Eastman Chemical (EMN) 26 Apr 242024 Q1 Earnings call transcript

Company Profile

Participants

Greg Riddle	executive
Vincent Andrews	analyst
Mark Costa	executive
Aleksey Yefremov	analyst
Patrick Fischer	analyst
Frank Mitsch	analyst
David Begleiter	analyst
Jeffrey Zekauskas	analyst
William McLain	executive
John Roberts	analyst
Kevin McCarthy	analyst
Patrick Cunningham	analyst
Joshua Spector	analyst
Laurence Alexander	analyst
Michael Sison	analyst
Arun Viswanathan	analyst
Salvator Tiano	analyst

Call transcript

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Operator

Good day, everyone, and welcome to the First Quarter 2024 Eastman Conference Call. Today's conference is being recorded. This call is being broadcast live on the Eastman website, www.eastman.com. I will now turn the call over to Mr. Greg Riddle of Eastman, Investor Relations. Please go ahead, sir.

Greg Riddle

Okay. good and and joining you Lydia, us. you, morning, thank everyone, for Thank

with Mark CFO; today and the me On call are Manager, Relations. McLain, Vice LaRoe, CEO; Executive Costa, President Jake and and Investor Willie Chair Board

our Yesterday quarter release XXXX filing. first after X-K we SEC financial close, market posted and

remarks and prepared Investors of in slides Our related our section the the website, www.eastman.com.

I'll cover items. two begin, we Before

release, materially. concerning presentation, news year the quarter or Form with call, our filings our results will the slides preceding be forward-looking factors differ SEC, plans results expectations. filed this hear of will XX-Q you during including XXXX. future to XXXX statements and First, first and be XX-K the to events for and full prepared during the Actual first could or financial and expectations Certain for our related this remarks in some quarter are XXXX in Form in filed detailed

excludes unusual the first excluded and financial items, certain including release. XXXX of other description Second, measures news earnings available in a are noncore associated financial results to reference items. the and directly GAAP and quarter presentation disclosures, comparable most the Reconciliations adjusted

remarks posted go on As accompanying will website and the we we straight last night, slides our Q&A. prepared now into

start let's first please with Lydia, question. our

Operator

Our question Morgan today first Instructions] [Operator comes of from Andrews Stanley. Vincent

Vincent Andrews

side. iron of the think like scope the some to and could sounds to out talk you committed forward the bit timing be? on what cost project, customer ask but France going if you you could on have still the Mark, I a little delay issues they're about there, It the might

issues what's we are So that of what And timing resolved? both be about? type your will of confidence talking delay those

Mark Costa

lot operating and DOE we're for confidence. a that incredibly the Pepsi we're works engaged gives platform, us excited about with question. proving the Overall, of the customers grant a excited view first long and also plan, out about have technology of lot and how excited the this circular Thanks about contract

continuing dealing going do And regulatory to there we inflation believe on we're of we And and is attractive there's the work where extremely an for prepared are do investment. CapEx, number market sort how to we good in working But manage and the two with mentioned structurally, market be needs a There's of that. uncertainty good remarks. issues always sort CapEx to to feel can we long term, just with about the that in getting we the it European a the be serve.

comes EU customer really to and down contracts policy. it So

else policy waste of a packaging is in world the address policy and everywhere of what includes we packaging world, been far And drives the of I'd say that ahead market recognizing brands, carbon a the European this suppliers, do that carbon both recognizing that issues that to and lot change having waste, emissions. the climate also like a Union also have problem the the has got wanting to they've sort aggressive and on of which

has on some but rates what cetera. they've it, of definitions do EPR material got XX%, that reuse at aggressive in high taxes everything the get targets be recycled. do 'XX very Europe, And like all help sort a people recyclable so -- being reduce, required still focused year we of and how this don't being really comprehensive, in And that but is that policy XX% they it's who beverages recycling goals a polymer, on next quite content finalized, in is local of developed will et problem, strict

in policy headed think, makes and is I And so all be sense. that, to

go be food grade And from problem to that at as up XX% to that created from some be content a targets. is the to XX% year, as material they can as of to brands achieve level. they included. struggle WTO to They've back about that well imports. year, achieve come made year And the got the uncertainty local was next there there's bottles this changed some around everything recent to will you allow how at PET issues so policy from next be recycling requiring pretty there's to But one recycled they're significantly change they imports face which on only especially

to import really issues around a huge what consumer equivalency for there's how amount as really rates on well implementation still requirements. probably these as for from view around and goals creates it's recycling achieving most of Now both complexity, policy right? of made but equity very the and these trying it a imports, imports And complexity standards. as it lot -- you're of of as to would being high And using that, a countries point of difficult when the understand in and bunch they brand put of would a make restrictions sustainability well qualify all it

China's increases the recycling, bring a The violates a Because imports problem. demand locally which is solving targets, up very recyclable recyclability incineration, see to European replacing country, material you're to Union. consumers when you then problem. the want emission Union, local recycling considered in into recycling problem. want carbon is your also which rate the which local requires the the And high which address European for waste They goals of driving don't to policy be also

brands provider We're it we some uncertainty of their to to commodity the getting solve back why not back contracting circular and goes So model we're this in creates the waste a business. business to the in problem. this to had really plastic be service

told that sticking take-or-pay would provide as around we're stable our you to So margins. long-term contracts we we've guns

customers, working slowed down this so And context. how highly market these still structure the this, to contracts we're engaged with this still but has discussion with much on very in

recycling material because it's because use of performance keeping won't targeting recycle mechanical I'd that mechanical degrade we are without And also package. anyway can't to the of sort note that lot requirements work applications of chemical refreshed. going recycling in long term, it a even

get this a and to contracts facility the do. getting market requirements is that very place our we in we've our around milestones We to we're structure. like So should built, stick in confident you we would the but believe got told long-term

Vincent Andrews

cost about as side the what still on seems And that Okay. It equation? the well. on of like you're working

Mark Costa

out chain I everything equipment, cost think, issue labor industry. supply et the has I has inflation, from mean our up been project for every of an to seen The that driven in cetera. I've crisis there

projects So some had to it. have all of amount escalation

we Longview plan plant. the to how capital to developed the have it be plant, needs plan on get have down a on good and We the where to capital to get on a the French

doing of But a going to some take it's more of the work on little that. elements

we're that a that working we these pathway while so to manage we contracts, on taking reducing extra we're to time feel that continue working have And issue. getting CapEx. But the on

Operator

Our next Yefremov question comes of from KeyBanc. Aleksey

Aleksey Yefremov

degree to help in for load just applications? could follow Mark, you this, the do maybe to Kingsport on this up idea facility delay you any France what have specialty

Mark Costa

lines PET. and well we the from the Today, So both specialty built, flexibility. of have we different our Tritan the flexibility have to polymer PET as value. do products. And how how manage in ones a to we'll to of lot have it That's optimize we medical beauty copolyesters France make of line as all in every Texas we we the project,

and the optimizing and mix. of very doing always it. So value we're to That's our going heart good we're model, at business

of we really So specialty sort in matter built and that gets global sense, as between doesn't optimize value We'll PET sort project our our first. build it which of sort of position. out

focused much on The already specialty first plant applications. very is

So work on extend we'll third into Tritan, first capacity and plants. to into that expand and things be levering the as get a building on on packaging, and second different the sort working cosmetic packaging, into of into the running applications there's while plant we we're variety we it And up. up and of driving shrink

so And to Pepsi PET, on the portfolio. specialty and built between Texas we the value out as have we contract which gets and value we'll maximize plant with France, between whichever optimize build first

Aleksey Yefremov

in QX. guidance, And on the nice annual a beat

in press year the change full same? more it else? Did conservatism the is lot release. anything in the than a strong raise keep the of details year? rest guidance start the a have You the But Or of in the year, not to why of general, anything

Mark Costa

come to had It's latter. When frankly, which the came industry QX driven, volume back better more us and last because we had -- our was the fact we it of gives the the element generated volume for in specialties, expected, last the you that the beat of had than the we're confidence, it is highest key proud value year, portfolio. of challenges is the in very is which that back see where especially whole year,

that. about good feel we So

reason in upgrade a the we're guidance, out of we look macroeconomic the range uncertainty CI lot lot that confidence you we AFP, AM there, main it's and of didn't as But And at confidence -- every we're day. quarter. uncertain. Fibers uncertainty first living doing There's geopolitical our is the have always is clearly, and better. with all a in a little have

forecast, really which back not believe year. also getting And demand fundamentals wanted an to that and half, the this get the of neutral. worse would our get right. upside it's our the We're to the not underlying we better of We're -- going the in is stick fundamentals January, projecting We're year in projecting forecast. half in is into half to to back We deliver this better will is be back in economy-neutral range. approach saying

sort of it's at a But we to then forecast. of midpoint you concerns to be If our little there's I how some have develop. geopolitics, until see things this risk there's just the prudent stage, about -- cautious think

Operator

Fischer of Sachs. comes from Goldman question next The Duffy

Patrick Fischer

us let's to premium give a around say, how like? stuff some to breadth that you've for couple the Can running, what's of kind feedstock you update the things some now? like through? here the over you an able details been on been next quarters? from of sure the just plant I'm you the it just would can't. Maybe run But that's running month What's plant's expect and how more ramp of looking methanolysis

Mark Costa

earnings Sure, question owners, facility, first recycling be generating really largest growth significant and great excited a just world's Duffy. problem. we're about our but chemical to we're possible, having and excited pretty this get It's that environmental show the not and in to up what's really for This in world running. because solving the will plant

that is pretty And plant. at a spec the and It's material very front end. with back we're of plant sort the going into on we're the the serving and our we're out look And and material it coming technology customers. amazing you garbage when really excited complicated of on-spec basically

start nontrivial compared to to you're asset. if is commodity it a So up building

which works, can we chemistry news that question continuously. that's always functioning as is people was fully confirmed ops good that process working. had The the have unit run can think all It validated designed. and I the we confirm biggest the are that We've

sort So really design we the good plant. of the feel the of structural about and aspects

just schedule as The certainly front. been run we're challenge reliably. And we on really, on prepared mentioned the about behind on has And remarks plant that we're weeks reliability. still the getting X focused to in

haven't a moved actually capacity the feedstock a mechanical we into So broad slate of we've lot up ramped addressed issues. these some until or

issues all with do mechanical chemistry. issues. nothing the we're to It's the facing So have literally process

the We all addressed those installed beginning, improperly equipment. of of in leaks construction those was it actually, this of most and errors, issues -- we've stage. at issues believe Some

supply of early more-than-normal have equipment of They're wasn't sort This slow peers equipment other all the globally where of crisis. just failure kind of sort unique of as We all challenge sort we're them. pause same been like as address little you chain down to see in pieces simple us. instrumentation, sort not some made equipment. having valves some our hope of to but the would there's we is well you and as they these to of issues. dealing solve, And annoying with as of just to Then

completing cause total feel actions quality issues We We've And of to mixture assembly, root learning. issues. address a close some on analysis the that a issues it, to clear more all on some especially we're a understanding of those had design quality complicated. equipment, some done what's operating need pumps. It's -- and we is have a that. of we've little And we reliability causing rotating very also and very

running. from say of we we're view, mechanical I'd plant's at. where feel very about good So The a point

the out now expanding right And we're priority doing. of in Our and is which of try sort issues. phase customers, ramping our just slate serving to up production those feedstock sort of we're

and that's of monomer op called is the clean, no of DMT always what. the XX% the a But plant matter

the which part viewing EG, the process of smaller plant. chemistry sort of is is a So really about around impurity just

So supplying that is customers material, to their good not we this feel because this other very as close ramp projecting year that test of we plant. up, we're demand about capacity

And to served them ways we've of plenty and so keep got supported.

out So we obviously forget the achieve $XX but feel we got million how having challenged a little slower a there about more it year. It's we've we that had as can still EBITDA a that pathway. good start, for with the of we've

What well I'd now we'll be which up steady say is progression start always sure is far through we're mechanically what doing the doing as to was as state you make ramp our plan this to quarter. fine, goes, right feedstock, a everything run broadening then as at as next do

quarter that we you second tell to call. more to get lot a have we'll the about So when

Patrick Fischer

in like has over obviously portfolio? couple unit just bigger propylene, whole inordinate last of lot Maybe take a been see that Great. quarters. a do a the seems You across impacted your there's your number as derivatives. of picture, positive negative how But it you the PDH or of an then And business? market, issues that make

Mark Costa

show derivatives Well, that first and but going into sort as of as far AM. the up as goes, the AFP in CI derivatives are as well to propylene value go foremost, predominantly are there propylene

of a the across parts there's stream So complex. that whole propylene goes integrated

of outages question up, gets to much higher we goes in propane good we of than does us, and that's price us certainly spread. occur, move obviously. up, When that how through price quarter, expected. propane move the to the relative it's first PGP also always the saw PGP And that But a PGP saw of the for prices come but

of So degree. sort some netted those out to

come the way And they're as from the those we as PGP resolved. going quarter with bit been spreads to have outages like look go contract have off a into this quarter, first prices

it's and a amount and certain our there's nature that's So businesses up the where into factored of just spreads these in of olefin guidance. down

Operator

Our of Frank Mitsch next comes question from Research. Fermium

Frank Mitsch

color what's out companies in to targets. promises appreciate making percent going not on France. going going the about Mark, to year. I the to hit what that trying what brand reasonable that how are I'm recycled on there, they're do reconcile minds And they're they're consumer have believe by those And

government recycled they mandates they're like an is and content get sign contracts. you to it subsidies board yet opportunity or And before or on so with with seems here waiting something for

I terms mean part it hypocritical -- almost seems the their on in statements. of making these

the committed from that terms content? we begs are the it where given feel question, -- are don't how recycled how walking project? in work of away the now, things you potential the And if of you out way about right So they France do anticipate,

Mark Costa

we're and They're top packaging. making packaging highly of meeting addressing of rates think, regulatory And that's many goals above any policy lot every there. is one, their they're the content out of So have the way their sort brands on we customer of with that recycled a question with, content. recycled have sure committed that higher XXX% I frankly, to making

this important. So don't commitment think any lack I that know there's of is they

recycling, there's think won't packaging, understand is lot a in do recycling reality they lack a I this properly. I of in significant the and think and mechanical of in a brands which do of mechanical work most there's what recycling that world today, infrastructure even

necessary just So -- haven't the in both chemical need anyone is who thinks necessary. There's the chemical run I aren't and recycling mechanical absolutely for long that term.

of is PET the look if a data and is hit the affordable. very to go Europe you right? clear. in at And a the do and that's at is ramp-up for conditions, those that the how our condition meet of way into U.S. there's cost moment, their question demand term. short they So inwards been And manage The them targets

environment, out The real to right? really of they've actual way economics dilemma right? the versus waste So which that the for through is, what that on trash their consumers, want the recycling. consumers, addressing be local solution it as solve China's want doesn't to is European work to don't goal their a problem, is They which got you, problem, is

in confident our PET the requirement a are as for do of but right us for taking the long And of negotiate we contracts. within relatively sort just brands drive end, do so low a it's correct to are within how taking Europe, regulation these which available contracts versus now it's and these sort to sort they're longer imports of than going I'm and expected. make us to prices thing work the through where and rates will is is those issues, situation higher recycling term, Europe the choices on U.S., decisions? So the to certainly of focus waste what U.S. in just the they longer

Frank Mitsch

mean slam I I a dunk. appreciate that. it seems like

You for guys a town slower. get game in bit recycling, is superior it's and taking chemical seem that to little be the yet mechanical them best recycling to to which to

question. you something what you're about apparel. Just this you're is color something this expand products? can talked looking is unusable that And is that? consumer Unusable on a that? one other prepared In Patagonia where And partnership provide Is to little that the other that more with like recycling you it's apparel, remarks, brands? a -- off-spec

Mark Costa

Patagonia And a has It's by like take a far great is Europe leader program. back around story. the Patagonia recycling.

program say at is back, or a off of throwing vest their drop going end so active garment you're it it an and when instead store in it fleece it to your doesn't -- customers it's landfill. your So whatever with take away, we'll to have, up you

prevent to being program circular thrown So it's actually textiles a genuine away.

of It's a problem. huge or are textiles packaging. source incineration waste second landfills in after The largest plastic

anything do really comes they of environmental are anyone ahead and And it. forward-leaning else, their truly so when way they science on to it

taking and putting all for of they're them these recycling some them their So then this in Naia case, back it we're back shredding garments fibers, and fibers, into and products.

So industry. the it's a genuine textile for circle

So do it's companies. a program and expand certainly with other we to want

model circular Europe whole that which as as waste brands away the regulations buy on with of the things, story. fast round that it fashion the think is as the around on things next you great packaging business has is all and buy are coming this well there in new If regulation that the throw then pressure another consumer where centered well, here after out exists and waste, been

take this -- can take polyester fibers into ultimately Naia to polyester can textile to chips we fibers, the And into CRT or back fibers. make we the our back make plant the polyester for

opportunities So work us it gives to on lot there. of a

complicated when think soon. to particularly say to Texas is But side. are on technology, anytime the close be that's And the a waste side, about wouldn't the I extremely have footprint the programs. future XX% you not we a zero but with is compelling be lower has on model just These waste environment. [ high volume that to developed where ] that new to a build the going carton decarbonization almost carbon footprint, And project, plan. it

we're excited the about we what So can marketplace. do for very

Operator

comes Begleiter David question next Deutsche from Our Bank. of

David Begleiter

could time in the construction Longview reach if there line project, for QX, start-up? what's on and Mark, from the you FID

Mark Costa

have of coming Yes, plant XXXX. a sort the online in second half that of would

David Begleiter

would to And cost would compare -- Kingsport? the the cost how

Mark Costa

as we construction of in and improve the the lessons the to we both learned in cheaper sort unit to aspects certainly on methanolysis insight of that of because Kingsport learning effective of past shared calls build So don't well sort plant, better ran be a there's which as build. we we've how of gives make to more building The cheaper some plant right? in than have much a to different. much are intend operating into, the issues us plant costs plant, capital The around plant all construction will be the how now will to that of the there's the as lot lot

the than for of good a Kingsport in all could as steam handling feel about in lower a difference materials energy part to energy by we was into leverageable, and we that didn't out Kingsport amount we that polyester So But the of lines have plant amount. as plant add huge the plant already was the here well had and infrastructure that meaningful infrastructure the and of leverage coming place that infrastructure. is

or build exist -- you but doesn't adding France cheaper, the the part a when this and either of to is you're around that project, one those So of facility go methanolysis adding the polymer locations. to you infrastructure Longview lines, you're in lot you plant have need

turns to higher. So capital be the cost total out

DOE that $XXX we've the did in add that project, million facility this footprint to incentives scope supporting solar plant reduced XX% is we carbon to of the get great battery and for and this I got the extremely that Fortunately, helpful of paying inflation the grant, with allows mentioned. with us offsetting that economics thermal to

infrastructure It's steam then cornfield, French And leveraging Tennessee as the biomass you've opposed energy there's infrastructure site. you're so there, plant, sort of got existing thing. a same that's add the And plant more. you're having to at to building

project So support each scope quite building, both have incentives a it's in to -- and in a different it projects is what of it. lot is

amount been the government can. I incredibly helping through supportive in to makes they attractive We say, from French much the policy as have Europe everything on support sure sense full of permitting, as haven't disclosed well. has as make on mean France, but I amount it's the incentives, an

we appreciate enable all to done project. that their So support really that and everything they've

David Begleiter

could the you How obviously, I Naia. Fibers as Fibers. your on move top should driven if ask just Mark, read the through line rest trend the top I line And strong year? comments. of And by prepared in

Mark Costa

less the half the the bit Fibers I of is year of think in first half. back than that volume a the view point a from trend

earnings year. little year. pattern always orders. half of The bit the of It's We've normal. And timing less of a it's customer order across little volume back the bit the customers and be about is of business. will So sort the unpredictable talked just a this in

just that. it's So

to volume a growth. as obviously, and half. off textile will tow come provide back half little continue will the grow the said, in lower I will bit, the a bit just The be But earnings and first side

Operator

Zekauskas of Our question JPMorgan. comes from next Jeff

Jeffrey Zekauskas

depreciable life the the What's Kingsport plant? methanolysis of

William McLain

The each you that we're that honestly, of large think around the true just depreciable the facility. about building. would And be circular for plants XX Kingsport life, can years for recycling

Jeffrey Zekauskas

in Additives the shrink? the how volume volume in terms Did X%, growth Great. X%. the were Functional would grow? in performance & quarter, of where all some they the happens declined And in films? Which Materials, quarter? interlayers compare shrank And you of to in in of them what Products you up subcategories Advanced Specialty Plastics to Did

Mark Costa

nice Sure, Jeff, and compound question.

two got in one. segments You

on So much flat. other. of there fluids. Jeff. sort sort that, lower And fluid chemicals had bills first two then quarter. AFP, moving on down had parts And heat are offset we were the net into call and each of good care Coatings meaningful specialty I'd sequentially very those which And actually growth X%, and we mostly transfer

But had did destocking confidence unique just didn't own still thought. year. right? year-over-year, more-than-expected to turns last destock the they year, QX demand's it in was demand sequential They we relative this ag less -- its So to as much from as need about QX, which season down. ag to Ag was see so there's dynamic, out they improvement

So over. I would is in North destocking America, say,

our for on in residual America. our customers, some destocking, customers, going for but Latin us, dynamics is not competitive There still

But the future. of North is America. our on in there's to So to that end vast still majority the of focused an some business destocking come

the business good and we're how it feeling about ag pretty us, played for So out.

very strong we recovery AM, in Regarding durable a space. the had

significantly were So last durables sequentially, relative sort XX% of from QX. to They're year. up up

growth. grows. that a shrink a cosmetics had up and So sequential We was also in also sequentially great cosmetics XX% saw improvement. good Shrink,

a those So in good, That's still offsetting growth medical. on. some destocking lot but of that there's were of all going still

year auto very on globally, that there's it the channels side. a the not in we was as builds. Last down in films orders. part year, And as China, last of flattish good film was in a performance tough markets this basically sort against the And had China year but strong flat And loading demand tough of was comp. performance with being the comp with interlayer nearly

Operator

from John question Mizuho. next Our comes Roberts of

John Roberts

Sounds or moves EBIT at will the facility? out begin that you to Kingsport happens be above level And of like EBIT other on Kingsport get other average higher plant the to new spending still half. expect you and segment in what the Longview? breakeven here the Do corporate margins with second for as modestly

William McLain

Thanks for the question.

we've a earlier, about a on million an the reminder, we EBITDA. obviously, to as as investment other highlighted had a million. Just roughly I of out, and would expense we're point XXXX, in in pathway the net $XX incremental in $XX

EBITDA So consuming for about you the year. can think about roughly growing from XX to XX positive

As we've ran to longer a the other start that's little QX, the in us took highlighted, and it that EBIT over on here reason up view.

would Materials, growth you the in confidence to also range As second see we we provided our transition Advanced within into and overall. half, why for we EBITDA occur in that primarily the and AM the be the second half, expect mostly of that all that's

Materials, basically, is for look the EBITDA still in I Advanced it at full year. the X/X total, As in X/X other about

average on in margins both Materials. Advanced basis margin say segment above basis I EBITDA EBIT and On would it's the question,

Operator

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

Kevin McCarthy

Mark, was nice for guide, looking a Just it annual growth XXXX follow-up your I EBIT rate look annual guess, you're Advanced versus And on to a if see midpoint quarterly at the for Materials. at results. XX% I the AM.

the just your of dislocated So for kind lens, that zoom have out if couple last been maybe business. years of we

place. regaining and back a better traction coming into seemingly now You're

had you growth million. $XXX that years of years? Or puts view rate? for and of takes do couple of few where a the the is you segment how your What did likely next see You over north the

earnings methanolysis-related was got flowing you've some as just the discussed. Now into segment

the 'XX? So path for Maybe 'XX helpful. AM glide there how some see color in would do you be and

Mark Costa

Sure.

out back getting attractive a all, of very recovering of happy of owners. margins our attractive environment and on first of for extremely an extremely track track and have bad demand So deliver very we're Advanced Materials growth to on sort back to

When seen. sort discretionary and mean, demand 'XX clearly last worst markets, of destocking was X medical, the through in think entire demand year. except ever over of auto all very had end I like along the we've we that with in B&C demand great or you the markets low quarters didn't or be came for obviously durables At and whether off every destocking, the of 'XX it about how year market even destocked out we environment --

the So the significant. because was markets, were also those highest volume/mix -- value headwind pretty

this We're back, this guessing So discretionary in substantial is the in not last recovering way destocking pretty just we're versus going getting a markets. Remember, start improvement to, forecast guided, which year. as we've volume any for in year. market growth earnings end

look forward continue that, above So in any to this get we market we into for yet certainly were 'XX, and back right? you this as growth from we in grow where and don't 'XX have outlook believe So we'll year. XXXX

as upside that's stabilize recover. markets So the and

You've plant got methanolysis that Kingsport asset is high quite low not utilization the are where and just getting started the year. volumes the on this

$XXX you that's that just EBITDA got so and that in to $XX from 'XX. additional that take you've So there, of has a the lot fill-out upside million of million value that plant creating of still but can

economy and doing creating you've for this market. innovation circular that traditional to with forward. deliver in We've They'll loop Plastics Specialty And go continuing recycled eyewear do in growth wins year, our growth. they'll other eyewear in on driven got our the that as innovative that's keep growth parts got of renew model automotive going above companies. all we got We've

keep these get you've growth volume [ XX got going. different that above back sources of help all ] and So

chunk is You've will tailwinds leveraging new and this asset in us, got into plant, especially the which then year relative to come large a costs that. methanolysis last year with utilization of pretty that

say, relatively I things assume would neutral. spread side, the to would I on be

our margins we off we support bit. up an that a investment attractive will off material business this to caught line time level of got from energy prices probably to a the some with inflation. come costs bit coming raw in and And as how So in challenges over we to had are

leveraging you're an got those attractive all or a So assume earnings against I now contraction that margins margins about you the I expansion that we've I think wouldn't would growth. as in attractive volume would pretty say, and assume spreads. to create modeling,

Kevin McCarthy

some I What those? growth follow-up, do then broader just you share yourself to brief wins in see gaining rates? as new a relative And And market commentary Materials. Advanced think application your as competitors' cited are

Mark Costa

above has model because winning our as that's of applications been to growing you're well business been Tritan for material, Yes. copolyesters. relative some end always forever as The in other markets this right? And true

-- those wasn't set a I'll kind couple Their getting into applications just seeing a was One, bottles a on seeing China. Tritan, hydration They're of broader & So using examples. now first you give of their growth we're lot they're in of market for and growing Decker into It set tools. of really tools. a us. Black launch products. We're with broader expanding in and we're a Tritan with in successful

have it's We is the shrink packaging that's so not. products product, recyclable a new patented. That X where recycled product fully for a code historical were

we would just as product. value volume both content in recyclable lot So traction a more margin that's gaining more for to win it. with and add Obviously, recycled a us of

always the has that prior places huge we're of methanolysis, active there's portfolio is have that us winning in wins is all allowed as we capital kinds that top effort, as sort about we're growth. attractive and core we very So in excited remind to every and investors of a to And these of day, deliver our on and wanted innovation adding that. methanolysis of deployment and still model business much

Operator

Cunningham next Citi. from The comes Patrick of question

Patrick Cunningham

levels primary that's that, reconnecting and that -- the producers some maybe the I people came heard you You or paints restocking? happening potential from the on building geopolitical safety we're have that in from get first seem quarter maybe Did the to coatings improvement there's of know I ahead modest any be sense fairly here. volume the stocks disruption. confident of demand

So quarter in into the of first expectations that I'm if any just XQ? you've and wondering seen the

Mark Costa

point of Red has logistics would get to buy examples to where probably almost in ahead to into I'd say to customers can When you not or restocking, bit a on caused that answer an that's cause a I places, it's But know example. few Sea that on a as the some some your I going risk occurring. the of what's are on. clear restocking margin, destocking exactly definitely concerns few that impossible there's mean customers -- question. really

people I not come you, restocking orders little even some mean precisely But in what earnings I can we on bit way of of this a of where are know But hard just this noticeable at stage, tell bit call lack stage driver restocking sort at to seeing know I from think it's no large in We're growth. based not maybe to little it's way. or customers. of a our destocking, market is. a material really the that of there's what

Patrick Cunningham

from the And And scope maybe Got helpful. then on we That's returns just that simply is premiums? we the how price funding there expanded for on expect it. future? are expanded Or scope? think carbon additional this given you're would receiving Longview just should economic reliant scoping? the the about some DOE the facility, And offsetting expanded you abatement in for

William McLain

The payments basically question. a we series what the DOE an we along. to as providing based CapEx program, move offset negotiate is of there the designed, cash on for thanks provides investment Patrick, that as it's basically

way of So capital. at it payments a progress X to the across construction. Basically, be almost yes, offset the the I years it direct will look is

that got And about. up $XXX as to talked you've it's million, So we've matching.

this as about offset that to offset batteries, the green inflation talk energy additional is on the an We're that but that. X those think -- have as award, And next definitely will additional to the months. that the the exact lot well thermal negotiating over as it to a currently of we're targeting source we to of about as sight terms X we

project. -- have to the back on we're that than it's and XX% we'll greater confident So returns

Mark Costa

premiums for not on premiums safety, too waste is -- plastic think are and It's product to the pay happy really It willing environment to consumers, associated with it. I the for about sort very very clear, a it's really, in early of people tell emotional very they're has decarbonization. recycled issue content. like

they're brands with address and they're it. the not about happy so it, And putting pressure to on politicians their

Carbon decarbonization. clear get is are people exactly going what still to just not premiums for

there's carbon upside side cost we're things front, So I -- go forward to with of with economics. is start as compelling, carbon policies mean, it our this that to as implemented with going very associated core But a but the -- in any value see not the assuming are on we it's becomes getting that with we what think premiums brands. project -- now consumers as I are, the we on front that as

Operator

Josh comes of The question from next Spector UBS.

Joshua Spector

to questions wanted volumes. I on ask two had I

look quarter, I was it comp. be -- the versus to first volumes my on when So math, at XXXX, your easiest appears it

up were You X% year-on-year.

better So is, Do the the progressed year? versus how the baseline? where the year-on-year comp is on that volumes think do you piece first or through you worse do comps on XXXX

I of are say Thinking plans some a of there's Where the that, see terms in reconnection you versus benefit full or to core XXXX? you in for stronger lot related numbers. just would demand that in of year And guess, the your versus about if a the choppiness what's volumes improvement your a improvement?

Mark Costa

Sure.

through stable grown end call between of markets. have revenue of at modest X%, of medical, it's sort stable discretionary kind to now our what I whether it's XXXX separate to markets markets care, what those markets. portfolio of are personal So end to X% very it, sort The consistently sort rates, are easiest think cetera, et end and

quarters that a even to reconnected X, there destocking their sort X, played of biggest are inventory medical sort the medical is of fears which growing not 'XX being for of destocking this 'XX. because on had markets stable of to depending and the those demand true and being in markets. the and sort year, out, worst, again, was in ag having destocking But that most the they've in those market markets, of that finish was And there back X dislocation last then year

housing build data, We're construction as dramatically, States. discretionary at great. relative Europe. still a same XXXX, -- appliances, everyone harder it to markets, well, XX-year Demand in China automotive or looking the sales in in electronics, lot story. a cetera, see and et United knows home data in the at existing low to by also off is On is, not B&C but

prior extremely So challenged. demand B&C is

materials new When you important think is more world, because to home electronics, appliances, et of cetera. than the Eastman painting, sales all homes, about something the to -- existing more

market It where are back. from coming is to normal back very upside now and there. this but obviously, then from come that It's getting challenged. So to is don't what I year, that's we back will growing think

rate big At a Same of of rates replaced items a for consumers upside and of cars post huge auto, buying Taylor be cars, for big us. to buy down durables, be pretty there significant increasingly buying but will it interest Swift. the a blend comes there's some shift need certainly the semiconductors around is rebalance world. older point, cars, service backlog the there's now first demand thing discretionary gap to that material, of relative limiting ability amount And for people So the 'XX. When to slowing COVID. to seeing that back some to recover then with same to lifestyle and thing,

below they where to sort of are be. So that levels should those I well form still all think relative 'XX fashion in or one

guidance markets lack stable the a methanolysis, deliver starting some to you okay. and built, way is year, being value innovation-driven out is this have real as destocking, So of all of our look we at growth,

just certainly 'XX. are that highest but I described that there's most upside about tell unit our not that a of from which it's markets also a and I'm to per you lot challenged recovery in happen, margin going year upside And all basis. are 'XX value to is to places

as down, significant So went those it markets headwind. a was

to markets As it's a tailwind. those be back, come going significant

Joshua Spector

Are if single there XXXX, you together, the I two if down you with that. versus all? high I to considering I all I offtakes? mean, wrap are guess digits a I quantify way struggle just try for at flat? your volumes that Is appreciate that XXXX to

Mark Costa

look -- on We answer that at market-by-market that everything company a basis. a of integrated basis. for don't at and you I have sort

huge And sort it. Half on to going view upside revenue how high so of I'm quantify very the revenue what to growing. is Half basis. average a has that weighted is of amount not value. try very and And at I stable you the a and told

Operator

Alexander from Laurence Jefferies. comes question next of Our

Laurence Alexander

started kind around off the the plans see the -- customers the have increasingly that you're also cadence managing of two. is years? now the changing the think X hearing say, you progress projects sheet that next are that recycling you of you're available, that on and feedback over, balance from alternatives about making Given next consumers the you're and one you've way And X,

Mark Costa

to think don't and want just make I I understand question so. answer it. sure correctly try I the before I

in specialty core We the $XXX So million growing that has have specialty to been investments which CapEx business always call in part capacity stage. one takes I serve has we're $XXX plant million to the that that circular am have there's model, that, three core go markets maintenance, then -- of have, that, we you're always different all always how normal around the doing making -- to versus our on -- right? I'm we there's our choices And you then and to the how starting behind range beyond economy. repurchase share with we've capital us $XXX maintenance, this around make at much to got CapEx. When million in you range. Obviously, deploying

going do be on of the programs, how So stagger how CapEx of to top incentives right sort build And other? and two you Are net when those of each them? together. question France for you add of they there's Texas, a

to balance fund And believe we that. and we all flow place in sheet have cash a a

as that these would same So on and I just going both debt up end question. another. will way it, at or and the And projects contracts extremely time take I how we they opposed else. to to permits just if -- based on don't mean, staggered answer by getting everything think, nature, be just It one unusual to to we're do intention, to have start

we That's how work staggered some into analysis and factored be they'll all our 'XX. about through to So degree. 'XX

want to if know I Willie? add to that, you don't

William McLain

Yes.

through strong just So is grade that. what we're say confident would we keep balance can I that a sheet investment

guidance repurchases of year this and to that $XXX capital seeing $XXX on our updated we share expecting $XXX million as to $XXX million. of million, being You're million

any Mark always returning and then to our between investments then shareholders. growth and excess as agile cash bolt-ons, we've using And been cash outlined, for has

generate expect we our to continue allocation, will and to be that We capital fund disciplined strategy. the to in cash flow

Operator

from next Mike comes question Sison of Wells Our Fargo.

Michael Sison

a think $X.X add your 'XX earnings the sort U.S. ramping scale up sort about Nice like. up well, plus that facility in there can Mark, is to start longer-term you peaked an it above? if [ 'XX. there you potential in maybe potential of the sounds you back to year. when EBITDA of the is methanolysis potential volume, And 'XX, you billion or get I get about think ] -- you think potentially,

if is volume potential earnings does the what up in framing years. Just recover next the several

William McLain

our of start would about let $X.X we Mike, year, as billion. say, I This had we've billion. guidance is me billion with at be $X that's talked north of EBITDA. year, going last $X.X to what normalized, And

that. think Advanced there's As But Additives Products top million Longview adding range. And Functional obviously project we in think us we delivering the the and million plant, about done as focused Materials & adding that $XXX highly in $X.X with France to of on to date. we've billion investments project growth right that upside Kingsport and puts the $XXX on we're the then the now for about

that economy As Mark what now behind that's us. the to the from an market, we're a is on ultimately, substantially just we're in destocking And recovery leveraged highlighted, end focused delivering.

Mark Costa

reduce of proceeds count, off off If basis, sold the what because that EBITDA on it $XXX compelling sold you comp do look and tires million a we at EBITDA. the it's share neutralizing and historical adhesives we in of more in basically to used

significant an EPS So just the that on price much told you more to level, leverage stock basis. EPS the of and when number that EBITDA get is Willie you

Operator

comes Viswanathan Our of Arun next RBC. from question

Arun Viswanathan

similar a Mike I to here. had question

the think the it second So to you to $X.XX EPS, the the would in end. range, upper to about to your $X.XX path if half in and bridge that looks do about where land first to you're or on about $X you midpoint imply depending the like so on for the half,

kind X% or if of to so that's growth XX% line would $X targets, you $X.XX, that your next $X fall in for maybe year, EPS maybe And with which to $X.XX, that annualize to XX%.

thinking recovery target case, would you are kind thinking to we Do here? guys of are you that how from XX% mainly be growth? some the how see about the maybe volume about are evolution primary methanolysis? kind feeling is kind -- And that in X% and that some you are of progress growth Is guys view? if that of the where of in volume with demand returns EPS back and and you Or here

William McLain

Yes.

negative basically market the framed line. lens you roughly level the into timeline the which and growth it's the it that to it volume/mix and and seen at volume think since corporate fits flat leverage the that is think since XXXX, been I well, slightly we've I to end

combination of line methanolysis Materials the the half back that leverage that the With talked as to the with the that we how the growth. Advanced well we EBITDA in the the for of drops year, In volume/mix structure with cost we've for bottom combination and this had growth application half about leverage, back fixed see as facility. growth the

our into wins in as from that we'll there the at million Fibers. application have look growth another about and growth of contract on XXXX, well we we're structure $XX solidifying talked When we've EBITDA methanolysis as

this say would So will intermediate And period. we're And recovers sort I recovers, you stable space. at AFP. we as have in building in and ag that as and growth of levels construction consider trough can the

go the we at growth reasonable So is forward. XX% as midpoint

Mark Costa

this fluid AFP heat has low just an year. growth. of fills exceptionally add, transfer also We're I'd level

$XX 'XX, a market mention that 'XX would we not B&C kind upside. go of from have that million any as recovery We to drop clear to book into be to 'XX having order recover to

CI's upside in of AM, market. the of there's at lot there's AFP, a the bottom stability So in upside in Fibers,

point, some that spread at of view. a of and So start from coming recovering off point

combine get together ways that to growth multiple next sort of year year. there's you versus this So to

Greg Riddle

question one, last please. the next make Let's the

Operator

Salvator question of So our from America. Tiano of final comes Bank

Salvator Tiano

wanted [ obviously, see costs ago, ]. think import mean pretty of -- high away And months firstly, feedstock signed the do recycling you couple the and a from and How Spain, there? an ask I aside little to Italy which you France waste a company agreement as to far would CapEx with especially it PET setting as OpEx bit a about So project regulations. I and because

you will -- signed that So PET our again, in be could as because project and there -- the to to be for France does the mean have -- with this as Italy feedstock. far that so -- may And elevated agreements why supply more with France have that, get Europe domestic because that recycling, secondly, things of of OpEx single-stream ideal go you haven't still it location. far firstly? And

Mark Costa

sortation project is France, this So the of is this It's opportunity to sortation. collection the a large-scale do, wider thing to range part of Europe appropriate and really aggregating is right? improve they huge feedstock to a from why collections a than France infrastructure in project. state the given current for support want in and just and

our because that factored we France, is develop get mixture XX% of with last approach Currently, of in we contract, have work logistics the Germany, least they marketplace, closer in. XX% a the and municipalities sort local not built noted. to at to under about for signed this to is you But the of that's want were feedstock across The our feedstock infrastructure. as as France Spain, government which the so all that costs always economics into French

for signing significant not of the economics we where get other because all in up we're we're the remainder. is that focusing that's of want sort in, on logistics how more kg plant. built that's France go. for per to But actual So cost this last why to That's for out from more places, any and not

Salvator Tiano

year, I Okay. to about is because Perfect. Then thing expect sequentially. for the clarify X% QX down volumes, this want other what do Fibers we was

in to about similar QX talked half. and second down You then being another QX step

to don't think annual what imply very expecting. pretty seems we were decline, that So much is which a I big

William McLain

of we've front, the intermediates I date what some would -- call would we volume down, grow there's talked expect only and say on volume, would expect -- we about be we Naia -- to provide expect, the that's I'll and flat it, we where is flake, the declining. would the to but that and On modestly growing, also as

Mark Costa

gets doing last you numbers -- when and a full On you're is on year when little at basis. The look flat year volume looking it a complicated year-over-year it year relatively to full basis, a for at this. sequential

Greg Riddle

Okay. really Thank you, and a today. hope weekend. you for us I you. everyone, day have a great Thank joining great

Operator

participation. This your call. concludes today's Thank you for

may now disconnect. You

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