Consolidated Earnings & Capital Allocation Outlook. Mark E. Newman, CFO

Transcription

1 Consolidated Earnings & Capital Allocation Outlook Mark E. Newman, CFO

2 Generating Value

3 Delivering Against Our Commitments Revenue ($ Millions) Adjusted EBITDA ($ Millions) 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 $5,717 ~4% CAGR $5,400 $5,930 ~$6,100 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $573 10% $822 15% $1,267 21% ~$1,400 23% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% Q17 TTM 2017E $ Q17 TTM 2017E 0% Does not reflect Corporate & Other segment TT FP CS Total CC Adjusted EBITDA Margin See reconciliation of Non-GAAP measures in our appendix 3

4 Maintaining High Returns on Invested Capital Focused on improving our portfolio Set of highly investable businesses providing strong returns Maximized returns through good stewardship of our assets 35% 30% 25% 20% 30% or greater Expecting ROIC 1 of 30% or greater through % 10% 5% 0% 1. Defined as Adjusted EBITDA on a trailing twelve-month basis less depreciation & amortization divided by average invested capital over the last five quarters 2. Based on current portfolio See reconciliation of Non-GAAP measures in our appendix 4

5 Notional Amount Liquidity Net Debt Enhanced and Improving Liquidity and Credit Position ($ Billions) $2.0 $1.5 $1.0 $0.5 $0.0 12/31/ /31/2016 YTD2017 Cash Revolver Availability Net Debt $2.0 $1.5 $1.0 $4.0 $3.0 $2.0 $1.0 $0.0 Improved liquidity 12/31/2015: ~$1.0B 1 9/30/2017: ~$2.2B 1 Reduced Net Leverage 2 position due to debt management and earnings growth 12/31/2015: 6.3x 9/30/2017: 2.0x Upgraded to Ba2 from Moody s in October 2017; Upgraded to BB from S&P in November 2017 $0.5 $ Revolver Term Loan Senior Notes 1. Defined as cash on hand plus revolver availability less letters of credit 2. Defined as (gross debt minus cash) divided by Adjusted EBITDA See reconciliation of Non-GAAP measures in our appendix 5

6 Announcing 2018 Outlook Adjusted EBITDA $ $1.85 Billion KEY FACTORS & ASSUMPTIONS TiO 2 average price above the 2017 exit price Continued Opteon adoption Free Cash Flow $500 - $600 Million Fluoropolymers expansion Strong demand in Mining Solutions 1. Subject to risks, uncertainties and assumptions, all of which are described in our public filings and safe harbor statement made at the start of the Investor Day 2017 meeting Expect 2018 Performance to Deliver ~25% Growth in Adjusted EBITDA See reconciliation of Non-GAAP measures in our appendix 6

7 Investing Organically to Support High Value Growth Opportunities ($ Millions) $1,800 $1,600 $1,400 $1,200 $1, : ~$475 - $525 MILLION Expected completion of Fluoroproducts Corpus Christi site by end of 2018 Expected completion of Mining Solutions Durango facility by end of 2018 $800 $600 $400 $200 $ E 2018E Capital Expenditures Adjusted EBITDA FUTURE: Modest investments in TiO 2 plants Targeted reinvestment driving cost efficiencies in Chemical Solutions and Fluoroproducts Investments Expected to Bolster Long-Term Growth and Margin Profiles 7

8 Looking at Future Growth $8,000 Revenue ($ Millions) $1,600 Adjusted EBITDA ($ Millions) ~$1,400 Opportunity for ~500 basis point expansion $7,000 $6,000 ~4% CAGR $5,717 $5,400 $5,930 ~$6,100 $1,400 $1,200 $1,267 $5,000 $1,000 $822 $4,000 $3,000 $800 $600 $573 21% 23% $2,000 $400 15% $1,000 $200 10% $ Q17 TTM 2017E 2020E $ Q17 TTM 2017E Does not reflect Corporate & Other segment TT FP CS Total CC Adjusted EBITDA Margin See reconciliation of Non-GAAP measures in our appendix 8

9 Supporting Long-Term Growth with Portfolio Strength FLUOROPRODUCTS Aligning fluoropolymer application development to provide customer solutions in fast-growing markets Maximizing refrigerant regulatory environment to grow Opteon and optimize other fluorochemical product offerings CHEMICAL SOLUTIONS Supplying growing demand for sodium cyanide Supporting key customers in Mexico with capacity expansion Focusing on value stabilization to align with long-term customer needs TITANIUM TECHNOLOGIES Targeting customer growth with high-quality TiO 2 Meeting increased Chinese demand for chloride TiO 2 with BaiMax Adding incremental capacity to meet customer demand with low-cost, flexible circuit Portfolio Will Generate Significant Free Cash Flow Through

10 Enhancing Our Options Through Financial Strength Strategic Cash Generation Shareholders Our portfolio can: Deliver strong top and bottom line growth across all businesses Generate significant Free Cash Flow P O R T F O L I O Reinvestment Support increased capital allocation to shareholders starting in 2018 Implement disciplined financial policy to support organic and inorganic investments, returns to shareholders and strengthening balance sheet 10

11 Returning Meaningful Cash to Shareholders Declared 1Q18 dividend of $0.17 Cash Generation A increase dividend per share >5x Strategic Shareholders Expect annual dividend 1 to be ~$125 million PORTFOLIO Reinvestment $500 million share repurchase authorization through Future dividend declarations subject to Board approval New Dividend Policy and Share Repurchase Authorization Will Return Meaningful Capital to Shareholders 11

12 Resetting Capital Allocation Priorities NEW: Focus on Balanced Capital Allocation AT SPIN: Focus on Debt Reduction Invest in organic growth Return cash to shareholders De-lever the company Strategic P O R T F O L I O Invest in organic growth Consider opportunistic M&A growth Meaningful return of cash to shareholders Maintain a BB/BB+ balance sheet 12

13 Driving Shareholder Value Throughout 2020 REVENUE ADJUSTED EBITDA MARGINS ADJUSTED EPS ROIC CUMULATIVE FCF CASH RETURN TO SHAREHOLDERS 1x 2x GDP growth rate Improvement by ~500 basis points >15% CAGR Maintain above 30% Generate $2 $2.75 billion ~$125 million per year dividend 1 $500 million share repurchase 1. Based on $0.17/share, subject to quarterly Board approval We Will Deliver Robust Growth, Generate Strong FCF and Provide Attractive Returns See reconciliation of Non-GAAP measures in our appendix 13

14