Attached files
| file | filename |
|---|---|
| EX-99.1 - EX-99.1 - Versum Materials, Inc. | exhibit991pressreleasedate.htm |
| 8-K - 8-K - Versum Materials, Inc. | vsm8-kearnings10312016.htm |
VERSUM MATERIALS
EARNINGS CONFERENCE CALL:
Fourth Quarter & Full Fiscal Year 2016
December 1, 2016 – 11:00 A.M. Eastern
FORWARD-LOOKING STATEMENTS
This presentation contains certain statements regarding future actions, results and other matters which are “forward-looking statements” within the
meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. The words “believe,” “expect,” “anticipate,” “project,”
“estimate,” “budget,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,” “will,” “would,” “objective,” “forecast,” “goal,”
“guidance,” “outlook,” “effort,” “target” and similar expressions identify these forward-looking statements, which speak only as of the date the statements
were made. Forward-looking statements include, without limitation, statements about business strategies, operating plans, and outlook for Versum
Materials, our growth prospects, expectations as to future sales, operating income or Adjusted EBITDA, estimates regarding capital requirements and needs
for additional financing, estimates of expenses and cost reduction efforts, future revenues and profitability, our future operating results on a segment basis,
anticipated cash flows, estimates of the size of the market for our products, estimates of the success of other competing technologies that may become
available, and our future success as an independent public company. These forward-looking statements are based on management’s reasonable
expectations and assumptions as of the date of this presentation. Actual results and the outcomes of future events may differ materially from the those
expressed or implied in the forward-looking statements because of a number of risks and uncertainties, including, without limitation, weakening of global
or regional general economic and business conditions that could decrease the demand for our goods and services; our ability to continue technological
innovation to meet the evolving needs of our customers; future financial and operating performance of major customers; unanticipated contract
terminations or customer cancellations of sales; the impact of competitive products and pricing; unexpected changes in raw material supply and markets;
our failure to successfully develop and market new products and optimally manage product life cycles; our inability to protect and enforce intellectual
property rights; our failure to appropriately manage process safety and product stewardship issues; changes in laws and regulations or political conditions;
global economic and capital markets conditions, such as inflation, interest and currency exchange rates; business or supply disruptions; security threats,
such as acts of sabotage, terrorism or war, weather events and natural disaster; increased competition; changes in relationships with our significant
customers and suppliers; unanticipated business disruptions; our ability to predict, identify and interpret changes in consumer preferences and demand;
uncertainty regarding the availability of financing to us in the future and the terms of such financing; disruptions in our information technology networks
and systems; unexpected safety or manufacturing issues; costs and outcomes of litigation or regulatory investigations; the impact of management and
organizational changes; the success of productivity and operational improvement programs; the timing, impact, and other uncertainties of future
acquisitions or divestitures; the impact of changes in environmental, tax or other legislation and regulations in jurisdictions in which Versum Materials and
its affiliates operate; and uncertainties related to our ability to contain costs and realize the anticipated benefits of the completed spin-off from Air
Products. These and other important factors that could cause actual results or events to differ materially from those expressed in our forward-looking
statements are described in our filings with the U.S. Securities and Exchange Commission, including our Form 10 Registration Statement, as amended, and
our periodic filings. Versum Materials disclaims any obligation or undertaking to disseminate any updates or revisions to the outlook and any forward-
looking statements contained in this document to reflect any change in assumptions, beliefs or expectations, or any change in circumstances occurring after
the date of this presentation.
Non-GAAP Financial Measures
This presentation contains certain “Non-GAAP financial measures.” Please refer to the Appendix for definitions of the non-GAAP financial measures used
herein and for a reconciliation of those non-GAAP financial measures to their most comparable GAAP measures.
AGENDA
Business Review: Guillermo Novo, President & CEO
Financial Overview and Guidance: George Bitto, SVP & CFO
Summary: Guillermo Novo, President & CEO
3
Refer to Appendix for reconciliations between GAAP and non-GAAP measures.
VERSUM MATERIALS
INVESTMENT HIGHLIGHTS
Solid growth
High margins
Low capital intensity
Strong cash flow
4
BEST IN CLASS ELECTRONIC MATERIALS COMPANY
Leadership positions in a profitable and
complex semiconductor materials industry
Strong technology, commercial and
operations capabilities
Compelling growth platforms with
sustainable competitive advantage
Strong financial performance and cash flow
generation
Experienced management team with
proven track record
Global infrastructure
BUSINESS REVIEW
6
FISCAL YEAR 2016 IN REVIEW
VERSUM BUSINESS ACHIEVEMENTS
Transitioned Operating Structure to Business from Functional
Delivered Strong Financial Performance
Completed Successful Spin-off
Improved Safety Track Record
Expanded capacity and increased productivity
Initiated Stand-alone Restructuring Activities
Built Robust Innovation Pipeline
7
VERSUM SAFETY PERFORMANCE
EMPLOYEE RECORDABLE FREQUENCY
0.54
0.96
0.77
0.91
0.48
0.42
0.00
0.20
0.40
0.60
0.80
1.00
1.20
FY11 FY12 FY13 FY14 FY15 FY16
FINANCIAL HIGHLIGHTS
FOURTH QUARTER AND FISCAL FULL YEAR 2016 PERFORMANCE AND DRIVERS
(In millions, except percentages) FYQ416 FYQ415 % change
FY16 FY15 % change
Sales 248.4 232.4 7% 970.1 1,009.3 (4)%
Gross Margin 44% 40% 400 bps 44% 39% 500 bps
Operating Income 63.0 47.9 32% 278.9 222.0 26%
Net Income 45.2 43.2 5% 212.0 184.1 15%
Adjusted EBITDA 78.0 69.8 12% 326.9 301.5 8%
Adjusted EBITDA Margin 31% 30% 100 bps 34% 30% 400 bps
Fourth Quarter: Adjusted EBITDA margin of 31%, up 1%
Sales higher due to strong DS&S and AM volumes, offset by lower volumes
in certain PM products
Adjusted EBITDA up due to cost productivity, strong sales and favorable
price/mix
Fiscal Year: Adjusted EBITDA margin of 34%, up 4%
Sales down due to lower DS&S turnkey volumes, product line exits and
currency, partially offset by price/mix
Adjusted EBITDA up on favorable price/mix and cost improvements, offset
by lower volumes
8 AM: Advanced Materials; PM: Process Materials; DS&S: Delivery Systems & Services
NOTES: Based on carveout financials
Refer to Appendix for reconciliations between GAAP and non-GAAP measures.
9
2016 MARKET FUNDAMENTALS
SEMICONDUCTOR TRENDS
Advanced logic focused on start-up of
next generation node (i.e., 10nm)
Robust demand for solid state drives
accelerating VNAND production
Equipment capex from new fabs and
expansion pulled forward for both logic
and VNAND devices
IoT and Automotive applications driving
sustainability of legacy nodes
NEW
CHINA
FABS &
EXPANSI
ONS
INTERNET
OF
THINGS
N10 &
BELOW
ADVANCE
D
LOGIC
MEMORY
Subject FYQ416 FYQ415 % change
FY16 FY15 % change
GDP (CY) n/a n/a n/a n/a n/a 2.5%
MSI (FY) 2730 2591 5.4% 10478 10480 -
Wafer Fab Equip Spend (FY) $9.3 B $8.3 B 11.4% $31.9 B $32.1 B (0.5%)
IoT: Internet of Things; VNAND: Vertical NAND ; MSI: Millions of Square Inches
SOURCE: Semi, Gartner (Q4FY16E), IMF (April 2016) and Versum estimates
Drivers for Innovation and Use
MATERIALS SEGMENT
FOURTH QUARTER AND FISCAL FULL YEAR 2016 PERFORMANCE AND DRIVERS
(In millions, except percentages) FYQ416 FYQ415 % change
FY16 FY15 % change
Sales 192.9 192.8 - % 756.7 743.4 2%
Operating Income 57.3 55.1 4% 252.3 213.7 18%
Adjusted EBITDA 69.1 67.6 2% 296.9 262.8 13%
Adjusted EBITDA Margin 35.8% 35.1% 70 bps 39.2% 35.4% 380 bps
In weaker industry demand environment, solid
performance driven largely by memory
AM strong volumes from legacy and new node
participation
PM lower volumes from exited businesses and lower
spot sales
Positive price/mix and Improved operational
productivity offsetting higher stand-up costs
10
NOTES: Based on carveout financials
Full Year Overview:
Refer to Appendix for reconciliations between GAAP and non-GAAP measures.
DELIVERY SYSTEMS & SERVICES
FOURTH QUARTER AND FISCAL FULL YEAR 2016 PERFORMANCE AND DRIVERS
(In millions, except
percentages) FYQ416 FYQ415 % change
FY16 FY15 % change
Sales 55.5 39.6 40% 213.4 265.9 (20)%
Operating Income 13.3 4.9 171% 50.8 49.1 3%
Adjusted EBITDA 13.9 7.1 96% 52.9 57.4 (8)%
Adjusted EBITDA Margin 25.0% 17.9% 710 bps 24.8% 21.6% 320 bps
11
NOTES: Based on carveout financials
Reduced level of lower margin turnkey projects
and product line exists
Strong equipment and services volumes at
foundry customers and positive product mix
Improved operating cost performance
Accelerating industry wafer equipment spending
from technology, fab expansions and new fabs
Full Year Overview:
Refer to Appendix for reconciliations between GAAP and non-GAAP measures.
FINANCIAL UPDATE
REPORTED INCOME STATEMENT
FOURTH QUARTER AND FISCAL FULL YEAR 2016
13
(In Millions) Q4 FY16 Q4 FY15 % change FY16 FY15 % change
Sales 248.4 232.4 7% 970.1 1,009.3 (4)%
Cost of Sales 138.7 139.7 (1)% 539.5 616.5 (12)%
Selling and administrative 33.2 26.6 25% 109.8 109.6 - %
Research and development 11.5 11.7 (2)% 43.9 40.7 8%
Operating Income 63.0 47.9 32% 278.9 222.0 26%
Separation, restructuring and cost reduction actions 2.5 7.1 (65)% 0.9 21.6 (96)%
Adjusted EBITDA 78.0 69.8 12% 326.9 301.5 8%
Net Income Attributable to Versum 45.2 43.2 5% 212.0 184.1 15%
NOTES: Based on carveout financials
Sales
Versum
Total
FYQ416
Versum
Total
FY16
Materials
FYQ416
Materials
FY16
Delivery Systems
and Services
FYQ416
Delivery Systems
and Services
FY16
Volume 7% (5)% -% -% 42% (19)%
Price/Mix -% 3% (1)% 3% —% —%
Currency -% (2)% 1% (1)% (2)% (1)%
Total Change 7% (4)% -% 2% (40)% (20)%
Major Factors Impacting Sales
Refer to Appendix for reconciliations between GAAP and non-GAAP measures.
ESTIMATED CASH FLOW NET DEBT TO ADJ EBITDA
(In millions, except debt multiple) FY2016
Debt
Term Loan 575
Senior Notes 425
Total Debt 1,000
Less Cash 106
Net Debt 894
2016 ADJ EBITDA 327
Net Debt/Adjusted EBITDA (x) 2.7x
(In millions) FY2016
Total Adjusted EBITDA $327
Working Capital (7)
Estimated Cash Taxes (54)
Cash Interest & Principal Repayment (49)
Less Working Capital, Cash Taxes and Interest $217
Capital Expenditures (36)
Cash Flow $181
CASH GENERATION AND LEVERAGE
FISCAL YEAR 2016 BASIS
14
NOTES: FY16 EBITDA and capital spending based on carve-out unaudited financials. Working capital is estimated change in accounts receivable,
inventory and accounts payables for FY16. Interest and principal repayment reflect forward estimates on $1B debt financing closed September 30,
2016. Estimated cash taxes based on 23% cash tax rate, which management believes will be consistent with current tax position on a stand-alone
basis.
Refer to Appendix for reconciliations between GAAP and non-GAAP measures.
CALENDAR YEAR % CHANGE
GLOBAL GDP 2.7% – 3.0%
GLOBAL MSI 2% – 6%
WAFER FAB EQUIPMENT 5% – 9%
SOURCE: Linx/Hilltop Economics, Gartner, Versum estimates
FINANCIAL OUTLOOK
NOTES: 2016 Actual reflects carveout financials and includes $3 million of Adjusted EBITDA for businesses remaining with APD. 2017 guidance includes
approximately $10 million of transition costs; Adj EBITDA excludes estimated one time restructuring costs of $20 - $25mm. 2017 D&A estimate of $50MM; cash
and book tax rate in range of 20 – 25%, capital spending includes $35-40 of stand-up capital
2017 FISCAL YEAR FINANCIAL OUTLOOK
15
MARKET DRIVERS:
Continued strong VNAND demand
Acceleration of advanced
logic devices
Logic and memory drive continued
new fab expansions
BUSINESS DRIVERS:
Volume growth from new products,
capacity expansions and increased
equipment sales
Continued cost optimization
Maintain margins
ASSUMPTIONS FOR GROWTH OUTLOOK
Reconciliation of net income to our 2017 outlook for adjusted EBITDA is not
provided. See Appendix for more information.
(In millions) FISCAL 2016 ACTUAL 2017 OUTLOOK
SALES $970 $990 – $1,050
ADJ EBITDA $327 $330 – $350
Capital Expenditures $36 $75 – $85
SUMMARY
17
SEMICONDUCTOR MARKET OUTLOOK
2017 TREND EXPECTATIONS
Advanced logic benefits as 10nm moves from
qualification into production
VNAND production accelerates as additional
flash manufacturers ramp
DRAM shows signs of recovery
Equipment capex remains robust as leading edge
logic, VNAND and China investments continue
IoT and automotive applications drive demand
for legacy nodes
5 Strongest End Markets
• Smartphones
• Servers
• PC (returns to growth)
• Solid State Drives
• IoT
VNAND: Vertical NAND; DRAM: Dynamic Random Access Memory; IoT: Internet of Things;
MCU: Micro Controller Units
Unit Shipments 2016E 2017E 2018E
Smartphones 6.2% 6.6% 5.3%
Servers 3.2% 4.1% 4.1%
PCs (8.2%) 1.8% 2.4%
Solid-State Drives 34% 25% 21%
IoT (MCU) 4.5% 5.0% 7.1%
NOTE: Gartner and Versum estimates; top 5 products shipments represent ~50% of
semi consumption
NEW
CHINA
FABS &
EXPANSI
ONS
INTERNE
T
OF
THINGS
N10 &
BELOW
ADVANC
ED
LOGIC
MEMOR
Y
Drivers for Innovation and Use
18
2017 PRIORITIES
DRIVING OPERATIONAL EXCELLENCE AND FINANCIAL EXECUTION AS A STAND-ALONE COMPANY
APD TSA: Air Products and Chemicals Transition Service Agreements; VSM: Versum
Stand-Alone Activities
Transition Fully to Stand-Alone
• Move from APD TSA to VSM
stand-alone managed cost
structure
• Robust Reporting and
Governance processes
• Investor Engagement
• Implement enterprise
resource planning (ERP)
system
Deliver on 2017 Fiscal Year
Financial Targets
Drive Innovation to capture
market share on next
generation nodes
Strengthen front line
commercial and technical
capabilities
Optimize Cash Flow generation
to fund value enhancing
organic and inorganic
investments
Complete debottlenecking
and capacity expansions in
Materials segment
Continue to optimize our
global supply network
Increase operating
productivity and yield
Expand our Quality and
Reliability capabilities
Productivity Growth
Customer Focus – Strengthened capabilities to collaborate and create value for customers
Accountability – Increased alignment of compensation to direct business level performance
Culture
VERSUM MATERIALS
INVESTMENT HIGHLIGHTS
Solid growth
High margins
Low capital intensity
Strong cash flow
19
BEST IN CLASS ELECTRONIC MATERIALS COMPANY
Leadership positions in a profitable and
complex semiconductor materials industry
Strong technology, commercial and
operations capabilities
Compelling growth platforms with
sustainable competitive advantage
Strong financial performance and cash flow
generation
Experienced management team with
proven track record
Global infrastructure
APPENDICES
21
REVENUES BY BUSINESS & REGION
FISCAL YEARS 2014 - 2016
Year Ended September 30,
2016 2015 2014
Sales to External Customers (by Origin) (In millions)
United States $ 349.4
$ 361.3
$ 330.3
Taiwan 230.8
236.3
228.0
South Korea 217.2
220.3
184.3
China 53.8
70.9
76.9
Europe 57.8
69.2
70.3
Asia, excluding China, Taiwan, and South Korea 61.1
51.3
52.7
Total $ 970.1
$ 1,009.3
$ 942.5
Geographic Information
Year Ended September 30,
2016 2015 2014
(In millions)
Materials
Process Materials $ 387.4
$ 387.3
$ 321.8
Advanced Materials 369.3
356.1
318.2
DS&S
Equipment and Installations 150.8
208.3
244.1
Site Services 62.6
57.6
58.4
Total $ 970.1
$ 1,009.3
$ 942.5
Sales by Product Group
22
CONSOLIDATED INCOME STATEMENT
Q1 – Q4 FISCAL YEAR 2016
For the Quarter Ended
December 31,
2015 March 31, 2016 June 30, 2016
September 30,
2016 Total
(In millions)
Sales $ 245.5 $ 233.5 $ 242.7 $ 248.4 $ 970.1
Cost of sales 132.4 132.5 135.9 138.7 539.5
Selling and administrative 23.6 25.7 27.3 33.2 109.8
Research and development 10.9 10.2 11.3 11.5 43.9
Business separation, restructuring and cost reduction
actions (0.9 ) (1.8 ) 1.1 2.5 0.9
Other income (expense), net 1.1 1.0 0.3 0.5 2.9
Operating Income 80.6 67.9 67.4 63.0 278.9
Equity affiliates’ income 0.2 — — — 0.2
Interest expense — — — 0.4 0.4
Income Before Taxes 80.8 67.9 67.4 62.6 278.7
Income tax provision 13.4 12.2 17.6 15.6 58.8
Net Income 67.4 55.7 49.8 47.0 219.9
Less: Net Income Attributable to Non-controlling
Interests 2.2 1.9 2.0 1.8 7.9
Net Income Attributable to Versum $ 65.2 $ 53.8 $ 47.8 $ 45.2 $ 212.0
23
CONSOLIDATED AND SEGMENT SALES MAJOR FACTORS
THREE MONTHS AND FULL FISCAL YEAR 2015 AND 2016
Three Months
Ended September
30, 2016
Year Ended
September 30, 2016
Sales
Underlying business
Volume 7 % (5 )%
Price/Mix — % 3 %
Currency — % (2 )%
Versum Materials Sales Change 7 % (4 )%
Three Months
Ended September
30, 2016
Year Ended
September 30, 2016
Sales
Underlying business
Volume — % — %
Price/Mix — % 3 %
Currency 1 % (1 )%
Materials Sales Change 1 % 2 %
Three Months
Ended September
30, 2016
Year Ended
September 30,
2016
Sales
Underlying business
Volume 42 % (19 )%
Price/Mix — % — %
Currency (2 )% (1 )%
DS&S Sales Change 40 % (20 )%
Versum Materials Total
Materials Segment
DS&S Segment
RECONCILIATIONS
Non-GAAP Financial Measures
This presentation includes “non-GAAP financial measures,” including Adjusted EBITDA, Segment Adjusted EBITDA, Adjusted EBITDA
margin, Segment Adjusted EBITDA margin, net debt and estimated cash flow. We define Adjusted EBITDA as net income excluding
certain disclosed items which we do not believe to be indicative of underlying business trends, including interest expense, income tax
provision, depreciation and amortization expense, non-controlling interests, and business separation, restructuring and cost reduction
actions. Versum Materials defines Segment Adjusted EBITDA as segment operating income excluding segment depreciation and
amortization expense, and equity affiliates’ income. Adjusted EBITDA margin and Segment Adjusted EBITDA margin are calculated by
dividing Adjusted EBITDA and Segment Adjusted EBITDA, respectively, by sales. In the Appendix to this presentation, Versum Materials
has provided reconciliations of net income to Adjusted EBITDA and of segment operating income (loss) to Segment Adjusted EBITDA,
in each case the most directly comparable GAAP financial measure. We encourage investors to read these reconciliations.
Our presentation of estimated cash flow is defined as Adjusted EBITDA, less capital expenditures, working capital, cash taxes and cash
Interest and principal repayment. Management believes that estimated cash flow is meaningful to investors because it is an indication
of the strength of the company and its ability to generate cash. However, a limitation of estimated cash flow is that it does not
represent the total increase or decrease in cash during the period. Estimated cash flow is not intended to be an alternative to cash
flows from operating activities as a measure of liquidity. In addition, the term “cash flow” does not have a standardized meaning.
Therefore, other companies may use the same or a similarly named measure but exclude different items or use different
computations, which may provide investors a comparable view of our performance in relation to other companies.
RECONCILIATIONS
Non-GAAP Financial Measures (continued)
The presentation of these non-GAAP financial measures is intended to enhance the usefulness of financial information by providing measures which
management uses internally to evaluate operating performance. We use these non-GAAP measures to assess our operating performance by excluding
certain disclosed items that we believe are not representative of our underlying business. We use Adjusted EBITDA to calculate performance-based cash
bonuses and determine whether certain performance-based options and restricted stock units vest (as such bonuses, options and restricted stock units
are tied to Adjusted EBITDA). We use Segment Adjusted EBITDA as the primary measure used by our chief operating decision maker to evaluate the
ongoing performance of our business segments. We believe non-GAAP financial measures provide investors with meaningful information to understand
our underlying operating results and to analyze financial and business trends. These non-GAAP financial measures should not be viewed in isolation, are
not a substitute for GAAP measures, and have limitations which include but are not limited to the following: (a) Adjusted EBITDA excludes expenses
related to business separation, restructuring and cost reduction actions which we do not consider to be representative of our underlying business
operations, however, these disclosed items represent costs to Versum; (b) Adjusted EBITDA is not intended to be a measure for management’s
discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements; (c) though
not business operating costs, interest expense and income tax provision represent ongoing costs of Versum; (d) depreciation, amortization, and
impairment charges represent the wear and tear or reduction in value of the plant, equipment, and intangible assets which permit us to manufacture
and market our products; and (e) other companies may define non-GAAP measures differently than we do, limiting their usefulness as comparative
measures. A reader may find any one or all of these items important in evaluating our performance. Management compensates for the limitations of
using non-GAAP financial measures by using them only to supplement our GAAP results and to provide a more complete understanding of the factors
and trends affecting our business. In evaluating these non-GAAP financial measures, the reader should be aware that we may incur expenses similar to
those eliminated in this presentation in the future.
A reconciliation of net income to Adjusted EBITDA as forecasted for 2017 is not provided. Versum Materials does not forecast net income as it cannot,
without unreasonable effort, estimate or predict with certainty various components of net income. These components include additional costs
associated with the separation from Air Products, further restructuring and other income or charges incurred in 2017 as well as the related tax impacts
of these items. Additionally, discrete tax items could drive variability in our forecasted effective tax rate. All of these components could significantly
impact net income. Further, in the future, other items with similar characteristics to those currently included in Adjusted EBITDA that have a similar
impact on comparability of periods, and which are not known at this time, may exist and impact Adjusted EBITDA.
REPORTED NET INCOME TO ADJUSTED EBITDA
FOURTH QUARTER AND FISCAL FULL YEAR
26
Three Months Ended September 30, Year Ended September 30,
2016 2015 % Change 2016 2015 % Change
(In millions, except percentages)
Net Income Attributable to Versum $ 45.2 $ 43.2 5 % $ 212.0 $ 184.1 15 %
Add: Interest expense 0.4 — 100 % 0.4 0.1 300 %
Add: Income tax provision 15.6 3.6 333 % 58.8 31.7 85 %
Add: Depreciation and amortization 12.5 14.5 (14) % 46.9 56.9 (18) %
Add: Non-controlling interests 1.8 1.4 29 % 7.9 7.1 11 %
Add: Business separation, restructuring and cost
reduction actions 2.5 7.1 (65) % 0.9 21.6 (96) %
Adjusted EBITDA $ 78.0 $ 69.8 12 % $ 326.9 $ 301.5 8 %
Net Income Margin 18.2 % 18.6 % 21.9 % 18.2 %
Adjusted EBITDA Margin 31.4 % 30.0 % 33.7 % 29.9 %
27
SALES BY SEGMENT
FISCAL QUARTERS FOR 2015 AND 2016
SEGMENT OPERATING INCOME TO ADJUSTED EBITDA
QUARTER AND FISCAL FULL YEAR
28
(A) Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by sales.
For the Quarter Ended For the Quarter Ended
December
31, 2015
March 31,
2016
June 30,
2016
September
30, 2016 Total
December
31, 2014
March 31,
2015
June 30,
2015
September
30, 2015 Total
(In millions, except percentages) (In millions, except percentages)
Materials
Operating income $ 68.5 $ 60.1 $ 66.4 $ 57.3 $ 252.3 $ 42.7 $ 53.0 $ 62.9 $ 55.1 $ 213.7
Add: Depreciation and amortization 10.9 10.5 11.2 11.8 44.4 13.4 11.3 11.2 12.2 48.1
Add: Equity affiliates’ income 0.2 — — — 0.2 0.4 0.3 — 0.3 1.0
Segment Adjusted EBITDA $ 79.6 $ 70.6 $ 77.6 $ 69.1 $ 296.9 $ 56.5 $ 64.6 $ 74.1 $ 67.6 $ 262.8
Segment Adjusted EBITDA margin(A) 42.2 % 38.9 % 40.1 % 35.8 % 39.2 % 32.2 % 36.1 % 37.7 % 35.1 % 35.4 %
Delivery Systems and Services
Operating income $ 15.9 $ 9.7 $ 11.9 $ 13.3 $ 50.8 $ 15.4 $ 14.7 $ 14.1 $ 4.9 $ 49.1
Add: Depreciation and amortization 0.5 0.5 0.5 0.6 2.1 1.8 2.1 2.2 2.2 8.3
Add: Equity affiliates’ income — — — — — — — — — —
Segment Adjusted EBITDA $ 16.4 $ 10.2 $ 12.4 $ 13.9 $ 52.9 $ 17.2 $ 16.8 $ 16.3 $ 7.1 $ 57.4
Segment Adjusted EBITDA margin(A) 28.9 % 19.6 % 25.2 % 25.0 % 24.8 % 21.6 % 21.0 % 24.4 % 17.9 % 21.6 %
Corporate
Operating loss $ (4.7 ) $ (3.7 ) $ (9.8 ) $ (5.1 ) $ (23.3 ) $ (4.4 ) $ (4.5 ) $ (5.3 ) $ (5.0 ) $ (19.2 )
Add: Depreciation and amortization 0.1 0.1 0.1 0.1 0.4 0.1 0.1 0.2 0.1 0.5
Add: Equity affiliates’ income — — — — — — — — — —
Segment Adjusted EBITDA $ (4.6 ) $ (3.6 ) $ (9.7 ) $ (5.0 ) $ (22.9 ) $ (4.3 ) $ (4.4 ) $ (5.1 ) $ (4.9 ) $ (18.7 )
Total Versum Adjusted EBITDA $ 91.4 $ 77.2 $ 80.3 $ 78.0 $ 326.9 $ 69.4 $ 77.0 $ 85.3 $ 69.8 $ 301.5
