Lyondellbasell Industries Nv · NYSE:LYB
Lyondellbasell Industries Nv — Investor Day (April 2017)
116 slides from Lyondellbasell Industries Nv's investor day presentation, Apr 5, 2017
Slide 1: Investor Day: Value-Driven Growth
Investor Day Value-Driven Growth New York Stock Exchange April 5, 2017 1
Slide 2: Agenda
Agenda 11:30 – 12:30 Lunch Management Team 12:30 Welcome and Agenda Dave Kinney 12:40 Value-Driven Growth Bob Patel 1:15 Value-Driven Growth Thomas Aebischer 1:45 Q&A Bob Patel and Thomas Aebischer 2:00 Break Olefins and Polyolefins – 2:15 Bob Patel Overview Olefins and Polyolefins - 2:30 Paul Augus
Slide 3: 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 ri
Slide 4: Investor Day: Value-Driven Growth (Bob Patel)
Investor Day Value-Driven Growth Bob Patel Chief Executive Officer New York Stock Exchange April 5, 2017
Slide 5: LyondellBasell Today
LyondellBasell Today Segments Financials Olefins & Polyolefins Americas $29.2 B 2016 Revenue Olefins & Polyolefins Europe, Asia, International Channelview, TX $6.6 B (Olefins Cracker) 2016 EBITDA Ex. LCM (1) Intermediates & Derivatives $9.20 Maasvlakte, NL 2016 Diluted EPS Ex. LCM (Propylene Oxide)
Slide 6: Leading Scale and Market Positions
Leading Scale and Market Positions 2016 EBITDA (1) Global Market Positions (2) SABIC Ethylene #5 BASF Dow Chemical Chemicals Propylene #6 DuPont Propylene Oxide #2 Evonik Polyolefins (PE and PP) #3 Covestro Eastman Polypropylene #2 Celanese Polymers Westlake Polyethylene #6 Huntsman Polypropylene Co
Slide 7: Significant Global Footprint
Significant Global Footprint Europe North America France USA Germany Illinois Italy Iowa Netherlands Asia Pacific Louisiana Rotterdam Australia Michigan Poland China New Jersey Spain Hong Kong Ohio UK India Tennessee London Malaysia Texas Middle East South Korea Houston Saudi Arabia Thailand Mexico
Slide 8: Experienced Team
Experienced Team Bob Patel ■ Chief Executive Officer and Chairman of Management Board ■ 29 years of petrochemical experience Thomas Aebischer Paul Augustowski Dan Coombs Jim Guilfoyle Richard Roudeix ■ Executive Vice ■ Senior Vice ■ Executive Vice ■ Senior Vice ■ Senior Vice President, Chief Preside
Slide 9: LyondellBasell Followed a Methodical Path
LyondellBasell Followed a Methodical Path 2010 2016 1. Formation 2. Establishment 3. Development Rapid Capture of Latent Opportunities Capabilities Optimize Footprint Establish and Stabilize Culture and Systems Manage Costs Increase Profitability Increase Cash Flow 9
Slide 10: Guided by a Clear and Value-Oriented Strategy
Guided by a Clear and Value-Oriented Strategy Achieve Top Quartile Operations Cost Discipline Practice Relentless Financial Stewardship Prudent Value Creation Pursue Profitable Organic Growth In Cycles Capture Opportunities 10
Slide 11: Focus on Safety Drives Highly Reliable Operations
Focus on Safety Drives Highly Reliable Operations Strong Reliability 0.60 2016 Operating Rates (2) LYB 0.40 Total Recordable U.S. 0.20 95% Incident Rate (1) Ethylene 2009 2010 2011 2012 2013 2014 2015 2016 ACC 2015 Average EAI 100% 95% Ethylene 80% LYB 60% Indexed Process Safety / 40% Environmental
Slide 12: Strong Operations Coupled with Cost Discipline and Productivity
Strong Operations Coupled with Cost Discipline and Productivity SG&A % of Revenue 2016 SG&A % of Revenue Peer Avg. 9.4% 20% 10% 16% 8% Lowest- 12% 6% Cost 8% 4% 2.9% Producer 4% 2% 0% 2012 2013 2014 2015 2016 # of Employees 2016 EBIT per Employee(1) 13,600 USD, thousands $500 13,400 400 Highest- 300
Slide 13: Performance Rigorously Benchmarked, Employees Aligned with Shareholders
Performance Rigorously Benchmarked Employees Aligned with Shareholders Short-Term Incentive Program aligned …Long-Term Incentive Program tied to with annual performance goals… differentiated performance over 3- year horizon Prior to 2016 60% Business Results ■ Cost discipline ■ Return on assets Cost
Slide 14: Our Approach Delivers Strong Results Under a Range of Conditions
Our Approach Delivers Strong Results Under a Range of Conditions 300% LYB Peers S&P 500 6-Year EPS CAGR 250% +16.3% 200% Earnings 150% Per +5.1% Share (1) 100% (2.3%) 50% 2011 2012 2013 2014 2015 2016 WTI Oil Price Ethylene Supply / Demand (2) Maya 2-1-1 Refining Spreads lbs., Global Ethylene Capaci
Slide 15: Delivering Leading Total Shareholder Returns
Delivering Leading Total Shareholder Returns 5-Year Total Shareholder Return vs. Peers (1) 250% 200% 150% 100% 50% Westlake Methanex Dow Huntsman Eastman BASF DuPont Celanese Olin Corp SABIC CF Chemical Industries TSR outperformance vs. peers underpinned by strong cash flows, robust dividends and sh
Slide 16: Reached a Point Where Options Begin To Broaden
Reached a Point in the Road Where Options Begin To Broaden Where We’ve Been Where We Are Going Leading Scale & Market Position Global Reach Operational Excellence Excellent HSE Performance Strong Balance Sheet & Best-in-Class Leading Cash Flows TSR Rapid, High-Return Projects Ethylene Expansions Gro
Slide 17: We Can Generate Value by Leveraging Skills and Strategy
We Can Generate Value by Leveraging Skills and Strategy 2010 2016 Beyond 4. Sustainable 1. Formation 2. Establishment 3. Development Growth Build on Success and Skills Rapid Capture of Latent Opportunities Capabilities Optimize Footprint Establish and Stabilize Culture and Systems Manage Costs Incre
Slide 18: Foundation in Place to Support Growth
Foundation in Place to Support Growth . . . Industry Global Scale Single Favorable Leading Standardized Manufacturing on Which Instance Corporate HSE Systems to Build of SAP Structure Culture LyondellBasell Foundational Strengths 18
Slide 19: Demonstrated Heritage of Integrating Businesses
. . . With a Demonstrated Heritage of Integrating Businesses Industry Global Scale Single Favorable Leading Standardized Manufacturing on Which Instance Corporate HSE Systems to Build of SAP Structure Culture LyondellBasell Foundational Strengths 19
Slide 20: Value Can Be Generated by Leveraging Our Approach
Our Foundation Is in Place: Value Can Be Generated by Leveraging Our Approach Fits LYB Skill Set Improves LYB Large-Scale Earnings Assets Stability Strengthens Shareholder Benefits Geographic From Our Presence Value Strengths Petro- Meets or chemical or Exceeds Derivative Financial Extends Criteria
Slide 21: Strive to Build on Our Strengths and Skills
Strive to Build on Our Strengths and Skills Well Head Midstream Olefins & Intermediates & Performance & Electronic & Refining Polymers Eng. Resins Bio & Pharma Aromatics Specialty Polycarbonate Seeds Handling PE, PP, PO, Pharmaceuticals Gasoline Ethylene PP Compounds Crude Oil Fractionation PVC, Fra
Slide 22: World-Class Operator with Broad Options
World-Class Operator with Broad Options Leading scale and market position Best-in-class operator Leading cash flow generation Strong capital return Safe, strong, and sustainable dividend Strong balance sheet Multiple paths to shareholder value with a balanced capital allocation strategy
Slide 23: Investor Day: Value-Driven Growth (Thomas Aebischer)
Investor Day Value-Driven Growth Thomas Aebischer Chief Financial Officer New York Stock Exchange April 5, 2017
Slide 24: Strong Foundation on Which to Build
Strong Foundation on Which to Build Strong financial foundation with upside Continue to be a thoughtful industry leader Past Success Excellent track record delivering EBITDA and EPS Peer-leading total shareholder return Strong and sustainable dividend yield Leading ROIC Future capital
Slide 25: Methodical Approach Established a Record of Strong Results
LYB’s Methodical Approach Established a Record of Strong Results LYB EBITDA (ex. LCM) 2016 EBITDA (ex. LCM) Refining Technology USD, millions EBITDA LCM 1% $10,000 O&P – 4% I&D Americas 8,000 20% 6,000 44% 4,000 2,000 31% O&P – EAI 2011 2012 2013 2014 2015 2016 $12.00 10.00 8.00 Earnings Per Share (
Slide 26: Industry-Leading Cash Flow Under a Broad Range of Conditions
Industry-Leading Cash Flow Under a Broad Range of Industry Conditions Avg. FCF as % of 2011 – 2016 LYB Cash Flows (1) EBITDA ex. LCM (2011-2016) (2) USD, billions SABIC 69% FCF CAPEX 53% $6 Eastman 37% DuPont 33% Trinseo 32% Dow Chemical 30% 4 BASF 28% Westlake 28% Methanex 24% 2 Celanese 24% Olin C
Slide 27: Peer-Leading Dividends and Share Repurchases
Shareholders Benefitted from Peer-Leading Dividends and Share Repurchases Uses of Capital 2011 – 2016 25% 75% SABIC DuPont Dow CF Ind. Trinseo Celanese Evonik BASF MethanexOlin Corp Eastman HuntsmanWestlake Covestro Capital Returned (Share Repurchase and Dividends) Capital Reinvested (CapEx and M&A)
Slide 28: Capital Deployment Hierarchy
Capital Deployment Hierarchy 2016 Comments Base CapEx ~$1.1 bn ■ First priorities for cash Foundation Interest Expense ~$0.3 bn Dividend ~$1.4 bn ■ Fund through the cycle with cash flow from operations Growth CapEx ~$1.1 bn ■ High-return in advantaged businesses Discretionary Opportunities ■ Discret
Slide 29: Debt Restructuring Generated Significant Value
Debt Restructuring Generated Significant Value LyondellBasell Cost of Debt 9.6% 2010 Average Interest Rate of Debt 490 bps Improvement 4.7% 2016 Average Interest Rate of Debt 29
Slide 30: Committed to a Strong, Growing and Sustainable Dividend
We Are Committed to a Strong, Growing and Sustainable Dividend $4.00 2016 Dividend Yield (2) Interim Dividend per Share $3.33 $3.04 3.00 $2.70 SABIC $2.00 Evonik 2.00 $1.45 3.9% CF Industries 1.00 $0.55 BASF Dow Chemical .00 2010 2011 2012 2013 2014 2015 2016 Olin Corp Huntsman Interim Dividends and
Slide 31: More Organic Growth in Pipeline
More Organic Growth in Pipeline Potential EBITDA Scope CAPEX Start-Up ($MM/year) (MM lbs.) ($MM) ’11-’16 Avg. Margins Increase Ethane Capability 500 2012 ~$25 $50 - $70 Completed Projects EU Butadiene Expansion 155 2013 ~$100 $40 - $50 Methanol Restart 250 MM Gal. 2013 ~$180 $190-210 Matagorda PE De
Slide 32: Balance Sheet Provides Capacity for Value-Driven Growth
Our Balance Sheet Provides Capacity for Value-Driven Growth Sources Uses Priority Optional Balance Inorganic Sheet Opportunities Capacity Share Repurchase Growth Free Cash CAPEX Flow Dividends and Interest Base CAPEX Mandatory 32
Slide 33: Debt Portfolio Characteristics
Debt Portfolio Characteristics (As of 12/31/2016; Adjusted for Q1 Financing Activities) Total and Net Debt (2,5) Liquidity USD, billions $10 ■ Over $5 bn of liquidity (1) 8 Debt Characteristics (2) 6 4 ■ Total Debt $9.1 bn 2 ■ Fixed to Floating Ratio (3) 74% to 26% Total Debt Net Debt ■ Weighted Ave
Slide 34: Balance Sheet Capacity for Strategic Objectives
Balance Sheet Capacity for Strategic Objectives ■ M&A as a use of proceeds could temporarily enhance leverage capacity ■ Requires commitment to pay down portion of debt within 24 months For Illustrative Purposes Only Total Debt / Cost of EBITDA Incremental (@ Close) 10-Year Debt BBB+/Baa1 $9.1 $2.5
Slide 35: A Process to Consider Inorganic Opportunities Focused on Value
A Process to Consider Inorganic Opportunities Focused on Value ■ Build on leading positions and technologies in core strengths M&A Considerations ■ Disciplined approach and process and Process ■ Strive to generate value, not just scale ■ Strong fit with our core competencies Strategic ■ Large-scale
Slide 36: Investor Day: Value-Driven Growth (Patel and Aebischer)
Investor Day Value-Driven Growth Bob Patel Chief Executive Officer Thomas Aebischer Chief Financial Officer New York Stock Exchange April 5, 2017 36
Slide 37: Rigorous Strategic and Financial Criteria
Rigorous Strategic and Financial Criteria 37
Slide 38: Driven by Value Generation
Driven by Value Generation Business Financial Value Characteristics Criteria Our business and financial structures are built to support inorganic growth Prepared to act on opportunity that meets our criteria Remain disciplined 38
Slide 39: Investor Day: Global O&P
Investor Day Global O&P Bob Patel Chief Executive Officer New York Stock Exchange April 5, 2017 39
Slide 40: Global O&P Overview
Global O&P Overview EBITDA (ex. LCM) History Key Messages O&P AM EBITDA O&P AM LCM USD, millions O&P EAI EBITDA O&P EAI LCM LYB O&P is a strong earnings and cash 2011-16 Global Average EBITDA ex. LCM generator $6,000 5,000 Strong global presence 4,000 Global trends favor continued demand 3,000
Slide 41: Substantial Global Footprint
We Have a Substantial Global Footprint . . . Europe North America France USA Germany Illinois Italy Asia Pacific Iowa Netherlands Australia Louisiana Rotterdam China Michigan Poland Hong Kong Ohio Spain India Tennessee UK Malaysia Texas South Korea Houston Thailand Mexico Middle East Saudi Arabia Gl
Slide 42: Strong EBITDA and Cash Flow
. . . Which Generates Strong EBITDA and Cash Flow (EBITDA ex. LCM less Base CAPEX) O&P Americas Cash Flow (1) O&P EAI Cash Flow (1) USD, millions USD, millions 2012 - 2016 Average 2012 - 2016 Average $5,000 $2,500 4,000 2,000 3,000 1,500 2,000 1,000 1,000 500 2012 2013 2014 2015 2016 2012 2013 2014
Slide 43: 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 400 250 PE PP 300 200 ’90 – ’16 150 PE: 4.4% 200 PP: 6.6% 100 100 ’11 – ’16 ’15 – ’16 50 PE: 3.6% PE: 3.9% PP: 4.9% PP: 4.4% 0 2012 2013 2014 2015 2016 2017 2018 2
Slide 44: Global Ethylene Operating Rates Remain Strong Despite New Capacity
Global Ethylene Operating Rates Remain Strong Despite New Capacity Lb, billions Effective Operating Rate Capacity Demand 500 100% Range Of Consultant's / LYB Expectations 450 95% 400 90% 350 85% 300 80% 250 75% 200 70% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2017 – 2021 global ethylene ope
Slide 45: Ethylene Cost Curve Favors U.S. Ethane
Ethylene Cost Curve Favors U.S. Ethane in Both High and Low Oil Scenarios Global Ethylene Cost Curve 2021 Ethylene Supply by Feedstock Cash Cost, ¢ / lb 70 LPG Naphtha NAPHTHA Ethane LPG (w/o co-product integration) CTO/MTO 60 2016 2013 50 current China MTO 40 30 CTO/MTO Brent Crude, $/bbl 20 2013:
Slide 46: Global Polyolefins Supply and Demand Forecasts Remain Favorable
Global Polyolefins Supply and Demand Forecasts Remain Favorable Polyethylene Polypropylene Capacity Demand Nameplate Operating Rate Capacity Demand Nameplate Operating Rate Lb., billion s Lb., billions 420 100% 300 100% 2016-2021 Demand AAGR ~ 4.2% 2016-2021 Demand AAGR ~ 4.6% 350 90% 250 90% 280 80
Slide 47: Investor Day: O&P-Americas
Investor Day O&P-Americas Paul Augustowski Senior Vice President New York Stock Exchange April 5, 2017
Slide 48: O&P-Americas Segment Overview
O&P-Americas Segment Overview EBITDA (ex. LCM) History Key Messages USD, Millions $5,000 EBITDA LCM LYB capacity expansions complete 2011-16 Average EBITDA ex. LCM 4,000 Proven operational reliability and feedstock flexibility 3,000 Major turnarounds complete in past two 2,000 years; significa
Slide 49: North America Benefits from Shale Gas Advantage
North America Continues to Benefit from Shale Gas Advantage Oil to Gas and Ethane Price Ratios (1) Global Ethylene Cost Curve ¢/lb 35 60 2010 2016 Crude Oil / Gas Price Ratio Northeast Asia Contract Ethylene, March 2017 Crude Oil / Ethane Price Ratio 30 50 March 2017 25 40 20 30 15 20 10 10 5 0 2000
Slide 50: Well-Positioned to Leverage Feedstock Flexibility
LYB Well-Positioned to Leverage Feedstock Flexibility 2016 LYB U.S. Cracker Feedstock Flexibility Industry Feedstock Cracker Margins as Percent of Ethylene Production ¢/lb Ethylene 50 45 Cracker Margins Avg., 2011-'16 Naphtha 40 Standard Deviation, 2011 - '16 35 30 Propane / Butane 25 20 15 10 Ethan
Slide 51: U.S. Ethane Supply Continues to Exceed Demand
U.S. Ethane Supply Continues to Exceed Demand U.S. Ethane Supply & Demand U.S. Ethane Frac Spread (1) Mbpd $/gal 2,500 0.45 Base Ethane Cracking Forecast Exports 2,000 0.35 Consultant Range Historical 1,500 0.25 Rejection 1,000 0.15 500 0.05 0 -0.05 2013 2014 2015 2016 2017 2018 2019 2020 2021 2000
Slide 52: Trends Support Further Increases in USGC Ethane Supply
Trends Support Further Increases in USGC Ethane Supply Ethane gal/Mscf Gas Rig Count Additions Natural Gas Demand Increasing Jun ’16 – Mar’17 Bcf/d 300 100 1.5 ~20% ? 200 ~33% 1.0 50 100 0.5 - 2016 2021 2012 2016 TX, OK, NM Rest of U.S. ■ Growing demand focused on ■ Ethane content in natural gas ■ I
Slide 53: Flexibility Within a Broad Ethylene Derivative Portfolio
LYB Has Flexibility Within a Broad Ethylene Derivative Portfolio 2016 LYB Derivatives Capacities (1) LYB Ethylene Capacity (Ethylene Equivalent) MMlb PE Metathesis Styrene EO and D VAM MMlb Integrated Capacity Non-Integrated Capacity 7,500 12,000 10,000 6,000 8,000 4,500 6,000 4,000 3,000 2,000 1,50
Slide 54: Polyethylene Export Economically Favored Versus Ethane/Ethylene
Polyethylene Export is Economically Favored Versus Ethane/Ethylene Packaging Supply Demand Additions Export Logistics Cost Since 2015 ¢/lb Cumulative MMlb 25 20,000 PE Export Increase vs. 2015 20 Packaging Capacity Added vs. 2015 15,000 15 10 10,000 5 5,000 PE Export Ethane Export Ethylene Export ex
Slide 55: Value Generated by Differentiated Polyolefins Portfolio
Significant Value Generated by Differentiated Polyolefins Portfolio 2016 Polyolefin Volumes & End Uses LYB Value of Differentiated Grades ¢/lb 12 PP 10 PE 8 6 4 2 Packaging Consumer Differentiated Grades Building & construction Transportation 0 Commodity Grades Coatings Textiles & Furnishings 2011 2
Slide 56: Hyperzone PE Technology Extends Our Differentiation
Hyperzone PE Technology Extends Our Differentiation New Hyperzone HDPE investment will offer resins with: Combination of LYB PE and PP technical expertise Excellent balance of processing capability and higher stiffness Targeting high-growth applications 60% of volume representing differentia
Slide 57: Developing Additional Growth Projects
Developing Additional Growth Projects Potential EBITDA (1) ($MM / year) Capex 2016 Project Scope ($MM) Margins COMPLETED Several Expansions and 2 Blb Ethylene ~ $1,900 $370 – 550 Debottlenecks 0.24 Blb PE PROGRESSING Hyperzone HDPE Plant 1.1 Blb PE ~ $700 – 750 $150 - 200 0.55 Blb Ethylene Expansion
Slide 58: O&P-Americas Summary
O&P-Americas Summary ■ North American production continues to be globally favored ■ Expect ethane to remain favored into the future ■ LYB assets provide excellent flexibility ■ Polyolefins differentiation provides incremental value ■ Additional expansion options under study 58
Slide 59: Investor Day: O&P Europe, Asia, International
Investor Day O&P – Europe, Asia, International Richard Roudeix Senior Vice President New York Stock Exchange April 5, 2017 59
Slide 60: O&P-EAI Segment Overview
O&P-Europe, Asia, International Segment Overview EBITDA (ex. LCM) History Key Messages USD, millions EBITDA LCM Record EBITDA in 2015 and 2016 $2,500 2011-16 Average EBITDA ex. LCM Leveraging O&P Europe restructuring in a 2,000 positive market environment 1,500 Delivering differential performa
Slide 61: Drivers of Profitability: Portfolio is Well-Balanced
Drivers of Profitability: Portfolio is Well-Balanced 2011-2016 EBITDA(1) Drivers for Profitability Near-Term Actions 100% Increased feedstock Sustained focus on flexibility operational excellence, cost and capital discipline High operating rates 75% Cyclical Optimization of feedstock Restr
Slide 62: Structural Improvements and Strong Markets Drive Profit
Structural Improvements and Strong Markets Drive Sustained Profit Improvements Indexed O&P EAI EBITDA Indexed, mid-cycle = 1.0 2.0 Typical for last cycle (1) 1.5 1.0 0.5 0.0 Trough Mid-Cycle Peak 2012 2013 2014 2015 2016 Differentiated/Stable Business Commodity/Cyclical Business ▪ 2011-2013 restruct
Slide 63: Sustainable Differential Performance
Sustainable Differential Performance European Crackers Operating Rate European HDPE Operating Rate 100% 100% Industry LYB Industry LYB 95% 95% 90% 90% 85% 85% 80% 80% 75% 75% 70% 70% 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 EBITDA per pound of Ethylene (1) US ¢ / lb 50 LYB O&P EAI LYB conti
Slide 64: Improved European Cost Position
Improved European Cost Position LYB O&P EAI Ethylene Production from LYB O&P EAI Polyolefins Advantaged Feeds Total Cost Advantage vs. Industry 50% 20% 40% 15% 30% 10% 20% 5% 10% 0% 0% 2010 2016 2010 2015 Optimize profitability with feedstock agility and continuous cost management Source: 2015 PTAI
Slide 65: Lack of New Capacity Should Maintain High Operating Rates
Lack of New Capacity and Moderate Growth Should Maintain High Operating Rates European HDPE Supply-Demand Change European PP Supply-Demand Change MMlb MMlb 2,000 2,000 1,000 1,000 0 0 -1,000 -1,000 -2,000 -2,000 2013-2016 2016-2020 2013-2016 2016-2020 Change in Capacity Change in Demand Change in Ca
Slide 66: Polyolefins Differentiation Provides Earnings Stability
Polyolefins Differentiation Provides Earnings Stability Through the Cycle 2016 LYB EAI Polyolefins Product Volumes ▪ Differentiated grades provide volume stability ▪ Differentiated grades provide premium margin over commodity ▪ Premium margin more significant at the bottom of the Differentiated Grad
Slide 67: Joint Ventures and International Marketing
Joint Ventures and International Marketing LYB Equity Income largely from O&P EAI ▪ Feedstock advantaged USD, millions O&P EAI Other LYB production in Middle East $400 300 ▪ Local participation in Asia/ME 200 markets 100 ▪ Significant JV capacities(1) 2011 2012 2013 2014 2015 2016 ▪ 5.5 B lbs. olefi
Slide 68: Well-positioned for Global Marketing of U.S. Exports
Well-positioned for Global Marketing of U.S. Exports LYB Sales Offices in EAI Regions Differentiated Asia - Marketing and Sales 80+ Countries 1500+ direct customers 100+ staff for sales and marketing 68
Slide 69: Global PP Compounds Generate Stable Returns
Global PP Compounds Generate Stable Returns EBITDA Trend PP Compounds Indexed EBITDA, 2011 = 100% ▪ Leading market position of up to 50% regionally 150% 100% ▪ 2.4B pounds sold in 2016 or 25 lbs for every light vehicle produced in our markets 50% 0% ▪ Organic growth with market and strengthening 201
Slide 70: O&P EAI Strong Portfolio of Businesses and Assets
O&P EAI Strong Portfolio of Businesses and Assets Structurally improved cost basis and flexibility, leveraging 2010-2011 restructuring 50% of 2016 EBITDA generated from areas of differentiation with potential for further growth Premium polyolefin mix PP compounds, Catalloy and Polybutene C
Slide 71: Investor Day: Intermediates & Derivatives
Investor Day Intermediates & Derivatives Jim Guilfoyle Senior Vice President Global Intermediates & Derivatives Global Supply Chain New York Stock Exchange April 5, 2017
Slide 72: Intermediates and Derivatives: Platform for Earnings Stability & Growth
Intermediates and Derivatives: A Platform for Earnings Stability & Growth EBITDA (ex. LCM) History Key Messages USD, millions EBITDA LCM $2,000 Stable earnings and consistent cash generation 2011-16 Average EBITDA xLCM 1,500 Broad product portfolio with feedstock integration 1,000 Leading mark
Slide 73: Fundamental Drivers for Stable Earnings
Fundamental Drivers for Stable Earnings Product and End Use Advanced Diversity Technology I&D Stability Feedstock Contracting Position Strategy and Integration 73
Slide 74: Broad Product Portfolio Provides Resilient Demand
Broad Product Portfolio Provides Resilient Demand Propylene Oxide & Oxyfuels and Related Intermediate Chemicals Derivatives Products - Propylene Oxide (PO) - High Purity Isobutylene (HPIB) - Styrene Monomer (SM) - Propylene Glycol (PG) - Methyl Tertiary Butyl Ether (MTBE) - Methanol (MeOH) Core - Bu
Slide 75: Product Breadth and Contracting Strategy Dampens Volatility
Breadth of Product Portfolio and Contracting Strategy Dampens Volatility EBITDA (ex. LCM) Variability Over Time: Contracting Strategy (1) 2011 – 2016 100% = Average I&D 2011-2016 EBITDA 120% 100% Average Cost Plus 80% Indexed to average I&D EBITDA Market 60% 40% 20% 0% I&D PO&D Intermediates Oxyfuel
Slide 76: Technology Advantage Has Provided Stability and Platform for Growth
Technology Advantage Has Provided Stability and a Platform for Growth Propylene Oxide & Derivatives Co-Products (PO&D) (TBA & Styrene Chain) PO Cost Curve and Global Capacity Propylene Oxide Oxyfuels Cost of PO Production LYB #2 in PO LYB #1 LYB Global Capacity Share (2016) (1) Processes LYB LYB Chl
Slide 77: Styrene and Methanol Scale is Significant
Styrene and Methanol Scale is Significant and Leveraging Styrene Supply and Demand Methanol Supply and Demand Pounds, billions Gallons, millions Effective Capacity Demand % Utilization Effective Capacity Demand % Utilization 75 100% 50 100% 40 70 90% 90% 30 65 80% 80% 20 60 70% 70% 10 55 60% 60% 201
Slide 78: Consistent EBITDA and Outstanding Cash Generation
The Result is Consistent EBITDA and Outstanding Cash Generation EBITDA (ex. LCM) Range 2011 – 2016 (1) 2011 – 2016 Avg. EBITDA (ex. LCM) less Capex (1) USD, billions USD, billions $2.5 $1.5 2.0 1.0 1.5 Average 1.0 0.5 0.5 0.0 0.0 LYB 1 2 3 Peers 4 5 LYB Peers Cash generation and earnings larger than
Slide 79: Market Conditions are Favorable for a PO/TBA Project
Market Conditions are Favorable for a PO/TBA Project Aligns with our strategy LYB Practices the Leading PO Technologies Cost of PO Production LYB Processes Invest where we have leading technology positions POSM Chlorohydrin & Leverage leading market position Non Co-Product PO/TBA Technologies
Slide 80: Propylene Oxide: Favorable Growth Environment
Propylene Oxide: Favorable Growth Environment Global Propylene Oxide (PO) Supply/Demand Operating rate stability Lbs, billions 40 100% Effective Capacity Demand % Utilization PO demand growth equivalent to 30 90% one new world scale plant per year 20 80% Growth underpinned by macro trends of populat
Slide 81: Oxyfuels: Butane Upgraded to High Octane Gasoline
Oxyfuels: Butane Upgraded to High Octane Gasoline U.S. will continue shale gas production and Demand for Oxyfuels is Growing (1) associated NGLs will be abundantly available Thousands of Bbl/day 800 Meets the needs of improving gasoline 700 +25% quality 600 500 Environmental benefit of oxygena
Slide 82: I&D: Strong Foundation Enables Growth
I&D: Strong Foundation In Markets and Technology Enable Growth Maintain focus on strong operations generating steady cash flow Increase investment in core chemical technologies Grow organically through advantaged technologies and feedstocks Expand platform for value-driven growth 82
Slide 83: Investor Day: Refining, Manufacturing and Projects
Investor Day Refining, Manufacturing and Projects Dan Coombs Executive Vice President New York Stock Exchange April 5, 2017 83
Slide 84: Refining
Refining EBITDA (ex. LCM) History Key Messages USD, millions Margins supported by growing demand for cleaner $1,000 fuels and greater heavy crude discounts As Reported LCM 750 Good access to advantaged feedstocks and domestic and export markets 2011-2016 Avg = $440 MM 500 Recent performance im
Slide 85: Heavy Refining Spreads Forecast to Increase
Heavy Refining Spreads Forecast to Increase Maya 2-1-1 $/bbl Maya Discount Gasoline Crack Spread Diesel Crack Spread 25 Diesel fuel demand 20 supported by maritime fuel requirement 15 10 5 10 ppm sulfur gasoline spec increases octane demand 2012 - 2015 Avg 2016 2017 - 2020 Avg Houston Refinery T
Slide 86: Robust Global Manufacturing Footprint
Robust Global Manufacturing Footprint Spanning the Globe Our Focus Europe France GoalZero operations Germany Italy Asia Pacific Netherlands Australia North America Poland USA Spain China India Comprehensive Illinois UK Iowa Malaysia benchmarking Louisiana South Korea Middle East Thailand New Jer
Slide 87: Focus on Manufacturing Cost Discipline
Focus on Manufacturing Cost Discipline Manufacturing Operating Costs (1) Benchmarking (2) 100% 98% Internal and external benchmarking 96% drives focused, continual actions and improvements 94% Olefins: ~ 80% of production in top half operating cost performance 92% Polyolefins: > 50% of productio
Slide 88: 2017 Potential Benefits from 2016 Maintenance Investments
2017 Potential Benefits from LYB Maintenance Investments During 2016 LYB Major Turnarounds Per Year 2017 vs. 2016 Available Capacity 8 1.8 Blb 40 Mbpd 7 6 5 4 600 MMlb 3 2 1 Ethylene Ethylene Derivatives Refining 2013-2015 2016 2017 2018-2020 Avg Avg ~$600 million EBITDA at 2016 industry benchmark m
Slide 89: Increasing Investment in LYB Growth
Increasing Investment in LYB Growth Capital Investment USD, millions $3000 Base Capital programs moving toward Growth profit-generating growth 2500 2000 1500 Base investment increases with Larger asset base due to 1000 growth program Inflation 500 Near-term HSE program spending 2010-2011 A
Slide 90: LYB Projects Have Added Value
LYB Projects Have Added Value Project Schedule(1) Cost(1) Benefit / Comment European Butadiene Expansion Paid for itself in ~3 years Channelview Methanol Restart Paid for itself in ~2 years Matagorda Polyethylene Expansion Paid for itself in ~1 year La Porte Ethylene Expansion Runnin
Slide 91: Gulf Coast Project Pressures Continue but Easing with Time
Gulf Coast Project Pressures Continue but Easing with Time USGC Estimated Labor Demand - 3 month rolling avg. Refining, Chemicals, Natural Gas and Related Industries Number of Craftpersons, thousands 50 ■ Initial wave of industry Hyperzone and PO/TBA projects suffered from higher peak construction 4
Slide 92: Update on Major Projects
Update on Major Projects La Porte Hyperzone Polyethylene PO/TBA ■ 1.1 billion pounds per year ■ 1 billion pounds Propylene Oxide, 29 MBPD Oxyfuels ■ Groundbreaking – May 2017 ■ Final Investment Decision – 3Q 2017 ■ Startup 2019 ■ Est. cost: ~$2.0 – $2.5 billion ■ Est. cost: ~$700 - 750 million Hyper
Slide 93: Summary
Summary ■ Refinery positioned to return to strong cash generation ■ Global manufacturing focus Health, Safety and Environmental excellence Reliability Feedstock efficiency Cost discipline ■ Investment in assets maintains industry-leading reliability ■ Investment in profit-generating growth p
Slide 94: Investor Day: Concluding Remarks
Investor Day Concluding Remarks Bob Patel Chief Executive Officer New York Stock Exchange April 5, 2017
Slide 95: Guided by a Clear and Value-Oriented Strategy
Guided by a Clear and Value-Oriented Strategy Achieve Top Quartile Operations Cost Discipline Practice Relentless Financial Stewardship Prudent Value Creation Pursue Profitable Organic Growth In Cycles Capture Opportunities 95
Slide 96: Market Significantly Undervalues LYB's Earnings and Cash Flow
Market Significantly Undervalues LYB’s Earnings and Cash Flow Enterprise Value / 2017 Consensus EBITDA Premier Operations in Attractive Markets Global Company With Leading Scale Peer Maximum 12.2x and Market Positions Unmatched Cost Discipline and Efficiency Mean 8.3x Sizable and Sustainable Cash Fl
Slide 97: Actions Taken Elevate Earnings at 2010/2011 Conditions
Actions Taken Elevate Earnings Even at 2010/2011 Industry Conditions LYB Potential EBITDA (ex. LCM) LYB Potential Net Income (ex. LCM) USD, millions $6,000 USD, millions $4,000 5,000 3,000 4,000 2,000 2010/11 Average Operating Changes Since Potential Outlook 2010/11 Average Operating Changes Financi
Slide 98: Our Strategy Increases the Upside Potential
Our Strategy Increases the Upside Potential LYB Potential EBITDA (ex. LCM) LYB Potential Net Income (ex. LCM) USD, millions USD, millions 10,000 5,500 9,000 5,000 8,000 4,500 7,000 2014/15 Average Operating Changes Since Potential Outlook 4,000 2014/2015 to Today 2014/15 Average Operating and Financ
Slide 99: Matching Capital Allocation with Maturity of the Company
Matching Capital Allocation with the Maturity of the Company Financial Strong Dividend Organic Growth and Operational Share Optimization Repurchase Driving Growth Where We’ve Been Where We Are Going 99
Slide 100: Well-Positioned for Value-Driven Growth
We Are Well-Positioned for Value-Driven Growth Strong Foundation Global reach Leading technology World-class operator Balance sheet capacity Strong Earnings Upside at a Low Valuation Portfolio breadth with differentiated products Feedstock advantage and flexibility Strong and secure di
Slide 101: Appendix
Investor Day Appendix New York Stock Exchange April 5, 2017
Slide 102: 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 from continuing operatio
Slide 103: Information Related to Financial Measures (continued)
Information Related to Financial Measures (continued) An analysis of capital expenditures is included to show investors the portion of LYB capital investment which is base versus profit generating. Total capital expenditures is the sum of base capital expenditures and profit generating expenditures.
Slide 104: EBITDA Excluding LCM Adjustments to EBITDA
EBITDA Excluding LCM Adjustments to EBITDA Reconciliation of EBITDA Excluding LCM Adjustments to EBITDA For the Years Ended December 31, Average In Millions of Dollars 2011 2012 2013 2014 2015 2016 2011-2016 EBITDA Excluding LCM Adjustments: Olefins & Polyolefins - Americas $ 2,137 $ 2,968 $ 3,573 $
Slide 105: Net Income to EBITDA
Net Income to EBITDA Reconciliation of Net Income To EBITDA For the Years Ended December 31, In Millions of Dollars 2011 2012 2013 2014 2015 2016 Net Income $ 2,140 $ 2,834 $ 3,853 $ 4,168 $ 4,474 $ 3,837 (Income) Loss from Discontinued Operations 332 24 7 4 5 10 LCM Adjustments, After Tax 483 351 1
Slide 106: EBITDA Excluding LCM Less Capital Expenditures
EBITDA Excluding LCM Less Capital Expenditures EBITDA Excluding LCM Less Capital Expenditures Average In Millions of Dollars 2011 2012 2013 2014 2015 2016 2011-2016 EBITDA Excluding LCM Adjustments Olefins & Polyolefins - Americas $ 2,137 $ 2,968 $ 3,573 $ 4,190 $ 3,821 $ 2,906 $ 3,266 Olefins & Pol
Slide 107: EBITDA Excluding LCM Less Base Capital Expenditures
EBITDA Excluding LCM Less Base Capital Expenditures EBITDA Excluding LCM Less Base Capital Expenditures Average In Millions of Dollars 2012 2013 2014 2015 2016 2012-2016 EBITDA Excluding LCM Adjustments Olefins & Polyolefins - Americas $ 2,968 $ 3,573 $ 4,190 $ 3,821 $ 2,906 $ 3,492 Olefins & Polyol
Slide 108: Base Capital Expenditures to Total Capital Expenditures
Base Capital Expenditures to Total Capital Expenditures Reconciliation of Base Capital Expenditures to Capital Expenditures Average In Millions of Dollars 2012 2013 2014 2015 2016 2012-2016 Base Capital Expenditures: Olefins & Polyolefins - Americas 241 249 336 230 448 301 Olefins & Polyolefins - EA
Slide 109: Diluted EPS Excluding LCM to Diluted EPS
Diluted EPS from Continuing Operations Excluding LCM Adjustments to Diluted EPS from Continuing Operations Reconciliation of Diluted EPS from Continuing Operations Excluding LCM Adjustments to Diluted EPS from Continuing Operations For the Years Ended December 31, 2011 2012 2013 2014 2015 2016 Dilut
Slide 110: 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 For the Years Ended December 31, Average In Millions of Dollars 2011 2012 2013 2014 2015 2016 2011-2016 Free Cash Flow $ 1,810 $ 3,727 $ 3,274 $ 4,549 $ 4,402 $ 3
Slide 111: O&P-EAI EBITDA per Average Pound of Ethylene Capacity
O&P-EAI EBITDA Excluding LCM per Average Pound of Ethylene Capacity Reconciliation of O&P-EAI EBITDA Excluding LCM per Average Pound of Ethylene Capacity For the Years Ended December 31, In Million of Dollars Unless Otherwise Indicated 2011 2012 2013 2014 2015 2016 EBITDA Excluding LCM 865 548 839 1
Slide 112: Ratio of LYB Enterprise Value to 2017 EBITDA Consensus
Ratio of LYB Enterprise Value (EV) to 2017 EBITDA Consensus Calculation of Ratio of LYB Enterprise Value (EV) to 2017 EBITDA Consensus In Million of Dollars except for common shares outstanding Common Shares Outstanding, December 31, 2016 404,046,331 Multiplied by: Closing Share Price, December 31,
Slide 113: Ratio of Average Free Cash Flow to EBITDA Excluding LCM
Ratio of Average Free Cash Flow (2011- 2016) to EBITDA Excluding LCM Calculation of Ratio of Average Free Cash Flow (2011-2016) to EBITDA Excluding LCM In Million of Dollars Free Cash Flow (2011- 2016): 2011 $ 1,810 2012 3,727 2013 3,274 2014 4,549 2015 4,402 2016 3,363 Average FCF (2011-2016) 3,521
Slide 114: Ratio of Cumulative Dividends and Share Repurchases to Market Cap
Ratio of Cumulative Dividends and Share Repurchases (2011-2016) to Average Market Capitalization Ratio of Cumulative Dividends and Share Repurchases (2011-2016) to Average Market Capitalization For the Years Ended December 31, In Millions of Dollars 2011 2012 2013 2014 2015 2016 2011-2016 Interim Di
Slide 115: Ratio of Pro Forma Total Debt to EBITDA Excluding LCM
Ratio of Pro Forma Total Debt to EBITDA Excluding LCM Ratio of Pro Forma Total Debt to EBITDA Excluding LCM (1) Pro Forma March In Million of Dollars 2017 Total Long-Term Debt, Including Current Maturities $ 8,387 Short-Term Debt 594 Total Debt, December 31, 2016 8,981 Less: Capital leases 96 Add: U
Slide 116: Ratio of Net Debt to EBITDA and EBITDA Excluding LCM
Ratio of Net Debt to EBITDA and EBITDA Excluding LCM Reconciliation of Ratio of Net Debt to EBITDA and EBITDA Excluding LCM Pro Forma March In Million of Dollars 2017 Total Long-term debt, including current maturities $ 8,387 Short-term debt 594 Total debt, December 31, 2016 8,981 Less: Capital leas
LyondellBasell Industries — Investor Day (April 2017) on 6ix