Suncoke Energy, Inc. · NYSE:SXC
Suncoke Energy — Investor Presentation (May 2024)
35 slides from Suncoke Energy's investor presentation, May 2024
Slide 1: SunCoke Energy Investor Presentation
SunCoke Energy Investor Presentation May 2024
Slide 2: Forward-Looking Statements
Forward-Looking Statements 2 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). Forward-looking statements often may be identified by the use of such words a
Slide 3: SunCoke Overview
SunCoke Overview 3 Largest independent coke producer in North America with best-in-class operations in Cokemaking and Logistics Business Segments Key Financial Highlights Cokemaking Consolidated Adjusted EBITDA(1) • 4.2M tons of furnace coke capacity with capability to produce both foundry and blast
Slide 4: Advantaged Assets Driving Value Creation
Advantaged Assets Driving Value Creation 4 Advantaged Assets with Steady Cash Flow Balanced Capital Strong Balance Sheet Leading Market Positions Generation Allocation Strategy • Industry leading • No material debt • Supported by • Significant value cokemaking and maturities until 2026 contracts und
Slide 5: Strategically Located Network of Assets
Strategically Located Network of Assets 6 North American Operations Cokemaking Advantages • Domestic assets strategically located to serve domestic blast furnaces as well as export market – Three facilities co-located with customer BF and remaining two facilities benefit from advantaged rail logisti
Slide 6: Cokemaking Overview
Cokemaking Overview
Slide 7: Durable Model with Strong Market Dynamics
Durable Model with Strong Market Dynamics 8 8 Stable Long-term Favorable Long-term Coke Superior Asset Characteristics Business Model Supply/Demand Dynamics • Steady cash flow • Newest fleet of • Any increased domestic steel cokemaking facilities and demand, blast furnace (“BF”) generation equipment
Slide 8: Long-term, Contracted Earnings Stream
Long-term, Contracted Earnings Stream 9 9 Long-term, take-or-pay contracts generate stable cash flow and insulate business from industry cyclicality Take-or-Pay Contract Provisions Contract Observations General Provisions • Customers required to take the contract-maximum coke • Take-or-pay nature pr
Slide 9: Shrinking Coke Supply Base Creates Opportunity
Shrinking Coke Supply Base Creates Opportunity 10 Expect aging by-product battery closures to continue, creating opportunity for SunCoke Aging Cokemaking Facilities(1) Aging Capacity Creates Opportunity Average Age % of US and Canada Coke • Closures driven by combination of deteriorating facilities
Slide 10: SunCoke’s Superior Assets Well Positioned for Long Term
SunCoke’s Superior Assets Well Positioned for Long Term 11 Value Proposition Competitive Advantage • Efficient operating cost structure and capital • SunCoke’s average asset age is ~24 years investment requirements Superior Asset Age compared to ~43 years for all other US/Canadian capacity currently
Slide 11: Heat Recovery vs By-Product Design Comparison
Heat Recovery vs By-Product Design Comparison 12 SunCoke Heat Recovery Traditional By-Product Steam Gas (COG) Light Oil Water Tar Air VM Air Air Natural Gas (or other source) SunCoke Heat Recovery Traditional By-Product Pressurization Negative Pressure Positive Pressure Air Emissions MACT Standard f
Slide 12: Environmental Signature – Best Available Technology
Environmental Signature – Best Available Technology 13 SunCoke’s operations minimize environmental impact and offer the best available technology for an important input to the steel industry SunCoke’s CO2e Emissions SunCoke’s innovative, superior heat recovery technology sets the 0.14 0.14 0.15 0.12
Slide 13: Greenhouse Gases
Greenhouse Gases 14 SunCoke primarily supplies coke to the least carbon intensive steelmaking industry in the world. Comparison of Carbon Intensity of the Top 5 Global Steel Steel Industry CO2 Emissions by Country(1) Producing Countries (tons CO2/ton Steel)(1) Rest of the World 2.2 Ukraine China 1.9
Slide 14: Safety Excellence
Safety Excellence 15 SunCoke’s industry leading safety performance sets the standard for safe cokemaking SunCoke’s Total Recordable Incident Rate(1) SunCoke’s 2023 TRIR 0.99 0.99 Comparable Industry Rates (2022 BLS Data) 0.85 0.81 0.76 0.69 Iron and Steel Mills 2.2 Other Petroleum and Coal 3.1 Produ
Slide 15: Recent Growth/Diversification Opportunities
Recent Growth/Diversification Opportunities 16 Successful entry into profitable spot blast and foundry coke markets; Non-binding LOI to produce granulated pig iron provides opportunity to further diversify and enter the metallics market Foundry Coke Spot Blast Coke Granulated Pig Iron • Foundry coke
Slide 16: Logistics Overview
Logistics Overview
Slide 17: Advantaged Logistics Facilities
Advantaged Logistics Facilities 18 Strategically located facilities with multimodal connectivity • Gulf Coast facility with direct rail access and cape size loading capabilities • Annual outbound throughput capacity of ~15Mt and storage capacity of ~1.5Mt • Largest export terminal on the U.S. Gulf C
Slide 18: Strategic Network of Low Cost Facilities
Strategic Network of Low Cost Facilities 19 Well Positioned • Strategically located assets with access to barge, rail and truck Domestic Logistics • Provide key logistics services for various metallurgical and thermal coal producers and Facilities consumers • Only dry-bulk, rail-serviced terminal on
Slide 19: Q1 2024 Financials
Q1 2024 Financials )
Slide 20: Q1 2024 Financial Performance
Q1 2024 Financial Performance 21 Q1 2024 Earnings Review • Q1 '24 EPS of $0.23, up $0.04 from the prior ($/share) ($ in millions) year quarter Diluted EPS Adjusted EBITDA(1) (1) +$0.8 M • Consolidated Adjusted EBITDA of $67.9M, +$0.04 an increase of $0.8M from the prior year quarter ▪ Coke segment u
Slide 21: Domestic Coke Business Summary
Domestic Coke Business Summary 22 Domestic coke fleet continues to operate at full capacity; all spot blast and foundry coke sales finalized for the year Domestic Coke Performance • Delivered Adjusted EBITDA of (Coke Production, Kt) $61.4M in Q1 ‘24 vs $60.4M in Q1 ‘23 $68.2M $64.0M ▪ Domestic coke
Slide 22: Logistics Business Summary
Logistics Business Summary 23 Higher volumes driving domestic terminals performance; continue to see lower volumes at CMT due to weak commodity markets Logistics Performance • Logistics segment contributed (Tons Handled, Kt) $13.0M to Q1 ‘24 Adjusted EBITDA $13.5M $13.0M ▪ Logistics performance prim
Slide 23: Q1 2024 Liquidity
Q1 2024 Liquidity 24 Maintained strong liquidity position of $470.1M (Consolidated) Q1 '24 Revolver Total Debt $500M Availability: Gross Leverage(1) 1.86x $350M (1) Net Leverage 1.41x ($ in millions) $140.1 $10.0 ($15.5) ($9.0) $120.1 Negatively impacted by ($5.5) the timing of working capital chang
Slide 24: 2024 Guidance Summary
2024 Guidance Summary 25 Expect 2024 Consolidated Adjusted EBITDA(1) of $240M - $255M; 2024 Free Cash Flow(2) of $105M - $125M 2024 Metric Guidance* Adjusted EBITDA Consolidated (1) $240M - $255M Domestic Coke EBITDA $238M - $245M Logistics EBITDA $30M - $35M Domestic Coke Sales ~4.1M tons Domestic
Slide 25: Appendix
APPENDIX )
Slide 26: Non-GAAP Financial Measures
27 NON-GAAP FINANCIAL MEASURES In order to assist readers in understanding the core operating results that our management uses to evaluate the business, we describe our non- GAAP measures referenced in this presentation below. In addition to U.S. GAAP measures, this presentation contains certain non
Slide 27: Balance Sheet & Debt Metrics
Balance Sheet & Debt Metrics 28 As of 3/31/2024 As of 12/31/2023 ($ in millions, except leverage ratios) Cash $ 120 $ 140 Available Revolver Capacity $ 350 $ 350 Total Liquidity $ 470 $ 490 Gross Debt (Long and Short-term) $ 500 $ 500 Net Debt (Total Debt less Cash) $ 380 $ 360 LTM Adjusted EBITDA $
Slide 28: 2024 Guidance Reconciliation
2024 Guidance Reconciliation 29 ($ in millions) Low High Net Income $67 $84 Depreciation and amortization expense 122 118 Interest expense, net 28 26 Income tax expense 23 27 Adjusted EBITDA (Consolidated) $240 $255 Free Cash Flow Guidance Reconciliation 2024E ($ in millions) Low High Operating Cash
Slide 29: Net Income to FCF Reconciliation
Net Income to FCF Reconciliation 30 2024E ($ in millions) Low End High End Net Income $67 $84 Depreciation and amortization expense 122 118 Interest expense, net 28 26 Income tax expense 23 27 Adjusted EBITDA (Consolidated) $240 $255 Cash interest (26) (24) Cash taxes (20) (25) Total capex (80) (75)
Slide 30: Reconciliation to Adjusted EBITDA
31 Reconciliation to Adjusted EBITDA ($ in millions) Q1 '23 Q2 '23 Q3 '23 Q4 '23 FY '23 Q1 '24 Net Income $ 17.7 $ 22.0 $ 8.5 $ 15.3 $ 63.5 $ 21.1 Depreciation and amortization expense 35.3 36.4 35.5 35.6 142.8 33.3 Interest expense, net 7.2 7.2 6.6 6.3 27.3 6.3 Income tax expense (benefit) 6.8 8.3
Slide 31: Adjusted EBITDA and Adjusted EBITDA per ton
Adjusted EBITDA and Adjusted EBITDA per ton 32 Reconciliation of Segment Adjusted EBITDA and Adjusted EBITDA per Ton Domestic Corporate Brazil Coke Logistics Consolidated ($ in millions, except per ton data) Coke and Other(1) Q1 2024 Adjusted EBITDA $61.4 $2.4 $13.0 ($8.9) $67.9 Sales Volume (thousa
Slide 32: Steel Production Input Cycle
Steel Production Input Cycle 33 site) Source: Global Efficiency Intelligence, November 2019 report: “An International Benchmarking of Energy and CO2 Intensities”
Slide 33: SunCoke’s Cokemaking Process
SunCoke’s Cokemaking Process 34
Slide 34: Foundry Coke Overview
Foundry Coke Overview 35 Foundry coke customers focus on fundamentally different parameters than blast furnace coke customers with respect to coke size and quality Foundry coke is used in cupolas to produce casted iron products for the Construction, Industrial, and Automotive Industries
Slide 35: SunCoke Energy
3 SunCoke Energy”