Arkema SA has posted a 12.5 percent year-on-year growth in earnings before interest, tax, depreciation and amortization (EBITDA) at a “record high” of 1.19 billion euros ($1.26 billion) for the full fiscal year 2016, the company announced Feb. 28.
The results were driven by the integration and development of adhesives company Bostik, acquired in 2015, and the performance of its Technical Polymers business unit, said the French specialty chemicals company.
Major internal projects, said Arkema, represented around three-quarters of the EBITDA growth over the year.
Additionally, lower prices for some raw materials and “operational excellence” also contributed to this achievement.
Volumes were up by 3.2 percent, driven by what the company described as “innovation and Asia,” although sales fell 1.9 percent to 7.5 billion euros ($7.9 billion).
In high performance materials segment, sales were up 1.9 percent to 3.42 billion euros ($3.62 billion) compared to 2015. Volumes grew 2.6 percent driven by “innovation in Technical Polymers, in particular in lighter materials and new energies,” said Arkema.
Geographical expansion of Bostik also contributed positively, while oil & gas activities softened.
Higher volumes offset the 1.4 percent price effects of different product mix from last year and change in prices of certain raw materials, according to the Colombes, France-based company.
Earnings for the segment grew 12.6 percent at 570 million euros ($603.7 million) supported by developments in the Technical Polymers and Speciality Adhesives businesses.
“The group achieved an excellent Q4 driven by excellent growth in volumes. For the year as a whole, financial performance was significantly up and cash generation was high,” said chairman and CEO Thierry Le Hénaff.
He also said that the integration of specialty adhesive company Bostik had enabled Arkema to achieve the earnings growth it had set for itself for the acquisition a year ahead of schedule.
North America and Asia, he added, accounted for 50 percent of volume sales for the company.
Looking forward, in 2017, the company expects moderate global growth, mixed dynamics in different regions, and volatility in energy prices, raw materials and currencies.
The group also announced that it will increase its selling prices to reflect higher raw materials.
Le Hénaff also confirmed that Arkema would pursue its “operational excellence initiatives” which are aimed at offsetting part of the inflation on fixed costs.