Element Solutions Inc. · NYSE:ESI
Element Solutions — Electronics Q&A Session Hosted by Goldman Sachs (April 2024)
20 slides from Element Solutions's conference presentation, Apr 3, 2024
Slide 1: ESI Electronics Segment Capabilities and Insights
ESI Electronics Segment Capabilities and Insights April 3, 2024 Chemistry Enabling Enabling Sustainable Technology. Growth Growing Sustainably.
Slide 2: Legal Notices
Legal Notices 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 statement
Slide 3: Element Solutions Overview
Element Solutions Overview Chemical technology enabling performance & innovation $ 2.33B 2023 Net Sales $482M 2023 Adj. EBITDA* 2023 Segment Net Sales 2023 Regional Net Sales 2023 ■ Electronics 61% ■ Americas 31% $ 282M 2023 Free Cash Flow* Generated 21% Adj. EBITDA* Margin Industrial & ■ Specialty
Slide 4: Element Solutions Electronics Segment
Element Solutions Electronics Segment MacDermid Alpha Electronic Solutions at a glance $1.4 B 2023 NET SALES >30 COUNTRIES WITH FACILITY OPERATIONS >6,800 CUSTOMERS WORLDWIDE >2,200 EMPLOYEES 4
Slide 5: Electronic Solutions Historical Financial Performance
Electronic Solutions Historical Financial Performance Record of growth through a challenging cycle Net sales at 2023 pass-through metal prices* ($M)1 Organic Growth* vs. Market Indicators 19-23 1,538 1,550 1,415 5% 2019 2020 2021 2022 2023 CAGR 1,182 1,264 13% PCB M2 (3)% (4)% 13% (9)% (5)% (2)% 3%
Slide 6: Electronics Manufacturing – 30,000 Foot View
Electronics Manufacturing – 30,000 Foot View From Wafer to device Level 1: Traditional Semiconductor Packaging Wafer Die Lead-Frame Bond Wire Bond Plastic Enclosure Circuitry & Assembly Level 3: Level 2: Chip Package Printed Circuit Board (PCB) Final Enclosure 6
Slide 7: Enabling Chemistries For The Electronics Industry
Enabling Chemistries For The Electronics Industry Our customer base spans the full breadth of electronics manufacturing IDMs / OSATs Assemblers / EMS Semiconductor Packaging PCB Assembly Deposition Patterning Planarization Foundry / IDMs Wafer Level Die Attach Thermal & Component Packaging Environme
Slide 8: Our Lines of Business
Our Lines of Business Vertical: Semiconductor Assembly Circuitry Wafer Level Semiconductor Circuit Board Circuitry Memory Films & Smart Packaging Assembly Assembly Solutions Disk Surface Solutions Line of Business: Customer Foundries, IDMs IDMs, OSATs Assemblers PCB Fabs Data Storage Automotive Tier
Slide 9: Our Solutions Sit At The Convergence Of Chips And Boards
Our Solutions Sit At The Convergence Of Chips And Boards Semiconductor, assembly and circuitry products integral to electronics manufacturing Silicon chips in package attached to a complex multi-layer printed circuit board Assembly Solutions Semiconductor Solutions Circuitry Solutions 9 Source: Macd
Slide 10: Driving Growth Opportunities Created By “More than Moore”
… Driving Growth Opportunities Created By “More than Moore” Advantageous product positioning designed to enable next wave of computing performance NON-INTEGRATED CHIP PACKAGE HETEROGENEOUS INTEGRATION 2-3x $ value / IC unit ESI value Monolithic Design: opportunity multiple Disaggregated SoC: Single
Slide 11: Key Megatrends – Artificial Intelligence
Key Megatrends – Durable, secular growth drivers Key Megatrends Artificial Intelligence Electrification Sustainability High performance computing, storage and networking solutions for training & inference and the Description: proliferation of intelligent IOT and industrial automation Wafer Level Sem
Slide 12: Key Megatrends – Electrification
Key Megatrends – Durable, secular growth drivers Key Megatrends Artificial Intelligence Electrification Sustainability Description: Increasing electronics content in transportation and the infrastructure supporting energy transition Wafer Level Semiconductor Circuit Board Circuitry ESI Lines of Busi
Slide 13: Key Megatrends – Sustainability
Key Megatrends – Durable, secular growth drivers Key Megatrends Artificial Intelligence Electrification Sustainability Description: Greener chemistries with lower energy and water usage in electronics manufacturing Wafer Level Semiconductor Circuit Board Circuitry ESI Lines of Business Packaging Ass
Slide 14: Kuprion – Nano-Copper Example Applications
Kuprion – Nano-Copper Example Applications A new material to solve emerging customer pain points Organic ICS/PCB Glass Substrates Thermal Transfer ▪ Incompletely filled ▪ Substrate cracking due to ▪ Poor heat dissipation Pain Point through-vias in multi-layer thermal expansion mismatch impacting/lim
Slide 15: Electronics Near Term Growth Algorithm
Related Megatrend Electronics Near Term Growth Algorithm Artificial Intelligence Triangulating from trends to profit Electrification 5-Yr ESI Target Sustainability % Of Market Growth Near-Term Market Sources Of Outperformance Electronics Sales2 Expectation Outperformance Substrate metallization for
Slide 16: Appendix
Appendix Chemistry Enabling Enabling Sustainable Technology. Growth Growing Sustainably.
Slide 17: Glossary
Glossary Key Terms Acronym Term Definition 2.5D Advanced packaging technique that connects multiple integrated circuit dies in a single package side-by-side 3D Advanced packaging technique connecting stacked integrated circuits using through-silicon vias or copper-copper connections BEOL Back-end-of
Slide 18: Free Cash Flow & Electronics net sales growth reconciliations
Free Cash Flow & Electronics net sales growth reconciliations FY 2019 FY 2020 FY 2021 FY 2022 FY2023 Electronics Net Sales Growth (6%) 8% 31% 1% (12%) Impact of Currency 3% 0% (4%) 5% 2% Constant Currency (4%) 8% 27% 7% (10%) Change in Pass-Through Metals Pricing 0% 0% (12%) (1%) 4% Acquisitions (1%
Slide 19: Net Income Reconciliation to Adjusted EBITDA
Net Income Reconciliation to Adjusted EBITDA ($ millions) FY 2023 Net income $118 Add (subtract): (Income) from discontinued operations, net of tax (2) Income tax expense 13 Interest expense, net 49 Depreciation expense 43 Amortization expense 124 EBITDA 345 Adjustments to reconcile to Adjusted EBIT
Slide 20: Non-GAAP definitions
Non-GAAP definitions 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 included in GAAP earnings which the Company believes are not represen
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