Alpek, S.a.b. De C.v. Class A · BMV:ALPEK/A
Alpek, S.a.b. De C.v. Class A — Alpek Sab De Cv Ord — Q2 2022 Earnings Presentation
26 slides from Alpek, S.a.b. De C.v. Class A's earnings presentation, Jul 20, 2022
Slide 1: Second Quarter 2022 Earnings Webcast
SECOND QUARTER 2022 EARNINGS WEBCAST
Slide 2: Today's Speakers
TODAY’S SPEAKERS JOSÉ DE JESÚS VALDEZ JOSÉ CARLOS PONS ANTÓN FERNÁNDEZ CEO CFO IRO 3
Slide 3: Topics for Today's Webcast
TOPICS FOR TODAY’S WEBCAST I. Financial Performance II. OCTAL PET Business III. Corpus Christi Polymers IV. SBTi Approval V. 2022 Revised Guidance 4
Slide 4: Integrated PET Margins
INTEGRATED PET MARGINS Asian Margins | Px / MEG to PET (US$/Ton) China -2% 431 420 410 382 356 • Asian reference margins averaged 330 306 310 318 US$410/Ton in 2Q22, higher than 266 275 expected for this quarter 250 242 323 223 260 328 307 PET 262 184 227 249 228 • Asia-China spread decreased 196 15
Slide 5: Polypropylene Margins
POLYPROPYLENE MARGINS NA Polypropylene Margins | PP to PGP (cpp) 52 47 47 +3% 38 39 • PP reference margins increased by 32 3%, as demand for polypropylene remained high 25 22 21 22 19 17 • Increase in margins due to tight 16 15 market conditions 2016 2017 2018 2019 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2020
Slide 6: EPS Margins
EPS MARGINS NA EPS Margin | EPS to Styrene (cpp) 56 -28% 49 41 42 • EPS reference margins decreased 35 (-28% QoQ) in 2Q22 due to an 32 32 33 31 increase in raw material prices 26 27 26 25 • Despite the decline, EPS margins 18 remain at strong levels 2016 2017 2018 2019 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
Slide 7: 2Q22 Financial Highlights
2Q22 FINANCIAL HIGHLIGHTS • High quarter volume of 1.26M tons (+4% QoQ) due to solid demand & incremental volume from OCTAL • Record-high Comparable EBITDA of US$369M (+11% QoQ) due to higher-than-expected reference margins • Leverage increased to 1.2x as a result of OCTAL acquisition while Cash bal
Slide 8: Volume Evolution
VOLUME EVOLUTION Quarterly Sales Volume (Ktons) +4% 1,260 1,201 1,195 1,216 1,172 250 P&C 256 254 • Overall quarterly volume increased 271 240 4% QoQ due to solid demand and incremental volume from OCTAL • Polyester volume was 5% higher QoQ due to OCTAL integration 962 1,011 Polyester • P&C volume d
Slide 9: Feedstock Costs
FEEDSTOCK COSTS Crude Oil & Paraxylene NA Propylene Contract Price NA Px Brent Contract US$/Bbl US$/Ton cpp 140 2,400 90 Crude Oil (Brent) Px +16% 82 2,200 80 +41% -4% 120 2,000 73 • Brent crude oil price increased 70 67 1,800 66 63 61 (+16% QoQ) due to sustained 100 1,600 60 inflationary pressures
Slide 10: EBITDA Breakdown
EBITDA BREAKDOWN 2Q22 EBITDA (US$M) 507 • Record Comparable EBITDA of -15 5 80 Others US$369M (+11% QoQ) +11% 73 156 P&C • Record Polyester Comparable 369 5 EBITDA of US$218M (+13% QoQ) 333 from strong margins and volume 147 225 142 • Record P&C Comparable EBITDA of Others 3 US$147M (+3% QoQ) due mo
Slide 11: Free Cash Flow Generation
FREE CASH FLOW GENERATION Quarterly Free Cash Flow (US$M) 678 1 69 1,776 1,310 507 • Free Cash Flow of US-$535M in 94 32 2Q22 due to high CAPEX from the 238 OCTAL acquisition • Increase in Net Working Capital from higher raw material prices FCF:US$-535M Net Debt EBITDA NWC Financial Taxes CAPEX Divi
Slide 12: Net Debt & Leverage
NET DEBT & LEVERAGE Net Debt (US$M) LTM EBITDA (US$M) Net Debt/EBITDA (Times) 1,776 1,236 1,323 1,310 1,092 1,247 1,225 962 813 733 1,512 1.3 1.2 1.2 1,277 1.1 1.0 1,077 1,145 977 2Q21 3Q21 4Q21 1Q22 2Q22 2Q21 3Q21 4Q21 1Q22 2Q22 2Q21 3Q21 4Q21 1Q22 2Q22 Comp. EBITDA 13
Slide 13: Alpek Acquires OCTAL
ALPEK ACQUIRES OCTAL • Incorporating high-value PET sheet business into its portfolio with expected growth of 6% in the next years • Proprietary DPET® technology with the lowest conversion cost and carbon footprint in the industry • Three manufacturing sites in Oman, Saudi Arabia & USA PET Sheet | T
Slide 14: CCP Resumes Construction
CCP RESUMES CONSTRUCTION • Restarting construction in August 2022, completion estimated by early 2025 • CCP expects to have the most competitive state-of-the- art site in the Americas • Strategic location facilitates competitive raw material procurement and distribution cost PTA PET 1.3 M tons 1.1 M
Slide 15: The SBTi Approves Alpek's Emissions Reduction Target
THE SBTi APPROVES ALPEK’S EMISSIONS REDUCTION TARGET Reaffirms the Company’s commitment to combat climate change Alpek commits to reduce: Absolute scope 1 and Scope 3 emissions 2 GHG emissions by by 13.5% within the 27.5% by 2030 from same time frame a 2019 base year Alpek’s emissions reduction targ
Slide 16: 2022 Revised Guidance & Key Assumptions
2022 REVISED GUIDANCE & KEY ASSUMPTIONS Revised ’22 Previous ‘22 Change 2021 Guidance Guidance (% vs. ‘21) Crude Oil US$/Bbl 100 100 70 43 MARKET Asia PTA/PET Margin US$/Ton 370 355 359 3 MXN / USD (Avg.) MXN 21.3 21.3 20.3 5 Volume Ktons 5,000 5,000 4,798 4 FINANCIALS Comparable EBITDA1 US$M 1,475
Slide 17: Q&A
Q&A JOSÉ DE JESÚS VALDEZ JOSÉ CARLOS PONS CEO CFO 18
Slide 18: Appendix
APPENDIX
Slide 19: Extraordinary Effects Breakdown
EXTRAORDINARY EFFECTS BREAKDOWN 2022 2021 Delta M dls 1Q 2Q YTD 1Q 2Q YTD 1Q 2Q YTD Reported EBITDA 456 507 964 324 273 597 132 234 366 Inventory Adjustment (63) (80) (144) (63) (18) (81) (0) (63) (63) Carry-forward (66) (73) (139) (58) (29) (87) (8) (43) (51) Others 6 15 20 0 (1) (1) 6 16 21 Compar
Slide 20: Relevant References | Crude Oil
RELEVANT REFERENCES | CRUDE OIL Price increased as a result of sustained inflationary pressures Brent Crude Oil Price US$/Bbl 140 120 106 100 80 71 70 64 60 54 44 42 40 20 0 2016 2017 2018 2019 2020 2021 2022 21
Slide 21: Relevant References | Paraxylene
RELEVANT REFERENCES | PARAXYLENE Px prices increased 41%, much greater than Crude Oil NA Px Contract Price +41% (US$/Ton) 1,837 1,301 1,174 1,033 1,066 1,069 954 996 876 876 891 658 685 590 2016 2017 2018 2019 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2020 2021 2022 22
Slide 22: Relevant References | Propylene
RELEVANT REFERENCES | PROPYLENE Slight decrease in Propylene contract prices NA Propylene Contract Price | PGP (cpp) 82 -4% 73 67 66 63 61 54 45 39 41 34 35 31 26 2016 2017 2018 2019 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2020 2021 2022 23
Slide 23: Ocean Freight Prices
OCEAN FREIGHT PRICES Remain under pressure, although starting to gradually decline Asia – USA Spot Ocean Freight Rate (US$K/Container) -5% 10.7 10.8 11.0 10.4 7.2 4.7 4.8 3.9 2.5 2.8 2.6 2.8 2.8 2.1 2016 2017 2018 2019 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2020 2021 2022 24 Note: Prices based on 20-foot con
Slide 24: For Additional Information
FOR ADDITIONAL INFORMATION Email: IR@alpek.com | Phone: +52 (818) 748-1146 ANTÓN • 16 Years at Alfa/Alpek FERNÁNDEZ • Alpek IRO / Corporate Finance / ESG Director since 2022 • Previously held roles as VP of Administration & Strategic Planning at Indelpro, Commercial IRO Technology Manager at Alpek P
Slide 25: Disclaimer
DISCLAIMER This presentation contains, or may be deemed to contain, “forward-looking statements”. By their nature, forward looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The future results of Alpek
Slide 26: Second Quarter 2022 Earnings Webcast
SECOND QUARTER 2022 EARNINGS WEBCAST