LYB - Earnings call 4 2023 | LyondellBasell Industries N.V.

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Operator

Hello, and welcome to the LyondellBasell Teleconference. At the request of LyondellBasell, this conference is being recorded for instant replay purposes. [Operator Instructions] I would now like to turn the call over to Mr. David Kinney, Head of Investor Relations. Sir, you may begin.

David Kinney

operator. you, Thank

be investors. the financial that begin are and is to would to statements forward-looking upon we like on making based results Before to are We reference slide discussion, alternative believe presentation the useful out some will Today, www.lyondellbasell.com/investorrelations. a website and and assumptions, our accompanies point measures business our while non-GAAP we statements at I discussing measures. today's reasonable available forward-looking call the

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reconciliations available other results our today to this together measures, States Additional calling by at will documents Eastern XXXX beginning outside Time XXXXXXan and earnings be call XXX-XXXX in financial p.m. States. GAAP until X of by X website United with measures financial of including recording March A telephone (XXX) and Investor our non-GAAP the discussion. the release the United business disclosures, on provide

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EVP EVP Polymer be and Advanced McMurray; and President and will Olefins of call Lyondell of Chief Michael Vice our Rhenman, Solutions. and Ken Kim Torkel Derivatives today's Joining Executive CFO, Vanacker, Intermediates Foley, our Refining; Polyolefins, Officer; our of sale's Executive Peter Lane, our Global

an focus and we XXXX call, update today's full year on results, quarter strategic NYB's progress. on including will During fourth

call our and that also to the said, turn now outlook. dynamics With will discuss current to being over Peter. I market would near-term like We

Peter Z. Vanacker

our we us fourth year XXXX you all Thank results. you. We quarter to as you, Dave, full of today appreciate discuss joining and welcome and

as safety Let's do, with Slide X. begin, our always we results on

and LYB's demonstrated commitment lower employees X is were where our significant improvement injury our of performance. approximately their from to XXXX, rate outstanding XX% safety average want lower to segment I the congratulate recordable prior During the than contractors injuries than XXXX, APS years. was X.XX, levels. XX% which historical total a

-- and We always to But the excellence there view work families in safety than indicator begin no their return their to has day every operational business team, greater is as they leading member of of every performance when a working seeing our day. value home health same performance.

turn now discuss our Let's to for petrochemicals. Slide was X financial year challenging to XXXX results. another

of activity. inflation, an about energy moderated economic While and more due extremely pronounced cautious a geopolitical downturn in prices in to the markets were environment for potential uncertainty unrest,

growth and U.S. Against the but industry. of XXXX, in LYB growth of resulted improved cash from GDP petrochemicals Reported relative backdrop, $X.XX that $X.X exceptional and of was norms share generation EBITDA in China with in far per below operations. was an billion Cash billion. $X.X earnings to our for delivered

ended We XX%. capital year XX% return an strong of sheet, with supported a capital. exceeded of ratio liquidity, the we by conversion of cash balance on cost $X.X efficient highly and a our with have invested We billion investment-grade

launched of at our Markets year, York. in March Day Capital last New successfully In we new strategy our

briefly and X Slide to turn review strategy. let's the Now

moving and alignment the years like company next and Our goal over would X provides direction of was XXXX. to about create be would in a what clear vision the their look LyondellBasell focus, clarity

culture. growing around X built upgrading profitable up and and a the is core, and circular pillars: stepping building strategy and low-carbon business Our solutions performance

fit are we advantages and investing upgrading with in competitive that growing strategy. businesses our and In core, the long-term

society. for creation industry. business a recognize in low-carbon and these of to the stringent In the value pillar, demand comprehensive and third LYB continuing circularity more that culture transforming of customers massive embed leadership vital and the management in solutions addressing our is while are view to we our driving is circular products Our from cost

targeting our adding progress the few our a years normalized highlight $X work the successful EBITDA. months, $XXX year LyondellBasell billion of strategy our we the X, X/X major XXXX just XXXX nearly next EBITDA million approximately since our growing we over to and strategy PO/TBA on underway in towards In for unlocked goals. step the Slide upgrading normalized has that incremental last forward launching plant is core of The by start-up March, this On are in our XXXX. XX our of and

that And run to VEP year-end of of rate million I expectations. is annual $XXX And EBITDA than of improvements. our share progress In the recurring the initial exceeding VEP pleased far mid-cycle am the will more program a Michael more achieved report very moments. a details our enhancement few value on XXXX, in

billion underway $X build to EBITDA incremental billion As goals XXXX $X our shown XXXX. a slide, of streams we of work by strategic toward have on total of by and normalized the numerous

for advantaged business are oxide businesses. $XXX sale we polyolefins announced just net $XXX deal of the non to and the how The debt With of million olefins million example to away we is acquire businesses. cost growing core for core announced XX% from we and are INEOS one in of Saudi derivatives approximately Italian redirecting our in resources Arabia January

a strides plastic app investment solutions in in plastic capacity to Germany catalytic [ tranche waste using while supply recycling Germany, great decision are ] for building building low-carbon securing also to our Mortech And In next first our Houston source advanced proprietary strong took advanced we making we our our business. foundations recycling for our capacity. in of technology. in in to partnerships supply final and XXXX, investment We're waste circular

describe a program for And our is initiative. will and increased the VEP targets XXXX Michael not beyond. onetime

journey While in any our to Slide team creation goals. for strategic us, positive our XXXX, want look turnarounds. I market on work let's platform deliver the of the at value congratulate and achieved a On ahead steps lot a of we X, progress robust on ensuring take a we leverage have on to to substantial ahead longer-term our

upgrade our continue to leading advantaged core growing can markets our position. extend will in grow where We focusing LYB by feedstocks on market build businesses or and

Our will venture how do this. Saudi example Arabia new joint is we X of in

new of polypropylene Italy Australian our the the As continue of refining we positions, of businesses Derivatives the are our exit divestiture with we a to of our The of we strategy. sale focus the business in review are add aligned will that portfolio. how all polypropylene business, shutdown line the business and are not portfolio assets our sharpening EVO and for of long-term and examples business,

of contributes value and growth our low-cost also LYB program progress the productivity through enhancement rapid The improvements. to debottlenecks capacity

VEP solutions good We $XXX billion by XXXX. business. for we progress our the goal circular only the of VEP value-based delivering instilling and our productivity. The as our foundations also are of company. step and and to culture strategy growth making low-carbon supports our pillar mindset work and by million incremental is third EBITDA And towards not on by of across $X a the building up XXXX performance

of and transform work up NDEP. to business commercial also our Solutions initiatives excellence improve culture. embedded And numerous have step through important customer performance Advanced is our our Polymer part to an margins is and to work We

turn and fits steadfast investment-grade is with and call now of partnerships progress. we and the our a We're our by balance over where program And our it efficiency, generation, growing and our investment support achieve a very progress capital we're returns. of of of to leveraging for capital All our foundations sheet. financial the remain efficient value-focused shareholder as cash competitive will supported I commitment growth our pursuing disciplined in competitive Michael part secure, discuss to to dividend to details allocation

Michael McMurray

take X, look our to at everyone. value the progress Please program. you, let's Thank good a and and Peter, enhancement morning, turn Slide of

we When and rate As Peter initial $XXX the XXXX. value engagement recurring high year-end LIBs achieve improvement thought rapid team annual expectations of launched XXXX run of XXXX. than year-end a execution, million in exceeded by our run achieved more far we $XXX EBITDA rate enhancement could of a our million mid-cycle with we mentioned, program, program

system strong a for in program. place have VEP our management We

Our end we process. ideas of initiatives. the advanced than team have than XXXX, more stage XXX to executed has XX,XXX on these approximately the our ready more these and ideas of X,XXX By of of screened execution

and add billion of a will robust is and have auditors recurring disciplined million the total currently end effort XXXX. XXXX system Our $X internal validated of end annual our external of of up by our and to the by this $XXX processes. believe We EBITDA and

increase as significant have of that our of LYB we me the value details forward. progress million BEP announced contributions last goals X, meaningful delivered a enhancement on and from continue financial $XXX Slide will colleagues This during to enthusiastic buying the so our to driven share program strategic by that we do The XXXX. providing program let tangible On results the and more target March initial far. about our our so is we is move

good as more XXXX, net to and XXXX on than XXXX reflects VEP year to period rates the a and provides XXX targets mix time of are for Our This throughout program relative the margins. XXXX mid-cycle run initiatives, relative we generated of average volume, to Through million recurring from XXXX EBITDA using from year-end margins. approximation margins the program over volumes $XXX improvements that cost. based described a the product

initiatives a last from highlight the Now let me year. few of

loading We encourage recovery in markets in rates automated advantaged our we LAB for vessel reduced around providers is to for vessels annually. to a cost recurring Lake In net small double a a terminal we of our controls At to our to allowed venture, able and U.S. by to and exported with benefit were emissions water vapor production LYB that manual joint worked investment system treatment consumption reduce investment vapor operations our million cost that integrated year. per the one costs Charles water share with $X of a of business, their demerge unit world. $XXX,XXX oxyfuels polyethylene reduce

team, end resources for at and investing to with we hundreds initiative customers, during development our infrastructure our Slide have of learn turn the from the insight -- applications to profitability examples into This the initiatives for portfolio new we hope improved polymer about wire up mid-cycle serve provide outstanding to By XX run demanding our billion highlighting add and rate XXXX. We of product to needs small of $XXX,XXX these by me by $X that and EBITDA Please to subsea some business markets. seating cash expect per least begin XXXX. that recording to by recurring products annual LIBs generation you resources more allocated year. let cable of the

operating at billion the increased $X.X $X.X past end year. Cash of total the to LYB activities quarter. hand over the from generated of a of cash billion fourth on

XX%. cash During of achieved conversion XXXX, long-term we well above XX%, our of target

capital working million inventories. during the majority of a working by bolstered and of was receivables from reduction approximately benefit conversion quarter. cash The Our capital the was fourth $XXX lower

our expect during working quarter. capital We first increase needs the will

Our LyondellBasell company efficient billion year. more cash to the of XXXX, in allowed for $X.X shareholders this of $X.X billion flow return our to represents than cash XX% the free generation

continue of details allocation with the our past XX and the year. review capital Let's Slide over

mentioned, allocation we Peter committed robust we maintain and to sheet. disciplined our capital our as As investment-grade are balance execute strategy

annual in funded in the quarterly During successful X%, capital XXXX. $X.X $XXX an new our the we billion of XXXX, milestone $X.X start-up year, of our May, billion expenditures. we with and XXth dividend asset cash We dividend important increased our repurchases in program. from PO/TBA million investment consecutive invested share growth. in year operating reached This activities capital In fully by marking dividends,

hundreds of our This short-term our and includes value $X.X solutions We circular the investments capital a future integrated advance and cash initiatives the liquidity. enhancement investments within and portfolio million focused ended smaller year projects available expenditures will of of in for With the on and be hubs this $X.X of small with increasingly to projects program. billion project strategy. world-scale cash completion of profit-generating

green well on In our our sustainability, XXXX strategic bond long-term to forward with robust us to our during conditions. our One over balance $XXX the cash issued positions amid line sheet on leadership LYB's added in for we billion and move focus sheet year inaugural and strong challenging comment. of balance execution ahead. as $X a result We strategy last of market million.

minimum stated As a our $X.X result, Xx billion. we are carrying about of

have free economic built of allocation we challenging long to the remain have XX% remain priorities to and navigating. cash uncertain flow a bit unchanged, capital been that market shareholders and more said, We term. That we our because returning of committed our conditions outlook the over cash

fourth $XXX quarterly quarter. portfolio Now during delivered an of on would to million I of like business LYB's our each provide overview Page XX. results EBITDA the of the segments for

results olefins Lower reflect impacted significant of the and and crack crack spreads lower lower Oxyfuels quarter. our refining in [indiscernible] fuels Americas. intermediate Our segment polyolefins, demand a the gasoline and decline and spreads results. negatively seasonally during value gasoline in co-product the fourth

and Europe, Advanced low. where During benefited Lower olefins polyolefins the Polymer and negatively quarter, particularly material in higher our lower O&P Americas increased energy business. and exports Solutions soft, ethane polyethylene demand utilization our and Overall, demand cost impacted rates raw remained segment. remains costs

inventory fourth Across results the decreased LIFO pretax approximately noncash $XX charge valuation a portfolio, by million. quarter

As a necessarily valuations. reminder, limited reflects over the and year is the valuation impact in inventory changes not quarter to LIFO fourth full

Before detail, capital let me XXXX. in expenditure plans discuss our segment our we results for discuss

investment growth profit-generating will sustaining and to billion and reliably. our increase capital keep XXXX, expect We assets plan be safely billion year, $X.X compared $X.X CapEx $XXX our includes approximately to of that running for million approximately this our $XXX projects million a

increased solutions carbon included asset business and well investments investments our required the capital footprint existing Funding enhancement The includes plan. CapEx as low-carbon Europe. in profit-generating value our lower of to base, circular our particularly grow program in is drive as our to to

will information, XX% costs financial refining our we approximately from will and business exit this We call be In the XXXX maintenance Ken. turn impacts modeling appendix percentage be points associated tax to Ken? the including major over higher. of rate few with our effective than tax deck, plant useful additional metrics. a I'll other that, With the expect XXXX our slide from provided have rate cash

Kenneth Lane

you, Michael. Thank

XX discussions of segment. Polyolefins $XXX segment was million. the quarter Americas our on performance Slide with EBITDA the and begin Olefins Let's Fourth

export the significant domestically, pricing some co-product values led stable During impacted volume negatively overall lower quarter, in a margins. strong to prices our in a Polyolefin decrease were olefins very while portfolio.

export to of actively didn't typical approximately to inventory Strong see XX% increased nameplate EBITDA manage million. from market our drive working demand the Fourth capital. capacity to assets volumes, approximately LIFO of continues and included a slowdown. polyethylene We continued operated demand markets benefit at seasonal quarter we match valuation $XX and

expect to markets. strength we demand quarter, improvements ongoing domestic remain first in in the polyethylene with export During prices modest firm and

will the to some XX% renewable XXXX X and margin than lower O&P-Americas favorable quarter, agreements. expect to providing assets fourth power for Overall, anticipate remain We ethane In slightly December, an energy of our approximately during our region, tailwinds. quarter planned due assets operate in new first average purchase costs signed at we the maintenance. we

agreements, renewable XX% these by almost our XX% we've our of With procure goal to achieved sources at of least global from power XXXX.

place, renewable have In total, more than agreements gigawatts in X.X we capacity. XX power representing of

plastic the plastic better and Houston. final Center plastic Center first in the through will on waste. build sourcing decision mentioned announced As recycling circularity. sorting improve is This venture we with on a last investment increasing announced cyclyx increasing investment our joint and partnership December, Cyclyx Agilux focus quarter, to recycling The ExxonMobil. waste, to In options focused in of circularity Cyclyx Circularity infrastructure we waste

The than mechanical and for XXXX. tons start more plastic recycling in facility of year will expected advanced have the and up XXX,XXX to capacity feedstock per is to produce

XX Europe, Now segment. of and performance please turn to to review our Asia Polyolefins Slide International Olefins the and

During the demand quarter, confidence. markets lower with stable remained European and Polymer sales and were costs. softer mix improved modestly naphtha seasonal higher weak feedstock with prices an consumer

combined impact to approximately of operated EBITDA our of The during quarter. demand rates the and to Due a we weak $XX demand, assets of quarter at led XX% low million. low rates the loss the fourth

are XXXX, supply orders we to modest disrupted. begin red moving as uncertainty. demand the As persist restock some imports Nonetheless, as and we seek ongoing are seeing will move weak through sea local improvements expect into we in with European consumer customers

European the our XX% operate rate during to first at expect quarter. assets a of We

customers China Demand the manage in approach slow environment. the inventories New muted remains of economic with amid a as Lunar Year

on earlier, Peter As and progress businesses. our to mentioned we grow great are core upgrade strategy our making

advantage. assets X moving that that acquire Our on year's demonstrated Pet competitiveness also as of to Nat assets share focus deliver X to away Intel. we're from polypropylene assets in close ] have can't of recent our announcement a long-term our long-term the XX% by Brindisi last reflects [ decision But

also are low-carbon progress our with making building We circular business. and good

we During plant investment waste Germany recycling just to like catalytic Germany. to build the quarter, Germany. the commercial minority at we site plastic Houston, December, with a acquired sourcing made and in final plastic advanced partners decision of company we ] our Plastics, [ secure fourth first are Wesseling, a our in waste in feedstock collaborating In SourceOne share

provide the the of plastic process our new will waste Source asset. One Mortech feedstock majority to

our are value Through circular hub we integrated scale. model, chain at establishing an integrated

of utilizing in LYB's LYB's X PEP annual at Today, let's of venture. since and we Now joint take consists look years ago, have national our technology. a and The a XXXX great acquire our closer is leveraging USD assets polypropylene over weeks reach. an been with of a million new or Corporation a announced [indiscernible] petrochemical and feed spare PDH average we please turn generated XXXX. growing industrial proprietary to XXX,XXX joint XX, to unit cost-advantaged are propane Saudi agreement monomer XX% tons Arabia. have from Yanbu, Slide NATPET to few by The or company businesses the converts market XXXX propylene into from technology propane our that A of EBITDA XXX,XXX-ton capacity to Saudi NAP how share example dehydrogenation venture global of Allergan in XXX operational leading assets core advantaged

customers a products PP across serve of Pet's range diverse Nat global markets.

global LYB. [indiscernible] Saudi [indiscernible] to provides propane of our sell that will new advantage Also, network sourcing the of creating assets a marketing at prices. of for have local discount investment in to [indiscernible] quartile, a growth. behalf our feedstock on are product revenue first for the transaction, leverage part global of a the majority continued As a platform stream LYB

LYB provides production proprietary additional the potential PP solutions site XXXX, on Sperosone for a high-performance expansion. our would was markets. to a meaningful PDH polypropylene Previously, could enabled the The The new by and [ In are new [indiscernible] awarded polypropylene potential asset technology synergies. the that allocation that Sphere from feedstock applications into evaluating capacity. support Zone selected ] second Allogene expand technology Natpet's partners benefit

in expect unlevered [indiscernible] target exceed investment rates internal our our return. of for We XX% will

returns. Additional capacity could even higher provide

first will half close to conditions. approvals that, We the over customary the call turn expect in I Kim. regulatory following the transaction of XXXX, and With closing will other

Kimberly Foley

the Styrene pressured Thank were related as to tax an spreads a Intermediates feedstock significant to as $XX Please Netherlands. well as downtime turn industry of quarter. quarter an was Oxyfuel margins million. after higher you, of and the LIFO approximately the increased PO/SM in decrease venture million. million gasoline joint Ken. in at Slide supply EBITDA our take Fourth declined during to third In quarter, charges our XX to inventory costs. we we Derivatives benzene fourth were a look due recognized $XXX $XXX segment. margins impairment due oxyfuels

rate approximately fourth We due as to well as across low planned quarter operated XX% businesses. a our at the most demand during assets unplanned of and downtime

As downtime across event we quarter, plan quarter across our at fourth XX% operate These downtime impact and approximately after segment to Coast Off resulting I&D reflect assets. recent the the first U.S. of winter anticipate higher operating freeze the at unplanned similar the rates in in segment remained in margins begin quarter. the Oxyfuel the to levels. volumes We first the quarter fourth

In announced ethylene to for our $XXX million. business an derivative oxide December, agreement [indiscernible] to and we divest

the LIB our to where grow taking earlier, actions while position. path not we that with and businesses a mentioned strategy, are have upgrade does align Peter to As long-term a businesses leading and assets decisive exiting

closing and in the quarter We second regulatory approvals close expect will the following conditions. transaction other

price pretax Please and are note heavily these agreed transaction that assets the is depreciated. that

discuss Now margins results of gasoline of lower to let's including crack Refining of due Fourth segment. was turn million valuation compressed LIFO million, the Slide $XX $XX quarter to Refining the XX spreads. and inventory EBITDA charges

expect per due During capacity the the downtime offset by of unplanned cracks. gasoline improve, near planned XX% the day. In we term, barrels average operated of at crack spreads quarter, distillate an XXX,XXX we lower crude with refinery will to rate and

outage We the plan of estimated to a capacity EBITDA the with of operate coker impact XX% quarter, an including at approximately $XX refinery million. planned in first

end as remains over I we assets through quarter than With highly of and call will Our turn XXXX. the operations that, first refining safe the continue no focused of team our to to Torkel. on reliable run later the

Torkel Rhenman

Thank you, Kim.

Fourth were Life quarter Now the slowdown Solutions due benefits quarter volumes Margins results $XX to to let's demand million. $XX decreased segment raw in seasonally and material lower fourth a EBITDA XX. of Advanced declined valuations to with by our were Polymer outages. review higher pressured on inventory million. costs December due customer Slide

see our journey we expectations Success This Looking this continued Today's expect qualification. Polymer our of year, during underperformance business. ahead, APS and not recovery for we gaining reflected Solutions. prior improvement signs is quarter. based largely of qualifications financial lower demand XXXX in with new in market success with than project the modest is by our rate results project Advanced XXXX in quarters. low on first customers were and indicative APS of transformation

our laser momentum. customers on However, is our gaining focus

have our accountable project progress We surveys step-up as rebuild steady we of growth is that satisfaction focused with an customer funnel. we're and a recent making our in organization seen

already delivering. is pipeline growth Our

of the team to the achieving for year. prior quarter record performance fourth congratulate volumes X.X% the XXXX, in During over I by safety improved XXXX. APS want

refilling satisfaction to believe our provides a our our results our growth truly results. customer leading recent as safety attention measured detail With call eventual focus, funnel indicator I back operational and in financial to Peter. will our superior by survey, progress return customer that, for I the and performance our reflects that

Peter Z. Vanacker

to entire for for let's segments, XX very on results behalf turn on out business results Slide To the close such Jim resilient during thank discuss year. to technology LyondellBasell delivering challenging like of a the Thanks, and Torkel. I our would Seward. team the

EBITDA the milestones. prior after exceeded fourth of Nonetheless, the moderated in timing the year. quarter exceptionally third quarter of strong quarter, the the for due licensing During to revenue results segment fourth licensing the

quarter XXXX. Fourth any volumes third since quarter higher were quarter catalyst the than of

First revenue quarter and further of volumes to the compared the were results increased technology to to fourth a for due licensing catalyst in expected XXXX. improve segments rise quarter

As in team Ken to scale scale. technology first years R&D very Germany. work our on commercial our develop ago recycling advantage this utilize commercial proprietary I'm we we embarked MoReTec mentioned differential as lab proud technology advanced the our to [ earlier, will ] build plant and from of

Let me Slide outlook our now summarize with XX.

majority seen seeing early improvement. the As we to XXXX, in are demand of begin the few businesses our slow fourth of quarter the of continuing face are XXXX. But a we signs

O&P is seeing modest pursue North a American trends improving low demand O&P order Europe, from begin improvements. as modest Our very were business customers level our restocking. In to

begin year, seasonal we to through the of the expect the For the first demand and continue improvements normal quarter near summer. end

economy of interest second to Demand XXXX. rates the during Durable goods LYB expect goods through and the we are benefit year, the As we lacked XXXX products. from durable and progress reduced critical moderating inflation. for market demand half a for

during digested high pandemic prevailed markets extraordinary stimulus. levels era As the activity consumer of that

a that moderating for spending rates, demand goods to interest of expect We gradual this during half and stimulus begin year. to will a the durable second return infrastructure-related reduced support healthier inflation

China. and and improved In in to growth that on strategic goals. the is other for advance continue stimulus drive we and America continue North market exceeding Europe for will closely the meantime, watch to China LYB economic chemicals, largest targeted combined, measures could our

our and grow upgrade businesses. We our portfolio managing core to are actively

profitable supporting work continue and our your We're into serve questions. to pleased enhancement And to deliver will for low-carbon will circular engines value program. our creation now that actions We as regional the hubs the culture results our of through see solutions embed growth value to our take to will corporate continue business.

Operator

with from [Operator first Stephen the Richardson Evercore Instructions] ISI. comes question line of Our

Stephen Richardson

I on about wondering on businesses. you just the of your the are statements O&P guideposts And a maybe if how be a Peter, for just underwriting we and as little bit recovery half more little what out? dig And plays the bit in the was kind you should on year durables could expectations the that in progresses? outlook? thinking beyond of do think you kind any second

Peter Z. Vanacker

Thank you, Stephen.

point I on good mean, from our this half longest very we far prudent history. for the still, as To want guidance in alluded the things seen second that we're are start can we that bit year, have as of I look to, looking of This when to with, question at we downturn to. But usual, I side. been As couple I a your a the mean, has back QX. as

one expect would would that Europe go look rates inflation So mean interest demand be, in if in more I down, will going maybe down, that China, confidence there going also at rates consumer you up.

a very one durable this been mean which, consumer as durable lot I durable of especially side, able have that if you would has been so that demand I year. also a that navigate. rates very expect the but from in and go mean, therefore, So I quite demand know, would all of goods especially would goods, robust. expect, half behavior would do second business, we we demand course, -- mean, has The you O&P mean, at in year not demand up. only the States, up, interest And covers high to as look groups, been to has last with I also, United you know, go low

You see inflation rates I And robust Portland margins also on you know, also the as going down. here, are side. mean,

indications. bit There sold. impact demand And has goods. durable of more that a You on that, house a see builds, direct are for is little being ores already of course, houses

Operator

Bank Byrne line of from comes with America. question of next Steve Our the

Steve Byrne

on that. Pardon I sorry was about about me, that. Sorry

the road? joint see for you right? a it the And Just it's like roughly potential this EBITDA higher seems down do regarding investment napped Is venture, to roughly XXx EBITDA. that generate

investment, And get you terms oversupplied. contract it question the from I that are And the bit road. risk it that my be Saudi, just on given the what for polypropylene -- get propane wondering is I the price seems down basis the would for any guess that what could other like escalated

Peter Z. Vanacker

that very able Thank deeply we been time core has a this good conclusion. of First we mean, a of this our personally, are [indiscernible] during involved an deal question of on to I that was period quite were I company where to come pleased Also in all, course, team of you, to important Steve. work sign

comes the at at is $XXX look you then to alluded the just generating company. in fact money of that out selling have one When what cannot of a market is deal the and amount very EBITDA very certain the we are what million important strategically of needs you included the take our we -- see consideration today, don't that markets. company go in don't we so for -- basis feedstock have Arabia outside Polypropylene we to And entire because path sustainable we the so low-cost the mid-cycle remarks, to to we to to that that Saudi his better to also for positioned paid best markets that that and position. have products into look therefore, maybe are where are that negotiated EBITDA, the value in But we other Ken the

at we forget Italy in And as let's did close not our assets [indiscernible] that 'XX here, well.

as our out generated agreements. that, alluded have we license addition In to, of we to streams the income

And the iron lines invest there. to to Ken continue with the to in is or higher that in yet, also higher that we we opportunity mean, the the to the consideration then alluded second We would no synergies that's first. have deal, part existing of why line the But the we investment next XX% fact with XX%. as which to second are current than ore, doing I be final say, is step, but do to above quite it then decision capture

Michael McMurray

probably just closer clarity. Steve, versus to in XX the for is multiple X

Peter Z. Vanacker

mean, Without cetera, et et taking marketing consideration, cetera. into fees, I

Operator

of Patrick Cunningham from the with question Citi. Our comes line next

Patrick Cunningham

Maybe how and circular of to we expect growth for XXXX? allocated within of for in is that, much solutions? terms that $XXX million inorganic beyond investments that related CapEx directly this the space additional in year, what low-carbon and And in growth should

Peter Z. Vanacker

to Markets to to something we about cycle. refer, I I I mean, Michael, Day, will add -- Ken do XX% for just the want over said year? next the that, mean, Capital you

Michael McMurray

intact. for that remains I'd say what mean the gave Markets I Day that at Yes. we is Capital CapEx guidance

'XX And 'XX XX% expectation to about to the billion period, business, the we'd the to on Peter as over for SR the CLC As today. spend $X.X a it's billion. average, reminder, we $X said period. circularity said, We over guided XX%

growth. say inorganic Now specifically a around probably of couple I'd things.

we our I few done that to get some Day, Markets M&A were the clear we next think at Capital years. over hope

think shared we and criteria clear growing the pretty were to that we I in upgrading the regards core.

quite mindset. think facility, it then are investments made circularity announcement recent valuation a and the and with best of the [indiscernible] example. And examples great was our PO/TBA our joint and I all exit the exit the our D another we've is new refining frankly, EO great owner venture, great that

also our and to Markets We Capital approach shared growth ventures M&As our joint Day. through at

clearly we to our start, a acquisition, then assumed And shared And M&A we future XX% EBITDA has then $XX flow March Markets would I cash great opportunity XXXX, we're our Day, ambitions. in think getting roughly future haven't our March. in finally, to back off to we free this it of and deploy shared And investors also we EBITDA normalized remaining our which of which that Capital of returned the our great with goal fund at for Damped fits the framework, attractive a billion growth. to

a be clear about couple I of to But things. want

allocation Our steadfast priorities and commitments make remain unchanged. investors to principles and our for capital

we We burn will cash. it be your disciplined not acquirers will in

sheet. a you. back we find compelling can't transactions, of more build we'll We balance will lazy If give to cash your not

Operator

Our David next question Begleiter Deutsche from Bank. of with comes the line

David Begleiter

XXXX? contributed X Just think power much level? with CBA a in that the earnings you'll mid-cycle the $X at start do mid-cycle And when you plant earnings achieving billion. think you above new rating run Do in here of how IND, plant still is PO/TBA

Peter Z. Vanacker

birthday is $XXX one generated million, so we million. take if we identified question. with that consideration, me that step in heard excluding needs X impact take the Good to LIFO I&D your into a I have the on course, and mean I heavy you of But EBITDA birthday, We Dave. of items a $XX today. Happy QX. had numbers QX, couple back in stay of that business maybe

million, So QX for then $XXX million. LIFO QX. underlying $XXX of mean, were impact if I add, exit I which results the Comparing $XX XXXX the million was to

not we turnarounds take IND scheduled Bayport. fact that performance, into quarter I consideration in well underlying So a quite and as good as had the bottleneck even in did

in when of million. about our mean, the time QX I an that, to of guidance impact $XXX alluded the we So results at we released

we successfully year good $XXX we in margins, also one. the was We of And very plant. to quite last So course, a fact IND. said that in laying million. to The year our alluded we PO/TBA of quarter that part due started up PO/TBA mid-cycle new plant,

XXXX. that So means

XX% when ramp one capacity more this oxide We on terms plant look little nameplate to But maybe run would the then may And of approximately of at way, market in would we year, move I XX%, utilization further at and and continue we very bit XX% oxyfuels. say, say. minimum a XX%, XXXX, going a We that we utilization. of a where it progress, capacity. to target. see benefit will probably full will also do the into at one we disciplined when would reflecting then PO/TBA ran in that's see I would overachieved for than up, propylene exceeding demand And capacity We

Operator

next the from line comes Stanley. Vincent question with of Andrews Our Morgan

Vincent Andrews

versus to sort right sort Just on to in we the understand 'XX a I'm If program. of expect enhancement be ratio what better. bit Lyondell terms impact a numbers, trying in look in from to XXXX we what 'XX, what at would and ratio 'XX it in apply the at what about XXXX kind VEP was 'XX? XXXX. enjoyed that that and then you of just it of you that of If the was value just EBITDA of to

Michael McMurray

say, run for Yes. actual prepared And heard exit rate guided benefit, P&L for our mean, an I Vincent, for in approximately the XXXX my you remarks, was $XXX hopefully, so then 'XX What benefit $XXX million. I'd we million. the of

bit. year, could that Now fruit, 'XX, execute require in on didn't low-hanging change we very to a it of trying like last investment draw that that things if mind looks quickly. the pace keep from slows kind But focused to you're a upon we of line 'XX and that

this projects $X benefit that in in 'XX, the kind So confidence to in of again P&L billion actual we're year, up gave high we up have million sit building again, of XXXX and we but in we as $XXX outlook in

Operator

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

Michael Sison

lot sort your bit of chemical Cheers, weaker half of in reported sounds or half you've a 'XX. with far terms a companies and challenged the earnings be thus second has being said better. recover of better first their be going like bit demand could little to little XXXX a in is being 'XX versus It

of about potentially for see 'XX, sort full total for maybe think you you down? up, Or when in up what do or directionally setup the the flat be you earnings So should just how early? year,

Peter Z. Vanacker

picking year, I QX see Well, Michael, beginning said least, said goods, I up, And interest been in modest -- at that at we the in demands going half I rates what some China. then expect still it also mean, seasonal QX, demand yourself. you we I of down Europe, second for see recovery we durable mean, mean up. have going recovery will some the

would be expect added consequence, one better that a as you all are going if to that, last So year. than earnings

Michael McMurray

the in But second mostly half.

Operator

to Vertical with of Partners. from Capital Markets. go question the RBC Our Research McCarthy We'll our the from comes line comes question, sorry. with I'm line on Viswanathan of Kevin next next Arun

Kevin McCarthy

looks tax regional XX% Yes. guiding of to differ just rate XXXX. materially perhaps earnings could of In are through that, mix expect Part regional reason ask often dynamics out. to would the of you're the Maybe and other of the XXXX, from might I behind mix would there you kind a like helpful. your is call you but it be reasons there talk you is reason

Michael McMurray

through happy it. I'm talk Yes. to

was to in up percentage yes, point our roughly X ETR, -- mean, is So XXXX. the I we XX% guided of versus what

There's few takes. a and give story. a huge not So

a guide from and our points tax up depreciation decrease the largely U.S. versus Now XXXX and also in we business. of gain by Hopefully, percentage our of be the rate sale helpful. driven that's cash couple and our to also EO&D on year ETR last a tax did that's

Operator

comes Our Roberts from of question Mizuho. the next with John line

John Ezekiel Roberts

polyolefins your Could and JVs? an we both in update PO on operations China get styrene your

Peter Z. Vanacker

mean, I welcome and back. John. Yes,

mean, Let to me opportunity? Ken. I give that The question,

Kenneth Lane

comment can Kim, for sure. maybe really the at But minimums. Yes, we then a joint product for venture O&P and focus you IND. I'll better technical in customer mix mix and to region. on take on finding continue question O&P, is The operate

team Our build a job market we increased because did focus was presence joint out high-density polyethylene polypropylene The last the with venture do great an in year. we and the when from to the that entered that market domestic asset.

challenged still China. course, of very in are earnings, So

our a you it we're haven't still Kim? margins, Even we improvement so has some average of If is in second see look half improvement slightly in asset, negative seeing world-scale very to But at to and the with seen margins in that been, a they're which new the really asset. expect still start market, an improving, I'd year. in far, yet, say, demand challenging that modestly but

Kimberly Foley

excluding a plants to on would We last turnaround, ventures both that the say operating above year, as relates in ran propylene joint those PO of than region. rates guide. which we it have other significantly oxide XX% the JVs higher I was

and that before, were But saw rather also raw are saw as As thin. technologies margins We have we They the are high these we the utilities. high the in region. to, best Ken mentioned competitive. alluded cost costs, material very we've

And owned go a integrated expertise potential They operator very by have sit we with think on both we good of as in we forward, here. technologies. sites these huge

Peter Z. Vanacker

noticed phasing strategy, well we also I that global for propylene our the our out still business are which with basis. China PO/TBA very phased mean, may flow oxide that plant. mean capacity this also, propylene And And towards, together to I for successfully of running time under successful probably fits -- a from be I global gives start-up would mean, This I you I leadership us, of in -- China, technologies out is news majority chlorine-based oxide mean, around add, the some XXXX.

Operator

question comes of line Barclays. from next Our the with Mike Leithead

Michael Leithead

X bit in profitability EBITDA demand the around the been And there's I decade. here has great a I breakeven, like add think But I versus shift of appreciate O&P the to last quarters. it EAI, out below of X past just markets. isn't across seems most been wanted a

profitable bigger a to restructuring make take overhaul to this need we do So again? business

to world in get to that need I approaching just mean for here 'XX? the are we wait how Do you business better?

Peter Z. Vanacker

Thank mean, I an from turning [indiscernible] of there terms capacity. in stone. a which you've A And couple shut question. seen of important the every in Brindisi, been already that We've last year did is that good actions Yes. you, We announcements the very around, Mike. seen has marketplace we are our consolidations. in down other

the portfolio. That's at do. would continue to entire look, We of what expect to course, us you

on QX. having that, reflect also But I back said

big of on we flow freed the end also working us, a for our for and So in was capital. picture And about $XXX up can wanted million cash the as year, we in this to of the QX. see of business than optimize had company utilization capital the XX% And capacity what a in was course, also lower guided consequence, that guidance. working to. towards we originally towards

to optimizing our We at working context also of our low reduced current I mean, levels add? the of capital. with you XX% surprisingly market environment, want capacity really, Again, utilization. in the Anything

Kenneth Lane

the the we're stay on just going with go on to But I No, cash flow. environment. Challenging focused capital to pulled mean maximizing that fixed that's lever, and absorption continue the we it. that costs that. hard P&L working impacted along with the of

Peter Z. Vanacker

for building of that , which lots ] see facility, with [ terms cooperations of quite is you we in solutions circular future in I progressing upon, And decision I also final that our I the of joint the actually mean Europe. investment also mean, activities built up mean, terms see have are our and X up [indiscernible] in of focusing also a lot the Yes. and ventures what regulation Moritech we we feedstock meantime. is in but renewable

Europe, and chains. these mean, circular supply they solutions, I So continue that demand, to that in local renewable believe I

well leading as such will access therefore, a access with a the to So or important EPS market it owners have to in brand OEMs be local position very to business,

Operator

line BMO with McNulty John of Our comes the from Markets. next Capital question

John McNulty

XX%? KTA. can gets on same is when be of also how it is to the upscale Just those? us you to also, about think I additional in capital ability help the us variation XXX about Can the be timing Would proportional is of of the the scale financial and decision that? with it allocation, Or allocated? that similar to help to understand a different size? or kind you follow-up joint some it there kind think guess, Is NATPET ] of And [ in going terms the venture. the XX%, you investment to

Peter Z. Vanacker

total so the scale to, with the able, current we as is to Yes, XX% Again, that in joint around, up XXXKT be capacity, mean, capacity you Ken referred we of mean, rightfully other X the I said, mean, I I venture. to million would have of tonnes.

mean, you take for want capacity, I more some a for if valid, future capacity we to investment Ken we the XX% that So final valid current but decision. be can share? information that also

Kenneth Lane

Yes, I'll of just that is add that talked part region of the is short about had you before propylene. synergy that

that. be this have the executing cash of will for venture. proportionate expect But venture. the will potentially be to to in. we going but yes, joint capacity to That's by something the be the be joint And expansion, propylene is it financed going additional shareholders, don't around synergies with we're putting X financed it by which so And

Operator

you. Thank

Pickering with question from final Holt. Tudor the comes this Blair Matthew line Our of morning

Matthew Blair

these need and of on denominator cash operations. cash of XX% target to from you against these Looking in cash at flow free growth free when versus returning context CapEx payout cash considering the to just not more why returns a the increasing payout targets, is investors. investments the the Don't you're balance like

Michael McMurray

but cash line pretty fully typical I question, flow. it cash on versus free giving targets flow the to it's understand payout your you're operating give when sure Not

Peter Z. Vanacker

Markets also, $X in the mean, sustainable to projects CapEx billion somewhere that the the a growth spending basis also going on mean And Capital level a we to And how are CapEx we're yearly year. Day we much billion then the on depending said that around these our CapEx, , billion, $X be that pretty and I what guided words, between historic come. of at investing range is I then $X.X billion $X.X so we

back the cash number helps So you to of I take. I the that do think flow mean, you, unloved whatever calculation,

Operator

final I'll questions. gentlemen, Ladies concludes time and turn for to you. back Vanacker for Mr. Thank that allowed floor our comments. the

Peter Z. Vanacker

want more the again, course, you. wish outstanding safe. these I you, thank team our global progress further for cash weekend look excellent to over sharing and during stay Thank strategy. to also delivering We times. questions. great on updates for long-term Okay. and coming a We all value months with our challenging of all And you stay the forward well, maximizing conversion Thank

Operator

today's conference This you. concludes call. Thank

this may participation. lines You you Thank your time. disconnect your for at

LyondellBasell Industries (LYB) 2 Feb 242023 Q4 Earnings call transcript