# Dear LyondellBasell Shareholders

_Source: `DeepSeekOCR_Ardian_pruned_1k/basic-materials-specialty-chemicals/NYSE_LYB_2021/NYSE_LYB_2021.mmd` · pages 1-7_

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Dear LyondellBasell Shareholders,

I am honored to serve as LyondellBasell's Interim CEO and report to you on our record-setting results from the past year. Through the diligent work of our talented team, our company established new benchmarks for cash flow and profitability.

In 2021, LyondellBasell benefited from a rebounding economy that provided strong demand and tight market conditions. We continued to execute our strategy which remains grounded in the safe and reliable operation of our assets, deliberate cost management and disciplined growth investments. As a result, our company generated substantial cash flows enabling us to deleverage the balance sheet, increase dividends paid to shareholders, repurchase LyondellBasell shares and reinvest in our businesses.

Lockdowns, travel restrictions and changes in lifestyle stemming from the pandemic created pent-up consumer demand. Demand for packaging and products used to combat the virus remained strong, re-emphasizing the value of our products in serving the needs of modern society. Pandemic-driven disruptions to global supply chains intensified during 2021 and made it challenging for many producers to keep up with high consumer demand.

While the external environment was volatile and hard to predict, we remained true to our core values and advanced our ambitions to create a more sustainable future for our industry. The pursuit of GoalZERO safety performance remains our top priority. Continuous learning and a self-improving culture are key focus areas as we continue to work towards zero injuries and zero process safety, product safety and environmental incidents. We also took action to become a leader in circular plastics and accelerated our emissions reduction targets. These ambitions reflect our commitment to help address the world's most pressing challenges.

At LyondellBasell, we are stepping up for the future.

## Stepping up our earnings

In 2021, our record-setting results were the product of our disciplined approach to running our businesses and the increased earnings power from our value-driven investments. The investments we made over the past few years have increased our earnings power. Our 2021 EBITDA exceeded our prior record by 15%.

Since 2018, we have:

I Acquired A. Schulman and formed our Advanced Polymer Solutions segment to expand our compounding business;

I Constructed and commissioned a polyethylene plant in Texas with a capacity to produce 500,000 tons per year, using our next-generation Hyperzone HDPE technology;

I Established new joint ventures for integrated cracker complexes in Louisiana and Northeastern China; and,

I Invested in two new propylene oxide manufacturing sites globally. Our new manufacturing site in Texas is expected to be commissioned in 2022, and our joint venture in China successfully started up earlier this year.

These projects have grown our asset base and position us well for the future.

## Stepping up our value

In 2021, our diligent cash management set us apart. We delivered on our promises to shareholders by prioritizing deleveraging, increasing dividends and repurchasing shares.

I We strengthened our balance sheet, reducing $4 billion in long-term debt.

I We continued our focus on a strong and progressive dividend, a fundamental component of our capital allocation strategy, returning $4.44 per share to our shareholders.

I We repurchased shares, reducing our outstanding share count by approximately 5 million shares.

## Stepping up in circularity

We are leveraging our strengths in polyolefins and catalyst technologies to capture value from the rapidly growing markets for recycled and renewable-based polymers. To help eliminate plastic waste in the environment and support our customers' goals of increasing the recycled content of their products, we launched our Circular portfolio of polymers.

I CirculenRecover polymers, manufactured using the mechanical recycling process, are already in use, producing consumer products such as the Samsonite Magnum Eco suitcase line.

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1 CirculenRenew polymers are manufactured from renewable-based feedstocks, and we are working towards increasing volumes globally.

1 CirculenRevive polymers are manufactured from feedstock produced using the advanced recycling process, and we have recently collaborated with Berry Global and Wendy's \( ^{®} \)  restaurants to use our CirculenRevive polymers in the production of more recyclable Wendy's drink cups, using a mass balance approach. In addition, our proprietary catalyzed pyrolysis technology at our MoReTec molecular recycling pilot facility in Italy converts plastic waste into feedstock. As we continue to advance this technology, our goal is to bring CirculenRevive polymers to commercial scale.

The Circulen portfolio of products advances our ambitious goal to produce and market two million tons of recycled and renewable-based polymers annually by 2030.

Stepping up our climate commitments
Addressing climate change is a key part of our sustainability strategy, and I am proud of the actions our company is taking to align with the Paris Agreement and make a positive impact for future generations.

In September 2021, we announced accelerated targets and a goal to achieve net zero scope 1 and scope 2 greenhouse gas emissions from global operations by 2050. In support of our ambitions, we set an interim goal to reduce absolute emissions from global operations by 30 percent by 2030 relative to a 2020 baseline. In the early part of this decade, we will turn our ambition into action by purchasing renewable energy and maximizing the use of existing and accessible technologies to reduce emissions from our facilities and operations.

As we look beyond 2030, we are evaluating technology options, such as cracker electrification, use of hydrogen, carbon capture and storage, and carbon utilization. Cross value chain collaboration is essential to our success, so we are actively working to identify opportunities across multiple sectors to accelerate the scale up and deployment of these breakthrough technologies.

## Stepping up Diversity, Equity and Inclusion in our workplace

I am encouraged by the enthusiasm from our employees to cultivate a more inclusive work environment and enhance diversity. Driven by our commitment to support our global workforce and the communities we serve, we progressed diversity, equity and inclusion (DEI) through key initiatives:

We progressed new talent programs to improve mentorship and succession planning for diverse talent, embed diversity into our hiring processes and increase job posting transparency.

We implemented an annual equity audit of pay and performance practices to minimize any unintended bias in our rewards programs and performance evaluations and promote a sense of fairness for all employees.

We launched employee networks to help cultivate a community where all employees feel valued and respected. These networks allow colleagues with similar interests, identities and goals to foster professional and personal growth.

We prioritized and implemented DEI training to accelerate measurable change in our workforce at all levels. This mandatory training helps us drive toward a culture of inclusion and belonging, and I am proud to say that 9,500 employees engaged in DEI training during 2021.

## Stepping up for the future

Looking forward, we will continue to build on our strong foundation as we deploy our business model across a larger asset base, increasing cash flow and further strengthening our business portfolio. LyondellBasell is building innovative business models that aim to increase our utilization of plastic waste as a circular feedstock and capture more value from the growing and attractive market for circular plastics.

As Interim CEO, I am grateful for the opportunity to lead our global team of extremely talented employees. Together, we will continue building momentum as we prepare for our new CEO, Peter Vanacker, to join us in a few months. Our company is strong and our strategy has proven to be resilient. We will continue stepping up for our shareholders, our employees, our communities and the environment. I am very optimistic about our company's future.

Best wishes,

![](images/2_0.jpg)

Kenneth Lane
Interim CEO
Executive Vice President,
Global Olefins & Polyolefins