Eastman Chemical Company · NYSE:EMN
Eastman Chemical — Q2 2023 Earnings Presentation
15 slides from Eastman Chemical's earnings presentation, Jul 28, 2023
Slide 1: 2Q 2023 financial results
2Q 2023 financial results July 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: 2Q 2023 highlights
2Q 2023 highlights • Solid sequential improvement in earnings driven by disciplined pricing, lower variable costs, and cost-saving initiatives • Destocking continued, and primary demand was weaker than expected across most end markets • Delivered strong operating cash flow in 1H23 despite weak deman
Slide 4: Continued good progress on construction of Kingsport methanolysis facility
Continued good progress on construction of Kingsport methanolysis facility to serve strong adoption from brands for Renew products 2024 EBITDA growth from Kingsport methanolysis facility expected to be ~$75 million 4 Updated 07.14.23
Slide 5: Corporate 2Q23 vs. 2Q22 highlights
Corporate 2Q23 vs. 2Q22 highlights $M (except EPS) 2Q23 2Q22 1Q23 Revenue 2,324 2,784 2,412 • Continued weak primary demand and customer inventory destocking across Adjusted EBIT 336 469 283 several end markets, particularly consumer Adjusted EBIT margin 14.5% 16.8% 11.7% durables, building and cons
Slide 6: Advanced Materials
Advanced Materials $M 2Q23 2Q22 1Q23 2Q23 vs. 2Q22 highlights Revenue 739 846 742 • Higher selling prices and lower variable costs Adjusted EBIT 99 158 86 • Continued weak demand and customer inventory Adjusted EBIT margin 13.4% 18.7% 11.6% destocking in consumer durables, consumables, Revenue Vol /
Slide 7: Additives & Functional Products
Additives & Functional Products $M 2Q23 2Q22 1Q23 2Q23 vs. 2Q22 highlights Revenue 747 924 777 • Weak demand in the building and construction Adjusted EBIT 140 160 124 end market and customer inventory destocking in the agriculture end market Adjusted EBIT margin 18.7% 17.3% 16.0% • Lower capacity u
Slide 8: Fibers
Fibers $M 2Q23 2Q22 1Q23 2Q23 vs. 2Q22 highlights Revenue 323 242 303 Adjusted EBIT 106 37 94 • Substantially higher selling prices for Adjusted EBIT margin 32.8% 15.3% 31.0% 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 2Q23 2Q22 1Q23 2Q23 vs. 2Q22 highlights Revenue 514 772 589 • Lower sales volume/mix in plasticizers and Adjusted EBIT 39 143 42 olefins due to continued weak end-market demand, including for building and construction, Adjusted EBIT margin 7.6% 18.5% 7.1% consumer durables,
Slide 10: Cash flow and other financial highlights
Cash flow and other financial highlights Resilient cash flow Balance sheet and tax rate Forecasted FY23 Well positioned with solid FY23 forecasted Strong operating operating cash flow investment-grade adjusted effective tax rate cash flow in 2Q23 approximately balance sheet 15-16% $410 million $1.4
Slide 11: Diverse end markets provide stability, but near-term outlook is mixed
Diverse end markets provide stability, but near-term outlook is mixed End market 2H23 vs. 1H23 Transportation • Solid growth with auto OEM momentum building through the back half, (~15% of corporate revenue) especially in EVs and the premium market • Expecting modest auto recovery in China and conti
Slide 12: Second half 2023 sequential outlook
Second half 2023 sequential outlook Tailwinds Headwinds/Uncertainties • Innovation driving growth above underlying • Weak macroeconomic outlook end markets • Continued customer inventory destocking in some • Automotive builds modestly better with leverage markets in 2H23, including agriculture to fa
Slide 13: Well positioned to navigate an uncertain global economy
Well positioned to navigate an uncertain global economy Innovation-driven Circular economy is Strengthening Sustainability and Power of cash flow growth model is a new vector of execution to convert ESG are integrated and the balance succeeding significant growth growth to value into how we win shee
Slide 14: Appendix
Appendix 14
Slide 15: Underlying assumptions and modeling items for FY2023
Underlying assumptions and modeling items for FY2023 Updated • ~$75 million headwind from lower asset utilization to reduce inventory • Corporate ‘Other’ adjusted Loss Before Interest and Taxes of approximately ($220)M for FY23 • Natural gas assumption consistent with recent 2H23 Henry Hub average f
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