Ecovyst Inc. · NYSE:ECVT
Ecovyst — PQ Group Holdings — Investor Presentation (March 2019)
26 slides from Ecovyst's investor presentation, March 2019
Slide 1: Investor Presentation February – March 2019
INVESTOR PRESENTATION February – March 2019 1
Slide 2: Legal Disclaimer
LEGAL DISCLAIMER Forward-Looking Statements Some of the information contained in this presentation and any discussions that follow constitutes “forward-looking statements”. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimate
Slide 3: Portfolio Strengths and Priorities
PORTFOLIO STRENGTHS AND PRIORITIES Drive Shareholder Value KEY VALUE DRIVERS Profitable COMPETITIVE ADVANTAGES Growth Unique portfolio of businesses Capital Leading positions in Commercial Intensity secular growth markets Efficiency Innovation potential Free Cash Flow 3
Slide 4: Advancing Goal of a Simpler + Stronger Portfolio
ADVANCING GOAL OF A SIMPLER + STRONGER PORTFOLIO OPTIMIZING TECHNOLOGY MODEL SIMPLIFYING BUSINESS PORTFOLIO EVALUATION OPTIMIZATION ENABLEMENT EVALUATION SIMPLIFICATION TRANSFORMATION Commercial Value Four Businesses o Rationalization o Autonomy o Time Value of Technology o Focus o Commercial Effici
Slide 5: Our Business Units
OUR BUSINESS UNITS Specialty, Leading and Differentiated REFINING PERFORMANCE PERFORMANCE SERVICES CATALYSTS1 MATERIALS CHEMICALS Increased octane Tighter fuels standards Higher highway Environmentally driven demand Light weighting demand safety standards consumer demand o Sulfuric acid production e
Slide 6: Demonstrated Strong Financial Performance Across Macroeconomic Cycles
DEMONSTRATED STRONG FINANCIAL PERFORMANCE ACROSS MACROECONOMIC CYCLES Stability Through Cycles with Attractive Margins Adjusted EBITDA and Adjusted EBITDA Margin (%)1,2,3 ($ in millions except %) (1) Adjusted EBITDA for the period from 2005 to 2014 represents Legacy Eco Adjusted EBITDA and Legacy PQ
Slide 7: Adjusted Free Cash Flow Drives Delevering Progress
ADJUSTED FREE CASH FLOW DRIVES DELEVERING PROGRESS Secular market growth trends, leading positions drive healthy margins and adjusted free cash flow performance ADJUSTED FREE CASH FLOW ($mm) NET DEBT/ADJUSTED EBITDA RATIO All Adjusted Free Cash Flow used to repay debt Progress to leverage target of
Slide 8: Supplementary Information
SUPPLEMENTARY INFORMATION
Slide 9: Supplemental Information
SUPPLEMENTAL INFORMATION 2018 Capital Expenditures, Revenues by End Use, Customer and Region CAPITAL EXPENDITURES Full Year Full Year ($ in millions) 2018 2017 % OF GROWTH BY END USE 4 By Segment Fuels & Emissions Controls + 6% Performance Materials & Chemicals 75.5 84.8 Highway Safety & Constructio
Slide 10: Fuel and Emission Control Catalysts
#1 global supplier ZEOLYST INTERNATIONAL – of emission catalysts FUEL AND EMISSION CONTROL CATALYSTS Growth from increased fuel and emissions regulations Removing NOx from Vehicle Emissions: Removing Sulfur from Fuels: Global Mix (000) and Catalyst Consumption for HDD Vehicles Hydrocracking Projecte
Slide 11: Silica Catalysts
#2 global supplier of silica based catalysts SILICA CATALYSTS 2019 growth expected to be steady from PE, with step-change from MMA re-fill POLYETHYLENE METHYL METHACRYLATE Capacity by HDPE/LLDPE Licensor Global Consumption End Uses 120 90 Others Polymethylmethacrylate (PMMA) Million MT Dow (e.g. acr
Slide 12: Performance Materials
#1 global provider of PERFORMANCE MATERIALS engineered safety beads Increased standards for transportation safety drive demand Product Line Lead road marking bead supplier in North Other 4% America, Europe and Latin America Broad global network with 28 production Engineered Glass Materials facilitie
Slide 13: Performance Chemicals
#1 North America & PERFORMANCE CHEMICALS Europe silicates supplier Growing trends for environmentally friendly and sustainable products Product Line > 2x sodium silicate supply share of nearest Other competitor 18% Spray Dry ~ 70% contracted sales with 1 – 3 year term; Silicates 6% Sodium ~ 45% Nort
Slide 14: Refining Services
#1 U.S. Supplier REFINING SERVICES PQ well positioned to serve new capacity expansions in Gulf Gulf Coast Sulfuric Acid Regeneration Demand Planned alkylation expansions, (000 Tons Per Year) all Gulf Coast, Sulfuric-based 2,200 Expansions driven by: o Growth in premium share 1,600 of total gasoline
Slide 15: 2019 Guidance
2019 GUIDANCE Expected Adjusted Free Cash Flow Range of $125 Million to $145 Million 2018 2019 ($ in millions except %) Actual Outlook Sales 1,608.2 1,640 – 1,670 Adjusted EBITDA 464.0 470 – 485 Adjusted Free Cash Flow 134.2 125 – 145 Adjusted Diluted EPS $0.87 $0.75 - $0.93 Interest Expense 113.7 1
Slide 16: Quarterly Sales, Adjusted EBITDA & Adjusted EBITDA Margin
QUARTERLY SALES, ADJUSTED EBITDA & ADJUSTED EBITDA MARGIN Year 2018 and 2017 Three Months Ended Year Ended For the Quarter Ended Three Months Ended Year Ended September September March 31, June 30, 30, December 31, December 31, March 31, June 30, 30, December 31, December 31, ($ in millions except %
Slide 17: Adjusted Free Cash Flow
ADJUSTED FREE CASH FLOW Adjusted Free Cash Flow Rises ~ $110 million from 2017 Full Year Full Year ($ in millions) 2018 2017 Cash Flow from Operations before interest and tax 377.5 364.5 Less: Cash paid for taxes 23.8 29.2 Cash paid for interest 105.1 170.1 Cash Flow from Operations 248.6 165.2 Less
Slide 18: Reconciliation of Cash from Operations to Adjusted Free Cash Flow
RECONCILATION OF CASH FROM OPERATIONS TO ADJUSTED FREE CASH FLOW Three months ended Three months ended Year ended September 30, December 31, December 31, ($ in millions) 2018 2017 2018 2017 2018 2017 Net cash provided by operating activities 115.9 88.0 82.6 55.4 248.6 165.2 Less: Purchases of proper
Slide 19: Reconciliation of Quarterly Net Income to Adjusted Net Income and EPS
RECONCILATION OF QUARTERLY NET INCOME TO ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE Year 2018 and 2017 and Year 2017 Three Months Ended Year Ended Three Months Ended Year Ended March 31, June 30, September 30, For the Quarter December Ended 31, 31, December March 31, June 30, Septem
Slide 20: Reconciliation of Net Income (Loss) to Segment Adjusted EBITDA
RECONCILATION OF NET INCOME (LOSS) TO SEGMENT ADJUSTED EBITDA Year 2018 and 2017 Three Months Ended Year Ended Three Months Ended Year Ended September December March 31, June 30, September 30, December 31, December 31, March 31, June 30, 30, December 31, ($ in millions, unaudited) 2018 2018 2018 201
Slide 21: Reconciliation of Sales & Adjusted EBITDA 2005 – 2014 Legacy Business
RECONCILIATION OF SALES & ADJUSTED EBITDA 2005 – 2014 Legacy Business Year Ended December 31, 2015 2016 Pro Pro ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 forma 3 forma 3 2017 2018 Reconciliation of sales and adjusted EBITDA Legacy PQ Sales 1 635.3 708.6 775.0 977.0 1,009.9 1,
Slide 22: Reconciliations for Adjusted EBITDA and Margins
RECONCILIATIONS FOR ADJUSTED EBITDA AND MARGINS 2005 – 2014 Legacy PQ1 – Net Income (Loss) to Adjusted EBITDA Reconciliation Year Ended December 31, ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Reconciliation of net income (loss) attributable to Legacy PQ to Adjusted EBITDA Net
Slide 23: Reconciliations for Adjusted EBITDA and Margins
RECONCILIATIONS FOR ADJUSTED EBITDA AND MARGINS 2005 – 2014 Legacy Eco Services1 - Net Income (Loss) to Adjusted EBITDA Reconciliation Year Ended December 31, 2014 2014 ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 Successor Predecessor Reconciliation of net income (loss) attributable
Slide 24: Reconciliations for Adjusted EBITDA and Margins
RECONCILIATIONS FOR ADJUSTED EBITDA AND MARGINS 2015 - 2018 Post-Business Combination PQ – Net Income (Loss) to Adjusted EBITDA Reconciliation Year Ended December 31, 2015 2016 ($ in millions) Pro forma 1 Pro forma 1 2017 2018 Reconciliation of net income (loss) attributable to PQ Group Holdings Inc
Slide 25: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Descriptions to PQ Non-GAAP Reconciliations Descriptions to PQ Non-GAAP Reconciliations a) We use Adjusted EBITDA as a performance measure to evaluate our financial results. Because our Catalysts segment includes our 50% interest in our Zeolyst Joint Ven
Slide 26: Leading the
Leading the way to a a ye jo ——_ <r
PQ Group Holdings — Investor Presentation (March 2019) on 6ix