363n Corporativa Alpek ENG 4Q17 v21.3.pptx) · 2018. 3. 5. · (2,950 Kta) A Monterrey 160 B Altamira 1,000 640 240 C Salamanca 85 D Ocotlán 10 E Cosoleacaque 610 185 F Lerma 100

General

Corporate Presentation

4Q17

General

This presentation contains, or may be deemed to contain, “forward-looking statements”. By their nature, forward looking statements involverisks and uncertainties because they relate to events and depend oncircumstances that may or may not occur in the future. The future resultsof Alpek, S.A.B. de C.V. And its subsidiaries may differ from the resultsexpressed in, or implied by the forward-looking statements set outherein, possibly to a material degree.

21.2

General

Index

• Business Overview

• Consolidated Financials

• Appendix

General

Investment Highlights

5

Market-leading position in the Americas1

High-return integration and cost-saving projects3

Attractive consumer-oriented product portfolio2

4 Low cost producer with leading technology

5 Experienced management team

6 Strong free cash flow and financial performance

General

Alpek is a leading petrochemical company focused on Polyester chain products, mainly PTA and PET

6

Alpek Polyester2

PTA / PET Polyester Fibers

Polyester (72% of sales) Plastics & Chemicals (28% of Sales)

PolypropyleneExpandable Polystyrene

Caprolactam& Fertilizers

Others

Indelpro3 Styropek Unimor Polioles4

Revenues1: US$ 5.2 BillionEBITDA1: US$ 384 Million (US$ 497 Million ex-A/R impairment)

Source: Alpek estimates

(1) 2017

(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.

General

Polyester Chain

Gasoline

Reformer Paraxylene

Crude Oil

Fibers

PET

PTA

MEGEthyleneCrackerEthane

Naphtha Ethylene

Oxide

Polyester

7Source: Alpek

General

Alpek´s products are widely used for food packaging and consumer end-markets


Kta: Thousand tons per year

Volume by Industry 2017(4,012 Kta)

Consumer Goods

25%

Textiles7%

Construction2%

Sales Geography 2017(US$ 5,231 Million )

Europe3%

Mexico 35%

USA 44%

Asia and Others1%

LatAm13%

Food and Beverages

66%

Canada3%

8

Sample End Users by Industry

Beverage Food Personal care Textiles

General

Alpek is the largest integrated polyester producer in North America (PTA-PET)

1) Far Eastern (“FENC”) acquired Apple Grove assets from M&G on January 30th 2018

Source: PCI adjusted with Alpek’s official capacities

2017 Capacities, 2018 YTD M&As

PTA(5,550 kta)

M&G

FENC1

Indorama

NanYa

42%

PET(4,391 kta)

North America2017 Installed Capacity

9

BP

Indorama

Eastman

41%

29%

13%

10%

30%

25%

5%

6%

General

Alpek’s installed capacity amounts to 5.8 M tons; 23 production facilities and ~5,200 employees


Kta: Thousand tons per year

(1) Includes industrial and specialty chemicals and recycled PET capacities

Location of Production Sites Installed Capacity Breakdown (Kta)

10

Site PTA PET rPET Fibers PP EPS CPL Other

Mexico(2,950 Kta)

A Monterrey 160

B Altamira 1,000 640 240

C Salamanca 85

D Ocotlán 10

E Cosoleacaque 610 185

F Lerma 100

USA(2,343 Kta)

G Cedar Creek 170 73

H Cooper River 170 150

I Columbia 640 725

J Pearl River 430

Canada K Selenis 144

Argentina(225 kta)

L Zárate 190

M Pacheco 16

N General Lagos 19

Brazil O Guaratingueta 46

Chile(27 Kta)

P Santiago 5

Q Puerto Montt 2

R Concon 20

Total Capacity1: 5,830 Kta 2,250 2,014 89 310 640 325 85 117

AB

CD EF

GIHJ

LMN

O

P

Q

R

K

General

Alpek has developed a leading position in every product of its portfolio

Source: PCI and Alpek estimates

(1) In North America

(2) In the Americas, including recent EPS acquisition

Alpek: Industry Position

Industry Position Comments

PTA #1 in North America • Attractive industry structure• 41% est. installed capacity share1

PET#1 in North America #2 Worldwide

• 42% est. installed capacity share1

Fibers #2 in North America• Leading supplier of filament for car seatbelts• 26% est. installed capacity share1

PP Only producer in Mexico • Attractive growth potential

EPS #1 in the Americas• Largest plant in the Americas• 40% est. installed capacity share2

CPL Only producer in Mexico • Among top 5 lowest cost producers worldwide

Po

lyeste

rP

lasti

cs &

C

hem

icals

11

General

Alpek is investing in attractive organic projects to boost profitability

Strategic Guidelines


Project OverviewEstimated figures and dates

● Capture natural gas, ethane and propane

advantage in North America

● Maximize operating efficiency

● Selective capacity expansion

● Lever IntegRex® technology

12

ProjectCapex (US$M)

EBITDA (US$M)

Start-up

1. Cosoleacaque Cogeneration 140 30 4Q14

2. MEG Tolling Agreement 65 20 2Q16

3. Propylene Spheres (2) 23 10 2Q17

4. EPS Expansion Altamira 30 10 3Q17

5. Altamira Cogeneration 350 90 2018

6. PTA/PET Site (Corpus Christi) 435 100 TBD

Total ~ $1 B ~$260

US $978 M invested up to Dec-17

General

Alpek also holds a successful M&A track record and is constantly evaluating potential targets

13

Attractive Market Potential

Existing/Related Business

Cost Competitiveness

M&A Deals (2011-2016)M&A Guidelines

Product Capacity Year Country Investment

1. EastmanPTA / 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

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

Alpek M&A

7. PetroquimicaSuape (1)

PTA 640 ktons

2018est.

Brazil US $385 MPET 450 Ktons

Fibers 90 ktons

(1) Subject to corporate and governmental approvals after suspension imposed on the assets’ sale is resolved by Petrobras

General

Guidance 2018

4,1354,0123,9383,9373,931

20152014 20172016

+3%

2018G

Sales Volume Revenues

EBITDA CAPEX


569

669630

434384

2015

+48%

2017 2018G2014 2016

167

345317320

236

-29%

2014 2018G2015 2016 2017

(Kto

ns)

(US

$ M

illio

n)

(US

$ M

illio

n)

(US

$ M

illio

n)

5,4134,838

5,284

6,471

5,231

2014 2018G201720162015

+3%

% Sales 6.7% 7.3%11.9% 13.8%

14

10.5%

General

EBITDA: 2017 vs 2018 Guidance

15

22569

99

113384

2017 2018G

5

M&G A/R Provision

Inv. Val.P&ChPolyester

Alpek: EBITDA(M dls)

US$M 2017 2018G

Polyester 246 346

Plastics & Chemicals 229 224

Comparable 475 569

Inventory gain 22 -

M&G A/R Provision (113) -

Reported 384 569

General

Relevant events – forward looking

● M&G’s Restructure

� Support M&G Altamira PET plant operations (tolling agreement + US $60 M secured credit facility)

� Focus on Altamira and Corpus Christi restructuring processes

● Sale of Cosoleacaque and Altamira power cogeneration plants

� Advanced process with ContourGlobal

● PQS acquisition (Brazil)

� Transaction approved by CADE (Feb 2018)

● PET antidumping cases in U.S.A. and Canada

� USA: DOC and ITC investigations initiated 4Q17

� Canada: preliminary duties imposed in 4Q17 (22% - 77%)

16

General

Index



• Appendix

General

Sales Volume and Revenues

2016

3,9383,937

+2%

3,931

78%

23%24%

2015

23%

2017

4,012

77%77%

2014

76%

22%


29%

2015

5,284

+8%

5,231

71%

29%

20172016

4,838

71%

73%

2014

27%

73%

27%

6,471

(Kta

)

(US

$ M

illi

on

)

Polyester Plastics & Chemicals

Source: Alpek estimates 18

General

Income Statement Accounts

532481

286

2015 201720162014

Operating Income EBITDA

Financial Cost, Net (1) Majority Net Income


(1) Financial Cost, Net = Net Financial Expenses + Fx Gains (Losses) + Interest Rate Swaps + Gas & Comm. Derivatives

133116111

93

95

188

2017201620152014

198175

65

2014 2015 20172016

(US

$ M

illio

n)

(US

$ M

illio

n)

(US

$ M

illio

n)

(US

$ M

illio

n)

11.0%9.1%4.4%% Sales

% Sales

4.1%3.3% -6.1%1.0%% Sales

669630

434

2014 20172015 2016

13.8%11.9%6.7%

19

-3.6%

7.3%

497

384

162

ex-M&G360 ex-M&G

ex-M&G

ex-M&G

188

319

General

Balance Sheet Accounts

497

694632

685

20162014 20172015

Net Working Capital(1) Property, Plant and Equipment

Net Debt(2) Stockholders’ Equity


(1) Net Working Capital = Accounts receivable + Other accounts receivable + Inventories - Suppliers - Other accounts payable and accrued expenses

(2) Net Debt = Bank loans and notes payable + Current portion of long term debt + Long term debt – Cash

2,1051,955

1,8201,861

20152014 2016 2017

1,262

1,042

722715

2014 201720162015

1,604

2,0192,0052,028

20172014 2015 2016

(US

$ M

illio

n)

(US

$ M

illio

n)

(US

$ M

illio

n)

(US

$ M

illio

n)

445347 45NWC Days

20

General

Financial Ratios and Other Indicators

Interest Coverage(1)Net Debt / EBITDA

CAPEX


(1) Interest coverage= EBITDA / Net financial expenses

7.0

10.7

6.5

2014 2015 20172016

1.6

1.1

1.6

2.5

2014 2016 20172015

3.3

236

345317320

20162014 20172015

(Tim

es)

(Tim

es)

(US

$ M

illio

n)

170160

110

20162014 2015 2017

EBITDA / Ton

(US

$ / T

on

)

21

ex-M&G 4.8

6.2 ex-M&G

ex-M&G

94

124

General

Alpek Consolidated Debt Profile December 2017

● Gross Debt: U.S. $1,747 million

● Net Debt: U.S. $1,262 million

● Available Committed Credit Lines: U.S. $166 million (Total: U.S. $430 million)

● 99% of our debt is denominated in US dollars(1)

(1) A small portion of debt is denominated in ARS

300

715

105

241

12

362

484

20212019 202320202018 2022Cash

22

General

Dividends paid to shareholders

23

143

111

95

114

100

129

20162014(1) 20172012 20152013

(1) Paid in December2013

(US

$ M

illio

n)

General

Index



• Appendix

General

Operating & Financial Highlights (4Q17)

Alpek

• 4Q17 Consolidated EBITDA of U.S. $141 million, including a U.S. $16 million non-cash inventory gain; rapid recovery after 3Q17

• Cogeneration power plants’ sale process advanced with ContourGlobal• 3.3 times Net Debt/EBITDA; 2.5 times excluding M&G A/R provision (U.S. -

$113 million)

Polyester

• M&G Mexico resumed PET production in 4Q17; Alpek supplies PTA via tolling agreement and secured credit facility

• The Court of the Administrative Council for Economic Defense in Brazil (CADE) approved the acquisition of PetroquímicaSuape and Citepe

• PET antidumping cases moving forward in the United States and Canada

Plastics &

Chemicals

(P&C)

• 4Q17 P&C EBITDA of U.S. $64 million, including a U.S. $5 million non-cash inventory gain

• Margin expansion in polypropylene (PP) and caprolactam (CPL) more than offsets flat 4Q17 volume

25

General

Latest Quarter Results

Source: Alpek

(1) Times: Last 12 months.

Alpek: Selected Financial Information

26

(%) 4Q17 vs.

4Q17 3Q17 4Q16 3Q17 4Q16 YTD17 YTD16 Ch.%

Total Volume (ktons) 975 1,012 970 (4) 1 4,012 3,938 2

Polyester 752 788 749 (5) - 3,105 3,004 3

Plastics & Chemicals 224 225 221 - 1 906 934 (3)

Consolidated Revenues 1,321 1,312 1,183 1 12 5,231 4,838 8

Polyester 933 945 851 (1) 10 3,724 3,444 8

Plastics & Chemicals 388 367 332 6 17 1,506 1,394 8

Consolidated EBITDA 141 3 133 4,241 6 384 669 (43)

Polyester 77 (51) 82 253 (6) 147 349 (58)

Plastics & Chemicals 64 54 52 18 21 237 322 (26)

Profit Attributable to Controlling Interest (30) (400) 28 92 (209) (319) 198 (261)

CAPEX and Acquisitions 30 64 75 (54) (60) 236 345 (32)

Net Debt 1,262 1,192 1,042 6 21

Net Debt/LTM EBITDA(1) 3.3 3.2 1.6

Interest Coverage(1) 4.8 5.4 10.5

General



EBITDA Majority Net Income

Source: Alpek

(Kto

ns)

(US

$ M

illio

n)

(US

$ M

illio

n)

(US

$ M

illio

n)

970998981988 9751,0121,038986

4Q1Q 2Q 3Q

133

157

208

171

141

3

82

158

4Q1Q 3Q2Q

1,1831,2361,237

1,182

1,3211,3121,3061,293

1Q 4Q3Q2Q

285048

72

-30

-400

25

87

3Q1Q 4Q2Q

1.4% 6.1%

-97.9% -902.8%

Ch.% Ch.%

Ch.% Ch.%

0.5% 11.7%

5.5% -209.4%

-0.2% 9.4%

-7.9% 20.4%

(US

$ M

illio

n)

5.8% 5.5%

-60.5% -48.5%

272016 2017 ex-M&G

3

116

General


Source: Alpek

Alpek: Net Income

Alpek: Cash Flow

28

(%) 4Q17 vs.

4Q17 3Q17 4Q16 3Q17 4Q16 YTD17 YTD16 Ch.%

EBITDA 141 3 133 4,241 6 384 669 (43)

Net Working Capital & Others (37) 29 (84) (228) 55 83 (183) 145

Capital Expenditures & Acq. (30) (64) (75) 54 60 (236) (345) 32

Financial Expenses (22) (17) (16) (27) (35) (72) (58) (25)

Income tax (9) (19) (22) 50 58 (87) (164) 47

Dividends (7) (71) (20) 90 64 (176) (225) 22

Payment affiliated companies - - 8 - (100) 1 68 (99)

Other Sources / Uses (105) 5 (50) (2,325) (108) (118) (83) (42)

Decrease (Increase) in Net Debt (70) (135) (127) 48 45 (221) (320) 31

(%)4Q17 vs.

4Q17 3Q17 4Q16 3Q17 4Q16 YTD17 YTD16 Ch.%

Consolidated Net Income (20) (394) 33 95 (161) (271) 272 (199)

Non-Controlling Interest 10 6 5 65 94 49 75 (35)

Controlling Interest (30) (400) 28 92 (209) (319) 198 (261)

Earnings per Share (U.S. Dollars) (0.01) (0.19) 0.01 92 (209) (0.15) 0.09 (261)

Avg. Outstanding Shares (Millions)* 2,117 2,117 2,117 2,117 2,117

General

Comparable EBITDA and 2018 Guidance (ex-M&G)

29

Reported EBITDA 2015 2016 2017 2018G 4Q16 4Q17

Polyester 344 349 147 346 82 77

Plastics & Chemicals 284 322 237 224 52 64

TOTAL 630 669 384 569 133 141

Comparable EBITDA 2015 2016 2017 2018G 4Q16 4Q17

Polyester 378 331 234 346 66 66

Plastics & Chemicals 273 308 229 224 52 59

TOTAL 654 637 462 569 117 124

Adjustments* 2015 2016 2017 2018G 4Q16 4Q17

Polyester 35 (18) 87 - (16) (11)

Plastics & Chemicals (11) (14) (8) - - (5)

TOTAL 24 (32) 79 - (16) (16)

*Adjustments: Inventory and non-operating, one-time (gains) losses

General

EBITDA vs. Guidance (2017)

30

US$M 2017 2017G

Polyester 246 304

Plastics & Chemicals 229 198

Comparable 475 502

Inventory gain 22 -

M&G A/R Provision (113) -

Reported 384 502

Alpek EBITDA vs Guidance

38422321

32389

502

113

29

Secondary feedstocks

(IPA)

2017OthersM&G PP

US -$5 M

Inv. val.M&G A/R Provision

2017G 2017 Ex-M&G

General

Polyester ChainPTA, PET, and Polyester Fibers

Employees: 3,629

Products (Capacity):• PTA (2,250 Kta)• PET (2,014 Kta) • rPET (89 Kta)• PSF (150 Kta)• Filament and polymer (160 Kta)

Raw Materials:• Paraxylene (Px)• Monoethyleneglycol (MEG)• Acetic Acid

End Markets:• Food and beverage• Textile• Consumer Goods

EBITDA 2017

US$ 3,724 Million

Revenues 2017

US$ 147 Million

General Information

Source: Alpek 31

Pearl River, MIPET

Cedar Creek, NCPET, R-PET

Columbia, SCPTA & PET

Cooper River, SCPET & PSF

Monterrey, N.L. HeadquartersPolyester Filament

Cosoleacaque, Ver. PTA & PET

Altamira, Tamps.PTA

Selenis, Quebec. PET

ARG

Zárate, Arg.PET

Pacheco, Arg.PET

General

Plastics & ChemicalsPP, EPS, CPL and Others

General Information

Employees: 1,527

Products (Capacity):• Polypropylene - PP (640 Kta)• Expandable Polystyrene - EPS (250 Kta)• Caprolactam - CPL (85 Kta)• Other (117 Kta)

Raw Materials:• Propylene, Styrene, Cyclohexane,

Ammonia, Sulfur, Pentane, Ethylene Oxide, Propylene Oxide and Others

End Markets:• Consumer Goods• Food and Beverage• Construction

EBITDA 2017

US$ 1,506 Million

Revenues 2017

US$ 237 Million

Ocotlán, Jal.Nylon 6

Monterrey, N.L. Headquarters,

Lerma, Edo. De Mex. Specialty Chemicals

Altamira, Tamps.PP, EPS

Salamanca, Gto. CPL and Fertilizers

Guaratingueta, BrazilEPS

Santiago, ChileOther

Puerto Montt, ChileOther

General Lagos, ArgentinaEPS

32

Concon, ChileEPS

Source: Alpek

General

Alpek is managed by an experienced team focused on delivering value to shareholders

Source: Alpek

Po

lyeste

rP

lasti

cs

&

Ch

em

icals

Name PositionYears with Alpek / Alfa

José de Jesús Valdez Simancas CEO 42

Eduardo Escalante Castillo CFO 31

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

Po

lyeste

rP

lasti

cs

&

Ch

em

icals

33

General

Plastics & Chemicals

Organization Chart

Source: Alpek

Polyester Chain

Felipe GarzaCo-President

Alpek Polyester

Jorge YoungCo-President

Alpek Polyester

Alejandro Llovera

President, Polypropylene

Gustavo TalancónPresident, Polyester Filaments

Eduardo Escalante

CFO

José de Jesús ValdezCEO

José Luis Zepeda

President, EPS and Chemicals

Gustavo Talancón

President, CPL and Ammonium

Sulfate

34

General

Polypropylene Chain

Source: Alpek

Propylene

Refinery

Cracker

Polypropylene

35

General

Gasoline

Reformer Benzene

Refinery

Crude Oil

EPS

EPS & CPL Chain

Source: Alpek

Ethylene

Styrene

Cyclohexane Caprolactam(CPL)

Cracker

Ammonia

36

General

+ +

World leader in PP production with sales in more than 100 countries

Largest petrochemical company in the world with more than 370 sites

Alpek has been a reliable partner to other global industry leaders through successful joint ventures

51.0%50.0%

+ 1 Share

Source: Alpek

Alpek: Sample Joint Ventures

37

General

Alpek has grown at a 8% annualized rate since 1986 through M&A, JVs and organic projects

1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015

PTA/PET acquisitions(USA)

CabelmaPETCoso Cogen

Acquisition of Univex

(Caprolactam)

Clear Path Recycling

Cogeneration project

Acquisition of PTA plant

Polypropylene plant start-up

Propylene splitter

installation

Acquisition of polyester business

(USA)

Acquisition of Argentina and Mexico PET plants

EPS expansion in Altamira

IPO (BMV)

DMTExpansion EPS

Expansion

Polypropylene expansion

EPS acquisition

Source: Alpek

Sales Volume 1986-2016(Index: 1986=100)

38

Selenis/ ConconAcquisition

General

Organic growth and acquisitions position Alpek as a leading PTA and PET producer in North America

2004(5,500 Kta)

2017(5,550 Kta)

2004 (3,800 Kta)

2017(4,931 Kta)

PTA – Installed Capacity(1)

PET – Installed Capacity(1)

Eastman

Interquisa

BP

Invista

Indorama

Eastman

Wellman

Invista

M&G

NanYa

Others

M&G

Indorama

NanYa

FENC1


2017 Capacities, 2018 YTD M&As

29%

41%

8%

42%

39

Indorama

BP

Eastman


General

Proprietary Technologies(I&D, acquisitions)

Third-Party Technologies

Alpek operates a state-of-the-art portfolio of proprietary and third-party technologies

PTA

• Integrex PTA

PET

• Integrex PET

• Melt – TekTM

Oilfield Chemicals

• In-house technology

Polypropylene

• Spheripol (LB)

• Spherizone (LB)

EPS

• Single Step(BASF)

Caprolactam

• HSO• DSM

Alpek: Proprietary and Third-Party Technologies

Source: Alpek

40

General

Oxidation

Post-Oxidation

Filtration and Drying

CTA Storage

Filtration and Drying

Feed prep

Hydrogenation

Crystallization Crystallization

PTA Storage

Polymerization

Precursor Storage

Esterification

Pre-Poly

Annealing

Solid State Polymerization

Crystallization

PET Resin

Pelletization

Precursor Preheating

Steps eliminated with IntegRexTM

technology

�

�

�

�

�

�

� �

�

�

�

Alpek’s IntegRex® technology simplifies both PTA and PET production processes

Benefits from IntegRexTM 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 emissionsSource: Alpek

PTA / PET: Process Diagram

41

General

Power cogeneration overview

Contract-based power

customers

Ga

s

turb

ine

Heat Recovery

Cogeneration plant

Ste

am

tu

rbin

eNatural Gas

Electricity

Steam

Steam

12

3

1. Gas turbine generates electricity

2. Combustion gases produce steam

3. Steam is used to generate additional electricity and for Alpek’s chemical reactions

Hot gases

42

General

Alpek has effectively transformed its EPS business

43

The Americas’ installed EPS capacity 2017ETotal: 600 ktons

Flint Hills

42%

17%

15%

Alpek(Styropek)

18%

8%

Others

Nexkemia

Nova

32575

23065

165

20

ConconPlant

2018Acquisition Altamira Expansion

2014 2015

Kta

Alpek: EPS capacityExpandable Polystyrene (EPS)

General

Alpek acquired a controlling interest in SelenisCanada Inc.

44

• Capacity: 144 Ktons (PET)

• Location: Montreal, Canada

• Rationale: • Only PET plant in Canada

• Alpek to capture PTA integration synergies

• Complement product portfolio with

differentiated PET products

Montreal. Canada

Charleston. USAColumbia. USA

Bay St. Louis. USA

Monterrey. México

Fayetteville. USA

Altamira. México

Cosoleacaque. México

Zárate. Argentina

Pacheco. Argentina

Alpek: Polyester production facilities

Polyester Plants (4,519 Kta)

Selenis Plant (144 Kta)

Selenis Plant

General

U.S.A. PET antidumping case (2016)

Case Calendar

• 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 7 – 126 % 105 – 126 %

India 0 – 1541 % 8 – 19 %

Oman 0 % 8 %

(1) 154% only for JBF Industries Limited

Final Rates

45

• Rates applicable for a minimum period of five years.

• Trade orders could be renewed in five-year increments

General

U.S.A. and Canada PET antidumping cases (2017)

46

U.S. A.

● Petitions filed in September

� Department of Commerce (“DOC”) – initiated investigation (4Q’17)

� International Trade Commission (“ITC”) – initiated investigation (4Q’17)

Canada

● Canada Border Services Agency (“CBSA) initiated investigation in Aug-17

● Preliminary duties imposed in 4Q’17 (22%-77%); final resolution expected in 1Q’18 (duration 5 years)

Countries under investigation

U.S.A. Canada

• Brazil• Indonesia• South Korea• Pakistan• Taiwan

• China• India• Oman• Pakistan

General

2018 average Brent price estimated at $57/bbl

Brent Crude Oil

47

• Δ 1 US$ dollar / Bbl = ~ Δ 3 US$ Million EBITDA

120

80

60

20

40

100

Dls/Bbl

99 $/bbl

53 $/bbl

2014 2015 2016 2017

44 $/bbl

Guidance 2018($57/bbl)

2018

54 $/bbl

General

981898

995926

871920

838882

948

1,168

9701,014

1,5431,635

1,708

1,003

2Q’164Q’15 2Q’173Q’15 1Q’17 3Q’173Q’161Q’16 4Q’162012 2Q’151Q’1520142011 2013 4Q’17

Px USA Contract Price

(US

$ / To

n)

Paraxylene (Px) Price

48

General

Propylene and Styrene Prices

49

North America Propylene Contract Price North America Styrene Spot Price

50494847

40393939

46

5248

42

3638

333131

33

42

50

70717073

JM SJAE F O4Q M A1Q 2Q3Q2Q 4Q1Q 3Q4Q 3Q1Q2Q DN

2014 2015 2016 2017

575352

60

55

504846

50

63

74

59

49

4446

4239

48

59

44

59

717175

AF J OME4Q J SM A3Q4Q4Q 2Q1Q1Q 3Q2Q2Q 1Q3Q DN

2014 2015 2016 2017

(c / lb

)

(c / lb

)

General

Margin: Asia PET to Px/MEG

(US

$ / To

n)

PET Margin (Asia)

2016

50

2017

PTA

PET

201

74 71 69 63 59 71 64 63 60 7280 81

232

237222

214200

15

260

212 210

2Q 4Q3Q

258

4Q

394

11 13 3Q

284

2Q1Q

240

1Q

230

14

210

276270 263

12

China

250

General

Polypropylene Margin (USA)

51

Margin: Polypropylene to Propylene (PGP)

2020

181818

23

28

30

26

20

15

111111 11

20132012 2014 3Q 1Q4Q 4Q 3Q2Q2Q 4Q1Q1Q 3Q2Q

(c / lb

)

2015 2016 2017

General

933

819

1,192

781

637647584

641704

985986

797

1,013

1,181

2,108

1,108

3Q2013 2Q1Q2Q1Q 3Q4Q2014 4Q 1Q 4Q20122011 3Q2Q

Margin: CPL Spot (Asia) to Contract Benzene (NA)

(US

$ / To

n)

Caprolactam Margin

52

2015 2016 2017

General

M&G Chemicals Overview

● Founded 1953 in Toronta, Italy

● Private company; no public debt or equity

● 20-yr comercial relationship w/Alpek(11% of Alpek sales)

PTA PET

Apple Grove (USA) 270

Altamira (Mexico) 560

Suape (Brazil) 550

Corpus Christi1 (USA) 864 600

About M&G Plant locations

Installed Capacity

1) Under construction; net of Alpek’s capacity reservation

Source: PCI

Altamira

Suape

Apple Grove

Corpus Christi1

53

General

Alpek’s exposure to M&G

54

US$M Guarantee

Capacity Reservation Corpus Christi 435 Corpus Christi assets (2nd lien)

Accounts Receivable 113 Unsecured

$90 M Loan 90 Corporate guarantees

M&G Mexico Loan (Acquired) 100 M&G Mexico PET plant in Altamira (1st lien)

M&G Mexico Loan 30 US $60 M secured credit facility

General

M&G’s Corpus Christi site capacity breakdown

420 Ktons

PTA1.3 M tons

M&G

850 Ktons

500 Ktons

M&G

600 Ktons

Pearl River

PET1.1 M tons

350 Ktons PTA

Corpus Christi Site (CC)

Raw materials

(e.g. Px, MEG, etc.)

Raw materials

(e.g. Px, MEG, etc.)

55

General

Non-recurring charges associated to M&G

56

Income Statement Balance Sheet

US$M2017

(ex-M&G)Non-rec.charges

2017

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) 158 106

Net income (loss) 214 (485) (271)

Profit (loss)attributable to controlling interest

162 (481) (319)

Net Debt 1,262 1,262

Net Debt / EBITDA 2.5 3.3

US$MDec-17

(ex-M&G)Non-rec.charges

Dec-17

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 26 97 123

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

General

North America PTA / PET capacity breakdown

57

Ktons USA Mexico Canada Total

Alpek 640 1,610 - 2,250

Indorama 1,050 - 600 1,650

BP 1,400 - - 1,400

Eastman 250 - - 250

Total 3,340 1,610 600 5,550

Ktons USA Mexico Canada Total

Alpek 1,495 185 144 1,824

Indorama 812 480 - 1,292

M&G 560 - 560

Nan Ya 445 - - 445

FENC1 270 - - 270

Total 3,022 1,225 144 4,391

PTA PET



2017 Capacities, 2017 M&As

North America2017 Installed Capacity

General

Alpek stock highlights (BMV: ALPEK)

Valuation 4Q15 4Q16 4Q17 4Q17 Proforma

2018G

Market Cap. (U.S.$ B) 3,113 2,193 2,951 2,951 2,859

Net Debt (U.S.$ M) 722 1,042 1,262 1,262 1,167

EBITDA LTM (U.S.$ M) 630 669 384 497 569

Enterprise Value / EBITDA 6.5 5.2 11.6 9.0 7.5

Price / Earnings 13.3 8.0 N/A 13.8 10.9

Price per Share (MXN) 25.98 21.10 26.50 26.50 26.0

Exchange Rate (MXN/USD) 17.67 20.35 19.00 19.00 19.25

2

1

3

0

6

5

4

2

5

0

6

1

4

3

S A OAJM MF NJNO S JDDAJ J

Daily Average Traded Shares & Value

2016

Daily Stock Price

(Peso

s)

20

15

30

25

40

35

JunMarDec Sep DecJun Sep

2016

Shares

Value ($)

(M Shares) (U.S. $ M)

58

20172017 2018

Documents

363n Corporativa Alpek ENG 4Q17 v21.3.pptx) · 2018. 3. 5. · (2,950 Kta) A Monterrey 160 B Altamira 1,000 640 240 C Salamanca 85 D Ocotlán 10 E Cosoleacaque 610 185 F Lerma 100