Good day, ladies and gentlemen, and welcome to the Platform Specialty Products of 2015 Fourth Quarter and Full Year Performance Financial Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Carey Dorman, Director of Corporate Development. Your line is now open.

Thank you, and good morning. Please note that in accordance with Regulation FD or Fair Disclosure, we are webcasting this conference call. Any redistribution, retransmission or rebroadcast of this call in any form without the expressed written consent of Platform is strictly prohibited. Before we begin, please take note of Platform's cautionary statement regarding forward-looking statements in the press release and earnings deck issued and posted today in connection with this conference call. Some of the statements made today during this call will be considered forward-looking. All forward-looking statements are based on currently available information. Except as required by applicable law, Platform undertakes no obligation to update such statements as a result of new information, future events or otherwise. In addition, please note that all financial results for the fourth quarter and full year of 2015 discussed during this call are preliminary and unaudited and remain subject to Platform's completion of its year-end accounting closing procedures, final adjustments and other developments. Actual results may differ materially from these preliminary estimates due to many risks and uncertainties. Please refer to Platform's SEC filings for a more detailed description of the risk factors that may affect Platform's results. Please note that the earnings deck relating to today's press release were posted on Platform's website at www.platformspecialtyproducts.com in the Investor Relations section under Events & Presentations. In accordance with Regulation G, Platform is providing a reconciliation of certain non-GAAP to comparable GAAP financial measures in its press release and in the supplemental slides. As a reminder, for the purpose of this call, Platform will be comparing the same periods in 2015 and 2014 on a pro forma and pro forma constant currency basis as management believes that these figures provide a better comparison and understanding of the underlying business results of operations. Pro forma information assumes full period contribution of all Platform's acquired businesses to date. Please review the press release and earnings deck for further information. It is now my pleasure to introduce Rakesh Sachdev, Platform's CEO.

Thanks, Carey. Good morning, everyone, and thank you for participating on our Preliminary Fourth Quarter and Full Year 2015 Performance Call and Webcast. Joining me this morning in New York is our CFO, Sanjiv Khattri; and Ben Gliklich, whom you all know; and on the phone, we have Scot Benson, President of our Performance Solutions business; and Diego Casanello, who is our President of our Ag Solutions business. In addition, we have our Chairman, Martin Franklin, who's also on the line and will be available in our Q&A. And I want to start by saying how excited I am to have joined Platform at such an important time for the company. And I want to thank all the employees, board members, shareholders and other partners who have graciously welcomed me into the Platform family. I took this job because I truly believe in the quality of its businesses and its people, and I saw a tremendous opportunity to build a leading and highly differentiated global specialty chemicals business. I see many parallels between the business I ran at Sigma-Aldrich and the portfolio of businesses that Platform has assembled, particularly the focus on high value-added batch processes, asset-lite production, critical products that provide critical functionality at a relatively low cost, a high-touch sales force and a solutions orientation. At Platform, we are evolving into a customer-focused solutions company. And although the end markets are slightly different, the process of driving organic growth through customer-focused innovation is something I'm very familiar with and will continue to emphasize here at Platform. I will go into more detail on my initial observations later in the call. I want to take a moment to address the Form 12b-25 filed with the SEC this morning. In this filing, we explained that Platform is taking advantage of…

Thank you, Rakesh, and good morning, everybody. Turning to Page 11. 2016 will be a very exciting year for the newly combined Performance Solutions business. Despite our expectations for muted end market growth, we hit the ground running on integration initiatives with a key focus on preserving customers in the short term and share gains in the medium to long term. Both our sales force and our customers are excited about the complete solutions we can now provide with our combined product offerings and increased global scale. On the cost side, I have a high degree of confidence in the estimated $70 million synergy number that we previously announced for this combination. We diversified both our geographic and end market exposures and significantly enhanced our market position. We believe there are revenue synergies that are above and beyond the cost savings. In fact, our strongly held position is that when choosing between organic growth and cost synergies, we will always favor growth. That having been said, we are focused on rationalizing the business and have already taken significant steps in that regard. The emphasis in 2016 will be on redundant G&A and supply chain initiatives. 2017 synergies will come primarily from facility rationalization and continued back-office optimization. Page 12 outlines a good story of our Agricultural Solutions integration. Synergy realization in our ag business has been well ahead of schedule and is a testament to the integration success as we're seeing to date. We continue to outpace our targets for synergy realization, reporting $38 million of synergies in our ag business, which on a run rate basis is more than 50% of our 3-year estimated $80 million target. We feel very good about our ability to meet the synergy target. 2015 cost savings focused primarily on SG&A, supply chain and…

Thank you, Ben, and good morning, everybody. Before I give my prepared remarks, a quick shout-out to our leader Rakesh Sachdev. It is great having him onboard, and I know I speak for the team when I say we are already off to a great start under his leadership. Now as I did last quarter, I plan to spend some time going over the numbers themselves but also updating you various ongoing initiatives and addressing some key questions we have been receiving lately. Some housekeeping first. As a reminder, all of the 2015 full year and fourth quarter numbers we are providing to you today are unaudited and preliminary. As Rakesh mentioned, due to all the acquisition activities, we had a prolonged close, so we elected to take the extra time allowed to finalize the remaining schedules. Please note that we do not anticipate any issues filing within the 15-day extension period. While we are not fully audited yet, I do not expect the preliminary numbers we are sharing with you today to materially change and we do not expect any restatements of prior periods. Our baseline results of both the full year and the fourth quarter of 2015 are impacted by the 3 acquisitions we did in the year, including Alent and OMG Electronic Chemicals and Photomasks business in the fourth quarter. Our actual results impact also includes the impact of Alent and OMG assets for the months of Q4 for which we own them and excludes Arysta for the 6 weeks of 2015 that we did not own that business. Therefore, we also provide pro forma results demonstrating business performance as if we had owned all the acquired businesses beginning on January 1, 2014. This also includes the OM Malaysia business, which we acquired in January of 2016…

Thank you, Sanjiv. We have covered a lot of material today, so I'll be brief with closing. And as you can see on Page 21, as we look forward to 2016, our priorities are pretty clear. We want to continue our successful integration, realize synergies while maintaining a focus on the commercial aspects of the business. We want to exploit the attractive niche growth markets in which we play and think about attractive adjacencies to drive organic growth and find an operating rhythm for the businesses. In 2015, we suffered from a lot of corporate distractions. We need to limit those and focus our effort on operations. Lastly, we want to generate free cash flow. We are focused on asset-lite, high-touch businesses because they have extremely attractive cash flow characteristics. And in getting back to basics, we need to focus on our fundamental principles and cash flow generation as chief amongst them. So with that, operator, please open the line for questions.

[Operator Instructions] Our first question comes from the line of John Roberts of UBS.

It sounded like the adjusted EBITDA in the first quarter for performance materials will be relatively flattish, plus, minuses. And it was down 6% on the same basis in the fourth quarter, I think, year-over-year. So that seems like a pretty big sequential slip in the comps. Maybe you could comment on that.

Again, we don't want to get too specific, John, on the puts and takes. But if you look at some of the dynamics in the Asian market in Q1 and some of the trends that we are seeing overall, I think we felt pretty comfortable making that comment to you. I want to avoid giving you specific numbers on how that would all play out. Overall though, we are about $10 million of headwind just from FX. But even after adjusting for that, we expect it to be lower for all the matters I stated, I think the run rate on ag, and then the full impact of the increased spending on corporate.

Yes. But this was all, excluding FX, I think performance materials again was down 6% in the fourth quarter and the guidance is sort of flattish year-over-year in the first quarter pro forma. I was thinking that maybe it was significant inventory adjustment at year-end maybe that happened and now that's over, and so that's why the pop-back?

I don't think so that is driving it. I think there are some activity Asia is driving it and our continuous improvement in our performance in the industrials business.

They also have some synergies clocking in, in Q1on that side of the business.

And then on the ag segment, again the fourth quarter was plus 1% in sales on a constant currency basis. And it would have been a little higher excluding the inventory adjustment. And EBITDA growth was 6% that you've commented, excluding the inventory adjustment. That seems like just phenomenally strong performance, given all the other stuff we've seen in ag.

Yes. So that's right. So it was 6%, John, in Q4. And as you heard me say, it was a growth of 3% for the full year, excluding -- on a constant currency basis. So I think the ag business has done a tremendous job in Brazil, as I said, in offsetting the FX issues. We've had a great run with our herbicide products that we've been selling in Latin America. And the synergies that we've got were in excess of what we all thought we would get from the ag business. So I think it's a combination of getting the integration synergies, doing the right things what we did in Latin America. And because I think we have more exposure on specialty crops and not just generally on row crops, I think it has given us the ability to grow our sales even in a very tough market. I can turn it over to Diego to see if he wants to add anything. He's on the phone and talk about the ag business.

Okay. Thanks, Rakesh. I have to say, first, I mean, I'm truly excited to be part of the new Platform management team. I have followed Arysta, Chemtura and Agriphar in the past from the sidelines, of course, but it's a great opportunity to lead the combined business. Nothing really meaningful to add to what Rakesh said. I think the fourth quarter, you see many measures kicking off. For example, price adjustments in LatAm, especially in Brazil. You see synergies, of course, developing and having more impact, let's say, later in 2015. So overall, a great performance from the team. And I believe with this starting point, we will profit also in 2016.

And our next question comes from the line of Jon Tanwanteng of CJS Securities.

Can you give us a snapshot of how the acquired Alent business is doing heading into 2016? And how much of the depreciation in the pound affects the year-over-year performance there?

So Jon, I'm going to turn it over here in a minute to Scot. But I can tell you that we are very excited with what we have seen so far with Alent. Scot and his team have done a great job of integrating the businesses. We have announced the new organization, we have established leadership. And I think what we are beginning to see are opportunities that exceed what we've got when we were going into the acquisition of Alent. I'll turn it over to Scot, who runs our Performance Solutions business, to give you some more specifics.

Yes, thank you, Rakesh. Jon, yes, to follow up on Rakesh's comments, we are extremely excited about the progress we've made as it relates to understanding the Alent business, and then integrating the management team. Other than the senior executives at Alent, we have pretty much retained most of the senior management and they are integrated in with our team. And it's going incredibly well. The similarities between the 2 companies in how we operate within the markets has been much more similar than dissimilar, so that's been very exciting. And the businesses are truly even more complementary to each other than we had anticipated going in. So we think we have a tremendous opportunity from a share gain and market penetration perspective going forward and are really, really happy about the way the commercial and research teams have come together in these initial couple of months. So we really couldn't be happier about where we are today.

Got you. Any commentary on the pound exchange rate?

None from me.

I can take that, Scot. We do have sterling exposure. And the way we are structured right now, some of the businesses do go through the U.K. balance sheet, to the extent that the U.K. exchange rate continues to be challenged as it has been in the last 2 or 3 weeks, that will have some impact on us. But I think one needs to step back, and Alent is probably not as good at it than MacDermid, we do have mostly material offsetting. So sales and costs are more or less offsetting each other in most of the major geographies that we operate in. But you're right, if the sterling continues to weaken, we will hurt. Ben, did you want to say something there?

Yes. I would just say if you look at the FX page I covered on the presentation, you'll note that the sterling isn't among our top 5 currencies. It's less than a 5% impact. So while Alent was a U.K.-based company, most of its earnings were actually in the U.S., Asia and Europe in euros. So the pound itself isn't a material headwind.

Got it, that's helpful. And then can you just comment on the ability to extend the Series B preferred out longer than perhaps the April 27 date?

Should I take that, Rakesh?

Sure, if you want. Yes, go ahead, Martin.

Look, very simply, Permira and Platform had the same mutual interest. Frankly, we don't really want to have it extend it anymore than beyond April of next year. In fact, we'd like to, as we said earlier in the prepared remarks, end it up sooner rather later because we see it as an overhang on the stock. But having said that, we needed to extend it. That would be a conversation with -- I'd probably have with Permira. I just don't think that, that's something that we want to do or contemplate at this time.

Our next question comes from the line of Duffy Fischer of Barclays.

A question for Rakesh. As you've come in, you've been in the seat for a couple of months now, how comfortable are you -- or I guess how much have you been able to vet of the company? And the question I get a lot is a situation similar to the oversupply in the North American ag business, how -- are we not worried that there could be other instances like that, where a predecessor company may be oversold or stuff the channel a little bit before it was sold? How much of the company have you in your short time kind of been able to vet and kind of give a seal of approval to?

So as you pointed out, I've been in the company 2 months and I've been, I can say, drinking from a fire hose. I've spent probably more time on the ag side because it's been a very dynamic marketplace. So I spent a lot of time in Latin America. In the brief time I've been there, I was in Brazil. I spent a lot of time with Diego. As you pointed out, North America is where we've had probably the biggest headwinds. But it's also the smallest of all our regions in the ag business. So our biggest region is Latin America, followed by Europe. And I would say both those businesses are doing well. Fundamentally, the folks, and I had a chance to not just to meet the people in Brazil but met with the country managers of most of the countries in Latin America, there's guarded optimism with the way we are selling our products. We have developed this concept of taking a broad portfolio in the ag side. It's not just conventional crop protection chemistries. We are putting those together with seed treatment, with biosolutions, where we clearly have a leadership position. I think we are nimble. When you look at a company like ours, like Arysta, and say how are we different from the rest of the folks, I think we're very quick with our customers. Over the years, I have learned that if you're responsive to the customers, you can win even with the big guys. And I think that's what's happening. I think we have a focus on niche products -- on niche crops. I think we have got the right products, we are offering solutions. So from what I've seen, just to answer your question, I feel cautiously optimistic of what's happening in Latin America, what's happening in Europe. Obviously, North America is a little bit of a wildcard. And it's one where -- I know Diego, of course, is spending all his time in all the regions. But he's spending a disproportionate amount of his time on what we are going to do in North America. So I can turn it back to Diego. Diego, do you want to add anything on the...

Yes, what I can add, Rakesh, I mean, you said it, I mean, a stronger customer focus. I mean, what does it mean in North America specifically? What we are doing there is we're changing from a push strategy to a pull strategy. So really generating demand at farmer level. And despite the consolidated distribution structure in the U.S., making sure that customers are knocking on the door of our distributors and asking for our product. So yes, there is a destocking aspect on high inventories that we found in the channel. But I see a huge opportunity in really replicating the same strategy we're running in other regions of generating demand and focusing on specialty niche segments on our portfolio of innovative products.

Okay. And then if we just flip to your Slide 17, where you have the cash uses, so you can kind do an EBITDA walk. With what you've given us, that would kind of leave $150 million to $200 million of free cash flow. Are there any other cash calls on that money other than the deleveraging story?

I think, Duffy, as we continue to grow the business in ag, we might have some working capital calls. Clearly, working capital management is a key priority and Rakesh is very focused -- is focusing the whole team on that as a priority. But that could be a call on cash flow. And then to the extent that we spend some money on exploiting the synergies, that could be. But I think we wanted to be very transparent and lay these out, these are all markers. Our goal is focused on doing better than the numbers we've given you. So these are all very tangible ways by which we can improve our cash flow.

Our next question comes from the line of Aleksey Yefremov of Nomura Securities.

Just a follow-up on free cash flow. Could you comment what is the level of this working capital investment that you expect in 2016? And do you have a general guidance for free cash flow for this year or if not free cash flow, maybe the level of debt pay-down that you expect in 2016?

Yes, so again, this is Rakesh. On working capital, we have a lot of working capital in the business, and we are going to be looking at ways -- even though we will have growth, I think our goal is try and clearly keep investment in working capital to a minimum, if not actually even getting cash out of it. We're doing some creative things in Latin America. We are doing factoring. We have very successfully done that. We are watching our terms very closely as our bad debt has been extremely well managed. So I think the leakage in working capital, to answer your question, hopefully we're not going to have working capital as a place where we put a lot of money in 2016. We are also going to look at our CapEx, which we are. We're giving guidance of $100 million to, I think, $125 million.

Correct.

But we're going to take a look at that. Outside of that, there's really no other cash requirement other than to paying down debt in the business. And the one area that we're going to look at, where hopefully we'll be more efficient, is on cash taxes. So you haven't asked the question about cash taxes. We have -- the way we are structured today as a company with the legal entity structure, we shouldn't be paying the amount of cash taxes as we do. And we are going to find a way as part of our tax planning process to reduce that. So if anything, that might become a tailwind, but we are not declaring victory as yet.

And switching to crop protection, you provided us numbers about your FX headwinds in 2015. But if you look at your level of prices in Latin America or in Brazil specifically at the end of the year, did you nearly catch up with FX changes at the point? Or would you need to raise prices further to kind of reflect the current foreign exchange?

So there's always a little bit of a lag in terms of -- because in Latin America, we have prices that are tied to the U.S. dollar, but we also have local pricing that indirectly we can raise prices because the farmers there, the growers are actually exporting in dollars. As difficult as it is, they always take the time to give us the increases. We had, I believe, close to 70% of our FX mitigated last year in Latin America. We are going to continue to look at pricing opportunities as we go into 2016. And that's something that we don't comment too specifically because it's a comparative piece for us. But you can be rest assured that Diego and his team are looking at every possibility of pricing opportunities both on the customer side. But as I said, we're also looking at pricing opportunities on the supply side as well, right?

And a final question if I may, switching to electronics and destocking at Alent and to some extent at MacDermid. Do you see the end of this destocking in the first quarter or first half of 2016?

Yes, this is Scot. Yes, that was an event that took place at a major channel partner in the damascene copper space that began early in '15. And we think that they have right-sized their inventory now. So we don't anticipate headwinds from that in '16.

Our next question comes from the line of James Sheehan of SunTrust Robinson.

Guys, could give a sense for what you expect your net debt-to-EBITDA ratio to be at the year-end 2016?

We don't want to get specific. Clearly, capital allocation is something we are good at. Under the leadership of Martin, the board is really focused on it. So I can't give you a specific number. I want you to have just 2 takeaways. Our long-term objective remains 4.5. But most importantly, we are very comfortable operating with a much higher leverage, not only from a covenant point of view but from an operating flexibility point of view. So I don't think we're going to give you a specific target for year-end.

But it's not hard for you to figure out. I mean, we have $4.9 billion of net debt. You know what, we've given you an EBITDA guidance for the year. And you know how much cash we are likely to generate. In fact, hopefully we'll generate more than what we are guiding with, so you can quickly figure out. It's going to take some time to get to the 4.5. We are not going to get there by the end of this year, but that was never the plan.

On the Ag Solutions business, could you give us a sense for some of the subsegments of the business, the regional, the value add and biosolutions? What kind of growth rates are you baking into your expectations for the year?

Let me ask Diego to step in and answer those questions.

Yes. So I mean, obviously, our focus is strongly on niche segments. I mean, biosolutions is one of those. The biosolutions market growth is at a much faster pace than other segments in the ag business. Now overall, if you look at the market in 2016, the expectations, and you see that there are some estimations already out there, we talked about an overall market that is -- will be down in the single digits in 2016. However, these markets are expected to grow faster than the average of the market. So we will certainly profit out of that. We have growth expectations in LatAm. We have growth expectations in Eastern Europe. We are also expecting to continue to grow in Africa. All in all, I think we're well positioned to grow on a constant exchange rate level in 2016.

And our next question comes from the line of Lauren Gallagher of Crédit Suisse.

On the preferred, you've obviously mentioned that you are interested in potentially settling it sooner rather than later. I guess a 2-part question. One, would you anticipate not extending this beyond -- the preferred beyond October's maturity? And second, any kind of thoughts on how you think about going to settle it from a cash perspective at this point?

Yes. Well, as we said, we've already extended it to April of next year.

At our option.

As I've said, our option. And as Martin said, we look at opportunities to try and get that overhang behind us. But always, we always have the option and are able to probably negotiate if we want to extend that. But we'll be looking at what we might want to do even ahead of April 2017 on the note.

And one comment I would make, Lauren. Despite the overhang it may have in terms of sentiment, it is not in any way impacting our operating flexibility. There's not a single decision we have taken which has been impacted by this. We are operating and focused on what I call back to the basics.

So just to clarify, you already have chosen to extend it from October to April?

No. To be clear, it's at our option. So why would we make that decision today?

Yes.

And then I guess kind of a follow-up, do you anticipate using some of your secured capacity to settle the cash components?

Again, Lauren, as I've said...

Can I start? We haven't made any decision. And when we've made a decision as to what we're going to do, we'll let everybody know. But at this point, we have full flexibility on how we deal with that note. So why would we give up any of our flexibility? So we're just going to keep all of our options on the table. I think that's the only way we can fairly describe to you because we don't want to say we're going to think about doing something in one way and do it in a different way, and then be told we misled anybody. We're keeping all our options on the table.

Okay, understand. And then a follow-up or a question quickly on the synergy targets. Obviously, you continue to kind of keep faster realization on the outside. Is there any chance you kind of increase that synergy target at some point throughout '16?

We're executing well against our synergy targets. If we have reason to believe we'll do far better, we will certainly communicate that with the market. In the meantime, those numbers remain unchanged.

And I'm showing no time for the question-and-answer session.

Great. Well, thank you, everybody, for being on the call.

We'll see you in a couple of months. Thank you all.

Ladies and gentlemen, thank you for participating in today's conference That does conclude today's program. You may all disconnect. Have a great day, everyone.