Suncoke Energy, Inc. · NYSE:SXC
Suncoke Energy — Barclays Capital High Yield Conference 2012
26 slides from Suncoke Energy's conference presentation, Mar 26, 2012
Slide 1: Barclays Capital High Yield Conference
Exhibit 99.1 Barclays Capital High Yield Conference March 26, 2012 Barclays High Yield Conference, March 2012
Slide 2: Safe Harbor Statement
Safe Harbor Statement Some of the information included in this presentation contains “forward-looking statements” (as defined in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended). Such forward-looking statements are based on man
Slide 3: SunCoke Introduction
SunCoke Introduction Largest independent producer of metallurgical coke in the Americas 2011 Adjusted EBITDA (1) with nearly 50 years experience (excluding Corporate Segment) ~85% of Adjusted EBITDA (1) generated Int'l Coke Coal by cokemaking business 7% Mining 13% Secure, long-term take-or-pay cont
Slide 4: The Leading Independent Cokemaker
The Leading Independent Cokemaker SunCoke 5.9 million tons of capacity with Cokemaking Capacity new Middletown, Ohio facility (In thousands of tons) Six cokemaking facilities; five in 5,940 U.S. and one in Brazil 5,390 5,390 4,740 More than doubled capacity 4,190 since 2006 2,490 Proven ability to p
Slide 5: SunCoke's Value Proposition
SunCoke‘s Value Proposition High Quality & Provide an assured supply of coke to steelmakers Reliable Coke Supply Larger, stronger coke for improved blast furnace performance Turndown Demonstrated sustained 30% turndown; higher turndown on temporary basis Flexibility High quality coke with cheaper co
Slide 6: SunCoke's Heat Recovery Oven vs. By-Product Oven
SunCoke’s Heat Recovery Oven vs. By-Product Oven SunCoke’s technology is the industry’s environmental standard and provides many advantages over the traditional cokemaking process SunCoke Heat Recovery Traditional By-Product Pressurization Negative pressure Positive pressure Potential for emission o
Slide 7: SunCoke's Contract Proposition
SunCoke’s Contract Proposition Deliver coke to customers through a competitive turnkey solution, which produces a consistent stream of earnings Typical Key Coke Sales What SunCoke Offers Agreement Provisions Capital Funding and Ownership Take-Or-Pay Fixed Fee Permits and Approvals (Profit and Return
Slide 8: Focused Growth Strategy
Focused Growth Strategy Growth Initiatives Continue to grow our cokemaking businesses in the U.S. and Canada; reserving portion of future capacity for market sales We believe SunCoke Energy is uniquely Grow international footprint in key growth markets with positioned for immediate focus on India co
Slide 9: SunCoke's U.S. and Canada Market Position
SunCoke's U.S. and Canada Market Position SunCoke believes it has the opportunity to displace higher cost coke imports Chinese Coke Price vs. Representative SunCoke Price North American Coke Imports (US$/ton) (Tons in millions) SunCoke Chinese Q4 2011 Average: $395 $422 2011 Average: $387 $431 2008-
Slide 10: SunCoke's U.S. and Canada Market Position
SunCoke’s U.S. and Canada Market Position Replace aging coke batteries operated by integrated steel producers Aging Cokemaking Facilities U.S. & Canada Coke Supply Average Age %of U.S. & Canada coke production SunCoke 43 18% DTE 5% 28% 28% Integrated Other Merchant & Steel Foundry Producers 7% 60% I
Slide 11: SunCoke's U.S. and Canada Market Position
SunCoke's U.S. and Canada Market Position BF/BOF Crude Steel Production Market Opportunity and Blast Furnace Coke Demand In million tons 5 million tons 60 51 48 50 2 Demand growth with 40 market recovery 40 2010 Coke Rate: 894 lbs./thm 27 2015E Coke Rate: 30 800 lbs./thm 22 19 20 19 19 19 20 Aging b
Slide 12: India Opportunity for SunCoke
India Opportunity for SunCoke GROWING STEEL MARKET • Per capita crude steel production of 58 Kg/y vs. world average of 221 in 2010 • Projected to be 3rd largest steel market by 2020 • Blast furnace to play a critical role in growth COKE SUPPLY DEFICIT India • Annual imports of 2-5 million tons Stron
Slide 13: Coal Expansion
Coal Expansion Expect significant Y-o-Y production growth with 2012 Mid-Vol volumes 88% committed at $177/ton; and overall 2012 volumes 79% committed Current Operations Planned Growth Projected 2012 Coal Production 114 million tons of proven Near term focus on increasing and probable reserves, produ
Slide 14: 2012 Priorities
2012 Priorities • Execute the ramp up of Middletown; expect to reach full production levels in Q2 2012 • Achieve targeted coke production volumes of 4.0 to 4.2 million tons • Continue permitting work for potential new U.S. plant in anticipation of a market recovery • Implement India entry strategy •
Slide 15: 2012 Adjusted EBITDA Outlook
2012 Adjusted EBITDA (1) Outlook Estimated 2012 Adjusted EBITDA (1) projected to increase by $109 million to $139 million over 2011; expect 80%85% - of 2012 Adjusted EBITDA(1, 2) to be generated by cokemaking business ($ in millions) $10 -$15 $25 -$40 $74 -$84 $250 -$280 $141 2011 Coke Coal Mining C
Slide 16: 2012 Outlook Summary
2012 Outlook Summary Metric Expected 2012 Outlook Adjusted EBITDA (1) $250 million –$280 million Capital Expenditures Approximately $150 million & Investments Free Cash Flow (2) $50 million + Cash Tax Rate 10% –15% Effective Tax Rate 20% –24% Corporate Costs $30 million -$35 million Coke Production
Slide 17: Cash Flow & Leverage Update
Cash Flow & Leverage Update Estimated Summary Cash Flow ForYearEndedForYearEnded ($ in millions, except where indicated) Net Income 2012 2011 $59 • Working capital change reflects Depreciation, depletion, and amortization Deferred income tax expense 58 24 higher coal and coke inventory in Changes in
Slide 18: Strategy for Shareholder Value Creation
Strategy for Shareholder Value Creation Potential Structuring Operational Excellence Grow The Coke Business Alternatives Rigorous execution in Domestic Coke MLP existing operations Secure permits for Domestic assets well next potential facility suited and expected Maintain focus on to qualify Capita
Slide 19: Appendix & Supplemental Information
Appendix & Supplemental Information Barclays High Yield Conference, March 2012 18
Slide 20: Definitions
Definitions Adjusted EBITDA represents earnings before interest, taxes, depreciation, depletion and amortization (“EBITDA”) adjusted for sales discounts and the deduction of income attributable to non-controlling interests in our Indiana Harbor cokemaking operations. EBITDA reflects sales discounts
Slide 21: Estimated EBITDA Reconciliation, $MM
Estimated EBITDA Reconciliation, $MM 2012E Net Income to Adjusted EBITDA Reconciliation 2012 2012 Low High Net Income $98 $122 Depreciation, Depletion and Amortization 74 72 Total financing costs, net 48 46 Income tax expense (benefit) 25 37 EBITDA $245 $277 Sales discounts 11 10 Noncontrolling inte
Slide 22: Estimated Free Cash Flow Reconciliation, $MM
Estimated Free Cash Flow Reconciliation, $MM 2012E Estimated Free Cash Flow Reconciliation 2012 Cash from (i) operations; In excess of $ 204 (ii) less investing; Approx. (150) (iii) less payments to minority interest Approx. (4) Free Cash Flow In excess of $ 50 Barclays High Yield Conference, March
Slide 23: EBITDA Reconciliation, $MM
EBITDA Reconciliation, $MM For The Year Ended 2011 Jewell Other International Coal Corporate Coke Domestic Coke Mining and Other Total Net Income $58.9 Add: Depreciation, depletion and amortization 58.4 Subtract: Interest Income (Primarily from Affiliates) (12.9) Add:Interest cost –Affiliate 3.5 Sub
Slide 24: Competitive Pricing vs. Chinese Imports
Competitive Pricing vs. Chinese Imports SunCoke Domestic Coke pricing is competitive versus Chinese imports in the event the 40% tariff on exports is reduced or removed ($ per ton of coke) $500 $25 $50 40% Tariff $400 $130 $11 $300 $517 $442 $200 $395 $301 $100 $0 Chinese Coke Handling/ Average Expo
Slide 25: Why is China Important?
Why is China Important? Chinese Crude Steel Production and Coke Consumption • Chinese steel market represents 45% of world production • Steel market expected to grow 46% over the next 10 years producing an incremental 300+ million tons (more than 2x entire U.S. market) • Integrated steelmaking compr
Slide 26: Media releases and SEC filings are available on our website
Media releases and SEC filings are available on our website at www.suncoke.com Contact Investor Relations for more information: 630-824-1907 Barclays High Yield Conference, March 2012 25
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