Slide 1: PolyOne Investor Presentation
PolyOne Investor Presentation Credit Suisse Basic Materials Conference New York, NY September 18, 2014 PolyOne Corporation Page 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements In this presentation, statements that are not reported financial results or other historical information are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give current expectations or f
Slide 3: Use of Non-GAAP Measures
Use of Non-GAAP Measures This presentation includes the use of both GAAP (generally accepted accounting principles) and non-GAAP financial measures. The non-GAAP financial measures include: adjusted EPS, earnings before interest, tax, depreciation and amortization (EBITDA), adjusted EBITDA, net de
Slide 4: PolyOne Commodity to Specialty Transformation
PolyOne Commodity to Specialty Transformation 2015 and 2000-2005 2006 - 2009 2010 – 2014 beyond • Continue specialty • 19 consecutive transformation quarters of double- • Steve Newlin digit adjusted EPS • Goal of $2.50 appointed, • Volume driven, growth Adjusted EPS by Chairman, commodity 2015, near
Slide 5: PolyOne At A Glance
PolyOne At A Glance 2013 Revenues: $3.8 Billion 2013 Revenues: $3.8 Billion Latin Canada America Asia Europe 7% 6% 6% Distribution 14% 28% PP&S Specialty United 18% 54% States 67% End Markets Specialty Operating Income HealthCare Electronics & $200 $195 11% Appliance Electrical Consumer 6% 5% 10% $1
Slide 6: Mix Shift Highlights Specialty Transformation
Mix Shift Highlights Specialty Transformation Old 2015 PolyOne Transformation Target 100% % of Operating Income* 80% 60% 40% 66% 65-75% 62% 20% 43% 34% 0% 2% 2005 2008 2010 2013 2014 YTD 2015 Specialty OI $5M $46M $87M $195M $129M Target JV's Performance Products & Solutions Distribution Specialty *
Slide 7: Confirmation of Our Strategy
Confirmation of Our Strategy Specialization Globalization Operational Commercial Excellence Excellence The World’s Premier Provider of Specialized Polymer Materials, Services and Solutions PolyOne Corporation Page 7
Slide 8: Strategy and Execution Drive Results
Strategy and Execution Drive Results EPS Share Price vs. S&P 500 $1.31 550% All time high of 450% $43.34 $1.00 July 1st, 2014 350% $0.82 250% $0.68 150% 50% $0.27 -50% $0.21 $0.12 $0.13 -150% '06 '07 '08 '09 '10 '11 '12 '13 ‘06-‘13 EPS CAGR = 41% POL S&P 500 PolyOne Corporation Page 8
Slide 9: Proof of Performance & 2015 Goals
Proof of Performance & 2015 Goals 2006 2014 YTD 2015 “Where we were” “Where we are” Target 1) Operating Income % (Est. in 2012) Specialty: Global Color, Additives & Inks 1.7% 15.2% 12 – 16% Global Specialty Engineered Materials 1.1% 11.8% 12 – 16% Designed Structures & Solutions -- 7.1% 8 – 10% Perf
Slide 10: Bridge to $2.50 Adjusted EPS by 2015
Bridge to $2.50 Adjusted EPS by 2015 2015 EPS: $2.50 Accelerated Innovation Several Levers to & Mix Improvement Drive Growth Ongoing LSS Programs (50-100 bps/yr) Incremental Share Buybacks Mergers & Acquisitions Spartech Accretion Continued Gross Margin Expansion Mid Single Digit Revenue CAGR 2013 E
Slide 11: Innovation Drives Earnings Growth
Innovation Drives Earnings Growth Research & Development Specialty Platform Specialty Platform Spending Vitality Index Gross Margin % ($ millions) Progression* 30.7% 43.0% $53 19.5% 14.3% $20 2006 2013 2006 2013 2006 2013 Specialty Vitality Index Target ≥ 35% *Percentage of Specialty Platform revenu
Slide 12: A Rich Pipeline of Opportunity
A Rich Pipeline of Opportunity* Phase Phase Phase Phase Phase 1 2 3 4 5 Breakthrough 15 10 4 5 6 Platform 9 4 11 10 9 Derivative 1 4 2 3 Frame Build Prototype Scale-up & Commercial Opportunity Business Case Test Market Launch Number of Projects 25 14 19 17 18 93 Addressable Market TBD TBD $800 $450
Slide 13: Megatrends Aligned with Key End Markets
Megatrends Aligned with Key End Markets Megatrend End Markets Improving Health & Health and Wellness Wellness Protecting the Transportation Environment Globalizing and Packaging Localizing Decreasing Dependence on Fossil Consumer Fuels PolyOne Corporation Page 13
Slide 14: Debt Maturities & Pension Funding – 6/30/14
Debt Maturities & Pension Funding – 6/30/14 $800 Debt Maturities Pension Funding** As of June 30, 2014 As of June 30, 2014 ($ millions) 100% $700 100% $600 90% $600 80% $500 70% $400 60% 60% $317 $300 50% $200 40% $100 30% $48 $0 20% 2015 2020 2023 2008 2014 Coupon Rates: 7.500% 7.375% 5.250% Net De
Slide 15: Free Cash Flow and Strong Balance Sheet Fund Investment / Shareholder Return
Free Cash Flow and Strong Balance Sheet Fund Investment / Shareholder Return Expanding our sales, marketing, Repurchased 1.8 million shares in and technical capabilities Q2 2014 Investing in operational and Repurchased 8.2 million LSS initiatives (including shares since early 2013 synergy ca
Slide 16: PolyOne Core Values
PolyOne Core Values Collaboration Innovation Excellence PolyOne Corporation Page 16
Slide 17: Why Invest In PolyOne?
Why Invest In PolyOne? Strong past performance demonstrates that our strategy and execution are working Megatrends and emerging opportunities align with our strengths Innovation and services provide differentiation, incremental pricing power, and competitive advantage Strong and proven manag
Slide 18: Schedule I Reconciliation of Non-GAAP Financial Measures (Unaudited)
Schedule I Reconciliation of Non-GAAP Financial Measures (Unaudited) (Dollars in millions, except per share data) Below is a reconciliation of non-GAAP financial measures to the most directly comparable measures calculated and presented in accordance with U.S. GAAP. Senior management uses adjusted o