Ecovyst Inc. · NYSE:ECVT
Ecovyst — PQ Group Holdings — Investor Presentation (February 2020)
23 slides from Ecovyst's investor presentation, February 2020
Slide 1: Investor Presentation February 2020
INVESTOR PRESENTATION February 2020 1
Slide 2: Legal Disclaimer
LEGAL DISCLAIMER Forward-Looking Statements Some of the information contained in this presentation constitutes “forward-looking statements”. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “projects” and si
Slide 3: PQ Corporation Overview
PQ CORPORATION OVERVIEW 2019 SALES AND ZEOLYST JV SALES2 Long History: Founded in 1831 SEGMENT3 SALES o Differentiated Specialty Businesses 25% o Innovation Culture 39% Performance Chemicals Performance Materials Catalysts o Sustainable Products 15% Refining Services 21% o Track Record of Financial
Slide 4: Track Record of Performance
TRACK RECORD OF PERFORMANCE SALES ADJUSTED EBITDA ($ in millions) ($ in millions) 1608 1567 474 1472 464 453 144 157 170 2017 2018 2019 2017 2018 2019 GAAP Sales Zeolyst JV ADJUSTED FREE CASH FLOW NET DEBT / ADJUSTED EBITDA ($ in millions) 166 4.9x 134 4.5x 3.9x 25 2017 2018 2019 2017 2018 2019 (1)
Slide 5: Progress on Portfolio Actions
PROGRESS ON PORTFOLIO ACTIONS Q4/18 Q2/19 Q4/19 o Embarked on strategic o Closed sale of o Completed non- portfolio review Performance Chemicals core asset sale for product line for $28 $19 million o Completed non-core asset sale for $13 million million Q1/19 Q3/19 2020 o Delayered and separated o E
Slide 6: Refining Services
REFINING SERVICES Leading provider of sulfuric acid recycling services and end-to-end logistics for North American alkylation production for higher octane gasoline COMPETITIVE STRENGTHS FINANCIAL HIGHLIGHTS GROWTH DRIVERS Supplier to largest North America Shale oil share growth refineries Sales ~ 70
Slide 7: Catalysts
CATALYSTS Leading global supplier of specialty and emission control catalysts for global refineries and PE and MMA producers and licensors COMPETITIVE STRENGTHS FINANCIAL HIGHLIGHTS GROWTH DRIVERS Key supplier for global refineries Broader adoption of emissions standards Sales A 30 year joint ventur
Slide 8: Performance Materials
PERFORMANCE MATERIALS Global leader in engineered glass microspheres for transportation safety marking and highly specialized industrial applications COMPETITIVE STRENGTHS FINANCIAL HIGHLIGHTS GROWTH DRIVERS Transportation safety lead bead supplier Steady highway demand ~100-year glass technology le
Slide 9: Performance Chemicals
PERFORMANCE CHEMICALS Leading global producer of sodium silicates, specialty silicas and silicate derivatives for broad range of industrial and consumer uses COMPETITIVE STRENGTHS FINANCIAL HIGHLIGHTS GROWTH DRIVERS Strategic global infrastructure Shifting consumer preferences Largest global sodium
Slide 10: Performance Chemicals Transformation
PERFORMANCE CHEMICALS TRANSFORMATION MANUFACTURING NETWORK EXCELLENCE: OPTIMIZATION: Accelerate productivity Align footprint with EXPECTED DRIVERS: and throughput growth opportunities BENEFIT: Commercial $10 million to $15 effectiveness million Adjusted ENHANCE EBITDA annualized Productivity and CUS
Slide 11: Innovation: ~200 Years of Successful Commercialization
INNOVATION: ~ 200 YEARS OF SUCCESSFUL COMMERCIALIZATION >$700 million in sales from new products over the last 5 years1 BALANCED INNOVATION APPROACH ENABLES GROWTH 10 130 Innovation Scientists & Facilities Technologists Experienced product development team with strong customer relationships CHEMISTR
Slide 12: PQ's Products for a Sustainable Future
PQ’s PRODUCTS FOR A SUSTAINABLE FUTURE Inorganic Materials Drive ~ 75% of our Sales1 REFINING SERVICES CATALYSTS Largest North America recycler of spent sulfuric Remove sulfur from diesel fuel for landand acid, avoiding 1.5 million tons of landfill or deep marine transportation well disposal annuall
Slide 13: PQ Undervalued vs Specialty Chemical Peers
PQ UNDERVALUED VS SPECIALTY CHEMICAL PEERS Sales Adj EBITDA Adj EBITDA Margin ’17A – ’19A CAGR1,2 ’17A – ’19A CAGR1,2 ’19A1,2 27.9% 30.7% 15.3% 29.3% 12.1% 27.3% Metrics 6.8% 20.2% 22.5% Median: Median: 21.2% 3.7% 22.5% 6.8% 14.9% (1.4%) Median: 4.5% 4.5% 2.3% 1.4% 1.4% (11.6%) PQ NGVT FUL GRA ESI A
Slide 14: Why PQ's Specialty Chemical Portfolio?
WHY PQ’s SPECIALTY CHEMICAL PORTFOLIO? #1 and #2 positions in nearly all product lines Sustainable growth from diverse underlying secular macro trends Strategic and extensive global manufacturing network Input cost small as percentage of customer total product cost Track record of innovation and cus
Slide 15: Supplemental Information
SUPPLEMENTAL INFORMATION
Slide 16: A Portfolio of Stability
A PORTFOLIO OF STABILITY % of 2019 Sales by End Use1 End Use Categorized by Sensitivity to Downturn2 Packaging & Engineered Plastics Fuels & Emissions (All segments) Controls (RS & C) 17% 22% Six Primary End Uses Consumer Products (PC) 15% Serve ~28 18% Secondary End Uses Highway Safety 8% & Constru
Slide 17: 2020 Guidance
2020 GUIDANCE ($ in millions, 2019 2020 except % and per share) Actual Outlook Sales 1,567.1 1,595 – 1,625 Adjusted EBITDA 474.3 470 – 480 Adjusted Free Cash Flow 166.2 155 – 175 Adjusted Diluted EPS 0.92 0.85 – 1.02 Interest Expense 111.5 100 – 105 Depreciation & Amortization PQ 182.1 180 – 190 Zeo
Slide 18: Quarterly Segment Sales, Adjusted EBITDA and Margins
QUARTERLY SEGMENT SALES, ADJUSTED EBITDA AND MARGINS Year 2019, 2018 and 2017 Three Months Ended ForEnded Year the Quarter Ended Three Months Ended Year Ended Year Ended September September March 31, June 30, 30, December 31, December 31, March 31, June 30, 30, December 31, December 31, December 31,
Slide 19: Adjusted Free Cash Flow
ADJUSTED FREE CASH FLOW Full Year Full Year Full Year ($ in millions) 2019 2018 2017 Cash Flow from Operations before interest 401.9 377.5 364.5 and tax Less: Cash paid for taxes 17.4 23.8 29.2 Cash paid for interest1 116.8 105.1 170.1 Cash Flow from Operations 267.7 248.6 165.2 Less: Purchases of p
Slide 20: Reconciliation of Net Income to Segment Adjusted EBITDA
RECONCILATION OF NET INCOME TO SEGMENT ADJUSTED EBITDA Year 2019, 2018 and 2017 Three Months Ended Year Ended Three Months Ended Year Ended Year Ended September December September December December December March 31, June 30, 30, December 31, March 31, June 30, 30, 31, 31, 31, ($ in millions) 2019 2
Slide 21: Reconciliation of Quarterly Net Income to Adjusted Net Income and EPS
RECONCILATION OF QUARTERLY NET INCOME TO ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE Year 2019 and 2018 Three Months Ended Year Ended Three Months Ended Year Ended March 31, June 30, September 30, December 31, December 31, March 31, June 30, September 30, December 31, December 31, ($
Slide 22: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Descriptions to PQ Non-GAAP Reconciliations a) We use Adjusted EBITDA as a performance measure to evaluate our financial results. Because our Catalysts segment includes our 50% interest in the Zeolyst Joint venture, we include an adjustment for our 50% p
Slide 23: Leading the
Leading the way 0) a future i a — adel
PQ Group Holdings — Investor Presentation (February 2020) on 6ix