Warrior Met Coal, Inc. · NYSE:HCC
Warrior Met Coal — Q4 2020 Earnings Presentation
21 slides from Warrior Met Coal's earnings presentation, Feb 24, 2021
Slide 1: Fourth Quarter 2020 Results
Fourth Quarter 2020 Results February 24, 2021 PRELIMINARY | SUBJECT TO FURTHER REVIEW AND EVALUATION These materials may not be used or relied upon for any purpose other than as specifically contemplated by a written agreement with Credit Suisse AG or its Affiliates (hereafter “Credit Suisse”).
Slide 2: Forward looking statements
Wa rri o r Met C o a l Page 1 Forward looking statements These slides contain, and the officers and representatives of Warrior Met Coal, Inc. (the “Company”) may from time to time make, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Sectio
Slide 3: COVID-19: Initiatives to Protect, Preserve, Recover
Wa rri o r Met C o a l Page 2 COVID-19: Initiatives to Protect, Preserve, Recover COVID-19 has had an unprecedented impact on our business, adversely affecting the economies and financial markets of many countries, including those of our customers, which are primarily located in Europe, South Americ
Slide 4: Achieved Key 2020 Financial and Operational Goals, Even with Pandemic
Wa rri o r Met C o a l Page 3 Achieved Key 2020 Financial and Operational Goals, Even with Pandemic 1 Achieved sales volume of 7.4 million short tons (“St”) and production volume of 7.9 million St 2 Continued to successfully implement social distancing procedures under the guidelines issued by the
Slide 5: Key Metrics for Q4 2020 vs. Q4 2019
Wa rri o r Met C o a l Page 4 Key Metrics for Q4 2020 vs. Q4 2019 Q4 2020 Q4 2019 % Change Tons produced (in 000s St) 1,760 Tons produced (in 000s St) 1,813 (3%) Tons sold (in 000s St) 2,205 Tons sold (in 000s St) 1,655 33% Gross price realization (1) 102% Gross price realization (1) 97% 5% Average
Slide 6: Key Metrics for 2020 vs. 2019
Wa rri o r Met C o a l Page 5 Key Metrics for 2020 vs. 2019 FY 2020 FY 2019 % Change Tons produced (in 000s St) 7,862 Tons produced (in 000s St) 8,470 (7%) Tons sold (in 000s St) 7,424 Tons sold (in 000s St) 7,980 (7%) Gross price realization (1) 96% Gross price realization (1) 98% (2%) Average net
Slide 7: Breaking Down Warrior's Capital Expenditures
Wa rri o r Met C o a l Page 6 Breaking Down Warrior’s Capital Expenditures 2020 Capex Detail ($mm) CAPEX Sustaining(1) $160 $145 $140 $120 Mines $53 $100 $88 Gas operations $7 $80 Total Sustaining(1) $60 $60 $40 $20 Discretionary $0 2020 Guidance High-End (4) 2020 Actual Blue Creek(2) $3 4 North Por
Slide 8: 4 North Shaft and Hoist Construction Update
Wa rri o r Met C o a l Page 7 4 North Shaft and Hoist Construction Update View of Partial 4N Site from the Top of 4-17 Headframe Permanent Hoist Headframe and Hoist House
Slide 9: 4 North Portal General Layout
Wa rri o r Met C o a l Page 8 4 North Portal General Layout Portal site progress during 2020 includes the construction of the mine service shaft, 40-ton hoist, parking lot, and access road
Slide 10: Leverage and Liquidity Analysis
Wa rri o r Met C o a l Page 9 Leverage and Liquidity Analysis Financial Metrics ($MM except ratios) Leverage (for the trailing twelve months ended Dec. 31, 2020) Adjusted EBITDA* $108.3 Consolidated Net Debt* (1) $206.5 Net Leverage Ratio (3) 1.91x Liquidity (as of Dec. 31, 2020) Cash and Cash Equiv
Slide 11: Generated Significant Free Cash Flow on Strong Conversion of Adjusted EBITDA Margins
Wa rri o r Met C o a l Page 10 Generated Significant Free Cash Flow* on Strong Conversion of Adjusted EBITDA* Margins(1) Adjusted EBITDA* Margin (1) FCF Conversion*(2) (24%) (9%) 5% 8% 13% (2%) 30.0% 27.2% 25.0% 20.0% 19.0% COVID-19 Pandemic Impacted 15.0% 13.8% 11.9% 10.0% 8.9% 5.0% 4.3% 0.0% Q4 20
Slide 12: Production Overview
Wa rri o r Met C o a l Page 11 Production Overview Tons Produced (thousand st) Longwall 1 - 2 1 1 moves 2,500 2,099 2,116 2,000 1,887 1,813 1,760 549 596 493 487 1,500 518 1,000 1,503 1,567 1,326 1,394 1,242 500 – Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 No. 7 Mine No. 4 Mine 1 short ton is equivalen
Slide 13: Warrior's Proactive Approach to Environmental, Social, Governance (ESG) Responsibility
Wa rri o r Met C o a l Page 12 Warrior’s Proactive Approach to Environmental, Social, Governance (ESG) Responsibility • Compliance measured against Sustainability Accounting Standards Board (SASB) -- Coal Operations • 99.8% compliance rate with environmental water regulations Industry Leader in • 67
Slide 14: Warrior's Proactive Approach to ESG (Continued)
Wa rri o r Met C o a l Page 13 Warrior’s Proactive Approach to Environmental, Social, Governance (ESG) – (Continued) • Safety rate 25% better than peers • Incident severity measure consistently less than half the Safety Statistics Better national average than • Zero work-related fatalities since for
Slide 15: Appendix
Wa rri o r Met C o a l Page 14 Appendix
Slide 16: Appendix
Wa rri o r Met C o a l Page 15 Appendix For the three months ended For the three months ended December 31, 2020 (Unaudited) December 30, 2019 (Unaudited) Short Tons Metric Tons Short Tons Metric Tons Tons sold (in 000s) 2,205 2,001 1,655 1,502 Tons produced (in 000s) 1,760 1,596 1,813 1,644 Gross pr
Slide 17: Appendix
Wa rri o r Met C o a l Page 16 Appendix For the year ended For the year ended December 31, 2020 December 31, 2019 Short Tons Metric Tons Short Tons Metric Tons Tons sold (in 000s) 7,424 6,735 7,980 7,240 Tons produced (in 000s) 7,862 7,132 8,470 7,683 Gross price realization(1) 96% 96% 98% 98% Avera
Slide 18: Non-GAAP Financial Measures: Adjusted EBITDA
Wa rri o r Met C o a l Page 17 Appendix Non-GAAP Financial Measures Reconciliation of Adjusted EBITDA to Amounts Reported Under U.S. GAAP For the three months ended For the year ended Dec. 31, (Unaudited) Dec. 31, (Unaudited) (in thousands) 2020 2019 2020 2019 Net (loss) income $ (33,711) $ 20,751 $
Slide 19: Non-GAAP Financial Measures: Free Cash Flow
W ar r ior Met Coal Page 18 Appendix Non-GAAP Financial Measures Reconciliation of Free Cash Flow to Amounts Reported Under U.S. GAAP For the three months ended For the year ended Dec. 31, (Unaudited) Dec. 31, (Unaudited) (in thousands) 2020 2019 2020 2019 Net cash provided by operating activities $
Slide 20: Non-GAAP Financial Measures: Adjusted Net Income (Loss)
W ar r ior Met Coal Page 19 Appendix Non-GAAP Financial Measures Reconciliation of Adjusted Net Income (Loss) to Amounts Reported Under U.S. GAAP For the three months ended For the year ended Dec. 31, (Unaudited) Dec. 31, (Unaudited) (in thousands) 2020 2019 2020 2019 Net (loss) income $ (33,711) $
Slide 21: Non-GAAP Financial Measures: Cash Cost of Sales
W ar r ior Met Coal Page 20 Appendix Non-GAAP Financial Measures Reconciliation of Cash Cost of Sales (Free-On-Board Port) to Cost of Sales Reported Under U.S. GAAP For the three months ended For the year ended Dec. 31, (Unaudited) Dec. 31, (Unaudited) (in thousands) 2020 2019 2020 2019 Cost of sale