Element Solutions Inc. · NYSE:ESI
Element Solutions — Non-Deal Roadshow (November 2023)
22 slides from Element Solutions's roadshow presentation, November 2023
Slide 1: Q4 Roadshow
Q4 Roadshow Nov 2023 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 at a glance
Element Solutions at a glance Chemical technology enabling performance & innovation $ 2.55B 2022 Net Sales $527M 2022 Adj. EBITDA* 2022 Segment Net Sales 2022 Regional Net Sales 2022 ■ Electronics 63% ■ Americas 30% $ 253M 2022 Free Cash Flow* Generated 21% Adj. EBITDA* Margin Industrial & ■ Special
Slide 4: Element Solutions' key attributes
Element Solutions’ key attributes Growth: Well-positioned for profitable growth in new technology markets with 1 technological leadership and incumbency in key enabling technologies for the future Defensibility: Sticky consumable products deeply embedded in 2 high-value customer manufacturing proces
Slide 5: Positioned for profitable growth
Positioned for profitable growth Robust secular growth drivers Next Generation 9% CAGR ▪ High reliability, low latency circuit board chemistry to enable next-gen mobile phones and 5G handset infrastructure Wireless growth forecast ▪ Fine feature solder paste to enable greater computing power in smal
Slide 6: Differentiated electronics materials portfolio
Differentiated electronics materials portfolio Broad product range well positioned for growth in advanced packaging solutions Semiconductor Fabrication Process Chemistry Steps ESI Products “Front End of Metal Deposition ViaForm Line” Packaged Chips Blank Wafer Wafer level (advanced) Alpha, Microfab,
Slide 7: Solutions for the "More than Moore" Era
Solutions for the “More than Moore” Era Advantageous product positioning designed to enable next wave of computing performance NON-INTEGRATED CHIP PACKAGE HETEROGENEOUS INTEGRATION Monolithic Design: Disaggregated SoC: Single Die / Passives / Memory Enabling solutions Multiple Die of Varying Silicon
Slide 8: Customer-led innovation for developing applications
Customer-led innovation for developing applications Chemical enablement for emerging electronics applications The technology for tomorrow’s megatrends is developing today Customer-Led Product Innovation GENERATIVE AI AR/VR Materials requirements at the leading edge of innovation drive the On-Site Ce
Slide 9: Diversified revenue base, concentrated in growth markets
Diversified revenue base, concentrated in growth markets Our segments ELECTRONICS END-MARKET DIVERSITY ■ ~30% Mobile Devices ■ +$1,600M ■ ~25% Automotive ~20% Medical, Aerospace, and Engineering Assembly Circuitry Semiconductor SALES ■ ~15% Consumer and Other Solutions Sales Solutions Sales Solution
Slide 10: Deeply embedded in customer supply chains
Deeply embedded in customer supply chains Consumable products, qualified through the supply chain Electronics Industrial Solutions Offerings Printed Circuit Fabricators IC Packagers Semiconductor Fabricators Tier 2 and Tier 3 Automotive Suppliers Tier 1 Device Assemblers and Tier 1 Automotive Suppli
Slide 11: Track record of financial outperformance
Track record of financial outperformance GROWTH IN EXCESS OF END-MARKETS… GROSS MARGIN STABILITY Gross profit as % sales1 (YoY Growth %) 2019 2020 2021 2022 41.0% 41.0% 40.6% 41.1% ESI Organic Sales* (4%) (3%) 13% 5% 39.7% 38.5% Auto Units (6%) (16%) 4% 7% Smartphone Units (2%) (6%) 6% (11%) PCB (sq
Slide 12: Profit resilience against industry cyclicality
Profit resilience against industry cyclicality Quarterly adjusted EBITDA* trough relative to peak (2021 – Q3 2023) Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 ESI 0% (10)% (20)% (25)% (30)% (32)% (31)% (31)% (35)% (34)% (40)% (43)% (50)% (50)% (53)% ESI Q3 2023 adj
Slide 13: Asset-light business model drives meaningful cash generation
Asset-light business model drives meaningful cash generation… MODEST CAPITAL EXPENDITURE REQUIREMENTS CONSISTENT FCF* GENERATION… $ in millions 60 2.5% >$1B 55 1.9% over 4 years 2.0% 50 1.7% $280 46 $238 $249 $253 1.5% 43 45 1.4% 1.5% 1.2% 40 35 1.0% 30 2019 2020 2021 2022 27 25 0.5% 24 25 BEST IN C
Slide 14: …which is prudently deployed to compound adjusted EPS
…which is prudently deployed to compound adjusted EPS* Disciplined and balanced approach to capital allocation Capital Return1 Consolidation Growth Driving Economies of Scale New Adjacencies Emerging Materials Technology Industrial Surface Treatment Thermal management & $733M electronics adhesives S
Slide 15: Industry leading returns on tangible assets
Industry leading returns on tangible assets1 Benchmarking business quality 21.5% 21.4% 18.2% 17.7% 9.7% 8.5% 4.7% 4.1% 3.8% 3.6% 3.4% 2.6% Peer 2 ESI Peer 9 Peer 4 Peer 6 Peer 5 Peer 10 Peer 1 Peer 8 Peer 7 Peer 11 Peer 3 Efficiently managed asset base, minimal capital intensity, drives industry lea
Slide 16: Enabling sustainability
Enabling sustainability Sustainability as a value-driver SUSTAINABILITY Increasing Elimination of Waste / water aligns with ESI’s vision recycled content hazardous materials reduction Customer Improving ~50% value outcomes for of all tin and tin alloys our people sold from sustainable, recycled sour
Slide 17: Creating value for customers, employees and shareholders
Creating value for customers, employees and shareholders ESI strives to be the leading chemical technology solutions provider in three specific, measurable categories Gross Margins 450 bps VALUE TO 1 CUSTOMERS Q3 ’23 YoY Net Promoter Scores improvement Internal Fill Rate OPPORTUNITIES 92% 2 FOR EMPL
Slide 18: Appendix
Appendix Chemistry Enabling Enabling Sustainable Technology. Growth Growing Sustainably.
Slide 19: Net income reconciliation to adjusted EBITDA
Net income (loss) attributable to common stockholders reconciliation to adjusted EBITDA ($ millions) 20181 2019 2020 2021 2022 Q1 2022 Q4 2022 Net income (loss) attributable to common stockholders $(324) $92 $76 $203 $187 $56 $13 Add (subtract): Net income (loss) attributable to the non-controlling
Slide 20: Free cash flow & net sales growth reconciliations
Free cash flow & net sales growth reconciliations ($ millions) FY 2019 FY 2020 FY 2021 FY 2022 Cash flows from operating activities $ 171 $ 276 $ 326 $ 296 Capital expenditures (30) (29) (46) (48) Disposal of property, plant and equipment 5 2 - 5 Free cash flows $ 146 $ 249 $ 280 $ 253 Adjustments t
Slide 21: GAAP net income reconciliation to adjusted diluted EPS
GAAP net income (loss) reconciliation to adjusted diluted EPS ($ millions, except per share amounts) FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Net (loss) income attributable to common stockholders $(324) $92 $76 $203 $187 Net (loss) income from discontinued operations attributable to common stockholde
Slide 22: 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 as management believes the exclusion of certain expenses in calculating adjusted EPS facilitates operating performance comparisons on a period-to-period
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