Westlake (WLK) investor relations material

Executive summary

• Q3 net sales were $2.981B, up 5% YoY; adjusted EBITDA was $408M, up 30%, while reported EBITDA was $350M.

• Attributable net income was $6M, or $0.05 per diluted share; adjusted net income was $58M, or $0.45 per diluted share.

• Free cash flow was $220M; the profitability plan contributed ~$200M of YoY EBITDA improvement and remained on track for $600M in 2026.

• Adjusted EBITDA fell from $679M in Q2 as PEM prices and HIP volumes declined, while European energy and other input costs increased.

Financial highlights

• Sales were $2.981B versus $2.838B in Q3 2025; average selling prices rose 6% YoY and comparable volume was unchanged.

• GAAP operating income was $43M versus a $766M loss in Q3 2025; Q3 2025 included a $727M non-cash goodwill impairment.

• Gross profit was $382M versus $236M, with gross margin of 13% versus 8%.

• Operating cash flow was $408M; capital expenditures were $188M, generating $220M of free cash flow.

• Identified items totaled $58M: $56M of facility-shutdown charges and $2M of restructuring costs; adjusted measures exclude these items.

Outlook and guidance

• The profitability plan remained on track to deliver $600M of EBITDA uplift in 2026; it had delivered ~$500M through nine months.

• Q4 HIP revenue is expected at $900M–$1.0B with an EBITDA margin of ~13%, reflecting seasonal margin declines and near-term demand pressure.

• Q4 PEM volumes face turnaround and seasonal pressure; prices regained upward momentum late in Q3, while higher European energy costs are expected to weigh on earnings.

• 2026 capital spending is forecast at $850M, $50M below prior guidance; full-year cash interest expense is expected at ~$215M.

• Cologne PVC production is expected to cease in Q1 2027, with closure completion targeted by year-end; an additional $150M of charges is expected.