Lyondellbasell Industries Nv · NYSE:LYB
Lyondellbasell Industries Nv — Q3 2020 Earnings Presentation
21 slides from Lyondellbasell Industries Nv's earnings presentation, Oct 30, 2020
Slide 1: Third Quarter 2020 Earnings
THIRD QUARTER 2020 EARNINGS October 30, 2020 1
Slide 2: Cautionary Statement and Information Related to Financial Measures
CAUTIONARY STATEMENT AND INFORMATION RELATED TO FINANCIAL MEASURES CAUTIONARY STATEMENT 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 of LyondellBasell wh
Slide 3: Third Quarter 2020 Highlights
THIRD QUARTER 2020 HIGHLIGHTS PRIORITIZING LIQUIDITY DURING CHALLENGING MARKET CONDITIONS $0.1 B $0.5 B $0.33 $5.5 B NET INCOME EBITDA DILUTED EPS LIQUIDITY $0.4 B $0.9 B $1.27 NET INCOME EBITDA DILUTED EPS ex. LCM and Impairment ex. LCM and Impairment ex. LCM and Impairment 3
Slide 4: Consistent Safety Focus
CONSISTENT SAFETY FOCUS FACIAL COVERING BEST PRACTICES SUPPORTING RETURN TO WORK Injuries per 200,000 hours worked 0.5 0.4 0.3 SOCIAL DISTANCING 0.2 0.1 2016 2017 2018 2019 3Q20 YTD LyondellBasell ACC Top Quartile HEALTH SCREENING 4 Source: American Chemistry Council (ACC) and LyondellBasell. Note:
Slide 5: Advancing Sustainability
ADVANCING SUSTAINABILITY SERVING CUSTOMER NEEDS AND ADDRESSING SOCIETAL DEMANDS ELIMINATING PLASTIC WASTE Targeting production and marketing of 2 MM ton of recycled and renewable-based polymers annually by 2030 ADDRESSING CLIMATE CHANGE Targeting a 15% reduction in CO2 equivalent emissions per ton o
Slide 6: Louisiana Integrated PE JV
LOUISIANA INTEGRATED PE JV IMMEDIATE RETURNS FROM NEWLY-BUILT WORLD-SCALE ASSETS ADVANTAGES ● Top-quartile cost positions with established technologies and cyclical upside ● New, well-built and operational assets derisked from project development uncertainties ● Synergy benefits from LyondellBasell’
Slide 7: Proactively Managing Our Debt Portfolio
PROACTIVELY MANAGING OUR DEBT PORTFOLIO CAPTURING FAVORABLE INTEREST RATES Long-Term Debt COMPLETED BOND TRANSACTION USD, billions $3.9 B to fund refinancing and Sasol JV $ 10.0 2.72% weighted average coupon 8.0 HISTORICALLY LOW RATES 6.0 Reduced weighted average interest rate of portfolio by 34 bas
Slide 8: Strong Cash Conversion
STRONG CASH CONVERSION PRIORITIZING LIQUIDITY THROUGH BUSINESS CYCLES Cash from Operating Activities USD, billions 102% CASH FROM OPERATING ACTIVITIES / EBITDA $7 ex. LCM AND IMPAIRMENT 6 3Q20 LTM 5 4 3 $3.9 B CASH FROM OPERATING ACTIVITIES 2 3Q20 LTM 1 2015 2016 2017 2018 2019 3Q20 LTM 12.6% Free O
Slide 9: Cash Generation and Deployment
CASH GENERATION AND DEPLOYMENT MAXIMIZING CASH FLOW TO SUPPORT SHAREHOLDER RETURNS USD, billions $5 DELIVERING RESULTS Cash from operating activities $0.8 B 4 GROWING THROUGH INVESTMENT 3 $3.2 $2.8 Slowed PO/TBA activity during pandemic 2 Established Bora JV in China 1 DELIVERING VALUE FOR SHAREHOLD
Slide 10: Resilient Portfolio
RESILIENT PORTFOLIO DIVERSE GLOBAL BUSINESSES REFLECTING INITIAL STAGES OF ECONOMIC RECOVERY EBITDA ex. LCM and Impairment USD, billions $2.0 STRONG CONSUMER DRIVEN DEMAND Packaging and non-durable products 1.5 RECOVERING INDUSTRIAL SECTOR 1.0 Automotive and other durable products 0.5 REDUCED MOBILI
Slide 11: Global Polyethylene Market
GLOBAL POLYETHYLENE MARKET DEMAND GROWTH CONTINUES DESPITE PANDEMIC AND RECESSION Polyethylene Year-over-Year Demand Growth YTD 3Q20 4% GROWING DEMAND Asia growth drawing exports from North America 2% 1% CONSTRAINED SUPPLY Tight North American market impacted by Hurricane Laura and low 2Q utilizatio
Slide 12: Transportation Trends
Sep 2020 vs. Sep 2019 TRANSPORTATION TRENDS 10% REBOUND IN AIRLINE TRAVEL NEEDED FOR FULL REFINING UTILIZATION U.S. GASOLINE & DIESEL Transportation Trends CONSUMPTION % of Same month in 2019 120% 100% 40% 80% U.S. JET FUEL CONSUMPTION 60% 40% 10% 20% U.S. GASOLINE & JET FUEL INVENTORY 0% Jan 20 Feb
Slide 13: Recovering Market Environment
RECOVERING MARKET ENVIRONMENT IMPROVED THIRD QUARTER SALES VOLUMES USD, millions $1,513 $888 VOLUME INTACT LyondellBasell recovered to prior year levels 3Q19 Volumes O&P, APS, Tech Transportation 3Q20 EBITDA & Other I&D Fuels Margins EBITDA ex. LCM Margins ex. LCM and Impairment $888 MARGINS MIXED $
Slide 14: Olefins & Polyolefins – Americas
OLEFINS & POLYOLEFINS – AMERICAS INTEGRATED POLYETHYLENE MARGIN AND VOLUME BENEFITTING FROM IMPROVED DEMAND EBITDA ex. LCM USD, millions OLEFINS $653 Higher ethylene prices driven by tight supply $523 Volumes increased due to higher demand $477 $404 POLYOLEFINS $210 Polyethylene margins and volumes
Slide 15: Olefins & Polyolefins – Europe, Asia & International
OLEFINS & POLYOLEFINS – EUROPE, ASIA & INTERNATIONAL CRACKER MARGINS CHALLENGED BY INCREASING FEEDSTOCK COSTS EBITDA ex. LCM USD, millions $291 OLEFINS $225 $219 Margins lower due to higher crude oil driven feedstock prices $144 $131 POLYOLEFINS Polyethylene volume decreased Polypropylene spread dec
Slide 16: Intermediates & Derivatives
INTERMEDIATES & DERIVATIVES VOLUME IMPROVED WITH INCREASED DURABLE GOODS DEMAND EBITDA ex. LCM USD, millions PO & DERIVATIVES $390 Volumes increased due to higher polyurethanes demand from automotive, construction and furniture markets $329 $281 $245 INTERMEDIATE CHEMICALS Volumes increased with com
Slide 17: Advanced Polymer Solutions
ADVANCED POLYMER SOLUTIONS REBOUNDING AUTOMOTIVE MANUFACTURING DROVE VOLUME IMPROVEMENTS EBITDA ex. LCM USD, millions COMPOUNDING & SOLUTIONS Volumes increased with automotive restarts $115 $117 $102 INTEGRATION COSTS $62 $7 MM in 3Q20 $23 SYNERGIES >$200 MM annual run rate Increasing visibility as
Slide 18: Refining
REFINING LOWER DEMAND FOR GASOLINE AND JET FUEL PRESSURING PROFITABILITY EBITDA ex. LCM and Impairment USD, millions $(14) $22 CRUDE THROUGHPUT $(6) $(80) 81% utilization rate matching reduced demand $(121) MARGIN Lower crack spreads; absence of 2Q20 hedge gains Maya 2-1-1 decreased by $3.38 to $9.8
Slide 19: Technology
TECHNOLOGY LICENSING AND CATALYST PROFITABILITY SIMILAR TO PRIOR QUARTER EBITDA USD, millions $138 $112 $111 LICENSING Increased number of revenue milestones $83 $56 CATALYST Margins decreased Volumes decreased as customers utilized inventories built during 2Q 3Q19 4Q19 1Q20 2Q20 3Q20 19
Slide 20: Disciplined Investments Driving Growth and Value
DISCIPLINED INVESTMENTS DRIVING GROWTH AND VALUE HIGHER EBITDA AND LOWER CAPEX: A CLEAR STRATEGY FOR INCREASING FREE CASH FLOW 2023 2022 4Q 2020 PO/TBA Sinopec PO/SM JV 4Q 2020 Louisiana Channelview, Texas Ningbo, China 3Q 2020 Advanced Integrated PE JV Bayport, Texas Estimated EBITDA 2Q 2020 Bora I
Slide 21: Third Quarter 2020 Summary & Outlook
THIRD QUARTER 2020 SUMMARY & OUTLOOK WELL POSITIONED PORTFOLIO CAPTURING VALUE AND MAXIMIZING FREE CASH FLOW LEADING ADVANTAGED RECOVERING CONSISTENT MAXIMIZE POSITIONS ECONOMIES FINANCIAL STRATEGY FREE CASH FLOW Prioritizing APS synergies Reliable, cost efficient operator Growing Asia PE demand inv
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