Arkema Sa · EURONEXT:AKE
Arkema Sa — Berenberg Chemicals Sector, London (October 2011)
36 slides from Arkema Sa's conference presentation, Oct 4, 2011
Slide 1: Arkema – Berenberg Bank, London, October 4th, 2011
Arkema Berenberg Bank Berenberg Chemicals Sector London, October 4th, 2011
Slide 2: 2nd Quarter 2011 record performance
2nd Quarter 2011 record performance XXXXXXX XXXX XXXX
Slide 3: Best Quarter ever
Best Quarter ever +10.5% net sales Sales (€m) Higher pricing across all segments Strong focus on product mix Negative currency impact (€/$) +10.5% +33% EBITDA at €320m 1,605 1,773 Contribution from internal projects Elevated industry utilization rate (except Vinyls) 2Q’10 2Q’11 80% EBITDA improvemen
Slide 4: Key figures
Key figures in €m (except EPS) 2Q’10 2Q’11 Variation Sales 1,605 1,773 +10.5% EBITDA 241 320 +33% EBITDA margin 15.0% 18.0% Recurring operating income 169 248 +47% Net income (group share) 119 184 +55% Adjusted EPS (diluted) 1.92 3.01 +57% 4
Slide 5: Sales bridge
Sales bridge Sales (€m) Scope of FX rate - Price Volumes business translation effect +15.8% -0.5% -0.2% -4.6% +2.1% for Divestment of Industrial Vinyls pipe Chemicals 1,773 business in France Strong price and 1.0 in June 2011 1,605 increases Performance offsetting Products higher raw material costs
Slide 6: 80% of 2Q'11 EBITDA growth outside Acrylic Monomers or Vinyls
80% of 2Q’11 EBITDA growth outside Acrylic Monomers or Vinyls EBITDA (€m) +€5m +€61m Corporate +€12m +€1m Vinyls Acrylic Monomers Industrial Chemicals w/o Acrylic Monomers + 320 Performance Products 241 2Q’10 2Q’11 6
Slide 7: Key factors of 2Q'11 performance
Key factors of 2Q’11 performance Benefit from excellent positions on fast growing markets Photovoltaics, animal nutrition, electronics, oil & gas recovery, water treatment, etc Significant contribution from internal achievements New production units started in China (Fluorochemicals) Asia: 20% of Ar
Slide 8: Contribution by segment
Contribution by segment Vinyl Industrial Performance Products Chemicals Products +13% Sales (€m) 961 854 +13% +2% 504 448 298 303 2Q’10 2Q’11 2Q’10 2Q’11 2Q’10 2Q’11 EBITDA (€m) and 23.8% 20.6% EBITDA margin (%) 229 176 19.0% 17.0% 96 0 1 76 2Q’10 2Q’11 2Q’10 2Q’11 2Q’10 2Q’11 8
Slide 9: Highlights of the Quarter
Highlights of the Quarter Rapid ramp up of the fluoropolymer Kynar® production unit started in March in China giving Arkema a strong production base in Asia Participation in Canada Fluorspar Inc to secure long term competitive access to fluorspar, key raw material for Fluorochemicals Announcement of
Slide 10: New Kynar production unit in China
New Kynar® production unit in China Started as scheduled in March 2011 Providing industrial presence in Asia +50% capacity scheduled by mid-2012 Arkema sole PVDF producer with 3 world-scale production units in North America, Europe and Asia Strong growth supported by new applications in new energies
Slide 11: Investment in Canada Fluorspar Inc
Investment in Canada Fluorspar Inc Secure long term access to strategic raw material Diversification of fluorspar sources Covering needs for North American operations Joint operation of fluorspar mine in Canada Arkema Fluorspar HF Fluorogases CFI CFI: Canada Fluorspar Inc (publicly traded in Calgary
Slide 12: World-class Thiochemicals platform in Asia
World-class Thiochemicals platform in Asia First industrial thiochemicals platform in Asia for Arkema Methionine production for the fast growing animal nutrition market Partnership with CJ on a unique bio-technology process JV1 (majority stake: Arkema) JV2 (majority stake: CJ) Thiochemicals platform
Slide 13: Industrial Chemicals: outstanding profitability sustained by robust end markets
Industrial Chemicals: outstanding profitability sustained by robust end markets in €m 2Q’10 2Q’11 Variation Sales 854 961 +12.5% EBITDA 176 229 +30% EBITDA margin 20.6% 23.8% Recurring operating income 140 195 +39% Second quarter in a row at 24% EBITDA margin Fluorochemicals driven by strong positio
Slide 14: Performance Products: volumes and prices support record EBITDA
Performance Products: volumes and prices support record EBITDA in €m 2Q’10 2Q’11 Variation Sales 448 504 +12.5% EBITDA 76 96 +26% EBITDA margin 17.0% 19.0% Recurring operating income 53 73 +38% All Business Units contributing to strong financial performance Benefit from growth momentum in Asia inclu
Slide 15: Vinyl Products: EBITDA at break-even
Vinyl Products: EBITDA at break-even in €m 2Q’10 2Q’11 Variation Sales 298 303 +1.7% EBITDA - 1 na Recurring operating income (13) (14) na Challenging construction market in Europe +15% price increase vs 2Q’10 offsetting higher energy and raw material costs Higher caustic soda prices vs 2Q’10 Increa
Slide 16: 1st half 2011 key figures
1st half 2011 key figures XXXXXXX XXXX XXXX
Slide 17: Full set of record figures on strong growth
Full set of record figures on strong growth +20% sales (€m) +61% EBITDA (€m) +20% 3,506 +61% 607 2,913 378 1H’10 1H’11 1H’10 1H’11 Adjusted EPS (€) EBITDA margin (%) x2.1 5.52 17.3% 13.0% 2.60 1H’10 1H’11 1H’10 1H’11 17
Slide 18: Improvement of Arkema margin well above industry average
Improvement of Arkema margin well above industry average Evolution of EBITDA margin (%) Arkema Peers* 17.3% 13.0% 10.6% 8.9% 9.5% 1H’05 1H’07 1H’08 1H’10 1H’11 * Peers : Akzo Nobel (Specialty Chemicals), BASF (excl. Oil & Gas), Celanese, Clariant, Dow, Dupont, Lanxess (consensus), Rhodia, Solvay, Te
Slide 19: 1H'11 key figures
1H’11 key figures in €m (except EPS) 1H’10 1H’11 Variation Sales 2,913 3,506 +20.4% EBITDA 378 607 +61% EBITDA margin 13.0% 17.3% Recurring operating income 236 464 +97% Net income (group share) 159 335 x 2.1 Adjusted EPS (diluted) 2.60 5.52 x 2.1 19
Slide 20: Sales bridge
Sales bridge Sales (€m) Scope of FX rate - Volumes business translation effect Price +3.0% +1.1% -1.9% 18.2% +5% for 3,506 Industrial 2,913 Strong price Chemicals increases on + higher raw Performance material costs Products 1H’10 1H’11 20
Slide 21: Pursuing Arkema positioning
Pursuing Arkema positioning Sales by region 1H’10 1H’11 RoW RoW Asia Asia 17% 20% North North America 29% America 28% €2.9bn €3.5bn sales sales 49% 48% Europe Europe Sales by segment Performance Vinyls Performance Vinyls 20% 18% Products 28% Products 28% €2.9bn €3.5bn sales sales 52% 54% Industrial
Slide 22: Strong financial situation
Strong financial situation Net debt maintained low despite negative impact on working capital of: seasonality (stronger sales in 2Q’11 vs end 2010) increase of selling prices and raw material costs Target for working capital at year end confirmed below 15% Net debt of June 2011 includes: Payment of
Slide 23: A new leader in coating materials
A new leader in coating materials XXXXXXX XXXX XXXX
Slide 24: Acquisition of Total specialty resins: a major milestone for mid-term M&A objective
Acquisition of Total specialty resins: a major milestone for mid-term M&A objective Closing of acquisition in line with planned timetable on July 1st Enterprise value: €550m Detail of Purchase Price Allocation to be provided in 3Q’11 1H’11: estimated sales at €490m +13% vs 1H’10 supported by strong
Slide 25: Comprehensive range of products
Comprehensive range of products Main Business Units Technology owned by Arkema INDUSTRIAL CHEMICALS 2% Photocure 5% 2% Powder •• Acrylic AcrylicMonomer Monomer 8% (resins and additives) •• Coating Coatingresins** resins** High solids •• Sartomer Sartomer 9% Global Waterborne industrial •• Coatex Coa
Slide 26: Strong basis for future growth
Strong basis for future growth Commercial synergies An extensive range of resins & additives provided to global key accounts Cross-fertilization opportunities Expected recovery of demand Europe and North America still below pre-crisis level Asia: +10% to +15% / year growth Well positioned on green i
Slide 27: Building a world of specialties
Building a world of specialties XXXXXXX XXXX XXXX
Slide 28: Emergence of a strong specialty portfolio
Emergence of a strong specialty portfolio EBITDA (€m) - (2nd Quarter figures) Structural achievements 326 Productivity Growth in Asia Acrylic Innovation monomers 252 Portfolio repositioning through M&A Industrial Chemicals (w/o Acrylic monomers) & Performance Products 141 Fluorogas Fluoropolymers Th
Slide 29: Thiochemicals: promising new developments
Thiochemicals: promising new developments Thiochemicals in Industrial Chemicals Demand by end markets in H2S derivatives 15% Others 25% 35% Animal nutrition 2010 (agro, pharma, electronics, etc.) sales €3.1bn Polymers 15% 25% Oil & Gas A niche market ~ 700 kT globally Expected growth: ~5% / year Ark
Slide 30: Fluorogases: new generation gases
Fluorogases: new generation gases Fluorogases in Industrial Chemicals Demand by end-markets Foam Refrigeration / air conditioning 17% 10% A regulation driven market Others 10% Montreal Protocol Kyoto Protocol 2010 Low sales 50% CFC HCFC HFC GWP €3.1bn Fluoro- 1st 2nd 3rd 4th generation generation ge
Slide 31: PMMA: benefits from new LED applications
PMMA: benefits from new LED applications PMMA in Industrial Chemicals Demand by end-markets 21% Others 18% 27% Signs & displays 2010 sales Automotive 14% €3.1bn 5% Electronics 7% 17% Sanitaryware 12% Construction Lighting fixtures A niche market ~ 1.6 MT globally Expected growth rate : ~4% / year Ar
Slide 32: Fluoropolymers: outstanding growth driven by advanced technology
Fluoropolymers: outstanding growth driven by advanced technology PVDF Kynar® in Performance Products Main end-markets Coatings High end coatings PVDF Kynar® 2010 Chemical Processing Industry, Industry sales Oil & gas, Wire & Cable €1.7bn 49% Technical New energies Photovoltaics (protective films) &
Slide 33: Specialty Polyamides: improving product mix
Specialty Polyamides: improving product mix Specialty Polyamides in Performance Products petroleum castor plants - fossil resource - - renewable resource - Technical 2010 49% Polymers sales Polyamide 12 Polyamide 11 €1.7bn Specialty Polyamides A micro-niche market ~ 100kT globally for the whole Spec
Slide 34: Outlook
Outlook XXXXXXX XXXX XXXX
Slide 35: Quite confident in an excellent 2011
Quite confident in an excellent 2011 In 2H’11, Arkema will continue to implement its internal projects: Further growth in Asia • PVDF Kynar® unit running at full capacity • Start up of Coatex unit in 3Q’11 Innovative solutions to sustainable development Integration of Total specialty resins (€35m co
Slide 36: 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
Arkema — Berenberg Chemicals Sector, London (October 2011) on 6ix