2021 Analyst Day Presentation

PowerPoint Presentation© 2021 Univar Solutions Inc. All rights reserved. Confidential and content subject to change.
2021 Analyst Day Presentation November 16, 2021
Heather Kos Vice President of Investor Relations & Communications
Forward-Looking Statements This presentation includes certain statements relating to future events and our intentions, beliefs, expectations, and outlook for the future, which are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, including, without limitation, statements regarding the impacts of the effects of COVID-19 on the Company, the Company's anticipated future results and financial performance, liquidity position and cash flows, actions regarding expense control and cost reductions, expected net synergies from the Nexeo acquisition, capital expenditures and other statements regarding the Company's Streamline 2022 Program and other initiatives. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond the Company's control. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the expectations and assumptions. A detailed discussion of these factors and uncertainties is contained in the Company's filings with the Securities and Exchange Commission. Potential factors that could affect such forward-looking statements include, among others: general economic conditions, particularly fluctuations in industrial production and consumption and the timing and extent of economic downturns and potential recoveries the sustained geographic spread of the COVID-19 pandemic; the duration and severity of the COVID-19 pandemic; current and new actions that may be taken by governmental authorities to address or otherwise mitigate the impactof the COVID-19 pandemic; the potential negative impacts of COVID-19 on the global economy and our employees, customers, vendors and suppliers; and the overall impact of the COVID-19 pandemic on our business, results of operations and financial condition; significant changes in the business strategies of producers or in the operations of our customers; increased competitive pressures, including as a result of competitor consolidation; significant changes in the pricing, demand and availability of chemicals; our indebtedness, the restrictions imposed by and costs associated with our debt instruments, and our ability to obtain additional financing; the broad spectrum of laws and regulations that we are subject to, including extensive environmental, health and safety laws and regulations; potential business disruptions and security breaches, including cybersecurity incidents; an inability to generate sufficient working capital; increases in transportation and fuel costs and changes in our relationship with third party providers; accidents, safety failures, environmental damage, product quality issues; delivery failures or potential hazards and risks related to our operations and the hazardous materials we handle, potential inability to obtain adequate insurance coverage; ongoing litigation; potential product liability claims and recalls and other environmental, legal and regulatory risks; challenges associated with international operations; exposure to interest rate and currency fluctuations; risks associated with integration of legacy business systems; possible impairment of goodwill and intangible assets; an inability to integrate the business and systems of the companies we acquire, including failure to realize the anticipated benefits of such acquisitions; negative developments affecting our pension plans and multi-employer pensions; labor disruptions associated with the unionized portion of our workforce; and the other factors described in the Company's Annual Report on Form 10K for the year ended December 31, 2020, as well as other filings with the Securities and Exchange Commission. We caution you that the forward- looking information presented in this presentation is not a guarantee of future events or results, and that actual events or results may differ materially from those made in or suggested by the forward-looking information contained in this presentation. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "plan," "seek, "will," "expect," "intend," "estimate," "anticipate," "believe" or "continue" or the negative thereof or variations thereon or similar terminology. Any forward-looking information presented herein is made only as of the date of this presentation, and the Company does not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise, except as required by law.
Non-GAAPMeasures To supplement the consolidated financial results prepared in accordance with accounting principles generally accepted in the United States of America (GAAP), the Company uses certain non-GAAP historical financial measures. Management uses these non-GAAP financial measures internally for strategic decision making, forecasting future results and evaluating current performance. Management believes these non- GAAP financial measures help investors’ ability to analyze underlying trends in the Company’s business, evaluate its performancerelative to other companies in its industry and provide useful information to both management and investors by excluding certain items that may not be indicative of the Company’s core operating results. Additionally, management has used, and may continue to use, certain non-GAAP measures in setting performance incentive targets to align management compensation with operational performance. The non-GAAP measures should not be considered a substitute for or superior to GAAP results and may vary from others in the industry.
Non-GAAP financial measures are not prepared in accordance with GAAP; therefore, the information is not necessarily comparable to other companies. A reconciliation of each non-GAAP historical financial measure to the most comparable GAAP measure is provided in the Appendix at the end of the presentation. Definitions of non-GAAP measures used by the Company are also included in the Appendix at the end of the presentation. Investors are urged to consider carefully the comparable GAAP measures and the reconciliations to those measures provided in the Appendix. This data should be read in conjunction with Univar Solutions' periodic reports previously filed with the SEC.
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David Jukes, President & Chief Executive Officer Global chemical distribution industry veteran with a track record of growth • Joined Univar in 2002, holding senior leadership roles, including President of EMEA; Vice President,
Sales & Marketing, EMEA; Regional Director of Univar UK, Ireland, the Nordics and Distrupol • Direct responsibility for transforming Univar’s largest operating segment • 40+ years in the chemical distribution industry
Jim Holcomb, President North America & Chemicals & Services North America chemical distribution industry veteran with a track record of growth • Joined Univar in 2021, an industry leader of critical growth projects, managing integration projects
and processes, and instilling commercial discipline practices • Demonstrated his ability to find synergies and unlock new growth • 25+ years of chemical distribution industry experience
Nick Powell, President EMEA, APAC & President Ingredients & Specialties Global chemical distribution industry veteran with a track record of growth • Joined Univar in 2009, assumed leadership of EMEA’s Focused Industries where he has taken
those businesses to new growth levels
• Established the Company’s Middle East and Africa businesses and grew its footprint including by leading the acquisition of our Turkey business
• 30+ years in the chemical distribution industry
Today’s Speakers
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Jennifer McIntyre, Chief People & Culture Officer Accomplished operations and supply chain leader with deep chemical industry experience • Joined Univar in June 2013 as Vice President of Regional Supply Chain • Established baseline supply chain capabilities including key performance indicators, improved on-time
delivery by 15 percentage points to greater than 95 percent and formed quality and continuous improvement teams
• 25+ years of experience in the chemical manufacturing industry with Dow and Rohm & Haas, where she led operations, planning, transportation, engineering, continuous improvement, indirect procurement, and quality
Nick Alexos, Chief Financial Officer Finance and operational experience across a broad array of sectors and businesses • Joined Univar in January 2020 as Executive Vice President and Chief Financial Officer • Established in-depth knowledge and expertise around market and margin expansion in the general
industrial and consumer sectors • Served as Executive Vice President, Chief Financial Officer and Chief Administrative Officer at
Dentsply Sirona, where he led growth strategy and executed portfolio shaping initiatives • Served as a Managing Director of Madison Dearborn Partners, LLC, where he helped a wide array of
portfolio companies achieve growth and margin expansion • Served on a number of boards including VWR International, Option Care Health, Sirona Dental
Systems, Team Health, Performance Health and various other organizations
Steve Martinez, Vice President, Digital Solutions Digital strategy, innovation, and product management experience driving customer-centered transformation • Joined Univar in April 2018 as Senior Director Digital Commerce • Served in the manufacturing and distribution industries in senior level marketing and e-commerce roles • Served as a team leader of product managers, marketers, merchandisers and analysts to accelerate
adoption and drive revenue • During his tenure at W.W. Grainger, he was responsible for the market launch of Grainger’s mobile
applications and Auto-Reorder functionality
David Jukes President and Chief Executive Officer
© 2021 Univar Solutions Inc. All rights reserved. Confidential and content subject to change.
Diverse Supplier Base Top 20 premier suppliers represent ~40% of chemical & ingredient purchases.
Low Capital Appetite 10-year average capex/sales of 1.3%.
Diverse Products Greater than 15,000 products with top 15 products representing less than 20% of gross profit.
#1 Market Position in USA(2)
62% $5.0B
About Univar Solutions The Univar Solutions you think you already know
We purchase chemicals and ingredients from thousands of producers and warehouse, repackage, blend, dilute, and deliver safely worldwide
(1) As of December 31, 2020. (2) Source: ICIS Top 100 Chemical Distributors.
Nimble And Resilient
Diverse Customer Base Top 10 customers represent ~6% of sales.
Net Sales By Our Segments (1)
#1 Market Position in Canada(2)
13% $1.1B
20% $1.7B
5% $0.5B
Diverse End Markets No sub-market represents more than ~17% of sales.
2020 Global Sales $8.3B
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Industrial Solutions
Consumer Solutions
General Industrial
• Migration to a single SAP system in the Americas
• Investment in gaining a Digital advantage
• Developed a commercial culture based on growth and centered
on the customer experience
Ingredients
portfolio
• Created a new “Univar Solutions” culture
Over the past three years we have rebuilt the business from the inside out and transformed it to make it more agile and customer-centric
Total Energy
The Univar Solutions Transformation
We Achieved This Through End Market Exposure as a % of Sales(1)
2021 Sales by End Market(2)
(1)Energy & Ag estimates based on 3Q21 YTD. (2)End Market estimates based on 3Q21 YTD.
2021 Sales2014 Sales
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• Gross Profit growth 200+ bps greater than economic consensus(1)
• Margin comparison vs company average in 2021
- Gross Profit margins: +200bps
- Adjusted EBITDA margins(2): > +400bps
• Leverages global footprint, owned fleet, and digital investments • Technical and commercial resources dedicated to individual end
markets
Univar Solutions – What You Don’t Know
(1) Weighted Average Economic Consensus for 2022 to 2024 is 2.5%, based on external forecasts. (2) Non-GAAP financial measure; see Appendix for definitions.
• Gross Profit growth above economic consensus(1)
• Installed asset base creates value
• Safely handling, blending and delivery of hazardous chemicals
• Strong supplier partnerships
Global Reach, Installed Asset Base, Owned Fleet and Digital Backbone
Chemicals & Services (C&S) Ingredients & Specialties (I&S)
Global
Ingredients and Specialties 2021 Forecast Gross Profit View By Segment:
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Univar Solutions Compares Well with the Competition
Companies Ingredients
Ingredients and specialties category grew organically at approximately 3% from 2019 to 2020, and forecasted to grow approximately
200bps higher than economic consensus from 2021-2024
Competitor A(1) $2.5B $0.5B 21.9% 65% 35%
Approximately 3% organic and 8% inorganic growth from 2019 to 2020, Expected GP
outlook not provided (Revenue to grow at 8%- 10% from 2022-2024, evenly split between
organic and inorganic growth)
Competitor B(1,3) $3.1B $0.7B 23.3% 58% 42%
2019 to 2020 organic growth of 5%, and inorganic growth of 6%, future outlook not
provided
Competitor C(1,2) $5.6B $1.2B 20.7% 47% 53%
Organic growth rate for specialty chemicals has been higher than 4% in the last 3-5 years and expects growth to be inline with market in the short term and exceed market growth over
time
(1) 2020 f inancials calculated using full year average EUR/USD exchange rate of 1.1134. (2) Estimated based on nine months of 2020 to extrapolate full-year. (3) Estimated based on internal analysis.
–
Ingredients and Specialties Category Revenue FY2020*
($ in billions)
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• Apply a global strategy and consistency of actions and performance to local execution
• Leverage our global footprint, installed asset base, transportation assets and digital assets
• Deliver an effortless experience for customers that drives preference, retention and delivers better market growth
• Offer technical and application development expertise as a differentiated value add
• Leverage and expand our key supplier relationships
• Enable suppliers' and customers’ ESG objectives
• Better serve global key customers
• Unlock the value of our Solutions Centers for our suppliers and customers
Our Full Line Card of Opportunities and Solutions is an Enabler for Growth
We have an unrivaled product range and strong supplier partners
Our Objectives
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Our Global Footprint and Owning the Last Mile of Distribution Offers a Competitive Advantage
• Ability to control what matters to our suppliers and customers
- Safe handling - On-time delivery
• Ability to optimize our transportation costs
• Ability to partner with suppliers and customers for more sustainable supply chains
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Local Supply Chains Well positioned to capitalize on the onshoring trend with more robust local supply chains.
Sustainable Solutions Enabling diversification away from fossil fuels and offering clean label products that are from sustainable sources.
We are Positioned to Respond to What’s Happening Around Us
Digitization The world is embracing going digital and increasingly expects the benefits it brings.
Hybrid Working for All Omni-channel approach to meet the customer wherever they are and whenever they choose.
ESG Enabler to both Supplier and Customers’ESG journeys.
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• Digital marketing and e-commerce increase reach and accelerate customer acquisition
• Multi-channel demand growth campaigns driven by AI insights target wallet expansion and re-activation
• E-commerce customers purchase 30% more SKUs
• 24/7 access allows customers to resolve inquiries and reorder when it’s most convenient
• Reduces support required from sellers and CSRs
• “Smarter” customer service engagement
• Build streamline culture to optimize business processes • Digitize operations to enable faster information sharing
and leverage scale • AI growth recommendations drive sales & marketing • Touchless order routing logic and digitized collections
processes reduce the number of human touches from order to cash
Our Digital Investments Enable Growth While Reducing Our Operating Costs
Customer Acquisition Cost
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Financial Targets and Objectives to 2024 • Organic Delivered Gross Profit(3) 100+bps
above economic consensus(1)
• Strong Adjusted EBITDA growth to 9+% margin
• Productivity improvements to deliver OPEX (WS&A)(2) to Gross Profit ratio of less than 50%
• Increase Adjusted EBITDA(3) to $960M through organic growth
• 50% net free cash flow conversion(3)
• Deliver > 15% ROIC(3)
• Strategic M&A to be accretive
• Average capital return of 20%-30% of adjusted net income to shareholders
Advancing our sustainability journey in all we do.
Measuring progress through our S22 financial commitments.
Our Vision To redefine distribution and be the most valued chemical and
ingredient distributor on the planet.
Our Values
Our Mission Streamline. Innovate. Grow. Serious About Safety.
Where People Matter. Valuable To Others. We Do What We Say. Together We Win.
Our Purpose We help keep our communities healthy, fed, clean and safe.
Deliver Profitable Share Growth.
Grow Our People & Culture.
Leverage Assets & Scale.
Portfolio Upgrade.
(1) Weighted Average Economic Consensus for 2022 to 2024 is 2.5%, based on external forecasts. (2) Includesonly WS&A. (3) Non-GAAP financial measure; see Appendix for definitions, and where applicable, historical reconciliations to the most directly comparable GAAP financial measure. 15
Nick Powell President EMEA, APAC and President Ingredients & Specialties
Sales by Market2020 Sales $2.8B
2019-2021 Gross Profit CAGR
12.9%
(1) Weighted Average Economic Consensus for 2022 to 2024 is 2.5%, based on external forecasts.
Value of Ingredients & Specialties Focusing on technical and product differentiation for nearly a decade
• Our People
• Industry Expertise
• New Supplier Authorizations
Economic Consensus(1)
• Inorganic Growth 17
Launched region-wide strategy focusing business activity on specialty chemicals targeting differentiated materials in targeted markets.
EMEA “Organize to Win”
2014 Applied learnings from EMEA to create unified national approach to key markets requiring tailored technical and product support.
USA “Organize to Win”
Nexeo Acquisition
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• 2020 annual sales of $2.8B in Ingredients & Specialties
• Serving more than 30,000 global customers, providing ingredients, specialty products and technical solutions to the largest global consumer brands as well as innovative up-and-comers
• Focusing on 7 global markets, across consumer and industrial segments
• Representing nearly 400 strategic specialty suppliers around the world
• Powered by a global network of Solution Centers focused on product formulation, problem solving, technical differentiation and growth
• Supported by Univar Solutions’ global infrastructure and digital backbone
• Annually 260,000 engagements through digital and traditional marketing channels that target ingredient and specialty products, formulations and solutions
• 2021-2024 Gross Profit growth expected to be 200+bps above economic consensus
Delivering differentiated products and technical solutions globally
Beauty & Personal Care
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Global Technical ‘Hub-and-Spoke’ model enables delivery of practical, real-world solutions that are commercially viable and locally relevant.
Creating innovative, tested and commercially scalable products to help customers accelerate growth and drive sustained ingredients & specialty sales
• Formulation Development
• Recipe Development
• Analytical Testing
• Stability Analysis
• Regulatory Support
• Go-to-Market Concepts
• Product Performance
• Composition Analysis
Technical Expertise Powered by Global Solution Centers
Enables rapid response to latest developing trend and bring solutions to customers locally.
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Immersed in Industries We Serve Strong Position
in Chosen Focused Markets
Source: Cefic, Azoth Analytics
Global team of market experts delivering solutions to customers and suppliers
Beauty & Personal Care
Industry Expertise Supplier Relationships
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Place our Specialty products into the right digital channels, at the right time for easy access.
Expanding Catalog
Digital Solution Center Deploy technically focused
content across webinars, video, social media, e-mail.
Enhanced Content
Industry Experiences
Omni-channel sales model allow us to meet customers where they are with industry- leading content, experience and commerce opportunities.
Our common enterprise-wide supply chain and central business platform delivers value through:
• Existing installed asset base
Delivering an Effortless Experience
Digital at Our Core World Class Supply Chain
Digitally Engage from Product Development to Material Purchase.
• Ability to leverage scale across multiple regions, servicing local and global customers
An effortless and reliable experience across search, select, purchase and delivery drives customer preference and retention, leading to organic growth.
• Capacity across private and 3rd party truck fleet, rail, barge and oceangoing vessels
• Unrivaled range of chemical and specialty products
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Leveraging the environmental and social value of our sustainability journey to drive Ingredients & Specialties growth.
Sustainable Products
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Global team of technical professionals delivering solutions for customers and suppliers
How We Create Value
• Deep local market knowledge and execution
• Premier product portfolio
Suppliers • Full-scale commercial
• Extensive global regulatory and consumer trend knowledge
• Global customer footprint
• Consistency in process and business approach
• Go-to-Market support for new and innovative materials
• Trend and regulatory knowledge support
• Product and application testing and support
2020 Sales $2.8B
2019-2021 GP CAGR
Economic Consensus
30,000+ Local
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Jim Holcomb President North America & Chemicals & Services
• Our People
• Customer Experience
U.S. & Canada Sales by Market(1,2)
Customer Growth
To be the #1 distributor in size, profitability and customer satisfaction in North America
LCD BCD Services
2020 Total C&S Sales $5.1B
(1) Historic growth rate for Chemicals & Services not provided given divestitures. (2) Sales by Market based on 3Q21YTD. (3) Weighted Average Economic Consensus for 2022 to 2024 is 2.5%, based on external forecast.
Value of Chemicals & Services
• Supplier Partnerships
Economic Consensus(3)
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Who are we? • Local Chemical Distribution (LCD)
– Largest, most local distributor in U.S. and Canada
– Receive in barge, rail and truck and deliver in rail, truck and parcel
– Most extensive network and facility capability
• Bulk Chemical Distribution (BCD)
– Market leader in U.S. and Canada for six major inorganic chemistries
– Producer-like economies of scale, with distributor level logistics
• Services
– Mini Bulk – high retention, safe, full-service model for difficult to handle inorganic and organic chemistries
– ChemCare – waste chemical collection and disposal
Chemicals & Services: Who Are We?
Who We Are From Rail & Barge in Bulk
To a Local Distribution Network 60 Minutes Away
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• Hybrid Sales – Allows the most appropriate channel to be used for the specific person, customer and/or event. Greater opportunity for quality interactions with valued content.
• Field Sales – With post-COVID uncertainty, we are developing an understanding of what our larger, more complex customers will want from a traditional direct-sales model. The market will ultimately determine, but our hybrid sales model lets the customer choose.
• Internal Sales – Our internal sales team has a direct connection with traditional outside sellers. Our team approach allows for larger territory size and customer coverage through customer segmentation.
• Digital Channels – Univar’s strength in digital is unmatched in North America. We provide customers with complete access to use our digital offering.
Benefits Include:
• Increased seller capacity = more cost effective
• Increased dialogue = better retention
• Experts matched to needs • Opportunities to better define process and automate processes
ACCOUNTABLE Account Manager
Customer Centric Model Omni-Channel Selling
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Investments in Salesforce Effectiveness and Customer Experience are Helping Us Attract and Retain Customers
• Tracking KPIs and sharing global learnings and progression
• From March to September 2021 we have seen a year-over-year increase in our transacting customer count as customers continue to seek secure supply in this dislocated market
• Steady increase in our sales pipeline, a 10% increase in Q3 over Q2 2021 while also seeing a double-digit increase in win rate during the same time frame
• Our Win/Loss ratio has steadily improved, with Q3 2021 posting the strongest numbers since the start of the pandemic
Moving our Scores from Good to Great
• CX is measured by Net Promotor Scores (NPS)
• As we move our NPS from good to great, we can command a premium value within the marketplace
• We are continuing to invest in on-time delivery to ‘first commit’ above 90%
• Investing in and utilizing Al and predictive analytics to get ahead of detractors
Salesforce Effectiveness (SFE) Customer Experience (CX)
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• Sustainability agendas and the social pressure to reduce carbon footprints will drive customers and suppliers toward supply-chain optimization
• Rail-based transportation emits 85% less greenhouse gases than that from tractor/truck transportation on the same tonnage
– Logistics must convert from direct bulk-truck to rail/barge with the last- mile delivery on electric or low-emission transportation
• Univar Solutions is uniquely positioned to enable supply-chain optimization for suppliers and customers:
– The industry's largest rail fleet and barge access in U.S.
– Sophisticated digital solutions to track and manage containers (returnable and recyclable to support sustainability)
– Full lifecycle chemical management and recycling to ensure minimal unnecessary reproduction
• Regional and specialty-only competitors may be too-little or too-late to meaningfully convert to a full lifecycle model
We are a value-adding partner for our suppliers' and customers’ sustainability objectives
Sustainability as a Differentiator – The Race to Net-Zero Accelerates Distribution Growth
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Building on Our Competitive Moat: Strategic Capital Investment • Our capital assets represent a strategic moat within the North
American marketplace
– No other distributor has our breadth of capabilities spanning North America
– Investment in Supersite in Western Canada complete in early 2023
• Opportunities to deploy capital in select markets to strengthen and capitalize on emerging market trends
– Re-industrialization of U.S. to secure domestic supply chains
– Electrification of the world as we move to a sustainable future
– Leveraging our unique partnerships with key suppliers to support ESG goals
• Ability to invest in building a sustainable network with which it is hard for the "Regionals" to compete
• Managed to ensure each project meets internal ROIC thresholds
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Self-Service • 24/7 access: documents / reorder • Reduced service support • “Smarter” customer engagement
Streamlined Operations • Optimize business processes • Digitize collections processes • Robotic Process Automation (RPA)
reduces human touch
Technical Differentiation • Digital formulation innovation • Webinars / training • Dedicated experiences
Prospects
The Customer Journey
Strategy Create a virtuous cycle that accelerates growth while reducing cost to serve.
Building on Our Competitive Moat: Strategic Capital Investment
Effortless Customer Experience
BeautyIngredients.com Beauty & Personal Care focused assortment & content
ChemCentral.com No-frills, instant transactions
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• Analytical services available to customers
• Highlight latest marketplace trends
• Database of technical solutions with easy incorporation into sample requests for formulators
• Integrate into industry experiences to drive scale of information and experiences
• Supports cross-linking of content and products across regions, industries, sub-industries, and suppliersScreenshot of dedicated experiences for BPC and Formulation Finder
Combining content and commerce capabilities creates an unmatched online experience that displays the breadth and depth of Univar Solutions’ product portfolio and technical expertise.
Technical Differentiation: Showcasing Unmatched Expertise
Showcased Technical Capabilities
Accelerated Deployment & Scale
Collaborative Partnerships
A digitized back of house ignites growth and reduces costs by simplifying processes, automating redundant activities, and providing transparency across the network while enabling flexibility to delight our suppliers and customers.
Streamlined Operations: Driving End to End Process Transformation
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Self-service Customers can engage online to resolve inquiries and reorder when it’s most convenient.
• Documents / Safety Data Sheets
Stuff?
“Where’s My Stuff” order confirmation emails drive customer adoption.
Self Service: Delighting While Reducing Cost to Serve
Key Features
Jen McIntyre Chief People & Culture Officer
• We published our first report in 2008 and we established a first set of goals in 2017
• We became a signatory of the United Nations Global Compact (UNGC) in 2018 and we adopted 'Advancing a Circular Economy' in 2019
• We’ve made good progress on 2021 goals and are proud to see these successfully conclude at year-end
• Our commitment to our ESG goals differentiates us with our suppliers and customers as they continue their respective journeys
• Our commitment to our ESG goals is expected to contribute to better financial results with more supplier authorizations, market share wins with customers and lower WS&A
Our Values
Portfolio Upgrade.
ESG is Aligned with Our Purpose, Mission, Values and Embedded in Our Operating Philosophy
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Environmental
Social
Reduction in CO2 emission intensity
Reduction in hazardous waste generated
Reduction in releases > 200 lbs
Safety Employee Networks
-15% -14%
-15% -21%
-15% -12%
-15% -38%
Maintain -47%
>= 6 8
Track
Targets were set in 2017 using a 2016 baseline We are on Pace to Meet or Exceed Our 2021 Targets
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ESG goals and met to 2025 and 2030
Climate Action • 20% by 2025 and 40% by
2030 reduction in scope 1&2 CO2e vs 2019/2020
• Net zero direct emissions by 2050
Serious About Safety • 20% Reduction in
TCIR rate vs 2019/2020
significant chemical releases by 2025 vs 2019/2020
Sustainable Sourcing • 100% of new and active
suppliers acknowledge our global supplier Code of Conduct by 2023
• 80% of suppliers (by spend) assessed against minimum standards by 2025
Diversity, Equity & Inclusion • Increase female
people leaders globally to 35% by 2025
• Increase ethnically diverse people leaders in the USA to 20% by 2025
Sustainability Solutions • Develop and communicate
product level sustainability characteristics
• Offer circular packaging solutions
Community Engagement • Financial investment
and employee involvement in the communities in which we live and work
Resource Use • 15% Reduction in
hazardous waste • 15% Reduction in
water waste vs 2019/2020
*Baseline set using a two-year average (2019 and 2020). 2020 results were impacted by lower activity levels due to the COVID-19 pandemic and therefore not fully representative to set a baseline.
Impactful Aggressive ESG Goals to 2025* and Beyond
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0
20
40
60
80
100
120
140
160
Scope 1 Scope 2
Science Based Targets to align a 1.5-degree ambition, including scope 3 are in development. *2020 baseline calculated as average of 2019 and 2020 global emissions.
2020 - 2025 CO2e ↓ 20%
By 2050 full abatement
CO2e Emissions (K mta)
efficiency • Developing sustainable behaviors and culture
Emission Elimination and Operational Excellence
• Transition to electrical site-based mobile equipment
• Adoption of electric/hybrid company cars • Install on-site renewable electricity
generation; procure zero-emission energy
Next Generation Technology Adoption
• Deliver growth through sustainable products and services that support emission reduction
Value Chain Sustainability
Fleet Diesel
Natural Gas
Electricity
Other
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Strategy Specific Actions
2020 2025 Target
• Creating a work environment that is respectful, inclusive and empowers diverse perspectives (it's the right thing to do and it's a competitive advantage for our business)
• Global Inclusion Council supporting Employee Resource Networks
• Striving to have at least one diverse candidate on hiring slates
• Implementing Self-ID to better understand our employee diversity
35%• Eight Employee Resource Networks operating to promote inclusion and understanding
• Established global 2025 targets and commitments
Female People Leaders globally
We are Taking Action to Improve Diversity, Equity and Inclusion
Our Approach
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Our Approach
• Continuously improve our proud safety record, protecting our workforce and demonstrating we are Serious About Safety
• Adhere to the highest industry standards and follow all laws and regulations
• Improve our processes and hazard recognition – going above and beyond regulatory requirements
• Train and retrain our employees
Actual
-47%
-20%
100%
Total Case Incident Rate (TCIR) – number of incidents per 200,000 hours worked versus 2016 baseline
Regional alignment on our global behavior-based safety program
TCIR – number of incidents per 200,000 hours worked versus 2019/2020 baseline
We are Continuing Our Industry Leading Safety Performance
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Integrated disclosures and commitment to the principles of the United Nations Global Compact (UNGC)
Commitment to fully adopt TCFD recommendations by 2022
Annual report disclosures indexed and in accordance with the Sustainability Accounting Standards Board (SASB)
Reporting Transparency and Climate Disclosure Commitments Preparing for Next Generation Consolidated Reporting
• Improving internal processes and controls for additional quantitative disclosures
• Our scope 1 and scope 2 greenhouse gas emission reduction targets are achievable with clear actions
• We are mapping our scope 3 emissions to enable the development of reduction plans in line with the Science Based Target initiative (SBTi)
• We are advancing TCFD disclosures to enhance our transparency on the risks we face from climate change
• We are supportive of efforts to consolidate reporting frameworks
Annual Sustainability Externally Assured for alignment with GRI and SASB standards
B- Rating
Sustainalytics "Low" ESG risk - 18.6/100, ranked #15 of 177 global industry peers
EcoVadis Silver Rating - 56/100, top 8% for our peer group
DEI Recognition 100/100 score on HRC's Corporate Equality Index. Rated a Best Place to Work for LGBT+ Equality by HRC
Voluntary reporting since 2008
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Nick Alexos Chief Financial Officer
2024 Outlook Gross Profit (GP) Overview – We expect organic growth to exceed general economic consensus
• Ingredients & Specialties growing 200bps+ faster than General Economic Consensus(1)
• Chemicals & Services growth above General Economic Consensus(1)
• Cumulative Growth of 3.5% versus 2021 reflects outperformance versus General Economic Consensus(1)
$2,349
$2,601
On average 200 bps greater than
economic consensus(1)
average of 2.5%
Outbound freight & handling costs are expected to maintain around 4% of Sales
(1) Weighted Average Economic Consensus for 2022 to 2024 is 2.5%, based on external forecasts.
• 4.7% growth after excluding chemical price inflation from 2021 numbers
$2,264 (Excluding Chemical
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Deliver synergies from Univar and Nexeo Integration • Stabilize operations post-SAP migrations with Canada and Mexico
• Complete remaining projects in 2021; capture wrap-around savings • Expect total realized net synergies of $120M
Achieve 9%+ Adjusted EBITDA margin in 2024 Supported by Sustained Productivity Capabilities • Enhance and engrain SAP processes / Enable
process re-engineering
optimization, system decommission, indirect procurement, and more
• Execute workflow to reduce product lifecycle complexity
Delight Customers, Enable Growth … Build onto Digital Ecosystem Platform • Deliver “Quick Win” use cases in Robotic
Process Automation
• Create customer, supplier and operational partner connectivity
• Enable new business models
$40M Identified
Value Capture Will Target an Incremental $100M+ of Net EBITDA
Please note the presentation includes non-GAAP financial measures; see Appendix for definitions, and where applicable, historical reconciliations to the most directly comparable GAAP financial measure.
Nexeo
48
WSA Walk
We expect Warehousing, Selling and Administrative (WS&A) to be nearly flat to 2021 levels
• SAP optimization and digitization of processes to lead the bulk of WSA productivity
• Inflation assumptions 3+% ~$40M a year in line with consensus
• Final Nexeo Net Synergies coming online at the beginning of 2022
$1,178
$1,205
($16)
($40)
($44)
2022
2024 Outlook
than 50%
($ in millions)
49
We expect Adjusted EBITDA to be $960M by 2024 with greater than 9% margins
• Chemical price inflation reversal
• Organic market share growth and supplier authorizations expected to drive better than general economic consensus
• 2024 Adjusted EBITDA margins of 9+%
2024 Outlook
• Growth and mix • Value Capture
savings • Offset by inflation
Please note the presentation includes non-GAAP financial measures; see Appendix for definitions, and where applicable, reconciliations to the most directly comparable GAAP financial measure.
$775
$960
Reversal of Chemical Price
($ in millions) Adjusted EBITDA Walk
• 2022 Adjusted EBITDA guidance expected to be greater than 2021
50
We expect Adjusted EBITDA to be $1B by 2024, including acquisitions
• Acquisitions expected to add ~$40M of Adjusted EBITDA to the 2024 goal.
($ in millions)
2024 Outlook
$775
Reversal of Chemical Price
$1 Billion
51
High ROI capex investments, ESG commitments, and maintenance capital-targeting $120M-$130M annually.
Primary focus on ingredient and specialty markets – targeting $300M-$400M of M&A for the next 3 years.
Targeting average capital return of 20%-30% of adjusted net income to shareholders, initially through share repurchases.
Targeted net leverage between 2.0x-2.5x, with significant availability for operations.
Capital Allocation through 2024
Please note the presentation includes non-GAAP financial measures; see Appendix for definitions.
Reinvest in our business
52
Expected Capex Spend of $120M-$130M for Growth, ESG Initiatives, and Maintenance Projects
2019-2021 CAPEX
2022-2024 CAPEX
53
• Attractive, robust M&A pipeline • Acquisitions to accelerate value
creation • Combined entity can
integration pre-close
• Market synergies • Supplier authorizations; product
offering; technical expertise
Investing in M&A for Value Creation
Recently executed an agreement to acquire a LATAM-based specialty food ingredients, CASE and pharma distributor with ~$50M in revenue.
We Expect $300M-$400M In M&A Through 2024
Our Criteria Our Approach
54
ROIC improvement driven by adjusted net income growth exceeding growth on total assets deployed
ROIC target excludes any contribution from M&A activity.
Targeting Continued Improvement in ROIC
55
Expected Robust Adjusted EBITDA growth, steady debt pay-down, and consistent business investment
(1) Pre any M&A considerations. (2) Cash interest projected using current reference rates. (3) Cash taxes does not consider any meaningful change in tax law.
Expected Net Free Cash Flows to Exceed 50% Conversion
Guidance(1) 2024 Adjusted EBITDA >9.0% Margin $960M
Change in Net Working Capital NWC would be 13%-14% of Quarterly Sales Annualized ($50)
Cash Interest(2) 2.0x - 2.5x Leverage ($65) Cash Taxes(3) 28%-30% of EBT ($175) Cash Pension Contribution <$25M ($20) Other Uses of Operating Cash <5% EBITDA ($25) Capital Expenditures <1.3% of Sales ($125) Net Free Cash Flow >50% Conversion $500M
56
Financial Targets and Objectives to 2024 • Organic Delivered Gross Profit 100+bps
above economic consensus(1)
• Strong Adjusted EBITDA growth to 9+% margin
• Productivity improvements to deliver OPEX (WS&A)(2) to Gross Profit ratio of less than 50%
• Increase Adjusted EBITDA to $960M through organic growth
• 50% net free cash flow conversion
• Deliver > 15% ROIC
• Strategic M&A to be accretive
• Average capital return of 20%-30% of adjusted net income to shareholders
Our Values
Portfolio Upgrade.
(1) Weighted Average Economic Consensus for 2022 to 2024 is 2.5%, based on external forecasts. (2) Includes only WS&A. Please note the presentation includes non-GAAP financial measures; see Appendix for definitions, and where applicable, historical reconciliations to the most directly comparable GAAP financial measure.
57
Thank you!
Appendix - Definitions of Non-GAAP Measures Adjusted EBITDA is defined as consolidated net income (loss), plus the sum of net interest expense, income tax
expense, depreciation, amortization, impairment charges, other operating expenses, net (w hich primarily consists of employee stock-based compensation expense, restructuring charges, litigation settlements, other employee severance costs, other facility closure costs, acquisition and integration related expenses and other unusual or non-recurring expenses), loss on extinguishment of debt and other income (expense), net (w hich consists of gains and losses on foreign currency transactions and undesignated derivative instruments, non-operating retirement benefits, and other non-operating activity), and in 2020, Brazil VAT charge. The Company is not providing reconciliations of forward-looking Adjusted EBITDA to the most directly comparable forw ard-looking GAAP measure because the information is not available w ithout unreasonable effort. This is due to the inherent diff iculty of forecasting the timing and amount of certain items, such as, but not limited to, (a) business acquisition and integration expenses, (b) non-operating retirement benefits, (c) gains and losses on foreign currency transactions and undesignated derivative instruments and (d) certain legal and other settlements and related costs. Each of the adjustments has not occurred, are out of the Company's control and/or cannot be reasonably predicted. For this reason, the Company is unable to address the probable signif icance of the unavailable information.
Adjusted EBITDA Margin is Adjusted EBITDA divided by net sales on a consolidated level and by external sales on a segment level. The Company is not providing reconciliations of forward-looking Adjusted EBITDA Margin to the most directly comparable forw ard-looking GAAP measure. See the discussion in the description of the Adjusted EBITDA non-GAAP measure in this Appendix.
Adjusted Net Income is consolidated net income (loss), plus the sum of amortization expense, impairment charges on intangible assets, loss (gain) on sale of business, items included in other operating expenses, net (Nexeo and shared service employee severance and facility closure costs, Nexeo acquisition and integration related expenses and multi-employer pension plan exit liability), loss on extinguishment of debt, items included in other income (expense), net (which consists of gains and losses on foreign currency transactions and undesignated derivative instruments, non-operating retirement benefits, pension mark to market and curtailment and settlement loss (gain), fair value adjustments for w arrants, debt refinancing costs) and income tax (benefit) expense related to reconciling items and other discrete tax items.
Adjusted Net Income for ROIC is consolidated net income (loss), plus the sum of impairment charges, loss (gain) on sale of business, items included in other operating expenses, net (restructuring, other employee severance and facility closure costs, acquisition and integration related expenses, multi-employer pension plan exit liability, gain (loss) on sale of property, plant and equipment and other unusual or non-recurring expenses), loss on extinguishment of debt, items included in other income (expense), net (w hich consists of gains and losses on foreign currency transactions and undesignated derivative instruments, pension mark to market and curtailment and settlement loss (gain), fair value adjustment for w arrants, debt refinancing costs and other non-operating activity) and income tax (benefit) expense related to reconciling items and other discrete tax items. The Company is not providing reconciliations of forward-looking Adjusted Net Income for ROIC to the most directly comparable forward-looking GAAP measure. See the discussion in the description of the Adjusted EBITDA non-GAAP measure in this Appendix.
Conversion Ratio is Adjusted EBITDA divided by Gross Profit (exclusive of depreciation).
Delivered Gross Margin is delivered gross profit divided by net sales on a consolidated level and by external sales on a segment level.
Delivered Gross Profit is gross profit (exclusive of depreciation) less outbound freight and handling.
Free Cash Flow is GAAP net cash provided (used) by operating activities, less capital expenditures, before integration and transaction related costs.
Gross Margin is gross profit (exclusive of depreciation) divided by net sales on a consolidated level and by external sales on a segment level.
Gross Profit (exclusive of depreciation) is net sales less cost of goods sold (exclusive of depreciation).
Leverage Ratio is total net debt divided by last tw elve months ("LTM") Adjusted EBITDA. The Company is not providing reconciliations of forward-looking Leverage Ratio to the most directly comparable forward-looking GAAP measure. See the discussion in the description of the Adjusted EBITDA non-GAAP measure in this Appendix.
Net Assets Deployed is average net working capital (trade accounts receivable plus inventory less trade accounts payable) plus average net property, plant & equipment.
Net Debt is total short-term and long-term debt plus short-term financing less cash and cash equivalents.
Net Free Cash Flow is GAAP net cash provided (used) by operating activities, less capital expenditures.
Net Free Cash Flow Conversion is GAAP net cash provided (used) by operating activities, less capital expenditures divided by Adjusted EBITDA. The Company is not providing reconciliations of forward-looking Net Free Cash Flow Conversion to the most directly comparable forw ard-looking GAAP measure. See the discussion in the description of the Adjusted EBITDA non-GAAP measure in this Appendix.
Net Working Capital is trade accounts receivable plus inventory less trade accounts payable.
Return on Invested Capital is the last tw elve months ("LTM") Adjusted Net Income for ROIC divided by Net Assets Deployed. The Company is not providing reconciliations of forward-looking Return on Invested Capital to the most directly comparable forw ard-looking GAAP measure. See the discussion in the description of the Adjusted EBITDA non-GAAP measure in this Appendix.
59
2021-2023 Adjusted EBITDA Margin Bridge
Please note the presentation includes non-GAAP financial measures; see Appendix for definitions, and where applicable, reconciliations to the most directly comparable GAAP financial measure. 60
Long-Term Growth in Adjusted EBITDA and Margin Core growth better than economic growth over the years
$ millions
Note: Numbers for 2012 and prior years have not been retrospectively adjusted for the adoption of the retirement benefit accounting standard, ASU 2017-07. Please note the presentation includes Non-GAAP Measures; see Appendix for definitions and historical reconciliations to the most directly comparable GAAP financial measures.
$250 $282 $333
$704 $636
6.8% 7.2% 7.4% 7.6% 7.7%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Adjusted EBITDA* Adjusted EBITDA Margin*
61
$231
$9
$217
$27
$262
$16
$289
$126
$356
$450
($170) ($141)
($114) ($145)
($90) ($83) ($95) ($123) ($111)
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Net cash provided by operating activities Capital expenditures
Resilient Operating Cash Flow Cash flow generation is resilient through various market environments – including 2009
$ millions
Note: Numbers for 2012 and prior years do not reflect retrospective reclassification for ASU 2016-15. 62
Performance In a Downturn Semi-variable cost structure limits financial downside during a downturn
Note: Numbers for 2012 and prior years do not reflect retrospective reclassification for ASU 2016-15.
Peak Adjusted EBITDA Decline: -12.0%
Duration of Downturn: 4 quarters
Duration Until Full Recovery:
$282
$333
$498
$438
$499
$646
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Post-crisis trough
Full recovery
Please note the presentation includes Non-GAAP Measures; see Appendix for definitions and historical reconciliations to the most directly comparable GAAP financial measures.
Note: figures show LTM Adjusted EBITDA.
63
Net Debt and Leverage Ratio Over Time De-leveraging and improving credit quality
$3,666 $2,963 $2,643 $2,428 $2,259 $2,384 $2,256
5.9x
5.2x 4.8x
4.1x 3.5x
3.3x 3.5x
2014 2015 2016 2017 2018 2019 2020 Net Debt Leverage Ratio
Net Debt and Leverage Ratio (1)(2)
Upgraded by Moody’s and S&P to Ba3/BB in Feb 2019
Upgraded by Moody’s to B2 following equity
IPO in June 2015
Upgraded by Moody’s to B1 in Oct 2017
Upgraded by S&P to B+ in June 2017 Upgraded by Fitch to
BB+ in Feb 2021
April 2021
April 2021
(1) Leverage ratio represents Net Debt / LTM Adjusted EBITDA, as defined by the Company's credit agreements, includes adjustments for acquisitions, divestitures and excludes the impact of synergies not yet realized. For December 31, 2019, LTM Adjusted EBITDA includes two months of Nexeo Chemicals Adjusted EBITDA, based on the 2018 full year estimate of $127 million for the periods prior to the acquisition on February 28, 2019.
(2) Non-GAAP Measures; see Appendix for definitions and reconciliations to the most directly comparable historical GAAP financial measures. 64
Appendix – GAAP Debt to Net Debt Reconciliation
(1) LTM Adjusted EBITDA, as defined by the Company's credit agreements, includes adjustments for acquisitions, divestitures and excludes the impact of synergies not yet realized. For 2019, LTM Adjusted EBITDA includes two months of Nexeo Chemicals Adjusted EBITDA, based on the 2018 full year estimate of $127 million for the periods prior to the acquisition on February 28, 2019. For Q3 2021, LTM Adjusted EBITDA excludessix monthsof Adjusted EBITDA of $9 million related to the Distrupol businessdivestiture on April 1, 2021.
($ in millions) 2014 2015 2016 2017 2018 2019 2020 Q3 2021 Total short-term and long-term debt 3,811.3$ 3,117.3$ 2,954.0$ 2,882.0$ 2,372.1$ 2,713.8$ 2,640.6$ 2,278.9$ Add: Short-term financing 61.1 33.5 25.3 13.4 8.1 0.7 2.1 - Less: Cash and cash equivalents (206.0) (188.1) (336.4) (467.0) (121.6) (330.3) (386.6) (220.8)
Total net debt 3,666.4$ 2,962.7$ 2,642.9$ 2,428.4$ 2,258.6$ 2,384.2$ 2,256.1$ 2,058.1$
LTM Adjusted EBITDA(1) 624.8$ 573.3$ 547.4$ 593.8$ 640.4$ 725.4$ 635.8$ 728.0$
Leverage ratio (Total net debt/LTM Adjusted EBITDA) 5.9x 5.2x 4.8x 4.1x 3.5x 3.3x 3.5x 2.8x
65
Sheet1
$ 3,811.3
$ 3,117.3
$ 2,954.0
$ 2,882.0
$ 2,372.1
$ 2,713.8
$ 2,887.7
$ 2,929.1
$ 2,688.0
$ 2,640.6
$ 2,278.9
(206.0)
(188.1)
(336.4)
(467.0)
(121.6)
(330.3)
(379.7)
(547.4)
(273.7)
(386.6)
(220.8)
5.9x
5.2x
4.8x
4.1x
3.5x
3.3x
3.7x
3.6x
3.8x
3.5x
2.8x
Appendix - GAAP Net Income (Loss) to Adjusted EBITDA Reconciliation
2019-2020 Note: (1) The fair value adjustment for warrantswas reclassified to “other expense (income), net,” from “other operating (income) expense, net,” to conform to the updated 2021 presentation.
2013-2018 Notes: (2) Retirement benefit restatement adjustmentsfor 2013-2018 include pension and other post retirement benefits interest cost, expected return on assets, and prior service credits. (3) Retirement benefit restatement adjustmentsfor 2013-2018 include pension and other post retirement benefitsmarkto market gain/loss, curtailments, and settlements.
2005-2012 Notes: (2) 2005-2012 numbers have not been retrospectively adjusted for ASU 2017-07. Do not include retirement benefit restatement adjustments for pension and other post retirement benefits interest cost,
expected return on assets, and prior service credits. (3) 2005-2012 numbersdo not include retirement benefit restatement adjustmentsfor pension and other post retirement benefitsmarkto market gain/loss, curtailments, and settlements. 66
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Net income (loss) 121.3$ 133.3$ 46.7$ (8.0)$ (2.2)$ (70.6)$ (176.2)$ (197.4)$ (82.3)$ (20.1)$ 16.5$ (68.4)$ 119.8$ 172.3$ (100.2)$ 52.9$ Net income from discontinued operations - - - - - - - - - - - - - - (5.4) - Depreciation / amortization 41.4 46.6 81.6 132.4 126.4 128.6 198.4 205.0 228.1 229.5 225.0 237.9 200.4 179.5 214.7 222.9 Interest expense, net 27.9 31.0 127.0 315.6 307.2 301.9 273.6 268.1 294.5 250.6 207.0 159.9 148.0 132.4 139.5 112.4 Income tax expense (benefit) 58.9 71.2 59.6 18.7 14.2 30.4 15.9 75.6 (9.8) (15.8) 10.2 (11.2) 49.0 49.9 104.5 6.1 EBITDA 249.5 282.1 314.9 458.7 445.6 390.3 311.7 351.3 430.5 444.2 458.7 318.2 517.2 534.1 353.1 394.3 Other operating (income) expense, net (1)(2) - - - - (39.1) 86.2 140.3 177.7 85.5 79.3 89.0 37.2 55.4 73.5 291.2 89.4 Other expense (income), net (1)(2)(3) - - 17.9 39.3 (4.6) (4.5) 4.0 1.9 (73.4) 99.8 13.5 58.1 17.4 32.7 77.5 59.2 Impairment charges - - - - 36.0 12.6 173.9 75.8 135.6 0.3 - 133.9 - - 7.0 40.2 Gain on sale of business - - - - - - - - - - - - - - (41.4) 50.6 Loss on extinguishment of debt - - - - - 14.5 16.1 0.5 2.5 1.2 12.1 - 3.8 0.1 19.8 1.8 Brazil VAT recovery - - - - - - - - - - - - - - (8.3) 0.3 Inventory step-up adjustment - - - - - - - - - - - - - - 5.3 - Adjusted EBITDA (2) 249.5$ 282.1$ 332.8$ 498.0$ 437.9$ 499.1$ 646.0$ 607.2$ 580.7$ 624.8$ 573.3$ 547.4$ 593.8$ 640.4$ 704.2$ 635.8$
Recon - NI to Adj. EBITDA
2005 - 2019 Reconciliation of Net Income (Loss) to Adjusted EBITDA
(in Millions)
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
(5.4)
- 0
- 0
- 0
- 0
- 0
(39.1)
86.2
140.3
177.7
85.5
79.3
89.0
37.2
- 0
- 0
55.4
- 0
- 0
17.9
39.3
(4.6)
(4.5)
4.0
1.9
(73.4)
99.8
13.5
58.1
- 0
- 0
17.4
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
(41.4)
50.6
- 0
- 0
- 0
- 0
- 0
14.5
16.1
0.5
2.5
1.2
12.1
- 0
- 0
- 0
3.8
73.5
55.4
37.2
89.0
79.3
85.5
177.7
140.3
86.2
(39.1)
- 0
- 0
- 0
- 0
0.1
3.8
- 0
12.1
1.2
2.5
0.5
16.1
14.5
- 0
- 0
- 0
- 0
- 0
32.7
17.4
58.1
13.5
99.8
(73.4)
1.9
4.0
(4.5)
(4.6)
39.3
17.9
- 0
- 0
2019-2020 Notes:
(1) Retirement benefit restatement adjustments for 2013-2018 include pension and other post retirement benefits interest cost, expected return on assets, and prior service credits.
2013-2018 Notes:
(1) Retirement benefit restatement adjustments for 2013-2018 include pension and other post retirement benefits interest cost, expected return on assets, and prior service credits.
(2) Retirement benefit restatement adjustments for 2013-2018 include pension and other post retirement benefits mark to market gain/loss, curtailments, and settlements.
2005-2012 Notes:
(1) 2005-2012 numbers have not been retrospectively adjusted for ASU 2017-07. Do not include retirement benefit restatement adjustments for pension and other post retirement benefits interest cost, expected return on assets, and prior service credits.
(2) 2005-2012 numbers do not include retirement benefit restatement adjustments for pension and other post retirement benefits mark to market gain/loss, curtailments, and settlements.
Recon - NI to Adj. NI
Reconciliation of Net (Loss) Income to Adjusted Net Income
(in Millions)
- 0
- 0
(5.4)
- 0
3.8
34.2
50.4
68.6
(9.7)
- 0
(1.3)
(1.3)
1.9
(1.1)
26.7
(8.3)
(Gain) loss on sale of business, property, plant and equipment and other assetss (1)
(11.3)
2.0
(51.3)
(0.7)
13.6
21.2
40.9
8.0
9.1
0.1
21.0
- 0
3.1
22.0
152.1
5.5
(12.1)
(25.6)
9.5
(71.6)
(14.0)
(15.6)
(15.3)
- 0
$ 197.1
$ 230.2
$ 231.6
$ 141.4
(1) Reconciling items represent items disclosed in "Note 6: Other operating expenses,net" and "Note 8: Other expense (income), net" in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2019, excluding stock-based compensation and non-operating retirement benefits.
(2) Tax on reconciling items is calculated as the difference between the tax provisions on US GAAP pre-tax earnings and Adjusted pre-tax earnings utilizing the appropriate tax rates and laws of each jurisdiction.
Recon - Adj. EBITDA to NI
2005 - 2018 Adjusted EBITDA Reconciliation to Net Income (Loss)
(in Millions)
- 0
- 0
- 0
- 0
(39.1)
86.2
140.3
177.7
85.5
79.3
89.0
37.2
- 0
- 0
55.4
- 0
- 0
17.9
39.3
(4.6)
(4.5)
4.0
1.9
(73.4)
99.8
13.5
58.1
- 0
- 0
17.4
- 0
- 0
- 0
- 0
- 0
14.5
16.1
0.5
2.5
1.2
12.1
- 0
- 0
- 0
3.8
$ 172.3
GAAP Net Income to Adjusted Net Income for ROIC
(1) LTM Adjusted Net Income for ROIC is used in the calculation of the Company's ROIC. (2) Tax on reconcil ing items is calculated as the difference between the tax provisions on GAAP pre-tax earnings and Adjusted pre-tax earnings util izing the appropriate tax rates and
laws of each jurisdiction.
2019 2020 LTM (1)
2021 (Q3)
Net income (loss) (100.2)$ 52.9$ 270.1$ Net income from discontinued operations (5.4) - - Pension mark to market loss 50.4 52.8 52.8 Pension curtailment and settlement gains (1.3) (0.6) (0.6) Exchange loss (gain) (7.4) 6.8 7.5 Derivative loss (gain) 26.7 4.8 0.7 (Gain) loss on sale of business, property, plant and equipment and other assets (51.3) 26.9 (77.2) Restructuring, employee severance and other facility closure costs 40.9 31.4 16.3 Impairment charges 7.0 40.2 5.6 Inventory step-up adjustment 5.3 - - Brazil VAT recovery (8.3) 0.3 - Loss on extinguishment of debt and debt refinancing costs 21.0 1.9 9.3 Acquisition and integration related costs 152.1 62.4 61.3 Saccharin legal settlement 62.5 - - Fair value adjustment for warrants 7.0 0.8 (26.6) Multi-employer pension plan exit - - 31.2 Other 23.6 7.8 (2.5) Income tax expense (benefit) related to reconciling items (2) 9.5 (63.9) (63.7) Other discrete tax items (2) (0.5) (12.6) 17.4 Adjusted net income for ROIC 231.6$ 211.9$ 301.6$
67
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ROIC improvement driven by adjusted net income growth exceeding growth on total assets deployed
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Resilient Operating Cash Flow
Performance In a Downturn
Appendix - GAAP Net Income (Loss) to Adjusted EBITDA Reconciliation
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