Arkema Sa · EURONEXT:AKE
Arkema Sa — Exane BNP Paribas 24th European CEO Conference 2022
34 slides from Arkema Sa's conference presentation, Jun 15, 2022
Slide 1: Exane BNP Paribas 24th European CEO Conference
Thierry Le Hénaff Chairman and CEO EXANE BNP PARIBAS 24th EUROPEAN CEO CONFERENCE 15 June 2022 - Paris, FRANCE
Slide 2: Arkema in a snapshot
Arkema in a snapshot EXANE BNP PARIBAS 24th European CEO conference - June 2022 2
Slide 3: Arkema at a glance (2021)
24.5% Arkema at a glance (2021) 4% 31% 17% 32.5% 20% Specialty Materials 27% 85.5% 29% 15% Close to 90% Segments Markets Regions 36% pro forma 2021* 36% 29% 8% 28% 24% 14.5% 7% 5% 4% Adhesive Solutions Coating Solutions Industry Paints & Coatings Europe Asia Advanced Materials Intermediates Building
Slide 4: Excellent 2021 financial performance in a demanding context
Excellent 2021 financial performance in a demanding context Covid 9.5 1,727 context 8.8 8.7 Covid 7.9 1,474 1,457 context 1,182 18.1% 16.7% 16.7% 15.0% 2018 2019 2020 2021 2018 2019 2020 2021 Sales (€bn) EBITDA (€m) EBITDA margin (%) EXANE BNP PARIBAS 24th European CEO conference - June 2022 4
Slide 5: Strong cash generation
Strong cash generation 786 762 756 → EBITDA to cash conversion rate 604 43.8% in 2021 593 In line with the long-term target of 40% → Tightly controlled working capital 12.7% of sales at end-December 2021 → Recurring capital expenditure €506 m in 2021 2017 2018 2019 2020 2021 Excluding the 2 major pr
Slide 6: Well-established financial resources
Well-established financial resources in €m 1,000 → Average maturity 4.6 years 900 1.5% 700 1.5% → RCF 500 One year extension to July 2024 400 Integration of 3 CSR criteria 0.75% 2.75% 300 300 0.125% 1.5% 150 3.125% → Solid credit rating maintained 2023 2024 2025 2026 2027 2028 2029 BBB+ stable outlo
Slide 7: Continued progress in CSR
Continued progress in CSR → Best-in-class safety level → Significant progress in in the industry our Climate plan accident per million hours greenhouse gas emissions 1.0 worked (TRIR) -34% versus 2015 1.0 in 2020 -23% in 2020 → Reinforced actions in → Continued strengthening process safety of divers
Slide 8: Recognized non-financial performance
Recognized non-financial performance Superior percentile → 3rd place in DJSI World 2021 across all sectors « Chemicals » category Score : 67 CSA score by S&P Global : 82 Rating : A 1st decile (global) (Sept 2021) B for climate change CAC 40® ESG Among the best Inclusion in the new Euronext index per
Slide 9: Strong value creation for shareholders
Strong value creation for shareholders → Gradual increase in the dividend → €300m share buyback program finalized in November 2021 2.2 3.0 → Share capital reduction of 3.2% by 2.3 2.5 Covid 2.5 cancelling shares in January 2022 context 2017 2018 2019 2020 2021 Dividend (in €/share) per fiscal year E
Slide 10: Share price evolution since 1st January 2021
Share price evolution since 1st January 2021 2021 2022 Arkema CAC 40 Peers (1) Arkema : +32.5% CAC 40 : +28.9% Peers (1) : +15.0% Arkema : -6.1% CAC 40 : -9.3% Peers (1) : -14.9% 1. The peer group includes : Solvay, BASF, Lanxess, Clariant, Sika, Evonik, HB Fuller and the MSCI Europe index EXANE BNP
Slide 11: Strategy and ambition
Strategy and ambition EXANE BNP PARIBAS 24th European CEO conference - June 2022 11
Slide 12: Our 2024 ambition
Our 2024 ambition A Specialty Materials leader Sales of €10 to 11 bn Cash generation > 40% EBITDA margin of Deconsolidation of Strict financial discipline the Intermediates 17% → Net debt (incl. hybrid bonds) segment on EBITDA ratio <2x Organic growth → Solide investment grade rating 3 to 3.5% / yea
Slide 13: Innovative materials for a sustainable world
Innovative materials for a sustainable world Adhesive Solutions Coating Resins Advanced Coating Materials Solutions EXANE BNP PARIBAS 24th European CEO conference - June 2022 13
Slide 14: A strategy supported by 4 levers
A strategy supported by 4 levers Strengthen Rank among the Specialty Materials best-in-class with bolt-on chemicals acquisitions companies in terms of CSR Accelerate Pursue organic growth operational and and sustainable commercial innovation excellence initiatives EXANE BNP PARIBAS 24th European CEO
Slide 15: Expanding opportunities from our sustainability-driven innovation
Expanding opportunities from our sustainability-driven innovation New energies Lightweight materials Living comfort Natural resources Electronics solutions and clean mobility and design and home efficiency and circular economy We expect to generate €1.5 bn H2 of additional sales by 2030* Battery Hyd
Slide 16: Strong growth potential in clean mobility
Strong growth potential in clean mobility Batteries Cathode and separators Electrolyte salts €1 bn Battery pack Cooling line sales in batteries by 2030 Cell assembly Sensors New centre Hydrogen of excellence in Pierre-Bénite, FR A more recent roll-out Partnerships with with significant growth new pl
Slide 17: Increased demand for sustainable lifestyle products
Increased demand for sustainable lifestyle products Consumer goods Customizable & bio-based eyeglass frames Bio-based, recyclable toys >20% CAGR 2020-2025 * Technical bio-based textile * Source: Arkema’s demand growth estimation High performance sports 100% recyclable running shoes High energy retur
Slide 18: Extended range of products for living comfort and home efficiency
Extended range of products for living comfort and home efficiency Bio-based Low VOC Kynar Cool roofs, eco-friendly Aquatec® alternative to air-conditioning Siliporite® High thermal insulation double gazing for windows Forane® Highly insulated 1233zd foam panels Bostik “Free from toxic” solutions adh
Slide 19: Major 100% bio-based polyamide project in Singapore
Major 100% bio-based polyamide project in Singapore Rilsan® polyamide 11 +50% global capacity in Singapore Start-up mid-2022 €450 m Capex and €100 m EBITDA at maturity New PA11 powder resins capacity in Changshu, China (1Q’23) Bio-based, Recyclable renewable Transportation, sports, consumer electron
Slide 20: A more sustainable fluorinated upstream in the United States
A more sustainable fluorinated upstream in the United States Hydrofluoric acid 40 kT/year supply in partnership with Nutrien in Aurora, US Start-up mid-2022 US$150 m investment 20-fold reduction of CO2 emissions vs traditional processes Batteries, electronics, water treatment EXANE BNP PARIBAS 24th
Slide 21: High return expansions to capture sustainable growth
High return expansions to capture sustainable growth Bio-based, renewable Kynar® PVDF Forane® Sartomer® Pebax® Recyclable +50% capacity in Changshu, CN 15 kt/yr 1233zd +100% photocure +25% global capacity (end-2022) capacity in Calvert resins capaci<ty in in Serquigny, FR City, US (end-2023) Nansha,
Slide 22: Key steps achieved in portfolio transformation in 2021
Key steps achieved in portfolio transformation in 2021 Two major steps to refocus our portfolio towards Specialty Materials ASHLAND PERFORMANCE ADHESIVES PMMA Acquisition, expected to close in Q1’22 Divestment to Trinseo, closing 3 May 2021 EV: US$1,650m EV: €1,137m 8.7x EBITDA after pre-tax synergi
Slide 23: Ongoing development of our CSR structuring programs
Ongoing development of our 3 CSR structuring programs Archimedes program Circular Economy Climate Plan Moving toward higher positive impact A sustainable resource management Contain global warming Commitment to Paris Agreement ImpACT+ target Life Cycle Analysis target Science Based Target wb 2°C In
Slide 24: Strengthening safety and promoting diversity
Strengthening safety and promoting diversity Safety Diversity TRIR (Number of accidents per million hours worked) in senior management and executive positions 1.6 Women 1.3 1.4 30% 1.0 1.0 24% 26% 0.8 19% 21% 23% 23% 2017 2018 2019 2020 2021 2030 2017 2018 2019 2020 2021 2024 2030 NEW NEW PSER (Proc
Slide 25: First-quarter 2022 results
First-quarter 2022 results Extract from “First-quarter 2022 results and outlook” presentation (5 May 2022) EXANE BNP PARIBAS 24th European CEO conference - June 2022 25
Slide 26: Q1'22 financial highlights
Q1’22 financial highlights → Up by 30% vs Q1'21 at constant scope and currency • Volumes slightly down compared to last year’s high level, mainly impacted by logistics disruptions and raw materials shortages €2,887m sales • Improved product mix reflecting accelerating demand for high performance sol
Slide 27: Ongoing pricing initiatives in a highly inflationary environment
Ongoing pricing initiatives in a highly inflationary environment Sales in €million +5.3% -4.9% +31.5% Integration of Ashland Performance Adhesives in March, and Poliplas, Edge -2.2% Adhesives Texas and Agiplast over the quarter Good demand in Price increase most end markets initiatives to pass on PM
Slide 28: Adhesive Solutions (23% of Group sales)
Adhesive Solutions (23% of Group sales) Key figures Highlights in €m Q1’22 Q1’21 Change Sales 670 555 +20.7% → +15.8% price effect, reflecting priority given to the pass-through of significant inflation EBITDA 90 86 +4.7% of raw materials, energy and transportation EBITDA margin 13.4% 15.5% REBIT 73
Slide 29: Advanced Materials (37% of Group sales)
Advanced Materials (37% of Group sales) Key figures Highlights in €m Q1’22 Q1’21 * Change Sales 1,075 752 +43.0% → Prices up 39.4% YoY, strongly positive in both Business Lines EBITDA 274 142 +93.0% • Price increase initiatives in a still marked inflationary context EBITDA margin 25.5% 18.9% • Produ
Slide 30: Coating Solutions (30% of Group sales)
Coating Solutions (30% of Group sales) Key figures Highlights in €m Q1’22 Q1’21 Change → +41.8% price effect, sustained in all the Sales 862 567 +52.0% segment’s activities • Price increase initiatives to offset high inflation EBITDA 192 78 +146.2% of raw materials, energy and transportation costs •
Slide 31: Intermediates (10% of Group sales)
Intermediates (10% of Group sales) Key figures Highlights in €m Q1’22 Q1’21 * Change → Scope effect of -40.2% related to PMMA Sales 271 346 -21.7% divestment EBITDA 94 75 +25.3% → Prices up 23.1% YoY EBITDA margin 34.7% 21.7% • Favorable market conditions in acrylics in Asia • Fluorogases positive d
Slide 32: Q1'22 Cash flow
Q1’22 Cash flow in €million Reconciliation of EBITDA to net cash flow Q1’22 Q1’21 → Q1’22 tax rate EBITDA 619 358 21% of REBIT (excl. exceptional items) Current taxes -101 -49 Cost of debt -13 -13 → Working capital Change in working capital and fixed assets payables (1) -411 -187 • Seasonal volume i
Slide 33: Outlook
Outlook → Market conditions remain positively oriented at the start of the second quarter, with disparities between regions and end markets and an increased lack of visibility. The health situation in China, the war in Ukraine, high inflation and logistics disruptions could weigh on global demand go
Slide 34: 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
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