Trading Statements

INEOS Enterprises Holdings Limited Unaudited Interim Trading Statement Q4-2020

INEOS Enterprises Holdings Limited (“INEOS Enterprises”) reports its trading performance for the fourth quarter 2020.

Based on unaudited management information, INEOS Enterprises’ EBITDA before Special Items (“EBITDA”) for the fourth quarter 2020 was €94M. This compares to an EBITDA of €84M for the fourth quarter 2019 and €92M in the prior quarter. Full year 2020 EBITDA was €390M, compared to €332M for full year pro-forma 2019.

We are pleased to report another very strong quarter’s results, that continue the recovery that we have seen building across our group, initially through Q3, but also through to the end of the year. Many of our businesses have seen demand above seasonal norms as customers and end markets seek to catch up previously lost output from earlier in the year. Our results for the year are ahead of our initial expectations and the significant diversification of products and end sectors continues to support the Enterprises group and has proved the business’ ability to operate against a backdrop of challenging markets.

Enterprises has continued to operate all sites through Q4 with Covid-19 compliant processes in place. Given our importance to supporting the fight against Covid-19, resources have been made available to ensure the safety of our people and preserve the continuity across the business. We are extremely proud of the way our people and businesses have been able to assist in the response to the pandemic across the year.

As with prior quarters and in line with our conservative financial policy, we have maintained a prudent capital position with continued control around our operating cost base. At the end of the year we report cash balances of €261M and net debt of £1,065M, resulting in a net leverage of c.€2.7x. Our €300M securitisation facility was undrawn at year end.

During this quarter, INEOS Enterprises delivered additional cost savings of c.€16M, bringing cumulative cost savings in our acquired businesses to date to c.€88M. These savings represent underlying operational improvements to the businesses and do not include any temporary effects from Covid-19.

In Q4 Solvents’ EBITDA was €28M, compared to €11M in Q4 2019 and €23M in Q3 2020. This result is in line with the structural changes experienced in our core markets; with key products being used in the growing end markets of hygiene and sanitisation. The market is becoming more balanced across supply and demand after the destocking through Q3 and margins remain strong as a result of low energy and feedstock prices. Our BDO business recorded a strong Q4, underpinned by volume improvement, notably into the Asian market, which was driven by demand for clothing.

Composites’ Q4 EBITDA was a record high of €40M, compared to €29M in Q4 2019 and €35M in Q3 2020. Composites continues to be well placed to capitalise on the recovery in the North American and EMEA markets. Q4 saw volumes ahead of seasonal expectations. Strong demand in the DIY and home improvement markets have supported applications notably into European engineered stone and bathroom furniture. The North American markets have also seen increased demand in the marine and recreation vehicle end markets.

Pigments reported Q4 2020 EBITDA of €29M, compared to €36M Q4 2019 and €33M in Q3 2020. As with Composites, Pigments saw good demand through Q4, ahead of initial expectations. Margins remain stable across the quarter and consistent throughout the year. The North American market was ahead of seasonal expectations in industrial coatings and DIY applications as customers continue to target catch-up on lower utilisations earlier in the year.

Chemical Intermediates reported Q4 2020 EBITDA of €3M compared to €8M in Q4 2019 and €6M in Q3 2020. Sulphur businesses were supported by stable volumes into water treatment through the quarter, though demand was impacted by Hurricane Delta. INEOS Joliet has seen recovery in volume given their links with our Composites business and we saw the PIA market continue to show signs of improvement with price increases during the quarter. Compounds demonstrated recovery in the quarter, albeit with lower volumes than in the prior quarter as is seasonally expected.

Our Hygienics business grew headcount and market presence through the quarter and continued to build its presence. There was a successful TV campaign started in the quarter, we began the sales of our dispenser units for home and retail locations and we continued to gain significant retail sales customers in the quarter. In line with our plans, we continue to be in an investment phase with the business. EBITDA for the quarter, including marketing and investments, was €(6)M.