Suncoke Energy, Inc. · NYSE:SXC
Suncoke Energy — BMO 2023 Global Metals, Mining and Critical Minerals Conference
38 slides from Suncoke Energy's conference presentation, February 2023
Slide 1: SunCoke Energy Investor Presentation
SunCoke Energy Investor Presentation February 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements 2 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). Forward-looking statements often may be identified by the use of such words a
Slide 3: SunCoke Overview
SunCoke Overview 3 Largest independent coke producer in North America with best-in-class operations in Cokemaking and Logistics Business Segments Key Financial Highlights Cokemaking Consolidated Adjusted EBITDA(1) • 4.2M tons of furnace coke capacity with capability to produce both foundry and blast
Slide 4: Advantaged Assets Driving Value Creation
Advantaged Assets Driving Value Creation 4 Advantaged Assets with Steady Cash Flow Balanced Capital Strong Balance Sheet Leading Market Positions Generation Allocation Strategy • Industry leading • No material debt • Supported by • Significant value cokemaking and maturities until 2026 contracts und
Slide 5: Strategically Located Network of Assets
Strategically Located Network of Assets 5 North American Operations Cokemaking Advantages Legend • Domestic assets strategically located to serve domestic blast furnaces as well as 1 Jewell Coke ME export market 2 Indiana Harbor VT MN NH – Three facilities co-located with customer 3 Haverhill I & II
Slide 6: Cokemaking Overview
Cokemaking Overview
Slide 7: Durable Model with Strong Market Dynamics
Durable Model with Strong Market Dynamics 7 7 Stable Long-term Favorable Long-term Coke Superior Asset Characteristics Business Model Supply/Demand Dynamics • Steady cash flow • Newest fleet of • Any increased domestic generation cokemaking facilities and steel demand, blast equipment in the industr
Slide 8: Long-term, Contracted Earnings Stream
Long-term, Contracted Earnings Stream 8 8 Long-term, take-or-pay contracts generate stable cash flow and insulate business from industry cyclicality Take-or-Pay Contract Provisions Contract Observations General Provisions • Customers required to take the contract-maximum coke • Take-or-pay nature pr
Slide 9: Shrinking Coke Supply Base Creates Opportunity
Shrinking Coke Supply Base Creates Opportunity 9 Expect aging by-product battery closures to continue, creating opportunity for SunCoke Aging Cokemaking Facilities(1) Aging Capacity Creates Opportunity Average Age % of US and Canada Coke • Closures driven by combination of deteriorating facilities C
Slide 10: SunCoke's Superior Assets Well Positioned for Long Term
SunCoke’s Superior Assets Well Positioned for Long Term 10 Value Proposition Competitive Advantage • Efficient operating cost structure and capital • SunCoke’s average asset age is ~23 years investment requirements Superior Asset Age compared to ~45 years for all other US/Canadian capacity • Opportu
Slide 11: Heat Recovery vs By-Product Design Comparison
Heat Recovery vs By-Product Design Comparison 11 SunCoke Heat Recovery Traditional By-Product Steam Gas (COG) Light Oil Water Tar Air VM Air Air Natural Gas (or other source) SunCoke Heat Recovery Traditional By-Product Pressurization Negative Pressure Positive Pressure Air Emissions MACT Standard f
Slide 12: Environmental Signature – Best Available Technology
Environmental Signature – Best Available Technology 12 SunCoke’s operations minimize environmental impact and offer the best available technology for an important input to the steel industry SunCoke's CO2e Emissions SunCoke’s innovative, superior heat recovery technology sets the 0.14 0.12 0.13 stan
Slide 13: Greenhouse Gases
Greenhouse Gases 13 SunCoke primarily supplies coke to the least carbon intensive steelmaking industry in the world. Comparison of Carbon Intensity of the Top 5 Global Steel Steel Industry CO2 Emissions by Country(1) Producing Countries (tons CO2/ton Steel)(1) Rest of the World 2.2 Ukraine China 1.9
Slide 14: Safety Excellence
Safety Excellence 14 SunCoke’s industry leading safety performance sets the standard for safe cokemaking SunCoke’s Total Recordable Incident Rate(1) SunCoke’s 2022 TRIR 0.69 0.85 0.81 0.76 Comparable Industry Rates (2021 BLS Data) 0.69 Iron and Steel Mills 2.8 Other Petroleum and Coal 4.3 Products (
Slide 15: Recent Growth/Diversification Opportunities
Recent Growth/Diversification Opportunities 15 Successful entry into profitable export and foundry coke markets; Non-binding LOI to produce granulated pig iron provides opportunity to further diversify and enter the metallics market Foundry Coke Export Coke Granulated Pig Iron • Foundry coke is a di
Slide 16: Logistics Overview
Logistics Overview
Slide 17: Advantaged Logistics Facilities
Advantaged Logistics Facilities 17 Strategically located facilities with multimodal connectivity • Gulf Coast facility with direct rail access and cape size loading capabilities • Annual outbound throughput capacity of ~15Mt and storage capacity of ~1.5Mt • Largest export terminal on the U.S. Gulf C
Slide 18: Strategic Network of Low Cost Facilities
Strategic Network of Low Cost Facilities 18 Well Positioned • Strategically located assets with access to barge, rail and truck Domestic Logistics • Provide key logistics services for various metallurgical and thermal coal producers and Facilities consumers • Only dry-bulk, rail-serviced terminal on
Slide 19: Q4 and FY 2022 Financials and 2023 Guidance
Q4 and FY 2022 Financials and 2023 Guidance
Slide 20: Q4 & FY 2022 Financial Performance
Q4 & FY 2022 Financial Performance 20 Q4 and FY 2022 Earnings Review Q4 '22 EPS of $0.14 per share, down $0.01 versus prior year ($/share) ($ in millions) quarter Diluted EPS Adj. EBITDA(1) • Lower export coke contribution margins partially offset by lower +$0.67 +$22.3 interest expense FY '22 EPS o
Slide 21: Domestic Coke Business Summary
Domestic Coke Business Summary 21 FY '22 Domestic Coke Adjusted EBITDA above the revised guidance range driven by high contribution margins on export coke sales Domestic Coke Performance (Coke Production, Kt) $76.0M $76.6M $263.4M $64.3M $243.4M $234M - $242M $53.4M $46.5M 4,162 4,023 4,000 1,031 1,
Slide 22: Logistics Business Summary
Logistics Business Summary 22 FY '22 Logistics Adjusted EBITDA strong results driven by strong volume/price as well as minimal high water costs at CMT Logistics Performance (Tons Handled, Kt) $12.6M $12.5M $12.9M $11.7M $49.7M $9.6M $43.5M $47M - $50M 5,809 5,721 22,291 ~22,000 5,525 5,236 19,933 4,
Slide 23: FY 2022 Capital Deployment
FY 2022 Capital Deployment 23 Strong cash flow generation deployed strategically towards operational capital needs, deleveraging, and increased dividends to shareholders (Consolidated) 12/31/2021 12/31/2022 Revolver Total Debt $627M $544M Availability: Gross Leverage (1) 2.28x 1.83x $315.0M Net Leve
Slide 24: 2023 Guidance
2023 GUIDANCE )
Slide 25: 2023 Domestic Coke Business Outlook
2023 Domestic Coke Business Outlook 25 Domestic Coke Adj. EBITDA estimated to be $234M - $242M; Expect to run at full capacity with continued growth in foundry market Domestic Coke Performance • Continue to operate coke fleet at full (Coke Sales, Kt) capacity $263.4M • ~3,600Kt contracted furnace co
Slide 26: 2023 Logistics Business Outlook
2023 Logistics Business Outlook 26 Logistics Adjusted EBITDA estimated to be $47M - $50M; Anticipate similar volumes at CMT year-over-year Logistics Performance 2023 outlook based on current (Tons Handled, Kt) expectations for thermal coal $43.5M $49.7M $47M - $50M export volumes and pricing 22,291
Slide 27: 2023 Guidance Summary
2023 Guidance Summary 27 Expect 2023 Consolidated Adjusted EBITDA of $250M - $265M; 2023 Free Cash Flow of $105M - $120M 2022 2023 Metric Results Guidance (1) $297.7M $250M - $265M Adjusted EBITDA Consolidated Domestic Coke EBITDA $263.4M $234M - $242M Logistics EBITDA $49.7M $47M - $50M Domestic Co
Slide 28: Balance Sheet & Debt Metrics
Balance Sheet & Debt Metrics 28 As of 12/31/2022 As of 12/31/2021 Cash $ 90 $ 64 Available Revolver Capacity $ 315 $ 229 Total Liquidity $ 405 $ 293 Gross Debt (Long and Short-term) $ 544 $ 627 Net Debt (Total Debt less Cash) $ 454 $ 563 LTM Adj. EBITDA $ 298 $ 275 Gross Debt / LTM Adj. EBITDA 1.83x
Slide 29: Appendix
APPENDIX )
Slide 30: Non-GAAP Financial Measures
30 NON-GAAP FINANCIAL MEASURES In order to assist readers in understanding the core operating results that our management uses to evaluate the business, we describe our non- GAAP measures referenced in this presentation below. In addition to U.S. GAAP measures, this presentation contains certain non
Slide 31: Reconciliation to Adjusted EBITDA and Adjusted EBITDA attributable to SXC
Reconciliation to Adjusted EBITDA and Adjusted EBITDA 31 attributable to SXC ($ in millions) Q4 '21 FY '21 Q1 '22 Q2 '22 Q3 '22 Q4 '22 FY '22 Net income (loss) attributable to SunCoke Energy, Inc. $ 12.7 $ 43.4 $ 29.5 $ 18.0 $ 41.4 $ 11.8 $ 100.7 Net income attributable to noncontrolling interests 1
Slide 32: 2023 Guidance Reconciliation
2023 Guidance Reconciliation 32 ($ in millions) Low High Net Income $59 $76 Depreciation and amortization expense 136 132 Interest expense, net 31 29 Income tax expense 24 28 Adjusted EBITDA (Consolidated) $250 $265 Adjusted EBITDA attributable to noncontrolling interest(1) (9) (9) Adjusted EBITDA a
Slide 33: SXC FCF/Share Reconciliation
SXC FCF/Share Reconciliation 33 2023E ($ in millions except per share amounts) Low End High End Net Income $59 $76 Depreciation and amortization expense 136 132 Interest expense, net 31 29 Income tax expense 24 28 Adjusted EBITDA $250 $265 Cash interest (28) (26) Cash taxes (12) (16) Total capex (95
Slide 34: Adjusted EBITDA and Adjusted EBITDA per ton
Adjusted EBITDA and Adjusted EBITDA per ton 34 Reconciliation of Segment Adjusted EBITDA and Adjusted EBITDA per Ton Domestic Corporate and Brazil Coke Logistics Consolidated ($ in millions, except per ton data) Coke Other(1) FY 2022 Adjusted EBITDA $263.4 $14.5 $49.7 ($29.9) $297.7 Sales Volume (th
Slide 35: Steel Production Input Cycle
Steel Production Input Cycle 35 site) Source: Global Efficiency Intelligence, November 2019 report: “An International Benchmarking of Energy and CO2 Intensities”
Slide 36: SunCoke's Cokemaking Process
SunCoke’s Cokemaking Process 36
Slide 37: Foundry Coke Overview
Foundry Coke Overview 37 Foundry coke customers focus on fundamentally different parameters than blast furnace coke customers with respect to coke size and quality Foundry coke is used in cupolas to produce casted iron products for the Construction, Industrial, and Automotive Industries
Slide 38: SunCoke Energy
3 SunCoke Energy”
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