Ecovyst Inc. · NYSE:ECVT

Ecovyst — PQ Group Holdings — Morgan Stanley Global Chemicals and Agriculture Conference 2018

26 slides from Ecovyst's conference presentation, November 2018

  1. Slide 1: Investor Presentation

    INVESTOR PRESENTATION Morgan Stanley Global Chemicals and Agriculture Conference – November 2018

  2. Slide 2: Legal Disclaimer

    LEGAL DISCLAIMER Forward-Looking Statements Some of the information contained in this presentation, and any discussions that follow constitutes “forward-looking statements”. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimat

  3. Slide 3: PQ Investment Highlights

    PQ INVESTMENT HIGHLIGHTS Leading Global Producer of Specialty Catalysts, Materials, Chemicals & Services ENVIRONMENTAL CATALYSTS PERFORMANCE MATERIALS & SERVICES (EC&S) & CHEMICALS (PM&C) 1 1 37% Adjusted EBITDA margin 23% Adjusted EBITDA margin REFINING SILICA ZEOLYST PERFORMANCE PERFORMANCE SERVIC

  4. Slide 4: Product Group Growth Drivers

    PRODUCT GROUP GROWTH DRIVERS Diverse product portfolio with environmental and safety demand drivers Environmental Catalysts & Services (EC&S): o Refining Services – expanding sulfuric acid alkylation to meet higher octane demand o Silica Catalysts – growing global polyethylene demand for plastics o

  5. Slide 5: Demonstrated Sustainable Financial Performance Across Macroeconomic Cycles

    DEMONSTRATED SUSTAINABLE FINANCIAL PERFORMANCE ACROSS MACROECONOMIC CYCLES Stability through cycles Adjusted EBITDA and Adjusted EBITDA Margin (%)1,2,3 ($ in millions except %) o Historical Adjusted EBITDA CAGR of ~ 7% o Attractive, stable margins (1) Adjusted EBITDA for the period from 2005 to 2014

  6. Slide 6: Adjusted Free Cash Flow Drives Delevering Progress

    ADJUSTED FREE CASH FLOW DRIVES DELEVERING PROGRESS Secular market growth trends, leading positions drive healthy margins and adjusted free cash flow performance ADJUSTED FREE CASH FLOW ($mm) NET DEBT/ADJUSTED EBITDA RATIO $80 million YTD debt repaid; Leverage target of 3.0 – 3.5x additional anticipa

  7. Slide 7: Key Priorities and Focus

    KEY PRIORITIES AND FOCUS Create Shareholder Value COMPETITIVE KEY VALUE ADVANTAGES DRIVERS o Unique portfolio o Profitable Growth of businesses o Leading positions in o Capital efficiency growing markets o Innovation potential o Free cash flow 7

  8. Slide 8: Supplementary Information

    SUPPLEMENTARY INFORMATION re) PQ Corporation

  9. Slide 9: Refining Services

    #1 U.S. Supplier REFINING SERVICES PQ well positioned to serve new capacity expansions in Gulf Gulf Coast Sulfuric Acid Regeneration Demand Planned alkylation expansions, (000 Tons Per Year) all Gulf Coast, Sulfuric-based 2,200 Expansions driven by: o Growth in premium share 1,600 of total gasoline

  10. Slide 10: Silica Catalysts

    #2 primary global supplier SILICA CATALYSTS PQ is aligned with key licensors for new silica-based capacity PE Capacity by Licensor ~50% of the current capacity 120 uses silica catalyst ~30 announcements of new global capacity expected to 90 come on line between 2018– 2021 Million MT 60 o ~80% of new

  11. Slide 11: Zeolyst International – Fuel and Emission Control Catalysts

    #1 global supplier ZEOLYST INTERNATIONAL – of emission catalysts FUEL AND EMISSION CONTROL CATALYSTS Growth from increased fuel and emissions regulations Removing NOx from Vehicle Emissions: Removing Sulfur from Fuels: Global Mix (000) and Catalyst Consumption for HDD Vehicles Hydrocracking Projecte

  12. Slide 12: Performance Materials

    #1 global provider of PERFORMANCE MATERIALS engineered safety beads Increased standards for transportation safety drive demand Product Line Lead road marking bead supplier in North America, Europe and Latin America Engineered Glass Materials 33% Broad global network with 28 production facilities Hig

  13. Slide 13: Performance Chemicals

    #1 North America & PERFORMANCE CHEMICALS Europe silicates supplier Growing trends for environmentally friendly and sustainable products Product Line Other > 2x sodium silicate supply share of nearest 13% competitor Spray Dry Silicate 6% ~ 70% contracted sales with 1 – 3 year term; Zeolite Products S

  14. Slide 14: PQ Investment Highlights

    PQ INVESTMENT HIGHLIGHTS Leading Global Producer of Specialty Catalysts, Materials, Chemicals & Services ENVIRONMENTAL CATALYSTS PERFORMANCE MATERIALS & SERVICES (EC&S) & CHEMICALS (PM&C) 37%1 Adjusted EBITDA margin 23%1 Adjusted EBITDA margin REFINING SILICA ZEOLYST PERFORMANCE PERFORMANCE SERVICES

  15. Slide 15: Diverse and Stable Portfolio

    DIVERSE AND STABLE PORTFOLIO Secular growth trends and #1 and #2 leading positions in most product groups 2017 SALES AND ZEOLYST JV TOTAL NET SALES: BY END USE1 2017 SALES GROWTH BY END USE 1 Natural Resources (EC&S) Fuels & Emissions Fuels & Emissions Controls + 10% Controls (EC&S) 8% Industrial &

  16. Slide 16: 2018 Guidance

    2018 GUIDANCE Adjusted free cash flow range of $125 million to $140 million 2017 2018 ($ in millions except %) Actual Outlook Sales 1,472.1 1,580 – 1,600 Adjusted EBITDA 453.3 460 – 465 Adjusted Free Cash Flow (24.4) 125 – 140 Interest Expense 179.0 115 – 120 Depreciation & Amortization PQ 177.1 185

  17. Slide 17: Adjusted Free Cash Flow

    ADJUSTED FREE CASH FLOW Third Quarter and YTD 2018 Three months ended Nine months ended Year ended September 30, September 30, December 31, ($ in millions) 2018 2017 2018 2017 2017 Net cash provided by operating activities 115.9 88.0 166.0 109.8 116.1 Less: Purchases of property, plant and equipment

  18. Slide 18: Quarterly Net Income to Adjusted Net Income and Adjusted Diluted EPS

    QUARTERLY NET INCOME TO ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE Third Quarter 2018, YTD 2018 and Year 2017 For Nine the Quarter Ended Months Three Months Ended Ended LTM Ended Three Months Ended Year Ended March 31, June 30, September 30, September 30, September 30, March 31, Jun

  19. Slide 19: Net Income (Loss) to Segment Adjusted EBITDA

    NET INCOME (LOSS) TO SEGMENT ADJUSTED EBITDA Third Quarter 2018, YTD 2018 and Year 2017 Nine Months Three Months Ended Ended LTM Ended Three Months Ended Year Ended March 31, June 30, September 30, September 30, September 30, March 31, June 30, September 30, December 31, December 31, ($ in millions)

  20. Slide 20: Reconciliation of Non-GAAP Financial Measures

    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Descriptions to PQ Non-GAAP Reconciliations Descriptions to PQ Non-GAAP Reconciliations a) We use Adjusted EBITDA as a performance measure to evaluate our financial results. Because our Environmental Catalysts and Services segment includes our 50% intere

  21. Slide 21: Quarterly Segment Sales and Adjusted EBITDA

    QUARTERLY SEGMENT SALES AND ADJUSTED EBITDA Third Quarter 2018, YTD 2018 and Year 2017 For the Quarter Ended Nine months Three Months Ended Ended LTM Ended Three Months Ended Year Ended March 31, June 30, September 30, September 30, September 30, March 31, June 30, September 30, December 31, Decembe

  22. Slide 22: 2005 – 2017 Reconciliations

    2005 – 2017 RECONCILIATIONS Legacy Business – Sales & Adjusted EBITDA, Leverage Ratio Year Ended December 31, 2015 2016 Pro Pro ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 forma 3 forma 3 2017 Reconciliation of sales and adjusted EBITDA Legacy PQ Sales 1 635.3 708.6 775.0 977.0

  23. Slide 23: 2005 – 2014 Reconciliations for Adjusted EBITDA and Margins

    2005 – 2014 RECONCILIATIONS FOR ADJUSTED EBITDA AND MARGINS Legacy PQ1 – Net Income (Loss) to Adjusted EBITDA Reconciliation Year Ended December 31, ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Reconciliation of net income (loss) attributable to Legacy PQ to Adjusted EBITDA Net

  24. Slide 24: 2005 – 2014 Reconciliations for Adjusted EBITDA and Margins

    2005 – 2014 RECONCILIATIONS FOR ADJUSTED EBITDA AND MARGINS Legacy Eco Services1 - Net Income (Loss) to Adjusted EBITDA Reconciliation Year Ended December 31, 2014 2014 ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 Successor Predecessor Reconciliation of net income (loss) attributable

  25. Slide 25: 2015 – 2017 Reconciliations for Adjusted EBITDA and Margins

    2015 – 2017 RECONCILIATIONS FOR ADJUSTED EBITDA AND MARGINS Post-Business Combination PQ – Net Income (Loss) to Adjusted EBITDA Reconciliation Year Ended December 31, 2015 2016 ($ in millions) Pro forma 1 Pro forma 1 2017 Reconciliation of net income (loss) attributable to PQ Group Holdings Inc. to

  26. Slide 26: Friendlier products for a cleaner, safer world

    friendlier products for a cleaner, safer world

PQ Group Holdings — Morgan Stanley Global Chemicals and Agriculture Conference 2018 on 6ix