Element Solutions Inc. · NYSE:ESI
Element Solutions — CJS Securities 21st Annual New Ideas for the New Year Conference (January 2021)
18 slides from Element Solutions's conference presentation, Jan 13, 2021
Slide 1: CJS Securities 21st Annual New Ideas for the New Year Conference
CJS Securities 21st Annual New Ideas for the New Year Conference Element Solutions Overview January 1 2021
Slide 2: Legal Notices
Legal Notices 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 statement
Slide 3: Element Solutions Overview
Element Solutions Overview Chemical Technology Enabling Performance & Innovation $ 1.8B LTM Sep 2020 Net Sales ~ 4,400 Employees 2019 Segment Net Sales ■ Electronics 59% 2019 Regional Net Sales ■ Americas 29% Full Year 2020 Industrial & ■ Specialty 41% ■ EMEA 29% $ +415M Adj. EBITDA* Guidance > 50 C
Slide 4: 'New Economy' Growth Drivers Propelling Stable, High-Returning Business Model
‘New Economy’ Growth Drivers Propelling Stable, High-Returning Business Model Growth From New Economy Attractive Businesses Managed Efficiently ▪ Defensible margins and high returns on capital 5G Mobile Technologies ▪ Balancing cost management and long-term organic growth investments ▪ Deploying str
Slide 5: Profitable Growth from 5G Adoption
Profitable Growth from 5G Adoption Higher performance and reliability requirements for 5G technologies in both infrastructure and mobile devices 5G Mobile Devices – Annual Shipments (M Units) 5G Base Station – Annual Rollout (K Units) ~6,000 1,800 1,670 1,610 1,500 55% of 200 400 phones 1,000 ~5M so
Slide 6: Electronic Content Growth in Automotive
Electronic Content Growth in Automotive A leading provider of advanced circuitry, joining materials and surface finishing technology critical to the development of next-generation vehicles Enhancing safety systems to reach next level autonomy (cameras, radar and connectivity) High-strength Inverter
Slide 7: Advanced Semiconductor Application Growth
Advanced Semiconductor Application Growth Enabling semiconductor manufacturing with proprietary chemistries that support the design, formation and packaging of semiconductor chips ▪ “More Than Moore” blurs distinctions between semiconductor circuit pathways, chip packaging, printed circuit boards an
Slide 8: Circular Economy
Circular Economy Reducing our customers’ environmental footprint with a differentiated portfolio of metals reclaim, recycling capability, wastewater treatment equipment and chemistry solutions Other ESI Recycling Offerings ▪ Ability to provide solder materials with 100% recycled tin Combining intima
Slide 9: Making Chemistry Greener
Making Chemistry Greener Innovative solutions to meet sustainability challenges and rising environmental compliance standards globally Product Innovations & Key Benefits Direct ▪ Carbon-based metallization chemistries reduce power ✓ Metallization consumption by 57% and rinse water usage by 76% Reduc
Slide 10: Resilient, High Cash Flow Businesses Outperforming their Markets
Resilient, High Cash Flow Businesses Outperforming their Markets Steady Margins and Growing FCF* Efficiently Managed Asset Base 50% 42.9% $300 42.7% 40% $240+ 1.6% >80% $238 Capital Expenditures as a COGS as a variable cost 30% $198 % of 2019 Net Sales that flex with demand $200 20% 21.5% 22.7% 10%
Slide 11: Benchmarking Element Solutions in Specialty Chemicals
Benchmarking Element Solutions in Specialty Chemicals Cash Flow and Returns (Adj. EBITDA* – Capital Expenditures) / Net Sales (2019)1 21.1% ESI Peer 11 Peer 10 Peer 4 Peer 9 Peer 1 Peer 3 Peer 2 Peer 6 Peer 5 Peer 7 Peer 8 Adj. EBIT2 / Tangible Assets3 (%) 22.8% ESI Peer 10 Peer 7 Peer 11 Peer 9 Pee
Slide 12: Capital Allocation Progress & Priorities
Capital Allocation Progress & Priorities ESI has maintained a measured approach to capital allocation ▪ Repurchased 17% of total shares Acquisition outstanding since January 2019 Hurdle Rate ▪ Consider Available Risk-Adjusted Deployed ~$75 million on Acquisition Returns complementary acquisitions in
Slide 13: What to Expect from Element Solutions
What to Expect from Element Solutions Compound intrinsic value through strong execution across a portfolio of high-quality assets and prudent, long-term oriented capital allocation Long Term Financial Objectives ▪ Outperformance relative to end-markets ▪ Solid, stable profit margins and strong cash
Slide 14: Appendix
Appendix 14
Slide 15: Non-GAAP Definitions
Non-GAAP Definitions Adjusted Earnings Per Share (EPS): Adjusted EPS is a key metric used by management to measure operating performance and trends. In particular, the exclusion of certain expenses in calculating adjusted EPS facilitates operating performance comparisons on a period-to-period basis.
Slide 16: Net Income to Adj. EBITDA Reconciliation
Net Income Attributable to Common Stockholders to Adj. EBITDA Reconciliation Net Debt to Adj. EBITDA Ratio (Trailing Twelve Months) Reconciliation ($ millions) FY 2019 Sep YTD Q4 2019 LTM Q3 2020 2020 Net income attributable to common stockholders $92 $46 $74 $120 Add (subtract): Net income attribut
Slide 17: Free Cash Flow to Free Cash Flow on an Adjusted Basis Reconciliation
Free Cash Flow to Free Cash Flow on an Adjusted Basis Reconciliation ($ millions) FY 2018 FY 2019 Cash flows from operating activities ($1) $171 Capital expenditures (28) (30) Disposal of property, plant and equipment 4 5 Free cash flows (25) 146 Adjustments to arrive at free cash flows on an adjust
Slide 18: Organic Net Sales Growth Reconciliation
Organic Net Sales Growth Reconciliation Q1 Q2 Q3 Q4 2019 2020 2019 2020 2019 2020 2019 2020 Net Sales Growth (7%) (2%) (9%) (15%) (5%) 3% (5%) Impact of Currency 5% 2% 4% 2% 2% 0% 1% Constant Currency (2%) 0% (5%) (13%) (3%) 2% (4%) Change in Pass-Through Metals Pricing 0% 0% 0% 1% 1% (1%) 0% Acquis