Third Quarter 2019 Results Presentation November 6, 2019 General - PowerPoint PPT Presentation

Third Quarter 2019 Results Presentation November 6, 2019

General Disclosure This presentation includes “forward -looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. These forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, business trends and other information that is not historical information. When used in this presentation, the words “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “forecasts,” or future or conditional verbs, such as “will,” “should,” “could,” or “may,” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, management’s examination of historical operating trends and data, are based upon our current expectations of future events and various assumptions which may not be realized or accurate. Our expectations, beliefs and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs and projections will be achieved. We undertake no obligation to update or revise forward-looking statements which may be made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in this presentation. Such risks, uncertainties and other important factors include, among others: future global economic conditions, our ability to transfer production of certain specialty and differentiated products from our Pori, Finland manufacturing facility to other sites in our manufacturing network, the costs associated with such transfer and the closure of our Pori facility, our ability to realize financial and operational benefits from our business improvement plans and initiatives, impacts on TiO2 markets and the broader global economy from the imposition of tariffs by the U.S. and other countries, changes in raw material and energy prices, access to capital markets, industry production capacity and operating rates, the supply demand balance for our products and that of competing products, pricing pressures, technological developments, legal claims by or against us, changes in government regulations, including in connection with the classification of TiO 2 as a carcinogen, geopolitical events, cyberattacks and other risk factors as discussed in our annual report on Form 10-K filed on February 20, 2019, and as updated, when applicable, in our quarterly reports on form 10-Q. This presentation contains financial measures that are not in accordance with generally accepted accounting principles in the U.S. ("GAAP"), including EBITDA, adjusted EBITDA, adjusted EBITDA margin, free cash flow and net debt and certain ratios and other metrics derived therefrom. We have provided reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures in the Appendix to this presentation.

Third Quarter 2019 Highlights Financial summary $ in millions, except per share amounts 3Q19 3Q18 2Q19 Revenues 526 533 578 Net (loss) income attributable to Venator (a) (19) (368) 21 Adjusted net income attributable to Venator (2)(a) 8 34 14 Adjusted EBITDA (2)(a) 50 77 61 Diluted (loss) earnings per share (a) (0.18) (3.46) 0.20 Adjusted diluted earnings per share (2)(a) 0.08 0.32 0.13 Net cash provided (used in) by operating activities 14 1 (21) Free cash flow (4)(b) (5) (103) (50) (a) Includes an $8 million nonrecurring benefit in 3Q19, due to a change in plant utilization rates, which increased our overhead absorption and corresponding inventory valuation at certain facilities (b) Does not include a $15 million benefit from monetizing cross-currency interest rate swaps in the three months ended September 30, 2019 See Appendix for reconciliations and important explanatory notes 3

Titanium Dioxide Stable sequential average TiO 2 price and seasonal volume decline Revenues Adjusted EBITDA 500 $ in millions $ in millions $75 $439 450 $396 $389 19% 400 $55 350 $51 300 13% 13% 250 200 150 100 50 0 3Q19 3Q18 2Q19 3Q19 3Q18 2Q19 Titanium Dioxide Adjusted EBITDA margin Third Quarter Highlights Outlook  TiO 2 prices were stable Q/Q (1) (declined 7% (1) Y/Y) Near Term  Functional TiO 2 margin pressure; raw material cost  Volumes increased 12% Y/Y due to increased sales of inflation new products and higher demand  Volumes to reflect historical seasonal patterns  Specialty TiO 2 price remained stable  $6mm EBITDA benefit due to a change in plant Longer Term utilization rates which increased overhead absorption  Benefit from 2019 Business Improvement Program rates  EBITDA benefit from the transfer of specialty technology  $5mm EBITDA benefit from the 2019 Business  Favorable industry fundamentals for TiO 2 Improvement Program (1) In local currency 4

Performance Additives Soft demand partially offset by restructuring benefits Revenues Adjusted EBITDA $ in millions $ in millions $144 $16 17 $139 16 $130 15 $13 14 $12 13 12 11 10 9 8 12% 10% 7 8% 6 5 4 3 2 1 0 3Q19 3Q18 2Q19 3Q19 3Q18 2Q19 Performance Additives Adjusted EBITDA margin Third Quarter Highlights Outlook  Average prices increased 2% (1) Y/Y Near Term  EBITDA benefit from prior restructuring actions  Volumes declined 8% Y/Y across the segment  Soft demand for certain applications  $2mm EBITDA benefit due to a change in plant  Potential monetization of Color Pigments business utilization rates which increased overhead absorption rates Longer Term  $2mm EBITDA benefit from the 2019 Business  Benefit from 2019 Business Improvement Program Improvement Program  Continued optimization of manufacturing network (1) In local currency 5

Delivery on Business Improvement Program Delivering improvements ahead of 2019 target Expected Annual EBITDA Capture Areas of EBITDA Improvement $ in millions $ in millions $40 ~$25 >$15 $0 TiO2 efficiencies Performance SG&A reduction EBITDA 2019 2020 Additives costs Improvement and improvements 2019 Business Improvement Program Highlights  2019 annual capture ahead of target  Benefits from: – Expect to deliver more than $15 million in 2019 – TiO 2 manufacturing costs and efficiencies  Target $40 million of annual adjusted EBITDA benefit – Performance Additives costs and improvements – $8 million of incremental EBITDA benefit in 3Q19 – Reduction in SG&A – $15 million of cumulative benefit captured through 3Q19 – Expect to exit 2020 at the targeted run-rate (1) (1) Compared to year-end 2018 baseline 6

Adjusted EBITDA Bridges Third Quarter 2019 Year / Year EBITDA Bridge $ in millions $77 $(38) $(3) $8 $13 $50 $(7) (1) 3Q18 Adjusted EBITDA Price/Mix Volume COGS 2019 Business Other (SG&A / FX) 3Q19 Adjusted EBITDA Improvement Program Quarter / Quarter EBITDA Bridge $ in millions $2 $61 $(21) $4 $(5) $9 $50 (1) 2Q19 Adjusted EBITDA Price/Mix Volume COGS 2019 Business Other (SGA / FX) 3Q19 Adjusted EBITDA Improvement Program (1) Includes a benefit due to a change in plant utilization rates, which increased our overhead absorption and corresponding inventory valuation at certain facilities 7 See Appendix for reconciliations and important explanatory notes

Capital Resources Financial profile Actual Estimate $ in millions  Liquidity of $325mm as of September 30, 2019 Cash Uses 3Q19 YTD 2019E – $40mm of cash and $285mm available under the Adjusted EBITDA (a) 50 171 ABL – $15mm of cash proceeds from the monetization of Capital expenditures (1) (25) (73) ~(115) cross-currency interest rate swaps Cash interest (18) (41) ~(45)  Net debt leverage (3) of 3.3x Primary working capital change 18 (73) 15-30 – No significant debt maturities until 2024 (4)  Taxes Restructuring (5) (22) (25)-(30) – 2019 expected adj. effective tax rate of ~35% Other (includes pension) (22) (40) (60)-(70) – Long-term adj. effective tax rate of 15-20% with a Cash income taxes (1) (4) <(10) cash tax rate of 10-15% – ~$1.1bn of Net Operating Losses Pori cash expenses, net (2) (2) (55) (65)-(70) Total free cash flow (b) $(5) $(137) (a) Includes an $8 million nonrecurring benefit in 3Q19, due to a change in plant utilization rates, which increased our overhead absorption and corresponding inventory valuation at certain facilities (b) Does not include a $15 million benefit from monetizing cross-currency interest rate swaps See Appendix for reconciliations and important explanatory notes (1) Includes specialty technology transfer capital expenditures 8 (2) Includes Pori wind-down costs, closure costs and prior capital expenditures at Pori unrelated to the transfer program (3) Defined as net debt divided by trailing 12 month adjusted EBITDA as of September 30, 2019 (4) Scheduled maturities of our debt, excluding debt to affiliates and excluding borrowings under the ABL