Arkema Sa · EURONEXT:AKE
Arkema Sa — CITI West Coast Institutional Investor Symposium 2013
33 slides from Arkema Sa's conference presentation, Mar 13, 2013
Slide 1: Arkema CITI West Coast Institutional Investor Symposium 2013
Arkema CITI West Coast Institutional Investor Symposium 2013 San Francisco – March 13th-14th, 2013 Thierry Lemonnier CFO
Slide 2: Full year 2012 highlights
Full year 2012 highlights A strong performance in a volatile and challenging environment ● +8.4% sales versus 2011 at €6.4bn ● €996m EBITDA fully in line with guidance ● 15.6% EBITDA margin at the high end of the industry range ● €441m adjusted net income of continuing operations ● €900m net debt an
Slide 3: 2012 profile
2012 profile Sales (€bn) EBITDA (€m) 5.9 €6.4 bn 1,034 €996m 4.9 809 2010 2011 2012 2010 2011 2012 Sales by segment Sales by region High Coating Performance 33% 34% Solutions Europe 40% 34% North America Materials 33% 26% Industrial Specialties Asia and RoW For 2010-2012, in accordance with IFRS5 st
Slide 4: Performance by new reporting segment
Performance by new reporting segment High Performance Materials Industrial Specialties Coating Solutions 2,101 2,114 2,096 2,175 1,952 1,955 Sales (€m) 1,814 1,680 1,216 2010 2011 2012 2010 2011 2012 2010 2011 2012 EBITDA margin (%) 15.3 17.3 17.2 18.2 20.9 19.0 17.5 15.7 12.8 441 361 399 337 355 EB
Slide 5: Sales breakdown by business
Sales breakdown by business Organic Peroxides Acrylic monomers High Coating Filtration 9% 13% Solutions Performance and adsorption Materials 6% 34% 33% Coating Resins 13% Technical Polymers 2012 sales 18% Sartomer (UV curing resins) €6.4bn 5% Coatex (rheological additives) Hydrogen Peroxide 3% 4% Th
Slide 6: Diversified end markets
Diversified end markets 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 12% 6% Decorative paints Energy 7% 6% in North America 5% in Eu
Slide 7: Balanced geographical reach
Balanced geographical reach RoW 5% 7% 12% Asia 21% 18% 23% North America 34% 17% 38% Europe 40% 48% 37% Arkema European panel* American panel** * Akzo Nobel, BASF, Clariant, Lanxess, Solvay 7 ** Dow, Celanese, Chemtura
Slide 8: Solid balance sheet and financing
Solid balance sheet and financing €900m net debt at 31 December 2012 ● 39% gearing ● 0.9x net debt/EBITDA €480m bond issued in 2012 with maturity in April 2020 ● First tranche of €230m with 3.85% interest rate ● Second tranche of €250m with an annual yield slightly below 3% €1.9bn financing resource
Slide 9: Full year 2012 results
Full year 2012 results INNOVATIVE @& CHEMISTRY
Slide 10: 2012 key figures
2012 key figures In €m (except EPS) 2011 2012 variation Sales 5,900 6,395 +8.4% EBITDA 1,034 996 -3.7% EBITDA margin 17.5% 15.6% Recurring operating income 762 678 -11.0% Adjusted net income (continuing operations) 574 441 -23.2% Net income (discontinued operations) (587) (200) - Net income (Group s
Slide 11: +8.4% sales versus 2011
+8.4% sales versus 2011 FX rate – Sales (€m) Scope of translation effect business Volume Price +3.6% 6,395 5,900 +9.4% (2.0)% (2.6)% ● High basis of ● Mainly acrylic ● Specialty resins comparison monomers in 1H’12 of 1H’11 and certain fluorogases ● Hipro and Casda ● Weak demand (China) in 4Q in Euro
Slide 12: Key drivers of FY'12 performance
Key drivers of FY’12 performance More challenging market conditions than in 2011 ● Solid economic environment in North America supported by cheap energy cost ● Difficult macro in Europe ● Lower growth in Asia than expected ● Volatile and high raw material costs ● Positive impact of foreign exchange
Slide 13: Strengthening our industrial footprint
Strengthening our industrial footprint United States China $110m capex program Start-up in 2012 in acrylics PVDF Kynar®: +50% capacity Start-up in 2012 Fluorogas HFC-125: 2-EHA: New line +30% capacity Under construction Under construction Acrylic acid: +30 kt PA10: x3 capacity Methyl acrylate: +45 k
Slide 14: Performance Products
Performance Products (High Performance Materials) In €m 2011 2012 variation Sales 1,952 2,101 +7.6% EBITDA 337 361 +7.1% EBITDA margin 17.3% 17.2% Recurring operating income 238 252 +5.9% 17.2% EBITDA margin, maintained at historical high +7.6% sales at €2,101m ● Benefits from acquisitions (+7%) in
Slide 15: Industrial Chemicals
Industrial Chemicals (Industrial Specialties and Coating Solutions) In €m 2011 2012 variation Sales 3,928 4,271 +8.7% EBITDA 725 678 -6.5% EBITDA margin 18.5% 15.9% Recurring operating income 553 477 -13.7% +8.7% sales at €4,271m supported by acquisitions of Specialty Resins (+11%) and strengthening
Slide 16: 4Q'12 highlights and key figures
4Q’12 highlights and key figures Sales (€m) 2nd best performance in a 4Q at € 171m EBITDA ● 11.8% EBITDA margin (11.3% in 4Q’11) 1,447 1,400 Traditional year-end seasonality and cautious +3.4% management of inventory by customers +3% volumes versus 4Q’11 Good support from Industrial Specialties on h
Slide 17: Growth ambition reflected in FY'12 cash flow
Growth ambition reflected in FY’12 cash flow +€656m operating cash flow from continuing Working capital /sales (%) operations 15.0% 15.2% ~15% ● Strict control of working capital (-€13m working capital variation) €438m total capex to fuel growth ambition ● €351m recurring capex in line with guidance
Slide 18: Strong balance sheet maintained
Strong balance sheet maintained In €m 31 Dec 31 Dec 39% gearing in line with guidance 2011 2012 ● Includes the impact of the acquisition of Hipro and Net debt 603 900 Casda in China and of the divestment of Vinyls Shareholders’ equity 2,217 2,311 0.9x net debt / EBITDA Net provisions* 686 774 Net pr
Slide 19: Dividend increase reflects strong confidence in Arkema's potential
Dividend increase reflects strong confidence in Arkema’s potential Dividend (€/share) 1.80 1.3 Payout: 25% of adjusted net income 1.0 2.3% dividend yield 0.75 (based on share price at year end) 0.6 0.6 Arkema confirms its target to reach a 30% payout ratio on adjusted net income 2007 2008 2009 2010
Slide 20: 2013 assumptions
2013 assumptions Market conditions expected to remain contrasted ● Solid environment in North America supported by improved GDP and low energy costs ● Europe to remain challenging with continuing cautiousness of customers ● Growth should gradually improve in Asia with early signs of recovery in Chin
Slide 21: 2013 priorities
2013 priorities Finalize $110m investment plan in acrylics in the US Acrylic monomers in US ● Start-up of 30kt acrylic acid expansion (mid 2013) ● Start-up of 45kt methyl acrylate unit (2H’13) Maintain pace of development in China ● Start-up of Hipro capacity expansion (x3) end 1Q’13 ● New emulsion
Slide 22: On track to 2016 targets
On track to 2016 targets INNOVATIVE @& CHEMISTRY
Slide 23: Confident to deliver our long-term targets
Confident to deliver our long-term targets € 8bn sales and 16% EBITDA margin in 2016 Gearing to be maintained below 40% Portfolio increasingly focused on specialties Very balanced geographic presence Sales by segment (2016e) Sales by region (2016e) High Coating North Performance 38% 32% Solutions Eu
Slide 24: Strategic priorities for 2013 - 2016
Strategic priorities for 2013 - 2016 Ramp-up of internal growth projects (innovation and higher growth countries) Bolt-on acquisitions in High Performance Materials and acrylic downstream Operational excellence Access to strategic raw materials Breakthrough projects with effects beyond 2016 Global i
Slide 25: Organic growth and acquisitions to support EBITDA growth
Organic growth and acquisitions to support EBITDA growth EBITDA (€m) Organic growth +144 Cost Inflation on Acquisitions Growth savings fixed costs projects and disposals 1,280 Others +140 996 ● Small to mid-size acquisitions ● Innovation ● High ● Geographical Performance expansion Materials and acry
Slide 26: Contribution of organic growth projects to EBITDA
Contribution of organic growth projects to EBITDA 2EHA Acrylic US AA expansion MA PVDF expansion (+50% - China) HFC125 expansion (+30% - China) Hipro expansion (x3 - China) Coating resins (new - China) Thiochemicals (new platform - Malaysia) 2012 2013 2014 2015 2016 Cumulated contribution to EBITDA
Slide 27: A rich pipeline of R&D projects
A rich pipeline of R&D projects Today Short-medium term Longer term PVDF for Electrolytes for Li-sulfur batteries Li-ion batteries Li-ion batteries (Oxis) New energies PVDF film for LGWP Thin layer solar pannel Fluorogases photovoltaic Metathesis process Renewable PMMA RNew® PA11/ PA10 Acrylic acid
Slide 28: High Performance Materials roadmap to 2016
High Performance Materials roadmap to 2016 2016 ambition ● 38% of Group sales World of high value and ● 18% EBITDA margin innovative solutions Strategic drivers ● Leverage megatrends through innovation in lightweight ● Specialty polyamides materials, new energies and renewable raw materials ● Fluoro
Slide 29: Industrial Specialties roadmap to 2016
Industrial Specialties roadmap to 2016 2016 ambition Global and integrated ● 30% of Group sales industrial niches ● 17% EBITDA margin ● Thiochemicals Strategic drivers ● Fluorogases ● Reinforce global industrial footprint ● PMMA ● Secure strategic supplies ● Hydrogen peroxide ● Expand in higher grow
Slide 30: Coating Solutions roadmap to 2016
Coating Solutions roadmap to 2016 2016 ambition Solutions for decorative paints, industrial coatings and ● 32% of Group sales high-growth acrylic applications ● 15% EBITDA margin Strategic drivers ● Acrylic monomers ● Coating resins ● Increase downstream integration Down- ● UV-curing (Sartomer) stre
Slide 31: Conclusion
Conclusion Strong FY’12 performance in a volatile and challenging macro-environment High quality portfolio of profitable niche chemical businesses Dividend increase to reflect confidence in our mid-term outlook High density of organic growth projects supporting targeted growth strategy Confident for
Slide 32: 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
Slide 33: Arkema CITI West Coast Institutional Investor Symposium 2013
Arkema CITI West Coast Institutional Investor Symposium 2013 San Francisco – March 13th-14th, 2013 Thierry Lemonnier CFO
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