Element Solutions Inc Announces 2021 Fourth Quarter and Full Year Financial Results

  • 2021 net sales of $2.40 billion, an increase of 29% on a reported basis or 13% on an organic basis from 2020
  • 2021 GAAP diluted EPS of $0.82, compared to $0.31 in 2020
  • 2021 adjusted EPS of $1.38, compared to $0.96 in 2020, an increase of 44%
  • 2021 reported net income of $203 million, compared to $77 million in 2020
  • 2021 adjusted EBITDA of $525 million, an increase of 20% from last year on a constant currency basis
  • 2021 cash flows from operating activities of $326 million; 2021 free cash flows of $280 million, an increase of 12% over 2020 free cash flows of $249 million
  • Introduces 2022 full year financial guidance:

    • Adjusted EBITDA in the range of $575 million to $590 million
    • Adjusted EPS of $1.55 to $1.60
    • 2022 expected free cash flow in the range of $310 million to $325 million

MIAMI–(BUSINESS WIRE)–Element Solutions Inc (NYSE:ESI) (“Element Solutions” or the “Company”), a global and diversified specialty chemicals company, today announced its financial results from continuing operations for the three and twelve months ended December 31, 2021.

Executive Commentary

President and Chief Executive Officer Benjamin Gliklich commented, “Element Solutions had a record year in 2021 with strong growth in sales, adjusted EBITDA, adjusted EPS and free cash flow. In this unusual macro backdrop of both record demand and significant disruptions in raw material supply, logistics and labor, our organization continues to execute at a high level. Our results are a testament to the dedication of our exceptional global team as well as our culture of embracing challenges and delivering on our commitments. In 2021, we were also pleased to deploy a significant amount of capital strategically with high expected returns. We believe the acquisitions of Coventya and HK Wentworth will improve our growth rate in our core markets and attractive adjacencies.”

Mr. Gliklich continued, “The acceleration in high-end electronics markets that began in 2020 continued in 2021 and shows no indication of slowing in 2022. Expansion in 5G infrastructure and the mobile technologies associated with its rollout, increasing production of electric vehicles, and the rising demand for semiconductors in a variety of applications are all trends we expect to contribute to our growth for many years to come. At the same time, low auto inventories and strong underlying demand suggest medium-term cyclical tailwinds for our more industrially oriented businesses when supply chains normalize in 2022 and beyond. For the full year 2022, we expect solid organic growth and the contribution from Coventya’s synergies to generate adjusted EBITDA of between $575 million and $590 million, a constant currency increase of 13% to 16%. We expect adjusted EPS to grow between 12% and 16% to a range of $1.55 to $1.60. Our expectation for full year 2022 free cash flow generation of between $310 million and $325 million would set another record, providing continued opportunities for the balanced, high-returning capital allocation we have demonstrated over the last three years.”

Mr. Gliklich concluded, “We have delivered on our vision and commitments in our first three years as Element Solutions running our excellent businesses better and deploying their strong free cash flows to become a best-in-class supplier to customers, create more opportunities for our people and compound per share earnings for our investors. We are pleased to have delivered on our initial 5-year target to double adjusted EPS in just three years, and we look forward to sharing our compelling path forward at our upcoming investor day.”

Fourth Quarter 2021 Highlights (compared with fourth quarter 2020):

  • Net sales on a reported basis for the fourth quarter of 2021 were $647 million, an increase of 21% over the fourth quarter of 2020. Organic net sales, which exclude the impact of currency changes, certain pass-through metal prices and acquisitions, increased 2%.

    • Electronics: Net sales increased 16% to $400 million. Organic net sales increased 1%.
    • Industrial & Specialty: Net sales increased 28% to $247 million. Organic net sales increased 4%.
  • Fourth quarter of 2021 earnings per share (EPS) performance:

    • GAAP diluted EPS was $0.02, as compared to $0.12 for the same period last year.
    • Adjusted EPS was $0.31 for the fourth quarter 2021 and 2020, respectively.
  • Reported net income for the fourth quarter of 2021 was $6 million, as compared to $30 million for the fourth quarter of 2020.
  • Adjusted EBITDA for the fourth quarter of 2021 was $122 million, a decrease of 3%. On a constant currency basis, adjusted EBITDA decreased 2%.

    • Electronics: Adjusted EBITDA was $80 million, a decrease of 1%. On a constant currency basis, adjusted EBITDA decreased 2%.
    • Industrial & Specialty: Adjusted EBITDA was $43 million, a decrease of 5%. On a constant currency basis, adjusted EBITDA decreased 3%.
    • Adjusted EBITDA margin decreased by 460 basis points to 18.9%. On a constant currency basis, adjusted EBITDA margin decreased by 470 basis points.

Full Year 2021 Highlights (compared with full year 2020):

  • Net sales on a reported basis for the full year 2021 were $2.40 billion, an increase of 29% over the prior full year period. Organic net sales increased 13%.

    • Electronics: Net sales increased 31% to $1.53 billion. Organic net sales increased 13%.
    • Industrial & Specialty: Net sales increased 27% to $866 million. Organic net sales increased 13%.
  • Full year 2021 EPS performance:

    • GAAP diluted EPS was $0.82, as compared to $0.31 for the same period last year.
    • Adjusted EPS was $1.38, as compared to $0.96 in 2020.
  • Reported net income for the full year 2021 was $203 million, as compared to $77 million for 2020.
  • Adjusted EBITDA for the full year 2021 was $525 million, an increase of 24% as compared to 2020. On a constant currency basis, adjusted EBITDA increased 20%.

    • Electronics: Adjusted EBITDA was $355 million, an increase of 28%. On a constant currency basis, adjusted EBITDA increased 23%.
    • Industrial & Specialty: Adjusted EBITDA was $170 million, an increase of 17%. On a constant currency basis, adjusted EBITDA increased 14%.
    • Adjusted EBITDA margin decreased by 90 basis points to 21.9%. On a constant currency basis, adjusted EBITDA margin decreased by 120 basis points.

2022 Guidance

For the full year 2022, the Company expects adjusted EBITDA to be in the range of $575 million to $590 million, adjusted EPS in the range of $1.55 to $1.60 and free cash flow in the range of $310 million to $325 million. These results, if achieved, would be new annual records since the launch of Element Solutions in 2019. In addition, the Company expects first quarter 2022 adjusted EBITDA to be approximately flat year-on-year at constant currency.

Recent Developments

Upcoming Investor Day – As previously announced, the Company plans to host an investor day in Miami Beach, Florida on February 24, 2022 beginning at 10:00 a.m. (Eastern Time). For additional information or to register for the event, please contact Varun Gokarn ([email protected]). A live webcast and presentation slides will be accessible on Element Solutions’ website at www.elementsolutionsinc.com prior to the event, and a replay will become available following the event.

Stock Repurchase Program – On November 18, 2021, the Board of Directors of the Company increased the authorization under its stock repurchase program from approximately $185 million in remaining capacity to $750 million. The remaining authorization under the stock repurchase program, as amended, was approximately $732 million at December 31, 2021.

Cash Dividend – On February 15, 2022, the Board of Directors of the Company declared a cash dividend of $0.08 per outstanding share of its common stock. The dividend is expected to be paid on March 15, 2022 to stockholders of record at the close of business on March 1, 2022. For the full year 2021, the Company paid cash dividends of $61.9 million.

HSO Acquisition – On January 26, 2022, the Company completed the HSO acquisition. The HSO group is a multi-national developer of technology and chemistry for decorative and functional surface finishing with a focus on environmentally sustainable products, especially in the field of plating on plastics. The HSO group will be included in the Company’s Industrial Solutions business line within its Industrial & Specialty segment.

Conference Call

Element Solutions will host a webcast/dial-in conference call to discuss its 2021 fourth quarter and full year financial results at 8:30 a.m. (Eastern Time) on Wednesday, February 23, 2022. Participants on the call will include Executive Chairman Sir Martin E. Franklin, President and Chief Executive Officer Benjamin Gliklich and EVP, Chief Financial Officer Carey J. Dorman.

To listen to the call by telephone, please dial 866-518-6930 (domestic) or 203-518-9822 (international) and provide the Conference ID: ESIQ421. The call will be simultaneously webcast at www.elementsolutionsinc.com. A replay of the call will be available after completion of the live call at www.elementsolutionsinc.com.

About Element Solutions

Element Solutions Inc is a leading specialty chemicals company whose businesses supply a broad range of solutions that enhance the performance of products people use every day. Developed in multi-step technological processes, these innovative solutions enable customers’ manufacturing processes in several key industries, including consumer electronics, power electronics, semiconductor fabrication, communications and data storage infrastructure, automotive systems, industrial surface finishing, consumer packaging and offshore energy.

Forward-Looking Statements

This release is intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995 as it contains “forward-looking statements” within the meaning of the federal securities laws. These statements will often contain words such as “expect,” “anticipate,” “project,” “will,” “should,” “believe,” “intend,” “plan,” “assume,” “estimate,” “predict,” “seek,” “continue,” “outlook,” “may,” “might,” “aim,” “can have,” “likely,” “potential,” “target,” “hope,” “goal,” “priority,” “guidance” or “confident” and variations of such words and similar expressions. Examples of forward-looking statements include, but are not limited to, statements, beliefs, projections and expectations regarding expected high returns from investments; anticipated benefits of the Coventya and HK Wentworth acquisitions, including synergies and positioning the Company’s business for improved growth rate in its core markets and attractive adjacencies; business trends, including with respect to continued acceleration in high-end electronics markets in 2022, 5G infrastructure, mobile technologies, electric vehicles and semiconductors, and their expected contributions to the Company’s growth for many years to come; medium-term cyclical tailwinds for the Company’s more industrially oriented businesses; supply chain normalization in 2022 and beyond; expected organic growth and contribution from Coventya’s synergies in 2022; first quarter 2022 constant currency guidance for adjusted EBITDA; 2022 full year financial guidance for adjusted EBITDA, adjusted EPS and free cash flow; record full year free cash flow results in 2022; continued opportunities for balanced, high-returning capital allocation; and compelling path forward. These projections and statements are based on management’s estimates, assumptions or expectations with respect to future events and financial performance, and are believed to be reasonable, though are inherently uncertain and difficult to predict. Such projections and statements are based on the assessment of information available as of the current date, and the Company does not undertake any obligations to provide any further updates. Actual results could differ materially from those expressed or implied in the forward-looking statements if one or more of the underlying estimates, assumptions or expectations prove to be inaccurate or are unrealized. Important factors that could cause actual results to differ materially from those suggested by the forward-looking statements include, but are not limited to, the duration and scope of the COVID-19 pandemic; the efficacy, availability and/or public acceptance of vaccines and treatments targeting COVID-19 and/or its variants; governments’, businesses’, and individuals’ actions in response to the pandemic; the general impact of the pandemic on economic activity, including financial market instability, and on the Company’s customers, employees, suppliers, vendors and other stakeholders; business and management strategies; outstanding debt and debt leverage ratio; shares repurchases; debt and/or equity issuance or retirement; expected returns to stockholders; and the impact of acquisitions, divestitures, restructurings, refinancings, impairments and other unusual items, including the Company’s ability to integrate and obtain the anticipated benefits, results and synergies from these transactions or other related strategic initiatives. Additional information concerning these and other factors that could cause actual results to vary is, or will be, included in the periodic and other reports of Element Solutions filed with the Securities and Exchange Commission. Element Solutions undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

ELEMENT SOLUTIONS INC

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

(dollars in millions, except per share amounts)

Three Months Ended December 31,

 

Twelve Months Ended December 31,

2021

 

2020

 

2021

 

2020

Net sales

$

646.9

 

 

$

536.6

 

 

$

2,399.8

 

 

$

1,853.7

 

Cost of sales

 

410.1

 

 

 

313.9

 

 

 

1,439.0

 

 

 

1,067.7

 

Gross profit

 

236.8

 

 

 

222.7

 

 

 

960.8

 

 

 

786.0

 

Operating expenses:

 

 

 

 

 

 

 

Selling, technical, general and administrative

 

163.4

 

 

 

131.3

 

 

 

611.2

 

 

 

504.7

 

Research and development

 

12.9

 

 

 

11.4

 

 

 

49.7

 

 

 

48.6

 

Total operating expenses

 

176.3

 

 

 

142.7

 

 

 

660.9

 

 

 

553.3

 

Operating profit

 

60.5

 

 

 

80.0

 

 

 

299.9

 

 

 

232.7

 

Other (expense) income:

 

 

 

 

 

 

 

Interest expense, net

 

(14.6

)

 

 

(12.7

)

 

 

(54.2

)

 

 

(63.4

)

Foreign exchange (loss) gain

 

(6.4

)

 

 

5.6

 

 

 

15.8

 

 

 

(36.5

)

Other expense, net

 

(1.6

)

 

 

(1.3

)

 

 

(9.8

)

 

 

(51.7

)

Total other expense

 

(22.6

)

 

 

(8.4

)

 

 

(48.2

)

 

 

(151.6

)

Income before income taxes and non-controlling interests

 

37.9

 

 

 

71.6

 

 

 

251.7

 

 

 

81.1

 

Income tax expense

 

(31.8

)

 

 

(41.7

)

 

 

(48.3

)

 

 

(4.3

)

Net income from continuing operations

 

6.1

 

 

 

29.9

 

 

 

203.4

 

 

 

76.8

 

(Loss) income from discontinued operations, net of tax

 

(1.7

)

 

 

 

 

 

0.3

 

 

 

(1.1

)

Net income

 

4.4

 

 

 

29.9

 

 

 

203.7

 

 

 

75.7

 

Net income attributable to non-controlling interests

 

(0.5

)

 

 

 

 

 

(0.4

)

 

 

 

Net income attributable to common stockholders

$

3.9

 

 

$

29.9

 

 

$

203.3

 

 

$

75.7

 

 

 

 

 

 

 

 

 

Earnings (loss) per share

 

 

 

 

 

 

 

Basic from continuing operations

$

0.02

 

 

$

0.12

 

 

$

0.82

 

 

$

0.31

 

Basic from discontinued operations

 

(0.01

)

 

 

 

 

 

 

 

 

(0.01

)

Basic attributable to common stockholders

$

0.01

 

 

$

0.12

 

 

$

0.82

 

 

$

0.30

 

 

 

 

 

 

 

 

 

Diluted from continuing operations

$

0.02

 

 

$

0.12

 

 

$

0.82

 

 

$

0.31

 

Diluted from discontinued operations

 

(0.01

)

 

 

 

 

 

 

 

 

(0.01

)

Diluted attributable to common stockholders

$

0.01

 

 

$

0.12

 

 

$

0.82

 

 

$

0.30

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

Basic

 

247.3

 

 

 

247.2

 

 

 

247.4

 

 

 

248.8

 

Diluted

 

247.8

 

 

 

248.2

 

 

 

247.9

 

 

 

249.9

 

ELEMENT SOLUTIONS INC

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

December 31,

(dollars in millions)

2021

 

2020

Assets

 

 

 

Cash & cash equivalents

$

330.1

 

 

$

291.9

 

Accounts receivable, net of allowance for doubtful accounts of $12.2 and $9.7 at December 31, 2021 and 2020, respectively

 

492.2

 

 

 

403.4

 

Inventories

 

274.4

 

 

 

203.1

 

Prepaid expenses

 

29.4

 

 

 

24.0

 

Other current assets

 

88.4

 

 

 

67.5

 

Total current assets

 

1,214.5

 

 

 

989.9

 

Property, plant and equipment, net

 

278.1

 

 

 

240.4

 

Goodwill

 

2,526.3

 

 

 

2,252.7

 

Intangible assets, net

 

956.7

 

 

 

855.9

 

Deferred income tax assets

 

81.5

 

 

 

77.2

 

Other assets

 

81.3

 

 

 

64.0

 

Non-current assets of discontinued operations

 

 

 

 

3.3

 

Total assets

$

5,138.4

 

 

$

4,483.4

 

Liabilities & stockholders’ equity

 

 

 

Accounts payable

$

138.4

 

 

$

95.6

 

Current installments of long-term debt

 

12.7

 

 

 

7.4

 

Accrued expenses and other current liabilities

 

264.1

 

 

 

204.2

 

Current liabilities of discontinued operations

 

 

 

 

7.1

 

Total current liabilities

 

415.2

 

 

 

314.3

 

Debt

 

1,894.2

 

 

 

1,508.1

 

Pension and post-retirement benefits

 

36.1

 

 

 

43.3

 

Deferred income tax liabilities

 

140.0

 

 

 

112.9

 

Other liabilities

 

152.1

 

 

 

186.7

 

Total liabilities

 

2,637.6

 

 

 

2,165.3

 

Stockholders’ equity

 

 

 

Common stock, 400.0 shares authorized (2021: 261.9 shares issued; 2020: 261.3 shares issued)

 

2.6

 

 

 

2.6

 

Additional paid-in capital

 

4,166.6

 

 

 

4,122.9

 

Treasury stock (2021: 15.2 shares; 2020: 14.2 shares)

 

(159.2

)

 

 

(137.7

)

Accumulated deficit

 

(1,331.9

)

 

 

(1,473.2

)

Accumulated other comprehensive loss

 

(197.4

)

 

 

(194.8

)

Total stockholders’ equity

 

2,480.7

 

 

 

2,319.8

 

Non-controlling interests

 

20.1

 

 

 

(1.7

)

Total equity

 

2,500.8

 

 

 

2,318.1

 

Total liabilities and stockholders’ equity

$

5,138.4

 

 

$

4,483.4

 

ELEMENT SOLUTIONS INC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

2021

 

 

2020

(dollars in millions)

Q1

 

Q2

 

Q3

 

Q4

 

 

FY

 

 

FY

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

82.3

 

 

$

81.1

 

 

$

35.9

 

 

$

4.4

 

 

 

$

203.7

 

 

 

$

75.7

 

Net income (loss) from discontinued operations, net of tax

 

 

 

 

2.0

 

 

 

 

 

 

(1.7

)

 

 

 

0.3

 

 

 

 

(1.1

)

Net income from continuing operations

 

82.3

 

 

 

79.1

 

 

 

35.9

 

 

 

6.1

 

 

 

 

203.4

 

 

 

 

76.8

 

Reconciliation of net income to net cash flows provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

39.1

 

 

 

40.1

 

 

 

41.5

 

 

 

43.2

 

 

 

 

163.9

 

 

 

 

161.4

 

Deferred income taxes

 

5.2

 

 

 

(40.9

)

 

 

(1.7

)

 

 

(9.3

)

 

 

 

(46.7

)

 

 

 

(53.0

)

Foreign exchange (gain) loss

 

(28.9

)

 

 

8.5

 

 

 

7.3

 

 

 

6.2

 

 

 

 

(6.9

)

 

 

 

29.3

 

Incentive stock compensation

 

4.3

 

 

 

17.0

 

 

 

12.5

 

 

 

6.3

 

 

 

 

40.1

 

 

 

 

6.0

 

Other, net

 

(2.3

)

 

 

3.1

 

 

 

10.3

 

 

 

6.9

 

 

 

 

18.0

 

 

 

 

61.3

 

Changes in assets and liabilities, net of acquisitions:

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

(26.3

)

 

 

(11.7

)

 

 

(21.0

)

 

 

10.3

 

 

 

 

(48.7

)

 

 

 

(27.3

)

Inventories

 

(44.6

)

 

 

(23.3

)

 

 

(10.6

)

 

 

32.0

 

 

 

 

(46.5

)

 

 

 

1.4

 

Accounts payable

 

30.4

 

 

 

7.4

 

 

 

3.8

 

 

 

(24.8

)

 

 

 

16.8

 

 

 

 

(5.3

)

Accrued expenses

 

(18.8

)

 

 

10.0

 

 

 

22.0

 

 

 

29.4

 

 

 

 

42.6

 

 

 

 

26.1

 

Prepaid expenses and other current assets

 

(9.0

)

 

 

(5.8

)

 

 

(1.0

)

 

 

(9.3

)

 

 

 

(25.1

)

 

 

 

(9.6

)

Other assets and liabilities

 

1.2

 

 

 

(3.1

)

 

 

(7.3

)

 

 

24.3

 

 

 

 

15.1

 

 

 

 

8.9

 

Net cash flows provided by operating activities of continuing operations

 

32.6

 

 

 

80.4

 

 

 

91.7

 

 

 

121.3

 

 

 

 

326.0

 

 

 

 

276.0

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

(8.5

)

 

 

(8.8

)

 

 

(10.4

)

 

 

(18.6

)

 

 

 

(46.3

)

 

 

 

(28.8

)

Proceeds from disposal of property, plant and equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1.7

 

Acquisitions of businesses, net of cash acquired

 

 

 

 

(50.9

)

 

 

(485.6

)

 

 

 

 

 

 

(536.5

)

 

 

 

(9.0

)

Other, net

 

19.0

 

 

 

0.1

 

 

 

(5.1

)

 

 

(0.1

)

 

 

 

13.9

 

 

 

 

(3.8

)

Net cash flows provided by (used in) investing activities of continuing operations

 

10.5

 

 

 

(59.6

)

 

 

(501.1

)

 

 

(18.7

)

 

 

 

(568.9

)

 

 

 

(39.9

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt proceeds, net of discount

 

 

 

 

 

 

 

398.0

 

 

 

 

 

 

 

398.0

 

 

 

 

800.0

 

Repayments of borrowings

 

(1.9

)

 

 

(1.8

)

 

 

(3.0

)

 

 

(3.3

)

 

 

 

(10.0

)

 

 

 

(807.9

)

Repurchases of common stock

 

 

 

 

 

 

 

(1.7

)

 

 

(17.9

)

 

 

 

(19.6

)

 

 

 

(55.7

)

Dividends

 

(12.4

)

 

 

(14.8

)

 

 

(14.9

)

 

 

(19.8

)

 

 

 

(61.9

)

 

 

 

(12.4

)

Payment of financing fees

 

 

 

 

 

 

 

(5.1

)

 

 

 

 

 

 

(5.1

)

 

 

 

(46.2

)

Other, net

 

0.1

 

 

 

(6.5

)

 

 

0.2

 

 

 

(5.2

)

 

 

 

(11.4

)

 

 

 

(1.4

)

Net cash flows (used in) provided by financing activities of continuing operations

 

(14.2

)

 

 

(23.1

)

 

 

373.5

 

 

 

(46.2

)

 

 

 

290.0

 

 

 

 

(123.6

)

Net cash flows used in discontinued operations

 

 

 

 

 

 

 

(0.4

)

 

 

(3.1

)

 

 

 

(3.5

)

 

 

 

(14.7

)

Effect of exchange rate changes on cash and cash equivalents

 

(3.3

)

 

 

3.2

 

 

 

(2.8

)

 

 

(2.5

)

 

 

 

(5.4

)

 

 

 

4.0

 

Net increase (decrease) in cash and cash equivalents

 

25.6

 

 

 

0.9

 

 

 

(39.1

)

 

 

50.8

 

 

 

 

38.2

 

 

 

 

101.8

 

Cash and cash equivalents at beginning of period

 

291.9

 

 

 

317.5

 

 

 

318.4

 

 

 

279.3

 

 

 

 

291.9

 

 

 

 

190.1

 

Cash and cash equivalents at end of period

$

317.5

 

 

$

318.4

 

 

$

279.3

 

 

$

330.1

 

 

 

$

330.1

 

 

 

$

291.9

 

Supplemental disclosure information of continuing operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid for interest

$

20.8

 

 

$

4.2

 

 

$

20.2

 

 

$

5.4

 

 

 

$

50.6

 

 

 

$

51.8

 

Cash paid for income taxes

$

13.4

 

 

$

21.6

 

 

$

16.1

 

 

$

20.1

 

 

 

$

71.2

 

 

 

$

66.5

 

ELEMENT SOLUTIONS INC

ADDITIONAL FINANCIAL INFORMATION

(Unaudited)

I. UNAUDITED SEGMENT RESULTS

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

(dollars in millions)

2021

 

2020

 

Reported

 

Constant

Currency

 

Organic

 

2021

 

2020

 

Reported

 

Constant

Currency

 

Organic

Net Sales

Electronics

$

399.8

 

$

343.2

 

16

%

 

17

%

 

1

%

 

$

1,533.8

 

$

1,172.1

 

31

%

 

27

%

 

13

%

Industrial & Specialty

 

247.1

 

 

193.4

 

28

%

 

31

%

 

4

%

 

 

866.0

 

 

681.6

 

27

%

 

25

%

 

13

%

Total

$

646.9

 

$

536.6

 

21

%

 

22

%

 

2

%

 

$

2,399.8

 

$

1,853.7

 

29

%

 

26

%

 

13

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

Electronics

$

79.8

 

$

80.8

 

(1

)%

 

(2

)%

 

 

 

$

355.1

 

$

277.3

 

28

%

 

23

%

 

 

Industrial & Specialty

 

42.6

 

 

45.1

 

(5

)%

 

(3

)%

 

 

 

 

169.8

 

 

145.3

 

17

%

 

14

%

 

 

Total

$

122.4

 

$

125.9

 

(3

)%

 

(2

)%

 

 

 

$

524.9

 

$

422.6

 

24

%

 

20

%

 

 

 

Three Months Ended

December 31,

 

Constant

Currency

 

Twelve Months Ended

December 31,

 

Constant

Currency

(dollars in millions)

2021

 

2020

 

Change

 

2021

 

Change

 

2021

 

2020

 

Change

 

2021

 

Change

Adjusted EBITDA Margin

Electronics

20.0

%

 

23.5

%

 

(350)bps

 

19.8

%

 

(370)bps

 

23.2

%

 

23.7

%

 

(50)bps

 

22.8

%

 

(90)bps

Industrial & Specialty

17.3

%

 

23.3

%

 

(600)bps

 

17.3

%

 

(600)bps

 

19.6

%

 

21.3

%

 

(170)bps

 

19.5

%

 

(180)bps

Total

18.9

%

 

23.5

%

 

(460)bps

 

18.8

%

 

(470)bps

 

21.9

%

 

22.8

%

 

(90)bps

 

21.6

%

 

(120)bps

II. UNAUDITED CAPITAL STRUCTURE

(dollars in millions)

 

 

Maturity

 

Interest Rate

 

December 31, 2021

Instrument

 

 

 

 

 

 

 

Corporate Revolver

 

 

1/31/2024

 

LIBOR plus 2.25%

 

$

Term Loans

(1)

 

1/31/2026

 

LIBOR plus 2.00%

 

 

1,125.6

Total First Lien Debt

 

 

 

 

 

 

 

1,125.6

Senior Notes due 2028

 

 

9/1/2028

 

3.875%

 

 

800.0

Other Debt

 

 

 

 

 

 

 

4.5

Total Debt

 

 

 

 

 

 

 

1,930.1

Cash Balance

 

 

 

 

 

 

 

330.1

Net Debt

 

 

 

 

 

 

$

1,600.0

Adjusted Shares Outstanding

(2)

 

 

 

 

 

 

251.3

Market Capitalization

(3)

 

 

 

 

 

$

6,101.6

Total Capitalization

 

 

 

 

 

 

$

7,701.6

(1)

Element Solutions swapped its floating term loan rate to a fixed rate for its initial $750 million term loans through January 2024 and its incremental $400 million add-on term loans through January 2025, which could vary in the future due to changes in the euro and the U.S. dollar exchange rate. At December 31, 2021, approximately 100% of the Company’s debt was fixed.

(2)

See “Non-GAAP Adjusted Common Shares at December 31, 2021 and 2020 (Unaudited)” following the Adjusted Earnings Per Share table below.

(3)

Based on the closing price of the shares of Element Solutions of $24.28 at December 31, 2021.

III. SELECTED FINANCIAL DATA

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

(dollars in millions)

2021

 

2020

 

2021

 

2020

Interest expense

$

14.8

 

$

12.9

 

$

55.2

 

$

64.7

Interest paid

 

5.4

 

 

4.1

 

 

50.6

 

 

51.8

Income tax expense

 

31.8

 

 

41.7

 

 

48.3

 

 

4.3

Income taxes paid

 

20.1

 

 

18.8

 

 

71.2

 

 

66.5

Capital expenditures

 

18.6

 

 

7.1

 

 

46.3

 

 

28.8

Proceeds from disposal of property, plant and equipment

 

 

 

 

 

 

 

1.7

Contacts

Investor Relations Contact:

Varun Gokarn

Senior Director, Strategy and Finance

Element Solutions Inc

1-561-406-8465

Media Contact:

Liz Cohen

Managing Director

Kekst CNC

1-212-521-4845

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