Arkema Sa · EURONEXT:AKE
Arkema Sa — CITI West Coast Institutional Investor Symposium 2015
31 slides from Arkema Sa's conference presentation, Mar 12, 2015
Slide 1: CITI West Coast Institutional Investor Symposium 2015
CITI West Coast Institutional Investor Symposium 2015 11-12 March 2015, San Francisco Thierry Lemonnier
Slide 2: 2014 highlights
2014 highlights Financial performance €5,952m sales 1.4% down on 2013 at constant scope of business and exchange rate €784m EBITDA versus €902m in 2013: ● Reflecting challenging market conditions in fluorogases and acrylic monomers and the high basis of comparison of 2013 in polyamide 12 ● Overall g
Slide 3: Full year 2014 Results
Full year 2014 Results INNOVATIVE “@& CHEMISTRY
Slide 4: 2014 key figures
2014 key figures In €m (except EPS) 2013 2014 variation Sales 6,098 5,952 (2.4)% EBITDA 902 784 (13.1)% EBITDA margin 14.8% 13.2% Recurring operating income 588 447 (24.0)% Adjusted net income 368 239 (35.1)% Net income (Group share) 168 167 (0.6)% Adjusted EPS* 5.67 3.62 (36.2)% * For 2013, the adj
Slide 5: Sales bridge
Sales bridge Sales (€m) Scope FX rate – Volumes Price of business translation effect 6,098 +1.0% (2.4)% (0.7)% (0.3)% 5,952 ● +2.3% excluding ● Mostly unfavorable ● Changes in impact of the closure market conditions consolidation scope* of Chauny (Fr) activity in Fluorogases effective 1Q’14 and high
Slide 6: Sales breakdown by business
Sales breakdown by business Organic Peroxides High Acrylics Coating Performance Filtration 8% Solutions and Adsorption 15% Materials (CECA) 36% 31% 10% Coating Resins Technical Polymers 2014 sales 13% 13% €6.0bn Sartomer (Photocure Resins) Hydrogen 5% Peroxide Coatex (Rheological Additives) 4% 3% PM
Slide 7: Diversified end markets
Diversified end markets Others 4% 20% Consumer goods Health, hygiene and beauty, wellness, 18% sports and leisure, packaging, textile, etc. Chemicals, plastics Electronics 3% 15% Water 4% Industrial coatings Automotive, marine, metal protection, Nutrition 5% adhesives & sealants, 3D printing, etc. 6
Slide 8: Key drivers of 2014 performance
Key drivers of 2014 performance EBITDA (€m) 902 Fluorogases Acrylics Other Polyamides business lines 784 ● Challenging ● Unit margins ● High basis ● +8.5% EBITDA market from close of comparison versus 2013 conditions to mid-cycle of 2013 in with increased early 2014 polyamide 12 ● Good positions com
Slide 9: High Performance Materials
High Performance Materials In €m 2013 2014 variation Sales 1,842 1,826 (0.9)% Volumes +2.0% EBITDA 316 284 (10.1)% Prices (2.4)% EBITDA margin 17.2% 15.6% FX (translation) (0.5)% Recurring operating income 212 175 (17.5)% Scope - % of segment 2014 sales Technical Polymers Filtration & Adsorption Org
Slide 10: Industrial Specialties
Industrial Specialties In €m 2013 2014 variation Sales 1,993 1,972 (1.1)% Volumes +3.6% EBITDA 340 300 (11.8)% Prices (3.8)% EBITDA margin 17.1% 15.2% FX (translation) (0.1)% Recurring operating income 225 172 (23.6)% Scope (0.6)% % of segment 2014 sales Thiochemicals Fluorogases PMMA H2O2 30% 29% 2
Slide 11: Coating Solutions
Coating Solutions In €m 2013 2014 variation Sales 2,224 2,131 (4.2)% Volumes (1.4)% EBITDA 292 245 (16.1)% Prices (1.2)% EBITDA margin 13.1% 11.5% FX (translation) (0.3)% Recurring operating income 199 147 (26.1)% Scope (1.2)% % of segment 2014 sales Acrylics (acid + esters) Coating Resins Coatex Sa
Slide 12: 4Q'14 highlights
4Q’14 highlights €1,431m sales, up 1.4% vs 4Q’13 ● (0.9)% volumes* compared to the high basis of comparison of 4Q’13 in certain businesses ● (0.8)% prices reflecting lower costs of some oil-based raw materials at year end ● +3.8% FX rate translation effect mainly relating to the strengthening of the
Slide 13: 4Q'14 performance by business segment
4Q’14 performance by business segment High Performance Materials In €m 4Q’13 4Q’14 variation • Filtration and Adsorption: different Sales 466 444 (4.7)% seasonality than in 2013 in the oil & gas market EBITDA 68 59 (13.2)% • Polyamide 12: high basis of comparison of 4Q’13 but stable market condition
Slide 14: 2014 cash flow
2014 cash flow In €m 2014 EBITDA 784 Working capital variation* (29) Taxes (120) Cost of debt (56) Recurring capex (346) 5.8% of sales Others (28) RECURRING CASH FLOW 205 Non-recurring items in operating Restructuring expenses + cash-out of provisions (60) and investing cash flow relating to the div
Slide 15: Working capital and capex
Working capital and capex Working capital on sales Capex (%) (€m) 16.1% 481 470 ~450 15.2% 438** 15.0% 14.9% Bostik FX impact 2011 2012 2013 2014 2012 2013 2014 2015 proforma* Guidance 16.1% ratio, mechanical outcome In 2015, significant decrease like-for-like of FX rates (sales converted ● Thiochem
Slide 16: Balance sheet
Balance sheet In €m 31 Dec 2013 31 Dec 2014 Net debt level temporarily lowered by €700m hybrid bond and €350m share Net debt 923 154 capital increase aimed at financing Shareholders’ equity 2,349 3,573 Bostik acquisition (closed on 2 February 2015) ● 0.2x net debt/EBITDA Net provisions for pensions
Slide 17: Maintain a strong balance sheet
Maintain a strong balance sheet Financing of Bostik acquisition Debt maturity profile (€m) ● €700m perpetual hybrid bond issue (October 2014) ● 4.75%/year ● First call date: 29 October 2020 ● Recognized as equity under IFR rules 900 ● €350m share capital increase (December 2014) ● With preferential
Slide 18: Dividend
Dividend Dividend (€/share) Dividend policy: “aims to reach a 30% 1.85 1.85* payout ratio on adjusted net income 1.8 and not to reduce dividend” Dividend maintained at €1.85 1.3 ● Despite lower adjusted net income ● Despite a higher number of shares outstanding following the share capital increase c
Slide 19: Strategic priorities and outlook: New promising growth platforms
Strategic priorities and outlook New promising growth platforms
Slide 20: Executing on targeted growth strategy
Executing on targeted growth strategy Acquisition in High Performance Bostik, #3 worldwide in adhesives, acquired 2 February 2015 Materials Global manufacturing Start-up of a new platform in Malaysia beginning 2015 presence in Thiochemicals Global US$110m investment plan finalized mid-2014 manufactu
Slide 21: Bostik in a nutshell
Bostik in a nutshell #3 worldwide in adhesives Sales by region Industry #3-4 worldwide 29% Europe Construction 45% €1.53bn Non-woven €1.53bn 50% North America & Consumer sales 55% #2 worldwide sales #3 worldwide Asia & RoW #1 in specialties 21% Proforma 2014 figures Proforma 2014 figures Powerful br
Slide 22: Bostik: an acquisition closed within a tight timetable
Bostik: an acquisition closed within a tight timetable 2014 2015 19 2 September October November December January February Announcement Closing of the project Information-consultation process in France at Bostik, Total and Arkema Approval by antitrust authorities Financing €1.74bn enterprise value H
Slide 23: Bostik in 2014
Bostik in 2014 2014 key figures fully in line with communicated estimates Sales (€m) EBITDA (€m) EBITDA margin 1,501 1,533 146 158 9.7% 10.3% +4% +8% at constant FX 2013 2014 2013 2014 2013 2014 Proforma figures Very clear growth strategy Increase presence in emerging countries ● Start-up of new uni
Slide 24: Bostik acquisition will create significant value
Bostik acquisition will create significant value Bostik mid- and long-term targets +30% EBITDA 14 to 15% €158m 10.3% 2014 2017e 2014 2020e Proforma figures Mid-term EBITDA target Long-term EBITDA margin target Integration process already launched Secured and competitive financing of the operation Cu
Slide 25: Successfully execute growth plan in Thiochemicals
Successfully execute growth plan in Thiochemicals H2S supply secured for next 30 years Lacq (France) Risk existing at time of spin-off removed end 2013 Kerteh (Malaysia) New platform started beginning 2015 Significant investment phase in a capital-intensive industry now finalized Kerteh: 1st world-s
Slide 26: Now a global leader in Acrylics
Now a global leader in Acrylics #3 worldwide in acrylics Acrylic downstream integration Changshu Taixing (China) (China) Coatex (Rheology Additives) Acrylic monomers Coating Resins Mumbai Changshu (India) (China) Coating Resins R&D center Guangzhou (China) Sartomer (UV Curing Resins) Pasir Gudang (M
Slide 27: Build a leading position in acrylics in Asia
Build a leading position in acrylics in Asia Initial agreement (January 2014) New agreement (February 2015) • 1st step: access 160,000 t/year • Extension until January 2016 of the period acrylic acid for US$240m to exercise the option to access a total Closed 20 October 2014 of 320,000 t/year acryli
Slide 28: Arkema's Executive Committee
Arkema’s Executive Committee Complementary skills with proven track-record Thierry Le Hénaff Chairman & CEO Thierry Lemonnier Michel Delaborde CFO HR & Communication Marc Schuller Industrial Specialties Coating Solutions Bernard Boyer Luc Benoît-Cattin Strategy Industry Bernard Pinatel High Performa
Slide 29: 2015 priorities
2015 priorities Integrate Bostik as a key component of Arkema Integration of Bostik Group and deliver expected profit growth Ramp up the Thiochemicals platform in Malaysia Optimize performance of Sunke in acrylics in China in current challenging market conditions Sustain growth from innovation ● Ste
Slide 30: Outlook
Outlook 2015 macro-economic assumptions ● Market conditions expected to remain volatile and contrasted with different dynamics depending on geographic regions and product lines ● FX rates (mainly US$/€) should make a positive contribution and offset low-cycle unit margins in acrylic monomers and mor
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
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