Chemtrade Logistics Income Fund · TSX:CHE.UN
Chemtrade Logistics Income Fund — Investor Presentation (May 2021)
27 slides from Chemtrade Logistics Income Fund's investor presentation, May 2021
Slide 1: Business Update | May 2021
20 21 BUSINESS UPDATE | MAY 2021 1
Slide 2: Caution Regarding Forward-Looking Statements
Certain statements contained in this presentation constitute forward-looking statements within the meaning of certain securities laws, including the Securities Act (Ontario). Forward- looking statements can be generally identified by the use of words such as “anticipate”, “continue”, “estimate”, “ex
Slide 3: Blueprint for Success
Blueprint for Success Growth Increased size, scale & diversity of earnings. Acquisitions & organic growth. Financial Prudence Business Maintain financial Model flexibility & balance Mitigates Commodity sheet strength with Risks sound capital management Operational Excellence Sustainable earnings thr
Slide 4: Blueprint for Success: Business Model
Blueprint for Success Business Model Growth Increased size, scale & diversity of earnings. Acquisitions & organic growth. Financial Prudence Business Maintain financial Model flexibility & balance Mitigates Commodity sheet strength with Risks sound capital management Operational Excellence Sustainab
Slide 5: Business Model Fit
Business Model Fit Sulphur Products & Performance Chemicals (SPPC) Electrochemicals (EC) Approximately 60% Three sources of of revenue based on earnings: risk-shared contracts NA sodium chlorate NA chlor-alkali SA sodium chlorate & chlor-alkali Water Solutions & Specialty Chemicals (WSSC) Wide diver
Slide 6: Blueprint for Success: Financial Prudence
Blueprint for Success Financial Prudence Growth Increased size, scale & diversity of earnings. Acquisitions & organic growth. Financial Prudence Business Maintain financial Model flexibility & balance Mitigates Commodity sheet strength with Risks sound capital management Operational Excellence Susta
Slide 7: 2020 Results
2020 Results C$ MILLIONS Adjusted EBITDA 265.3 EBITDA Maintenance Capex 74.4 Lease Expense 56.0 102.5 115.9 Cash Interest 68.6 Cash Taxes 7.3 124.9 Distributable Cash 59.0 DCPU $0.64 EC SPPC WSSC 75
Slide 8: 2020 Results
2020 Results SPPC 2020 EBITDA was $35.8 million lower than 2019: Regen affected by travel restrictions and reduced driven miles (resulting from COVID-19 Pandemic) Merchant acid affected by lower economic activity EC 2020 EBITDA was $55.5 million lower than 2019: NE Asia caustic remained lo
Slide 9: Q1 2021 Results
Q1 2021 Results C$ MILLIONS Adjusted EBITDA 55.4 EBITDA Maintenance Capex 8.2 Lease Expense 13.0 21.8 27.2 Cash Interest 16.8 Cash Taxes (0.5) 28.0 Distributable Cash 17.9 DCPU $0.19 EC SPPC WSSC 95
Slide 10: Q1 2021 Results
Q1 2021 Results SPPC Q1 2021 EBITDA was $6.7 million lower than Q1 2020: Regen continued to be affected by travel restrictions and reduced driven miles (resulting from COVID-19 Pandemic) Ultrapure acid short-term headwinds with lost volume Merchant acid continued to be affected by lower econ
Slide 11: 2021 Guidance Key Assumptions | EC
2021 Guidance Key Assumptions | EC 2021 2020 Key Assumptions – Electrochemicals (EC) Segment Assumption Actuals Approximate North American MECU production volume ~190K ~140K 2021 average IHS NE Asia Caustic price index being lower per US$20 N/A tonne than the 2020 average; and North American product
Slide 12: 2021 Guidance
2021 Guidance Maintenance Capex - $75-$80 million Lease Expense - $55-$60 million Cash Interest - $70-$75 million Cash Taxes - $5-$10 million 12 12
Slide 13: Long Term Strategy
Long Term Strategy Growth Increased size, scale & diversity of earnings. Acquisitions & organic growth. Financial Prudence Business Maintain financial Model flexibility & balance Mitigates Commodity sheet strength with Risks sound capital management Operational Excellence Sustainable earnings throug
Slide 14: Long Term Strategy
Long Term Strategy Chemtrade’s Long Term Strategy is to deliver sustained earnings growth and reward investors. This will be accomplished by three primary factors: Market / COVID-19 Recovery Organic Growth – for next 2-3 years Operational Efficiencies - Productivity and Reliability Resulti
Slide 15: Market | COVID-19 Recovery: Caustic Soda
Market | COVID-19 Recovery Caustic Soda Caustic Soda: The ‘trough’ is behind us and market fundamentals improving Forecast Market analysts are bullish mid to long term Demand continues to grow, minimal new supply: Aluminum Lithium Ion Batteries Expect Taiwan contract prices to rise, AND
Slide 16: Market | COVID-19 Recovery: Regen Acid
Market | COVID-19 Recovery Regen Acid Regen Acid: Expect recovery in refinery utilization rates as travel restrictions are lifted and miles driven increases across the US and Canada US weekly ‘miles driven’ has been steadily increasing since February 2021 Refining rates should pick up in 2021
Slide 17: Market | COVID-19 Recovery: HCl and Chlorine
Market | COVID-19 Recovery HCl and Chlorine HCl Demand and pricing should improve Long Term Market Demand from extremely weak in 2020 as oil recovers and additional fracking 2018: Oil WTI: $65/bbl activity picks up – particularly Western US & Can Rigs: 1,200 Canada Chlorine 2020: Oil WTI: $39/bbl
Slide 18: Blueprint for Success: Growth
Blueprint for Success Growth Growth Increased size, scale & diversity of earnings. Acquisitions & organic growth. Financial Prudence Business Maintain financial Model flexibility & balance Mitigates Commodity sheet strength with Risks sound capital management Operational Excellence Sustainable earni
Slide 19: Organic Growth | Ultrapure
Organic Growth | Ultrapure Increased Semiconductor demand driven by consumer electronics, IoT, and greater Global Semiconductor Market digitalization of autos Investments are happening in the US - TSMC, Samsung, & Intel. Biden Administration investing $50 Billion for chip production in the U.S.
Slide 20: Organic Growth | Water
Organic Growth | Water Alum demand is flat / stable PAC/ACH demand is >5%/year Water Coagulant Market Demand Increasing regulations support greater market demand for coagulants across Municipal Drinking Water: 1-2% pa North America Margins should remain stable (short-term Waste Water: 4-5% p
Slide 21: Organic Growth | Hydrogen
Organic Growth | Hydrogen Our Sodium Chlorate and to a lesser extent, Chlor-alkali manufacturing process generates hydrogen Our plants use hydro-electric power – so we generate ‘Green Hydrogen’ Announced a deal for one of our small Chlorate Plants in Prince George, BC – limited returns for fir
Slide 22: Blueprint for Success: Operational Excellence
Blueprint for Success Operational Excellence Growth Increased size, scale & diversity of earnings. Acquisitions & organic growth. Financial Prudence Business Maintain financial Model flexibility & balance Mitigates Commodity sheet strength with Risks sound capital management Operational Excellence S
Slide 23: Operational Efficiencies: Productivity and Reliability
Operational Efficiencies Productivity and Reliability Launched both Productivity and Reliability initiatives in 2020 Targeting to achieve ~ $10 M in savings each year which will help to offset annual inflation Black and Green Belts leading projects using Lean Six Sigma Tools Implemented real
Slide 24: ESG | Approach
ESG | Approach Approach and disclosure aligned to the four pillars of the Task Force on Climate Related Financial Disclosures (TCFD): Governance (Board and Management) Strategy Risk Management Metrics and Targets We reviewed the Sustainability Accounting Standards Board’s (SASB) metrics for
Slide 25: ESG | Tracking Systems
ESG | Tracking Systems We are developing company-wide tracking systems in 2021. Targets will be set and integrated into long-term strategic plans for the following: Environmental: Greenhouse gas (GHG) and other air emissions Industrial and hazardous waste management Energy management Soc
Slide 26: ESG | Highlights
ESG | Highlights In 2020, 96% of the electricity used at our 17 largest facilities was generated from renewable hydroelectric sources. Sale of hydrogen to Hydra Energy will reduce carbon dioxide equivalent (CO2e) emissions by 10% of our total CO2 emissions (equivalent to the emissions from North
Slide 27: Conclusion
Conclusion Earnings Growth Driven by: Market / COVID-19 Recovery Organic growth Ultrapure acid Water Hydrogen Productivity and Reliability And, be a leading example for Corporate ESG Responsibility Conclusion 15 27
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