Koppers (KOP) investor relations material

Strategic transformation and business evolution

• Shifted from a legacy carbon materials and railroad company to a global leader in wood preservation technology, focusing on Performance Chemicals (PC) and Utility and Industrial Products (UIP) as growth engines, while optimizing legacy businesses for cash generation and risk reduction.

• Launched Catalyst, an enterprise-wide transformation program in 2025, driving operational discipline, cost savings, and performance improvement, with $46 million in benefits in 2025 and a target of $90 million recurring annual adjusted EBITDA benefits by 2028.

• Major capital investments completed, enabling a focus on optimizing the portfolio, harvesting cash, and reducing leverage, with PC and UIP now comprising two-thirds of year-to-date adjusted EBITDA in 2026.

• Organizational redesign centralized key functions, enhanced IT and analytics, and clarified roles to improve execution and accountability.

• Sustainability strategy built on people, planet, and performance, integrating innovation, compliance, and 2030 environmental goals.

Financial guidance and capital allocation

• Targeting adjusted EBITDA margins of 15% or higher, three-year EPS CAGR of 10%+, net leverage at or below 2.5x, and free cash flow averaging $100 million annually through 2028.

• Plan to return approximately 50% of future free cash flow to shareholders via dividends and share repurchases, while accelerating deleveraging and pursuing selective growth opportunities, especially in PC and UIP.

• Capital expenditures expected to decline to 2%-3% of revenue, down from nearly 5% during the prior investment cycle.

• Closure of the Stickney facility and consolidation to Nyborg, Denmark, expected to reduce CMC production costs by 50% versus 2024 and generate $15-$20 million in annual adjusted EBITDA.

• No further M&A or divestitures required to achieve 2028 targets, but disciplined bolt-on acquisitions will be considered if they meet strict return and strategic criteria.

Business segment outlook and growth initiatives

• PC is focused on launching next-generation wood preservatives, expanding internationally (notably with a new Brazil CCA facility), and developing fire-resistant and biocide products, with innovation and customer partnerships as key differentiators.

• UIP is expanding into the Midwest, Southwest, and Western U.S., leveraging recent acquisitions and new facilities to capture market share in a growing utility pole market driven by grid modernization and AI-related power needs.

• RPS is optimizing operations, managing costs, and maintaining flexibility to respond to deferred maintenance cycles in the rail industry, with Catalyst driving continuous improvement.

• CMC is transitioning to a less volatile, capital-intensive model by consolidating production, reducing exposure to raw material volatility, and focusing on efficiency and profitability.

• Recognized as a global leader in wood preservative systems, with over 139 active patents and a partnership approach offering regulatory, R&D, and quality control support.