Quaker Houghton · NYSE:KWR
Quaker Houghton — Quaker Chemical — Q3 2022 Earnings Presentation
21 slides from Quaker Houghton's earnings presentation, Nov 3, 2022
Slide 1: Quaker Houghton Third Quarter 2022 Results Investor Conference Call
Quaker Houghton Third Quarter 2022 Results Investor Conference Call
Slide 2: Regulation G and Forward-Looking Statements
Regulation G The attached charts include Company information that does not conform to generally accepted accounting principles (“GAAP”). Man agement believes that an analysis of this data is meaningful to investors because it provides insight with respect to ongoing operating results of the Company
Slide 3: Non-GAAP financial information
The information included in this presentation includes non - GAAP (unaudited) financial information that includes EBITDA, adjusted EBITDA, adjusted EBITDA margin, non - GAAP operating income, non - GAAP operating margin, non - GAAP net income, non - GAAP earnings per diluted share, and pro forma net
Slide 4: Speakers
Andy Tometich Chief Executive Officer & President Shane W. Hostetter Senior Vice President, Chief Financial Officer Robert T. Traub Senior Vice President, General Counsel & Corporate Secretary David A. Will Vice President & Chief Accounting Officer Jeffrey Schnell Senior Director, Investor Relations
Slide 5: Highlights
©2022 Quaker Houghton. All Rights Reserved 5 Highlights » Delivered solid 3Q’22 results demonstrating the resilience of our business ▪ Sales growth of ~10% compared to 3Q’21 driven by double - digit price increases in all segments ▪ Gross margins improved to 32.7% in 3Q’22 compared to 30.4% in 2Q’22
Slide 6: Financial Snapshot
©2022 Quaker Houghton. All Rights Reserved 6 Financial Snapshot (dollars in millions, per share amounts) (1) Certain amounts may not calculate due to rounding Q3 2022 Q3 2021 Q2 2022 YTD 2022 YTD 2021 GAAP Net sales $ 492.2 $ 449.1 $ 43.1 10% $ 492.4 $ (0.2) (0%) $ 1,458.8 $ 1,314.1 $ 144.7 11% Gros
Slide 7: Total Company Volume Trend
Modestly lower volumes in 3Q’22 compared to 3Q’21 primarily reflect previously divested business related to the Combination, the the direct and indirect impacts of the ongoing war in Ukraine, and softer market conditions, primarily in Europe and Asia/Pac ifi c Total Company Volume Trend (k ilograms,
Slide 8: Adjusted EBITDA
©2022 Quaker Houghton. All Rights Reserved 8 Adjusted EBITDA (dollars in millions) Strong price realization and cost management in 3Q’22 drove an improvement in margins notwithstanding the significant and persistent inflationary pressures and the unfavorable impact of F/X (1) Periods presented prior
Slide 9: Leverage and Liquidity Update
▪ Total debt of $954 million and cash and cash equivalents of $139 million resulted in net debt of $815 million ▪ Leverage of 3.3x as of September 30, 2022 1 ▪ Operating well within bank covenants ▪ Bank leverage of 3.1x as of September 30, 2022 2 ▪ Maximum permitted leverage of 4.0x 2 ▪ Healthy bal
Slide 10: Appendix: Actual and Non-GAAP Results
Appendix Actual and Non - GAAP Results
Slide 11: Non-GAAP Operating Reconciliation
©2022 Quaker Houghton. All Rights Reserved 11 Non - GAAP Operating Reconciliation (dollars in thousands, unless otherwise noted) Q3 2022 Q3 2021 YTD 2022 YTD 2021 Operating income 44,609$ 36,010$ 105,915$ 119,720$ Combination, restructuring and other acquisition-related expenses 717 5,083 7,421 20,3
Slide 12: Adjusted EBITDA & Non-GAAP Net Income Reconciliation
©2022 Quaker Houghton. All Rights Reserved 12 Adjusted EBITDA & Non - GAAP Net Income Reconciliation (dollars in thousands, unless otherwise noted) Q3 2022 Q3 2021 YTD 2022 YTD 2021 Net income attributable to Quaker Chemical Corporation 25,867$ 31,058$ 60,026$ 103,243$ Depreciation and amortization
Slide 13: Adjusted EBITDA Reconciliation
©2022 Quaker Houghton. All Rights Reserved 13 Adjusted EBITDA Reconciliation (dollars in thousands) FY 2020 FY 2021 Net income attributable to Quaker Chemical Corporation 39,658$ 121,369$ Depreciation and amortization 84,494 87,728 Interest expense, net 26,603 22,326 Taxes on income before equity in
Slide 14: Adjusted EBITDA Reconciliation Trailing Twelve Months Q3 2022
©2022 Quaker Houghton. All Rights Reserved 14 Adjusted EBITDA Reconciliation Trailing Twelve Months Q3 2022 (dollars in thousands) A B C = B - A D E = C + D YTD Q3 2021 Full Year 2021 Last Three Months 2021 YTD Q3 2022 TTM Q3 2022 Net income attributable to Quaker Chemical Corporation 103,243$ 121,3
Slide 15: Non-GAAP EPS Reconciliation
©2022 Quaker Houghton. All Rights Reserved 15 Non - GAAP EPS Reconciliation Q3 2022 Q3 2021 YTD 2022 YTD 2021 GAAP earnings per diluted share attributable to Quaker Chemical Corporation common shareholders Equity loss (income) in a captive insurance company per diluted share 0.01 (0.01) 0.12 (0.23)
Slide 16: Segment Performance
©2022 Quaker Houghton. All Rights Reserved 16 Segment Performance (dollars in thousands) Q3 2022 Q3 2021 YTD 2022 YTD 2021 Net sales Americas 186,546$ 150,799$ 513,438$ 425,343$ EMEA 113,367 122,241 362,107 365,491 Asia/Pacific 91,211 98,659 295,273 286,924 Global Specialty Businesses 101,094 77,373
Slide 17: Quaker Houghton. Forward Together
& Quaker Ve Houghton. Forward Together~
Slide 18: Full Year 2019 Pro Forma Reconciliation
©2022 Quaker Houghton. All Rights Reserved 18 Full Year 2019 Pro Forma Reconciliation (dollars in millions) Quaker Houghton Divestitures Other (a) Pro Forma* Net sales 1,134$ 475$ (34)$ (13)$ 1,562$ Net Income (Loss) Attributable to Quaker Houghton 32$ (3)$ (6)$ 10$ 33$ Depreciation and Amortization
Slide 19: Full Year 2018 Pro Forma Reconciliation
19 ©2022 Quaker Houghton. All Rights Reserved Full Year 2018 Pro Forma Reconciliation (dollars in millions) Quaker Houghton Divestitures Other (a) Pro Forma* Net sales 868$ 861$ (53)$ (22)$ 1,655$ Net Income (Loss) Attributable to Quaker Houghton 59$ (0)$ (9)$ 17$ 66$ Depreciation and Amortization 2
Slide 20: Full Year 2017 Pro Forma Reconciliation
20 ©2022 Quaker Houghton. All Rights Reserved Full Year 2017 Pro Forma Reconciliation (dollars in millions) Quaker Houghton Divestitures Other (a) Pro Forma* Net Income (Loss) Attributable to Quaker Houghton 20$ (47)$ (9)$ 9$ (26)$ Depreciation and Amortization 20 55 - 5 80 Interest Expense, Net 1 5
Slide 21: Full Year 2016 Pro Forma Reconciliation
21 ©2022 Quaker Houghton. All Rights Reserved Full Year 2016 Pro Forma Reconciliation (dollars in millions) Quaker Houghton Divestitures Other (a) Pro Forma* Net Income (Loss) Attributable to Quaker Houghton 61$ (37)$ (8)$ 7$ 23$ Depreciation and Amortization 20 55 - 5 80 Interest Expense, Net 1 51