41
On Path to Long-Term Value IVL Capital Markets Day 2018 February 22, 2018
On Path to Long-Term Value
IVL Capital Markets Day 2018
February 22, 2018
2017 Financial Results
Sanjay Ahuja, CFO
2017 Financial Results Delivering On Expectations
3
+30% YoY
Core
Net Profit
$459M
+68% YoY
Core EPS after PERP
THB 2.91
+63% YoY
EPS after
PERP
THB 3.98X
+26% YoY
Core
EBITDA
$1,004M
Production 9.1MMt
+4% YoY
4
Solid Financial Performance Strong Earnings Momentum Continues
EBITDA/ton ($/MT) EBITDA Margin (%)
ROCE (%) ROE (%)
82 91 91 89 110
2013 2014 2015 2016 2017
6% 8% 9% 11% 12%
2013 2014 2015 2016 2017
6% 8% 10% 11% 12%
2013 2014 2015 2016 2017
3% 6% 8%
13% 17%
2013 2014 2015 2016 2017
Note: Core Financials
Robust Financial Headroom $7 Billion Investment Headroom for Future Growth
5
Dec 31, 2017 NetD/E
Ongoing ProjectCAPEX Dec 17
Dec 31, 2017 NetOp. D/E
Free Cash Flow in2018 & 19 based
on approvedprojects
Estimated Dec 31,2019 Net D/E
Capex Headroomfrom 2018 to
2021
Estimated Dec 31,2021 Net D/E
Note: 100% IVL W2 exercise considered, budgeted business plan
0.75x
0.54
$764M
~1x $7B
~0.2x
2017 to 2021 Net Debt to Equity Bridge
Delivering On Our Business Strategy
D.K. Agarwal, CEO PET & Feedstock
Favorable Industry Trends Industry Fundamentals Reflect Positive Changes
7
Strong polyester consumption growth
China import waste ban creates more demand for virgin materials
Global capacity balancing
Asia PTA margin recovery with positive impact on global PTA and PET
Rising freight and duties further increasing import parity 2H17-2021
Asia PET Business Strong Demand Growth, Capacity Balancing
8
CAGR 2017-21
India 12%
Indonesia 11%
China 7%
Thailand 6%
0
1,250
2,500
2016 2017 2018 2019
China
RoA
299
757
0
500
1,000
2017China Taiwan ThailandKorea Indonesia India
KM
T
KM
T
Asia PET Demand Growth
Asia New PET Capacity 2016-2019
Japan PET Imports - 2017
Strong demand growth, fueled by emerging economies
Limited new PET capacity outside of China
Japan AD creates opportunity for IVL to increase sales in key market with high demand
AD
PET Asia
50
75
100
125
150
175
200
2013 2014 2015 2016 2017 2018 2019
IVL Industry
Asia PET Spreads
$/M
T
Note: Asia PET spreads over PTA/MEG Source: Industry Data, IVL Analysis
Asia PTA Business Lower Inventory Levels, Higher Demand Growth, Capacity Balancing
9
0
5
10
15
20
25
30
Jan-14 Jan-15 Jan-16 Jan-17
4 days
20 days
29 days
0
50
100
150
200
250
300
China PTA Inventory
PT
A S
pre
ad
s ($
/MT
)
Effective PTA Capacity – 2022 Basis(KMT)
2018 Demand 69 KMT
2022 Demand 86 KMT
Global PTA Cost Curve
Da
ys
300
250
200
150
100
50
0
China's PTA inventory end-2017 at its lowest level in last 4 years
China import waste ban creates more demand for PTA
PTA industry spreads will need to continue to improve to justify new investment and plant restarts
PTA
Asia
50
75
100
125
150
175
2013 2014 2015 2016 2017 2018 2019
IVL Industry
Asia PTA Spreads
$/M
T
Note: Asia PTA spreads over PX Source: Industry Data, IVL Analysis
Asia Fibers Business China Supply-Side Reforms, China Import Waste Ban
10
China PSF Production
China import waste ban increases demand for virgin fibers
Reducing China cotton supply supports fiber business
Rising recycle feedstock costs pushes virgin PSF margins up
4.0
6.0
8.0
10.0
2014 2015 2016 2017 2018 2019 2020 2021
Virgin Recycle
MM
t
10,000
7,000
5,000
2000
0
RM
B/M
T
2016 2017 2M 18
Virgin PSF Price
Recycle PSF Price
Virgin Raws
Fibers Asia
Asia PSF Spreads
100
150
200
250
300
2013 2014 2015 2016 2017 2018 2019
IVL Industry
$/M
T
China Cotton Supply
0
10
20
30
13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21
Demand Imports Production Beginning stocks
China PSF Values
Note: Asia PSF (Polyester Staple Fiber) spreads over PTA/MEG Source: Industry Data, IVL Analysis
MM
t
West PET Business Increasing Import Parity with Higher Asia PTA, Rising Freight Rates
11
Asia to EU PET Import Parity Drivers-2017/16
US Non-NAFTA PET Imports - 2017
600
0
350
700
2017
Brazil Indonesia Korea
Taiwan Pakistan Others
KM
T
AD Case 490 KMT
0
10
20
30
Asia PTAMarginsIncrease
Ocean FreightsIncrease
$/M
T
Increase in Asia PTA margins, rising freight rates and other factors as import parity goes up
US PET AD case against 5 countries moving forward
PET West
West PET Spreads
100
150
200
250
300
2013 2014 2015 2016 2017 2018 2019
IVL Industry
$/M
T
Note: West PET spreads over PTA/MEG Based on IVL NAM and EMEA production mix Source: Industry Data, IVL Analysis
West PTA Business Import Substitution, Increasing Asian Margins and Freights
12 Note: West PTA spreads over PX Based on IVL NAM and EMEA production mix Source: Industry Data, IVL Analysis
Well-established and balanced Western PTA marketplace
EU PTA with substantial import substitution potential (~1,000MMt ~1/3 of demand)
Artlant to partly replace imports
Increase in Asia PTA margins and rising freight rates with positive impact on EU PTA as import parity goes up
West PTA Producers - 2018
EU PTA Demand 2014-2017
Asia to EU PTA Import Parity Drivers-2017/16
0
10
20
30
Asia PTA MarginsIncrease
Ocean FreightsIncrease
$/M
T
0.0
3.0
6.0
NAM EU
IVL BP Alpek PKN EMNCa
pa
city
(M
Mt)
3 producers
4 producers
0%
25%
50%
0
1,000
2,000
3,000
2014 2015 2016 2017
Domestic Imports Imports Share
KM
T
PTA
West
West PTA Spreads
100
150
200
250
300
2013 2014 2015 2016 2017 2018 2019
IVL Industry
$/M
T
<5 yrs
West MEG Business Capturing Integrated Margins in Upcycle Scenario
13 Note: US MEG spreads over ethylene Source: Industry Data, IVL Analysis
80% 82% 79% 80%
77% 80%
81% 80%
60%
70%
80%
90%
2012 2013 2014 2015 2016 2017 2018 2019
Global MEG Operating Rates
Uti
liza
tio
n (
%)
1,600 1,400 1,200 1,000
800 600 400 200
0
Mid
dle
Ea
st
No
rth
Am
eric
a
Wes
t E
uro
pe
Asi
a
(ex
cl.
Ch
ina
)
Ch
ina
Oth
er
La
tin
Am
eric
a
Ru
ssia
& C
asp
ian
C
hin
a M
TO
/CT
O
50,000 0 100,000 150,000
1,400 2,500
IVOL New Greenfield
0
1,000
2,000
3,000
Regional Ethylene Production Cost 2020
Brent: $75/bbl Henry Hub NG: $2.85/MMBTU
>7 yrs Payback
Cracker Investment Cost $
/MT
$
/MT
Eth
yle
ne
Global MEG market tight for at least 2018-2019 due to project delays
China import waste ban creates more demand for MEG
IVL is investing in one of the most competitive regions
Rising crude makes investment even more accretive
Highly attractive investment vs new build and right-sized
West MEG
US MEG spreads
0
100
200
300
400
500
600
700
2013 2014 2015 2016 2017 2018 2019
IVL Industry
$/M
T
220 218 205
194
217 234 230
0
50
100
150
200
250
2013 2014 2015 2016 2017 2018 2019
Asia PET West PET Asia Fibers
Asia PTA West PTA US MEG
Weighted Average Spread
14
IVL Necessity Business On Recovery Path Industry Margins Have Bottomed-Out, IVL at Premium to Industry
Industry Necessities Spreads ($/MT) IVL Necessities Spreads ($/MT)
195 193 176 169
197 217
201
0
50
100
150
200
250
2013 2014 2015 2016 2017 2018 2019
Note: Both Industry and IVL weighted average spreads based on IVL Necessities production mix, US MEG in 2018&19 include cracker Source: Industry Data, IVL Analysis
Nece-ssities
15
IVL Steady HVA Business Strong Growth Momentum Continues
Innovation-driven
Limited numbers of players
High barriers to entry
High growth potential
Investing in Hygiene, Safety and Well-being mega trends
Scaling Feedstock, PET and Fibers HVA platforms
Sustaining profitability in IPA with production expansion
HVA Fundamentals
IVL HVA Business Drivers
IVL HVA Spreads ($/MT)
547
687 721 715
815 783 773
0
250
500
750
1,000
2013 2014 2015 2016 2017 2018 2019
IVL PET HVA IVL Fibers HVA
IVL Feedstock HVA IVL HVA Spread
HVA
Note: Weghted average spread based on IVL HVA production mix
16
IVL Necessities & HVA Business Enhancing Overall Margins
281
317 312 293
335 343 336
0
100
200
300
400
2013 2014 2015 2016 2017 2018 2019
Asia PET West PET Asia Fibers
Asia PTA West PTA US MEG
PET HVA Fibers HVA Feedstock HVA
Weighted Average IVL Spread (RHS)
Note: Weghted average spread based on IVL overall production mix, US MEG in 2018 and 2019 includes cracker
Nece-ssities
IVL Necessities & HVA Spreads ($/MT)
HVA
Creating Value with HVA
Uday Gill, CEO Fibers
IVL Ecosystem Fueled by Improving Customer Experience Enhanced Customer Experience Leads to Trust and Intimacy
Extra light composites for
automotive
Cuddly soft fibers for diapers
Recycled fibers for sustainability
IVL Select Solutions for Customer Experiences
in Fibers
18
IVL with Polyester at Our
Core
GDP++ Growth
Hygiene
A&I
H&A
F&B
Propylene
IPA
Rayon
PA66
PP/PE
Packaging
Fabrics
Films
Ethylene
IPA
PX/MX
MEG
PTA
EU
Asia
NA ME&A
NDC
19
Global HVA Fibers Market with Strong Growth Potential HVA Expected to Capture 50% of Incremental Demand by 2021
2 4 10
17 9
14
23
32
1980-1990 1990 – 2000 2000 – 2010 2010 – 2021
Industry Necessities Fibers
Industry HVA Fibers
Global Incremental Fiber Consumption (MMt)
Source: Industry Data, IVL Analysis
20
Expanding Our HVA Fibers Portfolio Thrust on Auto, Industrial, Hygiene to Scale Up Capacities through M&A and Organic Growth
NAM EMEA Asia
IVL HVA Fiber Capacity by Region (KMT) IVL HVA Fiber Production by Segment (KMT)
0
100
200
300
400
20
15
20
16
20
17
20
19
20
21
20
15
20
16
20
17
20
19
20
21
20
15
20
16
20
17
20
19
20
210
100
200
300
400
500
20
15
20
16
20
17
20
19
20
21
20
15
20
16
20
17
20
19
20
21
20
15
20
16
20
17
20
19
20
21
Automotive Industrial Hygiene
21
Long Qualification Cycles Create Barriers to Entry HVA Boosts Brand Premium in Necessities Fibers
0 30 60 90 120 150
Tire cord fabric
Hygiene cover stock
Wipes and medical
Automotive interiors
Flame retardant fibers
Fillwell hygiene
Airbag yarn
2013 2014 2015 2016 2017
Qualification period
3 years
2.5 year
2 years
3 years
2.5 years
2 years
3 years
YoY volume growth (KMT)
Sp
rea
d (
$/M
T)
HVA Fibers – Robust Value Driver for IVL Wide Economic Moats Created for Sustainable Growth
0
200
400
600
800
1,000
2014 2015 2016 2017
Published 1.4D Staple Fibers
IVL 1.4D Staple Fibers IVL Essentials
IVL HVA
IVL Brand Premium IVL Value Add
Premium
22
HVA Boosts Overall Fiber Profitability Margin Expansion by Cost/Product Innovation
0
50
100
150
200
250
300
350
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
IVL Fiber HVA
IVL Fiber Average
IVL Fiber Necessities
1x
2x
>4x $/M
T
0
150
300
450
600
750
900
1,050
0
500
1,000
1,500
2,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
IVL Fiber HVA conversion cost
IVL Fiber HVA volume (KMT)
3x
2x
KM
T
$/M
T
IVL Fiber HVA spread
HVA Fibers – Robust Value Driver for IVL (Cont’d) Wide Economic Moats Created for Sustainable Growth
Growing Our Automotive and Tire Business
Arnaud Closson, MD Glanzstoff
IVL - A Global Leader in Tire Reinforcement Auto & Tire ~$0.9 Billion Business for IVL by 2019, Expanding at ~40% CAGR
24
0
250
500
750
1,000
2014 2015 2016 2017 2018 2019
~40% CAGR
IVL Auto & Tire Revenue ($m)
Note: Includes announced projects
Demographics and Wealth
Greater affluence amongst the middle class
Original Equipment Fitments
Integral part of vehicle Design
Increasingly Stringent Regulation
Regulations demanding higher fuel economy
New Product Developments
New technologies, specialized polymers, unique threads
Global Tire Market With Strong Growth Potential Creates Opportunity for Investment through M&A and Organic Growth
25
Car Parc 2017-2021
(Million vehicles) 1,306
1,475
2017 2021
Tire Production 2017-2021
(Million tires)
1,697
1,913
2017 2021
Source: Industry Data, IVL Analysis
+170 mn cars
Tire Yarn Demand - 2021 (KMT)
16%
84%
IVL Share 2017
930 KMT
+220 mn
tires
Growth Drivers
Focus on Premium Segments
IVL - Well Positioned Within Tire Industry Leading Supplier to World-Class Customers
26 Source: Industry Data, IVL Analysis
Global Customer-Centric Presence
Global Market Leader
Total Solution Provider
PEN Single-
end-cord/ Hybrid
Rayon
PA 66/ PET Advanced
PET Standard
IVL Focus
China PET Tire Cord
Global Rayon Tire Cord
Global Single-end-cord/Hybrid
#2
#2
#1 Lovosice, CZ
Steinfort, LU
Pizzighettone, IT
Obernburg, DE
Queretaro, MX
Longlaville, FR
Qingdao, CN
Guangdong, CN
Sidewall
Thread
Cap Ply
Belts
Carcass
Inner Liner Bead
Apex
Aramid
PET Advanced PET
Rayon PEN
N66 Aramid hybrid
PEN
Winnsboro,US
27
Strong R&D Capability and Synergy Cutting-Edge Technology and Production Know-How
Leading technology example – Single-end-cord for Run-flat and High
Performance tires Electrification
Lightweight materials
Connected vehicles
Shifts in mobility preferences
Autonomous vehicles
New tire design requirements offer an opportunity to partner
with world-class customers and deliver
best-in-class innovative solutions
28
Electric Vehicle Opportunities for Tires, Body and Interior Solutions
comfortable environment
safety features embedded
futuristic features
noise reduction
lightweight
new design opportunities
less complex engine
Taller Tires Fuel Economy
Noise Control
Autonomous Driving
Electric Vehicle
Implications
Implications on reinforcement
materials
IVL Solution Platform
Passive safety features will prevail
Additional active safety features
New textile developments Composites Insulation
29
Solid Platform for Future Growth and Expansion Integrating the Best
A global market leader in tire reinforcement with focus on premium segments
Partnering with world-class customers and delivering best-in-class solutions for their needs
Well positioned, innovation-driven, high growth business for IVL
Robust and long-term value driver for IVL
Clear Direction Towards 2021
Aloke Lohia, Vice-Chairman and Group CEO
Our Debut on DJSI Reflects Our Strong Delivery IVL Ranks as #5 of all 2017 DJSI Listed Chemical Companies
2014
2015
2016
20%
69%
84%
95% IVL DJSI Score
2017
31 Source: RobecoSAM, IVL
Delivering On Our Financial Plan Doubled Our EBITDA in Last 4 Years
32
478
568 640
775
1,004
2013 2014 2015 2016 2017
x2 EBITDA Increase
Core EBITDA ($M)
0.35
0.76
1.06
1.79
2.91
2013 2014 2015 2016 2017
Creating Superior Shareholder Returns Strong EPS Growth in Trough Business Environment
33
Core EPS After PERP (THB/Share)
70% EPS
CAGR
34
Countries 12 15 25
R&D Centers
2 6 11
Patents Not material 250 564
DJSI Score - - 95% (#51)
Employees ~6,000 9,173 15,039
0
2
4
6
8
10
12
14
2010 2013 2017 2019F
NA PET
NA Olefins
NA Fibers
NA Aromatics
EMEA PET
EMEA Fibers
EMEA Aromatics
Asia PET
Asia Fibers
Asia Aromatics
34 sites
24 sites
17 sites
20 sites
15 sites
10 sites
15 sites
4sites
4 sites
IVL
Ca
pa
city
(M
Mt)
3.7
6.8
11.3
1. Of all 2017 DJSI listed chemical companies Note: Capacity data including JVs in ratio of JVs %
Constantly Upgrading Our Value Proposition Strategy and Execution Delivered True Value Over Time
13.2
34 sites
25 sites
17 sites
35
Our Roadmap for Organic Growth Expected EBITDA Growth with Approved Projects
247 296
195 208
197
501
2015 2017 Volume Margins, Costs andMix
Approved Projects 2019F
Feedstock
Fibers
PET
2015 to 2019 EBITDA ($M)
EBITDA ($/MT) 91 110 Increased
Net Op Debt/Equity 0.81x 0.54x <0.2x
ROCE (%) 10% 12% >15%
1,004
Note: 2019F over 2017 as per management best estimates and may change materially if there are changes in underlying assumptions due to external or internal reasons
640 ~45% EBITDA Increase
Existing Business
36
IVL Consolidated
By Segment By Region
Increase in Production (%) ~25% ~25% ~20% ~30% ~10% ~40% ~35%
Increase in EBITDA (%) ~35% ~30% ~50% ~35% ~35% ~20% ~70
Growth Capex (2018 and 2019) $1.5b ~30% ~20% ~50% ~50% ~30% ~20%
Maintenance Capex (2018 and 2019) $0.3b ~20% ~20% ~60% ~40% ~30% ~30%
Total Capex (2018 and 2019) $1.8b
Simple Payback of Approved Projects ~4.5 yrs
Impact with Existing Business and Approved Projects Expected Increase in EBITDA of ~35% in 2019 over 2H17 Annualized
PET Fibers Feedstock NAM EMEA Asia
2H17 Annualized to 2019 EBITDA
Note: 2019F over 2H17 annualized as per management best estimates and may change materially if there are changes in underlying assumptions due to external or internal reasons, Out of $1.8B capex $764M is spent by 2017, Production excludes JV production
Key Takeaways
37
On Path to Becoming a World-Class Chemical Company Making Great Products for Society
Delivering ~70% Annual EPS Growth in Trough 2013-2017 Business Environment
2H17 Marks a Positive Structural Shift for the industry and Business
~45% Expected EBITDA Growth in 2019 over 2017 with Existing Business and Approved Projects
$7b Investment Headroom by 2021 after $1.8b Committed Capex by 2019
Disclaimer
38
This presentation contains “forward-looking” statements of Indorama Ventures Public Company Limited (the “Company”)1 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. 1Where the context requires, it means the Company, its subsidiaries, joint ventures and associated companies as a group or as members of such group.
2.91
3.98
Core EPS Inventory gain aftertax adjusted
Gain on bargainpurchase &
Impairments
Acquisition cost &Pre-oprative exp
DTL reversal &Others
Reported EPS
EPS 2017 (THB/share)
39
Reconciliation of Core earnings
Extraordinary income 0.84 THB
40
Net Debt Bridge 2017
2,722 2,722
Net debt as of2016
Core EBITDA Net workingcapital and
others
Growth &Investment
Capex
Net workingcapital on
acquired/soldAsset
MaintenanceCapex
Financial cost Income tax Dividend andPerp interest
Proceed fromissue of
ordinary sharesdue to warrants
exercised
Effect of foreignexchange
changes andothers
Net debt as of2017
Net Debt Bridge 2017 ($M)
Operating CF before tax $918M
Continue Shaping Our Industry Leadership Leading The Market With Quality, Innovation, Reliability
41 Note: Financials Excluding JVs
11 R&D Centers
564 Patents
$8.4 billion Revenue
15,039 Employees
A global presence in
25 countries
75 operating sites
in Asia in EMEA in North America
34 24 17
34%
HVA sales
IVL At A Glance - 2017
