Eastman Chemical (EMN) 26 Jul 242024 Q2 Earnings call transcript

Company Profile

Participants

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

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, everyone, and welcome to the Second Quarter 2024 Eastman Conference Call. Today's conference is being recorded. This call is being broadcast live on the Eastman website, www.eastman.com.

We will now turn the call over to Mr. Greg Riddle of Eastman Investor Relations. sir. ahead, go Please

Greg Riddle

Chach. everyone, you, joining thanks us. Good Thank and morning, for Okay.

with Mark CFO; today and the Emily new me On call IR our are Investor and McLain, team, Vice member of Manager, CEO; Executive Costa, President LaRoe, and Jake Edwards. Relations; a William Chair Board

SEC posted closed, Yesterday, quarter financial filing. after we market results X-K XXXX second our news release and

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

X items. Before we begin, I'll cover

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

items, of the in excluded earnings results associated non-core Reconciliations items. disclosures, unusual and directly exclude a release. financial the presentation second most including quarter description Second, XXXX and to comparable adjusted other in certain and GAAP this are news referenced available measures the financial

XX, is item. Tennessee. circular we our Kingsport, there the more conflict a night, here Tuesday, for that posted dive After aware on November one we I And our materials economy became last in date deep chose

we'll We a know forward. when are you we've let on and path currently through decided alternatives working

our first for questions. ready please question. are with we start that, now With Chach,

Operator

Patrick from We'll now take our question Cunningham of first Citigroup.

Patrick Cunningham

modifications preparation in expected first, little you methanolysis. have equipment take? there questions XQ? some sort downtime much the clarification just there? How XQ? to give a more -- with And you Can was in on on of just What downtime Maybe did issues. a detail just Maybe feedstock any

Mark Costa

of been journey sort feedstock a with plant. talk answer everyone. the love specific then methanolysis give morning, and Sure. And where I'd I'm we've we going on to about of Good you context question. that to are little

be project world largest chemical made this we world showing the We're recycling and what very on tremendous this with to facility, what's with we've really when -- that project possible progress in challenge recycled the excited to and and comes -- it content face. the dealing world's operational

we the very rDMT. with actually excited We've are Tritan wide plastic highest the we're purification making food-grade produced the of no with performance We that through And on on-spec this XX% concern making standards clarity, materials products of make, these process. from getting have on-spec to And difficult product a that's of the output most facility. we're specs. range

our and a great and by plant garbage. an a So And accomplishment job incredible in product series this a challenges. of overcoming operating very that's safe from team

We of have had successes. a lot

we're product now. on-spec As said, I making

We and are Mechanical recycled doing all to food-grades back send take of landfill. hard this recyclers waste. the can't with

that our prepared very as rates. in of full there's rates. and we're XXX%, made week mechanical to recently us the been sort and just and change actually, up to limiting one ramping small thing we getting fixing this mechanical of one XX% issue, running mentioned, and We remarks they of all unit the run ops, validated high sustained And the you're We've units can around when had, I together. at rates all

quarter call. mechanical on issues the reliability have in we're a the we first you shared of facing process of the lot improving We with in the that made progress start-up that

the much effective, reliability and a we've higher variety actions we on has across when plant. instrumentation around failures the took especially of pumps. That corrective early valves, equipment, seen So rotating been

the higher and of rates to is a hard-to-recycle moving So broader next set step as now feedstock. you said, we're

issues. plugging some encountered We

broadening in hard-to-recycle different material we've doesn't of be the But dealing alternative front using that the from clear, bottles spectrum life. plant. made some of plugging true issues the be waste our into food-grade types back to So that of this an and of of mechanically, strategy have we've can't been that with been beginning process, to we HTR encountered recently, this

I of sources want that on, was that to It's impurities. really is clear chemistry. of and feedstock process fitness-for-use not about it be some we chemical preparation to a of the understand It few material. realized in a what not took few us the was this aspects going about weeks but

straightforward with that we're was address understood of feedstock. that of once the we few sort in sort the and which optimizing the Fortunately, feedstock relatively of issues dealing select a some were using of form to them, just waste involves non-polymer sources

QX. changes. ramping very We're and change. And we've will with we QX as those very, run rates. at as all and implemented go with facility these all confident Also hard I the changes effective are we'll running through said, up, So now be the be full

a So waste materials this This is that plant, can been into to turn feedstock. note concern garbage that polymer of in is complex have journey. the doesn't incredibly would exist any I has on-spec take it thing and an clear, that

advantage months, a process. of we've to that there's purification I intellectual learned And X is strategic and months how of So a lot we've gathering lot property And investments us. manage lot frankly, the a different feedstocks. for through huge over in last we're think of a all competitive made these X startup, this

of this the the and enabling the back look our technical plants I to have expertise of in to can't I enough at trying team of power on kind have and of I can't challenges. to we even these scale success throw and As imagine of depth it, these success. us without reinforce kind just kind technologies build

team in back these great up the how and volumes as overcoming in about customers shout we feeling We're moving to of serve the the a good to out excited So very year. things. half forward, we're ramp

Patrick Cunningham

Great. quick one. And then maybe just one

right forward Renew. with inflationary on slower leading time comments of the made squaring expansion? maybe some to the environment move Just Tritan pressures you ramp-up current and to now the is macro the of Why

Mark Costa

Good Yes. question.

So as called in durables, of amount everyone goes when But are be lot with out look to industry volume weak. think has that, significant we of has market, where at of a been market that in a with end see the in return destocking. did I you continues consumer sort we Tritan It weak. that the of the

it amount high huge we a going took very and will of hit that destocking. 'XX very are and back, forward. with that go associated be certainly So the That has helpful the was this come volume year margins with in

of of proposition also to the just lot value Tritan. traditional wins on We have continuing a

decade. its it being a its its always we've applications that's So clarity, when safe over And driven places on chemical resistance, top you of back for look product had end engine at winning, that volume a area of resistance, tremendous of gear the propositions, year. us that's compelling product in in in destocking good We're of is this on momentum. those attributes the that's growth this variety wins of a giving heat a value BPA-free, lot

of top now brands, that's for we're content. that, on layering And recycled on really a then And important. lot of

or Nalgene, a a like recycled with way lot and enhance cetera. are a us L'Oreal, for claim LVMH CamelBak, using long content of growth, that product We P&G, time to drive et customers as Estée offering have their this that been volume Lauder, new have

or customers in had one seen who we've are using You've another. the it all of form the icon chart

doing run, proposition. then opening value wouldn't content have new leading to our available product as a you to This serve for supplier really to -- polymer, is airlines trial have And product for really in of foodservice, have you products Decker, people about, told & recycled go tools. a claims. cheap Or broader been is deSter, line. is them with And like the and up housewares expanding value or the with compelling and also a to and very originally And seeing exciting going have markets we for that we've proposition. us this what's well which content you not that so now recycled foodservice-type Black a

and made lots Kingsport. return here are engagement. investment volume Customers in expect this a premiums we that paying So the on we've to make of that

as capacity a in we're short the the product -- way to year to that moving that we sort So this go and And year, we of the on of third we as volume see year, we the that looked growing so into next online line market, right? get need don't additional keep this next so at build as for quarter-ish business.

have we recovers, additional a the So it's tough just volume good serve. about be to Certainly, economic feel when it. we that But time. will market

this we is right the like feel time. So

Operator

The of Spector is next UBS. from question Josh

Joshua Spector

rates prior you at A questions. of quick methanolysis. back now follow-up set you're at say running that the higher on Did

that So the yet issue determined? resolved, to is is or be

Mark Costa

change We higher plant right limiting in we just we're up back of ramping of implemented. sort process the middle in up of we rates mechanical to -- that rates. that actually those towards small the ramping the higher rates, was And now. We're made

there not we're So yet.

Joshua Spector

And point Okay. And specifically, around Tritan your Renew some adoption. just and slower around another comment methanolysis.

inflation a on of on any that about applications? higher-priced level, perhaps talking Or their read-through consumer to referred buying goods? willingness is a you're You feedstock for And and buy being at the I was their factor. to curious, that comments is customer higher-priced spending? or

Mark Costa

Yes.

were and cosmetics, gave very in as I'm last it buying as So using premiums, customers, answer repeat year committed a this certain the and all markets. to Tritan. you, space, lot it not we durable but packaging, accessing year, I to just there they're They obviously, we're going the to buy are out have new of at interested well continuing that

is So there the demand out real.

the I everyone a issue tough economic that The that in we it's faces now face think right industry environment. really is

connected right? sort is markets. and We impacting inflation quite demand many of have B&C. very stagflation, weak still some durables being to And version discretionary of have consumers You in

challenge, for And not demand's that X all very been weak, real. over duration. see It's just it's weak you when So years that's it's now.

weighs that their companies economics. so on And and

now. anyone committed, cancel seen also very they're while their structure we haven't managing cost a everyone like focused right They're So program. on of is sort

that with rate we so on programs And the bit these won up we've than going of a which slower volume some is customers the they're at thought. ramping

we've in sort on that's there X/X sort More rates adjustment of made about the adjustment think don't incremental the sort just conversation quarter of To the we year. modest I as a it work But in impact of last to ramp. had of adjustment in made down $XX run expectations cost be some has million through any modest we clear, than year million. is $XX of our EBITDA second part around that a the different to overall next volume issues. is we of

better we're we now own for looking When in ways destocking the applications, the with number fact that propositions is their will marketplace. The create to growth stable just like of end how Companies about thinking those in grow so And own now at value are to they to we now trying market well? different at there. switching are least and having is do create our wins do I us. brands look collaborations are the the behind growth, as that and be think

our this the year if we EBITDA EBITDA to end So like $XX to on million the wouldn't that of didn't a still starting track of year. completing $XXX by we go volume incremental of coming. feel Otherwise, -- we of Tritan see we're rate line million next be from to run

Operator

question Fermium Research. next from is from The Mitsch Frank

Frank Mitsch

Congrats on the Which, question. the Mark, beg beat. XQ does

what arguing XXXX, was a given And in guide. but the I thought upside for midpoint maintained to range the there the been narrowed the of may the possibly it? was curious, midpoint? against raising XQ, have just You

William McLain

Frank, you. thank

As as and guidance, year. as where AM, improvements segment at on we the modest midpoint level, well focused view around the we decline you highlighted, had midpoint the the start we of some of AFP at ramp our Mark's in in of the guide about it the the methanolysis of there. Also saw midpoint the benefits already the as the of keeping think obviously,

point So think the growth driving about year-over-year, it, XX%. time. as was strong range appropriate we're at we think Narrowing in we this

second it driving We're second factors we methanolysis As growth. from half, in being the as And we the we're well expectations. started position. $X.XX we offset again, strong our with our And the the here. year, QX it's in the increasing primary doing doing there's think, own beat demand by the in no of significant a enter reduction

Frank Mitsch

of you high versus can towards drive factors or guide? end the year about that full the end Willie, will talk the low the you

Mark Costa

Yes.

year on Frank, So variables in demand. for had factor when had the results that, is last impacts think you true how the 'XX, we That's about 'XX. the -- biggest good we through

And so question it's just trend. demand does macroeconomic a around where

similar I as about think at point last That very but to this out we expected seems neutral sort end at beginning with market be of the to approach from of destocking. end we being playing benefiting went out the stage. view, of sort markets an year a of year from

the within obviously, upside. given if be that be But worse, economy will will the gets that So there the range we've that's the I gets think If better, economy you. main some risk factor.

price on mean, good specialties. amount and excellence commercial manage our track to sort could relationships Cost our olefins about across we're the in in that's management spread feel a I volatility and of predictability and feel sector. certain we in some to there's Obviously, get maintain you confident structure, our price/cost very much acetyls our our where CI costs. of

model, had own how specialty this the feel the circular that's growth economy. year the element the is the we application that in of of the we've So sort our creating good about We plus traditional all expect material lot really with platform. growth about in we're a wins

Frank Mitsch

Great.

midpoint absolutely stand no be from economic assumes we to here just guide the So the clear. as today. of change activity The

Mark Costa

be That's markets, assuming assuming that's built demand every to there's true -- been discretionary end consumer no the correct. relative it's B&C, in We're durables, year, that quarter. we've market how forecast our in and whether autos, to clear, last improvement we're

markets, which X%, and sort first treatment, the are of already about expect we a we've year. have stable do in sort of -- half year, markets, in and kind of little we revenue. of normal in care, to second the that personal pattern, it, modest there, call of of its bit half cycle stable is continue our markets of special The growth, that the in seen half Those ag like more water those X%

back declined. our a margin destocking you volume half from growth. it. right? that modest variable is million we hit to end has Half has a But have last mix market volume completely had $XXX of of revenue told adds year theory lack 'XX So when in growth We 'XX our confirmed true, lot revenue very in of we the no that and a

call that And have about in that, part as half in in come of guidance, the we it said, destocking. of a very we and X/X, of And there's books the much XQ. when would seen see first our million that lack $XXX back order

of playing that's So built that midpoint of our sort and guide. where sort logic is we've out, our of

Operator

Jeff from from JPMorgan. The next question Zekauskas is

Jeffrey Zekauskas

planned the what's is clarify talked shutdown you I million. chain, a in million that the was chain. hoping maintenance related on quarter quarter? is that $XX of or of the And could acetyl $XX in to acetyl you going the in in that about fourth third higher half which acetyl, Is

is talked You divestiture when Or not? divestiture when have about to forgive Does in me, does divestiture about? the What's unfavorable that with acetyls. the or do the the done? And does that close? -- already price/cost

William McLain

clarify. to Yes, Jeff, happy

would stream, turnaround. So And shutdowns, in again, as about QX we is think acetyl that then -- planned our be our half in which second QX. primarily represents about half, first half. cellulosic half, the versus about and then higher is And QX polymer

also last is of impact our has about headwind the our roughly a a call million so basis. as key as transaction City divestiture it combination headwind in in guidance. think the was Texas highlighted that on as closed not the I'll year-over-year That's we've well we Intermediates that Chemical shutdown year, customer $XX the Yes, business,

Mark Costa

side, divestiture Jeff. of and sort side on the the that's So cost

are the view. On and on. lower market to dynamics challenged market two year continue of acetyl side, point from One just the going margins is there's a be this

to model we're And market. how product business, our part as the bit a shift second to we then acetyl business acid taking divested our is, had the we in

acetyl Texas are readjustments have down And just in of output so some longer we market. when plant we Kingsport we that no how manage out in our and and costs how logistics in there's the working

those X of sort hits things are some economics. So the to

be also one line next back come -- logistics and And customers supply the obviously a of serve chains will sort a spread sort for will onetime year, lot out. as to of The of them modest day. too, costs tailwind the bit reconfiguring we a of

are factors that's sort that of business. acetyl going So those in on the combined

anhydride -- predominantly are sorry, we acid that acetic our note would production. I'm I acetic in

that's produce some more the other how should will that to year acetic acid us paying good for to relative into. about tailwind companies be you that to So next And of sort we relative market attention the be market feel market this year. a

Jeffrey Zekauskas

Okay.

about a that as does $XXX You have hundred rate, $XXX run that's an normal talk line out year. can extend in roughly. you of million between the to And the segment in Other the difference old now days $XX a time -- and losing new million a days? $XX couple lose And just the million? million million in year that used Is

And year-over-year penalty? acetyls, what's back going the to then total acetyl

William McLain

Other, to major to of million that the question we On was regards Jeff. 'XX, about headwind. with 'XX from Okay, $XXX obviously, and your and in that resets one as roughly talked pension being

So the I would as highlight accounting that outcomes of higher rates. of interest one

costs as of in preproduction I'll project it, the 'XX and the to, and the connected the saw progression those. we've regarding more start-up methanolysis you that's back And half through increase. platforms, call and circular timing that our Also, our increased

Other, preproduction in online you in going and plant million you expenditures here that Kingsport and saw in almost roughly into with As from is inventory. reduction producing coming QX, saw our methanolysis $XX the

obviously, decline, tailwind that the So as interest factors could I think see about the future. it as a matter. be we into over time, And rates

it, projects as I pipeline. the situation, It's just million run successfully say the well us call current, with $XXX I'll macro rate. through So wouldn't as is the progressing

in see Materials, that's will products of And some you how as you'll see results cellulosic these and also now Advanced well. our

those there, less or in And will the would the say invest future. to environment. current then the I in million macro As turn businesses we $XXX continue into

Mark Costa

first the project are it. driving of -- been efforts we're Texas sort preproduction note the addition in Those I expense to segment, the costs so So just around France the engineering pension around and project also are and plant, development noncash. expense expense costs in project. and that's that would

So a but it's headwind. headwind, cash it's not a

a question understand Could acetyl didn't expand your your just bit? question. I on Jeff, you

Jeffrey Zekauskas

In other words, price/cost. you've got in some pressure unfavorable

got You've some shutdown costs.

look if you that and that the from be? that the do all at business year. what you up, experiencing it year-over-year So penalty this If penalty can summed would acetyl you're you

William McLain

increased about plus specific would I point. logistics has Mark think going this the $XX to that more we not highlight, think as be in I the cost than that at Jeff, whole, it's acetyls highlighted. We're million

Operator

The next is Aleksey from KeyCorp. question Yefremov from

Aleksey Yefremov

prepared run you to the using In remarks, slate. saying that ability you're XX% diverse demonstrated a at methanolysis around feedstock

I half to feedstock second to rates wanted run? in a XX% So utilization, also, average of representative your what ask what this slate long operating of expectations And going you're for using be on it you, is this achieved year? that's the for on for the that was plan

Mark Costa

Yes, great questions.

specific to vary a new the our strategy, certainly every about versus just as of one a So significantly the not that but economy linear think circular very of in set new run is we of consistent fossil plant operating economy new right? difference products feedstock to sort to into This day. feedstocks above going feedstock That's a we we're another, when from you and source XX%. get significant that's out making and intend discussed, technology,

of XX% of rate right? others. easily So have running we of representative limitations in HTR, of really it feedstock we're material, the isn't -- we a been about the hard-to-recycle more call When of material. talked better in plant had But that think these or putting been first wide some what quality sort the that sort was plant run we mechanical different than runs what processing-related are we feedstock sources through using when in The range I that of stably, addressed. having related issues resolve, really some year half to what the the about issues mechanically have were hard-to-recycle

of that improvements of how product issue week. the about, of plant should improvement, to we the into XX-plus the move several percent us last, range And back get to sort the how some this The to the of had final one the that middle we in We implemented once this again, run from plant took address. can plant. mechanically the

much it's excess a be in shutdown half, built like that times sort forecast the we But for to have well half pops But we are normal -- than and there has down better first going the that planned of feel customer we've up, another it's of back demand. in maintenance. the us issue for some running

with we're we we've So the customers that with taken. can volumes confident serve the ramp-up actions the in

Aleksey Yefremov

the broadened Renew who And version? your selling this Or marketing customer you buying Tritan? customers already recycled Tritan, Tritan have Thanks, has base using are for Mark. mostly on side, to been the

Mark Costa

Yes, it's a mix of both.

Tritan But a recycled the customers -- have actually who markets. value there's having buying application by that time see of we we're also in and loyal So end for a have of number with certainly long surprised the value new wins we've new been been proposition. lot customers content

So if upgrade new January volumes growing where the a new to slower we're the And existing you I mentioned. for actually in content reasons ask recycled me, today, from more economic are volume where our bit than is some thought. we I wins on customers to plan was in at

actual go So we base good year. as our base we're we broadening about our and into can sell market how next where we and feel customer

Operator

Deutsche is Bank. Begleiter from from question next David The

David Begleiter

is the for Can on how And this be 'XX? if remind 'XX? normal maintenance just you us maintenance? lower maintenance, Mark, for a 'XX does expenses can versus planned look year

William McLain

little bit also overall year have crackers. with could at year-over-year be of would next We streams. in a favorability Obviously, that we But will each is David, an our a the to our of expense on basis. year, go about turnaround year normal. of -- say that yes, we would polymers an say then olefins acetyls. level, turnaround, is maintenance. through And There I and this I a talked the this level normal addition

cost. fourth as here have in say, shutdown thing the the the additional I -- quarter polymer last would the Additionally, David, in QX, we got we've

Mark Costa

high, up point you right, as about the think extraordinarily plant. this methanolysis, maintenance is the from starting as David, a view year of cost we're So

when will year preproduction the comes normal to the the tailwind next we year. because the year it be and fixing plant it extraordinary things the up. a all methanolysis, of similar we'll maintenance But we're say this next all sort have I'd expenses, sort to maintenance as have to of starting in all assets, So don't

So that will a be tailwind.

conversation sort I The our talk going about incremental sure, part tailwind I'd circular. we EBITDA But of mean, next that's to for call all neutral. rest, when embedded in a that is year. it be

David Begleiter

And it. Other? project, on of Got methanolysis. provide The progress in Mark, reading $XX two more much the last out things, you on just this was project? you with color break like just can what's prepared year EBITDA, million doesn't happening France in and seem X Can between Advanced And there comments, the Materials that months. the

William McLain

David, million. $XX -- of What by we you guidance EBITDA. incremental saw our is, million would missed say I in QX, $XX about on the

$XX the million Materials. And Advanced in Other. the of decline then So the was or was $XX in million remainder

Mark Costa

Yes. next projects. When comes the two to it

Pepsi makes partner Texas have committed project. project. such proud And about grant the really great with offset DOE in that to great about the feel inflation feel contracted capital a We're with us we First, combined large helping and that project. that,

think really down the to of great be this problem, waste can technologies is plastic going up get scalability on where footprint a we carbon of solve project platform side we energy XX%. green the sort to use of to example a And that

as well really problem. Scope with helping customers we're as X solving well plastic waste so this mission their as And as on

quarter to have due slower incentives of along the France capital the quite these expected. IRA. customer do size than still said bit is trying lower project, capital Europe in the to before but and a had course, And on that slower in the too, we project, not first that moving we as had than on call, conversations working we're contract It's to We what we've being The predominantly inflation then, costs. we as to too, the same expected originally. originally

about it's similar really discussions. conversation customer had. those And the So we just it's to contract

the and important, plastic And to not as we if have you when crisis, product very dealing actually right, as you content is Europe, goal, waste They recyclable, with that's lower All in carbon keep high most X significant that means actually to recyclability the a by can't brands way, their conversations emissions. in well the unless more equally, continue recycled. them with product contributor status are it's brands recycling helping very to it. goals, are the Scope but down which for come your committed

recycled order So have to to in also deliver goals that value. they high content deliver

have, So manage that's, with the they're costs recycling isn't in on they in available hit targets Partly don't Europe, a explained next for just difficult environment. targets I get starts especially problem. year. There beverage to the because isn't bit the I like solve XX% that think, to track to because customers, which has mechanical capacity not enough for bottles at partly changed. to little XXXX situation They're a economic their moving the been slower, to where trying specialty

And -- products. actually recycling water there's those a of those, can't clear of make you lot actually trays, et use cetera, in that's of bottle. that they mechanical colored, PET, make packages not And and a different opaque, products to many cannot you forms those

a get products. challenge content those of recycled how to going some actually into got they've they're So on

right So all conversations -- PET is are incredibly customers. the that the that the still cycle bottom context with the now, intact and going very is got all much are But of the market prices a still at on you've market that's is causing low. to are regulations what work. how counts so how and That's content Economic now going and -- Europe right slowly. times conversation unclear are a little bit -- tough to go in the on recycled the and

us. slower in just getting But the It's their engagement we become don't fortunately dropping contracts anyone with see done.

Operator

Leithead from from Barclays. The Michael question next is

Michael Leithead

bit? to that's still down speak would the ramping the you not forward as just project. have I Texas CapEx Tritan, you directionally, Can reduction move of up, thought with coming a

Or you dynamic? it help is just can bit. a that a So timing refine

William McLain

Mike. Yes,

highlighted, just still Mark circular our on the that's time projects, specifically, working we're and both out. towards Longview As milestones lines in And pushing France France.

first as in growth got the of as some look our as as back to we required up forward with the Also, quarter CapEx project transitioned. of about Kingsport our we starting innovation end growth, So the achieve highlighted, we're here projects wins. we've us of and see we other destocking the year think the we behind

So as year to expectations to think we with And not we're balance that, to achieve cash going let is year. increased and million obviously, balance the $XXX to we we repurchases $XXX both full million. of million we for $XXX this our out, sheet, sit our those to need share for what on appropriate

Michael Leithead

then advanced the I And today? can helpful. prepared a and in interlayers That's the think Great. remarks seeing you speak slides you what you're highlighted more to bit. in

how that is relative remind that, is there? think growth is, fair to business Advanced the you Just about a to it higher-margin Materials, segment assume how than the there? bit And average, on rate us overall big that

Mark Costa

interlayers the down year to year is meaningful and delivering having a last to auto slightly earnings So market. growth good relative a business in flat

it's well to and a well. our as as innovation great in operational So testament results, and strategy plants it delivering our excellence running

auto EV X/X growth. year. as on side, a it, it to it's creating the build. luxury markets. seeing predominantly than revenue lot the still better two end we're interlayer is own So sort the auto, The last much to auto on leveraged we're earnings But in focused and is overall and end of about also our market average the We're business segment, growth very market has which the of flat the but is of B&C of growing

that of out being leverage market the segments. getting by we're right in So

And and premium products. more then selling we're more within that,

multiple the a remarks, As of the for story highlighted offering we've HUD had and future. marketplace building prepared that to it. in in great that the we've been We're product generations we around

better So driving reasons safety that's security car. the adopted in being and for

of has market upside. that so lot a And

Also, we're glass in of much when market, And they're about EVs, to in laminated meters car high-performance a an square you very focused. EV we as products. the in there's where have to very interlayer Xx get said, luxury the technology-forward most to of as the in ICE an especially want EVs, relative buying They car.

solar control they And so they need want HUD. They've have. that got to

all lot is driving square a times, value, so of And that more at high meters.

than better think it's are and leverage. though even expected, ICE much as many people giving the market And I us EVs growing growing not still as

we've at HUD, So control about in you've And year-over-year. had high year-over-year margins. had, for XX% very XX% up volume solar up example,

So It's these a great challenged. that's are a fast in story. growing markets market

Operator

Duffy Fischer The is from Goldman next from Sachs. question

Patrick Fischer

question just again First is around methanolysis.

tent the the getting understanding in my end impurities cleanup pole back always long out. has on and the been So the the was

you're have deal? were of HXR were before longer able you able or that say get no it you box that, a technology that's the you check prove can the still higher that, kind out that running complexity when harder to to Or push and issue? max So of is you that -- at an done so XX%, feedstock to

Mark Costa

straightforward the to Yes, the impurities surprise the Duffy, that's from been variable the correct. big, front is on pretty lot is make had end garbage DMT polymer huge this of purification is you this all you're on of complexity. project, set where of to a the output pleasant there's Unzipping whole back of sure process, a high-purity

separating across that different HTR. and technology we very well From to well. all the process want has really all other use, And that's impurities stripping beginning out the monomers and worked the and the out worked again, isolating incredibly

part is nothing to the really delays break, vendor that you new chemistry. that a about caused easy sort equipment of do frustrating a They mechanical Once fix. the us start-up sort had we pump. sort a problems and lot process The of of pump put of in areas were for talked to have lot that construction you of with quality

was factor. about identified. form issue was really couple had that But impurities to we've of there that feedstock a be we've now supposed were that This having again, about it not suppliers recently, It we sort that before put the prepare use. it to of plant addressed in recent issues. changes how plugging material already broad-spectrum the the we to has made the And intend we've on HTR,

our is plant. actually we guide we complexity great And of more sort feel is challenges these as worked of through got plant, a of sort chemistry. -- which So environment. lot of the have construction mechanical to this it. this out of we to operation built expected probably We process very the in we when big should about line a just the need It's this

Patrick Fischer

business, And one, out you better, doing on and Great. other coatings; then just ag. two of as kind end one, the markets the called base

level? Are kind are off? a run that So on it you started to rate fall of on well to now relative below normalized you where ag, when still kind of

seeing still And weak Because be pretty be stronger then in there are volumes? numbers. than coatings, seem your volumes putting customers you to what seem to your on up But that.

Mark Costa

Yes. think that I mean, having. discussion see components. all coatings we're destocking. volumes did And if to remember demand a don't demand was are you've And got completed right? end-market our coatings. the destocking customers on end know lot remember, you two we than to situation I there there's us, lot that stronger got There's of I that. this those to a that customers market they with But similar our

from coatings like And that else. benefited everything durables just and recovery in so volume we've

So of you to probably attribute up destocking relative look single a in I B&C, of in volume that year. that, most high to when at would last just digits lack but we're

is it's normal we of were the so sort phrase I of products it ag puts behind the would the I'd ag huge season. The is but There was year by demand takes Reconnected say by And far. normal for ag well went call us normal we and things, They make, destocking And sort of this side demand think first second destocking year. certainly of I in quarter. as we that last an of ag that that, a the resolved the season with we that were us. conditions. amount through impact a that of through having companies documented the there what was all to to time as sort we're quarter, say I'd a most on had of destocking sort

good. QX do was softer. QX inventory expect in will much We our So QX customers. building not from be

on think still how a to being bit cautious inventory. I they're manage the

for So we year a first which next for expect in quarter the be versus of ag we'll big next of nice see year. the this build us year, tailwind will a demand

Operator

Stanley. is from Morgan from Vincent question next The Andrews

Vincent Andrews

and of issues of gating go/no-go plan couple to B either still date now a is made a the Thank any of case a quarters in move terms in sitting we're sort from there haven't you. progress forward? Mark, France? you of here on Or is there

Mark Costa

we headed. fall comes a insight it's about really I good When I by hope customer decision, Vince, necessarily go year the have finish where go/no-go have work. to discussions we'll clear engineering the mean, formal and the that wouldn't end French with the is it project, of through project but I contract say we insight as

manage we The plants X of what into options each a portfolio of how we have these products of what and we lot put and build in is them we sort reality them. pace

So excited built. we're getting the very about first about excited Texas very plant. We're

Texas will PET. have the capability well to make specialty as as products

go and project flex got serve growth PET as this sorted then hopefully, Texas from in project. French growth you the you've support the and how out. But we'll have So into specialty we

We two in still you very projects value these of first you much shifting these think can intact a value as projects. on the projects. how across creation get that three specialties the depending a And you where forward, by $XXX go across is million long-term of EBITDA target that lot still make

but build three of of we're lot a in to to all of wanting there's very sort projects. this So these robustness plan, committed

did side, these to our French we're which on But build if long-term PET get contracts get the Pepsi, sticking don't project. will very the to with not we is, model, we take-or-pay clear, as be we

the in if product very produce get So that need they to need customers content clear we're being to very they we Europe. high recycling to get that place to to targets these want commitments contract in much

way with done. no it alone, can't you is do be mechanical can There

stay So to these their to kind if of to investments. want have they're going goals, they to committed support

Vincent Andrews

be just Okay. back a things with know Good like world of thoughts don't on, and side what's that. to to get election. hear. going happen And your into one I But on the could could entering if obviously, tariffs with it, we

could understand your could what this would period you what around? sort of just us tariff help maybe time was XXXX, impact what of learnings the of on the from be. And Eastman that so sort for view And original And be that XXXX?

Mark Costa

tariffs which going because of I'm that's who's me going person I glad very President a the on explicit November are have government issue in China I has capacity to a excess think But an basically The and policy exporting of impact public we they're have you country. wouldn't to an no exporting have as answer. ask to actually election didn't the unemployment their world, matter It's -- world. the an this and markets. to win

and it have most exports XX% the of comes that impact not fortunately, of has America. China many have CI. us, China. exports We We those to don't that CI North Latin for are we're in to the Over sales exposed really, But And going America from some do are with exposure business when some Europe sales. from to our exposure.

little exposure our there limited. AFP And somewhat So has bit is of a exposure.

costs in from there's that that tariffs which response of step kind exceptionally on out reactions place in U.S., we the is and a low will to China. in thing of Europe So China. already now, being point exposure is bad great, at is exported seeing are be a products direct for you're putting import of be then of going thing. And view where The that is not good side the one, Chinese our are which

and do for expect our XX% issue of coming there's about that being way. not that of trip us. into goes This a is into electronics then round and doing So like China. China tension appliances, -- China through that, out tariff And is specialty revenue. back that's China of is things of plastics half re-exported new About of durables. think something. we Typically, mostly some our degree made a

through laminates on to specialties AFP. of 'XX playbook locally developed cars, coatings The playbook our like performance We that was that, out other few windows, how That films and consumed time for in or relatively we have XXXX, manage a do half, products the effective. some frame. a

out. and scenario so And prepared updating we're that plays being if just it

Operator

is John question The from next from Mizuho. Roberts

John Roberts

cig tow, color tow what's on as how fiber? cig you textile fibers profitable now from constraint some Mark, fibers? on in Fibers, volume you the could versus that is cig as tow shift could provide textile And to -- to textile quickly

Mark Costa

have customers So and of our X focused rates have over is that been on last market obviously, utilization tow. supply. XX% high become substantially very And changed of years revenue the as has the security pretty

So to continue that stable. to expect market we be

year, XX% 'XX. we've we of As in the XXX% next business mentioned, sort year this and of XX% have contracted

pretty feel in good place. the about we So contracts

in does natural -- contracts pricing it when the comes modestly And to our changes have structures those a for for material There industry are provisions there it decline tow. to obviously in raw because volume still is costs. adjust in changes in market declining it substantial

stability customers we're So well to us. as both to providing our as

we think I market, the good of feel part about. that pretty So

in market. textile comes business, seen another it's to the tremendous This very great. growth market. end We've been also it When challenged the textile is

go that volumes materially relative look exactly not our grown market. the But you it's underlying yet to fashion have industry, at If growing.

bio Naia make great the and waste with just now with with It's make plastic, wood half waste the coal content story. a tow plastic. the is anhydride acetic to from got half can replacing The fabric other pulp we of

a beginning got life So very you strong story. of

it's if will up And is clothing the going ours then synthetic in is increasingly become to off of end microfibers fully in washing this break ocean biodegrade. important the garment, machine that as that the microplastics a

sort environment. as we the So pace life the naturally that in and certifications prove at same have just our of fibers and have plenty will no degrade cotton studies of that

product of and exceptionally a proposition because important, having become proposition, end-of-life and textiles value a by proposition that is just the source not significant bigger that's the on increasingly So is a of microplastics think, have that beginning #X biodegrades, to or bigger And ocean life. in going going far to I that's the value waterways.

So to and we expect it grow. feel great continue about that business to

Operator

from McCarthy from is question next The Kevin VRP.

Kevin McCarthy

the microplastics working any other with? and Yes. update business? early provide going Air Can on may with How sticking sense. with Mark, an you maybe in Sealed the are customers that be you days there Aventa a

could out? talk margin More would it just market think or than opportunity, you profile there? smaller over broadly, time Naia? growth rate, things Do bigger about like you Naia frame than be that can How you

Mark Costa

great large you if in marketplace. the well. really going well. will, a of is really the store in launch going Sealed a where with successful We've now trials product a had is performance Aventa counter, Yes. doing Air in lot grocery And we're the that's

pork it in expanded as in polystyrene, grocery the familiar the pretty cellulosic polystyrene, is polystyrene that biodegrade home low as composting. same replacement case, it's existing whether for who can fully to trays a biodegrade And landfill, our paper. to get or and it similar polystyrene, as chicken those replace the are everything and this a with drop-in we We to all trays in store. like replace ends For will industrial not else can up your that protein clamshells, and density goes equipment Aventa, it polymer. in if with And it certified even much to or

can the states a how just a states of just life used. companies different sort it's be being have same to you it, can story and that Naia It's are got it. banning food from we of thrown life. position. away end told compostability, of beginning products now There's great number willing these important. story a where all So of But with polystyrene make food from there's national or Other I biodegrade exceptionally just service is of and

a chains some It makes, straw, out way, phenomenally rolling compostable as now food major also speak. we which the in also by is good right and

the program well. The is ramping up. volume going is So

this a out expect value prove early, next up sales commercial year of sort as we these step meaningful year trials. early have We and this in proposition

you as the the definitely in a can volume Naia than question better of the your space, size. potential And than There's answer bigger To company can be this about business. It amount of average. margins are product significant this imagine.

to an corporate earnings. it So grows, upgrade as our it's

It's make of. out from Naia of And or out market same it's the we flake this the because tow that polymer. cellulose an uses acetate same alternative made exact

value to us this off at business base. same the fixed flexibility think of expanding in Naia, we tow, us got time. that look curve and the flake allow you've all over across And the Aventa and when cellulose So asset it our growth sort optimize we together, support acetate of will

we'll getting stream we as hope in stream a these see all the products whole to cover at scheduling. We very that -- Circular action. telling Kingsport you much here to forward circular look this of in well to lot Greg's about Day the as more down it's the different all you polyester as of here Because sort forward assets better cellulosic down in understand it We're that Kingsport. looking you break and when we

Kevin McCarthy

if posted forward stack, still in volume I can Mark, And speak Great. down. at trajectory You Materials? if a as Advanced look follow-up, But may, there. I then XX% X-year the to you it's the

kind the you for So guide double-digit see at could to of in grow third through there. you example? do quarter, you're talk baking what the pace into additional runway Maybe

Mark Costa

Yes.

quarter -- up from XQ. as the to earnings methanolysis now the got of said, our So similar view, coming QX. And a point we online, basically XQ and a ramping in volume in where QX an into guide is we've similar is

innovation if see traditional the So above our any on sort driving will. pick every Materials markets you the our side. automotive year applications of past, underlying to that sector, the have you'll portfolio innovation, like win the in We'll growth across Advanced up do on in we continue in more sense,

So back half go volume us year. all helping we of that sort the of as the see we into

You some see fourth seasonality normal in drop quarter. will the obviously in demand

the as much everything because not see be else. to methanolysis net and that in expect ramp-up would of normally as We you

other quarter better of be these So of innovation typical end the some market fourth because and methanolysis ramp-up sales. of than will

at through of help. that year. the When look to some tailwind also the is was and year half costs first lower at the inventory, energy of in the the you energy still So PX where of of a still sort in now the together helps are than lower in back I that There's half think the trends of it that that all cost flowing bit will of beginning year. sort spread the come

tailwinds. So all those are

the of the Then QX costs nets volume of back half growth. that right? the half, the million that's headwind but in first some shutdown than mostly off That in year, higher about $XX is

Greg Riddle

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

Operator

the Alexander today question is from Laurence Jefferies. have from final we So

Laurence Alexander

ones. quick Two

is that in that your of project inflation on? that cost million Just Or transfer and 'XX? we half $XX in heat about the the platforms just forward? expected new going new in Is first you're think growth working is And $XX that million And fluids. on your to should recur base? how projects investments, is secondly, increase

Mark Costa

So the first And answer. second going question, I'm question, I to understood not the question. the just I'm sure

predict on heat quarter. timing is by fluids, first to the So in question and it's everything hard business, that very transfer

$XX great high-value had about year space, last back million I it an year. year, for think we've that lot fills of So basis. will lower predict come LNG in to are us. specifically $XX that just annual when quarter-by-quarter. the year, a exactly fills sort But A occur on very would million this It's of very next difficult

but... apologize, second the On I question,

William McLain

Yes.

our I think this in talking outlined what you're year, that's in increased you continued think I the in expenditures in just about -- growth Laurence, we're Mark segment, referenced that or capabilities spend as as there investments a And our again, Other net, increase well our increasing growth. on So as and those. about where

line. Aventa of see Mark the product just to expect referenced the ramp-up in and We that the cellulosics revenue including

with to also cetera, investments the et the those on we as be efficient XXXX. capital, working and making we're returns into go So expect

Greg Riddle

appreciate being everyone, with joining Thanks, us. for call you on this We us.

deep forward Mark Kingsport a dive year great a look later this Everybody, on economy our have circular we platform. As day. mentioned, you we as having in do to also

Operator

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

now may You disconnect.

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.