LyondellBasell Industries (LYB) 4 Aug 232023 Q2 Earnings call transcript

Hello, and welcome to the LyondellBasell Teleconference. At the request of LyondellBasell, this conference is being recorded for instant replay purposes.

Following today's presentation, we will conduct a question-and-answer session.

I would now like to turn the call over to Mr. David Kinney, Head of Investor Relations. begin. may you Sir,

operator. you, Thank

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

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

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

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

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

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

X. us Thank you, Slide all second results. quarter you David, XXXX welcome you. as Starting joining of with to discuss appreciate we today our We and

optimize half quarter. the the marketing During discuss our conditions team today's during that second the our navigate progress And also outlook positions moments our overview this let's to well our have LyondellBasell's provide markets will the long-term and results an made we take to the delivered feedstock plans as strategy. But year challenging as of with and call, of our second first, foundations a we will of we few to costs. advantaged resilient review for volatile

Let's turn and foundational commitment begin safety our discussion Slide to X and to with leadership performance. the

team deliver and results. outstanding Our continues to employees year-to-date safety is incident for X.XX. LyondellBasell's rate contractors

than XXXX, exceeds safety focus our our slightly performance industry. for While for that percentile the top our XXth results on higher to deliver continues

safety reflected financial and Our benefits produce are leading results that in our operations ultimately, our performance. in

Safety will core continue part a strategy of and critical our our for it and fundamental values enabler our is success. be to future a

our strategy. turn progress Let's and the review Slide on long-term X to

built Markets Capital a our is build strategy during and shared in we X As March, circular and profitable business pillars: upgrade up culture. Day performance around grow step and and solutions our core, the low-carbon

allowing our confident strategy, are we the slow current not we to business right are We progress. and conditions have

few past some of on actions Let these the over months. me highlight our pillars

of the performance strategy. Our and core benefits upgrade is improvement enhancement and in pillars providing see volume VEP within value margin generating to X progress is captured as rapid and the of these our am The program step the grow initiatives. of culture. part for growth up I pleased execution VEP and

will accelerated progress. run $XX VEP EBITDA on I minutes. $XXX XXXX raising annual our target mid-cycle details in margins million to more year-end reflect based on this for few rate our are to provide progress recurring million We by a

plant announced Last the in PO/TBA fits with our propylene in successful largest investing new our long-term the facility, In quarter, we upgrade grow of our and core, a oxide that strategy. are start-up the we world. business

performance our technology to to strategy. aligned completed new with This full tests that are our facility. ensure managing out our portfolio businesses of team the long-term We're all prove successfully the also capacity quarter,

May, first announced In we of we to operations the quarter than that XXXX. are refining no later extending our

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our the for to and Now society. second products to turn to drive from these solutions circularity and our business our the building address a committed leadership let's of low-carbon massive pillar demand strategy. circular profitable in customers We're and

by this incremental business expect $X of XXXX XXXX. at by We generate billion will billion EBITDA EBITDA and incremental of $X.X least

model partnerships recycled building technologies, of and our we acquisitions, other that renewable with advantages competitive multiple relationships Through with are come arrangements, downstream and and [indiscernible] brand feedstocks sources business and powerful new a owners. comprehensive customers from

on improved The and structure of organizational VEP drive excellence strategy Torkel and clear focus. our of our to were streamlined progress the alignment team commercial leveraging We're Last our our third pillar to performance our is of structure up the our making our Advanced step functions. our and we October, manufacturing performance line segment. to transforming and of across Solutions his with culture. solid improve sight accountabilities And customer commercial and Polymer improve

our side sustainable drive the profitable alignment delivering and and strategy provide in side LyondellBasell. Altogether, to and value of to for by pillars working engine X progress LyondellBasell's more capturing growth a are focus

Slide to and to approach leadership take solutions. circular Let's establishing a closer look turn our in X at

We Capital customer a our and our taking at low-carbon technologies, March, as LyondellBasell and solutions. business will regional gaining in leader based believe X comprehensive solutions Day on health stated establish advantage our is Markets the that areas: approach sustainable circular by in in key strategy differentiated downstream [Devon] relationships. As feedstocks

new plastic in our technologies. investments chains waste existing facilities value team innovation feedstocks maximize various is world. down and building the expanding chain Today, up the returns around bring and supply participation both scale driving streams waste further gain to into We're to of the and our through our

such external saw well As LMF and in recycling. proprietary process as are process Pryme's on as we pyrolysis recycling investing MoReTec advanced slide, previous you as internal mechanical the LyondellBasell's both Nord's technologies and

reduction our through Phillips June, with Channelview, develop unit goals, carbon demonstration with in signed are Texas. line to Chevron In we cracker MOU initiatives In and an an Technip electric our advancing partnerships. sustainability we

mechanical intensity products carbon to tailored we our of are increase the customers. the We and solutions APS power the our products for portfolio goal, superior procurement our to of have while support our around unique value deliver completed of purchase the of common LyondellBasell's development offering the world. of strengths upgrade leveraging renewable power customers. a utilize unique for locations segment for party reducing recycling agreements partnerships to the results our with These to And capabilities our each

of our Most goal these of differentiated annually. society. importantly, are we Since value approach to tons to scale. Step us uniquely or polymers. X customers million solutions the tons a XXXX, address polymers as by LyondellBasell's sell business we we XXX,XXX building positions are we progress renewable-based unlock needs that produced approximately toward step, these making and and marketed recycled provides XXXX have at significant our of

EVP will low-carbon Innovation can EVP technology Yvonne On MoReTec save with our Slide you Jim of business. join X, us Seward, and and der share Chief webinar September our and we circular that low-carbon a ask you Laan, the Officer; on solutions for and circular virtually. that details solutions XX, and more We van on date hope

program. this discuss updated Slide year's for target value to turn our X Let's and enhancement

well-earned strong cost a excellence company and Our for has reputation operational leadership.

entrepreneurial throughout to a Our across mindset value capture these goal more have strengths our launch and investments. build modest is through our on the agile the to inspired of untapped Since we company workforce. VEP,

annual EBITDA When we XXXX. by launched $XXX we value the to million run deliver improvements, and rates of program by end last XXXX the $XXX year, million enhancement announced of end of recurring the targets

plan progressing for XXXX. Our ahead team is of

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specific and in during recurring issue. to project value. on our low-density At Let's related $XX,XXX, team reliability of initiatives controllers. Slide VEP Iowa, manufacturing our the faced resolve few about these upgrade investment bit with VEP more rapidly valve providing of unlock was than to an of approximately executed outage get to the The Clinton, this challenges facilities chronic controllers X. planned a With our polyethylene annual required more team a was resources able $XXX,XXX a

investment procurement sites. our engineering across teams pool expand our Modest at supplier the and global unlocked motors opportunity for to an manufacturing electric

an We years. $XXX,XXX realized well improvement in cost benefit as critical supply total of as the only will next be $XX,XXX motors. These over security for direct of resource investment the benefits with these our expect a a X annual of

yields a annual Through at onetime control energy and butadiene will $XX,XXX. engineering resources distillation Channelview our yields, control invested At and the $X.X scheme increased value improve required new of better implement process facility, in million cost to consumption realize towers. to and steam we a we decrease

In direct emissions sustainability benefits, addition reducing kilotons. our over supports to COX this goals by the by project financial X

olefins EBITDA One upgrading install remove recurring a byproducts, in Channelview. from higher and million. to by and representative economic modest filtration solids benefit improvement the are a initiatives of margins system the $X.X at initiative from rigorous But in stream over is evergreen utilization our VEP program process. The is million tracking plant larger initiatives of analysis, will investment. we hundreds average portfolio. our byproduct annual in our our By increased VEP an supported annual through $X a examples than of These diligent $XXX,XXX of less anticipate the

create regular enhancement progress updates in to the organization initiatives good become value results. prominent ideas more to these you our look We on The providing our within been to rapidly forward catalyst our with program as has implement value.

on quarter. Slide to XX focus turn for and the results financial second our Let's

delivered quarter, EBITDA cash the cash billion market $X.X billion Earnings on resilient end liquidity. quarter, with of $X.X $X.X available and the our per were of was despite strong the During challenging $X.XX conditions. was share. hand businesses second LyondellBasell's billion. results generation At

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

let track Slide everyone. by Thank of record describing good outstanding extending you, and me how Peter, cash morning, XX turn begin our Please are conversion. we to and

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

Our quarter. cash of second end balance the billion was $X.X the at

team over of cash last EBITDA into efficiently months. converted our XXX% the Our XX

quarter. our The during second committed for team of Let's continue the our capital LyondellBasell returns remains cash Slide providing while to strong with and balanced allocation shareholders. allocation XX strategy details review the our

our businesses in generated the $X.X of cash from operating portfolio During billion activities. second quarter,

comfortably to $XXX through well of generation million repurchases. of shareholders cash robust returns Our $XXX our approximately dividends as capital our covered expenditures million share and as

start-up $X.XX growth. dividend bond In the year annual demonstrated After During will support our May, the our mark facilities by rates of to sustainability. quarter, of issued our our dividend consecutive first advance share. leadership investments on per XXXX we to strategy for first full successfully we the we new that green quarterly operating assets. increased X% quarter, PO/TBA in our in XXth these

continued capital investments growth are now maintenance Our in and focused projects. expenditures on smaller

With XXXX will at for the we and in original program the progress our increase higher to of $XXX the value enhancement our million expect $X.X than extension refinery, of billion, guidance expenditures billion. operations capital rapid $X.X

olefins third rates expect XX% operating for quarter, our of and European for assets. and polyolefin our the XX% just for refinery. we During below derivative assets American and polyolefins intermediates and and XX% our olefins North

our the and capital items, at estimates guidance, deck, modeling CapEx expenditures refresh slide updated we associated In of and the the including XXXX refinery provide with cost other operations extending on business. several appendix

provide to on from portfolio of of an during business of Slide quarter. our Now the like the $X.X EBITDA I'd The segments billion LyondellBasell's delivered XX. second overview each results

refining I&D polyolefins results strong, and higher in and our in margins reflect improvements declined O&P offset lower in Results Demand our businesses volumes, margins weaker spreads. refining feedstock to oxyfuels modest lower due remained margins. costs. business olefins refining benefited by for from while Our crack

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

you, Michael. Thank

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

durable U.S. goods integrated quarter, ethane margins second weak and Americas to polypropylene sales while increased EBITDA lower on increased American North continued million. higher to demand During polyethylene margins. impact the costs, prices $XXX O&P for $XXX million

due feedstock In we demand uncertain costs third to and capacity new the being is expect market the by volatile compress customers margins. cautious outlook. impacted the will our economic buying quarter, Also, entering by

our Peter strategy. are As on we slow business allowing mentioned, to conditions current not progress

the with announced we On furnace site. company develop at our June X, enable Texas technology electricity to electric an Technip use The MOU renewable unit Channelview, a as demonstration Chevron could and Phillips to solutions build business our many a heat source circular low-carbon This profitable is footprint and to ethylene the significantly greenhouse and for for cracking reduce gas just olefins of underway production. initiatives one LyondellBasell. collaboration of an

In Please margins Slide Asia and segment. lower offset polymers the demand used Europe, review ethylene the by quarter, for this Polyolefins turn but XX benefited our was costs we to International and products. durable from feedstock European of weak as second performance Olefins in

As million to EAI quarter O&P EBITDA increased a $XX result, second $X million.

we and recovery, economic uncertainty and with Looking Asian China energy headwind. supply expect with to combined the markets additional ahead, continue consumer European volatility. remain a challenging Slow to in be cost will

growing to our hub renewable based packaging LMF CLCS renewable and team recycling, solutions. model build in polymers a are to recycled from process, our regional our pyrolysis our waste circular continues consolidating mechanical we our Finally, in building and Nord, Pryme's leadership portfolio QCP investing of through flexible in plastic and recycling facility advance ownership out

on has Having and generating the I want operations. our cash value team emphasize from said that, to focus

is to and job acknowledge hard of work. and doing great sure all highly Our I seasoned team be both. a want at their is

call Now the over I'll Kim. to turn

Ken. Slide for you, look $XX in at to turn Intermediates Please the $XXX segment. as we million segment to the Derivatives XX and increased Thank million. second the quarter EBITDA

new Demand slightly for oxide derivative and Additional margins facility capacity decreased remains for strong were propylene offset goods. was by from weak planned continued oxyfuels downtime. largely demand when maintenance durable our Propylene on margins lower. oxide

In line we existing the conducting the planned on third are of during quarter from the propylene beginning with the assets. of our oxide maintenance guidance X year,

for to idling months U.S. approximately approximately capacity assets PO/SM the our of Europe at run in third XX% We X X I&D expect each global the which at includes and assets asset. quarter, the of in

half our plant. key the we of butane as to cost are year, seasonally the quarter, margins increase new Last compress In second oxyfuel we discussed of material. for successful expect raw PO/TBA start-up the

PO/TBA pleased that has quickly the report proud we team out I'm new full the incredibly am of quarter, milestones. our facilities. of This our accomplished capacity technology I to have completed prove reach test these what to to performance

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

The second a by $X barrel additional benchmark the at Spreads $XXX the crude quarter for other to quarter. as to $XXX settled Maya first spreads declined oil to our as further EBITDA Canadian million providing million run than headwinds refinery, declined X-X-X such crack our than heavy margins. by WCS relative approximately more the Maya,

crack low. X-X-X for remain the in the on are near of In our term, spreads the to to maintenance refined of operations remain above likely recent crudes, we quarter, historical work. the third elevation we and spreads rate ahead averages. as products demand will Nonetheless, for In expect inventories plan The This our optimal for we capacity. operate XX% to based asset moderate industry economics remain resolved. to refinery stable at Maya outages of and plans expect provides our products approximately refining

of are with estimated on committed In of a these focus remain maintenance the quarter, $XX operation an the We EBITDA to million. we assets fourth safe for high FCC impact with reliability. planning

first quarter transform develop later our to at activities We projects the support solution we site circular the than bridge low-carbon our are site of of and new extension no will help strategy. refinery XXXX. to growth as at to operations in extending This

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

Thank you, Kim.

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

while saw electronics demand the quarter. markets Second moderately costs business We prices for $XX to quarter automotive energy improved gained and from decreased. product the million. markets, EBITDA as momentum from increased construction company demand the Margins lower during the polypropylene increased and

the in most the quarter some gains We we Europe third half of automotive to expect have North and America. businesses. offset similar demand to seen in OEMs quarter in the will downtime first XXXX second quarter at production the third be APS Typical across of

next lot good our to restore restore service of and the levels refilling our in priority business depends with growth in winning customers our report happy automotive growth spot our APS X launch number in I'm progress color pipeline. business. next on the growth a have on restored a design. has is making APS and we we're platform to project-based pipeline the that service and to Our levels,

requests One half more In our a have the by the end team in XX% is number service. second number results. relative delivering transformation, concentrate increased second of performance by but Europe, tangible our our We color than to progress is KPI and quarter XXXX. we the that track of of complete we request the of to in improved path still making long the

our expertise call the our In our a early completed into located Peter. in fits to With high-performing perfectly Group, manufacturer be strategy Italy technical providing July, we that, to sustainable acquisition solutions Poland. the compounding for of I Mepol's of will the Mepol and turn back leader customers. in recycled compounds in sustainable

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

of reflected licensing expect third revenue catalyst moderately that Second million the and licensing catalyst revenue quarter $XX and volumes higher we In EBITDA will quarter, volumes. lower improve.

that quarterly will results As of to segment a result, estimate X the quarters Technology results XXXX. the in we seen first third be quarter similar the

proprietary first we quarter in that an will year. business. a provide of updates work low-carbon commercial during a up As and fourth is Cologne, Engineering to scaling circular decision MoReTec catalytic advanced our earnings the for recycling be the discussed We you scale this further plant commercial call, hope enabler in LyondellBasell's our solutions scale and for previous expect technology underway. for announced plant investment Germany with key

end the turn Slide to XX I regions by market Please and outlook and will markets. discuss

conditions and energy over fundamental from costs the the despite the you costs second see customers for potential and feedstock we the and Margins XXXX. that and from associated consumers. stopped leaders, consumer capacity. will of to relative our remainder markets, America's demand the near-term is business for are cautious our continue As expect pressured of feedstock we in buying European volatility challenging market heard and energy by be the quarter looms And moderation cost new to volatility caution in expected The year.

China, to goods, recovery the been are the not in measures. infrastructure consumer durable strength Services In slow and offset service packaging Demand for not by reflecting in has Consumer activity. initial much supported benefit Markets industries. stable, stimulus sufficient is export from

However, our customers keep continue cautiously to levels low. their inventory

by Building higher Reduction flat Act, maintenance We're existing of starts are tailwinds construction with benefits the as Science trading offset reduced and new markets the part resist homes sales law CHIPS and watchful for the States from into and Act. in from stimulus rates. and by the enabled relatively Inflation mortgage infrastructure housing owners be to United for

Demand automotive from momentum. be to market seems gaining

However, typical the may headwinds quarter. there third remain Oxyfuels some product to from be and low. refining as markets the stable see refined at downtime in inventories demand OEMs continue

At across well-positioned optimize LyondellBasell, the we world. our assets

continue rates our will stages We to and operating all through demand align business market the steered cycle. with of

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

despite strategy Our second team our is capturing Margins for to quarter results how new markets. improved O&P our challenging amid demand. tipid illustrate businesses value moderately our

refining Although low and our lower than supported inventories first the quarter, demand. remained oxyfuels steady by above margins historical and averages,

the of in our share returns. generation second operations $X.X outstanding over XXX% and billion and returned We $XXX repurchases, an with conversion in X demonstrating impressive from commitment million cash shareholder to in quarter Cash dividends cash quarters. was the past

polyolefins we and will and capacity anticipate to ahead lead soft third North the further compression. additional in America Asia margin Looking to quarter, demands

watchful and risks We the and across than mid-teens third geographies. to mid-XX remain quarter percentage lower We for expect will quarter. opportunities LyondellBasell's second points near-term EBITDA be sectors

slow X not our provided we new that to in value Day incremental March, At current are our I progress pillars strategy. of down. we excitement call want across our conditions forward today, allowing on around the our us And to capture Capital the during the we updates strategy. emphasize shared to Markets

frontline at around and and program energy accelerating world. developing value workforce, pace. and enthusiasm solutions has from Our LyondellBasell across innovative unlocking the value generated customers manufacturing incredible VEP engineers to serving to sales teams support enhancement operators our our is an

progress profitable now We're goal for deliver and growth sustainable We're your engine making questions. LyondellBasell. our more steady to pleased a take to on

comes first question Parkinson from line Our the Instructions] Mizuho. Christopher with of [Operator

Great.

taking XX. on Just a back step Slide

consistently Americas. at of highlighting, the the pricing, pretty There's in a volatility as there's there's a of same in little a be But going difference macro in bit XQ in time, a second the been picture. solid half. had you've You operating choppy lot to a been rates NGL

margins, the to at eventually take about half Just how thinking integrated XXXX, the we and And want just when olefin second dynamics? expect we're for you next look thinking run improve, in comments on should a and to current hopefully, be just how about year. then rate any inflect this the

Chris, the to that be question. we expect volatile. have thanks it remarks do the Like made, we Yes, in we said for

we've but NGLs So did going production inventory July, the NGL come NAV that in have here very not levels we prices is still but good July. That's August, impact to see really seen healthy news for off in growing. coming was is down. an are do peaking continue. and in The it

we're to NGL So advantages overall, with going see we U.S., especially that expect the production ethane. with in here

market. having the still lot the have do some continue it's the prices saw new of market. end let's Now We've to Americas the in green into into say, that's the seen And carry of at that, export the and coming we third to quarter. in the going shoots down third coming supply going quarter, a quarter, we second said into that's

But be a bit get think going better. What little we're of theme weakness here. would going some bottom second along forward. just when typically is I bouncing the see improve. then next that see expect quarter, normal kind to is QX So to that things it's the I I to will continued start expect that of going we're of really on when And half to fourth we volumes. year the support volatility into into going seasonality

of from Sachs. comes with Fischer Goldman the question next Duffy Our line

in versus the America. around split export North Question sales

would parts. maybe X if you So --

where are split their think first think and of their will U.S. that be operations? split? So in the you plants year X of do then is that think the you industry up about the Where or where in start when up, are you are starting going do guys you process on to

very question, Duffy. a That's good

and me to on olefins polyolefins Ken side. it hand Let the over

Duffy. exports Yes, in portfolio, that have so this of listen, percentage in year. a our traditionally been for see you we lower terms and

some of some got right well as driven the in the had first that by of Now turnaround capacity in our the of year. that half We've the now down is we've Midwest.

export first bit in the a half year. we've the So on of lower the little sales been

As their an XX% industry them But so typically or the XX% any XX% at products. goal at industry, the And change assets these don't but way in above midterm you're the see into that market. exporting highest I to the the find when that the the the level come Americas exporting is U.S. in value somewhere significantly the level market. our domestic that capacity. exports, for for Normally, being of it's around as online, is our looking they new around or to of first year always work

focus here that domestic. supplying our portfolio is is So on resilient serving and more the out customers by a building

Bank from comes with line Steve of question of America. Our next Byrne the

hydrogen you to concept Is of the with Yes. that fair at your your produce not do that require assume particularly this these if at along map, proposal. how a hub hydros rebuild And a the goes is that you would e-cracker retrofit. so, that you approach pursuing, economics have and that could multiple that refinery look versus DOE renewable you're complete if

call first scale. a Very you, of industrial technology all, what here developing we further good I partners are mean you're semi is, together into, question asking. let's our it, Thank the Steve. that with doing

is but replacing, is into cracker. not So feeding it a this

renewable looking are we how can ourselves, prepare Next in other and the crackers hydrotreaters following of that's And leverage to more refinery we we that that, at, avenues the at and order course, have. hydro hydrocarbons. upon what for I mean, different to we are here,

there be investing key the will we solutions we agnostic, fits decide that invest are So Then, to technologies say, there view. types of in being of different solution are technology an We're XXXX would playing, all my very technologies different is in course, broadly, on depending scale. plus on the eventually where be not in can and where talking the let's one industrial message, in about world. but then those you

Richardson the Our of next with Steve question from ISI. line comes Evercore

little was goals APS, ask I on It profitability. of you're appreciate then update. Torkel. making sounds you you also of terms to some if something the some about And more longer-term in could of good be talk I I be remind you unique. this us bit should wondering outlook acquisitions or maybe was expected like was wondering I persistent if if wondering a could inroads. your could of if if is there restoring the part

you. Thank

time. I I I are to at us expect So very right And as be at that target we have by what business to moment where is as that our the we billion I've to business this the the to say is we to have get $X.X current we communicated, expect that's be. is feasible led plan multiple And believe on. transformations, us the this earnings and XXXX. embarked

we earnings growth as is months X pipeline, at you we So and I last if X quarter where priority, have takes behind year then also look performance, of it, it I number and are us good feeling fourth was the improving but the is making our But time. gradually bottom, a and think it we're our mentioned, our focus. progress, is multi-year effort that we're for but us

in, there else of of have for but acquisition our acquisitions, think, I at the category terms that fit that moment. sort we are that Mepol, is that In in nothing space perfectly was the we an

in the just and APS to mean, with low-carbon business the between of I the mean to mean, I that, add circular I Peter. the look boundary, interface acquisitions, it's -- the here to one at Mepol needs solutions at terms And and the acquisition, then being compounding.

strong to recycling markets, acquisition. so Mepol and different made for So us mechanical those do that's has position attractive very that what a it in

with Capital from next RBC Our question Markets. of the comes Arun Viswanathan line

for wanted on margins to Just O&P your follow across and America outlook EIA. both North up

then had it you're further declines walk Or given us volatility of Are just like QX. there in prices, walk and that those just QX calls in volume? through your the continued just Or some weakness in in wondering, I is Can feedstock So for looking QX? it on we as through -- us it looks the And the decline in well of June recent maybe ethane from you it is or double-digit polyethylene. some $X.XX bit decline in mechanics? sequentially tanks. little declines of you both? calling for the profitability know a

mean, terms Yes. digits, in I in will And the the mid range portfolio first compared for that me improvements broad be what in has mid-teens bit of lower refinery all, remarks broad outlook, And we've repeat of to which have believe mid-XXs, mean, so EBITDA mid-double have very a we been still that of an Maybe a as let [indiscernible] markets. products. know, prepared I said different QX. we is QX, you to because of seen relatively why we

On the the right prepared one that of and hand as this oxyfuel now. the see olefins to be have remarks. will back being I you then But volatility polyolefins mentioned Kim time we mean, the in believe, point with at in China strong markets margins side, not should in that and as we continue I then, mean, still course, it

at course, that So we will more of quarter. the of then, towards the fine-tune end

on that will where Michael on you we'll in standing, are and I a give then update further a conference, When mean, speak we quarter.

I if some give the mean, with I So can question O&P maybe mean, on Ken, as you that answer that, additional? well.

at feedstock the peaked said July. kind had of we're I previously, like in looking Yes,

so us is are carried like coming about definitely sequentially. of Also, you I think said, end So prices QX, of into if down it versus in to normally with summer the going at QX, that. to especially hurt our the that there in that's seasonality component some see both slow is months, those start Then QX, to QX in of U.S. to the going peak Europe, is and QX, you in in be terms the volume fall volume headwinds. down.

QX I in of terms will that here we at we along some the like QX expect in as said, on have So bottom. volume well. in bumping slowdown are, being I Overall, margins

investors that quarter typically fourth And the remind then seasonally is I what to the would weak third. is

reminder. a as Just

Markets. Capital Aleksey line from of comes question KeyBanc next Our with the Yefremov

China far. in have the specific recently haven't the actually would implemented like included how seen It very on you industry, insight -- in benefit support any program maybe program, plastics sounds economic practice. color -- have be much so helpful just Do in their you is you that But Government recently. just into specifically any support

Aleksey, it's mean, could too seen have I where much we in will an that be. say, areas point couple have premature time, of a Yes, impact. But that this mean how at I impact eventually to

I but individuals industry, wait-and-see I saving the an talks position in because white market are around, following fact, goods would a rather as is we would see, industry, too people, initiatives mean, the ready. to of that. uptick mean, Our now we are have mean, of so mean, China. couple they talks far There high, and we've seems the need far, had mean, because I the know, I impact despite you about initiatives extremely if rates automotive on mean, the have not we all ground, that in I hoped so say the seen I as premature, but these to I mean, -- a

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

I question had I&D. on a

also indicated that that You turnarounds, from million XQ July noted and both in slide headwind in a in August, guide. plants that you months not included down assume $XX X shutting that's for the I PO/SM your that but of you're you're anticipating

demand bring what facilities in helpful. the before just be facilities there you anticipating Any are you with sort of I'm financial PO/SM those impact very So we more shutdowns the would back awaiting return should color curious up? of and be a

Very mean, I call Frank. done savings, but this, have like mean, we mean, we as last the at call happening what We don't say, I let's I we good cost well. And look year this, of Yes. is course, in question, marketplace.

know that we have our that capacities successfully. You one and with especially rather seen the PO/TBA new

We also upsides lowest lowest the have cost propylene carbon world. in and the footprints,

mean, role are So it's of clear, I PO/SM kind a that facilities more the swing playing of a capacity.

give to details. over hand Kim to that, with more will So I

Peter. Frank. Thank you,

from the Let for on other add offline understand guidance color, we PO/TBA more the relative the new Peter And that would capacity me at to guidance, and be we just alluded help taking provide investors difference to little capacity was to, really the of maintenance. that we really a PO/TBA this as bit looked when the bringing technology.

see they're the about new almost you that rate the impacts So which the maintenance can XX% oxyfuel offsetting, in what impacts both for talked the run We well of because see as is as guidelines. the you PO versus a plant other the assets.

is ask margins. assets styrene is on way impact down, month-to-month going the PO/SM very, So oversupplied, today. Styrene it's the very think to is the changing it about think market when where what's or about I thin you of

I there as So for think the Frank, demand impact plants as durable your on what globally. of would don't is answer demand I based -- those based at this regionally well an polyurethanes is on point time PO in idling how question,

question of Andrews the comes Vincent line next with Morgan Our Stanley. from

your range of operating of wide you for sort have targets within guidance, Question single EBITDA point a rates.

XX given how wondering lot they a fair a the about more just over operating I'm So months. than amount thinking rates past you're normal fluctuated

And so rates the profitability what are you're you seeing? solving for versus with operating those

I We're Vincent. to demand. matching supply it simple, other pretty wouldn't It's say way. any

Our next Mike Barclays. comes with Leithead the line from question of

a on Question that's I for And going $X did if EBITDA. supply or to bit dynamics look like some back, be energy is new EAI. below this of it profitability likely some now O&P of Historically, given annual Asia. in about time, on that billion the more seems just and coming business

the and how if are a term long just assets thinking about we competitiveness take back, there? of you So profitability your step

take can I you mean, Ken, Yes, that question? if

Yes.

generate highest Europe from can does European We've assets VEP in in we So things else energy business like has. we're because headwind good are there biggest the around course, listen, that program those value focused do from generating seen on value of standpoint. margin with the a probably that And through the the our still headwinds everybody demand.

volume is So pretty year-over-year. down significantly

As the equation consumer in Europe. hit the hard imagine, you very can whole has inflation

our operating to value that continue and we've reasonable there. So position ways of longer to look and But good at there. difficult course, the term, we'll with to make to sure deploy amounts assets. at do can we improve assets very so the we those that looking got most we're a going have We're have the we always capital from that we that for portfolio, to of continue competitive In would market. believe competitive we get we're can

of the Matthew Blair Our TPH. with next from question comes line

I had PE question outlook. on longer-term a the just

XXXX the range of which, are Some consultants the showing about of global you for capacity we've about in seen through is as recently. know, XXXX, what half X.X% growth

you number numbers, expectations? believe you specifically. creep increase you forecast? is so your this will the see do what -- late XXXX up? Or And this in Do Do is, like and too question really my meaningful think are to it any XXXX

quite I Matthew, increases. a have capacity with mean, I mean, normally, announcements Well, visibility. you of the good

industry I stream. that period with I not So would around because and that's road. demand. have announcements mean, the I the X, mean, years, I that -- our there down now is supply mean, mean, what, be in I on how industry to the been I announced the working. within normally additional and very not would come as that certainly that mean, Ken, if visibility regards, capacities X be surprised, is

So projects hearing seen down, I'll remind there comes the we that add capacity market. it that time. thing look, out only feels And some market. you, happens you're these to slow and too, And the like we cycles, have I the to to that, here every Peter, be of going always is it are in be right? -- get into also I will down starting about would we forever but

there yes, going to are that some are additions come. So

are those that's that a for be to the make to years of to capacities the of that on region that depending position some cycle going there but works. come they're how It are out. some going but their sense And feedstock and in, couple takes happen,

change there don't any I But some short see think the term, be to the in coming slowed significant on. in to you're in going expect So be capacity start midterm, projects down. to I do

you the then and at you XXXX than look XXXX, side, XXXX look from recovery. and with then XXXX, I certainly into it, if crisis in had demand history, the you if And a mean, the big financial

we've cycle, the year. And in higher around, mean same was is, also say, XXXX. than it normally let's So let's I growth the I pandemic, mean, per with pandemic seen, X% mean, I over the say,

second the saw that to with XXXX. During a year, recovery when you you -- compare

So I historic just I view. to from looking, we mean, be a mean, of point continue

the well on We there's demand demand future consumer to, the the be that over be could we cycle then that polyethylene. X% to per year have It about going also to behavior. mean, average growth a very in compared higher see of I

comes question with next of John the Our Credit from Suisse. Roberts line

time later $X in gasifiers some billion pushback closing going plastics? achieve delay the the in Will circular from and be the you're to refinery the EBITDA forth the location. the of at converting assume to so frame I

was It's in evaluating and solutions option, The so exactly clear on mean, have target unchanged you on Markets that as is, Day obviously, communicated Markets Capital answer been business and no. circular did Day, that I on it we I John, our not. remains, our if the the low-carbon mean screen. the Capital have we radar

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

you quarterly about million that the $XX what billion, number of you're and million is ago, does $XXX maybe Solutions, to in today, that earning your on -- guess million. about Polymer of happened were Advanced circular What expect I do EBITDA rate $XXX years run forecast couple business? think you in EBIT. margin a in And making polymers, Or from margin that? what still And EBITDA in $X EBITDA

for the Thank you question.

business but when is On we out integration. the took Day, And we the the project-based really went a Capital think of a this customer that this had through requires we It's I APS, and lot when focus our Markets the on a I lost and business cost centricity. covered we've business. really synergy the customers

confident transformation, integration that transformation deliver that perform. some it the up plan have what will recognition that But can that's and on. deliver to business have years. take it And And going we're it. a this making on to journey that's good We're we're I'm progress. is together really made to a put growth very have we whole from good that this good I You level not the really service a and and the pipeline mistakes very, think we

And it's then Michael. Jeff,

if O&P. year, that year current and looking of this significant put results relatively start from at I'd the removed results, businesses APS at we you're X remember, One historic back the the things versus add, in it segment of

apples-to-apples you're an versus comparison at looking this a not as year if just reminder. that's So history,

Jeff. on talked And know you in the that and on the $X to circular about then about $XXX Capital that margins the that X million target mean, I of we the The by pretty EBITDA our [indiscernible] by the -- business, back I top make, are mean the we normally is crackers. tons that on XXXX. much EBITDA I I in Markets When of talked about, Day, question, mean, XXXX by incremental we XXXX. can we your of Calculation million do talking billion you mean, the

So also you it bit guidance here. a of gives

substantially. mean, say, I creating, we business, grow must know at the today we to margins that are I we the have we mean with business the you that been I that quite able, I -- we're business, started look mean, since

higher low said, the margins mean, have Of Capital the I volumes what course, can albeit, Markets we we we capture or see level the to that the a compared than Day. in I overall at at mean, that still are having substantially We polyolefins. that

supply again, we are and keep its own its business is at pricing separate created. that Like mechanisms Markets demand I being that that Capital repeating own value-based the that. positioning in it's marketplace. a with has I And said the Day,

type have not is this premium polyolefin plus approach. you market a a a where of So

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

the question around others great. eye to guys an online you out revisit market that's a talked the looking with to European about, of been And mean, of the this coming has and wanted have capacity markets. as Just isn't Look, been lot exports earlier I the export in polyethylene U.S. U.S. the

way the rebounded hasn't expected one to. have it would Asia

the mean, seeing the its downward are product pressure way a making on meant where isn't in markets is PE U.S.? market and of the to putting further you export some I export that that for pricing So scenario was potentially

of year, the things, mean, more bit disciplined have running seen do, this learnings out maybe has already I a with is in a the there also substantially last we the a and in environment, end that that business been of since some pandemic One that to Hassan, marketplace. of has like

same a as the the we, the leader of into market. the mean, have output like just reduced, pushing products in thing. instead I have I industry, mean, done, So Others

my see the in in Ken, view, to to change, you of behavior anything compared, So history. mean, a you add? want terms I

it south. some be going I and There headwinds earlier, comes mentioned strength But there completely time agree also to capacity feel especially we're with then will capacity that. And and had coming on. that. said one before, export this market with like I is. on always seeing you will markets, in the some I the the adjust of

starting we're Brazil absorb some capacity. see help So like of that's some to some in markets going growth to that

So I'm not any more X ago. was months concerned about now I than it

last seen months. bit even a that looking better. couple Asia is of the over trend We've little Southeast

Peter said are it rates like the And time. optimize adjust cash. to operating to Michael absorb over had So our said, and going markets we'll

and concludes final for Vanacker our questions. floor the any allowed turn for time Thank gentlemen, comments. Ladies Mr. back that I'll to you.

Okay. Thank you very much.

we sharing and forward thoughtful wish usual, very safe. looking the usual, coming And value, towards great of on over the all months a as updates to questions. course, As you our unlocking very We're you much. additional weekend. progress stay Thank

Thank today's you. call. concludes This conference

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