Element Solutions Inc. · NYSE:ESI
Element Solutions — Platform Specialty Products — CJS Conference June 2014
28 slides from Element Solutions's conference presentation, June 2014
Slide 1: Platform Specialty Products Investor Presentation
Platform Specialty Products Investor Presentation CJS Conference June 2014
Slide 2: Disclaimer
Disclaimer Please note that this presentation is intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. In this presentation, we may discuss events or results that have not yet occurred or been realized, commonly referred to as “fo
Slide 3: Agenda
Agenda Platform (MacDermid) Overview Acquisition Overview Chemtura AgroSolutions Overview Financial Overview Q&A Appendices 2
Slide 4: Why is Platform Unique?
Why is Platform Unique? Technology Leader Global Leader in with “Asset-Lite, High- Attractive Growth Businesses Touch” Business Model Superior Management Favorable Industry Team Incentivized to Structure with High Drive Results Barriers to Entry Attractive Financial Profile Growing Exposure to with
Slide 5: Current Platform – Business Overview
Current Platform– Business Overview MacDermid Business Description 2013 – Sales and Adj. EBITDA Breakdown Global producer of high specialty chemicals for plating 2013 Sales by Segment 2013 EBITDA by Segment and surface coatings, printed circuit boards and other Graphic Graphic electronic applicati
Slide 6: Technology Leader with “Asset-Lite, High-Touch” Business Model
Technology Leader with “Asset-Lite, High-Touch” Business Model Commitment to R&D and Technical Service Value Creation Investment in Innovation Investment in Service Platform (MacDermid) invests in customer Platform (MacDermid) invests in local service driven research and development capability that
Slide 7: Favorable Industry Structure with High Barriers to Entry
Favorable Industry Structure with High Barriers to Entry Superior and 90 years of process know-how and expertise Innovative Products “Dynamic chemistries” – complex chemical compositions Technical + Over 750 patents Barriers Technical Service + Industry-leading R&D and service infrastructure
Slide 8: Agenda
Agenda Platform (MacDermid) Overview Acquisition Overview Chemtura AgroSolutions Overview Financial Overview Q&A Appendices 7
Slide 9: CAS is Platform’s Second Investment in Building a World Class Specialty Chemicals Company
CAS is Platform’s Second Investment in Building a World Class / World Scale Specialty Chemicals Company On April 17th, 2014, Platform announced a definitive agreement to acquire Chemtura AgroSolutions (“CAS”) Platform Specialty Products Specialty Coatings Water Chemical Electronic Oilfield Surface C
Slide 10: Chemtura AgroSolutions is a Perfect Match to Our Strategic Criteria for Acquisitions
Chemtura AgroSolutions is a Perfect Match to Our Strategic Criteria for Acquisitions On April 17th, 2014, Platform announced a definitive agreement to acquire Chemtura AgroSolutions (“CAS”) Platform’s Investment Criteria CAS “Asset-Lite, High-Touch” Business Model that Drives Free Cash Flow Ex
Slide 11: CAS Acquisition: Transaction Overview
CAS Acquisition: Transaction Overview Total consideration value of approximately $1 billion − Cash purchase price of $950 million, subject to working capital and other adjustments Overview − Stock consideration of 2 million common shares of Platform − Implied Multiple of 9.8x 2013 EBITDA pre-syner
Slide 12: Acquisition of CAS: Strategic Rationale
Acquisition of CAS: Strategic Rationale Double high value positioning – high-tech, high-touch “Asset-Lite, High-Touch” Value-added R&D, global product registration process, sales and customer service Business Model Strong Free Cash Flow generation with limited exposure to petrochemical-based r
Slide 13: CAS Enhances Platform’s Scale and Growth Profile
CAS Enhances Platform’s Scale and Growth Profile 2013 Combined Net Sales 2013 Combined Adjusted EBITDA ($ mm) ($ mm) 1,400 350 $1,195 1,200 300 $281 (1) 1,000 250 $746 $180 800 200 Scale 600 150 400 100 200 50 0 0 Platform Pro Forma Platform Platform Pro Forma Platform 2013 Platform Net Sales 2013 C
Slide 14: Agenda
Agenda Platform (MacDermid) Overview Acquisition Overview Chemtura AgroSolutions Overview Financial Overview Q&A Appendices 13
Slide 15: CAS – Business Overview
CAS – Business Overview Leading and fast growing provider of agrochemicals and seed treatment products for a wide variety of crop applications Business Description Key Products Key End-Use Applications Seed Enhancement Tree nuts, fruits, citrus and vines Key Performance Drivers (global) Fungic
Slide 16: CAS – Geographic Diversification
CAS – Geographic Diversification Global distribution footprint with sales in 100+ countries and a presence in fast growing economies Sales by Region CAS Operates in over 100 Locations Worldwide Latin America EMEA Asia Pacific North America 15
Slide 17: Crop Protection: Favorable and Sustainable Industry Fundamentals
Crop Protection: Favorable and Sustainable Industry Fundamentals Several global mega-trends require ever increasing yields and protections for crops Overview Global Population Growth and Arable Land Per Capita Long term demand for agriculture products is expected to increase significantly due to:
Slide 18: Agenda
Agenda Platform (MacDermid) Overview Acquisition Overview Chemtura AgroSolutions Overview Financial Overview Q&A Appendices 17
Slide 19: Platform’s Historical Performance
Platform’s Historical Performance Net Sales Adjusted EBITDA and % of Sales (3) ($ in millions) ($ in millions) $744 $746 $748 $729 $731 $180 $185 $694 $160 $169 $162 $160 $172 $43 $172 $153 $43 $594 $158 $139 $42 $34 $145 $116 $28 $17 $106 $23 $584 $569 $559 $574 $578 $142 $536 $137 $119 $120 $449 $
Slide 20: CAS’ Historical Performance
CAS’ Historical Performance 2013A vs. 2012A 2014Q1 vs. 2013Q1 Net Sales EBITDA (1) Net Sales EBITDA (1) ($ in millions) ($ in millions) $449 $409 $101 $88 $101 $79 $25 $16 22.5% 23.8% 19.3% 22.5% 18.2% 24.8% 2012 2013 2012 2013 2013Q1 2014Q1 2013Q1 2014Q1 Note: Chemtura AgroSolutions financials from
Slide 21: Strategic and Financial Highlights of the Transaction
Strategic and Financial Highlights of the Transaction Natural building block in our “Asset-Lite, High-Touch” specialty chemicals businesses with leading positions in niche categories Enhances Platform’s portfolio Establishes strong vehicle for future growth supported by mega-trends and barrier
Slide 22: Conclusion
Conclusion Global Leader in Attractive Growth Businesses Highly Diversified Revenue Base Long-standing Relationships with Blue-chip End Customer Base Favorable Industry Structure with High Barriers to Entry Technology Leader with “Asset-Lite, High-Touch” Business Model Attractive Financi
Slide 23: Agenda
Agenda Platform (MacDermid) Overview Acquisition Overview Chemtura AgroSolutions Overview Financial Overview Q&A Appendices 22
Slide 24: Appendix
PRODUCTS CORPORATION x PLATFORM SPECIALTY JN Appendix 23
Slide 25: Platform (MacDermid) – Key Facts
Platform (MacDermid) – Key Facts Last Twelve Months Ended March 31, 2014 ($ in millions) Sales: $748 Adjusted EBITDA: $185 Margin: 24.7% Performance Materials Graphic Solutions Sales: $578 Sales: $169 (2) Adjusted EBITDA: $142 Adjusted EBITDA: $43 Margin: 24.5% Margin: 25.6% Specialty chemicals fo
Slide 26: Platform (MacDermid) Has A Long Standing History
Platform (MacDermid) Has A Long Standing History Platform (MacDermid) has evolved into one of the leading specialty chemical companies through a combination of organic growth and strategic acquisitions Sales ($ in millions) Organic Growth Phase October 2013: $1,000 MacDermid acquired by $900 Platfor
Slide 27: Platform Reconciliation of Net Income to Adjusted EBITDA
Platform Reconciliation of Net Income to Adjusted EBITDA Predecessor (MacDermid)/Successor Combined Quarter ended March 31 Year ended December 31 (in millions) 2013 2014 2012 2013 Net income (loss) $15.2 $(7.4) $46.0 $(181.0) Adjustments to reconcile to net income (loss): Income tax expense (benefit
Slide 28: Chemtura AgroSolutions’ Non-GAAP Financials
Chemtura AgroSolutions’ Non-GAAP Financials ($ millions) Chemtura Chemtura AgroSolutions AgroSolutions 3 months Ended 12 months Ended 3/31/2014 12/31/2013 Net Sales per Chemtura 2014Q110-Q and $101 $449 2013 10-K Segment Operating Income per Chemtura $22 $88 2014Q1 10-Q and 2013 10-K 21.8% 19.6% % m
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