Nacco Industries, Inc. · NYSE:NC
Nacco Industries — Investor Presentation (March 2022)
37 slides from Nacco Industries's investor presentation, Mar 31, 2022
Slide 1: 2021 Investor Presentation
2021 Investor Presentation Exhibit 99
Slide 2: Safe Harbor Statement and Disclosure
Safe Harbor Statement and Disclosure This presentation includes forward-looking comments subject to important risks and uncertainties. It may also contain financial measures that are not in conformance with accounting principles generally accepted in the United States of America (GAAP) Refer to
Slide 3: Company Overview
Company Overview NACCO Industries® brings natural resources to life by delivering aggregates, minerals, reliable fuels and environmental solutions through its robust portfolio of NACCO Natural Resources businesses
Slide 4: Four Businesses Charting Our Future Through Two Key Strategies
Four Businesses Charting Our Future Through Two Key Strategies… …while maintaining a conservative balance sheet to allow us to fund required cap ex and invest in initiatives to drive growth. 4 Protect the Core Protect existing long- term coal mining contracts Become a leading diversified mining serv
Slide 5: NACCO Industries – At a Glance
(1) Includes a contract termination settlement of $10.3 million pre-tax, or $7.9 million after taxes of $2.4 million. (2) Consolidated Adjusted EBITDA and Net Cash (Debt) are non-GAAP measures and should not be considered in isolation or as substitutes for GAAP measures. See non-GAAP explanations an
Slide 6: North American Coal – Coal Mining Segment
North American COAL Coal Mining Segment
Slide 7: Coal Mining Segment – Operations
Coal Mining Segment – Operations 7 Power Plant Operation and Maintenance Electricity Sales Regulatory Matters MiningLand Acquisition Reserve Acquisition Permitting Mine Planning Load & Haul Coal Handling Reclamation Bond Release North American Coal operates surface coal mines under long- term contra
Slide 8: Coal Mine Locations
Coal Mine Locations • More than 100 years of experience • Our mines deliver coal to adjacent power plants • Each mine is the exclusive supplier to its customer’s facility 8
Slide 9: Strong Customer Relationships
Focused on managing coal production costs and maximizing efficiencies Benefits customers and NACCO as coal cost is a significant driver in power plant dispatch Increased power plant dispatch results in increased demand for coal Fluctuating natural gas prices and availability of renewable ene
Slide 10: Unique Business Model
Unique Business Model Coteau, Sabine, Falkirk and Coyote Creek operate pursuant to “management fee” contracts Receive management fee per ton or MMBtu of coal delivered Contract structure aligns our goals with customer objectives Customers are responsible for funding all operating costs and c
Slide 11: Mississippi Lignite Mining Company (MLMC)
Mississippi Lignite Mining Company (MLMC) Delivers 100% of the coal to supply the Red Hills power plant (“Red Hills”) Red Hills supplies electricity to TVA Contract ends in 2032 We are responsible for all operating costs, capital requirements and final mine reclamation Contractually determ
Slide 12: North American Mining Segment
North American Mining Segment
Slide 13: North American Mining provides contract mining and other services
13 North American Mining (“NAMining”) provides value-added contract mining and other services for producers of aggregates, lithium and other minerals Customer Operations Utilizing our core competencies to expand scope of services provided Current Focus: Pursuing growth and diversification Mine
Slide 14: Industry Data – Aggregates/Lithium
Industry Data – Aggregates/Lithium 14 Crushed Stone production in 2021 was up 3% over 2020(1) 1.5 billion tons produced 14-year high Top 10 producing states accounted for 54% of production • Of the top 10, NAMining operates in Florida, Texas and Virginia Sand and Gravel production was up 6
Slide 15: Executing on Growth
15 Executing on Growth 2015 2021 Number of States with Operations 1 5 Number of Customers 2 12 Number of Quarries 7 25 2021 New Contracts 3 sand and gravel contracts 2 represent comprehensive mining contracts 2 dragline service contracts
Slide 16: NAMining – Sawtooth/Thacker Pass Project
NAMining – Sawtooth/Thacker Pass Project (in development) NAMining’s subsidiary, Sawtooth Mining, will serve as exclusive contract miner for the Thacker Pass lithium project The Thacker Pass Project is 100% owned by Lithium Nevada Corp. • Developing a lithium production facility near what is bel
Slide 17: Minerals Management Segment
Minerals Management Segment
Slide 18: Catapult Mineral Partners – Executing Growth
Catapult Mineral Partners is the business unit focused on managing and expanding our portfolio of oil and gas mineral and royalty interests Acquired mineral and royalty interests totaling approximately $5 million in 2021 Building on acquisitions of approximately $14 million in 2020 With a to
Slide 19: Minerals Management
Minerals Management Derives income primarily by leasing its royalty and mineral interests to third-parties, granting them the rights to explore, develop, mine, produce, market and sell gas, oil, and coal in exchange for payments based on the lessees' sales of those minerals Total mineral and roy
Slide 20: Business Model
Business Model Minerals Management owns royalty interests, mineral interests, nonparticipating royalty interests, and overriding royalty interests Benefit from the continued development of properties without the need for additional investment once interests have been acquired We believe this b
Slide 21: Portfolio Overview
Portfolio Overview Appalachia E. TX/ Haynesville Permian Eagle Ford Other Totals 2021 Gross Acres 34,661.0 6,477.2 63,997.9 15,510.3 7,138.9 127,785.3 2021 Net Royalty Acres 36,199.3 7,455.4 1,243.1 1,712.3 13,327.2 59,937.3 2021 Production (BOE) 881,231 183,041 47,480 19,836 2,168 1,133,756 Product
Slide 22: Mitigation Resources of North America
Mitigation Resources OF NORTH AMERICA Mitigation Resources
Slide 23: Mitigation Resources
Restore, enhance and preserve streams, wetlands and/or species habitats to create mitigation credits that can be sold to customers to offset disturbances elsewhere Goal is to grow into one of the ten largest U.S. providers of mitigation solutions, with an initial focus in the southeast United St
Slide 24: Project Types and Ownership Structures
Project Types and Ownership Structures Project Types: Mitigation Banks (“MB”) – Acquire, restore and permanently protect properties to generate and sell mitigation credits Purchasers use the credits to offset ecological impacts on unrelated projects within the same local ecosystem Permittee-r
Slide 25: Priority Markets and Projects
Tennessee, Kentucky, Florida and Texas offer opportunities for growth - strong credit demand and favorable credit pricing Changes to Waters of the U.S. rule in 2021 resulted in generation of additional stream credits and an increase in demand Mitigation Resources 25 Priority Markets Projects Off
Slide 26: Corporate Responsibility
Corporate Responsibility
Slide 27: Corporate Responsibility
Corporate Responsibility We maintain sound environmental, social and governance (“ESG”) practices Employee-led ESG Advisory Group helps shape our corporate responsibility and environmental, health and safety initiatives COVID-19 Response included for 2021: mobilized an employee led cross- func
Slide 28: People
We enjoy high retention rates and long tenures with our employees Our most tenured employee celebrated 45 years with the company in 2021 Average tenure is 11 years of service 14% of employees have at least 20 years of service People Employees fuel our success Employees are encouraged to
Slide 29: Safety
Safety We operate in a culture committed to safety excellence Based on Mine Safety and Health Administration (“MSHA”) data, the National Mining Association ranks us as an industry leader in safety, and our MSHA lost-time incident rate is consistently below the national average for comparable min
Slide 30: Environmental Stewardship
30 Environmental Stewardship We maintain a commitment to meet or exceed all applicable environmental laws and regulations We plant and maintain thousands of trees, acres of native grasses and other flora Since 1978, we have planted over 9.3 million trees as part of reclamation activities 202
Slide 31: Community
Community We believe in making long-term investments in the areas where we operate Support numerous charitable efforts • Literacy • Educational • Arts During 2021, we contributed over $425,000 to organizations that serve the communities where we operate Also support employee cash donations to
Slide 32: Why Invest in NACCO?
Why Invest in NACCO? 32 Strong balance sheet provides capacity for growth We work to drive down coal production costs and maximize efficiencies to help our coal customers stay competitive Our focus on growing Minerals Management by acquiring high- quality oil and gas interests at advantageous prices
Slide 33: Financial Results and Non-GAAP Reconciliation
Financial Results and Non-GAAP Reconciliation
Slide 34: Historical Operating Results
Historical Operating Results 34 34.6 31.0 31.1 25.0 27.0 29.0 31.0 33.0 35.0 37.0 39.0 2019 2020 2021 Tons of Coal Delivered Tons of Limestone Delivered Consolidated Adjusted EBITDA(1) $39.6 $14.8 $48.1 0.0 10.0 20.0 30.0 40.0 50.0 2019 2020 2021 $56.9 $40.9 $70.9 0.0 10.0 20.0 30.0 40.0 50.0 60.0 7
Slide 35: Non-GAAP Disclosure
Non-GAAP Disclosure This presentation contains non-GAAP financial measures. Included in this presentation are reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with U.S. generally accepted accounting principles ("GAAP").
Slide 36: NACCO Industries Results and Non-GAAP Reconciliation
NACCO Industries Results and Non-GAAP Reconciliation 36 NOTE: Consolidated Adjusted EBITDA is a non-GAAP measures and should not be considered in isolation or as a substitute for GAAP measures. NACCO defines Consolidated Adjusted EBITDA as net income before long-lived asset impairment charges, contr
Slide 37: Cr” . North Mitigation
Cr” . North Mitigation NACCO Res arerican American Rersuress Catapult
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