Suncoke Energy, Inc. · NYSE:SXC
Suncoke Energy — Q3 2018 Earnings Presentation
22 slides from Suncoke Energy's earnings presentation, Oct 25, 2018
Slide 1: SunCoke Energy, Inc. Q3 2018 Earnings Conference Call
SunCoke Energy, Inc. Q3 2018 Earnings Conference Call October 25, 2018
Slide 2: Forward-Looking Statements
Forward-Looking Statements This slide presentation should be reviewed in conjunction with the Third Quarter 2018 earnings release of SunCoke Energy, Inc. (SXC) and conference call held on October 25, 2018 at 10:00 a.m. ET. Except for statements of historical fact, information contained in this prese
Slide 3: Q3 2018 Highlights
Q3 2018 Highlights Operating performance of coke and logistics segments in line with expectations Delivered strong Q3 ‘18 Adj. EBITDA of $66.0M and generated significant cash flow; ended quarter with ample liquidity of >$420M Completed majority of 2018 IHO oven rebuild campaign; Increasing 2018 IHO
Slide 4: IHO 2018 Performance
IHO 2018 Performance 2018 oven rebuild campaign remains on track for November completion; Increasing 2018 IHO Adj. EBITDA to $10M - $15M on production of ~950Kt 45 of 67 ovens from 2018 campaign have been completed, 39 of which have returned to full production by the end of Q3 2018 • Pleased with pe
Slide 5: IHO 2019 B-Battery Rebuild Plan
IHO 2019 B-Battery Rebuild Plan Expect to complete last phase of Indiana Harbor rebuild campaign in 2019 In 2019, anticipate to complete comprehensive rebuild on 57 2018E 2019E remaining B-battery ovens A Battery C Battery A Battery C Battery • Will begin work in early-2019 as weather permits and co
Slide 6: Indiana Harbor Performance Outlook
Indiana Harbor Performance Outlook Full year benefit of rebuilt A/C/D battery, along with increased production from rebuilt B-Battery ovens, expected to drive improved 2019 performance Anticipate IHO Adj. EBITDA improvement of Indiana Harbor Performance Outlook $28M - $33M for the full year 2018 vs.
Slide 7: Q3 2018 Financial Performance
Q3 2018 Financial Performance Q3 2018 Earnings Q3 ‘18 EPS of $0.18 is flat with the prior ($/share) ($ in millions) year quarter Earnings per Share Consolidated (diluted) Adj. EBITDA (1) • Solid cokemaking and logistic operating performance offset by higher depreciation expense $0.18 $0.18 $62.1 $66
Slide 8: Adjusted EBITDA – Q3 '17 to Q3 '18
Adjusted EBITDA – Q3 ‘17 to Q3 ‘18 (1) Consolidated Adj. EBITDA ~$4M higher due to strong performance at Indiana Harbor, increased throughput at CMT, and lower corporate costs ($ in millions) $2.1 $66.0 $62.1 $7.0 ($13.6) $8.4 • $5.1M – Strong volumes and yield from rebuilt ovens • Driven by substan
Slide 9: Domestic Coke Business Summary
Domestic Coke Business Summary Consolidated Q3 ’18 cokemaking performance in line with expectations Delivered Adj. EBITDA/ton(1) of ~$49 on Domestic Cokemaking Performance >1.0M tons of production (Production, Kt) $57/ton $56/ton • Granite City impacted by the increased timing $53/ton $49/ton and sc
Slide 10: Logistics Business Summary
Logistics Business Summary Strong Q3 ‘18 performance driven primarily by significant increase in CMT volumes Logistics Performance Delivered Q3 ‘18 Adj. EBITDA of $21.0M • Sustained trend of strong throughput $35.1M (Tons Handled, Kt) volumes due to continued favorable coal $19.7M $21.0M $12.6M $13.
Slide 11: Q3 2018 Liquidity
Q3 2018 Liquidity Reduced consolidated debt by $25M due to strong cash flow generation; consolidated liquidity of >$420M, including $220M at SXC standalone (Consolidated) Q3 ‘18 Total Debt $860M ($27.1) ($7.1) (1) Gross Leverage 3.37x $85.3 ($25.0) • $10.6M IHO oven ($0.7) $168.4 rebuild Consolidate
Slide 12: Questions
QUESTIONS tt SunCoke Energy*
Slide 13: Investor Relations
Investor Relations 630-824-1907 www.suncoke.com
Slide 14: Appendix
APPENDIX tt SunCoke Energy*
Slide 15: Definitions
Definitions Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted for any impairments, loss (gain) on extinguishment of debt, changes to our contingent consideration liability related to our acquisition of CMT and/or loss on the disposal of ou
Slide 16: Reconciliation to Adjusted EBITDA
Reconciliation to Adjusted EBITDA YTD YTD ($ in millions) Q1 '17 Q2 '17 Q3 '17 Q4 '17 FY '17 Q1 '18 Q2 '18 Q3 '18 Q3 '18 Q3 '17 Net cash provided by operating activities $ 29.5 $ 24.9 $ 73.9 $ 20.2 $ 148.5 $ 57.3 $ 28.0 $ 85.3 $ 170.6 $ 128.3 Depreciation and amortization expense 33.3 33.3 30.6 31.0
Slide 17: 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 Domestic Corporate (1) ($ in millions, except per ton data) Coke Brazil Coke Logistics and Other(2) Consolidated Q3 2018 Adjusted EBITDA $49.1 $4.5 $21.0 ($8.6)
Slide 18: Balance Sheet & Debt Metrics
Balance Sheet & Debt Metrics As of 09/30/2018 Balance SXC Attributable Attributable Consolidated to SXCP ($ in millions) to SXC Cash $ 168 $ 24 $ 144 Available Revolver Capacity 254 178 76 Total Liquidity $ 422 $ 202 $ 220 Gross Debt (Long and Short-term) $ 860 $ 816 $ 44 Net Debt (Total Debt less C
Slide 19: 2018 Revised Guidance
2018 Revised Guidance Expect to deliver FY 2018 Consolidated Adjusted EBITDA at top end of $240M to $255M guidance range 2017 2018 Original 2018 Revised Metric Results Guidance Guidance Consolidated Adjusted EBITDA(1) Adj. EBITDA Consolidated $234.7M $240M – $255M $240M – $255M and Attrib. to Attrib
Slide 20: 2018 Revised Capex
2018 Revised Capex 2018 Original CapEx Guidance ($ in millions) SXC SXCP Consolidated Ongoing (ex. IHO rebuilds) $7 $25 $32 IHO Oven Rebuild Initiative 27 0 27 Total Ongoing CapEx $34 $25 $59 Other / Expansion 0 1 1 Environmental Project (Gas Sharing) 0 35 35 Total CapEx $34 $61 $95 2018 Revised Cap
Slide 21: 2018E Guidance Reconciliation
2018E Guidance Reconciliation 2018E 2018E ($ in millions) Low High Net cash provided by Operating activities $150 $165 Depreciation and amortization expense(1) (146) (138) Changes in working capital and other 27 19 Loss from equity method investment (5) (5) Net Income $26 $41 Loss from equity method
Slide 22: Thermal Coal Export Profitability
Thermal Coal Export Profitability Solid API2 benchmark price should continue to support CMT ILB producers’ competitiveness in maintaining viable exports $98 $4 Believe ILB export thermal ($15) solidly profitable at Q3 ‘18 ($19) API2 benchmark pricing of ($6) ~$98/t • Based on average ILB cash ($21)