Lyondellbasell Industries Nv · NYSE:LYB
Lyondellbasell Industries Nv — Investor Day (September 2019)
112 slides from Lyondellbasell Industries Nv's investor day presentation, Sep 24, 2019
Slide 1: Investor Day 2019
INVESTOR DAY 2019 September 24, 2019 1
Slide 2: Cautionary Statement
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 to be reasonable at the time made and are subject to significant ris
Slide 3: Agenda
7:30 - 8:30 Welcome David Kinney Leading + Advantaged + Disciplined Bob Patel Q&A Bob Patel, Thomas Aebischer 8:30 - 8:45 Break 8:45 - 10:15 Break-out Sessions Integrated Polymers Ken Lane, Richard Roudeix AGENDA Technology Enabled Products Jim Guilfoyle, Jim Seward Intermediates & Fuels Dan Coombs,
Slide 4: Lunch and Plant Tour
LUNCH AND PLANT TOUR JOIN US FOR LUNCH AND PLANT TOUR - CHANNELVIEW, TX LUNCH Channelview Administration Building PLANT TOUR Channelview Control Room Channelview Plant PO/TBA Plant Construction Site Active Registrated Houston Technology CenterReviewers 57% Users 4
Slide 5: Today's Speakers
TODAY’S SPEAKERS EXPERIENCED INDUSTRY LEADERS Bob Patel Chief Executive Officer Thomas Aebischer Dan Coombs Jim Guilfoyle Ken Lane Torkel Rhenman Richard Roudeix Jim Seward EVP EVP EVP EVP EVP SVP SVP Chief Financial Officer Global Manufacturing, Advanced Polymer Global Olefins & Intermediates & Ole
Slide 6: Investor Day 2019
INVESTOR DAY 2019 6
Slide 7: Building, Investing and Growing
BUILDING, INVESTING AND GROWING OUR FOUNDATIONS AND PROVEN CAPABILITIES FOR VALUE CREATION THE NEW THE STARS SEIZE THE RIGHT PIECES VALUE-DRIVEN LEADING + LYONDELLBASELL ARE ALIGNED MOMENT IN THE GROWTH ADVANTAGED + RIGHT PLACES DISCIPLINED 2010 2011 2013 2015 2017 2019 7
Slide 8: Delivering on Our Strategy
DELIVERING ON OUR STRATEGY CONSISTENT EXECUTION GENERATING VALUE FROM OUR 2017 COMMITMENTS ACHIEVE PRACTICE PRUDENT PURSUE OUR CAPTURE TOP-QUARTILE RELENTLESS COST FINANCIAL PROFITABLE COMMITMENTS OPPORTUNITIES OPERATIONS DISCIPLINE STEWARDSHIP ORGANIC GROWTH Acquired A. Schulman Top-quartile 2.7% $
Slide 9: Performance Snapshot
PERFORMANCE SNAPSHOT DIVERSIFIED PORTFOLIO AND GLOBAL SCALE DRIVING RESILIENT RESULTS $3.6 B $6.0 B REPORTING SEGMENTS EBITDA LTM 2Q19 NET INCOME EBITDA LTM 2Q19 LTM 2Q19 Olefins & Polyolefins – Americas $2,486 MM Olefins & Polyolefins – Europe, Asia, International $1,016 MM Intermediates & Derivati
Slide 10: Compelling Investment Thesis
COMPELLING INVESTMENT THESIS LEADING + ADVANTAGED + DISCIPLINED LEADING global portfolio of proven, flexible and focused businesses in large and growing markets ADVANTAGED global position as the industry’s best operator with expertise and innovation DISCIPLINED capital allocation that supports value
Slide 11: Leading + Advantaged + Disciplined
LEADING + ADVANTAGED + DISCIPLINED LEADING global portfolio of proven, flexible and focused businesses in large and growing markets ADVANTAGED global position as the industry’s best operator with expertise and innovation DISCIPLINED capital allocation that supports value-driven growth 11
Slide 12: Leading and Focused Portfolio
LEADING AND FOCUSED PORTFOLIO GROUPING OUR BUSINESS PORTFOLIO TO UNDERSCORE VALUE INTEGRATED POLYMERS TECHNOLOGY ENABLED PRODUCTS INTERMEDIATES & FUELS EBITDA: $3.5 B EBITDA: $1.4 B EBITDA: $1.0 B Olefins Technology Intermediate Chemicals Polyethylene Advanced Polymer Solutions Oxyfuels & Related Pr
Slide 13: A Global Leader
$37 B A GLOBAL LEADER REVENUE LTM 2Q19 TOP POSITIONS IN THE HEART OF A LARGE AND ATTRACTIVE MARKET SERVICE NAME Credibly administrate technically sound supply chains with effective. 19,500 Quickly negotiate market. #1 #2 #3 EMPLOYEES 2018 PP COMPOUNDS, POLYPROPYLENE, POLYETHYLENE + $4 Trillion POLYO
Slide 14: Resilient Portfolio
RESILIENT PORTFOLIO NATURAL HEDGES AND CYCLICAL OFFSETS DELIVER EARNINGS STABILITY NATURAL HEDGES AND CYCLICAL OFFSETS ● Offsetting feedstocks in North America and Europe reduces impacts from oil price volatility ● High consumer-driven demand exposure reduces recession downside ● Strong operational
Slide 15: Macro Trends Drive Opportunity
MACRO TRENDS DRIVE OPPORTUNITY FOOD SAFETY & ACCESS ADVANCING SOLUTIONS THAT SUPPORT GLOBAL DEMAND INCREASE IN GLOBAL FOOD CLEAN WATER PRODUCTION FROM $3.7 Trillion 800 MM $7 Trillion CLEANER AIR & GLOBAL INFRASTRUCTURE GLOBAL POPULATION in 2019 to FUEL EFFICIENCY INVESTMENT GROWTH Annually, 2019-20
Slide 16: Leading + Advantaged + Disciplined
LEADING + ADVANTAGED + DISCIPLINED LEADING global portfolio of proven, flexible and focused businesses in large and growing markets ADVANTAGED global position as the industry’s best operator with expertise and innovation DISCIPLINED capital allocation that supports value-driven growth 16
Slide 17: Advantaged Position as the Industry's Best Operator
ADVANTAGED POSITION AS THE INDUSTRY’S BEST OPERATOR CULTURE DRIVEN BY RELENTLESS BENCHMARKING AND CONTINUOUS IMPROVEMENT SAFETY OPERATIONAL FEEDSTOCK COMMERCIAL EXPERTISE AND LEADERSHIP EXCELLENCE FLEXIBILITY EXCELLENCE INNOVATION 17
Slide 18: Safety Leadership
SAFETY LEADERSHIP CONSISTENT FOCUS DELIVERS RESULTS Injuries per 200,000 hours worked 0.5 0.4 0.3 0.2 0.1 2015 2016 2017 2018 2Q19 YTD LyondellBasell ACC Top Quartile 18 Source: American Chemistry Council (ACC), LyondellBasell. 2019 ACC data not yet available. Number of hours worked includes employe
Slide 19: Demonstrated Operational Excellence
DEMONSTRATED OPERATIONAL EXCELLENCE BEST OPERATOR IN THE INDUSTRY WITH HIGH ASSET UTILIZATION AND LOW COSTS HIGH ASSET UTILIZATION 2018 OPERATING RATES ● Consistent maintenance through the cycle ETHYLENE 92% ● Optimized turnaround planning ● Increased predictive maintenance POLYMERS 90% ● Continuous
Slide 20: Superior Feedstock Flexibility
SUPERIOR FEEDSTOCK FLEXIBILITY ROBUST FEEDSTOCK OPTIMIZATION ENHANCES PROFITABILITY GLOBAL CRACKER NETWORK Ethylene Production Full-range assets that utilize ethane, propane, butane, y-grade, naphtha, and other advantaged feeds 100% 75% NORTH AMERICA 50% Maximizing value through advantaged feeds in
Slide 21: Proven Commercial Excellence
PROVEN COMMERCIAL EXCELLENCE SHARING DIFFERENTIAL VALUE WITH BUSINESS PARTNERS FOR MUTUAL SUCCESS Jim Teague, CEO Jean-Marc Boursier, COO ENTERPRISE PRODUCTS SUEZ Focus Innovation “The thing I love about LyondellBasell is that they “Innovation is absolutely key for both LyondellBasell know who they
Slide 22: Expertise and Innovation
EXPERTISE AND INNOVATION OUR PRODUCTS AND TECHNOLOGIES HAVE DRIVEN GROWTH IN THE PETROCHEMICAL INDUSTRY FOR 65+ YEARS Start-up of first Partnered with world-scale Introduced SUEZ to create Hyperzone HDPE Spherizone PP Quality Circular plant Developed process Polymers (QCP) Introduced Catalloy proces
Slide 23: Advancing Sustainability
ADVANCING SUSTAINABILITY SERVING CUSTOMER NEEDS AND ADDRESSING SOCIETAL DEMANDS SUSTAINABLE AND PLASTIC WASTE IN THE CLIMATE CHANGE CIRCULAR PRODUCTS ENVIRONMENT Advancing sustainable Developing and deploying meaningful Achieve a 15% reduction in CO2 technologies to create profitable solutions throu
Slide 24: Leading + Advantaged + Disciplined
LEADING + ADVANTAGED + DISCIPLINED LEADING global portfolio of proven, flexible and focused businesses in large and growing markets ADVANTAGED global position as the industry’s best operator with expertise and innovation DISCIPLINED capital allocation that supports value-driven growth 24
Slide 25: Disciplined Capital Allocation
DISCIPLINED CAPITAL ALLOCATION CLEAR FRAMEWORK THAT SUPPORTS VALUE CREATION AND SHAREHOLDER REMUNERATION 1 DIVIDEND Committed to a strong and progressive dividend DIVIDEND $1.4 – 1.5 B 2 SUSTAINING & GROWTH CAPEX Capital investments to sustain and expand our assets INORGANIC INVESTMENTS 2020-2022 SU
Slide 26: Pipeline of Organic Growth
PIPELINE OF ORGANIC GROWTH FOCUS ON TARGETED MID-SIZED AND HIGH-RETURN INVESTMENTS RECENT EXPANSIONS CURRENT PROJECTS FUTURE INVESTMENTS 2013-2019 2019-2021 2024+ U.S. Ethylene 1,000 KT Hyperzone PE 500 KT U.S. Ethylene 250 KT Polyethylene 210 KT PO/TBA 470/1,000 KT Hyperzone PE 500 KT Polypropylene
Slide 27: Disciplined Approach to Inorganic Growth
DISCIPLINED APPROACH TO INORGANIC GROWTH SELECTIVE, FOCUSED AND VALUE-DRIVEN APPLYING OUR AREAS OF VALUE STRENGTHS FOCUS CRITERIA Operational and Commercial Existing, Adjacent or IRR Excellence Downstream Value Chains >12% Lean Cost Structure Feedstock Leveraging Accretive to EPS Process and Product
Slide 28: Moderating Capital Expenditure Profile
MODERATING CAPITAL EXPENDITURE PROFILE COMPLETION OF HYPERZONE AND PO/TBA WILL INCREASE FREE CASH FLOW CAPEX USD, billions 1 2013-2017 INVESTMENTS $3 High-return debottlenecks 2 NEAR-TERM GROWTH INVESTMENTS 2 Hyperzone PE and PO/TBA are the largest investment from 2018 to 2021 1 3 MODEST CAPEX FOREC
Slide 29: Investments Driving Growth and Value
INVESTMENTS DRIVING GROWTH AND VALUE FOCUSED, HIGH-RETURN INVESTMENTS DRIVING EBITDA GROWTH Estimated Annual EBITDA Improvement from 2019 to 2022 USD, billions SMALL-MEDIUM PROJECTS $ 1.5 (>150 Projects) $1.3 B ● Polypropylene debottlenecks ● Energy-saving initiatives 1.0 ● New capacity for compound
Slide 30: Delivering Higher Free Cash Flow
DELIVERING HIGHER FREE CASH FLOW HIGHER EBITDA AND LOWER CAPEX INCREASE FREE CASH FLOW IN 2022 OVER 2019 $1.3 B 80% $1.0 B Higher EBITDA x Cash From Operating = Higher Cash From from Investments Activities Yield from EBITDA Operating Activities + $2.1 B Higher Free Cash Flow $1.1 B Lower CAPEX 30 NO
Slide 31: Leading + Advantaged + Disciplined
LEADING + ADVANTAGED + DISCIPLINED WELL-POSITIONED TO ENHANCE VALUE CREATION RESILIENT LEADING DISCIPLINED TANGIBLE FOCUSED ADVANTAGED FINANCIAL GROWTH PORTFOLIO POSITIONS POLICIES AHEAD Integrated Polymers Best Operator Efficient Cash Generation Small-Medium Projects Technology Enabled Products Att
Slide 32: Questions
QUESTIONS lyondellbasell vancing Possible
Slide 33: Integrated Polymers
INTEGRATED POLYMERS 33
Slide 34: Integrated Polymers
INTEGRATED POLYMERS DELIVERING VALUE THROUGH DIFFERENTIAL PERFORMANCE LEADING ADVANTAGED DISCIPLINED ADVANCING POSITIONS BY DIFFERENTIATION GROWTH SUSTAINABILITY Global portfolio of assets Superior feedstock flexibility, Focused, high-return Innovative business models balancing advantaged operationa
Slide 35: Integrated Polymers
INTEGRATED POLYMERS AN INDUSTRY LEADER WITH A GLOBAL PRESENCE $3.5 B #2 ETHYLENE EBITDA NORTH AMERICA LTM 2Q19 Global Capacity: 7.6 MMton #1 #2 POLYETHYLENE POLYPROPYLENE EUROPE Globally LyondellBasell Sites Global Capacity: 5.3 MMton Global Capacity: 5.5 MMton JV Sites 35 Note: LyondellBasell capac
Slide 36: Advantaged Throughout the Cycle
ADVANTAGED THROUGHOUT THE CYCLE LEVERAGING OUR DIFFERENTIAL PERFORMANCE RECENT HEADWINDS Integrated Polymers Integrated Polymers Annual EBITDA Quarterly EBITDA ● 4Q18 crude oil price decline and destocking USD, billions USD, billions $ 5.0 $ 1.5 ● Global trade uncertainty 4.0 COMPETITIVE ADVANTAGES
Slide 37: Operational Excellence
OPERATIONAL EXCELLENCE Consistent maintenance UTILIZATION EXCEEDING INDUSTRY BENCHMARKS through the cycle 2016-2018 Average Operating Rates 94% ETHYLENE 94% Optimized turnaround NORTH planning AMERICA 93% POLYMERS 91% Continuous process ETHYLENE 94% improvement 92% EUROPE POLYMERS 89% 88% Increased
Slide 38: Feedstock Flexibility
FEEDSTOCK FLEXIBILITY FULL-RANGE ASSETS PROVIDING VALUE FROM ADVANTAGED FEEDSTOCKS NORTH AMERICA Ethane ● Cost-advantaged NGLs supplying our 2 Midwest crackers NORTH ● 3 full-range feedstock crackers in USGC LPG AMERICA ● Y-grade feedstock capable at all 4 USGC crackers Liquids EUROPE ● Capability t
Slide 39: Integrated Polyethylene Profitability
INTEGRATED POLYETHYLENE PROFITABILITY PREMIUM MARGINS THROUGH LOW COSTS AND DIFFERENTIATED PRODUCTS Integrated Polyethylene Margin Above Industry USD/ton $150 OPTIMAL OPERATING COSTS Driven by operational excellence and high feedstock flexibility 100 POLYMER DIFFERENTIATION 50 Targeting premium mark
Slide 40: Global Polyethylene
GLOBAL POLYETHYLENE HIGH OPERATING RATES LIKELY TO PERSIST RECENT PAST Effective Operating Rate ● Consultants predicted low operating rates 2017-2018 100% ●. Typical delays in new capacity maintained high operating rates 95% CURRENT ENVIRONMENT Balanced Market ● Global demand growing by 4% 90% ● Cur
Slide 41: Hyperzone PE Update
HYPERZONE PE UPDATE A NEW PLATFORM FOR GROWTH INVESTMENT STRATEGY ● Delivering the latest generation of LyondellBasell polymer technology ● Providing lightweight, crack-resistant polymers with high processability ● Enabling the production of cost-effective and durable plastics CURRENT STATUS ● Commi
Slide 42: Joint Ventures
JOINT VENTURES HIGH RETURN INVESTMENT PROVIDING A STRONG SOURCE OF CASH FLOW ADVANTAGED JOINT VENTURE BUSINESS MODEL $335 MM $325 MM 95% ● Eight olefin and polyolefin JVs with 5 MMton of total polyolefin capacity DIVIDEND EQUITY INCOME ● Expanding market presence with LyondellBasell-branded products
Slide 43: New China Joint Venture
NEW CHINA JOINT VENTURE HIGH-RETURN PROJECT IN THE FASTEST-GROWING MARKET MOU WITH LIAONING BORA ENTERPRISE GROUP ADVANTAGES ● Serving Chinese domestic market through LyondellBasell marketing network ● Expanding our global network using LyondellBasell technology and catalysts ● Flexible feedstock so
Slide 44: Serving Growing Demand for Sustainable Products
SERVING GROWING DEMAND FOR SUSTAINABLE PRODUCTS QUALITY CIRCULAR PLASTICS (QCP) – AN INNOVATIVE BUSINESS MODEL PARTNERING ON FEEDSTOCKS INNOVATIVE TECHNOLOGY ATTRACTIVE END MARKETS SUEZ providing cleaned, shredded, LyondellBasell applying expertise in Sustainable packaging and products and sorted po
Slide 45: Disciplined Growth Through Investment
DISCIPLINED GROWTH THROUGH INVESTMENT GROWING CASH FLOW IN STRATEGIC MARKETS THROUGH OUR LEADING TECHNOLOGIES RECENT PROJECTS CURRENT PROJECTS FUTURE INVESTMENT 2017-2019 2019-2022 2020+ JV Expansions PP 115 KT Hyperzone PE 500 KT JV Cracker and Polymers in China Debottlenecked NA PP 120 KT JV Spher
Slide 46: Integrated Polymers
INTEGRATED POLYMERS DELIVERING VALUE THROUGH DIFFERENTIAL PERFORMANCE LEADING DIFFERENTIAL DISCIPLINED POSITIONS PERFORMANCE GROWTH Global portfolio of assets Superior feedstock flexibility, Focused, high-return balancing advantaged feedstocks operational excellence and investments supported by and
Slide 47: Technology Enabled Products
TECHNOLOGY ENABLED PRODUCTS 47
Slide 48: Technology Enabled Products
TECHNOLOGY ENABLED PRODUCTS ENHANCING VALUE THROUGH PROPRIETARY TECHNOLOGIES, EXPERTISE AND PRODUCTS LEADING ADVANTAGED DISCIPLINED ADVANCING POSITIONS TECHNOLOGIES GROWTH SUSTAINABILITY Technologies, catalysts and Deep knowledge advancing Focused, high-return Innovative technologies, materials that
Slide 49: Technology Enabled Products
TECHNOLOGY ENABLED PRODUCTS WE ARE AN INDUSTRY LEADER WITH A GLOBAL PRESENCE $1.4 B #1 EBITDA POLYOLEFIN LICENSING LTM 2Q19 GLOBALLY #1 #2 PP COMPOUNDS PROPYLENE OXIDE GLOBALLY GLOBALLY LyondellBasell Sites Global Capacity: 1.2 MMton Global Capacity: 1.3 MMton JV Sites Technology Centers 49 Note: Ly
Slide 50: Advantaged Technologies and Products
ADVANTAGED TECHNOLOGIES AND PRODUCTS GROWING EBITDA THROUGH TECHNOLOGIES AND TAILORED PRODUCTS LICENSED POLYOLEFIN TECHNOLOGIES Technology Enabled Products EBITDA ● Leading process technologies and catalysts for polyethylene and polypropylene USD, billions $ 1.5 PROPRIETARY TECHNOLOGIES ● Cost-advan
Slide 51: Licensed Polyolefin Technologies
LICENSED POLYOLEFIN TECHNOLOGIES IMPROVING PROFITABILITY WITH LICENSING WINS Lyondellbasell's Licensing Share of FAST 70% Polyolefin Capacity COMMERCIALIZATION 45% EBITDA MARGIN 41% VIA OUR GLOBAL TECHNOLOGY SEGMENT NETWORK 36% 2016-2018 Average 30% 28% 21% 30 > 250 NEW GLOBAL LICENSES LICENSES SIGN
Slide 52: Leading Proprietary PO Technology
LEADING PROPRIETARY PO TECHNOLOGY OUR CO-PRODUCT PROPYLENE OXIDE PROCESSES PROVIDE COST ADVANTAGES PROPRIETARY TECHNOLOGY LyondellBasell ● Significantly cost advantaged Processes HPPO Chlorohydrin & ● Supported by expertise and operational experience Cumene Cost of PO Production PO/SM LYONDELLBASELL
Slide 53: PO/TBA Plant Update
PO/TBA PLANT UPDATE DISCIPLINED GROWTH MEETING GLOBAL DEMAND INVESTMENT STRATEGY ● Meeting rising demand for urethanes and clean-burning oxyfuels ● Capturing cost-advantaged U.S. Gulf Coast feedstocks PROJECT MILESTONES AND PLAN ● Broke ground August 2018 ● Estimated investment $2.4 B ● 20% construc
Slide 54: Propylene Oxide End-Use Markets
PROPYLENE OXIDE END-USE MARKETS SERVING DEMAND FOR A WIDE RANGE OF POLYURETHANE AND SOLVENT PRODUCTS Propylene Oxide + Isocyanates Polyurethanes: Foams, coatings, elastomers, etc. 4% Polyurethane global demand growth per year 54
Slide 55: Tailored Products – Advanced Polymer Solutions
TAILORED PRODUCTS – ADVANCED POLYMER SOLUTIONS A PLATFORM FOR GROWTH WITH EXPANDED REACH IN ATTRACTIVE MARKETS Leveraging targeted innovation across the value chain Applying Operational, Platform Expanding in high-growth, Business & Commercial for high-value markets Excellence Growth Delivering Sign
Slide 56: Successful Synergy Capture
SUCCESSFUL SYNERGY CAPTURE INCREASING CASH FLOW THROUGH THE INTEGRATION OF A. SCHULMAN $50 MM $200 MM KEY ENABLERS OF OUR INTEGRATION TOOLKIT ● Focused integration leadership $150 MM ● Centralized integration management office ● Single instance of ERP system ● Tax-efficient structure 55% 30% 15% PRO
Slide 57: Advanced Polymer Solutions
ADVANCED POLYMER SOLUTIONS SERVING A WIDE RANGE OF CUSTOMER APPLICATIONS Polymer Compound Market Revenues and Growth Rates PACKAGING & ELECTRONICS & BUILDING & CONSUMER APPLIANCES AUTOMOTIVE CONSTRUCTION AGRICULTURE $14 B Market $10 B Market $14 B Market $8 B Market $3 B Market 7.9% CAGR 6.7% CAGR 7
Slide 58: Sustainability Initiatives
SUSTAINABILITY INITIATIVES INVESTING IN INNOVATIVE TECHNOLOGY TO END PLASTIC WASTE MECHANICAL RECYCLING QCP through joint venture with SUEZ MOLECULAR RECYCLING Advancing innovation in collaboration with Karlsruhe Institute of Technology CIRCULAR PORTFOLIO Enlarging our circular product portfolio wit
Slide 59: Disciplined Growth Through Investment
DISCIPLINED GROWTH THROUGH INVESTMENT GROWING CASH FLOW IN STRATEGIC MARKETS THROUGH OUR LEADING TECHNOLOGIES PROPRIETARY & LICENSED TAILORED PRODUCTS SUSTAINABLE TECHNOLOGIES TECHNOLOGY Hyperzone PE 500 KT (2019) A. Schulman acquisition (2018) QCP Joint Venture (2018) PO/TBA 470/1,000 KT (2021) APS
Slide 60: Technology Enabled Products
TECHNOLOGY ENABLED PRODUCTS LEVERAGING PROPRIETARY TECHNOLOGIES, EXPERTISE AND PRODUCTS TO ENHANCE VALUE LEADING ADVANTAGED TECHNOLOGY ADVANCING POSITIONS ENABLING GROWTH SUSTAINABILITY A clear leader in our Focused, high-return Innovative technologies, process and product investments that leverage
Slide 61: Intermediates & Fuels
INTERMEDIATES & FUELS lyondellbasell Advancing Possible
Slide 62: Intermediates & Fuels
INTERMEDIATES & FUELS RESILIENT PORTFOLIO OF BUSINESSES CAPABLE OF CAPTURING MARKET OPPORTUNITIES LEADING ADVANTAGED DISCIPLINED ADVANCING POSITIONS TECHNOLOGIES GROWTH SUSTAINABILITY World-scale assets with Proprietary propylene oxide Focused, high-return Sustainable products such as low-cost feeds
Slide 63: Intermediates & Fuels
INTERMEDIATES & FUELS AN INDUSTRY LEADER WITH GLOBAL REACH $1 B #2 OXYFUELS EBITDA GLOBALLY LTM 2Q19 Global Capacity: 3.2 MMton #2 #3 STYRENE METHANOL NORTH AMERICA NORTH AMERICA LyondellBasell Sites Global Capacity: 1.7 MMton Global Capacity: 1.3 MMton JV Sites 63 Note: LyondellBasell capacity incl
Slide 64: Resilient Portfolio
RESILIENT PORTFOLIO INTEGRATED VALUE CHAINS WELL-POSITIONED TO CAPTURE MARKET OPPORTUNITIES OXYFUELS & RELATED PRODUCTS Intermediates & Fuels EBITDA ● High-value, clean-burning fuels upgrading low-cost butane USD, billions $ 1.5 REFINING ● Unique, complex and strategically located refinery 1.0 ● Wel
Slide 65: Oxyfuels & Related Products
OXYFUELS & RELATED PRODUCTS ADVANTAGED FEEDSTOCKS SERVING GLOBAL OCTANE DEMAND U.S. MTBE Upgrade Value DRIVERS & CHALLENGES USD/ton ● Global demand for high-octane gasoline driven by increased fuel efficiency standards $600 ● Ethanol mandate provides competition but reduces air quality benefits 500
Slide 66: Houston Refinery
10 CONSECUTIVE QUARTERS Reliable Operation HOUSTON REFINERY UNIQUE, COMPLEX AND STRATEGICALLY LOCATED 12.5 CAPABILITIES NELSON COMPLEXITY ● Unique refinery with significant hydrotreating and coking capacity ● Facilities for full conversion of heavy, high-sulfur crude oils ● Designed to meet Tier 3 g
Slide 67: IMO 2020 Benefit
IMO 2020 BENEFIT MARINE FUEL OIL REGULATION DRIVING INDUSTRY CHANGE DRIVERS Maya 2-1-1 ● Demand surge for low sulfur marine fuels USD/barrel $35 ● Improved discounts for heavy, sour crude oils 30 ● Our investments are complete and poised to capture benefit 25 MARGIN IMPROVEMENT 20 ● $1 increase in M
Slide 68: Styrene
STYRENE COST-ADVANTAGED PROPYLENE OXIDE CO-PRODUCT Styrene Demand LEVERAGING ADVANTAGES MMton ● Co-product of our advantaged PO technology 40 ● 65% of our capacity utilizes low-cost U.S. feedstocks 30 CHINA OPPORTUNITY 20 ● China represents more than 60% of global demand growth over next 5 years 10
Slide 69: Methanol and Acetyls
METHANOL AND ACETYLS BENEFITTING FROM VERTICALLY INTEGRATED FACILITIES ADVANTAGED POSITION ● All assets utilize low-cost North American feedstocks ● Methanol integration into oxyfuels and acetyls increases to 100% with the new PO/TBA plant in 2021 ● Acetic acid integration into vinyl acetate monomer
Slide 70: Diverse End Uses
DIVERSE END USES INTERMEDIATE CHEMICALS USED IN A WIDE VARIETY OF MARKETS VINYL ACETATE MONOMER OYXFUELS & RELATED STYRENE ACETIC ACID (VAM) PRODUCTS Automotive parts, appliances, Textiles, containers, Adhesives, coatings, paints, Fuel blending components, toys, building insulation, inks, coatings f
Slide 71: Sustainable Bio-Based ETBE
100% BIO-ETHANOL All of our ETBE is produced using bio-based ethanol SUSTAINABLE BIO-BASED ETBE ADVANCING SUSTAINABILITY THROUGH CLEAN-BURNING OXYFUELS AND BIO-BASED ETBE 1.6 MMton CO2 EMMISIONS REDUCED Our ethyl tertiary-butyl ether (ETBE) is a clean burning gasoline component that improves engine
Slide 72: Disciplined Growth Through Investment
DISCIPLINED GROWTH THROUGH INVESTMENT GROWING CASH FLOW IN STRATEGIC MARKETS THROUGH OUR LEADING TECHNOLOGIES WHOLLY-OWNED ASSETS JOINT VENTURE ASSETS PO/TBA 470/1,000 KT (2021) Asia PO/SM (Future) 72
Slide 73: Intermediates & Fuels
INTERMEDIATES & FUELS RESILIENT PORTFOLIO OF BUSINESSES WITH UPSIDE RESILIENT ADVANTAGED TECHNOLOGY IMO 2020 UPSIDE PORTFOLIO ENABLING GROWTH Consistent performance Co-product technologies and Well-positioned to capture across a wide range of integrated value chains market opportunities economic env
Slide 74: Disciplined Approach to Capital Allocation and Value Creation
DISCIPLINED APPROACH TO CAPITAL ALLOCATION AND VALUE CREATION 74
Slide 75: Disciplined Capital Allocation
DISCIPLINED CAPITAL ALLOCATION CLEAR FRAMEWORK THAT SUPPORTS VALUE CREATION AND SHAREHOLDER REMUNERATION 1 DIVIDEND Committed to a strong and progressive dividend DIVIDEND $1.4 – 1.5 B 2 SUSTAINING & GROWTH CAPEX Capital investments to sustain and expand our assets INORGANIC INVESTMENTS 2020-2022 SU
Slide 76: Focused Cost Discipline
FOCUSED COST DISCIPLINE HIGH PRODUCTIVITY DRIVING OUR LEADING COST STRUCTURE COST-FOCUSED CULTURE SG&A as % of Revenue Average 2016-2018 9.3% ● Relentless peer benchmarking 7.9% ● Continuous pursuit of first-quartile performance 6.9% 7.0% HIGHLY TARGETED CUSTOMER SUPPORT 5.0% ● Focus on initiatives
Slide 77: Industry Leading Cash Metrics
INDUSTRY LEADING CASH METRICS EXCEEDING OUR PEERS IN CASH CONVERSION Cash Conversion Cycle (Days) 2016-2018 Average 120 53 Days CASH CONVERSION CYCLE 100 2016-2018 Average 80 17% ETR 60 EFFECTIVE TAX RATE 2019 Forecast 40 20 80% Yield CASH FROM OPERATING ACTIVITIES / EBITDA 2016-2018 Average LYB CE
Slide 78: Leading Cash Generation
LEADING CASH GENERATION STRONG AND CONSISTENT CASH GENERATION IS OUR SPECIALTY Cash from Operating Activities / Average EV 2016-2018 15% CASH GENERATION NORMALIZED FOR SIZE 10% ● Leading the peer group STABLE PERFORMANCE OVER TIME ● 2014-2018 range of 11.4% to 14.1% 5% LYB HUN WLK DOW EMN CE DD Sour
Slide 79: Increasing Cash Flow Profile
INCREASING CASH FLOW PROFILE INCREASED EBITDA AND CAPEX REDUCTIONS ENHANCE FREE CASH FLOW IN 2022 OVER 2019 HIGHER FREE CASH FLOW Estimated Cash from Operating Activities ● Focused high-return organic and inorganic investments driving EBITDA growth USD, billions $6 ● 80% historical average Cash from
Slide 80: Consistent and Disciplined Capital Deployment
CONSISTENT AND DISCIPLINED CAPITAL DEPLOYMENT TRACK RECORD OF STRONG RETURN ON INVESTMENT AND SHAREHOLDER RETURNS GROWTH INORGANIC SHARE ROIC DIVIDENDS CAPEX INVESTMENT REPURCHASES $3.3 B $2.4 B 30% $5.8 B $10.3 B 2015-2018 2015-2018 2015-2018 Average 2015-2018 2015-2018 Note: Inorganic investment o
Slide 81: Secure and Progressive Dividend
SECURE AND PROGRESSIVE DIVIDEND COMMITTED TO A CONSISTENT AND GROWING DIVIDEND $4.15 $4.00 $3.55 $3.33 3x 93% $3.04 DIVIDEND $2.70 CURRENT DIVIDEND YIELD COVERAGE RATIO PERCENTILE OF S&P 500 LTM 2Q19 $2.00 $1.45 4.9% 11 $0.55 QUARTERLY DIVIDEND CURRENT DIVIDEND YIELD INCREASES Since 2011 2011 2012 2
Slide 82: Strong Balance Sheet
STRONG BALANCE SHEET DEMONSTRATING PRUDENT FINANCIAL MANAGEMENT TARGET TOTAL LIQUIDITY CREDIT RATING TOTAL DEBT / EBITDA $6.1 B BBB+/Baa1 1.5x - 2.5x Ample total liquidity supported by One of the strongest credit ratings Manage debt capacity our core credit facilities in our peer group throughout th
Slide 83: Balanced Maturity Profile
BALANCED MATURITY PROFILE THOUGHTFUL APPROACH THAT MINIMIZES FINANCIAL RISK Long-Term Debt USD, billions 1 STRATEGICALLY MANAGED DEBT MATURITIES $ 1.5 Maturities allow for efficient refinancing 1.0 2 DISCIPLINED INTEREST RATE RISK MANAGEMENT Hedges for cross-currency swaps, fixed-to-floating rates a
Slide 84: Leading Portfolio of Focused Businesses
LEADING PORTFOLIO OF FOCUSED BUSINESSES INTEGRATED POLYMERS TECHNOLOGY ENABLED PRODUCTS INTERMEDIATES & FUELS EBITDA: $3.5 B EBITDA: $1.4 B EBITDA: $1.0 B Olefins Technology Intermediate Chemicals Polyethylene Advanced Polymer Solutions Oxyfuels & Related Products Polypropylene Propylene Oxide & Der
Slide 85: Delivering Value Through Disciplined Capital Allocation
DELIVERING VALUE THROUGH DISCIPLINED CAPITAL ALLOCATION LEADING PRUDENT FISCAL DISCIPLINED CASH FLOW MANAGEMENT CAPITAL ALLOCATION Leading cost structure, Solid balance sheet with one Balanced strategy that provides cash flow generation of the strongest credit ratings for both tangible growth and an
Slide 86: Investor Day 2019
INVESTOR DAY 2019 September 24, 2019 86
Slide 87: Leading + Advantaged + Disciplined
LEADING + ADVANTAGED + DISCIPLINED LEADING global portfolio of proven, flexible and focused businesses in large and growing markets ADVANTAGED global position as the industry’s best operator with expertise and innovation DISCIPLINED capital allocation that supports value-driven growth 87
Slide 88: Disciplined Capital Allocation
DISCIPLINED CAPITAL ALLOCATION CLEAR FRAMEWORK THAT SUPPORTS VALUE CREATION AND SHAREHOLDER REMUNERATION 1 DIVIDEND Committed to a strong and progressive dividend DIVIDEND $1.4 – 1.5 B 2 SUSTAINING & GROWTH CAPEX Capital investments to sustain and expand our assets INORGANIC INVESTMENTS 2020-2022 SU
Slide 89: Delivering Higher Free Cash Flow
DELIVERING HIGHER FREE CASH FLOW HIGHER EBITDA AND LOWER CAPEX INCREASE FREE CASH FLOW IN 2022 OVER 2019 $1.3 B 80% $1.0 B Higher EBITDA x Cash From Operating = Higher Cash From from Investments Activities Yield from EBITDA Operating Activities + $2.1 B Higher Free Cash Flow $1.1 B Lower CAPEX 89 NO
Slide 90: Leading + Advantaged + Disciplined
LEADING + ADVANTAGED + DISCIPLINED WELL-POSITIONED TO ENHANCE VALUE CREATION RESILIENT LEADING DISCIPLINED TANGIBLE FOCUSED ADVANTAGED FINANCIAL GROWTH PORTFOLIO POSITIONS POLICIES AHEAD Integrated Polymers Best Operator Efficient Cash Generation Small-Medium Projects Technology Enabled Products Att
Slide 91: Questions
QUESTIONS lyondellbasell vancing Possible
Slide 92: Appendix
APPENDIX lyondellbasell Advancing Possible
Slide 93: Information Related to Financial Measures
INFORMATION RELATED TO FINANCIAL MEASURES This presentation makes reference to certain “non-GAAP” financial measures as defined in Regulation G of the U.S. Securities Exchange Act of 1934, as amended. We report our financial results in accordance with U.S. generally accepted accounting principles, b
Slide 94: Reconciliation of Net Income to EBITDA
Reconciliation of Net Income to EBITDA Last Twelve Months Six Months Ended Ended For the Years Ended December 31, June 30, June 30, June 30, In Millions of Dollars 2014 2015 2016 2017 2018 2018 2019 2019 Net income $ 4,168 $ 4,474 $ 3,837 $ 4,877 $ 4,690 $ 2,885 $ 1,820 $ 3,625 Loss from discontinue
Slide 95: Cash from Operating Activities Yield from EBITDA
Cash from Operating Activities Yield from EBITDA For the Years Ended December 31, In Millions of Dollars 2016 2017 2018 Cash flows from operating activities $ 5,606 $ 5,206 $ 5,471 EBITDA 6,602 7,134 6,867 Cash from operating activities yield from EBITDA 85% 73% 80% Approximate average (2016-2018) 8
Slide 96: EBITDA by Reporting Segments
EBITDA by Reporting Segments EBITDA by Reporting Segment Last Twelve For the Year Months Ended Six Months Ended Ended December 31, June 30, June 30, June 30, In Millions of dollars 2018 2018 2019 2019 Olefins & Polyolefins - Americas $ 2,762 $ 1,427 $ 1,151 $ 2,486 Olefins & Polyolefins - EAI 1,163
Slide 97: EBITDA by Reporting Segment to EBITDA by Platform - LTM June 30, 2019
EBITDA by Reporting Segment to EBITDA by Platform - Last Twelve Months Ended June 30, 2019 EBITDA by Reporting Segment EBITDA by Platform Last Twelve For the Year Months Ended Six Months Ended Ended Last Twelve Months Ended December 31, June 30, June 30, June 30, June 30, In Billions of dollars 2018
Slide 98: EBITDA by Reporting Segment to EBITDA by Platform - 2018
EBITDA by Reporting Segment to EBITDA by Platform - For the Year Ended December 31, 2018 EBITDA by Reporting Segment EBITDA by Platform For the Year Ended For the Year Ended December 31, December 31, In Billions of dollars 2018 2018 Integrated Technology Intermediates Other Total Polymers Enabled &
Slide 99: EBITDA by Reporting Segment to EBITDA by Platform - 2017
EBITDA by Reporting Segment to EBITDA by Platform - For the Year Ended December 31, 2017 EBITDA by Reporting Segment EBITDA by Platform For the Year Ended For the Year Ended December 31, December 31, In Billions of dollars 2017 2017 Integrated Technology Intermediates Other Total Polymers Enabled &
Slide 100: EBITDA by Reporting Segment to EBITDA by Platform - 2016
EBITDA by Reporting Segment to EBITDA by Platform - For the Year Ended December 31, 2016 EBITDA by Reporting Segment EBITDA by Platform For the Year Ended For the Year Ended December 31, December 31, In Billions of dollars 2016 2016 Integrated Technology Intermediates Other Total Polymers Enabled &
Slide 101: EBITDA by Reporting Segments to EBITDA by Platform - Integrated Polymers
EBITDA by Reporting Segments to EBITDA by Platform - Integrated Polymers For the Quarter Ended March 31, June 30, September 30, December 31, March 31, June 30, In Millions of dollars 2018 2018 2018 2018 2019 2019 Olefins & Polyolefins - Americas $ 756 $ 671 $ 704 $ 631 $ 516 $ 635 Olefins & Polyolef
Slide 102: Calculation of Free Operating Cash Flow Yield
Calculation of Free Operating Cash Flow Yield Last Twelve Months June 30, In Millions of Dollars (except share data) 2019 Net cash provided by operating activities $ 4,581 Less: Sustaining (maintenance and HSE) capital expenditures 1,000 Free operating cash flow $ 3,581 Divided by: Market capital: C
Slide 103: Cash Conversion Cycle
Cash Conversion Cycle December 31, In Millions of Dollars 2015 2016 2017 2018 Days Inventory Outstanding: Inventory $ 4,051 $ 3,809 $ 4,217 $ 4,515 Average Inventory 3,930 4,013 4,366 Cost of Goods Sold 23,191 28,059 32,529 Days 365 365 365 Days Inventory Outstanding 62 52 49 Days Sales Outstanding:
Slide 104: Schedule of Spending for Dividends and Share Repurchases
Schedule of Spending for Dividends and Share Repurchases December 31, In Millions of Dollars 2015 2016 2017 2018 Total Dividend paid - common stock $ 1,410 $ 1,395 $ 1,415 $ 1,554 $ 5,774 Repurchases of ordinary shares 4,656 2,938 866 1,854 10,314 Total $ 6,066 $ 4,333 $ 2,281 $ 3,408 $ 16,088 104
Slide 105: Components of Cash and Liquid Investments and Total Liquidity
Components of Cash and Liquid Investments and Total Liquidity August 31, In Millions of dollars 2019 Cash and cash equivalents and restricted cash $ 744 Short-term investments 52 Repurchase agreements 524 Cash and liquid investments 1,320 Availability under Three-Year Term Loan 3,000 Availability un
Slide 106: Calculation of SG&A as a Percent of Revenue
Calculation of Selling, general and administrative expenses (SG&A) as a percent of revenue December 31, Average In Millions of Dollars 2016 2017 2018 (2016-2018) SG&A $ 833 $ 859 $ 1,129 $ 940 Revenue 29,183 34,484 39,004 34,224 SG&A as a percentage of revenue 2.7% 106
Slide 107: Calculation of Dividend Coverage Ratio
Calculation of Dividend Coverage Ratio Last Twelve Months Six Months Ended Ended December 31, June 30, June 30, June 30, In Millions of Dollars 2018 2018 2019 2019 Cash flows from operating activities $ 5,471 $ 2,733 $ 1,843 $ 4,581 Dividends paid - common stock 1,554 787 760 1,527 Dividend Coverage
Slide 108: Calculation of LYB Return on Invested Capital (ROIC)
Calculation of LYB Return on Invested Capital (ROIC) For the Years Ended December 31, In Million of Dollars 2014 2015 2016 2017 2018 Income from continuing operations $ 4,479 $ 3,847 $ 4,895 $ 4,698 Less: Tax benefit due to change in tax law from U.S. Tax Cuts and Jobs Act 819 Non-cash tax settlemen
Slide 109: Calculation of Capital Expenditures
Calculation of Capital Expenditures December 31, In Millions of Dollars 2013 2014 2015 2016 2017 2018 Sustaining CAPEX $ 825 $ 706 $ 815 $ 1,109 $ 1,019 $ 1,052 Growth CAPEX 736 793 625 1,134 528 1,053 Expenditures for property, plant and equipment $ 1,561 $ 1,499 $ 1,440 $ 2,243 $ 1,547 $ 2,105 Ave
Slide 110: Cash from Operating Activities as a Percent of Average Enterprise Value
Calculation of Cash from Operating Activities as a Percent of Average Enterprise Value For the Years Ended December 31, In Millions of Dollars except for common shares Average outstanding 2014 2015 2016 2017 2018 (2016-2018) Cash from Operating Activities $ 6,048 $ 5,842 $ 5,606 $ 5,206 $ 5,471 $ 5,
Slide 111: Calculation of EBITDA Margin
Calculation of EBITDA Margin (EBITDA/Revenue) Last Twelve Last Twelve Months Ended Months Ended June 30, June 30, In Millions of Dollars 2019 2019 Integrated Polymers Intermediates and Fuels EBITDA EBITDA Intermediates & Derivatives - Intermediate Chemicals, Oxyfuels & Related Olefins & Polyolefins
Slide 112: Calculation of Technology Segment EBITDA Margin
Calculation of Technology Reporting Segment EBITDA Margin (EBITDA/Revenue) December 31, In Millions of Dollars 2016 2017 2018 Technology reporting segment EBITDA $ 262 $ 223 $ 328 Revenues 378 341 468 69% 65% 70% Approximate average EBITDA Margin 70% 112
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