Indorama Ventures Public Co. Ltd. · SET:IVL
Indorama Ventures Public — Indorama Ventures — Non-Deal Roadshow (October 2011)
40 slides from Indorama Ventures Public's roadshow presentation, Oct 17, 2011
Slide 1: Indorama Ventures – 'In a league of its own'
Home Home Beverages Apparel Care Textiles Food Pharma Medical Geotextile Investor Presentation Indorama Ventures – ‘In a league of its own’ Arranged by CIMB Securities Europe, September 26-30, 2011
Slide 2: Disclaimer
Disclaimer This presentation contains “forward-looking statements”, which are based on current expectations and projections about future events, and include all statements other than statements of historical facts, including, without limitation, any statements preceded by, followed by or that includ
Slide 3: Agenda
Agenda Company overview Industry overview Corporate strategy Financial highlights Outlook 3
Slide 4: Indorama Ventures Overview
Indorama Ventures Overview Global polyester chain company − Commited capacity of 7.6 million tons − Objective to grow EBITDA >US$ 1.1 billion by 2014 Focused portfolio of industry leading businesses − Globally #1 PET producer − Covering entire spectrum of the fiber industry from commodity to high
Slide 5: Track record of successful growth
Track record of successful growth China Polymers Trevira acquisition, Indorama Germany2 Petrochem, SK acquisition, Thailand Indonesia / Tuntex Poland acquisition, Thailand Invista Dow acquisition acquisition, US / Mexico AsiaPET, Eastman Petform, Alphapet, US Italy1 Thailand Thailand Orion Global, a
Slide 6: Global footprint and economies of scale
Global footprint and economies of scale Rotterdam, Bobingen & Guben, Workington, UK Klaipeda, Lithuania Wloclawek, Poland Netherlands Germany2 • PTA: 377KTA (627KTA by 2014) • PET: 168KTA • Polyester fibers: 120KTA • PET: 241KTA • PET: 153KTA (372KTA by 2014) • PET: 231KTA (442KTA by 2014) • Co-loca
Slide 7: Focused portfolio of industry leading businesses
Focused portfolio of industry leading businesses PET Polyester fibers PTA Business Segment Key Figures • Revenue: US$ 3,002 million • Revenue: US$ 620 million • Revenue: US$ 975 million(1) (LTM Q2’ 2011) • EBITDA: US$ 356 million • EBITDA: US$ 105 million • EBITDA: US$ 156 million(1) • Global soluti
Slide 8: Governance and Leadership
Governance and Leadership Board of Directors S.P. Aloke Suchitra S.P. D.K. Uday Amit Rathian Chakramon Maris William Dr. Siri Kenneth Lohia Lohia Lohia Khaitan Agarwal Gill Lohia Srimongkol Phasukavanich Samaram E. Heinecke Ganjarerndee See Chairman Vice Chairman Director Director Director Director
Slide 9: Strong shareholders support
Strong shareholders support Record of equity fund raising Shareholding structure 2011 Public 2010 2008 Bangkok Bank Lohia family 2005 Note: Data as of 25 August 2011 9
Slide 10: Agenda
Agenda Company overview Industry overview Corporate strategy Financial highlights Outlook 10
Slide 11: Polyester value chain toward fast moving consumer goods
Polyester value chain toward fast moving consumer goods BASIC PETROCHEMICALS POLYESTER VALUE FAST MOVING NATURAL FAST MOVINGCONSUMER GOODS CONSUMER GOODS (FMCG) (FMCG) RESOURCES CHAIN PET resin Personal IPA Beverages Food Home care Pharma care Ethylene Ethylene MEG Ethane Oxide Polyester fiber Home
Slide 12: PTA and Polyester demand growth driven by consumer products
PTA and Polyester demand growth driven by consumer products Global PTA demand (MMt) ~8 % 0- yr CAGR 1 Polyester demand by end-use1 (2010E) f Apparel & Food & Textiles Beverages Global Polyester Polymer demand (MMt) % r C AGR ~7 Medical, Industrial, Auto, Electronics, Others2 10-y 1. Includes film 2.
Slide 13: Significant consumer-driven demand supported by global megatrends
Significant consumer-driven demand supported by global megatrends Economic development Material preference Sustainability Favorable socio-economic trends Material of choice Need for resource efficiency • Population & urbanization growth • Polyester the most preferred • Energy, raw materials, water •
Slide 14: Structural changes underpin on-going demand growth
Structural changes underpin on-going demand growth The most cost effective alternative The lowest carbon footprint Polyester Fiber vs. Cotton prices Polyester Fiber Life Cycle Assessment Price Eqv. ($/kg) Water consumption (kg/unit) CO2 emissions (kg/unit) Upside for polyester – cotton 6 22,200 supp
Slide 15: PET and polyester demand are resilient to economics volatility
PET and polyester demand are resilient to economics volatility Polyester fiber expected to continue to PET expected to continue to gain share replace cotton and other fibers against glass and metal Global Fiber Demand Global Packaging Demand (MMt) 15yr-CAGR (Bn of units) 15yr-CAGR Surpassing glass a
Slide 16: The global polyester chain industry leader
The global polyester chain industry leader The world’s largest polyester producer; Leading PET market positions Globally No 1 PET player in North America and Europe Global Major Polyester Producers (MMt)1 Capacity (MMt) 5 producers 4.9 10 producers 3.3 Top 3 - 90% Top 3 - 60% * IVL Sinopec FarEast M
Slide 17: Proven track record of resilience and stability across cycles
Proven track record of resilience and stability across cycles (US$/Ton)1 Global Integrated PTA/PET Spread (US$/Ton) PTA PET Combined 1. Blended industry spread across three regions, Europe, US, Asia; per 1t of PET Source: CMAI, PCI, SBA CCI, IMF World Economic Outlook Database, IVL Analysis 17
Slide 18: Agenda
Agenda Company overview Industry overview Corporate strategy Financial highlights Outlook 18
Slide 19: Our roadmap to establishing a winning business model
Our roadmap to establishing a winning business model Research & Development Branding & Green Initiatives Western Specialty Scale Assets Emerging Markets Western Commodity PET Presence in Large Markets Pure Commodity Polyester PTA Integration 2010-2014 ‘Undisputable Leadership’ Pure Commodity PET 200
Slide 20: Leveraging our core competencies across geography & products
Leveraging our core competencies across geography & products IVL End Product Strategy ……… Global Leadership ……… Polyester Value Chain G Bottle Fiber Industrial Medical E Sheets Film Grade Grade Grade Grade P O R G O R D A U P PET Polymer C H (core) T I Recycling C Innovation (Sustainability) D PTA (
Slide 21: Operating excellence
Operating excellence Four optimized elements of cost leadership Creating value with every growth initiatives Acquisition Case Study(1) • Greenfield construction of largest and most Scale and efficient plants Eastman PTA & PET 2008 2009 2010 H1-2011 Investment technology • Utilization of latest gener
Slide 22: Innovation is an integral part of IVL's DNA
Innovation is an integral part of IVL’s DNA Strong innovation platform Few examples of innovative products Polyclear® Extrusion blowmolding grade EBM resin can be recycled in the clear PET Resin PET stream OxyClear® Protects the quality, freshness, PET and taste of oxygen-sensitive Resin foods >180
Slide 23: Three-pronged strategy of reduced risk and sustainable growth
Three-pronged strategy of reduced risk and sustainable growth Product Product Diversity − Global leading PET polymer solutions provider covering the entire spectrum of end use markets − PTA acts as building block for the polyester industry and provides the support to polymer business Geographic Di
Slide 24: Agenda
Agenda Company overview Industry overview Corporate strategy Financial highlights Outlook 24
Slide 25: Strong operating performance as we grow…
Strong operating performance as we grow… Production has been growing… …and operating performance remains high Production volume (MT) Capacity utilisation (%) Average: 96% 4,000 3,743 110% 3,500 3,186 100% 99% 98% 2,933 100% 3,000 95% 94% 92% 2,500 90% 2,000 80% 1,500 1,452 70% 1,000 599 60% 500 323
Slide 26: ...Steady growth in revenue and earnings
...Steady growth in revenue and earnings Sales Revenue Reported EBITDA Core Net Profit 64% CAGR 2006 – LTM2Q’11 73% CAGR 2006 – LTM2Q’11 99% CAGR 2006 – LTM2Q’11 (US$ MM) (US$ MM) (US$ MM) Source: Company information Note 1. Average THB/USD: 2006 – 37.94, 2007 – 34.43, 2008 – 33.33, 2009 – 34.32, 20
Slide 27: Well diversified production and earnings
Well diversified production and earnings Production by product Production by region Total Production: Total Production: (million tons) (million tons) Revenue by product Revenue by region Total Revenue: Total Revenue: (US$ MM) (US$ MM) Source: Company data Note: Revenue is net revenue after eliminati
Slide 28: Delivering strong financial returns
Delivering strong financial returns Invested capital / tonne (1) Performance Financial Returns (ROCE) (US$ per tonne) (US$ per tonne) (%) 20% Average = 15% 19% 17% 17% EBITDA / tonne 110 (2009) 15% 14% 14% EBITDA / tonne 136 10% 9% (2010) EBITDA / tonne 5% 173 (6M '11A) EBIT / 0% 2Q,2011 2006 2007 2
Slide 29: Strong capital structure
Strong capital structure Balance sheet – Total Assets Balance sheet – Total Liabilities & Equity (US$ MM) (US$ MM) 670 907 67 1,622 1,838 41 77 456 800 271 350 499 630 1,064 2,451 1,221 1,202 1,998 1,459 1,519 1,718 1,065 507 673 2008 2009 2010 H1‐2011 2008 2009 2010 H1‐2011 Non‐current assets Curre
Slide 30: Increasing cash flow from operations
Increasing cash flow from operations Free Cash Flow 2010 LTM 2Q,2011 (US$ MM) (US$ MM) Note: 1. Free cash flow before capital expenditures 2. Average THB/USD: 2010 – 31.70, LTM 2Q, 2011 – 30.61 30
Slide 31: Disciplined investments aligned with strategic objectives
Disciplined investments aligned with strategic objectives Volume Innovation & Productivity & 2011 - 2014 Project Growth Recycling Integration Rotterdam PET expansion Rotterdam PTA expansion Poland PET expansion Nigeria PET greenfield Indonesia Fiber expansion Polyprima PTA JV acq
Slide 32: Agenda
Agenda Company overview Industry overview Corporate strategy Financial highlights Outlook 32
Slide 33: Improving Spreads from Market Leadership and Innovation
Improving Spreads from Market Leadership and Innovation Product Value Mix and Spreads – 2010-2013F (US$/MT) Premium Sectors 3.5x 2010 Premium Sectors Basic Sectors Basic 1.6x 2010 Sectors Note: Blended delivered spreads weighted to volume and spreads of each product segment Source: Company Data 33
Slide 34: Capital deployment more efficient than budgeted
Capital deployment more efficient than budgeted Core EBITDA Growth - 2009-2013F + ~$350 million In last 2 years + ~$200 million From committed US$ 400 H2 CAPEX US$ 299 million million Committed Investments1 of US$ 1,000 million Accounting 324 435 US$ MM Market leadership and innovation in place to g
Slide 35: Summary
Summary Strong commitment to growing shareholder value Stable and resilient industry and business model Defined strategy to deliver value-driven growth − Global and diversified business model − Generating value through product innovation and sustainability − Diversifying product and customer port
Slide 36: Thank You
Thank You www.indoramaventures.com
Slide 37: Summary Consolidated Financials
Summary Consolidated Financials Income Statement (THB MM) 2006 2007 2008 2009 2010 LTM Q2’11 Sales 18,759 32,345 53,331 79,994 96,858 140,741 COGS 16,563 28,766 48,178 67,666 82,125 120,086 Gross profit 2,196 3,579 5,153 12,328 14,733 20,655 EBIT 1,340 2,036 1,779 7,946 10,445 14,760 Reported EBITDA
Slide 38: Sustained growth and investment
Sustained growth and investment Capacity growth from 1.6MMt in 2008 to 5.4MMt in 2011 Focused growth within Successful global expansion with the Polyester value chain facilities in Asia, North America, Europe Capacity by Business (MMt) Capacity by Geography (MMt) % % + 54 + 54 G R Mt GR t CA .2M CA
Slide 39: IVL is one the top 15 largest public companies in Thailand
IVL is one the top 15 largest public companies in Thailand Market cap of US$5.5 billion IVL Trading Summary Top 15 Stocks on SET by Market Cap US$ bn Total Number 4,814,257,245 Current Share THB 34.75 of Shares shares Price YTD’2011 Par Value THB 1.00 THB 45.43 Avg. Price Market: SET : YTD’2011 THB
Slide 40: Thailand "an integrated oil & petrochemical hub"
Thailand “an integrated oil & petrochemical hub” Organic intermediates Crude oil / Basic Feedstock chemicals Polymers Specialties End products Gas Basic intermediates/ adv. intermediates Caustic soda EDC VCM PVC Salt Chlorine Polyethylenes (LDPE, HDPE, LLDBE) Ethylene Ethylene oxide Ethylene glycol