Slide 1: Second-quarter 2022 results and outlook
Second-quarter 2022 results and outlook
Slide 2: Excellent financial results & raised guidance for 2022
Excellent financial results & raised guidance for 2022 Q2 results and outlook - 29 July 2022 2
Slide 3: Strong Q2'22 results in an atypical global environment
Strong Q2’22 results in an atypical global environment Sales EBITDA €3,184m €705m +23.2% vs Q2’21 +47.5% vs Q2’21 At constant scope Record level and currency EBITDA margin Recurring cash flow 22.1% €235 m +210 bps vs Q2’21 Net debt at 1,3x LTM EBITDA Q2 results and outlook - 29 July 2022 3
Slide 4: Q2'22 financial highlights
Q2’22 financial highlights → Up 23.2% vs Q2'21 at constant scope and currency • Benefits of new business developments in high value-added sustainable solutions • Selling price adjustments in the face of very significant raw materials, energy €3,184m sales and transportation cost inflation • Slight d
Slide 5: Excellent results reflecting strength of the Specialty Materials segments
Excellent results reflecting strength of the 3 Specialty Materials segments 705 619 35% 478 358 Specialty €3,184m Materials 30% 21.4% 22.1% 90.0% Q2’22 sales 20.0% 16.1% 25% 10% Q1 2021 Q1 2022 Q2 2021 Q2 2022 Adhesive Solutions Coating Solutions Advanced Materials Intermediates EBITDA (€m) EBITDA m
Slide 6: Outlook
Outlook → Second half marked by a context of risks of lockdowns in China, geopolitical tensions linked to the war in Ukraine, concerns regarding the availability and price of natural gas and electricity in Europe, as well as the significant increase in the level of inflation, which are all factors t
Slide 7: Seamless execution of the strategy
Seamless execution of the strategy Q2 results and outlook - 29 July 2022 7
Slide 8: Significant progress in our strategic roadmap
Significant progress in our strategic roadmap Sustainable Organic growth Bolt-on acquisitions CSR innovation Strengthening of CS Upcoming start-ups of our downstream with two major projects Polimeros Especiales New strategic acquisition New, more ambitious partnership climate plan in EV batteries Hi
Slide 9: New strategic partnership in EV batteries
New strategic partnership in EV batteries Ultrapure LiFSI electrolyte salts production Recent partnerships with Nippon Shokubai → Key component of car battery cells Equity investment (production of • Power, stability, cycle life high performance and recyclability enhancement batteries) • Next genera
Slide 10: High value-added acquisition reinforcing the downstream of CS segment
High value-added acquisition reinforcing the downstream of CS segment Polimeros Especiales SA (Mexico) Leading player in solvent-free waterborne acrylic resins Waterborne is one of Arkema’s key-solvent free technologies together with powder resins, as well as UV/LED/EB and high-solid systems → ~US$4
Slide 11: Integration of recent acquisitions strengthening Adhesive Solutions
Integration of recent acquisitions strengthening Adhesive Solutions Ashland Performance Adhesives Permoseal (South Africa) → Adhesive solutions for DIY, packaging and construction → €43m sales in 2021 → Finalized on 1 July 2022 → First-class leader in high performance adhesives in the United States
Slide 12: Upcoming start-ups of our two major projects
Upcoming start-ups of our two major projects Rilsan® polyamide 11 Hydrofluoric acid +50% global capacity in Singapore 40 kT/year supply in partnership with Nutrien in Aurora, US New PA11 powder resins capacity in Changshu, China (1Q’23) US$150 m investment €450 m Capex and €100 m EBITDA at maturity
Slide 13: Ongoing high return expansions to capture sustainable growth
Ongoing high return expansions to capture sustainable growth Bio-based, renewable Kynar® PVDF Forane® Sartomer® Pebax® Recyclable +50% capacity in 15 kt/yr 1233zd +100% photocure +25% global capacity Changshu, CN (end-2022) capacity in Calvert resins capacity in in Serquigny, FR City, US (end-2023)
Slide 14: A new, more ambitious climate plan
A new, more ambitious climate plan Scopes 1+2 Scope 3 1.5°C trajectory (Mt CO2 eq.) (Mt CO2 eq.) across the full value chain → Replacing previous commitment -46% of a well below 2°C trajectory on scopes 1+2 in 2030 vs 2019 → Science Based Target approach 6.5 → Commitment across full value chain 4.7
Slide 15: Detailed Q2 results
Detailed Q2 results Q2 results and outlook - 29 July 2022 15
Slide 16: Ongoing price increases in a highly inflationary environment
Ongoing price increases in a highly inflationary environment Sales in €million +1.6% +8.1% +28.5% Integration of Ashland Stronger US Performance dollar and Adhesives, Edge -5.3% Chinese Yuan Adhesives Texas, against euro Agiplast and PMP PMMA disposal on 3 May 2021 and Positive growth in Selling pri
Slide 17: Adhesive Solutions (25% of Group sales in Q2'22)
Adhesive Solutions (25% of Group sales in Q2’22) Key figures Highlights Q2’22 in €m Q2’22 Q2’21 Change H1’22 H1’21 Change Sales 779 575 +35.5% 1,449 1,130 +28.2% → Sharp price effect at +17.4% YoY, in response to very elevated inflation of raw materials, EBITDA 111 82 +35.4% 201 168 +19,6% energy an
Slide 18: Advanced Materials (35% of Group sales in Q2'22)
Advanced Materials (35% of Group sales in Q2’22) Key figures Highlights Q2’22 in €m Q2’22 Q2’21 * Change H1’22 H1’21 * Change → Prices up 38.4% YoY, highly positive Sales 1,113 785 +41.8% 2,188 1,537 +42.4% in both Business Lines • Selling price increases in a highly inflationary EBITDA 282 184 +53.
Slide 19: Coating Solutions (30% of Group sales in Q2'22)
Coating Solutions (30% of Group sales in Q2’22) Key figures Highlights Q2’22 in €m Q2’22 Q2’21 Change H1’22 H1’21 Change Sales 960 712 +34.8% 1,822 1,279 +42.5% → +26.7% price effect in a still highly inflationary environment EBITDA 207 157 +31.8% 399 235 +69.8% • Price increases for downstream prod
Slide 20: Intermediates (10% of Group sales in Q2'22)
Intermediates (10% of Group sales in Q2’22) Key figures Highlights Q2’22 in €m Q2’22 Q2’21 * Change H1’22 H1’21 * Change Sales 322 315 +2.2% 593 661 -10.3% → Scope effect of -18.4% related to residual impact of PMMA divestment in May 2021 EBITDA 129 81 +59.3% 223 156 +42.9% EBITDA margin 40.1% 25.7%
Slide 21: Key figures
Key figures in €million Q2’22 Q2’21 * Change H1’22 H1’21 * Change Sales 3,184 2,395 +32.9% 6,071 4,621 +31.4% EBITDA 705 478 +47.5% 1,324 836 +58.4% Specialty Materials 600 423 +41.8% 1,156 729 +58.6% Intermediates 129 81 +59.3% 223 156 +42.9% Corporate -24 -26 -55 -49 EBITDA margin 22.1% 20.0% 21.8
Slide 22: Cash flow
Cash flow in €million → Q2’22 tax rate Reconciliation of EBITDA to net cash flow 21% of REBIT (excl. exceptional items) Q2’22 Q2’21 H1’22 H1’21 EBITDA 705 478 1,324 836 → Working capital Current taxes -117 -68 -218 -117 • Seasonal volume increase Cost of debt -13 -14 -26 -27 • Higher selling prices
Slide 23: Net debt evolution (including hybrid bonds)
Net debt evolution (including hybrid bonds) in €million 1.3x LTM EBITDA 227 66 2,789 1,507 Dividend : €222m Hybrid bonds: €5m 1,177 -261 73 Ashland Performance Adhesives acquisition 31/12/2021 Rec. cash Exceptional M&A Dividends & FX and 30/06/2022 flow items Hybrid bonds others Q2 results and outlo
Slide 24: 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 where the consequences of t