Element Solutions Inc. · NYSE:ESI
Element Solutions — Platform Specialty Products — Q1 2018 Earnings Presentation
18 slides from Element Solutions's earnings presentation, May 3, 2018
Slide 1: First Quarter 2018
First Quarter 2018 May 3, 2018
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, adjusted EBITDA, adjusted EBITDA margin, adjusted EBITDA guidance, adjuste
Slide 4: 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 Net Sales $964 $862 12% 5% 5% o Strong contribution from LatAm, particularly Brazil, and positive star
Slide 5: Performance Solutions Q1 Results
Performance Solutions Q1 Results Net Sales ($mm) Net sales increased by $45 million or 10% in 1Q18 due primarily to FX tailwinds and organic growth in all major verticals 550 492 500 447 30 474 18 Organic sales* increased 4% in the quarter 450 (3) 400 o Industrial and Alpha growth continued in l
Slide 6: Agricultural Solutions Q1 Results
Agricultural Solutions Q1 Results Net Sales ($mm) Net sales increased by $57 million or 14% in 1Q18 driven by FX tailwinds primarily in the Euro and organic growth across geographies 500 26 472 450 31 446 Organic sales* increased 6% in the quarter 415 400 o Strong finish to the selling season in
Slide 7: Balance Sheet & Cash Flow Considerations
Balance Sheet & Cash Flow Considerations Key Cash Flow Items Balance Sheet Management Q1 working capital driven by Ag’s normal seasonal patterns Net debt increased modestly primarily due to seasonal working capital investments and Euro FX translation o Phasing and geographic mix of Q1 sales (str
Slide 8: Separation Update
Separation Update Continued progress against 2018 separation objectives Operational separation complete Arysta has begun hiring to fill necessary organizational roles Transaction-related workstreams executing against action plan to establish separate capital structures for Arysta and Platfor
Slide 9: Full Year 2018 Guidance – Q1 Update
Full Year 2018 Guidance – Q1 Update 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
Slide 10: 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 10
Slide 11: Appendix
PLATFORM SPECIALTY PR UCTS CORPORATION rl Appendix a1
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 (Loss) Attributable to Common Stockholders Reconciliation to Adjusted EBITDA
Net Income (Loss) Attributable to Common Stockholders Reconciliation to Adjusted 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
Slide 15: 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 16: 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 17: 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% 17 Note: Totals m
Slide 18: 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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