Eastman Chemical Company · NYSE:EMN
Eastman Chemical — Q4 2023 Earnings Presentation
17 slides from Eastman Chemical's earnings presentation, Feb 2, 2024
Slide 1: 4Q and FY 2023 financial results
4Q and FY 2023 financial results February 1, 2024
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: 2023 highlights
2023 highlights • Delivered approximately $1.4 billion of cash from operations in 2023 • Demonstrated commercial excellence in pricing by leveraging the strength of our value proposition to offset significant macro-driven volume challenges • Introduced plastic waste into the Kingsport methanolysis f
Slide 4: Kingsport methanolysis facility update
Kingsport methanolysis facility update • Commissioning of facility completed • Introduced plastic waste to the facility – achieving a significant milestone • Expect to produce on spec material and generate revenue soon • Mixed plastics processing (MPP) processed and inventoried ~40M lbs of hard-to-
Slide 5: Strong customer engagement for Renew materials across broad range of markets and applications
Strong customer engagement for Renew materials across broad range of markets and applications 5 Approved for External Use
Slide 6: Continued progress advancing circular platform
Continued progress advancing circular platform • Kingsport methanolysis expect to produce on spec material and generate revenue soon • Significant progress on France methanolysis facility and second U.S. methanolysis facility • Timing of capital deployment for these projects contingent on: • Finaliz
Slide 7: Corporate
Corporate $M (except EPS) 4Q23 4Q22 3Q23 FY23 FY22 4Q23 vs. 4Q22 highlights Revenue 2,207 2,373 2,267 9,210 10,580 • Resilient prices and lower variable costs Adjusted EBIT 222 171 256 1,097 1,339 • Continued weak primary demand with Adjusted EBITDA 1,572 1,816 seasonal declines across most end mark
Slide 8: Advanced Materials
Advanced Materials 4Q23 vs. 4Q22 highlights $M (except EPS) 4Q23 4Q22 3Q23 FY23 FY22 • Resilient pricing and lower variable costs Revenue 705 736 746 2,932 3,207 Adjusted EBIT 65 43 93 343 395 • Strength in the automotive end market Adjusted EBIT margin 9.2% 5.8% 12.5% 11.7% 12.3% • Continued weak e
Slide 9: Additives & Functional Products
Additives & Functional Products 4Q23 vs. 4Q22 highlights $M (except EPS) 4Q23 4Q22 3Q23 FY23 FY22 Revenue 640 756 670 2,834 3,475 • Weak end-market demand in building and construction and timing of heat transfer fluid Adjusted EBIT 67 76 105 436 546 fills Adjusted EBIT margin 10.5% 10.1% 15.7% 15.4%
Slide 10: Fibers
Fibers 4Q23 vs. 4Q22 highlights $M (except EPS) 4Q23 4Q22 3Q23 FY23 FY22 Revenue 346 317 323 1,295 1,022 • Substantially higher selling prices for acetate tow were due to an increase in Adjusted EBIT 113 58 109 422 140 industry capacity utilization and higher raw Adjusted EBIT margin 32.7% 18.3% 33.
Slide 11: Chemical Intermediates
Chemical Intermediates $M (except EPS) 4Q23 4Q22 3Q23 FY23 FY22 4Q23 vs. 4Q22 highlights Revenue 513 564 527 2,143 2,716 • Lower selling prices across the segment Adjusted EBIT 24 24 6 111 349 due to lower raw material prices and weak end-market demand Adjusted EBIT margin 4.7% 4.3% 1.1% 5.2% 12.8%
Slide 12: Cash flow and other financial highlights
Cash flow and other financial highlights Resilient cash flow Balance sheet and tax rate Year-end reduction of net debt FY23 adjusted Strong operating Disciplined working further strengthens our solid effective tax rate cash flow 2023 capital management Investment-grade ~$1.4 billion 13% balance shee
Slide 13: 2024 end market outlook
2024 end market outlook End market 1Q24 sequential FY24 vs FY23 Transportation • Projecting modest decline in global • Projecting flat global OEM production (~15% of corporate revenue) OEM production • EMN outperforming the market due to • Offsetting production decline with innovation-driven leverag
Slide 14: 2024 outlook
2024 outlook Tailwinds vs FY2023 Headwinds/Uncertainties vs FY2023 • Specialty volume and mix improvement • Lower price/cost negatively impacting margins, • Absence of significant customer primarily in Chemical Intermediates inventory destocking in most end markets • Higher costs related to investme
Slide 15: Appendix
Appendix 15
Slide 16: Underlying assumptions and modeling items for FY2024
Underlying assumptions and modeling items for FY2024 • Brent crude oil: $80 – 90 / barrel • Natural gas prices consistent with recent FY24 Henry Hub average forward curves: $2.75 – 3.50/MMBTU • ~$100 million tailwind FY24 vs FY23 from higher asset utilization • Interest expense of ~$215 million • Fu
Slide 17: Adjusted EBITDA to Net Earnings reconciliation
Adjusted EBITDA to Net Earnings reconciliation (Dollars in millions) 2023 2022 Net earnings $ 896 $ 796 Plus: Depreciation 382 384 Accelerated Depreciation 23 - Amortization 93 93 Net interest expense 215 182 Provision (benefit) for income taxes 191 181 EBITDA $ 1,800 $ 1,636 Add back: Mark-to-marke
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