Eastman Chemical Company · NYSE:EMN
Eastman Chemical — Q3 2023 Earnings Presentation
14 slides from Eastman Chemical's earnings presentation, Oct 27, 2023
Slide 1: 3Q 2023 financial results
3Q 2023 financial results October 26, 2023
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 This information and other statements by the company may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act wit
Slide 3: 3Q 2023 highlights
3Q 2023 highlights • Strong operating cash flow underpinned by decisive action to reduce inventories • Volume/mix stabilized sequentially, with improvement in some key end markets • Strong growth in premium automotive products • Continued commercial excellence in defending the value of our products
Slide 4: On track for Q4 2023 start-up of largest polyester molecular recycling facility
On track for fourth-quarter 2023 start-up of the world’s largest polyester molecular recycling facility 100% of plant systems expected to be turned over to operations within the next 3 weeks ~25 KMT of waste polyester pre- processed and ready to be recycled Continue to expect revenue around the end
Slide 5: Corporate
Corporate 3Q23 vs. 3Q22 highlights $M (except EPS) 3Q23 3Q22 2Q23 • Continued weak primary demand Revenue 2,267 2,709 2,324 Adjusted EBIT 256 333 336 • Customer inventory destocking completed across several end markets, particularly consumer durables and Adjusted EBIT margin 11.3% 12.3% 14.5% buildi
Slide 6: Advanced Materials
Advanced Materials 3Q23 vs. 3Q22 highlights $M 3Q23 3Q22 2Q23 Revenue 746 888 739 • Higher selling prices and lower variable costs Adjusted EBIT 93 132 99 • Continued weak demand and customer inventory Adjusted EBIT margin 12.5% 14.9% 13.4% destocking in consumer durables, medical, and consumables e
Slide 7: Additives & Functional Products
Additives & Functional Products $M 3Q23 3Q22 2Q23 3Q23 vs. 3Q22 highlights Revenue 670 906 747 • Aggressive customer inventory destocking in the Adjusted EBIT 105 143 140 agriculture end market Adjusted EBIT margin 15.7% 15.8% 18.7% • Weak demand in the building and construction and specialty fluids
Slide 8: Fibers
Fibers $M 3Q23 3Q22 2Q23 3Q23 vs. 3Q22 highlights Revenue 323 250 323 Adjusted EBIT 109 21 106 • Substantially higher selling prices for Adjusted EBIT margin 33.7% 8.4% 32.8% acetate tow were due to an increase in industry capacity utilization and higher Revenue Vol / raw material, energy, and distr
Slide 9: Chemical Intermediates
Chemical Intermediates $M 3Q23 3Q22 2Q23 3Q23 vs. 3Q22 highlights Revenue 527 665 514 • Selling prices and sales volume/mix were lower due to Adjusted EBIT 6 69 39 weak end market demand Adjusted EBIT margin 1.1% 10.4% 7.6% • Lower high-value spot sales compared with prior year • EBIT decreased due
Slide 10: Cash flow and other financial highlights
Cash flow and other financial highlights Resilient cash flow Balance sheet and tax rate Well positioned with solid FY23 forecasted Forecasted FY23 Strong operating cash flow YTD 2023 operating cash flow investment-grade adjusted effective tax rate $922 million approaching balance sheet $1.4 billion
Slide 11: Fourth-quarter 2023 outlook
Fourth-quarter 2023 outlook Tailwinds vs 3Q23 Headwinds/Uncertainties vs 3Q23 • Improvement in asset utilization rates • Primary demand remains weak, with cautious • Substantially reduced levels of customer sentiment customer destocking in consumer • Expect typical seasonal declines across several d
Slide 12: 2024 tailwinds in an uncertain global macro environment
2024 tailwinds in an uncertain global macro environment • Specialty volume and mix improvement • Absence of significant destocking • Modest recovery of some end markets • Innovation driving growth above underlying end-market trends • ~$75 million of incremental EBITDA growth from Kingsport methanoly
Slide 13: Appendix
Appendix 13
Slide 14: Underlying assumptions and modeling items for FY2023
Underlying assumptions and modeling items for FY2023 Updated • Brent crude oil: $85-$95/barrel (prior $80-$90/barrel) • ~$100 million headwind 1H vs 2H from lower asset utilization to reduce inventory (prior ~$75 million) • Interest expense of ~$220 million (prior ~$225 million) • Full-year adjusted
Eastman Chemical Company — Q3 2023 Earnings Presentation on 6ix