Advansix Inc. · NYSE:ASIX
Advansix — Investor Presentation (November 2018)
23 slides from Advansix's investor presentation, Nov 15, 2018
Slide 1: Hopewell Event and Plant Tour
November 15, 2018 Hopewell Event and Plant Tour
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 LTM (2) Revenue Breakdown • NYSE: ASIX By Product By Region By End Market • Spin-off from Honeywell: Asia: $33M EMEA: $39M Coatings, Other Adhesives October 1, 2016 Chemical Nylon: LatAm/Canada: Inter
Slide 4: Vertically Integrated Manufacturing Sites
Vertically Integrated Manufacturing Sites 4 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 5: Hopewell Site Overview
Hopewell Site Overview 5 One of the World’s Largest Single-Site Producers of Caprolactam and Ammonium Sulfate Fertilizer • First ammonia plant in North America was built here in 1928 by the Atmospheric Nitrogen Division of Allied Chemical and Dye History • Hopewell site heritage includes the first l
Slide 6: Hopewell Site – Process Overview
Hopewell Site – Process Overview 6 Integrated Unit Operations With Significant Scale External Sales Sulfuric Acid Sulfur Plant Unit Product Operation Area 6 Caprolactam Area 7 Area 7 Phenol Cyclohexanone Lactam Production Ammonium Purification Sulfate Area 11 Area 8 Crude Lactam Area 11 Cyclohexanon
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: World-Class Base Business Performance
World-Class Base Business Performance 8 Sustaining Cost Advantage and Improving Operating Leverage Operational Excellence Commercial Excellence Functional Excellence Safe and stable operations driving Sales and Marketing proficiency driving Continuous improvement mindset higher returns for the busin
Slide 9: Health, Safety, Environmental (HSE)
Health, Safety, Environmental (HSE) 9 Enabling Safe, Secure, Sustainable and Compliant Operations Priorities Total Case Incident Rate (TCIR) TCIR: the number of occupational injuries and illnesses per 100 employees • Zero incident culture 2.00 1.50 • 100% regulatory compliance 1.00 43% Improvement 1
Slide 10: Operational Excellence
Operational Excellence 10 Maturing Processes to Mitigate Risk and Improve Year-over-Year Output Hopewell Caprolactam Output (Illustrative Framework) Best Demonstrated Rate A Focus Area: Externally Reported Project Capacity B Pipeline C D Frankford Turnaround Excellence Max Impact Current Output Stra
Slide 11: Safe And Stable Operations Roadmap
Safe And Stable Operations Roadmap 11 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 Reli
Slide 12: Operational Considerations
Operational Considerations 12 Capex Driving Higher Returns; Quarterly Linearity of Planned Turnarounds Capital Expenditures Planned Plant Turnarounds • Timing driven by compliance, inspection and sustaining ~$110M asset base Expect continued Growth/Cost ~32% acceleration of high- • Critical to suppo
Slide 13: Strategic Value Stream Teams (SVTs)
Strategic Value Stream Teams (SVTs) 13 Driving Multi-Year Roadmap for Continuous and Step Change Performance Analyze Gaps Identify Improvement Options Implementation OEE ISC • Operational Excellence / Asset Reliability Plans Yield • Technology Road Maps Quality Technology Commercial Cost • Capital P
Slide 14: High-Return Capex Projects Initiated In 2018
High-Return Capex Projects Initiated In 2018 14 Improving Output, Quality and Energy Efficiency at Hopewell Project Overviews and Benefits Project #1 Project #2 • Making Hopewell facility more energy • Adding additional equipment to efficient – replacing coal-fired steam Hopewell to support reliabil
Slide 15: Differentiated Product Growth
Differentiated Product Growth 15 Innovation Key to Future Growth and Profit Margin Lift Differentiated Product Sales Differentiated Products Characteristics Driving value and growth above base offerings High-Purity Applications 1.5x – 2x gross margin vs. company average Penetrating high-value
Slide 16: Cash Flow And Capital Deployment
Cash Flow And Capital Deployment 16 Maturing Deployment Strategies Trailing 12-Month Cash Flow Capital Deployment Framework ($ 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 17: Appendix
Appendix ADVANSIX
Slide 18: Nylon Overview
Nylon Overview ~47% of ASIX Sales 18 Highlights • Nylon 6 Demand Growth In-Line With GDP – Engineered plastics and packaging faster growing segments • Industry Operating Around Marginal Producer Economics – North America supply/demand generally in balance – Environmental policy and feedstock constra
Slide 19: Nylon Overview
Nylon Overview ~47% of ASIX Sales 19 2018 Global Demand % of Global (~6,165 KMT) Demand Carpet ~540 KMT ~9% Historical $711 $698 $598 $539 Revenue ($M) Engineered 2015 2016 2017 LTM ~1,900 KMT ~31% Plastics Industrial ~1,090 KMT ~18% Select Competitors Packaging ~570 KMT ~9% Select Textile ~2,065 KM
Slide 20: Ammonium Sulfate Overview
Ammonium Sulfate Overview ~19% of ASIX Sales 20 Highlights • Ammonium Sulfate ~5% of Nitrogen Fertilizer Consumption – Urea has underlying influence on all nitrogen nutrient products; Ammonium Sulfate sold with added sulfur value proposition and has its own supply/demand fundamentals • Improved Indu
Slide 21: Ammonium Sulfate Overview
Ammonium Sulfate Overview ~19% of ASIX Sales 21 AdvanSix Ammonium Sulfate Sales by Region Canada EMEA Other Latin America Historical $338 $283 $277 $283 Revenue ($M) Brazil U.S. 2015 2016 2017 LTM Select MMA Producers AdvanSix Domestic AdvanSix Export Competitors Sales Mix Sales Mix Steel Mills Stan
Slide 22: Chemical Intermediates Overview
Chemical Intermediates Overview ~34% of ASIX Sales 22 Highlights • Manufacture, Market and Sell Chemical Products Derived From the Processes Within our Integrated Chain – Integration enables full asset utilization – Dedicated sales and product marketing team enables product mix optimization to maxim
Slide 23: Chemical Intermediates Overview
Chemical Intermediates Overview ~34% of ASIX Sales 23 Phenol Acetone 2018 Global Demand % of Global 2018 Global Demand % of Global (~10,885 KT) Demand (~6,860 KT) Demand BPA ~48% BPA ~25% Historical $487 $518 ~5,250 KT ~1,730 KT Revenue $393 $369 ($M) ~15% ~34% 2015 2016 2017 LTM Nylon Solvents ~1,6