the difficult macro environment. This restructuring aligns with a broader industry trend where chemical companies are pivoting away from commodity-like products to focus on higher-margin, innovation-driven specialty applications.

The move is expected to help investors better appreciate the quality and stability of Arkema’s core earnings, which are driven by long-term megatrends. For example, next-generation, low Global Warming Potential (GWP) refrigerants will be moved into the Advanced Materials segment, underscoring their high-growth potential in applications like heat pumps and data center thermal management.

Doubling Down on Sustainable Innovation

While cost discipline was a key theme in 2025, Arkema did not pull back on its long-term innovation strategy. In fact, R&D expenses increased by 4% at constant currencies. This investment fueled a standout performance in its key strategic growth markets, which include solutions for batteries, sports, 3D printing, healthcare, and new-generation fluorospecialties. Sales in these attractive markets surged by an average of 16% year-over-year, providing a crucial counterbalance to weakness elsewhere.

This growth is supported by tangible progress in expanding production capacity. The company successfully started up three major capacity expansions on schedule and on budget: a DMDS unit and a 1233zd (low-GWP foam blowing agent) facility in the United States, and a new Rilsan® Clear transparent polyamide unit in Singapore. The Singapore facility triples Arkema’s global capacity for this high-performance polymer, which is used in demanding applications from eyewear to consumer electronics, strengthening its leadership position in Asia.

Arkema also made notable progress on its Corporate Social Responsibility (CSR) goals. The company reported a 48.7% reduction in its Scope 1 and 2 greenhouse gas emissions compared to a 2019 baseline. Furthermore, its portfolio of ImpACT+ solutions—products with a demonstrable sustainability benefit—grew to represent 57% of total sales, up from 53% in 2024, signaling a clear market demand for greener chemistry.

A Cautious Outlook for 2026

Looking ahead, Arkema remains cautious, anticipating that the global macroeconomic environment will continue to be marked by weak demand and limited visibility. The company will continue to focus on its internal levers, targeting a slight EBITDA growth in 2026 at constant currencies. It will rely on the continued ramp-up of its major industrial projects, which are expected to contribute an additional €50 million to EBITDA.

Capital expenditure will be managed at around €600 million, a decrease from previous years but still allowing for targeted investments in high-growth areas. With a stable dividend of €3.60 per share proposed for 2025, a strengthened balance sheet, and a new, more transparent reporting structure, Arkema is positioning itself to not only weather current uncertainties but also to capture future growth as it solidifies its identity as a leader in specialty materials.