3 rd Quarter 2018 Financial Results

Transcription

1 3 rd Quarter 2018 Financial Results Milestone Revenues and Earnings, Structural Improvements, Enhanced Portfolio and Geographic Reach November 8, 2018

2 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. 2

3 3Q 2018 Financial Results 3

4 3Q 2018 Summary Revenue $10.1 billion, +24%, Core EBITDA margin 13.7% Core EBITDA of $409m in, +40% ; $1,379m, +45% Core EPS THB 4.49, +65% post 11.1% dilution from warrants exercise Operating Cash Flow of $1,037 million Net Operating D/E ratio 0.53x; Rating Upgrade to AA- with Stable Outlook 2019 Guidance reaffirmed; attractive and accretive production pipeline into

5 3Q 2018 Financial Highlights Total Production 2.7MMt +14% Core EBITDA $409M +40% Core Net Profit $260M +89% Net Operating Core ROCE 16.9% +110 BPS Net Operating Debt to Equity 0.53x -7% 5

6 3Q 2018 Reported Financial Highlights Total Production 9.9MMt +9% Core EBITDA $1,379M +45% Core Net Profit $786M +89% Net Operating Core ROCE 14.0% +160 BPS Core EPS per +65% diluted share THB

7 3Q 2018 Results IVL Core EBITDA ($M) Core EPS 1 (THB) 409 1, IVL continued its strong performance, with with growth in production and earnings including new geographies Core EBITDA increased driven by structural improvement in the commodity cycle and strong demand across geographies +40% +45% +72% +65% Core EBITDA per ton driven by continued momentum across diversified and integrated PET portfolio while HVA business lagging improvement Core ROCE (%) 16.9% 15.8% 14.0% 12.4% Core EBITDA ($/t) Core EBITDA Margin 14.0% 13.4% 13.7% 11.7% Note: 1. After PERP Interest 7 Core ROCE not fully reflective of strong underlying performance

8 3Q 2018 Results West Necessities West Necessities Core EBITDA ($M) % +60% margin/ cost/mix +17% volume % +76% margin/ cost/mix +11% volume West PET business delivers strong growth in production and earnings, supported by sustained PET margins and full quarter impact of Brazil West Feedstock business benefits from strong EG and integrated PTA margins in North America, contribution from Rotterdam and Portugal PTA Core EBITDA ($/t) Core EBITDA Margin 14.4% 12.0% 14.4% 9.6% The plants in Brazil, Egypt and Portugal are successfully ramping up and are expected to contribute fully in the quarters to come Note: West Necessities include West PET and West Feedstock 8

9 3Q 2018 Results East Necessities East Necessities Core EBITDA ($M) Asia PET business delivers strong performance, supported by recovery in premium over industry and high utilization rates +242% +236% margin /cost/mix +6% volume % +141% margin/ cost/mix +5% volume 87 Significant recovery in Asia PTA earnings driven by tight demand/supply situation, resulting in higher margin environment Core EBITDA ($/t) Core EBITDA Margin 14.5% 5.3% 10.8% 5.3% Asia Necessities Fibers business delivers improved performance, supported by improved commodity cycle Note: East Necessities include Asia PET, Asia PTA and Asia Necessities Fibers 9

10 3Q 2018 Results - HVA Core HVA EBITDA ($M) % -32% margin /cost/mix +19% volume % -10% margin/ cost/mix +12% volume HVA portfolio has further been strengthen with strategic acquisition in the Automotive and Hygiene segments Fibers HVA business impacted from raw material price lag, which is expected to be recovered in following quarters Core EBITDA ($/t) Core EBITDA Margin 13.4% 19.2% 14.4% 17.5% Feedstock HVA business supported by strong PEO margins, increase in IPA volumes, offsetting normalized IPA spreads Note: HVA includes Fibers HVA, Feedstock HVA, PET HVA 10

11 IVL is Well-Positioned to Deliver Value Structural Change with Strong Industry Momentum Enhanced Portfolio and Geographic Reach Strategic Investments Sustainable Development Stronger Balance Sheet with Prudent Growth 11

12 1Q15A 2Q15A 3Q15A 4Q15A 1Q16A 2Q16A 3Q16A 4Q16A 1Q17A 2Q17A A 4Q17A 1Q18A 2Q18A A Structural Changes in Industry IVL vs Industry Spreads based on IVL Necessities production $/MT 300 Asia PTA West PTA US EG Asia PET West PET IVL Spread Industry fundamentals continue to be positive In 2019, we expect raw material supply and price to normalize from the existing high levels due to weaker crude oil environment and ample paraxylene and MEG supply additions 50 0 Improvement in West PTA and PET contract margin is expected and shall offset normalizing spot PET margins achieved in 2018 IVL is well positioned for 2019 due to enhanced asset portfolio across the value chain and addition of HVA businesses Source: IVL Investor Factsheet, IVL Analysis 12

13 Sustaining Growth Momentum Across Portfolio Core EBITDA ($M) 1, By Segment By Region By Portfolio +45% Feedstock Fibers PET 1, % Asia EMEA Americas 1, % East Necessities West Necessities HVA IVL strategy to drive sustainable and profitable growth of both high-volume necessities and high-margin HVA business continues Global scale of polyester value chain and HVA platform has been enhanced by recent acquisitions With 90 manufacturing sites across 30 countries and more than 90% in domestic sales, IVL is strongly suited for today s macro environment to benefit from the trade tensions IVL is well positioned for 2019 due to enhanced asset portfolio across the value chain and addition of HVA businesses Note: Total of all segments and portfolio may not match to IVL due to holding 13

14 Realizing the Power of Global Business Model 9.9MMt $1.4B 9.1MMt $1.0B Production (MMt) % 25% 34% 21% Asia Core EBITDA($m) Core EBITDA/t % 28% 28% 33% 37% 46% 38% 47% EMEA Production (MMt) Core EBITDA($m) Production Core EBITDA Production Core EBITDA Core EBITDA/t Americas EMEA Asia Americas EMEA Asia Core EBITDA/t Core EBITDA Margin 13.7% 11.7% Core ROCE 14.0% 12.4% Americas Production (MMt) Core EBITDA($m) Core EBITDA/t Strong improvement in Americas and Asia; EMEA impacted due to transition year of Artlant PTA and Egypt PET 14

15 Consistent Delivery on Our Growth Plan Acquisition of Glanzstoff (0.03MMt) Acquisition of remaining interest in Trevira Completion of Rotterdam PTA expansion (0.3 MMt) Acquisition of Durafiber (0.06 MMt) Acquisition of Portugal PTA (0.7 MMt) First full year impact of BP Decatur and Cepsa Spain Debottlenecking projects Performance Fibers expansion in China (0.03 MMt) Increased IPA production Contribution from Portugal PTA Transition year for Glanzstoff and Durafiber Transition year of Rotterdam PTA expansion Start-up of Brazil and Egypt PET (1.1 MMt) Transition year for Sorepla Commissioning of US Gas Cracker (0.44 MMt) Debottlenecking projects First full year earnings impact of Glanzstoff, Durafiber, Avgol, Kordarna (0.4 MMt) Necessities Fibers expansion in Indonesia (0.1 MMt) Full year production from cracker First full year impact of Portugal PTA JV consolidation of PTA Indonesia (0.5 MMt) Further increase in IPA production Full year impact from Brazil, Egypt and India PET JV Consolidation First full year financial impact from Performance Fibers expansion in China First full year impact from Schoeller First full year impact of M&G Fibras Enhancing Value with Existing Portfolio and Ongoing Projects Completed 1. IVL share of capacity Note: Numbers in parenthesis represent capacity 15

16 Sustainable Development Key to Our Resilience Commitment Innovation Delivery Further increase its use of post-consumer PET and polyester waste materials as feedstock JV with Loop Industries to manufacture and commercialize sustainable polyester resin Reaffirmed its position in the DJSI Index Loop 16

17 Stronger Balance Sheet with Prudent Growth $M Times 2, , ,476 1,500 1, ,052 1, Enhanced business and financial profile Stronger visibility of operating cash flows enabling value accretive growth Successful warrants exercise helps reduce leverage providing significant room for investment Growth CAPEX Net Operating Debt/Equity(x) Maintenance CAPEX Net Operating Debt/EBITDA(x) Credit Rating AA- by TRIS Thailand 17

18 More to Come % Core EBITDA growth driven by structural shifts in our industry $1,037m Operating Cash Flow, strengthening balance sheet and enabling value accretive capex Solid 9M18 Performance provides confidence in the resilience of our business model 2019 Guidance Reaffirmed on strong visibility of earnings and cash flows while industry fundamentals remain favorable 18

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20 9M 2018 Financial Highlights Total Production 7.6MMt +12% Core EBITDA $1,124M +50% Core Net Profit $669M +96% Net Operating Core ROCE 15.5% +230 BPS Net Operating Debt to Equity 0.53x -7% 20