Alpek, S.a.b. De C.v. Class A · BMV:ALPEK/A
Alpek, S.a.b. De C.v. Class A — Alpek Sab De Cv Ord — Q4 2021 Earnings Presentation
25 slides from Alpek, S.a.b. De C.v. Class A's earnings presentation, Feb 15, 2022
Slide 1: Fourth Quarter 2021 Earnings Webcast
FOURTH QUARTER 2021 EARNINGS WEBCAST
Slide 2: Today's Speakers
TODAY’S SPEAKERS JOSÉ DE JESÚS VALDEZ JOSÉ CARLOS PONS ALEJANDRO ELIZONDO CEO CFO IRO 3
Slide 3: Topics for Today's Webcast
TOPICS FOR TODAY’S WEBCAST I. Financial Performance II. Octal Acquisition III. 2022 Guidance 4
Slide 4: Integrated PET Margins
INTEGRATED PET MARGINS Chinese & Asian reference margins increased sharply during 4Q21 Asian Margins | Px / MEG to PET (US$/Ton) China +36% 431 • Chinese reference margins 382 370 increased (+US$136/Ton) as power 356 324 330 318 rationing affected local PET 310 277 304 275 production 266 214 250 242
Slide 5: Polypropylene Margins
POLYPROPYLENE MARGINS NA Polypropylene Margins | PP to PGP (cpp) -9% • Reference margins returned to 2Q21 52 47 closing levels as expected 47 • Limited PP supply & high Asian 32 marine freight costs keep margins 25 high 24 22 22 22 22 21 19 20 17 13 15 15 16 • New supply/demand balance 12 12 expecte
Slide 6: 4Q21 Financial Highlights
4Q21 FINANCIAL HIGHLIGHTS • Strong fourth quarter volume of 1.2M tons and record-matching annual volume of 4.8M tons • Record-high Comparable EBITDA of US$300M (+28% QoQ) based on rising reference Polyester & EPS margins • Record-high Annual Comparable EBITDA of US$962M from strong volume & record m
Slide 7: Volume Evolution
VOLUME EVOLUTION Annual & Quarterly Sales Volume (Kton) 0% • Strong demand continues across all 4,802 4,798 1,248 1,230 1,201 1,195 1,172 product categories 883 1,002 256 234 256 271 240 P&C • High quarterly volume during 4Q21 supported record-matching annual volume • Quarterly Polyester volume up 1
Slide 8: Feedstock Costs
FEEDSTOCK COSTS Crude Oil & Paraxylene NA Propylene Contract Price NA Px Brent Contract US$/Bbl US$/Ton cpp -20% 100 1,600 90 Crude Oil (Brent) Px 82 +9% 80 • Brent crude oil price increased (+9% 1,400 +1% 73 QoQ) due to continued strength in 70 67 80 1,200 66 the economy 60 1,000 50 • Paraxylene pr
Slide 9: EBITDA Breakdown
EBITDA BREAKDOWN 4Q21 EBITDA (US$M) +28% • Record Comparable EBITDA of 300 US$300M (+28% QoQ) 2 6 11 25 269 2 • Record Polyester Comparable 234 3 EBITDA for a 4Q of US$160M (+49% 138 105 P&C QoQ) as reference margins strengthened 151 124 4 • Record P&C Comparable EBITDA of 66 US$138M (+11% QoQ) as E
Slide 10: EBITDA Evolution
EBITDA EVOLUTION Annual & Quarterly Comparable EBITDA (US$M) +60% 1,145 324 28% 273 279 269 • Record Annual Comparable EBITDA of US$962M (+60% YoY) from better-than-expected margins 201 across all key products 565 300 • Record Annual Reported EBITDA of 962 US$1,145M up (+103% YoY) due to 234 203 225
Slide 11: Free Cash Flow Generation
FREE CASH FLOW GENERATION Quarterly Free Cash Flow (US$M) 1,323 269 25 1,225 104 • Free Cash Flow of US$226M in 4Q21 due to strong EBITDA 32 51 38 • Reduction in Net Working Capital 23 from lower raw material prices • Extraordinary Dividend payment of US$56M to shareholders in 4Q • Low 4Q CAPEX of U
Slide 12: Net Debt & Leverage
NET DEBT & LEVERAGE Net Debt (US$M) LTM EBITDA (US$M) Net Debt/EBITDA (Times) 1,323 1,247 1,225 2.0 1,185 1,219 1.9 962 1.7 1.6 813 733 1.3 657 601 1,145 2.1 1,077 977 1.6 778 1.3 1.2 565 1.1 4Q20 1Q21 2Q21 3Q21 4Q21 4Q20 1Q21 2Q21 3Q21 4Q21 4Q20 1Q21 2Q21 3Q21 4Q21 Comp. EBITDA Net Debt / Comp. EBI
Slide 13: Standard & Poor's (S&P) Credit Rating Upgrade
STANDARD & POOR’S (S&P) CREDIT RATING UPGRADE • Based on improvement to Business Risk profile • Complemented by strong financial results in 2021 • Alpek committed to its investment-grade rating Rating Baa3 BBB- BBB- Outlook Stable Stable Stable 14
Slide 14: Alpek Signs Agreement to Acquire Octal
ALPEK SIGNS AGREEMENT TO ACQUIRE OCTAL • High-value PET sheet business segment with strong growth prospects • Attractive acquisition multiple leveraging strong financial stability • Proprietary technology with lowest cost & carbon footprint • Increased PET recycling capacity to meet 2025 circularity
Slide 15: Octal: Attractive Multiple & Accretive Value
OCTAL: ATTRACTIVE MULTIPLE & ACCRETIVE VALUE US$620M Purchase price for Octal Material EBITDA1 increase accretive US$135M since year one & before synergies EV/EBITDA multiple2 is highly attractive 4.6x & below industry comparables Leverage3 after acquisition remains <1.6x low given strong results 1)
Slide 16: 2022 Guidance & Key Assumptions
2022 GUIDANCE & KEY ASSUMPTIONS 2022 Change 2021 Guidance (% vs. ‘21) Crude Oil US$/Bbl 81 70 16 Plus normalization, back to higher MARKET Asia PTA/PET Margin US$/Ton 315 359 (12) NA - Asia PET Spread MXN / USD (Avg.) MXN 21.3 20.3 5 Volume Kton 5,000 4,798 4 Comparable EBITDA1 US$M 1,031 962 7 FINA
Slide 17: Q&A
Q&A JOSÉ DE JESÚS VALDEZ JOSÉ CARLOS PONS CEO CFO 18
Slide 18: Appendix
APPENDIX
Slide 19: Extraordinary Effects Breakdown
EXTRAORDINARY EFFECTS BREAKDOWN 2021 2020 Delta M dls 1Q 2Q 3Q 4Q YTD 1Q 2Q 3Q 4Q YTD 1Q 2Q 3Q 4Q YTD Reported EBITDA 324 273 279 269 1,145 111 74 179 201 565 214 199 100 68 581 Inventory Adjustment (63) (18) (22) 11 (92) 17 42 (16) (9) 35 (80) (60) (7) 20 (126) Carry-forward (58) (29) (21) (6) (114
Slide 20: Relevant References | Crude Oil
RELEVANT REFERENCES | CRUDE OIL Price increased as demand for refined products remains strong & supply reduced Brent Crude Oil Price US$/Bbl 120 99 100 80 71 70 66 60 52 54 44 42 40 20 0 2014 2015 2016 2017 2018 2019 2020 2021 21
Slide 21: Relevant References | Paraxylene
RELEVANT REFERENCES | PARAXYLENE Px prices increased (+1%) in line with Crude Oil NA Px Contract Price (US$/Ton) 1,708 1,635 1,641 1,382 +1% 1,174 1,165 1,077 1,064 1,069 992 954 955 996 937 891 876 876 658 685 590 2011 2012 2013 2014 2015 2016 2017 2018 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2019 2020
Slide 22: Relevant References | Propylene
RELEVANT REFERENCES | PROPYLENE Propylene contract prices starting normalization in 4Q21 NA Propylene Contract Price | PGP (cpp) -20% 82 76 71 73 69 67 66 60 51 45 39 39 41 38 37 38 34 35 31 26 11 12 13 14 15 16 17 18 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2019 2020 2021 23
Slide 23: For Additional Information
FOR ADDITIONAL INFORMATION Email: IR@alpek.com | Phone: +52 (818) 748-1146 ALEJANDRO • 11 Years at Alfa/Alpek • Alpek IRO / Corporate Finance Director since 2019 ELIZONDO • Previously held roles as Director of Logistics & Procurement at Indelpro, Director of Energy Markets IRO at Alfa, and Project L
Slide 24: 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 25: Fourth Quarter 2021 Earnings Webcast
FOURTH QUARTER 2021 EARNINGS WEBCAST