Arkema Sa · EURONEXT:AKE
Arkema Sa — Shareholder Meeting (June 2007)
47 slides from Arkema Sa's shareholder meeting presentation, Jun 5, 2007
Slide 1: 2007 Annual General Meeting
5 june 2007, Paris 2007 Annual General Meeting
Slide 2: Arkema - Recent History
Arkema - Recent History Creation of Arkema, 1 October 2004 Initial Public Offering, 18 May 2006 Eligibility for SRD, 27 March 2007 First General Meeting of Shareholders, 5 June 2007 2007 Annual General Meeting
Slide 3: A major player in the global chemical industry
A major player in the global chemical industry Sales by segment Sales €5.7 bn Performance Vinyl Products EBITDA* €411m Products 24% CAPEX €336m 32% Factories 80 44% Headcount 17,044 Industrial Chemicals *EBITDA = Earnings before interest, tax, depreciation and amortization 2007 Annual General Meetin
Slide 4: Active in more than 40 countries
Active in more than 40 countries Europe 58% of sales 50 factories 4 R&D centers North America 25% of sales Asia 20 factories 13% of sales 1 R&D center 10 factories 1 R&D center NB: rest of the world = 4% of sales 2007 Annual General Meeting
Slide 5: Vinyl Products
Vinyl Products Highly integrated business from chlorine to the production of PVC N°3 in Europe Improving competitiveness Moving towards the diversification of PVC products 2007 Annual General Meeting
Slide 6: Industrial Chemicals
Industrial Chemicals Five major chemical intermediates Leading global positions Growth in Asia Expansion of the best production facilities 2007 Annual General Meeting
Slide 7: Performance Products
Performance Products Technologically sophisticated products for specific applications Brands internationally recognised Innovative R&D Cost reductions Management of the business portfolio 2007 Annual General Meeting
Slide 8: Review of 2006
Review of 2006 A strong dynamic of change 2007 Annual General Meeting
Slide 9: Economic environment in 2006
Economic environment in 2006 Rising raw material and energy prices Strong growth in Asia Slower US growth during the 2nd semester Satisfactory demand level in Europe Reduction in unit margins in acrylics 2007 Annual General Meeting
Slide 10: Results ahead of our targets
Results ahead of our targets Objectives Actual 2006 2006 performance EBITDA growth 10% to 15% +18.4% Net income, group share >0 € 45m > 0 from €79m Cash flow (before pre-spin off NR items) 2007 from 2006 Gearing 30% to 40% 28%* * including €212m in pre-spin off NR items 2007 Annual General Meeting
Slide 11: A year of significant achievements
A year of significant achievements ACRYLICS HYDROGEN PEROXIDE SULFUR CHEMICALS NEW HEADQUARTERS CHLOROCHEMICALS ALTUGLAS/PLEXIGLAS* AGROCHEMICALS RILSAN CLEAR MOLECULAR SIEVES *Sold as Plexiglas® in the Americas and Altuglas® in the rest of the world 2007 Annual General Meeting
Slide 12: Strong share price performance
Strong share price performance € 47.8 Price (€) + 74% At 18/05/2007 48 € 38.9 + 42% 44 At 31/12/2006 40 Arkema 36 + 25% € 27.5 32 28 SBF 120 24 May 06 July 06 Sept 06 Nov. 06 Jan. 07 March 07 May 07 At May 18, 2007 2007 Annual General Meeting
Slide 13: End-2006: a different company, showing significant progress
End-2006: a different company, showing significant progress A successful spin-off Performance ahead of targets Simplified and more efficient structure Many value-creating projects Very solid balance sheet The foundations for strong performance 2007 Annual General Meeting
Slide 14: 2006 Results
2006 Results 2007 Annual General Meeting
Slide 15: Strong improvement in earnings
Strong improvement in earnings Change 2005- €m 2004* 2005* 2006 2006 Sales 5,137 5,515 5,664 +2.7% EBITDA 295 347 411 +18.4% EBITDA margin 5.7% 6.3% 7.3% Recurring operating income 11 125 200 +60.0% Recurring operating income/sales 0.2% 2.3% 3.5% Other income and expenses (596) (496) (92) Cost of de
Slide 16: Increase in selling prices
Increase in selling prices 0.8% (1.5)% 3.8% (0.2)% (0.2)% organic €5,664m growth Shutdown of activities Scope Conversion effect €5,515m Prices +2.7% 2005 sales 2006 sales 2007 Annual General Meeting
Slide 17: High impact of productivity initiatives
High impact of productivity initiatives €120m €(44)m €(12)m €411m Inflation on fixed costs others €347m fixed cost savings +18.4% EBITDA 2005 EBITDA 2006 2007 Annual General Meeting
Slide 18: Stronger business segments
Stronger business segments Vinyl Products Industrial Chemicals Performance Products Implementation of Good resistance Strong improvement consolidation plan under a less favourable of margin environment 2.8% 13.1% 8.7% 10.7% 1.4% 6.0% 38 316 156 20 267 102 2005 2006 2005 2006 2005 2006 Recurring EBIT
Slide 19: A solid balance sheet
A solid balance sheet Assets Liabilities Non-current Shareholders' assets equity and discontinued €1,938m businesses €1,965m Ratio: 17%* Net debt €324m WC €1,167m Provisions and others €870m *28% including €212m in pre-spin off NR items 2007 Annual General Meeting
Slide 20: Positive cash flow
Positive cash flow Reference Position at €m position 31/12/2006 Net debt 567 324 Pre-spin off capital issue (532) - Pre-spin off NR items 580 212 Net debt + pre-spin off NR items 615 536 Positive cash flow* of €79m * Excluding pre-spin off NR items 2007 Annual General Meeting
Slide 21: 2010 prospects
2010 prospects Strong ambition 2007 Annual General Meeting
Slide 22: Our challenges
Our challenges Reaching margin levels that are close to the best Capture growth in emerging economies Develop the products of the future Make sustainable development into an opportunity Improve ability to withstand economic cycles Permanent evolution in a changing world 2007 Annual General Meeting
Slide 23: Strategic focus
Stepping up the pace of strategy implementation Strategic focus Strengthen manufacturing excellence Enhance our presence in Asia Develop market-driven innovation Solid foundations culture and strong lean sustainable organization balance sheet corporate development 2007 Annual General Meeting
Slide 24: Strengthen manufacturing excellence
Strengthen manufacturing excellence Industrial safety Costs optimisation World- scale sites Energy efficiency Calvert City Site - USA Modern competitive factories 2007 Annual General Meeting
Slide 25: Enhance our presence in Asia
Enhance our presence in Asia g en d ro ide Hy erox ics p Targeted investment l A cry Improved customer support Industrial and commercial partnerships MA PM iv es d it Ad s ls i de ic a am m ly e Po ro ch o Changshu Platform - China Flu Increase investment levels (€50m per year) 2007 Annual General M
Slide 26: R&D: a source of growth for Arkema
R&D: a source of growth for Arkema KING OF PRUSSIA SERQUIGNY CARLING LACQ PIERRE-BÉNITE KYOTO 160 patents per year 1,350 researchers 6 centers 3% of sales 2007 Annual General Meeting
Slide 27: Develop market-driven innovation
Develop market-driven innovation Pebax®, Orgasol®, Siliporite®, Nanostrength®, Altuglas®*, Plexiglas®*, Orevac®, Blockbuilder®, Rilsan®, Graphistrength®… Projects for long-term change Developing new applications for the Industrial Chemicals’ products Increasing the share of new products in Performan
Slide 28: Dynamic development of the business portfolio
Dynamic development of the business portfolio Sale of non-strategic assets generating €400m in sales Disposal of Cerexagri (agrochemicals) Disposal of specialty amines (Riverview, USA) Disposal of urea-formaldehyde resins (Leuna, Germany) Acquisitions in our core businesses generating €500m to €800m
Slide 29: Sustainable development at the core of our projects
Sustainable development at the core of our projects Contribute to energy Take advantage of new savings regulations Reduce our greenhouse gas Expanding use emissions of renewable raw materials Improve the integration of our businesses in their local context 2007 Annual General Meeting
Slide 30: Ambitious targets for 2010
Ambitious targets for 2010 12%* EBITDA margin... 12%* 7.3% 6.3% 5.7% 4.9% 2003 2004 2005 2006 2010 … with gearing held at below 40% * In mid-cycle conditions and under a normalized environment 2007 Annual General Meeting
Slide 31: Continuing the transformation and development of Arkema
Continuing the transformation and development of Arkema to pave the way to tomorrow’s chemicals industry: responsible, innovative, competitive and value creating. The world is our inspiration
Slide 32: 2007 Annual General Meeting
NCE ARKEMA 2007 Annual General Meeting
Slide 33: Constitution of the Board of Directors
Constitution of the Board of Directors Created for the spin-off on 18 May 2006 Six of the eight directors are independent A wide range of high-level expertise Creation of 2 committees: The Nominating and Compensation Committee The Audit and Accounts Committee 2007 Annual General Meeting
Slide 34: Experienced management team
Experienced management team Board Executive Committee of Directors Thierry Le Hénaff Chairman and Chief Executive Officer Thierry Le Hénaff – Chairman François Enaud Bernard Kasriel Bernard Boyer Laurent Mignon Michel Delaborde Thierry Morin Alain Devic Jean-Pierre Seeuws Philippe Goebel Tidjane Thi
Slide 35: Nominating and Compensation Committee
Nominating and Compensation Committee Proposes the composition and organization of the Board of Directors Assesses the independence of directors Sets directors' attendance fees Approves remuneration policy Sets remuneration for the Chairman and members of the Executive Committee Prepares the Board's
Slide 36: The Audit and Accounts Committee
The Audit and Accounts Committee Proposes the appointment of Auditors Examines accounts and accounting principles and methods Reviews internal control procedures Approves remuneration policy Examines the work of auditors P. Vassor L. Mignon Chairman JP. Seeuws 2007 Annual General Meeting
Slide 37: 2007 Annual General Meeting
ARKEMA 2007 Annual General Meeting
Slide 38: Resolution n° 1, ordinary
Resolution n° 1, ordinary APPROVAL OF THE ARKEMA S.A. PARENT COMPANY FINANCIAL STATEMENTS FOR YEAR ENDED DECEMBER 31, 2006 Parent company net income €18.1 million 2007 Annual General Meeting
Slide 39: Resolution n° 2, ordinary
Resolution n° 2, ordinary APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED ON DECEMBER 31, 2006 Net income, Group share: €45 million 2007 Annual General Meeting
Slide 40: Resolution n° 3, ordinary
Resolution n° 3, ordinary ALLOCATION OF EARNINGS Net income for the year: 18,124,589.06 euros To be allocated in its entirety to "Retained earnings" 2007 Annual General Meeting
Slide 41: Resolution n° 4, ordinary
Resolution n° 4, ordinary AGREEMENTS COVERED BY ARTICLE L.225-38 of the French Commercial Code Auditors' special report on agreements covered by article L.225-38 of the French Commercial Code concluded or continued during the year of 2006 2007 Annual General Meeting
Slide 42: Resolution n° 5, ordinary
Resolution n° 5, ordinary RATIFICATION OF TRANSFER OF THE COMPANY’S REGISTERED OFFICE 420, rue d’Estienne d’Orves 92700 Colombes FRANCE 2007 Annual General Meeting
Slide 43: Resolution n° 6, ordinary
Resolution n° 6, ordinary APPROVAL OF THE CO-OPTATION OF M. TIDJANE THIAM Duration of Mandat: To the conclusion of the Annual General Meeting held in 2009 to approve the 2008 financial statements 2007 Annual General Meeting
Slide 44: Resolution n° 7, ordinary
Resolution n° 7, ordinary AUTHORIZATION FOR THE BOARD OF DIRECTORS TO IMPLEMENT A SHARE BUYBACK Minimum purchase price €60 per share Maximum number of shares held: 10% of shares comprising the share capital Maximum authorized amount: €200 million Period of authorization: 18 months 2007 Annual Genera
Slide 45: Resolution n° 8, extraordinary
Resolution n° 8, extraordinary AUTHORIZATION FOR THE BOARD OF DIRECTORS TO REDUCE THE SHARE CAPITAL BY CANCELLING SHARES Authorized maximum: 10% of the Company's capital Period of authorization: 24 months 2007 Annual General Meeting
Slide 46: Resolution n° 9, extraordinary
Resolution n° 9, extraordinary POWERS FOR FORMALITIES 2007 Annual General Meeting
Slide 47: 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