Ecovyst Inc. · NYSE:ECVT
Ecovyst — Q4 2022 Earnings Presentation
29 slides from Ecovyst's earnings presentation, Feb 28, 2023
Slide 1: Fourth Quarter 2022
Fourth Quarter 2022 February 28, 2023—11 am ET YOUR CATALYST FOR POSITIVE CHANGE ™
Slide 2: Legal Discussion
Legal Discussion Continuing Operations Financial results are presented on a continuing operations basis, which excludes the Performance Materials business and Performance Chemicals business unless otherwise indicated. Forward-Looking Statements Some of the information contained in this presentation,
Slide 3: Legal Discussion Continued
Legal Discussion Continued Supply Share and Industry Information Certain statistical information used in this presentation is based on independent industry publications, reports by research firms or other published independent sources. Some statistical information is also based on our good faith est
Slide 4: Key Messages
Key Messages Strong Q4 2022 results with Sales and Adjusted EBITDA Growth of 8%1,2 and 1 9%1,2,3, respectively Adjusted EBITDA for FY 2022 exceeded upper end of our raised $265 - $275 2 million guidance range Successful execution of Secondary Offering of stock, reducing a Private 3 Equity ownership
Slide 5: Q4 2022 Key Highlights
Key Highlights Q4 2022 Key Highlights 8% 9% 79% Sales Growth Adj. EBITDA Growth Cash vs. Q4 20211 vs. Q4 20211,2 Conversion2,3,4 2.8x #1 or #2 $171 Mln Net Debt Leverage Supply Share Position Liquidity6 Ratio2,5 1. Sales change percentage includes proportionate 50% share of sales from Zeolyst Joint
Slide 6: Ecovyst Reporting Segments
Ecovyst Reporting Segments Catalyst Ecoservices Technologies 2022 Sales $703 Million $250 Million2 2022 Adjusted $228 Million $78 Million EBITDA1 Regeneration Treatment Catalyst Silica Catalysts Zeolyst International Virgin Sulfuric Acid Services Services Activation (100% Ownership) (50% Ownership)3
Slide 7: Catalyst Technologies
Key Industry trends remain favorable for anticipated growth in 2023 despite volatile macro economics and recessionary concerns 2022 Demand Trend Industry End Key Q4’22 Q1’23E Total Growth 2023 Anticipated Demand Drivers Use Products Vs Q3’22 vs Q4’22 Sales1 Rate Gasoline demand driven by commuters,
Slide 8: Well Positioned for Future Growth - Meeting Industry Needs for Sustainable Technologies
Well Positioned for Future Growth - Meeting Industry Needs for Sustainable Technologies Ecoservices • Largest North American recycler of spent sulfuric acid, avoiding 1.5 million tons per year of landfill or deep well disposal. • One of the largest consumers of refinery spent sulfur, converting for
Slide 9: Fourth Quarter 2022 Financial Performance
Fourth Quarter 2022 Financial Performance
Slide 10: Financial Performance – Fourth Quarter and Full Year 2022
Financial Performance – Fourth Quarter and Full Year 2022 Fourth Quarter Financial Results Fourth Fourth $ % Quarter Quarter $ % ($ in millions) Change Change ($ in millions) 2022 2021 Change Change Sales Change Factors3 Ecovyst Sales 182.8 170.2 12.6 7.4 Volume (17.6) (10.3) Zeolyst JV Sales 39.9 3
Slide 11: Adjusted EBITDA Bridge – Q4 2022
Adjusted EBITDA Bridge – Q4 2022 Ecoservices unit margins expanded on higher pricing. Catalyst Technologies margins pressured by higher variable costs associated with inflationary pressures Positive price-cost Adjusted EBITDA Impact ($MM) 31.1%1,2 30.6%1,2 1. See Appendix for Reconciliations of non-
Slide 12: Ecoservices – Q4 2022 Financial Performance
Ecoservices – Q4 2022 Financial Performance Fourth Fourth Quarter Quarter $ % ($ in millions) 2022 2021 Change Change Ecoservices Sales 159.8 142.0 17.8 12.5 Adjusted EBITDA1 54.4 52.3 2.0 3.9 Adjusted EBITDA Margin1 (%) 34.0 36.8 Ecoservices Highlights • Fourth quarter sales reflect higher pricing,
Slide 13: Catalyst Technologies – Q4 2022 Financial Performance
Catalyst Technologies – Q4 2022 Financial Performance Fourth Fourth Quarter Quarter $ % ($ in millions) 2022 2021 Change Change Silica Catalysts Sales 23.0 28.2 (5.2) (18.4) Zeolyst JV Sales 39.9 36.3 3.6 9.9 Adjusted EBITDA1 20.3 23.4 (3.1) (13.2) Adjusted EBITDA Margin1,2 (%) 32.3 36.3 Catalyst Te
Slide 14: Cash, Leverage & Liquidity
Cash, Leverage & Liquidity Strong Cash Conversion Provides for Capital Allocation Flexibility and Improving Leverage Profile ($ millions) Cash Conversion1 Net Debt Leverage Liquidity3 Ratio2 $236 79% 3.3x $137 mm of share 71% 72% 71% repurchases $203 $207 $199 3.1x $171 2.8x 2.8x 2.8x 2019 2020 2021
Slide 15: Balanced Capital Allocation Strategy to Support Growth Initiatives and Drive Shareholder Return
Balanced Capital Allocation Strategy to Support Growth Initiatives and Drive Shareholder Return Strong free cash flow generation provides financial flexibility and supports a balanced capital allocation strategy focused on: Cash Flow from Operations • Operational improvements & organic growth Less:
Slide 16: Ecovyst 2023 Outlook
Ecovyst 2023 Outlook Ecovyst ($ in millions, 2022 2023 except per share) Actual Outlook Sales1 $820 $760 -$790 Adjusted EBITDA Growth of 6% Zeolyst JV Sales $133 $145 – $155 In 2023 from 2022 Adjusted EBITDA2 $277 $285 – $300 Assuming midpoint of guidance Adjusted Free Cash Flow2 $146 $115 – $130 Ca
Slide 17: Summary
Summary Stable business performance and margin resilience provided for robust 1 Adjusted EBITDA growth in 2022 despite inflationary pressures and challenging global market fundamentals Strong cash generation capability provided for net debt leverage ratio 2 reduction while supporting significant sha
Slide 18: Appendix
APPENDIX
Slide 19: Annual Segment Sales, Adjusted EBITDA and Margins
Annual Segment Sales, Adjusted EBITDA and Margins Year Ended December 31, ($ in millions, except %) 2022 2021 2020 2019 Sales: Ecoservices 702.5 500.5 401.9 447.1 Silica Catalysts 117.7 110.7 94.0 85.7 Total sales 820.2 611.2 495.9 532.8 Zeolyst Joint Venture sales 132.6 131.3 128.6 170.3 Adjusted E
Slide 20: Ecoservices: North American Leader in Sulfuric Acid Recycling and Related Services
Ecoservices: North American Leader in Sulfuric Acid Recycling and Related Services with Key Competitive Position in Gulf Coast and California NEAR-TERM GROWTH FACTORS • Existing customer re-contracting, and favorable alkylate fundamentals expected to drive growth for regeneration services • Rising v
Slide 21: Catalyst Technologies: Global Leader in Tailored Catalyst Solutions
Catalyst Technologies: Global Leader in Tailored Catalyst Solutions NEAR-TERM GROWTH FACTORS • Preferred technology and increasing product offerings for strengthening & light weighting of materials projected to drive growth in polyethylene catalysts • Growing demand for renewable fuels • Increasing
Slide 22: Quarterly Segment Sales, Adjusted EBITDA and Margins
Quarterly Segment Sales, Adjusted EBITDA and Margins Twelve Twelve Months Months Three Months Ended Ended Three Months Ended Ended March 31, June 30, September 30, December 31, December 31, March 31, June 30, September 30, December 31, December 31, ($ in millions, except %) 2022 2022 2022 2022 2022
Slide 23: Sales and Adjusted EBITDA Major Change Factors
Sales and Adjusted EBITDA Major Change Factors Sales Three Months Ended December 31, 2022 Twelve Months Ended December 31, 2022 Sales Silica Silica (in $ millions and %) Ecovyst Ecoservices Catalysts Ecovyst Ecoservices Catalysts Sales: $ % $ % $ % $ % $ % $ % Volume (17.6) (10.3) (14.1) (9.9) (3.5)
Slide 24: Reconciliation of Net Income (Loss) to Adjusted EBITDA
Reconciliation of Net Income (Loss) to Adjusted EBITDA Year Ended December December December December ($ in millions) 31, 2022 31, 2021 31, 2020 31, 2019 Reconciliation of net income (loss) from continuing operations to Adjusted EBITDA Net income (loss) from continuing 1.8 54.3 31.1 operations 69.8
Slide 25: Reconciliation of Net Income (Loss) to Adjusted EBITDA
Reconciliation of Net Income (Loss) to Adjusted EBITDA Twelve Twelve Months Months Three Months Ended Ended Three Months Ended Ended March 31, June 30, September December December March June 30, September December 31, December ($ in millions, except %) 2022 2022 30, 2022 31, 2022 31, 2022 31, 2021 2
Slide 26: 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 the Catalyst Technologies segment includes our 50% interest in the Zeolyst Joint Venture, we include an adjustment for our 50% proportionate sh
Slide 27: Adjusted Free Cash Flow
Adjusted Free Cash Flow Full Year Full Year ($ in millions) 20211 2022 Cash Flow from Operations before interest and tax 200.7 247.5 Less: Cash paid for taxes 11.8 25.5 Less: Cash paid for interest2 59.0 35.4 Cash Flow from Operations 129.9 186.6 Less: Purchases of property, plant and equipment3 91.
Slide 28: Cash Conversion, Liquidity, Leverage
Cash Conversion, Liquidity, Leverage Cash Conversion ($ in millions, except %) 2019 2020 2021 2022 Adjusted EBITDA 240.2 192.6 227.6 276.8 Less: Capex1 70.3 54.5 66.4 58.4 Cash Conversion 169.9 138.1 161.2 218.4 Cash Conversion %2 71% 72% 71% 79% Liquidity Q4 Q1 Q2 Q3 Q4 ($ in millions) 2021 2022 20
Slide 29: Growing + Greening
Growing + Greening YOUR CATALYST FOR POSITIVE CHANGE ™