Orbia Advance Corp. Sab De Cv · BMV:ORBIA
Orbia Advance Corp. Sab De Cv — Investor Day (May 2022)
126 slides from Orbia Advance Corp. Sab De Cv's investor day presentation, May 2022
Slide 1: Welcome to Investor Day
Welcome to Investor Day Orbia Advance Corporation Purpose-Driven. Customer-Focused. Addressing World Challenges.
Slide 2: Safe Harbor
Safe Harbor In addition to historical information, this presentation contains "forward-looking" statements that reflect management's expectations for the future. The words “anticipate,” “believe,” “expect,” “hope,” “have the intention of,” “might,” “plan,” “should” and similar expressions generally
Slide 3: Welcome to Orbia's Investor Day
Welcome to Orbia’s Investor Day 9:00AM Welcome 11:00AM Growing More with Less Gerardo Lozoya Latapi & Josh Preneta Gaby Miodownik Investor Relations Director & Corporate Vice President of Strategy Executive Vice President & President, Precision Agriculture | Netafim Chairman’s Remarks Enabling Advan
Slide 4: We Are Orbia | Global and Purpose-Driven
We Are Orbia | Global and Purpose- Driven Sameer Bharadwaj Chief Executive Officer
Slide 5: Key Messages
Key Messages 01 Harnessing the power of material science and innovation to serve customer needs, address world challenges and provide sustainable solutions 02 Investing in profitable growth, leveraging our uniquely advantaged positions to bring differentiated solutions to market 03 Maximizing the va
Slide 6: A Force for the World
A Force for the World Driven by purpose and unified by values, we choose to work on the orb • bia Orb Bia toughest challenges The Latin word for a spherical globe A word from Greek mythology for the personification of force From mine to market, ground to home and lab to everyday life… OUR PURPOSE CH
Slide 7: Global Imprint and Impact
Global Imprint and Impact Diversified Global Footprint Revenue1 by Region 3% 7% Africa Asia Amsterdam, Netherlands 35% Europe Boston, MA USA 22% South Mexico City, Mexico Tel Aviv, America $8.8B 2021 Revenue Israel 33% North America ■ Operations and commercial activities 4 Global strategic hubs ORBI
Slide 8: Safety of Our People and Communities Comes First
Safety of Our People and Communities Comes First 2.3 2.0 2.0 1.9 1.9 1.7 1.8 Culture 1.1 0.8 0.8 Operational Tools & 0.6 Discipline Technology N/A2 2016 2017 2018 2019 2020 2021 Orbia TRIR Chemical Manufacturing Industry TRIR Benchmark • 78% reduction in TRIR1 2015–2021 • 55% below industry benchmar
Slide 9: People are Our Most Valuable Asset
People are Our Most Valuable Asset Our people strategy is to create enduring experiences for our employees. Global Three strategic pillars guide our actions: Empowered Fulfillment Development Well-Being Fostering an Providing training, Offering programs Diverse inclusive culture innovation and that
Slide 10: Leading Positions Across All Businesses
Leading Positions Across All Businesses #1 Global specialty #1 in Europe #1 Globally3 #1 in the U.S.4 #1 Global fluorspar PVC producer1 producer5 #6 #1 TOP 3 Global general PVC in LATAM producer2 in Europe4 Advantaged player in PVC Leading global provider Global market leader in precision Market lea
Slide 11: Customer-Focused and Addressing World Challenges
Customer-Focused and Addressing World Challenges Sanitation & Water Health & Food & Information Access Climate Resilience Management Well-Being Water Security & Connectivity & Decarbonization 3 of 5 5 of 5 3 of 5 3 of 5 5 of 5 Business groups Business groups Business groups Business groups Business
Slide 12: Providing Access to Clean Water and Sanitation
Providing Access to Clean Water and Sanitation World Challenge Access to clean water and sanitation critical as the world grows ~2B People without access to clean drinking water in 2020 Customer Solutions Orbia provides PVC for use in pipes and fittings to deliver clean water and sanitation to peopl
Slide 13: Enhancing Urban Climate Resilience
Enhancing Urban Climate Resilience World Challenge Cities worldwide are under stress with population growth, aging infrastructure, flooding, droughts, pollution and sinking land ~2B Expected urban population growth through 2045; from 4 to 6B1 Customer Solutions Orbia provides resilient and sustainab
Slide 14: Helping the World Grow More with Less
Helping the World Grow More with Less World Challenge By 2050, feeding a planet of 10 billion people will require an estimated 60% increase in agricultural production >10B World population by 2050 Customer Solutions Orbia delivers resource-efficient irrigation solutions to farmers for food security
Slide 15: Enabling Connectivity and Opening Access
Enabling Connectivity and Opening Access World Challenge1 Exponential increase in connectivity demand to widen internet access, enable remote working and scale cloud services $900B Investment in cellular networks 2022-2027; • ~$90B in subsidies/funding in North America Data center investments to gro
Slide 16: Driving the Electrified Future
Driving the Electrified Future World Challenge • Demand for lithium-ion battery storage is projected to reach 5-10 Terawatt hours (TWh) by 2030, from ~0.5 TWh today1 • Fluorine is a key component of a lithium-ion battery, >30M Electric vehicles sold 10% by mass2 worldwide annually by 2030 • Meeting
Slide 17: Orbia's Strategy for Value Creation
Orbia’s Strategy for Value Creation Three Key Focus Areas 1 2 3 Invest in Maximize Create profitable growth the value of shareholder and innovation integration value by being • To leverage our uniquely across Orbia thoughtful advantaged position and and the value stewards of cutting-edge technologie
Slide 18: Execution of Our Strategy Drives Significant Earnings Growth
Execution of Our Strategy Drives Significant Earnings Growth Annual EBITDA Growth Target 2022-2027 Polymer Building & Precision Data Fluorinated Solutions Infrastructure Agriculture Communications Solutions Orbia Total 8% – 10% 7% – 9% 10% – 12% >15% >15% 11% – 14% Growth Components 70% – 80% 20% –
Slide 19: Invest in Profitable Growth to Capture and Exceed Market Growth Rates
1 Invest in Growth and Innovation Orbia Plans to Invest in Profitable Growth to Capture and Exceed Market Growth Rates Targeted Orbia Revenue Market Growth Rate +/-1%1 Growth Rate +/-1%2 Market Growth Drivers • Basic needs for clean water, sanitation, building safety and medical products Polymer Sol
Slide 20: Vertical Integration Enables Low-Cost PVC Production
2 Leverage Vertical Integration Vertical Integration Enables Low-Cost PVC Production and Security of Supply Downstream Orbia businesses Specialty Ethane Ethylene General PVC Compounds VCM PVC Specialty Building & Chlorine PVC Infrastructure Brine Precision Caustic Soda Agriculture Value-added byprod
Slide 21: Mine to Market Integration for Today and Tomorrow
2 Leverage Vertical Integration Mine to Market Integration for Today and Tomorrow Fluorine Applications: mines Metallurgical- grade fluorspar High performance steels (Metspar) and cements Medical Applications: Acid-grade propellants Inhalers fluorspar Hydrofluoric (Acidspar) acid Applications: Heati
Slide 22: Continuing to Realize Synergies Across Our Business Groups
2 Leverage Vertical Integration Continuing to Realize Synergies Across Our Business Groups Synergy Vertical Innovation Geographic Asset Category Integration Mindset Synergies Synergies Description • Supply security • Need sharing and • Enter new markets • Share resources • Improved economics collabo
Slide 23: Highly Disciplined Approach to Investments in Profitable Growth
3 Create Shareholder Value Highly Disciplined Approach to Investments in Profitable Growth 70 - 80% of our growth is captured in core markets • Rich pipeline of opportunities • Expansions within current within our existing portfolio businesses and existing markets • Projects are highly actionable, •
Slide 24: The Next Phase in Our Transformation
3 Create Shareholder Value The Next Phase in Our Transformation Deployment of an excellence Example areas operating system across our of benefits: business groups Safety Sustainability ü Innovation • Common tools, ü M&A execution processes and playbooks ü Safety tools and processes Commercial Financ
Slide 25: Accelerating Digital Transformation @ Orbia
3 Create Shareholder Value Accelerating Digital Transformation @ Orbia Foundational IT Customer-Centric Digital Future-Fit Digital A modern, resilient, and Digitalized commercial Harnessing innovation, secure core excellence enablement data and analytics • Aligned Enterprise Resource • E-commerce an
Slide 26: Target CAGR 2022-2027: Revenue and EBITDA
Target CAGR1 2022-2027: Revenue 8 – 11% and EBITDA 11% – 14% Orbia Revenue Target (in $B) Orbia EBITDA Target (in $B) $13.0 – $15.0 $0.2B - $0.3 $3.1 - $3.5 $1.0 – $1.3 $3.2 – $4.2 $1.2 – $1.3 $8.9 – $9.5 $1.75 - $1.9 2022E Core Business Product & Services 2027 Target 2022E Core Business Product & S
Slide 27: Experienced in Complex Operating Environments
Experienced in Complex Operating Environments Areas of Focus Management Approaches Cyber/Compliance • Cybersecurity risk • World-class cybersecurity team • Ethics and compliance • Strong Code of Ethics; extensive worldwide training; reporting hotline Operational • Mine safety and tailings • Strict o
Slide 28: Resilience Throughout Economic Cycles
Resilience Throughout Economic Cycles Financial Structural • Low leverage and conservative • Low-cost positions in Polymer approach to our balance sheet, Solutions and Fluorinated Solutions, targeting Net Debt/EBITDA <2.5 profitable even in challenging • Operating cash flow in excess market conditio
Slide 29: Investment Thesis
Investment Thesis 01 Harnessing the power of material science and innovation to serve customer needs, address world problems and provide sustainable solutions 02 Investing in profitable growth, leveraging our uniquely advantaged positions to bring differentiated and value- added solutions to market
Slide 30: Enabling a Sustainable Future
Enabling a Sustainable Future Tania Rabasa Kovacs Corporate Vice President of Sustainability and Corporate Affairs
Slide 31: Key Messages
Key Messages 01 Progressing on our science-based commitments to carbon neutrality and setting new targets 02 Aspiring at going beyond net zero with focus on customers 03 Strong governance structure enables our ESG ambitions to create impact at speed and scale Orbia Investor Day 2022 | 31
Slide 32: Progressing on Our Path to Carbon Neutrality and Setting New Targets
Progressing on Our Path to Carbon Neutrality and Setting New Targets Our pathway1 is backed by science-based commitments 2025 2030 2050 Environmental Safety Waste Management Air Emissions Climate Change TRIR <0.2 for 100% of facilities 100% of sites certified Reduce sulfur Climate Change Climate Cha
Slide 33: Aspiring to Net Zero With Focus on Customers
Aspiring to Net Zero With Focus on Customers Decarbonization and sustainability solutions guide our work in material science and innovation Running Low-Impact Delivering Sustainable Seeding New Businesses and Resilient Operations Solutions for a Net-Positive World Seeking opportunities to minimize o
Slide 34: Running Low-Impact and Resilient Operations Across Business Groups
Running Low-Impact and Resilient Operations Across Business Groups Optimizing Transitioning for Efficiency to Renewables • Installation of more efficient • Renewables increased 28% equipment in 2021 vs. 2020 • Co-generation in place and plans to implement tri-generation at relevant sites Reusing and
Slide 35: Delivering Sustainable Solutions
Delivering Sustainable Solutions Health & Well-Being Climate Resilience & Decarbonization Resins and compounds used for essential Orbia is contributing Indoor Climate Solutions increase energy to addressing the United medical applications efficiency by 34% Medical propellants used in asthma treatmen
Slide 36: Seeding New Businesses for a Net Positive World
Seeding New Businesses for a Net Positive World We are exploring several sub-categories in the broad Climate Tech1 space where we can add value: Energy Mobility & Transport Food, Agriculture & Land Use Heavy Industry Built Environment Production, development Transition to electrical Efficient soluti
Slide 37: Strong Governance Structure Enables Our ESG Ambitions
Strong Governance Structure Enables Our ESG1 Ambitions Effective Board Oversight & Risk Management ü Board of Directors oversees ESG strategy through Corporate Board of Directors Practices & Sustainability Committee ü The Audit Committee assists the Board in identifying, assessing Corporate Practice
Slide 38: Key Takeaways
Key Takeaways 01 We have established ambitious commitments, made significant progress across ESG practices in the past few years and set new impactful targets 02 We will deliver long-term value by focusing on climate action both in our operations and also through our offerings and investments 03 We
Slide 39: Orbia's Sustainability Reporting Suite
Orbia’s Sustainability Reporting Suite DOWNLOAD REPORT DOWNLOAD REPORT DOWNLOAD REPORT Learn more at orbia.com/sustainability Orbia Investor Day 2022 | 39
Slide 40: Positioned to Grow in a Favorable Market Environment
Positioned to Grow in a Favorable Market Environment Nick Ballas Executive Vice President & President, Orbia Polymer Solutions (Vestolit)
Slide 41: Key Messages
Key Messages 01 Leading market position in polyvinyl chloride (PVC) resins and polymer compounds with state-of-the-art operational platform 02 Low-cost position driven by vertical integration and access to U.S. Gulf Coast economics with an advantaged geographic footprint that provides access to attr
Slide 42: An industry leader in PVC resins, polymer compounds and derivative chemicals
An industry leader in the production of PVC resins, polymer compounds and derivative chemicals Enabling solutions for: $3.5B $1.1B 2021 Revenues 1 2021 EBITDA • Clean water and sanitation 3-year CAGR: 11.8% 3-year CAGR: 28.9% • Affordable housing and infrastructure • Food and water security • City-s
Slide 43: Addressing Customer Needs and World Challenges
Addressing Customer Needs and World Challenges Population Growth PVC Derivative Products 10B Provides difficult-to-replicate characteristics: Offers essential products for critical end-uses: People are expected to live on Earth • Cost-efficient polymer • Building by 2050—25% more than today1 • Lower
Slide 44: Applications for Advancing Life | Robust Growth Potential
Applications for Advancing Life | Robust Growth Potential Building Infrastructure Cleaning & Automotive Water Medical & Food & PVC: PVC: Sanitation PVC: Treatment Pharmaceutical Beverage Flooring, windows, Pipes and fittings Derivatives: Artificial leather, Derivatives: PVC: PVC: carpets, wire and S
Slide 45: Strong, Stable PVC Demand Growth Over Decades
Strong, Stable PVC Demand Growth Over Decades Global PVC Demand1 2010 – 2030E • PVC demand driven by building 65 and infrastructure industries and 2.6% global urbanization 57 CAGR 4.5% • Demand expected to accelerate after COVID-19 pandemic and Million Metric Tons 46 CAGR 2.3% then resume long-term
Slide 46: PVC Supply Will Remain Constrained
PVC Supply Will Remain Constrained… Global PVC Supply1 2011 – 2025 Expansions & Closures • Under-investment in new capacity in the industry over the last 10 years 4.3 • Announced expansions indicate that PVC supply additions will not keep pace with demand growth Million Metric Tons 2.4 2.5 • Aging a
Slide 47: Leading to High Operating Rates and a Favorable Market Environment
…Leading to High Operating Rates and a Favorable Market Environment PVC Supply, Demand and Operating Rates 2010 – 2030E 100 120% • Operating rates have grown steadily through this time period 90 102% • 2021 supply disruptions 80 100% 90% evidenced an already tight 84% industry balance 70 79% 76% 75%
Slide 48: Planned Investment in the PVC Value Chain
1 Invest in Growth and Innovation Planned Investment in the PVC Value Chain1 Strengthening our low-cost position; security of supply and integration value to downstream businesses Strategic Rationale >$650M Estimated EBITDA Contribution by 1-million-ton • Supply/demand imbalance creating favorable i
Slide 49: Our Uniquely Advantaged Position at the Low End of the Supply Curve
1 Invest in Growth and Innovation Our Uniquely Advantaged Position Places Us at the Low End of the Industry Supply Curve • Orbia’s integration and access to PVC Supply Cost Curve low-cost raw materials positions Capacity: us at left side of the supply curve 2,500 59 million today tons • Low-cost pla
Slide 50: Investing in Growth and Innovation
1 Invest in Growth and Innovation Investing in Growth and Innovation Integrated Chlor-Vinyl Specialty PVC Low emissions and PVC Capacity Global Growth process technology, with maximum use • Increase of 1M mt or 70% of • Increase of 110 kt of Specialty General Resins PVC capacity Resins capacity of c
Slide 51: Deploying Our Excellence Operating System
3 Create Shareholder Value Deploying Our Excellence Operating System • Direct sales model with strong long-term relationships • Operated system of plants at 90+% utilization in 2021 • 30+ year relationships with top 10 customers • Utilizing dynamic modeling to optimize Commercial • Centralized comme
Slide 52: Execution of Our Plan will Lead Us to…
Execution of Our Plan will Lead Us to… Strengthened position at the low end Significant growth in EBITDA of the industry supply curve and cashflow Industry leader in sustainability through Increased global PVC market shift to clean energy, product development, position from #6 to #4 innovation and c
Slide 53: Positioned to Grow in a Favorable Market Environment
Positioned to Grow in a Favorable Market Environment Gautam Nivarthy Executive Vice President & President, Orbia Polymer Solutions (Alphagary)
Slide 54: Orbia Alphagary | Developing Innovative Material Solutions
Orbia Alphagary | Developing Innovative Material Solutions for Customer Needs in Sizable, High-Growth Markets Differentiated Capabilities Global Reach Design, development and manufacture of a wide variety of polymer Regions Served Manufacturing Locations compounded materials as well as a range of co
Slide 55: Solving Critical World Challenges with Specialty Compounds
Solving Critical World Challenges with Specialty Compounds Safer and more efficient Medical devices for Sustainable water transportation data and power transmission healthier living and building infrastructure Wire and cable for data transmission in cell Medical applications such as tubing and rigid
Slide 56: Investing in Growth and Innovation
1 Invest in Growth and Innovation Investing in Growth and Innovation Core Business • Wire and cable offerings for data • Medical compounds for • Offerings for the circular economy communications, power and equipment and accessories in with enhanced recycled content, emerging growth applications dial
Slide 57: Deploying Our Excellence Operating System
3 Create Shareholder Value Deploying Our Excellence Operating System • Innovation through close collaboration • Installing IoT solutions to allow for with customers dynamic monitoring of plant performance • Commercial excellence program to drive • Lean manufacturing focus to achieve Commercial consi
Slide 58: Key Takeaways
Key Takeaways 01 Leading market position in polyvinyl chloride (PVC) resins and polymer compounds with state-of-the-art operational platform Low-cost strategy driven by vertical integration and access to 02 U.S. Gulf Coast economics with an advantaged geographic footprint that provides access to att
Slide 59: Building a Better Future
Building a Better Future Maarten Roef Executive Vice President & President, Orbia Building & Infrastructure (Wavin)
Slide 60: Key Messages
Key Messages 01 Globally integrated market leader and provider of sustainability-linked pipe and fittings products and services for building and infrastructure markets with scale 02 Clear intellectual property and thought leader with centralized R&D dedicated to front-end innovation and all stages o
Slide 61: Building & Infrastructure at a Glance
Offering sustainability-based customer solutions for drinking water, sanitation, climate resilient cities and better $2,922M $424M 14.5% 2021 Revenues 1 2021 EBITDA 2021 EBITDA margin building performance 3-year CAGR2: 7.4% 3-year CAGR2: 14.6% 3-year Average2: 13.0% Redefining today’s pipes and fitt
Slide 62: Addressing Water and Energy Challenges
Addressing Water and Energy Challenges 50% 30% 40% Cities lose up to 60% of the people in the heavier rainfall due of energy is of all pumped water developing world live to climate change3 consumed in through pipe without improved buildings4 leakages1 sanitation2 1. Source: (R. Liemberger and A. Wya
Slide 63: Providing Solutions to Optimize Water, Improve Sanitation and Reduce Energy Use
Providing Solutions to Optimize Water, Improve Sanitation, Enhance Urban Climate Resilience and Reduce Energy Use in Buildings Safe and Efficient Better Sanitation Climate-Resilient Better Building Water Supply and Hygiene Cities Performance Water Infrastructure Soil & Waste Products Stormwater Mana
Slide 64: Leveraging Competitive Advantages for Future Growth
Leveraging Competitive Advantages for Future Growth • Broad product portfolio with expert services and solutions and strong global brand recognition • Recognized industry and thought leader with track record of innovation, product quality and technical support • Groundbreaking sustainability practic
Slide 65: Investing in Growth and Innovation
1 Invest in Growth and Innovation Investing in Growth and Innovation Existing Europe & Latin America • Cross-selling existing • Expanding services and • Maintaining status as • Adding technologies via products, solutions advanced digital solutions “partner of choice” M&A, internal development, and s
Slide 66: Deploying Our Excellence Operating System
3 Create Shareholder Value Deploying Our Excellence Operating System • Becoming E-commerce and digital leader supporting • Continuous optimizing and standardizing our customers before, during and after installation portfolio for reduced complexity • Multichannel distribution, platform and direct sal
Slide 67: Innovation in Action
Innovation in Action Case Study: Adapting To Climate Change With Innovative Solutions in Bourget du Lac, France Background Orbia Solution Outcome Construction of 187 apartments: Wavin AquaCell+ • Two 1,000m2 Aquacell+ • Water retention basins • Lightweight and designed for underground water basins,
Slide 68: Key Takeaways
Key Takeaways 01 Globally integrated market leader and provider of sustainability-linked pipe and fittings products and services for building and infrastructure markets with scale 02 Clear intellectual property and thought leader with centralized R&D dedicated to front-end innovation and all stages
Slide 69: 15-Minute Break
orbia O 15-Minute Break
Slide 70: Growing More with Less
Growing More with Less Gaby Miodownik Executive Vice President & President, Orbia Precision Agriculture (Netafim)
Slide 71: Key Messages
Key Messages 01 Largest global provider of precision irrigation products and services supported by growing demand for food, land and water 02 Well-equipped to increase market share and expand leadership position in high-value crops, digital farming, extensive crops and greenhouse solutions 03 Cultur
Slide 72: Precision Agriculture at a Glance
Focusing on precision irrigation systems, greenhouses and digital $1,126M $171M 2021 Revenues 1 2021 EBITDA 15.2% 2021 EBITDA margin 3-Year CAGR: 6% 3-Year CAGR: 3.4% 3-Year average: 17.0% farming technologies • Solutions enable farmers and producers to get higher and better- quality yields while us
Slide 73: Addressing Our Limited Resource Future with Precision Irrigation
Addressing Our Limited Resource Future with Precision Irrigation Solutions The world today: The world in 20501: Global water Irrigated area as Global irrigated area withdrawal by sector % of arable land by method 10B People 7% Micro-irrigation 70% Agricultural 18% Sprinklers 60% More food needed 76%
Slide 74: The Advantages of Precision Irrigation
The Advantages of Precision Irrigation Higher and better-quality yields, typically 50% - 100% more1 Reduced costs of other inputs such as crop protection, fertilizers, labor and energy Average of 50% water savings Improved sustainability 1. Various company trials. Orbia Investor Day 2022 | 74
Slide 75: Leveraging Leadership and Quality to Outpace Market Growth
Leveraging Leadership and Quality to Outpace Market Growth Aligned with population growth, local food security and climate change megatrends Precision Irrigation Protected Agriculture (Greenhouse) • Leader in precision irrigation, expecting to • Accelerating market penetration following expand curre
Slide 76: Sustainable Competitive Advantages with Full End-to-End Solutions
Sustainable Competitive Advantages with Full End-to-End Solutions Water Full • Best-in-class, broad range of storage services & Automation Pumps support end-to-end integrated offerings & fertigation • Strong brand based on reputable teams, Agro largest distribution network, design and machinery engi
Slide 77: Investing in Growth and Innovation
1 Invest in Growth and Innovation Investing in Growth and Innovation Core Business • Expand market share leadership above 30% • Significant penetration into extensive • Geographic expansion into Africa, and grow market leadership in traditional crops such as corn, rice, cotton in excess Central Asia
Slide 78: Deploying Our Excellence Operating System
3 Create Shareholder Value Deploying Our Excellence Operating System • Realizing benefits of large company cost efficiencies • Rapidly deployed growth capital to respond to in procurement; supply chain cost efficiencies market needs and grow topline in 2021 • Joint efforts into PVC synergies with Bu
Slide 79: Innovation in Action: Rice Farming
Innovation in Action Case Study: Rice Farming Background Orbia Solution Outcome • Provide irrigation solution • Drip irrigation solution • Converted over 3,000 hectares in to reduce environmental using dry mechanized Europe, Asia and South America footprint from rice paddy seeding, no field leveling
Slide 80: Key Takeaways
Key Takeaways 01 Largest global provider of precision irrigation products and services supported by growing demand for food, land and water 02 Well-equipped to increase market share and expand leadership position in high-value crops, digital farming, extensive crops and greenhouse solutions 03 Cultu
Slide 81: Enabling Advanced Connectivity Infrastructure
Enabling Advanced Connectivity Infrastructure Peter Hajdu Executive Vice President & President, Orbia Data Communications (Dura-Line)
Slide 82: Key Messages
Key Messages 01 Global leader in the design and manufacturing of fiber conduit as well as customized solutions with scale and reach 02 Strategic partner for the world’s largest telecom and cloud companies with largest install base and multi-year contracts 03 Well-positioned to capture large, growing
Slide 83: Data Communications at a Glance
Producing conduit, cable-in- conduit and accessories for the passive telecommunication networks infrastructure industry Essential and innovative products and solutions create physical pathways $994M 2021 Revenues 1 $134M 2021 EBITDA 13.5% 2021 EBITDA margin for fiber and other network 3-year CAGR: 7
Slide 84: Organizations Prioritizing Massive Investments in Network Infrastructure
Public & Private Organizations are Prioritizing Massive Investments in Network Infrastructure Large Private and Public Investments in Fiber Networks “Senate Passes $1T Infrastructure Bill… IIJA “Google Fiber Goes On Allocates $65B to Build Broadband Networks Hiring Spree to Support in Unserved Areas
Slide 85: Strong Market Forces Driving Connectivity Demand
Strong Market Forces Driving Connectivity Demand ~$120B Public Investment in ~$900B in 5G >$500B in Data Huge Growth in Passive Rural and Urban Broadband Mobile Networks Center Investments Network Infrastructure North America and Western Europe1 Investments in 5G Investment in data centers, homes pa
Slide 86: Addressable Market Expanding Rapidly
Addressable Market Expanding Rapidly Driven by Investments in Connectivity Conduit Market Driven by Demand for Fiber Large, multi-year growth driven • Urban and rural broadband by need for fiber to support billions • 5G cellular mobile networks of devices with private and • Data centers and edge com
Slide 87: Foundational Infrastructure with Sustainable Competitive Advantages
Providing Foundational Infrastructure with Sustainable Competitive Advantages • 50 years of market leadership and innovation 200+ Salesforce and Project Specialist Employees1 Largest, most sophisticated among peers • Global presence, strategically aligned with high-growth markets 75% 15 of Top 20 La
Slide 88: Investing in Growth and Innovation
1 Invest in Growth and Innovation Investing in Growth and Innovation Core Business • Grow revenue from $1.0 • Expand and upgrade • Increase strategic • Increase partnerships to $1.7B European footprint to accounts revenue with cloud/data center • Expand and upgrade capacity capture new fiber by 20%
Slide 89: Deploying Our Excellence Operating System
3 Create Shareholder Value Deploying Our Excellence Operating System • Engaging customers earlier in the sales process • +80% capacity increase by expanding via advisory services and digital tools production footprint • Maximizing profit and coverage via targeted • Driving production efficiency via
Slide 90: Innovation in Action
Innovation in Action Case Study: Delivering State-of-the-Art Connectivity in Partnership with a Leading Cloud Company Background Orbia Solution Outcome Multi-billion cloud company • Defined and designed conduit • Strategic supplier position operates globally—was seeking infrastructure to enable the
Slide 91: Key Takeaways
Key Takeaways 01 Global leader in the design and manufacturing of fiber conduit as well as customized solutions with scale and reach 02 Strategic partner for the world’s largest telecom and cloud companies with largest install base and multi-year contracts 03 Well positioned to capture large, growin
Slide 92: Mine to Market and Beyond
Mine to Market and Beyond Gregg Smith Executive Vice President & President, Orbia Fluorinated Solutions (Koura)
Slide 93: Key Messages
Key Messages 01 World’s largest fluorspar producer1 vertically integrated into high-value, high-growth applications with a secure mine to market approach 02 Owner’s mindset to optimizing and investing in current portfolio 03 Investing in low carbon footprint refrigerants and medical propellants to m
Slide 94: Fluorinated Solutions at a Glance
1 Creating fluorine-based products, technologies and $743M $244M 32.9% 2021 Revenues 2021 EBITDA 2021 EBITDA margin applications that advance life 3-year2 CAGR: -3.8% 3-year CAGR: -11.5% 3-year average: 36.5% around the world Fluorspar reserves ensure a secure, sustainable supply chain 18% Productio
Slide 95: Fluorine is a Critical Element
Fluorine is a Critical Element, and is Widely Present in our Daily Lives • Fluorine is the most reactive element on the periodic table • Fluorine makes strong chemical bonds with other elements, and its compounds have distinctive properties: – Chemical, heat, weather resistance – Repelling water and
Slide 96: Fluorine Plays a Fundamental Role in Our Day-to-Day Lives
Fluorine Plays a Fundamental Role in Enhancing our Day-to-Day Lives Infrastructure Cooling & Refrigeration Medical Propellants Pharmaceuticals Fluorspar is critical to cement, Fluorine is used in refrigerants Fluorinated medical gas Fluorine plays a key role steel and aluminium for air conditioning
Slide 97: Solving Customer Problems and Addressing World Challenges
Solving Customer Problems and Addressing World Challenges Market Size 2030 CAGR Minerals $2.5B Fluorspar • Metspar key to quality production of steel and cement with lower carbon footprints 3% - 5% CAGR1 Hydrogen Chemical $5B fluoride/aluminum • Hydrogen fluoride is a key intermediate for semiconduc
Slide 98: Investing in Growth and Innovation
1 Invest in Growth and Innovation Investing in Growth and Innovation Core Business • Optimize and invest in minerals • Improve the efficiency of our mine and chemical intermediates through technology advancement Low Carbon Footprint Refrigerants • Auto, commercial, residential • Recycling and reclam
Slide 99: Become a Key Materials Supplier to the Battery Market
1 Invest in Growth and Innovation Become a Key Materials Supplier to the Battery Market The Energy Storage Market Investment Focus Foosung LiPF6 production joint >20% CAGR Lithium-ion battery market will grow with electric vehicle demand beyond 2030 LiPF6 and other electrolyte salts venture in Europ
Slide 100: Deploying Our Excellence Operating System
3 Create Shareholder Value Deploying Our Excellence Operating System • Value pricing mindset • Improved fluorspar processing to meet • F-gas quota optimization growth in cement and stainless-steel applications • Secure supply chains Commercial • Rationalized and upgraded the acidspar • Global distri
Slide 101: Key Takeaways
Key Takeaways 01 World’s largest fluorspar producer1 vertically integrated into high-value, high-growth applications with a secure mine to market approach 02 Owner’s mindset to optimizing and investing in current portfolio 03 Investing in low carbon footprint refrigerants and medical propellants to
Slide 102: Securing Future Growth
Securing Future Growth Shai Albaranes Corporate Vice President, Innovation & Ventures
Slide 103: Key Messages
Key Messages 01 Innovation is at the heart of everything we do— it guarantees the future growth and profitability of Orbia and our senior leadership is fully committed 02 We consciously select business group-led innovation and Orbia-wide efforts to balance risk profiles, time horizons and expertise
Slide 104: Our Innovation Portfolio Combines Business-Specific and Orbia-Wide Efforts
Our Innovation Portfolio Combines Business-Specific Initiatives as Well as Orbia-Wide Efforts Business-Specific Orbia-Wide startup partnerships Combining cutting-edge innovation and Orbia global footprint and scale Our internal innovation program allows every employee to Business Innovation contribu
Slide 105: Innovation is Embedded in Each of Our Businesses
Innovation is Embedded in Each of Our Businesses >280 Research and development professionals Portfolio of New products and services account for 2,250 4,600 patents trademarks 13% (Including patents in the process of registration) of revenues Orbia Investor Day 2022 | 105
Slide 106: LaunchPad, Orbia's Internal Innovation Program
LaunchPad, Orbia’s Internal Innovation Program, Allows Every Employee to Innovate 2021 by the Numbers Thousands of employees participated and submitted 854 ideas “ Orbia…compared with our average customer, has performed higher than the +6,200 hours of innovation mentoring and training provided bench
Slide 107: We Invest In and Partner with Leading Startups
We Invest In and Partner with Leading Startups Orbia Ventures (Select Investments) Startup Partnerships (Select Examples) AI and deep-learning technology for Orbia Koura is partnering with Ascend to pest control process in agriculture recycle lithium and fluorine that can be used in production of ba
Slide 108: Key Takeaways
Key Takeaways 01 Innovation is at the heart of everything we do— it guarantees the future growth and profitability of Orbia and our senior leadership is fully committed 02 We consciously select business group-led innovation and Orbia-wide efforts to balance risk profiles, time horizons and expertise
Slide 109: Financial Strategy
Financial Strategy Jim Kelly Chief Financial Officer
Slide 110: Key Messages
Key Messages 01 Creating value for all stakeholders with targeted revenue growth of 8-11% and targeted EBITDA growth of 11-14% over the long term 02 Balancing our capital allocation model with investments in profitable growth while maintaining a strong and flexible balance sheet 03 Returning cash to
Slide 111: Reaffirming 2022 Full-Year Estimates
Reaffirming 2022 Full-Year Estimates Revenue ($B) EBITDA ($B) $8.9 – $9.3 $8.8 $2.0 $1.75 – $1.9 $7.0 $6.4 $1.3 $1.3 2019 2020 2021 2022E 2019 2020 2021 2022E Assuming 2022 full-year EBITDA margins in the range of 20% – 21%, given market uncertainties and inflationary pressure Orbia Investor Day 202
Slide 112: Investing in Growth, Realizing Synergies, Maintaining Discipline
Investing in Growth, Realizing Synergies, Maintaining Capital and Operational Discipline Yields Outstanding Results Polymer Building & Precision Data Fluorinated Solutions Infrastructure Agriculture Communications Solutions • Capacity expansion • Existing Europe • Core business • Core business • Cor
Slide 113: Targeting Revenue of $13.0 – $15.0B and EBITDA of $3.1 – $3.5B by 2027
Targeting Revenue of $13.0 – $15.0B and EBITDA of $3.1 – $3.5B by 2027 Net Revenue ($B) EBITDA ($B) & EBITDA Margin (%) Driving Growth Historical and Target Historical and Target Significant revenue growth through 2027 and beyond $13.0 – $15.0 4. 00 $3.1 – $3.5 3. 50 Growth driven by: $8.9 – $9.3 3.
Slide 114: Increasing Operating Cash Flow and Conversion
Increasing Operating Cash Flow and Operating Cash Flow Conversion Operating Cash Flow1 ($M) & Operating Cash Flow Conversion2 (%) Strong Cash Flow • Operating Cash Flow expected to more than double $1,900 - $2,100 in 5 years, by 2027 • Achieve Operating Cash Flow Conversion of >60% through 2027 $982
Slide 115: Supporting Growth with a Strong, Flexible Balance Sheet
Supporting Growth with a Strong, Flexible Balance Sheet • Target Net Debt/EBITDA: <2.5X • Bank Facility • Credit Ratings • Long-Term Debt • Ample liquidity with $850M in available • Moody’s: Baa3 stable outlook credit under $1B revolving loan facility • S&P: BBB- stable outlook • No near-term fixed
Slide 116: Demonstrated Ability to Grow EBITDA and Maintain Leverage
Demonstrated Ability to Grow EBITDA and Maintain Leverage Below Target Over Long Term 9 Orbia EBITDA ($B) and Leverage Ratio 2010 - 2021 $2.05 8 7 $1.40 6 $1.37 $1.32 5 $1.11 $0.96 $0.90 $0.91 $0.93 4 $0.83 $0.82 3 $0.65 2.2 2.1 2.1 2.1 2 1.8 1.3 1.1 1.2 1.3 1.0 1.0 1 0.7 0 2010 2011 2012 2013 2014
Slide 117: Maximizing Returns with Disciplined Capital Allocation
Maximizing Returns with Disciplined Capital Allocation Invest in Growth Return Cash to Shareholders Invest in Organic Growth Pay Dividends • Reinvest cash flow to invest in • Regular return of cash to shareholders high-return growth including with dividend increases, aligned with capacity, geographi
Slide 118: Targeting Long-Term ROIC in Mid-Teens
Targeting Long-Term ROIC in Mid-Teens Historical ROIC (%) and Forecast Focusing on Returns • Targeting ROIC above 10% through investment cycle 13.9% 13% - 15% • Longer-term ROIC target in mid-teens 7.9% 7.1% 2019 2020 2021 2027E Orbia Investor Day 2022 | 118
Slide 119: Returning Cash to Shareholders
Returning Cash to Shareholders $1.1B to Shareholders 2018-2022 Orbia Dividends (in $M) History of Returning Cash Consistently returned cash to shareholders since 2018 $ 3 7 0 $ 3 6 0 $ 3 5 0 • >14% of EBITDA returned $ 3 4 0 $300 $ 3 0 $ 3 2 0 through dividends since $ 3 1 0 $ 3 0 0 $ 2 9 0 $60 2018
Slide 120: Operating Cash Flow Funds 75% of Our Cash Requirement Through 2027
Operating Cash Flow Funds 75% of Our Cash Requirement Through 2027, While Maintaining Leverage <2.5x Sources of Cash 2022 – 2027 inclusive Uses 2022 – 2027 inclusive Operating $7.8B - $8.0B • Grows from $1.1B to over Maintenance $1.8B - $1.9B • Increases from low level Cash Flow1 $2.0B per year Capi
Slide 121: Delivering Top and Bottom-Line Growth and Consistent Value
Delivering Top and Bottom-Line Growth, Industry- Leading Returns and Consistent Value to Shareholders $13.0B – $15.0B $3.1B – $3.5B 2027 Revenue 2027 EBITDA 22 – 24% >60% 13 – 15% <2.5x Long-term EBITDA margin Operating cash Return on Leverage ratio conversion invested capital Dividends Stable and g
Slide 122: Key Takeaways
Key Takeaways 01 Creating value for all stakeholders with targeted revenue growth of 8-11% and targeted EBITDA growth of 11-14% over the long term 02 Balancing our capital allocation model with investments in profitable growth while maintaining a strong and flexible balance sheet 03 Returning cash t
Slide 123: Driven by purpose and unified by values
Driven by purpose and unified by values, we choose to work on the toughest challenges From mine to market, ground to home and lab to everyday life… …we rely on our collective ingenuity and integration across the value chain to transform materials into greener, smarter, more efficient solutions Orbia
Slide 124: Key Takeaways from Investor Day
Key Takeaways from Investor Day 01 Our global businesses and core values are inextricably linked to sustainability and solving world challenges 02 We have plans to expand our market-leading positions, adhering to our excellence operating framework and innovation mindset 03 Orbia has an exciting futu
Slide 125: Orbia Gives Back
Orbia Gives Back To advance life around the world At Orbia, we believe that fostering STEM skills is essential to achieve our purpose and promote more equitable societies. On behalf of our stakeholders, we are donating $50,000 USD to sponsor 150 young and talented girls in STEM training that builds
Slide 126: Q&A
Q&A