3rd Quarter 2020 Financial Results - Stock Exchange of ...

3rd Quarter 2020 Financial Results

Indorama Ventures

9 November 2020

2Operating Cash FlowSNG

Disclaimer

This presentation contains “forward-looking statements” of Indorama Ventures Public Company Limited (the “Company”) that relate to future

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contained herein, including, without limitation, those regarding the future financial position and results of operations, strategy, plans, objectives,

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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

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The Company makes no representation whatsoever about the opinion or statements of any analyst or other third party. The Company does not

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A G E N D A

Management Perspectives

Aloke Lohia, Group CEO

3Q 2020 Reflections & Business Results

D K Agarwal, CEO

3Q 2020 Finance

Sanjay Ahuja, CFO

3Q 2020 Key takeaways & Outlook


4

IVL steering through COVID-19 pandemic

• IVL remaining agile and nimble to steer through this pandemic

• Our 120 production units continued operations with minimal impact on operations

and supply chain

• Global Emergency Management Team provided continued leadership during these

unprecedented times

• Local leadership empowered to ensure business continuity

• Solid liquidity and effective inventory level maintained

• IVL Foundation continued to support and assist local communities where we operate

around the world

5

2020 Key Takeaways

On-purpose inventory liquidation resulted in one-time non-cash value loss of $101M in

9M20. However, working capital efficiency improved; cash cycle days down by 6 days

1

4

2

3Q20 generated $354M of operating cash flow, $994M for 9M205

Project Olympus target raised to ~$600M. Key initiatives on track to deliver ~$90M in 20206

Record sales volume across segments and regions, +7% QoQ (+18% YoY; on 9M20 basis

+16%), driven by Combined PET and Fibers

IVL Business model advantaged to large Asian Integrated Polyester value chain peers

Note: (1) Sales volume of 3.6MT, including IVOX (Spindletop), which translated to a growth of 18% YoY; without IVOX, total sales volume is 3.2 MT (4% growth);

3COVID-19 related impacts, including crude oil price collapse, significantly impacted MTBE

and MEG in USGC, and compounded by unplanned shutdowns due to natural calamities

and planned PO/MTBE Turnaround

6200204 IVL Capital Markets Day ...SNG

Future Ready IVLMultiple ongoing projects & work streams to deliver incremental EBITDA of $582M by 2023

Key initiatives IVL strategic priorities

In collaboration with

World-renowned Partners

Full Potential Plan (Fibers segment)

Asset Full Potential (Mfg Exc And IP)

Future Ready

Cost TransformationAccelerate performance through

cost optimization

Leadership

Developmentand Future-ready

Organization

Asset

Full PotentialFocus on commercial

excellence to grow

revenues and margin

Recycling LeadershipBuild leading rPET business;set

new bar for sustainability

Adjacency GrowthPursue organic and bold-on growth in

attractiveadjacencies

5

1

2

34

Corporate

initiatives

Management Support

Future ready

organization

Full Potential Plan

(Fibers segment)

Asset Full

Potential (IOD

Segment)

Source: IVL Analysis

Asset Full

Potential (PET

Segment)

7200204 IVL Capital Markets Day ...SNGSource: IVL Analysis

104

132

268

78

582

Combined PET IODs Fibers GBS & IndirectProcurement

Est. EBITDAImpact

Estimated EBITDA impact by 2023 (by segment)$M

99

302

106

33

43

582

Strategy &Footprint

CommercialExcellence

OperationalExcellence

ProcurementExcellence

Organize forPerformance

Est. EBITDAImpact

Estimated EBITDA impact by 2023 (by function)$M

76

15

176

157

158

91

582

2020E 2021E 2022E 2023E Est.EBITDAimpact

$15M

additional

upside to

CMD est.

Estimated EBITDA impact by 2023 (by year)$M

Project Olympus target raised from $352M to $582M, 2020 expected to

deliver beyond initial target

8200204 IVL Capital Markets Day ...SNG

IVL’s ESG Leadership:

• IVL is a global leader on ESG integration

• Secured Thailand’s first green loan from Japan’s

Mizuho Bank for $200M and EUR200M, and syndicated

ESG loan for $255M

• Tied-up US$ 300M blue/green long-term financing with

DFIs

ESG Parameter UoMPerformance

2019

Targets

2025*

GHG intensity tCO2e/T 0.6 -10%

Energy intensity MWh/T 5.8 -5%

Renewable electricity %total 6.9% +10%

Water intensity m3/T 5.10 -10%

Investment in recycling systems $B n/a $1.5B

Recycling Capacity KTA 207 750

Total recordable incident rate k hrs 1.5 / 200 -10%

Note: *2019 base year


IVL’s ESG Integration

IVL’s Target 2025:

Rank 1st / 364• Leading in SET and GICS indices:

• 2019 Bloomberg ESG Disclosure Scores

• 68.2/100 (100th Percentile)

Rank 2nd / 108• Chemical constituent of 2019 DJSI World and

Emerging Markets

• 86/100 Score on RobecoSAM (99th Percentile)

Rank 18th / 424• 2020 ESG Risk Rating

• 21.6 risk rating

Rating 4.6 / 5 • A constituent of the 2020 FTSE4Good Index Series

on FTSE Russell (100th Percentile)

Top 2%• Companies in the Manufacture of basic chemicals,

fertilizers and nitrogen compounds, plastics and

synthetic rubber in primary forms industry

ESG Rating BB

Rating B• 2019 Climate Change Rating: B

• 2019 Supply Chain Rating: B-

Rank 2nd / 35 (B- grade)

• of the world’s largest chemical companies


A G E N D A

Management PerspectivesAloke Lohia, Group CEO


D K Agarwal, CEO

3Q 2020 Finance

Sanjay Ahuja, CFO




Record sales volume across segments and regions: +7% growth QoQ

Note: (1) Total IVL sales volume excluding captive PX and Ethylene; 1Q20 volume increased from Spindletop acquisition and in 2Q20 volume increased from normalized PO/MTBE operations

Sales VolumeMT

3Q20:

• Combined PET: +4%, driven by

continued strong demand for F&B

packaging

• IODs: +1% despite hurricane Laura

and lightning strike impacting our

USGC operations

• Fibers: +47% with Lifestyle and

Mobility strong recovery from

COVID-19 impact in 2Q20

Outlook:

• Combined PET: maintain growth

• IODs: volume gain following

hurricane impact

• Fibers: further volume improvement

driven by market recovery

1.2 1.1 1.3 1.31.0

1.4 1.4 1.5

0.9 0.9 0.9 0.9

3.13.4

3.63.7

3Q19 2Q20 3Q20 4Q20E 3Q19 2Q20 3Q20 4Q20E 3Q19 2Q20 3Q20 4Q20E 3Q19 2Q20 3Q20 4Q20E

2.5 2.6 2.7 2.7

0.10.5 0.5 0.6 0.5 0.3 0.4 0.5

3.13.4

3.6 3.7

3Q19 2Q20 3Q20 4Q20E 3Q19 2Q20 3Q20 4Q20E 3Q19 2Q20 3Q20 4Q20E 3Q19 2Q20 3Q20 4Q20E

Combined PET IODs Fibers Total IVL

Asia Americas EMEA Total IVL

+7%

+4%

+1%

+309%

+47%

(8%)

+7%

+18%

+14%

+5%

+7%

+18%

+48%

+4% +2%

+5%


QoQ:

• Sales volume up 7%, driven by

Combined PET and Fibers

• Margins decline in Combined PET and

Fibers due to COVID; IODs margins

recovered with crude oil price

• Higher fixed costs QoQ from

postponement of maintenance

activities from 2Q20 but lower YoY

• 3Q20 Core EBITDA impacted by $52M

due to hurricane Laura and lightning

strike, YTD impact of on-purpose

inventory liquidation was $101M

3Q 2020 Results – IVL

Core EBITDA ($M)

Combined PETIntegrated Oxides

& Derivatives (IODs)

Fibers One time events

2

Note: .(1) ROCE is calculated based on net operating capital employed (NOCE) and annualized core EBIT; (2) Combined PET includes Integrated PET, Packaging and Specialty Chemicals


281

201

304 305

251

3Q19 4Q19 1Q20 2Q20 3Q20

3Q19 4Q19 1Q20 2Q20 3Q20

Core EBITDA ($/T) 84 70 92 94 68

Core EBITDA Margin 10% 8% 10% 13% 10%

Core ROCE1 7% 3% 6% 6% 4%

Operating Cash Flow ($/T) 121 92 103 93 96

$51M

$52M-18%QoQ

3Q vs 2Q

-11%YoY

(Organic

-18%)

859

9M20

$203M

$51M

PO/MTBE

TAR

$52M Natural

calamities

$101M

Inventory

liquidation


Note: Integrated PET include PET, PTA, PX and recycling


3Q 2020 Results – Combined PET

Core EBITDA ($M)

QoQ:

• Sales volume up 4%, driven by

Integrated PET; Packaging normalized

after peak in 2Q20

• Lower Integrated PET spreads due to

decline in PX and PTA spread as a

result of reduced polyester demand

from COVID lockdown

• Higher fixed costs from postponement

of maintenance activities from 2Q20

but overall lower YoY

• YTD Core EBITDA impacted by on-

purpose inventory liquidation of $78M

Integrated PET, excl. PX PX

Specialty ChemicalsPackaging

220

134

192

225 199

3Q19 4Q19 1Q20 2Q20 3Q20

3Q19 4Q19 1Q20 2Q20 3Q20

Core EBITDA ($/T) 80 58 77 94 71


Core ROCE 13% 5% 13% 17% 14%

-12%

QoQ

-9%

YoY

617

9M20

$78M

Inventory

liquidation


IVL has made a great progress and on track meeting 2025 recycling target

Note: 1. Completion in 4Q20.


269

440

750

2020 2023F 2024F-25F

Asia

Americas

EMEA

2025 Global Commitment IVL global recycling strategy on track

Growing our volumesRecycled PET Capacity (kt)

Expanding our global footprint15 recycling plants (4 acquisitions/JVs 2020 year to date)

IVSSFUS

EcoMex Mexico

IVPMMexico

AlphapetUS

AurigaUS

IVSSUS

WellmanIreland

WellmanNetherlands

WellmanNeufchateau, France

WellmanVerdun, France

IPIThailand

PETValue JV, Philippines

IVSSB (Pj. Amazon)

Brazil

M&A/JVs (2020YTD)

Incorporate

of post-consumer PET material as

feedstock into our polyester production

per year

Recycle

Invest

>750,000 tons

billion bottles

per year50

billion$1.5Leverage

years of recycling

experience30+

Pj. Panther (IMP Polowat)

Poland1


3Q 2020 Results – Integrated Oxides and Derivatives

Integrated Surfactants

Integrated PEO

Integrated Oxide & Derivatives EBITDA ($M)

Integrated EG PO/MTBE

One time events

QoQ

• Drop in crude oil price eroded US

shale gas advantage over

Naphtha.

• US MTBE and EG spreads

improved with crude oil price

recovery but still low YoY

• 3Q20 Core EBITDA impacted by

$52M due to hurricane Laura and

lightning strike

Note: *2019 Pro-Forma EBITDA includes IVOL and Spindletop; Integrated EG include all glycols = Ethane to EG, Integrated Purified EO = Ethane to Purified EO, Surfactants = Ethane to Surfactants, EOA, LAB and others;

PEO volume used in calculation of Core EBITDA per ton up to 2019 is on EG equivalent basis. Since 2020 the PEO volume used in per ton calculation is PEO volume;

updated the breakdown of 1Q20 since last published on May 12, 2020


Without natural

calamities

(9)

19

26

23

59

3Q20

(1)

5 5

(3)

(37)

16

25 27

14 19

(14)

1 9

33

22

17

16

31

50

34 8

3Q19 4Q19 1Q20 2Q20 3Q20

3Q19 4Q19 1Q20 2Q20 3Q20 3Q20

Core EBITDA ($/T) 126 201 128 62 16 96

Core EBITDA Margin 20% 33% 14% 9% 2% 13%

Core ROCE 2% 14% (0)% (3)% (6)% 0%

(36)

60

(4)

72

92

9M20

$103M

$51M

PO/MTBE

turnaround

$52M

natural

calamities

$51M



3Q 2020 Results – Fibers

Hygiene Mobility Lifestyle

Fibers Core EBITDA ($M)QoQ:

• Sales volume up 47% driven by recovery

in Lifestyle and Mobility from COVID

impact; Hygiene remained strong

• Our Lifestyle fibers spreads have largely

been stable. Steep fall in demand in

2Q20 is now recovering

• Mobility fibers demand and spreads are

impacted by COVID-19. Improvement

seen in 2H20

• Hygiene fibers benefitted from strong

pricing and demand in 2Q20. This

expected to continue with better hygiene

consciousness

• Negative lag impact from rising price

environment

• YTD Core EBITDA impacted by on-

purpose inventory liquidation of $23M

19 26 29

47

26

15 12

12

(9)

1

16 5

20

(1)

13

51

43

61

37

39

3Q19 4Q19 1Q20 2Q20 3Q20

3Q19 4Q19 1Q20 2Q20 3Q20

Core EBITDA ($/T) 106 107 141 129 97


Core ROCE 1% (1)% 3% (0)% (0)%

-23%

YoY3Q20 vs

3Q19

+6%

QoQ3Q vs 2Q

101

4

31

137

9M20

$23M

Inventory

liquidation


A G E N D A




D K Agarwal, CEO

3Q 2020 Finance

Sanjay Ahuja, CFO




3Q 2020 Financial Highlights

+10%QoQ Core EBITDA

$251M(THB 7.8B)

-18%QoQ

Net Op Debt

to Equity

1.29x

-3 bpsQoQCore EPS

THB 0.11cc

-0.32QoQ

Total Revenue

$2.6B(THB 81.0B)

Total Sales

Volume

3.6 MTs

+18%YoY

OCF

$354M(THB 11.1B)

+18%QoQ

+7%QoQ

-9%YoY

-11%YoY

+69 bpsYoY

-0.34YoY

-12%YoY

Note: Total Sales volume 3.6 MT – Integrated PET at 2.44 MT, Fibers at 0.44 MT, Packaging at 0.05 MT, IOD at 0.54 MT, specialty chemical at 0.17 MT;

Net Op Debt to Equity = (Total debt – Cash and cash under management-Project debt) / Total equity;

Total Equity = Total equity attributable to shareholders + Non-controlling interests + Subordinated perpetual debentures



Strong cash conversion from continuous improvement in working capital

efficiency


Cash Flow from OperationsNet Working Capital

0.72 0.71

0.85

0.99

1.32 1.33

113%

91% 85%69%

115% 116%

-140%

-90%

-40%

10%

60%

110%

2015 2016 2017 2018 2019 Annualized9M20

Cash flow from operations ($B) Cash flow conversion (%)

1.531.46

1.21 1.19

1.030.95

0.81

45 44

4043

32

37

29

1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20

Net working capital ($B) Cash cycle days


Ongoing

refinance ($0.8b)

0.06

0.9

1.21.1

1.31.5

-

1

2

4Q20 2021 2022 2023 2024 2025+

LT Loan Debenture

1.1

2.7

0.8 0.7

0.4

-

1

2

3

2019 2020F 2021F 2022F 2023F

Growth Maintenance

Growth and Maintenance CAPEX1 ($B)

Include acquisition of

Spindletop ($2B)

in Jan 2020

Improved liquidity and lowered CAPEX

• Strong liquidity: over $2.5B4

• Lower interest cost due to lower

benchmark rates and refinancing at

lower rates

• Long term debt (incl. bonds and

finance leases) repayment of

$0.06B in 4Q20

• No stress on scheduled

repayments or covenants

• Lowered CAPEX

• Natural hedge on FOREX with our

global portfolio

• TRIS AA- rating maintained

Note: (1) As of 30 Sep 2020, including Finance Lease Liability, (2) 2021 onwards major projects include Corpus Christi, IODs – surfactants expansion and Corporate initiatives

(3) 2019 includes NWC on the day of acquisition (4) Liquidity includes cash and cash under management $0.6B and unutilized credit lines $1.9B


Debt Repayment Profile1 ($B)


A G E N D A




D K Agarwal, CEO

3Q 2020 Finance

Sanjay Ahuja, CFO



21

2020 Key Takeaways

On-purpose inventory liquidation resulted in one-time non-cash value loss of $101M in

9M20. However, working capital efficiency improved; cash cycle days down by 6 days

1

4

2

3Q20 generated $354M of operating cash flow, $994M for 9M205

Project Olympus target raised to ~$600M. Key initiatives on track to deliver ~$90M in 20206

Record sales volume across segments and regions, +7% QoQ (+18% YoY; on 9M20 basis

+16%), driven by Combined PET and Fibers

IVL Business model advantaged to large Asian Integrated Polyester value chain peers

Note: (1) Sales volume of 3.6MT, including IVOX (Spindletop), which translated to a growth of 18% YoY; without IVOX, total sales volume is 3.2 MT (4% growth);

3COVID-19 related impacts, including crude oil price collapse, significantly impacted MTBE

and MEG in USGC, and compounded by unplanned shutdowns due to natural calamities

and planned PO/MTBE Turnaround

22

2021 Outlook

IVL Premium recover as absolute prices increase

1

IVL polyester value chain margin more resilient to Asian peers. Benchmark PSF and

PET margin resilient in face of feedstock margin pressure in mid-term

3

2

Project Olympus to provide significant EBITDA and cash flow uplift

4

Return of US shale gas advantage with crude oil price recovery (MEG and MTBE)

5

Crude oil and fiber demand recovery as lockdown eases; consequent polyester

feedstock demand and margins recovery (PX, PTA, MEG, MTBE)

Thank you

3rd Quarter 2020 Financial Results - Stock Exchange of ...

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