Materis Wendel Investor Day O. Legrain December 6, 2012
MATERIS is A Group with strong shared values An industrial Group comprising 4 divisions, managed with large autonomy but federated around a vivid entrepreneurial spirit An unwavering commitment to the safety of personnel in our facilities A balanced combination, over the past twelve years, of : Organic growth (Kerneos, ParexGroup and Chryso) Selected bolt-on acquisitions (Materis Paints, Parex Group) With a successful focus on emerging markets A proven resilience throughout the crisis years thanks to its large spectrum business portfolio and its extending geographic footprint A world leader in specialty chemicals for the construction industry A best in class profitability among industry leaders 2
A leading provider of specialty materials In 2011, Materis reported sales of 2.03bn and EBITDA of 259m, i.e.12.8% EBITDA margin End of September 2012, Materis reported sales of 1.58bn (+2.5%) and a robust EBITDA of 211m Materis enjoys leading positions in each market With close to 100 production sites worldwide And 9.500 employees 2011 Sales by division 2011 EBITDA by division Chryso Chryso Kerneos 11% 18% 41% Materis Paints Kerneos 27% 13% 26% Materis Paints 30% 34% ParexGroup ParexGroup 3
Main milestones of Materis 2001: MATERIS creation Lafarge splits the Specialty Materials division which becomes MATERIS with 5 activities : admixtures, mortars, paints, aluminates, refractories. Acquisition by 3 private equity sponsors : CVC Capital Partner, Advent International and Carlyle Lafarge remains shareholder with a 33.36 % stake End of 2003: change in shareholders LBO France becomes the new majority shareholder Lafarge retains a 7% stake in MATERIS January 2005 MATERIS sells its refractory activities to Imerys Group, world leader in Industrial Minerals Calderys (Lafarge Refractories + Plibrico) thus becoming the world leader in monolithic refractory products April 2006: change in shareholders WENDEL becomes the new shareholder of MATERIS. Lafarge withdraws from MATERIS June 2009 Successful debt restructuring May 2012 MATERIS closed successfully debt negotiation, postponing main debt repayments until end 2015-2016 and obtaining more flexibility in debt management 4
Robust financial track-record through the cycles A continued growth story to reach 2 Bn in 2011 An exceptional control of EBITDA erosion at 15% from peak to trough (2007 2009) A high cash conversion rate** throughout the cycle Operating cash flow* above 140 M even at the bottom of the cycle 2 000 1 500 Sales ( M) EBITDA ( M) 1 114 1 165 1 159 1 191 1 308 219 1 473 231 1 622 257 1 816 283 1 867 272 1 703 240 1 854 250 2 027 259 300 250 200 1 000 696 769 787 896 168 169 175 188 150 500 122 100 95 95 70 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 5 *Operating Cash flow: EBITDA - Capex - change in WC - One-off items - Disposals **Cash conversion rate: Operating cash flow / EBITDA 50
A transforming shift to higher growth emerging markets A global company with multi-local operations in 24 countries in Europe, the Americas and Asia Federating more than 100 brands recognized on their respective national markets An increasing presence in emerging markets from 15% in 2006 to reach 28% of sales in 2011 2006 sales split by country 2011 sales split by country North America markets Rest of Europe 10% 15% Rest of World 29% 3% 43% France markets CAGR: +9% markets North America Rest of Europe 28% 5% Rest of World 3% 22% 42% France 6
A profitable growth path in emerging markets Between 2006 and 2011, EBITDA generated in emerging countries increased by a 4x factor : South America Africa Middle East China South East Asia 2006 EBITDA split by area 2011 EBITDA split by area 8% 30% 92% 70% Mature Mature 7
Strategy: building on operational strengths and market positions while preparing the future Pursue profitable growth in emerging countries and support expansion initiatives: In India & Middle East / Africa for Chryso In China, South East Asia and South America for Parex In China and India for Kerneos Consolidate positions and leadership in mature countries, when 2013 market conditions will continue to be difficult Develop new top line initiatives while continue cost rightsizing in the Paint division Imagine the future of each division in the coming 2 to 5 years 8
Materis organization Wendel Board Members Management Olivier Legrain CEO Bernard Gautier Support Georges Nordmann Finances Jean Curis Strategy Arnaud Lay Legal Stéphane Bacquaert Patrick Bendahan Business Thierry Bernard Chryso Jean-Marc Bianchi Kerneos Richard Seguin ParexGroup Bertrand Dumazy MaterisPaints Divisions Jean-Michel Ropert Eric Bergé ParexGroup France 9