LyondellBasell Industries NV · NYSE:LYB
LyondellBasell Industries NV — Wells Fargo Industrial & Construction Conference 2013
31 slides from LyondellBasell Industries NV's conference presentation, May 2013
Slide 1: Wells Fargo Industrial & Construction Conference
S E I Z E T H E M O M E N T S ECURING THE FUTURE Wells Fargo Industrial & Construction Conference Karyn Ovelmen Chief Financial Officer lyondellbasell.com
Slide 2: Cautionary Statement
Cautionary Statement The information in this presentation includes forward-looking statements. These statements relate to future events, such as anticipated revenues, earnings, business strategies, competitive position or other aspects of our operations or operating results. Actual outcomes and resu
Slide 3: Information Related to Financial Measures
Information Related to Financial Measures We have included EBITDA in this presentation, which is a non-GAAP measure, as we believe that EBITDA is a measure commonly used by investors. However, EBITDA, as presented herein, may not be comparable to a similarly titled measure reported by other companie
Slide 4: LYB Highlights
LYB Highlights ($ in millions, except per share data) LTM March 2013 FY 2012 FY 2011 EBITDA $6,166 $5,808 $5,469 Income from Continuing Operations $3,170 $2,858 $2,472 Diluted Earnings ($ / share) from Continuing Operations $5.49 $4.96 $4.32 EBITDA(1) Income from Continuing Operations(1) ($ in milli
Slide 5: Free Cash Flow Funds Growth and Return to Investors
Free Cash Flow Funds Growth and Return to Investors Net Cash from Operations Total Debt ($ Million) ($ Million) 7,000 5,000 4,000 5,600 3,000 4,200 2,000 2,800 1,000 1,400 0 0 May - Dec 2010 2011 2012 31-Dec-10 31-Dec-11 31-Dec-12 Capex Free Cash Flow Dividends(2) ($ Million) 3,000 • 2012 total Divi
Slide 6: "Back-To-Basics" Strategy Drives Value
“Back-To-Basics” Strategy Drives Value Our Results Operational Excellence • Excellent safety and environmental performance combined with reliable Technology operations Cost Driven Reduction Growth • Maintained fixed costs flat • Completed numerous turnarounds Performance Capital Driven Culture Disci
Slide 7: Optimizing Our Businesses
Optimizing Our Businesses Segment LYB Market Position Portfolio Role Olefins & Polyolefins • NGL advantage Invest – Americas • Cyclical upside • Commodities – naphtha based, with cyclical upside Olefins & Polyolefins Restructure – EAI • Differentiated positions in Catalloy, PP compounding, and JVs I
Slide 8: Cost of Ethylene Production
Macroeconomic Background U.S. Crude Oil vs. Natural Gas Price Ethylene Production Cost Curve ($/ MMBTU) ($/ bbl) $25 $150 Crude Oil 20 120 Cost of Ethylene Production 15 90 Global Naphtha Cracking Delta 40-60 ¢/lb 10 60 N. America Ethane Crackers Middle East 10 - 15¢/lb Natural Gas Ethane Crackers 5
Slide 9: Evolution of Shale Gas Value Chain
Evolution of Shale Gas Value Chain ($ / MMBTU) Upstream $12 (Natural Gas E&P) 8 4 Natural Gas Price 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 YTD (¢ / gal) Midstream ¢60 Ethane Premium to Fuel Value (Fractionation & ("Frac Spread" ) Pipelines) 40 20 2003 2004 2005 2006 2007 2008 2009 20
Slide 10: O&P – Americas: Fundamentals of Natural Gas / NGLs Have Defined the Environment
O&P – Americas: Fundamentals of Natural Gas / NGLs Have Defined the Environment U.S. NGL Prices vs. Brent Cost of Ethylene Production (Indexed to Jan 2012) (¢ / lb) 120 60 2010 2011 2012 2013 YTD 95 45 70 30 45 15 20 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 NE Asia U.S. U.S. Brent Ethane Propane Na
Slide 11: Ethane Fractionation and Consumption Capacity
Ethane Fractionation and Consumption Capacity U.S. Ethane Production Capacity U.S. Ethane Demand Capacity (MBPD) (MBPD) 1,800 1,800 Base Base Additions Additions 1,350 1,350 900 900 450 450 2010 2011 2012 2013E 2014E 2015E 2016E 2017E 2010 2011 2012 2013E 2014E 2015E 2016E 2017E Ethane production is
Slide 12: Production and Inventories Remain at Record Levels
Production and Inventories Remain at Record Levels Historical Ethane Production Historical Ethane Inventory (MBPD) (MMBbls) 1,300 40 Including Ethane rejection estimate 1,100 30 900 20 700 10 500 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Historic
Slide 13: Feedstock Flexibility Boosts Profitability
Feedstock Flexibility Boosts Profitability LYB U.S. Ethylene Cracker Feedstock Flexibility Pre-2009 2012 Future Local Local Liquids Liquids Imported Local Liquids Liquids NGLs NGLs Imported NGLs Liquids 11.0 B lbs. ethylene 9.8 B lbs. ethylene 11.6 B lbs. ethylene capacity capacity capacity Expandin
Slide 14: O&P – EAI: Our Recent Profits Were Primarily Generated from Our Differentiated Position
O&P – EAI: Our Recent Profits Were Primarily Generated from Our Differentiated Position Indexed O&P EAI EBITDA Scenarios (EBITDA Indexed, Mid-Cycle = 1.0) 2.0 1.5 1.0 0.5 Trough Mid-Cycle Peak 2012 Differentiated / Stable Businesses Commodity / Cyclical Olefins & Polyolefins • O&P EAI portfolio is m
Slide 15: Significant Progress Through Restructuring and Improved Operations
Significant Progress Through Restructuring and Improved Operations Estimated Efficiency Gains Focus business management processes Variable cost (including supply chain) Segment markets and Previously announced Feedstock & customers restructuring cracker improvements Portfolio Simplify supply chain i
Slide 16: I&D: Profitability Drivers for Propylene Oxide
I&D: Profitability Drivers for Propylene Oxide 2012 - 2017 PO Supply / Demand Key Drivers (Billion lbs) 30 100% World Effective Operating Rate (LYB forecast) • Propylene oxide demand growth 25 80% 20 60% – 5% per year globally 15 Demand 40% 10 – 10% per year in Asia Capacity 20% 5 • High barrier to
Slide 17: I&D: Benefits from Shale Gas Development
I&D: Benefits from Shale Gas Development MTBE Spread Factors Methanol Cash Margins (¢ / gallon) ($/MT) ¢120 $400 90 300 60 200 30 100 Pre Shale Post Shale Pre-Shale Post Shale MTBE - Gasoline Gasoline - Raw Materials (Butane and Methanol) Sources: Third party consultants. lyondellbasell.com 17
Slide 18: Refining: Profitability Has Been Driven by Geography and Complexity
Refining: Profitability Has Been Driven by Geography and Complexity Refining Spreads New Pipeline Capacity to Houston ($ / bbl) $60 2010 2012 2013 YTD 40 20 Brent 3-2-1 LLS 3-2-1 WTI 3-2-1 Maya 2-1-1 WCS 2-1-1 (Canadian) Pipeline Capacity Increase (MBPD) 1,500 1,000 500 2012 2013 2014 Source: Bloomb
Slide 19: Cash Deployment Hierarchy
Cash Deployment Hierarchy Current Status Comments $700 - $800 Base Capex million/yr • First priorities for cash Interest ~$260 million/yr Foundation Interim ~$920 million • Fund through the cycle with Dividend per year cash flow from operations ~$750 million • High-return in advantaged Growth Capex
Slide 20: Growth and Operational Improvement Programs
Growth and Operational Improvement Programs Opportunities Capital Investments Pre-tax Earnings Operational Minimal $250 – 400 Million Improvements Previously Announced $600 – 700 Million $800 - 1,000 Million Growth Projects New Growth Projects $900 – 1,000 Million $500 – 600 Million At 2012 conditio
Slide 21: Importance of Capital Project Selection
Importance of Capital Project Selection Annual Cash Flow from Announced Growth Projects(1) Fast Execution & High Returns ($ in millions) $1,500 • Announced projects expected to be on line by 2016 1,000 • $1.6 billion of announced growth capital expenditures from 2013 to 2016 500 • Over $1.5 billion
Slide 22: LYB Delivers More Cash to the Bottom Line
LYB Delivers More Cash to the Bottom Line ‘11 - ‘12 Free Cash Flow as % of ‘11 - ‘12 Free Cash Flow as % of EBITDA(1) 2012 Year-End Market Cap 75% 10% 60% 8% 45% 6% 30% 4% 15% 2% LYB D C A B LYB B D C A LYB free cash flow generation significantly exceeds peers Source: Based on company filings and Ca
Slide 23: Value from Both Growth and Cash Distributions
Value from Both Growth and Cash Distributions Growth Projects Value Potential Annual Discretionary Cash Potential ($ in billions) $48 Potential Potential Discretionary Shareholder Cash Distributions Growth Projects 36 Potential Value(1) Special dividend 24 $2.0 - $3.5 billion Dec. 31, 2012 Dec. 31,
Slide 24: Appendix
S E I Z E T H E M O M E N T S ECURING THE FUTURE Appendix lyondellbasell.com
Slide 25: Reconciliation of Segment Information to Consolidated Financial Information
Reconciliation of Segment Information to Consolidated Financial Information Table 8 - Reconciliation of Segment Information to Consolidated Financial Information 2012 2013 (Millions of U.S. dollars) Q1 Q2 Q3 Q4 Total Q1 Sales and other operating revenues: Olefins & Polyolefins - Americas $ 3,349 $ 3
Slide 26: Reconciliation of EBITDA to Income from Continuing operations
Reconciliation of EBITDA to Income from Continuing operations Table 9 - EBITDA Calculation 2012 2013 (Millions of U.S. dollars) Q1 Q2 Q3 Q4 Total Q1 Net income attributable to the Company shareholders $ 600 $ 770 $ 846 $ 632 $ 2,848 $ 901 Net loss attributable to non-controlling interests (1) (2) (2
Slide 27: 2011 EBITDA Reconciliation to Income from Continuing operations
2011 EBITDA Reconciliation to Income from Continuing operations 2011 EBITDA Calculation 2011 (Millions of U.S. dollars) Q1 Q2 Q3 Q4 Total Net income (loss) attributable to the Company shareholder $ 663 $ 804 $ 895 $ (215) $ 2,147 Net loss attributable to non-controlling interests (3) (1) - (3) (7) L
Slide 28: Future Operational and Financial Improvements
Future Operational and Financial Improvements Further structural and Further O&P – EAI To be completed by Restructuring product mix 2015 improvements Expand operating window / increase Further Houston To be completed by Refinery Flexibility feedstock capacity for 2014 lighter Canadian crude oil Futu
Slide 29: Previously Announced High-Return Growth Opportunities
Previously Announced High-Return Growth Opportunities La Porte Expansion Olefins Ethane Capability Methanol Restart Additional Remaining Potential Pre- O&P EAI Butadiene Expansion Projected Tax Earnings Spending Midwest Debottlenecks $800 - $1,000 $600 - $700 PO/TBA JV million per year million by 20
Slide 30: New Growth Opportunities
New Growth Opportunities Channelview Expansion Corpus Christi Expansion Potential Projected Pre-Tax Spending Earnings Olefins NGL Recovery $900 - $1,000 $500 - $600 PE Debottleneck million million per year by 2016(1) Potential New PE Line Combined projects will have average payback period less than
Slide 31: Appendix A
Appendix A Details of Assumptions: • O&P - Americas: – Growth projects potential values are based on LYB growth projects capacities and 2012 industry benchmark margins data from third party consultants as indicated in the 2013 Investor Day O&P Americas slides. • O&P - EAI: – Growth projects potentia
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