Borouge Plc · ADX:BOROUGE
Borouge — Investor Presentation (April 2022)
88 slides from Borouge's investor presentation, April 2022
Slide 1: Corporate Presentation April 2022
BOROUGE Corporate Presentation April 2022
Slide 2: Legal Disclaimer
LEGAL DISCLAIMER IMPORTANT: You must read the following before continuing. The following disclaimer applies to this Presentation. For the purposes of this disclaimer, "Presentation" means this document, its contents or any part of it. The purpose of this Presentation is to provide an overview of Abu
Slide 3: Table of Contents
TABLE OF CONTENTS Section 1 Introduction to Borouge 2 Key Business Highlights 3 PE and PP Market Dynamics 4 Borouge Deep Dive 5 Borouge 4 Overview 6 ESG Strategy and Approach 7 Financial Overview 3 Corporate Presentation | April 2022
Slide 4: Introduction to Borouge
SECTION 1 INTRODUCTION TO BOROUGE 4 Project Burgundy - Management Presentation 15.12.2021
Slide 5: A Strategic Partnership with Supportive Shareholders
A STRATEGIC PARTNERSHIP WITH SUPPORTIVE SHAREHOLDERS Borouge is well placed to leverage the strengths and competitive advantages of its shareholders 60% 40% • State-owned national oil company of Abu Dhabi • Leading provider of advanced and circular polyolefin solutions globally (#8) and European mar
Slide 6: Borouge at a Glance
BOROUGE AT A GLANCE Leading provider of innovative and differentiating polyolefin solutions BORSTAR ® TECHNOLOGY LARGE SCALE YOUNG ASSET BASE STRONG PROFITABILITY POWERING INNOVATION 5.0mt ~90% ~80% $ 166 $ 2.7Bn 44% Polyolefin of Capacity Differentiated Avg. Premium vs. PF 2021 PF 2021 Capacity <12
Slide 7: A Fully Integrated Global Player
A FULLY INTEGRATED GLOBAL PLAYER Operations and marketing setup benefitting from customer proximity Manufacturing, R&D and Marketing Footprint Sales Volume Split (2021, 4.4mt)(1) By Product Group By Geography 3% 9% Borouge Compounding Polyethylene Asia Pacific Plant Plant (PE) (APAC) Ruwais Applicat
Slide 8: A Leader in Premium Polyolefins Solutions
A LEADER IN PREMIUM POLYOLEFINS SOLUTIONS Differentiated solutions serving many highly demanded end-products Applications(2) Market Growth(3) Consumer 2.5mt ~1.2x Solutions 2021 GDP Growth Sales Volume(1) Forecast Sustainable Packaging Mono-material Solutions Greenhouse Films Infrastructure 1.7mt ~1
Slide 9: Strong ESG Track Record and Commitment
STRONG ESG TRACK RECORD AND COMMITMENT Our ESG focus areas Track Record of Delivery and Reporting Our Decarbonization Targets 0.22 2021 2030 2021 Achieved(3) Target(3) Safety Excellence TRIR(1) 20% -21% -30% Efficiency Gains Water Management in 2021 Energy Intensity Global Code of Conduct and Clear
Slide 10: Driving the Plastic Industry Transition
DRIVING THE PLASTIC INDUSTRY TRANSITION Investing for sustainable growth Outperformance vs. Other Materials Investing in Sustainable Solutions Environmental Cost in Consumer Goods(1) Consumer Solutions ~5x Targeting 20 % Customer Solutions Sales that $ Bn support Circular Economy by 2030 533 98 Over
Slide 11: Key Business Highlights
SECTION 2 KEY BUSINESS HIGHLIGHTS 11 Project Burgundy - Management Presentation 15.12.2021
Slide 12: Key Business Highlights
KEY BUSINESS HIGHLIGHTS 1 Robust Industry Environment with Strong Demand Growth 2 Highly Attractive Global Polyolefins Platform 3 Powered by Borstar ® and Enhanced by Direct Access to Market 4 Superior Products Yielding Premium Prices 5 Strong Profitability and Reliable Through-the-cycle Dividend Ca
Slide 13: Robust Industry Environment with Strong Demand Growth
1 ROBUST INDUSTRY ENVIRONMENT WITH STRONG DEMAND GROWTH Targeting the largest and fastest growing markets Addressing Global Megatrends… …Serving High Growth Markets… …With Demand Outstripping Supply Global Polyolefins Demand(1) Global Polyethylene Supply and Demand Additions(4) Growth in population
Slide 14: Highly Attractive Polyolefins Platform Globally: Capacity and Reliability
2 HIGHLY ATTRACTIVE POLYOLEFINS PLATFORM GLOBALLY Increasing margins through scale and high reliability Production Capacity Asset Reliability Developed and funded separately by ADNOC and Borealis 96% 2021 Overall Run-rate(1) B4 Expansion Track Record (6.4mt) PP5 B3 (5.0mt) (4.5mt) Expansion On Time
Slide 15: Highly Attractive Polyolefins Platform: Avenues of Growth
2 HIGHLY ATTRACTIVE POLYOLEFINS PLATFORM GLOBALLY Pursuing sizeable and well-identified avenues of growth PP5 (Completed in 2022) Borouge 4 (In Execution) • Enables Borouge to meet its customers’ demand for • Scheduled to become operational in 2025, Borouge 4 is designed polypropylene solutions acro
Slide 16: First Quartile Cost Curve Position
2 HIGHLY ATTRACTIVE POLYOLEFINS PLATFORM GLOBALLY 1st quartile cost curve position as a result of competitive feedstock and large-scale operations 2021 Global Polyethylene (HDPE) Cost Curve(1) Key Drivers (in $/t) 1st Quartile 2nd Quartile 3rd Quartile 4th Quartile 2,000 ✓ Young and Well-maintained
Slide 17: Powered by Borstar
3 INNOVATION AND VALUE CHAIN COLLABORATION POWERED BY BORSTAR ®… Borealis’ proprietary technology enables industry-leading innovation capabilities and tailored solutions for demanding end-use applications ▪ Global Innovation Innovation Network ▪ 100+ R&D Employees ▪ 1,000+ Active Borstar ® Patents T
Slide 18: Enhanced by Direct Access to Market
3 …AND ENHANCED BY DIRECT ACCESS TO MARKET Extensive direct customer coverage through strategically located marketing offices and logistics hubs Direct Access to Markets Focus on growth markets: APAC and MEA account ✓ for 59% and 33% of sales volumes in 2021, respectively Extensive direct sales ✓ ne
Slide 19: Superior Products Yielding Premium Prices
4 SUPERIOR PRODUCTS YIELDING PREMIUM PRICES Commitment to innovation and operational excellence helps Borouge command a price premium Polyolefin Realized Prices Relative to PE and PP Benchmarks (in $/t) Price Premium Average price premium of ~166 $/t Integrated go-to-market approach +258 $/t ✓ drivi
Slide 20: Strong Financial Profile
5 STRONG FINANCIAL PROFILE Strong financial performance reflects Borouge’s competitive position Sales Volumes(1) Revenues(1,2) Adj. EBITDA(1) (in kt) (in $m) (in $m) % margin 6,216 46% 43% 48% 44% 131 5,477 125 4,435 4,422 2,723 4,202 2,538 2,633 3,977 248 141 4,165 141 4,093 2,067 197 140 123 1,671
Slide 21: Strong Profitability
5 STRONG PROFITABILITY Sector-leading margins enabled by attractive cost curve position and premium price realization 2021 EBITDA Margin(1) Key Drivers (in %) 44%(2) Differentiated products delivering ✓ premium pricing 39% 36% ~85% of Sales Volumes via ✓ direct sales channels 31% 28% ✓ 1st quartile
Slide 22: Strong Cashflow Generation
5 STRONG CASHFLOW GENERATION High Free Cash Flow through the combination of high profitability and limited maintenance capex Capital Expenditure(1,2) Operating Free Cash Flow(1,3) Leverage(1,5) (in $m) (in $m) (ratio) Cash Conversion(4) 72% 78% 90% 91% 2,469 2,381 1.2x 1,370 1,393 537 383 315 252 25
Slide 23: Reliable Through-the-Cycle Dividend Capacity
5 RELIABLE THROUGH-THE-CYCLE DIVIDEND CAPACITY Consistently high EBITDA margins and cash conversion Last 3 Years EBITDA Margin Range(1) 2021 Cash Conversion(3) (in %) (in %) 91% 48% 88% 86% 43% 40% 82% 81% 36% 80% 38% 31% 76% 28% 73% 23% 25% 20% 17% 13% 15% 15% 14% 6% (2) (4) Sources: Company Inform
Slide 24: PE and PP Market Dynamics
SECTION 3 PE AND PP MARKET DYNAMICS 24 Project Burgundy - Management Presentation 15.12.2021
Slide 25: Polyolefins Market Overview
POLYOLEFINS MARKET OVERVIEW Polyolefins are versatile thermoplastic products used in a wide range of end-use applications Positioning of Polyolefins in the Value Chain Polyolefins End-use Application Examples Refining Naphtha Ethane Olefins Polyolefins Gas Propane processing Ethylene Polyethylene Pr
Slide 26: Positive Demand Growth Outlook for Polyolefins Products
POSITIVE DEMAND GROWTH OUTLOOK FOR POLYOLEFINS PRODUCTS Key Petrochemical Products Market Size & Growth (2022 market size in mt, 2022-26 CAGR in % forecast) PE PP Size of bubble represents 2022 global market size Total market demand Polypropylene (PP) 89 forecast 121 mt 89 mt Polyethylene (PE) 121 (
Slide 27: Borouge's Target Regional Markets Drive Global Demand
BOROUGE’S TARGET REGIONAL MARKETS ARE EXPECTED TO CONTINUE TO DRIVE GLOBAL DEMAND Asia and MEA expected to account for ~86% of global polyolefins (PO) demand growth Expected PO Demand Growth over 2023-26 Regional Key Growth Drivers (in mt) 4.5% 1.7% Industrialization • Acceleration of industrializat
Slide 28: Global Trade Flow: Continued Import Demand Growth from Asia
GLOBAL TRADE FLOW: CONTINUED IMPORT DEMAND GROWTH FROM ASIA Expected Net Polyolefins Export / (Import) by Region (in mt) Asia PO net import growth (in mt) +4.2 (1.6) (2.1) 3.6 Indian subcontinent (14.6) (15.4) 11.5 2022 2026 9.6 Western Europe 2022 2026 1.5 China Northeast Asia (0.9) Other Asia(1) 2
Slide 29: Balanced Global Polyolefins Market Despite New Capacities
BALANCED GLOBAL POLYOLEFINS MARKET DESPITE NEW WAVES OF CAPACITIES Polyolefins Global Supply(1) & Demand Additions (in mt) 86.4% 85.2% ✓ Polyethylene Balanced market in the medium- and long-terms 26.0 18.9 15.9 18.0 2019-22 2023-26 (3) ✓ Maintaining global operating rates >85% (in mt) 87.5% 85.3% Po
Slide 30: High Oil Price Developments and Expected Impacts on Polyolefins
HIGH OIL PRICE DEVELOPMENTS AND EXPECTED IMPACTS ON POLYOLEFINS Prevailing Oil Prices at High Levels … … is Supportive for Borouge (in US$/bbl) Strong correlation between oil prices and polyolefins ✓ 120 prices 100 80 Steeper cost curve with non-gas producers having a ✓ higher cost base compared to
Slide 31: Borouge Deep Dive
SECTION 4 BOROUGE DEEP DIVE 31 Project Burgundy - Management Presentation 15.12.2021
Slide 32: Borouge's History
Operations Technology Innovation Market Segments Marketing and Logistics BOROUGE’S HISTORY Successful track record of growth and execution 1998 2001 2005 2010 2010 Start-up of an ethane cracker and Borouge 1 expansion Shanghai Compounding Borouge 2 is completed. Borouge is created as a JV two Borsta
Slide 33: Borouge's Production Complex in Ruwais
Operations Technology Innovation Market Segments Marketing and Logistics BOROUGE’S PRODUCTION COMPLEX IN RUWAIS One of the largest integrated polyolefins sites globally(1) Borouge 1 Borouge 2 Borouge 3 PP5 Ruwais Production Complex Borouge 3 Borouge 2 Borouge 1 Location Ruwais (UAE) Ruwais (UAE) Ruw
Slide 34: Fully Integrated Production Complex
Operations Technology Innovation Market Segments Marketing and Logistics FULLY INTEGRATED PRODUCTION COMPLEX ~5.0mt annual capacity 3,600kt Capacity Strategic Location Near Feedstock-related Assets High Density Polyethylene / ADNOC Linear Low Density Polyethylene Gas Processing Cracker 1 Ethane Cros
Slide 35: Feedstock for the Ruwais Complex
Operations Technology Innovation Market Segments Marketing and Logistics FEEDSTOCK FOR THE RUWAIS COMPLEX Long-term market price-based feedstock contracts ensure Borouge’s competitiveness Ethane Propylene ~50% from ADNOC Refining Supplier ADNOC Gas Processing and ~50 % from internal Borouge sources
Slide 36: Operational Performance
Operations Technology Innovation Market Segments Marketing and Logistics OPERATIONAL PERFORMANCE Strong performance over the years Stable Operating Track Record… …Built on >20 Years Experience Production Volumes(1) (in kt) First Time Right Production (in %) 3,687 4,275 4,251 93% 95% 96% ✓ In-house o
Slide 37: Cost Curve Position
Operations Technology Innovation Market Segments Marketing and Logistics COST CURVE POSITION 1st quartile cost curve position as a result of competitive feedstock and large-scale operations 2021 Global HDPE Cost Curve(1) 2021 Global Polypropylene Cost Curve(1) (in $/t) (in $/t) 1st Quartile 2nd Quar
Slide 38: Borstar Providing Competitive Edge: Bimodality
Operations Technology Innovation Market Segments Marketing and Logistics BORSTAR ® PROVIDING COMPETITIVE EDGE Bimodality is key to product design and application performance Borstar ® PE Process Configuration Benefits of Bimodal Borstar ® PE Gas Phase Loop Reactor(s) Reactor Prepolymerisation Conven
Slide 39: Borstar Providing Competitive Edge
Operations Technology Innovation Market Segments Marketing and Logistics BORSTAR ® PROVIDING COMPETITIVE EDGE Borealis’ multi-modal proprietary technology at the core of Borouge’s innovation High Technical Performance A Source of Defensible Differentiation Improved processability and mechanical prop
Slide 40: Innovation at the Core of Our Business
Operations Technology Innovation Market Segments Marketing and Logistics INNOVATION AT THE CORE OF OUR BUSINESS Major enabler of the differentiated and sustainable solutions of Borouge Innovation Platform Overview Innovation Collaboration Network • The Innovation Centre in Abu Dhabi develops 100+ po
Slide 41: Solutions for a Broad Range of Markets
Operations Technology Innovation Market Segments Marketing and Logistics SOLUTIONS FOR A BROAD RANGE OF MARKETS Borouge contributes to solutions delivering a positive and sustainable impact Borouge’s Differentiated and Sustainable Solutions(1) 1 Consumer Products Consumer 2.5mt ~1.2x Solutions 2021
Slide 42: Consumer Products (1/2)
Operations Technology Innovation Market Segments Marketing and Logistics 1 CONSUMER PRODUCTS (1/2) Flexible and rigid solutions addressing evolving regulations and increased consumer demand Overview Sample Applications • Significant demand for high quality packaging materials to enable hygiene and p
Slide 43: Consumer Products (2/2)
Operations Technology Innovation Market Segments Marketing and Logistics 1 CONSUMER PRODUCTS (2/2) Case study: Design for Recyclability with mono-material solutions Challenge Solution Results • Advanced packaging typically • Collaborated with converters • Fully recyclable product relies on multi-mat
Slide 44: Agriculture (1/2)
Operations Technology Innovation Market Segments Marketing and Logistics 2 AGRICULTURE (1/2) Improving productivity, yield, and quality, through Borstar ® based applications Overview and Selected Applications • Through its innovative agriculture solutions, Borouge is helping to improve farming produ
Slide 45: Agriculture (2/2)
Operations Technology Innovation Market Segments Marketing and Logistics 2 AGRICULTURE (2/2) Case study: Greenhouse film for improved crop yield Challenge Solution Results • Improve crop yield in harsh • 12-week field trials in co- • Nearly 100% seed weather conditions, where ordination with Borouge
Slide 46: Pipes and Fittings (1/2)
Operations Technology Innovation Market Segments Marketing and Logistics 3 PIPES AND FITTINGS (1/2) Safe, reliable and durable pipe and fitting solutions for infrastructure applications Overview Sample Applications • Innovative and sustainable solutions for pipe systems used across industries includ
Slide 47: Pipes and Fittings (2/2)
Operations Technology Innovation Market Segments Marketing and Logistics 3 PIPES AND FITTINGS (2/2) Case study: The material of choice for large diameter pipes in mega projects Challenge Solution Results • Need to support utility • Borouge collaborated with • More uniform pipe wall companies to prod
Slide 48: Energy (1/2)
Operations Technology Innovation Market Segments Marketing and Logistics 4 ENERGY (1/2) Supporting critical energy sources through Borealis’ proprietary Borlink TM Technology Overview Sample Applications • Sustainable energy solutions transporting critical energy sources via cables in buildings, str
Slide 49: Energy (2/2)
Operations Technology Innovation Market Segments Marketing and Logistics 4 ENERGY (2/2) Case study: High voltage cable power transmission Challenge Solution Results • Installation of high voltage • Engaged closely with value • Timely delivery with cables up to 1,000m long chain partners to develop p
Slide 50: Compounding & Application Centre for Mobility
Operations Technology Innovation Market Segments Marketing and Logistics COMPOUNDING & APPLICATION CENTRE FOR MOBILITY High quality compounding plant supported by R&D capabilities serving the automotive industry Compounding Manufacturing Plant (CMP) Shanghai Application Centre (SHAC) • Inaugurated i
Slide 51: Borouge's Commercial Network
Operations Technology Innovation Market Segments Marketing and Logistics BOROUGE’S COMMERCIAL NETWORK Broad local presence enabling direct access to market Overview Our Office Footprint Across APAC and MEA • Borouge’s marketing and sales headquarter is located in Singapore, primarily responsible for
Slide 52: Strategic Supply Chain & Logistics Capabilities
Operations Technology Innovation Market Segments Marketing and Logistics STRATEGIC SUPPLY CHAIN & LOGISTICS CAPABILITIES Agile and reliable logistics and distribution network supporting commercial success Overview of Supply Chain & Logistics Global Network of Inventory Holding Points • Strong partne
Slide 53: Integrated Go-to-Market Approach
Operations Technology Innovation Market Segments Marketing and Logistics INTEGRATED GO-TO-MARKET APPROACH Our multi-dimensional approach drives customer loyalty and brand recognition Innovation-led Ingrained Partnership Approach Extensive Direct Sales Network Professional Technical Services Customer
Slide 54: Differentiated Products Yield Premium Prices
Operations Technology Innovation Market Segments Marketing and Logistics DIFFERENTIATED PRODUCTS YIELD PREMIUM PRICES Differentiation through Borstar ® technology, innovation capabilities and integrated go-to- market approach driving customer value-add and consistent premium to benchmark prices Diff
Slide 55: Borouge 4 Overview
SECTION 5 BOROUGE 4 OVERVIEW 55 Project Burgundy - Management Presentation 15.12.2021
Slide 56: Introduction to Borouge 4
INTRODUCTION TO BOROUGE 4 Scheduled to be completed in 2025 and designed to provide 1.4mt additional polyolefins capacity Fully Integrated into Borouge complex… …Adjacent to Other Borouge Existing Plants Borouge 3 Joint project between ADNOC and Borealis – Borouge 2 FID signed in November 2021 and E
Slide 57: Plant Design and Process Overview
PLANT DESIGN AND PROCESS OVERVIEW Additional 1.5mt ethylene to be processed by the existing polyolefins units in the existing plants • 1.5mt ethane cracker PE 6 • Two 700kt Borstar ® polyethylene plants (PE 6 and PE 7) with Plants HDPE and LLDPE capabilities Overview ADNOC • Cross-linked polyethylen
Slide 58: Borouge 4 Is Aligned with Borouge's Vision
BOROUGE 4 IS ALIGNED WITH BOROUGE’S VISION Focus on sustainability and growth High-value sustainable • 70% Infrastructure Solutions plastics applications • 30% Consumer Solutions Diversified • 70% North and South-East Asia geographical coverage • 30% Middle East and Africa • Competitive, long-term f
Slide 59: On Track to Be Completed by 2025
ON TRACK TO BE COMPLETED BY 2025 EPC costs of ~$6.2 Bn(1) with Additional ~$0.3 Bn Pre-Operating Expenses Key Construction Pre Start-up Utilities, Offsites and Cracker Unit Polymers Unit XLPE-2 Packages Operating Expenses Early Works Utilities systems, wastewater and sewage treatment, tank farm and
Slide 60: ESG Strategy and Approach
SECTION 6 ESG STRATEGY AND APPROACH 60 Project Burgundy - Management Presentation 15.12.2021
Slide 61: ESG: Our Sustainability Strategy and Approach
ESG: OUR SUSTAINABILITY STRATEGY AND APPROACH Our sustainability strategy is based on five key verticals supported by a robust governance framework Borouge Sustainability Strategy ESG Governance and Disclosure ESG Governance • ESG a standing agenda item Board • Drives ESG performance and ensures exe
Slide 62: Managing Environmental Issues
MANAGING ENVIRONMENTAL ISSUES Strong track record of managing environmental risks with effective systems in place Key Industry Management System Certifications Track Record of Reducing Environmental Impact ENVIRONMENTAL • Certified since 2018 • Efficiency gains through process MANAGEMENT SYSTEM • In
Slide 63: Our Decarbonisation Approach
OUR DECARBONISATION APPROACH Significant investment to reduce energy intensity of operations 30% by 2030 Energy Performance Strategy Greenhouse Gas Emission Intensity Reduction Projections Operational improvements Kg CO2/T (estimate) Kg CO2/T (actual) • Elimination of hot furnace stand-by 1,400 • En
Slide 64: Our Approach on Circular Economy
OUR APPROACH ON CIRCULAR ECONOMY Focusing on sustainability across our product portfolio Our Commitment to Circularity • Borouge supports the recent UN Environment Assembly draft resolution to end plastic pollution (UNEA 5.2) • Plastic products can contribute to achieving the UN Sustainable Developm
Slide 65: Our Health and Safety Approach
OUR HEALTH AND SAFETY APPROACH Robust safety, health and security management systems based on continuous improvement Borouge Health & Safety Management System Consistently Low LTI(1) and TRI(2) Rates 2014 2015 2016 2017 2018 2019 2020 2021 2007-21 Ave Audit & LTIR 0 0.25 0.16 0 0.05 0.09 0.04 0.05 0
Slide 66: Financial Overview
SECTION 7 FINANCIAL OVERVIEW 66 Project Burgundy - Management Presentation 15.12.2021
Slide 67: Corporate Structure
CORPORATE STRUCTURE ADP PTE 60% 40% 50% 50% ADP PTE ▪ Production entity based in Abu Dhabi ▪ Marketing entity based in Singapore ▪ Sells all production volumes (apart from smaller excess / by-product volumes) to PTE, at eventual ▪ Consolidates the compounding plant sales price less commission for PT
Slide 68: Revenue Breakdown – Volumes and Product Prices
REVENUE BREAKDOWN – VOLUMES AND PRODUCT PRICES Operational excellence and debottlenecking(1) driving consistent volume growth Revenue Development(2) Commentary (in kt) Turnaround ▪ Volume increase mainly driven by 3,977 at B3 4,435 4,202 4,422 operational excellence programs and (5) Others revamp of
Slide 69: Premia over Price Benchmark
PREMIA OVER PRICE BENCHMARK Proven ability to realize consistent premia over benchmark and maximize netbacks(1) Premia over Benchmark Prices(2) and Average Sales Price (ASP)(3) Commentary (in $ / t) ▪ Contraction in 2020 average sales 1,421 prices driven by overall weaker Polyethylene 1,103 334 981
Slide 70: Cost Breakdown
COST BREAKDOWN The major cost items at Borouge are feedstock costs and other variable & fixed production costs Cost Development(1) Commentary (in $m) ▪ The main components of COGS are feedstock COGS (excl. D&A)(2) 2,727 costs and other variable & fixed production costs 2,276 2,016 1,937 1,557 − Feed
Slide 71: Adjusted EBITDA Evolution
ADJUSTED EBITDA EVOLUTION Borouge has consistently strong operating profitability levels, supported by its well-defined strengths Adjusted EBITDA Evolution(1) Commentary (in $m) ▪ Borouge’s combination of strengths is resulting in strong operating profitability levels: Margin − Leading market positi
Slide 72: Significant Upside from Price Increases
SIGNIFICANT UPSIDE FROM PRICE INCREASES An increase in polyolefins prices would generate significant incremental revenues, with proportionate impact on EBITDA Illustrative Impact of PE/PP and Propylene Benchmark Prices on Revenues and EBITDA Commentary (Until Nov-27) Product and Propylene Price Sens
Slide 73: Ethane Feedstock Price Sensitivities
ETHANE FEEDSTOCK PRICE SENSITIVITIES The ethane price formula is linked to PE prices Illustrative Impact of Ethane Feedstock Prices on EBITDA (From Dec-27 Onwards) Commentary Feedstock Price Sensitivities (2021A Production Volumes Adjusted for PP5 Ramp-up) ▪ Linear ethane to PE price relationship Cu
Slide 74: Tax Profile
TAX PROFILE Borouge has a normalized tax rate of 31% Effective Tax Rate Reconciliation(1) Commentary (in $m) 2019A 2020A 2021A 2021PF ▪ B3 benefitted from a tax holiday Profit Before Tax 1,217 1,235 2,123 2,200 until April 2020; from May 2020 Effective Tax Rate 25.0% 23.0% 31.4% n.a. onwards, the t
Slide 75: Capital Expenditure
CAPITAL EXPENDITURE Historical capital expenditure levels on projects that are now completed Capital Expenditure(1) Commentary (in $m) ▪ Maintenance capital expenditure comprises investments to keep assets highly reliable, without change of capacity or adding technical / process capabilities 537 − T
Slide 76: Bridging 2021 Standalone to Pro-Forma Financials
BRIDGING 2021 STANDALONE TO PRO-FORMA FINANCIALS 2021A to 2021PF Bridges Commentary Basis for calculation of Average Revenue Bridge (in $m) Sales Price and hence implied premia over benchmark prices As Reported ▪ PTE charges commission on ADP 102 (14) 405 sales volumes and third-party sales (247) --
Slide 77: Working Capital
WORKING CAPITAL Through-the-cycle, working capital movements are typically balanced out Working Capital Evolution(1) Commentary (in $m) 2019A 2020A 2021A 2021PF(3) Working Capital 607 897 877 919 ▪ Working capital levels are driven by: Prepayments and Other Receivables 58 63 51 867 − DIO: Typically
Slide 78: Cash Flow Generation
CASH FLOW GENERATION Strong track record of increasing cash generation Adj. EBITDA to Operating Free Cashflow to Levered Free Cashflow(1) Commentary (in $m) 2019A 2020A 2021A 2021PF(3) Adj. EBITDA(2) 1,906 1,777 2,633 2,723 ▪ Strong free cash flow generation despite increasing taxes driven by: (-) C
Slide 79: Capital Structure
CAPITAL STRUCTURE Conservative balance sheet structure supporting stable & reliable dividend payment capabilities Capital Structure (FY 2021PF) Commentary (in $m) ADP 2021A PTE 2021A 2021PF(2) . ▪ Borouge has a strong balance sheet Cash and Bank Balances 560 110 671 with flexibility to sustain divid
Slide 80: Key Financial Policies
KEY FINANCIAL POLICIES ▪ Borouge intends to adopt a semi-annual dividend distribution policy, with H1 dividend of the financial year paid out in September of that year and the H2 dividend paid out in March of the following calendar year ▪ Borouge intends to pay the amount of $975m in dividends for t
Slide 81: Medium Term Income Statement Targets
MEDIUM TERM INCOME STATEMENT TARGETS ▪ 2,750ktpa PE capacity and 2,230ktpa PP capacity from 2022 onwards (incl. fully-ramped up PP5 plant and CMP) − Utilization rates of ~95% for PE and ~92% of PP in the near term Sales Volumes Revenues ▪ OCU with ~800ktpa maximum propylene capacity; expected utiliz
Slide 82: Medium Term Free Cash Flow Targets
MEDIUM TERM FREE CASH FLOW TARGETS ▪ Maintenance capital expenditure of ~$180-240m p.a. (at the higher end of this range in turnaround years, at the lower end in non-turnaround years) Capital Expenditure − B1 turnaround completed in Q1 2022, the next turnaround at B2 is scheduled for 2023, at B3 for
Slide 83: Conversion Factors
CONVERSION FACTORS(1) ▪ Ethane / Ethylene: 1.27x Ethane Cracker ▪ Ethane / Propylene: 25.0x ▪ Ethane mmbtu / ton: 44.0 OCU (Olefins ▪ Ethylene / Propylene: 1.00x Conversion Unit) Polyethylene ▪ Ethylene / Polyethylene: 1.00x ▪ Propylene / Polypropylene: 1.00x Polypropylene ▪ Ethylene / Polypropylene
Slide 84: Income Statement
INCOME STATEMENT (in $m) 2019A 2020A 2021A 2021PF Revenues 4,165 4,093 5,477 6,216 COGS (excl. D&A)(1) (1,937) (2,016) (2,276) (2,727) Thereof Feedstock Costs (797) (874) (1,170) (1,170) Thereof Other Fixed & Variable Costs (1,140) (1,142) (1,106) (1,557) Other Income(2) 11 129 26 27 G&A (excl. D&A)
Slide 85: Cash Flow Statement
CASH FLOW STATEMENT (in $m) 2019A 2020A 2021A Profit for the Year 1,043 963 1,459 Adjustments For: D&A(1) 655 514 516 Income Tax Expense 175 272 664 Interest Income (5) (1) (0) Finance Costs 0 1 5 Other Items 44 61 151 Changes in Inventories 77 36 (94) Prepayments and Other Receivables 28 (5) 11 Tra
Slide 86: Balance Sheet
BALANCE SHEET (in $m) 2021A 2021PF 2021A 2021PF Equity 4,844 4,965 Property, Plant and Equipment 7,514 7,555 Bank Loan and Capitalised Lease Liabilities 4,118 4,142 Other Items(1) 204 239 Other(2) 181 211 Non-current Assets 7,717 7,793 Non-current Liabilities 4,299 4,353 Trade and Other Payables 449
Slide 87: Inspiring Tomorrow
INSPIRING TOMORROW -
Slide 88: ss DP
ss DP Borouge