LyondellBasell Industries NV · NYSE:LYB
LyondellBasell Industries NV — Q4 2023 Earnings Presentation
24 slides from LyondellBasell Industries NV's earnings presentation, Feb 2, 2024
Slide 1: Fourth Quarter 2023 Earnings
Fourth Quarter 2023 Earnings February 2, 2024
Slide 2: Cautionary statement
Cautionary statement The statements in this presentation relating to matters that are not historical facts are forward-looking statements. These forward-looking statements are based upon assumptions of management of LyondellBasell which are believed to be reasonable at the time made and are subject
Slide 3: Safety performance
Safety performance Continued leadership in safety and operational excellence Injuries per 200,000 hours worked 0.5 0.4 0.3 0.2 0.1 2019 2020 2021 2022 2023 LyondellBasell ACC Top Quartile Sources: American Chemistry Council (ACC) and LyondellBasell. Notes: Medium and large companies only. Number of
Slide 4: 2023 highlights
2023 highlights Resilient results and efficient cash generation amid challenging markets $2.1 B $6.46 $4.5 B $4.9 B Net income Diluted EPS EBITDA Cash from operating activities $2.8 B $8.65 $5.2 B 11% Net income Diluted EPS EBITDA Return on ex. identified items ex. identified items ex. identified it
Slide 5: Advancing our strategy
Advancing our strategy Driving focus, differential growth and value creation Grow and upgrade Shaping our portfolio to leverage strengths, support growth, increase the core resiliency and drive higher returns Build a profitable Building a leading CLCS business at scale to meet current and growing fu
Slide 6: Progress on our strategy
Progress on our strategy Targeting $3 B incremental Normalized EBITDA1 by 2027 • Sale of EO&D business • Potential NATPET JV expansion leveraging advantaged Saudi Arabian feedstock allocation4 • NATPET Saudi Arabian PDH/PP JV • CLCS Progress • CLCS Progress Successful PO/TBA start-up providing ~$4
Slide 7: Looking ahead
Looking ahead Delivering value and achieving our goals • Focusing on growth by leveraging advantaged feedstocks in growing markets where LYB can build or extend a leading market position Grow and upgrade the core • Taking decisive action to align our business portfolio with unique LYB strengths • Un
Slide 8: Accelerating value capture
Accelerating value capture LYB Value Enhancement Program (VEP) is exceeding expectations Up to $1 B Transforming the Recurring annual EBITDA by year end 2025 way we work $600 MM • Instilling a culture of continuous improvement and value creation Recurring annual EBITDA by year end 2024 while maintai
Slide 9: Delivering results through the Value Enhancement Program
Delivering results through the Value Enhancement Program More than 450 initiatives generated value during 2023 2023 Examples Manufacturing & Automation of Lake Charles Water Treatment Unit operational excellence Improved control system to minimize manual operations and reduce water consumption ~75
Slide 10: Outstanding cash generation
Outstanding cash generation Supporting investment-grade balance sheet and strong shareholder returns Cash from operating activities $4.9 B Cash from operating activities 2023 USD, billions $8 7 $3.4 B Cash 6 and cash equivalents 5 December 31, 2023 4 3 2 1.5x Net debt to EBITDA ex. identified items
Slide 11: Capital allocation
Capital allocation Investment-grade balance sheet underpins our disciplined capital allocation and strategy USD, billions Delivering resilient results $8 • Generated $4.9 B in cash from operating activities 7 • Achieved 98% cash conversion 6 Generating value for shareholders 5 • Increased quarterly
Slide 12: 4Q23 segment highlights
4Q23 segment highlights Significantly lower gasoline cracks and seasonally lower demand impacting several businesses EBITDA Variance by Segment ex. identified items USD, millions $100 $1,410 $(42) $1,356 $14 $910 $(443) $(6) $(54) $(69) $639 3Q23 O&P O&P EAI I&D APS Refining Technology Other 4Q23 Am
Slide 13: Olefins & Polyolefins – Americas
Olefins & Polyolefins – Americas Strong polyethylene export volumes partially offset by lower integrated polyethylene margins Inventory valuation EBITDA ex. identified items USD, millions • LIFO benefits of ~$75 MM 4Q23 market dynamics $679 • Lower olefin C4+ co-product value $604 $541 • Increased N
Slide 14: Olefins & Polyolefins – Europe, Asia & International
Olefins & Polyolefins – Europe, Asia & International Lower utilization due to persistent weak demand EBITDA ex. identified items 4Q23 market dynamics USD, millions • Modestly higher polymer prices • Stable naphtha feedstock costs Near-term outlook • Low European demand expected to persist into 2024
Slide 15: NATPET joint venture
NATPET joint venture Growing and upgrading a core LYB business: aligned with our strategy New capacity for our core Olefins & Polyolefins business • LYB to acquire 35% of NATPET from Alujain for $500 MM1 • LYB to market majority of PP production on behalf of the NATPET JV Leading assets with cost-ad
Slide 16: Intermediates & Derivatives
Intermediates & Derivatives Oxyfuels margins compressed from 3Q23 highs as gasoline crack spreads declined Inventory valuation EBITDA ex. identified items USD, millions • LIFO charges of ~$95 MM $708 4Q23 market dynamics • Oxyfuels margins decreased with increased supply following industry downtime
Slide 17: Refining
Refining Lower gasoline crack spreads coupled with asset downtime Inventory valuation EBITDA ex. identified items USD, millions • LIFO charges of ~$40 MM 4Q23 market dynamics $322 $315 • Gasoline crack spreads declined driven by seasonal changes and lower demand $249 $246 Near-term outlook • Improvi
Slide 18: Advanced Polymer Solutions
Advanced Polymer Solutions Lower margins and volumes due to reduced demand EBITDA ex. identified items Inventory valuation USD, millions • LIFO benefits of ~$10 MM $26 $34 4Q23 market dynamics $18 $12 • Higher raw material costs $(26) • Lower demand from automotive market during 4Q23 Near-term outlo
Slide 19: Technology
Technology Licensing revenue normalized while catalyst volumes increased EBITDA USD, millions 4Q23 market dynamics • Licensing revenue moderated after strong 3Q23 $146 • 4Q23 catalyst volumes exceeded prior four quarters Near-term outlook • Increased licensing revenue $79 $77 • Further improvement i
Slide 20: Delivering results and advancing our strategy
Delivering results and advancing our strategy 2024 outlook Progressing our long-term strategy • Modest improvement across most Growing and upgrading our core to drive businesses in 2H2024 higher returns Building a profitable Circular & Low Carbon • Benefiting from new PO/TBA capacity Solutions busin
Slide 21: Appendix
Appendix
Slide 22: LyondellBasell 2024 modeling information
LyondellBasell 2024 modeling information (USD, millions) 1Q 2Q 3Q 4Q 2024 Capital Expenditures O&P Americas ~$55 -- -- -- ~$55 Total CAPEX Major Planned ~$2.1 B Maintenance O&P EAI -- -- -- ~$50 ~$50 Sustaining | Profit Generating CAPEX Estimated EBITDA ~$1.3 B | ~$0.8 B Impact Intermediates & -- ~$
Slide 23: Information related to financial measures
Information related to financial measures This presentation makes reference to certain “non-GAAP” financial measures as defined in Regulation G of the U.S. Securities Exchange Act of 1934, as amended. We report our financial results in accordance with U.S. generally accepted accounting principles, b
Slide 24: Information related to financial measures (continued)
Information related to financial measures (continued) Normalized EBITDA - Assumes 2013-2022 historical average margins and operating rates and reflects the benefits associated with the following strategic initiatives: Grow & Upgrade the Core, Building a Profitable CLCS Business and Step Up Performan
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