Arkema (AKE) Morgan Stanley Chemicals Cannonball Run Field Trip Presentation summary

Strategic vision and business model

• Focus on becoming a specialty materials leader with innovative, sustainable solutions for evolving customer needs.

• 92% of sales derived from specialty materials, with a balanced global footprint across Europe, North America, and Asia.

• Key markets include building & construction, general industry, consumer goods & electronics, health, water & nutrition, and transportation & energy.

• Five high-growth platforms targeted: EV batteries, green energy, sustainable polymers, efficient buildings, and advanced electronics.

• Over 50% of R&D spending directed to these high-growth platforms, with organic sales CAGR three times the group average.

Financial performance and resilience

• 2024 sales reached €9.5bn, with a stable performance versus 2023 and an EBITDA margin of 16.1%.

• Q1 2025 sales increased 1.7% year-over-year to €2,381m, with stable volumes and strong growth in Asia.

• Specialty Materials accounted for 93% of Q1 2025 sales, maintaining a 13.8% EBITDA margin.

• Net debt and hybrid bonds at €3,425m, representing 2.3x LTM EBITDA.

• Cash flow reflects major project finalizations, with recurring capex at €761m in 2024 and a 77% EBITDA-to-operating cash conversion rate.

Operational efficiency and cost management

• Achieved €55m in cost savings in 2024, targeting €250m by 2028 through process improvements, digitalization, and procurement strategies.

• Margin volatility significantly lower than peers, demonstrating superior resilience in varying macro environments.

• Continuous debt refinancing and strong financial ratings from Moody's (Baa1) and S&P (BBB+).