Ecovyst Inc. · NYSE:ECVT

Ecovyst — PQ Group Holdings — Investor Presentation (November 2019)

24 slides from Ecovyst's investor presentation, November 2019

  1. Slide 1: Investor Presentation November 2019

    INVESTOR PRESENTATION November 2019 1

  2. Slide 2: Legal Disclaimer

    LEGAL DISCLAIMER Forward-Looking Statements Some of the information contained in this presentation constitutes “forward-looking statements”. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “projects” and si

  3. Slide 3: PQ Corporation

    PQ CORPORATION 2018 SALES AND ZEOLYST JV SALES OVERVIEW BY REGION AND END USE1 END USE o Founded in 1831 17% 21% o Headquarters in Malvern, PA 16% 19% 7% o IPO in September 2017 20% Fuels & Emissions Controls Highway Safety & Construction Industrial & Process Chemicals Natural Resources Consumer Pro

  4. Slide 4: Our Business Units

    OUR BUSINESS UNITS REFINING PERFORMANCE PERFORMANCE SERVICES CATALYSTS1 MATERIALS CHEMICALS Increased octane Tighter fuels standards Higher highway Environmentally driven demand Light weighting demand safety standards consumer demand o Sulfuric acid production expertise o Tailored catalyst solutions

  5. Slide 5: Financial Performance Across Macroeconomic Cycles

    FINANCIAL PERFORMANCE ACROSS MACROECONOMIC CYCLES Adjusted EBITDA and Adjusted EBITDA Margin (%)1,2,3 ($ in millions except %) (1) Adjusted EBITDA for the period from 2005 to 2014 represents Legacy Eco Adjusted EBITDA and Legacy PQ Adjusted EBITDA prior to the Business Combination. Adjusted EBITDA f

  6. Slide 6: A Portfolio of Stability

    A PORTFOLIO OF STABILITY % of 2018 Sales by End Use1 End Markets Categorized by Sensitivity to Downturn2 Packaging & Engineered Plastics Fuels & Emissions (All segments) Controls (RS & C) 17% 21% Consumer Products Six Primary End Uses (PC) 16% 19% Serve ~28 Highway Safety 7% Secondary End Uses & Con

  7. Slide 7: PQ's Sustainable Business Model

    PQ’s SUSTAINABLE BUSINESS MODEL Inorganic Materials Drive ~ 3/4 of our Sales REFINING SERVICES CATALYSTS Largest North America recycler of spent sulfuric Remove sulfur from diesel fuel for landand acid, avoiding 1.5 million tons of landfill or deep marine transportation well disposal annually Reduce

  8. Slide 8: Portfolio Strengths and Priorities

    PORTFOLIO STRENGTHS AND PRIORITIES KEY VALUE DRIVERS Profitable COMPETITIVE ADVANTAGES Growth Unique portfolio of businesses Capital Leading positions in Commercial Intensity secular growth markets Efficiency Innovation potential Free Cash Flow 8

  9. Slide 9: Why PQ's Specialty Chemical Portfolio?

    WHY PQ’s SPECIALTY CHEMICAL PORTFOLIO? #1 and #2 positions in nearly all product lines Sustainable growth from diverse underlying secular macro trends Input cost small as percentage of customer total product cost Track record of innovation and customer collaboration Environmentally friendly end mark

  10. Slide 10: Supplemental Information

    SUPPLEMENTAL INFORMATION

  11. Slide 11: Supplemental Information: Capex, Capitalization, Sales by End Use and Region

    SUPPLEMENTAL INFORMATION 2018 Capital Expenditures, Capitalization, Sales by End Use and Region CAPITAL EXPENDITURES1 Full Year ($ in millions) 2018 % OF SALES GROWTH BY END USE 4 Maintenance2 94.7 Fuels & Emissions Controls + 6% Growth3 37.0 Highway Safety & Construction + 19% Total 131.7 Industria

  12. Slide 12: Macro Industry Trends

    MACRO INDUSTRY TRENDS Turbocharged Engines Heavy Duty Diesel Emissions Silicates & Silicas +7% +2x +2 – 3% North America CAGR Global catalyst Global CAGR from 2018 – 2025; consumption growth between consumption from turbo vehicles rise to 2020 – 2025 2017 – 2022 of ~40% of total NA with China VI sod

  13. Slide 13: 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 157.8 4.9x 134.2 4.5x 4.1x 24.7 2017 2018 LTM 9/2019 2017 2018 LTM 9/2019 Fixed/floating ratio of 90/10 limits

  14. Slide 14: Quarterly Segment Sales, Adjusted EBITDA and Margins

    QUARTERLY SEGMENT SALES, ADJUSTED EBITDA AND MARGINS Third Quarter 2019, Year-to-Date 2019 and Year 2018 Nine Months Three Months Ended For the Quarter Ended Ended Three Months Ended Year Ended December 31, March 31, June 30, September 30, September 30, March 31, June 30, September 30, December 31,

  15. Slide 15: Adjusted Free Cash Flow

    ADJUSTED FREE CASH FLOW Nine Months Three Months Ended Ended LTM September 30, December 31, September 30, Full Year Full Year ($ in millions) 2019 2018 2019 2018 2017 Cash Flow from Operations 277.5 111.8 389.3 377.5 364.5 before interest and tax Less: Cash paid for taxes 13.3 7.7 21.0 23.8 29.2 Cas

  16. Slide 16: 2019 Guidance Update

    2019 GUIDANCE UPDATE ($ in millions, 2018 2019 except % and per share) Actual Outlook Sales 1,608.2 1,560 – 1,580 Adjusted EBITDA 464.0 470 – 485 Adjusted Free Cash Flow 134.2 125 – 1451 Adjusted Diluted EPS 0.87 0.84 – 0.87 Interest Expense 113.7 112 – 116 Depreciation & Amortization PQ 185.2 180 –

  17. Slide 17: Reconciliation of Sales and Adjusted EBITDA

    RECONCILIATION OF SALES AND ADJUSTED EBITDA 2005 – 2018 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 2018 Reconciliation of sales and adjusted EBITDA Legacy PQ Sales 1 635.3 708.6 775.0 977.0 1,009.9 1,087.9 1,115.0

  18. Slide 18: Reconciliations for Adjusted EBITDA

    RECONCILIATIONS FOR ADJUSTED EBITDA 2005 – 2014 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 income (loss)

  19. Slide 19: Reconciliations for Adjusted EBITDA

    RECONCILIATIONS FOR ADJUSTED EBITDA 2005 – 2014 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 to Legacy Eco

  20. Slide 20: Reconciliations for Adjusted EBITDA

    RECONCILIATIONS FOR ADJUSTED EBITDA 2015 – 2018 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 2018 Reconciliation of net income (loss) attributable to PQ Group Holdings Inc. to Adjusted

  21. Slide 21: Reconciliation of Net Income to Segment Adjusted EBITDA

    RECONCILATION OF NET INCOME TO SEGMENT ADJUSTED EBITDA Third Quarter 2019, Year-to-Date 2019 and Year 2018 Nine Months Three Months Ended Ended Three Months Ended Year Ended March 31, June 30, September 30, September30, March 31, June 30, September 30, December 31, December 31, ($ in millions) 2019

  22. Slide 22: 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 Third Quarter 2019, Year-to-Date 2019 and Year 2018 Nine Months Three Months Ended Ended Three Months Ended Year Ended March 31, June 30, September 30, September 30, March 31, June 30, September 30,

  23. Slide 23: 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 our Zeolyst Joint Venture, we include an adjustment for our 50% p

  24. Slide 24: Leading the

    Leading the way 0) a future i a — adel

PQ Group Holdings — Investor Presentation (November 2019) on 6ix