Koppers Holdings Inc. · NYSE:KOP
Koppers — Investor Presentation (September 2014)
27 slides from Koppers's investor presentation, Sep 8, 2014
Slide 1: Investor Presentation
Exhibit 99.1 Investor Presentation September 2014
Slide 2: Forward Looking Statements
Forward Looking Statements The following information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current expectations and beliefs, as well as a number of assumptions concern
Slide 3: The New Koppers: a Leading Global Supplier to Infrastructure and Construction Markets
The New Koppers: a Leading Global Supplier to Infrastructure and Construction Markets Top producer of carbon compounds, performance chemicals and treated wood products Unique product portfolio and niche end market focus Strategic global presence Long-term relationships with large blue chip customers
Slide 4: The New Koppers: Three Core Complementary Business Segments
The New Koppers: Three Core Complementary Business Segments Carbon Railroad and Performance Materials and Utility Products Chemicals Chemicals and Services (PC) (CMC) (RUPS) 2013 Pro Forma 2013 Pro Forma 2013 Pro Forma Revenue $906mm Revenue $628mm Revenue $334mm 4
Slide 5: Unique Product Portfolio and Niche End Market Focus
Unique Product Portfolio and Niche End Market Focus… Specialty Products/Services Mix: Diverse End Markets: • Railroad Bridge Services • Railroad • Railroad Crossties • Utilities • Rail Joint Bars • Construction • Utility Poles • Agricultural • Wood Preservation Chemicals • Aluminum/Steel • Carbon Pi
Slide 6: Addition of Osmose Enhances Koppers Diversity, Stability and Growth Potential
Addition of Osmose Enhances Koppers Diversity, Stability and Growth Potential 2013 Sales by Product 2013 Sales by End Market $1,478mm Other Other 12% 10% Railroad crossties Utility poles Railroad products Utility poles 27% 8% and services 8% 32% Rubber Naphthalene / 11% PAA 12% Construction Creosote
Slide 7: Osmose Overview
Osmose Overview The acquired Osmose entities are comprised of (i) a global market leader in wood preservative chemicals (Performance Chemicals) and (ii) a service provider to the rail industry (Railroad Structures) Performance Chemicals & Railroad Structures (1) 2013 Revenue: $390mm Performance Chem
Slide 8: Products Fulfill Industry Demand Across Diverse End Markets
Products Fulfill Industry Demand Across Diverse End Markets… Coal Carbon Naph- Railroad Treating Drivers Tar Pitch PAA thalene CBF Creosote Crossties Chemicals BF Steel EAF Steel Aluminum Automotive Rubber Construction Class I RR Budgets Crosstie Insertions …Providing Counter-Cyclical Earnings Stabi
Slide 9: Strategically Located Facilities to Best Serve Clients and Meet Growing Demand
Strategically Located Facilities to Best Serve Clients and Meet Growing Demand Facilities are well-positioned to capture worldwide growth in demand Europe 4 facilities North America China 19 facilities 3 facilities 2013 Point of Sale Emerging South America Markets, 15% 2 facilities (1) Australia, 11
Slide 10: Long-Term Relationships with Large Blue Chip Customers Create Revenue Visibility
Long-Term Relationships with Large Blue Chip Customers Create Revenue Visibility Select Key Customers 10
Slide 11: Market Challenges
Market Challenges Depressed global aluminum market has resulted in a difficult pricing environment for carbon pitch Recessionary conditions in Europe have resulted in reduced volumes and pricing for carbon pitch, naphthalene and CBF North American CMC business continues to be challenged by difficult
Slide 12: 2014: Transitional Year for Koppers
2014: Transitional Year for Koppers ($ millions except EPS) Adjusted EPS $1.73 $2.32 $2.80 $3.27 $2.60 $2.08 (1) Calculations of historical Adjusted EPS can be found in our earnings press releases at www.koppers.com under Investor Relations 12
Slide 13: Focused on Delivering Long-Term Sustainable Profitable Growth at Attractive Returns
Focused on Delivering Long-Term Sustainable Profitable Growth at Attractive Returns Growth Achieve above-market sales growth Profitability Improve margins by at least 200 basis points Capital Deployment Maintain ROCE greater than WACC Execution of These Priorities Will Deliver Increased Shareholder
Slide 14: Decisive Actions Have Been Taken
Decisive Actions Have Been Taken… Completed Added to scale of Diversified business construction of new RUPS business risk through Osmose distillation facility in through Ashcroft acquisition China (KJCC) acquisition Continued Ceased distillation Commenced investments in activities at Uithoorn restru
Slide 15: Osmose Enhances Koppers Strategic Objectives
Osmose Enhances Koppers Strategic Objectives Koppers Objectives Commentary 2010 – 2013 Sales CAGR of 8.1% exceeds Koppers Sales CAGR of 7.5% Growth over that same period Achieve above-market sales growth Ability to leverage Osmose geographic footprint to enhance Koppers sales opportunities Profitabi
Slide 16: Strong Cash Flow and Liquidity
Strong Cash Flow and Liquidity New five year $500 million revolver ($230 million drawn) to replace current $350 million revolver at initial interest rate of 3.25% Financing Structure at New five year amortizing term loan A of $300 million at initial interest rate of 3.25% Close of Transaction Leave
Slide 17: Bond Refinancing Opportunity
Bond Refinancing Opportunity • Current outstanding bonds of $300 million • Coupon @ 7.785% with first call date at 12/1/2014 • Call premium approximately $12 million at call date; earlier call would cost additional $3-4 million • Expectation is to refinance in 2014 with 175-225 bp reduction • Intent
Slide 18: 2015 – Strong Prospects for New Koppers
2015 – Strong Prospects for New Koppers • Some industry headwinds beginning to abate – Positive signs of a stronger global aluminum market with higher LME pricing – European economy showing signs of recovery – Expect crosstie procurement volumes to rebound in the second half of 2014 as sawmill capac
Slide 19: The New Koppers: A Leading Global Supplier to Infrastructure and Construction Markets
The New Koppers: A Leading Global Supplier to Infrastructure and Construction Markets • Market leadership positions and long-term customer relationships provide for a stable base business and recurring revenue stream • Diversity of products, end markets, and locations provides counter-cyclical earni
Slide 20: Appendix
KOPPERS. an (2) Appendix 20
Slide 21: Vertically Integrated Operations: A Competitive Advantage
Vertically Integrated Operations: A Competitive Advantage Koppers buys coal tar from over 60 suppliers in 16 countries COAL TAR Carbon Pitch 50% Chemical Oils 20% Distillate 30% Naphthalene Creosote Phthalic Anhydride Carbon Black Feedstock Primary End Products Anodes, Electrodes Vinyl, Paint, Concr
Slide 22: Carbon Materials and Chemicals Sales and EBITDA Summary
Carbon Materials and Chemicals Sales and EBITDA Summary 2013 Sales by End Market Sales ($mm) Other 18% Aluminum/ Steel 46% Rubber 18% $1,016 $1,000 $906 $867 $795 $655 Construction 18% 2009 2010 2011 2012 2013 TTM (1) Other includes refined tar, petroleum pitch, benzole and misc. products. (2) Const
Slide 23: Railroad and Utility Products and Services Sales and EBITDA Summary
Railroad and Utility Products and Services Sales and EBITDA Summary 2013 Sales by End Market Sales ($mm) Utility Poles 21% $555 $572 $559 $469 $523 Railroad Products $450 and Services 79% 2009 2010 2011 2012 2013 TTM 6/2014 2013 Point of Sale Adjusted EBITDA ($mm) 12.5% 11.4% Australia/NZ 10.7% 13%
Slide 24: Return On Capital Employed (ROCE)
Return On Capital Employed (ROCE) (not restated for discontinued operations) ($ in millions) Return On Capital Employed (Prior periods not restated for discontinued operations) TTM 2009 2010 2011 2012 2013 6/30/2014 Interest expense $ 36.3 $ 27.1 $ 27.2 $ 27.9 $ 26.8 $ 26.7 Loss/(gain) on debt extin
Slide 25: Sales and EBITDA Reconciliation
Sales and EBITDA Reconciliation (not restated for discontinued operations) ($ in millions) TTM Years Ended December 31 2009 2010 2011 2012 2013 6/2014 Net sales $1,124.4 $1,245.5 $1,538.9 $1,555.0 $1,478.3 $1,425.2 Net income attributable to Koppers 18.8 44.1 36.9 65.6 42.8 21.2 Interest expense inc
Slide 26: Carbon Materials and Chemicals EBITDA Reconciliation
Carbon Materials and Chemicals EBITDA Reconciliation (prior years not restated for discontinued operations) ($ in millions) TTM Years Ended December 31 2009 2010 2011 2012 2013 6/2014 Operating profit $58.5 $77.6 $45.4 $83.1 $43.9 $13.3 Allocated corporate operating profit (0.6) (0.8) (0.6) (0.8) (1
Slide 27: RUPS EBITDA Reconciliation
RUPS EBITDA Reconciliation (prior years not restated for discontinued operations) ($ in millions) TTM Years Ended December 31 2009 2010 2011 2012 2013 6/2014 Operating profit $38.2 $23.0 $34.8 $45.1 $58.3 $53.4 Allocated corporate operating profit (1.2) (0.8) (0.6) (0.8) (0.9) (2.9) Depreciation and
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