Slide 1: Third Quarter 2019 Earnings Presentation
Third Quarter 2019 Earnings Presentation October 31, 2019 © 2019 ATI. All rights reserved.
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements. Actual results may differ materially from results anticipated in the forward-looking statements due to various known and unknown risks, many of which we are unable to predict or control. These and additional risk facto
Slide 3: Third Quarter 2019 Highlights
Third Quarter 2019 Highlights $M (excl. EPS) Q3 2019 Q3 2018 % Chg. Revenue $1,018.7 $1,020.2 - Revenue (excl. divestitures) $1,011.1 $970.7 +4% Segment Operating Profit $99.2 $105.5 (6%) Segment Operating Profit Margin 9.7% 10.3% (60 b.p.) Net Income* $111.0 $50.5 +120% Net Income * $44.9 $50.5 (11
Slide 4: Five Strategic Imperatives Drive Our Focus
Five Strategic Imperatives Drive Our Focus • Execute aerospace production ramp • Sustainable profitability in Flat Rolled Products • Continue to improve the balance sheet • Create the foundation for future competitiveness and growth • Expand our competitive moat © 2019 ATI. All rights reserved. 4
Slide 5: High Performance Materials & Components
High Performance Materials & Components Segment ($M) Q2 ‘18 Q3 ‘18 Q4 ‘18 Q1 ‘19 Q2 ‘19 Q3 ‘19 Q3 ‘19 YOY Revenue $591.9 $585.5 $596.1 $601.2 $642.4 $551.7 (6%) Revenue (ex. divestitures) $545.2 $536.0 $548.2 $553.6 $602.3 $544.1 +2% Operating Profit $97.9 $76.0 $76.0 $72.6 $98.9 $78.8 +4% % of Sale
Slide 6: High Performance Materials & Components: Revenue by Market
High Performance Materials & Components Revenue by Market Q3 2019 Revenue (excluding divestitures) Aerospace & Defense Medical Gov’t & Jet Engine Production Defense 7% Energy 14% 7% 2020 – 2024 CAGR 4.5% Number of Engines Airframe Other 20% 7% Next Generation Legacy Jet Engine 45% Source: ATI Market
Slide 7: Flat Rolled Products
Flat Rolled Products Segment ($M) Q2‘18 Q3 ‘18 Q4 ‘18 Q1 ‘19 Q2 ’19 Q3 ’19 Q3 ‘19 vs. Q2 ‘19 Revenue $417.6 $434.7 $441.8 $403.6 $438.0 $467.0 +7% Operating Profit / (Loss) $26.1 $29.5 $11.3 $(10.9) $15.6 $20.4 +31% % of Sales 6.3% 6.8% 2.6% (2.7)% 3.6% 4.4% +80 b.p. Third Quarter vs. Prior Year ATI
Slide 8: Flat Rolled Products: Revenue by Market & Product
Flat Rolled Products Revenue by Market & Product Q3 2019 Revenue by Market Q3 2019 Revenue by Product Construction & Mining Energy Food Equip/ 8% 7% Appliance 11% Electronics Standard Value 9% Stainless Precision & Eng. 29% Strip Other 30% 7% Aero & Def 14% Oil & Gas 7% Automotive 29% Titanium Nicke
Slide 9: Financial Update
Financial Update Free Cash Flow Balance Sheet and Cash Flow $ millions Cash and liquidity at 9/30/2019 2015 2016 2017 2018 2019E $511 million cash on hand Extended ABL agreement through September 2024 ~475 Upsized by $100M; $500M total capacity ~$460 million available on ABL w/ no outstand
Slide 10: Financial Performance Outlook
Financial Performance Outlook High Performance Materials & Components Segment Q4 2018 business divestiture adjustments Reduce revenue by $48 million Q4 2019 outlook vs. adjusted prior year Revenue increases by a mid-single digit percentage YOY Operating profit margin improvement of ~210 b.
Slide 11: Q&A
Third Quarter 2019 Earnings Presentation Q&A © 2019 ATI. All rights reserved. 11
Slide 12: Additional Materials Appendix
Additional Materials Appendix 12
Slide 13: Non-GAAP Financial Measures
Non-GAAP Financial Measures 13 © 2019 ATI. All rights reserved. January 2019 13
Slide 14: Non-GAAP Financial Measures
Non-GAAP Financial Measures 14 © 2019 ATI. All rights reserved. January 2019 14
Slide 15: Non-GAAP Financial Measures
Non-GAAP Financial Measures 15 © 2019 ATI. All rights reserved. January 2019 15