Ferro : Q4 2020 Earnings Call Presentation

Fourth-Quarter & Full-Year

2020 Earnings

Regulatory Statements

Certain statements in this presentation may constitute "forward-looking statements" within the meaning of federal securities laws. These statements are subject to a variety of uncertainties, unknown risks, and other factors concerning the Company's operations and business environment. Important factors that could cause actual results to differ materially from those suggested by these forward-looking statements and that could adversely affect the Company's future financial performance include the following: Ferro's ability to successfully complete the sale of its Tile Coatings Systems Business, including obtaining the requisite regulatory approvals; demand in the industries into which Ferro sells its products may be unpredictable, cyclical, or heavily influenced by consumer spending; the effectiveness of the Company's efforts to improve operating margins through sales growth, price increases, productivity gains, and improved purchasing techniques; currency conversion rates and economic, social, political, and regulatory conditions in the U.S. and around the world; the availability of reliable sources of energy and raw materials at a reasonable cost; challenges associated with a multi-national company such as Ferro competing lawfully with local competitors in certain regions of the world; Ferro's ability to successfully implement and/or administer its optimization initiatives, including its investment and restructuring programs, and to produce the desired results; Ferro's ability to successfully introduce new products and services or enter into new growth markets; Ferro's ability to identify suitable acquisition candidates, complete acquisitions, effectively integrate the acquired businesses and achieve the expected synergies, as well as the acquisitions being accretive and Ferro achieving the expected returns on invested capital; the impact of damage to, or the interruption, failure or compromise of the Company's information systems due to events including but not limited to aging information systems infrastructure, computer viruses and cyber security breaches; the implementation and operations of business information systems and processes; increasingly aggressive domestic and foreign governmental regulation of hazardous and other materials and regulations affecting health, safety and the environment; our ability to address safety, human health, social, product liability and environmental risks associated with our current and historical products, product life cycles and production processes; competitive factors, including intense price competition; increased, and possibly inconsistent, domestic and foreign regulations of privacy and data security; changes in U.S. and other governments' trade policies; restrictive covenants in the Company's credit facilities could affect its strategic initiatives and liquidity; Ferro's ability to access capital markets, borrowings or financial transactions; sale of products and materials into highly regulated industries; limited or no redundancy for certain of the Company's manufacturing facilities and possible interruption of operations at those facilities; our ability to attract and retain key personnel; exposure to lawsuits, governmental investigations and proceedings relating to current and historical operations and products; Ferro's ability to protect its intellectual property, including trade secrets, or to successfully resolve claims of infringement brought against it; Ferro's multi-jurisdictional tax structure and its ability to reduce its effective tax rate, including the impact of the Company's performance on its ability to utilize significant deferred tax assets; Ferro's borrowing costs could be affected adversely by interest rate increases; management of Ferro's general and administrative expenses; the impact of the Tax Cuts and Jobs Act on our business; stringent labor and employment laws and relationships with the Company's employees; the impact of requirements to fund employee benefit costs, especially post-retirement costs; implementation of business processes and information systems, including the outsourcing of functions to third parties; risks associated with the manufacture and sale of material into industries making products for sensitive applications; risks and uncertainties associated with intangible assets; the effectiveness of strategies to increase Ferro's return on invested capital, internal rate of return and other return metrics, and the short-term impact that acquisitions may have on such metrics; liens on the Company's assets by its lenders affect its ability to dispose of property and businesses; amount and timing of any repurchase of Ferro's common stock; and other factors affecting the Company's business that are beyond its control, including disasters, pandemics (such as COVID-19), accidents and governmental actions.

The risks and uncertainties identified above are not the only risks the Company faces. Additional risks and uncertainties not presently known to the Company or that it currently believes to be immaterial also may adversely affect the Company. Should any known or unknown risks and uncertainties develop into actual events, these developments could have material adverse effects on our business, financial condition and results of operations.

This presentation contains time-sensitive information that reflects management's best analysis only as of the date of this presentation. The Company does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events information or circumstances that arise after the date of this presentation. Additional information regarding these risks can be found in our Annual Report on Form 10-K for the year ended December 31, 2020.

Also, this presentation includes certain financial measurers that were not prepared in accordance with generally accepted accounting principles. Reconciliations of the historical non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the Appendices included in this presentation. This presentation includes adjusted EBITDA, adjusted EPS and adjusted cash flow conversion guidance. It is not possible, without unreasonable effort, for the Company to identify the amount or significance of future charges that would be excluded from adjusted EBITDA, adjusted EPS and adjusted free cash flow from operations conversion or the potential for other transactions that may impact such guidance. Accordingly, the Company is unable to reconcile, without unreasonable effort, the Company's forecasted range of these adjusted non-GAAP financial measures to their most directly comparable GAAP financial measures.

2020 Fourth Quarter & Full-Year Summary

• ▪ Net Sales increased 6.2% to $260.0M

  FULL YEAR

  • • Net Sales declined 5.5% to $959.0M

• ▪ Net Sales increased 3.5% on a constant currency basis

• ▪ Gross Profit increased 5.6% to $79.1M, Gross Profit Margin of 30.4%

  • • Net Sales declined 5.3% on a constant currency basis

  • • Gross Profit declined 4.6% to $293.8M, Gross Profit Margin of 30.6%

• ▪ Adjusted Gross Profit increased 3.7% to $80.6M, Adjusted Gross Profit Margin of 31.0%

  • • Adjusted Gross Profit declined 4.6%, Adjusted Gross Profit Margin of 31.3%

• ▪ GAAP diluted EPS increased to $0.08 from a loss of $0.03, Adjusted diluted EPS increased 47.1% to $0.25

• ▪ Net Income1 increased to $17.7M, Adjusted EBITDA increased 22.1% to $45.2M, Adjusted EBITDA Margin increased 227 basis points to 17.4%

• • GAAP diluted EPS declined 14.6% to $0.35, Adjusted diluted EPS declined 2.2% to $0.81

• • Net Income1 increased to $42.8M, Adjusted EBITDA declined 2.7% to $153.7M, Adjusted EBITDA Margin increased 46 basis points to 16.0%

1 Note: Net Income attributable to Ferro Corporation common shareholders

Note: Comparative information is relative to prior-year quarter and full-year

2020 Fourth Quarter Financial Results

Dollars in Millions, except for EPS

GAAP	Total Net Sales	Gross Profit	Total SG&A	2 Net Income	Diluted EPS
Q4 2020	$260.0M	$79.1M	$48.0M	$17.7M	$0.08
%Δ	6.2%	-5.6%	-12.1%	NM	NM

Adjusted	Total Net Sales	Adjusted Gross Profit	Adjusted Total SG&A	Adjusted EBITDA	Adjusted Diluted EPS (Non-GAAP)
Q4 2020	cc $260M	cc $80.6M	$45.0M cc	$45.2M	$0.25
% Δcc	cc 3.5%	cc 3.7%	cc -11.6%	1 22.1%	1 47.1%

Note: Non-GAAP measures, see reconciliations in the appendix

• 1 Comparison in nominal currency

• 2 Net Income attributable to Ferro Corporation common shareholders

Note: Comparative information is relative to prior-year quarter cc Constant Currency

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