Nacco Industries, Inc. · NYSE:NC
Nacco Industries — Investor Presentation (March 2023)
38 slides from Nacco Industries's investor presentation, Mar 31, 2023
Slide 1: 2022 Investor Presentation
2022 Investor Presentation
Slide 2: Safe Harbor Statement and Disclosure
Safe Harbor Statement and Disclosure This presentation includes forward-looking comments subject to important risks and uncertainties. It may also contain financial measures that are not in conformance with accounting principles generally accepted in the United States of America (GAAP) Refer to
Slide 3: Company Overview
Company Overview NACCO Industries® brings natural resources to life by delivering aggregates, minerals, reliable fuels and environmental solutions through its robust portfolio of NACCO Natural Resources businesses
Slide 4: Four Businesses Charting Our Future Through Two Key Strategies
Four Businesses Charting Our Future Through Two Key Strategies… Protect the Core + Grow and Diversify Protect existing long- Acquire and manage Expand stream and Become a leading term coal mining mineral and royalty wetland mitigation diversified mining contracts interests business services business
Slide 5: NACCO Industries (NYSE: NC) – At a Glance
NACCO Industries (NYSE: NC) – At a Glance Year Ended Key Metrics December 31, 2022 Positioned for Growth In thousands Priorities for Cash Operating Profit (1) $69,986 Invest in growth and diversification strategies Income before Income taxes (1)(2) $87,723 Fund required cap ex Return cash to
Slide 6: Coal Mining Segment
North American COAL Coal Mining Segment
Slide 7: Coal Mining Segment – Operations
North American Coal operates surface coal mines under long- Customer Coal Mining Segment – Operations term contracts pursuant to a service-based business model Operations Land Acquisition Mining Load & Haul Reclamation Power Plant Operation Reserve Acquisition Coal Handling Bond Release and Maintena
Slide 8: Coal Mine Locations as of 12/31/22
Coal Mine Locations as of 12/31/22 • More than 110 years of experience • Our mines deliver coal to adjacent power plants • Each mine is the exclusive supplier to its customer’s facility • Mine mouth operations provide cost advantages to customers Our Falkirk Mine gained a new customer following Rain
Slide 9: Strong Customer Relationships
Strong Customer Relationships We work diligently to support our customers so they can produce reliable and affordable energy Focused on managing coal production costs to help customers with management fee contracts be more competitive Benefits customers and NACCO as fuel cost is a significant
Slide 10: Unique Business Model
Unique Business Model Coteau, Falkirk and Coyote Creek operate pursuant to “management fee” contracts Receive management fee per ton or MMBtu of coal delivered Contract structure aligns our goals with customer objectives Customers are responsible for funding all operating costs and capital P
Slide 11: Mississippi Lignite Mining Company (MLMC)
Mississippi Lignite Mining Company (MLMC) Delivers 100% of the coal to supply the Red Hills power plant (“Red Hills”) Red Hills supplies electricity to TVA Contract ends in 2032 We are responsible for all operating costs, capital requirements and final mine reclamation Contractually determ
Slide 12: Coal Mining Industry Challenges
Coal Mining Industry Challenges We were a key petitioner in the U.S. Supreme Court case, West Virginia v. EPA • Big win in fight against regulatory overreach • This ruling makes it clear that, without Congressional direction, the EPA does not have authority to regulate coal plants out of existence
Slide 13: Minerals Management Segment
Minerals Management Segment
Slide 14: Executing Growth
Executing Growth Catapult Mineral Partners is focused on managing and expanding our portfolio of oil and gas mineral and royalty interests Has developed a proven business model and a strong network for new acquisitions Acquired mineral and royalty interests totaling $12 million in 2022 Build
Slide 15: Minerals Management reserve locations as of 12/31/22
Minerals Management reserve locations as of 12/31/22 Derives income from royalty-based leases under which lessees make payments to us based on their production and sale of natural gas, oil, natural gas liquids and to a lesser extent, coal Total mineral and royalty interests included 141.4 thousa
Slide 16: Business Model
Business Model Minerals Management owns royalty interests, mineral interests, nonparticipating royalty interests, and overriding royalty interests Benefit from the continued development of properties without the need for additional investment once interests have been acquired We believe this b
Slide 17: Minerals Management Portfolio Overview
Minerals Management Portfolio Overview Appalachia Gulf Coast Permian Rockies Williston Totals 2022 Gross Acres 34,661.0 27,932.0 77,277.9 325.9 1,194.0 141,390.8 2022 Net Royalty Acres 36,199.3 20,105.4 2,050.4 72.4 2,388.1 60,815.5 2022 Production (BOE) 894,078 362,962 72,103 604 0 1,329,747 NGL Oi
Slide 18: Mitigation Resources
Mitigation Resources OF NORTH AMERICA Mitigation Resources
Slide 19: Mitigation Resources offers opportunity for growth and diversification
Mitigation Resources offers opportunity for growth and diversification in an industry where we have substantial knowledge and expertise and a strong reputation Creates and sells stream and wetland mitigation credits and provides services to those engaged in permittee-responsible mitigation and env
Slide 20: Project Types and Ownership Structures
Project Types and Ownership Structures Project Types: Mitigation Banks – Acquire, restore and permanently protect properties to generate and sell mitigation credits Purchasers use the credits to offset ecological impacts on unrelated projects within the same local ecosystem Permittee-responsib
Slide 21: Continued Operation and Development of Projects in the U.S. Markets
Continued Operation and Development of Projects in the U.S. Markets Cave Spring Smoky Run Buffalo Valley Marshall Branch Priority Markets Battle Ridge Lehigh Hanson Projects / Signed in 2022 Office Whites Creek Buck Creek Lye Branch Lake Ralph Hall Caddo Creek Yockanookany Tobaksákola Phase I and II
Slide 22: Mitigation Resources Growth
Mitigation Resources Growth Mitigation Resources was named a designated provider of abandoned mine land restoration by the state of Texas Mitigation Resources started working on the Brandywine Battlefield Mitigation Bank, its first project in Pennsylvania Helping restore the streams and wetlan
Slide 23: North American Mining Segment
North American Mining Segment
Slide 24: Customer Operations
North American Mining (“NAMining”) is a trusted mining partner for producers of aggregates, activated carbon, lithium and other industrial minerals Customer Operations Continues to be a primary platform for growth and diversification of our mining activities Working on a return to profitability
Slide 25: Investing in innovation with the deployment of new types of mining equipment
• Investing in innovation with the deployment of new types of mining equipment • Committed to expanding the business while improving operating efficiencies and scalability • Focused on this business becoming a substantial contributor to operating profit over time 25
Slide 26: NAMining – Sawtooth/Thacker Pass Project
NAMining – Sawtooth/Thacker Pass Project (in development) NAMining’s subsidiary, Sawtooth Mining, will serve as exclusive contract miner for the Thacker Pass lithium project, which is 100% owned by Lithium Nevada Corp. Sawtooth is currently providing mine design and consulting services Sawtoot
Slide 27: Corporate Responsibility
Corporate Responsibility
Slide 28: Doing the right thing is in our corporate DNA
People Operational Excellence Environmental Stewardship NACCO’s 110 years of growth and success are founded on three foundational elements — our people, our operational excellence and our environmental stewardship Good corporate governance with a long-term perspective is an integral part of our
Slide 29: People
Employees fuel our success People We encourage our employees to pursue continued professional development, skills training and other educational opportunities We enjoy high retention rates and long tenures with our employees 14% of employees have at least 20 years of service In 2022, 14 em
Slide 30: Safety first, safety always
Safety first, safety always Safety is Our #1 We operate in a culture committed to safety excellence Priority Based on Mine Safety and Health Administration data, the National Mining Association ranks us as an industry leader in safety, and our MSHA lost-time incident rate is consistently below t
Slide 31: Environmental Stewardship
Environmental Stewardship We have received over 97 federal and state awards for successful and innovative reclamation projects since 1978 At our core, we are conservationists Our native grass programs exemplify our commitment to going above and beyond technical requirements for reclamation Sin
Slide 32: We believe in making long-term investments in the areas where we operate
We believe in making long-term investments in the areas where we operate 2022 donations: Over $400,000 to Support Educational, Arts & Culture and Civic Organizations Also support employee cash donations to qualified organizations through our matching gift program Match up to $5,000 per emplo
Slide 33: Why Invest in NACCO?
Why Invest in NACCO? Our culture is built on Safety, Integrity and More than 110 years of Quality – we believe in doing the right thing success in mining Strong balance every time provides the sheet provides foundation for growth capacity for growth Focused on growing Goal is to grow Mitigation Over
Slide 34: Financial Results and Non-GAAP Reconciliation
Financial Results and Non-GAAP Reconciliation
Slide 35: Historical Operating Results
Historical Operating Results Tons of Coal Delivered Tons of Limestone Delivered (in millions) (in millions) 35.0 55.0 54.2 52.8 33.0 53.0 30.7 30.8 31.0 51.0 29.0 28.5 49.0 27.0 47.0 46.2 25.0 45.0 2020 2021 2022 2020 2021 2022 Consolidated Adjusted EBITDA(1) Consolidated Net Income (in millions) (i
Slide 36: Non-GAAP Disclosure
Non-GAAP Disclosure This presentation contains non-GAAP financial measures. Included in this presentation are reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with U.S. generally accepted accounting principles ("GAAP").
Slide 37: NACCO Industries Results and Non-GAAP Reconciliation
NACCO Industries Results and Non-GAAP Reconciliation ($ in thousands) Year Ended December 31 2020 2021 2022 Net income $14,793 $48,125 $74,158 Asset impairment charges 8,359 - 3,939 Contract termination settlement - (10,333) (30,882) Income tax provision (benefit) (535) 8,725 13,565 Interest expense
Slide 38: North
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NACCO Industries — Investor Presentation (March 2023) on 6ix