Quaker Houghton · NYSE:KWR
Quaker Houghton — Q4 2023 Earnings Presentation
21 slides from Quaker Houghton's earnings presentation, Mar 1, 2024
Slide 1: Fourth Quarter and Full Year 2023 Results
Quaker Houghton Fourth Quarter and Full Year 2023 Results Investor Conference Call
Slide 2: Forward-Looking Statements
Forward-Looking Statements Regulation G The attached charts include Company information that does not conform to generally accepted accounting principles (“GAAP”). Management believes that an analysis of this data is meaningful to investors because it provides insight with respect to ongoing operati
Slide 3: Non-GAAP and Pro Forma Measures
Non-GAAP and Pro Forma Measures The information included in this presentation includes non-GAAP (unaudited) financial information that includes EBITDA, adjusted EBITDA, adjusted EBITDA margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income and non-GAAP earnings per diluted
Slide 4: Speakers
Speakers Andrew E. Tometich Chief Executive Officer, President Shane W. Hostetter Executive Vice President, Chief Financial Officer Robert T. Traub Senior Vice President, General Counsel & Corporate Secretary Jeffrey M. Schnell Vice President, Investor Relations 4 ©2024 Quaker Houghton. All Rights R
Slide 5: Q4'23 Highlights
Q4’23 Highlights Delivered net sales of $467M and adjusted EBITDA1 of $77M, a 13% increase Y/Y Non-GAAP EPS1 of $1.78 increased 28% Y/Y driven by improved earnings Generated ~$80M operating cash flow in 4Q’24; and a record $279M of operating cash flow in 2023 Strengthened our balance sheet - leverag
Slide 6: Financial Snapshot
Financial Snapshot (Unaudited; Dollars in millions, unless otherwise noted) Q4 2023 Q4 2022 Variance(1) Q3 2023 Variance(1) YTD 2023 YTD 2022 Variance(1) GAAP Net sales $ 467.1 $ 484.8 $ (17.7) (3.6%) $ 490.6 $ (23.5) (4.8%) $1,953.3 $1,943.6 $ 9.7 0.5% Gross profit 171.2 156.3 14.9 9.5% 183.3 (12.1
Slide 7: Total Company Volume Trend
1 Total Company Volume Trend (kilograms, in thousands) 150,000 125,000 100,000 75,000 50,000 25,000 — Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Sales volumes in Q4’23 declined 1% compared to Q4’22 primarily due to
Slide 8: Adjusted EBITDA
1,2 Adjusted EBITDA (dollars in millions) $320 $77 $274 $257 $68 $236 $234 $221 $222 $215 2016 2017 2018 2019 2020 2021 2022 2023 Q4 2022 Q4 2023 Generated $77M of adjusted EBITDA in Q4’23, a +13% increase Y/Y, primarily due to our margin improvement initiatives 1 Periods presented prior to the Comb
Slide 9: Leverage and Liquidity Update
Leverage and Liquidity Update Net Debt and Leverage Ratio1 (Dollars in Millions) • Total debt of $755.6 million $765 $787 $815 $774 • Cash and cash equivalents of $194.5 million $741 $750 $759 $759 $753 $717 $736 $696 • Net debt of $561.1 million $628 $561 • Leverage of 1.8x as of December 31, 20231
Slide 10: Appendix: Actual and Non-GAAP Results
Appendix Actual and Non-GAAP Results
Slide 11: Non-GAAP Operating Reconciliation
Non-GAAP Operating Reconciliation (Unaudited; Dollars in thousands, unless otherwise noted) Three Months Ended Twelve Months Ended December 31, December 31, Non-GAAP Operating Income and Margin Reconciliations: 2023 2022 2023 2022 Operating income (loss) $ 48,253 $ (53,611) $ 214,495 $ 52,304 Combin
Slide 12: Adjusted EBITDA & Non-GAAP Net Income Reconciliation
Adjusted EBITDA & Non-GAAP Net Income Reconciliation (Unaudited; Dollars in thousands, unless otherwise noted) Three Months Ended Twelve Months Ended December 31, December 31, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Non-GAAP Net Income Reconciliations: 2023 2022 2023 2022 Net income (los
Slide 13: Non-GAAP EPS Reconciliation
Non-GAAP EPS Reconciliation Three Months Ended Twelve Months Ended December 31, December 31, Non-GAAP Earnings per Diluted Share Reconciliations: 2023 2022 2023 2022 GAAP earnings (loss) per diluted share attributable to Quaker Chemical Corporation common shareholders $ 1.12 $ (4.24) $ 6.26 $ (0.89)
Slide 14: Segment Performance
Segment Performance (Unaudited; Dollars in thousands, except per share amounts) Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Net sales Americas $ 226,564 $ 243,937 $ 977,095 $ 946,516 EMEA 135,745 135,769 571,347 562,508 Asia/Pacific 104,800 105,102 404,871 43
Slide 15: Historical Segment Net Sales
1 Historical Segment Net Sales (Unaudited; Dollars in millions) Net Sales Quarterly Segment Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1’23 Q2’23 Q3’23 Q4’23 Americas $ 172.6 $ 115.2 $ 159.3 $ 159.9 $ 180.8 $ 186.6 $ 197.4 $ 197.4 $ 212.1 $ 235.8 $ 254.7 $ 243.9 $ 251.4
Slide 16: Historical Segment Operating Earnings
1 Historical Segment Operating Earnings (Unaudited; Dollars in millions) Segment Operating Earnings Quarterly Segment Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1’23 Q2’23 Q3’23 Q4’23 Americas $ 41.3 $ 19.7 $ 43.8 $ 37.1 $ 44.7 $ 47.7 $ 43.4 $ 40.5 $ 45.0 $ 52.1 $ 66.8
Slide 17: Appendix
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Slide 18: Full Year 2019 Pro Forma Reconciliation
Full Year 2019 Pro Forma Reconciliation (dollars in millions) 2019 Quaker Houghton Divestitures Other (a) Pro Forma* Net Sales $ 1,134 $ 475 $ (34) $ (13) $ 1,562 Net Income (Loss) Attributable to Quaker Houghton $ 32 $ (3) $ (6) $ 10 $ 33 Depreciation and Amortization 45 31 — 3 77 Interest Expense,
Slide 19: Full Year 2018 Pro Forma Reconciliation
Full Year 2018 Pro Forma Reconciliation (dollars in millions) 2018 Quaker Houghton Divestitures Other (a) Pro Forma* Net Sales $ 868 $ 861 $ (53) $ (22) $ 1,655 Net Income (Loss) Attributable to Quaker Houghton 59 — (9) 17 66 Depreciation and Amortization 20 54 — 5 79 Interest Expense, Net 4 56 — (2
Slide 20: Full Year 2017 Pro Forma Reconciliation
Full Year 2017 Pro Forma Reconciliation (dollars in millions) 2017 Quaker Houghton Divestitures Other (a) Pro Forma* Net Income (Loss) Attributable to Quaker Houghton $ 20 $ (47) $ (9) $ 9 $ (26) Depreciation and Amortization 20 55 — 5 80 Interest Expense, Net 1 51 — (16) 36 Taxes on Income (b) 42 4
Slide 21: Full Year 2016 Pro Forma Reconciliation
Full Year 2016 Pro Forma Reconciliation (dollars in millions) 2016 Quaker Houghton Divestitures Other (a) Pro Forma* Net Income (Loss) Attributable to Quaker Houghton $ 61 $ (37) $ (8) $ 7 $ 23 Depreciation and Amortization 20 55 — 5 80 Interest Expense, Net 1 51 — (14) 37 Taxes on Income (b) 23 (5)