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Investor Presentation

Investor Presentation. February 2017. Forward- Looking Statements.

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Investor Presentation

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  1. Investor Presentation February2017

  2. Forward-LookingStatements • In addition to historical information, this presentation contains "forward-looking" statements that reflect management's expectations for the future. The words “anticipate,”“believe,”“expect,”“hope,”“have the intention of,”“might,”“plan,”“should” and similar expressions generally indicate comments on expectations. The final results may be materially different from current expectations due to several factors, which include, but are not limited to, global and local changes in politics, the economy, business, competition, market and regulatory factors, cyclical trends in relevant sectors; as well as other factors that are highlighted under the title “Risk Factors” on the annual report submitted by Mexichem to the Mexican National Banking and Securities Commission (CNBV). • The forward-looking statements included herein represent Mexichem’s views as of the date of this press release. Mexichem undertakes no obligation to revise or update publicly any forward-looking statement for any reason unless required by law.” • Mexichem has implemented a Code of Ethics that rules its relationships with its employees, clients, suppliers and general groups. Mexichem’s Code of Ethics is available for consulting in the following link: • http://www.mexichem.com/Codigo_de_etica.html. • Additionally, according to the terms contained in the Securities Exchange Act No 42, Mexichem Audit Committee established a mechanism of contact, which allows that any person that knows the un-fulfilment of operational and accounting records guidelines and lack of internal controls of the Code of Ethics, from the Company itself or from the subsidiaries that this controls, file a complaint which is anonymously guaranteed. The whistleblower program is facilitated by a third party. The telephone number in Mexico is 01-800-062-12-03. • The website is: http://www.ethic-line.com/mexichemand contact e-mail is: mexichem@ethic-line.com. • Mexichem’s Audit Committee will be notified of all complaints for immediate investigation.

  3. Mexichem at a GlanceGlobal Leader in Chemicals and Plastics Markets Mexichem Energy Fluor Value Chain Ethylene Value Chain • Joint Venture with • Fluor • Fluorspar • Hydrofluoric acid • Refrigerants • Aluminum fluoride • Vinyl • PVC & Specialty resins • Compounds & plasticizers • Derivatives • Fluent • Pipes and fittings • Irrigation systems • Datacom • Joint Venture with Revenues: $583 mm EBITDA margin: 39.1% Revenues: $2,032 mm EBITDA margin: 15.5% Revenues: $2,892 mm EBITDA margin:14.6% FY2016 Note: Revenues and Adj EBITDA margin correspond to FY 2016; Figures before intercompany eliminations

  4. Company Overview: Mexichembythe NumbersMajor Transformation Over Last 5 Years To Pipes and End-Products From Chemicals Sales EBITDA

  5. Mexichem’s Growth Strategy • Vertical Integration • Focus on Specialty Products • Leveraging the Global Platform • Cross-Selling Initiatives • Cross-Production Programs • Bolt-On Acquisitions

  6. Vertical IntegrationEnsuring Supply to Mitigate Volatility & Increase Cost Competitiveness • Ethylene Chain Overview • One of the largest PVC resin and leading player in piping worldwide Salt Chlorine & Caustic VCM PVC Resin Compounds Fluent Ethane Ethylene Specialty Resin Mexichem products On-going joint ventures – VOLATILITY + VERTICAL INTEGRATION Throughout THE VALUE CHAIN

  7. Vertical Integration: EthyleneEthylene is our Most Important Raw Material Ethylene Price Components December 2014 Ethane 27% Others 10% Ethylene Margin 63% • Polyethylene’s Cost Structure PE Pipe Cost Structure December2016 Others 19% Ethylene 81% • PVC’s Cost Structure Others 10% PVC Pipe Cost Structure Others 71% Ethylene 29% Ethylene Cracker (JV w/ OXY) = * 70% of the NA Vinyl Group’s Ethylene Supply PVC Resin Cost Structure Others 61% Ethylene 39% Source: Company fillings, *Once Ethylene cracker is fully operational. VCM Cost Structure Others 51% Ethylene 49%

  8. Vertical Integration: Ethylene Source: Mexichem’s Internal analysis. Each point of the curve represents a plant of global PVC production.

  9. Ending a Capital Cycle(in USD terms)

  10. Manageable Debt Profile & Long-Term Maturity Profile Fitch Ratings BBB S&P BBB- Moody’s Baa3 Investment Grade Long-Term Debt Schedule US$MM, as of December 31, 2016 Most Debt at HoldCo Level Alignment of Debt to Revenue Currency Conservative Leverage Ratios Debt by Division (3Q16) Debt by Currency (3Q16) • US$1.5B revolving credit facility (100% available) Source: Company filings Total Debt / EBITDA Net Debt / EBITDA

  11. Building Mexichem’s Specialty Products PortfolioSpecialty PVC Resins Producers Worldwide (Kton) Source: IHS 2015

  12. Adding Specialty Products Across The Value Chain • Vestolit • Acquired in 2014, at the time was Europe’s 6th largest PVC manufacturer, based in Germany • Consolidated under the Vinyl Business Group, added another set of high-end specialty products, most notably in High Impact Suspension PVC and PVC paste • Expanded European footprint, entered new market and acquired new technologies and practices • Dura-Line • Acquired in 2014, a global leader in high-density polyethylene conduit, duct and pressure pipe solutions, consolidated under the Fluent Business Group • Allows for expansion in Telecom, Datacom and Energy Piping markets • Adds presence in India, South Africa and the Middle East • Compounds, part of the Vinyl Business Group • Nearly $500 million annual revenue • Targeting opportunities in India and Southeast Asia

  13. Driving Margin Growth Vs. Volume GrowthCloser To Our End Consumers- Fluent LatAm Salt Chlorine &Caustic VCM PVC Resin Compounds Fluent Ethane Ethylene Specialty 13 13

  14. Mexichem’s Growth Model • Our presence in >30 countries can be used as a platform for all our products • Driving revenue growth • Leveraging production facilities • Enabling technology and process transfer • Expanding our end markets and footprint with bolt-on acquisitions that create revenue & operating synergies • Gravenhurst Plastics Ltd. – October 2016 • Vinyl Compounds Ltd. – November 2016

  15. Capital Allocation Strategy Model Selection of the project might depend on the balance of all these categories: • Alignment • Strategicrationalethatfits to Mexichem & operations • Potential • Sales growth • Replicatelocallyorglobally • Profitability • Based on EBITDA margins • Expansion in EBITDA margins after synergies • ROIC in 3 years • Capability • Trackrecord of operatingorproducing at highcapacity • Market Dynamics • Porter’sFiveForces • Risks • Country risk • Additionalrisks to Mexichem

  16. Bolt-on Acquisition for Fluent Business Group GravenhurstPlastics Ltd to incorporate ~15 m sales in Fluent US/AMEA • Canadian manufacturer of high-grade polyethylene pipe products, tucks into Dura-Line brand • Establishes local presence in Canadian market with high growth potential • Provides a platform to expand all of Mexichem’s businesses in that country • Datacom products complement MexichemFluent’s existing offering

  17. Bolt-on Acquisition for Vinyl Business Group Vinyl Compounds Ltd to incorporate ~40 m sales in Compounds Business Unit • U.K. leading supplier of PVC compounds • Adds scale to Mexichem’s UK operations • Expands the portfolio of specialty products • Provides additional vertical integration in the Compounds business unit • Brings synergies to Vinyl Business group through Vinyl Compounds’ PVC resins and plasticizers • Key drivers for the demand are related to: • Building & Construction • Consumer goods • Footwear

  18. Focused leadership Through Collaboration A. Mugica President, Fluor Business Group P. ChariPresident, Fluent Business Group A. Carrillo CEO R.Guzmán CFO F.Hernández General Counsel S. S. Bharadwaj President, Compounds Business Unit C. Manrique President, Vinyl Business Group >20 >20 >30 >25 >35 >35 >25 >20 Pedro Martínez VP IT A. Rodríguez Corporate VP, HR JL. Guzmán VP Corporate Internal Audit >20 >18 >20 years of professionalexperience ~20

  19. Thank You

  20. APPENDIX

  21. Summary of 4Q16 ResultsIncome Statement

  22. Summary of 4Q16 ResultsBalance Sheet

  23. Summary of 4Q16 ResultsOperating Cash Flow Highlights

  24. Operating Results by Business Group VINYL Business Group (37% and 34% of Mexichem’s sales before eliminations and Adj EBITDA, respectively, in 2016) *Intercompany sales were $41 million and $32 million in 4Q16 and 4Q15, respectively. And as of December 2016 and 2015 were $152 million and $162 million, respectively. **Includes Ingleside expenses of $5.0 million (YTD 2016)

  25. Operating Results by Business Group VINYL Business Group (37% and 34% of Mexichem’s sales before eliminations and Adj EBITDA, respectively, in 2016) *Intercompany sales were $48 million and $44 million in the 4Q16 and 4Q15, respectively, and as of December 2016 and 2015 were $184 million and $215 million, respectively. Of these amounts $7 million and $12 million were invoiced to PMV in 4Q16 and 4Q15, respectively and $33 million and $53 million accrued to December 2016 and 2015. **Includes Ingleside LLC expenses of $5.0 million (YTD 2016) • *Intercompany sales invoiced to Resins, Compounds and Derivatives were $0.8 million and $20 million in 4Q16 and 4Q15, respectively. And, as of December 2016 and 2015 were $33 million and $94 million, respectively.

  26. Operating Results by Business Group FLUENT Business Group (53% and 45% of Mexichem’s sales before eliminations and EBITDA, respectively, in 2016)

  27. Operating Results by Business Group FLUOR Business Group (11% and 25% of Mexichem’s sales before eliminations and EBITDA, respectively, in 2016)

  28. CLOSER TO OUR END CUSTOMERS Water storage solutions Water FLOW solutions GAS solutions ELECTRIC solutions Salt Chlorine &Caustic Housing Catalogue in Brazil: VCM PVC Resin Compounds Fluent Ethane Ethylene Specialty ACCESORIES 28 28

  29. CLOSER TO OUR END CUSTOMERS Hydraulic solutions Sewage system solutions Salt Chlorine &Caustic Infrastructure Catalogue in Brazil: VCM PVC Resin Compounds Fluent Ethane Ethylene Specialty 29 29

  30. Mexichem’s Markets and Product Categories Product Categories Examples Markets Served Business units • Fluorspar Met Grade • Fluorspar Acid Grade • Hydrofluoric Acid • Anhydrite • Aluminum Fluoride • Refrigerants • Technical propellants • Medical propellants Refrigeration & Technicalpropellants Aluminum Medical • Fluor Chemicals Air Conditioning • Base Chemicals • Specialty Resins • PVC Resins • Compounds • PA & Plasticizers • Phosphates • Other Chemicals Industrial Paints Wire and Cable Medical 7% Automotive Home, lawn & garden Vinyl Building & Construction • Pipes & Fittings (PVC, Polyethylene, Polypropylene) • Geosynthetics (woven & non-woven) • Irrigation systems • Datacom & Infrastructure Oil & Gas Telecom Fluent Infrastructure Agricultural Housing Source: Company fillings, Markets as % of revenues of 2015

  31. Mexichem’s Markets and Product Categories Salt Chlorine &Caustic VCM PVC Resin Compounds Fluent Ethane Ethylene Specialty Specific Markets: Sales by Distribution Channel 31 Source: Company fillings, Information as of 2015 31

  32. Company Overview: Mexichem by the NumbersMexichem’s EBITDA 2015 was highly affected by $202 million in comparison with 2011, due to FX and market conditions on Fluor (downstream), Brazil and Venezuela. EBITDA 2011 vs 2015 ($m) - $202m 35% 10% % from Mexichem EBITDA Source: EBITDA as reported 2011 and 2015 figures

  33. Vertical Integration: Tested in 4Q14Prices of oil and ethylene falling rapidly Salt Chlorine &Caustic VCM PVC Resin Compounds Fluent Ethane Ethylene Specialty USD/ ton USD/ barrel Source: IHS (formerly CMAI) • Vinyl Business Group • * EBITDA USD$MM Fluent Business Group * EBITDA USD$MM 8% 10% 14% 59% ~30M USD 5% 66% * EBITDA without FX in 4Q14, and non recurrent effects of 4Q13

  34. Vertical Integration: Margin Expansions in 4Q15Prices of oil, ethylene and PVC resins Salt Chlorine &Caustic VCM PVC Resin Compounds Fluent Ethane Ethylene Specialty USD/ ton USD/ barrel Source: IHS (formerly CMAI) Vinyl Business Group Positive performance on PMV + Resins, compounds & derivatives EBITDA USD$MM Fluent Business Group Amid FX fluctuations, EBITDA margin expansions EBITDA USD$MM 12% 15% 8% 244% 26% 5%

  35. Ethylene Prices Worldwide Monthly World Ethylene Price – US$ per Metric Ton Last Update Date -09/01/2017 USD/ ton Source: IHS

  36. Vertical Integration: Fluor Chain 40% Sold to Market 100% Sold to Market Sulphuric Acid HF Refrigerant Gases Fluorspar Aluminum Fluoride Strategy: Downstream integration to higher value added products 60% Sold to Market 100% Sold to Market – + VOLATILITY VERTICAL INTEGRATION Throughout THE VALUE CHAIN Source: Company filings

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