Graftech International Ltd. · NYSE:EAF
Graftech International — Q4 2022 Earnings Presentation
18 slides from Graftech International's earnings presentation, Feb 3, 2023
Slide 1: Q4 2022 Results
Q4 2022 Results February 3, 2023 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: Navigating Near-Term Challenges
Navigating Near-Term Challenges Macro Events Impacting the Steel Industry Geopolitical conflict High levels of inflation Economic uncertainty GrafTech Specific Headwinds Temporary suspension of Monterrey, Mexico operations Substantial shift in mix from LTA to non-LTA business in 2023 Looki
Slide 4: Update on Restart of Operations in Monterrey, Mexico
Update on Restart of Operations in Monterrey, Mexico Current Status Temporary suspension notice issued Sept. 15, 2022 by state environmental authorities Suspension notice conditionally lifted on Nov. 17, 2022 Production operations restarted immediately Significant progress being made on rest
Slide 5: Prioritizing Safety
Prioritizing Safety Total Recordable Incident Rate (“TRIR”)(1) 1.55 0.95 0.94 0.51 0.49 2018 2019 2020 2021 2022 (1) TRIR measured per 200,000 hours worked. 5
Slide 6: Steel Capacity Utilization Rates
Steel Capacity Utilization Rates Global steel production, excluding China, of 194 million tons in Q4 2022 versus 219 million tons in Q4 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% 71% 7
Slide 7: Production and Sales
Production and Sales Q4 2022 production volume down 36%, sales volume down 37% and net sales down 32% compared to Q4 2021 Reflects impact of temporary suspension of Monterrey, Mexico operations and softness in graphite electrode demand Q4 2022 weighted-average realized non-LTA prices up 22% co
Slide 8: Earnings and Cash Flow
Earnings and Cash Flow Net income of $50 million and net income margin of 20% Earnings per share (“EPS”) of $0.20 and adjusted EPS(1) of $0.17 Adjusted EBITDA(1) of $80 million and adjusted EBITDA margin(2) of 32% Operating cash flow of $50 million and adjusted free cash flow(1) of $23 milli
Slide 9: Balance Sheet Strength and Financial Flexibility
Balance Sheet Strength and Financial Flexibility Gross debt to adjusted EBITDA(1) of 1.7x as of December 31, 2022 Net debt to adjusted EBITDA(1) of 1.5x as of December 31, 2022 Liquidity of $462 million as of December 31, 2022 Liquidity Debt Maturity Profile (in millions) (in millions) $462 $3
Slide 10: Capital Allocation
Capital Allocation Balanced Capital Allocation in 2022 Repaid $110 million of term loan Returned $70 million to stockholders through stock repurchases and dividends Invested $72 million in capital assets Preserved $76 million of cash flow generation to increase liquidity Near-Term Capital Al
Slide 11: GrafTech: Key Areas of Focus
GrafTech: Key Areas of Focus Navigating Near-term Challenges in the Operating Environment Managing operating costs and capital expenditures as well as working capital levels Aligning our production volume with our near-term outlook for graphite electrode demand Focusing on delivering excellent
Slide 12: Why GrafTech
Why GrafTech An Industry Leader in the Production of High-Quality Graphite Electrodes Graphite electrodes are essential to the operation of an EAF Reflecting environmental benefits, growth in EAF steelmaking expected to continue outpacing integrated steelmaking Sustainable Competitive Advantages
Slide 13: Non-GAAP Financial Measures
Non-GAAP Financial Measures In addition to providing results that are determined in accordance with GAAP, we have provided certain financial measures that are not in accordance with GAAP. EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted EPS, free cash flow, adjusted fre
Slide 14: Reconciliation to Adjusted Net Income
Reconciliation to Adjusted Net Income For the Three Months Ended Dec 31, Mar 31, June 30, Sept 30, Dec 31, ($ in thousands) 2021 2022 2022 2022 2022 Net income $ 141,480 $ 124,183 $ 114,997 $ 93,451 $ 50,331 Adjustments, pre-tax: Pension and OPEB plan (benefits) expenses(1) (3,840) 551 553 534 (8,99
Slide 15: Reconciliation to Adjusted EPS
Reconciliation to Adjusted EPS For the Three Months Ended Dec 31, Mar 31, June 30, Sept 30, Dec 31, 2021 2022 2022 2022 2022 EPS $ 0.54 $ 0.47 $ 0.44 $ 0.36 $ 0.20 Adjustments per share, pre-tax: Pension and OPEB plan (benefits) expenses(1) (0.02) - - - (0.04) 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, Dec 31, ($ in thousands) 2021 2021 2021 2021 2022 2022 2022 2022 Net income $ 98,799 $ 28,165 $ 119,886 $ 141,480 $ 124,183 $ 114,997 $ 93,451 $ 50,331 Add: Depreciation and amort
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, Dec 31, ($ in thousands) 2021 2022 Long-term debt $ 1,029,561 $ 921,803 Long-term debt, current maturities 127 124 Add: Unamortized debt discount and issuance costs (14,449) (12,049) Total gross debt 1,044,137 933,976 Less
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 Dec 31, Mar 31, June 30, Sept 30, Dec 31, ($ in thousands) 2021 2022 2022 2022 2022 Net cash provided by operating activities $ 100,029 $ 146,316 $ 60,123 $ 68,166 $ 50,023 Capital expenditures (17,831) (16,855)
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