Slide 1: Q2 2023 Results
Q2 2023 Results August 4, 2023 NYSE: EAF www.graftech.com
Slide 2: Today's Presenters
Today’s Presenters Marcel Kessler Jeremy Halford Tim Flanagan Chief Executive Officer and Executive Vice President, Chief Financial Officer, President Chief Operating Officer Senior VP Finance and Treasurer 2
Slide 3: Forward-Looking Statements
Forward-Looking Statements CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: This presentation and related discussions may contain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements
Slide 4: Key Discussion Topics
Key Discussion Topics 1 Q2 2023 results represented sequential improvement in key metrics 2 Softness in commercial environment tempering outlook for second half of 2023 3 Successfully executing plans to navigate the current environment 4 Taking actions to optimally position GrafTech to benefit from
Slide 5: Current Business Environment
Current Business Environment Commercial Outlook ▪ Steel industry production remains constrained ▪ Near-term softness in graphite electrode demand Successfully Executing Plans to Navigate Current Environment ▪ Aligning production volume with demand outlook ▪ Managing costs, capital expenditures and w
Slide 6: Prioritizing Safety
Prioritizing Safety Total Recordable Incident Rate (“TRIR”)(1) 0.95 0.94 0.51 0.49 0.45 2019 2020 2021 2022 Q2 YTD 2023 (1) TRIR measured per 200,000 hours worked. 6
Slide 7: Steel Industry Trends
Steel Industry Trends ▪ Sequential improvement in certain market indicators, although remain below prior year levels ▪ Global steel production, excluding China, of 208 million tons in Q2 2023 versus 213 million tons in Q2 2022(1) Steel Capacity Utilization Rates(2) 81% 78% 77% 75% 70% 72% 65% 64% 66
Slide 8: Production and Sales
Production and Sales ▪ Q2 2023 production volume down 43%, sales volume down 38% and net sales down 49% compared to Q2 2022 ▪ Reflects residual impact of suspension of Monterrey, Mexico operations and softness in graphite electrode demand ▪ Q2 2023 production and sales metrics increased sequentially
Slide 9: Earnings and Cash Flow
Earnings and Cash Flow (1) ▪ Net loss of $8 million, or $0.03 per share , for a net loss margin of 4% (2) (3) ▪ Adjusted EBITDA of $26 million and adjusted EBITDA margin of 14% (2) ▪ Net cash used in operating activities of $9 million and adjusted free cash flow of $0.3 million Adjusted Earnings (Lo
Slide 10: Balance Sheet Strength and Financial Flexibility
Balance Sheet Strength and Financial Flexibility ▪ During Q2 2023, completed a private offering of $450 million senior secured notes due 2028 o Net proceeds used to repay debt outstanding under secured term loan due 2025 o No debt maturities until December 2028 ▪ As of June 30, 2023: (1) o Gross deb
Slide 11: Taking Actions to Benefit from Industry Tailwinds
Taking Actions to Benefit from Industry Tailwinds Long-term Industry Tailwinds ▪ Steel industry’s efforts to decarbonize expected to drive a continued shift to electric arc furnace (“EAF”) steelmaking ▪ Anticipate medium- to long-term demand growth for graphite electrodes driven by this ongoing tran
Slide 12: Why GrafTech?
Why GrafTech? An Industry Leader in the Production of High-Quality Graphite Electrodes ▪ Graphite electrodes are essential to the operation of an EAF ▪ Reflecting environmental benefits, growth in EAF steelmaking expected to continue outpacing integrated steelmaking Sustainable Competitive Advantage
Slide 13: Non-GAAP Financial Measures
Non-GAAP Financial Measures In addition to providing results that are determined in accordance with GAAP, we have provided certain financial measures that are not in accordance with GAAP. EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net (loss) income, adjusted (loss) earnings per share,
Slide 14: Reconciliation to Adjusted Net (Loss) Income
Reconciliation to Adjusted Net (Loss) Income Three Months Ended June 30, Mar 31, Dec 31, Sept 30, June 30, ($ in thousands) 2023 2023 2022 2022 2022 Net (loss) income $ (7,851) $ (7,369) $ 50,331 $ 93,451 $ 114,997 Adjustments, pre-tax: Pension and OPEB plan expenses (benefits)(1) 899 918 (8,993) 53
Slide 15: Reconciliation to Adjusted (Loss) Earnings Per Share
Reconciliation to Adjusted (Loss) Earnings Per Share Three Months Ended June 30, Mar 31, Dec 31, Sept 30, June 30, 2023 2023 2022 2022 2022 (Loss) earnings per share $ (0.03) $ (0.03) $ 0.20 $ 0.36 $ 0.44 Adjustments per share, pre-tax: Pension and OPEB plan expenses (benefits)(1) - 0.01 (0.04) - -
Slide 16: Reconciliation to Adjusted EBITDA
Reconciliation to Adjusted EBITDA Three Months Ended June 30, Mar 31, Dec 31, Sept 30, June 30, ($ in thousands) 2023 2023 2022 2022 2022 Net (loss) income $ (7,851) $ (7,369) $ 50,331 $ 93,451 $ 114,997 Add: Depreciation and amortization 15,322 10,777 13,788 13,262 14,012 Interest expense 13,907 12
Slide 17: Reconciliation to Net Debt and Calculation of Debt to Adjusted EBITDA
Reconciliation to Net Debt and Calculation of Debt to Adjusted EBITDA June 30, Dec 31, ($ in thousands) 2023 2022 Long-term debt $ 923,394 $ 921,803 Long-term debt, current maturities 130 124 Add: Unamortized debt discount and issuance costs (26,750) (12,049) Total gross debt 950,274 933,976 Less: C
Slide 18: Reconciliation to Free Cash Flow and Adjusted Free Cash Flow
Reconciliation to Free Cash Flow and Adjusted Free Cash Flow Three Months Ended June 30, Mar 31, Dec 31, Sept 30, June 30, ($ in thousands) 2023 2023 2022 2022 2022 Net cash (used in) provided by operating activities $ (9,024) $ 24,798 $ 50,023 $ 68,166 $ 60,123 Capital expenditures (14,518) (25,271
Slide 19: Reconciliation to Cash Cost of Goods Sold per MT
Reconciliation to Cash Cost of Goods Sold per MT Three Months Ended Six Months Ended Year Ended June 30, Mar 31, Dec 31, Sept 30, June 30, June 30, June 30, Dec 31, ($ in thousands, except per MT amounts) 2023 2023 2022 2022 2022 2023 2022 2022 Cost of goods sold $ 157,216 $ 112,645 $ 163,492 $ 170,
Slide 20: GrafTech International Ltd. contact details
GrafTech International Ltd. 982 Keynote Circle Brooklyn Heights, Ohio 44131 Ticker: EAF (NYSE) Website: www.graftech.com Contact: Michael Dillon Email: investor.relations@graftech.com Phone: 1.216.676.2000