Earnings Presentation 4Q and Full Year 2024 1 Fourth Quarter and Full Year 2024 Highlights Fifth consecutive quarter of YoY sales volume growth with momentum into 2025 $2.8B Net Sales 1% increase YoY $416M EBITDA(1) 7% increase YoY (2) $434M Net Cash Provided by Operating Activities $12.1B Net Sales 3% decrease YoY $2.3B EBITDA(1,2) 12% decrease YoY(2) $1.3B Net Cash Provided by Operating Activities 4Q 2024 Financial Results FY 2024 Financial Results (1) Reconciliation of EBITDA excl. Identified Item to Net ...

Core Insights - Westlake Chemical reported $2.84 billion in revenue for Q4 2024, a year-over-year increase of 0.6%, but fell short of the Zacks Consensus Estimate by -2.12% [1] - The company's EPS for the same period was $0.06, a significant decline of -91.67% compared to $0.72 a year ago, representing a surprise of -94.23% against the consensus estimate of $1.04 [1] Financial Performance Metrics - Net external sales in Performance and Essential Materials were $1.86 billion, slightly below the average estimate of $1.88 billion, reflecting a year-over-year decrease of -1% [4] - Net external sales in Housing and Infrastructure Products reached $981 million, slightly below the estimated $986.27 million, but showed a year-over-year increase of +3.7% [4] - Net external sales for Housing Products were $818 million, compared to an estimate of $827.85 million, marking a +2.9% change year-over-year [4] - Essential Materials within Performance and Essential Materials reported $741 million, below the estimate of $826.41 million, indicating a -4.1% change year-over-year [4] - Infrastructure Products in Housing and Infrastructure Products achieved $163 million, exceeding the estimate of $151.67 million, with a year-over-year increase of +8% [4] - Performance Materials reported $1.12 billion, slightly below the average estimate of $1.15 billion, reflecting a +1.3% change year-over-year [4] - EBITDA for Housing and Infrastructure Products was $188 million, surpassing the average estimate of $150.48 million [4] - EBITDA for Performance and Essential Materials was $220 million, below the average estimate of $294.76 million [4] Stock Performance - Westlake's shares have returned -6.8% over the past month, underperforming the Zacks S&P 500 composite, which changed by -0.5% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance in the near term [3]

Financial Performance - Westlake Chemical reported quarterly earnings of $0.06 per share, missing the Zacks Consensus Estimate of $1.04 per share, and down from $0.72 per share a year ago, representing an earnings surprise of -94.23% [1] - The company posted revenues of $2.84 billion for the quarter ended December 2024, missing the Zacks Consensus Estimate by 2.12%, and slightly up from $2.83 billion year-over-year [2] Market Performance - Westlake shares have declined approximately 4.3% since the beginning of the year, while the S&P 500 has gained 2.2% [3] - The current Zacks Rank for Westlake is 4 (Sell), indicating expected underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.51 on revenues of $3.05 billion, and for the current fiscal year, it is $7.44 on revenues of $12.64 billion [7] - The estimate revisions trend for Westlake has been unfavorable ahead of the earnings release, which may impact future stock movements [6] Industry Context - The Chemical - Plastic industry, to which Westlake belongs, is currently ranked in the bottom 19% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Financial Performance - Westlake reported fourth quarter 2024 net sales of $2.8 billion, a 1% increase year-over-year, driven by a 3% sales volume growth[6]. - The company achieved a net income of $7 million for the fourth quarter, which includes a one-time non-cash tax charge of $45 million[10]. - Full year 2024 net sales totaled $12.1 billion, with net income of $677 million, reflecting a decrease from $1.1 billion in 2023[13]. - EBITDA for the fourth quarter of 2024 was $416 million, a 7% increase from $390 million in the same period last year[12]. - Gross profit for Q4 2024 was $328 million, significantly up from $199 million in Q4 2023, contributing to a total gross profit of $1,957 million for the year, down from $2,219 million[31]. - The company reported a net income of $19 million in Q4 2024, recovering from a net loss of $487 million in Q4 2023, with a total net income of $647 million for the year compared to $522 million in 2023[31]. - Earnings per share for Q4 2024 were $0.06, a recovery from a loss of $3.86 per share in Q4 2023, with annual earnings per share increasing to $4.66 from $3.73[31]. Segment Performance - The Housing and Infrastructure Products segment reported an annual income from operations of $807 million and EBITDA of $1.1 billion[4]. - Performance and Essential Materials segment net sales for 2024 were $7.8 billion, a decrease of $0.5 billion compared to 2023, with a loss from operations of $204 million[21]. - The Housing and Infrastructure Products segment reported net sales of $981 million in Q4 2024, up from $946 million in Q4 2023, while the Performance and Essential Materials segment saw a slight decrease in sales to $1,862 million from $1,880 million[37]. - The Performance and Essential Materials segment reported net external sales of $2,019 million for the three months ended September 30, 2024, compared to $1,880 million in the same period of 2023, reflecting a growth of 7.4%[52]. - The Housing and Infrastructure Products segment achieved an operating income margin of 18% for the three months ended September 30, 2024, up from 13% in the same period of 2023[49]. Cash Flow and Liquidity - The company generated $434 million in net cash from operating activities in the fourth quarter and $1.3 billion for the full year 2024[15]. - Westlake's cash and cash equivalents stood at $2.9 billion, with total debt of $4.6 billion as of December 31, 2024[15]. - Cash and cash equivalents at the end of 2024 were $2,935 million, down from $3,319 million at the end of 2023[35]. - The company’s operating cash flow for 2024 was $1,314 million, a decrease from $2,336 million in 2023[35]. - Free cash flow for the three months ended September 30, 2024, was $254 million, compared to $149 million in the same period of 2023, marking an increase of 70.5%[46]. Future Outlook - The company anticipates continued growth in the Housing and Infrastructure Products segment due to increased demand for residential housing in the U.S.[9]. - Westlake plans to focus on cost-saving initiatives and new product innovations to enhance earnings growth in 2025[9]. - Westlake Corporation plans to continue focusing on operational efficiency and strategic investments to enhance long-term growth prospects[26]. Restructuring and Costs - The company incurred restructuring, transaction, and integration-related costs of $8 million in Q4 2024, down from $22 million in Q4 2023[31].

Core Viewpoint - Westlake Chemical (WLK) is expected to report quarterly earnings of $1.04 per share, reflecting a 44.4% increase year-over-year, with revenues projected at $2.89 billion, a 2.4% increase from the previous year [1]. Earnings Estimates - The consensus EPS estimate for the quarter has been revised upward by 0.9% over the past 30 days, indicating analysts' reassessment of their projections [2]. - Changes in earnings estimates are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate trends and short-term stock performance [3]. Revenue Projections - Analysts predict 'Net external sales- Performance and Essential Materials' will reach $1.88 billion, a 0.1% increase from the prior year [5]. - The consensus for 'Net external sales- Housing and Infrastructure Products' is estimated at $986.27 million, reflecting a 4.3% increase year-over-year [5]. - For 'Net external sales- Housing and Infrastructure Products- Housing Products', the estimate stands at $827.85 million, indicating a 4.1% year-over-year change [6]. - 'Net external sales- Performance and Essential Materials- Essential Materials' is projected at $826.41 million, showing a 6.9% increase from the previous year [6]. - 'Net external sales- Housing and Infrastructure Products- Infrastructure Products' is expected to reach $151.67 million, a 0.4% increase year-over-year [7]. - 'Net external sales- Performance and Essential Materials- Performance Materials' is estimated at $1.15 billion, reflecting a 3.5% increase from the prior year [7]. EBITDA Estimates - The consensus estimate for 'EBITDA- Housing and Infrastructure Products' is projected at $150.48 million, down from $173 million in the previous year [8]. Stock Performance - Westlake shares have decreased by 2.3% over the past month, contrasting with a 4.7% increase in the Zacks S&P 500 composite, and the company holds a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [8].

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Westlake Chemical, driven by higher revenues, with a focus on how actual results compare to estimates impacting stock price [1][2]. Earnings Expectations - Westlake Chemical is expected to report quarterly earnings of $1.04 per share, reflecting a year-over-year increase of 44.4% [3]. - Revenues are projected to reach $2.89 billion, marking a 2.4% increase from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised 0.93% higher in the last 30 days, indicating a reassessment by analysts [4]. - A positive Earnings ESP reading suggests a potential earnings beat, particularly when combined with a strong Zacks Rank [8]. Earnings Surprise Prediction - The Most Accurate Estimate for Westlake is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -2.55%, indicating bearish sentiment among analysts [10][11]. - Westlake currently holds a Zacks Rank of 4, complicating predictions for an earnings beat [11]. Historical Performance - In the last reported quarter, Westlake was expected to earn $2.12 per share but only achieved $1.41, resulting in a surprise of -33.49% [12]. - Over the past four quarters, Westlake has beaten consensus EPS estimates twice [13]. Conclusion - Westlake does not appear to be a strong candidate for an earnings beat, and investors should consider additional factors before making investment decisions [16].

Core Viewpoint - Westlake Chemical Partners (NYSE: WLKP) is recognized for its high dividend yield, but it is considered fairly priced at current levels [1]. Company Overview - Westlake Chemical Partners owns ethylene production plants in the U.S. [1]. - The company is appealing to investors due to its disciplined capital allocation and ability to generate exceptional returns on capital [1]. Investment Philosophy - The investment philosophy emphasizes buying high-quality stocks and businesses that can compound invested capital over long periods [1].

Investment and Strategic Initiatives - Westlake Corporation's subsidiary, Westlake Innovations, has invested in Universal Matter, Inc., which focuses on supplying high-quality and sustainable graphene and advanced materials aimed at decarbonization [1] - This investment aligns with Westlake's commitment to developing a sustainable future through enhancements in manufacturing and strategic investments in innovative technologies and startups [1] Technological Advancements - Universal Matter utilizes patented Flash Joule Heating technology, developed at Rice University, to produce tunable graphene in various morphologies [8] - This technology enables cost-effective, industrial-scale upcycling of carbon waste into high-quality graphene, facilitating its integration into downstream industrial products [8] Market Context and Performance - Westlake noted a disparity in the recovery rates from the recent decline in global manufacturing and industrial activity, but anticipates a potential acceleration in macroeconomic recovery due to fiscal and monetary support [6] - The company aims to focus on developing and launching innovative products to meet consumer demands and enhance long-term shareholder value [6] Industry Positioning - Graphene presents numerous performance and sustainability benefits applicable across Westlake's Performance & Essential Materials and Housing & Infrastructure Products business lines, indicating a strategic opportunity for collaboration with Universal Matter [5]

Westlake Corporation’s (WLK) unit, Westlake Royal Building Products has launched Dryroll, a universal ridge vent and weather block. Dryroll is designed to optimize roof protection and attic ventilation. It works by helping to exhaust heat and moisture from the roof.With rollable installation, Dryroll is unrolled and sealed to field tiles. The product blends smoothly with the roof and reduces unappealing field vents and roof penetrations. Its aluminum sides may be stretched to conform seamlessly to the roof. ...

Core Insights - Westlake Corporation (WLK) reported a third-quarter 2024 profit of $108 million or 83 cents per share, a significant decrease from $285 million or $2.20 per share in the same quarter last year. Adjusted earnings were $1.41 per share, missing the Zacks Consensus Estimate of $2.12 [1][2] Financial Performance - Sales for the reported quarter were $3,117 million, remaining flat year over year but below the Zacks Consensus Estimate of $3,230.6 million. Sequentially, sales declined by 3% due to a 4% drop in sales volumes, which outweighed a 1% increase in average sales prices [2] - The Performance and Essential Materials (PEM) segment saw sales increase by approximately 2% year over year to $2,019 million, surpassing the estimate of $2,017.8 million. However, PEM sales volume fell by 1% sequentially, while average sales price rose by 1% [3] - The Housing and Infrastructure Products (HIP) segment generated sales of $1,098 million, down around 4% from the previous year and below the estimate of $1,211.8 million. This decline was attributed to weaker North American residential construction activity and weather disruptions [4] Financial Position - As of September 30, 2024, Westlake had cash and cash equivalents totaling $2.9 billion, with total debt at $4.6 billion. The net cash provided by operating activities in the third quarter was $474 million, with capital expenditures amounting to $220 million [5] Outlook - The company indicated that the recovery from the recent downturn in global industrial and manufacturing activities remains uneven. However, recent monetary and fiscal stimulus could potentially accelerate macroeconomic recovery. Westlake plans to focus on developing and commercializing innovative products, improving plant profitability, and creating long-term shareholder value [6] Industry Context - Westlake currently holds a Zacks Rank of 5 (Strong Sell). In comparison, DuPont de Nemours, Inc. reported adjusted earnings of $1.18 per share, exceeding the Zacks Consensus Estimate of $1.04, and raised its full-year 2024 projections for operating EBITDA and adjusted earnings per share [7] - The Chemours Company recorded adjusted earnings of 40 cents, surpassing the Zacks Consensus Estimate of 32 cents, but expects a decline in consolidated net sales in the mid to high-single digits for the fourth quarter [8] - PPG Industries, Inc. reported third-quarter adjusted earnings per share of $2.13, missing the Zacks Consensus Estimate of $2.15, and anticipates flat organic sales and adjusted earnings per share at the lower end of the $8.15 to $8.30 range for full-year 2024 [9]