Slide 1: PolyOne Investor Presentation
PolyOne Investor Presentation Goldman Sachs Basic Materials Conference May 21, 2014
Slide 2: Forward-Looking Statements
Forward – Looking Statements • In this presentation, statements that are not reported financial results or other historical information are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give current expectations or
Slide 3: Use of Non-GAAP Measures
Use of Non-GAAP Measures • This presentation includes the use of both GAAP (generally accepted accounting principles) and non-GAAP financial measures. The non-GAAP financial measures include: adjusted EPS, earnings before interest, tax, depreciation and amortization (EBITDA), adjusted EBITDA, net de
Slide 4: PolyOne Commodity to Specialty Transformation
PolyOne Commodity to Specialty Transformation 2000-2005 2006 - 2009 2010 – 2014 2015 and beyond • Continue specialty • 18 consecutive transformation quarters of double- • Steve Newlin digit adjusted EPS • Targeting $2.50 appointed, Chairman, • Volume driven, growth Adjusted EPS by 2015, President an
Slide 5: PolyOne At A Glance
PolyOne At A Glance 2013 Revenues: $3.8 Billion 2013 Revenues: $3.8 Billion Latin Canada America Asia Europe 7% 6% 6% Distribution 14% 28% PP&S Specialty United 18% 54% States 67% End Markets Specialty Operating Income HealthCare Electronics & $200 $195 11% Appliance Electrical Consumer 6% 5% 10% $1
Slide 6: Mix Shift Highlights Specialty Transformation
Mix Shift Highlights Specialty Transformation Old 2015 PolyOne Transformation Target 100% % of Operating Income* 80% 60% 40% 65-75% 62% 64% 43% 34% 20% 0% 2% 2005 2008 2010 2013 Q1 2014 2015 Specialty OI $5M $46M $87M $195M $60M Target JV's Performance Products & Solutions Distribution Specialty *Op
Slide 7: Confirmation of Our Strategy
Confirmation of Our Strategy Specialization Globalization Operational Commercial Excellence Excellence The World’s Premier Provider of Specialized Polymer Materials, Services and Solutions Page 7
Slide 8: Strategy and Execution Drive Results
Strategy and Execution Drive Results EPS Share Price vs. S&P 500 $1.31 550.00% All time high of 450.00% $39.55 May 13th, 2014 $1.00 350.00% $0.82 250.00% $0.68 150.00% 50.00% $0.27 $0.21 -50.00% $0.12 $0.13 -150.00% '06 '07 '08 '09 '10 '11 '12 '13 PolyOne S&P 500 ‘06-‘13 EPS CAGR = 41% Page 8
Slide 9: Proof of Performance & 2015 Goals
Proof of Performance & 2015 Goals 2006 Q1 2014 2015 “Where we were” “Where we are” Target 1) Operating Income % Specialty: Global Color, Additives & Inks 1.7% 13.8% 12 – 16% Global Specialty Engineered Materials 1.1% 11.6% 12 – 16% Designed Structures & Solutions -- 6.5% 8 – 10% Performance Products
Slide 10: Bridge to $2.50 Adjusted EPS by 2015
Bridge to $2.50 Adjusted EPS by 2015 2015 EPS: $2.50 Accelerated Innovation Several Levers to & Mix Improvement Drive Growth Ongoing LSS Programs (50-100 bps/yr) Incremental share buybacks Mergers & Acquisitions Spartech Accretion Continued Gross Margin Expansion Mid single digit revenue CAGR 2013 E
Slide 11: Innovation Drives Earnings Growth
Innovation Drives Earnings Growth Research & Development Specialty Platform Specialty Platform Spending Vitality Index Progression* Gross Margin % ($ millions) 30.7% 43.0% $53 19.5% 14.3% $20 2006 2013 2006 2013 2006 2013 *Percentage of Specialty Platform revenue from products introduced in last fiv
Slide 12: Unique and Innovative Solutions
Unique and Innovative Solutions Healthcare Packaging and Additive Technology Consumer Transportation Page 12
Slide 13: Debt Maturities & Pension Funding – 3/31/14
Debt Maturities & Pension Funding – 3/31/14 $800 Debt Maturities Pension Funding** As of March 31, 2014 As of March 31, 2014 100% $700 ($ millions) 100% $600 90% $600 80% $500 70% $400 60% 60% $317 $300 50% $200 40% $100 30% $48 $0 20% 2015 2020 2023 2008 2014 Coupon Rates: 7.500% 7.375% 5.250% Net
Slide 14: Free Cash Flow and Strong Balance Sheet Fund Investment / Shareholder Return
Free Cash Flow and Strong Balance Sheet Fund Investment / Shareholder Return Expanding our sales, marketing, and Repurchased 1.4 million shares in Q1 technical capabilities 2014 Investing in operational and Repurchased 6.4 million shares LSS initiatives (including since April 2013 synergy ca
Slide 15: Why Invest In PolyOne?
Why Invest In PolyOne? Strong past performance demonstrates that our strategy and execution are working Megatrends and emerging opportunities align with our strengths Innovation and services provide differentiation, incremental pricing power, and competitive advantage Strong and proven manag
Slide 16: Schedule I Reconciliation of Non-GAAP Financial Measures
Schedule I Reconciliation of Non-GAAP Financial Measures (Unaudited) (Dollars in millions, except per share data) Below is a reconciliation of non-GAAP financial measures to the most directly comparable measures calculated and presented in accordance with U.S. GAAP. Senior management uses adjusted o