Methanex Corporation · TSX:MX
Methanex — CIBC Institutional Investor Conference - Whistler 2006
21 slides from Methanex's conference presentation, Feb 16, 2006
Slide 1: Bruce Aitken, President & CEO – CIBC Institutional Investor Conference
Bruce Aitken President & CEO CIBC Institutional Investor Conference - Whistler February 16, 2006
Slide 2: Forward-looking Statements & Non-GAAP Measures
Forward-looking Statements & Non-GAAP Measures Information contained in these materials or presented orally at this meeting, either in prepared remarks or in response to questions, contains forward-looking statements. Certain material factors or assumptions were applied in drawing the conclusions or
Slide 3: Summary
Summary • One product, one focus • Acknowledged global leader • Consistent, clear strategy • Favourable supply / demand balance • Commitment to shareholders Low cost Global Operational leadership excellence
Slide 4: Impressive results
Impressive results For the 12 months ending December 31, 2005: Income1 US$224 million EPS1 (diluted) US$1.89/share Adjusted EBITDA2 US$452 million ROCE3 18% ROE 24% 1. Before unusual items (after-tax). 2. See Q4-2005 MD&A for definition of Adjusted EBITDA. 3. ROCE is defined as the return on average
Slide 5: Methanol is...
Methanol is... • Produced from natural gas • Diversified end uses Formaldehyde Dimethyl Terephthalate MDF PET bottles Plywood Acetic Acid Methyl Chloride Fleece Silicones Adhesives Paints
Slide 6: Global Demand Growth
Global Demand Growth 2006 - 2010 CAGR ~ 4% (000s tonnes) 1995 - 2005 CAGR ~ 4% 40,000 30,000 20,000 10,000 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005E 2006E 2007E 2008E 2009E 2010E MTBE and Fuels Formaldehyde Acetic Acid Other Source: Chemical Market Associates, Inc. Excludes 2.1 milli
Slide 7: Competitive landscape
Competitive landscape For 2006 and 2007: Expected New capacity Expected Offsets NPC 4, Iran 1.7 Million Methanex, New Zealand 0.5 Million Expect Start up: Q4-06 or Q1-07 Expansions/Debottlenecks 0.8 Million North America 1.7 Million (Russia, Eq. Guinea) (Canada, USA, Mexico) W. & E. Europe 0.7 Milli
Slide 8: China – Production and Imports
China – Production and Imports Imports relatively stable despite growth in production. Price 350 Volume $/MT 5,250 (kMT) n tio 300 uc rod 4,500 P 250 3,750 Pric 200 e Price 3,000 150 2,250 100 1,500 Imports 50 750 0 0 1999 2000 2001 2002 2003 2004 2005 CMAI NE China Spot Price ($/MT) Imports (per GT
Slide 9: Chinese Methanol Production
Chinese Methanol Production • Most methanol plants in China are sub- world scale and coal-based • Most coal-based Chinese methanol does not meet international specification • Major customers on East coast require international specification • Many new methanol projects are located inland and are dri
Slide 10: China - Supply/Demand Balance 2010E
China - Supply/Demand Balance 2010E CFR Price = $150 / MT Beijing +175 -188 -65 -31 +268 -11 +230 -485 Tianjin +392 +415 +468 -99 -1016 +324 -533 -2124 Shanghai -138 -437 +412 -236 -815 -157 -22 -175 -123 Estimated Imports 2010: -64 ≈ 3 to 5 MMT -68 -900 Hainan Source: Methanex +502
Slide 11: Current Industry Cost Curve
Current Industry Cost Curve 450 300 USA, Canada, Netherlands, Estimated Delivered cash cost (US$/tonne) E. Europe / Russia, Germany, Mexico, China, India 150 SE Asia, India, Russia, China, Argentina Methanex (Chile & Trinidad), Total Global Demand Venezuela, Eq. Guinea, Iran, 35-36 million MT’s Saud
Slide 12: A perspective on high energy prices
A perspective on high energy prices Methanol has energy value… 90.00 14.93 80.00 13.28 Distillates - No.2 Diesel Fuel Natural Gas ($/mmbtu) 70.00 11.62 (US$/bbl) 60.00 9.96 50.00 8.30 40.00 6.65 30.00 4.99 20.00 3.33 100 120 140 160 180 200 220 240 260 280 300 Methanol (US$/Tonne) Î Sustained high e
Slide 13: A clear strategy
A clear strategy Low cost Global Operational leadership excellence
Slide 14: Methanol Pipeline
Methanol Pipeline Billingham Brussels Seoul Dallas Shanghai Tokyo Hong Kong Egypt Trinidad Santiago Current Production Potential Project Marketing Offices New Zealand Chile Î2005 sales ~20% of global demand
Slide 15: Trinidad hub
Trinidad hub • Atlas plant = 1.7 million tonnes per year capacity - a joint venture between Methanex (63%) and BP (37%) • Titan capacity = 850 K tonnes per year capacity • Titan and Atlas combined give Methanex an equity interest in ~1.9 million tonnes of annual low cost capacity in Trinidad
Slide 16: Chile hub
Chile hub • Total annual capacity at Chile hub is 3.8 million tonnes • 840,000 tonne Chile IV facility started up in Q3-2005 at a capital cost of $295/tonne • Production lost due to curtailments of natural gas: 2004 Æ 50 K tonnes 2005 Æ 100 K tonnes
Slide 17: A balanced approach
A balanced approach For the five year period ending December 31, 2005, Methanex has generated over US$1.8 billion in Adjusted EBITDA Reinvested ~US$850 million in our business Distributed ~US$700 million to shareholders Balance Sheet Current net debt to capitalization ~26% …and has delivered 191% (U
Slide 18: Liquidity & Capital Projects
Liquidity & Capital Projects Liquidity From 2006 through 2008... at 12/31/05 Cash $159 million Bank Facility $250 million Total $409 million Estimated Cash Requirements for Maintenance & Growth ($ millions): 2006E 2007E 2008E Total Maintenance 40¹ 25 25 90 Strategic Capital: Egypt 20 [752] [752] 170
Slide 19: Commitment to Shareholders
Commitment to Shareholders Longstanding track record… 200 200 150 150 (millions of shares) (millions US$) 100 100 50 50 0 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Dividend Special Dividend Share Repurchase Shares O/S year end Î May 5, 2005 – increased regular dividend, for third
Slide 20: Improved earnings capability…
Improved earnings capability… $5.00 300 250 $4.00 $225 (Adjusted EBITDA per share) 200 (US$ per tonne) $3.00 $150 150 $115 $2.00 100 $1.00 50 $0.00 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Estimates Actual Adjusted EBITDA/share CMAI U.S. Net Transaction Methanol Price less 10%
Slide 21: Thank you.
A Responsible Care® Company Thank you.
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