LyondellBasell Industries NV Q1 FY2025 earnings call

• Safety: March year-to-date total recordable incident rate was 0.12, showing continuous improvement. - Strategy execution: Reshaped portfolio by closing Italian polypropylene assets, selling EO&D business, and ongoing European strategic review. - Cash management: Proactive working capital management delivered $100 million cash in 2024, and a $500 million cash improvement plan for 2025 with initiatives like $100 million CapEx reduction, $200 million working capital reduction, and $200 million+ fixed cost savings. - Flex-2 project: Reached final investment decision, starts construction 2025, begins ops 2028, with ~$800M CapEx. - Saudi project: Joint feasibility study with Sipchem for ethylene cracker and derivatives. - Financials: Earnings $0.33 per share, EBITDA nearly $600M, cash returns to shareholders ~$500M.

Olefins and Polyolefins Americas segment had EBITDA of $251 million, impacted by planned and unplanned maintenance and lower integrated polyethylene margins. Olefins and Polyolefins Europe, Asia and International segment generated $17 million EBITDA, improved due to lower feedstock costs and higher polyolefins margins. Intermediates and Derivatives segment had EBITDA of $211 million, a decline of $39 million mainly due to margin compression. Advanced Polymer Solutions segment had EBITDA of $46 million, 30% above prior year. Technology segment had EBITDA of $52 million, lower than guidance.

• 2025 cash improvement plan with $100 million CapEx reduction, $200 million working capital reduction, and $200 million+ fixed cost savings. - Flex-2 project to start construction in 2025 and begin operations in late 2028. - Segment operating rate targets: Olefins and Polyolefins Americas targeting 85% in Q2, Olefins and Polyolefins Europe, Asia and International targeting 75% in Q2, Intermediates and Derivatives targeting 85% in Q2, Advanced Polymer Solutions expecting growth exceeding end markets.

• Tariff risk: Impact on trade flows and potential secondary effects. - Market volatility: Uncertain economic outlook and trade volatility affecting demand. - Operational challenges: Planned and unplanned maintenance, outages, and winter storms impacting results.

Q: Interested in outlook for polyethylene industry in China, potential tariff impacts to U.S. feedstocks A: Peter Vanacker and Kim Foley discussed China demand weakness, lower demand for licenses, Bora joint venture running at 80% capacity, and NAFTA pricing and polyethylene price in China impact Q: Potential tariff impacts to U.S. feedstocks, ethane or propane backing up A: Peter Vanacker mentioned rumors but no written confirmation, trade policies dynamic, and past exceptions for ethane and LPG Q: Capital spending on go-forward basis, flexibility to throttle back A: Agustin Izquierdo discussed disciplined CapEx, maintenance CapEx around $1.2 billion, prioritization of growth projects like Flex-2 and MoReTec-1 Q: Impact of reduced U.S. polyethylene exports to China on domestic supply and prices A: Peter Vanacker and Kim Foley talked about trade flow shifts, LYB's global network and low-cost position enabling shift to other markets Q: Thoughts on European stimulus, impact on products A: Peter Vanacker and Kim Foley discussed European regulation progress, circularity, and MoReTec-1 facility timing Q: Frame up current trough EBITDA and mid-cycle EBITDA longer term A: Peter Vanacker discussed EBITDA impact from turnarounds and storms, and mid-cycle EBITDA expected to be significantly better Q: Views on demand for circular plastics, pace of investment in MoReTec-2 A: Peter Vanacker talked about growth in circular plastics volumes, brand owner interest, and ongoing engineering for MoReTec-2 with brand owner commitments needed before final investment decision