Element : CJS Securities Conference Presentation

CJS Securities 21st Annual New Ideas for the New Year Conference

Element Solutions Overview

January

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" or "guidance" and variations of such words and similar expressions, and relate in this presentation, without limitation, to full year 2020 adjusted EBITDA guidance; "New Economy" growth drivers, including growth from 5G adoption, electronic content growth in automotive, advanced semiconductor application growth, circular economy and making chemistry greener; capital allocation; expected 2020 performance; steady margins and growing free cash flow; outperformance relative to end-markets; 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 and spread of the coronavirus (COVID-19) pandemic; new information concerning COVID-19 and its variants; transmission and severity; actions taken or that might be taken by governments, businesses or individuals to contain or reduce their repercussions and mitigate their 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.

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 Element Solutions 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, full year 2020 adjusted EBITDA guidance, free cash flow conversion, free cash flow outlook for the full year 2020, adjusted EPS, 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.

In addition, this presentation includes expected 2020 performance data, including with respect to adjusted EBITDA growth, free cash flow and net debt to adjusted EBITDA ratio. This data is provided for informational purposes only and should not be construed as a guarantee of the final results that may be achieved in the future.

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Element Solutions Overview

Chemical Technology Enabling Performance & Innovation

$ 1.8B $ +415M

LTM Sep 2020 Net Sales

Full Year 2020

Adj. EBITDA*

Guidance

• 4,400
• • 50

Employees	2019 Segment Net Sales	2019 Regional Net Sales
	■ Electronics	59%	■ Americas	29%
		Industrial &
	■	41%	■ EMEA	29%
Countries	Specialty
■ Asia	42%

			Hydraulic Valve and	Flexographic
			Pressure Control Fluids	Printing Plates
Circuit Formation	Semiconductor
Packaging
Chemistries
Materials
			Films, Water	Protective and Decorative
			Treatment
				Plating Chemistries
			and Other
Protective and	Electronic
Functional Plating	Assembly
Chemistries	Materials
	Electronics			Industrial & Specialty

* 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

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'New Economy' Growth Drivers Propelling Stable, High-Returning

Business Model

Growth From New Economy

5G Mobile Technologies

Vehicle Electrification

Semiconductor Applications

Circular Economy

Green Chemistry

Attractive Businesses Managed Efficiently

• Defensible margins and high returns on capital
• Balancing cost management and long-term organic growth investments
• Deploying strong, stable cash-flows effectively

Expected 2020 Performance

• Constant Currency Adjusted EBITDA* growth
  • +$240m of Free Cash Flow*
• Net leverage ratio decline to ~3.0x Adjusted
• • 
    EBITDA*
  • Preserved nearly full employment
• Maintained R&D and Capex investment levels
• Paid a $0.05 per share dividend in Q4 2020

*

See non-GAAP definitions and reconciliations in the appendix

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