Element Solutions Inc. · NYSE:ESI
Element Solutions — Platform Specialty Products — CJS Securities' 18th Annual New Ideas for the New Year Investor Conference 2018
20 slides from Element Solutions's conference presentation, Jan 10, 2018
Slide 1: CJS Winter “New Ideas for the New Year” Conference
CJS Winter “New Ideas for the New Year” Conference January 10, 2018 1
Slide 2: Safe Harbor
SAFE HARBOR Please note that in this presentation, we may discuss events or results that have not yet occurred or been realized, commonly referred to as forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or o
Slide 3: Non-GAAP Information
NON-GAAP INFORMATION To supplement the financial measures prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), the Company uses the following non-GAAP financial measures: EBITDA and adjusted EBITDA, adjusted EBITDA margin, adjusted EBITDA guidance, cash
Slide 4: Platform Since Founding
PLATFORM SINCE FOUNDING Platform has built a robust portfolio through its acquisitions of high quality, asset-lite / high-touch companies focused in two growing sectors and has successfully improved its portfolio through meaningful integration and investment Agricultural Solutions Performance Soluti
Slide 5: Platform’s Business Today
PLATFORM’S BUSINESS TODAY ✓ Highly profitable business ✓ Diversified revenue base ✓ Healthy and growing with minimal capital across geographies and end-markets with requirements leading to industries… exciting opportunities strong returns on for expansion… investment … 2016 Performance 2016 Net Sale
Slide 6: Platform’s Future Vision
PLATFORM’S FUTURE VISION Two Leading Specialty Chemical Companies with Exciting Growth Opportunities and Robust Cash Flows ~$1.8bn+1 Global Agricultural Chemical ~$1.8bn+1 Global Specialty Chemical Business Business Key End- Conventional crop protection, seed Electronics, automotive, general Markets
Slide 7: Arysta LifeScience Highlights
ARYSTA LIFESCIENCE HIGHLIGHTS Distinctive position as formulation-based Ag chemical company with global scale and niche crop focus Strong Industry Industry innovator that develops new solutions for farmers Positioning A preferred partner for numerous discovery-focused firms Significant globa
Slide 8: Performance Solutions Highlights
PERFORMANCE SOLUTIONS HIGHLIGHTS Market leader in specialty chemicals for surface treatment and electronic assembly Leading Market High-touch sales force embedded with customers Positions Leading specialty chemical supplier selling more than $1.5 billion of surface chemistry and assembly solut
Slide 9: Separation Update
SEPARATION UPDATE Operational Separation Capital Markets Separation Objectives Complete separation into two independent Complete separation into two independent companies in 2018 companies in 2018 Minimize cost of debt and maximize Target run-rate cost neutral to Platform flexibility Attai
Slide 10: Planned Leadership
PLANNED LEADERSHIP Strong Management Continuity Key Leaders: Arysta Key Leaders: Performance Solutions Chairman: Rakesh Sachdev Chairman: Martin E. Franklin CEO: Diego Lopez Casanello CEO: Rakesh Sachdev CFO: Mark Gibbens CFO: John P. Connolly Treasurer, Platform Specialty Products Former Chief Fina
Slide 11: Preliminary 2018 Guidance – Pre Separation
PRELIMINARY 2018 GUIDANCE – PRE SEPARATION Market Commentary • Performance Solutions: Healthy conditions across end-markets • Overall trends suggest continuation of 2017 market environment • Growth driven from overall market volume and specific market-share opportunities • Agricultural Solutions: Ov
Slide 12: 2018 Priorities
2018 PRIORITIES Execution: Build on Operating Momentum and Continue to Drive Above Market Revenue Growth Manage Cost and Drive Margin Expansion through Synergies and Continuous Improvement Generate Free Cash Flow and Reduce Leverage Ensure a Successful Separation to Maximize Shareholder Value 12
Slide 13: Appendix
PLATFORM SPECIALTY PR UCTS CORPORATION rl APPENDIX 13
Slide 14: Reconciliation to Adjusted EBITDA
RECONCILIATION TO ADJUSTED EBITDA (Amounts in millions) Q3’17 LTM Q3'17 YTD Q3'16 YTD FY 2016 FY 2015 FY 2014 Net loss attributable to common stockholders $(157) $(155) $(39) $(41) $(309) $(263) Adjustments: add / (subtract): Gain on amendment of Series B Convertible Preferred Stock — — (33) (33) —
Slide 15: Segment Comparable Sales Reconciliation
SEGMENT COMPARABLE SALES RECONCILIATION Performance Solutions Agricultural Solutions (amounts in millions) 2015 2014 2015 2014 Net Sales $801 $755 $1,742 $88 Acquisitions: Alent 847 1,063 OM 142 172 Arysta 87 1,533 CAS 380 Agriphar 170 Comparable Sales $1,791 $1,990 $1,829 $2,171 15 Note: Totals may
Slide 16: Segment Adjusted EBITDA Reconciliation
SEGMENT ADJUSTED EBITDA RECONCILIATION Performance Solutions Agricultural Solutions Total (amounts in millions) Q3'17 Q3'16 Q3'17 Q3'16 Q3'17 Q3'16 YTD YTD YoY% YTD YTD YoY% YTD YTD YoY% Adj. EBITDA $321 $291 10% $274 $261 5% $595 $551 8% Corporate allocations 23 24 23 24 46 49 Adj. EBITDA ex-corp c
Slide 17: Segment Adjusted EBITDA Reconciliation Cont.
SEGMENT ADJUSTED EBITDA RECONCILIATION CONT. Performance Solutions Agricultural Solutions Total (amounts in millions) 2015 2014 YoY% 2015 2014 YoY% 2015 2014 YoY% Adj. EBITDA ex-corp cost $236 $212 11% $379 $16 n/m $616 $228 n/m Acquisitions: Alent 143 175 143 175 OM 28 30 28 30 Arysta 3 293 3 293 C
Slide 18: Segment Organic Sales Growth
SEGMENT ORGANIC SALES GROWTH Nine Months ended 9/30/2017(1) Reported Net Sales Impact of Organic Sales Metals Acquisitions Growth Currency Growth Performance Solutions 6% 1% (2%) 0% 5% Agricultural Solutions 0% (1%) 0% 0% (2)% Total 3% 0% (1%) 0% 2% Year ended 12/31/2016(1) Reported Net Sales Impact
Slide 19: Return on Invested Capital Reconciliation
RETURN ON INVESTED CAPITAL RECONCILIATION Total ($ in millions) 2016 Adj. EBITDA $769 (+) Rent expense 37 (+) R&D expense 84 (-) Statutory tax rate impact (312) Adj. Operating Income $579 Invested Capital Total Assets $10,054 (-) current liabilities excluding current installments of long-term debt a
Slide 20: Non-GAAP Information
NON-GAAP INFORMATION EBITDA and Adjusted EBITDA: EBITDA represents earnings before interest, provision for income taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA, excluding the impact of additional items, which are not representative or indicative of our ongoing business a