Huntsman (HUN) 3 May 242024 Q1 Earnings call transcript

Greetings, and welcome to the Huntsman Corporation First Quarter 2024 Earnings Call. [Operator Instructions].

As a reminder, this conference is being recorded. It is now my pleasure to introduce Ivan Marcuse, VP of IR, and Corporate Development. Thank you.

begin. may You

good XXXX and Welcome Huntsman's to Thanks, Call. morning, Quarter Earnings First Daryl, everyone.

Joining call Executive our posted on the first and CFO. us quarter the May website, U.S. President, and Huntsman, Yesterday, press released and huntsman.com. CEO markets Chairman 'XX closed, Phil our XXXX, via to Lister, X, Vice we and today President after are earnings Peter and release

our quarter website. of slides Huntsman and commentary of We XXXX opening posted first on to a some we a set provide the question-and-answer also and session call. will Peter the move discussing will detailed shortly, for the comments of remainder then

During our and are about forward-looking involve statements call, may are uncertainties me expectations current we risks and and All that make projections they while performance. expectations, such this statements, statements future they reflect remind for let not you or the of guarantees future.

SEC results filings You materially regarding actual cause expectations. or the should the our could for review to these more projections that information with from differ factors

not We quarter. any statements revising forward-looking publicly or updating the on during plan do

refer also EBITDA, loss such flow. as free non-GAAP net income will We or financial adjusted and cash to measures adjusted

the our comparable been most reconciliations financial measures GAAP in find can to our You earnings to has which huntsman.com. release, directly posted website,

the turn Huntsman, our Chairman to now call I'll Peter over and CEO.

lost quarter, XXnd #X time Ivan, was conference said thank first you things are this this on that call of few join to the Reviewing our recover February our all and morning. results in thank taking very quarter emerging. the to a year much, of for fourth the volumes. of the priority you I note

of and beginning throughout question this saw make were able rebuilding some inventory to pockets destocking We doing end we'll versus gains was demand a new were of attributed that in how the we business, first demand combination much and gains restocking. the of be The growth of modest During inventory we XXXX. and inventory growth. volume to quarter, more of

be about that X it by While area. vary should to customer conditions will I the X XX-XX. believe it merge gray into also to say customer, I eventually,

restocking. inventory begets improvement Demand

However, a Europe, American profitability, reinvestment markets in below QX, this sufficient below real of recovery. important, MDI we're we recover expand XX% levels, in when in normalized means growth some of I'm consistent North QX and where particularly compared XXXX, remember this XXXX. All margins. need back that Today's XX% pricing positive issue that bigger demand levels are cases, prices higher happy the and to to generation. dropped were is in cash from year to to merely see had we should where do To to noise our market is are achieve ago. demand equally have improvement are moving going demand conditions, a to to we return

During to flow. our cash the last we also call, improve outlined the need

we're in improvements prices face as seeing well, year later and working the in we as move volumes While in headwinds area sales up. capital this may

regulatory and continued XXXX, face inflationary in focus our in on costs of pressures. priority the third our global Our

X% We all global on offset to meet continue inflation. objectives to projected to track announced we the X%

capital fourth maximizing we're the and assess sure of to assets is continuously value we we how portfolio Our priority our the make deploy own growth. to for

of Finally, safety on license business our environmental our we compromise operations. operate the we This our to continue to is not focus performance. safety of will and on conditions, regardless and

our This also focus balance to applies on sheet. risk

not the that I'm jeopardize investment-grade surprised for All We rating seeing. conditions all, and gains. will we are in results by not our short-term

continues well and to as Our the quick pricing action will rationalization recover. us on cost, with discipline industry capacity serve

advantage quick get earnings us quickly and back to as take is and possible. objective decisive as these normalized conditions to of actions, Our improving

and comments. questions the turn let's operator, that, With -- over to time time remaining

come [Operator Patrick with the Our Citi. of first Instructions] from questions Cunningham line

of your seeing the be the where pretty China. think what you there more slightly growth expect And Some end with mixed year? view drivers is to on a some in strength and prepared I highlight reflect Can sentiment you're you positive markets remarks at the comments this point. throughout

Yes.

We of growth continue in auto. to see lot a demand

I that with much EVs. of that do fast-growing has domestic in around China, think to markets the particularly

that of automobile we Polyurethanes essentially about have as from As in insulation you into coming ICE EVs division, right EVs, a applications also around largest pipeline, forth. and and merging other them that number strength, are that our EV adhesion, which now think with goes are vehicle an developing is structure, we so that vehicle divisions applications. well the we're everything supply But are that goes the an into some lightweighting, our into division of

So think Chinese one I what of areas of stronger in be to long automotive probably continues, I it's China. continues think in that time the continue for growth some China. to How is going

as Europe, on joint limited, Chinese talk auto there's being with broader putting that a companies and see goes obviously, into into how question in companies. about with which is has vehicles how auto number EVs limitations and extremely Chinese markets, built Chinese obviously, there's ventured those going you -- that have a well of of a China, lot yet European the exporting export China U.S., which be been successful how long think to the I

a So greater going to be much -- there's be going that's to area.

certainly, insulation it's China, conservation, that -- But where projects and has energy Obviously, continue materials with that to there's of so insulation, forth, piping quite energy in heating, building to infrastructure And anything do central and and if conservation China. deal in related course, quarters a slow sluggish we in have said, X to pricing. pretty China that's large, think both but seeing. as steady volume and I recovery, it's we're in construction, But expect ago, we probably well. by what residential to

is exits year even expect then Materials do to over reflective element lower-margin And year-on-year, Is Or easier Advanced the demand? value And this detail. the there? any you were be this volumes Appreciate comp. or volumes underlying down whether volume, there on of year? Great. down it's of full just volume facing product

macro-GDP. at I rate of in the Advanced be the volumes growing on imagine year for ought overall -- would to Materials the

I think are be industry, little of and will applications you're infrastructure, automobile, coatings forth less better to will That a be bit going to your lightweighting, see industrial aerospace -- than electrical GDP, lot than a so areas growing EV GDP, like GDP. applications. maybe at going

add continue and value deal BLR And don't then a to the from great that to of basis. the a a we manufacturing technical so going we are commoditized more grades, resins really deselect or forth competitive

the years, see you and bag. away applications. steady in strip But the So continue couple you it more commodity that large, side last growth a of to over will the of if mixed business, be downstream by

line questions from next Fermium Our the come Frank Research. Mitsch with of

North about business in as said were out not polyurethanes in year? the but Obviously, only America of very we How and just you the you do getting back pace America, really you impressive 'XX. you through for growth mentioned, in were think play where volume North you as polyurethanes, but

better it, that a compounded Frank. and don't we're think the about obviously, better I'm Again, XX% going year. throughout I feeling growth, to see

now of kind steady forth. quarter saw And what in what seeing is just get a we and right lot back going cessation recovery slow the was first of a drawdowns so to be inventory as I of we and the we're think in-housing.

levels that in in this in quarters, and and to the large, recovering see And growth say levels, with I we of modest as like think look but couple -- throughout I applications all area, most feel by unequivocally next see expecting applications, to inventory pretty inventory can't around they're construction. thin think MDI. we're continue particularly I

Okay.

So slow kind is volume forecast. steady and of the

did side, about MDI we the we modest increases but now. margin margin in couple So -- in you How then have price highlight profile of for think the on right some benzene a regions, do stubborn polyurethanes? on

that going that probably I'm market early And the over some or around the improvements, be have we to around the be benzene the price. I you're to expecting don't next X/X prices. our price. be for conditions and think over would that's I next I X/X, headwinds pessimistic XX in looking improvements rest right, from so you're two. now, at projecting quarter volume XX do think of very hours. going I quarter, anywhere Right to about to in as to have so good that be Frank, quarter, But in the Again, at

And We're prices today crude going Typically, pool. looking to Brent. $XX gasoline down and you're the forth. at the year that's your filter so pushing into of versus in starting to the depending blending season on springtime, time WTI $XX this

benzene see will a bit on the to prices little You're side. of have upward we'll going pressure

those beyond So we those. material above recover going to to to high to price, and get and we're need raw have

up. prices that that's get a to So be going company is we've the in challenge -- as to these opinion, my #X got that's

in question next with Our Deutsche Begleiter is David come Bank. of

how threshold that will get the -- exceeded billion And at EBITDA longer-term back to looking long take will what Peter, take? $X to it past? that it the in you've

Well, I to the good it's the take we're we to ought If that's that or waiting A we market -- answer something going think conditions we that take to very X the -- it's question, time. looking to ourselves things. be recover, X merely objective ask all be not again, that ought for not for.

the years see got North more last so around more demand where [indiscernible] sort that couple it this do the where threshold that, probably forth. really industrialization. I we as they've than U.S. volatility, in over housing We us and looking need of we've around is million in Europe America. stop of that we there stability see that a policy come look need and nonsense to $X for the concerns starts around So to been was back think, housing And to

growing steady a I an nice has economy a of And recovery, China slow China, get once and think again. kind recovery. that's

I'd see I but something put to kind roof. the to don't just expect to it. people going come I stimulus major also are think I expecting or love that's it mean, to some through of it,

But just up we -- doing MDI you're as started coming COVID I a lot our to recovery taking be see China. are it think we what was Louisiana in to with look has going also of Geismar, just gradual in due full at on ourselves force. as a splitter I place that

$XX million, million, sell urethane expansion, that coming is solvents. quarters out, which are of of on amine's we've still that company EBITDA still we a catalysts split. going coming able once are ultra-pure million benefit these of $XX to to and to we're going expansions, the of chip we million we $XX are mean are able as were around expansions out Once moving, widebody segment of to up lines in cleaning, $XX the to we -- out not $XX $XX-plus that see and These projects the we're be in are million back Aerospace same going another at our the to we're and additional million to other as come that There's have pre-COVID. ought number ], E-GRADE to that them months EBITDA recovery. be full got demand amines be [ that we chip the as sell the getting I

a at lot be volumes these that our technologies. sound at on early now I a look cost part sort like arena We're $XXX starting of I of in 'XX. at MIRALON reductions product look -- ever issues. that we've first of the construction commercial a If million. the coming process right pipeline, the had be starting we're in the of I I the -- latter and time in X,XXX-ton that unit R&D selling reactor 'XX, look will there's part up the part the for and XX-ton at values I will early of know of

get EBITDA you additional of $XXX moving kind these But David, that control be aggressively add up, with. to ought million that idea another you that when million we to of $XXX we forward there's really all

to feel markets coming this successfully all do we've to to projects the up got but that so recover, that we've started And and execute we on year. I able also be need will be

levels EBITDA, that helpful. current very And half based should improve expectations. versus of the polyurethanes QX year, nearer just Very, on much term back

for earnings pleased our quarter hope of certainly team We're the be of in it. the be Tony from first the do up we would year. rest this We'll quarter, every I've were I I'll improvement where that can to as the we with from year. fourth XXX%. quarter If XXX% challenged -- quite the so. saw

Stanley. questions Morgan come line Vincent from next Our with the Andrews of

move ultimately start into just markets going your to monetary will a they customers the question we some construction once rate seems in we're do like How United to and building Peter, more of as move to curious, get talk a less when. It think obviously they States, you policy. in seem to fast indicate cuts. restrictive

there's [indiscernible] . right a in I bullishness building the quite think bit of now

now. if kind of less paths to of of you're amount kind I that same being they that stay happens be that are are, of going what for X That means where think pursued obviously, there's money. right getting the house rates

So build. smaller, cheaper a little maybe bit maybe they're houses to bit are little a

of And down. availability. cost inventory the to that the as house home And going we low board, though, continue housing homes, new across very new see be look is to we of

think so builders And doing at should to that. coming big there's been where and to filled. last open really things. be up also, couple demand to the and the there I They're be then two rates that are interest higher point a equipped I they let's rates And needs is scenario And a really that's to going looking where quite years. a than think be adapt of gap stay it's preparing and bit are the down,

And have been that Yes. to it we'll recently. more are improve we beginning. the just through the next Or quarter in or then you flowing businesses? the X housing just starts But little two? your see over a maybe X, And it seen see last lumpier Okay. benefit of is starting over to months,

-- I think well, -- of beginnings that. don't the seeing beginning the we're seeing we are think I

I'm look be to that expansion products, the get demand hopeful lack the of in we've of we the a at And quarter quarters, been additive to that next really over accomplish starts across in markets. the I and construction the housing benefit of in was and is ended And hopeful as that, I think, will that the the board couple saw thus able housing particularly we of sense far. certainly the right, many but biggest first what de-inventorying.

with Our KeyBanc from the Markets. Aleksey next of Yefremov come questions line Capital

consider tell you versus level? your volume what in North just Can America impressive in polyurethanes a where in us you Pretty today volumes and are volumes Europe. would regions two these normal

I happy think, we a were again, are, where to where but see I'm they Well, are very ago. volumes the they basically growing year

need at growth be And continued XX% don't I pricing. volume we needed expect really to and movement so improvements we -- on see sort Again, to continued to improvement. of

construction the we that starting and housing is And the see up. certainly, markets feel improvements. one are But to also loosening we're some

go rates down. now So if mortgage

biggest I be instantaneous will I the going business. North have impact variable American to near our in that's think markets. on that a And think the single

then I you XX% do -- math, up. this can year, mean as down year-on-year Aleksey last And the time we XX% said, and

were. we're below So we XX% still about where XX%,

And trend to started. so to that we where still need back continue to get see we

into Okay. you I and spray is your it QX about in to And wanted business. foam doing ask heading QX? then How

area for And our The continues look an market. foam foam spray a be builds. for a that, that is Well, single biggest competitive -- is to application market. spray new housing as be we competitive continues that to at us

and so XX%, year cost fiber still our volume look just of there in prior X% energy grew at business. forth, versus that low at head-to-head. But with we mineral the under we're you a the growth If going

continue but see margin see so got again, growth expansion to And got take is great we've to place see, there well. growth. see to But as pricing. We've we to

Our next JPMorgan. from line questions Jeff come Zekauskas of the with

can And I about of Europe, relative each in you MDI the China, and about your guess, the in in something Can you prices both and margins crude more areas? U.S. relative specialized talk for those say

Yes.

around ton, it say ton. polymeric -- per look $XXX, and we each within per our they're I'd As basically all at MDI, $XXX selling $X,XXX it's other at

that a region moving the of to point to right volume that see at sluggish be think to flat pricing. other. demand, I past would has a which pretty going you a kind incentive of when that one market flat you not pretty year, been see There's kind from And it's this lot So now. an this of you're tell

utilization, first looked I capacity will and about growth operating time -- as today forth. in the I reported growth me, in so quarter-on-quarter some mid-XXs the time media at somewhere in seeing utilization. at so for industry that first say, running in capacity for the though, so have in on a I areas, demand those we're where look seeing for And I believe There is number on excuse outages the have that quarterly year-on-year We're X growth of the in been recently basis years. a been and forth. optimism

of I We're kind and to mid-XXs. So picture getting to don't through dynamics the go into prices want utilization those a paint into expecting moving roof. that we're capacity see demand of the

in you're and seeing areas. areas Again, divergences to starting regional where some higher of some to start going probably prices into I think these hopefully. some You're get

guess you the on meant may joint that venture the can and XXXX 'XX. or for affect debt cash follow-up, liquidation I my in SLIC how And of flows and

comments couple of on point SLIC, out. a rightly Jeff, as Yes, you

that quarter, income, So flow cash on first EBITDA perspective, minimal we closed perspective. deal during the impact net

that put of in partners. on think liquidated gets where the which then consolidated to joint venture. back from last venture the I joint joint then last we go SLIC that need through directly into process cash a into million means XXXX, authorities, probably the into XXXX we call, to venture. Chinese $XXX said is the will What we liquidate That out cash that approximately you our unconsolidated with

back and directly. So getting you our partner, SCAC $XXX the of about think of Huntsman joint million that getting remainder venture

then leverage, effectively see our has because as impact on on progress process. X.Xx comes in you'll and we leverage it it It that in a gets the trapped up nominal a for is off balance about what back down cash through probably sheet goes it's So SLIC period, XXXX.

line of the Sison Michael Fargo. from come next Our Wells questions with

bit industry forward. think those to need going for pricing and are just to margin little you MDI. now where rates And polyurethanes establish get a Peter, better where operating curious

fact of industry, have you somewhere XX% of this the have Typically, around maintenance is that about for I XX%. to like your to given sold-out typically, a position. the this outages think Well, facilities. your of number through it's kind

As XX%, mid- we typically about said the the -- somewhere in past, in comes at XXs. pricing leverage to upper leverage

at that XX% pressure that. see to -- start move You you as through

So as necessarily quarter, about now, talking today in utilization second I first the right in and not would think about quarter. capacity your the I'm

probably you mid- U.S., Europe, demand. in needs XXX%. somewhere XX%. XXs, in able U.S. The in running to be which XX% China, the imports over it's believe XX%, satisfy probably you're up would I low that into I XX very the pricing today, high a you're which probably you're of to to where about capacity your add upper In is and percentile, your start pricing, utilization say you're all getting end what you improvements.

as outages what than seeing we along, start again, or really that's come Now you better improvements start you having outages, demand need.

that what operating a about industry, plant rates we've up sort X% in of XX%. puts in or we've the there past all sudden growth XX%, talking to where a around X% two or down been of given being that you XX%. XX%, XX% in XX%, or at been global the XX%, idea And being the So

overly one time getting a better points a the side the position But been much years. or last we've point in think percent other. the -- few technical we that with X any in I'm Sorry, here I we're than is

a EBITDA it's third sequentially the get be a better look good Got and I And second can bit third fourth? sort it. base into And early think the for about EBITDA but know to of XXXX. in you you the and to do the to happen how think what rate quarter earnings fourth would the grow to to think run do needs half, then little

bullish. year second worse go certainly and a our have rocky hell. And happen. ago Well, we the in we as strongly nightmares the we to a year of the recover got time That I getting we I to to a it's will the year is all and sins. and at of going just I'm the end multiplied back saying find the certainly we're in trajectory go finally, beginning didn't 'XX. half second going mean, worse erase of when sins and just again, where half be to very and where we ourselves more this were where were of

metaphor a So not that's probably very use. good to

half, And But seen consistent at movement see -- I year, again, look think anyway, I we the growth in said I good, is that as beginning this and a we've continued but we've know second think and to what we And the I've pricing. recovery. before, reliable, need of growth. this

we're look the we going. at as direction we're I direction like moving. moving where so which And we're the of

Our Ahmed of line next Alembic questions with from Global. the come Hassan

deflated made on of XX%. volumes. that we're Peter, revisit wanted not some basis, it you volume really I But ridiculously at alluded and Europe, the relatively strong, just flat. up to a the normal percentage levels fact still levels. North Asia Obviously, that polyurethane X%. on up America to commentary seems Again, you from

the So below just from obviously well seems normal it normal understand Asia. in mean we're me could with you I America. here. thing help North trajectory below Europe, and same

as So I region. mean, by well near as volume we how about term be growth thinking should medium-term trajectories

a probably Well, We're see stronger continue underlying to Americas. from second see comps going year the going I right to with our -- in Europe growth now and with it's look the books. dealing quarter, think continue modest we're ago. into But early easy to growth. order see average to we're than I that

hole, versus we've a last that start just And we've hole, the and deep that that And -- we more quarter-on-quarter about hole. point need we and that's we where So we year, And think and where that's we're I need think on are from focused get year I'd to out I be obviously, heading. were of first on. I growing ago. of think a gotten where we're this out to

would QX, this QX but remarks go to the improvement we we in that expect as than highlighted about in sequentially, get more typically, Hassan, a to indicated, you and And volumes, get X% you'll year. we when prepared

direction. trajectory the right the is in So

think like margins was cost But that being again. the that the thought, would Would there itself guys the getting of industry a a like X%, as going recovery positive things, red. production chunk as curves, lower further I'd in I the And the continuing terms And mean up call X%. is you I follow-up, polyurethanes of side margin pricing with on it obviously, you of EBITDA industry is to to in unto that of be improvement, still to or the guys X.X% just a big imagine cost happening. power on

I would that, certainly agree with Hassan.

I look though, curve the As in in I the U.S. the pretty think U.S., is flat. cost

size. we're You the far the major the boat None well. competitive it price for of look feels -- back like the at all same the is same relatively in all chlorohydrin the We're players have for into they -- the everybody. up benzene, in kind is same buying of our all The U.S., of in as benzene gases us as are everybody. kind integrated same electricity producing rack we're natural

some yes, still with operating. you're to So again, think you, relatively not are their I look see facilities. I still cost and privy some small producers. operates honest Europe, their I'm see. think surprised where high-cost I'm as Europe But And the I disparities Europe, you some anyway, low those size, cost as that's But economics. of about to be think at probably I going biggest of so facilities between the to

their has a of size, of and I think operating. newer it's In They forth. probably virtue magnitude. got single-line of facilities, I order are believe, lines Asia, their of lot certainly you've so don't have just lines Wanhua, single a -- by large-volume that

players. have think an other the a I advantage of over bit probably they

things businesses than get our molecule, will make Because disparity as those and downstream and both operated you value being between and forth. that but think looking going your money have manufacturing do elastomers more saw your that also, are important you start well to shouldn't at necessarily on and applications the in the economics, you agreed, our downstream Geismar, at going focused as adding we Europe producers. production. on on lost houses But very believe you cost like Louisiana, business downstream to you're If looking you're system on I so I downstream to start you going of splitter

footwear of industrial conservation, of some problems we number of Europe applications adhesion, Europe in have our and Europe lightweighting, where But higher-margin a businesses. in energy rewards also, the innovation so rewards spite of there's also and some and that

the Our Credit line with next Suisse. Roberts questions John come from of

Peter, Europe comments anhydride are else? there positive maleic cash below your areas opening mentioned and generation. some of -- that is anything Is

are made in I of we ought ask just we honest pricing our by better with moving I again, There look, demand. markets. got are be and you. need pricing where materials need of and to maleic business, European really that having we a of comment, about the to else, be and to lot some to the that if some of the also talking urethane some battle or as somewhere get with coming end I When where up import urethane we had But to product the sluggish get and to it's be our large, say we're we ends I'd up businesses. of ourselves going in mind maleic business the commodity struggling to

that the still are volumes my of sustainable. not, margins downstream not in are those some and opinion, And applications urethane are

And already resin had epoxy then BLR had exited thought that's there. you I

are much else is how exited to exiting I left what that before you you and So go? thought

our our Well, some again, baseload that when facilities. will businesses, to we look epoxy grades we commodity we and we at do of as produce epoxies, of continue do some

is take emphasis forth. be moving so going it volume components that and to to continue Our and into value-added higher able to

volume to place that always production end bottom the more of place of your on going scale. yes, be the be end have -- takes consider end some do exiting pushing the that low of I margin take that -- reactors But and reactions of commodity and you're to that the you that upper and that

where we our that sure not we BLR. to talked beyond as at I look well. So BLR necessary emphasis necessarily capacity would basic we say all just want and that our businesses isn't it's as availability be all exiting and put about that may just

I XX%. Yes. for be And BLR mean, used about John, to context,

of XX% have years. Today, as back we volumes, Peter about appropriate. go you it's down continue our to still If that move business, some XX and we when says,

of next with line the questions come Salvator of America. from Tiano Bank Our

Yes.

So in example, have without firstly, How you epoxies quantify, you some that side? the looking couple business can have put by you products? selected to volume of away was that at QX. years, XX%. can context commodity declined would for I been versus think wanted businesses growth your the much when continue where high-end you just impacted discussion. what like-for-like commodity low-margin that volumes of on said And was past around your the walking into also, also from how much I And And you

Yes.

So X% at I the We and it you business, We area aerospace, grew year-on-year. grid overall Salvator, automotive. think Advanced the in said grew look sales in we in actually well. as grew if Materials grew power

talking business. of down. commoditizing X of of business, areas, those there throughout growth. commodity some Materials where coatings. we year-on-year, XX% did So you're more part Advanced the year And also infrastructure was down was The the as overall was And well about just away our BLR part there, from low-end deselect some that well we moved

power into automotive. some out you took commodity, that into given seen of would given our volumes have you if So growth and aerospace

as XQ growth little We that sequentially and quarter-on-quarter of bit say And volumes terms between uptick. an and I materials in saw of quarter-on-quarter, a see our advanced XQ would X% usually the well.

that there's And not associated sales that. with volume question a selected, -- EBITDA that's then [indiscernible] the lot of that be is to gets

seeing this downstream more companies to bit shift, you terms -- We're epoxy of forward? the been years. guess, pressure? the of a Perfect. since, epoxy into I has competitive a well. an couple already products making systems I Is suffering for for from seeing is trying here you've the more you're something and of going -- other as commodity Okay. concern market Or downstream seen some guess, in value that And little

many out Well, power instance, would the of into, qualifying you're grid applications These sold typically aviation to go on our forth. for years are contract. so for the where XX basis X and a on and electronics, selling

they change into don't will market, that the a If typically you're into aerospace Boeing Airbus an come, or qualifying and project application, around fighter going you're selling be years for or jet to to suppliers. to be

formulations so and forth. and specs change You don't

and power aviation. The the of of other end kind I the and kind of look business beyond

really the and more see that think And is competition applications, our from I you're coming not other fragmented non-epoxy replacing other to epoxy, aggressively segments to where be we're just an materials coming typically that application or with. are Epoxy companies competition we're either comparing see seeing businesses materials, that that we will competing people that But against from most other typically, competing rule necessarily have. not is just business, other would as this thumb, the are materials any epoxy. Remember the so of us that in of a than us. we are incredibly competing not I but going of the companies That

Vertical McCarthy come of next Research Kevin with Partners. from the Our questions line

question regarding had I margins. a MDI unit

gallon So benzene And the in little are well. bit costs north a of have U.S. been lately. as rising $X elevated a your prices

margins improvement craft for And guidance make million so if to of $XX I I'm pound? cents you baking sure the maybe yes, net out, MDI answer like those in It unit Are is when $XX for want but things the polyurethanes. per correctly. just understanding two sequential sounds terms that of I in you your to million

Yes.

the improvement developing to more the I most that's assessment. is think and get is second going correct think we than that's improvements offset prices. going improvement why see see point. price Kevin, that at as this those prices, quarter ahead to I the trying -- I be time, at I expect the to -- third we're and to price into material we marginal simultaneously And around the a say -- to quarter of and rising volume move raw trying think I same of We're perhaps be

as expect move And a also we would we well. Peter say we said, that's has largest did QX relatively focus and low, to material. nitric as small chlorine benzene QX because from And down general, ammonia as margin unit slightly we remains onto been as there's on in raw Kevin, from been the QX. improvement a see slightly do good I small Gas a down QX. And to move has then improvement

consider polyurethanes. through are to of materials all that So flowing raw you need the into

as mind, And the to the And good. tempted question, my ask remarks. optimize about your I've Europe to seems at X your as discussed in portfolio. the look objectives I'm I center potential think improving effort. cyclically, in maybe Very Peter, like things prepared year for X to been thinking then, that you just of second a is is of like are things

some arguably hand, other to you've also has addressed nature the problem On Europe as more structural in the in past.

to for two to less words, come is what more So the term against if are deployment capital how outlook may those you back, how for weigh on be assets fully do longer the region, other that profit and loaded exciting medium things scale? starting over put you In the European in a example? the do

well. Well, question, it's one It's a complex a good Kevin. as rather very

and So on. But they the to don't around give today briefly balance to we they economy where signals where they When are touch sound I'll of today, and want -- uncertainty I I say, but are are certainly -- don't are want protect just want here. the false where to margins sheet.

lever is go and and balance time so put the the sheet uncertainty not And to market. up the this into out

is may, be what look the to industry a you're of consolidation, it together. potential mergers, lower sort want opportunity you're may, at tide I at at be of and Typically, looking time where assets when this earnings bringing lowering those looking may looking It everybody, to at a you're an might if emphasize structures.

you're typically near economics. You at look wouldn't when peak

looking and and forth. are conservative, be mergers potential tendency and to be you're that's earnings that's economics your balance your protected, side. sheet M&A near When something sheets to people on at more the more to peak down, You're stretch so aggressive a capital to going more do have balance

those big cycles as through, that, not to go steep single protect We of saying in industry with don't some to we're obviously we're again, now and very you do that just do puts have the that anything our I doesn't value. of same we maximum assets. the are we And still at questions. because time, we relative markets overall we got assets. the are the off value best through is mean want these just going We've balance that floor. our are our that balance on And to sheet. looking look somehow to stop to But I'm owners assets that that market reckless to merger. going want We're sheet. stock getting to coming saying asking the And at be able at a to down we're look

line questions with come of Josh the next Spector from Our UBS.

up Polyurethanes. to wanted follow I on

that I at guess think consider you into comments, I in I the you're in what's some savings. getting normal point? cost rating you maybe run do guess, this half, back I bridge if an improvement the normal you about at normal this the get structure talked to cost in obviously back prepared you what $XXX million, segment. point? guess you have to around changes you're some to, doing alluded the second

pushing going to demand probably your got cylinders, be pricing. something urethanes think in sold slightly this bridge going normalized I normalized you're on at saw volumes, the need high that Well, sort both, looking the somewhere that ought just are and when at margins XX% thinking there. when business again, get mid teens, higher be higher basis, on splitters out, XX%, to to you I'm a be to that there we're EBITDA to that and all in and of strong looking of it's it's and going very that demand, market, our pricing is conditions But a But in I when the period of MDI of But get again, -- XXXX can business to XX%. market are is north the you're you've mid-teens, time running margins.

quickly, That's helpful. buybacks. If just could on ask I just

versus would do I rest your that's of plans expect buybacks the quarter. the to play around the because didn't of through year capital out? just quarter how the working You you the assume flows in any for the year. But

think I now, Board buybacks. and quarterly again, -- in I of something second a most And assessing basis. right assessing that's the in share us discussing quarter-to-quarter and will we'll don't that doing certainly a quarter likely be on see on we've that be basis. the But the quarter third

Blair Pickering, Holt. Our Tudor, from next and questions with line of come Matthew the

your to Peter, you're markets where bolt-on exposure Or more perhaps looking ad for acquisitions mat. you you exposure? you are increase there diversification? aerospace mentioned that to end are for looking for you're more specific looking get in example, Are looking

for think to I'd we I acquisitions, can private think anything be able question to like something like we'd for we that to is can't chemistry that's that we do do look the be margin that what when I to mean, ask opportunities do. high have equity got around -- looking I'd that unique. the at

great didn't to a rather down as footprint. CVC were really into there I'd application any applications at say -- acquisitions. owners look go And much that than have went great they one Our of in specific the we and The globalize integration. downstream the out We recent was they acquisition, our opportunity horizontal were as growth. up we on these previous acquisition integrate Gabriel to but the as an existing acquisition, companies, more

bring those. where no, a to downstream for where and example. put customers, aerospace, we're saying be our applications on But continue bring I technology to to to to specific focused a to So we our globalization we're think don't we're going emphasis bring and we on have greater solutions can uniqueness customers, to going

new MDI other about Sounds projects expectations? XXXX? been reports your There's Is there talk next good. is the that the of the few docket your into could expansion you that then are And years? with for this any expectations supply XXXkt quarter. And in some a the on starting year for Wanhua rest up or big line

Yes.

pricing they're I coming market going do continues as that. do. But good sure market for pretty to to and continues expansion Demand capacity after I is be be to think But of a look, at going Wanhua -- whole us. continuing lot look on, to I'm from there's grow behind not mean, what that I I the modestly that mean, comes to Chinese Wanhua is a sticky.

or new there's be don't coming everything those capacity North see coming in -- in outside any ought operating on. nothing America to anything, I segments, look I as if so on Europe. two you market but If of questioned China, And

Mike line questions with next of Seaport Harrison from Partners. come Research Our the

Asia. I was if you're could about opportunity. foam spray wondering in the the on making you Europe you and that talk commercial progress for inroads some question on in Another

that just there? positioned China. how in there installation are And mentioned opportunities maybe You building in some curious you're

going as at area the in going going of real construction is This just opportunity. put other -- stronger you continue beyond there's of you areas in lot the the high than as where that areas, a Japan of seeing specifically there growth you Middle either other a regions. Middle energy cost to of emphasis on. lot this I to in think in we're some look of Asia, that's of new a or Yes. And be see to the East, these those on. we're case and around And East, as an just the look Japan

as These at are emphasize North prime look is related. for of you that both that areas business America, of vast, the majority U.S. the I Canada, and should us. opportunity vast

North business We the is to America. dependent are going health going in vitality and Asia, to but see growth Europe on that the of and be

the I on the on Phil, acquisition if curious and asset give All question What prepaid two items. items? those of some to right. write-off. And for question, The And related is gain a were assets this were each they us then just but can color apologize other? special stupid if you and a

the you're and They closing you'll did, the that to XX. number were right. restructuring transaction, see the SLIC related of each related to all we a quite was other, of Mike, SLIC That

tax. also virtually a all when movement of a on no of XX. There's number whatsoever those income. get number see on net XX net You'll And you together,

all ] with transaction net it the minimal So [ SLIC impact relates to income. to full

from the come RBC Arun Markets. Viswanathan Capital Our questions of next with line

to come markets. just of these of back normalization some to around I wanted discussion So the

your the around $X.X you're if think and think $XXX you're that you $X.X maybe million billion around above million, $XXX was $XXX half around of textiles, some down past, I peak tracking maybe the half of EBITDA of you kind first And second EBITDA plus to if in remove So billion. the million. maybe

the million So you take -- frame that the mid-cycle, from of? $XXX maybe And $XXX you right range kind going of price? trajectory? is to would to of million million and so volume in X/X $XXX that X/X kind if that thinking that maybe or How is $XXX million you're maybe

off that that any a see I to little Arun, think I'm more going much do area. sure, you're maybe not you're pricing. in one that

on You price X/X volume. and X/X, of X/X, you're a said kind

be here. I margin going -- that. to prices raw is need to offset recovery. probably to occur got just think material to have of We much so to it's Volume be and able get pricing higher pass to take traction to only

having 'XX. where and we of stronger in half would kind second price. mid-cycles hope That's got said So need have since look today, in better be that to far volume we peak get we the But I first. too you're I think that I I do am, that, the a off. at 'XX. that we to you hope your are the come no, But would optimist I don't

portfolio. Arguably, then not to of position back the going get necessarily question better. Europe here, is And cost in some probably just to maybe improving the despite Great. going materially markets

already. we would seen competitors a to reconsider certain in Obviously, some future? at by be of Europe some the you maybe areas some exits So in in in point some have your announcements position

thoughts to wanted just that. I on get So your

in that high we lot think I'm I Europe, at energy high the in about concerned Europe, regulatory mostly prices No, as look, look a but I'm concerned of about things environment.

Europe energy-intensive in energy are most As businesses high assets. I terribly look the cost, our at of not

maybe our I have assets. around concerns the individual again, of but So macro picture, some

large, think by and competitive. I they're that,

Advanced stronger do in world. larger areas business Europe in at the and that than Advanced we Materials APAC, Europe we APAC. be we between the do Materials, continues -- see and And have other in look than margins we us of a with strong very to business a much I for

right in okay again, you're to So you're segments, if aerospace, do in going lightweighting, adhesion, the Europe.

are and be going intensive glass -- energy which If cement you're and you're energy an that intensive. not, were producing to fertilizers, things things

you've real there. think concerns portfolio got some I

the in movement globe polyurethane at competitiveness shipments time. around of warrant and the right Europe be this North the of large-scale America moving So now to not cost does Asia versus

We're is there year ago. were this So today. -- obviously, that's a we where not

governments being don't to think an Europe. I they realistic don't I address things. a exit. that adequately being I high force see to think prices don't too policy addressed by the But in energy they're still are enough those there. I think bad have as

you. Thank

And reached conclude our We of have does with question-and-answer that, the that session. today's teleconference. end

at disconnect time. have may a your and You for participation Thank you this great weekend.