Methanex Corporation · TSX:MX
Methanex — Merger or Acquisition (September 2024)
23 slides from Methanex's merger presentation, September 2024
Slide 1: Methanex to Acquire OCI's Methanol Business
Methanex to Acquire OCI’s Methanol Business SPECIAL INVESTOR PRESENTATION SEPTEMBER 2024 1
Slide 2: Forward-looking statements and non-GAAP measures
Forward-looking statements and non-GAAP measures Information contained in these materials or presented orally, either in prepared remarks or in response to questions, may contain forward-looking statements. Actual results could differ materially from those contemplated by the forward-looking stateme
Slide 3: Today's Presenters
Today’s Presenters Rich Sumner Dean Richardson President and Chief Senior Vice President, Executive Officer Finance & Chief Financial Officer 3
Slide 4: Transaction overview
Transaction overview • Methanex to acquire OCI Global’s ("OCI") methanol business for $2.05 billion ─ $1.15 billion in cash Consideration ─ 9.9M of Methanex shares worth approximately $450M1; OCI to own ~13% of post transaction outstanding shares ─ $450 million of assumed debt and leases • Implies 7
Slide 5: Strong transaction rationale that fits with Methanex strategy
Strong transaction rationale that fits with Methanex strategy • Strengthening our supply chain and financial resiliency ‒ Provides scale and adds stability to manufacturing base ‒ Access to stable and favourably-priced North American natural gas enables bottom half of cost curve positioning ‒ Expect
Slide 6: Acquisition expected to drive strong Adjusted EBITDA growth
Acquisition expected to drive strong Adjusted EBITDA growth Illustrative pro-forma run rate numbers have been modeled consistently with Methanex’s financial disclosures • Adds substantial production capacity in a • Strong Adjusted EBITDA growth and free cash flow conversion supports de-levering plan
Slide 7: Positive industry outlook expected to drive cash flow for shareholders
Positive industry outlook expected to drive cash flow for shareholders 2 • Methanol industry demand expected to grow at a 3.5% ~3.5% CAGR or +17 MMT Operating MMT demand growth over next five years driven rate CAGR over the next 5 years; projections do not include 140 by traditional and energy appli
Slide 8: Well-invested world-class assets
Well-invested world-class assets OCI has invested ~$2B in the acquired assets since 2011 Operating assets Idled asset OCI Beaumont, Beaumont, TX, USA Natgasoline, Beaumont, TX, USA BioMCN, Delfzijl, Netherlands Acquired 100% 50% 100% Ownership Production Methanol: 910 ktpa 850 ktpa1 1.0 mmtpa (2 x 5
Slide 9: Stable gas supply underpins sustainable low-cost structure
Stable gas supply underpins sustainable low-cost structure Access to abundant and economic Illustrative methanol industry cost curve natural gas feedstock in low-risk ($/tonne) jurisdiction Strategically located capacity enhances supply chain flexibility to service global customers Global Range for
Slide 10: Acquisition below reinvestment economics
Acquisition below reinvestment economics Key highlights Acquired below brownfield and greenfield replacement cost ($/MT) 1 • Assets acquired below estimated brownfield and greenfield reinvestment economics ~$1,300+ • Immediate cash flow capability and no capital ~$1,050+ ~$975 construction risk comp
Slide 11: Diversification into ammonia primarily serving industrial customers
Diversification into ammonia primarily serving industrial customers Enables Methanex to deploy core capabilities while diversifying revenue exposure Ammonia and methanol production are synergistic Adjacent production process flows • Utilizes Methanex / OCI’s capabilities in chemical production, with
Slide 12: HyFuels provides enhanced capability and expertise for our low-carbon efforts
HyFuels provides enhanced capability and expertise for our low-carbon efforts OCI HyFuels product portfolio Current RNG Bio-Methanol Bio-MTBE Alcohol Mix Long Term Green/Blue Blue/E/ RNG Bio-Methanol E/Bio-MTBE Alcohol Mix Ammonia Advanced low-carbon methanol capabilities Across feedstock sourcing,
Slide 13: Continued focus on financial flexibility
Continued focus on financial flexibility • Committed to maintaining a strong balance sheet with leverage • Temporary leverage increase at closing with clear de-levering plan in the 2.5 – 3.0x range within 18 months of closing at $350/MT average methanol price • Fully committed debt financing package
Slide 14: Resilient financial position
Resilient financial position Strong liquidity and well-balanced debt maturities Targeting investment grade metrics Bond and Term Loan A maturities with amortization ($M)1 Excellent Liquidity Position Hold minimum cash of $300 million 260 Methanex Share of Cash (as of 30 June 2024) $390M 700 700 600
Slide 15: Consistent approach to capital allocation priorities
Consistent approach to capital allocation priorities At $350/MT realized methanol price significant capital available post de-levering plan Profitable growth Pursue value-accretive conventional and low-carbon Maintain our business growth opportunities which Maintain financial flexibility will enhanc
Slide 16: Complementary organizations lower integration risk and enhance synergy realization
Complementary organizations lower integration risk and enhance synergy realization Focus on integration execution and realizing synergy potential Clear path for manufacturing integration with common methanol plant technology allowing for immediate sharing, after closing, of operational excellence to
Slide 17: Natgasoline joint venture and next steps
Natgasoline joint venture and next steps Natgasoline joint venture Next steps • A legal proceeding between OCI and its Natgasoline joint venture • Transaction has been approved by the boards of partner has commenced over certain shareholder rights. This relates directors of both Methanex and OCI to
Slide 18: Summary
Summary • Unique opportunity to acquire 2.1mtpa1 capacity of existing, world-scale producing methanol assets in North America with access to abundant favourably-priced natural gas • Acquisition strengthens our supply chain and financial resiliency • Expected to increase global methanol production by
Slide 19: ‘the power of agitty
19 ‘the power of agitty
Slide 20: Forward-looking statements
Forward-looking statements APPENDIX The information in this presentation contains certain forward-looking statements, including within the meaning of applicable securities laws in Canada and the United States. These statements relate to future events or our future intentions or performance. All stat
Slide 21: Illustrative Adjusted EBITDA and free cash flow capabilities assumptions – Methanex
Illustrative Adjusted EBITDA and free cash flow capabilities assumptions APPENDIX (non-GAAP measures) – Methanex Note that Adjusted EBITDA and Free cash flow are forward-looking non-GAAP measures that do not have any standardized meaning prescribed by GAAP and Adjusted EBITDA reflects Methanex’s pro
Slide 22: Illustrative Adjusted EBITDA and free cash flow capabilities assumptions – OCI Global's Methanol Business
Illustrative Adjusted EBITDA and free cash flow capabilities assumptions – APPENDIX OCI Global’s Methanol Business (“OCI”) Adjusted EBITDA reflects OCI’s proportionate ownership interest. OCI’s Run-rate Adjusted EBITDA and Free cash flow figures include ~$30M of production is based on the Beaumont a
Slide 23: Investor Relations
Investor Relations T: 604 661 2600 invest@methanex.com www.methanex.com linkedin.com/company/methanex-corporation @Methanex