Quaker Houghton · NYSE:KWR

Quaker Houghton — Quaker Chemical — Q3 2014 Earnings Presentation

15 slides from Quaker Houghton's earnings presentation, Oct 28, 2014

  1. Slide 1: Third Quarter 2014 Results Investor Conference Call

    1 Third Quarter 2014 Results Investor Conference Call October 29, 2014 Quaker Chemical Corporation

  2. Slide 2: Regulation G; Forward-Looking Statements

    Regulation G The attached charts include C ompany information that does not conform to generally accepted accounting principles ( “GAAP”). Management believes that an analysis of this data is meaningful to investors because it provides insight with respect to ongoing operating results of the Company

  3. Slide 3: Speakers

    Speakers Chart #1 Michael F. Barry Chairman of the Board, Chief Executive Officer & President Margaret M. Loebl Vice President, Chief Financial Officer & Treasurer Robert T. Traub General Counsel

  4. Slide 4: Third Quarter 2014 Headlines

    Third Quarter 2014 Headlines ▪ 8% revenue growth on increased product volume ▪ Operating income drives non - GAAP earnings per diluted share up 31% to $1.19 ▪ Net operating cash flows of approximately $30 million generated in the quarter Chart #2

  5. Slide 5: Chairman Comments Third Quarter 2014

    Chairman Comments Third Quarter 2014 ▪ Third Quarter 2014 x Strong volumes drive above - market sales growth x Double - digit growth in North America, Asia Pacific and Europe, partially offset by poor economic conditions in South America x Stable margins x Effective business model & competitive posi

  6. Slide 6: Chief Financial Officer -- Highlights

    Chief Financial Officer -- Highlights 1) Record Volume Drives Above - Market Growth in Net Sales 2) Stable Margins Continue to Drive Strong Operating Results 3) Below Operating Income Items Contribute to Strong Results 4) Continued EBITDA Growth and Non - GAAP EPS Up 31% 5) Strong Cash Flow and Bala

  7. Slide 7: Product Volume by Quarter

    Product Volume by Quarter Thousand Kilograms 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,000 4Q08 YTD Avg. 1Q092Q093Q094Q091Q102Q103Q104Q101Q112Q113Q114Q111Q122Q123Q124Q121Q132Q133Q134Q131Q142Q143Q14 Chart #5

  8. Slide 8: Financial Snapshot

    Financial Snapshot Q3 2014 Q3 2013 YTD 2014 YTD 2013 Net Sales ($Mils.) 198.9 184.1 571.8 545.1 Gross Margin (%) 35.4 35.9 35.6 35.9 Operating Margin (%) 10.3 10.2 10.6 10.3 Net Income attributable to Quaker Chemical Corporation ($Mils.) 15.7 12.6 43.9 42.3 Adjusted EBITDA ($Mils.) – Trailing Twelve

  9. Slide 9: Gross Margin Percentage

    Gross Margin Percentage 28.0% 34.7% 35.4% 32.6% 33.7% 35.8% 35.6% 20.0% 25.0% 30.0% 35.0% 40.0% 2008 2009 2010 2011 2012 2013 YTD 2014 Gross Margin Percentage 35.9% 35.4% 35.8% 35.7% 35.4% 20.0% 25.0% 30.0% 35.0% 40.0% Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Gross Margin Percentage Chart #7

  10. Slide 10: Adjusted EBITDA Baseline Historical Performance

    Adjusted EBITDA Baseline Historical Performance $40.1 $66.8 $73.0 $80.9 $89.6 $101.4 $44.2 9.8% 12.3% 10.7% 11.4% 12.3% 13.3% 6.9% 2008 2009 2010 2011 2012 2013 Q3 YTD 2014 Annualized Adjusted EBITDA ($ Mils.) Adjusted EBITDA Margin (%) 2008 – 2014 Annualized CAGR: 16.7% +640 Margin bps Chart #8

  11. Slide 11: Balance Sheet Net Cash / (Debt)

    Balance Sheet Net Cash / (Debt) -$100 -$80 -$60 -$40 -$20 $0 $20 $40 $60 $80 2008 2009 2010 2011 2012 2013 Q3 2014 $ Millions Cash ST/LT Debt Net Debt Chart #9

  12. Slide 12: Appendix

    @ Quaker APPENDIX

  13. Slide 13: Non-GAAP Earnings Per Diluted Share Reconciliation

    Non - GAAP Earnings Per Diluted Share Reconciliation Chart #10 Q3 2014 Q3 2013 YTD 2014YTD 2013 GAAP Earnings Per Diluted Share 1.18$ 0.95$ 3.31$ 3.21$ U.K. pension plan amendment per diluted share -$ -$ 0.05$ -$ U.S. customer bankruptcy per diluted share 0.02$ -$ 0.02$ -$ Mineral oil excise tax ref

  14. Slide 14: Annualized Adjusted EBITDA Reconciliation

    Annualized Adjusted EBITDA Reconciliation Chart #11 2008 2009 2010 2011 2012 2013 YTD Q3 2014 Net income 9,833 16,058 32,120 45,892 47,405 56,339 43,853 Depreciation 10,879 9,525 9,867 11,455 12,252 12,339 9,154 Amortization 1,177 1,078 988 2,338 3,106 3,445 2,754 Interest expense 5,509 5,533 5,225

  15. Slide 15: Trailing Twelve Months Adjusted EBITDA Reconciliation

    Trailing Twelve Months Adjusted EBITDA Reconciliation Chart #12 I = G + H H G = F - D F E = C + D D C = B - A B A Trailing Twelve Months Q3 2014 YTD Q3 2014 Last Three Months 2013 YTD 2013 Trailing Twelve Months Q3 2013 YTD Q3 2013 Last Three Months 2012 YTD 2012 YTD Q3 2012 Net income 57,939 43,853

Quaker Chemical — Q3 2014 Earnings Presentation on 6ix