Suncoke Energy, Inc. · NYSE:SXC
Suncoke Energy — Goldman Sachs Eighth Annual Leveraged Finance and Credit Conference 2023
35 slides from Suncoke Energy's conference presentation, May 2023
Slide 1: SunCoke Energy Investor Presentation
SunCoke Energy Investor Presentation May 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements 2 This presentation contains “forward-looking statements” (as defined in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended). Forward-looking statements often may be identified by the use of such words a
Slide 3: SunCoke Overview
SunCoke Overview 3 Largest independent coke producer in North America with best-in-class operations in Cokemaking and Logistics Business Segments Key Financial Highlights Cokemaking Consolidated Adjusted EBITDA(1) • 4.2M tons of furnace coke capacity with capability to produce both foundry and blast
Slide 4: Advantaged Assets Driving Value Creation
Advantaged Assets Driving Value Creation 4 Advantaged Assets with Steady Cash Flow Balanced Capital Strong Balance Sheet Leading Market Positions Generation Allocation Strategy • Industry leading • No material debt • Supported by • Significant value cokemaking and maturities until 2026 contracts und
Slide 5: Strategically Located Network of Assets
Strategically Located Network of Assets 5 North American Operations Cokemaking Advantages Legend • Domestic assets strategically located to serve domestic blast furnaces as well as 1 Jewell Coke ME export market 2 Indiana Harbor VT MN NH – Three facilities co-located with customer 3 Haverhill I & II
Slide 6: Cokemaking Overview
Cokemaking Overview
Slide 7: Durable Model with Strong Market Dynamics
Durable Model with Strong Market Dynamics 7 7 Stable Long-term Favorable Long-term Coke Superior Asset Characteristics Business Model Supply/Demand Dynamics • Steady cash flow • Newest fleet of • Any increased domestic generation cokemaking facilities and steel demand, blast equipment in the industr
Slide 8: Long-term, Contracted Earnings Stream
Long-term, Contracted Earnings Stream 8 8 Long-term, take-or-pay contracts generate stable cash flow and insulate business from industry cyclicality Take-or-Pay Contract Provisions Contract Observations General Provisions • Customers required to take the contract-maximum coke • Take-or-pay nature pr
Slide 9: Shrinking Coke Supply Base Creates Opportunity
Shrinking Coke Supply Base Creates Opportunity 9 Expect aging by-product battery closures to continue, creating opportunity for SunCoke Aging Cokemaking Facilities(1) Aging Capacity Creates Opportunity Average Age % of US and Canada Coke • Closures driven by combination of deteriorating facilities C
Slide 10: SunCoke's Superior Assets Well Positioned for Long Term
SunCoke’s Superior Assets Well Positioned for Long Term 10 Value Proposition Competitive Advantage • Efficient operating cost structure and capital • SunCoke’s average asset age is ~23 years investment requirements Superior Asset Age compared to ~45 years for all other US/Canadian capacity • Opportu
Slide 11: Heat Recovery vs By-Product Design Comparison
Heat Recovery vs By-Product Design Comparison 11 SunCoke Heat Recovery Traditional By-Product Steam Gas (COG) Light Oil Water Tar Air VM Air Air Natural Gas (or other source) SunCoke Heat Recovery Traditional By-Product Pressurization Negative Pressure Positive Pressure Air Emissions MACT Standard f
Slide 12: Environmental Signature – Best Available Technology
Environmental Signature – Best Available Technology 12 SunCoke’s operations minimize environmental impact and offer the best available technology for an important input to the steel industry SunCoke’s CO2e Emissions SunCoke’s innovative, superior heat recovery technology sets the 0.14 0.14 0.12 0.13
Slide 13: Greenhouse Gases
Greenhouse Gases 13 SunCoke primarily supplies coke to the least carbon intensive steelmaking industry in the world. Comparison of Carbon Intensity of the Top 5 Global Steel Steel Industry CO2 Emissions by Country(1) Producing Countries (tons CO2/ton Steel)(1) Rest of the World 2.2 Ukraine China 1.9
Slide 14: Safety Excellence
Safety Excellence 14 SunCoke’s industry leading safety performance sets the standard for safe cokemaking SunCoke’s Total Recordable Incident Rate(1) SunCoke’s 2022 TRIR 0.69 0.85 0.81 0.76 Comparable Industry Rates (2021 BLS Data) 0.69 Iron and Steel Mills 2.8 Other Petroleum and Coal 4.3 Products (
Slide 15: Recent Growth/Diversification Opportunities
Recent Growth/Diversification Opportunities 15 Successful entry into profitable export and foundry coke markets; Non-binding LOI to produce granulated pig iron provides opportunity to further diversify and enter the metallics market Foundry Coke Export Coke Granulated Pig Iron • Foundry coke is a di
Slide 16: Logistics Overview
Logistics Overview
Slide 17: Advantaged Logistics Facilities
Advantaged Logistics Facilities 17 Strategically located facilities with multimodal connectivity • Gulf Coast facility with direct rail access and cape size loading capabilities • Annual outbound throughput capacity of ~15Mt and storage capacity of ~1.5Mt • Largest export terminal on the U.S. Gulf C
Slide 18: Strategic Network of Low Cost Facilities
Strategic Network of Low Cost Facilities 18 Well Positioned • Strategically located assets with access to barge, rail and truck Domestic Logistics • Provide key logistics services for various metallurgical and thermal coal producers and Facilities consumers • Only dry-bulk, rail-serviced terminal on
Slide 19: Q1 2023 Financials and 2023 Guidance
Q1 2023 Financials and 2023 Guidance
Slide 20: Q1 2023 Financial Performance
Q1 2023 Financial Performance 20 Q1 2023 Earnings Review • Q1 '23 EPS of $0.19, down $0.16 from the ($/share) ($ in millions) prior year quarter Diluted EPS Adjusted EBITDA(1) Primarily driven by lower contribution margin -$16.7M on export coke sales -$0.16 (1) • Consolidated Adjusted EBITDA of $6
Slide 21: Domestic Coke Business Summary
Domestic Coke Business Summary 21 Lower export coke sales contribution margin driving Domestic Coke results Domestic Coke Performance • Delivered Adjusted EBITDA of (Coke Production, Kt) $60.4M in Q1 '23 vs $76.0M in $76.0M $76.6M Q1 '22 $64.3M Domestic Coke fleet continues to operate $60.4M at fu
Slide 22: Logistics Business Summary
Logistics Business Summary 22 Sustained customer demand continues to drive healthy Logistics performance Logistics Performance • Logistics segment contributed (Tons Handled, Kt) $13.5M to Q1 '23 Adjusted EBITDA $13.5M Favorable logistics performance primarily $12.5M $12.9M driven by higher volumes
Slide 23: Q1 2023 Liquidity
Q1 2023 Liquidity 23 Maintained strong liquidity position of ~$398M (Consolidated) Q1 '23 Revolver Total Debt $543M Availability: $315.0M Gross Leverage(1) 1.93x Net Leverage(1) 1.64x ($ in millions) ($0.8) $30.2 ($22.6) $90.0 ($6.7) ($6.8) $83.3 Impacted by changes Dividend of in working capital $0
Slide 24: 2023 Guidance Summary
2023 Guidance Summary 24 Expect 2023 Consolidated Adjusted EBITDA of $250M - $265M; 2023 Free Cash Flow of $105M - $120M 2023 Metric Guidance (1) Adjusted EBITDA Consolidated $250M - $265M Domestic Coke EBITDA $234M - $242M Logistics EBITDA $47M - $50M (2) Domestic Coke Sales ~4M tons (3) $59 - $61/
Slide 25: Appendix
APPENDIX )
Slide 26: Non-GAAP Financial Measures Definitions
26 NON-GAAP FINANCIAL MEASURES In order to assist readers in understanding the core operating results that our management uses to evaluate the business, we describe our non- GAAP measures referenced in this presentation below. In addition to U.S. GAAP measures, this presentation contains certain non
Slide 27: Balance Sheet & Debt Metrics
Balance Sheet & Debt Metrics 27 As of 3/31/2023 As of 12/31/2022 Cash $ 83 $ 90 Available Revolver Capacity $ 315 $ 315 Total Liquidity $ 398 $ 405 Gross Debt (Long and Short-term) $ 543 $ 544 Net Debt (Total Debt less Cash) $ 460 $ 454 LTM Adjusted EBITDA $ 281 $ 298 Gross Debt / LTM Adjusted EBITD
Slide 28: 2023 Guidance Reconciliation
2023 Guidance Reconciliation 28 ($ in millions) Low High Net Income $59 $76 Depreciation and amortization expense 136 132 Interest expense, net 31 29 Income tax expense 24 28 Adjusted EBITDA (Consolidated) $250 $265 Adjusted EBITDA attributable to noncontrolling interest(1) (9) (9) Adjusted EBITDA a
Slide 29: SXC FCF/Share Reconciliation
SXC FCF/Share Reconciliation 29 2023E ($ in millions except per share amounts) Low End High End Net Income $59 $76 Depreciation and amortization expense 136 132 Interest expense, net 31 29 Income tax expense 24 28 Adjusted EBITDA $250 $265 Cash interest (28) (26) Cash taxes (12) (16) Total capex (95
Slide 30: Reconciliation to Adjusted EBITDA and Adjusted EBITDA attributable to SXC
Reconciliation to Adjusted EBITDA and Adjusted EBITDA 30 attributable to SXC ($ in millions) Q1 '22 Q2 '22 Q3 '22 Q4 '22 FY '22 Q1 '23 Net income (loss) attributable to SunCoke Energy, Inc. $ 29.5 $ 18.0 $ 41.4 $ 11.8 $ 100.7 $ 16.3 Net income attributable to noncontrolling interests 1.1 1.0 1.1 1.0
Slide 31: Adjusted EBITDA and Adjusted EBITDA per ton
Adjusted EBITDA and Adjusted EBITDA per ton 31 Reconciliation of Segment Adjusted EBITDA and Adjusted EBITDA per Ton Domestic Corporate Brazil Coke Logistics Consolidated ($ in millions, except per ton data) Coke and Other(1) Q1 2023 Adjusted EBITDA $60.4 $2.4 $13.5 ($9.2) $67.1 Sales Volume (thousa
Slide 32: Steel Production Input Cycle
Steel Production Input Cycle 32 site) Source: Global Efficiency Intelligence, November 2019 report: “An International Benchmarking of Energy and CO2 Intensities”
Slide 33: SunCoke's Cokemaking Process
SunCoke’s Cokemaking Process 33
Slide 34: Foundry Coke Overview
Foundry Coke Overview 34 Foundry coke customers focus on fundamentally different parameters than blast furnace coke customers with respect to coke size and quality Foundry coke is used in cupolas to produce casted iron products for the Construction, Industrial, and Automotive Industries
Slide 35: SunCoke Energy
3 SunCoke Energy”
SunCoke Energy — Goldman Sachs Eighth Annual Leveraged Finance and Credit Conference 2023 on 6ix