Investor Presentation. June, 2017

Transcription

1 Investor Presentation June, 2017

2 Forward-Looking Statements In addition to historical information, this presentation contains "forward-looking" statements that reflect management's expectations for the future. The words anticipate, believe, expect, hope, have the intention of, might, plan, should and similar expressions generally indicate comments on expectations. The final results may be materially different from current expectations due to several factors, which include, but are not limited to, global and local changes in politics, the economy, business, competition, market and regulatory factors, cyclical trends in relevant sectors; as well as other factors that are highlighted under the title Risk Factors on the annual report submitted by Mexichem to the Mexican National Banking and Securities Commission (CNBV). The forward-looking statements included herein represent Mexichem s views as of the date of this press release. Mexichem undertakes no obligation to revise or update publicly any forward-looking statement for any reason unless required by law. Mexichem has implemented a Code of Ethics that rules its relationships with its employees, clients, suppliers and general groups. Mexichem s Code of Ethics is available for consulting in the following link: Additionally, according to the terms contained in the Securities Exchange Act No 42, Mexichem Audit Committee established a mechanism of contact, which allows that any person that knows the un-fulfilment of operational and accounting records guidelines and lack of internal controls of the Code of Ethics, from the Company itself or from the subsidiaries that this controls, file a complaint which is anonymously guaranteed. The whistleblower program is facilitated by a third party. The telephone number in Mexico is The website is: and contact is: mexichem@ethic-line.com. Mexichem s Audit Committee will be notified of all complaints for immediate investigation. 2

3 Mexichem s Growth Strategy Vertical Integration Focus on Specialty Products 3 Leveraging the Global Platform Mexichem s Growth Model Capital Allocation Strategy Bolt-On Acquisitions Investing in Innovation Mexichem Today Mexichem at a Glance Better PVC outlook Capital Cycle Debt Profile

4 Vertical Integration Ensuring Supply to Mitigate Volatility & Increase Cost Competitiveness Ethylene Chain Overview - One of the largest PVC resin and leading player in piping worldwide Salt Chlorine & Caustic Compounds PVC Resin VCM Ethane Ethylene Specialty Resin Fluent Mexichem products On-going joint ventures + VOLATILITY VERTICAL INTEGRATION THROUGHOUT THE VALUE CHAIN 4

5 Vertical Integration: Ethylene Ethylene is our Most Important Raw Material Ethylene Price Components December 2014 Ethane 27% Others 10% December 2016 Ethylene Margin 63% Polyethylene s Cost Structure PE Pipe Cost Structure Ethylene 81% PVC s Cost Structure PVC Pipe Cost Structure Ethylene 29% Others 19% Others 71% Ethane 32% Others 10% Ethylene Margin 45% PVC Resin Cost Structure Ethylene 39% Others 61% Ethylene Cracker (JV w/ OXY) = * 70% of the NA Vinyl Group s Ethylene Supply VCM Cost Structure Ethylene 49% Others 51% 5 Source: Company fillings, *Once Ethylene cracker is fully operational.

6 Vertical Integration: Ethylene Estimated PVC Global Supply Cost Curve 6 Source: Mexichem s Internal analysis. Each point of the curve represents a plant of global PVC production.

7 CAPACITY (Kmt) Building Mexichem s Specialty Products Portfolio Specialty PVC Resins Producers Worldwide (Kton) Vinnolit Mexichem Inovyn FCP LG Chem Tianjin Chem. Kem one Shenyang Blue Star Kaneka SCAC Source: IHS

8 Adding Specialty Products Across The Value Chain Vestolit Acquired in 2014, at the time was Europe s 6 th largest PVC manufacturer, based in Germany Consolidated under the Vinyl Business Group, added another set of high-end specialty products, most notably in High Impact Suspension PVC and PVC paste Expanded European footprint, entered new market and acquired new technologies and practices Dura-Line Acquired in 2014, a global leader in high-density polyethylene conduit, duct and pressure pipe solutions, consolidated under the Fluent Business Group Allows for expansion in Telecom, Datacom and Energy Piping markets Adds presence in India, South Africa and the Middle East Compounds, part of the Vinyl Business Group Nearly $500 million annual revenue Targeting opportunities in India and Southeast Asia 8

9 Driving Margin Growth Vs. Volume Growth Closer To Our End Consumers- Fluent LatAm Salt Ethane Chlorine & Caustic Ethylene VCM PVC Resin Compounds Specialty Fluent 9 9

10 Focus on higher margin products In 2016 we discontinued operations of pressure pipes and shifted that capacity to Datacom pipes Datacom pipes have higher margins than pressure pipes 10

11 Mexichem s Growth Model Our presence in 37 countries can be used as a platform for all our products Driving revenue growth Leveraging production facilities Enabling technology and process transfer Expanding our end markets and footprint with bolt-on acquisitions that create revenue & operating synergies Gravenhurst Plastics Ltd. October 2016 Vinyl Compounds Ltd. November

12 Capital Allocation Strategy Model Selection of the project might depend on the balance of all these categories: 12 Alignment Strategic rationale that fits to Mexichem & operations Potential Sales growth Replicate locally or globally Profitability Based on EBITDA margins Expansion in EBITDA margins after synergies ROIC in 3 years Capability Track record of operating or producing at high capacity Market Dynamics Porter s Five Forces Risks Country risk Additional risks to Mexichem

13 Bolt-on Acquisition for Fluent Business Group Gravenhurst Plastics Ltd to incorporate ~15 m sales in Fluent US/Canada Canadian manufacturer of high-grade polyethylene pipe products, tucks into Dura-Line brand Establishes local presence in Canadian market with high growth potential Provides a platform to expand all of Mexichem s businesses in that country Datacom products complement Mexichem Fluent s existing offering 13

14 Bolt-on Acquisition for Vinyl Business Group Vinyl Compounds Ltd to incorporate ~40 m sales in Compounds Business Unit U.K. leading supplier of PVC compounds Adds scale to Mexichem s UK operations Expands the portfolio of specialty products Provides additional vertical integration in the Compounds business unit Brings synergies to Vinyl Business group through Vinyl Compounds PVC resins and plasticizers Key drivers for the demand are related to: o Building & Construction o Consumer goods o Footwear 14

15 Investing in Innovation We have designed cutting edge products that adapt to our customers needs Reduce noise Wavin SiTech+ reduces noise levels more effectively than standard waste water discharge systems. Replace worn out pipes Wavin s Compact Pipe is optimal for replacing a worn out or defective pipe system without being too disruptive and/or expensive. We have installed over 1.5 million meters worldwide. 15

16 Investing in Innovation and Sustainability We have designed cutting edge products that are eco-friendly Solutions for rainwater management Infiltration and attenuation solutions give our clients maximum control over rainwater discharge. With these units they can create underground tanks quickly and easily. Heating and Cooling at lower costs Costumers can design heating and cooling systems as an integrated element of the concrete core of their building. This optimizes its thermal capacity. It s a highlysustainable approach, lowering the cost and use of energy. 16

17 Digital Strategy Four pillars aligned to Mexichem s business drivers Customer Engagement Operations Optimization Employee Empowerment Product & Service Transformation Growth and Profitability Drive existing growth and identify future regions of growth opportunities Vertical Integration Focused Leadership through collaboration and simplicity Increase Specialty Product Portfolio 17

18 Mexichem at a Glance Global Leader in Chemicals and Plastics Fluor Value Chain Ethylene Value Chain Fluor Fluorspar Hydrofluoric acid Refrigerants Aluminum fluoride Revenues: $582 mm EBITDA margin: 39.5% Joint Venture with Joint Venture with Vinyl PVC & Specialty resins Compounds & plasticizers Derivatives Revenues: $2,132 mm EBITDA margin: 13.7% Fluent Pipes and fittings Irrigation systems Datacom Revenues: $2,932 mm EBITDA margin: 14.4% 18 Note: Revenues and Adj EBITDA margin correspond to LTM1Q17; Figures before intercompany eliminations

19 Company Overview: Mexichem by the Numbers Major Transformation Over Last 5 Years From Chemicals To Pipes and End-Products 33% 33% 36% 37% 38% Sales 12% 11% 10% 11% 10% 55% 56% 53% 53% 52% Fluent Fluor Vinyl EBITDA 33% 26% 26% 31% 35% 34% 32% 27% 26% 25% 41% 43% 45% 45% 46% Fluent Fluor Vinyl Holding

20 Improving Outlook for PVC PVC is the third most popular plastic in the world and the largest sourced material in the Building & Construction market, followed by PE & PP Building & Construction 19.7% Packaging Automotive Electrical & Electronic Others 39.9% 8.9% 5.8% 25.7% 20 Source: Plastics - The facts 2016 by PlasticsEurope

21 000 MT Improving Outlook for PVC China s Share of Global Capacity is 40% 60,000 PVC Capacity 50,000 40,000 30,000 20,000 10, e Worldwide China Source: IHS 21

22 Improving Outlook for PVC 80% of PVC Capacity in China is Coal-Based 650 Thermal Coal Prices (RMB/ton) % increase YoY Source: Bloomberg 22

23 Improving Outlook for PVC Global Supply, Demand and Operating Rate 60,000 50,000 40,000 30,000 20,000 10, e 2018e 2019e 2020e 2021e Total Supply ( 000 MT) Total Demand ( 000 MT) Operating rate (%) 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Source: IHS 23

24 Million Metric Tons Improving Outlook for PVC There is limited additional global PVC capacity being built in the following 4 years PVC Global Capacity Expansions Inner Mongolia, USA Egypt Uzbekistan Philippines North America Northeast Asia ROW Hypothetical NAM Hypothetical Europe 24 Source: IHS

25 Ending a Capital Cycle (in USD terms) Capex

26 Manageable Debt Profile & Long-Term Maturity Profile Long-Term Debt Schedule US$MM, as of March 31, 2017 Bank debt Debt Securities 910 Investment Grade Fitch Ratings S&P Moody s BBB BBB- Baa Most Debt at HoldCo Level Debt by Division (1Q17) Alignment of Debt to Revenue Currency Debt by Currency (Swapped, 1Q17) Conservative Leverage Ratios Holding Vinyl Fluor Fluent 5% 3% 1% US$ Euro Others 8% 33% Total Debt / EBITDA Net Debt / EBITDA 2.7x 2.5x 2.4x 2.5x 2.3x 2.0x 1.9x 1.8x 1.8x 1.0x 60% Source: Company filings 91% US$1.5B revolving credit facility (100% available)

27 Focused leadership Through Collaboration A. Carrillo CEO >30 R.Guzmán CFO >30 P. Chari President, Fluent Business Group >35 A. Mugica President, Fluor Business Group >25 C. Manrique President, Vinyl Business Group >35 S. S. Bharadwaj President, Compounds Business Unit >20 A. Rodríguez Corporate VP, HR JL. Guzmán VP Corporate Internal Audit >20 >20 Pedro Martínez VP IT >18 >20 F.Hernández General Counsel >20 27 ~20 years of professional experience

28 28 Thank You

29 29 APPENDIX

30 Summary of 1Q17 Results Income Statement USD in thousands First Quarter INCOME STATEMENT % Net sales 1,394,993 1,258,323 11% Cost of sales 1,096, ,355 14% Gross profit 298, ,968 0% Operating expenses 175, ,046 0% Operating income 122, ,922 1% Financial cost 45,342 43,411 4% Equity in income of associated entity (488) (927) -47% Income from continuing operations before income tax 77,873 79,438-2% Cash tax 29,448 39,951-26% Deferred taxes (5,077) (18,375) -72% Income tax 24,371 21,576 13% Income from continuing operations 53,502 57,862-8% Discontinued operations (179) (398) -55% Consolidated net income 53,323 57,464-7% Minority stockholders 1,399 (279) N/A Net income 51,924 57,743-10% 30 EBITDA 207, ,815 3%

31 Summary of 1Q17 Results Balance Sheet USD in thousands Balance Sheet Mar 2017 Dec 2016 Total assets 8,519,430 8,354,015 Cash and temporary investments 597, ,607 Receivables 1,054, ,509 Inventories 662, ,389 Others current assets 440, ,698 Long term assets 5,764,565 5,793,812 Total liabilities 4,811,478 4,772,409 Current portion of long-term debt 62,382 57,693 Suppliers 1,391,788 1,269,704 Other current liabilities 590, ,600 Long-term debt 2,253,474 2,241,370 Other long-term liabilities 513, ,042 Consolidated shareholders'equity 3,707,952 3,581,606 Minority shareholders'equity 938, ,812 Majority shareholders'equity 2,768,977 2,677, Total liabilities & shareholders' equit 8,519,430 8,354,015

32 Summary of 1Q17 Results Operating Cash Flow Highlights First Quarter %Var. EBITDA % One time non-cash Items 0 0 Cash Tax % Net Interest % Bank Commissions % Monetary Position and Exchange Rate Losses 11-4 N/A Change in Trade Working Capital % Operating Cash Flow Before Capex % CAPEX (Organic) % CAPEX (Total JV) % CAPEX JV (OXY SHARE) % NET CAPEX JV % Total CAPEX (organic & JV) % Cash Flow % Dividends % 32 Free Cash Flow %

33 Operating Results by Business Group VINYL Business Group (42% and 43% of Mexichem s sales before eliminations and EBITDA, respectively, in 2017) First Quarter Vinyl %Var. Volume (K Tons) % Total Sales* % Operating Income % EBITDA % *Intercompany sales were $45 million and $40 million in 1Q17 and 1Q16, respectively. 33

34 Operating Results by Business Group VINYL Business Group (42% and 43% of Mexichem s sales before eliminations and EBITDA, respectively, in 2017) First Quarter Resins, Compounds & Derivatives %Var. Volume (K Tons) % Total Sales* % Operating Income % EBITDA % *Intercompany sales were $51 million and $49 million in the 1Q17 and 1Q16, respectively. Of these amounts $6 million and $9 million were invoiced to PMV in 1Q17 and 1Q16, respectively. First Quarter PMV %Var. Volume (K Tons) % Total Sales* % Operating Income % EBITDA % 34 *Intercompany sales invoiced to Resins, Compounds and Derivatives were $1.2 million and $23 million in 1Q17 and 1Q16, respectively.

35 Operating Results by Business Group FLUENT Business Group (49% and 38% of Mexichem s sales before eliminations and EBITDA, respectively, in 2017) First Quarter Fluent %Var. Sales % Fluent LatAm % Fluent Europe % Fluent US/Canada % Fluent AMEA % Intercompany Eliminations (8) (3) 138% Operating Income % EBITDA % 1Q16 1Q17 Sub17 Sub17/1Q16 In million dollars Revenues Revenues FX Total % Var Comp 248 Fluent LatAm % 293 Fluent Europe % 84 Fluent US/Canada % 40 Fluent AMEA % -3 Intercompany Eliminations % 662 Total % 35

36 Operating Results by Business Group FLUOR Business Group (10% and 24% of Mexichem s sales before eliminations and EBITDA, respectively, in 2017) First Quarter Fluor %Var. Sales % Operating Income % EBITDA % 36

37 Fourth Quarter January Fourth - Quarter December thousands USD in thousands 2016 w/o 2016 w/o ENT 2016 Write off INCOME STATEMENT 2015 % 2016 Write off Write Off Write Off 2015 % 2016 Write off 1,260,152 Net 1,260,152 sales 1,204,526 5% 1,260,152 5,349,807 1,260,152 5,349,807 1,204,526 5,612,392-5% 5,349,807 5,349,807 5, 1,001,124 Cost 1,001,124 of sales 914,193 10% 1,001,124 4,143,473 1,001,124 4,143,473 4,369, ,193 10% -5% 4,143,473 4,143,473 4, 259,028 - Gross 259,028 profit 290,333-11% 1,206, ,028-1,206, ,028 1,243, ,333-11% -3% 1,206,334-1,206,334 1,2 ses 107,451 19,613 Operating 127,064 expenses 175,398-28% 107, ,095 (42,218) 19, , , , ,272-28% -11% 692,095 (42,218) 649,877 e 151,577 (19,613) Operating 131,964 income114,935 15% 151, ,239 (19,613) 42, , , , ,826 15% 8% 514,239 42, , ,513 Financial 27,513 cost 60,400-54% 162,931 27, ,931 27, ,215 60,400-54% -34% 162, ,931 of associated entity 611 Equity in 611 income of associated (2,207) entity N/A (2,873) 611 (2,873) 611 (2,207) (3,080) -7% N/A (2,873) (2,873) tinuing operations x Summary of 2016 Results Income Statement January - December 2016 w/o Write Off Income from continuing operations 123,453 (19,613) 103,840 56,742 83% 123, ,181 (19,613) 42, , , ,691 56,742 83% 45% 354,181 42, ,399 2 before income tax 61,578 Cash tax 61,578 12, % 189,295 61, ,295 61, ,883 12, % 34% 189, ,295 (20,037) (5,884) Deferred (25,921) taxes (4,607) 463% (20,037) (67,374) (5,884) (237) (25,921) (67,611) (52,468) (4,607) 463% 29% (67,374) (237) (67,611) 41,541 (5,884) Income 35,657 tax 8, % 121,921 41,541 (5,884) (237) 121,684 35,657 88,415 8, % 38% 121,921 (237) 121,684 tinuing operations 81,912 (13,729) Income 68,183 from continuing 48,729operations 40% 232,260 81,912 (13,729) 42, ,715 68, ,276 48,729 40% 48% 232,260 42, ,715 1 rations (5,389) Discontinued (5,389) operations (54,147) -90% (10,780) (5,389) (10,780) (5,389) (54,147) (54,165) -90% -80% (10,780) (10,780) income 76,523 (13,729) Consolidated 62,794 net income (5,418) N/A 221,480 76,523 (13,729) 42, ,935 62, ,111 (5,418) 101% N/A 221,480 42, ,935 1 ders 11,207 (6,053) Minority 5,154 stockholders(3,206) N/A (16,919) 11,207 18,718 (6,053) 5,154 1,799 (3,206) (4,059) N/A (16,919) 18,718 1,799 65,316 (7,676) Net income 57,640 (2,212) N/A 238,399 65,316 23,737 (7,676) 262,136 57, ,170 (2,212) 94% N/A 238,399 23, , ,856 (19,613) EBITDA 227, ,643 7% 246, ,754 (19,613) 42, , , , ,421 7% 2% 883,754 42, ,

38 Summary of 2016 Results Balance Sheet USD in thousands Balance Sheet Dec 2016 Dec 2015 Total assets 8,806,002 8,669,676 Cash and temporary investments 713, ,274 Receivables 802, ,779 Inventories 606, ,984 Others current assets 437, ,816 Long term assets 6,245,799 6,417,823 Total liabilities 4,908,448 4,990,895 Current portion of long-term debt 57,693 43,653 Suppliers 1,269,704 1,201,021 Other current liabilities 657, ,887 Long-term debt 2,241,370 2,291,422 Other long-term liabilities 682, ,912 Consolidated shareholders'equity 3,897,554 3,678,781 Minority shareholders'equity 918, ,419 Majority shareholders'equity 2,979,107 2,902, Total liabilities & shareholders' equit 8,806,002 8,669,676

39 US Fluorspar Demand Supply Summary US Fluorspar Demand E US Fluorspar Supply E US Metspar Imports Metspar Acidspar % 10% Total Fluorspar Metspar: 100% used as a fluxer in the steel industry, particularly for stainless and specialty steels Acidspar: Aprox. 90% used for HF production (Honeywell, Chemours) and 10% for other applications The US does not produce Metspar and has some small Acidspar mines (Hastie) that have not been producing in the last few years, but are still in development Source: Roskill, IM,USGS, Trademap Internal Analysis 80% Mexichem Mexico (others) Mongolia/Others Metspar: Mexichem supplies 80% of total US consumption Acidspar: Mexichem supplies approx. 54% of the US consumption. Other sources are from Mexico (Musquiz), Vietnam, China 39

40 40 Closer to Our End Customers Housing Catalogue in Brazil: Salt Ethane Chlorine & Caustic Ethylene VCM PVC Resin Specialty Compounds Fluent WATER FLOW SOLUTIONS WATER STORAGE SOLUTIONS ACCESORIES GAS SOLUTIONS ELECTRIC SOLUTIONS 40

41 41 Closer to Our End Customers Infrastructure Catalogue in Brazil: Salt Ethane Chlorine & Caustic Ethylene VCM PVC Resin Specialty Compounds Fluent SEWAGE SYSTEM SOLUTIONS HYDRAULIC SOLUTIONS 41

42 Mexichem s Markets and Product Categories Business units Fluor Vinyl Markets Served Product Categories Aluminium Fluorspar Met Grade Refrigeration 6% Fluorspar Acid Grade Building and Construction 10% Hydrofluoric Acid 43% Anhydrite Chemicals Aluminum Fluoride 32% Refrigerants Technical propellants 9% Medical propellants Medicals Paints Industrial Medical Base Chemicals 1% 7% 4% Automotive Specialty Resins Wire and Cable 21% 3% 4% Home, lawn & garden PVC Resins Compounds PA & Plasticizers 60% Phosphates Building & Construction Other Chemicals Examples Fluent Energy Others 11% 8% Telecom 15% Agricultural 4% 21% 43% Infrastructure Housing Pipes & Fittings (PVC, Polyethylene, Polypropylene) Geosynthetics (woven & non-woven) Irrigation systems Datacom & Infrastructure 42 Source: Company fillings, Markets as % of revenues of 2016

43 Mexichem s Markets and Product Categories Salt Ethane Chlorine & Caustic Ethylene VCM PVC Resin Specialty Compounds Fluent Specific Markets: Sales by Distribution Channel Governmental LatAm Institutions 2% Other 4% End Users 4% Retail 27% Wholesalers 46% Retail 4% Building Contractors 12% Europe Governmental Institutions End Users 0% 2% Other 4% Wholesalers 78% Building Contractors 17% 43 Source: Company fillings, Information as of

44 Mexichem s EBITDA 2015 was highly affected by $202 million in comparison with 2011, due to FX and market conditions on Fluor (downstream), Brazil and Venezuela. $350 EBITDA 2011 vs 2015 ($m) $300 $250 $200 $150 $26 $70 - $202m Fluor Downstream Brazil $100 $196 $50 $- $3 $38 $ % from Mexichem EBITDA 35% 10% Venezuela Source: EBITDA as reported 2011 and 2015 figures 44

45 Jan-2010 Mar-2010 May-2010 Jul-2010 Sep-2010 Nov-2010 Jan-2011 Mar-2011 May-2011 Jul-2011 Sep-2011 Nov-2011 Jan-2012 Mar-2012 May-2012 Jul-2012 Sep-2012 Nov-2012 Jan-2013 Mar-2013 May-2013 Jul-2013 Sep-2013 Nov-2013 Jan-2014 Mar-2014 May-2014 Jul-2014 Sep-2014 Nov-2014 Jan-2015 Mar-2015 May-2015 Jul-2015 Sep-2015 Nov-2015 Vertical Integration tested in 4Q14 Prices of oil and ethylene falling rapidly USD/ ton 2,000 USD/ barrel 120 Salt Ethane Chlorine & Caustic Ethylene VCM PVC Resin Compounds Fluent Specialty 1, , Source: IHS (formerly CMAI) Ethylene-Spot USA (Left) PVC Export USA (Left) Crude Oil WTI (Right) Vinyl Business Group * EBITDA USD$MM 14% 10% 64 66% 5% ~30M USD Fluent Business Group * EBITDA USD$MM 59% 8% 66 4Q13 4Q14 4Q13 4Q14 * EBITDA without FX in 4Q14, and non recurrent effects of 4Q13 45

46 Jan-2010 Mar-2010 May-2010 Jul-2010 Sep-2010 Nov-2010 Jan-2011 Mar-2011 May-2011 Jul-2011 Sep-2011 Nov-2011 Jan-2012 Mar-2012 May-2012 Jul-2012 Sep-2012 Nov-2012 Jan-2013 Mar-2013 May-2013 Jul-2013 Sep-2013 Nov-2013 Jan-2014 Mar-2014 May-2014 Jul-2014 Sep-2014 Nov-2014 Jan-2015 Mar-2015 May-2015 Jul-2015 Sep-2015 Nov-2015 Margin Expansions in 4Q15 Prices of oil, ethylene and PVC resins USD/ ton 2,000 USD/ barrel 120 Salt Ethane Chlorine & Caustic Ethylene VCM PVC Resin Compounds Fluent Specialty 1, , Ethylene-Spot USA (Left) PVC Export USA (Left) Crude Oil WTI (Right) Vinyl Business Group Source: IHS (formerly CMAI) Positive performance on PMV + Resins, compounds & derivatives EBITDA USD$MM 244% 5% 15% Fluent Business Group Amid FX fluctuations, EBITDA margin expansions EBITDA USD$MM 12% 100 8% 66 26% Q14 4Q15 0 4Q14 4Q15 46

47 Ethylene Prices Worldwide Monthly World Ethylene Price US$ per Metric Ton Last Update Date -15/05/2017 USD/ ton 1,400 Forecast 1,200 1, Source: IHS 47 Ethylene, Contract-Net Transaction Pipeline, Delivered US Gulf Coast Ethylene, Spot, Average, CFR SE Asia Ethylene, Contract-Market Pipeline, Delivered W. Europe Ethylene, Spot Pipeline, Average, Delivered US Gulf Coast

48 Vertical Integration: Fluor Chain Sulphuric Acid 40% Sold to Market 100% Sold to Market HF Refrigerant Gases Fluorspar 60% Sold to Market Aluminum Fluoride 100% Sold to Market Strategy: Downstream integration to higher value added products + VOLATILITY VERTICAL INTEGRATION THROUGHOUT THE VALUE CHAIN Source: Company filings 48