Suncoke Energy, Inc. · NYSE:SXC
Suncoke Energy — Q3 2019 Earnings Presentation
20 slides from Suncoke Energy's earnings presentation, Nov 5, 2019
Slide 1: SunCoke Energy, Inc. Q3 2019 Earnings Conference Call
SunCoke Energy, Inc. Q3 2019 Earnings Conference Call Exhibit 99.2
Slide 2: Forward-Looking Statements
This slide presentation should be reviewed in conjunction with the Third Quarter 2019 earnings release of SunCoke Energy, Inc. (SunCoke) and conference call held on November 5, 2019 at 10:30 a.m. ET. Except for statements of historical fact, information contained in this presentation constitutes “fo
Slide 3: Q3 2019 Highlights
Q3 2019 Highlights Operations: Delivered Q3 ‘19 Adjusted EBITDA of $66.7M and YTD 2019 Adjusted EBITDA of $197.1; ended quarter with ample liquidity position of ~$338M Continued solid operating performance across the coke fleet Remain on track with 2019 IHO oven rebuild campaign; well positioned to
Slide 4: Q3 2019 Financial Performance
Q3 2019 Financial Performance See appendix for a definition and reconciliation of Adjusted EBITDA and Adjusted EPS. Coke Adjusted EBITDA includes Domestic Coke and Brazil Coke. Q3 ‘19 EPS of ($1.81) includes impact of CMT long-lived asset and Logistics goodwill impairment related charges of ($1.94)
Slide 5: Adjusted EBITDA – Q3 '18 to Q3 '19
Adjusted EBITDA(1) – Q3 ‘18 to Q3 ‘19 See appendix for a definition and reconciliation of Adjusted EBITDA (1) $2.1M – Higher volumes at IHO $7.6M – Shorter duration and scope of outage work at GCO Lower CMT volumes ($ in millions) (1) Q3 ‘19 performance driven by strong Domestic Coke operations offs
Slide 6: Domestic Coke Performance
Domestic Coke Performance Domestic Coke Business Summary /ton /ton /ton $55/ton /ton Sales Tons (Coke Production, Kt) Delivered Adj. EBITDA/ton(1) of ~$57 vs. ~$49 in Q3 ‘18 Increased production at IHO due to oven rebuilds Significantly lower outage costs at GCO due to reduced scope and shorter dura
Slide 7: Logistics Performance
Logistics Business Summary M M M M M (Tons Handled, Kt) Logistics segment contributed $9.6M to Q3’ 19 and $34.1M to YTD Adj. EBITDA CMT contributed $7.4M to Q3 ‘19 and $25.9M to YTD Adj. EBITDA Depressed export pricing and lower demand continued to impact export volumes in Q3 Anticipate FY ‘19 CMT t
Slide 8: Q3 2019 Liquidity
Revolver Availability: $244.5M (Consolidated) Q3 ’19 Total Debt $801.3M Gross Leverage(1) 3.05x Gross leverage for Q3 2019 calculated using LTM Adjusted EBITDA Average bond repurchase price of $0.934 per $1.00 face value (8.95% YTW), resulting in ~$50M of face value SXCP notes repurchased during Q3
Slide 9: SXC Capital Allocation Priorities
SXC Capital Allocation Priorities Capital allocation tools deployed demonstrates SunCoke’s financial flexibility; will remain disciplined, opportunistic and nimble to maximize stakeholders value long-term Capital Allocation Priorities Organic Growth Projects, Capital Expenditures and M&A Return Addi
Slide 10: 2019 Revised Guidance Summary
2019 Revised Guidance Summary See appendix for a definition and reconciliation of Adjusted EBITDA. Capital expenditures exclude the impact of capitalized interest. Included in Operating Cash Flow. Guidance updated to reflect expected financial impact at logistics due to CMT coal export customer bank
Slide 11: 2019 Key Initiatives
Drive strong operational and safety performance while optimizing asset utilization Successfully execute on capital plan Deliver Operations Excellence and Optimize Asset Base Complete 57 planned B-battery oven rebuilds and deliver ~$22M of Adj. EBITDA Complete last phase of oven rebuilds at Indiana H
Slide 12: Appendix
APPENDIX
Slide 13: Adjusted EBITDA definition
Adjusted EBITDA represents earnings before interest, loss (gain) on extinguishment of debt, taxes, depreciation and amortization (“EBITDA”), adjusted for impairments, loss on extinguishment of debt, changes to our contingent consideration liability related to our acquisition of CMT, loss on the disp
Slide 14: Reconciliation to Adjusted EBITDA, Adjusted Net Income and Adjusted EPS
Reconciliation to Adjusted EBITDA, Adjusted net income attributable to SXC and Adjusted EPS In June 2018, the Company recorded a loss in connection with the disposal of our interest in VISA SunCoke Limited. In connection with the CMT acquisition, the Company entered into a contingent consideration a
Slide 15: Adjusted EBITDA and Adjusted EBITDA per ton
Adjusted EBITDA and Adjusted EBITDA per ton (1) Corporate and Other includes the results of our legacy coal mining business.
Slide 16: Balance Sheet & Debt Metrics
Balance Sheet & Debt Metrics Benefits from Refinancing of Revolving Credit Facilities in August 2019: Lowered interest rate by 50 bps Extended maturities by ~2 years Maximum leverage maintained at 4.5x through maturity; previous maximum leverage was 3.25x/4.50x for SXC/SXCP with SXCP leverage steppi
Slide 17: 2019 Capital Expenditures
2019 Capital Expenditures At the midpoint of the range 2019 ongoing CapEX includes approximately $104M in ongoing Coke CapEx and $5M ongoing Logistics capex Completed gas sharing project during second quarter 2019 Excludes ~$4M of cash payments made in 2019 for work performed in 2018.
Slide 18: 2019 Guidance Reconciliation
2019 Guidance Reconciliation In connection with the CMT acquisition, the Company entered into a contingent consideration arrangement that requires the Company to make future payments to the seller based on future volume over a specified threshold, price and contract renewals. Contingent consideratio
Slide 19: Pro Forma SXC FCF/Share
Pro Forma SXC FCF/Share In connection with the CMT acquisition, the Company entered into a contingent consideration arrangement that requires the Company to make future payments to the seller based on future volume over a specified threshold, price and contract renewals. Contingent consideration adj
Slide 20: SunCoke Energy
SunCoke Energy”