Eastman Chemical Company (EMN) investor relations material

Business conditions and market trends

• Customer confidence remains challenged, with order visibility reduced to a few weeks and customers buying smaller quantities more frequently.

• Automotive is performing better than expected, while durables and building/construction remain soft and stable at low levels.

• Chemical Intermediates margins are lagging, and cost actions are being taken to offset demand and margin pressures.

• Q3 results are expected to be below prior guidance, with Q4 sequentially lower due to typical seasonal demand declines.

• Trade policy uncertainty, including tariffs and court rulings, is increasing supply chain and customer uncertainty.

Strategic actions and financial outlook

• Short-term cost actions are being implemented to offset reduced demand, with a focus on delivering $1 billion in operating cash flow for the year.

• Inventory normalization and asset utilization reductions are expected to be substantially complete by end of 2025, with $200 million+ in targeted actions.

• Additional $75–100 million in cost actions above inflation are being pursued, including optimizing third-party purchases and leveraging digital investments.

• Cash flow focus remains strong, with every action being taken to achieve the $1 billion target and maintain momentum into 2026.

Segment performance and innovation

• Advanced Materials and Additives & Functional Products have outperformed or matched peers in volume mix, driven by innovation and product upgrades.

• Chemical Intermediates has seen volume reductions due to strategic facility shutdowns and divestitures, with future margin improvement expected as global capacity rationalizes.

• Fibers segment faced headwinds from tariffs and trade, but stabilization and growth are expected as market conditions normalize and new projects gain traction.