Slide 1: 2011 full year results
2011 full year results Thierry Le Hénaff Chairman and CEO
Slide 2: Principles applied for FY'11 and 4Q' consolidated accounts
Principles applied for FY’11 and 4Q’ consolidated accounts Consolidated statements were prepared in accordance with IFRS 5 rules following the announcement on November 23rd, 2011 of a project to divest Vinyls*. Income statement Balance sheet Cash flow statement excludes Vinyls excludes Vinyls includ
Slide 3: Full year 2011 overview
Full year 2011 overview* * In application of IFRS 5 rules, Vinyls activities subject to a divestment project are accounted as discontinued operations
Slide 4: Full year 2011 highlights
Full year 2011 highlights Arkema delivers record full year earnings with 28% EBITDA growth • € 1,034m EBITDA continuing operations fully in line with guidance € 1,010m EBITDA including Vinyls • Globally favorable market conditions • Strong benefits from expansions in China and growth from innovation
Slide 5: Record EBITDA above €1 bn
Record EBITDA above € 1 bn Sales (€m) EBITDA (€m) & EBITDA margin (%) +21% 5,900 17.5% +28% 1,034 16.6% 4,869 809 2010 2011 2010 2011 Free cash flow* (€m) Adjusted EPS (€) of continuing operations diluted +18% +31% 377 9.21 320 7.05 2010 2011 2010 2011 * Free cash flow = cash flow including non-recu
Slide 6: A year of major portfolio change
A year of major portfolio change FY’11 proforma sales (€m) Acquisitions Divestments ~€1bn ~€1bn Total Specialty Resins Project to divest Vinyls activities* 2010 • €848m sales • €1,090m sales sales • July 1st, 2011 • Closing expected mid-2012 Alcoxylates from Seppic • €53m sales • December 31st, 2011
Slide 7: Share price since spin off multiplied by 2.5
Share price since spin off multiplied by 2.5 80 Arkema +150% 70 60 BASF +106% Lanxess +84% 50 40 30 Solvay +1% 27.5 SBF120 -26% 20 Clariant -33% 10 0 2006/05/18 2007/05/18 2008/05/18 2009/05/18 2010/05/18 2011/05/18 2012/02/29 7 - ARKEMA / Results
Slide 8: Full year 2011 major projects
Full year 2011 major projects
Slide 9: Acquisition of Total specialty resins
Acquisition of Total specialty resins Highlights Closing on July 1st, 2011 and successful integration +€ 408m net sales in 2H’11 Our ambition: build a global leader in specialty coating materials Benefit from upstream acrylic acid Main developments A unique comprehensive offer combining Arkema coati
Slide 10: Acquisition of Specialty Chemicals from SEPPIC
Acquisition of Specialty Chemicals from SEPPIC Highlights Closing on December 31st, 2011 € 53m sales in 2011 World class industrial site in Antwerp (Belgium) Strong growth potential (+5% / year) Excellent profitability (similar to Arkema level) Expected developments Complementary products for Specia
Slide 11: Acquisition of Hipro Polymers and Casda Biomaterials (China)
Acquisition of Hipro Polymers and Casda Biomaterials (China) Electronics Automotive Sebacic acid Polyamide 10 Oil & gas Castor oil Renewable resource Photovoltaic Anti corrosion Plasticizers additives Highlights Perfect fit with our strategy $ 230m sales (2011 proforma) Asia 750 employees, 2 plants
Slide 12: A global manufacturing footprint in specialty polyamides
A global manufacturing footprint in specialty polyamides Serquigny (Cerdato) Birdsboro Kyoto Hengshui Changshu Mont Marseille Zhangjiagang R&D centers Polyamide 11 Monomer : amino 11 for polyamides Polyamide 12 Monomer : lactame 12 Polyamide 10 (Hipro) Monomer : sebacic acid (Casda) 12 - ARKEMA / Re
Slide 13: Arkema, a worldwide leader in specialty polyamides
Arkema, a worldwide leader in specialty polyamides Commodities Specialties Growing markets: +5% / year Price (€/kg) 15 100 kT 10 Flexible pipes Metal Electronic Photovoltaic PA10, PA11, PA12 for oil & gas panels replacement frames extraction in automotive 5 2,500 2,500 kT kT Unique range of PA 10, 1
Slide 14: Update on Vinyls divestment project
Update on Vinyls divestment project Project to sell the Vinyl Products segment to Klesch Group • Project announced on November 23rd, 2011 • #3 European PVC player behind Ineos and SolVin • 2,630 employees • € 1,090m sales Closing expected mid 2012 subject to: • Ongoing information / consultation of
Slide 15: Impact of Vinyls divestment project
Impact of Vinyls divestment project 2011 incl. 2011 discontinued Transaction continuing P&L (€m) operations impact operations Sales 6,990 1,090 5,900 EBITDA 1,010 (24) 1,034 D&A (314) (42) (272) Rec. operating income 696 (66) 762 Net income – Group share (19) (587) 568 € (505) m non-recurring expens
Slide 16: Two new product lines for Changshu (China)
Two new product lines for Changshu (China) PVDF Kynar® Coatex Started in March 2011 Started in August 2011 Traditional markets: coatings, Rheological additives for coatings, oil & gas, chemical process industry paper, high performance concrete New markets: photovoltaic, li-ion batteries, water filtr
Slide 17: Four new projects announced in 2011 in Asia
Four new projects announced in 2011 in Asia PVDF Kynar® Fluorogas HFC-125 +30% capacity increase +50% capacity increase (late 2012) (fall 2012) Changshu (China) Thiochemicals R&D Kerteh First thiochemical (Malaysia) First technical center platform in Asia (late 2013) in China (late 2012) 17 - ARKEMA
Slide 18: Full year 2011 financials
Full year 2011 financials* * In application of IFRS 5 rules, Vinyls activities subject to a divestment project are accounted as discontinued operations
Slide 19: Key figures
Key figures in €m (except EPS) 2010 2011 Variation Sales 4,869 5,900 +21% EBITDA 809 1,034 +28% EBITDA margin 16.6% 17.5% Recurring operating income 562 762 +36% Adjusted net income (continuing operations) 431 574 +33% Net income (discontinued operations) (78) (587) n.m. Net income (Group share) 347
Slide 20: +21% sales year-on-year
+21% sales year-on-year Scope of FX rate - Sales (€m) Price Volumes business translation effect +9% -2% +14% 0% +4% in 5,900 1.0 Performance Specialty Resins 4,869 Significant Products price increases on higher -2% in Industrial raw materials Chemicals on destocking at year end 2010 2011 +6% / yr av
Slide 21: Sales breakdown
Sales breakdown Performance Products Specialty Functional Additives Chemicals Acrylics 6% 10% Coatings Technical polymers 16% (PA, PVDF) 17% 3% Coatex 2011 sales 5% €5.9bn 9% Coating H2O2 resins 3% 11% 11% Sartomer 9% Fluoro- chemicals PMMA Industrials Thiochemicals Industrial specialties Chemicals
Slide 22: Industrial Chemicals strong growth and high profitability
Industrial Chemicals strong growth and high profitability Sales (€m) +24% +24% sales at € 3.9 bn • Price increases offset high raw material costs 3,928 • + € 408 m sales from newly acquired Specialty Resins 3,171 • Strong volumes in 1H followed by more traditional pattern and customer destocking in
Slide 23: Performance Products successful turnaround driven by innovation and Asia
Performance Products successful turnaround driven by innovation and Asia Sales (€m) +16% Excellent performance now best-in-class 1,952 +4% volumes (organic growth) confirming strong positions 1,680 on fast-growing markets • New PVDF Kynar® unit in Changshu (China) in March to meet growing demand for
Slide 24: Higher profitability and greater resilience
Higher profitability and greater resilience 17.5% 16.6% Continuing activities EBITDA* (€m) and EBITDA margin (%) 11.6% 1,034 10.1% 9.9% 809 8.7% Worldwide crisis 484 428 373 341 2006 2007 2008 2009 2010 2011 Net debt unchanged at ~ € 600 m * From 2006 to 2009, figures exclude results of the whole Vi
Slide 25: 3/4 of EBITDA growth comes from structural strengthening
3/4 of EBITDA growth comes from structural strengthening Continuing activities EBITDA (€m) Environment Others M&A 1,034 Growth Fixed Acquisitions costs • Coatex • Acrylic assets (ex-Dow) • Resins • Asia (ex-Total) • Innovation 373 All Divestments businesses • Cerexagri • UF resins 2006 2011 25 - ARK
Slide 26: Contribution of product lines to EBITDA growth
Contribution of product lines to EBITDA growth Continuing activities (excluding corporate) 2011 vs 2010 : +€240m 2011 vs 2006 : +€648m M&A M&A Performance Performance Products 12% Products 15% 33% Acrylics 29% Acrylics 19% 16% 36% 40% Industrial Chemicals Industrial Chemicals w/o Acrylics w/o Acryli
Slide 27: Successful turnaround across all businesses
Successful turnaround across all businesses EBITDA margin (%) Industrial Specialties Performance Products Coatings (% stable at constant scope of business) Worldwide crisis Coatings: Acrylics, Coatex, Sartomer, Coating Resins Industrial Specialties: PMMA, Thiochemicals, Fluorochemicals, H2O2 Perform
Slide 28: 4Q 2011 Highlights and key figures
4Q 2011 Highlights and key figures Sales (€m) Solid performance in line with guidance despite of continuing operations significant destocking at customers • 2nd best performance in a 4th quarter +17% • Return to traditional seasonal pattern after atypical 4Q’10 1,400 +17% sales at € 1.4bn 1,197 • St
Slide 29: Working capital and capex
Working capital and capex Working capital / sales (%) Recurring capex without Vinyls (€m) 311 13.8% 350 15.0% 13.3% 243 2010 2011 2011 2010 2011 2012e at constant scope proforma* of business In line with FY’11 guidance • Including Total Resins and Seppic € 59 m capex in Vinyls not included • Without
Slide 30: Strong balance sheet maintained
Strong balance sheet maintained Maturity of financial debt (€m) 31 Dec. 31 Dec. in €m 2010 2011 Net debt 94 603 700 Shareholders’ equity 2,240 2,217 Net provisions* 702 686 500 Non-current assets** 2,379 2,693 Net working capital 785 960 300 240 Capital employed 3,164 3,653 2013 2014 2015 2016 2017
Slide 31: Dividend
Dividend Dividend (€/share) 1.3 +30% dividend to reflect strong performance of continuing 1.0 operations and balance sheet 0.75 2.4% dividend yield 0.6 0.6 (based on share price at year end) 2007 2008 2009 2010 2011* Arkema confirms its dividend policy: “Arkema intends to pay a stable to reasonably
Slide 32: Strong growth platform for the future
Strong growth platform for the future
Slide 33: Our ambition a top world specialty chemical player
Our ambition a top world specialty chemical player Accelerating growth • Innovation in sustainability • Growth in emerging countries • Bolt-on acquisitions • Operational excellence Well established growth platform • Portfolio refocused on specialties • Well balanced geographical footprint • Strong i
Slide 34: Well balanced portfolio and geographical coverage
Well balanced portfolio and geographical coverage* 2011 sales by business line* 2011 sales by region* Coatings Performance 35% Asia and Row Europe Products 33% 26% 42% € 6.5 bn € 6.5 bn Industrial 32% Chemicals Industrial North America Specialties 32% * Proforma sales including full year contributio
Slide 35: High quality portfolio
High quality portfolio Six main product lines of specialty chemicals Market positions between no1 and no3 in the world Limited number of players on small to mid-size segments Proprietary technologies and know-how Attractive development opportunities in emerging countries Portfolio well positioned to
Slide 36: Global leadership positions
Global leadership positions Chevron Mitsubishi Arkema BASF Dow Evonik EMS Dupont Solvay Honeywell Philipps Chemicals Coatings #3 PMMA #2 Thio- chemicals #1 Fluoro- chemicals #2 PVDF #1/2 Specialty Polyamides #1 36 - ARKEMA / Results
Slide 37: Well positioned on mega-trends
Well positioned on mega-trends New energies / Water Lightweight Renewable Energy efficiency management materials Coatings PMMA Thiochemicals Fluorochemicals PVDF Specialty Polyamides 37 - ARKEMA / Results
Slide 38: Strong underlying growth drivers
Strong underlying growth drivers End-markets Growth drivers Estimated growth • Paints and adhesives • Low VOC requirements Coatings • Super-absorbents • Growing and ageing population +3.5% /year • Water treatment • Access to drinkable water • Automotive • Lighter cars PMMA • Signs and displays • Inc
Slide 39: Strong underlying growth drivers
Strong underlying growth drivers End-markets Growth drivers Estimated growth • Refrigeration • New regulations in air-conditioning Fluorochemicals • Increasing standard of living +3.5% /year • Fluoropolymers • Unique polymers with outstanding growth • Industrial paints • Growth in Asia • Oil & gas •
Slide 40: Sustained innovation momentum
Sustained innovation momentum New sales from innovation New range of opaque polymers +€ 500 m (CelocorTM) for partial replacement of titanium dioxide Others in water-based coatings Water treatment High performance DMDS (Paladin®) soil fumigation agent: polymers development and distribution agreement
Slide 41: Outlook
ARKEMA The world is our inspiration
Slide 42: 2012 priorities
2012 priorities Benefits from acquisitions FY contribution of Specialty Resins Development of Seppic alcoxylates Integration of Hipro and Casda Biomaterials (China) Finalize information / consultation process in France and close project to divest Vinyls* Continue strong pace of development in Asia F
Slide 43: 2012 assumptions and outlook
2012 assumptions and outlook Macro-environment: contrasted growth expectations by region • Perceivable improvement of demand in North America • Europe to remain globally challenging especially in construction • Growth to remain well oriented in Asia, notably in China Maintain strong focus on pricing
Slide 44: Upgrade our long-term targets
Upgrade our long-term targets Current long-term target*: € 1,050 m EBITDA in 2015 New 5-year targets* (2016) set at € 8 bn sales and € 1,250 m EBITDA Growth coming half from organic developments and half from bolt-on acquisitions Gearing maintained at around 40% Very balanced portfolio 2016e sales b
Slide 45: Conclusion
Conclusion Outstanding value creation over the past five years and profitability now at best-in-class levels High quality portfolio of specialty chemicals built over years Confident for 2012 while remaining cautious about the macro-environment Strong pipeline of projects and well positioned to captu
Slide 46: 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