Exhibit 99.1
Calgon Carbon CorporationKeyBanc Basic Materials &Packaging ConferenceSeptember 10, 2013
Forward-Looking Information Safe Harbor This news release contains historical information and forward-looking statements. Forward-looking statements typically contain words such as “expect,” “believe,” “estimate,” “anticipate,” or similar words indicating that future outcomes are uncertain. 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 the company’s most recent Annual Report pursuant to the “safe harbor” provision of the Private Securities Litigation Reform Act of 1995. 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. Some of the factors that could affect future performance of the company are changes in, or delays in the implementation of, regulations that cause a market for our products, acquisitions, higher energy and raw material costs, costs of imports and related tariffs, labor relations, capital and environmental requirements, changes in foreign currency exchange rates, borrowing restrictions, validity of patents and other intellectual property, and pension costs. In the context of the forward-looking information provided in this news release, please refer to the discussions of risk factors and other information detailed in, as well as the other information contained in the company’s most recent Annual Report.
Agenda Overview of Calgon Carbon Corporation Major Growth Opportunities Corporate Initiatives 3
4 Calgon Carbon Corporation (NYSE:CCC) is a global manufacturer and supplier of activated carbon and innovative treatment systems. We provide value-added technologies and services for optimizing production processes and safely purifying water and air.Headquartered in Pittsburgh, Pennsylvania, Calgon Carbon Corporation employs approximately 1,100 people at 18 manufacturing, reactivation, and equipment facilities in the U. S., Asia, and in Europe.
Corporate Overview Headquarters in Pittsburgh, PennsylvaniaBusiness regionsAmericasAsiaEMEA (Europe, Middle East, Africa)Facilities8 Production sites10 Reactivation sites (+ one under renovation)5 R&D or technical support centers Sales: $562MM (2012)Employees: ~ 1,100 5
Global Locations Feluy, BE Pittsburgh, PA Production site Reactivation site R&D, Technical support Singapore 6
CCC NYSE Pittsburgh Coke & Chemicals Calgon Carbon Corporation History 1902 1st commercial production 1940 1968 Merck & Calgon Corporation merge 1985 CCC formed by MBO 1991 2004 CCC acquires Barnebey & Sutcliffe Calgon Carbon Japan 2010 1996 UV Hyde Marine 7
Calgon Carbon offers a Wide Range of Products and Services Consumer Activated Carbon Reactivation Equipment Technologies Support Services
CCC Products and Services (2012) 9 Activated Carbon Reactivation Equipment Technologies Consumer $486MM(86%) $66MM(12%) $10MM(2%)
We sell into more than 600 Applications Home water Drinking water Sweeteners Ships Glycerine Citric acid Swimming pool Energy Utilities Respirators 10
Au recovery Metal recovery Petrochemicals Landfill Leachatte Wastewater Treatment Catalyst NuclearIndustry 11
12 Breakdown of the Many Diverse Markets Using our Products in 2012 12
Key Drivers for Improved, Sustainable Shareholder Value Creation 2013 2014 2015 2016 2017 $30 MM Cost Savings Programs (Phases I-III) Ballast Water Retro-fit Market for Guardian Treatment Systems Rapidly Expands Implementation of Strategic Growth Initiatives (CAPEX) DBP Market Growth in Municipal MATS Ruling will have Significant Positive Effect on PAC Sales
The focus at Calgon Carbon is growing our traditional businesses while capitalizing on emerging regulation-driven growth markets 14 Emerging Markets include: - Disinfection Byproduct Control- Municipal Drinking Water - Mercury Removal from Coal-Fired Power Plants - Ballast Water Treatment
Growth Opportunities with Emerging Markets 2013 – 2020 15
Control of Disinfection Byproducts (DBP) in Municipal Drinking Water Market Size:70M lbs./year expected by 2015 + EquipmentMarket Driver:U.S. EPA regulationDBPs formed when chlorine reacts with naturally occurring matter in drinking waterDBPs increase health risks: cancer/reproductive and developmental effectsStage 2 Disinfectants and Disinfection Byproduct Rule promulgated in 2006 mandates control of DBPs (Compliance: 2013 – 2015)CCC Solution:Granular Activated Carbon (GAC) + ReactivationExcellent application for GACCCC global leader in GAC production and reactivationCost: $6.00/year per family 16
17 GAC for DBP Removal
Control of Disinfection Byproducts (DBP) in Municipal Drinking Water (Cont’d) Competing Technology – Chloramine (chlorine and ammonia)Lower cost than chlorine/carbonProduces unregulated DBPsCitizens groups protesting chloramine use due to health risksRecent Activity:Contract with Phoenix, Arizona for GAC and Reactivation2011: Supplied 16 MM lbs. GAC for DBP control2012: 10-year reactivation contract (approximately 11 MM lbs. per year)Q1 2013: CCC completed reactivation facility near PhoenixCCC owns and operates2012: 10-year reactivation contract with Scottsdale, ArizonaIn discussions with Glendale, Arizona for long-term reactivation contract 18
Mercury Removal from Power Plant Flue Gas Market Size:380-765 MM lbs. per year Powdered Activated Carbon (PAC) expected by 2015/2016Market Driver:Regulations in U.S. and Canada17 states and certain Canadian provinces currently regulate mercury removalCurrent market > 160 MM lbs. PACCCC supplying PAC to more than 45 unitsU.S. EPA’s Utility Mercury and Air Toxics Standards (MATS) Mandates approximately 90% mercury reduction Q2 12 court vacated Cross-State Air Pollution Rule (CSAPR) - NOx and SO2 removalCompliance:State and Provincial regulations currently in effect, and U.S. EPA regulations effective 2015 (States can grant one-year extension) 19
20 PAC Injection for Mercury Removal
Mercury Removal from Power Plant Flue Gas (Cont’d) Calgon Carbon Product:FLUEPAC® Advanced PAC productsReduce carbon consumption by 50% or morePatents pending> 20 successful full-scale trialsFirst contract 2011Q1 2013: 2-year contract for first-generation FLUEPAC advanced products ($16MM-$22MM) 21
22 Why Ballast Water Treatment? The issue: Transfer of invasive species via ships’ ballast water
Ballast Water Disinfection – Largest Growth Opportunity for Calgon Carbon Expected Market Size:$28B (64,000 ships New and Retrofits)*Market Driver:RegulationsU.S. Coast Guard rule issued 3/23/12International Maritime Organization regulations pendingU.S. Coast Guard (USCG) Compliance:New ShipsKeel laid after 12/1/13 – at deliveryRetrofits2014 – 2020 23 *Internal Estimate – Systems only
Ballast Water Disinfection – Largest Growth Opportunity for Calgon Carbon (cont.) U.S. Coast Guard (USCG) Compliance (cont):Q2 2013: US Coast Guard issued Hyde Marine and nine other suppliers Alternative Management System (AMS) CertificationMust have IMO Type Approval to qualify for AMSShips with AMS can discharge ballast water in U.S. ports for 5 years without USCG Type Approval 24
Ballast Water Disinfection – Largest Growth Opportunity for Calgon Carbon (Cont’d) Calgon Carbon Product:HYDE GUARDIAN® (Stack Disk Filtration + UV)Less maintenance than screen filtersFlexible FootprintLow operating costNo chemicalsHyde Guardian Sales:> 260 systems sold to date 25
2012 2015 2013 2014 2016 2017 Compliance Timing for Regulated Markets Stage 2 DBP- Schedule I* Stage 2 DBP- Schedule II **7/13 USCG- New BuildBWTS Req. Retrofit BWTSMid-sized ships>1,500m3 <5,000m3 MATS**** Coal Fired Utilities -60-75% of the Units4/16/15 All ships- BWTS Req. USCG MATS – 100% of the Units 4/16/16 *Utilities serving 100K+ Customers** Utilities Serving 50-99K Customers***Utilities Serving 10-49K Customers**** Mercury & Air Toxic Standards Stage 2 DBP- Schedule III***7/14 26
Additional Focus is on Expanding our Global Reactivation Capability 27
Global Reactivation Expansion 28 * Capacity utilization will increase as customers receive permits for transporting “hazardous” material.** Leased*** Includes idled capacity. Feluy Suzhou North Tonawanda Phoenix Subtotal Total Capacity 30 MM 15 MM 13 MM 25 MM 83 MM 230 MM*** Q2 2012 Q1 2013* 2014** Q2 2013 Facility Number Lbs. Actual / Estimated Startup
Reactivation: Attractive Alternative to Virgin GAC 29 Advantages For Customer Advantages For CCC Economic: Lower cost than virgin GAC Environmental: Reduces disposal requirements and liability Security of Supply Trouble-free Operation: Full-service from CCC Lower production costs: Coal and electricity Evironmental: Reduction in greenhouse gases vs. GAC production Lower cost to construct reactivation plant vs. GAC production plant Long-term Contracts = Predictale earnings stream
Anti-Dumping Tariff Update 2006:Tariffs first imposed by International Trade Commission on Chinese activated carbon imports to U.S. Periodic reviews by Department of Commerce can change tariff rateCurrent Average Tariff Rate changed from $0.13/lb. to $0.47/lb. (Nov. 2012)CCC’s current tariff rate: $0.00/lb.U.S. International Trade Commission announced (Feb. 2013) that anti-dumping order will remain in effect until at least 2017. 30
31 Corporate Initiatives
Comprehensive Approach to Shareholder Value Creation Executing worldwide cost and profit improvement programTransforming company into a leaner, higher-performance enterprise and improving profitability through three-part, $30MM cost improvement effortReengineering organizational structureCentralizing sales, marketing, and product management activities in order to sharpen focus on key markets and optimize opportunities for long-term growth 32
Comprehensive Approach to Shareholder Value Creation (cont.) Aggressively managing balance sheetReturning capital to shareholders through $100MM Board-approved share repurchase program, of which $50MM is via an ASR plan which will be completed no later than September 30, 2013 33 Goal: Improve near-term performance in the face of challenging industry conditions and provide strong foundation for accelerated growth once scheduled regulations are enacted.
Phase I Cost Improvements 34 Permanent Staff Reductions $5.3MM Operational Improvements at Pearl River $3.6MM Closure of Datong Facility $0.6MM Reduction in R&D Spending $0.5MM TOTAL $10.0MM
Phase II Cost Improvements 35 Product Rationalization $2.5MM Organization/Staffing $1.0-2.0MM Global Procurement/Warehousing $3.0+MM Transportation $3.0-4.0MM
Phase III Cost Improvements 36 Cost Improvement Targets – All phases Implemented by 2014 Target cost improvements - $30MM IT Re-engineering Third-party plant efficiency study New investment projects/process improvement Long-Term coal supply
Selected First Half Financial Data 37 Sales Gross Profit (Pre D&A) Selling, Admin, & Research Net Income Fully Diluted EPS EBITDA 2013 % of Sales 2012 % of Sales $275.5 89.0 39.8 $22.8 $0.42 48.1 32.3% 14.4% 8.3% 17.5% $285.0 88.7 47.0 $18.6 $0.33 40.9 31.1% 16.5% 6.5% 14.4%
A Global Leader in Water and Air Purification Experienced team of professionals providing exceptional products and services around the worldBroadest range of activated carbon offeringsMajor supplier of UV-technology for water treatmentGlobal leader in environmentally friendly, cost effective carbon reactivation servicesProvider of Ion Exchange systems for the removal of perchlorate and nitrates in waterLeading position in growing regulation-driven markets for water and airProvider of leading-edge proprietary FLUEPAC® carbons for mercury removal Positioned to Deliver Financial Performance
Thank You! 39