Orbia Advance Corp. Sab De Cv · BMV:ORBIA
Orbia Advance Corp. Sab De Cv — Corporate Update (October 2024)
13 slides from Orbia Advance Corp. Sab De Cv's corporate update, Oct 24, 2024
Slide 1: Business Update
Business Update Thursday, October 24, 2024
Slide 2: Safe Harbor
Safe Harbor In addition to historical information, this presentation contains "forward-looking" statements that reflect management's expectations for the future. The words “anticipate,” “believe,” “expect,” “hope,” “have the intention of,” “might,” “plan,” “should” and similar expressions generally
Slide 3: Executive summary
Executive summary In consideration of weaker market conditions, Orbia is focused on actions to improve earnings power, strengthen its balance sheet and deliver on long-term growth opportunities • Orbia expects to end 2024 with adjusted1 EBITDA of $1.15B–$1.20B due to weak market conditions • Priorit
Slide 4: 2024 EBITDA impacted by weak market conditions
2024 EBITDA impacted by weak market conditions Market headwinds across multiple businesses have contributed to lower performance PVC pricing European building permits issued U.S. net farm income (USD per Ton) (´000 per year) ($B USD per year) $1,600 2000 250 $1,200 1500 200 150 $800 1000 100 $400 50
Slide 5: Cost savings initiatives implemented to deliver a total of ~$250M/year by 2027
Cost savings initiatives implemented to deliver a total of ~$250M1/year by 2027 $85M/year to be contributed in 2024, with incremental savings of ~$165M/year by 2027 Manufacturing ü Optimizing assets in the Americas and Europe, across several businesses cost reductions ü Pursuing supply chain and log
Slide 6: Completed growth investments to deliver returns in near term
Completed growth investments to deliver returns in near term Orbia expects~$150M+/year in incremental EBITDA from largely completed growth projects ramping up from 2025 to 2027 Business Key Growth 2027 Expected Group Projects EBITDA Polymer • Specialty PVC capacity development $30M+ Solutions • Semi
Slide 7: Savings and growth initiatives set to increase earnings power to ~$1.5B by 2027
Savings and growth initiatives set to increase earnings power to ~$1.5B by 2027 (excluding market recovery) • Savings on track with 1600 ~1/3 delivered in 2024 1500 ~115 1,465–1,515 • Growth to be achieved 1400 ~100 1,350–1,400 through largely completed projects 1300 ~100 1,250–1,300 1200 1,150–1,20
Slide 8: Reduce capital expenditures to $450M or less for 2025 and 2026
Reduce capital expenditures to $450M or less for 2025 and 2026 Focused on safety, asset integrity and highly selective growth projects with CapEx/EBITDA < 3x CapEx Spend 2025 CapEx per business group 40% 450–480 Fluor & Energy 450 Materials 190–220 220 190 5% Precision Agriculture 450 7% Connectivit
Slide 9: Actions will allow Orbia to generate ~$350-400M of cash through 2026
Actions will allow Orbia to generate ~$350-400M of cash through 2026 (excludes potential market recovery) Debt reduction is first priority Cumulative figures for 2025 and 2026 2,600–2,700 2,755 1,560–1,620 1,653 Cash available to debt and equity holders (900) 460–520 553 150 443 350–410 (200) (260)
Slide 10: Orbia aims to reduce debt by more than $350M through 2026
Orbia aims to reduce debt by more than $350M through 2026 (excludes potential market recovery) Any market recovery through 2026 would help reduce leverage ratio further $3,695 3,695 3.36x ~2.20x ~2.40x $3,270 3,285–3,345 -$425 (350–410) Net Debt Q3´24 Q3 24 Cash available to reduce debt Net Debt aft
Slide 11: Market recovery could deliver $250-500M+ per year incremental earnings
Market recovery could deliver $250-500M+ per year incremental earnings through improved utilization and pricing Interest rate reductions positively benefit all businesses Specific factors improving Incremental Business Group Drivers for market recovery earnings power EBITDA Impact Polymer • Demand r
Slide 12: Investments in PVDF and LiPF6 expected to contribute to earnings by 2028/early 2029
Investments in PVDF and LiPF61 are expected to contribute to earnings by 2028/early 2029 Orbia is uniquely positioned to secure the North American supply chain for fluorinated battery materials Electrolyte Specialty electrolyte business additives operational, with increase in capacity >20% CAGR Lith
Slide 13: Orbia is a company driven by a shared purpose: to advance life around the world
Orbia is a company driven by a shared purpose: to advance life around the world. The five Orbia business groups have a collective focus on expanding access to health and well-being, reinventing the future of cities and homes, ensuring food, water and sanitation security, connecting communities to in