25
Annual and Special Meeting John Floren, President and CEO April 27, 2017
Annual and Special Meeting
John Floren, President and CEO
April 27, 2017
Information contained in these materials or presented orally at this meeting, either in prepared remarks or in response to questions, contains forward-looking statements. For more information, please refer to the Forward-looking Statements slide at the end of this presentation.
This presentation also contains certain non-GAAP financial measures that do not have any standardized meaning and therefore are unlikely to be comparable to similar measures presented by other companies. For more information regarding these non-GAAP measures, please see our 2016 annual MD&A and our first quarter 2017 MD&A.
Forward-looking Statements & Non-GAAP Measures
2
Methanex Strategy
3
Responsible Care
0.0
0.5
1.0
1.5
2.0
2.5
2012 2013 2014 2015 2016
Recordable Injury Frequency Rate (RIFR)
Employees Contractors Blended RIFR Blended Target
4
Environment
5
Social Responsibility
6
Investing in People
7
Methanol Price
8
$0
$100
$200
$300
$400
$500
$600
Q1
20
10
Q3
20
10
Q1
20
11
Q3
20
11
Q1
20
12
Q3
20
12
Q1
20
13
Q3
20
13
Q1
20
14
Q3
20
14
Q1
20
15
Q3
20
15
Q1
20
16
Q3
20
16
Q1
20
17
U.S
. $/t
on
ne
Methanex Average Realized Methanol Price
Methanol Demand Growth
9
0
10
20
30
40
50
60
70
2012 2013 2014 2015 2016
mill
ion
s o
f to
nn
es
Traditional Other Energy MTO
2012 – 2016 CAGR: 8%
Source: Methanex
Growing Energy Applications
10
Fuel Blending
Methanol Industrial
Boilers
Marine Fuels
0
10
20
30
40
50
60
70
80
90
100
2016 2017 2018 2019 2020
Traditional Other Energy MTO
Forecast Demand Growth M
illio
ns
of
ton
nes
of
met
han
ol
11
2016 – 2020 CAGR: 5%
Source: IHS Chemical
Capital Projects 2011-16
12
$100 million Medicine Hat • Restart • Refurbishment • Expansion
$1.4 billion Geismar Relocation
$200 million New Zealand • Restart (2 plants) • Refurbishment • Expansion
Chile Growth Opportunity
13
Capital Investments
-
100
200
300
400
500
600
700
2011 2012 2013 2014 2015 2016 2017FCST
mill
ion
s o
f d
olla
rs
Potential Chile Investment
Growth Capital Expenditures
Maintenance CapitalExpenditures
14
• $2.1 billion invested 2011-2016
3.5 3.8 4.1 4.3
4.9 5.2
7.0 7.7
2010
2011
2012
2013
2014
2015
2016
Ru
n-
rate
Production Volume – Methanex Share (millions of tonnes)
Methanex Production Doubled Versus 2010
15
Financial Summary
16
U.S. $millions except as indicated Q1-17 2016 2015
Sales volume (000s tonnes) 2,572 9,478 8,471
Production (000s tonnes) 1,866 7,017 5,193
Adjusted EBITDA 267 287 401
Adjusted net income (loss) 140 (15) 110
-10%
0%
10%
20%
30%
40%
50%
-$1.00
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Q1-
17
Mo
dif
ied
RO
CE
Ad
just
ed E
PS
Adjusted EPS
Modified ROCE
• Average Modified ROCE of 12% from 2007-2016
Financial Results
17
Run-rate EBITDA and Free Cash Flow Capability
18
8%
13%
18%
22%
0
200
400
600
800
1000
1200
1400
1600
300 350 400 450
mill
ion
s o
f d
olla
rs
Methanol price (dollars per tonne)
EBITDA
Free Cash Flow
Free cash flow yield
at $50 share price
Returning Excess Cash to Shareholders
0
50
100
150
200
250
300
350
400
450
2011 2012 2013 2014 2015 2016 EST 2017
mill
ion
s o
f d
olla
rs
Dividends Estimated remaining 2017 dividend
Share Repurchases Potential purchases under 10% NCIB19
$1 billion returned to shareholders
January 1, 2011 to April 26, 2017
Dividend Growth and Shares Outstanding
80
100
120
140
160
180
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
E
Shar
es O
uts
tan
din
g (m
illio
ns)
Reg
ula
r A
nn
ual
Div
iden
d (
US$
)
Regular Dividends per Share
Weighted Avg Shares Outstanding
20
Total Annual Shareholder Return – last 15 Years
21
15.1%
10.4% 7.4%
0%
2%
4%
6%
8%
10%
12%
14%
16%
Methanex S&P 500Chemicals Index
S&P TSX Index
Source: RBC Capital Markets
• Strong market leadership position
• Continued investment in people, reliability, safety and the environment
• Continuing to foster new energy applications for methanol
• Low capital cost growth potential in Chile
• Limited near-term financial commitments
• Expect strong cash generation at a range of methanol prices
• Excess cash to be allocated to dividends and share repurchases
Summary
Committed to Return Excess Cash to Shareholders 22
Thank You
www.methanex.com
linkedin.com/company/methanex-corporation
@Methanex
APPENDIX
24
Slide Assumptions
11 Demand forecast excludes demand from integrated coal-to-olefins plants (CTO)
14 Capital expenditures shown include Methanex’s propionate share of capital for Egypt (50%) and Atlas (63.1%) Maintenance expenditures include expenditures on catalyst, plants turnarounds, sustaining capital and other expenditures required to maintain the condition of plant assets. Growth and other capital expenditures include all other expenditures to grow the business.
15 Production shown includes Methanex’s proportionate for Egypt (50%) and Atlas (63.1%). Run-rate operating rate assumptions are: Geismar / Medicine Hat – 100%; NZ 92% (2.2MM tonnes); Trinidad 85%; Egypt 50%; Chile I 100%; Chile IV 0%
16 Production volume shown is Methanex’s proportionate share
17 1. Adjusted EPS = Adjusted net income per common share attributable to Methanex shareholders (excludes the after-tax mark-to-market impact of share-based compensation and the impact of certain items associated with specific identified events)
2. Modified ROCE = Adjusted net income before finance costs (after-tax) divided by average productive capital employed. Average productive capital employed is the sum of average total assets (excluding plants under construction) less the average of current non-interest-bearing liabilities.
3. Adjusted net income, Adjusted EPS and Modified ROCE are non-GAAP measures - for more information regarding this non-GAAP measure, please see our 2016 annual MD&A
18 Run-rate operating rate assumptions are described in the notes to slide 15 above. EBITDA reflects Methanex's proportionate ownership interest. Free cash flow is calculated after cash interest, maintenance capital of approximately $80 million, cash taxes, debt service and other cash payments. Free cash flow yield is calculated based on 90 million weighted average diluted shares for Q1, 2017 and share price of US$50/share
19 The potential purchases under a 10% NCIB are calculated assuming a total of 6.2 million shares are purchased. The first 1,580,000 shares are purchased for US$73 million, and the remaining approximately 4,620,000 shares are purchased at an average price of US$50 per share. The remaining dividend payable assumes that a quarterly dividend of $0.30 per share is approved for 3 quarters by the Methanex Board of Directors and paid to an average number of shares outstanding of 86 million shares.
21 Source: RBC Capital Markets, based on Bloomberg information as at April 21, 2017. Assumes dividends are reinvested
Forward-looking information warning This Presentation, our Fourth Quarter 2016 Management’s Discussion and Analysis (“MD&A”) and comments made during the Fourth Quarter 2016 investor conference call contain forward-looking statements with respect to us and our industry. These statements relate to future events or our future performance. All statements other than statements of historical fact are forward-looking statements. Statements that include the words “believes,” “expects,” “may,” “will,” “should,” “potential,” “estimates,” “anticipates,” “aim,” “goal” or other comparable terminology and similar statements of a future or forward-looking nature identify forward-looking statements. More particularly and without limitation, any statements regarding the following are forward-looking statements: expected demand for methanol and its derivatives; expected new methanol supply or restart of idled capacity and timing for start-up of the same; expected shutdowns (either temporary or permanent) or restarts of existing methanol supply (including our own facilities), including, without limitation, the timing and length of planned maintenance outages; expected methanol and energy prices; expected levels of methanol purchases from traders or other third parties; expected levels, timing and availability of economically priced natural gas supply to each of our plants; capital committed by third parties towards future natural gas exploration and development in the vicinity of our plants; our expected capital expenditures, anticipated operating rates of our plants, expected operating costs, including natural gas feedstock costs and logistics costs; expected tax rates or resolutions to tax disputes; expected cash flows, earnings capability and share price; availability of committed credit facilities and other financing; our ability to meet covenants or obtain or continue to obtain waivers associated with our long-term debt obligations, including, without limitation, the Egypt limited recourse debt facilities that have conditions associated with the payment of cash or other distributions and the finalization of certain land title registrations and related mortgages which require actions by Egyptian governmental entities; expected impact on our results of operations in Egypt or our financial condition as a consequence of civil unrest or actions taken or inaction by the Government of Egypt and its agencies; our shareholder distribution strategy and anticipated distributions to shareholders; commercial viability and timing of, or our ability to execute, future projects, plant restarts, capacity expansions, plant relocations, or other business initiatives or opportunities; our financial strength and ability to meet future financial commitments; expected global or regional economic activity (including industrial production levels); expected outcomes of litigation or other disputes, claims and assessments; and expected actions of governments, government agencies, gas suppliers, courts, tribunals or other third parties.
We believe that we have a reasonable basis for making such forward-looking statements. The forward-looking statements in this document are based on our experience, our perception of trends, current conditions and expected future developments as well as other factors. Certain material factors or assumptions were applied in drawing the conclusions or making the forecasts or projections that are included in these forward-looking statements, including, without limitation, future expectations and assumptions concerning the following: the supply of, demand for and price of methanol, methanol derivatives, natural gas, coal, oil and oil derivatives; our ability to procure natural gas feedstock on commercially acceptable terms; operating rates of our facilities; receipt or issuance of third-party consents or approvals, including, without limitation, governmental registrations of land title and related mortgages in Egypt and governmental approvals related to rights to purchase natural gas; the establishment of new fuel standards; operating costs, including natural gas feedstock and logistics costs, capital costs, tax rates, cash flows, foreign exchange rates and interest rates; the availability of committed credit facilities and other financing; global and regional economic activity (including industrial production levels); absence of a material negative impact from major natural disasters; absence of a material negative impact from changes in laws or regulations; absence of a material negative impact from political instability in the countries in which we operate; and enforcement of contractual arrangements and ability to perform contractual obligations by customers, natural gas and other suppliers and other third parties.
However, forward-looking statements, by their nature, involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements. The risks and uncertainties primarily include those attendant with producing and marketing methanol and successfully carrying out major capital expenditure projects in various jurisdictions, including, without limitation: conditions in the methanol and other industries including fluctuations in the supply, demand and price for methanol and its derivatives, including demand for methanol for energy uses, the price of natural gas, coal, oil and oil derivatives; our ability to obtain natural gas feedstock on commercially acceptable terms to underpin current operations and future production growth opportunities; the ability to carry out corporate initiatives and strategies; actions of competitors, suppliers and financial institutions; conditions within the natural gas delivery systems that may prevent delivery of our natural gas supply requirements; competing demand for natural gas, especially with respect to domestic needs for gas and electricity in Chile and Egypt; actions of governments and governmental authorities, including, without limitation, the implementation of policies or other measures that could impact the supply of or demand for methanol or its derivatives; changes in laws or regulations, import or export restrictions, anti-dumping measures, increases in duties, taxes and government royalties, and other actions by governments that may adversely affect our operations or existing contractual arrangements; world-wide economic conditions; and other risks described in our annual 2016 Management’s Discussion and Analysis and our First Quarter 2017 Management’s Discussion and Analysis.
Having in mind these and other factors, investors and other readers are cautioned not to place undue reliance on forward-looking statements. They are not a substitute for the exercise of one’s own due diligence and judgment. The outcomes implied by forward-looking statements may not occur and we do not undertake to update forward-looking statements except as required by applicable securities laws.
