Ecovyst Inc. · NYSE:ECVT
Ecovyst — PQ Group Holdings — Investor Presentation (May 2019)
25 slides from Ecovyst's investor presentation, May 16, 2019
Slide 1: Investor Presentation May 2019
Exhibit 99.1 INVESTOR PRESENTATION May 2019Exhibit 99.1 INVESTOR PRESENTATION May 2019
Slide 2: Legal Disclaimer
LEGAL DISCLAIMER Forward-Looking Statements Some of the information contained in this presentation constitutes “forward-looking statements”. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “projects” and si
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 Efficiency secular growth markets Innovation potential Free Cash Flow 3PORTFOLIO STRENGTHS AND PRIORI
Slide 4: Our Business Units
OUR BUSINESS UNITS Specialty, Leading and Differentiated REFINING PERFORMANCE PERFORMANCE 1 CATALYSTS SERVICES MATERIALS CHEMICALS Increased octane Tighter fuels standards Higher highway Environmentally driven demand Light weighting demand safety standards consumer demand o Sulfuric acid production
Slide 5: Macro Industry Trends
MACRO INDUSTRY TRENDS Expected Secular Growth Drivers Across Our Businesses Turbocharged Engines Heavy Duty Diesel Emissions Silicates & Silicas +7% +2x +2 – 3% North America CAGR Global catalyst Global CAGR from 2018 – 2025; consumption growth between consumption from turbo vehicles rise to 2020 –
Slide 6: A Portfolio of Stability
A PORTFOLIO OF STABILITY Low Exposure to Economic Cycles 1 2 % of 2018 Sales by End Use End Markets Categorized by Sensitivity to Downturn Packaging & Engineered Fuels & Emissions Plastics Controls (All segments) (RS & C) 17% 21% Consumer Products Six Primary End Uses 16% (PC) Serve ~28 19% Highway
Slide 7: Financial Performance Across Macroeconomic Cycles
FINANCIAL PERFORMANCE ACROSS MACROECONOMIC CYCLES Demonstrated Stability Through Cycles with Attractive Margins 1,2,3 Adjusted EBITDA and Adjusted EBITDA Margin (%) ($ in millions except %) (1) Adjusted EBITDA for the period from 2005 to 2014 represents Legacy Eco Adjusted EBITDA and Legacy PQ Adjus
Slide 8: Adjusted Free Cash Flow and Leverage Ratio
ADJUSTED FREE CASH FLOW AND LEVERAGE RATIO Strong Sustainable Adjusted Free Cash Drives Progress towards Leverage Target ADJUSTED FREE CASH FLOW ($mm) NET DEBT/ADJUSTED EBITDA RATIO All Adjusted Free Cash Flow used to repay debt Progress to leverage target of 3.0 – 3.5x 4.9x 134.2 4.5x 24.7 2017 201
Slide 9: Supplemental Information
SUPPLEMENTAL INFORMATIONSUPPLEMENTAL INFORMATION
Slide 10: Supplemental Information: Capex, Capitalization, Sales by End Use and Region
SUPPLEMENTAL INFORMATION 2018 Capital Expenditures, Capitalization, Sales by End Use and Region 1 CAPITAL EXPENDITURES Full Year Full Year 4 % OF SALES GROWTH BY END USE ($ in millions) 2018 2017 2 Maintenance 94.7 102.6 Fuels & Emissions Controls + 6% 3 Growth 37.0 37.9 Highway Safety & Constructio
Slide 11: Refining Services
#1 U.S. Supplier REFINING SERVICES Strategically Located Network Positioned to Serve New Capacity Expansions in Gulf Gulf Coast Sulfuric Acid Regeneration Demand Planned alkylation expansions, all Gulf Coast, Sulfuric-based (000 Tons Per Year) 2,200 Expected expansions driven by: o Growth in premium
Slide 12: Silica Catalysts – PE and MMA
#2 global supplier of silica catalysts SILICA CATALYSTS – PE and MMA 2019 Expected Growth Steady from PE, with Step-Change from MMA Refill POLYETHYLENE METHYL METHACRYLATE 1 HDPE/LLDPE Projected Capacity Expansions Global Consumption End Uses 120 100 Polymethylmethacrylate (PMMA) Other 80 (e.g. acry
Slide 13: Zeolyst JV with Shell – Fuel and Emission Control Catalysts
#1 global supplier ZEOLYST JV WITH SHELL – 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 14: Performance Materials
#1 global provider of engineered safety beads PERFORMANCE MATERIALS Increased Standards for Transportation Safety Drives 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 facilities Materia
Slide 15: Performance Chemicals
#1 North America & Europe silicates supplier PERFORMANCE CHEMICALS Growing Trends for Environmentally Friendly and Sustainable Products Product Line > 2x sodium silicate supply share of nearest competitor Other 18% ~ 70% contracted sales with 1 – 3 year term; Spray Dry Silicates ~ 45% North America
Slide 16: Quarterly Sales, Adjusted EBITDA & Adjusted EBITDA Margin
QUARTERLY SALES, ADJUSTED EBITDA & ADJUSTED EBITDA MARGIN Year 2017 - 2019 Three Months For the Quarter Ended Ended Three Months Ended Year Ended Three Months Ended Year Ended December September September 31, March 31, March 31, June 30, 30, December December March 31, June 30, 30, December ($ in mi
Slide 17: 2019 Guidance
2019 GUIDANCE Expected Adjusted Free Cash Flow Range of $125 Million to $145 Million 2018 2019 Actual Outlook ($ in millions except %) 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 - $0.93 Interest Expense 113.7 1
Slide 18: Reconciliation of Adjusted Free Cash Flow
RECONCILIATION OF ADJUSTED FREE CASH FLOW Adjusted Free Cash Flow for Years 2018 and 2017 Full Year Full Year ($ 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
Slide 19: Reconciliation of Sales and Adjusted EBITDA 2005–2018
RECONCILIATION OF SALES AND ADJUSTED EBITDA 2005 – 2018 Year Ended December 31, 2015 2016 Pro Pro 3 3 forma forma ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2017 2018 Reconciliation of sales and adjusted EBITDA 1 Legacy PQ Sales 635.3 708.6 775.0 977.0 1,009.9 1,087.9 1,115.0
Slide 20: Reconciliations for Adjusted EBITDA 2005–2014 Legacy PQ
RECONCILIATIONS FOR ADJUSTED EBITDA 1 2005 – 2014 Legacy PQ 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 income (loss)
Slide 21: Reconciliations for Adjusted EBITDA 2005–2014 Legacy Eco Services
RECONCILIATIONS FOR ADJUSTED EBITDA 1 2005 – 2014 Legacy Eco Services 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 to Legacy Ec
Slide 22: Reconciliations for Adjusted EBITDA 2015–2018 Post-Business Combination PQ
RECONCILIATIONS FOR ADJUSTED EBITDA 2015 – 2018 Post-Business Combination PQ Net Income (Loss) to Adjusted EBITDA Reconciliation Year Ended December 31, 2015 2016 1 1 ($ in millions) Pro forma Pro forma 2017 2018 Reconciliation of net income (loss) attributable to PQ Group Holdings Inc. to Segment A
Slide 23: Reconciliation of Net Income to Segment Adjusted EBITDA
RECONCILATION OF NET INCOME TO SEGMENT ADJUSTED EBITDA 2017 Through First Quarter 2019 Three Months Ended Three Months Ended Three Months Ended Year Ended Year Ended September December September March 31, March 31, June 30, 30, 31, December 31, March 31, June 30, 30, December 31, December 31, ($ in
Slide 24: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES 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 Venture, we include an adjustment for our 50% p
Slide 25: Leading the way to a sustainable future
Leading the way toa sustainable future la @ PQ Corporation