Lyondellbasell Industries Nv · NYSE:LYB
Lyondellbasell Industries Nv — Q2 2020 Earnings Presentation
21 slides from Lyondellbasell Industries Nv's earnings presentation, Jul 31, 2020
Slide 1: Second Quarter 2020 Earnings
SECOND QUARTER 2020 EARNINGS July 31, 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 which are believed t
Slide 3: Second Quarter 2020 Highlights
SECOND QUARTER 2020 HIGHLIGHTS STRONG CASH GENERATION DURING CHALLENGING MARKET CONDITIONS $0.3 B $0.8 B $0.94 $1.3 B NET INCOME EBITDA DILUTED EPS CASH FROM OPERATING ACTIVITIES $0.2 B $0.7 B $0.68 NET INCOME ex. LCM EBITDA ex. LCM DILUTED EPS ex. LCM 3
Slide 4: Consistent Safety Focus
CONSISTENT SAFETY FOCUS FACIAL COVERING INCORPORATING BEST PRACTICES FOR VIRUS RESPONSE Injuries per 200,000 hours worked 0.5 0.4 0.3 SOCIAL DISTANCING 0.2 0.1 2016 2017 2018 2019 2Q20 YTD LyondellBasell ACC Top Quartile HEALTH SCREENING 4 Source: American Chemistry Council (ACC) and LyondellBasell.
Slide 5: Advancing Sustainable Technologies
ADVANCING SUSTAINABLE TECHNOLOGIES CREATING PROFITABLE BUSINESS OPPORTUNITIES THROUGH MOLECULAR RECYCLING SUSTAINABLE BUSINESS MODEL ● Recycle impure/multilayer plastic waste into olefin feedstock ● Complements existing mechanical recycling business efforts ● Satisfy growing demand for premium circu
Slide 6: Strong Cash Conversion
STRONG CASH CONVERSION PRIORITIZING LIQUIDITY FOR OPTIONALITY THROUGH BUSINESS CYCLES Cash from Operating Activities 111% USD, billions $7 CASH FROM OPERATING ACTIVITIES / EBITDA ex. LCM 2Q20 LTM 6 5 4 $5.0 B 3 CASH FROM OPERATING ACTIVITIES 2 2Q20 LTM 1 2015 2016 2017 2018 2019 2Q20 LTM 17.6% FREE
Slide 7: Cash Generation and Deployment
CASH GENERATION AND DEPLOYMENT MAXIMIZING CASH FLOW TO SUPPORT REINVESTMENT AND SHAREHOLDER RETURNS USD, billions DELIVERING RESULTS $4 Cash from operating activities $1.3 B 3 $3.2 Reduced working capital $0.6 B 2 GROWING THROUGH INVESTMENT $1.8 Slowing PO/TBA activity during pandemic 1 DELIVERING V
Slide 8: Moderating Capital Expenditure Profile
MODERATING CAPITAL EXPENDITURE PROFILE REDUCING INVESTMENT AND DEFERRING MAINTENANCE $2.7 B $2.4 B $2.1 B 2018-2019 INVESTMENTS 1 ~$1.9 B Hyperzone PE and PO/TBA are the largest investments 2 NEAR-TERM GROWTH INVESTMENTS Slowing PO/TBA activity during pandemic 3 MODERATING CAPEX FORECAST Reducing 20
Slide 9: Actions to Maximize Free Cash Flow
ACTIONS TO MAXIMIZE FREE CASH FLOW Reducing SPENDING REDUCTIONS AND MANAGEMENT DISCIPLINE IMPROVE FREE CASH FLOW IN 2020 2020 CAPEX Deferring $0.85 - 1.05 B planned maintenance $0.40 - 0.50 B $0.45 - 0.55 B Aggressively managing inventories Reduction in Reduction in Improvement in CAPEX Working Capi
Slide 10: Resilient Portfolio
RESILIENT PORTFOLIO DIVERSE GLOBAL BUSINESS PORTFOLIO REMAINS PROFITABLE IN CHALLENGING MARKET EBITDA ex. LCM USD, billions $ 2.0 CONSUMER DRIVEN Majority of portfolio supports non-durables 1.5 DIVERSE 1.0 Global businesses serving multiple industries 0.5 ADVANTAGED Reliable assets with commercial a
Slide 11: Olefins & Polyolefins – Americas
OLEFINS & POLYOLEFINS – AMERICAS REDUCED EXPORT DEMAND DROVE MARGIN AND VOLUME DECLINES EBITDA ex. LCM USD, millions $635 $653 OLEFINS $523 Margin declined due to lower co-product prices $477 Volume declined due to lower demand $210 POLYOLEFINS Margins and volumes declined due to lower demand 2Q19 3
Slide 12: North America Feedstock Advantage
NORTH AMERICA FEEDSTOCK ADVANTAGE ETHYLENE COST CURVE RETURNING TO TYPICAL HISTORICAL CONDITIONS Ethylene Cash Cost USD / ton $1,200 RECENT HISTORICAL ENVIRONMENT 1,000 Typical cost curve with advantaged NA and ME feedstock costs 800 600 APRIL 2020 ENVIRONMENT Low oil prices temporarily flattened co
Slide 13: North American Polypropylene
NORTH AMERICAN POLYPROPYLENE IMPROVING MARKETS FOR AUTOMOTIVE AND CONTINUED STRENGTH IN PACKAGING LYB NA PP Order Book for Automotive Markets, CHINA EUROPE % of plan NEW TIRE DEMAND AUTOMOTIVE PRODUCTION 100% +11% -31% Jun ’20 vs. Jun ‘19 Jun ’20 vs. 75% Pre-COVID Forecast 50% NORTH AMERICA LYB NA P
Slide 14: Olefins & Polyolefins – Europe, Asia & International
OLEFINS & POLYOLEFINS – EUROPE, ASIA & INTERNATIONAL STEADY INTEGRATED MARGINS DESPITE LOWER DEMAND DUE TO PANDEMIC EBITDA ex. LCM USD, millions OLEFINS $331 Volume decreased due to reduced demand $291 Margin lower due to ethylene and co-product prices declining faster than feedstock prices $225 $21
Slide 15: China Joint Venture
CHINA JOINT VENTURE HIGH-RETURN PROJECT IN WORLD’S FASTEST-GROWING MARKET ADVANTAGES ● Serving Chinese domestic market through LyondellBasell marketing network ● Expanding our global network using LyondellBasell technology and catalysts ● Flexible feedstock with naphtha sourced from partner’s adjace
Slide 16: Intermediates & Derivatives
INTERMEDIATES & DERIVATIVES VOLUME AND MARGIN DECLINED DUE TO LOWER OXYFUELS AND DURABLE GOODS DEMAND EBITDA ex. LCM USD, millions PO & DERIVATIVES $448 Volume decreased due to lower polyurethanes demand $390 for automotive, construction and furniture markets $329 $281 OXYFUELS & RELATED PRODUCTS Ma
Slide 17: Transportation Fuel Trends Improving
TRANSPORTATION FUEL TRENDS IMPROVING INCREASED DEMAND FOR OXYFUELS AND GASOLINE AS MOBILITY INCREASES U.S. Gasoline Inventory Utilization & Mileage MMbbl VEHICLE MILEAGE 265 100% Increasing with economy restart and summer travel 260 90% GASOLINE INVENTORIES 255 80% Declining with increased consumpti
Slide 18: Advanced Polymer Solutions
ADVANCED POLYMER SOLUTIONS AUTOMOTIVE MANUFACTURING SHUTDOWNS DROVE VOLUME DECLINES EBITDA ex. LCM USD, millions COMPOUNDING & SOLUTIONS $120 $115 Volume declined due to automotive shutdowns $102 $62 ADVANCED POLYMERS Catalloy volume decreased due to reduced construction $23 and automotive demand IN
Slide 19: Refining
REFINING REDUCED TRANSPORTATION FUEL DEMAND PRESSURED PROFITABILITY EBITDA ex. LCM USD, millions CRUDE THROUGHPUT $22 237 MBPD – impacted by reduced demand $(6) $(14) $(66) MARGIN Coke and sulfur co-product prices maintained pricing relative to crude; hedge gains Maya 2-1-1 decreased by $3.95 to $13
Slide 20: Technology
TECHNOLOGY INCREASED LICENSING REVENUE AND STRONG CATALYST SALES EBITDA USD, millions $138 LICENSING $112 $107 Increased number of revenue milestones $83 CATALYST $56 Volumes increased driven by stocking early in the pandemic 2Q19 3Q19 4Q19 1Q20 2Q20 20
Slide 21: Second Quarter 2020 Summary & Outlook
SECOND QUARTER 2020 SUMMARY & OUTLOOK RESILIENT PORTFOLIO PERFORMING WELL DURING CHALLENGING MARKET CONDITIONS LEADING DISCIPLINED IMPROVING PROACTIVE ADVANTAGED FINANCIAL OUTLOOK BUSINESS POSITIONS STRATEGY RESPONSES Reliable, cost efficient operator Efficient cash generation Increasing fuel, autom
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