Arkema Sa · EURONEXT:AKE
Arkema Sa — Investor Day (September 2012)
42 slides from Arkema Sa's investor day presentation, Sep 18, 2012
Slide 1: Paris, France, September 18, 2012
PARIS, FRANCE SEPTEMBER 18, 2012
Slide 2: Ambition 2016
AMBITION 2016 Thierry LE HÉNAFF Chairman and CEO
Slide 3: Arkema key take-aways
Arkema key take-aways Strong portfolio of profitable niche chemical businesses Powerful operating model with superior track record of value creation Innovation pipeline and technology leadership combined with enhanced market-driven approach driving our margins up Selective and profitable growth ● Ta
Slide 4: From 2005 to 2012 Highly successful turnaround
From 2005 to 2012 Highly successful turnaround
Slide 5: Rapid and deep transformation executed
Rapid and deep transformation executed ● Positioned for profitable growth ● Business portfolio overhauled ● Profitability restored ● Global coating segment created ● High value performance materials ● Over € 500 m segment built fixed cost savings ● Sales in high growth countries ● Margin sustainably
Slide 6: More focused, more profitable, more resilient
More focused, more profitable, more resilient EBITDA (€m) Sales by segment Close to €1 bn 24% 33% 34% 355 67% 42% 2005 2012e 2005 2012e Vinyls Performance Products Industrial Chemicals Portfolio changes Sales by region Bolt-on Non-core acquisitions divestments 25% 34% €1.6 bn Sales Sales 57% 40% €1.
Slide 7: Very high return to shareholders
Very high return to shareholders 80 September 13, 2012 €72.6 Arkema +164% 60 Lanxess +111% BASF +105% 40 €27.5 Solvay +1% 20 CAC 40 -29% Clariant -38% 0 18/05/06 2007 2008 2009 2010 2011 2012 7
Slide 8: Entering a new phase of our development
Entering a new phase of our development A new corporate image A new signature 8
Slide 9: Innovative chemistry
INNOVATIVE “@& CHEMISTRY
Slide 10: Three new reporting segments
Three new reporting segments High Performance Materials Industrial Specialties Coating Solutions Solutions for decorative paints, World of high value and Global and integrated industrial coatings and innovative solutions industrial niches high-growth acrylic applications ● Specialty polyamides ● Thi
Slide 11: The new Arkema: well positioned for profitable growth
The new Arkema Well positioned for profitable growth
Slide 12: The new Arkema
The new Arkema Sales by segment Sales of €6.5 bn High 33% 34% Coating Performance Solutions Materials EBITDA close to €1bn 33% Industry-leading margin ~ 15% Industrial Specialties 14,000 employees in 40 countries Sales by region Strong balance sheet Europe 40% 34% North America 26% Asia and RoW 12
Slide 13: Strong profitability consistently developed
Strong profitability consistently developed Sales (€bn) EBITDA (€m) 5.9 €6.5 bn Close to 1,034 €1 bn 4.9 809 2010 2011 2012e 2010 2011 2012e Sales and EBITDA exclude the vinyl business divested beginning of July 2012 13
Slide 14: Strong competitive advantages
Strong competitive advantages Leading positions in specialty niches Global and balanced geographical coverage Interacting with the leaders (customers, suppliers, partners) Strong technology base ● Broad base of proprietary technologies ● Rich pipeline of innovation across businesses Ability to manag
Slide 15: Among top players on 90% of our sales
Among top players on 90% of our sales POSITION MARKET SIZE (mT) MAIN PLAYERS % GROUP SALES • Evonik #1 Specialty polyamides • Ems 0.2 14% #1 PVDF • Solvay • Akzo Nobel #2 Organic peroxides 0.2 • United Initiators 4% #1 Thiochemicals 0.7 • Chevron Phillips 9% • Dupont #1/2 Fluorogases 1.6 • Honeywell
Slide 16: Broad and balanced geographical reach
Broad and balanced geographical reach Europe 44 production sites 34% of sales 6 R&D centers 8,700 employees North America 40% of sales 26 production sites 2 R&D centers 2,800 employees 5% of sales 21% of sales RoW Asia 5 production sites 10 production sites 300 employees 2 R&D centers 2,200 employee
Slide 17: Diversified end markets with long term growth
Diversified end markets with long term growth Others 8% 22% Consumer goods Health, hygiene and beauty, Wellness, Sports and leisure, Packaging, Textile, etc. 16% Chemicals, plastics Water 3% Electronics 3% 13% Nutrition 4% Industrial coatings 6% Construction 6% 12% Energy 7% Decorative paints Transp
Slide 18: Innovation-driven culture
Innovation-driven culture Innovation at the heart ● Direct reporting of R&D to CEO of Arkema’s strategy ● 2/3 of R&D expenditure in sustainability / megatrends ● €350m new sales from R&D since spin off ● Core proprietary technologies in long chain polyamides, Unique acrylics, sulfur chemicals, fluor
Slide 19: Sustainability creates long term opportunities
Sustainability creates long term opportunities Wo r l d p o p u l a t i o n w i l l h i t 1 billion people do not have 9 billion in 2050 access to dri nki ng w ater World population (in bn) Access to drinking water % of population 9.3 80 6.8 60 2.5 40 1950 2010 2050 1950 2010 2050 Energy demand will
Slide 20: Arkema well positioned to benefit from megatrends
Arkema well positioned to benefit from megatrends POPULATION RENEWABLE NEW ENERGIES / LIGHTWEIGHT WATER TREATMENT GROWTH RAW MATERIALS ENERGY EFFICIENCY MATERIALS Coating Coating resins, Acrylics Acrylics solutions Coating additives ex-glycerol Glass PMMA PMMA Rnew® replacement Petrochemical Thioche
Slide 21: Major achievements of our innovation in sustainability
Major achievements of our innovation in sustainability Bio-sourced materials ● Rilsan® Clear, first bio-based transparent polyamide for glasses ● Pebax® Rnew, bio-sourced elastomers for sport shoes ● Announced first bio-methionine plant with CJ CheilJedang ● Patents developed on acrylic ex-glycerol
Slide 22: 2016 ambition: a world leader in specialty chemicals
2016 ambition A world leader in specialty chemicals and advanced materials
Slide 23: Our roadmap to 2016
Our roadmap to 2016 Deliver consistent profitable growth and solid cash flow Accelerate expansion in High Performance Materials through innovation in sustainability (oil and gas, automotive, new energies) and bolt-on acquisitions Broaden reach in higher growth countries beyond China Increase further
Slide 24: 2016 financial objectives
2016 financial objectives Profitable High Higher growth Acrylic Operational Market-driven growth Performance countries downstream excellence €8 bn 16% < 40% Sales EBITDA margin Gearing Organic High Performance growth + €0.9 bn Materials 18% Industrial M&A + €0.6 bn Specialties 17% Coating Solutions
Slide 25: Sales growth balanced between organic and acquisitions
Sales growth balanced between organic and acquisitions Profitable High Higher growth Acrylic Operational Market-driven growth Performance countries downstream excellence Sales (€bn) Acquisitions Divestments 8 Organic growth +1 6.5 (0.4) +0.9 ● Small to mid-size acquisitions ● Small non-core ● Innova
Slide 26: Differentiated approach to manage our portfolio
Differentiated approach to manage our portfolio HIGH GROWTH VALUE “BUILDING BLOCK” • Specialty polyamides ● High • Fluoropolymers ● Performance ● • Filtration and Adsorption Materials ● • Organic peroxides • Acrylics ● Coating • Coating resins ● Solutions • Coatex ● Secure competitive supply • UV cu
Slide 27: Contribution from organic growth well underway
Contribution from organic growth well underway Profitable High Higher growth Acrylic Operational Market-driven growth Performance countries downstream excellence Sales (€bn) Future M&A Announced or and started organic Divestment organic projects 8 projects projects 6.5 ● Project to divest ● Thiochem
Slide 28: Four transformational projects
Four transformational projects Thiochemicals Acrylic monomers in Malaysia in Clear Lake / Bayport €600 m sales First sulfur derivatives platform in Asia Capacity expansions in acrylic acid for animal nutrition and oil and gas and esters and site optimization EBITDA margin notably above Hipro-Casda i
Slide 29: Accelerate expansion in High Performance Materials
Accelerate expansion in High Performance Materials Profitable High Higher growth Acrylic Operational Market-driven growth Performance countries downstream excellence Sales by segment €8bn €6.5bn 38% + €0.9bn High Performance Materials 33% 30% Industrial Specialties 33% Coating Solutions 34% 32% 2012
Slide 30: Sales growth of 40% in High Performance Materials
Sales growth of 40% in High Performance Materials Profitable High Higher growth Acrylic Operational Market-driven growth Performance countries downstream excellence Polymer pyramid Arkema focused on the high end of the range Balance between organic developments and bolt-on acquisitions Leverage mega
Slide 31: Expansion in higher growth countries
Expansion in higher growth countries Profitable High Higher growth Acrylic Operational Market-driven growth Performance countries downstream excellence Sales by region €8bn €6.5bn 30% + €0.7bn Asia and RoW 26% 35% North America 34% Europe 40% 35% 2012e 2016e 31
Slide 32: Differentiated development pace across regions
Differentiated development pace across regions Profitable High Higher growth Acrylic Operational Market-driven growth Performance countries downstream excellence North America Europe Higher growth countries 3.3 Asia, South America, Middle-East Sales (€bn) 2.8 2.8 2.6 2.4 2.2 1.7 1.5 0.9 2005 Current
Slide 33: Increase further acrylic downstream integration
Increase further acrylic downstream integration Profitable High Higher growth Acrylic Operational Market-driven growth Performance countries downstream excellence Acrylic monomers (“building block”) = Secure competitive supply Rheology Super Water Oil & gas UV curing Coatings additives Coating resin
Slide 34: Enhance market-driven approach
Enhance market-driven approach Profitable High Higher growth Acrylic Operational Market-driven growth Performance countries downstream excellence Acceleration of market-driven initiatives beyond traditional product / technology approach Mix shift driven by specialty applications High performance Mob
Slide 35: Reinforce operational excellence
Reinforce operational excellence Profitable High Higher growth Acrylic Operational Market-driven growth Performance countries downstream excellence Ensure top quartile manufacturing performance Clear Lake (Acrylics) of the major manufacturing sites Significant further potential in variable cost opti
Slide 36: Dividend increase reflects confidence in our long term prospects
Dividend increase reflects confidence in our long term prospects Dividend (€/share) 1.3 1.3 Reminder of Arkema general policy 1.0 “Arkema intends to pay a stable to reasonably rising dividend each year” 0.75 0.6 0.6 Arkema targets a 30% payout ratio on adjusted net income For 2012, dividend per shar
Slide 37: Looking ahead
INVESTOR ails Looking ahead INNovaTive WA CHEMISTRY
Slide 38: Strong confidence in our long term potential
Strong confidence in our long term potential Several major current projects will start delivering only full speed after 2016 ● Thiochemicals in Malaysia ● PVDF expansion in Pierre-Bénite ● Ramp-up of Clear Lake expansion in acrylic Other long term thoughts could materialize over 2016-2020 ● Acrylic
Slide 39: Main objectives 2020
Main objectives 2020 EBITDA and EBITDA margin (%) Sales (€bn) Close to 16% 17% ~15% 10 8 6.5 6% 5.7 2005 2012e 2016e 2020e 2005 2012e 2016e 2020e Gearing < 40% 39
Slide 40: Key drivers of future evolution
Key drivers of future evolution Sales by segment Sales by region Coating Solutions North High Europe America Performance Materials Industrial Specialties Asia and RoW Continue to drive High Performance Materials Balanced geographical reach between growth with innovation Europe, North America and res
Slide 41: Conclusion
Conclusion High quality portfolio of profitable niches Strong competitive advantages ensuring value creation over the long term Superior track record of consistently delivering Clear roadmap for selective and profitable growth Ambitious targets confirming long term potential Dividend increase reflec
Slide 42: 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