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Q4 2019 Trading Statement INEOS Group Holdings S.A.

Q4, 2019 Trading Statement

INEOS Group Holdings S.A. (‘IGH’ or ‘INEOS’) announces its trading performance for the fourth quarter of 2019. 

Based on unaudited management information INEOS reports that EBITDA for the fourth quarter of 2019 was €409 million, compared to €356 million for Q4, 2018 and €514 million for Q3, 2019. Full year EBITDA was €1,945 million compared to €2,288 million for 2018.

North American markets were solid, taking full benefit from their current feedstock advantage. Market conditions in Europe were subdued, and markets in Asia have seen some weakness in the quarter. 

O&P North America reported EBITDA of €120 million compared to €135 million in Q4, 2018. Full year EBITDA was €727 million compared to €798 million for 2018. The business has continued to benefit from its flexibility to be able to utilise cheaper NGL feedstocks to maintain margins. The US cracker business environment was generally solid with good operating rates throughout the quarter. The business was adversely impacted in the quarter by an unscheduled outage at the Chocolate Bayou facility. Ethylene markets remained structurally long due to increased industry supply, although some unplanned outages in the quarter supported margins. Polymer demand was subdued, with increased industry supply adversely impacting margins. 

O&P Europe reported EBITDA of €139 million compared to €108 million in Q4, 2018. Full year EBITDA was €591 million compared to €672 million for 2018. Demand for olefins in the quarter was firm, with increased volumes compared to the fourth quarter of 2018, which was negatively impacted by low Rhine water levels. European polymer demand was stable, but increased competition from imports impacted volumes and margins in the quarter.

Chemical Intermediates reported EBITDA of €149 million compared to €113 million in Q4, 2018. Full year EBITDA was €627 million compared to €818 million for 2018.The overall demand trend in the Oligomers business was good across many product sectors and markets, with particular strength in co-monomers. Demand for the Oxide business was generally flat. Low glycol margins continued in the quarter due to weak Asian demand. The markets for the Nitriles business were softer in both ABS and acrylic fibre due to the subdued automotive sector and increased competition from other fibres. Volumes were adversely impacted by the continued shutdown of the Seal Sands facility in the quarter. The poor operating performance of the facility,

together with uneconomic capital expenditure requirements, resulted in the decision to close the facility in December 2019. Demand for the Phenol business was solid, with some weakness in margins due to lower returns on acetone.

The Group has continued to focus on cash management and liquidity. Net debt was approximately €5.9 billion at the end of December 2019. Cash balances at the end of the quarter were €983 million, and availability under undrawn working capital facilities was €204 million. Net debt leverage was approximately 3.0 times as at the end of December 2019.