AdvanSix Inc (ASIX) 2024 Q3 法說會逐字稿

Good day, and welcome to the AdvanSix Third Quarter 2024 Earnings Conference Call. (Operator Instructions) Please note, today's event is being recorded.

美好的一天，歡迎參加 AdvanSix 2024 年第三季財報電話會議。 （操作員說明）請注意，今天的活動正在錄製中。

I would now like to turn the conference over to Adam Kressel, Vice President, Investor Relations and Treasurer. Please go ahead, sir.

我現在想將會議交給投資者關係副總裁兼財務主管 Adam Kressel。請繼續，先生。

Thank you, Rocco. Good morning and welcome to AdvanSix's Third Quarter 2024 Earnings Conference Call. With me here today are President and CEO Erin Kane, Senior Vice President and CFO Sidd Manjeshwar, and former Senior Vice President and CFO Michael Preston. This call and webcast, including any non-GAAP reconciliations, are available on our website at investors.advansix.com.

謝謝你，羅科。早安，歡迎參加 AdvanSix 2024 年第三季財報電話會議。今天與我在一起的有總裁兼執行長 Erin Kane、資深副總裁兼財務長 Sidd Manjeshwar 以及前資深副總裁兼財務長 Michael Preston。本次電話會議和網路廣播，包括任何非 GAAP 調節，可在我們的網站 Investors.advansix.com 上取得。

Note that elements of this presentation contain forward-looking statements that are based on our best view of the world and of our business as we see it today. Those elements can change, and the actual results can differ materially from those projected, and we ask that you consider them in that light. We refer you to the forward-looking statements included in our press release and earnings presentation. In addition, we identify the principal risks and uncertainties that affect our performance in our SEC filings, including our annual report on Form 10-K, as further updated in subsequent filings with the SEC.

請注意，本簡報的內容包含前瞻性陳述，這些陳述是基於我們對當今世界和業務的最佳看法。這些因素可能會發生變化，實際結果可能與預測結果有重大差異，我們要求您從這個角度考慮它們。我們建議您參閱我們的新聞稿和收益報告中包含的前瞻性陳述。此外，我們在向 SEC 提交的文件中確定了影響我們業績的主要風險和不確定性，包括我們的 10-K 表年度報告，並在隨後向 SEC 提交的文件中進一步更新。

This morning, we will review our financial results for the third quarter 2024 and share our outlook for our key product lines and end markets. Finally, we'll leave time for your questions at the end.

今天早上，我們將回顧 2024 年第三季的財務業績，並分享我們對主要產品線和終端市場的展望。最後，我們將在最後留出時間回答您的問題。

So with that, I'll turn the call over to AdvanSix's President and CEO, Erin Kane.

因此，我會將電話轉給 AdvanSix 的總裁兼執行長 Erin Kane。

Thanks, Adam, and good morning, everyone. We appreciate you joining us here today for our quarterly call. As you saw in our press release, the AdvanSix team capitalized on the strength of our competitive position to deliver robust results, with the continued realization of commercial performance across our diverse product portfolio and strong operational execution in the third quarter. We drove top- and bottom-line growth, as well as continued cash flow improvement again this quarter, while maintaining our investments for long-term, sustainable performance.

謝謝亞當，大家早安。我們感謝您今天參加我們的季度電話會議。正如您在我們的新聞稿中看到的那樣，AdvanSix 團隊利用我們的競爭地位優勢，交付了強勁的業績，我們多樣化的產品組合持續實現了商業業績，並且在第三季度實現了強勁的運營執行力。本季我們再次推動了營收和利潤的成長以及現金流的持續改善，同時保持了長期、可持續績效的投資。

During the third quarter, we successfully completed a Responsible Care recertification audit, which is conducted by a third-party independent auditing firm which meets specific American Chemistry Council criteria. For more than 35 years, Responsible Care has been a core priority for American Chemistry Council members and represents our industry's commitment to the health and safety of our employees, the communities in which we operate, and the environment as a whole. My thanks to the entire team for their commitment to continuously improving our health, safety, and environmental performance, alongside our financial results.

第三季度，我們成功完成了責任關懷再認證審核，該審核由符合美國化學理事會特定標準的第三方獨立審核公司進行。 35 年來，責任關懷一直是美國化學理事會成員的核心優先事項，代表了我們行業對員工、我們經營所在社區以及整個環境的健康和安全的承諾。我感謝整個團隊致力於不斷改善我們的健康、安全和環境績效以及我們的財務表現。

The broader market backdrop in which we are operating remains favorable overall, with strong sulfur premiums supporting higher year-over-year pricing in our ammonium sulfate soft-fill program, a constructive global opt-on supply and demand environment, and modestly improving North American nylon industry conditions.

我們所處的更廣泛的市場背景總體上仍然有利，強勁的硫溢價支持我們的硫酸銨軟填充計劃的同比定價更高，建設性的全球選擇性供需環境以及北美的適度改善尼龍行業狀況。

Our disciplined capital execution continued in support of long-term performance and growth, including SUSTAIN. our Sustainable US Sulfate to Accelerate Increased Nutrition program. We are pleased to be awarded an approximately $12 million grant from the USDA through the Fertilizer Production Expansion Program, reinforcing a strong return profile for our series of projects. The grant funding will be received during the program's execution on a milestone achievement basis, and importantly supports the demand growth for our US customers as we increase our production capacity of premium-grade product. Everyone at AdvanSix is proud to have true material impact in helping to nourish the world.

我們嚴格的資本執行繼續支持長期績效和成長，包括維持。我們的永續美國硫酸鹽加速增加營養計劃。我們很高興透過肥料生產擴展計劃獲得美國農業部約 1200 萬美元的贈款，這增強了我們系列項目的強勁回報。贈款資金將在該計劃執行期間以里程碑式的成就為基礎收到，並且隨著我們提高優質產品的生產能力，重要的是支持我們美國客戶的需求成長。 AdvanSix 的每個人都為能夠在幫助滋養世界方面產生真正的物質影響而感到自豪。

Effective October 1, we welcome Sidd Manjeshwar as our new Senior Vice President and Chief Financial Officer. Sidd has tremendous experience establishing corporate and financial strategies that accelerate growth and profitability, and we look forward to his expertise as we advance our next chapter.

自 10 月 1 日起，我們歡迎 Sidd Manjeshwar 擔任我們的新高級副總裁兼財務長。 Sidd 在製定可加速成長和獲利的企業和財務策略方面擁有豐富的經驗，我們期待他的專業知識幫助我們推進下一個篇章。

I would like to take the opportunity to once again thank Mike Preston for his significant contributions to the success of AdvanceSix as our founding CFO and wish him well on his retirement. Mike will remain with the company through year-end in an advisory role to ensure a smooth transition of responsibilities.

我想藉此機會再次感謝 Mike Preston 作為我們的創始財務長為 AdvanceSix 的成功做出了重大貢獻，並祝他退休後一切順利。麥克將在年底前繼續留在公司，擔任顧問角色，以確保職責順利過渡。

We appreciate that we have a number of items to cover in our outlook, which I'll dive more into later. Let me close here now with a reflection in our confidence to navigate, perform, and execute in a multitudinous environment. We remain convicted in the future prospects for AdvanSiX, and are committed to delivering sustainable long-term value to our shareholders.

我們很高興在我們的展望中涵蓋了許多內容，我稍後將對此進行更深入的探討。現在讓我回顧一下我們在眾多環境中導航、執行和執行的信心。我們仍然對 AdvanSiX 的未來前景充滿信心，並致力於為股東提供可持續的長期價值。

Let me now turn the call over to Sidd to walk through the quarter financials.

現在讓我將電話轉給 Sidd，介紹一下本季的財務狀況。

Thanks, Erin, and good morning. I'm excited to be joining my first earnings call as a member of AdvanSix, and look forward to engaging with our analysts and investors moving forward, as well as delivering upon our compelling investment thesis.

謝謝，艾琳，早安。我很高興能以 AdvanSix 成員的身份參加我的第一次財報電話會議，並期待與我們的分析師和投資者繼續交流，並實現我們令人信服的投資論點。

I'm now on slide 4, where I will provide a summary of our third quarter 2024 financials. As Erin mentioned, our performance in the third quarter was terrific, with robust sales and earnings performance. as well as strong cash generation. I would like to thank all of our talented and dedicated employees for delivering these outstanding results.

我現在正在看第四張投影片，我將在其中提供 2024 年第三季財務狀況的摘要。正如艾琳所提到的，我們第三季的業績非常出色，銷售和獲利表現強勁。以及強勁的現金生成能力。我要感謝我們所有才華橫溢、敬業的員工取得了這些出色的成果。

Sales of $398 million in the quarter increased approximately 23% versus the prior year with contributions from both volume and price. Sales volume increased roughly 11%, primarily driven by higher sales of ammonium sulfate.

本季銷售額為 3.98 億美元，較上年同期成長約 23%，銷量和價格均有所貢獻。銷量成長約 11%，主要是受到硫酸銨銷量增加的推動。

Raw material pass-through pricing was 8% favorable as a result of net cost increase in benzene and propylene. Market-based pricing was favorable by 5% including continued strength in acetone as well as ammonium sulfate, as growers seeking to maximize crop yields continue to recognize the benefits of sulfur nutrition.

由於苯和丙烯的淨成本增加，原物料轉手定價有利 8%。基於市場的定價有利 5%，包括丙酮和硫酸銨的持續走強，因為尋求最大化作物產量的種植者繼續認識到硫營養的好處。

Adjusted EBITDA was $53 million and adjusted EBITDA margin was 13.4%. I'll walk through the key year-over-year variances on the next slide. Our adjusted earnings per share of $0.88 increased by $1.24 versus the prior year. The effective tax rate was 25.1% compared to 20.7% in the third quarter of 2023, primarily driven by the pre-tax loss in the prior year period.

調整後 EBITDA 為 5,300 萬美元，調整後 EBITDA 利潤率為 13.4%。我將在下一張投影片上介紹主要的同比差異。調整後每股收益為 0.88 美元，比前一年增加 1.24 美元。有效稅率為 25.1%，而 2023 年第三季為 20.7%，主要是由於去年同期的稅前虧損所致。

Free cash flow was $27 million in the quarter, up $31 million year-over-year, and an improvement of $10 million sequentially from the second quarter. Cash flow from operations of $57 million increased $37 million versus the prior year, primarily due to higher net income. Capital expenditures of $30 million in the quarter increased $5 million, reflecting our planned increased spend on maintenance and enterprise programs.

本季自由現金流為 2,700 萬美元，年增 3,100 萬美元，比第二季連續增加 1,000 萬美元。營運現金流為 5,700 萬美元，較上年增加 3,700 萬美元，主要是由於淨利潤增加。本季資本支出 3000 萬美元增加了 500 萬美元，反映出我們計劃增加維護和企業計劃支出。

Now let's turn to slide 5. Here we highlight the key drivers of our Q3 2024 adjusted EBITDA performance compared to the prior year period. Overall, the quarter can be characterized by the team's demonstrated ability to capture the pricing and volume benefits of commercial opportunities across the portfolio. The timing of planned plant turnarounds, an approximately $3 million impact in the quarter compared to $27 million in the prior quarter, was a consideration for the year-over-year comparable. However, when normalizing for the timing of impact of turnarounds, our underlying earnings growth remained substantial.

現在讓我們轉向投影片 5。總體而言，本季的特點是團隊表現出了捕捉整個投資組合商業機會的定價和數量優勢的能力。計畫中的工廠週轉時間對本季的影響約為 300 萬美元，而上一季的影響為 2,700 萬美元，這是同比可比的一個考慮因素。然而，當扭虧為盈的影響時間正常化時，我們的基本獲利成長仍然可觀。

Pricing over raw materials was favorable by $17 million, tracking our key variable drive-in margin. We saw expansion in acetone margins over propylene, supporting chemical intermediates, improvement in ammonium sulfate on a net price over natural gas and sulfur basis, and a modest increase in our nylon and caprolactam portfolio or our key draws. Volume, sales mix, and other items provided improved performance of $5 million, largely reflecting higher ammonium sulfate volume amid continued sulfur nutrition demand growth.

原物料定價有利 1700 萬美元，追蹤我們的關鍵變數開車利潤。我們看到丙酮利潤相對於丙烯有所擴大，支持了化學中間體，硫酸銨相對於天然氣和硫磺的淨價有所改善，以及我們的尼龍和己內酰胺產品組合或我們的主要吸引力略有增加。銷售、銷售組合和其他項目提供了 500 萬美元的業績改善，主要反映了硫營養需求持續成長期間硫酸銨銷售的增加。

Now let's turn to slide 6. Overall, our healthy balance sheet with prudent leverage ratios have continued to support reinvestment, growth, and return of cash, with our debt leverage expected to remain near the low end of our 1 to 2.5 times target range.

現在讓我們轉向幻燈片6。附近。

Our CapEx framework is a key pillar of our balanced and value-creative capital allocation strategy. Specifically, our strategy remains focused on our base maintenance and health, safety, and environmental spend to support safe, stable, and sustainable operations; our enterprise programs to support long-term operational excellence and risk mitigation; and a pipeline of high-return growth, and cost-saving projects.

我們的資本支出架構是我們平衡和創造價值的資本配置策略的關鍵支柱。具體來說，我們的策略仍然專注於基地維護以及健康、安全和環境支出，以支援安全、穩定和永續的營運；我們支持長期卓越營運和降低風險的企業計劃；以及一系列高回報成長和節省成本的項目。

As shared in our press release, we now anticipate CapEx in the range of $135 million to $140 million in 2024 compared to our previous guidance of $140 million to $150 million. Capital investments in 2025 are expected to be modestly higher due to refined execution timing, reflecting approximately $10 million of 2024 carryover and the continued planned progression of our growth and enterprise programs.

正如我們在新聞稿中分享的那樣，我們現在預計 2024 年的資本支出將在 1.35 億美元至 1.4 億美元之間，而我們先前的指引為 1.4 億美元至 1.5 億美元。由於執行時間的完善，預計 2025 年的資本投資將小幅增加，反映出 2024 年結轉約 1,000 萬美元以及我們的成長和企業計畫的持續計畫進展。

We continue to focus on making the necessary investments at the right time to support our long-term performance. We anticipate our new pending water permit for our Hopewell facility to require a multi-year investment to support sustainable water stewardship and resiliency at our site. So while this does represent a new consideration for CapEx, we do anticipate both the Frankford Dock and Boiler upgrade spend to wrap up in 2025.

我們繼續專注於在正確的時間進行必要的投資，以支持我們的長期表現。我們預計，霍普韋爾工廠新的待審批用水許可證需要多年投資，以支持我們工廠的可持續水資源管理和復原能力。因此，雖然這確實代表了資本支出的新考慮因素，但我們確實預計法蘭克福碼頭和鍋爐升級支出將在 2025 年完成。

With that, let me turn the call back to Erin.

接下來，讓我把電話轉回艾琳。

Thanks, Sidd. I'm now on slide 7 to discuss each of our product lines, starting with our plant nutrients business. While we navigated typical seasonal pricing considerations, our continued strong performance in Q3, including the higher year-over-year pricing of our fall fill program, are further proof points to the resiliency of sulfur nutrition demand.

謝謝，西德。我現在在幻燈片 7 上討論我們的每條產品線，從我們的植物營養素業務開始。雖然我們考慮了典型的季節性定價考慮因素，但我們在第三季度的持續強勁表現，包括秋季填充計劃的同比定價較高，進一步證明了硫營養需求的彈性。

Industry Corn Belt ammonium sulfate prices were up 16% year-over-year. In contrast, Corn Belt nitrogen pricing saw both a sequential reduction into the third quarter, as well as an 18% decline year-over-year, supporting continued robust realized sulfur premiums. We also continue to see strong demand for ammonium sulfate, including tons for a sulfur application, which led to higher anticipated volumes in the third quarter, ahead of our fourth quarter 2024 planed plant turnaround.

工業玉米帶硫酸銨價格較去年同期上漲16%。相比之下，第三季玉米帶氮肥價格季減，年減 18%，支撐了持續強勁的已實現硫溢價。我們也繼續看到對硫酸銨的強勁需求，包括用於硫磺應用的噸量，這導致在我們計劃的 2024 年第四季度工廠檢修之前，第三季度的預期產量更高。

Looking ahead, our order book is sold out through the end of this year, and we remain focused on being well-positioned for an anticipated favorable ammonium sulfate environment in the spring. We continue to expect strong performance despite recent industry data signaling caution around crop prices.

展望未來，我們的訂單到今年年底就已售完，我們仍然專注於為春季預期有利的硫酸銨環境做好準備。儘管最近的行業數據表明對農作物價格持謹慎態度，但我們仍然預期表現強勁。

As we've seen in past periods when farmer economics were on the decline, we typically see strong demand for ammonium sulfate as growers seek ways to maximize crop yields. There continues to be supporting evidence that farmers understand the investment tradeoff in driving better yield while managing their cost structure and profitability.

正如我們在過去農民經濟衰退時期所看到的那樣，隨著種植者尋求最大化作物產量的方法，我們通常會看到對硫酸銨的強勁需求。繼續有證據表明，農民了解在提高產量的同時管理成本結構和盈利能力的投資權衡。

As we have had a number of questions in the past regarding our regional and product sales mix, we have added a table here to characterize our 2024 first half versus second half sales volumes. As you can see in the table, we ship and sell domestically on a fairly consistent basis through the year. And as a reminder, this is where we sell the vast majority of our premium granular product. Export sales do go up in the second half, particularly for our standard grade product, which is predominantly sold into Central and South America. Longer term, we remain excited about the growth prospects for this business and leveraging our expertise as a leader in this space.

由於我們過去對我們的區域和產品銷售組合有很多疑問，因此我們在此處添加了一個表格來描述 2024 年上半年與下半年的銷售。正如您在表中看到的那樣，我們全年在國內的運輸和銷售基本上保持一致。提醒一下，這是我們銷售絕大多數優質顆粒產品的地方。下半年出口銷售確實有所成長，特別是我們的標準級產品，主要銷往中美洲和南美洲。從長遠來看，我們仍然對該業務的成長前景感到興奮，並利用我們作為該領域領導者的專業知識。

Let's turn to slide 8 to provide an update on our multi-year SUSTAIN growth program. As a reminder, this program will continue to support growing market demand for softener nutrition with an estimated growth of 3% to 4% per year and additional upside potential driven by increased adoption on soybeans.

讓我們轉向投影片 8，了解我們的多年持續成長計畫的最新情況。需要提醒的是，該計劃將繼續支持軟化劑營養不斷增長的市場需求，預計每年增長 3% 至 4%，並且由於大豆採用的增加而帶來額外的上行潛力。

As we've shared in the past, this program is a primary driver of near-term focused growth capital investment. And as we promised, we endeavor to provide greater clarity to the timing of our investments and expected outcomes as we hit certain milestones.

正如我們過去所分享的，該計劃是近期重點成長資本投資的主要驅動力。正如我們所承諾的那樣，當我們達到某些里程碑時，我們會努力更明確地說明我們的投資時機和預期成果。

The program is comprised of a series of projects targeting expansion of our granular ammonium sulfate production, predominantly through increased conversion, by approximately 200,000 tons per year. That represents a nearly 20% increase to support the growing needs of our domestic customers.

該計劃由一系列項目組成，旨在擴大我們的粒狀硫酸銨產量，主要透過提高轉化率，每年增加約 20 萬噸。這意味著成長了近 20%，以滿足國內客戶不斷增長的需求。

With ammonium sulfate traditionally a co-product of caprolactam production, the program also provides enhanced flexibility for higher granular production, even under variable caprolactam output scenarios. Benefits are being realized and will continue to phase in over the investment period as individual components of each project come online.

由於硫酸銨傳統上是己內酰胺生產的副產品，因此即使在己內酰胺產量變化的情況下，該計劃也為更高粒度的生產提供了更高的靈活性。隨著每個項目各個組件的上線，效益正在逐漸顯現，並將在投資期間繼續逐步顯現。

We remain on track and are proceeding in front-end engineering design and field execution. We expect production capabilities by the end of 2024 to reach a milestone of 70% conversion, ahead of our original target for the year and 7% over our original baseline.

我們仍保持正軌，並正在進行前端工程設計和現場執行。我們預計到 2024 年底，生產能力將達到 70% 轉換率的里程碑，超出我們當年的原定目標，比原定基準高 7%。

By completion of this program, we anticipate roughly 75% granular conversion, with increased production flexibility, improved domestic customer logistics, and no net increase in energy consumption or emissions. The return profile for our program remains robust, with expected IRRs exceeding our 20% target fertile rate. Coupled with the awarded grant from the USDA, we remain very excited about this program and look forward to sharing our continued progress moving forward.

完成此計畫後，我們預計顆粒轉換率約為 75%，生產彈性提高，國內客戶物流改善，且能源消耗或排放不會淨增加。我們計劃的回報狀況仍然強勁，預期 IRR 超過我們 20% 的目標生育率。再加上美國農業部授予的撥款，我們對該計劃仍然感到非常興奮，並期待分享我們的持續進展。

Let's turn to slide 9. For nylon, global pricing and spreads have continued to see recovery sequentially through 2024. We continue to expect North American nylon industry spreads to modestly improve amid stable end-market demand and more favorable macroeconomic conditions. The lower interest rate environment, in time, is expected to favorably impact building construction, and we anticipate seeing a more meaningful impact translate across the fiber and filament chain in 2025. Packaging demand remains stable overall, supported by the food and beverage sector, while in engineering plastics, we are monitoring fourth-quarter inventory drawdown through the auto value chain.

讓我們轉向幻燈片9。改善。較低的利率環境預計將對建築施工產生有利影響，我們預計到 2025 年，纖維和長絲鏈將產生更有意義的影響。工程塑膠方面，我們正在透過汽車價值鏈監測第四季庫存下降。

Varying regional dynamics, including competitive intensity and trade flows, continue to impact regional pricing. Despite long supply and demand fundamentals, estimated operating rates in China are sitting at multi-year highs, resulting in continued nylon exports to other regions, mainly Southeast Asia. In light of this, and supporting our performance moving forward, we have an improved geographical mix as our export sales have reduced and returned to historical averages with an estimated 13% of total nylon sales volume compared to approximately 20% overall in 2023.

不同的區域動態，包括競爭強度和貿易流動，繼續影響區域定價。儘管供需基本面較長，但中國的預期開工率仍處於多年高位，導致尼龍繼續出口到其他地區，主要是東南亞。有鑑於此，並支持我們向前發展的業績，我們的地理結構有所改善，因為我們的出口銷售額有所減少並恢復到歷史平均水平，預計佔尼龍總銷量的13%，而2023 年總體銷量約20%。

Our customers value reliable domestic supply, and we demonstrated the benefits of our competitive position with an average of 93% utilization at Hopewell in the second and third quarters. For our nylon business, we remain highly focused on supporting improved through-cycle profitability by driving productivity, optimizing our regional and product sales mix, and continuing to promote the value proposition of our differentiated nylon offerings.

我們的客戶重視可靠的國內供應，我們在第二季和第三季合和的平均利用率為 93%，證明了我們競爭地位的優勢。對於我們的尼龍業務，我們仍然高度關注透過提高生產力、優化我們的區域和產品銷售組合以及繼續推廣我們差異化尼龍產品的價值主張來支持提高整個週期的盈利能力。

As an example, our wire and cable tailored solutions are designed to meet strict specifications and maintain compliance with UL certifications. This is essential for ensuring the highest safety standards in building wire protection.

例如，我們的電線和電纜定制解決方案旨在滿足嚴格的規範並保持符合 UL 認證。這對於確保建築電線保護的最高安全標準至關重要。

Our valued technical support and innovative solutions have helped customers solve problems and enabled them to run their production lines at significantly higher rates. We've seen this translate into strong sales growth with a low double-digit percent CAGR since 2021 and 4% sales growth for the third quarter year to date.

我們寶貴的技術支援和創新解決方案幫助客戶解決了問題，並使他們能夠以更高的速度運行生產線。我們看到這轉化為強勁的銷售成長，自 2021 年以來複合年增長率較低，達到兩位數，今年第三季迄今的銷售成長為 4%。

Let's turn to slide 10. Moving to chemical intermediates, industry realized after-term prices over refinery-grade propylene costs generally remained healthy amid continued balance to tight global supply and demand as lower global phenol operating rates continued to persist.

讓我們轉向幻燈片 10。

Into the fourth quarter, we're monitoring the paints and coatings end market, as this is typically a seasonally weaker period. Looking forward, the lower interest rate environment into 2025 would also support phenol demand into building construction applications in both renovation and new builds.

進入第四季度，我們正在監測油漆和塗料終端市場，因為這通常是季節性疲軟時期。展望未來，2025 年的較低利率環境也將支持翻新和新建築應用中的苯酚需求。

As a reminder, acetone represents roughly half of our chemical intermediates portfolio and is a key product line with a perform and optimize strategy to meet customer needs while driving favorable sales and profitability mix. I would continue to characterize demand across the rest of chemical intermediates as mixed overall, but they do represent platforms serving high-value applications in support of longer-term growth and profitability.

需要提醒的是，丙酮約占我們化學中間體產品組合的一半，是一個關鍵產品線，其執行和優化策略可以滿足客戶需求，同時推動有利的銷售和盈利組合。我將繼續將其餘化學中間體的需求描述為總體上好壞參半，但它們確實代表了為高價值應用提供服務的平台，以支持長期增長和盈利能力。

Let's turn to slide 11. 2024 has truly been a year of contrast. As we just walked through, on the positive side, we have consistently shown our agility and focus by deploying the right strategies and actions to achieve commercial success while advancing targeted growth initiatives. Our underlying commercial performance has been strong, with year-to-date pricing up 1% and sales volume up 3%, a robust recovery following our first quarter operational event. The results have been led by our ammonium sulfate and acetone product lines, as well as our ability to navigate the nylon cycle through our product and geographic mix.

讓我們轉向幻燈片 11。2024 年確實是充滿對比的一年。正如我們剛剛經歷的那樣，積極的一面是，我們透過部署正確的策略和行動來實現商業成功，同時推進有針對性的成長計劃，從而始終表現出我們的敏捷性和專注力。我們的基本商業業績一直強勁，今年迄今的定價上漲了 1%，銷量成長了 3%，這是我們第一季營運活動後的強勁復甦。這些成果得益於我們的硫酸銨和丙酮產品線，以及我們透過產品和地理組合來駕馭尼龍循環的能力。

On the opportunity side, while we have proven ability to navigate and recover from operational difficulties, our manufacturing execution overall this year has not met our expectations, including our disclosure today regarding the unfavorable impact of our extended outage at Hopewell.

在機會方面，雖然我們已經證明有能力應對營運困難並從中恢復，但今年我們的整體製造執行情況並未達到我們的預期，包括我們今天披露的有關合和長期停電造成的不利影響的資訊。

As a reminder, this year's multi-year planned turnaround was comprehensive in scope, designed to encompass maintenance and reliability work at our three major sites. While the mechanical portion of the turnaround is behind us, we did experience a delayed ramp in operating rates at our Hopewell facility, given the challenge with our ammonia plant restart. The reduced production and a delayed ramp to target operating rates is expected to result in an approximately incremental $17 million unfavorable impact to pre-tax income, inclusive of $10 million of fixed-cost absorption and higher maintenance expense, and an additional $7 million of lost sales. The unplanned situation did not have an impact on 3Q 2024 results.

提醒一下，今年的多年計畫週轉範圍很全面，旨在涵蓋我們三個主要站點的維護和可靠性工作。雖然週轉的機械部分已經過去，但考慮到氨工廠重啟的挑戰，我們的合和工廠的開工率確實出現了延遲。產量減少和達到目標開工率的延遲預計將對稅前收入產生約 1,700 萬美元的不利影響，其中包括 1,000 萬美元的固定成本吸收和更高的維護費用，以及額外的 700 萬美元損失銷售量。計劃外情況並未對 2024 年第三季業績產生影響。

Operational excellence is a key enabler to our overall performance, and we take all the learnings for sustained continuous improvement with rigor and discipline. Our planned plant turnarounds, as well as prioritized maintenance capital investments, are critical to supporting high utilization rates and key to capturing the operational leverage of our competitive cost advantage.

卓越營運是我們整體績效的關鍵推動因素，我們將所有經驗教訓用於嚴謹和紀律的持續改進。我們計劃的工廠檢修以及優先維護資本投資對於支持高利用率至關重要，也是利用我們競爭性成本優勢的營運槓桿的關鍵。

This year has reminded us that there is meaningful annual opportunity of sustainably running at our targeted production rate. If we look at our last eight years, our average annual impact of planned plant turnaround is approximately $35 million per year. Our strategy and expectation is to run at targeted production rates outside of these planned events.

今年提醒我們，每年都有以我們的目標生產力可持續運作的有意義的機會。如果我們回顧過去八年，計畫工廠週轉的平均年影響約為每年 3500 萬美元。我們的策略和期望是在這些計劃的活動之外以目標生產力運作。

When you look over the last 10 quarters, on a 12-month trailing basis, we have seen the impact of timing and duration of outages, as well as unplanned interruptions, grow to approximately an average of $45 million. We are refreshing enterprise-wide actions that will be designed to capture this $10 million-plus opportunity through consistent year-over-year timing of our turnarounds and improved execution.

當您回顧過去 10 個季度（以 12 個月為基礎）時，我們發現中斷時間和持續時間以及計劃外中斷的影響平均增長到約 4500 萬美元。我們正在更新企業範圍內的行動，旨在透過每年一致的周轉時間和改進的執行來抓住這個價值超過 1000 萬美元的機會。

As we move through the fourth quarter, we are highly focused on capturing commercial success across a diversified product portfolio, driving efficient working capital performance to support continued improvement in cash flow generation, and executing our focused growth investments while maintaining a strong balance sheet. Despite the unfavorable impacts on the extended turnaround, our outlook for the fourth quarter and 2025 continues to be supported by a diverse portfolio, advantage of our business model, and favorable industry dynamics.

在第四季度，我們高度專注於透過多元化產品組合獲得商業成功，推動高效的營運資本績效以支持現金流產生的持續改善，並在保持強勁的資產負債表的同時執行我們的重點成長投資。儘管對延長週轉時間產生不利影響，但我們對第四季度和 2025 年的展望繼續受到多元化投資組合、業務模式優勢和有利的行業動態的支持。

With that, Adam, let's move to Q&A.

Adam，接下來我們進入問答環節。

Great. Thanks, Erin. Rocco, can you please open the line for questions?

偉大的。謝謝，艾琳。 Rocco，您可以開通提問線嗎？

(Operator Instructions) David Silver, C. L. King.

（操作員說明）David Silver，C.L. King。

This is Kevin Holder, on for David. My first topic would be on your fertilizer business. I was wondering if we could get a bit more color on how that business performed over the summer. Could you first discuss the factors that led to your success on your most recent fall fill program, despite the less than robust farm income and crop price outlook?

我是凱文‧霍爾德，替大衛發言。我的第一個話題是你們的化肥業務。我想知道我們是否可以更多地了解該業務在夏季的表現。儘管農場收入和農作物價格前景不太強勁，您能否先討論一下導致您最近的秋季填充計劃成功的因素？

And then secondly, how would you characterize your fertilizer demand in your Southern Hemisphere markets? Thank you.

其次，您如何描述南半球市場的化肥需求？謝謝。

Great. Thanks, Kevin, for joining here this morning. I'll start by saying, if you kind of think about where we left off, AF's pricing did experience its typical seasonal decline in 3Q 2024, but its shared pricing was higher on a year-over-year basis and reflecting really the recognition of our software value proposition and continued strong sulfur premiums.

偉大的。謝謝凱文今天早上加入這裡。我首先要說的是，如果你想一下我們上次提到的地方，AF 的定價確實在 2024 年第三季度經歷了典型的季節性下降，但其股價同比較高，這確實反映出對我們的軟體價值主張和持續強勁的硫溢價。

And when we think about the proof point here, as we've seen, certainly, farmer economics are notably on a decline, but we continue to see the strong demand as growers continue to seek ways to optimize crop yields. When you think about -- certainly where we've been and why we fare a bit better than broader nitrogen, there is a tighter North American supply-demand environment for AF. We continue to have the research that has shown that growers need a premium source of sulfur to ensure high-yielding crops. And so these are proof points that through the demand, the buying-through sold, and the pricing, that growers will continue to invest in ammonium sulfate to support their yield profitability.

當我們思考這裡的證據時，正如我們所看到的，農民的經濟狀況顯然正在大幅下降，但隨著種植者繼續尋求優化作物產量的方法，我們仍然看到強勁的需求。當你想一想——當然我們已經走到了哪裡，以及為什麼我們的表現比更廣泛的氮肥好一點時，就會發現北美的 AF 供需環境更加緊張。我們繼續進行的研究表明，種植者需要優質的硫源來確保作物高產量。因此，這些證據表明，透過需求、銷售買入和定價，種植者將繼續投資硫酸銨以支持其產量獲利能力。

When you look at third-party industry data, we've seen the long-term average of premiums in the 85% range over the sort of last 10 years. And certainly, while that ebbs and flows from year to year, it's strongly influenced by industry supply and farmer sentiment. Again, these strong premiums in the current environment demonstrate that value proposition that we are delivering to the growers and has ultimately -- our excitement to continue to take our industry position here and the technology we have and growing it through our SUSTAIN growth program. So yeah, positive here in the North American domestic space and our focus here is to continue to support that growing demand.

當您查看第三方行業數據時，我們會發現過去 10 年的長期平均保費在 85% 的範圍內。當然，雖然這種情況逐年起伏，但它受到行業供應和農民情緒的強烈影響。在當前環境下，這些強勁的溢價再次證明了我們向種植者提供的價值主張，並最終實現了我們對繼續保持我們的行業地位和我們擁有的技術並通過我們的持續增長計劃來發展它的興奮。所以，是的，北美國內市場是積極的，我們的重點是繼續支持不斷增長的需求。

When we think about, certainly, the hemispheres, and we are in the back half of the year where we -- we'll sell into to South America, again, if you serve it on the table there, we'll have an uptick in demand. This is predominantly where we sell our standard-grade products. And again, it's the places where we're selling that's providing a proposition on the crops there, and things look good here for the back half.

當然，當我們想到半球時，我們正處於今年下半年，我們將再次向南美銷售，如果你在那裡的桌子上供應它，我們的銷量將會上升需求旺盛。這主要是我們銷售標準級產品的地方。再說一遍，我們銷售的地方為那裡的農作物提供了建議，而這裡的後半部分情況看起來不錯。

Great. Thank you, Erin. That's very helpful. My next question is directed towards Sidd. Congratulations on your appointment. In the press release when you were announced as CFO, you stated, I'm looking forward to joining the AdvanSix leadership team to drive accelerated profitable growth in support of the company's long-term sustainable performance. What do you envision your strategies will be to drive that accelerated profitable growth? Thank you.

偉大的。謝謝你，艾琳。這非常有幫助。我的下一個問題是針對 Sidd 的。恭喜您的任命。在您被任命為財務長時的新聞稿中，您表示，我期待加入 AdvanSix 領導團隊，推動利潤加速成長，支持公司的長期永續表現。您認為推動利潤加速成長的策略是什麼？謝謝。

Thanks, Kevin. I hope you're doing well. Thanks for your thoughtful question. I'm looking forward to seeing you and David in person at some point in the near future.

謝謝，凱文。我希望你一切都好。感謝您提出的深思熟慮的問題。我期待在不久的將來的某個時候見到您和大衛本人。

Look, if you look back over the last eight years or so, the team's done a tremendous job of growing the company's underlying EBITDA and through-cycle profitability, right, while navigating a fairly shifting macro backdrop. As the newest member of the team, what I'd look to do is further that growth, both organically and inorganically.

看，如果你回顧過去八年左右的時間，你會發現該團隊在提高公司的基本 EBITDA 和整個週期盈利能力方面做了巨大的工作，同時應對了相當多變化的宏觀背景。作為團隊的最新成員，我希望做的是進一步促進有機和無機的成長。

As a diversified chemistry company, our focus is on accelerating our profitable growth in the most attractive end markets we participate in. So my focus will be around helping the company improve our productivity, our margins, expanding our commercial earnings growth through targeted, differentiated products, and high-return growth investments like SUSTAIN, and then seek the best risk-adjusted capital allocation outcomes to our advantage.

作為一家多元化的化學公司，我們的重點是在我們參與的最具吸引力的終端市場中加速我們的盈利增長 因此，我的重點將是幫助公司提高我們的生產力和利潤，透過有針對性的差異化產品擴大我們的商業獲利成長，以及高回報成長投資，如維持，然後尋求對我們有利的最佳風險調整資本配置結果。

Thank you, Sidd. Yeah, we're looking forward to meeting you as well. That's all my questions. Thank you, guys, for the color. Appreciate it.

謝謝你，西德。是的，我們也期待與您見面。這就是我的所有問題。謝謝你們的顏色。欣賞它。

Charles Neivert, Piper Sandler.

查爾斯·尼維特，派珀·桑德勒。

A couple questions. One, you said your order book was basically billed on ammonium sulfate to end of year. In looking at that, again, that's always associated with the amount of caprolactam, so if you're sort of ordered out, does that mean that caprolactam is going to also be running very hard through the rest of the year in order to make sure that supply is available? Or we shouldn't necessarily make that conclusion?

有幾個問題。一，您說到年底您的訂單基本上都是按硫酸銨計費的。再次考慮到這一點，這總是與己內酰胺的量有關，所以如果你被訂購了，這是否意味著己內酰胺在今年剩餘的時間裡也將非常努力地運行，以確保該供應是否可用？或者我們不一定應該得出這樣的結論？

Yes, as our standard targeted approach here is certainly with our competitive advantage in our Hopewell facility, we are targeting full rates here. Leveraging our assets will be important to, again, just get the benefits of the expanded granular conversion and maximizing the opportunity set, though certainly, as we come through the turnaround, that is the intent here now through, generally, the spring. It's a good opportunity for us to make sure that we're using all of our degrees of freedom that we have and that we're investing in to have success here for -- probably -- we definitely will continue to service our important caprolactam customers, rebuild our merchant pipelines up there as well. So that is the intended strategy here.

是的，由於我們在這裡的標準目標方法肯定具有我們在合和工廠的競爭優勢，因此我們的目標是全價。再次，利用我們的資產對於獲得擴大的粒度轉換和最大化機會集的好處非常重要，當然，當我們經歷轉變時，這就是現在整個春季的意圖。這對我們來說是一個很好的機會，可以確保我們利用我們所擁有的所有自由度，並且我們正在投資以在這裡取得成功，因為我們肯定會繼續為我們重要的己內酰胺客戶提供服務，也在那裡重建我們的商業管道。這就是這裡的預期策略。

Okay. Another question, on the acetone front, I know a lot of your acetone sales are based on the cost, and any movement in the cost will just move the pricing, but in terms of the margin over propylene in this case, on the stuff that's not tied directly to the cost structure, are you seeing an improving margin in that business because, again, it's a bit tight because of the phenol issues?

好的。另一個問題，在丙酮方面，我知道你們的許多丙酮銷售都是基於成本，成本的任何變動只會改變定價，但就這種情況下相對於丙烯的利潤而言，與成本結構沒有直接關係，您是否看到該業務的利潤率有所改善，因為苯酚問題再次導致利潤緊張？

Yeah, so In general, the supply-demand environment is supportive and constructive for acetone spread. Our GP certainly moved in Q3. It's seen in the chart here in the presentation. It has come off a bit from those peaks. But certainly, as long as lower global phenol operating rates persist, it does lend to that tighter market for us. We will watch certainly the demand side on paints and coatings, if that could influence any sort of moderation there.

是的，所以總的來說，供需環境對丙酮的傳播是支持和建設性的。我們的全科醫生確實在第三季發生了變化。在簡報中的圖表中可以看到這一點。它已經從那些峰值下降了一些。但可以肯定的是，只要全球苯酚開工率持續走低，我們的市場就會趨緊。我們肯定會關注油漆和塗料的需求面，如果這會影響那裡的任何形式的調節。

But -- and then certainly you have to look forward, as I mentioned, if building construction, when that starts to come back, that is really the key we're watching for, for when phenol operating rates would likely improve. We do think we have some time here in a continued constructive space.

但是，正如我所提到的，當然你必須向前看，如果建築施工開始恢復，這確實是我們正在關注的關鍵，因為苯酚開工率何時可能會改善。我們確實認為我們有一些時間在持續的建設性空間中。

And then lastly on -- China has been exporting a lot of ammonium sulfate. And I know in the near term, during the spring and fall, you're really more focused on US deliveries. But now as you move into the Latin American market, are you finding any significant amounts of Chinese product down there? Anything that might be affecting pricing, things like that? I know, again, China hasn't done much on urea, but they've been in effect substituting nitrogen exports through ammonium sulfate.

最後——中國一直在出口大量硫酸銨。我知道在短期內，在春季和秋季，你們確實更關注美國的交付。但現在當你進入拉丁美洲市場時，你是否發現那裡有大量的中國產品？有什麼可能影響定價之類的事情嗎？我再次知道，中國在尿素方面沒有做太多事情，但他們實際上已經透過硫酸銨取代了氮出口。

Yeah, most certainly, we watch that closely. And as you point out, on a rolling 12-month basis, they are really at peak levels of exports at this time, with the underlying operating rates remaining high there,

是的，當然，我們密切關注這一點。正如您所指出的，在滾動 12 個月的基礎上，他們目前確實處於出口峰值水平，基本開工率仍然很高，

China remains the primary source to Brazil at this point. So for us, focusing more on Central and other countries in South America, we have strong sales with long-term customers and -- yet there's that influence of the global pricing. But I think here, the sales team, the commercial execution, the strength of our relationships, and in operating in spaces that are key for us is serving us well.

目前中國仍是巴西的主要來源。因此，對我們來說，更多地關注中部和南美洲的其他國家，我們與長期客戶的銷售強勁，而且——但全球定價的影響也存在。但我認為，銷售團隊、商業執行、我們關係的強度以及對我們至關重要的空間運作都為我們提供了良好的服務。

Thank you. And this includes our question-and-answer session. I'd like to turn the conference back over to Erin Kane for closing remarks.

謝謝。這包括我們的問答環節。我想將會議轉回給艾琳凱恩（Erin Kane）致閉幕詞。

Great. Thank you for your time and interest this morning. Despite the challenges of the extended turnaround in the fourth quarter, our performance through 2024 reflects the resilience of our business model, our position as a diversified chemistry company, and our ability to navigate and execute in a multitude of environments. We hope today's call helps to continue clarifying the key strategies that we're executing across the organization to support safe, stable, and sustainable operations, improve through-cycle profitability, and total shareholder returns. With that, we look forward to speaking with you again next quarter. Stay safe and be well.

偉大的。感謝您今天早上的時間和興趣。儘管第四季度面臨長期週轉的挑戰，但我們到 2024 年的業績反映了我們業務模式的彈性、我們作為多元化化學公司的地位以及我們在多種環境中駕馭和執行的能力。我們希望今天的電話會議有助於繼續闡明我們在整個組織中執行的關鍵策略，以支持安全、穩定和永續運營，提高整個週期的獲利能力和股東總回報。因此，我們期待下個季度再次與您交談。保持安全並保持健康。

Thank you. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful weekend.

謝謝。今天的電話會議到此結束。我們感謝大家參加今天的演講。您現在可以斷開線路並度過一個愉快的周末。