Slide 1: Strategy and Long-Term Ambition
STRATEGY AND LONG-TERM AMBITION Thierry LE HÉNAFF Chairman and CEO
Slide 2: Major Milestones 2005-2014
MAJOR MILESTONES 2005-2014
Slide 3: Increased Presence in Emerging Markets
INCREASED PRESENCE IN EMERGING MARKETS 1.7 1.0 Sales 2005 2014* in EM PVDF, FLUOROGASES, THIOCHEMICALS ACRYLICS COATEX, COATING RESINS NEW R&D CENTRE Kerteh Taixing Changshu CAPEX: INVESTMENT: CAPEX: €200 M US$240 M** €250 M * 2014 proforma sales including Bostik ** Access to a production capacity o
Slide 4: Creation of an Integrated and Global Acrylics Value Chain
CREATION OF AN INTEGRATED AND GLOBAL ACRYLICS VALUE CHAIN 0.7 1.9 Sales 2005* 2014* in CS 2007 2010 2011 2011-2014 2014 Acquisition Acquisition Acquisition Investment plan Acquisition of Coatex of acrylics of Cray Valley / in the US of a stake and emulsion assets Sartomer in Sunke in China * 2014 pr
Slide 5: Strong Development of High Performance Materials
STRONG DEVELOPMENT OF HIGH PERFORMANCE MATERIALS 1.6 3.3 Sales 2005* 2014* in HPM 2007 2011 2012 2012 2015 New molecular New PVDF Acquisition 50% increase Acquisition sieves production production unit of Hipro Polymers in PVDF of Bostik line in Inowroclaw in Changshu (China) PA10 and Casda productio
Slide 6: A More Balanced Global Footprint
A MORE BALANCED GLOBAL FOOTPRINT SALES BY REGION 2005 2014* 18% 25% €5.7 bn 57% €7.5 bn 43% 25% sales sales 32% Europe North America Asia and RoW * 2014 proforma sales including Bostik 6 CAPITAL MARKETS DAY 2015
Slide 7: More Focused and Higher Quality Portfolio
MORE FOCUSED AND HIGHER QUALITY PORTFOLIO SALES BY SEGMENT 2005* 2014** 26% 24% 28% €5.7 bn €7.5 bn 44% 13% sales sales 35% 30% High Performance Industrial Coating Solutions Vinyls Materials Specialties * Using new reporting ** 2014 proforma sales including Bostik and using new reporting 7 CAPITAL M
Slide 8: Change of Scale in Profitability
CHANGE OF SCALE IN PROFITABILITY EBITDA MARGIN 13% 13.2% 6.2% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2014 Spin-off: 2014: GDP: 4.9% GDP: 3.4% Acrylics: peak cycle Acrylics: close to low cycle €/US$: 1.24 €/US$: 1.33 Share price: €26.54 Share price (25/06/2015) €66.16 +149% in 9 years CAC4
Slide 9: Arkema Today
ARKEMA TODAY
Slide 10: Arkema Today
ARKEMA TODAY 19,200 A presence in 3 R&D € 7.5 bn* 137 sales employees worldwide 50 countries production sites and innovation geographical hubs Entrepreneurial culture Strong focus on partnerships and relations with customers Balanced global footprint Competitive world-scale units on 3 contin
Slide 11: Markets and Customers Are at the Heart of the Company
MARKETS AND CUSTOMERS ARE AT THE HEART OF THE COMPANY 11 CAPITAL MARKETS DAY 2015
Slide 12: Our Portfolio
OUR PORTFOLIO HIGH PERFORMANCE INDUSTRIAL COATING MATERIALS SPECIALTIES SOLUTIONS Specialty Adhesives (Bostik) Thiochemicals Acrylics (upstream) Technical Polymers PMMA Coating Resins and Additives (downstream) Performance Additives Fluorogases Hydrogen Peroxide CYCLICALITY CYCLICALITY CYCLICALITY Q
Slide 13: Your Main Current Questions Answered
YOUR MAIN CURRENT QUESTIONS ANSWERED Synergies starting to ramp up Bostik Promising performance in the first months Successful start-up completed Thiochemicals in Malaysia Strong contribution expected from 2Q’15 Challenging market conditions Acrylics Mid-cycle conditions still assumed in
Slide 14: Long-Term Ambition
LONG-TERM AMBITION
Slide 15: Our Long-Term Ambition
OUR LONG-TERM AMBITION SALES EBITDA MARGIN CAPEX INTENSITY IN €BN (CAPEX/SALES) IN % Including 1-1.5 €bn ~10 Close to coming from new acquisitions 17% post 2017* ~8% 6.0 ~5.5% 13% 2014 LT 2014 LT 2014 LT (2020e) (2020e) (2020e) Defined in normalized market conditions (Acrylics in mid-cycle, €/US$ at
Slide 16: Main Strategic Directions
MAIN STRATEGIC DIRECTIONS 1 2 3 ACCELERATE GROWTH SELECTIVE GROWTH IN REINFORCE ACRYLICS OF HIGH PERFORMANCE INDUSTRIAL SPECIALTIES DOWNSTREAM MATERIALS 4 5 6 FINALIZE THE FULL MAINTAIN EMPHASIS DISPOSAL OF NON-CORE GEOGRAPHICAL ON OPERATIONAL BALANCING ASSETS EXCELLENCE 16 CAPITAL MARKETS DAY 2015
Slide 17: A Differentiated Strategy by Segment
A DIFFERENTIATED STRATEGY BY SEGMENT EBITDA margin Segment 2005 – 2014 2015 – long-term potential* Accelerate growth HIGH PERFORMANCE MATERIALS Reposition in adhesives and 17% - 18% from megatrends INDUSTRIAL Extend footprint Grow SPECIALTIES in Asia selectively 17% - 19% Build a whole COATING Reinf
Slide 18: Accelerate Growth of High Performance Materials
ACCELERATE GROWTH OF HIGH PERFORMANCE MATERIALS 50% 44% High Performance Materials 28% Industrial 25% Specialties 35% 30% Coating Solutions 13% 26% 25% Vinyls 24% 2005* Proforma 2014* LT New reporting (2020e) * 2014 proforma sales including Bostik; 2005 using new reporting 18 CAPITAL MARKETS DAY 201
Slide 19: Towards a Fully Balanced Global Footprint
TOWARDS A FULLY BALANCED GLOBAL FOOTPRINT Sales close to x2 33% in “emerging countries” 25% Asia and RoW 18% 33% 32% North America 25% Europe 57% 43% 33% 2005 2014* LT (2020e) * 2014 proforma sales including Bostik 19 CAPITAL MARKETS DAY 2015
Slide 20: 2017 EBITDA Objective Confirmed
2017 EBITDA OBJECTIVE CONFIRMED EBITDA Environment €1.3 bn M&A +150 Organic growth +190 €784 m +180 2014 2017e Defined in normalized market conditions (Acrylics in mid-cycle, €/US$ at 1.15, brent at US$70/b,…) Gearing at ~40% 20 CAPITAL MARKETS DAY 2015
Slide 21: Main Elements Supporting 2017 Objective
MAIN ELEMENTS SUPPORTING 2017 OBJECTIVE ORGANIC GROWTH M&A EXTERNAL ENVIRONMENT MAIN DRIVERS ACQUISITIONS NORMALIZED Thiochemicals in Malaysia Bostik (initial €158 m) Acrylics in mid-cycle Bostik growth: +€50 m 1st step of Sunke acquisition (currently low-cycle) Internal measures 2nd s
Slide 22: A Strong Ambition for Bostik
A STRONG AMBITION FOR BOSTIK EBITDA Smooth integration IN €M In a very positive spirit Highly committed teams Synergies well on track with short-term focus on costs ~300 Promising start of the year Strict benchmarking of competition x2 2017 objective confirmed +30% EBITDA versus 2014 (ex
Slide 23: Some Major Growth Drivers 1/2
SOME MAJOR GROWTH DRIVERS 1/2 THIOCHEMICALS ACRYLICS COMPOSITE MATERIALS Kerteh Taixing US$120 M SALES MID-TERM €70 M EBITDA* €100 TO €200 M MID-TERM FURTHER NEW SALES in mid-cycle THOUGHTS LONG-TERM conditions UNDERWAY * Subject to the exercise of the option to increase our share in Sunke and acces
Slide 24: Some Major Growth Drivers 2/2
SOME MAJOR GROWTH DRIVERS 2/2 MOLECULAR SIEVES FLUOROGASES DEVELOPMENT FOR OIL & GAS IMPROVEMENT IN MIDDLE EAST X2 +€100 M VOLUMES SOLD X2 EBITDA MID-TERM SALES MID-TERM (Honfleur expansion LONG-TERM ~€60 m CAPEX) (Action plan) Announced today 24 CAPITAL MARKETS DAY 2015
Slide 25: Innovative Chemistry: Arkema's DNA
INNOVATIVE CHEMISTRY: ARKEMA’S DNA COMPOSITES BOSTIK Flame-retardant Genius fix Seal & reseal adhesives for aircraft CAPITAL MARKETS DAY SHOWROOM Fluid Plant modeling Molecular simulation for design and training modeling ADVANCED MATERIALS MANUFACTURING PROCESS 25 CAPITAL MARKETS DAY 2015
Slide 26: Operational Excellence
OPERATIONAL EXCELLENCE TA R G E T: € 1 0 0 M G A I N S I N 2 0 1 7 V E R S U S 2 0 1 4 PRIORITIES WHERE WE STAND NEW PLAN VS 2017 TARGET Previous plan New plan SAFETY / ENVIRONMENT 2013-2017 2013-2017 €100 m €150 m TECHNOLOGY LEADERSHIP 10% Process innovation +€50 m 25% New projects management €
Slide 27: Safety Always in Mind
SAFETY ALWAYS IN MIND KEY ACHIEVEMENTS 11.3 Safety: TRIR 1.9 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2020 TARGETS TRIR: 1.7 100% of sites implementing peer observation 100%* of AIMS** audited sites SAFETY OF OUR EMPLOYEES AND UNITS IS A CORE VALUE * In the last three years ** Arkema
Slide 28: Act Responsibly
ACT RESPONSIBLY KEY ACHIEVEMENTS AND TARGETS EMISSION OF GREENHOUSE GASES EMISSION OF VOLATILE ORGANIC COMPOUNDS* 1 1 0.86 0.93 0.7 0.7 0.79 0.8 CHEMICAL OXYGEN DEMAND NET PURCHASES OF ENERGY 1 1 1.03 1 1.02 0.99 0.8 -1.5%/year on average 2012 2013 2014 2020 Target CONSTANTLY REDUCING OUR ENVIRONMEN
Slide 29: Portfolio Optimization
PORTFOLIO OPTIMIZATION ACQUISITIONS DIVESTMENTS 2015-2016 Target to divest €700 m sales of non-core activities between 2015 • Integrate and ramp up Bostik and Sunke and 2017 • Small bolt-on acquisitions such as Oxido First step: project to divest Sunclear* January 2016: decision to exercise
Slide 30: Dividend Growth Supported by Profit Development
DIVIDEND GROWTH SUPPORTED BY PROFIT DEVELOPMENT DIVIDEND IN € / SHARE 1.85 1.85 1.8 The dividend has grown at 14% per year on average since 2007 1.3 Arkema has delivered its objective of reaching 1.0 a 30% payout ratio. The Group aims at maintaining this level on average 0.75 for the coming years an
Slide 31: Arkema Key Take-Aways 1/2
ARKEMA KEY TAKE-AWAYS 1/2 AN IN-DEPTH TRANSFORMATION OVER THE PAST 10 YEARS Structurally higher profitability Very significant value creation FULL AWARENESS Far better positioning (geography, OF PROGRESS AREAS business portfolio, innovation pipeline) Strong and consistent execution Further
Slide 32: Arkema Key Take-Aways 2/2
ARKEMA KEY TAKE-AWAYS 2/2 CLEAR STRATEGIC PRIORITIES MID- AND LONG-TERM Accelerate development of High Performance Materials through innovation and bolt-on acquisitions Leverage full potential of the new COMMITTED TO CREATE STRONG Adhesives platform (Bostik) VALUE FOR OUR SHAREHOLDERS Five mai
Slide 33: 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
Slide 34: Strategy and Long-Term Ambition
STRATEGY AND LONG-TERM AMBITION Thierry LE HÉNAFF Chairman and CEO