Orbia Advance Corp. Sab De Cv · BMV:ORBIA
Orbia Advance Corp. Sab De Cv — Investor Presentation (May 2023)
51 slides from Orbia Advance Corp. Sab De Cv's investor presentation, May 2023
Slide 1: Purpose-Driven. Customer-Focused. Addressing World Challenges.
Purpose-Driven. Customer-Focused. Addressing World Challenges.
Slide 2: Safe Harbor
Safe Harbor In addition to historical information, this presentation contains "forward-looking" statements that reflect management's expectations for the future. The words “anticipate,” “believe,” “expect,” “hope,” “have the intention of,” “might,” “plan,” “should” and similar expressions generally
Slide 3: We Are Orbia | Global and Purpose-Driven Investment Thesis
We Are Orbia | Global and Purpose-Driven Investment Thesis 01 Harnessing the power of material science and innovation to serve customer needs, address world challenges and provide sustainable solutions 02 Investing in profitable growth, leveraging our uniquely advantaged positions to bring different
Slide 4: Global Imprint and Impact
Global Imprint and Impact Diversified Global Footprint Revenue1 by Region 3% 7% Africa & Asia others Amsterdam, Netherlands 35% Europe Boston, MA USA 22% South America Mexico City, Mexico Tel Aviv, $9.6B 2022 Revenue Israel 33% North America ■ Operations and commercial activities 4 Global strategic
Slide 5: Leading Positions Across All Businesses
Leading Positions Across All Businesses #1 #1 #1 #1 #1 Global specialty in Europe Globally3 in the U.S.4 Global fluorspar PVC producer1 producer5 #6 Global general PVC #1 TOP 3 in LATAM producer2 in Europe4 Advantaged player in PVC Leading global provider Global market leader in precision Market lea
Slide 6: Orbia Plans to Invest in Profitable Growth to Capture and Exceed Market Growth Rates
1 Invest in Growth and Innovation Orbia Plans to Invest in Profitable Growth to Capture and Exceed Market Growth Rates Targeted Orbia Revenue Market Growth Rate +/-1%1 Growth Rate +/-1%2 Market Growth Drivers • Basic needs for clean water, sanitation, building safety and medical products Polymer Sol
Slide 7: Vertical Integration Enables Low-Cost PVC Production and Security of Supply
2 Leverage Vertical Integration Vertical Integration Enables Low-Cost PVC Production and Security of Supply Downstream Orbia businesses Specialty Ethane Ethylene General PVC Compounds VCM PVC Building & Chlorine Specialty PVC Infrastructure Brine Precision Caustic Soda Agriculture Value-added byprod
Slide 8: Continuing to Realize Synergies Across Our Business Groups
2 Leverage Vertical Integration Continuing to Realize Synergies Across Our Business Groups Synergy Vertical Innovation Geographic Asset Category Integration Mindset Synergies Synergies Description • Supply security • Need sharing and • Enter new markets • Share resources and • Improved economics col
Slide 9: Highly Disciplined Approach to Investments in Profitable Growth
3 Create Shareholder Value Highly Disciplined Approach to Investments in Profitable Growth 70 - 80% of our growth is captured in core markets • Rich pipeline of opportunities within • Expansions within current businesses our existing portfolio and existing markets • Projects are highly actionable, l
Slide 10: Progressing on Our Path to Carbon Neutrality and Setting New Targets
Progressing on Our Path to Carbon Neutrality and Setting New Targets Our pathway1 is backed by science-based commitments 2025 2030 2050 Environmental Safety Waste Management Air Emissions Climate Change TRIR <0.2 for 100% of facilities to 100% of sites certified Reduce sulfur oxides Climate Change C
Slide 11: Aspiring to Net Zero With Focus on Customers
Aspiring to Net Zero With Focus on Customers Decarbonization and sustainability solutions guide our work in material science and innovation Running Low-Impact Delivering Sustainable Seeding New Businesses and Resilient Operations Solutions for a Net-Positive World Seeking opportunities to minimize o
Slide 12: Seeding New Businesses for a Net Positive World
Seeding New Businesses for a Net Positive World We are exploring several sub-categories in the broad Climate Tech1 space where we can add value: Energy Mobility & Transport Food, Agriculture & Land Use Heavy Industry Built Environment Production, development and Transition to electrical Efficient so
Slide 13: Business Groups
orbia ©) Business Groups
Slide 14: An industry leader in the production of PVC resins, polymer compounds and derivative chemicals
An industry leader in the production of PVC resins, polymer compounds and derivative chemicals Enabling solutions for: $3.5B $1.1B 2021 Revenues 1 2021 EBITDA • Clean water and sanitation 3-year CAGR: 11.8% 3-year CAGR: 28.9% • Affordable housing and infrastructure • Food and water security • City-s
Slide 15: Applications for Advancing Life | Robust Growth Potential
Applications for Advancing Life | Robust Growth Potential Building Infrastructure Cleaning & Automotive Water Medical & Food & PVC: PVC: Sanitation PVC: Treatment Pharmaceutical Beverage Flooring, windows, Pipes and fittings Derivatives: Artificial leather, sealants, Derivatives: PVC: PVC: carpets,
Slide 16: Strong, Stable PVC Demand Growth Over Decades
Strong, Stable PVC Demand Growth Over Decades Global PVC Demand1 2010 – 2030E • PVC demand driven by building and 65 infrastructure industries and global 57 2.6% urbanization CAGR 4.5% • Demand expected to accelerate after 46 CAGR COVID-19 pandemic and then resume 2.3% Million Metric Tons 41 long-te
Slide 17: PVC Supply Will Remain Constrained…
PVC Supply Will Remain Constrained… Global PVC Supply1 2011 – 2025 Expansions & Closures • Under-investment in new capacity in the industry over the last 10 years • Announced expansions indicate that 4.3 PVC supply additions will not keep pace with demand growth • Aging assets and lack of investment
Slide 18: Planned Investment in the PVC Value Chain
1 Invest in Growth and Innovation Planned Investment in the PVC Value Chain1 Strengthening our low-cost position; security of supply and integration value to downstream businesses Strategic Rationale >$650M Estimated • Supply/demand imbalance creating EBITDA Contribution by 1-million-ton favorable i
Slide 19: Our Uniquely Advantaged Position Places Us at the Low End of the Industry Supply Curve
1 Invest in Growth and Innovation Our Uniquely Advantaged Position Places Us at the Low End of the Industry Supply Curve • Orbia’s integration and access to PVC Supply Cost Curve low-cost raw materials positions us Capacity: at left side of the supply curve today 2,500 59 million tons • Low-cost pla
Slide 20: Investing in Growth and Innovation
1 Invest in Growth and Innovation Investing in Growth and Innovation Integrated Chlor-Vinyl Specialty PVC Low emissions and PVC Capacity Global Growth process technology, with maximum use • Increase of 1M mt or 70% of • Increase of 110 kt of Specialty General Resins PVC capacity Resins capacity of c
Slide 21: Building & Infrastructure: sustainability-based customer solutions
Offering sustainability-based customer solutions for drinking water, sanitation, climate resilient cities and better $2,922M $424M 14.5% 2021 Revenues 1 2021 EBITDA 2021 EBITDA margin building performance 3-year CAGR2: 7.4% 3-year CAGR2: 14.6% 3-year Average2: 13.0% Redefining today’s pipes and fitt
Slide 22: Addressing Water and Energy Challenges
Addressing Water and Energy Challenges Cities lose up to 60% 50% of the people in the 30% heavier rainfall due to 40% of energy is consumed of all pumped water developing world live climate change3 in buildings4 through pipe leakages1 without improved sanitation2 1. Source: (R. Liemberger and A. Wya
Slide 23: Providing Solutions to Optimize Water, Improve Sanitation, Enhance Urban Climate Resilience and Reduce Energy Use
Providing Solutions to Optimize Water, Improve Sanitation, Enhance Urban Climate Resilience and Reduce Energy Use in Buildings Safe and Efficient Better Sanitation Climate-Resilient Better Building Water Supply and Hygiene Cities Performance Water Infrastructure Soil & Waste Products Stormwater Mana
Slide 24: Investing in Growth and Innovation
1 Invest in Growth and Innovation Investing in Growth and Innovation Existing Europe & Latin America • Cross-selling existing • Expanding services and • Maintaining status as • Adding technologies via products, solutions advanced digital solutions “partner of choice” M&A, internal development, and s
Slide 25: Precision Agriculture: Grow more with less
Focusing on precision irrigation systems, greenhouses and digital $1,126M $171M 2021 Revenues 1 2021 EBITDA 15.2% 2021 EBITDA margin 3-Year CAGR: 6% 3-Year CAGR: 3.4% 3-Year average: 17.0% farming technologies • Solutions enable farmers and producers to get higher and better- quality yields while us
Slide 26: Addressing Our Limited Resource Future with Precision Irrigation Solutions
Addressing Our Limited Resource Future with Precision Irrigation Solutions The world today: The world in 20501: Global water Irrigated area as Global irrigated area withdrawal by sector % of arable land by method 10B People 7% Micro-irrigation 70% Agricultural 18% Sprinklers 60% More food needed 76%
Slide 27: The Advantages of Precision Irrigation
The Advantages of Precision Irrigation Higher and better-quality yields, typically, 50% - 100% more1 Reduced costs of other inputs such as crop protection, fertilizers, labor and energy Average of 50% water savings Improved sustainability 1. Various company trials. Investor Presentation | 27
Slide 28: Leveraging Leadership and Quality to Outpace Market Growth
Leveraging Leadership and Quality to Outpace Market Growth Aligned with population growth, local food security and climate change megatrends Precision Irrigation Protected Agriculture (Greenhouse) • Leader in precision irrigation, expecting to • Accelerating market penetration following expand curre
Slide 29: Sustainable Competitive Advantages with Full End-to-End Solutions
Sustainable Competitive Advantages with Full End-to-End Solutions Water Full services • Best-in-class, broad range of storage end-to-end integrated offerings Automation & & support Pumps fertigation • Strong brand based on reputable teams, largest distribution network, design and engineering Agro ma
Slide 30: Investing in Growth and Innovation
1 Invest in Growth and Innovation Investing in Growth and Innovation Core Business • Expand market share leadership above 30% • Significant penetration into extensive • Geographic expansion into Africa, and grow market leadership in traditional crops such as corn, rice, cotton in excess Central Asia
Slide 31: Data Communications: Enabling advanced connectivity infrastructure
Producing conduit, cable-in- conduit and accessories for the passive telecommunication networks infrastructure industry Essential and innovative products and solutions create physical pathways for $994M 2021 Revenues 1 $134M 2021 EBITDA 13.5% 2021 EBITDA margin fiber and other network technologies 3
Slide 32: Addressable Market Expanding Rapidly Driven by Investments in Connectivity
Addressable Market Expanding Rapidly Driven by Investments in Connectivity Conduit Market Driven by Demand for Fiber Large, multi-year growth driven by • Urban and rural broadband need for fiber to support billions of • 5G cellular mobile networks devices with private and government- • Data centers
Slide 33: Providing Foundational Infrastructure with Sustainable Competitive Advantages
Providing Foundational Infrastructure with Sustainable Competitive Advantages • 50 years of market leadership and innovation 200+ Salesforce and Project Specialist Employees1 Largest, most sophisticated among peers • Global presence, strategically aligned with high-growth markets 75% 15 of Top 20 La
Slide 34: Investing in Growth and Innovation
1 Invest in Growth and Innovation Investing in Growth and Innovation Core Business • Grow revenue from $1.0 • Expand and upgrade • Increase strategic • Increase partnerships to $1.7B European footprint to accounts revenue with cloud/data center • Expand and upgrade capacity in capture new fiber by 2
Slide 35: Fluorinated Solutions: From mine to market
1 Creating fluorine-based products, technologies and $743M $244M 32.9% 2021 Revenues 2021 EBITDA 2021 EBITDA margin applications that advance life 3-year2 CAGR: -3.8% 3-year CAGR: -11.5% 3-year average: 36.5% around the world Fluorspar reserves ensure a secure, sustainable supply chain to enhance 18
Slide 36: Fluorine Plays a Fundamental Role in Enhancing our Day-to-Day Lives
Fluorine Plays a Fundamental Role in Enhancing our Day-to-Day Lives Infrastructure Cooling & Refrigeration Medical Propellants Pharmaceuticals Fluorspar is critical to cement, Fluorine is used in refrigerants Fluorinated medical gas Fluorine plays a key role steel and aluminium industries for air co
Slide 37: Solving Customer Problems and Addressing World Challenges
Solving Customer Problems and Addressing World Challenges Market Size 2030 CAGR Minerals $2.5B Fluorspar • Metspar key to quality production of steel and cement with lower carbon footprints 3% - 5% CAGR1 Hydrogen Chemical $5B fluoride/aluminum • Hydrogen fluoride is a key intermediate for semiconduc
Slide 38: Become a Key Materials Supplier to the Battery Market
1 Invest in Growth and Innovation Become a Key Materials Supplier to the Battery Market The Energy Storage Market Investment Focus Vertically-integrated partnership in North >20% CAGR Lithium-ion battery market will grow with electric vehicle demand beyond 2030 LiPF6 and other electrolyte salts Amer
Slide 39: Investing in Growth and Innovation
1 Invest in Growth and Innovation Investing in Growth and Innovation Core Business • Optimize and invest in minerals and • Improve the efficiency of our mine chemical intermediates through technology advancement Low Carbon Footprint Refrigerants • Auto, commercial, residential • Recycling and reclam
Slide 40: Financial Strategy
orbia ©) Financial Strategy
Slide 41: Targeting Revenue of $13.0 – $15.0B and EBITDA of $3.1 – $3.5B by 2027
Targeting Revenue of $13.0 – $15.0B and EBITDA of $3.1 – $3.5B by 2027 Net Revenue ($B) EBITDA ($B) & EBITDA Margin (%) Driving Growth Historical and Target Historical and Target Significant revenue growth through 2027 and beyond $13.0 – $15.0 4.00 $3.1 – $3.5 3.50 Growth driven by: $9.6 3.00 • Sust
Slide 42: Investing in Growth, Realizing Synergies, Maintaining Capital and Operational Discipline Yields Outstanding Results
Investing in Growth, Realizing Synergies, Maintaining Capital and Operational Discipline Yields Outstanding Results Polymer Building & Precision Data Fluorinated Solutions Infrastructure Agriculture Communications Solutions • Capacity expansion • Existing Europe • Core business • Core business • Cor
Slide 43: Increasing Operating Cash Flow and Operating Cash Flow Conversion
Increasing Operating Cash Flow and Operating Cash Flow Conversion Operating Cash Flow1 ($M) & Operating Cash Flow Conversion2 (%) Strong Cash Flow • Operating Cash Flow expected to more than double in 5 years, by $1,900 - $2,100 2027 • Achieve Operating Cash Flow Conversion of >60% through 2027 $1,1
Slide 44: Targeting Long-Term ROIC in Mid-Teens
Targeting Long-Term ROIC in Mid-Teens Historical ROIC (%) and Forecast Focusing on Returns • Targeting ROIC above 10% through investment cycle 13.9% 13% - 15% • Longer-term ROIC target in mid- 12.3% teens 7.1% 2020 2021 2022 2027E Investor Presentation | 44
Slide 45: Supporting Growth with a Strong, Flexible Balance Sheet
Supporting Growth with a Strong, Flexible Balance Sheet • Target Net Debt/EBITDA: <2.5X • Bank Facility • Credit Ratings • Long-Term Debt • Ample liquidity with $850M in available • Moody’s: Baa3 stable outlook credit under $1B revolving loan facility • S&P: BBB- stable outlook • No near-term fixed
Slide 46: Demonstrated Ability to Grow EBITDA and Maintain Leverage Below Target Over Long Term
Demonstrated Ability to Grow EBITDA and Maintain Leverage Below Target Over Long Term 9 Orbia EBITDA ($B) and Leverage Ratio 2010 - 2021 $2.05 8 $1.91 7 $1.40 $1.37 6 $1.32 5 $1.11 $0.96 $0.91 $0.93 4 $0.90 $0.83 $0.82 3 $0.65 2.2 2.1 2.1 2.1 2 1.8 1.7 1.3 1.1 1.2 1.3 1.0 1.0 1 0.7 0 2010 2011 2012
Slide 47: Returning Cash to Shareholders
Returning Cash to Shareholders $1.1B to Shareholders 2018-2022 Orbia Dividends (in $M) History of Returning Cash Consistently returned cash to shareholders since 2018 $370 $360 $350 >14% of EBITDA returned $340 $330 $320 $300 • through dividends since 2018 $310 $300 $290 $60 $280 $240 • Average divi
Slide 48: Maximizing Returns with Disciplined Capital Allocation
Maximizing Returns with Disciplined Capital Allocation Invest in Growth Return Cash to Shareholders Invest in Organic Growth Pay Dividends • Reinvest cash flow to invest in • Regular return of cash to shareholders with high-return growth including dividend increases, aligned with earnings capacity,
Slide 49: Operating Cash Flow Funds 75% of Our Cash Requirement Through 2027, While Maintaining Leverage <2.5x
Operating Cash Flow Funds 75% of Our Cash Requirement Through 2027, While Maintaining Leverage <2.5x Sources of Cash 2022 – 2027 inclusive Uses 2022 – 2027 inclusive Operating $7.8B - $8.0B • Grows from $1.1B to over Maintenance $1.8B - $1.9B • Increases from low level Cash Flow1 $2.0B per year Capi
Slide 50: Delivering Top and Bottom-Line Growth, Industry-Leading Returns and Consistent Value to Shareholders
Delivering Top and Bottom-Line Growth, Industry- Leading Returns and Consistent Value to Shareholders $13.0B – $15.0B $3.1B – $3.5B 2027 Revenue 2027 EBITDA 22 – 24% >60% 13 – 15% <2.5x Long-term EBITDA margin Operating cash Return on Leverage ratio conversion invested capital Dividends Stable and g
Slide 51: IR Contact
IR Contact Gerardo Lozoya Latapi Investor Relations Director gerardo.lozoya@orbia.com Diana Echemendía Echeverría Investor Relations Manager diana.echemendia@orbia.com Orbia Social Networks http://linkedin.com/company/orbiaglobal twitter.com/orbia instagram.com/weareorbia/ Yammer Investor Presentati
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