Arkema Sa · EURONEXT:AKE
Arkema Sa — Shareholder Meeting (May 2024)
56 slides from Arkema Sa's shareholder meeting presentation, May 15, 2024
Slide 1: Annual General Meeting 15 May 2024
ANNUAL GENERAL MEETING 15 May 2024
Slide 2: 2023 Review
2023 Review ANNUAL GENERAL MEETING
Slide 3: Arkema in a nutshell
Arkema in a nutshell 2023 review 21,100 €275m employees R&D expenditure 55 3 countries regional R&D hubs €9.5bn €634m sales capital expenditure 15.8% 151 EBITDA margin production sites 2023 figures 2024 annual general meeting - 15 May 2024 3
Slide 4: An activity structured around 3 specialty segments with a balanced geographical footprint
An activity structured around 3 specialty segments with a balanced geographical footprint 2023 review Segments Regions 8% 5% 29% 24% 25% 37% Specialty Materials 38% 34% 92% Adhesives Solutions Europe Advanced Materials North America Coating Solutions Asia Intermediates Rest of the world % of 2023 sa
Slide 5: Diversified end-markets
Diversified end-markets 2023 review 31% 27% 19% 12% 11% Building and General industry Consumer goods Water, health and Transportation construction and electronics nutrition and energy 2024 annual general meeting - 15 May 2024 5
Slide 6: A solid financial performance in a demanding context
A solid financial performance in a demanding context 2023 review EBITDA (€m) Sales (€bn) EBITDA margin (%) 2,110 1,727 1,501 1,457 1,182 18.1% 18.3% 11.5 16.7% 9.5 9.5 8.7 7.9 15.0% 15.8% 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 2024 annual general meeting - 15 May 2024 6
Slide 7: CSR achievements recognized by non-financial rating agencies
CSR achievements recognized by non-financial rating agencies 2023 review Improved to A- for Climate change B for Water security IMPROVED Inclusion in the RATING CAC® SBT 1.5° Index created in 2023 Maintained in CAC 40® ESG Among top 4% 1st decile (global) Rating A of the sector 2024 annual general m
Slide 8: Our employees at the center of our priorities
Our employees at the center of our priorities 2023 review Safety at the heart Diversity and inclusion values of our actions firmly anchored 0.9 29% Accidents per million Women in senior management and hours worked (TRIR) executive positions Target 0.8 in 2030 Target 30% in 2030 2.8 40% Process safet
Slide 9: A steadily growing dividend
A steadily growing dividend 2023 review Dividend1 (in €/share) Payout ratio of 40% for fiscal year 2023 + 12% on average per year over 2019-23 period 3.4 3.5 3.0 2.5 2.2 In line with the Group’s ambition to progressively increase the dividend 2 2019 2020 2021 2022 2023 1. Dividend allocated for the
Slide 10: 2023 highlights
2023 highlights ANNUAL GENERAL MEETING
Slide 11: Acquisition of 54% of PI Advanced Materials: a new cutting-edge technology in polymers
Acquisition of 54% of PI Advanced Materials : a new cutting-edge technology in polymers 2023 Highlights Ultra-high performance Global leader in polymers with outstanding polyimide films properties Attractive markets of Withstanding extreme consumer electronics temperatures (400°C) and electric vehic
Slide 12: Strengthening of Adhesive Solutions with two bolt-on acquisitions
Strengthening of Adhesive Solutions with two bolt-on acquistions 2023 Highlights Polytec PT Arc Building Products (Germany) (Ireland) Thermal interface Tile adhesives and materials for batteries and floor preparation engineering adhesives systems for electronics Key Irish manufacturer, High value-ad
Slide 13: Important progress in the batteries of today and tomorrow
Important progress in the batteries of today and tomorrow 2023 Highlights Launch of the range Stake acquisition Pioneering start-up Expansion of the range of in new generation solutions for current and sodium-ion batteries new generation batteries Acquisition of 78% in Proionic1 Acrylic solutions wi
Slide 14: Progress in bio-based and recyclable materials
Progress in bio-based and recyclable materials Faits marquants 2023 Recycled Elium® Solar Impulse Efficient Solution Use of recycled Elium® for label the production of a 2nd wind turbine blade by the Awarded to the PA11 ZEBRA consortium range, which joins the #1000solutions portfolio 2023 ICIS prize
Slide 15: Important partnerships in cutting-edge sectors
Important partnerships in cutting-edge sectors Faits marquants 2023 Complete solutions for Partnership with Hexcel 3D printing in aeronautics Launch of Easy3D, an online on- demand additive manufacturing Manufacture of a first platform : aeronautical structure in • Selection of the ideal material th
Slide 16: A strong civic engagement
A strong civic engagement Faits marquants 2023 7th year of the Pragati Arkema, patron of the program for sustainable Théâtre des Champs-Elysées, castor farming in India brings thousands of children to the opera Partnership with Strengthening of the Habitat for Humanity commitment for the in Philadel
Slide 17: Financial performance
2023 financial performance ANNUAL GENERAL MEETING
Slide 18: 2023 key figures
2023 key figures 2023 financial performance Sales Adjusted net income €9,514m €653m - 17.7% vs 2022 €8.75 per share EBITDA Net debt1 €1,501m €2,930m 15.8% EBITDA margin 1.95x 2023 EBITDA 1. Including hybrid bonds 2024 annual general meeting - 15 May 2024 18
Slide 19: Adhesive Solutions (29% of Group sales)
Adhesive Solutions (29% of Group sales) 2023 financial performance in €m 2023 2022 Change Sales 2,714 2,898 - 6.3% EBITDA 380 366 + 3.8% EBITDA margin 14.0% 12.6% Environment of weak underlying demand, amplified by destocking which subsided in the 2nd half Dynamic selling price management in an evol
Slide 20: Advanced Materials (38% of Group sales)
Advanced Materials (38% of Group sales) 2023 financial performance in €m 2023 2022 Change Sales 3,562 4,341 - 17.9% EBITDA 666 941 - 29.2% EBITDA margin 18.7% 21.7% Overall lower demand and destocking, with business areas linked to new energies and bio-based and recycled solutions resisting better P
Slide 21: Coating Solutions (25% of Group sales)
Coating Solutions (25% of Group sales) 2023 financial performance in €m 2023 2022 Change Sales 2,402 3,250 - 26.1% EBITDA 327 593 - 44.9% EBITDA margin 13.6% 18.2% Progressive normalization of market conditions in upstream acrylics after an exceptional 2022 Weak demand and destocking in decorative p
Slide 22: Intermediates (8% of Group sales)
Intermediates (8% of Group sales) 2023 financial performance in €m 2023 2022 Change Sales 797 1 020 - 21.9% EBITDA 213 306 - 30.4% EBITDA margin 26.7% 30.0% Good performance from refrigerant gases in Europe and the United States Much less favorable market conditions than in 2022 in acrylics in Asia
Slide 23: Excellent cash generation
Excellent cash generation 2023 financial performance Recurring cash flow (€m) EBITDA to cash conversion rate (%) EBITDA to cash conversion rate 933 50.7% above the target of 40% 786 762 756 761 Strict working capital 64% management 13.1% of sales at end December 2023 (excluding PIAM) 54% 51% 44% 44%
Slide 24: Debt successfully refinanced in 2023 and early 2024
Debt successfully refinanced in 2023 and early 2024 2023 financial performance Debt maturity schedule (€m) 1,100 Refinancing of the €1,100m senior bond in 2023 900 and of the €400m hybrid bond 1.5% in March 2024 700 700 1.5% 4.25% Average maturity (excluding hybrids) 4 years (at end-Q1 2024) 500 400
Slide 25: Key 1st quarter figures and 2024 outlook
Key 1st quarter figures and 2024 outlook 2023 financial performance 2024 OUTLOOK Sales The macroeconomic context remains marked by a lack of €2,341m visibility without clear signs of a rebound in demand - 7.3% vs Q1 2023 Second-quarter 2024 EBITDA is expected to be slightly higher relative to Q2’202
Slide 26: Financial resolutions
Financial resolutions 2023 financial performance Approval of the Company’s and consolidated financial statements for 2023 (1st and 2nd resolutions) Renewal of the share buyback authorization : 2024 program (13th resolution) Ceiling : 10% of the Company’s share capital for a maximum purchase price se
Slide 27: Financial and non-financial resolutions
Financial and non-financial resolutions 2023 financial performance Renewal of the delegation of authority to the Board to carry out capital increases reserved for members of a company savings plan without PSR (21th resolution) Ceiling : €13,500,000 (i.e. less than 2% of the Company’s share capital o
Slide 28: Strategy and ambition
Strategy and ambition ANNUAL GENERAL MEETING
Slide 29: Our vision is shaped by the accelerating demand for high-performance materials
Our vision is shaped by the accelerating demand for high-performance materials Strategy and ambition A SIGNATURE “Be the Specialty Materials leader, offering the most innovative and FOR A VISION sustainable solutions to address our customers’ current and future challenges” 2024 annual general meetin
Slide 30: These capabilities define our 3 Specialty Materials segments
These capabilities define our 3 Specialty Materials segments Strategy and ambition 38% 38% 25% 25% 28% 29% INTERMEDIATES Fluorogases and Asia Acrylics 2023 figures 2024 annual general meeting - 15 May 2024 30
Slide 31: Our strategy underpins ambitious financial objectives
Our strategy underpins ambitious financial objectives Strategy and ambition 2028 Strict financial discipline c. €12bn Sales Net debt to EBITDA ≤2 Solid investment grade rating EBITDA c. 18% margin Operating cash ~70% conversion rate1 Sales +4%/y Organic CAGR EBITDA +7-8%/y over 2024-28 ROCE ~10% 1.
Slide 32: Capital allocation will be value driven and attractive for our shareholders
Capital allocation will be value driven and attractive for our shareholders Strategy and ambition Maintenance and regulatory capex ~55% Capex Growth capex Net M&A (divestment proceeds reinvested in M&A) ~15% Net M&A Dividend (c. 40% payout ratio over 2024-28) Return ~30% to shareholders Opportunisti
Slide 33: We identified 5 key submarkets with superior growth driven by sustainable megatrends
We identified 5 key submarkets with superior growth driven by sustainable megatrends Strategy and ambition Our end-markets Selected submarkets with outstanding growth Transportation and energy Green energy and electric mobility Advanced electronics Consumer goods and electronics Sustainable lifestyl
Slide 34: With these differentiated technologies, we are uniquely positioned to serve the key submarkets
With these differentiated technologies, we are uniquely positioned to serve the key identified submarkets Strategy and ambition Advanced Materials Adhesive Solutions Coating Solutions Green energy and electric mobility Advanced electronics Sustainable lifestyle Efficient buildings and homes Water fi
Slide 35: This combination of technologies x submarkets will accelerate our growth
This combination of technologies x submarkets will accelerate our growth Strategy and ambition 15% 25% 2023 2028 85% €9.5bn sales 75% c. €12bn sales 3x higher organic sales CAGR than Group’s average Over 50% of Arkema R&D spendings Green energy Water filtration, medical devices Advanced electronics
Slide 36: Recent capex supporting Arkema's ambition
Recent capex supporting Arkema’s ambition Strategy and ambition PVDF UV curing resins Bio-based PA11 Pebax® Fluorospecialties Expansions Doubling capacity New units Expansion HF with Nutrien (US) (China, France) (China) (Singapore, China) (France) HFO 1233zd (US) Batteries, semicon New energies, Con
Slide 37: Acquisition of Dow's flexible packaging laminating adhesives
Acquisition1 of Dow’s flexible packaging laminating adhesives: a high-quality business strengthening our existing position Strategy and ambition One of the global leaders for A unique opportunity adhesives in flexible packaging • Become a leader in the flexible packaging market Annual sales • Become
Slide 38: New attractive capex initiatives will be implemented
New attractive capex initiatives will be implemented Strategy and ambition Additive for Decarbonization Niche additive for Solutions Bio-based biofuels of acrylics renewable energy for batteries PA11 value chain in Beaumont production in in Changshu (China) with a focus (United States) Carling (Fran
Slide 39: Sustainable innovations for a changing world
Sustainable innovations for a changing world Strategy and ambition North Group programs on America 1,800 Europe Asia transversal themes, which researchers spread across three hubs 5 7 5 contribute to the decarbonization of our value chain Lightweight materials and design 216 new patent applications
Slide 40: Batteries as the bedrock of green mobility
Batteries as the bedrock of green mobility Strategy and ambition Greater energy density Allows for faster charging batteries, increased durability and energy density Safer New grades for almost all- Electrical and thermal solid-state batteries insulation of cells Batteries Ionic liquid combining con
Slide 41: Vehicles that evolve and require new materials
Vehicles that evolve and require new materials Strategy and ambition Increase the range and charging Light urban vehicles whose Electric vehicles: speed of hydrogen vehicles assembly is evolving towards new acoustic needs robotic bonding Elium® resin, combined with carbon fiber, ISR Bostik range Bos
Slide 42: Infrastructures that are evolving towards more sustainability
Infrastructures that are evolving towards more sustainability Strategy and ambition H2 produced by electrolysis Siliporite® PHYG series range of molecular sieves designed for hydrogen purification via the PSA (pressure swing adsorption) process Roads Wind turbines Cecabase® RWI • MMA Bostik adhesive
Slide 43: 2023 results in line with the 1.5°C trajectory by 2030 approved by SBTi
2023 results in line with the 1.5°C trajectory by 2030 approved by SBTi Strategy and ambition Scopes 1+2 greenhouse gas emissions Scope 3 greenhouse gas emissions (Mt CO2e) (Mt CO2e) 3.7 -39% -48.5% 152 Pave the way to 2.9 Net-Zero by 2050 2.4 -53% -54% 2.3 1.9 94 78 71 70 2019 2021 2022 2023 2030 o
Slide 44: Long-term structuring agreements for the supply of renewable electricity
Long-term structuring agreements for the supply of renewable electricity Strategy and ambition 27% Share of electricity consumed by the Group coming from renewable sources, in 2023 New contracts signed in 2023 20 GWh/year 40% covering 70% of Bostik’s electricity needs in France from 2026 Share of Gr
Slide 45: Industrial projects serving decarbonization
Industrial projects serving decarbonization Strategy and ambition Decarbonization of acrylics production in Carling Improving the operational efficiency and environmental footprint of one of the main acrylic monomer factories in Europe 2026 €130 M 20% New patented purification Amount of capital Redu
Slide 46: A consolidated biodiversity strategy
A consolidated biodiversity strategy Strategy and ambition Our commitments to the benefit of biodiversity UPSTREAM Strengthen our responsible Analyze the impact and dependence of castor purchasing practices our raw materials on biodiversity IN OUR OPERATIONS Chemical oxygen demand - 65% in water in
Slide 47: Governance
Governance ANNUAL GENERAL MEETING
Slide 48: Composition of the Board of Directors
Composition of the Board of Directors Governance Composition as of 31 December 2023 5 new independent directors appointed over the last 3 years, making it possible to maintain a 14 members high rate of independence, and to enrich and diversify the skills of the Board of Directors 73% independence ra
Slide 49: Arkema governance structure: combination of the functions of Chairman and CEO
Arkema governance structure: combination of the functions of Chairman and CEO Governance A light, responsive and efficient structure, which has proven its effectiveness and relevance since 2006 Strict respect for the Robust and constantly Which made it possible to And to modernize the balance of pow
Slide 50: A balanced Arkema governance structure with checks and balances
A balanced Arkema governance structure with checks and balances Governance Board of Directors Audit and Accounts Committee 93% participation rate in 2023 97% participation rate in 2023 6 meetings minimum including : 6 meetings 1 one-day seminar dedicated to strategy 1 executive session 1 session on
Slide 51: Renewal proposed to the general meeting
Renewal proposed to the general meeting Governance M. THIERRY Renewal of the term of office as Chairman and CEO subject to the renewal of his term of office as director by the general meeting (5th resolution) LE HÉNAFF Chairman and Chief executive officer 2020-2023 TRACK RECORD – Current term of off
Slide 52: Compensation policy for the Chairman and CEO for the duration of the new term
Compensation policy for the Chairman and CEO for the duration of the new term of office (7th resolution) Governance Modifications 2024-28 Fixed annual compensation Performance shares Indemnity in case of forced departure €1,150k 33,000 shares per year More demanding criteria under the new term of of
Slide 53: Elements of the 2023 compensation of the Chairman and CEO subject to approval
Elements of the 2023 compensation of the Chairman and Chief executive officer subject to approval (9th resolution) Governance Amount Description Set for 4 years upon renewal of the term of office of the Chairman and Chief executive Fixed €1,000,000 officer on 19 May 2020. remuneration Effective date
Slide 54: Compensation policy for directors from 2024 and compensation awarded in 2023
Compensation policy for directors from 2024 and compensation awarded in 2023 Guvernance Compensation policy for directors (excluding Chairman and CEO) – 6th resolution Evolution of the distribution methods proposed from 2024 Senior Board of Directors Committees independent director Member Chairman A
Slide 55: Capital increase reserved for members of a Company savings plan
Capital increase reserved for members of a Company savings plan (21st resolution) Governance Continuation by the Group of its dynamic Offer to Group employees to subscribe to employee shareholding policy in 2024 in Arkema shares under advantageous order to involve as many employees as conditions eve
Slide 56: 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 a context marked by strong geopolitical tensions, where the evolution of the world economy remain uncertain