Slide 1: 4Q 2022 Earnings Presentation
4Q 2022 Earnings Presentation
Slide 2: Westlake Fourth Quarter 2022 Highlights
2 Westlake Fourth Quarter 2022 Highlights ▪ Compared to the prior-year period, fourth quarter financial results were impacted by lower sales volume1 and selling prices due to customer destocking, China lockdowns, lackluster European demand and rising interest rates: ▪ Net sales of $3.3 billion, a de
Slide 3: Westlake Fourth Quarter and Full Year 2022 Performance
3 Westlake Fourth Quarter and Full Year 2022 Performance 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 13 and 14 – Lower organic sales volume due to custo
Slide 4: Committed to Operating Excellence
4 Committed to Operating Excellence Allocate Capital Strong capital stewardship Environmentally sustainable products Sustainability Focus Ownership mentality putting safety first Empower Employees Investments in innovation and technology Continuous Improvement Attractive organic and inorganic opport
Slide 5: Performance and Essential Materials (PEM) Segment Performance
5 Performance and Essential Materials (“PEM”) Segment Performance – Volume fell 4% compared to 3Q 2022 primarily due to customer destocking and globally lower demand – Reduced production at select European assets in response to high energy costs – PE, PVC and Epoxy experienced lower average selling
Slide 6: Performance and Essential Materials Update
6 Industry-wide North American polyethylene inventory declined in the fourth quarter of 2022, bringing it closer to historical levels, which is contributing to improved market sentiment to start 2023 Cost-advantaged North America position (~85% of production capacity) at a time of high global raw ma
Slide 7: Housing and Infrastructure Products (HIP) Segment Performance
7 Housing and Infrastructure Products (“HIP”) Segment Performance 1) Reconciliations of HIP EBITDA to the applicable GAAP measure can be found on page 14 2) EBITDA margin is calculated by dividing EBITDA by Total HIP Sales – Seasonal volume declines compounded by customer inventory destocking and lo
Slide 8: Housing and Infrastructure Products Update
8 Joint Center for Housing Study’s Leading Indicator of Remodeling Activity (LIRA) forecasts 2.6% growth in U.S. repair & remodel (R&R) spending in 2023 Homebuilders report modest improvement in orders and cancelations to start 2023 after mortgage rates stabilized and affordability improved from rec
Slide 9: Sustainability Update: 2030 Carbon Emissions Reduction Goal
9 To further reduce our carbon footprint, we are allocating capital to both proven and emerging technologies, including additional product and operational innovations. This includes: • Energy-efficiency projects • Increasing power from less carbon-intensive electricity providers • Adding more hydrog
Slide 10: Financial Reconciliations
10 Financial Reconciliations
Slide 11: Consolidated Statements of Operations
11 Consolidated Statements of Operations Performance and Essential Materials Sales $ 2,361 $ 2,460 $ 2,711 $ 11,008 $ 8,670 Housing and Infrastructure Products Sales 938 1,047 1,245 4,786 3,108 Net sales 3,299 3,507 3,956 15,794 11,778 Cost of sales Gross profit Selling, general and administrative e
Slide 12: Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities
12 Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities Net cash provided by operating activities $ 835 $ 757 $ 947 $ 3,395 $ 2,394 Less: Additions to property, plant and equipment Free cash flow $ 538 $ 513 $ 629 $ 2,287 $ 1,736 (297) (244) (318) (1,108) (658) (In millions
Slide 13: Reconciliation of EBITDA to Net Income, Income from Operations and Net Cash
13 Reconciliation of EBITDA to Net Income, Income from Operations and Net Cash Provided by Operating Activities Net cash provided by operating activities $ 835 $ 757 $ 947 $ 3,395 $ 2,394 Changes in operating assets and liabilities and other Deferred income taxes Net income Less: Other income, net I
Slide 14: Reconciliation of PEM, HIP and Corporate EBITDA to Operating Income
14 Reconciliation of PEM, HIP and Corporate EBITDA to Applicable Operating Income (Loss) Note: EBITDA margin is calculated by dividing EBITDA by Sales; see pages 5 and 7 for details Three months ended December 31, Twelve months ended December 31, 2022 2021 2022 2022 2021 Performance and Essential Ma
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 and market sentiment for both of our segments, our cost control and efficiency efforts, our
Slide 16: Westlake
Westlake