Venator Materials PLC · OTC:VNTRF
Venator Materials — Q2 2018 Earnings Presentation
15 slides from Venator Materials's earnings presentation, Jul 31, 2018
Slide 1: Second Quarter 2018 Results Presentation
Second Quarter 2018 Results Presentation July 31, 2018
Slide 2: General Disclosure
General Disclosure This presentation includes “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. These forward-looking statements include statements concerning our pla
Slide 3: Second Quarter Highlights
Second Quarter Highlights Financial summary $ in millions, except per share amounts 2Q18 2Q17 1Q18 Revenues $626 $562 $622 Net income attributable to Venator 196 31 78 Adjusted EBITDA 157 94 157 Diluted earnings per share 1.84 0.29 0.73 Adjusted diluted earnings per share 0.85 0.38 0.85 Net cash pro
Slide 4: Titanium Dioxide
Titanium Dioxide Strong earnings Revenues Adjusted EBITDA $ in millions $ in millions Y/Y +13% Q/Q +0% 165 Y/Y +58% Q/Q +3% 160 155 $147 150 $143 500 $455 $456 145 140 135 $401 130 125 400 120 115 110 105 100 $93 300 95 90 32% 85 80 75 70 200 65 60 23% 31% 55 50 45 40 100 35 30 25 20 15 10 0 5 0 2Q1
Slide 5: Performance Additives
Performance Additives Modest improvements Revenues Adjusted EBITDA $ in millions $ in millions 25 Y/Y +10% Q/Q -4% 210 205 Y/Y +6% Q/Q +3% 200 195 $24 190 185 $171 180 175 $161 $166 24 170 165 160 155 $23 150 145 23 140 135 130 125 120 115 110 105 22 100 95 $21 90 85 80 75 13% 15% 14% 70 65 21 60 55
Slide 6: $90 Million EBITDA Improvement Program
$90 Million EBITDA Improvement Program $7 million of EBITDA benefit captured in 2Q18 Expected Run-rate Improvement Expected Annual EBITDA Capture $ in millions $ in millions $30 $30 $90 $30 $24 Facilities closures Fixed costs Volume EBITDA 2017 2018F 2019F Improvement Actual Budget Business Improvem
Slide 7: Strengthen our TiO2 business and improve our competitive position
Strengthen our TiO2 business and improve our competitive position Venator to purchase the Tronox European TiO2 paper laminates business – Agreement to purchase the European paper laminates business (the “8120 grade”) upon Tronox/Cristal closing – Tronox would supply the 8120 grade under a Transiti
Slide 8: Adjusted EBITDA Bridges
Adjusted EBITDA Bridges Second quarter 2018 2Q18 / 2Q17 $ in millions $250 $117 $(14) $(60) $200 $157 $13 $7 $150 $94 $100 $50 $0 (1) (1) 2Q17 Adjusted Price/Mix Volume Costs Business FX/Other 2Q18 Adjusted EBITDA Improvement EBITDA Program 2Q18 / 1Q18 $ in millions $200 $157 $157 $6 $3 $(6) $(6) $3
Slide 9: Financial Profile
Financial Profile Attractive position $ in millions Net Debt Tax Rate Comment $529 $394 Liquidity of $625mm as of June 30, 2018 $(223) $(354) – $354mm cash 15-20% – $271mm available of ABL borrowing base 1.1x(1) Received $236mm (€191mm) of insurance proceeds on 0.7x(1) 18% April 13, 2018 $752 $7
Slide 10: Cash Uses
Cash Uses Solid free cash flow generation $ in millions Cash Uses 2Q18 2018E Adjusted EBITDA $157 Capital expenditures(1) (22) ~$(120) Cash interest (6) ~(35)-(40) Primary working capital change (64) ~(20)-(30) Restructuring (8) ~(40)-(50) Other (includes pension) (7) ~(50)-(60) (5) Cash income taxe
Slide 11: Summary
Summary Second Quarter Headlines TiO2 pricing momentum continued in the second quarter Generated $45 million of operational free cash flow, excluding the impact of Pori Captured $7 million of incremental EBITDA benefit from ongoing Business Improvement Program Recognized $325 million of inco
Slide 12: Reconciliation of U.S. GAAP to Non-GAAP Measures
Reconciliation of U.S. GAAP to Non-GAAP Measures Income Tax (Expense) Diluted Earnings (Loss) EBITDA Benefit(2) Net Income (Loss) Per Share(1) Three months ended Three months ended Three months ended Three months ended June 30, June 30, June 30, June 30, In millions, except per share amounts 2018 20
Slide 13: Reconciliation of U.S. GAAP to Non-GAAP Measures
Reconciliation of U.S. GAAP to Non-GAAP Measures Income Tax (Expense) Diluted Earnings (2) EBITDA Benefit Net Income (Loss) (Loss) Per Share(1) Three months Three months Three months Three months ended ended ended ended March 31, March 31, March 31, March 31, In millions, except per share amounts 20
Slide 14: Reconciliation of U.S. GAAP to Non-GAAP Measures
Reconciliation of U.S. GAAP to Non-GAAP Measures Income Tax (Expense) Diluted Earnings (Loss) EBITDA Benefit(2) Net Income (Loss) Per Share(1) Six months ended Six months ended Six months ended Six months ended June 30, June 30, June 30, June 30, In millions, except per share amounts 2018 2017 2018
Slide 15: Explanatory Notes
Explanatory Notes (1) Our management uses adjusted EBITDA to assess financial performance. Adjusted EBITDA is defined as net income (loss) before interest expense, income tax (benefit) from continuing operations, depreciation and amortization, and net income attributable to non-controlling interests