Slide 1: Full Year 2020 Results and Outlook
FULL YEAR 2020 RESULTS AND OUTLOOK 25 FEBRUARY 2021
Slide 2: 2020, a year of strong execution in a challenging global context
2020, A YEAR OF STRONG EXECUTION IN A CHALLENGING GLOBAL CONTEXT
Slide 3: Solid performance in 2020 and volume recovery in Q4
SOLID PERFORMANCE IN 2020 AND VOLUME RECOVERY IN Q4 Sales Q4’20 EBITDA Volume +5.2% YoY €7.9bn €1.18bn EBITDA Volume (4.3)% YoY 15% margin broadly stable YoY Adjusted FCF Net debt net income €651m €1.91bn €391m 67% cash 1.6x EBITDA 5.11 €/share conversion 1 2020 Q4’20 figures figures 1. Free cash fl
Slide 4: We managed the short term and executed the strategy
WE MANAGED THE SHORT TERM AND EXECUTED THE STRATEGY Resilience of our Promising pipeline of Specialty Materials innovation on megatrends Major steps on the High return investments transformation journey to capture future growth Commitment to sustainability Focus on operational and and improved CSR r
Slide 5: Specialty Materials were resilient in the context
SPECIALTY MATERIALS WERE RESILIENT IN THE CONTEXT Segments’ EBITDA margin evolution (%) Resilient Specialty Materials EBITDA EBITDA* (€m) 25% -39% 20% 381 Intermediates -12% 231 15% Specialty Materials 10% Bostik 1,158 acquisition 1,018 5% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2019 2020 Adhes
Slide 6: Major new steps taken on transformation journey
MAJOR NEW STEPS TAKEN ON TRANSFORMATION JOURNEY Sales split A major milestone Specialty Materials PMMA disposal to Trinseo 1 79% 82% 89% pro forma 2020* EV: €1,137m 32% 31% Other M&A operations 24% 24,5% Functional Polyolefins €8.7bn €7.9bn disposal to SK Chemical EV: €335m 24% 25,5% 21% 18% LIP, Fi
Slide 7: Commitment to sustainability reinforced
COMMITMENT TO SUSTAINABILITY REINFORCED CLIMATE AND ENVIRONMENT 1 CIRCULAR ECONOMY GHG Energy VOC COD PRAGATI Phase II of the -23% -38% -10% -20% -42% -65% -55% -60% world’s 1st sustainable castor bean program 2015 2019 2020 2030 2012 2019 2020 2030 2012 2019 2020 2030 2012 2019 2020 2030 1ST EVER G
Slide 8: Strong improvement in CSR recognition
STRONG IMPROVEMENT IN CSR RECOGNITION 2015 2019 2020 The Sustainability Yearbook 2021 42 65 79 BRONZE AWARD Based 6th in DJSI World on SAM First integration in 2020 BB A A (Climate) C B A- Top 1% Other ratings 1st decile (global) Europe120 & June 2020 Eurozone 120 indices 8 FY 2020 RESULTS AND OUTLO
Slide 9: Investments to capture sustainable growth carried on
INVESTMENTS TO CAPTURE SUSTAINABLE GROWTH CARRIED ON PVDF Polyamide 12 PVDF NEW +50% capacity +25% global capacity for batteries +35% in Changshu, CN in Changshu, CN Changshu capacity 2020 2022 €600m recurring and exceptional CAPEX in 2020 2020 2022 2020 2 major high return Industrial adhesives proj
Slide 10: Strong engagement of our teams
STRONG ENGAGEMENT OF OUR TEAMS Quick implementation of safeguard measures in the Covid environment RECORD LOW INJURY RATE To ensure safety of our employees 1.6 To enable continuity of operations 1.4 and support our customers and stakeholders 1.3 1.0 To adjust by more than €100m our operational expen
Slide 11: Dynamic cash allocation in line with CMD guidelines
DYNAMIC CASH ALLOCATION IN LINE WITH CMD GUIDELINES Dividend proposal back at pre-Covid level €2.50 per share 1 DIVIDEND (in €/share) per financial year 2 In line with Group’s ambition to progressively increase shareholder return Confidence in the development perspectives of the Group Share buybacks
Slide 12: FY 2020 Results
FY 2020 RESULTS INNOVATIVE “@& CHEMISTRY
Slide 13: Key takeaways
KEY TAKEAWAYS Sales decrease of 8.1% vs FY’19 at constant currency Back to growth in Q4’20: €7,884m sales • Sales growth of 2.1% at constant scope and currency • Significant volumes improvement (+5.2% YoY) with continued positive momentum in construction, decorative paints and batteries, as well
Slide 14: Standing our ground in an exceptional year
STANDING OUR GROUND IN AN EXCEPTIONAL YEAR Sales in €m -4.3% -4.7% -1.7% +0.9% Lower demand in Lower propylene Depreciation of US Functional Polyolefins transportation, prices in Coating dollar and certain divestment on 1 June general industry Solutions emerging currencies 2020 and oil & gas against
Slide 15: Volume growth returned in Q4 2020
VOLUME GROWTH RETURNED IN Q4 2020 Sales in €m +5.2% -3.1% -4.1% -1.3% Positive momentum +2% in Adhesive Further depreciation Functional in construction and Solutions of US dollar and Polyolefins decorative paints certain emerging divestment on Resilience in currencies against 1 June 2020 Growth in b
Slide 16: Adhesive Solutions (25.5% of 2020 group sales)
ADHESIVE SOLUTIONS (25.5% OF 2020 GROUP SALES) Q4’20 KEY FIGURES Q4’20 SALES DEVELOPMENT In €m Q4’19 Q4’20 Change Volumes +0.7% HIGHLIGHTS Sales 500 512 +2.4% Prices +2.0% ● Strong performance in Q4’20 with EBITDA 60 69 +15.0% EBITDA up 15% YoY, and EBITDA margin Currency (4.6)% up 150 bps at 13.5%,
Slide 17: Advanced Materials (32% of 2020 group sales)
ADVANCED MATERIALS (32% OF 2020 GROUP SALES) Q4’20 KEY FIGURES Q4’20 SALES DEVELOPMENT In €m Q4’19 Q4’20 Change Volumes +1.1% HIGHLIGHTS Sales 663 644 (2.9)% Prices (0.3)% ● Q4’20 performance impacted EBITDA 132 123 (6.8)% mainly by negative currency effect Currency (3.7)% EBITDA margin 19.9% 19.1%
Slide 18: Coating Solutions (24.5% of 2020 group sales)
COATING SOLUTIONS (24.5% OF 2020 GROUP SALES) Q4’20 KEY FIGURES Q4’20 SALES DEVELOPMENT In €m Q4’19 Q4’20 Change Volumes +14.5% HIGHLIGHTS Sales 477 489 +2.5% Prices (8.4)% ● Significant YoY volume increase EBITDA 58 69 +19.0% in Q4’20 (+14.5%), driven by the good Currency (4.9)% momentum in decorat
Slide 19: Intermediates (18% of 2020 group sales)
INTERMEDIATES (18% OF 2020 GROUP SALES) Q4’20 KEY FIGURES Q4’20 SALES DEVELOPMENT In €m Q4’19 Q4’20 Change Volumes +6.3% HIGHLIGHTS Sales 408 334 (18.1)% Prices (7.7)% ● Significant scope effect in Q4’20 sales EBITDA 59 42 (28.8)% (-13.3% YoY) linked to Functional Polyolefins disposal Currency (3.4)
Slide 20: Excellent cash generation
EXCELLENT CASH GENERATION RECONCILIATION OF EBITDA TO NET CASH FLOW EBITDA to cash conversion rate In €m 2019 2020 Record high at 67% EBITDA 1,457 1,182 Tax rate Current taxes (142) (121) 22% of REBIT (excl. exceptional items) Cost of debt (98) (75) Change in working capital and fixed assets Tight m
Slide 21: Financial strength fully maintained
FINANCIAL STRENGTH FULLY MAINTAINED Financing resources Net debt under control 1.6x EBITDA including 1,000 hybrid bonds 900 1.5% 700 Successful refinancing 1.5% 500 at attractive rates 400 Average maturity of 5.6 years 0.75% 2.75% 300 300 1.5% 150 0.125% 3.125% Solid investment grade 2023 2024 2025
Slide 22: Net debt evolution (including hybrid bonds)
NET DEBT EVOLUTION (INCLUDING HYBRID BONDS) In €m 2,331 1.6x EBITDA 25 3 1,910 196 140 6 (791) 2019 dividend (€168m) Hybrid coupons (€28m) Functional Polyolefins disposal (€242m) offset by bolt-on acquisitions 31/12/2019 Free cash Exceptional M&A Dividends Share FX and 31/12/2020 flow * capex buybac
Slide 23: Execution of our sustainable strategy as a key priority
EXECUTION OF OUR SUSTAINABLE STRATEGY AS A KEY PRIORITY
Slide 24: A unique combination of expertise in sustainable materials
A UNIQUE COMBINATION OF EXPERTISE IN SUSTAINABLE MATERIALS A SPECIALTY MATERIALS LEADER offering the most innovative and sustainable solutions to address our customers’ current and future challenges Specialty Materials IN 2021 Mid to high single digit organic sales growth expected in Specialty Mater
Slide 25: Sustainable innovation driving organic growth
SUSTAINABLE INNOVATION DRIVING ORGANIC GROWTH 5 R&D PLATFORMS SALES CONTRIBUTION Thanks to our sustainable innovations, we expect to generate NEW €400m new sales by 2024 and €1bn by 2030 PORTFOLIO SUSTAINABILITY ASSESSMENT Lightweight materials New energies NEW Target 65% of our sales contributing s
Slide 26: 2021 growth priorities in Adhesive Solutions
2021 GROWTH PRIORITIES IN ADHESIVE SOLUTIONS High value offering through launch of new product ranges and technology differentiation Construction Industrial adhesives DIY Wall & flooring Sealants Engineering Hygiene Films & powders New products "One floor" New PU range adhesives Purefix Born2Bond™™
Slide 27: Bostik on track to deliver its mid-term target
BOSTIK ON TRACK TO DELIVER ITS MID-TERM TARGET 16% 14% 13.1% Reach 14% EBITDA margin 12.9% in 2021 10.3% Three balanced drivers Grow high margin solutions 264 261 Strengthen operational excellence 158 Roll out acquisition strategy and implement synergies 2014 2019 2020 2021 2024 EBITDA EBITDA margin
Slide 28: 2021 growth priorities in Advanced Materials
2021 GROWTH PRIORITIES IN ADVANCED MATERIALS Develop new business through innovative and sustainable products Benefit from diversified end-markets recovery 5% General industry High growth in clean mobility 5% Specialty polyamides for fuel lines & EV/HEV cooling circuits Nutrition & Water 9% Kyna
Slide 29: Very significant potential in batteries
VERY SIGNIFICANT POTENTIAL IN BATTERIES Innovative solutions to optimize performance of Li-ion batteries Lithium-ion batteries market A leader in PVDF for Li-ion battery cells Battery pack weight reduction and heat transfer Foranext® electrolyte salts Anode - Cathode + Electric vehicles Rilsan® PA
Slide 30: High return PA11 plant in Singapore to support growth from 2022
HIGH RETURN PA11 PLANT IN SINGAPORE TO SUPPORT GROWTH FROM 2022 Polyamide 11, a unique material +50% capacity in Asia 100% bio-based, from castor oil World scale PA11 plant in Singapore (including monomer) and downstream capacities in China High performance (mechanical and heat resistance) Start-up
Slide 31: 2021 growth priorities in Coating Solutions
2021 GROWTH PRIORITIES IN COATING SOLUTIONS Capture end-market growth Further commercial excellence initiatives Focus on innovation with low-VOC, Global key account management improvements bio-based products and high value-added resins Synaqua® waterborne resins for paints Optimizing sales functio
Slide 32: Strengthened integration of the Coating Solutions segment
STRENGTHENED INTEGRATION OF THE COATING SOLUTIONS SEGMENT GROWTH Activities organized for a globally coherent approach towards markets Acrylic Coating Coating monomers Resins Additives PERFORMANCE Additives Support functions Acrylic Acid Resins organized for scale & efficiency UV Specialties Cross-B
Slide 33: Strategic review of Intermediates underway
STRATEGIC REVIEW OF INTERMEDIATES UNDERWAY Closing of PMMA disposal Review in progress in Fluorogases Proposed disposal of PMMA Focus on specialty businesses Investigate strategic alternatives business to Trinseo 1 for €1,137m for emissive applications Next step of our strategic review in Intermedia
Slide 34: Well positioned to benefit from a rebound in 2021 and beyond
WELL POSITIONED TO BENEFIT FROM A REBOUND IN 2021 AND BEYOND Start of the year marked by an increase in the level of global demand in the continuity of fourth-quarter 2020, in an uncertain environment. Q1’21 EBITDA expected to rise by around 10% YoY, including a negative currency impact of €15 milli
Slide 35: 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 continues to spread across the world, and the evolution of