Advanced materials specialist Arkema has announced that its annual revenue grew by 7% within its Q1 2021 financials thanks in part to increased demand for its 3D printing products.
Between Q1 2020 and Q1 2021, the firm’s revenue rose from €2.088 billion to €2.22 billion, an increase that Arkema has attributed to an 8% rise in orders from its batteries, electronics and consumer goods clients, as well as a 6% sales surge seen in its Coating Solutions, which includes much of its 3D printing business.
The company’s latest financials see it make a return to annual growth, after it reported €1.98 billion in revenue during Q4 2020, 3% less than the €2.05 billion generated in Q4 2019. Since the results were published, the firm’s shares have risen 4%, reflecting investor confidence that it’s now on a trajectory for continued growth.
Speaking on a call with analysts and investors, Arkema’s CEO Thierry Le Hanaff explained that the firm intends to invest in “cutting edge innovations” and sustainability trends moving forwards. “This year marks the start of a new era of growth for Arkema, consistent with the ambitions unveiled at our 2020 Capital Markets Day,” said Le Hanaff.
“Supported by our team’s strong commitment to the company’s strategy, we are accelerating our innovation projects and investments in promising high growth markets driven by sustainable megatrends, such as clean mobility, lightweight materials, 3D printing and energy efficiency,” he added.
Arkema’s Q1 2021 results
Although Arkema doesn’t report directly on its 3D printing revenue, it does outline its sales across five key segments: Specialty Materials, Adhesive Solutions, Advanced Materials, Coating Solutions and Intermediates. The firm’s Specialty Materials division was by far its best earner during Q1 2021, generating €1.8 billion in revenue, 8.4% more than in Q1 2020 and 81% of its entire turnover.
In terms of 3D printing specifically, the company’s Coatings Solutions segment is the only one that’s reported with direct reference to demand from the industry’s clients. Arkema says that additive manufacturing drove a “strong dynamic” in the division during the quarter, helping to make it the firm’s fastest growing unit in Q1 2021, generating €567 million, 9.7% more than the €517 million reported in Q1 2020.
Despite the fact that product availability was temporarily affected by the winter storm seen in the U.S, the company’s Coating Solutions EBITDA also rose to €78 million in Q1 2021, 20% higher than in Q1 2020. The division’s pre-tax earnings increase was largely fuelled by a jump in sales volume, as well as price rises in line with the inflation seen in the cost of raw materials.
Over the same period, Arkema’s Adhesive Solutions and Advanced Materials segments also grew, raising €555 million and €703 million in revenue respectively, with only the company’s Intermediates division seeing a decline, at 0.5%. According to Arkema’s CFO Marie-José Donsion, the firm’s near-clean sweep of annual growth during Q1 was down to a recovery in demand from its core construction, DIY and industrial clients.
|Arkema Financials (€)||Q1 2020||Q1 2021||Variance (€)||Variance (%)|
A 3D printing investment return?
Over the last year, Arkema has made a string of 3D printing-related business moves that may ultimately have contributed to its return to growth in Q1 2021. In August 2020, for instance, the company invested in Continuous Composites as a means of supporting the R&D of its ‘CF3D’ process, a technology which is already being used by the Air Force Research Lab and Lockheed Martin.
Later, during Q4 2020, Arkema also provided financing to Adaptive3D, a resin supplier that has since sought to ramp up its production of materials used to create tear-resistant rubbers. At the time, the firms’ Sumeet Jain described the move as “a great step forward for the whole AM field,” and the deal has effectively allowed Adaptive3D to access new markets with its Arkema-based line of materials.
Finally, and most significantly, Arkema also acquired resin manufacturer Colorado Photopolymer Solutions (CPS) in December 2020. CPS is known as a producer of 3D printing resins for energy curing technologies, and the integration of its range into Arkema’s portfolio, will no doubt have yielded a Q1 increase in revenue for the latter.
Interestingly, on the firm’s conference call, Hanaff said that Arkema is now weighing up further investments in its 3D printing portfolio, with a particular eye on the growing Asian market. “We are accelerating our initiatives in the very attractive markets for batteries and clean mobility in China,” said Hanaff. “In addition, we are currently assessing further investment for electronics and 3D printing.”
Uncertainty remains for FY 2021
Hanaff finished Arkema’s earnings call by saying that the firm “remains attentive to the evolution” of the pandemic, but that it doesn’t expect demand from its core construction and DIY clients to fall any further. In fact, Hanaff maintained that the company had seen “positive trends” in its addressable markets, and it would now be targeting “growth opportunities linked to sustainability.”
Although Arkema hasn’t issued guidance for Q2 2021, it has said that it expects its core Specialty Materials segment to achieve annual growth of 20% during FY 2021, and reiterated that having divested its Functional Polyolefins segment last year, it remains committed to becoming ‘a pure specialty materials player’ by 2024.
“Despite the ongoing uncertainty of the health context, 2021 should be a good year of growth for Arkema,” concluded Hanaff. “We will continue to accelerate our high value-added developments in our three core segments, as well as the execution of our strongly value-creative strategy to refocus entirely on Specialty Materials.”
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Featured image shows Arkema’s headquarters in Colombes, France. Image via Arkema.