10/21/2020

speaker
LaTanya
Conference Operator

Greetings and welcome to today's conference for the ALPAC third quarter 2020 conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. I would now like to turn the conference over to your host today, Mr. Alejandro Elizondo. Please proceed, sir.

speaker
Alejandro Elizondo
Investor Relations Officer

Thank you, LaTanya. Good morning. And welcome to ALPEX Third Quarter 2020 Earnings Webcast. I'm Alejandro Elizondo, ALPEX Investor Relations Officer, and I have the pleasure of being joined by our CEO, Pepe Valdez, and our CFO, Jose Carlos Pons. Please turn the slide to. This presentation is divided into two parts. First, Mr. Valdez and Mr. Pons will provide commentary on ALPEX Third Quarter 2020 performance and an update on relevant events. Afterwards, we will move on to the Q&A session. Please note that the information discussed today may include forward-looking statements regarding the company's future financial performance and prospects, which are subject to risks and uncertainty. Actual results may differ materially, and the company cautions the market not to unduly rely on these forward-looking statements. ALPIC undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Today's webcast presentation is being recorded and will be available on the company website at www.alpec.com. I will now turn the call over to Mr. Pepe Valdez.

speaker
Pepe Valdez
CEO

Thank you, Alejandro. Good morning, everyone, and thank you for joining us today. I hope you are all staying healthy and well. Turning to slide three, I would like to start by highlighting the four main topics of this call. First, Company continues to surpass expectations amidst a challenging COVID-19 pandemic environment. Secondly, ALPEC has enhanced its financial standing, which Jose Carlos will discuss in detail later today. Third, as many of you know, ALPHA has announced its Unlocking Value Initiative. This means there will be changes for ALPEC, which we will explain later in the presentation. And fourth, we have reached an agreement with Nova Chemicals to acquire the Styrenic business and want to share some details regarding the deal as well as why it was so well aligned with our long-term growth strategy. On slide four, let us discuss Alpek's performance amid the continuing COVID-19 pandemic. Before I go into specifics, I would like to express the deep sense of pride I feel by the way our employees have continued delivering results during these complicated times. They have not only ensured that operations go uninterrupted, we have together as a company achieved the best quarterly volume performance in our history. Working together during times of crisis, is a true testament to teamwork, and we are proud to have that as a core value at ALPEC. We have sought to protect our employees' health and safety with various measures implemented since the start of the year. These have proven successful, and I'm happy to report that the number of active cases at ALPEC continues to be low and is declining week after week. During the third quarter, we saw a gradual decline of COVID-19's effect on the overall business environment. ALPEX demand has proven resilient, reaching record overall volumes with a performance that was largely driven by the polyester segment. It is also worth noting that the plastics and chemical segment experienced a sharp volume recovery. As demand for the construction industry, which uses EPS as insulation, and the automotive industry, which uses PP for light weighting, both rebounded quickly from their second quarter lows. Let me take a moment to elaborate on the changes we have seen to consumer purchasing patterns, which are useful in explaining our strong polyester volume. As social distancing measures continue to relax, and consumers return to public spaces, such as restaurants, movie theaters, or sporting events, there has been a marked preference for products that promote hygiene and safety. As such, PET bottles have been the favored choice over open beverage containers, as the latter requires higher person-to-person contact. This is an important trend which we will continue monitoring going forward. but we believe that based on current post-pandemic demand patterns, it's a trend that could be long-lasting. Switching over to relevant events, the financial restructuring agreement between M&G Mexico and its creditors was successfully concluded during the third quarter. Under the agreement, ALPEC will recover $160 million in guaranteed debt plus interest over the next five years with approximately $50 million as early as the end of this year. Moreover, ALPEC will also continue supplying the PTA required by MNG Mexico's PET facility, ensuring stable operations at MNG Mexico as ALPEC recovers its debt, as well as the steady offtake for our PTA site in Altamira. Thank you for your attention. At this point, I will turn the call over to Jose Carlos. who will go into more detail regarding our financial results.

Disclaimer

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