Ecovyst Inc. · NYSE:ECVT
Ecovyst — PQ Group Holdings — Investor Presentation (August 2018)
26 slides from Ecovyst's investor presentation, August 2018
Slide 1: Investor Presentation
INVESTOR PRESENTATION Investor Meetings – August 2018
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: PQ Investment Highlights
PQ INVESTMENT HIGHLIGHTS Leading Global Producer of Specialty Catalysts, Materials, Chemicals & Services Mid to High Leading Adjusted Proven Performance Strong Free Cash Single Digit EBITDA Margins in all Macro Flows to Delever Growth Economic Cycles and Grow 38% 24% 1 LTM Q2 2018 Adjusted EBITDA ma
Slide 4: Diverse Portfolio
DIVERSE PORTFOLIO #1 and #2 positions in nearly all product lines 2017 SALES AND ZEOLYST JV TOTAL NET SALES: BY END USE1 2017 SALES GROWTH BY END USE 1 Natural Resources (EC&S) Fuels & Emissions Fuels & Emissions Controls + 10% Controls (EC&S) 8% Industrial & 21% Highway Safety & Construction + 8% P
Slide 5: 2018 – Positioned for Growth and Significant Cash Flow
2018 – POSITIONED FOR GROWTH AND SIGNIFICANT CASH FLOW On track in 2H18 to meet Free Cash Flow target of $120 million to $140 million Deliver industry-leading financial results o Sales growth of 5% to 7% o Adjusted EBITDA growth of 4% to 8% with sustained high margins Consistent capital allocation o
Slide 6: Demonstrated Strong Financial Performance Across Macroeconomic Cycles
DEMONSTRATED STRONG FINANCIAL PERFORMANCE ACROSS MACROECONOMIC CYCLES Stable and improving margins Adjusted EBITDA and Adjusted EBITDA Margin (%)1,2,3 ($ in millions except %) o Long-term EBITDA CAGR of ~7% o Attractive, stable margins o Steady margin expansion a result of high value added specialty
Slide 7: Debt Schedule
DEBT SCHEDULE Flexibility to pay down debt; mitigated interest rate exposure DEBT MATURITY SCHEDULE Capitalization Q2 2018 $1,500 $1,472.0 Debt: ($ in millions) $1,350 ABL Revolving Credit Facility 32.0 $1,200 New USD First Lien Term Loan 1,260.7 $1,050 First Lien Secured Notes 625.0 $900 Millions T
Slide 8: Solid Pillars for Growth and Sustainable Margins
SOLID PILLARS FOR GROWTH AND SUSTAINABLE MARGINS Global environmental trends and regulations expected to drive growth of 2X – 3X GDP Performance Chemicals The Solid Foundation. Multiple Growth Drivers 1 2 3 4 Regeneration Silica Performance Zeolyst Services: Catalysts: Materials: Joint Venture: Move
Slide 9: Refining Services
#1 U.S. Supplier REFINING SERVICES 1 PQ best positioned to serve new capacity expansions in Gulf Gulf Coast Sulfuric Acid Regeneration Demand Planned alkylation expansions, (000 Tons Per Year) all Gulf Coast, Sulfuric based 2,200 Expansions driven by: CA GR o Growth in premium share % –5 ~4 of total
Slide 10: Silica Catalysts
#2 primary global supplier SILICA CATALYSTS 2 PQ is aligned with key licensors for new silica-based capacity PE Capacity by Licensor ~50% of the current capacity 120 uses silica catalyst ~30 announcements of new CAG R global capacity to come on 90 ~4 % line between 2018–2021 o Predominantly in Gulf
Slide 11: Performance Materials
#1 U.S. Highway Safety PERFORMANCE MATERIALS 3 Beads Supplier Product adjacency expected to accelerate growth up to 3x GDP ThermoDrop® Performance Value Proposition ü Higher yields ü Lower labor ü Increased profits No dust Continuous operations Total addressable market of ~$500 million Approved in 2
Slide 12: Zeolyst Joint Venture
#1 global supplier ZEOLYST JOINT VENTURE 4 of emissions catalysts Share growth with increased fuel and emissions regulations Global Heavy Duty Diesel (HDD) Catalyst Systems Market On Road: Marine Global environmental standards for Sales ($ in millions) Non-Road 19-56kW+ HDD progressively tightening
Slide 13: PQ Versus Peers – Top Quartile Metrics
PQ VERSUS PEERS – TOP QUARTILE METRICS Valuation Disconnect Median: 29.5% 2018E EBITDA Margin Median: 21.9% 2017 Tangible ROIC1 Median: 12.8% 2017–2018E EBITDA Growth Median: 15.3% 2017–2018E EPS Growth Median: 2.9% 2018E FCF Yield Median: 11.3x TEV / 2018E EBITDA Source: CapIQ consensus data as of
Slide 14: Supplementary Information
SUPPLEMENTARY INFORMATION te) PQ Corporation
Slide 15: 2018 Guidance Reaffirmed: Sales, Adjusted EBITDA, Free Cash Flow
2018 GUIDANCE REAFFIRMED: SALES, ADJUSTED EBITDA, FREE CASH FLOW 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
Slide 16: Refining Services – Supply Infrastructure
REFINING SERVICES – SUPPLY INFRASTRUCTURE Regeneration Services business is the leading supplier with key competitive position in Gulf and California 43 Refineries using Sulfuric Acid Alkylation Deliveries by Shipping Mode > 65% of alky capacity located in West Coast and Gulf Coast regions Dedicated
Slide 17: Quarterly Net Income to Adjusted Net Income and Adjusted Diluted EPS
QUARTERLY NET INCOME TO ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE Q2 2018 and Year 2017 Three Months Ended Six Months Ended LTM Ended Three Months Ended Year Ended March 31, June 30, For the Quarter June 30, EndedMarch 31, June 30, June 30, September 30, December 31, December 31, (
Slide 18: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Net Income (Loss) to Segment Adjusted EBITDA Three Months Ended Six Months Ended LTM Ended Three Months Ended Year Ended March 31, June 30, June 30, June 30, March 31, June 30, September 30, December 31, December 31, ($ in millions) 2018 2018 2018 2018 2
Slide 19: 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 as a performance measure to evaluate our financial results. Because our Environmental Catalysts and Services segment includes our 50% intere
Slide 20: Quarterly Segment Sales and Adjusted EBITDA
QUARTERLY SEGMENT SALES AND ADJUSTED EBITDA Year 2017 and Q2 2018 For the Quarter Ended Three Months Ended Six months Ended LTM Ended Three Months Ended Year Ended March 31, June 30, June 30, June 30, March 31, June 30, September 30, December 31, December 31, ($ in millions except %) 2018 2018 2018
Slide 21: 2005 – LTM 2018 Reconciliations
2005 – LTM 2018 RECONCILIATIONS Legacy Business – Sales & Adjusted EBITDA Year Ended December 31, 2015 2016 Pro Pro LTM Q2 ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 forma 3 forma 3 2017 2018 Reconciliation of sales and adjusted EBITDA Legacy PQ Sales 1 635.3 708.6 775.0 977.0
Slide 22: 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 23: 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 24: 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 25: 2017 Reconciliation
2017 RECONCILIATION Tangible ROIC Year Ended Year Ended December 31, December 31, ($ in millions) 2017 ($ in millions) 2017 Reconciliation of net income (loss) attributable to PQ Group Calculation of Return on Invested Capital (ROIC) Holdings Inc. to Segment Adjusted EBITA Net income (loss) attribut
Slide 26: Friendlier products for a cleaner, safer world
friendlier products for a cleaner, safer world
PQ Group Holdings — Investor Presentation (August 2018) on 6ix