31 slides from Lyondellbasell Industries Nv's conference presentation, Nov 27, 2018
Slide 1: Citi Basic Materials Conference
Citi Basic Materials Conference Thomas Aebischer CFO November 27, 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: LyondellBasell: A Strong, Global Company Delivering Outstanding Performance
LyondellBasell A Strong, Global Company Delivering Outstanding Performance GLOBAL $47 billon enterprise value(1) Manufacturing in 24 countries and our products are sold in more than 100 countries LEADING(2) Producer of Producer of Producer of polyethylene in polypropylene in propylene oxide Europe N
Slide 4: LyondellBasell 3Q 2018 Last Twelve Months
LyondellBasell 3Q 2018 Last Twelve Months Delivering Advancing Capturing Results Growth Opportunity Refinery Reliability Continued evaluation of Completed acquisition of $ 5.9 billion Braskem Capturing A. Schulman Net Income opportunity Margin Premium Polyolefin New Monetizing $ 7.4 billion Recyclin
Slide 5: LYB Portfolio Diversity Increases Earnings Resiliency
LYB Portfolio Diversity Increases Earnings Resiliency Segment EBITDA O&P - AM, O&P - EAI and APS EBITDA I&D, Refining and Technology EBITDA Stable: USD, millions $6,000 Global Portfolio 4,000 Improved: 2,000 I&D performance Refining operations 20 16 20 16 20 17 20 17 3Q 18 L TM 3Q 18 L TM 2016 2017
Slide 6: Advanced Polymer Solutions: Creating a New Platform for Growth
Advanced Polymer Solutions: Creating a New Platform for Growth 2017 Sales Volume(1) 2017 EBITDA(2) A. Schulman PE + PP PPC Catalloy & Catalloy & PB-1 PB-1 A. Schulman PE + PP PPC,Catalloy PPC, Catalloy& and PB-1PB-1 lbs., billions USD, billions 16 $3.0 EBITDA shift to Product shift to new segment ne
Slide 7: Advanced Polymer Solutions: A New Segment Focusing on Broad and Attractive Markets
Advanced Polymer Solutions: A New Segment Focusing on Broad and Attractive Markets Compounding & Solutions Advanced Polymers Polypropylene Masterbatch Catalloy Compounds Engineered Engineered Polybutene-1 Composites Plastics Custom Specialty Performance Powders Colors www.lyondellbasell.com 7
Slide 8: Olefins & Polyolefins - Americas: Strong Demand Fundamentals Support Polyolefin Chain Margins
Olefins & Polyolefins - Americas: Strong Demand Fundamentals Support Polyolefin Chain Margins EBITDA History Key Messages USD, millions $3,000 ▪ Proven operational reliability 2,000 ▪ U.S. feedstock advantaged 1,000 ▪ Strong earnings and cash generator in diverse market 2016 2017 3Q18 LTM 2017 Produ
Slide 9: Cracker Flexibility & Midstream Investment: Expected to Reduce Ethane Price Volatility by 2020
Cracker Flexibility & Midstream Investment: Expected to Reduce Ethane Price Volatility by 2020 Gulf Coast Ethane Demand & Supply from Fractionation Recent Mont Belvieu ethane price volatility ~ 25 - 60 ¢/gal Flexible Ethane Demand Minimum Ethane Demand Ethane Supply from Fractionation Aggravating fa
Slide 10: LyondellBasell Flexibility & Business Portfolio Reduces Ethane Impacts
LyondellBasell Flexibility & Business Portfolio Reduces Ethane Impacts Advantaged N. American Cracker Fleet: LYB U.S. Gulf Coast Feedstock Flexibility(1) ▪ Gulf Coast crackers ▪ High feedstock flexibility Ethane ▪ Midwest crackers ▪ Low priced Conway feedstock Propane / Butane Naphtha Annual EBITDA
Slide 11: 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 La Porte Hyperzone HDPE Estimate World Scale Plants (1) ▪ 1.1 bill
Slide 12: Olefins & Polyolefins – Europe, International and Asia
Olefins & Polyolefins – Europe, International and Asia: Leveraging O&P Restructuring in a Diverse Market EBITDA History Key Messages USD, millions ▪ Capacity leader in European polyethylene $3,000 and polypropylene 2,000 ▪ Stable portfolio of wholly-owned and joint venture assets 1,000 ▪ Modestly gr
Slide 13: Intermediates and Derivatives: Structural Changes and Reliable Operations Capturing Opportunities
Intermediates and Derivatives: Structural Changes and Reliable Operations Capturing Opportunities EBITDA History Key Messages USD, millions ▪ Improved contracting strategies $3,000 2,000 ▪ Broad product portfolio with feedstock integration 1,000 ▪ Leading market positions and differential technologi
Slide 14: 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 technol
Slide 15: Refining: Improved Reliability Producing Results
Refining: Improved Reliability Producing Results EBITDA Refinery Outlook USD, millions $500 ▪ Improved reliability since 2017 400 ▪ Increased profitability driven by strong diesel demand and improved heavy/light crude 300 differentials 200 ▪ Full capability to meet Tier 3 gasoline sulfur specificati
Slide 16: Strong, Consistent Cash Generation
Strong, Consistent Cash Generation LYB Cash From Operating Activities ■ 3Q18 LTM Capex: $1.8 billion USD, millions Free Cash Flow Capex $7,000 6,000 ■ 3Q18 LTM Free Cash Flow(1): $3.8 billion 5,000 4,000 3,000 ■ 3Q18 Ending Total Liquidity(2): $5.3 billion 2,000 1,000 2014 2015 2016 2017 3Q18 LTM Ca
Slide 17: 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 18: 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 19: 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 20: Appendix
Appendix www.lyondellbasell.com 20
Slide 21: 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 22: 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 23: Majority of New N. American Industry Capacity Already in the Market
Majority of New N. American 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 ▪ New PE capacity is in the market ~ 65% of 19 Blbs of Polyethylene ▪ PE exports are expected
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 EBITDA, LTM Adjusted EBITDA and LTM Adjusted EBITDA
Slide 25: Enterprise Value
Enterprise Value Calculation of Enterprise Value September 30, In Millions of Dollars, except share amounts 2018 Common Shares Outstanding 387,177,776 Closing Price $ 102.51 Market Capitalization 39,690 Current Maturities of Long Term Debt $ 984 Short-Term Debt 214 Long-Term Debt 7,471 8,669 Redeema
Slide 26: EBITDA by Segment to EBITDA
EBITDA by Segment to EBITDA Reconciliation of EBITDA by Segment to EBITDA For the Year For the Year For the Year Last Twelve Ended Ended Ended For the Nine Months Ended Months December 31, December 31, December 31, September 30, September 30, September 30, In Millions of Dollars 2016 2017 2017 2017
Slide 27: Net Income to EBITDA
Net Income to EBITDA Reconciliation of Net Income To EBITDA For the Year Last Twelve For the Years Ended Ended For the Nine Months Ended Months December 31, December 31, December 31, December 31, December 31, September 30, September 30, September 30, In Millions of Dollars 2014 2015 2016 2017 2017 2
Slide 28: Free Cash Flow Yield
Free Cash Flow Yield Calculation of Free Cash Flow Yield Three Months Ended Last Twelve December 31, March 31, June 30, S eptember 30, S eptember 30, In Millions of Dollars (except share data) 2017 2018 2018 2018 2018 Net Cash Provided by Operating Activities $ 1,482 $ 1,006 $ 1,727 $ 1,441 $ 5,656
Slide 29: Cash and Liquid Investments and Total Liquidity
Cash and Liquid Investments and Total Liquidity Components of Cash and Liquid Investments and Total Liquidity S eptember 30, In Millions of Dollars 2018 Cash and Cash Equivalents and Restricted Cash $ 532 Short-Term Investments 944 Repurchase Agreements 550 Cash and Liquid Investments 2,026 Availabi
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 Nine Months Ended Months (a) December 31, S eptember 30, S eptember 30, S eptember 30, In Millions of Dollars 2014
Slide 31: 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 September 30, In Millions of Dollars, except share amounts 2014 2015 2016 2017 2018 Cash from Operating