first quarter 2021
Post on 16-Oct-2021
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FIRST QUARTER 2021EARNINGS WEBCAST
2
Highlight
Today’s Speakers
Alejandro Elizondo
IRO
José Carlos Pons
CFO
José de Jesús Valdez
CEO
3
I. Financial Performance
II. Alpek 2031 Bond
III. Guidance
Topics for Today’s Webcast
4
Highlight
Integrated PET MarginsMargins increased by 36% QoQ due to strong demand
69 62 64 73122 110
155 14082 78 83 78 68 81
208165 159
192
260
214
214
164
145196
227
172 175
249
0
100
200
300
400
500
600
2015
304
US$/Ton
201820162014 2017 2Q
277
1Q 3Q 1Q 2Q
330
382
310
3Q 4Q
PET
PTA
1Q4Q
227 223
266
324
370
227
275250 242
+36%
China
2019 2020
Asian Margins (Px / MEG to PET)
2021
5
+
Feedstock
Prices• Natural Gas price with two-week spike, reaching
levels as high as US$400/MMBtu at one point
• Average Propylene price increased to 73cpp
Operations • USGC producers impacted by lack of Power,
Natural Gas and/or Feedstocks
• All Alpek sites continued operating as normal
• Producers of feedstocks (Ethylene, PGP, MEG,
Styrene) & finished goods (NG, PP, EPS) offline
Demand • Demand continued to be high, drawing
inventories to low levels
Texas Polar Vortex
Margins • PP Margins increased to 32cpp in 1Q21
• Alpek able to commercialize Natural Gas to 3rd
party customers in México during polar vortex
=
+
–
6
Highlight
1Q21 Financial Highlights
• Record high overall volume for any first quarter of 1.2 million tons (+4% YoY) on track with Guidance
• Highest quarterly Reported EBITDA ever of US$324 million excluding Badwill effect and/or asset sales (Cogen)
• Strong performance continued in 1Q21 with Comparable EBITDA of US$203 million (+38% YoY) from record 1Q
volume and higher-than-expected margins
• Successfully issued 10-year U.S. $600 million bond with record low annual coupon (3.25%) & spread (200 bps)
• Dividend to shareholders of U.S. $126 million approved at Annual Shareholders’ Meeting to be paid in 2Q21
• Leverage improved to 1.6x as Net Debt remained at U.S. $1,219 million and LTM EBITDA increased
• EBITDA Guidance revised to U.S. $675 million based on strong 1Q21 results & improving industry margins
7
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967 9331,026 992 996
217176
234 256 234
1,248
1Q20 3Q202Q20
Polyester
4Q20 1Q21
P&C
1,1841,109
1,260 1,230
+4%
Volume Evolution
Alpek Sales Volume (KTon)
• PET volume YoY increase largely
due to resilience of strong post-
COVID-19 demand
• P&C volume increased YoY from
acquisition of NOVA’s
Expandable Styrenics business
(flat YoY excl. NOVA)
8
Highlight
Feedstock Costs
Crude Oil and Paraxylene NA Propylene Contract Price
38 37 3835
31
26
35
41
73
0
10
20
30
40
50
60
70
80
1Q4Q 2Q2Q
cpp
1Q 3Q 3Q 4Q 1Q
+77%Brent
US$/Bbl
NA Px
Contract
US$/Ton
1,165
955
876
590
658
20
40
60
80
200
400
600
800
1,000
1,200
1,400
3Q2Q1Q 4Q 1Q 4Q2Q 3Q
937
1Q
1,077
685
891
+30%
Crude Oil (Brent) Px
+36%• Crude oil price increased 36% as
global economy continues to
recover, OPEC production quotas
enforced, and demand for refined
products continues to rise
• Paraxylene price rose (+30%) in
line with Crude Oil price increase
• Strong increase to Propylene
prices (+77%) caused by polar
vortex in U.S. Gulf Coast, though
beginning to normalize
2019 20202019 2020 20212021
9
Highlight
EBITDA Breakdown
94 81 89
50 66
97
58
63
184
17
123
17
Carry-forward
Effect
3
1Q21 Reported
EBITDA
1Q20 Comparable
EBITDA
4
4Q20 Comparable
EBITDA
1Q21 Comparable
EBITDA
Inventory
Adjustment
Others
P&C
Polyester
147 151
203
324
+35%
1Q21 EBITDA (US$M)
• Comparable EBITDA of US$203M
(+35% QoQ) in 1Q21
• Polyester Comp. EBITDA of
US$89M (+10% QoQ) from strong
margins & volume
• P&C Comp. EBITDA of US$97M
(+48% QoQ) from higher PP
margins due to polar vortex
• Positive Carry-forward &
Inventory Adjustment effect as Px
and Propylene prices increased
10
Highlight
Free Cash Flow Generation
324
192
67
4430
23 2
Net Debt
Dec’20
TaxesNWCEBITDA Financial
Expenses
OthersCAPEX Dividends Net Debt
Mar’21
1,1851,219
US$M
FCF: US-9M
• NWC of -US$192M due to feedstock
prices increase caused by crude oil
(Px) & polar vortex (Propylene)
• Financial expenses of -US$67M due
to one-time tender cost of Alpek’s
2022 Bond totaling -US$42M
• FCF of -US$9M in 1Q21 as strong
EBITDA was offset by NWC and
Financial Expenses
11
Highlight
Net Debt & Leverage
LTM EBITDA (US$M) Net Debt/EBITDA (Times)
850 821735 719
565
778
624 601657
3Q20
789
2Q204Q19 4Q20
769
1Q20
701
1Q21
1.61.7
1.91.7
2.1
1.6
1.7
1.9
2.02.0
1.9
4Q19 3Q201Q20 4Q202Q20
2.0
1Q21
1,330
1,436 1,428
1,2351,185 1,219
4Q19 4Q203Q201Q20 2Q20 1Q21
+3%
Net Debt (US$M)
Comp. EBITDA Net Debt / Comp. EBITDA
12
Alpek 2031 Bond Emission
Principal Amount US$600M
Maturity Feb. 2031 (10 Years)
Coupon 3.25% (-1.00% vs.’29 Bond)
Spread 200bps (-55bps vs. ’29 Bond)
US 10 Yr T. 1.28% (vs. ~1.68% on April 1)
Order Book US$5.4B (9.0x Over-subscribed)
Other NotesStrong participation from
ESG-dedicated funds
13
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Revised 2021 Guidance & Key Assumptions
Market
Financials
Revised ‘21
Guidance
Previous ‘21
Guidance2020
Change
(% vs. ‘20)
Crude Oil US$/Bbl 63 48 42 48
Asia PTA/PET Margin US$/Ton 285 245 269 6
MXN / USD (Avg.) MXN 21.1 21.1 21.5 (2)
Reported EBITDA US$M 750 561 565 33
Comparable EBITDA1 US$M 675 561 601 12
(1) Excludes inventory adjustments and carry-forward effects
14
Highlight
Q&A
José de Jesús Valdez
CEO
José Carlos Pons
CFO
APPENDIX
16
Highlight
111
74
179
201
324
147 149 154 151
203
1Q213Q201Q20 2Q20 4Q20
35%
EBITDA (US$M)
EBITDA Evolution
• 1Q21 Comparable EBITDA of
US$203M (+35% QoQ)
• Increase largely due to better
polyester margins, solid EPS
performance and one-time
benefits to PP margins & natural
gas commercialization from polar
vortex
• Reported EBITDA of US$324M up
(+193% YoY) due to better Comp.
EBITDA and positive inventory
adjustment & carry-forward
effects vs. 2020
Comp. EBITDA Reported EBITDA
US$35M
Badwill
Wilton
17
Highlight
Breakdown of Extraordinary Effects
2021 2020 Delta
M dls 1Q 1Q 4Q 1Q 4Q
Reported EBITDA 324 111 201 214 123
Inventory Adjustment (63) 17 (9) (80) (54)
Carry-Forward Effect (58) 20 (9) (78) (49)
Others - - (33) - 33
Comparable EBITDA 203 147 151 56 52
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Relevant References: Crude OilPrice increased during 1Q21 as quotas met & demand for refined products rose
Brent Crude Oil Price
99
52
7180
0
40
20
60
100
120
US$/Bbl
4244
54
6461
2014 2015 2016 2017 2018 2019 2020 2021
19
Highlight
Relevant References: ParaxylenePx prices increased by 30% in line with Crude Oil price (+36%)
1,7081,635 1,641
1,382
992876
954
1,174 1,1651,077
955 937876
590658 685
891
0
500
1,000
1,500
2,000
2017
US$/Ton
20122011 20142013 2015 2016 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q2018
2019
NA Px Contract Price
2020 2021
20
Highlight
NA Propylene Contract Price (PGP) NA Polypropylene Margin (PP to PGP)
12 1213
15
24
27
19
22 21
1516
17
22
32
0
5
10
15
20
25
30
35
13 3Q1Q16
cpp
12 1511 14 17 18 19 2Q 4Q 1Q
76
60
6971
39
34
45
54
37
31
26
35
41
73
0
10
20
30
40
50
60
70
80
3Q1311
cpp
1712 1614 15 18 19 4Q1Q 2Q 1Q
2020
Relevant References: Propylene & PolypropyleneIncrease in both PGP contract prices and PP margins due to polar vortex
2021 2020 2021
21
Highlight
For Additional InformationEmail: IR@alpek.com / Phone: +52 (818) 748-1146
• 9 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
• 10 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
22
Highlight
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 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.
FIRST QUARTER 2021EARNINGS WEBCAST
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