Trading Statements

Trading Statement Q3 2020 - INEOS Styrolution Holding Limited

INEOS Styrolution Holding Limited (‘INEOS Styrolution’) announces its trading performance for the third quarter of 2020.

Based on unaudited management information INEOS Styrolution reports a historical cost EBITDA before Special Items (‘EBITDA’) for the third quarter of 2020 of €177 million (Q3-2019: €163 million. The third quarter results were positively impacted by non-cash inventory holding gains of approximately €10 million (Q3-2019: gain of €3 million) as a result of the increase in crude oil and product prices. Our replacement cost EBITDA for the third quarter of 2020 was €167 million (Q3-2019: €160 million and Q2-2020: €164 million). Despite the ongoing challenges associated with the COVID-19 pandemic, the procedures and policies adopted by INEOS Styrolution ensured that sufficient resources were available to maintain safe operation of all plants throughout the quarter.

Our Q3-2020 trading results improved compared to Q3-2019 as overall sales volume increased in Polystyrene and ABS standard mainly because of very strong downstream demand in Asia. We did see a strong recovery in our Specialties sales compared to the weak second quarter of 2020.

The Polystyrene EBITDA in the third quarter of 2020 was €59 million (Q3-2019: €44 million). The main reason for the increase were the continued strong sales in Asia with top-of-cycle conditions in the Chinese domestic market. These conditions led to higher sales volumes and margins compared to previous quarters. Demand in the Americas improved, albeit at lower margin levels than in the same period last year because of a competitive market environment. EMEA sales decreased due to the turnaround at our Antwerp, Belgium, site.

The ABS standard EBITDA in the third quarter of 2020 was €41 million (Q3-2019: €16 million). Very strong demand and margins significantly improved the EBITDA of our ABS standard business. As in the Polystyrene business, the Asian and in particular the Chinese domestic market performed at top-of-cycle conditions. Arbitrage from Asia to the other regions closed which enabled volume increase and margin expansion in the Americas and EMEA compared to the same period last year.

The Specialties business reported an EBITDA of €46 million in the third quarter of 2020 (Q3-2019: €51 million). Our Specialties business strongly recovered from the weak performance in the second quarter of 2020 in which lockdown measures affected durable production and demand. Sales volumes increased during the quarter. Sales and EBITDA are close to pre COVID-19 levels.

Styrene Monomer reported a Q3-2020 EBITDA of €31 million (Q3-2019: €53 million). Trading conditions continued to be weak as new capacity comes on-stream in China. Our sales in EMEA were limited as our Antwerp, Belgium, site was in scheduled turnaround in September 2020. Oil and derivative product prices slightly increased, which led to inventory holding gains.

INEOS Styrolution has continued to maintain its focus on cash management and liquidity. Net debt was €1,299 million at the end of September 2020. Cash balances at the end of the quarter were €395 million and availability under the undrawn credit

facilities was €344 million. Net debt leverage was 2.0 times replacement cost EBITDA and 2.4 times historical cost EBITDA as at the end of September 2020.

Capital expenditure was €257 million for 2020 year to date, €85 million of which was spent in the third quarter.