Westlake Corporation · NYSE:WLK
Westlake — Westlake Chemical — Q4 2020 Earnings Presentation
22 slides from Westlake's earnings presentation, 2021
Slide 1: Westlake Chemical Corporation Fourth Quarter 2020
Westlake Chemical Corporation Fourth Quarter 2020
Slide 2: A Leading Integrated Materials Company
Westlake Chemical Corporation A Leading Integrated Materials Company (2020) Net Sales $7,504 Million EBITDA (1,2) $1,246 Million Net Income (3) $330 Million Our mission is to create long term value with a risk adjusted return approach. Vinyls (2020) Our Mission: Strategic Action Update: • Profitable
Slide 3: Commitment to Social Responsibility and Advancing Sustainability
Commitment to Social Responsibility and Advancing Sustainability Westlake’s commitment to social responsibility and advancing sustainability is formed by the company’s longstanding core values: ▪ Health, Safety & Environmental - The vigilant stewardship of the environment and sustainability are of u
Slide 4: Westlake Makes Essential Products To Protect and Enhance Our Daily Lives
Westlake Makes Essential Products To Protect and Enhance Our Daily Lives Westlake’s products support over Westlake’s products are used for many half of the 17 Sustainable essential goods that are particularly Development Goals adopted by important in today’s environment: the United Nations: Chlor Al
Slide 5: Westlake, A Global Diversified Product Mix
Westlake, A Global Diversified Product Mix A Global Leading Producer: Chlor Alkali PVC Low Density Polyethylene 2nd largest Chlor Alkali 2nd largest producer of • Largest specialty autoclave producer in the world, PVC in the world leveraging LDPE producer globally. capitalizes on globally the high l
Slide 6: Strategic Growth Diversifies Product Lines and Further Strengthens Integration Advantage
Strategic Growth Diversifies Product Lines and Further Strengthens Integration Advantage • Additional ownership in JV cracker Calvert City Ethylene Expansion • Acquired NAKAN & DaVinci European PVC Capacity (MM lbs.) Olefins Vinyls • Acquired Axiall Expansion • Petro 1 Ethylene Expansion 45,000 Comp
Slide 7: Globally Advantaged Cost Position With A Very High Degree of Product Integration
Globally Advantaged Cost Position With A Very High Degree of Product Integration Westlake Chemical has a long-term strategic cost advantage: • North America has a long-term cost advantaged position through abundant supply of Ethane from shale, electricity from natural gas and ample salt compared to
Slide 8: Low Cost Producer of PVC Combined with High Integration Captures Margin
Low Cost Producer of PVC Combined with High Integration Captures Margin Chlor-Alkali Overview of the Vinyls Chain Chlorinated Majority of Margin Captured in Caustic Products Soda Chlor-Alkali and Ethylene. Ethylene Vinyl PVC Chlorine Polyvinyl Dichloride Chloride (Vinyls Chloride Average Vinyls Indu
Slide 9: Global Chlorovinyls Leader with Enhanced Scale
Global Chlorovinyls Leader with Enhanced Scale World PVC Demand 5,000 Westlake is the second largest 4,000 producer of PVC in the World. 2021 Global 3,000 kMT PVC 2,000 capacity (KMT) 1,000 0 Shin-Etsu Westlake Formosa INEOS Xinjiang Zhongtai World Caustic Soda Demand 6,000 Westlake is the second la
Slide 10: Westlake is the Global Leader in Specialty PVC
Westlake is the Global Leader in Specialty PVC Westlake / Vinnolit is a leading producer of specialty PVC 600 2021 Specialty PVC global capacity: ~4,200 KMT 500 400 Capacity (kmt) 300 200 100 0 Orbia Westlake Inovyn Formosa Shenyang Anhui Xinjiang Kaneka Kem One Hanwha (Mexico, (Germany) (EU) (Taiwa
Slide 11: Fundamentals in Chlor Alkali Constructive
Fundamentals in Chlor Alkali Constructive Significant under investment positions the industry to benefit as demand grows Forecast Over/ Under Investment in World Caustic Capacity Capacity Compared to Relative Change in 5% World GDP 3% 1% -1% -3% -5% 2014 2003 2004 2005 2006 2007 2008 2009 2010 2011
Slide 12: Growing Global PVC Demand Supports North American Exports
Growing Global PVC Demand Supports North American Exports 60,000 60% (as % of Total North America Production) Global PVC Demand 50,000 50% North American PVC Exports North America PVC Exports (thousand Metric Tons) Global PVC Demand 40,000 40% 30,000 30% 20,000 20% 10,000 10% - 0% 2003 2004 2005 200
Slide 13: Advantaged Polyethylene Product Mix
Advantaged Polyethylene Product Mix 2021 Global Industry Demand LDPE is More Profitable than LLDPE and HDPE (% share) Average Margin Advantage of LDPE vs. Other PE Grades 9 LDPE ¢ /lb 8.0 ¢ 7.8 ¢ 22% 7.3 ¢ HDPE 45% 5.9 ¢ 6 LDPE vs. LLDPE LDPE vs. LLDPE LLDPE LDPE vs. HDPE LDPE vs. HDPE 33% 3 2021 To
Slide 14: Westlake's Unique LDPE Focus
Advantaged Product Mix Westlake’s Unique LDPE Focus LDPE Capacity as a Percentage of Total Company PE Capacity The Specialty Advantage Westlake Westlake 2021 80% 20% Westlake has a LyondellBasell significantly North America 2021 40% 60% higher percentage of LDPE product World 2021 33% 67% mix than i
Slide 15: Global Polyethylene Capacity Additions are Focused on LLDPE and HDPE, not on LDPE
Global Polyethylene Capacity Additions are Focused on LLDPE and HDPE, not on LDPE World Polyethylene Capacity Growth by Product 10.00% 8.00% 6.00% 4.00% Change in Capacity 2.00% 0.00% -2.00% -4.00% -6.00% -8.00% 2012-2017 2018 2019 2020 2021 2022 2023 2024 2025 average LDPE LLDPE HDPE 1x GDP Forecas
Slide 16: Financially Disciplined
Financially Disciplined • A leading materials company founded and operated on value creation. • A global, diversified products producer fueled by long-term low cost feedstock. • High level of product integration drives higher operating rates with higher margin specialty production in Polyethylene an
Slide 17: Higher Cycle Average Margins Focus on "Bottom Line"
Higher Cycle Average Margins Focus on “Bottom Line” 2011 – 2020 20% 15% 10% 5% 0% Return on Assets Return on Capital Employed EBITDA Margin Westlake Peer Average* Source: Bloomberg *Peer averages as of latest available data includes: EMN, HUN, OLN, LYB, DOW Higher margins and returns attributable to
Slide 18: Conservative Financial Profile
Conservative Financial Profile 100% Retired Retired Gross Debt to Capitalization Ratio Reduced $254MM of 80% debt by $1.2B of debt debt $500MM+ 60% 40% 20% 0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: Bloomberg Westlake: Westlake Peer Average Range of Peer Average Peer group includes
Slide 19: Strategic Investment Drives EBITDA Growth
Strategic Investment Drives EBITDA Growth Vinyls Olefins Westlake Chemical continues its proven record of strategically deploying capital to fund future bottom line growth Future EBITDA Added Ethylene Capacity Added Ethylene Capacity Proven Added Ethylene Capacity Adding PVC Capacity Results Acquire
Slide 20: Reconciliation of Westlake EBITDA to Net Income and to Cash Flow from Operating Activities
Reconciliation of Westlake EBITDA to Net Income and to Cash Flow from Operating Activities (in $ millions) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Adjusted EBITDA $ 512 $ 584 $ 780 $ 1,118 $ 1,330 $ 1,244 $ 1,015 $ 1,841 $ 2,101 $ 1,407 $ 1,246 Debt Retirement Cost - - (7) - - - - - -
Slide 21: Safe Harbor Language
Safe Harbor Language This presentation contains certain forward-looking statements including statements regarding managing working capital, lowering operating costs and reducing capital expenditures and the timing of the Petro 2 turnaround. Actual results may differ materially depending on factors s
Slide 22: Westlake Chemical
W Westlake Chemical