Suncoke Energy, Inc. · NYSE:SXC
Suncoke Energy — Q4 2019 Earnings Presentation
25 slides from Suncoke Energy's earnings presentation, Jan 29, 2020
Slide 1: SunCoke Energy, Inc. Q4 & FY 2019 Earnings and 2020 Guidance
SunCoke Energy, Inc. Q4 & FY 2019 Earnings and 2020 Guidance Conference Call
Slide 2: Forward-Looking Statements
Forward‐Looking Statements 2 This slide presentation should be reviewed in conjunction with the Fourth Quarter 2019 earnings release of SunCoke Energy, Inc. (SunCoke) and conference call held on January 29, 2020 at 10:00 a.m. ET. Except for statements of historical fact, information contained in thi
Slide 3: 2019 Year In Review
2019 Year In Review 3 Delivered FY 2019 results within the revised guidance range despite continued challenges at Logistics; Domestic Coke Adj. EBITDA above guidance range FY 2019 Objective 2019 Achievements Commentary • Domestic Coke delivered strong Deliver FY 2019 Consolidated Adj. EBITDA(1) of $
Slide 4: Q4 & FY 2019 Financial Performance
Q4 & FY 2019 Financial Performance 4 Q4 and FY 2019 Earnings Review Q4 ‘19 EPS of ($0.02) down 5 cents as compared to ($/share) ($ in millions) Q4 ‘18 (1) Diluted EPS Adj. EBITDA FY ’19 EPS of ($1.98) includes impact of CMT long‐ $0.40 $0.03 ($0.02) lived asset and Logistics goodwill impairment rela
Slide 5: Adjusted EBITDA – Q4 '18 to Q4 '19
Adjusted EBITDA(1) – Q4 ‘18 to Q4 ‘19 5 Q4 ‘19 performance impacted by coal export customer bankruptcy ($ in millions) $65.9 ($0.6) ($9.8) ($4.7) $50.8 • Impact of coal export customer bankruptcy • Lower volumes at other • Higher legacy costs and logistics terminals timing of employee related costs
Slide 6: Adjusted EBITDA – FY '18 to FY '19
Adjusted EBITDA(1) – FY ‘18 to FY ‘19 6 Strong domestic coke performance offset by coal export customer bankruptcy ($ in millions) $263.2 $16.4 ($30.0) $247.9 ($1.7) • Higher volumes at IHO • Shorter duration and scope • Impact of coal export of outage work at GCO customer bankruptcy (1) (1) FY 2018
Slide 7: FY 2019 Capital Deployment
FY 2019 Capital Deployment 7 Strong cash flow generation deployed towards a well‐balanced capital allocation strategy; Will continue to allocate capital strategically and opportunistically 12/31/2018 12/31/2019 Revolver Total Debt $859M $801M Availability: Gross Leverage (1) 3.26x 3.23x $244.5M ($ i
Slide 8: 2020 Guidance
2020 GUIDANCE )
Slide 9: Market: 2019 Recap and Future Outlook
Market: 2019 Recap and Future Outlook 9 Expect more of the same for domestic steel and coal export markets in the short‐term; Long‐term coke demand outlook looks constructive Domestic steel markets struggled in 2019 despite tariffs and import duties • “Price recession” caused HRC benchmark to dip to
Slide 10: Projected 2020 Adjusted EBITDA Guidance
Projected 2020 Adjusted EBITDA Guidance 10 Expect 2020 Consolidated Adjusted EBITDA of $235M ‐ $245M mainly driven by higher volumes at Indiana Harbor offset by anticipated revised economics at CMT ($ in millions) $16‐$20 $247.9 $0 ‐($1) $235 ‐ $245 ($23)‐($26) $0‐($2) • Indiana Harbor higher volume
Slide 11: 2020 Domestic Coke Business Outlook
2020 Domestic Coke Business Outlook 11 Expect Strong Domestic Coke operations in 2020; Domestic Coke Adj. EBITDA expected to be $243M ‐ $247M Domestic Coke Performance Anticipate a $16M to $20M $243M ‐ $247M increase in Domestic Coke Adj. $227M $208M EBITDA in 2020 mainly due to: • IHO expected to d
Slide 12: 2020 Logistics Business Outlook
2020 Logistics Business Outlook 12 2020 Logistics guidance assumes revised economics with Foresight Energy at CMT; Logistics Adjusted EBITDA guidance of $17M ‐ $20M Logistics Performance 2020 Plan assumes renegotiation of coal handling contract for coal $72.6M export customer at CMT 26,605 $42.6M •
Slide 13: 2020 Guidance Summary
2020 Guidance Summary 13 Expect 2020 Adjusted EBITDA of $235M ‐ $245M; 2020 Capex of $70M ‐ $80M 2019 2020 Metric Results Guidance Adjusted EBITDA Consolidated(1) $247.9M $235M ‐ $245M Domestic Coke Production 4.17M tons ~ 4.3M tons Dom. Coke Adj. EBITDA/ton $54 / ton $56 ‐ $57 / ton Operating Cash
Slide 14: Capital Allocation Priorities
Capital Allocation Priorities 14 Capital allocation tools deployed in 2019 demonstrate SXC’s financial flexibility; Will remain disciplined, opportunistic and nimble to maximize stakeholders value long‐term Capital Allocation Priorities Organic Growth Projects, Establish Regular Reduce Long‐Term Deb
Slide 15: 2020 Key Initiatives
2020 Key Initiatives 15 Deliver Operations Excellence and Optimize Asset Base • Continued strong operational and safety performance while optimizing asset utilization • Successfully execute on capital plan New Customer and Business Development at CMT • Revitalize Convent Marine Terminal with new pro
Slide 16: Appendix
APPENDIX )
Slide 17: Domestic Coke Business Summary
Domestic Coke Business Summary 17 Achieved FY’ 19 Domestic Coke Adjusted EBITDA above guidance with strong performance from Indiana Harbor Domestic Coke Performance Q4 ’19 Adjusted EBITDA of $52.1M (Coke Production, Kt) and Adjusted EBITDA/ton of $58/ton ~$56‐$57/ton ~$48/ton $55/ton $57/ton $54/ton
Slide 18: Logistics Business Summary
Logistics Business Summary 18 Lower throughput volumes and coal customer bankruptcy at CMT impacted FY 2019 logistics results Logistics Performance Logistics segment contributed $8.5M to (Tons Handled, Kt) $72.6M Q4’ 19 and $42.6M to FY Adj. EBITDA $42.6M CMT contributed $5.2M to Q4 ‘19 and $18.3M 2
Slide 19: Definitions
Definitions 19 Adjusted EBITDA represents earnings before interest, loss (gain) on extinguishment of debt, taxes, depreciation and amortization (“EBITDA”), adjusted for impairments, loss on extinguishment of debt, changes to our contingent consideration liability related to our acquisition of CMT, l
Slide 20: Reconciliation to Adjusted EBITDA, Adjusted net income and Adjusted EPS
Reconciliation to Adjusted EBITDA, Adjusted net income 20 attributable to SXC and Adjusted EPS ($ in millions) Q1 '18 Q2 '18 Q3 '18 Q4 '18 FY '18 Q1 '19 Q2 '19 Q3 '19 Q4 '19 FY '19 Net Income (loss) $ 13.0 $ 11.4 $ 17.1 $ 5.5 $ 47.0 $ 12.2 $ 3.3 $(163.1) $ (0.8) $(148.4) Depreciation and amortizatio
Slide 21: Adjusted EBITDA and Adjusted EBITDA per ton
Adjusted EBITDA and Adjusted EBITDA per ton 21 Reconciliation of Segment Adjusted EBITDA and Adjusted EBITDA per Ton Domestic Corporate ($ in millions, except per ton data) Coke Brazil Coke Logistics and Other(1) Consolidated FY 2019 Adjusted EBITDA $226.7 $16.0 $42.6 ($37.4) $247.9 Sales Volume (th
Slide 22: Balance Sheet & Debt Metrics
Balance Sheet & Debt Metrics 22 ($ in millions) As of 12/31/2019 As of 12/31/2018 Cash $ 97 $ 146 Available Revolver Capacity 245 254 Total Liquidity $ 342 $ 400 Gross Debt (Long and Short‐term) $ 801 $ 859 Net Debt (Total Debt less Cash) $ 704 $ 713 2019 FY Adj. EBITDA $ 248 $ 263 Gross Debt / 2019
Slide 23: 2020 Guidance Reconciliation
2020 Guidance Reconciliation 23 ($ in millions) Low High Net Income $33 $43 Depreciation and amortization expense 132 128 Interest expense, net 58 58 Income tax expense 12 16 Adjusted EBITDA (Consolidated) $235 $245 Adjusted EBITDA attributable to noncontrolling interest(1) (7) (7) Adjusted EBITDA a
Slide 24: SXC FCF/Share
SXC FCF/Share 24 2019 2020E ($ in millions except per share amounts) Actuals Low End High End Net Income ($148) $33 $43 Long‐lived asset and goodwill impairment 247 ‐ ‐ Depreciation and amortization expense 144 132 128 Interest expense, net 60 58 58 Gain on extinguishment of debt, net (2) ‐ ‐ Income
Slide 25: SunCoke Energy
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