Suncoke Energy, Inc. · NYSE:SXC
Suncoke Energy — Q3 2013 Earnings Presentation
24 slides from Suncoke Energy's earnings presentation, Oct 25, 2013
Slide 1: SunCoke Energy, Inc. Q3 2013 Earnings Conference Call
SunCoke Energy, Inc. Q3 2013 Earnings Conference Call October 25, 2013
Slide 2: Forward-Looking Statements
Forward-Looking Statements TM This slide presentation should be reviewed in conjunction with the Third Quarter 2013 earnings releases of SunCoke Energy, Inc. (SunCoke) and the conference call held on October 25, 2013 at 11:30 a.m. ET. Some of the information included in this presentation constitutes
Slide 3: Q3 2013 Highlights
Q3 2013 Highlights Continued Operations Excellence • Sustained high-level of operating performance in coke business • Driving coal cash cost performance • Maintained top quartile safety performance Positioned for Future Organic Growth • Indiana Harbor—renewed contract with ArcelorMittal includes ret
Slide 4: Q3 2013 Earnings Overview
Q3 2013 Earnings Overview Earnings Per Share (diluted) Q3 2013 EPS of $0.09 reflects • Challenging coal price environment $0.45 • Lower production and higher depreciation $0.32 at Indiana Harbor $0.24 • Income attributable to SXCP public holders $0.08 $0.09 $0.03 2012 2013 Strong Q3 liquidity positi
Slide 5: Q3 2013 Financial Results
Q3 2013 Financial Results Q3'13 vs. Revenues lower by 19% ($ in millions) Q3'13 Q3'12 Q3'12 • Reflects impact of lower coal prices in Domestic Coke Sales Volumes 1,084 1,116 (32) coke and coal segments Coal Sales Volumes 433 392 41 Adjusted EBITDA down 31% Revenue $390.5 $480.5 ($90.0) • Coal weakne
Slide 6: Adjusted EBITDA Bridge – Q3 '12 to Q3 '13
Adjusted EBITDA(1) Bridge – Q3 ‘12 to Q3 ‘13 Adjusted EBITDA impacted by coal business headwinds, Indiana Harbor performance and acquisition costs ($ in millions) ($1.0) ($4.5) ($13.3) ($1.5) $0.7 $73.7 ($3.4) • India JV ($2.1M) • Acquisition costs(2) ($2.4M) • MLP public company expense ($0.9M) $50
Slide 7: Diluted EPS Bridge – Q3 '12 to Q3 '13
Diluted EPS Bridge – Q3 ‘12 to Q3 ‘13 EPS impacted by weak coal results, higher depreciation costs and income attributable to SXCP, partly offset by lower taxes • ($0.08) ($0.33) attributable to • ($0.02) SXCP public accelerated $0.45 depreciation at unitholders Indiana Harbor ($0.07) $0.10 ($0.06)
Slide 8: Domestic Coke Business Summary
Domestic Coke Business Summary Adjusted EBITDA per ton was $59 on lower sales volumes Domestic Coke Production Domestic Coke Adjusted EBITDA(1) Per Ton (thousands of tons) ($ in millions, except per ton amounts) 1,097 1,097 1,082 1,082 1,081 1,081 1,081 $ 62 /ton 1,051 $ 58 /ton (2) $ 57/ton $ 59/to
Slide 9: Indiana Harbor's Journey
Indiana Harbor’s Journey Expect Adjusted EBITDA uplift of at least $25M by 2015 from contract renewal and refurbishment 2015 2014 Anticipate achieving Refurbishment completed early yield, volume and 2013 2014; new equipment installed operating cost Refurbishment ~50% 2H 2014 targets for full year 20
Slide 10: India Coke
India Coke Significant currency headwinds more than offset improved capacity utilization and sales at VisaSunCoke • Equity loss of $2.3M Visa SunCoke – $2.4M due to FX losses on coal shipments Q3'13 Q2'13 – Implementing hedging program to SXC share Coke Production Volumes (thousands of tons) 45 34 a
Slide 11: Coal Mining Financial Summary
Coal Mining Financial Summary Coal Mining Adjusted EBITDA(1) and Avg. Sales Price/Ton(2) Q3 2013 Adjusted EBITDA down ($ in millions, except per ton amounts) $165 $166 $13.3 million • Driven by ~$46 per ton decline in average price, (3) $127 $118 (4) $123 partially offset by lower cash cost per ton
Slide 12: SXC Liquidity Position
SXC Liquidity Position Ended quarter with strong cash position and revolver availability of $148M ($ in millions) $348.1 $23.2 ($36.9) $12.3 Attributable to ($62.8) $115.6 SXCP $268.8 Includes: ($15.1) Post Q3 Close: Includes: On 10/1/13 closed • Tax credits paid to customers: • Indiana Includes: ($
Slide 13: FY 2013 Adjusted EBITDA Outlook
(1) FY 2013 Adjusted EBITDA Outlook Expect FY 2013 Adjusted EBITDA(1) to be between $215M and $230M ($ in millions) Original Guidance: $205 - $230 million $60-$75 $265.7 $50.7 Benefits from: $215-$230 • Brazil dividend • Indiana Harbor $52.4 renewal • Coal logistics $52.3 FY 2012 Q1 2013 Q2 2013 Q3
Slide 14: FY 2013 EPS Outlook
(1) FY 2013 EPS Outlook Expect FY 2013 EPS(1) to be between $0.35 - $0.55 ($ per share) Original Guidance: $0.30 - $0.55 $0.15-$0.35 $1.40 $0.35 - $0.55 $0.09 $0.08 $0.03 FY 2012 EPS Q1 2013 EPS Q2 2013 EPS Q3 2013 EPS Estimated Estimated FY 2013 attributable to SXC attributable attributable attribu
Slide 15: Growth Strategy
Growth Strategy TM Area of focus: Iron Ore Cokemaking Coal Logistics Processing Summary: Greenfield development Selective acquisition of coal Investment in ferrous side of and/or acquisition of handling & processing steel value chain, such as in existing cokemaking assets, with long-term off- concen
Slide 16: Questions
QUESTIONS SXC Q3 2013 Earnings Call 15
Slide 17: Investor Relations
Investor Relations: 630-824-1907 www.suncoke.com
Slide 18: Appendix
APPENDIX SXC Q3 2013 Earnings Call 17
Slide 19: Definitions
Definitions • Adjusted EBITDA represents earnings before interest, taxes, depreciation, depletion and amortization (“EBITDA”) adjusted for sales discounts and the interest, taxes, depreciation, depletion and amortization attributable to our equity method investment. EBITDA reflects sales discounts i
Slide 20: Reconciliation from Net Income to Adjusted EBITDA
Reconciliation from Net Income to Adjusted EBITDA $ in millions Q3 2013 Q2 2013 Q1 2013 FY 2012 Q4 2012 Q3 2012 Q2 2012 Q1 2012 Net Income 12.3 12.7 6.4 102.5 29.0 32.9 24.0 16.6 Subtract: Depreciation, depletion and amortization (23.2) (23.4) (23.9) (80.8) (23.3) (18.9) (20.2) (18.4) Subtract: Inte
Slide 21: Reconciliation of Segment Adjusted EBITDA and Adjusted EBITDA per ton
Reconciliation of Segment Adjusted EBITDA and Adjusted EBITDA per ton Domestic Brazil India Coal Coal $ in millions, except per ton data Coke Coke Coke (1) Mining Logistics Corporate Combined Q3 2013 Adjusted EBITDA 64.3 1.5 (2.1) (2.6) 0.7 (11.1) 50.7 Sales Volume (thousands of tons) 1,084 221 47 4
Slide 22: SXC: 2013 Guidance Summary
SXC: 2013 Guidance Summary Expect to end year in upper half of initial Adjusted EBITDA and EPS guidance Metric 2013 Guidance Adjusted EBITDA (1) Prior: Consolidated $215 – $230 million $205 - $230 million Attributable to SXC Shareholders $175 – $188 million $165 - $190 million EPS Attributable to SX
Slide 23: SXC – Expected 2013 EBITDA Reconciliation
SXC – Expected 2013 EBITDA Reconciliation 2013E Net Income to Adjusted EBITDA Reconciliation - SXC 2013E 2013E (in millions) Low High Net Income $51 $57 Depreciation, depletion and amortization 96 95 Interest expense, net 54 54 Income tax expense 7 14 EBITDA $208 $220 Sales discounts 7 7 Adjustment
Slide 24: 2013 Estimated Capital Expenditures & Investments
2013 Estimated Capital Expenditures & Investments For Year Ended December 31, 2013 • SXC includes ~$15M coke ($ in millions) SXC SXCP Consolidated and ~$20M coal On-Going $35 $14 $49 • SXCP reflects 100% of Environmental capital expenditures at $2 $21 $23 Haverhill and Middletown Remediation Expansi