Slide 1: 2Q 2019 Earnings Presentation
August 1, 2019 2Q 2019 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 • 2Q19 Sales $345M, down (14%) including (9%) lower raw material pass through and (5%) volume • 2Q19 pre-tax income results include previously announced (~$12.6M) repositioning charge associated with closure of Pottsville, PA manufacturing facility; Expect ~1 year cash payback • 2Q19 Cash
Slide 4: 2Q 2019 Financial Summary
2Q 2019 Financial Summary 4 High Plant Utilization Rates Despite Challenging Macro Environment ($ Millions, Except Per Share Amounts) 2Q 2018 2Q 2019 Comments • Sales Down (14%): Volume (5%), Price (9%) Sales $400.5 $345.2 – Raw Material Pass Through (9%), Market Pricing ~Flat • (~$12.6M) Pre-Tax Re
Slide 5: Nylon Industry Outlook
Nylon Industry Outlook 5 Soft Carpet and Auto End Markets Nylon Key Industry Spreads (1) • Demand softness and customer 2Q19 YoY 2Q19 vs. 1Q19 destocking in carpet and auto Global Composite BNZ-CPL (13%) (3%) end markets What We’re Asia BNZ-CPL (20%) (3%) • Pricing/spreads more Asia CPL-Resin Seeing
Slide 6: Ammonium Sulfate (AS) Industry Outlook
Ammonium Sulfate (AS) Industry Outlook 6 Industry Dynamics Mixed as New ’19/’20 Season Begins Ammonium Sulfate Key Industry Prices (1) • AS price movement modest 2Q19 YoY 2Q19 vs. 1Q19 relative to recent nitrogen pricing Corn Belt Granular AS (1%) (1%) Corn Belt Urea 20% 11% What We’re • Wet weather
Slide 7: Chemical Intermediates Industry Outlook
Chemical Intermediates Industry Outlook 7 Global Acetone Supply Continued to Lengthen in 2Q19 Chemical Intermediates Key Industry Prices (1) • Global acetone oversupply 2Q19 YoY 2Q19 vs. 1Q19 further lengthened in 2Q19 Acetone, Small/Medium Buyer (37%) (11%) pressuring spot market spreads Acetone, L
Slide 8: Cumene Supply Considerations – PES Fire Impact
Cumene Supply Considerations – PES Fire Impact 8 Expect Sufficient Availability of Cumene Supply to Maintain High Utilization Rates • Secured additional supply of cumene and phenol from multiple suppliers to maintain production output Near-Term • PES local supply provided logistics and working capit
Slide 9: Full Year 2019 Outlook
Full Year 2019 Outlook 9 Continued Focus on High-Return Investments and Improved Operational Performance • Nylon: targeting strong plant utilization rates while navigating through soft carpet and auto end markets • Ammonium Sulfate: typical seasonality expected to drive 3Q19 sequential domestic pric
Slide 10: AdvanSix Strategy And Priorities
AdvanSix Strategy And Priorities 10 Well Positioned for Strong Operational and Financial Performance Over Long Term Focus Areas For Further Value Creation • Averaging 90%+ utilization rates through the cycle 1) Safe and Stable Operations • Less variability in utilization rates drives higher returns
Slide 11: Appendix
11 Appendix 2Q 2019 Earnings Presentation – August 1, 2019
Slide 12: Capital Expenditures
Capital Expenditures 12 Execution of High-Return Growth and Cost Savings Projects in 2019 Growth/Cost Savings ~$150M • Executing against multi-year $150-$200M pipeline of high- return projects; 20%+ IRR target $109M ~35% ~2018 Levels • Relocation of R&D lab to Chesterfield from Colonial Heights adds
Slide 13: Planned Plant Turnarounds
Planned Plant Turnarounds 13 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
Slide 14: Appendix: Reconciliation of non-GAAP Measures to GAAP Measures
14 Appendix: Reconciliation of non-GAAP Measures to GAAP Measures 2Q 2019 Earnings Presentation – August 1, 2019
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) (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 16: Reconciliation Of Net Income To EBITDA
Reconciliation Of Net Income To EBITDA 16 (in $ thousands) (2) EBITDA is a non-GAAP measure defined as Net Income before Interest, Income Taxes, Depreciation and Amortization (3) One-time Pottsville restructuring charges reflect the closure of the Company’s Pottsville, Pennsylvania films plant (4) E