Arkema S.A.

Thierry Le Hénaff - Chairman and Chief Executive Officer Thierry Lemonnier - Chief Financial Officer

Martin Roediger - Kepler Cheuvreux Paul Walsh - Morgan Stanley Stephen Benson - Goldman Sachs Peter Clark - Société Générale Patrick Lambert - Raymond James Thomas Wrigglesworth - Citigroup Laurent Favre - Evercore ISI

Good morning, everyone. Welcome to this conference call.

So with me today we have Thierry Lemonnier, our CFO; Sophie Fouillat and François Ruas from the Investor Relations, I think you know everyone of them. To support this full-year 2016 results presentation, I propose to go through a set of slides, which is the one you – which have been posted on our website.

And I will propose to comment together with the other Thierry. As you have seen from the figures released this morning, we are quite pleased to announce that Arkema finished the year strongly and achieved overall an excellent share with a new record high EBITDA at 12.5% on last year.

EBITDA margin is back to a strong level, which is close to 16% despite the dilutive effect of Bostik on the second level of margin as you know. Adjusted net income is at 34% year-on-year, which from our standpoint is really a remarkable achievement.

And cash generation, which is an important metrics, is above €400 million as I shared, again excellent, and supports the strength of the balance sheet. These results, there are certainly no accident, this simply reflects the successful transformation of the Group towards specialty chemicals and higher value-added product and the strong profile of what I would call the new Arkema.

As important and we’ll develop this point in our presentation, we believe that this new Arkema is also very well positioned for the coming years. From a qualitative standpoint, 2016 was also a very important year.

Two facts illustrate particularly well this statement. First, the integration of Bostik and its ramp-up confirm all the good things we told you when entering the adhesive and sealants market two years ago.

So the more of the closing of Den Braven acquisition at the end of the year, last year or the end of last year, with no doubt, been as a positive step to reinforce Bostik. Secondly, we have successfully finalized the ramp up of Malaysian plant in Thiochemicals.

This gives the global manufacturing presence to this product line and provides a new growth pillar to Arkema for the future. These elements confirms the current strong momentum of Arkema and led as you could see the Board of Directors to decide to propose a dividend increase of 8% to €2.05 per share, a strong sign of confidence in the perspective of the company.

After this short introduction, I suggest that we now go through the set of slides. I will start then, if you have the presentation with you, with Slide 3.

During the past 10 years, we have significantly strengthened the Group’s profile. It’s a direct consequence of executing our strategy based on the strong investment in emerging countries and active M&A towards specialty chemicals and the innovation pipeline focused on megatrends.

And we believe that today Arkema presents a unique combination of a strong portfolio, a superior financial performance, a recognized management and a proven strategy. Moreover, we should not see this 10-year anniversary as an endpoint, but only as a step in the development of the company.

Our intent is to reach significant year-over-year growth in the long-term and we have the necessary ingredient for this. We have the ambition.

We have the talent, the positioning and the ideas. And our long-term growth catalysts are now well in place.

I move now to Slide 4. Clearly, two elements illustrate towards the step-up of the Group’s profile.

First of all, the split between specialty businesses and most cyclical ones. More than 70% of our sales are now achieved in the specialty businesses compared to slightly less than 45% six years ago.

It’s a big difference, when you think about resilience and cash generation. Over the same period of time, we also have deeply rebalanced our geographic positioning, which has now become a key competitive advantage for our company, while it was considered, as you know, root point at the beginning.

It has clearly a positive impact in the ability of the company to grow and you could see it in 2016 with our organic growth. North American and Asia are the most robust growth areas currently represent two-thirds of our presence.

As you can see, we are well on track to reach our target of a fully balanced geographical presence one-third, one-third, one-third. I move now to Slide 5, and let’s focus on the specialty businesses part for a minute.

One key feature of this product lines obviously they are resilient. You can see that combined, we consistently delivered EBITDA margins at a high-level between 15% and 16.5% since 2010 and despite Bostik dilutive impact as from 2015.

So you can see that the performance has been quite stable and robust for the specialty part of our portfolio in spite of being delivered in a highly volatile economic environment. With regard to more cyclical businesses, we delivered above the cycle a robust return on capital employed and generated significant cash.

Generally it’s robust and this is why we have our strategy to increase significantly our part of specialty businesses over time is that they are more volatile over the cycle. Now Slide 6.

We have seen that the geographic footprint of the Group have also further developed in the right direction with a favorable and balanced profile. If you look at the sales by country, the U.S., I must say, our most important country generating 30% of our sales.

France and China are next with close to 10% each, and the UK only represent 4% of our sales mostly it’s for Bostik. Note that Brazil is only 2% and that overall our numbers of country make our presence quite diversified, which is a fairly not the best thing in the current worldwide context.

The Slide 7 is reassuring an excellent free cash flow generation, you know that this metric has been identified as one of our key priority during our last Capital Market Day into 2015. We had a mid-term objective to deliver on EBITDA to cash conversion in a ratio of 35% on average to profit by lower capital intensity and also a strict working capital management.

You can then see that our performance in 2015 and 2016, I already addressed clearly reaching this target, which confirms our full commitment to cash and this is certainly an area if you put everybody strictly on the same definition where we work among the best performance among our peers. On the Slide 8, you can see that we’re happy to see that our share price in 2016 reflecting the quality of our financial performance, as well as the step-up in the company profile with the high 44% increase of the share gain year-on-year.

Beyond that, since that spin off, the share price was multiplied by 3.5 while on the same period, if you take for example the Tecon, [ph] but you could take as our index was stable. Then I move to Slide 9.

As I told you in my introduction, 10-years after the spin-off, is certainly not the end of the story. Potential for further value creation remains significant.

This potential is supported by several significant growth catalysts which we implemented in recent years and that you know. These catalysts can be summarized in five main areas; I would take the first one which is Specialty Adhesives, supported by the integration of Den Braven.

Also the further expansion of Bostik ambitious bolt-on acquisition, which are already on the thoughts. I propose to come back more specifically on the decision in the next slide.

Innovation is also an area where Arkema has been very successful. We have been generating an amount of pride for the sixth time in the row run by Thomson Reuters among their 100 Most Innovative Companies In The World.

We believe that a world led by megatrends presents significant opportunities for those company which have the right technologies and which know how to seize these opportunities. Arkema is one of those companies.

We are very promising new development, more particularly in Technical Polymers in the field of lightweight in water treatment and new energies. This is why we have also said our capacities expansion ongoing that will bring positive contribution in 2017 and 2018, another expansion plan will certainly follow.

Molecular Sieves, our activities that is expected to grow steadily in the coming years, supported by strong growth in Asia and the Middle East. To meet this additional demand, as you already know, we’re currently doubling our production capacities in Honfleur in Normandy in France with a grand opening expected in early spring.

Besides the Downstream Acrylics businesses which are in development, will be supported by innovation in sustainability and additional capacities such as one we have announced in India for 2018 in powder for our Coating customers. Finally and at least Thiochemicals, we continue to offer attracted development opportunities and to deliver high profitability levels supported by the long-term growth prospects in animal nutrition and in oil and gas application.

With all these major pillars and certainly more, we believe we have all the ingredients to continue to grow in the coming years and to create significant value for our shareholders. I would like now, which is Slide 10, to come back on Bostik, one of the most important pillar of our development in the coming years.

So far the integration of Bostik into Arkema has been a success. As the playing field is unlimited, as I’ve said many time with – for bolt-on acquisition with strong returns.

You should take initial 11 times EBITDA to price value, which is a price we paid to Total, as of two years, it has gone down to eight times only and will continue to go down in the coming years far below the Arkema multiples, so this is clearly a success. This is a result of well executed synergy with Arkema and also a good combination of organic growth project and cost cutting initiatives.

We are fully on track with our long-term target of 15% EBITDA margin and €300 million EBITDA. And please keep in mind that this has reduced capital intensity with CapEx below 3% of sales and provided strong and resilient cash generation, which means that when you say 15% EBITDA margin, it in fact means a 12% EBIT margin, which is high in the sector.

All these elements confirms the resilience of the Bostik acquisition and also the long-term potential of Adhesive we’re increasing for Arkema in a market which remains very fragmented. From this standpoint, the acquisition of Den Braven is a new step forward in one of Arkema larger driver for 2017.

What we can say with just three months within Arkema is that things are going as planned with highly motivated and skilled teams. The integration is going smoothly and we shall start to see the benefit of the sales synergies between Den Braven and Bostik in the second half of the year.

On Slide 11, you can see that all-in-all a very good year both in terms of financial performance and our ability to execute our strategy. But that said, we could not grow and improve our profitability without being strongly committed to further reinforce Corporate Social Responsibility within the company.

We are well aware that this dimension has taken the growing spaces a minor Bostik orders. We have ambitious target for 2025 while included within our long-term strategy for both safety and environment and we believe we are now well positioned of these matters versus sour peers.

To support our efforts and make sure our priorities are in line with the expectation of the different stakeholders, we initiated materiality analysis in 2016 which confirm that we are well aligned. Following this analysis, we further strengthened our CSR policy by adding, for example, two new objects addressing the feminization of the top management as a percentage of non-French in executive positions.

Let’s move now with Slide 13 on our financial performance. As we already mentioned, we’re quite pleased with this achievement that we should not underestimate.

As a matter of fact, last year was a record year for Arkema and compared also from a very lean to a very solid 2015. EBITDA at €1,189 million is the highest ever delivered by the Group with all three divisions compared to last year, and no effect from changes in the scope of businesses and a progression which is clearly one of the best in our industry.

Adjusted EPS is significantly up 31% year-on-year at €5.56 per share. Cash generation was strong as in 2015, as I say, with €426 million free cash flow and net debt is only slightly up from last year despite the important acquisition of Den Braven at the very end of the year for a long-term price value of €485 million.

By far, if you look at Slide 14, the main driver for this significant increase versus 2016 was our internal project which represented three-fourths of the total EBITDA annual growth. Bostik ramp-up was a big factor as you understood from my previous comments.

Consistent with our strategies in the spin-offs benefit from our innovation, megatrends, we’re also a major contributor, through successful commercial development in Technical Polymer and lightweight materials and new energies. Also new product introduction and focused development at key accounts in downstream acrylics, and in coatings, coating and resin [Indiscernible] were positive as well on Arkema 2016 performance.

As we committed late last year, Fluorogases have further improved our performance and we are fully on track to achieve our plan to recover €80 million EBITDA by the end of 2017 versus 2014 with a combination of better pricing, new business development and cost cutting. Of course as for any company, 2015 had realized with quarter one acrylic monomers, continuing to be challenging at least for the first nine months of 2016 and that said, we have seen some improvement as expected as we told you on this product line as of end, especially in Asia and this supports our assumptions of gradually improving market condition in 2017 in acrylic monomers.

I will now hand it over to our CFO, Thierry Lemonnier, who will give you more additional details on our 2016 financials.

Thank you, Thierry. I will now detail the 2016 performances.

P&L shown on Slide 15 is rather self-explanatory. Sales slightly down year-on-year but overall stable at constant scope of business and Forex.

EBITDA margin close to 16% is significantly above last year, despite the impact of the Acrylic cycle and this still dilutive effect of Bostik. Net income at €427 million is up 50%.

I know that some of you were expecting an update of the sales split by end markets in the acquisition of Bostik and that is what we illustrated on Slide 16 where you can see limited change on the previous one established before the acquisition of Bostik. Consumer goods is slightly higher at 22%, while coatings and chemicals and plastics are just behind at 19%.

Arkema’s technologies are for a wide range of solutions to support the growth of the different markets. The diversity of end markets is an element of stability in the current environment.

If we look now at the sales breakdown by business line you see that Bostik is the largest business line for Arkema, representing 21% of our total sales and 45% of HPM sales. This percentage will increase in 2017 with the contribution of Den Braven and will continue to grow in the coming years in line with our strategy to further develop Adhesives.

All nine business lines have performed well or very well in 2016, the only exception being, as you know the Acrylic business line. At €7.5 billion sales are down 1.9% year-on-year, but are close to last year at constant scope of business and Forex.

In a moderate growth environment volumes are up 3.2%, mainly supported by innovation Technical Polymers. This trend accelerated at year-end with a 5.8% in growth, sustained by a context of increasing raw material prices and possible anticipation by certain customers.

The negative price effect reflects both the impact of lower raw material prices and Acrylic cycle. However this effect turns positive in the fourth quarter on increasing raw materials as we started to pass price increases on the better acrylic monomer prices.

Let’s now look at the performance of each segment. High Performance Materials delivered a steady growth year-on-year, supported both by Bostik and Technical Polymers.

Sales are up 1.2% at constant scope of business and Forex with good volumes offsetting slightly lower prices. Scope of business effects reflects mainly the impact of one additional month for Bostik in January, which largely compensates for the sale of the Activated Carbon and Filter Aid business at year end.

At €570 million EBITDA, it is up 12.6% year-on-year. Bostik achieved another strong contribution with €210 million EBITDA.

Geographic expansion, synergies and lower cost all supported this very good performance. Technical Polymers delivered very high performance, supported by innovation and the continued good developments in lighter materials and new energies that should be consolidated in 2017.

EDITDA margins stands at close to 17%, reflecting Bostik’s progression and the high performance of the rest of the division with a margin close to 20%, at historical high. So, clearly an excellent performance for HPM.

Performance in Industrial Specialties is also excellent this year, sales decreased by 5.5% of €2.3 billion with the impact of the Sunclear divestment. Volumes increased by 2.2%, supported by all four business lines, while prices reflected lower input costs overall.

EBITDA is 13.2% or €473 million with a very high EBITDA margin of 20.4%. Thiochemicals realized a very robust performance, benefiting from one additional quarter of Kerteh’s platform in Malaysia, which offset the impact of the regulatory maintenance turnaround in Q3 on this platform.

In Fluorogases, profitability continues to gradually recover according to our plan. In PMMA, market conditions have continued to be favorable.

And Hydrogen Peroxide benefited from the share of specialties. Coating Solutions also progressed this year with an EBITDA up 9.5% versus last year, reflecting the good performance of our downstream businesses and some improvements in Q4 in acrylic monomers market conditions from the low levels since the end of the year.

Sales amounted to €1.8 billion, down 4% compared to last year. This is mainly due to the lower prices reflecting both the acrylics cycle and lower raw material prices.

It was partially compensated by a higher demand in both monomers and downstream activities leading to a 5% volume growth, at close to 12% EBITDA margin resisted [ph] well. A few comments now on cash flow and net debt, which are both very satisfactory points of this quarter.

Free cash flow generations continued to be very strong at €426 million. This strong performance is a consequence of three main elements, higher EBITDA, lower CapEx and a very limited working capital variation.

CapEx was slightly lower than expected at €423 million, that represent 5.6% of after-tax sales, so very close to our 5.5% target level. Working capital reflects our optimization efforts with a ratio to sales globally stable at 14.5%, excluding Den Braven.

This is a strong performance keeping in mind that raw materials increased in Q4. M&A cash outflow of €269 million is the net impact of Den Braven’s acquisition for a price net of the acquired cash of €338 million on the divestment of the Activated Carbon and Filter Aid business and of the implementation of the agreements negotiated with Jurong Chemicals in acrylics in China to access to 50% in total of the production capacities of the site.

As a consequence, conversion of EBITDA to cash is at 36% fully in line with our ambition. For next year, CapEx should be at a bit higher including Den Braven at around €450 million and working capital and sales should remain at around 15% of sales.

After the acquisition of Den Braven, net debt at the end of the year is slightly below €1.5 billion. That is 1.2 times EBITDA gearing, excluding hybrid is at 35%.

One important reasons of the year is that the negative outlook on both ratings agencies has been lifted in November. This confirms the solidity of our financial situation.

A few comments now on the other elements of the balance sheet, the variation between the end of 2015 and at the end of 2016 is mainly the consequence of the integration of Den Braven in the accounts. However, the allocation of the purchase price has not been done at the end of the year because of the late date of closing.

This will be done during the first semester of 2017. Another important point at Arkema is our pension liabilities [remain or whole] [ph] limited at €366 million.

Finally, shareholders’ equity stands at €4.2 billion, including the €700 million hybrid. Dividend is obviously a key element of the return to shareholders.

The policy validated by the Board is to make it progressively grow according to Arkema’s policy by continuing to reinvest available cash flow in value creating investments and acquisitions. Taking this into account, the Board will propose to the next shareholder of meeting to increase the dividend by 8% to €2.05 per share.

This represents a payout of 37% of adjusted net income and it will be fully paid in cash. Let’s look quickly at the first quarter performance, sales at €1.9 billion, up 5% upon last year, and strong volumes across all divisions and more particularly in Coating Solutions.

Even with the usual year-end seasonality, demand was a bit better than expected in the context of rising raw materials and rather low inventories at customer level. EBITDA at €231 million is up 14% on last year at a record high fourth quarter.

Now, let’s have a look at our performance by division. High Performance Materials achieved another strong performance with €116 million EBITDA, supported by a steady contribution from both Bostik and Technical Polymers and despite the impact of the sale of the Activated Carbon and Filter Aid business.

Industrial Specialties also performed well at €87 million EBITDA, up on last year reflecting the solid contribution of all business lines and some improvements in Fluorogases. Finally, Coating Solutions are significantly up year-on-year on better market conditions in acrylics monomer, especially in Asia and solid downstream acrylic.

So all-in-all, a strong end of the year. This concludes my presentation.

And I will now hand it over to Thierry for his comments and outlook.

Thank you Thierry for your comments. I will now conclude this presentation and giving you some elements on the outlook.

And I’m sure or as you’re sure, that in fact this is part of the presentation, you would be more substantive to. As I’ve said earlier, 2016 – let’s come back a few minutes on the 2016, resulted in a straight once again the rightness [ph] of our transformation strategy.

You have also understood clearly that the future growth of Arkema relies on solid catalyst which are clearly identified and we’ll see probably the group in the coming years. We have organized Capital Markets Day in July and Sophie will soon communicate the date to you, which will come back on this catalyst and emphasize how the management see the long-term perspective of the company, which we strongly believe are again promising.

In shorter-term, I mean, in 2017, we expect the economic environment to continue to be complex and volatile, no surprise there, it has been like that for many years, since many years. As you know, political uncertainties are present in many countries and may influence in the quarterly time, which means that again we need to counter our sales and our internal momentum.

Back to the macro for this year, we think that global growth should remain overall moderate, with still market differences by region, for example, we’re more confident is dynamics of Asia and North Americas, as well as in Europe and South America. We also continue to see volatility in raw material prices and currencies, which is something we’ll monitor carefully, but again, no surprises there.

So more specific to Arkema, we did a tour on acrylics and PMMA. With regard to acrylics, we expect market conditions in acrylic monomer to gradually improve compared to last year, so we are fully in line with what we told you in the course of 2016.

And on the other hand, again, as we told you last year that we see it for this year, we expect PMMA to start to normalize ours from the second-half of the year. In this context, we will as usual focus on delivering on the element that we control and which include if we focus on the most stable projects or levels, integration of the Den Braven by Bostik.

I would quote also another year of improvement in Fluorogases. The benefit of innovation in HPM, and the ongoing focus on operational excellence to offset part of the mechanical inflation on fixed costs.

We’ll obviously continue to adopt our selling prices, as we did at the end of last year to reflect rising raw material prices when we did it. In terms of catalyst fleet, just note that we have a change year-on-year, two important maintenance turnarounds positioned in Q2 this year, one in Technical Polymers in France and one in acrylic in the U.S.

So when you define the seasonality of our performance quarter-by-quarter, you have just to take that into account. Now, taking into account all the elements of this conclusion based also on our confidence in our internal dynamics, which at the end, this is what makes the difference.

We confirm – we would like to confirm our ambition to achieve a €1.3 billion of EBITDA in 2017. You will note that this is the first time that we give a precise quantitative guidance.

I think we’re one of the only ones in the market to give you for a precise quantitative guidance at the beginning of the year for the full-year. Please remember that this was the level that was set in 2014 when Arkema’s EBITDA was at €784 million.

At that time some of you have not believing at all in this guidance, we’re glad to confirm this goal. Delivering this goal would be an outstanding achievement by the Arkema team and would confirm the great quality of new Arkema.

This figure if you make the simple math, but it’s important to do it, a €1.3 billion would represent a 65% provision over three years, ultimately one of the highest in the industry. So to make the story short, just to give you my thought, I think we should not minimize 2016 achievement which is really superb with Q4 which is beating expectation and certainly not underestimate the excellent – the excellence of the target which has been expressed for 2017.

I thank you now very much for your attention and together with Thierry, as usual we’re ready to answer any of your questions.

Good afternoon to both Thierrys, Sophie and François. I have three questions.

First on acrylics, I calculate a 48% sales close in Q4 year-over-year, driven by more than 20% volume growth and roughly 20% price increases. Can you explain that strong recovery, of course partly driven by a low comparison base, but was there also some restocking?

Some outage of competitors? Or is that all underlying demand?

And do you see that strong momentum in Q4 to continue in the beginning of the first quarter. And looking beyond, you said that for 2017 you expect a gradual recovery.

When do you expect mid-cycle conditions? The second question is on Fluorogases, according to my calculations, sales was up by 50% year-over-year in Q4.

Normally Q1 and Q2 is peak season, like Q3 is a weak quarter and Q4 is the weakest quarter, but in absolute terms it looks that sales in Q4 was even higher than in Q1 and Q3. Can you talk about this un-normal seasonality please?

And the third question is on Den Braven, you acquired the company as of the 1st of December, it is in your balance sheet, but it’s not in your P&L, why is it not contributing to sales and earnings in December? Thanks.

Okay. Martin, so Thierry speaking, anyway you talks to two Thierrys, so it’s Thierry speaking by definition.

So on the acrylics, but also for Fluorogases, I think you really significantly overestimate the growth in volumes for the last quarter were good, now for among that, but really not at all at this level. And the 6% of the last quarter in terms of volume is far more spread than what you think on the different product lines.

It’s clear that we had a good growth in volumes generally and 6% is certainly over the market. So maybe there has been because as the raw material movement and the restocking at the end of the year, but anyway even without that it would have been a good quarter.

But many chemical company that is a good one have delivered a good growth in volume at the end of the year. So maybe some restocking.

So now we’ve got some restocking due to destocking before or some restocking which is anticipation. We – actually we don’t know – we think that we should not be too much worried, but what is in the pipeline in terms of stock because as you know there’s a strong discipline now since many years of the value chain on the, especially in Europe and U.S.

So we don’t think that a restocking is too much of a concern, but it’s clear that we’ve some restocking at the end of the year. But the performance in terms of organic growth would have been good even without.

So now your question is about underlying demand from momentum. I think there’s no reason why the acrylic market suddenly would increase significantly above GDP.

I think it’s a market which ongoingly is increasing every year, it’s a healthy market as we have ever said. So we should have a normal growth GDP plus next year on that – I would… In terms of momentum, I would not retain as – which is linked to your other question on acrylics as the evolution of unit spread, which is certainly more encouraging in the Q4 that it has been in the first nine months.

So we were glad to see that everything we told you since now 18 months, but we think that at the end of 2016 we should start to see some more positive sign and some recovery in 2017, in fact we’re there. It’s not coming from Asia, but it is also Asia which was weighing a lot on the cycle.

So this is consistent even if it is not scientific with our intuition and we’re glad about that. It was time for acrylic to see some recovery and it also comforts or decision with regard to our plant in China, which I think is a good thing.

With regard to when do we expect mix cycle condition? You know it’s very difficult to say.

We think that, it’s our current assumption; we think that nine months in 2016 we are low cycled and we think that in 2017 we should be mid-way between the slow cycle and mid-cycle. We don’t think that 2017 we’ll already be at the mid-cycle condition, so here we’ll tell the truth, but we think it’s too early.

We see more gradual recovery and to be mid-way between low-cycle and mid-cycle condition is better, that would be good for everyone, but we don’t count on that for the time being. With regard to Fluorogases, no, I think the volumes were hurt, but it was a good growth.

But frankly speaking, not at all at plus 50% and we’re probably above that fortunately. And – but it’s clear that it was also true for acrylics the fact that the base of less share was a bit low as a comparison year-on-year so that were good achievements, but not as you’re mentioning.

With regard to the last point, I think, it’s more on accounting decisions, I would pass it to Thierry.

Okay. So Martin, the reason why we’ve consolidated the P&L of Den Braven at year end is purely a technical issue.

We were and they were not ready to be consolidated because of the late closing date. And in the case in the month of December is a low months for Den Braven in U.S.

so its impact would have been very limited. So what will happen now is that obviously they will be consolidated as from January.

And as far as the price allocation is concerned, it will be done over the first semester of 2017, starting with inventories that should be high evaluated during the first quarter.

Thanks.

Yes, thanks very much guys for taking my questions. Afternoon Thierry, Thierry and Sophie.

My question was really just looking at the guidance for 2017. On my math, Den Braven is probably going to add €50 million or so in EBITDA; it will be good to know actually what that delivered in EBITDA terms last year and how much of the synergies you can deliver this year?

But really with only the PMMA business seemingly moving backwards under your assumptions in the second-half, are there any other product lines you physically see moving backwards this year, Thierry. Because I’m just curious around the sort of €60 million EBITDA you’ve got to deliver to hit the €1.3 billion or is the €1.3 billion just something you’ll reevaluate as you come through the year?

Thank you.

No, Paul, I think we have to be reasonable because I think we have to remember where we were six months ago where nobody was believing at all that we could reach close to €1.2 billion this year. And I don’t even talk about 2014 where maybe that was market we’re not believing at all on our possibility to reach €1.3 billion in 2017.

Yes, yes.

For the first time in our history we’re announcing a guidance early the year. I don’t think that our peers are doing the same.

Most of our peers are talking about a slight increase in profitability in 2017 in a world which is quite volatile, okay. So we’re not seeing an year-on-year increase even including Den Braven, but don’t forget that we also disposed off some specialty chemical business for the same year, it will be full-year.

We announced close to 10% EBITDA increase year-on-year which you saw both – everybody in our field is saying in Europe. And then some of them are saying they are very cautious or I think it’s not fair.

I think it’s a very good and excellent guidance for the year. I think it’s an encouragement from our side to commit to this guidance in front of the market.

We know how the market is volatile, 2015 was beating all expectations, 2016 is beating all expectation and the one that people decide in December, because the more you go into the year, the more you’re close to what will be achieved. But if you take midyear, we’re [Indiscernible] what people were saying.

We’re hidden on terms of these two excellent share of 2015 and 2016. The guidance which in terms of year-on-year is above the average increase expected for our basket of peers.

I think it’s a very good guidance and it will not be reasonable to say that this is confirmative. I think the year will come, there will be some plus or minuses, but at the end of the year if we’re doing that which is we’ll mean, as I talked to everybody, plus 65% compared to 2014 in terms of EBITDA, so you see what it can mean in terms of net result.

I think it would be an outstanding achievement, so let’s start to do that and everybody will be happy.

That’s very clear. And just on Den Braven, and if there’s too – what EBITDA contribution was there last year and how much of the €30 million is synergies you think you can deliver this year?

So I think your figure on Den Braven is okay for us. You can debate about a couple of millions.

But Den Braven was €44 million, as we expressed to the market when we made the acquisition. And we say to [indiscernible] so you can decide by €6 million [indiscernible] as you know just you talked to synergy on the second part of the year.

So it’s €4 million, €5 million this year, maybe between €3 million and €5 million. So it can be between €48 million and €50 million this year for Den Braven.

So, yes, we’re not up from that figure, we can debate about a couple of media, and we’re now at €48 million, but at the end your number is correct, okay.

That’s great, guys. Thank you.

Hi, thanks for taking the questions. First one was just on HPM on adhesives and sealants.

Could you discuss the margin trend for the first-half in light of rising raw material costs. And also just coming back to the Den Braven, was that sort of €40 million to €50 million EBITDA?

Is that a bit of margin business and what you had achieved on average in 2016 with just Bostik as well, just so we could get an idea about margin trend, given raw materials and then adding in this Den Braven deal that’s a higher margin, or lower margin business that should be coming in?

Yes, I hope I have a really good show one of your question, don’t hesitate to me if I didn’t take the full question. But I would say that with regard to the HPM and ability to pass raw material along the first this is clearly objective, we believe that we have a good pricing power on this downstream, which is already despite the fact as we have mentioned many times the benefit in the past two years of raw material decrease.

But when we look at the momentum of Bostik, we look at even if we’re going to do it in a focused way, our ability here and there to pass raw material increase, we look at the momentum in terms of synergy with Arkema, which are quite significant still, especially in the world of raw material. We believe that we’re very convinced that we’ll continue to not only to continue to ramp up the performance – initial performance of Bostik, but also in terms of Den Braven to deliver what I have explained to Paul before.

So I think we should be in good shape again this year for Bostik.

So you don’t anticipate much in the way of sort of margin squeeze in the first-half of next year on higher roles and specifically for adhesives and sealants?

There’s always, as you know, when raw material increase, you can have a gap in time when you first increases etcetera, but at the same time, as we mentioned for Bostik and also for Den Braven, we’re on a specific situation. We’re on top of the usual business.

We have a very important momentum of synergy. So all in all, we’re confident to deliver the profitability.

We want to deliver and then we have a long-term plan for adhesives and sealants.

Okay. And then Braven is a plus 13% EBITDA margin business, which looks slightly average for Bostik for last year?

Den Braven is shoemakers and that is more between 12.5%, let’s say to you something. So it means that part of the challenge that is also part of the upside we have for Den Braven to deliver the value on the acquisition price is that, we believe that together with Bostik, we can take Den Braven in line with a long-term plan of Bostik, which is, as you know, 15%.

So when we say Bostik, we’ll deliver 15%, not in 2020 EBITDA margin, which as you understood, we’ll make an EBITDA margin, at least, of 12%. This is including the Den Braven as a seniority between Den Braven and Bostik.

Okay. And…

Den Braven just right overall that we have to stop – we took both synergy and momentum that they have just rock. So now we need to do what we have done with Bostik, which is to take all the action plan and to implement then and then we’d be reading the check, we’re very confident on this acquisition, which I think is really a very good one.

Okay. And on acrylics you talk about a gradual improvement here.

But from what we can see on acrylic spreads, especially in Asia so far this year? It looks like it’s going out quite sharply again this is Q4.

So is it most likely to be a bit more first-half loaded than gradual?

So difficulty on acrylics and we know you all of you actually, when margin are low, we have to fight to explain you that it will come back step by step and nobody believes. And when they start to be in one region of the world, we have to fight to tell you that don’t extrapolate one quarter and one region or the full market.

So I think, we have – at the end the world is a world, we have to be reasonable. It’s clear that the good thing and this year what we should all retain is that what we told you since couple of those is true.

Acrylics is step by step coming back to better level, average level we normally get. We have to be cautious as usual.

For the time being, it’s mostly Asia. So it’s not Europe and the U.S., or there’s – before the global market is coming back more than where do you lead, we still have some way to go and Asia to be confirm, that Asia is a volatile market.

But all in all, we are more positive on the credit as we were one year ago. We will see, our assumption I think is reasonable to say that if we go gradually for 2017, if it is better, everybody will be happy anyway.

But I should not forecast that, if not it will not be reasonable to forecast something about what we say for the time being, actually that improve quarter-by-quarter, don’t worry.

Thank you very much.

You’re welcome.

Yes, good afternoon. Thanks, everyone.

Just a quick one or quick two actually. The first one digging down into Bostik, I don’t want to get too hang up on a quarter, especially on fourth quarter.

But it looks like your margin was up close to 200 basis points on my number, against a 100 basis points in Q3. So there seems to be a little bit momentum on the margin.

And I think Encor pointing to some pickup in the growth rate, which I think you pointed to as well. Just how the momentum looks going into 2016, because it looks like there’s – margin is picking up again and you’re getting good organic growth.

I know there’s some differences in regions with Encor and some of the sector seem to overlap. I think we’re talking about transport was one of them?

And then backing that, I’m looking at the high performance margin, excluding Bostik. It looks like that had a dip in Q4.

I know it’s very seasonal in Q4. We can have a little volume change, makes a big difference, et cetera.

But just wondering if there’s any untoward bearing in mind the raw material environment against all of this again? Thank you.

No, I understand your question. But frankly speaking, I don’t see any destruction either for Bostik, or the rest of the HPM.

With regard to Bostik, the margin was stable, which is performance and bigger raw materials have increased, as you know. So, in fact, I can – hearing all of you, I see too sensitivity the one that I see that raw material we lay down on the margin of Bostik and the one of the thing that they’re increasing, especially in the current and on service in the middle, which is to say, it’s an ongoing development of Bostik and the margin were stable after, I would say, the significant increase when compared to what we get from total, we’re stable in the next quarter.

So nothing is fine there in one direction, or the other. And to certain extent, I would say the same on the HPM.

It’s clear that the rest of HPM was comparing to a very strong base last year. So you could not expect significant increase in EBITDA year-on-year.

But it has been very a solid quarter and nothing hidden. But as you know, we never hide anything, so Peter so it’s not…

Can I just follow-on that Thierry, when you say stable, do you mean quarter-on-quarter, because that’s pretty much what I’ve got Q4 on Q3 was very stable, which is a good performance in Q4?

Yes, it was stable Q3 to Q4 if it is okay. I thought you are comparing Q3 to Q4, the margin of Bostik was stable and it was okay with, how to say that, with the influence of – you have to take into account the similarity like-for-like stable, but you have less sales in Q4s and you have in Q3 and don’t forget that.

Sure.

It’s mechanical. It plays down on the margin parentage of EBITDA just because of the – you have the same [indiscernible] and you have less sales.

Sure. So that’s a good performance, because year-on-year it was well up, yes, that’s what I was just trying to get at.

Thank you.

From here, I wish I can like-for-like if I would put the same seasonality in Q3, Q4, there’s no change in margin, let’s say variable margin, okay?

Okay. Thank you.

Hi, good afternoon, everybody. Thanks for taking a few questions.

Again on adhesives just to make sure for Den Braven. So nothing has been consolidated in the P&L, has anything been consolidated in the balance sheet look at the assets doesn’t seem – like it’s a net fixed assets, the operating assets has not changed.

So if you could confirm that that will come into 2017 balance sheet, first question> Second on organic growth in adhesives in particular. Could you comment to bit on the Q4 actually the evolution of organic growth quarter-by-quarter in 2016?

It seems to be pretty consistent over the year, but if you could comment on that? And also the comment on FX in Q4 being negative, and to be frank, I actually I have – for me to be down on Q4, as this last year.

So it’s between and I think it’s because of the UK exposure FX in Bostik, could you quantify with the exposure there in terms of percentage of sales and the impact on EBITDA that that’s for adhesives? And the second bunch of questions actually just one on acrylics, again 2017, you have to basically make €110 million improvement of EBITDA next year, would you help us bridge that just for the acrylics your region of the acrylics moving towards mid-cycle conditions in 2017 in terms of EBITDA contribution?

Thanks.

Okay. So, Patrick, Den Braven P&L generally was clear, nothing in 2016 balance sheet included.

Yes, it’s included, but it’s not allocated, which we believe that we have just booked the purchase price and the initial balance sheet, but it’s consolidated. What will change is the allocation of the purchase price and the consequence on goodwill and deferred tax that’s all with…

So property, plant and equipment, net already reflects the assets of Den Braven?

Yes, but not say evaluated as I see that value not share market value.

Yes.

Okay. The organic growth quarter-on-quarter was 6 and which consistent, it was your question of surprise.

Bostik is growing at GDP plus was rationale was the price area. Fixed rate just, it was negative on Bostik.

Bostik, it’s as a characteristics, it’s in many region of the world, many countries. And if you look at the list of countries and as you can do the exercise offset, you will see that in fact in the second part of they year, there have been many currencies, which has gone down, so not only UK, okay, and which has impact more Bostik than an Arkema.

So for Arkema, it was very limited. For Bostik, you have the few millions of impact, which is not small for Bostik but it can go in as a direction.

And – but it’s not a characteristic as the world is going is volatile for sometime, you can have some effect.

Okay. Is this about a 15% of sales in the UK for Bostik, is that correct?

No, it’s not – where did you get that?

Well, if you say 4% for Arkema total?

Probably better, but it’s a big more on Arkema that it’s not double-digit, for example.

Okay.

On acrylics, no, I’m not going. I think we have plenty of projects, plenty of business lines.

We have already a commitment, which is a strong one on beginning of the year to give you the figure for – the figure in terms of EBITDA for the company. I’m not going to speak it or Den Braven, acrylics, fluorogas, I think, we have enough element to get your own feeling, okay.

But I’m not going to commit to a bridge of 2017 project by project, or area by area, I think will give enough, I think far more than many that’s enough, okay. But I’m sure those will be just well you have your own idea, so take your idea.

Just wanted to check.

Yes, sure, I know.

Thierry, Thierry, and Sophie, thank you very much.

Hi, Tom.

A couple of questions if I may. In terms of your strategic ambitions in the kind of Bostik adhesives business, can we expect you to continue kind of overall op strategies, is that what Den Braven is part of the – what will be a rolling M&A of continuing bolt-ons?

And how should we think about the scope, scale and timing of that strategy, if that is the case? And talk about mobilization of the M&A in the second-half of 2017, I wonder what gives you conviction in that outcome having quote normalization before?

And just lastly, you mentioned the 2Q 2017 impacts of some of the outages are coming through. Are we talking low double-digit euro and many impacts on EBITDA from that?

Thank you.

Yes, okay. So with regard to as it is too much – so strategic ambition to grow through bolt-on acquisition, the answer is yes.

For the time being, we have Den Braven to digest, so it’s our top priority. So we have nothing under the road of clean in the coming month.

So it is very difficult to tell you at which the speed is. What is clear is that, part of our 2020 target for adhesives, you have other bolt-on acquisition, okay?

Now, the speed will depend on two things The quality of the opportunities, we don’t want to overpay. We want to have synergies.

And also is that Bostik step by step deliver what we expect from them, okay? They have delivered the first two years.

So I believe that they were mature enough to get the Den Braven deal okay? Now, as Den Braven, they have to deliver – continue to ramp up on Bostik plus delivering Den Braven plus delivering the synergy Den Braven Bostik.

So we have a long list. So to make the story short, long-term you’re right.

The short-term priority Den Braven at which speed in pace in between, it’s too early to say. Maybe as a capital market day we’ll see more on that.

But again, we can make acquisition. It’s on top of our base strategy.

We don’t do that for the sake of doing acquisition. We make them, because we have good opportunities and we’re never in a hurry.

With regard to – and clearly that piece is just for you. Our objective for 2017 is outside of any closer or acquisition, I think, for everyone.

Sure.

On PMMA, as you know, there are some capacities, so it is a tight market and clearly, MMA, it’s more MMA, which is tight in PMMA. It’s a very tight market.

It has been in favorable condition for many years. Overall our responsibility to give you some sensitivity – sensitivities on point of attention, or some positive, some more negative, sometime it does not feel right.

But so clearly for PMMA, we think that there are some new capacities coming on stream in the second part of next year in the Middle East that could capital – to take this market, which is very tight to something more normalize. So we don’t – it will stay good, but not as strong as it has been in the past year.

So it’s really an element of attention that is factored in our guidance. So in the same way acrylics is doing the average on this.

So I think all in all, we’re confident of, at least a stability on this two combined businesses, which represent cyclical business of Arkema together with fluorogas, but fluorogas will increase all, okay?

Okay.

On the other two outages, it’s difficult to give you order of magnitude, because as you know, we do a lot to try to move that on to different quarters. But there will be some element, it’s too early to suggest, in fact, let me say, because sometimes you can have some quarter, where our analysts put some aggressive number in your choice between Q1, Q2, Q3, Q4 take that into account for your Q2, okay, that number.

It should not be easier when you look at the year-on-year growth, the quarter on which all of you are the most aggressive that, in fact, this is our message, that’s all.

Okay. Thank you very much.

Mr. here.

Good afternoon, Thierry, Thierry, Sophie and François. Two questions, if I can.

First one, on Industrial Specialties, it looks like the write-off of over €40 million. Can you talk about, which project the write-off was related to.

Is that Thiochemicals? Is that 1234yf?

So that’s the first question. The second one is on capstone PKK another two in process of doubling the capacity in Europe and with the announcement in the U.S.

Can you talk about what’s driving those announcements? Is that projects where you’ve got visibility of just in orders and just willingness to go for PKK, or is that more speculative?

Thank you.

[Indiscernible]

Is it – are we talking speculative CapEx, or is it CapEx where you’ve got visibility on customer orders, given the – that PKK is a fairly new polymer?

Okay. Thank you, Laurent.

Thierry will certainly answer the first question, but I can take before the question on the PKK. Clearly, what we have seen on the PKK where we have already one plant in Philadelphia developing step by step.

And where we put a plant in the U.S. for 2018 is that we have a lot of demand.

So, it’s not the matter of some order, but it’s clear that based on all the attention especially in GR energy sector, but not only also 3D printing, I think it would be tied very soon. Okay, so it is not speculative at all, usually based on the market analysis, which is very seen and our feeling is that we will be stretched for many years under this PKK, I think it’s very promising product it’s a unique technology we have a unique application or we already seen is that everything has to ramp up at the same time and the main constraint today is not the demand it’s really the – our ability to supply.

Okay, [indiscernible] as writers are concerned in fact what we’ve done at the end of the year is thorough review of our products and we decided to depreciate some of them, it was in fact related to intangible assets and it was not tangible assets. And it was related to projects which were under study and not announced.

So, nothing that you should be aware or concerned about.

Okay. Thank you.

Yes just thank you for taking two follow on question again on Laurent question on PKK. Could you help us out in terms of applications end use that you’re targeting, because I’m confused because I think all the medical, the healthcare of Medtech, I think was taken by the inventor of the reporter.

So if you can clarify which applications you were targeting on those products family of products that’s one. And the second again go back to acrylics side, are you taking out 90 kilo tones at least for the full-year next year.

And Dow took about 100 also kilo tones less in North America. And are you seeing a bit tighter conditions already in the U.S.

going to 2017 in particular with these 200 kilo tones being taken out. Thanks.

Okay. So with regard to PKK the application as I mention to Loho Aeronautics composites in générale and is additive manufacturing and 3D printing, okay it’s clear that it is and the end of the range it’s really end of the range product.

But with the development of composites in certain applications, which could be ranging from Aeronautics which is yes to lot to achieve better Aeronautics and down to electronic, consumer electronics et cetera, I think there’s a really big potential for the coming, from the coming years. And we have a very specific strategy high-quality, okay we’re not putting so much quantities in the market.

So we’re refocused on the high end of the range for this unique product. And we’re not in medical to confirm your question and we don’t want.

With regard to acrylics, no it’s clear that we believe that the market is getting tighter for different reason because some issues is going beyond U.S. because some plants are getting older because we need to reinvest.

So you need to shutdown for end of light reactors you have environmental constraints in China. And all in all, yeah the market is getting tighter as we saw it and we told you many times.

And we have always been confident about some recovery, question was more, but when and what and it’s clear that what you are talking about with regard to the U.S. will make the market tighter for Arkema’s [indiscernible] but two years between I think as noted between the start of the new reactor and between the shutdown, but as we mentioned in our global framework.

We have enough capacity to serve very well of our American customer so that is clear that the market is getting tighter, because it’s a market which has – which need to be we see the ongoing – and to do that we will certainly profitable, okay.

Thank you.

Hi, good afternoon just a quick question, I was wondering if you could update us on the core case with the bond and where we stand with our demand on fluorogases?

No have, no I have no comment on that you mean under 1234yf.?

Yes, that’s right.

As you know it’s on the legal constraints, so it is something that never had – I have never commented I think there are many different path with routes, this is regarding to that we have access with the market it’s long-term and but beyond that there is nothing more to comment.

Okay. Thank you.

Okay. Now I think again, I would like to thank everyone for your question and as you know we’ll be ready to pull up with you and there will be further question in the coming days and week so don’t hesitate to contact our Investor Relation team.

And we will certainly see you at different occasions. So thank you for your attention and see you soon.

Bye, bye.