Quaker Houghton · NYSE:KWR
Quaker Houghton — Quaker Chemical — FY2018 Earnings Presentation
16 slides from Quaker Houghton's earnings presentation, Feb 28, 2019
Slide 1: Fourth Quarter and Full Year 2018 Results Investor Conference Call
1 Fourth Quarter and Full Year 2018 Results Investor Conference Call March 1, 2019 Quaker Chemical Corporation
Slide 2: Risks and Uncertainties Statement
Risks and Uncertainties Statement Regulation G The attached charts include C ompany information that does not conform to generally accepted accounting principles ( “GAAP”). Management believes that an analysis of this data is meaningful to investors because it provides insight with respect to ongoin
Slide 3: Speakers
Speakers Michael F. Barry Chairman of the Board, Chief Executive Officer & President Mary Dean Hall Vice President, Chief Financial Officer & Treasurer Robert T. Traub Vice President, General Counsel & Corporate Secretary Chart #1
Slide 4: Fourth Quarter and Full Year 2018 Headlines
Fourth Quarter and Full Year 2018 Headlines ▪ Volume growth of 2% in the quarter and 3% for the full year drives net sales growth in both periods despite recent foreign exchange headwinds and overall market challenges ▪ Net income of $7.8 million or $0.58 per diluted share in the fourth quarter and
Slide 5: Chairman Comments
Chairman Comments ▪ Fourth Quarter 2018 • Solid operating performance coupled with a lower effective tax rate drives non - GAAP earnings per diluted share growth of 19% compared to Q4’17 • Net sales of $211.5 million up slightly versus prior year on higher volumes and increases from selling price an
Slide 6: Q4 and FY 2018 results commentary
▪ Q4’18 Non - GAAP EPS of $1.51 which increased 19% compared to Q4’17, drives a 21% increase in FY’18 Non - GAAP EPS to $6.04 compared to FY’17 on strong operating performance and lower effective tax rate ▪ Net sales increases in Q4‘18 and FY‘18 driven by volume growth of 2% and 3%, respectively, as
Slide 7: Financial Snapshot
Chart #5 Financial Snapshot ($ in Millions unless otherwise noted) Q4 2018 Q4 2017 YTD 2018 YTD 2017 Net Sales 211.5 211.1 867.5 820.1 Gross Profit 74.8 74.0 312.3 291.5 Gross Margin (%) 35.4% 35.1% 36.0% 35.5% SG&A 50.5 50.1 207.9 198.8 Combination-Related Expenses 4.3 6.9 16.7 29.9 Operating Incom
Slide 8: Continued market share gains drive full year volume growth
Chart #6 Continued market share gains drive full year volume growth Product Volume by Quarter and Year in Thousands of Kilograms 100,000 140,000 180,000 220,000 260,000 300,000 30,000 40,000 50,000 60,000 70,000 80,000 Full Year Volume Quarter Volume Quarter Volume Full Year Volume
Slide 9: Gross Margin Percentage Trends
28.1% 35.0% 35.6% 32.7% 33.8% 35.9% 35.8% 37.7% 37.5% 35.5% 36.0% 25.0% 28.0% 31.0% 34.0% 37.0% 40.0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Gross Margin Percentage 35.1% 35.6% 36.5% 36.5% 35.4% 33.0% 34.0% 35.0% 36.0% 37.0% 38.0% Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Gross Margin
Slide 10: Adjusted EBITDA Baseline Historical Performance
$40.1 $44.2 $66.8 $73.0 $80.9 $89.6 $99.8 $101.6 $106.6 $115.2 $125.6 6.9% 9.8% 12.3% 10.7% 11.4% 12.3% 13.0% 13.8% 14.3% 14.1% 14.5% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Adjusted EBITDA ($ Mils.) Adjusted EBITDA Margin (%) FY 2008 – FY 2018 CAGR: 12.1% +760 Margin bps Strong opera
Slide 11: Balance Sheet Cash and Debt
-$110 -$90 -$70 -$50 -$30 -$10 $10 $30 $50 $70 $90 $110 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 $ Millions Cash ST/LT Debt Net Cash (Debt) Chart #9 Continued solid cash flow generation and strong balance sheet Balance Sheet Cash and Debt
Slide 12: Appendix
@ Quaker APPENDIX
Slide 13: Non-GAAP EPS Reconciliation
Chart #10 Non - GAAP EPS Reconciliation Q4 2018 Q4 2017 YTD 2018 YTD 2017 GAAP earnings (loss) per diluted share 0.58$ (0.73)$ 4.45$ 1.52$ Equity loss (income) in a captive insurance company per diluted share 0.01 (0.08) (0.07) (0.19) Houghton combination-related expenses per diluted share 0.32 0.43
Slide 14: Adjusted EBITDA Reconciliation
Chart #11 Adjusted EBITDA Reconciliati on ($ in Thousands unless otherwise noted) Q4 2018 Q4 2017 YTD 2018 YTD 2017 Net income (loss) attributable to Quaker Chemical Corporation 7,805$ (9,762)$ 59,473$ 20,278$ Depreciation and amortization 4,803 5,012 19,714 19,966 Interest expense 1,354 1,664 6,158
Slide 15: Adjusted EBITDA Reconciliation 2008-2018
Chart #12 Adjusted EBITDA Reconciliation ($ in Thousands unless otherwise noted) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Net income 9,833$ 16,058$ 32,120$ 45,892$ 47,405$ 56,339$ 56,492$ 51,180$ 61,403$ 20,278$ 59,473$ Depreciation 10,879 9,525 9,867 11,455 12,252 12,339 12,306 12,395
Slide 16: Segment Performance
Chart #13 Segment Performance Q4 2018 Q4 2017 FY 2018 FY 2017 Net sales North America 92,553$ 88,476$ 383,471$ 356,598$ EMEA 55,878 59,034 233,597 226,243 Asia/Pacific 54,275 53,934 214,157 201,008 South America 8,775 9,628 36,295 36,233 Total net sales 211,481$ 211,072$ 867,520$ 820,082$ Q4 2018 Q4