Ecovyst Inc. · NYSE:ECVT
Ecovyst — PQ — Investor Presentation (September 2019)
23 slides from Ecovyst's investor presentation, September 2019
Slide 1: Investor Presentation September 2019
INVESTOR PRESENTATION September 2019 1
Slide 2: Legal Disclaimer
LEGAL DISCLAIMER Forward-Looking Statements Some of the information contained in this presentation constitutes “forward-looking statements”. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “projects” and si
Slide 3: PQ Corporation
PQ CORPORATION Leading and Innovative Global Provider of Specialty Catalysts, Materials, Chemicals and Services 2018 SALES AND ZEOLYST JV SALES OVERVIEW BY REGION AND END USE1 END USE o Founded in 1831 17% 21% o Headquarters in Malvern, PA 16% 19% 7% o IPO in September 2017 20% Fuels & Emissions Con
Slide 4: Our Business Units
OUR BUSINESS UNITS Specialty, Leading and Differentiated REFINING PERFORMANCE PERFORMANCE SERVICES CATALYSTS1 MATERIALS CHEMICALS Increased octane Tighter fuels standards Higher highway Environmentally driven demand Light weighting demand safety standards consumer demand o Sulfuric acid production e
Slide 5: Financial Performance Across Macroeconomic Cycles
FINANCIAL PERFORMANCE ACROSS MACROECONOMIC CYCLES Demonstrated Stability Through Cycles with Attractive Margins Adjusted EBITDA and Adjusted EBITDA Margin (%)1,2,3 ($ in millions except %) (1) Adjusted EBITDA for the period from 2005 to 2014 represents Legacy Eco Adjusted EBITDA and Legacy PQ Adjust
Slide 6: A Portfolio of Stability
A PORTFOLIO OF STABILITY Low Exposure to Economic Cycles % of 2018 Sales by End Use1 End Markets Categorized by Sensitivity to Downturn2 Packaging & Engineered Plastics Fuels & Emissions (All segments) Controls (RS & C) 17% 21% Consumer Products Six Primary End Uses (PC) 16% 19% Serve ~28 Highway Sa
Slide 7: Portfolio Strengths and Priorities
PORTFOLIO STRENGTHS AND PRIORITIES Drive Shareholder Value KEY VALUE DRIVERS Profitable COMPETITIVE ADVANTAGES Growth Unique portfolio of businesses Capital Leading positions in Commercial Intensity secular growth markets Efficiency Innovation potential Free Cash Flow 7
Slide 8: Why PQ's Specialty Chemical Portfolio?
WHY PQ’s SPECIALTY CHEMICAL PORTFOLIO? Investment Highlights #1 and #2 positions in nearly all product lines Sustainable growth from diverse underlying secular macro trends Input cost small as percentage of customer total product cost Track record of innovation and customer collaboration Environment
Slide 9: Supplemental Information
SUPPLEMENTAL INFORMATION
Slide 10: Supplemental Information: Capex, Capitalization, Sales by End Use and Region
SUPPLEMENTAL INFORMATION 2018 Capital Expenditures, Capitalization, Sales by End Use and Region CAPITAL EXPENDITURES1 Full Year ($ in millions) 2018 % OF SALES GROWTH BY END USE 4 Maintenance2 94.7 Fuels & Emissions Controls + 6% Growth3 37.0 Highway Safety & Construction + 19% Total 131.7 Industria
Slide 11: Macro Industry Trends
MACRO INDUSTRY TRENDS Expected Secular Growth Drivers Across Our Businesses Turbocharged Engines Heavy Duty Diesel Emissions Silicates & Silicas +7% +2x +2 – 3% North America CAGR Global catalyst Global CAGR from 2018 – 2025; consumption growth between consumption from turbo vehicles rise to 2020 –
Slide 12: Adjusted Free Cash Flow and Leverage Ratio
ADJUSTED FREE CASH FLOW AND LEVERAGE RATIO Strong Sustainable Adjusted Free Cash Flow Drives Progress towards Leverage Target ADJUSTED FREE CASH FLOW ($mm) NET DEBT/ADJUSTED EBITDA RATIO Adjusted Free Cash Flow used to repay debt Progress to leverage target of 3.0 – 3.5x 4.9x 134.2 4.5x 24.7 2017 20
Slide 13: Quarterly Segment Sales, Adjusted EBITDA and Margins
QUARTERLY SEGMENT SALES, ADJUSTED EBITDA AND MARGINS First Half 2019 and Year 2018 Six Months Three Months Ended EndedFor the Quarter Ended Three Months Ended Year Ended December 31, March 31, June 30, June 30, March 31, June 30, September 30, December 31, ($ in millions except %, unaudited) 2019 20
Slide 14: Adjusted Free Cash Flow
ADJUSTED FREE CASH FLOW Adjusted Free Cash Flow for Years 2018 and 2017 Full Year Full Year ($ in millions) 2018 2017 Cash Flow from Operations before interest and tax 377.5 364.5 Less: Cash paid for taxes 23.8 29.2 Cash paid for interest 105.1 170.1 Cash Flow from Operations 248.6 165.2 Less: Purch
Slide 15: 2019 Guidance Update
2019 GUIDANCE UPDATE Reaffirming Adjusted EBITDA and Adjusted Free Cash Flow Targets 2018 2019 ($ in millions except EPS & %) Actual Outlook Sales 1,608.2 1,580 – 1,6001 Adjusted EBITDA 464.0 470 – 485 Adjusted Free Cash Flow 134.2 125 – 1452 Adjusted Diluted EPS 0.87 0.77 – 0.933 Interest Expense 1
Slide 16: Reconciliation of Sales and Adjusted EBITDA
RECONCILIATION OF SALES AND ADJUSTED EBITDA 2005 – 2018 Year Ended December 31, 2015 2016 Pro Pro ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 forma 3 forma 3 2017 2018 Reconciliation of sales and adjusted EBITDA Legacy PQ Sales 1 635.3 708.6 775.0 977.0 1,009.9 1,087.9 1,115.0
Slide 17: Reconciliations for Adjusted EBITDA
RECONCILIATIONS FOR ADJUSTED EBITDA 2005 – 2014 Legacy PQ1 Net Income (Loss) to Adjusted EBITDA Reconciliation Year Ended December 31, ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Reconciliation of net income (loss) attributable to Legacy PQ to Adjusted EBITDA Net income (loss)
Slide 18: Reconciliations for Adjusted EBITDA
RECONCILIATIONS FOR ADJUSTED EBITDA 2005 – 2014 Legacy Eco Services1 Net Income (Loss) to Adjusted EBITDA Reconciliation Year Ended December 31, 2014 2014 ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 Successor Predecessor Reconciliation of net income (loss) attributable to Legacy Eco
Slide 19: Reconciliations for Adjusted EBITDA
RECONCILIATIONS FOR ADJUSTED EBITDA 2015 – 2018 Post-Business Combination PQ Net Income (Loss) to Adjusted EBITDA Reconciliation Year Ended December 31, 2015 2016 ($ in millions) Pro forma 1 Pro forma 1 2017 2018 Reconciliation of net income (loss) attributable to PQ Group Holdings Inc. to Adjusted
Slide 20: Reconciliation of Net Income to Segment Adjusted EBITDA
RECONCILATION OF NET INCOME TO SEGMENT ADJUSTED EBITDA First Half 2019 and Year 2018 Six Months Three Months Ended Ended Three Months Ended Year Ended March 31, June 30, June 30, March 31, June 30, September 30, December 31, December 31, ($ in millions) 2019 2019 2019 2018 2018 2018 2018 2018 Reconc
Slide 21: Reconciliation of Quarterly Net Income to Adjusted Net Income and EPS
RECONCILATION OF QUARTERLY NET INCOME TO ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE First Half 2019 and Year 2018 Six Month Three Months Ended Ended Three Months Ended Year Ended March 31, June 30, June 30, March 31, June 30, September 30, December 31, December 31, ($ in millions ex
Slide 22: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Descriptions to PQ Non-GAAP Reconciliations a) We use Adjusted EBITDA as a performance measure to evaluate our financial results. Because our Catalysts segment includes our 50% interest in our Zeolyst Joint Venture, we include an adjustment for our 50% p
Slide 23: Leading the
Leading the way 0) a future i a — adel