Lyondellbasell Industries Nv · NYSE:LYB
Lyondellbasell Industries Nv — Q1 2020 Earnings Presentation
22 slides from Lyondellbasell Industries Nv's earnings presentation, May 1, 2020
Slide 1: First Quarter 2020 Earnings
FIRST QUARTER 2020 EARNINGS May 1, 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: First Quarter 2020 Highlights
FIRST QUARTER 2020 HIGHLIGHTS RESILIENT PORTFOLIO THAT IS WELL POSITIONED FOR CHALLENGING MARKETS $0.1 B $0.6 B $0.42 $0.4 B NET INCOME EBITDA DILUTED EPS DIVIDENDS $0.5 B $1.1 B $1.47 NET INCOME ex. LCM EBITDA ex. LCM DILUTED EPS ex. LCM 3
Slide 4: Impact of COVID-19 and Oil Price Volatility
IMPACT OF COVID-19 AND OIL PRICE VOLATILITY LYONDELLBASELL IS TAKING ACTION TO MITIGATE MARKET EFFECTS ACTIONS STATE OF WE ARE TAKING 1Q20 MARKET CURRENT OPERATIONS IMPACTS Implemented recommended All major sites operating Declining fuel, automotive and durables safe work practices market demand Sev
Slide 5: Plastic Packaging Market Indicators
PLASTIC PACKAGING MARKET INDICATORS CONSUMER HABITS EXPECTED TO CHANGE Sales USD % Change 250% ~40% 200% WILL WORK FROM HOME 150% MORE OFTEN 100% ~65% 50% WILL EAT AT HOME 0% MORE OFTEN Jan-Feb 8-Mar 15-Mar 22-Mar 29-Mar 5-Apr 2020 Paper products Healthcare Goods Packaged Food Dairy Frozen PANTRY ST
Slide 6: Consistent Safety Focus
CONSISTENT SAFETY FOCUS INDUSTRIAL HYGIENE 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 1Q20 LyondellBasell ACC Top Quartile HEALTH MONITORING 6 Source: American Chemistry Council (ACC) and LyondellBasell.
Slide 7: Our Products Support the Fight Against COVID-19
OUR PRODUCTS SUPPORT THE FIGHT AGAINST COVID-19 CHEMICALS AND PLASTICS SUPPORT ESSENTIAL NEEDS FOR SOCIETY MELT-BLOWN POLYPROPYLENE ALCOHOLS POLYOLEFINS Face Masks Hand Sanitizer Test Kits & Medical Devices 7
Slide 8: Strong Cash Conversion
STRONG CASH CONVERSION DELIVERING TYPICAL PATTERN OF CASH FROM OPERATING ACTIVITIES Cash from Operating Activities USD, billions 90% $7 CASH FROM OPERATING ACTIVITIES / EBITDA ex. LCM 6 1Q20 LTM 5 4 $4.8 B 3 CASH FROM OPERATING ACTIVITIES 2 1Q20 LTM 1 2015 2016 2017 2018 2019 1Q20 LTM $3.8 B Free Op
Slide 9: Cash Generation and Deployment
CASH GENERATION AND DEPLOYMENT CASH FLOW SUPPORTING ACCRETIVE INVESTMENTS AND SHAREHOLDER RETURNS USD, billions $4 DELIVERING RESULTS Cash from operating activities $0.5 B 3 GROWING THROUGH INVESTMENT 2 $1.8 Building PO/TBA plant 1 $1.1 RETURNING VALUE TO SHAREHOLDERS Dividends $351 MM 1Q20 Cash fro
Slide 10: Maximizing Liquidity
MAXIMIZING LIQUIDITY LYONDELLBASELL IS PREPARED FOR A RANGE OF SCENARIOS ACTIONS SUPPORTING ACTIONS REDUCING CASH INFLOW CASH OUTFLOW Accelerating cost efficiency initiatives Reducing 2020 CAPEX by $500 MM Increased liquidity by $2 B to more than $5 B Deferring planned maintenance Aggressively manag
Slide 11: Strong Balance Sheet
STRONG BALANCE SHEET DEMONSTRATING PRUDENT FINANCIAL MANAGEMENT Long-Term Debt USD, billions $ 3.5 ROBUST LIQUIDITY Total liquidity >$5 B 3.0 April 24, 2020 2.5 2.0 MODERATE LEVERAGE RATIO Total debt / EBITDA ex. LCM 2.5x 1.5 1Q20 LTM 1.0 0.5 STRONG INVESTMENT GRADE Credit rating BBB/Baa1 2021 2022
Slide 12: Updated 2020 Modeling Information
UPDATED 2020 MODELING INFORMATION FINANCIAL Sustaining CAPEX METRICS CAPITAL Total CAPEX ~$0.8 B EXPENDITURES Profit Generating CAPEX ~$1.9 B Interest Expense ~$1.1 B ~$410 MM Depreciation & Amortization ~$1.5 B 1Q 2Q 3Q 4Q Pension Contribution ~$80 MM MAJOR O&P - Americas ~$25 MM ~$30 MM PLANNED Pe
Slide 13: Resilient Portfolio
RESILIENT PORTFOLIO DIVERSE GLOBAL BUSINESS PORTFOLIO PROVIDES STABILITY EBITDA ex. LCM USD, billions $ 2.0 CONSUMER DRIVEN Majority of portfolio supports non-durables 1.5 CHALLENGING 1.0 Market conditions 0.5 ADVANTAGED Reliable assets with feedstock flexibility 1Q19 2Q19 3Q19 4Q19 1Q20 EBITDA EBIT
Slide 14: 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 100% and other advantaged feeds 75% NORTH AMERICA 50% Advantaged feeds in both the U.S. Gulf Coast a
Slide 15: Feedstock Flexibility Provides Margin Benefits
FEEDSTOCK FLEXIBILITY PROVIDES MARGIN BENEFITS DIVERSE GLOBAL BUSINESS PORTFOLIO PROVIDES RESILIENCE North America Integrated PE Margin USD / ton $1,000 800 600 NORTH AMERICA 400 Maximizing value by optimizing feedstocks in our 200 20 17 20 18 20 19 Ja n 2 0 Feb2 0 Mar 2 0 Apr20 flexible crackers -2
Slide 16: Olefins & Polyolefins – Americas
OLEFINS & POLYOLEFINS – AMERICAS STRONG DEMAND SUPPORTED SEASONAL POLYETHYLENE PRICE INCREASE EBITDA ex. LCM USD, millions $635 $653 OLEFINS $516 $523 Margin declined due lower ethylene prices partially offset $477 by decreased feedstock prices Volume declined due to planned maintenance POLYOLEFINS
Slide 17: Olefins & Polyolefins – Europe, Asia & International
OLEFINS & POLYOLEFINS – EUROPE, ASIA & INTERNATIONAL LOWER FEEDSTOCK COSTS, INCREASED RELIABILITY AND HIGHER VOLUMES DROVE SEQUENTIAL IMPROVEMENT EBITDA ex. LCM USD, millions OLEFINS $331 Margin improved due to lower feedstock prices $296 $291 Volume increased due to improved reliability $225 POLYOL
Slide 18: Intermediates & Derivatives
INTERMEDIATES & DERIVATIVES OXYFUELS MARGINS DECLINED DUE TO LOWER GASOLINE DEMAND IN MARCH EBITDA ex. LCM USD, millions PO & DERIVATIVES Volume and margin increased due to U.S. demand and industry outages $448 $390 $390 $329 INTERMEDIATE CHEMICALS $281 Margins increased, mostly in acetyls Volume de
Slide 19: Advanced Polymer Solutions
ADVANCED POLYMER SOLUTIONS SEASONAL IMPROVEMENTS MUTED BY LOW DEMAND AND SHUTDOWNS IN AUTOMOTIVE END MARKETS EBITDA ex. LCM USD, millions COMPOUNDING & SOLUTIONS $148 Continued low automotive demand and COVID-19 impact $120 $115 Margins and volumes increased $102 ADVANCED POLYMERS $62 Catalloy volum
Slide 20: Refining
REFINING DIMINISHED MARGINS, LOWER VOLUME AND FCC OUTAGE STRESSED PROFITABILITY EBITDA ex. LCM USD, millions $22 CRUDE THROUGHPUT $(15) $(6) 226 MBPD – impacted by unplanned maintenance $(66) $(80) MARGIN DECLINE Maya 2-1-1 decreased by $2.23 to $17.21 Inability to upgrade fuels during FCC outage 1Q
Slide 21: Technology
TECHNOLOGY LICENSING IMPACTED BY REVENUE TIMING WITH CONTINUED STRONG CATALYST SALES EBITDA USD, millions $138 LICENSING $107 Reduced number of revenue milestones in 1Q20 versus $83 $83 significant milestones reached in 4Q19 $56 CATALYST Continued strong catalyst volumes 1Q19 2Q19 3Q19 4Q19 1Q20 21
Slide 22: First Quarter 2020 Summary & Outlook
FIRST QUARTER 2020 SUMMARY & OUTLOOK RESILIENT PORTFOLIO THAT IS WELL POSITIONED FOR CHALLENGING MARKETS LEADING DISCIPLINED CHALLENGING PROACTIVE ADVANTAGED FINANCIAL OUTLOOK BUSINESS POSITIONS POLICIES RESPONSES Reliable, cost efficient operator Efficient cash generation Declining fuel, automotive
LyondellBasell Industries — Q1 2020 Earnings Presentation on 6ix