General
Corporate Presentation1Q19
General
This presentation contains, or may be deemed to contain, “forward-looking statements”. By theirnature, forward looking statements involve risks and uncertainties because they relate to eventsand 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 theforward-looking statements set out herein, possibly to a material degree.
27.1
General
Business Overview
Consolidated Financials
Appendix
Index
3
General
Business Overview
Consolidated Financials
Appendix
Index
4
General
Investment Highlights
5
Market-leading position in the Americas
High-return organic projects and accretive M&A
Attractive consumer-oriented product portfolio
Low cost producer with leading technology
Experienced management team
Strong free cash flow and financial performance
1
2
3
4
5
6
General
About Alpek
6
1Q’19 LTM
• US $7.1 B Revenues
• US $1,022 M EBITDA
(US $781 M Comparable EBITDA)
• 26 Plants
• ~7.0 M Tons/Yr Installed Capacity
• ~5,800 Employees
General
Leading petrochemical company
7
• #1 PTA-PET producer in America
• #2 PET producer Worldwide
• #1 EPS producer in America
• Sole PP and CPL producer in Mx
Polyester
(PTA, PET, rPET, Fibers)75%
Polypropylene (PP)(2) 10%
Expandable
Polystyrene (EPS)8%
Caprolactam (CPL)
& Fertilizers3%
Specialty & Industrial
Chemicals(3) 2%
% Sales by product(1)
(1) 1Q19 LTM
(2) 49% is owned by Lyondell Basell Industries Holdings B.V.
(3) 50% minus one share is owned by BASF de Mexico S.A. de C.V.
Market position
75%Polyester
23%Plastics &
Chemicals
General
Polyester Chain
8
Gasoline
Reformer Paraxylene
Crude Oil
Fibers
PET
PTA
MEGEthyleneCrackerEthane
Naphtha Ethylene
Oxide
Polyester
1
1) 0.84 ton Ethylene per ton Ethylene Oxide
2) 0.72 ton Ethylene Oxide per ton MEG
3) 0.66 ton Paraxylene per ton PTA
4) 0.85 ton PTA per ton PET
5) 0.35 ton MEG per ton PET
2
3
4
5
4
General
Consumer end-markets
9
Sales Geography 2018(US$ 6,991 Million )
Sample End Users by Industry
Food Personal care Textiles
USA
45%Canada
3%
LatAm
18%
Europe
3%Asia and Others
1%
Food and
Beverages
67%
Consumer
Goods
22%
Textiles
7%
Construction
4%
Source: Alpek estimates
Kta: Thousand tons per year
Beverage
México
30%
Volume by Industry 2018(4,402 Kta)
General
Integrated polyester producer (PTA-PET)
10
2004 2018
PTA & PET Capacity Share in the Americas
PTA
PET
Alpek
29% Alpek
47%
Alpek
44%
8%
Source: WoodMackenzie, Alpek
General
Strategic priorities
11(1) Note
Source:
Strengthen
Core Business
Sustained
Growth
Product
Sustainability
Strengthen
Core
Business
• Ensure profitability throughout industry cycles
• Enhance position in the Americas
• Secure competitive feedstock/power supply
Growth
• Deliver returns on recent investments (U.S. $1B)
• Pursue vertical integration
• Strategic and opportunistic M&A
PET
Sustainability
• Expand PET recycling capacity
• Enhance recycled content offering
• Support customer initiatives
Strengthen
Core
Business
Sustained
Growth
Product
Sustainability
General
2018 Results and 2019 Guidance
12
Sales Volume (K Ton) Revenues (US$M)
EBITDA (US$M) CAPEX (US$M)
3,937 3,938 4,012
4,000 4,038
2017 20182015 2016 2019G
4,4024,734
+8%
5,2844,838
5,231
6,497 6,440
20162015 20182017 2019G
6,991 7,248
+4%
630 669
384
220
200
1,063
2015 2016
718
2018
843
2017 2019G
918
-14%
310
2015 2016 2017 2018 2019G
317 345
236
826
-63%
% Sales 11.9% 15.2%13.8% 7.3% 15.2%
Suape/
Citepe &
Corpus
Suape/
Citepe
Suape/
Citepe
Business
Combination Cogen.
Sale
General
EBITDA & Leverage
13
LTM EBITDA(US$ M)
Net Leverage (Net Debt/EBITDA)(Times)
407
564
834
1,0631,022
1Q18 2Q18 3Q18 1Q194Q18
3.1
2.9
1.91.7
2.2
1Q194Q183Q181Q18 2Q18
General
EBITDA: 1Q19 vs 1Q19G
14
Alpek: EBITDA(US$ M)
US$M 1Q19G 1Q19
Polyester 112 84
Plastics & Chemicals 39 58
Others 3 5
Comparable 154 148
Extraordinary items - (8)
Inventory Valuation - (19)
Others - 11
Reported 154 140
154
2819
148
1911
140
1Q19
Comparable
3
1Q19G Polyester OthersP&Ch Inventories Others 1Q19
Reported
General
Relevant events – Progress and status (1Q19)
15
• U.S. $801M sale of Cosoleacaque and Altamira power cogeneration plants
• Agreement ratified by ContourGlobal board; closing expected by end of 1H19
• Altamira plant on track to begin commercial operations during 2Q19
• Use of proceeds: i) Projects, ii) Debt reduction, iii) Dividends
• Corpus Christi project acquisition from M&G USA
• JV between Alpek / Indorama / FENC completed acquisition on December 28,2018
• Alpek contributed US$266M cash + US$133M non-cash (Total value: US$1.199B)
• Investment and timeline to complete construction by end of 2019
• Petroquímica Suape and Citepe (Suape/Citepe) acquisition in Brazil
• Consolidated in Alpek’s results as of May 1, 2018; US$435M purchase price
• Successful integration and positive EBITDA contribution
• M&G Mexico restructure process
• Normalized M&G Mexico operations (supported by Alpek)
• “Solicitud de concurso mercantil” with pre-arranged restructuring plan accepted by courts; ruling expected by end of year
• Recycled PET acquisition closed in January (Perpetual)
• Installed capacity (rPET): 45 Ktons, 60% increase in Alpek rPET capacity
General
Business Overview
Consolidated Financials
Appendix
Index
16
General
Income Statement Accounts
17
Operating Income/Loss (US$M) EBITDA (US$M)
Financial Cost, Net(2) (US$M) Majority Net Income/Loss (US$M)
532
220 220
2016
1,086
201912017 2018
1,032
3.6%11.0%% Sales 14.5%
-188
Ex
M&G
360
669
384
843 802
220220
201912016
1,063
20182017
1,022
497
% Sales 15.2%7.3%13.8% 14.4%
133
93
141159
95
2016 2017 2018 20191
188
198
220220
136136
2016
697
2017 201912018
642
162
10.0%-6.1% 9.0%4.1%% Sales
-319
Source: Alpek estimates
(1) 1Q19 LTM
(2) Financial Cost, Net = Net Financial Expenses + Fx Gains (Losses) + Interest Rate Swaps + Gas & Comm. Derivatives
M&G Recovery
Business
Combination
Business
Combination
15.5%
Ex
M&G
Ex
M&G
Ex
M&G
Business
Combination
General
Balance Sheet Accounts
18
Net Working Capital(1) Property, Plant and Equipment
Net Debt(3) Stockholders’ Equity
(US
$ M
illio
n)
(US
$ M
illio
n)
(US
$ M
illio
n)
(US
$ M
illio
n)
694
497
955 967
20182016 2017 20192
464153 44NWC Days
1,9552,105
2,390 2,430
20192201820172016
1,0421,262
1,832
20172016 2018 20192
2,2002,019
1,604
2,1932,072
201922016 20182017Source: Alpek estimates
(1) Net Working Capital = Accounts receivable + Other accounts receivable + Inventories - Suppliers - Other accounts payable and accrued expenses
(2) March’19
(3) Net Debt = Bank loans and notes payable + Current portion of long term debt + Long term debt – Cash
IFRS
General
Sales Volume and Revenues
19
Sales Volume Revenues
(Kta
)
(US
$ M
illi
on
)
Polyester Plastics & Chemicals
24%
79%76%
2016
21%
23%
77%
2017 2018
20%
80%
20191
4,4734,402
3,938 4,012
+10%
71%
29%
74%
2016
29%
75%
71%
2017
25%
4,838
2018
23%
20191
5,231
6,991 7,101
+34%
Source: Alpek estimates
(1) 1Q19 LTM
General
Financial Ratios and Other Indicators
20
Net Debt / EBITDA (Times) Interest coverage(1) (Times)
EBITDA / Ton (US$) CAPEX and Acquisitions (US$M)
1.6
2.5
1.72.2
2016 2017 2018 20192
3.3
2.2
2.7
Ex-M&G
7.0
4.8
7.86.9
201922016
9.9
2017 2018
6.2
8.8
Ex-M&G
170
192 179
201922016 2017 2018
124
242229
Ex-M&G
345
236
125 154
435 435
266 250
2016 201922017 2018
839826
Suape/Citepe
Source: Alpek estimates
(1) Interest coverage= EBITDA / Net financial expenses
(2) 1Q19 LTM
Ex-Business
Combination
Ex-Business
Combination
Ex-Business
Combination
CC Polymers
General
Alpek Consolidated Debt Profile - March 2019
• Net Debt: U.S. $2,200 million / Gross Debt1: U.S. $2,430 million
• Available Committed Credit Lines: U.S. $638 million (Total: U.S. $1.210 billion)
• 99% of our debt is denominated in US dollars2
21
230
666
171
385
715
300
Cash 2019 20212020 20232022
(1) Excludes leases / documents
(2) A small portion of debt is denominated in ARS
(US
$ M
illio
n)
General
Dividends paid to shareholders
22
(US
$ M
illio
n)
100114
95111
143
143
143
20162013 20152014(1) 20182017 2019
286
(1) Paid in December 2013
After
Cogeneration
Sale
General
Business Overview
Consolidated Financials
Appendix
Index
23
General
Latest Quarter Results
24
Alpek: Selected Financial Information
Source: Alpek
(1) Times: Last 12 months
(%) 1Q19 vs.
1Q19 4Q18 1Q18 4Q18 1Q18
Total Volume (ktons) 1,087 1,061 1,016 2 7
Polyester 857 851 787 1 9
Plastics & Chemicals 230 210 229 9 -
Consolidated Revenues 1,642 1,758 1,532 (7) 7
Polyester 1,239 1,295 1,109 (4) 12
Plastics & Chemicals 376 400 423 (6) (11)
Consolidated EBITDA 140 369 181 (62) (23)
Polyester 80 316 111 (75) (28)
Plastics & Chemicals 54 52 69 5 (22)
Profit Attributable to Controlling Interest 27 393 82 (93) (67)
CAPEX and Acquisitions 69 262 56 (74) 23
Net Debt 2,200 1,832 1,270 20 73
Net Debt/LTM EBITDA(1) 2.2 1.7 3.1
Interest Coverage(1) 8.8 9.9 4.8
General
Latest Quarter Results
25
Sales Volume (K Ton) Revenues (US$M)
EBITDA (US$M) Majority Net Income (US$M)
1,038 1,012 975 1,016
1,151 1,1741,061 1,087
1Q2Q 3Q 4Q
8.8%Ch.% 7.0%10.9% 16.0%
1,306 1,312 1,3211,532
1,7591,941
1,7581,642
3Q2Q 4Q 1Q
33.1%Ch.% 7.2%34.8% 48.0%
162.8%Ch.% -22.8%191.1% 8,358.8% 1,399.1%Ch.% -67.3%473.8% 120.0%
82
3
141
181
239274
369
140
1Q2Q 4Q3Q
25
-400
-30
82142
80
393
27
1Q3Q2Q 4Q
2018 2019Source: Alpek
M&G
Business
Comb.
Business
Comb.
M&G Recovery
220 220
136
2017
General
Latest Quarter Results
26
Alpek: Cash Flow
Alpek: Net Income
Source: Alpek
(%) 1Q19 vs.
1Q19 4Q18 1Q18 4Q18 1Q18
EBITDA 140 369 181 (62) (23)
Net Working Capital & Others (24) (45) (85) 47 72
Capital Expenditures & Acq. (69) (262) (56) 74 (23)
Financial Expenses (31) (28) (22) (11) (40)
Income tax (30) (17) (7) (82) (308)
Dividends (179) (24) - (641) (100)
Other Sources / Uses (176) (221) (18) 21 (892)
Decrease (Increase) in Net Debt (369) (228) (7) (61) (4,957)
(%) 1Q19 vs.
1Q19 4Q18 1Q18 4Q18 1Q18
Consolidated Net Income 40 402 103 (90) (61)
Non-Controlling Interest 13 10 21 31 (38)
Controlling Interest 27 393 82 (93) (67)
Earnings per Share (U.S. Dollars) 0.01 0.19 0.04 (93) (67)
Avg. Outstanding Shares (Millions)* 2,118 2,118 2,117
General
EBITDA: 2018 vs 2019G
27
Alpek: EBITDA(US$ M)
US$M 2018 2019G
Polyester 529 523
Plastics & Chemicals 275 191
Comparable 804 7181
Extraordinary items 259 200
Inventory Valuation 41 -
Business Combination 220 -
Cogeneration Sale - 200
Others (2) -
Reported 1,063 918
1,063
918220
39
84 6 5
200
2018 Business
Comb.
OthersInventory
& others
P&Ch2018
Comp.
Polyester 2019
Comp.
Cogen.
Sale
2019G
718
804
(1) Comparable EBITDA includes profits (US $5 M) from other activities such as natural gas sales
General
EBITDA: 2018 vs 2017
28
Alpek: EBITDA(US$ M)
US$M 2017 2018
Polyester 234 529
Plastics & Chemicals 229 275
Comparable 462 804
Extraordinary items (79) 259
Inventory Valuation 22 41
Business Combination - 220
M&G Provision (113) -
Others 12 (2)
Reported 384 1,063
384
462
804
1,063
113
295
46
220
39
P&Ch
35
PolyesterInventory
& others
M&G A/R
Provision
2017 2017
Comp.
2018
Comp.
Business
Comb.
Inventory
& others
2018
General
2018 / 2017 Net Income includes extraordinary items
29
US$M2017
Proforma
Extraord.
items
2017
Reported
2018
Proforma
Extraord.
items
2018
Reported
Operating Income 360 (548) (188) 671 415 1,086
Intangible asset impairment (435) 195
A/R Provision (113) -
Business combination - 220
Financial cost, net (93) (95) (188) (141) - (141)
Taxes (52) 158 106 (119) (59) (178)
Net income (loss) 214 (485) (271) 409 356 765
General
Comparable EBITDA and 2019 Guidance
30
Reported EBITDA 2015 2016 2017 2018 2019G 1Q19 1Q18
Polyester 344 349 147 788 723 80 111
Plastics & Chemicals 284 322 237 276 191 54 69
TOTAL 630 669 384 1,063 9181 140 181
Comparable EBITDA 2015 2016 2017 2018 2019G 1Q19 1Q18
Polyester 378 331 234 529 523 84 102
Plastics & Chemicals 273 308 229 275 191 58 69
TOTAL 654 637 462 804 7181 148 170
Adjustments* 2015 2016 2017 2018 2019G 1Q19 1Q18
Polyester (35) 18 (87) 258 200 (4) 10
Plastics & Chemicals 11 14 8 1 - (4) 1
TOTAL (24) 32 (79) 259 200 (8) 10
*Adjustments: Inventory and non-operating, one-time (gains) losses
(1) EBITDA includes profits (US $5 M) from other activities such as natural gas sales
General
Alpek’s installed footprint amounts to 7.1 M tons 26 production facilities and ~5,800 employees across 6 countries
31
Location of Production Sites Installed Capacity Breakdown (Kta)
AB
CD EF
GIHJ
M
NO
P
Q
R
S
L
T
Site PTA PET rPET Fibers PP EPS CPL Other
Mexico
(3,030 Kta)
A Monterrey 160
B Altamira 1,000 640 240
C Salamanca 85
D Ocotlán 10
E Cosoleacaque 610 185
F Lerma 100
USA
(2,358 Kta)
G Cedar Creek 170 55
H Cooper River 170 150
I Columbia 640 725
J Pearl River 430
K Richmond 45
Canada L Selenis 144
Argentina
(225 kta)
M Zárate 190
N Pacheco 15
OGeneral
Lagos19
Brazil
(1,226 kta)
P Guaratingueta 46
Q Ipojuca 640 450 90
Chile
(27 Kta)
R Santiago 5
S Puerto Montt 2
T Concon 20
Total Capacity1: 7,036 Kta 2,890 2,464 115 400 640 325 85 117Source: Alpek estimates
Kta: Thousand tons per year
(1) Includes industrial and specialty chemicals and recycled PET capacities
K
General
Alpek has developed a leading position in every product of its portfolio
32
Alpek: Industry Position
Industry Position Comments
PTA #1 in the Americas • 47% est. installed capacity share in the Americas
PET#1 in the Americas
#2 Worldwide• 44% est. installed capacity share in the Americas
Fibers #2 in the Americas1 • 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
• 42% est. installed capacity share in the Americas
CPL Only producer in Mexico • Among top 3 lowest cost producers worldwide
Po
lye
ste
rP
las
tic
s &
Ch
em
ica
ls
Source: PCI and Alpek estimates
(1)Staple fiber
General
Alpek has invested in attractive organic projects to enhance profitability
33
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
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 2Q19
6. PTA/PET Site (Corpus Christi)1 TBD TBD TBD
Total ~ $580 ~$160
Source: PCI and Alpek estimates
(1) JV among Alpek, Indorama and FENC acquired Corpus Christi project from M&G
General
Alpek also holds a successful M&A track record and is constantly evaluating potential targets
34
M&A Guidelines M&A Deals (2011-2018)
Alpek
M&A
Product Capacity Year Country Investment
1. Eastman PTA / PET1.3
Mtons2011 USA US $622 M
2. Wellman PET 430 ktons 2011 USA US $123 M
3. Cabelma rPET 16 ktons 2014 Argentina Undisclosed
4. BASF EPS EPS 230 ktons 2015The
AmericasUndisclosed
5. BASF
(Concon)EPS 20 Ktons 2016 Chile Undisclosed
6. Selenis PET 144 ktons 2016 Canada Undisclosed
7. Perpetual rPET 45 ktons 2019 USA Undisclosed
Attractive Market Potential
Existing / Related Business
Cost Competitiveness
Alpek
M&A
General
Alpek acquired Petroquímica Suape and Citepe in Brazil
35
Alpek – Polyester plants Petroquímica Suape and Citepe
Montreal. Canada
Charleston. USA
Columbia. USA
Bay St. Louis. USA
Monterrey. México
Fayetteville. USA
Altamira. México
Cosoleacaque. México
Zárate. Argentina
Pacheco. Argentina
Polyester Plants (4,663 Kta)
Petroquímica Suape / Citepe Site
Ipojuca, Brazil
• Capacity (Ktons): 640 PTA, 450 PET, 90 Filament
• Location: Ipojuca, Pernambuco, Brazil
• Highlights: • Only integrated PTA-PET plant in South
America• Only PTA producer in South America• 1 of 3 PET plants in South America• Brazil is largest polyester export mkt for Alpek
General
JV formed to acquire, complete and operate the Corpus Christi project
36
Highlights - Corpus Christi Polymers LLC (CC Polymers)
Contributions as of 1Q18(US$ Millions)
• Newly formed JV between Alpek, Indorama and Far Eastern (FENC)
• Acquired Corpus Christi assets (U.S. $1.199 B)
• Obtained regulatory clearance from FTC
• Does not include cost to complete (amount TBD)
• JV will operate as toll manufacturer for Alpek, Indorama and Far Eastern
• Board of independent managers
• Each partner will:
• Independently procure its raw materials
• Independently sell and distribute their PTA and PET
Indorama
Alpek (Cash)
FENC
Total Value: US$ 1,199 M
399 M
399 M
266 M
133 M
Alpek
(Non-cash)
(1) U.S. $133M non-cash contribution associated to portion of Alpek’s secured claim with M&G. Alpek will also obtain U.S. $67M cash for the remainder of secured claim, subject to certain conditions
General
CC Polymers capacity share per partner
37
PTA1.3 M tons
PET1.1 M tons
Corpus Christi Plant (CC Polymers)
Raw materials
Raw materials • PET (Int.): 367 Kta• PTA: 125 Kta
• PET (Int.): 367 Kta• PTA: 125 Kta
Raw materials • PET (Int.): 367 Kta• PTA: 125 Kta
General
Alpek acquired a PET recycling plant from Perpetual Recycling Solutions
38
Alpek – Polyester Recycling Plants Perpetual
Fayetteville. USA (Fiber-grade)
Pacheco. Argentina (Food-grade)
• Capacity: 45 Ktons (rPET)
• Location: Richmond, Indiana
• Highlights:
• +60% increase in Alpek rPET capacity
• Closing during 1Q19Richmond, USA (High-quality/ Food-grade)
General
Alpek has effectively transformed its EPS business
39
Alpek: EPS Capacity (Kta)Expandable Polystyrene (EPS)
The Americas’ installed EPS capacity 2018Total: ̴ 690 ktons
165
230
325
65
20
75
Altamira
Expansion
(Mexico)
20152014 Acquisition
from BASF
(MX/US/SA)
Concon
Plant
(Chile)
2018
47%
13%
12%
7%
21%
Alpek
(Styropek)
Others
Flint Hills
Nova
Nexkemia
General
PET’s Environmental Advantage
40Source: Ellen MacArthur Foundation (“The New Plastics Economy”), Life Cycle Inventory of Three Single-Serving Soft Drinks Containers (PET Resin Association), PCI WoodMackenzie, SBA-CCI
3.7
5.4
9.0
GlassAluminiumPET
Lowest carbon footprint among
beverage packaging materials(MMBTU / 1000 Bottles)
Highest recycling rate
among all plasticsGlobal Recycling Rate (%)
Stable demand despite
environmental pressureNA PET Demand (MTA)
20132012 20152014 2016 2017 2018
3.8 3.8
4.6
4.04.2
4.5 4.7+3%55.0
14.0
PET Other Plastics
More
lightweight
& resistant
General
U.S.A. PET antidumping case (2016)
41
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 7 – 126 % 105 – 126 %
India 0 – 1541 % 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
General
U.S.A. PET antidumping case (2017)
42
Case Calendar
• September’17: Petitions filed
• 4Q17: Investigation initiated by Department of Commerce
(“DOC”) and International Trade Commission (“ITC”)
• April´18: Affirmative preliminary determinations
• September’18: Final affirmative determinations by DOC
• October’18: Negative injury determination by ITC
• November’18: Filed appeal of negative injury determination
Countries under
investigation
• Brazil
• Indonesia
• South Korea
• Pakistan
• Taiwan
General
Polyester ChainPTA, PET, and Polyester Fibers
43
EBITDA 2019 LTM
US$ 5,304 Million
Revenues 2019 LTM
US$ 756 Million
General Information
Selenis, Quebec.
PET
Cedar Creek, NC
PET, R-PET
Cooper River, SC
PET & PSF
Columbia, SC
PTA & PET
Pearl River, MI
PETAltamira, Tamps.
PTA
Zárate, Arg.
PET
Pacheco, Arg.
PET
Monterrey, N.L.
Headquarters
Polyester Filament
Cosoleacaque, Ver.
PTA & PET Ipojuca, Brazil
PTA, PET and Fibers
Employees: ~4,300
Products (Capacity):
• PTA (2,890 Kta)
• PET (2,464 Kta)
• rPET (115 Kta)
• Fibers (400 Kta)
Raw Materials:
• Paraxylene (Px)
• Monoethyleneglycol (MEG)
• Acetic Acid and Isopthalic Acid (IPA)
End Markets:
• Food and beverage
• Textile
• Consumer Goods
Source: Alpek
Richmond, Virginia
rPET
General
Plastics & ChemicalsPP, EPS, CPL and Others
44
General Information
EBITDA 2019 LTM
US$ 1,666 Million
Revenues 2019 LTM
US$ 261 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, Brazil
EPS
Santiago, Chile
Other
Puerto Montt, Chile
Other
General Lagos, Argentina
EPS
Concon, Chile
EPS
Source: Alpek
Employees: ~1,600
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
General
Alpek is managed by an experienced team focused on delivering value to shareholders
45
Po
lye
st
er
Pla
sti
cs
&
Ch
em
ica
lsP
oly
es
ter
Pla
sti
cs
&
Ch
em
ica
lsP
oly
es
t
er
Pla
sti
cs
&
Ch
em
ica
l
s
Name PositionYears with
Alpek / Alfa
José de Jesús Valdez Simancas CEO 43
José Carlos Pons de la Garza CFO 23
Felipe Garza Medina Co-President, Alpek Polyester 42
Jorge Young Cerecedo Co-President, Alpek Polyester 29
Gustavo Talancón Gómez President, Polyester Filaments 30
Alejandro Llovera Zambrano President, Polypropylene 34
José Luis Zepeda Peña President, EPS and Chemicals 33
Gustavo Talancón Gómez President, CPL and Ammonium Sulfate 30
Po
lye
ste
rP
las
tic
s&
Ch
em
ica
ls
Source: Alpek
General
Organization Chart
46
Plastics & ChemicalsPolyester Chain
Felipe GarzaCo-President
Alpek Polyester
Jorge YoungCo-President
Alpek Polyester
Alejandro Llovera
President, Polypropylene
Gustavo TalancónPresident, Polyester Filaments
José Carlos Pons de la
GarzaCFO
José de Jesús ValdezCEO
José Luis Zepeda
President, EPS and Chemicals
Gustavo Talancón
President, CPL and Ammonium
Sulfate
Source: Alpek
General
Polypropylene Chain
47
1) 1.02 ton Propylene per ton PP
Propylene
Refinery
PDH1
Polypropylene
1
Source: Alpek
(1) Propane dehydrogenation
Cracker
General
EPS & CPL Chain
48
1) 0.29 ton Ethylene per ton Styrene2) 0.79 ton Benzene per ton Styrene3) 0.94 ton Benzene* per ton Cyclohexane4) 1.04 ton Cyclohexane per ton CPL5) 0.90 ton Ammonia per ton CPL6) 1.00 ton Styrene per ton EPS
* dls/gal x 299.3 = dls/ton
Gasoline
Reformer Benzene
Refinery
Crude Oil
EPS
Ethylene
Styrene
Cyclohexane Caprolactam
(CPL)
Cracker
Ammonia
1
3
2
4
5
6
Source: Alpek
General
Alpek has been a reliable partner to other global industry leaders through successful joint ventures
49
+ +
World leader in PP production with
sales in more than 100 countries
Largest petrochemical company in the
world with more than 370 sites
51.0%50.0%
+ 1 Share
Alpek: Sample Joint Venture
Source: Alpek
General
Alpek has grown at a 8% annualized rate since 1988 through M&A, JVs and organic projects
50
Sales Volume 1986-2018
(Index: 1986=100)
´88 ´93 ´98 ´03 ´08 ´13 ´18´19e
U.S. PTA/PET
plant
acquisitions
First power
cogeneration
plant
CPL plant
acquisition
First recycling
plant (JV)
Acquisitio
n of first
PTA plantPP plant
start-up (JV)
First U.S.
polyester
plant
acquisitions
EPS capacity
expansion
(JV)
IPO (BMV)
Polyester
acquisition
in Brazil
Source: Alpek
Perpetual
Acquisition
In USA
General
The Americas PTA / PET capacity breakdown
51
The Americas
2018 Installed capacity
PTA PET
Ktons USA Mexico Canada Brazil Total
Alpek 640 1,610 - 640 2,890
Indorama 967 - 600 - 1,567
BP 1,400 - - - 1,400
Eastman 250 - - - 250
Total 3,257 1,610 600 640 6,177
Ktons USA Mexico Canada Brazil Argentina Total
Alpek 1,495 185 144 450 190 2,464
Indorama 812 480 - 550 - 1,842
M&G 560 - - - 560
Nan Ya 445 - - - - 445
FENC 270 - - - - 270
Total 3,022 1,225 144 1,000 190 5,581
Source: PCI adjusted with Alpek’s official capacities
General
Alpek operates a state-of-the-art portfolio of proprietary and third-party technologies
52
Alpek: Proprietary and Third Party Technologies
Proprietary
Technologies
(I&D, acquisitions)
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
Source: Alpek
General
Alpek’s IntegRex® technology simplifies both PTA and PET production processes
53
PTA / PET: Process diagram
Steps eliminated with
IntegRexTM technology
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
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
Source: Alpek
General
Power tariffs (Mexico)
54
Mexico Reference Power Tariff 1
7.8 7.8 7.8 7.77.4
7.77.4
5.76.0
6.6
7.4 7.68.0
9.5
10.8
12.0 11.9
11.1
8.99.4 9.6 9.4
Jun Jul Aug JanSep NovOct Dec Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
20172018
1) Mexico reference power tariff: “Demanda Industrial en Subtransmisión (DIST) del Sistema Interconectado Nacional (SIN), 100% factor de carga”
General
Brent Crude Oil
Brent Crude Oil
100
20
40
80
60
120
Dls/Bbl
99 $/bbl
53 $/bbl
2014 2015 2016 2017
44 $/bbl
Guidance 2019
($68/bbl)
2019
54 $/bbl
2018
71 $/bbl
General
Propylene and Styrene Prices
56
North America Propylene Contract Price (cpp) North America Styrene Spot Price (cpp)
3133
3836
47
41 42
49
59
53
47 46
51
59 5961 60 60
50
4240
3936
3Q 4Q M3Q4Q1Q D2Q 1Q 2Q J F NA M J J A S O J F M
2016 2017 2018
4246
44
49
65
48
55 54
60
7268
59 59 5956
60 5856
4442 41
4548
M M1Q 4Q2Q 3Q 4Q 3Q J2Q1Q OMF JA J SA N D J F
2016 2017 20192019 2018
General
Paraxylene (Px) Price
57
PX USA Contract Price (US$ / Ton)
1,7081,635
1,543
1,014 992
838920
871926
995898
981 1,0031,069
1,119
1,444
1,1461,213
20132011 1Q2012 2014 2015 3Q2Q 4Q 1Q 2Q 1Q3Q 4Q 1Q 4Q2Q 3Q
2016 2017 2018 2019
General
PET Margin (Asia)
58
Margin: Asia PET to Px/MEG (US$ / Ton)
PTA
PET
201
74 71 69 63 59 71 64 63 60 72 80 81104
133 135 118 110
2011 2Q2015 1Q3Q2012 1Q2014 4Q 1Q
263
212
2Q
210
3Q 4Q 2Q2013 4Q 1Q
394
258270
230210
260240
342
276 284
478
377
333 323
3Q
China
250
Source: ICIS, PCI, CCFGroup, Alpek
2016 2017 2018 2019
General
Polypropylene Margin (USA)
59
Margin: Polypropylene to Propylene (PGP) (cpp)
2016 2017 2018
1011 11 11
18
30
28
23
18 18 18
20 20 20
22
20
2224
20142011 2Q20152012 2013 1Q 3Q 1Q4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
2019
General
Caprolactam Margin
60
2,100
1,240
1,069
840 862
630684 699
897
1,216
839934
1,141 1,1371,231 1,272
1,1881,281
2015 1Q2011 2012 2013 3Q2014 1Q 2Q 4Q 2Q 3Q 4Q 2Q1Q 3Q 4Q 1Q
2016 2017 2018
Margin: Asia CPL to NA Benzene (Contract) (US$ /Ton)
2019
General
Stock Highlights (BMV: ALPEK)
61
Daily Average Traded Shares & Value (M Shares)Daily Stock Price (MXN)
5
1
0
2
3
4
0123456
N MA S OJ MF M J J A D J F
2019
30
20
25
35
Jan May Sep AbrJan
Shares
Value ($)
(M Shares) (U.S. $ M)
20182018
Valuation 4Q15 4Q16 4Q17 4Q17 Proforma
4Q18 4Q18 Proforma
1Q19 1Q19 Proforma
Market Cap. (U.S.$ B) 3,113 2,193 2,951 2,951 2,912 2,912 2,865 2,865
Net Debt (U.S.$ M) 722 1,042 1,262 1,262 1,832 1,832 2,200 2,200
EBITDA LTM (U.S.$ M) 630 669 384 497 1,063 843 1,022 802
Enterprise Value / EBITDA 6.5 5.2 11.6 9.0 4.7 5.9 5.2 6.6
Price / Earnings 13.3 8.0 N/A 13.8 3.8 7.1 4.1 8.3
Price per Share (MXN) 25.98 21.10 26.50 26.50 27.30 27.30 26.00 26.00
Exchange Rate (MXN/USD) 17.67 20.35 19.00 19.00 19.83 19.83 19.22 19.22
2019