Element Solutions Inc. · NYSE:ESI

Element Solutions — Platform Specialty Products — Q1 2016 Earnings Presentation

22 slides from Element Solutions's earnings presentation, May 9, 2016

  1. Slide 1: First Quarter 2016

    First Quarter 2016 May 9, 2016

  2. 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

  3. Slide 3: Q1 2016 Highlights

    Q1 2016 Highlights Results Pro Forma1 PF Constant Currency2 Organic3 ($ in millions) Q1 2016 Q1 2015 YoY% Q1 2016 Q1 2015 YoY% Q1 2016 Q1 2015 YoY% YoY% Revenue $824 $535 54% $824 $897 (8)% $873 $897 (3)% (1)% Adj. EBITDA 168 132 27% 168 178 (6)% 179 178 0% Adj. EBITDA Margin 20% 25% 20% 20% 21% 20%

  4. Slide 4: Performance Solutions Q1 Results

    Performance Solutions Q1 Results Pro Forma Pro Forma Constant Currency Organic ($ in millions) Q1 2016 Q1 2015 YoY% Q1 2016 Q1 2015 YoY% YoY% Revenue $420 $455 (8)% $437 $455 (4)% (2)% Adj. EBITDA 83 90 (7)% 87 90 (3)% Adj. EBITDA Margin 20% 20% 20% 20% Adj. EBITDA ex-corp costs 92 95 (3%) 96 95 1%

  5. Slide 5: Agricultural Solutions Q1 Results

    Agricultural Solutions Q1 Results Pro Forma Pro Forma Constant Currency Organic ($ in millions) Q1 2016 Q1 2015 YoY% Q1 2016 Q1 2015 YoY% YoY% Revenue $404 $442 (9)% $437 $442 (1)% 0% Adj. EBITDA 85 89 (4)% 92 89 3% Adj. EBITDA Margin 21% 20% 21% 20% Adj. EBITDA ex-corp costs 95 94 0% 101 94 7% Adj.

  6. Slide 6: Integration Update – Performance Solutions

    Integration Update – Performance Solutions Annual Run-Rate Realized Cost Synergies $ in millions $ in millions $80 $70 $25 $20 $60 $20 $15 $40 $21 $10 $12 $20 $3 $1 $9 $5 $2 $0 $0 YE 2015 Run Rate of Q1 End 2018 Target Impact of Q1 2016 Q1 2016 2016 Target New Actions Previous Actions Realized Actio

  7. Slide 7: Integration Update – Agricultural Solutions

    Integration Update – Agricultural Solutions Annual Run-Rate Realized Cost Synergies $ in millions $ in millions $100 $25 $80 $20 $80 $20 $57 $2 $59 $60 $15 $40 $10 $7 $1 $8 $20 $5 $0 $0 YE 2015 Run Rate of Q1 End 2017 Target Impact of Q1 2016 Q1 2016 2016 Target New Previous Actions Realized Actions

  8. Slide 8: Financial Performance

    PLATFORM SPECIALTY PRODUCTS CORPORATION ml Financial Performance

  9. Slide 9: Q1 Financial Overview

    Q1 Financial Overview Results Pro Forma PF Constant Currency Organic ($ in millions) Q1 Q1 2015 YoY% Q1 2016 Q1 2015 YoY% Q1 2016 Q1 2015 YoY% YoY% 2016 Revenue $824 $535 54% $824 $897 (8)% $873 $897 (3)% (1)% Adj. EBITDA 168 132 27% 168 178 (6)% 179 178 0% Adj. EBITDA Margin 20% 25% 20% 20% 21% 20%

  10. Slide 10: 1Q 2015 to 1Q 2016 Sales Bridge

    1Q 2015 to 1Q 2016 Sales Bridge Sales Bridge $ in millions 1,000 897 900 (8) 832 18 824 (8) 800 (49) (26) 700 442 404 404 600 Organic 500 sales decline 400 of 1% 300 455 428 420 200 100 0 1Q15 Pro Acquisitions / Metals FX Headwind 1Q15 Pricing Volume / Mix 1Q16 1 Forma Divestitures Comparable Perfor

  11. Slide 11: 1Q 2015 to 1Q 2016 Adjusted EBITDA Bridge

    1Q 2015 to 1Q 2016 Adjusted EBITDA Bridge Adjusted EBITDA1 Bridge $ in millions 200 178 180 11 3 168 (10) 17 160 (7) 140 89 (25) 85 120 ~Flat constant currency adjusted EBITDA 100 80 60 90 83 40 20 0 1Q15 Pro FX Translational FX Pricing Synergies Volume / Mix Increase in 1Q16 Forma Headwind Transact

  12. Slide 12: Capital Structure Overview

    Capital Structure Overview Capital Structure Maturity Profile $ millions 3,500 Series B Pfd. Instrument Maturity Coupon 3/31/16 3,000 Debt Corporate Revolver ($500M) 6/7/2019 $115 Term Loan – USD1 6/7/2020 L + 450 2,691 2,500 Term Loan – EUR1 6/7/2020 L + 450 663 2,000 $ millions Other Debt 54 Total

  13. Slide 13: Seasonality of Financial Performance

    Seasonality of Financial Performance % of Full Year Pro Forma Adj. EBITDA Key Drivers of 2016 vs 2015 Seasonality 1st Quarter • Q1‘15 was weakest USD in 2015-2016 horizon 2014 51% • Q1’15 Ag was buffeted by one-time sales (Ag revenue +11% constant currency YoY in Q1’15) • Offset in 2016 by full year

  14. Slide 14: Conclusions – 2016 Priorities

    Conclusions – 2016 Priorities Integration and Synergy Realization Focus Commercial Efforts on Fast Growing Niches Establish Operating Rhythm and Momentum Generate Free Cash Flow 14

  15. Slide 15: Appendix

    r PLATFORM SPECIALTY Va PR ODUCTS CORPORATION Appendix 15

  16. Slide 16: Covenant Overview

    Covenant Overview  Our capital structure is subject to only one quarterly Covenant EBITDA maintenance test - 6.25x First Lien Net Debt to PF adj. EBITDA LTM PF adj. EBITDA $733  Covenant EBITDA is defined as LTM PF adj. EBITDA plus synergies expected to be realized based on actions (+) Announced S

  17. Slide 17: Pro Forma Quarterly Segment Overview

    Pro Forma Quarterly Segment Overview 2014 2015 2016 (amounts in millions) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q Revenue Performance Solutions $480 $503 $517 $489 $455 $458 $448 $430 $420 Agricultural Solutions 486 596 510 579 442 494 418 476 $404 Total Revenue $966 $1,099 $1,027 $1,069 $897 $951 $866 $906 $824

  18. Slide 18: Foreign Exchange Overview

    Foreign Exchange Overview Pro Forma Platform • FX will remain a significant variable in 2016 Translational Currency Exposure1 USD ~30% • Revenue exposures are seasonal primarily EUR ~25% in the Ag businesses BRL ~12% CNY ~10% JPY ~5% Foreign Currency Indexed to U.S. Dollar 1Q15 2Q15 3Q15 4Q15 1Q15 2

  19. Slide 19: Organic Sales Reconciliation

    Organic Sales Reconciliation Performance Agricultural Total Solutions Solutions (amounts I n millions) Q1 2016 YoY% Q1 2016 YoY% Q1 2016 YoY% Change in net pro forma sales $(35) (7.7)% $(38) (8.6)% $(73) (8.2)% Partial period impacts / dispositions 3 0.6 5 1.2 8 0.9 Foreign exchange impacts 17 3.6 3

  20. Slide 20: Adjusted EBITDA Reconciliation to Net Loss Attributable to Common Stockholders

    Adjusted EBITDA Reconciliation to Net Loss Attributable to Common Stockholders (amounts in millions) Q1 2016 Q1 2015 Adj. EBITDA $168 $132 Adjustments to reconcile to net loss attributable to common stockholders: Interest expense, net (94) (39) Depreciation expense (18) (8) Amortization expense (64)

  21. Slide 21: Net Loss Reconciliation to Pro Forma Adj. Diluted EPS

    Net Loss Reconciliation to Pro Forma Adj. Diluted EPS (amounts in millions) Q1 2016 Q1 2015 Net loss attributable to common stockholders $(135) $(27) Pre-acquisition activity of acquired companies: Net Sales - 362 Cost of Sales - (220) Selling, technical, general and administrative expense - (105) R

  22. Slide 22: Non-GAAP Definitions

    Non-GAAP Definitions Pro Forma Sales: Pro forma sales is defined as sales adjusted for the sales of acquisition as if they had occurred on January 1, 2015. Management believes this measure provides investors with a more complete understanding of sales trends by providing sales on a more consistent b

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