Element Solutions Inc. · NYSE:ESI
Element Solutions — Bank of America 2021 Global Agricultural and Materials Conference
20 slides from Element Solutions's conference presentation, Mar 1, 2021
Slide 1: Bank of America 2021 Global Agricultural and Materials Conference
Bank of America 2021 Global Agricultural and Materials Conference Element Solutions Overview March 1 2021
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: Element Solutions Overview
Element Solutions Overview Chemical Technology Enabling Performance & Innovation $ 1,854M 2020 Net Sales ~ 4,400 Employees 2020 Segment Net Sales ■ Electronics 63% 2020 Regional Net Sales ■ Americas 30% Industrial & ■ Specialty 37% ■ EMEA 27% $ 423M 2020 Adj. EBITDA* > 50 Countries ■ Asia 43% Hydrau
Slide 4: Full Year 2020 Highlights
Full Year 2020 Highlights ✔ ✔ Operational Excellence & Prudent Capital Allocation In the context of a significant COVID-19 impact… 9% 2% Strategic acquisition of DMP launching new sustainability platform for wastewater treatment and recycling systems Growth in Constant currency Adj. EPS* adj. EBITDA
Slide 5: 'New Economy' Growth Drivers Propelling Stable, High-Returning Business Model
‘New Economy’ Growth Drivers Propelling Stable, High- Returning Business Model Growth From New Economy Attractive Businesses Managed Efficiently ▪ Defensible margins and high returns on capital 5G Mobile Technologies ▪ Balancing cost management and long-term organic growth investments ▪ Deploying st
Slide 6: Profitable Growth from 5G Adoption
Profitable Growth from 5G Adoption Higher performance and reliability requirements for 5G technologies drives opportunities in circuitry and advanced semiconductor applications 5G Mobile Devices – Annual Shipments (M Units) Wafer Plating Chemistries Advanced Packaging 1,800 1,670 1,610 1,500 IC Subs
Slide 7: Electronic Content Growth in Automotive
Electronic Content Growth in Automotive A leading provider of advanced circuitry, joining materials and surface finishing technology critical to the development of next-generation vehicles Enhancing safety systems to reach next level autonomy (cameras, radar and connectivity) High-strength Inverter
Slide 8: Sustainable Chemistry
Sustainable Chemistry Enabling Green Chemistry and the Circular Economy Innovative solutions to meet sustainability challenges and rising environmental compliance standards globally Sustainable Technology Offerings ▪ Reducing our customers’ environmental footprint with a differentiated portfolio of
Slide 9: Resilient, High Cash Flow Businesses Outperforming their Markets
Resilient, High Cash Flow Businesses Outperforming their Markets Steady Margins and Growing FCF* Efficiently Managed Asset Base 50% 42.9% $300 42.7% 42.4% 40% $238 $249 1.6% >80% 30% Capital Expenditures as a COGS as a variable cost $198 % of 2020 Net Sales that flex with demand $200 20% 21.5% 22.7%
Slide 10: Benchmarking Element Solutions in Specialty Chemicals
Benchmarking Element Solutions in Specialty Chemicals Cash Flow and Returns (Adj. EBITDA* – Capital Expenditures) / Net Sales (2020)1 21.3% ESI Peer 11 Peer 10 Peer 2 Peer 1 Peer 3 Peer 4 Peer 9 Peer 6 Peer 5 Peer 8 Peer 7 Adj. EBIT2 / Tangible Assets3 (%) 22.1% ESI Peer 10 Peer 11 Peer 2 Peer 9 Pee
Slide 11: Capital Allocation Progress & Priorities
Capital Allocation Progress & Priorities ESI maintains a measured approach to capital allocation ▪ Repurchased 5.7 million shares in 2020 at Acquisition average price of $9.74 per share Hurdle Rate ▪ Consider Available Risk-Adjusted Deployed ~$75 million on complementary Acquisition Returns acquisit
Slide 12: What to Expect from Element Solutions
What to Expect from Element Solutions Compound intrinsic value through strong execution across a portfolio of high-quality assets and prudent, long-term oriented capital allocation Long Term Financial Objectives ▪ Outperformance relative to end-markets ▪ Solid, stable profit margins and strong cash
Slide 13: Appendix
Appendix 13
Slide 14: Non-GAAP Definitions
Non-GAAP Definitions Adjusted Earnings Per Share (EPS): Adjusted EPS is a key metric used by management to measure operating performance and trends. In particular, the exclusion of certain expenses in calculating adjusted EPS facilitates operating performance comparisons on a period-to-period basis.
Slide 15: Reconciliation to Adjusted Share Counts
Reconciliation to Adjusted Share Counts (amounts in millions) FY 2020 FY 2019 Q4 2020 Q4 2019 (Average) (Average) Basic outstanding common shares 247 250 248 254 Number of shares issuable upon conversion of Series A Preferred Stock - 2 - 2 Number of shares issuable upon vesting of granted Equity Awa
Slide 16: GAAP Net Income Reconciliation to Adjusted Diluted EPS
GAAP Net Income Reconciliation to Adjusted Diluted EPS ($ millions, except per share amounts) Q4 2020 Q4 2019 FY 2020 FY 2019 Net income attributable to common stockholders $30 $74 $76 $92 Net income (loss) from discontinued operations attributable to common stockholders — 0 (1) 13 Net income from c
Slide 17: Net Income Reconciliation to Adj. EBITDA (2020)
Net Income Attributable to Common Stockholders Reconciliation to Adj. EBITDA ($ millions) Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Net income attributable to common stockholders $9 $1 $36 $30 $76 Add (subtract): (Income) loss from discontinued operations, net of tax (0) 1 0 — 1 Income tax expense (be
Slide 18: Net Income (Loss) Reconciliation to Adj. EBITDA (2019)
Net Income (Loss) Attributable to Common Stockholders Reconciliation to Adj. EBITDA ($ millions) Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2019 Net income (loss) attributable to common stockholders $23 $2 $(7) $74 $92 Add (subtract): Net income (loss) attributable to the non-controlling interests 1 (0) — 0
Slide 19: Free Cash Flow to Free Cash Flow on an Adjusted Basis Reconciliation
Free Cash Flow to Free Cash Flow on an Adjusted Basis Reconciliation (dollars in millions) FY 2018 FY 2019 FY 2020 Cash flows from operating activities $ (1) $ 171 $ 276 Capital expenditures (28) (30) (29) Disposal of property, plant and equipment 4 5 2 Free cash flows $ (25) $ 146 $ 249 Adjustments
Slide 20: Organic Net Sales Growth Reconciliation
Organic Net Sales Growth Reconciliation Q1 Q2 Q3 Q4 2019 2020 2019 2020 2019 2020 2019 2020 Net Sales Growth (7%) (2%) (9%) (15%) (5%) 3% (5%) 18% Impact of Currency 5% 2% 4% 2% 2% 0% 1% (2%) Constant Currency (2%) 0% (5%) (13%) (3%) 2% (4%) 16% Change in Pass-Through Metals Pricing 0% 0% 0% 1% 1% (
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