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 — Q4 2020 Earnings Presentation
25 slides from Alpek, S.a.b. De C.v. Class A's earnings presentation, Feb 11, 2021
Slide 1: Fourth Quarter 2020 Earnings Webcast
FOURTH QUARTER 2020 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. COVID-19 Update II. Financial Performance III. Strategic Projects IV. Our Approach to ESG V. 2021 Guidance 3
Slide 4: COVID-19 Update
COVID-19 Update Feedstock • Lower Crude output & rising demand for refined + Prices products led to higher Crude Oil & Px prices • Positive Inventory Adjustment and RMCF effects during 4Q20 Polyester • Integrated PET Margins remain at normalized = Margins levels & annualized margins above Guidance D
Slide 5: 2020 Financial Highlights
2020 Financial Highlights • Record high overall volume (+10% vs 2019) as a result of resilient PET demand from food & beverage packaging & strong EPS demand from increased e-commerce • Strong performance continued in 4Q20 with Comparable EBITDA excl. RMCF of US$151 million (-2% QoQ) from stronger PP
Slide 6: Volume Evolution
Volume Evolution Alpek Sales Volume (KTon) 2019 +10% 1,260 1,248 4,802 1,184 4,384 1,109 234 +18% 883 P&C 256 • PET volume remained at high 217 176 895 levels as changes to consumer behavior continue favoring hygiene and safety • P&C volume increased mainly from higher demand in e- commerce & acquis
Slide 7: Feedstock Costs
Feedstock Costs Crude Oil and Paraxylene NA Propylene Contract Price NA Px Brent Contract +18% US$/Bbl US$/Ton cpp 80 1,400 45 Crude Oil (Brent) Px 41 40 • Crude oil price increased as its 38 37 38 1,165 1,200 output was lower & demand for 35 35 1,077 35 refined products (gasoline, diesel +4% 31 & j
Slide 8: EBITDA Breakdown
EBITDA Breakdown 4Q20 EBITDA (US$M) 201 • High volume from strong PET & EPS demand 33 173 -2% Others 154 160 9 73 • Polyester Comp. EBITDA excl. 151 9 P&C 46 RMCF of US$81M (-15% QoQ) 32 from slightly lower PET volume & margins 56 66 • Positive RMCF & Inventory Adjustment effects from Px and Propyle
Slide 9: EBITDA Evolution
EBITDA Evolution EBITDA (US$M) -24% 356 US$188M 789 CoGen 231 Sale • Strong 4Q20 Comparable EBITDA 217 722 of US$151M (-2% QoQ) due to -1.9% 601 resilient volume and better-than- 213 expected margins for PP and EPS 173 557 167 189 160 160 517 • 2020 Comparable EBITDA 172 147 149 excluding RMCF1 of U
Slide 10: Free Cash Flow Generation
Free Cash Flow Generation US$M 1,330 565 178 28 1,185 • Financial stability and strong liquidity maintained throughout 2020 162 • Ended 2020 with FCF of US$350M 121 167 (+US$392M vs. Guidance) 99 • NWC +US$167M year-to-date (+US$258M vs. Guidance) • CAPEX of US$162M (-40% vs 2019 & -US$115M vs. Guid
Slide 11: Net Debt & Leverage
Net Debt & Leverage Net Debt (US$M) LTM EBITDA (US$M) Net Debt/EBITDA (Times) 2,036 2.6 794 789 769 701 2.0 2.0 2.0 -4% 624 1.9 1,436 1,428 601 1,330 1.7 1,235 1,185 864 850 821 2.4 735 719 2.1 1.9 565 1.7 1.7 1.6 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 3Q19 4Q19 1Q20 2Q20 3Q20 4
Slide 12: Growth in rPET Capabilities
Growth in rPET Capabilities 207 Up to 120KTA at 60 2020 25% recycled content 132 PolyQuest (Darlington, SC) Cooper River & Cosoleacaque Poseidon 45 Plastics 147 2019 30 (UK) 30 15 15 K Tons Bottle to Flake to Single Pellet Enhanced Total Flake Pellet Technology® Recycling Strengthen Foster Circular
Slide 13: Sharp improvement to ESG ratings
Sharp improvement to ESG ratings B- Risk 30 39 Rating C 44 D 70 30 61 D- 2019 2020 Climate Water 2019 2020 2019 2020 Change D B 39 72 31 66 NA Average Chemicals Percentile Chemicals Percentile 13
Slide 14: 2021 Guidance & Key Assumptions
2021 Guidance & Key Assumptions 2021G 2020 Ch. % Crude Oil US$/Bbl 48.2 42.4 14 Market Asia PTA/PET Margin US$/Ton 245 269 (9) MXN / USD (Avg.) MXN 21.1 21.5 (2) 5% increase excluding NOVA EPS Volume Kton 5,121 4,802 7 Comparable EBITDA1 US$M 561 601 (7) Financials Net Sales US$M 5,633 5,326 6 CAPEX
Slide 15: Q&A
Q&A José de Jesús Valdez José Carlos Pons CEO CFO 15
Slide 16: Appendix
€\\alpek APPENDIX
Slide 17: Disclaimer
Disclaimer This presentation contains, or may be deemed to contain, “forward-looking statements”. By their nature, forward looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The future results of Alpek
Slide 18: Growth Strategy
Growth Strategy Growth Catalysts Details / Description • Global Cost Improvement • Zero Based Budgeting & process innovation (Mainly Operations, Logistics & SG&A) Strengthen • Value-added Products • Shift to products with higher margins & barriers to entry (Copolymers, Grey EPS) Core Business • FCF
Slide 19: Raw Material Carry-forward Effect (RMCF) Breakdown
Raw Material Carry-forward Effect (RMCF) Breakdown 2020 2019 Delta M dls 1Q 2Q 3Q 4Q YTD 1Q 2Q 3Q 4Q YTD 1Q 2Q 3Q 4Q YTD Reported EBITDA 111 74 179 201 565 140 161 194 167 6621 (29) (87) (15) 34 (97) Inventory Adjustment (17) (42) 16 9 (35) (19) (27) (16) (6) (68) 2 (15) 32 14 34 Others 0 6 3 33 42
Slide 20: Relevant References: Crude Oil
Relevant References: Crude Oil Price increased during 4Q20 as demand for refined products rose US$/Bbl Brent Crude Oil Price 120 99 100 80 71 64 60 52 54 44 42 40 20 0 2014 2015 2016 2017 2018 2019 2020 20
Slide 21: Relevant References: Paraxylene
Relevant References: Paraxylene Px prices increased by 4% in line with Crude Oil US$/Ton NA Px Contract Price 2,000 1,708 1,635 1,641 1,500 1,382 1,258 1,282 1,165 1,056 1,100 1,077 992 989 977 955 937 1,000 876 924 924 876 658 685 590 500 0 2011 2012 2013 2014 2015 2016 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2
Slide 22: Integrated PET Margins
Integrated PET Margins 4Q20 margins normalized (-3% QoQ) / Annual margins above Guidance US$/Ton Asian Margins (Px / MEG to PET) 600 China 500 478 393 400 377 370 342 333 324 304 310 300 193 277 276 284 346 275 255 263 248 240 214 250 242 227 223 242 227 238 215 214 164 200 227 208 204 184 202 196 1
Slide 23: Relevant References: Propylene & Polypropylene
Relevant References: Propylene & Polypropylene Increase in both PGP contract prices and PP margins NA Propylene Contract Price (PGP) NA Polypropylene Margin (PP to PGP) cpp cpp 80 76 28 27 71 26 70 69 24 24 22 22 22 22 60 22 21 20 60 54 20 19 50 18 17 45 15 16 41 16 15 39 38 37 38 13 40 35 14 34 35
Slide 24: For Additional Information
For Additional Information Email: IR@alpek.com / Phone: +52 (818) 748-1146 Alejandro • 9 Years at Alfa/Alpek Elizondo • Previously held roles as Director of Logistics & Procurement at Indelpro, Director of Energy Markets at IRO Alfa, and Project Leader at The Boston Consulting Group • BS in Industri
Slide 25: Fourth Quarter 2020 Earnings Webcast
FOURTH QUARTER 2020 EARNINGS WEBCAST