Arkema Sa · EURONEXT:AKE
Arkema Sa — Société Générale European Mid & Small Caps Conference 2010
29 slides from Arkema Sa's conference presentation, May 28, 2010
Slide 1: Société Générale European Mid & Small Caps Conference
Société Générale European Mid & Small Caps Conference Sophie Fouillat VP Investor Relations Nice, May 28th, 2010
Slide 2: 2005-2009: A reshaped Arkema
2005-2009 A reshaped Arkema
Slide 3: Fixed cost savings
Fixed cost savings Cumulated gross fixed cost savings since 2005 (in €m) Spin Spin off off target target €500m €500m in in 2010 2010 508 337 Headcount 18,377 230 120 -25% 13,803 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 3
Slide 4: Working capital
Working capital Working capital 23.6% as % of sales Spin Spin off off target target 18% 18% end end 2010 2010 16.2% 2005 2009 4
Slide 5: Gearing
Gearing Net debt as % 31%* Spin Spin off off target target of shareholders’ equity below below 40% 40% 19% 2005 2009 5 * Net debt computed as 12/31/2005 proforma net debt after €532m capital increase + €580m NR pre spin-off items
Slide 6: Portfolio management
Portfolio management Main acquisitions €550m* Spin Spin off off targets targets Acquisitions: Acquisitions: €500m €500m to to €800m €800m sales sales Divestments: Divestments: €300m €300m to to €400m €400m sales sales ● Acrylic assets from Dow ● Coatex ● Organic peroxides from Geo Main divestments €
Slide 7: Better positioned on growing regions & products
Better positioned on growing regions & products Asia Innovation €130m capex spent since spin off Focus on sustainable development and high performance polymers Bio-based Range for photovoltaic polymers Spin Spin off off target target % of total sales 20% 20% of sales in of sales in 2012 2012 achieve
Slide 8: 2010: Well prepared and positioned
2010 Well prepared and positioned
Slide 9: 1Q'10: Strong rebound in volumes and profitability
1Q’10 : Strong rebound in volumes and profitability 1Q’10 achievements ● +20% volumes* versus 1Q’09 • Excellent growth in Asia EBITDA (€m) • Signs of recovery in North America +137 ● €137m EBITDA x2.4 versus 1Q’09 and above 4Q’09 57 ● 10.5% EBITDA margin versus 5.2% in 1Q’09 • Strong performance of
Slide 10: 1Q'10 highlights
1Q’10 highlights ● Successful integration at the end of January of the acrylic assets acquired from Dow • Emulsion Systems Business Unit created • Comprehensive product offering for the Coating market : • Emulsion Systems – Coatex - Kynar® • Positive net income already in 1Q’10* ● Gradual improvemen
Slide 11: 1Q'10 key figures
1Q’10 key figures in €m (except EPS) 1Q’09 1Q’10 Variation Sales 1,092 1,308 +19.8% EBITDA 57 137 x2.4 EBITDA margin 5.2% 10.5% EBITDA (€m) Recurring operating income (12) 67 - 159 134 137 Net income (group share) (35) 40 - 112 57 Adjusted EPS (diluted) (0.50) 0.68 - 1Q’06 1Q’07 1Q’08 1Q’09 1Q’10 11
Slide 12: +20% sales versus 1Q'09
+20% sales versus 1Q’09 Sales in €m FX rate - Scope of translation business Volume Price effect +19.6% (4.0)% (1.7)% +5.9% Mainly impact Mainly acrylic of caustic assets • Demand recovery in soda prices purchased divided by 2 from The Dow several end-markets 1,308 Chemical • Strong demand 1,092 Comp
Slide 13: Significant EBITDA growth
Significant EBITDA growth ● x2.4 versus 1Q’09 ● Strong recovery in volumes • Good demand in several end-markets notably automotive and electronics • Sharp increase in demand for high performance polymers especially in Asia • Volumes still lower than before the crisis (construction in Europe still we
Slide 14: Cash flow and net debt
Cash flow and net debt Working capital / sales * (%) ● +€22m cash flow from operating activities 23.0% • On higher EBITDA • And despite -€68m working capital outflow on stronger 16.2% 15.6% activity and usual seasonality ● Continued focus on working capital optimization in line with FY target of wor
Slide 15: Vinyl Products: some improvements in overall adverse market conditions
Vinyl Products : some improvements in overall adverse market conditions Sales (€m) EBITDA (€m) and EBITDA margin (%) 7.5% 4.3% 374 389 257 271 28 17 2 1Q’10 1Q’07 1Q’08 1Q’09 1Q’10 1Q’07 1Q’08 1Q’09 (8) ● Traditional seasonality of the first quarter ● Adverse weather conditions at the beginning of t
Slide 16: Industrial Chemicals: continue to grow stronger
Industrial Chemicals: continue to grow stronger Sales (€m) EBITDA (€m) and EBITDA margin (%) 13.9% 14.3% 14.5% 10.2% 650 675 661 94 96 509 66 73 1Q’09 1Q’10 1Q’07 1Q’08 1Q’09 1Q’10 1Q’07 1Q’08 ● 14.5% EBITDA margin and +32% EBITDA versus 1Q’09 ● +17.5% volumes vs 1Q’09 ● Good momentum in Asia and be
Slide 17: Performance Products: back to pre-crisis EBITDA level
Performance Products : back to pre-crisis EBITDA level Sales (€m) EBITDA (€m) and EBITDA margin (%) 13.6% 14.5% 11.7% 5.3% 463 427 372 323 58 54 54 17 1Q’07 1Q’08 1Q’09 1Q’10 1Q’07 1Q’08 1Q’09 1Q’10 ● Record EBITDA margin since spin off at 14.5% despite volumes still below pre-crisis level, and EBIT
Slide 18: Our priorities for 2010
Our priorities for 2010 ● Maintain focus on costs and cash • €90m fixed cost savings versus 2009 • Recurring capex below €300m • Working capital at ~16% of sales ● Integrate newly acquired acrylic assets from Dow ● Grow in Asia and in “green” markets • Leverage new manufacturing assets in China • Ac
Slide 19: 2010 outlook
2010 outlook ● 2Q’10 outlook • 1Q’10 market conditions expected to continue in 2Q’10 • Stronger seasonality in Coatings, Fluorochemicals and Specialty Chemicals • Tightness in acrylic monomers expected to continue in 2Q’10 • 2Q’10 EBITDA will be above 1Q’10 level ● 2010 outlook • Confidence in Arkem
Slide 20: 2010-2014: A new roadmap
2010-2014 A new roadmap
Slide 21: Leverage on newly acquired acrylic assets
Leverage on newly acquired acrylic assets #2 in US acrylic acid ● Attractive asset deal • US$ 450m sales in 2009 • US$ 50m enterprise value • Acquisition in low-cycle conditions ● Perfect fit with Arkema’s strategy in Acrylics Dow Arkema BASF StoHaas • Build a strong position in the US in monomers (
Slide 22: Ambition for Acrylics
Ambition for Acrylics Strategy Key initiatives ● In Europe ● Develop world-scale competitive • Optimization plan in Carling (Fr) monomer production sites • New 50 kt/yr 2EHA production unit • Continue to optimize in Europe in Carling (Fr) in 1Q’10 • Strengthen presence ● In the Americas in the Ameri
Slide 23: Industrial Chemicals' performance since 2005
Industrial Chemicals’ performance since 2005 EBITDA margin (monomers Acrylics = Acrylics BU + Coatex + polymers) Peak Integration Strong 20% of Coatex upside potential from monomer 20% Industrial Chemicals 10% Low cycle 2005 2006 2007 2008 2009 14.5% 15% 13.2% Industrial Chemicals w/o Acrylics* 10%
Slide 24: Enhanced portfolio
Enhanced portfolio 2005 2009 5-year proforma* target Strategy Contributors Focus on 14% Cost and partnerships competitive assets Vinyl 21% Products 24% Emergence of a global New acrylic assets 20% integrated player acquired from Dow Acrylics & Coatex 17% 4 first-class Industrial growth platforms 42%
Slide 25: Balanced geographic position
Balanced geographic position Sales by region 2005 2009 proforma* 5-year target 5% 4% 5% 13% 17% 22% 57% 50% 41% 25% 29% 32% Europe North America Asia RoW 25 * Including the acrylic assets acquired from Dow
Slide 26: Fuelling the innovation pipeline
Fuelling the innovation pipeline ● Keep strong momentum on • Solutions for sustainable development Outlook for rechargeable battery • High performance polymers market worldwide (in mUS$) ● 6 priorities 25,000 • Bio-resourced materials 20,000 • New energies: • Photovoltaic: +20% avg. growth / year 15
Slide 27: Reinforce presence in Asia
Reinforce presence in Asia ● Successfully achieve current projects in China • Partnership with Daikin in fluorogases: HFC-125 HFC-125 & new generation blends Kynar® • Construction of Kynar® (fluoropolymers) and Coatex Coatex (acrylic polymers) production plants 2010 2011 2012 ● Longer-term thoughts
Slide 28: 5-year (2014) mid-cycle targets
5-year (2014) mid-cycle targets 5 year (2014) EBITDA margin mid-cycle target* Performance Products 15% Industrial Chemicals w/o Acrylics 17% Acrylics 14 to 15% Vinyls 8 to 9% Corporate (1)% Arkema >13.5% 28 * Normalized environment
Slide 29: 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
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