Good morning, everyone. First of all, I, I would like to thank you, obviously, for coming to Paris. I and the Arkema team are very excited about today, as we will detail the next stage of our company's growth trajectory and have a closer look at some of the markets and application that will be driving our earnings over the coming years. My goal today, at least in this part of the presentation, is to help you understand why Arkema, more than many others, will be a key beneficiary in the chemical sector of the growth linked to megatrend. The world is changing fast, as you know, and with this change come both opportunity and challenges. The status quo is not an option.
The companies that will succeed are the ones that have anticipated these changes, and it is exactly where all the Arkema team have put all our energy and resources over the past years. Deeply transforming the company's positioning to build the right portfolio of technologies in order to address a market that will make a real difference to our growth profile. So today, as you can see, we have scheduled two hours in the morning to provide you with a global strategic update, including key figures and our most important priorities. Also, an overview of our capital allocation, which I know is key to you. You will be able to ask your question after the main presentation. You will have also the opportunity to talk more extensively than usual to the wider management team.
It will be a change from myself and Marie-José, so you will get a broader view. So I encourage you to interact with them. So you will get the lunch also during the day. You will get also the segment presentation, the deep dive, and you will get the showroom. So as I mentioned, we relocated the showroom from Colombes to here. So we believe that in chemical, as you know, it's very important to have a more hands-on experience of our product and their benefits to end users. It's really help our investor to better grasp what can be the potential of our technology. Hopefully, it will help you today. So we have split the presentation in three parts. The final part being, of course, the longest one.
So the first chapter, this is about what Arkema stands for, our vision since the beginning, and the objective behind our transformation. The second part is about our achievements, especially since the last Capital Markets Day, which happened, as you know, which was an important milestone and which happened, as you know, during the COVID. At that time, we set ambitious midterm target, and despite the highly volatile and challenging environment we have faced, in fact, since 2020, you have faced, we have faced, you will see that we are on track to deliver this target. And finally, and this is the most important part, we will explain to you how we see our future, where we want to go, and how we'll get there. So let's now look at what is Arkema today. So you can turn to slide four of the presentation.
Ever since the spin-off in 2006, our ambition, as you know, has really been to focus on developing more and more innovative, high-performance solutions to our customers and to become a specialty materials leader. In April 2020, with the creation of the three synergistic specialty material segment, we structured our strategy and our financial reporting to reflect this vision. This vision is shared by all our employees, and together with our strong corporate values, they really represent the DNA of the company. So our energy and our daily efforts are totally focused on delivering the high-performance material that our customer increasingly need. Since COVID, there has been a clear acceleration of disruptive megatrends.
Society is really aware of the need to preserve the world's natural resources, and you can see that governments are more and more pushing massively, investing massively in the switch towards low carbon and energy sources and green mobility. All these trends and changes will create significant opportunities, but also challenges for companies. The companies that are ready to seize opportunity will thrive, while those that are not well-positioned will not. From the beginning, our vision has been driven by a simple statement: There is an exponential growth in demand from society and from our customers for new, high-performance material. As we witness the acceleration of disruptive megatrend and on the back of the company's transformation, we unveiled, at the end of 2021, a new positioning with a new visual identity and signature Innovative Materials for a Sustainable World.
This communication territory reflects our driving principle of designing material to help our customers manufacture products for a more sustainable world... Along our journey, we have developed leadership position, either internally or through acquisition on three key materials capabilities. Those are how to bond materials, how to create materials or replace traditional ones by more sustainable alternatives, how to coat and protect materials. These capabilities are very complementary, and they were built on a deep expertise of material science, including polymerization, formulation, and application know-how, enabling us to develop light, recyclable, highly technical, innovative solution for our customers in demanding industries. Back in 2020, we logically structure these three capabilities into three segments. These segments are coherent, and they are now the pillars of our organization. They are Advanced Materials, Adhesive Solutions, and Coating Solutions.
This combination is unique in the chemical industry, and over the past year, and we confirm today, it has shown its potentials in terms of synergies on the commercial side, in innovation and operation. This is what we call the One Arkema concept, and we firmly believe this organization will increasingly create new opportunities and a competitive advantage. Thanks to the wide array of solutions and applications we offer, we serve, as you know, a diversified range of attractive end market, which is really a strength for Arkema, bringing more resilience over the cycle. Our geographic exposure is now well-balanced between the three key regions, which has been a clear strategic goal since 2006. I will not comment in detail the following slide, which speaks for itself and whose main purpose is to provide you with a short profile of Arkema.
Keep in mind, above all, that we have a truly global footprint with strong assets in R&D, supporting our innovation and in manufacturing to serve our customer from each region. We serve from the region to the region. This is critical, given, as you know, the evolution of the geopolitical landscape. Transforming a company can be done by many management teams. What we are particularly proud of is to have carried out a profound transformation in a challenging environment over a long period of time by significantly improving the portfolio, the financial results, as well as the extra financial performance, maintaining a strong balance sheet, and last but not least, keeping fully mobilized and committed teams. Indeed, a key strength of Arkema is definitely the hard work and engagement of our 21,000 employees around the world.
Without them, we could have never achieved them, what we have achieved since 2006. I am absolutely convinced that what makes us special is the attachment and the loyalty of our employees. There is clearly an Arkema shared mindset, which in a more and more volatile and challenging world, is one of the pillar of our success. So our duty is certainly to develop this human capital by investing more and more in diversity, in modernizing the way we work, and in improving the quality of life at work. Of course, we are not perfect, but we are sincerely aiming to be an example for all stakeholders. To adapt to this new world, our journey has been disruptive.
By nature, this journey will never end, but I am pleased to say that we have made significant progress, being now nearly 100% specialty materials company already, and having rebalanced Asia and North America to affect the historical weight of Europe, which was overrepresented. The idea was to be more present in higher growth areas around the world. To succeed in our transformation, we have had to sell more than half of the company's turnover, which was, at the start, a mixed bag of commodities, and gradually replace, even more than replace, in fact, this turnover with large, high-quality acquisition to become a specialty materials company. Rather than doing it abruptly, we decided to do it step by step to ensure we maximize the value of divestment for our shareholders, and also to maintain our team's engagement and their commitment to the company's strategy.
We can say that we succeeded in the last point in doing so, based on what you have seen before, the Arkema excellent position in different rankings as the best place to work. Seeing the slide, the net outcome between divestment and acquisition is quite positive from both a quantitative and a qualitative perspective. I will now hand it over to Marie-José to complete the qualitative summary of the transformation with some more quantitative highlights.
Thank you, Thierry, and good morning, everyone. So as Thierry mentioned, since 2006, we were able to achieve a very strong financial performance. Despite the temporary demand shocks that you can see in 2009 and 2020, both our revenues and margins rose significantly. As a result, the group was able to generate a total shareholder returns at the top end of our peer group over the period, including a 285% appreciation of our share price, and a dividend that went from 0.60- 3.14. Focusing on the past three years, we can confirm we are on track to reach our 2024 targets. To monitor our progress, we look at our metrics over 2020 to 2023 period in average.
Each year has been so different that none of them really reflects a normalized environment. It's fair to say that our 2024 EBITDA target, at around EUR 1.7 billion, has been achieved with a different mix than what we had in mind. On one hand, I would say our pricing was thoroughly managed throughout the inflationary period. We had great success in the battery market. The cash generation has been outstanding, and the PMMA disposal was successfully executed. In parallel, we acknowledge that volume growth was not as strong as expected, and the EBITDA margin of our more downstream business, Bostik, is not yet at 17%, impacted by the mechanical dilution of price increases. We are also bang in line with the cash allocation guidelines that we gave in 2020.
We spent EUR 500 million on exceptional CapEx with the polyamide 11 and our Nutrien plants. On M&A, we are consistent with the EUR 1.5 billion euro envelope, with fewer disposals, as Fluorogases and Asian Acrylics are not yet divested, and fewer acquisitions, too. We did divest PMMA, as well as a couple of non-core activities, and acquired Ashland Adhesives and PI Advanced Materials, subject to finalization and various bolt-ons. In terms of shareholder returns, we continued to increase the dividend gradually, and we carried out a EUR 300 million euro share buyback. Finally, CSR continued to gain momentum and became a central element of our strategy. This is reflected in our performance, as well as in our outside recognition from non-financial rating agencies. Our focus on sustainability is embodied by our ambitious climate plan.
We committed to a 1.5-degree trajectory by 2030. This plan obtained SBTi validation last May, which resulted in our recent inclusion in the CAC SBT 1.5-degree index. I'll hand over back to Thierry.
Thank you, Marie-José. So we come now in the core of the presentation. Let's now look at our ambition for the next five years, until 2028, and detail the next phase of our development. As I said before, everything we have done so far was to put the company in position to leverage the many opportunities offered by the drive towards more sustainable solutions. We built this position in the right order and piece by piece, like a puzzle. It was important at the start to make sure we had the foundation in place, so we started by making the company leaner and more profitable. And then we accelerated the transformation of the portfolio towards specialties in a big way, doubling our innovation effort, deploying an intense M&A activity, and achieving several significant CapEx in the U.S. and in Asia on flagship products.
The last one, and maybe the most symbolic one, being the polyamide 11 project in Singapore. After all these efforts, our conviction is that Arkema is now fully ready to embrace a new phase of the journey, more stable from a portfolio standpoint. In fact, we are very happy with what we have now, and this time mostly focused on organic growth, executing on our corporate signature, Innovative Materials for a Sustainable World. This strategy will translate into a new set of ambitious long-term financial objectives. I will let Marie-José comment them in more detail, but let me first introduce our main targets, with sales estimated at EUR 12 billion, a new step-up of our EBITDA margin at 18%, and an organic EBITDA growth target of 7%-8% per year on average, reflecting our growth ambitions-...
Basically, more than doubling our organic EBITDA growth rate compared to the period since 2010. This target will come hand in hand, as always, concerning Arkema, with a strict financial discipline. Let me now hand it over to Marie-José again.
So, indeed, I'd like to confirm the financial ratios that we intend to deliver. So we are comfortable with a net debt ratio no greater than 2x EBITDA. Arkema enjoys a BBB+ rating with a positive outlook from S&P and a Baa1 rating with a stable outlook from Moody's. The group aims at maintaining a solid investment grade rating going forward. Our working capital discipline allows us to target operating cash flow conversion of approximately 70%. I'll come back to the definition later. We target to return a return on capital employed around 10%. The targets by segment reflect a clear action plan aligned with our global strategy.
So we have Advanced Materials segment that should become a greater part of the group, supported by major investments to capture the growth linked to megatrends in both high-performance polymers and performance additives. The adhesives should improve volumes, thanks to higher growth markets and the implementation of Ashland synergies. We also see upside to boost operating margins. Finally, Coating Solutions should become increasingly competitive through the offering of more sustainable products, supporting both organic growth and profitability. Bear in mind that the capital intensity of each segment is different, so the targeted EBIT margin profile of each segment is actually very consistent, around 13%. In order to help you understand the main drivers of our EBITDA growth between 2023 and 2028, let's go through the underlying assumptions.
As a starting point, I am assuming a EUR 1.5 billion EBITDA level for this year. Then, we estimate a neutral scope effect over the period, which means that the divestment of intermediates, namely Fluorogases and Asian Acrylics, which comes to a little more than EUR 200 million of EBITDA, will be replaced by EBITDA from acquisitions, including PI Advanced Materials. We thus expect an organic EBITDA increase of EUR 650 million from 2023 to 2028. EUR 350 million will be linked to major growth CapEx. Actually, EUR 250 million should come from recently implemented CapEx, notably the polyamide 11, the Nutrien plant and others, and EUR 100 million from future CapEx, which will be starting their ramp up over that period. Those projects will be detailed by Thierry later on.
The remaining 300 million incremental EBITDA will be achieved through a combination of improved volumes and product mix. In parallel, the impact of cost inflation, which we estimate at 3.5% per annum, should be partly offset by cost reduction measures that we'll also detail later on. Around 30% of EBITDA will be used for taxes, financial expenses and incremental working capital. Effective tax rate is expected around 22% of recurring EBIT. Average interest rate should be around 3.5% of our debt, and normalized working capital level is expected at around 15% of sales. The residual cash to allocate represents therefore approximately 70% of EBITDA. In cumulative terms, over the 5-year period, 2024-2028, we expect to convert nearly EUR 10 billion EBITDA into EUR 7 billion operating cash flow.
Looking at our capital allocation, this capital allocation policy will clearly reflect the execution of our strategy and will allow us to increase shareholder returns. During this next phase, our development will focus on organic investments. CapEx should total a little less than EUR 4 billion over the period, of which a bit more than half will be in growth projects and a bit below half in maintenance and decarbonization operations. This CapEx envelope is 15% greater than the previous five-year period, 2019-2023, reflecting the opportunities we see in mega trends, the significant inflation in costs, notably in the U.S., and our decarbonization strategy. Our financial discipline is a key investment criterion in selecting our growth projects, and we continue to target an internal rate of return after tax above 15%.
On average, the CapEx ratio on sales should come to slightly over 7%.... So this is actually quite similar to the historical ratio when incorporating past exceptional CapEx. We will continue to optimize our portfolio through M&A, focusing on high value-added bolt-ons with a priority on adhesive solutions. We will remain disciplined buyers, aiming for targets with good growth potential and high level of synergies. Overall, we expect the net M&A component to represent half the amount we spent on M&A over 2019-2023 period. We will increase returns to shareholders to a bit more than EUR 2 billion, which represents a 30% increase compared to the previous five years. We'll continue our dynamic dividend policy and intend to implement an opportunistic share buyback of around 400 million once intermediate businesses are divested. Let me now hand it over back to Thierry again.
Thank you, Marie-José, for this explanation. So what drives our strategy was illustrated well in the title of the presentation, the general title, Lead for Sustainable Growth. Several companies can claim the same mantra, but we'll execute it in our own way with our specific strengths and features. We see five levels that will make the difference in the coming years. Firstly, we will leverage the power of One Arkema. This mindset is a common segment of our three specialty segment, adhesives, coating, and advanced material, and is critical to leverage at our customers, our market expertise, and our science of material. Secondly, to grow, you need three things: differentiated technologies, the right manufacturing assets everywhere in the world, and a strong understanding of the market needs, especially those market which are seeing accelerated growth driven by the mega trends.
For this reason, product innovation and targeted capacity expansion will remain key pillars of the strategy. The large M&A is behind us, but we remain determined to finalize the divestment of intermediate business. It's a big delay because of the current market condition, but what we accomplished a couple of years ago with the PMMA sale was clearly a great achievement. On the other hand, we believe we can add value by making a few bolt-on acquisition every year, continuing to consolidate the fragmented adhesive market and strengthening our technology range in the high-growth sub-market, which we will present this afternoon. The strategy will not be complete if I did not include further improvement of our competitiveness, taking into account two factors which impact everyone, which will impact everyone: decarbonization and digital. I will not comment further on One Arkema.
I just did it earlier several times, but just be aware that the dissemination of this concept has started, is very positive, both for the relationship with our customers and our partners, and for the long-term pooling of our knowledge for further sustainability. To define our strategy, we have considerably refined our marketing approach to take into account this new paradigm around decarbonization, societal need, and sustainability in these different components. Based on our strength and expertise and on our understanding of what would drive global growth in the years to come, we have identified five sub-markets which should deliver exponential growth for Arkema in the future. These sub-markets are the following: green energy and electric mobility, advanced electronics and sustainable lifestyle, efficient buildings and homes, water filtration, medical devices, and crop nutrition. They represent a part...
In fact, they are extracted from our traditional market segmentation that you know. But while global GDP growth is around 3%-3.5%, the growth that Arkema can envisage in this sub-market is far superior, at around 12% per year. For the past 10 years, through our innovation, the CapEx we have made, but also the acquisition of new technologies, PI Advanced Materials, Ashland Adhesives, then Bostik or Sartomer before, we have built an absolutely unique portfolio of more than 10 high-margin, high-performance technologies that are essential for the five sub-markets that we described before. Among these technologies, you are familiar with some, like polyamide 11, PVDF, PSA, Pressure Sensitive Adhesives from Ashland, but they also include others, such as rheology additives or powders in coating solutions. The positioning, this is really the core of our strategy.
The positioning of these technologies in this high-growth sub-market are illustrated on this slide. On this mapping, you can see that for each of the sub-market, half of the technology bring an essential contribution.... The showroom will allow you to gain a more hands-on comprehension of our key application. The selected technology belong to our three specialty material segments, hence again, the relevance of the One Arkema concept. Each one of them is versatile, serving several market, which is a real strength and enable us to maximize opportunities. When we look at the sales generated by this technology in those sub-market, they represent, in 2023, around 15% of total Arkema sales.
As you understood, the growth potential is very significant, and this is why we allocate and will continue to allocate more than 50% of the group's R&D expenses and a large part of our gross CapEx to support the ramp-up of this technology. Our objective is that in 2028, this technology in this sub-market represent 25% of group sales, 25%, meaning they will grow three times faster than the group's average at around 12%. So this reflects the relevance of our strategy to maximize the allocated resources in order to capitalize on the exceptional potential of the combination of this technology with these sub-markets. Our innovation choices, industrial investment decisions, our M&A policy in past year have been key element to allow us to articulate today in front of you, this strategy and our ambition.
You can see, sorry, on slide 31, a one-page summary of the main CapEx and acquisitions of the past few years. There is nothing you don't already know, but you can see that they, in fact, correspond to, again, to the key technologies and identified sub-markets we have just described. The additional contribution of this project, expected in 2028 versus 2023, is EUR 450 million, roughly split half-half between CapEx and acquisitions or M&A. You will recognize here certain flagship projects like polyamide 11, again, in Singapore, PVDF expansion in France and China, Nutrien in the U.S., and of course, the last two significant acquisitions, PIAM and Ashland Adhesives. New development projects for our plants are being considered to keep up with the projected growth over the coming years.
All these projects are of excellent quality and are perfectly aligned with the strategy we have just described. Three of these projects were announced this morning through press releases, which confirm that they are now at an advanced level of maturity and precision. They concern the expansion of organic peroxide in China, DMDS capacity for biofuel in the U.S., and the decarbonization of our acrylic units in France. The different segment heads will highlight this project for you just later. The other two projects will require a certain amount of complementary in-depth study and confirmation before being announced. One of them concerns polyamide 11 and some incremental investment downstream of the Singapore plant to capitalize on value-added niches, particularly in sustainable lifestyle.
In the field of PVDF and high purity electrolyte salts, the second one, it won't surprise you, concerns the acceleration in batteries, notably in the U.S., where the EV market is on the cusp of growing very strongly. Total CapEx for all this project could be close to EUR 1 billion, with the EBITDA contribution expected to be in line with Arkema high standard for organic CapEx. We mentioned as a contribution for 2028, EUR 100 million of additional EBITDA versus 2023, but in fact, it's just a start because their commercial development will continue to gain traction beyond 2028. As I sometimes say, a company has similarity with the world of team sport, in which you have to know how to attack and defend at the same time.
Likewise, for Arkema, we must be able to grow and improve competitiveness at the same time in a world in which our competitors are progressing and inflation has returned. Here, you have a very short summary of our priorities. Our daily lives are much more complex than that, but allow me to emphasize our ongoing effort to simplify our processes, benefit from economies of scale in support function, modernize the company, particularly through digitalization in manufacturing or in R&D, and optimize variable costs, as the energy consumption of our factories in a world where the scarcity of resources is a focal point. In 2028, we are aiming for cost savings of EUR 200 million per year, evenly split between fixed and variable cost. Those savings will require around 100 million of one-off of exceptional implementation cost.
Improving our operational excellence is also, as you know, an important lever of our CSR policy, and this makes a perfect transition to Emmanuelle Bromet.
Thank you, Thierry. Good morning, everyone. So as explained before, we have a solid CSR performance recognized by rating agencies, and we now have the necessary maturity on the whole CSR spectrum to scale up our ambition. This is true firstly for our action in the field of climate, environment and biodiversity. Our climate plan to reduce Scope 2 emissions by 48.5% and our Scope 3 by 54% by 2030 versus the 2019 baseline. This climate plan was validated by SBTi last May. As a reminder, SBTi is the world reference in terms of climate effort. We have also made clear progress towards our environmental target, and today we are setting a new objective for chemical oxygen demand in water.
Secondly, we are continuously growing our product offer toward more sustainable solutions, with an objective to have, by 2030, 65% of our sales contributing significantly to United Nations Sustainable Development Goals. This is mostly driven by innovation in partnership with our customers. We are also raising today our objectives on LCA, Life Cycle Assessment. By 2030, 90% of our sales will be covered by an LCA. Thirdly, we reaffirm the critical importance of the well-being of our employees. Obviously, safety in its different dimensions remains a key operational objective and position us among the leaders in our industry. We are also committed to strengthening and promoting diversity, inclusion, and equal opportunities within the group. And finally, we regularly carry out internal surveys to assess employee satisfaction and to identify appropriate actions.
We set a new indicator with regards to employee engagement, targeting more than 80% by 2030. You will have understood that by now, decarbonization is one of the top CSR priorities, pushing us to intensify our efforts to decarbonize our value chain. How do we make it happen? Through various action to meet our customer demand for lower carbon footprint products and more renewable, raw materials, yet with comparable, performance. On this slide, we present our value chain following the traditional carbon emission flows as per the SBTi methodology. So upstream, we have our supplier. What are our actions? We increase responsible sourcing for bio-sourced and recycled raw materials. Polyamide 11, based on castor seeds, is a good example of our know-how. In parallel, we ask our supplier to reduce the carbon footprint of their products.
Our partnership with Perstorp illustrates quite well, this approach. Of course, we decarbonize our own operation, too, namely the Scope 1 and 2, by activating different levers, in particular, by shifting to low carbon electricity and steam. A great example is a biomethane contract we signed with ENGIE earlier this year, one of the largest such contracts in Europe to date. In addition, we are working to improve the production process and energy efficiency on our site, which is the aim of the new investment in Carling, just announced, today. And lastly, for the downstream Scope 3, we put a lot of efforts steering our portfolio towards a more sustainable offer by working on the design and the footprint of our product, by directly co-designing low carbon solution with our customer, and by addressing the end-of-life of our product, by developing material loops when we can.
Thanks to the effort of the teams, we have made significant progress in our greenhouse gas emission reduction. The 2030 objectives, validated by SBTi, give us a strong base to further raise the bar and announce today that we target net zero by 2050. This will mean a 90% emission reduction on all scopes. This is really an exciting objective for our teams, and we are working within the different product lines to refine our climate journey beyond 2030. Thank you, and I will now hand it back over to Thierry.
... Thank you, Emmanuel. So we are perfectly on time. So just a few words of conclusion, and then we move to Q&A. On the 2050 target, I would like to mention that beyond the target itself, because this 2050 is a long time from here. What is very important internally and externally is really the message which is behind that about decarbonization and the commitment of the company. So we are now reaching the end of the presentation. Quick summary. So first of all, yes, we are clearly proud of what we have been achieved since 2006, but more specifically since the last Capital Markets Day, because ambition was high and there was many things to be achieved on our roadmap.
So we believe we are on the right track to make the company a leader in specialty material. There is no doubt that the world will not become easier. It will remain volatile, demanding. There will be certainly new challenge we don't even know today, and that we will need to address, like everyone, including our peers, along the way. But the growth opportunities are there. They are very exciting, and they are supported by this new paradigm, the society's growing demand for sustainability. On the back of what we have implemented so far since several years at Arkema, we strongly believe that we are pretty well prepared to seize the opportunities to accelerate, because we have a unique set of technologies, we have strong market expertise, we have the customer intimacy, and we have the strong engagement of our employees.
I, the board, and the executive committee team, we are deeply convinced that the strategy is the right one, that the ambitions that we have just expressed will also continue to create significant value for our shareholders, and will further strengthen the company for the better around one simple focus, developing Innovative Materials for a Sustainable World.