Westlake Corporation · NYSE:WLK
Westlake — Q2 2023 Earnings Presentation
16 slides from Westlake's earnings presentation, Aug 3, 2023
Slide 1: 2Q 2023 Earnings Presentation
2Q 2023 Earnings Presentation
Slide 2: Westlake Second Quarter 2023 Highlights
2 Westlake Second Quarter 2023 Highlights Net sales of $3.3 billion, net income of $297 million and EBITDA(1) of $690 million Elevated level of unplanned outages impacted operating income and EBITDA by ~$50 million Performance and Essential Materials second quarter sales of $2.1 billion with E
Slide 3: Westlake Corporation Performance Second Quarter 2023
3 Westlake Corporation Performance Second Quarter 2023 1) 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 – Soft economic conditions, in addition to
Slide 4: Performance and Essential Materials (PEM) Segment Performance
4 Performance and Essential Materials (“PEM”) Segment Performance – Sales volumes fell QoQ due to continuing soft macroeconomic conditions and unplanned production outages, particularly in PVC resin and caustic soda – Average selling prices were lower QoQ primarily driven by declines in epoxy and ca
Slide 5: Performance and Essential Materials Update
5 Feedstock and energy costs fell from the elevated 2022 levels, which supported integrated margins Softer industrial and manufacturing activity against a challenging macroeconomic backdrop drove sequentially lower sales volumes, particularly for PVC resin, epoxy and caustic soda Innovation and inve
Slide 6: Housing and Infrastructure Products (HIP) Segment Performance
6 Housing and Infrastructure Products (“HIP”) Segment Performance 1) Reconciliation 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 + Seasonal increase in residential construction activity drove solid Q
Slide 7: Housing and Infrastructure Products Update
7 Our diverse portfolio of brands at multiple price points is well positioned to service homebuilders’ changing home designs as housing starts are impacted by higher mortgage rates Stabilizing building products demand with sequential sales volume improvement as homebuilders and homebuyers adjust to
Slide 8: Higher Sales, Margins and Returns Versus Peers
8 Westlake average 25%Westlake average 16% 0% 5% 10% 15% 20% 25% Return on Assets Return on Capital Employed EBITDA Margin Westlake Chemical Peers Building Peers Westlake average 10% Source: FactSet: Chemical peers includes: EMN, HUN, OLN, LYB, DOW Building products peer includes: JHX, FBHS, MAS, PG
Slide 9: ESG and sustainability progress
9 Established 20% carbon intensity reduction by 2030 target and goals for natural resource use, safety, community engagement and circularity Developed products with an improved environmental profile (e.g. GreenVin®, PIVOTAL™ and PVCO) Aligning disclosures with Global Reporting Initiative (GRI)
Slide 10: Financial Reconciliations
10 Financial Reconciliations
Slide 11: Consolidated Statements of Operations
11 Consolidated Statements of Operations Performance and Essential Materials Sales $ 2,136 $ 3,104 $ 2,349 $ 4,485 $ 5,936 Housing and Infrastructure Products Sales 1,115 1,379 1,007 2,122 2,603 Net sales 3,251 4,483 3,356 6,607 8,539 Cost of sales Gross profit Selling, general and administrative ex
Slide 12: Reconciliation of EBITDA to Net Income, Income from Operations and Net Cash
12 Reconciliation of EBITDA to Net Income, Income from Operations and Net Cash Provided by Operating Activities Net cash provided by operating activities $ 555 $ 913 $ 512 $ 1,067 $ 1,613 Changes in operating assets and liabilities and other Deferred income taxes Net income Less: Other income, net I
Slide 13: Reconciliation of PEM, HIP and Corporate EBITDA to Operating Income
13 Reconciliation of PEM, HIP and Corporate EBITDA to Applicable Operating Income (Loss) Three months ended June 30, Three months ended March 31, Six months ended June 30, 2023 2022 2023 2023 2022 Performance and Essential Materials EBITDA $ 435 $ 1,162 $ 615 $ 1,050 $ 2,233 Less: Depreciation and A
Slide 14: Non-GAAP Financial Measures
14 Non-GAAP Financial Measures This presentation includes the non-GAAP measure EBITDA. A reconciliation to net income and to cash flow from operating activities is included above. (In millions of dollars) Reconciliation of Westlake EBITDA to Net Income and to Cash Flow from Operating Activities LTM
Slide 15: Safe Harbor Language
15 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 16: Westlake
Vestlake