Arkema Sa · EURONEXT:AKE
Arkema Sa — ODDO Sustainability Forum 2021
36 slides from Arkema Sa's conference presentation, Jun 15, 2021
Slide 1: Arkema - ODDO Sustainability Forum
ARKEMA ODDO SUSTAINABILITY FORUM 15 JUNE 2021
Slide 2: Arkema in a Snapshot
ARKEMA IN A SNAPSHOT INNOVATIVE M&A CHEMISTRY
Slide 3: Arkema at a Glance
ARKEMA AT A GLANCE 2020 SALES SPLIT Specialty Materials 82% / 89% pro forma 2020* 4% 8% 32% 25.5% 7% 27% 27% 6% 24.5% Businesses End markets 36% Regions 18% 24.5% 25.5% 17% 18% 33% 17% Adhesive Solutions Coating Solutions General industry Building & Construction Europe Asia Advanced Materials Interm
Slide 4: Robust 2020 Financial Performance in the Covid-19 Context
ROBUST 2020 FINANCIAL PERFORMANCE IN THE COVID-19 CONTEXT Relativ e to 2019 Specialty Materials -12% Relativ e to 2019 Intermediates -39% Volumes -4.3% 1,474 1,457 1,391 8.8 8.7 8.3 7.7 7.9 1,189 1,182 7.5 1,057 2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020 Sales (€bn) EBITDA (€m) 4 OD
Slide 5: Excellent Cash Flow Generation
EXCELLENT CASH FLOW GENERATION in €m 667 651 EBITDA to cash conversion rate Record lev el of 67% in 2020 565 499 442 426 Strict working capital management 11.8% of sales at end-December 2020 Recurring and exceptional capital expenditure €600 m in 2020 (-€100 m v s initial budget) 2015 2016 2017 2018
Slide 6: Well Established Financial Resources
WELL ESTABLISHED FINANCIAL RESOURCES in €m 1,000 Refinancing under favorable conditions 900 average maturity of 5.6 years 1.5% 700 1.5% 500 First-ever issuance of a green bond 400 0.75% with a 6-year maturity for €300 m 2.75% 300 300 (PA11 Singapore plant) 1.5% 150 0.125% 3.125% Solid financial rati
Slide 7: High Shareholder Return
HIGH SHAREHOLDER RETURN 2.50 Return of the dividend to pre-Covid level 2.50 2.30 2.20 Payout ratio 49% Yield 2.7% (as a % of the share price at 31/12/2020) 2017 2018 2019 2020 Share buybacks in 2021 Dividend (euros / share) €300m share buyback program ov er a 6 months per financial year 1 period lau
Slide 8: We Act and Innovate for People and the Planet
WE ACT AND INNOVATE FOR PEOPLE AND THE PLANET
Slide 9: Arkema Corporate Social Responsibility Policy
ARKEMA CORPORATE SOCIAL RESPONSIBILITY POLICY OUR 3 COMMITMENTS Cultivate an open Deliver sustainable Manage our activities dialogue and close solutions driven by as a responsible relations with our innovation manufacturer stakeholders Solutions that Safety of people Ethics address societal an
Slide 10: Structuring Programs Supporting Sustainable Growth
3 STRUCTURING PROGRAMS SUPPORTING SUSTAINABLE GROWTH 1 2 3 ARCHIMEDES CIRCULAR CLIMATE PLAN ARCHIMEDES ECONOMY moving Movingtowards towards Contain higher A sustainable higher positive positiveimpact impact resource management global warning (Portfolioof Sustainability the portfolioAssessment) A SOL
Slide 11: Portfolio Evolution Driven by Sustainable Innovation
1|PORTFOLIO EVOLUTION DRIVEN BY SUSTAINABLE INNOVATION 5 R&D PLATFORMS SALES CONTRIBUTION Thanks to our sustainable innovations, we expect to generate NEW €400m new sales by 2024 and €1bn by 2030 PORTFOLIO SUSTAINABILITY ASSESSMENT Lightweight materials New energies NEW Target 65% of our sales contr
Slide 12: Transition to Circular Economy Is a Top Priority
2|TRANSITION TO CIRCULAR ECONOMY IS A TOP PRIORITY Maximize the use of RECENT HIGHLIGHTS renewable and/or recycled materials and packaging AGIPLAST Acquisition of a leader in high performance MATERIALS polymers regeneration Maintain products and materials in the use-loop 1ST EVER GREEN BOND €300m de
Slide 13: An Ambitious Climate Plan
3|AN AMBITIOUS CLIMATE PLAN Commitment to Paris agreement MAIN LEVERS and Science-Based Target trajectory well below 2°C Energy efficiency 6.5 & green energy 4.7 -23% -38% Greenhouse gas emissions (GHG) target for 2030 Process optimization & innovation CLIMATE ≤ 2.95 Mt eq. CO2 Suppliers commitment
Slide 14: Solid Foundation with a Reinforced Commitment to Sustainability
SOLID FOUNDATION WITH A REINFORCED COMMITMENT TO SUSTAINABILITY ENVIRONMENT 1 SAFETY Energy VOC COD 1.6 1.3 1.4 -10% -20% -42% -65% -55% -60% 1.0 < 1.0 2012 2019 2020 2030 2012 2019 2020 2030 2012 2019 2020 2030 2017 2018 2019 2020 2025 TRIR (Number of accidents per million hours worked) DIVERSITY i
Slide 15: Significant Improvement in CSR Recognition
SIGNIFICANT IMPROVEMENT IN CSR RECOGNITION 2015 2019 2020 The Sustainability Yearbook 2021 42 65 79 BRONZE AWARD Based 6th in DJSI World on SAM First integration in 2020 BB A A (Climate) C B A- Top 1% Other ratings 1st decile (global) Europe120 & Eurozone 120 indices June 2020 CAC®40 ESG 15 ODDO SUS
Slide 16: Our Long Term Ambition
OUR LONG TERM AMBITION INNOVATIVE M&A CHEMISTRY
Slide 17: A Unique Combination of Expertise in Sustainable Materials
A UNIQUE COMBINATION OF EXPERTISE IN SUSTAINABLE MATERIALS A SPECIALTY MATERIALS LEADER offering the most innovative Specialty and sustainable solutions Materials to address our customers’ current and future challenges 17 ODDO SUSTAINABILITY FORUM / 15 JUNE 2021
Slide 18: Our Ambition by 2024
OUR AMBITION BY 2024 BE A LEADER IN SUSTAINABLE AND HIGH-PERFORMANCE SPECIALTY MATERIALS Sales of €10 to 11 bn Cash generation > 40% Deconsolidation of EBITDA margin of the Intermediates 17% segment Strict financial discipline Organic growth 3 to 3.5% / year 18 ODDO SUSTAINABILITY FORUM / 15 JUNE 20
Slide 19: Each Platform Has Set Growth and Profitability Ambitions
EACH PLATFORM HAS SET GROWTH AND PROFITABILITY AMBITIONS Adhesive Solutions Advanced Materials Coating Solutions Be a consolidator of the market, Invest and innovate to support Continue to enhance focused on high performance exponential needs for materials the v alue proposition bonding and construc
Slide 20: Investments to Capture Sustainable Growth
INVESTMENTS TO CAPTURE SUSTAINABLE GROWTH Polyamide 12 PVDF PVDF +25% global capacity +50% capacity +35% capacity in Changshu, CN in Changshu, CN for batteries 2023 in Changshu, CN 2020 2022 Fluorinated specialties 1233zd capacity (15 kt/yr) in Calvert-City, US 2020 2020 Industrial adhesives 2022 W
Slide 21: Very Significant Potential in Batteries
VERY SIGNIFICANT POTENTIAL IN BATTERIES Innovative solutions to optimize performance of Li-ion batteries Lithium-ion batteries market A leader in PVDF for Li-ion battery cells Battery pack weight reduction and heat transfer Foranext® electrolyte salts Anode - Cathode + Electric vehicles Rilsan® PA
Slide 22: High Return PA11 Plant in Singapore to Support Growth from 2022
HIGH RETURN PA11 PLANT IN SINGAPORE TO SUPPORT GROWTH FROM 2022 Polyamide 11, a unique material +50% capacity in Asia 100% bio-based, from castor oil World scale PA11 plant in Singapore (including monomer) and downstream capacities in China High performance (mechanical and heat resistance) Start-up
Slide 23: Bostik on Track to Deliver Its Mid-Term Target
BOSTIK ON TRACK TO DELIVER ITS MID-TERM TARGET 16% 14% 13.1% Reach 14% EBITDA margin 12.9% in 2021 10.3% Three balanced drivers Grow high margin solutions 264 261 Strengthen operational excellence 158 Roll out acquisition strategy and implement synergies 2014 2019 2020 2021 2024 EBITDA EBITDA margin
Slide 24: Coating Solutions Segment Well Positioned to Achieve Its Targets
COATING SOLUTIONS SEGMENT WELL POSITIONED TO ACHIEVE ITS TARGETS OUR STRENGTHS OUR GROWTH INITIATIVES A unique value proposition with a resilient, integrated global supply chain Increase capacity in our existing platforms in as a solid foundation fast-growing geographies (e.g. photocurable An optima
Slide 25: Strategic Review of Intermediates Underway
STRATEGIC REVIEW OF INTERMEDIATES UNDERWAY Closing of PMMA disposal Review in progress in Fluorogases Disposal of PMMA business to Focus on specialty businesses Investigate strategic alternatives Trinseo for €1,137m for emissive applications Next step of our strategic review in Intermediates after P
Slide 26: Cash Allocation Priorities
CASH ALLOCATION PRIORITIES Estimated cash to allocate over the 5 year plan ~€3.5bn at constant leverage3 (~1.6x) SUBJECT TO MARKET CONDITIONS +25% 40-45% Reiterating our progressive dividend policy, targeting 40% payout ratio by 2024 Return to shareholders Opportunistic share buy-back program
Slide 27: Strict Financial Discipline
STRICT FINANCIAL DISCIPLINE ROCE Net debt to EBITDA ratio Solid investment grade rating >10% <2x Incl. hybrid bonds Recurring Capex Controlled working capital ~5.5% ~14% of sales of sales 27 ODDO SUSTAINABILITY FORUM / 15 JUNE 2021
Slide 28: First Quarter 2021 Results
FIRST QUARTER 2021 RESULTS EXTRACT FROM FIRST QUARTER 2021 RESULTS PRESENTATION (6 MAY 2021)
Slide 29: Q1'21 Financial Highlights
Q1’21 FINANCIAL HIGHLIGHTS up 12.7% compared to Q1'20, at constant scope and currency €2,226m sales • significant increase in volumes (+7.7%), in the continuity of the rebound already observed in Q4'20 (+5.2%) • strong momentum in most of the Group's end markets, and contribution of new developmen
Slide 30: Adhesive Solutions (25% of Group Sales)
ADHESIVE SOLUTIONS (25% OF GROUP SALES) Q1’21 KEY FIGURES In €m Q1’20 Q1’21 Change HIGHLIGHTS Sales 515 555 +7.8% ● €555m sales, up 7.8% YoY, driven by a EBITDA 69 86 +24.6% +8.6% volume increase strong momentum in construction and DIY, EBITDA margin 13.4% 15.5% notably in Europe and Asia in conti
Slide 31: Advanced Materials (31.5% of Group Sales)
ADVANCED MATERIALS (31.5% OF GROUP SALES) Q1’21 KEY FIGURES In €m Q1’20 Q1’21 Change HIGHLIGHTS Sales 652 703 +7.8% ● Volumes up 9.5% EBITDA 122 142 +16.4% strong growth in High Performance Polymers benefits of innovation and new developments EBITDA margin 18.7% 20.2% in batteries, automotive, s
Slide 32: Coating Solutions (25.5% of Group Sales)
COATING SOLUTIONS (25.5% OF GROUP SALES) Q1’21 KEY FIGURES In €m Q1’20 Q1’21 Change HIGHLIGHTS Sales 517 567 +9.7% ● +9.1% price effect, offsetting higher EBITDA 65 78 +20.0% propylene prices EBITDA margin 12.6% 13.8% ● Volumes up 5.8% REBIT 36 49 +36.1% strong dynamic in decorative paints, 3D pri
Slide 33: Intermediates (18% of Group Sales)
INTERMEDIATES (18% OF GROUP SALES) HIGHLIGHTS Q1’21 KEY FIGURES Q1’21 SALES DEVELOPMENT ● High organic growth at 17.1%, with +10.8% price effect and volumes effect of 6.3% In €m Q1’20 Q1’21 Change Volumes +6.3% more favorable market conditions in acrylics in Asia, Sales 397 395 (0.5)% still chal
Slide 34: Q1'21 Cash Flow
Q1’21 CASH FLOW RECONCILIATION OF EBITDA TO NET CASH FLOW In €m Q1’20 Q1’21 Tax rate EBITDA 300 358 ~ 22% of REBIT (excl. exceptional items) Current taxes (26) (49) Cost of debt (25) (13) Working capital Change in working capital and fixed assets payables 1 (181) (187) 12.7% of annualized sales at e
Slide 35: Outlook
OUTLOOK The positive market dynamics observed in the first quarter is continuing, supported by strong demand in the construction and DIY markets, and several industrial markets that are important for the Group Thanks to its innovation for sustainable development and recent industrial capacity expans
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. In the current context, where the Covid-19 epidemic persists across the world, and the evolution of the situat