Corporate Presentation

Transcription

1 Corporate Presentation 1Q18

2 This presentation contains, or may be deemed to contain, forwardlooking statements. By their nature, forward looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The future results of Alpek, S.A.B. de C.V. And its subsidiaries may differ from the results expressed in, or implied by the forward-looking statements set out herein, possibly to a material degree. 23.0

3 Index Business Overview Consolidated Financials Appendix 3

4 Index Business Overview Consolidated Financials Appendix 4

5 Investment Highlights 1 Market-leading position in the Americas 2 Attractive consumer-oriented product portfolio 3 High-return integration and cost-saving projects 4 Low cost producer with leading technology 5 Experienced management team 6 Strong free cash flow and financial performance 5

6 Alpek is a leading petrochemical company focused on Polyester chain products, mainly PTA and PET Revenues 1 : US$ 5.5 Billion EBITDA 1 : US$ 407 Million (US$ 520 Million ex- M&G A/R impairment) Polyester (72% of sales) Plastics & Chemicals (28% of Sales) PTA / PET Polyester Fibers Polypropylene Expandable Polystyrene Caprolactam & Fertilizers Others Alpek Polyester 2 Indelpro 3 Styropek Unimor Polioles 4 Source: Alpek estimates (1) LTM Mar 2018 (2) 6.65% of the subsidiaries Akra Polyester, S.A. de C.V. and 8.55% Tereftalatos Mexicanos, S.A. de C.V., are owned by BP Amoco Chemical Co. (3) 49% is owned by Lyondell Basell Industries Holdings B.V. (4) 50% minus one share is owned by BASF de Mexico S.A. de C.V. 6

7 Polyester Chain Polyester Crude Oil Gasoline 4 PET Reformer Paraxylene 3 PTA 4 Fibers 5 Naphtha Ethane Cracker Ethylene 1 Ethylene Oxide 2 MEG 1) 0.84 ton Ethylene per ton Ethylene Oxide 2) 0.72 ton Ethylene Oxide per ton MEG 3) 0.66 ton Paraxylene per ton PTA 4) 0.85 ton PTA per ton PET 5) 0.35 ton MEG per ton PET Source: Alpek 7

8 Alpek s products are widely used for food packaging and consumer end-markets Consumer Goods 25% Volume by Industry 2017 (4,012 Kta) Textiles 7% Construction 2% Food and Beverages 66% Sales Geography 2017 (US$ 5,231 Million ) Canada 3% Europe 3% LatAm 13% Asia and Others 1% USA 44% Mexico 35% Sample End Users by Industry Beverage Food Personal care Textiles Source: Alpek estimates Kta: Thousand tons per year 8

9 Alpek is the leading integrated polyester producer in North America (PTA-PET) North America 2017 Installed Capacity PTA (5,550 kta) PET (4,391 kta) 5% Eastman 6% 10% NanYa FENC 1 BP 25% 41% M&G 13% 42% Indorama 30% Indorama 29% 1) Far Eastern ( FENC ) acquired Apple Grove assets from M&G on January 30 th 2018 Source: PCI and Alpek estimates 9

10 Alpek s installed capacity amounts to 7.0 M tons; 26 production facilities and ~5,900 employees Location of Production Sites Installed Capacity Breakdown (Kta) Site PTA PET rpet Fibers PP EPS CPL Other A Monterrey 160 A B DC FE J I G H K R P Q N L M O S Mexico (3,030 Kta) USA (2,358 Kta) B Altamira 1, C Salamanca 85 D Ocotlán 10 E Cosoleacaque F Lerma 100 G Cedar Creek H Cooper River I Columbia J Pearl River 430 Canada K Selenis 144 Argentina (225 kta) Brazil (1,226 kta) Chile (27 Kta) L Zárate 190 M Pacheco 16 N Lagos 19 O Guaratingueta 46 S Ipojuca P Santiago 5 Q Puerto Montt 2 R Concon 20 Total Capacity 1 : 7,010 Kta 2,890 2, Source: Alpek estimates Kta: Thousand tons per year (1) Includes industrial and specialty chemicals and recycled PET capacities 10

11 Plastics & Chemicals Polyester Alpek has developed a leading position in every product of its portfolio Alpek: Industry Position Industry Position Comments PTA #1 in North America 41% est. installed capacity share in North America PET #1 in North America #2 Worldwide 42% est. installed capacity share in North America Fibers #2 in North America 1 Leading supplier of filament for car seatbelts 31% est. installed capacity share (excl. filament) PP Only producer in Mexico Attractive growth potential EPS #1 in the Americas Largest plant in the Americas 46% est. installed capacity share 2 CPL Only producer in Mexico Among top 3 lowest cost producers worldwide Source: PCI and Alpek estimates (1) Staple fiber (2) In the Americas, including recent EPS acquisition 11

12 Alpek has invested in attractive organic projects to enhance profitability Strategic Guidelines Project Overview Estimated figures and dates Project Capex (US$M) EBITDA (US$M) Start-up Capture natural gas, ethane and propane advantage in North America Maximize operating efficiency Selective capacity expansion Lever IntegRex technology 1. Cosoleacaque Cogeneration Q14 2. MEG Tolling Agreement Q16 3. Propylene Spheres (2) Q17 4. EPS Expansion Altamira Q17 5. Altamira Cogeneration PTA/PET Site (Corpus Christi) 1 TBD TBD TBD Total ~ $580 ~$160 US $537 M invested up to Mar-18 Source: PCI and Alpek estimates (1) JV among Alpek, Indorama and FENC presented winning bid to acquire Corpus Christi project; transaction subject to approval by governmental authorities 12

13 Alpek also holds a successful M&A track record and is constantly evaluating potential targets M&A Guidelines M&A Deals ( ) Product Capacity Year Country Investment Attractive Market Potential 1. Eastman PTA / PET 1.3 Mtons 2011 USA US $622 M 2. Wellman PET 430 ktons 2011 USA US $123 M 3. Cabelma rpet 16 ktons 2014 Argentina Undisclosed Cost Competitiveness Alpek M&A Existing/Related Business 4. BASF EPS EPS 230 ktons 2015 The Americas Undisclosed 5. BASF (Concon) EPS 20 Ktons 2016 Chile Undisclosed 6. Selenis PET 144 ktons 2016 Canada Undisclosed PTA 640 ktons 7. Petroquimica Suape PET 450 Ktons 2018 Brazil US $435 M Fibers 90 ktons 13

14 (US$ Million) (US$ Million) (Ktons) (US$ Million) Guidance 2018 Sales Volume Revenues +3% 3,931 3,937 3,938 4,012 4,135 6,471 5,284 4,838 5,231 +3% 5, G G EBITDA CAPEX % % 167 % Sales 6.7% 11.9% 13.8% 7.3% 10.5% G G Source: Alpek estimates 14

15 EBITDA: 2017 vs 2018 Guidance Alpek: EBITDA (M dls) US$M G Polyester Plastics & Chemicals Comparable Inventory gain 22 - M&G A/R Provision (113) - Reported M&G A/R Polyester P&Ch Inv. Gain 2018G Provision (2017) 15

16 EBITDA: 1Q18 vs 1Q18 Guidance Alpek: EBITDA (M dls) +42 US$M 1Q18 1Q18G Polyester Plastics & Chemicals Comparable Inventory Gain & Others Reported Q18G Polyester P&Ch Inv. Gain & Others 1Q18 (1) Inventory gain +16 M dls, Legal fees -5 M dls 16

17 Relevant events Progress and status (1Q18) M&G s Restructure Process JV (Alpek / Indorama / FENC) presented winning bid for Corpus Christi project; subject to governmental approval Normalized M&G Mexico operations in 1Q18 (supported by Alpek) M&G Brazil to be acquired by Indorama Sale of Cosoleacaque and Altamira power cogeneration plants Ongoing process to finalize cogeneration power plants sale in Mexico Longer-than-expected implementation of regulatory changes in power tariffs weighed on timing Petroquímica Suape and Citepe (PQS) acquisition in Brazil Completed April 30, 2018 Purchase price: US$435 million PET antidumping cases in U.S.A. and Canada USA: affirmative preliminary determinations; duties range from 8% to 227% Canada: negative C.I.T.T. ruling appealed in 2Q18 17

18 Index Business Overview Consolidated Financials Appendix 18

19 (Kta) (US$ Million) Sales Volume and Revenues Sales Volume Revenues +1% +5% 3,937 23% 3,938 24% 4,012 23% 4,041 22% 5,284 4,838 5,231 27% 29% 29% 5,470 28% 77% 76% 77% 78% 73% 71% 71% 72% Polyester Plastics & Chemicals (1) March 2018 LTM Source: Alpek estimates 19

20 (US$ Million) (US$ Million) (US$ Million) (US$ Million) Income Statement Accounts Operating Income (Loss) EBITDA Ex-M&G Ex-M&G Reported % Sales 9.1% 11.0% -3.6% % Reported % Sales 11.9% % 7.3% % Financial Cost, Net (2) Majority Net Income (Loss) Reported Ex-M&G Ex-M&G Reported % Sales 3.3% 4.1% 6.1% -5.9% -167 Source: Alpek estimates (1) March 2018 LTM (2) Financial Cost, Net = Net Financial Expenses + Fx Gains (Losses) + Interest Rate Swaps + Gas & Comm. Derivatives

21 (US$ Million) (US$ Million) (US$ Million) (US$ Million) Balance Sheet Accounts Net Working Capital (1) Property, Plant and Equipment ,820 1,955 2,105 2, NWC Days Net Debt (3) Stockholders Equity 1,042 1,262 1,270 2,005 2,019 1,604 1, Source: Alpek estimates (1) Net Working Capital = Accounts receivable + Other accounts receivable + Inventories - Suppliers - Other accounts payable and accrued expenses (2) March 2018 (3) Net Debt = Bank loans and notes payable + Current portion of long term debt + Long term debt Cash 21

22 (US$ / Ton) (US$ Million) (Times) (Times) Financial Ratios and Other Indicators Net Debt / EBITDA Interest Coverage (1) Reported Ex-M&G Ex-M&G Reported EBITDA / Ton CAPEX Ex-M&G Reported Source: Alpek estimates (1) Interest coverage= EBITDA / Net financial expenses (2) LTM March

23 Alpek Consolidated Debt Profile - March 31, 2018 Net Debt: U.S. $1,270 million / Gross Debt: U.S. $1,709 million Available Committed Credit Lines: U.S. $899 million (Total: U.S. $1.140 billion) 99% of our debt is denominated in US dollars (1) Cash (1) A small portion of debt is denominated in ARS 23

24 (US$ Million) Dividends paid to shareholders (1) (1) Paid in December

25 Index Business Overview Consolidated Financials Appendix 25

26 Operating & Financial Highlights (1Q18) Alpek 1Q18 Consolidated EBITDA of U.S. $181 million, including a U.S. $16 million non-cash inventory gain and U.S. $5 million non-recurring legal fees/expenses Process to finalize cogeneration power plant sale in Mexico is ongoing Signed 3-year credit of up to U.S. $710 million with 18-month availability period JV among Alpek, Indorama and Far Eastern to acquire Corpus Christi project from M&G USA Polyester Normalized M&G Mexico operations in 1Q18 Engaged in the confirmation of final conditions required to close PetroquímicaSuape and Citepe acquisition Plastics & Chemicals (P&C) 1Q18 P&C EBITDA of U.S. $69 million, including a U.S. $1 million non-cash inventory gain P&C results benefited from a spike in polypropylene (PP) reference prices amid tight supply caused mainly by U.S. propylene plant outages and startup delays 26

27 Latest Quarter Results Alpek: Selected Financial Information (%) 1Q18 vs. 1Q18 4Q17 1Q17 4Q17 1Q17 Total Volume (ktons) 1, Polyester Plastics & Chemicals Consolidated Revenues 1,532 1,321 1, Polyester 1, Plastics & Chemicals Consolidated EBITDA Polyester Plastics & Chemicals (2) Profit Attributable to Controlling Interest 82 (30) (5) CAPEX and Acquisitions (26) Net Debt 1,270 1,262 1, Net Debt/LTM EBITDA (1) Interest Coverage (1) Source: Alpek (1) Times: Last 12 months. 27

28 (US$ Million) (US$ Million) (Ktons) (US$ Million) Latest Quarter Results Sales Volume Revenues 986 1,016 1, , ,532 1,293 1,306 1,312 1,321 1,237 1,236 1,183 Ch.% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 3.0% 5.8% 1.4% 0.5% Ch.% 18.5% 5.5% 6.1% 11.7% EBITDA Majority Net Income Ch.% Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 14.5% -60.5% -97.9% 5.5% Ch.% -5.4% -48.5% % % Source: Alpek ex-m&g 28

29 Latest Quarter Results Alpek: Cash Flow (%) 1Q18 vs. 1Q18 4Q17 1Q17 4Q17 1Q17 EBITDA Net Working Capital & Others (85) (37) (64) (127) (31) Capital Expenditures & Acq. (56) (30) (76) (87) 26 Financial Expenses (22) (22) (16) (1) (39) Income tax (7) (9) (27) Dividends - (7) (88) Payment affiliated companies Other Sources / Uses (18) (105) (20) Decrease (Increase) in Net Debt (7) (70) (134) Alpek: Net Income (%) 1Q18 vs. 1Q18 4Q17 1Q17 4Q17 1Q17 Consolidated Net Income 103 (20) (3) Non-Controlling Interest Controlling Interest 82 (30) (5) Earnings per Share (U.S. Dollars) 0.04 (0.01) (5) Avg. Outstanding Shares (Millions)* 2,117 2,117 2,117 Source: Alpek 29

30 Comparable EBITDA and 2018 Guidance (ex-m&g) Reported EBITDA G 1Q17 1Q18 1Q18G Polyester Plastics & Chemicals TOTAL Adjustments* G 1Q17 1Q18 1Q18G Polyester 35 (18) 87 - (19) (10) - Plastics & Chemicals (11) (14) (8) - (8) (1) - TOTAL 24 (32) 79 - (26) (10) 1 - *Adjustments: Inventory and non-operating, one-time (gains) losses Comparable EBITDA G 1Q17 1Q18 1Q18G Polyester Plastics & Chemicals TOTAL (1) Inventory gain +16 M dls, Legal fees -5 M dls 30

31 EBITDA vs. Guidance (2017) Alpek EBITDA vs Guidance 502 US$M G Polyester Plastics & Chemicals US -$5 M Comparable Inventory gain 22 - M&G A/R Impairment (113) - Reported G M&G A/R 2017 Impairment Ex-M&G M&G Secondary feedstocks (IPA) PP Others Inv. Gain

32 Alpek acquired Petroquímica Suape and Citepe in Brazil Alpek Polyester plants Petroquímica Suape and Citepe Montreal. Canada Columbia. USA Fayetteville. USA Bay St. Louis. USA Charleston. USA Monterrey. México Altamira. México Cosoleacaque. México Capacity (Ktons): 640 PTA, 450 PET, 90 Filament Location: Ipojuca, Pernambuco, Brazil Highlights: Only integrated PTA-PET plant in South America Only PTA producer in South America 1 of 3 PET plants in South America Brazil is largest polyester export mkt for Alpek Ipojuca, Brazil Polyester Plants (4,663 Kta) Petroquímica Suape / Citepe Site Zárate. Argentina Pacheco. Argentina 32

33 JV formed to acquire, complete and operate the Corpus Christi project Highlights - Corpus Christi Polymers LLC (CC Polymers) Contributions as of 1Q18 (US$ Millions) Newly formed JV between Alpek, Indorama and Far Eastern (FENC) 1,169 Winning bid for Corpus Christi assets (Total value: U.S. $1.169 billion) Cash Alpek Subject to regulatory approval Does not include cost to complete (amount TBD) 390 Indorama JV will operate as toll manufacturer for Alpek, Indorama and Far Eastern 390 FENC Each partner will: Independently procure its raw materials Pay at cost 1/3 of the PTA and PET produced Cash Other non-cash contributions Total Value Independently sell and distribute their PTA and PET 33

34 CC Polymers capacity share per partner Corpus Christi Plant (CC Polymers) PTA 1.3 M tons PET 1.1 M tons Raw materials PET (Int.): 367 Kta PTA: 125 Kta Raw materials PET (Int.): 367 Kta PTA: 125 Kta Raw materials PET (Int.): 367 Kta PTA: 125 Kta FAR EASTERN GROUP 34

35 Alpek has effectively transformed its EPS business Alpek: EPS capacity Expandable Polystyrene (EPS) The Americas installed EPS capacity 2017 Total: 600 ktons Kta Others % 42% Alpek (Styropek) 165 Nexkemia 7% 14% Nova 15% Flint Hills 2014 Acquisition from BASF (MX/US/SA) 2015 Concon Plant (Chile) Altamira Expansion (Mexico)

36 Alpek acquired a controlling interest in Selenis Canada Inc. Alpek Polyester plants Selenis Canada Inc. Monterrey. México Cosoleacaque. México Columbia. USA Bay St. Louis. USA Altamira. México Fayetteville. USA Charleston. USA Montreal. Canada Capacity: 144 Ktons (PET) Location: Montreal, Canada Highlights: Only PET plant in Canada Alpek to capture PTA integration synergies Complement product portfolio with differentiated PET products Polyester Plants (4,519 Kta) Selenis Plant (144 Kta) Zárate. Argentina Pacheco. Argentina 36

37 U.S.A. PET antidumping case (2016) Case Calendar Final Rates March 15: Department of Commerce (DOC) and International Trade Commission (ITC) filing March 16: DOC issued affirmative FINAL Antidumping Duty and Countervailing Duty determinations April 16: ITC issued affirmative FINAL determinations Countervailing Antidumping Canada N/A 14 % China % % India % 8 19 % Oman 0 % 8 % Rates applicable for a minimum period of five years. Trade orders could be renewed in five-year increments (1) 154% only for JBF Industries Limited 37

38 U.S.A. PET antidumping case (2017) Case Calendar Preliminary Rates September 17: Petitions filed 4Q17: Investigation initiated by Department of Commerce ( DOC ) and International Trade Commission ( ITC ) April 18: Affirmative preliminary determinations 3Q18E: Final determinations Antidumping Brazil % Indonesia 13 % South Korea % Pakistan 8 % Taiwan 9 12 % 38

39 Canada PET antidumping case (2017) Canada Canada Border Services Agency ( CBSA ) imposed preliminary duties in 4Q 17 (22%-77%) Canadian International Trade Tribunal ( CITT ) ruled no injury or threat of injury from imports CITT ruling appealed (2Q18) Countries under investigation China India Oman Pakistan 39

40 Polyester Chain PTA, PET, and Polyester Fibers Revenues 2018 LTM US$ 3,917 Million EBITDA 2018 LTM US$ 171 Million Employees: ~4,300 Information Products (Capacity): PTA (2,890 Kta) PET (2,464 Kta) rpet (89 Kta) Fibers (400 Kta) Raw Materials: Paraxylene (Px) Monoethyleneglycol (MEG) Acetic Acid and Isopthalic Acid (IPA) End Markets: Food and beverage Textile Consumer Goods Monterrey, N.L. Headquarters Polyester Filament Altamira, Tamps. PTA Columbia, SC PTA & PET Cosoleacaque, Ver. PTA & PET Cedar Creek, NC PET, R-PET Selenis, Quebec. PET Cooper River, SC PET & PSF Pearl River, MI PET Ipojuca, Brazil PTA, PET and Fibers Zárate, Arg. PET Pacheco, Arg. PET Source: Alpek 40

41 Plastics & Chemicals PP, EPS, CPL and Others Revenues 2018 LTM US$ 1,553 Million EBITDA 2018 LTM US$ 236 Million Altamira, Tamps. PP, EPS Employees: ~1,600 Information Products (Capacity): Polypropylene - PP (640 Kta) Expandable Polystyrene - EPS (325 Kta) Caprolactam - CPL (85 Kta) Other (117 Kta) Raw Materials: Propylene, Styrene, Cyclohexane, Ammonia, Sulphur, Pentane, Ethylene Oxide, Propylene Oxide and Others End Markets: Consumer Goods Food and Beverage Construction Monterrey, N.L. Headquarters, Ocotlán, Jal. Nylon 6 Salamanca, Gto. CPL and Fertilizers Lerma, Edo. De Mex. Specialty Chemicals Concon, Chile EPS Santiago, Chile Other Puerto Montt, Chile Other Lagos, Argentina EPS Guaratingueta, Brazil EPS Source: Alpek 41

42 Plastics & Chemicals Plastics & Chemicals Polyester Polyester Alpek is managed by an experienced team focused on delivering value to shareholders Name Position Years with Alpek / Alfa José de Jesús Valdez Simancas CEO 42 Vacant CFO Felipe Garza Medina Co-President, Alpek Polyester 41 Jorge Young Cerecedo Co-President, Alpek Polyester 28 Gustavo Talancón Gómez President, Polyester Filaments 29 Alejandro Llovera Zambrano President, Polypropylene 33 José Luis Zepeda Peña President, EPS and Chemicals 32 Gustavo Talancón Gómez President, CPL and Ammonium Sulfate 29 Source: Alpek 42

43 Organization Chart José de Jesús Valdez CEO Vacant CFO Polyester Chain Plastics & Chemicals Felipe Garza Co-President Alpek Polyester Jorge Young Co-President Alpek Polyester Gustavo Talancón President, Polyester Filaments Alejandro Llovera President, Polypropylene José Luis Zepeda President, EPS and Chemicals Gustavo Talancón President, CPL and Ammonium Sulfate Source: Alpek 43

44 Polypropylene Chain Refinery 1 Propylene Polypropylene Cracker Source: Alpek 1) 1.02 ton Propylene per ton PP 44

45 EPS & CPL Chain Refinery Crude Oil Gasoline 3 Ammonia Cyclohexane 5 4 Caprolactam (CPL) Reformer Benzene 2 Styrene 6 EPS Cracker Ethylene 1 Source: Alpek 1) 0.29 ton Ethylene per ton Styrene 2) 0.79 ton Benzene per ton Styrene 3) 0.94 ton Benzene* per ton Cyclohexane 4) 1.04 ton Cyclohexane per ton CPL 5) 0.90 ton Ammonia pero ton CPL 6) 1.00 ton Styrene per ton EPS * dls/gal x = dls/ton 45

46 Alpek has been a reliable partner to other global industry leaders through successful joint ventures Alpek: Sample Joint Ventures 51.0% 50.0% + 1 Share + + World leader in PP production with sales in more than 100 countries Largest petrochemical company in the world with more than 370 sites Source: Alpek 46

47 Alpek has grown at a 7.4% annualized rate since 1986 through M&A, JVs and organic projects Sales Volume (Index: 1986=100) Selenis/ Concon Acquisition PTA/PET acquisitions (USA) EPS acquisition Acquisition of polyester business (USA) EPS expansion in Altamira Polypropylene expansion Clear Path Recycling IPO (BMV) CabelmaPET Coso Cogen Acquisition of Univex (Caprolactam) DMT Expansion Acquisition of PTA plant Polypropylene plant start-up Cogeneration project EPS Expansion Propylene splitter installation Acquisition of Argentina and Mexico PET plants Fuente: Alpek 47

48 Organic growth and acquisitions position Alpek as a leading PTA and PET producer in North America 2004 (5,500 Kta) PTA Installed Capacity (1) 2017 (5,550 Kta) Interquisa Invista Eastman Eastman BP BP 41% 29% Indorama 2004 (3,800 Kta) PET Installed Capacity (1) 2017 (4,931 Kta) 8% Indorama Others Eastman NanYa FENC 1 NanYa Wellman Source: PCI adjusted with Alpek s official capacities 2017 Capacities, 2018 YTD M&As M&G Invista M&G 42% Indorama 1) Far Eastern ( FENC ) acquired Apple Grove assets from M&G on January 30 th

49 North America PTA / PET capacity breakdown North America 2017 Installed Capacity PTA Ktons USA Mexico Canada Total Alpek 640 1,610-2,250 Indorama 1, ,650 BP 1, ,400 Eastman Total 3,340 1, ,550 PET Ktons USA Mexico Canada Total Alpek 1, ,824 Indorama ,292 M&G Nan Ya FENC Total 3,022 1, ,391 1) Far Eastern ( FENC ) acquired Apple Grove assets from M&G on January 30 th 2018 Source: PCI adjusted with Alpek s official capacities 2017 Capacities, 2017 M&As 49

50 Alpek operates a state-of-the-art portfolio of proprietary and third-party technologies Alpek: Proprietary and Third-Party Technologies PTA PET Oilfield Chemicals Proprietary Technologies (I&D, acquisitions) Integrex PTA Integrex PET In-house technology Melt Tek TM Polypropylene EPS Caprolactam Third-Party Technologies Spheripol (LB) Spherizone (LB) Single Step (BASF) HSO DSM Source: Alpek 50

51 Alpek s IntegRex technology simplifies both PTA and PET production processes PTA / PET: Process Diagram Oxidation Feed prep Esterification Precursor Preheating Post-Oxidation Hydrogenation Pre-Poly Crystallization Crystallization Crystallization Polymerization Annealing Filtration and Drying Filtration and Drying Pelletization Solid State Polymerization CTA Storage PTA Storage Precursor Storage PET Resin Steps eliminated with IntegRex TM technology Source: Alpek Benefits from IntegRex TM technology: ~20% reduction in conversion cost ~US$15 less per ton in capital cost 11 less steps for the production of PTA and PET Lower wastewater by-product and greenhouse gas emissions 51

52 Gas turbine Steam turbine Power cogeneration overview Natural Gas 1 Cogeneration plant Hot gases 2 Heat Recovery Steam 3 Electricity Steam Contract-based power customers 1. Gas turbine generates electricity 2. Combustion gases produce steam 3. Steam is used to generate additional electricity and for Alpek s chemical reactions 52

53 M&G Chemicals Overview About M&G Plant locations Founded 1953 in Toronta, Italy Private company; no public debt or equity 20-yr comercial relationship w/alpek (11% of Alpek sales) Corpus Christi 1 Apple Grove Altamira Installed Capacity PTA PET Apple Grove (USA) 270 Altamira (Mexico) 560 Suape (Brazil) 550 Corpus Christi 1 (USA) Suape 1) Under construction; net of Alpek s capacity reservation Source: PCI 53

54 Alpek s exposure to M&G US$M Guarantee Capacity Reservation Corpus Christi 435 Corpus Christi assets (2 nd lien) Accounts Receivable 113 Unsecured $90 M Loan 90 Corporate guarantees M&G Mexico Loan (Acquired) 100 M&G Mexico PET plant in Altamira (1 st lien) M&G Mexico Loan 30 1 US $60 M secured credit facility 1) Amount disbursed as of 1Q18 54

55 M&G s Corpus Christi site capacity breakdown (pre-bankruptcy agreement) PTA 1.3 M tons Corpus Christi Site (CC) PET 1.1 M tons Raw materials (e.g. Px, MEG, etc.) 420 Ktons 500 Ktons Raw materials (e.g. Px, MEG, etc.) M&G 850 Ktons M&G 600 Ktons 350 Ktons PTA Pearl River 55

56 Non-recurring charges associated to M&G (2017) Income Statement Balance Sheet US$M 2017 (ex-m&g) Non-rec. charges 2017 US$M Dec-17 (ex-m&g) Non-rec. charges Dec-17 Operating Income 360 (548) (188) Intangible asset impairment (435) A/R Provision (113) EBITDA 497 (113) 384 A/R Provision (113) Financial cost, net (93) (95) (188) Taxes (52) Net income (loss) 214 (485) (271) Profit (loss)attributable to controlling interest 162 (481) (319) Net Debt 1,262 1,262 Net Debt / EBITDA Assets 5,298 (546) 4,752 Trade accounts receivable 657 (113) 544 Intangible Assets Cap Res 566 (360) 206 Other Assets Cap Res 77 (75) 2 Other Assets Loan 204 (95) 109 Other Assets Deferred tax Other Assets 3,769-3,769 Liabilities 3,208 (61) 3,147 Other Liabilities Deferred tax 284 (61) 223 Other Liabilities 2,924-2,924 Stockholders Equity 2,089 (485) 1,604 Net Income 214 (485) (271) Others 1,875-1,875 56

57 2018 average Brent price estimated at $57/bbl Brent Crude Oil Dls/Bbl $/bbl $/bbl Guidance 2018 ($57/bbl) $/bbl 44 $/bbl Δ 1 US$ dollar / Bbl = ~ Δ 3 US$ Million EBITDA 57

58 Paraxylene (Px) Price Px USA Contract Price 1,708 1,635 1,543 (US$ / Ton) 1, , ,069 1, Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 58

59 Propylene and Styrene Prices North America Propylene Contract Price North America Styrene Spot Price (c / lb) (c / lb) Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q J F M A M J J A S O N D J F M 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q J F M A M J J A S O N D J F M

60 PET Margin (Asia) Margin: Asia PET to Px/MEG (US$ / Ton) China PET PTA Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q Source: ICIS, PCI, CCFGroup, Alpek 60

61 (c / lb) Polypropylene Margin (USA) Margin: Polypropylene to Propylene (PGP) Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

62 Caprolactam Margin Margin: CPL Spot (Asia) to Contract Benzene (NA) 2,108 (US$ / Ton) 1,181 1, , ,108 1, Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

63 (Pesos) Alpek stock highlights (BMV: ALPEK) Daily Stock Price Daily Average Traded Shares & Value (M Shares) (U.S. $ M) Shares Value ($) Jun Sep Dec Mar Jun Sep Dec Mar 0 J A S O N D J F M A M J J A S O N D J F M Valuation 4Q15 4Q16 4Q17 4Q17 Proforma 1Q18 1Q18 Proforma 2018G Market Cap. (U.S.$ B) 3,113 2,193 2,951 2,951 2,883 2,883 2,859 Net Debt (U.S.$ M) 722 1,042 1,262 1,262 1,270 1,270 1,167 EBITDA LTM (U.S.$ M) Enterprise Value / EBITDA Price / Earnings N/A 13.8 N/A Price per Share (MXN) Exchange Rate (MXN/USD)