Graftech International Ltd. · NYSE:EAF
Graftech International — Q1 2023 Earnings Presentation
20 slides from Graftech International's earnings presentation, Apr 28, 2023
Slide 1: Q1 2023 Results
Q1 2023 Results April 28, 2023 NYSE: EAF www.graftech.com
Slide 2: Forward-Looking Statements
Forward-Looking Statements CAUTIONARY NOTE REGARDING 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
Slide 3: Successfully Executing Business Plans
Successfully Executing Business Plans Navigating Near-term Challenges ▪ Managing operating costs, capital expenditures and working capital levels ▪ Aligning production volume with our outlook for graphite electrode demand ▪ Making targeted investments to further improve our competitive positioning A
Slide 4: Monterrey, Mexico Facility Update
Monterrey, Mexico Facility Update Background ▪ Temporary suspension notice issued Sept. 15, 2022 ▪ Suspension notice conditionally lifted on Nov. 17, 2022 ▪ Plant restarted immediately upon lifting of suspension Current Status (as of April 2023) ▪ Operating consistent with our expectations ▪ Success
Slide 5: St. Marys, Pennsylvania Facility Update
St. Marys, Pennsylvania Facility Update Background ▪ Temporarily idled in 2016, other than machining operations ▪ Restarted graphitization operations in 2018 ▪ Restart of remaining processes planned for 2023 ▪ Provides risk mitigation related to pin stock production Current Status (as of April 2023)
Slide 6: Prioritizing Safety
Prioritizing Safety Total Recordable Incident Rate (“TRIR”)(1) 0.95 0.94 0.51 0.49 0.30 2019 2020 2021 2022 Q1 2023 (1) TRIR measured per 200,000 hours worked. 6
Slide 7: Steel Industry Trends
Steel Industry Trends ▪ Sequential improvement in key metrics, although remain below year ago levels ▪ Global steel production, excluding China, of 198 million tons in Q1 2023 versus 214 million tons in Q1 2022(1) Steel Capacity Utilization Rates(2) 82% 84% 82% 80% 81% 77% 78% 72% 74% 72% 72% 72% 74
Slide 8: Production and Sales
Production and Sales ▪ Q1 2023 production volume down 66%, sales volume down 61% and net sales down 62% compared to Q1 2022 ▪ Reflects residual impact of suspension of Monterrey, Mexico operations and softness in graphite electrode demand ▪ We proactively reduced production at our European facilitie
Slide 9: Earnings and Cash Flow
Earnings and Cash Flow ▪ Net loss of $7 million, or $0.03 per share, for a net loss margin of 5% (1) (2) ▪ Adjusted EBITDA of $15 million and adjusted EBITDA margin of 11% (1) ▪ Operating cash flow of $25 million and adjusted free cash flow of $3 million Adjusted Earnings (Loss) Adjusted EBITDA(1) A
Slide 10: Balance Sheet Strength and Financial Flexibility
Balance Sheet Strength and Financial Flexibility ▪ As of March 31, 2023: (1) (1) ➢ Gross debt to adjusted EBITDA of 2.4x; Net debt to adjusted EBITDA of 2.1x ➢ Liquidity of $462 million, consistent with our liquidity as of the end of 2022 ▪ Current capital allocation approach focused on maintaining
Slide 11: Taking Actions to Benefit from Industry Tailwinds
Taking Actions to Benefit from Industry Tailwinds Long-term Industry Tailwinds ▪ Steel industry’s efforts to decarbonize expected to drive a continued shift to electric arc furnace (“EAF”) steelmaking ▪ Anticipate medium- to long-term demand growth for graphite electrodes driven by this ongoing tran
Slide 12: Why GrafTech
Why GrafTech An Industry Leader in the Production of High-Quality Graphite Electrodes ▪ Graphite electrodes are essential to the operation of an EAF ▪ Reflecting environmental benefits, growth in EAF steelmaking expected to continue outpacing integrated steelmaking Sustainable Competitive Advantages
Slide 13: Non-GAAP Financial Measures
Non-GAAP Financial Measures In addition to providing results that are determined in accordance with GAAP, we have provided certain financial measures that are not in accordance with GAAP. EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net (loss) income, adjusted (loss) earnings per share,
Slide 14: Reconciliation to Adjusted Net Income (Loss)
Reconciliation to Adjusted Net Income (Loss) Three Months Ended Mar 31, June 30, Sept 30, Dec 31, Mar 31, ($ in thousands) 2022 2022 2022 2022 2023 Net income (loss) $ 124,183 $ 114,997 $ 93,451 $ 50,331 $ (7,369) Adjustments, pre-tax: Pension and OPEB plan expenses (benefits)(1) 551 553 534 (8,993)
Slide 15: Reconciliation to Adjusted Earnings (Loss) Per Share
Reconciliation to Adjusted Earnings (Loss) Per Share Three Months Ended Mar 31, June 30, Sept 30, Dec 31, Mar 31, 2022 2022 2022 2022 2023 Earnings (loss) per share $ 0.47 $ 0.44 $ 0.36 $ 0.20 $ (0.03) Adjustments per share, pre-tax: Pension and OPEB plan (benefits) expenses(1) - - - (0.04) 0.01 Pub
Slide 16: Reconciliation to Adjusted EBITDA
Reconciliation to Adjusted EBITDA Three Months Ended Mar 31, June 30, Sept 30, Dec 31, Mar 31, ($ in thousands) 2022 2022 2022 2022 2023 Net income (loss) $ 124,183 $ 114,997 $ 93,451 $ 50,331 $ (7,369) Add: Depreciation and amortization 14,434 14,012 13,262 13,788 10,777 Interest expense 9,212 9,39
Slide 17: Reconciliation to Net Debt and Calculation of Debt to Adjusted EBITDA
Reconciliation to Net Debt and Calculation of Debt to Adjusted EBITDA Dec 31, Mar 31, ($ in thousands) 2022 2023 Long-term debt $ 921,803 $ 922,500 Long-term debt, current maturities 124 128 Add: Unamortized debt discount and issuance costs (12,049) (11,353) Total gross debt 933,976 933,981 Less: Ca
Slide 18: Reconciliation to Free Cash Flow and Adjusted Free Cash Flow
Reconciliation to Free Cash Flow and Adjusted Free Cash Flow Three Months Ended Mar 31, June 30, Sept 30, Dec 31, Mar 31, ($ in thousands) 2022 2022 2022 2022 2023 Net cash provided by operating activities $ 146,316 $ 60,123 $ 68,166 $ 50,023 $ 24,798 Capital expenditures (16,855) (12,493) (15,933)
Slide 19: Reconciliation to Cash Cost of Goods Sold per MT
Reconciliation to Cash Cost of Goods Sold per MT Year Ended Three Months Ended Dec 31, Mar 31, June 30, Sept 30, Dec 31, Mar 31, ($ in thousands, except per MT amounts) 2022 2022 2022 2022 2022 2023 Cost of goods sold $ 726,373 $ 191,214 $ 201,496 $ 170,171 $ 163,492 $ 112,645 Less: Depreciation and
Slide 20: GrafTech International Ltd. Contact
GrafTech International Ltd. 982 Keynote Circle Brooklyn Heights, Ohio 44131 Ticker: EAF (NYSE) Website: www.graftech.com Contact: Michael Dillon Email: investor.relations@graftech.com Phone: 1.216.676.2000
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