Eastman Chemical Company · NYSE:EMN
Eastman Chemical — Q2 2024 Earnings Presentation
16 slides from Eastman Chemical's earnings presentation, Jul 26, 2024
Slide 1: 2Q 2024 financial results
2Q 2024 financial results July 25, 2024
Slide 2: Prepared remarks, forward-looking statements, non-GAAP financial measures
Prepared remarks These slides should be reviewed with the accompanying prepared remarks posted on our website. Forward-looking statements This information and other statements by the company may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act wit
Slide 3: 2Q 2024 highlights
2Q 2024 highlights • Delivered strong year-over-year sales volume/mix growth driven by Advanced Materials • Drove a 300-basis-point sequential margin improvement through volume/mix growth and operating leverage • Demonstrated continued commercial excellence by focusing on specialty product offerings
Slide 4: Update on ramp-up of Kingsport methanolysis facility
Update on ramp-up of Kingsport methanolysis facility • Fully validated process chemistry of the facility and made on-spec food-grade polymer • Demonstrated the ability to run the facility at operating rates around 70% • As we broadened the range of hard-to-recycle material, we are working through so
Slide 5: Next generation advanced interlayers products driving strong growth in a flat automotive market
Next generation advanced interlayers products are driving strong growth in a flat automotive market Leveraged to the fast-growing premium end of the auto market for both ICEs and EVs Delivered double-digit growth in head- up display and solar control offerings in 2Q24 Seeing increased penetration at
Slide 6: Corporate
Corporate $M (except EPS) 2Q24 2Q23 1Q24 2Q24 vs. 2Q23 highlights Revenue 2,363 2,324 2,310 • End of customer inventory destocking in 2Q24 across our end markets, resulting in year-over-year Adjusted EBIT 353 336 274 volume/mix growth Adjusted EBIT margin 14.9% 14.5% 11.9% • Underlying primary deman
Slide 7: Advanced Materials
Advanced Materials $M (except EPS) 2Q24 2Q23 1Q24 2Q24 vs. 2Q23 highlights Revenue 795 739 748 • End of customer inventory destocking in 2Q24 across Adjusted EBIT 131 99 104 most end markets Adjusted EBIT margin 16.5% 13.4% 13.9% • New application wins in the durables end market including Renew sale
Slide 8: Additives & Functional Products
Additives & Functional Products $M (except EPS) 2Q24 2Q23 1Q24 Revenue 718 747 704 2Q24 vs. 2Q23 highlights Adjusted EBIT 123 140 109 • Higher volumes in coatings additives and care Adjusted EBIT margin 17.1% 18.7% 15.5% additives • Reduced heat transfer fluid project fulfillments Revenue change % T
Slide 9: Fibers
Fibers $M (except EPS) 2Q24 2Q23 1Q24 2Q24 vs. 2Q23 highlights Revenue 330 323 331 • Improved price-cost due to lower variable costs Adjusted EBIT 122 106 117 • Volume/mix growth in the textile product line Adjusted EBIT margin 37.0% 32.8% 35.3% Revenue change % Total Vol / Mix Price FX 2Q24 vs 2Q23
Slide 10: Chemical Intermediates
Chemical Intermediates $M (except EPS) 2Q24 2Q23 1Q24 2Q24 vs. 2Q23 highlights Revenue 515 514 523 • End of customer inventory destocking in 2Q24 Adjusted EBIT 22 39 16 resulting in year-over-year volume/mix growth Adjusted EBIT margin 4.3% 7.6% 3.1% • Continued weakness in the building and construc
Slide 11: Cash flow and other financial highlights
Cash flow and other financial highlights Resilient cash flow Balance sheet and tax rate Well positioned with solid FY24 forecasted Forecasted FY24 operating cash flow Expect normal cash seasonality with investment-grade adjusted effective tax rate approximately typical 2H weighting balance sheet 15-
Slide 12: 2024 outlook
2024 outlook Tailwinds vs FY2023 Headwinds/Uncertainties vs FY2023 • Specialty volume and mix improvement • Lower price/cost negatively impacting margins, • Absence of significant customer inventory primarily in Chemical Intermediates destocking in most end markets (~$150 million) • Higher costs rel
Slide 13: Eastman Circular Economy Deep Dive - Save the date
SAVE THE DATE Eastman Circular Economy Deep Dive 11/19 Event location: Kingsport, Tennessee Join us for a tour of our methanolysis facility. In-person attendance by invitation only, formal invitations to follow. Webcast 13 of presentations will be open to the public.
Slide 14: Appendix
Appendix 14
Slide 15: 2024 end-market outlook
2024 end-market outlook End market 2H24 sequential FY24 vs FY23 Transportation • Projecting flat to slightly up auto • Projecting flat to slightly lower global OEM (~18% of corporate revenue) OEM production production • EMN outperforming the market due to • EMN outperforming the market due to innova
Slide 16: Underlying assumptions and modeling items for FY2024
Underlying assumptions and modeling items for FY2024 Updated • Capital expenditures ~$650 - $700 million; previously $700-750 million • Share repurchases ~$300 million; previously $200 to $300 million Unchanged • Interest expense of ~$205 million • Natural gas prices consistent with recent FY24 Henr
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