Ecovyst Inc. · NYSE:ECVT

Ecovyst — PQ Group Holdings — BMO Chemicals Conference 2018

26 slides from Ecovyst's conference presentation, June 2018

  1. Slide 1: Investor Presentation - BMO Chemicals Conference June 2018

    INVESTOR PRESENTATION BMO Chemicals Conference - June 2018

  2. Slide 2: Legal Disclaimer

    LEGAL DISCLAIMER Forward-Looking Statements Some of the information contained in this presentation and any discussions that follow constitutes “forward-looking statements”. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimate

  3. Slide 3: PQ Investment Highlights

    PQ INVESTMENT HIGHLIGHTS Leading Global Producer of Specialty Catalysts, Materials, Chemicals & Services Mid to High Best in Class Proven Performance Strong Free Cash Single Digit EBITDA Margins in all Macro Flows to Delever Growth of ~28% Economic Cycles and Grow 1 LTM Q1 2018 Adjusted EBITDA margi

  4. Slide 4: Diverse Portfolio

    DIVERSE PORTFOLIO #1 and #2 positions in nearly all product lines 2017 SALES AND ZEOLYST JV TOTAL NET SALES: BY END USE1 2017 SALES GROWTH BY END USE 1 Natural Resources (EC&S) Fuels & Emissions Fuels & Emissions Controls + 10% Controls (EC&S) 8% Industrial & 21% Highway Safety & Construction + 8% P

  5. Slide 5: Demonstrated Strong Financial Performance Across Macroeconomic Cycles

    DEMONSTRATED STRONG FINANCIAL PERFORMANCE ACROSS MACROECONOMIC CYCLES Stable and improving margins Adjusted EBITDA and Adjusted EBITDA Margin (%)1,2,3 ($ in millions except %) o Long-term EBITDA CAGR of 7.5% o Attractive, stable margins o Steady margin expansion a result of high value added specialt

  6. Slide 6: 2018 – Positioned for Growth and Significant Cash Flow

    2018 – POSITIONED FOR GROWTH AND SIGNIFICANT CASH FLOW Free Cash Flow of $120 million to $140 million Deliver industry-leading financial results o Sales growth of 5% to 7% o Adjusted EBITDA growth of 4% to 8% with sustained high margins o Free Cash Flow of $120 million to $140 million Consistent cap

  7. Slide 7: Solid Pillars for Growth and Sustainable Margins

    SOLID PILLARS FOR GROWTH AND SUSTAINABLE MARGINS Global environmental trends and regulations expected to drive growth of 2X – 3X GDP Solid foundation and continued product mix shift to benefit margins Multiple Growth Drivers 1 2 3 4 Regeneration Silica Performance Zeolyst Services: Catalysts: Materi

  8. Slide 8: Refining Services

    #1 U.S. Supplier REFINING SERVICES 1 Well positioned for growth in High Octane Fuels % Share of Turbocharged Vehicles of New LDV Sales in US 2014 2025 Demand for fuel efficiency and high performance 17% 85% o Increases share for % Share of Premium vs Regular Gasoline Consumption turbocharged engines

  9. Slide 9: Silica Catalysts

    #2 primary global supplier SILICA CATALYSTS 2 PQ is aligned with key licensors for new silica-based capacity PE Capacity by Licensor ~50% of the current capacity 120 uses silica catalyst ~30 announcements of new 90 global capacity to come on line between 2018–2021 Million MT 60 o Predominantly in Gu

  10. Slide 10: Performance Materials

    #1 U.S. Supplier PERFORMANCE MATERIALS 3 Product adjacency expected to accelerate growth to 3x GDP ThermoDrop® Performance Value Proposition  Higher yields  Lower labor  Increased profits No dust Continuous operations Total addressable market of ~$500 million Approved in 20 states; 9 more underwa

  11. Slide 11: Zeolyst Joint Venture

    #1 global supplier ZEOLYST JOINT VENTURE 4 of emissions catalysts Share growth with increased fuel and emissions regulations Global Heavy Duty Diesel (HDD) Catalyst Systems Market On Road: Marine Global environmental standards for Sales ($ in millions) Non-Road 19-56kW+ Non-Road 56-130kW+ HDD progre

  12. Slide 12: PQ Versus Peers – Top Quartile Metrics

    PQ VERSUS PEERS–TOP QUARTILE METRICS Valuation Disconnect Median: 29.8% 2018E 35.0% 30.0% 29.8% 27.9% 27.2% 21.5% EBITDA Margin Median: 21.9% 2017 20.3% 15.6% 21.9% 34.0% 25.0% 8.7% Tangible ROIC1 Median: 12.5% 2017–2018E 6.2% 11.4% 12.5% 7.1% 24.4% 14.4% EBITDA Growth Median: 14.5% 2017–2018E 77.6%

  13. Slide 13: Supplementary Information

    SUPPLEMENTARY INFORMATION re) PQ Corporation

  14. Slide 14: Strong Financial Performance

    STRONG FINANCIAL PERFORMANCE Strong end markets, leading positions drive continued strong growth and margins SALES ADJUSTED EBITDA (ADJUSTED EBITDA MARGIN)2 2,000 600 1,545-1575 470-490 1,403 1,472 453 1,500 421 Millions Millions 400 1,000 200 27.4% 28.1% 500 0 0 2016 2017 2018 1 2016 2017 2018 1 20

  15. Slide 15: 2018 Guidance

    2018 GUIDANCE Expected Free Cash Flow of $120 Million to $140 Million 2017 2018 Change from ($ in millions except %) Actual Outlook 2017 Sales 1,472.1 1,545 – 1,575 5% – 7% Adjusted EBITDA 453.3 470 – 490 4% – 8% Free Cash Flow (24.4) 120 – 140 ~145 – 165 Interest Expense 179.0 120 – 130 ~(50) – (60

  16. Slide 16: Debt Schedule

    DEBT SCHEDULE Flexibility to pay down debt and interest rate exposure mitigated DEBT MATURITY SCHEDULE $1,500 $1,475.1 Capitalization Q1 2018 Debt: ($ in millions) $1,350 ABL Revolving Credit Facility 30.0 $1,200 New USD First Lien Term Loan 1,263.8 $1,050 First Lien Secured Notes 625.0 Millions $90

  17. Slide 17: Quarterly Segment Sales and Adjusted EBITDA

    QUARTERLY SEGMENT SALES AND ADJUSTED EBITDA Year 2017 and Q1 2018 For the Quarter Ended Three Months Ended Year Ended March 31, March 31, June 30, September 30, December 31, December 31, ($ in millions except %) 2018 2017 2017 2017 2017 2017 Sales: Silica Catalysts 16.5 17.1 20.1 15.1 23.0 75.3 Refi

  18. Slide 18: Quarterly Net Income to Adjusted Net Income and Adjusted Diluted EPS

    QUARTERLY NET INCOME TO ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE Q1 2018 and Year 2017 Three Months Ended Three Months Ended March 31, March 31, June 30, September 30, December 31, Year Ended For the Quarter Ended December 31, ($ in millions except per share data) 2018 2017 2017 2

  19. Slide 19: Reconciliation of Non-GAAP Financial Measures

    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Net Income (Loss) to Segment Adjusted EBITDA Three Months Ended Three Months Ended March 31, March 31, June 30, September 30, December 31, Year Ended December 31, ($ in millions) 2018 2017 2017 2017 2017 2017 Reconciliation of net income (loss) attributa

  20. Slide 20: Reconciliation of Non-GAAP Financial Measures

    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Descriptions to PQ Non-GAAP Reconciliations Descriptions to PQ Non-GAAP Reconciliations a) We use Adjusted EBITDA, Adjusted Net Income and Adjusted Diluted EPS as performance measures to evaluate our financial results. Because our environmental catalysts

  21. Slide 21: 2005 – 2017 Reconciliations

    2005 – 2017 RECONCILIATIONS Legacy Business — Sales & Adjusted EBITDA Year Ended December 31, 2015 2016 Pro Pro ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 forma 3 forma 3 2017 Reconciliation of sales and adjusted EBITDA Legacy PQ Sales 1 635.3 708.6 775.0 977.0 1,009.9 1,087.9

  22. Slide 22: 2005 – 2014 Reconciliations for Adjusted EBITDA and Margins

    2005 – 2014 RECONCILIATIONS FOR ADJUSTED EBITDA AND MARGINS Legacy PQ1 — Net Income (Loss) to Adjusted EBITDA Reconciliation Year Ended December 31, ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Reconciliation of net income (loss) attributable to Legacy PQ to Adjusted EBITDA Net

  23. Slide 23: 2005 – 2014 Reconciliations for Adjusted EBITDA and Margins

    2005 – 2014 RECONCILIATIONS FOR ADJUSTED EBITDA AND MARGINS Legacy Eco Services1 — Net Income (Loss) to Adjusted EBITDA Reconciliation Year Ended December 31, 2014 2014 ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 Successor Predecessor Reconciliation of net income (loss) attributable

  24. Slide 24: 2015 – 2017 Reconciliations for Adjusted EBITDA and Margins

    2015 – 2017 RECONCILIATIONS FOR ADJUSTED EBITDA AND MARGINS Post-Business Combination PQ — Net Income (Loss) to Adjusted EBITDA Reconciliation Year Ended December 31, 2015 2016 ($ in millions) Pro forma 1 Pro forma 1 2017 Reconciliation of net income (loss) attributable to PQ Group Holdings Inc. to

  25. Slide 25: 2017 Reconciliation: Tangible ROIC

    2017 RECONCILIATION Tangible ROIC Year Ended Year Ended December 31, December 31, ($ in millions) 2017 ($ in millions) 2017 Reconciliation of net income (loss) attributable to PQ Group Calculation of Return on Invested Capital (ROIC) Holdings Inc. to Segment Adjusted EBITA Net income (loss) attribut

  26. Slide 26: Friendlier products for a cleaner, safer world

    friendlier products for a cleaner, safer world

PQ Group Holdings — BMO Chemicals Conference 2018 on 6ix