Graftech International Ltd. · NYSE:EAF
Graftech International — Q3 2022 Earnings Presentation
18 slides from Graftech International's earnings presentation, Nov 4, 2022
Slide 1: Q3 2022 Results
Q3 2022 Results November 4, 2022 NYSE: EAF www.graftech.com
Slide 2: Forward-Looking Statements
Forward-Looking Statements CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: This presentation and related discussions may contain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements
Slide 3: Update on GrafTech Operations in Monterrey, Mexico
Update on GrafTech Operations in Monterrey, Mexico Temporary Suspension Notice Issued Sept. 15, 2022 by state environmental authorities Certain non-production activities, including inventory movement, permitted to continue Current Status Production operations remain suspended Pursuing all op
Slide 4: Prioritizing Safety
Prioritizing Safety Total Recordable Incident Rate (“TRIR”)(1) 1.55 0.95 0.89 0.51 0.49 2018 2019 2020 2021 Q3 YTD 2022 (1) TRIR measured per 200,000 hours worked. 4
Slide 5: Steel Capacity Utilization Rates
Steel Capacity Utilization Rates Global steel production, excluding China, of 197.7 million tons in Q3 2022 versus 216.4 million tons in Q3 2021(1) U.S. utilization rates remain elevated compared to the global industry Steel Capacity Utilization Rates(2) 82% 84% 82% 80% 81% 77% 78% 72% 71% 73% 7
Slide 6: Production and Sales
Production and Sales Q3 2022 production volume down 5%, sales volume down 18% and net sales down 13% compared to Q3 2021 Q3 2022 weighted-average realized non-LTA prices up 30% compared to Q3 2021 and consistent with Q2 2022 Production Volume(1) Sales Volume Net Sales (in thousands of MT) (in th
Slide 7: Earnings and Cash Flow
Earnings and Cash Flow Net income of $93 million; Earnings per share (“EPS”) of $0.36 and adjusted EPS(1) of $0.37 Adjusted EBITDA(1) of $129 million and adjusted EBITDA margin(2) of 42% Operating cash flow of $68 million and adjusted free cash flow(1) of $52 million Converted 41% of adjuste
Slide 8: Balance Sheet Strength and Financial Flexibility
Balance Sheet Strength and Financial Flexibility Strengthening Capital Structure through Meaningful Cash Flow Generation In Q3 2022, elected to utilize cash flow generation to increase liquidity by $53 million Gross debt to adjusted EBITDA(1) of 1.5x as of September 30, 2022 Liquidity of $435
Slide 9: Delivering on Capital Allocation Strategy
Delivering on Capital Allocation Strategy Reducing Debt Remains a Priority Reduced debt by $110 million year-to-date Further strengthening our balance sheet to support strategic flexibility Returning Capital to Stockholders Repurchased an aggregate of $60 million of our common stock year-to-da
Slide 10: Current Operating Environment
Current Operating Environment Further Softening of Steel Industry Trends Global steel prices continue to moderate from recent highs Year-to-date global steel production, excluding China, has declined 5% year-over-year(1) U.S. steel region trends remain healthy but have weakened somewhat reflec
Slide 11: GrafTech: Key Areas of Focus
GrafTech: Key Areas of Focus Navigating Near-term Challenges in the Operating Environment Working to ensure operations in Monterrey resume as quickly as possible Prudently managing operating and capital expenditures Maintaining a strong balance sheet Leveraging Competitive Advantages to Capita
Slide 12: Why GrafTech
Why GrafTech An industry leader in the production of high-quality graphite electrodes Graphite electrodes are essential to the operation of an EAF Reflecting environmental benefits, growth in EAF steelmaking expected to continue outpacing integrated steelmaking Sustainable competitive advantages
Slide 13: Non-GAAP Financial Measures
Non-GAAP Financial Measures In addition to providing results that are determined in accordance with GAAP, we have provided certain financial measures that are not in accordance with GAAP. EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted EPS, free cash flow, adjusted fre
Slide 14: Reconciliation to Adjusted Net Income
Reconciliation to Adjusted Net Income For the Three Months Ended Sept 30, Dec 31, Mar 31, June 30, Sept 30, ($ in thousands) 2021 2021 2022 2022 2022 Net income $ 119,886 $ 141,480 $ 124,183 $ 114,997 $ 93,451 Adjustments, pre-tax: Pension and OPEB plan expenses (benefits)(1) 434 (3,840) 551 553 534
Slide 15: Reconciliation to Adjusted EPS
Reconciliation to Adjusted EPS For the Three Months Ended Sept 30, Dec 31, Mar 31, June 30, Sept 30, 2021 2021 2022 2022 2022 EPS $ 0.45 $ 0.54 $ 0.47 $ 0.44 $ 0.36 Adjustments per share, pre-tax: Pension and OPEB plan expenses (benefits)(1) - (0.02) - - - Public offerings and related expenses(2) -
Slide 16: Reconciliation to Adjusted EBITDA
Reconciliation to Adjusted EBITDA For the Three Months Ended Mar 31, June 30, Sept 30, Dec 31, Mar 31, June 30, Sept 30, ($ in thousands) 2021 2021 2021 2021 2022 2022 2022 Net income $ 98,799 $ 28,165 $ 119,886 $ 141,480 $ 124,183 $ 114,997 $ 93,451 Add: Depreciation and amortization 16,539 16,292
Slide 17: Reconciliation to Net Debt and Calculation of Debt to Adjusted EBITDA
Reconciliation to Net Debt and Calculation of Debt to Adjusted EBITDA Dec 31, Sept 30, ($ in thousands) 2021 2022 Long-term debt $ 1,029,561 $ 921,090 Long-term debt, current maturities 127 113 Add: Unamortized debt discount and issuance costs (14,449) (12,874) Total gross debt $ 1,044,137 $ 934,077
Slide 18: Reconciliation to Free Cash Flow and Adjusted Free Cash Flow
Reconciliation to Free Cash Flow and Adjusted Free Cash Flow For the Three Months Ended Sept 30, Dec 31, Mar 31, June 30, Sept 30, ($ in thousands) 2021 2021 2022 2022 2022 Net cash provided by operating activities $ 134,256 $ 100,029 $ 146,316 $ 60,123 $ 68,166 Capital expenditures (14,374) (17,831
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