Lyondellbasell Industries Nv · NYSE:LYB
Lyondellbasell Industries Nv — Jefferies 2018 Global Industrials Conference
32 slides from Lyondellbasell Industries Nv's conference presentation, Aug 8, 2018
Slide 1: Jefferies 2018 Global Industrials Conference
Jefferies 2018 Global Industrials Conference Bob Patel CEO August 8, 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: A Strong, Global Company Delivering Outstanding Performance
LyondellBasell A Strong, Global Company Delivering Outstanding Performance GLOBAL $48 billon enterprise value(1) 13,400 employees globally, mostly in the U.S. and Europe with others in strategic regions Manufacturing in 17 countries and our products are sold in approximately 100 countries LEADING(2)
Slide 4: LyondellBasell 2Q 2018 Last Twelve Months
LyondellBasell 2Q 2018 Last Twelve Months Delivering Advancing Capturing Results Growth Opportunity Refinery Reliability $ 5.8 billion Exclusive Acquisition on track Net Income Negotiations Capturing A. Schulman with Odebrecht S.A. Margin $ 7.5 billion EBITDA Premium New Monetizing Polyolefin Compou
Slide 5: 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 I&D, Refining and Technology EBITDA LCM O&P Americas and O&P EAI EBITDA LCM 2014-17 Average EBITDA ex. LCM 2014-17 Average EBITDA ex. LCM USD, millions USD, millions $6,000 $2,50
Slide 6: 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 7: Majority of New N. America Industry Capacity Already in the Market
Majority of New N. America Industry Capacity Already in the Market Status & Impact of New Capacity 2016-2019: N. America Capacity Startups(1) ■ Ethylene units are running well ~ 65% of 24 Blbs of Ethylene ■ Not all PE units are operating at full rates ~ 65% of 19 Blbs of Polyethylene ■ PE exports ar
Slide 8: LYB's Hyperzone PE Technology is Poised to Capture HDPE Demand
LYB’s Hyperzone PE Technology is Poised 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 La Porte, Texas 5 2015-2017 2018-2020 Estimate La Porte Hyperzone HDPE World Scale Plants (1) ■ 1.1 bill
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 2014-17 Average EBITDA ex. LCM generation USD, millions $2,000 Broad product portfolio with feedstock 1,500 integration 1,000 Leading m
Slide 10: Intermediates and Derivatives Structural Changes and Reliable Operations
Intermediates and Derivatives Structural Changes and Reliable Operations Capturing Opportunities EBITDA increases $450 MM 1H18 vs. 1H17 EBITDA USD, millions ■ Structural improvements ~ 15% $1,200 ▪ Improved contracting strategies ▪ Return to typical reliability ■ 1H18 LYB maintenance schedule ~ 20%
Slide 11: 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 12: Improved Refining Reliability Producing Results
Improved Refining Reliability Producing Results EBITDA Refinery Outlook EBITDA LCM USD, millions ■ Improved reliability increased operating rates $600 and throughput since 2017 ■ Increased profitability driven by strong diesel 400 demand and improved heavy/light crude differentials 200 ■ Full capabi
Slide 13: Strong, Consistent Cash Generation
Strong, Consistent Cash Generation LYB Cash From Operating Activities ■ 2Q18 LTM Capex: $1.6 billion USD, millions Free Cash Flow Capex $7,000 6,000 ■ 2Q18 LTM Free Cash Flow(1): $4.1 billion 5,000 4,000 3,000 ■ 2Q18 Ending Total Liquidity(2): $7.3 billion 2,000 1,000 2014 2015 2016 2017 2Q18 LTM Ca
Slide 14: Profitability Supports Reinvestment for Value-Driven Growth
Profitability Supports Reinvestment for Value-Driven Growth Sources 2013-2017 Uses 2018-2022 Uses Priority Optional Balance Sheet Balance Capacity Inorganic Sheet Opportunities Capacity Share Share Repurchase Repurchase Growth CAPEX Cash From Operating Growth Activities CAPEX Dividends Dividends Bas
Slide 15: Regular Cadence of Investment in LyondellBasell's Organic Growth
Regular Cadence of Investment in LyondellBasell’s Organic Growth Estimated Capital Large Profit Generating Projects Allocation(2) Other Potential Projects Estimated EBITDA(1) Large Potential Projects Scope Projected ($MM/year) (MM lbs.) Start-Up Projects Underway ’15-’17 Avg. Margins Base CAPEX Unde
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: A. Schulman Acquisition: Creating a Platform for Growth
A. Schulman Acquisition: Creating a Platform for Growth Strategic Rationale Financial Metrics(1) ■ Vertical integration ■ Purchase price = $2.25 billion ■ New growth platform for organic and ■ 6.3x LTM 1Q18 Adjusted EBITDA, including inorganic opportunities synergies ■ End-to-end customer solutions
Slide 20: Tangible Earnings Growth Over the Next Twelve Months
Tangible Earnings Growth Over the Next Twelve Months Acquisition of Hyperzone I&D Refinery Refining A. Schulman HDPE Improvement Reliability Markets Vertical Poised to Capture Sustainable Contract Increased Focus on Well Positioned for Integration HDPE Demand Improvements Operational Excellence IMO
Slide 21: 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 22: Appendix
Appendix www.lyondellbasell.com Company confidential 22
Slide 23: Global Macro Trends - Demographics Driving Demand
Global Macro Trends - Demographics Driving Demand Upper/Middle Class Households World PE and PP Demand Households, millions lbs., billions 400 China India Western Europe U.S. 250 PE PP 300 200 150 200 100 100 50 ’90 – ’16 ’11 – ’16 ’15 – ‘16 PE: 4.4% PE: 3.6% PE: 3.9% 0 PP: 6.6% PP: 4.9% PP: 4.4% 20
Slide 24: 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 excluding LCM, EBITDA, E
Slide 25: Enterprise Value
Enterprise Value Calculation of Enterprise Value June 30, In Millions of Dollars, except share amounts 2018 Common Shares Outstanding 390,343,283 Closing Price $ 109.85 Market Capitalization 42,879 Current Maturities of Long Term Debt 974 Short-Term Debt 76 Long-Term Debt 7,490 Less: Cash and Cash E
Slide 26: EBITDA Excluding LCM Adjustments to EBITDA
EBITDA Excluding LCM Adjustments to EBITDA Reconciliation of EBITDA Excluding Lower of Cost or Market Inventory Valuation Adjustments ("LCM Adjustments") to EBITDA For the Year Last Twelve For the Years Ended For the Three Months Ended Ended For the Six Months Ended Months Average December 31, Decem
Slide 27: Net Income to EBITDA
Net Income to EBITDA Reconciliation of Net Income To EBITDA For the Year Last Twelve Three Months Ended Ended Six Months Ended Months December 31, December 31, December 31, March 31, June 30, September 30, December 31, December 31, June 30, June 30, June 30, In Millions of Dollars 2014 2015 2016 201
Slide 28: Free Cash Flow Yield
Free Cash Flow Yield Calculation of Free Cash Flow Yield Three Months Ended Last Twelve S eptember 30, December 31, March 31, June 30, June 30, In Millions of Dollars (except share data) 2017 2017 2017 2018 2018 Net Cash Provided by Operating Activities $ 1,486 $ 1,482 $ 1,006 $ 1,727 $ 5,701 Less:
Slide 29: Diluted EPS Excluding LCM Adjustments to Diluted EPS
Diluted EPS Excluding LCM Adjustments to Diluted EPS Reconciliation of Diluted EPS Excluding LCM Adjustments to Diluted EPS Last Twelve Months For the Years Ended December 31, June 30, 2014 2015 2016 2017 2018 Diluted Earnings Per Share Excluding LCM Adjustments $ 8.91 $ 10.34 $ 9.18 $ 12.23 $ 14.79
Slide 30: Free Cash Flow to Net Cash Provided by Operating Activities
Free Cash Flow to Net Cash Provided by Operating Activities Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities Last Twelve Years Ended December 31, Year Ended Six Months Ended Months December 31, June 30, June 30, June 30, In Millions of Dollars 2014 2015 2016 2017 2017 20
Slide 31: Cash and Liquid Investments and Total Liquidity
Cash and Liquid Investments and Total Liquidity Components of Cash and Liquid Investments and Total Liquidity June 30, In Millions of Dollars 2018 Cash and Cash Equivalents and Restricted Cash $ 2,386 Short-Term Investments 933 Repurchase Agreements 554 Cash and Liquid Investments 3,873 Availability
Slide 32: Cash from Operating Activities as a Percent of Average Enterprise Value
Cash from Operating Activities as a Percent of Average Enterprise Value Cash from Operating Activities as a Percent of Average Enterprise Value Last Twelve For the Years Ended December 31, Months June 30, In Millions of Dollars, except share amounts 2014 2015 2016 2017 2018 Cash from Operating Activ
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