International SAP Conference for Chemicals, Prague, October 17 th 2018

AGILE GREENFIELDIMPLEMENTING S/4HANA IN AN

INSIGHTS & LESSONS LEARNED

2

Safe harbor statement

The information included in this presentation is being provided for informational purposes only.

This presentation contains certain forward-looking statements, including assumptions, opinions and views of thecompany or cited from third party sources. Various known and unknown risks, uncertainties and other factors couldcause the actual results, financial position, development or performance of any of the ARLANXEO Group entities to

differ materially from the estimations expressed or implied herein. None of the ARLANXEO Group entitiesguarantees that the assumptions underlying such forward-looking statements are free from errors nor do they acceptany responsibility for the future accuracy of the opinions expressed in this presentation or the actual occurrence of

the forecast developments.

No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, any

information, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to anyerrors, omissions or misstatements contained herein, and accordingly, no representative of any ARLANXEO Groupentity or any of such entity’s officers, directors or employees accept any liability whatsoever arising directly or

indirectly from the use of this document.

AGENDA

01 ARLANXEO overview and IT Roadmap

02 Future architecture and project insights

03 Lessons learned and Key Success Factors

04 Q&A

Background Global Set-Up Organization

▪ ARLANXEO: Joint venture formed

by LANXESS and Saudi AramcoStart-up April 1, 2016

▪ Shareholder agreement on change of ownership structure

▪ A world-leading synthetic rubber company: development,

manufacturing and marketing of high-performance rubber

▪ 20 plants in nine countries

▪ ~3,800 employees worldwide

▪ Global sales of ~3.2bn € in 2017, EBITDA of ~ 385m €

▪ Corporate Headquarters: Maastricht, Netherlands

Two business units

▪ Tire & Specialty Rubbers

▪ High Performance Elastomers

ARLANXEO is a key global player in the synthetic rubber market

4

A broad and innovative portfolio with a global footprint is offered by ARLANXEO

▪ Truly global footprint in all regions

featuring state of the art production facilities

▪ Proximity to major markets, especially

Asia including a strong recently built asset base

Cabo de SantoAgostinho, BR

Triunfo, BR

Duque de Caxias, BR

Dormagen, DEOrange, US

Singapore

Sarnia, CA Port Jérôme, FR

London, CA

Shanghai, CN

Pittsburgh, USFribourg, CH

Leverkusen, DE

São Paulo, BR

La Wantzenau, FR

Geleen, NL

Zwijndrecht, BE

Cologne, DE

Maastricht, NL

Changzhou, CN

Nantong, CN

TSR Production HPE Production

TSR Office HPE Office

Group HQ

Joint Production

Joint Office

▪ Broad and innovative product portfolio

for various rubber applications

5

6

ARLANXEO’s IT Roadmap enables the separation from LANXESS and future business growth for ARLANXEO

▪ Currently most applications are

provided within a SLA framework by LANXESS

▪ Separation to be completed by 2021

▪ S/4HANA as ERP Core in a standardized and cloudified

App Landscape

+IT Separation Digitization IT Roadmap Outcomes

▪ Beside workplace topics overall

digitalization framework focusing on core processes

▪ Production process maturity

▪ Supply chain & logistics

▪ B2B marketing & sales

▪ S/4HANA serves as digital

enablement platform

▪ Platform for lean group

function processes

▪ Harmonized businessprocesses

▪ Improved business partner integration

▪ Lean, future proof IT application architecture

7

ARLANXEO’S core business processes capabilities benefit from new solutions

Solution and IT Backbone

IT Support

Communication

Human Resources

Equipment

Process Template

STAR

Contracts & SLA &

License

Treasury

Infra-structure

Consoli-dation

CRM

ARLANXEO Core Processes built on S/4

Expected Benefits of the core

processes

Procurement

Production &

Plant

Maintenance

Sales &

Marketing

Finance & Consolidation

Master Data Management

Supply Chain Management

Multiple projects are running to manage the overall transformation complexity and to create specific value for ARLANXEO

Business Processes

▪ Leaner & harmonized business processes

▪ Standard S/4HANA business processes

Innovation

▪ Enhanced reporting and analytics

▪ Transparency due to real-time integration

▪ Information accessibility anywhere anytime

leads to better collaboration

IT Benefits

▪ Reduced number of applications

▪ Future-oriented IT landscape simpler to

maintain

Legal & Regulatory (e.g. GTS, EHS)

8

S/4HANA is at the core of a modern and standardized application architecture at ARLANXEO

ARLANXEOS/4HANA CORE

Label printOMS EH&S

emb. Analytics

emb. TM MDG

3rd party SAP

MeridianOpen Text

From a complex legacy landscape… … to the new

Custom Development

Transportation

Management

eBusiness Partner

Output

mgmt.

Procurement-Tools

Business Warehouse

SAP BW & SAP-SEM

Environment,

health and safety

SAP EH&S

CRM

Elemica

Automated Invoice

handling

InterCompany

Exchange Broker

SAP HANA Enterprise Cloud

SAP Label print

Master Data

Management

SAP MDM

Customer Complaints

Management

LANXESS

Central ERP

Global Trade Service

SAP GTS

…

Custom

Analytics

ApplicationsInternetportal –

Customer Order

BPC RTC

GTS

SAP BW/4HANAReporting

Fiori ApplicationsImprov ed UI

SAP BPCPlanning

Cloud Apps

CoupaeProcurement

ConcurTrav el & Expense

HybrisSales + CRM

RevalTreasury

ElemicaDigital

supply network

9

To achieve the benefits the S/4HANA project approach focusses on the future business processes based on current technology options

Project approach from IT point of view

Template based approach

Overall 2 years for Pilot Implementation + Roll-Outs

Latest Technology – Project Started on 1610, template built on

1709, upgrade to 1809 as part of pilot

Process approach (business view)

„Smart greenfield approach“, i.e. combination of proven

legacy processes with Accenture & SAP leading practice solutions

AGILE Template Design and Build

Close cooperation with business for processes

supported by state-of-the-art technology

Harmonization and

simplification of processes

Usage of S4/HANA

chemicals best practices

Setup of lean

system landscape

Agile

methodology

10

The timeline for all projects is mainly driven by the S/4HANA milestones

2017 2018 2019 2020

Deployment & further functionality

Reval

SAP Hybris Commerce Cloud for B2B

SAP Hybris Cloud for Sales & Service

Coupa

Pilot Implementation

SAP Master Data Governance

Template Design & Implementation

Roll-out Wave 1

SAP BW/4HANA & SAP Business Planning and Consolidation*

SAP S/4HANA Enterprise Management

Roll-Out Wave 2

SAP BPC Real-Time Consolidation (RTC)**

ERP - Digital Core

Master Data Governance

SAP Upgrade Upgrade from 1610 to 1709

CRM

eCommerce

Go-Live (Oct., 1st 2019)

eProcurement

STAR Process Template

Go-Live (Apr., 1st 2020)

Go-Live (Apr., 1st 2019)

Treasury and Risk Management

…

Analytics & Planning

Further ongoing projects

Upgrade from 1709 to 1809

Consolidation

*SAP BPC11.0, version for BW/4HANA and SAP BPC Optimized for S/4HANA are used depending on the different planning scenarios **as part of SAP Business Planning and Consolidation

11

ARLANXEO started with an agile approach and switched to waterfall for the implementation to leverage the strength of both approaches

Process scoping,

project planning

Iterative Template Design & Build

(Sprint 1 – 7)

Template

Integration Test

Template: Iterative Approach Implementation + Roll-Outs: Waterfall Approach

Local Fit/Gap Design

Build

Test

Deploy

Rapid and continuous business involvement

Early availability of a system, prototype new functions

Dual track set-up for multi-speed development

Data activities

Change Management

Requirements / Definition clear from Template

Most complexity covered in core model

Overlapping Roll-outs clustered by countries

Agile is a real change for the organization – it requires commitment & intensive coaching

SCRUM

KANBAN

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In Sales & Marketing value is realized through the extension of cloud solutions and integration of E2E processes

Sales & Marketing

Major business impact:

▪ For settlement management (rebates

and commissions), now, 4-eyes-

principle possible w/o additional

programming and workflow settings

▪ 360° view on Business Partner brings

increased transparency for the

relationships to the BPs

eCommerce & CRM

Major business impact:

▪ The legacy web shop will be replaced by

a modern eCommerce Solution on

Hybris integrated with customer

relationship marketing and core SAP

S/4 (e.g. availability checks, pricing)

▪ Integration options with other sourcing

platforms of major customers

▪ Increased user experience for the

customer

Transportation Management

Major business impact:

▪ Usage of embedded Transport

Management offering better status

information for deliveries to customers

▪ Advanced and integrated

transportation functionalities

▪ Single source of immediate insights

▪ Logistics Business Network for carrier

integration still very new

Increased transparency on

Business Partners

Customer proximity and

service

Execute end-2-end TM

process in one single system

Process and solution impact

13

The value chain will also leverage a platform strategy to collaborate better with the supplier by streamlining real-time production processes

Sourcing & Procurement

Major business impact:

▪ Supplier integration with State of the Art

eSourcing platform (Coupa)

▪ Higher automation level in exchange of

commercial documents

▪ Mobile applications for purchasing

document approval and Procurement

Dashboard

▪ Replacement of complex custom built

SRM solution

Plant Maintenance

Major business impact:

▪ Full End-to-Process for Corrective

Maintenance within Fiori

▪ New Fiori App to create maintenance

requests

▪ Increased reporting capabilities

Supply Chain Management

Major business impact:

▪ Streamlined solution for Global Label

Handling

▪ Increasing planning capabilities with

new cockpit for material planners

▪ Flexible MRP processes across

organizational boundaries (e.g. plants)

instead of manual processes

▪ eWM was prototyped but switch

postponed to after project due to change

impact

Process and solution impact

Supplier Integration enables

new valueEnabling mobile workforce

Enrich existing processes

with digital accelerators

14

In the Finance and Reporting area we faster processes and enhanced user experience is brought to the end-user

Finance & Controlling

Major business impact:

▪ Flexible ledger approach and multiple

currencies for different GAAP requirements

▪ Streamlined redesign of chart of account

used for Legal Entities and Group

▪ Single P&L structure for financial and

management reporting

▪ Accelerated fast-close and reduced

recon. effort

▪ Group costing new concept & parallel group

valuation

Consolidation

Major business impact:

▪ More transparency and flexibility

through drill down possibilities

▪ Planning applications can be feed in

real-time with actuals leads to an

improved and accelerated planning

process

▪ Intercompany profit elimination not

required

▪ Modernized frontends to custom

development by using pre-delivered

FIORI content

Reporting & Analytics

Major business impact:

▪ Simplification of operational reports

and transfer to S/4 (reduction of scope

for Business Warehouse)

▪ State of the Art reporting solution

▪ Reporting between S/4HANA and

BW/4HANA in sync

Process and solution impact

Simplified structure and

accelerated processes

Real time BPC enables the

integration (BI+S/4) and simplifies planning process

Faster reporting and

improved User Experience

15

An integrated state-of-the-art compliance framework

EH&S / GTS

Major business impact:

▪ Most functions taken over from the legacy

system

▪ Replacement of custom developments in

EH&S

▪ Focus on simplification of existing solutions

to the required ARLANXEO scope

Master Data Governance

Process and solution impact

Complying with regulations

for safe operations

Simplified data governance

fitting the new org. structure

Major business impact:

▪ Reduction of process complexity (e.g.

number of approval steps) within

workflows

▪ Master data solution integrated in S/4

core system and with core processes in

S/4

▪ New and improved workflows in

material master creation

▪ User-friendly interface

16

Fifteen months into the program, we see some key lessons learned

S/4HANA isnot ECC 6.0

Evaluate legacy functionality vs.

the new

Agile is a major change

Needs training &

commitment

Newfunctionalities

Business Transformation

Maturity of applications

Evaluation of SAP

Manage the SAProadmap

E2E business

participation

Find right the balance

of the new

Prototype at a early

stage

17

The key success factors of ERP programs are still valid, but there are a few more to consider in an S/4HANA transformation

Drive business partnership with IT’s stakeholder and leverage SAP collaboration to increase the project‘s success

Manage

product

road-

map

Business

engage-

ment

New

skills

Best

practice

Customer

centric

Change

enablem

ent

Focus

on

standard

Gover-

nance

User

experi-

enceTechnology &

Ecosystem

People & Partners

Approach

Leadership

Agile

Operating

model

Value

drivenS4

experts

SAP

Q&A