Methanex Corporation · TSX:MX
Methanex — Investor Presentation (September 2006)
22 slides from Methanex's investor presentation, September 2006
Slide 1: Bruce Aitken, President & CEO, September 2006
Bruce Aitken President & CEO September 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 3
Slide 4: Impressive Results
Impressive Results For the 12 months ending June 30, 2006: Income1 US$256 million EPS1 (diluted) US$2.27/share Adjusted EBITDA2 US$517 million ROCE3 19% ROE 25% 1. Before unusual items (after-tax). 2. See 2005 MD&A for definition of Adjusted EBITDA. 3. ROCE is defined as the return on average produc
Slide 5: Methanol is...
Methanol is... • Produced from natural gas • Diversified end uses Formaldehyde Dimethyl Terephthalate MDF Recyclable Plywood plastic bottles Acetic Acid Methyl Chloride Fleece Silicones Adhesives Paints 5
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 *This graph reflects mainly traditional chemical derivative
Slide 7: Competitive Landscape
Competitive Landscape For the next 12 months… Expected New Capacity Potential Offsets NPC 4, Iran 1.7 Million Methanex, New Zealand 0.5 Million Expected Start up: Q1-07 Expansions/Debottlenecks 0.9 Million North America/Latin America 1.8 Million Russia, Eq. Guinea, Qatar Canada, USA, Mexico CNOOC, H
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 3,750 200 3,000 150 2,250 100 1,500 Imports 50 750 0 0 1999 2000 2001 2002 2003 2004 2005 Imports (per GTIS) CMAI China Production 1997 Domestic Produ
Slide 9: Chinese Methanol Industry
Chinese Methanol Industry Domestic Methanol Production: • Most plants in China are sub-world scale & coal-based • Most Chinese methanol doesn’t meet international specification • High delivered costs to E. China, transport is costly & unreliable • Many new projects are located inland and driven by n
Slide 10: 2010E - Supply/Demand Balance
2010E - Supply/Demand Balance New methanol plants off-set new uses… 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 CFR Price = $165 / MT Hainan Source
Slide 11: Current Industry Cost Curve
Current Industry Cost Curve 450 $220-230/tonne methanol energy price 300 equivalent when oil = $60/barrel USA, Canada, Netherlands, Estimated Delivered Cash Cost (US$/tonne) E. Europe / Russia, Germany, Mexico, China, India 150 SE Asia, India, Russia, China, Argentina Methanex (Chile & Trinidad), Es
Slide 12: Methanol Has Energy Value
Methanol Has Energy Value Methanol Spot Price vs. Methanol Energy Value 600 500 Methanol Spot Price - $/MT 400 300 200 100 0 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 USGC No. 2 Heating Oil (Equiv MeOH energy value) CMAI USG Spot Methanol ($/MT) Source: US Department of E
Slide 13: Methanol's Energy Value Compared to LPG and Distillate
Methanol’s Energy Value Compared to LPG (propane) and Distillate: 700 87 Distillates - No.2 Diesel Fuel 600 75 500 62 (US$/bbl) (US$/MT) Propane Mx Q2-06 400 realized 50 methanol price $279/tonne 300 37 200 25 100 120 140 160 180 200 220 240 260 280 300 Methanol (US$/Tonne) Propane Spot Price (Mont
Slide 14: A Clear Strategy
A Clear Strategy Low cost Global Operational leadership excellence 14
Slide 15: 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 15
Slide 16: Trinidad and Chile Hubs
Trinidad and Chile Hubs A decade of strategy execution…. Trinidad- 1.9 million Chile – 3.8 million tonnes per annum tonnes per annum 16
Slide 17: Chile & Argentina – Pipelines & Reserves
Chile & Argentina – Pipelines & Reserves URUGUAY Buenos C Aires H Total proven and probable gas I reserves in Argentina as of L Neuquina December 2005 = 25 TCF E Basin To Buenos Aires ARGENTINA CHILE YPF CONDOR CONDOR POSESION Sipetrol CALAFATE CALAFATE San Jorge Basin Mx CABO CABO NEGRO Total Estim
Slide 18: A Balanced Approach
A Balanced Approach For the five year period ending June 30, 2006, Methanex generated over US$1.9 billion in Adjusted EBITDA Reinvested ~US$875 million in our business Distributed ~US$844 million to shareholders Balance Sheet Current net debt to capitalization ~24% …and delivered 303% (US$) share pr
Slide 19: Liquidity & Capital Projects
Liquidity & Capital Projects Liquidity From 2006 through 2008... At June 30/06 Cash $174 million Bank Facility $250 million Total $424 million Estimated Cash Requirements for Maintenance & Growth ($ millions): 2006E 2007E 2008E Total Maintenance 40¹ 25 25 90 Strategic Capital: Egypt 20 [752] [752] 1
Slide 20: Commitment to Shareholders
Commitment to Shareholders 300 Longstanding track record… 200 250 150 (millions of shares) 200 (millions US$) 150 100 100 50 50 0 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006E Dividend Special Dividend Share Repurchase Shares O/S year end Î May 9, 2006 – announced increase to r
Slide 21: Earnings Capability of Low Cost Assets
Earnings Capability of Low Cost Assets $5.00 300 $277 $240 250 $4.00 $223 (Adjusted EBITDA per share) $225 200 (US$ per tonne) $3.00 $175 $157 150 $2.00 100 $1.00 50 $0.00 0 2002 2003 2004 2005 EBITDA/share Estimates Actual Adjusted EBITDA/share CMAI U.S. Net Transaction Methanol Price less 10%
Slide 22: Thank you.
Thank you. Thank you.