2019 IFRS Financial Statements

LyondellBasell Industries N.V. LyondellBasell Industries N.V. Financial Report For the Year Ended 31 December 2019 1 LyondellBasell Industries N.V. CONTENTS 1 About LyondellBasell 4 2 Report of the Board of Directors 4 2.1 Operational and Financial Overview 4 2.1.1 Segment Analysis 7 2.1.2 Financial Condition 13 2.1.3 Outlook 18 2.2 Risk Factors 19 2.3 Our Strategy 27 2.4 Sustainability 28 2.5 Research and Development 29 2.6 Governance Report of the Board of Directors 29 2.6.1 Evaluation of the Board of Directors and its Individual Members 37 2.6.2 Compensation of the Board of Directors 37 2.7 Corporate Governance and Risk Management 40 2.7.1 Corporate Governance Statement 40 2.7.2 Code of Conduct 40 2.7.3 Conflicts of Interest 41 2.7.4 Related Party Transactions 41 2.7.5 Dutch Corporate Governance Code 42 2.7.6 Shareholders and General Meeting of Shareholders 44 2.7.7 Takeover Directive; Anti-Takeover Provisions and Control 45 2.7.8 Risk Management 45 2.7.9 Audit of Financial Reporting 49 2.7.10 Statements of the Board of Directors 50 Consolidated Financial Statements 52 Consolidated Statement of Income 53 Consolidated Statement of Other Comprehensive Income 54 Consolidated Statement of Financial Position 55 Consolidated Statement of Changes in Equity 57 Consolidated Statement of Cash Flows 59 1 General 60 2 Summary of Significant Accounting Policies 60 3 Critical Accounting Estimates and Judgments 69 4 Financial Risk Management 70 5 Revenue 77 6 Expenses by Nature 78 7 Employee Benefit Expenses 78 8 Share-Based Compensation Granted to Directors and Employees 78 9 Directors' Remuneration 82 10 Other (Income) Expense, Net 85 11 Finance Costs 85 12 Income Tax Expense 86 13 Earnings per Share 87 14 Intangible Assets 89 15 Property, Plant and Equipment 91 16 Leases 92 17 Investments in Associates and Joint Ventures 93 2 LyondellBasell Industries N.V. 18 Financial Assets and Liabilities by Category 95 19 Credit Quality of Financial Assets 95 20 Derivative and Other Financial Instruments 96 21 Inventories 96 22 Trade and Other Receivables 97 23 Cash and Cash Equivalents 98 24 Equity Attributable to the Owners of the Company 98 25 Non-Controlling Interests 100 26 Borrowings 100 27 Deferred Income Tax 106 28 Retirement Benefit Obligations 108 29 Trade and Other Payables 115 30 Provisions 116 31 Contingencies and Commitments 117 32 Related Parties 118 33 Segment and Related Information 119 34 Subsequent Events 122 A Appendix A 123 Corporate Financial Statements 128 1 General 131 2 Goodwill and Investments 131 3 Cash and Cash Equivalents 132 4 Equity Attributable to Equity Holders 132 5 Long-term Debt 134 6 Group Company Loans 134 7 Deferred Income 135 8 Commitments and Contingencies not included in the Balance Sheet 136 9 Independent Auditor's Fees 136 10 Directors' Remuneration 137 Other Information 138 3 LyondellBasell Industries N.V. 1. About LyondellBasell LyondellBasell Industries N.V. is a global, independent chemical company and was incorporated, as a Naamloze Vennootschap, under Dutch law on 15 October 2009. Unless otherwise indicated, the "Company," "we," "our," "us" and "LyondellBasell" are used in this report to refer to the businesses of LyondellBasell Industries N.V. and its consolidated subsidiaries. We are one of the world's top independent chemical companies based on revenues. We participate globally across the petrochemical value chain and are an industry leader in many of our product lines. Our chemicals businesses consist primarily of large processing plants that convert large volumes of liquid and gaseous hydrocarbon feedstocks into plastic resins and other chemicals. Our chemical products tend to be basic building blocks for other chemicals and plastics, while our plastic products are used in large volumes as well as smaller specialty applications. Our customers use our plastics and chemicals to manufacture a wide range of products that people use in their everyday lives including food packaging, home furnishings, automotive components, paints and coatings. Our refining business consists of our Houston refinery, which processes crude oil into refined products such as gasoline, diesel and jet fuel. We also develop and license chemical and polyolefin process technologies and manufacture and sell polyolefin catalysts. Our financial performance is influenced by the supply and demand for our products, the cost and availability of feedstocks, global and regional production capacity, our operational efficiency and our ability to control costs. We have a strong operational focus and, as a producer of large volume commodities, continuously strive to differentiate ourselves through safe, reliable and low-cost operations in all our businesses. We purchase large quantities of natural gas, electricity and steam which we use as energy to fuel our facilities. We also purchase large quantities of natural gas and crude oil derivatives which we use as feedstocks. During recent years, the relatively low cost of natural gas-derived raw materials in the U.S. versus the global cost of crude oil- derived raw materials has had a significant positive influence on the profitability of our North American operations. While new facilities and increased supply have reduced the North American feedstock advantage, improved product supply and demand fundamentals in several businesses, notably global polyolefins products, have partially offset the decline. We employed approximately 19,100 full-time and part-time employees at 31 December 2019. In addition to our own employees, we also use the services of contractors in the routine conduct of our businesses. We manage our operations through six operating segments. Our reportable segments are: • Olefins and Polyolefins-Americas ("O&P—Americas"). Our O&P—Americas segment produces and markets olefins and co-products, polyethylene and polypropylene. • Olefins and Polyolefins-Europe, Asia, International ("O&P—EAI"). Our O&P—EAI segment produces and markets olefins and co-products, polyethylene and polypropylene. • Intermediates and Derivatives ("I&D"). Our I&D segment produces and markets propylene oxide and its derivatives, oxyfuels and related products, and intermediate chemicals; such as, styrene monomer, acetyls, ethylene oxide and ethylene glycol. • Advanced Polymer Solutions ("APS"). Our APS segment produces and markets compounding and solutions, such as polypropylene compounds, engineered plastics, masterbatches, colors and powders, engineered composites and advanced polymers, which includes Catalloy and polybutene-1. • Refining. Our Refining segment refines heavy, high-sulfur crude oil and other crude oils of varied types and sources available on the U.S. Gulf Coast into fuel products including gasoline and distillates. • Technology. Our Technology segment develops and licenses chemical and polyolefin process technologies and manufactures and sells polyolefin catalysts. 2. Report of the Board of Directors 2.1 Operational and Financial Overview This discussion should be read in conjunction with the information contained in our Consolidated Financial Statements and the accompanying notes elsewhere in this report. During 2019, LyondellBasell continued to exhibit strong cash generation and remained committed to our disciplined capital allocation strategy. Over each of the past six years, we have consistently delivered $5 billion to $6 billion in cash from operating activities. We affirmed our commitment to a strong and progressive dividend during 2019 by increasing our quarterly dividend for the eleventh time and returning a total of $5.2 billion in dividends and share repurchases to shareholders. Our businesses benefited from abundant and low-cost natural gas liquid feedstocks throughout the year, and we demonstrated our capability to derive value from mergers and acquisitions through the integration of the A. Schulman acquisition. During the fourth quarter, margins within most of our businesses were impacted by slow industrial demand and typical seasonality. Refining margins improved on a higher Maya 2-1-1 crack spread and relatively strong prices for naphtha and coke. 4 LyondellBasell Industries N.V. Our Technology segment achieved record licensing revenues, contributing to the most profitable year in the Company’s history for the segment. In 2019, we developed opportunities to expand into new markets by leveraging our technologies to strengthen our position in Asia. In June, we announced new polypropylene capacity through our Thailand joint venture, HMC Polymers. In September, we signed a joint venture Memorandum of Understanding with Liaoning Bora Enterprise Group to build an integrated cracker and polyolefins project expanding our footprint in the rapidly growing Chinese market. In December 2019, we announced our intention to expand our existing partnership with China Petroleum & Chemical Corporation (Sinopec) to build a second propylene oxide and styrene monomer plant in China utilizing our advantaged technology. Significant items that affected results in 2019 relative to 2018 include: • Lower O&P—Americas segment results due to a decline in polyethylene margins while olefins margins improved; • O&P—EAI segment results decreased due to unfavorable foreign exchange impacts and lower income from equity investments; • I&D segment results declined due to margin and volume decreases primarily driven by intermediate chemicals; • Higher APS segment results primarily due to the contribution of results from A. Schulman product lines; • Lower Refining segment results due to a decline in margins;

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