ARKEMA
ODDO BHF FORUM 2021
JANUARY 2021 ARKEMA IN A SNAPSHOT ARKEMA AT A GLANCE
2019 SALES SPLIT
7% 4% 21% 24% 7% 22% 28% 7% 36%
Businesses End markets Regions 15% 22% 24%
31% 20% 32%
Adhesive Solutions General industry Building & Construction Europe Advanced Materials Consumer goods Automotive & Transportation North-America Coating Solutions Electrics, electronics & energy Nutrition & water Asia Intermediates Paints & Coatings ROW
€8.7b 20,500 Present 144 plants 2.8% of revenues sales employees in 55 countries operated invested in R&D
3 ODDO BHF FORUM - JANUARY 2021 A HIGH-LEVEL FINANCIAL PERFORMANCE
1,474 1,457 EBITDA margin 1,391 16.7% 667 since 2017 565 499 EBITDA to cash conversion rate 52% in 2019 above the target of >40% by 2024
15.8 Working capital (% of annual sales) % 13.8% at 30/12/2019 close to the very good level of 2018
2017 2018 2019 2017 2018 2019 Recurring and exceptional capex EBITDA (€m) Free cash flow (€m) €607m in 2019 acceleration of major organic growth projects
4 ODDO BHF FORUM - JANUARY 2021 DIVERSIFIED FINANCING RESOURCES
Solid investment grade rating 1,000 BBB+ stable outlook (S&P) 900 Baa1 stable outlook (Moody’s) 1.5% 700 Net debt (excl. hybrids) / EBITDA 1.5% 500 (31/12/2019) 1.1x 400 0.75% 2.75% 300 300 150 1.5% Hybrid bonds 0.125% (booked as shareholders’ equity) 3.125% €700 m 2023 2024 2025 2026 2027 2028 2029
Senior bond RCF refinanced and increased to Hybrid bond €1,000m on July 29th 2020 Green bond 3+1+1 years RCF
5 ODDO BHF FORUM - JANUARY 2021 STRONG CSR COMMITMENTS
OUR 3 COMMITMENTS
Deliver sustainable Manage our activities Cultivate an open solutions driven by as a responsible dialogue and close innovation manufacturer relations with our stakeholders
. Solutions that address . Safety of people and . Ethics societal challenges processes . Human rights OUR MISSION . Innovation at the heart . Health . Diversity & Employee Develop, as a responsible industrial of the activities . Environmental footprint development . Product stewardship reduction . Responsible value chain company, innovative solutions . Corporate citizenship adapted to our customers’ main challenges and support them in their quest for sustainable performance
6 ODDO BHF FORUM - JANUARY 2021 RECOGNIZED CSR POLICY
NON-FINANCIAL RATINGS 2015 2019 2020
42 65
BB A
C B
DJSI World: #6 Top 1% in the “Chemicals” category (among 114 companies assessed)
1 e Global n.a. 4 /38 chemist
EUROPE 120 INDICES EUROZONE 120 INDICES
1. Not disclosed
7 ODDO BHF FORUM - JANUARY 2021 EVOLUTION OF THE SHARE PRICE SINCE 1st JANUARY 2019
Arkema : -1.3% TSR since May 2006 100 Average of peers* : +3.9% 100 (with reintegrated dividends) CAC 40 : -7.1% Arkema
around 80 x4.3 74.96
Average of peers*
Arkema : + 26.3% around Average of peers* : + 18.1% 6060 CAC 40 : + 26.4% x2.9
CAC 40
2019 2020 around 4040 x1.9 01/01/2019 01/04/201931 March 01/07/201930 June 3001/10/2019 September 3101/01/2020 December 01/04/202031 March 01/07/202030 June 3001/10/2020 September 31 December * The panel of chemicals peers includes Ashland, BASF, Celanese, Clariant, Dupont, Eastman, Evonik, HB Fuller, Lanxess, Solvay
8 ODDO BHF FORUM - JANUARY 2021 OUR LONG TERM AMBITION OUR VISION
Be the Specialty Materials leader offering the most innovative and sustainable solutions to address our customers’ current and future challenges
10 ODDO BHF FORUM - JANUARY 2021 WE HAVE ALIGNED OUR BUSINESS STRUCTURE WITH OUR VISION
2019 FINANCIALS Specialty Materials
Adhesive Solutions Advanced Materials Coating Solutions Intermediates
High- PMMA Construction Industrial Performance Coating Coating Performance Fluorogases & Consumer Assembly Additives Resins Additives Polymers Asia Acrylics 2.7 2.1 2.1 1.8 Sales, €b
EBITDA margin1 12.9% 21.7% 14.4% 21.0%
15.8% net of corporate 20% net of corporate
1 ROCE 7.8% 13.3% 13.8% 26.5%
Separate reporting Now including Thiochemicals Now including UV cure resins Now including Asia Acrylics of Adhesives (Bostik) and Hydrogen peroxide (Sartomer) but excluding which does not benefit yet Asia Acrylics from integration
1. Excluding corporate, corresponding to ~1% of sales
11 ODDO BHF FORUM - JANUARY 2021 OUR VISION IS TO BECOME A PURE SPECIALTY MATERIALS PLAYER
SPECIALTY MATERIALS INTERMEDIATES
OUR 2024 AMBITION
. €10-11b sales 3-3.5% p.a. average annual organic revenue growth . GDP+ organic growth
> M&A to more than double Develop differentiated . High group profitability organic growth strategies across businesses of ~17% EBITDA margin
. Strong cashflow generation Increase EBITDA margin from 1 . Superior resilience 15.8% to ~17%
>40% cash generation2
1. Net of corporate costs, corresponding to ~1% of sales 2. Free cash flow excluding exceptional CAPEX divided by EBITDA
12 ODDO BHF FORUM - JANUARY 2021 ADHESIVE SOLUTIONS STRATEGY AT A GLANCE
2019 KEY FINANCIALS 2019 REVENUE SPLIT 2024 AMBITION
10% €2.1b Building & Construction sales 42% Do-it-yourself3 High single-digit 48% Industry3 Annual sales growth 12.9% incl. M&A2 EBITDA margin 3% 30% CAPEX intensity1 Europe 46% North America +300 bps Asia & Rest of the World EBITDA margin increase 2.7% 24% R&D intensity1
Growth levers
Accelerate organic growth through presence in Asia as well as Launch phase 2 Grow through bolt-on key technologies (high-performance adhesives for industrial of our operational M&A in a fragmented assembly and waterproofing & flooring in construction) excellence program market
1. As % of sales 2. Organic growth of ~3% 3. Separate market definitions as used by Adhesive solutions
13 ODDO BHF FORUM - JANUARY 2021 ACHIEVE ANOTHER STEP-CHANGE IN ADHESIVES BY 2024
Focus on areas where Bostik High single digit has strong positions annual sales growth
Construction Organic growth (one third)
Become a worldwide • Geographic expansion leader in sealants in Asia and Latam • High performance and Globalize our presence and technology driven expand our range in flooring industrial adhesives adhesives and waterproofing New plant in Japan in 2020 M&A (two thirds) Industrial Assembly • 2 to 3 small bolt-ons per year plus a couple of mid-sized acquisitions Strengthen our position in over the period high performance and engineering adhesives • Focus on technologies and synergies to replace mechanical fasteners • 3 bolt-ons achieved in 2020 (LIP, Fixatti and Ideal Work)
14 ODDO BHF FORUM - JANUARY 2021 ADVANCED MATERIALS STRATEGY AT A GLANCE
2019 KEY FINANCIALS 2019 REVENUE SPLIT 2024 AMBITION
4% Building & Construction 8% €2.7b Consumer goods 10% 35% sales General industry 11% 4% Electrics, electronics & energy Annual organic sales growth 21.7% 14% 18% Automotive & Transportation EBITDA margin Paint & coatings Nutrition & Water 7-8% 30% 1 Europe CAPEX intensity 42% North America Stable at 22% Asia & Rest of the World EBITDA margin 3.4% 28% R&D intensity1
Growth levers
Support growth with high-return Innovate with a focus on sustainability Be the preferred partner expansion projects (polyamides in (bio-sourced materials, new energy, to solve our customers Asia, PVDF globally, PEKK in US,…) lightweight,…) materials challenges
1. As % of sales
15 ODDO BHF FORUM - JANUARY 2021 COATING SOLUTIONS STRATEGY AT A GLANCE
2019 KEY FINANCIALS 2019 REVENUE SPLIT 2024 AMBITION
Paint & coatings 8% €2.1b 8% Consumer goods sales 8% Nutrition & Water General industry 3% 60% 14% Building & Construction Annual organic sales growth 14.4% Electrics, electronics & energy EBITDA margin
5-6% 12% 1 Europe CAPEX intensity 41% North America +150bps Asia & Rest of the World EBITDA margin increase 2.3% 47% R&D intensity1
Growth levers
Increase capacity in our existing platforms in Optimize operating model incl. Further strengthen our Sustainable technology fast growing geographies (e.g. photocurable closer integration with other offering (Low-VOC formulations, bio-sourced, resins in China, powder coatings India,…) platforms and downstream acrylics energy efficient products)
1. As % of sales
16 ODDO BHF FORUM - JANUARY 2021 SUSTAINABLE INNOVATION AT THE HEART OF OUR GROWTH STRATEGY (1/2)
LITHIUM-ION BATTERIES 3D PRINTING
Optimized performance of Li-ion battery cells for EV Dedicated Global Innovation Centers Foranext® electrolytes salts Radiation Cure Thermoplastic Powder Bed of Liquid Resins extrusion Fusion Anode - Cathode +
Graphistrength® conductive additive carbon nanotubes Arkema’s solutions serving diverse end-markets Kynar® PVDF Kynar® PVDF coated separator binder Aerospace Industry Sports
Heat transfer and battery pack weight reduction
Bio-based Rilsan® PA11 for bus bar protection ® Elium recyclable composite for casing Extremely complex High chemical Personalized helmet Continuous fiber 3D Printed Bostik thermal conductive adhesives part in Kepstan® resistance flange 100% bio-based composites PEKK composite Kynar® PVDF Rilsan® PA11 with Sartomer resins (Hexcel) (EOS/Hexr) (Continuous Composites)
17 ODDO BHF FORUM - JANUARY 2021 SUSTAINABLE INNOVATION AT THE HEART OF OUR GROWTH STRATEGY (2/2)
LIGHTWEIGHT SOLUTIONS COMPOSITES
POLYMERS PYRAMID OF PERFORMANCE Harsh environment Wind Automotive Elium® recyclable thermoplastic resin for PEKK wind turbine blades High temperature PA PVDF Rilsan® HT for auto Pierre Potier Prize 2020 PA Clear PAHT fluid transfers
PA11 7x lighter than steel Pebax® Rnew ® +150°C operating Hydrogen PA12 PA10 temperature Orgasol® Rilsan® Matrix or Elium® composites for hydrogen tank structures (type V & type IV) Low density Sports
Pebax® foams for Aeronautics sports shoes outsoles Density 0.15 Kepstan® PEKK + carbon fibers for Rebound 70% aircraft structure Joint R&D laboratory in France with Hexcel Bio-sourced
18 ODDO BHF FORUM - JANUARY 2021 MAJOR INVESTMENTS SUPPORTING ORGANIC GROWTH
Orgasol® PA12 Industrial adhesives PVDF +50% global capacity in Mont, FR World-scale plant +50% capacity in Nara, JP for batteries in Changshu, CN 2019 2019 2020 Acrylic acid 2020 90kt reactor in Photocure resins 2019 Clear Lake, US Polyamide 12 +30% plant capacity 2020 2022 in Nansha, CN +25% global capacity 2020 in Changshu, CN
2022
Fluorine chemistry Thiochemicals Polyamide 11 Innovative partnership with x2 methyl mercaptan NUTRIEN for the supply of AHF capacity in Kerteh, MY +50% global capacity in Aurora, US (40 kt/yr) (including monomers) in Singapore
19 ODDO BHF FORUM - JANUARY 2021 INVESTIGATING DIFFERENTIATED STRATEGY ACROSS INTERMEDIATES BUSINESSES
MMA/ PMMA FLUOROGASES ASIA ACRYLICS … Sales 2019, €b
0.61 0.7 0.3
Proposed divestment of Balance acrylic monomer Once these PMMA business to Trinseo2 Focus on specialty segment capacity in Asia through strategies are executed these (~€0.2b) high-value upstream partnerships and intermediates for fluoropolymers, segments will be downstream growth (organic integrated in as well as fluoroderivatives for or bolt-on acquisitions) Specialty Materials electronics & batteries
Investigate strategic alternatives for emissive applications (air conditioning and refrigeration), including partnerships (~€0.5b)
Strategic review in progress to assess the best path for each component – pending appropriate market conditions
1. Excluding €0.2b from Functional Polyolefins business – closing of divestment to SK global Chemical on 1 June 2020 2. Subject to the approval of the relevant antitrust authorities and to an information and consultation process involving Arkema’s employee representative bodies
20 ODDO BHF FORUM - JANUARY 2021 DIVESTMENTS IN INTERMEDIATES IN 2020
MMA/PMMA FUNCTIONAL POLYOLEFINS
Proposed divestment of Sale of Arkema’s Functional Arkema’s PMMA business to Polyolefins business, part of Trinseo 1 PMMA activity, to SK Global Chemical
Revenue 2020e ~€510m EBITDA 2020e ~€122m Revenue ~€250m per year
Markets: automotive, construction, signs & displays, Markets: food packaging, and sanitary ware cable, electronics and coating markets
Enterprise value €1,137 million, Enterprise value (9.3x EBITDA 2020e) €335 million Capital gain tax ~15% of EV (net proceeds of €246m)
Closing expected mid-2021 Finalized on 1 June 2020
1. Subject to the approval of the relevant antitrust authorities and to an information and consultation process involving Arkema’s employee representative bodies
21 ODDO BHF FORUM - JANUARY 2021 CASH ALLOCATION PRIORITIES
Estimated cash to allocate over the 5 year plan ~€3.5b at constant leverage 3 (~1.6x) SUBJECT TO MARKET CONDITIONS
+25% 40-45% . Reiterating our progressive dividend policy, targeting 40% payout ratio by 2024 Return to shareholders . Opportunistic share buy-back program
. Employee shareholder program
. Mostly small and medium size bolt-on acquisitions 40-45% . Across our 3 platforms with priority in adhesives Net M&A . EV/EBITDA multiple after growth and synergies of <7x EBITDA . Proceeds from strategic review of intermediates
15% . Exceptional capex: IRR ≥ 15% after taxes Exceptional growth capex . Includes capacity expansion PA11 in Asia (€450m total Cash to allocate1 Cash to allocate2 Cash investment, and €100m EBITDA contribution at maturity) 2015-2019 2020-2024 allocation and Nutrien partnership (US$150m investment) 2020-2024
1. Cash from operations minus recurring CAPEX 2. Cash from operations minus recurring CAPEX plus additional net debt available at constant leverage 3. 1.6x net debt to EBITDA ratio incl. €700m hybrid bonds
22 ODDO BHF FORUM - JANUARY 2021 MAINTAIN STRICT FINANCIAL DISCIPLINE
ROCE Net debt to EBITDA ratio Solid investment grade >10% <2x rating Incl. hybrid bonds
Recurring Capex Controlled working capital ~5.5% ~14% of sales of sales
23 ODDO BHF FORUM - JANUARY 2021 STRONG COMMITMENT ON CLIMATE AND ENVIRONMENT
CLIMATE CLIMATE PLAN ENVIRONMENT
Commitment to Paris agreement New targets for 2030 and Science-Based Target trajectory well below 2°C AIR WATER ENERGY
GHG EMISSIONS in kt eq. CO2 Greenhouse gas emissions 6,480 (GHG) new target for 2030 -65% -60% -20% vs 2012 vs 2012 vs 2012 4,720 4,087 in volatile organic in chemical oxygen in net energy CLIMATE compounds (VOC) demand (COD) purchases intensity ≤ 2,950 emissions intensity intensity
kt eq. CO2 Performance 2019 (vs 2012) (-38% vs 2015)
2012 est. 2015 2019 -40% -50% -9%
24 ODDO BHF FORUM - JANUARY 2021 Q3 2020 RESULTS SOLID Q3’20 PERFORMANCE IN THE CURRENT CONTEXT
SALES EBITDA ADJ. NET INCOME FREE CASH FLOW
In €m In €m In €m In €m -13.9% 16.1% €1.42 x1.3 MARGIN ADJ. EPS
2,216 385 285 1,909 307 218 166
109
Q3'19 Q3'20 Q3'19 Q3'20 Q3'19 Q3'20 Q3'19 Q3'20
26 ODDO BHF FORUM - JANUARY 2021 STRONG SEQUENTIAL VOLUMES IMPROVEMENT AND EXCELLENT CASH GENERATION
9% decline at constant scope and currency (-18% in Q2'20), in line with the guidance of around -10% issued end July. Negative volume effect of 4.4% €1,909m sales Rebound in the construction and decorative paints markets. Industrial markets remain well down overall despite growth in certain niches with a high technological content such as batteries
Moderate decline in Specialty Materials 1 EBITDA, supported by Bostik’s growth and the resilience €307m EBITDA of Advanced Materials’ and Coating Solutions’ margins Marked decline in Intermediates, despite the sequential improvement in PMMA 16.1% EBITDA margin Continued fixed cost reduction initiatives
€109m adj. net income €1.42 adjusted EPS
High level, reflecting the strict management of working capital and moderation €285m free cash flow of capital expenditure
€1,869m net debt Down €265m compared with end of June 2020 (incl. hybrid bonds)
1. Specialty Materials include the three following segments: Adhesive Solutions, Advanced Materials and Coating Solutions
27 ODDO BHF FORUM - JANUARY 2021 Q3’20 KEY FIGURES
In €m Q3’19 Q3’20 Change Sales 2,216 1,909 (13.9)% EBITDA 385 307 (20.3)% Specialty Materials 312 268 (14.1)% Intermediates 92 55 (40.2)% Corporate -19 -16 EBITDA margin 17.4% 16.1% Specialty Materials 1 17.7% 16.9% Intermediates 1 20.6% 17.5% Recurring operating income (REBIT) 250 171 (31.6)% REBIT margin 11.3% 9.0% Adjusted net income 166 109 (34.3)%
Net debt (incl hybrid bonds) 2,470 1,869
€2,331m as of 31/12/2019
1. Excluding corporate costs allocation
28 ODDO BHF FORUM - JANUARY 2021 Q3’20 SALES BRIDGE
In €m Volumes Prices Scope Currency
(4.4)% (4.5)% (1.7)% (3.3)%
More favorable dynamic Impact of lower Divestment of Further vs Q2’20 (-12.2% YoY) propylene prices in Functional depreciation of Coating Solutions Polyolefins on US dollar and Rebound in construction 1 June 2020 certain and decorative paints Continued emerging challenging Growth in batteries Positive currencies 2,216 market conditions contribution of against the euro Industrial markets in Intermediates Prochimir, LIP remained mixed 1,909 and Lambson Gradual improvement in automotive
Q3’19 Q3’20
29 ODDO BHF FORUM - JANUARY 2021 ADHESIVE SOLUTIONS (27% OF GROUP SALES)
Q3’20 KEY FIGURES Q3’20 SALES DEVELOPMENT Q3’20 SALES BY BUSINESS LINE
In €m Q3’19 Q3’20 Change Volumes (0.3)%
Sales 522 516 (1.1)% Construction & Prices +0.4% 222 Consumer EBITDA 71 73 +2.8% 294 Currency (3.7)% EBITDA margin 13.6% 14.1% Industrial Assembly
Rec. operating income 57 57 - Scope +2.5%
Q3’20 HIGHLIGHTS €516m sales, down 1.1% YoY ● Sales back to prior year level at constant scope and currency, after the temporary drop in Q2’20 ● Volumes down 0.3% confirming strong recovery of construction, while industrial sectors remained challenging, and packaging and hygiene normalized ● Scope effect of +2.5% corresponding to LIP and Prochimir integration €73m EBITDA and 14.1% EBITDA margin
● EBITDA up ~3% YoY reflecting LIP and Prochimir contribution, very good performance in construction and DIY markets, and fixed costs control ● EBITDA margin +50 bps YoY, confirming Adhesive Solutions’ resilience in a challenging macro-economic environment and operational progress
30 ODDO BHF FORUM - JANUARY 2021 ADVANCED MATERIALS (31.5% OF GROUP SALES)
Q3’20 KEY FIGURES Q3’20 SALES DEVELOPMENT Q3’20 SALES BY BUSINESS LINE
In €m Q3’19 Q3’20 Change Volumes (12.6)%
Sales 708 603 (14.8)% 178 High Performance Prices +0.8% Polymers EBITDA 159 127 (20.1)% Currency (3.0)% EBITDA margin 22.5% 21.1% 425 Performance Additives
Rec. operating income 100 66 (34.0)% Scope -
Q3’20 HIGHLIGHTS
€603m sales, down 14.8% YoY ● Decline in volumes (-12.6%) linked to the Covid-19 crisis o In High Performance Polymers, strong growth in batteries overshadowed by sharp decline in industrial sectors, consumer goods and oil & gas o Performance Additives volumes down in oil & gas, partly offset by robust performance of certain markets like crop nutrition or medical applications ● Price effect of +0.8% mainly reflecting favorable product mix €127m EBITDA and 21.1% EBITDA margin ● EBITDA down 20% YoY, primarily reflecting the drop in volumes, notably for High Performance Polymers, and negative FX, partly offset by lower fixed costs ● EBITDA margin remained at a high level
31 ODDO BHF FORUM - JANUARY 2021 COATING SOLUTIONS (24.5% OF GROUP SALES)
Q3’20 KEY FIGURES Q3’20 SALES DEVELOPMENT Q3’20 SALES BY BUSINESS LINE
In €m Q3’19 Q3’20 Change Volumes +2.1%
Sales 532 469 (11.8)% 117 Coating Resins Prices (11.3)% EBITDA 82 68 (17.1)% Currency (3.4)% Coating Additives EBITDA margin 15.4% 14.5% 352
Rec. operating income 53 39 (26.4)% Scope +0.8%
Q3’20 HIGHLIGHTS
€469m sales, down 11.8% YoY ● Price effect of -11.3% primarily linked to lower propylene prices ● Volumes up 2.1% driven by decorative paints, while demand in other markets remained broadly lower versus last year €68m EBITDA and 14.5% EBITDA margin ● EBITDA down 17.1% YoY o Decline concentrated in acrylic activities not integrated downstream, amid challenging market conditions since the pandemic started o Performance of the other activities on a par with last year’s level, supported by good volumes in decorative paints ● EBITDA margin holding up well, benefitting notably from cost reduction initiatives and synergies between product lines within the segment
32 ODDO BHF FORUM - JANUARY 2021 INTERMEDIATES (17% OF GROUP SALES)
Q3’20 KEY FIGURES Q3’20 SALES DEVELOPMENT
In €m Q3’19 Q3’20 Change Volumes (3.8)%
Sales 447 315 (29.5)% Prices (10.5)% EBITDA 92 55 (40.2)% Currency (3.0)% EBITDA margin 20.6% 17.5%
Rec. operating income 61 27 (55.7)% Scope (12.2)%
Q3’20 HIGHLIGHTS
€315m sales, down 29.5% YoY ● -12.2% scope effect corresponding to the divestment of the Functional Polyolefins business, finalized on 1 June 2020 ● Price effect of -10.5% reflecting unfavorable market conditions in Fluorogases in EU and Asia, and in acrylics in China ● Modest volumes decline of 3.8% o Strong slowdown in Fluorogases o Higher demand in PMMA, driven notably by the gradual improvement in automotive and sustained momentum in the niche market for protective barriers €55m EBITDA and 17.5% EBITDA margin ● Considerably lower than Q3’19 in the unfavorable context linked to the pandemic ● Sequential improvement in PMMA
33 ODDO BHF FORUM - JANUARY 2021 HIGH FREE CASH FLOW IN Q3’20
RECONCILIATION OF EBITDA TO NET CASH FLOW Q3’20 HIGHLIGHTS
In €m Q3’19 Q3’20 Tax rate Q3’20: ~22% of REBIT (excl. EBITDA 385 307 exceptional items) Current taxes (48) (31) Strict working capital management Cost of debt (24) (19) ● 13.9% working capital on annualized 1 Change in working capital and fixed assets payables 59 160 quarterly sales (16.4% at 30 September 2019) Recurring capital expenditure (118) (105) Exceptional capital expenditure (30) (33) Lower capital expenditure vs Q3’19 Non-recurring items and others (6) 6 ● The Group confirms ~€600m of recurring and exceptional capex for 2020 FREE CASH FLOW 218 285
Impact of portfolio management (594) (5) Impact of portfolio management in NET CASH FLOW (376) 280 Q3’19 (€594m) mainly corresponding to ArrMaz acquisition
1. Excluding non-recurring items and impact of portfolio management
34 ODDO BHF FORUM - JANUARY 2021 Q3’20 NET DEBT BRIDGE (INCLUDING HYBRID BONDS)
In €m 1.6x LTM EBITDA
2,134 (285)
5 15 1,869
1,000 Hybrid bonds 700 Hybrid bonds
300 Hybrids reclassified as current debt *
1,134 869
30/06/2020 Free cash M&A FX and 30/09/2020 flow others
* Refunded in October 2020
35 ODDO BHF FORUM - JANUARY 2021 CSR HIGHLIGHTS
PORTFOLIO SUSTAINABILITY ASSESSMENT ELIUM®
65% of Group sales assessed at end Sept. 2020 ZEBRA project for the first 100% recyclable (44% at end 2019) wind turbine blade 2020 Pierre Potier Prize: Elium® thermoplastic resin for wind turbines Around 46% of assessed sales significantly contribute to UN SDGs FIRST EVER GREEN BOND
€300m, 6 years maturity, coupon 0.125%, CLIMATE & ENVIRONMENT (9M’20 vs end 2019) dedicated to new world-scale plant in Singapore for 100% bio-based Rilsan® PA 11 CLIMATE AIR WATER ENERGY RANKING #11
#11 in the Wall Street Journal's ranking of the 100 “Most Sustainably Managed Companies in the World”, and #1 in the chemical sector Around More than More than Broadly -10% -10% -5% stable DJSI Driven by proactive actions of the Group DJSI World: #6 in the “Chemicals” category while lower volumes had a slight favorable impact on climate and a negative impact on energy (among 114 companies assessed)
Indicators in absolute value for GHG (climate) and in intensity for VOC (air), COD (water) and energy.
36 ODDO BHF FORUM - JANUARY 2021 OUTLOOK
The fourth quarter is marked by a second wave of Covid-19 in many countries, especially in Europe, which could weigh on global demand.
In this uncertain environment, Arkema estimates at this stage that activity levels should nevertheless be in the continuity of those of the third quarter, excluding a significant impact on the global economy linked to the new sanitary restrictions.
Fourth-quarter sales could therefore decline by around 7% year on year at constant scope and currency, reflecting a solid performance of the construction market for Bostik and Coating Solutions, a sequential improvement for High Performance Polymers, but a continued marked decline in Intermediates.
Arkema will continue to focus its efforts on the elements that are within its control, notably cost reduction initiatives and the strict management of working capital and capital expenditure.
The Group will continue to implement its long-term strategy, in line with its ambition to become a pure player in Specialty Materials by 2024.
37 ODDO BHF FORUM - JANUARY 2021 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. In the current context, where the Covid-19 epidemic continues to rapidly spread across the world, and the evolution of the situation as well as the magnitude of its impacts on the global economy are highly uncertain, the retained assumptions and forward looking statements could ultimately prove inaccurate. 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, developments in the Covid-19 situation, and changes in general economic and business conditions. These risk factors are further developed in the 2019 Universal Registration 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 since 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 main performance indicators used by the Group are defined in the 2019 Universal Registration Document. As part of the analysis of its results or to define its objectives, the Group uses in particular the following indicators: EBITDA margin: corresponds to EBITDA as a percentage of sales, EBITDA equaling recurring operating income (REBIT) plus recurring depreciation and amortization of tangible and intangible assets REBIT margin: corresponds to the recurring operating income (REBIT) as a percentage of sales Free cash flow: corresponds to cash flow from operations and investments excluding the impact of portfolio management EBITDA to cash conversion rate: corresponds to the free cash flow excluding exceptional capital expenditure divided by EBITDA
38 ODDO BHF FORUM - JANUARY 2021