Suncoke Energy, Inc. · NYSE:SXC
Suncoke Energy — Q2 2017 Earnings Presentation
22 slides from Suncoke Energy's earnings presentation, Jul 27, 2017
Slide 1: SunCoke Energy, Inc. Q2 2017 Earnings Conference Call
SunCoke Energy, Inc. Q2 2017 Earnings Conference Call July 27, 2017
Slide 2: Forward-Looking Statements
Forward-Looking Statements This slide presentation should be reviewed in conjunction with the Second Quarter 2017 earnings release of SunCoke Energy, Inc. (SXC) and conference call held on July 27, 2017 at 11:00 a.m. ET. Some of the information included in this presentation constitutes “forward-look
Slide 3: Q2 2017 Highlights
Q2 2017 Highlights ✓ Achieved operating performance across coke and coal logistics fleet in line with expectations ✓ Began 2017 oven rebuild campaign at IHO; first set of completed ovens demonstrating strong performance ✓ Delivered significantly improved year-over-year performance at CMT ✓ Successfu
Slide 4: SunCoke Refinancing
SunCoke Refinancing Successfully refinanced SunCoke capital structure, extending maturities while maintaining sufficient liquidity Completed 8-year, $630M unsecured SXCP note issuance w/ 7.50% coupon • Offering proceeds enabled reduction in secured debt by ~0.6x Successfully restructured SXC and SXC
Slide 5: Q2 2017 Overview
Q2 2017 Overview Q2 2017 Earnings Q2 ‘17 EPS of ($0.38) due primarily to ($/share) ($ in millions) Earnings per Share Consolidated • $20.2M loss on debt extinguishment (diluted) Adj. EBITDA(1) related to Q2 2017 debt refinancing ($0.07) (1) Consolidated Adj. EBITDA up $1.0M ($0.38) $47.5 $46.5 vs. Q
Slide 6: Adjusted EBITDA – Q2 '16 to Q2 '17
(1) Adjusted EBITDA – Q2 ‘16 to Q2 ‘17 Q2 ‘17 results benefited from significantly improved logistics volumes ($ in millions) $46.5 $47.5 $1.3 ($4.7) $4.6 ($0.2) • $1.0M – Lower corporate costs • ($3.5M) – Higher O&M due primarily to oven rebuilds • ($2.8M) – Lower volumes due to oven rebuilds and c
Slide 7: Domestic Coke Business Summary
Domestic Coke Business Summary Q2 ‘17 cokemaking performance in line with expectations Domestic Cokemaking Performance Adj. EBITDA/ton(1) of ~$46 on (Production, Kt) 950K tons production $53/ton $51/ton $52/ton $46/ton • Expected impact of IHO oven $38/ton rebuilds on volumes and O&M 998 1,001 964 •
Slide 8: Coal Logistics Business Summary
Coal Logistics Business Summary Solid Q2 ‘17 performance driven primarily by increased volumes at CMT and KRT facilities Coal Logistics Performance Delivered Q2 ‘17 Adj. EBITDA (Tons Handled, Kt) $45.3M of $10.0M • Solid volumes due to sustained $5.4M $7.3M $13.1M $10.0M coal market improvement 5,71
Slide 9: Q2 2017 Liquidity
Q2 2017 Liquidity Maintain strong consolidated liquidity of ~$390M, including >$180M of SXC standalone liquidity (Consolidated) Q2 ‘17 Total Debt $901M $1.1 Gross Leverage(1) 3.96x $24.9 ($24.6) $157.2 ($9.7) ($12.2) $136.7 Consolidated • $88.7M – Proceeds from issuance of long- Revolver term debt,
Slide 10: 2017 Guidance Summary
2017 Guidance Summary Slightly modified Op. Cash Flow and Cash Tax guidance post-refinancing; Reaffirm remaining FY 2017 guidance targets 2016 2017 Metric Results Guidance (1) Adjusted EBITDA Consolidated $217.0M $220M – $235M Attrib. to SXC $130.4M $130M – $141M (2) Capital Expenditures ~$48M ~$80M
Slide 11: Capital Allocation Priorities
Capital Allocation Priorities Continuing to deploy capital in most efficient manner to maximize value for SXC shareholders Began executing SXCP unit purchases during Q2 2017 • Purchased ~1.5M SXCP units for ~$25M total during the quarter • Through July 26, 2017, SXC has purchased 1.6M total units fo
Slide 12: 2017 Key Initiatives
2017 Key Initiatives Deliver Operations Excellence and Optimize Asset Base • Drive strong operational & safety performance while optimizing asset utilization Execute Further Oven Rebuilds at IHO Cokemaking Operations • Complete oven rebuilds to drive further performance improvements Deploy Capital i
Slide 13: Questions
QUESTIONS SunCoke Energy”
Slide 14: Investor Relations
Investor Relations 630-824-1907 www.suncoke.com
Slide 15: Appendix
APPENDIX SunCoke Energy”
Slide 16: Definitions
Definitions Adjusted EBITDA represents earnings before interest, loss (gain) on extinguishment of debt, taxes, depreciation and amortization (“EBITDA”), adjusted for impairments, coal rationalization costs, changes to our contingent consideration liability related to our acquisition of CMT and the e
Slide 17: Reconciliation to Adjusted EBITDA
Reconciliation to Adjusted EBITDA YTD YTD ($ in millions) Q2 '17 Q1 '17 FY '16 Q4 '16 Q3 '16 Q2 '16 Q1 '16 Q2 '17 Q2 '16 Net cash provided by Operating activities $24.9 $29.5 $219.1 $53.0 $44.6 $92.1 $29.4 $54.4 $121.5 Depreciation, depletion and amortization expense 33.3 33.3 114.2 31.8 25.6 28.6 2
Slide 18: Reconciliation of Segment Adjusted EBITDA and Adjusted EBITDA per ton
Reconciliation of Segment Adjusted EBITDA and Adjusted EBITDA per ton Reconciliation of Segment Adjusted EBITDA and Adjusted EBITDA per Ton Domestic Coal Corporate ($ in millions, except per ton data) Coke Brazil Coke Logistics (1) and Other(2) Consolidated Q2 2017 Adjusted EBITDA $44.0 $4.5 $10.0 (
Slide 19: Balance Sheet & Debt Metrics
Balance Sheet & Debt Metrics As of 06/30/2017 Balance SXC Attributable Attributable Consolidated to SXCP ($ in millions) to SXC Cash $ 136 $ 24 $ 112 Available Revolver Capacity 254 183 71 Total Liquidity 389 207 183 Gross Debt (Long and Short-term) 901 857 45 Net Debt (Total Debt less Cash) 765 833
Slide 20: 2017 Capital Expenditures
2017 Capital Expenditures 2016 CapEx ($ in millions) SXC SXCP Consolidated Ongoing(1) $24 $16 $40 Other / Expansion 3 0 3 Environmental Project (Gas Sharing) 0 5 5 Total CapEx (excl. pre-funded Ship loader) $27 $21 $48 Coal Logistics: Ship loader (pre-funded) $0 $11 $11 2017 Expected CapEx ($ in mil
Slide 21: 2017E Guidance Reconciliation
2017E Guidance Reconciliation 2017E 2017E ($ in millions) Low High Net cash provided by Operating activities $128 $143 Depreciation and amortization expense (131) (131) Deferred income tax expense (65) (70) Changes in working capital and other 27 28 Loss on extinguishment of debt(1) (20) (20) Net Lo
Slide 22: Thermal Coal Export Profitability
Thermal Coal Export Profitability Solid API2 benchmark price should continue to support CMT ILB producers’ competitiveness in maintaining viable exports $85 $10 ($12) Believe ILB export ($14) thermal solidly profitable at current spot API2 ($6) benchmark pricing of ($20) ~$85/t $43 • Based on averag