Rohm & Haas — Q2 2008 Earnings Presentation
27 slides from Rohm & Haas's earnings presentation, Jul 24, 2008
Slide 1: Second Quarter 2008 Earnings Release
Second Quarter 2008 Earnings Release July 24, 2008 accelerate:
Slide 2: Regulation G
[ 1 ] Regulation G The presentation today may include the display of some company data that do not directly conform to generally acceptable accounting principles, or GAAP. Management believes that the presentation of some non-GAAP data provides investors with additional insight into the ongoing oper
Slide 3: Forward Looking Statements
[ 2 ] Forward Looking Statements This presentation contains forward-looking statements that involve risks and uncertainties and are subject to change based on various factors. These factors include, but are not limited to (1) the cost of raw materials, natural gas, and other energy sources, and the
Slide 4: Dow Chemical Announcement
[ 3 ] Dow Chemical Announcement On July 10, 2008, Dow (NYSE: DOW) and Rohm and Haas (NYSE: ROH) announced a definitive agreement, under which Dow will acquire all outstanding shares of Rohm and Haas common stock for $78 per share in cash. In light of this announcement, Rohm and Haas is discontinuing
Slide 5: Results At A Glance
[ 4 ] Results At A Glance Strong organic growth, particularly in Electronic Technologies segment and also in chemicals in Rapidly Developing Economies Good progress on pricing actions Continued good performance from Performance Materials and Salt Strong growth in Electronic Technologies, Performance
Slide 6: Q2 2008 Financial Highlights
[ 5 ] Q2 2008 Financial Highlights Three Months Ended June 30, Three Months Ended June 30, Three Months Ended June 30, In Millions (except EPS) 2008 2007 Change Sales $2,567 $2,190 17% Net Earnings from Continuing Operations $147 $161 (9)% Diluted EPS $0.75 $0.75 0% Adjusted Net Earnings from Contin
Slide 7: Q2 2008 Sales Change
[ 6 ] Q2 2008 Sales Change Invisible Black Grey Q2 2007 0 2190 Demand 2190 81 Price 2271 96 Currency 2367 121 Other 2488 79 Q2 2008 0 2567 Strong Organic Growth 7% real growth (demand + acquisitions), led by continued strong growth in Electronic Materials and Chemicals outside North America Strong t
Slide 8: Adjusted EPS Up 8% Despite Strong Headwinds
[ 7 ] Adjusted EPS(1,NG) Up 8% Despite Strong Headwinds Q2 2007 as reported 0 0.75 Restructuring and asset impairments 0.75 0.03 Equity in Affiliates -- UP Chemical 0.74 0.02 = Q2 2007 Adjusted EPS 0 0.76 Q2 2008 as reported 0 0.75 Restructuring and asset impairments 0.75 0.3 Gain on Sale of stake i
Slide 9: Q2 2008 Earnings Change
[ 8 ] Q2 2008 Earnings Change Q2 2007 0 0.76 0.76 0.04 0.03 0.01 0.74 0.05 0.03 0.02 Lower Underlying Tax Rate 0.74 0.05 Reduced Share Count 0.79 0.04 All Other 0.82 0.01 Q2 2008 0 0.82 Year-on-Year Change in Adjusted Earnings per Share(1,NG) Continued strong results from Electronic Technologies, Pe
Slide 10: Q2 2008 Earnings Change
[ 9 ] Q2 2008 Earnings Change Q2 2007 0 0.77 Demand 0.77 0.11 Currency 0.88 0.08 Tax 0.96 0.05 Lower Share Count 1.01 0.04 Chemicals RM/E/F - SP Gap 0.92 0.13 Other Interest Expense 0.89 0.03 Operations 0.86 0.02 All Other 0.82 0.04 Q2 2008 0 0.82 Year-on-Year Change in Adjusted Earnings per Share(1
Slide 11: Vision 2010 Scorecard for Q2 2008
[ 10 ] Vision 2010 Scorecard for Q2 2008 Metrics Q2 2008 Trailing 12 Months '06-'10 Target Revenue Growth Total Company Mature Economies RDEs 17% 10% 42% 14% 8% 35% Demand Growth 4% 6% 5-7% CAGR % Sales in RDEs 28% 26% 35% Adjusted EPS Growth(1, NG) 8% 6% 12-14% CAGR EBITDA(NG) $ Growth 3% (2)% 10-1
Slide 12: Trailing Twelve Month (TTM) Trends
[ 11 ] Trailing Twelve Month (TTM) Trends Q4 2006 0.03 Q1 2007 0.02 Q2 2007 0.02 Q3 2007 0.02 Q4 2007 0.04 Q1 2008 0.05 Q2 2008 0.06 TTM Demand Growth(1) TTM RDEs % of Total(1) TTM Adjusted EPS Growth(1,2,NG) TTM EBITDA Growth(1,NG) Q4 2006 0.21 Q1 2007 0.21 Q2 2007 0.22 Q3 2007 0.23 Q4 2007 0.24 Q1
Slide 13: Electronic Technologies Q2 2008 Highlights
[ 12 ] Invisible Black Grey Q2 2007 0 397 Demand 397 41 Price 438 0 Currency 438 22 Other 460 1 Q2 2008 0 460 Electronic Technologies Q2 2008 Highlights Sales Change Pre-Tax Earnings Comparison(1, NG) OPBT Q2 2007 96 Q2 2008 107 10% 0% 5% 16% Sales up 16 percent, driven by strong growth in Asia for
Slide 14: Display Technologies Q2 2008 Highlights
[ 13 ] Invisible Black Grey Q2 2007 0 3 Demand 3.13 0.5 Price 3.84 0 Currency 3.84 0.4 Other 4.06 72.7 Q2 2008 0 76 Display Technologies Q2 2008 Highlights Sales Change Pre-Tax Earnings Comparison(1, NG) OPBT Q2 2007 -2 Q2 2008 -6 SKC Haas Display Films JV launched on November 30, 2007; acquired Gra
Slide 15: Paint & Coatings Materials Q2 2008 Highlights
[ 14 ] Invisible Black Grey Q2 2007 0 604 Demand 585 19 Price 585 39 Currency 624 20 Other 644 15 Q2 2008 0 659 Paint & Coatings Materials Q2 2008 Highlights Sales Change Pre-Tax Earnings Comparison(1, NG) OPBT Q2 2007 105 Q2 2008 94 (3)% 7% 3% 9% Strong demand growth in RDEs and progress with prici
Slide 16: Packaging & Building Materials Q2 2008 Highlights
[ 15 ] Invisible Black Grey Q2 2007 0 464 Demand 460 3 Price 460 21 Currency 481 33 Other 514 0 Q2 2008 0 515 Packaging & Building Materials Q2 2008 Highlights Sales Change Pre-Tax Earnings Comparison(1, NG) OPBT Q2 2007 50 Q2 2008 36 (1)% 5% 7% 11% Strong demand in RDEs was not enough to offset wea
Slide 17: Primary Materials Q2 2008 Highlights
[ 16 ] Invisible Black Grey Q2 2007 0 248 Demand 242 48 Price 290 24 Currency 314 18 Other 330 2 Q2 2008 0 334 Primary Materials Q2 2008 Highlights Sales Change Pre-Tax Earnings Comparison(1, NG) OPBT Q2 2007 23 Q2 2008 23 19% 8% 35% Strong growth in 3rd party sales of 35%, particularly of monomers
Slide 18: Performance Materials Q2 2008 Highlights
[ 17 ] Performance Materials Q2 2008 Highlights Sales Change Pre-Tax Earnings Comparison(1, NG) OPBT Q2 2007 25 Q2 2008 34 Strong demand growth in AgroFresh and moderate demand growth in Process Chemicals & Biocides outside North America Currency a strong positive Demand, particularly in Process Che
Slide 19: Salt Q2 2008 Highlights
[ 18 ] Invisible Black Grey Q2 2007 0 178 Demand 178 3 Price 181 7 Currency 188 3 Other 190 1 Q2 2008 0 191 Salt Q2 2008 Highlights Sales Change Pre-Tax Earnings Comparison OPBT Q2 2007 4 Q2 2008 6 2% 2% 7% Increase of 7% in sales resulting from pricing management, improved mix, and higher sales of
Slide 20: Recent Strategic Developments
[ 19 ] Recent Strategic Developments Corporate Initiated actions to preserve Vision 2010 goals Realignment of manufacturing footprint and support services resulting in $0.30 per share charge Expects to deliver pre-tax run-rate savings in 2010 of approximately $110 million, with slightly less than ha
Slide 21: Recent Strategic Developments (continued)
[ 20 ] Recent Strategic Developments (continued) Began operations at new high technology emulsions plant in Queretaro, Mexico Announced plans to build acrylic emulsions facility in Vietnam in 2009 Initial registrations have been granted in the U.S., Argentina and Chile ^ ^ ^ ^ ^ ^ ^ ^ ^ Continue to
Slide 22: Macroeconomic Environment Continues to Evolve
[ 21 ] Macroeconomic Environment Continues to Evolve No recovery in US B&C markets US paint market volumes drop 7 - 8% vs 2007 US paint market volumes drop ~10% vs 2007 No recovery in US B&C markets Continued momentum in Electronics Wafer Starts up ~4 - 6% Wafer Starts up ~4- 6% Continued momentum i
Slide 23: accelerate: traction
[ 22 ] accelerate: traction NYSE: ROH www.rohmhaas.com
Slide 24: Non-GAAP Reconciliations
[ 23 ] Non-GAAP Reconciliations
Slide 25: Non-GAAP Reconciliations
[ 24 ] Non-GAAP Reconciliations
Slide 26: Non-GAAP Reconciliations
[ 25 ] Non-GAAP Reconciliations
Slide 27: Non-GAAP Reconciliations
[ 26 ] Non-GAAP Reconciliations Non-GAAP Reconciliations