Eastman Chemical Company · NYSE:EMN
Eastman Chemical — Q3 2022 Earnings Presentation
14 slides from Eastman Chemical's earnings presentation, Oct 28, 2022
Slide 1: 3Q 2022 financial results
3Q 2022 financial results October 27, 2022
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 During this presentation, we make certain forward-looking statements concerning plans and expectations for Eastman Chemical Company. We caution you that actual ev
Slide 3: 3Q22 highlights
3Q22 highlights • Innovation delivering growth above underlying end markets, improving our mix • Strong revenue growth led by double-digit price increases across all operating segments to offset continued levels of significant inflation • Achieved definitive agreement with PepsiCo to baseload our th
Slide 4: PepsiCo and Eastman have reached a definitive supply agreement
PepsiCo and Eastman have reached a definitive supply agreement Project overview Circular economy Polyester “PepsiCo’s Sustainable Packaging Vision is to build a world where recycling facility polymerization facility Mixed plastic packaging never becomes waste, and we collaborate with processing supp
Slide 5: Corporate
Corporate 3Q22 vs. 3Q21 highlights Selling prices up ~$380M to offset $M (except EPS) 3Q22 3Q21 significantly higher raw material, energy, Revenue 2,709 2,720 and distribution costs Adjusted EBIT 333 445 Continued slowing and inventory Adjusted EBIT margin 12.3% 16.4% destocking in end markets inclu
Slide 6: Advanced Materials
Advanced Materials 3Q22 vs. 3Q21 highlights $M 3Q22 3Q21 Modest volume/mix growth in specialty plastics limited by Revenue 888 770 production and outbound logistics constraints Adjusted EBIT 132 128 Improvement in the global auto market Adjusted EBIT margin 14.9% 16.6% Significant currency headwind
Slide 7: Additives & Functional Products
Additives & Functional Products $M 3Q22 3Q21 3Q22 vs. 3Q21 highlights Revenue 820 729 Strong demand for aviation fluids, partially offset by weakness Adjusted EBIT 126 131 and destocking in building and construction Adjusted EBIT margin 15.4% 18.0% Higher selling prices to recover spreads, including
Slide 8: Fibers
Fibers $M 3Q22 3Q21 3Q22 vs. 3Q21 highlights Revenue 250 222 Higher selling prices catching up to higher raw material, energy, and distribution prices Adjusted EBIT 21 32 Adjusted EBIT margin 8.4% 14.4% Lower sales volume/mix resulting from the planned and unplanned shutdowns Revenue change Total Vo
Slide 9: Chemical Intermediates
Chemical Intermediates $M 3Q22 3Q21 3Q22 vs. 3Q21 highlights Revenue 751 731 Higher selling prices due to higher raw material, energy, and distribution prices Adjusted EBIT 86 132 Adjusted EBIT margin 11.5% 18.1% Lower sales volume/mix due to slowing end-market demand, planned and unplanned shutdown
Slide 10: Cash flow and other financial highlights
Cash flow and other financial highlights Taking actions to optimize cash flow Balance sheet and tax rate Well positioned with solid Forecasted FY22 Forecasted FY22 Working capital a investment-grade adjusted effective operating cash flow $500M headwind tax rate balance sheet approximately $1.0 - 1.2
Slide 11: Fourth-quarter 2022 outlook
Fourth-quarter 2022 outlook Tailwinds Headwinds/Uncertainties • Innovation driving growth above underlying end • Global macroeconomic outlook weakening, markets especially in Europe and China • Modest spread improvement due to disciplined • Customer inventory destocking, particularly in pricing as p
Slide 12: Pathway to solid performance in 2023
Pathway to solid performance in 2023 Tailwinds Headwinds/Uncertainties • Volume/mix growth despite mild manufacturing recession • Global recessionary risks increasing • Innovation driving growth above underlying end markets • Favorable automotive market trends • Annualized impacted of a stronger U.S
Slide 13: Appendix
Appendix 13
Slide 14: Adjusted EBITDA to Net Earnings reconciliation
Adjusted EBITDA to Net Earnings reconciliation (Dollars in millions) Q3 2021 YTD Q3 2022 YTD Net earnings $ 487 $ 794 Plus: Depreciation 328 291 Amortization 88 69 Net interest expense 150 134 Provision (benefit) for income taxes 66 155 EBITDA $ 1,119 $ 1,443 Add back: Mark-to-market pension and oth
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