LyondellBasell Industries NV · NYSE:LYB
LyondellBasell Industries NV — Goldman Sachs Basic Materials Conference 2013
33 slides from LyondellBasell Industries NV's conference presentation, May 2013
Slide 1: Goldman Basic Materials Conference
S E I Z E T H E M O M E N T S ECURING THE FUTURE Goldman Basic Materials Conference Pat Quarles Senior Vice President lyondellbasell.com
Slide 2: Cautionary Statement
Cautionary Statement The information in this presentation includes forward-looking statements. These statements relate to future events, such as anticipated revenues, earnings, business strategies, competitive position or other aspects of our operations or operating results. Actual outcomes and resu
Slide 3: Information Related to Financial Measures
Information Related to Financial Measures We have included EBITDA in this presentation, which is a non-GAAP measure, as we believe that EBITDA is a measure commonly used by investors. However, EBITDA, as presented herein, may not be comparable to a similarly titled measure reported by other companie
Slide 4: LYB Highlights
LYB Highlights ($ in millions, except per share data) LTM March 2013 FY 2012 FY 2011 EBITDA $6,166 $5,808 $5,469 Income from Continuing Operations $3,170 $2,858 $2,472 Diluted Earnings ($ / share) from Continuing Operations $5.49 $4.96 $4.32 EBITDA(1) Income from Continuing Operations(1) ($ in milli
Slide 5: Free Cash Flow Funds Growth and Return to Investors
Free Cash Flow Funds Growth and Return to Investors Net Cash from Operations Total Debt ($ Million) ($ Million) 7,000 5,000 4,000 5,600 3,000 4,200 2,000 2,800 1,000 1,400 0 0 May - Dec 2010 2011 2012 31-Dec-10 31-Dec-11 31-Dec-12 Capex Free Cash Flow Dividends(2) ($ Million) 3,000 • 2012 total Divi
Slide 6: "Back-To-Basics" Strategy Drives Value
“Back-To-Basics” Strategy Drives Value Our Results Operational Excellence • Excellent safety and environmental performance combined with reliable Technology operations Cost Driven Reduction Growth • Maintained fixed costs flat • Completed numerous turnarounds Performance Capital Driven Culture Disci
Slide 7: Optimizing Our Businesses
Optimizing Our Businesses Segment LYB Market Position Portfolio Role Olefins & Polyolefins • NGL advantage Invest – Americas • Cyclical upside • Commodities – naphtha based, with cyclical upside Olefins & Polyolefins Restructure – EAI • Differentiated positions in Catalloy, PP compounding, and JVs I
Slide 8: Cost of Ethylene Production
Macroeconomic Background U.S. Crude Oil vs. Natural Gas Price Ethylene Production Cost Curve ($/ MMBTU) ($/ bbl) $25 $150 Crude Oil 20 120 Cost of Ethylene Production 15 90 Global Naphtha Cracking Delta 40-60 ¢/lb 10 60 N. America Ethane Crackers Middle East 10 - 15¢/lb Natural Gas Ethane Crackers 5
Slide 9: O&P – Americas: Fundamentals of Natural Gas / NGLs Have Defined the Environment
O&P – Americas: Fundamentals of Natural Gas / NGLs Have Defined the Environment U.S. NGL Prices vs. Brent Cost of Ethylene Production (Indexed to Jan 2012) (¢ / lb) 120 60 2010 2011 2012 2013 YTD 95 45 70 30 45 15 20 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 NE Asia U.S. U.S. Brent Ethane Propane Na
Slide 10: Ethane Fractionation and Consumption Capacity
Ethane Fractionation and Consumption Capacity U.S. Ethane Production Capacity U.S. Ethane Demand Capacity (MBPD) (MBPD) 1,800 1,800 Base Base Additions Additions 1,350 1,350 900 900 450 450 2010 2011 2012 2013E 2014E 2015E 2016E 2017E 2010 2011 2012 2013E 2014E 2015E 2016E 2017E Ethane production is
Slide 11: Feedstock Flexibility Boosts Profitability
Feedstock Flexibility Boosts Profitability LYB U.S. Ethylene Cracker Feedstock Flexibility Pre-2009 2012 Future Local Local Liquids Liquids Imported Local Liquids Liquids NGLs NGLs Imported NGLs Liquids 11.0 B lbs. ethylene 9.8 B lbs. ethylene 11.6 B lbs. ethylene capacity capacity capacity Expandin
Slide 12: O&P – Americas Expansion Program: Previously Announced
O&P – Americas Expansion Program: Previously Announced Potential Growth Investment Timing Scope Value(1) ($ million) (status) ($ million / year) 500 MM lbs Increase Ethane 2012 Capability ethylene ~$25 $50 - $100 (complete) (naphtha to ethane feed) Midwest 100 MM lbs 2012 Debottleneck ~$25 $30 - $40
Slide 13: O&P – Americas Expansion Program: New Projects
O&P – Americas Expansion Program: New Projects Potential Growth Investment Timing Scope Value(1) ($ million) (year) ($ million / year) ~ 220 MM lbs PE Debottleneck ~$20 2014 $10 - $20 polyethylene Channelview 250 MM lbs ~$170 2015 $80 - $100 Expansion ethylene Corpus Christi 800 MM lbs Expansion ~$4
Slide 14: O&P – EAI: Recent Profits from Differentiated Position
O&P – EAI: Our Recent Profits Were Primarily Generated from Our Differentiated Position Indexed O&P EAI EBITDA Scenarios (EBITDA Indexed, Mid-Cycle = 1.0) 2.0 1.5 1.0 0.5 Trough Mid-Cycle Peak 2012 Differentiated / Stable Businesses Commodity / Cyclical Olefins & Polyolefins • O&P EAI portfolio is m
Slide 15: O&P – EAI: Progress Through Restructuring and Improved Operations
O&P – EAI: Significant Progress Through Restructuring and Improved Operations Estimated Efficiency Gains Focus business management processes Variable cost (including supply chain) Segment markets and Previously announced Feedstock & customers restructuring cracker improvements Portfolio Simplify sup
Slide 16: Intermediates & Derivatives: A Robust and Diversified Portfolio
Intermediates & Derivatives: A Robust and Diversified Portfolio Intermediates & Derivatives 2013 LTM 3/31/13 Revenue $ 9.5 billion 2013 LTM 3/31/13 EBITDA $ 1.6 billion Propylene Oxide & C4 Chemicals Acetyls Ethylene Oxide Styrene Oxyfuels Derivatives & Derivatives Capacity(1): Capacity: Capacity Ca
Slide 17: I&D: Businesses Generate Strong Cash Flow
I&D: Businesses Generate Strong Cash Flow 2012 EBITDA(1) less Capex C4's / EO & PO Acetyls Oxyfuels Derivatives ($ in millions) 1,800 Proprietary Technology Advantaged NGL 1,350 / Crude Oil Price Ratio 2012 Intermediates & Derivatives EBITDA 900 450 Proprietary Technology LYB I&D A B C P
Slide 18: I&D: Profitability Drivers for Propylene Oxide
I&D: Profitability Drivers for Propylene Oxide LYB Global PO Position Key Drivers Global Capacity ~ 21 Billion lbs other Dow • Propylene oxide demand growth – 5% per year globally Huntsman SINOPEC LYB – 9% per year in Asia SK Sumitomo BASF LYB • High barrier to entry Shell Partnerships Economics of
Slide 19: I&D Benefits from Shale Gas Development - Oxyfuels
I&D Benefits from Shale Gas Development - Oxyfuels Global Butane Prices as % of Brent MTBE Spread Factors (¢ / gallon) 120% ¢120 LYB capacity: 75,000 BBls/day 100% 90 60% U.S. 40% EU 80% 60 60% 30 40% 1999 2001 2003 2005 2007 2009 2011 2013 Pre Shale Post Shale EU Butane NA Butane MTBE - Gasoline Ga
Slide 20: An Additional Benefit to I&D from Shale Gas - Methanol
An Additional Benefit to I&D from Shale Gas - Methanol Methanol Cash Margins ($/MT) $400 300 200 100 Pre-Shale Post Sh ale Methanol Restart • Location: Channelview, TX • Start-up: Q4’13 • Cost: $150 Million • Potential Growth Value(1): $250 Million/yr • Project Status: permitted, construction underw
Slide 21: Refining: Profitability Driven by Geography and Complexity
Refining: Profitability Has Been Driven by Geography and Complexity Refining Spreads New Pipeline Capacity to Houston ($ / bbl) $60 2010 2012 2013 YTD 40 20 Brent 3-2-1 LLS 3-2-1 WTI 3-2-1 Maya 2-1-1 WCS 2-1-1 (Canadian) Pipeline Capacity Increase (MBPD) 1,500 1,000 500 2012 2013 2014 Source: Bloomb
Slide 22: Growth and Operational Improvement Programs
Growth and Operational Improvement Programs N. America O&P Expansions O&P EAI Butadiene Expansion Additional Methanol Restart Remaining Potential Pre- Projected Tax Earnings PO/TBA JV Spending(1) O&P – EAI Operational $1,500 - $2,000 Improvements $1,500 - $1,700 million per year million Houston Refi
Slide 23: Importance of Capital Project Selection
Importance of Capital Project Selection Annual Cash Flow from Announced Growth Projects(1) Fast Execution & High Returns ($ in millions) $1,500 • Announced projects expected to be on line by 2016 1,000 • $1.6 billion of announced growth capital expenditures from 2013 to 2016 500 • Over $1.5 billion
Slide 24: Cash Deployment Hierarchy
Cash Deployment Hierarchy Current Status Comments $700 - $800 Base Capex million/yr • First priorities for cash Interest ~$260 million/yr Foundation Interim ~$920 million • Fund through the cycle with Dividend per year cash flow from operations ~$750 million • High-return in advantaged Growth Capex
Slide 25: Value from Both Growth and Cash Distributions
Value from Both Growth and Cash Distributions Growth Projects Value Potential Annual Discretionary Cash Potential ($ in billions) $48 Potential Potential Discretionary Shareholder Cash Distributions Growth Projects 36 Potential Value(1) Special dividend 24 $2.0 - $3.5 billion Dec. 31, 2012 Dec. 31,
Slide 26: Appendix
S E I Z E T H E M O M E N T S ECURING THE FUTURE Appendix lyondellbasell.com
Slide 27: Reconciliation of Segment Information to Consolidated Financial Information
Reconciliation of Segment Information to Consolidated Financial Information Table 8 - Reconciliation of Segment Information to Consolidated Financial Information 2012 2013 (Millions of U.S. dollars) Q1 Q2 Q3 Q4 Total Q1 Sales and other operating revenues: Olefins & Polyolefins - Americas $ 3,349 $ 3
Slide 28: Reconciliation of EBITDA to Income from Continuing Operations
Reconciliation of EBITDA to Income from Continuing operations Table 9 - EBITDA Calculation 2012 2013 (Millions of U.S. dollars) Q1 Q2 Q3 Q4 Total Q1 Net income attributable to the Company shareholders $ 600 $ 770 $ 846 $ 632 $ 2,848 $ 901 Net loss attributable to non-controlling interests (1) (2) (2
Slide 29: Globally Diversified End Uses
Globally Diversified End Uses Propylene Oxide & Ethylene Oxide & Co-Products: Oxyfuels, Acetyls Derivatives Derivatives Isobutylene and Styrene • Home and auto cushioning • Food packaging • Surfactants • Gasoline blending • Insulation foams • Textiles • Antifreeze • Lube & fuel additives • Polyester
Slide 30: Future Operational and Financial Improvements
Future Operational and Financial Improvements Further structural and Further O&P – EAI To be completed by Restructuring product mix 2015 improvements Expand operating window / increase Further Houston To be completed by Refinery Flexibility feedstock capacity for 2014 lighter Canadian crude oil Futu
Slide 31: Previously Announced High-Return Growth Opportunities
Previously Announced High-Return Growth Opportunities La Porte Expansion Olefins Ethane Capability Methanol Restart Additional Remaining Potential Pre- O&P EAI Butadiene Expansion Projected Tax Earnings Spending Midwest Debottlenecks $800 - $1,000 $600 - $700 PO/TBA JV million per year million by 20
Slide 32: New Growth Opportunities
New Growth Opportunities Channelview Expansion Corpus Christi Expansion Potential Projected Pre-Tax Spending Earnings Olefins NGL Recovery $900 - $1,000 $500 - $600 PE Debottleneck million million per year by 2016(1) Potential New PE Line Combined projects will have average payback period less than
Slide 33: Appendix A
Appendix A Details of Assumptions: • O&P - Americas: – Growth projects potential values are based on LYB growth projects capacities and 2012 industry benchmark margins data from third party consultants as indicated in the 2013 Investor Day O&P Americas slides. • O&P - EAI: – Growth projects potentia
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