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投资者日2003年3月2日纽约证券交易所
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投资者日2018议程上午8:30Welcome and Opening Remarks
Tom Blaser
Senior Vice President, Chief Financial Officer
Company Overview
Fred Festa
Chairman and Chief Executive Officer
Strategy and Grace Value Model
Hudson La Force
President and Chief Operating Officer
Specialty Catalysts
Al Beninati
President, Specialty Catalysts
9:55 a.m.上午10:15上午10:25休息。Materials Technologies
Sandra Wisniewski
President, Materials Technologies
Refining Technologies
Tom Petti
President, Refining Technologies
Financial Overview
Tom Blaser
Senior Vice President, Chief Financial Officer
Closing Remarks
Fred Festa
Chairman and Chief Executive Officer
11:45 a.m.下午12:30。领导午餐会
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投资者日2018安全港
3关于安全港的前瞻性声明
此演示文稿包含前瞻性陈述,即与未来而非过去事件有关的信息。这些表述一般包括“相信”、“‖-计划”、“‖
-意图”、“‖-目标”、“‖-威尔”、“‖-预期”、“‖-建议”、“‖-预期”、“展望”、“‖”--继续、‖或类似的表述。前瞻性报表包括(但不限于)预期的财务状况;业务结果;现金流量;筹资计划;业务战略;业务计划;资本和其他支出;竞争地位;增长机会;新技术和降低成本倡议的好处;证券市场。对于这些声明,GRACE声称对“证券法”第27A节和“交易法”第21E节所载的前瞻性声明提供了安全港的保护。与其他企业一样,GRACE也受到风险和不确定性的影响(
),这些风险和不确定性可能导致GRACE的实际结果与其预测大不相同,或者可能导致其他前瞻性陈述被证明是不正确的。Factors that could cause actual
results to differ materially from those contained in the forward-looking statements include, without limitation: risks related to foreign operations, especially in emerging regions; the
cost and availability of raw materials, energy and transportation; the effectiveness of its research and development and growth investments; acquisitions and divestitures of assets
and businesses; developments affecting Grace’s outstanding indebtedness; developments affecting Grace's funded and unfunded pension obligations; its legal and environmental
proceedings; environmental compliance costs; uncertainties related to Grace’s ability to realize the anticipated benefits of the separation transaction; the inability to establish or
maintain certain business relationships and to retain key personnel; natural disasters such as storms and floods; changes in tax laws and regulations; and those additional factors
set forth in Grace's most recent Annual Report on Form 10-K, quarterly report on Form 10-Q和目前关于表格8-K的报告已提交证券和交易委员会,可在因特网上查阅,网址为www.sec.gov。报告的结果不应被视为未来业绩的迹象。读者被告诫不要过分依赖格蕾丝的预测和前瞻性的陈述,这只说明了那些预测和声明作出的日期。Grace
undertakes no obligation to release publicly any revision to the projections and forward-looking statements contained in this presentation, or to update them to reflect events or
circumstances occurring after the date of this presentation.
Non-GAAP Financial Terms
In this presentation, Grace presents financial information in accordance with U.S. generally accepted accounting principles (U.S. GAAP), as well as the non-GAAP financial
information described in the Appendix.GRACE认为,这种非GAAP财务信息提供了关于其业务绩效的有用的补充信息,
提高了期间间的可比性,并明确了用于评估其业务绩效的信息管理用途。在附录中,GRACE提供了这些非GAAP财务措施与按照美国GAAP计算和列报的最直接可比财务计量的对账。这些非公认会计原则的财务措施不应被视为替代按照美国公认会计原则计算的财务措施,而按照美国公认会计原则计算的财务结果和根据这些结果进行的调节应得到认真评估。
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Investor Day 2018 |
OUR GIFT TO YOU – DONATION TO BLUE WATER BALTIMORE
4
Blue Water Baltimore’s
Mission:
Blue Water Baltimore is a not-
for-profit organization with a
mission to restore the quality of
Baltimore’s rivers, streams and
Harbor to foster a healthy
environment, a strong
economy, and thriving
communities.
5-Year Anniversary Stats:
Clocked over 43,000
volunteer hours
种植了10,000多棵树
收集了50万磅垃圾
资料来源:https://www.blewaterbaltimore.org/
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公司概况:弗雷德·费斯塔董事长兼首席执行官
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Investor Day 2018 |
Robust technology platform driving
leading-edge products and delivering strong
customer value proposition
2
Operating excellence focused
on process improvement discipline
across the company; significant runway
for opportunity
3
Top-tier profitability and ROIC with path
for continued shareholder value creation
6
Solid long-term growth potential with
5% mid-point organic CAGR; additional
M&A kicker
5
Proactively-managed portfolio aligned
to positive global secular and macro drivers;
well-positioned to deliver sustainable,
profitable growth
4
KEY MESSAGES
6
Leading global specialty chemicals
and materials supplier with transformed
portfolio, well-established industry alliances,
and licensing leverage
1
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投资者日2018
显著改变了投资组合…
Rebalanced Advanced Refining Technologies®
(ART®) Joint Venture to 50% economic interest
Streamlined supply and improved technical service
after ART received exclusive right to sell CLG's
hydrocracking and lubes hydroprocessing catalysts
Acquired Dow’s UNIPOL® Polypropylene Process
Technology Licensing and Catalysts Business
Separated Construction Products segment and
Darex Packaging Technologies business; spun-out
as GCP Applied Technologies Inc.(NYSE:GCP)
Exited non-core product lines within Materials
Technologies segment
Reduced facility footprint by 77% from spin-off and
portfolio alignment
Acquired BASF’s Polyolefin Catalysts business
Opened Global Process Innovation Center near
Columbia headquarters to optimize the development
side of R&D
Positioned Materials Technologies to be roll-up
leader in broad materials additives market
Acquiring Albemarle’s Polyolefin Catalysts business
Investing $100M in new hydroprocessing capacity /
capabilities through ART JV
Realigning FCC to have the most extensive value
product offerings at the most efficient cost position
7
Transformation Years
2010 – 2016
Leveraging Strong Core to Grow
2016 – 2018+
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Investor Day 2018 |
2010 2017 2014
SHIFTING CATALYSTS TO PETROCHEMICALS, CLEANER FUELS
8
Petrochemicals and Clean Fuels Traditional Transportation Fuels
How Grace
catalysts are
being used
1
VALUE
CREATED
Stronger and more consistent growth and FCF
Higher portion of technology in value-added offerings
Catalysts sold with a license affiliation increased from zero in 2010 to >15% in
2018 estimated sales
1 Charts based on percentage of total catalysts 销售;包括未合并的艺术合资企业
52%48%,61%
39%
66%
34%
$1.273亿$1653亿$1724b
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Investor Day 2018 |
GRACE AT A GLANCE
9
The leading global supplier of process catalysts and specialty silicas
~$5B
Market
Cap1
~$2B
2017 Sales2, 3
31%
Adj. EBITDA
Margin2
24%
Adj. EBIT
ROIC2
75%
Business
Outside
the US
80%
#1 or #2
Business
Positions
Operating
Segments
Refining Technologies | Specialty Catalysts | Materials Technologies
1 As of 2/20/18
2 Based on FY2017
3 Catalysts Technologies includes unconsolidated ART joint venture; FCC = Fluid Catalytic Cracking, SC = Specialty Catalysts, ART = Advanced Refining Technologies;
FCC and ART together constitute the Refining Technologies operating segment
27%
7%
24%
22%
6%
6%
7%
2017 Grace
Sales3 Distribution
Catalysts
Technologies
$1.8B
80% Sales2,3
Materials
Technologies
$0.4B
20% Sales2
Consumer/
Pharma
Chemical
Process
Coatings Traditional
Fuels
PetroChem
Feedstocks
Plastics
Clean Fuels
* Definitions of non-GAAP financial terms and reconciliations to the closest GAAP term are provided in the Appendix
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Investor Day 2018 |
SEASONED, PASSIONATE, INDUSTRY-LEADING TEAM
Fred Festa
Chairman,
Chief Executive Officer
Joined Grace: 2003
Hudson La Force
President,
Chief Operating Officer
2008
Mark Shelnitz
Vice President, General
Counsel, Secretary
1983
New to Grace within
the last three years
Liz Brown
Vice President, Chief
Human Resources Officer
2015
Tom Blaser
Senior Vice President,
Chief Financial Officer
2016
Keith Cole
Vice President, Government
Relations and Environment,
Health, and Safety
2014
10
Tom Petti
President,
Refining Technologies
1992
Sandra Wisniewski
President,
Materials Technologies
2017
Al Beninati
President,
Specialty Catalysts
2014
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Investor Day 2018 |
Reporting
Segments Catalysts Technologies Materials Technologies
End
Markets
Petrochemical and Chemical Refining
Coatings, Consumer/Pharma
and Chemical Process
Product
Lines
Specialty
Catalysts
FCC
Catalysts
Hydroprocessing
Catalysts (ART)
Silica-based and
Silica-Alumina-based Materials
End
Products
MARKET-LEADING PRODUCT PORTFOLIO
11
Connected by inorganic material science
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Investor Day 2018 |
PORTFOLIO TIED TO POSITIVE, SUSTAINABLE GLOBAL TRENDS
12
Global Demand
Rising Living Standards
FCC
Hydroprocessing (ART)
Specialty Catalysts
Consumer/Pharma
Chemical Processing
Coatings
Plastics
Transportation
Fuels
Growth in
Household
Income
Stricter
Environmental 和健康
标准/策略
调整/策略更改
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Investor Day 2018 |
UNIQUE CUSTOMER VALUE PROPOSITION
13
Unique value proposition has led to deep customer relationships
Deep Applications
Expertise
Industry-leading expertise in customer applications
New product development driven by deep knowledge of customer requirements
New Product
Innovation
11 R&D and technical service facilities in 7 countries
Top quartile among peers for R&D spend
Vitality Index: ~30% of revenue from products launched in last 5 years
Patent
Protection
Over 800 active patents worldwide; 8-year average remaining life
800 new patent applications in progress
About one-third of revenue from active patent products
Manufacturing
Know-How
Unique, synergistic mix of material science expertise
Significant trade secrets support key manufacturing capabilities
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Investor Day 2018 |
Manufacturing and R&D centers
Headquarters
Columbia, MD
North
America
28%
Latin
America
6%
Asia
Pacific
27%
EMEA
39%
14
Close to our customers…with technology, supply chain, and FX advantages
20 facilities in 9 countries
11 facilities in 7 countries
Manufacturing
R&D and
Technical Service
2 pending acquisition
1 in development
% 2017 sales
FLEXIBLE, DIVERSE GLOBAL MANUFACTURING NETWORK
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Investor Day 2018 |
STRENGTHS AND SUSTAINABLE COMPETITIVE ADVANTAGES
15
Focused portfolio with highly
complementary business mix
Flexible global
manufacturing network
Disciplined acquirer with history
of successful integrations
Strong relationships with
blue-chip customers
Our culture: performance-driven
and results-oriented
CORE STRENGTHS
SUSTAINABLE ADVANTAGES
High barriers
to entry in many
product lines
Applications expertise
and technical service
driving long-term
customer
relationships
Unique, synergistic
mix of
materials science 深度技术平台和
创新的记录
![Page 16](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal016.jpg)
Investor Day 2018 |
KEY TAKEAWAYS
16
Energized management team fostering transformation and leveraging
process and technological expertise to drive productivity and profitability
Market-leading positions aligned for growth; innovative technologies,
customer-centric culture, and favorable global trends
Building on our high-performance culture, doing what we say we are going
to do, and continuously improving
Disciplined financial management and capital allocation; poised for
significant value creation from robust opportunity set
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战略和格雷斯价值模型
Hudson La Force
总裁兼首席运营官
![Page 18](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal018.jpg)
Investor Day 2018 |
High-performance culture focused on
meeting commitments and continuous
improvement
2
Tightly-aligned operating model creates
value for customers, investors and
employees
3
Reaffirming 2016-2021 financial
framework: growth, earnings, cash
5
Early in operating excellence journey;
significant runway of opportunity
4
密钥消息
18
定向投资,以加速处于良好地位的投资组合
1
![Page 19](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal019.jpg)
Investor Day 2018 |
Acquire to build our
technology and
manufacturing capabilities
for our customers
4
Invest in great people
to strengthen our
high-performance culture
2
STRATEGIC FRAMEWORK FOR PROFITABLE GROWTH
Invest to accelerate
growth and extend our
competitive advantages
1
19
Formalize the
Grace Value Model
to drive operating
excellence
2 3
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Investor Day 2018 |
Demand for plastics and
petrochemical feedstocks
Growth in household disposable income
Demand for cleaner fuels and heavy
oil upgrading
Stricter environmental and health standards
4%-6%
Annual global
plastics demand
growth
~4%
Annual global
middle class
consumption
growth
5%-7%
Annual global
hydroprocessing
catalysts demand
growth
PORTFOLIO POSITIONED FOR GROWTH
20
Well-positioned in high-value markets with sustainable growth drivers
2021
$3B+
2016
$2B+
Organic Growth
Drivers
Operating
Excellence
M&A
Sources: IMF, PWC, IHS, EIA.gov, AIPMA and Plastindia, TATA Strategic Analysis, Brookings Institution, Grace internal estimates
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投资者日2018投资于我们的投资组合…
High-return investments in growth capacity,
technology, and operating excellence
Specialty Catalysts: PP/PE catalysts capacity, matched with
customer capacity investments and licensee start-up timing
Materials Technologies: High-value silica capacity matched
with customer investments and product development
Refining Technologies: Catalysts for petchem feedstocks
and cleaner fuels matched with customer capacity investments
Technology: R&D for high-value resins, max propylene, resid
upgrading, cleaner fuels, high-value silica, and pharma fine
chemicals
Operating Excellence: Investments in GRACE制造
系统,改进的过程控制,制造
性能和生产力
21
…To accelerate growth and extend our competitive advantages
Most organic growth
Reinvesting >40% of cash flow
in growth and productivity
Medium organic growth
Reinvesting >30% of cash flow
in growth and productivity
Less organic growth
Reinvesting
![Page 22](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal022.jpg)
Investor Day 2018 |
CONNECTED BUSINESSES THROUGH MATERIALS SCIENCE
22
Applications
Basic Science
Organic
Chemicals
MgCl2 Silica
Silica
Alumina
Alumina
Raney
Metal
BioPharma Chemical
Catalysts
Materials
Technologies
Polyolefin
Catalysts
Refining
Catalysts
Pharmaceutical
Intermediates
Molecular Sieve
Adsorbents
Coatings Additives
Reinforcement /
Binder Agents
Chromatography
Products
Food/Beverage/Personal
Care Processing Aids
Surface
Modifiers
Methanol-to-Olefin Catalysts
Hydrogenation Catalysts
Zeolite Catalysts
Ebullating Bed
Distillate
Hydroprocessing Catalysts
Fixed Bed
Hydrocracking
Fluid Cracking Catalysts
FCC
Additives
Light Olefins
Environmental
UNIPOL®
Licensing
Chromium
Catalysts
Ziegler-Natta
Catalysts
Single-site
Catalysts
Organometallic
Components
Polypropylene
Catalysts
Catalysts
Technologies
Materials
Technologies
Catalysts Carriers
![Page 23](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal023.jpg)
Investor Day 2018 |
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WHEN WILL TRANSPORTATION FUELS PEAK?
Car ownership increases in
non-OECD countries
Motorcycles offer lower-cost entry
point to personal mobility
OECD fleet grows but cars per
1,000 people increases by only 10%
Gasoline demand flattens
with improvements in new-car
fuel economy, electric vehicles
Diesel demand grows 30% to meet
trucking, marine needs
Jet fuel, natural gas, and biofuels
grow significantly in select sectors
―By 2035, 1.8 million barrels per day of
global oil demand will be displaced by
EVs, less than 2% of total oil demand‖
By 2040...
23
Global fleet to grow about 80% to
~1.8 billion vehicles
Electric vehicles could reach
15% of the fleet
Electric vehicles penetrate small,
mid-size and hybrid segments
Sources: Wood Mackenzie – ―Electric Vehicles: On the verge of an EV revolution?‖
and ―The rise of the electric car: how will it impact oil, power and metals?‖
Exxon – ―November 2017 Investor Deck‖
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02
47
8
Refiners shifting FCC unit output to petrochemical feedstocks
![Page 24](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal024.jpg)
Investor Day 2018 |
FCC UNITS REMAIN CORE TO REFINERIES
24
FCC units will produce $ billions in value to and through the peak
Shift from fuels to propylene
underway for many years
– Requires higher-value FCC
catalyst, especially when
processing low quality crudes
FCC units are generally the
most flexible and profitable units
in the refinery
Refiners continue to invest in
FCC units
– Significant growth in FCC
capacity in last 5 years
– Announced investments
continue to add capacity
+++ very advantaged ++ more advantaged + advantaged - less advantaged
- - least advantaged
Gasoline Producing Unit
(% of total pool)
FCC
(40%)
Reformer
(25%)
Alkylation
(10%)
Isomerization
(5%)
Hydrocracker
(10%)
Straight Run
(10%)
Highest value gasoline
source (rank order, #1 best) 1 2 2 4 4 6
Margin uplift + + + + + + -
Flexibility to process low-
cost / difficult feedstocks + + - - - - - + - -
Octane value /
Blending flexibility + + + + + + + - - - -
Olefins for petrochemical
feedstocks + + - - - - - - - - - -将剩余和重质产品升级为
+++---
![Page 25](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal025.jpg)
投资者日2018
高绩效文化与gvm
25
[类别
名称][类别
名称][类别
名称][类别
名称][类别
名称][类别
名称][类别
名称][类别
名称]
Grace Talent Management Model Grace Leadership Behaviors
Great talent, focused on customers
Grace leaders are game
changers – at all levels of
the organization. We put
customers first, company
second, and ourselves third
Deliver Results
Clear thinking and decision
making required given
strong strategic position
and top quartile returns
Think Critically
Communicate
Team-oriented, transparent
approach with customers,
employees, investors,
and others
Engage
Committed, action-oriented
approach to all 我们是这样做的。不断改进
的心态
协作,奖励环境
让伟人茁壮成长成为真正的
![Page 26](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal026.jpg)
Investor Day 2018 |
INTRODUCING THE GRACE VALUE MODEL (GVM)
Our tightly aligned business model delivers value for customers, investors and employees
26
At the company level, we focus
on portfolio, strategic position,
and capital allocation
We invest to grow our
businesses, improve our
strategic position, and maintain
our high ROIC
At the business level, we focus
on customers, innovation,
growth, and profitability
Our customer-focused,
solutions-oriented approach to
innovation is a competitive
advantage
Value selling is the core of our
commercial approach
The Grace Manufacturing
System is the foundation of our
operating excellence strategy
Integrated Business
Management aligns our core
processes
Great talent and our
high-performance culture
are competitive advantages
We invest in great people 加强我们的高性能文化
![Page 27](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal027.jpg)
Investor Day 2018 |
GVM MATURITY
27
Strong foundation with significant runway of opportunity
Strong Strategic Position
Focused Portfolio
Disciplined Capital Allocation
Customer-driven Innovation
Commercial Excellence
Operating Excellence
Early Stage More Mature
![Page 28](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal028.jpg)
Investor Day 2018 |
GRACE ADJUSTED GROSS MARGIN PERFORMANCE
28
Gross margins key to investment returns: balancing profitability, growth reinvestment
Improved gross margin reflects many levers we manage:
Technology improvements in core catalysts and materials products
Improved value selling and pricing
Business and product mix; shift to higher value, more differentiated
technologies
Portfolio management (acquisitions and divestitures)
Investments in commercial and manufacturing excellence
Manufacturing and supply chain productivity; continuous improvement
Raw material and energy cost cycle
2016: Strong margins
Very strong business, product and customer mix
Deflationary environment added 2 points to margins
2017: Inflation accelerates
Business, product and customer mix not as strong
Manufacturing performance cost 1 point of margin
Inflation accelerates in second half
2018: Improvement resumes
Better business, product and customer mix
Improved value selling, pricing and productivity begin to mitigate inflation
0%
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20%
30%
40%
50%
2008 2013 2016 2017 2018E
Ad
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s
te
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ro
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s
M
ar
g
in
%
![Page 29](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal029.jpg)
Investor Day 2018 |
Add new best practices in
quality, process control,
maintenance and
performance to build on
mature Lean Six Sigma
capabilities
$10-$20M of high-return
investments in GMS
– Extends competitive
advantages
– Improves cost position
Investing in high-return
growth capital over three
years to add ~$250M in
sales by 2021
MANUFACTURING EXCELLENCE
29
Success measured in safety, quality, delivery, growth, cost position
Capital – Investing to accelerate growth and improve cost position
Industry Best Practices
Grace Manufacturing System (GMS) – The foundation for all 5 pillars
Customer-
focused
Quality Strategy
Top Quartile Mfg.
Performance
(OEE)
Cost
Position
Plant
Performance Quality People EHSS
Strong Talent
at All Levels
No One Hurt Improved Cost
Position
![Page 30](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal030.jpg)
Investor Day 2018 |
Solution
Upgraded Process Controls and
Standardized Operation
Improved
product quality
and consistency
Results Challenge
Finished product quality
and production efficiency
strongly linked to
intermediates quality
Manual controls,
outdated sensor
technology, and
inconsistent operation
limited process capability
Opportunity to invest in
process capability to
improve product quality
and efficiencies
Lowered
raw material and
energy costs
Increased
Throughput
$3 million investment, 2 year payback
CASE STUDY: MANUFACTURING EXCELLENCE
30
}
{
Before Investment
Output variable
Input variable before improvement
After Investment
Output variable
Input variable after improvement
Attractive, high-return investment opportunities
![Page 31](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal031.jpg)
Investor Day 2018 |
THOUGHTFUL DISCIPLINED M&A APPROACH
31
Active pipeline for strategic acquisitions will continue to create value
Target Profile
and Strategic Fit
Expands technology, R&D and/or commercial capabilities
Leading market positions to accelerate growth
Attractive sales and earnings profiles
Enhances and/or leverages manufacturing capabilities
Synergy
Highly synergistic
Returns focused on cost and capital savings
利用现有的全球基础设施
销售/商业协同-所有向上的
返回
>风险调整的障碍率
强ROIC
EPS增长
![Page 32](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal032.jpg)
Investor Day 2018 |
REAFFIRMING 2016-2021 FINANCIAL FRAMEWORK
32
Long-term outlook reinforces investment thesis
Total Sales
CAGR
Adj. EBITDA
CAGR
Adj. EPS
CAGR
Adj.
FCF
6%-8% 4%-6% 6%-8% >10%
>$1B
Over 5 Years
Framework reflects targeted investments to accelerate growth across our portfolio
Double-digit average Adj. EPS growth
Grow dividends faster than Adj. EPS growth
可用于收购和返还股东的强大自由现金流动---有机
销售---CAGR
![Page 33](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal033.jpg)
Investor Day 2018 |
KEY TAKEAWAYS
Strong strategic position; well-positioned for growth
Grace Value Model focused on creating value
Investing in operating excellence; long runway of opportunity
Attractive financial framework for growth, earnings, and cash
33
![Page 34](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal034.jpg)
特种催化剂
Al Beninati
主席,特种催化剂
![Page 35](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal035.jpg)
Investor Day 2018 |
Highly-experienced and disciplined
leadership team driving robust pipeline of
organic and inorganic opportunity
2
Deepening customer-centric approach
through best-in-class technical expertise and
superior manufacturing know-how
3
Linked with the winners who are
investing and growing faster than the market
5
Emerging market expansion
opportunities and strong licensing revenue
driving above-market growth
4
KEY MESSAGES
35
Investments of well over $1B have built
a global leader in specialty catalysts with
broad, highly-differentiated product portfolio
1
![Page 36](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal036.jpg)
Investor Day 2018 |
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
OVER $1B IN STRATEGIC PP AND PE ACQUISITIONS
36
PP Catalysts
Delivered on revenue and synergies of all deal models
4x increase in revenue and margin since 2006
Acquired Borealis
Ziegler-Natta tech for
PE and PP catalysts
Acquired
manufacturing
capacity for PP
catalysts and specialty
catalyst components
Acquired Single-site
and PP catalyst
production capacity
$500M
Acquired UNIPOL® PP
catalyst and licensing
business from Dow
$250M
Acquired LYNX® and
Polyolefins catalyst
business from BASF
$416M
Planned acquisition of
Albemarle Polyolefins
catalyst business
Ziegler-Natta
Single-site
PE
PP
PP Licensing
PE Catalysts
PP Licensing
2016 2018 2013 2011 2006 2002
Technology Leader Strong Position Developing Position Advancing Position
A
d
d
ress
a
b
le
M
a
rke
t
![Page 37](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal037.jpg)
Investor Day 2018 |
SPECIALTY CATALYSTS SNAPSHOT
37
Sales
1
$518M
Adj. Gross
Margin
1, 2
41%
Adj. EBITDA
Margin
1, 2
38%
Applications High pressure pipe
Geomembranes
Food packaging
Automotive parts
Medical devices
Textiles
Key
Customers
Global and national
petrochemical companies
Plastic resin producers
2017 Sales
1 FY 2017
2 Margins are as reported for total Catalysts Business Segment
45%
9% 5%
41%
By Product
PP
Catalysts
PE
Catalysts
Chemical
Catalysts
Process
Licensing
Polyolefin Catalysts Process Licensing Chemical Catalysts
End Products
26%
20% 42%
12%
By Region
China &
India
EMEA
Americas Rest of Asia
* Definitions of non-GAAP financial terms and reconciliations to the closest GAAP术语在附录
![Page 38](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal038.jpg)
Investor Day 2018 |
Polyethylene Catalysts Polypropylene Catalysts Process Licensing Chemical Catalysts
Overview
Used in the production of polyethylene (PE)
and polypropylene (PP) thermoplastic resins
to enhance wide range of industrial and
consumer end-use applications
Provides licensees with a
proven capability to
manufacture PP products
for a broad array of
end-use applications
Used in a variety of
petrochemical chain
conversions and fine
chemical production
Brands
MAGNAPORE®
SYLOPOL®
LYNX®
CONSISTA®
SHAC®
LYNX®
POLYTRAK®
HYAMPP®
UNIPOL® PP
Process Technology
UNIPPAC®
Process Control
RANEY®
DAVICAT®
Market-
Leading
Positions
PE Catalyst
PE Catalyst Supports
Custom Catalyst
Production
PP Catalyst
PP Advanced Donors
Custom Catalyst
Production
PP Process
Technology Licensing
Advanced Process
Control Technology
Chemical Catalysts
Hydrogenation Catalyst
Catalyst Supports
Custom Catalysts
BREADTH OF TECHNOLOGY
38
Technology Leader Developing Position
![Page 39](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal039.jpg)
Investor Day 2018 |
STRENGTHS AND SUSTAINABLE COMPETITIVE ADVANTAGES
39
Strong relationships with
customers in high-growth
end markets
One of the broadest, highly-
differentiated product portfolios
Licensing and catalysts
technologies
Deep manufacturing expertise
Comprehensive product
analysis
CORE STRENGTHS
SUSTAINABLE ADVANTAGES
Ability to develop and
optimize catalyst
properties for any
application
Flexible assets
to scale-up and
produce customers’
custom catalysts
Modeling and testing
capability to improve
吞吐量和
树脂属性
可信顾问用于
联合开发和自定义解决方案
![Page 40](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal040.jpg)
Investor Day 2018 |
CAPITALIZING ON FAVORABLE TRENDS
40
New product solutions enabling polyolefins to meet global trends and needs
1 Source IHS Markit
Secular
Theme Trends Grace Solutions
Emerging
Economies
Emerging middle class with
demand for consumer products
Expanding local capabilities
through global partners to meet
growing per capita demand
Enable production of materials
essential to the products of
everyday life
Portfolio of solutions PE/PP/CC
to enable regional leaders to
grow and succeed
Licensing for new projects
Global
Demand for
Plastics
Replacing traditional materials,
such as metal, wood and glass, to
improve strength, reduce weight,
and extend life of end use
applications
Prefer lighter, stronger, and cleaner
materials that are sustainable
Catalysts for advanced PE and
PP resins allowing down-gauging
and new applications
Catalysts for PE and PP resins
with increased stiffness,
durability, and temperature
tolerance
-10
0
10
20
30
40
50
60
70
80
90
-10 0 10 20 30 40 50 60
India
Indonesia
Brazil
China
S. Korea
EU
U.S.
Japan
GDP Per Capita, Million Metric Tons
Polyolefin Demand & GDP
Polyolefin Per Capita (KG)
1
Low High
L
o
w
Hig
h
C
O
M
P
L
E
X
IT
Y
MARGIN
![Page 41](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal041.jpg)
Investor Day 2018 |
TOTAL ADDRESSABLE MARKET
41
Investing to achieve highest growth potential in attractive end markets
Catalyst
Market
Size
5-year
Industry
CAGR
(2016-2021)
PP1 $0.8B 5-6%
PE1 $0.7B 4-5%
PE and PP
Licensing1
$0.3B 5-6%
Chemical
Catalysts2
$2.2B 3-5%
Other Polymer
and Chemical
Catalysts3
$7B 2-4%
Syngas $0.7B
Oxidation $0.6B
Hydrogenation $0.6B
Dehydrogenation $0.3B
PP Catalysts $0.8B
PE Catalysts $0.7B
Process Licensing $0.3B
$1.8B
Polyolefin
Catalysts
$2.2B
Chemical
Catalysts
$4B
Market
1 Market Size and CAGRs are based upon IHS and Grace internal estimates
2 The Catalyst Group
3 Grace does not directly address these markets today
![Page 42](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal042.jpg)
Investor Day 2018 |
Win with the
PE winners
3
Penetrate chemical
catalyst adjacencies
4
Extend PP catalyst
technology coverage
2
SPECIALTY CATALYST STRATEGIC INITIATIVES
Drive PP licensing and
catalyst synergy
1
42
![Page 43](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal043.jpg)
Investor Day 2018 |
EACH LICENSEE IS A LONG-TERM CATALYST CUSTOMER
43
1 IHS and Grace internal estimates
Consistent 5-6% industry growth drives 6-8 new plant
builds per year
Average new plant start-up adds an average of $5-7M
of additional catalysts sales per year
Innovation and technical service secures long-term
catalyst supply post start-up
High win rates are achieved through UNIPOL®
competitive advantages
Product slate ranges from simple homo-polymers to
complex impact co-polymers
Design improvements are continuously updated based
upon customer drivers
7
8
6
6
7
8
-12.0
-7.0
-2.0
3.0
8.0
$0
$50
$100
$150
$200
$250
$300
2016 2017 2018 2019 2020 2021
Ca
ta
lys
t W
ea
lth
($
M
US
D)
PP 催化剂财富和工厂需求增加催化剂财富($)累积催化剂财富($)450 kton
PP催化剂财富和工厂要求
1最简单。可靠。Easy to Operate.
System Simplicity
Low Investment
(plant ISBL capital)*
Cost of Production*
Easy, Flexible &
Robust Operation
Overall Product
Capacity
Inherently Safe &
Enviro mentally
Sound
* From : NexantThinking™ ―POPS PolyOlefins Global Technology Analysis Report,‖ Tables 50-59, published Oct. 2016,
with the permission of Nexant Inc.
Peer A
Peer B
Peer C
GRACE
![Page 44](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal044.jpg)
Investor Day 2018 |
UNIQUELY POSITIONED IN PP CATALYSTS
Winning with UNIPOL® PP catalyst solutions
Multi-generational product map for higher performance
resin targets
R&D and PP resin expertise for value-added random and
impact copolymers
Experienced technical service to advise and support catalyst
use by licensees
Combined solution of catalyst and donor to capture benefits of
UNIPOL® PP and UNIPPAC® platform
Growing position with new high-
performance catalysts
UNIPOL® PP technology with superior
process and catalyst technology
Grace is attractive partner for custom
catalysts for other licensors
Partner with leading PP producers with
their own proprietary catalysts
Future
P
rod
u
ct
F
e
atures
/
V
alue
$
CONSISTA®
SHAC® HT
Future
SHAC®
Today
Drop-in high throughput catalyst
Translated from broad portfolio
High performance internal donor
Translating to other catalyst recipes
Ultra high purity resins
UNIPOL® PP Catalyst Multi-Generation Product Plan
Winning across all PP process platforms
Commercial platforms for organic growth and technology synergies
from legacy Grace, plus Dow and BASF acquisitions
Demonstrated success scaling up technologies to work in each PP
process platform
Custom catalyst production for industry-leading PP producers with
global Grace manufacturing
Experienced R&D, PP resin pilot plant, and technical service for
catalyst development and resin applications
44
Well-positioned with broad catalyst technology platform
3rd Party
Licensor Captive
Licensor Partner
PP Producer- Custom
![Page 45](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal045.jpg)
Investor Day 2018 |
Solution
R&D teams collaborated to
develop resin grades in
Grace pilot plant with
industry-leading
CONSISTA® catalyst
Technical Service team
demonstrated technology
in client’s commercial
unit using UNIPPAC®
control system
Positioned
customer to enter
fast-growing
automotive market
in Asia Pacific by
expanding their
product portfolio
Results Challenge
Asia Pacific licensee
sought to upgrade value
of their PP resin portfolio
to improve profitability
Customer strategy was
to expand from pipe
grades to higher-value
grades for automotive
applications
Customer
increased the
revenue from their
plant by over $10M
upon converting
50% of their resins
to automotive
grades
CASE STUDY: UNIPOL® PP SOLUTIONS DELIVERING VALUE
45
Delivering value with technology/catalyst expertise and strong service
![Page 46](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal046.jpg)
Investor Day 2018 |
Solution
R&D team developed
LYNX® catalyst and donor
solution to replace
discontinued catalyst with
no operational issues
With close technical
support, customer
successfully demonstrated
the technology on their
commercial reactor
Customer was
able to continue
production of
high-value resin
Results Challenge
Asia Pacific customer
looking to replace PP
catalyst due to
alternative supplier
discontinuation
Required new catalyst to
make same high-value
PP copolymer but avoid
reactor operation issues
observed in prior trials
Improved
operability led
to $2M annual
cost savings
Enabled potential
for $2M in
additional
value-added
resin sales
CASE STUDY: PP CATALYST TECHNOLOGY DELIVERING VALUE
46
Broad portfolio of solutions that can be applied to all PP process technologies
![Page 47](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal047.jpg)
Investor Day 2018 |
ACCELERATE POLYETHYLENE GROWTH
Well-positioned to serve all PE process technologies
– Portfolio of PE catalysts: chromium, Ziegler-Natta, and
single-site options
Sales growth through strong corporate account
relationships with the PE winners
– Grow at or above industry growth rates of 4-5%
– Serving the Gulf Coast expansion with several
innovative custom catalysts
Accelerating additional growth through single-site catalysts
– SSC PE resins offer high value, differentiated
performance for our customers’ customers
– Segment growth of 2-3x traditional PE market
– Pending acquisition of polyolefins catalysts business will
move Grace from a participant to an industry leader
47
PE catalyst technologies aligned with market drivers and leaders
-
2
4
6
8
Linear Low Density PE High Density PE
T
on
s
-
M
illion
s
Global SSC PE Consumption1
2013 2015 2018 2021
11%
CAGR
14%
CAGR
1 Source: IHS Markit
Global PE Capacity Growth Rate
![Page 48](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal048.jpg)
Investor Day 2018 |
ANNOUNCED SSC ACQUISITION AND INTEGRATION UPDATE
48
Quadruples Grace’s current position in single-site catalysts
Accelerates Grace’s single-site catalyst strategy in polyethylene
Fastest growing PE segment—high single-digit 5-year CAGR driven by
sophisticated resin applications
Advances Grace’s position in finished catalysts
Strong portfolio of polyolefin catalysts and components
Finished catalysts, including custom catalysts, proprietary single-site
catalysts, and Ziegler-Natta catalysts (ZN)
Activators (MAO and organoborons)
Metallocenes
Sound financials
~3x reduction to acquisition multiple from cost and capital synergies
Accretive to EPS (minimally in 2018, fully in 2019)
Disciplined integration
Integration on track for seamless transition at close
Targeted to close at Q1的终点
Yeosu,
韩国
Baton Rouge,
路易斯安那州
USA
两个制造地点
![Page 49](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal049.jpg)
Investor Day 2018 |
Solution
• Grace’s technical team
collaborated with the
customer’s operations
team to conduct a root
cause analysis
• Grace produced a
custom, proprietary,
single-site catalyst that
addressed performance
issues
• A cross-functional Grace
team also improved
catalyst production and
the customer’s catalyst
handling processes
Customer
generated $4M+ in
annual operational
savings due to
improved catalyst
performance
Results Challenge
The catalyst being used
by one of the PE winners
was creating operational
issues and reactor
shutdowns Deepened Grace’s
relationship with
the customer
CASE STUDY: CUSTOM PE CATALYSTS DELIVERING VALUE
49
Enabling customers with high-quality commercial supply of complex catalysts
![Page 50](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal050.jpg)
Investor Day 2018 |
0
0.5
1
1.5
2
2.5CHEMICAL CATALYST GROWTH STRATEGY
50
Background
Specialized and niche solutions
Portfolio currently RANEY® and
DAVICAT® products
Highly-fragmented catalyst
market with global and
local competitors
Growth Strategy
Expand capabilities organically in existing and adjacent markets
Targeted M&A to open additional adjacencies and add capabilities
Expand relationships with targeted customers
Additional opportunities
– Custom catalyst solutions and licensing
– Broader collaboration with market leaders
PE Catalyst
PP Catalyst
~$2.2B Market
ChemCat
Syngas $0.7B
Oxidation $0.6B
Hydrogenation $0.6B
Dehydrogenation $0.3B Developing Position Advancing Position
2018 2002
PP Licensing
2013
![Page 51](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal051.jpg)
Investor Day 2018 |
KEY TAKEAWAYS
51
Strengthened business; now optimizing comprehensive product portfolio to
exceed industry growth rates
Deepening penetration with blue-chip customers and in emerging
geographies
Licensing business in growth cycle with significant pull-through catalyst
demand
Leveraging polyolefin catalyst/licensing expertise and business model to
grow chemical catalysts
Successful track record of consistently realizing acquisition-related
commercial and cost synergies
![Page 52](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal052.jpg)
问答
![Page 53](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal053.jpg)
中断
![Page 54](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal054.jpg)
材料技术
Sandra Wisniewski
总统,材料技术
![Page 55](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal055.jpg)
Investor Day 2018 |
Serving diverse customers in high-value
niche markets; enhancing customers’ product
differentiation and sustainability
2
Pivoting to accelerated growth through
continued product innovation and M&A
4
70% of the portfolio is comprised of
functional or unique additives;
30% supports critical processing efficiencies
3键消息
55
在广义产品
组合中识别的品牌,任何单一的
制造商
1
![Page 56](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal056.jpg)
Investor Day 2018 |
Consumer/
Pharma
MATERIALS TECHNOLOGIES SNAPSHOT
56
38%
34%
23%
5%
By Region
37%
34%
29%
By End Market
W. Europe
N. America
Developed Asia
Chemical
Process
Sales
1 $440M
Adj. Gross
Margin
1
38%
Adj. EBITDA
Margin
1
27%
Key Customers
Pharmaceutical companies
Consumer products manufacturers
Industrial chemical manufacturers
Petrochemical and natural gas producers
Plastic resin and film manufacturers
Tire and rubber manufacturers
Paint and coatings companies
Applications
Pharmaceutical intermediates
Excipients and chromatography
Consumer products additives and
processing aids
Environmental catalysts
Gas and petrochemical processing
Plastics and rubber additives
Coatings additives
Paint additives
Digital media
1 FY 2017
Note: color coding within ―key customers‖ and ―applications‖ correlates to ―By End Market‖ pie graph colors
* Definitions of non-GAAP financial terms and reconciliations to the closest GAAP term are provided in the Appendix
Coatings Chemical Process Consumer/Pharma
Applications
2017 Sales
Emerging Regions
Coatings
![Page 57](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal057.jpg)
Investor Day 2018 |
BREADTH OF TECHNOLOGY
57
Consumer/Pharma Chemical Process Coatings
Overview
Specialized materials used
as additives and intermediates for
pharmaceuticals, nutraceuticals,
beer, toothpaste, food, and
cosmetic segments
Functional materials for use
in plastics, rubber, tire, metal
casting, and adsorbent products
for petrochemical and natural
gas applications
Functional additives for wood
and architectural coatings
that provide surface effects
and corrosion protection for
metal substrates
Primary
Brands
SYLODENT® • SYLOID®FP
SIDENT® • SYLOID® XDP
PERKASIL® • SILSOL™
TRISYL® • VYDAC®
DARACLAR® • DAVISIL®
LUDOX® • SYLOSIV®
SYLOBEAD® • SYLOBLOC®
PHONOSORB® • PERKASIL®
SYLOID® • SYLOWHITE™
SHIELDEX® • LUDOX®
SYLOSIV® • SYLOJET®
Application
Grace brands are well established and highly trusted
![Page 58](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal058.jpg)
Investor Day 2018 |
HIGH VALUE, NICHE USES
58
Grace materials are in products all around us
Over 3,000 customers
Linked by silica material science expertise
Kitchen
Coatings, Paint
Matting Agents
Appliances
Anticorrosives
Windows
Desiccants
Plastics
Antiblock, Adsorbents
Foods
Anticaking
Vegetable Oil
Purification
Beer
Stabilizers
Natural Gas
Adsorbents
Toothpaste
Whitening Agents
Cosmetics
Thickeners, Exfoliants
Pharmaceuticals
Washroom
Nutraceuticals
Excipients, Drug Delivery, Fine Chemicals
Garage
Tires / Rubber
Reinforcing 制剂
排放控制
粘结剂
燃料
生物燃料
吸附剂,净化
![Page 59](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal059.jpg)
Investor Day 2018 |
GRACE IN PHARMA
Chromatography Resins
VYDAC® for protein and peptide purification
DAVISIL® for small and large molecules
Experienced technical support
Formulation Excipients and Drug Delivery
SYLOID® FP Silica – trusted in formulations for 50+ years
Industry-leading quality standards (IPEA-GMP)
Innovative carrier and drug delivery technologies
A Range of Solutions for Pharma Customers
Grace is committed to consistently delivering high-quality products to our customers and is well-equipped
to meet the stringent regulatory demands in the pharmaceutical industry.
59
Pharmaceutical Intermediates and API
Custom manufacturing
Kilos to tons cGMP production
Strong collaborative working relationships
Support key points in the pharma value chain
![Page 60](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal060.jpg)
Investor Day 2018 |
STRENGTHS AND SUSTAINABLE COMPETITIVE ADVANTAGES
60
CORE STRENGTHS
Strong brand recognition
Comprehensive product offering
Established market position
Deep applications knowledge
SUSTAINABLE ADVANTAGES
Proven innovation in
material sciences
Balanced portfolio
spanning a broad
range of specialty
applications
Global footprint to
support regional
customer
requirements
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Aging population drives rising
healthcare spend
Growing middle class increases
household income and drives
quality of life products
Expanded middle class
drives increased need for
durable goods
MARKET GROWTH DRIVERS
61
Demographics
Grace
Offering
Clean air regulations drive
implementation of emission
control technologies
Tightening VOC regulations
require new coatings solutions
Corporate paradigm shifts to
reduce environmental footprint
and improve sustainability
Stricter Environmental
and Regulatory
Policies
Changing Customer
Requirements
Improved visual appeal in
food packaging
More effective cleaning with
reduced abrasive qualities for
sensitive teeth
High fuel efficiency in
automobiles
New product solutions enabling our customers to capitalize on global trends and needs
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Investor Day 2018 |
TOTAL ADDRESSABLE MARKET
62
Growing and attractive addressable markets
Market
Size
5-year Industry
CAGR
(2016-2021)
Consumer/Pharma1 $5B 5-8%
Chemical Process2 $4B 3-4%
Coatings3 $1B 2-4%
$10B
Market
1 Freedonia, BCC Research and Grace estimates
2 IHS Chemical, Freedonia and Grace estimates
3 Freedonia and Grace estimates
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Investor Day 2018 |
Implementing operating
excellence initiatives
3
Focusing on
strategic M&A
4
Advancing commercial
excellence
2
MATERIALS TECHNOLOGIES STRATEGIC INITIATIVES
Increasing investment
in innovation
1
63
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投资者日2018
成功的关键
1。敏捷创新关键伙伴关系
3。重振和再投资于有机管道
4。利用材料
科学根源
5。Focus on M&A to
accelerate portfolio
development
2000 Today
Acquired
LUDOX®
colloidal silica
from DuPont
2000
Acquired
precipitated
silica
business
from Akzo
2001
Introduced
SYLOID®
RAD matting
agent
2001
Acquired
Synthetech for
catalysts and
fine chemicals
2010
Acquired
VYDAC® assets
Chromatographic
silica technology
2001
Introduced
new specialty
precipitated
silica products
2007-2010
Established
JDA with
Formac for
drug delivery
2011
Launched novel
beer stabilizer
DARACLAR®
9000HP
2015
Acquired
licensing rights
on Formac
drug delivery
patents
2017
Launched
SILSOL®
drug delivery
technology
concept
2010
Introduced new
SHIELDEX®
anti-corrosive
products
2011
Signed global
license agreement
with Bunge
for TRISYL®
2016
Acquired
specialty silica
technologies
from Evonik
2017
INCREASING INVESTMENT IN INNOVATION
64
Grace invented silica gel in 1921 and our innovation continues today…{Br}…投资促进未来增长
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CASE STUDY: INNOVATION UNLOCKS VALUE
65
Customer
Requirement
Solution:
DARACLAR®
9000HP Silica
Delivered
Value
Reduced Waste Improved Efficiency Reduced Hazards Enhanced Value
Reduced need for filtration aid
Reduced solid waste
Reduced water required to
manufacture beer
Debottlenecked
filtration step
Added capacity without
capital investment
Reduced need for
hazardous filtration
aid that poses health
risks in manufacturing
and the final product
Increased cost for
DARACLAR® 9000HP
Reduced working capital
Decreased total cost to
manufacture beer
Environment Productivity
Health and
Safety
Financial
Challenge: Major beer manufacturer was facing pressure to increase productivity and reduce their
environmental footprint without impacting product quality.
Grace developed innovative 啤酒稳定剂DARACLAR 9000HP以解决未满足的需求。
影响:31%的客户储蓄
DARACLAR 9000HP提供生产力和可持续性价值给客户
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ADVANCING COMMERCIAL EXCELLENCE
66
Commercial
Excellence
Marketing
Channels
Customer
Sales
Optimize Channels
to Market
Direct and channel partners
Increased reach
and coverage
Improved specialty
segment access
Implement Strategic
Marketing Process
Disciplined approach to
market development
Refined customer
segmentation
Focus on Customer
Relationship Management
Leveraging SalesForce.com
Increased key account focus
Enforced pipeline rigor
Invest in
Sales Effectiveness
Building skills and capabilities
Refining design to align with
strategy
Deliver growth acceleration and value capture
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CASE STUDY: STRATEGIC CUSTOMER PARTNERSHIP
67
Requirement
Evolving Product High Cleaning Silica Thickening Silica Engineered Silica Exfoliating Silica
Solution:
Met regional consumer
demand for ―good cleaning
with low abrasion‖
Designed to meet
consumer requirement for
whitening without
increasing sensitivity
Solved manufacturing/
supply issue with
previous supplier,
enabling Grace to hold
majority market share
with company in EU
Specifically developed a
uniquely modified silicate
that reduced
tooth sensitivity
Silicas are
an environmentally
friendly alternative to
polyethylene microbeads
Challenge: Develop novel solutions to meet evolving product requirements for the consumer product market.
Exceeding customer needs led to deeper customer relationships and success.
Consumer
Needs
Continuity
and
Performance
Collaborative
R&D
Sustainable
2007 从材料供应商到战略合作伙伴的十年来销售额增长了2017 5倍
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IMPLEMENTING MANUFACTURING EXCELLENCE INITIATIVES
68
Focus Areas Quality and Performance Capital Investments
Goal Best customer experience
Targeted investment to capture
strong market demand
Action
Items
Customer-centric view of quality
Implement Grace Manufacturing
System as a path to sustainable
manufacturing excellence
Disciplined project execution
Invest in productivity for
capacity increases and cost
improvement
Performance
Metrics
Plants with GMS implemented
Improved cost position
Customer satisfaction
IRR > 20%
Deliver projects on time and
on budget
Sustained growth with improved cost position
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FOCUSING ON STRATEGIC M&A
69
Strategy
Growth
Capacity
Platform-based view
– Global silica capacity
– Regional-specific capacity expansion
Adjacencies
Business acceleration in known market
segments or near adjacent technologies
Technology / end market-based view
Target multiple acquisitions to broaden
portfolio
Market
Expansion Support growth acceleration in target markets
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KEY TAKEAWAYS
Creating unique additives that enable customers to improve productivity
and differentiate their offerings
Leveraging material science prowess and technical services to deliver
growth acceleration
Unlocking further value through relentless focus on commercial and
operating excellence
Expanding the size of addressable market through robust set of organic and
inorganic growth investments
70
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精炼技术
Tom Petti
总裁,精炼技术
![Page 72](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal072.jpg)
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Investing in high-growth markets:
petrochemical feeds, cleaner fuels, and
converting low-value, heavy oil to
high-value products
2
Driving operating excellence to improve
efficiency through business planning
processes, manufacturing cost and flexibility;
still early innings
4
Maintain market leadership position with
commercial excellence, including new
product development, value selling, and
technical service
3
KEY MESSAGES
72
Broad, highly-differentiated product
portfolio built on research and technical
service leadership directed at the most
challenging customer problems
1
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REFINING TECHNOLOGIES SNAPSHOT
73
36%
31%
19%
14%
By Region
61%
39%
By Product2
2017 Sales
1 FY 2017
2 Sales include deconsolidated ART joint venture
3 Margins are as reported for total Catalysts Business Segment
FCC Catalysts Hydroprocessing Catalysts FCC Additives
Products
Hydroprocessing
Catalysts (HPC)
FCC
North
America
Emerging Regions
Western
Europe
Developed Asia
Sales1, 2 $1.2B
Adj. Gross
Margin1, 3
41%
Adj. EBITDA
Margin1, 3
38%
Applications Production of:
Transportation fuels
(gasoline, diesel, jet fuel)
Petrochemical feeds
(to make plastics)
Cleaner burning fuels
Upgrading of low-value oil (resid)
Key
Customers
Global refining industry
*Definitions of non-GAAP financial terms and reconciliations to the closest GAAP term are provided in the Appendix
![Page 74](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal074.jpg)
Investor Day 2018 |
ART and CLG
ADVANCED REFINING TECHNOLOGIES (ART) JOINT VENTURE
74
Grace holds 50% interest in joint venture formed in 2001
Leverages technology expertise, world-class R&D, global manufacturing
footprint, and a complete portfolio of HPC to meet the clean fuels
challenges of today’s refiners
ART established exclusive partnership
with CLG to sell catalysts to CLG’s
licensees
– 2013: hydrocracking and lubes
catalysts agreement
– 2017: fixed bed resid and ebullating
bed resid catalysts agreement
Enables Grace to streamline HPC supply
and improve technical service for refining
customers by establishing ART as single
point of contact for HPC needs
CLG licensing growth outpaces the
market, driven by combination of superior
process and ART catalyst technology
每个新的许可证通过循环
art催化剂销售
art
![Page 75](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal075.jpg)
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BREADTH OF TECHNOLOGY
75
FCC Catalysts FCC Additives Hydroprocessing Catalysts (HPC)
Overview
Crack the hydrocarbon chains
in distilled crude oil to produce
transportation fuels, such as
gasoline and diesel fuels, and
feeds for production of
petrochemicals
Used to reduce sulfur in gasoline,
maximize propylene production, and
reduce emissions of sulfur oxides,
nitrogen oxides, and carbon
monoxide from refinery FCC units
Marketed through ART JV with
Chevron, used in process reactors
to upgrade heavy oils into lighter,
more useful products, enabling less
expensive feedstock usage in the
petroleum refining process and to
produce products that meet more
stringent environmental regulations
Brands
MIDAS® • IMPACT®
NEKTOR™ • GENESIS®
ACHIEVE®
D-PRISM® • GSR® • SURCA®
OLEFINSMAX® • OLEFINSULTRA®
DESOX® • DENOX® • XNOX® • CP®P
ICR® • GR® • SMART • APART
Market-
leading
Positions
FCC
MTO
FCC
Hydrocracking
Ebullating Bed Resid
Fixed Bed Resid
Distillate
Technology Leader Developing Position
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Investor Day 2018 |
G
lo
b
al
F
o
o
tprin
t
Breadth of Portfolio
FCC & HPC
FCC Only
HPC Only
Note: size of bubble indicates approximate sales
THE LEADER IN THE INDUSTRY
76
Grace solves a broad range of global customer needs
Broad range of FCC catalysts
FCC olefin additives
FCC environmental additives
FCC gasoline sulfur reduction
Methanol-to-Olefins (MTO) catalysts
Hydrocracking HPC
Fixed bed resid HPC
Ebullating bed resid HPC
Distillate HPC
**Developing
Grace Portfolio
Competitive Landscape*
Grace Footprint
*Industry reports and management estimates
Manufacturing Commercial
U.S. North America
Canada Western Europe
Germany Middle East
China F.S.U.
Japan India
Kuwait S.E. Asia
UAE** China
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STRENGTHS AND SUSTAINABLE COMPETITIVE ADVANTAGES
77
Industry-leading
applications expertise
Research leadership
and innovation
Flexible, global
manufacturing network
Leading market positions with
close customer relationships
SUSTAINABLE ADVANTAGES
Customized solutions
through intense
technical customer
interactions
Broad portfolio of FCC
and HPC technologies
to address wide range
of customer needs
Infrastructure plus
commercial and
technical resources
close to customers
Deep relationship with
HPC process licensor
provides catalyst
sales pull-through
CORE STRENGTHS
![Page 78](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal078.jpg)
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VALUE CREATION IN THE FCC UNIT
78
Customized catalyst
design and high-
level technical
support are unique
capabilities to fine-
tune product yields
and create value
Often, margins can
be increased by
$0.50-$1.50/BBL
FCC Unit
1 BBL
Oil Feed
$60/BBL
Petrochemical Feed
(Propylene, Butylene)
Gasoline + Diesel
+ Jet Fuel
Low Value Oil
Total Product Value = $70/BBL
$75/BBL
$40/BBL
$85/BBL
1 Assumes 100,000 BBL/day processed
FCC image courtesy of TechnipFMC and used with permission
Refiner’s Uplift Margin: $10 per barrel
$365M annually1
FCC catalyst design can improve profitability by more than $10M/Yr.
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投资者日2018
通过加氢处理创造价值
79加氢处理单位
高值油:
低硫(
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TOTAL ADDRESSABLE MARKET
80
Very well-positioned for long-term shift in demand
Market
Size
5-year Industry
CAGR
(2016-2021)
FCC Catalysts $2.5B 2-3%
Fuels-driven 1-2%
Petrochemicals-driven 3-5%
Hydroprocessing Catalysts $2.5B 5-6%
Light Feed 3-5%
Heavy Feed 8-10%
$5B
Market
Sources: Wood Mackenzie, Products Markets Tool, Jan 2018; The Catalyst Group Resources, Intelligence Report, May 2016, Grace internal estimates
![Page 81](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal081.jpg)
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INVESTING TO CAPTURE GROWTH
81
3-5%
1-2%
5-6%
Market
Growth
Hydroprocessing
FCC
Petrochemical
Feeds
Gasoline +
Diesel
Low Sulfur
Products
Demand driven by plastics and other
petrochemical growth
New catalyst development targeting
propylene yields
Demand outpaces growth of transportation fuels
Fuels demand driven by developing economies
Flat-to-declining in OECD
Demand predicted to peak between 2030-2050*
Tightening gasoline and diesel regulations in
developing world driving growth
More stringent marine fuel sulfur requirements
effective 2020
Resid feedstock processing growing fastest due
to disappearing uses for high-sulfur heavy oil
Strategy
Invest in clean fuels
growth through ART JV
Maintain market
leadership, focus on
operating excellence
Invest in products 为了最大限度地提高
石化原料的产量,
转移投资以获取更高的增长段
*根据行业报告的元分析
![Page 82](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal082.jpg)
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Focus on operating
excellence to improve cost
position and flexibility
4
Invest in clean fuels
growth through ART JV
2
REFINING TECHNOLOGIES STRATEGIC INITIATIVES
Invest in products to
maximize yield of
petrochemical feeds
1
82
Maintain market
leadership position
2 3
![Page 83](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal083.jpg)
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MAXIMIZE YIELD OF PETROCHEMICAL FEEDS
83
Expanding portfolio to capture higher market growth
Continue to develop FCC catalyst technologies to further
maximize yield of petrochemical feeds: propylene and butylene
– Introduced OlefinsUltra® MZ as an additive solution; highest
propylene yield per pound
– Developed catalyst systems for new FCC units designed
specifically for maximum propylene
– Developed GBA™ butylene selective catalysts and additives
Continue to build out technical service capabilities to offer high
levels of expertise, particularly in emerging regions, to optimize
unit performance
Invest to further penetrate Methanol-to-Olefins (MTO) segment in
China for ethylene and propylene production
– Adding R&D, sales, and technical service resources
– Using MTO pilot plant capabilities to continue new product
development and maintain technology edge
MTO is a new FCC-like process to
convert coal-derived methanol to
petrochemical feeds (olefins)
What is MTO?
The market has grown from 0 to 18
units in China since 2010, creating a
$120M/Yr.MTO催化剂市场机会
![Page 84](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal084.jpg)
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Solution
Employed extensive R&D
resources to screen potential
catalyst solutions and model
predicted performance in the
Hellenic FCC unit
Zeroed in on latest resid upgrading
FCC technology — MIDAS® — and
highest activity additive for
propylene production —
OlefinsUltra® MZ
Worked closely with Hellenic
operating team to set clear targets
and ensure smooth transition to
new catalyst and additive system
Catalyst system
decreased low-value
product yields
and substantially
increased propylene
production
Results Challenge
Hellenic Petroleum
modernized their refinery
to process increased
propylene downstream
of FCC unit
Hellenic sought to
improve profitability by
producing more
propylene and less low-
value products in the
FCC unit
Demonstrated value
of $0.60/BBL plus
credit for higher
octane gasoline
(~$22M/Yr.*)
CASE STUDY1: MAXIMIZING YIELD OF PETROCHEMICAL FEEDS
84
Designing solutions to maximize customer profitability
1 S. Kyriakou, et al.石油技术季刊,Q3 2017
*100,000 bbl/日单位
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Solution
Invented and commercialized a
high-performing MTO catalyst
through focused R&D, leveraging
FCC knowledge
Adapted Grace China-based
manufacturing assets to produce
the catalyst at a competitive
cost position
Conducted a smooth catalyst trial
to demonstrate catalyst benefit
while also providing premium
technical service
Delivered increased
ethylene yield,
reduced low-value
byproducts, and
decreased catalyst
consumption and
fouling
Results Challenge
Customer’s MTO unit
was using a competitor’s
catalyst
Customer sought higher
operating rates,
increased ethylene
yields, lower byproducts,
and less downstream
fouling
Increased MTO unit
profits by $16M/Yr.
vs. competitive
catalyst
CASE STUDY: ALTERNATE ROUTE TO PETROCHEMICAL FEEDS
85
Leveraging FCC know-how to penetrate new petrochemical feed segment
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INVEST IN CLEAN FUELS GROWTH THROUGH ART JV
86
Leveraging Chevron refining and R&D expertise to accelerate product
development to maintain leading catalyst technology and technical
support
Constructing a world-scale HPC plant in Lake Charles, LA, to meet
customer and licensor demand
Extending Grace Value Model initiatives to ART
– Improving cost position and product quality via Grace Manufacturing System
– Deploying commercial excellence: strategic account planning and value
selling
Optimizing customer portfolio to continue to improve profitability
Redesigning technical service and increasing headcount in close
proximity to customers
ART is well-positioned to capture clean fuels market opportunity
![Page 87](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal087.jpg)
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Challenge
Customer was using an
ART catalyst to produce
low-sulfur products
Customer sought to
process heavier, higher-
sulfur, and cheaper
feedstocks to improve
refinery profitability
CASE STUDY: IMPROVING CLEAN FUEL ECONOMICS
87
Aligned products and services with customer goals
Solution
Employed R&D pilot plant
capabilities to develop a
new hydroprocessing
catalyst to meet customer
objectives
Supported catalyst trial with
high level of technical
service
New catalyst
increased
conversion and
higher activity
enabled reduced
usage rates
Results
Improved run
lengths by
limiting
downstream
fouling
Improved
customer
economics by
$27M+/Yr.
189
216
[价值]
9 21
改进的
产生
较低的
成本
粗
增量
催化剂
花费
值($M/yr.)
![Page 88](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal088.jpg)
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MAINTAIN MARKET LEADERSHIP POSITION
88
Technical service and R&D experts collaborate with refiners
to develop customized solutions to address their biggest
challenges
– Using customer segmentation to direct R&D activities
– Offered new line of catalysts to address increasing proportion
of shale oil in North American crude
– Developed ACHIEVE® 400 Gold to maximize profitability
through higher octane yield
Focused on commercial excellence activities: strategic
account planning and value selling
– Invested in training for entire commercial organization and
redesigned management systems
– Improved FCC customer retention by 8%
Investing in a global team of FCC subject matter experts to
provide intensive operational customer support
Commercial excellence initiatives improve growth and profitability
![Page 89](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal089.jpg)
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FCC CATALYSTS PRICE TREND
89
Long history of FCC pricing and product reformulations to expand margins
FCC margins increased through a combination of:
– Improved pricing in line with technology advancements
– Product reformulations (changes to the product to deliver
more customer value and capture more margin)
History of improving margin in changing environments
– 2005-2008: Inflationary period before financial crisis
– 2011: Chinese rare earth quotas resulted in hyper-
inflation, which was passed through to customers
Customers continue to demand products that deliver
high value
– Heavy, low-value oil (resid) upgrading
– Better ability to withstand contaminant metals in feeds
– Higher and higher propylene yields
– Environmental compliance
Backdrop of inflation in 2017-2018
– Support value selling and price negotiations with
customers
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Pri
c
e
I
nde
x
(2005
Ba
s
e
)
Inflationary Period
Rare Earth
Hyper-Inflation;
Surcharges
Deflationary
Period
Inflationary
Period
![Page 90](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal090.jpg)
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MANUFACTURING EXCELLENCE
90
Improving cost position and flexibility
Investing in advanced process controls to modernize
and drive productivity
Optimizing our global manufacturing footprint
– Targeted investments to lower costs and increase proximity to
high-growth regions
– Increasing manufacturing flexibility to produce latest generation
catalysts
– Network production capacity to follow market growth
Redesigning our supply/demand planning using
Integrated Business Management processes and
practices
Driving improved plant performance via implementation
of Grace Manufacturing System
2016 – 2021
Capacity
Consistent with
market growth
Flexibility
Proximity to
Customers
Product Cost
Manufacturing Strategy
![Page 91](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal091.jpg)
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KEY TAKEAWAYS
91
Investing in technology to capture higher-growth segments: petrochemical
feeds, clean fuels, and low-value oil processing
Delivering strong growth in clean fuels from ART Joint Venture
Strengthening business processes and lowering manufacturing costs to
maintain market leadership position
Optimizing product value through innovation and application expertise
![Page 92](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal092.jpg)
财务概览:高级副总裁兼首席财务官汤姆·布拉泽
![Page 93](https://www.sec.gov/Archives/edgar/data/1045309/000104530918000033/grainvestordaydeckfinal093.jpg)
Investor Day 2018 |
KEY MESSAGES
93
Maintain solid, flexible balance
sheet through strong, consistent cash
flow generation
2
Maximize long-term shareholder value
4
Deploy cash through disciplined capital
allocation strategy, funding high-return capex
and M&A, and returns to shareholders
3
Strong path to organic growth and
profit improvement
1
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投资者日2018
三年财务业绩
94$1.6$1.6$1.7$0.4$0.4
$0.5
2015 2016 2017
[Val
UE]
31% 31%
2015 2016 2017
Revenue ($B) Adj. EBITDA Margin
ART Joint Venture
Grace
* Definitions of non-GAAP financial terms and reconciliations to the closest GAAP term are provided in the Appendix
3% 2-Yr CAGR
9% 2016-2017
+ 100bps 2015-2017
Reported amounts for 2015 for Adj. EBTDA Margin and Adj. EPS adjusted to exclude the effect of discontinued operations accounting which included $38M of costs that have either been 转到GCP或取消$2.0$2.0
$2.2
[Val
UE]
$3.10$3.40
$2015 2016 2017
adj.EPS
+16%的2年CAGR
10%2016-2017
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Investor Day 2018 |
PEER PROFITABILITY COMPARISON
95
Top quartile specialty chemical and materials business
Source: Capital IQ data for peers as of 2/20/18; Grace margins based on FY2017A
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
C G D H A B E K I W.R.
Grace
J F
TTM Gross Margin
0%
5%
10%
15%
20%
25%
30%
A B C D E F G H i J K W.R.
GRACE
TTM EBIT边距
Grace
对等点
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Investor Day 2018 |
STRONG CASH GENERATOR
96
5.5
5.2
5.6
2015 2016 2017
Adj. FCF ($M)
3% 2-Year CAGR
Working Capital Turns
257
236
274
2015 2016 2017
* Definitions of non-GAAP financial terms and reconciliations to the closest GAAP term are provided in the Appendix
2015 2016 2017 2018E
Cash Tax Rate Adj ETR
Low Cash Tax Rate
Strong Margins, well managed Working Capital and Capex
low Cash 税收为2026%、36%、34%、32%、27%、27%。现金税率~15%
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Investor Day 2018 |
U.S. TAX REFORM
97
U.S. tax reform extends favorable low cash taxes to 2026
U.S. tax reform enables greater competitiveness through lower U.S. tax rate, incentives for
investment and global mobility of cash
4Q17 provisional charge of $143 million
− Includes repatriation tax, write-down of U.S. deferred assets and implementation of territorial tax system
− Represents provisional estimate. Subject to adjustment in 2018
Enables use of our strong global balance sheet to fund growth and achieve capital
allocation priorities more efficiently
Impacts incorporated into our 2018 outlook
− Adjusted ETR 27%-28%, excluding incremental anti-base erosion tax due to NOLs
− Our low cash tax rate of 12%-15% extended by 2 years to 2026
*Definitions of 附录
提供了非公认会计原则的财务条款和与最接近的公认会计原则条款的调节。
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DISCIPLINED CAPITAL ALLOCATION
98
Dividends
Share
Repurchases
~8-10% of sales
Our highest return opportunities
Typical returns 20-30% IRR on
growth/productivity capex
Bolt-on acquisitions
Typical returns >20% IRR
Capital
Investments
Acquisitions
Target 2.0–3.0x Net Leverage
Growth rate > earnings growth
Programmatic with flexibility to be opportunistic
Reinvest in
the Business
Maintain
Target Net
Leverage
Return
Cash to
Shareholders
Strong Cash
Flows
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Investor Day 2018 |
CAPITAL ALLOCATION HISTORY AND PRIORITIES
99
Actions aligned with capital allocation model while staying true to leverage intent
Capital and R&D
Investments
Capex ~$250M; ~8% of sales
~40% growth projects…increasing capacity
R&D ~$100M, or ~3% of sales
BASF polyolefin catalysts business (SC)
Evonik silica product line (MT)
Huber de-foamer product line (MT)
Announced Single Site Catalyst acquisition (SC)
2-year average return of cash to shareholders
69% of AFCF
Dividend payout of $93M
Share repurchase of $260M
Acquisitions
26%
Capex and
R&D
Investments
37%
Dividends
10%
Share Buybacks
27%
2016 & 2017
~$960M
Acquisitions
Dividends and
Share Buybacks 2-Year Average Net Leverage 2.8x
Adj. EBIT ROIC 24%
2-Year Performance
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Investor Day 2018 |
CAPITAL INVESTMENT 2017 – 20211
100
We invest where the growth is, leveraging our existing
global manufacturing footprint
We time our investments with customer demand
growth and investments
Refining Technologies: catalysts manufacturing in
the Middle East provides first-mover advantage in
developing markets with low-cost capacity
Specialty Catalysts: U.S. PP catalyst expansion;
global manufacturing footprint optimization
Materials Technologies: manufacturing network
capacity expansion
ART JV: significant U.S. expansion in hydroprocessing
Capital Investment Highlights
1 Amounts exclude ART JV capacity expansion funded through the joint venture.
$0
$50
$100
$150
$200
$250
2017 2018 2019 2020 2021
Growth and Productivity
Maintenance and Infrastructure
Growth investments generate ~$250M in revenue growth by 2021
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Investor Day 2018 |
THOUGHTFUL DISCIPLINED M&A APPROACH
101
Active pipeline for strategic acquisitions will continue to create value
Target Profile
and Strategic Fit
Expands technology, R&D and/or commercial capabilities
Leading market positions to accelerate growth
Attractive sales and earnings profiles
Enhances and/or leverages manufacturing capabilities
Synergy
Highly synergistic
Returns focused on cost and capital savings
利用现有的全球基础设施
销售/商业协同-所有向上的
返回
>风险调整的障碍率
强ROIC
EPS增长
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Investor Day 2018 |
M&A SCORECARD
102
M&A Filters
UNIPOL PP® (Dow) LYNX® (BASF)
Polyolefin Catalysts and
Components (Albemarle)
2013 2016 2018E
Growth/Profitability
High growth;
Good margins
Growth opportunity;
Low asset utilization
High growth;
Good margins
Synergies 4x EBITDA 4x EBITDA 3x EBITDA
Commercial Fit PP licensing/catalysts PE/PP catalysts Single-site PE catalysts
Technology Fit Next-gen PP catalysts LYNX® Ziegler-Natta tech
Single-site catalyst R&D and
technical capabilities
Manufacturing Fit Aligned with know-how
Great assets;
Room for growth
Enhanced manufacturing
capabilities and capital avoidance
EPS Accretion In first full year In first full year In first full year
Enhancing growth, technology and manufacturing capabilities with value accretive M&A
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Investor Day 2018 |
CAPITAL STRUCTURE
103
Summary of Leverage Profile
Pro-forma Capital Structure
Post-Acquisition
Raising $950 in new Term Loan B (TLB)
To refinance current TLB and fund
acquisition
Priced and allocated on Feb. 23, expected
to fund at acquisition closing
Benefits of new TLB:
Extends maturity to 2025
Reduces TLB borrowing rate from L+200
to L+175
Strong credit profile (Ba2/BB)
Clear path to target leverage range
1 Using Adj. EBITDA FY2017 actuals
2 Total liquidity is cash plus available amount under US revolving credit facility
($M) Maturity 12/31/2017 Leverage1
Cash and cash equivalents $ 153
Term Loan B 2021 498
5.125% Senior Notes 2021 694
5.625% Senior Notes 2024 297
Other borrowings 55
债务总额$1,544,2.9x
净债务$1,391,2.6x
总流动性2$416
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Investor Day 2018 |
SIGNIFICANT LIQUIDITY TO SUPPORT GROWTH
104
Capacity to fund $1B in additional investments through 2021
2.6x
1.8x
YE 2017 ALB Acq Operating
Cash Flow
Capex Dividends &
Share Buy
Back
YE 2021E
Net
Debt/
A
d
ju
s
ted
E
BITD
A
Target Leverage 2.0x – 3.0x
$1 billion
available
capacity for
additional
investment
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Investor Day 2018 |
REAFFIRMING 2018 GUIDANCE / 2021 FINANCIAL FRAMEWORK1
2018
Outlook
2016-2021
Framework
Total Sales CAGR 8%-10% 6%-8%
Organic Sales CAGR 4%-6% 4%-6%
Adj. EBIT CAGR 6%-9% 6%-8%
Adj. EPS CAGR 9%-12% >10%
Adj. FCF $210-250M
>$1B over
5 years
2018 Guidance Assumptions
Anticipated polyolefin catalysts acquisition is
completed by March 31, 2018 drives 4% growth
EBIT growth includes overcoming headwind of $25M
BI insurance proceeds from 2017 customer outage
2016-2021 Financial Framework Assumptions
5-year business segment CAGRs:
̶ Refining Technologies: 3%-4%
̶ Specialty Catalysts: 6%-8%
̶ Materials Technologies: 3%-4%
Adj. effective tax rate2 between 27%-28%
Adj. cash tax rate 12%-15%
105
1 Includes single site catalyst business acquisition with close date of March 31
2 AETR is post tax reform 2018 - 2021
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Investor Day 2018 |
KEY TAKEAWAYS
106
Focused and clear path to organic revenue growth and
margin expansion
Executing on core operating processes to support profitable growth
Cash flow generation supports organic and inorganic investment while
maintaining strong balance sheet
Disciplined capital allocation strategy; funding capital investments, M&A and
returns to shareholders
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主席兼首席执行官
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Investor Day 2018 |
INVESTMENT THESIS
108
Leading-edge innovation
and process know-how
Strong, sustainable
high margins
Customer intimacy,
long-term partnerships
Aligned to Strong Macro Trends and Business Drivers
Strong FCF and proven track record of driving value through acquisitions
2016-2021 Financial Framework
6%-8%
Total Sales Growth CAGR
4%-6%
Organic Sales Growth CAGR
6%-8%
Adj. EBITDA CAGR
>10%
Adj.EPS CAGR
>$1B
在5年内
adj.fcf
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问答
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附录
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Investor Day 2018 |
GLOSSARY
111
ART Advanced Refining Technologies MgCl2 Magnesium Chloride
BBL Barrel of oil MT Materials Technologies (Grace operating segment)
cGMP Current Good Manufacturing Practice MTO Methanol-to-Olefins
EHSS Environment, Health, Safety, and Security OECD Organisation for Economic Co-operation and Development
EMEA Europe, Middle East, and Africa OEE Overall equipment effectiveness
FCC Fluid Catalytic Cracking PE Polyethylene
GMS Grace Manufacturing System PP Polypropylene
GVM Grace Value Model PPR PP random co-polymeride
HCPP High-crystallinity polypropylene PSM Process safety management
HPC Hydroprocessing catalysts rTPO Reactor grade thermoplastic polyolefins
IBM Integrated Business Management SC Specialty Catalysts (operating segment)
ISBL Inside battery limits SSC Single-site catalysts
MAO Methylaluminoxane TMO Transformation Management Office
MBDOE Million barrels per day of oil equivalent VOC Volatile organic compounds
MCN Metallocene ZN Ziegler-Natta
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投资者日2018
技术部门被固化,并进入制药
应用程序。在2016分离之前,建筑产品部门通过新技术和螺栓式收购扩大了规模.GRACE扩展了它的地理平台,将新兴地区的销售额从占总销售额的21%提高到超过38%。弗雷德与董事会一起指导公司完成了历史上最复杂和最具争议的第11章重组之一,于2014年月3结束。根据重组,所有待决和未来的与石棉有关的索赔都转给独立信托,所有非石棉的债权人都得到全额偿付。弗雷德从莫根塔勒私人股本合伙人那里来到格雷斯,他是该公司的合伙人。Previously, he was President and CEO of ICG Commerce. At
AlliedSignal, Inc. (now Honeywell) from 1993 to 2000, he held leadership roles in
general management, business development, and finance in the company's
specialty chemical, polymer, chemical intermediaries, and fibers businesses,
including service as Vice President and General Manager of the performance
fibers business. Fred began his career at General Electric (GE), where he spent
12 years in financial management positions at five business units.He completed
GE's Financial Management Training Program and its benchmark General
Management Course.
Fred graduated magna cum laude with a BS degree in Finance from the State
University of New York at Oswego. He has served since 2008 as an independent
director of NVR, one of the largest home builders in the United States.
Fred Festa is the eighth chief executive to lead the company since its founding
in 1854.He joined Grace as President and Chief Operating Officer in
November 2003, became Chief Executive Officer in June 2005, and was
elected Chairman of the Board in January 2008.
Through Fred's leadership, Grace has enhanced its standing as a premier
global specialty chemicals and materials company with strong franchises in
large global markets. Fred has led the transformation of Grace into a fully-
integrated global operating company.During his tenure, revenue increased 65
percent and net sales increased from $1.8 billion in 2003 to $3.1 billion in
2015. Adjusted EBITDA expanded from $252 million to $750 million, while
Adjusted Free Cash Flow rose from $53 million to $440 million.
In 2015-16, Fred led the separation of Grace into two independent public
companies that are expected to benefit from improved strategic focus,
simplified operating structures, and more efficient capital allocation.这一分离是通过格蕾丝建筑公司(GRACE‘s Construction
Products分部和Darex包装技术公司(Darex Package Technologies)的免税分拆而完成的,后者是GCP应用技术公司(GCP应用技术公司)。(纽约证券交易所代码:GCP)。GRACE继续经营催化技术和材料技术业务(不包括Darex),在弗雷德的领导下完成了23项收购和7项剥离。The company's portfolio was rebalanced, expanding the breadth of
the catalysts business and increasing polypropylene catalysts revenue more
than $200 million in less than five years. The silica-related Materials
112
BIOGRAPHIES
Fred Festa
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
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投资者日(2018),在那里他领导了部门管理实践的转变。He also served as a member of the President's Management
Council.
Before entering public service in 2005, Hudson worked at Dell Inc.,
where he held general management and financial leadership positions
at the company's headquarters in Austin, Texas and in China. From
2002 to 2005, Hudson served as a general manager for Dell in China,
leading a $500 million business unit through a period of double-digit
sales growth, triple-digit earnings growth and significant operational
change.Before joining Dell in 1997, he worked at AlliedSignal, Inc. (now
Honeywell), Emerson Electric Co. and Arthur Andersen & Co.
Hudson earned an MBA at the Kellogg School of Management at
Northwestern University and a Bachelor's degree at Baylor University.
He is a board member of Madison Industries, a Chicago-based industrial
holding company, and a former board member of KIPP DC, a public
charter school operator in Washington, D.C.
As Hudson La
Force公司总裁首席运营官负责格雷斯公司的催化技术和材料业务部门以及格雷斯公司的全球制造、
和供应链业务。作为首席运营官,哈德逊主要专注于安全、销售增长、制造业卓越和资本投资。他于2016年2月被任命为这一职务,并于2017年11月当选为格蕾丝董事会成员。哈德逊于2008加入格雷斯担任高级副总裁兼首席财务总监。In that role, he focused on improving the company's
profitability, cash flow, and return on invested capital. During his
tenure as CFO, gross margins increased eight percentage points,
Adjusted EBITDA margins increased 11 percentage points, adjusted
free cash flow increased nearly three times, and adjusted return on
invested capital increased 11 percentage points.Hudson was deeply
involved in Grace's internal transformation into a fully-integrated global
operating company and its external transformation into two industry-
leading public companies in February 2016.
Prior to joining Grace, Hudson served as Chief Operating Officer and
Senior Counselor to the Secretary at the U.S. Department of Education
113
BIOGRAPHIES
Hudson La Force
PRESIDENT AND CHIEF OPERATING OFFICER
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投资者日2018(2016年初),托马斯·布拉泽被任命为高级副总裁兼首席财务官。He is a member of Grace's leadership team
and responsible for Grace's global financial management and
information technology functions.
Tom is a seasoned finance professional and proven leader with strong
specialty chemical industry experience with global companies.
Before joining Grace, he was President of Arysta LifeScience North
America, LLC, a global agricultural chemical and life science business,
where he also served for 10 years as Chief Financial Officer.
Previously he held business development and financial leadership
responsibilities with Honeywell and audit leadership roles at Price
Waterhouse.
Tom earned an MBA at the Columbia University and a Bachelor's
degree in Accounting at Montclair State University.
114
BIOGRAPHIES
Tom Blaser
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
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投资者日2018
Al在化学工业的职业生涯长达27年,其中22个是在纳科化学公司(一家全球性的水、能源和空气改进解决方案和服务供应商)工作。After successful roles
throughout Nalco’s commercial organization, he rose to senior
leadership in several divisions in Nalco and also served as Senior Vice
President and General Manager of Ecolab’s traditional core business,
the Food & Beverage North America division, following the acquisition of
Nalco.
Currently, Al serves on the Board of Directors for the American Fuel and
Petrochemical Manufacturers (AFPM) and represents Grace on the
Board of the Maryland Chamber of Commerce.他还完成了霍华德县(马里兰州)领导方案,在美国陆军开始了他的职业生涯,在第25步兵师第65工兵营担任营训练干事、连执行干事和将军助理德罗巴营。He
graduated near the top of his class at West Point with a Bachelor of
Science degree in General Engineering/Chemistry, and was first in his
class at the United States Army Engineer School. He is also a graduate
of the Kellogg School of Management’s Advanced Executive Program.
Since joining Grace in 2104, Al Beninati has led all three of the
company’s business segments.He is now responsible for Specialty
Catalysts, the global leader in polyolefin catalysts and licensing, with
the world’s broadest portfolio of polypropylene (PP) and polyethylene
(PE) catalyst technologies.
Al also serves as President, Grace Asia Pacific and the executive
sponsor of the Grace Integrated Business Management initiative,
which is focused on optimizing the company’s Sales and Operations
Planning.
Under his leadership, the Specialty Catalysts segment 已经发展成为GRACE的一个重要的增长驱动力,许多植物的运行水平都达到了创纪录的水平,以满足强劲的需求。在2018,Al将再次领导一个
重大收购整合,因为格雷斯吸收阿尔贝马勒的领先单位催化剂业务。在2016,他成功地整合了LynxPP和PE催化剂业务,于同年从
BASF收购。Al continues to expand Specialty Catalyst’s
UNIPOL® PP Process Technology and Licensing offering, a business
Grace acquired from Dow in 2013.
Prior to joining Grace, he was Vice President, Municipal Water
Treatment at Univar, a leading distributor of chemistry and related
products and services.
115
BIOGRAPHIES
Al Beninati
PRESIDENT, SPECIALTY CATALYSTS
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Investor Day 2018 | 116
BIOGRAPHIES
Tom Petti
PRESIDENT, REFINING TECHNOLOGIES
FCC Research & Development, Technical Service, Sales, and
Marketing, before his promotion to General Manager of the Americas
and Global Marketing Director for Specialty Catalysts.
In 2006, Tom left Grace temporarily to found and lead Vandelay
Management, LLC, a strategic development consultancy serving the
specialty chemicals industry.
Tom rejoined Grace in 2012 as Vice President, Strategic Planning.He
led and advanced Grace’s strategic planning process, which identified
opportunities for the company’s core and growth programs, as well as
innovative applications for catalysts, materials, and construction
businesses based on Grace’s materials science capabilities.
Beginning in 2013, Tom served two years as President, Grace
Construction Products.在他的领导下,建筑产品业务增长,盈利能力显著提高。This business was
separated from Grace in 2016 to become part of a new public company
called GCP Applied Technologies Inc., a global leader in specialty
construction chemicals and building systems.
Tom earned a Bachelor of Science in Chemical Engineering from the
University of Maryland, an MBA from Duke University, and a Ph.D. in
Chemical Engineering from the University of Delaware.
Since October 2015, Tom Petti has LED GRACE公司的炼油技术(Br)业务,包括流体催化裂化(FCC)催化剂和添加剂、甲醇到烯烃(MTO)催化剂,以及通过高级精炼技术(ART)加氢处理
催化剂,这是格雷斯与雪佛龙(Chevron)的合资企业。汤姆是ART的董事会成员。格雷斯是催化裂化和炼油工业加氢催化剂的全球领先者,为世界上许多最大和公认的石油和炼油公司服务。The Refining
Technologies business delivers significant value to its refinery
customers through product performance, environmental benefits, and
operational technical support provided by Grace’s technical experts.
Under Tom’s leadership, the business has adapted to capture
opportunities in the fastest-growing segments in FCC applications,
specifically, global production of petrochemical feedstocks and heavy
feed bottom-of-the-barrel processing.ART在生产清洁燃烧燃料的加氢处理方面取得了创纪录的业绩,公司成功地扩展到了新兴的MTO催化剂(br}段。
Tom与格雷斯的任期始于1992,当时他加入了格蕾丝的研究中心从事工艺开发。他后来担任
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投资者日2018美国和全球营销、运营、研发、制造和全球
项目管理。
Sandra以实施经过验证的方法来转换
业务而闻名。她的求知欲、毅力和深刻的分析能力使她能够迅速评估、综合和简化复杂的市场和商业挑战,以便制定可行的计划。她的协作、基于优势的方法将她的团队的历史知识连接到了一个以前瞻性为中心的愿景上。她创造了清晰和可采取行动的战略解决方案,同时与
组织接触并激励其取得成果。从竞争性体育中学到的纪律、复原力和团队精神继续是桑德拉生活的一个组成部分,也是使她成为一名领导者的因素。She believes a culture of excellence is key to
creating a high-performance organization.
Sandra earned a Bachelor’s degree in Mechanical Engineering from the
University of Wisconsin-Madison and an MBA in Marketing, Finance,
and Business Strategy from Northwestern University.
Since May 2017, Sandra Wisniewski has led Grace Materials
Technologies, the business segment which produces and sells
specialty materials, including silica-based and silica-alumina-based
products used in a broad array of consumer, pharmaceutical,
chemical process and coatings.
Sandra brings to Grace a unique perspective on value creation and
wealth of experience in the healthcare of pharmaceutical industries.
Prior to joining Grace, she was President and Chief Executive Officer
for SunTech Medical, an international blood pressure technology
company.Previously, she served as a General Manager and Vice
President at Sanofi, a global healthcare technology company.
The first 25 years of her career were with Baxter International where
she held several leadership positions in general management, sales,
marketing, R&D, global project management, manufacturing, and
operations.As Global Marketing Vice President for Intravenous
Solutions, she led a successful revitalization of the company’s $1
billion heritage business by implementing centralized global portfolio
management.
Sandra’s record of generating sustainable growth is built on her
diverse background including general management, sales leadership,
117
BIOGRAPHIES
Sandra Wisniewski
PRESIDENT, MATERIALS TECHNOLOGIES
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DEFINITIONS AND RECONCILIATIONS OF NON-GAAP MEASURES
118
Non-GAAP Financial Terms
Adjusted EBIT means income from continuing operations attributable to W. R. Grace & Co. shareholders adjusted for interest income and expense; income taxes; costs related to legacy product,
environmental and other claims; restructuring and repositioning expenses and asset impairments; pension costs other than service and interest costs, expected returns on plan assets, and amortization of prior
service costs/credits; income and expense items related to divested businesses, product lines, and certain other investments; gains and losses on sales of businesses, product lines, and certain other
investments; third-party acquisition-related costs and the amortization of acquired inventory fair value adjustment; and certain other items that are not representative of underlying trends.
Adjusted EBITDA means Adjusted EBIT adjusted for depreciation and amortization.
Adjusted EBIT Return On Invested Capital means Adjusted EBIT (on a trailing four quarters basis) divided by the sum of net working capital, properties and equipment and certain other assets and liabilities.
Adjusted Gross Margin means gross margin adjusted for pension-related costs included in cost of goods sold and the amortization of acquired inventory fair value adjustment.
Adjusted Earnings Per Share (Adjusted EPS) means diluted EPS from continuing operations adjusted for costs related to legacy product, environmental and other claims; restructuring and repositioning
expenses and asset impairments; pension costs other than service and interest costs, expected returns on plan assets, and amortization of prior service costs/credits; income and expense items related to
divested businesses, product lines, and certain other investments; gains and losses on sales of businesses, product lines, and certain other investments; third-party acquisition-related costs and the
amortization of acquired inventory fair value adjustment; certain other items that are not representative of underlying trends; and certain discrete tax items.
Adjusted ETR means the effective tax rate on Adjusted EBIT less net interest expense, plus or minus certain discrete items (such as changes in tax laws and APB 23 reserves) and the incremental temporary increase
to anti-base erosion taxes that results from our U.S. net operating losses.
Adjusted Free Cash Flow means net cash provided by or used for operating activities from continuing operations minus capital expenditures plus cash f lows related to legacy product, environmental and other claims;
cash paid for restructuring and repositioning; capital expenditures related to repositioning; cash paid for third-party acquisition-related costs; and accelerated payments under defined benefit pension arrangements.
Adjusted EBIT, Adjusted EBITDA, Adjusted EBIT Return On Invested Capital, Adjusted Gross Margin, Adjusted EPS and Adjusted Free Cash Flow do 不代表美国公认会计原则所定义的收入或流动性措施
,也不应被视为作为GRACE业绩或流动性指标的替代措施。
格雷斯使用调整后的EBIT作为重大商业决策和确定某些奖励报酬的业绩衡量标准。Grace uses Adjusted EBIT as a performance measure because it
provides improved period-to-period comparability for decision making and compensation purposes, and because it better measures the ongoing earnings results of its strategic and operating decisions by
excluding the earnings effects of the legacy product, environmental and other claims; restructuring and repositioning activit ies; divested businesses; the effects of acquisitions; and certain other items that are
not representative of underlying trends.GRACE使用调整后的EBITDA、调整后的EBIT投资资本回报率、调整后的毛利率和调整后的每股收益作为业绩衡量标准,并可使用这些
措施确定某些激励薪酬。GRACE利用调整后的EBIT投资资本回报率来做出经营和投资决策,并平衡
业务的增长和盈利能力。GRACE利用调整后的自由现金流量作为一项流动性措施,以评估其产生现金以支持其正在进行的业务活动、投资于其业务和向股东提供
资本的回报的能力。GRACE还使用调整后的自由现金流量作为确定某些激励薪酬的绩效指标。Grace is unable without unreasonable efforts to estimate the
annual mark-to-market pension adjustment or 2017 net income, and without the availability of this significant information, Grace is unable to provide reconciliations for the forward-looking information set forth in
the 2017 outlook, above.
These measures are provided to investors and others to improve the period-to-period comparability and peer-to-peer comparability of Grace’s financial results, and to ensure that investors 其他的
理解GRACE用于评估其业务绩效的信息。它们将格蕾丝目前业务基础的经营结果与格蕾丝遗留产品、环境索赔和其他索赔、重组和重新定位活动、被剥离的企业和上文讨论的其他项目的成本区分开来。These measures may have material limitations due to the exclusion or
inclusion of amounts that are included or excluded, respectively, in the most directly comparable measures calculated and presented in accordance with U.S. GAAP and thus investors and others should review
carefully the financial results calculated in accordance with U.S. GAAP.
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DEFINITIONS AND RECONCILIATIONS OF NON-GAAP MEASURES
119
Adjusted EBIT by Operating Segment: 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 2017
Catalysts Technologies segment operating income $ 367.8 $ 78.3 $ 87.5 $ 94.3 $ 107.7 $ 81.2 $ 101.3 $ 103.6 $ 109.3 $ 395.4
Materials Technologies segment operating income 104.0 20.6 28.0 26.4 29.0 24.8 24.2 26.4 25.2 100.6
Corporate costs (59.4 ) (13.2 ) (16.3 ) (14.9 ) (15.0 ) (16.1 ) (18.3 ) (18.5 ) (16.1 ) (69.0 )
Gain on curtailment of postretirement plans related to current businesses 0.2 — — — 0.2 — — — — —
Certain pension costs(B) (12.3 ) (3.1 ) (3.1 ) (3.1 ) (3.0 ) (3.1 ) (3.2 ) (3.4 ) (3.3 ) (13.0 )
Adjusted EBIT 400.3 82.6 96.1 102.7 118.9 86.8 104.0 108.1 115.1 414.0
(Costs) benefit related to legacy product, environmental and other claims (35.4 ) (4.4 ) (6.7 ) (13.1 ) (11.2 ) (2.1 ) (14.9 ) (8.5 ) (5.3 ) (30.8 )
Restructuring and repositioning expenses (38.6 ) (13.6 ) (9.4 ) (5.6 ) (10.0 ) (2.3 ) (5.4 ) (9.3 ) (9.7 ) (26.7 )
Accounts receivable reserve—Venezuela — — — — — — — (10.0 ) — (10.0 )
Third-party acquisition-related costs (2.5 ) — (2.5 ) — — — — (0.4 ) (2.5 ) (2.9 )
Amortization of acquired inventory fair value adjustment (8.0 ) — — (4.1 ) (3.9 ) — — — — —
Pension MTM adjustment and other related costs, net (60.3 ) 0.2 0.7 0.2 (61.4 ) (1.9 ) — — (49.2 ) (51.1 )
Gain on sale of product line 1.7 — 0.7 — 1.0 — — (0.4 ) 0.4 —
Income and expense items related to divested businesses 0.1 (0.3 ) 0.1 (0.1 ) 0.4 (0.3 ) (0.7 ) (0.3 ) (1.0 ) (2.3 )
Gain on curtailment of postretirement plans related to divested
businesses 0.3 — — — 0.3 — — — — —
Loss on early extinguishment of debt (11.1 ) (11.1 ) — — — — — — — —
Interest expense, net (80.5 ) (21.8 ) (19.4 ) (19.4 ) (19.9 ) (19.3 ) (19.5 ) (20.2 ) (19.5 ) (78.5 )
(Provision for) benefit from income taxes (59.0 ) (21.2 ) (21.5 ) (19.4 ) 3.1 (18.0 ) (19.6 ) (11.6 ) (151.3 ) (200.5 )
Income (loss) from continuing operations attributable to W. R.
Grace & Co. shareholders $ 107.0 $ 10.4 $ 38.1 $ 41.2 $ 17.3 $ 42.9 $ 43.9 $47.4$(123.0)$11.2
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DEFINITIONS AND RECONCILIATIONS OF NON-GAAP MEASURES
120
Adjusted Free Cash Flow: Q4 2016 Q4 2017
Net cash provided by (used for) operating activities 267.5 319.2
Capital expenditures (116.9 ) (125.2 )
Free Cash Flow 150.6 194.0
Cash paid for legacy product, environmental and other claims 24.6 54.5
Cash paid for restructuring 16.0 13.8
Cash paid for repositioning 35.5 11.0
Cash paid for taxes related to repositioning 5.0 —
Cash paid for third-party acquisition-related costs 2.3 0.7
Capital expenditures related to repositioning 2.0 —
Adjusted Free Cash Flow 236.0 274.0
Calculation of Adjusted EBIT Return On Invested Capital (trailing four quarters): Q4 2016 Q4 2017
Adjusted EBIT 400.3 414.0
Invested Capital:
Trade accounts receivable 273.9 285.2
Inventories 228.0 230.9
Accounts payable (195.4 ) (210.3 )
306.5 305.8
Other current assets (excluding income taxes) 32.0 42.1
Properties and equipment, net 729.6 799.1
Goodwill 394.2 402.4
Technology and other intangible assets, net 269.1 255.4
Investment in unconsolidated affiliate 117.6 125.9
Other assets (excluding capitalized financing fees) 34.9 37.4
Other current liabilities (excluding income taxes, legacy environmental matters, accrued interest, and restructuring) (144.4 ) (158.6 )
Other liabilities (excluding income taxes and legacy environmental matters) (89.3 ) (113.7 )
Total invested capital 1,650.2 1,695.8
Adjusted EBIT Return 论投资资本24.3%24.4%
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DEFINITIONS AND RECONCILIATIONS OF NON-GAAP MEASURES
121
Three Months Ended December 31,
2017 2016
(In millions, except per share amounts)
Pre-
Tax
Tax at
Actual
Rate
After-
Tax
Per
Share
Pre-
Tax
Tax at
Actual
Rate
After-
Tax
Per
Share
Diluted Earnings Per Share (GAAP) $ (1.81 ) $ 0.25
Pension MTM adjustment and other related costs, net $ 49.2 $ 17.0 $ 32.2 0.47 $ 61.4 $ 20.9 $ 40.5 0.58
Costs (benefit) related to legacy product, environmental and other claims 5.3 2.0 3.3 0.05 11.2 4.2 7.0 0.10
Restructuring and repositioning expenses 9.7 2.9 6.8 0.10 10.0 2.1 7.9 0.11
Amortization of acquired inventory fair value adjustment — — — — 3.9 1.5 2.4 0.03
Income and expense related to divested businesses 1.0 0.3 0.7 0.01 (0.4 ) (0.1 ) (0.3 ) —
Gain on termination and curtailment of postretirement plans related to divested
businesses — — — — (0.3 ) (0.1 ) (0.2 ) —
Third-party acquisition-related costs 2.5 1.0 1.5 0.02 — — — —
Gain on sale of product line (0.4 ) (0.1 ) (0.3 ) — (1.0 ) (0.3 ) (0.7 ) (0.01 )
Discrete tax items:
Provisional charge related to the U.S. Tax Cuts and Jobs Act of 2017 (143.0 ) 143.0 2.11 — — —
Discrete tax items, including adjustments to uncertain tax positions (2.2 ) 2.2 0.03 7.9 (7.9 ) (0.11 )
Adjusted EPS (non-GAAP) $ 0.98 $ 0.95
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DEFINITIONS AND RECONCILIATIONS OF NON-GAAP MEASURES
122
Twelve Months Ended December 31,
2017 2016
(In millions, except per share amounts)
Pre-
Tax Tax Effect
After-
Tax
Per
Share
Pre-
Tax Tax Effect
After-
Tax
Per
Share
Diluted earnings per share from continuing operations $ 0.16 $ 1.52
Costs (benefit) related to legacy product, environmental and other claims $ 30.8 $ 11.4 $ 19.4 0.28 $ 35.4 $ 13.2 $ 22.2 0.31
Restructuring and repositioning expenses 26.7 8.9 17.8 0.26 38.6 11.6 27.0 0.38
Accounts receivable reserve—Venezuela 10.0 3.5 6.5 0.10 — — — —
Pension MTM adjustment and other related costs, net 51.1 17.4 33.7 0.49 60.3 19.8 40.5 0.57
Income and expense items related to divested businesses 2.3 0.8 1.5 0.02 (0.1 ) — (0.1 ) —
Loss on early extinguishment of debt — — — — 11.1 4.1 7.0 0.10
Third-party acquisition-related costs 2.9 1.1 1.8 0.03 2.5 0.7 1.8 0.03
Gain on sale of product line — — — — (1.7 ) (0.6 ) (1.1 ) (0.02 )
Amortization of acquired inventory fair value adjustment — — — — 8.0 3.0 5.0 0.07
Gain on curtailment of postretirement plans related to divested businesses — — — — (0.3 ) (0.1 ) (0.2 ) —
Discrete tax items:
Provisional charge related to the U.S. Tax Cuts and Jobs Act of 2017 (143.0 ) 143.0 2.10 — — —
Discrete tax items, including adjustments to uncertain tax positions 2.7 (2.7 ) (0.04 ) (9.8 ) 9.8 0.14调整后每股收益3.40美元
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投资者日2003年3月2日纽约证券交易所