Element Solutions Inc. · NYSE:ESI

Element Solutions — Platform Specialty Products — Credit Suisse Investor Conference 2014

38 slides from Element Solutions's conference presentation, September 2014

  1. Slide 1: Platform Specialty Products Corporation – Credit Suisse Investor Conference

    Platform Specialty Products Corporation Credit Suisse Investor Conference September, 2014 1

  2. Slide 2: Disclaimer

    Disclaimer 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” within the meaning of the Private Securities Litigation Reform Act of 1995 and the federal securities laws, including st

  3. Slide 3: Executive Overview

    Executive Overview n Platform Specialty Products Corporation (“Platform” or “PAH”) is a global producer of high technology specialty chemical products and provider of technical services to the electronics, surface treatment, graphic arts, offshore oil production and drilling and agriculture u YE 2

  4. Slide 4: Combination Creates a Highly Diverse and Defensible Business

    Combination Creates a Highly Diverse and Defensible Business 2013 Combined Net Sales 2013 Combined Adjusted EBITDA ($ mm) $1,367 ($ mm) 1,400 350 $317(1) Scale 1,200 300 1,000 $746 250 $180 800 200 600 150 400 100 200 50 0 0 Platform Pro Forma Platform Platform Pro Forma Platform 2013 Platform Net S

  5. Slide 5: Diverse Customer, Product, End-market and Geography

    Diverse Customer, Product, End-market and Geography Revenue by Segment Revenue by Geography Platform Standalone Pro Forma Platform Standalone Pro Forma Graphic Graphic Solutions Solutions Asia 23% 13% Asia Americas 22% 28% 38% Performance Materials 42% Americas 46% Performance Agro Europe Materials

  6. Slide 6: Platform (MacDermid) – Business Overview

    Platform (MacDermid) – Business Overview Business Description 2013 – Sales and Adj. EBITDA Breakdown n Global producer of high specialty chemicals for plating 2013 Sales by Segment 2013 EBITDA by Segment and surface coatings, printed circuit boards and other Graphic Graphic Solutions electronic app

  7. Slide 7: Ag Chem Industry 2013

    Ag Chem Industry 2013 7 ADA MA CAS 2013 450MM$ Mon san to 51 B$ 51B Insecticides Acaracides s cie nce Product Extension $ groS Herbicides A Dow Fungicides Amenity Innovation Public Health Animal Health Seed Treatment Acquisition B$+ New Product Launch Agriphar Crop Solutions Extend Direct Model acro

  8. Slide 8: Agro Solutions is a Perfect Match to Platform's Strategic Criteria for Acquisitions

    Agro Solutions is a Perfect Match to Platform’s Strategic Criteria for Acquisitions Platform’s Investment Criteria n “Asset-Lite, High-Touch” Business Model that Drives Free Cash Flow þ n Experienced Management Team with Track Record of Success þ n Leading Positions in Niche Markets þ n Diver

  9. Slide 9: Agro Chemicals: Strategic Rationale

    Agro Chemicals: Strategic Rationale n Value-added R&D, global product registration process, sales and customer service “Asset-Lite, High-Touch” Business Model n Management team 25+ years agricultural industry experience Proven and Experienced n Demonstrated track record of performance Management

  10. Slide 10: CAS/Agriphar – Business Overview

    CAS/Agriphar – Business Overview CAS/Agriphar is a leading and fast growing provider of agrochemicals and seed treatment products for a wide variety of crop applications Business Description Key Products and End-Uses Key Performance Drivers Key Products Key End-Use Applications § Seed Treatment §

  11. Slide 11: CAS/Agriphar – Geographic Diversification

    CAS/Agriphar – Geographic Diversification Global distribution footprint with sales in 100+ countries with a presence in fast growing economies Sales by Region 100+ CAS Locations Worldwide Asia Pacific EMEA Americas 11

  12. Slide 12: Crop Protection: Favorable and Sustainable Industry Fundamentals

    Crop Protection: Favorable and Sustainable Industry Fundamentals Several global mega-trends require ever increasing yields and protections for crops Overview Global Population Growth and Arable Land Per Capita — Long term demand for agriculture products is expected to increase significantly due to:

  13. Slide 13: Our History

    Our History Sales $1,000 ($ in millions) $900 $1,000 $800 Oct 2013: MacDermid acquired by Platform $900 Jan 2014: $700 Re-Listed on NYSE $800 under ticker “PAH” $600 Apr 2014: $700 April 2007:MBO Platform announces acquisition of Chemtura AgroSolutions $500 $600 2005: Acquired Autotype May 2014: 199

  14. Slide 14: "Asset-Lite, High-Touch" Business Models

    “Asset-Lite, High-Touch” Business Models Commitment to R&D and Technical Service Value Crea)on Investment in Innovation Investment in Service Investment in customer driven R&D and product registration Investment in local service capability. Platform (MacDermid) Platform (MacDermid) n 23 local techn

  15. Slide 15: Benchmarking PAH Operating Drivers of CFROI Against Peers

    Benchmarking PAH Operating Drivers of CFROI Against Peers Source: HOLT CFROI framework and global database. Note: 2012 is 12/2012 except for RPM (05/2012), Airgas (03/2013), H. B. Fuller (11/2012), Valspar (10/2012), Ashland (09/2012), Cabot (09/2012), and Air Products and Chemicals (09/2012). (1) D

  16. Slide 16: Benchmarking PAH CFROI Against Peers

    Benchmarking PAH CFROI Against Peers Source: HOLT CFROI framework and global database. Note: 2012 is 12/2012 except for RPM (05/2012), Airgas (03/2013), H. B. Fuller (11/2012), Valspar (10/2012), Ashland (09/2012), Cabot (09/2012), and Air Products and Chemicals (09/2012). 16

  17. Slide 17: Identifying Asset-Lite, High-Touch Players Based on Turns, SG&A, & Margins

    Identifying Asset-Lite, High-Touch Players Based on Turns, SG&A, & Margins Source: HOLT ValueSearch™. (1) Defined as [sales / inflation-adjusted gross plant, property, and equipment]. (2) Defined as [ {SG&A – rent expense – research and development expense} / sales]. (3) Defined as [ {EBITDA plus re

  18. Slide 18: Valuation Impact of Business Models

    Valuation Impact of Business Models Key Characteristics ØHigh margin ØHigh margin ØGlobal market leaders ØGlobal market leaders ØHigh capital requirement ØLow capital requirement (global manufacturing (global service footprint) 14.0x footprint) 13.3x 9.7x +3.6x – 4.3x Migration to asset-lite h

  19. Slide 19: Valuation Across the U.S. Chemicals Sector (EV/2015E EBITDA)

    Valuation Across the U.S. Chemicals Sector (EV/2015E EBITDA) Average: 8.5x Average: Average: Average: 9.7x Average: 11.0x 18.0x 8.4x 7.3x 220 16.0 PAH 200 14.0x ECLSHW 14.0 13.3x13.3xNEU 12.7xPPO IFF MON 180 12.2x12.1x APD 11.6x RPMVALGRA 11.6x PX SXT 12.0 11.3x11.3x11.1x 11.0xPPG SEE 11.2x 10.9x AR

  20. Slide 20: Valuation Across the U.S. Chemicals Sector (EV/2015E EBITDA – CapEx)

    Valuation Across the U.S. Chemicals Sector (EV/2015E EBITDA – CapEx) Average: Average: Average: Average: 13.3x Average: 23.2x 35.0x 15.9x 11.8x 9.9x APD 33.9x 220 30.0 200 25.0 180 CMP CF 22.9x 21.2x 160 HXL PX ECL NEU 19.2x 20.0 18.5x 17.8x17.5x CHMT ARG 140 MOS IPI 16.6xSXT IFF PAHSHW 16.4x 15.3x

  21. Slide 21: The Architect, The Builder

    Design & Build The Architect The Builder

  22. Slide 22: Platform Acquisition Strategy

    Platform Acquisition Strategy Platform Specialty Products Water Coatings Market Electronic Oilfield Surface Crop Treatment Other Packaging (Niche Segment: Materials Services Treatment Protection & Cleaning AL-HT Applications) Solutions Market $7.5bn $15bn $1.0bn $5.0bn $10bn(1) $10bn $10bn Size: Not

  23. Slide 23: Large Fragmented Industry Creates Consolidated Opportunities

    Large Fragmented Industry Creates Consolidated Opportunities $10B+ 3-5 $5B - $10B 10 $1B - $5B 50 <$1B Hundreds Specialty Chemical Companies in Targeted End Markets (by Revenue)

  24. Slide 24: Platform's Historical Performance

    Platform’s Historical Performance Net Sales Adjusted EBITDA and % of Sales (3) ($ in millions) ($ in millions) $744 $746 $747 $729 $731 .0% $180 $186 $694 :9 4C AGR 30/1 M 6/ $162 $160 $172 $166 – LT $43 $160 $172 2008 $153 $43 $594 $158 $139 $42 $34 $145 $116 $28 $17 $106 $23 $584 $569 $559 $574 $5

  25. Slide 25: Platform's Growth With Modest Capital Expenditure Needs

    Platform’s Growth With Modest Capital Expenditure Needs ($ in millions) $14 $13 $13 $12 $11 $11 2.2% $9 $8 $8 $8 1.8% 1.7% 1.7% $6 1.5% 1.5% $5 1.4% $5 $4 1.3% $4 1.2% 1.1% 0.9% 0.9% 0.7% 0.7% 0.6% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (0.8%) ($6) Net CapEx

  26. Slide 26: Strong Free Cash Flow Generation

    Strong Free Cash Flow Generation ($ in millions) (1) 160 $146 $148 $151 200% $144 $123 $126 120 150% 80 125.0% 100% 115.7% 90.7% 94.1% 91.1% 83.8% 40 50% 0 0% 2008 2009 2010 2011 2012 2013 Free Cash Flow Cash Conversion Ratio (FCF / Adj. EBITDA) . “Asset-lite, High-touch” Business Model Leads to Sig

  27. Slide 27: Consistent Deleveraging

    Consistent Deleveraging Leverage 10.0x 7.7x 8.0x 5.6x 6.0x 6.9x 4.9x 4.4x 4.2x 4.0x 4.9x 4.1x 3.6x 3.5x 2.0x 0.0x 2009 2010 2011 2012 2013 Debt / Adj. EBITDA Net Debt / Adj. EBITDA Note: Financials are non-GAAP. For a reconciliation of non-GAAP measures, please refer to page 37 of this presentation.

  28. Slide 28: CAS Acquisition: Transaction Overview

    CAS Acquisition: Transaction Overview Platform and CAS combination creates a world scale specialty chemicals company with industry leading positions and highly defensible businesses n Total consideration value of approximately $1 billion − Cash purchase price of $950 million, subject to working cap

  29. Slide 29: CAS Historical Performance

    CAS Historical Performance 2013A vs. 2012A YTD Q2 2013 vs. YTD Q2 2014 Net Sales EBITDA (1) Net Sales EBITDA (1) ($ in millions) ($ in millions) $449 $241 $409 $223 $63 $51 $101 $79 23.8% 19.3% 22.6% 22.9% 26.1% 2012 2013 2012 2013 YTD Q2'13 YTD Q2'14 YTD Q2'13 YTD Q2'14 Note: Chemtura AgroSolutions

  30. Slide 30: Agriphar – Business & Transaction Overview

    Agriphar – Business & Transaction Overview Business Description n Niche player in the Agrochemical industry with a focus on European end-markets n Core portfolio of 10 key molecules with several additional under development n Owned-distribution subsidiaries in France, Spain, Greece and Italy n B

  31. Slide 31: Combined Financial Data – 2013

    Combined Financial Data – 2013 AGRO Enhances our Operating and Financial Metrics ($ millions, except per share data) Chemtura Platform AgroSolutions Agriphar Combined FY2013 FY2013 FY2013 FY2013 Net Sales $746 $449 $172 $1,367 Adjusted EBIT (1) $135 $88 $33 $256 % margin 18.1% 19.6% 19.2% 18.7% Adju

  32. Slide 32: Examples of Levered Cash Flow Calculations

    Examples of Levered Cash Flow Calculations CAS CASH ON CASH RETURN AGRIPHAR CASH ON CASH RETURN ($ in millions) ($ in millions) Levered Cash Flow Levered Cash Flow Adjusted EBITDA (assuming synergies of $10 million) 123 Adjusted EBITDA (assuming synergies of $15 million) 50 Interest (based on 4.5X l

  33. Slide 33: Why Is Platform Unique?

    Why Is Platform Unique? Technology Leader Global Leader in with “Asset-Lite, High- Attractive Growth Businesses Touch” Business Model Seasoned Management Favorable Industry Team Incentivized to Structure with High Drive Results Barriers to Entry Attractive Financial Profile Growing Exposure to with

  34. Slide 34: Platform Specialty Products Corporation

    if-@ PLATFORM SPECIALTY Vax PRODUCTS CORPORATION A PLATFORM SPECIALTY ZN PRODUCTS CORPORATION — S ia BimacDermia oe Semtura —AgRIPHAR

  35. Slide 35: Appendices

    PLATFORM SPECIALTY ODUCTS CORPORATION ral Appendices 35

  36. Slide 36: Platform Reconciliation of Net Income to Adjusted EBITDA Predecessor/Successor Combined

    Platform Reconciliation of Net Income to Adjusted EBITDA Predecessor/Successor Combined Year ended December 31 (in millions) 2008 2009 2010 2011 2012 2013 Net income (loss) $(36.1) $(82.8) $23.9 $1.0 $46.0 $(181.0) Adjustments to reconcile to net income (loss): Income tax expense (benefit) 1.1 (6.4)

  37. Slide 37: Chemtura AgroSolutions' Non-GAAP Financials

    Chemtura AgroSolutions’ Non-GAAP Financials ($ millions) Chemtura Chemtura AgroSolutions AgroSolutions 6 months Ended 12 months Ended 6/30/2014 12/31/2013 Net Sales per Chemtura 2014 Q2 10-Q and $241 $449 2013 10-K Segment Operating Income per Chemtura $58 $88 2014 Q2 10-Q and 2013 10-K 24.1% 19.6%

  38. Slide 38: Platform Reconciliation of Net Income to Adjusted EBITDA Predecessor (MacDermid)/Successor Combined

    Platform Reconciliation of Net Income to Adjusted EBITDA Predecessor (MacDermid)/Successor Combined YTD Period ended June 30 Year ended December 31 (in millions) 2013 2014 2012 2013 Net income (loss) $9.3 ($7.8) $46.0 ($181.0) Adjustments to reconcile to net income (loss): Income tax expense (benefi

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