Quaker Houghton · NYSE:KWR
Quaker Houghton — Quaker Chemical — Q3 2013 Earnings Presentation
16 slides from Quaker Houghton's earnings presentation, Oct 29, 2013
Slide 1: Quaker Chemical Corporation Investor Conference Call Third Quarter 2013 Results
1 Quaker Chemical Corporation Investor Conference Call October 30, 2013 Third Quarter 2013 Results
Slide 2: Regulation G and Forward-Looking Statements
2 Regulation G The attached charts include Company information that does not conform to generally accepted accounting principles (GAAP). Management believes that an analysis of this data is meaningful to investors because it provides insight with respect to ongoing operating results of the Company a
Slide 3: Speakers
3 Speakers Michael F. Barry Chairman of the Board, Chief Executive Officer & President Margaret M. Loebl Vice President, Chief Financial Officer & Treasurer Robert T. Traub General Counsel Chart #1
Slide 4: Third Quarter 2013 Headlines
4 Third Quarter 2013 Headlines ▪ 14% earnings per share growth despite challenging economic environment ▪ Expected $0.08 per share third quarter tax benefit delayed until fourth quarter ▪ Strong net operating cash flow of $24.5 million in Q3 2013 Chart #2
Slide 5: Chairman Comments
5 Chairman Comments ▪ Q3 2013 x Solid sales / margins in a difficult economy x Gaining share & leveraging acquisitions x Earnings growth and strong cash flow generation x Growing TTM Adjusted EBITDA x Liquidity remains a Company strength ▪ Q4 2013 Outlook x Expect good operating results x Subject to
Slide 6: Crude Steel Output
6 Crude Steel Output Thousand Metric Tons Chart #4 Jan - Sept Jan - Sept % 2013 2012 Change EU-27 123,779 129,208 -4.2 Other Europe 27,239 28,706 -5.1 CIS 81,513 84,415 -3.4 N. America 88,882 92,663 -4.1 S. America 34,773 35,190 -1.2 Africa 11,402 11,410 -0.1 Middle East 19,321 18,096 +6.8 Asia 795,
Slide 7: Product Volume by Quarter
7 Product Volume by Quarter Thousand Kilograms 25,000 30,000 35,000 40,000 45,000 50,000 55,000 4Q08 YTD Avg. 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q112Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 Metalworking Process Chemicals Segment Chart #5
Slide 8: Financial Snapshot
8 Financial Snapshot Q3 2013 Q3 2012 YTD 2013 YTD 2012 Net Sales ($Mils.) 184.1 180.9 545.1 535.4 Gross Margin (%) 35.9 32.7 35.9 33.5 Operating Margin (%) 10.2 8.8 10.3 9.3 Net Income attributable to Quaker Chemical Corporation ($Mils.) 12.6 10.9 42.3 34.4 Adjusted EBITDA ($Mils.) – Trailing Twelve
Slide 9: Gross Margin Percentage
9 Gross Margin Percentage 32.7% 34.2% 35.5% 36.4% 35.9% 20.0% 25.0% 30.0% 35.0% 40.0% Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Gross Margin Percentage Chart #7 28.0% 34.7% 35.4% 32.6% 33.7% 35.9% 20.0% 25.0% 30.0% 35.0% 40.0% 2008 2009 2010 2011 2012 2013 YTD Gross Margin Percentage
Slide 10: Adjusted EBITDA Baseline Historical Performance
10 Adjusted EBITDA Baseline Historical Performance $40.1 $44.2 $66.8 $73.0 $80.9 $91.5 6.90% 9.80% 12.30% 10.70% 11.40% 12.60% 2008 2009 2010 2011 2012 Q3 2013 Annualized Adjusted EBITDA ($ Mils.) Adjusted EBITDA Margin (%) Chart #8 CAGR: 17.9% +570 Margin bps 2008 – 2013 Annualized
Slide 11: Balance Sheet Net Cash / (Debt)
11 Balance Sheet Net Cash / (Debt) -$100 -$80 -$60 -$40 -$20 $0 $20 $40 $60 $80 2008 2009 2010 2011 2012 Q3 2013 $ Millions Cash ST/LT Debt Net Debt Chart #9
Slide 12: Net Cash Flow From Operations
12 Net Cash Flow From Operations 19.8 21.1 11.3 16.2 24.5 0 10 20 30 40 50 60 70 80 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Operating Cash Flow ($ Millions) Chart #10 13.4 41.6 37.5 19.7 62.9 51.9 0 10 20 30 40 50 60 70 80 2008 2009 2010 2011 2012 YTD 2013 Operating Cash Flow ($ Millions)
Slide 13: Appendix
13 APPENDIX
Slide 14: Non-GAAP Earnings Per Diluted Share Reconciliation
14 Chart #11 Q3 2013 Q3 2012 YTD 2013 YTD 2012 GAAP Earnings Per Diluted Share 0.95$ 0.83$ 3.21$ 2.63$ CFO transition costs per diluted Share -$ -$ -$ 0.03$ Customer bankruptcies per diluted share -$ -$ -$ 0.06$ Cost streamlining inititiatives per diluted share 0.05$ -$ 0.07$ -$ Mineral oil excise t
Slide 15: Annualized Adjusted EBITDA Reconciliation
15 Annualized Adjusted EBITDA Reconciliation Chart #12 2008 2009 2010 2011 2012 YTD Q3 2013 Net income 9,833 16,058 32,120 45,892 47,405 42,253 Depreciation 10,879 9,525 9,867 11,455 12,252 9,219 Amortization 1,177 1,078 988 2,338 3,106 2,621 Interest expense 5,509 5,533 5,225 4,666 4,283 2,223 Taxe
Slide 16: Trailing Twelve Months Adjusted EBITDA Reconciliation
16 Trailing Twelve Months Adjusted EBITDA Reconciliation Chart #13 I = G + H H G = F - D F E = C + D D C = B - A B A Q3 2013 Trailing Twelve Months Q3 2013 YTD Q3 2013 Last Three Months 2012 YTD 2012 Trailing Twelve Months Q3 2012 YTD Q3 2012 Last Three Months 2011 YTD 2011 YTD Q3 2011 Net income 12