Eastman Chemical Company (EMN) Morgan Stanley‘s 12th Annual Laguna Conference 2024 summary

Global business conditions and outlook

• North America remains the most resilient market, while China has underperformed and Europe is trading sideways at low levels.

• Primary demand has reconnected in most end markets, but no significant growth is expected in the second half of the year.

• Q3 results are expected to be similar to Q2, with earnings on track for full-year guidance.

• Destocking in 2022-2023 led to a significant volume decline, but recovery is underway this year.

• Lower safety stock levels and economic growth are expected to contribute to volume recovery.

Methanolysis and circular economy initiatives

• Methanolysis plant is operational, progressing toward a $50 million EBITDA target for the year.

• Scheduled turnaround and process modifications in Q4 aim to boost efficiency and support a $150 million exit rate in 2025.

• Recycled materials are meeting quality standards, enabling use in new and existing applications without requalification.

• Adoption in existing markets is slower due to consumer focus on value, but new end markets like personal care and durables are growing faster.

• Expansion of Tritan facilities is expected, with the third plant anticipated to sell out quickly.

Feedstock procurement and plant expansion

• Broad, diverse feedstocks are being successfully processed, including hard-to-recycle polyester waste.

• Supply chain for circular business model is robust at current scale, with potential for further regional expansion.

• Progress continues on the Texas plant, with permitting, engineering, and DOE negotiations advancing.

• Texas facility aims to reduce carbon footprint by up to 90% compared to fossil fuel processes.