Element Solutions Inc. · NYSE:ESI
Element Solutions — Platform Specialty Products — Credit Suisse 30th Annual Basic Materials Conference 2017
21 slides from Element Solutions's conference presentation, Sep 13, 2017
Slide 1: Credit Suisse Basic Materials Conference 2017
Credit Suisse Basic Materials Conference 2017 September 13, 2017 1
Slide 2: Safe Harbor
SAFE HARBOR Please note that in this presentation, we may discuss events or results that have not yet occurred or been realized, commonly referred to as forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or o
Slide 3: Non-GAAP Information
NON-GAAP INFORMATION To supplement the financial measures prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), the Company uses the following non-GAAP financial measures: adjusted EBITDA, adjusted EBITDA margin, cash flow conversion, comparable adjusted
Slide 4: Platform Since Founding
PLATFORM SINCE FOUNDING A diversified portfolio of “asset-lite, high-touch” businesses across Platform Thesis multiple end-markets can generate stable strong cash flows Agricultural Solutions Performance Solutions Acquisitions & Verticals 2016 Net Sales: $1.8bn 2016 Net Sales: $1.8 bn 2016 Adj. EBIT
Slide 5: Platform's Business Today
PLATFORM’S BUSINESS TODAY Highly profitable business Diversified revenue base Healthy and growing with minimal capital across geographies and end-markets with requirements leading to industries… exciting opportunities strong returns on for expansion… investment … 2016 Performance 2016 Net Sale
Slide 6: Strong Financial Metrics vs. Peers
STRONG FINANCIAL METRICS VS. PEERS 2017E Adj. EBITDA* Growth 2016 Adj. EBITDA* - Capex Margin1 19% 18% 18% 17% 10% 9% 13% 9% 7% 7% PAH Industrial R&D Lite R&D Driven Specialty PAH R&D Driven Industrial Specialty R&D Lite Chemicals Ag Ag Chemicals Ag Chemicals Chemicals Ag 2016 ROIC* 2017 EV / Adj. E
Slide 7: Platform's Future Vision
PLATFORM’S FUTURE VISION Two Leading Specialty Chemical Companies with Exciting Growth Opportunities and Robust Cash Flows ~$1.8bn+1 Global Agricultural Chemical ~$1.8bn+1 Global Specialty Chemical Business Business Key End- Conventional crop protection, seed Electronics, automotive, general Markets
Slide 8: Arysta LifeScience Highlights
ARYSTA LIFESCIENCE HIGHLIGHTS Distinctive position as formulation-based Ag chemical company with global scale and niche crop focus Strong Industry innovator that develops new solutions for farmers Industry A preferred partner for numerous discovery-focused firms Positioning Significant globa
Slide 9: Arysta LifeScience Peer Benchmarking
ARYSTA LIFESCIENCE PEER BENCHMARKING 2017E Adj. EBITDA* Growth 9% 9% 6% Arysta Lifescience R&D Lite Ag R&D Driven Ag 2016 ROIC* 19% 14% 13% Arysta Lifescience R&D Driven Ag R&D Lite Ag Note: R&D Driven Ag peers include Syngenta and Monsanto R&D Lite Ag peers include FMC Ag business (ROIC based on FM
Slide 10: Performance Solutions Highlights
PERFORMANCE SOLUTIONS HIGHLIGHTS Market leader in specialty chemicals for surface treatment and electronic assembly Leading Market High-touch sales force embedded with customers Positions Leading specialty chemical supplier selling more than $1.5 billion of surface chemistry and assembly solut
Slide 11: Performance Solutions Peer Benchmarking
PERFORMANCE SOLUTIONS PEER BENCHMARKING 2017E Adj. EBITDA* Growth 10% 10% 7% Performance Solutions Industrial Chemicals Specialty Chemicals 2016 ROIC* 24% 14% 13% Performance Solutions Industrial Chemicals Specialty Chemicals Note: Industrial Chemicals peers include Newmarket, Ecolab, Quaker, RPM In
Slide 12: Next Steps and Other Considerations
NEXT STEPS AND OTHER CONSIDERATIONS Arysta IPO : Expect IPO to be completed mid-2018 o Arysta to be operated as an independent, standalone public company post-IPO with Platform continuing as a significant shareholder Team: Strong management teams to be established for both businesses; expect key
Slide 13: 2017 Priorities
2017 PRIORITIES Execution: Build on Operating Momentum Focus Commercial Efforts on Fast Growing Niches Synergy Realization and Continuous Cost Improvement Generate Free Cash Flow and Reduce Leverage 13
Slide 14: Appendix
PLATFORM SPECIALTY PR UCTS CORPORATION rl APPENDIX 14
Slide 15: Platform Reconciliation to Adjusted EBITDA
PLATFORM RECONCILIATION TO ADJUSTED EBITDA (Amounts in millions) Q2'17 YTD Q2'16 YTD FY 2016 FY 2015 FY 2014 Net loss attributable to common stockholders $(86) $(144) $(41) $(309) $(263) Gain on amendment of Series B Convertible Preferred Stock — — (33) — — Stock dividend on founder preferred shares
Slide 16: Segment Adjusted EBITDA Reconciliation
SEGMENT ADJUSTED EBITDA RECONCILIATION Performance Solutions Agricultural Solutions Total (amounts in millions) Q2'17 Q2'16 Q2'17 Q2'16 Q2'17 Q2'16 YTD YTD YoY% YTD YTD YoY% YTD YTD YoY% Adj. EBITDA ex-corp cost $220 $197 11% $209 $197 6% $429 $395 9% Corporate allocations (15) (17) (15) (17) (30) (
Slide 17: Segment Adjusted EBITDA Reconciliation (Continued)
SEGMENT ADJUSTED EBITDA RECONCILIATION (CONTINUED) Performance Solutions Agricultural Solutions Total (amounts in millions) 2015 2014 YoY% 2015 2014 YoY% 2015 2014 YoY% Adj. EBITDA ex-corp cost $236 $212 11% $379 $16 n/m $616 $228 170% Acquisitions: Alent 143 175 143 175 OM 28 30 28 30 Arysta 3 293
Slide 18: Segment Comparable Sales Reconciliation
SEGMENT COMPARABLE SALES RECONCILIATION Performance Solutions Agricultural Solutions Total (amounts in millions) 2015 2014 2015 2014 2015 2014 Net Sales $801 $755 $1,742 $88 $2,542 $843 Acquisitions: Alent 847 1,063 847 1,063 OM 142 172 142 172 Arysta 87 1,533 87 1,533 CAS 380 380 Agriphar 170 170 C
Slide 19: Segment Organic Sales Growth Reconciliation
SEGMENT ORGANIC SALES GROWTH RECONCILIATION Q2'17 YTD Reported Net Impact of Constant Organic Sales Metals Acquisitions Sales Growth Currency Currency Growth Performance Solutions 6% 2% 8% (3)% —% 5% Agricultural Solutions 1% (1)% —% —% —% —% Platform 3% 1% 4% (1)% —% 3% FY 2016 Reported Net Impact
Slide 20: Return on Invested Capital Reconciliation
RETURN ON INVESTED CAPITAL RECONCILIATION Performance Agricultural Total ($ in millions) Solutions Solutions 2016 2016 2016 Adj. EBITDA $401 $368 $769 (+) Rent expense 22 15 37 (+) R&D expense 45 39 84 (-) Statutory tax rate impact (164) (147) (312) Adj. Operating Income $304 $275 $579 Invested Capi
Slide 21: Non-GAAP Information
NON-GAAP INFORMATION Adjusted EBITDA: Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, as further adjusted for additional items included in earnings that are not representative or indicative of our ongoing business. Management believes adjusted EBITDA and
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