LyondellBasell Industries Q4 2024 Earnings Report

LyondellBasell Industries EPS Results

• Actual EPS: $0.75
• Consensus EPS: $1.28
• Beat/Miss: Missed by -$0.53
• One Year Ago EPS: $1.26

LyondellBasell Industries Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $9.73 billion
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

LyondellBasell Industries Announcement Details

• Quarter: Q4 2024
• Date: 1/31/2025
• Time: Before Market Opens
• Conference Call Date: Friday, January 31, 2025
• Conference Call Time: 11:00AM ET

LyondellBasell Industries (NYSE:LYB) N.V. operates as a chemical company in the United States, Germany, Mexico, Italy, Poland, France, Japan, China, the Netherlands, and internationally. The company operates in six segments: Olefins and PolyolefinsAmericas; Olefins and PolyolefinsEurope, Asia, International; Intermediates and Derivatives; Advanced Polymer Solutions; Refining; and Technology. It produces and markets olefins and co-products, polyethylene, and polypropylene; and propylene oxide and derivatives; oxyfuels and related products; and intermediate chemicals, such as styrene monomer, acetyls, ethylene oxide, and ethylene glycol. In addition, the company produce and markets compounding and solutions including polypropylene compounds, engineered plastics, masterbatches, engineered composites, colors and powders, and advanced polymers including catalloy and polybutene-1; and refines heavy, high-sulfur crude oil and other crude oils, as well as refined products, including gasoline and distillates. Further, it develops and licenses chemical and polyolefin process technologies; manufactures and sells polyolefin catalysts; and serves food packaging, home furnishings, automotive components, and paints and coatings applications. LyondellBasell Industries N.V. was incorporated in 2009 and is headquartered in Houston, Texas.

LyondellBasell Industries Q4 2024 Earnings Call Transcript

Presentation

[Operator]

Hello, and welcome to the LyondellBasell Teleconference. At the request of LyondellBasell, this conference is being recorded for instant replay purposes. Following today's presentation, we will conduct a question and answer session. I would now like to turn the conference over to Mr. David Kinney, Head of Investor Relations.

[Operator]

Thank you, sir. You may begin.

[David Kinney, Head Of Investor Relations at LyondellBasell Industries]

Thank you, operator. Before we begin the discussion, I would like to point out that a slide presentation accompanies today's call and is available on our website at investors. Lyondeltacell.com. Today, we will be discussing our business results while making reference to some forward looking statements and non GAAP financial measures. We believe the forward looking statements are based upon reasonable assumptions and the alternative measures are useful to investors.

[David Kinney, Head Of Investor Relations at LyondellBasell Industries]

Nonetheless, the forward looking statements are subject to significant risk and uncertainty. We encourage you to learn more about the factors that could lead our actual results to differ by reviewing the cautionary statements in the presentation slides and our regulatory filings, which are also available on our Investor Relations website. Comments made on this call will be in regard to our underlying business results using non GAAP financial measures, such as EBITDA and earnings per share, excluding identified items. Additional documents on our investor website provide reconciliations of non GAAP financial measures to GAAP financial measures together with other disclosures including the earnings release and our business results discussion. A recording of this call will be available by telephone beginning at 1 p.

[David Kinney, Head Of Investor Relations at LyondellBasell Industries]

M. Eastern Time today until March 2 by calling 877-660-6853 in the United States and 201-612-7415 outside the United States. The access code for both members is 1,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000 our incoming CFO, Augustin Esquierdo Kim Foley, our Executive Vice President of Global Olefins and Polyolefins and Refining Aaron LaVey, our EVP of Intermediates and Derivatives and Torquil Brendon, our EVP of Advanced Polymer Solutions. During today's call, we will focus on Q4 and full year 2024 results and progress on our strategic initiatives. We will also discuss current market dynamics and our near term outlook.

[David Kinney, Head Of Investor Relations at LyondellBasell Industries]

With that being said, I would now like to turn the call over to Peter.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

Thank you, Dave, and welcome to all of you. We appreciate you joining us today as we discuss our 4th quarter and full year 2024 results. I'm very proud of how our people navigated challenges, leveraged our strengths and remained laser focused on our strategy throughout a year that was not easy for our industry, particularly the Q4. Let's begin as we always do with our safety results on Slide 3. During 2024, our employees and contractors demonstrated their commitment to outstanding safety performance.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

I am proud to share that our total recordable injury rate for 2024 was 0.13, our 2nd lowest year for the company. Even more impressive, as LYB continues to grow, we achieved the lowest number of injuries in our history. This truly is a testament to our Goal 0 commitment to safety and operational excellence. With such an impressive safety record, I would like to take a moment to highlight some of the amazing milestones we have reached this year. We celebrated 6 sites surpassing 10 plus years of no injuries, And our APS segment had record breaking safety performance, reducing their incident rate by 39% compared to 2023.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

Operating safely is a prerequisite to achieving high reliability and creating shareholder value. I applaud our team for what we have achieved in 2024 and look forward to carrying this momentum into 2025 as we continue to strive for Goal 0 performance. Let's now turn to Slide 4 to discuss our financial results. There is no getting around it. 2024 was another challenging year for petrochemicals.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

However, in spite of the headwinds, our strategic focus on value creation, maximized cash generation and delivered solid returns to shareholders. Earnings were $6.40 per share with EBITDA of $4,300,000,000 LYB generated $3,800,000,000 of cash from operations with an outstanding 90% cash conversion ratio. We returned $1,900,000,000 to shareholders in the form of dividends and repurchases. Now let's turn to Slide 5 and take a moment to reflect on where LYB and the industry are in the current cycle. Across our key businesses, 4th quarter industry margins are about 60% of historical averages, underscoring the depth of the current downturn.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

Let me share 3 thoughts on this challenging environment. First, this deep and prolonged downturn is not permanent. Global demand for durable goods will inevitably return following this post pandemic downturn. 2nd, LYB has the potential to capture substantial upside from the cyclical recovery in volumes and margins. And 3rd, LYB's strategic progress in unlocking incremental value could enable us to surpass our historical cycle performance.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

The opportunity is apparent in our sizable polypropylene business, where 4th quarter margins are less than 50% of historical averages, and operating rates are at least 5% to 10% points below industry norms, reflecting the severity of the downturn. For polyethylene, the margin compression is smaller, but the higher unit margins for the integrated value chain provide meaningful upside. In contrast, our Oxyfuels business is currently experiencing typical 4th quarter seasonality, but the recent peak seen in 2023 when full year margins averaged $5.60 per ton provide a measure of the upside available for this business. We recognize that current dynamics represent more than just typical cyclical pressures. They also reflect some structural shifts in the industry relative to prior cycles.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

Slower global growth, particularly in China, structurally higher energy costs, regulatory impacts in Europe and other regions, along with the potential for capacity additions to outpace demand, have introduced sectoral challenges. These shifts are contributing to the depth and duration of the current downturn and will likely moderate future mid cycle margins relative to the prior decades. This is why our strategic initiatives to unlock sustainable value across our portfolio are essential. These actions are enabling us to pivot to high value opportunities and respond more effectively to changing market dynamics. Our focal points during 2025 were the transformation of our Houston refinery, the strategic review of select European assets and strong execution of our global operating model.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

We are confident that these actions will lead to a durable uplift of our EBITDA margins and provide lasting benefits for navigating future cycles. Now if you turn to Slide 6, we highlight the progress on our strategy during 2024. In nearly 2 years since our Capital Markets Day, LyondellBasell has unlocked approximately $1,300,000,000 of incremental normalized EBITDA through the execution of our 3 pillar strategy. With focus and urgency, we are leveraging our strengths and extending our advantages. The successful start up of our BOTBA plant in 2023 is adding approximately $450,000,000 on a mid cycle basis to our normalized EBITDA by leveraging our proprietary technology and advantaged feedstock positions in these attractive markets.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

And I'm very pleased to report that our value enhancement program is exceeding our expectations. In 2024, the VEP unlocked a year end run rate of more than $800,000,000 of recurring annual EBITDA improvements, while contributing approximately $600,000,000 to the 2024 EBITDA. In addition, we successfully completed the divestment of our non core EOND business, leveraging the sale proceeds to strengthen our portfolio by acquiring a 35% share in Net Pet, a cost advantaged integrated polypropylene joint venture. During 2025, you can expect additional progress towards capturing value through our strategic priorities. We are confident in the progress of our VEP program and expect to exceed our goal to achieve a year end run rate of $1,000,000,000 of recurring annual EBITDA improvements.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

As you have seen, our APS transformation has encountered headwinds from automotive production declines at some of our key customers in North America and Europe. But the improved customer focus of our APS team has allowed LYB to increase our win rate for new project approvals. And Yvonne's team is doing an excellent job in growing volumes in our Circular and Low Carbon Solutions business, while our exit from the refining business remains on track. At the same time, we are remaining extremely disciplined in how we allocate capital during this downturn by carefully prioritizing high return capital projects and remaining steadfast to our highly selective approach towards M and A. As Michael will share, our capital expenditures will be lower than our prior guidance, but we have been mindful to ensure our prudence does not meaningfully impact future growth.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

And you can be assured that we will not compromise our M and A discipline to fill growth targets with risky or marginal acquisitions. On Slide 7, we provide an update on the growth of our Circular and Low Carbon Solutions or CLCS business. We continue to build CLCS through a focused strategy that leverages our existing infrastructure and our competitive advantages, such as innovative technologies and leading positions in growing markets with a global network of deep customer relationships. Our CLCS business continues to grow at an impressive pace. CLCS volumes increased by 65% during 2024 to over 200,000 tons across product lines based on mechanical recycling, chemical recycling and renewable feedstocks.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

And we are generating attractive margins that are incremental to our fossil fuel based polymers. Our CLCS business is targeting $1,000,000,000 of incremental EBITDA from 2,000,000 tons of annual volumes by 2,030. Despite the challenges in the chemical industry over the past year, our 2024 CLCS margins and volumes are on track with our 2,030 plan. Please turn to Slide 8 and let's take a look at our updated views on the supply and demand picture for circular plastics. Market demand for circular plastics remains robust.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

Consumer preferences and brand owner commitments to increase utilization of recycled plastics or driving demand growth. And European regulation is bolstering demand by mandating increased utilization of recycled contents in plastic packaging. But this transition to circularity takes time. Infrastructure for plastics waste collection and sorting needs to be built. Large companies like LYD are developing technologies and building assets to increase supply, while smaller companies are having mixed success improving new technologies and launching businesses.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

We believe capacity growth will continue to be outpaced by rising demand. As brand owners discover the supply of circular plastics is not keeping pace with their growth plans, they are pragmatically deferring their targets for utilizing circular plastics. And some brand owners have revised previously ambitious targets to more realistic levels after considering the supply constraints. Demand growth is merely being delayed due to lack of capacity, but not being eliminated. As such, LYB and other industry observers are incorporating these constraints by scaling back 2,030 forecasts for industry capacity and the addressable markets.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

The megatrends and investment thesis remain intact. The market for circular plastics is expected to be short of supply and supportive of attractive margins for quite some time. LYB strategy has not changed. The construction of our first Moritec chemical recycling facility in Germany is progressing well and we are planning Moritec II for Houston with regional hubs for sourcing and sorting plastic waste in both locations. We are leveraging LYB's technologies, operations and global marketing network to execute our strategy and build a leading position in this attractive market.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

Please turn to Slide 9, and let's briefly review the evolving regulatory framework for circular plastics in Europe. While consumer preference is a dominant driver for circular plastics, forward thinking regulation in Europe is also strengthening demand growth. In Europe, we see regulation moving in the right direction with PPWR, the new packaging and packaging waste regulation. With mandatory levels of recycled content in packaging, we expect PPWR will drive meaningful incremental demand for circular plastics on the order of 4,000,000 to 5,000,000 tons by 2,030 and even more by 2,040. LYB is well positioned through its differentiated technologies and solutions to take advantage of this growing opportunity.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

Contact sensitive packaging with circular content is likely to require polymers produced using chemical recycling. Our proprietary catalytic Moritec technology currently under construction in Germany will provide a profitable commercial scale solution. Before I turn over the call, I would like to take a moment to share my appreciation for our CFO, Michael McMurray. As we previously announced, Michael has decided to retire in line with his personal plan after 5 years of service to LyondellBasell. Michael has been an incredible friend and thought partner over the past 3 years as we developed and executed a new strategy for the company.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

In addition, Michael provided outstanding leadership for our global finance team, wise counsel to our commercial leaders and oversaw the recapitalization of our balance sheet to lock in the most favorable rates and maturities we're likely to see in our lifetimes. Chief, I thank you for your leadership and look forward to continuing our personal friendship for many years to come.

[Michael McMurray, Executive VP & CFO at LyondellBasell Industries]

Peter, thank you for your kind words. You have also been a great friend and partner over the past 3 years. Thank you. I also want to thank my team, my colleagues and our Board. The last 5 years have been fun, rewarding and challenging and much has been accomplished.

[Michael McMurray, Executive VP & CFO at LyondellBasell Industries]

LYB is a great company with great people and I'm confident the company is positioned for continued success. I look forward to following LYB's progress over the coming years. And finally, on my 50th and last earnings call as a public company CFO, I thank all of you in the investing community. It has been a good ride.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

Thank you, Michael. I'm also pleased to share that our Board has selected Augustin Schiardo to become LyondellBasell's next CFO, effective March 1. Augustine joined LYB in 2022 after 13 years of service in various commercial and financial roles at BASF and nearly a decade in Morgan Stanley's Investment Banking division. More recently, Augustine was responsible for LYB's O&P Americas segment with full P and L responsibility. Prior to that, he was a member of the IND leadership team.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

We're also pleased that Augustin is LYB's 1st CFO to have been promoted from within the company. We aim to continue developing top talent across all levels of the organization as we step up our performance and culture. Augustine is with us here today. Would you like to say a few words, Augustine? Certainly, Peter.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

I am humbled, honored and thrilled for this opportunity. And I would like to thank our Board, LYB's executive committee and the entire finance organization for their warm welcome. I look forward to engaging with the investment community over the coming months and working to build on Michael's strong foundations to drive results for LYB. Thank you, Augustine. Michael, can you please continue with a

[Michael McMurray, Executive VP & CFO at LyondellBasell Industries]

few words about our progress on capital allocation? Absolutely, Peter, and good morning again, everyone. Let's continue with Slide 10. As Peter mentioned, we are laser focused on advancing our strategic priorities while maintaining a robust balance sheet that serves us well throughout the cycle. At the same time, we are committed to returning cash to our shareholders through a growing dividend and share repurchases.

[Michael McMurray, Executive VP & CFO at LyondellBasell Industries]

During 2024, we invested $1,800,000,000 in capital expenditures, carefully prioritizing projects to balance investment and future profitability. Our acquisition of a 35% position in the Nat Pet joint venture was offset by the divestment of our non core ethylene oxide and derivatives business. We ended the year with $3,400,000,000 of cash and short term investments and $8,000,000,000 of available liquidity. Our strong cash conversion enabled us to maintain a resilient balance sheet and fully fund $1,700,000,000 in dividends $195,000,000 in share repurchases. In May, we increased our quarterly dividend by 7%, marking the 14th consecutive year of annual dividend growth and continuing our track record of providing a secure, growing and competitive dividend, and we are well positioned to extend our track record of growing our dividend in 2025.

[Michael McMurray, Executive VP & CFO at LyondellBasell Industries]

Our capital allocation priorities are unchanged, and we remain committed to returning 70% of our free cash flow to shareholders over the long term. Please turn to Slide 11, and let me begin by highlighting the strong cash performance from our business during 2024. Over the past year, our business teams generated $3,800,000,000 of cash from operating activities. Cash on hand remained flat for the year at $3,400,000,000 During 2024, we achieved cash conversion of 90%, well above our long term target of 80%. In addition to typical 4th quarter drawdown of inventories, the company was able to pull forward the release of some of the working capital provided by the closure of the Houston Refinery.

[Michael McMurray, Executive VP & CFO at LyondellBasell Industries]

During the Q1, we will utilize some of our cash on hand to rebuild lean year end inventories in support of our upcoming Channelview turnaround and seasonal improvements across our businesses. In the U. S, tax relief associated with Hurricane Burrow allowed us to defer cash tax payments during the second half of twenty twenty four, and these tax payments will be settled during February 2025. Now I'd like to provide an overview of the quarterly results of each of our segments on Slide 12. LYB's business portfolio delivered $689,000,000 of EBITDA during the Q4.

[Michael McMurray, Executive VP & CFO at LyondellBasell Industries]

Sequentially higher ethane and energy cost and lower seasonal demand impacted both of our O and P segments. Overall, olefins and polyolefins demand remained soft, particularly in Europe where utilization rates remained low. Additionally, margin compression on declining gasoline fracs and oxyfuels impacted profitability within the Intermediates and Derivatives segment. In 2025, refining activities will be reported as discontinued operations and our financial results will be reported under the 5 remaining segments. The 4th quarter included identified items of $852,000,000 net of tax.

[Michael McMurray, Executive VP & CFO at LyondellBasell Industries]

The items included non cash write downs related to our O&P Europe, Asia and International and Advanced Polymer Solutions segments of $769,000,000 $42,000,000 respectively, and costs incurred from plans to exit the refining business. The impairments reflect the challenging market conditions for these businesses and include O and P EAI assets in our European strategic review and an Asian joint venture, while the APS impairment was incurred in our specialty powders business. Across the portfolio, a non cash LIFO inventory valuation charge decreased pretax 4th quarter results by approximately $23,000,000 As a reminder, our 4th quarter LIFO reconciliations reflect changes in inventory valuation over the full year. The LIFO reconciliation is not necessarily linked to our Q4 valuations. Before we discuss our segment results in detail, let me discuss our capital expenditures plans for 2025 beyond.

[Michael McMurray, Executive VP & CFO at LyondellBasell Industries]

Given the difficult operating environment and our disciplined approach to capital allocation, we are deferring some growth investments until later in the decade. For 2025, we expect our CapEx will be approximately $1,900,000,000 Our 2025 capital plan includes approximately $700,000,000 for profit generating growth projects and $1,200,000,000 of sustaining investments to keep our assets running safely and reliably. The reduced capital plan prioritizes strategic investments in our CLCS business, our second tranche of flex capacity and high return projects in our value enhancement program. We expect our 2025 effective tax rate will be approximately 17% and our cash tax rate will be approximately 10 percentage points higher. The higher cash tax rate is largely due to the deferral of 2024 U.

[Michael McMurray, Executive VP & CFO at LyondellBasell Industries]

S. Tax payments into 2025 that was provided under Hurricane Burrell disaster relief. As we always do during the Q4 call, we have provided additional 2025 modeling information in the appendix to the slide deck describing expected impacts from major plant maintenance and other useful financial metrics. With that, I'll turn the call over to Kim. Kim?

[Kimberly Foley, Executive Vice President of Global Olefins & Polyolefins and Refining at LyondellBasell Industries]

Thank you, Michael. Let's begin the segment discussions on Slide 13 with the performance of our Olefins and Polyolefins Americas segment. 4th quarter EBITDA was $496,000,000 During the quarter, integrated polyethylene margins decreased as ethane and natural gas prices increased negatively impacting margins. Strong demand from export markets increased our polyethylene volumes. We operated our assets at approximately 80% of nameplate capacity in line with market demand.

[Kimberly Foley, Executive Vice President of Global Olefins & Polyolefins and Refining at LyondellBasell Industries]

Our olefins crackers ran at approximately 98% rates during the quarter. Our strong operational performance allowed us to capture additional spot sales in Olefins markets benefiting our results by approximately $40,000,000 During the Q1, we expect higher ethane and natural gas costs due to winter energy demand with modest improvements in product volumes following seasonal weakness and ongoing strength in export markets. We expect to operate our O and P Americas assets at an average rate of approximately 80% during the Q1 due to planned maintenance downtime at our Channelview Oopens assets as well as the impact of winter storm Enzo. Ahead of the storm, LYB proactively reduced rates and shut down some assets. We estimate that lost volumes from the storm related downtime will impact Q1 EBITDA by approximately $45,000,000 In line with our commitment to build a profitable CLCS business, in November, we announced a second investment in Cyclix, a joint venture with Algelex and ExxonMobil reaching final investment decisions to build a second Cyclix circularity center in Fort Worth, Texas.

[Kimberly Foley, Executive Vice President of Global Olefins & Polyolefins and Refining at LyondellBasell Industries]

The facility will have the capacity to produce more than 130,000 tons per year of plastic feedstock for advanced and mechanical recycling and is expected to start up in the second half of twenty twenty six. Now let's turn to Slide 14 and review the performance of our olefins and polyolefins Europe, Asia and International segment. During the Q4, European markets remained weak with higher feedstock cost and softer seasonal demand. Extended maintenance activities at our Westlink site along with additional unplanned downtime in France reduced volumes and impact EBITDA by approximately $20,000,000 during the Q4. Due to this downtime, we operated our assets at rates of approximately 55%.

[Kimberly Foley, Executive Vice President of Global Olefins & Polyolefins and Refining at LyondellBasell Industries]

The combined impact of weak demand and lower rates led to an EBITDA loss of $146,000,000 As we move into 2025, we expect improved European seasonal demand to drive higher volumes and margins. In contrast to 2024, our O and P EAI segment has no major turnaround scheduled for the coming year. Nevertheless, feedstock supply for 1 of our German crackers is currently constrained due to unplanned downtime at a nearby refinery. With those constraints and ongoing soft market demand, we expect to operate our European assets at a rate of 75% during the Q1. Our team in Westling Germany successfully completed our largest turnaround in the region during 2024.

[Kimberly Foley, Executive Vice President of Global Olefins & Polyolefins and Refining at LyondellBasell Industries]

Our European strategic review continues and we expect to be in a position to issue an update on the progress in the second half of this year. Our CLCS business continues to grow. In October, we acquired APK, allowing us to integrate its unique solvent based low density polyethylene recycling technology into our comprehensive portfolio for building a profitable CLCS business. And construction is well underway for our 1st commercial catalytic chemical recycling plant, Morotec 1 in Germany. Now let's turn to Slide 15 and discuss the results of the Refining segment.

[Kimberly Foley, Executive Vice President of Global Olefins & Polyolefins and Refining at LyondellBasell Industries]

During the Q4, we incurred an EBITDA loss of $24,000,000 Margins remained relatively flat despite falling gasoline and diesel spreads due to improved utilization of our catalytic cracker. During the quarter, we operated the refinery at approximately 90% of capacity following unplanned downtime in the Q3 with an average crude rate of 244,000 barrels per day. Looking forward, refinery shutdown activities began following winter storm Enzo in January and are expected to be completed within the Q1. While the storm caused a slight delay, we remain on track as we have already shut down the 1st train of crude and coker units with the 2nd train, the cat cracker and auxiliary equipment to follow. In light of these activities, we expect final refinery utilization rates to be approximately 35% over the quarter.

[Kimberly Foley, Executive Vice President of Global Olefins & Polyolefins and Refining at LyondellBasell Industries]

Our team remains highly focused on a safe and reliable shutdown as we wind down operations of our 107 year old refinery. Our number one priority has and always will be safety. I would like to take the opportunity to commend our team for an amazing job during this journey. With that, I'll turn the call over to Aaron.

[Aaron Ledet, Executive Vice President of Intermediates & Derivatives and Supply Chain at LyondellBasell Industries]

Thank you, Kim. Please turn to Slide 16 as we take a look at our Intermediates and Derivatives segment. 4th quarter EBITDA was $250,000,000 4th quarter oxy fuel margins were in line with typical winter lows, driven by lower prices for crude oil as well as lower gasoline crack spreads. We experienced modest volume improvement in our PO and derivatives business during the quarter despite weak demand for durable goods. Styrene margins remain under pressure given global supply and demand fundamentals, despite declining raw material prices.

[Aaron Ledet, Executive Vice President of Intermediates & Derivatives and Supply Chain at LyondellBasell Industries]

We operated our IND assets at a rate of approximately 70% during the Q4 to match low seasonal demand. The IND business achieved several strategic milestones in 2024, including the divestment of our non core ethylene oxide and derivatives business and the operation of our newest POTBA asset at 78% rates for the year, surpassing our 2024 goal of 70%. With the steady progress, operating rates are expected to run at benchmark rates going forward. These significant milestones highlight the decisive actions we are taking to exit businesses where LYB does not have a path to market leadership, while growing and upgrading our core businesses and assets that are aligned with our long term strategy. As we begin the Q1, we expect to see moderate demand improvements across most businesses as customers begin restocking after year end inventory management.

[Aaron Ledet, Executive Vice President of Intermediates & Derivatives and Supply Chain at LyondellBasell Industries]

Additionally, we anticipate octane premiums will improve with the end of the winter and the favorable butane to crude ratios will continue to support long term oxy fuels fundamentals. We plan to operate our assets at approximately 80% during the Q1, inclusive of a small amount of unplanned downtime and lost volumes due to winter storm Enzo. With that, I will now turn the call over to Torkel.

[Torkel Rhenman, Executive Vice President of Advanced Polymer Solutions at LyondellBasell Industries]

Thank you, Aaron. Now let's review the results of our Advanced Polymer Solutions segment on Slide 17. 4th quarter EBITDA was $15,000,000 Volumes were pressured by significantly lower 4th quarter demand from automotive customers across all regions, slightly offset by favorable margins. Looking ahead, we expect the Q1 will reflect continued progress from our efforts to regain market share with our renewed focus on customer centricity. Our customer centric approach helped drive approximately 20% EBITDA improvement during 2024 and an increase of 46% in our net promoter score from customers versus the prior year.

[Torkel Rhenman, Executive Vice President of Advanced Polymer Solutions at LyondellBasell Industries]

The team has made substantial progress in transforming our business with strategic customers by building back trust and increasing our win rate to gain new project qualifications. This progress helped us achieve above market global volume growth for our sizable polypropylene compounds and masterbatch businesses during 2024. In addition to our focus on transforming the business, I would like to congratulate the APS team for achieving record setting safety performance in 2024, surpassing our prior record from 2023. I truly believe our progress in refilling our growth funnel and achieving superior safety results reflects our attention to detail and confirms we are on the right path to restoring and exceeding our historical performance. With that, I will return the call to Peter.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

Thanks, Thorkell. I would like to thank the entire Lindo Brazil team for delivering such resilient results amidst a very challenging macro environment. To close out on the segments, let's turn to Slide 18 and discuss the results for our Technology business on behalf of Jim Seward. During the Q4, Catalyst volumes moderated on typical seasonality, while we achieved higher licensing revenue by reaching project milestones that resulted in segment EBITDA of $108,000,000 With this progress, 4th quarter EBITDA exceeded the prior year by approximately 40%. First quarter results for the Technologies segment are expected to decline to levels at or below the Q3 of 2024.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

While Catalyst sales should improve with favorable seasonality, we expect moderating licensing revenue as project approvals for polyolefin capacity additions subside across the world. Please turn to Slide 19 as we discuss the near term outlook by region and end markets. As you heard from our business leaders, we expect modest seasonal demand improvements across most businesses during the Q1. In the Americas, we expect typical seasonal demand recovery will be met with tighter supply due to plant downtime across the industry from an unusually high level of spring cracker maintenance, including our Channelview turnarounds. In Europe, we expect rising energy costs will continue to pressure the European market.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

Seasonal demand recovery and modest restocking of low inventories should provide some support. Moving forward, ongoing capacity rationalization appears likely and should help improve market balance between supply and demand. In Asia, markets are showing slow but steady improvements in both volumes and margins. We are encouraged by China's targeted stimulus programs, but remain cautious while monitoring for signs that these efforts can translate into more meaningful market improvements. For the Packaging sector, we expect to continue seeing steady global demand as we move ahead in the New Year.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

In Building and Construction, the U. S. Infrastructure stimulus efforts are supporting increased industrial activity. Additionally, leading indicators for remodeling activity are predicting increased activity for the 2nd and third quarters of 2025. In the automotive sector, a modest recovery in seasonal demand could be pressured by elevated inventory levels across the industry.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

Additionally, we're a watchful for changes in trade policies that could impact production as we move through the year. For Oxyfuels, stronger crude prices and typical springtime improvements in gasoline crack spreads should provide benefits as we move through the quarter. Our focus remains on reliable operations and continuous optimization across our global footprint to capture market opportunities. And as Michael emphasized, we are maintaining our laser focus on cash generation. Now let me provide an overview of our outlook and how we are positioning LYB over the longer term in Slide 20.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

As we move into 2025, we're beginning to see signs of recovery in key end markets. After 2 years of declines, domestic demand for U. S. Polyolefins had a positive inflection in 2024. Reduced global interest rates, moderating inflation and pent up demand all provide a supportive backdrop for the inevitable recovery in demand for durable goods.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

But we remain watchful of the potential impacts that tariffs could have on affordability and global trade. Despite these uncertainties, LYB remains well positioned as the favorable oil to gas ratio continues to provide a cost advantage for our U. S. And Middle East production. Our portfolio transformation is well underway with strategic initiatives to strengthen and upgrade our core businesses.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

Recent milestones include the acquisition of Nat Pet, the divestment of our E ONT business, ongoing progress for our European strategic review and our exit from refining. During 2024, we have made excellent progress toward building our profitable CN LCS business by starting construction of our first Moritec facility and bolstering our technology position with investments such as APK. Recent assessments by EcoVadis and Sustainalytics rate LYB in the top 10% for our industry. LYB is at the forefront of providing sustainable solutions for our customers. And our VEP is now on track to unlock at least $1,000,000,000 of recurring annual EBITDA by the end of this year.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

I am very proud of the progress our teams have made during 2024. And I'm confident that LYB is well positioned to achieve our strategic priorities while rewarding shareholders. Now with that, we're now pleased to take your questions.

[Operator]

Thank you, sir. Our first question comes from the line of Steve Byrne with Bank of America. Please proceed with your question.

[Steve Byrne, Research Analyst at Bank of America Securities]

Yes, thank you. I was just curious how much CapEx you expect to invest to reach that 2,000,000 ton level of circular plastic in the next 5 years? And presumably that will be largely the Circulon Revive, but how do you get that margin uplift from that? You have a lot of confidence in it. Is that level of confidence sufficient to get some long term contracts before you build the plan?

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

Thank you, Steve. This is Peter. Very good question. We alluded to the fact, I mean, that we have around 20% of our total CapEx that is being invested in our C and LCS business. We remain, I mean, very confident because you have seen the very good growth that we have in the entire C and LCS portfolio in 2024.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

And we see the margins that they are in line with what we have said at the Capital Markets Day in March 2023. So remember the incremental margin of $500 per tonne and it's incremental because that does not include the margin that is, for example, in the cracker. Take into consideration as well that our portfolio in 2024 did not yet include any substantial chemical recycling, so Moritec Technology Products. As we are investing in the 50,000 tons capacity in Cologne, if you do the back of the envelope calculation that would stand for, let's say, around 25,000,000 dollars to $30,000,000 incremental EBITDA, starting up towards the end of 2026. And as I said in my prepared remarks as well, we are now very deeply engaged in the second investment, which is at double capacity, so 100,000 tons of Moraytek that would then be built at our refinery sites in Houston.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

Not a final investment decision, but there is quite a lot of resources in the meantime that are busy with the engineering and the preparation to move them into a final investment decision.

[Operator]

Thank you. Our next question comes from the line of Patrick Cunningham with Citi. Please proceed with your question.

[Patrick Cunningham, Analyst at Citigroup]

Hi, good morning. Peter, you painted the picture of material upside in margins just from getting back to normal mid cycle levels. But I think there were some very abnormal things which maybe benefited 10 year averages. Now sitting with plenty of supply overhang across a number of chains, sluggish demand, Does anything suggest this is the new normal? And if it is, can you be more aggressive with your strategy pivots?

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

Yes. Thank you, Patrick. A very good question as well. I mean, we showed this chart, I mean, to show, I mean, what the upside is as we are moving towards an environment that maybe will not happen in Q1, but that we believe, I mean, will continue to develop as we move towards the second half of twenty twenty five in terms of higher demand. We see some uptick in demand and you've seen the numbers.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

If you just look, for example, at the demands in North America for polyethylene, while the year on year domestic demands improved by 4%, the overall demands improved by 8% in polyethylene and that is because there was a very good cost position that and continues to be a good cost position that the North American players have in order to be able to export more. So export grew by 12% year on year. But you see the same already if we look at our propylene oxide and derivatives, even if everybody is saying, okay, durable goods, I mean, we don't see a big uptick in demand. Well, we were able to grow our propylene oxide and derivatives business by 4% year on year 2024, so compared to 2023. So we see that there is this uptick possible.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

Another point I want to repeat, we have alluded to that also in previous earnings calls, there is not a huge amount of additional capacity that is coming on stream, cracker capacity, polyethylene and polypropylene capacity, this year and also next year. And we are well positioned also on the other side, I mean, in oxyfuels and propylene oxide and derivatives, because we have our new unit, which is performing extremely well, very pleased with that. So lowest cost, lowest carbon footprint, propylene oxide, very well positioned also as we see continuous demand growth, I mean, for oxyfuels on a global basis.

[Operator]

Thank you. Our next question comes from the line of Josh Spector with UBS. Please proceed with your question.

[Christopher Perrella, Equity Research Analyst at UBS Group]

Hi, good morning. It's Christopher Perrella on for Josh. With all the moving parts in the Q1, is EBITDA growth positive in the Q1 with the turnarounds and kind of can you bracket sort of what your EBITDA expectations are near term?

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

Yes. Let me answer that question, Christopher. Of course, I mean, what you always see normally in the Q1, as you know, is that there is an uptick in demand. I mean, that is seasonality. But of course, I also need to point out to the fact that the Q1 always starts with where the Q4 actually is ending.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

Yes, so we start at a low point, higher heating costs, for example, feedstock costs, higher energy costs as we move into the Q1. What will be, of course, very important for you to look at our Q1 is that we have a very large turnaround in Channelview. This is not a small one. You've seen, I mean, the financial impacts that that turnaround has. In addition to that, we anticipated or we took measures prior to the freeze Enzo hitting, let's say, Houston and surrounding.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

So we did proactively take measures. We did shut down a number of lines to minimize the impact of the freeze. So that will, of course, impact Q1. With slightly lower operating rates as a consequence in OPAN, we have slightly higher rates than in IND, slightly higher rates than also in Europe, Asia and international for O and P. Let me point out that North American demand, as I said before, in PE and PP remains on that trajectory of recovery, so it remains, I mean, strong.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

But as said before, I mean, Q1 starts where Q4 ended, so a slow start in the year. But we remain having quite a level of confidence as we move, I mean, towards 2025. We see, I mean, points in certain industries, also regionally, that a huge amount of additional capacity asset. So we see points whereby, I mean, demand is starting slowly, but steadily, I mean, to improve.

[Kimberly Foley, Executive Vice President of Global Olefins & Polyolefins and Refining at LyondellBasell Industries]

Peter, if I might, could I add a comment about the turnaround? Our turnarounds, I think, is a better way to characterize it. I want to help all of you with your modeling. We're taking down an olefins unit as well as our metathesis or flex unit and all of our C4 processing. So the impact is not just to olefins, it's to propylene and C4 molecules when we talk in each of these calls about optimizing the cost of ethylene.

[Kimberly Foley, Executive Vice President of Global Olefins & Polyolefins and Refining at LyondellBasell Industries]

So I wanted to make sure I highlighted that because last year we had a turnaround and it was a $70,000,000 impact. You see this time it's $190,000,000 So I wanted to help everybody better understand what that is.

[Operator]

Thank you. Our next question comes from the line of Jeff Zekauskas with JPMorgan. Please proceed with your question.

[Jeff Zekauskas, Analyst at JPMorgan Chase]

Thanks very much. Lyondell has been characterized by dividend increases through the years and EBITDA has been under pressure, but cash flows have been good. Has the skein of dividend increases for Lyondell come to an end? Or are dividends looking like they could increase in 2025?

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

Thank you, Jeff. Good question as well and I'm going to start and maybe then also hand over to Michael. You heard me saying as well and you heard Michael say as well in the prepared remarks, fantastic cash flow generation throughout the year 2024 after a year 2023 where we did that as well. And I'm personally very pleased, I mean, with the attention that all our people have on cash flow generation. You see the results out of that.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

This is not just by coincidence. In addition to that, of course, we're doing that big transformation during 2025, which helps in having a very focused portfolio that is then also helping us to continue the trajectory as we have said at the Capital Markets Day on very good cash flow conversion. So if you look at all these factors, that's why we Michael and I, we said in the prepared remarks, I mean, we're continue to be very well positioned to continue the trajectory to increase our dividends. Of course, not a decision at this point in time, as you all know, that's a decision that is following in May, and that will be taken then by the Board. But if we look at the numbers, we continue to be quite confident.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

Michael?

[Michael McMurray, Executive VP & CFO at LyondellBasell Industries]

Yes, I mean a couple of things. Couple of things also I'd add Peter is, 1, the balance sheet is in phenomenal shape. Maturity profile looks wonderful. And then we've been very disciplined and balanced from a capital allocation perspective. So we've been rewarding our shareholders with the dividend.

[Michael McMurray, Executive VP & CFO at LyondellBasell Industries]

We're also in the market buying back shares as everyone has seen, but we've also been very disciplined from a capital expenditure perspective. And if for the benefit of investors, you'll recall that we said on average, we're going to spend about $2,000,000,000 over the period 2023, 20 24, 2025. And actually, we've taken out about $750,000,000 from those previous plans. So we are being very, very disciplined given kind of market conditions, but we're confident that we have the ability to responsibly grow our dividend in the future.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

And that CapEx that we the prioritization that we did very intensively during 2023 and 2024 and again now for 2025 is really, I mean, a different view and how we are prioritizing our CapEx, diligent view on all the different projects, taking into the consideration the portfolio change that we are making. So it's not a major impact that I expect that that has. I mean, if you look at our growth for the big projects like, for example, the Moritec II project, like, for example, our next flexible metathesis, the Flex II units in Channelview. So it's not impacting those very important strategic growth projects.

[Operator]

Thank you. Our next question comes from the line of Vincent Andrews with Morgan Stanley. Please proceed with your question.

[Vincent Andrews, Analyst at Morgan Stanley]

Thank you. Peter, you made a couple of comments about capacity. 1 in Europe suggesting that we might finally see some meaningful rationalization there. And I think also when you were talking about the technology segment, you talked about how you're seeing some future projects from customers get, I think you said canceled, but maybe you only said deferred. But if you could just give us a little insight on what you're hearing and seeing and how meaningful either or both of those might be to the near or medium term?

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

Thank you, Vincent. Very good strategic questions. Capacity rationalization in Europe, as you know, is ongoing. There has been quite some announcements in the meantime out there. And you know, I mean, from the market that these have not just been announcements, but actually capacities are being shut down.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

And it's not a coincidence, because we all know, I mean, that there is quite some challenges in the European market. Energy costs, just to point to that, is extremely high. Everybody is asking, I mean, for support from the regulators to keep the industry in Europe. But in the meantime, it takes time until these decisions are being taken by the authorities and the entire industry is taking action. The list is getting longer and longer on rationalizations in Europe.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

You know that we have been very early in that entire process with our European strategic assessments and we continue to make very good progress on the strategic assessments. Nothing that we can announce at this point in time, but rest assured, we're making very good progress in that regard. Now you see the other side and that gives us always a good hedging and a good visibility, because in our technology segment, we do see that there is a slowdown in demand for licenses and that fits very well together with what we have been saying that there is a slowdown in additional capacities that will be built up during the next years, 5 years, as long as we can look forward.

[Operator]

Thank you. Our next question comes from the line of Frank Mitsch with Fermium Research. Please proceed with your question.

[Frank Mitsch, President at Fermium Research]

Hey, good morning and best wishes again, Michael and congrats again, Augustine. Thank you, Brendon. Yes, Peter, you offered that we're starting out 1Q at a low level, mentioning energy prices, ethane prices, etcetera. Obviously, there's a lot of price increases that are on the table. I'm speaking specifically on polyethylene and just O and P Americas in general.

[Frank Mitsch, President at Fermium Research]

So we have some price increases on the table. We also have some contract resets. How do you view the margin profile for polyethylene playing out as we move through the

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

Q1. Thank you, Frank. And of course, also thank you, I mean, for sending best wishes, I mean, to Michael. And I'm absolutely confident that Augustine is going to be a very good successor of Michael, having worked now with Augustine since a number of years. So to your question, if you look at all the data points, no major capacity increases in North America that are hitting the market.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

The surprise that we had in Q4 that prices didn't go up for polyethylene, but actually went down despite the fact that the quarter was very balanced with quite a lot of exports outside of the United States. I mean, these price increases that are out there for both PE as well as for PP. So let me hand over now to our Head of the Business Unit to Kim. Kim, how confident are you?

[Kimberly Foley, Executive Vice President of Global Olefins & Polyolefins and Refining at LyondellBasell Industries]

So I want to build a little bit on this story before I talk about confidence and price increases. In January December, as we've alluded to, you saw these higher feedstock energy costs that translate to about a $0.05 or $0.06 per pound increase in ethylene. So we're coming into this market with lower starting mono or polymer prices as well as as you've said Frank contract resets. So LYB and other producers have announced 7.05. Do I have a crystal ball and can say that what's the probability of that?

[Kimberly Foley, Executive Vice President of Global Olefins & Polyolefins and Refining at LyondellBasell Industries]

No. But what I want to remind you to help you understand this full picture is 5% of the industry crackers are coming offline. That's a lot of capacity. So if I'm an integrated producer and I've got an olefins outage, am I going to buy expensive ethylene to have a negative margin and produce polyethylene? I don't think so.

[Kimberly Foley, Executive Vice President of Global Olefins & Polyolefins and Refining at LyondellBasell Industries]

So I think it's really important that everybody understands the full gist of the and the importance of we've got to have margin throughout the chain. So don't have a crystal ball, but I'm pretty confident that we're going to see some margin or some price improvement in the Q1.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

And you had some impacts of Enzo as well? Yes. Yes. Very good.

[Operator]

Thank you. Ladies and gentlemen, our final question this morning comes from the line of Kevin McCarthy with Vertical Research Partners. Please proceed with your question.

[Kevin McCarthy, Partner at Vertical Research Partners]

Yes. Thank you and good morning everyone. My compliments on slide number 5, which I think is interesting to kind of compare and contrast the degree of depression across some of these markets. Peter, I'd appreciate your updated cycle view on the propylene chain or polypropylene. It seems to me on the one hand, these cracker closures should also serve to diminish supply of propylene monomer.

[Kevin McCarthy, Partner at Vertical Research Partners]

On the other hand, I think you have a lot of these crude oil to chemical projects around the world, particularly longer term that are meant to maximize propylene coming out of refineries and so forth. So how do you view maybe the next 2 or 3 years in that chain? And might you plan to take strategic action there yourselves?

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

Yes. Thank you very much. I mean, Kevin, let me hand over, I mean, to Kim on that question.

[Kimberly Foley, Executive Vice President of Global Olefins & Polyolefins and Refining at LyondellBasell Industries]

So Kevin, I think as you've seen, the industry go to lighter feedstocks, more ethane versus naphtha, you've seen a decline in propylene. A lot of people have as such have built PDH units where you're converting propane to propylene. And you see a lot of that capacity has been in China. So you're seeing China set the floor here for propylene to polypropylene dynamics. LyondellBasell for us being an integrated propylene producer, it's important for us not only on polypropylene, but on propylene oxide.

[Kimberly Foley, Executive Vice President of Global Olefins & Polyolefins and Refining at LyondellBasell Industries]

So we've announced that we are an FID for what we call our FLEX II or metathesis unit and we are taking back control of the propylene molecules for us not only as we shut down our refinery and lose our refinery grade propylene, but also as we think about how to have better integration through our chains.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

I want to add to that, of course, that we continue to be very engaged in Saudi Arabia with our joint venture that we have built up called NetVet. So we have, I mean, then, of course, that capacity in polypropylene, which is a lowest delivered cost capacity, very good feedstock conditions. And we continue to work with our partner on the expansion projects to more than double that capacity. The other part, I mean, on strategic measures is falling in the European assessments. Remember, before we started with the European assessment, we took out capacity in the southern part of Italy.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

And as I said, we are still working on the European assessments. We are in the market making good progress on that as well. So you see that shift strategically with all these elements, the ones that Kim alluded to, the ones that I mentioned, to have to be very well positioned to grow on one hand side, but grow also with a much lower cost I mean position.

[Operator]

Thank you. Ladies and gentlemen, that concludes our question and answer session.

[Operator]

I'll turn the floor back

[Operator]

to Mr. Bannicker for any final comments.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

Yes. Thank you again, I mean, for all the excellent questions. I also want to again thank, I mean, our global team for delivering outstanding value and maximizing cash conversion during these challenging times, while operating safely and reliably. Now, I would like to leave you with 4 key messages. First of all, we continue to make excellent progress on our strategy to make LYB a much more focused company with a leading, streamlined and advantaged asset footprint and product offering.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

Secondly, we're best positioned to navigate this long down cycle and we see early signs of improvements. 3rd, our cash conversion and dividend yield continues to be leading in our industry and we're well positioned to extend our track records of growing our dividends in 2025. And 4th, we're progressing well with the execution of our company transformation to grow our asset portfolio of cost advantaged operations from 60% to 70%, and we have started work to simplify our operating model as a consequence then out of that. So with that, we wish you all a great and safe weekend. Stay well.

[Peter Z. Vanacker, CEO & Executive Director at LyondellBasell Industries]

Thank you.

[Operator]

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

Participants

Executives

• David Kinney, Head Of Investor Relations
• Peter Z. Vanacker, CEO & Executive Director
• Michael McMurray, Executive VP & CFO
• Kimberly Foley, Executive Vice President of Global Olefins & Polyolefins and Refining
• Aaron Ledet, Executive Vice President of Intermediates & Derivatives and Supply Chain
• Torkel Rhenman, Executive Vice President of Advanced Polymer Solutions

Analysts

• Steve Byrne, Research Analyst at Bank of America Securities
• Patrick Cunningham, Analyst at Citigroup
• Christopher Perrella, Equity Research Analyst at UBS Group
• Jeff Zekauskas, Analyst at JPMorgan Chase
• Vincent Andrews, Analyst at Morgan Stanley
• Frank Mitsch, President at Fermium Research
• Kevin McCarthy, Partner at Vertical Research Partners