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June 4, 2009. Representing Rockwood. Seifi Ghasemi Chairman & Chief Executive Officer of Rockwood since November 2001. Director of the Main Board of GKN plc, a $6 billion global industrial company (1997-2001) Chairman and CEO of GKN Sinter Metals and Hoeganes Corporation
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Representing Rockwood Seifi Ghasemi Chairman & Chief Executive Officer of Rockwood since November 2001 • Director of the Main Board of GKN plc, a $6 billion global industrial company (1997-2001) • Chairman and CEO of GKN Sinter Metals and Hoeganes Corporation • Employed with the BOC Group plc (now part of The Linde Group) from 1979-1997, a $7 billion global industrial gas company • Director of the Main Board of The BOC Group, plc; President of BOC Americas and Chairman & CEO of BOC Process Plants and Cryostar • M.S. in Mechanical Engineering from Stanford University
Rockwood at a Glance • Global specialty chemicals and advanced materials company • 2008 net sales of $3.4 billion • 2008 Adjusted EBITDA of $639 million (17.9% margin) • Free cash of $174 million in 2007 and $101 million in 2008 • $18.9 million free cash in Q1 2009 • Traded on the New York Stock Exchange (NYSE) - ROC
Key Features of Rockwood • Outstanding portfolio of businesses • Excellent free cash generation • Established track record • Excellent long term growth potential in lithium business • Experienced and motivated management team
Rockwood Business Sectors – LTM March 2009 ($ millions) Net Sales: $3,196 Adjusted EBITDA: 579 % Margin: 18.1% Specialty Chemicals (Chemetall) Pigments & Additives Advanced Materials Net Sales: $1,146 Adj. EBITDA: 283 % Margin: 24.7% Net Sales: $1,342 Adj. EBITDA: 176 % Margin: 13.1% Net Sales: $704 Adj. EBITDA: 163 % Margin: 23.1% 12 months ended 03/31/09 – excluding Pool and Spa Chemicals
46% (1) Specialty Chemicals (Chemetall) Brine Evaporating Ponds in Chile Largest Global Producer of Lithium Products Largest Global Producer of Lithium Products Pharmaceutical Batteries (1) Represents percentage of total Adjusted EBITDA before corporate costs.
Providing lithium n compounds throughout Li Li Li - - - tri(t tri(t tri(t - - - all stages of the value butoxy) butoxy) butoxy) - - - alanate alanate alanate chain Li Li Li Li - - - - Acetylide Acetylide Acetylide Acetylide LHS LHS LHS Li Li Li Li Li - - - - - Chromate Chromate Chromate Chromate Chromate Li Li Li - - - Alanate Alanate Alanate Constantly searching for Phenyl Phenyl Phenyl Phenyl - - - - n lithiumd lithiumd lithiumd lithiumd expansion opportunities LDA LDA LDA Methyl Methyl Methyl Methyl - - - - Li Li Li Li Li - - - - - Tetra Tetra Tetra Tetra Tetra - - - - - and new applications for lithium lithium lithium lithium Li Li Li - - - Hydride Hydride Hydride borate borate borate borate borate LiBOB LiBOB LiBOB LiBOB existing products Li Li Li - - - Amide Amide Amide Butyl Butyl Butyl Butyl - - - - lithium lithium lithium lithium Electrolytes Electrolytes Electrolytes Electrolytes Li Li Li Li Li - - - - - Silicate Silicate Silicate Silicate Silicate Li Li Li Li - - - - Perchlorate Perchlorate Perchlorate Perchlorate Lithium Lithium Lithium Li Li Li Li - - - - Butoxide Butoxide Butoxide Butoxide Li Li Li Li - - - - Methoxide Methoxide Methoxide Methoxide Li Li Li Li - - - - Nitride Nitride Nitride Nitride Metal Metal Metal Li Li Li Li Li - - - - - Phosphate Phosphate Phosphate Phosphate Phosphate Li Li Li Li - - - - Iodide Iodide Iodide Iodide Foils Foils Foils Li Li Li - - - Boro Boro Boro - - - hydride hydride hydride Li Li Li Li Li Li - - - - - - Nitrate Nitrate Nitrate Nitrate Nitrate Nitrate Sabalith Sabalith Sabalith Sabalith Sabalith Sabalith Li Li Li Li - - - - Flouride Flouride Flouride Flouride Li Li Li Li - - - - Salicylate Salicylate Salicylate Salicylate Lithium Lithium Lithium Chloride Chloride Chloride Anodes Anodes Anodes Li Li Li Li - - - - Bromide Bromide Bromide Bromide Li Li Li Li Li - - - - - Sulphate Sulphate Sulphate Sulphate Sulphate Li Li Li - - - Zeolite Zeolite Zeolite Li Li Li Li - - - - Citrate Citrate Citrate Citrate Li Li Li - - - Peroxide Peroxide Peroxide Lithium Lithium Lithium Lithium Li Li Li Li - - - - Benzoate Benzoate Benzoate Benzoate Carbonate Carbonate Carbonate Carbonate Other Other Other Life Life - - science products science products Metal and battery products Metal and battery products Na and Mg Na and Mg Na and Mg Li Li Li - - - Hydroxide Hydroxide Hydroxide Li Li Li Li - - - - Acetate Acetate Acetate Acetate Compounds Compounds Compounds Other products Other products Potash Potash Potash Ores Ores Ores Ores Brines Brines Brines Brines CO CO CO - - - 2 2 2 Abosorbtion Abosorbtion Abosorbtion Recycling Recycling Recycling Bischofite Bischofite Bischofite Products Products Products Lithium Value Chain
New Johnsonville, TN, USA Langelsheim, Germany Silver Peak, NV, USA Taichung, Taiwan Kings Mountain, NC, USA Antofagasta, Chile Manufacturing Sites - Overview
Lithium Growth Potential • Lithium Ion batteries for • Consumer electronics • Hand tools • Electric and hybrid cars of the future • Pharmaceutical applications • Organo-metallic compounds
46% (1) Specialty Chemicals (Chemetall) Second Largest Global Producer of Lithium Products Second Largest Global Producer of Products & Services for Metal Processing (1) Represents percentage of total Adjusted EBITDA before corporate costs.
Compelling Organic Growth Platforms Specialty Chemicals
28% (1) Pigments and Additives • Global Ranking No2 No1 Anatase TiO2 No2 No2 Pigments TiO2 Pigments Timber Treatment TiO2 Specialties/Nano Particles Clay-Based Additives • Represents percentage of total Adjusted EBITDA before corporate costs.
Compelling Organic Growth Platforms Pigments & Additives
27% (1) Advanced Materials Ceramics – Piezo Applications Ceramics – Medical Ceramics – Electronic Applications Ceramics – Cutting Tools (1) Represents percentage of total Adjusted EBITDA before corporate costs.
Compelling Organic Growth Platforms Advanced Materials
Key Features of Rockwood • Outstanding portfolio of businesses • Excellent free cash generation • Established track record • Excellent long term growth potential in lithium business • Experienced and motivated management team
Key Features of Rockwood • Outstanding portfolio of businesses • Leading global market position (No. 1 or No. 2) in each one of the business units • Global technology leadership • Consistent high adjusted EBITDA margins • Diverse end market exposure • Inorganic raw material base
Attractive Global Businesses in Diversified End-Markets 2008 Net Sales by End Market Environmental 2% Consumer Paper Products Other 2% 2% Specialty 8% Life Coatings Sciences 9% 10% Automotive 14% Metal Treatment & General Industrial 17% Electronics & Telecommunications 10% Construction Chemicals & 14% Plastics 12% Total : $3.4 billion Note: Continuing Operations Only.
Attractive Global Businesses in Diversified End-Markets (update) 2008 Net Sales by Geography Total : $3.4 billion Note: Continuing Operations Only. Net Sales by geography based on Ship-to Locations.
Inorganic Raw Material Base Limited Exposure to Energy Prices • Top 10 raw materials represent only 9.5% of 2008 net sales Raw Material Position RAW MATERIAL BUSINESS % OF 2008 NET SALES Titanium-bearing Slag Titanium Dioxide Pigments 1.6% Plasticizer Specialty Compounds 1.2% Tin Specialty Chemicals 1.1% Copper Timber Treatment Chemicals 1.0% Quaternary Amines Clay-based Additives 1.0% Phosphoric Acid Specialty Chemicals/Timber 0.9% PVC Resin Specialty Compounds 0.8% Iron Oxide Color Pigments 0.8% Monoethanolamine Timber Treatment Chemicals 0.6% Zinc/Zinc Oxide Specialty Chemicals, Titanium Dioxide 0.5% Pigments, Color Pigments Total 9.5% Energy Exposure • Energy purchases account for approximately 5% of 2008 net sales • Very limited exposure to oil price fluctuations due to inorganic focus
$174 $147 $133 $123 $101 2005 2006 2007 2008 3/31/09 LTM Key Features of Rockwood • Excellent Cash Generation • Free cash after capital expenditures (capital, interest expense, working capital changes and cash taxes)
Key Features of Rockwood • Established Track Record • ($ in millions) Net Sales Adjusted EBITDA CAGR: 10.9% CAGR: 11.5% Margin: 19.7% 19.0% 18.6% 18.9% 18.6% 19.6% 18.9% Note: Reflects the Groupe Novasep divestiture. 2002-2004 pro forma for the Dynamit Nobel acquisition. 2002 PF based on the combined Dynamit Nobel FYE 9/30 and Rockwood FYE 12/31 results. 2007 excludes electronics business. 2002-2006 includes electronics. 2008 excludes Pool & Spa Chemicals.
Key Features of Rockwood • Excellent Long Term Growth Potential in Lithium • Demand for lithium products in energy storage and pharmaceuticals has so far kept annual growth rates in high single digits • Potential for continued high demand growth as global auto industry turns to lithium-ion batteries to meet emission and fuel-efficiency standards • Rockwood is the largest global producer of lithium products with both market and technology leadership
Lithium Long-Term Growth • Lithium Ion batteries • in hybrid and electric cars • of the future.
Key Features of Rockwood • Experienced and Motivated Management Team • Current team has been in place since 2001 • Built Rockwood from $650 million/year in 2001 to $3.4 billion in 2008 • Management owns 6% of the company
Management Accomplishment - Transformation • 22 Acquisitions • 2 Joint Ventures • 3 Divestitures • Organic Growth • Focused Strategy • Consistent management philosophy • Cultural transformation
Strategy & Management • Philosophy
Management Philosophy • Small corporate center • Self-sufficient and accountable business units • Detailed operating metrics • Short term incentive plan based on cash generation • Long term equity plan for key executives • On-site communication and motivation of all employees
Moving Forward – Short Term • Generate and conserve cash • Significant focus on restructuring of production facilities and cost control • Deliver acceptable performance during the current global recession
Moving Forward – LongTerm Focus Portfolio • Focus on our core businesses, where we already have: • Global market position of #1 or #2 • Global technology leadership • Adjusted EBITDA margin of +20% Focus Portfolio Focus On Growth & Productivity • Organic growth: +5% per year (1.5x GDP) • Bolt-on acquisitions: +3% per year • Productivity improvement: +3% per year Focus On Growth & Productivity • Debt to Adjusted EBITDA of 3.0x in two years • EPS growth of +15% per year Improve Financial Ratios Improve Financial Ratios Invest in The Business • Sustainable Maintenance CapEx 3% of sales • Total CapEx 6-7% of sales Invest in The Business