Huntsman Corporation · NYSE:HUN
Huntsman — Merger or Acquisition (June 2017)
32 slides from Huntsman's merger presentation, Jun 9, 2017
Slide 1: Forward Looking Statements
Forward Looking Statements This presentation includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements include statements concerning our plans, objectives, goals, stra
Slide 2: Near Term Priorities
Greater than $450 million FCF expected in 2017 Repaid >$670 million of debt over the last year as of April 2017 Debt & Equity road shows and bank financing Initial Public Offering expected summer 2017 Monetize remaining ownership through secondary offerings Use proceeds to reduce debt Formation of t
Slide 3: 2017 Free Cash Flow Target of $450mm
Free Cash Flow 2017 Free Cash Flow Target of $450mm
Slide 4: Portfolio Composition
(1) Segment allocation is before Corporate and other unallocated items (2) See Appendix for a reconciliation (3) Pro forma adjusted to include the October 1, 2014 acquisition of the Performance Additives and Titanium Dioxide businesses of Rockwood Holdings, Inc. as if consummated at the beginning of
Slide 5: Polyurethanes
Polyurethanes MDI Urethanes End Markets Revenues MDI Competitive Intensity Adjusted EBITDA History 1Q17 LTM Revenues $3.8 billion Adjusted EBITDA $582 million 2016 Revenues 2016 Revenues $ in millions Source: Management Estimates Consumer 37% INSULATION ELASTOMERS AUTOMOTIVE INTERIORS COMPOSITE WOOD
Slide 6: Performance Products
Performance Products End Markets(1) Revenues(1) Global HUN Market Share Adjusted EBITDA History(1) 1Q17 LTM Revenues(1) $1.9 billion Adjusted EBITDA(1) $287 million 2016 Revenues 2016 Revenues $ in millions Source: Management Estimates Consumer 15% Product Market Share Peer Polyetheramines >60% BASF
Slide 7: Advanced Materials
Aero, Transp & Ind Advanced Materials End Markets Revenues Competitive Landscape Adjusted EBITDA History 1Q17 LTM Revenues $1.0 billion Adjusted EBITDA $217 million 2016 Revenues 2016 Revenues $ in millions Source: Management Estimates Consumer 18% Coatings & Electrical Diversified AUTOMOTIVE ADHESI
Slide 8: Textile Effects
Textile Effects End Markets Revenues Competitive Landscape Adjusted EBITDA History 1Q17 LTM Revenues $0.8 billion Adjusted EBITDA $76 million 2016 Revenues 2016 Revenues $ in millions Source: Management Estimates Consumer 100% AUTOMOTIVE SEATING APPAREL Regional Sales Distribution Global CHT/Bezema
Slide 9: Pigments & Additives
Pigments & Additives End Markets Revenues TiO2 Capacity Adjusted EBITDA History 1Q17 LTM Revenues $2.1 billion Adjusted EBITDA $184 million 2016 Revenues 2016 Revenues $ in millions Source: Management Estimates Consumer 34% (1) Pro forma adjusted to include the October 1, 2014 acquisition of the Per
Slide 10: Improved Pigments & Additives Earnings Profile
Improved Pigments & Additives Earnings Profile Historical EBITDA and Average Selling Price Improved Annual Trough Economics Note: financial information prior to the Oct. 1, 2014 acquisition of the Titanium Dioxide and Performance Additives businesses of Rockwood Holdings based upon their management
Slide 11: Separation Process
Separation Process Expected Timeline Separation Costs October 2016 One-time separation costs ~$100 million Venator estimated annual incremental corporate stand alone costs ~$33-$38 million Huntsman estimated annual savings ~$5-$10 million Initial Form 10 filing IRS private letter ruling SEC Filings
Slide 12: Update on Pori, Finland Facility
Fire at Pori, Finland TiO2 manufacturing facility on January 30, 2017 No injuries 130 kt facility representing ~2% of global TiO2 demand demand Site expected to be fully operational by 4Q 2018 through phased restart ~20% capacity 2Q 2017 ~40% capacity 2Q 2018 ~100% capacity around year end 2018 1Q17
Slide 13: Creating a Global Specialty Chemical Leader
Creating a Global Specialty Chemical Leader Select slides from transaction overview presentation
Slide 14: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements This communication contains certain statements that are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, a
Slide 15: General Disclosure (Cont'd)
General Disclosure (Cont’d) Important Additional Information and Where to Find It NO OFFER OR SOLICITATION This communication is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securiti
Slide 16: Key Transaction Highlights
Key Transaction Highlights Merger of equals creates leading global specialty chemical company with ~$20 billion enterprise value at announcement More than $3.5 billion of value creation through annual cost synergies in excess of $400 million Enhanced returns from complementary high growth end market
Slide 17: Transaction Overview
Transaction Overview All-stock merger of equals transaction New company to be named HuntsmanClariant At-market combination: Huntsman shareholders: 48%, Clariant shareholders: 52% Huntsman shareholders receive 1.2196 shares in HuntsmanClariant for each Huntsman share Strong transaction commitment fro
Slide 18: HuntsmanClariant – Attractive and Balanced Portfolio
Combined EBITDA margin(1) HuntsmanClariant – Attractive and Balanced Portfolio 2016 Sales 2016 EBITDA 11% Care Chemicals 14% Performance Products 28% Polyurethanes 7% Advanced Materials 9% Natural Resources 5% Catalysis 6% Textile Effects 20% Plastics & Coatings 13% Care Chemicals 13% Performance Pr
Slide 19: Focused on Key Growth Markets
Focused on Key Growth Markets Contributed by Huntsman Business Contributed by Clariant Highlights Care Chemicals Critical solutions provider to end-markets supported by secular lifestyle-driven megatrends 4 – 5% 18 – 19% Natural Resources Innovative, performance enhancing and tailored service soluti
Slide 20: Focused on Key Growth Markets: Formulations
Formulations / Markets Focused on Key Growth Markets HUN Performance Products / CLN Care Chemicals & Natural Resources – Moving Products Downstream into Formulations North America Oilfield Services Personal Care Agriculture Europe Oilfield Services Personal Care Agriculture Care Chemicals 19% CHF 27
Slide 21: Complementary Production Value Chain Will Drive Synergies
Steam cracker Propylene glycols Propylene carbonates Ethylene glycols Ethylene carbonates EO Ethylene Specialized products Raw Materials & Intermediates Propylene Huntsman’s Performance Products Ethoxylates PO Amines EO Ethoxylates Externally sourced Clariant’s Care Chemicals Propoxylates Amines Eth
Slide 22: Estimated Annual Cost Synergies in Excess of $400mn
Estimated Annual Cost Synergies in Excess of $400mn Description Cost Synergies More than $3.5bn in projected market value creation from realization of synergies $400mn full synergy run-rate to be achieved within 2 years of closing Procurement synergies of $150mn Increase effectiveness of combined sp
Slide 23: Estimated Annual Cost Synergies in Excess of $400mn
Estimated Annual Cost Synergies in Excess of $400mn Procurement ~$150mn Corporate Office, and Asset Consolidation (~$200mn) Other Operational (~$50mn) Cash tax savings in excess of $25 million from optimizing the use of combined NOLs Source: Management estimates. Operational ~$250mn Optimization of
Slide 24: Integration Case Studies: Clariant / Süd-Chemie & Huntsman / Rockwood
Integration Case Studies: CLN / Süd-Chemie & HUN / Rockwood Clariant / Süd-Chemie Integration Highlights Announced synergies ~6% of Süd-Chemie sales(3) with little/no business overlap Realized ~20% more cost savings compared to announced cost savings Integration ~10% below budget Integration and syn
Slide 25: Balanced Geographic Footprint
HuntsmanClariant – Balanced Geographic Footprint with Increased Strength in North America and China North America (27% of sales) China (11% of sales) Note: Based on 2016 sales mixes. Huntsman is pro forma for the announced separation of its Pigments and Additives business, Venator. Significantly inc
Slide 26: Focused on Growing End Markets
Focused on Growing End Markets Consumer Transportation Construction Industrial Energy Portion of 2016 Sales Application Examples Source: Management estimates. Note: Huntsman is pro forma for the announced separation of its Pigments and Additives business, Venator. Personal Care Textile Packaging The
Slide 27: Enhanced Financial Profile
Enhanced Financial Profile A $13bn Specialty Chemical Group Attractive Margin Expansion Opportunities Operating Cash Flow(2) Strong Balance Sheet with Commitment to Investment Grade Rating Additional potential for sales synergies from cross-selling to existing customers Margin 15.2% 13.4% 17.2% Syne
Slide 28: Conclusion and Next Steps
Shareholders’ Meetings Key Investment Highlights Conclusion and Next Steps Transaction Benefits: Global specialty chemical leader In excess of $400mn in annual cost synergies Combined end markets and geographies drive growth Innovation and sustainability enhance value creation Robust balance sheet a
Slide 29: Conclusion and Next Steps
CLARIANTS Conclusion and Next Steps Transaction Benefits: ™ Global specialty chemical leader ™ In excess of $400mnin annual cost synergies ™ Combined end markets and geographies drive growth ™ Innovation and sustainability enhance value creation ™ Robust balance sheet and strong cash flow > ergr ! ;
Slide 30: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation
Slide 31: Revenue, Adjusted EBITDA & Margin by Segment
Revenue, Adjusted EBITDA & Margin by Segment
Slide 32: Revenue, Adjusted EBITDA & Margin by Segment
Revenue, Adjusted EBITDA & Margin by Segment TT