Arkema Sa · EURONEXT:AKE
Arkema Sa — Shareholder Meeting (May 2021)
55 slides from Arkema Sa's shareholder meeting presentation, May 20, 2021
Slide 1: 2021 Annual General Meeting
2021 ANNUAL GENERAL MEETING 20 May 2021
Slide 2: 2020 Performance
2020 PERFORMANCE
Slide 3: Arkema in a nutshell
ARKEMA IN A NUTSHELL 2020 PERFORMANCE 20,600 €7.9 bn 147 3 employees sales industrial sites regional R&D hubs 55 15.0 % €600 m €241 m countries EBITDA margin capital expenditure (1) R&D costs (1) Recurring and exceptional 3 2021 General Meeting
Slide 4: A balanced portfolio focused on specialty materials
A BALANCED PORTFOLIO FOCUSED ON SPECIALTY MATERIALS 2020 PERFORMANCE BY SEGMENT BY REGION 82% 33% Specialty 32% Materials 24.5% €7.9 bn 36% 25.5% 27% 18% 4% Advanced Materials Adhesive Solutions Europe North America Coating Solutions Intermediates Asia Rest of the world 4 2021 General Meeting
Slide 5: Attractive and diversified end-markets
ATTRACTIVE AND DIVERSIFIED END-MARKETS 2020 PERFORMANCE General Paints and Nutrition Electronics industry coatings and water and energy 27 % 17 % 8% 6% 18 % 17 % 7% Buildings and Consumer goods Automotive and construction transportation 5 2021 General Meeting
Slide 6: A robust financial performance given the Covid-19 context
A ROBUST FINANCIAL PERFORMANCE GIVEN THE COVID-19 CONTEXT 2020 PERFORMANCE Relativ e to 2019 Relativ e to 2019 Specialty Materials -12% Volumes -4.3% Intermediates -39% 1,474 1,457 1,391 8.8 8.7 8.3 7.9 1,182 2017 2018 2019 2020 2017 2018 2019 2020 Sales (€bn) EBITDA (€m) 6 2021 General Meeting
Slide 7: Excellent cash flow generation
EXCELLENT CASH FLOW GENERATION 2020 PERFORMANCE FREE CASH FLOW NET DEBT* €651 m €1.9 bn 67% EBITDA to cash 1.6x EBITDA conversion rate * Including hybrid bonds (€700m) 7 2021 General Meeting
Slide 8: Strong commitment from our teams
STRONG COMMITMENT FROM OUR TEAMS 2020 PERFORMANCE Rapid roll-out of preventive measures in the context of Covid-19 A TRIR among the best in the industry • employee safety • continuity of our operations and supply to our customers 1.6 1.3 1.4 • >€100m reduction in operating expenses vs. 1.0 initial b
Slide 9: Continuous progress of non-financial performance
CONTINUOUS PROGRESS OF NON-FINANCIAL PERFORMANCE 2020 PERFORMANCE CLIMATE AND ENVIRONMENT 1 GHG Energy VOC COD -23% -10% -42% -55% Joined in 6th place the DJSI World in 2020 2015 2019 2020 2012 2019 2020 2012 2019 2020 2012 2019 2020 DIVERSITY Member of the Share in senior Non-French CAC 40 ESG Wome
Slide 10: High shareholder return
HIGH SHAREHOLDER RETURN 2020 PERFORMANCE Return of the dividend to pre-Covid level Proposal submitted to the v ote of today’s 2.50 2.50 General Meeting 2.30 2.20 Payout ratio 49% Yield 2.7% 2017 2018 2019 2020 Share buybacks in 2021 €300m share buyback program following the Dividend div estment of P
Slide 11: Evolution of the share price since January 2020
EVOLUTION OF THE SHARE PRICE SINCE 1 JANUARY 2020 2020 PERFORMANCE Arkema : - 1.3% since May 2006 (with reintegrated dividends) CAC 40 : - 7.1% 94.70 More than X4.8 Arkema : + 15.6% CAC 40 : + 15.0% around X2.2 2020 2021 14/05/2021 11 2021 General Meeting
Slide 12: 2020 Highlights
ay 2020 HIGHLIGHTS Y
Slide 13: Bolt-on acquisitions in adhesives (1/2)
BOLT-ON ACQUISITIONS IN ADHESIVES (1/2) 2020 HIGHLIGHTS Construction Danish leader in tile adhesives, waterproofing systems and floor preparation solutions Italian company specialized in high-end decorative flooring technologies Brazilian leader in hybrid-technology sealants and adhesives 13 2021 Ge
Slide 14: Bolt-on acquisitions in adhesives (2/2)
BOLT-ON ACQUISITIONS IN ADHESIVES (2/2) 2020 HIGHLIGHTS Industrial Adhesives Company specialized in thermobonding adhesive powders Crackless Development and production of very Monomer high-performance adhesives Company 14 2021 General Meeting
Slide 15: Transformative divestments in Intermediates
TRANSFORMATIVE DIVESTMENTS IN INTERMEDIATES 2020 HIGHLIGHTS Divestment of the PMMA business to Trinseo on 3 May 2021 The offer values the business at €1,137m, i.e. 9.3x estimated 2020 EBITDA Divestment of Functional Polyolefins to SK Global Chemical on 1 June 2020 Based on an enterprise value of €33
Slide 16: Launch of new product ranges in adhesives
LAUNCH OF NEW PRODUCT RANGES IN ADHESIVES 2020 HIGHLIGHTS DIY WALL AND FLOORING SEALANTS Purefix « One floor » New PU range Construction Industrial Adhesives ENGINEERING ADHESIVES HYGIENE Born2Bond ™ Brilliance™ 16 2021 General Meeting
Slide 17: Strong new business dynamic in Advanced Materials
STRONG NEW BUSINESS DYNAMIC IN ADVANCED MATERIALS 2020 HIGHLIGHTS Innovation Greater demand for 3D printing Clean mobility In sports bio-based products in healthcare Thermal management Lightweight, high- Glasses, toys Orthotics, swabs, and batteries in electric performance shoes Bio-fuel orthopaedic
Slide 18: Acceleration of Coating Solutions in 3D printing
ACCELERATION OF COATING SOLUTIONS IN 3D PRINTING 2020 HIGHLIGHTS Partnerships Acquisition Continuous Composites Adaptive3D Colorado Photopolymer Solutions CF3D® innov ative continuous fiber High-end photocure resins range Specialized in the formulation composite 3D printing technology for additiv e
Slide 19: Industrial start-ups to support our sustainable growth
INDUSTRIAL START-UPS TO SUPPORT OUR SUSTAINABLE GROWTH 2020 HIGHLIGHTS Polyamide 12 PVDF Changshu, China Changshu, China Materials lightweighting in Li-ion batteries automotiv e, sports, electronics… Thiochemicals Adhesives Kerteh, Malaysia Nara, Japan Animal nutrition, refining Hygiene, packaging,
Slide 20: New developments in the field of CSR
NEW DEVELOPMENTS IN THE FIELD OF CSR 2020 HIGHLIGHTS New ambitious CSR Member of the 2020 FORBES ranking targets WBCSD « best employers » across our whole value chain Pragati initiative ZEBRA project Social actions 1st 100 % recyclable in the context of the pandemic wind turbine blade 20 2021 Genera
Slide 21: Strengthened commercial excellence initiatives
STRENGTHENED COMMERCIAL EXCELLENCE INITIATIVES 2020 HIGHLIGHTS Customer Relationship Management ‘Sales Academy’ 84 % collaborativ e tool satisfied or Of customers extremely satisfied First global cust omer satisfaction survey carried out in February 2020 Network of global key Targeted commercial acc
Slide 22: Competitive and expanded digital tools
COMPETITIVE AND EXPANDED DIGITAL TOOLS 2020 HIGHLIGHTS ‘Bostik Academy’ Redesign of Bostik’s platform dedicated and Arkema’s websites to construction professionals « Travailler Ensemble, Optimization of Training modules Travailler malin » our customers’ that use augmented operations Program which re
Slide 23: Financial performance
FINANCIAL PERFORMANCE
Slide 24: 2020 key figures
2020 KEY FIGURES FINANCIAL PERFORMANCE Sales EBITDA €7,884 m €1,182 m Volumes -4.3% vs. 2019 15.0 % EBITDA margin Adj. net income Net debt €391 m €1,910 m €5.11 per share 1.6x EBITDA 24 2021 General Meeting
Slide 25: Adhesive Solutions segment
ADHESIVE SOLUTIONS SEGMENT FINANCIAL PERFORMANCE 25.5% OF 2020 GROUP SALES Key figures in €m 2019 2020 YoY change Sales 2,055 1,996 -2.9% EBITDA 264 261 -1.1% EBITDA margin 12.9% 13.1% • Very solid performance in the year with an EBITDA broadly stable relativ e to 2019 • EBITDA margin up 0.2 points
Slide 26: Advanced Materials segment
ADVANCED MATERIALS SEGMENT FINANCIAL PERFORMANCE 32% OF 2020 GROUP SALES Key figures in €m 2019 2020 YoY change Sales 2,693 2,527 -6.2% EBITDA 584 496 -15.1% EBITDA margin 21.7% 19.6% • Performance impacted mainly by lower v olumes, with a clear improv ement in the 4th quarter and strong growth in b
Slide 27: Coating Solutions segment
COATING SOLUTIONS SEGMENT FINANCIAL PERFORMANCE 24.5% OF 2020 GROUP SALES Key figures in €m 2019 2020 YoY change Sales 2,148 1,911 -11.0% EBITDA 310 261 -15.8% EBITDA margin 14.4% 13.7% • Results impacted by acrylics activ ities that are not integrated downstream • Solid performance of integrated ac
Slide 28: Intermediates segment
INTERMEDIATES SEGMENT FINANCIAL PERFORMANCE 18% OF 2020 GROUP SALES Key figures in €m 2019 2020 YoY change Sales 1,816 1,425 -21.5% EBITDA 381 231 -39.4% EBITDA margin 21.0% 16.2% • Significant EBITDA decline impacted by more challenging market conditions, in particular in Fluorogases • Effect of th
Slide 29: Excellent cash flow generation
EXCELLENT CASH FLOW GENERATION FINANCIAL PERFORMANCE in €m 667 651 EBITDA to cash conversion rate 499 Record lev el of 67% Strict working capital management 11.8% of sales at end-December Recurring and exceptional capital expenditure 2018 2019 2020 €600 m (-€100 m vs initial budget) Free cash flow 2
Slide 30: Well established financial resources
WELL ESTABLISHED FINANCIAL RESOURCES FINANCIAL PERFORMANCE in €m 1,000 Refinancing under favorable 900 conditions 1.5% average maturity of 5.6 years 700 1.5% 500 First-ever issuance of a green bond 400 0.75% with a 6-year maturity for €300 m 2.75% 300 300 (Singapore factory) 1.5% 150 0.125% 3.125% S
Slide 31: Strong growth in first-quarter 2021
STRONG GROWTH IN FIRST-QUARTER 2021 FINANCIAL PERFORMANCE Sales EBITDA €2,226 m €358 m +12.7% in organic terms vs. 1Q’20 16.1% EBITDA margin Adj. net income Net debt €159 m €2,002 m €2.08 per share 1.6x EBITDA 31 2021 General Meeting
Slide 32: Financial resolutions
FINANCIAL RESOLUTIONS FINANCIAL PERFORMANCE • Approval of the parent company and consolidated financial statements for 2020 • 1st and 2nd resolutions • Renewal of the share buyback authorization : 2021 program • 12th resolution (Duration : 18 months) • Ceiling: 10% of the Company’s share capital for
Slide 33: 2024 Ambition
2024 AMBITION
Slide 34: Our ambition by 2024
OUR AMBITION BY 2024 2024 AMBITION BECOME A SUSTAINABLE AND HIGH-PERFORMANCE SPECIALTY MATERIALS LEADER Sales of €10 to 11 bn Cash generation > 40% Deconsolidation EBITDA margin of of the 17% Intermediates segment Strict financial discipline Organic growth 3 to 3.5% / year 34 2021 General Meeting
Slide 35: Act for the climate and the environment
ACT FOR THE CLIMATE AND THE ENVIRONMENT 2024 AMBITION Climate - 38% Absolute greenhouse gas emissions vs 2015 1 BY 2030 Continuous improvement Policy to optimize Commitment from our suppliers and innovation in energy efficiency and purchase with regards to the reduction manufacturing processes energ
Slide 36: Even more ambitious new CSR targets
EVEN MORE AMBITIOUS NEW CSR TARGETS 2024 AMBITION Sustainable offering of sales that significantly contribute to Sustainable 65% Development Goals BY 2030 Systematic assessment of our 5 innovation R&D platforms that Transition towards solutions in light of meet social challenges a circular economy s
Slide 37: The circular economy as a priority area
THE CIRCULAR ECONOMY AS A PRIORITY AREA 2024 AMBITION Maximize the use of renewable and/or recycled materials and packaging Detergents go green MATERIALS Sensio™ surfactants Usine Nouvelle award Maintain products and materials in the use-loop Virtucycle® IMPLEMENTATION MEASUREMENT recycling programm
Slide 38: Sustainable innovation, our growth driver
SUSTAINABLE INNOVATION, OUR GROWTH DRIVER 2024 AMBITION 5 R&D PLATFORMS FOCUSED ON MEGATRENDS NEW Lightweight materials and design New energies OUR SUSTAINABLE INNOVATION DYNAMIC SHOULD ENABLE US TO GENERATE €400 m OF ADDITIONAL SALES IN 2024 AND UP TO €1 bn IN 2030 Natural resources Electronics Hom
Slide 39: Continued growth in adhesives through innovation and acquisitions
CONTINUED GROWTH IN ADHESIVES THROUGH INNOVATION 2024 AMBITION AND ACQUISITIONS 3 MAJOR ACQUISITIONS High single-digit average Number 3 globally in adhesives Flooring adhesives (US) annual growth in 2020-2024 and sealants EV : $205 m EV : €1.7 bn 2016 1/3 organic 2015 High performance 2018 2/3 acqui
Slide 40: A major player in Li-ion batteries
A MAJOR PLAYER IN LI-ION BATTERIES 2024 AMBITION The lithium-ion batteries market Our innovative solutions Major player in PVDF for cathode and separator Electric vehicles 30+% / year in 2019-2024 1 Polyamides and composites to optimize the weight and heat of the battery pack Continuous innovation O
Slide 41: Strong potential in hydrogen mobility
STRONG POTENTIAL IN HYDROGEN MOBILITY 2024 AMBITION MOBILITY H2 PRODUCTION CARS AND TRUCKS Composites and liners for tanks (types IV and V) Coating and membrane for fuel cells ELECTROLYSERS FUELLING STATION Membranes Composite Tapes for tanks (delivery and storage) 41 2021 General Meeting
Slide 42: Breakthrough innovations in sports
BREAKTHROUGH INNOVATIONS IN SPORTS 2024 AMBITION Optimal protection 100% recyclable and bio-based Cyclon shoes from Picture Organic Clothing On Running waterproof and breathable Manufactured entirely from jacket recylable polyamide 11 Apparel membrane made from bio-based Pebax® Rnew ® material Among
Slide 43: In Singapore, the biggest advanced materials bio-factory in the world
IN SINGAPORE, THE BIGGEST ADVANCED MATERIALS BIO-FACTORY 2024 AMBITION IN THE WORLD Jurong Island site in Singapore Innovative high performance solutions in attractive and growing markets 3D printing Sports Clean mobility Bio-based textile Start-up expected in 1st half 2022 €300 m green bond Consume
Slide 44: Innovative partnership to supply hydrofluoric acid in the United States
INNOVATIVE PARTNERSHIP TO SUPPLY HYDROFLUORIC ACID IN 2024 AMBITION THE UNITED STATES New production process, much more Batteries environmentally friendly than the traditional process Secure and competitive access to hydrofluoric acid in the United States Water treatment 50% dedicated to polymers an
Slide 45: Governance
GOVERNANCE
Slide 46: The Board of Directors and its committees: activity in 2020
THE BOARD OF DIRECTORS AND ITS COMMITTEES : ACTIVITY IN 2020 GOVERNANCE BOARD OF DIRECTORS SPECIALIZED COMMITTEES 12 meetings AUDIT AND ACCOUNTS COMMITTEE 1 annual workshop dedicated to strategy 6 meetings 95 % attendance rate despite the Covid-19 100 % attendance rate context SENIOR INDEPENDENT DIR
Slide 47: The Board of Directors: specific topics in 2020
THE BOARD OF DIRECTORS : SPECIFIC TOPICS IN 2020 GOVERNANCE • Monitoring the management and consequences of the health crisis linked to Covid-19 • Arkema’s ambition to become a global Specialty Materials leader and determining the 2024 strategy and targets • M&A transactions including the signing of
Slide 48: The Board of Directors: composition
THE BOARD OF DIRECTORS : COMPOSITION GOVERNANCE AN EXPERIENCED AND 1 director representing DIVERSIFIED BOARD shareholder employees 14 2 directors representing skills : chemicals, CSR, finance, general management, M&A, and digital members employees 1 senior independent director multicultural : signif
Slide 49: Evolution of the Board: appointments proposed to the AGM
EVOLUTION OF THE BOARD OF DIRECTORS : GOVERNANCE APPOINTMENTS PROPOSED TO THE ANNUAL GENERAL MEETING Thierry PILENKO Ilse HENNE Management consultant and director of international Chief Transformation Officer and member of the Executive companies in the energy sector committee of Thyssenkrupp’s Mate
Slide 50: Evolution of committees and their composition
EVOLUTION OF COMMITTEES AND THEIR COMPOSITION AS FROM GOVERNANCE THE ANNUAL GENERAL MEETING INNOVATION AND SUSTAINABLE GROWTH COMMITTEE AUDIT AND ACCOUNTS COMMITTEE New committee responsible for assessing the contribution of • Marie-Ange Debon – Chairman innovation and Arkema’s strategy to environme
Slide 51: The Board of Directors at the close of the AGM
THE BOARD OF DIRECTORS AT THE CLOSE OF THE ANNUAL GENERAL GOVERNANCE MEETING BOARD OF DIRECTORS 4 MEMBERS 75% Independent chairman Independance rate 3 directors of foreign nationality 4 MEMBERS 14 1 Independent chairman directors director residing in Senior independent director 100% Independence rat
Slide 52: Directors' compensation policy for 2021 and compensation paid in 2020
DIRECTORS’ COMPENSATION POLICY FOR 2021 AND COMPENSATION GOVERNANCE PAID IN 2020 • Maintaining the distribution modalities approved by the General Meeting in 2020 for 4 years (8th resolution) Senior Board of Directors Committees independent director Member Chairmanship Fixed portion €25,000 no chang
Slide 53: Compensation policy for the Chairman and CEO (9th resolution)
COMPENSATION POLICY FOR THE CHAIRMAN AND CEO GOVERNANCE (9TH RESOLUTION) • Compensation policy very largely approved by the General Meeting of 19 May 2020 for 4 years Fixed Variable compensation Performance shares Other components compensation Set in 2020 (for 4 target 120% 30,000 shares Pension ben
Slide 54: Elements of the Chairman and CEO's compensation for 2020
ELEMENTS OF THE CHAIRMAN AND CEO’S COMPENSATION FOR GOVERNANCE 2020 SUBJECT TO APPROVAL (11TH RESOLUTION) AMOUNT DESCRIPTION • Decision of the Board of Directors upon proposal by Thierry Le Hénaff to postpone the Fixed compensation €900,000 effective date of the new amount of €1,000 K approved by th
Slide 55: 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. In the current context, where the Covid-19 epidemic persists across the world, and the evolution of the situat