Quaker Houghton · NYSE:KWR
Quaker Houghton — Quaker Chemical — Q2 2022 Earnings Presentation
21 slides from Quaker Houghton's earnings presentation, Aug 4, 2022
Slide 1: Quaker Houghton Second Quarter 2022 Results Investor Conference Call
Quaker Houghton Second Quarter 2022 Results Investor Conference Call
Slide 2: Regulation G and Forward-Looking Statements
Regulation G The attached charts include Company information that does not conform to generally accepted accounting principles (“GAAP”). Man agement believes that an analysis of this data is meaningful to investors because it provides insight with respect to ongoing operating results of the Company
Slide 3: Non-GAAP financial information
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 share, and pro forma net
Slide 4: Speakers
Andy Tometich Chief Executive Officer & President Shane W. Hostetter Senior 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 Senior Director, Investor Relations
Slide 5: Highlights
©2020 Quaker Houghton. All Rights Reserved 5 Highlights » Delivered Q2’22 results in line with expectations ▪ Strong sales growth driven by double - digit price increases ▪ Delivered stable gross margins compared to Q1’22 despite persistent cost inflation ▪ Demand remained resilient despite macro he
Slide 6: Financial Snapshot
©2020 Quaker Houghton. All Rights Reserved 6 Financial Snapshot (dollars in millions, per share amounts) Q2 2022 Q2 2021 Q1 2022 FY 2022 FY 2021 GAAP Net sales $ 492.4 $ 435.3 $ 57.1 13% $ 474.2 $ 18.2 4% $ 966.6 $ 865.0 $ 101.5 12% Gross profit 149.6 154.5 (4.9) (3%) 146.1 3.5 2% 295.6 310.6 (15.0)
Slide 7: Total Company Volume Trend
Modestly lower volumes in Q2’22 compared to Q2’21 primarily reflect previously divested business related to the Combination, COVID - 19 disruptions in China, and the impact of geopolitical events, especially in Europe, partially offset by net new business wins Total Company Volume Trend (k ilograms,
Slide 8: Adjusted EBITDA
©2020 Quaker Houghton. All Rights Reserved 8 Adjusted EBITDA (dollars in millions) Strong price realization and cost management in Q2’22 was primarily offset by significant and persistent inflationary pressur es impacting gross margins and the unfavorable impact of F/X (1) Periods presented prior to
Slide 9: Leverage and Liquidity Update
▪ Total debt of $989 million and cash of $202 million resulted in net debt of $787 million ▪ Leverage of 3.2x as of June 30, 2022 1 ▪ Increase is primarily attributable to the comparison to a strong 1H’21 which generated a higher adjusted EBITDA ▪ Operating well within bank covenants ▪ Bank leverage
Slide 10: Appendix Actual and Non-GAAP Results
Appendix Actual and Non - GAAP Results
Slide 11: Non-GAAP Operating Income Reconciliation
©2020 Quaker Houghton. All Rights Reserved 11 Non - GAAP Operating Income Reconciliation (dollars in thousands, unless otherwise noted) Q2 2022 Q2 2021 FY 2022 FY 2021 Operating income 31,903$ 38,816$ 61,306$ 83,710$ Combination, restructuring and other acquisition-related expenses 1,831 7,082 6,704
Slide 12: Adjusted EBITDA & Non-GAAP Net Income Reconciliation
©2020 Quaker Houghton. All Rights Reserved 12 Adjusted EBITDA & Non - GAAP Net Income Reconciliation (dollars in thousands, unless otherwise noted) Q2 2022 Q2 2021 FY 2022 FY 2021 Net income attributable to Quaker Chemical Corporation 14,343$ 33,570$ 34,159$ 72,185$ Depreciation and amortization 20,
Slide 13: Adjusted EBITDA Reconciliation
©2020 Quaker Houghton. All Rights Reserved 13 Adjusted EBITDA Reconciliation (dollars in thousands) FY 2020 FY 2021 Net income attributable to Quaker Chemical Corporation 39,658$ 121,369$ Depreciation and amortization 84,494 87,728 Interest expense, net 26,603 22,326 Taxes on income before equity in
Slide 14: Adjusted EBITDA Reconciliation Trailing Twelve Months Q2 2022
©2020 Quaker Houghton. All Rights Reserved 14 Adjusted EBITDA Reconciliation Trailing Twelve Months Q2 2022 (dollars in thousands) A B C = B - A D E = C + D YTD Q2 2021 Full Year 2021 Last six Months 2021 YTD Q2 2022 TTM Q2 2022 Net income attributable to Quaker Chemical Corporation 72,185$ 121,369$
Slide 15: Non-GAAP EPS Reconciliation
©2020 Quaker Houghton. All Rights Reserved 15 Non - GAAP EPS Reconciliation Q2 2022 Q2 2021 FY 2022 FY 2021 GAAP earnings per diluted share attributable to Quaker Chemical Corporation common shareholders Equity loss (income) in a captive insurance company per diluted share 0.10 (0.05) 0.11 (0.22) Co
Slide 16: Segment Performance
©2020 Quaker Houghton. All Rights Reserved 16 Segment Performance (dollars in thousands) Q2 2022 Q2 2021 FY 2022 FY 2021 Net sales Americas 172,747$ 139,673$ 326,891$ 274,544$ EMEA 123,053 123,436 248,740 243,250 Asia/Pacific 99,828 91,559 204,062 188,265 Global Specialty Businesses 96,760 80,594 18
Slide 17: Quaker Houghton. Forward Together
& Quaker Veg Houghton. Forward Together
Slide 18: Full Year 2019 Pro Forma Reconciliation
©2020 Quaker Houghton. All Rights Reserved 18 Full Year 2019 Pro Forma Reconciliation (dollars in millions) 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
Slide 19: Full Year 2018 Pro Forma Reconciliation
19 ©2020 Quaker Houghton. All Rights Reserved Full Year 2018 Pro Forma Reconciliation (dollars in millions) Quaker Houghton Divestitures Other (a) Pro Forma* Net sales 868$ 861$ (53)$ (22)$ 1,655$ Net Income (Loss) Attributable to Quaker Houghton 59$ (0)$ (9)$ 17$ 66$ Depreciation and Amortization 2
Slide 20: Full Year 2017 Pro Forma Reconciliation
20 ©2020 Quaker Houghton. All Rights Reserved Full Year 2017 Pro Forma Reconciliation (dollars in millions) 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 5
Slide 21: Full Year 2016 Pro Forma Reconciliation
21 ©2020 Quaker Houghton. All Rights Reserved Full Year 2016 Pro Forma Reconciliation (dollars in millions) 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