33
Investor Presentation December 2019
Investor
Presentation
December 2019
2IVL 3Q19 Results PresentationSNG
Disclaimer
This presentation contains “forward-looking statements” of Indorama Ventures Public Company Limited (the “Company”) that relate to future events, which are, by their nature, subject to significant risks and uncertainties. All statements, other than statements of historical fact contained herein, including, without limitation, those regarding the future financial position and results of operations, strategy, plans, objectives, goals and targets, future developments in the markets where the Company participates or is seeking to participate and any statements preceded by, followed by or that include the words “target”, “believe”, “expect”, “aim”, “intend”, “will”, “may”, “anticipate”, “would”, “plan”, “could”, “should, “predict”, “project”, “estimate”, “foresee”, “forecast”, “seek” or similar words or expressions are “forward-looking statements”.
Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company’s control that could cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which the Company will operate in the future and are not a guarantee of future performance.
Such forward-looking statements speak only as at the date of this presentation, and the Company does not undertake any duty or obligation to supplement, amend, update or revise any such statements. The Company does not make any representation, warranty or prediction that the results anticipated by such forward-looking statements will be achieved.
The Company makes no representation whatsoever about the opinion or statements of any analyst or other third party. The Company does not monitor or control the content of third party opinions or statements and does not endorse or accept any responsibility for the content or the use of any such opinion or statement.
A G E N D A
Performance Update
Industry Update
Projects Update
Outlook
4IVL 3Q19 Results PresentationSNG
LTM 3Q19 key Takeaways
• LTM volumes grew 24% (11% on an organic basis)
• Operating cash flows remained strong (LTM $1.30b vs. $0.95b YoY) as a result of focused working capital management
• LTM core EBITDA declined by 8% (LTM $1.26b vs. $1.38b YoY), driven by a sharp decline in industry-wide spreads especially in integrated PET, MEG, IPA and Lifestyle fibers
• Huntsman (Spindletop) asset acquisition is on-track and expected to close in 1Q 2020; Adjusted EBITDA in IVL definition for these assets for 3Q19 is US$122M and LTM3Q19 is US$360M
• IVL expanded and announced new investments in recycling as we spearhead the industry’s transition to a circular use of PET
Despite the challenging industry environment, IVL continues to register strong volume and operating cash flow growth
5IVL 3Q19 Results PresentationSNG
LTM 3Q19 Reflections
What went well What could have gone better
• IVL and industry volumes grew
• Volume growth reflected in strong operating cash flow
• Huntsman (Spindletop) asset acquisition on-track
• AA- rating reaffirmed by TRIS after the announcement of the Spindletop asset acquisition
• Recycling commitment reaffirmed with strategy in place and Indorama Ventures Recycling Group set up
• Perpetual debenture of THB 15b refinanced at 200bps lower coupon
• Industry spreads lower for integrated PET, MEG, IPA & Lifestyle fibers
• Inventory loss of $276M due to declining prices
• IVOG TAR, unplanned shutdowns including Force Majeure and line conversions led to an exceptional EBITDA loss of $155M
• Lake Charles cracker start-up delayed to 1Q20
• The Mobility fibers verticals performed below plan on the back of a continued soft global automotive sector
• The Thai baht strengthened, especially in 3Q19 (7% vs 3Q18 vs. the USD), affecting earnings translation
6IVL 3Q19 Results PresentationSNG
Note: Total production – Integrated PET at 9.4MMt, fibers at 1.5MMt, packaging at 0.2MMt, IO at 0.4MMt, specialty chemical at 0.7MMt; Core EPS growth is calculated based on core EPS in USDSource: IVL Analysis
+15%
Core EBITDA
$1.26B(THB 40.1B)
-8%
Net Op. Debtto Equity
0.61x
+8 bps
Core EPSin USD (THB 2.63)
-40%
TotalRevenue
$11.6B(THB 367B)
Total Production
12.3 MMt+24%
OCF $ 1.3B
(THB 41.1B)
+36%
% change YoY
LTM 3Q19 Financial HighlightsOperating Cash flow grew 36%
7IVL 3Q19 Results PresentationSNG
0
400
800
1200
1600
LTM 3Q18 LTM 3Q190
100
200
300
400
500
3Q18 3Q19
-31%YoY
-8%YoY
4091,379
Core EBITDA ($M)
281
1,264
Note: 1. After subordinated capital debentures interest. IO&D vertical is previously termed as Integrated Olefins. ROCE is calculated based on operating capital employed; EBITDA loss come from IVOG change of catalyst turnaround of $23M in LTM 3Q19, FM/unplanned shutdown of $10M in 3Q19 and $99M in LTM 3Q19, PTA conversion to IPA in USA of $12M in 3Q19 and $33M in LTM 3Q19Source: IVL Analysis
Integrated PET Integrated Oxides & Derivatives Fibers Specialty Chemicals Packaging
• Robust underlying volume growth, including organic volumes
• Sharp decline in industry spreads coming off the high in 3Q18
Better working capital management has enabled OCF growth
+22
+155
3Q18 3Q19 LTM 3Q18 LTM 3Q19Core EBITDA ($/MT)
150 84 139 103
Core EBITDA Margin
14% 10% 14% 11%
Core ROCE 17% 7% 14% 10%
OCF ($/MT) 101 121 96 106
IVOG catalyst change, unplanned shutdowns incl. FM, PTA conversion to IPA
3Q 2019 Results – IVL
8IVL 3Q19 Results PresentationSNG
707 852
989
1,301 0.7
1.0
1.4 1.4
0
200
400
600
800
1,000
1,200
1,400
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
2016 2017 2018 LTM 3Q19
Operating cash flow ($M) Dividend (Baht/share)
Operating cash flow (in $M) Dividend (in Baht/share)
Source: IVL Analysis
• Robust and growing operating cash flow (OCF) generation
• OCF enhanced through better working capital management
• Strong OCF generation enables high dividend payout
Focus on working capital management initiatives to sustain OCF on like-for-like basis going forwardNet op
debt-to-equity (times)
0.9 0.5 0.6 0.6
Operating Cash FlowGrowing despite industry headwinds
9IVL 3Q19 Results PresentationSNG
A G E N D A
Performance Update
Industry Update
Projects Update
Outlook
10IVL 3Q19 Results PresentationSNG
PET Industry OutlookIVL is the largest seller of PET globally
Capacity Addition (MMT)
Industry Spread(1)
Global Supply/Demand
20 21 22 23 24 25 26 28
74% 78% 79% 80% 77% 78% 79% 81%
0
10
20
30
40
50
2015 2016 2017 2018 2019E 2020F 2021F 2022F
Demand Op.Rate
+5% CAGR
+5% CAGR
Source: IVL Analysis, IHSNote: (1) PET Historical = PET ICIS Spot, FOB China – 0.86 PTA ICIS Spot, CFR China – 0.34 MEG ICIS Spot, CFR China ; PET Forecast = PET IHS NE Asia spot FOB – 0.86 PTA NE Asia spot C&F - 0.34 MEG NE Asia spot CFR
MMT
175
124 143
168
139 137 149
134 124
135
179
137 138 118 110
126
0
50
100
150
200
250
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
1Q19
2Q
19
3Q
19
4Q
19
20
19
$/t
19E 20F 21F 22F
China 1.3 1.0 0.7 -
Rest of World 0.9 0.5 0.1 1.1
Total Capacity Addition 2.2 1.5 0.8 1.1
Total Demand Addition 0.9 1.2 1.3 1.3
Include Corpus Christi in USA
Average 144
11IVL 3Q19 Results PresentationSNG
PTA Industry OutlookIVL sell almost all of its PTA captive to its PET and Fiber businesses
Source: IVL Analysis, IHSNote: (1) PTA Historical = PTA ICIS Spot, CFR China – 0.67 PX 50:50/ ACP: Spot ; PTA Forecast = PTA IHS Spot, C&F NEA – 0.67 PX 50:50/ ACP: Spot
Global Supply/Demand
57 60 63 68 72 75 79 82
81%86% 88% 86% 88% 87% 84% 84%
0
20
40
60
80
100
120
2015 2016 2017 2018 2019E 2020F 2021F 2022F
Demand Op.Rate
+6% CAGR
+5% CAGR
MMT
Capacity Addition (MMT)
Industry Spread(1)
132
191
257
222
85 74 65 69 75 86
149 125
182 156
87
137
0
50
100
150
200
250
300
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
1Q19
2Q
19
3Q
19
4Q
19
20
19
$/t
19E 20F 21F 22F
China 2.8 2.6 6.6 3.9
Rest of World (0.4) 0.6 0.1 0.9
Total Capacity Addition 2.4 3.2 6.7 4.8
Total Demand Addition 3.7 3.1 3.5 3.8
Include Corpus Christi in USA
Average 128
12IVL 3Q19 Results PresentationSNG
Integrated Asia PET/PTA Spreads
Source: IVL Analysis, IHSNote: Integrated PET Spread = PET Spread + 0.86*PTA Spread
Integrated PET Spread - LTM Integrated PET Spread -Forecast
$/t $/t
120 146 145
165
118 130 131 118 105 116 109 104
104
111 107
141
182 146 165
126
111 92 71
62
224
257 252
306 300
276
296
244
216 208
180 166
Ja
n-1
9
Feb
-19
Ma
r-19
Ap
r-19
Ma
y-1
9
Ju
n-1
9
Ju
l-19
Au
g-1
9
Sep
-19
Oct
-19
No
v-1
9
Dec
-19
PET PTA (0.86x)
175
124 143
168 139 137 149 134 124 135
179
126
114
164
221 191
73 64 56 60 64
74
128
118
289 288
364 359
212 201 205
194 188 209
307
244
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
PET PTA (0.86x)
Average 255Average 244
13IVL 3Q19 Results PresentationSNG
MEG Industry OutlookIVL is a net buyer of around 2MMT
286
188
370
513
325 369
281
408 409
561
489
243
136
238
115
183
0
100
200
300
400
500
600
700
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
1Q19
2Q
19
3Q
19
4Q
19
20
19
$/t
Industry Spread(1)
Source: ICIS, IHS IVL AnalysisNote: (1) Industry Spread =MEG ICIS Spot, CFR China-0.58 IHS Ethylene Spot Production Cash Cost Naphtha Feed
Global Supply/Demand
26 27 28 30 32 33 34 35
80% 77% 80% 82% 78%74%
69% 68%
0
10
20
30
40
50
60
2015 2016 2017 2018 2019E 2020F 2021F 2022F
Demand Op.Rate
+5% CAGR+3% CAGR
MMT
Demand vs. Capacity Growth
1.2 1.1 1.22.1
1.3 1.0 1.2 1.12.3
1.7 1.0 2.3
2.9
4.9
3.8
2.2
80% 77% 80% 82% 78%74%
69% 68%
0
2
4
6
8
2015 2016 2017 2018 2019E 2020F 2021F 2022F
Demand Growth Capacity Growth Op.Rate
MMT
$/t
IVL MEG Integration
13%
87%
Captive Merchant
MEGRequirement
~2.3 MMT
14IVL 3Q19 Results PresentationSNG
317
398
322
614 572 574
369 345 385
353
448
545
374 319
259
374
0
100
200
300
400
500
600
700
800
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
1Q19
2Q
19
3Q
19
4Q
19
20
19
PX Industry OutlookIVL is a net buyer of around 2.3MMT
Global Supply/Demand
39 40 42 46 48 50 53 55
83% 85% 84% 88% 88%83% 83% 81%
0
20
40
60
80
2015 2016 2017 2018 2019E 2020F 2021F 2022F
Demand Op.Rate
+6% CAGR+5% CAGR
MMT
Demand vs. Capacity Growth
2.01.5
2.1
3.7
2.2 2.1 2.4 2.5
1.2 0.5
3.1
1.6 2.5
6.3
2.5
4.5
83% 85% 84% 88% 88%83% 83% 81%
0
2
4
6
8
2015 2016 2017 2018 2019E 2020F 2021F 2022F
Demand Growth Capacity Growth Op.Rate
MMT
$/t
Industry Spread(1)
Source: IVL AnalysisNote: (1) Industry Spread = PX 50:50/ ACP:ASP – Naphtha IHS, Full-Range C&F Japan
22%
78%
Captive Merchant
PXRequirement
~3.0 MMT
IVL PX Integration
15IVL 3Q19 Results PresentationSNG
Note: Final recycled marine plastic content in the bottle will vary post production, between 20-25%Source: Coca-Cola
IVL with Coca-Cola & other partners helped convert marine waste into recycled PET for the first time
16IVL 3Q19 Results PresentationSNG
19 12
47
96
14
15
0
20
40
60
80
100
120
140
3Q18 3Q19
EG Others IVL adjustments
7748
231254
54 58
0
50
100
150
200
250
300
350
400
2018 LTMSep19
Spindletop EBITDA ($M)
• Huntsman EBITDA from Spindletop operations was $360M in LTM 3Q19 after IVL adjustments
• Synergies of $100M within 3 years:
• $40M from procurement and efficiencies
• $60M from specialty surfactants project
0%YoY
• Geo-advantaged USGC feedstock
• Increase in less cyclical HVA products (e.g. surfactants)
• Captive outlet for LC cracker; further value chain integration
55%YoY
79
122362 360
Note: IVL adjustments to Huntsman reported EBITDA to take into account of Turnaround and Inspection costs inline with IVL reporting policies and other adjustments; the numbers include certain IVL analysis by segment which might be different from Huntsman numbersSource: Adjusted EBITDA from discontinued operations as reported by Huntsman and IVL Analysis
3Q 2019 Results – Spindletop (Huntsman EO/PO Assets)Expect completion of deal by 1Q20
17IVL 3Q19 Results PresentationSNG
IVOL/IVOG and Spindletop Pro-forma EBITDA
Quarterly EBITDA
92
57 42 45
6
45 40
103
99
79 82
68
88 122
194
156
121 127
74
133
162
-20
20
60
100
140
180
220
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19
IVOL/IVOG Spindletop
$ mn
Annual EBITDA
207 264 237
136
291
317 362
360
498
581 599
496
-80
120
320
520
720
2016 2017 2018 LTM3Q19
$ mn
Source: IVL AnalysisNote: pro-forma EBITDA for IVOL and IVOG, adjusted for unplanned shutdown
+ Synergies of $100M To Be Realized Within 3 Years
Historical average $543M
AdditionalSynergy
by 2023: $100M
18IVL 3Q19 Results PresentationSNG
18
(2)
26
18
-10
0
10
20
30
40
50
3Q18 3Q19
115
(22)
57
83
-50
0
50
100
150
200
LTM3Q18
LTM3Q19
Specialty Chemicals Core EBITDA ($M)
Note: Specialty Chemicals include NDC, IPA and Specialty PET; changes in margin are driven by spread, cost, and mix; NDC EBITDA dependent on NDC production, which is undertaken periodically to get the best cost efficiencies; unplanned shutdown refers to Auriga plant; EBITDA loss from unplanned shutdown of Auriga plant in 3Q19 and LTM 3Q19 of $4M and $25M respectivelySource: IVL Analysis
3Q18 3Q19 LTM 3Q18 LTM 3Q19
Core EBITDA ($/MT) 251 83 286 86
Core EBITDA Margin 15% 7% 17% 6%
Core ROCE 27% 2% 27% 3%
-64%YoY
-74% margin+10% volume
(-18% organic)
• Margin decline driven by lower industry-wide Isophthalic Acid (IPA) spreads
• Organic volumes decline affected by one-time unplanned shutdown in the Auriga asset
Segment strategy undergoing review and will be shared during IVL’s Capital Market day in February 2020
6116
17244-65%
YoY-82% margin+17% volume(-5% organic)
IPA NDC and PET HVA
Unplanned shutdown
+4+25
3Q 2019 Results – Specialty ChemicalsUnderpinned by lower IPA spreads and unplanned shutdown
19IVL 3Q19 Results PresentationSNG
A G E N D A
Performance Update
Industry Update
Projects Update
Outlook
20IVL 3Q19 Results PresentationSNG
Major Projects Update & Recycling Growth Plan
Corpus Christi Recycling IVOL Spindletop Sinterama
Business Integrated PET Recycling Ethylene CrackerPropylene Oxides,
Ethylene Oxides and Derivatives
Mobility and Lifestyle Fibers
CapacityPET: 367 ktaPTA: 433 kta
~700 kta Ethylene: 430 kta 3,147 kta 30 kta
Region North AmericaNorth Americas, Europe
and AsiaNorth America
North America, Asia and Australia
Americas, Europe and Asia
Commencement of Commercial Op.
4Q21/1Q22 2020-2023 1Q20 1Q20 4Q19
CAPEX ($M) 600-700 ~1,000 ~1,000 2,076* 65
CAPEX spent as of 30 Sept 2019 ($M)
386 Nil 897 Nil Nil
Note: *Acquisition cost of Spindletop (Huntsman asset) including pension liabilities. For Corpus Christi, capacity and CAPEX are adjusted for IVL share of business. Source: IVL Analysis
Integrated PET Integrated Oxides and Derivatives Fibers
21IVL 3Q19 Results PresentationSNG
New Opportunities for PET from Recycling
Case Study: Danone La Serenísima Yoghurt
• Packaging revamp in Argentina from thermoformed PP & polystyrene to PET for yoghurt jars
• Benefits of PET packaging are:
– Transparent, allowing consumers to see the content
– Recyclable material, in-line with transition to circular economy
Substitution to PET examples
“We decided to choose PET because it already has a
developed recycling market in Argentina, and by doing
this, we feed an inclusive recycling chain"
Maximiliano SassoneDirector of Research and Innovation
Danone Argentina
Source: News articles, Packaging Digest, Food Navigator LatAm
Thermoform PP & PS
PET
HDPE &Paper-Based Packaging
PET
HDPE
PET
22IVL 3Q19 Results PresentationSNG
IVL Recycling Progress
162
326
~800
2019 2023E 2023E
Note: (1) Recycling capacity on Flakes, Returns and investment on Flakes plus end products i.e. rPET, rFibers, single pallet solution (SPS) and chemical recyclingSource: IVL data; Lit search
Recycling Footprint
Creating Returns
Recyclable Feedstock in kt (1)
ROCE (%)
Growing our Volumes
Strategy Towards 2023
IPI, Thailand
EcoMex
IVPM
AlphaPet
Auriga Polymers
Wellman, Spijk
Wellman, Mullagh
Wellman, Verdun
IVSS
Wellman, Neufchateau
Industry recognitionAchievements to date
46 billion PET bottles recycled
840K tons of plastic waste saved
from going to landfills *
1.25 million tons of carbon
footprint reduced *
Planned with projects in hand
2XPotential
>2X
11%2019E
12-14%2023E
23IVL 3Q19 Results PresentationSNG
A G E N D A
Performance Update
Industry Update
Projects Update
Outlook
24IVL 3Q19 Results PresentationSNG
Expand recycling footprint (both mechanical and chemical) to spearhead industry-wide change
Complete Corpus Christi project on revised timeline & budget
Close, consolidate and realize synergies on Huntsman
acquisition
Start Lake Charles gas cracker in 1Q 2020
Extract synergies in mobility, lifestyle and hygiene segments
Focus on organic growth via innovation
Corporate
Integrated PET
Integrated Oxides & Derivatives
Fibers
Financial Objective: Double EBITDA by 2023
Implement cost management programs Drive operational excellence and reliability
Improve working capital management to drive further growth in operating cash flows
Reinforce customer-centric culture to meetthe evolving needs of key customers
IVL’s strategic priorities going forward
In the 2020-23 plan, there is ~$3bn headroom of unallocated investment budget
25IVL 3Q19 Results PresentationSNG
PET as the future of circular packaging
Link: https://player.vimeo.com/video/368776117#t=252s
“A recycled PET (polyethylene terephthalate) bottle has a much lower carbon footprint than an aluminum can or a returned glass bottle,”
James Quincey, CEO Coca-Cola7 November 2019
Reuters, 7 November 2019 One Young World Summit, October 2019
Source: Reuters, One Young World
Thank you
27IVL 3Q19 Results PresentationSNG
Note: Total production – Integrated PET at 2.5MMt, fibers at 0.5MMt, packaging at 0.1 MMt, IO at 0.1 MMt, specialty chemical at 0.2 MMt; Core EPS growth is calculated based on core EPS in USDSource: IVL Analysis
-3%
Core EBITDA
$281M(THB 8.6B)
-31%
Net Op. Debtto Equity
0.61x
+8bps
Core EPSin USD(THB 0.45)
-67%
TotalRevenue
$2.8B(THB 86.8B)
Total Production
3.3 MMt+23%
OCF $ 405M(THB 12.5B)
+47%
% change YoY% change YoY
3Q 2019 Financial Highlights
28IVL 3Q19 Results PresentationSNG
Note: Integrated PET include PET, PTA, Px and recycling; changes in margin are driven by spread, cost, and mix; EBITDA loss from unplanned shutdowns in India and Rotterdam plants in 3Q19 and LTM 3Q19 worth $2M and $37M respectively, and PTA conversion to IPA in USA in 3Q19 and LTM 3Q19 worth $12M and $33M respectively Source: IVL Analysis
• Sharp decline in margins driven by lower industry-wide integrated PET spreads
• PX underperformed yoy
• Integrated PET volumes up, organically and inorganically
Management focus on cost saving initiatives, operational excellence and reliability, working capital optimization and rPET growth strategy
Integrated PET Core EBITDA ($M) Unplanned shutdown + PTA to IPA conversion
3Q18 3Q19 LTM 3Q18 LTM 3Q19
Core EBITDA ($/MT) 125 74 100 86
Core EBITDA Margin 13% 10% 11% 10%
Core ROCE 23% 13% 16% 15%
25-16
231
202
-25
75
175
275
3Q18 3Q19
698
804 36
8
0
300
600
900
LTM3Q18
LTM3Q19
+11%YoY
-17% margin+28% volume
(+16% organic)
-27%YoY
-49% margin+22% volume(+9% organic)
+14
+70
186
256 812734
PXIntegrated PET, excl. PX
3Q 2019 Results – Integrated PET
29IVL 3Q19 Results PresentationSNG
Integrated Oxide & Derivatives EBITDA ($M)
Note: Integrated Olefins is renamed as Integrated Oxides and Derivatives which include IVOL and IVOG (Indorama Ventures Oxide & Glycols, LLC); changes in margin are driven by spread, cost, and mix; EBITDA loss from IVOG catalyst change turnaround of $23M in LTM 3Q19, FM/unplanned shutdown of $4M in 3Q19 and $37M in LTM 3Q19Source: IVL Analysis
• EBITDA decline mainly in MEG, as margins declined due to lower industry-wide MEG spreads
• Force Majeure/ unplanned shut-downs contributed to EBITDA loss of $37M and IVOG catalyst change led to an EBITDA loss of $23M in LTM
• Geo-advantaged USGC feedstock
• Captive outlet for LC cracker; further value chain integration
• Increase mix of less cyclical HVA end-markets (e.g. surfactants)
Management focus
Management focus on Spindletop integration and synergy realization, IVOL cracker start up and operations excellence and reliability
22 17
30
0
10
20
30
40
50
60
3Q18 3Q19
94 67
140
0
50
100
150
200
250
LTM3Q18
LTM3Q19
-69%YoY
-75% margin+5% volume
3Q18 3Q19 LTM 3Q18 LTM 3Q19Core Overall EBITDA ($/MT)
433 126 437 241
Core EO EBITDA ($/MT)
443 297 396 400
Core EBITDA Margin 48% 20% 50% 31%
Core ROCE 28% 2% 32% 8%
16
94
EO EG
27
234
-1
52
+4
Planned + unplanned shutdown
+60
-60%YoY
-33% margin
-27% volume
3Q 2019 Results – Integrated Oxides and DerivativesLower MEG spreads
30IVL 3Q19 Results PresentationSNG
12 19
14
15
2317
0
10
20
30
40
50
60
3Q18 3Q19
26
9153
68115
85
0
50
100
150
200
250
300
LTM3Q18
LTM3Q19
Fibers Core EBITDA ($M)
Note: Fibers include Mobility, Hygiene and Lifestyle verticals. Changes in margin are driven by spread, cost, and mix; Include the acquisition of Avgol in July 2018Source: IVL Analysis
3Q18 3Q19 LTM 3Q18 LTM 3Q19
Core EBITDA ($/MT) 143 106 155 157
Core EBITDA Margin 7% 6% 8% 8%
Core ROCE 4% 1% 5% 3%
+25%YoY
+2% margin+24% volume(+9% organic)
+3%YoY
-35% margin+38% volume(-4% organic)
• Hygiene vertical volumes higher from strong nonwoven fabrics and fibers demand in North America
• Mobility vertical growing despite global slow-down in demand and weak performance of automotive sector
• Lifestyle vertical adversely affected from stock overhang due to US-China trade disputes
Segment transformation plan being developed, including review of costs & productivity, portfolio and operating model optimization
Hygiene Mobility Lifestyle
24451
194
49
3Q 2019 Results – Fibers
31IVL 3Q19 Results PresentationSNG
11
17
0
2
4
6
8
10
12
14
16
18
3Q18 3Q19
45
66
0
10
20
30
40
50
60
70
LTM3Q18
LTM3Q19
Packaging Core EBITDA ($M)
Note: Changes in margin are driven by spread, cost, and mix; LTM 3Q19 include the acquisition of Medco on 13 Nov 2018Source: IVL Analysis
+47%YoY
5% margin+42% volume
(+12% organic)
+62%YoY
+30% margin+32% volume(-2% organic)
3Q18 3Q19 LTM 3Q18 LTM 3Q19
Core EBITDA ($/MT) 277 340 308 319
Core EBITDA Margin 18% 22% 20% 20%
Core ROCE 20% 20% 21% 19%
• Volumes increased from acquisition and organic growth
• Packaging segment strength in-line with growing PET demand
Strong performance is evidence of continued PET demand growth
3Q 2019 Results – Packaging
32IVL 3Q19 Results PresentationSNG
281
405
71 99 21
120 4
0
50
100
150
200
250
300
350
400
450
Core EBITDA InventoryGain/(Loss)
Cash inflow withlower prices
Cash outflow withvolumes/projects
Cash inflow withefficiencies
Cash outflow for tax OCF
Price Impact
3Q19 $M
Source: IVL Analysis
Core EBITDA to Operating cash flowOperational excellence
Net working capital reduced by 3 days
3Q19: 38 days3Q18: 41 days
33IVL 3Q19 Results PresentationSNG
Key Definitions
Term Definition
Core When used in relation to a financial metric (e.g. EBITDA, earnings, etc.), refers to that metric excluding any inventory gains/(losses) and one-time extraordinary items
NOCE Net Operating Capital Employed refers to Net Debt minus Non-Operating CAPEX plus Total Equity
Net Op. Debt Net Operating Debt refers to Net Debt minus Non-Operating CAPEX
Spindletop Huntsman EO/PO & Derivatives business
Metrics and acronyms
Metrics and acronyms
Integrated PET
Includes full PET value chain: PX (Paraxylene), PTA (Purified terephthalic acid), PET (Polyethylene terephthalate), and Recycling
Integrated Oxides and Derivatives
Include olefin intermediates and EO: MEG (Monoethylene glycol), DEG (Diethylene Glycol) and TEG (Triethylene Glycol) and EO (Purified Ethylene oxide)
FibersPolyester, Rayon, Nylon, PP (poly propylene), composites and worsted wool fibers for three end uses: Mobility (automotive), Lifestyle (active wear, apparel), and Hygiene (baby diapers, feminine care)
Specialty Chemicals
Includes Specialty PET (for medical, premium bottles, films and sheet), IPA (Isophthalic acid, for PET production, unsaturated polyester resins, and coatings), NDC (Naphthalene dicarboxylate, for optical displays and industrial/ mobility uses)
Packaging PET preforms and bottle packaging for beverage and food end uses
