LyondellBasell Industries N : Q4 2020 Presentation Slides (PDF)

FOURTH QUARTER 2020 EARNINGS

January 29, 2021

CAUTIONARY STATEMENT AND

INFORMATION RELATED TO FINANCIAL MEASURES

CAUTIONARY STATEMENT

The statements in this release and the related teleconference relating to matters that are not historical facts are forward-looking statements. These forward-looking statements are based upon assumptions of management of LyondellBasell which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. When used in this release, the words "estimate," "believe," "continue," "could," "intend," "may," "plan," "potential," "predict," "should," "will," "expect," and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Actual results could differ materially based on factors including, but not limited to, market conditions, the business cyclicality of the chemical, polymers and refining industries; the availability, cost and price volatility of raw materials and utilities, particularly the cost of oil, natural gas, and associated natural gas liquids; uncertainties related to the extent and duration of the pandemic-related decline in demand, or other impacts due to the COVID-19 pandemic in geographic regions or markets served by us, or where our operations are located, including the risk of prolonged recession; competitive product and pricing pressures; labor conditions; our ability to attract and retain key personnel; operating interruptions (including leaks, explosions, fires, weather-related incidents, mechanical failure, unscheduled downtime, supplier disruptions, labor shortages, strikes, work stoppages or other labor difficulties, transportation interruptions, spills and releases and other environmental risks); the supply/demand balances for our and our joint ventures' products, and the related effects of industry production capacities and operating rates; our ability to achieve expected cost savings and other synergies; our ability to successfully execute projects and growth strategies; future financial and operating results; benefits and synergies of any proposed transactions; legal and environmental proceedings; tax rulings, consequences or proceedings; technological developments, and our ability to develop new products and process technologies; potential governmental regulatory actions; political unrest and terrorist acts; risks and uncertainties posed by international operations, including foreign currency fluctuations; and our ability to comply with debt covenants and to amend, extend, repay, redeem, service, and reduce our debt. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the "Risk Factors" sections of our Form 10-K for the year ended December 31, 2019, and our Forms 10-Q for the quarters ended March 31, 2020, and September 30, 2020. which can be found at www.LyondellBasell.com on the Investor Relations page and on the Securities and Exchange Commission's website at www.sec.gov. There is no assurance that any of the actions, events or results of the forward-looking statements will occur, or if any of them do, what impact they will have on our results of operations or financial condition. Forward-looking statements speak only as of the date they were made and are based on the estimates and opinions of management of LyondellBasell at the time the statements are made. LyondellBasell does not assume any obligation to update forward-looking statements should circumstances or management's estimates or opinions change, except as required by law.

INFORMATION RELATED TO FINANCIAL MEASURES

This presentation makes reference to certain "non-GAAP" financial measures as defined in Regulation G of the U.S. Securities Exchange Act of 1934, as amended.

EBITDA, as presented herein, may not be comparable to a similarly titled measure reported by other companies due to differences in the way the measure is calculated. We calculate EBITDA as income from continuing operations plus interest expense (net), provision for (benefit from) income taxes, and depreciation & amortization. EBITDA should not be considered an alternative to profit or operating profit for any period as an indicator of our performance, or as an alternative to operating cash flows as a measure of our liquidity. We also present EBITDA, net income and diluted EPS exclusive of adjustments for ("LCM") and impairment. LCM is an accounting rule consistent with GAAP related to the valuation of inventory. Our inventories are stated at the lower of cost or market. Cost is determined using the last-in,first-out ("LIFO") inventory valuation methodology, which means that the most recently incurred costs are charged to cost of sales and inventories are valued at the earliest acquisition costs. Fluctuation in the prices of crude oil, natural gas and correlated products from period to period may result in the recognition of charges to adjust the value of inventory to the lower of cost or market in periods of falling prices and the reversal of those charges in subsequent interim periods as market prices recover. Property, plant and equipment are recorded at historical costs. If it is determined that an asset or asset group's undiscounted future cash flows will not be sufficient to recover the carrying amount, an impairment charge is recognized to write the asset down to its estimated fair value. Estimated EBITDA, as presented for future projects is calculated as volume multiplied by average historical margins. Estimated EBITDA cannot be reconciled to net income due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including adjustments that could be made for interest expense (net), provision for (benefit from) income taxes, depreciation & amortization and other changes reflected in the reconciliation of historical numbers, the amounts of which, based on historical experience, could be significant.

Cash from operating activities yield from EBITDA excluding LCM and impairment is a measure that provides an indicator of a company's operational efficiency and management. Cash from operating activities yield from EBITDA excluding LCM and impairment, as presented herein, may not be comparable to similarly titled measures reported by other companies due to differences in the way the measures are calculated. For purposes of this presentation, cash from operating activities yield from EBITDA excluding LCM and impairment means cash from operating activities divided by EBITDA excluding LCM and impairment.

Change in cash working capital represents changes in Accounts receivable, Inventories and Account payable that (provided) used cash in our consolidated statements of cash flows.

Free cash flow is a measure of profitability commonly used by investors to evaluate performance. Free cash flow, as presented herein, may not be comparable to similarly titled measures reported by other companies due to differences in the way the measures are calculated. For purposes of this presentation, free cash flow means net cash provided by operating activities minus capital expenditures.

Additionally, liquidity is a measure that provides an indicator of value to investors. For purposes of this presentation, liquidity includes cash and cash equivalents, restricted cash and restricted cash equivalents, short term investments, and availability under our Senior Revolving Credit Facility and our Receivables Facility.

Reconciliations for our non-GAAP measures can be found on our website at www.LyondellBasell.com/investorrelations.

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MAINTAINING OUR COMMITMENTS

BUILDING A STRONGER COMPANY FOR OUR INVESTORS, CUSTOMERS AND EMPLOYEES

PROTECTING EMPLOYEES

Maintained a safe work environment during pandemic

No company-wide workforce reductions

Bolstered diversity, equity and inclusion efforts

Maintained 401(k) and other benefits

SAFEGUARDING INVESTORS

Committed to investment-grade credit rating

Funded dividend and capex with cash from operations

Actively managed capex and working capital

Accelerated cost efficiency initiatives

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2020 HIGHLIGHTS

MAINTAINED STRATEGIC FOCUS WHILE NAVIGATING THE PANDEMIC AND RECESSION

$1.4 B		$3.3 B		$4.24		$5.2 B
NET INCOME		EBITDA		DILUTED EPS		LIQUIDITY
$1.9 B		$3.9 B		$5.61
NET INCOME		EBITDA		DILUTED EPS
ex. LCM and Impairment		ex. LCM and Impairment		ex. LCM and Impairment

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CONSISTENT SAFETY FOCUS

FACIAL COVERING

IMPROVING SAFETY PERFORMANCE IN A CHALLENGING YEAR

Injuries per 200,000 hours worked 0.5

0.4

0.3

SOCIAL DISTANCING

0.2

0.1

2016	2017	2018	2019	2020
		LyondellBasell			ACC Top Quartile

HEALTH SCREENING

5	Source: American Chemistry Council (ACC) and LyondellBasell. Note: Number of hours
	worked includes employees and contractors. Data includes safety performance from the

acquisition of A. Schulman from August 21, 2018 forward.

ADVANCING CIRCULAR PLASTICS

QCP PARTNERSHIP EXPANDS CAPACITY AND FOOTPRINT

EXPANDING LYB'S MECHANICAL RECYCLING NETWORK

2018 - Geleen, The Netherlands

2020 - Blandain, Belgium

ADVANCING PRODUCT OPTIONS

Expands the number of end-use applications

Assists brand owners to achieve sustainability goals

SUPPORTING SUSTAINABILITY INITIATIVES

Expands LYB plastic waste recycling capacity to 55 K ton per year

Goal: Produce and market 2 MM ton of recycled and renewable- based polymers annually by 2030

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STRONG CASH CONVERSION

DIVIDEND AND CAPITAL INVESTMENTS COVERED BY CASH FROM OPERATING ACTIVITIES

Change in Cash Working Capital			Cash Conversion
USD, millions
$100										100%
0										90%
-100
										80%
-200
-300										70%
-400										60%
2018	2019	2020
					Cash Conversion		Change in Cash Working Capital

88%

CASH CONVERSION 2020

$3.4 B

CASH FROM OPERATING ACTIVITIES

2020

$1.4 B

DIVIDENDS PAID

2020

7	Note: Cash Conversion equals cash from operating activities divided by EBITDA excluding LCM and impairment.

CASH GENERATION AND DEPLOYMENT

ADVANCING ON OUR GROWTH STRATEGY DESPITE ECONOMIC DOWNTURN

DELIVERING RESULTS

Cash from operating activities $3.4 B

GROWING THROUGH INVESTMENT

Ramped up PO/TBA activity in 4Q20

Established Bora JV in China

Formed Louisiana PE JV

PROVIDING AMPLE LIQUIDITY

$5.2 B total liquidity

Well positioned for debt reduction

USD, billions $6

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2	$2.5

$1.1

1Q20	Cash from	Dividends & CAPEX	Change in	Joint Venture Other	4Q20
Beginning	Operating	Share	Debt	Investments	Ending
Balance	Activities	Repurchases			Balance

8	Note: Beginning and ending cash balances include cash and cash equivalents, restricted cash, and liquid investments. CAPEX includes growth and sustaining
	(maintenance and HSE) capital.

LYONDELLBASELL 2021 MODELING INFORMATION

CAPITAL

EXPENDITURES

MAJOR

PLANNED

MAINTENANCE EBITDA IMPACT ~$170 MM

	Sustaining CAPEX
Total CAPEX	~$1.0 B
~$2.0 B	Profit Generating CAPEX
	~$1.0 B

1Q 2Q 3Q 4Q

O&P - EAI

~$10 MM ~$15 MM

I&D	~$20 MM ~$60 MM ~$35 MM ~$30 MM

FINANCIAL

METRICS

Net Interest Expense

~$430 MM

Depreciation & Amortization

~$1.4 B

Pension Contribution

~$100 MM

Pension Expense

~$100 MM

Effective Tax Rate

~17%

9	Note: Net interest expense includes ~$90 MM capitalized interest. Major planned maintenance EBITDA impact is the estimated lost production multiplied by
	expected future margins.

RECOVERING MARKETS

DIVERSE GLOBAL PORTFOLIO REFLECTING SIGNIFICANT ECONOMIC RECOVERY

EBITDA ex. LCM and Impairment USD, billions

$1.5

1.0

0.5

4Q19	1Q20	2Q20	3Q20	4Q20
		EBITDA			EBITDA ex. LCM and Impairment

STRONG CONSUMER DRIVEN DEMAND

Packaging and non-durable products

FURTHER INDUSTRIAL SECTOR RECOVERY

Automotive and other durable products

PERSISTENTLY LOW MOBILITY

Transportation fuels

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GLOBAL POLYETHYLENE

FUTURE OPERATING RATES LIKELY COMPARABLE TO PREVIOUS CYCLES

2016 FORECAST

Effective Operating Rate

• Consultants predicted low operating rates 2017-2018

●. Typical delays in new capacity maintained high operating rates

100%

95%

Actual

2020 ENVIRONMENT

• Global demand growth was 4%
• Persistent increases in demand from lifestyle changes

CURRENT FORECAST

90%

85%

80%

Balanced Market

• Consultants predict a low operating rate in 2022
• Capacity additions forecasted, primarily in China
• Typical delays likely to improve the operating rate forecast

2015

2017

2019

2021

2023

2025

2016 Forecast

Current Forecast (2021: 4% demand growth, 4% after)

Current Forecast (2021: 7% demand growth, 4% after)

11	Source: IHS Markit and LyondellBasell. Dataset from IHS Markit Fall 2020 forecast and December 2020 quarterly update. 2020 demand growth has been
	adjusted to 4% and the effective operating rate assumes 8% industry downtime.

OLEFINS & POLYOLEFINS - AMERICAS

TIGHT MARKETS DROVE MARGIN AND VOLUME IMPROVEMENTS

EBITDA ex. LCM

USD, millions

	$722
	OLEFINS
	Higher ethylene and propylene prices driven by
$523	tight supply
	$477

$404	Volumes increased due to higher demand

$210	POLYOLEFINS
	Polyethylene and polypropylene spreads improved

LOUISIANA JV

4Q19	1Q20	2Q20		3Q20		Volume Margin	Other	4Q20
								Accretive in 4Q20
				EBITDA		EBITDA ex. LCM

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OLEFINS & POLYOLEFINS - EUROPE, ASIA & INTERNATIONAL

IMPROVING DEMAND AND INCREASED BORA JV CONTRIBUTION DROVE IMPROVED PROFITABILTY

EBITDA ex. LCM

USD, millions

$251

$225 $219

$144

$131

4Q19 1Q20 2Q20 3Q20 Volume Margin Equity Other 4Q20 Income

EBITDA EBITDA ex. LCM

OLEFINS

Volume increased with higher operating rates Margins lower due to higher maintenance expense

POLYOLEFINS

Polyethylene and polypropylene volume increased

EQUITY INCOME

Bora JV accretive in 4Q20

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INTERMEDIATES & DERIVATIVES

EARNINGS GROWTH MUTED BY LOW OXYFUELS MARGINS

EBITDA ex. LCM

USD, millions

$329

$281	PO & DERIVATIVES
$245

Margins increased due to strong Asia demand and market

$196tightness

		$121							OXYFUELS & RELATED PRODUCTS
									Volumes improved slightly
									Margins decreased driven by low gasoline pricing and
									higher butane costs
4Q19	1Q20	2Q20		3Q20		Volume Margin	Other	4Q20
				EBITDA		EBITDA ex. LCM

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ADVANCED POLYMER SOLUTIONS

VOLUME IMPROVEMENT FROM REBOUNDING AUTOMOTIVE MANUFACTURING

EBITDA ex. LCM

USD, millions

			$126	COMPOUNDING & SOLUTIONS
$115	$117		Volumes increased with improved automotive demand
				Margins declined on product prices lagging feedstocks
$62
$23				SYNERGIES
				Beginning to capture >$200 MM annual run rate
				Increasing visibility as volumes continue to recover

4Q19	1Q20	2Q20		3Q20		Volume Margin	Other	4Q20
				EBITDA		EBITDA ex. LCM

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POLYPROPYLENE DURABLE GOODS

MARKETS SHOWING STRENGTH INTO FIRST QUARTER 2021

CHINA	LYB
NORTH AMERICA & EUROPE
PP DEMAND
DAYS OF PP INVENTORY HIT
+10%	ALL-TIME LOWS
2020 vs. 2019	During 4Q20

NORTH AMERICA	CHINA
ROOFING DEMAND	AUTOMOTIVE PRODUCTION
+5%	+6%
4Q20 vs. 4Q19	4Q20 vs. 4Q19

LYB PPC, EP and Catalloy Sales Volume

Indexed to 1Q19

100%

90%

80%

70%

60%

50%

1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 Jan '21 Fcst.

16	Source: LyondellBasell, IHS Markit, ICIS, and ChemOrbis
	Note: Roofing demand is for single-ply thermoplastic polyolefin roofing. January forecast based upon LyondellBasell January order book multiplied by 3.

REFINING

LOW DEMAND FOR GASOLINE AND JET FUEL CONTINUE TO PRESSURE PROFITABILITY

EBITDA ex. LCM and Impairment

USD, millions

$22

$(80)	$(14)		$(74)
$(121)

4Q19	1Q20		2Q20	3Q20	Volume Margin	Other	4Q20
			EBITDA		EBITDA ex. LCM and Impairment

CRUDE THROUGHPUT

80% utilization rate matching reduced demand

MARGIN IMPROVED

Lower fixed cost and commercial agility Maya 2-1-1 increased by $0.22 to $10.11

3Q20 CHARGES

$582 MM impairment

$8 MM restructuring costs

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TECHNOLOGY

LICENSING PROFITABILTIY REDUCED DUE TO TIMING

EBITDA

USD, millions

$138

$112 $111

$56

$45

4Q19

1Q20

2Q20

3Q20

4Q20

LICENSING

Decreased number of revenue milestones

CATALYST

Margins increased due to inventory mix

Volumes decreased as customers managed inventories at year-end

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DISCIPLINED INVESTMENTS DRIVING GROWTH AND VALUE

HIGHER EBITDA AND LOWER CAPEX: A CLEAR STRATEGY FOR INCREASING FREE CASH FLOW

				2022	2023
			4Q 2020	PO/TBA
			Sinopec PO/SM JV
		4Q 2020	Louisiana	Channelview, Texas
	3Q 2020	Ningbo, China
	Advanced	Integrated PE JV	Bayport, Texas
	Estimated EBITDA
2Q 2020	Bora Integrated	Polymer	Lake Charles, LA	Estimated EBITDA
~$45 MM/yr
Hyperzone HDPE	Cracker JV	Solutions	Estimated EBITDA	~$450 MM/yr
La Porte, Texas	Panjin, China	Synergies	~$330 MM/yr
Estimated EBITDA	Estimated EBITDA	~$200 MM/yr
~$170 MM/yr	~$150 MM/yr

Reducing CAPEX to ~$2 B/yr 2020-2023

FREE CASH FLOW

19	Note: Estimated EBITDA for projects and joint ventures is nameplate capacity multiplied by 2017-2019 average cash margins assuming 40% of the PE, PO and MTBE from
	U.S. production exported to Asia. The results or returns of growth projects are presented for illustrative purposes only and not intended to be a guarantee or representation

of the Company's expectations for future performance.

FOURTH QUARTER 2020 SUMMARY & OUTLOOK

COMMITTED TO DELIVERING VALUE THROUGH CYCLES

COMMITMENTS	MARKETS	FREE CASH FLOW	PATH
KEPT	IMPROVING	GROWING	FORWARD
Supported employees	Robust global PE/PP demand	APS synergies	Further deleveraging
Advanced sustainability		Hyperzone PE & PO/TBA	Maintaining capital discipline
initiatives	Increasing automotive and
Maintained	construction demand	Bora, Louisiana and PO/SM	Optimizing portfolio
	Joint Ventures
investment-grade rating	Upside from increasing
	Advancing sustainability
	transportation fuel demand
Preserved dividend	Lower CAPEX	& DEI initiatives

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