Suncoke Energy, Inc. · NYSE:SXC
Suncoke Energy — Q4 2013 Earnings Presentation
26 slides from Suncoke Energy's earnings presentation, Jan 30, 2014
Slide 1: SunCoke Energy, Inc. Q4 2013 Earnings Conference Call
SunCoke Energy, Inc. Q4 2013 Earnings Conference Call January 30, 2014
Slide 2: Forward-Looking Statements
Forward-Looking Statements TM This slide presentation should be reviewed in conjunction with the Fourth Quarter 2013 earnings releases of SunCoke Energy, Inc. (SunCoke) and the conference call held on January 30, 2013 at 11:30 a.m. ET. Some of the information included in this presentation constitute
Slide 3: Q4 & FY 2013 Earnings Overview
Q4 & FY 2013 Earnings Overview Earnings Per Share (diluted) Delivered on 2013 Adj. EBITDA guidance, albeit at low end of revised range—due to Q4 • Q4 results impacted by – Indiana Harbor $7M weaker than expected on lower volumes and higher costs $1.40 – Customer claim regarding coke quality at Jewel
Slide 4: 2013 Accomplishments
2013 Accomplishments Continued operations excellence • Maintained top quartile coke and coal safety performance • Sustained solid Domestic Coke performance despite major refurbishment at Indiana Harbor • Meaningful improvement in Coal Mining productivity and cash production costs per ton Positioned
Slide 5: Q4 & FY 2013 Financial Results
Q4 & FY 2013 Financial Results Q4 2013 FY 2013 vs. vs. Adj. EBITDA down 14% ($ in millions, except volumes) Q4'13 Q4'12 FY 2013 FY 2012 Q4 2012 FY 2012 and 19% for Q4 ’13 and FY Domestic Coke Sales Volumes 1,047 1,077 4,263 4,345 (30) (82) ’13, respectively Coal Sales Volumes 389 371 1,652 1,500 18
Slide 6: Adjusted EBITDA Bridge – Q4 '12 to Q4 '13
Adjusted EBITDA(1) Bridge – Q4 ‘12 to Q4 ‘13 Adjusted EBITDA impacted by coal business headwinds and disappointing Indiana Harbor performance ($ in millions) $3.1 ($9.0) $4.0 • Coke quality $3.4 claim ($14.9) accrual • India JV ($2.5M) • Lower $2.2M performance $3.4 $69.7 ($8.1M) • Contract • Black
Slide 7: Adjusted EBITDA Bridge – FY '12 to FY '13
Adjusted EBITDA(1) Bridge – FY ‘12 to FY ‘13 Adjusted EBITDA impacted by coal business headwinds and disappointing Indiana Harbor performance ($ in millions) $9.6 ($15.8) $4.7 • Coke $5.1 quality claim • Lower accrual ($2.5M) performance ($52.1) ($14.9M) • Contract $265.7 renewal $3.3M • Q4 2012 bil
Slide 8: Adjusted EBITDA vs. 2013 Initial Guidance
Adjusted EBITDA(1) vs. 2013 Initial Guidance Coal Mining and Indiana Harbor underperformed in quarter and year, offset by strong results in rest of Domestic Coke business ($ in millions) $11.3 ($12.7) $4.7 $0.1 • Haverhill & ($11.2) Middletown • Adj. outperformed EBITDA $5.4 ~$3M in $217.5 FY 2013 •
Slide 9: Diluted EPS Bridges
Diluted EPS Bridges EPS impacted by weak coal results, higher depreciation costs and income attributable to SXCP, partly offset by lower taxes Q4 2012 to Q4 2013 FY 2012 to FY 2013 ($0.16) ($0.70) ($0.03) $0.05 ($0.09) $0.39 $1.40 • Indiana ($0.22) $0.24 ($0.30) Harbor: ($0.02) • Attributable to ($0
Slide 10: Domestic Coke Business Summary
Domestic Coke Business Summary Achieved Adjusted EBITDA per ton of $54 in Q4 2013 and $57 in FY 2013 Domestic Coke Production Domestic Coke Adjusted EBITDA(1) Per Ton (thousands of tons) ($ in millions, except per ton amounts) 1,082 1,081 1,081 1,051 1,081 1,051 1,081 1,056 1,081 153 152 158 153 154
Slide 11: India Coke
India Coke Capacity utilization, coke production and earnings improved as we finished year Visa SunCoke Q2'13 Q3'13 Q4'13 FY'13 • Improving operating trends Coke Production Volumes (000s short tons) 69 93 107 269 with EBITDA of $2.2M in Q4 ’13 Coke Sales Volumes (000s short tons) 52 97 108 257 Capac
Slide 12: Coal Mining Financial Summary
Coal Mining Financial Summary Coal Mining Adjusted EBITDA(1) and Avg. Sales Price/Ton(2) Q4 2013 Adjusted EBITDA down ($ in millions, except per ton amounts) $166 $14.9 million YOY (5) (4) $123 $133 • Driven by ~$48 per ton decline in average (3) $121 $118 $144 $127 $120 price, partially offset by $
Slide 13: SXC Liquidity Position
SXC Liquidity Position Ended quarter with strong cash position and revolver availability ($ in millions) $19.5 $25.5 $268.8 $18.7 Includes: ($134.7) • AK extended payment $233.6 $78.5 Attributable to terms: ($20.7M) SXCP SXCP • Timing of payables: $35.8 Revolver $46.3 $27.1M Availability: • Interest
Slide 14: 2014 Guidance
2014 GUIDANCE SXC Q4 2013 Earnings Call 13
Slide 15: Consolidated Guidance Summary
Consolidated Guidance Summary Reaffirm FY 2014 earnings guidance, although expect Q1 to be challenged by impact of severe weather in January Metric 2014 Guidance Adjusted EBITDA (1) Consolidated $230 – $255 million Attributable to SXC $183 – $203 million EPS Attributable to SXC Shareholders $0.35 –
Slide 16: Strategic Considerations
Strategic Considerations Expiration of restructuring provisions in tax sharing agreement expands strategic and structuring flexibility Domestic Coke Business Coal Mining Business • Engaged key advisors • Evaluating strategic options with Board • Analysis underway to assess potential dropdowns to SXC
Slide 17: 2014 Priorities
2014 Priorities Operations Excellence • Sustain high-level of operating performance and maintain top quartile safety performance in coke and coal • Execute environmental remediation project • Stabilize India JV and generate cash flow • Drive mining efficiency gains to lower costs Drive Growth • Comp
Slide 18: Questions
QUESTIONS SXC Q4 2013 Earnings Call 17
Slide 19: Investor Relations
Investor Relations: 630-824-1907 www.suncoke.com
Slide 20: Appendix
APPENDIX SXC Q4 2013 Earnings Call 19
Slide 21: Definitions
Definitions • Adjusted EBITDA represents earnings before interest, taxes, depreciation, depletion and amortization (“EBITDA”) adjusted for sales discounts and the interest, taxes, depreciation, depletion and amortization attributable to our equity method investment. EBITDA reflects sales discounts i
Slide 22: Reconciliation from Net Income to Adjusted EBITDA
Reconciliation from Net Income to Adjusted EBITDA $ in millions FY 2013 Q4 2013 Q3 2013 Q2 2013 Q1 2013 FY 2012 Q4 2012 Q3 2012 Q2 2012 Q1 2012 Net Income 50.1 18.7 12.3 12.7 6.4 102.5 29.0 32.9 24.0 16.6 Add: Depreciation, depletion and amortization 96.0 25.5 23.2 23.4 23.9 80.8 23.3 18.9 20.2 18.4
Slide 23: Reconciliation of Segment Adjusted EBITDA and Adjusted EBITDA per ton
Reconciliation of Segment Adjusted EBITDA and Adjusted EBITDA per ton Domestic Brazil India Coal Coal $ in millions, except per ton data Coke Coke Coke (1) Mining Logistics Corporate Combined FY 2013 Adjusted EBITDA 243.2 16.1 0.9 (18.7) 4.7 (31.1) 215.1 Sales Volume (thousands of tons) 4,263 876 12
Slide 24: SXC 2013 Guidance Summary
SXC 2013 Guidance Summary 2013 Initial 2013 Guidance Metric 2013 Actual Guidance (as of Dec 2013) Adjusted EBITDA(1) Consolidated $205 – $230M $215 – $230M $215.1M Attributable to SXC $165 – $190M $175 – $188M $173.9M EPS Attributable to SXC $0.30 – $0.55 $0.35 – $0.55 $0.36 Shareholders (diluted) C
Slide 25: Expected 2014 EBITDA Reconciliation
Expected 2014 EBITDA Reconciliation TM 2014E 2014E (in millions) Low High Net Income $53 $71 Depreciation, depletion and amortization 105 100 Interest expense, net 55 53 Income tax expense 13 24 EBITDA $226 $248 Sales discounts – – Adjustment to unconsolidated affiliate earnings (1) 4 7 Adjusted EBI
Slide 26: Capital Expenditures & Investments
Capital Expenditures & Investments Consolidated Capex ($ in millions) 2013A 2014E(1) On-Going (2) $48 $50 Environmental Project $28 $41 Indiana Harbor $66 $20 Refurbishment Coal Logistics & Other $4 $6 Total CapEx $146 $117 Investments $181 - Total CapEx & $327 $117 Investments (1) Does not include