Slide 1: ODDO BHF Forum
ODDO BHF Forum 5 & 6 January 2023
Slide 2: Arkema in a snapshot
Arkema in a snapshot Innovative materials for a sustainable world ODDO BHF Forum - 5 & 6 January 2023 2
Slide 3: Arkema at a glance (2021)
24.5% Arkema at a glance (2021) 4% 31% 17% 32.5% 20% Specialty Materials 27% 85.5% 29% 15% Close to 90% Segments Markets Regions 36% pro forma 2021* 36% 29% 8% 28% 24% 14.5% 7% 5% 4% Adhesive Solutions Coating Solutions Industry Paints & Coatings Europe Asia Advanced Materials Intermediates Building
Slide 4: Excellent 2021 financial performance in a demanding context
Excellent 2021 financial performance in a demanding context Covid 9.5 1,727 context 8.8 8.7 Covid 7.9 1,474 1,457 context 1,182 18.1% 16.7% 16.7% 15.0% 2018 2019 2020 2021 2018 2019 2020 2021 Sales (€bn) EBITDA (€m) EBITDA margin (%) ODDO BHF Forum - 5 & 6 January 2023 4
Slide 5: Strong cash generation
Strong cash generation 786 762 756 → EBITDA to cash conversion rate 604 43.8% in 2021 593 In line with the long-term target of 40% → Tightly controlled working capital 12.7% of sales at end-December 2021 → Recurring capital expenditure €506 m in 2021 2017 2018 2019 2020 2021 Excluding the 2 major pr
Slide 6: Well-established financial resources
Well-established financial resources in €m 1,100 → Average maturity (excl. hybrids) 4.2 years 900 1.5% 700 1.5% → RCF 500 Maturity extended to July 2027 400 0.75% (instead of July 2024) 300 300 2.75% 3 CSR criteria taking into 0.125% 1.5% 150 account Group’s new objectives 3.125% 2023 2024 2025 2026
Slide 7: Strong value creation for shareholders
Strong value creation for shareholders → Gradual increase in the dividend → €300m share buyback program finalized in November 2021 2.2 3.0 → Share capital reduction of 3.2% by 2.3 2.5 Covid 2.5 cancelling shares in January 2022 context 2017 2018 2019 2020 2021 Dividend (in €/share) per fiscal year O
Slide 8: Strategy and ambition
Strategy and ambition ODDO BHF Forum - 5 & 6 January 2023 8
Slide 9: Materials science at the core of our streamlined portfolio
Materials science at the core of our streamlined portfolio Adhesive Solutions Coating Resins Advanced Coating Materials Solutions ODDO BHF Forum - 5 & 6 January 2023 9
Slide 10: Our 2024 ambition
Our 2024 ambition A Specialty Materials leader Sales of €10 to €11 bn Cash generation > 40% EBITDA margin of Deconsolidation of Strict financial discipline the Intermediates 17% → Net debt (incl. hybrid bonds) segment on EBITDA ratio <2x Organic growth → Solide investment grade rating 3 to 3.5% / ye
Slide 11: A strategy supported by 4 levers
A strategy supported by 4 levers Strengthen Rank among the Specialty Materials best-in-class through bolt-on chemicals acquisitions companies in terms of CSR Accelerate Pursue organic growth operational and and sustainable commercial innovation excellence initiatives ODDO BHF Forum - 5 & 6 January 2
Slide 12: Cash allocation priorities
Cash allocation priorities Estimated cash to allocate over the Subject to market conditions 5 year plan ~€3.5bn at constant leverage3 (~1.6x) Reiterating our progressive dividend policy, targeting +25% 40% payout ratio by 2024 40-45% Return to Opportunistic share buy-back program shareholders Employ
Slide 13: Strict financial discipline
Strict financial discipline ROCE Net debt to EBITDA Solid ratio <2x investment >10% (Incl. hybrid bonds) grade rating Recurring Capex Controlled working capital ~5.5% ~14% of sales of sales ODDO BHF Forum - 5 & 6 January 2023 13
Slide 14: Accelerate organic growth and sustainable innovation
Accelerate organic growth and sustainable innovation ODDO BHF Forum - 5 & 6 January 2023 14
Slide 15: Expanding opportunities from our sustainability-driven innovation
Expanding opportunities from our sustainability-driven innovation New energies Lightweight materials Living comfort Natural resources Electronics solutions and clean mobility and design and home efficiency and circular economy We expect to generate H2 €1.5 bn of additional sales by 2030 Battery Hydr
Slide 16: Strong growth potential in clean mobility
Strong growth potential in clean mobility Cathode and separators Batteries Electrolyte salts Battery pack €1 bn Cooling line sales in batteries Cell assembly by 2030 Sensors Hydrogen A more recent Electrolyzers roll-out with significant growth H2 tanks potential Fuel cells ODDO BHF Forum - 5 & 6 Jan
Slide 17: Sustainability at the heart of our latest innovations
Sustainability at the heart of our latest innovations STIX A600 bio-based floor adhesive New ranges of recycled 35% bio-based raw material, high performance polyamides solvent, phthalate and isocyanate- free formulation Partially or fully recycled PA11, PA12 and Pebax® polymers made by Agiplast Natu
Slide 18: Sustainability at the heart of our latest innovations (cont'd)
Sustainability at the heart of our latest innovations (cont’d) Clean mobility - HIGHLIGHT - Impermeable hydrogen tank liner Pierre Potier New in bio-based and recyclable Rilsan® PA11 energies medal 2022 Persico technology Cool roof Living comfort Kynar Aquatec® and Coating Solutions resins and home
Slide 19: Booming demand for our high performance Pebax elastomers
Booming demand for our high performance Pebax® elastomers - HIGHLIGHT - Global capacity expansion boosted to +40% New partnership with Decathlon Recyclable Bio-based Pebax® Rnew® → +15% starting in Q1’23, +25% starting in Q3’23, in Serquigny (France) Courtesy of Decathlon → Traditional and bio-based
Slide 20: High return investments strengthening our sustainable growth profile
High return investments strengthening our sustainable growth profile Kynar® PVDF Kynar® CTO Sartomer® Forane® +50% plant capacity* (start end-22) +50% plant capacity* (start Q1’23) Bio-based, renewable +100% plant capacity* 15 kt/yr 1233zd (start H2’23) new capacity* (start early-24) Recyclable Rils
Slide 21: Strengthen Specialty Materials through bolt-on acquisitions
Strengthen Specialty Materials through bolt-on acquisitions ODDO BHF Forum - 5 & 6 January 2023 21
Slide 22: Integration of recent acquisitions to bolster Adhesive Solutions
Integration of recent acquisitions to bolster Adhesive Solutions Permoseal Edge Adhesives (South Africa) (Texas) Ashland Performance Adhesives → Adhesive solutions for DIY, → High performance adhesives packaging and construction for residential construction → €43m sales in 2021 → $12m annual sales →
Slide 23: Continued business portfolio management
Continued business portfolio management Finalization of a high-value bolt-on acquisition Disposal of Febex in Coating Solutions Polimeros Especiales SA (Mexico) → Leading player in solvent-free waterborne acrylic resins for architectural & decorative paints, → Proposed disposal to Belgian group Pray
Slide 24: Rank among the best-in-class chemicals companies in terms of CSR
Rank among the best-in-class chemicals companies in terms of CSR ODDO BHF Forum - 5 & 6 January 2023 24
Slide 25: Arkema Corporate Social Responsibility policy
Arkema Corporate Social Responsibility policy Our 3 commitments Deliver sustainable Manage our activities Cultivate an open dialogue solutions driven by as a responsible and close relations innovation manufacturer with our stakeholders → Responsible product stewardship → Safety of people and → Ethic
Slide 26: Recognized non-financial performance
Recognized non-financial performance Superior percentile → 3rd place in DJSI World 2022 across all sectors « Chemicals » category Score 2022: 69 CSA score by S&P Global: 83 Rating: A 1st decile (global) (Oct. 2022) B for climate change CAC40® ESG Among the best Listed in the new Euronext index perfo
Slide 27: Ongoing development of our 3 CSR structuring programs
Ongoing development of our 3 CSR structuring programs Archimedes program Circular Economy Climate Plan Moving toward higher positive impact A sustainable resource management Contain global warming ImpACT+ target Life Cycle Analysis target Commitment to Paris agreement Reinforced in July 2022 65% of
Slide 28: A new, more ambitious climate plan
A new, more ambitious climate plan Scopes 1+2 Scope 3 1.5°C trajectory (Mt CO2 eq.) (Mt CO2 eq.) across the whole value chain → Replacing previous commitment -46% of a well below 2°C trajectory on scopes 1+2 in 2030 vs 2019 → Science Based Target approach 6.5 4.7 158 Scopes 1+2 Scope 3 3.7 2.95 85 •
Slide 29: Strengthening safety and promoting diversity
Strengthening safety and promoting diversity Safety Diversity TRIR (Number of accidents per million hours worked) in senior management and executive positions 1.6 Women 1.3 1.4 30% 1.0 1.0 24% 26% 0.8 19% 21% 23% 23% 2017 2018 2019 2020 2021 2030 2017 2018 2019 2020 2021 2024 2030 PSER (Process safe
Slide 30: Q3'22 results and highlights
Q3’22 results and highlights Extract from “Third-quarter 2022 results and highlights” presentation (10 November 2022) ODDO BHF Forum - 5 & 6 January 2023 30
Slide 31: Q3'22 financial highlights
Q3’22 financial highlights → Up 24% vs Q3'21 • Growing demand for high value-added solutions in batteries, lightweighting, bio-based and recycled materials, 3D printing… €2,972m sales • Group’s ongoing initiatives to adjust its selling price in the face of raw materials and energy cost inflation • V
Slide 32: Adhesive Solutions (26% of Group sales in Q3'22)
Adhesive Solutions (26% of Group sales in Q3’22) Key figures Highlights Q3’22 in €m Q3’22 Q3’21 Change 9m’22 9m’21 Change Sales 757 568 +33.3% 2,206 1,698 +29.9% → Prices up 14.8%, in a context of high raw materials, energy and logistics cost inflation EBITDA 90 79 +13.9% 291 247 +17.8% EBITDA margi
Slide 33: Advanced Materials (38% of Group sales in Q3'22)
Advanced Materials (38% of Group sales in Q3’22) Key figures Highlights Q3’22 in €m Q3’22 Q3’21 * Change 9m’22 9m’21 * Change Sales 1,131 837 +35.1% 3,319 2,374 +39.8% → Prices up 32.6% • Consistent across the segment in response EBITDA 237 176 +34.7% 793 502 +58.0% to cost inflation • Favorable pro
Slide 34: Coating Solutions (28% of Group sales in Q3'22)
Coating Solutions (28% of Group sales in Q3’22) Key figures Highlights Q3’22 in €m Q3’22 Q3’21 Change 9m’22 9m’21 Change Sales 825 742 +11.2% 2,647 2,021 +31.0% → Prices up 12.1% • Increases in downstream product lines EBITDA 131 168 -22.0% 530 403 +31.5% in response to inflation • Stable in acrylic
Slide 35: Intermediates (8% of Group sales in Q3'22)
Intermediates (8% of Group sales in Q3’22) Key figures Highlights Q3’22 in €m Q3’22 Q3’21 * Change 9m’22 9m’21 * Change Sales 246 244 +0.8% 839 905 -7.3% → Volumes down 7.0% EBITDA 59 72 -18.1% 282 228 +23.7% • Mechanical effect of refrigerant gas quotas in the US EBITDA margin 24.0% 29.5% 33.6% 25.
Slide 36: Strong cash flow generation
Strong cash flow generation in €million → Q3’22 tax rate Reconciliation of EBITDA to net cash flow 21% of REBIT (excl. exceptional items) Q3’22 Q3’21 9m’22 9m’21 EBITDA 495 474 1,819 1,310 → Working capital Current taxes -76 -60 -294 -177 • Active management to Cost of debt -21 -13 -47 -40 adjust to
Slide 37: Net debt tightly controlled
Net debt tightly controlled in €million 1.2x LTM EBITDA 157 2,615 238 1,628 1,177 -695 110 31/12/2021 Rec. cash Exceptional M&A Dividends & FX and 30/09/2022 flow items Hybrid bonds others ODDO BHF Forum - 5 & 6 January 2023 37
Slide 38: Outlook
Outlook → More challenging and uncertain global operating environment in the second half, marked in particular by the energy crisis in Europe, a slowdown in demand amplified temporarily by some destocking, and elevated inflation. → The Group will continue to benefit from the strength of its innovati
Slide 39: Disclaimer
Disclaimer The information disclosed in this document may contain forward-looking statements with respect to the financial condition, results of operations, business and strategy of Arkema. In the current context, where the Covid-19 epidemic persists across the world, and where the consequences of t