Graftech International Ltd. · NYSE:EAF

Graftech International — Q3 2019 Earnings Presentation

16 slides from Graftech International's earnings presentation, Nov 7, 2019

  1. Slide 1: Q3 2019 Results

    Q3 2019 Results November 7, 2019

  2. Slide 2: Forward-looking Statements

    Forward-looking Statements NOTE ON FORWARD-LOOKING STATEMENTS: This presentation and related discussions may contain forward-looking statements that reflect our current views with respect to, among other things, future events and financial performance. You can identify these forward-looking statemen

  3. Slide 3: An Industry Leading Graphite Electrode Manufacturer

    An Industry Leading Graphite Electrode Manufacturer  Graphite electrodes are a highly engineered, mission critical industrial consumable  Operating three of the largest graphite electrode manufacturing facilities in the world  Vertical integration into petroleum needle coke provides sustainable c

  4. Slide 4: Building Safe and Efficient Operations

    Building Safe and Efficient Operations Total Recordable Injury Rates1 1.89 1.91 1.74 1.63 1.49 1.51 1.03 2013 2014 2015 2016 2017 2018 2019 YTD 1 Year-to-date 2019 as of October 12, 2019. Total recordable injury rates measured per 200,000 hours worked 4

  5. Slide 5: Market Positioning

    Market Positioning Market Conditions • Steel production, and graphite electrode consumption, has slowed in several key regions • Customers are currently destocking; we expect conditions to improve as we move through 2020 • Long-term EAF growth story remains strong Vertical Integration as a Competiti

  6. Slide 6: Investing in Operational Improvements

    Investing in Operational Improvements  New operational improvements planned at Monterrey and St. Marys ‒ Expected to improve environmental performance and production flexibility at both sites ‒ Leverages low cost power and other efficiencies at St. Marys  Graphitization and machining of some addit

  7. Slide 7: Long-Term Contracts Provide Profitability and Visibility

    Long-Term Contracts Provide Profitability and Visibility  Vertical integration supports commercial strategy to sell majority of volumes on long-term (3- to 5-year), take-or- pay, fixed price and volume contracts  Long-term agreements (LTAs) with >100 customers; ~530,000 MT contracted at a weighted

  8. Slide 8: Production and Sales

    Production and Sales  Q3/19 graphite electrode production volumes of 40 thousand MT were approximately in-line with sales volumes  Q3/19 graphite electrode sales volumes and net sales down 7% from the prior year quarter Production (000 MT) Sales Volumes (000 MT)1 Net Sales ($M) 136 127 126 130 $1,

  9. Slide 9: Strong Cash Flow Generation

    Strong Cash Flow Generation  Q3/19 Free cash flow (FCF)1 was down 2% from the prior year period as favorable working capital changes partially offset lower volumes and higher costs  As of September 30, 2109, trailing 12-month Free Cash Flow1 of $744 million represents more than 20% of market capit

  10. Slide 10: Strong Track Record of Shareholder Returns

    Strong Track Record of Shareholder Returns Trailing Twelve-Month (TTM) Free Cash Flow 1 Generation and Uses of Cash 211 280 188 744 153 142 312 204 Q4/18 Q1/19 Q2/19 Q3/19 TTM 2019 Uses of Cash Free Cash Flow Shareholder Returns2 Debt Repayments  Track record of returning free cash flow to sharehol

  11. Slide 11: Financial Policy Balances Shareholder Returns and Debt Repayment

    Financial Policy Balances Shareholder Returns and Debt Repayment Generate meaningful cash flows and preserve liquidity  As of 9/30/19, total liquidity was approximately $628M1 including $381M in cash and cash equivalents  As of 9/30/19, trailing 12-month free cash flow2 of $744M Reinvest in the bu

  12. Slide 12: Key Investment Highlights

    Key Investment Highlights  Mission critical, highly engineered consumable for the growing EAF market  High capacity, low cost, high quality production  Vertical integration provides security of supply and sustainable competitive advantage  Long-term contracts provide profitability, stability and

  13. Slide 13: Disclosures

    Disclosures Disclosures 13

  14. Slide 14: Non-GAAP Financial Measures

    Non-GAAP Financial Measures Investors are encouraged to read the information contained in this presentation in conjunction with the following information, the Forward-looking statements information on slide 2 and the factors described under the “Risk Factors” section of the Company’s annual report o

  15. Slide 15: Reconciliation to Adjusted EBITDA from Cont'g Operations

    Reconciliation to Adjusted EBITDA from Cont’g Operations For the Three Months Ended For the Nine Months September 30, Ended September 30, 2019 2018 2019 2018 Net income 175,876 199,466 569,680 624,587 Add: Discontinued operations — 726 — (585) Depreciation and amortization 15,357 16,050 46,387 47,74

  16. Slide 16: Reconciliation to Free Cash Flow

    Reconciliation to Free Cash Flow For the Three Months For the Nine Months Ended September 30, Ended September 30, (in thousands) 2019 2018 2019 2018 Net cash provided by operating activities 225,749 234,569 584,772 612,244 Capital expenditures (14,854) (18,897) (44,053) (47,632) Free cash flow 210,8

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