Eastman Chemical Company · NYSE:EMN
Eastman Chemical — Q1 2023 Earnings Presentation
17 slides from Eastman Chemical's earnings presentation, Apr 28, 2023
Slide 1: 1Q 2023 financial results
1Q 2023 financial results April 27, 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: 1Q 2023 highlights
1Q 2023 highlights • Demonstrated the strength of our specialty products and commercial excellence by holding prices stable to fourth quarter despite weak demand and continued inventory destocking • Issued first investment grade USD-denominated senior unsecured green bond offering by a U.S. issuer i
Slide 4: Expect to achieve critical circular economy milestones in 2023 – 1Q23 update
Expect to achieve critical circular economy milestones in 2023 – 1Q23 update Expect to produce commercial Projects on track with good progress solidifying quantities in the Fall and revenue by YE23 commercial and feedstock milestones Tennessee France 2nd U.S. project project project Begin commission
Slide 5: Project MSD% topline growth and strong incremental margins in modestly improving global auto market
Project MSD% topline growth and strong incremental margins in modestly improving global auto market in 2023 Performance Films Advanced Interlayers Coatings Additives Manager R&D Automotive Market leading brands delivered >3.5X opportunity per Glazing, Global Mercedes-Benz leader AG in specialty addi
Slide 6: Corporate
Corporate 1Q23 vs. 1Q22 highlights $M (except EPS) 1Q23 1Q22 4Q22 Revenue 2,412 2,714 2,373 • Higher selling prices more than offset higher raw Adjusted EBIT 283 366 171 material, energy, and distribution costs Adjusted EBIT margin 11.7% 13.5% 7.2% • Stable demand in several end markets, including A
Slide 7: Advanced Materials
Advanced Materials 1Q23 vs. 1Q22 highlights $M 1Q23 1Q22 4Q22 • Performance films and advanced interlayers Revenue 742 737 736 outperforming the global auto market Adjusted EBIT 86 62 43 • Weak demand and continued aggressive customer Adjusted EBIT margin 11.6% 8.4% 5.8% inventory destocking, partic
Slide 8: Additives & Functional Products
Additives & Functional Products $M 1Q23 1Q22 4Q22 1Q23 vs. 1Q22 highlights Revenue 777 889 756 • Reduced demand and customer inventory Adjusted EBIT 124 167 76 destocking, particularly for building and Adjusted EBIT margin 16.0% 18.8% 10.1% construction, water treatment and personal care end markets
Slide 9: Integration of functional amines increases AFP's exposure to stable end markets
Integration of functional amines business increases AFP’s exposure to stable end markets $546 2022 revenue by end market $485 $455 $443 Other markets Food, feed & Durable & 12% electronics agriculture 7% 21% Consumables $M 8% Personal care & wellness Building & 16% construction 10% Water treatment &
Slide 10: Fibers
Fibers $M 1Q23 1Q22 4Q22 1Q23 vs. 1Q22 highlights • Substantially higher selling prices for Revenue 303 213 317 acetate tow were due to an increase in Adjusted EBIT 94 24 58 industry capacity utilization and higher Adjusted EBIT margin 31.0% 11.3% 18.3% raw material, energy, and distribution Revenue
Slide 11: Chemical Intermediates
Chemical Intermediates $M 1Q23 1Q22 4Q22 1Q23 vs. 1Q22 highlights Revenue 589 715 564 • Lower sales volume/mix in plasticizers and olefins due to continued weak end-market Adjusted EBIT 42 113 24 demand, including for building and Adjusted EBIT margin 7.1% 15.8% 4.3% construction, consumer durables
Slide 12: 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 operating cash flow Expect normal cash seasonality with investment-grade adjusted effective tax rate approximately typical 2H weighting balance sheet 15-
Slide 13: Diverse end markets provide stability, but near-term outlook is mixed
Diverse end markets provide stability, but near-term outlook is mixed End market 2Q23 sequential 2H23 vs. 1H23 Transportation • Slight improvement vs 1Q23 levels in • Solid growth with momentum building (~15% of corporate revenue) OEM production through the back half • Premiums and EVs continue to •
Slide 14: Pathway to strong performance in 2023
Pathway to strong performance in 2023 Tailwinds Headwinds/Uncertainties • Innovation driving growth above underlying • Weak macroeconomic outlook end markets • Continued customer inventory destocking in some markets in 2Q23 • Automotive growth well above underlying • Continued weakness in consumer d
Slide 15: Well positioned to navigate an uncertain global economy
Well positioned to navigate an uncertain global economy Innovation- Circular economy is Strengthening Sustainability and Power of cash flow driven growth a new vector of execution to convert ESG are integrated and the balance model is significant growth growth to value into how we win sheet succeedi
Slide 16: Appendix
Appendix 16
Slide 17: Updated underlying assumptions and modeling items for FY2023
Updated underlying assumptions and modeling items for FY2023 • Interest expense of ~$225M • Depreciation & amortization expense ~$500M • Capital expenditures ~$800M • Share repurchases to offset dilution • ~$50 million headwind from foreign currency exchange rates, net of hedging: USD/EURO $1.08; CN
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