Huntsman (HUN) 1 Nov 232023 Q3 Earnings call transcript

Company Profile

Participants

Ivan Marcuse	executive
Peter Huntsman	executive
Aleksey Yefremov	analyst
Philip Lister	executive
Michael Sison	analyst
David Begleiter	analyst
Kevin McCarthy	analyst
Vincent Andrews	analyst
Frank Mitsch	analyst
Michael Harrison	analyst
Hassan Ahmed	analyst
Salvator Tiano	analyst
Matthew Blair	analyst
Joshua Spector	analyst
Laurence Alexander	analyst
Patrick Cunningham	analyst
Arun Viswanathan	analyst

Call transcript

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Operator

Greetings. Welcome to the Huntsman Corporation Third Quarter 2023 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. At this time, I would like to hand the call over to Ivan Marcuse, Vice President of Investor Relations and Corporate Development.

You may begin.

Ivan Marcuse

Thank you, Daryl. everyone. morning, Good Third Huntsman's Earnings Call. Welcome Quarter to XXXX

U.S. are us website, Lister, CEO Chairman, for the the after Executive our XXXX we today and on call Peter posted the XXXX, and XX, press President third CFO. Yesterday, Huntsman, markets earnings huntsman.com. and closed, released Joining Vice October equity via President; release quarter and Phil our to

some set the Peter a posted of comments provide third Huntsman on also detailed discussing slides We commentary website. quarter our will opening shortly. and

We move remainder the session of question-and-answer the will into then for call. the

During and may they statements while the expectations and of guarantees uncertainties are our call, for let statements or risks and statements, reflect me are remind not our you that projections performance. such forward-looking future make current we the expectations, All future. involve about they

plan review projections should that factors materially cause You for SEC filings expectations. during revising the the or regarding We publicly from our more to quarter. the information not any forward-looking actual on differ these updating statements results or could with do

will financial as income adjusted net free measures loss refer non-GAAP and We EBITDA, or cash such flow. to also

our release, most has can our reconciliations in GAAP been the earnings over now huntsman.com. I'll You financial Huntsman. find posted measures comparable directly turn the to to call website, Peter which to

Peter Huntsman

the of raw aerospace thank modern most and customers world were with largest fuel Ivan, I our our had week, Board past all thank some to in watched built Huntsman's Directors. of to for the one very today. this much, of anywhere aircraft materials as We applied morning. This to you firsthand composite efficient join the you and taking us the time visit opportunity

plant and We a energy that one less cars who the now of smarter, are for Huntsman about me Germany's a to making economy. less for power global All for same associates this company's a great energy-reliant our about numerous and more give spoke electricity. also consume producing making applications components position serve distribution at intensive, sports is our the on reliable the and grid but our that reminder go cause visited it's responsible We is more plants system. I'd premier marketplace. to lighter optimism, in

XX recovered seen performance took policy bounced seemingly a and economic subsequently global past the energy the China's over the and high economic European construction uncertainty. some interest of months, markets stumbled as Over conditions rates we've back beating North America's and from strongest among along most chaotic we as collapsed, a pandemic consumer

fourth the visibility lack of amount the as deinventorying expect some I we quarter, tough quarter our earnings consumer see we said customer of last the be of have As this now on during beginning depending we into to a confidence. and call,

yet seasonality not Our start the real murky, a remain fourth more projections for year-end as does weeks. the for couple quarter

our and However, economy. plant global how our demonstrates in business evolving vital customer just an products are

continue ICE will see the all the to automotive aerospace a we both other industry. be our industry. vital EV to We the of of supplier and divisions, recovery In

solvents cleaner demand industry to stronger and for and the for electronics, and lightweight materials, continue building see growing markets power insulation expanding We in chip materials.

assure M&A our opportunities. and us We shareholders balance preserving we our a pace value returning allow will to that sheet buyback capitalize on make are to program to both share will strong flexibility sure our and

the quicker realignment, and market During and European compete allow respond years. in our announced XXXX, program X inflation, flatten a This aggressively will we complete cost us past more to help over conditions. restructuring will we organization to offset $XXX million

year. As our mentioned will spend we capital this prepared our be in remarks, on conservative next very

with we will well our expected of is on in high-priority as to recovery the reliability safety and an what assure in spend speed proceed will Depending rebound investing We XXXX, growth market as as needed we may a to be projects. a markets believe as position projects that we're year and to direction. conclude challenges in as short, conditions unique opportunities, has what with we quickly warrant. In more been shift other ready

operations capital long-term a shareholder around allocation with conservative up to calibrating will eye We much. reliability. Thank Operator? towards and that, will an spending open approach with be return very questions. you we for the also line our And and

Operator

Instructions] Yefremov the Capital from Our [Operator Aleksey KeyBanc first of questions line come with Markets.

Aleksey Yefremov

see or seems one suggest path China that like be things tough is particular. XXXX? China reasons, Do could globally MDI, so, Peter, better a of for you main the anything in in it in

Peter Huntsman

China, the as Aleksey, Well, slow And we've taking all, year that think steady for look and been we're hear at look, saying China. you. a recovery that from place I past I first of to in it's good seeing

an earlier think that. recovery bounce that outlier going on were housing following, of the a overly saying But rates not we're there'll be was little but we that when a we're that year people will the there And sudden in back. I were -- bit reliant that market to expecting very interest in we're that mean seeing are typically, a be dropping. I

China I conservation building the domestic around think in are on materials, around around where invested the insulation, energy we EV market.

market get in in ICE the share both auto, EV in and and in goods and to continue appliances. consumer We

continue rather think throughout the to the focus steady actually year. continued So end, And the prices see to growth in and slightly mean, in from where as economy. And look to think China. side that started the and beginning Chinese I consumption they Chinese year, to that of going I I at I see we're of they're of improvement that, on that XXXX just our but from we're going slow Chinese up continue recovery the not to domestic export is in the the segment building that economy area.

Aleksey Yefremov

it longer? in last in issue sort of as that that Or like raw QX, margins materials some should for affecting Do in temporary you such follow-up, quarters? time a improve margins QX. as reset QX sort seems spiked is And a subsequent this of a see could it

Peter Huntsman

Remember, permanent companies, is chemical think but the this time I if today, a still by reset, places you various raw look you be from shipping buy to I it suppose doing the for and is going material today, you're it material most of we when don't But any up it's how that different the there world. think don't something I were you volatility. I product the buy around accounting. some end as your guess, at

it You're inventory. That months. your from your that goes works getting bringing be in inventory, X of your you're it. and customer, money months the working through inventory to billing your you're anywhere It you're your for to inventory, X can value customer

when If were costs, And saying the worlds were of are we of go fourth all that's a the reason ago you we demand kind worst uncertainty material why think the we and raw rising the usually get my that's opinion. into slower is I periods and into is the quarter global anyways. a as time seeing rising which deinventorying people quarter, cost in

slower typically think kind to that see I on costs, a higher demand, we would and expecting of earnings. drag mean were that

I to think reflect given. that that's we what tried forecast in the we've

Philip Lister

think in $XX I risen headwind $X. $XX Spot material. but clear at fourth from about October Natural got $X.XX. you at raw the Aleksey, to about we've It when quarter look quarter, a to November that It over also going in today. Btu largest our to benzene, for has Europe X. approximately settled gas lower, is particularly $XX Yes. a it's averaged $X.XX is price in which settled

down, is benzene benefits the But outweighed are natural headwinds in So chain, epichlorohydrin chlorine chlorine are there with some falling. there, gas. those and some coming by

Operator

Our of the Sison next Wells line with from question comes Michael Fargo.

Michael Sison

changes. going for really margins talk Peter, where once Polyurethanes get years This tough over and of of and times downstream about be end? year's, businesses, think in a whether EBITDA improve the the think when things can back to to lot should to last things lot a several when about, of look recover, when thinking see this the quality business. But you I about, you just those guess, done total, you've all again, trying destocking the maybe difficult business

Peter Huntsman

Yes.

that in falling as the macroeconomic We're OSB. reason lots it putting product materials. in it is now The for of veterans look largely think of building and MDI, conditions. do downdraft some since that's homes years people right been that years, a that is the using for with seeing I've two unprecedented that years, or that are mildly. And say I with not a has XX-plus They've seen of competing We're last MDI XX about of we've at because I in consecutive MDI, seeing been stopped think not the bedding. brought not stopped we're and last fundamentally, demand. I we and -- furniture this

And wasn't anything. getting so base, application to its chemistry expand its MDI see and We base better. continuing it

be economic normal doing this conditions, their today. I -- fundamentals, there's economic absolutely a bit, better minus mean, shouldn't during if So it's no material than at even or normal doing I immensely reason why look

did the look that's the a that I at you And probably getting think I sense materials I conservation global when don't -- did no the and home America, and large that. new mid-teens business surprise it a would -- as changed have at When it's and strikes of the home, only home, weren't I shouldn't otherwise When That bedding that saw see as very the gladly quarter, you MDI paints look issues. to from automotive it it furnish of outlook directly market what reason we and at hit in personally quickly MDI. When that to we so hit don't foam just areas product change going weren't with not me obviously insulation electronics build macro predict U.S. by than that having housing coatings, when a our a those also around I so and why -- back comes effect. And of have demand. I energy the forth. this does. goes in detrimental people MDI deal and recovers, big MDI take customers recover. means And of any last it's the we back, see industry, a that think component again, spray look how while but of to the furniture, see recovers, on I buy North that mid-teens fundamentals plus insulation going by great more I put think particularly margins. to sort would seen, and broader

Michael Sison

And as follow-up. a quick

U.S. regions? 'XX? the are do the into lower think needs all fourth in thought do in about on shore and the what's You you referenced will prices? Europe? to you Chinese to your the a Where remarks. go those what up think much prepared quarter -- And how And we And MDIs happen

Peter Huntsman

'XX, a broader that's product any issue. being money. sell price And to that what's very fundamentally low fundamentally, to that not need at an to be that, in to right and money issue MDI And industry the It's return bought people has tolerating to of able and shareholders. think age-old is I set now, of product a Well, margins, stop that. discipline a losing be is the sold doing to

think so that And the there needs I a to market. fundamentally, MDI change be entire in

through just seems like things those doesn't close And returning. this there. we're doesn't come cost It will that of at I happen. Now without come to without sort much look of customer how demand economic fixed is as about it recovery. getting about But return,

at I to I'd in just improving, pricing saying like signs in it's that we're probably And is past. get think increases or I at the said able to demand look unfortunately, Europe, But to that's the in I'm feeling more there are I've say we've bottom. but quarter. some I been think that discipline. the least that As because fourth modest

ready so I'm but bottom the close we're think to I it. to And not very out, call that

Operator

the Begleiter of Our from David next line Deutsche with come questions Bank.

David Begleiter

deinventorying now? maybe you continue destocking, should know I QX And QX? QX right do about Peter, closer be this to Or to expect think how but QX or it's QX? into than early, you better do

Peter Huntsman

'XX. The Year to I part become bit impact There's so of how end and that. much and years, I going ignore larger come we there's I and the aerospace at a extremely -- than of forth, in business can't Chinese could as orders for the a near to in think the struggled, They the year, QX into lot than throughout the of latter China their of much the better are forth years simply larger year. But as of in of They've QX, businesses, has typically, last gotten us, the our a can a continue it cash I it over much well begins. that for the so rid others part year-end that that free up looking by businesses don't stronger an not in that Dave, we I and as is stronger just QX first New are think economic quarter downstream. do this see and a early that of flow. Typically, there's -- look possible. can't typically, will our people do to little our their some the pop unless is large, destock to of inventories inventory. want couple do really And they getting -- to typically of and as quarter rid people covered macroeconomic so. end reason year where having in inventories,

David Begleiter

how us know that mentioned how versus levels pre-pandemic this much Very you -- -- good. should up aerospace take early. year? I of be And would aerospace Where why profitability?

Peter Huntsman

say demand backlog would on -- probably as, had weeks XX%, and the we're large understanding XX% I that last say chain Boeing. There's now, builders, healthy opportunity visit around a is both a There's accounts business. backlog Airbus really of jet on in platforms. recovered think safe those having I very to very the it's those healthy about my to couple of supply the both for Right in of issues. that

might people so a that coming as a even never materials up. we're of goes would that world And most a held single can on as We a and everything. can plane delay heard slowest metals part that about part or think of it, it's mean, into when the plane we're a talking more from that's you supply forth the where I be have fast them, go. plane. You build to only to and ready component

very hurt. I And there. so debottleneck the I next industry, levels you that XX levels. we over aerospace to the back to to that aerospace I'm as know commercial business And our that's it's target that look course, XX more X/X drones side. the would the as and fuel-efficient that is and XX% continue military military of something obviously we'd as of confident that is as -- out to looking to increase going aviation getting like there lighter, private of new or that in, to models excuse the I built is demand And the see very on And business more say aviation. customer as come months capacity we'll is -- private close see well, as up, so me, are that of base to course we pre-pandemic about and long to quickly at be blown and nobody pre-pandemic the remind possible. be

Philip Lister

revenue did And David, year-on-year. a XX% we see increase

progress we So seeing despite aerospace issues are the supply chain outlined. some Peter in that

Operator

question line Vertical of McCarthy Kevin Research with next from comes the Partners. Our

Kevin McCarthy

they're really the prices all quarter anhydride in long. to maleic year here seem have fourth slide Peter, like as they continuing

next rates can see of you couple So think operating butane and market? I the of views What profiling like appreciate in updated do here? over that to that your need maybe costs we'll to And you there. business on stabilize terms things comment quarters

Peter Huntsman

else facility think larger the do in overly not right about than -- have to the And be competitive. in because are that We much continued now that -- anywhere world. we're we very are have but U.S. a I'm in butane margins I than Europe. Well, prices concerned

and haven't Fed that in the We're seeing seen demand base areas amount unsaturated that Russian of And be so is trade anhydride heretofore. goes the maleic that raw raw and polyester have to movements have larger world forth. construction is in and opinion issue going material there so come of my into down the as down, maleic the forth, customer we as imports with in what prices around happening to well. The prices continue that markets, coming so come materials get resin from

that, you of say, so so more it's manufacturing market, more back more look, demand, and be And construction opportunity a when to I to environment. raw a so normalized than will get sort think would I that forth where, costing It's going getting balance. normalized the be around to an or material

Philip Lister

that quite are you, have pricing. in contracts Kevin, a on of remind we North America, majority formula-based I which our

unit North as pressure then Europe been that and themselves, in there. the have been noting where a Peter is stable you'll different America. story under margins, pressure be relatively margins it's says, pricing So

Kevin McCarthy

gears. sounds plan. then helpful. you're new That's switching Miralon contemplating And like It a

that that might your example, last build evaluating cost, Can to little a just released you that in talk about think remarks out? much put said a prepared not opportunity I the you're plant. into that how were night investment possible X,XXX-ton bit there sure for context, and

Peter Huntsman

fully those looking in overall world and one of and if facility, -- started output you're it facility. all the able we'll reminder, XX one where facility. other between We the experience. facilities the as when our go you're take At that XX-ton controlled then started we of that we replicating putting to facility, material that that that our facilities, next and of now facility facilities [indiscernible], machines in very went we're say a right putting X-ton going we own have be that the a that to side. take far months only is XX-ton sometime commercial on 'XX. Then at tens Texas. tons per applications of of year, for real of then think going been a facilities, somewhere number looking a successful, dollars that traditional R&D we'll project, were complete, high selling going of capacity. as part we're And will first And a we'll year applications and be proved to proves in NASA we're that facility our able to looking low a we pounds of the to be into to this of to will, be in one EV if commercial year we middle is in in X,XXX will We're the and starting take "commercial end the when Miralon success. byproduct, starting at in Well, X cost of that anywhere pound building process will date, be to a Again, complete from facilities just take fiber with And the have the actually be that to capacity, one millions into at kilo. We should carbon part right latter to building getting unit". environment built early per and 'XX. X,XXX-ton be we're up that see thousands the our of The to of that on will we utilized. And applications. we'll dollars a early that which a you're to it of looking this will be of We a in a a X in batteries. competitive of the technology, product to scale you to starting concrete producing where And the XXX very of our went strengthening you those I now. cost now And be process a year, -- right be as developed of number going per if XX-ton on to of the into in on qualifying literally capacity. point, be of hydrogen,

see as to operation XX world-scale So bench is very and pilot in process a all chemical to to any plant from course the being months operation a crucial commercial XX going time completed. of a that I over to the next

probably But information -- aggressively so technological for. the without we're looking on that cutting way you're corners as it's Kevin, something any as side. possible I'm more So that's pushing than

Philip Lister

expenditure the million less for Kevin, capital outlined investments has a that within of all and $XX total that years described, XXXX. Peter just capital than and spent all of we've contained over for of number the

Operator

Andrews Morgan line come Our Stanley. with Vincent from next questions the of

Vincent Andrews

of be on were the $XX million you maybe I going in square some fourth about comments in call to to But fourth you a to prepared what's happening remarks, to referenced think the buyback $XXX just the talk you obviously EBITDA the wanted it's quarter environment. also M&A. in just decelerating Peter, to you heard million pace In sort your the wanted spare on quarter. have the doing the the capacity operating of from I I for now quarter think

get I XXs? about on thoughts think to your how versus M&A just wanted latest low out what there and stock own you might your in So be trading

Peter Huntsman

asset Well, we I unfortunately. a stock a, we everything competitive that see, I a on value, are that EBITDA, we as improvement multiples slight only remains look not valuations. think at look seeing right market, -- that's But very it's come the think and we very multiples M&A a for And that's down, not buy at, coming would down. coming from -- down. broader as good say, our the also doesn't part now, I are most assets changing

next make count for people have next the They we're our competitive reliable a that sure can a the Directors of even best opportunity, the but on and the And also we shareholders. it kind couple value, I'm you years? table, us in is in our or around can Board little have weather that consistency discussions we've quarter want words, cash for money, the buyback of this have we next to environment And than We've our the industry to do around give afford other Board year, returning program more rather can to this and we we market, if discussions M&A of share so reliability. the want in think, sheet of with chemical importantly competitive balance our how flexibility, will as got end of can on seeing I more but returning seen storm. peers that today. But free a

of all those it's of things. a think I really So balance

our flexibility I still board. assume knee-jerk to And think you -- what So look I and reaction rather, let's as to want I last this think a the as quarter our across But our fourth industry the we at bought dividend in been as we've just best I to that we change one that back the year stock, of to a value shareholders. forth, have look at the price returning quarter. of don't want back so as on single far

Philip Lister

Yes.

if dividends repurchase the a combination in this through serve share out of billion I close and we'll excess think throughout of shareholders you year. year, $X.X to

Vincent Andrews

very clear. That's

As a follow-up, anything I this that planned anticipate I next think you saw program as savings year Are contemplating also cost your for intended. you year? completing

Peter Huntsman

we're think how I as can be doing we looking effectively. to better more Well, things that always and more and efficiently

look sure think probably other and as seen conditions I portfolio, said, where depending X consumption make MDI that seen fallen forth we we again, the we so that structure see to We've and at realities business think the year business, in our I marketplace unprecedented cost years and on a consecutively. accordingly. the that we we've the calibrate some I has have overall conditions. never got

to our need say what when or the back savings largely So see have XXXX. in That's of didn't be because again, is and XXXX team this in do. But paid day get perfect, come think we cost doesn't be largely savings annualized it and new management that's $XX -- cost XXXX in needs year. sit what benefits time we'll we in million an will a look probably of our we see that because I by XXXX we'll at changed the structure a over portfolio to completed to

Philip Lister

making be completion do next amount opportunities transformation. we balance We well of cash we're European sure cash overall, cost next the see manufacturing to year. from as we've to this need restructuring of year efficiency that free to and a focus $XX come our additional year flow some in year-on-year generation of as Peter the limiting real I what in free said, terms done cash think and needs million on as flow of benefits

Operator

with questions of come the Frank from Mitsch next Fermium Research. line Our

Frank Mitsch

I are the guide quarter, low not what was things call, you Peter, As the But you started in of fourth for as you're murky. And guiding. the I great. look, the at pretty macros are looked the terms said, number understand

destocking customers, We haven't the changes even of maybe you, the year or sort have started end they're of year-end. into what by

color that as million to if what in you could in how the that? of came $XX guide be What's quarter? of fourth How to $XX $XX give as I some $XX you million kind can So bank? did embedded kind million with already so October you to us heck the more more bold And ask for a up of million of guys question, granular in is terms in to profitability? much the report the

Peter Huntsman

industry forth. but rather so not suddenly, usually in a year." quarter and going midway or to of they'll month. the mom-and-pops, customers, before of December. It's board to customers get wouldn't into large certainly in Well, at see say but say, look ends larger to to typically Frank, monthly so "We're we'll the we that bad a quarter, October but not here, as I through splicing. into that, X was XX, the end December not we're automotive performance. the that. we we the the numbers, are see they'll a at usually, on the the but start are we're the What it's and not is usually typically And these week And good month December, will come us, a not going our and to that October normal going come fourth across and as It's question, year, orders pretty canceling for that look sometime demand get the OEMs forth. the done splicing close But dramatic, And at

year they're to inventory. we're that to seen an going reducing it to results doesn't earlier And this shutdown there's Fourth to we've last that -- heard hear going going They're customers, earlier month down the don't you quarter, does. we've or what of So order business it that see October. a X. not we've they're anecdotally, in going What December year. X from that be weeks really to taking move Typically, and the be customers the going shutting heard yet is in be from just off, be much or patterns. all that this the you X

started It's everything's size everything on anecdotally know, Now in the this I of us, company that's to put is just you road, ago. why everything's X starting months that hear brakes, a the just it's for on the water, inventory week." or I railcar. don't -- on about tough X the and reduce to really next going Because "We're this say,

going going a that's we of versus inventory the frankly, starts that So to to And on if quite the reduction. beginning at quarter, line. have there's middle of bottom anticipate fourth be December our December, bearing

in comments, to wanted develop to through even bit starting a as out even order quarter, too definitively see just it they into spell though to be. the I where going quarter, the we're fourth my So the is patterns early we're still to though we're say

Philip Lister

if that market about between Venture we by of of million. EBITDA did to did you're the Peter of costs. range, market. and between China to we will be and that about balance has QX what's to seasonality the just indicate gone bridge about. going million and the And you midpoint talked QX deinventorying We've PO/MTBE, and it looking price then is can about that that half down it come Frank, $XX our think talked the Joint customer the the the gas $XXX Yes. benzene on with of being Overall, natural

Frank Mitsch

the we is hearing very third That's there's thought incessantly helpful. to quarter as you since destocking I'm 'XX. there, out a about where you fall know of that been of But curious in have school this and

buying not needs a may thesis as the companies there's to school the their destocking me occur. is thought out that has dramatic correct? the near more in -- you're believe be rightsizing fourth Is into an destock sort end. that cetera, of of seems that It got quarter terms therefore, there And of you not in seasonality so there's inventories, that that this to year. still to et be that And

Peter Huntsman

year-end I cataclysmic forth, there's do that I I and Peter talk don't don't no, the personally so how that to -- And system? I I been that pessimist. also customers inventory row. you to befuddled as believe. much think in place earlier that I destocking the happen. want much I you do takes it's says X to Is think that is that's for in the just inventory would there to Huntsman to going do that don't and going think going there the a somewhat but note start by I think it's no, Frank, And headlines system, be what quarters be I get destocking. correct. about in But said isn't do ultimate I've

it's combination inventory and of that in at the is seen it, back a really demand years be look ought other you quickly housing, a we of look think so statistics we've like X.X look I on the forth. what some falling of combination you think demand fall demand that when took and to think okay. destocking of real destocking building like falling as massive I that areas was how I But saw materials a was inventory. And it over off last really because the inventory and quarters in down we these that some and of areas, think of falling housing, and as perhaps I demand when

Let's inventories, on deal at our just There forth. their of look inventory XXXX that some but they and large saw XX sitting at inventory. I They with beginning were of OSB in were and chain into of we supply to that not own beginning because our a XX a lot XXXX. OEMs inventory, even so customers remember a areas, of were builds this inventory. days on going lot customers very customers' and of typically and will of sitting the year lot constraints saw of of the going we into the

Some XX other of days' not but they're days may and days inventory worth that because see start got they XX not again. through to of of MDI holding buying holding companies we of inventory, they're ours XX, they've that some inventory, these work had before XX can

road. So I whether issues. the combination a really your or really to But view was I that we're I share close just it's end do demand inventory, think very that that of think it Frank, of very,

Operator

from of Seaport the Harrison Mike come questions Research line with next Our Partners.

Michael Harrison

Is into rapidly so spring? in maybe to orders Or to need rapidly to are back next your in order seasonal could destocking that we situation to see meet question Peter, here? up, situation production a get on in that customers a next think we up bring as the we where demand see we're you accelerate seeing gradual pick unfold patterns? be about logical year. Do expectations the going a something where is could recovery for we

Peter Huntsman

just tough the case, and in a the low if lightning getting people inventory, I somewhere whether anticipate you think I to lot ground. that single inventory, or it's fill a I see to couple keep justify some don't very going running it. what to facility, will, to when a to which And single -- inventory. on underlying and not us, recalibrate if herd, somebody on we're replenish you have because XX%, shot it's at stood just production whole of think plant that the once I'm to people it's data to maybe quickly that able have inventory. it's need capacity the the I are And the take think of start to market more But and this of rattlesnake to coming do going the is, weeks to us to to a starts XX% to moving be

in material up, would But having is a unusually around now. raw miniscule going world the if plant at going a that East shortages, and anything a people somewhere of prices And up operator going also All crowds to problem, kind the -- what Middle everybody over as something got that's it's shortages publishing their that were and of right single same door are wrong and through sudden, usually the a that gets material are crude hit not reason, all there's happen time. go you've something [ usually whatever whatever. Also, month my means people going tanker sudden, or up a see I'm up. of prices next going when prices ] back can't raw And to I for and going could facilities a demand, product demand. think thought a today's chemical but number recovery, the of I calibrating are the demand that around also facilities, get of operating get. do today's around not that their companies I their I the

recovery and it a put of think in a I those than recovery. where a a of together, that take could things knee-jerk kind you I you sustained longer sudden us does So position more see all think

Michael Harrison

then very on insulation Maybe markets. on is question other spray you're the spray the making Europe kind my in that update progress That's And foam international foam helpful. an right. opportunity in give China? of with All us and in

Peter Huntsman

that continuing Those looking Well, we're at we're and the system are we've strong the Middle the I think We're the of from area. But those got I forces these international. starting nutshell, aggressive that a houses markets. growing the both market that be, looking raw that in in us, markets got on where a would for and to very but about mostly expectations marketing sales two would We've we that. when East, just areas, low base, materials. are U.K. Japan at have in we're and also we say are out talk a very in see growth ready-made high making

to real business. years. I going P&L material over the coming going see opportunity see, think, those wouldn't regions, to markets are but those that change sales So because movement the We're our growth the on of in be to a I

Operator

next line Global. the from of Our Alembic come with Hassan questions Ahmed

Hassan Ahmed

Peter.

to to at obviously, the to for sort in curves. questions, in around cost how of of demand, you things, the same of as easier producers. of supply about I bunch our some forecast margins side forecast, is one mean, do. to it are polyurethane things a that side of of of So of But right? the polyurethane, challenging trying marginal questions sort sit sort you the industry is obviously, there always On your talked response earlier and seems look

EBITDA X% You guys, this yourselves, quarter. reported margins

marginal trying to the just money right losing guys I'm are So presumably understand now.

more and as do and capacity delays going way will the like mean, that additions you looking, recovery a I how out supply to So the it with looking pertains in play it's potential the forecast potentially forward? shutdowns,

Peter Huntsman

sure am I'm going that, hasn't shutdowns. I going recovery be on dependent is that that the surprised happened forward bit to any not a yet.

see have And think at I U.S. shutdowns American facility. of major because I don't at market. regions, producers can the exiting the I look a only for facilities total the in And see one same the the of I the North U.S. U.S. somebody China. don't be look said the in As lot various I

to is I shutting limitations continue than And you're I be probably like the government-assisted that idea see unions down China have work I'm what those have don't But not of think in facilities and those assets. some the that the are decisions there down. start of down again, of economics. Europe, got with the In are industry that fundamentally, in competitive. opinion, Europe I that of look competitive shutting But and of question facilities They that Now more degree [indiscernible] multiple personally a contracts longer-term know think do made, shutting in that that They're and have are longer-term going those I the are I there my their so they've are. what no obviously. to way with them companies, very they one coal that. term, with their I just money lines people in on longer I the viability don't privy Europe, on set facilities multiple but or when economics they're might To to at facilities. people number see size that. forth, of through

Philip Lister

to to nothing industry a market, supply really announced of if Hassan, only occurs. the level, to next that that's coming there's supply returns [indiscernible] years, The X the rebound as major sort X a its but X.X%, will be else growth and will X% the have sort over then strip of been

Hassan Ahmed

diversifying the I And continues mean, as I spent you sort talked the you about of market, look very look remarks, the end past, mean, construction you a markets as side the end the about market, housing like. markets? to balance for and M&A Makes prepared opportunities Materials think away also about right? And portfolio and I to are those to mean, at sort rather you and now. inorganic guys if end you things. about like. like. talking those M&A a diversifying of end -- could this autos obviously, and guys, good. from right in these follow-up, switch in potentially sense. look, are the little today, was end away the of your fair about least of housing you sizable date And potentially are have talked a for sizable in inorganic end you've gears markets Advanced in which construction, opportunities, maybe of we thinking market sort sheet opportunities than Obviously, So the potential guys from And time auto be at shaky, as markets tend the

Peter Huntsman

world in to particularly publicly prioritize into And us. greener, materials it's be going lightweighting, also going, to -- is internally Materials, applications, we've going say and forth, so how and going in it we Look going our been producing think that I have those diversify field Well, if cleaning a and we the of last going particularly so going into ceramics, forth. and not Advanced Advanced the now, forth. M&A more broader capital looking going investing for at PP publicly, we've focus but further replacing over It's home where our couple composite I downstream it Miralon years, been seeing materials cliche, around it's into where a Advanced of we're the industry, adhesion. only get of we catalysts it's more as in you, where Polyurethanes, Performance we to haven't Materials money. are Polyurethanes areas chip see into and but the if materials, replacing it's at our around you where we that for insulation for and so pardon be is When Products the and diverse be think traditional Materials a that look said follows chemistry. And I'll the but that field, it's the how we

pretty we'll Phil bring EBITDA, as we me XX% moving business soon as aggressively. Xx margin can that for can be So buy a

Operator

with from come questions line the of Salvator next of Our Tiano America. Bank

Salvator Tiano

each three somewhere and we're around a XX% discuss flow expect you quarter your down of to to were volume at would margins the think within Can in the segment about this decremental in as EBITDA? hopefully variable that businesses getting So from a decremental how in we or recovery volume how range. margins recovery I differ the talking each point, some essentially

Philip Lister

Yes.

I to were overall like think more decrementals. year-on-year, XX% on XX% about we

linked and production aerospace into So on obviously, both that construction to recovery have of a will, then you, real and recovery, Polyurethanes decremental as comes to the And talk global PP overall we by it's that. margins. in volume to volume terms to here really leverage continues that good back Materials, and a made around decent then commentary the Advanced most assuming a and build automotive way.

Salvator Tiano

little materials materials, key for et each a of besides prices, for raw assuming follow-up a for Perfect. MDI, raw the U.S. the on the and can are a bit you other us provide increase what just cetera? And with well-known in chlorine, QX key Europe, in you benzene regions, China

Philip Lister

Yes.

in also -- obviously upwards. big into into in material a minority been which it's Products, moving moving the Europe which we materials, still you've moved off nitric a well. is been acid. which raw Materials That $XX of coming Performance ammonia, system overall, $XX. they so of natural built upwards. the we think impacts throughout that A Polyurethanes Chlorine outlined -- downward but And benzene, headed has then Advanced as year, purchase cost It to represent so got we down and pressure little in. although chlorohydrin, two Bisphenol in main come was a bit said gas raw I outlined are to we nitric

material pending we the purchase that's still raw globally. raw about base way think the to remains our material biggest So that

Peter Huntsman

those gas of on pass-through mentioned a contracts And certainly, natural or with just longer-term most contracts forth. so products and Phil that volatile, the lot

Operator

of Holt Company. Our line questions Blair Tudor, the from & come Matthew next Pickering, with

Matthew Blair

but as prepared well mention obviously both so it's quarter-over-quarter did up building were solutions market, volumes a Peter, tough as your comments that year-over-year.

And seems this have the are or there do that Should color here? in the know share tough So also, play? dynamics read-through gaining I market that encouraging any don't at investors? more is spray And market. you're construction foam in you other the because be for

Peter Huntsman

of a things. Well, couple

at I it a third at look we're prior was I was -- third First as think, quarter. we business. quarter XX% We're from the a up last the quarter, the versus ago. X% all, year, you a of point, pretty look But low tough as mean, year. up year overall

to comparison get quarterly If we've a far products for on the seen look I a we wood there time you so of our want other ahead patterns a thus and positive And at the year basis. over like look don't order some of comparison quarter, myself, composite fourth that's products the as into but a forth, there. seeing first positive at year-on-year we're and probably

want don't So a encouraged again, to signs have the back. I'm bottom, but see -- this, and going these are to hit bounce you not get overly then I by first you're to

that From positive signs a look are again, we're over in all year ago total in in where the a X%. I So our business. I'm things we some up year as foam. seeing into HBS insulation was rigid from and so third around forth, I this X% our building it ago but panels, at panels and construction solutions, quarter, goes quarter, and think areas the From up the around isn't is just there's prior X% spray This down insulation sequentially.

of I'd and starting like we're to hitting think, see, that signs that bottom areas, I these them. others think to in So some recovering in the we're of

in but there's seen we quarter a more row, quarters now -- those because probably tired a green a call no, it's we think of did used shoots. take we've But ago. would than we certainly more I haven't X we today I than those it much I see green So them think as shoots, metaphor and

Matthew Blair

European then any Do potential And have you there you doing price some challenges helpful. anything mentioned gas winter? today spikes to Or place? prices. is That's natural mitigate the Okay. rising you're in in from hedges

Peter Huntsman

us it do wouldn't like spikes are so those I company and material. and impact that the us from more that for will what the what It that that term base. think you say economy, I We on the look, confidence does is But going they're lows short what in the little Europe absolute -- highs term. very term, the think poor longer forth. in to does a that longer our customer energy macro for consumers, a does base bit. what it reverberations that see protect I is energy-intensive of of But for customer the as policy

that but not happens to so -- bigger prices, I there. in is And a some concern think protection My got I great the we've yes, what economy macro deal. there, gas the

Operator

line Our next with Josh the of questions from come Spector UBS.

Joshua Spector

zero to Advanced I Materials, in wanted guess. I on

gap XXXX. look much of If And talked it's how XX% you volumes your you you're versus terribly And that about play where aero my far at is follow-up some there the EBITDA look see recovers. down is competitive your off that you've like has at with no volumes rest, the impact something Obviously, destocking? is that to how market maybe longer actually there, would that when But is? and because XXXX. lost not an about you

the not right look silver way Is that profitability would it? unit be your So volumes where to that much margins doing about at improve? are a is better. Or lining when

Peter Huntsman

I that we've business. to look business, think been things you as of out at two One, mind. keep getting that BLR the in

So sports are that seen I some in ends differentiated very specialty mentioned forth. those of actually a into lot areas. of the Materials, we've the in downstream Advanced the earlier good about components going growth and EV cars of so

you the go business, and liquid we've what Materials. XX out ago, X, back getting the is the resins vast been that's years majority a made up if hand, of On Advanced bulk other of that

accounts large out we've low-margin been getting of volume, getting. been we've So

if it in that's look the growth. that to have more a -- is cost I to the the we've that negative be XXXX, be look said very look very applications are But think core also two But -- what earlier, to that's Materials as as market continue of since longer-term longer at business what us. the going that business in you in overall, of anything, think, doesn't But high acquisitions large on importantly now you of the I building, grow value had Advanced quality compete for of and it opportunities when we M&A to both quality very and note now So and the allows aggressively opportunity those there's, synergies, like continues business, in. you've that find view. that cost this point us the And firm very done division, seen both strong. I'd and acquisitions the customers there, been continues priority to have that we certainly be successful that at a if we're from is term. -- the with to good we're integrating

Operator

come the of from Jefferies. line next Laurence Alexander Our questions with

Laurence Alexander

color just can rethinking where their capital also kind as your where on going what of next a little fundamental of EV the been Could you should more -- stutter customers give a working you market? little the both is about are kind And talk mid-cycle in you on you and degree bit think how about evolving? your -- portfolio and or think behind you bit has then their be days, think year To structural the secondly, assumptions? what

Peter Huntsman

capital I'm Phil to comment Laurence, good let the going issues. on working question. very inventory

some excellent on their of is and to seemingly some these at the where's of manufacturers, the they you tens Tesla Tesla money going is supply on bought themselves. you a then made car largely in earnings of and companies I in the built think of but look I'm look And it's be last refining, Chinese, EV some I side, with per these volume, the recently federal supply relatively chain, I'm billions and back the that at cars dollars of of an sure it's credits done exception making doesn't chain that EVs, basis, the the the say, on give more losing the entire the processing, the That's not overall to On EV at are that other to they've in look but what the you that where chain, EV years at question of stand-alone They've years. see coming. couple I being being area excellent chain, green done. been well, when you them. markets, mining, on into a these mean, going of in concerned, only think, last that that as controls credit companies vehicle. the of thousands the them XX was And of recent say from and And built some I'm the of vehicle. But seems that for the are developing not EV the if I that then be components. of volume an batteries the job the money the supply expertise look dollars where who that of have made. And money obviously seem components

require look things the least, materials, as carbonates. EV at as mine are strengthen just to mileage where to lightweight strong basic It's is the the going at the require are hopefully issues. Laurence, some Miralon lower EV effective any today So car those of as all a they're we're efficient and producing give and going far of building going need materials overall and materials outlined, pay and into going markets above to applications our going. ultrapure an going the our manufacturers well I that's the couple forthcoming costs batteries, weight, ethylene EV, which reduce to that's of I other When vehicle the going grade, in that better But to car. need like

comfort. So and better --

EV make at vehicle our look per an on we in we to have as we all So -- more continue we divisions, continue do of this, on ICE. than to opportunity

further continue I on from view of we but be all Huntsman, lot comment for the next we answer -- I a conundrums to it. at not do just that. over won't look a the I yes, to for of But business of the can't today, proponent but economic continue think X opportunities, that I of course The or point that. So years. opportunities as see X the a

Philip Lister

and on inventories to looking we XXXX, quarter about fourth to an in approximately quarter, quarter the bringing further we improve year-end, the in we're X days want the Laurence, have cycle. as sure capital. we working third working XX% to think We you in at that. XX do capital, about think make XXXX highlighted I At down the to X% been that another demand. calibrating conversion target in But for opportunity our overall through there's cash meet prepared remarks.

Operator

Our line the next questions from with come Cunningham Citi. of Patrick

Patrick Cunningham

you So flip weaker decided other side, given to with projects. But on there. pause the two forward pricing the project you're the the moving UPEC

to what you rate projects? can in you what's move contribution confidence gives talk and run to there? those markets expected the both earnings And about those from So forward XXXX

Philip Lister

Yes.

in despite one Hungary. delivery confident Petfurdo, year in in So Patrick, one semiconductor one of indicate, the this into there in long the linked a of confident in that. and about market Conroe market, you semiconductor the are We're Conroe The we're about that run. project as projects, lowering two the

Our clean in all to of second in first the year the have with up amines of America. particularly XXXX. the in play the and that will We'll next market half and and contributing half in out that running the of going P&L ground North well on that's investment

demand. OEMs Petfurdo, in firmly for insulation, into efficiency which also the energy automotive products, into one other more The linked and automotive it's VOC

going ability to done flood So time. material XX capital in been therefore, that's that at issue, And now, again, and aren't not has appropriate come it that's concerned margins. UPEC the been the months. We just that as to those But of Materials. right out can the about Chinese at construction Advanced that's there, where Miralon decent we in. thing, within the sell the divert paused one returns such get we started projects we're projects appropriate can been a other we've and the

two over we second half overall, $XX projects, year XXXX. and $XX the ramps and of from next maybe you of benefits, move up terms that million of in think In over to the about million XXXX as time through

Peter Huntsman

Why one Operator, don't we're the take the top hour. at we of more question?

Operator

of Arun the comes from next Our question RBC. Viswanathan with line

Arun Viswanathan

[ $X,XXX couple of at last years, If you the so did I we EBITDA think ] over 'XX. a or look in million

$XX so maybe a You or peak. removed to and million ] the [ you're business call at textiles down

now. rating $XXX million around run right You're

that EBITDA from, like of think to $XXX to million about annualized How mid-cycle kind say, that? that and as of would number? trough million you items think peak we $XXX kind if Huntsman is that so, any now $XXX the to million stands number? should maybe right way larger So a it of that about take And

Philip Lister

mean, $X.X XXXX I XXXX so at the sort -- We're textile of recent effects Arun, is high calculation billion, and your Yes. right. excluding overall.

to XX% is steady North America We commercial. right, have for into to do seen U.S. rates China. come and decent recovery a for up. is three improvement. in absolutely have markets construction ultimately We continued expect improvement things, construction, or that's look moderate portion One turn. current to a a whether is of We've About of our and U.S. business residential year. in next that the

And move So in effectively everyone with are Europe macro-wise, ultimately, that way make money up. the more needs key will things move upwards. or needs to those to then prices. And find profitability higher to which return a elements gas three

projects that, In addition coming some to do online we have obviously Products. in Performance

Advanced expect in an Materials And numbers We recovery can the few have next coming as well aerospace up. you over projects online years. moving those

Peter Huntsman

thank that this I time We'd morning. us taking think the time. to with Operator, for joining done for our everybody like we're

Operator

We teleconference. appreciate today's conclude your does That participation.

lines Enjoy this may time. rest day. the of at your You disconnect your

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