Quaker Houghton · NYSE:KWR
Quaker Houghton — Q1 2023 Earnings Presentation
20 slides from Quaker Houghton's earnings presentation, May 5, 2023
Slide 1: First Quarter 2023 Results Investor Conference Call
Quaker Houghton First Quarter 2023 Results Investor Conference Call
Slide 2: Forward-Looking Statements
Forward-Looking Statements Regulation G The attached charts include Company 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 operati
Slide 3: Non-GAAP and Pro Forma Measures
Non-GAAP and Pro Forma Measures The information included in this presentation includes non-GAAP (unaudited) financial information that includes EBITDA, adjusted EBITDA, adjusted EBITDA margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP earnings per diluted sh
Slide 4: Speakers
Speakers Andy Tometich Chief Executive Officer & President Shane W. Hostetter Executive Vice President, Chief Financial Officer Robert T. Traub Senior Vice President, General Counsel & Corporate Secretary David A. Will Vice President & Chief Accounting Officer Jeffrey Schnell Vice President, Investo
Slide 5: Q1'23 Highlights
Q1’23 Highlights Record net sales in Q1’23 of $500m, an increase of 5% Y/Y, driven by strong price capture Delivered $79m of adj. EBITDA, primarily due to the ongoing recovery in margins across all segments Generated operating cash flow of $38m; leverage declined to 2.7x net debt / adjusted EBTIDA1
Slide 6: Financial Snapshot
Financial Snapshot (Unaudited; Dollars in thousands, unless otherwise noted) Q1 2023 Q1 2022 Variance(1) Q4 2022 Variance(1) GAAP Net sales $ 500.1 $ 474.2 $26.0 5% $ 484.8 $15.3 3% Gross profit 173.5 146.1 27.4 19% 156.3 17.2 11% Gross margin (%) 35% 31% 4% 13% 32% 3% 8% Operating income 49.9 29.4
Slide 7: Total Company Volume Trend
Total Company Volume Trend (kilograms, in thousands) 135,000 112,500 90,000 67,500 45,000 22,500 — Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Sales volumes declined compared to Q1’22 due to softer end market conditions Sales volumes increased comp
Slide 8: Adjusted EBITDA
1 Adjusted EBITDA (dollars in millions) $274 $275 $79 $257 $236 $234 $60 $221 $222 $215 2016 2017 2018 2019 2020 2021 2022 Q1'23 LTM Q1 2022 Q1 2023 Generated $79m of adjusted EBITDA in Q1’23, +30% Y/Y due to an increase in net sales and a recovery in gross margins 1 Periods presented prior to the C
Slide 9: Leverage and Liquidity Update
Leverage and Liquidity Update Net Debt and Leverage Ratio1 (Dollars in Millions) • Total debt of $943 million $799 $787 $815 $774 • Cash and cash equivalents of $190 million $750 $759 $759 $765 $753 $741 $736 $717 • Net debt of $753 million • Leverage of 2.7x as of March 31, 20231 • Operating well w
Slide 10: Appendix: Actual and Non-GAAP Results
Appendix Actual and Non-GAAP Results
Slide 11: Non-GAAP Operating Reconciliation
Non-GAAP Operating Reconciliation (Unaudited; Dollars in thousands, unless otherwise noted) Three Months Ended March 31, Non-GAAP Operating Income and Margin Reconciliations: 2023 2022 Operating income $ 49,929 $ 29,403 Combination, integration and other acquisition-related expenses — 4,053 Restruct
Slide 12: Adjusted EBITDA & Non-GAAP Net Income Reconciliation
Adjusted EBITDA & Non-GAAP Net Income Reconciliation (Unaudited; Dollars in thousands, unless otherwise noted) Three Months Ended March 31, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Non-GAAP Net Income Reconciliations: 2023 2022 Net income attributable to Quaker Chemical Corporation $ 29,5
Slide 13: Non-GAAP EPS Reconciliation
Non-GAAP EPS Reconciliation Three Months Ended March 31, Non-GAAP Earnings per Diluted Share Reconciliations: 2023 2022 GAAP earnings per diluted share attributable to Quaker Chemical Corporation common shareholders $ 1.64 $ 1.11 Equity (income) loss in a captive insurance company per diluted share
Slide 14: Segment Performance
Segment Performance (Unaudited; Dollars in thousands, except per share amounts) Three Months Ended March 31, 2023 2022 Net sales Americas $ 251,413 $ 212,091 EMEA 152,449 146,819 Asia/Pacific 96,286 115,261 Total net sales $ 500,148 $ 474,171 Segment operating earnings Americas $ 66,125 $ 45,022 EME
Slide 15: Historical Segment Results
1 Historical Segment Results (Unaudited; Dollars in thousands) Net Sales Quarterly Annual Segment Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 FY'20 FY'21 FY'22 Americas $ 172,635 $ 115,230 $ 159,279 $ 159,899 $ 180,814 $ 186,641 $ 197,396 $ 197,361 $ 212,091 $ 235,959 $ 2
Slide 16: Appendix
& Quaker Veg Houghton. Forward Together"
Slide 17: Full Year 2019 Pro Forma Reconciliation
Full Year 2019 Pro Forma Reconciliation (dollars in millions) 2019 Quaker Houghton Divestitures Other (a) Pro Forma* Net Sales $ 1,134 $ 475 $ (34) $ (13) $ 1,562 Net Income (Loss) Attributable to Quaker Houghton $ 32 $ (3) $ (6) $ 10 $ 33 Depreciation and Amortization 45 31 — 3 77 Interest Expense,
Slide 18: Full Year 2018 Pro Forma Reconciliation
Full Year 2018 Pro Forma Reconciliation (dollars in millions) 2018 Quaker Houghton Divestitures Other (a) Pro Forma* Net Sales $ 868 $ 861 $ (53) $ (22) $ 1,655 Net Income (Loss) Attributable to Quaker Houghton 59 — (9) 17 66 Depreciation and Amortization 20 54 — 5 79 Interest Expense, Net 4 56 — (2
Slide 19: Full Year 2017 Pro Forma Reconciliation
Full Year 2017 Pro Forma Reconciliation (dollars in millions) 2017 Quaker Houghton Divestitures Other (a) Pro Forma* Net Income (Loss) Attributable to Quaker Houghton $ 20 $ (47) $ (9) $ 9 $ (26) Depreciation and Amortization 20 55 — 5 80 Interest Expense, Net 1 51 — (16) 36 Taxes on Income (b) 42 4
Slide 20: Full Year 2016 Pro Forma Reconciliation
Full Year 2016 Pro Forma Reconciliation (dollars in millions) 2016 Quaker Houghton Divestitures Other (a) Pro Forma* Net Income (Loss) Attributable to Quaker Houghton $ 61 $ (37) $ (8) $ 7 $ 23 Depreciation and Amortization 20 55 — 5 80 Interest Expense, Net 1 51 — (14) 37 Taxes on Income (b) 23 (5)