Suncoke Energy, Inc. · NYSE:SXC
Suncoke Energy — Q1 2018 Earnings Presentation
21 slides from Suncoke Energy's earnings presentation, Apr 26, 2018
Slide 1: SunCoke Energy, Inc. Q1 2018 Earnings Conference Call
SunCoke Energy, Inc. Q1 2018 Earnings Conference Call April 26, 2018
Slide 2: Forward-Looking Statements
Forward-Looking Statements This slide presentation should be reviewed in conjunction with the First Quarter 2018 earnings release of SunCoke Energy, Inc. (SXC) and conference call held on April 26, 2018 at 11:00 a.m. ET. Except for statements of historical fact, information contained in this present
Slide 3: Q1 2018 Highlights
Q1 2018 Highlights Achieved strong safety and operating performance across coke and logistics fleet in line with expectations Strong Q1 ’18 Adj. EBITDA of $64.0M; ended quarter with ample liquidity position of >$370M of liquidity Began 2018 oven rebuild campaign at IHO; improved IHO production due t
Slide 4: Q1 2018 Financial Performance
Q1 2018 Financial Performance Q1 2018 Earnings Q1 ‘18 EPS of $0.13, up from $0.02 in ($/share) ($ in millions) the prior year quarter Earnings per Share Consolidated (1) (diluted) Adj. EBITDA • Strong cokemaking operating performance, partially offset by higher interest expense $0.13 $64.0 $55.6 Con
Slide 5: Adjusted EBITDA – Q1 '17 to Q1 '18
Adjusted EBITDA – Q1 ‘17 to Q1 ‘18 (1) Q1 ‘18 performance driven by solid domestic coke production, strong CMT volume, and lower corporate costs ($ in millions) $3.0 $64.0 ($4.0) $0.5 $8.9 $55.6 • $1.5M – Lapping of one- • $1.9M – Higher throughput time transaction costs volume at CMT • $5.8M – Stro
Slide 6: Domestic Coke Business Summary
Domestic Coke Business Summary Solid Q1 ‘18 cokemaking performance supports FY 2018 outlook Domestic Cokemaking Performance Delivered Adj. EBITDA/ton(1) of (Production, Kt) ~$56 on 962K tons production $57/ton $56/ton $53/ton • Strong yield performance; partially $46/ton $41/ton offset by planned ou
Slide 7: Logistics Business Summary
Logistics Business Summary Improved Q1 ‘18 performance driven primarily by significant increase in CMT volumes Delivered Q1 ‘18 Adj. EBITDA of Logistics Performance $13.6M (Tons Handled, Kt) $35.1M • Solid volumes due to continued $13.1M $10.0M $12.6M $13.6M favorable coal export market dynamics 5,7
Slide 8: Q1 2018 Liquidity
Q1 2018 Liquidity Maintain strong consolidated liquidity of >$370M, including ~$180M of SXC standalone liquidity (Consolidated) Q1 ‘18 Q4 ‘17 Total Debt $887M $887M (1) Gross Leverage 3.58x 3.78x ($15.4) $57.3 ($3.4) ($10.6) $147.0 • $7.3M Granite City ($1.1) Consolidated $120.2 Remediation CapEx Re
Slide 9: SXC Capital Priorities
SXC Capital Priorities SXC maintains significant financial flexibility and will generate positive CF in 2018 SXCP’s BoD recently declared modified capital allocation policy, which reduced quarterly distributions to $0.40/unit, or $1.60/unit annually • SXCP will use savings to replenish cash and redu
Slide 10: 2018 Key Initiatives
2018 Key Initiatives Deliver Operations Excellence and Optimize Asset Base • Drive strong operational & safety performance while optimizing asset utilization Complete 2018 Indiana Harbor Oven Rebuild Campaign • Complete 67 planned A-battery oven rebuilds and deliver near-breakeven FY ‘18 Adj. EBITDA
Slide 11: Questions
QUESTIONS tt SunCoke Energy*
Slide 12: Investor Relations
Investor Relations 630-824-1907 www.suncoke.com
Slide 13: Appendix
APPENDIX tt SunCoke Energy*
Slide 14: Definitions
Definitions Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted for any loss (gain) on extinguishment of debt, impairments and/or changes to our contingent consideration liability related to our acquisition of CMT. EBITDA and Adjusted EBITDA
Slide 15: Reconciliation to Adjusted EBITDA
Reconciliation to Adjusted EBITDA ($ in millions) Q1 '17 Q2 '17 Q3 '17 Q4 '17 FY '17 Q1 '18 Net cash provided by operating activities $ 29.5 $ 24.9 $ 73.9 $ 20.2 $ 148.5 $ 57.3 Depreciation, depletion and amortization expense 33.3 33.3 30.6 31.0 128.2 32.9 (1) Loss / (gain) on extinguishment of debt
Slide 16: 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 Corporate ($ in millions, except per ton data) Coke Brazil Coke Logistics and Other(1) Consolidated Q1 2018 Adjusted EBITDA $54.3 $4.7 $13.6 ($8.6) $64
Slide 17: Balance Sheet & Debt Metrics
Balance Sheet & Debt Metrics As of 03/31/2018 Balance SXC Attributable Attributable Consolidated to SXCP ($ in millions) to SXC Cash 147 42 106 Available Revolver Capacity 227 153 74 Total Liquidity 374 195 179 Gross Debt (Long and Short-term) 887 842 45 Net Debt (Total Debt less Cash) 740 801 (61)
Slide 18: 2018 Guidance Summary
2018 Guidance Summary Guidance remains unchanged from January 2018 announcement 2018 2017 Guidance Results Metric (published Jan. ‘18) (1) Adjusted EBITDA Consolidated $234.7M $240M – $255M Attrib. to SXC $148.3M $160M – $171M (2) Capital Expenditures $74.5M ~$95M Domestic Coke Production 3.86 Mt ~3
Slide 19: 2018 Capital Expenditures
2018 Capital Expenditures 2017 CapEx ($ in millions) SXC SXCP Consolidated Ongoing (ex. IHO rebuilds) $6 $19 $25 IHO Oven Rebuild Initiative 30 0 30 Total Ongoing CapEx(1) $36 $19 $55 Other / Expansion 0 1 1 Environmental Project (Gas Sharing) 0 18 18 Total CapEx $36 $38 $74 2018 Expected CapEx ($ i
Slide 20: 2018E Guidance Reconciliation
2018E Guidance Reconciliation 2018E 2018E ($ in millions) Low High Net cash provided by Operating activities $150 $165 Depreciation and amortization expense (137) (129) Changes in working capital and other 22 14 Net Income $35 $50 Depreciation and amortization expense 137 129 Interest expense, net 6
Slide 21: Thermal Coal Export Profitability
Thermal Coal Export Profitability Solid API2 benchmark price should continue to support CMT ILB producers’ competitiveness in maintaining viable exports $86 $5 ($8) Believe ILB export thermal ($13) solidly profitable at Q1 ‘18 ($8) API2 benchmark pricing of ~$86/t ($21) $41 • Based on average ILB ca