Arkema Sa · EURONEXT:AKE
Arkema Sa — The Premium Review Conference, Société Générale 2011
29 slides from Arkema Sa's conference presentation, Nov 30, 2011
Slide 1: Arkema: The Premium Review Conference, Société Générale
Arkema The Premium Review Conference, Société Générale Paris, November 30th, 2011
Slide 2: Leadership positions in many niche markets
Leadership positions in many niche markets Commodities Specialties • Mature markets • High growth potential • Many players • Limited number of players • Easy available technology • Proprietary technologies Ranking Technical Polymers # 1/2* Functionnal Additives # 2** Specialty Chemicals # 2*** Acryl
Slide 3: Marked differences: market size and presence
Marked differences: market size and presence 40 Size of worldwide market by business (mt) Industrial Chemicals and Performance Products 4.2 3.2 1.6 0.7 1.4 0.1 0.03 PVC Acrylic acid PMMA Thiochemicals Fluorogas H2O2 Specialty PA PVDF Sales by region (9m’11) Vinyls Industrial Chemicals and Performanc
Slide 4: 3Q'11 results and outlook
3Q’11 results and outlook XXXXXXX XXXX XXXX
Slide 5: Q3'11 EBITDA reflects Arkema transformation
Q3’11 EBITDA reflects Arkema transformation EBITDA (€m) 263 246 127 134 101 101 87 Q3 2005 Q3 2006 Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 5
Slide 6: 3Q'11 key figures
3Q’11 key figures in €m (except EPS) 3Q’10 3Q’11 Variation Sales 1,559 1,849 +18.6% EBITDA 246 263 +6.9% EBITDA margin 15.8% 14.2% Recurring operating income 172 184 +7.0% Recurring operating margin 11.0% 10.0% Net income (group share) 130 109 (16.2)% Adjusted EPS (diluted) 2.09 2.09 - 6
Slide 7: +19% sales versus 3Q'10
+19% sales versus 3Q’10 Sales (€m) Scope of FX rate - business translation effect Price +13.2% -3.2% Volumes +12.3% -3.7% 1,849 Mainly specialty 1,559 1.0 resins from Total Strong comparison Pricing power and base of 3Q’10 and higher value challenging PVC in product mix Europe 3Q’10 3Q’11 7
Slide 8: Industrial Chemicals: delivering a solid performance
Industrial Chemicals: delivering a solid performance in €m 3Q’10 3Q’11 Variation Sales 800 1,047 +30.9% EBITDA 159 172 +8.2% EBITDA margin 19.9% 16.4% Recurring operating income 122 131 +7.4% Positive price effect on higher raw material costs After untypical 2010 summer, return to more traditional s
Slide 9: Performance Products: excellent growth momentum
Performance Products: excellent growth momentum in €m 3Q’10 3Q’11 Variation Sales 470 519 +10.4% EBITDA 92 102 +10.9% EBITDA margin 19.6% 19.7% Recurring operating income 70 79 +12.9% 3Q EBITDA at record high Strong performance of all Technical Polymers Steady demand in Asia (31% of segment sales in
Slide 10: Vinyl Products: break-even in challenging environment
Vinyl Products: break-even in challenging environment in €m 3Q’10 3Q’11 Variation Sales 284 278 (2.1)% EBITDA 4 0 na Recurring operating income (10) (14) na Lower volumes in a challenging construction market in Europe Price increases vs 3Q’10 offsetting higher energy and raw material costs Higher ca
Slide 11: Significant cash generation
Significant cash generation Net debt at €653m Gearing at 25% after acquisition of in €m 3Q’11 Total specialty resins EBITDA 263 Working capital excluding Total resins: Working capital variation 66 -7% vs end of June 2011 Despite inventory build up related to Recurring capex (89) planned maintenance
Slide 12: Successful diversification of financing sources
Successful diversification of financing sources Diversified financing sources Maturity of financial debt (m€) Revolving Revolvingcredit creditfacility: facility:€300m €300m 700 Securitization Securitizationprogram: program:€240m €240m 500 300 Revolving 240 Revolvingcredit creditfacility: facility:€7
Slide 13: 2011 outlook
2011 outlook 4th quarter will reflect the traditional seasonal weakness of year-end (exception in 2010) In the current uncertain macro-economic environment, we anticipate a growing caution of customers on their year-end inventory level, particularly in PVC, architectural coatings and refrigeration.
Slide 14: A strong pipeline of projects
A strong pipeline of projects XXXXXXX XXXX XXXX
Slide 15: Smooth integration of Total specialty resins
Smooth integration of Total specialty resins Integration on July 1st, 2011 +€218m net contribution on Group sales in 3Q’11 €535m cash outflow (including €31m cash acquired) Preliminary Purchase Price Allocation Goodwill: €136 m In 3Q’11, ~€(35)m non recurring items booked Including €(29)m inventory
Slide 16: Planned acquisition of a complete range of Specialty Chemicals from SEPPIC
Planned acquisition of a complete range of Specialty Chemicals from SEPPIC Acquisition of a world class industrial site in Antwerp (Belgium) Excellent fit with Arkema’s strategy Complement existing range of Specialty Chemicals • Specialty surfactants of Specialty Chemicals BU – Ceca • Extended offer
Slide 17: Project to expand in specialty polyamides
Project to expand in specialty polyamides Project to acquire 2 Chinese companies HiPro Polymers, a fast-expanding producer of bio-sourced polyamide 10.10 Casda Biomaterials, world leader in sebacic acid, derived from castor oil and used in particular to manufacture PA 10.10 Acquisition fully in line
Slide 18: Project to divest Vinyls
Project to divest Vinyls XXXXXXX XXXX XXXX Project subject to the information / consultation of relevant Work Councils
Slide 19: Project rationale
Project rationale Since spin-off, Arkema has: Developed strong leadership positions in Industrial Chemicals or niche markets in Performance Products Undertaken a significant restructuring plan to improve profitability of Vinyls End 2010, Arkema announced its vision for 2015 Accelerate growth in Indu
Slide 20: Project overview
Project overview Project to sell the Vinyl Products segment* to Klesch Group Creation of a European integrated and independent PVC leader Dedicated management team, strong balance sheet and clear industrial project Klesch Group specialized in the development of commodity-related industrial businesse
Slide 21: Transaction scope and key points
Transaction scope and key points 2,630 employees transferred in accordance with applicable legislation End 2011, activities to be divested will be classified as discontinued operations ~ € 470 million exceptional net expenses to be booked in 2011 ~ € 370m exceptional net write-offs related to PPE, w
Slide 22: Arkema pro forma P&L (unaudited)
Arkema pro forma P&L (unaudited) Reported Transaction Pro forma €6.5bn in €m (except EPS) 2010 impact 2010* €6.5bn Pro forma Pro forma Sales 5,905 1,036 4,869 2011e sales 2011e sales Including Total Including Total resins, Seppic, resins, Seppic, EBITDA 790 (19) 809 and HiPro and HiPro // Casda Casd
Slide 23: Arkema positioned as a specialty leader
Arkema positioned as a specialty leader XXXXXXX XXXX XXXX Project subject to the information / consultation of relevant Work Councils
Slide 24: Arkema tomorrow
Arkema tomorrow Global leadership positions in all business lines A portfolio focused on specialty businesses with 2 strong growing segments: Industrial Chemicals and Performance Products Well-balanced global presence Competitive world-scale facilities Solid balance sheet and diversified financing s
Slide 25: Well balanced presence
Well balanced presence Sales by region (2011e) Arkema including Vinyls Arkema excluding Vinyls Asia and RoW Europe Asia and RoW Europe 24% 26% 40% 48% 28% 34% North America North America Strong exposure Strong exposure to emerging to emerging markets markets 25 Project subject to the information / c
Slide 26: Impact on portfolio
Impact on portfolio Sales by segment (2011e) Arkema including Vinyls Arkema excluding Vinyls Vinyl Products Performance Performance Coatings Products 16% Products 28% ~ 1/2 33% Industrial 56% Chemicals Industrial Chemicals Industrial Specialties ~ 1/2 26 Project subject to the information / consulta
Slide 27: Profitability
Profitability EBITDA (€m) and EBITDA margin (%) 16.6% 13.4% 10.0% 9.9% 9.1% 7.6% 6.2% 7.0% 355 330 518 427 310 340 790 809 2005 2007 2009 2010 Arkema EBITDA Arkema EBITDA w/o Vinyls * Pro forma unaudited figures. Based on management estimates 27 Project subject to the information / consultation of r
Slide 28: Outline of Arkema tomorrow
Outline of Arkema tomorrow €6.5bn proforma sales* Including full year acquisition impact (Total Specialty Resins, Seppic and HiPro / Casda) Excluding Vinyls Reduced cyclicality Strong balance sheet Net debt below 1x 2011e EBITDA 2015 EBITDA target increased at € 1,050m without Vinyls** Reaffirm curr
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
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