Koppers Holdings Inc. (KOP) Earnings Call Transcript & Summary

Thanks. Good morning, everyone. I'm Quynh McGuire, I'm the Vice President of Investor Relations for Koppers and welcome to today's 2026 Koppers' Investor Day. We appreciate that you're joining us, and we look forward to sharing our story today. We've posted materials to the Investor Relations page of our website. at www.koppers.com that will be referenced in today's discussion. This event is being broadcast live on our website, and a recording will be available for replay for 1 year. Before we begin, I'd like to note that today's discussion will include forward-looking statements. Certain comments made today may be characterized as forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a number of assumptions, risks and uncertainties, including risks described in the cautionary statement included in our presentation and in the company's filings with the Securities and Exchange Commission. In light of the significant uncertainties inherent in the forward-looking statements included in the company's comments, you should not regard the inclusion of such information presentation that our objectives, plans and projected results will be achieved. The company's actual results, performance or achievements may differ materially from those expressed in or implied by such forward-looking statements. The company assumes no obligation to update any forward-looking statements made during today's discussion. References may also be made to certain non-GAAP financial measures. The company's presentation, which is available on our website, contains reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures. And I'll now turn the discussion over to Leroy, our CEO of Koppers.

Okay. Fantastic. Thank you, Quynh. I appreciate that. I want to start off by welcoming everybody that's in the room here today as well as those who have decided to join us virtually to Koppers' 2026 Investor Day. Now for those I haven't met, I'm Leroy Ball, CEO and Board Chair of Koppers, and I recently enjoyed my 16-year anniversary with Koppers, having joined the company in September of 2010 at first the Chief Financial Officer before stepping into the role of in January of 2015. As we gather here today in mid-September at the start of a new college and professional football season, I'm reminded that a few things that capture the power of hope quite like the beginning of a new season. Every team starts with a clean slate and a renewed belief in what might be possible. Yes, there I say even Cleveland Browns. And I hope we don't have any Brown's fans in the audience here today. But, there's hope that the lessons learned from past setbacks have made us wiser and stronger and hope that the countless hours of preparation, sacrifice and hard work will pay dividends when the moment of truth arrives. And hope that this could be the season when all that effort, discipline and perseverance finally come together to achieve something extraordinary. And that's what makes the start of a new season so exciting, right? Now as I step back and think about how the hope and excitement of a new season correlates to Koppers, I can't help but think that the same sense of possibility applies to us. We've learned from our challenges. We've strengthened our capabilities, and we've continued to invest in the future. And like every team taking the field this fall, we have every reason to believe that the work that we put in can translate into something special in a season ahead. And today, you'll hear from several members of our leadership team who will share important updates on our company. The progress we've made during what I would characterize as our preseason here in 2026 and our plans to achieve higher levels of performance in 2027 and '28. We laid the foundation, we put in the preparation. And now we're focused on converting that preparation into sustained execution that translates into superior results as we enter this next phase of our strategy. Now before we look ahead, however, I'd like to begin with a brief overview of Koppers for those who may be newer to our story. Koppers has evolved significantly over time. In 2014, we began transforming from a legacy carbon materials company and railroad company into a wood preservation technology leader through a series of strategic acquisitions. And these include what are now the cornerstone of our growth strategy, Performance Chemicals or what we refer to in shorthand as our PC business, and Utility and Industrial Products or UIP. Meanwhile, our two legacy businesses, Railroad Products and Services, also known as RPS and Carbon Materials and Chemicals, or CM&C, have been asked to step back in prominence to play a different role in our go-forward strategy, but they still remain an important part of our value creation story. Now you'll be hearing multiple references to these names and acronyms throughout this morning. Today, our 1,800 team members around the world provide wood preservation technologies, carbon compounds and services that support critical infrastructure. And guided by safety and sustainability, we help enable the movement of goods the delivery of power and connectivity and the creation of outdoor living spaces. Our products often operate behind the scenes, but their impact is everywhere. They help produce the aluminum that goes into the cars we drive and the airplanes that we fly on. They protect the crossties to keep rail networks moving the goods that power our economy. They preserve the utility poles that deliver electricity and support the communications infrastructure, connecting us to the digital world. And they protect the wood used in the deck, fences, docs and outdoor spaces that enhance everyday life. Simply put, Koppers helps build and preserve the infrastructure that keeps the world moving, connected and growing. And with that perspective in mind, let's get things underway with a look at today's agenda on Slide 2. Now I'm going to kick things off today with an overview of the company, which will include a summary of the portfolio transformation that has occurred during my time at the company as well as an update on Catalyst, the enterprise-wide transformation of our operating model that we launched in 2025 and of course, I will get into the rationale behind our 2028 strategic plan. Next, Stephanie Apostolou, our Chief Legal and Strategy Officer, will discuss in greater depth how we are executing our strategy, which is designed to enhance value creation for our shareholders. She'll then follow that up by moderating a discussion with our business leaders on the various initiatives that they're overseeing and their impact. Eric Brenner, our Chief Financial Officer and Treasurer, we'll then outline the financial framework supporting our strategy, including our path to 15% or higher adjusted EBITDA margins and $300 million of cumulative free cash flow through 2028. Then I'll return to wrap up and open the floor up for Q&A. All right. Quynh has already gone over the safe harbor statement, but I do want to say that everything here today leads back to a single unifying theme. We believe that Koppers is well positioned to accelerate performance and profitability, increase cash flow and deliver meaningful value for shareholders for years to come, and here's how. Slide 4 captures the investment thesis for Koppers in a single page. We've reshaped the portfolio. We've completed much of the heavy investment, and we've installed a more disciplined operating model. We are now positioned to convert that work into stronger margins, greater cash generation and higher shareholder returns. Now most recently, we launched Catalyst, our enterprise-wide operating model transformation. Catalyst is fundamentally changing how the we drive performance improvement across the organization by bringing greater structure discipline, accountability and transparency to how we identify, prioritize, resource, execute and measure improvement initiatives. And as a result, we've already seen a meaningful step change in cash flow generation, reaching levels well beyond anything previously achieved in our history. At the same time, we've sharpened our capital allocation approach, directing discretionary investments were the most attractive areas of our portfolio, particularly PC and UIP, while returning substantial capital to shareholders through dividends, share repurchases and debt reduction. Now taken together, these actions are creating a stronger, more resilient and more focused Koppers. And they're also establishing the foundation for what we believe will be the next phase of value creation, one that's characterized by stronger profitability, higher cash generation, disciplined capital deployment and increased returns to our shareholder base. If we move to Slide 5, I'm going to show you what I mean. To start, Koppers begins from a position of strength as a market leader in critical end markets. The diversity in our end markets is a strength that's often undervalued as our business risk is spread across several distinct end markets. It's this diversification that helps moderate the effects of downturns or disruptions in any one particular end market. The vertical integration of our chemical and with treatment business is another aspect of our model that is often misunderstood. As others in the treating industry have dealt with quality issues, we've been able to bring our direct chemical expertise to the table to assure customers that we have experts in-house to address their concerns. And I believe it has directly led to Koppers being the preferred supplier at several major customers. And with most major investments behind us, we're primed for a breakout with a little market tailwind. But even if markets remain subdued, we have a model that can still generate cash at a rate that is top tier with our cash flow yield comfortably in double digits at our current share price. Moving forward, each business uniquely contributes to copper's value creation strategy. With RPS growth being limited as a pure repair and replacement business, it's all about optimizing our cost to serve by maximizing the utilization of our asset base in order to maintain our leading market share and generate cash to deploy to PC, UIP and to shareholders. For CM&C, the end goal of driving maximum cash flow is the same as RPS, but we'll get there by better managing the inherent risk and volatility in the business that has experienced large swings in raw material costs over time and higher operating and capital costs for safety, environmental and plant reliability. PC and UIP are positioned as our higher growth, higher margin, less capital intensive businesses where we look to continue investing to earn greater market share that results in higher sales and increased profitability and cash. As PC and UIP grow to make up a greater proportion of our top line, our consolidated margins and free cash flow will expand in turn. Now if we drill down another layer on Slide 6, you can see more details on the four businesses across three segments, all of which will serve critical end markets or support essential infrastructure. And together, they provide a balanced platform for managing risk, strengthening our market position in our treating business and supporting a more diversified earnings base that smooths out the peaks and valleys of the economic cycle. As an example, our Performance Chemicals business is the recognized market leader in developing treatment solutions for the wood preservation industry, holding 139 patents, including the patent for [ MicroPro ], the current industry standard for residential lumber treatment. And clearly, the cornerstone of our portfolio, PC is a global business that generate a business in the U.S., but also as the leading utility pole supplier in Australia. With an attractive margin roulette insist does the bulk of its business in the U.S., but also as the leading utility pole supplier in Australia. With an attractive margin profile, our smallest geographic presence, and macro demand drivers that make this the largest growth opportunity in our portfolio, UIP is being targeted as a prime option for growth. Our Railroad Products and Services business is a major supplier of cross ties to all six Class 1 railroads as well as commercial rail customers. And while this will never be our highest margin business, I believe we can continue to optimize it by applying our catalyst principles, generate adequate returns and use the cash to fuel growth in PC and UIP. And finally, our Carbon Materials and Chemicals business serves most major aluminum producers in North America, Europe and Australia, while also operating as a key supplier of creosote in the North American rail crosstie industry. And with a structurally declining [ coke ] industry in developed countries, we've reached a point where our interest to about how we work together to remain viable for our customer base that relies so early on the key products that we supply, such as creosote and carbon pitch. We are the #1 or #2 player in most of our markets, which are heavily concentrated, and we maintain that position by delivering superior quality, service and safe operations. The journey to our current portfolio can be explained in three phases as the next slide will show. Slide 7 highlights more than a decade of deliberate actions that have transformed Koppers into the wood preservation technology leader of today. In 2014 to 2020 served as the portfolio transformation phase. We began to shift away from carbon products to focus on wood preservation first by acquiring [ Osmo ], which is now our Performance Chemicals business, and also [ Cox ] Industries, which is our Utility and Industrial Products business. And during this period, we closed or sold 8 of 11 CM&C facilities. We exited production in China and continue to prune the other parts of our underperforming portfolio by selling or shutting down five additional operating sites. Now the year before this transformation began, CM&C made up over 60% of our top line and over 50% of our adjusted EBITDA. And by the end of 2020, that has been flipped with PC and UIP making up over 50% of adjusted EBITDA and CM&C just over 20%. But this happened by adding leverage, which had been as high as 5.1x on a pro forma basis, but by the end of 2020 have been reduced to 3.5x. Now 2021 to 2025 was our expanded and optimized phase. And it was during this phase that we made heavy capital investments across all four businesses that have brought us to where we are today. We expanded service to higher-value carbon product markets by investing in enhanced carbon products line in CM&C Denmark while exiting the lower value phthalic anhydride business at our Stickney, Illinois plant. We bought a cross-tie procurement business, enabling us to increase profitability at our Canadian plant and built a new crosstie treating facility at North Little Rock, allowing us to close our Denver treating plant and consolidate production. We invested in our Louisville, Louisiana utility pole peeling and drying facility to better serve the Southwest market, then we acquired the Brown Wood Preserving utility pole business, which gave us greater access to the larger Midwest market and most recently acquired the Green Hill reload, a Doug for procurement business, which expanded UIP's product portfolio. Now key investments in our micronized copper production and the addition of [ DCUI ] to our industrial preservative portfolio, helped PC reach new heights and profitability before taking a step back in 2025 with the loss of some market share. Now we were on a path to reach our 2025 target of $300 million in adjusted EBITDA, but a combination of that PC market loss, the Russia and Ukraine conflict tariffs and a generally softer demand environment in PC and UIP prevented us ultimately from reaching that goal. It did not, however, stop us from doing what we do best, which is finding other ways to attack the challenges and thus, Catalyst was born. So as we move to the next phase of our strategy from 2026 forward, we plan to accelerate cash generation through Catalyst by capturing the full benefits of significant investments made during our expand and optimize phase. And that's what makes our investment story attractive. Since the major capital projects are complete, we can focus on for optimizing the portfolio and harvesting cash to reduce leverage and share count as we look patiently for opportunities to grow in PC and UIP. We exceeded our initial 2025 Catalyst target of $40 million in benefits by generating $46 million in total in that year. And in 2026, we're already delivering meaningful benefits and working capital improvements. And through PC and UIP, make up now 2/3 of our year-to-date adjusted EBITDA and just under half of our sales, and we expect those numbers to climb in the coming years. With a track record of actively managing our portfolio, Catalyst now provides the foundation for our next phase of profit optimization and cash generation. It's a really good story. If we turn to Slide 8, a we'll get deeper into that story. We can see how Catalyst is reshaping how we operate, make decisions and deliver results by identifying, evaluating and implementing ideas from across the organization we are strengthening our competitive position and increasing scalability. The early successes give us more confidence in this framework. And as I stand in front of you today, we're reaffirming our commitment to generate $90 million of benefits to annual adjusted EBITDA by the end of 2028 through a combination of commercial growth and cost savings which when added to the $46 million of benefits captured in 2025 would bring total Catalyst benefits from 2025 to 2028 to $136 million. Now beyond 2028, we'll continue incorporating Catalyst into our annual planning process to drive execution and improve performance. Now Catalyst is not a one and done cost reduction exercise as can be seen on Slide 9, it's how we do business across our operations, and it's delivering meaningful returns. We've identified initiatives expected to generate $90 million in recurring annual adjusted EBITDA by the end of 2028 across several key areas. In the category of commercial excellence, we are targeting to generate $40 million to $53 million of benefits by improving our right to win through a combination of rededicating ourselves to key customers, pricing actions, building out our network to open up new regional markets and adding technology to proteinosis team's effectiveness. The category of network rationalization, which is set to generate $15 million to $22 million of benefits always seems to get the most attention because it's the easiest to understand and monitor. We can see when production has stopped at one location, and we can just as easily tell when it's ramping up with another. We have been operating the plant consolidation playbook for a long time with our announcements this year that will be ceasing operations at [ Stickney, Florence and Vance ] just the latest in a long line of adjusting to changes in market conditions. Now the remaining categories of manufacturing, procurement and other cost savings are estimated to generate another $20 million to $30 million of annualized benefits. And the important point is that these, again, are recurring benefits measured against the consistent 2025 baseline, and they're helping to offset today's headwinds, which have been massive. To date, they've enabled us to combat the challenges of a stalled housing market, a pullback in crosstie replacements and unpredictable tariff environment, inflationary costs and a carbon products market upended by two wars while also still generating historic cash flow. The value of these initiatives should become visible as markets improve and the benefits flow through on top of a healthier earnings base. So now I want to take the opportunity on Slide 10 to dig a little deeper into an important Catalyst case study that epitomizes our mindset as we approach Catalyst, and that's that everything was fair game for evaluation. And with that in mind, we conducted a thorough review of our organization design, which was an exercise that had never been conducted before Koppers to my knowledge. And while the hard dollar benefit opportunity is important, I'm actually most excited by the doors that our redesigned organization opens for us to capture even greater value in the years to come. We designed the organization around five guiding principles: one, centralized where scale matters; two, streamline and simplify before adding resources; three, push down out or automate transactional work; four, invest -- or five, invest where capabilities create value and align for execution. Let me provide a couple of examples here. So a shining example of where we look to centralize where scale and standardization matter is in the financial planning and analysis or FP&A function. Our former structure at FP&A roles in some businesses, but not all, and where we had them, they reported into our business unit heads. Now this made FP&A reporting extremely difficult to standardize. So we were getting varying quality of information from each area and we had no consistent view of performance below the headline metrics that we'd point to across the enterprise. We've now addressed this with FP&A resources in each business that roll up to a corporate FP&A leader who can ensure that our One Koppers model is applied consistently across the enterprise and vastly improving the value of our reporting and analysis. Before the change, we had a handful of analysts that operated mostly independently, providing analysis that they thought important in a format of their choice. We now have a team of professionals that provide critical strategic decision support acting as a true partner to our business leaders while adding the value of efficiency, quality, governance and scalability that comes with a [indiscernible] function. Another example is where we are strengthening our capability or risk judgment and value matter -- as we benchmarked our spend across functions, we confirmed what we had long suspected, which is we've continually underinvested in our IT resources over time. And as a result, we're leaving value on the table. In addition to investing in a new ERP platform that we're in the process of implementing, we've added roles to bridge the divide between the businesses and IT. Now this will enable us to derive the most out of our enhanced systems, while also adding AI and data enablement capabilities to help us harness the vast possibilities that exist to work smarter, faster, safer while also spending less to do it as we increase our levels of productivity. And the last example I'll leave you with is related to designing the organization for execution, not theoretical performance. And it's reflected in the change in responsibilities of the members of my team. Effective September 1, Stephanie Apostolou assumed the role of Chief Legal and Strategy Officer, adding oversight of Catalyst and our transformation office to her responsibilities with the rationale of creating a strong link between strategy and the execution elements connected to Catalyst. At the same time, Jim Sullivan, who is overseeing Catalyst as our Chief Transformation Officer, has now shifted his focus to the restructuring and transformation of CM&C. Christian Nielsen continues to lead CM&C globally and manage day-to-day operations, but Jim is overseeing the sticky closure, the disposition of the remaining assets at Stickney and the evaluation of options to further reduce our risk and exposure in CM&C markets. There's no one else in our organization who has that depth of experience and the fact that I specifically asked Jim to take on these responsibilities demonstrates our commitment to designing the organization for execution. Finishing this off. Our CFO, Eric Brenner, has now added oversight of procurement and logistics to his responsibilities, which will bring a greater focus to process standardization and analytics. This will help to ensure that we're capturing the full value available across our supply chain and working capital while continuing to deliver value to our customers. Going through the org design was an intense 6-month process that has put us in a much better position to succeed. Responsibilities have been clarified. Key capabilities have been added, we're lacking. Roles have been better aligned to create value and an expectation of accountability for performance is now clearly understood throughout the company. So now I want to shift gears and give you a closer look at how each of our main businesses plan to maximize their operations to serve customers, generate results and contribute to a higher level of performance. So on Slide 11, I'll start with a video that features Doug Fenwick, our President of Performance Chemicals, who will discuss the customer relationships, technical expertise and market leadership to drive growth in his business. [Presentation]

Now Slide 12 shows that Performance Chemicals reported $544 million of revenue in 2025 and an 18.9% adjusted EBITDA margin. And as Doug stated, Performance Chemicals provides Kopper-based wood preservatives and fire [indiscernible] technologies, including [ MicroPro ], [ MicroShades ], [ DCUI ], [ CCA ] and [ FlamePro ] for residential, industrial and infrastructure end markets. Residential advantages driven primarily by repair and remodeling spending, which is driven by existing home sales and, to a lesser extent, new home construction. Obviously, the interest rate environment and consumer confidence have a lot to do with what is going on in this business and those markers haven't been in a great spot in quite some time. But the industrial drivers are healthier and as evidenced by what we're seeing in our utility business, and they're expected to remain that way over the next several years. Bottom line is if you've ever enjoyed a summer afternoon on a backyard deck chances are, you are walking across wood that's protected by PC treatment solutions. Our technical expertise engineering support and regulatory knowledge differentiate Koppers and help drive growth customer satisfaction and profitability. Now continuing to Slide 13. Next up is a video featuring Jason Bakk, our Vice President of Utility and Industrial Products, who will discuss the growth opportunities and competitive advantages driving this business. [Presentation]

Now as outlined on Slide 14, our UIP business generated $305 million of revenue in 2025, which was an increase of 5.2% year-over-year. UIP supplies pressure-treated transmission and distribution poles to electric and telecommunications utilities. And our integrated supply chain with preservatives produced internally by PC and CM&C, give UIP customers the added benefit of surety of supply. And it also provides us a friendly conduit to others in the industry, which, in many cases, provides an inside edge when it comes to considering consolidation opportunities. As a leading utility pole supplier in the U.S. and the largest utility pole supplier in Australia, UP is the one business where we hold less than 30% market share in our largest market. So we have an opportunity to grow through targeted expansion in geographies that we know well through our own businesses. In terms of pure market demand, grid modernization and AI-related power needs have created a multiyear growth opportunity, which we believe we can participate in, while also growing our footprint and capabilities to serve other parts of the U.S. And while the pace of data center development may vary, the underlying demand for grid expansion remains a compelling growth opportunity that isn't going away anytime soon. So next up on Slide 15 is Travis Gross, our Vice President of Railroad Products and Services and he's going to talk about the customer relationships, competitive strengths and strategic actions that drive this business forward. [Presentation]

So going to Slide 16, we see that RPS represents our test top line business at $622 million of revenue in 2025. And our product portfolio includes treated and untreated railroad crossties, [ railroad bars ] and crosstie recovery services, which serves several aspects of our customers' needs. Demand is driven by railroad maintenance of waste spending, which is recurring and replacement based rather than tied to new construction plus ongoing transit investment. Our customers include Class 1 short line in commercial railroads as well as transit systems, Class 1 railroads purchased approximately 70% of all crossties produced in the U.S. and Canada, and copper remains the largest supplier of crossties to the Class 1 railroads in North America, supplying all six. Key strengths include a strong quality system backstopped by wood preservative expertise, security of supply through internally sourced creosote and logistics advantages created by plants located on the rail lines of our customers. It may not be the most glamorous business, but it certainly remains one of the most essential for the transportation of goods and people. So let's move to Slide 17 for a video from Christian Nielsen, our Senior Vice President of Global Carbon Materials and Chemicals, who will speak to our plans for repositioning CM&C to streamline the footprint, derisk the business and reduce volatility. [Presentation]

Now on Slide 18, CM&C reported $409 million of revenue in 2025 and an 11.2% adjusted EBITDA margin. CM&C distills cold tar in acres, carbon pitch and specialty chemicals. And demand is driven by a diverse set of end markets, including railroad infrastructure, aluminum production, steel manufacturing and construction activity. We serve customers across North America, Europe and Australia through a flexible supply network. And now earlier this year, we announced the pending closure of our Stickney facility, and we're shifting production to our Newborn Denmark facility, which will continue to supply products to our North American customers. Key strengths include our position as a leading supplier of creosote, multiple sourcing options in vertically integrated operations. And through the actions that we're taking to streamline the business, we expect to significantly reduce production costs and improve cash generation. Even a legacy business like CM&C is finding new ways to operate more effectively, providing part of the foundational cash growth across the wider company. Now our business connects to and operates from our sustainability strategy as seen on Slide 19. And this strategy is built on a foundational pillars: people, planet and performance. And zero harm remains the cornerstone of our culture, placing the welfare of our people, the environment and the communities where we operate is our top priority. This continued focus on the health and safety of our people led to an all-time best safety rate in 2025. And we may be a little behind so far in 2026 in terms of leading activities and serious incidents, but even with fewer hours worked year-over-year, we're holding steady on our total recordable injury rate, which is a major achievement. Now this is a never-ending push for us as we constantly strive to get to our goal of 0. Additional training and renewed effort to drive environmental improvements are central to zero harm in 2026. Our proprietary environmental metric called TEIR, which stands for total environmental incident rate measures a combination of airborne and surface exceedences. And as Koppers' developed tool was fully implemented in 2026 to better understand our environmental performance and assess where we can improve. And while we're relatively mature on using data to drive safety decisions and improvements TEIR is our first step to reaching a similar level of maturity and performance on the environmental side. Our 2025 sustainability report issued in June details our 2030 sustainability strategy. And we are proud of the progress and recognition that Koppers has achieved to date. We intentionally focused on areas that could support sustainability imperatives while providing real business value. We believe we successfully threaded that needle to focus our strategy on the highest impact goals for 2030. Now everything I've discussed so far leads to a fundamental question, how do these actions translate into higher earnings and stronger cash flow? As shown on Slide 20, this bridge illustrates the path from our 2025 adjusted EBITDA to our directional earnings potential in 2028. And most importantly, we are not waiting for markets to recover. While market conditions will eventually improve, our plan does not depend on that outcome through commercial execution, cost actions, portfolio optimization and Catalyst-driven initiatives, we are taking action today that strengthen coppers and support our 2028 objectives. Now the earnings gap created by the contraction of the PC business is precisely what our 2028 strategic plan is designed to address through a combination of commercial execution market share recovery, product line rationalization and Catalyst-driven self-help initiatives, we believe we can restore that earnings power and create meaningful value for shareholders. And the key message I want you to take away is this: The majority of the earnings improvement reflected in our 2028 outlook is expected to come from actions within our control. Market recovery and pricing represent additional upside but not the foundation of the plan. And we spent a lot of time today discussing how we're improving the quality of our business, expanding margins, strengthening operating performance, but ultimately, value is created when those improvements translate into cash generation. After all, EBITDA is important, but cash is what provides flexibility. Cash is what allows us to reduce debt, return capital to shareholders and invest in the highest return opportunities. And as shown on Slide 21, our plan to generate stronger cash flow begins with streamlining our operations and enhancing our business mix. We're containing SG&A expenses, optimizing capital expenditures, reducing capital -- working capital requirements and maximizing cash generation from our CM&C and RPS businesses to be redeployed. With a clearer path to stronger cash generation, our focus shifts from creating cash to deploying it in a disciplined manner. And specifically, we intend to accelerate deleveraging through excess free cash flow, return capital to shareholders through dividends and opportunistic share repurchases, particularly while we believe our shares remain undervalued as they are today. And pursue adjacent growth opportunities by expanding PC and UIP into new markets and geographies where we see attractive risk-adjusted returns. And what I particularly like about this framework is that it's self-reinforcing. By improving our structure and business mix, we generate more cash. That cash then strengthens the balance sheet, support shareholder returns and fund attractive growth opportunities. Those investments in turn, further improve the quality and earnings power of the portfolio. Now the initiatives I reviewed are designed to produce measurable results, and here's what success looks like in 2028 as outlined on Slide 22. Adjusted EBITDA margins of 15% or higher, which reflects the benefits of our self-help initiatives and a stronger business mix. 3-year EPS CAGR of 10% or higher, which delivered sustained earnings growth for shareholders. Net leverage at or below 2.5x, which demonstrate continued balance sheet improvement. Free cash flow averaging $100 million annually or approximately $300 million over the '26 through '28 time period, providing the flexibility to invest in growth, reduce debt and return capital to shareholders. And PC and our RUPS business is targeted to represent 85% or more of the sales reflecting our intentional shift towards higher margin, more durable businesses. And taken together, these outcomes would represent a fundamentally stronger Koppers, a company with higher margins, stronger cash generation, greater financial flexibility and a portfolio positioned to create sustainable long-term value. So how do we get there? And the path forward is clear, as we can see on Slide 23. We are advancing a disciplined set of priorities designed to strengthen the business, improve performance, increase that financial flexibility and drive long-term value creation, and we're confident in our ability to deliver. The strategy is clear. The priorities are defined and our team is aligned and that brings me back to where I started today. Every new season begins with optimism, but championships aren't won on optimism alone, they're won through preparation, discipline, execution and relentless focus on the fundamentals. And over the past several years, we've strengthened our team, we've improved our capabilities, and we've built a playbook designed to create long-term value. The preseason work is almost behind us, and now it's time to take the field. The opportunity in front of us is significant, the strategy is clear. The groundwork has been laid. The Koppers team is ready. And as we enter the next phase of our journey, we believe our best season is still ahead of us. With that, I'm going to turn it over to Stephanie Apostolou, our Chief Legal and Strategy Officer. Stephanie?

Thank you, Leroy. Good morning, everyone. I'm Stephanie Apostolou, Koppers' Chief Legal and Strategy Officer. I've been with the company now for 15-plus years and my key responsibilities include legal, strategic planning, the Catalyst transformation office, risk management, engineering, sustainability and the zero harm functions. Today, as seen on Slide 24, I'll be taking you through Koppers strategy for focused value creation. It's a cohesive story explaining how we plan to create durable value across the portfolio with a targeted strategy for each of our segments. After that, I'm going to moderate a panel discussion where you can hear directly from our business leaders about the macro factors impacting each of their businesses, the opportunities we see ahead and how we're using catalyst to drive execution towards our 2028 goals. Now the strategy summarized here on Slide 25 are well underway and have begun to propel us towards those 2028 goals that Leroy just outlined. Our catalyst transformation program is the engine driving consistent execution across each segment and function in our business. And each segment has a targeted strategy. In Performance Chemicals, we're focusing on growth via new products and geographies. In UIP, we're looking for share gains and geographic expansion. RPS is maximizing cash flow through operational excellence. And CM&C is taking major actions to reduce risk volatility and cash requirements. These are four distinct plays under a single unified operating discipline, all driven by Catalysts and aims squarely at value creation. Now before we go into our panel, I want to take a high-level look at each business unit starting here with PC, where we see several exciting opportunities. First, PC is actively working on go-to-market plans for a number of new products. They have a next-generation residential wood preservative in the final stage of development and it offers improved performance and reduce [ copper ] dependency. PC is also developing fire-resistant infrastructure and building materials to meet rising demand driven by the increased prevalence of wildfires and new building code requirements out west. We're also looking to expand PC into new growth markets. And the first example of this is our brand-new Brazil CCA manufacturing facility, which is targeted to be complete in Q1 2027. We're also exploring adjacent chemistries and end markets that leverage PC's technical expertise in areas such as [ copper ], biocides and other wood products. Another differentiator for PC is its history of commercial excellence that provides for close customer relationships, which I'll explain more here as we get to Slide 27. So how does Koppers and PC win? This shows how we turn these opportunities into a competitive advantage, a PC. Our dedicated technical support and enhanced R&D capabilities deepen our partnerships by helping our customers solve product challenges and develop more cost-effective solutions. PC is not simply providing a preservative to their customers. They work with our customers on formulations, performance and process efficiency, and that deepens those core relationships and opens new opportunities. So as we're heading into these 2027 contract renewals at PC, we believe this track record of innovation and partnership also provides an opening to retain share with existing customers and then selectively pursue further share gains. These are just a few examples of growth built on innovation, geographic expansion and commercial excellence at PC and you're going to hear more details about this shortly in our panel discussion. Now I want to move on to UIP here on Slide 28. You see here that the U.S. wood pool market is projected to grow from about $2.2 billion in '22 and '23 to roughly $2.9 billion by 2028. And which is a 4.3% annual growth rate. We believe that Koppers stands in the #2 position in the U.S. wood pulp market with room to grow. Our primary opportunities for gaining share are concentrated mainly in the Midwest and Southwest markets in the U.S. And as you're going to hear in our discussion, we have deliberately built and bought new assets over the past several years that have established a network that allows UIP to effectively serve these markets. A growing market plus a fragmented customer base gives us a broad runway for share gain in UIP. We have the infrastructure in place to expand UIP's reach, and we're working hard to generate the sales needed to make our path into these new regions. Now RPS and CM&C are going to play a key role in generating cash flow over the next several years as we see here on Slide 29. A RPS now features an improved streamlined portfolio after the sale of our [ KRS ] Railroad Services group and the shift in our [ KRR ] business to a recovery-only model, both in 2025. In our core crosstie business, we're pursuing a strategy of reset and optimize as contracts with certain Class 1 customers come up for renewal or are open for renegotiation. And in addition, network optimizations are underway to increase utilization at our existing facilities as evidenced by the idling of our Florence plant, which we announced earlier this year. In CM&C, we're moving to reduce risk through footprint consolidation, with phthalic anhydride production being discontinued in 2025 and now all North American supply shifting to our Newborn Denmark facility as we proceed with the closure of our Stickney, Illinois plant which we announced earlier this year. We continue to expect the Stickney shutdown to generate the following benefits: $15 million to $20 million in annual adjusted EBITDA and $1 to $1.20 of annual adjusted EPS, $8 million to $15 million in lower CapEx, roughly 50% lower CM&C production costs versus 2024, and we've already seen record first half 2023 cash flow. Essentially, we're maximizing efficiency and reducing risk in RPS and CM&C to provide the foundational cash to allow us to invest in more aggressive growth opportunities in PC and UIP. So with that strategic framework established, I want to turn to our panel discussion featuring our four business leaders, I'm going to ask you all to please bear with us briefly as we bring them up and get this place set for our discussion. Thanks. All right. So please let me introduce you to today's panelists. I'm going to start on my far left. We have Jason Bakk, our Vice President of Utility and Industrial Products. Here immediately to my left, we have Doug Fenwick, President of PC. Over here on my right is Travis Gross, Vice President of RPS. And on my far right is Jim Sullivan, President of Koppers Inc. Thank you all for joining this morning. I want to start with the same question for each of you, and that is, if an investor looked at your business 3 years ago when we had our last Investor Day and compared it to today, what would be the biggest change they would see? Jason, let's start with you.

Sure. 3 years ago, investors would have seen UIP as a solid operating business with a focus on the Northeast and Southeast markets in the U.S., which, by the way, are two of the most competitive regions in North America. . Today, you would see a very different UIP than you would have 3 years ago. Koppers has invested heavily in UIP in its assets and its people in preparation for the demand growth we're expecting in the years to come.

Thanks, Jason. Doug, let's turn to you for that question.

Three years ago, I think PC would have been viewed as a very high-performing division of copper, very strong market positions. The shares we experienced in 2025 were both challenging and quite frankly, humbling it for us. We ultimately made us a better, stronger and more customer-focused company. Going forward. We're approaching the 27 contract negotiations with some real discipline and a commitment to deepening our partnerships. I believe we're positioned to be a long-term contributor to Koppers overall.

Great. Thanks, Doug. Travis, let's go to you next for that one.

Yes, I'd say 3 years ago, honestly, I think the investment community probably looked at RPS as an underperformer. I'm excited to say we've made a lot of meaningful changes in our operations. We're way more focused on customer economics, better project execution, improved network optimization. I think that discipline along with the investments that we've made, but it's in a much stronger position moving forward.

Thanks, Travis. Okay. Now Jim, for CM&C.

Yes, sure. 3 years ago, investors would have seen CM&C coming off 1 of its best years ever, actually. It was his best year since 2018. And -- but what was happening is we were facing some rapidly changing market dynamics. And those dynamics came in the form of reduced availability of our critical raw material under constant demand, which meant that costs went up. So you've already heard of some of the actions that we've taken. We've already shut down the phthalic anhydride plant and our Stickney, Illinois facility, and we've announced the closure of the entire plan effective at the end of this month, and that will help offset some of these headwinds.

Thanks, Jim. I want to pivot now to get each of your takes on some of the larger macroeconomic impacts hitting your business. So Doug, let's start with you. Tell us a bit about the markets where you play, how you see those evolving and how PC is positioned?

As Leroy mentioned in his presentation, we're a global player. We perform in almost every market around the globe. The current largest market for us is North America, and it's been relatively flat. We've been able to offset that by some share recapture in '26 and some new customer wins. We've been very proud of that. '27 Is going to be challenging. We've got some sustained copper inflation, raw material volatility, diesel pricing, et cetera. We've been talking to our customers since the spring, we historically started talking to them in September, October, and we've managed to put together a few contracts, we're satisfied with that, but still have some work ahead of us going forward. We're very well positioned though as far as our competition goes with our vertical copper integration, pricing discipline and our technical capabilities. That all supports our profitability and cash flow initiatives. Industrial growth, also, as Leroy mentioned, has helped offset the flat residential market. pole demand has been strong. outside of our main competitor, we've been able to wrap up almost every pole manufacturer across the country as well as our introduction of [ DCUI ]. Our new industrial preservative has been very profitable for the division.

Okay. Great. Thank you, Doug. I want to turn now to Jason. Jason, we've been clear that UIP is a business we want to grow moving forward. So why are you confident that the utility pole market can support attractive growth for an extended period of time?

Yes. Great question, Stephanie. First, I'd like to say like the demand drivers are durable. And I'll start with aging infrastructure. The average useful life of a wood utility pole is approximately 50 years, plus or minus. And there's a large group of holes right now in the U.S. that are either at the 50-year mark or a pass that need to be replaced simply because of their age. So that's a good tailwind for our business. And then you have grid hardening which is essentially the replacement small poles with larger, stronger poles. And this is being done in response to the increased storm activity that we've all experienced across the country. So another good tailwind to our business. And then finally is load growth. And this is, I think, the most important contributor to our -- what we expect to see as a growing business in the years ahead. Over the last 20 years, load growth in the U.S. has been essentially flat. And now we're starting to see it increase, and it's expected to increase 2% to 3% per year, up to 2030 and probably beyond. The main driver for this is what we're all reading in the news with AI and the build-out of data centers, but you also have other contributors to power consumption, like increased manufacturing, crypto, electrification of vehicles. again, all tailwinds for the business that we're excited about.

Thanks, Jason. I want to dig in a little deeper on that point. You mentioned data center demand. And how is that phenomenon impacting UIP specifically? Do you think it's real? Or is it overheated and hype? .

No, AI demand is real. It's not hype, and it's changing the infrastructure needs across the economy. Over the last 14 years, utilities have increased their spend on CapEx every year. Last year in 2025, that investment was somewhere north of $200 billion. So again, lots of investment, it's increasing, and we expect that trend to continue. Some prognosticators project $1.3 billion to $1.5 trillion of CapEx investment from utilities through 2030. It's a big number. And that's not a one-for-one translation into pole demand, but it signals the major scale and duration of the investment cycle that our customers are entering.

So is UIP seeing growth from that increased utility investment yet? .

Yes. I mean we're experiencing growth. We've -- we see strong demand right now. We have a very healthy backlog of orders. And like I said, utilities are preparing for the AI-driven load growth that again, we're all expecting in the years to come. There's also another important factor that helps drive CapEx investment with utilities. And that's the rate increase approval by public utility commissions. So a utility cannot increase rates to its customers, many of us without getting approval from these commissions. And so the trend we're seeing is that these public utility commissions are starting to approve rate increases. And that ultimately leads to more CapEx investment from the utility because they're able to generate more revenue. So again, another positive tailwind that we're seeing in our business. We have one Southeast customer who recently announced a $100 billion investment plan to build out infrastructure out to 2032, and that happened following an approval of a rate increase from a public utility commission. So again, the industry pattern is rate approvals from these commissions lead to higher CapEx plans for the public utilities.

And one last question for Jason on this point. So how much of the opportunity do you think is underlying market growth versus Koppers' taking share? And why should our investors believe that UIP can successfully take share from established competitors?

Right. Another good question. Well, first of all, the utility pole market is expected to grow 3% annually through 2030, which will result in UIP growing its revenue in the mid-single digits. As far as taking market share, UIP has operated in and continues to operate in the Southeast region of the United States, which is by far the most competitive region in the country and we've done it successfully. So we can take our assets and our knowledge and our experience that we've had in that we've had in the Southeast and use that to grow our business into the Midwest, into the Southwest and the Western states, which we've been doing and we'll continue to do now, especially with the growing demand. On top of that, we have multiple treating, peeling and drying facilities located in the heart of the Southern yellow pine wood basket. And we have a strong logistics and procurement system as well. So we've invested in all parts of the business in preparation for the expected demand. And we expect to continue to see growth from both the increase in volume and taking market share as we move into these new regions.

Thanks, Jason. That was a lot of great information, thanks. . So Travis, I want to turn to RPS now. So how should investors distinguish between the current environment you're seeing in the crosstie market and the long-term health of that market?

We're currently seeing softer crosstie demand, but in my 19 years, we have seen plenty of those purchasing cycles. So I would separate the timing of purchases from the underlying replacement need. Our customers may slow down those high purchases temporarily. But at the end of the day, they have to replace that tie. The tie is going to age, the track is going to wear. So ultimately, that maintenance has to happen for them to keep the network safe. So lower purchasing today may represent deferred maintenance. And typically, what we see with deferred maintenance is higher demand in the future. So we're on attempting to predict the future. We're focused on what we can control. open control is our cost, our inventory management and cash generation.

So what are you and your team doing operationally Travis to prepare for that potential uptick in demand in the future? .

Yes. So operationally, we're focused on staying flexible and disciplined. We're aligning our production with inventory with our current demand. We're reducing our working capital. We're managing our costs through actions like idling Florence. But we're keeping the network ready. Our investments like North Little Rock, that provides flexibility and capacity for our network. Catalyst provides a structure for that continuous improvement. And so when we see that deferred maintenance, create higher demand for our products in the future, we want to be ready to respond and convert that volume into cash.

Thanks, Travis. So Jim, let's talk about CM&C. You've got a number of external factors that continue to impact CM&C performance. How is copper is dealing with these variables?

Yes. So let's talk about the external factors first, none of which we can control. So there's three big ones, right? So the first one is the war in Europe. So the Ukraine-Russia war, what that did which took out a significant amount of raw material from that market. And the demand for that raw material never changed. So the costs have gone up. So that's been difficult. And then the other issue that we have on the external factors is a continual shift from -- in steelmaking production and technology. From basic oxygen furnace technology to produce steel, which produces coal tar to electric arc furnace technology, which just melt scrap steel, and there is no coal tar produced. So the availability of raw material in Europe and North America have gone down as a result of that. And once again, the demand has stayed the same, so the costs have gone up. And the final external factor is the conflict in the Middle East. So as everybody knows, the conflict in the Middle East has rapidly escalated fuel cost, oil cost. And why that's an issue for Koppers is that some of our raw material in certain regions is indexed directly to oil costs. As the oil cost goes up, our raw material goes up. And normally, that will self-sort, but it has happened so fast that we have not been able to pass on those costs in the way of pricing to our customers as of yet. Now to answer your question about what we're doing about it, so we've approached our customers and said, "Look, the past practice of having long-term pricing contracts, it's just got to end. The world is changing way too fast. We have to compress the timeline from when we can reset pricing." Now we are getting some -- making some ground on that, but we will have a chance to reset those contracts when it's time for them to renew. And the final thing that we're doing is we're accelerating or expediting the closure of our Stickney, Illinois facility. So we moved that up a number of months, and we're set to be ceased distillation operations at the end of this month.

Thanks, Jim. Doug, I want to go back to you. I want to hear a little bit more from you about how innovation deepens customer relationships and creates additional avenues for growth at PC.

Sure, Stephanie. Any of you that toured our facility yesterday, you can see our commitment to innovation, the investment that Koppers has made in that R&D center over the last couple of years is significant, and it's gone over very well with our customer base. Our customers really see us as Leroy and Stephanie both said, they see us as a partner and not really as a supply partner -- as a supplier, and that goes a long way in collaboration, working with them on formulation, performance, process efficiencies, et cetera. And that opens up adjacent markets, new projects that we talked about yesterday that was in particular one customer that brought us a project that [ Doug and Jim's ] Group has been working on for about a year now. That provides not only an adjacent marketplace for us, but additional market share growth of that particular customer. We've got a very strong runway right now in additives, fire retardants, formulations and industrial applications.

You also mentioned in your video, Doug, the forthcoming patent expiration for [ MicroPro ], which is PC's flagship residential product. How is PC preparing for that?

We're prepared. And again, we talked about this in our lab tour yesterday. That was one of the questions that came up. MicroPro has been around for around 20 years now. We've enjoyed some tremendous market growth with that. It is the known standard in North America. And while the patent expiration may create some new entrants believe capital, engineering expertise as well as regulatory barriers are going to create some real issues for anybody wanting to get into what's already an oversupplied market. In addition to that, as we talked about yesterday, we have our next patented product, MicroPro XP coming in right behind it. We did introduce it to customers this year. There's tremendous interest in the product, mainly because of the reduced copper retentions in it. But our customers, as I explained yesterday, are battling with price increases this year, and they just thought it was going to be too much in order to do both a price increase and a new product introduction. But we're excited about that product line for down the road, and it's going to give us a strong hold on the market to continue.

Thank you, Doug. Travis, let's go back to you I know your team continues to find ways to improve performance and drive operational excellence. Can you tell us a little bit about how Catalyst has changed the way you operate?

Yes. I mean, Catalyst has really changed the way that we look at our business every single day. We approach Catalyst process with a simple mindset, find small, fix small, keep building on it. So -- we know those big improvements don't just come from one big move. Where we see practical improvements show up in our business every day really across the business. So we know that one improvement may not move the needle with those repeated small improvements across the network really tend to add up. And that Catalyst process allows us to share those good ideas across the company. So kind of become more of a common operating language for us and a way for us to continue to improve.

Do you have any examples of where a rail catalyst idea created value somewhere else in Koppers?

Yes. I think a good example comes from our Roanoke, Virginia plant. So that facility was dealing with premature pump failures. And so instead of the team just saying, well, that's a cost of doing business. They asked a question. They said, "Well, how do we identify that these pumps have problems before they fail?" So we installed what we call aftermarket pump monitors. Those pump monitors provide us with real-time and historical performance data, and it lets us know when something doesn't look right, that obviously helps us catch issues a little bit earlier, but it helps us reduce the replacement cost as well, improve that operational reliability. So I think that's kind of a practical example of fine small fixed small, but that idea was generated within RPS, but we can -- we have the ability now through our catalyst process to share that throughout the company, and we've seen some of the benefits maybe like in Doug's business as well.

Yes, that was an interesting one. Engineering best practice really helped us at our Millington, Tennessee facility. We were having similar issues and are grinding in pump issues. And that best practice from Roanoke helped us install similar technology and eliminated some failures that we're having ahead of time as well.

Maybe move on now to Jim where you've got some major projects going on and changes Jim, pending the closure of Stickney, what benefits do you expect to realize?