Arkema Sa · EURONEXT:AKE
Arkema Sa — BNP Paribas Exane 25th European CEO Conference 2023
39 slides from Arkema Sa's conference presentation, Jun 6, 2023
Slide 1: BNP Paribas Exane 25th European CEO Conference
Thierry Le Hénaff Chairman and CEO BNP PARIBAS EXANE 25TH EUROPEAN CEO CONFERENCE 6 June 2023 – Paris, FRANCE
Slide 2: Arkema in a snapshot
Arkema in a snapshot BNP PARIBAS EXANE 25th European CEO conference - June 2023 2
Slide 3: Arkema at a glance (2022)
Arkema at a glance (2022) €11.5bn 21,100 sales employees 18.3% 55 EBITDA margin countries €707m 148 capital expenditure production facilities €270m 3 R&D expenditure regional R&D hubs BNP PARIBAS EXANE 25th European CEO conference - June 2023 3
Slide 4: Diversified end-markets and balanced geographic footprint
Diversified end-markets and balanced geographic footprint Segments Markets Regions Specialty Materials 38% 16% 35% 91% 19% 4% 4% 27% 16% 27% 28% 36% 36% 8% 28% 33% 25% 28% 9% 8% 5% 4% Adhesive Solutions Coating Solutions Industry Consumer goods Europe Asia Advanced Materials Intermediates Paints and
Slide 5: Excellent 2022 financial performance in a demanding context
Excellent 2022 financial performance in a demanding context Sales (€bn) EBITDA (€m) EBITDA margin (%) 11.5 2,110 9.5 Covid 8.7 context 1,727 7.9 1,457 Covid context 1,182 18.1% 18.3% 16.7% 15.0% 2019 2020 2021 2022 2019 2020 2021 2022 BNP PARIBAS EXANE 25th European CEO conference - June 2023 5
Slide 6: Excellent cash generation
Excellent cash generation Recurring cash flow * (€m) EBITDA to cash conversion rate → EBITDA to cash conversion rate 44.2% in 2022 933 In line with the long-term target of 40% 762 756 → Strict working capital management 12.6% of sales at end-December 2022 64 % 44 % 44 % → Capital expenditure €707m i
Slide 7: Well-established financial resources
Well-established financial resources In €m → Average maturity 1,100 4.3 years (excluding hybrids) 900 1.5% → RCF 700 One-year extension (July 2024) 1.5% Linked to CSR criteria 500 400 400 → Solid financial rating 0.75% 2.75% 300 300 3.5% 150 0.125% 1.5% BBB+ stable outlook (S&P) 3.125% Baa1 stable o
Slide 8: New ambitious 1.5°C trajectory approved by SBTi (2030 targets)
New ambitious 1.5°C trajectory approved by SBTi (2030 targets) Scopes 1+2 Scope 3 GHG emissions (Mt CO2e) GHG emissions (Mt CO2e) -48.5% -54% 3.7 152 2.0 85 1.9 70 2019 Old New 2019* Old New 2030 2030 2030 2030 target target target target * Restated data, in line with SBTi recommendations BNP PARIBA
Slide 9: ESG recognition among best-in-class in the sector
ESG recognition among best-in-class in the sector MSCI: A CDP: B (climate change) Moody’s ESG Solutions: 69 Superior percentile across all sectors Ecovadis: top 3% Among the best performers in the sector Sustainalytics: Rated 3rd place DJSI World 2022 ISS ESG: 1st decile “Chemicals” category (global
Slide 10: A steadily growing dividend
A steadily growing dividend Dividend (in €/share) per fiscal year 3.40 3.00 Covid 2.50 context 2.50 2.30 2.20 2017 2018 2019 2020 2021 2022 → In line with the Group’s ambition to progressively increase the dividend BNP PARIBAS EXANE 25th European CEO conference - June 2023 10
Slide 11: Strategy and ambition
Strategy and ambition BNP PARIBAS EXANE 25th European CEO conference - June 2023 11
Slide 12: Contribute to a more sustainable world thanks to our materials
Contribute to a more sustainable world thanks to our materials Stratégie et ambition Innovative materials To meet the challenges of tomorrow Adhesive Solutions Urbanization and social change 25% 28% Coating Climate change Solutions 38% Advanced Resource scarcity Materials A One Arkema approach based
Slide 13: In line with our 2024 ambition
In line with our 2024 ambition Stratégie et ambition Être unBeleader des Matériaux a Specialty Materialsdeleader Spécialités Sales of Organic growth €10 to 11bn 3 to 3.5% per year EBITDA margin of Cash generation 17% > 40% BNP PARIBAS EXANE 25th European CEO conference - June 2023 13
Slide 14: 4 main levers to achieve this ambition
4 main levers to achieve this ambition Stratégie et ambition Accelerate organic growth through: • cutting-edge innovation for the energy transition and decarbonization • industrial investments in high-growth markets Strengthen the geographic footprint and leadership positions in high value-added mar
Slide 15: Strong innovation serving sustainability
Strong innovation serving sustainability Up to €1.5bn additional sales from sustainable innovation by 2030 vs. 2019 5 R&D platforms > 90% patents filed relating to Natural resources management sustainable development in 2022 New energies 53% of sales significantly contributing to UN SDGs* in 2022 (I
Slide 16: Highly technical products for clean mobility
Highly technical products for clean mobility Hydrogen tank liner made of bio-based and recyclable Rilsan® PA11 High performance solutions DMDS specialty additives for the inside and outside of used in bio-refineries battery cells BNP PARIBAS EXANE 25th European CEO conference - June 2023 16
Slide 17: A vast range of bio-based or recyclable materials
A vast range of bio-based or recyclable materials New ISCC+ mass balance certified acrylic monomers New recycled high Bio-based heat-activatable performance polyamides high performance adhesives produced by Agiplast made from rapeseed BNP PARIBAS EXANE 25th European CEO conference - June 2023 17
Slide 18: Sustainable solutions for home comfort
Sustainable solutions for home comfort Solvent, phtalate or isocyanate-free, 35% bio-based Bostik flooring adhesive Kynar Aquatec® and Coating 97% bio-based Solutions resins and additives Synaqua® resins for sustainable thermal for decorative paints reflective roofs BNP PARIBAS EXANE 25th European C
Slide 19: Performance at the heart of our innovation
Performance at the heart of our innovation Pebax® foam soles for Decathlon’s Kiprun KD900X running shoes KING Agera golf putter insert Protective coating made of made of PA11, 3D-printed with Kynar Aquatec® PVDF latex HP technology for NASA’s logo on SLS Artemis 1 Courtesy of Cobra Golf Courtesy of
Slide 20: High return investments supporting our sustainable growth strategy
High return investments supporting our sustainable growth strategy Key current expansion projects Combined Capex €750m Pebax® PVDF EBITDA contribution €50-70m in 2023 (mainly H2) PA11 powders ~€180-200m at maturity Hydrofluoric acid (Nutrien) PVDF Sartomer® A11 / PA11 Bio-based, renewable Solvent-fr
Slide 21: Leadership in pressure sensitive adhesives thanks to Ashland's adhesives acquisition
A leadership position in pressure sensitive adhesives thanks to Ashland’s adhesives acquisition The most complete and integrated pressure sensitive adhesives (PSA) global offering on the market • Including 4 major technologies: hot melt, water-based, UV, specialty acrylic solutions • Leveraging: • t
Slide 22: Group's profile strengthened by recent bolt-on M&A
Group’s profile strengthened by recent bolt-on M&A Acquisitions Divestment Permoseal (South Africa) Polytec PT (Germany) Febex divested Adhesive Solutions to Prayon group Polimeros Especiales SA (Mexico) Coating Solutions BNP PARIBAS EXANE 25th European CEO conference - June 2023 22
Slide 23: 3 CSR challenges for sustainable growth of our activities
3 CSR challenges for sustainable growth of our activities Cultivate a position as an Offer sustainable Act as a employer of choice solutions driven responsible and an open by innovation manufacturer dialogue with stakeholders BNP PARIBAS EXANE 25th European CEO conference - June 2023 23
Slide 24: Ensuring employees' health and equipment safety
Ensuring employees’ health and equipment safety 2030 targets 2022 Safety in Action 0.8 accident per million hours worked (TRIR) 0.9 promote safety culture The Essentials program process safety events 14 golden rules to be 2.0 per million hours worked (PSER) 2.8 applied without compromise BNP PARIBAS
Slide 25: Reducing environmental footprint and preserving biodiversity
Reducing environmental footprint and preserving biodiversity Reducing water use -7% in 2022 vs. 2021 (> 6 million m3/year) 2030 targets (vs. 2012) 2022 (vs. 2012) Air: -65% VOC* emissions -47% Water: -60% COD* -58% *Volatile Organic Compounds, Chemical Oxygen Demand BNP PARIBAS EXANE 25th European C
Slide 26: Circular economy as a priority to reduce environmental impact
Circular economy as a priority to reduce environmental impact Materials Implementation, Maximize use of 2024 target use, end-of-life renewable or recycled materials and packaging Maintain products and materials in the use-loop 50% of sales covered by a Measurement Life Cycle Assessment Roll out Life
Slide 27: 5 core values ingrained in our corporate culture
5 core values ingrained in our corporate culture 5 core values Solidarity Performance Simplicity Empowerment Inclusion BNP PARIBAS EXANE 25th European CEO conference - June 2023 27
Slide 28: Promoting diversity, inclusion and equal opportunity
Promoting diversity, inclusion and equal opportunity 1st publication of Arkema’s Diversity and Inclusion Charter 2030 targets in senior management and executive positions Committed with 30% women UN Women 26% in 2022 to promote professional equality between 50% non-French women and men 40% in 2022 B
Slide 29: Arkema recognized as an employer of choice
Arkema recognized as an employer of choice Top Employer certification renewed in 4 countries Arkema among the world’s best employers by Forbes BNP PARIBAS EXANE 25th European CEO conference - June 2023 29
Slide 30: First-quarter 2023 results
First-quarter 2023 results Extract from “First-quarter 2023 results and outlook” presentation (5 May 2023) BNP PARIBAS EXANE 25th European CEO conference - June 2023 30
Slide 31: Q1'23 financial highlights
Q1’23 financial highlights → Down 12.6% vs Q1’22 • Volumes down, impacted by continued weak demand in Europe, a slowdown observed in construction in the US and temporary destocking in batteries in China €2,524m sales • Overall resilience in prices, benefiting from the work to position the portfolio
Slide 32: Sales reflecting low volume environment and good pricing
Sales reflecting low volume environment and good pricing Sales in €million -18.3% +2.2% +2.7% +0.8% Ashland Performance Weak demand in Price increases of the Adhesives (closing on Europe, temporary last 12 months in the 28 Feb. 2022), destocking in face of cost inflation Permoseal and batteries in C
Slide 33: Adhesive Solutions (28% of Group sales)
Adhesive Solutions (28% of Group sales) Key figures Highlights in €m Q1’23 Q1’22 Change Sales 698 670 +4.2% → Prices up 6.7% YoY, in the general inflationary context, also supported by positive mix EBITDA 93 90 +3.3% EBITDA margin 13.3% 13.4% → Volumes down 12.7% YoY • Destocking and slowdown in con
Slide 34: Advanced Materials (37% of Group sales)
Advanced Materials (37% of Group sales) Key figures Highlights in €m Q1’23 Q1’22 Change Sales 937 1,075 -12.8% → Volumes significantly down 20.5% YoY • Demand remaining overall rather well oriented in EBITDA 160 274 -41.6% the US for the segment, but impacted by specific challenging EU context EBITD
Slide 35: Coating Solutions (26% of Group sales)
Coating Solutions (26% of Group sales) Key figures Highlights in €m Q1’23 Q1’22 Change → Volumes down 20.5% YoY Sales 661 862 -23.3% • Weaker overall demand, particularly in EU and in construction with ongoing destocking at certain EBITDA 94 192 -51.0% customers EBITDA margin 14.2% 22.3% • Strong fo
Slide 36: Intermediates (9% of Group sales)
Intermediates (9% of Group sales) Key figures Highlights in €m Q1’23 Q1’22 Change Sales 218 271 -19.6% → Volumes down 17.4% YoY EBITDA 49 94 -47.9% • Primarily reflecting subdued demand EBITDA margin 22.5% 34.7% for acrylics in China REBIT 36 79 -54.4% → Prices down 2.6% YoY • Continued positive dyn
Slide 37: Cash flow reflecting usual Q1 working capital seasonality
Cash flow reflecting usual Q1 working capital seasonality in €million Q1’23 Q1’22 EBITDA 367 619 → Q1’23 tax rate Current taxes -55 -101 21% of REBIT (excl. exceptional items) Cost of debt -16 -13 Change in working capital and fixed assets payables (1) -243 -411 → Working capital Recurring capital e
Slide 38: Outlook
Outlook → The macroeconomic context remains marked by a lack of visibility and continued low volumes. The outlook should be contrasted by region for the coming months, Europe remaining weak, the US down but holding up better overall and Asia improving slightly from a low level → Raw material costs a
Slide 39: 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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