Suncoke Energy, Inc. · NYSE:SXC
Suncoke Energy — Q1 2017 Earnings Presentation
22 slides from Suncoke Energy's earnings presentation, Apr 20, 2017
Slide 1: SunCoke Energy, Inc. Q1 2017 Earnings Conference Call
SunCoke Energy, Inc. Q1 2017 Earnings Conference Call April 20, 2017
Slide 2: Forward-Looking Statements
Forward-Looking Statements This slide presentation should be reviewed in conjunction with the First Quarter 2017 earnings release of SunCoke Energy, Inc. (SXC) and conference call held on April 20, 2017 at 11:00 a.m. ET. Some of the information included in this presentation constitutes “forward-look
Slide 3: Simplification Transaction Update
Simplification Transaction Update While unable to reach agreement on Simplification Transaction, fundamentals of coke and logistics businesses remain sound Unable to agree with Conflicts Committee on appropriate share-for-unit exchange ratio for unaffiliated LP units • Received input from SXC shareh
Slide 4: Q1 2017 Highlights
Q1 2017 Highlights Achieved solid safety and operating performance across coke and coal logistics fleet Executing IHO rebuild campaign; continue to experience sustained performance from previously rebuilt ovens Handled record coal export volume at CMT Delivered significantly improved Q1 ‘17
Slide 5: Q1 2017 Overview
Q1 2017 Overview Q1 2017 Earnings Q1 ‘17 EPS of $0.02 up vs. Q1 ‘16 due ($/share) ($ in millions) primarily to Earnings per Share Consolidated (diluted) Adj. EBITDA(1) • Operational items described below and lapping of Q1 ‘16 coal impairment charge $0.02 $55.6 • Partially offset by $20.4M pre-tax ga
Slide 6: Adjusted EBITDA – Q1 '16 to Q1 '17
(1) Adjusted EBITDA – Q1 ‘16 to Q1 ‘17 Q1 ‘17 performance driven primarily by lower corporate and coal mining expenses and significantly improved logistics volumes ($ in millions) $55.6 $7.1 $43.8 $7.2 ($4.9) • $4.4M – Lapping of $2.4 certain legal costs • $2.8M – Lower legacy coal mining expenses •
Slide 7: Domestic Coke Business Summary
Domestic Coke Business Summary Solid Q1 ‘17 cokemaking performance supports FY 2017 outlook Domestic Cokemaking Performance Delivered Adj. EBITDA/ton(1) of (Production, Kt) ~$53 on 948K tons production $54/ton $53/ton $51/ton $52/ton • Impacts of IHO oven rebuilds $38/ton (lower volumes and higher O
Slide 8: Coal Logistics Business Summary
Coal Logistics Business Summary Strong Q1 ‘17 performance driven primarily by significant increase in CMT volumes Coal Logistics Performance Delivered Q1 ‘17 Adj. EBITDA of (Tons Handled, Kt) $45.3M $13.1M, driven primarily by • Strong volumes due to sustained $13.1M $5.9M $5.4M $7.3M coal market im
Slide 9: Q1 2017 Liquidity
Q1 2017 Liquidity Maintain strong consolidated liquidity of >$325M, including >$200M of SXC standalone liquidity (Consolidated) Q1 ‘17 Total Debt $857M Gross Leverage(1) 3.77x $20.5 ($12.7) ($12.4) ($1.7) $157.2 $29.5 $134.0 Consolidated • Q1 distribution of Revolver • Final installment of cash cons
Slide 10: Capital Allocation Priorities
Capital Allocation Priorities Board recently authorized SXCP unit purchase program; represents most attractive return for SXC shareholders Expect SXCP will refinance capital structure in Q2 2017 Purchasing SXCP units in open market represents most attractive opportunity • Assets we know and operate
Slide 11: 2017 Key Initiatives
2017 Key Initiatives Deliver Operations Excellence and Optimize Asset Base • Drive strong operational & safety performance while optimizing asset utilization Execute Further Oven Rebuilds at IHO Cokemaking Operations • Complete 53 oven rebuilds to drive further performance improvements Deploy Capita
Slide 12: Questions
QUESTIONS SunCoke Energy”
Slide 13: Investor Relations
Investor Relations 630-824-1907 www.suncoke.com
Slide 14: Appendix
APPENDIX SunCoke Energy”
Slide 15: Definitions
Definitions Adjusted EBITDA represents earnings before interest, (gain) loss on extinguishment of debt, taxes, depreciation and amortization (“EBITDA”), adjusted for impairments, coal rationalization costs, changes to our contingent consideration liability related to our acquisition of CMT and the e
Slide 16: Reconciliation to Adjusted EBITDA
Reconciliation to Adjusted EBITDA ($ in millions) Q1 '17 FY '16 Q4 '16 Q3 '16 Q2 '16 Q1 '16 Net cash provided by Operating activities $29.5 $219.1 $53.0 $44.6 $92.1 $29.4 Depreciation, depletion and amortization expense 33.3 114.2 31.8 25.6 28.6 28.2 Loss / (gain) on extinguishment of debt 0.1 (25.0
Slide 17: Reconciliation of Segment Adjusted EBITDA and Adjusted EBITDA per ton
Reconciliation of Segment Adjusted EBITDA and Adjusted EBITDA per ton Reconciliation of Segment Adjusted EBITDA and Adjusted EBITDA per Ton Domestic Coal Corporate and ($ in millions, except per ton data) Coke Brazil Coke Logistics (1) Other(2) Consolidated Q1 2017 Adjusted EBITDA $49.7 $4.4 $13.1 (
Slide 18: Balance Sheet & Debt Metrics
Balance Sheet & Debt Metrics As of 03/31/2017 Balance SXC Attributable Attributable Consolidated to SXCP ($ in millions) to SXC Cash $ 157 $ 46 $ 111 Available Revolver Capacity 172 76 96 Total Liquidity 329 122 207 Gross Debt (Long and Short-term) 857 813 45 Net Debt (Total Debt less Cash) 700 767
Slide 19: 2017 Guidance Summary
2017 Guidance Summary Guidance remains unchanged from January 2017 announcement 2017 2016 Guidance Results Metric (published Jan. ‘17) (1) Adjusted EBITDA Consolidated $217.0M $220M – $235M Attrib. to SXC $130.4M $130M – $141M (2) Capital Expenditures ~$48M ~$80M Domestic Coke Production 3.95 Mt ~3.
Slide 20: 2017 Capital Expenditures
2017 Capital Expenditures 2016 CapEx ($ in millions) SXC SXCP Consolidated Ongoing(1) $24 $16 $40 Other / Expansion 3 0 3 Environmental Project (Gas Sharing) 0 5 5 Total CapEx (excl. pre-funded Ship loader) $27 $21 $48 Coal Logistics: Ship loader (pre-funded) $0 $11 $11 2017 Expected CapEx ($ in mil
Slide 21: 2017E Guidance Reconciliation
2017E Guidance Reconciliation 2017E 2017E ($ in millions) Low High Net cash provided by Operating activities $140 $155 Depreciation and amortization expense 131 131 Deferred income tax expense 65 70 Changes in working capital and other (21) (24) Net Income ($35) ($22) Depreciation and amortization e
Slide 22: Thermal Coal Export Profitability
Thermal Coal Export Profitability Solid API2 benchmark price should continue to support CMT ILB producers’ competitiveness in maintaining viable exports $78 $6 ($7) Believe ILB export thermal ($12) solidly profitable at Q1 ‘17 ($6) API2 benchmark pricing of ~$78/t ($20) $39 • Based on average ILB ca