Arkema Sa · EURONEXT:AKE
Arkema Sa — Nomura Global Chemical Industry Leaders Conference (March 2012)
33 slides from Arkema Sa's conference presentation, Mar 23, 2012
Slide 1: Arkema
Arkema Nomura Global Chemical Industry Leaders Conference Thierry Lemonnier CFO Rome, 23rd March, 2012
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: 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 8: 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 9: 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 10: 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 11: 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 H2 O 2 resins 3% 11% 11% Sartomer 9% Fluoro- chemicals PMMA Industrials Thiochemicals Industrial specialties Chemical
Slide 12: Financials performance
Financials performance* * In application of IFRS 5 rules, Vinyls activities subject to a divestment project are accounted as discontinued operations
Slide 13: 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 14: 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 14 - ARK
Slide 15: 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 16: 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 17: 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 18: 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 18 - ARKEMA / Results
Slide 19: Strong growth platform for the future
Strong growth platform for the future
Slide 20: 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 21: 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 22: 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 23: 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 23 - ARKEMA / Results
Slide 24: 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 24 - ARKEMA / Results
Slide 25: 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 26: 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 27: 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 28: Outlook
ARKeEMA The world is our inspiration
Slide 29: 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 30: 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 31: 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 32: Conclusion / Save the date
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 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
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