Advansix Inc. · NYSE:ASIX
Advansix — Investor Presentation (March 2019)
23 slides from Advansix's investor presentation, March 2019
Slide 1: AdvanSix Investor Presentation
March 2019 AdvanSix Investor Presentation
Slide 2: Forward Looking Statements
Forward Looking Statements 2 This presentation contains certain statements that may be deemed “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, that address activities, events o
Slide 3: AdvanSix At A Glance
AdvanSix At A Glance 3 AdvanSix is a Leading Producer of Nylon 6 and Intermediate Chemicals Profile 2018 Revenue Breakdown • NYSE: ASIX By Product By Region By End Market • Spin-off from Honeywell: Asia: $43M EMEA: $25M Coatings, Other Adhesives October 1, 2016 Chemical Nylon: LatAm/Canada: Intermed
Slide 4: Investment Highlights
Investment Highlights 4 Sustainable Low Cost Position • Vertical integration and scale • Advantaged location – raw materials, access to high value end markets • Co-product net back optimization Diverse Revenue Sources And Strong Customer Relationships With Global Reach • Three product lines serving
Slide 5: Vertically Integrated Manufacturing Sites
Vertically Integrated Manufacturing Sites 5 Competitive Advantage Derived from Significant Scale, Integration and Diverse Revenue Streams Frankford Plant Hopewell Plant Chesterfield Plant Cumene is converted into Phenol, 75%-80% of Phenol produced at ~60% of the Caprolactam produced Acetone & Alpha-
Slide 6: Sustainable Lowest Cost Position
Sustainable Lowest Cost Position 6 Vertical Integration • Fully backward integrated into several key feedstock materials Global Caprolactam Supply / Cost Landscape • One of world’s largest single-site producers of Global Demand Overcapacity Industry- Caprolactam Leading • Significant operating lever
Slide 7: Safe And Stable Operations Roadmap
Safe And Stable Operations Roadmap 7 Multi-year Focus to Drive Stability and Higher Returns Asset Risk Matrix (ARM) Reliability Control Plans (RCP) • Maturing mechanical integrity program Risk Assess Execute Leverage ID Perform • Increased focus on Rank Failure RCP Tracking Assets RCPs Actions Relia
Slide 8: High-Return Capex Projects Initiated In 2018
High-Return Capex Projects Initiated In 2018 8 Improving Output, Quality and Energy Efficiency at Hopewell Project Overviews and Benefits Project #1 Project #2 • Making Hopewell facility more energy • Adding additional equipment to efficient – replacing coal-fired steam Hopewell to support reliabili
Slide 9: Differentiated Product Growth
Differentiated Product Growth 9 Innovation Key to Future Growth and Profit Margin Lift Differentiated Product Sales Differentiated Products Characteristics Driving value and growth above base offerings High-Purity Applications 1.5x – 2x gross margin vs. company average Penetrating high-value e
Slide 10: 4Q 2018 Earnings Recap
4Q 2018 Earnings Recap ADVANSIX
Slide 11: 4Q 2018 Financial Summary
4Q 2018 Financial Summary 11 Strong Cash Flow Generation Funding High-Return Capex ($ Millions, Except Per Share Amounts) 4Q 2017 4Q 2018 Comments • Sales Up 4%: Volume +5%, Price (1%) Sales $370.4 $386.6 Quarterly EBITDA Considerations – Raw Material Pass Through (4%), Market Pricing +3% 4Q17 4Q18
Slide 12: Nylon Industry Outlook
Nylon Industry Outlook 12 Industry Pricing Adjusting to Lower Input Environment Nylon Key Industry Spreads (1) • North America supply/demand 4Q18 YoY 4Q18 vs. 3Q18 generally in balance Global Composite BNZ-CPL 2% (1%) What We’re • Macro uncertainty for auto and Asia BNZ-CPL 19% 10% Seeing building/c
Slide 13: Ammonium Sulfate (AS) Industry Outlook
Ammonium Sulfate (AS) Industry Outlook 13 Expect Improved Nitrogen Fertilizer Environment Through Spring Planting Season Ammonium Sulfate Key Industry Prices (1) • AS price movement modest 4Q18 YoY 4Q18 vs. 3Q18 relative to recent nitrogen pricing Corn Belt Granular AS 11% 6% Corn Belt Urea 22% 9% W
Slide 14: Chemical Intermediates Industry Outlook
Chemical Intermediates Industry Outlook 14 Acetone Oversupply Pressuring Price/Raws Spread Chemical Intermediates Key Industry Prices (1) • Acetone imports in U.S. 4Q18 YoY 4Q18 vs. 3Q18 pressuring regional pricing – Acetone, Small/Medium Buyer (24%) (16%) industry oversupply continues Acetone, Larg
Slide 15: Capital Expenditures
Capital Expenditures 15 Execution of High-Return Growth and Cost Saving Projects in 2019 Growth/Cost Savings $140-$150M • Executing against multi-year $150-$200M pipeline of high- return projects; 20%+ IRR target $109M ~33% ~2018 Levels • Relocation of R&D lab to Chesterfield from Colonial Heights a
Slide 16: Full Year 2019 Outlook
Full Year 2019 Outlook 16 Expect Improved Performance in 2019 • Nylon: expect strong nylon plant utilization rates to continue while navigating through more uncertain near-term auto and building/construction macro environment • Ammonium Sulfate: expect improved nitrogen fertilizer environment to con
Slide 17: Appendix
Appendix ADVANSIX
Slide 18: Full Year 2018 Financial Summary
Full Year 2018 Financial Summary 18 Strong Cash Flow Generation, Improved Market-Based Pricing ($ Millions, Except Per Share Amounts) FY 2017 FY 2018 Comments • Sales Up 3%: Volume (2%), Price +5% Sales $1,475.2 $1,515.0 – Raw Material Pass Through +3%, Market Pricing +2% EBITDA $200.8 $146.5 • FY18
Slide 19: Planned Plant Turnarounds
Planned Plant Turnarounds 19 Pre-Tax Income Impact by Quarter (1) 1Q 2Q 3Q 4Q FY 2017 -- ~$10M ~$4M ~$20M ~$34M 2018 ~$2M ~$10M ~$30M -- ~$42M 2019E -- ~$5M ~$5M $25-$30M $35-$40M In-line with 2020E -- -- historical averages • Timing driven by compliance, inspection and sustaining asset base • C
Slide 20: Non-GAAP Reconciliations
20 Non-GAAP Reconciliations
Slide 21: Reconciliation Of Net Cash Provided By Operating Activities To Free Cash Flow
Reconciliation Of Net Cash Provided By Operating 21 Activities To Free Cash Flow (in $ thousands) (1) Free cash flow is a non-GAAP measure defined as Net cash provided by operating activities less Expenditures for property, plant and equipment The Company believes that this metric is useful to inves
Slide 22: Reconciliation Of Net Income To EBITDA
Reconciliation Of Net Income To EBITDA 22 (in $ thousands) (2) EBITDA is a non-GAAP measure defined as Net Income before Interest, Income Taxes, Depreciation and Amortization (3) EBITDA margin is defined as EBITDA divided by Sales The Company believes these non-GAAP financial measures provide meanin
Slide 23: Reconciliation Of Net Income And Diluted EPS Excluding One-Time Net Tax Benefit
Reconciliation Of Net Income And Diluted EPS To Net Income 23 and Diluted EPS Excluding One-Time Net Tax Benefit (in $ thousands) (4) Reflects net tax benefits primarily related to re-measurement of net deferred tax liability at a lower corporate tax rate pursuant to 2017 Tax Act The Company believe