Advansix Inc. · NYSE:ASIX
Advansix — Q3 2018 Earnings Presentation
15 slides from Advansix's earnings presentation, Nov 2, 2018
Slide 1: 3Q 2018 Earnings Presentation
November 2, 2018 3Q 2018 Earnings 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: Overview
Overview 3 • 3Q18 results: Sales $369M, up ~1%; EPS $0.18; Planned plant turnaround ~$30M pre-tax income impact, lower plant utilization rates • 3Q18 tax rate 4.0% – filing of 2017 tax return • Cash flow generation continues to improve: 3Q18 Cash flow from operations $51M, up 34%; 3Q18 YTD Cash flow
Slide 4: 3Q 2018 Financial Summary
3Q 2018 Financial Summary 4 Strong Cash Flow While Managing Through Planned Plant Turnaround ($ Millions, Except Per Share Amounts) 3Q 2017 3Q 2018 Comments • Sales Up ~1%: Volume (10%), Price +10% Sales $366.7 $368.7 – Raw Material Pass Through +10%, Market Pricing ~Flat • 3Q18 Planned Plant Turnar
Slide 5: Sequential EBITDA Performance (2Q18 to 3Q18)
Sequential EBITDA Performance (2Q18 3Q18) 5 Planned Plant Turnaround and Ammonium Sulfate Seasonality Key Sequential Drivers EBITDA ($M) Performance Considerations Planned Plant Turnaround • ~$30M in 3Q18 vs. ~$10M in 2Q18 • 3Q18 ammonia plant turnaround completed three days earlier than expected
Slide 6: Nylon Industry Outlook
Nylon Industry Outlook 6 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 7: Ammonium Sulfate (AS) Industry Outlook
Ammonium Sulfate (AS) Industry Outlook 7 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 global
Slide 8: Chemical Intermediates Industry Outlook
Chemical Intermediates Industry Outlook 8 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 o
Slide 9: Operational Considerations
Operational Considerations 9 Capex Driving Higher Returns; Quarterly Linearity of Planned Turnarounds Capital Expenditures Planned Plant Turnarounds • Timing driven by compliance, inspection and sustaining ~$110M asset base Expect continued Growth/Cost ~32% acceleration of high- • Critical to suppor
Slide 10: Cash Flow And Capital Deployment
Cash Flow And Capital Deployment 10 Maturing Deployment Strategies Trailing 12-Month Cash Flow Capital Deployment Framework ($ 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 11: 4Q18 / 2019 Outlook
4Q18 / 2019 Outlook 11 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 12: Appendix: Reconciliation of non-GAAP Measures to GAAP Measures
12 Appendix: Reconciliation of non-GAAP Measures to GAAP Measures 3Q 2018 Earnings Presentation – November 2, 2018
Slide 13: Reconciliation Of Net Cash Provided By Operating Activities To Free Cash Flow
Reconciliation Of Net Cash Provided By Operating 13 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 14: Reconciliation Of Net Income To EBITDA
Reconciliation Of Net Income To EBITDA 14 (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 15: Reconciliation Of Net Income To EBITDA
Reconciliation Of Net Income To EBITDA 15 (in $ thousands) (4) EBITDA is a non-GAAP measure defined as Net Income before Interest, Income Taxes, Depreciation and Amortization (5) EBITDA margin is defined as EBITDA divided by Sales The Company believes these non-GAAP financial measures provide meanin