Slide 1: Third Quarter 2019 Earnings Presentation
Third Quarter 2019 Earnings Presentation November 1 2019
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: Third Quarter 2019 Financial Results
Third Quarter 2019 Financial Results Continuing Operations Constant ▪ Organic net sales* declined 2%, driven primarily by Currency* Organic* lower global automotive production and a continued slowdown in broader industrial end-markets ($ in millions) Q3 2019 Q3 2018 YoY YoY YoY o Circuitry was appro
Slide 4: Third Quarter 2019 Segment Details
Third Quarter 2019 Segment Details Market Commentary Electronics Net Sales ($ in millions) ▪ Persisting demand softness in major end-markets 292 0% 280 ▪ Assembly: pressure from trade tensions affecting mid to (2%) (1%) (1%) (1%) small scale customers; stable year-over-year demand from large OEM cus
Slide 5: Balance Sheet and Cash Flow Considerations
Balance Sheet and Cash Flow Considerations Continuing Operations Key Cash Flow Items Balance Sheet Management ▪ Q3 2019 free cash flow* from continuing operations of $80 million ▪ Net debt to adj. EBITDA ratio* of 3.3x on a trailing twelve month basis as of September 30, 2019 ▪ Q3 2019 YTD free cash
Slide 6: Full Year 2019 Financial Guidance
Full Year 2019 Financial Guidance Q3 2019 Update Electronics Industrial & Specialty ▪ Expect overall market to return to 1H 2019 demand ▪ Persisting pressure expected from trade tensions and levels slowdown in global industrial manufacturing, impacting all verticals ▪ Lower sequential and year-over-
Slide 7: 2019 Priorities
2019 Priorities Successful Launch of Element Solutions Delivery of Financial Commitments and Strategic Initiatives Compelling Free Cash Flow Growth Capital Allocation to Compound Long-Term Shareholder Value 7
Slide 8: Appendix
Appendix 8
Slide 9: Capital Structure
Capital Structure ($ millions) Instrument Maturity Coupon 9/30/2019 Corporate Revolver 1/31/2024 LIBOR plus 2.25% $— First Lien Credit Facility - USD Term Loans1 1/31/2026 LIBOR plus 2.25% 744 Other Secured Debt 1 Total First Lien Debt $745 Senior Notes due 2025 12/1/2025 5.875% 800 Total Unsecured
Slide 10: Reconciliation to Adjusted Share Counts
Reconciliation to Adjusted Share Counts (amounts in millions) Q3 2019 Q3 2018 Common shares outstanding 251 288 Number of shares issuable upon conversion of PDH Common Stock — 4 Number of shares issuable upon conversion of Series A Preferred Stock 2 2 Number of shares issuable upon vesting of grante
Slide 11: Net Loss Reconciliation to Adj. EBITDA (Continuing Operations)
Net Loss Attributable to Common Stockholders Reconciliation to Adj. EBITDA (Continuing Operations) ($ millions) Q3 2019 Q3 2018 Net loss attributable to common stockholders $(7) $(409) Add (subtract): Net income attributable to the non-controlling interests — 3 Loss from discontinued operations, net
Slide 12: Net Debt to Adj. EBITDA Ratio Reconciliation on a Trailing Twelve Month Basis
Net Debt to Adj. EBITDA Ratio Reconciliation on a Trailing Twelve Month Basis (Continuing Operations) ($ millions) YTD 2019 Q4 2018 LTM Q3 2019 Net income attributable to common stockholders $18 $35 $53 Add (subtract): Net income attributable to the non-controlling interests 1 1 2 Income from discon
Slide 13: GAAP Net Loss Reconciliation to Adjusted Diluted EPS
GAAP Net Loss Reconciliation to Adjusted Diluted EPS (Continuing Operations) ($ millions, except per share amounts) Q3 2019 Q3 2018 Net loss attributable to common stockholders $(7) $(409) Net loss from discontinued operations attributable to common stockholders (1) (403) Net loss from continuing op
Slide 14: Organic Net Sales Growth Reconciliation
Organic Net Sales Growth Reconciliation (Continuing Operations) Three Months Ended September 30, 2019 Change in Pass- Reported Net Impact of Constant Organic Net Sales Through Metals Acquisitions Sales Growth Currency Currency Growth Pricing Electronics (4)% 2% (2)% 1% —% (1)% Industrial & Specialty
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.