Element Solutions Inc. · NYSE:ESI
Element Solutions — Platform Specialty Products — Credit Suisse Basic Materials Conference 2015
31 slides from Element Solutions's conference presentation, Sep 18, 2015
Slide 1: Platform Specialty Products Credit Suisse Basic Materials Conference
Platform Specialty Products Credit Suisse Basic Materials Conference September 18, 2015
Slide 2: Safe Harbor
Safe Harbor Please note that this presentation is intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. In this presentation, we may discuss events or results that have not yet occurred or been realized, commonly referred to as “f
Slide 3: Important Information
Important Information No Offer or Solicitation This presentation is for information purposes only and is not intended to, and does not, constitute or form part of any offer or invitation, or the solicitation of an offer, to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, an
Slide 4: Introduction to Platform Specialty Products
Introduction to Platform Specialty Products Best-in-class, global diversified specialty chemicals − High-quality existing portfolio of businesses − Ripe opportunity for expansion Leadership positions in niche markets Focus on businesses defined by high cash flow margins and strong customer rel
Slide 5: Platform Timeline
Platform Timeline July June February Alent January Acquisition November OMG Announced Acquisitions October $500 Million Announced August $1.1 Billion Term Loan May Chemtura Senior Notes April AgroSolutions €83 Million Acquisition Term Loan $483 Million January $300 Million Equity Off
Slide 6: Platform End Market Evolution
Platform End Market Evolution Revenue(1) by Business Segment ($ in millions) Platform including Acquisitions Announced in 2014 and 2015 YTD Agricultural Solutions 57% (2) Performance Applications Platform including Ag 43% Acquisitions Announced in 2014 Performance Applications 26% Agricultural 2014
Slide 7: The “Asset-Lite, High-Touch” Business Model
The “Asset-Lite, High-Touch” Business Model Superior Asset-Lite High-Touch Return on Capital Formulated Significant, Highly Best-in-Class Chemistry Technical Sales EBITDA less Capex Capex less than 3% Force Margins of Sales SG&A greater than Industry Leading 20% of Sales CFROI People a
Slide 8: Platform Pro Forma Cash Flow
Platform Pro Forma Cash Flow Adj. PF EBITDA – CapEx(1) (% of PF Adj. EBITDA) ($ in millions) Cash Conversion (%) (2) $700 240% $600 $570 $553 200% $500 $486 160% $400 $395 $364 120% $312 $300 80% 87% 88% 87% 89% 89% 89% $200 40% $100 $0 0% 2009 2010 2011 2012 2013 2014 EBITDA-CapEx (EBITDA-CapEx)/EB
Slide 9: Platform End Market Overview and Opportunity
Platform End Market Overview and Opportunity Platform is executing a global build-up of high quality, high cash flow specialty chemical businesses across a diverse range of verticals Platform Specialty Products Flavors Coatings Water Market Assembly Surface Electronic Oilfield Packaging Agricultural
Slide 10: Announced Acquisition Status Update
Announced Acquisition Status Update Purchase Expected Announced Financing Regulatory Price Closing June 2015 $367 million $483 million All carve-out Q4 2015 cash on hand approvals from equity received Q1 2016 raise in July (second 2015 Apollo still transaction) EC and PM Businesses awaitin
Slide 11: Pro Forma Platform Financial Profile
Pro Forma Platform Financial Profile Platform + Alent + OMG PF Revenue(1) PF Adjusted EBITDA and Margin ($ in millions) ($ in millions) $842 $815 $3,741 $3,778 $741 $28 $3,611 $33 $29 $175 $174 $172 $172 $161 $657 $680 $168 $661 22% 22% 21% $2,775 $2,909 $2,926 $621 $642 $544 2012 2013 2014 2012 201
Slide 12: 2014 Regional Sales Footprint
2014 Regional Sales Footprint Diversified, global footprint balancing emerging markets and developed economies Pro Forma Agricultural Solutions Combined Platform Pro Forma $3,778 million Asia North 11% America 17% AIME 14% Europe: North America: 27% of sales Latin Europe America 20% of sales Asia: 2
Slide 13: Significant Synergy Potential
Significant Synergy Potential $50 million(1) of estimated synergies from Alent combination $20 million* of additional expected synergies from OMG EC and PM businesses $5 million* of Agricultural Solutions synergies realized in same quarter as Arysta close $150 Agricultural Solutions Estimated
Slide 14: Financing Considerations
Financing Considerations Secured debt capacity well in excess of current financing requirements Illustrative Financing EBITDA Build Illustrative First Lien Capacity ($ in millions) $1,000 (3) $137 $941 $4,500 $4,236 $1,978 $900 $166 $4,000 $800 $3,500 $700 (1) $610 $29 $3,000 $600 $2,500 $2,258 $500
Slide 15: Platform Specialty Products Overview
Platform Specialty Products Overview Best-in-class, global diversified specialty chemicals − High-quality existing portfolio of businesses − Ripe opportunity for expansion Leadership positions in niche markets Focus on businesses defined by high cash flow margins and strong customer relationsh
Slide 16: Questions
Questions Performance Applications Agricultural Solutions EC and PM Businesses 15
Slide 17: Appendix: Recent Acquisition Overviews
Appendix: Recent Acquisition Overviews 16
Slide 18: OM Group Electronic Chemicals and Photomasks Acquisition Overview
OM Group Electronic Chemicals and Photomasks Acquisition Overview On June 1, 2015, Platform announced it had signed definitive agreements to acquire OMG’s Electronic Chemicals (“EC”) and Photomasks (“PM”) businesses for $367 million in two separate and distinct transactions These businesses are
Slide 19: OMG EC & PM Overview
OMG EC & PM Overview OMG EC and PM Businesses Electronic Chemicals (EC) Compugraphics (PM) ~$135m Revenue in 2014 ~$36m Revenue in 2014 ~$25m EBITDA in 2014 ~$3m EBITDA in 2014 Leading developer and producer of proprietary wet metal- Develops, manufactures, markets and sells photomasks based spe
Slide 20: Alent Acquisition: Strategic Rationale
Alent Acquisition: Strategic Rationale Highly complementary businesses Augments legacy MacDermid capabilities, technology and geography Adds attractive new assembly materials business to Performance Applications product segments Exemplary “Asset-Lite, High-Touch” business model Similar “bo
Slide 21: Alent Transaction Summary
Alent Transaction Summary Platform has announced a recommended offer to acquire the entire issued share capital of Alent Offer value £5.03 per share Offer represents a total Alent enterprise value of $2.25 billion(1) Structure 78% cash and 22% stock Structure Cash offer with partial share
Slide 22: Alent Business Overview
Alent Business Overview Segment Key Products End-market Electronic interconnect materials Assembly Predominantly Printed circuit board assembly Electronics Materials Industry (ALPHA) Semiconductor packaging Focused Bringing Metals & Chemistry Together Specialty electroplating chemicals Serving M
Slide 23: Alent Financial Overview
Alent Financial Overview Revenue (NSV)(1) Adjusted EBITDA ($ in millions) ($ in millions) $661 $657 $680 $172 $168 $161 $331 $329 $343 $78 $73 $80 25% 25% 25% $102 $99 $103 $330 $328 $338 ($12) ($11) ($12) 2012 2013 2014 2012 2013 2014 Assembly Materials Surface Chemistries Assembly Materials Surfac
Slide 24: Alent Enhances the Performance Applications Segment
Alent Enhances the Performance Applications Segment 2014 Revenue(1) 2014 EBITDA ($ in millions) ($ in millions) $1,436 $368 $680 $172 $755 $755 $196 $196 Performance Applications(2) Performance Applications(2)+ Performance Applications(2) Performance Applications (2) + Alent Alent PF Sales (By Geogr
Slide 25: Appendix: Reconciliations to GAAP Financials
Appendix: Reconciliations to GAAP Financials 24
Slide 26: Platform Reconciliation of Net Loss to Adjusted EBITDA
Platform Reconciliation of Net Loss to Adjusted EBITDA for 6 months ended June 30, 2015 ($ in millions) June 30, 2015 Net (loss) available to common stockholders ($39) Adjustments to reconcile net (loss) to Adjusted EBITDA: Interest expense $93 Income tax expense 25 Depreciation and amortization exp
Slide 27: MacDermid Reconciliation of Net Income to Adjusted EBITDA
MacDermid Reconciliation of Net Income to Adjusted EBITDA Predecessor/Successor Combined December 31, ($ in millions) 2012 2013 2014 Net income (loss) available to common stockholders $46 ($181) ($7) Adjustments to reconcile net income (loss) to Adjusted EBITDA: Interest expense $50 $52 $36 Income t
Slide 28: Arysta Reconciliation of Net Loss to Adjusted EBITDA
Arysta Reconciliation of Net Loss to Adjusted EBITDA December 31, ($ in millions) 2012 2013 2014 Net (loss) available to common stockholders ($157) ($102) ($26) Adjustments to reconcile net (loss) to Adjusted EBITDA: Interest expense $136 $135 $116 Income tax expense 45 48 50 Depreciation and amorti
Slide 29: Chemtura AgroSolutions Reconciliation of Net Income to Adjusted EBITDA
Chemtura AgroSolutions Reconciliation of Net Income to Adjusted EBITDA December 31, ($ in millions) 2012 2013 2014 Net income available to common stockholders $39 $47 $25 Adjustments to reconcile net income to Adjusted EBITDA: Interest expense $1 – $2 Income tax expense 18 29 40 Depreciation and amo
Slide 30: Agriphar Reconciliation of Net Income to Adjusted EBITDA
Agriphar Reconciliation of Net Income to Adjusted EBITDA December 31, ($ in millions) 2012 2013 2014 Net income available to common stockholders $19 $24 $13 Adjustments to reconcile net income to Adjusted EBITDA: Interest expense $2 $2 $1 Income tax expense 9 11 7 Depreciation and amortization expen
Slide 31: Alent Reconciliation of Net Income to Adjusted EBITDA
Alent Reconciliation of Net Income to Adjusted EBITDA December 31, (£ in millions) 2012 2013 2014 Net income available to shareholders £45 £62 £47 Adjustments to reconcile net income to Adjusted EBITDA: Pro forma adjustment to operating profit before JVs and exceptionals (6) – – Depreciation 9 9 9 S
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