Element : 2020 Third Quarter Financial Results Call

Third Quarter 2020

Earnings Presentation

October

2020

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 statements made by or on behalf of the Company. Such discussion and statements will often contain words such as "expect," "anticipate," "project," "will," "should," "believe," "intend," "plan," "assume," "estimate," "predict," "seek," "continue," "outlook," "may," "might," "aim," "can have," "likely," "potential," "target," "hope," "goal," "priority" or "guidance" and variations of such words and similar expressions, and relate in this presentation, without limitation, to FY 2020 cash flow outlook, including cash interest, cash taxes and net capex; Q4 2020 market outlook; Q4 2020 adjusted EBITDA guidance, full year 2020 free cash flow outlook; and capital allocation considerations, including approximate conversion of adjusted EBITDA to free cash flow, expected uses of free cash flow, potential dividend declarations and earnings growth.

These projections and statements reflect management's estimates, assumptions and expectations with respect to future events and financial performance and are believed to be reasonable, though are inherently uncertain and difficult to predict. Such projections and statements are based on the assessment of information available to management as of the current date, and management does not undertake any obligations to provide any further updates. Actual results could differ materially from those expressed or implied in the forward-looking statements if one or more of the underlying estimates, assumptions or expectations prove to be inaccurate or are unrealized. Important factors that could cause actual results to differ materially from those suggested by these forward-looking statements include, but are not limited to, the duration and spread of the coronavirus (COVID-19) pandemic; new information concerning its transmission and severity; actions taken or that might be taken by governments, businesses or individuals to contain or reduce its repercussions and mitigate its economic implications; evolving macroeconomic factors, including general economic uncertainty, unemployment rates, and recessionary pressures; decreased consumer spending levels; reduction or changes in customer demand for the Company's products and services; the Company's ability to manufacture, sell and provide its products and services, including as a result of travel restrictions, closed borders, operating restrictions imposed on its facilities or reduced ability of its employees to continue to work efficiently; increased operating costs (whether as a results of changes to the Company's supply chain or increases in employee costs or otherwise); collectability of customer accounts; additional and prolonged devaluation of other countries' currencies relative to the dollar; the general impact of the pandemic on the Company's customers, employees, suppliers, vendors and other stakeholders; the Company's ability to realize the expected benefits of its cost containment and cost savings measures; business and management strategies; debt and debt leverage ratio; shares repurchases; expected returns to stockholders; and the impact of acquisitions, divestitures, restructurings, refinancings, impairments and other unusual items, including the Company's ability to raise and/or retire new debt and/or equity and to integrate and obtain the anticipated benefits, results and synergies from these items or other related strategic initiatives. Additional information concerning these and other factors that could cause actual results to vary is, or will be, included in the periodic and other reports filed by Element Solutions with the Securities and Exchange Commission. Element Solutions undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

NON-GAAP FINANCIAL MEASURES

To supplement the financial measures prepared in accordance with generally accepted accounting principles in the United States ("GAAP"), the Company uses the following non-GAAP financial measures: EBITDA, adjusted EBITDA, adjusted EBITDA margin, Q4 2020 adjusted EBITDA guidance, adjusted EPS, adjusted common shares outstanding, free cash flow, free cash flow outlook for the full year 2020, net debt to adjusted EBITDA ratio and organic net sales growth. The Company also evaluates and presents its results of operations on a constant currency basis. The definitions and reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP can be found in the footnotes and appendix of this presentation and in the Company's earnings release dated October 27, 2020 (the "Release"), a copy of which can be found on the Company's website at www.elementsolutionsinc.com. This presentation should be read in conjunction with the Release.

Management internally reviews each of these non-GAAP measures to evaluate performance on a comparative period-to-period basis in terms of absolute performance, trends and expected future performance with respect to the Company's businesses and believes that these non-GAAP measures provide investors with an additional perspective on trends and underlying operating results on a period-to-period comparable basis. The Company also believes that investors find this information helpful in understanding the ongoing performance of its operations separate from items that may have a disproportionate positive or negative impact on its financial results in any particular period. These non-GAAP financial measures, however, have limitations as analytical tools, and should not be considered in isolation from, a substitute for, or superior to, the related financial information that the Company reports in accordance with GAAP. Investors are encouraged to review the reconciliations of these non-GAAP financial measures to their most comparable GAAP financial measures included herein and in the Release, and not to rely on any single financial measure to evaluate the Company's businesses.

In addition, this presentation includes YTD Q3 2020 cash flow uses and FY 2020 outlook and full year 2020 free cash flow outlook. This data is provided for informational purposes only and is not necessarily, and should not be assumed to be, an indication of the results that may be achieved in the future.

2

Third Quarter 2020 Financial Results

				Constant
				Currency*	Organic*
($ in millions)	Q3 2020	Q3 2019	YoY	YoY	YoY
Net Sales	$478	$465	3%	2%	(2)%
Electronics	307	280	10%	9%	2%
Industrial & Specialty	171	185	(8)%	(7%)	(10)%
GAAP Diluted EPS	$0.15	$(0.02)
Adj. EBITDA*	$102	$115	(12)%	(11)%
% margin	21.3%	24.8%	(350) bps	(330) bps
Electronics	72	74	(3)%	(3)%
% margin	23.4%	26.3%	(290) bps	(290) bps
Industrial & Specialty	30	42	(28)%	(26)%
% margin	17.6%	22.6%	(500) bps	(460) bps
Adj. EPS*	$0.22	$0.26	(15)%

• Organic net sales* declined 2%, as COVID-19 continued to weigh on global economic conditions
• Strong sequential improvement, particularly in automotive end markets
• Electronics grew primarily due to significant organic net sales growth* in Semiconductor

• 1. Kester acquisition and metals prices contributed 7% to Electronics net sales
• Industrial & Specialty declined year-over-year but improved 28% sequentially due to automotive production and general manufacturing recovery
• 1. DMP acquisition contributed 2% to net sales growth year-over-year
• Constant currency adj. EBITDA* decline of 11%
• 1. Year-over-yearmix, particularly between Circuitry and Assembly, resulted in adj. EBITDA* margin compression

• 1. True-upin year-to-date compensation accruals drove higher operating expense
• Adjusted EPS* of $0.22, down 15% year-over- year due to lower earnings

Note: Totals may not sum due to rounding or due to varying sizes of the two reportable segments

* These financial measures, on this slide and on subsequent slides, are not prepared in accordance with GAAP. For definitions, discussions of adjustments and reconciliations, please refer to the appendix of this presentation

3

Third Quarter 2020 Segment Details

Market Commentary

Electronics Net Sales ($ in millions)

		7%	1%		3%	307
280	1%
				(1)%
Q3 2019	Currency	Metals &	Assembly	Circuitry	Semi	Q3 2020
Net Sales		Acquisitions	Organic	Organic	Organic	Net Sales
			Growth *	Growth *	Growth*

• Assembly: strong sequential recovery primarily due to increased production in automotive markets
• Circuitry: modest decline due to prior-year strength in high-end mobile markets in Korea, partially offset by share gains and recovery from COVID-19 related weakness in China
• Semiconductor: growth due to market strength and higher net sales of advanced plating chemistries containing precious metals

Industrial & Specialty Net Sales ($ in millions)

1852%

▪ Industrial: decline primarily due to COVID-19-related

demand weakness in automotive and manufacturing

-%

171

markets, although overall markets rebounded through

the third quarter, particularly in Asia and the Americas

(5)% (3)% (1)%

Q3 2019	Currency Acquisitions Industrial	Graphics	Energy	Q3 2020
Net Sales	Organic	Organic	Organic	Net Sales
	Growth*	Growth*	Growth*

▪ Graphics: continued pressure in ancillary products,

such as screen printing & newspaper plates, as well as

reductions of product offerings and delayed marketing

campaigns by CPGs

▪ Energy: sustained weakness in energy prices leading

to decreased production volumes in Europe and Asia

Source: Management estimates
*	See non-GAAP definitions and reconciliations in the appendix	4