Arkema Sa · EURONEXT:AKE
Arkema Sa — Investor Day (July 2017)
17 slides from Arkema Sa's investor day presentation, Jul 10, 2017
Slide 1: Arkema Capital Markets Day 2017
Slide 2: Finance
Finance Thierry Lemonnier, Chief Financial Officer
Slide 3: Trading update: delivering another very strong quarter in 2Q'17
Trading update: delivering another very strong quarter in 2Q’17 2015 Capital Markets Day target Record 1st quarter 2017 2nd quarter 2017 fully in line with expectations High Performance Materials: benefits from Den Braven integration and innovation in Advanced Materials offsetting temporary impact o
Slide 4: Delivering targets set at 2015 Capital Markets Day
Delivering targets set at 2015 Capital Markets Day 2015 Capital Markets Day targets Achievements EBITDA €1.3 bn in 2017 Fully on track Net cash flow x3 versus 2014 EBITDA to cash conversion Increase to 35% from 25% Capex ~5.5% of sales Working capital ~15% of sales Gearing ~40% Net debt to EBITDA ~1
Slide 5: Structural step-up in cash generation
Structural step-up in cash generation Free cash flow* In €m EBITDA +426 +52% growth over 2 years in line with the roadmap defined at the 2015 Capital Markets Day x3 Disciplined capex approach Recurring capex at 5.6% of sales +145 Strict working capital management Working capital at 14.5%** of Group
Slide 6: Cash allocation over the 2015 - 2016 period
Cash allocation over the 2015 - 2016 period €0.8 bn capex €0.9 bn free cash flow generated over 2015-2016 M&A Dividend €2 bn €0.3 bn Bostik and Den Braven acquisitions From €1.9 per share in 2015 Sunclear and the activated carbon to €2.05 in 2016 and filter aid business divestments €1.5 bn net debt
Slide 7: Continue to consistently deliver superior cash generation over the long-term
Continue to consistently deliver superior cash generation over the long-term Mid/long-term assumptions Recurring capex ~5.5% of sales Working capital ~14% of sales EBITDA to free cash conversion Progressively decreasing 35% Taxes from 30% to 28% of REBIT 7 CAPITAL MARKETS DAY 10-11 JULY, 2017
Slide 8: Maintain disciplined capital allocation policy
Maintain disciplined capital allocation policy Organic growth M&A Dividend Support development Reinforce A key element of of main growth pillars current portfolio shareholder return policy Bolt-on acquisitions with Stable to growing significant synergies and divestments Targeted capex dividend every
Slide 9: Maintain capex discipline while expanding main growth pillars
Maintain capex discipline while expanding main growth pillars Cumulative capex over 2017 to 2023 Recurring capex at ~5.5% of Group sales Exceptional capex 55% maintenance 45% growth and productivity PEKK in the US Sartomer in China Growth Acrylics in the US 2 announced exceptional capex New polyamid
Slide 10: A strict acquisition policy
A strict acquisition policy Well-identified priorities… … with stringent criteria Small to mid-size bolt-on acquisitions EPS and cash accretive in year 1 or year 2 3 focus areas EV/EBITDA multiple after synergies Adhesives (in priority) below Arkema’s multiple after 4 to 5 years Advanced materials M
Slide 11: Successful and regular M&A activity
Successful and regular M&A activity €3.7 bn sales acquired since spin-off Total sales acquired (in €m) Number of acquisitions Regular acquisition stream 1 800 Proven ability to acquire and 1 600 2 integrate small to important 1 400 acquisitions 1 200 Since spin-off, acquisitions focused 1 000 2 on 2
Slide 12: A strong and balanced debt structure
A strong and balanced debt structure €3.8 bn of financial resources €2.6 bn of financial resources with maturity beyond 3 years In €m In €m 1.5% 1.5% 4.75% 700 900 4.0% 3.85% 900 900 2,230 700 500 480 3.125% 700 150 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Mid- and LT bonds* Credit lin
Slide 13: Financial policy principles
Financial policy principles Financial principles Achievements Ratings revised upwards in November 2016 Maintain solid investment grade rating Standard & Poor’s: BBB (stable outlook) Moody’s: Baa2 (stable outlook) Maintain permanent liquidity reserves in excess €1.6 bn current liquidity reserves of €
Slide 14: A return on capital employed above 10% over the long term
A return on capital employed above 10% over the long term Return on capital employed* 𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅 − 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖 𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡 𝑁𝑁𝑁𝑁𝑁𝑁 𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑 + 𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠 𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒 at least…
Slide 15: Key take-aways
Key take-aways Permanent focus on Disciplined cash allocation: Strict financial discipline: cash generation dividend, capex, M&A maintain solid investment grade rating ROCE of at least 10% 15 CAPITAL MARKETS DAY 10-11 JULY, 2017
Slide 16: Glossary
Glossary Recurring operating income (REBIT): is calculated as the difference between operating income and other income and expenses. It excludes the depreciation and amortization resulting from the revaluation of tangible and intangible assets as part of the allocation of purchase price of acquired
Slide 17: 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