Graftech International Ltd. · NYSE:EAF
Graftech International — Q1 2022 Earnings Presentation
16 slides from Graftech International's earnings presentation, May 6, 2022
Slide 1: Q1 2022 Results
Q1 2022 Results May 6, 2022 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: Prioritizing Safety
Prioritizing Safety Total Recordable Injury Rates(1) 1.55 0.95 0.81 0.51 0.49 2018 2019 2020 2021 Q1 2022 (1) Total recordable injury rates measured per 200,000 hours worked. 3
Slide 4: Positive Industry Growth & Pricing
Positive Industry Growth & Pricing Graphite Electrode Industry ▪ Continued strong demand led to increased graphite electrode prices in Q1 2022 ▪ Further demand increases are anticipated with the ongoing transition to electric arc furnace (“EAF”) steel production ▪ Demand for petroleum needle coke, a
Slide 5: Commercial Outlook Remains Favorable
Commercial Outlook Remains Favorable ▪ Demand for our products remains healthy ▪ Q1 2022 average realized non-LTA prices increased over 19% compared to Q4 2021 ▪ LTA sales volume and revenue estimates have been updated as follows: 2022 2023 through 2024 Estimated LTA volume 90-100 40-50 (in thousand
Slide 6: Strong Production and Sales Growth
Strong Production and Sales Growth ▪ Q1 2022 production volume up 28%, sales volume up 16% and net sales up 20% compared to Q1 2021 ▪ Focused on production output and operational excellence as demand remains strong Production Volume Sales Volume Net Sales (in thousands of MT) (in thousands of MT) (i
Slide 7: GrafTech: Enabling the Sustainability of Steel
GrafTech: Enabling the Sustainability of Steel As graphite electrodes are indispensable to the operation of EAFs, we are part of the solution by …. Contributing to the Decarbonization of Steel “EAF steelmaking is more energy efficient than traditional steelmaking – with 75% fewer CO2 emissions and l
Slide 8: Robust Earnings and Cash Flow
Robust Earnings and Cash Flow Continuing to deliver strong results in Q1 2022 ▪ Net income of $124 million, EPS of $0.47, adjusted net income(1) of $126 million and adjusted EPS(1) of $0.48 ▪ Adjusted EBITDA(1) of $170 million and adjusted EBITDA margin(2) of 46% ▪ Operating cash flow of $146 millio
Slide 9: Balance Sheet Strength and Financial Flexibility
Balance Sheet Strength and Financial Flexibility Strengthening Capital Structure through Significant Deleveraging ▪ Reduced debt by $70 million in Q1 2022, building on the $400 million reduction during 2021 ▪ Gross Debt/Adjusted EBITDA(1) of 1.4x as of March 31, 2022 ▪ Liquidity of $331 million as o
Slide 10: Delivering on Key Capital Allocation Priorities
Delivering on Key Capital Allocation Priorities Generate Meaningful Cash Flow ▪ Anticipate strong operating and free cash flow in 2022 ▪ In Q1 2022, converted 77% of adjusted EBITDA(1) to adjusted free cash flow(1)(2) Strong Balance Sheet for Strategic Flexibility and Returning Capital to Stockholde
Slide 11: An Industry-Leading Producer of Graphite Electrodes
An Industry-Leading Producer of Graphite Electrodes ▪ Graphite electrodes are a highly engineered, mission critical industrial consumable for the growing EAF steelmaking market o Constitute less than 5% of EAF steelmaking COGS ▪ Environmental factors are a tailwind; EAF steelmaking produces ~75% les
Slide 12: Non-GAAP Financial Measures
Non-GAAP Financial Measures In addition to providing results that are determined in accordance with GAAP, we have provided certain financial measures that are not in accordance with GAAP. EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted EPS, free cash flow, adjusted fre
Slide 13: Reconciliation to Adjusted Net Income
Reconciliation to Adjusted Net Income For the Three Months Ended Mar 31, June 30, Sept 30, Dec 31, Mar 31, ($ in thousands) 2021 2021 2021 2021 2022 Net income $ 98,799 $ 28,165 $ 119,886 $ 141,480 $ 124,183 Adjustments (pre-tax): Pension and OPEB plan expenses (benefits)(1) 431 430 434 (3,840) 551
Slide 14: Reconciliation to Adjusted EPS
Reconciliation to Adjusted EPS For the Three Months Ended Mar 31, June 30, Sept 30, Dec 31, Mar 31, 2021 2021 2021 2021 2022 Earnings per share $ 0.37 $ 0.11 $ 0.45 $ 0.54 $ 0.47 Adjustments per share: Pension and OPEB plan expenses (benefits)(1) - - - (0.02) - Public offerings and related expenses(
Slide 15: Reconciliation to Adjusted EBITDA
Reconciliation to Adjusted EBITDA For the Three Months Ended Mar 31, June 30, Sept 30, Dec 31, Mar 31, ($ in thousands) 2021 2021 2021 2021 2022 Net income $ 98,799 $ 28,165 $ 119,886 $ 141,480 $ 124,183 Add: Depreciation and amortization 16,539 16,292 15,584 17,301 14,434 Interest expense 22,167 15
Slide 16: Reconciliation to Free Cash Flow and Adjusted Free Cash Flow
Reconciliation to Free Cash Flow and Adjusted Free Cash Flow For the Three Months Ended Mar 31, June 30, Sept 30, Dec 31, Mar 31, ($ in thousands) 2021 2021 2021 2021 2022 Net cash provided by operating activities $ 122,425 $ 86,330 $ 134,256 $ 100,029 $ 146,316 Capital expenditures (14,174) (11,878
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