Advansix Inc. · NYSE:ASIX
Advansix — Stifel Cross Sector Insight Conference 2019
19 slides from Advansix's conference presentation, Jun 10, 2019
Slide 1: Stifel Cross Sector Insight Conference
June 10, 2019 Stifel Cross Sector Insight 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 2018 Revenue Breakdown • NYSE: ASIX By Product By Region By End Market Coatings, • Spin-off from Honeywell: Asia: $43M EMEA: $25M Adhesives Other October 1, 2016 Chemical Nylon: LatAm/Canada: Packagin
Slide 4: Portfolio Overview
Portfolio Overview 4 Leading North American Position Across Industries Served Nylon Ammonium Sulfate Chemical Intermediates Vertically integrated producer with Key co-product portfolio delivers on Chemical products derived from the Description industry-leading cost position sulfur nutrition value pr
Slide 5: Investment Highlights
Investment Highlights 5 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 6: Vertically Integrated Manufacturing Sites
Vertically Integrated Manufacturing Sites 6 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 7: Sustainable Lowest Cost Position
Sustainable Lowest Cost Position 7 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 8: Safe And Stable Operations Roadmap
1 Safe And Stable Operations Roadmap 8 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 Rel
Slide 9: Differentiated Product Growth
2 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
Slide 10: Cash Flow And Capital Deployment
3 Cash Flow And Capital Deployment 10 Maturing Deployment Strategies Trailing 12-Month Cash Flow Capital Deployment Framework ($ Millions) • Internal reinvestment remains top priority 190 • Base capex to support safe and stable operations Capex • Executing against multi-year $150-$200M pipeline of 1
Slide 11: High-Return Capex Projects Initiated In 2018
3 High-Return Capex Projects Initiated In 2018 11 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 reliab
Slide 12: Full Year 2019 Outlook
Full Year 2019 Outlook 12 Expect Improved Performance in 2019 • Nylon: targeting strong nylon plant utilization rates while navigating through uncertain carpet and auto end markets Commercial • Ammonium Sulfate: nitrogen fertilizer environment expected to strengthen seasonally through Spring plantin
Slide 13: Appendix
Appendix AdvanSix
Slide 14: Nylon Industry Outlook
Nylon Industry Outlook 14 Macro Uncertainty for Carpet and Auto End Markets Nylon Key Industry Spreads (1) 1Q19 YoY 1Q19 vs. 4Q18 • Macro uncertainty for carpet and auto end markets Global Composite BNZ-CPL (9%) (9%) What We’re • China utilization rates continuing Asia BNZ-CPL (9%) (25%) Seeing to f
Slide 15: Nylon Films Strategic Alliance
Nylon Films Strategic Alliance 15 Capital Efficient and Highly Synergistic Combination to Meet Industry Needs Total ASIX Sales Films • 2018 Sales: ~$34M Chemical • Attractive long-term growth rates Intermediates Nylon Business Overview – Macro trend shift from rigid to flexible packaging • Manufactu
Slide 16: Ammonium Sulfate (AS) Industry Outlook
Ammonium Sulfate (AS) Industry Outlook 16 Nitrogen Fertilizer Environment Expected to Strengthen Seasonally Through Spring Planting Ammonium Sulfate Key Industry Prices (1) 1Q19 YoY 1Q19 vs. 4Q18 • AS price movement modest Corn Belt Granular AS 0% (3%) relative to recent nitrogen pricing Corn Belt U
Slide 17: Chemical Intermediates Industry Outlook
Chemical Intermediates Industry Outlook 17 Global Acetone Supply Continuing to Lengthen Chemical Intermediates Key Industry Prices (1) 1Q19 YoY 1Q19 vs. 4Q18 • Acetone imports and soft Acetone, Small/Medium Buyer (32%) (20%) downstream demand pressuring regional pricing – industry Acetone, Large Buy
Slide 18: Capital Expenditures
Capital Expenditures 18 Execution of High-Return Growth and Cost Savings 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
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
AdvanSix — Stifel Cross Sector Insight Conference 2019 on 6ix