Arkema Sa · EURONEXT:AKE
Arkema Sa — Investor Day (2015)
15 slides from Arkema Sa's investor day presentation, 2015
Slide 1: Finance
FINANCE Thierry LEMONNIER CFO
Slide 2: Arkema's Financial Framework
ARKEMA’S FINANCIAL FRAMEWORK Maintain investment grade rating Gearing at ~40% in 2017 Debt maturity Net debt / EBITDA ~1.5x in 2020 ≥ 3 years 4 PRINCIPLES Liquidity reserves Optimize ≥ €0.5 bn cost of debt 2 CAPITAL MARKETS DAY 2015
Slide 3: Strong and Balanced Financial Structure
STRONG AND BALANCED FINANCIAL STRUCTURE €3.4 BN LONG-TERM FINANCING RESOURCES DEBT MATURITY PROFILE IN €M IN €M 1.5% 900 1,830 4.0% 3.85% 900 700 700 500 480 3.125% 150 Bonds Credit line Hybrid bond ‘15 ‘16 ‘17 ‘18 ‘19 ‘20 ‘21 ‘22 ‘23 ‘24 ‘25 CURRENT RATING Debt duration*: 6 years Standard & Poor’s:
Slide 4: Improve Cash Flow Generation
IMPROVE CASH FLOW GENERATION NET CASH FLOW* IN €M Increase cash conversion of EBITDA for the medium term from ~25% on average to 35%** Based on EBITDA progression according to Group’s ambition x~3 Cost of debt ~3% / year Tax ~30% of REBIT 145 Other elements ~€(35) m/ year Working capital ~15% of sal
Slide 5: Continued Focus on Working Capital Improvement
CONTINUED FOCUS ON WORKING CAPITAL IMPROVEMENT WORKING CAPITAL ON SALES IN % 16.1% 15.2% 14.9% ~14% 30 to 40 €m expected gains on working capital from new IT roll-out Worldwide integrated SAP system to optimize supply chain More integrated and comprehensive business data Roll-out completed by end 20
Slide 6: Reduce Capex Intensity
REDUCE CAPEX INTENSITY CAPEX INTENSITY (CAPEX/SALES) IN % Reduce capex intensity Bostik capex between 2.5 and 3% of sales ~8% Current exceptional investments now completed ~5.5% Maintenance capex at ~3% of sales Development capex at~2.5% of sales with an IRR hurdle rate equal to or above 15% after t
Slide 7: Disciplined Cash Allocation
DISCIPLINED CASH ALLOCATION At least HIGH RETURN ON DEVELOPMENT CAPEX 15% after tax IRR IRR similar SELECTIVE PROFITABLE BOLT-ON ACQUISITIONS to organic growth ~€500 m sales DIVESTMENT OF UNDERPERFORMING NON CORE ASSETS remaining* DELIVER HIGH PREMIUM ON WACC DIVIDEND GROWTH CONSISTENT WITH PROFIT D
Slide 8: Provisions
PROVISIONS Total net provisions* €997 m Restructuring provisions (€751 m at 31/12/14) Expected cash out: 30 to 35 €m / year 62 Environmental provisions net of warranties 131 Expected to be cashed out over 10 years Provisions for pensions and other employee benefits Post-employment benefits: €608 m (
Slide 9: Bostik Purchase Price Allocation: Balance Sheet Impact
BOSTIK PURCHASE PRICE ALLOCATION: BALANCE SHEET IMPACT IFRS 3 (revised standard): acquisition subject to Purchase Accounting Recognition of assets acquired and liabilities assumed at fair value • Adjustment of book value • Recognition of corresponding deferred tax liabilities Determination of goodwi
Slide 10: Bostik Purchase Price Allocation: P&L Impacts
BOSTIK PURCHASE PRICE ALLOCATION: P&L IMPACTS EBIT: CHARGES BOOKED IN “OTHER INCOME AND EXPENSES” IN €M Inventory step-up ~35 One-off in 1H’15 Additional depreciation on tangible assets ~20 / yr Over 3 years Additional depreciation on intangible assets ~20 / yr Over 20 years TAXES: PROFIT AFFECTING
Slide 11: New Segment Reporting
NEW SEGMENT REPORTING HIGH PERFORMANCE INDUSTRIAL COATING MATERIALS SPECIALTIES SOLUTIONS Specialty Adhesives Thiochemicals Acrylics (upstream) (Bostik) PMMA Coating Resins and Technical Polymers Additives (downstream) Fluorogases • Specialty polyamides • Coating resins • PVDF Hydrogen Peroxide • Rh
Slide 12: Appendices
APPENDICES
Slide 13: Reporting Adjustments
REPORTING ADJUSTMENTS Bostik included in High Performance Materials since 1Q’15 Sartomer, a pure specialty business placed under Bernard Pinatel’s responsibility in High Performance Materials Some other minor adjustments HIGH PERFORMANCE INDUSTRIAL COATING MATERIALS SPECIALTIES SOLUTIONS Functional
Slide 14: Performance by Segment (New Reporting)
PERFORMANCE BY SEGMENT (NEW REPORTING) HIGH PERFORMANCE INDUSTRIAL COATING MATERIALS SPECIALTIES SOLUTIONS SALES* 2,016 1,728 1,730 2,445 2,311 2,269 1,911 2,020 1,930 IN €M 2012 2013 2014 2012 2013 2014 2012 2013 2014 EBITDA 19.2 20.1 18.2 17.5 15.6 13.8 11.7 11.8 10.5 margin IN % EBITDA* 387 428 I
Slide 15: 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