Graftech International Ltd. · NYSE:EAF
Graftech International — FY2021 Earnings Presentation
17 slides from Graftech International's earnings presentation, Feb 4, 2022
Slide 1: 2021 Results
2021 Results February 4, 2022 NYSE: EAF www.graftech.com
Slide 2: Forward-looking Statements
Forward-looking Statements NOTE ON 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 reflect our curren
Slide 3: Prioritizing Safety – Continued Improvement
Prioritizing Safety – Continued Improvement Total Recordable Injury Rates1 1.63 1.55 0.95 0.51 0.49 2017 2018 2019 2020 2021 1 Total recordable injury rates measured per 200,000 hours worked. 3
Slide 4: Positive Industry Growth & Pricing
Positive Industry Growth & Pricing Steel Industry Fundamentals remained very strong in Q4 ▪ Global steel production, excluding China, of ~1.9 billion tons in 2021; up ~4% from 20201 ▪ Global steel manufacturing utilization rate, excluding China, was ~75% in Q41 ▪ Steel prices have declined slightly
Slide 5: Commercial Outlook Improving
Commercial Outlook Improving ▪ Continued strong demand for our products ▪ Expect 1st quarter average non-LTA prices to increase 17-20% over the fourth quarter of 2021 as pricing resets to current market conditions ▪ Long-term agreement (LTA) sales volume and revenue estimates remain as follows: 2022
Slide 6: Strong Production and Sales Growth
Strong Production and Sales Growth ▪ Production volume up 28%, Sales Volume up 19% and Net Sales up 7% vs Q4 2020 ▪ Q4 sales volume comprised of 29,000 MT of LTA sales and 15,000 MT of non-LTA sales ▪ Focused on operational excellence as demand remains strong Production (000 MT) Sales Volumes (000 M
Slide 7: Sustainability Report and Continued ESG Progress
Sustainability Report and Continued ESG Progress Recent Sustainability Report Highlights Progress in: ▪ Workforce, Health and Safety and Talent Management ▪ Society and involvement with our Local Communities ▪ Products and Customers, focusing on Product Quality, Customer Service and Material Sourcin
Slide 8: Robust Earnings and Cash Flow Improvement
Robust Earnings and Cash Flow Improvement ▪ Continuing to deliver strong results in Q4 2021 ▪ EPS of $0.54, net income of $141 million, net income margin of 39% and adjusted EPS1 of $0.50 ▪ Adjusted EBITDA1 of $183 million and adjusted EBITDA margin2 of 50% ▪ Operating cash flow of $100 million, fre
Slide 9: Balance Sheet Strength and Financial Flexibility
Balance Sheet Strength and Financial Flexibility Strengthening Capital Structure through Significant Deleveraging ▪ Reduced debt by $100 million in Q4, $400 million in 2021; continuing to decrease amount maturing in 2025 ▪ Total Debt / Adjusted EBITDA1 1.6x compared to 2.2x as of December 31, 2020 ▪
Slide 10: Delivering on Key Capital Allocation Priorities
Delivering on Key Capital Allocation Priorities Generate Meaningful Cash Flows ▪ Delivered strong cash flow in 2021 ▪ Operating cash flow of $443 million and adjusted free cash flow1 of $456 million in 2021 ▪ Converted 68% percent of adjusted EBITDA2 to adjusted free cash flow1,3 in 2021 Strong Bala
Slide 11: An Industry-Leading Producer of Graphite Electrodes
An Industry-Leading Producer of Graphite Electrodes ✓ Graphite electrodes are a highly engineered, mission critical industrial consumable for electric arc furnace steel production, that constitute less than 5% of customer COGS ▪ EAF steelmaking long-term historical growth rate of about 3%1, low capi
Slide 12: Disclosures
| Disclosures Ml“ GRAF | ec International
Slide 13: Non-GAAP Financial Measures
Non-GAAP Financial Measures Investors are encouraged to read the information contained in this presentation in conjunction with the following information, the Forward-looking statements information on page 2 and the factors described under the “Risk Factors” section of the Company’s most recent Annu
Slide 14: Reconciliation to Adjusted Net Income
Reconciliation to Adjusted Net Income For the Three Months Ended For the Year Ended Dec 31, March 31, June 30, Sept 30, Dec 31, December 31, ($ in thousands) 2020 2021 2021 2021 2021 2021 2020 Net income $ 125,096 $ 98,799 $ 28,165 $ 119,886 $ 141,480 $ 388,330 $ 434,374 Adjustments (pre-tax): Pensi
Slide 15: Reconciliation to Adjusted EPS
Reconciliation to Adjusted EPS For the Three Months Ended For the Year Ended Dec 31, March 31, June 30, Sept 30, Dec 31, December 31, 2020 2021 2021 2021 2021 2021 2020 Earnings per share $ 0.47 $ 0.37 $ 0.11 $ 0.45 $ 0.54 $ 1.46 $ 1.62 Adjustments per share: Pension and OPEB plan expenses (1) 0.02
Slide 16: Reconciliation to Adjusted EBITDA
Reconciliation to Adjusted EBITDA For the Three Months Ended TTM Ended Dec 31, March 31, June 30, Sept 30, Dec 31, Dec 31, Dec 31, ($ in thousands) 2020 2021 2021 2021 2021 2020 2021 Net income $ 125,096 $ 98,799 $ 28,165 $ 119,886 $ 141,480 $ 434,374 $ 388,330 Add: Depreciation and amortization 17,
Slide 17: Reconciliation to Free Cash Flow and Adjusted Free Cash Flow
Reconciliation to Free Cash Flow and Adjusted Free Cash Flow For the Three Months Ended Dec 31, March 31, June 30, Sept 30, Dec 31, ($ in thousands) 2020 2021 2021 2021 2021 Net cash provided by operating activities $ 146,981 $ 122,425 $ 86,330 $ 134,256 $ 100,029 Capital expenditures (5,387) (14,17
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