Calgon Carbon Corporation

Transcription

1 Calgon Carbon Corporation Ingalls & Snyder LLC Seminar for Specialty Chemical Companies November 10, 2008

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 2008 Financial Results Growth Drivers Mercury Removal UV Disinfection Disinfection By-Product Rule Geographical Expansion 2

4 CCC Today Removes impurities from water, air, and industrial processes Activated Carbon Granular, Powdered, and Cloth Reactivation Service Ultraviolet Light Technology Ion Exchange Technology 3

5 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 4

6 Activated Carbon And Reactivation Service Is CCC s Core Business Consumer 4% Equipment 13% Carbon/Service 83% 5

7 Closed Loop Reactivation Cycle Reactivated carbon installed in polishing position Adsorption system Exhausted carbon transported to Reactivation Center Reactivated carbon transported to site Carbon in Furnace Carbon out Off-gas treatment for complete destruction of adsorbed organic compounds 6

8 CCC s Products And Services Are Used Worldwide 2007 Sales - $351.1M Europe 31% Asia 7% Americas 62% 7

9 CCC Serves Diverse Markets Market Potable Water 24% Wastewater 21% Industrial Processes 20% Food 13% Air Pollution 10% Specialty 8% Consumer 4% 100% 8

10 CCC Continues To Improve Performance Net Sales Cost of Products Sold Selling, Administrative & Research Income from Operations Income Tax Provision Income from Continuing Operations Income (Loss) from Discontinued Operations Net Income Net Income per Diluted Common Share: Net Income per Diluted Share Condensed Consolidated Income Statement Information (Dollars in millions except per share data) (Unaudited) Income from Continuing Operations Before Income Taxes and Equity Income Income from Continuing Operations per Diluted Share Income from Discontinued Operations per Diluted Share Year To Date Ended 9/30/ $ $30.5 $0.52 $0.06 $ $ (0.1) $11.4 $ $0.24 9

11 Condensed Consolidated Balance Sheet Information (Dollars in millions) (Unaudited) September 30, 2008 December 31, 2007 Assets: Cash and cash equivalents Receivables Inventories Total current assets Property, plant and equipment, net Other assets Total assets Liabilities and Shareholders Equity: Short-term debt Current portion of long-term debt Total current liabilities Long-term debt Total liabilities Total shareholders equity Total liabilities and shareholders equity $ $ $ $ $380.2 $ $ $ $172.2 $

12 Drivers for Continued Growth Mercury Removal from Power Plant Flue Gas Powdered Activated Carbon (PAC) Injection is leading abatement technology Potential single largest market for activated carbon Regulation-driven market in the U.S. IA, IL State CO, CT, DE, IL, MA, MD, MN, MT, NC, NH, NJ, NM, PA, VA, WI FL, GA, IN, KS, MI, SC, WA Action Finalized State Legislation New Source Permits or Settlements Proposed State Legislation Source: Clean Air Companies Members Only Website Federal timing and treatment requirements of regulations are uncertain Clean Air Mercury Rule overturned EPA has filed appeal. Ultimately stricter requirements expected which will lead to significant increase in PAC use State regulations are main market drivers 11

13 Drivers for Continued Growth (Cont d) Mercury Removal from Power Plant Flue Gas CCC awarded $55M contract by major U.S. power generator Other contracts under discussion Illinois EPA approved two CCC high-performance carbons Market will eventually require production capacity expansion World supply and demand for activated carbon are coming into balance at 1.4B lbs demand for mercury removal M lbs.* Current U.S. producers are adding capacity to meet demand. B-line expansion Efficiency improvements Future demand -??? Long-term positive for AC industry and CCC * Source Discussions with Potential Customers 12

14 How PAC Removes Mercury from Flue Gas Injection of Powdered Activated Carbon (PAC) into the power plant flue gas stream, which adsorbs the mercury released by the burning coal, is widely considered the most practical, effective control technology. PAC is injected into the flue gas stream. The PAC (which holds the mercury) and particulate matter (fly ash), is removed by an Electrostatic Precipitator (ESP) and sent to landfill disposal or sold to cement manufacturers. 13

15 CCC Has Flexibility to Add Low-Cost PAC Capacity Expansion Production Capacity Capital Cost Status (M lb.) ($M) Re-start Production Line (B-line) 70 ~21 1Q09 Startup Efficiency Improvements Startup Convert GAC Production to PAC 80 0 Under Consideration Add Two Production Lines at Existing Plant Under Consideration 14

16 Other Drivers for Continued Growth UV Light for Drinking Water and Wastewater Disinfection $3-billion market 25%+ growth per year ( ) Drinking Water Disinfection ($1 billion) Control of Cryptosporidium driven by U.S. legislation (LT2) U.S. municipalities must treat for Crypto" by 2012 Sentinel reactors (installed and sold) to treat 3 bgd+ Wastewater Disinfection ($2 billion) Launched C 3 Product Line in 2004 and 2005 C 3 products treating more than 200 mgd Wastewater Reuse Market Growing Emerging Markets for Drinking Water Oxidation Taste and Odor Newly Recognized Contaminants 15

17 Other Drivers for Continued Growth (Cont d) Potable Water Treatment Stage 2 Disinfection By-Product Rule Potential for 600+ new activated carbon systems CCC awarded two major contracts ($9.4M) Carbon Cloth Personnel Protection Regional Expansion Regional Targets for Growth Opportunity(ies) - Asia - Carbon & Reactivation Svc. - China - Carbon & Reactivation Svc. to Multinationals - Central Europe - Carbon & Service - Southern Europe - Carbon & Reactivation Svc. 16

18 CCC Is Managing Significant Cost Increases Raw materials and energy costs for production of activated carbon have increased significantly Coal Pitch Natural Gas All activated carbon manufacturers are experiencing cost increases - including the Chinese CCC is better positioned to manage cost increases Long-term coal supply contracts Hedging natural gas Tariffs on certain carbons imported from China CCC has successfully passed cost escalation to customers CCC is well positioned against competing technologies Price increase in Europe effective 11/15/08 Price Increase in U.S. effective 12/01/08 Price increase in Asia to follow increase in U.S. 17

19 Thank You Making Water and Air Safer and Cleaner 18