Graftech International Ltd. · NYSE:EAF
Graftech International — Q4 2023 Earnings Presentation
18 slides from Graftech International's earnings presentation, Feb 14, 2024
Slide 1: Q4 2023 Results
Q4 2023 Results February 14, 2024 NYSE: EAF www.graftech.com
Slide 2: 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 3: Taking Actions in Response to Challenging Environment
Taking Actions in Response to Challenging Environment Key actions taken in 2023 to navigate headwinds: Aligned production volume with our outlook for graphite electrode demand Managed costs, capital expenditures and working capital levels Made targeted investments in our business Resulted in:
Slide 4: Cost Rationalization and Footprint Optimization Plan
Cost Rationalization and Footprint Optimization Plan 1 Indefinitely suspending most production activities at St. Marys 2 Reducing GrafTech’s overhead structure and expenses 3 Operating at reduced levels, as needed, to align production with demand Expected to result in annualized cost savings of appr
Slide 5: Prioritizing Safety
Prioritizing Safety Total Recordable Incident Rate (“TRIR”)(1) 0.95 0.94 0.61 0.51 0.49 2019 2020 2021 2022 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 2023 global steel production, excluding China, of 831 million tons was consistent with 2022 production levels(1) Production growth in India and Russia offset by production declines in Europe and
Slide 7: Production and Sales
Production and Sales Q4 2023 production volume down 17%, sales volume down 13% and net sales down 45% compared to Q4 2022 Sales volume decline reflects industry-wide softness in demand for graphite electrodes (1) Net sales decline further reflects shift in mix from LTA volume to non-LTA(1) vol
Slide 8: Earnings and Cash Flow
Earnings and Cash Flow Q4 2023 net loss of $217 million, or $0.85 per share(1) • Includes a goodwill impairment charge of $171 million and a lower of cost or market ("LCM") inventory valuation adjustment of $12 million (2) Q4 2023 adjusted EBITDA of negative $22 million, including the LCM invent
Slide 9: Balance Sheet Strength and Financial Flexibility
Balance Sheet Strength and Financial Flexibility Liquidity of $289 million as of December 31, 2023 reflects financial covenant that limits borrowing availability under the revolver We continue to have adequate liquidity in 2024 to navigate the persistent softness in the commercial environment Li
Slide 10: Our Optimism about the Long-term Prospects for GrafTech Remains Intact
Our Optimism about the Long-term Prospects for GrafTech Remains Intact Long-term tailwinds: Shift to electric arc furnace (“EAF”) steelmaking expected to continue driven by decarbonization efforts Graphite electrode demand growth anticipated driven by this ongoing transition Needle coke demand
Slide 11: Why GrafTech?
Why GrafTech? An Industry Leader in the Production of High-Quality Graphite Electrodes Graphite electrodes are essential to the operation of an EAF Reflecting environmental benefits, growth in EAF steelmaking expected to continue outpacing integrated steelmaking Sustainable Competitive Advantage
Slide 12: Non-GAAP Financial Measures
Non-GAAP Financial Measures In addition to providing results that are determined in accordance with GAAP, we have provided certain financial measures that are not in accordance with GAAP. EBITDA, adjusted EBITDA, adjusted net (loss) income, adjusted (loss) earnings per share, free cash flow, adjuste
Slide 13: Reconciliation to Adjusted Net (Loss) Income
Reconciliation to Adjusted Net (Loss) Income Three Months Ended Dec 31, Sept 30, June 30, Mar 31, Dec 31, ($ in thousands) 2023 2023 2023 2023 2022 Net (loss) income $ (217,409) $ (22,621) $ (7,851) $ (7,369) $ 50,331 Adjustments, pre-tax: Pension and OPEB plan expenses (benefits)(1) 3,578 914 899 9
Slide 14: Reconciliation to Adjusted (Loss) Earnings Per Share
Reconciliation to Adjusted (Loss) Earnings Per Share Three Months Ended Dec 31, Sept 30, June 30, Mar 31, Dec 31, 2023 2023 2023 2023 2022 (Loss) earnings per share $ (0.85) $ (0.09) $ (0.03) $ (0.03) $ 0.20 Adjustments per share, pre-tax: Pension and OPEB plan expenses (benefits)(1) 0.01 - - 0.01 (
Slide 15: Reconciliation to Adjusted EBITDA
Reconciliation to Adjusted EBITDA Three Months Ended Year Ended Dec 31, Sept 30, June 30, Mar 31, Dec 31, Dec 31, Dec 31, ($ in thousands) 2023 2023 2023 2023 2022 2023 2022 Net (loss) income $ (217,409) $ (22,621) $ (7,851) $ (7,369) $ 50,331 $ (255,250) $ 382,962 Add: Depreciation and amortization
Slide 16: Reconciliation to Free Cash Flow and Adjusted Free Cash Flow
Reconciliation to Free Cash Flow and Adjusted Free Cash Flow Three Months Ended Dec 31, Sept 30, June 30, Mar 31, Dec 31, ($ in thousands) 2023 2023 2023 2023 2022 Net cash provided by (used in) operating activities $ 9,292 $ 51,495 $ (9,024) $ 24,798 $ 50,023 Capital expenditures (5,753) (8,498) (1
Slide 17: Reconciliation to Cash Cost of Goods Sold per MT
Reconciliation to Cash Cost of Goods Sold per MT Three Months Ended Year Ended Dec 31, Sept 30, June 30, Mar 31, Dec 31, Dec 31, Dec 31, ($ in thousands, except per MT amounts) 2023 2023 2023 2023 2022 2023 2022 Cost of goods sold $ 144,393 $ 157,603 $ 157,216 $ 112,645 $ 163,492 $ 571,857 $ 726,373
Slide 18: 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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