Graftech International Ltd. · NYSE:EAF
Graftech International — Q3 2023 Earnings Presentation
19 slides from Graftech International's earnings presentation, Nov 3, 2023
Slide 1: Q3 2023 Results
Q3 2023 Results November 3, 2023 NYSE: EAF www.graftech.com
Slide 2: Today's Presenters
Today’s Presenters Marcel Kessler Jeremy Halford Tim Flanagan Chief Executive Officer and Executive Vice President, Chief Financial Officer, President Chief Operating Officer Senior VP Finance and Treasurer 2
Slide 3: 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 4: Key Discussion Topics
Key Discussion Topics 1 Results and near-term outlook reflect persistent softness in commercial environment 2 GrafTech is well-equipped to manage the current environment 3 Taking actions to optimally position GrafTech to benefit from industry tailwinds 4
Slide 5: Prioritizing Safety
Prioritizing Safety Total Recordable Incident Rate (“TRIR”)(1) 0.95 0.94 0.51 0.49 0.41 2019 2020 2021 2022 Q3 YTD 2023 (1) TRIR measured per 200,000 hours worked. 5
Slide 6: Steel Industry Trends
Steel Industry Trends ▪ Steel industry production remains constrained by global economic uncertainty ▪ Global steel production, excluding China, of 201 million tons in Q3 2023 versus 209 million tons in Q2 2023(1) Steel Capacity Utilization Rates(2) 78% 77% 76% 75% 72% 66% 68% 65% 64% 65% Q3 2022 Q4
Slide 7: Production and Sales
Production and Sales ▪ Q3 2023 production volume down 40%, sales volume down 32% and net sales down 48% compared to Q3 2022 ▪ Reflects industry-wide softness in demand for graphite electrodes ▪ Net sales decline further reflects shift in mix from LTA volume to non-LTA volume and lower weighted-avera
Slide 8: Earnings and Cash Flow
Earnings and Cash Flow (1) ▪ Net loss of $23 million, or $0.09 per share , for a net loss margin of 14% (2) ▪ Adjusted EBITDA of $1 million and adjusted EBITDA margin(3) of 1% (2) ▪ Net cash provided by operating activities of $51 million and adjusted free cash flow of $43 million Adjusted Earnings
Slide 9: Balance Sheet Strength and Financial Flexibility
Balance Sheet Strength and Financial Flexibility ▪ As of September 30, 2023: (1) o Gross debt to adjusted EBITDA of 7.8x; Net debt to adjusted EBITDA(1) of 6.4x o Liquidity of $285 million reflects financial covenant that limits borrowing availability under the revolver ▪ Do not anticipate the need
Slide 10: Taking Actions to Benefit from Industry Tailwinds
Taking Actions to Benefit from Industry Tailwinds Estimated Electric Arc Furnace (“EAF”) Capacity Additions Implied Needle Coke Demand for and Incremental Graphite Electrode Demand Electric Vehicle (“EV”) Market (2023 to 2030) (thousands of MT)(3) 170+ million MT / year ~200 thousand MT / year 2,778
Slide 11: Why GrafTech?
Why GrafTech? An Industry Leader in the Production of High-Quality Graphite Electrodes ▪ Graphite electrodes are essential to the operation of an EAF ▪ Reflecting environmental benefits, growth in EAF steelmaking expected to continue outpacing integrated steelmaking Sustainable Competitive Advantage
Slide 12: Non-GAAP Financial Measures
Non-GAAP Financial Measures In addition to providing results that are determined in accordance with GAAP, we have provided certain financial measures that are not in accordance with GAAP. EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net (loss) income, adjusted (loss) earnings per share,
Slide 13: Reconciliation to Adjusted Net (Loss) Income
Reconciliation to Adjusted Net (Loss) Income Three Months Ended Sept 30, June 30, Mar 31, Dec 31, Sept 30, ($ in thousands) 2023 2023 2023 2022 2022 Net (loss) income $ (22,621) $ (7,851) $ (7,369) $ 50,331 $ 93,451 Adjustments, pre-tax: Pension and OPEB plan expenses (benefits)(1) 914 899 918 (8,99
Slide 14: Reconciliation to Adjusted (Loss) Earnings Per Share
Reconciliation to Adjusted (Loss) Earnings Per Share Three Months Ended Sept 30, June 30, Mar 31, Dec 31, Sept 30, 2023 2023 2023 2022 2022 (Loss) earnings per share $ (0.09) $ (0.03) $ (0.03) $ 0.20 $ 0.36 Adjustments per share, pre-tax: Pension and OPEB plan expenses (benefits)(1) - - 0.01 (0.04)
Slide 15: Reconciliation to Adjusted EBITDA
Reconciliation to Adjusted EBITDA Three Months Ended Sept 30, June 30, Mar 31, Dec 31, Sept 30, ($ in thousands) 2023 2023 2023 2022 2022 Net (loss) income $ (22,621) $ (7,851) $ (7,369) $ 50,331 $ 93,451 Add: Depreciation and amortization 16,954 15,322 10,777 13,788 13,262 Interest expense 15,719 1
Slide 16: Reconciliation to Net Debt and Calculation of Debt to Adjusted EBITDA
Reconciliation to Net Debt and Calculation of Debt to Adjusted EBITDA Sept 30, Dec 31, ($ in thousands) 2023 2022 Long-term debt $ 924,375 $ 921,803 Long-term debt, current maturities 127 124 Add: Unamortized debt discount and issuance costs (25,764) (12,049) Total gross debt 950,266 933,976 Less: C
Slide 17: Reconciliation to Free Cash Flow and Adjusted Free Cash Flow
Reconciliation to Free Cash Flow and Adjusted Free Cash Flow Three Months Ended Sept 30, June 30, Mar 31, Dec 31, Sept 30, ($ in thousands) 2023 2023 2023 2022 2022 Net cash provided by (used in) operating activities $ 51,495 $ (9,024) $ 24,798 $ 50,023 $ 68,166 Capital expenditures (8,498) (14,518)
Slide 18: Reconciliation to Cash Cost of Goods Sold per MT
Reconciliation to Cash Cost of Goods Sold per MT Three Months Ended Nine Months Ended Year Ended Sept 30, June 30, Mar 31, Dec 31, Sept 30, Sept 30, Sept 30, Dec 31, ($ in thousands, except per MT amounts) 2023 2023 2023 2022 2022 2023 2022 2022 Cost of goods sold $ 157,603 $ 157,216 $ 112,645 $ 163
Slide 19: GrafTech International Ltd. contact details
GrafTech International Ltd. 982 Keynote Circle Brooklyn Heights, Ohio 44131 Ticker: EAF (NYSE) Website: www.graftech.com Contact: Michael Dillon Email: investor.relations@graftech.com Phone: 1.216.676.2000
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