Advansix Inc. · NYSE:ASIX
Advansix — Baird Industrial Conference 2018
18 slides from Advansix's conference presentation, Nov 6, 2018
Slide 1: Baird Industrial Conference
November 6, 2018 Baird Industrial Conference Michael Preston, SVP and CFO
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 2017 Revenue Breakdown • NYSE: ASIX By Product By Region By End Market • Spin-off from Honeywell: Asia: $58M EMEA: $46M 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: Nylon Overview
Nylon Overview 7 Leading Vertically Integrated Nylon 6 Producer Highlights Business Characteristics • Nylon 6 Demand Growth In-Line With GDP % of 2017 Total ~48% – Engineered plastics and packaging faster growing segments Revenue • Caprolactam (Flake and Molten) • Nylon 6 Resin • Industry Operating
Slide 8: Ammonium Sulfate Overview
Ammonium Sulfate Overview 8 Key Co-Product Portfolio Delivers On Sulfur Nutrition Value Proposition Highlights Business Characteristics • Ammonium Sulfate ~5% of Nitrogen Fertilizer Market % of 2017 Total ~19% Revenue – Urea has underlying influence on all nitrogen nutrient products, but Ammonium Su
Slide 9: Chemical Intermediates Overview
Chemical Intermediates Overview 9 Range of Portfolio Enables Diversity of Revenue Sources Highlights Business Characteristics % of 2017 Total • Manufacture, Market and Sell Chemical Products Derived Revenue ~33% From the Processes Within our Integrated Chain • Acetone • Alpha-Methylstyrene – Integra
Slide 10: Operational Considerations
Operational Considerations 10 Capex Driving Higher Returns; Quarterly Linearity of Planned Turnarounds Capital Expenditures Planned Plant Turnarounds • Timing driven by compliance, inspection and sustaining ~$110M asset base Expect continued Growth/Cost ~32% acceleration of high- • Critical to suppo
Slide 11: Cash Flow And Capital Deployment
Cash Flow And Capital Deployment 11 Maturing Deployment Strategies Trailing 12-Month Cash Flow Capital Deployment Framework ($ Millions) • Internal reinvestment remains top priority 170 • Base capex to support safe and stable operations Capex • Executing against multi-year $150-$200M pipeline of 150
Slide 12: 4Q18 / 2019 Outlook
4Q18 / 2019 Outlook 12 Several Tailwinds Expected in 2019, Acetone Industry Softness Persists 4Q18 2019 Trend • North America supply/demand to remain in balance • Current favorable industry conditions expected to Nylon • Continued dynamic China supply environment into continue Stable Winter months A
Slide 13: Appendix
Appendix ADVANSIX
Slide 14: AdvanSix Chemistry
AdvanSix Chemistry 14 Nylon 6, a Downstream Petrochemical Value Chain Frankford Facility Hopewell Facility Chesterfield Facility CH3 CH3 OH O O H N O H N CH2 CH2 C 1 CH2 CH2 CH2 n Benzene 1 1 1 1 +O2 +H2 Cumene Phenol Cyclohexanone Caprolactam Nylon 6 2 Propylene Ammonia Oleum 3 CH3 CH2 Acetone α-Me
Slide 15: Pricing Mechanisms
Pricing Mechanisms 15 Mitigate Commodity Price Risk Through Formula Price Agreements 2017 Sales By Product ~50% Formula / Index Pricing • Pricing Linked to Input Raw Materials and/or Published Industry Indices • Moves in Underlying Raw Materials Typically in Tandem With Sales Price Chemical • “Ad
Slide 16: Nylon Industry Outlook
Nylon Industry Outlook 16 Industry Operating Around Marginal Producer Economics Nylon Key Industry Spreads (1) 3Q18 YoY 3Q18 vs. 2Q18 • North America supply/demand Global Composite BNZ-CPL 14% 0% generally in balance What We’re Asia BNZ-CPL 39% 0% • Environmental policy and Asia CPL-Resin Seeing (3%
Slide 17: Ammonium Sulfate (AS) Industry Outlook
Ammonium Sulfate (AS) Industry Outlook 17 Improved Industry Dynamics as New ’18/’19 Season Begins Ammonium Sulfate Key Industry Prices (1) • AS price movement modest 3Q18 YoY 3Q18 vs. 2Q18 relative to recent nitrogen pricing Corn Belt Granular AS 14% 0% Corn Belt Urea 28% 11% What We’re • Firm globa
Slide 18: Chemical Intermediates Industry Outlook
Chemical Intermediates Industry Outlook 18 Acetone Oversupply Pressuring Price/Raws Spread Chemical Intermediates Key Industry Prices (1) 3Q18 YoY 3Q18 vs. 2Q18 • Acetone imports in U.S. Acetone, Small/Medium Buyer 0% 6% pressuring regional pricing – Acetone, Large Buyer 23% 10% What We’re industry