ARKEMA 18 th EUROPEAN CEO SEMINAR Thierry Le Hénaff Chairman and CEO
ARKEMA IN 2015 € 7.7 bn 19,000 136 3 R&D Worldwide presence sales industrial sites and innovation employees in 50 countries worldwide geographical hubs 2 18 th European CEO seminar
SALES BREAKDOWN BY BUSINESS 10% Coating 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 3 18 th European CEO seminar
MAIN STRATEGIC DIRECTIONS 3 1 2 ACCELERATE GROWTH SELECTIVE GROWTH IN REINFORCE ACRYLICS OF HIGH PERFORMANCE INDUSTRIAL SPECIALTIES DOWNSTREAM MATERIALS 4 5 6 MAINTAIN EMPHASIS FINALIZE THE FULL DISPOSAL OF NON-CORE GEOGRAPHICAL ON OPERATIONAL ASSETS BALANCING EXCELLENCE 4 18th European CEO seminar
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 5 18 th European CEO seminar
A STRONG VALUE CREATION Since 1 January 2016: (at 10 June 2016) Arkema: +7% Peers average: -8% CAC 40: -8% Share price since 18 May 2006 100,00 90,00 at 10 June 2016 80,00 Arkema +161% 70,00 60,00 50,00 Peers average 40,00 +35% 30,00 CAC 40 20,00 -13% 10,00 0,00 18/05/2006 18/05/2007 18/05/2008 18/05/2009 18/05/2010 18/05/2011 18/05/2012 18/05/2013 18/05/2014 18/05/2015 18/05/2016 6 18 th European CEO seminar
DIVIDEND DIVIDEND AND PAYOUT RATIO IN € / SHARE AND IN % 1.90 Dividend increased to €1.90, up +2.7% 1.85 1.85 1.8 Reflects confidence in the Group’s solid cash � generation and balance sheet 45% payout on 2015 adjusted net income � 1.3 2.9% dividend yield � (based on share price at year end) 1.0 51% 45% 0.75 In line with dividend policy: 0.6 0.6 32% “aims at paying a stable to growing 25% dividend each year” 25% 24% 17% 14% 2007 2008 2009 2010 2011 2014 2015 2012 2013 A key element of shareholder return 7 18 th European CEO seminar
1Q’16: A VERY STRONG QUARTER +1.2% YoY €1,893 m sales Volumes up +2.5% supported by innovation and recently started production units +27% YoY (€237 m in 1Q’15) with a very limited scope effect €302 m EBITDA A record high for a first quarter Up 330 basis points YoY 16% EBITDA margin Driven by excellent margins in Industrial Specialties and High Performance Materials Up +63% YoY €106 m adjusted net income €1.42 adjusted net income per share 5.6% of Group sales Stable versus 31 December 2015 despite the usual strong seasonality €1,390 m net debt of working capital 8 18 th European CEO seminar
1Q’16 TAKE-AWAYS STRONG START STRUCTURAL DRIVERS STRONG POTENTIAL TO THE YEAR SUPPORTING OF BOSTIK HIGHER EARNINGS CONFIRMED OUTLOOK FOR THE YEAR SUCCESSFUL EXECUTION CONFIRMED OF STRATEGY 9 18 th European CEO seminar
1Q’16 PERFORMANCE BY SEGMENT HIGH PERFORMANCE MATERIALS IN €M 1Q’15* 1Q’16 variation Sales 742 868 +17.0%** Strong contribution from Bostik and developments in Technical Polymers EBITDA 111 149 +34.2% in lightweight materials and new energies EBITDA margin 15.0% 17.2% INDUSTRIAL SPECIALTIES IN €M 1Q’15* 1Q’16 variation Sales 626 586 (6.4)%** Higher performance for each Business Line EBITDA 93 129 +38.7% EBITDA margin 14.9% 22.0% COATING SOLUTIONS IN €M 1Q’15* 1Q’16 variation Good resilience of the results thanks to a Sales 496 432 (12.9)% solid downstream integration EBITDA 53 50 (5.7)% Units margins in acrylic monomers stabilized at low levels since end of 2015 EBITDA margin 10.7% 11.6% * Restated figures in accordance with the new reporting presented at the 2015 CMD. ** At 1 st January 2016, a business was transferred from High Performance Materials to Industrial Specialties. YoY sales variation includes the impact of this transfer. 10 18 th European CEO seminar
WHERE DO WE STAND ON 2016 PRIORITIES? DIVESTMENT BOSTIK THIOCHEMICALS FLUOROGASES PROGRAM Project * to divest Further good progress Targeted contribution Gradual recovery with strong YoY over a full year in line with Group’s activated carbon improvement (last 12 months) assumptions and filter aid activity now reached representing EBITDA margin at ~13% sales of some €93 m to gradually catching up Ramp-up far quicker Calgon Carbon with major peers’ average than initially planned Offer based on a Fully on track towards €145 m enterprise value, 2017 target to improve i.e., 9.5x 2015 EBITDA EBITDA by 30% vs 2014 * Subject to the information - consultation process of works councils 10 18th European CEO seminar
2016 OUTLOOK CONFIRMED A world economy remaining slow and volatile: Overall moderate global growth with low visibility and different dynamics by region Volatility in currencies, energy and raw material prices Strong organic momentum driven by: Continuous development of Bostik including ramp-up of synergies Progressive improvement of fluorogases business (pricing and competitiveness) In Thiochemicals, additional contribution of the Malaysian platform expected in 2016 vs 2015 already fully booked in 1Q’16. Performance of remaining 9 months of 2016 expected to be comparable to that of last year. Operational excellence initiatives to offset part of the inflation on fixed costs Benefit from innovation in lightweight materials and sustainable solutions Based on these drivers and assuming an environment in line with the start of the year as regards energy and currencies, Arkema reiterates its confidence in its ability to grow EBITDA in 2016 11 18th European CEO seminar
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 and are subject to material risk factors such as among others, changes in raw material prices, currency fluctuations, implementation pace of cost-reduction projects and changes in general economic and business conditions. These risk factors are further developed in the reference document. Arkema does not assume any liability to update such forward-looking statements whether as a result of any new information or any unexpected event or otherwise. Further information on factors which could affect Arkema’s financial results is provided in the documents filed with the French Autorité des marchés financiers . Financial information for 2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, 2007, 2006 and 2005 is extracted from the consolidated financial statements of Arkema. Quarterly financial information is not audited. The business segment information is presented in accordance with Arkema’s internal reporting system used by the management. The definition of the main performance indicators used can be found in the press release on the quarterly results. 13 18th European CEO seminar
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