Indorama Ventures Public Co. Ltd. · SET:IVL
Indorama Ventures Public — Q1 2011 Earnings Presentation
37 slides from Indorama Ventures Public's earnings presentation, May 18, 2011
Slide 1: Indorama Ventures – 'In a league of its own'
Home Home Beverages Apparel Care Textiles Food Pharma Medical Geotextile Analyst Presentation at the SET Opportunity Day Indorama Ventures – ‘In a league of its own’ May 18, 2011
Slide 2: Disclaimer
Disclaimer This presentation contains “forward-looking statements”, which are based on current expectations and projections about future events, and include all statements other than statements of historical facts, including, without limitation, any statements preceded by, followed by or that includ
Slide 3: Agenda
Agenda Company Overview Key Highlights Industry Outlook Financial Performance Outlook 3
Slide 4: Indorama Ventures Overview
Indorama Ventures Overview Global polyester chain company − Commited capacity of 6.7 million tons − Objective to grow to 10.0 million tons by 2014 Focused portfolio of industry leading businesses − Globally #1 PET producer − Covering entire spectrum of the fiber industry from commodity to high val
Slide 5: Focused portfolio of industry leading businesses
Focused portfolio of industry leading businesses Competitiveness across the portfolio Revenue: $3,643 MM, EBITDA: $557 MM, ROCE: 19% PET Fibers PTA Business Segment • Revenue: $2,262 MM • Revenue: $512 MM • Revenue: $869 MM(1) Key Figures • EBITDA: $303 MM • EBITDA: $104 MM • EBITDA: $150 MM (1) (LT
Slide 6: Lean organization, operating globally
Lean organization, operating globally Tax efficient & Profit center based concept Canopus International Ltd. PET operating subsidiary Mauritius 99.99% PTA operating subsidiary Polyester Fibers and Yarns Indorama Resources Ltd. operating subsidiary Thailand 63.69% Holding subsidiary 2.70% Wool operat
Slide 7: Agenda
Agenda Company Overview Key Highlights Industry Outlook Financial Performance Outlook 7
Slide 8: What differentiates Indorama Ventures
What differentiates Indorama Ventures Management Growth Team Operating Market Excellence Leadership Global Innovation Presence 8
Slide 9: Sustained growth and investment
Sustained growth and investment Capacity growth from 1.6MMt in 2008 to 5.4MMt in 2011 Focused growth within Successful global expansion with the Polyester value chain facilities in Asia, North America, Europe Capacity by Business (MMt) Capacity by Geography (MMt) 6.0 6.0 5.4 5.4 5.0 5.0 1.4 1.8 4.0
Slide 10: The global polyester chain industry leader
The global polyester chain industry leader The world’s largest polyester producer; Leading PET market positions Globally No 1 PET player in North America and Europe Global Major Polyester Producers (MMt)1 Capacity (MMt) 6 producers 4 5 4.9 4 10 producers 3.6 8% 8% 3.3 4 3 3 2.6 2.5 21% 21% 2.3 0.4 3
Slide 11: Global customer-centric presence
Global customer-centric presence Serving most of the players in the industry from the best-in-class production platform Rotterdam, Bobingen & Guben, Workington, UK Klaipeda, Lithuania Wloclawek, Poland Netherlands1 Germany4 • PTA: 350kT • PET: 155kT • Polyester fibers: 120kT • PET: 198kT • PET: 140k
Slide 12: Innovation is an integral part of IVL's DNA
Innovation is an integral part of IVL’s DNA Enhances IVL‟s position as the market leader and enables new growth Strong innovation platform Few examples of innovative products Polyclear® Extrusion blowmolding grade EBM resin can be recycled in the clear PET Resin PET stream OxyClear® Protects the qua
Slide 13: Operating excellence
Operating excellence Cost leadership and proven operating skills Four optimized elements of IVL’s cost Creating value with every growth leadership initiatives M&A Case Study: Eastman PTA/PET • Greenfield construction of largest and most Scale and efficient plants technology • Utilization of latest g
Slide 14: Strong management team with track record of value creation
Strong management team with track record of value creation Consistent delivery on strategy Strategy + Implementation = Results • The world’s largest • Market Leadership polyester producer • Established global reach • Customer Focus and global relationships Sustainable Business with customers Model
Slide 15: Agenda
Agenda Company Overview Key Highlights Industry Outlook Financial Performance Outlook 15
Slide 16: Significant consumer-driven demand…
Significant consumer-driven demand… Strong polyester growth outlook Robust polyester growth… …driven by consumer needs Global demand (MMt) 30 9.1% PET 20 6.0% Resin 24 10 17 14 0 2006 2010E 2014F Global demand (MMt) 60 9.1% 40 7.1% Polyester Fiber 52 20 37 28 0 2006 2010E 2014F Note: Companies logos
Slide 17: …supported by global megatrends
…supported by global megatrends Economic growth and product substitution are the key drivers Economic Material Sustainability Development Preference Favorable socio-economic trends Material of choice Need for resource efficiency • Population & urbanization growth • Polyester the most preferred • Ene
Slide 18: Structural changes underpin on-going demand growth
Structural changes underpin on-going demand growth Compelling product attributes driving substitution demand The most cost effective alternative The lowest carbon footprint Polyester Fiber vs. Cotton prices Polyester Fiber Life Cycle Assessment Price Eqv. ($/kg) Significant spike in Water consumptio
Slide 19: Polyester is well-poised for future growth
Polyester is well-poised for future growth Increasing dominance of Polyester Polyester fiber expected to continue to PET expected to continue to gain share replace cotton and other fibers against glass and metal Global Fiber Demand Global Packaging Demand (MMt) 15yr-CAGR (Bn of units) 15yr-CAGR 60 5
Slide 20: Polyester industry with highly stable profitability
Polyester industry with highly stable profitability Q1, 2011 benefited from shortage and spike price of cotton Integrated PTA/PET Spreads (2002-Q1,2011) Spread (US$/t) 1 GDP (% change) 2 700 6% 5% 500 4% 3% 300 577 523 542 510 496 486 492 2% 455 442 444 1% 100 0% 2002 2003 2004 2005 2006 2007 2008 2
Slide 21: Agenda
Agenda Company Overview Key Highlights Industry Outlook Financial Performance Outlook 21
Slide 22: Q1'11 Financial Highlights
Q1’11 Financial Highlights • Completed all acquisitions announced in 2010 • Completed the capital raising of $564 million • Production Volumes up 15% QoQ and 25% YoY to 0.95 million tonnes • Net sales up 59% QoQ and 81% YoY to $1.3 billion • EBITDA up 52% QoQ and 134% YoY to $215 million • Core net
Slide 23: Strong operating performance as we grow…
Strong operating performance as we grow… Production has been growing… …and operating performance remains high Production volume (Kt) Capacity utilisation (%) 1,000 954 Average: 98% 102% 100% 99% 100% 98% 97% 98% 97% 97% 97% 900 826 822 800 776 760 762 75% 739 734 700 700 50% 600 25% 500 1Q 2Q 3Q 4Q
Slide 24: ...generating higher earnings
...generating higher earnings Revenue EBITDA (US$ MM) (US$ MM) 1,500 1,328 250 215 200 141 1,000 733 737 752 838 608 602 628 150 101 115 499 80 92 89 100 79 62 500 50 0 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q '09A '09A '09A '09A '10A '10A '10A '10A '11A '09A '09A '09A '09A '10A '10A
Slide 25: …and strong financial returns
…and strong financial returns Invested capital / tonne (1) Performance Financial Returns (ROCE) (US$ per tonne) (US$ per tonne) (%) 30% Average = 18% 28% EBITDA / tonne 110 (2009) Estimated 22% 550 100 650 21% Greenfield 20% 19% EBITDA / tonne 137 16% 16% (2010) 15% 14% EBITDA / 9% tonne 10% 225 Cur
Slide 26: Steady growth in earnings
Steady growth in earnings EBITDA Net profit after tax and minority US$ MM US$ MM US$ MM 700 4,000 700 3,643 646 600 3,500 600 3,055 3,000 500 500 278 2,331 2,500 400 400 2,000 333 300 300 77 557 1,500 435 200 200 1,000 141 368 324 6 256 100 500 100 135 0 0 0 2009 2010 LTM Q1'11 2009 2010 LTM Q1'11 E
Slide 27: Strong capital structure
Strong capital structure Balance Sheet Capital Employed and Net Gearing ratio US$ MM US$ MM 5,000 4,859 4,000 80% 70% 964 63% 4,000 3,000 60% 48% 3,000 2,587 1,873 2,225 35% 444 2,000 40% 1,999 2,000 350 285 3,028 1,068 1,202 1,000 1,974 20% 1,000 1,207 2,022 1,537 1,712 1,075 507 673 0 0 0% 31-Dec-
Slide 28: Diversified debt exposure and well-managed debt repayments
Diversified debt exposure and well-managed debt repayments Debt Profile Long-term Loan Repayment Profile % of total % of total % of total 100% 100% 10% 29% 9% 75% 75% 26% 17% 36% 2011 50% 50% 2012 71% 2013 64% 25% 25% 2014 20% after 0% 0% 2014 18% Total Debt Total LT Loans Long-Term Short-Term THB U
Slide 29: Strong liquidity enhancing room for growth
Strong liquidity enhancing room for growth Liquidity US$ MM Strong internal cash generation 1,775 1,800 Project finance/lending from commercial banks and financial institutions 990 1,200 February 2010: 721 • Proceeds from IPO of US$ 135 million 600 488 • Completed exchange offer of US$ 218 million 3
Slide 30: Agenda
Agenda Company Overview Key Highlights Industry Outlook Financial Performance Outlook 30
Slide 31: Exploiting 2011 – 2014 opportunities in the active pipeline
Exploiting 2011 – 2014 opportunities in the active pipeline Committed projects under implementations in polyesters (MMt) 7.0 6.7 2011-14 pipeline 0.2 Combined 0.5 Committed 6.0 PTA projects 0.6 5.4 Fiber 5.0 PET 1.8 4.0 CAGR 3.3 0.6 +62% 2.9 3.0 5.4 1.6 2.0 1.6 1.6 0.2 3.0 0.6 0.2 1.0 0.7 0.1 0.5 0.
Slide 32: Projects in progress
Projects in progress Exploiting growth opportunities in Europe Segment Region Capacity (tpa) Completion PET polymers Africa 75,000 Q4, 2011 Polyester fibers & yarns Asia 300,000 Q1, 2013 *Polyester fibers & yarns Europe 120,000 Q2, 2011 PET Polymers Europe 190,000 Q1, 2012 PET Polymers Europe 220,00
Slide 33: IVL's Europe Business Strategy 2014
IVL’s Europe Business Strategy 2014 Focus on strengthening of market leadership and cost competitiveness Strategic Capacity growth through Thrusts selective brownfield PTA/PET investments Capacity („000 tpa) Q1 2012 Q4 2013 Q1 2014 • Increase overall market 3,000 Increase share through import 216 2,
Slide 34: Europe consistent high returns
Europe consistent high returns ROCE above IVL consolidated „000 tonnes IVL Capacity by region (2008-2010) 2,000 1,779 1,779 1,527 1,500 1245 903 903 1,000 657 441 500 225 0 2008 2009 2010 Asia Europe North America IVL ROCE (2008-2010) (%) 25% 21.3% 20.4% 20% 17.8% 17.5% 15.8% 15% 12.9% 12.6% 16.3% 1
Slide 35: Cotton prices peaked in 1Q, 2011
Cotton prices peaked in 1Q, 2011 Spreads returning to normal levels in Polyester value chain Index 200 180 160 140 120 100 80 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Cotton PSF PTA Source: Industry data Note: PSF is polyester staple fibers 35
Slide 36: Outlook
Outlook • Robust demand • Spreads returning to normal levels • Strong cash flow from operations • 2nd half to reflect full impact on operations from completed acquisitions • Strong balance sheet and liquidity to exploit growth opportunities 36
Slide 37: Thank you
Thank you
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