Lyondellbasell Industries Nv · NYSE:LYB
Lyondellbasell Industries Nv — Investor Day (March 2023)
117 slides from Lyondellbasell Industries Nv's investor day presentation, Mar 14, 2023
Slide 1: Capital Markets Day
Capital Markets Day March 14, 2023 1
Slide 2: Welcome and Opening Remarks
David Kinney WELCOME AND Head of OPENING REMARKS Investor Relations 2
Slide 3: Agenda
AGENDA 8:30 AM – 9:45 AM FORMAL PRESENTATIONS Welcome and Opening Remarks David Kinney, Head of Investor Relations Creating Solutions for Everyday Sustainable Living Peter Vanacker, Chief Executive Officer Unlocking Value through Culture Transformation Dale Friedrichs, EVP, Operational Excellence an
Slide 4: Cautionary Statements
CAUTIONARY STATEMENTS The statements in this release relating to matters that are not historical facts are forward-looking statements. Actual results could differ materially based on factors including, but not limited to, market conditions, the business cyclicality of the chemical, polymers and refi
Slide 5: Creating Solutions for Everyday Sustainable Living
CREATING SOLUTIONS Peter Vanacker FOR EVERYDAY Chief Executive SUSTAINABLE LIVING Officer 5
Slide 6: LyondellBasell at a Glance
LYONDELLBASELL AT A GLANCE (NYSE: LYB) Diverse portfolio with advantaged feedstocks, leading market positions and high-quality assets 2009 19,300 $41 B $3.9 B $6.3 B $6.1 B NET INCOME 2022 EBITDA 2022 FOUNDED EMPLOYEES 2022 ENTERPRISE VALUE1 $4.1 B $6.5 B CASH FROM OPERATING ACTIVITIES 2022 NET INCO
Slide 7: Building on Foundational Strengths
BUILDING ON FOUNDATIONAL STRENGTHS Proven track-record of utilizing strengths to drive best-in-class operations SAFETY1 EFFICIENCY SCALE Injuries per 200,000 hours worked 0.50 16% 53 MM TONS 0.40 OF GLOBAL CAPACITY EBITDA MARGIN2 0.30 2018 – 2022 Average 0.20 0.10 16% 96% 330+ 0.00 POLYOLEFIN CASH 2
Slide 8: Introducing Our Long-Term Strategy
INTRODUCING OUR LONG-TERM STRATEGY Impactful three-pronged strategy supported by exceptional cash generation and an investment grade balance sheet Focusing growth on attractive, resilient assets – enabled by industry-leading performance Grow & Acting decisively to shape our portfolio toward busi
Slide 9: How Our Strategy Is Differentiated
HOW OUR STRATEGY IS DIFFERENTIATED Simultaneous, focused and synergetic moves that deliver a more profitable and sustainable growth engine WHAT DIFFERENTIATES OUR STRATEGY? Grow & Upgrade Disciplined Focus the Core Shaping our portfolio to focus on businesses with enduring advantaged positions G
Slide 10: Growing & Upgrading the Core
GROWING & UPGRADING THE CORE Distilling and building on greatest legacy strengths to define our future Core WHAT GOT US HERE WHERE WE ARE GOING Strategic Criteria to Define Core Assets Low-cost operating model Innovation-driven growth 1 Leading market positions Deep technical and through globa
Slide 11: Pursuing Intentional Strategies Tailored to Individual Markets
PURSUING INTENTIONAL STRATEGIES TO BUILD UPON OUR STRENGTHS TAILORED TO INDIVIDUAL MARKETS Matching Core assets with advantaged positions to grow and improve EUROPE NORTH AMERICA Focus on high Leveraging scale demand for and strong low-cost sustainability by positioning for building feedstocks cost-
Slide 12: Technology Leadership Is a Key Enabler for Growth
TECHNOLOGY LEADERSHIP IS A KEY ENABLER FOR GROWTH Differentiated technology solutions support our position as a “partner of choice” PROPERTIES CUSTOMER BENEFITS Leading technology Replacement for fossil- Meet sustainability goals provides meaningful license based feedstocks Sustainable product
Slide 13: Our Industry-Leading Sustainability Ambitions and Actions
OUR INDUSTRY-LEADING SUSTAINABILITY AMBITIONS AND ACTIONS Leading the way to profitably advance and innovate sustainable solutions ENDING PLASTIC WASTE TAKING CLIMATE ACTION SUPPORTING A THRIVING SOCIETY 2 MM+ TONS NET ZERO ZERO of recycled and renewable-based greenhouse gas emissions from incidents
Slide 14: A Differentiated Approach to Establish Leadership in Circular and Renewable Solutions
A DIFFERENTIATED APPROACH TO ESTABLISH LEADERSHIP IN CIRCULAR AND RENEWABLE SOLUTIONS Accelerating circularity to meet the increasing need for sustainable solutions from our customers and society VIEW ON POLYMERS FOCUS ON VALUE CREATION Critical to enable a low-carbon world and Creating complete
Slide 15: Unlocking Value Through Ownership Culture
UNLOCKING VALUE THROUGH OWNERSHIP CULTURE Culture shift has enabled focus on global value enhancement program to deliver untapped value KEY VALUE OPPORTUNITIES SIGNIFICANT VALUE AND GROWTH OPPORTUNITIES AHEAD Manufacturing & Expanding VEP to regions $750 MM Operational Excellence outside U.S. Procur
Slide 16: We Are Already Executing Our Strategy
WE ARE ALREADY EXECUTING OUR STRATEGY Announced Announced organizational Announced additional Signed long-term Sold Australia Signed first two change to create new value U.S. and EU contract with polypropylene U.S. renewable Circular & Low Carbon enhancement renewable Nexus Circular for business ene
Slide 17: Diverse and Highly Experienced Leadership Team Positioned to Win
DIVERSE AND HIGHLY EXPERIENCED LEADERSHIP TEAM POSITIONED TO WIN Recent organizational changes support greater autonomy and efficiency KEY HIGHLIGHTS New leadership roles EVP, Circular & Low Carbon Solutions EVP, People and Culture EVP, Sustainability and Corporate Affairs Peter Vanacker Ken
Slide 18: Primed to Grow and Improve, Guided by Our Focused Strategy
PRIMED TO GROW AND IMPROVE, GUIDED BY OUR FOCUSED STRATEGY Continued delivery of free cash flow and investor returns while growing and upgrading the portfolio 2025 2027 2022 Normalized Normalized EBITDA1 EBITDA1 CREATING A FOCUSED PORTFOLIO POISED TO GENERATE HIGHER RETURNS EBITDA $6.3 B $9 B $10 B
Slide 19: Key Takeaways
KEY TAKEAWAYS 1 2 3 4 Global industry leader Well-positioned to Positioning our portfolio for Strengthening our growing sustainable execute on our new the future through proven ability value at scale across strategy by leveraging technology leadership, to achieve exceptional a more focused portfolio
Slide 20: Unlocking Value Through Culture Transformation
UNLOCKING VALUE Dale Friedrichs THROUGH CULTURE EVP, Operational TRANSFORMATION Excellence & HSE 20
Slide 21: Culture Shift to Unlock Value at Scale
CULTURE SHIFT TO UNLOCK VALUE AT SCALE, NOW AND INTO THE FUTURE VALUE ENHANCEMENT PROGRAM CONTINUOUS PROCESS EMBEDDED IDENTIFIED IN OUR MINDSET Maintaining best-in-class operations while we shift $750 MM corporate focus to value enhancement Igniting new energy within employees to find value enha
Slide 22: Advantaged Position as Industry Leading Operator
ADVANTAGED POSITION AS INDUSTRY LEADING OPERATOR Culture driven by relentless benchmarking and continuous improvement SAFETY LEADERSHIP OPERATIONAL EXCELLENCE Industry-leading Safety Is the Proven Operator in the Industry Cornerstone of Our Operations with High Asset Reliability Injuries per 200,000
Slide 23: Shifting Our Mindset to Capture Value Creating Opportunities
SHIFTING OUR MINDSET TO CAPTURE VALUE CREATING OPPORTUNITIES Focused on unlocking significant incremental EBITDA COST CONTROL VALUE CREATION 2009 - 2022 2022+ Established processes to become the most Evolving our culture to unlock value in cost-effective supplier in our industry alignment with o
Slide 24: Optimizing Our Proven Operating Model
OPTIMIZING OUR PROVEN OPERATING MODEL TO UNLOCK SIGNIFICANT UNTAPPED VALUE Strategy Value Ideation Prioritization Rigorous screening Open-ended idea Define site process to advance generation to identify asset strategy the highest value value opportunities initiatives We were utilizing We’re now We w
Slide 25: Value Enhancement Program Is Advancing the Way We Operate
VALUE ENHANCEMENT PROGRAM IS ADVANCING THE WAY WE OPERATE Identified clear initiatives to deliver on the program’s estimated EBITDA KEY VALUE OPPORTUNITIES Improving asset reliability Manufacturing Implementing high value debottlenecks & Operational Reducing manufacturing variable and fixed co
Slide 26: VEP Case Study | Operational Excellence
VEP CASE STUDY | OPERATIONAL EXCELLENCE Utilizing digital tools to improve workforce efficiency and decrease plant downtime IDENTIFIED OPPORTUNITY SOLUTION RESULTS The global turnaround organization The turnaround organization Project is expected to reduce plant identified an opportunity to improve
Slide 27: VEP Case Study | Operational Excellence
VEP CASE STUDY | OPERATIONAL EXCELLENCE Applying automation to reduce energy intensity and greenhouse gas emissions IDENTIFIED OPPORTUNITY SOLUTION RESULTS Site personnel identified energy Utilize advanced process controls to Project is expected to reduce furnace inefficiency requiring manual automa
Slide 28: VEP Case Study | Manufacturing
VEP CASE STUDY | MANUFACTURING Optimizing existing assets to drive incremental value and lower energy intensity IDENTIFIED OPPORTUNITY SOLUTION RESULTS Technical staff identified opportunity Adding additional feed point flexibility Project is expected to generate 30 KTA to unlock incremental product
Slide 29: Value Enhancement Program Is Enabling Great Returns
VALUE ENHANCEMENT PROGRAM IS ENABLING GREAT RETURNS Embedded the value enhancement program within our culture to continuously identify future initiatives $750 MM JUST GETTING STARTED Recurring Annual EBITDA1 $150 MM by Year End Ignited new energy within our workforce to pursue value Recurring Annu
Slide 30: Key Takeaways
KEY TAKEAWAYS 1 2 3 Proven track record of Shifting mindset and Leverage high- operating safely and culture from performance operating efficiently cost control to model aligned with culture value creation, unlocking transformation to deliver the full potential of our differential value global team 3
Slide 31: Utilizing Technology to Enable Future Growth
Jim Seward UTILIZING TECHNOLOGY TO EVP & Chief ENABLE FUTURE GROWTH Innovation Officer 31
Slide 32: Key Messages
KEY MESSAGES 1 2 3 4 Technology drives Leader in Investments in Partner of choice for both value and growth technology-enabled innovation monetized licensing and JVs, products and through two providing strong processes with a businesses: growth opportunities proven ability to move technology and wit
Slide 33: Technology Business: Process Licensing and Polyolefin Catalyst Sales
TECHNOLOGY BUSINESS CONSISTS OF PROCESS LICENSING AND POLYOLEFIN CATALYST SALES TECHNOLOGY STRATEGY Unique, rapid and low-cost innovation platform $693 MM 2022 SEGMENT REVENUE 6,000+ 80 MM TONS OF LICENSED PE AND PP CAPACITY1 Integrated R&D supporting developments in processes, catalysts and pro
Slide 34: Technology Business: Catalyst Strategy
TECHNOLOGY BUSINESS CONSISTS OF PROCESS LICENSING AND POLYOLEFIN CATALYST SALES CATALYST STRATEGY $693 MM 2022 SEGMENT REVENUE 4 30% Value-based approach with long-term $366 MM SEGMENT CATALYST GROWTH IN OUR CATALYST PRODUCTION customer relationships and leading EBITDA PRODUCTION SITES CAPACITY OV
Slide 35: Proven Track Record of Driving Market Innovation for 70 Years
PROVEN TRACK RECORD OF DRIVING MARKET INNOVATION FOR 70 YEARS Creating proprietary technologies and generating significant returns from our innovations Reaching final Partnered with investment decision Introduced Launched Developed Catalloy SUEZ to create for commercial Hostalen our proprietary proc
Slide 36: Core Businesses Utilize Technology Innovation to Drive Value
CORE BUSINESSES UTILIZE TECHNOLOGY INNOVATION TO DRIVE VALUE Leveraging our innovations to extend advantages across the portfolio Propylene Oxide Catalloy Spherizone PP Hyperzone PE MoReTec Recycling WHAT DOES IT DO? Leading propylene oxide Thermoplastic resins that Multizone reactor technology Prod
Slide 37: PO/TBA: A World-Leading Technology
PO/TBA: A WORLD-LEADING TECHNOLOGY STARTING UP OUR NEW U.S. GULF COAST PO/TBA PLANT STAND-OUT INNOVATION World's largest propylene oxide plant Increased Scale Lowest propylene oxide production cost - Latest process design significantly increases Incorporates the best technologies from our 5
Slide 38: Why Is Advanced Recycling So Important?
WHY IS ADVANCED RECYCLING SO IMPORTANT? Identified Opportunity How MoReTec Works Complementary to mechanical recycling Addresses hard-to-recycle post-consumer 1 Used plastic including multilayer and hybrid materials is processed 2 Reactor is fed with plastic flakes and catalyst mixed plastic was
Slide 39: MoReTec: A Differentiating Technology
MoReTec: A DIFFERENTIATING TECHNOLOGY FUTURE FOCUSED Our focus on circularity, SCALABLE TECHNOLOGY REDUCED CARBON FOOTPRINT carbon footprint reduction, Innovative single-train design enables Innovative process maximizes the plastic higher yields and scalability scale-up for the future recycling
Slide 40: Leveraging Leading Technologies to Be a Partner of Choice
LEVERAGING LEADING TECHNOLOGIES TO BE A PARTNER OF CHOICE A key enabler to driving higher returns UTILIZING PROPRIETARY TECHNOLOGIES CREATING EMERGING TECHNOLOGIES to create partnerships in advantaged regions and reduce our capital intensity to accelerate future opportunities Hyperzone PE Catalloy M
Slide 41: Key Takeaways
KEY TAKEAWAYS 1 2 3 4 Technology drives Leader in Investments in Partner of choice for both value and growth technology-enabled innovation monetized licensing and JVs, products and through two providing strong processes with a businesses: growth opportunities proven ability to move technology and wi
Slide 42: Leadership in Sustainability: Fundamental and Creating Value
LEADERSHIP IN Tracey SUSTAINABILITY: Campbell FUNDAMENTAL AND EVP, Sustainability and Corporate Affairs CREATING VALUE 42
Slide 43: Establishing Ourselves as an ESG Leader in Our Industry
ESTABLISHING OURSELVES AS AN ESG LEADER IN OUR INDUSTRY Sustainability and safety performance is embedded in our strategy and incentive programs Ending Pioneering and scaling production of recycled and renewable-based polymers Plastic Catalyzing venture co-investors to invest in plastic waste re
Slide 44: Our Actions Are Aligned with Brand Owner Commitments
OUR ACTIONS ARE ALIGNED WITH BRAND OWNER COMMITMENTS Our largest customers need reliable partners to deliver their sustainability requirements COMMITMENT TO A CIRCULAR ECONOMY1 SCOPE 3 EMISSION REDUCTION TARGETS2 “ more than 1,000 businesses, governments, and other organizations have united behind a
Slide 45: We Are a Leader Among Our Peers
WE ARE A LEADER AMONG OUR PEERS Preparing to capture early-mover advantages as demand for low carbon footprint materials outpaces supply PEERS2 Emission Reduction Aspirations by 20501 by Major Petrochemical 1 2 3 4 5 6 7 8 Producers Scope 1 & 2 42% >40% 15% 50% 33% 15% 20-30% 20% 35% Reductions by 2
Slide 46: Our Actions Create Value
OUR ACTIONS CREATE VALUE Sustainability efforts undergo the same returns scrutiny as any other business initiative and will create value FOR CUSTOMERS FOR OPERATIONS FOR TALENT FOR INVESTORS Innovating at scale Reducing cost through Increased sense of Profitable growth improved energy purpos
Slide 47: It Takes a Diverse and Inspired Workforce to Drive Innovation
IT TAKES A DIVERSE AND INSPIRED WORKFORCE TO DRIVE INNOVATION We are investing in the people creating the future of LyondellBasell ENGAGE Through COVID we sustained strong employee engagement levels, with 83% of employees responding favorably and above norms for our sector Safety incident metric
Slide 48: Our Bold Actions Are Delivering Results and Gaining Recognition
OUR BOLD ACTIONS ARE DELIVERING RESULTS AND GAINING RECOGNITION Strong governance and social scores bolstered by improving sustainability ratings Ecovadis Sustainability MSCI ESG A Rating Gold Rating LyondellBasell's "B" rating from Consistently delivering top CDP Climate does not account for perfor
Slide 49: Key Takeaways
KEY TAKEAWAYS 1 2 3 4 Sustainability is Our actions are We are establishing Our bold actions are foundational to how creating value and ourselves to become an gaining increased we operate and grow aligned with ESG leader in our recognition by increasing demand for industry and capture industry-leadi
Slide 50: Upgrading the Core and Enabling Circular & Low Carbon Solutions
UPGRADING THE CORE AND Ken Lane ENABLING CIRCULAR & LOW EVP, Olefins & CARBON SOLUTIONS Polyolefins 50
Slide 51: Olefins and Polyolefins Snapshot
OLEFINS AND POLYOLEFINS SNAPSHOT Diversified portfolio and global scale driving resilient results COMPETITIVE ADVANTAGES O&P AMERICAS O&P EAI O&P AMERICAS O&P EAI 33 11K Integrated assets $14.5 B $13.5 B $2.9 B $0.2 B MANUFACTURING EMPLOYEES Feedstock flexibility FACILITIES3 2022 2022 REVENUE1 2
Slide 52: Olefins and Polyolefins Is Core to LyondellBasell
OLEFINS AND POLYOLEFINS IS CORE TO LYONDELLBASELL Leveraging our integrated assets to optimize and drive value NORTH AMERICA EUROPE Cracker Flexibility Integrated PE Margin1 Cracker Flexibility Integrated PE Margin1 LYB exceeds industry by 10% LYB exceeds industry by 20% Ethane Naphtha LPG LPG Liqui
Slide 53: Technology Leadership Creates Attractive JV Growth Opportunities
TECHNOLOGY LEADERSHIP CREATES ATTRACTIVE JV GROWTH OPPORTUNITIES AS A “PARTNER OF CHOICE” Leverage joint ventures as part of our unique, proven innovation growth model SHARE OF OUR GLOBAL CAPACITY SERVED BY JVs COMPETITIVE STRENGTHS ENABLING HIGHER RETURNS 1 Leading Technologies Leverage leading,
Slide 54: Industry Leading Breadth of Polyolefin Products
INDUSTRY LEADING BREADTH OF POLYOLEFIN PRODUCTS Well-positioned across value chains Leading market position geared toward durable products Opportunity to create cost-advantaged circular products HIGH-DENSITY LOW-DENSITY LINEAR LOW-DENSITY CATALLOY POLYPROPYLENE POLYETHYLENE POLYETHYLENE POLYETHYLENE
Slide 55: Key Macro Trends Driving Polyolefin Demand
KEY MACRO TRENDS DRIVING POLYOLEFIN DEMAND Historically consistent demand growth Market Trends1 Indexed to 1992 INCREASING GLOBAL DEMAND2 800 Million Global population growth by 2030 1992 1997 2002 2007 2012 2017 2022 Global PE Demand U.S. Vehicle Assemblies U.S. GDP (Real) U.S. Housing Starts U.S.
Slide 56: Grow & Upgrade the Core: Olefins and Polyolefins
GROW & UPGRADE THE CORE: OLEFINS AND POLYOLEFINS CORE CRITERIA HOW THIS APPLIES TO O&P 1 Leading market positions 2 Growing end markets 3 Attractive returns above our cost of capital Evaluating Enabling Upgrading and optimizing circular and our Core and 4 Access to advantaged feedstocks global asset
Slide 57: Our Approach to Growing O&P Through M&A and JVs
OUR APPROACH TO GROWING O&P THROUGH M&A AND JVs Focusing on strategic fit with a value mindset to maximize returns OPERATIONAL ADVANTAGED ACCESS TO GROWTH ENABLING EXCELLENCE FEEDSTOCKS MARKETS SUSTAINABILITY Integrated, world-scale Middle East JVs leveraging Asia JVs providing access Upstream colla
Slide 58: Enabling a Sustainable Future
ENABLING A SUSTAINABLE FUTURE UTILIZING EXISTING O&P FOOTPRINT to produce circular and renewable products EMPOWERING GROWTH OF CIRCULAR & LOW CARBON SOLUTIONS BUSINESS UNIT Cologne, Germany Hub Capability to process up to 2 MM tons per year Providing access to markets to build of renewable or pl
Slide 59: Driving Customer and Commercial Excellence
DRIVING CUSTOMER AND COMMERCIAL EXCELLENCE (CCE) TO CREATE ADDITIONAL VALUE A 3-year transformation journey to increase EBITDA margins Penetrate High Growth Markets Partner of Choice for Leading Customers Leverage our best-in-class product Enhance Systems, Tools portfolio to further penetrate Shift
Slide 60: 2027 Growth Targets
2027 GROWTH TARGETS Grow & $1,250 MM (USD, millions) Upgrade the Core O&P EAI Improve reliability and grow volume from O&P Americas our existing O&P assets through our value $250 $7,050 $550 enhancement program (VEP) $1,250 Strategic growth in O&P Americas and O&P EAI JVs Reviewing business po
Slide 61: Key Takeaways
KEY TAKEAWAYS 1 2 3 4 LEADING GROW & UPGRADE ENABLING STEPPING UP POSITIONS THE CORE SUSTAINABILITY PERFORMANCE & CULTURE Portfolio of diverse Utilizing industry-leading Grow our Circular & Low Expand margins through products and assets technologies to strengthen Carbon Solutions business strong cus
Slide 62: Establishing Leadership in Circular & Low Carbon Solutions
ESTABLISHING LEADERSHIP Yvonne van der Laan IN CIRCULAR & LOW EVP, Circular & CARBON SOLUTIONS Low Carbon Solutions 62
Slide 63: Society, Consumers and Regulations Are Driving Brand Owner Commitments
SOCIETY, CONSUMERS AND REGULATIONS ARE DRIVING BRAND OWNER COMMITMENTS FOR CIRCULAR AND LOW CARBON SOLUTIONS Changing global landscape is driving demand for recycled content and reductions in GHG emissions CHANGING GLOBAL LANDSCAPE BRAND OWNER COMMITMENTS1 Top 10 Global Brand Owner Recycled Content
Slide 64: Demand for Recycled Content Expected to Outpace Supply by 50%
DEMAND FOR RECYCLED CONTENT EXPECTED TO OUTPACE SUPPLY BY 50% Our target of 2 MM+ tons per year of recycled and renewable polymers by 2030 would establish our market leadership in North America and Europe MARKET ASSESSMENT UPSTREAM INFRASTRUCTURE GAP IS CREATING A More than 50% of total demand gro
Slide 65: Comprehensive Strategy Primed for Long-Term Profitable Growth
COMPREHENSIVE STRATEGY PRIMED FOR LONG-TERM PROFITABLE GROWTH Expect to capture at least $1 B in incremental EBITDA1 by 2030 OUR UNIQUE SUCCESS FACTORS 1 Access to large customers GROWTH TARGETS $25 B+ (USD, billions) O&P EAI and brand owners Total addressable market2,3 2 Ability to leverage existin
Slide 66: Today's Circularity Value Chain
TODAY’S CIRCULARITY VALUE CHAIN Lacking the infrastructure required to efficiently gather and supply waste feedstock Waste to Energy Landfill KEY SUPPLY DYNAMICS CIRCULAR PLASTICS VALUE CHAIN Plastic waste is localized and extremely fragmented Underdeveloped sorting technologies in highly popula
Slide 67: Optimizing the Value Chain for Circularity with Integrated Hubs
LYONDELLBASELL IS OPTIMIZING THE VALUE CHAIN FOR CIRCULARITY BY BUILDING INTEGRATED HUBS AND LEVERAGING EXISTING CAPABILITIES Building scale, reducing cost and capturing value from waste to final product LYONDELLBASELL INTEGRATED ‘HUB’ IN COLOGNE QCP JV processing 55 KTA, APK technology 8 KTA Source
Slide 68: Uniquely Positioned to Create Value in Circular and Low Carbon Solutions
WE ARE UNIQUELY POSITIONED TO CREATE VALUE IN CIRCULAR AND LOW CARBON SOLUTIONS Most attractive partner for both feedstock owners and brand owners PEERS1 Attributes to compete in circular and low carbon solutions market 1 2 3 4 5 PE / PP product offering Integrated footprint in U.S. and EU Mechanica
Slide 69: Addressing Growing Brand Owner Demand with Circulen Portfolio
ADDRESSING GROWING BRAND OWNER DEMAND WITH OUR CIRCULEN PORTFOLIO Full-suite of solutions for our customers’ sustainability needs Products made from Products made from Products made mechanical recycling advanced recycling from renewable processes, including processes, including bio-based feedstocks
Slide 70: Key Takeaways
KEY TAKEAWAYS 1 2 3 4 Growing and Clear path to value We are well- Our Circular & Low sustained demand for creation in circular and positioned to lead in Carbon Solutions recycled and low carbon solutions this market at scale business is expected renewable polymers with our integrated to capture $1
Slide 71: Transforming APS to Drive Growth
Torkel Rhenman TRANSFORMING APS EVP, Advanced TO DRIVE GROWTH Polymer Solutions 71
Slide 72: Advanced Polymer Solutions Today
ADVANCED POLYMER SOLUTIONS TODAY1 Significant value creation opportunity to be realized from APS transformation INTEGRATION ACCOMPLISHMENTS $4.2 B 16,000+ $115 MM 97,000+ 5,000+ Expansive global compounding footprint with REVENUE CUSTOMERS EBITDA FORMULATIONS EMPLOYEES regional expertise and knowl
Slide 73: Solutions Offering Is Deeply Integrated in Everyday Life
SOLUTIONS OFFERING IS DEEPLY INTEGRATED IN EVERYDAY LIFE Delivering innovative products over a wide array of complex and customizable solutions Thermoplastic resins using base polyolefins, fillers, Polypropylene Compounds reinforcements, pigments and additives 2022 APS Sales Volumes Specialized high
Slide 74: 2027 Growth Targets
2027 GROWTH TARGETS Transforming APS to unlock significant value (USD, millions) APS GROWTH FUNDAMENTALS3 Restore Base $120 MM Customer focus Organizational restructure Integrated business planning Market Recovery $115 MM Automotive Labor Raw materials Focused Growth $150 MM 2022 Restore
Slide 75: Restoring and Enhancing Core APS Business
RESTORING AND ENHANCING CORE APS BUSINESS Transformation activities underway and delivering in 2023 APS TRANSFORMATION Customer Focus Restoring service levels Adding resources for customer engagement EXPECTED OUTCOMES Pivot from integration to growth and innovation Integrated Business Planning
Slide 76: Shifting Focus to Growth
SHIFTING FOCUS TO GROWTH Acceleration through innovation, technology and macro trends APS TRANSFORMATION Investing in Resources Innovation platforms and people MACRO TRENDS Leverage Knowledge Vast compounding formulation library Deep industry knowledge Circularity APS Technology and AI Trans
Slide 77: Accelerating Growth Through Circularity
ACCELERATING GROWTH THROUGH CIRCULARITY APS is uniquely positioned to leverage macro trends in circularity Automobile OEM CIRCULARITY Post Consumer Plastic Parts New Finished Majority of customers and brand owners making Plastic Parts recycling target commitments Closing the Mandates emerging dr
Slide 78: Providing Solutions for Mobility and Modern Living
PROVIDING SOLUTIONS FOR MOBILITY AND MODERN LIVING Growth in global population and a rising middle class accelerating trends, increasing demand for our innovative materials MOBILITY MODERN LIVING2 Global focus on lightweighting vehicles Consistently growing need for products within Rising need
Slide 79: Industry Leading Breadth of Compound Products and Engineered Plastics Solutions
INDUSTRY LEADING BREADTH OF COMPOUND PRODUCTS AND ENGINEERED PLASTICS SOLUTIONS We are a leading solutions provider well-positioned to drive significant growth ENABLING ADVANCED APPLICATIONS AND END USES COMPETITIVE ADVANTAGES Backward Industry-leading Integration Global Scale in Circularity
Slide 80: Transforming APS
TRANSFORMING APS Unlocking the ability to deliver its full potential of $500 MM in EBITDA by 2027 BUILDING A HIGH-PERFORMING BUSINESS TRANSFORMATION KEY TAKEAWAYS Previous Business Model New Business Model Improved customer service and Focus on Costs & Integration 1 optimization of strategic busines
Slide 81: Driving the Next Phase of Growth in Intermediates & Derivatives
DRIVING THE NEXT PHASE Kim Foley OF GROWTH IN INTERMEDIATES EVP, Intermediates & & DERIVATIVES Derivatives and Refining 81
Slide 82: Intermediates & Derivatives Snapshot
INTERMEDIATES & DERIVATIVES SNAPSHOT Stable cash generation with transformational growth starting in 2023 from COMPETITIVE ADVANTAGES world’s largest propylene oxide plant CONTINUOUS INNOVATION $13 B $1.9 B 2,100 #1 Innovating to extend the advantage IN LOW-COST REVENUE EBITDA EMPLOYEES PROPYLENE
Slide 83: What Is Intermediates & Derivatives?
KEY MACRO TRENDS WHAT IS INTERMEDIATES & DERIVATIVES? Urbanization Energy Clean Air Provides critical link from olefins to polymers and other diverse applications Efficiency BUILDING END BLOCKS INTERMEDIATES PRODUCTS CHARACTERISTICS Global merchant seller of intermediate chemicals Provides vital
Slide 84: Diverse Product Portfolio Delivers Resilient Performance
DIVERSE PRODUCT PORTFOLIO DELIVERS RESILIENT PERFORMANCE Serving our customers across a wide variety of attractive markets COST-ADVANTAGED CORE GROWTH DRIVER CO-PRODUCTS OPTIMIZED FOR CASH GENERATION Propylene Oxide Oxyfuels & Intermediate Chemicals & Derivatives (PO&D) Related Products (including s
Slide 85: Propylene Oxide Is a Core Business
PROPYLENE OXIDE IS A CORE BUSINESS Advantaged technologies and feedstocks with operational and commercial excellence providing platform for growth PO COST CURVE1 STRATEGIC ADVANTAGES Cost of PO Production Leading Technology Our assets are 1st or 2nd quartile with lowest cost PO technologies Lyondell
Slide 86: Leveraging Leading Technology to Grow and Upgrade the Core
LEVERAGING LEADING TECHNOLOGY TO GROW AND UPGRADE THE CORE We are growing our global PO capacity by ~50% in 2022-2023 with our new PO/TBA plant and China JV GROW & UPGRADE THE CORE STEP UP PERFORMANCE & CULTURE Starting up our new PO/TBA capacity Acetyls reliability improvements and High return,
Slide 87: Optimizing Our Portfolio to Drive Value
OPTIMIZING OUR PORTFOLIO TO DRIVE VALUE Exploring strategic alternatives for ethylene oxide & derivatives (EO&D) ~$85 MM EO&D EBITDA ~1% of LyondellBasell EBITDA1 Attractive assets, but not a business where LyondellBasell seeks a leading position Consistent cash generating assets Global product
Slide 88: Enabling a Sustainable Future
ENABLING A SUSTAINABLE FUTURE Active programs in place to advance sustainability and meet customer needs Providing value to our customers by executing and delivering: Customer EXAMPLES AND TARGETS Low carbon GHG emissions Life cycle Site ISCC+ sustainability solutions reduction analysis certificatio
Slide 89: 2027 Growth Targets
2027 GROWTH TARGETS I&D poised to deliver ~40% EBITDA growth1 over the next five years (USD, millions) I&D GROWTH FUNDAMENTALS Grow & $500 MM Upgrade the Core Growing and upgrading the core PO/TBA with transformational PO/TBA capacity, value enhancement program (including debottlenecks and improve
Slide 90: Key Takeaways
KEY TAKEAWAYS 1 2 3 4 Propylene oxide is Core Market leader with the Serve diverse global Aim to deliver a to our strategy with lowest cost end markets that 40% increase in healthy market growth technologies, global provide stable cash EBITDA1 by 2027 rates above GDP feedstock advantages generation
Slide 91: Disciplined Financial Management Enabling Value Creation
DISCIPLINED FINANCIAL Michael McMurray MANAGEMENT ENABLING Chief Financial VALUE CREATION Officer 91
Slide 92: Historical Financial Performance
HISTORICAL FINANCIAL PERFORMANCE Resilient portfolio with significant cash generation and efficient conversion EBITDA ex. identified items1 USD, billions $10 8 $5.5 B Cash from 6 operating activities 2013–2022 average 4 2 ~80% Cash conversion3 -2 2013–2022 average 2013 2014 2015 2016 2017 2018 2019
Slide 93: Strong Investment Grade Balance Sheet
STRONG INVESTMENT GRADE BALANCE SHEET Disciplined financial management supporting our capital allocation priorities $6.0 B LIQUIDITY 2022 Diversified Chemicals3 Specialty Chemicals3 Commodity Chemicals3 $4.2 B 2.5x FREE CASH FLOW1 2.0x 1.5x 2022 Leverage 1.4x (Net Debt to $9.2 B EBITDA)2 NET DEBT 20
Slide 94: Extending Our Track Record of Returning Capital
EXTENDING OUR TRACK RECORD OF RETURNING CAPITAL Substantial capital returns for shareholders expected to continue RETURNED $44 B TO SHAREHOLDERS in Dividends and Share Repurchases Since 2011 $7.2 $6.1 $5.2 $4.3 $3.4 $3.7 $2.9 $3.1 $2.4 $2.3 $1.9 $1.4 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Slide 95: Disciplined Capital Allocation Framework
DISCIPLINED CAPITAL ALLOCATION FRAMEWORK Targeting payout of approximately 70% of future free cash flow1 to shareholders CAPITAL ALLOCATION PROFILE PRIORITIES (2018-2022) 1 Sustaining CAPEX Deleveraging2 11% 2 Progressive dividend Capital Expenditures 31% 3 Organic growth Share Repurchases 19% $34.5
Slide 96: New Strategy Driving Focus, Differential Growth and Value Creation
NEW STRATEGY DRIVING FOCUS, DIFFERENTIAL GROWTH AND VALUE CREATION Positioning LyondellBasell to deliver sustainable and profitable long-term growth Grow & Upgrade Shaping our portfolio to leverage strengths, support $1.8 B growth, increase resiliency and drive higher returns Incremental the Core No
Slide 97: Growing and Upgrading the Core
GROWING AND UPGRADING THE CORE Distilling and building on greatest legacy strengths to define our future Core EXAMPLES Strategic Criteria to Define Core Assets 1 Leading market positions Louisiana Integrated Polyethylene JV Growing end markets New PO/TBA capacity 2 New plastic waste sorting an
Slide 98: Our Approach to Growth Through M&A and JVs
OUR APPROACH TO GROWTH THROUGH M&A AND JVs Sharpening our focus to extend our advantages with growth AREAS OF FOCUS LEVERAGING OUR STRENGTHS Growing and upgrading the Core Global network and capabilities Operational and commercial excellence Growth platform for Circular & Low Resilient portfol
Slide 99: Long-Term Financial Goals
LONG-TERM FINANCIAL GOALS Positioned to grow and improve, guided by our focused strategy 2025 2027 2022 Normalized Normalized EBITDA1 EBITDA1 CREATING A FOCUSED PORTFOLIO POISED TO GENERATE HIGHER RETURNS EBITDA $6.3 B $9 B $10 B Build on enduring competitive advantages Focus on areas where we h
Slide 100: Financial Principles
FINANCIAL PRINCIPLES Policies, targets and assumptions underpinning our new strategy BUILD A PROFITABLE GROW & UPGRADE STEP UP PERFORMANCE & CIRCULAR & LOW CARBON THE CORE CULTURE SOLUTIONS BUSINESS Expect annual investments in capital expenditures to average $2 B from 2023-2025 and remain within hi
Slide 101: 2027 Growth Targets
2027 GROWTH TARGETS CASH FROM OPERATING ACTIVITIES3 (USD, billions) (USD, billions) ~30% $8 $6 2022 2027 2027E 2022 Portfolio 2025 2027 EBITDA Normalizations1 Normalized Normalized EBITDA2 EBITDA2 DILUTED EPS4 ~95% $23 $22.77 Grow & Upgrade the Core PO/TBA, VEP volume growth, profit generating CAPEX
Slide 102: Key Takeaways
KEY TAKEAWAYS 1 2 3 4 Confident in our Resilient cash Disciplined financial Unlocking significant strategy and its ability generation and principles and capital opportunities across to drive focus, investment grade allocation priorities the portfolio by differential growth and balance sheet drive gr
Slide 103: Concluding Remarks
Peter Vanacker CONCLUDING Chief Executive REMARKS Officer 103
Slide 104: Our Strategy – Differentiated, Impactful and Achievable
OUR STRATEGY – DIFFERENTIATED, IMPACTFUL AND ACHIEVABLE Simultaneous, focused and synergetic moves that deliver a more profitable and sustainable growth engine NORMALIZED DIFFERENTIATORS EBITDA BENEFIT Grow & Focused on businesses with enduring advantaged positions Upgrade Disciplined capital al
Slide 105: Appendix
APPENDIX lyondellbasell
Slide 106: Glossary of Terms
GLOSSARY OF TERMS Circular & Low Carbon Solutions Growth and Emission Reduction Savings includes circular and low carbon solutions growth and energy cost savings associated with greenhouse gas (GHG) emission reduction projects. Grow & Upgrade the Core includes PO/TBA, value enhancement program (VEP)
Slide 107: 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. We report our financial results in accordance with U.S. generally accepted accounting principles (“
Slide 108: Information Related to Financial Measures (Continued)
INFORMATION RELATED TO FINANCIAL MEASURES (CONTINUED) Net debt – total debt less cash and cash equivalents, restricted cash and short-term investments. This measure is commonly used by investors to evaluate liquidity. Net debt to EBIDA excluding LCM and impairment – net debt divided by EBITDA exclud
Slide 109: Reconciliation of Net Income to EBITDA Including and Excluding Identified Items
Reconciliation of Net Income to EBITDA Including and Excluding Identified Items Year Ended Decem ber 31, Millions of dollars 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Net income $ 3,853 $ 4,168 $ 4,474 $ 3,837 $ 4,877 $ 4,690 $ 3,397 $ 1,427 $ 5,617 $ 3,889 Loss from discontinued operations,
Slide 110: Reconciliation of Net Income to Net Income Excluding Identified Items
Reconciliation of Net Income to Net Income Excluding Identified Items Year Ended Decem ber 31, Millions of dollars 2022 Net income $ 3,889 add: Identified items Impairments, after-tax (a) 69 Refinery exit costs, after-tax (b) 144 Net income excluding identified items $ 4,102 (a) The year ended Decem
Slide 111: Reconciliation of EBITDA to EBITDA Excluding Identified Items by Segment
Reconciliation of EBITDA to EBITDA Excluding Identified Items by Segment (unaudited) Year Ended Decem ber 31, Millions of dollars 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 EBITDA: Olefins & Polyolefins - Americas $ 3,573 $ 3,911 $ 3,661 $ 2,875 $ 2,981 $ 2,851 $ 2,380 $ 1,852 $ 5,370 $ 2,865
Slide 112: Components of Cash and Liquid Investments and Total Liquidity
Components of Cash and Liquid Investments and Total Liquidity Decem ber 31, Millions of dollars 2022 Cash and cash equivalents and restricted cash $ 2,156 Short-term investments — Cash and liquid investments 2,156 Availability under Senior Revolving Credit Facility 3,050 Availability under U.S. Rece
Slide 113: Reconciliation of Net Cash Provided by Operating Activities to EBITDA
Reconciliation of Net Cash Provided by Operating Activities to EBITDA Including and Excluding LCM and Impairment Year Ended Decem ber 31, Millions of dollars 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Net cash provided by operating activities $ 4,835 $ 6,048 $ 5,842 $ 5,606 $ 5,206 $ 5,471 $
Slide 114: Calculation of Cash Conversion
Calculation of Cash Conversion Year Ended December 31, Millions of dollars 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Average Net cash provided by operating activities $ 4,835 $ 6,048 $ 5,842 $ 5,606 $ 5,206 $ 5,471 $ 4,961 $ 3,404 $ 7,695 $ 6,119 $ 5,519 Divided by: EBITDA excluding LCM and
Slide 115: Return on Invested Capital
Return on Invested Capital Year Ended Decem ber 31, Millions of Dollars 2021 2022 Net income $ 3,889 Loss from discontinued operations, net of tax 5 Income from continuing operations 3,894 Add: Interest expense, net 258 Tax effect (52) Interest expense, net, after tax 206 Special items effecting com
Slide 116: Calculation of Dividends and Share Repurchases
Calculation of Dividends and Share Repurchases Year Ended Decem ber 31, Millions of dollars 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Cum ulative Repurchases of Company ordinary shares $ - $ - $ 1,949 $ 5,788 $ 4,656 $ 2,938 $ 866 $ 1,854 $ 3,752 $ 4 $ 463 $ 420 $ 22,690 Dividends
Slide 117: Calculation of EBITDA Margin
Calculation of EBITDA Margin Year Ended December 31, Millions of dollars 2018 2019 2020 2021 2022 Average (a) EBITDA excluding identified items $ 6,867 $ 5,725 $ 3,883 $ 9,313 $ 6,527 $ 6,463 Divided by: Sale and other operating revenues $ 39,004 $ 34,727 $ 27,753 $ 46,173 $ 50,451 $ 39,622 EBITDA M
LyondellBasell Industries — Investor Day (March 2023) on 6ix