Ecovyst Inc. · NYSE:ECVT
Ecovyst — PQ Group Holdings — Q4 2019 Earnings Presentation
22 slides from Ecovyst's earnings presentation, Feb 20, 2020
Slide 1: Fourth Quarter 2019 Investor Presentation
Fourth Quarter 2019 February 20, 2020 – 11:00 AM ET INVESTOR PRESENTATION 1
Slide 2: Legal Disclaimer
LEGAL DISCLAIMER Forward-Looking Statements Some of the information contained in this presentation, the conference call during which this presentation is reviewed and any discussions that follow constitutes “forward-looking statements”. Forward-looking statements can be identified by words such as “
Slide 3: 2019 Highlights
2019 HIGHLIGHTS Best safety performance in the last decade Improved pricing and cost efficiency in Performance Materials Outstanding Catalysts volume growth from combination of hydrocracking, polyolefin and methyl methacrylates product lines Advanced portfolio optimization, including non-core asset
Slide 4: 2019 Financial Results
2019 FINANCIAL RESULTS Fourth Fourth % Quarter Quarter $ % Constant ($ in millions) 2019 2018 Change Change Currency Sales 352.4 380.1 (27.7) (7.3%) (6.6%) Adjusted EBITDA 103.1 109.1 (6.0) (5.5%) (4.9%) Adjusted EBITDA 25.8 % 26.2% (40 bps) Margin1 % Full Year Full Year $ % Constant ($ in millions)
Slide 5: Refining Services
REFINING SERVICES Fourth Fourth % Quarter Quarter $ % Constant ($ in millions) 2019 2018 Change Change Currency Sales 105.7 119.4 (13.7) (11.5%) (11.5%) Adjusted EBITDA 41.9 50.1 (8.2) (16.4%) (16.4%) Adjusted EBITDA 39.6% 42.0% (240 bps) Margin o Sales impacted by the pass through of lower Q4 Chang
Slide 6: Catalysts
CATALYSTS Fourth Fourth % Quarter Quarter $ % Constant ($ in millions) 2019 2018 Change Change Currency Sales Silica Catalysts 23.3 22.0 1.3 5.9% 5.9% Zeolyst JV 47.3 36.5 10.8 29.6% 29.6% Adjusted EBITDA 28.5 18.9 9.6 50.8% 50.8% Adjusted EBITDA 40.4% 32.3% 810 bps Margin1 Q4 Change Factors o Silic
Slide 7: Performance Materials
PERFORMANCE MATERIALS Fourth Fourth % Quarter Quarter $ % Constant ($ in millions) 2019 2018 Change Change Currency Sales 67.9 73.7 (5.8) (7.9%) (6.4%) Adjusted EBITDA 11.2 10.5 0.7 6.7% 8.6% Adjusted EBITDA 16.5% 14.2% 230 bps Margin o Higher pricing offset by lower demand for Q4 Change Factors eng
Slide 8: Performance Chemicals
PERFORMANCE CHEMICALS Fourth Fourth % Quarter Quarter $ % Constant ($ in millions) 2019 2018 Change Change Currency Sales 158.9 168.8 (9.9) (5.9%) (5.1%) Adjusted EBITDA 33.6 39.2 (5.6) (14.3%) (13.3%) Adjusted EBITDA 21.1% 23.2% (210 bps) Margin o Sales and Adjusted EBITDA declined on Q4 Change Fac
Slide 9: Adjusted Free Cash Flow and Leverage Ratio
ADJUSTED FREE CASH FLOW AND LEVERAGE RATIO ADJUSTED FREE CASH FLOW ($mm) NET DEBT/ADJUSTED EBITDA RATIO Adjusted Free Cash Flow used to repay debt Progress to leverage target of 3.0 – 3.5x $166 $134 4.9x 4.5x 3.9x $25 2017 2018 2019 2017 2018 2019 o Record Adjusted free cash flow o Repaid debt of $2
Slide 10: 2020 Guidance
2020 GUIDANCE ($ in millions, 2019 2020 except % and per share) Actual Outlook Sales 1,567.1 1,595 – 1,625 Adjusted EBITDA 474.3 470 – 480 Adjusted Free Cash Flow 166.2 155 – 175 Adjusted Diluted EPS 0.92 0.85 – 1.02 Interest Expense 111.5 100 – 105 Depreciation & Amortization PQ 182.1 180 – 190 Zeo
Slide 11: Performance Chemicals Transformation
PERFORMANCE CHEMICALS TRANSFORMATION MANUFACTURING NETWORK EXCELLENCE: OPTIMIZATION: Accelerate productivity Align footprint with EXPECTED DRIVERS: and throughput growth opportunities BENEFIT: Commercial $10 million to $15 effectiveness million Adjusted ENHANCE EBITDA annualized Productivity and CUS
Slide 12: Strong Portfolio Outlook
STRONG PORTFOLIO OUTLOOK Track Record SEGMENT ADJUSTED EBITDA o Three of four businesses (Catalysts, Refining Services and ($ in millions) 2017 – 2019 CAGR Performance Materials) delivered 7% growth from 2017 through 501 514 2019; Performance Chemicals was down 5% over same period 484 7.2% o Deliver
Slide 13: Appendix
APPENDIX 13
Slide 14: Adjusted Free Cash Flow
ADJUSTED FREE CASH FLOW Full Year Full Year Full Year ($ in millions) 2019 2018 2017 Cash Flow from Operations before interest 401.9 377.5 364.5 and tax Less: Cash paid for taxes 17.4 23.8 29.2 Cash paid for interest1 116.8 105.1 170.1 Cash Flow from Operations 267.7 248.6 165.2 Less: Purchases of p
Slide 15: Supplemental Information
SUPPLEMENTAL INFORMATION 2019 Capital Expenditures, Capitalization and Sales by End Use Year Ended Year Ended CAPITAL EXPENDITURES1 December 31, December 31, % OF SALES GROWTH BY END USE 4 ($ in millions) 2019 2018 Maintenance2 97.8 94.7 Fuels & Emissions Controls 5% Growth3 29.8 37.0 Highway Safety
Slide 16: Quarterly Segment Sales, Adjusted EBITDA and Margins
QUARTERLY SEGMENT SALES, ADJUSTED EBITDA AND MARGINS Year 2019, 2018 and 2017 Three Months Ended For Year the Quarter Ended Ended Three Months Ended Year Ended Year Ended September September March 31, June 30, 30, December 31, December 31, March 31, June 30, 30, December 31, December 31, December 31
Slide 17: Sales and Adjusted EBITDA Major Change Factors
SALES AND ADJUSTED EBITDA MAJOR CHANGE FACTORS Fourth Quarter 2019 and Year 2019 SALES Three months ended Year Ended December 31, 2019 December 31, 2019 Sales PQ Group Refining Performance Performance PQ Group Refining Performance Performance (in $ millions and %) Holdings Inc. Services Catalysts Ma
Slide 18: Reconciliation of Net Income to Segment Adjusted EBITDA
RECONCILATION OF NET INCOME TO SEGMENT ADJUSTED EBITDA Year 2019, 2018 and 2017 Three Months Ended Year Ended Three Months Ended Year Ended Year Ended September December September December December December March 31, June 30, 30, December 31, March 31, June 30, 30, 31, 31, 31, ($ in millions) 2019 2
Slide 19: Reconciliation of Quarterly Net Income to Adjusted Net Income and EPS
RECONCILATION OF QUARTERLY NET INCOME TO ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE Year 2019 and 2018 Three Months Ended Year Ended Three Months Ended Year Ended March 31, June 30, September 30, December 31, December 31, March 31, June 30, September 30, December 31, December 31, ($
Slide 20: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Descriptions to PQ Non-GAAP Reconciliations a) We use Adjusted EBITDA as a performance measure to evaluate our financial results. Because our Catalysts segment includes our 50% interest in the Zeolyst Joint Venture, we include an adjustment for our 50% p
Slide 21: Constant Currency Sales and Adjusted EBITDA
CONSTANT CURRENCY SALES AND ADJUSTED EBITDA Fourth Quarter and Year 2019 Versus 2018 Three Months Ended Year Ended Three Months Ended Year Ended December 31, December 31, December 31, 2019 2018 December 31, 2019 2018 Constant Constant Constant Constant Currency % As Currency % ($ in millions except
Slide 22: PQ Corporation
PQ Corporation 22