Pressure soars, shares plunge 82%: Arkema “Sounds the Alarm”?

Recently, French chemical giant Arkema simultaneously released its full-year 2025 financial report and a major strategic adjustment announcement, detailing a "slimming down" contraction amid performance pressures on one hand, and a firm commitment to focusing on high-value-added sectors on the other.

I. 2025 Financial Report Analysis: Resilience and Highlights Amidst Pressure

Amid global macroeconomic weakness and sluggish demand in Europe and the US, Arkema's 2025 overall performance showed a "pressure but resilient" trend. The company's core financial data have been disclosed, making its highlights and challenges clearly visible.

In terms of core performance, annual sales reached 9.068 billion euros, a 5% decrease year-on-year; EBITDA was 1.251 billion euros, a 18.3% decrease year-on-year, although the EBITDA margin of 13.8% still met the previous performance guidance range. Pressure on the profit side was more obvious, with adjusted net income of 328 million euros, a sharp 46.8% decline year-on-year; net income was only 62 million euros, a massive 82.6% drop year-on-year, showing a significant trend of performance decline.

Although under overall pressure, the report still features outstanding performances, becoming the key to supporting the company's steady development.

Cash flow performance is strong.Recurring cash flow reached €464 million, significantly exceeding the €300 million earnings guidance target, substantially strengthening the balance sheet and providing a solid financial foundation for future strategic initiatives.

Significant contributions to key projectsCompared to 2024, key projects brought an additional EBITDA contribution of about 60 million euros, serving as an important factor in offsetting the decline in performance.

High-potential markets are growing rapidly.: Key high-appeal markets such as batteries, sports equipment, 3D printing, medical and health, and fluorine-containing specialty materials saw a 16% year-on-year increase in sales, demonstrating strong development resilience.

The capacity expansion project has been successfully implemented.Three capacity expansion projects were successfully commissioned on schedule and within budget, located in the U.S. (DMDS, 1233zd) and Asia (Rilsan® Clear), further enhancing the global production footprint.

Cost control and R&D advancement in tandemStrict cost control effectively hedged against fixed cost inflation pressure, while the group continued to increase R&D investment, laying the foundation for technological innovation and business transformation.

In addition, Arkema announced its intention to maintain a dividend of 3.60 euros per share, safeguarding shareholder rights even under pressure, demonstrating the company's confidence in long-term development.

II. Major Move! Plans to Lay Off 1,800 Employees and Fully Restructure Business Segments

Facing the dual challenges of declining performance and business divergence, Arkema has launched an aggressive strategic restructuring plan centered on "streamlining the organization, optimizing operations, and focusing on core businesses," with workforce reductions and business portfolio realignment drawing the most attention.

1. Layoff Plan: Approximately 1,800 employees to be cut over the next three years to streamline the organization and improve efficiency.

To control costs and improve efficiency, Arkema plans to lay off approximately 3% of its workforce annually over the next three years, totaling around 1,800 jobs. The company will focus on its core business and allocate resources to higher-value areas.

2. Business Restructuring: Divest Inefficient Businesses and Focus on High-Growth Segments

First, divest non-core assets.: To divest the PVC-related product lines under the Coatings Solutions business, including the global MBS business and the AIMPA businesses in Europe and Asia, in order to focus on core competencies.

Second, integration and shutdown of business operationsEstablish a new "Basic Materials Business," integrating acrylic monomer and hydrogen peroxide operations across the three regions; discontinue the intermediates business; phase out the legacy refrigerants business around 2030, with next-generation solutions integrated into the fluorine specialty products portfolio.

Third, optimize the business ratioAfter the adjustment, the proportion of the original three core businesses dropped from 92% to 85%, achieving precise resource allocation and transparent performance.

III. Strategic Focus: Betting on Special Materials, Accelerating Layout in Asia

The core logic of this restructuring is that Arkema is fully shifting its strategic focus to the specialty materials sector — a resilient segment with structural growth potential, which has been designated as the core of the company's long-term value creation. In recent developments, Arkema has been actively expanding its presence in the specialty materials sector, particularly increasing its investments in the Asian market.

1. Capacity Expansion: Asia’s Largest Transparent Polyamide Production Capacity Comes Online in Singapore

On January 13, Arkema announced the full commissioning of its new Rilsan® Clear transparent polyamide (PA11) production facility in Singapore. This commissioning has elevated Arkema to the position of Asia’s largest supplier of transparent polyamide, with related production capacity tripling outright. This plant—Arkema’s largest investment project to date—establishes a fully integrated industrial chain spanning raw materials, synthesis of monomers, and resin production, enabling direct service to Asia’s rapidly growing automotive, sports, consumer electronics, and 3D printing/additive manufacturing industries, thereby further reinforcing Arkema’s leadership position in the high-performance polymers sector.

Cooperation Upgrade: Binding with the Two Leading Lithium Separator Companies in China, Transitioning to a Technology Partner

In late 2025 to early 2026, Arkema reached a deep cooperation with two leading Chinese membrane companies, Enjie Co., Ltd. and Star Energy Materials, to collaborate on its core businesses, including Kynar® PVDF (polyvinylidene fluoride) and Incellion™ acrylic binders.

This collaboration has enabled Arkema to upgrade its role in the Chinese market, shifting from a traditional materials supplier to a technology partner integrating "R&D, production, and services." The cooperation model is no longer limited to material supply, but also leverages Arkema's global presence to support partners as Chinese battery material companies expand overseas, providing assistance such as overseas certification and customer connection, forming an efficient synergy of "capacity + channel," while also helping Arkema to increase its market penetration in high-end battery materials.

For 2026, Arkema has provided a cautious and clear development outlook: against a backdrop of persistently weak global macroeconomic demand, unfavorable foreign exchange conditions, and limited market visibility, the Group will continue to focus on controllable internal factors and aims to achieve modest EBITDA growth on a constant-currency basis.