Cytec Industries — Investor Day (November 2013)
95 slides from Cytec Industries's investor day presentation, Nov 22, 2013
Slide 1: Cytec 2013 Investor Day
Exhibit 99.1 CYTEC DELIVERING TECHNOLOGY BEYOND OUR CUSTOMERS’ IMAGINATION TM 2013 Investor Day
Slide 2: Welcome and Agenda
CYTEC DELIVERING TECHNOLOGY BEYOND OUR CUSTOMERS’ IMAGINATION TM Jodi Allen Director Investor Relations Welcome and Agenda
Slide 3: Forward Looking Statements
Forward Looking Statements During the course of this meeting we may make forward-looking statements. All statements that address expectations or projections about the future are forward-looking statements. Some of these statements include words such as “expects”, “anticipates,” “plans,” “intends,” “
Slide 4: Agenda
Agenda 9:00am Welcome and Agenda 10:00am Industrial Materials Jodi Allen William Avrin Director Vice President Investor Relations Corporate & Business Development 9:15am Strategic Overview 10:35am Specialty Chemicals Shane Fleming Michael Radossich Chairman, President & President Chief Executive Off
Slide 5: Strategic Overview
CYTEC DELIVERING TECHNOLOGY BEYOND OUR CUSTOMERS’ IMAGINATION TM Shane Fleming Chairman, President & Chief Executive Officer Strategic Overview
Slide 6: Growth Strategy Focused on Long-Term Value Creation
Growth Strategy Focused on Long-Term Value Creation Refocused portfolio on growth strategy Centered on secular growth in attractive end markets Winning share with differentiated technology offerings Common approach to development and commercialization Accelerating growth and strengthening Cytec thro
Slide 7: Portfolio Evolution Refocused on Growth Strategy: 2008
Portfolio Evolution Refocused on Growth Strategy Cytec Portfolio: 2008 30% 25% Materials 20% Profit 15% In Process Separation Additive Technologie 10% Cytec Operating 5% 0% Building Block Chemicals Coatings -5% -10% -10% -5% 0% 5% 10% 15% 20% 25% 30% Growth Rate 2007—2008
Slide 8: Portfolio Evolution Refocused on Growth Strategy: 2013
Portfolio Evolution Refocused on Growth Strategy Cytec Portfolio: 2013 30% 25% In Process Separation 20% Materials Profit 15% Additive Technologies Cytec* 10% Operating 5% 0% -5% -10% -10% -5% 0% 5% 10% 15% 20% 25% 30% Growth Rate 2012—2013 *Excludes Coatings
Slide 9: Portfolio Evolution Refocused on Growth Strategy: 2018E
Portfolio Evolution Refocused on Growth Strategy Cytec Portfolio: 2018E 30% 25% In Process Separation Aerospace Materials 20% Profit 15% Additive Technologies Industrial Materials Cytec 10% Operating 5% 0% -5% -10% -10% -5% 0% 5% 10% 15% 20% 25% 30% CAGR 2013—2018
Slide 10: Portfolio Transformation: 2008 – 2018E
Portfolio Evolution Refocused on Growth Strategy Cytec Portfolio Transformation: 2008 – 2018E 30% 25% 20% 2018E Profit 15% 2013E 10% 2008 Operating 5% 0% -5% -10% -10% -5% 0% 5% 10% 15% 20% 25% 30% Growth Rate
Slide 11: Current Portfolio Focused on Growth
Current Portfolio Focused on Growth Business Segment Sales: 2013E Global Distribution: 2013E Industrial Latin America Materials 8% 15% Asia Pacific 12% In Process Separation Aerospace North 21% Materials America Europe 50% 50% 30% Additive Technologies 14%
Slide 12: Portfolio Centered on Secular Growth in Attractive End Markets
Portfolio Centered on Secular Growth in Attractive End Markets Shift toward greater Expansion of composite Declining ore grades composite usage to use in more industrial require more complex reduce weight and applications to reduce and innovative improve fuel efficiency weight and improve solutions
Slide 13: Common Approach to Development and Commercialization
Common Approach to Development and Commercialization Development Qualification Commercialization Sales Earnings
Slide 14: Common Approach to Development and Commercialization
Common Approach to Development and Commercialization Development Qualification Commercialization Sales Earnings
Slide 15: Common Approach to Development and Commercialization
Common Approach to Development and Commercialization Development Qualification Commercialization Sales Earnings
Slide 16: Accelerating Growth and Strengthening Cytec: Our Evolved Enterprise Model
Accelerating Growth and Strengthening Cytec: Our Evolved Enterprise Model Near Source of Competitive Advantage • Sales and Marketing Commercial/ • Research and Development Technology Customer Operations from Distance Corporate Transactional • Finance Services • Legal • IT Far • HR High Level of Ente
Slide 17: Leading Market Positions Deliver Profitable Growth
Leading Market Positions Deliver Profitable Growth Strong Share Across All Segments Portfolio Refocused on Growth Leading share among structural aerospace applications Growth Platforms Growth Leading global position in 57% Platforms 85% automotive and industrial materials 2008 2013E Global leader in
Slide 18: Aerospace Materials
CYTEC DELIVERING TECHNOLOGY BEYOND OUR CUSTOMERS’ IMAGINATION TM William Wood President Aerospace Materials Aerospace Materials
Slide 19: Commercial Aerospace Market Fundamentals
Commercial Aerospace Market Fundamentals Market Fundamentals Global Aerospace Demand Growth in revenue passenger 45,000 miles 41,240 • Forecast to increase at a 5% 40,000 CAGR 35,000 Airline profitability and 20,930 resilience 30,000 Growth 59% • Fuel is 40% of airline costs Units 25,000 • Driving d
Slide 20: Composites Value Increasing Adoption on New Programs
Composites Value Increasing Adoption on New Programs High ? 50% 60% FSA Military Programs 787 A350 50% UCAV Premier Horizon Composites 40% F35 B2 of 30% AV 8B Rafale F/A22 F18 E/F 20% A380 Commercial Programs F18CD A300 A310 Percentage 10% C17 777 747 Mirage F15 757/767 747-400 0% Low ? 10% 1970 198
Slide 21: High-Value, Sustainable Positions with Extensive Technology and Qualification Portfolios
High-Value, Sustainable Positions with Extensive Technology and Qualification Portfolios History of Providing and Capturing Value from Portfolio Extensive and proprietary materials technology portfolio Sizable materials qualification heritage Positions on almost every major aircraft program Once qua
Slide 22: Updated Reporting Market Segments: 2013E
Updated Reporting Market Segments: 2013E Sales: ~$958M Operating Margin: ~18.5% Civil Aircraft Military & Space (70% of Sales) (30% of Sales) Large commercial transport Fighter jets Business jets Transports Regional jets Rotorcraft Turboprops Unmanned vehicles • Launch vehicles/missiles
Slide 23: Broad Technology Offering: Strong Positions Across Aerospace Segments
Broad Technology Offering: Strong Positions Across Aerospace Segments Cytec Aerospace Products Prepregs Structural adhesives Resin infusion technologies Tooling materials Cytec Applications Primary structure Secondary structure Jet engines Composite and metal bonding Surfacing films Interiors Toolin
Slide 24: Providing the Best Materials Solutions and Highly Specialized Support
Providing the Best Materials Solutions and Highly Specialized Support Our Unique Value Customer intimacy and mature customer Understand needs and barriers for customer R&D collaboration capabilities design requirements R&D and applications technology Able to develop solutions that competencies creat
Slide 25: Revenue Growth Drivers for Aerospace Materials
Revenue Growth Drivers for Aerospace Materials Legacy program build rate increases have driven growth to date Next growth period (2016 – 2018) driven by further legacy and new program increases New Program Introductions • Bombardier C-Series and Learjet 85 • Hondajet Legacy Program Rate Increases •
Slide 26: Increased Ship Set Content with New Program Positions
Increased Ship Set Content with New Program Positions Program OEM Backlog F-35 88 787 864 $1M A-380 157 747-8 53 C-Series 177 C 919 310 $500k A350 678 737 MAX 1,431 A400M 174 Hondajet 100+ Learjet85 100 $200k 737 2,014 A320/A320NEO 4,014 SSJ 100 232
Slide 27: High Quality Technologies Positions on Key New Programs
Strong High Quality Technologies Positions on Key New Programs 787 C919 A350 Secondary structures and Major supplier of Structural adhesives carbon fibers primary and secondary structure materials • Surfacing films for lightning High-value primary strike protection structure • Structural adhesives •
Slide 28: High Quality Technologies Positions on Key New Programs
Strong High Quality Technologies Positions on Key New Programs 737MAX A320neo Enabling high-performance resins for lightweight LEAP Engine composite components
Slide 29: High Quality Technologies Positions on Key New Programs
Strong High Quality Technologies Positions on Key New Programs C Series Hondajet Superjet 100 Major supplier of Major supplier of Major supplier of secondary and primary composite materials secondary structure structure materials used in primary materials structure applications High-performance resi
Slide 30: High Quality Technologies Positions on Key New Programs
Strong High Quality Technologies Positions on Key New Programs Joint Strike Fighter Primary supplier of composite materials for primary and secondary structure applications
Slide 31: Future Programs Provide Significant Opportunity for Composite Materials
Future Programs Provide Significant Opportunity for Composite Materials • Actively engaged on new programs with legacy customers and new customers in emerging regions • New programs represent a range of opportunities with both mid- and long-term entry • Continuing to invest in materials and applicat
Slide 32: Development and Commercialization Strategy
Development and Commercialization Strategy Development Qualification Commercialization Sales Earnings
Slide 33: Development and Commercialization Strategy
Development and Commercialization Strategy Development Qualification Commercialization Sales Earnings
Slide 34: Development and Commercialization Strategy
Development and Commercialization Strategy Development Qualification Commercialization Sales Earnings
Slide 35: Program Wins Underpin Significant Growth Opportunity
Program Wins Underpin Significant Growth Opportunity Significant Growth Potential Customer projections of legacy and new program growth provide the opportunity to nearly double revenue over the next 5 years $ 2.0 Revenue Opportunity $ 1.5 billions) (in $ 1.0 Revenue Plan $ 0.5 2009 2010 2011 2012 20
Slide 36: Aerospace Materials Financial Outlook
Aerospace Materials Financial Outlook Revenue Growth Drivers: 2013E to 2018E 2014: Focus on Operational Excellence 6-7% (1-2)% 8-10% • Focus on capturing margin 3-4% improvement in 2014 from productivity initiatives and prepare for up cycle Base Business / New Sunsetting 2018E Build Rate Programs Pr
Slide 37: Leveraging Innovation
CYTEC DELIVERING TECHNOLOGY BEYOND OUR CUSTOMERS’ IMAGINATION TM Carmelo Lo Faro Vice President Technology, Aerospace & Industrial Materials Leveraging Innovation
Slide 38: Fundamental Value of Composites Driving Increased Adoption
Fundamental Value of Composites Driving Increased Adoption Fundamental Value of Composites Fundamental value of composites • Low weight (high specific strength and stiffness) • Fatigue life • Corrosion resistance • Aerodynamics Future emphasis towards affordability and adoption/maturity Cytec is in
Slide 39: Competence Enables Repeatable Value Creation and Risk Reduction
Competence Enables Repeatable Value Creation and Risk Reduction Significant Growth Potential Technology roadmap driven by a superior understanding of the application and the customer’s complex needs Broadest technology portfolio in advanced composites industry including new breakthrough technologies
Slide 40: Continuing to Expand the Performance Envelope
Continuing to Expand the Performance Envelope Technology for Performance Strategic IP developed and secured in two key areas: Molecules and toughening Increase composite strength and damage tolerance to reduce structural weight Multi-functionality Integrate electrical conductivity, fire resistance a
Slide 41: New Materials and Processes for Affordable Performance
New Materials and Processes for Affordable Performance Technology for Affordability Affordable performance and rate for primary structure through low capex / recurring costs Reduce risk through lean part manufacturing and material/manufacturing modelling Adopted on a number of programs: ? Defense ?
Slide 42: Cost Reduction and Structure Integration Enabled by Cytec Resin Infusion Technology
Cost Reduction and Structure Integration Enabled by Cytec Resin Infusion Technology Wings: Bombardier C-Series Fuselage Pressure Bulkheads: A380, 787 and A350
Slide 43: Large Size and Capex Reduction Enabled by Out of Autoclave Technology
Large Size and Capex Reduction Enabled by Cytec ‘Out of Autoclave’ Technology Fuselages: Lockheed Cargo Aircraft and Learjet 85
Slide 44: Affordable and High-Rate Manufacturing Enabled by Cytec Resin Infusion
Affordable and High-Rate Manufacturing Enabled by Cytec Resin Infusion High Rate Parts: Leap X Engine Compressor Blades
Slide 45: Exploiting Core Competences for Serial Automotive
Exploiting Core Competences for Serial Automotive Well Positioned to Drive Composites Adoption in Serial Auto Strategic Auto OEM alliances to understand future needs and drive low risk insertion Leveraging application competences and technology portfolio to achieve affordability and rate targets: –
Slide 46: Technology Strategy for Affordable Mass Produced Composite Structures
Technology Strategy to Deliver Affordable Mass Produced Composite Structures for Serial Auto Preform & Large tow CF, Lay-up NCFs & Automation Textiles Thermoplastic Composites Materials CFRP-Centric & Process Solutions Part Designs Affordable Snap Cure Mass Produced Class ‘A’ HP RTM Composite Soluti
Slide 47: Industrial Materials
CYTEC DELIVERING TECHNOLOGY BEYOND OUR CUSTOMERS’ IMAGINATION TM William Avrin Vice President Corporate & Business Development Industrial Materials
Slide 48: Industrial Materials Growth Strategy
Industrial Materials Growth Strategy Superior technology and application engineering Leverage decades of supply to aerospace industry Strong customer relationships Leading positions in motorsports and high-performance automotive markets Significant growth opportunity in serial auto Become the leadin
Slide 49: Industrial Materials 2013E Sales by End Markets
Industrial Materials 2013E Sales by End Markets Motorsport High-Performance Auto Tooling Recreation Defence Other Industrial Structural Materials $155M Revenue 26% 24% 9% 20% 8% 13% Focus on leading share in high performance auto Aerospace Wind Energy Others Process Materials $125M Revenue 16% 58% 2
Slide 50: Significant Long-Term Opportunity for Carbon Composites
Significant Long-Term Opportunity for Carbon Composites Annual Market Opportunities for Carbon Composites $ 6 Automotive $ 5 Defense1 $ 2.34 $ 4 Wind Other 2 $ 3 $ 0.10 billions) $ 0.29 $ 1.10 (in $ 2 $ 0.09 $ 0.66 $ 1 $ 0.25 $ 1.98 $ 1.07 $ 1.49 $ 0 2010 2015E 2020E Segment CAGR 2010 – 2020E CAGR 2
Slide 51: Automotive OEMs Adopting Composite Technologies
Automotive OEM’s Adopting Composite Technologies Major Drivers Potential Weight Reduction Lower vehicle weight Interior Exterior Improved fuel efficiency, US CAFE Body EU regulations – CO2 emissions reduction Semi- Structure 0% Emissions Taxes penalty to OEM’s: 30% 2012 2020E 30% 1 gram = 5 € 1 gram
Slide 52: Clear Path to Serial Auto Production
Clear Path to Serial Auto Production Part Cost $100,000+ $5,000 Process Time 400 hours 100-400 hours 3-5 min 3 min Highly Customized, high customized Increasing Manufacture labor, lower cost Full automation high labor, high automation levels fiber cost fiber Annual Production ~100 5,000 to 10,000 40
Slide 53: Technology Strategy for Affordable Mass Produced Composite Structures
Technology Strategy to Deliver Affordable Mass Produced Composite Structures for Serial Auto Preform & Large tow CF, Lay-up NCFs & Automation Textiles Thermoplastic Composites Materials CFRP-Centric & Process Solutions Part Designs Affordable Snap Cure Mass Produced Class ‘A’ HP RTM Composite Soluti
Slide 54: Solving Technology Hurdles Drives Opportunity in Global Serial Automotive Market
Solving Technology Hurdles Drives Significant Opportunity in the Global Serial Automotive Market > $100k $ 2.5B Costs ~ $50k Global Systems Serial Composite $ 1.5B Market Auto ~ $10k Fiber 200M Carbon ~ $5k Opportunity 100M
Slide 55: Development and Commercialization Strategy
Development and Commercialization Strategy Development Qualification Commercialization Sales Earnings
Slide 56: Development and Commercialization Strategy
Development and Commercialization Strategy Development Qualification Commercialization Sales Earnings
Slide 57: Development and Commercialization Strategy
Development and Commercialization Strategy Development Qualification Commercialization Sales Earnings
Slide 58: Demonstrated Mass Production Capability: GM Spark Battery Tray Structure
Demonstrated Mass Production Capability: GM Spark Battery Tray Structure GM Winner of 2013 Innovation Award: The Society of Plastics Engineer’s Automotive Division Cytec composite material used on battery structure Current production volume: 3K to 5K per year Sub 3 minute resin cure times feasible
Slide 59: Process Materials Overview
Process Materials Overview Value Drivers • Service intensive business • Application know-how is a key variable • Opportunities for tailoring and “kitting”
Slide 60: Market Opportunities for Process Materials
Market Opportunities for Process Materials Key Differentiators Size of Annual Process Material Consumable Market Process materials add value by: $400 • Improving process robustness, with greater consistency, lower $350 Aero scrap and increased reliability $300 Auto $214M Wind • Facilitating increase
Slide 61: Industrial Materials Financial Outlook
Industrial Materials Financial Outlook Revenue Growth Drivers: 2013E to 2018E 4% 11-13% 4-5% 3-4% Structural Structural Process Materials 2018E Materials Materials (non-auto) (auto) Profitable Growth Focus $530M $65M $310M $285M* $24M 12.4% $16M 7.7% 5.5% 2013E 2014E 2018E 2013E 2014E 2018E *Exclude
Slide 62: Specialty Chemicals
CYTEC DELIVERING TECHNOLOGY BEYOND OUR CUSTOMERS’ IMAGINATION TM Michael Radossich President Specialty Chemicals Specialty Chemicals
Slide 63: In Process Separation Growth Journey
In Process Separation Growth Journey Strategic Position Leading global position in specialty mining reagents and phosphine- based chemicals World class, leading-edge technology supports strong margins Unrivaled on-site technical service and applications support to develop tailored solutions The righ
Slide 64: In Process Separation Overview: 2013E Sales of $390 million
In Process Separation Overview: 2013E Sales of $390 million Major Markets (% Sales) Technology Benefits Gold, molybdenum, nickel, cobalt Improved recovery and yield Rare earths Industrial minerals Other Metals/ • Increased efficiencies Minerals 15% • Reduced process variability Copper • Reduced envi
Slide 65: Copper Value Chain
Copper Value Chain Size Concentration Melting & Exploration Mining Reduction (separation) Smelting Refining Metal Flotation Collectors • Mineral-selective functional group • Hydrophobic hydrocarbon tail Water Microscopic Ore Cytec picture of air Collectors with copper attached Cu Cu Air Air Operatio
Slide 66: In Process Separation Business Drivers
In Process Separation Business Drivers Declining quality of copper ore requires improved technology and higher reagent consumption New product introductions that address customer needs drive strong growth at high margins New mines and brownfield expansions deliver volume growth Adjacent applications
Slide 67: Declining Quality of Copper Ore Requires More Sophisticated Reagents
Declining Quality of Copper Ore Requires More Sophisticated Reagents and Higher Consumption 6.00 1.00 Average Copper Grade 3 0.95 5.00 0.90 Copper Price 4 0.85 4.00 0.80 Cytec IPS Revenue 2 3.00 0.75 0.70 2.00 0.65 Global Copper Output 1 0.60 1.00 0.55 - 0.50 2003 2004 2005 2006 2007 2008 2009 2010
Slide 68: Breakthrough Innovations Drive More Profitable Business
Breakthrough Innovations Drive More Profitable Business 66% 2010 64% ACORGA NR 2013 CYANEX 600 CYFLOC TF-8000 62% AERO 7260 AERO MX500 Series 60% Margin 2012 PHOSFLOW 58% AERO EZ CYANEX 572 Contribution 56% 2011 2008 54% CYFLOC HX-PAM AERO XD AERO XR Series AERO MAXGOLD Series ACORGA OPT 52% 50% 200
Slide 69: Key Growth Drivers: New Mines and Geographic Expansion
Key Growth Drivers: New Mines and Geographic Expansion New Mines Geographic Expansion New Market Adjacencies/Non-Mining
Slide 70: Development and Commercialization Strategy
Development and Commercialization Strategy Development Qualification Commercialization Sales Earnings
Slide 71: Development and Commercialization Strategy
Development and Commercialization Strategy Development Qualification Commercialization Sales Earnings
Slide 72: Development and Commercialization Strategy
Development and Commercialization Strategy Development Qualification Commercialization Sales Earnings
Slide 73: Leveraging Existing Technologies into Adjacent Markets Supports Further Growth
Leveraging Existing Technologies into Adjacent Markets Supports Further Growth Explore other metal Increasing phosphine Phosphine derivative Phosphine gas used as and mineral demand for improved used as biocide in down post-harvest fumigant applications including conductivity in LEDs well hydrofrack
Slide 74: In Process Separation Growth Supported by Ontario Plant Expansion
In Process Separation Growth Supported by Ontario Plant Expansion • $160 million expansion expected to be mechanically complete by Q2’14 • Doubles plant capacity • Planned startup Q3’14 to produce material for customer qualifications • Products to support growth in copper, other metals, alumina, and
Slide 75: In Process Separation Financial Outlook
In Process Separation Financial Outlook Revenue Drivers Revenue Growth Drivers: 2013E to 2018E Base business—base metal annual production volume growth 2-3% 8-12% 2-3% New product introductions 2-3% 2-3% (Innovations) of proprietary chemistry and blends leading to Base Technology / Geographic New Ma
Slide 76: Additive Technologies Strategic Priorities
Additive Technologies Strategic Priorities Strategic Focus Revenues: 2013E Sales of $275 Million Organic growth by delivering advanced technology Other solutions to the markets 8% served Specialty Revenue Drivers Additives 42% Polymer Innovative solutions Additives 50% Geographic expansion Adjacent
Slide 77: Polymer Additives Growth Focused on IP Protected Technology
Polymer Additives Growth Focused on IP Protected Technology Solutions: 2013E 1 AUTOMOTIVE ROTOMOLDING 20% of Polymer Additives Sales 20% of Polymer Additives Sales FILMS AGRICULTURE SPECIALTY 18% of Polymer Additives Sales 12% of Polymer Additives Sales BUILDING & CONSTRUCTION 1 Other represents ~20
Slide 78: Polymer Additives Innovative Solutions
Polymer Additives Innovative Solutions Patented Technology Platform CYASORB CYNERGY SOLUTIONS® is a family of stabilizers delivering superior UV durability and performance New innovative solutions are commercialized every year to grow profitably Market Drivers for Polymer Additives Increased use of
Slide 79: Specialty Additives Target GDP Growth: 2013E
Specialty Additives Target GDP Growth: 2013E EMULSION POLYMERIZATION OIL INDUSTRY 35% of Specialty Additives Sales 5% of Specialty Additives Sales PHARMA AGROCHEMICAL 15% of Specialty Additives Sales 5% of Specialty Additives Sales 1 Other represents ~40% of Specialty Additives sales.
Slide 80: Additive Technologies Financial Outlook
Additive Technologies Financial Outlook Solid Cash Flow and Revenue Drivers: 2013E to 2018E Return Metrics 1% 4-6% Segment operated to drive cash 2-3% flow 2% Requires minimal capital Base Polymer Specialty 2018E Business Additives Additives investment Growth Stable margins and cash flow Solid Cash
Slide 81: Financial Review
CYTEC DELIVERING TECHNOLOGY BEYOND OUR CUSTOMERS’ IMAGINATION TM David Drillock Vice President & Chief Financial Officer Financial Review
Slide 82: Continuation of Sound Financial Policies
Continuation of Sound Financial Policies Capital Allocation Strategy Focus on supporting organic growth Maintain and improve strong balance sheet and credit metrics to support investment grade rating and financial flexibility Continue dividends with periodic increase Disciplined and targeted approac
Slide 83: Maintenance of Strong Balance Sheet and Credit Metrics
Maintenance of Strong Balance Sheet and Credit Metrics Debt Maturity Profile Debt/EBITDA 4.00 $450 3.50 3.5% $400 3.00 $350 2.50 $300 millions) $250 2.00 (in $200 8.95% 1.50 6.0% $150 1.00 $100 $50 0.50 $0 0.00 2014E 2015E 2016E 2017E 2023E 2012 2013E 2014E 2018E Rating Agency Methodology
Slide 84: Maintenance of Strong Balance Sheet and Credit Metrics
Maintenance of Strong Balance Sheet and Credit Metrics Retained Cash Flow/Debt Free Cash Flow/Debt 100% 60% 50% 80% 40% 30% 60% 20% 10% 40% 0% -10% 20% -20% 0% -30% 2012 2013E 2014E 2018E 2012 2013E 2014E 2018E Rating Agency Methodology
Slide 85: Strong Record of Cash Remuneration to Shareholders
Strong Record of Cash Remuneration to Shareholders Returned ~$1.2 Billion to Shareholders Over the Past Three Years $900 $800 $22M Buybacks $700 Dividends $600 $750M millions) $500 (in $400 $300 $27M $200 $26M $100 $196M $150M $0 2011 2012 2013E
Slide 86: Expect to Generate ~$ Billion of Free Cash Flow: 2014E – 2018E
Expect to Generate ~$ 1 Billion of Free Cash Flow: 2014E – 2018E Cash Flow Profile $ 2.0 Cash from Operating Activities Free Cash Flow $ 1.5 $ 1.0 billions) (in $ 0.5 $ 0.0 -$ 0.5 2013E 2014E 2014E— 2018E
Slide 87: Targeted External Opportunities with a Disciplined Approach
Targeted External Opportunities with a Disciplined Approach Targeted External Growth Opportunities Disciplined Approach Joint ventures Aligned with our strategy • Large scale, complex, or Strategic alliances transformational acquisitions not anticipated Minority investments Balanced evaluation metri
Slide 88: 2014E Outlook
2014E Outlook (in millions expect per share amounts or as noted) Business Segment Net Sales Operating Earnings Aerospace Materials $970M – $ 990M $183M – $195M Industrial Materials $300M – $ 320M $22M – $26M In Process Separation $420M – $ 445M $88M – $97M Additive Technologies $285M – $ 295M $40M –
Slide 89: Expect Double-Digit Sales Growth: 2014E – 2018E
Expect Double-Digit Sales Growth: 2014E – 2018E Sales Growth by Business Cytec Sales Growth $ 2.0 Aerospace Materials 2014E-2018E $ 1.8 Industrial Materials $ 3.0 CAGR 10% $2.9B In Process Separation $ 1.6 Additives Technologies $ 2.5 $ 1.4 $2.0B billions) $ 1.2 billions) $ 2.0 $1.9B $ 1.0 (in (in $
Slide 90: Expect Double-Digit EBIT Growth: 2014E – 2018E
Expect Double-Digit EBIT Growth: 2014E – 2018E 1 EBIT Growth by Business 2 Cytec EBIT Growth 2 $300 $600 Aerospace Materials 2014E-2018E CAGR 14% Industrial Materials $250 In Process Separation $500 Additives Technologies $200 $400 millions) $150 millions) $300 (in (in $100 $200 $50 $100 $0 $0 2013E
Slide 91: ~300 Basis Point Expansion in EBIT Margins: 2013E – 2018E
Expect ~300 Basis Point Expansion in EBIT Margins: 2013E – 2018E(1) EBIT Margin Trend 20% ~18% 16% 15% Margin15% 14% Operating 10% 5% 2012 (2) 2013E 2014E 2018E (1)Data for forward years is at midpoint of guidance range provided and as adjusted basis (2)Continuing operations
Slide 92: Closing Remarks and Q&A
CYTEC DELIVERING TECHNOLOGY BEYOND OUR CUSTOMERS’ IMAGINATION TM Shane Fleming Chairman, President & Chief Executive Officer Closing Remarks and Q&A
Slide 93: Robust EPS Growth from 2013 to 2018
Robust EPS Growth from 2013 to 2018 Adjusted EPS Trend(1) ~$10.00 $10.00 2013E-2018E CAGR ~15% $8.00 $6.00 $5.50 – $5.90 $4.70 – $4.80 $4.00 $2.00 $0.00 2013E 2014E 2018E (1)Data for forward years is at midpoint of guidance range provided and as adjusted basis
Slide 94: Closing Remarks
Closing Remarks Refocused portfolio on growth strategy Centered on secular growth in attractive end markets Winning share with differentiated technology offerings Common approach to development and commercialization Accelerating growth and strengthening Cytec through our evolved enterprise model Del
Slide 95: Thank you
CYTEC DELIVERING TECHNOLOGY BEYOND OUR CUSTOMERS’ IMAGINATION TM Thank you