Ecovyst Inc. · NYSE:ECVT
Ecovyst — PQ Group Holdings — Merger or Acquisition (October 2020)
15 slides from Ecovyst's merger presentation, Oct 16, 2020
Slide 1: PQ Advances Portfolio Transformation
PQ ADVANCES PORTFOLIO TRANSFORMATION October 16, 2020
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: Our Diversified Specialty Businesses
OUR DIVERSIFIED SPECIALTY BUSINESSES FUTURE FOCUSED DIVESTITURE STRATEGIC REVIEW PORTFOLIO AGREED UNDERWAY REFINING PERFORMANCE PERFORMANCE CATALYSTS1 SERVICES MATERIALS CHEMICALS Increased octane demand Tighter fuels standards Higher highway safety Environmentally driven o Sulfuric acid production
Slide 4: PQ's Simpler + Stronger Strategy
PQ’S SIMPLER + STRONGER STRATEGY EVALUATION – 2018 SIMPLIFICATION – 2019 TRANSFORMATION – 2020 PATHWAY GOALS Delayered and reorganized into Enhance growth rate four distinct businesses Achieve higher and sustainable Optimized the performance and Adjusted EBITDA margins positioning of our businesses,
Slide 5: Transaction Overview
TRANSACTION OVERVIEW PQ taking most definitive step yet to transform portfolio to higher-growth, higher-margin company Enters definitive agreement to sell Performance Materials to an affiliate of The Jordan Company, L.P. (“TJC”) for $650 million o Expected to close by year end 2020; subject to regul
Slide 6: Expanding Capital Allocation Priorities
EXPANDING CAPITAL ALLOCATION PRIORITIES CONSISTENT TRANSACTION AND CASH SIGNIFICANT ADJUSTED FREE CASH FLOW GENERATION PROVIDE USE DEBT REDUCTION… GENERATION2… OF PROCEEDS FLEXIBILITY… ($ in millions) ($ in millions) 2,703 Expect to reduce debt 166 by ~$460 million 155 145 Targeting special 134 divi
Slide 7: Portfolio Shifts to Higher Growth and Margins
PORTFOLIO SHIFTS TO HIGHER GROWTH AND MARGINS TARGET PQ: Catalysts / Refining Services CURRENT PQ: Catalysts / Refining Services / Performance Chemicals LEGACY PQ: Catalysts / Refining Services / Performance Chemicals / Performance Materials SALES GROWTH 14% ADJUSTED EBITDA GROWTH 16% ADJUSTED EBITD
Slide 8: Next Portfolio Focus: Performance Chemicals
NEXT PORTFOLIO FOCUS: PERFORMANCE CHEMICALS PERFORMANCE CHEMICALS KEY Diverse Consumer Product and CUSTOMERS Industrial Product manufacturers COMPETITIVE STRENGTHS GROWTH DRIVERS o Technology leader in silica-based materials o $10 to $15 million Adjusted EBITDA annualized improvement (process and pr
Slide 9: Unlocking the Value Within PQ
UNLOCKING THE VALUE WITHIN PQ TODAY’S TRANSACTION TARGETED USE NEXT ANNOUNCEMENT VALUATION OF PROCEEDS STEPS Definitive Attractive ~$460 million debt Complete agreement to sell valuation multiple reduction and up strategic review Performance of 8.7x LTM June to $250 million, or for Performance Mater
Slide 10: Appendix
APPENDIX Te) PQ Corporation
Slide 11: Annual Segment Sales, Adjusted EBITDA and Margins
ANNUAL SEGMENT SALES, ADJUSTED EBITDA AND MARGINS Year Ended For the Quarter Ended December 31, ($ in millions except %, unaudited) 2019 2018 2017 Sales: Refining Services 447.1 455.6 398.4 Silica Catalysts 85.7 72.1 75.3 Performance Materials 363.0 378.3 324.2 Performance Chemicals 685.1 717.3 687.
Slide 12: Reconciliation for Adjusted Free Cash Flow
RECONCILIATION FOR ADJUSTED FREE CASH FLOW Full Year Full Year Full Year ($ in millions) 2019 2018 2017 Cash Flow from Operations before interest 401.9 377.5 364.5 and tax Less: Cash paid for taxes 17.4 23.8 29.2 Cash paid for interest1 116.8 105.1 170.1 Cash Flow from Operations 267.7 248.6 165.2 L
Slide 13: Reconciliation for Net Income to Segment Adjusted EBITDA
RECONCILIATION FOR NET INCOME TO SEGMENT ADJUSTED EBITDA Year Ended Year Ended Year Ended December 31, December 31, December 31, ($ in millions) 2019 2018 2017 Reconciliation of net income attributable to PQ Group Holdings Inc. to Segment Adjusted EBITDA Net income attributable to PQ Group Holdings
Slide 14: Descriptions to Non-GAAP Reconciliation
DESCRIPTIONS TO NON-GAAP RECONCILIATION a) We use Adjusted EBITDA as a performance measure to evaluate our financial results. Because our Catalysts segment includes our 50% interest in the Zeolyst Joint Venture, we include an adjustment for our 50% proportionate share of depreciation, amortization a
Slide 15: Shaping our path for a sustainable future
Shaping our path fora sustainable future . fe) PQ Corporation
PQ Group Holdings — Merger or Acquisition (October 2020) on 6ix