Alpek, S.a.b. De C.v. Class A · BMV:ALPEK/A
Alpek, S.a.b. De C.v. Class A — Alpek Sab De Cv Ord — Q3 2021 Earnings Presentation
25 slides from Alpek, S.a.b. De C.v. Class A's earnings presentation, Oct 20, 2021
Slide 1: Third Quarter 2021 Earnings Webcast
THIRD QUARTER 2021 EARNINGS WEBCAST
Slide 2: Today's Speakers
TODAY’S SPEAKERS JOSÉ DE JESÚS VALDEZ JOSÉ CARLOS PONS ALEJANDRO ELIZONDO CEO CFO IRO 2
Slide 3: Topics for Today's Webcast
TOPICS FOR TODAY’S WEBCAST I. Financial Performance II. ESG | Project Evergreen III. Revised Guidance 3
Slide 4: Integrated PET Margins
INTEGRATED PET MARGINS Margins remain at 2Q21 closing levels / Asia-China spread has widened Asian Margins | Px / MEG to PET (US$/Ton) China -11% • Asian reference margins remain 382 370 356 similar to 2Q21 closing levels 324 330 318 304 310 277 266 275 • Chinese reference margins closed 214 250 242
Slide 5: Polypropylene Margins
POLYPROPYLENE MARGINS NA Polypropylene Margin | PP to PGP (cpp) +11% 52 • Record high reference margins of 47 52cpp for PP in 3Q21 32 • Supported by strong PP 25 supply/demand balance 24 22 22 22 22 21 19 20 17 13 15 15 16 • High marine freight costs have 12 12 increased Asian import price parity 11
Slide 6: 3Q21 Financial Highlights
3Q21 FINANCIAL HIGHLIGHTS • Strong third quarter volume of 1.2 million tons (-1% QoQ), and record P&C high of 271k tons • Record P&C Comparable EBITDA of US $124 million (+4% QoQ) from record PP margins • Comparable EBITDA of US $234 million (+4% QoQ) due to strong volume & strengthened margins • Ac
Slide 7: Volume Evolution
VOLUME EVOLUTION Alpek Sales Volume (Kton) 1,260 1,248 1,230 1,201 1,195 • Strong overall volume of 1.2 million 234 256 234 256 tons as demand remains high 271 P&C • Polyester volume decreased (-10% YoY) due to extended effect of Altamira drought & precautionary shutdown for Hurricane Ida 1,026 992
Slide 8: Feedstock Costs
FEEDSTOCK COSTS Crude Oil & Paraxylene NA Propylene Contract Price NA Px Brent Contract US$/Bbl US$/Ton +23% cpp 100 1,600 90 Crude Oil (Brent) Px 82 +6% 80 • Brent crude oil price increased (+6% 1,400 +7% 73 QoQ) as a result of resilient 70 67 80 1,165 1,200 demand for refined products & 1,077 1,06
Slide 9: EBITDA Breakdown
EBITDA BREAKDOWN 3Q21 EBITDA (US$M) 279 +4% 1 2 22 • Comparable EBITDA of US$234M 225 234 21 (+4% QoQ) 2 3 138 P&C • Polyester Comparable EBITDA of US$107M (+5% QoQ) as margins 124 154 3 120 remained strong 56 • Record P&C Comparable EBITDA of US$124M (+4% QoQ) from record PP margins 138 Polyester 9
Slide 10: Free Cash Flow Generation
FREE CASH FLOW GENERATION US$M 30 1,323 20 32 1,247 279 26 3 245 • Free Cash Flow of -US$27M in 3Q21 as strong EBITDA was offset by increased Net Working Capital • Increase in NWC partly due to the higher raw material prices and increased inventory levels • CAPEX of US$32M keeps Alpek on track for g
Slide 11: Net Debt & Leverage
NET DEBT & LEVERAGE Net Debt (US$M) LTM EBITDA (US$M) Net Debt/EBITDA (Times) 1,323 1,235 1,247 2.0 2.0 1,185 1,219 1.9 1.7 813 1.6 733 657 623 601 1,077 2.1 977 1.7 778 1.6 719 1.3 1.2 565 3Q20 4Q20 1Q21 2Q21 3Q21 3Q20 4Q20 1Q21 2Q21 3Q21 3Q20 4Q20 1Q21 2Q21 3Q21 Comp. EBITDA Net Debt / Comp. EBITD
Slide 12: Project Evergreen | ESG Model
PROJECT EVERGREEN | ESG MODEL MAXIMIZE LEAD WITH EMBRACE GROW RESOURCE EMPATHY CHANGE RESPONSIBLY EFFICIENCY • OCCUPATIONAL • INNOVATION • CIRCULARITY • CARBON SAFETY EMISSIONS & • ACTIVE ESG RISK • CYBERSECURITY ECO-EFFICIENCY • DIVERSITY, MANAGEMENT • POLLUTION EQUITY & • WATER • SUSTAINABLE INCLU
Slide 13: Project Evergreen | Selected Targets
PROJECT EVERGREEN | SELECTED TARGETS CIRCULARITY CARBON EMISSIONS + PET: “Alpek plans to increase its PET bottle recycling capacity to 300 thousand ECO-EFFICIENCY annual metric tons by 2025 to meet its customers' recycled content needs.” PP: “Alpek will leverage its partnerships to develop chemical
Slide 14: Revised '21 Guidance & Key Assumptions
REVISED ’21 GUIDANCE & KEY ASSUMPTIONS Revised ‘21 Previous ‘21 Change 2020 Guidance Guidance (% vs. ‘20) Crude Oil US$/Bbl 70 70 42 67 MARKET Asia PTA/PET Margin US$/Ton 315 300 269 15 MXN / USD (Avg.) MXN 21.1 21.1 21.5 (2) Reported EBITDA US$M 1,050 880 565 86 FINANCIALS Comparable EBITDA1 US$M 8
Slide 15: Q&A
Q&A JOSÉ DE JESÚS VALDEZ JOSÉ CARLOS PONS CEO CFO 15
Slide 16: Appendix
APPENDIX
Slide 17: EBITDA Evolution
EBITDA EVOLUTION Quarterly EBITDA (US$M) 324 • 3Q21 Comparable EBITDA of 4% US$234M (+4% QoQ) 273 279 234 • Increase largely due to better 225 polyester margins, record PP 203 201 margins & solid EPS performance 179 154 151 • Reported EBITDA of US$279M up (+56% YoY) due to better Comparable EBITDA •
Slide 18: Extraordinary Effects Breakdown
EXTRAORDINARY EFFECTS BREAKDOWN 2021 2020 Delta M dls 1Q 2Q 3Q YTD 1Q 2Q 3Q YTD 1Q 2Q 3Q YTD Reported EBITDA 324 273 279 876 111 74 179 364 214 199 100 513 Inventory Adjustment (63) (18) (22) (103) 17 42 (16) 43 (80) (60) (7) (147) Carry-forward effect (58) (29) (21) (109) 20 39 (6) 52 (78) (68) (15
Slide 19: Relevant References | Crude Oil
RELEVANT REFERENCES | CRUDE OIL Price increased as demand for refined products remains strong & supply reduced Brent Crude Oil Price US$/Bbl 120 99 100 80 71 67 64 60 52 54 44 42 40 20 0 2014 2015 2016 2017 2018 2019 2020 2021 19
Slide 20: Relevant References | Paraxylene
RELEVANT REFERENCES | PARAXYLENE Px prices increased (+7%) largely in line with Crude Oil price (+6%) NA Px Contract Price (US$/Ton) 1,708 1,635 1,641 1,382 +7% 1,174 1,165 1,077 1,064 992 954 955 996 937 891 876 876 658 685 590 2011 2012 2013 2014 2015 2016 2017 2018 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3
Slide 21: Relevant References | Propylene
RELEVANT REFERENCES | PROPYLENE PGP contract prices remained high as Hurricane Ida impacted inventory levels NA Propylene Contract Price | PGP (cpp) +23% 82 76 71 73 69 67 60 45 39 39 41 38 37 38 34 35 35 31 26 2011 2012 2013 2014 2015 2016 2017 2018 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2019 2020 2021 2
Slide 22: Project Evergreen | Additional Targets
PROJECT EVERGREEN | ADDITIONAL TARGETS WATER MANAGEMENT DIVERSITY, EQUITY CYBERSECURITY AND INCLUSION “Alpek is committed to securing its information “Alpek is closely monitoring its water and guaranteeing the continuity of its “Alpek is committed to further diversifying its consumption intensities,
Slide 23: For Additional Information
FOR ADDITIONAL INFORMATION Email: IR@alpek.com | Phone: +52 (818) 748-1146 ALEJANDRO • 10 Years at Alfa/Alpek ELIZONDO • Previously held roles as Director of Logistics & Procurement at Indelpro, Director of Energy Markets at Alfa, and Project Leader at The Boston Consulting Group IRO • BS in Industr
Slide 24: Disclaimer
DISCLAIMER This presentation contains, or may be deemed to contain, “forward-looking statements”. By their nature, forward looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The future results of Alpek
Slide 25: Third Quarter 2021 Earnings Webcast
THIRD QUARTER 2021 EARNINGS WEBCAST