Corporate Presentation - 1st Quarter 2021 - Alpek
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Corporate Presentation 1st Quarter 2021
Index Alpek at a Glance Key Investment Highlights Financials Relevant Events The Case for PET Appendix
Alpek is a large component of ALFA’s portfolio of companies
Alfa posted US$12.3B in Revenues & US$1.5B in EBITDA1
2
Petrochemicals Food Products IT + Telecom Aluminum Auto Parts
EBITDA1
37% 45% 20% -
(% Alfa)
8 out of 10
#1 Producer of PTA, 11 Sigma brands 1 out every 4 new cars
Mexican Corporates use
PET, rPET, EPS & sell more than sold in the world has at
Axtel’s IT and Telecom
ARCEL® in the Americas US$100M a year each least one Nemak product
services
18
18% 19% 53% 25%
%
28%
82
82% 100 75%
% %
Alfa Publicly traded Other Privately Held
(1) Nemak has discontinued operations. Figures as of December 31, 2020
(2) ALFA´s entire share ownership in Nemak distributed to ALFA shareholders in December 2020 3
Source: Alpek
Alpek is one of the largest PetChems in The Americas
Strong portfolio of resilient products across two main segments
Comparable Net Debt /
Revenues1: US$5.3B US$601M 2.1x
EBITDA1: Reported EBITDA1:
Polyester (75% Sales)2 Plastics & Chemicals (22% Sales)2
PTA, PET Polyester Polypropylene Expandable Styrenics Caprolactam Specialty Chemicals
& rPET Fibers (PP) (EPS & ARCEL®) (CPL) & Fertilizers
(1) Figures for the year ended December 31, 2020;
(2) Sales revenue for the year ended December 31, 2020; additional 3% represented by other small business
4
Source: Alpek
Our footprint now spans 31 plants across 7 countries
Over 8.0 million tons and more than 6,200 employees worldwide
Installed capacity breakdown (Kta)
rPET
Country Site PTA PET Flake Pellet SPT Fibers PP EPS Arcel CPL Other
Monterrey 160
Mexico Altamira 1,000 640 240
(3,395 Kta) Salamanca 85 360
Cosoleacaque 610 185 15
Lerma 100
Fayetteville, NC 170 55
Charleston, SC 170 15 150
Columbia, SC 640 725
USA Bay St. Louis, MS 430
(2,644 Kta) Richmond, IN 55
Darlington, SC 30
Monaca, PA 123 36
Painesville, OH 45
Canada
Montreal 144
(144 Kta)
Zárate 190
Argentina
Pacheco 22 15
(246 Kta)
General Lagos 19
Brazil Guaratingueta 46
(1,226 Kta) Ipojuca 640 450 90
Santiago 5
Chile Puerto Montt 2 Polyester
(28 Kta) Punta Arenas 1
Concon 20 P&C
United Kingdom
Wilton 350
(350 Kta)
Total Capacity: 8,033 Kta 2,890 2,814 132 45 30 400 640 493 36 85 468
Kta: Thousand tons per year 5
Source: Alpek estimates
Index Alpek at a Glance Key Investment Highlights Financials Relevant Events The Case for PET Appendix
Investment Highlights
1 Market leadership across all our products in the Americas
2 Consumer-oriented product portfolio limits demand volatility
3 Proven track record of growth across all parts of the cycle
4 State-of-the-art technology resulting in low-cost position
5 Clear strategy & catalysts executed by experienced management team
6 Portfolio uniquely placed to lead growth of circular economy
11. Market Leadership
Alpek holds leading industry positions for all its products
Polyester Industry Position1 by Product P&C Industry Position1 by Product
PTA 1 The Americas PP 1 Mexico
1 The Americas
Expandable
1 The Americas
PET
Styrenics
2 Worldwide 3 Worldwide
rPET 1 The Americas CPL 1 Mexico
PSF2 2 The Americas
(1) Industry position is based on installed capacity and reflects market position as of December 31, 2020. (2) Polyester Staple Fiber (excluding filaments)
8
Source: PCI and Alpek estimates
11. Market Leadership
Alpek is the largest PTA-PET producer in Americas
Market has consolidated & become increasingly organized over time
The Americas PTA Capacity Share (%) The Americas PET Capacity Share (%)
7,240 6,781
Kta 9% Others Kta 7% Others
6,190 5,681 8%
5,940 5,494 M&G
14% 19% BP 8% 11% FENC
16% 10%
24% 6%
23%
25% Indorama 27% 33% Indorama
24% 32%
27%
24%
46% 42%
49% 43%
36% 34%
2015 2020 2025E1 2015 2020 2025E1
(1) Includes
Kta: Thousands
CC Polymers
tons per year 9
Source: Alpek
Wood &Mackenzie
Wood Mackenzie
21. Consumer Oriented Portfolio
Resilient end-markets account for 92% of volume
97% of Alpek’s sales are dollar-based
Volume by Industry 20201 Sales Geography 20201
Textiles 4% Construction 4% EUR 6% Asia 0.4%
92%
71%
SA 22%
Consumer Goods 25% USA/CAN 42%
Volume 2020 Sales 2020
4,802 Kta US$5,326 M
Food & Beverage 67%
MEX 29%
Sample End Users by Industry
Beverage Food Personal Care Textiles
(1) Volume and sales breakdown for data for the year ended December 31, 2020.
10
Kta: Thousand tons per year
Source: Alpek31. Proven Growth
Alpek has continued growing at 8.6% CAGR since 1986
Constant growth at different points of the industry cycle
Sales Volume 1986-2020 (Index: 1986 = 100)
PET
acquisition
in UK
Polyester
acquisition Corpus Christi
IPO (BMV)
U.S. PTA/ in Brazil Polymers (JV)
PET plant
acquisitions
Styrenics
rPET
EPS Acquisition
Acquisition
capacity in USA
in USA
expansion First power
First U.S.
(JV) cogeneration
polyester
plant plant
acquisition First
recycling
plant (JV)
CPL plant
acquisition
Acquisition
of first PTA
plant
DMT
Expansion
PP plant
start-up (JV)
´86 ´93 ´98 ´03 ´08 ´13 ´18 ´20 ´25
11
Source: Alpek41. Low-Cost Position
State-of-the-art tech, strategically located assets & low-cost
logistics yield low-cost position in industry
Continuous investment in own technology has World scale production facilities make Alpek the
improved Alpek’s cost position (i.e. IntegRex) low-cost producer in The Americas (i.e. PP)
Steps eliminated with IntegRex®
Precursor
Oxidation Feed prep Esterification
Preheating
Margin
Post-Oxidation Hydrogenation Pre-Poly Crystallization
Crystallization Crystallization Polymerization Annealing
80% of Market
Filtration and Filtration and Solid State Participants
Pelletization
Drying Drying Polymerization
Precursor
CTA Storage PTA Storage PET Resin
Storage
Cost
12
Source: Alpek, Philip Townsend51. Strategy & Mgmt. Team
Long-term strategy is based around 3 key pillars
1351. Strategy & Mgmt. Team
Mgmt. with 30+ years average experience in PetChem
Clear strategy & culture of empowerment ensure efficient operations
José de Jesús Valdez
CEO (45)
José Carlos Pons
CFO (25)
Felipe Garza Jorge Young Gustavo Talancón Alejandro Llovera José Luis Zepeda Gustavo Talancón
Co-President Co-President President President President President CPL &
Alpek Polyester (44) Alpek Polyester (31) Polyester Filament (32) Polypropylene (36) EPS & Chemicals (35) Ammonium Sulfate (32)
Polyester Plastics & Chemicals
(#) Years with Alfa/Alpek 14
Source: Alpek61. Portfolio prepared to lead in circular economy
Our strong innovation efforts are focused on circular
economy initiatives and process improvements
In-house • Process simplification & cost reduction to Integrex
Innovation PTA/PET production process
(Examples)
• Organic fertilizer production from bio-mass organisms
• Chemical recycling processes from PET back to BHET &
MEG and EPS back to Styrene
Open • Structured collaboration with start-ups to identify and
Innovation monetize innovation trends related to our business
Initiative
• Extended reach beyond in-house innovation
• Reduced time-to-market for new products
• Increased efficiency of R&D capital allocation
1561. Portfolio prepared to lead in circular economy
Alpek strives to continue improving its ESG performance
Reaffirmed commitment to ESG by joining UN Global Compact in 2021
CDP ESG Ratings Sustainalytics ESG Ratings CSA Ratings
2019 2020 54 2019 2020
Risk
B- 39 32
Rating 43 44
C 35
31 32 30
28
D 68
61
D-
Climate Change Water 2019 2021 Env. Soc. Gov. Total
NA D B Percentile 39 64 Percentile ‘19 31
Chemical C B Percentile ‘20 66
Company recognized by as 2 Best ESG in its segment
16Index Alpek at a Glance Key Investment Highlights Financials Relevant Events The Case for PET Appendix
Recent Financial Results
Sales Volume (KTon) Revenues (US$M)
4,802 6,991
4,402 4,384 6,216
4,012
5,231 5,326
P&C
P&C
Polyester 1,184 1,230 1,614
Polyester 1,433
2017 2018 2019 2020 1Q20 1Q21 2017 2018 2019 2020 1Q20 1Q21
Reported EBITDA (US$M) CAPEX (US$M)
1,063 826
220 850
Suape/
800 789 188 Citepe &
565
CCP
601 35
Comparable
excl. RMCF
462 843 270
236
662 162
530
384 203 324 Nova
147 15 30
111
2017 2018 2019 2020 1Q20 1Q21 2017 2018 2019 2020 1Q20 1Q21
% Sales 7.3% 15.2% 13.7% 10.6% 14.4% 20.1% 18Free Cash Flow Generation
US$M
23 2 1,219
1,185 324 30
44
67
192
FCF: US-9M
Net Debt EBITDA NWC Financial Taxes CAPEX Dividends Others Net Debt
Dec’20 Expenses Mar’21Leverage
Net Debt (US$M) LTM EBITDA (US$M) Net Debt/EBITDA (Times)
1,436 1,428 2.0
+3% 789 2.0 2.0
1,330 769 1.9 1.9
1,235
1,185 1,219 701 1.7
657
624 601
850 821 2.1
778 1.9
735 719 1.7 1.7
1.6 1.6
565
4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21
Comp. EBITDA Net Debt / Comp. EBITDABalance Sheet Accounts
Net Working Capital1 (US$M) Property, Plant and Equipment (US$M)
951 2,390
2,105
774 750 1,968 1,934 1,899
608
497
NWC Days 44 43 53 44 42
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021
Net Debt2 (US$M) Stockholders’ Equity (US$M)
1,832 2,391
2,193 2,281 2,259
1,262 1,330
1,185 1,219 1,604
IFRS 16
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021
(1) Net Working Capital = Accounts receivable + Other accounts receivable + Inventories - Suppliers - Other accounts payable and accrued expenses
(2) Net Debt = Bank loans and notes payable + Current portion of long-term debt + Long term debt – Cash
21
Source: Alpek estimatesDebt Profile
99% of Debt denominated in USD1,2 / Debt average life @ 7.2 years
Available Comm.
Net Debt: US$1,219M Gross Debt: US$1,714M US$680M
Credit Lines
Consolidated Debt Profile2 (Mar. 2021)
US$M
900 Cash
800 Bonds
Bank Debt
700 Coupon
600 3.250%
600 Coupon
4.250%
495 500
500
400 Coupon
5.375%
300
300
Coupon
4.500%
200
94
100
22 40
0
Cash 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
(1) A small portion of debt is denominated in ARS 22
(2) Excludes leases, documents and accrued interestsDividends
Alpek Dividends (US$M)
Announced in General
250 Shareholders’
12 Meeting
225 (To be paid in 2Q21)
11
206
10
200 178
176 9
165 160 160
155 8
143 143 143 Total Dividend
150 7
126
114 111 Shareholders
6
100 95
100 9.6 5
4
Dividend
5.9 53 6.5 3 (%)
5.6 Yield
50
3.4 3.4 2
3.0
2.1 1
0
0 0
2013 20141 2015 2016 2017 2018 2019 20202 2021
(1) Paid in December 2013 23
(2)
(1)Showing US$143M
Paid in January Dividend in 2020 (Compensated lack of dividend in 2018)
2020Results by Quarter
Sales Volume (KTon) Revenues (US$M)
1,260 1,248 1,643 1,614
1,121 1,109 1,184 1,230 1,523
1,118 1,059 +4% 1,407 1,392 1,433
1,325
1,175
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
Reported EBITDA (US$M) Majority Net Income (US$M)
400 209
356
231 Cogen 188
217 Sale Lotte Bus. 121
201 203 99
173 Comb.
149 154 356 151 35 147 324
56 65
50
194 179 166
161 168 6
111
74
0
2Q 3Q 4Q 1Q -19
2Q 3Q 4Q 1Q
2019 2020 2021 Comparable EBITDA 24
Source: AlpekEBITDA Breakdown
1Q21 EBITDA (US$M)
324
17 Others
63
+35% 123 P&C
58
203
17
147 151
3 4
97
50 66
184 Polyester
94 81 89
1Q20 Comparable 4Q20 Comparable 1Q21 Comparable Carry-forward Effect Inventory 1Q21 Reported EBITDA
EBITDA EBITDA EBITDA AdjustmentBreakdown of Extraordinary Effects
2020 2021 Δ 1Q21 vs.
M dls 1Q 2Q 3Q 4Q 1Q 1Q20 4Q20
Reported EBITDA 111 74 179 201 324 214 123
Inventory Adjustment 17 42 (16) (9) (63) (80) (54)
Carry-Forward Effect 20 39 (6) (9) (58) (78) (49)
Others - (6) (3) (33) - - 33
Comparable EBITDA 147 149 154 151 203 56 52Index Alpek at a Glance Key Investment Highlights Financials Relevant Events The Case for PET Appendix
Texas Polar Vortex
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
Feedstock • Natural Gas price with two-week spike, reaching
+ Prices levels as high as US$400/MMBtu at one point
• Average Propylene price increased to 73cpp
Margins • PP Margins increased to 32cpp in 1Q21
+ • Alpek able to commercialize Natural Gas to 3rd
party customers in México during polar vortex
28Alpek 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)
Strong participation from
Other Notes
ESG-focused funds
29CCP Update
• Pre-construction period extended through end of 2021
• Stronger PET demand in NA supportive of project
• Focused on minimizing CAPEX & optimizing timing
• Front-loading engineering work & analyzing all options
PTA PET
1.3 M tons 1.1 M tons
Own Px • PET (Int.): 367 Kta
& MEG • PTA: 125 Kta
Own Px • PET (Int.): 367 Kta
& MEG • PTA: 125 Kta
Own Px • PET (Int.): 367 Kta
& MEG • PTA: 125 Kta
30CO2 Recovery & Liquefaction JV
• 50/50 Joint Venture with ContourGlobal
• 70,000-Ton CO2 facility linked with Cogeneración Altamira
• Meeting the rising demand of food-grade CO2 in Mexico
• JV leverages both partners’ core strengths
• Final investment decision expected by 3Q21
Strengthen Foster Circular Strategic &
Core Business Economy Focused Growth
✓ Value-added Products ✓ Sustainable Product Portfolio ✓ Product Innovation
31NOVA Chemicals’ Expandable
Styrenics Business Purchase
204 529
36
ARCEL®
EPS 168
20 19 325
46
240 NOVA
KTA
MEX BRA CHI ARG Pre- USA Post-
Acquisition Acquisition
Strengthen Foster Circular Strategic &
Core Business Economy Focused Growth
✓ Global Cost ✓ Sustainable Product ✓ Value Chain Integration
Improvement Portfolio
✓ Product Innovation
✓ Value-added Products
✓ Footprint Optimization
32Growth in rPET Capabilities
207
Up to 120KTA at
60 2020
25% recycled content
132 PolyQuest
(Darlington, SC) Cooper River &
Cosoleacaque Poseidon
45 Plastics
147 2019
30 (UK)
30 15
15
K Tons
Bottle to Flake to Single Pellet Enhanced Total
Flake Pellet Technology® Recycling
Strengthen Foster Circular Strategic &
Core Business Economy Focused Growth
✓ Value-added Products ✓ rPET Leadership ✓ Value Chain Integration
✓ Footprint Optimization ✓ Recycling Promotion
✓ Sustainable Product
Portfolio
33ALFA’s Unlocking Value Initiative
Nemak Axtel Lower Alpek
Spin-off Sale Debt Spin-off
2020 TBD TBD TBD
Alpek’s • Spin-off not expected in 2021
Transition
Plan • Working on becoming fully independent
from ALFA’s corporate services
Potential
• No impact expected to Alpek’s SG&A
Impact &
Benefits • Possibility for more shares to be publicly
traded, thus increasing share liquidity
• Strengthened Governance practices
34Index Alpek at a Glance Key Investment Highlights Financials Relevant Events The Case for PET Appendix
INDEXED GOOGLE SEARCHES 2009-2020
Every bottle ends up in the middle of the
ocean, I’ve seen the images on TV
A friend told me that glass is the most eco-
friendly option, so I always go for that if I can
Companies care more about their sales than the
environment. Just look at any supermarket aisle’
PET is #1 for a reason
100% RECYCLABLE
HDP PVC LDPE
E RECYCLED AT HIGH RATES
ONLY PLASTIC THAT CAN
BE REMADE BACK TO ITS
ORIGINAL PURPOSE
PP PS OTHERS
HOWEVER, THEY ALL GET BUNDLED TOGETHER,Although Alpek plays an important role as the largest producer
and recycler of PET in the Americas, we’re not the only ones
involved in its lifecycle.
So rather than hearing it from us, we’d like to introduce you to
some people that can better explain The Case for PET based
on how it touches their lives every day.
These are their stories.«PET is simply a
better product»
For a while now, we wanted to sell more of our berries in
the local supermarkets, but packaging was a problem. We
used carton but there were a lot of disadvantages, for
example if the package got too wet, like from the humidity
in the supermarket refrigerators, it would lose its
resistance or leave our berries exposed to mold. Also,
since it’s not transparent, it was hard to highlight the
quality of our product.
Last year though, we started working with PET packaging
and things are looking up. The package is nice and
resistant, but is also much cheaper! We are using the
savings in other parts of the business to keep growing,
but I’m not going to lie, I’ve also used it for other things
like computers for my kids homeschool and kept a couple
of dollars in my pocket at the end of the day.
5th-generation berry farmer
California, USAWith the same kilogram of material, you get: For the cost needed to produce 1 glass bottle,
you can produce up to 8 PET bottles.
x
x CENTS
x
BPA & Phthalate free, as well as the only widely Unlike glass and aluminum, PET can be transported with
available individually packaged resealable option. minimal protection as it is more resistant to damage.«PET keeps
me safe»
The current health emergency caused by the Coronavirus
has taught us many things about our life and ourselves in
a very short period of time. Something I didn’t expect to
learn was the importance of PET for us, as doctors and
patients. To me PET was just the water bottle I used when
running, but it turns out that it’s also present in many
other things, starting with the safety goggles and
facemask I must wear at work.
It’s odd how something like a virus we can’t even see
showed us how vulnerable we really are. Today I trust the
PET in those goggles and facemask to get home safely
and be with my two daughters and husband. Obviously,
we were not expecting this pandemic, but PET helped us
face it head-on.
Currently fighting Covid-19
Toronto, CANYou can easily identify PET products, just look for the
«Educating towards
smarter choices»
From my perspective there have never been more
options in terms of the products we consume every day.
I go to the supermarket and for just one thing, let’s say
orange juice, there are like 3 different packaging
options: PET, glass and cardboard.
My job is to encourage my students by exploring the
current problems we face. After doing a ton of research,
I’ve found that the general misconceptions around PET’s
sustainability are wrong. It is fully recyclable and
recycled at the same rates as its alternatives and made
without hazardous materials. More importantly, I have
the responsibility to teach my kids to dispose whichever
juice bottle they choose, to ensure it gets back to them
another day.
Elementary school teacher
Manchester, UKB E V E R A G E PA C K A G I N G I N D U S T R Y U N I T S B Y S U S T R AT E ( B U N I T S ) 2 0 0 0 - 2 0 1 9 B UNITS
98%
69%
65%
58%
46%
30%
16%
ALUMINUM GLASS OTHER
WORLDWIDE
WORLDWIDE WORLDWIDE PLASTICS«We should
think about the
big picture»
I think society has focused on solving the waste
problem, and we definitely need to solve that, but we
shouldn’t lose sight of the real problem facing our
generation: climate change. Said differently, if all we do
is recycle more, does that mean we are doing less harm
to the environment?
More and more people are doing their part, choosing
fully recyclable materials, putting garbage in the right
place, and starting action in their communities, but I
think that we should also start questioning corporations
about everything that happens before and after we as
consumers make our choice. Fixing the amount of
carbon emissions generated to make the green glass
bottle my sparkling water comes in, and how much
more will be released when it’s recycled, now that’s big
picture stuff.
College student
Sao Paulo, BR187 gr. CO
182 gr. CO 2
x
2
x
Let’s put it into 37 gr. CO
2
x
perspective»
CARBON FOOTPRINT OVER LIFECYCLE, PER 355 ML. BOTTLE.90 gr. CO
x2
Let’s put it into 31 gr. CO
2
10 gr. CO
x
perspective»
2
x
CARBON FOOTPRINT OVER LIFECYCLE, PER 355 ML. BOTTLE.IS MADE AT
TEMPERATURES HOTTER
THAN LAVA.
IS MADE AT A
TEMPERATURE HOTTER THAN THE
SURFACE OF VENUS.
IS MADE AT THE SAME
TEMPERATURE NEEDED
TO MAKE A NICE SLICE OF PIZZA.Think back to the last time you had a burger…
What if I told you, you could wash it down with
and stillThe CO2 emissions generated by
flying from NYC to San Francisco
is equal to that from recycling PET bottles«PET is my
livelihood»
I know it might not sound very attractive, but my job is
to find and separate PET from the rest of your garbage.
Why? Because certain people are willing to pay me good
money for it. There are collection points all around my
city, they buy the PET from me, and then they sell that
material to a recycling plant. I guess it’s good business
for them too, because they never stop coming for more
and more PET.
I tend to focus on PET because contrary to glass and
aluminum, I can find it easily, separate it without much
risk, and carry it since it’s so light and compactable. I
definitely don’t miss getting tetanus shots.
My work allows me to put food on the table for my
family and send my children to school, so I’m very proud
of it. It also gives me great pleasure to see the streets
clean, knowing that in some way, my effort contributed
to achieving that.
Garbage collector for 17 years
Ciudad de México, MX· Increase Recycled PET production
· Meet bottlers’ needs
· Improve Recycled PET technology
· Use higher rPET content
® · Design for higher recyclability
· Willingness to source rPET
· Promote recycling
· Promote use of lower
CO2 products
· Promote and offer
recyclable products
· Offer recycle solutions
at their locations
· Grow gathering network
· Consume responsibly
· Improve PET separation
· Recycle everything
· Improve bale quality
· Separate trash properly«We have
a clear goal»
I have proudly been part of Alpek for the last 4 years.
Sometimes I’m questioned by my family about my work
because they’ve heard negative stories surrounding
plastics. But I know that PET is unlike any other plastic.
I’m convinced that for us to achieve a true change in our
society, the first thing we need is real information, so I
actually see these discussions and questions as
opportunities to share the data I have.
I recently had the chance to log-in to a Webcast where
Pepe Valdez, Alpek’s CEO, talked about the company’s
five-year strategy. It was very focused on increasing the
amount of rPET we make, and helping meet our
customers’ goals. These type of things make me proud
to be part of the Alpek family.
Lab Analyst at Ecopek (Alpek rPET)
Pacheco, ARGAlpek is
leading the way
Today we already recycle
each year
And we’re aiming to reach
To get there, among other initiatives, Alpek has joined
associations such as to develop more trash
gathering infrastructure in major US Cities.1. Recycle! As much as you can, and not just PET, but every product you come across. 2. Promote the use of fully recyclable materials in any place: your home, your work and even in your favorite coffee shop. 3. Share your newfound knowledge about PET and recycling, to speed up our progress towards a truly sustainable future.
Index Alpek at a Glance Key Investment Highlights Financials Relevant Events The Case for PET Appendix
Polyester Value Chain
Crude Oil Refinery Naphtha Reformer/BTX
PET rPET
0.84 ton PTA
per ton PET
0.66 ton PX
per ton PTA
PX PTA
0.34 ton MEG
per ton PET Fibers &
Filaments
0.80 ton Ethylene 0.72 ton EO
per ton EO per ton MEG
Ethane Cracker Ethylene Ethylene Oxide MEG
(From Natural Gas)
58
Source: Alpek, NexantPolypropylene (PP) Value Chain
1.01 ton
Propylene
per ton PP
Ethane /
Propane
59
Source: Alpek, NexantExpandable Styrenics (EPS & ARCEL®) Value Chain
Crude Oil Refinery Naphtha Reformer Pentane
0.06 ton Pentane
Benzene per ton EPS
0.79 ton Benzene
per ton Styrene
Ethylene
0.29 ton Ethylene 0.94 ton Styrene
per ton Styrene per ton EPS
Ethane Cracker Styrene EPS
(From Natural Gas)
Arcel®
Polyethylene 60
Source: Alpek, NexantCaprolactam (CPL) Value Chain
Crude Oil Refinery Naphtha Reformer
Cyclohexane Caprolactam
Benzene
0.94 ton Bz per
ton Cyclohexane
0.99 ton CX
per ton CPL Nylon
Natural Gas Syngas Ammonia Ammonium Sulfate Fertilizers
61
Source: Alpek, NexantLatest Quarter Results
Results and Key Metrics
1Q21 4Q20 1Q20 QoQ (%) YoY (%)
Volume1 (ktons) 1,230 1,248 1,184 (1) 4
Polyester 996 992 967 - 3
Plastics & Chemicals 234 256 217 (9) 8
Production (ktons) 1,621 1,612 1,583 1 2
Polyester 1,346 1,343 1,318 - 2
Plastics & Chemicals 274 269 265 2 3
Revenues 1,614 1,392 1,433 16 13
Polyester 1,069 967 1,094 11 (2)
Plastics & Chemicals 471 374 300 26 57
EBITDA 324 201 111 61 193
Polyester 184 124 58 48 216
Plastics & Chemicals 123 73 49 69 153
Others 17 4 3 337 385
Comparable EBITDA2 203 151 147 35 38
Polyester 89 81 94 10 (5)
Plastics & Chemicals 97 66 50 48 95
Others 17 4 3 337 385
Net Income (Controlling Interest) 121 99 (19) 23 722
CAPEX 30 97 15 (69) 107
Net Debt 1,219 1,185 1,436 3 (15)
Net Debt / EBITDA3 1.6 2.1 1.7
(1) Times: Last 12 months (1) Excludes intracompany sales (2) Excludes carry forward effect (3) Times: last 12 months 62
Source: AlpekLatest Quarter Results
Cash Flow
QoQ
1Q21 4Q20 1Q20 YoY (%)
(%)
EBITDA 324 201 111 61 193
Net Working Capital & Others (192) (16) 100 (1,119) (292)
CAPEX (30) (97) (15) 69 (107)
Financial Expenses (67) (23) (26) (194) (154)
Income Tax (44) (24) (64) (80) 31
Dividends (23) (15) (163) (52) 86
Other Sources / Uses (2) 22 (49) (109) 96
Decrease (Increase) in Net Debt (34) 49 (106) (168) 68
Net Income
TABLE 7 | NET INCOME QoQ
1Q21 4Q20 1Q20 YoY (%)
(in U.S.$ million, except as noted) (%)
Consolidated Net Income 152 118 (16) 29 1,033
Non-Controlling Interest 31 20 3 59 912
Controlling Interest 121 99 (19) 23 722
Earnings per Share (U.S. $) 0.06 0.05 (0.01) 23 723
Avg. Outstanding Shares (million)* 2,112 2,112 2,115 63
Source: Alpek * The same number of equivalent shares are considered in the periods presentedRelevant References: Crude Oil
Price increased during 1Q21 as quotas met & demand for refined products rose
US$/Bbl Brent Crude Oil Price
120
99
100
80
71
64
61
60 52 54
44 42
40
20
0
2014 2015 2016 2017 2018 2019 2020 2021Relevant References: Paraxylene
Px prices increased by 30% in line with Crude Oil price (+36%)
US$/Ton NA Px Contract Price
2,000
1,708
1,635 1,641
1,500 1,382
1,174 1,165
1,077
992 954 955
1,000 937 891
876 876
658 685
590
500
0
2011 2012 2013 2014 2015 2016 2017 2018 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
2019 2020 2021Integrated PET Margins
Margins increased by 36% QoQ due to strong demand
US$/Ton Asian Margins (Px / MEG to PET)
600
China
500
400 382 +36%
370
324 330
304 310
300 277 275
266
214 250 242
227 223 260 227
214 164
200 227 249 PET
208 192 196
145 172 175
165 159
100
155 140
122 110
69 62 64 73 82 78 83 78 68 81 PTA
0
2014 2015 2016 2017 2018 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
2019 2020 2021Relevant References: Propylene & Polypropylene
Increase in both PGP contract prices and PP margins due to polar vortex
NA Propylene Contract Price (PGP) NA Polypropylene Margin (PP to PGP)
cpp cpp
80 76 35
73 32
71
70 69
30
60 27
60
54 25 24
22 22
50 21
45 19
41 20
39 37 17
40 15 16
34 35 15
31 15 13
30 26 12 12
10
20
10 5
0 0
11 12 13 14 15 16 17 18 19 1Q 2Q 3Q 4Q 1Q 11 12 13 14 15 16 17 18 19 1Q 2Q 3Q 4Q 1Q
2020 2021 2020 2021Relevant References: Caprolactam
US$/Ton Asian Caprolactam to NA Benzene Spread (Contract)
2,400
2,100
2,100
1,800
1,500
1,281
1,240 1,231 1,272
1,200 1,137
1,069 1,075
976 943
900 840 862
727 692 739
644 669
606
600 549
300
0
2011 2012 2013 2014 2015 2016 2017 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
2018 2019 2020 2021
68
Source: IHS MarkitStock Highlights (BMV: ALPEK)
Daily Stock Price (MXN)
30
25 Valuation 2018 2019 2020 1Q21
20
15
10 Market Cap. (US$B) 3,040 2,571 1,543 1,931
5
Jan May Sep Jan May Sep Jan Mar Net Debt (US$M) 1,832 1,330 1,185 1,219
2019 2020 2021 EBITDA LTM (US$M) 1,063 850 565 778
Enterprise Value /
4.8 4.9 5.3 4.4
Daily Average Traded Shares & Value (M Shares) EBITDA
(M Shares) (US$M) Price / Earnings 4.0 6.6 7.9 5.3
5 4
4 Price per Share (MXN) 27.61 23.40 15.70 18.57
3
3
2 Exchange Rate
2 19.24 19.26 21.49 20.32
(MXN/USD)
1 1
0 0
J F M A M J J A S O N D J F M A M J J A S O N D J F M
2019 2020 2021
69Alpek’s Investor Relations Team
Email: IR@alpek.com / Phone: +52 (818) 748-1146
Alejandro
• 10 Years at Alfa/Alpek
Elizondo • Previously held roles as Director of Logistics & Procurement at Indelpro, Director of Energy Markets at
IRO Alfa, and Project Leader at The Boston Consulting Group
• BS in Industrial Engineering from Cornell University and MBA from Stanford Graduate School of Business
aelizondo@alpek.com
Alejandra
Bustamante • 9 Years at Alfa/Alpek
IR Manager • Previously held roles in Human Capital, Talent & Culture at Alfa and Axtel
• BA in International Relations from ITESM
abustamante@alpek.com
70Disclaimer
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.
71Corporate Presentation 1st Quarter 2021
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