Ecovyst Inc. · NYSE:ECVT
Ecovyst — PQ Group Holdings — Q4 2017 Earnings Presentation
19 slides from Ecovyst's earnings presentation, Mar 21, 2018
Slide 1: Fourth Quarter and Year 2017 Investor Presentation
Fourth Quarter and Year 2017 March 21, 2018 – 10:00 AM ET INVESTOR PRESENTATION 1
Slide 2: Legal Disclaimer
LEGAL DISCLAIMER Forward-Looking Statements Some of the information contained in this presentation, the conference call during which this presentation is reviewed and any discussions that follow constitutes “forward-looking statements”. Forward-looking statements can be identified by words such as “
Slide 3: PQ Investment Highlights
PQ INVESTMENT HIGHLIGHTS Leading Global Producer of Specialty Catalysts & Services, Specialty Materials & Chemicals #1 and #2 positions in nearly all product lines GDP+ growth Input cost small as % of customer total product cost High margin environmentally friendly applications Track record of innov
Slide 4: 2017 – Strong Financial Performance Leads to Record Year
2017 – STRONG FINANCIAL PERFORMANCE LEADS TO RECORD YEAR Financial results improved year-over-year and exceeded our guidance o Q4 Sales up 10.9% Y-o-Y and Adjusted EBITDA up 10.3% o 2017 Sales up 4.9% Y-o-Y, Adjusted EBITDA up 7.7% and margins expanded 70bps to 28.1% Reduced leverage by 1x to 4.9x N
Slide 5: 2018 – Positioned for Growth and Significant Cash Flow
2018 – POSITIONED FOR GROWTH AND SIGNIFICANT CASH FLOW OUR GOALS: Deliver industry leading financial results o Sales growth of 5% to 7%, Adjusted EBITDA growth of 4% to 8% with sustained high margins o Free cash flow of $120 million to $140 million; ~$55 million benefit from reduced cash interest Co
Slide 6: 2017 Financial Highlights
2017 FINANCIAL HIGHLIGHTS Growth Across Our Key End Markets Fourth Fourth Full Year Quarter Quarter % Full Year Pro Forma % ($ in millions) 2017 2016 Change 2017 2016 Change Sales 358.1 322.8 10.9% 1,472.1 1,403.0 4.9% Adjusted 109.4 99.2 10.3% 453.3 420.8 7.7% EBITDA Adjusted EBITDA 27.3% 26.9% 40
Slide 7: Environmental Catalysts & Services Performance Highlights
ENVIRONMENTAL CATALYSTS & SERVICES PERFORMANCE HIGHLIGHTS Continued Robust Demand for Fuel and Emissions Controls Fourth Fourth Full Year Quarter Quarter % Full Year Pro Forma ($ in millions) 2017 2016 Change 2017 2016 % Change Sales PQ 122.9 114.3 7.5% 473.7 457.9 3.5% Zeolyst JV 42.8 46.0 (7.0%) 1
Slide 8: Performance Materials & Chemicals Performance Highlights
PERFORMANCE MATERIALS & CHEMICALS PERFORMANCE HIGHLIGHTS Diverse Product Group Drives Performance Fourth Fourth Full Year Quarter Quarter % Full Year Pro Forma % ($ in millions) 2017 2016 Change 2017 2016 Change Sales 235.9 209.1 12.8% 1,001.8 947.2 5.8% Adjusted EBITDA 55.4 47.5 16.6% 240.2 231.8 3
Slide 9: Outlook: Growth Across All Product Groups
GROWTH ACROSS ALL PRODUCT GROUPS Expected in 2018 SEGMENT Environmental Catalysts Performance Materials & Services & Chemicals PRODUCT GROUP Refining Silica Performance Performance Services Catalyst Zeolyst JV Chemicals Materials Increased Octane Growth in lighter More stringent Environmentally High
Slide 10: 2018 Outlook
2018 OUTLOOK Expected Free Cash Flow of $120 Million to $140 Million 2017 2018 ($ in millions except %) Actual Outlook Change Sales $1,472.1 $1,545 - $1,575 5% - 7% Adjusted EBITDA $453.3 $470 - $490 4% - 8% Free Cash Flow ($24.4) $120 - $140 ~$145 - $165 Interest Expense $179.0 $120 - $130 (~$50 -
Slide 11: Appendix
APPENDIX re) PQ Corporation
Slide 12: Sales and Adjusted EBITDA Major Change Factors
SALES AND ADJUSTED EBITDA MAJOR CHANGE FACTORS Fourth Quarter and Year 2017 SALES Three Months Ended Year Ended December 31, 2017 December 31, 20171 Environmental Performance Environmental Performance Sales PQ Group Catalysts Materials PQ Group Catalysts Materials (in $ millions and %) Holdings Inc.
Slide 13: Quarterly Segment Sales and Adjusted EBITDA
QUARTERLY SEGMENT SALES AND ADJUSTED EBITDA Year 2017 For the Quarter Ended March 31, June 30, September 30, December 31, ($ in millions) 2017 2017 2017 2017 Total 2017 Sales: Silica Catalysts 17.2 20.0 15.1 23.0 75.3 Refining Services 94.1 104.0 100.4 99.9 398.4 Environmental Catalysts & Services 1
Slide 14: Debt and Free Cash Flow
DEBT AND FREE CASH FLOW 2017 Overview Capitalization Year Pro-Forma (in millions) 2017 20171 o Lowered cost of debt to ~4.5% Debt: ABL Revolving Credit Facility 25.0 25.0 o Flexibility to accelerate debt repayment without penalty USD First Lien Term Loan 916.2 – o Extended maturities and lowered int
Slide 15: 2017 Supplemental Information
2017 SUPPLEMENTAL INFORMATION Capital Expenditures, Revenues by End Use, Customer and Region Pro Forma CAPITAL EXPENDITURES Full Year Full Year % SALES GROWTH BY END USE 2 ($ in millions) 2017 2016 By Segment Fuels & Emissions Controls + 10% Performance Materials & Chemicals 84.8 92.1 Highway Safety
Slide 16: Reconciliation of Non-GAAP Financial Measures: Net Income to Segment Adjusted EBITDA
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Net Income (Loss) to Segment Adjusted EBITDA Historical Historical Historical Pro Forma Three Months Ended Three Months Ended Year ended March 31, June 30, September 30, December 31, December 31, ($ in millions) 2017 2017 2017 2017 2016 2017 2016 Reconci
Slide 17: Reconciliation of Non-GAAP Financial Measures: Net Income to Adjusted Net Income
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Net Income to Adjusted Net Income Historical Historical Pro Forma Three Months Ended Year ended December 31, December 31, ($ in millions) 2017 2016 2017 2016 Reconciliation of net income (loss) attributable to PQ Group Holdings Inc. to Adjusted Net Incom
Slide 18: Descriptions to PQ Non-GAAP Reconciliations
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Descriptions to PQ Non-GAAP Reconciliations Descriptions to PQ Non-GAAP Reconciliations a) We use Adjusted EBITDA, adjusted net income, and adjusted basic and diluted EPS, as a performance measure to evaluate our financial results. Because our environmen
Slide 19: PQ Corporation
Te), PQ Corporation