Methanex Corporation · TSX:MX
Methanex — Investor Presentation (October 2002)
28 slides from Methanex's investor presentation, October 2002
Slide 1: Methanex - A Responsible Care Company
METHA EX A Responsible Care® Company Presented:
Slide 2: Forward-looking Statements
Forward-looking Statements Information contained in these materials or presented at this meeting, either in prepared remarks or in response to questions, may contain forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties that could cause actual result
Slide 3: Overview: in a nutshell
overview in a nutshell… • one product, one focus • acknowledged global leader • ever-improving asset base • excess cash to shareholders • good liquidity
Slide 4: Business risks
overview business risks • economic growth rates • NA natural gas prices • NZ natural gas supply • future of MTBE
Slide 5: Methanol is... our sole focus
our product methanol is… • our sole focus • produced from natural gas natural gas syngas reforming CO2 H2 steam CO chemical grade crude distillation synthesis CH3OH CH3OH + H2O
Slide 6: Methanol: diversified end uses
our product methanol is… • diversified end uses • silicones • plywood resins • inks • windshield washer fluid • paints • polyester • plastic bottles • a source of hydrogen for the future
Slide 7: The fundamentals
our industry the fundamentals demand supply • 30 million tonnes • nameplate capacity: 37 million • GDP linked growth • effective capacity: 30 million • historical CAGR ~4% • 100 plants, 70 players • diverse end uses • 30% captive:70% merchant source: CMAI
Slide 8: The competitive landscape: capacity additions and shutdowns
our industry the competitive landscape (000s tonnes) 3,000 chile trinidad qatar iran 2,000 saudi norway saudi iran trinidad 1,000 indonesia trinidad eq. guinea argentina 0 canada US US ? ? -1,000 US(4) canada US(2) canada -2,000 UK -3,000 1997 1998 1999 2000 2001 2002 2003 2004 capacity additions ca
Slide 9: The competitive landscape: capacity, demand and operating rate
our industry the competitive landscape (000s tonnes) 40,000 92% 90% 30,000 88% 86% 86% 20,000 82% 80% 80% 10,000 0 74% 2000 2001 2002 2003 2004 global capacity global demand required industry operating rate
Slide 10: NA natural gas
our industry NA natural gas 1.05 0.90 0.75 0.60 0.45 0.30 0.15 0.00 1993 1994 1995 1996 1997 1998 1999 2000 2001 Natural gas, cost per gallon of methanol Other cash costs Spot methanol Transaction methanol è methanol price often independent source: CMAI
Slide 11: Floor price mechanism
our industry floor price mechanism 1.00 0.80 0.60 0.40 0.20 0.00 Q1 2000 Q2 2000 Q3 2000 Q4 2000 Q1 2001 Q2 2001 Q3 2001 Q4 2001 Q1 2002 Q2 2002 Q3 2002 Natural gas, cost per gallon of methanol Other cash costs Spot methanol Transaction methanol è but natural gas price provides support source: CMAI
Slide 12: Pricing environment
our industry pricing environment US$/gallon 1.00 USGC methanol transaction price 0.80 0.60 0.40 0.20 0.00 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 è highly volatile pricing environment è $160/MT historical average source: CMAI
Slide 13: 3 strategic thrusts
our company 3 strategic thrusts low cost global operational positioning excellence
Slide 14: Global positioning: methanol pipeline
our company global positioning methanol pipeline Canada Trinidad Australia New Zealand Chile current production planned production
Slide 15: Market share
our company global positioning market share 23% 29% 24% 31% è 2001 sales ~25% of global demand
Slide 16: Sales
our company global positioning sales (000s tonnes) 8,000 demand 160 mx sales growth growth 150 6,000 (volume 000s tonnes) 140 (growth rate) 4,000 130 120 2,000 110 0 100 1994 1995 1996 1997 1998 1999 2000 2001 Q3 02 YTD (annualized) è results outpace market growth source: CMAI
Slide 17: Customers
our company global positioning customers significant customers: Ashland Huntsman BASF Lyondell Borden Mitsubishi BP Mitsui Dow Corning Samsung è major multi-national companies
Slide 18: Production
our company low cost production (000s tonnes) 6,000 4,000 2,000 0 1994 1995 1996 1997 1998 1999 2000 2001 Q3 02 YTD (annualized) Chile & New Zealand North America è strategic vision becomes reality
Slide 19: Competitive advantage
low cost 0 2 4 6 8 10 1997 1999 Feb-00 Apr-00 Jun-00 gas costs methanex Aug-00 Oct-00 Dec-00 Feb-01 Apr-01 Jun-01 Aug-01 Oct-01 Dec-01 Feb-02 Apr-02 gas costs (NYMEX) NA producer competitive advantage Jun-02 Aug-02 (US$/mmbtu) our company
Slide 20: Cash cost
our company low cost cash cost (US$/tonne) 115 105 95 85 75 1994 1995 1996 1997 1998 1999 2000 2001 Q3 02 strategic YTD target note: excludes SG&A, hedge costs and idled plants
Slide 21: The Atlas project
our company low cost the atlas project • 1.7 million tonne facility • $230/MT estimated capital cost • to market in early 2004
Slide 22: Chile expansion
our company low cost chile expansion • 840,000 tonne facility • low incremental cost • secure gas reserves • conditional board approval
Slide 23: Potential project: Australia
our company low cost potential project australia • 2 million tonne facility • underpins asia-pacific growth • protects against NZ risk
Slide 24: Cash generation
our company low cost cash generation at $150 / MT methanol price… strategic 1995 2002 target produced methanol 4,000 6,000 8,000 (000’s MT) EBITDA 160 260 470 (millions US$) 1–2–4
Slide 25: Financial prudence
our company operational excellence financial prudence • maintain liquidity • fund current business needs • sustaining capital requirements • future capacity additions • distribute excess cash • quarterly $0.05/share dividend • periodic additional distributions
Slide 26: Distributions
our company operational excellence distributions total (outstanding shares) outstanding 200 public 175 float (millions, shares) 150 125 100 75 1994 1995 1996 1997 1998 1999 2000 2001 2002 è a consistent priority
Slide 27: Operating track record
our company operational excellence operating track record • plant reliability • safety
Slide 28: Growth beyond traditional methanol
our future growth beyond traditional methanol three key methanol-to-power facts: 1 MW requires 7.5 tonnes per day methanol 1 plant of 500MW represents 1.4 million tonnes of methanol 0.1% electricity demand represents ~16% of methanol three key methanol-to-olefin facts: 1 tonne requires ~5 tonnes met