Westlake Corporation · NYSE:WLK
Westlake — Q4 2023 Earnings Presentation
16 slides from Westlake's earnings presentation, Feb 20, 2024
Slide 1: Earnings Presentation 4Q 2023
1 Earnings Presentation 4Q 2023
Slide 2: Fourth Quarter 2023 Highlights
2 Fourth Quarter 2023 Highlights (1) Excludes “Identified Items” consisting of a $475 million non-cash impairment charge and a $150 million charge to fully resolve certain claims (2) Reconciliation of Net Income and Net Income Per Share excl. Identified Items to Net Income and Net Income Per Share c
Slide 3: Westlake Corporation 4Q 2023
3 Westlake Corporation 4Q 2023(1) Identified Items consisting of a non-cash impairment charge of $475 million and a litigation settlement charge of $150 million negatively impacted PEM segment reported earnings YoY sales volume growth in 4Q’23 in each segment, driven by caustic soda and chlorovinyls
Slide 4: Leveraging HIP Portfolio's Leading Positions in Attractive Markets
4 Leveraging HIP Portfolio’s Leading Positions in Attractive Markets Long-term Demand Opportunities • Over a decade of underbuilding in U.S. residential housing • Demographics and work flexibility drive housing growth • Repair and remodel spend • Residential housing growth • PVC replacing iron and c
Slide 5: Housing and Infrastructure Products ("HIP") Segment Performance
5 Housing and Infrastructure Products (“HIP”) Segment Performance HIP Segment 4Q 2023 vs. 3Q 2023 Average Sales Price -1.2% Volume -16.1% HIP Segment 4Q 2023 vs. 4Q 2022 Average Sales Price -9.7% Volume +10.6% Significantly higher YoY sales volume in the fourth quarter driven by demand for pipe & fi
Slide 6: Housing and Infrastructure Products Update
6 Housing and Infrastructure Products Update 2 Longer-term fundamentals for housing strength remain intact due to decade-plus of under- building, increasingly favorable demographics and increasing popularity of remote work 3 The decline in mortgage rates since their peak in October 2023 is improving
Slide 7: Performance and Essential Materials ("PEM") Segment Performance
7 Performance and Essential Materials (“PEM”) Segment Performance(1) (1) Excludes “Identified Items” consisting of a $475 million non-cash impairment charge and a $150 million charge to fully resolve certain claims (2) Reconciliations of PEM EBITDA excl. Identified Items to the applicable GAAP measu
Slide 8: Performance and Essential Materials Update
8 Performance and Essential Materials Update 2 Global macroeconomic conditions remain challenging and weak industrial and manufacturing activity along with sales mix shifts drove lower average sales prices, particularly for epoxy resin, caustic soda and PVC resin 3 Our near-term focus is on structur
Slide 9: Financial Reconciliations
99 Financial Reconciliations
Slide 10: Consolidated Statements of Operations
10 Consolidated Statements of Operations Performance and Essential Materials Sales $ 1,880 $ 2,361 $ 1,971 $ 8,336 $ 11,008 Housing and Infrastructure Products Sales 946 938 1,144 4,212 4,786 Net sales 2,826 3,299 3,115 12,548 15,794 Cost of sales Gross profit Selling, general and administrative exp
Slide 11: Net Income Reconciliation excl. Identified Items
11 Net income (loss) $ (487) $ 248 $ 295 $ 522 $ 2,297 Less: Net income attributable to noncontrolling interests Net income (loss) attributable to Westlake Corporation (497) 232 285 479 2,247 Add: Impairment charge, after-tax Litigation settlement charge of $150 million, after-tax Net income attribu
Slide 12: Reconciliation of EBITDA excl. Identified Items
12 Reconciliation of EBITDA excl. Identified Items to EBITDA, Net Income, Income from Operations and Net Cash Provided by Operating Activities Net cash provided by operating activities $ 573 $ 835 $ 696 $ 2,336 $ 3,395 Changes in operating assets and liabilities and other Deferred income taxes Net i
Slide 13: Reconciliation of PEM, HIP and Corporate EBITDA to Operating Income
13 Reconciliation of PEM EBITDA excl. Identified Items, HIP EBITDA and Corporate EBITDA to Operating Income (Loss) Three months ended December 31, Three months ended September 30, Twelve months ended December 31, 2023 2022 2023 2023 2022 Performance and Essential Materials EBITDA excl. Identified It
Slide 14: Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities
14 Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities Net cash provided by operating activities $ 573 $ 835 $ 696 $ 2,336 $ 3,395 Less: Additions to property, plant and equipment Free Cash Flow $ 291 $ 538 $ 451 $ 1,302 $ 2,287 282 297 245 1,034 1,108 (In millions of dolla
Slide 15: Safe Harbor Language
15 Safe Harbor Language This presentation contains certain forward-looking statements including statements regarding our cost savings objectives and our ability to maintain synergies, pricing and demand for our products, global macroeconomic conditions, anticipated sales volumes, expectations regard
Slide 16: Westlake
Westlake