Core Viewpoint - LyondellBasell Industries N.V. (NYSE: LYB) is considered a compelling contrarian buy primarily due to its valuation, despite existing risks associated with the investment thesis [1]. Group 1: Company Overview - LyondellBasell is positioned as an attractive investment opportunity based on its current market valuation [1]. Group 2: Analyst Background - The analysis is conducted by a stock analyst with over 20 years of experience in quantitative research, financial modeling, and risk management, focusing on equity valuation and market trends [1]. - The analyst has a background as a former Vice President at Barclays, leading teams in model validation and stress testing, which contributes to a deep expertise in both fundamental and technical analysis [1]. Group 3: Research Approach - The research approach combines rigorous risk management with a long-term perspective on value creation, emphasizing macroeconomic trends, corporate earnings, and financial statement analysis [1].

Core Viewpoint - LyondellBasell Industries N.V. (LYB) has announced a quarterly dividend increase, marking its 15th consecutive year of dividend growth, reflecting a commitment to shareholder value and disciplined capital allocation [1][2]. Financial Performance - In the first quarter, LYB exceeded its long-term cash conversion target, investing $483 million in capital expenditures and returning $543 million to shareholders through dividends and stock buybacks [3]. - LYB's stock has declined by 43.2% over the past year, compared to a 29.6% decline in the industry [3]. Market Outlook - For the second quarter, LYB anticipates improved seasonal demand across most business segments, with easing U.S. natural gas and ethane feedstock prices and lower crude oil costs benefiting operations in Europe and Asia [4]. - Oxyfuels margins are expected to rise due to widening gasoline crack spreads during the summer driving season [4]. - In Europe, rapid capacity reductions are projected to improve the regional supply-demand balance, supported by a more constructive economic and regulatory environment [5]. - Global demand for packaging is expected to remain firm, benefiting essential sectors such as food, healthcare, and daily consumer goods [5].

Core Points - LyondellBasell announced a quarterly dividend of $1.37 per share, marking a $0.03 increase from the previous quarter [1] - The dividend will be paid on June 9, 2025, with an ex-dividend and record date of June 2, 2025 [1] Company Overview - LyondellBasell is a leader in the global chemical industry, focusing on sustainable living solutions [2] - The company emphasizes advanced technology and investments to support a circular and low carbon economy [2] - LyondellBasell is one of the largest producers of polymers and a leader in polyolefin technologies, providing innovative products for various applications [2]

Group 1 - The article emphasizes the importance of building foundational knowledge and learning skills during the early years of the education system [1] Group 2 - The company promotes a portfolio strategy that focuses on high dividend yields, targeting a return of 9-10% [5] - The service aims to simplify retirement investing by providing a model portfolio that generates strong returns without the need for selling assets [5] - A month-long paid trial is offered at $49, with an additional 5% discount as an incentive for potential investors [5]

Houston, May 06, 2025 (GLOBE NEWSWIRE) -- LyondellBasell (NYSE: LYB) announced today that LYB International Finance III, LLC, its wholly-owned subsidiary, priced a public offering (the “Offering”) of $500,000,000 aggregate principal amount of 6.150% Guaranteed Notes due 2035 (the “Notes”). The Notes will be fully and unconditionally guaranteed by LyondellBasell. The Offering is expected to close on May 15, 2025, subject to the satisfaction of customary closing conditions. The net proceeds of the Offering ar ...

Group 1 - LyondellBasell is a global leader in the chemical industry, recognized as a top producer of plastics, chemicals, and refined products [1] - The company operates a diverse portfolio of operations worldwide, indicating a strong market presence [1] Group 2 - The analyst expresses a focus on undervalued and disliked companies with strong fundamentals and good cash flows, particularly in sectors like Oil & Gas and consumer goods [1] - There is an emphasis on long-term value investing, with occasional interest in deal arbitrage opportunities [1]

First Quarter 2025 Earnings See the APPENDIX for a discussion of the Company's use of non-GAAP financial measures. 2 Safety performance April 25, 2025 Cautionary statement The statements in this presentation relating to matters that are not historical facts are forward-looking statements. These forward-looking statements are based upon assumptions of management of LyondellBasell which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. When used in this rel ...

Core Insights - LyondellBasell reported a revenue of $7.68 billion for Q1 2025, marking a year-over-year decline of 22.7% and an EPS of $0.33 compared to $1.53 a year ago, with a revenue surprise of +1.10% over estimates but an EPS surprise of -8.33% [1] Revenue Performance - Advanced Polymer Solutions generated $908 million, below the average estimate of $948.40 million, reflecting a year-over-year decline of 5.9% [4] - Olefins and Polyolefins in the Americas reported $2.48 billion, missing the $2.74 billion estimate, down 13.6% year-over-year [4] - Other/Eliminations showed a revenue of -$730 million, better than the estimated -$1.45 billion, with a year-over-year change of -52.1% [4] - Intermediates & Derivatives achieved $2.30 billion, below the $2.47 billion estimate, down 11.1% year-over-year [4] - Technology revenues were $120 million, significantly lower than the $175.43 million estimate, representing a 37.5% decline year-over-year [4] - Olefins and Polyolefins in Europe, Asia, and International reported $2.60 billion, slightly above the $2.55 billion estimate, down 5.3% year-over-year [4] EBITDA Analysis - EBITDA for Olefins & Polyolefins in the Americas was $251 million, slightly below the $262.06 million estimate [4] - EBITDA for Olefins & Polyolefins in Europe, Asia, and International was $17 million, outperforming the estimated -$29.93 million [4] - Intermediates & Derivatives EBITDA was $94 million, significantly lower than the $256.57 million estimate [4] - Technology EBITDA was $52 million, below the $81.30 million estimate [4] - Other EBITDA was -$1 million, better than the estimated -$2 million [4] - Advanced Polymer Solutions EBITDA was $46 million, exceeding the $18.11 million estimate [4] Stock Performance - LyondellBasell shares have returned -16.5% over the past month, compared to the Zacks S&P 500 composite's -4.8% change, with a Zacks Rank 5 indicating potential underperformance in the near term [3]

Financial Data and Key Metrics Changes - Earnings per share for Q1 2025 were $0.33, with EBITDA nearly reaching $600 million [31][34] - Cash generation was strong, with an EBITDA conversion rate of 87% over the past 12 months, exceeding the long-term target of 80% [34] - Cash balance at the end of Q1 2025 was $1.9 billion, with $579 million used from operating activities [36] Business Line Data and Key Metrics Changes - Olefins and Polyolefins Americas segment generated EBITDA of $251 million, impacted by planned and unplanned maintenance [40] - Olefins and Polyolefins Europe, Asia, and International segment saw EBITDA improve to $17 million, with cracker utilization increasing to approximately 80% [46] - Intermediates and Derivatives segment EBITDA was $211 million, a decline of $39 million due to margin compression [50] - Advanced Polymer Solutions segment achieved EBITDA of $46 million, a 30% increase year-over-year [55] Market Data and Key Metrics Changes - North American polyethylene and polypropylene sales volumes were down 2% and 1% respectively in March year-to-date [42] - European cracker margins improved due to lower feedstock costs, with modest signs of seasonal improvement in demand [48] - Trade policy volatility is expected to shift trade flows, impacting near-term trade disruptions [62] Company Strategy and Development Direction - The company is focused on reshaping its portfolio, having closed several assets and aiming to reduce annual fixed costs by approximately $300 million [12][68] - The value enhancement program is expected to unlock $1 billion in recurring annual EBITDA by the end of 2025 [13][70] - The Flex-2 project is set to strengthen market position and reduce costs, with an estimated EBITDA benefit of approximately $150 million per year post-startup [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current downturn without compromising strategy, aiming to emerge stronger and more resilient [15][20] - The ongoing cash improvement plan targets an additional $500 million in cash flow improvements for 2025 [17] - Management remains cautious about cost trends for the remainder of the year, despite declining feedstock costs [44] Other Important Information - The company is actively managing capital expenditures, reducing spending by approximately $300 million relative to guidance in 2024 [14] - The closure of the Dutch PO joint venture with Covestro was announced as part of the strategy to ensure asset alignment with company goals [52] Q&A Session Summary Question: Outlook for the polyethylene industry in China - Management noted that demand in China remains weak, with stimulus initiatives not yet focused on direct consumption [75] - The polyethylene trade deficit in China is expected to persist, impacting capacity utilization [76] Question: Potential tariff impacts to U.S. feedstocks - Management indicated that trade policies are dynamic, and they are working closely with customers to navigate potential changes [86] Question: Capital spending outlook - Management confirmed that they will continue to prioritize and de-prioritize capital expenditures based on market conditions [92][108] Question: Impact of reduced U.S. polyethylene exports to China - Management stated that they are not heavily reliant on exports and have strong domestic volumes, with trade flows expected to adjust [101][104] Question: European stimulus impact - Management expressed cautious optimism about the potential benefits of European stimulus measures, particularly for circular products [130][132] Question: Trough EBITDA expectations - Management indicated that the current environment suggests a lower trough EBITDA, but they expect mid-cycle EBITDA to improve significantly in the long term [135]

Financial Performance - Revenues for Q1 2025 were $7,677 million, a decrease of $131 million or 2% compared to Q4 2024, and a decrease of $627 million or 8% compared to Q1 2024[91][94]. - Operating income for Q1 2025 was $114 million, an increase of $711 million or 119% compared to Q4 2024, but a decrease of $537 million or 82% compared to Q1 2024[97][98]. - Comprehensive income for Q1 2025 was $262 million, an increase of $1,023 million compared to Q4 2024, but a decrease of $155 million compared to Q1 2024[105]. - Income from discontinued operations increased by $194 million in Q1 2025 compared to Q4 2024, and by $114 million compared to Q1 2024[104]. - Revenue decreased by $54 million, or 31%, in Q1 2025 compared to Q4 2024, and by $72 million, or 38%, compared to Q1 2024[141]. Segment Performance - The O&P-Americas segment reported revenues of $2,481 million in Q1 2025, down from $2,754 million in Q4 2024 and $2,871 million in Q1 2024[111]. - The O&P-EAI segment reported an operating loss of $23 million in Q1 2025, compared to an operating loss of $1,066 million in Q4 2024[111]. - The I&D segment experienced a decline in operating income, reporting a loss of $9 million in Q1 2025 compared to a profit of $137 million in Q4 2024[111]. - O&P-Americas segment revenue decreased by $273 million, or 10%, in Q1 2025 compared to Q4 2024, and by $390 million, or 14%, compared to Q1 2024[114]. - O&P-EAI segment revenue increased by $129 million, or 5%, in Q1 2025 compared to Q4 2024, but decreased by $145 million, or 5%, compared to Q1 2024[121]. - I&D segment revenue decreased by $59 million, or 3%, in Q1 2025 compared to Q4 2024, and by $288 million, or 11%, compared to Q1 2024[126]. - APS segment revenue increased by $83 million, or 10%, in Q1 2025 compared to Q4 2024, but decreased by $57 million, or 6%, compared to Q1 2024[134]. EBITDA and Operating Metrics - EBITDA for the O&P-Americas segment decreased by $245 million, or 49%, in Q1 2025 compared to Q4 2024, and by $270 million, or 52%, compared to Q1 2024[116]. - EBITDA for the O&P-EAI segment increased by $1,173 million, or 101%, in Q1 2025 compared to Q4 2024, and by $3 million, or 21%, compared to Q1 2024[123]. - EBITDA for the I&D segment decreased by $147 million, or 61%, in Q1 2025 compared to Q4 2024, and by $218 million, or 70%, compared to Q1 2024[129]. - The absence of impairment charges in Q1 2025 led to a 72% increase in EBITDA for the O&P-EAI segment compared to Q4 2024[124]. Cash Flow and Capital Expenditures - Cash used from operating activities in Q1 2025 was $579 million, primarily due to a build of working capital[90]. - The company invested $483 million in capital expenditures during Q1 2025 and returned $543 million to shareholders through dividends and share repurchases[90]. - Capital expenditures totaled $483 million in both Q1 2025 and Q1 2024, with approximately 65% in 2025 supporting maintenance activities[151]. - Cash used in operating activities was $579 million in Q1 2025, primarily due to increased accounts receivable and inventories[149]. Debt and Financing - As of March 31, 2025, total debt was $11,220 million, with $4,650 million of unused availability under credit facilities[158][159]. - The company may struggle to incur additional indebtedness or obtain financing on acceptable terms, increasing overall expenses[172]. - Non-compliance with credit facility terms could lead to accelerated obligations that may not be repayable[172]. Future Outlook and Strategic Plans - The company expects seasonal demand improvements in Q2 2025, with operating rates projected at 85% for O&P-Americas and 75% for European O&P-EAI assets[163][165]. - The company plans to achieve $500 million in annualized savings through a Cash Improvement Plan, including a $100 million deferral of capital spending[156]. - The company anticipates improved Oxyfuels margins due to higher gasoline crack spreads during the summer driving season[163]. Risks and Challenges - The company may need to reduce production or idle certain facilities due to the cyclical and volatile nature of the supply-demand balance in the chemical and refining industries, negatively affecting operating results[172]. - Significant international operations expose the company to fluctuations in exchange rates and potential liquidity issues, which could negatively affect results of operations[172]. - The company faces global business risks, including wars and political instability, which could lead to increased expenses and decreased demand for products[172]. - Failure to achieve emission reduction and sustainability targets could harm the company's reputation and impact investor sentiment[172]. - The company's ability to execute its value enhancement program is critical for expected results[172]. - The company relies on continuous technological innovation, and inability to protect its technology could negatively impact its competitive position[172].