Arkema Sa · EURONEXT:AKE
Arkema Sa — Autumn Conference KeplerCheuvreux 2015
29 slides from Arkema Sa's conference presentation, Sep 16, 2015
Slide 1: Autumn Conference KeplerCheuvreux
Autumn Conference KeplerCheuvreux Paris, 16th September 2015 Thierry Lemonnier, CFO
Slide 2: Arkema Today
ARKEMA TODAY 19,200 A presence in 3 R&D € 7.5 bn* 137 and innovation sales employees worldwide 50 countries production sites geographical hubs Entrepreneurial culture Strong focus on partnerships and relations with customers Balanced global footprint Competitive world-scale units on 3 continents Tec
Slide 3: Our Portfolio
OUR PORTFOLIO HIGH PERFORMANCE INDUSTRIAL COATING MATERIALS SPECIALTIES SOLUTIONS Specialty Adhesives (Bostik) Thiochemicals Acrylics (upstream) Technical Polymers PMMA Coating Resins and Additives (downstream) Performance Additives Fluorogases Hydrogen Peroxide CYCLICALITY CYCLICALITY CYCLICALITY Q
Slide 4: 1H'15 Sales Breakdown by Segment and Region
1H’15 SALES BREAKDOWN BY SEGMENT AND REGION 1H’15 sales by segment 1H’15 sales by region Coating Resins Technical High and Additives Polymers Performance Coating Materials Solutions 14% 10% Asia and Performance RoW 28% Acrylics 15% Additives (China: 9%) 34% 11% 28% 38% Europe Hydrogen 3% €4.0 bn €4.
Slide 5: 2Q'15 Results
2Q’15 RESULTS
Slide 6: Where We Stand in 2Q'15 on Main Drivers
WHERE WE STAND IN 2Q’15 ON MAIN DRIVERS Strong performance Bostik Confirm its very promising start within Arkema Excellent technical and commercial start-up of the unit Thiochemicals in Malaysia Significant contribution with ramp-up a touch faster than initially planned Continue to be in low-cycle c
Slide 7: Bostik's Highlights
BOSTIK’S HIGHLIGHTS Strong performance which supports decision to acquire Bostik 1H’15 performance EBITDA of €89 m over 6m’15 (of which 5 months (of which 5 months inside Arkema) inside Arkema) • Up +15% versus 6m’14 EBITDA margin close to 11% Highly committed teams Implementation of synergies well
Slide 8: 2Q'15 Key Figures
2Q’15 KEY FIGURES IN €M (EXCEPT EPS) 2Q’14* 2Q’15 VARIATION Sales 1,520 2,106 +38.6% EBITDA 210 320 +52.4% EBITDA margin 13.8% 15.2% Recurring operating income 130 208 +60.0% Adjusted net income 72 120 +66.7% Net income (Group share) 50 133 +166.0% Adjusted EPS** (euro) 1.09 1.65 +51.4% * Restated f
Slide 9: 2Q'15 Sales Bridge
2Q’15 SALES BRIDGE SALES IN €M Scope Volumes Price Currency of business +10.2% 2,106 +29.5% 1,520 +2.1%* (3.1)% Strong demand Mainly in Bostik acquisition Favorable euro / improvement in Coating US dollar FX rate June Solutions Acquisition of a stake in Sunke in Ramp-up of the Acrylics in China new
Slide 10: High Performance Materials
HIGH PERFORMANCE MATERIALS 2Q’15 KEY FIGURES 2Q’15 SALES DEVELOPMENT In €m 2Q’14* 2Q’15 variation Sales 427 907 +112.4% Volumes +2.7% EBITDA 76 149 +96.1% Prices +0.6% EBITDA margin 17.8% 16.4% Currency +9.1% Rec. operating income 52 111 +113.5% Scope +99.7% 2Q’15 HIGHLIGHTS 2Q’15 SALES BY BUSINESS
Slide 11: Industrial Specialties
INDUSTRIAL SPECIALTIES 2Q’15 KEY FIGURES 2Q’15 SALES DEVELOPMENT In €m 2Q’14* 2Q’15 variation Volumes +2.3% Sales 583 684 +17.3% Prices +2.9% EBITDA 85 128 +50.6% Currency +11.2% EBITDA margin 14.6% 18.7% Scope +0.9% Rec. operating income 52 84 +61.5% 2Q’15 HIGHLIGHTS 2Q’15 SALES BY BUSINESS LINE Th
Slide 12: Coating Solutions
COATING SOLUTIONS 2Q’15 KEY FIGURES 2Q’15 SALES DEVELOPMENT In €m 2Q’14* 2Q’15 variation Volumes +0.6% Sales 505 509 +0.8% Prices (13.3)% EBITDA 61 61 - Currency +10.1% EBITDA margin 12.1% 12.0% Scope +3.4% Rec. operating income 39 32 (17.9)% 2Q’15 HIGHLIGHTS 2Q’15 SALES BY BUSINESS LINE Acrylics (a
Slide 13: 2Q'15 Cash Flow
2Q’15 CASH FLOW IN €M 2Q’15 EBITDA 320 Working capital variation* (28) Excluding €27 m non-recurring items primarily relating to Bostik acquisition Taxes (63) Current taxes excluding impact of Bostik PPA Cost of debt (22) 2015e capex: ~ €450m computed with the 1.25 €/US$ rate used for the budget. Wi
Slide 14: 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 15: 2015 Outlook
2015 OUTLOOK Macro-economic assumptions Arkema enters 2H’15 with confidence, while remaining cautious on the future development of the global economic environment Market conditions expected to remain volatile and contrasted with different dynamics depending on geographic regions and end-markets Tren
Slide 16: Long-Term Ambition
LONG-TERM AMBITION
Slide 17: Our Long-Term Ambition
OUR LONG-TERM AMBITION SALES EBITDA MARGIN CAPEX INTENSITY IN €BN (CAPEX/SALES) IN % Including 1-1.5 €bn ~10 Close to coming from new acquisitions 17% post 2017* ~8% 6.0 ~5.5% 13% 2014 LT 2014 LT 2014 LT (2020e) (2020e) (2020e) Defined in normalized market conditions (Acrylics in mid-cycle, €/US$ at
Slide 18: Main Strategic Directions
MAIN STRATEGIC DIRECTIONS 1 2 3 ACCELERATE GROWTH SELECTIVE GROWTH IN REINFORCE ACRYLICS OF HIGH PERFORMANCE INDUSTRIAL SPECIALTIES DOWNSTREAM MATERIALS 4 5 6 FINALIZE THE FULL MAINTAIN EMPHASIS DISPOSAL OF NON-CORE GEOGRAPHICAL ON OPERATIONAL BALANCING ASSETS EXCELLENCE 18
Slide 19: A Differentiated Strategy by Segment
A DIFFERENTIATED STRATEGY BY SEGMENT EBITDA margin Segment 2005 – 2014 2015 – long-term potential* Accelerate growth HIGH PERFORMANCE MATERIALS Reposition in adhesives and 17% - 18% from megatrends INDUSTRIAL Extend footprint Grow SPECIALTIES in Asia selectively 17% - 19% Build a whole COATING Reinf
Slide 20: A Strong Ambition for Bostik
A STRONG AMBITION FOR BOSTIK EBITDA Smooth integration IN €M In a very positive spirit Highly committed teams Synergies well on track with short-term focus on costs ~300 Promising start of the year Strict benchmarking of competition x2 2017 objective confirmed +30% EBITDA versus 2014 (excluding acqu
Slide 21: Some Major Growth Drivers 1/2
SOME MAJOR GROWTH DRIVERS 1/2 THIOCHEMICALS ACRYLICS COMPOSITE MATERIALS Kerteh Taixing US$120 M SALES MID-TERM €70 M EBITDA* €100 TO €200 M MID-TERM FURTHER NEW SALES in mid-cycle THOUGHTS LONG-TERM conditions UNDERWAY * Subject to the exercise of the option to increase our share in Sunke and acces
Slide 22: Some Major Growth Drivers 2/2
SOME MAJOR GROWTH DRIVERS 2/2 MOLECULAR SIEVES FLUOROGASES DEVELOPMENT FOR OIL & GAS IMPROVEMENT IN MIDDLE EAST X2 +€100 M VOLUMES SOLD X2 EBITDA MID-TERM SALES MID-TERM (Honfleur expansion LONG-TERM ~€60 m CAPEX) (Action plan) 22
Slide 23: 2017 EBITDA Objective Confirmed
2017 EBITDA OBJECTIVE CONFIRMED EBITDA Environment €1.3 bn M&A +150 Organic growth +190 €784 m +180 2014 2017e Defined in normalized market conditions (Acrylics in mid-cycle, €/US$ at 1.15, brent at US$70/b,…) Gearing at ~40% 23
Slide 24: Main Elements Supporting 2017 Objective
MAIN ELEMENTS SUPPORTING 2017 OBJECTIVE ORGANIC GROWTH M&A EXTERNAL ENVIRONMENT MAIN DRIVERS ACQUISITIONS NORMALIZED Thiochemicals in Malaysia Bostik (initial €158 m) Acrylics in mid-cycle Bostik growth: +€50 m 1st step of Sunke acquisition (currently low-cycle) Internal measures 2nd step of Sunke a
Slide 25: 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 26: Operational Excellence
OPERATIONAL EXCELLENCE TA R G E T: € 1 0 0 M G A I N S I N 2 0 1 7 V E R S U S 2 0 1 4 PRIORITIES WHERE WE STAND NEW PLAN VS 2017 TARGET Previous plan New plan SAFETY / ENVIRONMENT 2013-2017 2013-2017 €100 m €150 m TECHNOLOGY LEADERSHIP 10% Process innovation +€50 m 25% New projects management €100
Slide 27: Portfolio Optimization
PORTFOLIO OPTIMIZATION ACQUISITIONS DIVESTMENTS 2015-2016 Target to divest €700 m sales of non-core activities between 2015 • Integrate and ramp up Bostik and Sunke and 2017 • Small bolt-on acquisitions such as Oxido First step: project to divest Sunclear* January 2016: decision to exercise (€180 m
Slide 28: Dividend Growth Supported by Profit Development
DIVIDEND GROWTH SUPPORTED BY PROFIT DEVELOPMENT DIVIDEND IN € / SHARE 1.85 1.85 1.8 The dividend has grown at 14% per year on average since 2007 1.3 Arkema has delivered its objective of reaching 1.0 a 30% payout ratio. The Group aims at maintaining this level on average 0.75 for the coming years an
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