Quaker Houghton · NYSE:KWR
Quaker Houghton — Quaker Chemical — Q2 2021 Earnings Presentation
22 slides from Quaker Houghton's earnings presentation, Aug 3, 2021
Slide 1: Quaker Houghton Second Quarter 2021 Results Investor Conference Call
Quaker Houghton Second Quarter 2021 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: Speakers
Michael F. Barry Chairman of the Board, 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 and Global Controller ©2020 Quaker Houghton. All Rig
Slide 4: Second Quarter 2021 Headlines
©2020 Quaker Houghton. All Rights Reserved 4 • Record net sales of $435.3 million increased 52% compared to the second quarter of 2020 and up 1% sequentially compared to the first quarter of 2021 • Gross margin of 35.5% improved from the second quarter of 2020 but as expected declined sequentially c
Slide 5: Chairman Comments Second Quarter of 2021
©2020 Quaker Houghton. All Rights Reserved 5 Chairman Comments Second Quarter of 2021 • Strong second quarter of 2021 despite unprecedented increases in raw material costs and supply chain issues • Demand continues to be the major contributor to earnings performance as sales volumes increased 4% fro
Slide 6: Financial Highlights Second quarter of 2021
©2020 Quaker Houghton. All Rights Reserved 6 Financial Highlights Second quarter of 2021 • Record net sales of $435.3 million increased 52% primarily due to higher volumes of 40%, which included additional net sales from acquisitions of 5%, the positive impact from foreign currency translation of 8%
Slide 7: Financial Snapshot
©2020 Quaker Houghton. All Rights Reserved 7 Financial Snapshot (dollars in millions, unless otherwise noted) (1) Certain amounts may not calculate due to rounding Q2 2021 Q2 2020 Q1 2021 YTD 2021 YTD 2020 GAAP Net Sales $ 435.3 $ 286.0 $ 149.2 52% $ 429.8 $ 5.5 1% $ 865.0 $ 664.6 $ 200.4 30% Gross
Slide 8: Total Company Volume Trend
Q2’21 volumes up 41% compared to Q2’20 due to COVID - 19 Total Company Volume Trend (k ilograms in thousands ) 8 ©2020 Quaker Houghton. All Rights Reserved 60,000 80,000 100,000 120,000 140,000 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21
Slide 9: Pro Forma Adjusted EBITDA
©2020 Quaker Houghton. All Rights Reserved 9 Pro Forma Adjusted EBITDA (dollars in millions) $215 $221 $236 $234 $222 $277 $200 $220 $240 $260 $280 $300 2016 2017 2018 2019 2020 (1) TTM Q2 2021 (1) Record TTM adjusted EBITDA driven by continued COVID - 19 recovery and strong 1H’21 performance (1) Re
Slide 10: Leverage
Leverage Reported 3.5 3.4 3.7 3.4 3.2 3.1 2.7 Bank 2.9 2.8 3.1 2.9 2.8 2.8 2.5 • Total gross outstanding borrowings of $904.8 million and cash on hand of $145.6 million result in net debt of $759.2 million compared to $717.3 million as of December 31, 2020 • Net debt to TTM adjusted EBITDA of 2.7x a
Slide 11: Appendix Actual and Non-GAAP Results
Appendix Actual and Non - GAAP Results
Slide 12: Non-GAAP financial information notes
The information included in this presentation includes non - GAAP (unaudited) financial information that includes EBITDA, adjusted EBITDA, adjusted EBITDA margin, non - GAAP operating income, non - GAAP operating margin, non - GAAP net income, non - GAAP earnings per diluted share, and pro forma net
Slide 13: Non-GAAP Operating Income Reconciliation
©2020 Quaker Houghton. All Rights Reserved 13 Non - GAAP Operating Income Reconciliation (dollars in thousands, unless otherwise noted) Q2 2021 Q2 2020 YTD 2021 YTD 2020 Operating income (loss) 38,816$ 2,238$ 83,710$ (10,206)$ Houghton combination, integration and other acquisition-related expenses
Slide 14: Adjusted EBITDA & Non-GAAP Net Income Reconciliation
©2020 Quaker Houghton. All Rights Reserved 14 Adjusted EBITDA & Non - GAAP Net Income Reconciliation (dollars in thousands, unless otherwise noted) Q2 2021 Q2 2020 YTD 2021 YTD 2020 Net income (loss) attributable to Quaker Chemical Corporation 33,570$ (7,735)$ 72,185$ (36,116)$ Depreciation and amor
Slide 15: TTM Adjusted EBITDA Reconciliation
A B C = B - A D E = C + D YTD Q2 2020 Full Year 2020 Last Six Months 2020 YTD Q2 2021 TTM Q2 2021 Net (loss) income attributable to Quaker Chemical Corporation (36,116)$ 39,658$ 75,774$ 72,185$ 147,959$ Depreciation and amortization 42,742 84,494 41,752 44,792 86,544 Interest expense, net 15,272 26,
Slide 16: Non-GAAP EPS Reconciliation
©2020 Quaker Houghton. All Rights Reserved 16 Non - GAAP EPS Reconciliation Q2 2021 Q2 2020 YTD 2021 YTD 2020 GAAP earnings (loss) per diluted share attributable to Quaker Chemical Corporation common shareholders Equity income in a captive insurance company per diluted share (0.05) (0.03) (0.22) (0.
Slide 17: Segment net sales and operating earnings
Q2 2021 Q2 2020 YTD 2021 YTD 2020 Net sales Americas 139,673$ 80,576$ 274,544$ 210,472$ EMEA 123,436 77,702 243,250 182,541 Asia/Pacific 91,559 68,421 188,265 141,973 Global Specialty Businesses 80,594 59,341 158,986 129,615 Total net sales 435,262$ 286,040$ 865,045$ 664,601$ Segment operating earni
Slide 18: Quaker Houghton - Forward Together
& Quaker Vg Houghton. Forward Together
Slide 19: Full Year 2019 Pro Forma Reconciliation
©2020 Quaker Houghton. All Rights Reserved 19 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 20: Full Year 2018 Pro Forma Reconciliation
20 ©2020 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 21: Full Year 2017 Pro Forma Reconciliation
21 ©2020 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 22: Full Year 2016 Pro Forma Reconciliation
22 ©2020 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