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Rohm and Haas CompanyLuis FernandezVice President and Business Group DirectorPaint and Coatings MaterialsCredit Suisse Chemicals Conference
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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:http://www.rohmhaas.com
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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 athttp://www.rohmhaas.com
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Rohm and Haas TodayWe are a Global Company
$4,199 MM | 51%$2,030 MM | 25%
$1,659 MM | 20%
$342 MM | 4%
EUROPEAN REGION
LATIN AMERICAN REGIONASIA PACIFIC REGION
RDEs | $184
RDEs | $1,202
RDEs | $342
2006: Sales $8.2 B
NORTH AMERICAN REGION
RDEs = Rapidly Developing Economies
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Electronics, 19%
Packaging & Paper, 13%
Industrial, 10%
Transportation, 7%
Water, 7%
Building and Construction, 33%
Household Goods and Personal Care,
6%
Food and Food Related, 4%
Pharmaceutical and Medical, 1%
2006 Sales By End Market2006 Sales By Business Group
Rohm and Haas Today Three Core Business Groups, Diverse End Markets
* External Sales
ElectronicMaterials
Group19%
Salt10%
PrimaryMaterials
11%*
Paint &CoatingsMaterials
25%
PerformanceMaterials
Group14%
Packaging &Building Materials
21%
SpecialtyMaterials
Group57%
*
* includes Ice Control Salt
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2002 – 2006: Solid Performance
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
2002 2003 2004 2005 2006$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
Sales Dividends Per Share EPS
in MM Per share
(1)
(1) Diluted earnings per share (in dollars) from continuing operations
2002-2006 CAGRSales 10%EPS 40%Dividends 12%
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Total Shareholder Return vs. S&P 500
5 Year TSR Period Ending December 31, 2006
-50
0
50
100
Q4 2001 Q4 2002 Q4 2003 Q4 2004 Q4 2005 Q4 2006
ROH S&P500
ROH 10.8%
S&P500 6.2%
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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
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Paint and Coatings Materials
End Use Markets % of Total
Decorative Coatings ~70%
Industrial Coatings ~20%
Building Products ~10%
2006: Sales $2,050 MM
NORTH AMERICAN REGION
EUROPEAN REGION
LATIN AMERICAN REGION
ASIA PACIFIC REGION$119
6%
$1,32465%
$35517%
$25212%
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Paint and Coatings MaterialsPositioning for Growth –Drivers
• Accelerated innovation –technology and marketing
• Global manufacturing footprint
• Rapidly developing economies
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Paint and Coatings MaterialsTechnology Leadership – Evolving Model
– global R&D in U.S.– local tech service– local manufacturing– U.S. needs drive R&D– technology push– technology led– innovation takes time
– distributed R&D– local manufacturing– market needs drive R&D– market pull– technology/marketing led– focus on innovation yield
and speed
Then… Now…
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Paint and Coatings MaterialsInnovation – Increased Performance and Environmentally Friendly
• AvanseTM family of high-performance 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 PotierAward Winner forInnovation in the
Environment
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Paint and Coatings MaterialsInnovation – Increased Performance and Environmentally Friendly
• acrylic thermoset binders– A green alternative to formaldehyde
resins
• Other environmentally friendly products– Water-borne stains– Cool-roof coatings– FastrackTM XSR Traffic Paint binders
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Paint and Coatings MaterialsManufacturing Footprint – Close to the Customer
Manufacturing Locations
Technical Centers
Mfg Locations under construction
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Paint and Coatings Materials Rapidly Developing Economies a Key Opportunity
Brazil
Argentina
S AfricaTurkeyRussia
Mexico
IndiaChina
Greece
PortugalPoland
S Korea Spain
UKFrance
Italy
Germany US
0
5
10
15
20
25
0 10,000 20,000 30,000 40,000 50,000GDP/Capita
Litr
es/C
apita
Large potential for coatings growth in developing markets as standard of living rises
Source: James Consulting
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Paint and Coatings Materials Rapidly Developing Economies a Key Opportunity
Quality paint (ROH focus) use grows with increasing GDP per capita
Mix By Market (% of volume)
0
25
50
75
100
India
China
Thail
and
Mexico Brai
lArg
entin
aAus
tralia US
Budget Medium PremiumSource: Kansai Nerolac Paints
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Paint and Coatings MaterialsTechnology Leadership
Source: US Census Bureau, Company data2006 is estimated
75
100
125
150
175
200
225
250
1990 1994 1998 2002 2006
launched 1989
North America volume index(1990 = 100)
ROH Acrylic
CAGR = 5.2%
US paint marketCAGR = 2.4%
Acrylic message reaches critical
mass
First interiorpremium brands
Interior flat paints move to 100% Acrylic
Retailers using quality paint
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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?
Paint and Coatings MaterialsTwo Most Frequent Questions We Are Asked by Investors
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Outlook for US Decorative Paint Market
Source: US Census Bureau
0
200
400
600
800
1981 1986 1991 1996 2001 2006
GallonsMM
US Architectural Paint Market Volume Trend
Actual Forecast
Expect 3% - 5% market volume decline
in 2007 and 2008
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Remodeling / Redecorating a Key Driver
Source: Global Insight US Macro Forecast, August 2007
0
20
40
60
80
100
120
140
160
1980
Q1
1982
Q1
1984
Q1
1986
Q1
1988
Q1
1990
Q1
1992
Q1
1994
Q1
1996
Q1
1998
Q1
2000
Q1
2002
Q1
2004
Q1
2006
Q1
2008
Q1
Real Residential Improvement Investment
2000 $B4QMA
Actual Forecast
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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
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Please join us for our 2007 Please join us for our 2007 Investor / Analyst DayInvestor / Analyst Day
Wednesday, November 28, 2007Wednesday, November 28, 2007Millennium Broadway Hotel, NYCMillennium Broadway Hotel, NYC
12 Noon to 6:30 PM12 Noon to 6:30 PM
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Glossary of TermsA/T Profit Margin Net Earnings from Continuing Operations before cumulative effect of accounting changes/ Net
Sales
CAGR Compounded Annual Growth Rate
Debt To Capital Ratio Total Debt/ (Total Debt + Shareholder’s Equity)
EBITDA Earnings Before Interest, Taxes, Depreciation, Amortization and Asset Impairments
EBITDA% EBITDA/Net Sales; also known as EBITDA Margin
RDEs % Rapidly developing economies as a percent of total company sales
RDEs – APR Sales into countries in ROH defined Asia Pacific Region excluding Japan, Australia and New Zealand
RDEs – LAR Sales into countries in ROH defined Latin America Region
RDEs - CEETSales into countries in ROH defined Central, Eastern Europe (including Russia and other former Soviet Republics) & Turkey
EPS Before Restructuring. & Asset Impairment
Diluted EPS, excluding the impacts of restructuring and asset impairment charges
Payout Ratio Dividend Per Share/ Diluted EPS from continuing operations
ROCE Return On Capital Employed
Sales Demand Growth Sales growth excluding the impact of pricing and currency
TSR Total Shareholder Return (capital appreciation + dividends)