2015 FULL YEAR RESULTS Thierry Le Hénaff Chairman and CEO 3 MARCH 2016
10-YEAR SUCCESSFUL TURNAROUND STRONG FINANCIALS INNOVATIVE x3 EBITDA 5 th year in a row in Thomson Reuters Top 100 global innovators 13.8% EBITDA margin (6.2% in 2005) Strong pipeline in new materials € 1.90 dividend * (no dividend at start) and sustainable solutions Gearing < 40% (iso spin-off) INCREASINGLY GEOGRAPHICALLY RESILIENT REBALANCED 10 YEARS Bostik acquisition 38% sales in Europe (57% in 2005) Vinyls divestment x2.5 sales in Asia Cyclical activities down from 56% in 2005 to 29% Changshu (China) Group’s largest HPM sales x2 at € 3.4 bn industrial platform Thiochemicals plant in Malaysia RESPONSIBLE 1.5 TRIR (11.3 in 2005) GHG emissions down -64% * Dividend proposed to the Shareholders’ Annual General Meeting of 7 June 2016 VOC emissions down -43% 2 2015 FULL YEAR RESULTS
A STRONG SET OF RESULTS IN 2015 SALES EBITDA FREE CASH FLOW (1) NET DEBT IN € BN IN € M IN € M IN € BN +29% +35% x21 - € 0.4 bn 1.8 7.7 1,057 +442 1.4 6.0 784 Bostik cash-out: € 1.6 bn +21 2014 2015 (1) Cash flow from operations and investments excluding the impact of portfolio management 3 2015 FULL YEAR RESULTS
A STEP CHANGE IN THE GROUP’S PROFILE FY’15 sales by business segment FY’15 sales by region 24% 28% Cyclical 44% 38% businesses (Acrylics, 41% 29% Fluorogases, in 2014 in 2014 PMMA) 32% 34% 29% (39% in 2014) High Performance Industrial Coating North Asia Europe Materials Specialties Solutions America and RoW ACCELERATING DEVELOPMENT FURTHER REBALANCING OF OF HIGH PERFORMANCE MATERIALS GEOGRAPHICAL PRESENCE 4 2015 FULL YEAR RESULTS
DELIVERING ON THE GROUP’S AMBITION GUIDANCE ACHIEVED IN 2015 1,020 to 1,040 EBITDA ( € m) 1,057 in 2015 35% mid-term EBITDA to cash conversion 42% (1) (normalized conditions) 5.5% 5.6% (2) Capital intensity (capex / sales) long-term ~14% 14.6% (3) Working capital on sales long-term ~1.5x 1.3x Net debt / EBITDA long-term (1.6x including 50% hybrid in net debt) ~50% 44% High Performance Materials (% of Group sales) long-term € 100 m savings ~ € 30 m Operational excellence cumulative over 2015 to 2017 (1) Estimated at around 35% at constant raw material prices (2) Excluding capex related to M & A (mainly related to the transfer of a 3 rd acrylics production line to Sunke without any impact on net debt) (3) Working capital excluding fixed asset payable related to the transfer of a 3 rd acrylics production line to Sunke and 13.9% if included 5 2015 FULL YEAR RESULTS
FULL YEAR 2015 RESULTS
2015 KEY FIGURES 2014 2015 VARIATION IN € M (EXCEPT EPS) Sales 5,952 7,683 +29.1% EBITDA 784 1,057 +34.8% EBITDA margin 13.2% 13.8% Recurring operating income 447 604 +35.1% Adjusted net income* 246 312 +26.8% Net income (Group share) 167 285 +70.7% Adjusted EPS * (euro) 3.72 4.23 +13.7% * Adjusted net income excludes unrealized foreign exchange result on the financing in foreign currencies of non-recurring investments 7 2015 FULL YEAR RESULTS
SALES BREAKDOWN BY BUSINESS Coating 10% Acrylics 24% Solutions Performance Additives 14% Coating Resins 14% and Additives Technical Polymers 10% 2015 SALES € 7,683 m Specialty Adhesives 11% PMMA (Bostik) 20% High Performance Industrial 44% 32% 9% Materials Specialties Thiochemicals 4% 8% Hydrogen Fluorogases Peroxide 8 2015 FULL YEAR RESULTS
SALES BRIDGE SALES IN € M Scope Volumes Price Currency of business 7,683 +7.8% +25.8% 5,952 +0.2% (4.7)% Moderate Mainly in Coating Bostik acquisition Favorable euro / worldwide growth Solutions US dollar FX rate Acquisition Ramp-up of new Lower raw of a stake in Sunke thiochemicals materials in China platform in Malaysia Sunclear divestment New developments in Technical Polymers Lower volumes in Coating Solutions 2014 2015 9 2015 FULL YEAR RESULTS
STRATEGIC PROJECTS DRIVING GROWTH IN 2015 THIOCHEMICALS INNOVATION BOSTIK Kerteh (Malaysia) 6 growth platforms BIO BASED RAW MATERIALS NEW ENERGIES SOLUTIONS FOR ELECTRONICS EPS AND CASH ACCRETIVE EXCELLENT TECHNICAL WATER MANAGEMENT FROM 1 ST YEAR AND COMMERCIAL START-UP LIGHTWEIGHT MATERIALS BUILDING PERFORMANCE AND INSULATION 10 2015 FULL YEAR RESULTS
BOSTIK: A PROMISING START EBITDA EBITDA MARGIN IN € M +30% 14 to 15% vs 2014 183 11.2% 158 10.3% 2014 2015* 2017 2014 2015 LT target target (2020e) FY’15 EBITDA up 16% versus 2014 Benefits from organic developments, lower costs, first synergies and positive FX EBITDA margin up 90 bp versus 2014 Smooth and quick integration Synergies well on track with first benefits in 2015 Accretive in EPS and cash from 1 st year of integration CONFIRM MID AND LONG TERM GROWTH POTENTIAL OF BOSTIK * Of which 11 months within Arkema 11 2015 FULL YEAR RESULTS
BOSTIK: DELIVERING ON STRATEGY GROWTH INNOVATION BRAND Making the Bostik brand OPENING 3 NEW UNITS FLY ACROSS EUROPE OF THE SMART HOUSE Monterrey (Mexico) & A laboratory-house project Dallas (United States) for sustainable RIDE ALONG Bangalore (India) construction with the Tour de France 12 2015 FULL YEAR RESULTS
HIGH PERFORMANCE MATERIALS: SUCCESSFUL INTEGRATION OF BOSTIK AND INNOVATION IN NEW MATERIALS 2015 KEY FIGURES 2015 SALES DEVELOPMENT IN € M 2014* 2015 variation Volumes +0.1% Sales 1,730 3,358 +94.1% Prices (0.5)% EBITDA 314 506 +61.1% Currency +7.2% Bostik dilutive EBITDA margin 18.2% 15.1% impact Scope +87.4% Rec. operating income 213 354 +66.2% 2015 HIGHLIGHTS 2015 SALES BY BUSINESS LINE BOSTIK € 183 m EBITDA on 12 months up +16% (of which 11 months within Arkema) 11.2% EBITDA margin Bostik 33% TECHNICAL POLYMERS Good development of growing applications Technical (lightweight materials, new energies) 45% Polymers PERFORMANCE ADDITIVES Performance In filtration and adsorption: Additives Good year for molecular sieves, up on 2014 22% 2016 to reflect a less favorable project timeline * Restated figures in accordance with new reporting 13 2015 FULL YEAR RESULTS
INDUSTRIAL SPECIALTIES: VERY GOOD PERFORMANCE DRIVEN BY ALL BUSINESS LINES 2015 KEY FIGURES 2015 SALES DEVELOPMENT IN € M 2014* 2015 variation Volumes +1.7% Sales 2,269 2,450 +8.0% Prices (0.2)% EBITDA 312 418 +34.0% Currency +8.6% EBITDA margin 13.8% 17.1% Scope (2.0)% Rec. operating income 169 237 +40.2% 2015 HIGHLIGHTS 2015 SALES BY BUSINESS LINE PMMA Very good results, up YoY , on currently favorable market conditions in MMA 11% Divestment of Sunclear closed in November 2015 PMMA THIOCHEMICALS 36% Thiochemicals High contribution from new Malaysian plant on strong demand 25% in Asia in animal nutrition Fluorochemicals Ramp-up quicker than initially planned Hydrogen FLUOROGASES Peroxide Gradual improvement versus 2014 in line with expectations 28% Higher prices of some gases and productivity initiatives HYDROGEN PEROXIDE Solid performance with developments in specialties * Restated figures in accordance with new reporting 14 2015 FULL YEAR RESULTS
COATING SOLUTIONS: GOOD RESILIENCE 2015 KEY FIGURES 2015 SALES DEVELOPMENT IN € M 2014* 2015 variation Volumes (1.4)% Sales 1,930 1,849 (4.2)% Prices (13.9)% EBITDA 203 190 (6.4)% Currency +7.5% EBITDA margin 10.5% 10.3% Scope +3.6% Rec. operating income 112 72 (35.7)% 2015 HIGHLIGHTS 2015 SALES BY BUSINESS LINE ACRYLICS Low cycle unit margins, down YoY . Stabilized at year-end Cautious inventory management by customers due to high volatility in raw material prices Contribution of Sunke in China impacted by new capacities in the region 41% Acrylics COATING RESINS AND ADDITIVES Coating Resins Solid performance supported by new innovative developments 59% and Additives and good cost management Soft demand in deco paints and construction in Europe * Restated figures in accordance with new reporting 15 2015 FULL YEAR RESULTS
STRONG CASH GENERATION FREE CASH FLOW (1) IN € M Strong performance in 2015 +442 Solid EBITDA contribution Significant decrease in working capital partially driven by lower raw material costs 14.6% working capital on sales ratio (2) (16.1% in 2014) Capex significantly reduced at € 431m ( € 470 m in 2014) despite Bostik acquisition, Sunke integration and FX +206 High EBITDA to cash conversion +129 2016 assumptions +21 € 470 m capex with a € /US$ rate at 1.10 Working capital / sales at around 15% 2015 2012 2013 2014 (1) Cash flow from operations and investments excluding the impact of portfolio management (2) Working capital excluding fixed asset payable related to the transfer of a 3 rd acrylics production line to Sunke 16 2015 FULL YEAR RESULTS
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