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Why OMNOVA Solutions?
A Look Forward
1st Quarter 2017
Investor Presentation
Global Innovator of Performance-Enhancing
Chemistries and Surfaces
Cautionary Statements
2
Forward-Looking Statements
This presentation includes descriptions of OMNOVA's current business, operations, assets and other matters affecting the Company as well as "forward-looking statements" as defined by federal
securities laws. All forward-looking statements by the Company, including verbal statements, are intended to qualify for the protections afforded forward-looking statements under the Private Securities
Litigation Reform Act of 1995. Forward-looking statements reflect management's current expectation, judgment, belief, assumption, estimate or forecast about future events, circumstances or results
and may address business conditions and prospects, strategy, capital structure, debt and cash levels, sales, profits, earnings, markets, products, technology, operations, customers, raw materials,
claims and litigation, financial condition, and accounting policies among other matters. Words such as, but not limited to, "will," "may," "should," "projects," "forecasts," "seeks," "believes," "expects,"
"anticipates," "estimates," "intends," "plans," "targets," "optimistic," "likely," "would," "could," "committed," and similar expressions or phrases identify forward-looking statements.
All descriptions of OMNOVA's current business, operations and assets, as well as all forward-looking statements, involve risks and uncertainties. Many risks and uncertainties are inherent in business
generally. Other risks and uncertainties are more specific to the Company's businesses and strategy, or to any new businesses the Company may enter into or acquire. There also may be risks and
uncertainties not currently known to the Company. The occurrence of any such risks and uncertainties and the impact of such occurrences is often not predictable or within the Company's control. Such
impacts could adversely affect the Company's business, operations or assets as well as the Company's results and the value of your investment in the Company. In some cases, such impact could be
material. Certain risks and uncertainties facing the Company are described below or in the Company's Quarterly Report on Form 10-Q and Annual Report and the value of your investment in the
Company on Form 10-K.
All written and verbal descriptions of OMNOVA's current business, operations and assets and all forward-looking statements attributable to the Company or any person acting on the Company's behalf
are expressly qualified in their entirety by the risks, uncertainties, and cautionary statements contained or referenced herein. All such descriptions and any forward-looking statement speak only as of
the date on which such description or statement is made, and the Company undertakes no obligation, and specifically declines any obligation, other than that imposed by law, to publicly update or
revise any such description or forward-looking statements whether as a result of new information, future events or otherwise.
The Company's actual results and the value of your investment in OMNOVA may differ, perhaps materially, from expectations due to a number of risks and uncertainties including, but not limited to: (1)
the Company's exposure to general economic, business, and industry conditions; (2) the risk of doing business in foreign countries and markets; (3) changes in raw material prices and availability; (4)
the highly competitive markets the Company serves; (5) extraordinary events such as natural disasters, political disruptions, terrorist attacks and acts of war; (6) extensive and increasing United States
and international governmental regulation, including environmental, health and safety regulations; (7) the Company's failure to protect its intellectual property or defend itself from intellectual property
claims; (8) claims and litigation; (9) changes in accounting policies, standards, and interpretations; (10) the actions of activist shareholders; (11) the Company's inability to achieve, or achieve in a timely
manner, the objectives and benefits of cost reduction initiatives; (12) the Company's ability to develop and commercialize new products at competitive prices; (13) the concentration of OMNOVA's
Performance Chemicals business and certain Engineered Surfaces market segments, among several large customers; (14) the creditworthiness of the Company's customers; (15) the failure of a joint
venture partner to meet its commitments; (16) the Company's ability to identify and complete strategic transactions; (17) the Company's ability to successfully integrate acquired companies; (18)
unanticipated capital expenditures; (19) risks associated with the use, production, storage, and transportation of chemicals; (20) information system failures and breaches in security; (21) continued
increases in healthcare costs; (22) the Company's ability to retain or attract key employees; (23) the Company's ability to renew collective bargaining agreements with employees on acceptable terms
and the risk of work stoppages; (24) the Company's contribution obligations under its U.S. pension plan; (25) the Company's reliance on foreign financial institutions to hold some of its funds; (26) the
effect of goodwill impairment charges; (27) the volatility in the market price of the Company's common shares; (28) the Company's substantial debt position; (29) the decision to incur additional debt;
(30) the operational and financial restrictions contained in the Company's indenture; (31) a default under the Company's term loan or revolving credit facility; and (32) the Company's ability to generate
sufficient cash to service its outstanding debt.
OMNOVA Solutions provides greater detail regarding these risks and uncertainties in its 2016 Form 10-K and subsequent filings, which are available online at www.omnova.com and www.sec.gov.
OMNOVA Solutions Inc. is a global innovator of performance-enhancing chemistries and surfaces used in products for a variety of commercial, industrial and residential applications. As a strategic
business-to-business supplier, OMNOVA provides The Science in Better Brands, with emulsion polymers, specialty chemicals, and functional and decorative surfaces that deliver critical performance
attributes to top brand-name, end-use products sold around the world. OMNOVA's sales for the fiscal year ended November 30, 2016, were $760 million. The Company has a global workforce of
approximately 1,950. Visit OMNOVA Solutions on the internet at www.omnova.com.
Non-GAAP Financial Measures
This presentation includes certain non-GAAP financial measures as defined by the Securities and Exchange Commission, such as Adjusted Segment Operating Profit, Adjusted Segment
EBITDA, Adjusted Income from Continuing Operations, Adjusted Diluted Earnings Per Share from Continuing Operations, Adjusted Consolidated EBITDA and Net Leverage Ratio. For a
reconciliation to the most directly comparable GAAP financial measures, refer to the Appendix.
3
4
5
6
7
OMNOVA Solutions
Global innovator of performance enhancing chemistries and surfaces
8
$759M*
SALES
26%
Performance Chemicals
Latex Binders │ Acrylics │ Resins │Hollow
Plastic Pigments │ Fluorosurfactants │
Opacifiers │ Bio-Based Polymers
Engineered Surfaces
Coated Fabrics │ Specialty Laminates │
Performance Films
*OMNOVA consolidated sales for TTM as of February 28, 2017.
OMNOVA Solutions is changing segments by Q2 2017 to better reflect
specialty and mature market strategies
8
$212M
72%
$547M
Operating in two business segments
Well-Positioned for Strong Continued Earnings
Momentum and Cash Generation
9
Near-term (2016-2017) drivers
Medium to longer term (2016-2018+) drivers
reversed trend in specialty
businesses
$0
$50
$100
$150
$200
2010 Adjusted
EBITDA
Paper / carpet
latex erosion
Growth in
specialty
businesses
2014 Adjusted
EBITDA
Growth in
paper / carpet
Margin
expansion via
cost reduction /
pricing
Growth in
specialty
businesses
Above market
sales growth
Higher margins
from improved
mix / specialty
focus
New product
development
Medium term
potential
A
d
justed
E
B
IT
D
A
(
$m
)
Goals Reflect Continuing Transition To
Specialty Focus
Adjusted Segment
Operating Margin*
6.9%
8.9%
Mid
Teens
*Non-GAAP adjusted values, GAAP reconciliation in the appendix. Excludes corporate
expense.
10
2014 2015 Goal
Growth:
2X Underlying Specialty Markets
› Specialty Volume
Growth
› High Margin New
Product Introductions
› Commercial
Excellence
› Cost Reductions
› Value Based Pricing
› Mix
Market Spectrum
Small, Low Price, Local
Chemical Companies
↓
Le
vel
o
f
T
e
c
hnolog
y
Willingness to Collaborate and
Customize
HighLow
High
↑
Large Global, Vertically
Integrated Chemical
Companies
Market Opportunity
OMNOVA
↓
10.6%
2016
Our Value-Creating Strategic Priorities
How we'll get there
11
"One OMNOVA"
Reduced complexity and drives consistency across global enterprise
OPERATIONAL
FINANCIAL
Accelerate
Growth
In Specialty
Businesses
Expand
Margins,
Generate Cash
In Mature
Businesses
Drive
Improved
Return On
Investment
Deploy a
Balanced
Capital
Allocation
Policy
Accelerate Growth In Specialty Businesses
Grow specialty greater than underlying markets
12
Targeting Specialty
Growth Markets
› Higher growth, higher
margin businesses
› Strong position from
which to build…significant
opportunities to grow
share
› Footprint actions enhance
specialty focus
Strengthening
Commercial
Excellence
› Sales, marketing and
product development
working as one
› Cross-selling
› Value based pricing
› More aggressive strategic
marketing plans
› Stronger key account
value added selling
Accelerate
Growth
In Specialty
Businesses
Strengthening
Leadership &
Capabilities
› Enhanced organization in
place end of 2015
Driving Innovation
Excellence
› Leverage global footprint
› Reinvigorate innovation
pipeline to specialty focus
and higher margins
› Willingness and ability to
tailor solutions for target
markets
Deploy a
Balanced
Capital
Allocation
Policy
Drive
Improved
Return On
Investment
Expand
Margins,
Generate Cash
In Mature
Businesses
Explore Inorganic
Growth
› Strategic alliances
› Selective specialty M&A
Specialty Growth: Targeted Markets
Targeting robust markets with demand for high performance, high margin products
13
% = Estimated Market Growth Rate
*Market data based on internal estimates and OMNOVA’s place in the value chain.
PC ES PC PC/ES PC PC E
Common characteristics: higher margin, large and growing markets, customer need
for differentiation, strong OMNOVA niche position with ability to grow
Coatings Adhesives Sealants Elastomers Laminates Nonwovens Oil & Gas
› Masonry
› Intumescent (fire
resistant)
› Direct-to-metal
› Primers
› Odor and stain
blocking
› Wood treatment
$25.0B
Market
Potential*
3 – 4%/yr
› Tapes
› Release coatings
› Adhesives
› Construction
binders
› Roofing
>$20.0B
Market
Potential*
4 - 5yr%/yr
› Caulking
› Casting
› Cement
› Gaskets
› Foam sealants
› Concrete
>$5.0B
Market
Potential*
3 – 4%/yr
› Transportation
› Industrial
› Consumer
thermoplastic
products
>$10.0B
Market
Potential*
3 - 5%/yr
› Retail display
› Cabinets
› Food service
› Kitchen and bath
› Recreational
vehicles
› Flooring
› Healthcare
› Commercial
furniture
$4.5B
Market
Potential*
2 - 3%/yr
› Diapers
› Adult incontinence
› Healthcare
› Wipes
› Transportation
› Filtration
$25.0B
Market
Potential*
3 - 5%/yr
› Drilling
› Cementing
› Fracking
$5.5B
Market
Potential*
3 - 5%/yr
C.A.S.E.
Diversifying Chemistries & Geographies
Increased access to specialty markets
Other
Chemistries
SB Latex
Asia
Europe
N. America
Diversifying
Chemistries & Markets
Total OMNOVA Global
Expansion
14
Total Company sales Total Company sales
20%
80%
73%
27%
Pre-2010 2016
11%
87%
2%
11%
87%
17%
23%
60%
2016Pre-2010
15
Market & Customer Driven Innovation Portfolio
Transforming the portfolio to be a leading provider of Sustainable, Greener,
SMARTer innovative solutions
Targeting vitality index >27% at specialty margins
Voice of the
customer
Sustainable
Solutions
SMART
technologies
Disruptive
innovation
› Polymer for Garage Floor Coatings
› Coating Resin for Direct
Application to Metal, Ceramic, PVC
and more
› Zero VOC Coating Resin for Direct
to Metal
› Release Coating for Paper and
Film
› Hydrophobic Release Coating for
Paper, Film and Foil
› Next Gen Fluid Loss Control Additive
› New Line of Cement Additives
› All-Acrylic Low-Exudation Binder
› New Binder Resins for Exterior Wood
Applications
› Next Generation Products for
Nonwovens for Personal Hygiene.
Strategic Alliances and M&A to Accelerate Specialty
Growth
16
STRATEGIC ALLIANCES M&A
Close-In
Emulsion Polymers
• N.A. SB consolidation
• Specialty acrylics
Adjacencies
Technology
Operations
& Supply
Chain
Commercial
• Joint development
agreements
• License technology
• Geographic swaps /
tolling
• License cost-saving
production technology
• Use contract
manufacturing
• Manufacturing JVs
• License 3rd party
technology
• Full function JVs
Benefits
• Profitable growth &
lower risk profile
• Accelerates
innovation
• Expands portfolio
• Low investment for
geographic
expansion New Polymers: Selected
Additives:
Target Markets
C.A.S.E., Non-wovens, Oil & Gas
Strengthening
Customer
Relationships
› Capture growth in carpet
and non-carpet flooring
› Greater focus on higher
growth specialty
paper/packaging
segments
› Value-based pricing
Expand Margins, Increase Cash Generation In
Mature Businesses
17
Lowering Our Cost
Base
› Operational excellence
› Realigning manufacturing
› Improving SG&A
effectiveness & efficiency
Improving Ability to
Serve
› New GM & management
team
› Targeted technology
offerings
Expand
Margins,
Generate Cash
In Mature
Businesses
Deploy a
Balanced
Capital
Allocation
Policy
Accelerate
Growth
In Specialty
Businesses
Drive
Improved
Return On
Investment
18
Manufacturing Realignment and SG&A Restructuring
Savings on track
~300M lbs
N. America SB capacity
reduction
>90%
N. America SB capacity
utilization (previously 62%)
Realigned Manufacturing
Footprint
through facility closures, capacity reductions, and
manufacturing consolidations
Restructured SG&A
Company-Wide
2015 - reorganized regional and commercial structure
2017 – reorganized corporate support functions
$17M - $20M run rate
In expected annual
operating savings by YE
2017
Drive Improved Return On Investment
Driving to returns in excess of cost of capital
19
Exploit Operational
Leverage
› ROIC in 2017 incentives
› Increased return on innovation
› Increased capacity utilization
› Footprint optimization
› Repurposing to specialty
› Fixed cost management
› One OMNOVA: streamline
processes
› Expand margins through mix
and value pricing
Managing Working
Capital
› Significant reduction of
working capital days by 2019
› More robust SOIP process
› Incentive alignment
Drive
Improved
Return On
Investment
Deploy a
Balanced
Capital
Allocation
Policy
Expand
Margins,
Generate Cash
In Mature
Businesses
Accelerate
Growth
In Specialty
Businesses
Deploy a Balanced Capital Allocation Policy
Strategy
20
Strategic Growth
Investments
› Strategic alliances and
bolt-on M&A to support
specialty businesses
› Funded by growth in
EBITDA and cash flow
Disciplined
Approach to
Capital Spending
› Focused on key growth
markets
De-Levering
Business
› Targeting 2.0x total net
leverage through cycle
Drive
Improved
Return On
Investment
Deploy a
Balanced
Capital
Allocation
Policy
Expand
Margins,
Generate Cash
In Mature
Businesses
Accelerate
Growth
In Specialty
Businesses
21
Consistent deleveraging since acquisition
Record of Cash Generation and De-Leveraging
Refinancing completed in Q3 2016
Reduced gross debt by ~$90M since 2011
Disciplined balance sheet management
› Redeemed $50M of bonds in November 2014 and
› November 2015 respectively with excess cash
Strong cash conversion driven by:
› Improved earnings
› Low maintenance capex requirement
› Working capital management
› No US cash taxes in near term (Federal N.O.L. $92.0M)
OMNOVA Net Adjusted Leverage *
3.8 x
3.9 x
3.5 x
3.3
3.4
3.5
3.6
3.7
3.8
3.9
4
Nov 2014 Nov 2015 Nov 2016
* See Appendix 4
Capital Structure / Liquidity / Net Leverage
Liquidity
Revolver $70
• Balance Drawn
• Letters of Credit
$0
$0
Remaining Capacity $70
Cash** $71
Total Liquidity $141
22
As of February 28, 2017
(In millions)
Weighted average debt cost ~ 5.2% / sufficient liquidity
Net Leverage Ratio
Total Net Debt $296
LTM EBITDA $82
Net Leverage Ratio* 3.6x
DEBT = $365*
$17
$348
Foreign Debt & Other
• Capital lease
• Letters of credit
Term Loan B
(excluding OID 3.2M)
• 2023 maturity
• L+425; floor 1.00%
• Total Net Leverage Ratio
Covenant
.
*Non-GAAP adjusted values, GAAP reconciliation in the appendix.
23
History of Taking Decisive Action
Strategic portfolio actions to drive shareholder value
Proactive actions partially offset headwinds in performance materials businesses
• Access to fast-
growing Asian
markets
• Upgrade
capabilities
• Low-cost
manufacturing
• Expand global
manufacturing
and technology
footprint
• Accelerate
market growth
• Broaden
capabilities in
specialty growth
applications
• Serves coatings
and oil & gas
markets
• Exit structurally
impaired market
• Close
Columbus, MS
facility
• Specialty latex
for fast growing
Asian
applications
• Manufacturing on
three continents
to serve global
and regional
customers
• Non-strategic
Business
• Accelerate growth in
specialty businesses
• Expand margins,
generate cash in
performance materials
businesses
• Drive improved return
on investment
• Deploy a balanced
capital allocation policy
• Repurpose footprint
in a capital efficient
manner to drive
>90% capacity
utilization
• Closing of Akron,
OH emulsion facility
• Closing of Calhoun,
GA SB latex facility
and excess SB
capacity in Moga-
dore, OH
• Sold Indian manu-
facturing assets
Spinoff from
GenCorp
Sold Commercial
Roofing Division
100% Ownership
Engineered
Surfaces
China/Thailand
Acquired
ELIOKEM Specialty
Chemicals
Sold Global
Wallcovering
Opened Chemical
Plant in Caojing,
China
1999 2006 2008 2010 2011 2012
2016
-18
Path to Profitable
Growth and
Margin Expansion
2014
-16
Manufacturing
Footprint
Realignment
› Exciting opportunities to grow higher margin Specialty businesses
› Strengthened innovation and commercial excellence process
› Positive momentum in margin expansion, earnings growth and cash generation
› Significantly lowered cost base and reconfigured manufacturing footprint through
operational excellence
› Diverse technologies and global footprint enhance Specialty businesses
› "One OMNOVA" implementation to drive efficiencies
› Engaged team focused on growth
24
Why OMNOVA Solutions?
On track to achieve our future state
OMNOVA Values: Agility Safety Integrity Accountability
25
Appendix
SB Raw Material Costs and Performance Features
Contribute to Greater Cost-in-Use Advantage
SB latex maintains an advantaged position
26
0
25
50
75
100
125
150
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Ce
n
ts
p
e
r l
b
.
Comparison of N.A. raw material in emulsion polymer systems 2000-2018
100% Acrylic Styrene-Acrylic Styrene-Butadiene Vinyl-Acrylic Vinyl-Acetate-Ethylene
Total Company
Sales by End Market
27
Refurbishment
& new
construction
40%
Paper and
packaging
15%
Transportation
19%
Industrial /
Other
12%
Personal
hygiene
8%
Oilfield
6%
Note: Financials breakdown as of 2016 FYE. Financials inclusive of Indian rubber business sold in Q1 2016.
Engineered Surfaces
Industrial /
Other
17%
Transportation
34%Residential
housing
25%
Commercial
buildings
24%
Refurbishment
& new
construction
37%
Paper &
packaging
21%
Transportation
13%
Industrial
10%
Personal
hygiene
11%
Oilfield
8%
Performance Chemicals
Broad and diverse end markets
This presentation includes Adjusted Segment Operating Profit, Adjusted Segment EBITDA, Adjusted Income from Continuing Operations Before Income
Taxes, Adjusted Consolidated EBITDA and other financial measures which are Non-GAAP financial measures as defined by the Securities and Exchange
Commission.
OMNOVA’s Adjusted Segment Operating Profit is calculated as Segment Operating Profit (Loss) less restructuring and severance expenses, asset
impairments and other items. Adjusted Segment EBITDA is calculated as Adjusted Segment Operating Profit less depreciation and amortization expense
less accelerated depreciation.
OMNOVA’s Adjusted Income from Continuing Operations Before Income Taxes is calculated as Adjusted Segment Operating Profit less corporate expenses,
interest, restructuring and severance, asset impairments and other items. OMNOVA’s Adjusted EBITDA is calculated as Adjusted Income from Continuing
Operations Before Income Taxes less interest expense less debt premium and depreciation and amortization expense less accelerated depreciation.
Adjusted Segment Operating Profit and Adjusted Segment and/or Consolidated EBITDA and the other financial measures (collectively, the “Non-GAAP
financial measures”) are not calculated in the same manner by all companies and, accordingly, are not necessarily comparable to similarly titled measures of
other companies and may not be appropriate measures for comparing performance relative to other companies. The Non-GAAP financial measures should
not be construed as indicators of the Company’s operating performance or liquidity and should not be considered in isolation from or as a substitute for net
income (loss), cash flows from operations or cash flow data, which are all prepared in accordance with GAAP. The Non-GAAP financial measures are not
intended to represent, and should not be considered more meaningful than or as an alternative to, measures of operating performance as determined in
accordance with GAAP. Management believes that presenting this information is useful to investors because these measures are commonly used as
analytical indicators to evaluate performance and by management to allocate resources. Set forth in the appendices are the reconciliations of these Non-
GAAP financial measures to their most directly comparable GAAP financial measure.
All appendix results are pro forma reflecting continuing business excluding the sale of the global wallcovering business.
Appendix – Non-GAAP Financial Measures
28
Appendix 1 – Reconciliation of Reported Segment Sales
and Operating Profit to Net Sales and Net Income (Loss)
29
Three Months Ended
February 28 and 29,
(In millions) 2017 2016
Net Sales
Performance Chemicals
Performance Materials $ 64.8 $ 68.0
Specialty Chemicals 59.5 58.1
Total Performance Chemicals $ 124.3 $ 126.1
Engineered Surfaces
Coated Fabrics $ 16.0 $ 17.7
Laminates and Performance Films 34.3 31.5
Total Engineered Surfaces $ 50.3 $ 49.2
Total Net Sales $ 174.6 $ 175.3
Segment Operating Profit
Performance Chemicals $ 12.0 $ 8.0
Engineered Surfaces 2.2 2.4
Interest expense (5.2) (5.8)
Corporate expense (7.0) (5.4)
Income (Loss) Before Income Taxes 2.0 (.8)
Income tax (benefit) expense (1.6) .3
Net Income $ 3.6 $ (1.1)
Depreciation and amortization $ 6.7 $ 9.6
Capital expenditures $ 3.7 $ 6.1
Appendix 2 – Performance Chemicals
30
Year Ended November 30,
(Dollars in millions) 2013 2014 2015 2016 *LTM
Sales $ 773.0 $ 746.5 $ 608.1 $ 548.8 $ 547.0
Segment Operating Profit $ 64.1 $ 46.2 $ 15.9 $ 55.9 $ 59.9
Management Excluded Items
Restructuring and severance 2.1 0.5 4.3 2.9 1.7
Environmental costs - 1.0 2.8 - 0.1
Gain on asset sales (0.3) - - - -
Asset impairment, facility closure costs and other 0.2 - 18.4 2.5 2.5
Accelerated depreciation on production transfer 1.0 2.2 5.8 3.0 0.2
Operational Improvements costs - - 5.0 (0.4) (0.4)
Vacation accrual adjustment - - - (1.5) (1.2)
Subtotal for Management Excluded Items 3.0 3.7 36.3 6.5 2.9
Adjusted Segment Operating Profit $ 67.1 $ 49.9 $ 52.2 $ 62.4 $ 62.8
Adjusted Segment Operating Profit as a % of Sales 8.7% 6.7% 8.6% 11.4% 11.5%
Adjusted Segment Operating Profit $ 67.1 $ 49.9 $ 52.2 $ 62.4 $ 62.8
Segment Depreciation and Amortization excluding
accelerated depreciation 25.3 25.8 21.1 20.1 20.0
Adjusted Segment EBITDA $ 92.4 $ 75.7 $ 73.3 $ 82.5 $ 82.8
Adjusted Segment EBITDA as a % of Sales 12.0% 10.1% 12.1% 15.0% 15.1%
Segment Capital Expenditures $ 23.0 $ 21.8 $ 12.6 $ 15.6 $ 13.7
Appendix 3 – Engineered Surfaces
31
Year Ended November 30,
(Dollars in millions) 2013 2014 2015 2016 *LTM
Sales $ 245.1 $ 241.1 $ 229.9 $ 211.1 $ 212.2
Segment Operating Profit $ 15.6 $ 19.2 $ 18.9 $ 12.4 $ 12.2
Management Excluded Items
Restructuring and severance 3.0 0.2 1.5 0.6 0.7
Environmental costs - - 0.2 0.3 0.3
Gain on asset sales (5.1) - - - -
Asset impairment, facility closure costs and other 2.6 0.2 1.6 5.8 5.7
Gain on settlement of Note Receivable 0.9 (1.1) - - -
Coated Fabrics Manufacturing Transition Costs 0.7 - - - -
Vacation accrual adjustment - - - (1.2) (0.9)
Subtotal for Management Excluded Items 2.1 (0.7) 3.3 5.5 5.8
Adjusted Segment Operating Profit $ 17.7 $ 18.5 $ 22.2 $ 17.9 $ 18.0
Adjusted Segment Operating Profit as a % of Sales 7.2% 7.7% 9.7% 8.5% 8.5%
Adjusted Segment Operating Profit $ 17.7 $ 18.5 $ 22.2 $ 17.9 $ 18.0
Segment Depreciation and Amortization excluding accelerated
depreciation 7.0 6.1 6.0 6.3 6.2
Adjusted Segment EBITDA $ 24.7 $ 24.6 $ 28.2 $ 24.2 $ 24.2
Adjusted Segment EBITDA as a % of Sales 10.1% 10.2% 12.3% 11.5% 11.4%
Segment Capital Expenditures $ 5.2 $ 6.7 $ 8.5 $ 8.2 $ 8.4
Appendix 4 – OMNOVA Consolidated
32
Year Ended November 30,
(Dollars in millions except per share data) 2013 2014 2015 2016 *LTM
Sales $ 1,018.1 $ 987.4 $ 838.0 $ 759.9 $ 759.2
PC Adjusted Segment Operating Profit $ 67.1 $ 49.9 $ 52.2 $ 62.4 $ 62.8
ES Adjusted Segment Operating Profit 17.7 18.5 22.2 17.9 18.0
Total Adjusted Segment Operating Profit $ 84.8 $ 68.4 $ 74.4 $ 80.3 $ 80.8
Adjusted Segment Operating Profit as a % of Sales 8.3% 6.9% 8.9% 10.6% 10.6%
Corporate Expense (21.3) (20.8) (27.6) (33.7) (35.3)
Interest Expense (31.9) (32.9) (28.3) (24.7) (24.1)
Corporate Excluded Items
Restructuring and severance - - 0.1 4.9 5.3
Enviornmental Costs - - - - -
Asset impairment, facility closure costs and other - - 0.6 - -
Accelerated depreciation on production transfer - - - - -
Operational Improvements costs - - 0.4 - -
Deferred Financing Fees Written-Off and additional interest 1.5 0.8 0.6 4.9 4.9
Corporate Headquarters Relocation Costs 0.1 0.6 - (0.2) -
Other financing costs - 2.4 1.0 - -
Shareholder activist costs - - 1.9 - -
Acquisition and integration related expense - - 0.4 0.9 0.9
Vacation accrual adjustment - - - (0.7) (0.5)
Subtotal for Management Excluded Items 1.6 3.8 5.0 9.8 10.6
Adjusted Income from Continuing Operations before Income Taxes $ 33.2 $ 18.5 $ 23.5 $ 31.7 $ 32.0
Tax Expense (30% rate)** (10.0) (5.6) (7.0) (9.5) (9.6)
Adjusted Income From Continuing Operations 23.2 $ 12.9 $ 16.5 $ 22.2 $ 22.4
Adjusted Diluted Earnings Per Share from Adjusted
Income from Continuing Operations *** $ 0.50 $ 0.28 $ 0.36 $ 0.50 $ 0.50
Appendix 4 – OMNOVA Consolidated
(continued)
33
Year Ended November 30,
(Dollars in millions except per share data) 2013 2014 2015 2016 *LTM
Adjusted Income from Continuing Operations before Income
Taxes $ 33.2 $ 18.5 $ 23.5 $ 31.7 $ 32.0
Interest Expense (Excluding Debt Premium) 31.9 30.9 27.3 22.7 22.1
Adjusted Consolidated EBIT 65.1 49.4 50.8 54.4 54.1
Depreciation and Amortization excluding accelerated depreciation 32.6 32.5 28.2 27.6 27.5
Adjusted Consolidated EBITDA $ 97.7 $ 81.9 $ 79.0 $ 82.0 $ 81.6
Adjusted Consolidated EBITDA as a % of Sales 9.6% 8.3% 9.4% 10.8% 10.7%
Consolidated Capital Expenditures $ 29.2 $ 29.8 $ 24.0 $ 25.6 $ 23.2
Net Leverage
Total Short and Long Term Debt**** 448.6 412.0 356.7 366.0 364.9
Less Cash and Restricted Cash (164.9) (99.5) (44.9) (78.0) (70.4)
Net Debt 283.7 312.5 311.8 288.0 294.5
Net Leverage Ratio***** 2.9 X 3.8 X 3.9 X 3.5 X 3.6
**Tax rate is based on the Company's estimated normalized annual effective tax rate
*** Adjusted EPS is calculated using Diluted Shares Outstanding at the end of the period
**** LTM excludes OID and deferred financing fees of $3.5M and $5.8M
***** The above calculation is not intended to be used for purposes of calculating debt covenant compliance
