Suncoke Energy, Inc. · NYSE:SXC
Suncoke Energy — Goldman Sachs Global Steel Conference 2011
23 slides from Suncoke Energy's conference presentation, Nov 29, 2011
Slide 1: SunCoke Energy November 2011
ce SunCoke Energy November 2011
Slide 2: Safe Harbor Statement
Safe Harbor Statement Some of the information included in this presentation contains “forward-looking statements” (as defined in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended). Such forward-looking statements are based on man
Slide 3: SunCoke Introduction
SunCoke Introduction Pro Forma 2011 • Largest independent producer of Adjusted EBITDA (1) Estimate metallurgical coke in Americas with (excluding Corporate Segment) nearly 50 years experience Int'l Coke Coal 8% Mining 12% • ~85% of Adjusted EBITDA generated (1) Jewell by cokemaking business Coke 28%
Slide 4: SunCoke Introduction (Cont'd)
SunCoke Introduction (Cont’d) SunCoke • 5.9 million tons of capacity with Cokemaking Capacity new Middletown, Ohio facility (Tons in thousands) • Six cokemaking facilities; five in 7,000 U.S. and one in Brazil 6,000 • More than doubled capacity 5,000 since 2005 4,000 • Proven ability to permit, deve
Slide 5: SunCoke's Heat Recovery Oven vs. By-Product Oven
SunCoke’s Heat Recovery Oven vs. By-Product Oven SunCoke’s technology isthe industry’senvironmentalstandardandprovidesmanyadvantages overthe traditional cokemaking process SunCoke Heat Recovery Traditional By-Product Pressurization Negative pressure Positive pressure Potential for emission of hazard
Slide 6: SunCoke's Contract Proposition
SunCoke’s Contract Proposition Deliver Coke to customers through a competitive turnkey solution, which produces a consistent stream of earnings Typical Key Coke Sales Agreement What SunCoke Offers Provisions Capital Funding and Ownership Take-Or-Pay Fixed Fee Permits and Approvals (Profit and Return
Slide 7: SunCoke's Value Proposition
SunCoke’s Value Proposition High Quality & • Provide an assured supply of coke to steelmakers Reliable Coke • Larger, stronger coke Supply Turndown • Demonstrated sustained 30% turndown; higher turndown Flexibility on temporary basis • High quality coke with cheaper coal blends Coal Flexibility - Bu
Slide 8: Focused Growth Strategy
Focused Growth Strategy Growth Initiatives Continue to grow our U.S. and Canada cokemaking businesses; reserving portion of future coke capacity for market sales We believe SunCoke Energy is uniquely Grow international footprint in key growth markets with positioned for immediate focus on India cont
Slide 9: SunCoke's U.S. and Canada Industry Position
SunCoke's U.S. and Canada Industry Position SunCoke believes it has the opportunity to displace higher cost coke imports . . . Chinese Coke Price vs. Representative SunCoke Price North American Coke Imports (US$/ton) (Tons in millions) SunCoke Chinese $700 Q3 2011 Average: $399 $440 2010 Average: $3
Slide 10: SunCoke's U.S. & Canada Market Position
SunCoke’s U.S. & Canada Market Position . . . and replace aging coke batteries operated by integrated steel producers Aging Cokemaking Facilities 2010 U.S. & Canada Coke Supply Average Age %of U.S. & Canada coke production SunCoke 41 18% DTE 28% 28% 5% Other Integrated Merchant & Steel Foundry 7% Pr
Slide 11: SunCoke's U.S. and Canada Industry Position
SunCoke's U.S. and Canada Industry Position BF/BOF Crude Steel Production Market Opportunity and Blast Furnace Coke Demand 5 million tons 60 In million tons 51 50 48 Demand growth with market recovery 40 40 27 30 2010 Coke Rate: 2015E Coke Rate: 894 lbs/thm 800 lbs/thm 20 Aging battery 22 20 3 19 18
Slide 12: India – Macro Outlook
India –Macro Outlook Significant ExpectedGDPGrowth Population growth • 1.2 billion people today • Projected 1.5 billion by 2030 • Growth equal to the entire US population Urbanization • Less than 50% urban population • Vehicle production 3.6 MM (’11) vs. 13 MM in NAFTA Source: Census.gov, United Sta
Slide 13: India Opportunity for SunCoke
India Opportunity for SunCoke GROWING STEEL MARKET • Projected to be 3rd largest steel market by 2020 • Blast furnace to play a critical role in growth COKE SUPPLY DEFICIT • Importing between 2 and 5 million tons annually Strong market India • Coke capacity investment lags steel investment fundament
Slide 14: Coal Expansion
Coal Expansion Current Operations Planned Growth 2012 Coal Production 106 million tons of proven Near term focus on increasing and probable reserves productivity at existing mines; 1.15 million tons Underground will defer opening new mines expected production from Jewell Mining Reserve life of 50+ y
Slide 15: 2011 Summary
2011 Summary • Continued sequential quarterly operational and financial improvements, generatingfullyearestimated2011AdjustedEBITDAof $150- $160million • Coke earnings growth on track with Indiana Harbor operating improvements and increased ownership interest plus Middletown start-up • Took first st
Slide 16: 2012 Priorities
2012 Priorities • Execute the start up of Middletown; expect to reach full production levels no later than July 2012 • Achieve targeted coke production volumes of 4.0 to 4.2 million tons through ongoing focus on operational excellence, including safety and environmental stewardship, at all facilitie
Slide 17: Coal Expansion
Coal Expansion Coal prices offer attractive growth and return on capital in our coal mining business SunCoke’s Mid-Vol. Coal 2012 MV(2) HV Thermal Total Contract Prices Estimates Sales Tons(1) 1,550k 150k 150k 1,850k $170 -$190 $165 % Committed 82% 27% 40% 74% $130 Price of Committed $176 $130 $81 $
Slide 18: 2012 Adjusted EBITDA Outlook
2012 Adjusted EBITDA (1) Outlook Estimated2012 AdjustedEBITDA(1) projected to increaseby$100 millionto $120millionversusprojected2011; expect80%- 85% of 2012AdjustedEBITDA (1, 2) willbegeneratedbycokemakingbusiness ($ in millions) $25 -$40 $0 - $5 $70 -$80 $250 -$280 $150 -$160 2011E Coke Coal Minin
Slide 19: 2012 Outlook Summary
2012 Outlook Summary Metric Expected 2012 Outlook Adjusted EBITDA $250 million –$280 million Capital Expenditures Approximately $150 million & Investments Free Cash Flow $50 million + Effective Tax Rate 20% –24% Corporate Costs $30 million -$35 million Coke Production 4.0 -4.2 million tons Coal Prod
Slide 20: SunCoke Summary
SunCoke Summary 2011 Key Growth 2012 Outlook Transition Year Outlook • Settled ArcelorMittal • Recognizes current • Continue to explore disputes in January cautious U.S. industry opportunities in China environment and Brasil • Built management team and went public • SXC believes it will • U.S. conti
Slide 21: Appendix
Appendix Goldman Sachs Global Steel Conference 20
Slide 22: Definitions
Definitions • Adjusted EBITDA represents earnings before interest, taxes, depreciation, depletion and amortization (“EBITDA”) adjusted for sales discounts and the deduction of income attributable to non-controlling interests in our Indiana Harbor cokemaking operations. EBITDA reflects sales discount
Slide 23: Media releases and SEC filings are available on our website
Media releases and SEC filings are available on our website at www.suncoke.com Contact Investor Relations for more information: 630-824-1907 Goldman Sachs Global Steel Conference 22
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