Ecovyst Inc. · NYSE:ECVT
Ecovyst — Q2 2020 Earnings Presentation
23 slides from Ecovyst's earnings presentation, Jul 30, 2020
Slide 1: Second Quarter 2020 Investor Presentation
Second Quarter 2020 July 30, 2020 – 11:00 AM ET INVESTOR PRESENTATION
Slide 2: Legal Disclaimer
LEGAL DISCLAIMER Forward-Looking Statements Some of the information contained in this presentation, the conference call during which this presentation is reviewed and any discussions that follow constitutes “forward-looking statements”. Forward-looking statements can be identified by words such as “
Slide 3: Second Quarter 2020 Performance Marked by Multiple Achievements
SECOND QUARTER 2020 PERFORMANCE MARKED BY MULTIPLE ACHIEVEMENTS FOCUS AREA HIGHLIGHT ACHIEVEMENTS o Safety results improved by >65% from 1H 2019 Executing well and o Maintained business continuity and customers’ demonstrating resilience support OPERATIONAL & COMMERCIAL despite macro level headwinds
Slide 4: Demand Trends: Recovery Path Varies by End Use
DEMAND TRENDS: RECOVERY PATH VARIES BY END USE 2019 % TOTAL DEMAND TREND 2H 2020 BUSINESS END USE KEY PRODUCTS SALES1 Q2 2H 2020 EXPECTED DEMAND DRIVERS US gasoline demand improved ~ 70% by June Regeneration for Refining 15% from its low point in early April. Return to Gasoline Refining >90% of 2019
Slide 5: Second Quarter 2020 Financial Results
SECOND QUARTER 2020 FINANCIAL RESULTS Second Second % Quarter Quarter $ % Constant ($ in millions) 2020 2019 Change Change Currency Sales 359.5 431.7 (72.2) (16.7) (14.4) Adjusted EBITDA 113.0 132.5 (19.5) (14.7) (12.6) Adjusted EBITDA 28.2 28.1 10 bps Margin1 (%) o Results reflect impact of lower v
Slide 6: Refining Services
REFINING SERVICES Second Second % Quarter Quarter $ % Constant ($ in millions) 2020 2019 Change Change Currency Sales 90.4 117.3 (26.9) (22.9) (22.9) Adjusted EBITDA 35.0 42.8 (7.8) (18.2) (18.2) Adjusted EBITDA 38.7 36.5 220 bps Margin (%) o Regeneration services impacted by lower Q2 Change Factors
Slide 7: Catalysts
CATALYSTS Second Second % Quarter Quarter $ % Constant ($ in millions) 2020 2019 Change Change Currency Sales Silica Catalysts 25.2 20.9 4.3 20.6 23.9 Zeolyst JV 41.0 39.1 1.9 4.9 4.9 Adjusted EBITDA 25.3 29.6 (4.3) (14.5) (13.5) Adjusted EBITDA 38.2 49.4 (1120 bps) Margin1 (%) o Demand for chemical
Slide 8: Performance Materials
PERFORMANCE MATERIALS Second Second % Quarter Quarter $ % Constant ($ in millions) 2020 2019 Change Change Currency Sales 104.3 118.9 (14.6) (12.3) (11.0) Adjusted EBITDA 27.3 29.2 (1.9) (6.5) (5.1) Adjusted EBITDA 26.2 24.6 160 bps Margin (%) o North American highway safety striping Q2 Change Facto
Slide 9: Performance Chemicals
PERFORMANCE CHEMICALS Second Second % Quarter Quarter $ % Constant ($ in millions) 2020 2019 Change Change Currency Sales 142.6 177.8 (35.2) (19.8) (15.4) Adjusted EBITDA 34.0 41.2 (7.2) (17.5) (12.4) Adjusted EBITDA 23.8 23.1 70 bps Margin (%) o Sodium silicate volumes declined across multiple appl
Slide 10: Enhanced Financial Flexibility with Additional Refinancings
ENHANCED FINANCIAL FLEXIBLITY WITH ADDITIONAL REFINANCINGS 2020 Refinancing Actions Improvement Since IPO Debt Reduction o Term Loan – 25 bps reduction ($ in millions) o ABL – 25 bps reduction, $50 million ~770 upsize 2,703 o Senior Secured Notes – New $650 1,933 million Term Loan, 275 bps reduction
Slide 11: Reinitiating 2020 Financial Guidance and Raising Adjusted Free Cash Flow Outlook
REINITIATING 2020 FINANCIAL GUIDANCE AND RAISING ADJUSTED FREE CASH FLOW OUTLOOK Adjusted Free Cash Flow3 ($ in millions, 2019 2020 ($ in millions) except per share) Actual Outlook 155 Sales 1,567.1 1,430 – 1,4601 Adjusted EBITDA 474.3 410 – 425 166 145 134 Adjusted Free Cash Flow 166.2 145 – 1552 2
Slide 12: Continuing to Actively Reposition PQ's Portfolio for Higher Value
CONTINUING TO ACTIVELY REPOSITION PQ’S PORTFOLIO FOR HIGHER VALUE Key Reshape for higher growth while maintaining strong margins Portfolio Priorities Reduce non-core assets; Use cash to lower leverage to target range ~$30 million1 of cash generated from actions in 1H 2020: Cash Generation / Resource
Slide 13: Focused on Executing 2H Priorities
FOCUSED ON EXECUTING 2H PRIORITIES Continue to deliver top-quartile safety performance Navigate successfully through COVID-19 challenges protecting our people, customers and communities, while ensuring business continuity Maintain robust Adjusted EBITDA margin Deliver targeted $145 to $155 million o
Slide 14: Appendix
APPENDIX fe) PQ Corporation
Slide 15: Quarterly Segment Sales, Adjusted EBITDA and Margins
QUARTERLY SEGMENT SALES, ADJUSTED EBITDA AND MARGINS First Half 2020 and Year 2019 Six MonthsFor the Quarter Ended Three Months Ended Ended Three Months Ended Year Ended March 31, June 30, June 30, March 31, June 30, September December December ($ in millions except %, unaudited) 2020 2020 2020 2019
Slide 16: Sales and Adjusted EBITDA Major Change Factors
SALES AND ADJUSTED EBITDA MAJOR CHANGE FACTORS Quarter and Year-to-Date 2020 SALES Three months ended Six Months Ended June 30, 2020 June 30, 2020 Sales PQ Group Refining Performance Performance PQ Group Refining Performance Performance (in $ millions and %) Holdings Inc. Services Catalysts Material
Slide 17: Reconciliation of Net Income to Segment Adjusted EBITDA
RECONCILIATION OF NET INCOME TO SEGMENT ADJUSTED EBITDA First Half 2020 and Year 2019 Six Months Three Months Ended Ended Three Months Ended Year Ended March 31, June 30, June 30, March 31, June 30, September December December ($ in millions) 2020 2020 2020 2019 2019 30, 2019 31, 2019 31, 2019 Recon
Slide 18: Reconciliation of Quarterly Net Income to Adjusted Net Income and Adjusted Diluted EPS
RECONCILIATION OF QUARTERLY NET INCOME TO ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE First Half 2020 and Year 2019 Six Months Three Months Ended Ended Three Months Ended Year Ended March 31, June 30, June 30, March 31, June 30, September December December ($ in millions except share
Slide 19: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Descriptions to PQ Non-GAAP Reconciliations a) We use Adjusted EBITDA as a performance measure to evaluate our financial results. Because our Catalysts segment includes our 50% interest in the Zeolyst Joint Venture, we include an adjustment for our 50% p
Slide 20: Constant Currency Sales and Adjusted EBITDA
CONSTANT CURRENCY SALES AND ADJUSTED EBITDA Quarter and Year-to-Date 2020 Versus 2019 Three Months Six Months Three Months Ended Ended Six Months Ended Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Constant Constant Constant Constant Currency % As Currency % ($ in millions except %,
Slide 21: Adjusted Free Cash Flow
ADJUSTED FREE CASH FLOW Full Year 2017, 2018 and 2019 Full Year Full Year Full Year ($ in millions) 2019 2018 2017 Cash Flow from Operations before interest 401.9 377.5 364.5 and tax Less: Cash paid for taxes 17.4 23.8 29.2 Cash paid for interest1 116.8 105.1 170.1 Cash Flow from Operations 267.7 24
Slide 22: Adjusted Free Cash Flow
ADJUSTED FREE CASH FLOW Quarter and Year-to-Date 2020 and 2019 Q2 Q2 1H 1H ($ in millions) 2020 2019 2020 2019 Cash Flow from Operations before 95.9 72.4 130.7 127.3 interest and tax Less: Cash paid for taxes 4.1 3.9 14.4 8.3 Cash paid for interest1 34.2 35.3 54.2 59.0 Cash Flow from Operations 57.6
Slide 23: | c ) }) PQ Corporation
| c ) }) PQ Corporation yn Na 77 \ ~~ a> al WN a .——— 7