Westlake (WLK) Investor Update summary

Strategic actions and rationale

• Closure of three North American chlorovinyl plants and one styrene plant by end of 2025 due to global overcapacity and uncompetitive export margins, impacting facilities in Mississippi and Louisiana.

• Targeted assets are high-cost, older facilities with significant logistics and transportation expenses, primarily serving low-priced export markets.

• Exiting the styrene business will remove 100% of the company's styrene capacity.

• No formal sale process was undertaken for these assets; future restart is not precluded but would require significant effort.

• Approximately 295 employees will be affected by workforce reductions, with support committed during the transition.

Financial impacts and outlook

• Expect annual EBITDA improvement of $100 million and $75 million in capital and turnaround cost savings, totaling $175 million in free cash flow benefit in 2026, with a payback period of less than one year on $58 million in execution costs.

• Total pre-tax charges of $415 million anticipated, including $357 million in non-cash write-offs, $25 million in severance, and $33 million in shutdown costs, with most charges recognized in Q4 2025.

• Combined with prior actions, manufacturing optimization pillar now expected to deliver $200 million EBITDA uplift, with total plan benefit of $600 million in 2026.

• Cash outflows for closure costs will extend over several years.

• All three pillars of the profitability plan are expected to be realized in 2026.

Market and operational context

• Global overcapacity, especially from Asia, has compressed export margins for PVC, caustic, and styrene, making export-focused assets unprofitable.

• Remaining assets are more integrated, lower-cost, and better positioned to serve both domestic and export markets.

• Plant closures will reduce global chlorovinyl capacity by 11%-15%, depending on product.

• Post-closure, aggregate annual production capacity will be 5,520 million lbs PVC, 7,630 million lbs VCM, 6,680 million lbs chlorine, and 7,510 million lbs caustic soda globally.

• Customers will continue to be supplied from seven other North American chlorovinyl facilities.