Koppers Holdings Inc. Q1 FY2026 earnings call

• Announced conditional decision to wind down production at Stickney, Illinois facility with pre-tax charges of $227 - $262 million through 2029. Tentatively targeting Q4 2026 to shift production to Newburgh, Denmark. - First quarter adjusted EBITDA 49.3 million (10.8% margin), operating profit $22 million, adjusted earnings per share 57 cents. Operating cash flow 46.3 million, free cash flow 34.9 million. - 30 of 40 sites were accident free in first quarter. - Named Newsweek Magazine's 300-member listing of America's most charitable companies for 2026. - Hosting investor day on September 17th in Atlanta, with a tour on September 16th.

RUPs: First quarter sales $220 million (-6% vs prior year). Adjusted EBITDA $22 million (10.3% margin). PC: First quarter sales $142 million (+18% vs prior year). Adjusted EBITDA $26 million (18% margin). CM&C: First quarter sales $93 million (-7% vs prior year). Adjusted EBITDA $1 million (1% margin).

• Consolidated sales guidance remains 1.9 - 2.0 billion in 2026. - Adjusted EBITDA forecast lowered to 240 - 260 million in 2026. - Adjusted earnings per share range $3.80 - $4.60 per share. - Expect higher operating cash flow and free cash flow this year, representing new highs and inflection point for cash generation. - Forecast $55 million capital spending for 2026, consistent with 2025.

Challenging market conditions for CMC business, including higher oil prices impacting raw material costs and ability to pass on pricing. Aging equipment and reliability issues at Stickney facility leading to significant future capital requirements. Uncertainty in commodity markets and inflationary pressures affecting costs and pricing.

Q: Throughout narrative on looking forward in segments, how successful at driving price increases and lag?

A: Varies by business unit. Some changes in contracts for more flexibility. Fuel surcharges can be passed on with little lag. Larger raw material impacts on CM&C side have 1 - 6 months lag. PC side has ongoing discussions on contracts.

Q: With shifting production from Stickney to Nyborg, anticipate competitive disadvantage?

A: No, believe it improves reliability and competitiveness. NYBORG facility well-maintained with no reliability issues like Stickney. Already have mature logistics operation.

Q: On copper pricing, increase prices to customer with margin or competitive problem?

A: Will price to market. Margins fluctuate in 17% - 22% range. Will be competitive while working on new products.

Q: $10 million impact this year from increase in oil prices, rule of thumb for oil price move impact?

A: Not simple, but current situation with oil rising over $100 a barrel gives indication of sensitivity. Impact up to $10 million unmitigated over year.

Q: Future of CMC business, EBITDA margin target for 2027?

A: In line with overall consolidated margin target of 15% or greater.

Q: What drove PC sales growth and market share increase?

A: Market share win back from last year, additional market share from larger customers, product development, and sales team building relationships.

Q: With commodity market volatility, sense of competitors and M&A opportunities?

A: Three of four businesses have significant share with unlikely M&A due to antitrust. Only UIP side has opportunity for M&A, continue to monitor and evaluate.