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July 30, 2007

Rockwood Specialties/NYA102428p1.ppt 7/13/2014 11:40 AM ( 1 ). Second Quarter Results. July 30, 2007. Forward Looking Statements.

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July 30, 2007

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  1. Rockwood Specialties/NYA102428p1.ppt 7/13/201411:40 AM (1) Second Quarter Results July 30, 2007

  2. Forward Looking Statements • This conference call may contain certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 concerning the business, operations and financial condition of Rockwood Holdings, Inc. and its subsidiaries (“Rockwood”). Although Rockwood believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, there can be no assurance that its expectations will be realized. "Forward-looking statements" consist of all non-historical information, including the statements referring to the prospects and future performance of Rockwood. Actual results could differ materially from those projected in Rockwood’s forward-looking statements due to numerous known and unknown risks and uncertainties, including, among other things, the "Risk Factors" described in Rockwood’s 2006 Form 10-K on file with the Securities and Exchange Commission. Rockwood does not undertake any obligation to publicly update any forward-looking statement to reflect events or circumstances after the date on which any such statement is made or to reflect the occurrence of unanticipated events.

  3. Where to Find Materials/Archives • A replay of the conference call will be available through August 6, 2007 at (800) 475-6701 in the U.S., access code: 875904, and internationally at (320) 365-3844, access code: 875904. The webcast and the materials will also be archived on our website at www.rocksp.com and are accessible by clicking on “Company News.”

  4. Agenda • Yr 2007 Second Quarter and First Half Results • Financial Summary • Summary Appendices

  5. Yr 2007 Second Quarter and First Half Results

  6. Second Quarter Highlights • Excellent second quarter performance. Achieved net sales growth of 10.3% including 2.9% price increase; Adjusted EBITDA was $169.0M, up 15.4% vs. second quarter ‘06. • Excluding the impact of foreign exchange, net sales growth was 5.6% and Adjusted EBITDA growth was 10.4% vs. second quarter ‘06. • Leverage ratio improved to 3.89x. • Adjusted EBITDA increase primarily driven by strong performance in Specialty Chemicals and Advanced Ceramics. • Successful implementation of price increase to recover high copper costs drove year-over-year improvement in Performance Additives results. • Strong price and continued improvement in productivity help achieve 19.9% Adjusted EBITDA margin.

  7. First Half Highlights • Excellent first half performance. Achieved net sales growth of 10.1% including 2.8% price increase; Adjusted EBITDA was $325.2M, up 16.5% vs. first half ‘06. • Excluding the impact of foreign exchange, net sales growth was 4.9% and Adjusted EBITDA growth was 10.7% vs. first half ‘06. • Adjusted EBITDA increase primarily driven by strong performance in Specialty Chemicals and Advanced Ceramics. • Strong price and continued improvement in productivity help achieve 19.7% Adjusted EBITDA margin.

  8. Second Quarter and First Half Summary • A reconciliation of Net Income to Adjusted EBITDA is provided. See Appendices. • For the second quarter, Yr 2007 based on share count of 76,371; Yr 2006 based on share count of 75,111. For the first half, Yr 2007 based on share count of 76,150; Yr 2006 based on share count of 75,041. • Excluding the impact of foreign exchange. See Appendices. • A reconciliation of Net Income / EPS as reported to Net Income / EPS as adjusted is provided. See Appendices.

  9. Net Sales Growth

  10. Results By Segment – Second Quarter • A reconciliation of Net Income to Adjusted EBITDA is provided. See Appendices. • Excluding the impact of foreign exchange. See Appendices.

  11. Results By Segment – First Half • A reconciliation of Net Income to Adjusted EBITDA is provided. See Appendices. • Excluding the impact of foreign exchange. See Appendices.

  12. Specialty Chemicals • Outstanding results continue in both Surface Treatment and Fine Chemicals businesses. • Surface Treatment favorably impacted by higher volume and selling prices in most markets, particularly in European automotive as well as general industrial applications. • Fine Chemicals improved sales driven by strong pricing and volume in lithium. • A reconciliation of Net Income to Adjusted EBITDA is provided. See Appendices. • Excluding the impact of foreign exchange. See Appendices.

  13. Performance Additives • Improvement in Adjusted EBITDA vs. Q2 2006 driven by improvement in Timber Treatment and strength in Color Pigments and Services in Europe: • Successful implementation of price increases for Timber Treatment Chemicals helped offset impact of high copper costs. • Color Pigments construction related business showed strong volume in Europe offsetting the weakness in the North Americanmarket. • Clay based Additives negatively impacted by a decrease in the carbonless paper markets. • First year-over-year improvement in Performance Additives Adjusted EBITDA since Q3 2005. • A reconciliation of net income to Adjusted EBITDA is provided. See Appendices. • Excluding the impact of foreign exchange. See Appendices.

  14. Copper Price (COMEX Month-End) ($/lb) Yr 2007 Yr 2003 Yr 2004 Yr 2005 Yr 2006 • $1/lb change in copper price translates to about $20M of profit impact.

  15. Titanium Dioxide Pigments • Sales increase driven primarily by higher selling prices for functional additives and higher volumes of titanium dioxide products. • Results were adversely impacted by unfavorable mix of TiO2 products, lower TiO2 prices, higher raw materials and energy costs, as well as by higher maintenance costs related to planned downtime. • A reconciliation of Net Income to Adjusted EBITDA is provided. See Appendices. • Excluding the impact of foreign exchange. See Appendices.

  16. Advanced Ceramics • Increased volumes across most businesses, including medical products, mechanical systems and piezo applications, drove sales and earnings gains. • The business continued to benefit from bolt-on acquisitions and productivity improvements. • A reconciliation of Net Income to Adjusted EBITDA is provided. See Appendices. • Excluding the impact of foreign exchange. See Appendices.

  17. Specialty Compounds • Added volume from acquisition of Megolon business helped offset impact of a slow down in the wire & cable market and a reduction in customer inventory levels. • A reconciliation of Net income to Adjusted EBITDA is provided. See Appendices. • Excluding the impact of foreign exchange. See Appendices.

  18. Electronics • Strength in the printed circuit board business was offset by lower volumes and selling prices in the High Purity Chemicals and Photomasks businesses. • US Wafer Reclaim business sold in February 2007. • A reconciliation of Net income to Adjusted EBITDA is provided. See Appendices. • Excluding the impact of foreign exchange. See Appendices.

  19. Financial Summary

  20. Second Quarter and First Half Summary • A reconciliation of Net Income to Adjusted EBITDA is provided. See Appendices. • For the second quarter, Yr 2007 based on share count of 76,371; Yr 2006 based on share count of 75,111. For the first half, Yr 2007 based on share count of 76,150; Yr 2006 based on share count of 75,041. • Excluding the impact of foreign exchange. See Appendices. • A reconciliation of Net Income / EPS as reported to Net Income / EPS as adjusted is provided. See Appendices.

  21. Results By Segment – Second Quarter • A reconciliation of Net Income to Adjusted EBITDA is provided. See Appendices. • Excluding the impact of foreign exchange. See Appendices.

  22. Results By Segment – First Half • A reconciliation of Net Income to Adjusted EBITDA is provided. See Appendices. • Excluding the impact of foreign exchange. See Appendices.

  23. Income Statement - Reported MTM of interest rate swaps. Gain in ’06 and loss in ’07. MTM of Euro denominated debt and cash position Viance JV Groupe Novasep ’07 results primarily related to the gain on divestment

  24. Reconciliation of Net Income to Adjusted EBITDA Groupe Novasep Viance JV

  25. Earnings Per Share

  26. Depreciation and Amortization • Assumptions: • Euro/US$ = 1.35 for the remainder of Yr 2007 • $0.10 change in Euro/US$ exchange rates translate to approximately $3.0M of impact on total depreciation and amortization each quarter.

  27. Interest Expense (Net of Interest Income) • Assumptions: • Assume Euro/US$ = 1.35 for the remainder of Yr 2007 • $0.10 change in Euro/US$ exchange rates translate to approximately $1.8M of impact each quarter. • Non-cash impact of mark-to-market valuation of interest rate hedge instruments. Changes primarily driven by changes in short-term interest rates. • Includes interest income.

  28. Consolidated Net Debt (b) • A reconciliation of Net Income to Adjusted EBITDA is provided. See Appendices. • Covenant ratio calculated under senior credit agreement for Rockwood Specialties Group, Inc is 3.97x, which specifies maximum level of cash at $100M and converts Euro denominated debt at average Euro-rate during LTM period.

  29. Net Debt / LTM Adjusted EBITDA

  30. Free Cash Flow

  31. Summary

  32. Moving Forward • Focus portfolio. • Focus on organic growth. • +5% per year • Bolt on acquisitions. • +3% sales growth per year • Continue to improve productivity. • +3% per year • Improve financial ratios. • Debt to Adjusted EBITDA of 3.5 • Adjusted EBITDA margin of +19% • EPS growth of +15%

  33. Appendices

  34. Reconciliation of Net Income to Adjusted EBITDA Groupe Novasep Viance JV

  35. Reconciliation of Pre-Tax Income to Adjusted EBITDA – Second Quarter

  36. Reconciliation of Pre-Tax Income to Adjusted EBITDA – First Half

  37. FX impact on Results – Second Quarter

  38. FX impact on Results – First Half

  39. Earnings Per Share - 2007

  40. Earnings Per Share - 2006

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