Ecovyst Inc. · NYSE:ECVT
Ecovyst — PQ — Investor Presentation (September 2020)
23 slides from Ecovyst's investor presentation, September 2020
Slide 1: Investor Presentation September 2020
INVESTOR PRESENTATION September 2020
Slide 2: Legal Disclaimer
LEGAL DISCLAIMER Forward-Looking Statements Some of the information contained in this presentation and any discussions that follow constitutes “forward-looking statements”. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimate
Slide 3: PQ Corporation Overview
PQ CORPORATION OVERVIEW 2019 SALES AND ZEOLYST JV SALES2 Long History: Founded in 1831 SEGMENT3 SALES o Differentiated Specialty Businesses 25% o Innovation Culture 39% Performance Chemicals Performance Materials Catalysts o Sustainable Products 15% Refining Services 21% o Track Record of Financial
Slide 4: Our Diversified Specialty Businesses
OUR DIVERSIFIED SPECIALTY BUSINESSES REFINING PERFORMANCE PERFORMANCE SERVICES CATALYSTS1 MATERIALS CHEMICALS COMPETITIVE STRENGTHS o Supplier to largest North o Key supplier for global refineries o Transportation safety lead bead o Strategic global infrastructure America refineries o Leader in zeol
Slide 5: Financial Performance in Macroeconomic Cycles
FINANCIAL PERFORMANCE IN MACROECONOMIC CYCLES Adjusted EBITDA and Adjusted EBITDA Margin (%)1,2,3 ($ in millions except %) (1) Adjusted EBITDA for the period from 2005 to 2014 represents Legacy Eco Adjusted EBITDA and Legacy PQ Adjusted EBITDA prior to the Business Combination. Adjusted EBITDA for 2
Slide 6: Demand Trends: Recovery Path Varies by End Use
DEMAND TRENDS: RECOVERY PATH VARIES BY END USE 2019 % TOTAL DEMAND TREND 2H 2020 BUSINESS END USE KEY PRODUCTS SALES1 Q2 2H 2020 EXPECTED DEMAND DRIVERS US gasoline demand improved ~ 70% by June Regeneration for Refining 15% from its low point in early April. Return to Gasoline Refining >90% of 2019
Slide 7: 2020 Execution, Actions and Outlook
2020 EXECUTION, ACTIONS AND OUTLOOK Rapid COVID-19 response o Ensured health and safety of our employees o Maintained operations with minor disruptions o Adapted to customer demand o Refinanced debt at lower costs with extended maturities 1H 2020 Execution Reinitiated 2020 Outlook Additional 2020 Ac
Slide 8: Financial Flexibility
FINANCIAL FLEXIBILITY ADJUSTED FREE CASH FLOW1 NET DEBT / ADJUSTED EBITDA 155 ($ in millions) 4.9x 4.5x 3.9x 166 145 134 25 2017 2018 2019 2017 2018 2019 2020 Actual Actual Actual Range DEBT MATURITY SCHEDULE FINANCIAL FLEXIBILITY ($ in millions) o ~$285 million2 total available liquidity o Cash on
Slide 9: Continuing to Actively Reposition PQ's Portfolio for Higher Value
CONTINUING TO ACTIVELY REPOSITION PQ’S PORTFOLIO FOR HIGHER VALUE Key Reshape for higher growth while maintaining strong margins Portfolio Priorities Reduce non-core assets; Use cash to lower leverage to target range ~$30 million1 of cash generated from actions in 1H 2020: Cash Generation / Resource
Slide 10: Why PQ's Specialty Chemical Portfolio?
WHY PQ’s SPECIALTY CHEMICAL PORTFOLIO? #1 and #2 positions in nearly all product lines Sustainable growth from diverse underlying secular macro trends Strategic and extensive global manufacturing network Input cost small as percentage of customer total product cost Track record of innovation and cus
Slide 11: Supplemental Information
SUPPLEMENTAL INFORMATION 11
Slide 12: PQ's Products for a Sustainable Future
PQ’s PRODUCTS FOR A SUSTAINABLE FUTURE Inorganic Materials Drive ~ 75% of our Sales1 REFINING SERVICES CATALYSTS Largest North America recycler of spent sulfuric Remove sulfur from diesel fuel for landand acid, avoiding 1.5 million tons of landfill or deep marine transportation well disposal annuall
Slide 13: Performance Chemicals Transformation
PERFORMANCE CHEMICALS TRANSFORMATION MANUFACTURING NETWORK EXCELLENCE: OPTIMIZATION: Accelerate productivity Align footprint with EXPECTED DRIVERS: and throughput growth opportunities BENEFIT: Commercial $10 million to $15 effectiveness million Adjusted ENHANCE EBITDA on Productivity and CUSTOMER an
Slide 14: Enhanced Financial Flexibility with Additional Refinancings
ENHANCED FINANCIAL FLEXIBLITY WITH ADDITIONAL REFINANCINGS 2020 Refinancing Actions Improvement Since IPO Debt Reduction o Term Loan – 25 bps reduction ($ in millions) o ABL – 25 bps reduction, $50 million ~770 upsize 2,703 o Senior Secured Notes – New $650 1,933 million Term Loan, 275 bps reduction
Slide 15: Adjusted Free Cash Flow
ADJUSTED FREE CASH FLOW Full Year Full Year Full Year ($ in millions) 2019 2018 2017 Cash Flow from Operations before interest 401.9 377.5 364.5 and tax Less: Cash paid for taxes 17.4 23.8 29.2 Cash paid for interest1 116.8 105.1 170.1 Cash Flow from Operations 267.7 248.6 165.2 Less: Purchases of p
Slide 16: Quarterly Segment Sales, Adjusted EBITDA and Margins
QUARTERLY SEGMENT SALES, ADJUSTED EBITDA AND MARGINS First Half 2020 and Year 2019 Six MonthsFor the Quarter Ended Three Months Ended Ended Three Months Ended Year Ended March 31, June 30, June 30, March 31, June 30, September December December ($ in millions except %, unaudited) 2020 2020 2020 2019
Slide 17: Reconciliation of Sales and Adjusted EBITDA
RECONCILIATION OF SALES AND ADJUSTED EBITDA Year Ended December 31, 2015 2016 Pro Pro ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 forma 3 forma 3 2017 2018 2019 Reconciliation of sales and adjusted EBITDA Legacy PQ Sales 1 635.3 708.6 775.0 977.0 1,009.9 1,087.9 1,115.0 1,084.8
Slide 18: Reconciliations for Adjusted EBITDA
RECONCILIATIONS FOR ADJUSTED EBITDA Years 2005 – 2014 Legacy PQ1 Net Income (Loss) to Adjusted EBITDA Year Ended December 31, ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Reconciliation of net income (loss) attributable to Legacy PQ to Adjusted EBITDA Net income (loss) attributa
Slide 19: Reconciliations for Adjusted EBITDA
RECONCILIATIONS FOR ADJUSTED EBITDA 2005 – 2014 Legacy Eco Services1 Net Income (Loss) to Adjusted EBITDA Reconciliation Year Ended December 31, 2014 2014 ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 Successor Predecessor Reconciliation of net income (loss) attributable to Legacy Eco
Slide 20: Reconciliations for Adjusted EBITDA
RECONCILIATIONS FOR ADJUSTED EBITDA Years 2015 – 2019 Post-Business Combination PQ Net Income (Loss) to Adjusted EBITDA Year Ended December 31, 2015 2016 ($ in millions) Pro forma 1 Pro forma 1 2017 2018 2019 Reconciliation of net income (loss) attributable to PQ Group Holdings Inc. to Adjusted EBIT
Slide 21: Reconciliation of Net Income to Segment Adjusted EBITDA
RECONCILIATION OF NET INCOME TO SEGMENT ADJUSTED EBITDA First Half 2020 and Year 2019 Six Months Three Months Ended Ended Three Months Ended Year Ended March 31, June 30, June 30, March 31, June 30, September December December ($ in millions) 2020 2020 2020 2019 2019 30, 2019 31, 2019 31, 2019 Recon
Slide 22: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Descriptions to PQ Non-GAAP Reconciliations a) We use Adjusted EBITDA as a performance measure to evaluate our financial results. Because our Catalysts segment includes our 50% interest in the Zeolyst Joint venture, we include an adjustment for our 50% p
Slide 23: Shaping our path for a sustainable future
Shaping our path fora sustainable future . fe) PQ Corporation