Graftech International Ltd. · NYSE:EAF
Graftech International — Q3 2021 Earnings Presentation
17 slides from Graftech International's earnings presentation, Nov 5, 2021
Slide 1: Q3 2021 Results
Q3 2021 Results November 5, 2021 NYSE: EAF www.graftech.com
Slide 2: Forward-looking Statements
Forward-looking Statements NOTE ON FORWARD-LOOKING STATEMENTS: This presentation and related discussions may contain forward-looking statements that reflect our current views with respect to, among other things, future events and financial performance. You can identify these forward-looking statemen
Slide 3: Prioritizing Safety – Continued YTD Improvement
Prioritizing Safety – Continued YTD Improvement Total Recordable Injury Rates1 1.63 1.55 0.95 0.51 0.47 2017 2018 2019 2020 Q3 YTD 2021 1 Total recordable injury rates measured per 200,000 hours worked. 3
Slide 4: Positive Industry Growth & Pricing
Positive Industry Growth & Pricing Steel Industry Fundamentals continued to improve in Q3 ▪ Global steel production, excluding China, of ~218 million tons in Q3; up 15% year-over-year1 ▪ Global steel manufacturing utilization rate, excluding China, was ~74% in Q32 ▪ Steel prices continue to be at or
Slide 5: Commercial Outlook Improving
Commercial Outlook Improving ▪ Market conditions have continued to improve in 2021 ▪ Accelerating demand for our products resulting in strong sequential and year over year performance ▪ Expect 4th quarter realized non-LTA prices to increase 7-9% over the third quarter of 2021, with a larger sequenti
Slide 6: Strong Production and Sales Growth
Strong Production and Sales Growth ▪ Production up 22%, Sales Volume up 30% and Net Sales up 21% vs. Q3 2020 ▪ Focused on operational excellence as demand accelerates Production (000 MT) Sales Volumes (000 MT) Net Sales ($ Million) 44 43 43 $338 $331 $347 39 $304 37 37 $287 36 36 32 33 Q3/20 Q4/20 Q
Slide 7: Sustainability Report Highlights Continued ESG Progress
Sustainability Report Highlights Continued ESG Progress Launched Second Annual Sustainability Report in September Highlights of our 2020 Sustainability Report include: ▪ CEO Message and an Overview of our Material ESG Topics and Sustainability Strategy ▪ Workforce, Health and Safety and Talent Manag
Slide 8: Robust Earnings and Cash Flow Improvement
Robust Earnings and Cash Flow Improvement ▪ Continuing to deliver strong results in Q3 2021 ▪ EPS of $0.45, net income of $120 million and net income margin of 35% ▪ Adjusted EBITDA1 of $172 million and adjusted EBITDA margin2 of 50% ▪ Operating cash flow of $134 million, free cash flow of $120 mill
Slide 9: Balance Sheet Strength and Financial Flexibility
Balance Sheet Strength and Financial Flexibility Strengthening Capital Structure through Significant Deleveraging ▪ Reduced debt by $100 million in Q3, $300 million Q3 YTD; continuing to decrease amount maturing in 2025 ▪ Total Debt / Adjusted EBITDA1 1.7x compared to 2.2x as of Q3 2020 ▪ Liquidity
Slide 10: Delivering on Key Capital Allocation Priorities
Delivering on Key Capital Allocation Priorities Generate Meaningful Cash Flows ▪ Delivering strong cash flow in 2021 ▪ Operating cash flow of $134 million and adjusted free cash flow1 of $125 million ▪ Converted 73% percent of adjusted EBITDA2 to adjusted free cash flow1, 3 Strong Balance Sheet for
Slide 11: An Industry-Leading Producer of Graphite Electrodes
An Industry-Leading Producer of Graphite Electrodes ✓ Graphite electrodes are a highly engineered, mission critical industrial consumable for electric arc furnace steel production, that constitute less than 5% of customer COGS ▪ EAF steelmaking long-term historical growth rate of about 3%1, low capi
Slide 12: Disclosures
| Disclosures Ml“ GRAF | ec International
Slide 13: Non-GAAP Financial Measures
Non-GAAP Financial Measures Investors are encouraged to read the information contained in this presentation in conjunction with the following information, the Forward-looking statements information on page 2 and the factors described under the “Risk Factors” section of the Company’s most recent Annu
Slide 14: Reconciliation to Adjusted Net Income
Reconciliation to Adjusted Net Income For the Three Months Ended Sept 30, Dec 31, March 31, June 30, Sept 30, ($ in thousands) 2020 2020 2021 2021 2021 Net income $ 94,234 $ 125,096 $ 98,799 $ 28,165 $ 119,886 Adjustments (pre-tax): Pension and OPEB plan expenses (1) 583 4,430 431 430 434 Public off
Slide 15: Reconciliation to Adjusted EPS
Reconciliation to Adjusted EPS For the Three Months Ended Sept 30, Dec 31, March 31, June 30, Sept 30, 2020 2020 2021 2021 2021 Earnings per share $ 0.35 $ 0.47 $ 0.37 $ 0.11 $ 0.45 Adjustments per share: Pension and OPEB plan expenses (1) - 0.02 - - - Public offerings and related expenses (2) - - -
Slide 16: Reconciliation to Adjusted EBITDA
Reconciliation to Adjusted EBITDA For the Three Months Ended TTM Ended Dec 31, March 31, June 30, Sept 30, Dec 31, March 31, June 30, Sept 30, Sept 30, Sept 30, ($ in thousands) 2019 2020 2020 2020 2020 2021 2021 2021 2020 2021 Net income $ 174,922 122,268 $ 92,776 $ 94,234 $ 125,096 $ 98,799 $ 28,1
Slide 17: Reconciliation to Free Cash Flow and Adjusted Free Cash Flow
Reconciliation to Free Cash Flow and Adjusted Free Cash Flow For the Three Months Ended June 30, Sept 30, Dec 31, March 31, June 30, Sept 30, ($ in thousands) 2020 2020 2020 2021 2021 2021 Net cash provided by operating activities $ 148,373 $ 129,009 $ 146,981 $ 122,425 $ 86,330 $ 134,256 Capital ex
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