kraton corporation investor presentation december 2019

Kraton Corporation Investor Presentation

December 2019

Kraton Overview 2

DisclaimersForward Looking Statements

Some of the statements and information in this presentation contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This presentation includes forward-looking statements thatreflect our plans, beliefs, expectations, and current views with respect to, among other things, future events and financial performance. Forward-looking statements are often identified by words such as “outlook,” “believes,” “estimates,”“expects,” “projects,” “may,” “intends,” “plans”, “on track” “on trend”, or “anticipates,” or by discussions of strategy, plans or intentions, including our expectations regarding all matters described on the slides titled “2019 ModelingAssumptions” and “2019 Outlook”, or the sections titled “Plan for 2019 and Beyond”; as well as our expectations for targeted debt reduction, 2019 Adjusted EBITDA, growth expectations, capacity additions, operational reliability, ourshare repurchase program and the actions pursuant to, and results from our strategic plan, including but not limited to a potential sale of our Cariflex business.

All forward-looking statements in this presentation are made based on management's current expectations and estimates, which involve known and unknown risks, uncertainties, and other important factors that could cause actualresults to differ materially from those expressed in forward-looking statements. These risks and uncertainties are more fully described in our latest Annual Report on Form 10-K, including but not limited to “Part I, Item 1A. Risk Factors”and “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” therein, and in our other filings with the Securities and Exchange Commission, and include, but are not limited to, risks relatedto: Kraton's ability to repay its indebtedness; Kraton's reliance on third parties for the provision of significant operating and other services; conditions in the global economy and capital markets; fluctuations in raw material costs;limitations in the availability of raw materials; competition in Kraton's end-use markets; natural disasters and weather conditions and other factors of which we are currently unaware or deem immaterial. Readers are cautioned not toplace undue reliance on our forward-looking statements. Forward-looking statements speak only as of the date they are made, and we assume no obligation to update such information in light of new information or future events.

GAAP Disclaimer

This presentation includes the use of non-GAAP financial measures, as defined below. Tables included in this presentation reconcile each of these non-GAAP financial measures with the most directly comparable GAAP financial measure.For additional information on the impact of the spread between the FIFO basis of accounting and estimated current replacement cost (“ECRC”), see our Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

We consider these non-GAAP financial measures to be important supplemental measures in the evaluation of our absolute and relative performance. However, we caution that these non-GAAP financial measures have limitations asanalytical tools and may vary substantially from other measures of our performance. You should not consider them in isolation, or as a substitute for analysis of our results under GAAP in the United States.

EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin: For our consolidated results, EBITDA represents net income (loss) before interest, taxes, depreciation and amortization. For each reporting segment, EBITDA represents operatingincome before depreciation and amortization, disposition and exit of business activities and earnings of unconsolidated joint ventures. Among other limitations, EBITDA does not: reflect the significant interest expense on our debt orreflect the significant depreciation and amortization expense associated with our long-lived assets; and EBITDA included herein should not be used for purposes of assessing compliance or non-compliance with financial covenants underour debt agreements since it calculation differs in such agreements. Other companies in our industry may calculate EBITDA differently than we do, limiting its usefulness as a comparative measure. As an analytical tool, Adjusted EBITDA issubject to all the limitations applicable to EBITDA. We prepare Adjusted EBITDA by eliminating from EBITDA the impact of a number of items we do not consider indicative of our on-going performance but you should be aware that in thefuture we may incur expenses similar to the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Inaddition, due to volatility in raw material prices, Adjusted EBITDA may, and often does, vary substantially from EBITDA and other performance measures, including net income calculated in accordance with U.S. GAAP. We define AdjustedEBITDA Margin as Adjusted EBITDA as a percentage of revenue (for each reporting segment or on a consolidated bases, as applicable).

Adjusted Gross Profit and Adjusted Gross Profit Per Ton: We define Adjusted Gross Profit Per Ton as Adjusted Gross Profit divided by total sales volume (for each reporting segment or on a consolidated basis, as applicable). We defineAdjusted Gross Profit as gross profit excluding certain charges and expenses. Adjusted Gross Profit is limited because it often varies substantially from gross profit calculated in accordance with U.S. GAAP due to volatility in raw materialprices. Certain amounts reported in the prior periods have been reclassified to conform to the current reporting presentation.

Adjusted Diluted Earnings Per Share: Adjusted Diluted Earnings Per Share is Diluted Earnings (Loss) Per Share excluding the impact of a number of non-recurring items we do not consider indicative of our on-going performance.

Net Debt and Consolidated Net Debt: Net debt for Kraton is total debt (excluding debt of KFPC due to its own capital structure) less cash and cash equivalents. Consolidated net debt is Kraton net debt plus debt of Kraton FormosaPolymers (KFPC) joint venture less KFPC’s cash and cash equivalents. Management believes that net debt is useful to investors in determining our leverage since we could choose to use cash and cash equivalents to satisfy our debtobligations. Consolidated Net Debt, as adjusted for foreign exchange impact accounts for the FX effect on the Euro Tranche of our Term Loan.

Consolidated Net Debt Leverage Ratio: The consolidated net debt leverage ratio is defined as consolidated net debt as of the balance sheet date divided by Adjusted EBITDA for the twelve months then ended. Our use of this term mayvary from the use of similarly-titled measures by others in our industry due to the potential inconsistencies in the method of calculation and differences due to items subject to interpretation.

Kraton at a Glance

Kraton Overview 4

4

Our innovations

improve the quality of

countless everyday

items that enhance

your way of life.

Baby DiapersOur innovations provide

the excellent recovery to

withstand repeated pull

up-and-down cycles along

with stretch, fit and

breathability so young

ones can continue

to be on the move.

Roads Kraton innovations allow for the

development of highly modified

asphalt designed to withstand

extreme hot or cold weather as well

as high traffic.

A longer lasting road and shorter

reconstruction time allow for a safer

driving experience while reducing

carbon footprint.

Fiber Optic Cables In a constantly connected world, we

rely on fiber optic cables to keep our

cellphone data and internet lines

running.

Kraton polymers protect the cable’s

fiber by reducing the likelihood of

water penetration, allowing for fast and

continuous contact with everyone

around you.

Wood CoatingsA protective layer of alkyd-

based coating or varnish will

protect your wooden floors

and stairs while keeping

them looking new.

Kraton – A Part of Your Daily Life

Kraton Overview

Our Products

Our SBC polymers are a class of

thermoplastic elastomers, which is

a plastic material that behaves like

rubber, delivering both strength

and elasticity.

Our biobased pine chemistry enables

numerous industries to replace non-

renewable resources with high-

performance, sustainable

alternatives.

5

Kraton Overview 6

Kraton’s History - 50+ Years of Innovation and Growth

6

Kraton Overview 7

Kraton At a Glance

Revenue

$2.0 Billion

Adjusted EBITDA (1) Margin

18.8%

(1) See our earnings releases, available under the Investor Relations tab of our website at www.kraton.com, for reconciliations of GAAP financial measures to non-GAAP financial measures.(2) 2018 Revenue

Polymer Segment

$1.2 Billion(2)

Cariflex (15%)▪ Surgical gloves & condoms

▪ Medical Applications

▪ Coatings

▪ Specialized footwear

Specialty Polymers (33%)▪ Consumer products

▪ Wire & cable insulation

▪ Diapers & personal care products

▪ Lubricant additives

▪ Medical applications

Performance Products (52%)▪ Paving & roofing

▪ Packaging & Industrial adhesives

▪ Printing plates

▪ Personal care

Chemical Segment

$790 Million(2)

Adhesives (36%)▪ Tapes & labels

▪ Assembly

▪ Packaging

▪ Pavement marking

Performance Chemicals (58%)▪ Coatings

▪ Fuel additives

▪ Metalworking fluids & lubricants

▪ Oilfield chemicals

▪ Mining

▪ Paper sizing & spot markets

Tires (6%)▪ High performance tires

▪ Winter tires

▪ All-season tires

Segment Highlights

Kraton Overview

http://www.kraton.com/

Kraton Corporation | December 2019 Kraton Overview 8

Organic Growth

Portfolio Management

Operational Excellence

Capital Discipline

Kraton’s Strategic Focus

▪ Targeted Innovation

▪ Continued Portfolio Shift

▪ Commercialization of New Products

▪ Disciplined approach

▪ Best owner mentality

▪ Cost Competitiveness

▪ Capability & Process Improvement

▪ Total Quality

▪ Bench Strength

▪ Work safely

Expand

Specialty

Portfolio

▪ Focus on cash generation and debt reduction

▪ Maintain Prudent Capital Structure

▪ Geographic and End-market Expansion

▪ Application Development

▪ Leverage Capacity Expansions

Kraton Overview 9

Wesseling, GermanyManufacturing Facility

Berre, FranceManufacturing Facility

Belpre, OHManufacturing Facility

Paulinia, BrazilManufacturing Facility

Mailiao, TaiwanKFPC JV Manufacturing Facility

Kashima, JapanJV Manufacturing Facility

Dover, OHManufacturing Facility

Savannah, GAManufacturing Facility

“BLS” acidulation capabilities

Pensacola, FLManufacturing Facility

Panama City, FLManufacturing Facility

“BLS” acidulation capabilities

Niort, FranceManufacturing Facility

Sandarne, SwedenManufacturing Facility

Oulu, FinlandManufacturing Facility

Gersthofen, GermanyManufacturing Facility

Kraton refineries located in close proximity to some of the world’s largest kraft pulp supplies

Kraton’s Global Footprint

Kraton’s Innovation Focus

Kraton Overview 11

Best-in-class positions across markets, supported by

focus on innovation

Best-in-class margins across our segments

• Polymer margins >$1,000 per ton

• Chemicals margins of 15-20%

Our innovation process is driven by inside-outand outside-in approaches

• Develop breakthrough technologies

• Joint development programs

• Mega trends focus

$40+ million annual R&D investment

Global R&D footprint

• Houston, Savannah, Amsterdam, Shanghai

210 R&D scientists, engineers and staff members worldwide

Approximately 1,400 patents underpinning robust proprietary technology in specialty chemical portfolio

Kraton Overview 12

42%

34%

24%

Polymer Segment -Target Growth Markets

12

Oil Gels IV Bags, Tubing Protective Films Oilfield Chemicals Soft Skins

ADDRESSABLE MARKET

▪ Fiber Optic Cable

▪ Post-tensioning

gel opportunity

being validated

in various regions

▪ Health & Beauty

Gels: Global

strategy in

development for

market

penetration

▪ Defining

NextGen

polymer for IV

films to manage

competitive

market

▪ Large market

share in high peel

segment

▪ Polymer solution

delivers unmet

market needs vs

acrylics & other

competitive HSBC

polymers

▪ New polymer

development for

medium peel PF

underway

▪ New synthetic

suspension

additives

application

▪ GM-PATAC

program on

track for launch

▪ Additional IMSS

programs

▪ 2nd Generation

IMSS technology

improvements

Protect and Promote Growth- Satisfy Unmet Needs

▪ Innovation in stable/

light color rosin

esters to meet future

market

requirements: Best in

Class Biobased Rosin

Ester

▪ Biobased

certification provides

transparency and

credibility to our

customers

▪ Kraton DX0222 for

Reactive, Higher

Temperature

Resistance Adhesives

Applications

Adhesives

Kraton Overview 13

42%

34%

24%

Chemical Segment - Target Growth Markets

13

Adhesives Roadmarking Tires Dispersions Coatings

▪ Kraton with leading

position for

renewable bio-based

Tackifiers

▪ Established and

continuously

growing market

▪ Kraton most

recently introduced

next generation of

Rosin Esters

▪ These products

combine proven

advantages of Rosin

Esters with superior

color

▪ Market with

attractive growth

rates

▪ Major drivers:

Safety, self-driving

vehicles, longevity

of Roadmarking

▪ Kraton pre-launched

a unique

Roadmarking

product combining

our Polymer and

Chemical

technologies

▪ Focus on Tread

Enhancement

Additives (TEA)

▪ Kraton with

leading position in

TEA market with

attractive growth

rates

▪ Kraton most

recently launched

our new

SYLVATRAXX 8000

series

▪ Market for water-

borne tackifier

dispersions continues

to grow

▪ Asia Pacific market

with highest growth

rates

▪ Kraton in final phase

to launch our first

Dispersions

manufacturing

facility in Asia

▪ Coatings markets

with increasing

demand for

sustainable products

▪ Our Pine based Fatty

Acids combine

excellent

performance

attributes & superior

sustainability

features

▪ New TOFA grades

with superior colour

in customer tests

Pushing the limits of where our established Chemical Products can be taken

ADDRESSABLE MARKET

Kraton Overview 14

Structural Trends in Asia Driving Future Demand for HSBC and USBC

Global

HSBC&USBC

Demand

Drivers

1

2

3

4

5

Infrastructure

Spending

Automotive

Market

Increase of

Living Standard

5G Networks

Pollution

Control

▪ New roads & highways across Asia, China Belt & Road

initiative

▪ India and SEA countries moving towards PMB

▪ Continued growth or regional automotive market

▪ New design of EV cars provides opportunities for SEBS

▪ Increased demand for higher quality food packaging

▪ Increase in medical & FDA standards requiring high

purity products

▪ Continued investment in optical fiber networks

▪ Increased demand for advanced printing plates

▪ Stringent solvent emissions standards driving hot melt

adhesives

▪ Increased plastic recycling targets

14

SBS Paving

Grades

IMSS, LMW

Grades

SBS & LMW

Grades

SEPS, new

CCL

Technology

LMW Grades

Polymer Segment

Kraton Overview 16

Polymer Manufacturing - Overview

#1 Monomer Preparation & Polymerization

Styrene, Butadiene and Isoprene are monomers used in the Polymers segment. These

raw materials need to be purified before going to the reactor to start the polymerization

process. Polymerization is the process of creating a long chain of monomers which stay

in a solvent phase initially. A unique feature of Kraton polymers is their block structure.

There is a special category of Kraton polymer that is hydrogenated (Kraton G) and

functionalized (Kraton FG) – enabling enhanced characteristics in the final product.

#2 Polymer Recovery from Solvent

The solvent in which the polymer is dissolved is removed subsequently. By identifying

and mitigating loss spots, solvent recovery is optimized. This recovered solvent is

purified and then recovered back to the polymerization reactor. Process optimizations

that reduce the amount of energy required in the process reduces natural gas or oil

consumption.

#3 Drying & Final Packaging

New technologies can help prevent product losses over the manufacturing process.

Polymers can have different shapes and sizes, depending on the grade. The final step of

the process is the removal of water, after which packaging takes place and products are

prepared for shipping.

Kraton Overview 17

$147 $167 $183

$223 $215

12%

16%17%

19% 18%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

$-

$50

$10 0

$15 0

$20 0

$25 0

$30 0

$35 0

$40 0

2014 2015 2016 2017

Adj. EBITDA Adj. EBITDA Margin

Americas40%

EMEA32%

Asia Pacific 28%

Revenue by Geography

Specialty Polymers

33%

Performance Products

52%

Cariflex15%

Revenue by Product Group

Polymer Segment Overview

Kraton invented Styrenic Block Copolymers (SBCs), which are highly-engineered polymers used to impart specific properties to a wide

variety of end use products

Kraton remains a leading global producer of SBCs, and within the Polymer segment, produces three primary product families

Unhydrogenated SBCs Hydrogenated SBCs CariflexTM isoprene rubber and isoprene rubber latex

Strategically focused on enhancing portfolio profitability through application of R&D and portfolio shift to higher-value products and

execution of cost-reset initiatives, to deliver $70 million of cost reductions

(1) See our earnings releases, available under the Investor Relations tab of our website at www.kraton.com, for reconciliations of GAAP financial measures to non-GAAP financial measures.

$ in millions

Revenue breakdown (2018) Historical Adjusted EBITDA(1) performance

2018


Kraton Overview 18

Unhydrogenated SBC’s

(SBS, SIS, SIBS)

Performance Products

(USBC’s)

Polymer modified asphalt,

tapes, labels non-woven

adhesives and industrial

adhesives

Hydrogenated SBC’s

(SEBS, SEPS)Specialty Polymers

(HSBC’s)

Soft Skin, Personal

Care, IV bags, Medical

Tubing,

Lubricant Additives

Isoprene rubber (IR)

and isoprene rubber

latex (IRL)

CariflexTMSurgical gloves, Condoms

Medical stoppers,

Cold seal adhesives

Monomers Products BusinessEnd Use

Applications

Butadiene StyreneIsoprene

Polymer Segment - Overview

Butadiene StyreneIsoprene

Isoprene

http://en.wikipedia.org/wiki/1,3-Butadiene

http://en.wikipedia.org/wiki/1,3-Butadiene

Chemical Segment

Kraton Overview 20

The Process from Pine to Product

#1 Tall Oil

Black liquor soap - a sidestream of the kraft pulp process - is converted to

crude tall oil. We capture the valuable substances contained in tall oil

and turn them into specialty chemicals in our biorefineries.

#2 Processing

The tall oil is pumped into our bio-refinery. Here it is distilled to extract

valuable materials. We produce tall oil fatty acids, tall oil rosin, distilled

tall oil and tall oil pitch. We call these fractions.

#3 Product Development

The fractions are refined and upgraded into a wide range of biobased

specialty chemicals. These are sold to customers who seek superior

product performance. By replacing fossil-based chemicals, customers also

achieve their sustainability goals. Our biobased products enable

customers to improve product performance, reduce GHG emissions and

enable the reuse of materials.

Kraton Overview 21

Americas46%

EMEA39%

Asia Pacific 15%

Revenue by Geography

Performance Chemials

58%

Adhesives36%

Tires6%

Revenue by Product Group

Chemical Segment - Overview

(1) See our earnings releases, available under the Investor Relations tab of our website at www.kraton.com, for reconciliations of GAAP financial measures to non-GAAP financial measures.

$ in millions

Through its Chemical segment, Kraton refines and further upgrades two primary feedstocks, Crude Tall Oil (“CTO”) and Crude Sulfate Turpentine (“CST”), into specialty chemicals. CTO and CST are wood-pulping co-products and as such, the Chemical segment’s product offering is based upon renewable resources

Kraton offers high value-added products in three target markets - Adhesives, Performance Chemicals and Tires - that offer strong potential for growth

Kraton has an advantageous feedstock position via a long-term supply agreement with International Paper

Kraton’s chemical business has a stable and diverse customer base with long-standing relationships in a broad array of end markets

Revenue breakdown (2018) Historical Adjusted EBITDA(1) performance

$192 $179 $171 $151 $163

20%

23%24%

20% 21%

10%

15%

20%

25%

30%

$-

$50

$10 0

$15 0

$20 0

$25 0

$30 0

$35 0

$40 0

2014 2015 2016 2017

Adj. EBITDA Adj. EBITDA Margin

2018


Kraton Overview 22

Raw Materials

FractionsSpecialty

ChemicalsEnd Use

Applications

Crude Tall Oil

(“CTO”)

Crude Sulfate

Turpentine

(“CST”)

Tall Oil Fatty

Acid (“TOFA”)

Dimer Acids

Polyamide Resins

Adhesives

Tires

Performance Chemicals

Distilled

Tall Oil (“DTO”)

Rosin Resins

Dispersions

Tall Oil

Rosin (“TOR”)

Upgraded Rosins

Insoluble Maleics

Pitch Terpene Resins

AMS Resins

Chemical Segment - Overview

Raw materials are a renewable resource,

derived from the Kraft pulping process

Adhesives

Tires

Performance Chemicals

Sustainability at Kraton

Kraton Overview 24

How We Create Value to Society

Kraton Overview 25

Broad Sustainability Focus

Kraton Overview 26

▪ Our biobased products provide renewable and sustainable solutions

▪ Sourced from responsibly managed forests

▪ Do not compete with land for food crops

▪ Product certification provides transparency and credibility

▪ Kraton has certified 31 product families that cover more than 100 products

▪ Our biobased products create value in many markets, such as adhesives, paints, books, tapes, fragrances, roofing materials, pavements, road markings, car tires, and fuel additives

Chemical Segment

Sustainable Bio-based Solutions

Kraton Overview 27

Universal solution for post consumer recycling and industrial waste streams

Features and Benefits:▪ Compatibilizer for PP, PE and Polar contaminants▪ Increases recycled content▪ Superior impact strength▪ Recyclable formulation▪ Cost-effective solution

Proven performance in multiple commercial applications:

▪ Consumer and Industrial Packaging ▪ Reusable bags▪ Luggage

Polymer Segment

Financial Highlights

Kraton Overview 29

(1) See non-GAAP reconciliations included in the accompanying financial tables for the reconciliation of each non-GAAP measure to its most directly comparable GAAP measure.(2) Defined as Adjusted EBITDA as a percentage of revenue.(3) Accounting for lost sales associated with Hurricane Michael, Adjusted EBITDA margin would have been 19.3% for the nine months ended September 30, 2019.

Third Quarter 2019 - Consolidated Results

Three Months Ended September 30, Nine Months Ended September 30,

2019 2018 Change 2019 2018 Change

($ In millions, except per share amounts)

Revenue $ 444.2 $ 523.1 $ (78.9) $ 1,395.9 $ 1,563.9 $ (168.0)

Consolidated net income $ 20.9 $ 43.3 $ (22.4) $ 77.9 $ 51.2 $ 26.7

Diluted earnings (loss) per share $ 0.58 $ 1.31 $ (0.73) $ 2.26 $ 1.53 $ 0.73

Operating income $ 38.1 $ 72.4 (34.3) $ 129.4 $ 217.3 $ (87.9)

Adjusted EBITDA(1) $ 80.1 $ 98.7 (18.6) $ 271.5 $ 292.9 $ (21.4)

Adjusted EBITDA margin(2)(3) 18.0% 18.9% (90 bps) 19.5% 18.7% 80 bps

Adjusted diluted earnings per share(1) $ 0.52 $ 1.02 $ (0.50) $ 2.99 $ 2.49 $ 0.50

Note: May not foot due to rounding.

$38.1

$80.1

$292.9$217.3

$129.4

$72.4 $98.7

$271.5

Kraton Overview 30

Third Quarter 2019 - Polymer Segment Results

(1) See non-GAAP reconciliations included in the accompanying financial tables for the reconciliation of each non-GAAP measure to its most directly comparable GAAP measure.(2) Defined as Adjusted EBITDA as a percentage of revenue.

▪ Adjusted EBITDA(1) down $6.7 million or 11.8% vs. Q3'18

▪ Sales volume declined 10.0% vs. Q3'18▪ Cariflex volume up 18.9% on higher latex sales into

surgical glove applications▪ Specialty Polymer sales volume down 18.9% on lower

sales into lubricant additive applications and weaker demand in Asia and Europe, partially offset by innovation-led volume in N.A.

▪ Performance Products sales volume down 9.8% reflecting lower SBS sales into paving & roofing applications and lower SIS sales into adhesive applications

▪ Gross Profit of $58.5 million and Adjusted Gross Profit(1) of $947 per ton in Q3'19, compared to $981 per ton in Q3'18


2019 2018 Change 2019 2018 Change

($ In millions)

Volume (kT) 75.8 84.2 (8.4) 229.8 249.5 (19.7)

Revenue $ 261.6 $ 321.0 $ (59.4) $ 820.5 $ 948.2 $ (127.7)

Operating income $ 18.3 $ 44.9 $ (26.6) $ 62.5 $ 137.9 $ (75.4)

Adjusted EBITDA(1) $ 50.3 $ 57.0 $ (6.7) $ 158.6 $ 170.5 $ (11.8)

Adjusted EBITDA margin(2) 19.2% 17.8% 140 bps 19.3% 18.0% 130 bps

Q3'19 vs. Q3'18


▪ Adjusted EBITDA(1) down $11.8 million or 6.9% vs. YTD'18

▪ Sales volume declined 7.9% vs. YTD'18▪ Cariflex volume up 11.4% on higher latex sales into

surgical glove applications▪ Specialty Polymer sales volume down 12.1% reflecting

lower sales in to lubricant additive applications and weaker demand in Asia and Europe, partially offset by innovation-led volume in N.A.

▪ Performance Products sales volume down 8.3% on lower sales of SBS into paving & roofing applications and lower sales of SIS into adhesive applications

▪ Gross Profit of $191.2 million and Adjusted Gross Profit(1) of $1,013 per ton in YTD'19, compared to $1,019 per ton in YTD'18

YTD'19 vs. YTD'18

Kraton Overview 31

Third Quarter 2019 - Chemical Segment Results

(1) See non-GAAP reconciliations included in the accompanying financial tables for the reconciliation of each non-GAAP measure to its most directly comparable GAAP measure.(2) Defined as Adjusted EBITDA as a percentage of revenue.(3) Accounting for lost sales associated with Hurricane Michael, Adjusted EBITDA margin would have been 19.3% for the nine months ended September 30, 2019.

▪ Adjusted EBITDA(1) down $11.9 million or 28.6% compared to Q3'18

▪ Sales volume decreased 12.8 kilotons or 12.1% vs. Q3'18 ▪ Performance Chemicals volume down 15.0% on lower

TOR demand and TOFA upgrades into oilfield and mining applications

▪ Adhesives volume down 7.5% on lower demand for rosin upgrades into adhesive and roadmarking applications

▪ Tires volume up 2.4%

▪ Adjusted EBITDA margin(2) of 16.3% vs. 20.6% in Q3'18


2019 2018 Change 2019 2018 Change

($ In millions)

Volume (kT) 93.1 105.9 (12.8) 300.6 332.7 (32.1)

Revenue $ 182.6 $ 202.1 $ (19.5) $ 575.4 $ 615.7 $ (40.3)

Operating income $ 19.8 $ 27.5 $ (7.7) $ 66.9 $ 79.4 $ (12.5)

Adjusted EBITDA(1) $ 29.8 $ 41.6 $ (11.9) $ 112.9 $ 122.4 $ (9.5)

Adjusted EBITDA margin(2)(3) 16.3% 20.6% (430 bps) 19.6% 19.9% (30 bps)

Q3'19 vs. Q318


▪ Adjusted EBITDA(1) down $9.5 million or 7.8% vs. YTD'18

▪ Sales volume decreased 32.1 kilotons or 9.6% vs. YTD'18▪ Performance Chemicals volume down 12.9%, on lower

TOR demand, lower sales of TOFA upgrades and lower sales of raw materials

▪ Adhesives volume down 3.7% on lower sales of rosin upgrades

▪ Tires volume up 2.2%

▪ Adjusted EBITDA margin(2)(3) of 19.6% vs. 19.9% for YTD'18

YTD'19 vs. YTD'18

Kraton Overview 32


(1) This amount includes all of the indebtedness of our Kraton Formosa Polymers Corporation (KFPC) joint venture, located in Mailiao, Taiwan, which we own a 50% stake in and consolidatewithin our financial statements.

(2) KFPC executed revolving credit facilities to provide funding for working capital requirements and/or general corporate purposes. These are in addition to the 5.5 billion NTD KFPC LoanAgreement.

Consolidated Net Debt

September 30, 2019 June 30, 2019 December 31, 2018

(In millions)

Kraton debt $ 1,401.0 $ 1,456.6 $ 1,441.6

KFPC(1)(2) loans 104.3 109.9 125.5

Consolidated debt 1,505.4 1,566.6 1,567.1

Kraton cash 77.0 58.7 79.3

KFPC(1) cash 6.2 5.2 6.6

Consolidated cash 83.3 63.9 85.9

Consolidated net debt $ 1,422.1 $ 1,502.7 $ 1,481.2

Effect of foreign currency on consolidated net debt 32.3 3.8

Consolidated net debt excluding effect of foreign currency $ 1,454.4 $ 1,506.5

Effect of share buyback program (10.0) (5.0)

Consolidated net debt excluding effect of foreign currency and share buyback program

$ 1,444.4 $ 1,501.5

Appendix

Kraton Overview 34

34

Raw Materials Fractions Major Upgrades / Derivatives Markets

Terpene

Fractions

AMS

Adhesives

▪ Packaging

▪ Tapes

▪ Labels

▪ Assembly

▪ Pavement Marking

▪ Paving

▪ Roofing

Tires

▪ Winter & All-

Season

High Performance

Tires

Performance

Chemicals

▪ Fuel Additives

▪ Oilfield Chemicals

▪ Mining

▪ Coatings

▪ Metalworking

Fluids &

Lubricants

▪ Inks

▪ Flavors &

Fragrances

Adhesives Tires Performance Chemicals

TOFA

DTO

TOR

Pitch

Lighter

Heavier

Refining

Refining

Crude Tall Oil

(“CTO”)

Crude Sulfate

Terpentine

(“CST”)

Pulp

Mills

Dimer AcidsPolyamide

Resins

Rosin Resins

Upgraded

Rosins

Insoluble

Maleics

Terpene Resins

AMS Resins

Dispersions

Pine Chemicals - Overview

Kraton Overview 35

Polymer – Revenue by Geography and End UseTTM September 30, 2019

Segment Revenue by Geography Segment Revenue by End Use

Kraton Overview 36

Polymer – Revenue by Geography and Product Group TTM September 30, 2019

CARIFLEX PERFORMANCE PRODUCTSSPECIALTY POLYMERS

Rev

enu

e b

y G

eogr

aph

yR

even

ue

by

Pro

du

ct G

rou

p

Kraton Overview 37

Chemical – Revenue by Geography and Product Group TTM September 30, 2019

ADHESIVES35% of TTM Revenue

TIRES6% of TTM Revenue

Chemical Segment Revenue

PERFORMANCE CHEMICALS59% of TTM Revenue

Kraton Overview 38


2019 2018 2019 2018

(In thousands)

Gross profit $ 58,478 $ 90,205 $ 191,230 $ 281,482

Add (deduct):

KFPC startup costs (a) 3,019 — 3,019 —

Non-cash compensation expense 159 149 489 457

Spread between FIFO and ECRC 10,103 (7,771) 38,067 (27,711)

Adjusted gross profit (non-GAAP) $ 71,759 $ 82,583 $ 232,805 $ 254,228

Sales volume (kilotons) 75.8 84.2 229.8 249.5

Adjusted gross profit per ton $ 947 $ 981 $ 1,013 $ 1,019

Polymer Segment Reconciliation of Gross Profit to Adjusted Gross Profit

(a) Startup costs related to the joint venture company, KFPC.

Kraton Overview 39

Reconciliation of Net Income to Operating Income to Non-GAAP Financial Measures

Three Months Ended September 30, 2019 Three Months Ended September 30, 2018

Polymer Chemical Total Polymer Chemical Total

(In thousands)

Net income (loss) attributable to Kraton $ 18,693 $ 42,349

Net income attributable to noncontrolling interest 2,222 928

Consolidated net income (loss) 20,915 43,277

Add (deduct):

Income tax benefit 2,311 8,334

Interest expense, net 19,214 20,143

Earnings of unconsolidated joint venture (102) (100)

Other income (expense) (4,235) 740

Operating income $ 18,269 $ 19,834 38,103 $ 44,899 $ 27,495 72,394

Add (deduct):

Depreciation and amortization 14,982 19,822 34,804 17,554 17,563 35,117

Other income (expense) (502) 4,737 4,235 (958) 218 (740)

Earnings of unconsolidated joint venture 102 — 102 100 — 100

EBITDA (a) 32,851 44,393 77,244 61,595 45,276 106,871

Add (deduct):

Transaction, acquisition related costs, restructuring, and other costs (b) 1,672 244 1,916 689 (177) 512

Hurricane related costs (c) — 2,220 2,220 — — —

Hurricane reimbursements (d) — (13,841) (13,841) — — —

KFPC startup costs (e) 3,019 — 3,019 — — —

Sale of emissions credits (f) — (4,601) (4,601) — — —

Non-cash compensation expense 2,659 — 2,659 2,495 — 2,495

Spread between FIFO and ECRC 10,103 1,337 11,440 (7,771) (3,456) (11,227)

Adjusted EBITDA $ 50,304 $ 29,752 $ 80,056 $ 57,008 $ 41,643 $ 98,651

(a) Included in EBITDA is a $14.3 million gain on insurance, a reimbursement for a portion of the direct costs we have incurred to date related to Hurricane Michael.(b) Charges related to the evaluation of acquisition transactions, severance expenses, and other restructuring related charges.(c) Incremental costs related to Hurricane Michael, which are recorded in cost of goods sold. As we finalized our claim for reimbursement of incremental costs incurred, we have identified an additional $1.4 million of costs incurred

during the nine months ended September 30, 2019. Additionally, we incurred direct costs due to the impacts of Hurricane Dorian of $0.8 million which are recorded in cost of goods sold. The Hurricane Dorian direct costs are limited to the three months ended September 30, 2019 and will not continue into the fourth quarter of 2019.

(d) Reimbursement of incremental costs related to Hurricane Michael, which is recorded in gain on insurance proceeds.(e) Startup costs related to the joint venture company, KFPC.(f) We recorded a gain of $4.6 million in other income (expense) related to the sale of emissions credits accumulated by our Swedish Chemical legal entity.

Kraton Overview 40

Reconciliation of Net Income to Operating Income to Non-GAAP Financial Measures

(a) Included in EBITDA is a $32.9 million gain on insurance, fully offsetting the lost margin in the first quarter of 2019, and reimbursement for a portion of the direct costs we have incurred to date related to Hurricane Michael.(b) Charges related to the evaluation of acquisition transactions, severance expenses, and other restructuring related charges.(c) Incremental costs related to Hurricane Michael, which are recorded in cost of goods sold. As we finalized our claim for reimbursement of incremental costs incurred, we have identified an additional $14.2 million of costs incurred

during the nine months ended September 30, 2019. Additionally, we incurred direct costs due to the impacts of Hurricane Dorian of $0.8 million which are recorded in cost of goods sold. The Hurricane Dorian direct costs are limited to the three months ended September 30, 2019 and will not continue into the fourth quarter of 2019.

(d) Reimbursement of incremental costs related to Hurricane Michael, which is recorded in gain on insurance proceeds.(e) Startup costs related to the joint venture company, KFPC.(f) We recorded a gain of $4.6 million in other income (expense) related to the sale of emissions credits accumulated by our Swedish Chemical legal entity.

Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018

Polymer Chemical Total Polymer Chemical Total

(In thousands)

Net income attributable to Kraton $ 72,569 $ 49,491

Net income attributable to noncontrolling interest 5,356 1,743

Consolidated net income 77,925 51,234

Add (deduct):

Income tax (benefit) expense (1,881) 8,743

Interest expense, net 57,494 74,835

Earnings of unconsolidated joint venture (363) (357)

(Gain) loss on extinguishment of debt (210) 79,921

Other income (expense) (3,559) 2,960

Operating income $ 62,498 $ 66,908 129,406 $ 137,930 $ 79,406 217,336

Add (deduct):

Depreciation and amortization 43,296 54,934 98,230 52,914 52,719 105,633

Other income (expense) (1,547) 5,106 3,559 (3,600) 640 (2,960)

Gain (loss) on extinguishment of debt 210 — 210 (79,921) — (79,921)

Earnings of unconsolidated joint venture 363 — 363 357 — 357

EBITDA (a) 104,820 126,948 231,768 107,680 132,765 240,445

Add (deduct):

Transaction, acquisition related costs, restructuring, and other costs (b) 4,781 808 5,589 2,062 (963) 1,099

(Gain) loss on extinguishment of debt (210) — (210) 79,921 — 79,921

Hurricane related costs (c) — 15,025 15,025 — — —

Hurricane reimbursements (d) — (26,561) (26,561) — — —

KFPC startup costs (e) 3,019 — 3,019 897 — 897

Sale of emissions credits (f) — (4,601) (4,601) — — —

Non-cash compensation expense 8,158 — 8,158 7,620 — 7,620

Spread between FIFO and ECRC 38,067 1,294 39,361 (27,711) (9,371) (37,082)

Adjusted EBITDA $ 158,635 $ 112,913 $ 271,548 $ 170,469 $ 122,431 $ 292,900

Kraton Overview 41


2019 2018 2019 2018

Diluted Earnings Per Share $ 0.58 $ 1.31 $ 2.26 $ 1.53

Transaction, acquisition related costs, restructuring, and other costs (a) 0.04 0.02 0.13 0.03

(Gain) loss on extinguishment of debt — — (0.01) 1.89

Hurricane related costs (b) 0.15 — 0.55 —

Hurricane reimbursements (c) (0.44) — (0.83) —

KFPC startup costs (d) 0.04 — 0.04 0.01

Sale of emissions credits (e) (0.14) — (0.14) —

Spread between FIFO and ECRC 0.29 (0.31) 0.99 (0.97)

Adjusted Diluted Earnings Per Share (non-GAAP) $ 0.52 $ 1.02 $ 2.99 $ 2.49

Reconciliation of Diluted EPS to Adjusted Diluted EPS

(a) Charges related to the evaluation of acquisition transactions, severance expenses, and other restructuring related charges.(b) Incremental costs related to Hurricane Michael, which are recorded in cost of goods sold. As we finalized our claim for reimbursement of incremental costs incurred, we have identified an

additional $14.2 million of costs incurred during the nine months ended September 30, 2019. Additionally, we incurred direct costs due to the impacts of Hurricane Dorian of $0.8 million which are recorded in cost of goods sold. The Hurricane Dorian direct costs are limited to the three months ended September 30, 2019 and will not continue into the fourth quarter of 2019.

(c) Reimbursement of incremental costs related to Hurricane Michael, which is recorded in gain on insurance proceeds.(d) Startup costs related to the joint venture company, KFPC.(e) We recorded a gain of $4.6 million in other income (expense) related to the sale of emissions credits accumulated by our Swedish Chemical legal entity.

kraton corporation investor presentation december 2019

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