Momentive Announces Third Quarter 2016 Results

MPM Holdings Inc. ("Momentive" or the "Company") (OTCQX: MPMQ) today announced results for the third quarter ended September 30, 2016.

"We are pleased to report solid third quarter results and continued progress on our ongoing transformation initiatives," said Jack Boss, Chief Executive Officer and President. "Our results reflect solid operational performance and continued growth in our specialty silicones portfolio, despite a relatively weak global economic environment. Earlier this month, we completed an important first step at our Leverkusen facility as part of our journey to transform Momentive's global siloxane footprint. We have now ceased siloxane production at Leverkusen and begun sourcing related intermediates under long-term third party contracts and from other Momentive global sites. We expect this initiative will provide for $10 million of savings on a run-rate basis and remain focused on making strategic investments in our leading specialty technologies and cost structure to drive long-term growth and profitability."

Third Quarter 2016 Results

Net Sales. Net sales for the three months ended September 30, 2016 were $567 million, an increase of 1% compared with $559 million in the prior-year period. The increase in net sales was driven by higher silicone volumes and improved product mix, partially offset by lower quartz sales.

Segment EBITDA. Segment EBITDA for the three months ended September 30, 2016 was $66 million, an increase of 61% compared with $41 million in the prior year period. The increase in Segment EBITDA was driven primarily by improved demand in electronics and silanes, production efficiencies, and raw material deflation in the silicones segment. See "Non-U.S. GAAP Measures" and Schedule 4 to this release for further information regarding Segment EBITDA for a reconciliation of Segment EBITDA to net (loss) income.

Segment Results

Following are net sales and Segment EBITDA by reportable segment for the third quarter ended September 30, 2016. Corporate is primarily corporate, general and administrative expenses that are not allocated to the operating segments, such as certain shared service and administrative functions.

Net Sales (1) :

(in millions)

Three Months Ended September 30,
Nine Months Ended September 30,
2016     2015 2016     2015
Silicones $ 524 $ 514 $ 1,563 $ 1,605
Quartz 43   45   $ 126   $ 135
Total $ 567   $ 559   $ 1,689   $ 1,740

  Intersegment sales are not significant and, as such, are eliminated within the selling segment.

Segment EBITDA

Three Months Ended September 30,

Nine Months Ended September 30,
2016   2015 2016   2015
Silicones $ 69 $ 42 $ 189 $ 154
Quartz 6 6 13 26
Corporate (9 ) (7 )   (29 ) (27 )
Total $ 66   $ 41   $ 173   $ 153  

Global Restructuring Program

As previously announced, Momentive has developed a global restructuring program that is expected to generate $35 million in annual savings. Through September 30, 2016, Momentive achieved $19 million of savings under this program and expects to deliver approximately $27 million of savings in fiscal year 2016. Momentive expects to fully implement its global restructuring program in the first half of 2017 and has accrued approximately $13 million of related expenses, of which approximately $10 million have been incurred to date.