Lyondellbasell Industries Nv · NYSE:LYB
Lyondellbasell Industries Nv — Goldman Sachs Industrials & Materials Conference 2019
31 slides from Lyondellbasell Industries Nv's conference presentation, May 15, 2019
Slide 1: Goldman Sachs Industrials & Materials Conference
Goldman Sachs Industrials & Materials Conference Thomas Aebischer EVP& CFO May 15, 2019 www.lyondellbasell.com 1
Slide 2: Cautionary Statement
Cautionary Statement The statements in this presentation relating to matters that are not historical facts are forward-looking statements. These forward-looking statements are based upon assumptions of management which are believed to be reasonable at the time made and are subject to significant ris
Slide 3: LyondellBasell: A Strong, Global Company Delivering Outstanding Performance
LyondellBasell A Strong, Global Company Delivering Outstanding Performance GLOBAL $40 billon enterprise value(1) Manufacturing in 24 countries and our products are sold in more than 100 countries LEADING(2) Producer of Producer of Producer of polyethylene in polypropylene in propylene oxide Europe N
Slide 4: LyondellBasell in 2018
LyondellBasell in 2018 Delivering Advancing Capturing Results Growth Opportunity $ 4.7 billion Completed acquisition of Capturing margin Net Income A. Schulman from improved markets and contracting in I&D $ 6.9 billion Premium Polyolefin EBITDA Recycling JV with Suez Creating value from innovation b
Slide 5: LyondellBasell – An Industry Leader in Safety Performance
LyondellBasell – An Industry Leader in Safety Performance Injuries per 200,000 Hours Worked 0.80 0.70 ACC Average 0.60 0.50 0.40 0.30 0.22 0.21 0.21 0.18 0.19 0.20 0.10 2015 2016 2017 2018 1Q19 Ferrara, Italy Source: American Chemistry Council (ACC), LYB. ACC data includes all available periods. Num
Slide 6: LYB Portfolio Diversity Increases Earnings Resiliency
LYB Portfolio Diversity Increases Earnings Resiliency Segment EBITDA O&P - AM O&P - EAI APS I&D Refining Technology Stable: USD, millions $6,000 Global portfolio 4,000 Improved: 2,000 I&D performance Technology revenue 20 17 20 17 20 18 20 18 1Q 19 L TM 1Q 19 L TM 2017 2018 1Q19 LTM LyondellBasell P
Slide 7: Industry Capacity Additions Serving Strong Global Demand
Industry Capacity Additions Serving Strong Global Demand Global Ethylene Supply & Demand Global Polyethylene Supply & Demand Capacity Capacity Demand Demand Effective Operating Rate - 1Q19 Forecast Effective Operating Rate - 1Q19 Forecast ton, millions ton, millions 250 100% 350 100% 300 95% 95% 200
Slide 8: LyondellBasell's Hyperzone HDPE Technology: A New Platform for Growth
LyondellBasell’s Hyperzone HDPE Technology A New Platform for Growth 1.1 billion pounds per year Estimated investment: ~$725 million Start-up: 3Q 2019 Estimated EBITDA(1): $170 - $210 million/year La Porte, Texas (1) For the purpose of this slide, estimated EBITDA for Hyperzone Polyethylene is volum
Slide 9: Advancing Our Leading PO/TBA Technology and Market Position
Advancing Our Leading PO/TBA Technology and Market Position 1.0 billion pounds Propylene Oxide, 2.2 billion pounds TBA Estimated investment: ~$2.4 billion Groundbreaking: August 2018 Start-up: 2021 Estimated EBITDA(1): $400 - $450 MM/year Value-driven growth supported by advantaged feedsto
Slide 10: Refining: Margin Outlook Improving for the Balance of 2019
Refining: Margin Outlook Improving for the Balance of 2019 EBITDA Refinery Outlook USD, millions $200 Improved reliability since 2017 150 Full capability to meet Tier 3 gasoline sulfur 100 specifications 50 Poised to benefit from January 2020 IMO 2017 2018 1Q19 LTM marine fuel oil sulfur regul
Slide 11: Circular Steam Project – Advancing a Sustainable Solution
Circular Steam Project – Advancing a Sustainable Solution Reduces energy to support a sustainable economy Contributes to Dutch government CO2 reduction targets Reduces operating cost structure Rotterdam, The Netherlands www.lyondellbasell.com 11
Slide 12: Strong, Consistent Cash Generation
Strong, Consistent Cash Generation Cash From Operating Activities ■ 1Q19 LTM Free Operating Cash Flow(1): $4.1 B Free Operating Cash Flow Sustaining Capex USD, millions $7,000 6,000 ■ 1Q19 LTM Sustaining Capex: $1.0 B 5,000 4,000 3,000 ■ 1Q19 Ending Total Liquidity(2): $8.4 B 2,000 1,000 2015 2016 2
Slide 13: Cash Generation Funding Growth Investments and Shareholder Returns
Cash Generation Funding Growth Investments and Shareholder Returns Growing through investment: $2.1 B in capex Acquired A. Schulman 2018 Cash from Operating Activities: $5.5 B Returning value to shareholders: $3.4 B in dividends & share repurchases 19.2 million shares repurchased Cash from O
Slide 14: Our Capital Deployment Strategy Remains Consistent
Our Capital Deployment Strategy Remains Consistent Sources 2013-2018 Uses 2019-2023 Uses Priority Optional Balance Balance Sheet Inorganic Sheet Capacity Opportunities Capacity M&A Share Share Repurchase Repurchase Growth Cash From CAPEX Operating Growth Activities CAPEX Dividends Dividends Base Bas
Slide 15: Tangible Earnings Growth Over the Next Twelve Months
Tangible Earnings Growth Over the Next Twelve Months Acquisition of Hyperzone I&D Refinery Refining A. Schulman HDPE Improvement Reliability Markets Vertical Poised to Capture Sustainable Contract Increased Focus on Well Positioned for Integration HDPE Demand Improvements Operational Excellence IMO
Slide 16: Strategic Goals to Guide our Growth
Strategic Goals to Guide our Growth Leverage Core Strengths: Safe & reliable operations Cost discipline Global reach and broad portfolio To Deliver Consistent Advance Profitable Growth: Top-Quartile Focus on advantaged and TSR differentiated products and markets Capture Opportunities: Cons
Slide 17: Appendix
Appendix www.lyondellbasell.com 17
Slide 18: Global Macro Trends - Demographics Driving Demand
Global Macro Trends - Demographics Driving Demand Annual Upper/Middle Class World PE and PP Demand Household Growth lb., billions (2019-2022) 300 PE PP 250 200 ~4% China 150 100 ~6% India ’90 – ’18 ’13 – ’18 ’17 – ‘18 50 PE: 4.4% PE: 4.5% PE: 5.5% PP: 6.5% PP: 5.6% PP: 5.3% 1990 1995 2000 2005 2010
Slide 19: Majority of New N. American Industry Capacity Already in the Market
Majority of New N. American Industry Capacity Already in the Market Status & Impact of New Capacity 2016-2019: N. America Capacity Startups(1) Ethylene units are running well ~ 70% of 24 Blbs of Ethylene New PE capacity is in the market ~ 75% of 19 Blbs of Polyethylene PE exports are expected
Slide 20: Advanced Polymer Solutions: Creating a New Platform for Growth
Advanced Polymer Solutions: Creating a New Platform for Growth 2017 Sales Volume(1) 2017 EBITDA(2) A. Schulman Olefins, PE & PP PPC Catalloy Catalloy &&PB-1 PB-1 A. Schulman Olefins, PE & PP PPC,Catalloy PPC, Catalloy&&PB-1 PB-1 lbs., billions USD, billions EBITDA shift to 16 $3.0 Product shift to n
Slide 21: Advanced Polymer Solutions: A New Segment Focusing on Broad and Attractive Markets
Advanced Polymer Solutions: A New Segment Focusing on Broad and Attractive Markets Compounding & Solutions Advanced Polymers Polypropylene Masterbatch Catalloy Compounds Engineered Engineered Polybutene-1 Composites Plastics Custom Specialty Performance Powders Colors www.lyondellbasell.com 21
Slide 22: Information Related to Financial Measures
Information Related to Financial Measures This presentation makes reference to certain “non-GAAP” financial measures as defined in Regulation G of the U.S. Securities Exchange Act of 1934, as amended. The non-GAAP measures we have presented include EBITDA. We report our financial results in accordan
Slide 23: Enterprise Value
Enterprise Value Calculation of LYB Enterprise Value (EV) In Million of Dollars except for common shares outstanding Common shares outstanding, March 31, 2019 370,326,103 Multiplied by: Closing share price, March 31, 2019 $ 84.08 Market capitalization $ 31,137 Add: Current maturities of long-term de
Slide 24: EBITDA by Segment to EBITDA
EBITDA by Segment to EBITDA Reconciliation of Segment EBITDA to EBITDA Last Twelve Months Ended For the Years Ended December 31, March 31, In Millions of Dollars 2016 2017 2018 2019 Segment EBITDA: Olefins & Polyolefins - Americas $ 2,788 $ 2,899 $ 2,762 $ 2,522 Olefins & Polyolefins - EAI 1,729 1,9
Slide 25: Net Income to EBITDA
Net Income to EBITDA Reconciliation of Net Income to EBITDA Last Twelve Months Ended For the Years Ended December 31, March 31, In Millions of Dollars 2016 2017 2018 2019 Net income $ 3,837 $ 4,877 $ 4,690 $ 4,276 Loss from discontinued operations 10 18 8 8 Income from continuing operations 3,847 4,
Slide 26: Free Operating Cash Flow to Net Cash Provided by Operating Activities
Free Operating Cash Flow to Net Cash Provided by Operating Activities Reconciliation of Free Operating Cash Flow to Net Cash Provided by Operating Activities Last Twelve Months Ended For the Years Ended December 31, March 31, In Millions of Dollars 2015 2016 2017 2018 2019 Free operating cash flow $
Slide 27: Free Cash Flow Yield
Free Cash Flow Yield Calculation of Free Operating Cash Flow Yield Year Ended December 31, In Millions of Dollars (except share data) 2018 Net cash provided by operating activities $ 5,471 Less: Sustaining (maintenance and HSE) capital expenditures 1,052 Free operating cash flow $ 4,419 Divided by:
Slide 28: Return on Invested Capital
Return on Invested Capital Calculation of LYB Return on Invested Capital (ROIC) For the Years Ended December 31, In Million of Dollars 2016 2017 2018 Income from continuing operations $ 4,895 $ 4,698 Less: Tax benefit due to change in tax law from U.S. Tax Cuts and Jobs Act 819 Non-cash tax settleme
Slide 29: Cash and Liquid Investments and Total Liquidity
Cash and Liquid Investments and Total Liquidity Components of Cash and Liquid Investments and Total Liquidity March 31, In Millions of Dollars 2019 Cash and cash equivalents and restricted cash and cash equivalents $ 358 Short-term investments 423 Repurchase agreements 534 Cash and liquid investment
Slide 30: Dividends and Share Repurchases
Dividends and Share Repurchases Schedule of Spending for Dividends and Share Repurchases For the Years Ended December 31, In Millions of Dollars 2014 2015 2016 2017 2018 Dividends $ 1,403 $ 1,410 $ 1,395 $ 1,415 $ 1,554 Repurchases of ordinary shares 5,788 4,656 2,938 866 1,854 Total $ 7,191 $ 6,066
Slide 31: Cash from Operating Activities as a Percent of Average Enterprise Value
Cash from Operating Activities as a Percent of Average Enterprise Value Cash from Operating Activities as a Percent of Average Enterprise Value Last Twelve Months Ended For the Years Ended December 31, March 31, In Millions of Dollars, except share amounts 2014 2015 2016 2017 2018 2019 Cash from ope
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