Slide 1: 2016 Annual General Meeting
2016 ANNUAL GENERAL MEETING
Slide 2: 10 years after, a completely different profile
10 years after, a completely different profile
Slide 3: A real step change in safety and sustainable development
A real step change in safety and sustainable development Greenhouse gas Volatile organic compound TRIR * emissions emissions 1.5 versus 11.3 in 2005 -64% versus 2005 -43% versus 2005 2015 achievements * Total recordable injury rate per million of hours worked 3
Slide 4: Better balanced geographical footprint
Better balanced geographical footprint 2005 2015 18% 28% €5.7 bn €7.7 bn 38% 57% sales sales 25% 34% Europe North America Asia and RoW 4
Slide 5: A portfolio refocused on specialties
A portfolio refocused on specialties 2005 2015 24% 24% 28% €5.7 bn €7.7 bn 44% sales sales 13% 35% 32% High Performance Industrial Coating Solutions Vinyls Materials Specialties 5
Slide 6: Stronger financials
Stronger financials SALES EBITDA +2 billions of euros x3 compared to 2005 versus 2005 EBITDA MARGIN NET DEBT 13.8% <40% of shareholders’ equity versus 6.2% in 2005 stable versus 2005 2015 achievements 6
Slide 7: Strong value creation for shareholders
Strong value creation for shareholders 100,00 Share price since 18 May 2006 90,00 80,00 Arkema 70,00 +173% 60,00 50,00 Peers average 40,00 +40% 30,00 CAC 40 20,00 -10% 10,00 0,00 18/05/2006 18/05/2007 18/05/2008 18/05/2009 18/05/2010 18/05/2011 18/05/2012 18/05/2013 18/05/2014 18/05/2015 18/05/2016
Slide 8: Dividend: a key element of shareholders' return
Dividend: a key element of shareholders’ return Dividend and payout ratio in € / share and in % Compound annual 1.90* Dividend policy: growth rate 1.85 1.85 1.8 « Aims to pay a stable to +12.3 % growing dividend 1.3 each year » 1.0 51% 0.75 45% 0.6 0.6 32% 24% 25% 25% 17% 14% 2007 2008 2009 2010 201
Slide 9: Transformative acquisitions
Transformative acquisitions SARTOMER Performance Additives ASSETS OF SEPPIC OXIDO Performance Performance Additives Additives GROWTH IN CASDA HIGH BIOMATERIALS BOSTIK PERFORMANCE Specialty HIPRO POLYMERS Adhesives MATERIALS Technical Polymers 2007 2008 2009 2010 2011 2012 2013 2014 2015 DEVELOPMENT
Slide 10: 2015 highlights
2015 highlights INnovaTIVE QA CHEMISTRY
Slide 11: Arkema in 2015
Arkema in 2015 € 7.7 bn 19,000 Worlwide presence in 136 3 R&D sales employees industrial sites and innovation worldwide 50 countries geographical hubs 11
Slide 12: A strong set of results
A strong set of results Sales EBITDA Free cash flow (1) Net debt in €BN in €M in €M in €BN +29% +35% x21 -€0.4 bn 1.8 7.7 1,057 +442 1.4 6.0 784 Bostik cash-out: €1.6 bn +21 2014 2015 (1) Cash flow from operations and investments excluding the impact of portfolio management 12
Slide 13: 2015 highlights
2015 highlights BOSTIK THIOCHEMICALS DIVESTMENT PROGRAM Successful integration Technical and commercial Divestment of Sunclear success FLUOROGASES SUNKE ARKEMA RECOGNIZED Gradual improvement of Recent developments in Innovation, CSR and profitability contractual terms sustainable development 13
Slide 14: Bostik: a successful integration
Bostik: a successful integration EBITDA in €M +30% vs 2014 183 158 2014 2015* 2017 New Bostik unit in the Philippines target 2015 EBITDA up 16% versus 2014 Smooth and quick integration Synergies well on track with first benefits already achieved in 2015 11.2% EBITDA margin in 2015 (10.3% in 2014) Ne
Slide 15: Bostik: close to consumer
Bostik: close to consumer Making the Bostik brand fly across Europe and ride along with the Tour de France 15
Slide 16: Bostik: close to professionals
Bostik: close to professionals The Smart House 16
Slide 17: Thiochemicals in Malaysia
Thiochemicals in Malaysia Arkema’s largest industrial project since its stock market listing Start-up of the unit in 1st quarter of 2015 Technological and commercial success Ramp-up quicker than anticipated supported by the animal nutrition market in Asia 17
Slide 18: Acrylics in China: recent developments
Acrylics in China: recent developments Sunke Acrylic acid production joint-venture Arkema has a right to 160 kt production capacities of acrylic acid per year Early 2016, Arkema decided not to exercise its €200 M option to double its rights to production capacities Ongoing discussions with the partn
Slide 19: 2015: an award-winning year
2015: an award-winning year Quality of regulated information Carbon Disclosure Project Grand Prix in the category « Improvement Award – France » « Oil, Gas, Materials and Buildings » AGEFI EcoVadis Second prize in Gold level corresponding to the Dynamique de gouvernance highest CSR performance level
Slide 20: Innovation at the heart of the strategy
Innovation at the heart of the strategy
Slide 21: 3 geographic R&D hubs
3 geographic R&D hubs United States France Asia (China, Japan, South Korea) 450 researchers 1,000 researchers 150 researchers A R&D dedicated to customers 21
Slide 22: Tomorrow's materials, a major innovation area for Arkema
Tomorrow's materials, a major innovation area for Arkema PEKK Rilsan® High Temperature Elium® « The polymer of the extreme » AUTOMOTIVE AND COMPOSITES NEW ENERGIES TRANSPORTATION 22
Slide 23: Tomorrow's materials, a major innovation area for Arkema
Tomorrow's materials, a major innovation area for Arkema KYNAR® MEMBRANES PEBAX® RNEW STRUCTURAL ADHESIVES WATER TREATMENT SPORT ASSEMBLY OF ALL MATERIALS 23
Slide 24: A R&D focused on 6 platforms
A R&D focused on 6 platforms Lightweight New materials and energies design Applied research focused on Water 6 platforms management Long-term research Incubator Home efficiency and insulation Bio-based Electronics products solutions 24
Slide 25: Latest developments in R&D
Latest developments in R&D VENETTE CHANGSHU SEOUL TECHNICAL CENTER (France) (China) (South Korea) ACCELERATE THE OPENING OF A LABORATORY DEVELOP DEVELOPMENT OF LOCAL WITHIN TOMORROW’S ADHESIVES SOLUTIONS HANYANG UNIVERSITY 25
Slide 26: 2020 ambition
2020 ambition INnovaTIVE QA CHEMISTRY
Slide 27: Long-term priorities
Long-term priorities HIGH PERFORMANCE GEOGRAPHICAL PRESENCE BOSTIK MATERIALS Finalize the rebalancing Achieve our ambitions in Accelerate the growth while reinforcing the adhesives notably through of the division presence in emerging acquisitions countries INNOVATION COATING SOLUTIONS SAFETY / CSR M
Slide 28: A strong CSR ambition
A strong CSR ambition 2025 targets (1) Relative indicators based on 2012 reference year (2) The Arkema Integrated Management System (AIMS) combines ISO 9001, ISO 14001, and OHSAS 18001 requirements 28
Slide 29: 2015 financial results
2015 financial results ARKEMA
Slide 30: 2015 key figures
2015 key figures +29% +35% 13.8% Sales EBITDA EBITDA margin 7.7 billion euros 1,057 million euros versus 13.2% in 2014 +27% +71% +14% Adjusted Net income Adjusted net net income Group share income per share 312 million euros 285 million euros 4.23 euros 30
Slide 31: Sales bridge
Sales bridge Sales in €M Scope Volumes Price of business Currency +7.8% 7,683 +25.8% 5,952 +0.2% (4.7)% Moderate Mainly in Bostik acquisition Favorable worldwide growth Coating Solutions euro / US dollar Acquisition of a stake FX rate New thiochemicals Lower raw in Sunke in China platform in Malaysi
Slide 32: Performance by division
Performance by division IN €M 2014* 2015 Variation HIGH PERFORMANCE MATERIALS Sales 1,730 3,358 +94.1% Successful integration of Bostik and EBITDA 314 506 +61.1% innovation in lightweight materials and new energies Bostik dilutive EBITDA margin 18.2% 15.1% impact IN €M 2014* 2015 Variation INDUSTRIA
Slide 33: Strong cash generation
Strong cash generation Free cash flow(1) in €M +442 High EBITDA to cash conversion ratio at 42% Good control of capital expenditure +206 and working capital +129 Positive impact of lower costs of some raw materials +21 2012 2013 2014 2015 (1) Cash flow from operations and investments excluding the i
Slide 34: Capturing growth while reducing capital intensity
Capturing growth while reducing capital intensity Honfleur, France 2016/2017 Filtration and adsorption Changshu, China Organic peroxides - 1Q’16 Texas, US 2015 Fluorogases - 2016 Adhesives Mexico 2015 Bangalore, India 3Q’15 Adhesives Adhesives Philippines 2Q’16 7.9% 7.9% Adhesives 6.8% Kerteh, Malay
Slide 35: Net debt
Net debt Net debt in €M excluding €700 M hybrid bond 1,888 1,773 1,632 Net debt decreased quicker than 1,379 anticipated since Bostik acquisition in 1Q’15 Net debt / EBITDA: 1.3x Net debt / shareholders’ equity: 35% Average debt maturity > 5 years 31/03 30/06 30/09 31/12 2015 2015 2015 2015 35
Slide 36: 1Q'16 key figures
1Q’16 key figures +1.2% +27% 16.0% Sales EBITDA EBITDA margin 1.9 billion euros 302 million euros versus 12.7% in 1Q’15 HIGH PERFORMANCE INDUSTRIAL SPECIALTIES COATING SOLUTIONS MATERIALS €149 M EBITDA up 34 % YoY €129 M EBITDA up 39 % YoY €50 M EBITDA down 6 % YoY Bostik contribution and Higher per
Slide 37: 2016 outlook confirmed
2016 outlook confirmed A world economy remaining slow and volatile: Overall moderate global growth with low visibility and different dynamics by region Volatility in currencies, energy and raw material prices Strong organic momentum driven by: Continuous development of Bostik including ramp-up of sy
Slide 38: Governance
Governance INNOVATIVE A CHEMISTRY
Slide 39: Board of Directors
Board of Directors 12 MEMBERS Thierry Le Hénaff Claire Pedini Laurent Mignon Isabelle Boccon-Gibod 4 WOMEN 1 DIRECTOR REPRESENTING Bernard Kasriel Marc Pandraud Victoire de Margerie François Enaud SHAREHOLDER EMPLOYEES 82% INDEPENDENCE RATE Thierry Morin Patrice Bréant Philippe Vassor Hélène Moreau-
Slide 40: Activity of the Board and Committees in 2015
Activity of the Board and Committees in 2015 BOARD OF DIRECTORS SPECIALIZED COMMITTEES AUDIT AND ACCOUNT COMMITTEE 6 meetings 6 meetings 100% attendance rate 93% attendance rate 1 annual seminar of the NOMINATING, COMPENSATION AND Board dedicated to the CORPORATE GOVERNANCE COMMITTEE Group’s strateg
Slide 41: Board of Directors' assessment
Board of Directors’ assessment Assessment conducted early 2016 by an external consultant on the basis PRINCIPLES of individual interviews of each director Functioning of the Board assessed as very good Current governance structure with a combined role of Chairman and CEO fully adapted STRENGTHS Furt
Slide 42: Re-election of Thierry Le Hénaff as director (6th resolution)
Re-election of Thierry Le Hénaff as director (6th resolution) Combination of the positions of Chairman and Chief Executive Officer: A simple, fast and efficient decision-making process that has proved its efficiency since the Company’s stock market listing Proven efficiency of the Board’ functioning
Slide 43: Appointment of a Senior Independent Director
Appointment of a Senior Independent Director Part of the drive to constantly improve the Company’s governance Decision in line with corporate governance best practice Mandatory when the Chairman of the Board of Directors also serves as Chief Executive Officer Role and responsibilities described in d
Slide 44: Compensation of the Chairman and Chief Executive Officer
Compensation of the Chairman and Chief Executive Officer Structure of the compensation in 2015 LONG-TERM COMPENSATION: SHORT-TERM COMPENSATION: PERFORMANCE SHARES 37 % 38 % VARIABLE PART Vesting subject to 3 quantitative criteria 3 challenging criteria ~15 indicators for the qualitative criteria 25
Slide 45: Variable part structure
Variable part structure QUANTITATIVE CRITERIA: 110% OF FIXED COMPENSATION EBITDA 55 % Aligns compensation with the annual financial performance Rewards the Group’s achievements, the ability to adapt to changing market conditions and the good day-to-day management of the Group Recurring cash flow 27,
Slide 46: Components of compensation submitted to the advisory vote (7th resolution)
Components of compensation submitted to the advisory vote of the shareholders (7th resolution) (in euros) Amount Description Unchanged since May 2012 Fixed compensation 750,000 Increased to €900,000 from the renewal oh his term of office Reflects the excellent performance in 2015 Quantitative criter
Slide 47: Other agreements concerning the Chairman and Chief Executive Officer
Other agreements concerning the Chairman and Chief Executive Officer Termination indemnity (5th resolution) Indemnity in the event of forced departure in compliance with the recommendations of the AFEP-MEDEF Code Maximum of 2 years of fixed and variable compensation Fully subject to 5 demanding perf
Slide 48: Performance shares (17th resolution)
Performance shares (17th resolution) Renewal of the authorization granted by the Annual General Meeting in 2013 Objective is to involve more closely members of the executive management and certain employees to the Group’s future growth and stock market performance Around 1,100 beneficiaries followin
Slide 49: Success of the share capital increase reserved for employees
Success of the share capital increase reserved for employees 2016 share capital increase reserved for employees 40% average participation rate and 67% in France 26 countries across the world 998,072 shares subscribed €42 M invested More than 6% of the share capital held by Group’s employees Strong i
Slide 50: 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