Element : Bank of America 2021 Global Agricultural and Materials Conference Presentation

Bank of America 2021 Global

Agricultural and Materials

Conference

Element Solutions Overview

March

2021

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," "guidance" or "confident" and variations of such words and similar expressions, and relate in this presentation, without limitation, to "New Economy" growth drivers, including 5G mobile technologies, vehicle electrification, semiconductor applications, circular economy and green chemistry; defensible margins and high returns on capital; cost management and long-term organic growth management; cash flow generation and allocation; full year 2021 financial guidance related to adjusted EBITDA, adjusted EPS and free cash flow; profitable growth from 5G adoption; electronic content growth in Automotive; meeting sustainability challenges and environmental compliance standards; steady margins and growing free cash flow; outperformance relative to end-markets; capital allocation; return of capital to shareholders; and long-term financial objectives, including doubling adjusted EPS to $1.36 from 2018 to 2023.

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 of the pandemic; the efficacity, availability and/or public acceptance of vaccines targeting COVID-19; the impact of variants of COVID-19 that may affect its spread or virulence or the effectiveness of vaccines on the virus; the impact of 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 U.S. 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; outstanding 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 of Element Solutions filed 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.

Certain product information, competitive position data, peers' data and market trends contained in this presentation have been prepared internally and have not been verified by any third party. Use of different methods for preparing, calculating or presenting such information may lead to different results and such differences may be material. In addition, certain industry and market data described in this presentation was obtained from industry and general publications and research, surveys and studies conducted by third parties. While the Company believes this information is reliable and appropriate, such information has not been verified by any independent source. You are cautioned not to place undue reliance on this information or data.

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, adjusted earnings per share (EPS), adjusted common shares outstanding, free cash flow, free cash flow on an adjusted basis, free cash flow conversion, full year 2021 financial guidance related to adjusted EBITDA, adjusted EPS and free cash flow, 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.

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 not to rely on any single financial measure to evaluate the Company's businesses.

Element Solutions Overview

Chemical Technology Enabling Performance & Innovation

*Indicates financial measures which are not prepared in accordance with GAAP. For definitions, discussions of adjustments and reconciliations, please refer to the appendix of this presentation

Full Year 2020 Highlights

Operational Excellence

✔

In the context of a significant COVID-19 impact…

Maintained R&D and Capex investment levels

9%	2%
Strategic acquisition of DMP launching new
sustainability platform for wastewater
treatment and recycling systems
Growth in	Constant currency
Adj. EPS*	adj. EBITDA* growth
Five Cent
5%
$249M	per share quarterly dividend initiated in Q4 2020
Free cash flow*	$56M
Free cash flow*
growth year-on-year1
Of share repurchases
at an average price of $9.74 per share
2.9x
Net debt to Adj. EBITDA* at year-end

Expanded adjusted EBITDA* margin

Committed to preserve employment

* See non-GAAP definitions and reconciliations in the appendix

Prudent Capital Allocation

✔

&

1. Assumes growth over 2019 free cash flow on an adjusted basis of $238 million, which excludes the impact of the Arysta divestiture and assumes the Company's current capital structure had been in place as of January 1, 2019.