Suncoke Energy, Inc. · NYSE:SXC
Suncoke Energy — Q2 2016 Earnings Presentation
23 slides from Suncoke Energy's earnings presentation, Jul 28, 2016
Slide 1: SunCoke Energy, Inc. Q2 2016 Earnings Conference Call
SunCoke Energy, Inc. Q2 2016 Earnings Conference Call July 28, 2016
Slide 2: Forward-Looking Statements
Forward-Looking Statements TM This slide presentation should be reviewed in conjunction with the Second Quarter 2016 earnings release of SunCoke Energy, Inc. (SXC) and conference call held on July 28, 2016 at 11:00 a.m. ET. Some of the information included in this presentation constitutes “forward-l
Slide 3: Management Perspective
Management Perspective TM Achieved solid safety, environmental and operating performance across cokemaking fleet Realized strong cost improvement at Indiana Harbor; expanding scope of oven rebuild initiative in Q4 ‘16 Handled below-target logistics volumes due to coal market challenges; fundam
Slide 4: Navigating Current Market Conditions
Navigating Current Market Conditions TM Encouraged by recent improvement in steel and coal market conditions, and will remain flexible and responsive to industry landscape Reached resolution on several previously uncertain items in 1H 2016 Continued improvement in steel industry outlook • Improving
Slide 5: Q2 2016 Overview
Q2 2016 Overview TM Q2 2016 Earnings Overview Q2 ‘16 EPS of ($0.07) includes ($/share) ($ in millions) Earnings per Share Consolidated • $5.1M loss associated with divestiture of (diluted) Adj. EBITDA(1) Coal Mining business ($0.07) • $3.5M gain on debt extinguishment ($0.21) • Other items described
Slide 6: Adjusted EBITDA – Q2 '15 to Q2 '16
(1) Adjusted EBITDA – Q2 ‘15 to Q2 ‘16 TM Second quarter performance benefited from strong IHO cost savings, contribution of CMT and lapping of Q2 ‘15 pension termination charge ($ in millions) $46.5 $4.5 $0.4 $33.4 $1.1 $13.6 ($6.5) • $4.2M – CMT • ($3.8M) – KRT and Lake Terminal • $4.6M – O&M reco
Slide 7: Domestic Coke Business Summary
Domestic Coke Business Summary TM Solid quarter performance in line with expectations despite items impacting Q2 comparability Domestic Cokemaking Performance Stable Q2 coke production, (Production, Kt) $54/ton $54/ton excluding Indiana Harbor $51/ton $51/ton $45/ton • As expected, production 1,047
Slide 8: Coal Logistics Business Summary
Coal Logistics Business Summary TM Continue to see below-target throughput across Coal Logistics fleet Coal Logistics Performance Domestic Coal Logistics down (Tons Handled, Kt) $21.1 $3.8M due to lower than $9.3 expected throughput $5.0 5,555 $5.9 $5.4 5,149 • Lower met. and thermal 4,315 4,208 shi
Slide 9: Liquidity Position
Liquidity Position TM Maintain solid combined liquidity of ~$275M SXCP revolver availability: $67M ($8.4) SXC revolver Attributable availability: $100M to SXCP $62.4 ($54.5) ($12.1) $30.2 ($12.4) $108.0 $101.8 $1.0 • $13.5M – Lower A/R • $9.5M – Brazil coke annual dividend $33.7 • $9.5M – Timing of
Slide 10: IHO Q2 Performance
IHO Q2 Performance TM Strong cost management & sustained performance at rebuilt ovens, but continued operational challenges across non-rebuilt ovens Disciplined cost management resulting in $4.6M benefit vs. Q2 ‘15 • YTD 2016 incremental O&M savings of ~$10M Continued stability from 48 rebuilt ovens
Slide 11: Areas of Focus at Indiana Harbor
Areas of Focus at Indiana Harbor TM Remain committed to execution of methodical approach to improving plant operations Areas of Focus Implementing Solutions Oven health degradation of non-rebuilt As discussed during Q1 earnings call, ovens outpacing expectations expanding scope of rebuilds in 2016 •
Slide 12: Revised IHO Outlook
Revised IHO Outlook TM IHO Adjusted EBITDA guidance revised to reflect operating challenges and cost of additional oven rebuilds Expect IHO will generate near break- Areas of Focus even Adj. EBITDA in 2016, impacted by • Implementing systematic maintenance • Lower production arising from window to i
Slide 13: 2016 Priorities
2016 Priorities TM Manage Through Challenging Market Conditions • Remain flexible & responsive to industry backdrop while leveraging unique value proposition Stabilize Indiana Harbor Cokemaking Operations • Improve profitability by executing oven rebuilds and reducing O&M costs Deliver Operations Ex
Slide 14: Questions
QUESTIONS SXC Q2 2016 Earnings Call 13
Slide 15: Investor Relations
Investor Relations 630-824-1907 www.suncoke.com
Slide 16: Appendix
APPENDIX SXC Q2 2016 Earnings Call 15
Slide 17: Definitions
Definitions TM Adjusted EBITDA represents earnings before interest, (gain) loss on extinguishment of debt, taxes, depreciation and amortization (“EBITDA”), adjusted for impairments, coal rationalization costs, changes to our contingent consideration liability related to our acquisition of CMT, and i
Slide 18: Reconciliation to Adjusted EBITDA
Reconciliation to Adjusted EBITDA TM ($ in millions) Q2 '16 Q1 '16 FY '15 Q4 '15 Q3 '15 Q2 '15 Q1 '15 Net cash provided by Operating activities $92.1 $29.4 $141.1 $58.1 $6.4 $65.5 $11.1 Depreciation, depletion and amortization expense 28.6 28.2 109.1 33.3 25.6 26.4 23.8 (Gain) / loss on extinguishme
Slide 19: Reconciliation of Segment Adjusted EBITDA and Adjusted EBITDA per ton
Reconciliation of Segment Adjusted EBITDA and Adjusted EBITDA per ton TM Reconciliation of Segment Adjusted EBITDA and Adjusted EBITDA per Ton Corporate, Domestic India Coal Legacy Costs ($ in millions, except per ton data) Coke Brazil Coke Coke (1) Coal Mining Logistics (2) and Other Consolidated Q
Slide 20: Balance Sheet & Debt Metrics
Balance Sheet & Debt Metrics TM As of 06/30/2016 Balance SXC Attributable Attributable Consolidated to SXCP ($ in millions) to SXC Cash $ 108 $ 54 $ 54 Available Revolver Capacity 167 67 100 Total Liquidity 275 121 154 Total Debt (Long and Short-term) 893 828 65 Net Debt (Total Debt less Cash) 785 7
Slide 21: 2016 Outlook
2016 Outlook TM 2016 Guidance remains unchanged from prior quarter 2015 2016 Metric Results Guidance (1) Adjusted EBITDA Consolidated $185.8M $210M – $235M (1) Attrib. to SXC $104.6M $105M – $124M (2) Capital Expenditures $76M ~$45M Domestic Coke Production 4.1 Mt 4.0 Mt – 4.1 Mt Dom. Coke Adj. EBIT
Slide 22: 2016E Guidance Reconciliation
2016E Guidance Reconciliation TM 2016E 2016E ($ in millions) Low High Net cash provided by Operating activities $150 $170 Depreciation and amortization expense 106 106 (Gain) / loss on extinguishment of debt (20) (27) Loss on divestiture of business 14 14 Changes in working capital and other 6 7 Net
Slide 23: Capital Expenditures
Capital Expenditures TM 2015 CapEx ($ in millions) SXC SXCP Consolidated Ongoing(1) $30 $21 $51 Other 4 0 4 Environmental Project 0 21 21 Total CapEx (excl. pre-funded Ship loader) $34 $42 $76 Coal Logistics: Ship loader (pre-funded) $0 $5 $5 2016 Expected CapEx ($ in millions) SXC SXCP Consolidated