Arkema S.A.

Hello, everyone. Welcome to our results conference call.

With me today, Marie-José Donsion, our CFO and the Investor Relation team. So to support this conference call we have posted on our website a set of slides which detail our first quarter performance and revised outlook.

And as always, we'll answer your question at the end of the call. So, let me comment first on the highlights of the first quarter before letting Marie-José go through the financials in more detail.

These first months of the year were important since we clearly stated during the webcast for full year 2020 results, and following the roadmap announced at last year's Capital Market Day, that Arkema was entering a new era of development. We said that we were very well positioned to deliver strong growth this year and beyond, supported by the exponential need for high performance materials and the increasing shift towards sustainability.

And we also side that we would make another significant step in our journey to become soon a pure specialty materials player. We delivered on that promise in the first quarter and we are also confident on the outlook.

As you could see, we had a strong start in the year. The economic environment improved over the past few months which firmly benefited from our pipeline of new businesses in this market driven by global mega trends.

And we just closed two months ahead of schedule the PMMA disposal to [indiscernible]. I would like to take this occasion to congratulate the teams for executing this transaction smoothly, efficiently and then wish, of course, all the best to the PMMA team for this new adventure.

Of course, not everything is perfect; the public health situation remains as you know, a concern with the appearance of new variants as a particularly difficult situation in some countries like India and Brazil. We can therefore expect that the current volatility of the environment and limited visibility would persist for a while.

Nevertheless as we were when we talked two months ago, we remain quite positive overall on the outlook taking into account the acceleration of vaccination campaigns and the stimulus packages introduced by several large countries to boost the economy. Now more specifically on the quarter, I would like to underline the following key points.

First, Q1 results were very strong, ahead of our expectations. Volumes were up nearly 8% driven by fully [indiscernible] growth, some restocking by customers, but more importantly, acceleration of new opportunities from cutting-edge innovation in global sustainable trends such as batteries, lightweighting, electronics, 3D printing, and obviously trying to give you a few examples.

Growth in Asia was particularly strong, while Europe rebounded well, but volumes in the U.S. we have temporarily impacted by raw material shortages following the Uri storm.

Arkema's EBITDA rose by 20% to €358 million in spite of a negative currency impact of around €15 million, and the EBITDA margin improved by 170 basis points to 16.1%. We're very pleased with the fact that each of our three specialty materials segments: adhesives, coating, advanced material showed a strong progression year-on-year allowing specialties EBITDA to grow by 20%.

Intermediates EBITDA grew by 11% but at constant scope because you know we divested Functional Polyolefins last year, the growth reached nearly 20% matching in fact specialties performance. We had during the March roadshows a few question on Bostik's ability to increase margins and navigate an inflationary environment.

You have, I believe the answer is, Bostik's results were excellent with EBITDA of 25% and EBITDA margin at 15.5%, fully on-track to reach the full year EBITDA margin target of 14%. On the more qualitative front, beyond the finalization of the PMMA divestment; I would like to emphasize a few points which illustrate the way we are executing our strategy towards specialty materials.

First, Bostik acquired Poliplas to reinforce our positioning in the fast growing Brazilian market, and we expect to announce more but this year and not only in a adhesives. Of two large industrial project our bio-factory for advanced materials in Singapore and the environment-friendly project with Nutrien [ph] in the U.S.

are progressing smoothly. We have accelerated our initiative in the very attractive market for batteries for clean mobility with several investment in our Kynar Fluoropolymer in China.

In addition, we are currently assessing certain investments for electronics and 3D printing also in Asia. Finally, I wanted to -- I like our inclusion in the CAC 40 ESG Index announced towards the end of March, which regroup the 40 largest companies listed in Paris with the best ESG practice.

This rewards once again all the efforts that Arkema has made in this field over the past years. I will now comment on the outlook but at the end of the call.

So, I will now hand it Marie-José and come back to you.

Thank you, Thierry. I'll start with the sales bridge that you have on the page 6 of the document.

So at €2.2 billion our sales are up 12.7% in organic terms, volume growth of 7.7% was the main driver as detailed by Thierry, together with the price effect of 5% on sales compared to the Q1 2020. This reflects good market trends in construction and consumer markets, as well as from a regional perspective, a strong economic recovery in Asia and improved European demand relative to last year.

Please take note of the adverse [indiscernible] Forex effect this quarter, they adjust respectively to the disposal of the Functional Polyolefins in June last year, only partly offset by the integration of Fixatti and Ideal Works [ph] in the adhesive segment. And to a stronger €o versus dollar, you know, €o is at 1.20 in Q1 2021 versus 1.10 in first quarter 2020.

Volumes were a key driver behind the 20% growth in Q1 EBITDA to €358 million. Net pricing impact on EBITDA was neutral to positive across our various businesses, reflecting higher selling prices to pass on raw material cost inflation, and as well reflecting an increased pension on the asset demand balance.

Looking at the different segments; Bostik achieved a record EBITDA margin at 15.5%, thanks to good volume growth in construction and DIY and continued improvement in industrial markets. This was coupled with our operational excellence initiatives, the integration of acquisitions and the repositioning of our product range towards higher value-added applications.

The strong volume growth this quarter also generated an exceptional level of operating leverage on fixed costs. Advanced Material EBITDA grew16% with an EBITDA margin above 20%, high performance polymers grew very strongly, thanks to their positioning leveraging global mega trends and in part thanks to some customer restocking in certain markets like transportation.

Performance Additives we're held back by the decline in the oil and gas market, and a high comparison base in nutrition and healthcare applications linked to COVID last year. EBITDA in Coating Solutions grew 20% year-on-year with an EBITDA margin of 13.8% driven by higher volumes across all major markets including decorative paints and 3D printing, as well as the higher prices.

Please note that this segment experienced some shortages in upstream acrylics in a high propylene price environment, a phenomenon that should progressively normalize as the year progresses. Finally, Intermediates EBITDA grew 11% thanks to much improved market conditions in acrylics in Asia, while the market environment in PMMA and fluorogas was less dynamic.

Depreciation and amortization €155 million brings us to a recurring EBIT of €223 million, which is up nearly 40% year-on-year and REBIT margins to the 10%, up from the 7.7% in quarter one last year. Non-recurring items represent €24 million and include PPM optimization one-off charges and recurring restructuring expenses.

Financial result stands at minus €13 million benefiting from the refinancing of our bonds at lower rates and from the lower interest rate on the debt swapped into U.S. dollars.

At €43 million, the tax charge reflects improving profitability. We confirm the full year tax rate of 22% of recurring EBIT, which of course excludes the exceptional tax impact linked to the PMMA transaction.

And consequently, the Q1 adjusted net income increased strongly, up 59% to a €159 million, which corresponds to almost €2.1 per share. Moving on to cash flow and net debt.

Q1 free cash flow amounts to minus €16 million; this includes first the increased cash generated from our operations. Second, the working capital rebuilt in a context of higher volumes and higher raw material prices.

And third, the progress of our exceptional CapEx. So coming back to the working capital, the ratio on annualized sales stands at a very good level of 12.7% versus the 16.5% last year.

Given the positive volumes outlook and associated working capital rebuild, we don't necessarily expect this level to be sustainable for the rest of the year. As I remind you, our normative level is more around 14% in terms of working capital ratio on sales.

The capital expenditure amounted to €125 million in the quarter versus just €92 million in Q1 2020, reflecting higher exceptional CapEx of €53 million. As a result of the progress that we are making in the construction of the polyamide 11 plant in Singapore and the Nutrien project in the U.S.

Total recurring and exceptional capital expenditure is still expected to amount to around €750 million this year. Net debt at the end of March 2021 amounts at €2 billion including the €700 million of hybrid bonds.

The net debt to EBITDA ratio stands at 1.6 times, which means that our balance sheet remains extremely solid. As previously announced, we confirm our intention to implement the €300 million share buyback program as we have now closed the PMMA transaction.

I thank you for your attention and we'll now hand it over to Thierry for the outlook.

Thank you, Marie-José. So as we said at the beginning, we remain attentive to the evolution of the public health situation, but we assume in our guidance that there would not be a significant worsening of the pandemic.

The improved business dynamics that we saw in Q1 is continuing supported by robust demand in construction-related markets and positive trends in most of the industrial markets that we serve. Our specialty material will continue to benefit from a strong new business and capitalize on growth opportunities linked to sustainability.

Concerning raw material, cost inflation should accelerate in the second quarter but we'll continue our initiatives to increase prices to offset the impact. So based on the strong start to the year and our confidence on our unique portfolio positioning, we decided to wait for the full year 2021 our guidance for specialty materials which constitutes literally all of our scope.

We now expect specialty materials EBITDA to increase by around 20% year-on-year in 2021 at constant scope and currency versus plus 10% announced previously. As expected the fixed EBITDA target is confirmed at 14% this year.

In intermediates, we should be able to deliver EBITDA at least at last year's level. At constant scope and currency, and you can see in the press release we give you the number for PMMA for this year and last year.

Be aware that this is no longer a key aspect intermediate as excluding PMMA intermediates should represent less than 10% of the group's total EBITDA. Of course, execution of the strategy will continue; you know us, we work short-term mid-term, long-term at the same time; so it will continue on four main levels.

Firstly, the acceleration of innovation and new developments supported by mega trend -- by global mega trends. The strategic review in fluorogases, continued virtual acquisition and progress on corporate social responsibility.

I thank you very much for your attention in this introduction summary of the highlights of the quarter. And together with management today, we are now ready to answer the questions you may have.

Good morning. I have three questions.

Number one, what is your order book telling you about the demand at the beginning of Q2, is the demand as high as in Q1 or do you see the restocking you have enjoyed from your customers fading? Second question, is on the Texas freeze; can you quantify the effect -- the earnings effect on your business?

And thirdly, you mentioned that the net effect between selling prices and raw materials was neutral or slightly positive in Q1. What is your expectation of the raw material price inflation in the course of this year?

And do you think you will be able to fully pass on increasing raw material costs on customers without any time lag? Thanks.

Thank you, Martin for these questions. Overall, I would say the order book and macroeconomic context start to answer [ph] broadly is in continuity of the Q1.

You're right to say that restocking will be less in Q1, will certainly completely disappear in the course of the quarter but at the same time it would impacted in the U.S. As we mentioned in -- and as you mentioned you have second question, in the Q1 by Uri, okay.

So less restocking, certainly, but no impact of Uri. And then you have got sort of the seasonality, which will help Q2 versus Q1 but overall like-for-like here macroenvironment is really comparable, we don't see any change.

We are lucky to have -- we have no, in fact market, which have been structurally impacted by the [indiscernible] now which is good, we are not -- nearly not in aeronautics, our presence in oil and gas is quite limited, and for the rest we continue to enjoy solid and robust growth. We don't quantify impact on earnings of Texas freeze otherwise we would have put it in the press release but it's clear that we have integrated in the EBITDA of the first quarter the impact of this freeze which is very difficult to quantify because you have directed much of indirect element.

And clearly, we will not have this impact anymore for the large majority of it in Q2. So, it's certainly positive on Q2 but as I mentioned, not this restocking effect we had in Q1.

So we are home, we are confident in Q2 to be in the continuity of Q1. With regard to the pricing which as you know, it's a challenge, but it goes with the demand.

It means that because we have enough stock crisis, demand really going up to put pressure on the raw material, it tends with a quick evolution of Arkema. I would say we -- Q2 should be another quarter of increased raw material you.

So, this means inflation of raw materials will continue to develop into Q2, especially with a time lag when you look at because of the stock and the P&L impact. But we are also confident of the other side in parallel to see our pricing sequentially continuing to develop.

And because of that we are confident to achieve for the globally and for the company, at least neutral impact of pricing versus raw material in the Q2 and beyond.

Thank you.

Good morning Marie-José, good morning, Thierry. Several questions from me, please.

First, which industrial markets have not yet recovered for Arkema? Second, don't you see any improvement in fluorogas except from the basis of comparison?

You seem to remain is appointed by Asia and Europe regarding that business, what about US or so [ph]? Third, do you confirm you will launch the 300 million shares buyback program in the coming weeks, following the divestment of the PMMA business last Monday?

And my last question, do you remain confident to achieve your ambitious program of acquisitions, how is the pipeline of opportunities at this time?

Okay, thank you, Emmanuel. Maybe Marie-José, you want to take the share buybacks in it will be clear for everybody.

Okay. So as I mentioned during my introductory speech, we confirmed we will implement this share buyback program.

As you know, we still have a shareholder meeting happening later in the month to allow us to increase, in fact, limit at which we can buy the share. You remember last year the limit was set at the €100 and we are fortunate to have exceeded this limit.

So we need a new vote to, in fact, lift this limit up, so that we can actually implement and execute the program.

Thank you, Marie-José, very clear. So quickly, on the other question, I would say that nearly all industrial markets which we serve significantly, you can always find in this fragmented world market, which would be very small for Arkema.

But I would say for the one which count [ph], I would say either it has recovered or it's recovering, rebounding materially. So I would say for us, the landscape is rather good these days.

So there are some nuances, but I think we have a good a good mix of business, which has been also an advantage. In fact, we have the same as mentioned last year from this year.

Last year because we had a good positioning on our end markets and good diversity of end markets, we lost only 4% in volume, which in the COVID time was quite a good achievement, but this year, we benefit because we believe we are very uniquely positioned, we benefit from a recovery on nearly all our end market. With regard to fluorogas, I think, as we told you, seeing no intermediate which is what -- our colleagues in Asia in fluorogas will represent less than 10% of the EBITDA of the company.

So it will not be the story there, and we don't want to create any speculation there. So this is why we say, you have not to worry about it, we would be at least at the level of last year.

Now specifically on fluorogas, we are not disappointed because we are where we thought we would be, maybe a little bit better in the U.S., but Europe and Asia stay at low cycle; certainly a slight mid-term there, but today is low cycle and fluorogas in the U.S. a little bit benefiting from this anti-dumping legislation in the U.S.

which has been in -- being in place, but I would say not digitally there. And the good thing which we always use is that we have a certain level of stability, which we certainly appreciate, while at the same time for the rest of intermediates, Acrylics Asia are in good shape.

With regard to -- what was your last, I cannot even read myself so…

Acquisition pipeline.

My writing is terrible. Yes, acquisition pipeline.

We maintain what we say, I think it will be in the four years, the combinations and one of two measures, but I would say the most of it will be a sum of bolt-on which is not only for Adhesives, this is a priority. But we look at Advanced Material and Coatings and we have some good ideas and a good pipeline.

So, as you know, we try to make things which create value. This is why we sometimes take our time, but I think we have a quite a decent pipeline.

So, we are on track with good sorts on bolt-on acquisition.

Hey, good morning everyone. A few questions, please.

I got a short-term one just on thiochemicals, I think CJ is planning a six-week maintenance shutdown through the course of June, July. Can you just remind me from Arkema's perspective, do we see your own sales fall over that period?

Does the contract structure help just move that out? The second question is just around PVPF, while I know you've been making a series of capacity expansions, but we heard Solvay talked yesterday about 80% demand growth.

So I guess the question is, are you actually investing enough to satisfy that demand over the coming years? And how big a business do you think this could be in, say, three or five years' time?

And if I can squeeze in just a third one, just around the Adhesives. I know you've reiterated the 14% margin guide for the year.

But, I mean, just on over 15, I wanted to ask if that increases your confidence in the 16% target for 2024, or is really Q1 just what I would call a freakish quarter that we shouldn't extrapolate too much from? Thank you.

Okay, Matthew, and hello. With regard to thiochemicals, we don't tell you specifically all our maintenance shutdown and all shut down of big customer otherwise we would spend hours discussing that and there is no point there.

So when CG [ph] is getting maintained, we have less sales this month of this quarter or whatever, but it happens for CG [ph] every year and you have plenty of customers stopping from time to time. So at the end for Arkema, I would say, that not make a bigger specific element and it's is fully factored in our confidence on the year and the quarter.

So for us is not -- but, yes, clearly, if CG [ph] shut down, the contract is not protecting you, we'll sell less, but on the year at the end, we sell good volumes, it's is not an issue for us on the specific issue on the year. On the PVDF, you have seen that we have accelerated our investment and so, we are pleased to see the demand growth and there may be more to come, but I think, yes, the idea is to be able to supply the core demand.

So for us it's one, it's not the one by far and we have many elements of growth inside the company. This is what I say from the start, our positioning is becoming more and more unique, it's fully -- you start really to see it, it's incredible how many of opportunities we have in terms of new business development but with one and with what we put in PVDF by sense, it will be tight because there is a big appetite for battery.

But I think we have the project and the money to be able to follow, and this is why you -- I'm sure you were consulted by what we have announced in the first quarter, but I would not be surprised to see other investment coming through. With the 14% and the 16%, yes, clearly when you see the Adhesives, because we had question, as I mentioned in my introduction, we had the question in the annual call in March about maybe stretch for this year in this inflationary and right month to deliver 14%, and we should know, we are a well-confident and because even if we don't pass through all raw material at the end with a combination of organic growth, operational excellence, synergy from acquisition, etcetera, we are confident to deliver 14%.

So what the first quarter is showing is that we are on track and so, clearly, there is a little bit of support of the strong growth. So but we benefit of it like our competitors, but I think the year we continue to develop a certainly 15% is of the peak, which we supported by the excellent sales, so it will not stay like that the full year.

And there is also a little bit of seasonality at the end of the year and in August. So we take all this into account to confirm our 14%, but clearly it shows to you that the work that we are doing in Adhesives is really going in the right direction and this 15% plus is certainly a good signal to tell us that 16% is in the 2024 is completely achievable.

So yes, it make us even more confident, but we are already confident.

Yes, thank you very much. My question is actually related to what has been discussed already on HPP.

Sales were up 15% versus Q1 2019. I was wondering if you could talk about your utilization rates and if you had any more headroom to produce more measures in PVDF, but also on the codi [ph] side, are you at full capacity?

And then, the related question, recently you concerned that you are on track or do see Singapore's concept plan in H1 next year? I was wondering what prompted that release, is it that you are in the process of locking in some customers and should we expect positive contribution, positive EBITDA contribution in 2022 then?

I'm assuming that there might be start-up cost that term. Thanks for any color you may give.

So clearly, because the demand is good in certain plants, we have reached our limit, but in PVDF, we are implementing new reactor. So there is some room for maneuver even if it is the -- we have increased, as you could see, not in the monomer, but on the polymer and polyamide in China, with polyamide 12, for example.

So it will help to grow. So, we work a lot on the mix as we did in the past.

So it takes the average price, but it's clear that, to be honest, in terms of pure organic growth beyond what we are doing today, which is quite good as you could see this year. But if you compare to 2019, which was already a good reference point, organic growth possibility are little bit limited in HPP by capacity, but we have growth.

We'll get organic growth this year which would be material. After that, on polyamide, if we start Singapore in mid-2022, which is the goal, and so far, we are really on track, then we should have positive contribution already in the second semester of 2022 of Singapore, despite the start-up costs.

I think this is a very exciting, to tell you the truth, both fluoropolymer and of polyamide. I've never seen myself and, as you know, I've been with the company for all some years and I've seen such a promising pipeline of new business development, because of this global megatrends.

I think there is a sort of acceleration of high performance innovative sustainable polymers. And we are really well-positioned with our polymers, and it's true also for some polymers that you are not -- you are less warehouse, for example, the PBax [ph] which is an estimate we sell in spot chosen [ph].

I mean, the appetite for innovation from our customer have never been as large. So yes, 2022 some limitation in capacity, which will limit our organic growth, but it doesn't mean that we will not grow as you could see this quarter.

And also, it will help on the mix and the pricing, but starting in mid-2022 both in PVDF and in polyamide but you also saw polyamide 11, will get new capacities and the pipeline will be quite good. Now, if your question is that do we secure long-term contract with the customer, we do it from time to time, but it's minority of business development.

So, it's not the way the industry works, for the specialty product you have new opportunities all the time. This means that you need to be confident in your ability to find these new opportunities every quarter, but we are confident we have the right opportunity, the right talent.

So, we are ready, there is a clear difference between where we are today and where we were two, three, four years ago.

Thanks and congrats first on inclusion in the ESG Index. First question is really around your project with Nutrien.

So assuming that this sort of goes through successfully, and you significantly improve your environmental footprint, will this be a project which will stay with you, or is this something that's going to be part of the emissive part of fluorogases in your discussions to -- whichever way you want to exit the emissive part of fluorogases? And if you can just talk about what this actually means for PVDF, as well from a food chain environmental point of view, in case it is staying with you?

That's my first question. The second question is around 1234yf.

I know you don't want to talk about fluorogases, but 2023 is when patents expire in the U.S., Europe and Japan for the two big boys. So what's your plan for 2021, 2022, 2023, 2024 [ph]?

And have you been -- sorry to use this word, cheekily [ph] producing a little bit in China, in preparation for entry in 2023, if possible? And then, the third question really is around molecular sieves.

You haven't discussed much in recent times about this, but xylene production is going up, paralyzed xylene production is going up a lot in Asia. So what's the pipeline for molecular sieves in 2021, 2022 and 2023?

Thanks a lot.

Okay. Thank you.

So, very specific question. Clearly, the large majority of HF supply for, what I call Specialty Chemical numbers, what goes into PVDF, what goes into gases which go into our partners which make themselves specialty polymers, and it goes also to our specialty chemicals that we will keep.

So I would say, again, most of the supply with the reserves, after that, it depends on the -- what if -- the company which will acquire majority or the full of fluorogases will lead our amount to check. So to a certain extent we'll be the seller of [indiscernible].

All scenarios are possible and as long as we have not defined a scenario, because as you know, we are just starting the reflection on the fluorogas disposal, it just -- that we take that into our action plan, it's too early to say. I think we are flexible, and what is more important is that we get remotely friendly and competitive supply.

Two of our specialty fluorochemical business that we keep, and this is what is most important. We are very proud of this project because economically, it makes sense, in terms of safety of supply, it makes sense, in terms of -- and raw material footprint is very, very good compared to the traditional mining instructions, so after that will be -- we do what is clever when we take into account that is good to have flexibility.

With regard to fluorogas [ph], so as to be clear, we don't sell because we are not authorized to sell. So we don't sell.

After that certainly, when the patent will have expired, we have a possibility to sell, but normally, at the time, we should not be far from disposing of having already disposed. I don't think it's a big element in our own business plan for what we keep inside Arkema, but is certainly an upside for owner of fluorogas business.

With regard to molecular sieves, there is consumption but there is a lot of capacities increased, I don't think that molecular sieves will make a big difference in the Arkema business front for 2024 and the coming years. We have -- and we mentioned them to you, we have plenty of element of new growth for Arkema.

I would not -- incrementally molecular sieves can contribute, but I would not say it's material elements.

Thanks a lot. And just, sorry to come back to the Nutrien project.

Would you say that at current floor of spot prices, the payback is less than four years for your investment?

You know, as we say, for all our organic project and it is one, development in gross project and this one is one, when you look at the EBITDA generated after ramp up, that's three, four, five years depending on the size of the project, you take the CapEx and you divide by 3.5 and 4 and it would be the case for Nutrien as same as for the others. So I think certainly, the price of its share currently, re-unfolds the quality of this project.

We do not do it only for economics, but -- and mostly for sustainability and safety of supply long term, but it's also good from an economical standpoint.

Hi, good morning. Just wanted to ask about Engineering Adhesives and your accelerating development there.

When you talk about Engineering Adhesives, are you referring to the very high margin, highly specified business, similar to what Henkel's kind of specialized in? And is there any sales in that business right now and what are your aspirations?

Okay. So you have two definitions of engineering adhesives in the market, in fact.

You have the one of Henkel, which is purely electronics mostly. And you have the one-off figure which is more what we call offset durable goods.

So durable goods is about -- for us about 20% of the fixed size, okay. While engineering adhesives purely with the definition of Henkel; so with the definition of 20%, and it's a high margin business, but not as high as what Henkel has in their definition of engineering adhesives.

And if we take the definition of Henkel, we have just started on this new line and we are very excited, but it will take time. Then, the sales are really minimal, there is rather small today.

So it depends on your definition, but if you take the one of Henkel, we have just started, as you know, we have made a second acquisition. This time, there are smaller acquisitions ready to reach 100; it's a matter of -- it will be a matter of 5 years.

So we need time but we knew that, it's an entrepreneurial project on some -- on business which is a quite monitored. But now if you extend the definition to the same as FIDE [ph], which is another good definition, in durable goods, we are including this Electronic Adhesives.

We are really growing at twice GDP and our EBITDA margin potential is above 20% EBITDA margin just on this durable goods. So it's quite exciting, very interesting.

We have some unique possibility. So really depends on your definition.

Hi there, good morning. On margins, can I just clarify a comment you made at the beginning when you said that you thought the balance of pricing and raw materials would be at least neutral?

Were you talking about the full year?

Full year, quarter, whatever you want. It's true for Q1, it would be true for Q2 and it will be true for the full year.

Okay. So that's my question.

So in Q2, you expect actually not to have any negative impact from your raw material?

Globally for the companies you can have pluses and minuses depending of the momentum of each business. On some business it takes more time, some others is more quicker, but overall, for the group, yes, will be pricing at least neutral if not positive.

Yes, we are confident on that.

Okay, that's fantastic. Thank you.

And the second part of the question, in the first quarter in Coating Solutions, can you tell us whether the balances unit margins in the monomer business had any impact on margins in the resin downstream, was that a net positive? So if I look at unit margin, were they higher or lower than the year before when you take the upstream and downstream into accounts?

Thank you.

So first of all, maybe to answer your question. So, Coating Solutions, as you could see, we had a good quite a good growth, EBITDA growth.

So, it could have been even better if we are not at the Uri because it's certainly one of the business which has been the most impacted by Uri in the U.S. So, we have the strong performance in the Europe and Asia, but more challenging in the U.S.

because of Uri. There is nothing to see with us, it's just the case for everybody.

So first of all, it could have been, in fact, even better even if it was already excellent. Now, in terms of net pricing, yes, it was for the whole Coating Solution, it was a net pricing positive.

And so, more neutral, it was positive. We benefited, so certainly, the downstream was under pressure, because this is the beauty of the integration.

So, we benefited from our integration but it was overall for the segment pricing positive, and on top of that, we had good volumes especially on the downstream. So we were happy about the performance of the Coating Solution.

And as you could imagine in Q2, it should be in good shape without the impact of Uri.

That's really helpful. Thank you, Thierry.

You're welcome.

Thanks for the opportunity to ask questions, three very minor ones. The share buyback program, you said that you need the extension of the end general meeting to get to the 300.

The 100, is that's something you would start immediately or will you wait until the AGM to start the program? And then, secondly on the acrylics in Asia, you have three lines there.

Are all of them running or is one shut? And because you -- I think you had not the full -- could not place everything in the market in recent years.

Just want to know where you are in this more tight market? And lastly on Advanced Materials, I do understand that the HPP is the main driver and it's really a strong driver of the business.

You have already talked about molecular sieves. The other part, also beyond HPP, and there also, let's say, a more kind of resilient stable business or do you expect them to contribute to the growth mid-term?

Thanks.

Okay. Maybe Marie-José, again on share buyback, if I may.

You want to answer?

Sure. Probably my first answer was actually not very clear.

So, I'll repeat my answer. So the program is €300 million.

So this value is not changing. Right now, the authorization I have from the shareholder meeting is I can only buy shares up to €100 of price.

Since the value of the share is higher than that, they actually cannot buy anything. So I need the Shareholder Meeting to increase the limit price by share.

So that, in fact, I can execute the €300 million share buyback plan.

Understood, thanks.

Thank you, Marie-José. It's very clear.

Acrylics in Asia, we run the three lines. Advanced Materials, you have two, let's say, two sub-segments.

One is HPP and the other one is performance additive, which I understand is more your question. Overall, so -- I will also follow the company, then it will be clear for everybody.

I would say the organic growth -- I don't talk about acquisition; In terms of organic growth for the company in the coming years, I would say because you cannot have everything growing at the same speed, it depends also on the momentum of the previous years. I would say it's mostly coming from Bostik from HPP, and from the downstream of coatings, which means that performance additives is more in cash flow generation model because we have grown so much in the previous that we came to a point where we will more manage the stability and the resilience, okay.

And this is more of the rest of the portfolios, this three components which are very big in the side of our portfolio, which will grow supported by mega trends. Clear?

Thank you. Yes.

Okay, thank you.

Hi, good morning and thank you. I just had two clarification questions.

First of all, could you just tell us what the FX impact was at the EBITDA level? I think I missed that in your commentary at the start.

And then secondly, when we look at the specialty materials guidance of 20% growth in EBITDA; if you're expecting the net price delta to be flat, is all of that coming from volume or what else is driving that?

Okay. Jeff, hello.

Marie-José you want to [indiscernible].

So what we say is that obviously we have a significant portion of our business which is conducted in U.S. dollar, so you should assume that any time the dollar to euro varies 10%, there is yearly effect on EBITDA in terms of conversion of €50 million in our accounts.

So here basically, clearly when you look at the dollar rate last year at 2020 and the rate of this year had 120 in average for the first quarter. What we are saying is, we have nearly €15 million EBITDA -- adverse EBITDA impact for the quarter.

My recommendation is that you need to assume the same for quarter two since in fact, the dollar started depreciating mid-year, last year; so I expect second half of the year to be comparable and the impact to be only in the first semester.

Thank you.

Thank you, Marie-José. So our specialty materials, clearly -- and I think I mentioned that in my in introduction.

We are entering with Arkema in narrow growth and the profitability is really sustained by growth. So does it mean that we don't do anything on the pricing mix and operational excellence?

But I would say the big difference will come from our organic growth while because of quite control and we want to at least to offset raw material with our whole pricing in our mix. So this is what will be the story for Arkema.

It's very important because it shows that the portfolio of Arkema has significantly evolved from the past and where we had a limited organic growth, now at this time it's over, we move forward. We have good pipeline of innovation supported by mega trends.

And the last year I think something, hopefully you could see it; let's say you had many company which cut cost including structurally. So we did, but not surely; we did it really traverse as a one-off cost, etcetera.

But we really continue to invest, it was also through in CapEx for the growth. And I said that it was very important to do that because again we would read -- as the world would rebound and this is what happening and Arkema is very well positioned.

And this is why in Q2 you will see again the benefit of this preparation we have done last year, be ready for the growth. So specialty materials, yes, it's a growth story, which is nice to us because this will drive the value of the company.

Okay, thank you.

You're welcome.

Yes. Hi, thanks.

Two quick ones. First, given the momentum you see at the moment which is, of course, strong in the Asian Acrylics business; should we expect any update anytime soon in terms of the strategy of better integration with downstream or is that still likely to take longer time?

That's first. And second question; I know there is no specific Q2 guidance but if I were to strip out the back from PMMA business, would you say Q2 should be at least similar to Q1 in terms of EBITDA or will it be higher, lower, just in terms of direction [ph]?

Thank you.

Okay. With regard to the Asian Acrylics, you know our strategies which we do not change.

We have two strategy to force to reinforce integration by organic growth, and this is what we do for example in 3D electronics. I mentioned that we have some thoughts for further downstream investment there but also in curtains [ph].

And on the other side, we still consider despite the fact that acrylics in Asia seems to be quite busy here this year. We still are thinking about reducing our extreme volumes; so to concentrate we see how much we need, but really on the big long-term customers and our downstream integration.

So we need to reinforce our downstream integration to continue to serve our global customers in each part of the world. But also to implement, but we are not in a hurry findings the right partner, implement this reduction of the upstream volume in Asia.

So there is value therefore for us, and clearly we have a very good site, very competitive. So we continue to do that.

With regard to the Q2, I will not guide for quarter by quarter, but basically when you say that in Q2 most of the contract is in continuity that we don't have Uri anymore, but on the other side restocking will more or less disappear. You have the effect of seasonality, we lose €20 million because of PMMA and because of the divestment in May.

All in all, yes, we should be at least, like the first quarter.

Thank you.

Okay. So I think it was long but very interesting.

I would like to thank you for spending the time with us. And it's always a pleasure and I fully -- Marie-José and myself, we are able to answer the question as you are expecting.

So, thank you. Have a good day.

Talk to you soon. Bye-bye.