Ecovyst Inc. · NYSE:ECVT
Ecovyst — PQ Group Holdings — Q1 2018 Earnings Presentation
23 slides from Ecovyst's earnings presentation, May 10, 2018
Slide 1: First Quarter 2018 Investor Presentation
First Quarter 2018 May 10, 2018 – 11:00 AM ET INVESTOR PRESENTATION 1
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: 2018 – Positioned for Growth and Significant Cash Flow
2018 – POSITIONED FOR GROWTH AND SIGNIFICANT CASH FLOW At least $50 million of debt paydown targeted in 2H Deliver industry leading financial results o Sales growth of 5% to 7% o Adjusted EBITDA growth of 4% to 8% with sustained high margins o Free cash flow of $120 million to $140 million Consisten
Slide 4: First Quarter 2018 Highlights
FIRST QUARTER 2018 HIGHLIGHTS A solid start to the year Strong financial results led by double-digit sales growth o Sales up 10% and Adjusted EBITDA up 7% o Adjusted EBITDA Margin of 26.7% Capital structure further strengthened with Term Loan refinancing o ~ $14 million in annualized cash interest s
Slide 5: First Quarter 2018 Financial Results
FIRST QUARTER 2018 FINANCIAL RESULTS Growth from both business segments First First Quarter Quarter % ($ in millions) 2018 2017 Change Sales 366.2 332.9 10% Adjusted EBITDA 107.9 101.2 7% Adjusted EBITDA Margin1 26.7% 27.7% (100 bps) o Growth drivers driven by strong demand from PQ Group performance
Slide 6: Environmental Catalysts & Services Performance Highlights
ENVIRONMENTAL CATALYSTS & SERVICES PERFORMANCE HIGHLIGHTS Solid demand from key markets First First Quarter Quarter % ($ in millions) 2018 2017 Change Sales PQ 117.2 111.3 5% Zeolyst JV 38.3 32.7 17% Adjusted EBITDA 58.4 56.4 4% Adjusted EBITDA Margin1 37.6% 39.2% (160 bps) o Sales higher on demand
Slide 7: Performance Materials & Chemicals Performance Highlights
PERFORMANCE MATERIALS & CHEMICALS PERFORMANCE HIGHLIGHTS Results benefited from organic and inorganic growth First First Quarter Quarter % ($ in millions) 2018 2017 Change Sales 249.8 222.6 12% Adjusted EBITDA 57.2 52.5 9% Adjusted EBITDA Margin 22.9% 23.6% (70 bps) o Sales rose on increased demand
Slide 8: Debt Schedule
DEBT SCHEDULE Flexibility to pay down debt and interest rate exposure mitigated DEBT MATURITY SCHEDULE Capitalization Q1 2018 $1,500 $1,475.1 Debt: ($ in millions) $1,350 ABL Revolving Credit Facility 30.0 $1,200 New USD First Lien Term Loan 1,263.8 $1,050 First Lien Secured Notes 625.0 $900 Million
Slide 9: 2018 Guidance
2018 GUIDANCE Expected Free Cash Flow of $120 Million to $140 Million 2017 2018 Change from ($ in millions except %) Actual Outlook 2017 Sales 1,472.1 1,545 – 1,575 5% – 7% Adjusted EBITDA 453.3 470 – 490 4% – 8% Free Cash Flow (24.4) 120 – 140 ~145 – 165 Interest Expense 179.0 120 – 130 (~50 – 60)
Slide 10: PQ Investment Highlights
PQ INVESTMENT HIGHLIGHTS Leading Global Producer of Specialty Catalysts & Services, Specialty Materials & Chemicals #1 and #2 positions in nearly all product lines GDP+ growth Input cost small as % of customer total product cost High margin environmentally friendly applications Track record of innov
Slide 11: Appendix
APPENDIX re) PQ Corporation
Slide 12: Sales and Adjusted EBITDA Major Change Factors
SALES AND ADJUSTED EBITDA MAJOR CHANGE FACTORS First Quarter 2018 SALES Three Months Ended March 31, 2018 Environmental Sales PQ Group Catalysts Performance Materials (in $ millions and %) Holdings Inc. & Services & Chemicals Sales: $ % $ % $ % Volume 9.1 2.7 (1.2) (1.1) 10.1 4.5 Price/Mix 11.0 3.3
Slide 13: Cash Flow
CASH FLOW Improved ~$15 million Y-on-Y First First Quarter Quarter ($ in millions) 2018 2017 Cash Flow from Operations before interest and tax 43.0 37.6 Less: Cash Paid for Taxes 4.4 9.3 Cash Paid for Interest 16.6 21.6 Cash Flow from Operations 22.0 6.7 Less: Capital Investments1 33.3 32.4 Free Cas
Slide 14: Demonstrated Strong Financial Performance Across Macroeconomic Cycles
DEMONSTRATED STRONG FINANCIAL PERFORMANCE ACROSS MACROECONOMIC CYCLES Stable and improving margins Adjusted EBITDA and Adjusted EBITDA Margin (%)1,2,3 ($ in millions except %) o Long term EBITDA CAGR of 7.5% o Attractive, stable margins o Steady margin expansion a result of high value added specialt
Slide 15: Quarterly Segment Sales and Adjusted EBITDA
QUARTERLY SEGMENT SALES AND ADJUSTED EBITDA Year 2017 and Q1 2018 For the Quarter Ended Three Months Ended Year Ended March 31, March 31, June 30, September 30, December 31, December 31, ($ in millions except %) 2018 2017 2017 2017 2017 2017 Sales: Silica Catalysts 16.5 17.1 20.1 15.1 23.0 75.3 Refi
Slide 16: Quarterly Net Income to Adjusted Net Income and Adjusted Diluted EPS
QUARTERLY NET INCOME TO ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE Q1 2018 and Year 2017 Three Months Ended Three Months Ended March 31, March 31, June 30, September 30, December 31, Year Ended For the Quarter Ended December 31, ($ in millions except per share data) 2018 2017 2017 2
Slide 17: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Net Income (Loss) to Segment Adjusted EBITDA Three Months Ended Three Months Ended March 31, March 31, June 30, September 30, December 31, Year Ended December 31, ($ in millions) 2018 2017 2017 2017 2017 2017 Reconciliation of net income (loss) attributa
Slide 18: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Descriptions to PQ Non-GAAP Reconciliations Descriptions to PQ Non-GAAP Reconciliations a) We use Adjusted EBITDA, Adjusted Net Income and Adjusted Diluted EPS as performance measures to evaluate our financial results. Because our environmental catalysts
Slide 19: 2005 – 2017 Reconciliations
2005 – 2017 RECONCILIATIONS Legacy Business - Sales & Adjusted EBITDA Year Ended December 31, 2015 2016 Pro Pro ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 forma 3 forma 3 2017 Reconciliation of sales and adjusted EBITDA Legacy PQ Sales 1 635.3 708.6 775.0 977.0 1,009.9 1,087.9
Slide 20: 2005 – 2014 Reconciliations for Adjusted EBITDA and Margins
2005 – 2014 RECONCILIATIONS FOR ADJUSTED EBITDA AND MARGINS Legacy PQ1 - Net Income (Loss) to Adjusted EBITDA Reconciliation Year Ended December 31, ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Reconciliation of net income (loss) attributable to Legacy PQ to Adjusted EBITDA Net
Slide 21: 2005 – 2014 Reconciliations for Adjusted EBITDA and Margins
2005 – 2014 RECONCILIATIONS FOR ADJUSTED EBITDA AND MARGINS Legacy Eco Services1 - Net Income (Loss) to Adjusted EBITDA Reconciliation Year Ended December 31, 2014 2014 ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 Successor Predecessor Reconciliation of net income (loss) attributable
Slide 22: 2015 – 2017 Reconciliations for Adjusted EBITDA and Margins
2015 – 2017 RECONCILIATIONS FOR ADJUSTED EBITDA AND MARGINS Post-Business Combination PQ - Net Income (Loss) to Adjusted EBITDA Reconciliation Year Ended December 31, 2015 2016 ($ in millions) Pro forma 1 Pro forma 1 2017 Reconciliation of net income (loss) attributable to PQ Group Holdings Inc. to
Slide 23: PQ Corporation
Te), PQ Corporation