Hi everyone, we appreciate your interest in Alpek and your participation in this webcast to review our second quarter results. I'm Alejandra Bustamante, IR Director.

Here with me today are Jorge Young, our CEO, and Rodrigo Prieto, our CFO. Before we begin, please note today's discussion will include forward-looking statements based on current expectations and assumptions, subject to certain risks and uncertainties.

Actual results may differ materially. Alpek undertakes no obligation to update these statements.

We express our financial results in US dollars, unless otherwise specified. For your convenience, this webcast is being recorded and will be available in the Investor Center section of our website.

Today's agenda is as follows: Jorge will begin with a quarterly overview; next, Rodrigo will discuss our financial performance in greater detail; then, Jorge will delve into outlook for the remainder of the year and revise guidance figures; and finally, following management's remarks, we will be happy to take your questions. Jorge, I'll turn the call over to you.

Good morning, everyone. Thank you for joining us.

Throughout the quarter, the Middle East conflict continued to impact global supply, leading to trade disruptions. This resulted in higher reference margins and ocean freight costs.

While these industry conditions supported results, Alpek's performance was further enhanced by its operational readiness. Notably, our business units were able to resolve all raw material supply challenges while growing and diversifying our customer base in key markets.

Alpek's year-to-date performance also validates the successful execution of our multi-year strategy to strengthen our competitiveness and financial position. Through a more optimized asset base and disciplined capital allocation, we were well-positioned to deliver significant comparable EBITDA growth and cash flow generation.

I would like to take a moment to recognize and thank our employees across Alpek for their dedication and commitment. Their hard work and focus on execution were instrumental to our results.

On behalf of the leadership team, thank you for your continued contributions and toward success. Moving forward, we're entering the second half of the year with a stronger and more resilient operating and financial position, allowing us to confidently navigate evolving macro, geopolitical, and industry landscapes.

Accordingly, we're raising our 2026 EBITDA guidance, which I will come back to discuss in more detail after the financial results segment. With that, I will now turn the call over to Rodrigo.

Hi everyone, it's a pleasure to be with you today. Over the past quarter, I've had the opportunity to connect with many of you, and I look forward to continuing those conversations and getting to meet more of you in the future.

Let's take a closer look at our financial performance. Reference margins increased throughout the quarter across our portfolio.

Particularly, Chinese integrated PET margins peaked in May at $336 per ton. Ocean freight rates to South America also increased sequentially throughout the quarter, reaching a high of $347 per ton in June.

Alpek effectively translated this into solid results, maintaining a clear focus on cash generation and improving the balance sheet. We generated $127 million in operating free cash flow, supported by higher EBITDA and strategic capital allocation.

This includes a $211 million investment in net working capital from improved volume and a higher pricing environment. This performance reflects our ability to reliably convert earnings into cash, achieving a 31% conversion rate during the period.

CAPEX totaled $19 million, including a $10 million recovery from the Beaver Valley asset sale. We further strengthened our balance sheet by reducing net debt by $103 million and improved our leverage ratio to 2.2 times, accelerating our deleveraging path ahead of schedule.

Turning into earnings, comparable EBITDA increased 169% year-over-year, reaching $336 million, and reported EBITDA totaled $407 million, a 300% improvement compared to the same period last year. This included a $66 million inventory gain associated with higher raw material prices.

Volume for the quarter also improved, reaching 1.18 million tons, increasing 6% quarter-on-quarter and 5% year-over-year, as solid operating performance and strong demand was supported by customer diversification. Both business segments delivered their strongest quarterly results since 2022.

Polyester achieved comparable EBITDA of $235 million, while Plastics & Chemicals delivered comparable EBITDA of $95 million. While this performance represents an important milestone, we remain committed to preserving financial strength and sustaining leverage within our target range of 2 to 2.5 times.

I'll turn the call back to Jorge to discuss guidance and outlook for the remainder of the year.

Given the current geopolitical environment, market volatility is expected in the near term. For our updated guidance, we consider that underlying overcapacity continues in the petrochemicals and polymers industries.

Accordingly, our revised figures assume that disruptions subside throughout the second half, and that reference margins and ocean freights decline when compared to the second quarter, but still remain elevated relative to our original guidance at the beginning of the year. We're raising our guidance to reflect the stronger first-half performance and the following key assumptions for the remainder of the year: average Chinese PET reference margins ranging from $170 to $200 per ton—as a reference, second quarter's average was $307, and as of today, July's averaging $215 per ton; polypropylene reference margins at 17 cents per pound, compared to an average of 20 cents per pound in the previous quarter, and such level remains so far in July; ocean freight rates to South America ranging from $120 to $170 per ton—the average for the second quarter was $225, and is currently at $268 per ton.

Based on these assumptions, we are: raising our comparable EBITDA to a range between $750 and $800 million; our operating free cash flow to a range between $300 and $350 million; and we're also adjusting our CAPEX to $150 million to advance our 3-year polypropylene project and smaller investments in PET sheet and thermoforming in our Middle East region. Our guidance reflects our current outlook and does not include any potential upside from the monetization of non-strategic assets, which we expect to advance throughout the year, nor impact or additional tariff measures in our key markets.

Notwithstanding and considering the most recent geopolitical environment, margins and freight costs could remain elevated, especially if feedstocks restrictions re-emerge. In all scenarios, it is Alpek's priority to remain focused on operational excellence and to be attentive to our supply chains to anticipate and minimize risks.

Moreover, we will preserve balance sheet strength and maintain disciplined capital allocation, working to keep the leverage ratio within our target range of 2 to 2.5 times, with the goal of remaining closer to the lower end. With this in mind, at the moment, we do not expect to resume dividend payments in 2026.

This approach will ensure we maintain financial flexibility and position the company to navigate the cyclical nature of the petrochemical industry while creating long-term shareholder value. Notwithstanding, we will constantly evaluate these decisions as results are delivered and new information arise.

Let me close by recapping our priorities for the remainder of 2026: maintain operational efficiency across our global footprint to support customer demand as trade and supply dynamics continue to evolve; enhance portfolio quality by advancing higher-value and specialty solutions to further diversify our businesses; develop emerging businesses prioritizing high-return opportunities requiring minimal capital investments to support long-term growth; and protect cash flow generation through optimized working capital and CAPEX management, in addition to advancing asset monetization initiatives to further enhance financial flexibility. Overall, we enter the second half of 2026 with stronger fundamentals, building on the strong momentum we have established.

I am very confident in our team's ability to deliver solid operating performance by staying proactive and agile when responding to industry changes. Through this, we are aiming to position Alpek as the domestic supplier of choice by staying close to our customers and maintaining service excellence.

We will now begin the Q&A portion of today's webcast. To ask a question live, please use the raise hand feature.

We will call on participants in the order they appear. Remember, you may also submit your questions through the Q&A function at any time.

We will do our best to address as many questions as possible. Our first question comes from Tasso with UBS.

Tasso, please go ahead.

Hi Ale, hi Jorge, hi Rodrigo, thanks for taking my questions here. I have two on my side.

One, probably for Jorge, we have seen PET spreads way more resilient when compared to other petrochemicals. Could you provide some additional color on how you're seeing the market and key risks for a stronger normalization in the second half of this year or maybe on the other side, opportunities that such spreads will be persistent at these levels throughout not only this year, but also in 2027?

Then, Jorge, a second question following this first one, it's actually linked to the leverage ratio from the company. It already reached 2.2 times net debt to EBITDA in the second Q, but we assume that Alpek would take a little bit longer to decide on the resumption of dividends in case spreads reduce and leverage, of course, moves back higher.

How is the capital allocation discussion within the company at this moment and following all of this discussion? Those are the two questions.

Thank you.

Thank you for the questions, Tasso. Yes, on PET margins, as you saw, second quarter Chinese PET margins reached close or around $300 per ton.

They were very strong in March, April, May. There were some declines through June and July, and now they're approaching the higher end of the range we showed in our revised guidance to the second half.

What we're yet to see is whether the most recent escalation in oil prices translates into a rebound of PET margins. That's yet to be seen.

I think it will depend on whether the latest events translate into additional supply disruptions. That is yet to be seen.

In our assumptions, and as I explained in my prepared remarks, we still observe there is underlying overcapacity, and we're assuming the spreads will glide down. However, also observing some events, we expect spreads potentially to stay somewhat higher to the levels we saw last year especially, that were very low.

Again, these are variables that we cannot forecast in great detail, but that is something that we think is very possible in the industry. Again, the peak so far is second quarter of 2026.

It's normal to expect some normalization to that level, but there are possibilities for the margins not to reach levels as low as last year. Again, we're yet to see how industry evolves.

To the extent there are disruptions in supply, that could be conducive to higher margins. In our regions, this volatility certainly supports the case of domestic suppliers.

We are the largest domestic supplier in the Americas of PET resin. We're the largest domestic supplier, the only domestic supplier of polypropylene in Mexico, the largest domestic supplier of EPS throughout the Americas.

We expect that volatile environment where risks are observed by customers in trade flows, that supports our case. It is our duty to confirm and earn the trust for the customers by delivering product on time, with quality, and competitively.

Again, I see this as a opportunity for us to come stronger in the following periods. To your second question, as far as the capital allocation, I think you pretty much answered the question yourself.

We need to monitor how our results are delivered. We need to factor and scenarios where the margins could come down, where the margins could stay elevated.

Based on all that information, we will make that decision accordingly in due time. Right now, we think we will end the year without further dividends, but as I also explained in my prepared remarks, we still have 6 months more to go and we will observe how we deliver results and new information, and more importantly, our outlook and forecast for next year.

It's still early for us to have a forecast for next year. Again, just rehashing, we will plan for a range of scenarios, scenarios where we need to remain very competitive.

Our focus is to operational excellence, so that we build and reinforce our position as a strong and the preferred domestic supplier for all customers. We don't take their business for granted, and we need to prove it and earn it.

Again, that's the view. We will remain flexible on the decision.

We will focus on what we can control, and if we deliver the results and if the perspective is reasonable, those are the conditions to discuss the dividend resumption. Right now, we need to see these results to materialize for longer.

That is where we are. This is a decision we will review together with our board of directors in due time.

Clear, Jorge. Thank you for the clean answer.

Our next question comes from Leo Marcondes with Bank of America. Leo, please go ahead.

Olá Jorge, Rodrigo, and Ale, thank you for picking my questions. I have two from my end here.

The first one is if you guys could provide a bit more color on how the increase in US tariffs and/or the news flows on the USMCA could impact Alpek. My second question is regarding the supply capacity, right?

With the resumption of the war, how have you guys been seeing the impact on supply capacity? How are you seeing the inventory levels for PET and PP right now?

Thank you very much.

Leo, thanks for the questions. The first part of your question was about tariffs.

There are several things going on in the various countries, but I will focus on the one you mentioned, in the United States, there are ongoing investigations on tariffs on multiple products. I think we're yet to see the results of those investigations.

Some partial results have been trickling down already on the investigation relating unfair labor. There is no conclusion yet on that one.

That one will probably maintain the current status quo that we have seen for the last several months where there is an underlying tariff in the United States of about 10% across many countries. Again, but we are within days of knowing the final outcome.

There is another investigation relating excessive industrial capacity, which the results are going to be out probably in the next couple of months. We're yet to see that.

At the end, these investigations look to have fair trade conditions for producers of many products in the United States. In the United States, there is still strong competition in the market from local competitors.

It's early to forecast exactly how we see the impact. I think we are waiting for the outcome.

Again, we are expecting that these tariffs address some of the distortions in the market and bring a fair level playing field for producers of PET and many other industries. Again, it's our focus to remain very competitive and focus on our operational excellence to shine in all kinds of markets.

Again, on tariffs, we're still waiting for the outcome on tariffs in the US. As far as USMCA, for now, it was not renewed in July, but everybody was expecting that.

I think we expect there will be 1-year period revisions. In the chemical industry, there is a strong trade surplus that the United States has with Mexico because all the feedstocks that are used in Mexico.

We don't think it's a critical sector from that regard. Most of the petrochemicals in Mexico are produced with US feedstocks that are fully compliant with the USMCA requirements and will be fully compliant with rules of origin.

We expect continuity from USMCA. Again, it's a process that all of us will be observing, and we remain close to government officials on both sides to make sure we understand how it's evolving, and that points of view regarding specific topics in our industry are that the facts are accurate.

The second point, the resumption of war, it's really hard to say what are the inventory levels. When the war broke down in early March, there was an increase in prices and in spreads throughout March.

I think in several petrochemical and polymers, there was probably an overreaction in March, April on purchases, expanded margins and volumes significantly. Now there is another genuine disruption taking place, but we're yet to see the margins and the volumes to rebound.

We're beginning to see some signs. It's very possible to see a rebound, but is not observed yet.

It's probably a combination of markets in general, especially in some countries in Asia remaining cautious, and learning from the lessons in April of accumulating excessive inventories. Those inventories might be now normalizing and there has to be another round of purchases that could definitely support margins if these disruptions extend.

Again, we are very eager to see this to evolve. Certainly, this brings some potential upsides, but again, we're yet to see those rebounds.

As of now, so that's the situation, Leo. We are still working on observing the markets and

Of course, that's very clear. Thank you, guys.

Next question comes from Ben Isaacson with Scotiabank. Ben, please proceed with the question.

Our next question comes from Vanessa Quiroga with Itaú Capital.

Hello?

Oh, sorry, Ben, are you there?

I'm sorry.

No worries, go ahead.

I have two questions, and they're both on the cadence of the guidance update, and in particular with PET. The first question is, can you tell us what the spot contract split was in Q2, and what are the underlying assumptions for the same question for Q3 and Q4?

My second question is, on the contract volume, how much was repriced during the quarter, how much is still yet to be repriced, and is there risk if everything were to go back to normal today that they could be repriced again? Thank you.

Yes, Ben, thanks for the questions. Those are very good questions.

In the in the second quarter, we we significantly increased our our sales in the spot market. We had, as we mentioned, we felt we had good operational readiness to to begin the second quarter, our system of plants in general have been running well.

Our inventories were on target. That was key for us to capture opportunities on customers who whose supply got disrupted.

Our our percentage of of spot of, spot sales definitely increased in in the second quarter, and that was a huge contributor to our additional profitability. We are working very hard to make some of those relationships more contract-type and more sustained as we work not not only through the balance of the year, but also looking forward.

For us to continue to operate well and deliver good products on time and competitively to these customers definitely enhances that opportunity. On the contract side, there were also some increases in volumes, and to a an important extent, there was some repricing.

Again, that repricing was mostly designed to offset, as much as possible, additional costs that we had to incur to secure our feedstocks in the second quarter. Our feedstocks were also disrupted.

We had feedstocks coming from the Middle East that got disrupted, we had to go to alternative markets, and with volatility also in in shipping costs for liquids, we incurred excessive costs. That was the basis for us to and other inputs that increased, not only feedstocks, and that was the basis for us to have a very positive discussions with our contract customer base to offset those increases.

They were very appreciative of our customers, were very supportive across the board, with the vast, vast majority of them supporting the the the pass-throughs of the additional costs. That was also very important for us to, to to deliver and supply well in in in this second quarter.

The the how those conditions will evolve in the second half, I think we're still having discussions. I think in there is some trend to ease some of those costs, but now we need to process the the additional disruption in the Middle East.

Right now, it's becoming very visible in oil, and as of the last few days, there is a which is the disruptions potentially on on the Red Sea. Again, we need to see how those disruptions will create changes in how the, especially the the ocean freights or the the availability of of carriers for both feedstocks and finished products are, happening in the marketplace.

Summarizing, there was an increase in spot sales. We're working very hard to to not to see those as spot sales, but more than anything as a stronger, larger, and more diversified customer base.

There was also repricing on the contracts with tremendous support from our customers to offset the additional expenses incurred in securing our raw materials, because we were able to secure 100% of our supply of raw materials with significant challenges. We are we are in a very good spot, and right now our supply chains are are are looking good.

And

Thank you very much.

Our next question comes from Vanessa Quiroga with Itaú Capital. Vane, please go ahead.

Yes, hi, thank you. Just to clarify, my question was very similar to the previous one, just to clarify on the dynamics.

On the spot side, you were able to increase spot sales because of the increase in demand and difficulty to get imported products, I assume. On the contracted side, your customers were willing to accept a pass-through of the increase in feedstocks.

Just confirm if my understanding is correct, and then how are you seeing that current conversations for upcoming contracts? Do you expect to convert some of those spot sales into contracts?

Do you expect any change in the structure of the contracts given these ongoing geopolitical risks and feedstock sourcing risks? Thanks.

Yes, Vanessa, I think pretty much yes to all your points that you listed. It was a good recap.

Certainly, the spot sales not only represented additional volume, but also those came at very attractive margins given the reference margins, ocean freights, and the supply-demand dynamics. Those were important contributors.

Also, we had an increase in volumes in our contract customers and also support to pass through the additional costs. We are just beginning discussions for the next period, 2027.

Relatively few things have been put into contracts by now or that we have finished. The vast majority will happen later this quarter and probably even more during the fourth quarter.

Yes, we'll try that our agreements provide some flexibility to deal with unexpected events. Again, I think we focus on reinforcing and building the trust with the customers that our value as domestic supplier is delivered throughout the year and make them feel that with us they have secure supply, competitive supply, reliable and of good quality, and a broad offering of products.

We think that's going to be the basis to have a good contract renewal season this year. We are a few months from that.

We just think the volatility and supply disruptions are conducive to those domestic suppliers that do their job well to earn continuous business with this customer base.

How was your mix of spot versus contract volumes this quarter?

In second quarter, normally in our business, when you add all the Alpek's businesses, normally 70 to 80% contract, and it varies by business. In the second quarter, we probably added maybe 10 percentage points.

We were running well the plants, but we still had room to increase rates, and we added maybe in total, I would say at least 10% increase in the mix of spot customers. Many of those are continuing as we speak.

Second quarter is typically the best in terms of seasonality, and there was also a number of purchases that were aiming to increase the pipelines for some customers. We might not see all of that in the second half, as expected, but all of that is embedded in our guidance figures.

Just a final one, is this increase in spot sales volumes, were they new customers or the ongoing spot customers that you have?

Both. We had many new names, and we had many current customers, both that typically buy spot and contract, that we were able to satisfy additional volume requirements.

It was all kinds.

Again,

at the end, we are ending with a larger, but also more diversified customer base, which is healthy for any business in general.

For sure. Thank you.

You're welcome.

Our next question comes from Thiago Casqueiro with Morgan Stanley. Thiago, please go ahead with your question.

Hey, good afternoon. Thank you for taking my questions.

I think most of them were already addressed here. I have one on working capital.

We saw that there was a significant pressure on working capital during this quarter. Obviously, it was largely due to higher raw material prices, and I know it's quite tricky point of discussion, especially with the volatility again, Brent already surpassing $100 per barrel today.

Would like to understand what are your current expectations on working capital? Should we expect a strong relief already in the third quarter or this is something that takes longer?

Then my second question is on asset sales. I'd like to know if you could provide the evolution of discussions around the asset sales expected for this year, and I know the Monterrey asset sale is more of a longer-term goal, but are there any updates on that front also?

Thank you.

Hi Thiago, thank you for the question. With regards to net working capital, yes, it is kind of a tricky question how things are evolving this last days based on crude going to $100.

What we have in the guidance, in the updated guidance provided, we do have a small recovery on net working capital. We will see how prices evolve, but we remain very focused on having a very optimal net working capital for second half of the year.

With regards to the asset sale, we divided into three phases, right? Phase 1 is what we've been working and communicating these last quarters.

As we reported, we already did the Beaver Valley asset sale. We continue very diligently working on those issues, and the idea is to get to the $30 to $50 million of sales this year, right?

Then we have a Phase 2, which are another assets in the US, Mexico, and Brazil that will come after Phase 1. Then definitely we have the Phase 3, which is the Monterrey asset, that will take a little bit more time.

That's very clear. Thank you.

Our next question comes from Alejandro Lavín with Santander Asset Management. Alex, please proceed with your question.

Hi, thank you for taking my question. Congrats on the results, everyone.

I have a question on volumes, right? Clearly you're doing very well so far this year, and obviously you raised the guidance, great high prices, good contracts, good spot prices, and so on.

My question is going forward, how can you take full advantage of this upcycle, especially focusing on volumes, right? You did manage to increase volumes 5%, but what happened if prices reverted fully back to, I guess, normal levels across the board, what would volume growth look like, and what sort of strategic actions can you take in the meantime to sort of secure a more balanced growth going forward?

Thank you.

Alejandro, certainly we are fully aligned with the goal of growing our volume and increasing the quality of that volume. It is all with the foundation of being a reliable supplier to our customer base.

For the vast majority, our relevant volumes are volumes that we supply locally in each country or region where we have our assets. For example, in our PET, in our key markets, there are some level of imports that we can still replace, and we did actually in 2026.

Again, it's a great opportunity for us to keep that continuity. If the spreads come down, again, I think we have a great opportunity in front of us to even with spreads coming down, to retain the volume.

Again, in this process, we were also able to increase the mix of what we sell. We increased the sale of polymers, we reduced the sales of intermediates because there is more margins doing the whole chain.

Again, it's a very high priority, but it all rests on running well and delivering well to the customers. I'm just fully aligned with that's very important, and we have a great opportunity in front of us to retain this expanded customer base that we have with us now.

Understood. Maybe low single-digit growth is a normal base case for steady state long-run growth in volumes, I guess?

Yes, it is possible, but we did have a very good utilization rate and volumes in the second quarter itself. I think maintaining that volume, yes, year-over-year, we will expect to have some growth going into next year.

If you look at the quarter, second quarter is a year where it almost reflects not totally full, but our asset base very highly utilized. If that opportunity continues at those levels, we will seek ways to debottleneck our system or to relocate production from less strategic or less attractive markets to the most profitable markets.

Our system has some points of flexibility to still capitalize upon the opportunity.

Understood. Congrats and thank you again.

Thank you.

Next question comes from the Q&A function. Rahul Bhat from Ninety One.

Please proceed with your question. Here we have it with us.

What is the company's plan with the free cash flow generation this year? Any plan to repay or refinance near-term debt, including the 2029 bonds?

Thank you Rahul for your question. We're maintaining a discipline to generate the cash flow.

It is very important for us to convert this EBITDA to cash flow, and absolutely, the idea is to use this cash flow to reduce and repay some debt. Together with that, we are evaluating refinancing facilities, and with both proceeds, we plan to significantly improve our debt profile.

It seems like that was our last question. On behalf of Alpek, thank you for your participation and continued interest.

Please contact us if you have any additional questions. Have a great day.