Slide 1: Coatings Sell Side Analyst Roundtable
COATINGS SELL SIDE ANALYST ROUNDTABLE LUC VAN RAVENSTEIN 15 October 2020 Enhanced Performance Through Applied Innovation
Slide 2: Cautionary statement
Cautionary statement This presentation, the presentation materials and discussion may contain certain forecasts, projections and forward-looking statements – that is, statements related to future, not past events – in relation to, or in respect of the financial condition, operations or businesses of
Slide 3: Key messages
Key messages OVERVIEW 1 Coatings transformation complete Clear growth strategy – growth platforms, 2 global key accounts & geographic expansion Execution of CMD growth opportunities - 3 early successes Well positioned for growth & margin 4 improvement Enhanced Performance Through Applied Innovation
Slide 4: Coatings Overview
Coatings Overview OVERVIEW KEY FIGURES (2019) SOURCES OF COMPETITIVE ADVANTAGE ▪ Global leader in rheology $320m $48m 15.1% NET SALES OPERATING PROFIT* MARGIN* ▪ Unique hectorite resource ▪ Complementary high value additive technology ▪ Global reach & customer intimacy 27% 31% 33% ▪ Capital light bu
Slide 5: What we do in Coatings
What we do in Coatings OVERVIEW RHEOLOGY & HIGH PERFORMANCE ADDITIVE FOCUS ELEMENTIS COMPETES IN A HIGH VALUE NICHE ELEMENTIS HELPS CUSTOMERS MEET MARKET TRENDS Coatings Ingredient Overview Rheology High Value Additives = ELEMENTIS SPACE $1.9bn Market VALUE ($/MT) Other Additives $2.9bn Market Pigme
Slide 6: Why customers choose Elementis
Why customers choose Elementis OVERVIEW LEADER IN PROVIDING RHEOLOGY & FORMULATION SOLUTIONS Customised solutions World leader in rheology • Partnership model • Fast to market • Systems approach • Complementary additives • Scalable • Local formulation support Sole global organoclay producer Sustaina
Slide 7: Coatings transformation
Coatings transformation TRANSFORMATION TRANSFORMATION COMPLETE, ONE GLOBAL GROWTH STRATEGY Refreshed leadership Regional structure Flat structure One global team $5m cost savings Changxing closure $30m working capital reduction* Delden & Colourants exit Distributor consolidation Regional portfolio 1
Slide 8: One global growth strategy
One global growth strategy STRATEGY THREE AREAS OF FOCUS GROWTH PLATFORMS GLOBAL KEY ACCOUNTS GEOGRAPHIC EXPANSION Premium Decorative Dedicated Resources Portfolio Alignment Adhesives & Sealants Integrated Innovation Resource Investment Waterborne Industrial Additives Value Over Volume Route To Mark
Slide 9: Growth platforms
Growth platforms GROWTH PLATFORMS 3% H1 REVENUE GROWTH & CONTINUED MOMENTUM ENCOURAGING EARLY SUCCESS POSITIVE MEDIUM TERM OUTLOOK NEW BUSINESS OPPORTUNITIES % of Sales Medium term growth rate - $9m delivered in 2019 - On track for $17m in 2020 GDP 70% 60% 66% ACCELERATED INNOVATION 50% - New produc
Slide 10: Premium decorative coatings
Premium decorative coatings GROWTH PLATFORMS VALUE DRIVERS AND CUSTOMER IMPACT ELEMENTIS HIGH PERFORMANCE DECORATIVE TECHNOLOGY VS TRADITIONAL SYSTEMS $400m addressable market, 15-20% share aim* Performance Efficiency Sustainability Smoother application & Improved formulation VOC, biocide & surfacta
Slide 11: Premium decorative coatings
Premium decorative coatings GROWTH PLATFORMS TECHNOLOGY IN ACTION RHEOLATE® HX 6025 - NEXT GENERATION ONE COAT HIDE Effective one coat hide & improved stain resistance Rheolate® HX 6025 series - up to 50% hide CHALLENGE: in high solid paints SOLUTION: improvement vs industry leading competitors 2019
Slide 12: Hybrid adhesives & sealants
Hybrid adhesives & sealants GROWTH PLATFORMS VALUE DRIVERS AND CUSTOMER IMPACT ELEMENTIS ORGANIC THIXOTROPES VS TRADITIONAL SYSTEMS $150m addressable market, growing at 7% per annum Performance Efficiency Sustainability Clean application Up to 30% energy savings Naturally derived from castor wax Imp
Slide 13: Hybrid adhesives & sealants
Hybrid adhesives & sealants GROWTH PLATFORMS TECHNOLOGY IN ACTION THIXATROL® AS8053 – LOWER TEMPERATURE ACTIVATION & IMPROVED PERFORMANCE Rheology modifier for hybrid adhesives that cost CHALLENGE: effectively improves performance Thixatrol® AS8053 series - faster throughput, lower SOLUTION: tempera
Slide 14: Waterborne industrial additives
Waterborne industrial additives GROWTH PLATFORMS VALUE DRIVERS AND CUSTOMER IMPACT ELEMENTIS WATERBORNE TECHNOLOGY VS TRADITIONAL SOLVENT SYSTEMS $40m New business Performance Efficiency Sustainability pipeline Solvent like Faster production Lower VOCs performance with WB throughput technology Easie
Slide 15: Waterborne industrial additives
Waterborne industrial additives GROWTH PLATFORMS TECHNOLOGY IN ACTION THIXATROL® 5020W - WATERBORNE METALLIC COATINGS Waterborne technology that delivers improved flake CHALLENGE: orientation in coatings Thixatrol® 5020W - enhanced visual SOLUTION: appearance and sustainability 26% New space 500+ YT
Slide 16: Talc in coatings
Talc in coatings GROWTH PLATFORMS VALUE DRIVERS AND CUSTOMER IMPACT 1. Performance 2. Efficiency 3. Sustainability Ready to use slurry, Improved scrub & Enables VOC DECO >30% increase in stain resistance reduction efficiency Improved corrosion Enables VOC INDUSTRIAL Surface treated Talc resistance a
Slide 17: Talc in coatings
Talc in coatings GROWTH PLATFORMS $10-15M SYNERGY DELIVERY ON TRACK GLOBAL EXPANSION IN PROGRESS & MORE TO COME Increased geographic penetration - 13 new geographies - 60 new customers Increased customer penetration - 30% increase in ship to locations Encouraging momentum - $10m new business pipelin
Slide 18: Global key accounts
Global key accounts GLOBAL KEY ACCOUNTS DELIVERING CUSTOMER VALUE INCREASED CUSTOMER INTIMACY FOCUSED PROFITABLE GROWTH DEDICATED RESOURCES & STRUCTURE Global Key Accounts - Contribution margin (%) • Doubled NBO pipeline • Preferred supplier to world’s largest coatings 140 companies 120 INTEGRATED I
Slide 19: Global key accounts
Global key accounts CASE STUDY – LEADING GLOBAL ADHESIVE & SEALANTS PRODUCER GLOBAL KEY ACCOUNTS ADDED TO GKA FIRST JOINT INNOVATION ASIA SALES UP TALC UNDER 15% REVENUE GROWTH PROGRAMME PROJECT IN ASIA 25% IN H1 EVALUATION EXPECTED PRE 2018 Good EMEA relationship, 2018 2019 2020 2021 no presence 20
Slide 20: Geographic expansion
Geographic expansion GEOGRAPHIC EXPANSION INVIGORATING GROWTH IN UNDER-SERVED MARKETS SOUTH EAST ASIA – UNDERWEIGHT IN A GROWTH MARKET ACTIONS TO DRIVE IMPROVED FUTURE PERFORMANCE Large & high growth market PORTFOLIO - $100m addressable market Targeted product offering - Growing at 5-7% CAGR RESOURC
Slide 21: Margin improvement
Margin improvement CLEAR MEDIUM TERM ROADMAP ADJUSTED OPERATING PROFIT MARGIN 15.5% 14.6% H1 19 FX Volume Price/ Cost H1 20 Volume Price/ Cost Medium Mix savings Mix Term Note: Graph not drawn to scale Enhanced Performance Through Applied Innovation 21
Slide 22: Key messages
Key messages OVERVIEW 1 Coatings transformation complete Clear growth strategy – growth platforms, 2 global key accounts & geographic expansion Execution of CMD growth opportunities - 3 early successes Well positioned for growth & margin 4 improvement Enhanced Performance Through Applied Innovation