Slide 1: Full Year 2017 Results and Outlook
FULL YEAR 2017 RESULTS AND OUTLOOK THIERRY LE HÉNAFF CHAIRMAN AND CEO
Slide 2: Arkema in a nutshell
ARKEMA IN A NUTSHELL 2017 KEY FIGURES €8.3 sales bn 19,800 employees worldwide Worldwide presence in 55 countries 136industrial sites 3 R&D & innovation geographical hubs BALANCED PORTFOLIO OF BUSINESSES AND GEOGRAPHIC FOOTPRINT Coating 23% Solutions 38% Europe 24% Bostik High North Performance 46%
Slide 3: Ahead of our 2017 financial targets
AHEAD OF OUR 2017 FINANCIAL TARGETS 2017 TARGETS SET 3 YEARS AGO ACHIEVED IN 2017 DURING OUR 2015 CAPITAL MARKETS DAY EBITDA €1.3 bn €1,391 m from €784 m in 2014 Net cash flow* x3 x4 vs 2014 EBITDA to free cash conversion 35% 41% from 18% in 2014 Capital intensity (recurring capex to sales) 5.5% 5.2
Slide 4: Bostik fully on track with significant growth potential ahead
BOSTIK FULLY ON TRACK WITH SIGNIFICANT POTENTIAL AHEAD INNOVATION GROWTH EBITDA GROWTH +53% driven by lightweighting and home efficiency BOLT-ON ACQUISITIONS in a still very fragmented market 3 DRIVERS in only 3 years EMERGING COUNTRIES speed-up development Malaysia Vivid® BrillianceTM Bangalore Mex
Slide 5: Advanced Materials: sustained growth supported by innovation
ADVANCED MATERIALS SUSTAINED GROWTH SUPPORTED BY INNOVATION IN MEGATRENDS EBITDA GROWTH +7.5% per year Lightweight Water New energies Electronics 3D printing Sports materials treatment Specialty polyamides compounding lines (US & China) Sartomer Partnership NextDimensionTM with EOS in 2014 2017 Rils
Slide 6: Best-in class cash conversion
BEST-IN CLASS CASH CONVERSION €2.7 BN FREE CASH BEFORE CAPEX STRONG FREE CASH FLOW GENERATION* GENERATED OVER 2015-2017 In €m Use of cash CAPEX M&A Dividend 575 442 426 €1.3 bn €2 bn net €0.4 bn Acquisitions Bostik, Den Braven and CMP % of EBITDA 18% 42% 36% 41% Divestments 145 Sunclear, activated c
Slide 7: Significant increase in dividend
SIGNIFICANT INCREASE IN DIVIDEND DIVIDEND in €/share Reflects the strong confidence of +12% CAGR 2.30 the Board in the current level of 2.05 profitability and long-term growth 1.90 prospects 1.80 1.85 1.85 ~30% payout ratio 1.30 Dividend to be paid fully in cash 1.00 from 29 May 2018 0.75 0.60 0.60
Slide 8: 3-year share price evolution
3-YEAR SHARE PRICE EVOLUTION Performance 115,00 since spin-off 105,00 +84% Arkema +283% 95,00 85,00 +39% Peer average (1) +97% 75,00 +24% CAC40 +8% 65,00 55,00 45,00 01/01/2015 01/07/2015 01/01/2016 01/07/2016 01/01/2017 01/07/2017 31/12/2017 (1) AkzoNobel, BASF, Clariant, DSM, Evonik, Lanxess, Solv
Slide 9: Reminder of 2023 long-term objectives from 2017 Capital Markets Day
REMINDER OF 2023 LONG-TERM OBJECTIVES PRESENTED AT 2017 CAPITAL MARKETS DAY A global specialty player focused on Delivering strong margins and adhesives and advanced materials cash generation Bostik 2023 objectives Exceed 1/3 of Group sales REBIT margin EBITDA to free cash More than double sales vs
Slide 10: Long term growth supported by a new wave of significant projects
LONG TERM GROWTH SUPPORTED BY A NEW WAVE OF SIGNIFICANT PROJECTS Start-up 2018 2019 2020 2021 +20% PVDF Kynar® production 90kt acrylic acid reactor at Doubling of thiochemicals capacities at Calvert City (US) Clear Lake (US) capacities in Malaysia Markets Markets +50% global PA11 monomer Markets New
Slide 11: Corporate social responsibility at the heart of our strategy
CORPORATE SOCIAL RESPONSIBILITY AT THE HEART OF OUR STRATEGY OCCUPATIONAL GREENHOUSE GAS VOLATILE ORGANIC CHEMICAL OXYGEN NET ENERGY Safety SAFETY (TRIR) Environment EMISSIONS COMPOUND DEMAND PURCHASED A RESPONSIBLE Be a top quartile Reduce the safety performer 2025 <1.2 environmental 2025 -50% -33%
Slide 12: Full Year 2017 Results
INNOVATIVE “@& CHEMISTRY
Slide 13: FY'17 results key take-aways
FY’17 RESULTS KEY TAKE-AWAYS +10.5% up YoY €8,326 m sales +8.9% at constant scope and FX +17% up on 2016 good performance €1,391 m EBITDA Driven by all 3 business divisions 15.8% in 2016 16.7% EBITDA margin Despite a context of higher raw material costs and stronger euro vs the US dollar With the US
Slide 14: Delivering an excellent 2017 performance
DELIVERING AN EXCELLENT 2017 PERFORMANCE EBITDA EBITDA MARGIN FREE CASH FLOW* NET DEBT In €m In % In €m In €m +17.0% +90 bp 41% 24% of EBITDA GEARING 1,391 16.7 565 1,482 15.8 1,189 426 1,056 2016 2017 2016 2017 2016 2017 31/12/16 31/12/2017 * Cash flow from operations and investments excluding the
Slide 15: 2017 highlights
2017 HIGHLIGHTS Adhesives Adhesives Acquisition of Integration of Den Braven XL Brands Divestment Oxo-alcohol business Adhesives New industrial adhesives plant in Gujarat Advanced materials +25% PVDF capacity Adhesives increase Acquisition of CMP assets Advanced materials Ramp-up of new specialty mo
Slide 16: 2017 key figures
2017 KEY FIGURES In €m (except EPS) 2016 2017 CHANGE Sales 7,535 8,326 +10.5% EBITDA 1,189 1,391 +17.0% EBITDA margin 15.8% 16.7% Recurring operating income (REBIT) 734 942 +28.3% REBIT margin 9.7% 11.3% Adjusted net income 418 592 +41.6% Net income – Group share 427 576 +34.9% Adjusted EPS (in euro
Slide 17: 2017 sales bridge
2017 SALES BRIDGE SALES In €m Scope Volumes Price of business Currency +2.4% +6.5% +3.3% (1.7)% +4.4% in High Price increases to Integration of Mainly Performance pass through Den Braven strengthening of Materials driven by higher raw and CMP the euro against Asia, innovation material costs in US do
Slide 18: High Performance Materials (46% of group sales)
HIGH PERFORMANCE MATERIALS (46% OF GROUP SALES) 2017 KEY FIGURES 2017 SALES DEVELOPMENT 2017 SALES BY BUSINESS LINE In €m 2016 2017 Change Volumes +4.4% Sales 3,422 3,830 +11.9% 26% 23% Bostik Prices +1.5% EBITDA 570 632 +10.9% Performance Additives EBITDA margin 16.7% 16.5% Currency (2.1)% REBIT 41
Slide 19: Industrial Specialties (31% of group sales)
INDUSTRIAL SPECIALTIES (31% OF GROUP SALES) 2017 KEY FIGURES 2017 SALES DEVELOPMENT 2017 SALES BY BUSINESS LINE In €m 2016 2017 Change Volumes +1.7% 12% PMMA Sales 2,316 2,545 +9.9% Prices +9.6% 33% Thiochemicals EBITDA 473 585 +23.7% 28% EBITDA margin 20.4% 23.0% Currency (1.4)% Fluorogases REBIT 3
Slide 20: Coating Solutions (23% of group sales)
COATING SOLUTIONS (23% OF GROUP SALES) 2017 KEY FIGURES 2017 SALES DEVELOPMENT 2017 SALES BY BUSINESS LINE In €m 2016 2017 Change Volumes (0.4)% Sales 1,771 1,924 +8.6% Prices +12.1% Coating Resins EBITDA 208 244 +17.3% 42% and Additives 58% EBITDA margin 11.7% 12.7% Currency (1.5)% Acrylics REBIT 8
Slide 21: Superior cash generation
SUPERIOR CASH GENERATION In €m 2016 2017 EBITDA 1,189 1,391 Change in working capital (1) 2 (48) 13.1% working capital to sales ratio versus 14.5% (excluding Den Braven) in 2016 Change in fixed assets payables (1) 14 2 Excluding exceptional items, tax rate at 26% of REBIT (29% in 2016) Taxes (206) (
Slide 22: Net debt
NET DEBT NET DEBT in €m – excluding €700 m hybrid bond Refinancing in 2017 1,482 ● €500 m bond at 4% / year redeemed in October 2017 1,379 ● €900 m bond at 1.5% / year issued in 2Q’17 ⇒ Positive impact on FY’18 cost of debt: ~€(12) m versus 1,056 2017 Including 50% of the €700 m hybrid bond (same as
Slide 23: 4Q'17 results: a very strong end to the year
4Q’17 RESULTS: A VERY STRONG END TO THE YEAR +5.7% up YoY €1,957 m sales +6.7% at constant scope and FX +16.5% up YoY (€243 m in 4Q’16) €283 m EBITDA Driven by all 3 business divisions, especially High Performance Materials and Industrial Specialties 13.1% in 4Q’16 14.5% EBITDA margin Despite a cont
Slide 24: 4Q'17 performance by division
4Q’17 PERFORMANCE BY DIVISION HIGH PERFORMANCE MATERIALS INDUSTRIAL SPECIALTIES COATING SOLUTIONS IN €M 4Q’16 4Q’17 Variation IN €M 4Q’16 4Q’17 Variation IN €M 4Q’16 4Q’17 Variation Sales 839 909 +8.3% Sales 568 606 +6.7% Sales 440 437 (0.7)% EBITDA 116 131 +12.9% EBITDA 87 120 +37.9% EBITDA 41 44 +
Slide 25: 2018 outlook
2018 OUTLOOK External environment ● Well-oriented demand in all three main regions ● Marked strengthening of the euro versus the US dollar* ● Higher and volatile raw material costs Arkema will benefit from its numerous developments in its High Performance Materials division and from an environment e
Slide 26: 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. Such statements are based on management’s current views and assumptions that could ultimately prove inaccurate