Graftech International Ltd. · NYSE:EAF
Graftech International — Proxy Contest (April 2024)
51 slides from Graftech International's proxy contest presentation, Apr 17, 2024
Slide 1: Investor Presentation April 2024
Investor Presentation April 2024 NYSE: EAF www.graftech.com
Slide 2: Forward-Looking Statements
Forward-Looking Statements CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: This presentation and related discussions may contain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements
Slide 3: The Board Serves as a Fiduciary for All Stockholders
The Board’s culture is one that is eager and open to hearing stockholder views and to adding new voices to the Board The Board is refreshed, with 75% of the current members added in the past 2.5 years Yet, the Board remains open to adding prospective members that could add value and demonstrate the
Slide 4: The Board Concluded Mr. Undavia Does Not Possess the Qualities of a Trusted Fiduciary
The Board Concluded Mr. Undavia Does Not Possess the Qualities Necessary To Be a Trusted Fiduciary of a Public Company Mr. Undavia was not forthright in his dealings with the Board which raised concerns about his credibility and trustworthiness Mr. Undavia showed a lack of sound judgment which under
Slide 5: Mr. Undavia's Filings Have Been Fraught with Baseless Assertions
Mr. Undavia’s Filings Have Been Fraught with Baseless Assertions about the Board and Management Team Mr. Undavia’s Baseless Assertions Correcting the Record GrafTech’s Board and management team lack stockholder alignment and rewarded themselves for destroying value The actions of GrafTech’s Board an
Slide 6: Correcting the Record: Turnover, Skills and Board Refresh
Mr. Undavia’s Baseless Assertions Correcting the Record GrafTech is a company beset with high Board and CEO turnover and took too long to find a CEO; then made a questionable appointment GrafTech’s Board is lacking key skills and experience Post Brookfield’s controlling interest, the Board is refres
Slide 7: Correcting the Record: Customers and Monterrey
Mr. Undavia’s Baseless Assertions Correcting the Record GrafTech mismanaged environmental risk related to its Monterrey facility The Board and management have implemented a deliberate campaign to restore customer relationships and reinforce the importance of the partnership we have with valued custo
Slide 8: Correcting the Record: Value Creation Plan
Mr. Undavia’s Filings Have Been Fraught with Baseless Assertions about the Board and Management Team Mr. Undavia’s Baseless Assertions Correcting the Record The actions of GrafTech’s Board and management team have driven stockholder value destruction and Mr. Undavia has a plan for creating stockhold
Slide 9: GrafTech Has Been Transparent in Acknowledging Results Fell Short
GrafTech Has Been Transparent in Acknowledging Results Have Fallen Short of Expectations and Underlying Drivers We operate in a highly cyclical industry and are in a challenging part of the cycle. Beginning with the Russian invasion of Ukraine, we’ve experienced end market disruption and significant
Slide 10: Executing Initiatives To Navigate Current Headwinds
Executing Initiatives That Are Expected To Enable GrafTech To Navigate the Current Headwinds Specific to 2023, GrafTech’s Board and Management Team: Reduced costs, resulting in a 10% decline in our period costs Adjusted working capital levels, resulting in a more than $100 million reduction in inven
Slide 11: Executing Initiatives To Navigate Current Headwinds (cont.)
Executing Initiatives That Are Expected to Enable GrafTech To Navigate the Current Headwinds (cont.) In February 2024, announced further measures to optimize our manufacturing footprint and reduce costs: Expected to generate $15 million in annualized fixed cost savings Reducing our overhead structur
Slide 12: Initiatives Preserve Ability To Capitalize on Growth: Graphite Electrodes
Our Initiatives Preserve GrafTech’s Ability To Capitalize on Long-Term Growth Opportunities Graphite Electrodes Long-term Opportunity/Industry Tailwind Shift to electric arc furnace (“EAF”) steelmaking expected to continue driven by decarbonization efforts Graphite electrode demand growth anticipate
Slide 13: Initiatives Preserve Ability To Capitalize on Growth: Anode Materials
Our Initiatives Preserve GrafTech’s Ability To Capitalize on Long-Term Growth Opportunities (cont.) Anode Materials Long-term Opportunity/Industry Tailwind Needle coke demand expected to accelerate driven by its use in the growing EV market Graphitization capacity and know how is required to convert
Slide 14: Mr. Undavia Has Not Provided New or Differentiated Views on Strategy
Mr. Undavia Has Not Provided Any New or Differentiated Views with Respect To GrafTech’s Strategy Focus on repairing customer relationships Reexamine the culture ensuring that there is a more cohesive strategy in place along with better accountability and transparency Better align executive compensat
Slide 15: Baseless Assertions: Stockholder Alignment and Compensation
Mr. Undavia’s Filings Have Been Fraught with Baseless Assertions about the Board and Management Team Mr. Undavia’s Baseless Assertions Correcting the Record GrafTech’s Board and management team lack stockholder alignment and rewarded themselves for destroying value The Board recently increased the r
Slide 16: The Board Is Aligned with Stockholder Interests
The GrafTech Board Is Aligned with Stockholder Interests and Committed To Its Fiduciary Duties The Board maintains a stock ownership policy that has been benchmarked to align with peers In 2022, the Board increased the share ownership requirement by 33% to a minimum of $600,000 of GrafTech stock by
Slide 17: Baseless Assertions: Board Lacks Key Skills and Experience
Mr. Undavia’s Filings Have Been Fraught with Baseless Assertions about the Board and Management Team Mr. Undavia’s Baseless Assertions Correcting the Record 3 p. 17-19 GrafTech’s Board is lacking key skills and experience GrafTech’s Board is experienced, highly engaged, refreshed and majority indepe
Slide 18: Board Is Experienced, Highly Engaged, Refreshed and Majority Independent
GrafTech’s Board Is Experienced, Highly Engaged, Refreshed and Majority Independent Henry R. Keizer Chairman, GrafTech International Ltd. and Former Deputy Chairman and Chief Operating Officer, KPMG Director since 2021 Diego Donoso Former President of Packaging and Specialty Plastics, Dow Inc. Direc
Slide 19: Vote FOR Board-Recommended Nominees Mr. Taccone and Ms. Fine
The Board Urges Stockholders To Vote “FOR” the Highly Qualified and Experienced Board-Recommended Nominees of Mr. Taccone and Ms. Fine Debra Fine Chair and Founder, Fine Capital Partners Highlights: 30+ years of experience as an institutional investor Deep knowledge of capital markets Over two decad
Slide 20: Baseless Assertions: Turnover and CEO Appointment
Mr. Undavia’s Filings Have Been Fraught with Baseless Assertions about the Board and Management Team Mr. Undavia’s Baseless Assertions Correcting the Record 4 p. 20-22 GrafTech is a company beset with high Board and CEO turnover and took too long to find a CEO; then made a questionable appointment P
Slide 21: A Thorough CEO Search Process
A Thorough and Thoughtful CEO Search Process Resulted in the Appointment of the Right Candidate To Lead GrafTech Forward The Board conducted a comprehensive search to identify GrafTech’s next CEO The Board’s primary focus was to ensure that the right candidate was selected, not to drive the process
Slide 22: Appointed Timothy Flanagan as CEO and President
Appointed Timothy Flanagan as GrafTech’s Chief Executive Officer and President Timothy K. Flanagan Chief Executive Officer and President Highlights: Strong senior leadership 13+ years of steel industry experience Significant experience in dealing with deeply cyclical industries March 26, 2024: “The
Slide 23: Baseless Assertions: Customer Relationships
Mr. Undavia’s Filings Have Been Fraught with Baseless Assertions about the Board and Management Team Mr. Undavia’s Baseless Assertions Correcting the Record 5 p. 23-24 The Board and management have implemented a deliberate campaign to restore customer relationships and reinforce the importance of th
Slide 24: Confident in Our Ability To Meet Customer Needs
We Are Confident in Our Ability To Meet the Needs of Our Existing and Prospective Customers, Now and in the Future Investing in Customer Engagement Deliberate campaign to reinforce the importance of the partnership we have with valued customers Investing significant time meeting with current and pot
Slide 25: Baseless Assertions: Monterrey Environmental Risk
Mr. Undavia’s Filings Have Been Fraught with Baseless Assertions about the Board and Management Team Mr. Undavia’s Baseless Assertions Correcting the Record 6 p. 25-26 GrafTech mismanaged environmental risk related to its Monterrey facility The Board and management team’s immediate response resulted
Slide 26: Swift Actions To Mitigate Risks at Monterrey Facility
Took Swift Actions To Mitigate Risks Related To Monterrey, Mexico Facility Key Facts Temporary suspension occurred in late 2022 No emission violations were alleged by the relevant authorities Has not resulted in any material capital outlays Board/Management Response Immediate response resulted in th
Slide 27: Baseless Assertions: Dismissal of Mr. Undavia's Candidacy
Mr. Undavia’s Filings Have Been Fraught with Baseless Assertions about the Board and Management Team Mr. Undavia’s Baseless Assertions Correcting the Record 7 p. 27-28 Mr. Undavia’s skillsets would be additive to GrafTech’s Board, yet GrafTech was dismissive of his candidacy Due to Mr. Undavia’s lac
Slide 28: Nominee Skills and Experience Comparison
In Comparison To Board-Recommended Nominees, Mr. Undavia’s Skills and Experience Are Deficient in Key Areas Knowledge, Skills and Experience Taccone Fine Undavia Public Company / Corporate Governance ✔ ✔ ✖ Senior Management ✔ ✔ ✖ Strategy ✔ ✔ ✖ Industry Experience ✔ ✔ ✔* Commercial, Marketing and Sa
Slide 29: Vote FOR Board-Recommended Nominees Using the WHITE Proxy Card
The Board urges stockholders to vote “FOR” the highly qualified and experienced Board-recommended nominees of Mr. Taccone and Ms. Fine, using the WHITE proxy card
Slide 30: Board Has Determined Not To Endorse Mr. Undavia
The Board Has Determined Not To Endorse Mr. Undavia for Election as a Director of GrafTech Mr. Undavia has no prior experience on a public company board Mr. Undavia has limited direct sector experience Mr. Undavia did not provide any new or differentiated views with respect to GrafTech’s strategy Mr
Slide 31: Board Urges Stockholders To Vote FOR Board-Recommended Nominees
The Board Urges Stockholders To Vote “FOR” the Board-Recommended Nominees of Mr. Taccone and Ms. Fine The Board is highly experienced and qualified The Board has a diversity of complementary skills and opinions The Board is highly engaged and is working closely with the management team to take decis
Slide 32: Appendix: Additional Information and Where to Find It
Appendix Additional Information and Where to Find It The Company has filed with the SEC a definitive proxy statement on Schedule 14A (the “Proxy Statement”), containing a form of WHITE proxy card, with respect to its solicitation of proxies for the Annual Meeting. INVESTORS AND SECURITY HOLDERS ARE
Slide 33: Contacts
Contacts Stockholders and Media MacKenzie Partners, Inc. 800-322-2885 (toll-free from the U.S. or Canada) +1-212-929-5500 (from other countries) proxy@mackenziepartners.com Investor Relations Michael Dillon GrafTech International 216-676-2000 investor.relations@graftech.com
Slide 34: About GrafTech
About GrafTech GRAF | ec! International
Slide 35: Business Overview
Business Overview Grar foc!)
Slide 36: Why GrafTech? Industry Leader in High-Quality Graphite Electrodes
Why GrafTech? An Industry Leader in the Production of High-Quality Graphite Electrodes Graphite electrodes are essential to the operation of an electric arc furnace (“EAF”) Reflecting environmental benefits, growth in EAF steelmaking expected to continue outpacing integrated steelmaking Prudent and
Slide 37: Graphite Electrodes – Mission Critical Consumable for EAF Steel Production
Graphite Electrodes – Mission Critical Consumable for EAF Steel Production Electric Arc Furnace Industrial consumable product used primarily in EAF steel production No substitute for EAF steelmaking: Essential to the function of an EAF steel mill Able to sustain high levels of heat generated in EAF
Slide 38: Global Network of Production, Sales & Service
Global Network of Production, Sales & Service Brooklyn Heights OHIO St. Marys PENNSYLVANIA(1) Port Lavaca (Seadrift Coke) TEXAS Monterrey MEXICO Salvador BRAZIL Pamplona SPAIN Calais FRANCE Bussigny SWITZERLAND Milano ITALY Ratingen GERMANY Sheffield UNITED KINGDOM Alberton SOUTH AFRICA Dubai UNITED
Slide 39: Supply Chain Summary
Supply Chain Summary Coal Tar Pitch Oil Petroleum Needle Coke Pitch Needle Coke GrafTech Capability: Petroleum Needle Coke Production Lithium-Ion Batteries EAF Steel Raw Materials Needle Coke Synthetic Graphite End Markets Synthetic Graphite GrafTech Capability: Graphitization and Electrode Manufact
Slide 40: Graphite Electrodes – Manufacturing Process
Graphite Electrodes – Manufacturing Process
Slide 41: Business Highlights
Business Highlights Grea [ci a
Slide 42: Business Highlights
Prudent and Disciplined Capital Allocation Strategy 2 An Industry Leading Producer of Mission Critical Consumable with No Substitute 1 5 4 3 Leveraging Competitive Advantages To Capitalize on Industry Tailwinds EV Market is Accelerating Demand for Needle Coke and Graphitization Capabilities Benefiti
Slide 43: An Industry Leading Producer of Mission Critical Consumable with No Substitute
An Industry Leading Producer of Mission Critical Consumable with No Substitute 1 Share of Graphite Electrode Capacity (Excluding supply from China) 786 Thousand MT Nameplate Capacity(1) (Estimated) Top 5 Producers Account for ~82% of Graphite Electrode Capacity Four Largest Global Competitors(2) ~59
Slide 44: Benefiting from ESG Tailwinds Driving Long-Term EAF Growth
Benefiting from ESG Tailwinds Driving Long-Term EAF Growth 2 Source: J.P. Morgan Analyst Report on Steel: Structurally Improved Sector, But Cyclical Headwinds Lie Ahead from May 23, 2023. Source: Steel Manufacturers Association. Contributing to a Circular Economy “The EAF process is a sustainable mo
Slide 45: EAF Steelmaking – Environmentally Friendly Alternative
97 (ex-China & India) 88 EAF steelmaking has historically taken market share due primarily to its competitive advantages; ~49% outside of China in 2022, up from ~44% in 2015(1) Environmental regulation is a tailwind, EAF steelmaking produces approximately 75%(2) fewer CO2 emissions compared to tradi
Slide 46: Competitive Advantages To Capitalize on Electrode Demand
Competitive Advantages To Capitalize on Electrode Demand GrafTech’s global footprint enables flexibility to target regions where demand is strongest Ability to produce connecting pins at two different locations on two different continents Expanded global commercial and technical service footprint in
Slide 47: Substantially Vertically Integrated Into Petroleum Needle Coke
Substantially Vertically Integrated Into Petroleum Needle Coke Only large-scale graphite electrode producer substantially vertically integrated into petroleum needle coke Secure, high-quality supply of our key raw material Internal needle coke production is cost advantaged relative to third-party ne
Slide 48: EV Market Accelerating Demand for Needle Coke and Graphitization
Source: For 2022, Rho Motion as of Q4 2022; for 2025 and 2030 projections, Rho Motion as of Q1 2023. Source: GrafTech analysis. Assumes 1.2kg of anode material per kWh of battery pack capacity. Also assumes anode material is approximately 63% synthetic graphite in 2022, 53% in 2025 and 50% in 2030,
Slide 49: EV Market Demand: GrafTech Actions
Western automotive OEMs looking to diversify battery supply chains from China, given Inflation Reduction Act incentives, among other drivers Capacity additions for both needle coke production and for graphitization capabilities have been limited, outside of China Western demand for synthetic graphit
Slide 50: Prudent and Disciplined Capital Allocation Strategy
Debt Maturity Profile (in millions)(2) No debt maturities until 2028 Cash and Cash Equivalents (in millions)(1) Adequate liquidity from $177 million of cash and $112 million revolver availability(2) 5 Represents end-of-period figures. As of December 31, 2023. Prudent and Disciplined Capital Allocati
Slide 51: GrafTech International Ltd.
GrafTech International Ltd. 982 Keynote Circle Brooklyn Heights, Ohio 44131