Slide 1: Q2 2017 Results & Outlook
Q2 2017 Results & Outlook Conference Call│August 3, 2017 ©2017 Harsco Corporation. All Rights Reserved
Slide 2: Administrative Items
Administrative Items Conference Call and Access to Information More information on Harsco's quarterly earnings, including the Company’s earnings press release issued today and this presentation, is available on the Investor Relations portion of Harsco’s website. Company management will discuss the C
Slide 3: CEO Perspective
CEO Perspective ▪ Second quarter operating income above guidance ▪ 2017 guidance raised again; reflects further improvement in Metal & Minerals and Industrial outlooks ▪ Business updates: ▪ M&M – Track record now of strong execution; continuing to evaluate growth strategy and investments; underlying
Slide 4: Q2 2017 Financial Summary – Key Performance Indicators
Q2 2017 Financial Summary – Key Performance Indicators ($ - millions, except EPS) ▪ Q2 operating income above Change vs. 2016 guidance range of $32-38 Second $ % million; each operating Quarter segment contributed to better- Revenues 395 25 7% than-expected quarter ▪ Metals & Minerals and Industrial
Slide 5: Q2 2017 – Metals & Minerals
Q2 2017 – Metals & Minerals Summary Results LST Continuing Sites (million tons) ($ in millions) Q2 2017 Q2 2016 % change 40 Revenues, as reported 259 254 2% 36 Operating income - GAAP 32 31 4% 32 28 Operating margin - GAAP 12.4% 12.2% 24 Free cash flow (YTD) 42 61 (32)% 20 ROIC (TTM) 11.3 7.3 400bps
Slide 6: Q2 2017 - Industrial
Q2 2017 - Industrial Summary Results Revenue Mix ($ in millions) Q2 2017 Q2 2016 % change 120 100 Revenues, as reported 74 66 11% 80 Operating income - GAAP 9 7 25% 60 40 Operating margin - GAAP 12.4% 11.0% 20 0 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Free cash flow (YTD) 10 15 (
Slide 7: Q2 2017 - Rail
Q2 2017 - Rail Summary Results Revenue Mix ($ in millions) Q2 2017 Q2 2016 % change 80 70 Revenues, as reported 62 50 24% 60 50 Operating income - GAAP 8 (32) nmf 40 Operating margin - GAAP 12.8% nmf 30 20 Adjusted operating income* 8 8 nmf 10 0 Adjusted operating margin* 12.8% 16.2% Q1 15 Q2 15 Q3
Slide 8: 2017 Summary Outlook
2017 Summary Outlook 2017 Outlook 2017 Prior 2016 Actual GAAP Operating $125 to $140 million $115 to $130 million $63 million Income Adjusted Operating $125 to $140 million $115 to $130 million $116 million Income(1) $80 million to $95 $70 million to $85 Free Cash Flow $100 million million million R
Slide 9: Q3 2017 Outlook
Q3 2017 Outlook ▪ Adjusted operating income is expected to be between $30 to $37 million versus $29 million in Q3 2016 ▪ Adjusted diluted earnings per share of $0.13 to $0.18 ▪ Year-over-year considerations include: ▪ M&M: Lower nickel price/volume and exited sites to be offset by higher LST, improv
Slide 10: Q&A
Q&A 10 ©2017 Harsco Corporation. All Rights Reserved
Slide 11: Appendix
Appendix ©2017 Harsco Corporation. All Rights Reserved
Slide 12: 2017 Business Outlook
2017 Business Outlook Excluding unusual items 2017 versus 2016 Revenues ↑ low single digits Operating Income ↑ ~20% at mid-point, excluding unusual items Metals & Minerals + LST, cost/operational savings, new sites/services, Drivers commodities prices - Exited sites, professional fees Revenues ↑ ~15
Slide 13: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures HARSCO CORPORATION RECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS EXCLUDING UNUSUAL ITEMS TO DILUTED EARNINGS (LOSS) PER SHARE FROM CONTINUING OPERATIONS AS REPORTED (Unaudited) Three Months Ended Six Months Ended June 30 June 30
Slide 14: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures HARSCO CORPORATION RECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS EXCLUDING UNUSUAL ITEMS TO DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS AS REPORTED (Unaudited) Twelve Months Ended December 31 2016 Diluted loss per share
Slide 15: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures HARSCO CORPORATION REVIEW OF OPERATIONS BY SEGMENT EXCLUDING UNUSUAL ITEMS (Unaudited) Harsco Metals & Harsco Harsco Consolidated (In thousands) Minerals Industrial Rail Corporate Totals Three Months Ended June 30, 2017: Operating income (loss) as reported (a) $ 3
Slide 16: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures HARSCO CORPORATION RECONCILIATION OF ADJUSTED OPERATING INCOME (LOSS) EXCLUDING UNUSUAL ITEMS BY SEGMENT TO OPERATING INCOME (LOSS) AS REPORTED BY SEGMENT (Unaudited) Harsco Metals & Harsco Harsco Consolidated (In thousands) Minerals Industrial Rail Corporate Tota
Slide 17: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures HARSCO CORPORATION RECONCILIATION OF ADJUSTED OPERATING INCOME (LOSS) EXCLUDING UNUSUAL ITEMS BY SEGMENT TO OPERATING INCOME (LOSS) AS REPORTED BY SEGMENT (Unaudited) Harsco Metals & Harsco Harsco Consolidated (In thousands) Minerals Industrial Rail Corporate Tota
Slide 18: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures HARSCO CORPORATION RECONCILIATION OF ADJUSTED OPERATING INCOME (LOSS) EXCLUDING UNUSUAL ITEMS BY SEGMENT TO OPERATING INCOME (LOSS) AS REPORTED BY SEGMENT (Unaudited) Harsco Metals & Harsco Harsco Consolidated (In thousands) Minerals Industrial Rail Corporate Tota
Slide 19: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures HARSCO CORPORATION RECONCILIATION OF FREE CASH FLOW TO NET CASH PROVIDED BY OPERATING ACTIVITIES (Unaudited) Three Months Ended Six Months Ended June 30 June 30 (In thousands) 2017 2016 2017 2016 Net cash provided by operating activities $ 52,903 $ 31,648 $ 46,779
Slide 20: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures HARSCO CORPORATION RECONCILIATION OF FREE CASH FLOW TO NET CASH PROVIDED BY OPERATING ACTIVITIES (Unaudited) Twelve Months Ended December 31 (In thousands) 2016 Net cash provided by operating activities $ 159,785 Less capital expenditures (69,340) Plus capital exp
Slide 21: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures HARSCO CORPORATION RECONCILIATION OF FREE CASH FLOW TO NET CASH PROVIDED BY OPERATING ACTIVITIES (Unaudited) Projected Twelve Months Ending December 31 2017 (In millions) Low High Net cash provided by operating activities $ 175 $ 180 Less capital expenditures (101
Slide 22: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures HARSCO CORPORATION RECONCILIATION OF RETURN ON INVESTED CAPITAL EXCLUDING UNUSUAL ITEMS TO NET INCOME (LOSS) FROM CONTINUING OPERATIONS AS REPORTED (a) (Unaudited) Trailing Twelve Months for Period Ended June 30 (In thousands) 2017 2016 Loss from continuing operat
Slide 23: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures HARSCO CORPORATION RECONCILIATION OF RETURN ON INVESTED CAPITAL EXCLUDING UNUSUAL ITEMS TO NET INCOME (LOSS) FROM CONTINUING OPERATIONS AS REPORTED (a) (Unaudited) Year Ended December 31 (In thousands) 2016 Loss from continuing operations $ (80,422) Unusual items: