Ecovyst Inc. · NYSE:ECVT
Ecovyst — Q2 2018 Earnings Presentation
25 slides from Ecovyst's earnings presentation, Aug 9, 2018
Slide 1: Second Quarter 2018 Investor Presentation
Second Quarter 2018 August 9, 2018 – 10:00 AM ET INVESTOR PRESENTATION 1
Slide 2: Legal Disclaimer
LEGAL DISCLAIMER Forward-Looking Statements Some of the information contained in this presentation, the conference call during which this presentation is reviewed and any discussions that follow constitutes “forward-looking statements”. Forward-looking statements can be identified by words such as “
Slide 3: Solid 2nd Quarter Drives Strong First Half Results
SOLID 2ND QUARTER DRIVES STRONG FIRST HALF RESULTS Capturing growth trends and positioned for significant free cash flow Sales growth of 12% and Adjusted EBITDA of 5%, driven by underlying demand in nearly all our end markets Growth drivers in the second quarter included: o Robust hydrocracking o Do
Slide 4: Second Quarter 2018 Financial Results
SECOND QUARTER 2018 FINANCIAL RESULTS Growth from performance materials, performance chemicals and Zeolyst JV Second Second Quarter Quarter % ($ in millions) 2018 2017 Change Sales 434.7 389.3 12% Adjusted EBITDA 128.9 122.8 5% Adjusted EBITDA Margin1 26.6% 29.2% (260 bps) o Sales growth driven prim
Slide 5: Environmental Catalysts & Services Performance Highlights
ENVIRONMENTAL CATALYSTS & SERVICES PERFORMANCE HIGHLIGHTS Growth in fuels & emission control catalysts Second Second Quarter Quarter % ($ in millions) 2018 2017 Change Sales PQ 129.4 124.0 4% Zeolyst JV 49.5 30.7 61% Adjusted EBITDA 64.9 64.3 1% Adjusted EBITDA Margin1 36.3% 41.6% (530 bps) o Zeolys
Slide 6: Performance Materials & Chemicals Performance Highlights
PERFORMANCE MATERIALS & CHEMICALS PERFORMANCE HIGHLIGHTS Growth from highway safety and industrial applications Second Second Quarter Quarter % ($ in millions) 2018 2017 Change Sales 306.2 266.1 15% Adjusted EBITDA 73.4 66.4 11% Adjusted EBITDA Margin 24.0% 25.0% (100 bps) o Growth driven by highway
Slide 7: 2018 Guidance Reaffirmed: Sales, Adjusted EBITDA, Free Cash Flow
2018 GUIDANCE REAFFIRMED: SALES, ADJUSTED EBITDA, FREE CASH FLOW Expected Free Cash Flow of $120 Million to $140 Million 2017 2018 Change from ($ in millions except %) Actual Outlook 2017 Sales 1,472.1 1,545 – 1,575 5% – 7% Adjusted EBITDA 453.3 470 – 490 4% – 8% Free Cash Flow (24.4) 120 – 140 ~145
Slide 8: Growth Drivers for 2018 and Beyond
GROWTH DRIVERS FOR 2018 AND BEYOND Product portfolio positioned to meet robust customer demand Environmental Catalysts & Services (EC&S): Regeneration services – expanding sulfuric acid alkylation to meet higher octane demand Silica catalysts – growing global polyethylene demand for plastics F
Slide 9: Refining Services – Supply Infrastructure
#1 U.S. Supplier REFINING SERVICES – SUPPLY INFRASTRUCTURE Regeneration Services business is the leading supplier with key competitive position in Gulf and California 43 Refineries using Sulfuric Acid Alkylation Deliveries by Shipping Mode > 65% of alky capacity located in West Coast and Gulf Coast
Slide 10: Refining Services Growth Outlook
REFINING SERVICES GROWTH OUTLOOK PQ best positioned to serve new capacity expansions in Gulf Gulf Coast Sulfuric Acid Regeneration Demand Planned alkylation expansions, all Gulf Coast, Sulfuric based (000 Tons Per Year) 2,200 Expansions driven by: o Growth in premium share of total gasoline pool 1,6
Slide 11: PQ Investment Highlights
PQ INVESTMENT HIGHLIGHTS Leading Global Producer of Specialty Catalysts, Materials, Chemicals & Services Mid to High Leading Adjusted Proven Performance Strong Free Cash Single Digit EBITDA Margins in all Macro Flow to Delever Growth Economic Cycles and Grow LTM Q2 2018 Adjusted EBITDA margin 1 38%
Slide 12: Appendix
APPENDIX re) PQ Corporation
Slide 13: Sales and Adjusted EBITDA Major Change Factors
SALES AND ADJUSTED EBITDA MAJOR CHANGE FACTORS Second Quarter and YTD 2018 SALES Three Months Ended Six Months Ended June 30, 2018 June 30, 2018 Environmental Performance Environmental Performance Sales PQ Group Catalysts Materials PQ Group Catalysts Materials (in $ millions and %) Holdings Inc. & S
Slide 14: Cash Flow
CASH FLOW Improved ~$23 million year-on-year YTD YTD Second Second Quarter Quarter ($ in millions) 2018 2017 Cash Flow from Operations before interest and tax 121.4 129.4 Less: Cash Paid for Taxes 11.1 15.9 Cash Paid for Interest 60.2 91.7 Cash Flow from Operations 50.1 21.8 Less: Capital Investment
Slide 15: Debt Schedule
DEBT SCHEDULE Flexibility to pay down debt; mitigated interest rate exposure DEBT MATURITY SCHEDULE Capitalization Q2 2018 $1,500 $1,472.0 Debt: ($ in millions) $1,350 ABL Revolving Credit Facility 32.0 $1,200 New USD First Lien Term Loan 1,260.7 $1,050 First Lien Secured Notes 625.0 $900 Millions T
Slide 16: Demonstrated Strong Financial Performance Across Macroeconomic Cycles
DEMONSTRATED STRONG FINANCIAL PERFORMANCE ACROSS MACROECONOMIC CYCLES Stable and improving margins Adjusted EBITDA and Adjusted EBITDA Margin (%)1,2,3 ($ in millions except %) o Long-term EBITDA CAGR of ~ 7% o Attractive, stable margins o Steady margin expansion a result of high value added specialt
Slide 17: Quarterly Net Income to Adjusted Net Income and Adjusted Diluted EPS
QUARTERLY NET INCOME TO ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE Q2 2018 and Year 2017 Six Months Three Months Ended Ended LTM Ended Three Months Ended Year Ended March 31, June 30, June 30, June 30, March 31, June 30, September 30, December 31, December 31, ($ in millions except
Slide 18: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Net Income (Loss) to Segment Adjusted EBITDA Three Months Ended Six Months Ended LTM Ended Three Months Ended September Year Ended March 31, June 30, June 30, June 30, March 31, June 30, 30, December 31, December 31, ($ in millions) 2018 2018 2018 2018 2
Slide 19: Descriptions to PQ Non-GAAP Reconciliations
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Descriptions to PQ Non-GAAP Reconciliations Descriptions to PQ Non-GAAP Reconciliations a) We use Adjusted EBITDA as a performance measure to evaluate our financial results. Because our Environmental Catalysts and Services segment includes our 50% intere
Slide 20: Quarterly Segment Sales and Adjusted EBITDA
QUARTERLY SEGMENT SALES AND ADJUSTED EBITDA Year 2017 and Q2 2018 Six months For the Quarter Ended Three Months Ended Ended LTM Ended Three Months Ended September Year Ended June 30, June 30, March 31, June 30, March 31, June 30, 30, December 31, December 31, ($ in millions except %) 2018 2018 2018
Slide 21: 2005 – 2017 Reconciliations
2005 – 2017 RECONCILIATIONS Legacy Business – Sales & Adjusted EBITDA Year Ended December 31, 2015 2016 Pro Pro ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 forma 3 forma 3 2017 Reconciliation of sales and adjusted EBITDA Legacy PQ Sales 1 635.3 708.6 775.0 977.0 1,009.9 1,087.9
Slide 22: 2005 – 2014 Reconciliations for Adjusted EBITDA and Margins
2005 – 2014 RECONCILIATIONS FOR ADJUSTED EBITDA AND MARGINS Legacy PQ1 – Net Income (Loss) to Adjusted EBITDA Reconciliation Year Ended December 31, ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Reconciliation of net income (loss) attributable to Legacy PQ to Adjusted EBITDA Net
Slide 23: 2005 – 2014 Reconciliations for Adjusted EBITDA and Margins
2005 – 2014 RECONCILIATIONS FOR ADJUSTED EBITDA AND MARGINS Legacy Eco Services1 - Net Income (Loss) to Adjusted EBITDA Reconciliation Year Ended December 31, 2014 2014 ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 Successor Predecessor Reconciliation of net income (loss) attributable
Slide 24: 2015 – 2017 Reconciliations for Adjusted EBITDA and Margins
2015 – 2017 RECONCILIATIONS FOR ADJUSTED EBITDA AND MARGINS Post-Business Combination PQ – Net Income (Loss) to Adjusted EBITDA Reconciliation Year Ended December 31, 2015 2016 ($ in millions) Pro forma 1 Pro forma 1 2017 Reconciliation of net income (loss) attributable to PQ Group Holdings Inc. to
Slide 25: Te), PQ Corporation
Te), PQ Corporation