53
Corporate Presentation 3Q16

Corporate Presentation - Alpek

  • Upload
    others

  • View
    4

  • Download
    0

Embed Size (px)

Citation preview

Page 1: Corporate Presentation - Alpek

Corporate Presentation

3Q16

Page 2: Corporate Presentation - Alpek

This presentation contains, or may be deemed to contain, “forward-

looking 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.

v 10.4

16.4

Page 3: Corporate Presentation - Alpek

Index

• Business Overview

• Consolidated Financials

• Appendix

Page 4: Corporate Presentation - Alpek

Index

• Business Overview

• Consolidated Financials

• Appendix

Page 5: Corporate Presentation - Alpek

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

Page 6: Corporate Presentation - Alpek

Polyester (71% of Sales) Plastics & Chemicals (29% of Sales)

Alpek is a leading petrochemical company focused

on Polyester chain products, mainly PTA and PET

Source: Alpek estimates

(1) September 2016 LTM

(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.

Revenues1 US$ 4.8 Billion

EBITDA1 US$ 679 Million

Polypropylene Expandable Polystyrene

Capro-lactamPTA / PET

Polyester Fibers

Fertilizers & Specialty

Chemicals

Products

and Uses

Subsidiaries Grupo Petrotemex2 Indelpro3 Styropek Unimor

Polioles4

6

Page 7: Corporate Presentation - Alpek

Source: Alpek

Polyester Chain

Gasoline

Reformer Paraxylene

Crude Oil

Fibers

PET

PTA

MEGEthyleneCrackerEthane

Naphtha Ethylene Oxide

Polyester

7

Page 9: Corporate Presentation - Alpek

Alpek is the largest integrated polyester producer

in North America (PTA-PET)

Source: PCI

2015 Capacities, 2016 M&As

PTA(5,560 kta)

BP

Eastman

Indorama

NanYa

M&G

Indorama

41% 42%

PET(4,443 kta)

North America

2015 Installed Capacity

9

Page 10: Corporate Presentation - Alpek

Alpek’s installed capacity amounts to 5.8 M tons;

23 production facilities and ~5,000 employees

Source: Alpek estimates

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 1,000 640 165

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: 5,755 Kta 2,250 2,014 89 310 640 250 85 117

Corpus Christi

(2017)

PTA: 420 k tons

PET: 500 k tons

AB

CD EF

GIHJ

LMN

O

P

Q

R

K

Page 11: Corporate Presentation - Alpek

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

lye

ste

rP

las

tic

s &

Ch

em

ica

ls

11

Page 12: Corporate Presentation - Alpek

Alpek is investing in attractive organic projects to

boost profitability

Strategic Guidelines

Source:Alpek estimates

(1) Does not include 100 ktons additional supply rights recently acquired

(2) US $663 M invested up to date

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. PTA/PET Site (Corpus Christi)1 350 80 2017

4. Propylene Spheres (2) 20 10 2017

5. EPS Expansion Altamira 30 10 2017

6. Altamira Cogeneration 350 90 2018

7. Fiber Expansion Pearl River 30 20 TBD

Total ~ $1 B2 ~$250

8. Integrated MEG Plant (Mex) $1+ B 250 N/A

Page 13: Corporate Presentation - Alpek

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 /

PET1.3 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. PQS (1)

PTA 700 ktons

TBD Brazil US $385 MPET 450 Ktons

Fibers 90 ktons

(1) Subject to corporate and governmental approval

Page 14: Corporate Presentation - Alpek

2016 average Brent price was revised up to $45/bbl

Brent Crude Oil

2014 2015

● Inventory devaluation

● Inventory cost carryover

● Value of feedstock discounts

● Product price formulas

● Import parity

Impact on Alpek

14

2016

20

40

60

80

100

120

US$/Bbl

99 $/bbl

53 $/bbl

Orig. Guidance ($38/bbl)

New Guidance ($45/bbl)

Page 15: Corporate Presentation - Alpek

Alpek benefited from strong drivers in 1H16 which

moderated in 2H16

15

Segment 1H16 2H16 2017 Preview

Polyester

Favorable oil price environment

Gradual Asian margin recovery

PTA price formula increase

(April 2015)

Challenging oil price environment

in 3Q16; recovery in 4Q16

Reference Asian margin retreat

Hurricane Matthew

Pressure on U.S. PET margins in

anticipation to Corpus startup

Favorable oil price environment

Gradual Asian margin recovery

expected to resume

Plastics &

Chemicals

(P&C)

Record-high PP margins

Strong EPS margins and

acquisition in March 2015

Sequential PP and EPS margin

decrease vs 1H16

Moderate PP and EPS margin

reduction vs 2H16

Page 16: Corporate Presentation - Alpek

2016 Guidance (2Q16 revision to EBITDA)

4,1503,9373,9313,874

201520142013

+5%

2016G

Sales Volume Revenues

EBITDA CAPEX

Source: Alpek estimates

700630

434

572

+11%

2013 2016G20152014

320317320

179

+1%

2016G201520142013

(Kto

ns

)

(US

$ M

illio

n)

(US

$ M

illio

n)

(US

$ M

illio

n)

4,8005,284

6,4717,028

-9%

2016G201520142013

% Sales 8.1% 14.6%6.7% 11.9%

16

Page 17: Corporate Presentation - Alpek

Index

• Business Overview

• Consolidated Financials

• Appendix

Page 18: Corporate Presentation - Alpek

Sales Volume and Revenues

78%

22%

3,931

2016 (1)

3,874

78%

2015

24%

76%

22%

2014

3,938

2013

77%

3,937

23%

0%

Sales Volume Revenues

-8%24%

29%

4,874

2016 (1)

6,471

2013 2015

76%

73%

27%

2014

73%

27%

7,028

5,284

71%

(Kta

)

(US

$ M

illi

on

)

Polyester Plastics & Chemicals

Source: Alpek estimates

(1) September 2016 LTM 18

Page 19: Corporate Presentation - Alpek

Income Statement Accounts

535

481

286

228

2016 (2)

+11%

201520142013 (1)

Operating Income EBITDA

Financial Cost, Net (3) Majority Net Income

Source: Alpek estimates

(1) Includes US$173 million asset impairment charge from Cape Fear plant closure

(2) September 2016 LTM

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

134

116111

91

+16%

201520142013 2016 (2)

199

175

65

21

+14%

2016 (2)201520142013

(US

$ M

illio

n)

(US

$ M

illio

n)

(US

$ M

illio

n)

(US

$ M

illio

n)

11.0%9.1%3.2% 4.4%% Sales % Sales

4.1%3.3%0.3% 1.0%% Sales

679630

434

572

20152013 2016 (2)2014

+8%

13.9%11.9%8.1% 6.7%

19

Page 20: Corporate Presentation - Alpek

Balance Sheet Accounts

670632

685

915

2014

+6%

2013 2015 2016 (2)

Net Working Capital(1) Property, Plant and Equipment

Net Debt(3) Stockholders’ Equity

Source: Alpek estimates

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

(2) Septiembre 2016

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

1,8721,8201,8611,889

+3%

2016 (2)2014 20152013

915

722715766

2014 2015 2016 (2)

+27%

2013

2,0312,0052,0282,071

2013

+1%

2014 2015 2016 (2)

(US

$ M

illio

n)

(US

$ M

illio

n)

(US

$ M

illio

n)

(US

$ M

illio

n)

514549 47NWC Days

20

Page 21: Corporate Presentation - Alpek

Financial Ratios and Other Indicators

Interest Coverage(2)Net Debt / EBITDA

CAPEX

Source: Alpek estimates

(1) September 2016 LTM

(2) Interest coverage= EBITDA / Net financial expenses

10.810.7

6.5

2014

7.1

2013 2015 2016 (1)

1.3

1.1

1.6

1.3

2013 2014 2015 2016 (1)

438

317320

179

20142013 2015 2016 (1)

(Tim

es

)

(Tim

es

)

(US

$ M

illio

n)

173160

110

148

2013 2014 2016 (1)2015

EBITDA / Ton

(US

$ / T

on

)

21

Page 22: Corporate Presentation - Alpek

Alpek Consolidated Debt Profile

September 2016

● Gross Debt: U.S. $1.155 billion● Net Debt: U.S. $915 million ● 99% of our debt is denominated in US dollars(1)

1. A small portion of debt is denominated in ARS

300

650

127

803450

240

16 17 2018 22 232119Cash

22

Page 23: Corporate Presentation - Alpek

Index

• Business Overview

• Consolidated Financials

• Appendix

Page 24: Corporate Presentation - Alpek

Operating & Financial Highlights (3Q16)

Alpek

• 3Q16 Consolidated EBITDA of U.S. $157 million, including a U.S. $1 million non-cash inventory

devaluation charge and a U.S. $6 million insurance claim cash gain

• Acquired controlling interest in Selenis Canada Inc., a 144 Kty PET plant in Montreal, Quebec

• Solid balance sheet: 1.3x Net Debt / LTM EBITDA and 10.8x Interest Coverage

Polyester

• 3Q16 Polyester EBITDA of U.S. $83 million, including a U.S. $7 million non-cash inventory

devaluation charge and a U.S. $6 million insurance claim gain

• Results impacted by: i) lower-than-expected oil/feedstock price environment, ii) an extended

scheduled PET shutdown in Argentina, iii) PET sales mix, and iv) weak polyester fiber demand

Plastics &

Chemicals

(P&C)

• 3Q16 P&C EBITDA of U.S. $73 million, including a U.S. $6 million non-cash inventory gain due

to higher propylene prices

• Polypropylene margins decreased as expected vs. 2Q16, still remain above historical levels

• Better-than-expected EPS performance resulting from robust demand and margins

24

Page 25: Corporate Presentation - Alpek

Latest Quarter Results

Source: Alpek

(1) Times: Last 12 months.

Alpek: Selected Financial Information

25

(%) 3Q16 vs.

3Q16 2Q16 3Q15 2Q16 3Q15 YTD16 YTD15 Ch.%

Total Volume (ktons) 998 981 980 2 2 2,967 2,970 -

Polyester 757 743 751 2 1 2,254 2,282 (1)

Plastics & Chemicals 241 239 230 1 5 713 688 4

Consolidated Revenues 1,236 1,237 1,346 - (8) 3,655 4,065 (10)Polyester 885 871 993 2 (11) 2,593 2,956 (12)

Plastics & Chemicals 351 366 354 (4) (1) 1,062 1,109 (4)

Consolidated EBITDA 157 208 156 (25) 1 536 488 10Polyester 83 110 79 (25) 6 267 273 (2)

Plastics & Chemicals 73 98 76 (25) (4) 270 211 28

Profit Attributable to Controlling Interest 50 48 38 4 30 170 146 16

CAPEX and Acquisitions 128 110 35 17 265 270 150 81

Net Debt 915 910 656 - 39

Net Debt/LTM EBITDA(1) 1.3 1.3 1.2

Interest Coverage(1) 10.8 11.1 9.2

Page 26: Corporate Presentation - Alpek

Latest Quarter Results

Sales Volume Revenues

EBITDA Majority Net Income

Source: Alpek

(Kto

ns

)

(US

$ M

illio

n)

(US

$ M

illio

n)

(US

$ M

illio

n)

9801,000989984 998981988967

3Q1Q4Q 2Q

156

195

137

71

157

208

171

143

2Q4Q 1Q 3Q

1,3461,3981,321

1,646

1,2361,2371,1821,219

1Q 2Q4Q 3Q

38

83

25

-29

5048

72

29

3Q2Q1Q4Q

-1.9% -11.5%

6.7% -42.1%

Ch.% Ch.%

Ch.% Ch.%

1.8% 8.2%

0.6% 29.6%

-1.6% -25.9%

100.1% 198.7%

(US

$ M

illio

n)

-o.1% -10.5%

25.5% 189.9%

262014 2015 2016

Page 27: Corporate Presentation - Alpek

Latest Quarter Results

Source: Alpek

Alpek: Net Income

Alpek: Cash Flow

27

(%) 3Q16 vs.

3Q16 2Q16 3Q15 2Q16 3Q15 YTD16 YTD15 Ch.%

EBITDA 157 208 156 (25) 1 536 488 10

Net Working Capital & Others 37 (22) 76 264 (52) (100) (7) (1,307)

Capital Expenditures & Acq. (128) (110) (35) (17) (265) (270) (150) (81)

Financial Expenses (18) (18) (19) (2) 1 (41) (58) 29

Income tax (23) (45) (20) 49 (11) (142) (41) (248)

Dividends - (69) (12) 100 100 (205) (150) (36)

Payment affiliated companies (4) 52 - (108) (100) 60 (2) 2,927

Other Sources / Uses (25) (3) (19) (819) (29) (32) (22) (49)

Decrease (Increase) in Net Debt (4) (7) 126 35 (104) (193) 59 (429)

(%) 3Q16 vs.

3Q16 2Q16 3Q15 2Q16 3Q15 YTD16 YTD15 Ch.%

Consolidated Net Income 65 70 48 (8) 34 240 190 26

Non-Controlling Interest 15 22 10 (34) 54 70 44 58

Controlling Interest 50 48 38 4 30 170 146 16

Earnings per Share (U.S. Dollars) 0.02 0.02 0.02 4 30 0.08 0.07 16

Avg. Outstanding Shares (Millions)* 2,118 2,117 2,118 2,118 2,118

Page 28: Corporate Presentation - Alpek

Comparable EBITDA

28

Reported EBITDA 2014 2015 2016G 2016G2 YTD15 YTD16

Polyester 270 344 350 380 273 267

Plastics & Chemicals 159 284 280 320 211 270

TOTAL 434 630 630 700 488 536

Comparable EBITDA 2014 2015 2016G 2016G2 YTD15 YTD16

Polyester 341 378 350 376 285 265

Plastics & Chemicals 159 273 280 314 200 256

TOTAL 505 654 630 690 488 520

Adjustments* 2014 2015 2016G 2016G2 YTD15 YTD16

Polyester 71 35 - (4) 12 (2)

Plastics & Chemicals - (11) - (6) (11) (14)

TOTAL 71 24 - - - (16)

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

Page 29: Corporate Presentation - Alpek

New Guidance 2016

2016 Ch.% (vs. 2015)

Volume (Ktons) 4,150 5

Net Sales (Million) U.S. $4,800 (9)

EBITDA (Million)1 U.S. $700 11

Capex (Million) U.S. $320 1

2016 New Consolidated Guidance

1) Does not include any impact from inventory valuation.29

Page 30: Corporate Presentation - Alpek

Breakdown of revised 2016 EBITDA Guidance

30

40

30

700

630

2016G2P&CPolyester2016G

1624239700

630

2016G2Other

3

EPSPoly

propylene

Higher

Avg. Oil

Price

Inventory

Gain

1H16

2106G

By Business Segment

By Main EBITDA Driver

(US

$ M

illio

n)

17380

2H16E

320

Inventory

Gain (1H16)

9

Plastics &

Chemicals

67

Polyester1H16

1H16 vs. 2H16E

(US

$ M

illio

n)

Page 31: Corporate Presentation - Alpek

Polyester Chain

PTA, 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 2016 (1)

US$ 3,477 Million

Revenues 2016 (1)

US$ 337 Million

General Information

Source: Alpek

(1) September 2016 LTM 31

Pearl River, MI

PET

Cedar Creek, NC

PET, R-PET

Columbia, SC

PTA & PET

Cooper River,

SC

PET & PSFMonterrey, N.L.

Headquarters

Polyester Filament

Cosoleacaque, Ver.

PTA & PET

Altamira, Tamps.

PTA

Selenis, Quebec.

PET

ARG

Zárate, Arg.

PET

Pacheco, Arg.

PET

Page 32: Corporate Presentation - Alpek

Plastics & Chemicals

PP, 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 2016 (1)

US$ 1,397 Million

Revenues 2016 (1)

US$ 342 Million

Source: Alpek

(1) September 2016 LTM

Ocotlán, Jal.

Nylon 6

Monterrey, N.L.

Headquarters,

Lerma, Edo. De Mex.

Specialty Chemicals

Altamira, Tamps.

PP, EPS

Salamanca, Gto.

CPL and Fertilizers

Guaratingueta, Brazil

EPS

Santiago, Chile

Other

Puerto Montt, Chile

Other

General Lagos, Argentina

EPS

32

Concon, Chile

EPS

Page 33: Corporate Presentation - Alpek

Alpek is managed by an experienced team focused

on delivering value to shareholders

Source: Alpek

Po

lye

ste

rP

las

tic

s&

Ch

em

ica

ls

Name PositionYears with

Alpek / Alfa

José de Jesús Valdez Simancas CEO 40

Eduardo Escalante Castillo CFO 29

Felipe Garza Medina President, PTA 39

Jorge Young Cerecedo President, PET and PSF 26

Jorge González Escobedo President, Polyester Filaments 42

Alejandro Llovera Zambrano President, Polypropylene 31

José Luis Zepeda Peña President, EPS and Chemicals 30

Gustavo Talancón Gómez President, CPL and Ammonium Sulfate 27

Po

lye

ste

rP

las

tic

s&

Ch

em

ica

ls

33

Page 34: Corporate Presentation - Alpek

Plastics & Chemicals

Organization Chart

Source: Alpek

Polyester Chain

Felipe GarzaPresident, PTA

Jorge YoungPresident, PET

and PSF

Alejandro Llovera

President, Polypropylene

Jorge GonzálezPresident, Polyester Filaments

Eduardo Escalante

CFO

José de Jesús ValdezCEO

José Luis Zepeda

President, EPS and Chemicals

Gustavo Talancón

President, CPL and Ammonium

Sulfate

34

Page 35: Corporate Presentation - Alpek

Polypropylene Chain

Source: Alpek

Propylene

Refinery

Cracker

Polypropylene

35

Page 36: Corporate Presentation - Alpek

Gasoline

Reformer Benzene

Refinery

Crude Oil

EPS

EPS & CPL Chain

Source: Alpek

Ethylene

Styrene

Cyclohexane Caprolactam

(CPL)

Cracker

Ammonia

36

Page 37: Corporate Presentation - Alpek

+ +

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

Page 38: Corporate Presentation - Alpek

Alpek has grown at a 10% 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)

CabelmaPET

Coso 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)

DMT

Expansion EPS

Expansion

Polypropylene

expansion

EPS acquisition

(Concon)

Source: Alpek

Sales Volume 1986-2013(Index: 1986=100)

38

Page 39: Corporate Presentation - Alpek

Organic growth and acquisitions position Alpek as

a leading PTA and PET producer in North America

2004(5,500 Kta)

2015(5,560 Kta)

2004 (3,800 Kta)

2015(4,443 Kta)

PTA – Installed Capacity(1)

PET – Installed Capacity(1)

InvistaInterquisa

Eastman

BP

Others

M&G

Indorama

NanYa

Wellman

Invista

Eastman

NanYa

M&G

Indorama

Source: PCI

(1) In North America

2015 Capacities, 2016 M&As

29%

41%

8%

42%

39

BP

Eastman

Indorama

Page 40: Corporate Presentation - Alpek

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

Alpek: Proprietary and Third-Party Technologies

Source: Alpek

40

Page 41: Corporate Presentation - Alpek

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 emissions

Source: Alpek

PTA / PET: Process Diagram

41

Page 42: Corporate Presentation - Alpek

Power cogeneration overview

Contract-based

power

customers

Ga

s

turb

ine

Heat Recovery

Cogeneration plant

Ste

am

turb

ineNatural 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

Page 43: Corporate Presentation - Alpek

Alpek signed an IntegRex® PTA license and PTA-

PET sourcing agreement with M&G

• Integrated PTA - PET site in Corpus Christi, TX

• Capacity: 1.2 M tons PTA and 1.1 M tons PET

• Wholly owned and operated by the M&G Group

• ~U.S.$ 1B estimated investment (green field)

• Largest IntegRex® PTA facility in the world

• Expected to begin operations in 2017

License fee ($)

U.S.$ 350M

400 Ktons per year

of integrated PET

PTA-PET

Sourcing

Agreement

IntegRex®

PTA License

Agreement

Corpus Christi Site

43

Page 44: Corporate Presentation - Alpek

The sourcing agreement provides Alpek with

unique access to M&G’s Corpus Christi site

(1) Additional supply rights acquired in 4Q15

336 Ktons+84 Ktons1

PTA1.2 M tons

M&G864 Ktons

400 Ktons+100 Ktons1

M&G600 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.)

44

Page 45: Corporate Presentation - Alpek

Alpek acquires Polioles’ and BASF’s EPS business

activities in North and South America

Polioles’ EPS business activities

EPS site in Altamira, Mexico

Polyurethane (PU) business activities

Selected assets in Lerma, Mexico

EPS sales & distribution in NA/SA

EPS site in Guaratingueta, Brazil

EPS site in General Lagos, Argentina

Aislapol, S.A. (Chile)

Industrial & Specialty Chemicals

Alpek/BASF JV

45

Page 46: Corporate Presentation - Alpek

Styropek is the leading EPS player in the Americas

Sites

Sales office

Warehouses

• Largest EPS capacity in the Americas (~250 ktons)

• Only EPS producer covering North and South America

Styropek: Locations

46

Page 47: Corporate Presentation - Alpek

Alpek has effectively transformed its EPS business

47

The Americas’ installed EPS capacity 2017ETotal: 600 ktons

Flint Hills

Nexkemia42%

Others

8%

Nova18%

17%

15%

Alpek

(Styropek)

32575

23065

165

20

2018Altamira

Expansion

Concon

Plant

2015Acquisition2014

Kta

Alpek: EPS capacityExpandable Polystyrene (EPS)

Page 48: Corporate Presentation - Alpek

Alpek acquired a 20 Kta EPS plant in Concon, Chile

from BASF

48

Alpek: EPS production facilities Concon Plant

• Capacity: 20 Kta (EPS)

• Location: Concon, Chile (BASF site)

• Closing: March 31, 2016Altamira. México

Guaratingueta, Brasil

Santiago, Chile

Puerto Montt, Chile

General Lagos, Argentina,

Concón, Chile

Styropek Plants (230 Kta)

Concon Plant (20 Kta)

Page 49: Corporate Presentation - Alpek

Alpek acquired a controlling interest in Selenis

Canada Inc.

49

• 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

Page 50: Corporate Presentation - Alpek

U.S. PET antidumping case

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 1 % 8 %

(1) 154% only for JBF Industries Limited

Final Rates

50

• Rates applicable for a minimum period of five years.

• Trade orders could be renewed in five-year increments

Page 51: Corporate Presentation - Alpek

871920

838882

948

1,168

9701,014

1,6411,6351,708

926

4Q’162011 1Q’162Q’15 4Q’15 3Q’162Q’163Q’151Q’1520132012 2014

Px USA Contract Price

(US

$ / To

n)

Paraxylene (Px) Price

51

Page 52: Corporate Presentation - Alpek

205202215

200208210217213

235236246

394377

2014 4Q3Q 4Q 1Q 2Q2Q1Q2013201220112010 3Q

Margin: China PET to Px/MEG

(US

$ / To

n)

PET Margin (Asia)

2015 2016

52

Page 53: Corporate Presentation - Alpek

Alpek stock highlights (BMV: ALPEK)

Valuation 4Q13 4Q14 4Q15 4Q16

Market Cap. (U.S.$ B) 4.600 3.372 3.068 2.463

Net Debt (U.S.$ M) 766 715 722 915

EBITDA LTM (U.S.$ M) 572 434 630 6791

Enterprise Value / EBITDA 9.8 10.0 6.4 5.3

Price / Earnings 24.4 32.5 13.1 8.7

Price per Share (MXN) 28.29 22.03 24.26 25.0

Exchange Rate (MXN/USD) 13.03 13.84 16.75 21.50

6

3

5

4

5

1

3

2

0 0

2

1

4

AugMay SepJulJunAprMarFebJanDec Nov DecOct

Daily Average Traded Shares & Value

2016

Daily Stock Price

(Pe

so

s)

32

36

20

34

26

28

24

30

22

AugAprFeb DecOctJunDec

2016

Performance ALPEK IPC DJI

December 2016 -12.5% 0.7% 3.3%

YTD (Dec-16) 2.4% 6.2% 13.4%

LTM (Dec-16) 2.4% 6.2% 13.4%

Shares

Value

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

(1) Alpek 3Q16 LTM EBITDA 53