Element Solutions Inc. · NYSE:ESI
Element Solutions — Platform Specialty Products — CJS Securities New Ideas Conference 2016
20 slides from Element Solutions's conference presentation, Jan 13, 2016
Slide 1: CJS Securities "New Ideas" Conference
CJS Securities “New Ideas” Conference January 13, 2016
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: Platform Overview
Platform Overview Platform Specialty Products is a global, diversified specialty chemicals company focused on building a portfolio of ‘Asset-Lite, High-Touch’ businesses ($ in millions) Financials(1) Key End Markets Geographic Breakdown(2) North PF Revenue: $1,573 Electronics America Adj. EBIT
Slide 4: History of Growth through Complementary Acquisition Strategy
History of Growth through Complementary Acquisition Strategy ($ in millions) 4,000 Agricultural Solutions $680(1) $3,778 Performance Solutions 3,500 $172 3,000 $1,532 2,500 Annual Sales $ 2,000 1,500 $197 $442 1,000 $755 500 0 Oct-13 Apr-14 Aug-14 Oct-14 May-15 Jul-15 PF 2014 Revenue Acquisition Ann
Slide 5: Platform Business Focus
Platform Business Focus “Asset-Lite, High-Touch” Business Model that Drives Free Cash Flow − Businesses driven by people as opposed to manufacturing footprint − Low capex requirements and highly variable cost structure − Significant investment in selling and technical service Leading Positions i
Slide 6: Compelling Cash Flow Generation & Stable Financial Performance
Compelling Cash Flow Generation & Stable Financial Performance Stable financial performance through the economic cycles Adj. PF EBITDA – CapEx (% of EBITDA) ($ in millions) Cash Conversion (%) (1) $700 240% $600 $553 $569 200% $500 $486 $395 160% $400 $364 $312 120% $300 $200 80% 87% 88% 87% 89% 89%
Slide 7: Platform Growth Drivers
Platform Growth Drivers Despite near-term headwinds in several of Platform’s end-markets, the long term outlook for growth remains robust Long-Term Growing End-Markets Integration Capital Allocation 7
Slide 8: Compelling Integration Opportunity
Compelling Integration Opportunity Remaining synergy opportunity in excess of $100 million(1) Remaining Synergies ~ 15% of PF LTM Adj. EBITDA(2) ($ in millions) Performance Solutions Estimated Synergies * General & Administrative Corporate and G&A overhead $50 Public company costs * $70 COGS O
Slide 9: Long Term Growth – Secular Trends in Performance Solutions
Long Term Growth – Secular Trends in Performance Solutions Estimated Growth in Electronics Market Performance Solutions Market Categories ($ in billions) $2,068 $1,764 $827 $690 $246 $191 $310 $261 $431 $497 $191 CAGR: -0.3% $188 2014 2019 Traditional PCs Mobile phones & tablets Servers, Storage, In
Slide 10: Long Term Growth – Secular Trends in Agricultural Solutions
Long Term Growth – Secular Trends in Agricultural Solutions Wealth Effect Drives Declining Arable Land / Capita Protein Consumption Global Population Growth Projected Sources of Growth More Income – More Calories World Population (bn) in Crop Production % of every new dollar spent on food 10 100 Ara
Slide 11: Capital Allocation Drives Earnings Growth
Capital Allocation Drives Earnings Growth Capital allocation remains a critical focus of the Platform leadership team Improving Platform balance sheet remains priority use of free cash flow − Opportunity to drive organic EPS growth through debt pay-down − Reduced leverage profile creates increased
Slide 12: Near Term Priorities
Near Term Priorities Continue to Build Best-in-Class Leadership Team Complete Alent Financing and Close Alent Acquisition Integrate and Realize Synergies Provide Consistent and Profitable Growth Improve Balance Sheet through Earnings Growth and Cash Flow Generation 12
Slide 13: Appendices
PRODUCTS CORPORATION x PLATFORM SPECIALTY /_N Appendices 13
Slide 14: Pro Forma Balance Sheet as of September 30, 2015
Pro Forma Balance Sheet as of September 30, 2015 (amounts in $ millions) Maturity Rate Amount Revolver ($500 capacity) 6/7/2019 - USD Term Loan B 6/7/2020 L + 450 2,677 EUR Term Loan B 6/7/2020 L + 450 646 Other Debt / Capital Lease Obligations 24 Total First Lien Debt $3,347 USD Senior Notes 5/1/20
Slide 15: Platform Reconciliation of Net Loss to Adjusted EBITDA
Platform Reconciliation of Net Loss to Adjusted EBITDA for 6 months ended June 30, 2015 ($ in millions) 6 Months Ended June 30, 2015 Net loss available to common stockholders ($39) Adjustments to reconcile net (loss) to Adjusted EBITDA: Interest expense $93 Income tax expense 25 Depreciation and amo
Slide 16: MacDermid Reconciliation of Net Income (Loss) to Adjusted EBITDA
MacDermid Reconciliation of Net Income (Loss) to Adjusted EBITDA Predecessor/Successor Combined December 31, ($ 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 $36 I
Slide 17: Arysta Reconciliation of Net Loss to Adjusted EBITDA
Arysta Reconciliation of Net Loss to Adjusted EBITDA December 31, ($ 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 $116 Income tax expense 45 48 50 Depreciation and amortiza
Slide 18: CAS Reconciliation of Net Income to Adjusted EBITDA
CAS Reconciliation of Net Income to Adjusted EBITDA December 31, ($ 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 – $2 Income tax expense 18 29 40 (1) Depreciation and amortization expen
Slide 19: Agriphar Reconciliation of Net Income to Adjusted EBITDA
Agriphar Reconciliation of Net Income to Adjusted EBITDA December 31, ($ 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 (1) Depreciation and amortization e
Slide 20: 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
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