OMG: The Cobalt Company. KeyBanc Capital Markets

Transcription

1 OMG: The Cobalt Company KeyBanc Capital Markets Basic Materials & Packaging Conference September 2010

2 Forward-Looking Statements This presentation may include forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of Such forward-looking statements are based upon specific assumptions and are subject to uncertainties and factors relating to the company's operations and business environment, all of which are difficult to predict and many of which are beyond the control of the company. These uncertainties and factors could cause actual results of the company to differ materially from those expressed or implied in the forward-looking statements contained in the foregoing discussion. A more complete disclosure about forward-looking statements can be found in our most recent annual report on Form 10-K. The company undertakes no obligation to update any forward-looking statements as a result of future developments or new information. 2

3 OMG investment highlights Providing Specialized Materials & Technologies Bringing value to end markets Leveraged to Favorable Macro Trends Benefitting from secular trends Building Financial Strength & Flexibility Empowering our growth initiatives 3

4 Moving to technology-based platforms 2005 Revenue by Segment 1H 2010 Revenue by Segment Cobalt Nickel Advanced Materials Specialty Chemicals Battery Technologies Commodity orientation Nickel refining business highly reliant on metal price Cobalt business focused on volume Market-focused with value-add proposition Serving high technology sectors such as medical and electronics Offering technically differentiated products and solutions 4

5 Advanced Materials Developing battery materials for proliferation of portable power Positioning for global growth in electric powered vehicles Supplying catalysts for clean fuels and lower refinery emissions Enhancing value-add position for end markets Securing sustainable refinery feeds, including recycling 1H 2010 Net Sales by End Market Battery Materials 41% Powder Metallurgy 13% Chemical 13% Ceramics 5% Other 28% 5

6 Specialty Chemicals Formulating wet chemicals for next generation electronic devices Enabling sustainable products and processes Extending products to solar panel production Developing advanced additives for the coatings and composite sector 1H 2010 Net Sales by End Market Semiconductor 26% PCB 19% Memory Disk 12% GMF 2% Coatings 16% Tire 11% Chemical 9% Other 5% 6

7 Battery Technologies Applying broad technical expertise in niche battery markets Leading market positions in established sectors Growth opportunities in emerging medical and alternative energy markets Leveraging g technology shift to lithiumion within existing markets 1H 2010 Net Sales by End Market Defense 59% Aerospace 36% Medical 5% 7

8 Establishing growth platforms 1H 2010 Net Sales by Growth Platform Portable Power Electronic 29% Chemicals and Materials 23% Rising demand for clean, reliable portable power Increasing reliance on Extends OMG s position in production of value- electronic devices Focus on miniaturization, added solutions Integrated supplier of battery materials and technologies improved performance, and higher yields 8

9 Exposure to various economic sectors 1H 2010 Sales by Sector Medical 1% Implantable devices Aerospace 4% Satellites, aircraft Defense 4% Missiles Industrial 4% Machining, Oil & Gas Other 17% Metal resale, by-products Electronics 45% Laptops, cell phones, net books, smart phones, semiconductors, hard disk drives, printed circuit boards, photovoltaic Catalysts 7% Petrochemical refining, gas-to-liquid Automotive 6% Light auto, commercial truck Construction 12% Residential and nonresidential 9

10 Leveraged to favorable long-term secular trends Sustainable processes and products Proliferation of portable power Next generation electronic devices Emerging technologies for alternative energy 10

11 OMG materials and technologies in the lithium-ion i battery value chain Materials Components Technologies Refining Precursors Cathodes Anodes Electrolyte Separators Cells & Batteries 11

12 Leveraging our position and competencies in battery market Cathode Materials Growth Strategic Rationale for Growth Catho ode Volume (MT T) High levels of market demand Consumer electronics Automotive Portable power tools Evolving technical requirements and 40 new applications 30 High performance 20 Lower costs 10 Safety 0 LCO LNCMO LNCAO LMO LFPO Significant need for cathode material innovation Source: OMG 12

13 Specialized chemicals and materials for today s electronic devices Semiconductor Cleaners / Etchants Photomasks Printed Circuit Board Plating chemicals Memory Disk Electroless nickel Rechargeable Battery Cathode materials Precursors 13

14 Positioned for growth in electronic materials Electronic Materials Growth The electronics markets we serve are growing +GDP% Strategic Rationale for Growth High levels of market demand Computer Communications Consumer Automotive Industrial / Medical Military / Aerospace Total Long term Revenue Growth Rate PC 4.0% Server / Data Storage 4.0% Other Computer 3.8% Mobile Phones 4.5% Infrastructure 5.3% Communications 4.9% 5.6% 7.4% Industrial 10.1% PV Modules 17.8% Medical 5.4% 4.2% 5.6% New applications Evolving technical requirements Miniaturization High performance Lower costs Eco-friendly chemicals and processes Source: PRISMARK PARTNERS, LLC; June

15 Our semiconductor products have value proposition for photovoltaic manufacturers Semiconductor Supply Chain OMG Participation Silicon feedstock Ingots / Wafers Cell Production Module Assembly Components Installation Customer Semiconductor Product Lines Cleaners Stripper Etchants Texturing Chemicals Photovoltaic Technology Leverage Solar Cleaners Solar Stripping Texturing Chemicals Solar Plating (Silver, Nickel, Copper, Tin) Advantages: Reduce manufacturing cost Minimize precious metal content Improve cell operating efficiency 15

16 Growth and evolving needs lead to opportunity Photovoltaic Cell Manufacture Growth Strategic Rationale for Growth c Cell Manufac cture (GW) Photovoltai Existing relationships with leading PV manufacturers Excellent understanding of plating and wet chemical processing Transferable knowledge from existing semiconductor and PCB businesses 0 Global manufacturing capability Current Geographic Split Asia: 65 % Europe: 25 % NA: 10 % PV Manufacturers searching for higher cell efficiencies and lower manufacturing costs Source: Lux Research 16

17 Financial strength and flexibility to fund growth initiativesiti Cash Flow from Operations ($M) $172 $165 $194 $ Q 2010 LTM Cash Balance ($M) $401 $355 $245 Positive and growing cash flow from operations Solid cash position Manageable debt level of $140M (at end of Q2 2010) Flexibility to optimize cash usage for enhancing shareholder value $ Q

18 Despite progress, challenges remain Deliver on organic growth opportunities Build on enabling platforms Further reduce cobalt price impact Pricing is volatile Supply chain is long and dynamic Improve return on assets 18

19 Our long-term outlook Long-term growth characteristics of end markets are favorable Demonstrated ability to integrate accretive acquisitions Committed to strategy Financial discipline to enhance shareholder value 19

20 OMG investment highlights Providing Specialized Materials & Technologies Bringing value to end markets Leveraged to Favorable Macro Trends Benefitting from secular trends Building Financial Strength & Flexibility Empowering our growth initiatives 20

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22 APPENDIX 22

23 OM Group, Inc. Net Sales ($M) $1,737 2Q 2010 LTM Net Sales by Segment $1,022 $872 $1,083 Advanced Materials 54% Specialty Chemicals 42% Battery Technologies 4% Q 2010 LTM Operating Profit ($M) 2Q 2010 LTM Net Sales by Region $196 $178 ($1) $102 Americas 22% Europe 31% Asia 47% Q 2010 LTM NOTE: Battery Technologies segment consists of EaglePicher Technologies, acquired on January 29, Results included from the date of acquisition. 23

24 Advanced Materials Segment Consists of: Inorganics, DRC Smelter JV and Metal Resale Net Sales ($M) 2Q 2010 LTM Net Sales by End Market $1,192 Battery Materials 44% $722 $472 $580 Powder Metallurgy 11% Chemical 14% Ceramics 4% Other 27% Q 2010 LTM Operating Profit ($M) 2Q 2010 LTM Net Sales by Region $213 $204 Americas 13% $53 $88 Europe 37% Asia 50% Q 2010 LTM 24

25 Specialty Chemicals Segment Consists of: Electronic Technologies (Electronic Chemicals, Ultra Pure Chemicals, Photomasks) and Advanced d Organics Net Sales ($M) $547 $402 $458 $ Q 2010 LTM Operating Profit ($M) 2Q 2010 LTM Net Sales by End Market Semiconductor 25% PCB 20% Memory Disk 11% GMF 3% Coatings 16% Tire 11% Chemical 8% Other 6% 2Q 2010 LTM Sales by Region $18 $11 $48 Americas 27% Europe 27% Asia 46% ($27) Q 2010 LTM 25

26 Battery Technologies Segment Consists of: EaglePicher Technologies Net Sales ($M) 2Q 2010 YTD Net Sales by End Market $47 Defense 59% Aerospace 36% N/A N/A N/A Medical 5% Q 2010 YTD Operating Profit ($M) N/A N/A N/A ($1) Q 2010 YTD NOTE: Battery Technologies segment consists of EaglePicher Technologies, acquired on January 29, Results included from the date of acquisition. 26

27 Investor Relations Contact Information Troy Dewar, CFA Director, Investor Relations (216) omgi