Earnings Presentation 1 st Quarter 2020 Disclaimer This presentation - - PowerPoint PPT Presentation

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Sep 24, 2022 435 likes •596 views

Earnings Presentation 1 st Quarter 2020 Disclaimer 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

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Earnings Presentation

1st Quarter 2020

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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.

Disclaimer

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1Q20 Highlights

Achieved better-than-expected results vs. Guidance amid volatile environment COVID-19 has not impacted our operations as our products are considered essential for Food / Beverage / CPG packaging, as well as medical supplies Reported EBITDA of U.S. $111 million / U.S. $127 million Comparable EBITDA Paid U.S. $143 million dividend related to Cogeneration sale & approved U.S. $82 million dividend in our Annual Shareholders Meeting Alpek maintains strong financial position as Leverage is 1.7x Net Debt to EBITDA Announced extension to Corpus Christi Polymers (CCP) pre-construction period & reduced CAPEX needs by U.S. $45 million in 2020

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COVID-19

Alpek posted better-than-expected 1Q results amid volatile environment

Industry Impact 1Q20 Effects on Alpek Company Reaction

Lower crude oil demand in Asia

resulted in decreases to Crude Oil & Paraxylene (Px) prices

Polyester margins strengthened
vs. 4Q19 as lower PTA/PET output

from Asia reduced supply in 1Q20

Mexican Peso and Brazilian Real

depreciated during 1Q20

No adverse effect to Alpek’s

business continuity from COVID-19

Alpek’s businesses deemed

essential (food & beverage packaging, CPG, medical supplies & general chemicals)

Polyester and polypropylene

results favored by improved volumes and margins

US$36M non-cash Inventory Loss

and negative Raw Material Carry- Forward effect

Two employees in USA have

COVID-19

Increased hygiene measures &

home office to protect employees’ health

Guarantee PET production to

customers given high demand

Focus on financial stability results

in FCF US$181M better than expectations

Cash balance improved by

U$240M by drawing committed long / short-term credit lines

> >

Volatility surrounding COVID-19 makes it difficult to predict feedstock prices, demand and margins / 2020 Guidance has been withdrawn until Alpek can provide reliable estimates = = + – –

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Relevant References: Crude Oil

Price reduction from demand reduction & no agreement to reduce output in 1Q20

Brent Crude Oil Price

53 44 54 71 60 20 120 40 80 100 Avg. 99

US$/Bbl

64 2014 2015 2016 2017 2019 2018 2020 Guidance 59 Source: Bloomberg

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Relevant References: Paraxylene

Px prices also fell in 1Q20 following their correlation with Crude Oil

1,708 1,635 1,641 1,382 992 876 989 924 924 977 1,056 1,100 1,258 1,282 1,165 1,077 955 937 876 500 1,000 1,500 2,000 1Q 3Q 2013 US$/Ton 2016 2012 2011 2014 2015 2Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2017 2018 2019

NA Px Contract Price

US$165/ton decrease from Dec.’19 to Mar.’20

2020

Source: IHS

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Relevant References: Integrated PET Margins

Margins have already risen above Guidance levels in low-demand quarter

7 200 74 69 69 62 64 60 72 80 81 104 133 135 117 110 155 140 82 78 193 174 186 208 165 159 180 204 184 202 238 346 242 215 214 214 164 145 196 100 200 300 400 500 600 277 2012 227 2Q US$/Ton PET 2014 2011 2Q 1Q 2013 2015 2016 393 3Q 263 4Q 1Q 333 3Q 3Q 4Q 304 276 1Q 2Q 4Q 1Q 370 PTA 342 248 255 227 223 240 284 478 275 377 324

China

2017 2018 2019

Asian Margins (Px / MEG to PET)

2020 Guidance 255 Source: ICIS, PCI, CCFGroup

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NA Propylene Contract Price (PGP) NA Polypropylene Margin (PP to PGP)

12 12 13 15 24 27 19 22 22 22 21 20 15 2 4 6 8 10 12 14 16 18 20 22 24 26 28 1Q 17 14 11 cpp 16 15 12 13 18 1Q 2Q 3Q 4Q 76 60 69 71 39 34 45 54 38 37 38 35 31 10 20 30 40 50 60 70 80 14 13 cpp 11 15 12 16 17 18 1Q 2Q 3Q 4Q 1Q 2019 2020 2019 2020

Relevant References: Propylene & Polypropylene

Decrease in both PGP contract prices & industry PP margins in 1Q20

Alpek able to maintain margins in 1Q

Source: IHS

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9 140 161 194 167 111 188 148 189 172 167 217 231 173 147 1Q19 2Q19 4Q19 127 213 3Q19 1Q20 Reported EBITDA 356 CoGen Sale

Alpek EBITDA (US$M)

Comparable EBITDA Comparable EBITDA exc. RMCF1

EBITDA Comparison

Lower EBITDA QoQ from lower contract margins & lack of Cogen operations

(1) Raw Material Carry-Forward

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EBITDA Breakdown

Both Polyester and P&C exceeded Comparable 1Q EBITDA Guidance (exc. RMCF)

10 (1) Raw Material Carry-Forward 40 20 10 50 20 50 17 49 1Q20 Comparable (w. RMCF)1 Polyester Inventory Adjustment Others 1Q20 Comparable P&C 58 94 1Q20G RMCF1 74 74 116 Others P&C 147 111 127 1 1Q20 Reported Polyester +26%

Alpek 1Q20 EBITDA vs. Guidance (US$M)

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2020 2019 Delta US$M 1T 1T 4T 1T 4T Reported EBITDA 111 140 167 (29) (57) Inventory Adjustment (17) (19) (6) 2 (11) Others

1 (11) (1) Comparable EBITDA 127 148 172 (20) (45) Raw Material Carry-Forward (20) (19) (2) (1) (18) Comparable EBITDA + Raw Material Carry-Forward 147 167 173 (20) (26)

Raw Material Carry Forward Effect (RMCF1) Breakdown

Smaller YoY & QoQ difference in EBITDA when excluding extraordinary effects

(1) Raw Material Carry-Forward: Effect on margin generated from price change to raw materials between purchase vs. actual consumption. Positive or negative depending on price change (2) Excludes Cogeneration sale

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Leverage

Alpek maintains low leverage despite payment of dividend from Cogen sale

Net Debt (US$M) LTM EBITDA (US$M) Net Debt/EBITDA (Times)

1,022 944 864 850 821 1Q20 2Q19 1Q19 3Q19 4Q19 2.2 2.2 2.4 1.6 1.7 1Q19 1Q20 2Q19 3Q19 4Q19 2,200 2,084 2,036 1,330 1,436 1Q20 1Q19 4Q19 2Q19 3Q19

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For Additional Information

Email: IR@alpek.com / Phone: +52 (818) 748-1146

8 Years at Alfa/Alpek
Previously held roles in Human Capital, Talent & Culture at Alfa and Axtel
BA in International Relations from ITESM

Alejandra Bustamante IR Manager

abustamante@alpek.com

9 Years at Alfa/Alpek
Previously held roles as Director of Logistics & Procurement at Indelpro, Director of Energy Markets at

Alfa, and Project Leader at The Boston Consulting Group

BS in Industrial Engineering from Cornell University and MBA from Stanford Graduate School of Business

Alejandro Elizondo IRO

aelizondo@alpek.com

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