Rohm and Haas Company. Luis Fernandez Vice President and Business Group Director Paint and Coatings Materials Credit Suisse Chemicals Conference 1

Transcription

1 Rohm and Haas Company Luis Fernandez Vice President and Business Group Director Paint and Coatings Materials Credit Suisse Chemicals Conference 1

2 Forward Looking Statement The presentation today may include forward-looking statements as that term is defined in securities law, including but not limited to anticipated plans, litigation and environmental matters, currency effects, profitability, and other commitments or goals. Such statements are subject to a number of risks and uncertainties, many of which are listed in Rohm and Haas 10-K filing with the Securities and Exchange Commission. Copies of all recent SEC filings, and additional information about Rohm and Haas, are available through our web site: 2

3 Regulation G The presentation today may include the display of some company data that do not directly conform to generally acceptable accounting principles, or GAAP. Management believes that the presentation of some non-gaap data provides investors with additional insight into the ongoing operations of the business. These measures should not be viewed as an alternative to GAAP measures of performance. Furthermore, these measures may not be consistent with similar measures provided by other companies. All non-gaap data in the presentation are indicated by a footnote. Tables showing the reconciliation between the GAAP and non-gaap measures are available, with today s presentation, on the investor section of our web site at 3

4 Rohm and Haas Today We are a Global Company 2006: Sales $8.2 B NORTH AMERICAN REGION EUROPEAN REGION $4,199 MM 51% $2,030 MM 25% RDEs $184 $1,659 MM 20% RDEs $1,202 $342 MM 4% RDEs $342 LATIN AMERICAN REGION ASIA PACIFIC REGION RDEs = Rapidly Developing Economies 4

5 Rohm and Haas Today Three Core Business Groups, Diverse End Markets 2006 Sales By Business Group 2006 Sales By End Market Electronic Materials Group 19% Salt 10% Primary Materials 11%* Paint & Coatings Materials 25% Specialty Materials Group 57% Building and Construction, 33% Electronics, 19% Packaging & Paper, 13% Industrial, 10% Performance Materials Group 14% Packaging & Building Materials 21% Pharmaceutical and Medical, 1% Food and Food Related, 4% Household Goods and Personal Care, 6% Water, 7% Transportation, * 7% * External Sales * includes Ice Control Salt 5

6 : Solid Performance in MM $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $ CAGR Sales 10% EPS 40% Dividends 12% Sales Dividends Per Share EPS (1) Diluted earnings per share (in dollars) from continuing operations (1) Per share $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 6

7 Total Shareholder Return vs. S&P Year TSR Period Ending December 31, ROH 10.8% S&P % Q Q Q Q Q Q ROH S&P500 7

8 Vision 2010: Accelerating Value Creation Position Portfolio for Accelerated Growth Build Value Creating Business Models in Rapidly Developing Economies Innovate with Market/Customer Focus Operational Excellence/Continuous Improvement Deploy Right Talent in Right Places 8

9 Paint and Coatings Materials End Use Markets Decorative Coatings % of Total ~70% 2006: Sales $2,050 MM EUROPEAN REGION Industrial Coatings ~20% Building Products ~10% NORTH AMERICAN REGION $1,324 65% $355 17% $252 12% $119 6% ASIA PACIFIC REGION LATIN AMERICAN REGION 9

10 Paint and Coatings Materials Positioning for Growth Drivers Accelerated innovation technology and marketing Global manufacturing footprint Rapidly developing economies 10

11 Paint and Coatings Materials Technology Leadership Evolving Model Then global R&D in U.S. local tech service local manufacturing U.S. needs drive R&D technology push technology led innovation takes time Now distributed R&D local manufacturing market needs drive R&D market pull technology/marketing led focus on innovation yield and speed 11

12 Paint and Coatings Materials Innovation Increased Performance and Environmentally Friendly Avanse TM family of highperformance acrylic binders Can be formulated for better hiding and abrasion resistance with lower VOC levels Low VOC capable acrylic binders Equal or better performance vs. higher VOC polymers Broad set of polymers fine-tuned for specific applications (decorative, industrial, etc.) Advanced Rheology Modifiers Low VOC capable Improved performance with deep colors 2006 Prix Pierre Potier Award Winner for Innovation in the Environment 12

13 Paint and Coatings Materials Innovation Increased Performance and Environmentally Friendly acrylic thermoset binders A green alternative to formaldehyde resins Other environmentally friendly products Water-borne stains Cool-roof coatings Fastrack TM XSR Traffic Paint binders 13

14 Paint and Coatings Materials Manufacturing Footprint Close to the Customer Manufacturing Locations Mfg Locations under construction Technical Centers 14

15 Paint and Coatings Materials Rapidly Developing Economies a Key Opportunity S Korea Germany Spain US Litres/Capita Source: James Consulting Poland Portugal Russia TurkeyS Africa Brazil Mexico Greece India Argentina China Italy France 0 10,000 20,000 30,000 40,000 50,000 GDP/Capita Large potential for coatings growth in developing markets as standard of living rises UK 15

16 Paint and Coatings Materials Rapidly Developing Economies a Key Opportunity 100 Mix By Market (% of volume) India China Thailand Mexico Brail Argentina Budget Medium Prem ium Australia Quality paint (ROH focus) use grows with increasing GDP per capita US Source: Kansai Nerolac Paints 16

17 Paint and Coatings Materials Technology Leadership North America volume index (1990 = 100) Interior flat paints move to 100% Acrylic Acrylic message reaches critical mass Retailers using quality paint ROH Acrylic CAGR = 5.2% US paint market CAGR = 2.4% 100 First interior premium brands launched Source: US Census Bureau, Company data 2006 is estimated 17

18 Paint and Coatings Materials Two Most Frequent Questions We Are Asked by Investors 1. What is your outlook for the US Paint market for the rest of 2007 and 2008? 2. How does continued consolidation in the coatings space impact your business? 18

19 Outlook for US Decorative Paint Market Gallons MM 800 US Architectural Paint Market Volume Trend 600 Expect 3% - 5% market volume decline in 2007 and Actual Forecast Source: US Census Bureau 19

20 Remodeling / Redecorating a Key Driver 160 Real Residential Improvement Investment 2000 $B 4QMA Q1 1982Q1 1984Q1 1986Q1 1988Q1 1990Q1 1992Q1 1994Q1 1996Q1 1998Q1 2000Q1 2002Q1 2004Q1 2006Q1 2008Q1 Actual Forecast Source: Global Insight US Macro Forecast, August

21 Coatings Industry Continues to Consolidate Professional Paint Inc. 21

22 Summary Rohm and Haas Paint and Coatings Materials is well-positioned for continued profitable growth over the next several years, despite softness in the US market Innovation leadership Global footprint Rapidly developing economies focus 22

23 Please join us for our 2007 Investor / Analyst Day Wednesday, November 28, 2007 Millennium Broadway Hotel, NYC 12 Noon to 6:30 PM 23

24 Glossary of Terms A/T Profit Margin CAGR Debt To Capital Ratio EBITDA EBITDA% RDEs APR RDEs LAR RDEs - CEET Net Earnings from Continuing Operations before cumulative effect of accounting changes/ Net Sales Compounded Annual Growth Rate Total Debt/ (Total Debt + Shareholder s Equity) Earnings Before Interest, Taxes, Depreciation, Amortization and Asset Impairments EBITDA/Net Sales; also known as EBITDA Margin Sales into countries in ROH defined Asia Pacific Region excluding Japan, Australia and New Zealand Sales into countries in ROH defined Latin America Region Sales into countries in ROH defined Central, Eastern Europe (including Russia and other former Soviet Republics) & Turkey RDEs % EPS Before Restructuring. & Asset Impairment Payout Ratio ROCE Sales Demand Growth TSR Rapidly developing economies as a percent of total company sales Diluted EPS, excluding the impacts of restructuring and asset impairment charges Dividend Per Share/ Diluted EPS from continuing operations Return On Capital Employed Sales growth excluding the impact of pricing and currency Total Shareholder Return (capital appreciation + dividends) 24