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Investor Relations Handout
Metals & Minerals Infrastructure Rail Industrial
The world’s largest providerof on-site, outsourcedservices to the global metalsindustries.
-
A global leader in highlyengineered rental scaffolding,shoring, concrete formingand other access-relatedservices. A solutions
A global leader in railwaytrack maintenanceequipment, services andsolutions
A market leader in energy-efficient air-cooled heatexchangers, heat transferequipment, and industrialgrating products.,
mineral-based products for arange of commercial andindustrial uses.
Environmental solutions forlobal resources recover .
provider to majorinfrastructure, industrial plantmaintenance, andconstruction projects.
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8/3/2019 Harsco Investor Presentation
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Safe Harbor Statement
This program contains forward-looking statements based on management’s current expectations, estimates
and projections. All statements that address expectations or projections about the future, including statements
a out t e company s strategy or growt , pro uct eve opment, mar et pos t on, expecte expen tures an
financial results are forward-looking statements. Some of the forward-looking statements may be identified bywords like “may,” “could,” “believes,” “expects,” “anticipates,” “plans,” “intends,” “projects,” “indicates,” and
similar expressions. These statements are not guarantees of future performance and involve a number of
risks, uncertainties and assumptions. Many factors, including those discussed more fully elsewhere in this
release and in documents filed with the Securities and Exchange Commission by Harsco, particularly its latest
annual report on Form 10-K and quarterly report on Form 10-Q, as well as others, could cause results to differmaterially from those stated. These factors include, but are not limited to, changes in the worldwide business
environment in which the Company operates, including as a result of the current global financial and credit
crisis; changes in the performance of the equity and debt markets; changes in governmental laws and
regulations; market and competitive changes, including pricing pressures, market demand and acceptance for
new roducts services and technolo ies unforeseen business disru tions in one or more of the man
countries in which the Company operates; the seasonal nature of the Company’s business; our ability to
successfully enter into new contracts and complete new acquisitions in the timeframe contemplated; the
financial condition of the Company’s customers; the successful integration of the Company’s strategic
’
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, .
Company undertakes no duty to update forward-looking statements.
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Harsco Profile
.Revenue Mix
Services 83%Harsco Metals &
ro uc s
International 67%
U.S. 33%
nera s
$1.46
Footprint
Total number of countries: 52
Number of locations: Approximately 350HarscoInfrastructure
48%
34%
2010 Geographic Revenue Mix
Harsco
Industrial
$0.23
$1.0310%
ROW25%
Harsco Rail
$0.31
NorthAmerica
36%
Western
Europe39%
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Strategic Overview
2008-2010 2011 2012-2015
Environment: Significant decline Stabilization of Infrastructure Full realization of benefits fromn revenues, an ue oglobal financial and economic
crisis
Countermeasures: Significantcost reductions and lowering of
us ness
Metals, Minerals, Rail, andIndustrial continue to perform well
Management team growing
rans orma on n a ves
Full benefits from restructuringinitiatives
Benefits from investments inrea -even po nt o a us ness
platforms
Key hires and organizational
reorganization and transformation
cohesiveness
Benefits from restructuring,countermeasures and
transformation are realized andsustained
emerging markets realized
Benefits from use of DiscretionaryCash Flow
Growth in revenues, EPS and Considerable investment in:
Talent; Lean ContinuousImprovement; Global SupplyChain; Developing EmergingMarkets; Innovation; Branding;and Global Computer and
Improvement in revenues, EPSand EVA
Strong discretionary cash flowand flexible balance sheet
EVA
Gradual improvement in non-residential construction markets isa plus
ng neer ng ystems
Strong free cash flow generation.Maintained a flexible and strongbalance sheet; retainedinvestment grade ratings
Investment in growth projects,principally Metals, Minerals, andRail
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Transformation Transition Future
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Balanced Capital Allocation Strategy
Astute Capital AllocationDividends
Return to Shareholders: Dividends andShare Repurchases
R e d u c t i o
n
Organic Growth: Growth CAPX andJoint Ventures
Inorganic Growth: Acquisitions
D e b
CASH
FLOW(1)
Debt Reduction
A c q u
i s i t i o
n s
S h a r e
R e p u r c h a s e s
(1) Discretionary Cash Flow Represents: Cash flow from operating activities as noted on the Company's
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cash flow statement plus asset sales, less maintenance capital expenditures, that is CAPX required tosustain current revenues stream. This excludes all growth CAPX. Management believes discretionary cashflow provides a relevant measure of liquidity and a useful metric for assessing Harsco's ability to funddividends, debt reductions, acquisitions, growth CAPX and share repurchases
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Harsco Corporation
Roadma to 2015 Revenue
$4.2B
Gradual recovery of keynonresidential construction
$3.0B markets, 2012 - 2015
No material change in FX ratesfrom current levels
Contribution from key organicinvestments in Metals, Mineralsand Rail
2010 2011 2012 2013 2014 2015 Target
Assumes no acquisitions
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Harsco Corporation
2015 EPS Growth Com onents Brid eIncremental earnings potential range
$2.30 - $3.15
Additionalimpact
2010Actual
$0.91
$0.50 - $0.75
$0.75 - $1.00
$0.50 - $0.75$0.55 - $0.65
? ? ?
2010 (E) Infrastructure
Business
Restructuring
Global Supply
Chain and Lean
Initiatives
Organic Growth
Projects
Use of
Free Cash Flow
Stronger Market
Recovery /
Acquisitions
Procurement
Dividends
Joint Ventures
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Offshore Services
Consolidation of GlobalAdministration Centers
Share Repurchases
Debt Reduction
(E) Excludes fourth quarter Infrastructure restructuring charge
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Harsco Metals and Harsco Minerals
Harsco Metals
Provides environmental and lo istics
2010 Geographic Balance
solutions to metals producers in the
steel, aluminum, zinc and copperindustries. Operations at over 160 sitesin more than 30 countries
America
20%
WesternEurope
45%
Rest of theWorld35%
Harsco Minerals
Provides environmental services to the Sources of Revenue Bridge 2010-2015.
Harsco Minerals utilizes innovative metalrecovery to give customers a costeffective raw material for productionwhile manufacturing a full range of
4 2 0
, 5 8 1
4 9 1
1 , 9
7 5
161
(90)
140 115 104125
CAGR 6.8%
Organic New
m nera pro ucts serv c ng t e a ras veblasting, roofing, agriculture, turf, andmining industries
1
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2 0 1 0
∆ i n
C u s
t o m e r
V o
l u m e
A d j u s
t e d
B a s e
L o s
t t o
C h u r n
B a s e
R e
t e n
t i o n
h a r e
G a
i n
M a r k e
t
o s
i t i o n
i n g
A d j a c e n
t
M a r k e
t s
e w
L i n e s
B u s
i n e s s
2 0 1 5
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S P N o f
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Harsco Metals and Harsco Minerals
• Engineered Solutions
• Indispensible Partner
• Services
• Vendor - Suppliers
’Leveraged
• Value-added Products
–Disaggregated
• Landfills
• Environmental Solutions andInnovations
• Emerging Markets
• Commodity
• Developed Markets
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Harsco Infrastructure
2010 Challen es & Accom lishmentsHarsco Infrastructure
A global leader in highly engineered rental scaffolding, shoring,concrete forming and other access-related services. A
2010 Geographic Balance
solutions provider to major infrastructure, industrial plant
maintenance, and construction projects. Operating atapproximately 144 branches in approximately 38 countries
Restructuring Summary
North
America18%
WesternEurope
Rest of theWorld
Charge of over $84 million taken in 4th Quarter 2010.Removed over 80 locations and approximately800 people across all regions of the world,with the focus being North America and Europe
In total for 2010, reduced locations by approximately 110
24%
ranc es or
2011 savings expected to approximate $43 million,with full annualized savings over $60 millionbeginning 2012
Accom lishments
2015 Target
North
Integrated Harsco Infrastructure into one global platform
Integrated all acquisitions
Successfully executed global restructuring of the business
Increased marketing and sales focus
America18% WesternEurope
49%Rest of theWorld33%
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Implemented global asset management system
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Harsco Infrastructure
Business Model Transformation
• Globally integrated & leveraged
• Standardized and disci lined
• Silo’d – Highly Disaggregated
• O erate different standards
stor c tate – an u ure a e
• Proactive sales structure - partners
• Knowledge based solutions providers
• Order takers - vendors
• Rental suppliers• Holding traditional – growing emerging
• Effective product & CAPX managementwith global focus
• Focused on traditional markets
• Lack of product & CAPXDiscipline with regional focus
• Streamlined decision process
• Balance short and long term goals
• Consultative decision process
• Driven by short term objectives
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Harsco Infrastructure
Market Sector
arge arge
Maintenance
Infrastructure –Heavy Civil
IndustrialMaintenance
IndustrialMaintenance
Commercial and
Infrastructure –Heavy Civil Infrastructure –
Heavy Civil
u - am yCommercial and
Multi-FamilyCommercial and
Multi-Family
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Harsco Infrastructure
2011 & Be ond Takeawa Messa eRestructuring – Platform Optimization and Product Management
Right-sized the platform and structure to align with target opportunities and market focus
Reduced break-even point and increased focus on variable vs. fixed platform to better manage the
impact of market variance
Rationalized inventory and increased inventory effectiveness with a global inventory management
Strategic Focus – Sales Effectiveness
Proactivel levera e ke client relationshi s and tar etlarger, complex projects in both existing and remote locations
Increase focus and market share in emerging marketsand maintain position in traditional markets
lower total execution costs – knowledge-based solutions
Revenues targeted CAGR of 7% through 2015
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Harsco Rail
Stron Global Markets Su ort Or anic Growth
Europe
• Additional contract service opportunities• New product development
Canada
• New equipment sales• NTC contracting
China• 11th 5- ear lan com lete 2012
• Equipment purchases
Ind ia
• Dedicated Freight Corridor
• Track Renewal
Nor th Amer ica
• High Speed Rail investment• New equipment for Ballast & Switch maintenance• Expanded service solutions
Middle East
• 12th 5-year plan begins 2011-12• Metro market• Private operators• Parts & service growth
• au con nues rainvestment
• UAE new track project• GCC railway network
Brazi l
• New Track Construction• Grinders• Tie equipment
Aust ra l ia• Equipment manufacturing & sales• Contracting services
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Global Railway Track Maintenance Solutions
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Harsco Rail
Balanced Portfolio 2011
North America
Equipment
58%
Parts21%
China
28%
Services Western Europe13%
19%
a ance pro uc serv ce por o o s reng ens mar e pos on New product development leading to market share growth and 15+ year Parts opportunity
Globalizin Parts business …70 Harsco Rail Grinders in China b 2012
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Harsco Rail
Sources of Revenue Brid e 2010-2015
450
In USD Millions
$50
350
400 CAGR 4.8%
$55($88)
250
300
$317
100
150
0
50
2010 China M OR M arket Share New Products Ne w Se rv ice s 2015
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Excludes potential acquisitions
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Harsco Industrial
CAGR = 14%Projected Revenue = $450 million
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Excludes potential acquisitions
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Harsco Corporation
Takeawa Messa e Transformation journey will deliver considerable benefits in the next five years
Our sound balance sheet, underpinned by strong discretionary cash flow, provides financialflexibility to continue investing in growth
Significantly lower cost structure and operating leverage provides a solid foundation forimprovement in earnings and EVA
Emerging markets/rest of the world presence continues to grow and will reach 35% by 2015
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