Westlake (WLK) 3 May 222022 Q1 Earnings call transcript

Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the Westlake Corporation First Quarter 2022 Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode. After the speakers’ remarks, you will be invited to participate in a question-and-answer session.

As a reminder, ladies and gentlemen, this conference is being recorded, May 3, 2022. to Westlake’s call Vice like host, to now Holy, Jeff President would turn over the today’s I and Treasurer. begin. may you Sir,

in Day Thank from is our unable joined occurred The website President and available conference everyone, additionally and team. other Day, who Albert and the Officer; our would are quarter of you. which those for the our Financial Kearns, thank of We the attend Good our Corporation members our everyone webcast our to Chief Bender, Westlake Roger Investor who Investor of welcome Relations President XXXX. to Xth. Chief section call our Executive Operating to of you and Vice for and on management Vice and results Chao, to discuss Investor today April like presentation the Officer, are CEO; able first Steve to I’m President morning, attend. by recent Executive

earnings an reference in section website. our included can during on the Investor have found that today presentation, be We call Relations our we’ll which

to two call. This results morning, will press are This Westlake SEC International conclusion can is call reviewing differ available both release the website our finally time section be beginning as Internet our westlake.com. you expectations XXX-XXX-XXXX. to are few this will then a access by assumptions only may Essential call on release our management. add we financial thus based learn we will you at Albert, of may comments management's of forward-looking broadcast dial webcast of today, to document the actual Investor call segment, to and currently made discuss refer beliefs, to press results. statements today, callers call for being which comments, longer or SEC you open will code will going as replay. up following this lead and The as Form These by who HIP, be factors performance. Today's system open will that in the XX, may refer We Domestic that available with replay and ourselves, as any performance I to established then topics reporting dialing through conference encourage available therefore, these Steve, more certain discuss management questions. for could is on are risks replay our contain call, no with that is Westlake's regarding as and that other access XXXX, callers speaks be today's on begin with call forward-looking and a or predictions Westlake's to risks available should following XXX-XXXX. that numbers a which our information our filings. our segments, hours ended May Please infrastructure the few note at XX-K also would XXXX, and accurate of by the is the we the website. information quarter live suggest information recorded Albert filings, well numbers. X, the These we'll of time-sensitive results. operating details concluding During as advised of accessed that information issued in subject the conference and year first XXX-XXX-XXXX. products Today, at about Materials recently uncertainties. segment, will to housing in advise of and be to webpage PEM. these that uncertainties discussed and the westlake.com. on this A December Relations are which This is replay refer accessed an

Now turn call I Albert Albert? to over would like to the Chao.

and the the our product want and a The of EBITDA differentiated globally results. these raw long growth, chain equally combined in strength advantaged Westlake, Hexion's dedication America markets quarter. and were globally in record housing growing We scale of which driven to and value value. quarterly leading spoke with and for has segment employees and construction, effective energy Thank strong portfolio markets. material helping our us to We these and North disruptions, margins XXXX. value-added these energy markets work completed everyone. Good invested Since results. of Day, diversify us to appreciate record branded These attributes us the acquisition all thank billion We X, strong PVC of in well the and demand revenue specialty continue housing manufacturing, in we our been record revenue including resilient sales. by $X.X important our financial of more attributes, in energy and resilient attributes February in and $XXX financial record Strong to drove costs supply quarterly well expand market XXXX the rising billion, These trends end earnings as long-term quarter our and a driving quarterly of position Westlake's strengths. and in first Jeff. a in discuss operational products record This income and growth of opportunities cost mid-XXXX, from quarter growth variety Epoxy. about polyethylene the further mitigated sales in businesses us coatings $X.X execute $X.X morning, with enable robust achieved announce strong of of record portfolio as businesses. million These compelling the industrial earnings the scale. for products significantly environments construction to enhancing acquisitions, achieving our position joining a new a on feedstock positions, Westlake's with cost I pleased record activity, our benefited net specialization existing to attractive results that their and epoxy We industrial record of in branded to in track EBITDA EBITDA with advantaged packaging, specialty business our with brands to hard creating gains and many track of attributes Westlake Westlake leading by from billion. wind all as rebranded I'm while and adds Investor portfolio caustic driven global -- economic you our driven and first acquisition impacts drive positions of you, our soda, well existing specialty record PEM by in accelerate deliver our future. results as we continue across we of reported portfolio capability consumer recent the

XXXX advantaged think raw leveraging total important our net quarter I year-over-year, results. by details to margin large low-cost first Steve income Supported driven XXXX. and the and vertical PEM We position, and and we recent and undertaken PEM provide EBITDA magnitude of contribution growth The energy. a to in transformation these XX%. experienced the was material highlight of by integration footprint globally best-in-class costs, by it's cost our have significant magnitude sales will North growth the acquisitions, American was our with expansion acquisitions in XX%, on since delivered. in already the have sales further we HIP of

and made our significantly strong quarter PVC ChlorVinyls drove packaging specialty drove in results margins caustic of positions the contributed leading polyethylene, and our as quarter higher. demand consumer as significant Our PVC soda, is this capacity XX% to markets of and in polyethylene well. our this PEM which over results strength our Industrial contributions also specialty

attractive focus to With strong mix our and demand reap XXXX we from building brands. a our construction American in margin advantage realized we the market-leading with and of on our robust the sales first quarter, commodity leading earnings from factors secular the growth In demand volumes dynamics. we benefit name and benefits from housing offerings continuation significantly trends. drove producers. positions improved product from for value-added and the products differentiated Our North our clear strong product products, These positions activity as specialty and PVC in resin the the of momentum our other were significant growth and product brand our distinguishes able provides HIP, with

We are provide for the have acquisitions our over brought have I businesses quarter expanded past these to first on the benefits call financial the we to would results our made our integrate to to portfolio. continuing XXXX. to capturing turn year the more detail Steve like and greatly are now over

businesses paired Thank you, Albert, in construction markets, good which second the housing gains The half of first performance with record drove experienced healthy along industrial consumer of gains we we demand and XXXX manufacturing in market both volume the quarter, pricing activity, remodeling XXXX. and and when packaging the morning, and in acquired with quarter continued first segments, industrial everyone. strong XXXX and repair in broad-based in from the from trends and

record This ever of quarter, time net we billion. million, the and sales $X.X $X.X of for of from operations including $X of Westlake, over for income income results billion, $XXX first reported billion EBITDA

serve a natural housing, manufacturing benefit value-added the competitive had XXXX, The first cost With advantages provides global with well a by of to are first portfolio and to demand, and in American gains serve robust earnings chain segments footprint a portfolios. of anchored which our situated growing vertically across quarter that export healthy production Both result demand solid contributed most $XXX market North There and North increased these of margins, several income industrial Westlake ethane, of to the of American and a components conditions in markets. strong a PEM with and specialty products. the captured key medical, quarter markets leadership also of construction, margin as hip solid higher-margin power, million packaging, domestic advantages, branded XXXX from gas net automotive, results. oils, cost globally integrated strong footprint

product offset up persisting more XXXX prices impacts by and chain across were year-over-year demand and XX%, contributions our our from very volumes acquisitions. than pricing driven and supply The of cost. strong quarter average for inflationary Westlake initiatives strong demand XX% sales First and and disruptions portfolios the respectively,

been accounting segments. the Our FIFO would LIFO of in method of use favorable I utilization performance we'd what million discuss two of accounting. impacts earnings resulted our if now method of reported the $XX will compared have the to of

segment the the in of with and products. HIP first were over increased billion, HIP and will to million million XXXX million than a the margins first of XX% housing in fittings In including XXXX. The building the products, XXXX. fourth segment by million higher of the first XXXX quarter product of of We our quarter the XXXX, the post-industrial $XXX quarter and across in XX% quarter quarter of were million our EBITDA of of $XXX first in quarter from $XXX sales quarter improved first of pipe XXXX. residential strength and of for the an first markets. from begin products, the sales the $X.X quarter recycled XXXX XXXX, increase servicing $XXX EBITDA million infrastructure $XXX fourth increase the quarter housing products, offerings, $XXX versus reflecting

Our in and markets residential housing and remodeling strong products the activity repair from new business to continued North benefit America. construction in

in Homebuilders, & consultants, the for driven reports spending. reflecting remodeling, Fittings offerings Industry construction tight have and has strong including building strength increase US businesses Joint been our multifamily conditions in data housing for fittings as the at demand starts National seen construction margin the higher Pipe market and by the pipe single as for compounds. activity residential strong new continuing while PVC Studies benefited conditions pipe. supply of continued Housing Our in wire Census Association The well elevated cable Harvard products, and levels, from for indicate we the and Center housing construction

health were Now nonresidential a products. in sectors, from among serve variety of care, over businesses, larger $XXX markets. of agriculture, the fourth water to strength the municipal of infrastructure products servicing quarter for an increase turning XXXX. others. Sales Infrastructure transportation $XX diameter the These many million our quarter including our services, first benefited industries, attention Products wide fittings million, pipe

long-neglected Jobs demand the states further Act infrastructure develop provide expect needs. begin municipalities and as and will start nation's and projects investments to construction to our infrastructure We strength address

in move specialty global is chain will the with in paired the fundamentals discuss another in of has Westlake an an leader US, our portfolio position manufacturing a with delivered which I record feedstock quarter Europe. strong for in cost markets and the Essential market of these advantaged segment. results Now, to a products, results. integrated we Materials Chlorovinyls performance When product

$XXX of strong segment conditions. PEM delivered of market an from of million XXXX of billion, XXXX, to sales. $X.X segment $X.X quarter increased EBITDA PEM due first demand and the of sales on the For increase favorable quarter first billion

epoxy to prices and our quarter, our business volumes. sales higher the strong new earnings During contributed with sales

epoxy the quarter PEM first first sales an Materials, XXXX, of increase the PVC, price of experienced of PVC construction strong For was over the activity portfolio. XXXX million was and to robust includes of epoxy, $XXX of $X.X billion. polyethylene momentum $XXX Performance which remodeling, for in XXXX. end-use had and home across fourth gains, when HIP margins. quarter This in benefited discussed. demand PVC and Elevated markets, continued markets, the strong was These automotive in evident while solid economic The and slowed increased Asia, Intermediates compared just including packaging the results anchored I business. by logistical to which quarter the price million in the epoxy and due in that demand industrial demand drive our some sales strong driven hampered as were robust while integrated drove in Europe our segment in markets to NG and prices factors energy consumer by prices continue markets, wind, Polyethylene such volumes from constraints.

soda and derivatives, compared fourth quarter styrene of chlorinated increased $XXX to Turning cost, of $XXX Materials, million the was $XXX an quarter includes increase when compared of million sales and which had first and million XXXX. to Essential the XXXX of to caustic it

as largely Our price significant global quarter. pricing robust production the operating the at is over caustic quarter as Asia Net $XXX in gains increases. was soda year America Europe faced business manufacturing in this saw of activities by cash and continued improved for provided million energy first XXXX, industrial in based activities North industrial

were Westlake As redeem to XX, billion, expenditures Capital million equivalents given billion. quarter of the for March were and was cash XX, cash debt notice and million. on $X.X $XXX first has $X.X total of XXXX. debt $XXX May

to PVC debottleneck was first the between in recent acquisitions, including which forecast venture efficiencies, $XXX maintaining LACC VCM, to and $XXX lower in be quarter. in and our includes our capital increase several costs EDC for spending million We projects investment are our support expenditures and completed which XX%, to will This sites. million, our including our operations, joint drive also the to

effective the tax For be XXXX, of full year XX%. our to we rate expect approximately

be We HIP’s in and pricing, maintaining Annual on revenue approximately to expense reported also of be revenues million. revenue billion. and to And based approximately expected expect earlier XX% $X current cash interest our increase in $X.X depreciation also $XXX our is XXXX. for view XXXX billion demand to amortization to the guidance I'm by XX% from of

the Now outlook Albert? provide I over will back to Albert turn to for our call business. a current

housing years driven of XX and The and growth home to homes home the Thank X Homebuyer the U.S. and mortgage housing are of indicator outlook sale consultants rise new homes. low million more by continued working of housing markets solid demand The home Steve. in rates. report being X leading of million for remain interest note Industry and historic performing left fundamentals remodeling last people a the remodeling over available in for to both U.S. underbuilding amount building are projects. spite supports in has in activity demand renovation Remodelers whole from of upsizing, continue under deficit you, Census data in construction-related repair inventories for XXXX. spending that well. the Harvard’s recent

at over their As anticipate consumers period more and houses. remaining longer spending a in homes time

provides the years. soda such energy of margin polyethylene resilient higher to polymer New drives advantaged portfolio, Performance driving our for as PVC, and polyethylene manufacturing specialty permits housing such PEM, as supporting a epoxy. Westlake's keep of North segment. products, in to more deleverage indicator starts for remain while our HIP housing, products sustained value-added next over products activity, housing America drive expand expected elevated market and our everyday and years, power wind leading packaging, and materially live and historically construction healthcare, outlook are in premium such markets increasing end In as demand the exceed of Westlake sustainability-oriented in our materials the unemployment – wind industrial position market resilient The extends earnings our rising exposure chlorine in well our caustic as a profitability, Westlake's with cost population higher and global specialty in energy, as is coming to combined robust outlook. low economics essential economies additions in several value using growth with remaining as demand the automotive higher-growth globally Epoxy value-added urbanization strong, reach automotive and the aerospace and breadth supply forecasting brands weighting. growth including housing and Materials favorable

leading well view our for benefit next decade differentiated performance keep and the these positioned of a the of by and business capital application discipline all products. need secular to over a from specialty demand on initiatives. are of producer focused accretive driven and strategic we lens essential As formulated our materials, We growth aspects under the

further refine Our and ongoing and digital and incremental innovations optimize operations savings. initiatives provide

tens have see our channel Westlake with initiatives investing commitment innovations. carbon by integration intensity kinds of opportunities in further of our our announced important dollars that each to by our saved value a driver. sales and sustainability achieving meet of XX% vertical investing the We sustainability product has goal increases and over in year expansion reduction ESG millions these as to XXXX. strong We an capabilities needs customers. our strategy We're of of

We pallet helps our recycled solutions products, sustainable launched create including building as as of well consumer One which a plastic have products, bio-based for customers sustainable products and range solutions using developed wide materials. material.

needs We market business for will sustainable more a efforts I now These current which innovation the confident are flows move to business, our few driven of listening the commitment resilient over favorable. economic in new and deliver Jeff. society, first of a a call in remain very pipeline As that more of towards a earnings driving and part you our just fundamentals, variety to to introduce to environments. Over turn world, will impact to us sustainability geopolitical products. in much while meet examples could earnings economic growth. Thank Westlake continue by volatility of our earnings to quarter and call. sustainable remain our and product back conditions enable cash our factors

Thank you, Albert.

like earnings website, would a our on to two after questions, our of clarity be our taking into ended. this available begin additional and hours is we I remind which available teleconference results that listeners provides has Before replay the presentation, call will

will provide now at We number your the again that call. will of take end Latonia, the questions. we

question from Certainly. first Capital Yefremov comes [Operator KeyBanc of Our Aleksey Instructions] Markets.

Your open. line is

good Thank you, and morning, everyone.

You discussed also, mid-cycle? segment? second the absolute quarter how these Epoxy overall relative stand or to so current margins see the do first? also, where the the do And business to in margins you margins your versus terms stand where evolving relative And those -- in in short-term, in the

Thank of on This you, comments couple Yes. A that. is Kearns. Aleksey. Roger

and of what quite We're with see speeds. COVID is good with world bit with a seeing still of three I bit is different the slowing is three in the a supporting a demand the little we bit, today parts epoxies Russian-Ukrainian slowed a America, in impact, has Certainly pricing. North bit. little down think then lockdowns quite strong a which things Europe case. China moderate

little to say, raw seeing from globally. margins. I see good But or would a starting we're I more quite more of And time, cover we're to think, China that correct material bit exports and over see, China able the coming today, out of competition lockdown, all costs overall to with China. so But expecting still

or quarter. overall this And time you. EBITDA your you segment, question were the do like would the in on margin XX% so look this also average the How think second for hip at you Thank year? margins

to I think at was the mean, up get talking we start XX%. high-teens were Investor I Day, Yes. our our about to to into goal

the -- go with we does on a depends we're raw as would still with We'll made. forward yes, stick we materials. that. But little happy we've what on it improvement think bit on see overall, I pricing

lot. a Thanks

of McCarthy And our next comes Vertical question Research. from Kevin

line open. Your is

was caustic outlook could Good if you morning, wondering on near-term your everyone. I comment soda prices. for

increase realizing significant much through I Louisiana? put per competitors forth Is have $XXX recognizing trade ton. a suffered you May, that And to are of how a read seems in in April the think you press, that of your had that proposed and outage of I accurate? one that

Thank you, Yes. Roger, again. Kevin.

put did out we caustic as described. increase a think I price on

demand are continued We seeing for both. solid chlorine caustic and

of -- sides And quite the quite the both is tight. on especially fact, caustic strong. membrane are In ECU we're

the see there strength, support we'll increases. to And and continuing price and so to we're support continue

into to or one And or Okay. structure on industry thoughts PVC peers whereby integrate downstream of a What interest are part venture either anyway, on your your of a then would a they your PVC expansions in with resin, announced own as partnership resin. resin partnership? joint regard PVC

make is comment I see to mean, PVC Steve But, more I Roger, us. one in. is guess, want Yes. I I'll mean, this again. Albert jump very to core and for if

market, And will follow in growth needed. so, that to we the continue as

are ethylene We the you know, as chain. through integrated, from

continue we'll that. support so, And to

think reporting EDC. PVC talking you're through is in about the make what the to Obviously, coming there. chain chlorine I

so, as to needed. in And PVC component the market growth PVC at no, But, end we'll of the the support continue a to the getting of game. that's

you. Thank

from of And Mike Leithead our come will Barclays. next question

line Your is open.

Great. Thanks.

I MMBtu First, $X to natural with, is think, US I want around in gas today. start

if just early given obviously, might they've still just expectation be, quarter. or the talk early you you're your seeing what it's of about second there assume ethane. what estimate I can natural in flat in kind relatedly, Any But quarter, prices dramatic And is? really of of So faithful the just appreciate, what outlook Steve, a gas, to maybe, and moved there. sort tailwind

Yes.

good question Mike, So, there.

of but is think a first FIFO it, ethylene if $XX you drew had is up, we end lower. that today, the and is quarter about if in the of ethane recall end the And the benefit notes as you my quarter. up, comments, drew we if million gas today, our think the I we quarter

to the we know first the ended first we we'd if to And It's of if hard are ended trend to where ended into quarter May so, today, the it's where similar today. but we June, first second it'd end where may of and quarter be the -- quarter, the similar probably month for be quarter. we the things -- probably

And just outlook. thoughts gas general on US natural

We're forecast. at looking half to IHS range natural at price than -- drop second rather $X $X looking They Albert. today's is are price. gas to to $X the this Well, elevated and

Yes.

just, Maybe you And muted notice Okay. was whether some flow being mentioned how debt Steve, M&A cash should this any you Is shareholder is you the flow, versus there remainder finally, earlier. return? we gave to that about year? there that the year, cash other debt think of think spent paydown excess this

about to year the So, Mike, and we've about talked million think capital we between our this million. $XXX $XXX expenditures when capital, guidance deploy in that opportunity

days. and You're debt this to was month, just that XX expect retire accelerated right. retirement really coming to given We've July, in $XXX notice already later that It due million.

be the of to certainly the the which year opportunities. you can that have sense, when ways with in one for continue we mentioned our investing so, further some debt opportunities we've underway think RS and share be which well. in and have shareholders will put this capital some deployment about also opportunities, we variety buybacks can And look other of that our of look we have for in expansions we capital we could Roger I some as debt later ways optionally projects, talked year dividends come redeemable, locations, of already about but retirement. to from we'll And this reward a at will look also debt later accretively Cogen. due in through if makes it work for EDC/PVC, that

deploying that benefits and at company that So we'll efficient most the look shareholders. way the our and capital

Great. you. Thank

welcome. You’re

question from our And comes of next David Bank. Deutsche Begleiter

line Your is open.

Good Thank morning. you.

Good morning, David.

Can discuss, you on thoughts fulfill give us April? you April that or believe, they have your for thoughts settled the your can negotiation. ethylene where contract maybe settle can today, out might you discuss I Albert,

for a $X.XX April May And for to increases good well. polyethylene industry polyethylene. announced April price as settled and think pound we for in price April a in yet, momentum The not have price, Yeah. there's have increase have the but a

margin, as that outcome from the Very good. PVC Scenario? thoughts margin on And just holding would that up into well. soft of likely a maybe chlorine ECU falls housing in have even a be Could growing higher, higher Albert, potential your this would -- were if ECU here,

Yes.

quarter. you moving which for the water know, quarter second we and typically second is As construction, related that's is chlorine as as treatment, And to are strong PVC and strong for related. well

So expand chlorine quarter soda typically, result. and as is caustic margins second a for PVC well as and where for

you. Thank

You're welcome.

Fargo. question of next comes our Sison And from Mike Wells

Your line is open.

Hey, guys, the great to start year.

Thank you.

know So it I'm the the can't normal, when I new reason guess. half. consultants full that just any have I curious, be the you -- you're it's industry sustain could why second of PEM, in margins seeing the in year? of for think about -- sort But that sort coming down

Mike, Yes. it's you, Thank Roger.

maybe into was business I if three think the pieces. I cut

the American think vinyls, outlook. pretty I North a on vinyl strong it's side, pretty good certainly outlook,

the overall, mentioned, little to not polyethylene, quarter bit is good. see second as should stay we particular can where for Albert we on happens XXXX as China of is. think we'll I put I into a as far in see epoxy. the exactly a I'm But as it And going we each epoxy, in reasonable year be and half it see say, third. holding quite all -- I still But business do what when together, think sure first year

second is of quarter, little the in then, quarter best then for your a be the down company. And seasonality, it. what Got EBITDA third And for terms bit. quarter comes maybe

about? did baseline that to good billion think the in quarter, first $X.X that of sort is of you So a kind

third all first construction people Well, and weaker typically, demand quarter usually, in on our are the the best and fourth industry business, And the that. packaging vacations for and are quarters for second and and ones. the

the depends on economy. it I However, think also

needs they only high you the about serve our for slowing economy interest US has high to cost global staying the not US, with needs As oil know, position lowest down of talk The the but the rate. is and products. still price

the So we would that's don't industry. and economic on have geopolitical our and world what combination, impact different know the on and a future

Great. Thank you.

welcome. You’re

next call Steve Bank And from of our America. Byrne -- question of comes

Your line is open.

you actually Thanks. on that kind Steve. and kind out Hexion the doing? wanted us for where of sense year a did ended revenue level, a I from EBITDA an [ph] ask Teo the of end for give for to flesh Matt of the epoxy what last -- level It's if bit business, where little on can up

end series of not publish their last when of with year did Matthew of because the for transactions the they Securities. results American So, the ended had year they

so, was a for And Hexion public X publicly ended we reported see months in entity. as

can... I So

know what at hear you’d point, the XQ you. I but was Presumably, this

so, I elevated. continued market say would the And be quite to

good so And demand.

heard performing markets. Roger's business that is with in Epoxy see the the well. currently that in of have the we terms performing about and business that and we clear Asia, given world in the of well, nevertheless, we're how the headwinds concerns the the is of Asia of North Europe But think seeing terms American backdrop. headwinds But economic kind outlook parts You it's I

better you expect a you I bit? that capable term HIP the don't but Understood. long can than still, of cadence sequential guess, the I big business, new out normally flesh we increase. of the I about business it a a that be and know I'm And of performing think Yes. what learning as I margin don't is probably in a said bit little -- increase maybe should

more in what? just or this So, compounding margin or execution is good that's expansion is commodity there like some PVC

fair and you even face occurring the activity with in about -- and I Certainly, rates, continued PVC repair rising remodeling. and certainly to about rising think certainly, the see When face think the compounding markets rates. is strong business the a mortgage see markets. see of business Well, you the even continues of you repair what's picture a HIP in the underlying construction business well. And good perform really as compounding still we a strong demand again and business, mortgage remodeling, with construction infrastructure in amount the the think you of

high PIM teens, quarter and HIP see the business side you've the that think [ph]. on I so, reaching first very in seen provided the a And to what in you continues of PIM perform in margin that we well. guidance XX% us is the

seen the and polyethylene. us of seeing heard and caustic both certainly speak in about the with price business nominations in some You we've we're producers PVC strength out

I are So, and quite well performing very backdrops. think good both have segments

you. Thank Understood.

You’re welcome.

And Markets. question comes of Viswanathan from our Arun RBC Capital next

Your line is open.

Great. slightly Thanks different I question. way. guess in ask for taking my a similar try I'll a to question

in you So, up at $X.X guys were level EBITDA of QX. billion the

but So QX have seasonality and arguably, seasonality in you the some some should year QX, in could QX. full positive have

in year any about, couldn't So, billion? reason couple see anything Thanks. there is items discrete believe next should better than M&A full that of it know that be you we Are or contribution the the synergies $X whether any there to else or be quarters?

Yes.

our we that strong as So, pricing the as well in I provide stage. items I as could would we that the And PIM both discrete from items side guidance, don't any you dynamics -- has very see items performance, the discrete comments, would any specifically I that HIP you don't Arun, the forward-looking see call business see at guidance, the business. what this that a forward-looking construction, repair EBITDA out. would call but and side the momentum we in still But remodeling. call of in from of got you don't we I EBITDA And outlined certainly, the see know, as think

Okay. sustainability. Thanks, I another question Steve. on And then, guess

some just go So potentially from into the version of or of it little price your QX them serious given plastic given that inflation, and narrowed potentially the has you Thanks. have QX sustainable bit and even differential further versus seeing as inflation? pretty narrow are we for adoption premium products, could seen a some better price that

is Maybe on Thanks. This a questions couple Yeah. of that. Roger.

are uptake We seeing our on actually some nice low-carbon some of products.

our in now So sales We're well. caustic GreenVin and GreenVin Europe. PVC as Case seeing

seeing those to continue recycled work continuing our on post-consumer from to We customers. and well are polyethylene be our quite

So I think we'll continue to that. push

of all products our we right as premiums low-carbon pricing, margins, getting far now. As on small are some

So are some seeing growth well. we that as potential in future

Thanks.

question Ahmed next Alembic comes Global. Our from of Hassan

Your line is open.

Steve. and Albert morning, Good

morning. Good

morning. Good

particularly first I chlorine a sense, get just I I'm being size US a chlorine in and trying is on caustic, And I'm just fairly said, question also like to playing local for prices. The of and kind Europe global understand sort you having a market. understand Europe of this strong. in Chlor-alkali both with the to sense strength market a prices and natural caustic more are in being fairly is decent pricing trying better a role get of Europe where gas what they presence? Chlor-alkali demand,

Hassan. is This Roger Thanks, Yeah. again.

Europe. Europe the raw prices April. quite increases The We're in that's coming high seeing in in in Sorry. We're material very seeing pricing caustic. push with high

very caustic in were fact, In and significant. Europe

pressure. And so over attract of that's to course, time, import going

will So the world in now. But US right pressure see have import from starting we to both and high in price Asia I the point think Europe time. it's

as that just that Look, look approved. LNG in And US, the to I have team. it market advantage. it, And a market segments sticking the Understood. cheap have and longer take of, seems mean, in term part European terminals there there the are XX are at And I some that, Understood. of call ethane sustainability the been the the the been of natural the questioning sustainability with US. gas parcel

what that? on your thoughts guys' So are

see will Jose, a reserves. one think be you is world, we the the -- demand area. gas will biggest oil been there, gas the up, of price gas the price So gas-based and that low of segment, really there shale Marcellus in US, move production in I demand of and if have natural of has the more I think much that the not much very investments large because exploration more field these a gas, And large

of oil, gas be actually and and supply will which be believe more well. there gas production we there will liquids more So more as help that

much, helpful. Albert. Thank so Very you

Hassan. welcome, You're

from comes question of Josh UBS. next Our Spector

is line Your open.

taking I'd run thanks to be to again today? sales, my question. sales -- contribution either just quarter, on I one rate quantify hi, time. or the to wanted the more perhaps EBITDA, business you Yes, try of the kind EBITDA willing be for would curious,

in business say what would the this which I having the individual But of in se. over the in What the that not of contribution any in calling segment. say specific to per call going owned the but is Josh, contributions particular that months two we see year, aren't would within segment I'm February out course it, a out closed contribution has making made Xst. we nice nice course I business we do a

of just a Okay, kind seeing another opposite. you on through see change things. of strategy of of getting Is for else products the premium the is pricing in price maybe more you? follow-up fair mean are guys think the downstream is of lot or some margins enough. and cost And you are the lower, margin the quarter some in your under I something more leverage some premium of a the or price going generally, of this bit more a there a we pushing timing move on of business or I volume hood, side benefiting

and branded range, to value-added portfolio I'll here, improvement Well, that acquisition in that -- the saw of products comes Roger products. as Boral large but of a the branded our I higher let number margins. you higher add associated brought say value-added would with comments of really And along

in higher seen backdrop certainly and products. the quarter, of we get of a tailwind. strong QX of contribution conditions full is And in branded inclusion costs integration as we've the run a of a nice market think housing run so of rate those the value-added when quarter in a with the fourth I had that And construction full you rate without transaction-related you get the

really So, it's that I a performance combination strong the in both QX. to contributed think of

to Yes. HIP. in PEN, on will are importantly, HIP because automation our costs, we I further and digitization more that the but both content labor further working add in want reduce HIP and that in

And improve our production rates.

of trying out the leverage assets more actually we're to So, we purchased.

Okay. Thank you.

welcome. You're

of Blair Matthew from comes question TPH. next Our

open. is line Your

and Albert, good morning, Steve, Hey, Roger.

morning. Good

morning Matthew. Good

total, the starts multifamily housing was year-to-date. Should kicker the at XX%. XX%, look the of extra of year, I numbers? top strong about as to XX% it's on is baseline five-year Last average just data, If that only think starts it we an share housing around of

also the when starts R&R were the of we quite for think businesses that contribution the Yes, repair remodeling. I see first the numbers from in HIP and half course, you of remember, And our and certainly, benefited strong. think quarter really of with

strength on, but seeing only we're nice from permits also and really So, demand in in activity this that picture. the seeing repair from you remodeling pretty that remains underlying not floor commented a provides -- and business we're a the strength starts

buying rate the see -- more take -- there. could of on demand with potentially moving for XX the the very And towards, because in the there in for next is with also housing we be important rates, multifamily with age rising -- and the a investments mortgage years side. and And house low bracket remains high

upsizing but the the afford they think even people apartments can’t apartments, in choice if that. will impact spending all activity move as a mortgage home, bigger could their more time buy their that So into homes, moving, so rates they because people much, construction not the still potentially, to of and in if we home, live but the are will

coming in think pretty years. the to will robust continue activity be I So construct

Sounds that. far you on good. in away hydrogen? opportunities expand you revenue I And And from then hoping the release how mentioned hydrogen are could briefly. was

we chlor-alkali we that’s hydrogen from say, mean, today I in Yes, right. just because units. make would hydrogen, have I revenue right, our

hydrogen more currently a we that's internally as much what to where I from use burning. today, to forward hydrogen sites a so where of and becomes -- new we hydrogen number make economy, own on and our to that's we where think the a of work. And for premium come our have continue look But we starts sell part we in, it

Okay. Thank you.

session time, has Are And Q&A remarks. there at the any closing ended. this

additional minutes a take few in to the questions, folks remaining are have line. more any if we there think I

Angel questionnaire outage. an had is I next sorry, of I'm our Castillo Stanley. Morgan And

open. Your line is

on I'm with XQ were increases XQ how much you wondering is And versus how Good price relative to [ph] This in XQ? in productivity? morning. much cover Thank you're to cost Angel. Eliza for inflation able you. expecting

saw So could increases you the the creep of activity performance able first that quarter, the come businesses the the that as to relates marketplace. underlying into the pricing that cost to really naturally has overcome were in the see it we from question

pressure price Certainly, space offset price segments, the any strong we're and see as that saw PVC, expanded see both for to And margins products we in nominations we in we caustic able the you housing and and in infrastructure out really so polyethylene, picture well. cost. and actually

quarter, nominations that have through will at the fully hard portfolio. for pricing into some we initiatives second the portion we announced get this a these product we've or and that be So backdrop the to of certainly, strong certainly that price we certainly given while it's hope in to all demand stage, across announced able see the

believe And then capacity short you. Very I the helpful. in ethylene expanding about in investing pounds you future? and you're Thank your thinking of about Are billion ethylene. potentially X

is I This look we mean, Yes. Thanks, to opportunities there. at Eliza. continue Roger.

little low, at we'll earlier sense ethane coming to a the the over As belief we've today, make at in integration, But we look would ethylene talked down. margins ethylene with fundamentally, and in moment up bit are have continue is and opportunities see time. price quite to kicking if a something

Thank you.

come will McCarthy Research. question Instructions] of [Operator from Kevin our And next Vertical

open. Your line is

deals had that's some pure you've case, If on comment you exclusive include the volume that I the on I'm underlying reported follow-up. the that my press release, growth In taking volumes. imagining contribution from your the for of done. portfolio changes? volume think would you may XX.X%. question Thank you of indicated I a the

yeah. Yeah,

ramp-up HIP quarter, really that the weather see given And HIP construction really added volume the increase activity So the Kevin, the and in first business. so activity as noted, good side really in strength, in really the strength into up we really or quarter of in the quarter. Roger in did of in business. But the the businesses epoxy in see the contribution first and first is, of ramping that the obviously, obviously, normal volumetrically March has HIP, having the February the of we side in

components business segment nice per these specific about made se. calling we they but the any is a not in contribution certainly, that volumetrically, comments Our of of epoxy made we're increases out

Kevin, this is Albert.

you quarter, quarter at business If HIP with already first the all look place. fourth of XXXX, in our compared are

quarter volume went have business, quarter of it compared That's the the X.X% the first have very increase. XXXX business, fourth volume epoxy by of PEM is part increase. we volume-wise. volume, still And by the the up XX.X% HIP small organic So XXXX, and we business with for in -- by

And Okay. then for Thank capital to your you thoughts you wanted updated that. deployment. ask on for I

meaningful of four EBITDA generating is know, billion lot rising. and cash don't I done $X.X your And acquisitions, You've yet a you're so. or

So your I one EBITDA. XXXX leverage turn of suppose, will out below ratios, settle

So share market? how potential are in some additional this you about repurchases thinking for acquisitions and/or

most I be in the Kevin, it -- most deploy to capital So where it's continues value-added as say, an opportunity look and thoughtful to way the we'll way.

And in so to those. deploy when where VCM EDC, pursue these us the very to you expansions of think and and continue organically organically, opportunities are we'll other for episodic, some to opportunities seen about Acquisition makes and expand opportunities about talk opportunities good PVC, you've sense. it we'll look so look for

regular $X.X in we'll also see can employ which in about the shareholders regular to for You're we very and to where raise ways, And or in on in we'll way. cost-effective look can continued we that months, the dividends last a many on deploy and back look in right. certainly predictable from And invested able shares. have But to to a basis that be those certainly, capital form to of We've transactions Board a four pay dividends billion, dividends buyback. we we've share the buy basis. very authorities

but share creative buybacks value in So by the I the think and that in both appreciation gets through price ways. we're rewarded shareholder capital sure focused also value on and deploying dividends, making rewarded and

or look really value function been all our over practice really capital of those. call work. finding the to any putting years. But right of a the It's and And we'll acquisition it's many So any opportunity. organic out for hard timing specifically that's really at to

Thanks Understood. my follow-ups. for indulging

Happy to.

session at any remarks? Now time, has this ended. the closing there Are Q&A

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