Eastman Chemical Company · NYSE:EMN
Eastman Chemical — Q2 2020 Earnings Presentation
13 slides from Eastman Chemical's earnings presentation, Aug 3, 2020
Slide 1: Second-Quarter 2020 Financial Results
Second-Quarter 2020 Financial Results Mark Costa, Board Chair & CEO Willie McLain, SVP & CFO August 3, 2020
Slide 2: Prepared Remarks; Forward-looking statements; GAAP and Non-GAAP financial measures
Prepared Remarks These slides should be reviewed with the accompanying prepared remarks posted on our website. Forward-looking statements During this presentation, we make certain forward-looking statements concerning plans and expectations for Eastman Chemical Company. We caution you that actual ev
Slide 3: Update on Eastman response to COVID-19
Update on Eastman response to COVID-19 Employees Community Customers ▪ Focus on health and ▪ Eastman ▪ No disruption in safety, maintaining Foundation supply of vital operational integrity contributing to products to of global COVID-19 response customers around manufacturing and recovery in the worl
Slide 4: Second-quarter 2020 highlights
Second-quarter 2020 highlights First half free cash flow nearly the best in company’s history Innovation and end market diversification is providing resilience Launch of Tritan™ Renew, leveraging our position as a leader in the circular economy Increasing actions to structurally reduce costs by >$20
Slide 5: Diverse end markets mitigate impact of COVID-19
Diverse end markets mitigate impact of COVID-19 Volume change by month (2020 vs 2019) 30% Resilient Mixed Impact Over Time Most Impacted ▪ Second-quarter sequential volume 20% declined as expected: 10% • Most impacted down ~(40%) • Mixed impact over time 0% down ~(15%) -10% • Resilient relatively fl
Slide 6: Sustainability without compromise
Sustainability without compromise • Introduced to the market in second quarter 2020 • Enabled by Eastman’s Advanced Circular Recycling technologies, which have a significantly lower carbon footprint • Carbon Renewal Technology (CRT) • Polyester Renewal Technology (PRT) • Same durability, performance
Slide 7: 2Q 2020 financial results – Corporate
2Q 2020 financial results – Corporate Year over year Sequential $2,363 2Q20 2Q19 2Q20 1Q20 $2,241 ($ in millions, ($ in millions, $1,924 except EPS) $1,924 except EPS) $389 $382 (19)% (14)% change $1.99 $2.03 (13)% volume/mix effect change (5)% price effect (12)% volume/mix effect (1)% FX effect $19
Slide 8: Balance sheet and cash generation are sources of strength
Balance sheet and cash generation are sources of strength Balance sheet Cash generation ▪ On track to reduce net debt by ▪ Maximizing cash generation remains >$600 million in 2020 the top financial priority in 2020 ▪ Repaid $400 million revolving credit ▪ Free cash flow of $411 million in 1H20, faci
Slide 9: On track to reduce 2020 costs by ~$150 million in response to financial impact of COVID-19
On track to reduce 2020 costs by ~$150 million in response to financial impact of COVID-19 Adjusted operations to end-market demand for Eastman products Significantly reduced discretionary spending • Travel & entertainment, professional fees, and other external services Have deferred some asset turn
Slide 10: 2020 outlook
2020 outlook ▪ Eastman team doing an outstanding job navigating a challenging global business environment ▪ Continue to benefit from diverse end markets and innovation that leverage strong customer engagement ▪ Seeing signs of recovery in certain end markets: auto, tires, building & construction, co
Slide 11: Significant progress building innovation and commercial capabilities
Significant progress building innovation and commercial capabilities Success with new Business Operating Model • Phase 2 of journey to strengthen enterprise-wide alignment and accelerate execution of innovation-driven growth strategies Continuing investment in digitization • CRM investment enhancing
Slide 12: Taking additional actions to improve competitiveness and increase value creation
Taking additional actions to improve competitiveness and increase value creation ▪ Operations transformation • Supply chain optimization • Manufacturing and maintenance efficiencies and capabilities ▪ Site optimization • Discontinuation of certain product lines at Singapore manufacturing site • Clos
Slide 13: Actions and proven innovation-driven growth model key to how Eastman wins as economic growth returns
Actions and proven innovation-driven growth model key to how Eastman wins as economic growth returns World-Class Differentiated Relentlessly Technology Application Engage Platforms Development the Market Significant integration and scale enable innovation, reliability and cost advantage Advantaged g
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