Arkema Sa · EURONEXT:AKE
Arkema Sa — UBS Global Basic Materials Conference 2010
23 slides from Arkema Sa's conference presentation, Jun 9, 2010
Slide 1: UBS Global Basic Materials Conference
UBS Global Basic Materials Conference Thierry Lemonnier CFO London, June 9th, 2010
Slide 2: 2005-2009 A reshaped Arkema
2005-2009 A reshaped Arkema
Slide 3: Arkema at a glance
Arkema at a glance ● Diversified end markets ● Growing exposure to Asian markets ● Strong R&D know-how ● Very solid balance sheet 3 Business segments Diversified geographic base Industrial 24% North Chemicals Performance America 47% 2009 World leading 30% Products 2009 sales Europe 54% positions Inn
Slide 4: A transformation strategy based on four axes
A transformation strategy based on four axes ● Reduce fixed costs Spin off target : € 500m gross fixed cost savings in 2010 vs 2005 8.8% Target increased in 2009 to €600m 7.0% 6.2% 498 ● Reinforce presence in Asia 22% sales in Asia in 2014 355 Including ● Keep a strong momentum in R&D on 310 -€40m s
Slide 5: 2005-2009: years of in-depth transformation
2005-2009 : years of in-depth transformation Cumulated gross fixed cost savings since 2005 Working capital as % of sales (in €m) 23.6% Spin Spin Spin off off target target Spin off off target target 18% €500m €500m in 2010 in 2010 18% end 2010 end 2010 337 508 230 16.2% 120 2005 2006 2007 2008 2009
Slide 6: Better positioned on growing regions & products
Better positioned on growing regions & products Asia Innovation €130m capex spent since spin off Focus on sustainable development and high performance polymers Bio-based Range for photovoltaic polymers Spin Spin off off target target % of total sales 20% 20% of sales in of sales in 2012 2012 achieve
Slide 7: 2010 Well prepared and positioned
2010 Well prepared and positioned
Slide 8: Unprecedented downturn in 2009
Unprecedented downturn in 2009 -20% volume in 2008-2009 -€343m impact on EBITDA from environment Fixed cost Environment savings +36 New +2.3% businesses +0.8% +171 2005 2008 2009 (343) 2006 2007 -1.5% others (52) -5.9% 498 -13.9% 310 2008 2009 YoY volume development EBITDA (in €m) 8
Slide 9: 1Q'10: Strong rebound in volumes and profitability
1Q’10 : Strong rebound in volumes and profitability ● +20% volumes* versus 1Q’09 1Q’10 achievements • Excellent growth in Asia • Signs of recovery in North America EBITDA (€m) ● 10.5% EBITDA margin versus 5.2% in 1Q’09 +137 • Strong performance of Industrial Chemicals 57 at 14.5% EBITDA margin • Sha
Slide 10: 1Q'10 results by segment
1Q’10 results by segment EBITDA (€m) & Sales (€m) EBITDA margin Vinyl Products: some improvements in overall adverse market conditions • Traditional seasonality of the first quarter • Unit margins at low levels 257 271 2 1Q’10 • Positive contribution from fixed cost savings • Strong performance of Q
Slide 11: 2010 outlook
2010 outlook ● 2Q’10 outlook • 1Q’10 market conditions expected to continue in 2Q’10 • Stronger seasonality in Coatings, Fluorochemicals and Specialty Chemicals • Tightness in acrylic monomers expected to continue in 2Q’10 • 2Q’10 EBITDA will be above 1Q’10 level ● 2010 outlook • In a still volatile
Slide 12: Our priorities for 2010
Our priorities for 2010 ● Maintain focus on costs and cash • €90m fixed cost savings versus 2009 • Recurring capex below €300m • Working capital at ~16% of sales ● Integrate newly acquired acrylic assets from Dow ● Grow in Asia and in “green” markets • Leverage new manufacturing assets in China • Ac
Slide 13: 2010-2014 A new roadmap
2010-2014 A new roadmap
Slide 14: Leverage on newly acquired acrylic assets
Leverage on newly acquired acrylic assets #2 in US acrylic acid ● Attractive asset deal • US$ 450m sales in 2009 • US$ 50m enterprise value • Acquisition in low-cycle conditions ● Perfect fit with Arkema’s strategy in Acrylics Dow Arkema BASF StoHaas • Build a strong position in the US in monomers (
Slide 15: Enhanced portfolio
Enhanced portfolio 2005 2009 5-year proforma* target Strategy Contributors Focus on 14% Cost and partnerships competitive assets Vinyl 21% Products 24% Emergence of a global New acrylic assets 20% integrated player acquired from Dow Acrylics & Coatex 17% 4 first-class Industrial growth platforms 42%
Slide 16: Balanced geographic position
Balanced geographic position Sales by region 2005 2009 proforma* 5-year target 5% 4% 5% 13% 17% 22% 57% 50% 41% 25% 29% 32% Europe North America Asia RoW 16 * Including the acrylic assets acquired from Dow
Slide 17: Capitalizing on Asia and innovation
Capitalizing on Asia and innovation Reinforce presence in Asia Fuelling the innovation pipe Target 22% of sales in Asia in 2014 €400m sales from new high-margin products by 2014 ●Successfully achieve current projects in China ● Keep strong momentum on •HFC-125 successful start up in 2Q’10 • Solution
Slide 18: 5-year (2014) mid-cycle targets
5-year (2014) mid-cycle targets 5 year (2014) EBITDA margin mid-cycle target* Performance Products 15% Industrial Chemicals w/o Acrylics 17% Acrylics 14 to 15% Vinyls 8 to 9% Corporate (1)% Arkema >13.5% 18 * Normalized environment
Slide 19: 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 inaccura
Slide 20: Appendix
Appendix
Slide 21: 1Q'10 key figures
1Q’10 key figures in €m (except EPS) 1Q’09 1Q’10 Variation Sales 1,092 1,308 +19.8% EBITDA 57 137 x2.4 EBITDA margin 5.2% 10.5% EBITDA (€m) Recurring operating income (12) 67 - 159 134 137 Net income (group share) (35) 40 - 112 57 Adjusted EPS (diluted) (0.50) 0.68 - 1Q’06 1Q’07 1Q’08 1Q’09 1Q’10 21
Slide 22: +20% sales versus 1Q'09
+20% sales versus 1Q’09 Sales in €m FX rate - Scope of translation business Volume Price effect +19.6% (4.0)% (1.7)% +5.9% Mainly impact Mainly acrylic of caustic assets • Demand recovery in soda prices purchased divided by 2 from The Dow several end-markets 1,308 Chemical • Strong demand 1,092 Comp
Slide 23: Cash Flow and net debt
Cash Flow and net debt Working capital / sales * (%) ● +€22m cash flow from operating activities 23.0% • On higher EBITDA • And despite -€68m working capital outflow on stronger 16.2% 15.6% activity and usual seasonality ● Continued focus on working capital optimization in line with FY target of wor