Koppers (KOP) Bank of America Securities 2024 Leveraged Finance Conference summary

Business segment overview

• Operates in three segments: Performance Chemicals (PC), Railroad and Utility Products and Services (RUPS), and Carbon Materials and Chemicals (CMC).

• PC focuses on wood treatment chemicals for residential use; RUPS supplies wood products to railroads and utilities; CMC leads in coal tar distillation and related products.

• CMC's enhanced carbon products project in Nyborg aims for higher purity pitch and potential battery applications.

Financial performance and guidance

• Working capital inflow expected to be more balanced between Q3 and Q4 2024.

• Cash tax rate for 2023 seen as a new baseline, reflecting balanced US and international earnings.

• Maintenance CapEx remains at $65 million; 2024 CapEx guided at $80–85 million, dropping to $65–70 million in 2025 as major projects wind down.

• EBITDA target of $300 million for 2025, up from $200 million in 2021, driven by organic growth and capital investments.

Capital projects and investments

• Major recent projects include rail tie facility expansion, utility pole capacity increases, and Project Skyfall in Europe.

• Project Skyfall enhances pitch yield and purity, with future potential in EV battery coatings.

• Investments from 2021–2023 now expected to deliver EBITDA benefits as focus shifts to maintenance CapEx.