Calgon Carbon Corporation

Transcription

1 Calgon Carbon Corporation B. Riley & Company 8 th Annual Investor Conference March 13, 2007

2 Forward-Looking Information Safe Harbor This presentation contains historical information and forward-looking statements. Statements looking forward in time, including statements regarding future growth and profitability, price increases, cost savings, broader product lines, enhanced competitive posture and acquisitions, are included in this presentation pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of They involve known and unknown risks and uncertainties that may cause the Company s actual results in future periods to be materially different from any future performance suggested herein. Further, the Company operates in an industry sector where securities values may be volatile and may be influenced by economic and other factors beyond the Company s control. In the context of the forward-looking information provided in this presentation, please refer to the discussions of risk factors detailed in, as well as the other information contained in, this presentation and the Company s filings with the Securities and Exchange Commission. 1

3 Agenda Company Overview Activated Carbon Products and Markets Ultraviolet Light Products and Markets CCC Re-engineered for Profitability Growth Opportunities 2

4 CCC A Snapshot Removes impurities from air, water, and industrial processes using purification and separation technologies World s largest producer of granular activated carbon Highly technical over 200 patents 3

5 Revenue $290M YTD 3Q06 - $237M 850 employees CCC Today 16 carbon manufacturing, reactivation, and equipment fabrication facilities throughout the world 26 sales and service centers in 12 countries 2 R&D facilities Ashton, UK Pittsburgh, PA 4

6 CCC s Operations Are Global Houghton-le-Spring, England Ashton, England Grays, England Beverungen, Germany Feluy, Belgium Blue Lake, CA Stockton, CA Santa Fe Springs, CA Rockdale, IL Columbus, OH Pittsburgh, PA Big Sandy, KY Pearl River, MS Houston,TX Sulfur, LA Providence, RI Marlton, NJ Downington, PA Datong, China Tianjin, China Beijing, China Fukui, Japan Tokyo, Japan Shanghai, China Taipei, Taiwan Mexico City, Mexico Thailand Singapore S o Paulo, Brazil Headquarters Manufacturing Facilities Equipment Facilities Sales and Field Service ffices O 5

7 CCC is Becoming a Worldwide Products and Services Provider Asia 8% Europe 30% Americas 62% 6

8 CCC s Products are Important for Treatment of Gases and Liquids Granular Powder Fine Mesh (including Home Water Filters) Acid Washed Catalytic Impregnated Personal Protection Coconut Carbons Specialty Carbons Reactivation (Custom & Potable) IX Resin & Other Media IX Resin Regeneration Equipment Leasing Emergency Services Field Services Carbon Cloth Home Products - Tarnish Prevention and Odor Removal Consumer 4% Carbon/Service 83% Equipment 13% UV Disinfection Ion Exchange Odor Removal Carbon Adsorption Systems Small Treatment Systems Indoor Air Purification Metal Adsorption UV/Oxidation Purification Water Applications 7

9 CCC Serves Diverse Markets Water Treatment Accounts For 50% of Revenue Market Environmental Water 21% Environmental Air 11% Potable Water 20% Industrial Processes 20% Food 13% Specialty Carbons 11% Consumer 4% 100% Segments containing water treatment applications 8

10 CCC Produces/Markets Activated Carbon Made from Coal and Coconut Type of Carbon % of Market Americas Europe Asia Coal Coconut

11 CCC s Competitive Position % Share % U.S. U.S. Activated Activated Carbon Carbon Market Market Share Share 25 21% % 10% 3% 0 Calgon Carbon Mead Westvaco Norit Siemens Jacobi 10

12 CCC s Service Model Reactivated carbon installed in polishing position Adsorption system Exhausted carbon transported to Reactivation Center Reactivated carbon transported to site Carbon in Reactivation Unit Carbon out Off-gas treatment for complete destruction of adsorbed organic compounds 11

13 Ultraviolet Light Technology Drinking Water Disinfection Inactivation of Wastewater Disinfection UV Oxidation Taste and Odor Remediation 12

14 UV Becoming a Leader in a Rapidly Growing Market UV Light for Drinking Water and Wastewater Disinfection $3-billion market over six years Complete product lines for drinking water and wastewater disinfection Drinking Water Disinfection CCC invented UV process for prevention of infection from Sentinel reactors (installed and sold) to treat 1.2 bgd Wastewater Disinfection Launched C 3 Product line in 2004 and 2005 Modular, open channel Low pressure, high output lamps Automatic cleaning system Treating more than 55 mgd Expect growth rates in excess of 25% per year 13

15 CCC Re-engineered in Offset $30M in cost increases Changed commercial asset and logistical strategies in Carbon and Service Raised prices Exited low margin sub-segments Optimized asset utilization Optimized supply chain Simplified Company to increase focus on core. Divested non-core businesses (i.e. Charcoal and Solvent Recovery) Changed equipment philosophy Reduced headcount and fringes, including U.S. pension freeze Optimized logistics and production planning Closed Japanese Joint Venture plant Implemented capital improvements Example: Energy conservation Implemented new credit structure lower cost, more capacity 14

16 Legal Expense Had Significant Impact on Results Cost 9 Months YTD ($ millions) Forecast? Legal Expense has been concentrated in three areas: UV Patent Defense 1996 Acquisition Suit ($10M Award) Anti-Dumping Tariff Petition Progress made in recent months 2007 expenses will sharply decline 15

17 Tariffs on Chinese Carbon Represent Major Opportunity for CCC Date 3/06 4/06 10/06 10/06 1/07 2/07 2/07 4/07 Anti-Dumping Petition Filed (Chinese activated carbon imports to U.S. approximate 80MM lbs./yr.) Favorable ITC Preliminary Determination DOC established Preliminary Tariffs DOC verified data supplied by Chinese producers DOC set final tariffs Activity ITC Hearing ITC makes final determination on anti-dumping petition DOC = U.S. Department of Commerce ITC = U.S. International Trade Commission 16

18 Tariffs Signal Fundamental Change in Carbon Industry Final tariffs set at 62% to 228% Importers must post bond or cash deposit equal to amount of tariff Majority of Chinese imports to U.S. subject to tariffs of 73.6% CCC subject to tariffs as Importer Effect of tariffs (example) Average cost Chinese carbon $0.30/lb. 70% x 0.70 $0.21/lb. Cost of Chinese Carbon = $0.51/lb. vs. $0.30/lb. Tariffs should result in Fair Market Pricing in U.S. 17

19 Mercury Removal Potentially Largest Market Ever for Activated Carbon Mercury Removal From Power Plant Flue Gas CAMR regulations set 70% reduction by 2010 Further reduction of 90% by 2018 Several states increasing reductions and/or expediting compliance New plants subject to regulated levels upon start-up 18

20 U.S. Market Potential $100MM - $500MM per Year Injection of Powdered Activated Carbon is leading abatement technology CCC Product Family for Enhanced Mercury Removal FLUEPAC MC participate in early bulk market FLUEPAC MC PLUS enhanced value for increased removal FLUEPAC MC derivatives Value added proprietary position for niches Equipment Line facilitate storage and handling Action Plan Product testing top priority State-specific activity for improved response to specific coal types Expand production capacity and efficiency New starting materials to respond to increased demand or performance requirements 19

21 Other Growth Opportunities Stage 2 Disinfection By-Product Rule 600+ new granular activated carbon systems expected MtBE Remediation $2 to 12B Market Perchlorate Removal from Groundwater $1B Market, 28 states Launching new patented technology Regional Service expansion 20

22 Formula For Success Fundamental Change in Industry (Tariffs) Firm Foundation in Place (Re-engineering) Biggest and Most Growth Opportunities ever with CCC Products perfectly positioned Updated Corporate Strategy in place (TBA) 21

23 Thank You Making Water and Air Safer and Cleaner 22