Arkema Sa · EURONEXT:AKE
Arkema Sa — European Chemicals Conference 2013
29 slides from Arkema Sa's conference presentation, Dec 3, 2013
Slide 1: Arkema – European Chemicals Conference 2013
Arkema European Chemicals Conference 2013 Bank of America Merrill Lynch London – December 3rd, 2013 Thierry LE HENAFF Chairman and CEO
Slide 2: High value portfolio, strong base for future growth
High value portfolio Strong base for future growth
Slide 3: Arkema 2012 profile
Arkema 2012 profile Sales by segment Sales of €6.4 bn High Coating 33% 34% Solutions Performance EBITDA of €996 m Materials 33% Industry-leading margin at 15.6% Industrial Specialties 13,925 employees in 40 countries Sales by region Capex of €438 m R&D at 2.3% of sales Europe 40% 34% North America S
Slide 4: Among top players on 90% of our sales
Among top players on 90% of our sales POSITION MARKET SIZE (mT) MAIN PLAYERS % GROUP SALES • Evonik #1 Specialty polyamides • Ems 0.2 14% #1 PVDF • Solvay • Akzo Nobel #2 Organic peroxides 0.2 • United Initiators 4% #1 Thiochemicals 0.7 • Chevron Phillips 9% • Dupont #1/2 Fluorogases 1.6 • Honeywell
Slide 5: Sales breakdown by business
Sales breakdown by business Organic Peroxides Acrylic monomers Coating High 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** 7 * Akzo Nobel, BASF, Clariant, Lanxess, Solvay ** Dow, Celanese, Chemtura
Slide 8: Solid balance sheet and financing
Solid balance sheet and financing Shareholders’ equity € 2.3 bn Rating Net debt € 900 m Standards & Poor’s BBB Stable outlook Gearing 39 % Moody’s Baa2 Stable outlook Net debt / EBITDA 0.9x Figures at 31st December 2012 €1.9bn financing resources (€m) Average maturity > 4 years (€m) 700 500 480 Cred
Slide 9: Clear strategic roadmap
Clear strategic roadmap « Become a world leader in specialty chemicals and advanced materials » Deliver profitable growth and solid cash flow Accelerate development of High Performance Materials Intensify our presence in high growth countries (China, India, Brazil, Middle East) Increase downstream i
Slide 10: 2016 financial targets
2016 financial targets € 8 bn 16 % Sales EBITDA margin EBITDA (€m) 1,280 996 + 140 + 144 Acquisitions and < 40 % Organic growth divestments Gearing 2012 2016e 10
Slide 11: 2016 targets by segment
2016 targets by segment High Performance Materials 38% of total sales 18% EBITDA margin Industrial Specialties 30% of total sales 17% EBITDA margin Coating Solutions 32% of total sales 15% EBITDA margin 11
Slide 12: Development in high growth countries
Development in high growth countries Sales by region (€bn) North America Europe € 8 bn Asia and RoW 2.5 2.8 € 6.4 bn 2.8 2.4 30% 2.2 1.7 Asia and RoW 26% North America 35% 34% 2012 2016e 2012 2016e 2012 2016e Europe 40% 35% 2012 2016e 12
Slide 13: Industrial projects to support organic growth
Industrial projects to support organic growth 2012 2013 2014 ● 2EHA (Acrylic derivates) ● Acrylic acid and esters ● Thiochemical platform (United States) (United States) (Malaysia) ● Superabsorbents* ● PVDF expansion (Acrylic derivates) ● Several other projects (China) (France) under consideration ●
Slide 14: 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 15: 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 solar LGWP Thin layer pannel Fluorogases photovoltaic Metathesis process Renewable PMMA RNew® PA11/ PA10 Acrylic acid
Slide 16: Acquisition strategy
Acquisition strategy 2016 targets: + €140m EBITDA from acquisitions and divestments Small to mid-size bolt-on acquisitions Proven track record in acquiring businesses and executing integration ● €1.2bn cash out on acquisitions since spin off ● + €220m full year EBITDA net impact of acquisitions and
Slide 17: Cash allocation over 2013 - 2016
Cash allocation over 2013 - 2016 €3.6 bn cash resources available Cumulative Capex cash flow Borrowing capacity €1.7 bn from operating activities M&A, dividends and others €1.9 bn M&A M&A Dividends Dividends Others 17
Slide 18: Main objectives 2020
Main objectives 2020 EBITDA and EBITDA margin (%) Sales (€bn) Close to 16% 17% ~15% 10 8 6.5 6% 5.7 2005 2012e 2016e 2020e 2005 2012e 2016e 2020e Gearing < 40% 18
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: 3rd quarter 2013 financial results and main facts
3rd quarter 2013 financial results and main facts 20
Slide 21: Solid performance in less favorable market conditions
Solid performance in less favorable market conditions Sales (€m) EBITDA (€m) and EBITDA margin (%) 1,606 1,495 16.6% 15.6% 3Q’13 sales close to 3Q’12 sales at constant scope of Solid EBITDA margin level business and exchange rates Variation of EBITDA vs 3Q’12 concentrated on 3 elements: Positive YoY
Slide 22: Key drivers of Arkema 3Q'13 performance
Key drivers of Arkema 3Q’13 performance Solid EBITDA margin in a more challenging environment than last year Contrasted market conditions in the continuity of 2Q’13 ● Stabilization in Europe at a low point which might be a base for slow recovery next year ● Market conditions remain solid in North Am
Slide 23: Sales bridge
Sales bridge Sales (€m) Scope of FX rate – Volume Price business translation effect 1,606 +0.9% (2.0)% (2.5)% (3.4)% 1,495 ● Volume up ● Mainly ● Mainly in YoY in Coating Fluorogases High Solutions and different Performance ● Strong base of product mix in Materials comparison of High segment 3Q’12 i
Slide 24: 3Q'13 key figures
3Q’13 key figures In €m (except EPS) 3Q’12 3Q’13 variation Sales 1,606 1,495 -6.9 % EBITDA 266 233 -12.4 % EBITDA margin 16.6% 15.6% Recurring operating income 189 154 -18.5 % Adjusted net income 123 101 -15.1 % Non recurring items - (37) - Net income (group share) 116 65 -44.0 % Adjusted EPS (dilut
Slide 25: High Performance Materials
High Performance Materials In €m 3Q’12 3Q’13 variation Sales 548 451 -17.7 % EBITDA 107 85 -20.6 % EBITDA margin 19.5% 18.8% Recurring operating income 80 59 -26.3 % High EBITDA margin in less favorable market conditions Sales down -6% at constant scope of business and exchange rate ● Divestment of
Slide 26: Industrial Specialties
Industrial Specialties In €m 3Q’12 3Q’13 variation Sales 496 461 -7.1 % EBITDA 98 74 -24.5 % EBITDA margin 19.8% 16.1% Recurring operating income 70 45 -35.7 % Good performance of Thiochemicals and H2O2 Weakness in fluorogases impacting segment’s performance ● Performance of 3Q’13 in the continuity
Slide 27: Coating Solutions
Coating Solutions In €m 3Q’12 3Q’13 variation Sales 557 574 +3.1 % EBITDA 78 79 +1.3 % EBITDA margin 14.0% 13.8% Recurring operating income 57 55 -3.5 % +3% sales at €574m ● Strong volume growth supported both by acrylic monomers and coating resins Resilient performance with 14% EBITDA margin ● Desp
Slide 28: Outlook
Outlook Traditional year-end seasonality By regions, macro environment of 4Q’13 expected to be in the continuity of previous quarters High Performance Materials EBITDA of 4Q’13 expected to be above 4Q’12 supported by stronger demand in oil & gas market, notably for Filtration and Adsorption business
Slide 29: 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