Element Solutions Inc. · NYSE:ESI
Element Solutions — BofA Global Agriculture and Materials Conference 2020
18 slides from Element Solutions's conference presentation, Feb 1, 2020
Slide 1: BofA Global Agriculture and Materials Conference
BofA Global Agriculture and Materials Conference Element Solutions Overview February 1 2020
Slide 2: Legal Notices
Legal Notices SAFE HARBOR Unless otherwise specified, the results included in this presentation exclude discontinued operations relating to the Company's former Agricultural Solutions business sold on January 31, 2019. Please note that in this presentation, we may discuss events or results that have
Slide 3: Element Solutions Overview
Element Solutions Overview Chemical Technology Enabling Performance & Innovation $ 1,836M 2019 Net Sales $ 417M 2019 Adj. EBITDA* 2019 Segment Net Sales 2019 Regional Net Sales 2019 Free ■ Electronics 59% ■ Americas 29% $ 238M Cash Flow Generated1* $ 0.88 2019 Adj. EPS* Industrial & ■ Specialty 41%
Slide 4: Diversified Portfolio Across Growing End-Markets
Diversified Portfolio Across Growing End-Markets Increasing device complexity, more demanding reliability requirements and reducing environmental impacts are long-term secular megatrends Diverse End-Market Exposure Attractive Long-Term Growth Drivers Sources: Gartner, IDC, Markets & Markets, Prismar
Slide 5: Customer-Focused, Asset-Lite and High Value-Added Model
Customer-Focused, Asset-Lite and High Value-Added Model Strategically Positioned Close to Customers Customer-Led Innovation Technical service New product teams embedded in development and customer facilities to innovation ensure quality and centralized with key troubleshoot; On-Site competency Centr
Slide 6: People-Intensive and Capital-Light
People-Intensive and Capital-Light Strong Cash Flow Formulation- 1.6% 43% Characteristics Driven Manufacturing Capital Expenditures as a % of 2019 Net Sales <2% of Net Sales Since Combination of 2019 Gross Margin Consistent 40%+ Gross Margins 21% MacDermid & Alent 2019 Adj. EBITDA* less Capex as a %
Slide 7: Benchmarking Element Solutions in Specialty Chemicals: Capital Intensity and Profitability
Benchmarking Element Solutions in Specialty Chemicals Capital Intensity and Profitability Capital Expenditures as % of Sales Last twelve months – reported financials 1.6% ESI Peer 10 Peer 11 Peer 12 Peer 5 Peer 9 Peer 7 Peer 8 Peer 4 Peer 6 Peer 1 Peer 2 Peer 3 Adj. EBITDA* Margin (%) Last twelve mo
Slide 8: Benchmarking Element Solutions in Specialty Chemicals: Cash Flow and Returns
Benchmarking Element Solutions in Specialty Chemicals Cash Flow and Returns (Adj. EBITDA* – Capital Expenditures) / Sales Last twelve months – reported financials 21.1% ESI Peer 12 Peer 11 Peer 10 Peer 1 Peer 2 Peer 4 Peer 9 Peer 3 Peer 6 Peer 5 Peer 7 Peer 8 Adj. EBIT1 / Tangible Assets2 (%) Last t
Slide 9: 2019 Performance and Financial Highlights
2019 Performance and Financial Highlights Net Sales: Outperformance in Challenging Markets Free Cash Flow Generation High-End Smartphones and High-End Automobiles Down Mid to High Single Digits Outperformance against unit growth in key Mobile Phone Shipments – YoY Growth (%) 0% 2019 Global Auto Sale
Slide 10: 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 Financial Objectives ▪ Outperformance relative to growth end-markets ▪ Solid, stable profit margins and strong cash flo
Slide 11: Appendix
Appendix 11
Slide 12: Reconciliation to Adjusted Share Counts
Reconciliation to Adjusted Share Counts (amounts in millions) FY 2019 FY 2018 (Average) (Average) Basic outstanding common shares 254 288 Number of shares issuable upon conversion of PDH Common Stock — 4 Number of shares issuable upon conversion of Series A Preferred Stock 2 2 Number of shares issua
Slide 13: Net Income Attributable to Common Stockholders Reconciliation to Adj. EBITDA
Net Income Attributable to Common Stockholders Reconciliation to Adj. EBITDA ($ millions) FY 2019 Net income attributable to common stockholders $92 Add (subtract): Net income attributable to the non-controlling interests 1 Income from discontinued operations, net of tax (13) Income tax expense 61 I
Slide 14: GAAP Net Income (Loss) Reconciliation to Adjusted Diluted EPS
GAAP Net Income (Loss) Reconciliation to Adjusted Diluted EPS ($ millions, except per share amounts) FY 2019 FY 2018 Net income (loss) attributable to common stockholders $92 $(324) Net income (loss) from discontinued operations attributable to common stockholders 13 (246) Net income (loss) from con
Slide 15: Operating Expenses to Adjusted Operating Expenses Reconciliation
Operating Expenses to Adjusted Operating Expenses Reconciliation ($ millions) FY 2019 Selling, technical, general and administrative $497 Research and development 42 Operating expenses 539 Amortization expense (113) Restructuring expense (14) Acquisition and integration costs (2) Debt refinancing co
Slide 16: Free Cash Flow to Free Cash Flow on an Adjusted Basis Reconciliation
Free Cash Flow to Free Cash Flow on an Adjusted Basis Reconciliation ($ millions) FY 2019 Cash flows from operating activities $171 Capital expenditures (30) Disposal of property, plant and equipment 5 Free cash flows 146 Adjustments to arrive at free cash flows on an adjusted basis: Interest paymen
Slide 17: Organic Net Sales Growth Reconciliation
Organic Net Sales Growth Reconciliation Twelve Months Ended December 31, 2019 Change in Pass- Reported Net Impact of Constant Organic Net Sales Through Metals Acquisitions Sales Growth Currency Currency Growth Pricing Electronics (6)% 3% (4)% 0% (1)% (4)% Industrial & Specialty (7)% 3% (3)% —% —% (3
Slide 18: 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.
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