EQUATE Group 1H 2018 Earnings Presentation August 6, 2018 Starting Shortly Your details go here (24) www.equate.com 1 EQUATE Restricted EQUATE Petrochemical Company / www.equate.com
Disclaimer The content of this presentation is for information only, is intended solely for your own and personal reference, and is strictly confidential. Such information is subject to change without notice and its accuracy is not guaranteed and it may not contain all material information concerning the EQUATE Group. We do not make any representation regarding, and assume no responsibility or liability (however arising and regardless of nomenclature) for, the accuracy or completeness of, or any errors or omissions in, any information contained herein. Historical and current performance data are not necessarily indicative of future performance. Materials contained in this presentation may contain unaudited financial information and forward- looking statements. While these views are based on current assumptions which are subject to various risks and may change over time. As such we make no representations in respect of the correctness, accuracy, and/or completeness of such assumptions. Further, no assurance can be given that future events will occur, and/or that projections will be achieved. Past performance is not a reliable indication of future performance. Actual results may differ materially from those projected. This presentation shall not be distributed to any third party without the explicit consent of EQUATE Group’s management under any circumstance. Nothing included herein shall be considered, in any way construed, as an offering of securities. The contents of this presentation are disclosed and provided on non-reliance basis. Your details go here (24) www.equate.com 2 EQUATE Restricted EQUATE Petrochemical Company / www.equate.com
EQUATE Group 1H 2018 Earnings Presentation August 8, 2018 Your details go here (24) www.equate.com 3 EQUATE Restricted EQUATE Petrochemical Company / www.equate.com
Agenda ๏ Group Overview Our Shareholders “ EQUATE has a robust shareholder base ๏ 1H 2018 Financial Results Highlights comprising the Government of Kuwait and Dow Chemical, a global industry leader. 57.5% of owners are public shareholding companies. ๏ 1H 2018 Financial Review PETROCHEMICAL INDUSTRIES Co. ๏ Market and USGC Update 42.5% ๏ Safety & Sustainability THE DOW CHEMICAL COMPANY 42.5% ๏ Q&A BOUBYAN PETROCHEMICAL “ 9% EQUATE is the world’s second largest producer of Ethylene Glycol, the raw material used mainly to QURAIN PETROCHEMICAL manufacture polyester fibers . Your details go here (24) 6% www.equate.com 4 EQUATE Restricted EQUATE Petrochemical Company / www.equate.com
Group Overview Distribution markets EQUATE Group is a global manufacturer and distributor of petrochemical products Kuwait facilities mainly distribute to Asia and METIP* Germany 76% Polyethylene facilities mainly 7% Global Terephthalate distribute to Europe (100% Produced Product in Germany) Ethylene North America Glycol facilities mainly Mix distribute to North America, Sales Volume South America 2.3 Million Metric Tons and Asia Kuwait Canada 44% 34% Polyethylene Credit Rating 17% (100% Produced Others in Kuwait) 22% Baa2 Your details go here (24) BBB+ www.equate.com *METIP: Middle East, Turkey, and 5 EQUATE Restricted EQUATE Petrochemical Company / www.equate.com the Indian Subcontinent region.
Group Overview – EG Group EG Sales by Region (1H 2018) Indian Sub EQUATE Maintains 15% North Asia a Strong Foothold in 50% Europe 11% Key EG Markets Rest of the World 5% Americas 19% Your details go here (24) www.equate.com 6 EQUATE Restricted EQUATE Petrochemical Company / www.equate.com
Group Overview – PE Group PE Sales by Region (1H 2018) Indian Sub South 7% East Asia 17% EQUATE is a World Class Producer of Europe 8% North Asia PE 44% MET&A* 24% Your details go here (24) www.equate.com 7 * Middle East, Turkey & Africa. EQUATE Restricted EQUATE Petrochemical Company / www.equate.com
Financial Results Highlights ($MM) Revenue EBITDA Operating Profit 2,505 1,004 1,147 +34% +48% +27% vs 1H 2017 vs 1H 2017 vs 1H 2017 Net Profit Net Debt to EBITDA 1.5x* 862 Volume ( ‘000 MT) +56% 2,320 vs 1H 2017 Your details go here (24) www.equate.com 8 * 12 month trailing. EQUATE Restricted EQUATE Petrochemical Company / www.equate.com
Financial Review 9
1H 2018 Revenue Revenue by Region Revenue by Product A Closer Look North Asia OTHER EG Volume*: 1,769 +5% Indian Sub 42% 5% Price: $961 +19% 11% EG 68% PET America PE Volume*: 385 +16% 8% s Price: $1,260 +10% 13% PET Volume*: 166 +6% PE Rest of Europe Price: $1,261 +18% 19% the 18% world % Change compared to same period last year 16% The group reported 1H 2018 total revenue of $2,505 MM, a 27% increase compared to the same period last year. Your details go here (24) * ‘000 Metric Tons (MT) www.equate.com 10 EQUATE Restricted EQUATE Petrochemical Company / www.equate.com
Profitability Strong profitability with EBITDA Margin exceeding 45%, driven by operational excellence and effective cost management. Revenue ($MM) EBITDA ($MM) Net Profit ($MM) 862 1,147 2,505 855 551 1,971 Your details go here (24) 1H 2017 1H 2018 1H 2017 1H 2018 1H 2017 1H 2018 www.equate.com 11 EQUATE Restricted EQUATE Petrochemical Company / www.equate.com
Financial Position ($MM) Net Debt to Cash on Hand Gross Debt Net Debt EBITDA EBITDA USD Million USD Million USD Million USD Million 1,642 4,750 3,108 1,147 1.5x* Total Assets Total Liabilities Total Equity 8,584 2,287 8,288 6,297 6,266 2,022 FY 2017 1H 2018 FY 2017 1H 2018 FY 2017 1H 2018 Your details go here (24) * 12 month trailing. www.equate.com 12 EQUATE Restricted EQUATE Petrochemical Company / www.equate.com
Cash Flow and Liquidity Cash Flow Debt Maturity Profile (In $MM) Cash flow from 1,067 $2 b operating activities $1.25 b CAPEX (328) $1 b $1 b $1 b Dividend (1,131) $0.5 b Term Bond Bond Revolver Sukuk Loan (5yr) (10yr) $0 b $0 b $0 b $0 b *Undrawn* (7yr) 2018 2019 2020 2021 2022 2023 2024 2025 2026 (392) Free cash flow Your details go here (24) www.equate.com 13 EQUATE Restricted EQUATE Petrochemical Company / www.equate.com
Market and USGC Update 14
Market A growing market PE + EG Prices 2,000 EQUATE Group is strongly 1,600 positioned to capture the EG and PE growth prospects, high 1,200 profitability levels and overall 800 stability, leveraging sizeable low PE EG cost competitive production 400 capacity, high asset utilization, Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 July-16 Oct-16 Jan-17 April-17 July-17 Oct-17 Dec-17 Mar-18 Jun-18 as well as a global and reliable distribution platform . Your details go here (24) www.equate.com 15 EQUATE Restricted EQUATE Petrochemical Company / www.equate.com
USGC Update USGC EG EG USGC UPDATE PLANNED CAPACITY CAPACITY EG On line in 2019, US Gulf Coast project TODAY: in 2019: CAPACITY presents significant growth opportunity for 2,410 KTA 3,160 750 KTA EQUATE. Key Dates ๏ Leverages Dow’s USGC infrastructure and low -cost, Authorization by EQUATE BOD 26-May-2016 Ground Breaking 8-Aug-2016 world-scale ethylene ๏ Enables further leveraging of MEGlobal’s distribution EPCm Contract Signed 5-Oct-2016 Air Permit Granted 25-Oct-2016 footprint for EG Award Civil Contract 18-Jul-2017 ๏ USGC will further enhance asset mix and profitability. Site Development Complete 24-Aug-2017 Last 90% Model Review Conducted 16-Mar-2018 Major Foundations Complete 21-Jun-2018 Your details go here (24) www.equate.com 16 EQUATE Restricted EQUATE Petrochemical Company / www.equate.com
Safety & Sustainability 17
Operational Excellence 1H 2018 EH&S KPIs Production 100% of plan Asset Mechanical Reliability 99% AMR In EQUATE, operational excellence in EH&S goes hand Recordable Injury Rate, accidents per 200,000 work hours. 0 RIR in hand with top performance in reliability and assets utilization PSCE energy. 0 Process Safety & Containment Event. This applies to containment losses, reactive chemicals events and releases of hazardous process Motor Vehicle Accidents. 0 MVA Safe Work Hours This includes all employees, contractors and visitors 58 million The total of safe work hours without a day away from work case. Your details go here (24) NOV to non-compliance to the environmental regulation 0 Notice of Violation from EPA or any other regulatory authority due www.equate.com 18 EQUATE Restricted EQUATE Petrochemical Company / www.equate.com
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