Element Solutions Inc. · NYSE:ESI
Element Solutions — Platform Specialty Products — Goldman Sachs Basic Materials Conference 2018
22 slides from Element Solutions's conference presentation, May 16, 2018
Slide 1: Goldman Sachs Basic Materials Conference
Goldman Sachs Basic Materials Conference May 16, 2018 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: EBITDA and adjusted EBITDA, adjusted EBITDA margin, adjusted EBITDA guidance, cash
Slide 4: Introduction to Platform
INTRODUCTION TO PLATFORM Global diversified specialty chemicals company focused on marketing-leading, high quality, and high cash-flow businesses 2017 Key Statistics 2017 Net Sales Breakdown By Segment By Geography ▪ Net Sales: $3,776M ▪ Adj. EBITDA*: $821M Asia EMEA 27% 33% Performance ▪ Adj. EBITD
Slide 5: Platform's Future Vision – Two Separate High-Quality Businesses
PLATFORM’S FUTURE VISION – TWO SEPARATE HIGH-QUALITY BUSINESSES ~$1.9bn+1 Global ~$1.9bn+1 Global Agricultural Chemical Business Specialty Chemical Business Key End- ▪ Specialty Crop Protection ▪ Bio Solutions ▪ Consumer Electronics ▪ Offshore Oil & Gas Markets ▪ Animal Health ▪ Automotive ▪ Distinc
Slide 6: Platform Q1 Results
PLATFORM Q1 RESULTS Constant Organic* ▪ Net sales grew 12% driven by organic Currency* growth in both Agricultural Solutions and ($ in millions) Q1 2018 Q1 2017 YoY% YoY% YoY% Performance Solutions o Strong contribution from LatAm, Net Sales $964 $862 12% 5% 5% particularly Brazil, and positive star
Slide 7: Full Year 2018 Guidance
FULL YEAR 2018 GUIDANCE Performance Solutions Agricultural Solutions ▪ Generally healthy end-markets driven by overall ▪ Expect modest growth in overall market in 2018 economic growth and secular trends supporting high- Market ▪ Tighter supply of active ingredients from China performance electronics
Slide 8: 2018 Priorities
2018 PRIORITIES Execution: Build on Operating Momentum and Continue to Drive Above Market Revenue Growth Manage Cost and Drive Margin Expansion through Synergies and Continuous Improvement Generate Free Cash Flow and Reduce Leverage Ensure a Successful Separation to Maximize Shareholder Value 8
Slide 9: Appendix
PLATFORM SPECIALTY PR UCTS CORPORATION rl APPENDIX
Slide 10: Performance Solutions Q1 Results
PERFORMANCE SOLUTIONS Q1 RESULTS ▪ Net sales increased by $45 million or 10% in 1Q18 due Net Sales ($M) primarily to FX tailwinds and organic growth in all major verticals 550 18 492 500 30 474 447 ▪ Organic sales* increased 4% in the quarter 450 (3) 400 o Industrial and Alpha growth continued in li
Slide 11: Agricultural Solutions Q1 Results
AGRICULTURAL SOLUTIONS Q1 RESULTS ▪ Net sales increased by $57 million or 14% in 1Q18 driven Net Sales ($M) by FX tailwinds primarily in the Euro and organic growth across geographies 500 26 472 446 450 31 ▪ Organic sales* increased 6% in the quarter 415 400 o Strong finish to the selling season in
Slide 12: Capital Structure
CAPITAL STRUCTURE $ millions Instrument Maturity Coupon 3/31/2018 Corporate Revolver 6/7/2020 $52 Term Loan B6 - USD 1,2 6/7/2023 L + 300 1,135 Term Loan B7 - USD 1 6/7/2020 L + 250 630 Term Loan C5 - EUR 1,2 6/7/2023 E + 275 739 Term Loan C6 - EUR 1 6/7/2020 E + 250 719 Other Secured Debt 19 Total
Slide 13: Reconciliation to Adjusted Share Counts
RECONCILIATION TO ADJUSTED SHARE COUNTS (in millions) Q1 2018 Q1 2017 Basic outstanding shares 288 286 Number of shares issuable upon conversion of PDH Common Stock 4 6 Number of shares issuable upon conversion of Series A Preferred Stock 2 2 Number of shares issuable upon vesting and exercise of St
Slide 14: Net Income Attributable to Common Stockholders Reconciliation to Adj. EBITDA
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS RECONCILIATION TO ADJ. EBITDA (Amounts in millions) Q1 2018 Q1 2017 Net income (loss) attributable to common stockholders $37 $(24) Add (subtract): Net income attributable to the non-controlling interests 1 1 Income tax expense 65 19 Interest exp
Slide 15: Net Loss Attributable to Common Stockholders Reconciliation to Adj. EBITDA
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS RECONCILIATION TO ADJ. EBITDA (Amounts in millions) FY 2017 FY 2016 FY 2015 FY 2014 Net loss attributable to common stockholders $(296) $(41) $(309) $(263) Add (subtract): Gain on amendment of Series B Convertible Preferred Stock — (33) — — Stock dividend
Slide 16: Segment Comparable Sales Reconciliation
SEGMENT COMPARABLE SALES RECONCILIATION Performance Solutions Agricultural Solutions (amounts in millions) 2015 2014 2015 2014 Net Sales $801 $755 $1,742 $88 Acquisitions: Alent 847 1,063 OM 142 172 Arysta 87 1,533 CAS 380 Agriphar 170 Comparable Sales $1,791 $1,990 $1,829 $2,171 16 Note: Totals may
Slide 17: Segment EBITDA Reconciliation
SEGMENT EBITDA RECONCILIATION Performance Solutions Agricultural Solutions Total (amounts in millions) 2017 2016 YoY% 2017 2016 YoY% 2017 2016 YoY% Adj. EBITDA $433 $401 8% $388 $368 5% $821 $769 7% Corporate allocations 31 33 31 33 $63 66 Adj. EBITDA ex-corp cost $464 $434 7% $420 $401 5% $884 $835
Slide 18: Segment Comparable EBITDA Reconciliation
SEGMENT COMPARABLE EBITDA RECONCILIATION 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 n/m Acquisitions: Alent 143 175 143 175 OM 28 30 28 30 Arysta 3 293 3 293 CAS 9
Slide 19: GAAP Diluted EPS Reconciliation to Adjusted Diluted EPS
GAAP DILUTED EARNINGS (LOSS) PER SHARE (EPS) RECONCILIATION TO ADJUSTED DILUTED EPS (amounts in millions, except per share amounts) Q1 2018 Q1 2017 GAAP diluted earnings (loss) per share $0.13 $(0.09) Weighted average shares outstanding 294 285 Net income (loss) attributable to common stockholders $
Slide 20: Quarterly Results Overview
QUARTERLY RESULTS OVERVIEW 2017 2018 (Amount in millions) Q1 Q2 Q3 Q4 Q1 Net Sales Performance Solutions $447 $462 $481 $489 $492 Agricultural Solutions 415 479 424 580 472 Total Net Sales $862 $941 $904 $1,069 $964 Adjusted EBITDA Performance Solutions $102 $103 $116 $112 $112 Agricultural Solution
Slide 21: Organic Sales Growth Reconciliation
ORGANIC SALES GROWTH RECONCILIATION Q1 2018 Organic Sales Growth Reported Net Impact of Constant Organic Sales Metals Acquisitions Sales Growth Currency Currency Growth Performance Solutions 10% (7)% 3% 1% —% 4% Agricultural Solutions 14% (7)% 6% —% —% 6% Total 12% (7)% 5% —% —% 5% FY 2017 Organic S
Slide 22: Non-GAAP Definitions
NON-GAAP DEFINITIONS Adjusted Earnings Per Share (EPS): Adjusted earnings per share is defined as net income (loss) attributable to common stockholders adjusted to reflect adjustments consistent with the Company’s definition of adjusted EBITDA. Additionally, the Company eliminates the amortization a
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