Eastman Chemical Company · NYSE:EMN
Eastman Chemical — FY2021 Earnings Presentation
17 slides from Eastman Chemical's earnings presentation, Jan 27, 2022
Slide 1: 4Q and FY 2021 Financial Results
4Q and FY 2021 Financial Results January 27, 2022 eastman.com
Slide 2: Prepared remarks, forward-looking statements, non-GAAP financial measures
Prepared remarks These slides should be reviewed with the accompanying prepared remarks posted on our website. Forward-looking statements During this presentation, we make certain forward-looking statements concerning plans and expectations for Eastman Chemical Company. We caution you that actual ev
Slide 3: 2021 and other recent highlights
2021 and other recent highlights • Record revenue and adjusted EPS despite unprecedented supply chain and logistics challenges and rapid inflation • Generated ~$600M in New Business Revenue from Innovation in FY21, driven by strong growth of specialty products across the company • Accelerated leader
Slide 4: Building the world's largest molecular recycling facility in France
Building the world’s largest molecular recycling facility in France • Plan to invest up to $1B to build world’s largest material-to-material molecular recycling facility in a multi-phase approach • Facility to recycle up to 160,000 metric tons of hard-to-recycle polyester waste currently bound for i
Slide 5: Corporate
Corporate $M (except EPS) 4Q21 4Q20 FY21 FY20 4Q21 vs. 4Q20 highlights Continued strong demand in durables, medical & pharma, and Revenue 2,694 2,186 10,476 8,473 building & construction end markets Adjusted EBIT 336 329 1,635 1,216 Higher selling prices across all operating segments catching up to
Slide 6: Advanced Materials
Advanced Materials $M 4Q21 4Q20 FY21 FY20 4Q21 vs. 4Q20 highlights Strong demand in durables, medical, and pharma end markets Revenue 772 674 3,027 2,524 Auto OEM component shortages negatively impacted Adjusted EBIT 100 138 532 448 interlayers demand Adjusted EBIT margin 13.0% 20.5% 17.6% 17.7% Str
Slide 7: Additives & Functional Products
Additives & Functional Products $M 4Q21 4Q20 FY21 FY20 4Q21 vs. 4Q20 highlights Strong growth in building and construction, feed additives, personal Revenue 907 773 3,700 3,022 care, and aviation Adjusted EBIT 107 118 537 448 Underlying business grew volume/mix, offset by the impact of Adjusted EBIT
Slide 8: Fibers
Fibers $M 4Q21 4Q20 FY21 FY20 4Q21 vs. 4Q20 highlights Double-digit revenue increase due to strong textile growth driven by Revenue 238 208 900 837 innovation and market development and improvement in the Adjusted EBIT 28 40 142 180 underlying end market Adjusted EBIT margin 11.8% 19.2% 15.8% 21.5%
Slide 9: Chemical Intermediates
Chemical Intermediates $M 4Q21 4Q20 FY21 FY20 4Q21 vs. 4Q20 highlights Significantly higher spreads due to strong commodity Revenue 777 531 2,849 2,090 market conditions Adjusted EBIT 112 36 461 171 More favorable product mix due to growth in functional amines Adjusted EBIT margin 14.4% 6.8% 16.2% 8
Slide 10: FY2021 cash flow and other financial highlights
FY2021 cash flow and other financial highlights Strong cash flow Balance sheet and tax rate FY21 operating Net debt to FY21 adjusted cash flow 5 adjusted EBITDA effective tax rate consecutive years >$1.6B above $1B of free <2.2x ~15% cash flow Meaningful stockholder returns Disciplined portfolio man
Slide 11: Full-year 2022 guidance
Full-year 2022 guidance Tailwinds Headwinds Innovation and market development driving growth Divested EBIT of ~$100M from tire additives and above underlying end markets adhesives resins product lines Pricing actions taken toward end of 2021 to catch up Continued investment in growth, particularly t
Slide 12: Well positioned for strong 2022 adjusted EPS growth vs 2021
Well positioned for strong 2022 adjusted EPS growth vs 2021 $9.50-$10 $8.85 $8.85 $8.85 Share Normalization Growth in Earnings from repurchases of Chemical Cost savings, net Specialty growth specialty 2021 divested from 2021 Intermediates of inflation1 investments business 2022 proforma variable bus
Slide 13: Five key themes underpinning our building momentum
Five key themes underpinning our building momentum Innovation- Circular economy is Strengthening Sustainability and Power of cash driven growth a new vector of execution to convert ESG are integrated flow and the model is significant growth growth to value into how we win balance sheet succeeding 13
Slide 14: Appendix
Appendix 14
Slide 15: Key underlying assumptions and guidance for FY2022
Key underlying assumptions and guidance for FY2022 Modeling items • Interest expense of ~$190M • Depreciation & amortization expense ~$490M • Capital expenditures ~$700M • Expect to deploy strategic cash of approximately $1.4B through the combination of bolt-on M&A and share repurchases. • USD/EURO
Slide 16: 2022 quarterly forecasted change in manufacturing maintenance shutdown cost by segment
2022 quarterly forecasted change in manufacturing maintenance shutdown cost by segment – year-over-year and sequential Q122 Q222 Q322 Q422 FY22 vs Q122 vs Q222 vs Q322 vs Q422 vs y/y y/y y/y y/y FY21 Q421 Q122 Q222 Q322 Advanced Materials - - - - - 10 - - (10) Additives & Functional Products 5 15 -
Slide 17: Adjusted EBITDA to Net Earnings reconciliation
Adjusted EBITDA to Net Earnings reconciliation Adjusted EBITDA to Net Earnings reconciliation (Dollars in millions) 2020 2021 Net earnings $ 489 $ 867 Plus: Depreciation 445 426 Amortization 129 112 Net interest expense 210 198 Provision (benefit) for income taxes 41 215 EBITDA $ 1,314 $ 1,818 Add b
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