Slide 1: Third-quarter 2022 results and highlights
Third-quarter 2022 results and highlights
Slide 2: Third-quarter 2022 financial performance
Third-quarter 2022 financial performance Q3'22 results and highlights - 10 November 2022 2
Slide 3: Very solid Q3'22 supported by North America and innovation in sustainability
Very solid Q3’22 supported by North America and innovation in sustainability Sales EBITDA €2,972m €495m +24% vs Q3’21 16.7% EBITDA margin Adjusted net income Recurring cash flow €260m €434m €3.52 per share Net debt: 1.2x LTM EBITDA Q3'22 results and highlights - 10 November 2022 3
Slide 4: A performance driven by Specialty Materials
A performance driven by Specialty Materials Sales (in €m excl. corporate) +26% 38% 2,713 2,147 Sales Q3’22 sales Specialty +26% YoY +1% 244 246 €2,972m 28% Materials Q3'21 Q3'22 92% EBITDA 26% +8% YoY EBITDA (in €m excl. corporate) 8% +8% 458 423 Adhesive Solutions Coating Solutions -18% Advanced Ma
Slide 5: Q3'22 financial highlights
Q3’22 financial highlights → Up 24% vs Q3'21 • Growing demand for high value-added solutions in batteries, lightweighting, bio-based and recycled materials, 3D printing… €2,972m sales • Group’s ongoing initiatives to adjust its selling price in the face of raw materials and energy cost inflation • V
Slide 6: Outlook
Outlook → More challenging and uncertain global operating environment in the second half, marked in particular by the energy crisis in Europe, a slowdown in demand amplified temporarily by some destocking, and elevated inflation. → The Group will continue to benefit from the strength of its innovati
Slide 7: Further steps toward our long term ambition
Further steps toward our long term ambition Q3'22 results and highlights - 10 November 2022 7
Slide 8: 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 whole 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 4.7 158 Scopes 1+2 Scope 3 3.7 2.95 85 •
Slide 9: Sustainability at the heart of our latest innovations
Sustainability at the heart of our latest innovations STIX A600 bio-based floor adhesive New ranges of recycled 35% bio-based raw material, high performance polyamides solvent, phthalate and isocyanate- free formulation Partially or fully recycled PA11, PA12 and Pebax® polymers made by Agiplast Natu
Slide 10: Sustainability at the heart of our latest innovations (cont'd)
Sustainability at the heart of our latest innovations (cont’d) Clean mobility - HIGHLIGHT - Impermeable hydrogen tank liner Pierre Potier New in bio-based and recyclable Rilsan® PA11 energies medal 2022 Persico technology Cool roof Living comfort Kynar Aquatec® and Coating Solutions resins and home
Slide 11: Global capacity expansion boosted to +40%
Booming demand for our high performance Pebax® elastomers - HIGHLIGHT - Global capacity expansion boosted to +40% New partnership with Decathlon Recyclable Bio-based Pebax® Rnew® → +15% starting in Q1’23, +25% starting in Q3’23, in Serquigny (France) Courtesy of Decathlon → Traditional and bio-based
Slide 12: High return investments strengthening our sustainable growth profile
High return investments strengthening our sustainable growth profile Kynar® PVDF Kynar® CTO Sartomer® Forane® +50% plant capacity* (start end-22) +50% plant capacity* (start Q1’23) Bio-based, renewable +100% plant capacity* 15 kt/yr 1233zd (start H2’23) new capacity* (start early-24) Recyclable Rils
Slide 13: Fostering our employees' engagement
Fostering our employees’ engagement First publication of Arkema Arkema among the world’s Diversity and Inclusion Charter best employers → Strengthen well-being at work → Foster innovation and creativity → Develop a business model creating LT value 8th capital increase reserved for employees → 113th
Slide 14: Recognized non-financial performance
Recognized non-financial performance Superior percentile → 3rd place in DJSI World 2021 across all sectors « Chemicals » category Score 2022: 69 CSA score by S&P Global: 82 Rating: A 1st decile (global) (Oct. 2022) B for climate change CAC40® ESG Among the best Listed in the new Euronext index perfo
Slide 15: Continued business portfolio management
Continued business portfolio management Finalization of two high-value bolt-on acquisitions Disposal of Febex Polimeros Especiales SA (Mexico) → Leading player in solvent-free waterborne acrylic resins for architectural & decorative paints, textiles, pressure sensitive adhesives → ~US$40m sales in 2
Slide 16: Detailed Q3'22 results
Detailed Q3’22 results Q3'22 results and highlights - 10 November 2022 16
Slide 17: Sales increase driven by price adjustments to pass on high inflation
Sales increase driven by price adjustments to pass on high inflation Sales in €million +3.8% +9.0% +18.7% Integration of Ashland Performance -7.6% Stronger US dollar Adhesives, and Chinese yuan Permoseal and against euro Polimeros Especiales Resilient Selling price Epoxides disposal demand in NA, ad
Slide 18: Adhesive Solutions (26% of Group sales in Q3'22)
Adhesive Solutions (26% of Group sales in Q3’22) Key figures Highlights Q3’22 in €m Q3’22 Q3’21 Change 9m’22 9m’21 Change Sales 757 568 +33.3% 2,206 1,698 +29.9% → Prices up 14.8%, in a context of high raw materials, energy and logistics cost inflation EBITDA 90 79 +13.9% 291 247 +17.8% EBITDA margi
Slide 19: Advanced Materials (38% of Group sales in Q3'22)
Advanced Materials (38% of Group sales in Q3’22) Key figures Highlights Q3’22 in €m Q3’22 Q3’21 * Change 9m’22 9m’21 * Change Sales 1,131 837 +35.1% 3,319 2,374 +39.8% → Prices up 32.6% • Consistent across the segment in response EBITDA 237 176 +34.7% 793 502 +58.0% to cost inflation • Favorable pro
Slide 20: Coating Solutions (28% of Group sales in Q3'22)
Coating Solutions (28% of Group sales in Q3’22) Key figures Highlights Q3’22 in €m Q3’22 Q3’21 Change 9m’22 9m’21 Change Sales 825 742 +11.2% 2,647 2,021 +31.0% → Prices up 12.1% • Increases in downstream product lines EBITDA 131 168 -22.0% 530 403 +31.5% in response to inflation • Stable in acrylic
Slide 21: Intermediates (8% of Group sales in Q3'22)
Intermediates (8% of Group sales in Q3’22) Key figures Highlights Q3’22 in €m Q3’22 Q3’21 * Change 9m’22 9m’21 * Change Sales 246 244 +0.8% 839 905 -7.3% → Volumes down 7.0% EBITDA 59 72 -18.1% 282 228 +23.7% • Mechanical effect of refrigerant gas quotas in the US EBITDA margin 24.0% 29.5% 33.6% 25.
Slide 22: Simplified P&L
Simplified P&L in €million Q3’22 Q3’21 * Change 9m’22 9m’21 * Change Sales 2,972 2,398 +23.9% 9,043 7,019 +28.8% EBITDA 495 474 +4.4% 1,819 1,310 +38.9% Specialty Materials 458 423 +8.3% 1,614 1,152 +40.1% Intermediates 59 72 -18.1% 282 228 +23.7% Corporate -22 -21 -77 -70 EBITDA margin 16.7% 19.8%
Slide 23: Strong cash flow generation
Strong cash flow generation in €million → Q3’22 tax rate Reconciliation of EBITDA to net cash flow 21% of REBIT (excl. exceptional items) Q3’22 Q3’21 9m’22 9m’21 EBITDA 495 474 1,819 1,310 → Working capital Current taxes -76 -60 -294 -177 • Active management to Cost of debt -21 -13 -47 -40 adjust to
Slide 24: Net debt tightly controlled
Net debt tightly controlled in €million 1.2x LTM EBITDA 157 2,615 238 1,628 1,177 -695 110 31/12/2021 Rec. cash Exceptional M&A Dividends & FX and 30/09/2022 flow items Hybrid bonds others Q3'22 results and highlights - 10 November 2022 24
Slide 25: 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