Westlake Corporation · NYSE:WLK
Westlake — Q1 2023 Earnings Presentation
15 slides from Westlake's earnings presentation, May 4, 2023
Slide 1: 1Q 2023 Earnings Presentation
1Q 2023 Earnings Presentation
Slide 2: Westlake First Quarter 2023 Highlights
2 Westlake First Quarter 2023 Highlights Solid financial results reflecting sequential improvement against an uncertain macroeconomic backdrop: Net sales of $3.4 billion, an increase of 2% vs. fourth quarter 2022 net sales Net income of $394 million, an increase of 70% vs. fourth quarter 2022
Slide 3: Westlake Corporation Performance First Quarter 2023
3 Westlake Corporation Performance First Quarter 2023 1) Net income attributable to Westlake 2) Reconciliations of EBITDA, Performance and Essential Materials EBITDA, Housing and Infrastructure Products EBITDA and Corporate EBITDA to the applicable GAAP measures can be found on pages 12 and 13 + Bet
Slide 4: Sustainable Commitments Embedded Across Westlake
4 Sustainable Commitments Embedded Across Westlake Awards from the leading provider of business sustainability ratings - EcoVadis Partnering with customers to commercialize products incorporating more sustainable materials while maintaining product quality To further reduce our carbon footprint, we
Slide 5: Defining a Proven M&A Strategy to Drive Bottom Line Growth
5 Defining a Proven M&A Strategy to Drive Bottom Line Growth & Peer Leading Return on Capital Investment Criteria to Drive Growth Positioned for profitable growth1 Deep competitive moat2 Favorable market outlook 3 Strong cash flows and balance sheet 4 Product offering with sustainability attributes
Slide 6: Performance and Essential Materials ("PEM") Segment Performance
6 Performance and Essential Materials (“PEM”) Segment Performance + Improved global demand drove sequential volume growth + Sales volume shifted to domestic from export markets, improving sales mix and integrated margins sequentially + Feedstock and energy costs were lower on both a sequential and Y
Slide 7: Performance and Essential Materials Update
7 Lower natural gas and feedstock costs, on both a sequential and YoY basis, increased our structural North American cost advantage (~85% of production capacity) at a time of high global raw material and energy costs Customer demand improved from 4Q 2022 levels, which drove sequential volume improve
Slide 8: Housing and Infrastructure Products ("HIP") Segment Performance
8 Housing and Infrastructure Products (“HIP”) Segment Performance 1) Reconciliations of HIP EBITDA to the applicable GAAP measure can be found on page 13 2) HIP EBITDA margin is calculated by dividing HIP EBITDA by Total HIP Sales + Stable EBITDA margin on a YoY basis despite a 21% volume decline de
Slide 9: Housing and Infrastructure Products Update
9 Repair & remodel (R&R) activity remained relatively stable, consistent with its lower historical volatility compared to new home construction Slowing new home construction as elevated mortgage rates drive affordability concerns Longer-term fundamentals for housing strength remain intact due to dec
Slide 10: Financial Reconciliations
10 Financial Reconciliations
Slide 11: Consolidated Statements of Operations
11 Consolidated Statements of Operations Performance and Essential Materials Sales $ 2,349 $ 2,832 $ 2,361 Housing and Infrastructure Products Sales 1,007 1,224 938 Net sales 3,356 4,056 3,299 Cost of sales Gross profit Selling, general and administrative expenses Amortization of intangibles Restruc
Slide 12: Reconciliation of EBITDA to Net Income, Income from Operations and Net Cash Provided by Operating Activities
12 Reconciliation of EBITDA to Net Income, Income from Operations and Net Cash Provided by Operating Activities Net cash provided by operating activities $ 512 $ 700 $ 835 Changes in operating assets and liabilities and other Deferred income taxes Net income Less: Other income, net Interest expense
Slide 13: Reconciliation of PEM, HIP and Corporate EBITDA to Applicable Operating Income (Loss)
13 Reconciliation of PEM, HIP and Corporate EBITDA to Applicable Operating Income (Loss) Three months ended March 31, Three months ended December 31, 2023 2022 2022 Performance and Essential Materials EBITDA $ 615 $ 1,071 $ 443 Less: Depreciation and Amortization 210 184 212 Other Income (Expenses)
Slide 14: Safe Harbor Language
14 Safe Harbor Language This presentation contains certain forward-looking statements including statements regarding creating value for our shareholders, pricing and demand for our products, industry outlook for both of our segments, our cost control and efficiency efforts, our ability to capture in
Slide 15: Westlake
Vestlake