LyondellBasell Industries (LYB) Goldman Sachs Industrials and Materials Conference summary

Strategic direction and execution

• Launched a three-pillar strategy in March 2023 to grow and upgrade core businesses, build a profitable circular and low-carbon solutions business, and enhance performance and culture.

• MoReTec-1, a commercial-scale advanced recycling plant in Germany, has begun construction, targeting hard-to-recycle plastics with over 80% yield and 50% lower carbon footprint than fossil-based feedstocks; expansion plans include Houston.

• Divestitures, refinery shutdown in 1Q25, and European asset review are sharpening portfolio focus.

• Value Enhancement Program targets $600M recurring annual EBITDA by end of 2024 and $1B by 2025.

• The CLCS business is positioned to meet increasing demand for sustainable solutions, supported by EU Innovation Fund grants.

Financial performance and capital management

• Generated $4.6B EBITDA over the past 12 months, $700M above 2020 trough; cash from operating activities for LTM as of 3Q24 was $3.4B, with $2.6B in cash and $7.3B in available liquidity.

• Fourth quarter 2024 EBITDA expected to be the lowest since 2020, with headwinds from seasonal demand, trade uncertainty, and $1B in annual headwinds for Intermediates & Derivatives and Refining.

• Cash generation remains strong, with 77–80% EBITDA-to-cash conversion and net debt to EBITDA below two turns (1.9x as of September 30, 2024), with a 4% average debt rate and 17-year maturity.

• 14th consecutive year of annual dividend growth, with a 7% increase in May.

• Disciplined capital allocation and working capital management remain a focus amid challenging conditions.

Market and segment trends

• North American polyethylene demand up 7% YTD, polypropylene up 3%; demand for durable goods remains soft.

• Oxyfuels margins have normalized after 2023 peaks; refinery to close in Q1 2025, releasing $500M working capital.

• European markets are stable but slow, with capacity rationalizations expected to align supply with demand; Europe faces trough conditions and ongoing rationalization.

• Chinese and Asian markets show modest improvement, but Chinese stimulus has not yet translated to market gains.

• Automotive and fuels segments are impacted by rising inventories, tariff uncertainties, and low crack spreads.