chemtura corporation - · pdf filenyse / euronext: “chmt” chemtura corporation...

NYSE / EURONEXT: “CHMT”

www.chemtura.com

Chemtura Corporation

Jefferies 12th Annual Industrials Conference

AUGUST 10, 2016

This presentation contains forward-looking statements based on management's current expectations, estimates and projections. All statements that

address expectations or projections about the future, including our actions that will drive earnings growth, demand for our products and expectations

for growth, are forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties,

potentially inaccurate assumptions and other factors, some of which are beyond our control and difficult to predict. If known or unknown risks

materialize, or should underlying assumptions prove inaccurate, our actual results could differ materially from past results and from those expressed

in forward-looking statements. Important factors that could cause our results to differ materially from those expressed in forward-looking statements

include, but are not limited to, economic, business, competitive, political, regulatory, legal and governmental conditions in the countries and regions in

which we operate. These factors and others are discussed more fully in the reports we file with the Securities and Exchange Commission, particularly

our latest annual report on Form 10-K. We assume no obligation to provide revisions to any forward-looking statements should circumstances

change, except as otherwise required by securities and other applicable laws.

JEFFERIES 12TH ANNUAL INDUSTRIALS CONFERENCE- AUGUST 10, 2016

2

Cautionary Statement Regarding Forward-Looking Statement

Forward Looking Statement & Non-GAAP Financial Measures

Non-GAAP Financial Measures

Our financial information as filed with the SEC is based on Generally Accepted Accounting Principles (GAAP) in the U.S. We utilize other measures

to manage our business and make resource allocations that are not prescribed by GAAP. We call these Non-GAAP Financial Measures.

The following Non-GAAP Financial Measures are used in this presentation:

Reconciliations of our GAAP to Non-GAAP Financial Measures are included in the Appendix to this presentation. Definitions of these Non-GAAP

Financial Measures and a description of why we use them can be found on the Investor tab of our website (www.chemtura.com) and in our Second

Quarter 2016 Press Release dated July 28, 2016, also available on our website.

We are unable to reconcile forecasted Adjusted EBITDA and Free Cash Flow estimates to GAAP equivalent estimates without unreasonable efforts

because the information required to forecast the GAAP estimates is not readily available and, therefore, the comparison is not practical.

Adjusted EBITDA

Last Twelve Months (LTM) Adjusted EBITDA

Free Cash Flow

LTM Free Cash Flow

Presenters

Craig Rogerson

Chairman, President and Chief Executive Officer

Matthew Sokol

Director, Investor Relations and Corporate Development

3

IPP $148

IEP 84

ACM 36

Segment operating income $268

General corporate expense, including amortization (58)

Facility closures, severance and related costs (2)

(Loss) gain on sale of business (1)

Impairment charges (2)

Pension settlement (162)

Total $43


4

Summary of Last Twelve Months (LTM)1 Financial Information

GAAP Financial Information

LTM Net Sales

LTM Operating Income

LTM Depreciation & Amortization

LTM Net Earnings, Cash from Operations & Capex

LTM Non-Cash Share-Based Compensation Expense

Industrial Performance Products $1

Industrial Engineered Products 1

Agrochemical Manufacturing -

Corporate 10

Total $12

Net earnings (loss) $35

Net cash provided by (used in) operating activities $134

Capital expenditures ($86)

Industrial Performance Products (IPP) $856

Industrial Engineered Products (IEP) 713

Agrochemical Manufacturing (ACM) 129

Total $1,698

IPP $29

IEP 44

ACM 4

Corporate 11

Total $88

1 Last Twelve Months as of June 30, 2016

2 Agrochemical Manufacturing includes $38 million in LTM Net Sales and LTM Operating Income related to non-cash amortization, net of accretion, from a below-market contract

associated with the post-divestiture supply of product

3 Net of an after-tax pension settlement charge of $129 million arising from the First Quarter, 2016 pension annuity transaction

4 LTM Cash from Operating Activities includes a $35 million contribution made to our US Qualified Pension Plan as a result of our pension annuity transaction in the First Quarter of

2016

2

2

3

4

Company Snapshot


5

Business Reporting

Segments Industrial Performance Products

Industrial Engineered Products 2

Chemtura By the Numbers

4 Business Units Petroleum Additives

Urethanes

Great Lakes Solutions

Organometallics Specialties

2,500 Employees Worldwide

$1.7billion

LTM 2016 Net Sales

#20 Global Production

Facilities

$270million

LTM 2016 Adjusted

EBITDA2

$970+million

Cash Returned to Shareholders Since 2011

Top Decile In Safety Performance3

80+ Countries Where We Do Business

$48million

LTM 2016 Free Cash Flow1

1 Non-GAAP financial measure. LTM Free Cash flow includes $35 million contribution to our US Qualified Pension Plan in pension made in connection with our pension annuity

transaction in First Quarter 2016. See Appendix for a reconciliation of Cash Flow from Operating Activities to Free Cash Flow

2 Non-GAAP financial measure. See Appendix for reconciliation of Net Earnings (Loss) to Adjusted EBITDA

3 American Chemistry Council Responsible Care® Company Safety Incident Rates for Medium Sized Companies

55% Sales outside

North America


6

Actions taken to streamline and focus portfolio to drive shareholder value

Industrial Engineered Products

Great Lakes Solutions | Organometallics

Business Reporting Segments:

Core Specialty Chemical Portfolio

IEP Industrial Performance Products

Petroleum Additives | Urethanes IPP

Off-shore pipe protection bend stiffeners / restrictors

Oil transportation line pigging

Drilling equipment components

Mining sieves, screens, scraper blades and liners

Structured wheels / airless tires

High performance seals, valves, pistons, hoses and belts

Industrial rollers in printing, paper and steel industries

Electronics: CMP pads for semi-conductors manufacture

High performance military applications

Urethanes

Petroleum Additives

Drive line fluids across the transportation segment

High performance engine oils

Turbine fluids

Control valve hydraulic fluids

Gear oil for wind turbines and industrial gearboxes

Refrigerant compatible lubricants

Specialty grease in transportation and heavy industry

High performance military applications

Building blocks for active ingredients in fine chemicals

Catalysts in the chemical industry

Completion, fracking and work-over fluids in the oil & gas sector

Flame retardants (FRs) in printed wire board (circuit boards)

FRs for electronics connectors

FRs in electronics and appliances enclosures

FRs in cable/wire insulation

FRs in polystyrene rigid foam insulation for building construction

FRs in specialty textile coatings


Specialized single-site catalysts for polyolefin polymerization

Traditional Ziegler-Natta catalysts

Metal organic chemical vapor deposition (MOCVD) materials

Tin intermediates for pharma, PVC and glass coatings

Photovoltaic coating materials

Fine Chemical intermediates and specialties

Rubber and paint catalysts

Organometallics Specialties

SELECTED PRODUCTS & APPLICATIONS


7

Segment Overview

32%IEP

13%AM

55%IPP

42%IEP

50%IPP

8%

AM

Petroleum Additives

Urethanes


Organometallics

CORPORATE SEGMENT:

LTM 2016 Stewardship (public company cost, corporate management) and legacy costs were $225 million2 on an Operating Income basis and

$40 million on an Adjusted EBITDA basis.

LTM Business Segment

Net Sales – $1,698 Million


Operating Income – $268 Million1

1 Excludes Corporate Segment

2 LTM 2016 Corporate Operating Expense includes a $162 million charge associated with our pension annuity transaction reported in the First Quarter of 2016

Agrochemical Manufacturing


Adjusted EBITDA – $310 Million1

42%IEP

57%IPP

1%AM

Rewarding Our Shareholders


8

Over $1 Billion in targeted cumulative share repurchases

We continue to repurchase our stock at attractive prices

(1) As of June 30, 2016

$61 Million

REMAINING1

$22 million

$41 million

$95 million

$862 million

CUMULATIVE OPEN MARKET PURCHASES

2011 2012 2013 2014 2015

$719 million

$972 million

Q2 2016


9

Exploit Our Differentiated Technology

Increasing customer demand for unique lubricant additives driven by market growth and

increasing regulatory requirements

Continued evolution to Emerald InnovationTM flame retardants

Take advantage of growing demand for bromine based chemistries in fine chemicals

Adiprene® LF Urethane Prepolymers and Ultralast® Thermoplastic Polyurethanes

Single-site polymerization catalysts offer enhanced performance

High purity metal organics for fast growing LED and other electronic applications

Leverage secular growth opportunities for our chemistries

Sales force effectiveness and other commercial excellence initiatives drive volume growth

Rapid market adoption of synthetic lubricant base-stocks and finished fluids

Maximize return from recent new capacity investments

Invest in further capacity and innovation

Maintain best-in-class safety and environmental stewardship

Sustainable and consistent results

Adjusted EBITDA margins approaching 20%

Consistent free cash flow generation

Long term leverage of 2X Adjusted EBITDA

Value creating repurchase of our common stock

Disciplined, accretive M&A

Profitably Grow Our Businesses

Deliver Shareholder Value

2016 Priorities


10

REGIONAL GROWTH

Through Building Local

Presence and Utilizing

Global Scale

PERFORMANCE

Through a Performance

Driven Culture

PORTFOLIO

Continuing the

Transformation

TECHNOLOGY

Growth Through

Industry Focused

Innovation

› Focus on innovation and

technology

› Differentiation through

technology

› Investing in sustainable

technologies and

applications

› Expand global footprint and

infrastructure

› Increased exposure to

faster growing regions

› Regional shared service

centers enable cost and

strategic flexibility

› Continuous improvement

› Accountability

› Greater customer intimacy

and focus

› Sustainability

› Cost-Out

› Actively managed portfolio

to optimize value

› Sharpened focus on

Transportation, Electronics

and Energy markets

› Leadership and

organizational teams

experienced in M&A allows

us to move quickly and

decisively

Achieving our vision by focusing on:

Our Strategic Building Blocks

CONTINUE TO BE OUR STATEGIC BUILDING BLOCKS IN 2016 AND BEYOND

IPP: Key Revenue and Margin Growth Drivers


11

Leveraging increasing customer demand with broad based portfolio of Lubricant Additives

› Inhibitors (antioxidants)

› Detergents and Friction modifiers

› Corrosion inhibitors and Anti-wear additives

Benefiting from growth in usage of Synthetic Lubricants

› HVPAO base-stocks

› Gear oils for wind turbines & industrial gearboxes

› Refrigerant compatible lubricants

Driving Commercial and Operational Excellence

› Focus on customer intimacy, executions and value creation

› Managing “price-over-raws”

› Incremental opportunities to reduce costs

› Innovation and continuous improvement

Positioned to deliver repeatable organic growth

Secular growth from increasing Regulation

› Increasing CAFE standards

› Reducing emission targets

› Hydrochlorofluorocarbon (HCFC) phase-out in Refrigerants

Developing Urethane products to meet customer performance needs

› ULTRALAST™ TPU demonstrated resilience and strong price: performance ratio

› Duracast® unparalleled performance benefits

IEP: Key Revenue and Margin Growth Drivers


12

Continuing to introduce next generation Emerald InnovationTM products

› Emerald InnovationTM 3000 benefits from full market conversion in EPS/XPS foams

› Next generation products for connectors market

Diversifying applications for Bromine and Bromine Derivatives

› Fine chemical brominated intermediates

› Leverage strong relationships and geographic diversity for clear brine fluids

› Mercury control as utilities comply with MATS regulations

Driving Commercial and Operational Excellence

› Focus on customer intimacy, executions and value creation

› Manufacturing cost and productivity improvements in Bromine and Organometallics

› Driving for GLS margin recovery through increased selling prices

Leveraging 2015 Business Improvements

Diversifying Organometallics applications

› High purity MOCVD agents used in the production of high brightness LEDs and Photovoltaics

› MAO single site catalysts

› Octyl tin products

• Plant to be closed

Asia/Pacific

LTM 2016

Net Sales

22%

Europe/Africa

LTM 2016

Net Sales

30%

Latin America

LTM 2016

Net Sales

3%

North America

LTM 2016

Net Sales

45%

› 55% of LTM 2016 Net Sales outside North America

› Operate 20 manufacturing sites in 11 countries

North America

El Dorado, AR

Mapleton, IL

East Hanover, NJ

Fords, NJ

Perth Amboy, NJ

Gastonia, NC

Elmira, Canada

West Hill, Canada

EMEA

Latina, Italy

Bergkamen, Germany

Accrington, UK

Trafford Park, UK

Ankerweg, The

Netherlands

Asia/Pacific

Nantong, China

Nanjing, China*

Kaohsiung, Taiwan

Hyeongok, South Korea

Latin America

Rio Claro, Brazil

Altamira, Mexico

Reynosa, Mexico

Manufacturing Plants

by Region

Post-transformation global footprint

Geographic Diversity to Support Growth Initiatives


13


14

Industrial Performance Products

$ in millions and Adjusted EBITDA as a % of Net Sales1

Industrial Engineered Products

Petroleum Additives and Urethanes

› Reduced raw material input costs accelerated margin expansion

› Have invested in the business team, business processes and

execution skills to lay the foundation for revenue and margin

growth

› Shortage of a key raw material constrained HVPAO capacity

utilization in 2015, but have now secured new source of supply;

working to regain customer base

› Expanding Inhibitor capacity to support growing customer demand

› The secular trends of the substitution of traditional lubricants with

synthetics and regulation driving lower emissions and higher MPG

› Nantong, China plant should cover fixed costs in 2016 but volume

growth rate depends on strength of Chinese economy

Great Lakes Solutions and Organometallics

› Bromine sales price increases combined with lower raw material

input costs led margin recovery in 2015; pricing levels sustained

through 1H 2016

› Substantial benefit in 2015 and 1H 2016 from manufacturing and

SG&A cost reductions

› Great Lakes Solutions continuing diversification from electronics

through growth from insulation foam, intermediates, fine chemicals

and mercury control applications

› Organometallics improved asset utilization, upgraded portfolio mix

and won additional contracted volume that creates attractive

baseload scenario

2013 – LTM 2016 Segment Operating Income & Adjusted EBITDA Trend

RECENT IMPROVEMENT LED BY COMMERCIAL EXECUTION AND COST REDUCTION EFFORTS

$55

$16

$58 $84

$99

$63

$107

$130

0

40

80

120

160

200

240

2013 2014 2015 LTM 2016

Operating Income Adjusted EBITDA

1 See Appendix for reconciliation Operating Income to of Adjusted EBITDA

$109 $106 $141 $148

$140 $141

$170 $178

0

50

100

150

200

250

300

350

2013 2014 2015 LTM 2016

Operating Income Adjusted EBITDA

14.3% 14.3%

19.2% 20.8%12.3%

7.9%

14.8%18.2%

Financial Performance Summary


15

Adjusted EBITDA(1) Net Sales

Capital Expenditures Free Cash Flow2,3

( $ in Millions ) ( $ in Millions and % of Net Sales )

( $ in Millions ) ( $ in Millions )

(1) Last Twelve Months as of June 30, 2016

(2) Non-GAAP Measure. See Appendix for reconciliation of Net Earnings (Loss) to Adjusted EBITDA

(3) Non-GAAP Measure. See Appendix for reconciliation of Cash Flow from Operating Activities to Free Cash Flow

(4) Free Cash Flow includes contributions to pension and post-retirement benefits of $57 million (2013), $49 million (2014), $31 million (2015) and $40 million (LTM

2016)

(5) LTM 2016 excludes a $35 million cash contribution made to our US Qualified Pension Plan as a result of our pension annuity transaction in the First Quarter of

2016

$2,231 $2,190

$1,745 $1,698

$0

$500

$1,000

$1,500

$2,000

$2,500

2013 2014 2015 LTM 2016

$170

$113

$80 $86

$0

$50

$100

$150

$200

2013 2014 2015 LTM 2016

$281 $262

$237 $270

12.6% 11.9%13.6%

15.9%

$0

$100

$200

$300

$400

$500

2013 2014 2015 LTM 2016

$(91)

$(191)

$79 $83

-$250

-$200

-$150

-$100

-$50

$0

$50

$100

$150

2013 2014 2015 LTM 20165

Maintaining a Strong Balance Sheet

$0

$200

$400

$600

$800

$1,000

2013 2014 2015 Jun-16

$0

$20

$40

$60

$80

2013 2014 2015 LTM 2016$0

$100

$200

$300

$400

$500

16-'17 2018 2021

Outstanding Debt Interest Expense Maturity Profile

$26M

Other

$250M ABL

(Undrawn)

$450M 5.75%

Senior Notes


16

Long term gross leverage target remains 2X Adjusted EBITDA. As of June 30, 2016, Total Debt/Adjusted

EBITDA was 1.8 times. Total Debt less Cash/Adjusted EBITDA was just over 1 times

Repaid all but $1 million of our Term Loan in the Second Quarter, 2016

Over $350 million of available liquidity including undrawn $250 million Asset Based Revolver

Flexible debt covenants and full access to Capital Markets

Cash interest expense has declined due to refinancing and debt repayments using divestiture net cash

proceeds

2016 Outlook

Extend progress we made in 2015, improving margins and earnings

power

Delivered $145 million of Adjusted EBITDA in the first half of 2016 –

anticipate comparable performance in the second half of 2016

Execute on our growth initiatives

Continue focus on cost control and commercial and operational

excellence

Drive our portfolio strategy to transform Chemtura by adding scale


17

$100+million

Targeted Free Cash Flow in 20161

20% Targeted Increase in Adjusted EBITDA 2016 vs. 2015

1 Excludes a $35 million cash contribution made to our US Qualified Pension Plan as a result of our

pension annuity transaction in the First Quarter of 2016


18

IR CONTACTS:

Matthew Sokol, Director, Investor Relations and Corporate Development

Daniel Murray, Senior Investor Relations Analyst

Investor Relations Tel: 1.203.573.2153

http://investor.chemtura.com, or

http://www.chemtura.com

NYSE / EURONEXT: CHMT

Investor Relations

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