ARKEMA 2016 GLOBAL CHEMICALS AND AGRICULTURE CONFERENCE June 21, 2016 Sophie Fouillat VP Investor Relations
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
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
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
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 5
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 6
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 7
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
1Q’16 KEY FIGURES 1Q’15 1Q’16 VARIATION IN €M (EXCEPT EPS) Sales 1,871 1,893 +1.2% EBITDA 237 302 +27.4% EBITDA margin 12.7% 16.0% Recurring operating income 133 191 +43.6% Adjusted net income * 65 106 +63.1% Net income - Group share 42 98 +133.3% Adjusted EPS * (in euros) 0.89 +59.6% 1.42 * Adjusted net income excludes unrealized foreign exchange results on the financing in foreign currencies of non-recurring investments. Adjusted net income for 1 st quarter 2015 has been restated accordingly. 9
1Q’16 SALES BRIDGE SALES Scope In €m Volumes Price of business Currency +2.5% (5.5)% +4.9% (0.8)% Innovation in Acrylic cycle +1 month Bostik Technical Polymers Lower raw Divestment of Developments material prices Sunclear in adhesives 1,871 Thiochemicals 1,893 in Malaysia Acrylic downstream 1Q’15 1Q’16 10
HIGH PERFORMANCE MATERIALS 1Q’16 KEY FIGURES 1Q’16 SALES DEVELOPMENT IN €M 1Q’15 * 1Q’16 variation +3.5% Volumes Sales 742 868 +17.0%** (1.7)% Prices EBITDA 111 149 +34.2% (1.6)% Currency EBITDA margin 15.0% 17.2% - +18.0% Scope Rec. operating income 76 112 +47.4% 1Q’16 HIGHLIGHTS 1Q’16 SALES BY BUSINESS LINE Strong contribution from Bostik 1 additional month in January 24% EBITDA significantly up YoY supported by geographic 30% expansion, synergies and lower costs Bostik ~13% EBITDA margin Performance Additives Excluding Bostik, EBITDA significantly up YoY Technical Polymers Strong volumes in Technical Polymers in lightweight materials and new energies EBITDA margin above 20% 46% * 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. 11
INDUSTRIAL SPECIALTIES 1Q’16 KEY FIGURES 1Q’16 SALES DEVELOPMENT IN €M 1Q’15 * 1Q’16 variation +1.8% Volumes Sales 626 586 (6.4)%** (3.0)% Prices EBITDA 93 129 +38.7% - Currency EBITDA margin 14.9% 22.0% - (6.4)% Scope Rec. operating income 52 85 +63.5% 1Q’16 HIGHLIGHTS 1Q’16 SALES BY BUSINESS LINE Performance up YoY in each Business Line 13% Excellent performance of Thiochemicals Driven by one additional quarter of Kerteh (Malaysia) PMMA 33% Continuing very good level of results in PMMA Thiochemicals 24% Gradual improvement in Fluorogases in line with Group’s Fluorogases assumptions Hydrogen Peroxide Very high EBITDA margin at 22% 30% * 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. 12
COATING SOLUTIONS 1Q’16 KEY FIGURES 1Q’16 SALES DEVELOPMENT IN €M 1Q’15 * 1Q’16 variation +2.0% Volumes Sales 496 432 (12.9)% (14.4)% Prices EBITDA 53 50 (5.7)% (0.3)% Currency EBITDA margin 10.7% 11.6% - (0.1)% Scope Rec. operating income 25 20 (20.0)% 1Q’16 HIGHLIGHTS 1Q’16 SALES BY BUSINESS LINE Good resilience of the results thanks to a solid downstream integration Continued good developments at Coatex and coating resins 38% Coating Resins Good cost management and Additives Units margins in acrylic monomers stabilized at low levels Acrylics since end of 2015 62% In line with Group’s assumptions * Restated figures in accordance with the new reporting presented at the 2015 CMD. 13
1Q’16 CASH FLOW 1Q’16 IN €M EBITDA 302 Usual seasonality of working capital (190) Working capital variation (1) 16.7% working capital over annualized sales ratio against 17.8% end of March 2015 (2) (61) Taxes Current taxes excluding impact of Bostik PPA (19) Cost of debt 2016e capex: ~ €450m at 1.10 €/US$ exchange rate (57) Capital expenditure (previously ~ €470m) (1) Others RECURRING CASH FLOW (26) Non-recurring items in operating (9) Mainly restructuring expenses and investing cash flow FREE CASH FLOW (35) (5) Impact of portfolio management NET CASH FLOW (40) Variation in working capital and fixed asset payables excluding non-recurring items (1) Proforma sales including in 1 st quarter 2015 primarily an additional month for Bostik (2) 14
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
OUR LONG-TERM AMBITION SALES CAPEX INTENSITY EBITDA MARGIN IN €BN (CAPEX/SALES) IN % Including ~10 Close to 1-1.5 €bn 17% coming from new acquisitions 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 1.15, brent at US$70/b,…) Net debt / EBITDA ~1.5x * Beyond Bostik and Jurong acquisitions 11
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 17
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