Ecovyst Inc. · NYSE:ECVT
Ecovyst — PQ — Q3 2020 Earnings Presentation
24 slides from Ecovyst's earnings presentation, Oct 30, 2020
Slide 1: Third Quarter 2020 Investor Presentation
Third Quarter 2020 October 30, 2020 – 10:00 AM ET INVESTOR PRESENTATION
Slide 2: Legal Discussion: Forward-Looking Statements
LEGAL DISCUSSION 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: Third Quarter 2020 Overview – Consistent Execution
THIRD QUARTER 2020 OVERVIEW – CONSISTENT EXECUTION FOCUS AREA HIGHLIGHTS o Top quartile safety performance YTD OPERATIONAL o Operational and cost performance optimized with demand o New multi-year customer contract to add volume growth to regeneration services COMMERCIAL o Negotiating price increase
Slide 4: Demand Trends: Vast Majority Stable to Improving
DEMAND TRENDS: VAST MAJORITY STABLE TO IMPROVING 2019 % TOTAL DEMAND TREND BUSINESS END USE KEY PRODUCTS SALES1 Q3 Q4 EXPECTED DEMAND TRENDS US gasoline demand stable at ~90% of 2019 level; Regeneration for 15% slow improvement in refinery utilization to >80%; Refining Gasoline Refining Inventories
Slide 5: Third Quarter 2020 Financial Results
THIRD QUARTER 2020 FINANCIAL RESULTS Third Third % Quarter Quarter $ % Constant ($ in millions) 2020 2019 Change Change Currency Sales 380.3 423.8 (43.5) (10.3) (9.7) Adjusted EBITDA 108.6 137.7 (29.1) (21.1) (21.0) Adjusted EBITDA 26.7 28.8 (210 bps) Margin1 (%) Third Second Quarter Quarter $ % ($
Slide 6: Refining Services
REFINING SERVICES Third Third % Quarter Quarter $ % Constant ($ in millions) 2020 2019 Change Change Currency Sales 107.6 118.3 (10.7) (9.0) (9.0) Adjusted EBITDA 44.3 51.2 (6.9) (13.5) (13.5) Adjusted EBITDA 41.2 43.3 (210 bps) Margin (%) o Regeneration services sales decline on lower Q3 Change Fac
Slide 7: Catalysts
CATALYSTS Third Third % Quarter Quarter $ % Constant ($ in millions) 2020 2019 Change Change Currency Sales Silica Catalysts 23.1 25.6 (2.5) (9.8) (10.2) Zeolyst JV 26.6 54.4 (27.8) (51.1) (51.1) Adjusted EBITDA 11.8 31.6 (19.8) (62.7) (63.3) Adjusted EBITDA 23.7 39.5 (1580 bps) Margin1 (%) o Zeolys
Slide 8: Performance Chemicals
PERFORMANCE CHEMICALS Third Third % Quarter Quarter $ % Constant ($ in millions) 2020 2019 Change Change Currency Sales 148.5 167.9 (19.4) (11.6) (9.8) Adjusted EBITDA 33.9 36.8 (2.9) (7.9) (6.8) Adjusted EBITDA 22.8 21.9 90 bps Margin (%) o Sales reflect softer demand for detergents, general indust
Slide 9: Performance Materials
PERFORMANCE MATERIALS Third Third % Quarter Quarter $ % Constant ($ in millions) 2020 2019 Change Change Currency Sales 104.6 115.1 (10.5) (9.1) (9.6) Adjusted EBITDA 25.3 25.8 (0.5) (1.9) (1.9) Adjusted EBITDA 24.2 22.4 180 bps Margin (%) o Europe & industrial demand continues to Q3 Change Factors
Slide 10: 2020 Financial Guidance
2020 FINANCIAL GUIDANCE 2020 2020 ($ in millions, 2019 Outlook including From Continuing except per share) Actual Performance Materials Operations Sales1 1,567.1 1,430 – 1,460 1,080 – 1,100 Adjusted EBITDA 474.3 410 – 425 330 – 345 Adjusted Free Cash Flow2 166.2 145 – 1553 95 – 1053 Capital Expendit
Slide 11: Portfolio Shifts to Higher Growth and Margins
PORTFOLIO SHIFTS TO HIGHER GROWTH AND MARGINS TARGET PQ: Catalysts / Refining Services CURRENT PQ: 2017–2019 Catalysts / Refining Services / Performance Chemicals Financial Performance LEGACY PQ: Catalysts / Refining Services / Performance Chemicals / Performance Materials SALES CAGR 7% 100% ADJUSTE
Slide 12: Catalysts: Essential for a Sustainable Future
CATALYSTS: ESSENTIAL FOR A SUSTAINABLE FUTURE Competitive Strengths Attractive Growth & Margins Growth Drivers o PQ silica-based catalyst Sales o ~80% of polyethylene technology improves capacity expansions specify strength-to-weight ratio of 170 silica-based catalyst HDPE and LLDPE technology 86 45
Slide 13: Refining Services: Critical for Sustainable Fuel Production
REFINING SERVICES: CRITICAL FOR SUSTAINABLE FUEL PRODUCTION Competitive Strengths Attractive Growth & Margins Growth Drivers o Largest regeneration Sales o Rising North American network for recycling of alkylate unit production for sulfuric acid catalyst in higher octane gasoline U.S. Gulf and West
Slide 14: Accelerating Strategic Transformation to Unlock Portfolio Value
ACCELERATING STRATEGIC TRANSFORMATION TO UNLOCK PORTFOLIO VALUE KEY PRIORITIES FOR PORTFOLIO Continue track record of execution in operational and TRANFORMATION: commercial performance oUnlock value of Maintain readiness and agility to pivot with changing businesses customer demand Close higher oDri
Slide 15: Appendix
APPENDIX fe] PQ Corporation
Slide 16: Quarterly Segment Sales, Adjusted EBITDA and Margins
QUARTERLY SEGMENT SALES, ADJUSTED EBITDA AND MARGINS Nine Months Three Months Ended Ended For the Quarter Ended Three Months Ended Year Ended September September March 31, June 30, 30, 30, March 31, June 30, September December December ($ in millions except %, unaudited) 2020 2020 2020 2020 2019 201
Slide 17: Sales and Adjusted EBITDA Major Change Factors
SALES AND ADJUSTED EBITDA MAJOR CHANGE FACTORS SALES Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020 Sales (in $ millions PQ Group Refining Performance Performance PQ Group Refining Performance Performance and %) Holdings Inc Services Catalysts Materials Chemicals Holdings
Slide 18: Adjusted Free Cash Flow
ADJUSTED FREE CASH FLOW YTD YTD Full Year ($ in millions) 2020 2019 2019 Cash Flow from Operations 247.4 277.5 401.9 before interest and tax Less: Cash paid for taxes 21.5 13.3 17.4 Cash paid for interest1 75.3 82.3 116.8 Cash Flow from Operations 150.6 181.9 267.7 Less: Purchases of property, 76.8
Slide 19: Reconciliation of Net Income to Segment Adjusted EBITDA
RECONCILIATION OF NET INCOME TO SEGMENT ADJUSTED EBITDA Nine Months Three Months Ended Ended Three Months Ended Year Ended March 31, June 30, September September March 31, June 30, September December December ($ in millions) 2020 2020 30, 2020 30, 2020 2019 2019 30, 2019 31, 2019 31, 2019 Reconcilia
Slide 20: Reconciliation of Quarterly Net Income to Adjusted Net Income and Adjusted Diluted EPS
RECONCILIATION OF QUARTERLY NET INCOME TO ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE Nine Months Three Months Ended Ended Three Months Ended Year Ended September September March 31, June 30, 30, 30, March 31, June 30, September December December ($ in millions except share and per s
Slide 21: Constant Currency Sales and Adjusted EBITDA
CONSTANT CURRENCY SALES AND ADJUSTED EBITDA Three Nine Months Months Ended Ended Three Months Ended September Nine Months Ended September September 30, 2020 30, 2019 September 30, 2020 30, 2019 Constant Constant ($ in millions except %, As Constant As Currency As Constant As Currency unaudited) Repo
Slide 22: Reconciliation for Net Income to Segment Adjusted EBITDA
RECONCILIATION FOR NET INCOME TO SEGMENT ADJUSTED EBITDA Year Ended Year Ended Year Ended December 31, December 31, December 31, ($ in millions) 2019 2018 2017 Reconciliation of net income attributable to PQ Group Holdings Inc. to Segment Adjusted EBITDA Net income attributable to PQ Group Holdings
Slide 23: Descriptions for Reconciliation of Non-GAAP Financial Measures
DESCRIPTIONS FOR RECONCILIATION OF NON-GAAP FINANCIAL MEASURES 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% proportionate share of depre
Slide 24: Slide 24