Slide 1: 4Q 2016 Earnings Presentation
March 3, 2017 4Q 2016 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: Highlights
Highlights 3 • First Full Quarter As Independent Company Following Successful Spin • 4Q16 Strong Cash Flow Improvement • 4Q16 Planned Turnaround And Extended Outage Drove ~$64M Impact To Pre-Tax Income • 1Q17 Plant Production Rates On Plan • Recent Nylon Price Increases, Ammonium Sulfate Stabilizing
Slide 4: 4Q 2016 Financial Summary
4Q 2016 Financial Summary 4 Strong Cash Generation Despite Significant Extended Outage Impact ($ Millions, Except Per Share Amounts) 4Q 2015 4Q 2016 Comments • Volume (18%), Price ~Flat Sales $315.9 $259.3 – 4Q16 Unplanned Outages (23%) – Market Pricing (2%), Raw Material Pass Through +2% EBITDA $33
Slide 5: 4Q 2016 Plant Turnaround Impact
4Q 2016 Plant Turnaround Impact 5 Supporting Improved Uptime And Higher Utilization Rates Going Forward Pre-Tax Income Impact Comments ~$64M* • Extensive 4Q 2016 Planned Turnaround – Semi-Annual Hopewell Outage Including Scheduled 18-month Ammonia Plant Overhaul And Utility Shutdown – Chesterfield B
Slide 6: Full Year 2016 Financial Summary
Full Year 2016 Financial Summary 6 Strong Cash Flow Improvement ($ Millions, Except Per Share Amounts) FY 2015 FY 2016 Comments • Volume (1%), Price (9%) Sales $1,329.4 $1,191.5 – 4Q16 Unplanned Outages (5%) – Market Pricing (5%), Raw Material Pass Through (4%) EBITDA $136.6 $96.0 • ~$64M Impact of
Slide 7: Plant Performance
Plant Performance 7 Higher Utilization Rates Expected In 2017 Plant Production • Improved Production Rates Expected Across All Three of +6% Our Major Manufacturing Sites in 2017 – Hopewell 2017 Plant Production Rates Expected At or Above (-8%) Historical Production • 1Q17 Planned Plant Production Ra
Slide 8: Nylon Market Outlook
Nylon Market Outlook 8 Recent Price Increases; Market Fundamentals Tightening But Remain Dynamic Nylon Key Industry Spreads (1) • Tighter supply conditions in U.S. 4Q YoY 4Q vs. 3Q • China Caprolactam utilization 2500 Asia BNZ-CPL 18% 13% 600 What We’re remains low due to Asia CPL-Resin (-15%) 34% S
Slide 9: Ammonium Sulfate (AS) Market Outlook
Ammonium Sulfate (AS) Market Outlook 9 Sequential Pricing Improvement; Remain Cautious On 2017 Planting Season Ammonium Sulfate Key Industry Prices (1) • Anti-dumping ruling limiting 4Q YoY 4Q vs. 3Q Chinese imports Corn Belt Urea (-14%) 16% What We’re • Cautious farmer buying behavior 2500 Corn Bel
Slide 10: Chemical Intermediates Market Outlook
Chemical Intermediates Market Outlook 10 Stable End Market Environment Chemical Intermediates Key Industry Prices (1) • Phenol/Acetone demand steady; 4Q YoY 4Q vs. 3Q North America industry Refinery Grade 29% (-2%) What We’re utilization ~80% Propylene Seeing 100 Acetone, Large 26% (-1%) Buyer • Ref
Slide 11: AdvanSix Financial Drivers
AdvanSix Financial Drivers 11 Raws And Industry Pricing/Spreads Key Performance Considerations 2012 2013 2014 2015 2016 AdvanSix 1,789 1,767 1,790 Sales / Net Income 166 1,329 119 1,192 ($M) 84 64 34 Sales Net Income WTI Crude Oil $95 $100 $90 $50 $45 ($/bbl) Natural Gas $2.80 $3.65 $4.40 $2.65 $2.4
Slide 12: 1H 2017 Framework
1H 2017 Framework 12 Improved Plant Production, Higher Raw Materials, Monitoring Market Pricing 1H17 vs. 1H16 Comments Nylon Spreads Industry price increases for caprolactam and resin Ammonium Sulfate Pricing Prices stabilizing sequentially but remain headwind YoY Raw Materials Raw materials pass-th
Slide 13: Summary
Summary 13 • 2016 Results Impacted By Significant Extended 4Q16 Turnaround Activities • Positioned For Improved Uptime And Higher Utilization Rates Going Forward • Strong Cash Flow Improvement In Dynamic End Market Environment • Capex Remains Elevated Near-Term – 2017 Outlook ~$90M • Price Increases
Slide 14: Appendix: Reconciliation of non-GAAP Measures to GAAP Measures
14 Appendix: Reconciliation of non-GAAP Measures to GAAP Measures 4Q 2016 Earnings Presentation – March 3, 2017
Slide 15: Reconciliation Of Net Cash Provided By Operating Activities To Free Cash Flow
Reconciliation Of Net Cash Provided By Operating 15 Activities To Free Cash Flow (in $ thousands) Three Months Ended Years Ended December 31, December 31, 2016 2015 2016 2015 Net Cash Provided by Operating Activities $ 47,273 $ 31,688 $ 113,740 $ 101,536 Expenditures for Property, Plant and Equipmen
Slide 16: Reconciliation Of Net Income To EBITDA
Reconciliation Of Net Income To EBITDA 16 (in $ thousands) Three Months Ended Years Ended December 31, December 31, 2016 2015 2016 2015 Net Income $ (24,714) $ 15,338 $ 34,147 $ 63,776 Interest Expense 1,847 - 1,847 - Income Taxes (17,084) 8,739 19,628 36,461 Depreciation and Amortization 10,365 9,0