Koppers Holdings Inc. · NYSE:KOP
Koppers — Q4 2020 Earnings Presentation
31 slides from Koppers's earnings presentation, Feb 26, 2021
Slide 1: Fourth Quarter and Full Year 2020 Results
Fourth Quarter and Full Year 2020 Results February 24, 2021 Architects of Continuity™
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements This presentation, and other statements that Vertiv Holdings Co. (“Company”) may make in connection therewith, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. This includes, without l
Slide 3: Fourth quarter 2020 key messages
Fourth quarter 2020 key messages Demand remains strong with fourth quarter 2020 net sales up 11.4% and orders up 9.0% from 2019 Fourth quarter adjusted EBITDA of $187M up 25.7% and adjusted EBITDA margin up 160 bps from 2019 Fourth quarter free cash flow improves $86M to $175M driven by higher earni
Slide 4: Market environment
Market environment Vertiv SEGMENT Sales AMERICAS APAC EMEA Exposure1 Oct-20 Jan-21 Oct-20 Jan-21 Oct-20 Jan-21 CLOUD / HYPERSCALE ~20% COLOCATION ENTERPRISE / ~50% SMALL & MEDIUM BUSINESS COMMUNICATION NETWORKS ~20% COMMERCIAL & INDUSTRIAL ~10% Note: 1Sales Revenue FY2020 estimated by customer segme
Slide 5: Demand and supply update
Demand and supply update CUSTOMER DEMAND PRODUCTION & SUPPLY CHAIN • Overall market demand remains robust. Fourth • COVID and weather issues having slight impact on quarter orders up 9.0%. operations • Continued strength in cloud and colocation markets ➢ Eastern Europe continues to see increasing ca
Slide 6: Fourth quarter 2020 financial results
Fourth quarter 2020 financial results $Millions Net Sales Adjusted EBITDA Adjusted EBITDA Margin Free Cash Flow Up 11.4% Up 25.7% Up 160 bp Up $86M Organic +9.5% 1,306 187 14.3% 175 1,172 12.7% 149 89 4Q 2019 4Q 2020 4Q 2019 4Q 2020 4Q 2019 4Q 2020 4Q 2019 4Q 2020 + $45M favorable volume impact + Lo
Slide 7: Fourth quarter 2020 segment results
Fourth quarter 2020 segment results $Millions Americas ➢ Sales up slightly with higher telecom offset by lower Net Sales services sales due to site access challenges ➢ Contribution margin improvements and fixed cost savings Up 0.6% Up 18.8% Up 24.6% drive higher adjusted EBITDA margins Organic +1.7%
Slide 8: Fourth quarter 2020 free cash flow & liquidity
Fourth quarter 2020 free cash flow & liquidity $Millions • Strong liquidity of $964M at year end ➢ 2.8x net leverage (15) 1 175 29 • Announced redemption of 23.0M public warrants 33 in December 2020 ➢ Received proceeds of $157M in December on issuance of 13.6M shares 38 ➢ Received additional proceed
Slide 9: Full year 2020 financial results
Full year 2020 financial results $Millions Net Sales Adjusted EBITDA Adjusted EBITDA Margin Free Cash Flow Down (1.4%) Up 7.3% Up 110 bp Up $171M Organic (0.9%) 163 4,431 581 4,371 13.3% 542 12.2% (8) FY 2019 FY 2020 FY 2019 FY 2020 FY 2019 FY 2020 FY 2019 FY 2020 + Lower interest payments ($104M) −
Slide 10: Change in primary operating metric for 2021 and forward
Change in primary operating metric for 2021 and forward $Millions • Transitioning primary operating metric from adjusted EBITDA to adjusted operating profit • Adjusted operating profit = operating profit less intangible amortization expense – for all periods • Differences between historical adjusted
Slide 11: Change in income statement presentation for 2021
Change in income statement presentation for 2021 $Millions • Including components of “Other deductions, net” directly on face of income statement • Adding GAAP measure of “Operating profit” on face of income statement • Including reformatted 2018 – 2020 (on quarterly basis) in earnings release 8-K –
Slide 12: Full year 2021 financial guidance
Full year 2021 financial guidance Guidance What we expect in full year 2021 • Expecting upper single digit organic net sales growth in APAC and mid-to-upper single digit growth in AMER and EMEA Adjusted Net sales • Strong 68% growth in adjusted operating profit from 2020 (at operating profit the mid
Slide 13: Adjusted operating profit bridge: 2020 to 2021
Adjusted operating profit bridge: 2020 to 2021 $Millions – 2021 at mid-point of guidance range +68% +26% 20 40 (65) (40) 4 575 160 21 456 92 342 Operating margin % 7.8% 10.4% 12.0% FY 2020 Restructuring SPAC FY 2020 Volume Contribution Net restruct. Growth and 2020 Other FY 2021 adjusted reserve and
Slide 14: Free cash flow bridge: 2020 to 2021
Free cash flow bridge: 2020 to 2021 $Millions • Projected cash interest of $82M in 2021 is $85M lower than 2020 driven 20 by debt paydown from SPAC (40) transaction and subsequent refinancing 85 (49) 12 285 • Projected $55M cash outflow from (25) trade working capital in 2021 is $20M lower than 2020
Slide 15: First quarter 2021 financial guidance
First quarter 2021 financial guidance Guidance What we expect in first quarter 2021 • Expecting double-digit organic net sales growth in APAC and mid single-digit growth EMEA. AMER expected to be flat. Adjusted Net sales • Adjusted operating profit up $55M at midpoint driven by higher operating prof
Slide 16: Update on key initiatives
Update on key initiatives Top Line Focus ➢ Increased customer intimacy with the cloud and colocation providers…led to fantastic order growth ➢ Revamped America’s channel GTM efforts… increased momentum as the year went on Vertiv Operating System (VOS) ➢ Implemented in areas of 2 pilot plants with en
Slide 17: Fourth quarter 2020 key messages
Fourth quarter 2020 key messages Demand remains strong with fourth quarter 2020 net sales up 11.4% and orders up 9.0% from 2019 Fourth quarter adjusted EBITDA of $187M up 25.7% and adjusted EBITDA margin up 160 bps from 2019 Fourth quarter free cash flow improves $86M to $175M driven by higher earni
Slide 18: 2019 and 2020 non-GAAP financial reconciliations
2019 and 2020 non-GAAP financial reconciliations
Slide 19: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation from Net income (loss) to EBITDA and adjusted EBITDA ($M | 12/31) 4Q20 4Q19 FY20 FY19 COMMENTARY Net income (loss) $74.9 $(33.9) $(183.6) $(140.8) a) Represents costs incurred in the refinancing and pay down of the Company’s long-term debt. Includes $99.0M
Slide 20: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of segment EBIT to adjusted EBITDA by region (A) Earnings From Continuing Operations Before Interest and Taxes (C) EBITDA Adjustments ($M | 12/31) 4Q20 4Q19 FY20 FY19 ($M | 12/31) 4Q20 4Q19 FY20 FY19 Americas $118.7 $90.0 $396.8 $358.1 Americas $2.5 $27.8 $
Slide 21: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Organic Net Sales and Free Cash Flow Reconciliation of Net Sales to Organic Net Sales ($M | 12/31) 4Q20 4Q19 % Organic % FY20 FY19 % Organic % Americas $557.2 $553.7 0.6% 1.7% $2,040.6 $2,229.1 (8.5%) (7.2%) APAC 442.0 371.9 18.8% 14.8% 1,368.4 1,278.0 7
Slide 22: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of GAAP Financial Performance to Non-GAAP Adjusted: Full Year 2020 Gross margin Loss on Debt & Other Interest Income tax Net earnings Diluted ($M, except EPS | FULL YEAR 2020) Net Sales less SG&A deductions, net expense, net expense (loss) EPS(1) EBITDA(2)
Slide 23: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of GAAP Financial Performance to Non-GAAP Adjusted: Full Year 2020 (Continued) (1) GAAP Diluted EPS based on 307.1 million shares. Non-GAAP Adjusted EPS based on pro forma share count of 362.0 million diluted shares (includes shares outstanding of 330.3 mil
Slide 24: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of GAAP Financial Performance to Non-GAAP Adjusted: Fourth Quarter Gross margin Interest Income tax Net earnings Diluted ($M, except EPS | 4th QUARTER 2020) Net Sales less SG&A Other deductions, net expense, net expense (loss) EPS(1) EBITDA(2) GAAP $1,305.5
Slide 25: Go-forward financial metric reconciliation to historical presentation
Go-forward financial metric reconciliation to historical presentation
Slide 26: Reconciliation of go-forward financial metrics to historical presentation
Reconciliation of go-forward financial metrics to historical presentation Full Year and First Quarter 2020 Adjusted Adjusted net Pro-forma operating earnings share Adjusted ($M, except EPS | FULL YEAR 2020) profit (loss) (loss) count(1) EPS(1) (Millions | FULL YEAR 2020) Share count Historical prese
Slide 27: Reconciliation of go-forward financial metrics to historical presentation
Reconciliation of go-forward financial metrics to historical presentation Full Year 2019 Adjusted operating Adjusted net Pro-forma Adjusted ($M, except EPS | FULL YEAR 2019) profit (loss) earnings (loss) share count(1) EPS(1) Historical presentation $466.8(3) $120.9 362.0 $0.33 Other deductions, net
Slide 28: Reconciliation of GAAP Financial Performance to Non-GAAP Adjusted
Reconciliation of GAAP Financial Performance to Non-GAAP Adjusted First Quarter 2021 and Full Year 2021 guidance At mid-point of guidance range Operating Interest Income tax Net earnings ($M, except EPS | FULL YEAR 2021) Net Sales Profit(1) expense, net expense (loss) Diluted EPS(2) EBITDA GAAP $4,7
Slide 29: Adjusted earnings per share bridge: 2020 to 2021
Adjusted earnings per share bridge: 2020 to 2021 Assumes 362M diluted shares for both 2020 (proforma) and 2021 +48% 0.06 0.11 (0.18) (0.11) 0.02 1.04 0.44 0.70 0.79 0.16 (0.10) (0.15) FY 2020 Interest Income taxes Pro-forma FY 2020 Volume Margin Net restruct. Growth 2020 Other FY 2021 actual expense
Slide 30: Adjusted earnings per share bridge: 1st quarter 2020 to 2021
Adjusted earnings per share bridge: 1st quarter 2020 to 2021 Assumes 362M diluted shares for both 2020 (pro-forma) and 2021 0.09 0.11 0.02 0.54 (0.65) 0.00 0.13 Q1 2020 Interest expense Income taxes Pro-forma Q1 2020 Operational Q1 2021 actual adjustments* pro-forma improvements guidance (mid-point)
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