LyondellBasell Industries N.V., FCFE calculation

US$ in millions

12 months ended:	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
Net income attributable to the Company shareholders	4,688)	4,879)	3,836)	4,476)	4,174)
Net (income) loss attributable to non-controlling interests	2)	(2)	1)	(2)	(6)
Net noncash charges	688)	922)	1,646)	1,614)	2,105)
Changes in assets and liabilities that provided (used) cash	93)	(593)	123)	(246)	(225)
Net cash provided by operating activities	5,471)	5,206)	5,606)	5,842)	6,048)
Expenditures for property, plant and equipment	(2,105)	(1,547)	(2,243)	(1,440)	(1,499)
Issuance of long-term debt	—)	990)	812)	984)	992)
Repayment of long-term debt	(394)	(1,000)	—)	—)	—)
Debt extinguishment costs	—)	(65)	—)	—)	—)
Payments of debt issuance costs	—)	(8)	(5)	(16)	(18)
Net proceeds from (repayments of) commercial paper	810)	(493)	177)	61)	262)
Free cash flow to equity (FCFE)	3,782)	3,083)	4,347)	5,431)	5,785)

Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).

The financial data indicates a general decline in cash flow generation between 2014 and 2017, followed by a partial recovery in 2018. While operating cash flows remained relatively stable, the free cash flow to equity experienced more significant volatility and a sharper overall decrease during the period.

Net Cash Provided by Operating Activities: A consistent downward trajectory is observed from 2014 to 2017, with values decreasing from 6,048 million USD to 5,206 million USD. This represents a total contraction of approximately 14% over four years. A reversal of this trend occurred in 2018, where operating cash flow increased to 5,471 million USD.
Free Cash Flow to Equity (FCFE): FCFE exhibited a more pronounced decline than operating cash flows, dropping from 5,785 million USD in 2014 to a low of 3,083 million USD in 2017. This constitutes a decrease of approximately 47%. A recovery was noted in 2018, with FCFE rising to 3,782 million USD, although it remained substantially below the levels observed in 2014 and 2015.
Operating Cash Flow and FCFE Divergence: The gap between net cash provided by operating activities and FCFE widened significantly, moving from 263 million USD in 2014 to 2,123 million USD in 2017. This widening divergence suggests an increase in capital expenditures or net debt repayments relative to operating cash generation during this interval. The gap narrowed to 1,689 million USD in 2018, coinciding with the overall recovery in cash flow metrics.

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LyondellBasell Industries N.V., current P/FCFE calculation, comparison to benchmarks

No. shares of common stock outstanding	335,248,065
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in millions)	3,782)
FCFE per share	11.28
Current share price (P)	76.14
Valuation Ratio
P/FCFE	6.75
Benchmarks
P/FCFE, Competitors¹
Linde plc	26.98
Sherwin-Williams Co.	21.44

Based on: 10-K (reporting date: 2018-12-31).

¹ Click competitor name to see calculations.

If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.

LyondellBasell Industries N.V., historical P/FCFE calculation, comparison to benchmarks

	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
No. shares of common stock outstanding¹	371,156,998	394,556,328	402,531,335	432,200,532	477,142,443
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in millions)²	3,782)	3,083)	4,347)	5,431)	5,785)
FCFE per share³	10.19	7.81	10.80	12.57	12.12
Share price^1, 4	88.50	110.83	92.91	77.93	89.94
Valuation Ratio
P/FCFE⁵	8.69	14.18	8.60	6.20	7.42
Benchmarks
P/FCFE, Competitors⁶
Linde plc	—	—	—	—	—
Sherwin-Williams Co.	—	—	—	—	—

Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).

¹ Data adjusted for splits and stock dividends.

² See details »

³ 2018 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 3,782,000,000 ÷ 371,156,998 = 10.19

⁴ Closing price as at the filing date of LyondellBasell Industries N.V. Annual Report.

⁵ 2018 Calculation
P/FCFE = Share price ÷ FCFE per share
= 88.50 ÷ 10.19 = 8.69

⁶ Click competitor name to see calculations.

The valuation of the entity based on its Price to Free Cash Flow to Equity (P/FCFE) ratio exhibited significant volatility between 2014 and 2018, characterized by a sharp expansion in 2017 followed by a correction in 2018.

Share Price Dynamics: The share price experienced a period of appreciation starting in 2016, ascending from 92.91 USD to a five-year peak of 110.83 USD in 2017, before declining to 88.50 USD by the end of 2018.
Free Cash Flow to Equity (FCFE) Trends: FCFE per share demonstrated a general downward trajectory between 2015 and 2017. After reaching a peak of 12.57 USD in 2015, the metric declined to its lowest point of 7.81 USD in 2017, prior to recovering to 10.19 USD in 2018.
P/FCFE Ratio Analysis: The P/FCFE ratio remained relatively compressed between 2014 and 2016, fluctuating between 6.20 and 8.60. A significant divergence occurred in 2017, where the ratio spiked to 14.18. This peak was the result of a simultaneous increase in share price and a decrease in FCFE per share, suggesting a period of high valuation relative to actual cash generation. In 2018, the ratio returned to 8.69, indicating a normalization of the valuation as the share price corrected and cash flows improved.

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LyondellBasell Industries N.V. (NYSE:LYB)

Price to FCFE (P/FCFE)

Free Cash Flow to Equity (FCFE)

Price to FCFE Ratio, Current

Price to FCFE Ratio, Historical