# To the owners of our company

_Source: `DeepSeekOCR_Ardian_pruned_1k/basic-materials-specialty-chemicals/NYSE_LYB_2018/NYSE_LYB_2018.mmd` · pages 2-8_

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To the owners of our company:

I am very proud to present LyondellBasell's 2018 Annual Report summarizing our efforts to capture opportunity and deliver value for our shareholders during the past year. At the same time, our 19,400 employees around the world meaningfully advanced our strategy to position our company for the future.

In 2018, we delivered net income of \(4.7 billion, EBITDA of \)6.9 billion and \(12.01 diluted earnings per share. Reflecting confidence in our ability to continue providing healthy returns to shareholders, in February we increased our quarterly dividend to \)1.00 per share, the tenth dividend increase since 2011. This increase places LyondellBasell's dividend yield in the top quartile of the S&P 500. In 2018, we returned a total of $3.4 billion to our shareholders in the form of dividends and share repurchases.

Considering everything our team accomplished in 2018, I am most proud of our continued improvement in industry-leading safety performance. Through focus and discipline, our team was able to further reduce our Total Recordable Injury Rate (TRIR), achieving the lowest rate in our company's history. We also achieved our second-best Process Safety Incident Rate (PSIR). TRIR and PSIR are calculated by the number of injuries or process safety incidents relative to the number of hours worked. This improvement is especially rewarding given the large number of additional workers on our sites for major turnarounds and the integration of more than 5,000 new colleagues from the A. Schulman acquisition.

Despite some market and operational challenges in the fourth quarter, we achieved annual EBITDA records in our Intermediate & Derivatives and Technology segments. We also continued to demonstrate reliability at our refinery, and our North American and European cracker operating rates exceeded industry benchmarks after accounting for planned maintenance.

Beyond delivering value from our existing operations, we also focused on capturing new opportunities to position the company for the future. For example, we are:

I Building new facilities to serve global markets: In 2017 we broke ground on our new Hyperzone polyethylene (PE) plant in La Porte, Texas. This is a first-of-its-kind facility that employs our new, proprietary technology. This project was a global effort as the process technology and related products were developed and tested in our Research and Development centers in Ferrara, Italy; Frankfurt, Germany; and Cincinnati, Ohio. Our new, innovative polyethylene products will offer enhanced processability, superior toughness and improved chemical resistance compared to other high density polyethylene (HDPE) grades on the market. We expect start up of this unit in the second half of 2019. Based on margins for the periods from 2014 to 2018, this asset is expected to deliver approximately $170 to $210 million of EBITDA.

In August 2018, we broke ground on the world's largest propylene oxide and tertiary butyl alcohol (PO/TBA) plant in Chanelview, Texas. This project remains on track for a 2021 start-up. When complete, we project this facility will add approximately $400 to $450 million in annual EBITDA to our Intermediates & Derivatives segment.
I Creating new growth platforms: The acquisition of A. Schulman was completed in August 2018 and resulted in the creation of our new Advanced Polymer Solutions segment. We further enhanced the diversity of our portfolio, doubling our existing compounding business and expanding our reach beyond the automotive sector to include packaging and consumer products, electronics and appliances, building and construction, and agriculture.

I Advancing strategic joint ventures: In June 2018, one of our joint ventures, PolyMirae, announced it was expanding its polypropylene capacity by 400,000 tons per year with a new plant in South Korea. This facility, which is slated for start up in 2021, will be one of the largest plants of its kind and well-positioned to meet growing demand in this region.

In March 2018, we announced our partnership with SUEZ to begin jointly operating the Netherlands-based plastics recycling business, Quality Circular Polymers (QOP). This is the first time a plastics company and a waste management company have partnered on this type of effort. With our increased focus on the circular economy, we believe it will provide an additional growth platform over time.

I Increasing our focus on sustainability: We were one of the driving forces behind the formation of the Alliance to End Plastic Waste, the first global, cross-value chain organization dedicated to eliminating plastic waste in the environment. Additionally, I am pleased to report that in 2018 our company published its first sustainability report.
We are also working to reduce our environmental impact. In 2018 we partnered with the Karlsruhe Institute of Technology in Germany to work on developing a chemical recycling process that would transform used plastic into feedstock. We announced a large investment at our Maasvlakte, the Netherlands, site aimed at converting the plant's water-based waste into energy. We expect this project will reduce  \( CO_{2} \)  emissions by approximately 140,000 metric tons annually and prevent the release of 11 million kilograms of salt residue into the surface water.

These efforts demonstrate our commitment to sustainability and the circular economy as well as the execution of our strategy to deliver value under a wide range of market conditions. None of this would be possible without the dedication and focus of our outstanding team around the world.

As I enter my fifth year as CEO, it is a great honor to lead this very capable and dynamic team. Considering all we have accomplished and the opportunities before us, I am more excited about our future than ever before.

On behalf of the entire LyondellBasell team, thank you for your continued trust in us.

Most sincerely,

![](images/2_1.jpg)

Bhavesh V. (Bob) Patel
Chief Executive Officer