Graftech International Ltd. · NYSE:EAF
Graftech International — Q2 2022 Earnings Presentation
17 slides from Graftech International's earnings presentation, Aug 5, 2022
Slide 1: Q2 2022 Results
Q2 2022 Results August 5, 2022 NYSE: EAF www.graftech.com
Slide 2: Forward-Looking Statements
Forward-Looking Statements CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: This presentation and related discussions may contain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements
Slide 3: Why GrafTech
Why GrafTech An industry leader in the production of high-quality graphite electrodes o Graphite electrodes are essential to the operation of an electric arc furnace (“EAF”) o Reflecting environmental benefits, growth in EAF steelmaking expected to continue outpacing integrated steelmaking Sustainab
Slide 4: Prioritizing Safety
Prioritizing Safety Total Recordable Incident Rate (“TRIR”)(1) 1.55 0.95 0.80 0.51 0.49 2018 2019 2020 2021 Q2 YTD 2022 (1) TRIR measured per 200,000 hours worked. 4
Slide 5: Steel Capacity Utilization Rates
Steel Capacity Utilization Rates ▪ Global steel production, excluding China, of 209 million tons in Q2 2022 versus 223 million tons in Q2 2021 (1) ▪ U.S. utilization rates remain elevated compared to the global industry Steel Capacity Utilization Rates(2) 82% 84% 82% 80% 81% 77% 72% 71% 73% 71% 72%
Slide 6: Consistent Production and Sales Volume
Consistent Production and Sales Volume ▪ Q2 2022 production volume up 1%, sales volume down 1% and net sales up 10% compared to Q2 2021 ▪ Q2 2022 weighted-average realized non-LTA prices up 46% compared to Q2 2021 and consistent with Q1 2022 Production Volume(1) Sales Volume Net Sales (in thousands
Slide 7: Earnings and Cash Flow
Earnings and Cash Flow ▪ Net income and adjusted net income(1) of $115 million; Earnings per share (“EPS”) and adjusted EPS(1) of $0.44 ▪ Adjusted EBITDA(1) of $158 million and adjusted EBITDA margin(2) of 44% ▪ Operating cash flow of $60 million and adjusted free cash flow(1) of $48 million ▪ Conve
Slide 8: Balance Sheet Strength and Financial Flexibility
Balance Sheet Strength and Financial Flexibility Strengthening Capital Structure through Meaningful Cash Flow Generation and Significant Deleveraging ▪ Reduced debt by $40 million in Q2 2022, for a total reduction of $110 million in the first half of 2022 ▪ Gross Debt/Adjusted EBITDA(1) of 1.4x as o
Slide 9: Delivering on Capital Allocation Strategy
Delivering on Capital Allocation Strategy Reducing Debt Remains a Priority ▪ Further strengthening our balance sheet ▪ Supporting strategic flexibility Returning Capital to Stockholders ▪ Repurchased an aggregate of $30 million of our common stock in Q2 2022, for a total of $60 million repurchased y
Slide 10: Current Operating Environment Remains Volatile
Current Operating Environment Remains Volatile Steel Industry Trends are Softening ▪ Global steel prices have come off recent highs ▪ Year-to-date global steel production, excluding China, has declined 6% year-over-year(1) ▪ Diverging trends in different geographical regions with certain markets, su
Slide 11: GrafTech: Key Areas of Focus
GrafTech: Key Areas of Focus Navigating Near-term Challenges in the Operating Environment ▪ Further strengthening our commercial capabilities ▪ Prudently managing operating and capital expenditures ▪ Prioritizing capital allocation to reduce debt ▪ Investing in our product and service capabilities L
Slide 12: Why GrafTech
Why GrafTech An industry leader in the production of high-quality graphite electrodes Sustainable competitive advantages Focus on providing value-added services and solutions for customers Prudent and disciplined capital allocation strategy 12
Slide 13: Non-GAAP Financial Measures
Non-GAAP Financial Measures In addition to providing results that are determined in accordance with GAAP, we have provided certain financial measures that are not in accordance with GAAP. EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted EPS, free cash flow, adjusted fre
Slide 14: Reconciliation to Adjusted Net Income
Reconciliation to Adjusted Net Income For the Three Months Ended June 30, Sept 30, Dec 31, Mar 31, June 30, ($ in thousands) 2021 2021 2021 2022 2022 Net income $ 28,165 $ 119,886 $ 141,480 $ 124,183 $ 114,997 Adjustments, pre-tax: Pension and OPEB plan expenses (benefits)(1) 430 434 (3,840) 551 553
Slide 15: Reconciliation to Adjusted EPS
Reconciliation to Adjusted EPS For the Three Months Ended June 30, Sept 30, Dec 31, Mar 31, June 30, 2021 2021 2021 2022 2022 EPS $ 0.11 $ 0.45 $ 0.54 $ 0.47 $ 0.44 Adjustments per share, pre-tax: Pension and OPEB plan expenses (benefits)(1) - - (0.02) - - Public offerings and related expenses(2) -
Slide 16: Reconciliation to Adjusted EBITDA
Reconciliation to Adjusted EBITDA For the Three Months Ended June 30, Sept 30, Dec 31, Mar 31, June 30, ($ in thousands) 2021 2021 2021 2022 2022 Net income $ 28,165 $ 119,886 $ 141,480 $ 124,183 $ 114,997 Add: Depreciation and amortization 16,292 15,584 17,301 14,434 14,012 Interest expense 15,994
Slide 17: Reconciliation to Free Cash Flow and Adjusted Free Cash Flow
Reconciliation to Free Cash Flow and Adjusted Free Cash Flow For the Three Months Ended June 30, Sept 30, Dec 31, Mar 31, June 30, ($ in thousands) 2021 2021 2021 2022 2022 Net cash provided by operating activities $ 86,330 $ 134,256 $ 100,029 $ 146,316 $ 60,123 Capital expenditures (11,878) (14,374
GrafTech International — Q2 2022 Earnings Presentation on 6ix