Slide 1: Full Year 2013
FULL YEAR 2013 Thierry Le Hénaff Chairman and CEO March 4, 2014 INNOVATIVE “& CHEMISTRY
Slide 2: 2013 key take-aways
2013 key take-aways Solid 15% EBITDA margin despite a challenging economic environment Decrease in EBITDA centered on a few specific fields Oil & Gas and photovoltaics in High Performance Materials, Fluorogases, PMMA in Europe Overall increase in other business lines Further enhanced Group profile C
Slide 3: 2013 key figures
2013 key figures €6.1bn sales close to 2012 at constant scope of business and exchange rate €902m EBITDA and 14.8% EBITDA margin €368m adjusted net income €923m net debt representing 1x EBITDA 3
Slide 4: Sales breakdown by business
Sales breakdown by business Organic Peroxides High Acrylics Coating Performance Filtration 7% Solutions and Adsorption 15% Materials 10% 37% 30% Coating Resins Technical Polymers 14% 2013 sales 13% Sartomer (UV Curing Resins) €6.1bn 5% Hydrogen Peroxide Coatex (Rheological Additives) 4% 3% PMMA Thio
Slide 5: Diversified end markets
Diversified end markets Others 6% 21% Consumer goods Health, hygiene and beauty, wellness, 17% sports and leisure, packaging, textile, etc. Chemicals, plastics Electronics 3% Water 4% 14% Industrial coatings Automotive, marine, metal protection, Nutrition 4% adhesives & sealants, 3D printing, etc. 6
Slide 6: Megatrends support growth of our businesses
Megatrends support growth of our businesses End-markets Megatrends Drivers of Arkema’s growth • Increasing standard of living • Specialty Polyamides: new trends in consumer electronics and sports Consumer • Growth of population • Acrylics: superabsorbents for diapers goods • Ageing population • Filt
Slide 7: Enhanced geographical reach
Enhanced geographical reach European panel of peers* North America 19% Sales by region Europe 44% 24% Asia 13% North Europe 41% 34% America RoW incl. France: 11% incl. Germany: 7% American panel of peers** 5% 20% RoW Asia North Europe 34% 41% America China: 9% 8% 17% Two growth priorities: North Ame
Slide 8: Leadership positions
Leadership positions POSITION MAIN PLAYERS % GROUP SALES • Evonik #1 Specialty polyamides • Ems 13% #1 PVDF • Solvay #1 Thiochemicals • Chevron Phillips 9% • AkzoNobel #2 Organic peroxides • United Initiators 4% • Dupont #2 Fluorogases • Honeywell 9% • Evonik #2 PMMA • Mitsubishi Chemical 11% • Solv
Slide 9: Execution of transformational projects
Execution of transformational projects United States China US$110m capex program Hipro: PA10 x3 capacity in Acrylics (implemented in 2013) Bayport: 2-EHA new line (started in 2012) Changshu: Coating resins Clear Lake: Acrylic acid New emulsion unit Capacity expansion (+60 kt) (started mid-2013) (sta
Slide 10: Projects announced since January 1st, 2013
Projects announced since January 1st, 2013 China Changshu: Organic Peroxides Capacity x2 (Expected start-up early 2016) Asia Fluorogas 1234yf: new plant (Expected start-up in 2016) Saudi Arabia China Al Jubail: Organic Peroxides Taixing: acrylic monomers Very 1st plant in Middle East JV with Jurong
Slide 11: Full year 2013 results
Full year 2013 results INNOVATIVE S@& CHEMISTRY
Slide 12: 2013 key figures
2013 key figures In €m (except EPS) 2012 2013 variation Sales 6,395 6,098 -4.6% EBITDA 996 902 -9.4% EBITDA margin 15.6% 14.8% Recurring operating income 678 588 -13.3% Adjusted net income* 441 368 -16.6% Net income (Group share) 220 168 -23.6% Adjusted EPS* 7.09 5.87 -17.2% 12 * For 2012, adjusted
Slide 13: Sales bridge
Sales bridge Sales (€m) Scope of FX rate – Volume Price business translation effect 6,395 1.4% (2.0)% (1.9)% (2.1)% 6,098 ● Significant volume ● Temporary ● Divestment of tin ● Strengthening of growth in Coating challenges in stabilizers the euro vs the US Solutions Fluorogases dollar ● High Perform
Slide 14: Key drivers of FY'13 performance
Key drivers of FY’13 performance Solid performance in the large majority of product lines reflecting strong positions in resilient and growing niche markets ● Benefit from recent investments in US and China ● Sustainability: lightweight materials, bio-based products, water treatment, li-ion batterie
Slide 15: High Performance Materials
High Performance Materials In €m 2012 2013 variation Sales 2,101 1,842 -12.3% EBITDA 361 316 -12.5% EBITDA margin 17.2% 17.2% Recurring operating income 252 212 -15.9% EBITDA margin maintained at 17.2% €1,842m sales down 4% at constant scope of business and FX ● - 6.4% impact of changes in the scope
Slide 16: Industrial Specialties
Industrial Specialties In €m 2012 2013 variation Sales 2,096 1,993 -4.9% EBITDA 399 340 -14.8% EBITDA margin 19.0% 17.1% Recurring operating income 285 225 -21.1% 17.1% EBITDA margin in line with 2016 target €1,993m sales ● Down 3% at constant scope of business and FX ● - 4% price concentrated on Fl
Slide 17: Coating Solutions
Coating Solutions In €m 2012 2013 variation Sales 2,175 2,224 +2.3% EBITDA 279 292 +4.7% EBITDA margin 12.8% 13.1% Recurring operating income 192 199 +3.6% Continuing improvement of performance €2,224m sales ● Up 5% versus 2012 at constant scope of business and FX ● +4.6% volumes supported by organi
Slide 18: 4Q'13 highlights and key figures
4Q’13 highlights and key figures Sales (€m) EBITDA (€m) 1,400 1,447 1,411 171 +1.3 % 158 162 at constant scope and FX +2.4 % volumes mainly 11.5 % EBITDA margin in HPM -1.1 % price Solid performance in mainly in Fluorogases a 4th quarter 4Q’11 4Q’12 4Q’13 4Q’11 4Q’12 4Q’13 EBITDA (€m) and EBITDA mar
Slide 19: Cash flow
Cash flow In €m 2013 EBITDA 902 Working capital variation (1) (57) Taxes (139) Cost of debt (41) Recurring capex (329) In line with guidance of ~ 5.5% of sales Others (14) Recurring cash flow 322 Representing 36% of EBITDA, stable YoY Non-recurring items in operating and (41) Including €(26)m restru
Slide 20: Strong balance sheet
Strong balance sheet In €m 31 Dec 2012 31 Dec 2013 Net debt 900 923 Shareholders’ equity 2,311 2,349 Working capital /sales (%) Net provisions for pensions and 431 356 15.2% 14.9% ~15% other employee benefits* Other net provisions* 343 342 Non current assets 3,068 3,162 Working capital 971 908 Capit
Slide 21: Dividend
Dividend 1.85 Dividend (€/share) 1.8 32% payout on adjusted net income 1.3 ● Versus 25% payout in 2012 ● In line with target to reach a 30% payout ratio on adjusted net income 1.0 Reflects confidence in mid-term 0.75 outlook and solid balance sheet 0.6 0.6 2.2% dividend yield (based on share price a
Slide 22: 2014 outlook
2014 outlook Macro-economic assumptions ● Market conditions expected to remain contrasted – Solid growth in North America – Stabilization at current low points in Europe – Asia to remain with higher level of growth (China, South East Asia) ● On average expected stability of €/US$ exchange rate versu
Slide 23: Long-term outlook
Long-term outlook INNOVATIVE S@& CHEMISTRY
Slide 24: The right strategy to create significant value long-term
The right strategy to create significant value long-term INNOVATION Leverage a unique R&D and applicative know-how focused on megatrends BOLT-ON EMERGING ACQUISITIONS COUNTRIES Reinforce market positions Customer Entrepreneurial Operational Towards completely and enhance profile intimacy culture exc
Slide 25: Unique quality of projects to sustain growth
Unique quality of projects to sustain growth High Performance Industrial Specialties Coating Solutions Materials Thiochemicals: Acrylics: Technical Polymers: Platform under US$ 110m expansion x3 capacity of Hipro PA10 construction in Malaysia plan in the US and PVDF developments Fluorogases: Acquisi
Slide 26: Step-by-step transformation
Step-by-step transformation A world leader in specialty chemicals and advanced materials 2020 Acceleration of growth • Low GWP Fluorogases (1234yf, 1233zf) • Acquisitions in High 2016 Performance Materials and acrylics downstream Consolidation and • Acrylics in Clear Lake (US) • Innovation breakthro
Slide 27: Cash allocation over 2013 - 2016
Cash allocation over 2013 - 2016 Cash allocation Capex (€m) €1.7bn € 3.6 bn cash resources available Cumulative Borrowing Capex cash flow capacity from operating € 1.7 bn 450 activities M&A, 481 dividend and others 2013 2014e 2015e 2016e Cumulative €931m 2013 - 2016 € 1.9 bn M&A €350m JV in Acrylics
Slide 28: Thiochemicals platform in Asia
Thiochemicals platform in Asia Support fast growth of thiochemicals markets in Asia ● Traditional markets: oil (refining), gas, petrochemicals ● Animal nutrition (+7% / year expected growth in Asia): partnership with CJ CheilJedang for bio-methionine production Commercial start-up expected mid-2014
Slide 29: Hipro Polymers expansion in China
Hipro Polymers expansion in China Benefit in Asia from a regional production base in high performance polyamides for fast-growing applications (automotive, sport shoes, smartphones, etc.) Unique range of PA 10, 11 and 12 fully integrated from monomers to polymers x3 production capacity implemented i
Slide 30: Organic Peroxides in fast-growing countries
Organic Peroxides in fast-growing countries Very first plant* in Middle East ● Located on Al Jubail platform with several international petrochemical players ● Proximity with customers (improved responsiveness and safety of supply) ● Investment of US$ 30 m ● Expected start-up early 2015 x2 productio
Slide 31: Acquisition in acrylics in China
Acquisition in acrylics in China Creation of an acrylic acid manufacturing JV on the Taixing site with Jurong Chemical, the leader in acrylic monomers in China ~ US$ 600m expected FY sales contribution with 320 kt/year and EBITDA margin expected to be in line with Arkema’s mid-term targets Capture s
Slide 32: 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 33: Arkema Investor Relations
ARKEMA Investor Relations 420, rue d’Estienne d’Orves F-92705 Colombes Cedex