EMN
20
24
Circular Economy Deep Dive
November 21, 2024
Strategy overview
Mark Costa
Board Chair and CEO
Public webcast
These slides should be reviewed with the public webcast presentations to which they relate, a replay of which is posted on our website at "investors.eastman.com."
Forward-looking statements
The information in this presentation and other statements by the company may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to, among other items: projections and estimates of earnings, revenues, volumes, pricing, margins, cost reductions, expenses, taxes, liquidity, capital expenditures, cash flow, dividends, share repurchases or other financial items, statements of management's plans, strategies and objectives for future operations, and statements regarding future economic, industry or market conditions or performance. Such projections and estimates are based upon certain preliminary information, internal estimates, and management assumptions, expectations, and plans. Forward-looking statements are subject to a number of risks and uncertainties, and actual performance or results could differ materially from that anticipated by any forward-looking statements. Forward-looking statements speak only as of the date they are made, and the company undertakes no obligation to update or revise any forward-looking statement. Other important assumptions and factors that could cause actual results to differ materially from those in the forward-looking statements are detailed in the company's filings with the Securities and Exchange Commission (the "SEC"), which are accessible on the SEC's website at www.sec.gov and the company's website at www.eastman.com.
Non-GAAP financial measures
All earnings and cash flow measures referenced in these presentations are non-GAAP and exclude certain items. Reconciliations to the most directly comparable GAAP financial measures and other associated disclosures, including a description of the non-GAAP measures and the excluded and adjusted non-core, unusual, and other items, are available in the Appendix at the end of this presentation and in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Forms 10-K and 10-Q filed with the SEC for the periods for which non-GAAP financial measures are presented available on our website at https://www.eastman.com/Company/investors/Financial_Information/Pages/SEC_Information.aspx. The projected Earnings Before Interest, Taxes, Depreciation, and Amortization ("EBITDA") exclude any non-core, unusual, or nonrecurring items. Our financial results forecasts do not include non-core items (such as mark-to-market pension and other postretirement benefit gain or loss, and asset impairments and restructuring charges) or any unusual or non-recurring items because we are unable to predict with reasonable certainty the financial impact of such items. These items are uncertain and depend on various factors, and we are unable to reconcile projected EBITDA excluding non-core and any unusual or non-recurring items to reported GAAP net earnings without unreasonable efforts.
Glossary of terms and acronyms
Refer to the Appendix at the end of this presentation for a glossary of terms and acronyms used in this presentation. Unless otherwise indicated, except for earnings per share, all
dollar amounts are millions "($M)" or billions "($B)"
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Today's agenda and presenters
Presentations
10:20 a.m.
Strategy overview
Mark Costa
10:40 a.m.
Polyester platform update
Brad Lich
Scott Ballard
Dr. Chris Killian
11:35 a.m.
Cellulosic biopolymer platform update
Travis Smith
Erwin Dijkman
11:55 a.m.
Financial update
Willie McLain
12:05 p.m.
Q&A
All speakers
Lunch
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Solid progress executing our strategy since 2021
Innovation-driven
Circular economy is our
Strengthening
Sustainability and ESG
Power of cash flow and
growth model is
vector of significant
execution to convert
are integrated into
the balance sheet
succeeding
growth
growth to value
how we win
Significant mix upgrade
Solidified leadership
Continued investment in
Made strong progress
Delivered resilient earnings
driven by innovation
position in circular
our capabilities and culture
reducing our carbon
and cash flow and
during recent weak
economy with
to deliver growth
footprint and remain on
demonstrated disciplined
macroeconomic
construction of world's
track for our 2030 goals
portfolio management
environment
largest material-to-
with the exit of
material molecular
underperforming and non-
recycling facility
core product lines
5
Our innovation-driven growth strategy is working
6
We have remained committed
to our strategy throughout this period of weak demand
Capital deployment
Capabilities
Results
Investing in organic growth
during weak parts of the economic cycle
$800
$600
$400
$200
$-
2019 2020 2021 2022 2023 2024F
Maintenance CapEx ($M)
Growth CapEx ($M)
Maintaining our world-class technology
Creating value in the core through
organization with aggressive external hiring
structural mix improvement
Head count
20192024F
7
Eastman is leveraged to an economic recovery, especially in discretionary markets
ISM manufacturing PMI has been contracting for the longest time since the 1980s
Current downturn: 23 of last 24 months below 50
50
COVID:
10 months below 50
2019
2020
2021
2022
2023
2024
Eastman's discretionary markets1 are still below 2019 levels2
100
2019
2020
2021
2022
2023
2024F
End-market demand
Eastman's specialty vol/mix
8
1.
LMC automotive global light vehicle production; National Association of Realtors U.S. Existing Home Sales; IHS Domestic appliances and
plastic products, U.S. and Western Europe
2.
Auto, building and construction, and consumer durables indexed to 2019 and weighted based on Eastman revenue footprint
Eastman's diverse portfolio and mix improvement through innovation have enabled strong performance relative to peers
Resilient adjusted EBITDA margins during a period of substantial inflation1
Consistent EPS performance in volatile environment
24%
22%
20%
18%
16%
14%
12%
2019
2020
2021
2022
2023
2024E
Commodity peers
Specialty peers
Eastman
3%
EPS CAGR
2%
1%
-2024E
-2%
Adjusted
2019
-6%
-10%
-9%
Commodity peers
Eastman
Specialty peers
Strong conversion of EBITDA to cash flow to fund growth
100%
Operating cash flow as a %
adjusted EBITDA 2019-2024E
75%
72%
73%
62%
50%
25%
0%
of
Specialty peers
Eastman
Commodity peers
Delivering superior Total Shareholder Returns over a 5-year2 period
60%
51%
50%
40%
30%
20%
19%
12%
10%
Commodity peers
Specialty peers
Eastman
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1.
All 2024E figures on this slide are NASDAQ sell-side equity analyst mean estimates as of market
close November 15, 2024
2.
5-year Total Shareholder Return ended November 15, 2024
Before circular investments, base business expected
to recover to >$2.1B of EBITDA in a normalized environment
>$2.1B
>$1.75B
Specialty vol/mix
CI returning
Operational
2024E
Fibers
Normalized
EBITDA
recovering to
to mid-cycle
moderation
excellence and
EBITDA
2019 levels
cost discipline
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Disclaimer
Eastman Chemical Company published this content on November 21, 2024, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on November 21, 2024 at 15:38:07.646.