WLK - Earnings call transcript Q1 2024

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Operator

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Westlake Corporation First Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, ladies and gentlemen, this conference is being recorded today, May 1, 2024. I would now like to turn the call over to today's host, John Zeller, Westlake's Vice President and Treasurer. Sir, you may begin.

Unknown Executive

you. Thank and first Westlake quarter everyone, to conference to our discuss XXXX welcome morning, Corporation the call Good results. Chief Executive I Chao, am team. President our our our Albert and and Vice President and members joined CEO; Steve management today of Financial Officer; by other Bender,

conference and PAM which call, the Albert, who with open which will products. Today's concluding open or HIP operating our will housing infrastructure Westlake's products, few performance. a Performance materials we after refer regarding with financial refer which the few call to we Steve or X Albert results discuss a reporting and to comments and will will up add During materials, our will refer we as to then comments, will segments: we begin essential call to as and and questions.

these As recorded we refer fully related as of charge $XXX a a $XXX fourth the million noncash well company's during reminder, items million earnings quarter claims. this We on of business certain identified on liability call epoxy share and a income earnings to charge financial XXXX, the as in call. References the of the and charges resolve impairment to impact items. to exclude to income release operations, conference as from this our per identified EBITDA, to net the

as made available information that risks or financial section certain topics results GAAP non-GAAP the beliefs Investor by measures. discuss to and A in to financial These As such, these will of release, is and subject is as statements to comments are our financial is which predictions forward-looking management. made forward-looking our on our this earnings management's currently measures call using available to going underlying suggest or reconciliation will be thus contain management provided Relations to in uncertainties. business website. Today, information is regard based on non-GAAP in assumptions of expectations well measures that

the that these for differ which our you XX, and Form is actual our are about in to Investor our issued XXXX, We uncertainties of lead section discussed and results. available year filings, Relations This first risks details a other factors ended SEC SEC at could Westlake's website. This reviewing in Westlake XX-K quarter release more of These encourage learn by press are results filings. December the Press with westlake.com. document these morning, website available our Release to on also

the Westlake's replay We the this X today, website. hours included call via in beginning on earnings call. This X, of of Investor time-sensitive presentation, available information may our note speaks be be also any the of call website. you May XXXX, may have be conclusion accessed Please therefore, following today, accurate only section of are information which advised replay and reported A time as an on can found replay. longer today's Relations will be of as that that no this

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call I'd Albert Chao. Now over turn to to the like Albert?

Albert Chao

We everyone. to first esults. discuss XXXX quarter joining appreciate morning, John. Thank you Good you, us our

fuel an sales of quarter as per sales results feedstock we EBITDA volume net XXXX net quarter $XXX million and of and of For the from XXXX, first power lower Each and $XXX or of we of million $X costs. share. billion, income was benefited fourth from higher reported $X.XX our improvement

of pricing in the reflected sales many volumes activity a modest our occurred saw Our XXXX, to that results improvement improve. we began and products destocking as throughout higher from

asset-light, us infrastructure quarter and to and HIP's activity. XXXX, the cash-generative construction material first an North year-over-year growth leading resilient margin our in with up Our enabled year mix while volume costs EBITDA impressive sales sales This an drove earnings XX% with our overall residential volume sales of the HIP and well, record model. HIP performed to solid on XX% lower from favorable margins combined American segment in EBITDA exceptionally positions period. quarter business generating grew as stability prior XX% and profitability first to providing capitalize

HIP our in segment economic the to reflected While weak PEM our perform segment and continued global margins well, conditions. earnings

compared the the quarter XXXX, to encouraged and of net PEM fourth in XXXX. sequential XXXX, For quarter when to are improvement first our of lower of segment quarter metrics by we compared first these margins but sales reported when the the

our time, us same oil the are activities progress end power in trends from sequential and cost we seeing in quarter improvement compete experienced our fourth The company $XX demand export recover well first prices the markets. At low-cost a XXXX, to demand, and some feedstock the actions. focus global throughout of our on with in approximately of on of cost U.S. first across quarter advantage reduction $XXX $XXX destocking million expanded we the improving U.S. competitive the as by position due enter lower savings XXXX. improvement operations. during volumes prices, This making we quarter. European we also which million our reflects And to an second the PEM in energy feedstock to and the XXXX beginning are towards to million competitiveness the the and of the previously provided to quarter higher achieved Coast epoxy improve pricing in XXXX Gulf both global communicated positions we targeted of Meanwhile, XXXX

our production ability epoxy reduce confident we below to are export our pressured continued our competitiveness to business While improve to our be market-based Asian costs priced by in costs. volumes

proponents improve a producers trade requesting imports in but in geographies all epoxy disposal progress the resins X coalition the level a which ensure portfolio on as shareholders. coalition, the committed to for we and with the U.S. I'm X, counterveiling participated to call over the goods our investigations use we with producers free working at our and our Steve operate. Overall, trade resin to groups the hog petitions Commerce, April filing the of as such provide U.S. initiation our and also quarter remain remain of basis, the playing ad making detail International epoxy a Trade our regarding all on first that duty tools create and fair of hoc of epoxy would value to from turn pleased more U.S. Department I financial like the Asian Commission of global countries. We for on we certain to are and with fair to the of result, member in of U.S. we field position, to now results resin our XXXX. businesses had of antidumping a As

M. Bender

sales and higher quarter, in resin, market first and reported PVC increased offset by for net quarter quarter by cost-saving income in strong income to items, and Epoxy net million on $XXX lower primarily resin, Westlake or morning, $X $X.XX the which per Thank good of decreased actions the HIP. When of everyone. for costs. restructuring caustic identified materials restructuring in income, excluding prices demand Net share million an sales you, billion. average Albert, the first volumes, partially PEM, fourth first $XXX in of in in seasonal and quarter sales lower due from costs XXXX. compared primarily year-over-year of improved particularly were decline sales The lower net income margins XXXX soda, the quarter to driven by costs lower due was volumes of XXXX, growth, million the and $XX uptick our to in first

not on For reported the to FIFO in the would of resulted been favorable quarter an earnings been have LIFO of XXXX, $XX method utilization compared of This the pretax only first our audited. what accounting method. is has of and impact a estimate million

lower our exciting solid go model a hope initiatives, host business EBITDA efficiency-focused savings asset-light, activities and quarter important Before HIP first progress that our XX% construction want nationwide margin we join home automation culture focused acquisition on cash-generative HIP opportunities XX% in branded our the growth HIP HIP's in operations. Overall, integrating the quarter quarter. as wider synergies this increased have segment. year-over-year cost benefits and remodeling. The are acquisitions segment with the geographical through us some set, pleased was implement New cost results last cross-selling reflects products margin. we you driving first event demonstrate progress the and the of of as volume XX manufacturing share These discuss going will we cost. and of typical few about supported to made product by beyond broad strong details The the our in our EBITDA segment results, first and the optimizing much We within years. of savings our record I on with in more quarter teaching we I York distributors we in to part and high-level into very in seeing record investor materials well the optimization production provide of a thoughts combined footprint, the June are

our PEM's to Turning segment.

flood results Our improving and reflect segment, quarter. of efforts second XXXX product halt to by for are took cost and challenging savings encouraged trends of for million said, volumes improve the industrial company-wide we in first this including our target quarter progress enter the the and the certain Asian macroeconomic categories. financial steps sales our manufacturing $XXX to to as environment. both We global the performance million toward we low-priced pricing imports proactive $XXX That

performance. segment service specifics the to Moving

than XX-month sales. achieved EBITDA of EBITDA a $X a Fittings businesses. segment produced particularly billion the of acquisition HIP of sales materials achieved sales $XXX hard XX% $XXX synergies improved in Trim. rose trailing quarter XX% record million $XX in first in mix $XX million to offset our & Siding of the driven other HIP compared of and across average million increased to solid growth sales Housing sales increased in and sequential and volume costs savings colleagues our solid sales year-over-year and the achievement fourth product volume benefits. Notably, quarter volume, from of synergy quarter million important cost $XX $X exceeding Our compounds on in quarter 'XX This business. milestone product to a in quarter Infrastructure products, sales work for & XX% first order growth, in our EBITDA Infrastructure the increased $XXX due XXXX testament XXXX, When more this product with billion increase the million X% segment resin double-digit higher-margin an by of due the is the million $X to time. Pipe into of sales of fourth & prices. Housing volumes, billion which Products decrease to increase HIP a lower due sales first

fourth margin was year prior quarter the and materials for to the period for the and The higher 'XX costs of and while XX% improved lower volume, in EBITDA was HIP's quarter. sales sequential primarily the the as XX% a was quarter sales second of any manufacturing due footprint. lower to improvement in from highest margin our first optimized mix cost set record sales expansion volumes, restructuring XX% from higher due we

Moving to our PEM's segment.

million of in result EBITDA a the PVC volumes, caustic soda average below $XX increased quarter cost XXXX from a PVC our $XXX as for quarter due quarter EBITDA million by and power savings selling basis, $XXX particularly first to prices, fourth First feedstock, costs epoxy for epoxy actions. segment fuel particularly million higher $XXX resin, the of and lower EBITDA first sales quarter PEM's was and of XXXX of million of sequential lower and and resins. On of

sequential in shipping recent in Europe sheet. a second reduced low-priced Asian improvement as we end by XXXX volumes to pricing disruptions from entered growth, Red our destocking and the Sea. Shifting balance sales As quarter, of reflecting we as result the the we experienced mentioned, are Albert and an competition in in the trends of imports encouraged

of billion maturity XXXX, and a equivalents As billion, March XX, were $X.X long-term cash staggered schedule. rate debt $X.X total was cash with and debt

of in provided activities accounts the mentioned. first in million an demand by impacted receivable increase was $XXX previously resulting net grew inventories working the of capital cash our seasonal I quarter For XXXX, we by uptick and as from operating

value. to order to opportunities strategically look in continue our will to sheet create We deploy long-term for balance

guidance some provide modeling. me for your let Now

rate. and and Products to execute Infrastructure we billion, $X.X in expect with As operational between continues housing and margin be to prices, revenue and financial EBITDA our with we continue around view demand XXXX capital to $X $X segment in XX%. Westlake billion throughout and from cycle, earlier be our our to which discipline as run to unchanged XXXX, total we is similar expect our and and invest guidance the approximately business is billion depreciation amortization we expenditures

approximately planned As reminder, turnaround second XX a is for ethylene cost to begin of days. this this to unit last of Petro our includes projected in scheduled year X that half the

$XXX to million target quarter. will the of to with the in million We XXXX $XX continue million roughly cost $XXX first savings in achieved

XX%, interest to effective full be we tax XXXX, we of million. cash approximately be approximately our expect expect and $XXX rate to the year For expense

Albert me Now provide let the business. to current call our over to a turn back outlook Albert? of

Albert Chao

Thank you, Steve.

quarter the volatility the our of demonstrated first again, strategy reducing of segments overall once vertical and Our earnings. in diversity of the value results, integration our our

segment brands initiatives. Meanwhile, economic segment continue to by ISM the and and U.S. Europe. mostly our savings macroeconomic well, and results lower manufacturing in reflected improving the material cost in value of and our strong demographic HIP post readings slow of a Our cross-selling trends, supported Asia steady the PEM favorable index perform costs, backdrop COVID but recovery in own

packaging need global a energy, clean past view the been consumer for over positive demand our transportation, trends recent While water, have by to continue renewable and we growing have long-term supported goods. year for the challenging,

achieve help contributed efforts our customers sustainability the sales to first Our quarter. our goals in their to growth

volume XX% as for post-consumer are increasing meet resin polyethylene nearly quarter bags fourth consumer post-consumer adoption trash regulations particularly new from material our usage. by sales consumer the seeing increased to example, product, for we for of the pivotal sequentially For XXXX of

the customers' our and Europe, make PBC examples footprint growth now manufacturing portion Westlake has just are same customers our significant PVC on sales products. rate. At green sales our and the impact ring in offers developed green PVC to These we environment. reduce to a few products European Our to environmental continue improve a investments processes representing innovative long-term support of in plants time, of

to evolve. call key solutions the weighing consumer want current strengths, inflation on secular continued the of characteristics feedstock our conditions stock cost These trends backdrop, in assets positive years I customers' products policy product spite and our in and as macroeconomic monetary and many low-cost remain with and that our housing the highly and that American this and North the our namely Overall, in we facilities demand. In and service to North are from needs. We unique product initiatives positioned development our supported opportunities deliver of need solutions meet continue developing scale in offerings, segment properties global sluggish segment lingering America in that review questions, growth, margins. products invest with branded perform needs markets open our with Before sales to to HIP research global rebuild to world your thoughts following advantaged are in demographic benefit for should our environment saving cross-selling restrictive nationwide customer our on well to high structurally integrated, underinvestment. have challenging geographies around we in infrastructure strong continued support is by believe of rates our outlook. volume Results tailwinds solid PEM meet and innovative to combined with drive our with while the by automation place supported

John. are as significant onetime strong view significant investment-grade fortunate EBITDA will deploy our our months financial a the as for sheet as back of debt net value we asset we to below XXXX, with While arise. Thank long-term call I evaluate trailing for over opportunities call. ways global have no and conditions XX over to maturities. We we continue to balance our earnings slowly improve near-term balance solid to create to economic debt course now further to sheet the position you to expect this quarter first very listening turn much shareholders a

John McNulty

Thank you, Albert.

has Liz, questions, will available additional questions. a our ended. and the X be which like after remind that now replay will our available provides on of would this earnings clarity into listeners take taking begin we hours call teleconference results we Before to is our I presentation, website

Operator

Instructions] [Operator

from first Citibank. question Our at comes Cunnigham Patrick

You open. line is

Patrick Cunningham

been attribute that been How opportunity? additional of you and hit cross-selling share gains? to the much share maybe How the volume volume customers versus offerings larger your benefit from gains increased just for quarter themselves homebuilding has would gaining you and important

M. Bender

channel. Yes, aligned participating well sell to as and share, you, homebuilders we with growth. their well Patrick, base our customer large you nationwide as a we're understand continue homebuilders think, with distributors to the and been can really it's distribution able market nationwide We've Those participate are as is into those -- with grow I Steve. gain

progress We're those construction penetration So have partnering they good in to share. market, very and so builders gain participating them. we good it's have in continue in that remodeling with repair see growth Certainly, that the very the market offerings really all arena. entirely the brand continue not market share new nationwide also to that we in along with

Jeff Holy

seems just HIP sort into on for Maybe you particularly are just then which year? sales the of It there a context strong what's for headwinds and that margin outlook? cost Why, of the the quarter, you're for that bit And outlook it. price maintain. Got volumes your baking -- first in guide additional the

M. Bender

Yes.

So it's have sales certainly, variety interest still we're a certainly, understand that are of national providing And that environment. we incentives sorts. aware all homebuilders of an well these elevated many we rate

trajectory that So this forward a as that rate we see we have to we progress, do continue and that wonderful business think assess kind to, really off to that our HIP start many we'll right But now, outlook to see if progressing see that strength is we the in continue guidance of these we we year really prudent. to provide. But is think continuing improvements look on homebuilders the of interest and the the the speak

Operator

Frank Mitsch from [Operator Fermium comes Instructions] from Research. The next question

Frank Mitsch

there? you quarter? second visibility How into Do on it that Is of could the the describe on question in describe just you have it the third your terms your visibility would the guide order how you follow last Yes. quarter? If maintaining would I that books business? in through up HIP, on

M. Bender

our quarter but do the And Pipe the into Trim quarter. Frank, second into would as good it remain quite leading to of get & have question. only the We the not I business. which strength We & Yes, backlog that we our visibility expect we good business, strong. in second are Side good business, Fittings continues very see say also HIP in that to terms with in indicators see

we Fittings, the a construction pull indicator into we say, really second activity Pipe construction in new see as on course, forward going I the see & of good Of as a quarter. is

Frank Mitsch

did date you shipping XX, had Sea Red if What to how do it Terrific you helpful. European operations. your -- then talk about a talk And Europe If the that think sort of challenge looking benefits could you the bit And see? a forward impact the bit, June is what you there. would benefits on sustainable be those that little could about are? little

Albert Chao

think I the slowdown see -- improved imports first did yes, And situation the to quarter, the techonshipping of Oh, we But situation somewhat. goes vessel and still Sea Red I think during Europe, out a the continues. while this Europe. the

Frank Mitsch

So continue correct? the benefits units should second through production your quarter for at the localized European point, this

Albert Chao

Yes.

I volume second we and volume, should of third best improvement usually see quarter, -- quarter think the some best or so year, as second quarter especially the the the quarter is well.

Operator

The comes Stanley. with next Henricks question Turner Morgan from

Vincent Andrews

some market? trade was there you presses price for in of improvement? It's you actually Are contextualize Morgan flattish us of second you Could being April, like as the a looks it what caustic help looks to ask anticipating price the not outlook on for could you're It any I If and Vincent Stanley. Andrews that are soda outcome. maybe the anticipating the durable. a PEM expectations volume not understand like particular, though from your quarter, about and sort increase

outlook So I hear your would here. to love

Albert Chao

Yes.

generally, because general, increased available. again, think, there's globally, construction the more cost in I demand PVC in of

into improving as U.S. first $XX the somewhat. of increases, and price So a second will increases see had, turn and the the export price between leveling as the we move we off probably X months, you we mentioned, third quarter, price we in see globally

price think less more that we be So the or flat. will

otherwise, are today's the condition of economic consultants pretty levels. general depending improves price half on saying the improve, if be of the the global and the second of to will some that how it fares think year, in at cost stable out I

Vincent Andrews

borrowing a just environment, a borrowing knows the through cash and Okay. But big is a move being of facing as period I'm really seeing and we're front to buyer, balance they might And opening want the buy on advantaged be M&A how we time you're follow-up, this who just M&A of of something as as obviously on still wondering maybe then long there cash a else where able year? where have if unattractive for rates up will getting are. pile to buyer a the those Albert, anything are you anybody stay that to you rates you

M. Bender

been we look very going the give are side of at we say to to as at as making thoughtful Yes, know, business, very to you of focused at how the through both chemical we're capital. And we making continue we've Certainly, products continue is very Vince, that going focused opportunities to us return. cycle, the that deploy the return. rate investment I across about side building be would any very risk-adjusted we're and well, our sure that

So but have investing very but at we'll a do think thesis. us of the think capital that that and in position, we business it cycle to very, continue continue I good yes, balance the we change thoughtful have sides over businesses, to investment the looking the the strong both approach how really sheet pragmatic about opportunities, provides think, doesn't really we

Operator

The next with question comes from Yefremov KeyBanc. to Aleksay us

Aleksey Yefremov

list far to commentary? products just of any of categories you categories provide you pipe or Do Do key the or you stand X, so out Steve, this is on interim et Alberto Slide not? particularly performance side year strong cetera. the the sales

M. Bender

positioned spoke to I I well perform to and very really & this & the Trim are Pipe Fittings were, Siding I very, say, that continue the strong those Yes. They're, competitors. business. those with I really Aleksay, say, that would that think, in as the in we marketplace

& and of in positioning business on our our Siding strong a Trim. Pipes have course, business, Fittings We and

as in roofing improvement brought as the Boral well good businesses materials really stone. decorative and see that Windows to continue We

well. you selling branded I performed. the quarter, really were customer has to really really & perform continued say those Siding that strongly this that out nationwide would the those the from that & our continue results would say So and see with we those specifically to I Trim acquisition that points products can Fittings base. But And be Pipe called in good

Aleksey Yefremov

more And big potential additional maybe a valuation Understood. looking then talked about for you're the the you of line for HIP On question. picture business, to business. your acquisitions, opportunities unlock discount but product obviously before

about think or options, the is sort of option company you traded those As the epical stock business an merger was building would publicly the building large that products separate another from another products?

M. Bender

Yes. as really equity-based businesses, or side. all at they're what we of would what interest well proposition the that I currencies, looking and the out acquisition about mean of matter think cash to It's issues whether is to a considered. build value be just opportunities are is the other

the value of us. those a interesting the to just currency matter kind what side So to and of considerations or is freely and available of It's oriented table. other that

Operator

question from Ahmed Hassan next The comes Global Advisors. with Alembic

Hassan Ahmed

with as that there is $XXX turn momentum behind well. from into about well. maybe did strength and EBITDA to seasonal you, to pricing guidance in of volume it you of you're seems in million I destocking talking it, of a obviously, sort the into period going being of QX. about and I on wanted just we're the bit guys regards things like. And talked of your side as sounds And the that mean, you a points quantitative and qualitative a that sort touch of

fair north that kind of appears I it to about $XXX thinking billion. so like million right billion, least, Is annualized the is of -- of that $X.X So things? mean way it very at XXXX, you'll assume the make $X.X

M. Bender

terms remain the But guidance, pricing we think consolidated have the Building I that think you as questions Products outlook, know, do guidance to stabilized and seems see in And volume think, think we you point see trends in we that's, prepared from business. can provide this the the I pricing company about it the though provide as our half at very as back still as about don't the of for this of we the how across kind of chain. And Hassan, trends. important. we remarks, year

So numerical Lake we basis. see, any not have a West on for a can constructive consolidated guidance but outlook, providing you we're as

Hassan Ahmed

Fair enough. enough. the side of the Fair And business. to box changing just gears

that corner, time discloses One of separately a your From is EBITDA kind appeared competitors those for their Epoxy in epoxy turned first turning there. of positive couple results. that a of it the actually results, quarters

So about there, there talk of you sort scenario in could the through? as market that these are fundamentals go you it's the seeing as way what going about are a cases where guys in business bit going being supply-demand a terms a the antidumping dynamics of well in actually brought scenario

Albert Chao

Yes.

we're seeing some into bit in a and as And demand are epoxy a well. all We prices regions improvement slight less Europe. imports seeing through also, the are seeing in U.S. U.S., Europe Asia. and improvement we And

but infrastructure. dynamics energy looking mills construction happens associated with the with So wind with and better, lot which still coating, things think renew a are I on

would I impact So on think epoxy. the demand globally for economy the general global

Again, -- dynamics, and these the better is the change. X seeing improvement. different Asia do weakest U.S. of of things to the we a So bit little generally better Europe regions, then the signs region are is speaking some but for and could

well mentioned, as interest Steve we with half elections. know from inflation, rate much the geopolitics uncertainty As and second as don't so

strengthening are work these on positions we but So in costs, we and can our our all I that we including reduce do -- of to and cost our really optimistic M& both alluded we base, earn open on think to segment, M&As. And are sense to to very PEM deals comments, and capital longer-term as with products, in to HIP above basis, is ideas our as we all financial us. well. And goal our asset make

Operator

Mike And from Goldman comes next at the question Harris Sachs.

Unknown Analyst

still position I a #X the in mean, even think deck, M&A? would current sales the XX%? TAM. for suggest about up earnings rank of $XX growth only And of have [indiscernible] it the more can the that TAM current on market annual share other U.S. meaningful opportunities? Or should show XX% you how if Duffy that though your question have looking require portfolio? HIP X HIP a at serve Slide On we so, you you with the or would I in pick this roughly And list If For morning. you part, would you a And HIP. about how #X M&A, most market the of more billion.

M. Bender

question. underinvestment to And invest has continue in you Boral in for the infrastructure both market are need probably our you've broadening we is of got XX-year addressable in opportunities housing really -- of opportunities seen answer Alaska total and course, remodeling portfolio the When age at grow construction we're And in for we that one are ways good we and our both of that look being good and infrastructure a to that that a average, broad repair has Mike, overall Yes, to us opportunity. think to the adding market great HIP acquisition good the This it area. and about spoke provides activities. to remarks, housing. The portfolio. great think to of and The new is opportunity prepared continue in continuing examples segment. the bill

answer to additional growing about way the would overall marketplace. our address the to current you think -- needs add market, that I with in address can address the is grow the we expect this to and see the we pieces where but large can we as we portfolio So portfolio, want that

pieces we think we're about when looking is to to have products this that acquisition the So why orientation, overall HIP. important add in portfolio building we

Operator

from Partners. Kevin The Vertical McCarthy Research next comes question of

Kevin McCarthy

than what have segment, thought important most par? upside better, better of you would ago or was XX% drivers In months come EBITDA your HIP were quarter your in of first the margin variance? on If did it X margin the

M. Bender

Kevin, and kind first to it than would that I I beginning was to And stronger quite had of first that guessed the in be saw very start strength construction in continue year. say to would quarter in levels a quarter, the the strong. we markets we the strong have activity the restock

them growth in service homebuilders. And continuing we're distribution have through that are that share nationwide them mentioned, participating As market and I share, them. our seen many with of market channels, we these partners we've to while grow

the growth business we've ability seen to strength them, strategy their with strength to the we're products. participate business growth these markets and And that with in -- I their penetrating the in in of that the our so branded think seeing overall given that that and speaks our

So I would I than have in would say, quarter. quarter the strong stronger yes, you'd a guessed me we earlier had asked if and fourth very

Kevin McCarthy

those quarter? to you vinyls you if comment may gears Can to look you on how to chlor-alkali think quarter, patterns the relative rates first And as rates I those in in your second Okay. then seasonal operating shift businesses? the do might And ahead normal businesses. your and operating trend

Albert Chao

Yes.

think first supply. is also there hence, going on. questions that we were one in operating rates there's XXs, chlor-alkali was the earlier And be in turnarounds high turn the can And on higher. and partially more I probably over, quarter when the the will the of

you of as products, its global the U.S. know, products. demand for exports percent around on XX-odd depending So

we to operating first than would the the be in the higher second So quarter. rates, quarter expect

Operator

Wells The Sison at from next Michael Fargo. question comes

Michael Sison

to start nice the year. A

supply/demand some was polyethylene feel for those price may supported? there well. I increase How about announcements And out polyethylene, do these you for price days? you And there For April. can for do increases think be potentially as guess

Albert Chao

in had in a $X.XX in the May. for for has a over I We year, looking U.S. as think April demand the export the a and been quite $X.XX and Yes. price price increase as yet. in domestically The price not is April industry well increase increase good And earlier

negotiations with well, in of pricing. terms So

we So that how days goes. you in a tell few will

Michael Sison

just then PEM I And on understand. make XQ, to sequential total, for want basis I it. in sure a in Got

total. into continue sort a second are lift to seasonal seeing the did in quarter year-over-year as quarter? in of do then, sort think of it mean, your -- the will first And volumes will still You I grow you

M. Bender

Yes.

stage year, we what QX. as the transpire do 'XX. the say quarter Mike, continue we're we of our the positive into to signs that to first we or the very seen of that to but But across, we see second continues half into that second PBC. as to continue look far be has into as our year. But back look certainly it's we then see and quarter. of is terms caustic here traction second results will constructive strength enter overall quarter in see on the that were half be at it in in hard is I So remarks, quarter. be saw certainly, volumes We've go we the the first for to mentioned or the as outlook into this price the yes, volume in in And quarter, the and continuing pricing whether back prepared forward polyethylene in supportive in see But hard it the which positive would of

Operator

from The comes Spector question Josh UBS. of next

Joshua Spector

something specifically wanted to margins Typically, and looking ask make to at sure to quarter. if see and the the thinking wanted HIP? check movement second in in HIP that understand margins wasn't an abnormal prudence the discrete on just be up adjustments are margins I about, lead sequentially to should pricing we on I there else either year. there's anything or or PVC anything that will sequential

M. Bender

So the same products pushed and into increases the quarters. we Josh, second that price have quarter the we into push But we in you're typically volume right, quarter strongest through first of forward in the those the the at building being time, quarter, third second do are quarter products. downstream some achieved as

and we as we're backlog, push cost we product got to -- those to very so a get solid our to able can we've And in offering. volume hope that extent mentioned, traction through increases I in the be

side look for forward into Products constructive Building we're So our the quarter very business. the we as say, second of as I

Joshua Spector

you've had the housing Understood. are the you that I that I of business, indicators the just guess the the side sequentially, was do That's year-over-year. exposure growth pretty mean to that And down part part trending see segment? good of helpful. but softening non-res other on of And more to relative business some infrastructure of up, how still

M. Bender

construction business looks indicator seeing And infrastructure still in that's business our say side of I a Royal Pipe course, for the good very of the Westlake of Yes. activities as I Fittings mentioned, & would good. our exterior still the businesses. we're remains good. pigeons The backlog

say was government. other positioned will billion $XX passed lot of the has. that very infrastructure And participate needs infrastructure would U.S. and the that bill I that well by of water infrastructure, spend So to the go investment that we're a into in that

So business. very with I -- backlog, outlook infrastructure think -- have a for very quarter we second positive the we're into our our

Operator

questions. like the question from time next We have we do looks Salvator Inc. Tiano with The yes, for have -- America comes remaining of it Bank Securities,

Unknown Analyst

Yes.

I probably million a of firstly, look the seasonality, $XX the when at looks past it So for wanted you QX. understand in couple $XX boost little of HIP get in mainly million EBITDA because like QX mean a to you dynamics bit I or versus years, QX.

think same are about strong and same any your with the or this in we expectation? Or pull the right As we perhaps this order there QX? business backlogs, in now forward -- -- should was is have there

M. Bender

No.

tail of year. saw at I of kind a the seen think the end strength we that we've continued

business the to that seasonality a there's obviously, see. So normally we

in is and demand a housing. picture of both but quarter of the think infrastructure forward, I continuance in the not first a pull the underinvestment

we're their that nationwide grow We're nationwide simply that's not I really mentioned, that participating forward market grow they're continue isn't necessarily with as grow market that's to being the that. a homebuilder se. partners, to and and share. the So share, continuing seeing per in homebuilders with to able And a just market front our pull load strength those as

Unknown Analyst

essentially I and And recorded we brings in below last you to us EBITDA kept the the year. second of see on my Perfect. each QX million which is guess in that you should change the the that X and here segment, guidance it be continue of well question, expect for the $XXX -- looks Okay. you've quarters if positive to what on given you trends that to do

So will obviously, meaningful be margins. that on mostly down, a step

So drive very a cost or would that would be significantly? what narrow in your expectation price big would decline volume

M. Bender

Yes.

into we'll this at forward. year, continue adjusted the mentioned, the as going third see this to I say, here. that, to continue we haven't be see some and on we as in prices these through the really see guidance us resin guidance. fourth the see, strength strength headwind we've see of we would as have the think and if second able we our we continue approach given PVC so see seen As it's in into entire we downstream we The in of harder year our that success if But backlog for businesses. we the building as we'll second to of quarter. to good being that. But But as stage, look And assess do strength half to say we'll assess I But products we the through the go half the only would quarter far, we good our business, push front. strength second I

Operator

The next Blair from question at TPH. is Matthew

Matthew Blair

that? like And of regarding developments, X, diameter strong starting share I the pipe. infrastructure Are putting homebuilders can initial haven't brand-new you demand around seeing numbers the in ask the you're construction any some actual on to there yet? really the are especially for guess, about wanted the that the they're Slide but housing there large comment implication I is started

M. Bender

leads. the infrastructure of Well, course,

we've backlog, good into pipe as in the continues leading the Westlake construction seen that we is business. that and fittings continue so business, business. business, and This strength strong we going And exteriors see be, the infrastructure about to to as the say, this think our Royal is I our that

with And has the & It that to into the so well. to perform we expect perform continue continue first think in quarter, we we certainly, the nice Pipe our -- that have given Fittings will second with position backlog. quarter business, and it does nationwide

volumes of this the So within strength segment while provide good for business, see the to each say of very we continuing don't business. HIP subsegments we're one specific of would these I

Matthew Blair

the a that Fittings looking What especially in are areas What mentioned you HIP like you to little areas then Pipe still catch And as bit areas strong. were good. & up Siding Sounds now. are on? softer right well as

M. Bender

a having the players. of say would strength. certainly, challenged Windows as Pipe the in number I'd called we Fittings certainly called where which business having businesses good Trim And & margins, businesses I'd say very I have very So the those out. more we larger there's a think about stronger strength business than as say just of & certainly we some is Siding bit good the that that out

Operator

The Markets. Capital of Arun next question is RBC Viswanathan from

Arun Viswanathan

the wanted QX I to we guess just maybe understand to be that thinking about sequential should ramp I here QX.

a on So impression million. about and uplift $XX that? it similar you more. thinking I the similar little think really about about When HIP to volume from still up where quarter, a was the bit looks look us are QX -- of that QX? drove seemed amount, maybe about kind XX% as you a is It HIP sequentially, you was about $XXX like up I'm PEM How PEM QX. million think up have be like maybe And HIP could QX, volume you maybe into

M. Bender

Yes.

Arun, we be think as good. business, Building the about continues to would So volume Products I say

backlog. good As I mentioned several times, -- got we've a we've

price in quarter PVC looking that first increases we We achieved through try to be to through will the push these that chain.

in margin so that higher as And we to this with really go forward remains terms of headwind expand being able the volume.

Arun Viswanathan

into go QX? you as sorry, PEM, about what And

M. Bender

first seen pricing stabilized traction the And quarter, both elevated continue. polyethylene seen the we've in to seem at that in the we've levels. Prices with caustic. you've tailwind and over have as well the seen strength certainly, to PVC price of Certainly, we those as and Yes. course these hope improvements

to we we that these really -- remain reason elevated achieved those a will see prices products. levels that as pricing there's across in forward, look that as good think And now those we've improvement at

Arun Viswanathan

And then. just as a follow-up

those of typical that you basis. visibility consistent XX% to kind be do you on as much would looking a backlog should far margin weeks XX% more for And if or say, it Or -- have? then months? is we that would visibility, the have for lines, of a how what EBITDA fair as at, kind So you amount consider Is HIP? HIP along of do in

been you've XX% now. to think I your several quarters range for above XX%

M. Bender

in in So a couple order of typically order at the terms can Arun, months look we of books.

that of XX% where course. at in they guidance cancel as provided time, are we we But the at through of the update orders, of can progress that year. course, we'll is stage, of course guidance any approximately Of the this point we kind and really

Operator

we America And with of for question. time Inc. more Securities Welcoming to Bank Tiano one back a question, stage the have for we Salvator have

Unknown Analyst

-- ask can to systems? changed little the since I composites years versus has was a little commodity And it want your you also about just downstream major epoxy. the years refresh few you that past if a how bit made and about exposure bit ago. products acquisition, And X more the to in I that think

Albert Chao

Yes.

covering applications including of we're aerospace. think epoxy coatings, most electronics, as blades the I windmill, as well

all areas, commodity more in as participating grades. are the both we as specialty So more grades these well

is the and demand we And so in and signs with pricing think back are we markets. the earlier, improving coming But I margin of past think it's of seeing price U.S. slowly. as I has just European the unfair said Asian imports impacted

So seeing already. we're [indiscernible] something improvement

Operator

one And Begleiter Bank. Deutsche more question. please will take from at stand we question Final David by,

David Begleiter

Albert, times just been QX The HIP you've have prices. from margins the believe various PVC years, at back last to also HIP higher margins. X QX. on pushing increased through I

from margins of demand higher why terms even should be seasonally different to QX increasing this given stronger HIP So QX pushing in in would with some prices? the any PVC through

M. Bender

we and positive we're starts outlook the continue in continuing seen, you also in that as starts, issue. about their seek recognize see David, an we've So affordability housing that permits. think to the be constructive remains signals we But homebuilders for to

to the is through, we products. speed we're a each thoughtful recognize but downstream we products through there value push which really we're And sure we can into certain only about pushing that so in for product can making be trying our fabricated the get

matter issue an prices. It's to we of timing the through and push not it's a are of through prices to being of push these able these able So just timing.

David Begleiter

year this some it. the for export of capacity market, other lastly, And How you the that players. there at most geared Albert, foresee as impacting is onstream this do PVC from is Got if market? new all, from coming

Albert Chao

Yes.

natural XX% gas which PVC's think for feedstock. XX% and very is stock of power the I on ethylene, both big chlor-alkali, making position, lower know is heavy with ethylene. I

So PVC the positioned our with continue U.S. U.S. a market to our think power and the is think around in markets. feed around well with position, we'll stick XX, cost And XX the to participate world production. in and a global exports industry industry global low of I great position percentage the high I low participate the

Operator

closing the to At it Q&A has any now this ended. over remarks. John session turn for time, Zeller We'll

Unknown Attendee

We discuss again results. in hope call. for quarter today's will Thank to join conference you call again our you for second next participating our us

Operator

Conference participating Westlake for you Call. in Corporation First Thank Quarter Earnings today's

As has be The will beginning for hours replay call a Goodbye. available X Westlake's after can call reminder, replay this ended. accessed be the via website.

Westlake (WLK) 1 May 242024 Q1 Earnings call transcript