Westlake Corporation · NYSE:WLK
Westlake — Q3 2022 Earnings Presentation
16 slides from Westlake's earnings presentation, Nov 3, 2022
Slide 1: Q3 2022 Earnings Presentation
Q3 2022 Earnings Presentation
Slide 2: Westlake Third Quarter 2022 Highlights
2 Westlake Third Quarter 2022 Highlights Solid financial results given the challenging macroeconomic backdrop and industry conditions: Net sales of $4.0 billion, an increase of 29% vs. third quarter 2021 net sales Net income of $401 million, after a legal charge, decreased 34% vs. third quarte
Slide 3: Westlake Corporation Performance Third Quarter 2022
3 Westlake Corporation Performance Third Quarter 2022 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 – Weaker global demand drove sequentially lo
Slide 4: Expanding our portfolio of sustainable products
4 We are expanding our portfolio of sustainable products and prioritizing implementation of additional environmentally friendly innovation by incorporating recycled and bio-derived materials while maintaining product quality: • One Pellet Solution (Polyethylene) – an efficient polyethylene solution
Slide 5: A Proven Strategy of Creating Value Through the Cycle
5 A Proven Strategy of Creating Value Through the Cycle Vertically Integrated, Globally Advantaged Robust Shareholder Value North America Focused Branded Products Aimed at Enhancing Returns Through Value Creation and Customer Solutions Superior Stewards of Capital Source: FactSet: Chemical peers inc
Slide 6: Segment Update
6 Segment Update
Slide 7: Performance and Essential Materials ("PEM") Segment Performance
7 Performance and Essential Materials (“PEM”) Segment Performance – Softening global demand along with higher raw material and energy costs drove lower sales prices and integrated margins for the Performance Materials portion of PEM, on both a sequential and YoY basis – Slowing construction demand i
Slide 8: Performance and Essential Materials Update
8 Epoxy extends Westlake’s end-market exposure to higher growth sustainability- oriented markets such as windmill blades for renewable energy as well as automotive and aerospace light weighting Cost-advantaged North America position (~85% of production capacity) at a time of high global raw material
Slide 9: Housing and Infrastructure Products ("HIP") Segment Performance
9 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 – Weaker new residential construction markets, as a result of rising mortgage
Slide 10: Housing and Infrastructure Products Update
10 Repair & remodel (R&R) activity relatively stable, consistent with its lower historical volatility compared to new home construction Slowing new home construction demand driven by affordability concerns as mortgage rates reach a 20-year high Longer-term fundamentals for housing strength remain in
Slide 11: Financial Reconciliations
11 Financial Reconciliations
Slide 12: Consolidated Statements of Operations
12 Consolidated Statements of Operations Performance and Essential Materials Sales $ 2,711 $ 2,322 $ 3,104 $ 8,647 $ 6,210 Housing and Infrastructure Products Sales 1,245 733 1,379 3,848 2,061 Net sales 3,956 3,055 4,483 12,495 8,271 Cost of sales1 Gross profit Selling, general and administrative ex
Slide 13: Reconciliation of EBITDA to Net Income, Income from Operations and Operating Cash Flow
13 Reconciliation of EBITDA to Net Income, Income from Operations and Net Cash Provided by Operating Activities Net cash provided by operating activities $ 947 $ 755 $ 913 $ 2,560 $ 1,637 Changes in operating assets and liabilities and other Deferred income taxes Net income Less: Other income, net I
Slide 14: Segment EBITDA to Operating Income Reconciliation
14 Three months ended September 30, Three months ended June 30, Nine months ended September 30, 2022 2021 2022 2022 2021 Performance and Essential Materials EBITDA1 $ 561 $ 946 $ 1,162 $ 2,794 $ 2,250 Less: Depreciation and Amortization 196 168 192 572 497 Other Income (Expenses) 12 9 5 25 25 Perfor
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 deliver en
Slide 16: Slide 16