Quaker Houghton · NYSE:KWR
Quaker Houghton — Quaker Chemical — Q4 2022 Earnings Presentation
19 slides from Quaker Houghton's earnings presentation, Feb 23, 2023
Slide 1: Fourth Quarter and Full Year 2022 Results Investor Conference Call
Quaker Houghton Fourth Quarter and Full Year 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”). 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: 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 sales, ne
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 Vice President, Investor Relations
Slide 5: Highlights
©2022 Quaker Houghton. All Rights Reserved 5 Highlights 4Q’22 results highlight solid execution in a very challenging operating environment Delivered $68m of adj. EBITDA, +12% Y/Y, as a result of 8% net sales growth and an improvement in gross margin Volumes declined Y/Y due to softer market c
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 Q4 2022 Q4 2021 Q3 2022 FY 2022 FY 2021 GAAP Net sales $ 484.8 $ 447.0 $ 37.8 8% $ 492.2 $ (7.4) (2%) $ 1,943.6 $ 1,761.2 $ 182.4 10% Gross p
Slide 7: Total Company Volume Trend
Sales volumes in 2022 primarily reflect softer market conditions, the wind-down of the tolling agreement on previously divested business, the direct and indirect impacts of both the ongoing war in Ukraine and COVID in China Total Company Volume Trend (kilograms, in thousands) 7 ©2022 Quaker Houghton
Slide 8: Adjusted EBITDA
©2022 Quaker Houghton. All Rights Reserved 8 Adjusted EBITDA (dollars in millions) 4Q’22: An improvement in gross margins offset softer market conditions and F/X 2022: Strong price realization offset by significant cost inflation and ~$25m impact from the exit of Russia/Ukraine and F/X (1) Periods p
Slide 9: Leverage and Liquidity Update
Total debt of $955 million and cash and cash equivalents of $181 million resulted in net debt of $774 million Leverage of 3.0x as of December 31, 20221 Operating well within bank covenants Bank leverage of 2.8x as of December 31, 20222 Maximum permitted leverage of 4.0x2 Healthy balance
Slide 10: Appendix: Actual and Non-GAAP Results
Appendix Actual and Non-GAAP Results
Slide 11: Non-GAAP Operating Reconciliation
©2022 Quaker Houghton. All Rights Reserved 11 Non-GAAP Operating Reconciliation (dollars in thousands, unless otherwise noted) Q4 2022 Q4 2021 FY 2022 FY 2021 Operating income (53,611)$ 30,746$ 52,304$ 150,466$ Combination, restructuring and other acquisition-related expenses 4,554 6,474 11,975 26,8
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) Q4 2022 Q4 2021 FY 2022 FY 2021 Net (loss) income attributable to Quaker Chemical Corporation (75,957)$ 18,126$ (15,931)$ 121,369$ Depreciation and amorti
Slide 13: Non-GAAP EPS Reconciliation
©2022 Quaker Houghton. All Rights Reserved 13 Non-GAAP EPS Reconciliation Q4 2022 Q4 2021 FY 2022 FY 2021 GAAP earnings per diluted share attributable to Quaker Chemical Corporation common shareholders Equity loss (income) in a captive insurance company per diluted share (0.04) (0.05) 0.08 (0.28) Co
Slide 14: Segment Performance
©2022 Quaker Houghton. All Rights Reserved 14 Segment Performance (dollars in thousands) Q4 2022 Q4 2021 FY 2022 FY 2021 Net sales Americas 182,664$ 147,300$ 696,102$ 572,643$ EMEA 112,497 114,635 474,604 480,126 Asia/Pacific 91,177 101,236 386,450 388,160 Global Specialty Businesses 98,470 83,870 3
Slide 15: && Quaker
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Slide 16: Full Year 2019 Pro Forma Reconciliation
©2022 Quaker Houghton. All Rights Reserved 16 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 17: Full Year 2018 Pro Forma Reconciliation
17 ©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 18: Full Year 2017 Pro Forma Reconciliation
18 ©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 19: Full Year 2016 Pro Forma Reconciliation
19 ©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