Suncoke Energy, Inc. · NYSE:SXC
Suncoke Energy — Q3 2016 Earnings Presentation
23 slides from Suncoke Energy's earnings presentation, Oct 20, 2016
Slide 1: SunCoke Energy, Inc. Q3 2016 Earnings Conference Call
SunCoke Energy, Inc. Q3 2016 Earnings Conference Call October 20, 2016
Slide 2: Forward-Looking Statements
Forward-Looking Statements This slide presentation should be reviewed in conjunction with the Third Quarter 2016 earnings release of SunCoke Energy, Inc. (SXC) and conference call held on October 20, 2016 at 11:00 a.m. ET. Some of the information included in this presentation constitutes “forward-lo
Slide 3: Management Perspective
Management Perspective Achieved solid safety, environmental and operating performance across cokemaking fleet Realized continued cost improvement at Indiana Harbor; recently began Q4 ‘16 oven rebuilds Modest sequential improvement in Q3 ‘16 logistics volumes, but remain below target; encourage
Slide 4: Navigating Current Market Conditions
Navigating Current Market Conditions Encouraged by recent coal customer developments in addition to broader improvements across coal and steel industries Significant improvement in underlying industry and customer dynamics CMT customers reached important milestones during Q3 2016 • FELP successfully
Slide 5: Q3 2016 Overview
Q3 2016 Overview Q3 2016 Earnings Overview Q3 ‘16 EPS up $0.46 vs. Q3 ‘15 due to ($/share) ($ in millions) Earnings per Share (diluted) Consolidated Adj. EBITDA(1) • Absence of a $19.4M, or $0.30 per share, impairment to India JV incurred in prior $0.10 ($0.04) year period ($0.36) $139.7 $130.4 ($0.
Slide 6: Adjusted EBITDA – Q3 '15 to Q3 '16
(1) Adjusted EBITDA – Q3 ‘15 to Q3 ‘16 Q3 ‘16 performance benefited from favorable impact of Coal Mining divestiture, strong IHO cost savings and lapping of Corporate expenses ($ in millions) $49.1 $3.0 $49.4 ($7.0) $4.3 $2.0 ($2.0) • $3.6M – O&M improvement • $2.2M – Deal costs incurred Q3 ‘15 • $0
Slide 7: Domestic Coke Business Summary
Domestic Coke Business Summary Solid quarter performance in line with expectations; Remain on track to deliver FY 2016 Adj. EBITDA per ton of $48/t – $53/t Domestic Cokemaking Performance Total Coke production in line (Production, Kt) $54/ton with expectations (ex. IHO) $54/ton $52/ton $51/ton $45/t
Slide 8: IHO Q3 Performance
IHO Q3 Performance Strong cost management & sustained performance at rebuilt ovens; Began 2016 oven rebuilds in late Q3 ‘16 Disciplined cost management resulting in $3.6M benefit vs. Q3 ‘15 • YTD 2016 incremental O&M improvement of >$13M Operational challenges & oven degradation driving Q3 below-tar
Slide 9: Coal Logistics Business Summary
Coal Logistics Business Summary Higher Q3 ‘16 logistics volumes, but remain below-target; Expect improving industry dynamics will benefit Q4 ‘16 volumes Coal Logistics Performance Domestic Coal Logistics (Tons Handled, Kt) $21.1 down $2.0M due to lower $9.3 $7.3 than expected throughput 5,555 $5.9 $
Slide 10: CMT Business Update
CMT Business Update Expanding CMT potential via entrance into new line of business; Remaining flexible and responsive to evolving industry landscape Piloting new domestic thermal coal business • U.S. utility customer shipping thermal coal destined for domestic marketplace • First in-bound train rece
Slide 11: Liquidity Position
Liquidity Position Maintain healthy liquidity of ~$300M combined SXCP revolver availability: $72M $3.0 Attributable ($11.1) SXC revolver to SXCP $26.3 availability: $120M ($23.1) $108.0 $14.4 ($12.2) • ($9.0M) – Ongoing $105.3 • ($2.1M) – Environmental $54.1 $46.1 • $25.6M – D&A • ($20.0M) – Repayme
Slide 12: 2016 Capital Deployment
2016 Capital Deployment Strong cash flow generation from coke and coal logistics operations; Deploying cash primarily for de-levering, CapEx and SXCP distributions $17.5 As of Q3 2016, ($12.8) ($42.9) SXC had positive net debt ($36.9) $166.1 • $16.2M – SXCP • ($36.9M) – 3 quarters of Distributions @
Slide 13: 2016 Priorities
2016 Priorities Manage Through Challenging Market Conditions • Remain flexible & responsive to industry backdrop while leveraging unique value proposition Stabilize Indiana Harbor Cokemaking Operations • Improve profitability by executing oven rebuilds and reducing O&M costs Deliver Operations Excel
Slide 14: Questions
QUESTIONS SunCoke Energy”
Slide 15: Investor Relations
Investor Relations 630-824-1907 www.suncoke.com
Slide 16: Appendix
APPENDIX SunCoke Energy”
Slide 17: Definitions
Definitions Adjusted EBITDA represents earnings before interest, (gain) loss on extinguishment of debt, taxes, depreciation and amortization (“EBITDA”), adjusted for impairments, coal rationalization costs, changes to our contingent consideration liability related to our acquisition of CMT and the e
Slide 18: Reconciliation to Adjusted EBITDA
Reconciliation to Adjusted EBITDA Q3 '16 Q3 '15 ($ in millions) Q3 '16 Q2 '16 Q1 '16 FY '15 Q4 '15 Q3 '15 Q2 '15 Q1 '15 YTD YTD Net cash provided by Operating activities $44.6 $92.1 $29.4 $141.1 $58.1 $6.4 $65.5 $11.1 $166.1 $83.0 Depreciation, depletion and amortization expense 25.6 28.6 28.2 109.1
Slide 19: Reconciliation of Segment Adjusted EBITDA and Adjusted EBITDA per ton
Reconciliation of Segment Adjusted EBITDA and Adjusted EBITDA per ton Reconciliation of Segment Adjusted EBITDA and Adjusted EBITDA per Ton Corporate, Domestic Coal Legacy Costs ($ in millions, except per ton data) Coke Brazil Coke Coal Mining Logistics (1) and Other Consolidated Q3 2016 Adjusted EB
Slide 20: Balance Sheet & Debt Metrics
Balance Sheet & Debt Metrics As of 09/30/2016 Balance SXC Attributable Attributable Consolidated to SXCP ($ in millions) to SXC Cash $ 105 $ 46 $ 59 Available Revolver Capacity 192 72 120 Total Liquidity 297 118 179 Total Debt (Long and Short-term) 869 824 45 Net Debt (Total Debt less Cash) 764 778
Slide 21: 2016 Outlook
2016 Outlook 2016 Guidance remains unchanged from prior quarter 2015 2016 Metric Results Guidance (1) Adjusted EBITDA Consolidated $185.8M $210M – $235M Attrib. to SXC $104.6M $105M – $124M (2) Capital Expenditures $76M ~$45M Domestic Coke Production 4.1 Mt 4.0 Mt – 4.1 Mt Dom. Coke Adj. EBITDA/ton
Slide 22: 2016E Guidance Reconciliation
2016E Guidance Reconciliation 2016E 2016E ($ in millions) Low High Net cash provided by Operating activities $150 $170 Depreciation and amortization expense 106 106 (Gain) / loss on extinguishment of debt (20) (27) Loss on divestiture of business 14 14 Changes in working capital and other 6 3 Net In
Slide 23: Capital Expenditures
Capital Expenditures 2015 CapEx ($ in millions) SXC SXCP Consolidated Ongoing(1) $30 $21 $51 Other 4 0 4 Environmental Project 0 21 21 Total CapEx (excl. pre-funded Ship loader) $34 $42 $76 Coal Logistics: Ship loader (pre-funded) $0 $5 $5 2016 Expected CapEx ($ in millions) SXC SXCP Consolidated On