Suncoke Energy, Inc. · NYSE:SXC
Suncoke Energy — Investor Presentation (June 2012)
29 slides from Suncoke Energy's investor presentation, Jun 18, 2012
Slide 1: Investor Meeting June 2012
Investor Meeting June 2012 Exhibit 99.1
Slide 2: Safe Harbor Statement
Safe Harbor Statement Safe Harbor Statement Some of the information included in 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). Such forward-looking state
Slide 3: About SunCoke
About SunCoke Jewell Coke 25% Other Domestic Coke 48% Int'l Coke 7% About SunCoke Largest independent producer of metallurgical coke in the Americas – Coke is an essential ingredient in blast furnace production of steel Coal mining operations represents ~20% of Adjusted EBITDA (1) – High quality mid
Slide 4: The Leading Independent Cokemaker
The Leading Independent Cokemaker More than doubled capacity since 2006 with four new plants P roven ability to permit, design, construct and start up greenfield developments and work internationally Industry-leading environmental signature – Meet U.S. EPA Maximum Achievable Control Technology Secur
Slide 5: SunCoke's Heat Recovery vs. By-Product Oven
SunCoke’s Heat Recovery vs. By-Product Oven Traditional By-Product SunCoke Heat Recovery SunCoke’s Heat Recovery vs. By-Product Oven Investor Meeting, March 2012 Pressurization Negative pressure Positive pressure Air Emissions MACT standard for new batteries Potential for emission of hazardous compo
Slide 6: SunCoke's Value Proposition
SunCoke‘s Value Proposition Provide an assured supply of coke to steelmakers Larger, stronger coke for improved blast furnace performance Demonstrated sustained 15%-20% turndown High quality coke with cheaper coal blends Burn loss vs. by-product Capital preservation and lower capacity cost per ton;
Slide 7: SunCoke's Contract Proposition
SunCoke’s Contract Proposition Customer SunCoke Energy Capital Funding and Ownership Permits and Approvals Engineering, Procurement & Construction Plant Production and Environmental Compliance Reliable, High-Quality Coke Supply Take-Or-Pay Fixed Fee (Profit and Return on Capital) Coal Cost Component
Slide 8: Q1 2012 Earnings Overview
Q1 2012 Earnings Overview Earnings Per Share (diluted) Adjusted EBITDA (1) (in millions) Q1 2012 Earnings Overview Results driven by strong Coke business performance – Successful Middletown startup – Improvement at Indiana Harbor – Yield/cost improvement at other facilities Coal remains a challenge
Slide 9: Adjusted EBITDA Bridge – Q1 2011 to Q1 2012
Adjusted EBITDA (1) Bridge – Q1 2011 to Q1 2012 $11.5 $4.4 $8.5 $10.3 Adjusted EBITDA (1) Bridge – Q1 2011 to Q1 2012 Quarter’s performance led by strong Coke business results ($ in millions) $26.6 $55.8 ($4.9) ($0.6) Q1 2011 Adjusted EBITDA (1) Middletown Indiana Harbor (excluding non- recurring it
Slide 10: Domestic Coke Business Summary
Domestic Coke Business Summary (Jewell Coke & Other Domestic Coke) Domestic Coke Production Domestic Coke Adjusted EBITDA (1) Per Ton $11 $11 $14 $11 $15 $8 $25 $34 $21 $40 174 177 179 176 174 256 301 314 309 291 266 276 293 289 286 165 168 179 172 175 Domestic Coke Business Summary (Jewell Coke & O
Slide 11: Domestic Coke Business: Adjusted EBITDA Outlook
Domestic Coke Business: Adjusted EBITDA (1) Outlook ($ in millions, except as noted) Estimated Low Estimated High Illustrative Liquidity Ratios for Domestic Coke Business Estimated Estimated Domestic Coke Business: Adjusted EBITDA (1) Outlook Domestic Coke Adjusted EBITDA (1) Per Ton $55 $60 Annual
Slide 12: Coal Mining Financial Summary
Coal Mining Financial Summary Coal Mining Adjusted EBITDA (1) and Avg. Sales Price/Ton (2) Coal Sales, Production and Purchases Coal Mining Financial Summary ($ in millions, except per ton amounts) Cash production costs increasing in face of difficult demand/price environment • Reject rates increase
Slide 13: 2012 Adjusted EBITDA Outlook
2012 Adjusted EBITDA (1) Outlook $141 $95 - $110 $5 - $15 $9 - $14 $250 - $280 2012 Adjusted EBITDA (1) Outlook Given strength of U.S. Coke business, expect Adjusted EBITDA (1) will increase by about $110 million or more in 2012 ($ in millions) (1) For a definition of Adjusted EBITDA and reconciliat
Slide 14: 2012 Guidance
2012 Guidance Metric Expected 2012 Outlook Guidance Adjusted EBITDA (1) $250 million – $280 million EPS* (at 22% tax rate) $1.30 – $1.65 Capital Expenditures & Investments Approximately $100 million Free Cash Flow (1) $75 million + Cash Tax Rate 10% – 15% Effective Tax Rate 20% – 24% Corporate Costs
Slide 15: Strategy for Shareholder Value Creation
Strategy for Shareholder Value Creation Operations Excellence Grow the Coke Business North America & International Strategically Optimize Assets Strategy for Shareholder Value Creation Operations Excellence Grow the Coke Business North America & International Strategically Optimize Assets
Slide 16: Operations Excellence
Operations Excellence Sustain and enhance top quartile safety performance Rigorous focus on the details and discipline of coke and coal mining operations Leverage operating know- how and technology to continuously improve yields and operating & maintenance costs Financial Performance Safety & Enviro
Slide 17: Grow the Coke Business: North America
Chinese Coke Price vs. Representative SunCoke Price U.S. & Canada Coke Imports Grow the Coke Business: North America SunCoke believes it has the opportunity to displace higher cost coke imports . Source: CRU, The Annual Outlook for Metallurgical Coke 2011. (1) Represents SunCoke’s domestic cokemakin
Slide 18: Grow the Coke Business: North America
Integrated Steel Producers 60% SunCoke 18% Other Merchant & Foundry 7% Imports 10% Grow the Coke Business: North America Investor Meeting, June 2012 Source: CRU, The Annual Outlook for Metallurgical Coke 2011. Replace aging coke batteries operated by integrated steel producers Source: CRU, The Annua
Slide 19: Grow the Coke Business: North America
BF/BOF Crude Steel Production and Blast Furnace Coke Demand Grow the Coke Business: North America Grow the Coke Business: North America Impact of low natural gas prices on coke demand Displaces coke in blast furnace Natural gas cannot completely replace coke; coke provides structure in blast furnace
Slide 20: Grow the Coke Business: North America
Grow the Coke Business: North America Will seek customer commitments at that time Anticipated capacity of 660,000 tons Expect to have permits in first half of 2013 Grow the Coke Business: North America Aging battery replacement Import displacement Expected demand opportunity by 2015 in millions of t
Slide 21: Grow the Coke Business: International - India
Grow the Coke Business: International - India Projected to be 3rd largest steel market by 2020 Blast furnace to play a critical role in growth Importing approximately 2 million tons annually Coke capacity investment lags Steel investment 3.5 million tons merchant production or 13% of total 17 active
Slide 22: Optimize Assets: MLP
Optimize Assets: MLP Domestic coke assets may qualify for an MLP Engaged key advisors to assist in MLP evaluation Analysis underway to assess structuring alternatives Optimize Assets: MLP
Slide 23: SunCoke Energy – The Higher Degree
SunCoke Energy The Higher Degree
Slide 24: Definitions
Definitions Adjusted EBITDA represents earnings before interest, taxes, depreciation, depletion and amortization (“EBITDA”) adjusted for sales discounts and the deduction of income attributable to non-controlling interests in our Indiana Harbor cokemaking operations. EBITDA reflects sales discounts
Slide 25: Reconciliations
Reconciliations $ in millions Q1 2012 FY 2011 Q4 2011 Q3 2011 Q2 2011 Q1 2011 FY 2010 Reconciliations from Adjusted Operating Income and Adjusted EBITDA to Net Income Investor Meeting, June 2012 Reconciliations Adjusted Pro Forma Operating Income 151.5 Add: Pro Forma impact of ArcelorMittal settleme
Slide 26: SunCoke Energy
Il SunCoke Energy
Slide 27: SunCoke Energy
x SunCoke Energy
Slide 28: Estimated Free Cash Flow Reconciliation
Estimated Free Cash Flow Reconciliation, $MM 2012 2012E Estimated Free Cash Flow Reconciliation Cash from operations; In excess of $ 179 Less cash used for investing activities Approx. (100) Less payments to minority interest Approx. (4) Free Cash Flow In excess of $ 75
Slide 29: Media releases and SEC filings
Media releases and SEC filings are available on our website at www.suncoke.com Contact Investor Relations for more information: 630-824-1907