Lyondellbasell Industries Nv · NYSE:LYB
Lyondellbasell Industries Nv — Deutsche Bank Global Industrials & Materials Summit 2018
32 slides from Lyondellbasell Industries Nv's conference presentation, Jun 7, 2018
Slide 1: Deutsche Bank Global Industrials & Materials Summit
Deutsche Bank Global Industrials & Materials Summit Jim Guilfoyle SVP, Global Intermediates & Derivatives and Global Supply Chain June 7, 2018 www.lyondellbasell.com
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: Additional Information
Additional Information Additional Information and Where to Find It This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. This communication may be deemed to be solicitation material in respect of the p
Slide 4: LyondellBasell: A Strong, Global Company Delivering Outstanding Performance
LyondellBasell A Strong, Global Company Delivering Outstanding Performance GLOBAL $47 billon enterprise value(1) 13,400 employees globally, mostly in the U.S. and Europe with others in strategic regions Manufacturing in 17 countries and our products are sold in approximately 100 countries LEADING(2)
Slide 5: LyondellBasell in 2017
LyondellBasell in 2017 Delivering Advancing Capturing Results Growth Opportunity $ 4.9 billion Improving Net Income Refinery Reliability Groundbreaking Final Investment Decision for Hyperzone HDPE for World’s Largest $ 7.1 billion 1.1 billion lb PO/TBA Plant EBITDA (+8% vs 2016) Innovation 8.4% in T
Slide 6: LYB Portfolio Diversity Increases Earnings Resiliency
LYB Portfolio Diversity Increases Earnings Resiliency O&P Americas and O&P EAI EBITDA I&D, Refining and Technology EBITDA O&P Americas and O&P EAI EBITDA LCM I&D, Refining and Technology EBITDA LCM 2014-17 Average EBITDA ex. LCM 2014-17 Average EBITDA ex. LCM USD, millions USD, millions $6,000 $2,50
Slide 7: Industry Capacity Additions Serving Strong Global Demand Growth
Industry Capacity Additions Serving Strong Global Demand Growth Global Ethylene Supply & Demand(1) Global Ethylene Supply & Demand Growth(1) Capacity Demand Capacity Growth Demand Growth Effective Operating Rate - 1Q17 Forecast Effective Operating Rate - 1Q18 Forecast ~7 Blb in excess capacity growt
Slide 8: LYB Polyethylene Products Aligned with Global Market Growth of 4%
LYB Polyethylene Products Aligned with Global Market Growth of 4%(1) Strong LYB Presence China PE Trade Deficit: 38 Blbs by 2022(2) lbs., billions ■ Film & Sheet 2007 2012 2017 2022 ■ Pressure Pipe -10 ■ Automotive Fuel Tanks -20 -30 ■ Wire & Cable -40 PE Demand Growth(1): U.S./Canada 3.7%, Western
Slide 9: LYB's Hyperzone PE Technology is Timed to Capture HDPE Demand
LYB’s Hyperzone PE Technology is Timed to Capture HDPE Demand Capacity Additions Demand Growth World Scale Plants (1) 15 10 HDPE 5 2015-2017 2018-2020 Estimate World Scale Plants (1) 15 10 LLDPE 5 La Porte, Texas 2015-2017 2018-2020 Estimate La Porte Hyperzone HDPE World Scale Plants (1) ■ 1.1 billi
Slide 10: Intermediates and Derivatives: A Platform for Earnings Stability & Growth
Intermediates and Derivatives: A Platform for Earnings Stability & Growth EBITDA (ex. LCM) History Key Messages EBITDA LCM Stable earnings and consistent cash 2014-17 Average EBITDA ex. LCM generation USD, millions $2,000 Broad product portfolio with feedstock 1,500 integration 1,000 Leading m
Slide 11: 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 ■ Est. cost: ~$2.4 billion ■ Groundbreaking – Mid 2018 ■ Startup 2021 ■ Estimated EBITDA(1): $350 - $450 MM/year Value-driven growth supported by advantaged feedstocks and techn
Slide 12: Improved Refining Reliability Producing Results
Improved Refining Reliability Producing Results EBITDA Refinery Outlook EBITDA LCM USD, millions ■ Improved reliability increased operating rates $600 and throughput since 2017 ■ Increased profitability driven by strong diesel 400 demand and improved heavy/light crude differentials 200 ■ Full capabi
Slide 13: Strong, Consistent Cash Generation
Strong, Consistent Cash Generation LYB Cash From Operating Activities ■ 1Q18 LTM Capex: $1.6 billion USD, millions Free Cash Flow Capex $7,000 6,000 ■ 1Q18 LTM Free Cash Flow(1): $4.0 billion 5,000 4,000 3,000 ■ 1Q18 Ending Total Liquidity(2): $6.9 billion 2,000 1,000 2014 2015 2016 2017 1Q18 LTM Ca
Slide 14: Profitability Supports Reinvestment for Value-Driven Growth
Profitability Supports Reinvestment for Value-Driven Growth Sources 2013-2017 Uses 2018-2022 Uses Priority Optional Balance Sheet Balance Capacity Inorganic Sheet Opportunities Capacity Share Share Repurchase Repurchase Growth CAPEX Cash From Operating Growth Activities CAPEX Dividends Dividends Bas
Slide 15: Regular Cadence of Investment in LyondellBasell's Organic Growth
Regular Cadence of Investment in LyondellBasell’s Organic Growth Estimated Capital Large Profit Generating Projects Allocation(2) Other Potential Projects Estimated EBITDA(1) Large Potential Projects Scope Projected ($MM/year) (MM lbs.) Start-Up Projects Underway ’15-’17 Avg. Margins Base CAPEX Unde
Slide 16: LyondellBasell Currently Participates in One of Several Advanced Polymers Markets
LyondellBasell Currently Participates in One of Several Advanced Polymers Markets Polyethylene Polypropylene Engineered Polymers LyondellBasell’s PP Compounding business is a global leader in automotive www.lyondellbasell.com 16
Slide 17: Combination Enables Vertically Integrated Solutions and Expands Offering
Combination Enables Vertically Integrated Solutions and Expands Offering Polyethylene Polypropylene Engineered Polymers Comprehensive customer solutions for broad and attractive markets www.lyondellbasell.com 17
Slide 18: Combination Creates Value, Strengthens Earnings Growth and Stability
Combination Creates Value, Strengthens Earnings Growth and Stability (2) (1) Combined (3) Businesses LTM Revenue $2.1 billion $2.5 billion $4.6 billion LTM Adjusted EBITDA $241 million $205 million $446 million LTM Adjusted EBITDA Margin(4) 11.3% 8.1% 9.5% LTM Sales Volume 2.5 billion pounds 2.4 bil
Slide 19: A. Schulman Acquisition: Creating a Platform for Growth
A. Schulman Acquisition: Creating a Platform for Growth Strategic Rationale Financial Metrics(1) ■ Vertical integration ■ Purchase price = $2.25 billion ■ New growth platform for organic and ■ 6.3x LTM 1Q18 Adjusted EBITDA, including inorganic opportunities synergies ■ End-to-end customer solutions
Slide 20: Growth Guided by Strategic Goals
Growth Guided by Strategic Goals Leverage Core Strengths: Safe & reliable operations Cost discipline Global reach and broad portfolio Consistent Top-Quartile Advance Profitable Growth: TSR Focus on advantaged and differentiated products and markets Capture Opportunities: Consistent with LY
Slide 21: Appendix
Appendix www.lyondellbasell.com 21
Slide 22: Global Macro Trends - Demographics Driving Demand
Global Macro Trends - Demographics Driving Demand Upper/Middle Class Households World PE and PP Demand Households, millions lbs., billions 400 China India Western Europe U.S. 250 PE PP 300 200 150 200 100 100 50 ’90 – ’16 ’11 – ’16 ’15 – ‘16 PE: 4.4% PE: 3.6% PE: 3.9% 0 PP: 6.6% PP: 4.9% PP: 4.4% 20
Slide 23: 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 diluted earnings per share excluding LCM, EBITDA, E
Slide 24: Enterprise Value
Enterprise Value Calculation of Enterprise Value March 31, In Millions of Dollars, except share amounts 2018 Common Shares Outstanding 393,482,424 Closing Price $ 105.68 Market Capitalization 41,583 Current Maturities of Long Term Debt 5 Short-Term Debt 77 Long-Term Debt 8,531 Less: Cash and Cash Eq
Slide 25: EBITDA Excluding LCM Adjustments to EBITDA
EBITDA Excluding LCM Adjustments to EBITDA Reconciliation of EBITDA Excluding Lower of Cost or Market Inventory Valuation Adjustments ("LCM Adjustments") to EBITDA For the Year For the Year Last Twelve For the Years Ended For the Three Months Ended Ended Ended For the Three Months Ended Months Avera
Slide 26: Net Income to EBITDA
Net Income to EBITDA Reconciliation of Net Income To EBITDA For the Year For the Year Last Twelve Three Months Ended Ended Ended Three Months Ended Months December 31, December 31, December 31, March 31, June 30, September 30, December 31, December 31, December 31, March 31, March 31, March 31, In M
Slide 27: Free Cash Flow Yield
Free Cash Flow Yield Calculation of Free Cash Flow Yield Year Ended December 31, In Millions of Dollars (except share data) 2017 Net Cash Provided by Operating Activities $ 5,206 Less: Capital Expenditures 1,547 Free Cash Flow $ 3,659 Divided by: Market Capital: Common stock outstanding 394,512,054
Slide 28: Return on Invested Capital
Return on Invested Capital Calculation of LYB Return on Invested Capital (ROIC) Years Ended December 31, In Million of Dollars 2016 2017 Income from Continuing Operations $ 4,895 Less: Tax Benefit due to change in tax law from U.S. Tax Cuts and Jobs Act 819 Add: Interest Expense, Net 467 Effective T
Slide 29: Diluted EPS Excluding LCM Adjustments to Diluted EPS
Diluted EPS Excluding LCM Adjustments to Diluted EPS Reconciliation of Diluted EPS Excluding LCM Adjustments to Diluted EPS Last Twelve Months For the Years Ended December 31, March 31, 2014 2015 2016 2017 2018 Diluted Earnings Per Share Excluding LCM Adjustments $ 8.91 $ 10.34 $ 9.18 $ 12.23 $ 13.3
Slide 30: Free Cash Flow to Net Cash Provided by Operating Activities
Free Cash Flow to Net Cash Provided by Operating Activities Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities Last Twelve Years Ended December 31, Year Ended Three Months Ended Months December 31, March 31, March 31, March 31, In Millions of Dollars 2014 2015 2016 2017 20
Slide 31: 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 2018 Cash and Cash Equivalents and Restricted Cash $ 1,840 Short-Term Investments 1,042 Repurchase Agreements 586 Cash and Liquid Investments 3,468 Availabil
Slide 32: 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 For the Years Ended December 31, Months March 31, In Millions of Dollars, except share amounts 2014 2015 2016 2017 2018 Cash from Operating Acti
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