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 — Q2 2020 Earnings Presentation
23 slides from Alpek, S.a.b. De C.v. Class A's earnings presentation, Jul 16, 2020
Slide 1: Second Quarter 2020 Earnings Webcast
SECOND 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. Long-term Growth Strategy 3
Slide 4: COVID-19 Update
COVID-19 Update Feedstock • Lower crude oil demand in Asia results in = Prices historically low prices for Crude Oil and Px • Resulting in negative Inventory loss & RMCF effects in 2Q20, with potential to revert in 3Q20 Polyester • Solid demand and lower Asian PTA/PET output + Margins improved margi
Slide 5: 2Q20 Financial Highlights
2Q20 Financial Highlights Strong Alpek performance QoQ best explained through Comparable EBITDA excluding RMCF result (US$149M / +1% QoQ) Polyester margins increased by 13% QoQ and Volume on record-setting pace (+4% YTD) but lower vs. 1Q20 record high (-6% QoQ) Temporary negative Inventory Adjustmen
Slide 6: EBITDA Evolution
EBITDA Evolution Alpek EBITDA (US$M) 356 CoGen Sale • Comparable EBITDA excluding RMCF1 of US$149M (+1% QoQ) 188 231 • Quarter on quarter improvement 217 as stronger Polyester margins 213 +1.4% (+13%) more than offset lower 167 173 189 volume (-6% QoQ) 147 149 Comp. EBITDA 172 148 excl. RMCF1 • Comp
Slide 7: Feedstock Costs
Feedstock Costs Crude Oil, Px and Propylene all reached record lows in April/May 2020 Brent Crude Oil Price NA Paraxylene Contract Price NA Propylene Contract Price US$/Bbl US$/Ton cpp 80 2,000 40 38 38 37 35 -16% 35 31 60 1,500 30 26 1,165 25 1,077 -33% 40 41 1,000 955 937 20 876 15 590 20 500 10 1
Slide 8: EBITDA Breakdown
EBITDA Breakdown Alpek 2Q20 EBITDA (US$M) 217 Others • Polyester Comp. EBITDA excl. RMCF of US$102M (+9% QOQ) P&C 62 +1% 149 • Negative RMCF & Inventory 147 Adjustment effects from Px and 39 Propylene price decline 46 50 110 • P&C Comp. EBITDA of US$46M (-7% QoQ) 46 42 74 Polyester 151 6 • Strong PP
Slide 9: Free Cash Flow Generation
Free Cash Flow Generation US$M 53 1,428 163 1,330 185 • Alpek with emphasis on financial stability and strong liquidity 42 101 • FCF year-to-date of US$118M 127 (+US$189M vs. Guidance) 51 • NWC +US$127M year-to-date (+US$203M vs. Guidance) • CAPEX of US$42M (-61% YoY & -US92M vs. Guidance) • US$81.6
Slide 10: Long-term Growth Strategy
Long-term Growth Strategy Growth Catalysts • Global Cost Improvement Strengthen • Value-added Products Core Business • FCF Generation • Footprint Optimization • rPET Leadership Foster Circular • Recycling Promotion Economy • Sustainable Product Portfolio • Value Chain Integration Strategic & Focused
Slide 11: 2H20 Outlook
2H20 OUTLOOK 11
Slide 12: Q&A
Q&A José de Jesús Valdez José Carlos Pons CEO CFO 12
Slide 13: Appendix
€\\alpek APPENDIX
Slide 14: Disclaimer
Disclaimer This presentation contains, or may be deemed to contain, “forward-looking statements”. By their nature, forward looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The future results of Alpek
Slide 15: Raw Material Carry-forward Effect (RMCF) Breakdown
Raw Material Carry-forward Effect (RMCF) Breakdown Smaller YoY & QoQ difference in EBITDA when excluding extraordinary effects 2020 2019 Delta M dls 1Q 2Q YTD 1Q 2Q YTD 1Q 2Q YTD Reported EBITDA 111 74 185 140 161 301 (29) (87) (116) Inventory Adjustment (17) (42) (59) (19) (27) (46) 2 (15) (13) Oth
Slide 16: Relevant References: Crude Oil
Relevant References: Crude Oil Historical lows in April before rebound after OPEC production cuts US$/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 16
Slide 17: Relevant References: Paraxylene
Relevant References: Paraxylene Px prices continued to fall in 2Q20 following their correlation with Crude Oil US$/Ton NA Px Contract Price 2,000 1,708 1,635 1,641 1,500 1,382 1,258 1,282 US$143/ton 1,165 decrease 1,056 1,100 1,077 from Mar.’20 992 989 977 955 to Jun.’20 1,000 924 924 937 876 876 59
Slide 18: Integrated PET Margins
Integrated PET Margins Margins improved by 13% based on resilient demand and lower Asian production US$/Ton Asian Margins (Px / MEG to PET) 600 China 500 478 393 400 377 370 342 333 324 304 310 300 193 277 276 284 346 275 255 263 248 240 214 227 223 242 227 238 215 214 164 200 227 PET 208 204 184 20
Slide 19: Relevant References: Propylene & Polypropylene
Relevant References: Propylene & Polypropylene Decrease in PGP contract prices, but Alpek PP margins remain strong 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 60 20 54 20 19 50 18 45 15 16 16 15 39 38 37 38 13 40 35 14
Slide 20: Continuously improving financial performance
Continuously improving financial performance Net Debt decreased by 1% 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 -1% 1.9 735 1.7 1,436 1,428 1.6 1,330 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4
Slide 21: 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 22: 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 23: Second Quarter 2020 Earnings Webcast
SECOND QUARTER 2020 EARNINGS WEBCAST