Methanex (MX) investor relations material

Strategic transformation and market outlook

• Transitioning from a period of heavy investment to a focus on impact, leveraging recent North American asset build-out and the OCI acquisition to strengthen the global portfolio and drive free cash flow generation over the next several years.

• Methanol markets are structurally tight, with limited new capacity additions, ongoing supply constraints, and a conservative demand outlook, especially in China and the Atlantic markets; a supply-demand gap of around 10 million tons is projected over the next five years.

• North American assets now account for 65% of global capacity and 75% of earnings, supported by abundant, low-cost gas and significant productivity improvements; Chile and Egypt are positioned to benefit from upstream developments in Argentina and the Eastern Med.

• Trinidad and New Zealand assets face mature gas basins and policy headwinds, contributing minimally to performance, while the company remains focused on optimizing and managing these regions prudently.

• The company’s global supply chain, marketing reach, and logistics flexibility enable premium pricing and resilience amid geopolitical and logistical disruptions, with a recurring price premium over China for non-sanctioned product.

Operational excellence and integration

• A center of excellence approach underpins manufacturing, emphasizing safety, reliability, and knowledge transfer across regions, with a 96% reliability target and strong safety record.

• Integration of OCI assets is progressing well, with a focus on onboarding, asset assurance, and embedding best practices; $30 million in synergies targeted within two years, with further upside expected from higher operating rates and supply chain optimization.

• Capital allocation for manufacturing is standardized and center-led, prioritizing risk, value, and efficiency, while turnarounds are globally coordinated to leverage expertise and drive continuous improvement.

• Advanced process control and AI tools are being deployed to enhance predictive maintenance and operational efficiency, leveraging extensive historical data.

Financial guidance and capital allocation

• At a $350 methanol price, annual free cash flow is expected to be around $500 million, with deleveraging as the top priority; all free cash flow is currently directed to repaying the term loan, followed by partial repayment of the 2027 bond and a gradual return to share buybacks.

• Leverage target has been lowered to 2–2.5x at a $350 price to reduce risk and broaden the shareholder base, with a commitment to maintaining the current dividend and optimizing capital allocation for long-term value.

• The company has doubled production per share since 2015 through both capacity additions and share repurchases, with a focus on sustaining CapEx and disciplined capital returns.