LyondellBasell Industries NV · NYSE:LYB
LyondellBasell Industries NV — Basell AF S.C.A. — Q2 2007 Earnings Presentation
24 slides from LyondellBasell Industries NV's earnings presentation, Aug 28, 2007
Slide 1: Quarterly review – Second Quarter 2007
Basell AF S.C.A. Quarterly review –Second Quarter 2007 Conference call 28 August 2007 We are the global leader in polyolefins technology, production, and marketing 1
Slide 2: Disclaimer
Disclaimer Forward looking statements – The presentation today may include forward-looking statements as that term is defined in securities law, including but not limited to anticipated plans, litigation and environmental matters, currency effects, profitability, and other commitments or goals. Su
Slide 3: Agenda
Second quarter 2007 performance review Agenda Introduction Second quarter 2007 at a glance Industry overview and business review – Technology – Advanced Polyolefins – Polyolefins – Performance summary Financials Subsequent events 3
Slide 4: Agenda
Second quarter 2007 performance review Agenda Introduction Second quarter 2007 at a glance Industry overview and business review – Technology – Advanced Polyolefins – Polyolefins – Performance summary Financials Subsequent events 4
Slide 5: Basell's 2007 second quarter top highlights
Basell’s 2007 second quarter top highlights 9 World-class safety performance with a TRR of 2.0 TRR Second Quarter 2007 9 Q2 financial performance materially at same level 10 as record Q1 8.9 8.0 9 ~ 1 million tonnes of 8 7.3 6.7 additional licenses sold 6 9 New senior secured 4.1 facility drawn 4 2.
Slide 6: Agenda
Second quarter 2007 performance review Agenda Introduction Second quarter 2007 at a glance Industry overview and business review – Technology – Advanced Polyolefins – Polyolefins – Performance summary Financials Subsequent events 6
Slide 7: The polyolefins industry in Q2 2007
The polyolefins industry in Q2 2007 Highlights Challenges 9 Favourable supply-demand 8 North American polymer margin balance continued in Asia and pressure continued in a volatile Europe and in North America environment with domestic (where exports were strong) demand 2% behind 2006 year to date 9 M
Slide 8: Naphtha price developments
Naphtha price developments Naphtha pricing stabilized in Q2 following a rapid rise late in Q1 US$ per tonne 800 700 600 500 400 300 200 100 Jan- Apr- Jul- Oct- Jan- Apr- Jul- Oct- Jan- Apr- Jul- Oct- Jan- Apr- Jul- Oct- Jan- Apr- Jul- Oct- Jan- Apr- Jul- Oct- Jan- Apr- Jul- 2001 2001 2001 2001 2002
Slide 9: European cracker fundamentals
European cracker fundamentals Naphtha pricing and margins stabilized in the second quarter. Year to date margins are roughly equal to the average margins for all of 2006. Feedstock price development in EUR/ton Naphtha Price - €/t Ethylene Price - €/t 700 1000 Naphtha 600 900 500 800 400 700 300 600
Slide 10: Technology business review
Technology business review 9 Pro-forma Q2 2007 Q2 2006 YTD 2007 YTD 2006 EBITDA is ahead of the excellent mln € performance of Revenue 134 119 219 212 Q2 2006 Pro-forma 9 Continued good EBITDA 81 79 120 116 licensing sales with a further 1,000kta of capacity licensed during the quarter 9 Catalyst sa
Slide 11: Advanced Polyolefins business review
Advanced Polyolefins business review 9 Q2 2007 pro- Q2 2007 Q2 2006 YTD 2007 YTD 2006 forma EBITDA is 13% ahead of Q2 mln € 2006 Revenue 418 392 834 782 9 Sales volumes Pro-forma grew by 7% vs. EBITDA 52 46 100 84 Q2 2006 9 Catalloy sales volumes ahead of 2006. Margins improving but below 2006 in so
Slide 12: Polyolefins business review
Polyolefins business review PO Europe PO NA PO International 9 Second quarter 9 Second quarter 9 Excellent volumes volumes and volumes ahead of and spreads spreads ahead of same period last resulted in 31% same period of year. increase in second previous year quarter EBITDA 9 Smooth integration 9 Ye
Slide 13: Joint venture business review
Joint venture business review Joint ventures Q2 2007 Q2 2006 YTD 2007 YTD 2006 9 Equity income mln € increased 27 21 59 35 Equity Income substantially in the second Dividends and quarter 54 4 59 4 other cash 9 SPC paid first dividend 9 Net €45 million 13
Slide 14: Summary of Basell's performance vs. Q2 2006
Summary of Basell’s performance vs. Q2 2006 2007 Pro-forma YTD EBITDA result is 48% ahead of last year LTM pro-forma EBITDA of € 1.3 billion Technology significantly ahead of 2006 Advanced Polyolefins continued to grow Polyolefins Europe delivered excellent spreads and volumes Polyolefins No
Slide 15: Agenda
Second quarter 2007 performance review Agenda Introduction 2007 at a glance Industry overview and business review – Technology – Advanced Polyolefins – Polyolefins – Performance summary Financials Subsequent events 15
Slide 16: Quarterly Pro-forma EBITDA
Quarterly Pro-forma EBITDA Basell continues to perform strongly with a LTM pro-forma EBITDA of €1,274 million 400 374 371 13 315 292 300 10 50 € million * 214 200 374 358 282 265 100 214 0 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Reported EBITDA excluding specials Specials 16 *Includes 10 million OBS
Slide 17: Free cash flow and working capital
Free cash flow and working capital Good working capital management and strong business performance resulted in positive cash flow generation Free Cash Flow before debt service (€ in millions) Q2 2007 YTD 2007 2006 2005 EBITDA 358 732 1,030 766 Change in Working Capital -177 -250 -85 -118 Dividends a
Slide 18: Re-Financing
Re-Financing New Senior Facility €1,650 mln revolver replaces €1,240 mln residual old SFA Total facility of €1,650 mln Expected lower financial – €300 mln revolver charges (~€25 mln annually) : – €850 mln revolver loan – spread linked to Total Net Debt – €500 mln acquisition facility to EBITDA r
Slide 19: Basell's debt structure
Basell’s debt structure € million Total external funding Net debt to EBITDA 4,000 ratio of 1.8 3,496 517 3,000 120 Net debt since 509 2,450 acquisition is lower 615 2,000 1,100 55 by €810 million 3,122 222 2,312 1,000 956 €140 million 1,250 602 dividend in Q2 0 -374 -138 Cash and cash -1,000
Slide 20: Basell businesses in the news
Basell businesses in the news Technology – Pequiven and Braskem select Basell’s Spheripol technology for a 450 kta polypropylene plant in Venezuela – Basell’s latest generation Avant ZN catalysts now commercially available in China Polyolefins – Basell announces a new expansion project for its S
Slide 21: Third quarter 2007 current performance
Third quarter 2007 current performance Safety – Year to date TRR at the end of July has improved to 1.9 Technology – Continued strong catalyst sales – Excellent progress on a number of licensing projects Advanced Polyolefins – Demand has been strong across all three product lines, but below Q2
Slide 22: Agenda
Second quarter 2007 performance review Agenda Introduction 2007 at a glance Industry overview and business review – Technology – Advanced Polyolefins – Polyolefins – Performance summary Financials Subsequent events 22
Slide 23: Subsequent events
Subsequent events Huntsman transaction was announced with Basell and then cancelled providing a break fee of €145 million Signed an agreement to acquire Lyondell Chemical Company for $48.00 per share Announced intention to acquire Shell’s Berre-l’Etang refinery for $700 million Paid dividend
Slide 24: Thank you
Thank you @® basell 2 Polyolefins