GCP Applied Technologies
Transcript of GCP Applied Technologies
This presentation contains “forward-looking statements,” that is, information related to future, not past, events. Such statements generally include the words “believes,” “plans,” “intends,” “targets,” “will,” “expects,” “suggests,” “anticipates,” “outlook,” “continues” or similar expressions. Forward-looking statements include, without limitation, expected financial positions; results of operations; cash flows; financing plans; business strategy; operating plans; capital and other expenditures; competitive positions; growth opportunities for existing products; benefits from new technology and cost reduction initiatives, plans and objectives; and markets for securities. Like other businesses, GCP is subject to risks and uncertainties that could cause its actual results to differ materially from its projections or that could cause other forward-looking statements to prove incorrect. Factors that could cause actual results to materially differ from those contained in the forward-looking statements, or that could cause other forward-looking statements to prove incorrect, include, without limitation, risks related to: the cyclical and seasonal nature of theindustries that GCP serves; foreign operations, especially in emerging regions; changes in currency exchange rates; the cost and availability of raw materials and energy; the effectiveness of GCP’s research and development, new product introductions and growth investments; acquisitions and divestitures of assets and gains and losses from dispositions; developments affecting GCP’s outstanding liquidity and indebtedness, including debt covenants and interest rate exposure; developments affecting GCP’s funded and unfunded pension obligations; warranty and product liability claims; legal proceedings; uncertainties related to GCP’s ability to realize the anticipated benefits of the spin-off /separation from W.R. Grace and the value of GCP’s common stock following the spin-off; the inability to establish or maintain certain business relationships and relationships with customers and suppliers or the inability to retain key personnel following the spin-off; and hazardous materials and the costs of compliance with environmental regulation. These and other factors are identified and described in more detail in the “Risk Factors” section of company’s Form 10-K filed March 29, 2016 and available online at www.sec.gov. Readers are cautioned not to place undue reliance on GCP’s projections and forward-looking statements, which speak only as the date thereof. GCP undertakes no obligation to publicly release any revision to the projections and forward-looking statements contained in this presentation, or to update them to reflect events or circumstances occurring after the date of this presentation.
Non-GAAP Financial MeasuresThese slides contain certain “non-GAAP financial measures”. Please refer to the Appendix for definitions of the non-GAAP financial measures used herein and a reconciliation of those non-GAAP financial measures to their most comparable GAAP measure.
Forward Looking Statements
2©2016 GCP Applied Technologies Inc. | Confidential
Investment Highlights
Successfully launched as a $1.4B revenue public company on February 3
Leading global provider of high-value products and technologies in the
construction and packaging industries
Capitalizing on formulation, selling capability and technical service
expertise across diverse geographies
Low capital intensity business serving a global customer base
Positioned for continued growth and focused on building shareholder value
3©2016 GCP Applied Technologies Inc. | Confidential
Leading Provider of High Value Products and
Technologies
Building Envelope Products
Residential Products
Specialty Products
Sealants and Closures
Coatings
Concrete Products
Cement Products
Net sales1: $694mm
Adj. EBITDA1: $102mm
Adj. EBITDA margin1: 14.6%
Net sales1: $326mm
Adj. EBITDA1: $78mm
Adj. EBITDA margin1: 23.8%
Net sales1: $398mm
Adj. EBITDA1: $107mm
Adj. EBITDA margin1: 27.0%
1 For the period ended December 31, 2015.2 GCP Applied Technologies internal estimates for industry size for the period ended December, 31, 2014.
See appendix for Adjusted EBITDA reconciliation.
Net sales(1)
Adj. EBITDA(1)
Adj. EBITDA margin(1)
$1,419 mm
$ 259 mm
18.2%
87%
13%
43%
44%
13%
81%
19%
Cement
Additives
$1.0bn2
Concrete
Admixtures
$6.8bn2
Building
Envelope
$1.5bn2
Specialty
$0.5bn2 Residential
$1.5bn2
Sealants
and
Closures
$0.6bn2
Coatings
$2.6bn2
$7.8bn
Industry2
$3.5bn
Industry2
$3.2bn
Industry2
4©2016 GCP Applied Technologies Inc. | Confidential
Global Presence
Facilities in over 40 countries on six continents
65 manufacturing and technical sites worldwide
GCP’s Geographic Diversity
Cambridge, MA
Hamburg, Germany Epernon,
France
Chicago, IL
Mount Pleasant, TN
Santiago, Mexico
Singapore
Dubai, UAE
Sorocaba, Brazil
Bangpoo,
Thailand
Brisbane,
Australia
Ezhou, China
Houston, TX
Passirana, Italy
Countries with offices or plants Global
Headquarters
Key Manufacturing Facilities
Other Facilities
5©2016 GCP Applied Technologies Inc. | Confidential
High-touch
Customer-
Centric Model
Best-in-Class
Product
Performance
Scalable
Geographic
Diversity
Environmental
and Food
Regulatory
Solutions
Operational
Productivity
Multiple touch
points across
selling value chain
• Customers
• Specifiers
• Brand owners
Plants and
technical sites
approximate to
customers for local
distribution and
deliveries
Global sales
organization
• ~30% in sales
and tech service
High quality
specified products
Reduce labor and
construction costs
Improve life-cycle
costs
Eliminate rejects
and rework
Conduct business
in 110 countries
Manufacture in 65
locations
Lower energy and
water consumption
Lower customer
CO2 footprint
FDA compliant
products
Solutions for
evolving consumer
preferences
Supply chain
optimization
Formulation
capabilities
Scalable
manufacturing
operations
How We Deliver Value and Growth
38%
24%
23%
15%
North
America
EMEA
Asia
Pacific
Latin
America
GCP 2015 Net Sales
©2016 GCP Applied Technologies Inc. | Confidential 6
Technologies for Construction
Portfolio of market leading brands offers solutions for nearly every aspect of the built environment
7©2016 GCP Applied Technologies Inc. | Confidential
Cement (4.3 billion tons/yr)Supplementary
Cementitious
Materials
Aggregate
Ready Mix or
Precast Concrete
Producer
(10 billion yd3/yr)
Job Site /
Contractor
Specifier
Building /
Structure
OwnerProduct
Equipment
Service
Product
Service
Product
Service
Product
Service
Service
Concrete Construction Value Chain
Cement Additives
Concrete Admixtures
Product
Service
Product
Service
We create value throughout the concrete construction ecosystem, but focus
primarily on value creation with cement manufacturers and concrete producers.
©2016 GCP Applied Technologies Inc. | Confidential 9
Specialty Construction Chemicals Segments
Cement
AdditivesPrecast
Sprayable
ConcreteVerifi
Leverage strong
market position
Global technology
leader
Geographic
penetration
Innovative products
for durability and
sustainability
Large and
fragmented market
Customer
rationalization may
impact growth in the
short term
“Connected
customer” concrete
management
Increase the size of
the market
Higher value $/m3
Execute over time
while introducing
software upgrades
Ready Mix
Admixtures
Improve market
position
Leverage
differentiating
technologies and
adding decorative
products to the
portfolio
Establish market
position
New technologies
for customer
productivity gains
CBA®
Extend Market Position via New Products, Technology and
Share Gain to Drive Growth and EBIT Margin©2016 GCP Applied Technologies Inc. | Confidential 10
©2016 GCP Applied Technologies Inc. | Confidential 11
Ready-Mix Admixtures
Users: Ready-mix concrete plants
Customers: Multinational building materials
companies, regional, local
concrete producers
Key Needs: Production of widely-varying
concrete types from standard
raw materials
Durable concrete
Lowered operational costs and
environmental impact
Products: Water reducers
Rheology control products
Set accelerators/retarders
Shrinkage reducing agents
Corrosion Inhibitors
Structural Fibers
Ponte Estaiada (Sao Paulo, Brazil)
The Internet of Things
Sensors
Signal Processing
Wireless Communication
Cloud Computing
Concrete Technology Knowledge
Cement Chemistry
Concrete Technology
Chemical Solutions
Users: Ready-mix concrete producers
Customers: Multinational building materials
companies, regional
Key Needs: Operational efficiency
Product consistency and
quality
Products: Sensors/software to accurately
measure/detect concrete
“slump” and truck location in
real time
Control system which adds
chemicals to adjust slump to
meet specifications
Data to enable faster
decisions, operational
efficiency and waste
minimization
Verifi®
+
12©2016 GCP Applied Technologies Inc. | Confidential
13
Users: Precast concrete facilities
Customers: Local or regional precast
companies
Key Needs: High-performance, durable
concrete
Operational efficiency
Products: Generally the same as for
Ready Mix concrete
High performance
requirements
Larger sales $/m3
Precast Products
©2016 GCP Applied Technologies Inc. | Confidential
14
Sprayable Concrete
Users: Ready-mix concrete companies;
mine owners and tunneling
contractors
Customers: Ready-mix concrete companies;
mine owners and tunneling
contractors
Key Needs: Very high early strength
Pumpability/ sprayability
Low water permeability
Extended slump life (3-8 hrs)
Low rebound and dust
Bond to rock substrate
Cost efficiency
Products: Accelerators
Rheology control agents
Water reducers
Hydration control agents
Macro synthetic fibers
Air entrainers
Sprayable Concrete
©2016 GCP Applied Technologies Inc. | Confidential
15
Cement Additives
Art Science Museum (Singapore) Users: Cement manufacturers
Customers: Multinational or regional building
materials companies
Key Needs: Low-cost production of cement to
meet national performance
standards
Increased use of fillers to
minimize cost and environmental
impacts
Products: Grinding aids to reduce mill
energy consumption
Quality improvers to modify
cement performance metrics
©2016 GCP Applied Technologies Inc. | Confidential
World-Class Technical Service Capabilities Are
Critical
Field Lab
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Innovation
GCP Applied Technologies is known
for creating products and product
categories which have become
critical to the industry
R&D and Marketing have been
concentrated in the Cambridge, MA
headquarters to get the intensity of
effort which will lead to great new
products
The staff, instrumentation, and
processes are world class
CBA®
Cement Chemistry
Key Technical Disciplines
Concrete Technology
Materials Science Civil EngineeringMechanical Engineering
MathematicsOrganic Chemistry
Chemical Engineering
17©2016 GCP Applied Technologies Inc. | Confidential
Innovation
Technological
changes
Market
dynamics
Customer
trends
Economic
drivers
Regulatory
18
Our cement and concrete customers will
continue to seek operational savings
and better quality assurance
Environmental pressures will create
change in materials selection, materials
availability, and process technologies
What is in Store?
The drive for life-cycle costing and
performance specifications will place a
greater premium on high-quality durable
concrete
Breakthroughs in cement chemistry,
materials science, and nanotechnology
will create new opportunities to solve
problems
©2016 GCP Applied Technologies Inc. | Confidential
Balcony Protection• Silcor® Liquid Waterproofing• Bituthene® Sheet Membranes
Green Roofs & Plaza Decks• Silcor® Liquid Waterproofing• Bituthene® Sheet Membranes• YTL® Sheet Membranes
Roof• Grace Ultra® Roofing Underlayment• Grace Ice & Water Shield ® Underlayment
External Walls• Perm-A-Barrier ® Weather Barriers
Steel Structure Fire Protection• Monokote® Spray-Applied Thermal Protection
Water Features & Pools• Silcor® Liquid Waterproofing• Betec® Cementitious Waterproofing
Substructure Waterproofing • Preprufe® Pre-applied Waterproofing Membranes• Bituthene® Post-applied Waterproofing Membranes• Hydroduct® Drainage Composites• Adcor ® Hydrophilic Waterstops• De Neef ® Resin Injections
Specialty Building Materials Portfolio – Technology Leadership
20©2016 GCP Applied Technologies Inc. | Confidential
Specialty Business Materials Segments
Differentiated
waterproofing
membranes and
air barrier
technologies
Specialized
applications
Grow sales in
emerging markets
Leader in passive
fire protection for
steel-framed
buildings
Grow with the
market
Betec specialized
high performance
grouts
DeNeef repair and
renovation for
waterproofing
Invest in core
roofing
underlayment
Expand product
distribution
Grow Through High-Value, Specified
Applications and Distribution
Building
Envelope
Fire
Protection
Repair &
Specialty Residential
21
©2016 GCP Applied Technologies Inc. | Confidential
Core Product Brands
Waterproofing
Global leader in the advancement of waterproofing technologies
Preprufe® – Leading below-grade solution with a full line of accessory products. Pioneer of the
fully bonded preapplied waterproofing technology
Silcor ® – Liquid applied deck waterproofing
Bituthene® – Original rubberized asphalt self adhesive membrane
Adcor ® and Bentorub® – Hydrophilic waterstops for joint protection
Air Barriers
Specified barriers to manage movement of air, water and vapor through the building envelope
to improve energy use and indoor air quality
Perm-A-Barrier® – full line of vapor permeable and impermeable sheet and liquid applied
products
Residential
North America focused business providing Weather Protection Systems in specific channels
to improve the durability of wood constructed homes
Grace Ice & Water Shield® – category leading self adhesive underlayment for sloped roofs
Vycor ® – flashing and sheet membranes to protect and manage moisture in the wall
22©2016 GCP Applied Technologies Inc. | Confidential
22%
36%
42%
Below-grade Waterproofing
Improved leak prevention through unique
adhesive bond
Specified on major projects throughout the world
Drives full portfolio system selling
Preprufe Plus increases quality and contractor
productivity
Patented technology
The Premier Pre-Applied
Waterproofing System
Below-grade Waterproofing Market
Asia Pacific
EMEA
Americas
Museum of Islamic Arts
(Doha, Qatar)
The Morocco Mall
(Casablanca, Morocco)
23©2016 GCP Applied Technologies Inc. | Confidential
Fire Protection, Repair and Specialty Businesses
Polyurethane resins for crack injections
Ground stabilization and curtain grouting with PU,
Acrylate, Organomineral and Silica/ Silicate based
products
De Neef ®
Monokote®
- the world's most widely specified spray applied
cementitious fireproofing
Growing in new specialty applications for petrochemical and
tunnels
Fire Protection
Resin injections
for leak sealing
and ground
stabilization
Spray applied fire
protection for structural
steel
Betec®
Specializing in flowable high-strength grouts for
industrial and infrastructure applications
Growth in new segments for wind turbine construction
and specialty niche grouting applications
High-quality
engineered
cementitious
grouts and
mortars
24©2016 GCP Applied Technologies Inc. | Confidential
Project Selling Principles
Balcony
• Betec® Cementitious Waterproofing
• Procor® Liquid Waterproofing
Flat Deck
• Bituthene® Post-applied
Waterproofing
Membrane
• Betec Cementitious
Waterproofing
• Procor Liquid
Waterproofing
• Decorative Concrete
Substructure
• Preprufe 300R Waterproofing
Membrane
• MIRA® Mid-range Water Reducer
• STRUX® Synthetic Macro Fibre
Roof
• Grace Ice & Water Shield® Roofing
Underlayment
• Tri-Flex® Roofing Underlayment
External Wall
• ADVA® for Self-consolidating
Concrete
Interior Floor
• Decorative
Concrete
Steel Structure
• Monokote® Fireproofing
Wet Areas
• Betec Cementitious Waterproofing
Swimming Pool
• Betec
Cementitiou
s
Waterproofi
ng
Lift Pit
• Betec Cementitious
Waterproofing
• Monokote FireproofingSubstructure
• Preprufe® 160R Pre-applied
Waterproofing Membrane
• Bituthene Post-applied
Waterproofing Membrane
• Procor Liquid Waterproofing
• Hydroduct® Drainage Composites
The Grace Building Envelope
Technology Platforms
Differentiated technology
solutions
Systems approach
Command of local codes and
construction practice
Custom specifications and
drawings
Value Drivers
Fireproofing
Bidding
Contractors
Geotech
Structural
Engineer
Civil
Engineer
General
Contractor
Architect
Project Selling Competency
Market/project intelligence throughout
design and construction
Executive selling to
influencers and decision makers
Project Tracking – CRM
Consistent linkage throughout value
chain
International Dimension
Global designs with local
execution
Unique position to assure
designers of correct
implementation
Leverage brand awareness
Drive geographic expansion
Precast
Ground Works
Concrete
Client
Waterproofing
25©2016 GCP Applied Technologies Inc. | Confidential
Innovation
Technological
changes
Market
dynamics
Customer
trends
Economic
drivers
Regulatory
26
What is in Store?
Increasing Urbanization requires cities to
maximize land use driving taller buildings
and underground structures
Maturing Emerging Markets improve
construction practices upgrading build
quality
Environmental focus creates increasing
opportunities for energy savings and low
impact products
Demand for Construction Speed opens
opportunities for new technologies and project
delivery methods
©2016 GCP Applied Technologies Inc. | Confidential
Darex Packaging Technologies Segments
Sealants Coatings Closures
Sustainable
leadership
High service level
Global key accounts
and customer
management
Customer and brand
owner loyalty
Repositioning to
specialty products
Liners with
additional
functionality
Grow with BPA-NI
products
Grow at global key
accounts
Niche segments
Grow with Market,
Maintain Margins and Cash28©2016 GCP Applied Technologies Inc. | Confidential
Can Sealants
Coatings
Supply Chain in the Packaging Industry
Metal Producers Retailers Consumers
Raw Materials
Rubber
Latex
Resin
Pigment
Solvent
Polymer
Sealants and Coatings are a small cost (<5%) of the package,
but vital to its performance
Can Makers Brand Owners
29©2016 GCP Applied Technologies Inc. | Confidential
Can EndCan Body Flange (Curl)
Primary Sealing Area
Bacteria, Oxygen, Moisture
Container content–Food, beverage, oils, solvent, gases
Must have sufficient chemical resistance to the pack
Must have sufficient thermal and mechanical resistance to
withstand the retort or processing conditions
Must not affect the aroma or flavor of the pack contents
Sealant protects the package during the life of the can
Where applicable, must be food law compliant
Can Sealants Basics
Key Requirements
Provide hermetic seal by filling the void
created in double-seam
PEACE OF MIND
Why do We Win?
PRODUCT PERFORMANCE
BEST-IN-CLASS TECH SERVICE
QUALITY, SUPPLY, REGULATORY
PEACE OF MIND
CUSTOMER INTIMACY
30©2016 GCP Applied Technologies Inc. | Confidential
Closure Sealants Basics
Provides pressure seal
Prevents oxygen, bacteria from
coming in
Provide hermetic seal, filling natural voids between container and closure
Fills voids
Contents stay in the package
Closure Type Plastic Cap Metal Crown Lug CapRoll-on Pilfer Proof
(ROPP)
One piece Plastic
Cap
Major End UseCarbonated Soft
Drink (CSD), Water
Carbonated Soft
Drink (CSD), BeerGlass Food Jars
Water (Germany),
Spirits, WinePET Food Jars
Darex Sales Sealant Sealant and Coating Sealant and Coating Sealant and Coating OST Masterbatch
Key Requirements
Must not impart any flavor
Have low chemical migration
Be lineable at very high speeds
Adhere to the metal/plastic
Perform for the shelf life of container
Be food compliant
Brand Owner Pull-Through is Key to Closure Sealant Strategy
31©2016 GCP Applied Technologies Inc. | Confidential
Can Coatings Basics
Protect contents from the environment, and the pack from the
contents
Chemical Protection
Mechanical Protection
Decoration
Other Functionalities
Prevent interaction between
metal and contents
Easy removal of contents
(e.g. meat release)
Oxygen scavenging
Heat Seal
Improved can
appearance
Primer for inks
Key Requirements
Flexible and spread evenly
Resist physical deformation
during fabrication of container
Must not impart any flavor
Perform for the whole shelf life
of the container
Comply with global food laws
Protection against physical
abuse (scratching)
Protection against environment
Most metal containers and lids must be coated, internally and externally
32©2016 GCP Applied Technologies Inc. | Confidential
Apperta BPA-NI Technology
Product Family Summary
Four coatings as solution for almost all packs and applications:
PR 2100-01, Gold Primer
PR 2101-01, Aluminized Primer
PL 2103-01, Light Gold, Single-, Double- and Top-Coat
PL 2104-01, Aluminized, Single-, Double- and Top-Coat
Four coatings offer universality for almost all varieties of food packs and applications
Benefits of Apperta
Higher flexibility and superior sterilization and pack
resistance
Superior staining performance of gold systems
PR 2101-01 (alu) + PL 2103-01 (gold) superior
resistance to high ph and high protein packs
Improved color stability after sterilization
50% higher scratch resistance than current BPANI
polyester coatings
Improved sheet handling and forming properties
Improved adhesion to powder side stripe
Improved blocking performance
Suited for use in high ambient temperature climates
Less sensitive to poor sheet cooling conditions
Supports higher multiple sheet pallet storage
Improved Conversion performance
No “angel hairs” during EOE conversion compared to
competitive systems.
Improved functionality
Reduction of dry film weights by up to 20%
Extension of package shelf life
Packing a wider range of food types
33©2016 GCP Applied Technologies Inc. | Confidential
Investment Highlights
Successfully launched as a $1.4B revenue public company on February 3
Leading global provider of high-value products and technologies in the
construction and packaging industries
Capitalizing on formulation, selling capability and technical service
expertise across diverse geographies
Low capital intensity business serving a global customer base
Positioned for continued growth and focused on building shareholder value
34©2016 GCP Applied Technologies Inc. | Confidential
GCP Applied Technologies, Inc.
Analysis of Operations
Analysis of Operations
(In millions) 2015 2014 % Change
Net sales:
Specialty Construction Chemicals $ 694.3 $ 726.3 (4.4)%
Specialty Building Materials 398.1 379.3 5.0 %
Darex Packaging Technologies 326.2 374.8 (13.0)%
Total GCP net sales $ 1,418.6 $ 1,480.4 (4.2)%
Net sales by region:
North America $ 538.2 $ 503.9 6.8 %
Europe Middle East Africa (EMEA) 341.1 396.0 (13.9)%
Asia Pacific 329.6 349.7 (5.7)%
Latin America 209.7 230.8 (9.1)%
Total net sales by region $ 1,418.6 $ 1,480.4 (4.2)%
Profitability performance measures:
Adjusted EBIT(A):
Specialty Construction Chemicals segment operating income $ 83.7 $ 72.4 15.6 %
Specialty Building Materials segment operating income 99.6 75.7 31.6 %
Darex Packaging Technologies segment operating income 72.8 74.1 (1.8)%
Corporate costs (24.3) (19.3) (25.9)%
Certain pension costs(B) (5.1) (7.5) 32.0 %
Adjusted EBIT 226.7 195.4 16.0 %
Pension MTM adjustment and other related costs, net (15.0) 18.6
Restructuring expenses and asset impairments (11.6) (18.3)
Currency and other financial losses in Venezuela (73.2) (1.0)
Interest expense, net (2.5) (4.8) 47.9 %
Provision for income taxes (84.3) (55.6) (51.6)%
Net income attributable to GCP $ 40.1 $ 134.3 (70.1)%36©2016 GCP Applied Technologies Inc. | Confidential
GCP Applied Technologies, Inc.
Analysis of Operations
Adjusted EBIT: 2015 2014
%
Change
Specialty Construction Chemicals $ 83.7 $ 72.4 15.6 %
Specialty Building Materials 99.6 75.7 31.6 %
Darex Packaging Technologies 72.8 74.1 (1.8)%
Corporate (29.4) (26.8) (9.7)%
Total GCP 226.7 195.4 16.0 %
Depreciation and amortization:
Specialty Construction Chemicals $ 18.0 $ 18.5 (2.7)%
Specialty Building Materials 7.8 8.6 (9.3)%
Darex Packaging Technologies 4.8 5.5 (12.7)%
Corporate 1.2 1.4 (14.3)%
Total GCP 31.8 34.0 (6.5)%
Adjusted EBITDA:
Specialty Construction Chemicals $ 101.7 $ 90.9 11.9 %
Specialty Building Materials 107.4 84.3 27.4 %
Darex Packaging Technologies 77.6 79.6 (2.5)%
Corporate (28.2) (25.4) (11.0)%
Total GCP 258.5 229.4 12.7 %
Adjusted EBITDA margin:
Specialty Construction Chemicals 14.6 % 12.5% 2.1 pts
Specialty Building Materials 27.0 % 22.2% 4.8 pts
Darex Packaging Technologies 23.8 % 21.2% 2.6 pts
Total GCP 18.2 % 15.5% 2.7 pts
37©2016 GCP Applied Technologies Inc. | Confidential
GCP Applied Technologies, Inc.
Adjusted EBIT means net income adjusted for interest income and expense, income taxes, restructuring and repositioning expenses and asset
impairments, pension costs other than service and interest costs, expected returns on plan assets, and amortization of prior service
costs/credits; gains and losses on sales of businesses, product lines, and certain other investments; and certain other unusual or infrequent
items that are not representative of underlying trends. Adjusted EBIT Margin means Adjusted EBIT divided by net sales.
Adjusted EBITDA means Adjusted EBIT adjusted for depreciation and amortization. Adjusted EBITDA Margin means Adjusted EBITDA divided
by net sales. GCP uses Adjusted EBIT and Adjusted EBITDA as performance measures in significant business decisions.
Adjusted EBITDA and Adjusted EBITDA Margin do not purport to represent income or liquidity measures as defined under United States
generally accepted accounting principles, and should not be considered as alternatives to such measures as an indicator of GCP's
performance. These measures are provided to distinguish the operating results of GCP's current business.
38©2016 GCP Applied Technologies Inc. | Confidential