Westlake Chemical Corporation Fourth Quarter 2019 Westlake Chemical - PowerPoint PPT Presentation

Westlake Chemical Corporation Fourth Quarter 2019

Westlake Chemical Corporation A Leading Integrated Materials Company (2019) $8,118 Million Net Sales $1,407 Million EBITDA (1,2) $421 Million Net Income (3) Our mission is to create long term value with a risk adjusted return approach. Strategic Action Update: Our Mission: Vinyls (2019) • Disciplined, financially • Profitable bottom line $1,032 million EBITDA (1) conservative strategy provides growth. for opportunistic growth: 72% of total EBITDA • In businesses we o Increased Ethylene JV ownership understand. to expand integrated vinyls Olefins (2019) margins. • Globally in areas we can o Global PVC, VCM & Chlor Alkali gain an edge. $407 million EBITDA (1) expansions 2019 -2021. • In a disciplined and • Opportunistic acquisitions 28% of total EBITDA opportunistic manner. continue to diversify and grow value. 2 Notes: (1) See page 19, (2) Includes WLK Corporate EBITDA, (3) Net Income attributable to WLK

Westlake’s Commitment to Advancing Sustainability Westlake’s commitment to corporate social responsibility is formed by the company’s longstanding core values: • Health, Safety & Environmental - The vigilant stewardship of the environment and sustainability are of utmost importance and at the forefront of everything we do. • Our People - Support, develop and inspire our people to achieve their personal best and treat them with dignity and respect. • Quality & Continuous Improvement – An intensive practice of “never-ending process of improvement”. • Competitiveness - Providing innovative and useful products, maintaining high standards of customer service and operational excellence with a constant focus on managing costs. • Citizenship - Recognizing the importance of supporting the communities in which we work and live and make it a priority to take an active role in making these communities better. Industry Associations Westlake is a proud partner with the following organizations to drive sustainable action to eliminate plastic waste, capture more flexible food packaging waste for recycling, and promote a more sustainable relationship with the environment. Protecting the Environment Westlake has numerous programs designed to promote safe, ethical, environmentally and socially responsible practices including: a world wide recycling program, operating in an energy efficient manner that stabilizes the power grids, and reducing water usage and emissions. Over the past five years Westlake has reduced Sulphur Dioxide emissions to almost zero, reduced energy usage per ton of global production and achieved a nearly 30% reduction on CO 2 emissions. 3

Westlake, A Global Diversified Product Mix A Global Leading Producer: Chlor Alkali PVC Low Density Polyethylene 2nd largest Chlor Alkali 2nd largest producer of • Largest specialty autoclave producer in the world, PVC in the world leveraging LDPE producer globally. capitalizes on globally the high level of product • 2nd largest producer of low cost natural gas in integration and globally low Low Density Polyethylene North America. cost feedstocks. in the Americas. World Wide Presence: Europe North America Asia Global leader in Specialty Highly integrated, low High quality PVC resin and cost production of PE, PVC, Leading global PVC film products in a growth compounder: PVC & Caustic Soda: region: • 6 Chemical sites. • 11 Chemical sites. • 2 Chemical sites. • Downstream value added • 20+ Polymer product • 3 Polymer product sites. polymer compound sites. products. 4

Strategic Growth Diversifies Product Lines and Further Strengthens Integration Advantage Calvert City • Additional Ethylene ownership in JV Expansion cracker Capacity (MM lbs.) • Acquired Axiall Vinyls Olefins • Acquired NAKAN • Petro 1 Ethylene Expansion • Acquired DaVinci 45,000 Company • Acquired Calvert City CA plant IPO • Acquired Vinnolit • Started Styrene Begins • Started Petro 2 • Calvert City Ethylene / • Acquired 3 Pipe Plants Operation in PVC Expansion 40,000 Lake Charles 35,000 • Acquired 3 Started Suzhou Pipe Plants PVC Plant • 20th Anniversary • Calgary Window 30,000 Acquired Geismar • Acquired Longview Plant VCM/PVC Plant • Started Petro 1 PE plants • Acquired PVC Plant Started Started • Acquired Certain 25,000 Suzhou China Poly 3 Teed specialty Film Plant pipe business • Petro 2 Ethylene & Geismar Chlor 20,000 Acquired Alkali Expansion 1 Pipe Plant Acquired VCM 15,000 in Calvert Increased LDPE 10,000 By 500 MM/lbs 5,000 0 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 5

Globally Advantaged Cost Position With A Very High Degree of Product Integration Westlake Chemical has a strategic cost advantage: • North America has a cost advantaged, abundant supply of Ethane from shale gas, electricity from natural gas and ample salt supply when compared to global markets. • Integration from feedstock to final product captures margin across the production chain and throughout the economic cycle. End Markets All ethane feedstock • Flexible packaging capability Polyethylene • Shrink wrap 2.6 Billion lbs Ethylene • Trash bags 4.8 Billion lbs North • Tires Styrene American • Latexes for paint & coatings 570 Million lbs Merchant Ethylene Vinyls Purchases • Flooring • Roofing ~1.1 Billion PVC Vinyls • Wall paper lbs • Films Chlorine 7.9 Billion lbs Products • Coating 7.1 Billion lbs Key: 3.4 Billion • Automotive lbs • Artificial leather Expansion • Fencing +55 Million lbs • Decking • Siding Olefins • Pipe Caustic Soda Vinyls Chlorinated Products 7.9 Billion lbs • Pulp & paper 2.3 Billion lbs Chlorinated • Glass Products • Alumina +60 Million lbs Westlake 6

Low Cost Producer of PVC Combined with High Integration Captures Margin Chlor-Alkali Overview of the Vinyls Chain Majority of Margin Captured in Chlorinated Caustic Products Chlor-Alkali and Ethylene. Soda Vinyl Ethylene PVC Polyvinyl Chlorine Chloride Dichloride Average Vinyls Industry Margin (Vinyls Chloride Monomer (EDC) Products) (PVC) Distribution Over the Last (VCM) 10 Year Cycle 9% Merchant Ethylene Sales 39% • Westlake has numerous PVC debottlenecks that will Chlor Alkali 52% capture more integrated margin Ethylene • Integration has allowed Westlake to operate its chlorovinyls plants at higher operating rates than US industry average. PVC Resin • Increased ownership in the Westlake – Lotte JV Ethylene cracker expands Ethylene integration advantage. • Through backward integration into Chlor Alkali (shale gas based power) and ethylene (shale gas based ethane), Westlake is one of the lowest cost PVC producers globally. • Cost competitive PVC exports as Westlake sits at the low end of the cost curve. • Complexity of vinyls chain drives value and raises barriers to entry. 7 Source: IHS Markit

Global Chlorovinyls Leader with Enhanced Scale World PVC Demand 5,000 Westlake is the second largest producer of PVC in the World. 4,000 2019 3,000 Global kMT PVC 2,000 capacity (KMT) 1,000 0 SHINTECH Westlake Formosa Inovyn Mexichem World Caustic Soda Demand 6,000 Westlake is the second largest producer of Chlor Alkali in the 5,000 2019 World. 4,000 Global Chlor- kMT 3,000 Alkali 2,000 capacity 1,000 (KMT) 0 Olin Westlake Oxy Formosa Dow Inc. Solid Fundamentals for PVC and Chlor Alkali: • Supply / demand balance with minimal announced capacity additions in both PVC and Chlor Alkali expected to provide healthy forward fundamentals. • Westlake is a globally low cost producer of PVC and Chlor Alkali. Source for both charts: IHS Markit 8

Westlake is the Global Leader in Specialty PVC Westlake / Vinnolit is the leading producer of specialty PVC 600 2019 Specialty PVC global capacity: ~4,200 KMT 500 Capacity (kmt) 400 300 200 100 0 Westlake Orbia Inovyn Formosa Shenyang Anhui Xinjiang Kaneka Kem One Xinjiang (Germany, (Mexico, (EU) (Taiwan, (China) Hongsifang Zhongthai (Japan) (EU) Tianye UK) USA, USA, (China) (China) (China) Germany) China) 30 Westlake’s Vinnolit operations provide Specialty PVC Creates cents per pound Margin Advantage Over specialty PVC which: Commodity PVC • Delivers higher margins and diversifies end market demand vs. commodity PVC. • Broadens Westlake’s market channels. 0 5 Year Ave (2015- 2019) Source: IHS Markit 9

Fundamentals in Chlor Alkali Constructive Significant under investment positions the industry to benefit as demand grows Over/ Under Investment in World Caustic Capacity Capacity Compared to Relative Change in Forecast 5% World GDP 3% 1% -1% -3% -5% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 • Integrated facilities in North America benefit from low cost feedstocks and natural gas. • Outlook for demand growth outpaces industry capacity additions. Source: IHS Markit, IMF 10