LyondellBasell Industries NV · NYSE:LYB
LyondellBasell Industries NV — Debt Investor Presentation (April 2008)
56 slides from LyondellBasell Industries NV's debt investor presentation, April 2008
Slide 1: Senior Secured Credit Facility Presentation
Senior Secured Credit Facility Presentation A new global leader | www.lyondellbasell.com | 1 A new global leader | www.lyondellbasell.com |
Slide 2: Safe Harbor and Additional Information
Safe Harbor and Additional Information 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
Slide 3: Agenda
Agenda I Introduction II Credit Considerations / Financial Overview III LyondellBasell Industries Business Review IV Financing Overview V Summary A new global leader | www.lyondellbasell.com | 3 A new global leader | www.lyondellbasell.com |
Slide 4: Meeting Participants
Meeting Participants • 2007: Appointed LyondellBasell Industries CEO • 2000: Appointed Basell’s President and CEO at time of formation Volker Trautz Chief Executive Officer • 1995 – 2000: Member of the Board of Executive Directors of BASF and responsible for BASF’s polymer activities and the Asian r
Slide 5: Key Credit Considerations
Key Credit Considerations • A Leading Global Polymers, Petrochemicals and Refining Company • Global Scale and Diversity • Market Leadership • Significant Synergy Creation • Financial Strength • Experienced Management Team A new global leader | www.lyondellbasell.com | 5 A new global leader | www.lyo
Slide 6: Basell and Lyondell Historical Financial Summary
Basell and Lyondell Historical Financial Summary Revenue ($bn) Adjusted EBITDA ($bn) $20 $2.0 $16 $1.5 $12 Basell $1.0 $8 13.3 1.3 10.7 1.0 8.4 $0.5 $4 6.5 0.8 0.4 $0 $0.0 2003 2004 2005 2006 2003 2004 2005 2006 Revenue ($bn) Adjusted EBITDA ($bn) $30 $4.0 $25 $3.2 Lyondell $20 24 $2.4 $15 2.8 20 $1
Slide 7: 2007 Financial Results
2007 Financial Results Revenue ($bn) CapEx ($bn) $50.0 $1.0 $40.0 $0.8 $30.0 $0.6 44.7 0.9 $20.0 $0.4 28.6 0.5 $10.0 17.1 $0.2 0.4 $0.0 $0.0 LyondellBasell Lyondell Pro forma LB LyondellBasell Lyondell Pro Forma LB Industries Industries Adjusted EBITDA ($bn) Considerations $6.0 0.4 • Legacy Lyondell
Slide 8: Capital Structure
Capital Structure • All cash transaction for approximately $20.9bn, including Capitalization Table refinancing of existing debt of $8.0bn and $460mm of transaction costs ($ equivalent in millions) 31-Dec-2007 31-Mar-08 • Merged company statistics Cash $560 $818 ¾ 2007 PF revenues - $44.7bn Revolver
Slide 9: LyondellBasell Industries Financial Policies
LyondellBasell Industries Financial Policies • Dedicate excess cash to debt reduction • Manage capital expenditures with a disciplined CapEx program ¾ Base: Maintain assets / HSE / standards ¾ Growth: Limited to high growth / margin opportunities − Asia / Middle East − Leverage technology • Aggressi
Slide 10: Backed by Long-term, Strategic Investor
Backed by Long-term, Strategic Investor • Access Industries, founded in 1986 by Len Blavatnik, Chairman and principal shareholder, is a privately held, U.S. based industrial group with holdings worldwide • Long-term, strategic investor focused on building world scale, world class businesses Date of
Slide 11: A Leading World Scale Company
A Leading World Scale Company $100 Revenue EBITDA $90 $80 $70 $60 ($ bn) $50 $40 $30 $20 $10 $0 BASF Dow LB1 Ineos SABIC PF Akzo / DuPont Bayer3 Formosa Hexion / Chevron Chemical Industries Group ICI2 Plastics Huntsman Philips Group4 Chemical Source: Publicly available financials, Capital IQ Note: C
Slide 12: Fuels, Chemicals, Polymers, Technology Products
FUELS CHEMICALS POLYMERS TECHNOLOGY Products Products Products Products • Gasoline • Ethylene • Polyethylene • Process Licensing • Diesel • Propylene • Polypropylene • Catalyst Sales • Oxyfuels • Propylene & Ethylene • Compounds • Technology Services Oxide • Catalloy Process • Olefins Feed • New Ven
Slide 13: LyondellBasell Segment Comparisons
LyondellBasell Segment Comparisons Legacy Lyondell Legacy Basell EC&D APO Polymers Polymers Polymers Olefins PP & PE Other Chemicals Olefins PORP Technology PO/SM Chain OxyFuels Fuels Refining Houston Refining Technology A new global leader | www.lyondellbasell.com | 13 A new global leader | www.lyo
Slide 14: Leading Positions and Extended Geographic Presence
Leading Positions and Extended Geographic Presence 2007 Revenues Including JVs JVs ROW North Europe America Global Position1 Polymers Legacy Basell Manufacturing Sites and JVs Polyolefins #1 Legacy Lyondell Manufacturing Sites and JVs Polyolefin Licensing #1 Polyolefin Catalysts #1 Fuels • Global ge
Slide 15: Diverse End Markets Reduce Volatility
Diverse End Markets Reduce Volatility Building Refining / & Construction Fuels Transportation Textiles / Furnishings Consumer Packaging Other Note: Estimated based on 2006 revenues A new global leader | www.lyondellbasell.com | 15 A new global leader | www.lyondellbasell.com |
Slide 16: Significant Synergy Achievable by 2010
Significant Synergy Achievable by 2010 Integration Plan Focused On Three Major Areas Integration Plan Potential EBITDA Impact: $420mm Cost Savings Operational Improvements Profit Enhancement Potential EBITDA Potential EBITDA Potential EBITDA Impact: $204mm Impact: $146mm Impact: $71mm A new global l
Slide 17: Improved Operating Profile
Improved Operating Profile EBITDA 2001-2003¹ Fuels Chem icals Polym ers Technology JV Synergies New Future Dividends Acquisitions Trough • Consolidation • Added • Polymer • Strong catalyst • Restructured • Cost savings • Berre Refinery of refinery acetyls, capacity sales continue JV portfolio • Oper
Slide 18: Strategic Themes for LyondellBasell Industries
Strategic Themes for LyondellBasell Industries • Participate in petrochemicals from refining through to specialized end uses Value Chain • Extract value from optimization across fuels, chemicals and polymers Integration • Upgrade cost-advantaged feedstocks using superior refinery and cracker flexibi
Slide 19: Capturing Value Along the Chain
World Scale Diversified and Vertically Integrated Portfolio Wellhead Crude NGLs Refining Refining Capturing Value Along the Chain Fuels, Olefins Olefins Crackers Olefins Aromatics Olefin Propylene Ethylene Oxy Polyethylene Polypropylene Polybutene Acetyls Styrene Derivatives Oxide Oxide Fuels Second
Slide 20: Diversified Portfolio Provides a Balanced Earnings Profile
Diversified Portfolio Provides a Balanced Earnings Profile 2007 Pro Forma Adj. Category Business Characteristic EBITDA $5.7Bn¹ Olefins Cyclical Olefins / Cost / Flexibility Driven Fuels Polyolefins Polyolefins Polyolefin Differentiation Polymers Advanced Polyolefins Customer Driven Technology Techno
Slide 21: Fuels
Fuels 2007 Pro Forma Adj. Characteristics Opportunities EBITDA $1.8Bn¹ • Refinery Complexity / Heavy • Regional Optimization Crude Processing Oxyfuels • Different Cycle • Best Practices • High Capital Intensity • Purchasing • Tightened Market • Chain Margin Optimization Refining • Limited New Capaci
Slide 22: Market Dynamics Have Created a Very Positive Environment
Market Dynamics Have Created a Very Positive Environment Global Refining Is Essentially Sold Out At 90 Turner Mason 2008 - 2014 Refining Supply / Percent Utilization Demand Growth Grassroots Expansion 40% 14 14 USGC WTI 2-1-1 Crack Spread ($/bbl) 35% 12 12 Low 30% 10 MM B/D Refining Spread 10 Spare
Slide 23: Strong Refining Margins
Strong Refining Margins 35 W TI-Maya W TI 211 30 Heavy crude refining 25 spreads have been (US$/bbl) 20 strong 15 10 5 0 2005 2006 Q107 Q207 Q307 Q407 Jan08 Feb08 Mar08 Source: Platts 40 W TI - Maya Spread W TI 2-1-1: Gulf Coast Crack Spread 35 30 (US$/bbl) 25 Visible strong 20 profitability in refi
Slide 24: Oxyfuels Spreads Have Been Strong
Oxyfuels Spreads Have Been Strong US MTBE Raw Material Margin EU ETBE Raw Material Margin 100 80 60 Cents / Gal 40 20 0 -20 Q107 Q207 Q307 Q407 Feb08 Q207 Q307 Q407 Feb08 Jan08 Mar08 Q107 Jan08 Mar08 2005 2006 2005 2006 Source: Platts A new global leader | www.lyondellbasell.com | 24 A new global le
Slide 25: Chemicals – Olefins, Propylene Oxide, and Intermediates
Chemicals – Olefins, Propylene Oxide, and Intermediates 2007 Pro Forma Ethylene Capacity Ethylene Oxide Capacity Styrene Capacity World Total: 276bn lbs World Total: 46bn lbs World Total: 65bn lbs Adj. EBITDA $1.6Bn¹ LB Industries LB Industries LB Industries Exxon Formosa BASF Shell Shell SABIC SABI
Slide 26: Well Integrated Business Chains
Well Integrated Business Chains World North America Europe 20,000 15,000 Mm Lbs 10,000 5,000 0 Ethylene Propylene Ethylene Propylene Ethylene Propylene Production Consumption Source: LyondellBasell Industries. Includes proportional share of Lyondell JVs. Excludes legacy Basell JVs A new global leade
Slide 27: Global Operating Rates Decline But Forecasts Remain at 90%
Global Operating Rates Decline But Forecasts Remain at 90% Global Ethylene Supply / Demand Balance 200 100% European Operating Rate 95% 175 90% NAM Operating Rate 85% Effective Operating Rate World Operating Rate 150 80% MM Metric Tons 75% 125 70% Nameplate Capacity World Demand 65% 100 60% 55% 75 5
Slide 28: North American Cracker Margins Impacted by Crude Oil Prices
North American Cracker Margins Have Been Significantly Impacted by Crude Oil Price Increases North America North America Europe Naphtha Ethane Naphtha 25 Ethylene minus COE (¢/lb) 20 15 10 5 0 2005 2006 Q107 Q207 Q307 Q407 Q108 2005 2006 Q107 Q207 Q307 Q407 Q108 2005 2006 Q107 Q207 Q307 Q407 Q108 So
Slide 29: Current Positions Remain Competitive
Current Positions Remain Competitive European Supply Economics U.S. Supply Economics Asia Supply Economics 70 60 Cents / Lb Polyethylene 50 40 30 20 10 0 US US pe ne ne ne a a a th th th ro ha ha ha ph ph ph Eu Et Et Et Na Na Na Middle East Middle East Middle East Variable Costs Fixed Costs Freight
Slide 30: Middle East Production to Reach 21% by 2011
Middle East Production to Reach 21% by 2011 2007 Middle East as % of World Production 2011 Middle East as % of World Production Middle East 11.2% Middle East 20.8% Other W orld Other W orld Production Production 79.2% 88.8% Source: 2007 CMAI World Light Olefins Analysis A new global leader | www.lyo
Slide 31: Chemicals - Propylene Oxide and Intermediate Chemicals
Chemicals - Propylene Oxide and Intermediate Chemicals Propylene Oxide Capacity Share Characteristics Opportunities Propylene Oxide Capacity World Total: 17bn lbs • Proprietary Technology • Participation In Global Projects / JVs • Solid Growth • Benefit From End Use Knowledge LB Industries Shell / B
Slide 32: Global Propylene Oxide Demand Continues to Grow
Global Propylene Oxide Demand Continues to Grow Global Propylene Oxide Balances Indicate Continued Tightness 100% 24 Operating Rate 22 90% 20 18 80% 16 Operating Rate Lbs/yr Demand B lbs/yr 14 12 70% bn 10 60% Capacity 8 6 4 50% 2 0 40% 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 200
Slide 33: Propylene Oxide and Intermediate Chemical Margins Good and Steady
Propylene Oxide and Intermediate Chemical Margins Have Been Good and Generally Steady Propylene Oxide and Derivatives Ethylene Oxygenates Propylene Glycol Raw Material Ethylene Glycol Raw Material Margin Margin 70 60 50 (cents/lb) 40 30 20 10 0 2005 2006 Q107 Q207 Q307 Q407 Jan08 Feb08 Mar08 2005 20
Slide 34: Polymers – PP, PE and APO
Polymers – PP, PE and APO 2007 Pro Forma Polypropylene Capacity Polyethylene Capacity Advanced Polyolefins Capacity World Total: 107bn lbs World Total: 170bn lbs World Total: 6.6bn lbs Adj. EBITDA $1.4Bn1 LB Industries LB Industries LB Industries Dow Others Others Sinopec Others Exxon Polyolefin Mit
Slide 35: Polyolefin Supply / Demand Tends to Correlate With Olefins
Polyolefin Supply / Demand Tends to Correlate With Olefins Polypropylene Supply / Demand Balance Polyethylene Supply / Demand Balance (bn lbs) (bn lbs) 250 100% 300 100% 200 80% 240 80% Global Operating Rate Global Operating Rate 150 60% 180 Demand 60% Demand Nameplate Capacity 100 40% 120 40% Namep
Slide 36: Polymer-Monomer Relative Spreads Have Generally Been Good
Polymer-Monomer Relative Spreads Have Generally Been Good (FY2005 = 100) North America (US$) Western Europe (US$) 200 150 PE - Ethylene Spread 100 50 0 Q107 Q207 Q307 Q407 Q108 Q107 Q207 Q307 Q407 Q108 2005 2006 2005 2006 200 150 PP - Propylene 100 Spread 50 0 Q107 Q207 Q307 Q407 Q108 Q107 Q207 Q307
Slide 37: Polymers JVs Deliver Value with Low Capital Intensity
Polymers JVs Deliver Value with Low Capital Intensity • Nine JVs Cash Dividends ¾ Partner in more than 5.5bn lbs of olefins/polyolefins $150 capacity • LTM 12/31/07 Results $125 ¾ $148mm cash dividends • JVs Even More Important Going Forward $100 ¾ Contribution to global presence $75 ¾ Access to adv
Slide 38: Polymers - Advanced Polyolefins
Polymers - Advanced Polyolefins Characteristics Opportunities • High Growth with Good • Shift Commodity to Specialty Margins ¾Margin Growth 2002 - 2007 Volume Growth Rate: • Customer Specified / • Application of Knowledge to Differentiated Products Chemical Derivatives 7.0% CAGR • Less Cyclical • As
Slide 39: Technology
Technology 2007 Pro Forma Adjusted Characteristics Opportunities EBITDA $269mm1 • Strong Visibility on Cash Flows • Exploit Lyondell Portfolio • High Margin • Broader Product Participation 2007 EBITDA Margin: 54% • Low Capital Intensity • Technology Transfer • Leverage ¾License Leading Position In P
Slide 40: 1st Quarter 2008 Update
1st Quarter 2008 Update • Fuels: Overall on plan ¾Refining: Spreads at Q1 record levels ¾Oxy-fuels: Strong Q1 margin • Chemicals: Behind plan ¾Olefins: – Liquid crackers: Squeezed; essentially no margin – Gas crackers: OK ¾Propylene Oxide and Intermediates: Ahead of plan • Polymers: Similar to last
Slide 41: Key Credit Considerations
Key Credit Considerations • Merger Creates Leading Global Polymers, Petrochemicals and Refining Company ¾ $45 billon pro forma revenues1 ¾ $5.7 billion pro forma Adj. EBITDA1 ¾ $40 billion book assets • Global Scale and Diversity ¾ Third largest independent chemical company in the world ¾ Geographic
Slide 42: Capital Structure
Capital Structure • All cash transaction for approximately $20.9bn, including Capitalization Table refinancing of existing debt of $8.0bn and $460mm of transaction costs ($ equivalent in millions) 31-Dec-2007 31-Mar-08 • Merged company statistics Cash $560 $818 ¾ 2007 PF revenues - $44.7bn Revolver
Slide 43: Minimal Near Term Maturities - $2.2bn Available Liquidity
Minimal Near Term Maturities - $2.2bn Available Liquidity¹ PF 3/31/2008 Maturity Profile ($m) Liquidity Position ($m) 10,000 2,500 Other Debts Liquidity Facilities Utilized Available 8,000 2,000 6,000 1,500 4,000 1,000 2,000 500 0 0 Cash ABL Facility 2010¹ 2012¹ 2008 2009 2011 2013 2014 2015 Revolve
Slide 44: Summary Corporate Structure
Summary Corporate Structure Restricted group under the Senior Secured Credit AI Petrochemicals Facilities, Senior Secured 2nd Lien Bridge, and Access LLC (1) Revolving Credit Facility (7) LyondellBasell Industries AF S.C.A. €500 million and $615 million 2015 Notes (2) Basell Funding Access Revolving
Slide 45: Financing Overview: Senior Secured Credit Facilities
Financing Overview Summary of Terms and Conditions Senior Secured Credit Facilities Facility: Revolver Term Loan A Term Loan B1 Term Loan B2 Term Loan B3 Borrower: LCC¹, Basell Finance, Basell Basell Holdings BC, LCC Basell German Holdings / LCC Basell German Holdings / LCC Basell German Holdings /
Slide 46: Financing Overview: ABL Facility
Financing Overview Summary of Terms and Conditions ABL Facility Facility: Asset Based Credit Facility Borrowers/Sellers: Lyondell Chemical Company, Equistar Chemicals, LP, Houston Refining LP, Basell USA Inc. Structure: $2.75 billion Asset-Based Loan Facilities, consisting of a $1.15 billion Receiva
Slide 47: Financing Overview: Second Lien Bridge
Financing Overview Summary of Terms and Conditions Second Lien Bridge Issue: Senior Second Lien Bridge Issuer: LyondellBasell Finance Company Amount: $8,000 million Maturity: 1 year Current Pricing: L + 462.5 with quarterly step ups Use of Proceeds: Purchase of Lyondell and Fees & Expenses Security:
Slide 48: Syndication Calendar
Syndication Calendar April 2008 May 2008 S M T W T F S S M T WT F S 1 2 3 4 5 1 2 3 6 7 8 9 10 11 12 4 5 6 7 8 9 10 13 14 15 16 17 18 19 11 12 13 14 15 16 17 20 21 22 23 24 25 26 18 19 20 21 22 23 24 27 28 29 30 25 26 27 28 29 30 31 Shading denotes a US and European holiday Date Event 30-April-2008
Slide 49: Questions and Answers
Questions and Answers A new global leader | www.lyondellbasell.com | 49 A new global leader | www.lyondellbasell.com |
Slide 50: Basell EBITDA Adjustments
Basell EBITDA Adjustments Adjusted EBITDA Basell (Millions of Dollars) Year Ended 31-December 2001 2002 2003 2004 2005 2006 EBITDA 195 480 386 776 977 1,304 Adjustments¹² 0 0 0 0 (19) (47) Adjusted Basell EBITDA 195 480 386 776 958 1,257 Dividends from JVs and Associates 31 33 21 32 66 42 Total Adju
Slide 51: Lyondell 2001-2006 EBITDA Reconciliation
Lyondell 2001-2006 EBITDA Reconciliation Reconciliation of EBITDA to Net Income Lyondell (Millions of Dollars) Year Ended 31-December 2001 2002 2003 2004 2005 2006 Total adjusted EBITDA 738 741 590 1,316 2,197 2,847 Adjustments Lyondell's share JV EBITDA: Houston Refining: 58.75% through 15-Aug-2006
Slide 52: Lyondell Refining EBITDA Reconciliation
Lyondell Refining EBITDA Reconciliation¹ For the Year Ended Reconciliation of Proportionate Shares of Refining EBITDA 31-December (Millions of Dollars) 2001 2002 2003 2004 2005 2006 Lyondell's 58.75% share of Houston Refining pre-acquisition EBITDA $214 $212 $221 $379 $204 $132 Lyondell's 100% share
Slide 53: Lyondell Pro Rata Revenue Reconciliation – 100% Basis
Lyondell Pro Rata Revenue Reconciliation – 100% Basis For the Year Ended (Millions of Dollars) 31-December 2002 2003 2004 2005 2006 Lyondell¹ $3,241 $3,781 $5,850 $17,257 $20,882 Equistar - 41% through August 22, 2002; 70.5% thereafter 2 2,885 4,614 5,902 Houston Refining - 58.75% through August 15,
Slide 54: Lyondell 2007 EBITDA
Lyondell 2007 EBITDA Reconciliation of EBITDA to Net Income Lyondell Last Twelve Months Ended (Millions of Dollars) 31-December-2007 EBITDA $2,069 Add: Income from equity investment 2 Deduct: Depreciation and amortization (907) Interest expense, net (633) (Provision for) benefit from income taxes (6
Slide 55: LyondellBasell 2007 EBITDA
LyondellBasell 2007 EBITDA Reconciliation of EBITDA to Net Income LyondellBasell Last Twelve Months Ended (Millions of Dollars) 31-December-2007 EBITDA $1,406 Add: Income from equity investment 162 Deduct: Depreciation and amortization (472) Interest expense, net (283) (Provision for) benefit from i
Slide 56: Reconciliation of Reported EBITDA to Preliminary Pro Forma Adjusted EBITDA
Reconciliation of Reported EBITDA to Preliminary Pro Forma Adjusted EBITDA Reconciliation of 10-K EBITDA to Preliminary Pro Forma EBITDA Last Twelve Months Ended Company December 31, (Millions of dollars) 2007 Basell Lyondell Lyondell10-K EBITDA (stand-alone, incl. 11 days Lyondell results) $2,069 L
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