LyondellBasell Industries NV · NYSE:LYB
LyondellBasell Industries NV — Q4 2019 Earnings Presentation
23 slides from LyondellBasell Industries NV's earnings presentation, Jan 31, 2020
Slide 1: Fourth Quarter 2019 Earnings
FOURTH QUARTER 2019 EARNINGS January 31, 2020 1
Slide 2: Cautionary Statement and Information Related to Financial Measures
CAUTIONARY STATEMENT AND INFORMATION RELATED TO FINANCIAL MEASURES CAUTIONARY STATEMENT The statements in this presentation relating to matters that are not historical facts are forward-looking statements. These forward-looking statements are based upon assumptions of management which are believed t
Slide 3: 2019 Highlights
2019 HIGHLIGHTS STRONG CASH GENERATION $3.4 B $5.7 B $9.58 $5.0 B NET INCOME EBITDA DILUTED EPS CASH FROM USD/share OPERATING ACTIVITIES 3
Slide 4: Delivering, Growing, Advancing
DELIVERING, GROWING, ADVANCING APPLYING OUR STRONG CASH FLOW TO OUR DISCIPLINED, VALUE-DRIVEN GROWTH STRATEGY GROWING ADVANCING THROUGH INVESTMENT VALUE-DRIVEN OPPORTUNITIES STRONG CASH FROM Commissioning Thailand PP JV Expansion Hyperzone PE OPERATING ACTIVITIES China Integrated Cracker JV Building
Slide 5: Safety Leadership
SAFETY LEADERSHIP CONSISTENT FOCUS ON SAFETY Injuries per 200,000 hours worked 0.5 0.4 0.3 0.2 0.1 2015 2016 2017 2018 2019 LyondellBasell ACC Top Quartile 5 Source: American Chemistry Council (ACC) and LyondellBasell. Note: Number of hours worked includes employees and contractors. Data includes sa
Slide 6: Advancing Molecular Recycling
ADVANCING MOLECULAR RECYCLING MoReTec TECHNOLOGY – APPLYING CATALYST INNOVATION TO PYROLYSIS CATALYST INNOVATION FEEDSTOCK Advance pyrolysis of plastic Target mixed, multilayer waste to a cost effective scale and hybrid plastic waste PRODUCT VALUE Maximize hydrocarbon yield LIFECYCLE Create products
Slide 7: Resilient Performance
RESILIENT PERFORMANCE OUTPERFORMING SECTOR BENCHMARKS IN A CHALLENGING MARKET RELATIVE PERFORMANCE 3Q19 vs. 3Q18 EBITDA EPS USD, billions USD / share $8 $16 7 LyondellBasell 6 12 5 -13% 4 8 3 2 4 Peers 1 2 0 1 7 2017 2 0 1 8 2018 2 0 1 9 2019 -24% to -66% EBITDA EPS Tax Benefit Note 1: LyondellBasel
Slide 8: Strong Cash Conversion
STRONG CASH CONVERSION SIX CONSECUTIVE YEARS OF CASH FROM OPERATING ACTIVITIES OF $5-6 B Cash from Operating Activities USD, billions 87% $7 CASH FROM OPERATING ACTIVITIES / EBITDA 6 2019 5 4 $5.0 B 3 CASH FROM OPERATING ACTIVITIES 2 2019 1 2014 2015 2016 2017 2018 2019 12.5% Free Operating Cash Flo
Slide 9: Disciplined Capital Allocation
DISCIPLINED CAPITAL ALLOCATION CLEAR FRAMEWORK THAT SUPPORTS VALUE CREATION AND SHAREHOLDER REMUNERATION 1 DIVIDEND Committed to a strong and progressive dividend DIVIDEND $1.4 – 1.5 B 2 SUSTAINING & GROWTH CAPEX Capital investments to sustain and expand our assets INORGANIC INVESTMENTS 2020-2022 SU
Slide 10: Cash Generation and Deployment
CASH GENERATION AND DEPLOYMENT CASH FLOW SUPPORTING ACCRETIVE INVESTMENTS AND SHAREHOLDER RETURNS USD, billions $3 DELIVERING STRONG RESULTS Cash from operating activities $1.2 B 2 GROWING THROUGH INVESTMENT Hyperzone PE and PO/TBA 1 $1.1 $1.1 RETURNING VALUE TO SHAREHOLDERS Dividends $351 MM 4Q19 C
Slide 11: Capital Returns
CAPITAL RETURNS COMBINED DIVIDEND AND SHARE REPURCHASE YIELD OUTPACING PEERS 3Q19 LTM Capital Return Yield 4.8% 20% DIVIDEND YIELD 3Q19 LTM 15% 10% $4.8 B SHARE REPURCHASES 5% 3Q19 LTM LYB CE HUN DOW EMN DD WLK S&P 15.3% Chem. SHARE REPURCHASE YIELD Dividend yield Share repurchase yield 3Q19 LTM 11
Slide 12: LyondellBasell 2020 Modeling Information
LYONDELLBASELL 2020 MODELING INFORMATION FINANCIAL Sustaining CAPEX METRICS CAPITAL Total CAPEX ~$1.1 B EXPENDITURES Profit Generating CAPEX ~$2.4 B Cash Interest Expense ~$1.3 B ~$420 MM Depreciation & Amortization ~$1.5 B 1Q 2Q 3Q 4Q Pension Contribution ~$120 MM MAJOR O&P - Americas ~$25 MM ~$30
Slide 13: Resilient Portfolio
RESILIENT PORTFOLIO DIVERSE GLOBAL BUSINESS PORTFOLIO PROVIDES STABILITY EBITDA USD, billions $ 2.0 DURABLE Portfolio that follows typical seasonal trends 1.5 CHALLENGING 1.0 Market conditions 0.5 FLEXIBLE Our foundations provide advantage 4Q18 1Q19 2Q19 3Q19 4Q19 13
Slide 14: Challenging Market
CHALLENGING MARKET DIVERSE GLOBAL BUSINESS PORTFOLIO PROVIDES RESILIENCE NA PP Spread NWE MTBE RMM NEA PE Spread NA Styrene RMM CURRENT CONDITIONS USD/ton USD/ton USD/ton USD/ton $800 $400 $800 $400 600 300 600 300 STRONG 400 200 400 200 200 100 200 100 WEAK 2001 2004 2007 2010 2013 2016 2019 2001 2
Slide 15: Olefins & Polyolefins – Americas
OLEFINS & POLYOLEFINS – AMERICAS POLYETHYLENE CHAIN MARGIN DECLINES WITH SEASONAL DEMAND EBITDA USD, millions $635 $653 $631 OLEFINS $516 Margin declined due to increased feedstock costs and $498 lower propylene price POLYOLEFINS Polyethylene spread declined ~$130/ton Volume decreased with seasonal
Slide 16: Olefins & Polyolefins – Europe, Asia & International
OLEFINS & POLYOLEFINS – EUROPE, ASIA & INTERNATIONAL ETHYLENE MARGIN CHALLENGED BY RISING FEEDSTOCK COSTS EBITDA USD, millions $331 OLEFINS $296 $291 Margin declined due to higher feedstock costs and lower propylene price $144 $127 POLYOLEFINS Spreads declined in both polyethylene and polypropylene
Slide 17: Intermediates & Derivatives
INTERMEDIATES & DERIVATIVES PO & DERIVATIVES AND INTERMEDIATE CHEMICALS MARGINS PRESSURED BY WELL-SUPPLIED MARKET EBITDA USD, millions $448 PO & DERIVATIVES AND INTERMEDIATE CHEMICALS $379 $390 $390 Margins declined in most businesses $329 Unfavorable sales mix for PO & Derivatives OXYFUELS & RELATE
Slide 18: Advancing Our Leading PO Technology
ADVANCING OUR LEADING PO TECHNOLOGY MOU – 50/50 PO/SM JOINT VENTURE WITH SINOPEC LyondellBasell ADVANTAGES Processes HPPO ● Expanding our global network using LyondellBasell leading PO/SM technology Chlorohydrin & Cumene Cost of PO Production ● Serving Chinese domestic market through LyondellBasell
Slide 19: Advanced Polymer Solutions
ADVANCED POLYMER SOLUTIONS CONTINUED HEADWINDS FROM AUTOMOTIVE AND SEASONAL DECLINE IN CONSTRUCTION DEMAND EBITDA COMPOUNDING & SOLUTIONS USD, millions Continued automotive headwinds $148 $120 ADVANCED POLYMERS $102 Margin and volume decline due to seasonal $86 construction demand $54 SYNERGY CAPTUR
Slide 20: Refining
REFINING IMPROVING MARGINS EXPAND PROFITABILITY EBITDA USD, millions CRUDE THROUGHPUT 267 MBPD – Near nameplate capacity of 268 MBPD $22 $(6) IMPROVED MARGIN $(15) Maya 2-1-1 increased by $1.31 to $19.44 Strong naphtha and coke prices relative to crude $(66) $(84) 4Q18 1Q19 2Q19 3Q19 Volume Margin O
Slide 21: Technology
TECHNOLOGY RECORD 4Q19 AND 2019 PERFORMANCE FOR THE SEGMENT EBITDA USD, millions $138 LICENSING $107 Significant revenue milestones reached in 4Q and FY19 $83 $83 $61 CATALYST Continued strong catalyst volumes 4Q18 1Q19 2Q19 3Q19 4Q19 21
Slide 22: Delivering Higher Free Cash Flow
DELIVERING HIGHER FREE CASH FLOW HIGHER EBITDA AND LOWER CAPEX INCREASE FREE CASH FLOW IN 2022 OVER 2019 $1.3 B 80% $1.0 B Higher EBITDA x Cash From Operating = Higher Cash From from Investments Activities Yield from EBITDA Operating Activities + $2.1 B Higher Free Cash Flow $1.1 B Lower CAPEX 22 NO
Slide 23: 2019 Summary & Outlook
2019 SUMMARY & OUTLOOK DELIVERING RESILIENT RESULTS AND DISCIPLINED CAPITAL ALLOCATION RESILIENT TANGIBLE ADVANCING RESULTS EARNINGS OPPORTUNITIES Strong cash from Expect earnings growth from Disciplined approach to operating activities and IMO 2020 and Hyperzone PE investment through resilient EBIT
LyondellBasell Industries — Q4 2019 Earnings Presentation on 6ix