On Path to Long-Term Value SET Opportunity Day February 22, 2018 - - PowerPoint PPT Presentation

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On Path to Long-Term Value SET Opportunity Day February 22, 2018 - - PowerPoint PPT Presentation

On Path to Long-Term Value SET Opportunity Day February 22, 2018 Disclaimer This presentation contains forward - looking statements of Indorama Ventures Public Company Limited (the Company) 1 that relate to future events, which are,


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SLIDE 1

On Path to Long-Term Value

SET Opportunity Day

February 22, 2018

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SLIDE 2

Disclaimer

2

This presentation contains “forward-looking” statements of Indorama Ventures Public Company Limited (the “Company”)1 that relate to future events, which are, by their nature, subject to significant risks and uncertainties. All statements, other than statements of historical fact contained herein, including, without limitation, those regarding the future financial position and results of operations, strategy, plans,

  • bjectives, goals and targets, future developments in the markets where the Company participates or is seeking to participate and any

statements preceded by, followed by or that include the words “target”, “believe”, “expect”, “aim”, “intend”, “will”, “may”, “anticipate”, “would”, “plan”, “could”, “should, “predict”, “project”, “estimate”, “foresee”, “forecast”, “seek” or similar words or expressions are forward-looking statements. 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

  • perate 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

  • bligation to supplement, amend, update or revise any such statements. The Company does not make any representation, warranty or

prediction that the results anticipated by such forward-looking statements will be achieved.

1Where the context requires, it means the Company, its subsidiaries, joint ventures and associated companies as a group or as members of

such group.

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SLIDE 3

2017 Financial Results

Delivering On Expectations 3 +30% YoY Core Net Profit $459M +68% YoY Core EPS THB 2.91 +63% YoY EPS THB 3.98X +26% YoY Core EBITDA $1,004M Production 9.1MMt +4% YoY

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SLIDE 4

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Solid Financial Performance

Strong Earnings Momentum Continues

EBITDA/ton ($/MT) EBITDA Margin (%) ROCE (%) ROE (%)

82 91 91 89 110 2013 2014 2015 2016 2017 6% 8% 9% 11% 12% 2013 2014 2015 2016 2017 6% 8% 10% 11% 12% 2013 2014 2015 2016 2017 3% 6% 8% 13% 17% 2013 2014 2015 2016 2017

Note: Core Financials

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SLIDE 5

Clear Direction Towards 2021

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SLIDE 6

Our Debut on DJSI Reflects Our Strong Delivery

IVL Ranks as #5 Of all 2017 DJSI listed chemical companies

2014 2015 2016 20% 69% 84%

95%

IVL DJSI Score

2017

6

Source: RobecoSAM

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SLIDE 7

Delivering On Our Financial Plan

Doubled Our EBITDA in Last 4 Years

7

478 568 640 775 1,004

2013 2014 2015 2016 2017

x2

EBITDA Increase Core EBITDA ($M)

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SLIDE 8

0.35 0.54 0.65 0.74 0.76 0.71 0.82 0.91 1.06 1.11 1.31 1.56 1.79 2.22 2.39 2.72 2.91

LTM4Q13 LTM1Q14 LTM2Q14 LTM3Q14 LTM4Q14 LTM1Q15 LTM2Q15 LTM3Q15 LTM4Q15 LTM1Q16 LTM2Q16 LTM3Q16 LTM4Q16 LTM1Q17 LTM2Q17 LTM3Q17 LTM4Q17

Creating Superior Shareholder Returns

Consistent EPS Growth in Trough Business Environment

8

Core EPS After PERP (THB/Share)

14%

Quarterly EPS Growth

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SLIDE 9

Continue Shaping Our Industry Leadership

Leading The Market With Quality, Innovation, Reliability

9

Note: Financials Excluding JVs

11

R&D Centers

564

Patents

$8.4 billion

Revenue

15,039

Employees A global presence in

25 countries

75 operating sites

in Asia in EMEA in North America

34 24 17

34%

HVA sales

IVL At A Glance - 2017

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SLIDE 10

10

Countries

12 15 25

R&D Centers

2 6 11

# Patents

Not material

250 564

DJSI Score

  • 95% (#51)

Employees

~6,000 9,173 15,039

2 4 6 8 10 12 14 2010 2013 2017 NA PET NA Olefins NA Fibers NA Aromatics EMEA PET EMEA Fibers EMEA Aromatics Asia PET Asia Fibers Asia Aromatics 34 sites 24 sites 17 sites 20 sites 15 sites 10 sites 15 sites 4sites 4 sites IVL Capacity (MMt)

3.7 6.8 11.7

  • 1. Of all 2017 DJSI listed chemical companies

Note: Capacity data including JVs

Constantly Upgrading Our Value Proposition

Strategy and Execution Delivered True Value Over Time

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Our Roadmap for Organic Growth with Associate Capex

Expected EBITDA Growth with Approved Projects

Note: 2019F over 2H17 annualized as per management best estimates and may change materially if there are changes in underlying assumptions due to external or internal reasons

540 207 350 2H17 Annualized Existing Business Projects Approved & Under Implementation 2019F EBITDA ($/MT) 117 Increased Increased Simple Payback (Years) 5.1 ~4.5 <5x 1,094 Feedstock Fibers PET

2H17 Annualized to 2019 EBITDA ($m)

~35%

EBITDA Increase

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SLIDE 12

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IVL

Consolidated By Segment By Region Increase in Production (%) ~25%

~25% ~20% ~30% ~10% ~40% ~35%

Increase in EBITDA (%) ~35%

~30% ~50% ~35% ~35% ~20% ~70

Growth Capex (2018 and 2019) $ 1.5b

~30% ~20% ~50% ~50% ~30% ~20%

Maintenance Capex (2018 and 2019) $0.3m

~20% ~20% ~60% ~40% ~30% ~30%

Total Capex (2018-19) $1.8b Simple Payback of Approved Projects ~4.5 yrs

Impact with Exiting Business and Approved Projects

Expected Increase in EBITDA of ~35% in 2019 over 2H17 Annualized

PET Fibers Feedstock NAM EMEA Asia

Note: 2019F over 2H17 annualized as per management best estimates and may change materially if there are changes in underlying assumptions due to external or internal reasons, Out of $1.8B capex $764M is spent by 2017

2H17 Annualized to 2019 EBITDA ($m)

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SLIDE 13

Robust Financial Headroom

$7 Billion Investment Headroom for Future Growth 13

Dec 31, 2017 Net D/E Ongoing Project CAPEX Dec 17 Dec 31, 2017 Net

  • Op. D/E

Free Cash Flow in 2018 & 19 based

  • n approved

projects Estimated Dec 31, 2019 Net D/E Capex Headroom in 2018 to 2021 Estimated Dec 31, 2021 Net D/E

Note: 100% IVL W2 exercise considered, budgeted business plan

0.75x 0.54 $764M ~1x $7b ~0.2x

2017 to 2021 Net Debt to Equity Bridge

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SLIDE 14

Favorable Industry Trends

Industry Fundamentals Reflect Positive Changes

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Strong polyester consumption growth China import waste ban creates more demand for virgin materials Global capacity balancing Asia PTA margin recovery with positive impact on global PTA and PET Changing trade barriers increasing import parity

2H17-2021

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SLIDE 15

220 218 205 194 217 234 230 50 100 150 200 250 600 1,200 1,800 2013 2014 2015 2016 2017 2018 2019 West MEG West PTA West PET Asia Fibers Asia PTA Asia PET Weighted Average Spreads (RHS)

15

Where We Are in the Cycle?

Margins Have Bottomed-Out and Are on Recovery Path

Industry Spreads ($/MT) IVL Spreads ($/MT) 195 193 176 169 197 217 201 50 100 150 200 250 600 1,200 1,800 2013 2014 2015 2016 2017 2018 2019

Note: Weghted average spreads based on IVL actual production mix Source: Industry Data, IVL Analysis

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16

Note: Core EBITDA Segments total may not match to IVL due to holdings segment

IVL Portfolio Today Stronger Than Ever (EBITDA, $M)

Accretive Opportunities for Growth and Investment

81 123 95 246 267 375 313 373 536

640 775 1004

2015 2016 2017

Asia Necessities West Necessities HVA

195 205 208 247 286 296 197 271 501 2015 2016 2017

Feedstock PET Fibers

340 348 445 126 185 350 173 230 212 2015 2016 2017

Asia EMEA NA

2017 Portfolio

Upgrading our Business Profile

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SLIDE 17

IVL - A Global Leader in Tire Reinforcement

~$1 Billion Business for IVL by 2019, Expanding at ~40% CAGR 17

250 500 750 1,000 2014 2015 2016 2017 2018 2019

~40%

CAGR

IVL Auto & Tire Revenue ($m)

Note: Revenue based on announced projects

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SLIDE 18

Focus on Premium Segments

IVL - Uniquely Positioned Within Tire Industry

Leading Supplier to World-Class Customers 18

Source: Industry Data, IVL Analysis

Global Customer-Centric Presence Global Market Leader Total Solution Provider

PEN

Single- end-cord/ Hybrid

Rayon PA 66/ PET Advanced PET Standard

IVL Focus

Global Rayon Tire Cord China PET Tire Cord Global Single-end- cord/Hybrid #2 #2 #1

Lovosice, CZ Steinfort, LU Pizzighettone, IT Obernburg, DE Queretaro, MX Longlaville, FR Qingdao, CN Guangdong, CN Sidewall Thread Cap Ply Belts Carcass Inner Liner Bead Apex Aramid PET Advanced PET Rayon PEN N66 Aramid hybrid PEN

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Key Takeaways

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On path to becoming a world-class chemical company making great products for society Delivering 14% quarterly EPS growth in the trough 2013- 2017 business environment 2H17 marks a positive structural shift for the industry and business ~45% expected EBITDA growth in 2019 over 2017 with existing business and approved projects $7b investment headroom by 2021 after $1.8b committed capex by 2019

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SLIDE 20

Our Vision

To be a world- class chemical company making great products for society

“ ”

We commit to be a responsible industry leader leveraging on the excellence of our people, processes, and technologies to create value for our stakeholders

“ ”

  • The CUSTOMER is why we exist
  • Our PEOPLE make the difference
  • We see CHANGE as an opportunity
  • DIVERSITY is our strength
  • We are RESPONSIBLE

Thank You