Suncoke Energy, Inc. · NYSE:SXC
Suncoke Energy — Q1 2013 Earnings Presentation
31 slides from Suncoke Energy's earnings presentation, Apr 25, 2013
Slide 1: Q1 2013 Earnings Conference Call
Q1 2013 Earnings Conference Call April 25, 2013
Slide 2: Forward-Looking Statements
Forward-Looking Statements This slide presentation should be reviewed in conjunction with the First Quarter 2013 earnings releases of SunCoke Energy, Inc. (SunCoke) and SunCoke Energy Partners, L.P. (Partnership) and the conference call held on April 25, 2013 at 10:00 a.m. ET. Some of the informatio
Slide 3: SunCoke Energy, Inc. Results
SUNCOKE ENERGY, INC. RESULTS
Slide 4: Q1 2013 Highlights
Q1 2013 Highlights • Executed SunCoke Energy Partners initial public offering – Declared first quarterly cash distribution prorated for the date of the IPO – Currently expect to increase quarterly distribution by ~2.5% for next quarter and anticipate an overall increase of ~7% for the Q4 2013 distri
Slide 5: Q1 2013 Earnings Overview
Q1 2013 Earnings Overview Earnings Per Share (diluted) Q1 2013 EPS of $0.03 reflects • Challenging coal price environment $0.24 • Accelerated depreciation expense at Indiana Harbor • ($0.10) EPS impact related to debt $0.03 issuance costs and unfavorable tax items Q1 2012 Q1 2013 • Income attributab
Slide 6: Q1 2013 Financial Results
Q1 2013 Financial Results Q1'13 Revenues lower by 5.7% vs. ($ in millions) Q1'13 Q1'12 Q1'12 • Reflects impact of lower coal prices in Domestic Coke Sales Volumes 1,058 1,078 (20) coke and coal segments Coal Sales Volumes 373 373 - Adjusted EBITDA down 5.8% • Coke business performed well, led by Rev
Slide 7: Adjusted EBITDA Bridge – Q1 '12 to Q1 '13
Adjusted EBITDA(1) Bridge – Q1 ‘12 to Q1 ‘13 Weak coal mining segment results partially offset by improved coke operations driven by Middletown ($ in millions) •Net improvement of $1.2M • $4.8M better cost recovery • Favorable comparison to 1Q12’s ($4.0M) of start-up costs and yield performance (1)
Slide 8: Diluted EPS Bridge – Q1 '12 to Q1 '13
Diluted EPS Bridge – Q1 ‘12 to Q1 ‘13 EPS impacted by higher depreciation costs due to Indiana Harbor refurbishment and approximately ($0.10) of non-recurring items ($0.02) Reflects ($0.05) impact ($0.02) of unfavorable tax items ($0.06) $0.24 ($0.05) $0.01 ($0.07) $0.03 Q1 2012 EPS EBITDA Depreciat
Slide 9: SXC Liquidity Position
SXC Liquidity Position Ended quarter with strong cash position and virtually undrawn revolver even after making ~$68 million VISA SunCoke JV investment ($ in millions) Includes: • Accts Receivable: ($27.0M)(1) • Inventories: $18.9M • Accts Payable: $19.0M ($225.0) • Accrued Liabilities: ($21.4M)(2)
Slide 10: Domestic Coke Business Summary
Domestic Coke Business Summary Overall cokemaking business performed well, delivering Adjusted EBITDA per ton of $58 in first quarter Domestic Coke Production Domestic Coke Adjusted EBITDA(1) Per Ton (Tons in thousands) ($ in millions, except per ton amounts) (1) For a definition of Adjusted EBITDA
Slide 11: Coal Mining Financial Summary
Coal Mining Financial Summary Coal Mining Adjusted EBITDA(1) and Avg. Sales Q1 2013 Adjusted EBITDA down Price/Ton(2) ($ in millions, except per ton amounts) $12 million from Q1 2012 • Driven by $50 decline in average sales price • Sales volume flat Delivered significant improvement in per ton cash
Slide 12: SunCoke Energy Partners, LP Results
SUNCOKE ENERGY PARTNERS, LP RESULTS
Slide 13: SXCP Q1 2013 Financial Results
SXCP Q1 2013 Financial Results Sustained solid results at Middletown and Haverhill provide a strong platform for future growth Q1'13 Q1'12 Q1'13 vs Q1'12 ($ in millions except where noted) Actual Actual Change Coke Production (in '000s of tons) 442 428 14 Coke Sales Volumes (in '000s of tons) 448 42
Slide 14: SXCP Liquidity Position
SXCP Liquidity Position A solid cash balance and undrawn $100 million revolver provide SXCP the flexibility to seize potential new growth opportunities SXCP IPO transaction • Ongoing CapEx: ($1.2M) • Pre-funded Reserved for environmental environmental remediation: remediation ($4.5M) Includes settle
Slide 15: SXCP Updated 2013 Outlook
SXCP Updated 2013 Outlook Based on solid operating performance and outlook, we have increased our Adjusted EBITDA and cash distribution coverage expectations for 2013 Prospectus Revised 2013 Outlook ($ and units in millions, except per unit data) 2013 Forecast High Low Adjusted EBITDA attributable t
Slide 16: SXCP Distribution Growth Outlook
SXCP Distribution Growth Outlook • Declared initial quarterly cash distribution of $0.3071 – Reflects proration of the $0.4125 minimum quarterly distribution rate for the January 24, 2013 closing of the IPO • Given confidence in current outlook, expect to increase quarterly cash distribution rate –
Slide 17: 2013 Outlook & Priorities
2013 OUTLOOK & PRIORITIES SunCoke Energy™ xC
Slide 18: SXC: 2013 Guidance Summary
SXC: 2013 Guidance Summary Revised Guidance: 2013 Metric Post SXCP IPO Adjusted EBITDA (1) Consolidated $205 – $230 million Attributable to SXC Shareholders $165 – $190 million EPS Attributable to SXC Shareholders $0.30 – $0.55 (diluted) Cash Flow from Operations ~$140 million(3) Capital Expenditure
Slide 19: 2013 Priorities
2013 Priorities Grow The Coke Strategically Optimize Operational Excellence Business Assets • Sustain momentum at coke • Domestic • SXCP facilities •Obtain permit for next •Achieve smooth launch, potential U.S. facility governance and operation • Execute Indiana Harbor Plan •Identify and pursue of S
Slide 20: North America M&A Growth Strategy
North America M&A Growth Strategy Opportunistic First priority for core Evaluation for future acquisitions of business value chain expansion adjacent assets Coal Handling/ Cokemaking Iron Ore Processing Processing FOCUS FOCUS FOCUS Acquisition of existing Selective acquisition of met coal Investment
Slide 21: Questions
QUESTIONS SunCoke Energy™ xC
Slide 22: Investor Relations
Investor Relations: 630-824-1907 www.suncoke.com
Slide 23: Appendix
APPENDIX SunCoke Energy™ xC
Slide 24: Definitions
Definitions • Adjusted EBITDA represents earnings before interest, taxes, depreciation, depletion and amortization (“EBITDA”) adjusted for sales discounts and the interest, taxes, depreciation, depletion and amortization attributable to equity earnings in our unconsolidated affiliates. EBITDA reflec
Slide 25: Definitions
Definitions • Distributable Cash Flow equals Adjusted EBITDA less net cash paid for interest expense, on-going capital expenditures, accruals for replacement capital expenditures, and cash distributions to noncontrolling interests. Distributable Cash Flow is a non-GAAP supplemental financial measure
Slide 26: Reconciliations
Reconciliations Reconciliations from Net Income to Adjusted EBITDA $ in millions Q1 2013 FY 2012 Q4 2012 Q3 2012 Q2 2012 Q1 2012 FY 2011 Q4 2011 Q3 2011 Q2 2011 Q1 2011 Net Income 6.4 102.5 29.0 32.9 24.0 16.6 58.9 7.5 21.6 24.1 5.7 Subtract: Depreciation, depletion and amortization (23.9) (80.8) (2
Slide 27: Reconciliations
Reconciliations Reconciliations of Segment Adjusted EBITDA and Adjusted EBITDA Per Ton Domestic International Jewell $ in millions, except per ton data Coke Coke Coal Corporate Combined Q1 2013 Adjusted EBITDA 61.1 1.6 (4.6) (5.8) 52.3 Sales Volume (thousands of tons) 1,058 216 373 Adjusted EBITDA p
Slide 28: SXC – Expected 2013E EBITDA Reconciliation
SXC – Expected 2013E EBITDA Reconciliation 2013E Net Income to Adjusted EBITDA Reconciliation - SXC 2013E 2013E (in millions) Low High Net Income $40 $57 Depreciation, Depletion and Amortization 97 95 Total financing costs, net 55 55 Income tax expense 7 14 EBITDA $199 $221 Sales discounts 6 6 Adjus
Slide 29: SXCP – Expected 2013E EBITDA Reconciliation
SXCP – Expected 2013E EBITDA Reconciliation 2013E Net Income to Adjusted EBITDA Reconciliation - SXCP 2013E 2013E (in millions) Low High Net Income $ 79.2 $ 89.9 Depreciation, Depletion and Amortization 32.0 31.0 Total financing costs, net 17.0 15.0 Income tax expense 4.7 4.7 EBITDA $ 132.9 $ 140.6
Slide 30: 2013E Capital Expenditures and Investments
2013E Capital Expenditures and Investments For Year Ended December 31, 2013 • SXC includes approximately ($ in millions) SXC SXCP Consolidated $25m coke and $24m coal On-Going Approx. $49 $9 $58 • SXCP includes 65% of $14m Environmental expected at Haverhill and Approx. - $15 $15 Remediation Middlet
Slide 31: SXCP – Adjusted EBITDA and Distributable Cash Flow Reconciliations
SXCP – Adjusted EBITDA and Distributable Cash Flow Reconciliations Proforma for period 1/1/2013 - Proforma ($ in Millions) Q1'13 1/23/2013 Q1'13 (1) Net cash (used in) provided by operating activities $ 5.7 $ (0.2) $ 5.5 Depreciation (7.6) (7.6) Changes in working capital and other 25.8 25.8 Net inc