Lyondellbasell Industries Nv · NYSE:LYB
Lyondellbasell Industries Nv — 2018 J.P. Morgan Aviation, Transportation and Industrials Conference
30 slides from Lyondellbasell Industries Nv's conference presentation, Mar 15, 2018
Slide 1: 2018 J.P. Morgan Aviation, Transportation and Industrials Conference
2018 J.P. Morgan Aviation, Transportation and Industrials Conference Thomas Aebischer CFO March 15, 2018 www.lyondellbasell.com 1
Slide 2: Cautionary Statement
Cautionary Statement The statements in this presentation relating to matters that are not historical facts are forward-looking statements. These forward-looking statements are based upon assumptions of management which are believed to be reasonable at the time made and are subject to significant ris
Slide 3: Additional Information
Additional Information Additional Information and Where to Find It This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. This communication may be deemed to be solicitation material in respect of the p
Slide 4: World-Class Scale With Leading Positions
World-Class Scale With Leading Positions Who We Are 2017 Global Capacity Rankings(3) ▪ $44 billion market capitalization(1) Ethylene #5 ▪ Global independent chemical company, incorporated under Dutch law Chemicals Propylene #6 ▪ Executive offices in London, Rotterdam, and Houston ▪ Products sold in
Slide 5: LyondellBasell in 2017
LyondellBasell in 2017 Delivering Advancing Capturing Results Growth Opportunity $ 4.9 billion Improving Income from Continuing Operations Refinery Reliability Groundbreaking Final Investment Decision for Hyperzone HDPE for World’s Largest $ 7.1 billion 1.1 billion lb PO/TBA Plant EBITDA (+8% vs 201
Slide 6: LYB Portfolio Diversity Increases Earnings Resiliency
LYB Portfolio Diversity Increases Earnings Resiliency O&P Americas and O&P EAI EBITDA I&D, Refining and Technology EBITDA O&P Americas and O&P EAI EBITDA LCM I&D, Refining and Technology EBITDA LCM 2013-17 Average EBITDA ex. LCM 2013-17 Average EBITDA ex. LCM USD, millions USD, millions $6,000 $2,50
Slide 7: Industry Capacity Additions Serving Strong Global Demand Growth
Industry Capacity Additions Serving Strong Global Demand Growth Global Ethylene Supply & Demand(1) Global Ethylene Supply & Demand Growth(1) Capacity Demand Capacity Growth Demand Growth Effective Operating Rate - 1Q17 Forecast Effective Operating Rate - 1Q18 Forecast ~7 Blb in excess capacity growt
Slide 8: LYB’s Hyperzone PE Technology is Timed to Capture HDPE Demand
LYB’s Hyperzone PE Technology is Timed to Capture HDPE Demand Capacity Additions Demand Growth World Scale Plants (1) 15 10 HDPE 5 2015-2017 2018-2020 Estimate World Scale Plants (1) 15 10 LLDPE 5 La Porte, Texas 2015-2017 2018-2020 La Porte Hyperzone HDPE Estimate World Scale Plants (1) ■ 1.1 billi
Slide 9: Intermediates and Derivatives: A Platform for Earnings Stability & Growth
Intermediates and Derivatives: A Platform for Earnings Stability & Growth EBITDA (ex. LCM) History Key Messages EBITDA LCM ▪ Stable earnings and consistent cash 2013-17 Average EBITDA ex. LCM generation USD, millions $2,000 ▪ Broad product portfolio with feedstock 1,500 integration 1,000 ▪ Leading m
Slide 10: Advancing Our Leading PO / TBA Technology and Market Position
Advancing Our Leading PO / TBA Technology and Market Position ■ 1.0 billion pounds Propylene Oxide, 2.2 billion pounds TBA ■ Est. cost: ~$2.4 billion ■ Groundbreaking – Mid 2018 ■ Startup 2021 ■ Estimated EBITDA(1): $350 - $450 MM/year Value-driven growth supported by advantaged feedstocks and techn
Slide 11: Improved Refining Reliability Producing Results
Improved Refining Reliability Producing Results EBITDA Refinery Outlook USD, millions $200 ■ Improved reliability increased operating rates and throughput during 2017 150 ■ Increased profitability driven by strong diesel 100 demand and improved heavy/light crude differentials 50 ■ Full capability to
Slide 12: Profitability Supports Reinvestment for Value-Driven Growth
Profitability Supports Reinvestment for Value-Driven Growth Sources 2013-2017 Uses 2018-2022 Uses Priority Optional Balance Sheet Balance Capacity Inorganic Sheet Opportunities Capacity Share Share Repurchase Repurchase Growth CAPEX Cash From Operating Growth Activities CAPEX Dividends Dividends Bas
Slide 13: Investment in Base CAPEX and Disciplined Cost Management Supports Efficient Operations
Investment in Base CAPEX and Disciplined Cost Management Supports Efficient Operations 2017 LYB Operating Reliability(1) Fixed Costs(2) Operating Rate Indexed to 2008 100% 100% 75% 95% 50% 90% 25% 85% 0% U.S. Ethylene EAI Ethylene PO 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 SG&A as Percent
Slide 14: We Are Committed to a Strong, Growing and Sustainable Dividend
We Are Committed to a Strong, Growing and Sustainable Dividend Historical Dividend Yield(1) 2017 Dividend Yield(3) LYB S&P Chemicals S&P 500 SABIC 4% Evonik 3% BASF 3.2% 2% CF Industries Olin Corp 1% Eastman 2011 2012 2013 2014 2015 2016 2017 Trinseo Methanex Dividends and Incremental Free Cash Flow
Slide 15: Increasing Investment in LyondellBasell’s Organic Growth
Increasing Investment in LyondellBasell’s Organic Growth Estimated EBITDA(1) Scope Projected CAPEX ($MM/year) (MM lbs.) Start-Up ($MM) ’15-’17 Avg. Margins Hyperzone HDPE 1,100 2019 ~$725 $150 - 200 Underway Projects Propylene Oxide/TBA 1,000/2,200 2021 ~$2,400 $350 - 450 Channelview Ethylene 550 20
Slide 16: LyondellBasell Currently Participates in One of Several Advanced Polymers Markets
LyondellBasell Currently Participates in One of Several Advanced Polymers Markets Polyethylene Polypropylene Engineered Polymers LyondellBasell’s PP Compounding business is a global leader in automotive www.lyondellbasell.com 16
Slide 17: Combination Enables Vertically Integrated Solutions and Expands Offering
Combination Enables Vertically Integrated Solutions and Expands Offering Polyethylene Polypropylene Engineered Polymers Comprehensive customer solutions for broad and attractive markets www.lyondellbasell.com 17
Slide 18: Combination Creates Value, Strengthens Earnings Growth and Stability
Combination Creates Value, Strengthens Earnings Growth and Stability (2) (1) Combined (3) Businesses LTM Revenue $2.1 billion $2.5 billion $4.6 billion LTM Adjusted EBITDA $241 million $205 million $446 million LTM Adjusted EBITDA Margin(4) 11.3% 8.1% 9.5% LTM Sales Volume 2.5 billion pounds 2.4 bil
Slide 19: Significant Cost Synergies Expected Within Two Years
Significant Cost Synergies Expected Within Two Years Logistics & Procurement ~35% Operational Efficiency ~15% $150 million Run-Rate Cost Synergies within Asset Optimization ~35% 2 years SG&A ~15% Improvements A. Schulman Average Adjusted EBITDA(1) from 2014 – 2017: $190 million (1) Adjusted EBITDA a
Slide 20: Growth Guided by Strategic Goals
Growth Guided by Strategic Goals Leverage Core Strengths: ▪ Safe & reliable operations ▪ Cost discipline ▪ Global reach and broad portfolio Consistent Top-Quartile Advance Profitable Growth: TSR ▪ Focus on advantaged and differentiated products and markets Capture Opportunities: ▪ Consistent with LY
Slide 21: Appendix
Appendix www.lyondellbasell.com Company confidential 21
Slide 22: 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. The non-GAAP measures we have presented include diluted earnings per share from continuing operatio
Slide 23: EBITDA Excluding LCM Adjustments to EBITDA 2013-2017
EBITDA Excluding LCM Adjustments to EBITDA 2013-2017 Reconciliation of EBITDA Excluding LCM Adjustments to EBITDA For the Years Ended December 31, Average In Millions of Dollars 2013 2014 2015 2016 2017 2013 - 2017 EBITDA Excluding LCM Adjustments: Olefins & Polyolefins - Americas $ 3,573 $ 4,190 $
Slide 24: EBITDA Excluding LCM Adjustments to EBITDA – 2017 by Quarter
EBITDA Excluding LCM Adjustments to EBITDA – 2017 by Quarter Reconciliation of EBITDA Excluding LCM Adjustments to EBITDA Three Months Ended March 31, June 30, September 30, December 31, In Millions of Dollars 2017 2017 2017 2017 EBITDA Excluding LCM Adjustments: Olefins & Polyolefins - Americas $ 7
Slide 25: Net Income to EBITDA 2013-2017
Net Income to EBITDA 2013-2017 Reconciliation of Net Income To EBITDA For the Years Ended December 31, In Millions of Dollars 2013 2014 2015 2016 2017 Net Income $ 3,853 $ 4,168 $ 4,474 $ 3,837 $ 4,877 Loss from Discontinued Operations 7 4 5 10 18 LCM Adjustments, After Tax - 483 351 18 - Income fro
Slide 26: Net Income to EBITDA – 2017 by Quarter
Net Income to EBITDA – 2017 by Quarter Reconciliation of Net Income To EBITDA Three Months Ended March 31, June 30, S eptember 30, December 31, In Millions of Dollars 2017 2017 2017 2017 Net Income $ 797 $ 1,130 $ 1,056 $ 1,894 Loss from Discontinued Operations 8 4 2 4 LCM Adjustments, After Tax - -
Slide 27: Diluted EPS from Continuing Operations Excluding LCM Adjustments
Diluted EPS from Continuing Operations Excluding LCM Adjustments to Diluted EPS from Continuing Operations Reconciliation of Diluted EPS from Continuing Operations Excluding LCM Adjustments to Diluted EPS from Continuing Operations For the Years Ended December 31, 2013 2014 2015 2016 2017 Diluted Ea
Slide 28: Free Cash Flow 2011 - 2017
Free Cash Flow 2011 - 2017 Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities For the Years Ended December 31, In Millions of Dollars 2011 2012 2013 2014 2015 2016 2017 Free Cash Flow $ 1,810 $ 3,727 $ 3,274 $ 4,549 $ 4,402 $ 3,363 $ 3,659 Add: Capital Expenditures 1,050 1
Slide 29: Free Cash Flow Yield
Free Cash Flow Yield Calculation of Free Cash Flow Yield Year Ended December 31, In Millions of Dollars (except share data) 2017 Net Cash Provided by Operating Activities $ 5,206 Less: Capital Expenditures 1,547 Free Cash Flow $ 3,659 Divided by: Market Capital: Common stock outstanding 394,512,054
Slide 30: Return on Invested Capital
Return on Invested Capital Calculation of LYB Return on Invested Capital (ROIC) Years Ended December 31, In Million of Dollars 2016 2017 Income from Continuing Operations $ 4,895 Less: Tax Benefit due to change in tax law from U.S. Tax Cuts and Jobs Act 819 Add: Interest Expense, Net 467 Effective T