Saudi Basic Industries Corp. · TADAWUL:2010
Saudi Basic Industries — Investor Day (October 2022)
62 slides from Saudi Basic Industries's investor day presentation, Oct 31, 2022
Slide 1: SABIC Investor Day 2022
SABIC INVESTOR DAY 2022 31 OCTOBER 2022
Slide 2: CEO – Strategic Focus
SABIC INVESTOR DAY 2022 CEO – STRATEGIC FOCUS 2
Slide 3: Our Purpose
SABIC INVESTOR DAY 2022 OUR PURPOSE 3
Slide 4: Chemistry That Matters
Classification: General Business Use OUR PURPOSE WE ARE CREATING CHEMISTRY THAT MATTHERS™ FOR A SUSTAINABLE WORLD TO BE THE PREFERRED WORLD LEADER IN CHEMICALS PEOPLE PLANET PROSPERITY We engage, collaborate, and inspire We contribute to the global drive to We aim for sustainable our people and the
Slide 5: EHSS
SABIC INVESTOR DAY 2022 EHSS 5
Slide 6: Environment, Health, Safety and Security
Classification: General Business Use ENVIRONMENT, HEALTH, SAFETY AND SECURITY SABIC IS COMMITTED TO SAFETY 4.0 Safety Performance Rate 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 The plotted graph represents the number of all safety incidents weighted by severity per every 200,000 man-hours worked. 6
Slide 7: Investment Thesis and How Do We Deliver a Return
SABIC INVESTOR DAY 2022 INVESTMENT THESIS AND HOW DO WE DELIVER A RETURN 7
Slide 8: Investment Thesis
Classification: General Business Use INVESTMENT THESIS Growth Strategy Execution Strategic growth Diversified Global Innovation & Market & Sustainability Customer WE ARE CREATING Relationships Circularity & Carbon CHEMISTRY THAT MATTERS™ neutrality roadmap FOR A SUSTAINABLE WORLD Robust Financials N
Slide 9: Strategic Growth
SABIC INVESTOR DAY 2022 STRATEGIC GROWTH 9
Slide 10: Chemical Industry Business Environment
Classification: General Business Use CHEMICAL INDUSTRY BUSINESS ENVIRONMENT SHORT-TERM CHALLENGES LONGER-TERM MEGATRENDS 1 2 3 Inflation and monetary tightening Shifting Globalization Intervening Policy Disrupting Technologies Impacting scale & scope Impacting the way of Impacting value chains via o
Slide 11: Supply Demand Summary of Main Petrochemical Products
Classification: General Business Use SUPPLY DEMAND SUMMARY OF MAIN PETROCHEMICAL PRODUCTS Capacity vs Demand 2 Years (2022-2023) 5 Years (2022-2027) 10 Years (2022-2032) Demand growth CAGR [%] Demand growth CAGR [%] Demand growth CAGR [%] PC PC LLDPE LLDPE Methanol PP PP MEG HDPE HDPE MEG Methanol M
Slide 12: SABIC Strategy
Classification: General Business Use SABIC STRATEGY To Be the Preferred World Leader in Chemicals Focused Chemical Sector Strategic Plays PETROCHEMICALS AGRINUTRIENTS SPECIALTIES METALS Global Fully Integrated Global Agri-Nutrients Company Leading Global Company Local and Regional Chemicals & Polyme
Slide 13: Opening a New Chapter in Our Evolution
Classification: General Business Use OPENING A NEW CHAPTER IN OUR EVOLUTION SABIC PRODUCTION AND PHASES OF EVOLUTION KSA Growth Globalization Transformation NEW CHAPTER Building national capabilities in Expanding Operations & Preparing for a new wave of growth: partnership with industry leaders Tech
Slide 14: What's Next
Classification: General Business Use WHAT’S NEXT MARKET DEMAND Petrochemicals Agri-Nutrients Specialties Feedstock Technology Increase flexibility & competitiveness Create a competitive edge NEW CHAPTER Shareek Global Opportunities Local Content Liquid To Chemicals Blue Ammonia Circular Economy SUST
Slide 15: Carbon Neutrality Roadmap
SABIC INVESTOR DAY 2022 CARBON NEUTRALITY ROADMAP 15
Slide 16: SABIC's Carbon Neutrality Roadmap Overview Until 2050
Classification: General Business Use SABIC’S CARBON NEUTRALITY ROADMAP OVERVIEW UNTIL 2050 CARBON NEUTRALITY 20% SCOPE 3 by 2050 REDUCTION by 2030 We aim to reduce our indirect Interim Scope 1&2 GHG emissions SCOPE 3 GHG emissions along the in line with the target compared to 2018, including value c
Slide 17: Electrically Heated Cracking Furnace
Classification: General Business Use ACTIVELY WORKING IN LONG TERM SOLUTIONS: ELECTRICALLY HEATED CRACKING FURNACE • SABIC, BASF and Linde are jointly developing the e-furnace under a collaboration agreement established in 2021 • Enable reliable upscaling • Ready for start-up in 2023 1 September 202
Slide 18: Our TRUCIRCLE Portfolio
Classification: General Business Use OUR TRUCIRCLETM PORTFOLIO OUR TARGET 200 KT circular and bio-based products in 2025 Circular products 13% • 16 KT in 2021 PCR compounds Realized 39 KT 6% • since the first sale Bio-based products 81% Overall positive impact on collateral sales and customer experi
Slide 19: Key Priorities
SABIC INVESTOR DAY 2022 KEY PRIORITIES 19
Slide 20: 2022 Key Priorities
Classification: General Business Use 2022 KEY PRIORITIES Drive profitable growth Strategy Deliver on synergy benefits with Saudi Aramco Accelerate Carbon neutrality Sustainability & Circular commitments Innovation ESG reporting Financial Stable to growing dividends Excellence Maintain strong standal
Slide 21: CFO – Performance Update
SABIC INVESTOR DAY 2022 CFO – PERFORMANCE UPDATE 21
Slide 22: Financial Performance
SABIC INVESTOR DAY 2022 FINANCIAL PERFORMANCE 22
Slide 23: Healthy Financial Performance
Classification: General Business Use FINANCIAL PERFORMANCE HEALTHY FINANCIAL PERFORMANCE (USD billion) Q3 22 Q2 22 % Var Q3 21 % Var 9M 22 9M 21 % Var Revenue 12.50 14.93 -16% 11.65 7% 41.46 32.97 26% EBITDA 1.81 3.54 -49% 2.99 -39% 8.76 9.39 -7% Income from Operations 0.87 2.61 -67% 2.05 -57% 5.97
Slide 24: Third Quarter Operating Segment Performance
Classification: General Business Use THIRD QUARTER OPERATING SEGMENT PERFORMANCE Petrochemicals Agri-Nutrients Hadeed & Specialties Revenue ($MM) EBITDA ($MM) Revenue ($MM) EBITDA ($MM) Revenue ($MM) EBITDA ($MM) 1,517 1,087 12,323 176 2,557 867 2,500 947 10,414 734 10,095 1,137 827 731 84 367 991 6
Slide 25: Major Petrochemicals Price Changes Across Key Regions in Q3 22
Classification: General Business Use MAJOR PETROCHEMICALS PRICES CHANGES ACROSS THE KEY REGIONS IN Q3 22 % change Q3 22 vs Q3 21 (YoY) REST OF ASIA MIDDLE EAST % change Q3 22 vs Q2 22 (QoQ) 80% 80% 60% 60% 40% 140 40% 20% 120 20% 0% 0% 100 -20% -20% -40% 80 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 -40% -60% -6
Slide 26: Outlook
SABIC INVESTOR DAY 2022 OUTLOOK 26
Slide 27: SABIC: Key End Industry and Trends
Classification: General Business Use SABIC: KEY END INDUSTRY AND TRENDS Q3 DEMAND Q3 DEMAND Q4 DEMAND END INDUSTRY TREND TREND TREND (YOY) (QOQ) (QOQ) Packaging Building & Construction Agriculture Consumer Transportation Industrial Automotive Electrical & Electronics Healthcare Source: SABIC. Direct
Slide 28: Third Quarter Summary and Outlook 2022
Classification: General Business Use THIRD QUARTER SUMMARY AND OUTLOOK 2022 SUMMARY OUTLOOK 2022 Current Previous Global GDP 2.5% - 2.8% (YoY) 2.5% - 2.8% (YoY) Growth Rate 0.16 1.8 A+/A1 SABIC – FINANCIALS Earnings per Free cash Strong standalone share flow credit ratings2 Sales Volume Higher Highe
Slide 29: Investment Thesis Supported by Financial Discipline
Classification: General Business Use INVESTMENT THESIS Growth Strategic growth Strategy Execution supported by financial discipline Diversified Innovation & Global Market Sustainability & Customer WE ARE CREATING Relationships Enabling Carbon Chemistry neutrality roadmap CHEMISTRY THAT That MATTERS™
Slide 30: Capital Allocation Framework
Classification: General Business Use CAPITAL ALLOCATION FRAMEWORK Investment Business Continuity Sustainability Strategic Growth Scenarios CAPEX ($B) 6 5 4 10 Year Cash Flow Corporate Programs 3 Oil Price Scenario, Historical Volatility Forecasts and Initiatives Economic Growth 2 1 0 2019 2020 2021
Slide 31: Strategic Growth Priorities & Competitive Advantages
Classification: General Business Use STRATEGIC GROWTH PRIORITIES & COMPETITIVE ADVANTAGES EUROPE ASIA • PRODUCT GROWTH • MARKET GROWTH • QUALITY GROWTH • PARTNERSHIP GROWTH • SUSTAINABILITY LEADERSHIP • UNIQUE MARKET • STRONG MARKET POSITION PENETRATION AMERICAS • OPPORTUNISTIC GROWTH • FEEDSTOCK AF
Slide 32: Carbon Neutrality & ESG
SABIC INVESTOR DAY 2022 CARBON NEUTRALITY & ESG 32
Slide 33: Carbon Neutrality Journey & Phase Strategy
Classification: General Business Use CARBON NEUTRALITY JOURNEY & PHASE STRATEGY MAJOR FOCUS AREAS 2030 2050 Energy Efficiency Electrification 20% Renewable Energy 2 Hydrogen CARBON GHG Reduction NEUTRAL CCUS $3-4B CAPEX • Limited capex • Large capex requirements • Mostly replacing fossil to renewabl
Slide 34: SABIC's Carbon Roadmap Overview Until 2030
Classification: General Business Use SABIC’S CARBON ROADMAP OVERVIEW UNTIL 2030 (direct) Capex $3-4B 20% requirements REDUCTION by 2030 2030 Interim Scope 1&2 GHG emissions target compared to 2018, MAIN STRATEGIC ACTIONS including targeted growth • Continuing energy efficiency journey to achieve SEE
Slide 35: Our ESG and Sustainability Governance
Classification: General Business Use OUR ESG AND SUSTAINABILITY GOVERNANCE “We hear ESG all the time. But if you want to be effective at the SHAREHOLDERS “S” and the “E”, you have to have the “G”, the governance that structured that. Everything flows BOARD OF DIRECTORS downstream from Governance.” D
Slide 36: SABIC's Integrated ESG Approach
Classification: General Business Use SABIC’S INTEGRATED ESG APPROACH MOTIVATING FACTORS Address Stakeholder Needs Meet Evolving Regulations Enable Responsible Long-Term Growth Drive Sustainable Portfolio SABIC ESG Dashboard KEY ESG STAKEHOLDERS (Sustainability KPIs) External Customers and Suppliers
Slide 37: How Are We Developing Our Internal ESG Ecosystem
Classification: General Business Use HOW ARE WE DEVELOPING OUR INTERNAL ESG ECOSYSTEM ESG DRIVERS ESG FRAMEWORK ESG FOUNDATION PROJECTS Product Carbon Footprint Integrate ESG into strategic and business planning Product Sustainability Assessment TCFD Assessment Embed sustainable investments discipli
Slide 38: Our ESG External Action
Classification: General Business Use OUR ESG EXTERNAL ACTION SUPPLIERS & FINANCIAL BUSINESS COMMUNITIES SUPPLY CHAINS INDICES RANKERS, RATERS INVESTORS & SCORES EXCHANGES Strong external REPORTERS & advocacy to voice our FRAMEWORKS MEDIA ESG representation as both a chemical and CONSULTANTS emerging
Slide 39: CTO & CSO – Innovation & Sustainability
SABIC INVESTOR DAY 2022 CTO & CSO – INNOVATION & SUSTAINABILITY 39
Slide 40: Investment Thesis
Classification: General Business Use INVESTMENT THESIS Growth Strategy Strategic growth Execution SUPPORTED BY INNOVATION Diversified Innovation & Global Market Sustainability & Customer Relationships WE ARE CREATING Circularity & Carbon CHEMISTRY THAT MATTERS™ neutrality roadmap FOR A SUSTAINABLE W
Slide 41: Strategic Growth Supported by Innovation
SABIC INVESTOR DAY 2022 STRATEGIC GROWTH SUPPORTED BY INNOVATION 41
Slide 42: SABIC's Technology and Innovation Mission
Classification: General Business Use SABIC’S TECHNOLOGY AND INNOVATION MISSION DEVOTED TO SCIENCE: INGENUITY DRIVEN BY TECHNOLOGY AND INNOVATION Deliver DIFFERENTIATED and SUSTAINABLE product and application solutions and SUSTAINABLE COST-ADVANTAGED process innovation to meet the needs of our CUSTOM
Slide 43: SABIC's Growth Strategy Supported by Innovation
Classification: General Business Use SABIC’S GROWTH STRATEGY SUPPORTED BY INNOVATION TO BE THE PREFERRED WORLD LEADER IN CHEMICALS FOCUSED CHEMICAL SECTOR STRATEGIC PLAYS PETROCHEMICALS AGRINUTRIENTS SPECIALTIES FEEDSTOCK TECHNOLOGY INCREASE FLEXIBILITY & CREATE A COMPETITIVENESS COMPETITIVE EDGE SE
Slide 44: Segment Driven Platform Example – BLUEHERO
Classification: General Business Use SEGMENT DRIVEN PLATFORM EXAMPLE – BLUEHERO™ (VEHICLE ELECTRIFICATION) UNDERSTANDING MARKET POSITION SABIC DYNAMICS AND OPPORTUNITIES AS A LEADER >70% vehicles electrified by 2030 2030 ambition $560 billion commitment by OEMs to date >150 kT Heaviest, largest and
Slide 45: Process Innovation Examples – Chemicals & Polymers
Classification: General Business Use PROCESS INNOVATION EXAMPLES – CHEMICALS & POLYMERS POLYMERS PROCESS CHEMICALS PROCESS INNOVATION INNOVATION PROCESS IMPROVEMENT ENABLING GROWTH PROCESS IMPROVEMENT ENABLING GROWTH Dry Catalyst Feeder Integrated Multizone SABIC Butadiene SABIC ANJEVOC Technology f
Slide 46: Specialties Unique – Market Solutions
Classification: General Business Use SPECIALTIES UNIQUE – MARKET SOLUTIONS EXABYTE ECONOMY CIRCULAR ECONOMY WELLBEING ECONOMY NET ZERO MEGATRENDS Hyperconnected Closing the loop Redefining health Scalable low-carbon solutions devices, data & people (Post-COVID19) INFRASTRUCTURE ELECTRONICS INDUSTRIA
Slide 47: SABIC Technology and Innovation Global Centers
Classification: General Business Use SABIC TECHNOLOGY AND INNOVATION GLOBAL CENTERS BOZ STC – Geleen Wilton Cartagena Pittsfield, MA, USA PPDC Pittsfield Bergen op Zoom, NL Selkirk, NY, USA Korea Tech Geleen, NL Center Wixom, MI, USA Sungnam, South Korea Wilton, UK Selkirk Mount Vernon, IN, USA Cart
Slide 48: External Innovation Eco-System
Classification: General Business Use EXTERNAL INNOVATION ECO-SYSTEM INTERNATIONAL TECHNOLOGY VENTURES Acquire FOCUS ON New & Unique UNIVERSITIES/INSTITUTES Competencies PEOPLE Support Projects Expand Capabilities PIPELINE Scout New Opportunities Extend Capacity Reduce TTM & Cost PERFORMANCE KSA UNIV
Slide 49: Enabling the Transformational Economies and Delivering Impact
Classification: General Business Use ENABLING THE TRANSFORMATIONAL ECONOMIES…AND DELIVERING IMPACT By acting | SEGMENT-DRIVEN INNOVATIONS | UNIQUE MARKET SOLUTIONS | PROCESS INNOVATION upon… ~ 10k 450+ 70+ 19 >50% 15+% Patents & Pending Active R&D New Products / Year R&D Centers Sustainability- Impr
Slide 50: SABIC Sustainable Growth Journey
Classification: General Business Use SABIC SUSTAINABLE GROWTH JOURNEY SABIC GROWTH STORY 1976 1970 2000 2010 2016 2022 NEW KSA Growth Globalization Transformation CHAPTER Building national capabilities in Expanding Operations & Preparing for a new wave of growth: partnership with industry leaders Te
Slide 51: Circularity & Carbon Neutrality Roadmap
SABIC INVESTOR DAY 2022 CIRCULARITY & CARBON NEUTRALITY ROADMAP 51
Slide 52: SABIC Circular Carbon Economy (CCE) Focus
Classification: General Business Use SABIC CIRCULAR CARBON ECONOMY (CCE) FOCUS Product Value Chain Energy Efficiency enhancement Afforestation Renewables Deployment Remove Reduce CCUS Equipment Electrification Sustainability Solutions Resources & Energy Light Weighting Solutions Conservation Innovat
Slide 53: Our Circular Journey So Far with Proven Solutions (1)
Classification: General Business Use OUR CIRCULAR JOURNEY SO FAR …WITH PROVEN SOLUTIONS (1) 2014 2014 2019 2019 2019 MASS BALANCE CERTIFIED D4R WITH TF-BOPE CERTIFIED CERTIFIED RENEWABLE chain of custody RENEWABLE PE & PP Mono-material solutions to CIRCULAR PE & PP CHEMICALS for polymers from second
Slide 54: Our Circular Journey So Far with Proven Solutions (2)
Classification: General Business Use OUR CIRCULAR JOURNEY SO FAR …WITH PROVEN SOLUTIONS (2) 2020 2021 2021 2021 2022 2022 CLOSED CIRCULAR PCR COMPOUNDS CIRCULAR BLOCKCHAIN CERTIFIED LOOP PRODUCTS based up to 70% mechanically PRODUCTS PILOT PROJECT RENEWABLE recycled content for digital traceability
Slide 55: Good Progress on First Semi-Commercial Advanced Recycling Unit
Classification: General Business Use GOOD PROGRESS ON THE FIRST SEMI-COMMERCIAL ADVANCED RECYCLING UNIT Market foundation stage Commercial unit phase 2022 World scale phase ≥ 2025 ● Direct processing of pyrolysis oil ● ~15-20 kta of raw pyrolysis oil into ● >200 kta of circular products fraction via
Slide 56: Carbon Neutrality Strategy: 2030 Execution Plan for Scope 1 & 2
Classification: General Business Use CARBON NEUTRALITY STRATEGY: 2030 EXECUTION PLAN FOR SCOPE 1 & 2 GHG EMISSIONS CO2 MAIN INITIATIVES MAJOR MILESTONES / ENABLERS / APPROACH UP TO 2030 Reliability, Energy Developing Sites CN Roadmaps, Accounting Expected ~7.2 MMT 2025 for the combined impact of EE
Slide 57: The Path to 2050 – Enabling Technologies & Infrastructure
Classification: General Business Use THE PATH TO 2050 – ENABLING TECHNOLOGIES & INFRASTRUCTURE HYDROGEN COMBUSTION ELECTRIFICATION CO2 CAPTURE H2 CH4 CO2 Storage Key Principle: Fire furnaces with Key Principle: Fired burners replaced Key Principle: Capture CO2 from stack hydrogen instead of methane
Slide 58: From Combustion to Electric: E-Furnaces for Steam Cracking
Classification: General Business Use FROM COMBUSTION TO ELECTRIC IN HIGH TEMPERATURE HEATING: E-FURNACES FOR STEAM CRACKING SABIC JDA with BASF & Linde on Cracker Electrification TWO RESISTIVE HEATING CONCEPTS 3D graphic of world’s first demonstration plant for large scale electrically heated steam
Slide 59: First Adopter at Commercial Scale for Steam Crackers
Classification: General Business Use FIRST ADOPTER AT COMMERCIAL SCALE FOR STEAM CRACKERS OBJECTIVES: • Prove technology at commercial scale for steam cracker furnaces • Gain engineering & operating experience • Gain experience in reliability and mechanical robustness CURRENT STATUS Q4 2022 2025 202
Slide 60: Addressing Scope 3 GHG Emissions
Classification: General Business Use ADDRESSING SCOPE 3 GHG EMISSIONS SABIC SCOPE 3 GHG EMISSIONS (2021) We aim to collaborate with our 117 In million MTCO2 e partners in initiatives to reduce indirect SCOPE 3 GHG emissions along the value chain 16% All other Scope 3 categories 14% C12 – End-of-life
Slide 61: SABIC ESG Focus and Reporting
Classification: General Business Use SABIC ESG FOCUS AND REPORTING ENVIRONMENTAL SOCIAL GOVERNANCE Company’s management, controls, Company’s commitment as a steward Company’s relationship with employees, structures, compliance, leadership of nature suppliers, customers, communities compensation, aud
Slide 62: Thank You
THANK YOU
Saudi Basic Industries Corp. (SABIC) — Investor Day (October 2022) on 6ix