Arkema Sa · EURONEXT:AKE
Arkema Sa — Exane BNP Paribas 15th European CEO Seminar 2013
32 slides from Arkema Sa's conference presentation, Jun 14, 2013
Slide 1: Exane BNP Paribas 15th European CEO Seminar
ARKEMA Exane BNP Paribas 15th European CEO Seminar Paris – 14th June, 2013 Thierry Le Hénaff Chairman and CEO
Slide 2: Arkema 2012 profile
Arkema 2012 profile Sales by segment Sales of €6.4 bn High Coating 33% 34% Solutions Performance EBITDA of €996 m Materials 33% Industry-leading margin at 15.6% Industrial Specialties 13,925 employees in 40 countries Sales by region Capex of €438 m R&D at 2.3% of sales Europe 40% 34% North America S
Slide 3: 3 specialty segments
3 specialty segments High Performance Materials Coating Solutions Sales by segment World of high value and Solutions for decorative paints, innovative solutions industrial coatings and high-growth acrylic applications 33 % 34 % 33 % Industrial Specialties Global and integrated industrial niches 3
Slide 4: Performance by new reporting segment
Performance by new reporting segment High Performance Materials Industrial Specialties Coating Solutions 2,101 2,114 2,096 2,175 1,952 1,955 1,814 Sales (€m) 1,680 1,216 2010 2011 2012 2010 2011 2012 2010 2011 2012 EBITDA margin (%) 15.3 17.3 17.2 18.2 20.9 19.0 17.5 15.7 12.8 441 361 399 337 355 EB
Slide 5: Sales breakdown by business
Sales breakdown by business Organic Peroxides Acrylic monomers High Coating Filtration 9% 13% Solutions Performance and adsorption Materials 6% 34% 33% Coating Resins 13% Technical Polymers 2012 sales 18% €6.4bn Sartomer (UV curing resins) 5% Coatex (rheological additives) Hydrogen Peroxide 3% 4% Th
Slide 6: Among top players on 90% of our sales
Among top players on 90% of our sales POSITION MARKET SIZE (mT) MAIN PLAYERS % GROUP SALES • Evonik #1 Specialty polyamides • Ems 0.2 14% #1 PVDF • Solvay • Akzo Nobel #2 Organic peroxides 0.2 • United Initiators 9% #1 Thiochemicals 0.7 • Chevron Phillips 9% • Dupont #1/2 Fluorogases 1.6 • Honeywell
Slide 7: Diversified end markets
Diversified end markets Others 8% 22% Consumer goods Health, hygiene and beauty, Wellness, Sports and leisure, Packaging, Textile, etc. 16% Chemicals, plastics Water 3% Electronics 3% 13% Nutrition 4% Industrial coatings 6% Construction 12% 6% Decorative paints Energy 7% 6% in North America 5% in Eu
Slide 8: Balanced geographical reach
Balanced geographical reach RoW 5% 7% 12% Asia 21% 18% 23% North America 34% 17% 38% Europe 40% 48% 37% Arkema European panel* American panel** * Akzo Nobel, BASF, Clariant, Lanxess, Solvay 8 ** Dow, Celanese, Chemtura
Slide 9: Solid balance sheet and financing
Solid balance sheet and financing Shareholders’ equity € 2.3 bn Rating Net debt € 900 m Standards & Poor’s BBB Stable outlook Gearing 39 % Moody’s Baa2 Stable outlook Net debt / EBITDA 0.9x Figures at 31st December 2012 €1.9bn financing resources (€m) Average maturity > 4 years (€m) 700 500 480 Cred
Slide 10: Dividend increase reflects strong confidence in Arkema's potential
Dividend increase reflects strong confidence in Arkema’s potential Dividend (€/share) 1.80 1.3 Payout: 25% of adjusted net income 1.0 2.3% dividend yield 0.75 (based on share price at year end) 0.6 0.6 Arkema confirms its target to reach a 30% payout ratio on adjusted net income 2007 2008 2009 2010
Slide 11: 1st quarter 2013 financial results
1st quarter 2013 financial results
Slide 12: A solid start of the year
A solid start of the year Sales (€m) EBITDA (€m) 1,623 1,563 253 234 Volumes -1% YoY 3rd best performance in a 1st quarter Positive YoY price effect (+0.4%) Well above 4Q’12 EBITDA (€171 m) 1Q’12 1Q’13 1Q’12 1Q’13 EBITDA (€m) and EBITDA margin (%) by segment 19.1% 15.6% 18.2% 19.3% 13.2% 13.7% Tempo
Slide 13: Key drivers of Arkema 1Q'13 performance
Key drivers of Arkema 1Q’13 performance Contrasted market conditions ● Positive momentum continuing in North America ● Challenging macro in Europe in the continuity of end 2012 ● Lower than expected growth in Asia ● High Performance Materials impacted by weakness in photovoltaic and delays in oil an
Slide 14: Sales bridge
Sales bridge Sales (€m) Scope of FX rate – Volume Price business translation effect 1,623 (1.3)% +0.4% (2.1)% (0.7)% 1,563 ● Volume up YoY ● Mainly tin in Coating stabilizers Solutions and divestment Industrial Specialties ● High Performance Materials impacted by low demand in certain end markets vs
Slide 15: Performance by segment
Performance by segment Sales (€m) EBITDA (€m) EBITDA margin (%) As announced, slow start of the year with High Performance Materials 19.1% 15.6% temporary low demand in specific end-markets (photovoltaic, delays in new oil and gas projects) 534 448 102 EBITDA margin at 15.6% 70 Still very confident
Slide 16: Outlook
Outlook Market conditions expected to remain contrasted in 2013 ● Solid environment in North America ● Continuing challenging environment in Europe ● Slower than expected growth in Asia but some signs of improvement 2Q’13 assumptions ● Industrial Specialties and Coating Solutions should remain well-
Slide 17: 2013 priorities
2013 priorities Finalize $110m investment plan in acrylics in the US Acrylic monomers in US ● Start-up of 60kt acrylic acid expansion (2Q’13). Half of capacity for methyl acrylate production ● Start-up of 45kt methyl acrylate unit (2H’13) Maintain pace of development in China ● Start-up of Hipro cap
Slide 18: On track to 2016 targets
On track to 2016 targets INNOVATIVE S@& CHEMISTRY
Slide 19: Confident to deliver our long-term targets
Confident to deliver our long-term targets € 8bn sales and 16% EBITDA margin in 2016 Gearing to be maintained below 40% Portfolio increasingly focused on specialties Very balanced geographic presence Sales by segment (2016e) Sales by region (2016e) High Coating North Performance 38% 32% Solutions Eu
Slide 20: Differentiated approach to manage our portfolio
Differentiated approach to manage our portfolio HIGH GROWTH VALUE “BUILDING BLOCK” • Specialty polyamides High ● • Fluoropolymers ● Performance • Filtration and Adsorption ● Materials • Organic peroxides ● • Acrylics ● Coating • Coating resins ● Solutions • Coatex ● Secure competitive supply • UV cu
Slide 21: Organic growth and acquisitions to support EBITDA growth
Organic growth and acquisitions to support EBITDA growth EBITDA (€m) Organic growth +144 Cost Inflation on Acquisitions Growth savings fixed costs projects and disposals 1,280 Others +140 996 ● Small to mid-size acquisitions ● Innovation ● High ● Geographical Performance expansion Materials and acry
Slide 22: Accelerate expansion in High Performance Materials
Accelerate expansion in High Performance Materials Polymers pyramid Sales by segment Arkema well positioned on high end € 8 bn PEKK (under technical development) € 6.4 bn PVDF 38% + €0.9 bn Polyamide 11 Polyamide 10 Polyamide 12 High Performance Materials 33% PMMA composite PMMA Industrial 30% Speci
Slide 23: Development in high growth countries
Development in high growth countries Sales by region (€bn) € 8 bn Europe North America Asia and RoW € 6.4 bn 2.5 2.8 30% 2.8 2.4 Asia 2.2 1.7 26% and RoW 35% North America 34% 2012 2016e 2012 2016e 2012 2016e Europe 40% 35% 2012 2016e 23
Slide 24: Contribution of organic growth projects to EBITDA
Contribution of organic growth projects to EBITDA 2EHA Acrylic US AA expansion MA PVDF expansion (+50% - China) HFC125 expansion (+30% - China) Hipro expansion (x3 - China) Coating resins (new - China) Thiochemicals (new platform - Malaysia) 2012 2013 2014 2015 2016 Cumulated contribution to EBITDA
Slide 25: A rich pipeline of R&D projects
A rich pipeline of R&D projects Today Short-medium term Longer term PVDF for Electrolytes for Li-sulfur batteries Li-ion batteries Li-ion batteries (Oxis) New energies PVDF film for LGWP Thin layer solar pannel Fluorogases photovoltaic Metathesis process Renewable PMMA RNew® PA11/ PA10 Acrylic acid
Slide 26: High Performance Materials roadmap to 2016
High Performance Materials roadmap to 2016 2016 ambition ● 38% of Group sales World of high value and ● 18% EBITDA margin innovative solutions Strategic drivers ● Leverage megatrends through innovation in lightweight ● Specialty polyamides materials, new energies and renewable raw materials ● Fluoro
Slide 27: Industrial Specialties roadmap to 2016
Industrial Specialties roadmap to 2016 2016 ambition Global and integrated ● 30% of Group sales industrial niches ● 17% EBITDA margin ● Thiochemicals Strategic drivers ● Fluorogases ● Reinforce global industrial footprint ● PMMA ● Secure strategic supplies ● Hydrogen peroxide ● Expand in higher grow
Slide 28: Coating Solutions roadmap to 2016
Coating Solutions roadmap to 2016 2016 ambition Solutions for decorative paints, industrial coatings and ● 32% of Group sales high-growth acrylic applications ● 15% EBITDA margin Strategic drivers ● Acrylic monomers ● Coating resins ● Increase downstream integration Down- ● UV-curing (Sartomer) stre
Slide 29: Cash allocation over 2013 - 2016
Cash allocation over 2013 - 2016 €3.6 bn cash resources available Cumulative Capex cash flow Borrowing capacity €1.7 bn from operating activities M&A, dividends and others €1.9 bn M&A M&A Dividends Dividends Others 29
Slide 30: Conclusion: Clear roadmap to achieve 2016 ambition
Conclusion Solid Q1’13 performance in a volatile and challenging macro-environment High quality portfolio of profitable niche chemical businesses Dividend policy reflects confidence in our mid-term outlook High density of organic growth projects supporting targeted growth strategy Confident for 2013
Slide 31: 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
Slide 32: Exane BNP Paribas – 15th European CEO Seminar
ARKEMA Exane BNP Paribas – 15th European CEO Seminar Paris – 14th June, 2013
Arkema — Exane BNP Paribas 15th European CEO Seminar 2013 on 6ix