Methanex Corporation · TSX:MX
Methanex — Raymond James Investor Conference 2004
25 slides from Methanex's conference presentation, Mar 1, 2004
Slide 1: Raymond James Investor Conference
Bruce Aitken, President & COO Raymond James Investor Conference March 1, 2004
Slide 2: Forward-looking Statements
Forward-looking Statements Information contained in these materials or presented at this meeting, either in prepared remarks or in response to questions, may contain forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties that could cause actual result
Slide 3: Summary
Summary • One product, one focus • Acknowledged global leader • Consistent, clear strategy • Favourable supply / demand balance • Commitment to shareholders
Slide 4: Impressive Results
Impressive Results Since 2000, Methanex has… Earned In excess of US$1.2 billion in EBITDA Reinvested ~US$500 million in our global assets Distributed Over US$460 million to shareholders Delivered ~300% share price appreciation
Slide 5: Methanol is... produced from natural gas
Methanol is... • Produced from natural gas natural gas syngas reforming CO2 H2 @~900oC steam CO chemical grade crude distillation synthesis CH3OH CH3OH + H2O
Slide 6: Methanol is... diversified end uses
Methanol is... • Diversified end uses Methyl Dimethyl Formaldehyde Methyl Chloride Methacrylate Acetic Acid Terephthalate MDF Silicones Clear acrylic Paints PET bottles Plywood panels Adhesives PET Bottles
Slide 7: Methanol demand by derivative
Methanol is... • Methanol demand by derivative 2003 2008 16% 22% 28% 28% MTBE Formaldehyde Acetic Acid Methyl 3% Methacrylate 4% Other 38% 11% 36% 14%
Slide 8: Methanol demand by region
Methanol is... • Methanol demand by region 2003 2008 5% 5% 7% 7% North America 21% 27% Asia Pacific Middle East & India 23% 23% Western Europe & North Africa Eastern Europe Latin America 7% 7% 37% 31%
Slide 9: Regional MTBE consumption
Regional MTBE consumption • MTBE growth expected outside of N. America (000s tonnes) 8,000 6,000 4,000 2,000 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004E 2005E 2006E 2007E 2008E Africa & Middle East Asia Pacific Eastern Europe Western Europe Latin America North America Source: DeWi
Slide 10: Global demand growth
Global demand growth (000s tonnes) 36,000 27,000 18,000 9,000 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004E 2005E 2006E 2007E 2008E MTBE and Fuels Formaldehyde Acetic Acid Other Î Average growth ~3% per year over the last 5 years Going forward, we assume... Î Average growth of ~2% p
Slide 11: The competitive landscape
The competitive landscape 1997-2005 Capacity Additions 13.9 (000s tonnes) Capacity Shutdown (8.3) 4,000 Estimated Demand Growth (7.9) Net Reduction (2.3) 3,000 Trinidad Chile Iran Qatar China 2,000 Chile Saudi Saudi Norway China Iran Saudi 1,000 Indonesia Trinidad Trinidad Africa Argentina 0 Canada
Slide 12: Required operating rates
Required operating rates (000s tonnes) 40,000 92% 30,000 86% 85% 85% Industry 20,000 operating 83% “ceiling” 82% 82% 80% 10,000 80% 0 74% 2000 2001 2002 2003 2004E 2005E Global capacity Global demand Required industry operating rate
Slide 13: North American natural gas dynamics
North American natural gas dynamics Long market ; Tight market ; US$/tonne default to floor supply / demand 300 price mechanism driven pricing 250 200 150 100 50 1993 1994 1995 1996 1997 1998 1999 2000 2001 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Current 2002 2002 2002 2002 2003 2003 2003 2003 Natural gas cost/tonn
Slide 14: A clear strategy
A clear strategy Low cost Global Operational market excellence leadership
Slide 15: Methanol pipeline
Methanol pipeline Current production Under construction Marketing offices Canada UK Belgium Korea USA Japan China Trinidad Chile New Zealand 2003 sales mix: Chile 32% 43% 25%
Slide 16: Market share
Market share 21% 24% 27% 32% Î 2003 sales ~21% of global demand
Slide 17: Customers
Customers Significant customers: Î Major multi-national companies
Slide 18: Evolution of plant gate costs
Evolution of plant gate costs 115 US$/tonne 105 Fortier 95 idled 85 Medicine Hat idled Chile IV Chile II added 75 added Low cost 65 only Chile III added 55 Trinidad added 45 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004E 2005E 2006E High cost: 2.1 million tonnes 1.3 million tonnes Low cost: 3.3
Slide 19: Evolution of EBITDA
Evolution of EBITDA at $150 / tonne methanol price… Trinidad & 1995 2002 Chile in 2005 Produced Methanol 4,000 5,700 5,700 (000’s tonnes) EBITDA 160 240 340 (millions US$)
Slide 20: Trinidad project
Trinidad project • Acquired 850,000 tonne Titan facility, effective May 1/03 • Constructing 1.7 million tonne Atlas facility with BP • Atlas has $250/tonne estimated capital cost* • Atlas product to market in 1H/04 *Oxygen provided by third party
Slide 21: Chile expansion
Chile expansion • 840,000 tonne Chile IV facility under construction • $325/tonne estimated capital cost • To market in early 2005 • 20 year gas supply plus extensions to existing gas contract
Slide 22: Liquidity & capital projects
Liquidity & capital projects Liquidity Remaining to the end of 2006... at 12/31/03 Cash $288 million Bank Lines $250 million Total $538 million Cash Requirements ($ millions) 2004 2005 2006 Total Maintenance 30 25 25 80 Strategic Capital Atlas 40 - - 40 Chile 95 40 - 135 Total 165 65 25 255
Slide 23: Commitment to shareholders
Commitment to shareholders Longstanding track record… 200 200 150 150 100 100 50 50 0 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Share Repurchase Dividend Average number of shares outstanding
Slide 24: In closing...
In closing... A simple model for Methanex - Chile and Trinidad Low-cycle Mid-Cycle ($115/tonne) ($150/tonne) EBITDA 180 340 Cash Flow* 120 265 Regular Dividend 30 30 Maintenance Capex 25 25 Cash Generation 65 210 *From operations before changes in non-cash working capital and utilization of pre-paid
Slide 25: Thank You.
A Responsible Care® Company Thank You.