LYB - Earnings call transcript Q1 2024 | LyondellBasell Industries N.V.

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Operator

Hello, and welcome to the LyondellBasell Teleconference. [Operator Instructions] I would now like to turn the conference over to Mr. David Kinney, Head of Investor Relations. Sir, you may begin.

David Kinney

Good day, everybody, and thank you for joining today's call.

discussion, presentation like is accompanies our at the that point available begin website slide a today's www.lyondellbasell.com/investorrelations. we I to would out on Before call and

reference the our measures. investors. financial in believe about Nonetheless, useful are that encourage and the based statements results discussing the and by are regulatory We be you slides available to our website. Investor subject also significant statements the results could and reasonable will on forward-looking are risks and statements forward-looking actual Relations we more lead uncertainty. while Today, We reviewing learn to to the making upon the our factors to to differ forward-looking our alternative which some cautionary filings, non-GAAP are business statements assumptions presentation measures

this Comments will as excluding underlying regard business measures to and using in identified earnings our be such non-GAAP per share financial EBITDA made results on items. call

reconciliations measures results discussion. our disclosures, release business Investor our Additional together financial and including the non-GAAP other to of website documents with measures, GAAP earnings on provide financial

A Eastern be States May outside today both numbers United telephone available by recording the XX Time in (XXX) States. calling XXX-XXXX until access and at X:XX (XXX) this code for of United call beginning will XXX-XXXX The p.m. the by is XXXXXXXX.

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

and said, turn Peter. call would market focus results, will now like With that to we being quarter call, I current today's strategy. dynamics, over outlook our near-term long-term first our to the During on

Peter Z. Vanacker

us Thank you, all first quarter you David, results. welcome you. as joining of to discuss appreciate we today our We and

in we announced discussing the on leaders call, line be results today's During XX. February our with will organizational changes

Foley O&P for responsibilities segments. is Vice for Olefins as Chain, Kim results Refining Refining well for now as Global Polyolefins. her and Kim & both Executive President segments Supply the to addition prior In the our discuss will

Most Joining in those his Executive our petrochemical role LYB, taking Kim than at Derivatives the Aaron in segment. us telephone is segment, also Ledet of Vice in for for responsible served our States. Aaron years commercial XX of roles to responsibility me earnings over both responsible welcoming as the was has Aaron XX refinery. for is manufacturing Over in Intermediates years who first operations leading on the conference Please variety this call. where from developing recently, industry, he time Europe for new future & was President with more in in Americas join O&P a our and the Houston and options Aaron United for our

to hope you this a weeks of results, I into year's dive we invest ago. some we Before released Sustainability our edition the review few time will Report that

Over everyday the LYB past ambitions. reality. sustainability sustainability embedded our our on how made a progress significant into describes report strategy we year's is and year, This making sustainability

leadership in working same successful the continued performance. our greater member health to every than every a begin safety accomplishment and their they our return to team having the began day as Slide This of our sustainable discussion is and Let's There when turn in home with cornerstone is their families X no of day. business.

of industry. in I rate million metrics a incident our continue X injury safety a to rate X to their congratulate hours and our quarter position for only LyondellBasell's contractors leading to our And worked. safety believe We per first outstanding want hold team improved employees for performance.

X. Slide to Moving

X hope you today's main during take will performance company's our discuss we messages. we away As teleconference,

increased X years. its to conditions, EBITDA have over quarter, LYB which market results pressured the the the continues our First, industry over generate managing challenging modestly fourth past quarter. LyondellBasell first resilient while In

cash for capital higher good was higher reasons: in Our prices volumes. negatively and working build impacted a generation by

that the production strongly encouraging in and beginning the prices North other America to recover. advantaged to see we industry Middle And The is signs East. oil LYB's ratio favors of gas

and International seeing segment of And segments. Polyolefins of has performance and in we're Olefins Asia returned Our profitability. our Europe, improvements indications to APS the early

The second opportunities is strategy our focused to key business. that is transform message LyondellBasell's creating unique

PO/TBA a many core strategic X our executing As more and businesses you Middle our quarter of our times, the through our on the have strategy during this heard the of update on venture results. We're in acquisition our substantive upgrading East. of intend pillar NATPET to me new growing say give are capacity, pillars. and startup joint we We second

we're up the and through creation segment. in APS program our value to culture performance transformation enhancement our stepping And embrace our of value

As our sources. on move business. you is business The gave our CLCS from we renewable fossil share a might But Solutions so-called detailed to and and towards VEP fuels progress transformation strategic have during will made our on feedstocks quarter's results. impactful we Circular recycled the build an a last recall, profitable Low-Carbon update away increasing the most of pillar

business competitive leading capital-efficient growing in markets positions that such infrastructure leverages and a advantages, through strategy deep existing a relationships. network as We're building this customer global our disciplined, and of our

call underlying and this addition building away our of come improvements you an I for In from of CLCS the understanding first hope excitement businesses, the our our to with quarter future in improved LyondellBasell. share progress in will

to Moving Slide X.

the business. the Let's targeting are Circular to CLCS Solutions a actions chain. LYB value we capabilities profitable focus on across is taking Low-Carbon and build

Slide how are comprehensive series to to form LyondellBasell We value creation of together a these advanced of CLCS business. illustrates waste investments fit in investments a approach sourcing, mechanical for sorting, strategic making all advanced recycling. and plastic recycling X

and value streams. sorting sourcing from our to a recycled variety enable and waste maximize in wide of investments advanced company LyondellBasell's waste renewable

value recycling, allow whether feedstock, mechanical renewables. recycling for Our the involves network will to or particular proposition a LYB highest that select advanced waste

while growing supply scale where resiliency, to We and use chain and continue technologies. market-leading to appropriate to JV efficiency builds gaining capital access structures improve in

recycling hub that of Houston advanced proprietary will first technology, our Construction decision with LYB's catalyst is facility. expected likely for a be Cologne second assets our year final for Germany the a the twice size next MoReTec, in using unit investment integrated underway German in at

evaluating options Houston hydrotreaters feedstocks. potential to recycled reuse refinery renewable are at purify for of cracker our We and the the

leverage investments and LYB these All existing capacities in enable of recycled to cracker feedstocks. our to process renewable substantial capabilities and polymerization to

custom recycled through balancing, collaboration to owners, offered business. volumes through in with our sold Finally, solutions the channels of our our APS these converters brands. compounding and well-known both Using and we were sales the under bring polymers brand renewable mass and the of by markets majority content direct Circulen

X. Slide to Turning

of doubling how in see CLCS rapid in at LYB's our this polymers. of XXXX least can focused volumes drive grew recycled for our we strategy sales. year. X per renewable-based million and growth resulting target XXXX, tons XXXX meaningful And towards to is our In our will tons, we expect execution excellent You momentum continue XXX,XXX volumes sales the as and

Last year, LyondellBasell's Markets our for CLCS Capital our at Day, financial business. we outlined targets

generating continue to are acquisitions regional to growth, We achieve of business. $XXX margins by and by $X leadership targets. incremental can expect hubs position serve By disciplined expanding build contribution billion we and and organic million strengthen continue while confident attractive to XXXX our we our with XXXX undersupplied an EBITDA market to this financial the from this

Let's turn to Slide financial our X results. and summarize

billion. Earnings resilient from $X.XX were $X.X delivered businesses our LyondellBasell's portfolio. quarter, and EBITDA diverse first results well-positioned was per share. the During

from During $XXX with consumed liquidity. the our $X.X about quarter, cash sheet billion balance available operating remains and activities million, of robust

financial segment Let the leaders of me and who turn describe will Michael business the results then first, our detail. over more and to call to each in

Michael McMurray

me let Thank everyone. X, you, cash by Please our Peter, good and to and generation. begin morning, Slide addressing turn

the activities. X of generated During from cash LyondellBasell $X.X past quarters, billion operating

At of $X.X XX quarter, cash the converted Our the of end balance billion. efficiently cash XX% over the EBITDA team into was our our last months.

increasing strategy balance continue execute profitably enables sheet returns shareholders. investment-grade grow remains LYB's us and strong for our our to and on while to

review Slide details with of our deployment. Let's capital continue the and X

During businesses from of more EBITDA the was million quarter, by million. operating cash a over about improvement offset $XXX first capital consumed working just than activities. build our $XXX in

higher with we including from Red working our primarily I&D In sales higher our prices receivables as mentioned, and Sea higher and Peter for was benefited EAI good segments. capital the EAI, O&P within disruptions. build logistic increased reasons, volumes volumes, As O&P

had segment rebuilt to some due inventories price maintenance. styrene and fourth receivables we after increases, I&D quarter oxyfuel higher Our

last cash generation resilient Our months through returned the dividends to XX resulted both and has share repurchases. over shareholders in $X.X billion

quarter, successfully rate the During worth our bonds basis our reduced to refinance we issued of which $XXX XXXX points. by XX million coupon maturity,

shape. Our balance in great is sheet

average in debt. billion with $XX XX years have long-term an cost a of X% of maturity average and debt We about

improved $X.X of and I of valuation quarter-over-quarter from our to our quarter. first results. of would segments. EBITDA now inventory the results segments the valuation during brief benefits delivered billion sequentially X the Americas provide LyondellBasell's segments overview fourth business X our of the first absence of a Profitability O&P inventory segment, each on Slide our absence of I&D benefited in quarter XX. quarter like Refining impacted from In charges. quarter fourth Conversely, portfolio

we teleconference, planned and in first outlined EBITDA of million O&P $XXX quarter maintenance fourth estimated our from Refining. In quarter Americas impact

by unplanned estimated the from Additional first winter impact million. increased downtime EBITDA downtime from quarter and approximately Houston storm in other Heather $XXX events

impact of focused Our is estimate units in $XX the a planned one for remains second POSM turnaround EBITDA at of maintenance quarter and on million Channelview.

with rates align working We market continue optimize our operating to to capital. demand

polyolefins assets rates operating our and for assets. for and our of expect and we derivative quarter, second XX% the olefins XX% global During intermediates

With that, the Kim. Kim? to I'll turn call over

Kimberly Foley

upgrade various years honor O&P work in businesses for our responsibility site an grow very It and more me our company. core in Thank LYB, than XX now I site Michael. is these at in Earlier the positions assume manager segments. LyondellBasell's excited was you, for to for career, leadership After Channelview, to Texas. lead my our to am I for largest here

the our the Slide begin XX with on Polyolefins discussions performance Let's Olefins Americas of segment segment. and

and co-product was and $XXX First were feedstock domestic Lower volumes due million. costs, unplanned offset lower O&P were by EBITDA stable polyethylene higher planned Americas margins Olefins quarter with supported to prices, pricing. coupled by downtime. energy

results LIFO quarter $XX million. changes fourth inventory from valuation benefited of reminder, a As

the stable strong and, the market. domestic prices continued support despite During led polyethylene to quarter, the of entering markets, demand first the to export new strengthen North American capacity with

has from American improved of new fourth the capacity than the exports addition American XXXX the to relative the quarter. in market much domestic industry, volumes higher North For The polyethylene to by X% region. sales North led to more

exports During quarter, of XXXX were average. higher significantly polyethylene American first North than the

approximately first our quarter North export the LYB, America our domestic strong of to share customers. going resulted in For in sales XX%

quarter, second benefit to In from gas will continue the and a ratio, producers, polyolefin remain the in energy to downtime LYB, expect to oil-derived including first relative integrated we cost LYB following with leading American oil significantly lower rates costs to advantaged quarter. low, North higher operating targeting highly feedstock relatively a production.

polyethylene capacity industry about is well our U.S. the is rates inventories of balanced demand of relatively yet now online, keeping demand. remainder export the serve on remain aligning days the supply. the We With to market domestic market and supplied, at operating focused XX

area, As Peter recycling renewable-based and in assets Metropolitan good polymers. the We focused Angeles higher favorable February, extend backdrop growing California mentioned, we offers our better recycling recycling Circular feedstock region. of mechanical markets in Jurupa acquisition in waste plastic business are Low-Carbon and to to the waste infrastructure, recycled footprint increase and believe policies. into to recovery Solutions access the assets plastic Valley, the build of of PreZero supportive the announced a Los Greater rates with providing attractive California. our premium These leadership In we our from on

Please Asia, turn EBITDA with the and restocking, International of first results to drove resulting performance segment. XX from higher quarter, Polyolefins million. review In demand volumes Olefins and of as Asia improved combined Slide Europe, increased from in and in Europe we the near-shoring, $XX our

the modest quarter, from throughout margins mostly Additionally, resulting beneficial European price that higher variable cost Red logistical local and challenges fixed increased In in recovery. were increases volumes proved for offset the by Europe, in producers, Sea costs. feedstock benefited

European seasonal energy progress As improved demand. second we the due to costs lower quarter, we pricing, and Polymers improve expect Olefins through and firm results to

slow of continue In we demand. return to monitor gradual Chinese the addition, and

commitment our core to grow Finally, businesses. upgrade we our are true and to staying

with expected the in months. growth close example excellent Our joint of acquisition NATPET The advantaged Arabian of an venture the long-term to is assets. strategy Saudi LyondellBasell's NATPET to acquisition coming is drive

Germany. with capacity. electricity capacity of rapidly line purchase more sources. have towards our renewable for moving we target megawatts agreement, to in our goals, renewable half is our new agreements XXXX sustainability solar at wind We XX% XXXX signed least this of than agreement of and target supply XXX In another our generation sourced electricity LyondellBasell through of With power now from

segment. Slide for the to the XX turn and let's results Refining Now discuss

$XX the was unplanned partially million. related to crack EBITDA million. spread impacted volumes quarter LIFO downtime. offset by planned by of charges Fourth gasoline quarter in First $XX lower was XXXX were results Improvement approximately and

our As XXXX. mitigate previously implemented mentioned, program distillate a hedging production to a for of we portion have throughout risk

the outperformed results our a During cracks distillate for first and the include expectations program. mark-to-market quarter, losses

amid capacity In to approximately the for we in gasoline the near oil refinery, at maximize and crude rising term, throughput intend stronger crude XX% of demand prices. expect operated We the quarter. second seasonally

committed reliable of we safe remain assets. and ahead, the to Looking operation these

to target continue until in quarter will of first We operating ramp-down the high XXXX. rates begins

Our is our growth the Circular transform Solutions to Low-Carbon in several of evaluating team strategy. new projects and support site

With the that, Aaron. turn will call I to over

Aaron Ledet

Derivatives Intermediate Like kind I'm you, Kim, Peter, honored the for Kim, opportunity of lead to the the the you, thank and at have the Thank introduction to segment. call. beginning to

in APS, I leading in across on leadership I&D, the intermediates derivatives my to touching businesses forward the and look at Refining, my drive core served growth career roles value creation to Europe, most I at LYB. recently have chain, within new responsibilities Americas. During and supply LyondellBasell, O&P and

Please quarter, EBITDA segment turn look was the $XXX and as at Slide Intermediates we the Derivatives to In segment. first million. XX

were the $XX approximately LIFO As of impacted charges quarter million. a fourth reminder, results by

in Our quarter. drove the that of margins business the has which near-shoring the oxide volumes European demand into second higher in benefited Sea, dynamic and continued to disruptions leading and propylene derivatives logistics from a region, local Red

typically oxyfuels that quarter the In double oxyfuels seen normalized margins due to higher these premiums to seasonally level quarter. April. margins more gasoline. margins during to relative Despite styrene outages first since remained slow than for led the the first declined the Industry first quarter, headwinds, lower during in oxyfuels have

the the oxyfuels strength summer Looking support segment continued butane ahead, we anticipate benefits and seasonal including improvements season from lower costs, in in driving across businesses for all providing margins.

one beginning the our planned at our from year, Texas. with assets we in guidance line the POSM maintenance have of In of underway Channelview,

following quarter. We in expect volumes higher across unplanned first downtime our most business the of

Our team product utilization superb quality. ] capacity of expect job PO/TBA an continues to operate we I&D considering our and facility maintenance, reliability second average running about [ quarter. to during in new rate ensuring XX% do with of high at a the After fantastic while planned

ethylene gain will which The as We $XXX second oxide process expect to complete to the our item sale we transaction quarter. is of second quarter. finalize anticipate identified sale derivatives to the a the businesses and underway, of the an book on well reflected INEOS million, during in be

that, the With will to I over call turn Torkel.

Torkel Rhenman

Thank you, Aaron.

segment first the review Slide for results Let's quarter the Advanced XX. Solutions on Polymer

First seasonal across quarter downtime. EBITDA customers' million. increased XX% by fourth typical was $XX the our portfolio and driven demand of quarter Volumes improving lack

fixed Variable product offset increased higher our quarter to cost was the as due investments we improvements. and forward transformation. moved APS mix margins pricing by This on during

business. demand to we quarter, from second of volumes show pipeline will the growing benefiting modest continue new seasonally In both higher expect improvement our and

projects are metal existing with customers. as Utilizing well on team We continue our solutions. results good acquired funnel, to our out we we assets new providing reach coupled see and existing both our We recently at as customers Day that base, our our will winning both transformation, as focused with with innovative growth market momentum highly Capital APS year. goals expand sustainable and the asset last Markets believe deliver to laid we recovery, our with

back that, call to will the With I Peter. return

Peter Z. Vanacker

and the of XX, for behalf please you, Technology turn results segment on the And Slide I Seward. to Thank Torkel. will discuss Jim

will an will of quarter higher licensing associated $XXX increased decrease, slightly offset levels, the margins. volumes. catalyst with revenue matching reflected improved expect EBITDA second fourth quarter In XXXX be quarter, by that we First but licensing catalyst and million revenue milestones

results we fourth second similar will that slightly than perhaps results. or quarter quarter better Technology be segment a As estimate result,

regions Slide discuss market to as near-term turn markets. we outlook Please the XX by end and

further demand As you costs And expected we improving along improvements markets. tighten should to integrated business ethane to year. is the moderate see seasonal in heard some leaders, typical throughout continue polyethylene to markets from demand domestic expect export our the strengthen for with additionally, increases margins. in low polyethylene In Americas,

continued modest demand we confidence. activity begin first [ the gradually ] products. recover local markets increasing, for slow encouraged we year, Industrial expect We're European steady and influence but watchful improve costs for to improvement. demand move China's demand that improvements remain we decisions. are will bolstered will stimulus quarter expect targeted China very The disruptions these in meaningful Red to purchasing Sea long that as region see indications exhibiting by efforts As in through to continue logistics improvements. deliver LYB's will markets the measures is and energy

For consistent. the sector, been nondurables for has packaging demand

to packaging be ahead. for the forward chain across we the to value destocking complete, potential seems restocking that Given look

Construction, from the demand In Law stimulus inevitable improving some expected in interest begin the moderating & bipartisan goods. and durable for the year the from benefits we rates U.S., funding construction expect Infrastructure to Building to unfolds. for benefits with In and growing falling see as demand perhaps recovery will commercial support

sector, first segment to winning strategic In throughout customers from on quarter APS growing production committed global business. improve the Moreover, expected levels and is our the back modestly to initiatives focused automotive XXXX. is

oxyfuels our returned the levels last lows to our assets the gasoline cash maximize demand At rates is miles the on have value spreads in to scale by the we quarter traveled improving we our And to LYB, pre-pandemic at octane from and for market oxyfuels and a and strong. continue generation. year. optimize from refining, meet U.S. operating end are aligning global of of vehicle fourth crack saw

long-term and Slide for summarize the with me the let Now company, first outlook our XX. strategy quarter, our

As we second across we businesses seasonal our summer into months, improvements anticipate the quarter. the move in

peers. lower the natural from and stable gas-based Middle should modestly in improvement rates second the production and to to costs higher to feedstock Sea logistic driven fade uncertain. East demand. disruptions beneficial XXXX Red time through of is to U.S. will the for advantaged oil-based we tailwinds continue benefit half take expect these compared Moving interest LYB's were first European businesses year, our and to in the and energy by quarter it

earnings million through recurring we of we our end annual in committed $XXX quarter are value fourth program. by call, As XXXX to delivering enhancement our mentioned EBITDA the of

continue the culture. an for of it evergreen program company the enthusiastic as to across our part see We support becomes

focused continue the of through pillars team strategy. on Our to X advancing remain value our long-term will creation

months, coming Arabia. on Saudi in Progress In continues close our expect propylene acquisition on upgrading and joint growing and NATPET of the venture polypropylene to businesses. core we our the

of and INEOS the business Our during oxide to ethylene to divestiture expected second derivatives quarter. is occur

today, discussed model mind. LYB making we profitable build Circular in support and As smart investments LyondellBasell global capabilities business. build with continues of to the comprehensive business to to across step every a chain a scale is value Low-Carbon a Solutions

With construction MoReTec assets Houston already for momentum this underway FID for on larger XXXX. advanced Germany, recycling second our unit we're building in for in with first our plans

to value and commitment LYB's Circular with Solutions. actions Our demonstrate capture Low-Carbon

Our key original program profitable XXXX, incremental EBITDA value more significantly for sustainable enhancement to is a $X billion goals. surpassing growth of recurring our add We're engine a element the track and LyondellBasell. our target continues focused by of company our program is deliver up culture. of annual to end on grow the on to Currently, to laser and

take your that, with questions. pleased we're Now to

Operator

the from of with [Operator question America. of Instructions] Our Steve comes Byrne Bank first line

Steve Byrne

[indiscernible] to plus products, requirements I'm polyethylene long-term your do to contract how willing long-term demand [indiscernible] whether hydrogen they you and level expect feedstocks. customers are interested you in that from Houston, in sign the cost will a renewable [indiscernible] contracts hearing for [indiscernible] your given you're be these of [indiscernible] downstream

be would plus. you So just this whether curious cost think

Peter Z. Vanacker

But was Peter. understand as Steve, for bit the of to well on is for breaking plus you demand as mean, This if our was your of not. difficult, I the question. level line were renewable cost asking is I mean, thanks side It up. it polyethylene a or

see to very continue that market. traction we in Well, good

the doubled products. saw of from mechanical family, the You recycles well so and our approximately year as nonplastic so our that volumes recycled advanced recycles, presentation biowaste we last waste renewables, Circulen the the

in to continue very is regulation in We -- have that We regard. that advancing, demand particularly Europe. see also good see

the do investments we in in contracted MoReTec purpose, will our Cologne technology entire With that the we a up once part contract regards contracted. believe can We, advanced we then part value the for if because that in technology, already facility. be the contract we have not capacity the to we capacity recycling start our on that is capture of not structures, take there up Wesseling, first the big

what its We that times. demand, are pricing but basis. means not contracting These for and that on That renewable, currently are the polypropylene, recycled polyethylene, see cost-plus has And is is I that said own that last Capital a also own much what ahead of is have multiple we supply said will all markets in points very actually being seeing. March and we set the even aligned its Day. price year that in still had Markets marketplace. at we

Operator

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

Patrick Cunningham

So be year? expect to we How and this see trend trends reversal in the throughout sense EAI and that restocking in Europe. you you highlighted? shoring seeing do from particularly seems the near prices, do volume O&P some trends second may any you've and firmer quarter prices get into And some nice benefits to

Peter Z. Vanacker

course, changing we Good we the of that situation question, Patrick. is in are very Europe. see pleased And that

by because Sea. said the as in the as helped to we in alluded discontinuity Red course, of prepared remarks, you and Of issues the

buying to changed, spoken than Generally more cheap see we hand that changing then customers Kim, over on of spoken, because very locally that behavior will the they not rapidly eventually and are generally relying has situation I imports. our

in remarks, to to we prepared therefore, to region expect, profitability particular Kim, that mean, second to quarter. we in in you see that? So our alluded want add advancement further I the as something in the

Kimberly Foley

out nearshoring. us that with add, none And predict I prepared we so see continue of and our chains, happen can in we'll threat to in thing as packaging, to continue to going I Peter, which supply only to there, is strength more long alluded would we what's think is I see the think that the remarks.

Peter Z. Vanacker

has in I to everybody point is market. that in announcements now want there out consolidation that Europe, topic is the noticed another And

back-of-the-envelope that million made, about that calculation talking in do if So term in the say, capacity, been the of, market. ethylene we're total, now relatively the X should short of let's have then tons you announcements in, approximately disappear X.X

to Europe United to the I year. lower in of it's that years, than is the whereby in want point capacity years. crackers than XX age of and that There have Another Europe is are XX States them in is tons allude per XXX,XXX crackers less to Europe XX average close half that a about about

see announcements our Europe. into that you also So customers restructuring of in And expect chain, then customers their would customers, that is being to means they actually the if starting in in we that secure where products. to our happen is made, and consideration being these are taken want that value

said restocking. that Europe that, do is see there in we not yet Having

Kim what demand because So of higher products to upon is downstream alluding of was higher based consumption mainly being produced.

yet not it's restocking. So

Operator

Our next Fermium with question Frank Mitsch of comes Research. from the line

Frank Mitsch

operates, expect stay First for minute? that But that Peter, indicated catching you Why were and forth. you the see quarter. XX% And the is on role. to Europe. break business Americas seem you rationalizations some the a you also the to Europe with Sea congrats, we Red don't global your does point, Kim, what versus with split Curious starting second off, that issues. it a O&P so be might new that And the in indicated

in and see to happen taken to in then neutralized, start appear obviously have the and Sea global be expecting we catalyze will actions. that the already be Europe? some the more we'll threat actions. Is Theoretically, You trade will there Red flows to that some again, should

there would be So helpful. any very color

Peter Z. Vanacker

The mean our Let me question, take good the part as of Frank. I assets. part, question. latter around usual, your latter Very

early industry to very rightfully undertaking of not steps polypropylene Italy, took rationalizing yet, You the said, was facility a Brindisi. our any in in part by southern the line when we step X

our that Europe, are continue that all Of you not that course, are flexible look into the a position that taking costs, subscale industry dealing the that assets in look assets that that we are other some different in in we Europe. Europe the flexible we curve cost compared to are that if at assets quite consideration with we high there cash in at have have still to good with said we've have always assets

But continue evaluate nevertheless, said Europe. our strategically in we to positions we as before,

are products. As quite mean, by strategic building before, that the supports up our I were hub And advanced very alluded Cologne new we We're investments. I to in said, assets renewable regulation therefore, with MoReTec mean, that our positive demand we've dynamics recycled recycling polyolefins, around, around the regard. around Cologne for also the I

will that forward. to move focus of So get a as lot we continue

add, Sea, On Kim? the that Red I the anything question short-term with mean, we can

Kimberly Foley

I think I Frank's go answer question, I just first want to back the to that. part so of

remarks As North our first releases would morning, you of this prepared quarter many saw in our and American the XX%. the olefins polyolefins and about operate at crackers at

or International as are OPAM question Asia Americas global the I say well global, of global and or the O&P at in year. XX% OPAM. the the for both -- as would asked half you rates quarter about second So operating second Europe,

Operator

with comes from the Our next Holt. Blair question Tudor Matthew line of Pickering

Matthew Blair

that the into the Is half back PE bit Could stronger well year? the you of outlook could as domestic inventory export fair to levels? say right than pricing a overall as about quarter it demand for PE? the you little just is And now talk your go in second then for demand also,

Peter Z. Vanacker

you, Thank Matthew.

out of year. domestic this the United improved strongest X% that me QX last pleased over hand States point Kim, by see everybody quarter is the in reminding course, QX that are, has to versus let And XXXX. we demand since I that to very Before

surprise for actually fourth In you if addition at is that, a breaking and to as between differential records, the rightfully to so not continue much the the said, base consecutive export you I see oil see quarter, gas. and the you sales grow, mean, cost which if

PE for Gulf. very very a for are we good in the and producers these that marketplace in So like cost basis with ourselves low the dynamics see Kim?

Kimberly Foley

So is export I is and demand, hidden Peter, you is messaging it's what domestic I think our as that throughout demand up. would today, to mentioned, add up, that,

year-on-year. around Year-on-year PE Just to America XX%. of up your to are exports North comment put numbers out

new exported our around we're market that capacity online involved to all those be we to back now to So of channels channels. cracker up Christi, in optimistic the Those able now open. world. very have we're absolutely going are the being those. fulfill And We're is that's in Corpus that all

you we've meet of ratio, as we've set advantage got low a the energy. world. yes, very the demands gas is think high it, competitive The to oil a got about U.S. with So to

Peter Z. Vanacker

went QX look from at to couple want A I from days of also to outline XX. if you here, on QX, to I PE, down XX that and it mean, points hand

you as also mean, the going export highlighted. that there topics, I demand So up, Kim see domestic well sales,

we utilization of saw additional [indiscernible] issues, of that couple So come in exemptions we to that online. that believe is a not the we I a capacities mean, also some United brought the and there but producing, capacity that capacity now is saw most lot that online, maybe being there of lot major despite, States capacity technical of need still a with

utilization up the around in XX% So we in capacity PE States. to saw United actually moving

Operator

Zekauskas question next from JPMorgan. with line Jeff comes the Our of

Jeffrey Zekauskas

up supply/demand really needs do the X-part polyethylene on is moving the have overcapacity a question. in order other positively I something in And either break what tighter China? balance prices prices Is China think to for that situation jurisdiction? a or the China you market affected the in real prices be in

you olefins under capacity exactly talking that polyolefins demand say and does is, part and XX, actions our the utilization. balancing Slide domestic disciplined mean? What with on America, The second about

Peter Z. Vanacker

are where demand out, bit would Josh. into they your is bleeding. is Indeed, that Let make I even you be. case in of seen first little Margins everybody if me as Naphtha go we uptick pointed rightfully need an not to in expensive. the a have China, question,

actions may long of And in sure we that capacities of XX undertaken? until a on XX, there Because then will then I'm can that hold be quite how subscale but will bleeding, how is even being question that the long of China. last? bleeding, longer, much, of is how And facilities, some newer course, months also will after, lot last XX months see there

you be, and where the from the States despite the not these breaking parts I demand mean, world the see of exports is reaching records. supply United nevertheless, But should into fact, other it China

where then backward be not way fully are markets, these dependent difficult its have naphtha, finds older again, on maybe material flexible, been the that into of not competitive. facilities, very other facilities, also, the So markets to course, integrated,

we -- mean, consequence, As at price continue a of increases the I the seen, beginning believe to the year.

the of X of rounds the the saw last year. You at increases end year price United -- States in last

increases, I have strong there's to more a We that And increases market, if May. stick. the for you everything in those very April at mean, price look happening, is out price case, and these

turn the I Kim If on question, second to

Kimberly Foley

second explain I it's question, easiest is that think to the way A an optimization.

your look assets? to domestic optimization cost to and across what make on margin have production going going our You're demand, of your going to at to incremental right the look at you're you you're export,

Operator

next Our UBS. line of Josh question comes Spector with from the

Joshua Spector

I wanted to ask equation. on of the the side cost

new to continue business make your you progress plan. value you're good mean, CLCS. in same stand a I at on up the So investing to time, enhancement But

of wrong, that's million probably continues couple I think, I'm why over last increase, SG&A if about your about years. driver a $XXX correct to big the up me

you're so to cost could of 'XX over of for costs from next see have I'm the what better at years if maybe match this new maybe the versus you that was and businesses. model break don't we inflation, and getting, kind actual drop-through you that can the the the 'XX pieces savings benefit that maybe terms adding EBITDA So couple versus business over new yourself apart the wondering that of the of in VEP point,

Peter Z. Vanacker

Let go then first, hand I Michael. and to me over

continue to the our that to create able this we to Of last continue course, very year. we been that VEP value in program, the we pleased created see organization, being with acceptance year be have the mean, I

track, are exceed We VEP I to well the said, our on very for year. this reach or on targets

pillars has and second that as year I amount was and margin I that up year and substantial such million been amounts that's give being mean, complete I around, that an last work, XXX to end above up have in to XXX effective products of pillar have mid-cycle of of because unit building million. X but business the the with creation invested, Low-Carbon how Solutions. reinvested the is a effective million. mean, a million, more XXX we was sold, also at slightly XXX that value and the line, the reinvested for been Not Well, Circular Bottom you part year, example, build pillar, the margins [indiscernible].

course, remember, bought we of done have have a partners, also leads, That, we out joint venture of acquisitions. number bolt-on

that, pillars where our I works SG&A course, on it is mean, strategy. your with course, the higher of together, that get in But of balance you So all sheet.

Michael McMurray

Josh, just comments regards cost. to few more and maybe Yes, in a

I actually gives we disciplined. think others. good percent revenue and in good, despite which as cost think I control Quite a sales totaled actually pretty an lean, frankly, reputation strong. a When to XXXX, we operating us are SG&A X.X%, times headwinds. for think of underlying cost was have advantage versus we continue be

VEP, inflation We capability as significant the circularity, headwind started a investments and noted, year. up building also was And made footprint in PO/TBA across when we you our clearly, some in and enterprise. last

we as into invest example, business moved investments, of is CapEx. some in $XXX that this OpEx, will targeted X/X our we for And million make of program, VEP that our X/X is about to XXXX, year. where we've and continue CLCS

in OpEx. But in actions driving CapEx managing and again, year both this well, we're and

investments, is so you overall, to well And are control and targeted say, forward. expect I'd strong, manage can and to cost continue us costs we making going

Peter Z. Vanacker

soon technology. to at final newer at derivatives. know, decision closed a the of and joint the then, portfolio of course, after mean, that. closing ethylene and you almost, I of NATPET oxide course, that, point our I also an helps expand mean, we're our triggers And of investment with closing with that divestiture additional And management, line with we're almost as venture,

So is things all to I wanted together, these highlight. what work

Operator

next Our of the Alembic Hassan Global. with Ahmed comes from question line

Hassan Ahmed

your a terms of venture of and guys in consolidating greatest couple the potentially the of love in obviously Arabia out Would you mentioned stand maybe you recently sort Peter, where did, well. as Saudi obviously, latest the and to ventures joint NATPET about hear you Sasol joint venture.

Peter Z. Vanacker

question. Thank you, Good Hassan.

venture the to, joint of investment. Saudi As steps next the with have ongoing, then, alluded you the NATPET with with activities Arabia, mean, course, and joint of lots ventures, in just I then existing but the also not we

with there. with have deal actually, venture super spoken, We opportunities and that with We're always we entered was time, my have generally the done in before in pleased, so even said our that fact Sasol. in operation and that look happy, grow position we in core. say, are where the joint would happy, can is I mean, multiple that we we I'm running the venture. continue, at marketplace to that I as we course, upgrade And of times, joint well have

look we times that, we thing, So that just activities. we continuing are multiple our we Having and are M&A not focusing to be upgrading in at said the disciplined extremely core. but outlined now Michael? growing on one will have

Michael McMurray

say Yes. And maybe, couple Hassan, things. a more I'd

specific for just to clearly, both years been portfolio don't but looking upon comment on in, But transaction? better on think the management us appropriate perspective, jettising think a are I there X we've a things I owners. back more active things much it's from bringing last also where

Operator

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

Kevin McCarthy

ask by CLCS of towards route what around in $X March you How Peter, and year. you unveiled long-term could MoReTec medium- may Slide goals not $X.X your that the first billion goals? next sounds XXXX XXXX. take X it of on to that But say, was should part extending you that exactly like piece not on 'XX I ramp to kilotons on some billion en level speak And your in next sure years EBITDA confidence out. final take in of March of ramp a in could over last the I and toward or initiatives, to March, financial how you decision the your timing wondering Houston XXXX. of kind show if the X. in is maybe of long until the reason does build tonnage might you I'm XXX maybe or to speak investment X I

Peter Z. Vanacker

out X billion you, we had be also Generally very put additional there, Thank the for question. we said C&LCS reach what on year have on continue targets overall on than your ago to good bit we XXXX, X.X confident C&LCS, a very that but more can profitability. that Kevin, we spoken, and

very mean, entire making progress, the good family. are I We with

saw I volumes, You for the particular that entire are margins doubling that we very generating family. the good one mean, slide,

We, Kevin, other than parts the go know, faster some as you parts. of

years have Europe, and built faster it's also to network family build very slide up biowaste we the we that based we since So in we the the renew continue the clear polyolefins. and up as States, goes of and have in in it's had up on the renew, couple with remember mechanical market is because starting on Circulen been deals, that all a that and also did planned. ramping the United then recycles, the fast The

mean, on up underway. end have by advanced team the And parts, line have the is positively there, for on recycling look I we first Work the time taken It's capacity starting hub. to XXXX. ground. on said we yes, the the course, Cologne We is decision of that reach investment The track. we the had the of in what

the of at course, alluded at Houston concepts, that now leveraging the refining. technical that looking the have the necessary it, that are is capacity, a as in and on I we mean, the to And bring sites, slides, by hydro looking point upgrading, refinery our the upon do at, we have to in we from of double treaters to work view

this right. final build. one, that you're year, next then say, not decision So I takes would mean time year, I and but it investment to

be agnostic. meantime, is will are doing up we we as, in said always what But -- remember, technology the are also working we we

together work with on advanced we side. the different So recycling partners

into either upgrade of that can off-taker our directly crackers. an we plastic oil, steam or as So move

from possibility us to continue gives the with marketplace. polyolefins it So the the grow perspective, in that recycling to advanced

be indications that able not to our targets. I have would we no So reach

confident. very continue to be We

Operator

our gentlemen, line comes morning Stanley. with from of this Ladies Morgan final the and question Andrews Vincent

Vincent Andrews

a done the is just I working flow more little quarter? ask there Or come going build? cash we on are forward, in with capital bit Can the to probably of second that the

Michael McMurray

ways. the Michael. X Yes. question it's probably Vincent, Well, I'd answer in

that's in get think the second things consume I hope half But But us be material? stable. said, a better actually that when to consume I quarter, I relatively should second expect bit. don't the we anything for it

Operator

Thank the comments. for I'll you. session. our turn to question-and-answer Mr. Vanacker that back Ladies gentlemen, concludes and any final floor

Peter Z. Vanacker

our questions. course, Very But Propylene everybody. our was Oxide around I little missing business. business, good Oxyfuels a business, Yes. and Thank of bit APS questions you, our

work oxyfuels, highlight season, driving Now view. doing is for always good making me and fantastic let an businesses. these as which, from I mean, the to you in we're progress, is a very I point We're mean, oxyfuels team that good of all moving, of an know,

to I'm of leadership of good for in have indications transformation in how is demand also and is, by footprint also that seeing remarks, we in low-carbon continue prepared up, as see goods position we I low-cost oxides. on which business. very our that propylene course, And our durable are APS We the early going pleased, said track the

Our Circulen these level, win has or we looking at. rates progress. And are or service things that making fantastic are seemed

basis, being global that, especially top of on course, yet. despite, certain not with at goods, durable pleased very the also So markets in a level

those growth. So mean, it is sustainable very markets also when I continue to back, promising

forward you. coming long-term safe. as sharing look months over well the weekend. Thank We to on strategy. make progress have the thoughtful and great of updates all for course, questions. hope to our a you thank And continue all stay So we you Stay we

Operator

This you. conference today's Thank concludes call.

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

LyondellBasell Industries (LYB) 26 Apr 242024 Q1 Earnings call transcript