Eastman Kodak Company · NYSE:KODK
Eastman Kodak — Q4 2017 Earnings Presentation
29 slides from Eastman Kodak's earnings presentation, Mar 15, 2018
Slide 1: Fourth Quarter 2017 Earnings Call
Fourth Quarter 2017 Earnings Call March 15, 2018
Slide 2: Cautionary Statement Regarding Forward-looking Statements
Cautionary Statement Regarding Forward-looking Statements Pursuant to Safe Harbor Provisions of The Private Securities Litigation Reform Act of 1995 Cautionary Statement Regarding Forward-Looking Statements This presentation includes “forward-looking statements” as that term is defined under the Pri
Slide 3: Agenda
Agenda Introduction Bill Love, Treasurer and - First line bullet point First line bullet point Investor Relations - Second line bullet point First line bullet point - CEO Third linePerspective on Full bullet point First line bullet pointJeff Clarke, Chief Executive - Yearline Fourth 2017 Results
Slide 4: CEO Perspective
Welcome 2017 Achievements and Actions Full Year 2017 Results Division Overview 2018 Guidance CEO PERSPECTIVE 4
Slide 5: 2017 Achievements and Actions
2017 Achievements and Actions Strong performance in Flexographic Packaging Division: Volume for KODAK FLEXCEL NX plates grew by 17 percent Operational EBITDA improved by 21 percent Well positioned for continued double-digit growth in 2018 in both Revenue and EBITDA Achieved profitability i
Slide 6: FY 2017 Financial Summary by Division
FY 2017 Financial Summary by Division ($ millions) FY 2017 Actuals PSD EISD FPD SSD CFD AM3D EBPD Total EK Revenue $ 942 $ 144 $ 145 $ 85 $ 198 $ 1 $ 16 $ 1,531 Operational EBITDA (1) $ 58 $ 5 $ 31 $ 1 $ (16) $ (26) $ 4 $ 57 FY 2016 Actuals PSD EISD FPD SSD CFD AM3D EBPD Total EK Revenue $ 1,018 $ 1
Slide 7: Print Systems Division
Print Systems Division Operational ($ mi l l i ons ) Revenue EBITDA FY 2016 Actual $1,018 $ 106 Aluminum Cost Impact (12) Plate Price (28) (28) Processed Plate Volume (40) (8) Sonora (Process Free) Plate Volume 26 6 Impact of Foreign Exchange 5 2 All Other (CTP/EPS/Other) (39) (8) FY 2017 Actual $94
Slide 8: Enterprise Inkjet Solutions Division
Enterprise Inkjet Solutions Division Operational ($ mi l l i ons ) Revenue EBITDA FY 2016 Actual $166 $ (16) PROSPER Annuities 6 - PROSPER Press and Component Volume (23) - Operating Cost Improvements 20 ULTRASTREAM investment (4) Impact of Foreign Exchange (1) (1) All Other (4) 6 FY 2017 Actual $14
Slide 9: Flexographic Packaging Division
Flexographic Packaging Division Operational ($ mi l l i ons ) Revenue EBITDA FY 2016 Actual $132 $24 FLEXCEL NX CTP and Plates 13 8 Other Packaging Products (1) - OPEX Investment (3) Impact of Foreign Exchange 1 2 FY 2017 Actual $145 $31 Volume for KODAK FLEXCEL NX plates grew by 17 percent Cont
Slide 10: Consumer and Film Division
Consumer and Film Division Operational ($ mi l l i ons ) Revenue EBITDA FY 2016 Actual $221 $16 Consumer Inkjet (17) (12) Industrial Film & Chemicals (12) (15) Motion Picture (2) (6) Film component supplier transition impact (6) Brand Licensing & Consumer Products 8 7 FY 2017 Actual $198 ($16) Exp
Slide 11: 2018 Operational EBITDA Guidance
2018 Operational EBITDA Guidance 2017 Full Year 2018 Full Year % ($ millions ) Actual Guidance Improvement Revenue $1,531 $1,500 - $1,600 Operational EBITDA $57 Pension Accounting Change ($8) Operational EBITDA Excluding Pension Accounting Change $49 $60 - $70 22% - 43% Impact of Foreign Exchange $6
Slide 12: 2018 Divisional Outlook
2018 Divisional Outlook PSD • Growth for SONORA and introduction of SONORA X • Plate price actions and manufacturing cost improvements to mitigate the impact of higher aluminum costs EISD • Growth in PROSPER annuities and investment in ULTRASTREAM. • VERSAMARK annuities continue to decline FPD
Slide 13: Financial Overview
FINANCIAL OVERVIEW Net Earnings 2017 Fourth Quarter Results Cost Update Year Over Year Cash Bridge (GAAP) 2018 Cash Outlook 13
Slide 14: 2017 Fourth Quarter and Full Year Net Earnings
2017 Fourth Quarter and Full Year Net Earnings ($ millions) Three Months Ended December 31, 2017 Twelve Months Ended December 31, 2017 2017 2016 2017 2016 Earnings (loss) from continuing operations before income taxes $ 24 $ 28 $ (13) $ 51 (Benefit) Provision for income taxes (104) 17 (110) 33 Equit
Slide 15: Q4 2017 Financial Summary by Division
Q4 2017 Financial Summary by Division ($ millions) Q4 2017 Actuals PSD EISD FPD SSD CFD AM3D EBPD Total EK Revenue $ 261 $ 39 $ 41 $ 21 $ 47 $ 1 $ 4 $ 414 Operational EBITDA (1) $ 16 $ 3 $ 10 $ 1 $ (6) $ (5) $ 1 $ 20 Q4 2016 Actuals PSD EISD FPD SSD CFD AM3D EBPD Total EK Revenue $ 279 $ 43 $ 34 $ 2
Slide 16: Cost Update
Cost Update In the fourth quarter we accelerated our cost actions across the company to reduce approximately 425 positions and save approximately $45 million on a run-rate basis As of February 2018: • 260 positions have been eliminated with an annual cost savings of $20 million • Actions have be
Slide 17: 2017 YTD Cash Flow
2017 YTD Cash Flow Twelve Months Ended December 31, 2017 2017 2016 Change ($ Millions) Primary Drivers of Cash: Cash from Operations: Net earnings $ 94 $ 16 $ 78 Depreciation and amortization 80 105 (25) Pension and other postretirement income (119) (147) 28 Change in fair value of embedded conversi
Slide 18: 2018 Cash Outlook
2018 Cash Outlook Cash (Use) / ($ mi l l i ons ) Generation Operational EBITDA $60 - $70 Legacy Payments (47) Legacy items reflected in Operational EBITDA 29 Net Legacy Payments (18) Capital Expenditures (35) Cash Paid for Taxes, Net (13) Restructuring Payments (13) Proceeds from Asset Sales 17 Work
Slide 19: Opportunities and Risks
Opportunities and Risks Opportunities: SONORA X plate volumes – accelerated customer adoption Aluminum cost FLEXCEL NX plate volume Brand Licensing pipeline conversion Working capital Monetization of assets Strategic transactions Risks: Further slowdown in commercial printing industr
Slide 20: Q&A
Q&A 20
Slide 21: Concluding Remarks
CONCLUDING REMARKS 21
Slide 22: Appendix
APPENDIX 22
Slide 23: Non-GAAP Measures
Non-GAAP Measures In this fourth quarter and full year earnings presentation, reference is made to the following non-GAAP financial measures: • Operational EBITDA; • Operational EBITDA and Revenues on a constant currency basis; • Operational EBITDA excluding the amortization of prior service credit
Slide 24: Non-GAAP Measures
Non-GAAP Measures The following table reconciles the most directly comparable GAAP measure of Net Earnings Attributable to Eastman Kodak Company to Operational EBITDA and Operational EBITDA on a constant currency basis for the twelve months ended December 31, 2017 and 2016, respectively: (in million
Slide 25: Non-GAAP Measures
Non-GAAP Measures The following table reconciles the most directly comparable GAAP measure of Net Earnings Attributable to Eastman Kodak Company to Operational EBITDA and Operational EBITDA on a constant currency basis for the three months ended December 31, 2017 and 2016, respectively: (in millions
Slide 26: Non-GAAP Measures
Non-GAAP Measures The following table reconciles the most directly comparable GAAP measure of Net Earnings Attributable to Eastman Kodak Company to Operational EBITDA excluding the amortization of prior service credit component of pension income for the twelve months ended December 31, 2017: (in mil
Slide 27: Non-GAAP Measures
Non-GAAP Measures Footnote Explanations: (1) As reported in the Consolidated Statement of Operations. (2) RED utilities variable interest entity, which was deconsolidated on December 31, 2016 (interest and depreciation of RED are included in the respective lines in the table). (3) Composed of intere
Slide 28: Aluminum Price (LME): 1/1/11 – 2/28/18
ALUMINUM PRICE (LME): 1/1/11 – 2/28/18 LME Cash in EURO/MT 2,000 1,900 1,800 1,700 1,600 1,500 1,400 1,300 1,200 28
Slide 29: Thank You
i < Thank You
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