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 — Q3 2020 Earnings Presentation
24 slides from Alpek, S.a.b. De C.v. Class A's earnings presentation, Oct 21, 2020
Slide 1: Third Quarter 2020 Earnings Webcast
THIRD QUARTER 2020 EARNINGS WEBCAST
Slide 2: Today's Speakers
Today’s Speakers José de Jesús Valdez José Carlos Pons Alejandro Elizondo CEO CFO IRO 2
Slide 3: Topics for Today's Webcast
Topics for Today’s Webcast I. COVID-19 Update II. Financial Performance III. ALFA’s Unlocking Value Initiative IV. Acquisition of NOVA Chemicals’ Styrenics Business 3
Slide 4: COVID-19 Update
COVID-19 Update Feedstock • Higher refined product demand has resulted in + Prices price increases for Crude Oil and Px • Positive Inventory Adjustment and RMCF effects in 3Q20 Polyester • Integrated PET Margins normalized as Asian = Margins supply has fully recovered (-19% QoQ) Operations • Alpek’s
Slide 5: 3Q20 Financial Highlights
3Q20 Financial Highlights • Record high overall volume of 1,260 thousand tons (+14% QoQ) as a result of strong PET demand & fast recovery in P&C • Strong Alpek performance best explained as Comparable EBITDA excl. RMCF improved to U.S. $154 million (+3% QoQ) as a result of high volume & record low P
Slide 6: EBITDA Evolution
EBITDA Evolution Alpek EBITDA (US$M) 356 CoGen Sale 231 • Comparable EBITDA excluding 217 188 RMCF1 of US$154M (+3% QoQ) 213 +3.2% 173 • Quarter on quarter improvement 167 189 as stronger total volume (+14% 149 154 QoQ) more than offset Polyester 172 147 160 margins (-19%) 148 127 • Comparable EBITD
Slide 7: Feedstock Costs
Feedstock Costs Crude Oil, Px and Propylene prices all rose in 3Q20 Crude Oil and Paraxylene Naphtha-Px Margin NA Propylene Contract Price NA Px Brent Contract US$/Bbl US$/Ton US$/Ton cpp +33% 80 1,600 600 40 38 38 550 37 35 35 1,400 35 500 31 30 1,200 60 400 26 366 25 1,000 316 -34% 300 20 261 262
Slide 8: EBITDA Breakdown
EBITDA Breakdown Alpek 3Q20 EBITDA (US$M) 231 Others • Record high volume from strong PET demand & fast recovery in P&C 65 P&C +3% 179 3 160 16 • Polyester Comp. EBITDA excl. 154 6 149 RMCF of US$95M (-7% QOQ) 67 46 56 56 • Positive RMCF & Inventory Adjustment effects from Px and Propylene price inc
Slide 9: Free Cash Flow Generation
Free Cash Flow Generation US$M 1,330 364 • Alpek with emphasis on financial 50 1,235 stability and strong liquidity 163 • FCF year-to-date of US$309M 65 (+US$386M vs. Guidance) 183 97 76 • NWC +US$183M year-to-date (+US$306M vs. Guidance) • CAPEX of US$65M (-58% YTD & -US$127M vs. Guidance) • Recove
Slide 10: Continuously improving financial performance
Continuously improving financial performance Net Debt decreased by 14% as Leverage remains at strong levels Net Debt (US$M) LTM EBITDA (US$M) Net Debt/EBITDA (Times) 2,084 2,036 944 2.4 864 2.2 850 821 -14% 1.9 735 719 1.7 1.7 1,436 1,428 1.6 1,330 1,235 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 2Q19 3Q19 4Q19
Slide 11: ALFA's Unlocking Value Initiative
ALFA’s Unlocking Value Initiative Nemak Axtel Lower Alpek Spin-off Sale Debt Spin-off 2020 TBD TBD TBD Alpek’s • Spin-off not expected in next 12 months Transition Plan • Working on becoming fully independent from ALFA’s corporate services Potential • No impact expected to Alpek’s SG&A Impact & Bene
Slide 12: Acquisition of NOVA Chemicals' Expandable Styrenics Business
Acquisition of NOVA Chemicals’ Expandable Styrenics Business 204 529 36 ARCEL® EPS 168 20 19 325 46 240 NOVA KTA MEX BRA CHI ARG Pre- USA Post- Acquisition Acquisition Strengthen Foster Circular Strategic & Core Business Economy Focused Growth ✓ Global Cost Improvement ✓ Sustainable Product ✓ Value
Slide 13: 4Q20 Outlook
4Q20 OUTLOOK 13
Slide 14: Q&A
Q&A José de Jesús Valdez José Carlos Pons CEO CFO 14
Slide 15: Appendix
€\\alpek APPENDIX
Slide 16: 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 17: Alpek Growth Strategy
Alpek Growth Strategy Growth Catalysts Details / Description • Global Cost Improvement • Zero Based Budgeting & process innovation (Mainly Operations, Logistics & SG&A) Strengthen • Value-added Products • Shift to products with higher margins & barriers to entry (Copolymers, Grey EPS) Core Business
Slide 18: Raw Material Carry-forward Effect (RMCF) Breakdown
Raw Material Carry-forward Effect (RMCF) Breakdown Smaller YoY & QoQ difference in EBITDA when excluding extraordinary effects 2020 2019 Delta M dls 1Q 2Q 3Q YTD 1Q 2Q 3Q YTD 1Q 2Q 3Q YTD Reported EBITDA 111 74 179 364 140 161 194 495 (29) (87) (15) (131) Inventory Adjustment (17) (42) 16 (43) (19)
Slide 19: Relevant References: Crude Oil
Relevant References: Crude Oil Price increased during 3Q20 as demand for refined products rose US$/Bbl Brent Crude Oil Price 120 100 Avg. 99 80 71 60 64 53 54 44 40 20 0 2014 2015 2016 2017 2018 2019 2020 19
Slide 20: Relevant References: Paraxylene
Relevant References: Paraxylene Px prices increased by only 12% as PTA/Fibers demand has not fully recovered US$/Ton NA Px Contract Price 2,000 1,708 1,635 1,641 1,500 1,382 US$44/ton 1,258 1,282 increase 1,165 from Jun.’20 1,056 1,100 1,077 to Sep.’20 992 989 977 955 937 1,000 876 924 924 876 658 5
Slide 21: Integrated PET Margins
Integrated PET Margins 3Q20 margins normalized (-19% QoQ) / 2020YTD margins remain above Guidance US$/Ton Asian Margins (Px / MEG to PET) 600 China 500 478 393 400 377 370 342 333 324 304 310 300 193 277 276 284 346 275 255 263 248 240 214 250 227 223 242 227 238 215 214 164 200 227 208 204 184 202
Slide 22: Relevant References: Propylene & Polypropylene
Relevant References: Propylene & Polypropylene Increase in both PGP contract prices and PP margins NA Propylene Contract Price (PGP) NA Polypropylene Margin (PP to PGP) cpp cpp 80 76 28 27 71 26 70 69 24 24 22 22 22 60 22 21 20 60 54 20 19 50 18 17 45 15 16 16 15 39 38 37 38 13 40 35 14 34 35 12 12
Slide 23: For Additional Information
For Additional Information Email: IR@alpek.com / Phone: +52 (818) 748-1146 Alejandro • 9 Years at Alfa/Alpek Elizondo • Previously held roles as Director of Logistics & Procurement at Indelpro, Director of Energy Markets at IRO Alfa, and Project Leader at The Boston Consulting Group • BS in Industri
Slide 24: Third Quarter 2020 Earnings Webcast
THIRD QUARTER 2020 EARNINGS WEBCAST