Arkema Sa · EURONEXT:AKE
Arkema Sa — Investor Day (July 2017)
37 slides from Arkema Sa's investor day presentation, Jul 10, 2017
Slide 1: Arkema Capital Markets Day 2017
Slide 2: Adhesives
Adhesives Vincent Legros, Executive Vice-President Adhesives
Slide 3: We design smart adhesives for sophisticated requirements
smart adhesives for We design sophisticated requirements Transportation Construction Hygiene Packaging Bonding and sealing Sealing Bonding Resealing again and again Fire retarding Waterproofing Flexibility Food contact Lightweighting Acoustic insulation Less odor Odor free Insulation Thermal insulat
Slide 4: Adhesives and sealants, a 50 billion euro market
Adhesives and sealants, a 50 billion euro market Worldwide split by market Worldwide split by region +1.5% to 2%/year 31% 34% 41% Construction Industry 58% +4% to 5%/year 8% 28% +2.5% to 3%/year Do-It-Yourself Europe North America Asia and RoW 4 CAPITAL MARKETS DAY 10-11 JULY, 2017
Slide 5: Adhesives in industry
Adhesives in industry Durable goods Converting Hygiene Bostik product Transportation (automotive, rail, marine, Flexible Diapers aeronautics, packaging trucks) Bostik product Construction Packaging Hygiene (B to B) Tapes Electronics Tissues & Labels Bostik product 5 CAPITAL MARKETS DAY 10-11 JULY, 2
Slide 6: Adhesives and sealants in construction and Do-It-Yourself
Adhesives and sealants in construction and Do-It-Yourself Flooring Sealants Do-It-Yourself (DIY) Floor preparation Waterproofing Hard and soft flooring Tiling 6 CAPITAL MARKETS DAY 10-11 JULY, 2017
Slide 7: A market growing at 3% to 3.5% a year
A market growing at 3% to 3.5% a year Growing consumption Large potential for replacement in emerging markets Strong growth drivers Adhesives consumption per capita (in kg) Replace mechanical fastening Increasing needs for lighter materials 13% 11.5 Bonding dissimilar materials Emerging markets 8.5
Slide 8: A fragmented market with high potential for consolidation
A fragmented market with high potential for consolidation Henkel Sika More than 100 companies with sales < €100 m Bostik H.B. Fuller Other large players with sales > €100 m 8 CAPITAL MARKETS DAY 10-11 JULY, 2017
Slide 9: Bostik today
CAPITAL MARKETS DAY 2017 Bostik today
Slide 10: Successful integration and long-term potential confirmed
Successful integration and long-term potential confirmed A successful integration 2016 financial highlights Main projects achieved EV/EBITDA 2017 EBITDA target achieved €210 m EBITDA Acquisition of 11x one year ahead (+33% versus 2014) Den Braven of plan 8.3x EPS accretive after 13.1% 6 new plant on
Slide 11: Adhesives at a glance (2016)
Adhesives at a glance (2016) Strengths Sales split €1.6 bn sales (+€345 m from Den Braven) #3 worldwide 26% 5,000 employees 40% Europe (+1,000 from Den Braven) World-class technologies Asia and RoW and applicative expertise North America 34% Present in 50 countries Global reach 10.5% REBIT margin Po
Slide 12: Leading positions in a wide range of end-markets
Leading positions in a wide range of end-markets Industry Hygiene Construction Do-It-Yourself #3/#4 worldwide Among top 3 worldwide Among top 3 in key countries Among top 3 in key countries Our main markets: Our main markets: Our main markets: Our main markets: Flexible packaging Disposable hygiene
Slide 13: Significant growth potential from Bostik's technology breadth
Significant growth potential from Bostik’s technology breadth 125 years in adhesives Technology leadership Close to our customers Recognized know-how Investment in 11 applied Customer awards core technologies (elastic bonding, hot-melt PSA, polymer- technology centers modified binders, acrylic,…) in
Slide 14: Global R&D footprint at our customers' service
Global R&D footprint at our customers’ service 3 state-of-the-art smart technology centres Increased R&D efforts Sales from products < 3 years old R&D expenses as a % of sales as a % of sales 3.1% 16% Europe 2.3% Venette Den Braven France Netherlands 8% Milwaukee Shanghai United States China 2010 20
Slide 15: A dynamic innovation pipeline
A dynamic innovation pipeline BrillianceTM Kizen® Axios® Wet on Wet® Low odor adhesives Next generation cardboard Moisture and acoustic barriers Immediately paintable for hygiene adhesives for packaging in hardwood adhesives high performance sealants (high performance / easy to use) Reseal® Simson®
Slide 16: A global footprint with potential for further expansion
A global footprint with potential for further expansion Manufacturing footprint Adhesives sales split by region Number of production sites 2016 sales EMEA Asia North America 28 14 13 74% 26% South America 3 Mature markets Emerging markets 16 CAPITAL MARKETS DAY 10-11 JULY, 2017
Slide 17: Long-term ambition
CAPITAL MARKETS DAY 2017 Long-term ambition
Slide 18: Our long-term ambition (2023) for Adhesives
Our long-term ambition (2023) for Adhesives 12.5% to 13% REBIT margin More than double 3% to 4% sales versus 2016 organic sales growth 18 CAPITAL MARKETS DAY 10-11 JULY, 2017
Slide 19: Our strategic priorities to achieve our ambition
Our strategic priorities to achieve our ambition A differentiated strategy by segment leveraging key strengths Hygiene Industrial assembly Construction DIY Accelerate Participate Strengthen geographic expansion in market consolidation operational excellence 19 CAPITAL MARKETS DAY 10-11 JULY, 2017
Slide 20: More than double our sales in Adhesives
More than double our sales in Adhesives A combination of organic growth and acquisitions Organic growth Bolt-on acquisitions 3% to 4% growth Small to mid-size on average acquisitions Bolt-on acquisitions Innovation Focus areas Broaden technology range Geographic expansion Increase market share in ma
Slide 21: A differentiated strategy by segment
A differentiated strategy by segment Hygiene Industrial assembly Construction Do-It-Yourself Be the innovative leader Build on core segments to reach Build global leadership positions Leverage Bostik® global brand of the industry global leading positions in flooring and sealants and be recognized as
Slide 22: Be the innovative leader in hygiene
Be the innovative leader in hygiene Hygiene highlights Recent developments Manufacturing footprint Innovation > €1 bn market Launch of low odor BrillianceTM Greenville SC, USA France and Among top 3 worldwide Netherlands China Cairo, +6% expected annual growth Monterrey, Egypt Bangalore, Mexico Indi
Slide 23: Industrial adhesives: the example of flexible packaging
Industrial adhesives: the example of flexible packaging Flexible packaging highlights Recent developments Manufacturing footprint Innovation > €1.8 bn market Middleton, USA Ribecourt, Coating, lamination +5% expected annual growth France Changshu, and high value added China polyesters Conyers, USA B
Slide 24: Expand in high value niches
Expand in high value niches Key characteristics Examples of applications Small size businesses Faster growing markets Technology-driven Appliances Encapsulation Co-developments with customers Potential for offer globalization Insulating glass Marine Filters 24 CAPITAL MARKETS DAY 10-11 JULY, 2017
Slide 25: Expand in high value niches: example of appliances
Expand in high value niches: example of appliances Decoration or Fast growing niches Door handle emblem bonding reinforcement Higher standard of living in emerging markets Cooling coil Display bonding Replacement of mechanical fastening bonding Cabinet seam Hole sealing sealing Bostik unique value p
Slide 26: Unique combination of an adhesive formulator and a specialty chemical player
Unique combination of an adhesive formulator and a specialty chemical player Co-development Know-how combination Leverage Arkema’s geographic presence, Combine Bostik’s formulation and application know-how partnerships with leading players and market expertise with Arkema’s expertise in chemistry an
Slide 27: Build a global leadership position in flooring
Build a global leadership position in flooring Towards a full range of flooring solution systems Market > €1.7 bn # 1 # 2 in hardwood flooring in the US in soft flooring in Europe Hardwood flooring Tiling Soft flooring Adhesive Mortar Grout Acrylic adhesive Build on strong European footprint to furt
Slide 28: Build a global leadership position in sealants
Build a global leadership position in sealants Sealants highlights Recent developments Manufacturing footprint Innovation €9 bn market Wet on Wet® Acrylic-based sealants +3% to 4% expected annual growth offering possibility of painting directly Bostik unique value proposition after use Leader in hig
Slide 29: Well on track to implement Den Braven's acquisition synergies
Well on track to implement Den Braven’s acquisition synergies Implementation has started with strong mobilization of teams Set-up of a dedicated integration team Cost synergies: implementation and benefits Development synergies: implementation and benefits Closing Full benefit Full benefit of Decemb
Slide 30: Be recognized as the preferred innovative player in DIY
Be recognized as the preferred innovative player in DIY Diversified range of products Do-It-Yourself highlights Recent developments €4 bn market Among top 3 in key countries Rapid setting wood ~2.5% annual growth adhesives, 40% faster than traditional wood adhesives Bostik unique value proposition A
Slide 31: Dual strategy with global and local brands
Dual strategy with global and local brands Mosaic contest Tour de France 6 months on the Bund 2016 rugby sponsor 31 CAPITAL MARKETS DAY 10-11 JULY, 2017
Slide 32: Accelerate geographic expansion
Accelerate geographic expansion 6 new plant openings in 2015 and 2016 Double sales in emerging markets % sales in emerging markets Michigan, US 30% 2017 Sweden 26% 2016 Texas, US India 2015 2017 Mexico 2015 Philippines Mexico 2016 2017 Bangalore, India Malaysia 2015 2016 Sites opened in 2015 and 201
Slide 33: Participate in market consolidation with value accretive bolt-on acquisitions
Participate in market consolidation with value accretive bolt-on acquisitions Bolt-on acquisitions Den Braven CMP Specialty Products delivering high synergies (December 2016) (May 2017) A combination of: EV/EBITDA EV/EBITDA Purchasing synergies: 11x raw materials, goods and Total synergies services,
Slide 34: Operational excellence to further strengthen profitability
Operational excellence to further strengthen profitability Powerhouse Digitalization & automation Objective Duplicate powerhouse concept Improve in key production lines manufacturing (sealants, hygiene, packaging, tapes & labels) processes Gains of around €10m per year Deliver, on top of annual gain
Slide 35: Key take-aways
Key take-aways Organic growth platforms well identified Successful integration Improved financial performance and with Arkema ambition revised upward Highly synergetic Continue the bolt-on acquisitions operational excellence journey 35 CAPITAL MARKETS DAY 10-11 JULY, 2017
Slide 36: Glossary
Glossary Recurring operating income (REBIT): is calculated as the difference between operating income and other income and expenses. It excludes the depreciation and amortization resulting from the revaluation of tangible and intangible assets as part of the allocation of purchase price of acquired
Slide 37: 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