Ecovyst Inc. · NYSE:ECVT
Ecovyst — PQ Group Holdings — Investor Presentation (November 2020)
19 slides from Ecovyst's investor presentation, November 2020
Slide 1: Investor Presentation
INVESTOR PRESENTATION November 2020 Investor Meetings
Slide 2: Legal Discussion: Forward-Looking Statements
LEGAL DISCUSSION Forward-Looking Statements Some of the information contained in this presentation, the conference call during which this presentation is reviewed and any discussions that follow constitutes “forward-looking statements”. Forward-looking statements can be identified by words such as “
Slide 3: PQ: Accelerating Transformation to Unlock Value
PQ: ACCELERATING TRANSFORMATION TO UNLOCK VALUE 1. Strong Record of Operating/Commercial Execution 2. Premium Portfolio with Strategic Transformation Under Way 3. Innovating to Drive Sustainability Solutions 4. Strong Cash Generation and Expanded Capital Allocation 5. Multiple Metrics Point to PQ as
Slide 4: PQ's Simpler + Stronger Strategy
PQ’S SIMPLER + STRONGER STRATEGY EVALUATION – 2018 SIMPLIFICATION – 2019 TRANSFORMATION – 2020 PATHWAY GOALS Delayered and reorganized into Enhance growth rate four distinct businesses Achieve higher and sustainable Optimized the performance and Adjusted EBITDA margins positioning of our businesses,
Slide 5: Portfolio Shifts to Higher Growth and Margins
PORTFOLIO SHIFTS TO HIGHER GROWTH AND MARGINS TARGET PQ: Catalysts / Refining Services CURRENT PQ: 2017–2019 Catalysts / Refining Services / Performance Chemicals Financial Performance LEGACY PQ: Catalysts / Refining Services / Performance Chemicals / Performance Materials SALES CAGR 7% 100% ADJUSTE
Slide 6: Catalysts: Essential for a Sustainable Future
CATALYSTS: ESSENTIAL FOR A SUSTAINABLE FUTURE Competitive Strengths Attractive Growth & Margins Growth Drivers o PQ silica-based catalyst Sales o ~80% of polyethylene technology improves capacity expansions specify strength-to-weight ratio of 170 silica-based catalyst HDPE and LLDPE technology 86 45
Slide 7: Refining Services: Critical for Sustainable Fuel Production
REFINING SERVICES: CRITICAL FOR SUSTAINABLE FUEL PRODUCTION Competitive Strengths Attractive Growth & Margins Growth Drivers o Largest regeneration Sales o Rising North American network for recycling of alkylate unit production for sulfuric acid catalyst in higher octane gasoline U.S. Gulf and West
Slide 8: Target PQ Portfolio Positioned to Serve Two Key Long-Term Sustainable Trends
“TARGET PQ” PORTFOLIO POSITIONED TO SERVE TWO KEY LONG-TERM SUSTAINABLE TRENDS ~80% of innovation projects within Target PQ have links to sustainability Trusted supply and technical support for customers Innovation and collaboration to help our customers define a sustainable future Operating and sup
Slide 9: Capital Allocation Priorities to Include Special Dividends
CAPITAL ALLOCATION PRIORITIES TO INCLUDE SPECIAL DIVIDENDS CONSISTENT TRANSACTION AND CASH SIGNIFICANT ADJUSTED FREE CASH FLOW GENERATION PROVIDE USE DEBT REDUCTION… GENERATION2… OF PROCEEDS FLEXIBILITY… ($ in millions) ($ in millions) 2,703 Expect to reduce debt 166 by ~$460 million 155 145 Targeti
Slide 10: PQ Undervalued vs Specialty Chemical Peers
PQ UNDERVALUED VS SPECIALTY CHEMICAL PEERS Cash Conversion Adj EBITDA Margin ’19A1,2 ’19A1 94.0% 30.7% 85.7% 29.3% 27.3% 73.1% Median: 71.2% 71.1% Metrics 66.2% Median: 22.7% 71.2% 22.7% 21.2% 14.9% PQ ASH ESI FUL GRA NGVT PQ ASH ESI FUL GRA NGVT FCF Yield Adj EBITDA Multiple ’19A FCF1,3 / Market Ca
Slide 11: Transforming Potential, Compelling Investment
TRANSFORMING POTENTIAL, COMPELLING INVESTMENT Transforming portfolio to target KEY PRIORITIES FORhigher margins and higher growth potential PORTFOLIO TRANFORMATION: Favorable long-term secular demand drivers oUnlock value of Innovative culture and excellent customer businesses relationships/position
Slide 12: Supplemental Information
SUPPLEMENTAL INFORMATION 12
Slide 13: Next Portfolio Focus: Performance Chemicals
NEXT PORTFOLIO FOCUS: PERFORMANCE CHEMICALS PERFORMANCE CHEMICALS KEY Diverse Consumer Product and CUSTOMERS Industrial Product manufacturers COMPETITIVE STRENGTHS GROWTH DRIVERS o Technology leader in silica-based materials o $10 to $15 million Adjusted EBITDA annualized improvement (process and pr
Slide 14: 2020 Financial Guidance
2020 FINANCIAL GUIDANCE 2020 2020 ($ in millions, 2019 Outlook including From Continuing except per share) Actual Performance Materials Operations Sales1 1,567.1 1,430 – 1,460 1,080 – 1,100 Adjusted EBITDA 474.3 410 – 425 330 – 345 Adjusted Free Cash Flow2 166.2 145 – 1553 95 – 1053 Capital Expendit
Slide 15: Annual Segment Sales, Adjusted EBITDA and Margins
ANNUAL SEGMENT SALES, ADJUSTED EBITDA AND MARGINS Year Ended For the Quarter Ended December 31, ($ in millions except %, unaudited) 2019 2018 2017 Sales: Refining Services 447.1 455.6 398.4 Silica Catalysts 85.7 72.1 75.3 Performance Materials 363.0 378.3 324.2 Performance Chemicals 685.1 717.3 687.
Slide 16: Reconciliation for Adjusted Free Cash Flow
RECONCILIATION FOR ADJUSTED FREE CASH FLOW Full Year Full Year Full Year ($ in millions) 2019 2018 2017 Cash Flow from Operations before interest 401.9 377.5 364.5 and tax Less: Cash paid for taxes 17.4 23.8 29.2 Cash paid for interest1 116.8 105.1 170.1 Cash Flow from Operations 267.7 248.6 165.2 L
Slide 17: Reconciliation for Net Income to Segment Adjusted EBITDA
RECONCILIATION FOR NET INCOME TO SEGMENT ADJUSTED EBITDA Year Ended Year Ended Year Ended December 31, December 31, December 31, ($ in millions) 2019 2018 2017 Reconciliation of net income attributable to PQ Group Holdings Inc. to Segment Adjusted EBITDA Net income attributable to PQ Group Holdings
Slide 18: Descriptions to Non-GAAP Reconciliation
DESCRIPTIONS TO NON-GAAP RECONCILIATION a) We use Adjusted EBITDA as a performance measure to evaluate our financial results. Because our Catalysts segment includes our 50% interest in the Zeolyst Joint Venture, we include an adjustment for our 50% proportionate share of depreciation, amortization a
Slide 19: Shaping our path for a sustainable future
Shaping our path fora sustainable future . fe) PQ Corporation
PQ Group Holdings — Investor Presentation (November 2020) on 6ix