NACCO Industries (NC) investor relations material

Company overview and business model

• Operates a diversified natural resources platform with a legacy in coal mining, now expanded into contract mining, minerals and royalties, and environmental mitigation.

• Focuses on long-term customer relationships, stable cash flows, and low maintenance capital expenditures.

• Business model emphasizes organic growth, avoiding acquisitions, and leveraging internal cash flows for new projects.

• Utilizes a flywheel approach to compound growth by reinvesting in high-return, long-term projects.

• Dual-class stock structure supports long-term strategy, with founding family holding majority of high-vote shares.

Segment expansion and project highlights

• Contract mining has grown from aggregates in Florida to other minerals and regions, including a major lithium project in Nevada.

• Minerals and royalties business invests in oil and gas reserves, focusing on long-term upside and less competitive assets.

• Environmental mitigation business restores streams and wetlands, generating credits for sale to developers and providing reclamation services.

• Recent contracts and investments are expected to deliver significant EBITDA growth, with new projects adding $11M annually starting in 2026.

• Mitigation business is reaching profitability, with 14 projects set to contribute meaningfully from 2026 onward.

Financial performance and outlook

• Recurring EBITDA from legacy businesses is about $50M, with a target of $150M in the next 5–7 years.

• $150M in net present value added since 2019, with some projects (like lithium) yet to contribute materially.

• Contracts often include inflation protection, supporting predictable and growing cash flows.

• Business model is resilient to market trends and cycles, focusing on fundamental needs of American industry.

• EBITDA is preferred as a performance metric due to low volatility and low maintenance CapEx.