Advansix Inc. · NYSE:ASIX
Advansix — Investor Presentation (May 2018)
26 slides from Advansix's investor presentation, May 2018
Slide 1: Investor Presentation May 2018
May 2018 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 Global Producer of Nylon 6 and Associated Products 2017 Revenue Breakdown Facilities and Employees By Product By Region 1 2 3 Asia: $58M EMEA: $46M Frankford, PA Hopewell, VA Chesterfield, VA Chemical Nylon: Intermediates: $423M LatAm/Canada: 12% Product
Slide 4: Diverse End Market Coverage
Diverse End Market Coverage 4 Mitigates Exposure to Any Single End-Use Application or Product Cycle ASIX Revenue By End Market Coatings, • Serving multiple end markets with attractive long- Adhesives & Binders Other term growth rates • Seasonality limited to Ammonium Sulfate application; mitigated b
Slide 5: Vertically Integrated Manufacturing Sites
Vertically Integrated Manufacturing Sites 5 Competitive Advantage Derived from Significant Scale, Integration and Diverse Revenue Streams Frankford Plant Hopewell Plant Chesterfield Plant Sulfur Cumene Phenol CPL Nylon • Second largest producer of Phenol • One of world’s largest single-site • Second
Slide 6: Sustainable Lowest Cost Position
Sustainable Lowest Cost Position 6 Vertical • Fully backward integrated into several key Integration feedstock materials Global Caprolactam Supply / Cost Landscape • One of world’s largest single-site producers Global Demand Overcapacity Industry- of Caprolactam Leading • Significant operating lever
Slide 7: Investment Highlights
Investment Highlights 7 • Sustainable Low Cost Position – Vertical Integration And Scale – Advantaged Location – Raw Materials, Access To High Value End Markets – Net Back Optimization • Diverse Revenue Sources And Strong Customer Relationships With Global Reach – Serving Multiple End Markets With A
Slide 8: Full Year 2017 Financial Summary
Full Year 2017 Financial Summary 8 Strong Volume, Earnings and Cash Flow With Record Safety Performance Sales EBITDA* Free Cash Flow ($M) +24% +109% +62% 1,475 201 48 1,192 30 96 2016 2017 2016 2017 2016 2017 Margin % 8.1% 13.6% • Volume +9% • Margin Up 550 bps • Operating Cash Flow +$21M • Market P
Slide 9: Cash Flow
Cash Flow 9 Maturing Deployment Strategies Trailing 12-Month Cash Flow Cash Generation and Deployment ($ Millions) • Improved free cash flow generation expected to continue – High plant operating rates; Driving higher-value product mix 170 – Efficient working capital performance – Amended credit fac
Slide 10: AdvanSix Strategy And Priorities
AdvanSix Strategy And Priorities 10 Well Positioned for Strong Operational and Financial Performance Over Long Term Focused Strategy Delivered In 2017 2018 Priorities • Rigorous commitment to Robust production output, sales • High operating rates to continue operational and HSE excellence volume u
Slide 11: 1Q 2018 Earnings Recap
1Q 2018 Earnings Recap ADVANSIX
Slide 12: 1Q 2018 Financial Summary
1Q 2018 Financial Summary 12 Strong Underlying Performance While Managing Through Weather-Related Event ($ Millions, Except Per Share Amounts) 1Q 2017 1Q 2018 Comments • Sales Down (5%): Volume (8%), Price +3% Sales $376.7 $359.2 – Market Pricing +2%, Raw Material Pass Through +1% – (9%) Unfavorable
Slide 13: Nylon Industry Outlook
Nylon Industry Outlook 13 Industry Spreads Fluctuating Near Marginal Producer Cost Nylon Key Industry Spreads (1) 1Q18 YoY 1Q18 vs. 4Q17 • North America supply/demand generally in balance following Global Composite BNZ-CPL 12% 3% industry outages Asia BNZ-CPL (6%) (1%) What We’re Asia CPL-Resin 4% 6
Slide 14: Ammonium Sulfate (AS) Industry Outlook
Ammonium Sulfate (AS) Industry Outlook 14 1Q Seasonal Improvement; Late Start to Planting Season Due to Weather Ammonium Sulfate Key Industry Prices (1) 1Q18 YoY 1Q18 vs. 4Q17 • Cold / wet weather in U.S. Corn Belt Granular AS 5% 8% driving late start to planting Corn Belt Urea 4% 5% What We’re seas
Slide 15: Chemical Intermediates Industry Outlook
Chemical Intermediates Industry Outlook 15 Stabilizing End Market Environment – Continuing to Track Input Costs Chemical Intermediates Key Industry Prices (1) 1Q18 YoY 1Q18 vs. 4Q17 • Global phenol demand strengthens Acetone, Large Buyer 1% (6%) What We’re Refinery Grade Propylene 4% (6%) Seeing • N
Slide 16: 2018 Outlook
2018 Outlook 16 Expect Current Industry Conditions to Continue • Nylon: industry spreads fluctuating near marginal producer cost Commercial • Ammonium Sulfate: cold/wet weather in U.S. drives late start to planting season • Chemical Intermediates: stabilizing North America market environment • Plann
Slide 17: Non-GAAP Reconciliations
17 Non-GAAP Reconciliations
Slide 18: Reconciliation Of Net Cash Provided By Operating Activities To Free Cash Flow
Reconciliation Of Net Cash Provided By Operating 18 Activities To Free Cash Flow (in $ thousands) The Company believes that this metric is useful to investors and management as a measure to evaluate our ability to generate cash flow from business operations and the impact that this cash flow has on
Slide 19: Reconciliation Of Net Cash Provided By Operating Activities To Free Cash Flow
Reconciliation Of Net Cash Provided By Operating 19 Activities To Free Cash Flow (in $ thousands) The Company believes that this metric is useful to investors and management as a measure to evaluate our ability to generate cash flow from business operations and the impact that this cash flow has on
Slide 20: Reconciliation Of Net Income To EBITDA
Reconciliation Of Net Income To EBITDA 20 (in $ thousands) The Company believes these non-GAAP financial measures provide meaningful supplemental information as they are used by the Company’s management to evaluate the Company’s operating performance, enhance a reader’s understanding of the financia
Slide 21: Reconciliation Of Net Income To EBITDA
Reconciliation Of Net Income To EBITDA 21 (in $ thousands) The Company believes these non-GAAP financial measures provide meaningful supplemental information as they are used by the Company’s management to evaluate the Company’s operating performance, enhance a reader’s understanding of the financia
Slide 22: Reconciliation of Net Income and Diluted EPS Excluding One-Time Net Tax Benefit
Reconciliation of Net Income and Diluted EPS to Net Income 22 and Diluted EPS Excluding One-Time Net Tax Benefit (in $ thousands) The Company believes these non-GAAP financial measures provide meaningful supplemental information as they are used by the Company’s management to evaluate the Company’s
Slide 23: Appendix
Appendix ADVANSIX
Slide 24: Portfolio Overview
Portfolio Overview 24 Leading North American Position Across Industries Served Nylon Ammonium Sulfate Chemical Intermediates 2017 Revenue $711M $277M $487M % of Total 48% 19% 33% • Resin used to manufacture many products, including • Co-product of Caprolactam used for crop and • Co-products of Capro
Slide 25: AdvanSix Chemistry
AdvanSix Chemistry 25 Nylon 6, a Downstream Petrochemical Value Chain Frankford Facility Hopewell Facility Chesterfield Facility CH3 CH3 OH O O H N O H N CH2 CH2 C 1 CH2 CH2 CH2 n Benzene 1 1 1 1 +O2 +H2 Cumene Phenol Cyclohexanone Caprolactam Nylon 6 2 Propylene 3 CH3 CH2 Acetone α-Methyl styrene A
Slide 26: AdvanSix Financial Drivers
AdvanSix Financial Drivers 26 Raws and Industry Pricing/Spreads Key Performance Considerations 2012 2013 2014 2015 2016 2017* AdvanSix 1,789 1,767 1,790 Sales / Net Income 166 1,329 119 1,192 1,475 ($M) 84 93 64 34 Sales Net Income WTI Crude Oil $95 $100 $90 $50 $45 $50 ($/bbl) Natural Gas $2.80 $3.