57 slides from Alpek, S.a.b. De C.v. Class A's earnings presentation, July 2024
Slide 1: Second Quarter 2024 Institutional Presentation
SECOND QUARTER 2024 Institutional Presentation JULY 2024
Slide 2: Index
INDEX ALPEK AT A GLANCE STRATEGY AND COMPETITIVENESS FINANCIAL RESULTS ESG PROGRESS RELEVANT EVENTS THE CASE FOR PET APPENDIX 2
Slide 3: Alpek Holds Leading Positions Across Two Main Segments
ALPEK HOLDS LEADING POSITIONS ACROSS TWO MAIN SEGMENTS Expandable Styrenics PTA, PET resin, & rPET (EPS & ARCEL®) PLASTICS & CHEMICALS 64% EBITDA 34% EBITDA POLYESTER PET Sheet Polypropylene Specialty Chemicals (PP) & Fertilizers #1 #2 PET Americas #1 PTA & rPET Only PP #1 EPS Worldwide in the Ameri
Slide 4: Our Global Footprint
OUR GLOBAL FOOTPRINT POLYESTER P&C TOTAL CAPACITY BY PRODUCT OTHER EPS + Arcel 6% 6% PP 7% PTA 34% rPET 6% 8.6 9 COUNTRIES M Tons 33 PLANTS 41% +5,500 EMPLOYEES WORLDWIDE PET 4
Slide 5: Index
INDEX ALPEK AT A GLANCE STRATEGY & COMPETITIVENESS FINANCIAL RESULTS ESG PROGRESS RELEVANT EVENTS THE CASE FOR PET APPENDIX 5
Slide 6: Investment Thesis
INVESTMENT THESIS Leadership Polyester & EPS position in the Americas Resilient consumer-oriented products Continuous growth through strategic acquisitions Unique and efficient technologies to produce high-end products Focused and clear strategy led by experienced leadership Strong ESG performance a
Slide 7: Resilient End-Markets Account for 89% of Volume
RESILIENT END-MARKETS ACCOUNT FOR 89% OF VOLUME 95% of sales are dollar-based Volume by Industry 2023 Sales Geography 2023 ASIA & OTHERS Construction 5% ME 3% 2% Textiles 6% EUR 6% Resilient End-Market 89% SA 19% USA/CAN 39% Consumer Goods 20% Food & Beverage 69% MEX 31% Personal Home Food Beverage
Slide 8: Growth Through Key Strategic Acquisitions
GROWTH THROUGH KEY STRATEGIC ACQUISITIONS SALES VOLUME TOTAL CAPACITY OPERATIONS (KTONS) (MTONS) 2012 2023 +13% +32% 20 sites 33 sites 3 countries 9 countries 4,635 8.6 4,086 6.5 2012 2023 2012 2023 2012 2015-2016 2018 2019 2020 2021 2022 IPO (BMV) Styrenics Polyester PET acquisition (UK) Styrenics
Slide 9: Long-Term Strategy Based on Key Pillars
LONG-TERM STRATEGY BASED ON 3 KEY PILLARS 1 STRENGTHEN CORE BUSINESS 3 STRATEGIC & FOCUSED GROWTH Value Chain Product M&A Global Cost Improvement Value-added Products Footprint Optimization GROWTH Integration Innovation Opportunities Zero-Based Budgeting & Shift to products with higher Ensure global
Slide 10: Management with 25+ Years Average Experience
MANAGEMENT WITH 25+ YEARS AVERAGE EXPERIENCE Clear strategy & culture of empowerment ensure efficient operations Jorge Young José Carlos Pons Teresa Quintero CEO (34) CFO (28) CHRO (14) Alejandro Llovera Alejandro Alanis Andreas Plettner David Coindreau Roberto Blanco President President President P
Slide 11: Index
INDEX ALPEK AT A GLANCE STRATEGY & COMPETITIVENESS FINANCIAL RESULTS ESG PROGRESS RELEVANT EVENTS THE CASE FOR PET APPENDIX 11
Slide 12: Financial Results
FINANCIAL RESULTS Sales Volume (KTon) Revenues (US$M) 4,802 4,798 5,065 10,555 4,384 4,635 P&C 7,697 7,759 Others 6,216 5,326 P&C Polyester Polyester 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Reported EBITDA (US$M) CAPEX (US$M) 1,455 862 Comparable 1,396 EBITDA 1,145 662 962 734 789 530 601
Slide 13: 2Q24 Financial Results
2Q24 FINANCIAL RESULTS VOLUME • Both volume & Comp. VOLUME 1,197 1,202 1,202 EBITDA in line with 1.2M TONS Guidance Flat YoY & QoQ • Stable volume, with an 2Q23 1Q24 2Q24 improvement for Polyester COMPARABLE EBITDA1 COMPARABLE EBITDA • Partially offset by temporary $158M -21% disruptions in Altamira
Slide 14: Balance Sheet Accounts
BALANCE SHEET ACCOUNTS Net Working Capital (US$M) Property, Plant and Equipment (US$M) 995 2,488 2,432 2,424 2,402 2,352 751 786 655 679 45 2Q23 3Q23 4Q23 1Q24 2Q24 2Q23 3Q23 4Q23 1Q24 2Q24 Net Debt (US$M) Stockholders’ Equity (US$M) 1,879 1,807 2,664 2,622 1,675 1,729 1,726 IFRS 16 1,967 1,988 1,93
Slide 15: 2Q24 Results: Polyester
2Q24 RESULTS: POLYESTER VOLUME (Kton) COMPARABLE EBITDA (US$M) +2% -20% 127 984 990 107 102 122 • Volume increased mainly 1,000 from a continuation of solid demand • PTA production from Altamira 2Q23 1Q24 2Q24 2Q23 1Q24 2Q24 Reported EBITDA impacted by scheduled PX PRICES REFERENCE MARGINS (US$/ton)
Slide 16: 2Q24 Results: Plastics & Chemicals
2Q24 RESULTS: PLASTICS & CHEMICALS VOLUME COMPARABLE EBITDA (ktons) (US$M) -5% -26% • Volume decrease due to the 70 temporary interruptions in 213 212 202 52 Altamira 43 44 • EPS reference margins recovered, while PP remained flat 2Q23 1Q24 2Q24 2Q23 1Q24 2Q24 Reported EBITDA POLYPROPYLENE EPS (cpp)
Slide 17: EBITDA Breakdown
EBITDA BREAKDOWN 2Q24 EBITDA (US$M) 201 3 +3% 170 2 5 Others 70 154 158 14 4 4 44 P&C 43 52 127 122 Polyester 107 102 2Q23 Comparable 1Q24 Comparable 2Q24 Comparable Inventory Others 2Q24 Reported EBITDA EBITDA EBITDA Adjustment & EBITDA Carry-forward effect 17
Slide 18: Free Cash Flow Generation
FREE CASH FLOW GENERATION FCF YTD (US$M) 1,729 338 20 2 1,726 56 59 77 NWC Improved by $34M in 2Q24, as -$126 126 PP and EPS raw material prices decreased on a sequential basis CAPEX $56 Mainly from scheduled maintenance and well below Guidance INCOME TAX $59 Operating FCF = US$22M Notable reduction
Slide 19: Net Debt & Leverage
NET DEBT & LEVERAGE Net Debt (US$M) LTM EBITDA (US$M) LEVERAGE (TIMES) 1,879 1,807 1,729 1,726 1,102 Comp. EBITDA 1,675 837 734 681 639 3.7 3.4 3.3 827 2.6 646 2.3 514 495 517 2Q23 3Q23 4Q23 1Q24 2Q24 2Q23 3Q23 4Q23 1Q24 2Q24 2Q23 3Q23 4Q23 1Q24 2Q24 19
Slide 20: Healthy Balance Sheet
HEALTHY BALANCE SHEET Consolidated Debt Profile (Jun. 2024) (US$M) Cash Bonds Bank Debt Coupon Coupon 3.250% 5.375% 4.8 YEARS OF DEBT MATURITY Coupon Coupon 600 4.250% 5.375% 503 500 Solid Credit Ratings 417 RATING: OUTLOOK: SL Coupon Loan* 5.375% Baa3 Stable 200 122 BBB- Stable BBB- Stable Cash 202
Slide 21: Index
INDEX ALPEK AT A GLANCE STRATEGY & COMPETITIVENESS FINANCIAL RESULTS ESG PROGRESS RELEVANT EVENTS THE CASE FOR PET APPENDIX 21
Slide 22: Significant Progress Towards Our Main ESG Targets
SIGNIFICANT PROGRESS TOWARDS OUR MAIN ESG TARGETS Scope 1&2 Goal rPET CAPACITY SBTi CO2 Achieved SAFETY (KTA) Scope 1 & 2 Emissions (MTons) (TRIR) +133% 2.77 1.40 300 Bottle to 268 2030 SBTi 1.99 2.01 Flake Target2 115 0.42 Target Top Decile 2019 2023 2025 2019 SBTi Base¹ 2023 2019 2023 Target +17%
Slide 23: Improvement in Our ESG Ratings
IMPROVEMENT IN OUR ESG RATINGS S&P Global CSA B B 1st Low Risk rating 1st improvement in last 5 years B- B- C 29 59 Rating D 26 26 51 54 Risk BBB 19 Rating BB BB Climate Water Supply 2021 2022 2023 20241 2021 2022 2023 2021 2022 2023 Change Chain 2022 2023 25 19 7 90 91 94 Chemical Industry Percenti
Slide 24: Alpek's Recognition Throughout the Years
ALPEK’S RECOGNITION THROUGHOUT THE YEARS ESG RECOGNITION Investor Stewardship Investor Recognition Supplier Award Only Mexican 3rd Place ESG in Winner as Winner in the Inclusion in its company Latin America in Leader Company Innovation Total Mexico ESG featured by the Oil & Gas in Sustainable Catego
Slide 25: Alpek Holds Leading Position in rPET in the Americas
ALPEK HOLDS LEADING POSITION IN rPET IN THE AMERICAS SINGLE PELLET INPUT rPET: TECHNOLOGY® 268 KTA 78 KTA PET SHEET 33 KTA 1 3 FLAKE TO PELLET RECYCLED PET 169 KTA CURRENTLY RECYCLING: TARGET: DISPOSAL 5 300 ktons of 12B bottles, PET bottle recycling aiming for 15B capacity. by 2025 4 2 BOTTLE TO FI
Slide 26: Developing Recycled EPS
DEVELOPING RECYCLED EPS Today we already have: Recycled and DEGRADABLE EPS solutions1 Plans to continue Building recycled capacity Partnerships to improve EPS collection ( ) Products certified compiling global sustainability and Aiming to recycle circularity standards: 14 ktons by 20302 ISCC PLUS: S
Slide 27: New Product: Biovento
NEW PRODUCT: BIOVENTO® Organic fertilizer produced with microorganisms 5 QUALITY PROPERTIES: • Turns nitrogen in the air into nutrients that plants easily absorb • Increases crop production and quality with fast- assimilating nitrogen (100% yield) • Focused on the organic foods market • Outstanding
Slide 28: Index
INDEX ALPEK AT A GLANCE STRATEGY & COMPETITIVENESS FINANCIAL RESULTS ESG PROGRESS RELEVANT EVENTS THE CASE FOR PET APPENDIX 28
Slide 29: Cost Structure Improvement
COST STRUCTURE IMPROVEMENT 100% PROGRESS TOWARDS 2024 GOAL Systems Efficiency Footprint Improved Power Organizational & ACTION: Optimization Supply Agreements Restructuring Centers of Excellence EFFECTIVE BY: 1Q24 1Q24 3Q24 2025+ EXECUTION: Completed Completed Completed On-track $75M Effective by 3Q
Slide 30: Index
INDEX ALPEK AT A GLANCE STRATEGY & COMPETITIVENESS FINANCIAL RESULTS ESG PROGRESS RELEVANT EVENTS THE CASE FOR PET APPENDIX 30
Slide 31: Not All Plastics Are the Same
It’s important to know: Not all plastics are the same PET is #1 for a reason 100% RECYCLABLE HDPE PVC LDPE RECYCLED AT HIGH RATES ONLY PLASTIC THAT CAN BE REMADE BACK TO ITS ORIGINAL PURPOSE PP PS OTHERS HOWEVER, THEY ALL GET BUNDLED TOGETHER, so let’s build The Case for PET! 31
Slide 32: So Much More Than Just Bottles
So much more antibacterial gel bottles than just bottles PET IS A BIG PART OF OUR LIVES AND IS PRESENT facemasks in many OF THE things we use every day jackets You can easily identify PET products, just look for the PERSONAL CARE FRUIT PACKAGING PACKAGING water bottles safety goggles sport shirts ju
Slide 33: The Leading Beverage Packaging Material, CAGR of 5.8% Since 2000
The Leading Beverage Packaging Material, CAGR of 5.8% Since 2000 BEVERAGE PACKAGING INDUSTRY UNITS BY SUSTRATE (B UNITS ) 127 PET + 5.8 % 108 ALUMINUM + 0.44% 31 GLASS – 0.42% 33
Slide 34: PET's Carbon Footprint Is 80% Lower Than Glass or Aluminum
PET’S CARBON FOOTPRINT There’s a big difference when looking at a new bottle... IS 80% LOWER THAN 182 gr. CO 2 187 gr. CO 5.1x 2 4.9x GLASS OR ALUMINUM WHICH MAKES IT THE RIGHT CHOICE FOR THE ENVIRONMENT (YES, REALLY) Let’s put it into 37 gr. CO 2 1.0x perspective» CARBON FOOTPRINT OVER LIFECYCLE, P
Slide 35: PET's Carbon Footprint Is 80% Lower Than Glass or Aluminum
PET’S CARBON FOOTPRINT …that gets even bigger when using recycled materials! IS 80% LOWER THAN GLASS OR ALUMINUM WHICH MAKES IT THE RIGHT CHOICE FOR THE ENVIRONMENT (YES, REALLY) 90 gr. CO 9.0x 2 Let’s put it into 31 gr. CO 2 10 gr. CO 3.0x perspective» 1.0x 2 CARBON FOOTPRINT OVER LIFECYCLE, PER 35
Slide 36: Production Temperature of PET vs. Aluminum or Glass
Just think about the temperature needed to produce PET vs. aluminum OR glass: GLASS IS MADE AT TEMPERATURES HOTTER THAN LAVA. 2,800°F ALUMINUM 1,200°F IS MADE AT A TEMPERATURE HOTTER THAN THE SURFACE OF VENUS. PET 480°F IS MADE AT THE SAME TEMPERATURE NEEDED TO MAKE A NICE SLICE OF PIZZA. 36
Slide 37: CO2 Emissions of Flying vs. Recycling PET Bottles
The CO 2 emissions generated by 1 PERSON flying from NYC to San Francisco is equal to that from recycling 29,600 PET bottles enough to enjoy a drink with every one of your meals for the next 30 years 37
Slide 38: Index
INDEX ALPEK AT A GLANCE STRATEGY & COMPETITIVENESS FINANCIAL RESULTS ESG PROGRESS THE CASE FOR PET RELEVANT EVENTS APPENDIX 38
Slide 39: State-of-the-Art Technology
Conventional Conventional Esterification Oxidation Post- Pre-Poly Oxidation Polymerization Crystallization Filtration and Pelletization Drying Precursosr CTA Storage Storage Precursor Feed Prep Preheating Crystallization Hydrogenation Annealing Crystallization Solid State Filtration and Low-cost pro
Slide 40: Our Global Footprint
OUR GLOBAL FOOTPRINT P PET rPET Country Site PTA Resin Sheet Flake Pellet SPT PP EPS Arcel Other Altamira 1,000 640 240 Mexico Salamanca 360 (3,150) Cosoleacaque 610 185 15 Lerma 100 Fayetteville, NC 170 64 Columbia, SC 640 725 Bay St. Louis, MS 430 15 Richmond, IN 66 31 USA Darlington, SC 26 (2,753
Slide 41: Our Value Chain
OUR VALUE CHAIN 0.66 ton PX 0.84 ton PTA per ton PTA per ton PET 0.80 ton Ethylene per ton EO 0.06 ton Pentane per ton EPS 0.79 ton Benzene per ton Styrene 0.94 ton Styrene 0.29 ton Ethylene per ton EPS (From Natural Gas) per ton Styrene 0.72 ton EO NAPHTHA per ton MEG 0.34 ton MEG per ton PET 1.01
Slide 42: Latest Quarter Results
LATEST QUARTER RESULTS RESULTS AND KEY METRICS 2Q24 1Q24 2Q23 QoQ% YoY% YTD24 YTD23 Ch.% Volume1 (ktons) 1,202 1,202 1,197 - - 2,404 2,358 2 Polyester 1,000 990 984 1 2 1,990 1,923 3 Plastics & Chemicals 202 212 213 (4) (5) 414 435 (5) Production (ktons) 1,586 1,422 1,393 12 14 3,008 2,775 8 Polyest
Slide 43: Results by Quarter
RESULTS BY QUARTER Sales Volume (KTon) Revenues (US$M) 1,359 2,951 1,230 1,177 1,100 1,161 1,202 1,197 1,202 2,457 1,956 2,062 2,050 1,921 1,903 1,691 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 500 Reported EBITDA (US$M) Majority Net Income (US$M) 424 400 110 37 8 31 13 300 270 -6 -26 207 201 200 160 167 158 154 306 1
Slide 44: Balance Sheet Accounts
BALANCE SHEET ACCOUNTS Net Working Capital (US$M) Property, Plant and Equipment (US$M) 1,165 2,502 2,424 876 1,968 1,934 1,914 774 608 655 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Net Debt (US$M) Stockholders’ Equity (US$M) 1,860 2,696 1,729 2,391 2,409 IFRS 16 2,281 1,330 1,967 1,185 1,225
Slide 45: Dividends
DIVIDENDS Total Dividends (US$M) Dividend Yield (%) 494 13.2 500 450 400 9.6 350 8.1 300 274 7.2 250 225 5.9 206 215 5.6 200 176 178 155 160 9.6 150 3.4 3.4 3.0 100 53 50 20 0.0 0.0 0 20141 2015 2016 2017 2018 2019 20202 2021 2022 2023 2024 20141 2015 2016 2017 2018 2019 20202 2021 2022 2023 2024 (1
Slide 46: Latest Quarter Results: Cash Flow and Net Income
LATEST QUARTER RESULTS CASH FLOW < 2Q24 1Q24 2Q23 QoQ% YoY% YTD24 YTD23 Ch.% EBITDA 170 168 148 1 15 338 335 1 Net Working Capital & Others 34 (160) 284 121 (88) (126) 218 (158) CAPEX (22) (34) (75) 33 70 (56) (127) 56 Financial Expenses (40) (36) (45) (11) 10 (77) (86) 11 Income Tax (26) (32) (97)
Slide 47: Relevant References | Paraxylene
RELEVANT REFERENCES | PARAXYLENE Px disconnection increased to $258 per ton Px Contract Price (US$/Ton) 1,837 +4% 1,505 1,462 1,389 1,345 1,352 1,341 1,301 1,293 1,235 1,174 1,033 1,005 1,271 1,110 1,124 1,054 1,034 1,081 1,070 1,055 1,063 1,083 1,001 894 702 857 579 2018 2019 2020 2021 1Q 2Q 3Q 4Q
Slide 48: Relevant References | Integrated PET Margins
RELEVANT REFERENCES | INTEGRATED PET MARGINS Chinese ref. margins remain pressure, while Asian ref. margins continue on the rise PET Integrated Margins | Px / MEG to PET (US$/Ton) 420 410 400 382 359 +3% 338 343 332 306 297 340 285 288 269 322 323 272 317 268 279 223 223 223 225 146 155 154 147 2018
Slide 49: Relevant References | Propylene
RELEVANT REFERENCES | PROPYLENE NA Propylene Contract Price | PGP (cpp) 72 -13% 63 61 54 55 50 45 47 46 47 40 36 33 32 2018 2019 2020 2021 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2022 2023 2024 49
Slide 50: Relevant References | Polypropylene Margins
RELEVANT REFERENCES | POLYPROPYLENE MARGINS Margins remain flat NA Polypropylene Margins | PP to PGP (cpp) 45 38 39 34 22 21 23 - 18 17 17 17 17 15 15 2018 2019 2020 2021 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2022 2023 2024 50
Slide 51: Relevant References | EPS Reference Margins
RELEVANT REFERENCES | EPS REFERENCE MARGINS NA EPS Margin | EPS to Styrene (cpp) 75 64 49 49 44 +40% 36 35 32 31 33 27 26 19 18 2018 2019 2020 2021 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2022 2023 2024 51
Slide 52: Ocean Freight Prices
OCEAN FREIGHT PRICES Recent disruptions in import flows have led to rising ocean freight costs Asia – Americas Spot Ocean Freight Rate (US$/Ton) 600 East Coast West Coast 500 South America 400 300 200 100 0 2018 2019 2020 2021 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2022 2023 2024 52 Source: SCFI, prices base
Slide 53: Stock Highlights (BMV: ALPEK)
STOCK HIGHLIGHTS (BMV: ALPEK) Daily Stock Price (MXN) 35 30 25 Valuation 2021 2022 2023 2Q24 20 15 10 Market Cap. (US$M) 2,282 2,810 2,208 1,625 Jan May Sep Jan May Sep Jan May Net Debt (US$M) 1,225 1,860 1,729 1,726 2022 2023 2024 EBITDA LTM (US$M) 1,145 1,455 514 517 Daily Average Traded Shares &
Slide 54: How To: Integrated PET Reference Margins
HOW TO: INTEGRATED PET REFERENCE MARGINS Methodology based on public information (Bloomberg) 0.66 ton PX per ton PTA 0.84 ton PTA per ton PET Three-Step Guide PET Margin = PET Price – (Yield PET from PTA * PTA Price) – (Yield PET from MEG * MEG Price) PX PTA PET 1 86 890 0.84 710 0.34 610 US$ / PET
Slide 55: Contact Us for Additional Information
CONTACT US FOR ADDITIONAL INFORMATION BÁRBARA AMAYA (+13) ALEJANDRA BUSTAMANTE (+12) IRO | Strategic Planning | Corporate Finance IR Manager bamaya@alpek.com abustamante@alpek.com Email: IR@alpek.com Phone: +52 (818) 748-1146 55
Slide 56: Disclaimer
DISCLAIMER This presentation contains, or may be deemed to contain, “forward-looking statements”. By their nature, forward looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The future results of Alpek
Slide 57: Second Quarter 2024 Institutional Presentation
SECOND QUARTER 2024 Institutional Presentation JULY 2024