JP Morgan Global High Yield and Leveraged Finance Conference February 27, 2018
General Disclosure This presentation includes forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. These forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, business trends and other information that is not historical information. When used in this presentation, the words estimates, expects, anticipates, projects, plans, intends, believes, forecasts, or future or conditional verbs, such as will, should, could, or may, and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, management s examination of historical operating trends and data, are based upon our current expectations of future events and various assumptions which may not be realized or accurate. Our expectations, beliefs and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management s expectations, beliefs and projections will be achieved. We undertake no obligation to update or revise forward-looking statements which may be made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in this presentation. Such risks, uncertainties and other important factors include, among others: future global economic conditions, delays in reconstruction of our Pori, Finland manufacturing facility or losses for business interruption or construction costs that exceed our coverage limit applicable to the fire at that facility, changes in raw material and energy prices, access to capital markets, industry production capacity and operating rates, the supply demand balance for our products and that of competing products, pricing pressures, technological developments, changes in government regulations, geopolitical events and other risk factors as discussed in our prospectus filed pursuant to Rule 424(b)(4) on December 1, 2017 and our annual report on Form 10-K filed on February 23, 2018. This presentation contains financial measures that are not in accordance with generally accepted accounting principles in the U.S. ("GAAP"), including EBITDA, adjusted EBITDA, adjusted EBITDA margin, free cash flow and net debt and certain ratios and other metrics derived therefrom. We have provided reconciliations of non-gaap financial measures to the most directly comparable GAAP financial measures in the Appendix to this presentation.
Venator Snapshot FY17 Revenue (mm) (1) $2,209 Pro forma adj. EBITDA (mm) (2) $500 % margin 23% Segment 3End Markets(4) Representative Customers FY17 4Q17 Run-rate (3) Revenue (mm) $1,604 Adj. EBITDA (mm) $387 $476 % margin 24% 30% Personal Care, Food, Pharmaceuticals & Active Materials Inks Titanium Dioxide Fibers & Films 8% Plastics 34% Other 3% Architectural Coatings 28% Industrial Coatings 15% FY17 4Q17 Run-rate (3) Revenue (mm) $605 Adj. EBITDA (mm) $72 $60 % margin 12% 10% Agriculture & Water 4% Personal Care, Food, Pharmaceuticals & Active Materials Plastics 15% Performance Additives Other Architectural Coatings 14% Industrial Coatings 11% Construction 44% Note: See Appendix for a reconciliation of pro forma Adj. EBITDA and Run-rate Adj. EBITDA. (1) Excludes revenue from other businesses and entities not included in the separation of Venator from Huntsman; (2) Titanium Dioxide segment Adjusted EBITDA and Performance Additives segment Adjusted EBITDA adjusted to include estimated public company standalone costs of $40 million, pro forma for unrealized $66 million benefit from business improvement program, and excludes 1Q17 impact from Pori fire of $15 million; (3) Represents annualized segment 4Q17 adj. EBITDA, % margin based on FY17 revenue; not adjusted for seasonality; excludes allocation of standalone corporate costs and unrealized benefit from business improvement program; (4) FY17 revenues
Titanium Dioxide Segment overview End Markets Revenues FY17 FY17 Revenues Source: Management Estimates FY17 Revenues Personal Care, Food, Pharmaceuticals & Active Materials Fibers & Films 8% Inks Other 3% Architectural Coatings 28% US & Canada 17% Rest of World 11% Europe 50% Segment Revenues $1.6 billion Consumer 4 Plastics 34% TiO 2 Capacity Industrial Coatings 15% Asia Pacific 22% Adjusted EBITDA History Segment Adjusted EBITDA $387 million 2016 Nameplate Capacity; Excludes VNTR South African facility Others 38% Tronox Kronos 8% Chemours 17% Cristal 12% Lomon Billions 8% Venator 11% $ in millions Adj. EBITDA Margin $306 17% $699 30% $449 22% $117 $134 7% (1) (1) (1) (1) (1) ($8) $61 N/A 4% $387 24% $476 30% 2010 2011 2012 2013 2014 2015 2016 2017 4Q17 Run Rate (2) COATINGS INKS Note: See Appendix for a reconciliation of Adj. EBITDA and Run-rate Adj. EBITDA. Financial information prior to October 1, 2014 adjusted to include the acquisition of the Titanium Dioxide and Performance Additives businesses of Rockwood Holdings, based upon their management s representation (1) Adjusted to include the Oct. 1, 2014 acquisition of the Performance Additives and Titanium Dioxide businesses of Rockwood Holdings, Inc. as if consummated at the beginning of the period; excludes the related sale of our TR52 product line used in printing inks to Henan Billions Chemicals Co., Ltd. in December 2014; and excludes the allocation of general corporate overhead by Rockwood; (2) Represents annualized Titanium Dioxide 4Q17 adj. EBITDA, % margin based on FY17 LTM revenue; not adjusted for seasonality; excludes allocation of standalone corporate costs and unrealized benefit from business improvement program 4
Market Leader in High-Value Specialty TiO 2 Venator has more than half of its sales in high value TiO 2 categories Venator Focus Legend: Price Low Quality Functional Differentiated Specialties % Total global TiO 2 industry demand % Venator TiO 2 sales 17% 42% 32% 0% 49% 30% 9% 21% Indicative EBITDA margins Applications 1,000 2,000 3,000 4,000 5,000 6,000 Estimated World Demand (kmt) 1x 2x 3x+ Functional coatings (architectural) Functional plastics Paper Industrial coatings Performance plastics Differentiated Inks Catalysts Food Pharma & Cosmetics Fibers & Films Solar Speciality Inks 5 Source: Management estimates
Price Momentum Expected to Continue Quarterly TiO 2 Average Sales Price ($/MT) Historical cyclical peak Venator TZMI 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18F 4Q17 vs. 4Q13 TiO 2 sales price up $50/ton, Segment Operating Adjusted EBITDA up $74mm $ in millions Adjusted EBITDA Commodity TiO2 Average Sales Price ($/ton) $114 $142 $134 $60 $73 $78 $57 $17 $21 $35 $5 $0 $15 $31 $38 $46 $69 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Note: Financial information prior to October 1, 2014 adjusted to include the acquisition of the Titanium Dioxide and Performance Additives businesses of Rockwood Holdings, based upon their management s representation 6 Source: Company filings, management estimates and TZMI
Global TiO 2 Operating Rate Outlook Improving utilization rates through gradual demand improvement Global TiO 2 Effective Operating Rate Outlook 8,000 Global Demand Global Effective Operating Rate ex. China (%) Global Effective Operating Rate (%) 100% 80% Volume (kmt) 6,000 4,000 60% 40% Operating Rate 2,000 20% 0 2011 2012 2013 2014 2015 2016 2017E 2018P 2019P Western producers operating at ~95%+ utilization rates, while Chinese operating rates continue to improve No new capacity expected: Neither greenfield nor brownfield economics are supported by current TiO 2 prices Significant time for plants to come online (3-4 years) Differential between Western and Chinese product quality now transparent to all customers and producers Customers have moved beyond thrifting / substitution Chinese environmental enforcements idled estimated 250kMT-300kMT of annualized capacity in 3Q17 trend expected to continue in 2018 0% 7 Source: TZMI, management estimates
Sulfate Production to Benefit from Sustained Sulfate Ore Advantage Principal Feedstock Types Sulfate Chloride Sulfate Ore Prices Advantaged and Less Volatile (TiO 2 Ore Prices, $/MT) $2,000 Feedstock Ilmenite Chloride Slag $1,800 $1,600 Capital Intensity Low High $1,400 $1,200 Energy Usage Low High $1,000 Number of Producers >20 <5 $800 $600 Largest Producer Share <15% ~70% $400 $200 Primary Sulfate Feedstock Favorable market structure for sulfate ores $0 2009 2014 2019P Rutile (95% content) Chloride Slag (85% content) Sulfate Slag (79% content) Ilmenite (52% content) 8 Source: TZMI, management estimates
Performance Additives Segment overview End Markets Segment Revenues FY17 FY17 Revenues Source: Management Estimates FY17 Revenues Personal Care, Food, Pharmaceuticals & Active Materials Consumer 25% Agriculture & Water 4% Plastics 15% Other Architectural Coatings 14% Industrial Coatings 11% Construction 44% US & Canada 50% Segment Adjusted EBITDA History Rest of World 2% Europe 32% Asia Pacific 1 Segment Revenues $0.6 billion Segment Adjusted EBITDA $72 million $ in millions $103 $119 $89 $98 $91 Segment Adj. EBITDA $69 Segment Adj. EBITDA Margin $72 $69 CONSTRUCTION 15% 1 13% 15% 14% 12% 12% 12% (1) (1) (1) (1) (1) 2010 2011 2012 2013 2014 2015 2016 2017 COATINGS Note: See Appendix for a reconciliation of pro forma Adj. EBITDA and pro forma Run-rate Adj. EBITDA. Financial information prior to October 1, 2014 adjusted to include the acquisition of the Titanium Dioxide and Performance Additives businesses of Rockwood Holdings, based upon their management s representation (1) Adjusted to include the Oct. 1, 2014 acquisition of the Performance Additives and Titanium Dioxide businesses of Rockwood Holdings, Inc. as if consummated at the beginning of the period; excludes the related sale of our TR52 product line used in printing inks to Henan Billions Chemicals Co., Ltd. in December 2014; and excludes the allocation of general corporate overhead by Rockwood 9
Performance Additives Product overview 17 EBITDA % split Product Characteristics & Uses Competition Benefit Functional Additives 32% Barium and Zinc Additives Fillers that enhance the gloss and flow of paints and the mechanical properties of plastics Specialty soft white pigments Strong EBITDA margins Complementary and common process technology Similar customer base to TiO 2 Iron Oxides Highly durable red, yellow, black and tan pigments Colorants for paint, plastics and concrete Color Pigments 32% Ultramarines Specialty Inorganics Chemicals Unique blue-shade pigments Violet and pink variants Weather-resistant, chemically stable pigments Distinct color shades High cash conversion margins Good geographic balance Similar customer base to TiO 2 Common process technology Driers Controls the drying rate of a paint or ink Timber and Water Treatment 3 Residential construction (ACQ, ECOLIFE TM and Copper Azole) Industrial construction (Chromated Copper Arsenate) Polyaluminium chloride based flocculants Protects wood from decay and fungal or insect attack Prolongs service life of wood Clarifies water by promoting the sedimentation of particles Limited number of major competitors Stable demand profile High cash conversion 10 Source: Company filings
$90 Million EBITDA Improvement Program $24 million of EBITDA benefit captured in FY17 Expected Run-rate Improvement Expected Annual EBITDA Capture $ in millions $ in millions $30 $30 $90 $30 Facilities closures Fixed costs Volume EBITDA Improvement Business Improvement Program Incremental EBITDA benefit to 2016 Realized $9 million of incremental benefits in 4Q17 $24 million of EBITDA benefit captured in 2017 Full run-rate expected to be captured by 1Q19 Total estimated cash restructuring costs of ~$100 million $24 2017 2018F 2019F Actual Forecast Highlighted Activities Facility rationalization program completed Umbogintwini, South Africa (TiO 2 ) closed Calais, France (TiO 2 white end) closed Easton, PA. and St. Louis, MO. (color pigment) closed Leverage position in higher value markets Launch of new TiO 2 products 11 Source: Management estimates
Financial Profile Attractive Position $ in millions Net Debt Tax Rate Comment $565 $519 Liquidity of $481mm as of December 31, 2017 $(186) $(238) 1.6x (1) 1.3x (1) 2 1.5 18% 15-20% $238mm cash $243mm ABL borrowing base Net debt decreasing Attractive tax profile 15-20% 15-20% $751 $757 1 9% 10-15% $1bn of Net Operating Losses 10-15% No material change from U.S. tax reform Cross currency swaps executed in December 2017 0.5 Annual interest savings of $5mm, $21mm by maturity in July 2022 3Q17 Cash Debt 4Q17 0 2017 Expected Adjusted effective tax rate Cash tax rate Weighted average cost of debt reduced to 4.4% from 5.0% (1) Net debt to LTM EBITDA; 3Q17 pro forma adjusted for corporate stand alone costs 12
Cash Uses We expect to generate > $200 million FCF in 2018 before Pori $ in millions Cash Uses 2017 2018E Priority of Cash Uses Capital expenditures (1) $(103) ~$(120) Cash interest (28) ~(35)-(40) Primary working capital change 35 ~(20)-(30) Restructuring (33) ~(35)-(40) Other (includes pension) (33) ~(40)-(50) Subtotal Cash Uses Before Taxes and Pori (162) ~(250)-(280) Cash income taxes (21) 9% 10-15% Opportunistic Strategic Transactions 1. Earnings Growth Pori reconstruction Capex projects targeting >20% IRR 2. Strengthen Balance Sheet Debt reduction Net debt target $350 million 3. Shareholder Actions Share repurchases Dividend consideration (1) Excluding Pori reconstruction costs 13
Why Venator? Significant EBITDA margin improvement over past three years Successful Business Transformation Business improvement program underway with projected Adjusted EBITDA improvement of $90 million $24mm of incremental EBITDA benefit realized by the end of 4Q17 Leader in Specialty TiO 2 with Sulfate Ore Advantage Market leader in high-value specialty TiO 2 Sulfate production to benefit from sustained sulfate ore advantage Complementary Performance Additives Business Global provider of performance additives, with market leading positions in attractive products Stable EBITDA and consistent cash flows, benefiting from improvement program Strong Free Cash Flow Generation Strong free cash flow generation will enable the rebuild of our Pori, Finland facility and debt reduction improving equity value 14
15 Appendix
Pro Forma Adj. EBITDA Reconciliation $ in millions 2010 2011 2012 2013 2014 2015 2016 4Q16 4Q17 FY17 Net Income/(Loss) $ (162) $ (352) $ (77) $ (4) $ 70 $ 144 Net income attributable to noncontrolling interests (2) (7) (10) (2) (2) (10) Net income of discontinued operations (10) (8) (8) Interest 2 30 44 13 11 40 Taxes (17) (34) (23) (9) 24 50 Depreciation and Amortization 93 100 114 30 32 127 EBITDA $ (86) $ (273) $ 40 $ 28 $ 135 $ 343 Acquisition and integration expense 45 44 11 3 5 Separation gain (27) (27) Purchase accounting adjustments 13 (Gain) loss on disposition of business (1) 1 (22) 1 Certain legal settlements and related expense 3 3 2 1 1 Amortization of pension and postretirement actuarial losses 11 9 10 2 4 17 Net plant incident costs 4 1 3 4 Restructuring, impairment, and plant closing costs 62 220 35 4 3 52 Adjusted EBITDA $ 47 $ 8 $ 77 $ 39 $ 118 $ 395 Corporate and other 29 53 53 7 16 64 Operating Segment Adjusted EBITDA $ 76 $ 61 $ 130 $ 46 $ 134 $ 459 Historical Segment EBITDA as reported (1) 409 818 538 215 Titanium Dioxide Segment EBITDA 62 (8) 61 34 119 387 Performance Additives Segment EBITDA 14 69 69 13 15 72 Pro forma adjusted EBITDA relating to Rockwood acquisition 149 Public company standalone costs (pro forma 2010-2017) (40) (40) (40) (40) (40) (40) (40) (10) (10) (40) 1Q 17 impact from Pori Fire 15 Business improvement program unrealized 14 66 Pro forma Adjusted EBITDA $ 369 $ 778 $ 498 $ 175 $ 185 $ 21 $ 90 $ 37 $ 138 $ 500 (1) Adjusted to include Rockwood pro forma 16
Pro Forma Financial Detail $ in millions 2010 (1) 2011 (1) 2012 (1) 2013 (1) 2014 (1) 2015 2016 4Q16 4Q17 FY17 Titanium Dioxide Revenue $ 1,773 $ 2,305 $ 2,083 $ 2,105 $ 2,009 $ 1,584 $ 1,554 $ 357 $ 387 $ 1,604 Performance Additives Revenue 686 727 673 656 664 578 585 134 141 605 Total Revenue $ 2,459 $ 3,032 $ 2,756 $ 2,761 $ 2,673 $ 2,162 $ 2,139 $ 491 $ 528 $ 2,209 Titanium Dioxide Adj. EBITDA $ 306 $ 699 $ 449 $ 117 $ 134 $ (8) $ 61 $ 33 $ 119 $ 387 Performance Additives Adj. EBITDA 103 119 89 98 91 69 69 13 15 72 Operating Segment Adjusted EBITDA $ 409 $ 818 $ 538 $ 215 $ 225 $ 61 $ 130 $ 46 $ 134 $ 459 Note: Financial information prior to October 1, 2014 adjusted to include the acquisition of the Titanium Dioxide and Performance Additives businesses of Rockwood Holdings, based upon their management s representation (1) Adjusted to include the Oct. 1, 2014 acquisition of the Performance Additives and Titanium Dioxide businesses of Rockwood Holdings, Inc. as if consummated at the beginning of the period; excludes the related sale of our TR52 product line used in printing inks to Henan Billions Chemicals Co., Ltd. in December 2014; and excludes the allocation of general corporate overhead by Rockwood 17