Lyondellbasell Industries Nv · NYSE:LYB
Lyondellbasell Industries Nv — Q4 2017 Earnings Presentation
28 slides from Lyondellbasell Industries Nv's earnings presentation, Feb 2, 2018
Slide 1: Fourth Quarter 2017 Earnings
Fourth Quarter 2017 Earnings February 2, 2018 www.lyondellbasell.com Company confidential
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 ri
Slide 3: 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 income from continuing operations excluding LCM, di
Slide 4: LyondellBasell in 2017
LyondellBasell in 2017 Delivering Advancing Capturing Results Growth Opportunity $ 4.9 billion Improving Income from Continuing Refinery Operations Groundbreaking Final Reliability for 1.1 B lb Investment $ 7.1 billion Hyperzone Decision for EBITDA HDPE World’s Largest (+8% vs 2016) PO/TBA Plant Tec
Slide 5: Top Tier Safety Performance: A Core Value for LyondellBasell
Top Tier Safety Performance: A Core Value for LyondellBasell Safety - Injuries per 200,000 Indexed Environmental Indexed Process Safety Hours Worked(1) Incidents Incidents(1) 0.8 ACC Average 200% 300% ACC Average 0.7 250% 0.6 150% 200% 0.5 0.4 100% 150% 0.3 100% 0.2 50% 50% 0.1 2013 2014 2015 2016 2
Slide 6: 2017 EBITDA: FY17 +8% and 4Q17 +23% over prior year
2017 EBITDA: FY17 +8% and 4Q17 +23% over prior year As Reported As Reported ($ in millions, except per share data) 4Q16 3Q17 4Q17 FY 2016 FY 2017 EBITDA $1,406 $1,821 $1,726 $6,602 $7,134 Income from Continuing Operations $770 $1,058 $1,898 $3,847 $4,895 Diluted Earnings ($ / share) from Continuing
Slide 7: Volume Improvements Delivered in 2017
Volume Improvements Delivered in 2017 Ethylene Derivative Ethylene Production Crude Processing Rate Production(1) lb, billions lb, billions BPD, thousands 16.0 12.0 270 Harvey 14.0 Corpus 11.0 240 Expansion Harvey Harvey 12.0 10.0 210 10.0 9.0 180 8.0 8.0 150 2016 2017 2016 2017 2016 2017 2016 – Hea
Slide 8: Fourth Quarter 2017 and Full Year 2017 Segment EBITDA
Fourth Quarter 2017 and Full Year 2017 Segment EBITDA Fourth Quarter 2017 FY 2017 (USD, millions) EBITDA Op. Income (USD, millions) EBITDA Op. Income As Reported $1,726 $1,341 As Reported $7,134 $5,460 Fourth Quarter 2017 EBITDA FY 2017 EBITDA USD, millions USD, millions $800 $3,200 600 2,400 400 1,
Slide 9: Strong Operations Generating Substantial Cash Flow
Strong Operations Generating Substantial Cash Flow Fourth Quarter 2017 FY 2017 USD, millions USD, millions $5,000 $9,000 7,500 4,000 6,000 3,405 3,000 3,067 4,500 2,000 3,000 3,405 2,394 1,000 1,500 (1) (2) (1) (1) (2) (1) 4Q1 7 Cash from CAPEX Divi dends & Chang e in Other 4Q1 7 1Q1 7 Cash from CAP
Slide 10: Cash Generation Funding Growth Investments and Shareholder Returns
Cash Generation Funding Growth Investments and Shareholder Returns Sources and Uses of Cash USD, millions Cash from Operating Activities Dividends Capex Share Repurchases $10,000 8,000 6,000 4,000 2,000 2013 20132013 2014 20142014 2015 2015 2015 2016 2016 2016 2017 2017 2017 Key Statistics for 2017
Slide 11: LyondellBasell Earnings Benefit from U.S. Tax Reform
LyondellBasell Earnings Benefit from U.S. Tax Reform 4Q 2017 Benefit(1) Substantial U.S. Earnings Future Benefits ■ $819 million one-time, 2017 Pre-tax Income LYB Effective Tax Rate(2) non-cash benefit from remeasurement of deferred by Geography 30% tax assets and liabilities at 25.8% lower tax rate
Slide 12: Olefins and Polyolefins – Americas
Olefins and Polyolefins – Americas Tight Markets Persist Following Hurricane Harvey EBITDA (ex. LCM) 4Q17 Performance vs. 3Q17(1) USD, millions As Reported Excluding LCM EBITDA Margin Volume $1,000 U.S. Olefins ▪ Ethylene margin up 5 ¢/lb 800 ▪ Volume up post Harvey 600 Polyethylene 400 ▪ Spread up
Slide 13: 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 14: Olefins and Polyolefins – Europe, Asia, and International
Olefins and Polyolefins – Europe, Asia, and International Rising Crude Oil Prices Pressuring Ethylene Margins EBITDA 4Q17 Performance vs. 3Q17(1) USD, millions EBITDA Margin Volume $800 EU Olefins ▪ Ethylene margin down due to increased feedstock costs 600 Polyethylene 400 ▪ Seasonal demand reductio
Slide 15: Intermediates and Derivatives Strong, Consistent Operations and Earnings
Intermediates and Derivatives Strong, Consistent Operations and Earnings EBITDA 4Q17 Performance vs. 3Q17(1) USD, millions EBITDA Margin Volume $500 Propylene Oxide and Derivatives ▪ Margins and volume up post 400 Harvey 300 Intermediate Chemicals 200 100 Oxyfuels & Related Products ▪ Seasonal margi
Slide 16: Refining Upward Trajectory in Operations and Profitability
Refining Upward Trajectory in Operations and Profitability EBITDA 4Q17 Performance vs. 3Q17(1) USD, millions EBITDA Margin Volume $150 Houston Refinery ▪ Crude throughput: 245 MBPD ▪ Maya 2-1-1 down $1.55 to $20.26, 100 and Lt-Hvy (LLS-Maya) spread up $2.86 to $7.96 50 -50 4Q16 1Q17 2Q17 3Q17 4Q17 R
Slide 17: Our Strategy Can Generate Value by Leveraging Skills and Strengths
Our Strategy Can Generate Value by Leveraging Skills and Strengths 2010 2017 BEYOND 1. 2. 3. 4. SUSTAINABLE FORMATION ESTABLISHMENT DEVELOPMENT GROWTH Build on Success and Skills Rapid Capture of Latent Opportunities Optimize Footprint Establish and Stabilize Culture and Systems Increase Manage Cost
Slide 18: Increasing Investment in LyondellBasell's Organic Growth
Increasing Investment in LyondellBasell’s Organic Growth Estimated EBITDA(1) Scope Projected CAPEX ($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 19: 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 20: Global Polypropylene Market Growing Faster than Polyethylene
Global Polypropylene Market Growing Faster than Polyethylene Projected PP Growth by Region Global PP Supply & Demand 2018-2020 Capacity Demand Effective Operating Rate 2018-2020 2018-2020 Average lb, billions Capacity Demand Annual 250 95% Growth Growth Demand (Blb.) (Blb.) Growth China 9.9 11.4 6%
Slide 21: 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 22: 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 23: 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 24: Capturing Opportunities that Build on our Strengths and Skills
Capturing Opportunities that Build on our Strengths and Skills Intermediates Performance Electronic Bio Olefins & Well Head Midstream Refining & & & & Aromatics Polymers Eng. Resins Specialty Pharma Ethylene Compounding Seeds Handling Propylene PE, PP, PO Pharmaceuticals Gasoline Catalloy Crude Oil
Slide 25: Creating Opportunities with LyondellBasell's Innovation
Creating Opportunities with LyondellBasell’s Innovation Leading Global Position in Polymer Compounding Innovative Materials for Transportation Serving the global market with products that: ■ Reduce vehicle weight for ICE fuel efficiency ■ Improve performance and range of EVs ■ Enable recycling of in
Slide 26: 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 27: LyondellBasell 2017 Summary and Outlook
LyondellBasell 2017 Summary and Outlook 2017 Summary Near-Term Outlook ■ Annual diluted EPS of $12.28 ■ Strong global markets supported by capacity delays and increased Chinese demand ■ Annual EBITDA of $7.1 billion ■ Continued strong operating performance in all businesses with regular cadence of p
Slide 28: Investor Reception 2018: Save the Date
Investor Reception 2018: Save the Date LYB Investor Reception | March 21,2018 | Houston, TX LyondellBasell will hold an Investor Reception on the evening of Wednesday March 21, 2018, during the IHS World Petrochemical Conference in Houston. This is a valuable opportunity to meet with members of our
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