LyondellBasell(LYB) - 2024 Q4 - Annual Results

Financial Performance Overview LyondellBasell reported a Q4 2024 net loss of $603 million and full-year net income of $1.37 billion, driven by asset write-downs, while generating $3.8 billion in cash from operations and achieving 65% CLCS volume growth Full Year and Fourth Quarter 2024 Earnings Summary | | Three Months Ended | Year Ended | | :--- | :--- | :--- | | Millions of U.S. dollars (except share data) | Dec 31, 2024 | Dec 31, 2024 | | Sales and other operating revenues | $9,497 | $40,302 | | Net (loss) income | ($603) | $1,367 | | Diluted (loss) earnings per share | ($1.87) | $4.15 | | EBITDA | ($409) | $3,456 | Full Year and Fourth Quarter 2024 Earnings Summary (Excluding Identified Items) | | Three Months Ended | Year Ended | | :--- | :--- | :--- | | Millions of U.S. dollars (except share data) | Dec 31, 2024 | Dec 31, 2024 | | Net income excluding identified items | $249 | $2,101 | | Diluted earnings per share excluding identified items | $0.75 | $6.40 | | EBITDA excluding identified items | $689 | $4,336 | - For the full year 2024, the company generated $3.8 billion of cash from operating activities, achieving a 90% cash conversion rate[4] - The Circular and Low Carbon Solutions (CLCS) business delivered a 65% year-over-year volume growth in 2024[4] Detailed Financial Results This section analyzes quarterly and annual financial results, highlighting Q4's net loss from asset write-downs and the full year's strong cash generation despite challenging market conditions Fourth Quarter 2024 Results Q4 2024 saw a net loss of $603 million, primarily due to $852 million in identified non-cash asset write-downs and declining margins from rising feedstock costs and slower demand - The company reported a Q4 2024 net loss of $603 million, or $1.87 per share, which included $852 million (net of tax) of identified items[5] - Key identified items were non-cash asset write-downs related to the O&P Europe, Asia & International (O&P EAI) segment ($769 million) and the Advanced Polymer Solutions (APS) segment ($42 million)[5] - Margins were negatively impacted by rising costs for NGL feedstocks and natural gas, coupled with seasonally slower demand that limited product pricing power[6] Full Year 2024 Results Full year 2024 net income reached $1.4 billion, with $3.8 billion generated in cash from operations, supporting capital expenditures and shareholder returns, while maintaining a robust $8.0 billion in liquidity despite market headwinds - Full year 2024 net income was $1.4 billion ($4.15 per share), with identified items impacting earnings by $2.25 per share[7] - Generated $3.8 billion in cash from operating activities, reinvesting $1.8 billion in capital expenditures and returning $1.9 billion to shareholders through dividends and share repurchases[8] - Maintained a robust investment-grade balance sheet with $8.0 billion of available liquidity at year-end, including $3.4 billion in cash and cash equivalents[8] - Petrochemical markets faced headwinds from soft global demand for durable goods, rising raw material costs, and economic uncertainty throughout 2024[9] Strategic Highlights & Outlook LyondellBasell is advancing its strategy, unlocking $1.3 billion towards its $3 billion EBITDA target, and anticipates 2025 market recovery, highlighted by the strategic cessation of refining operations in Q1 Strategy Highlights The company is executing its strategy to generate $3 billion incremental Normalized EBITDA by 2027, having unlocked approximately $1.3 billion by end of 2024 through new capacity and value enhancement programs - The company's strategy aims to generate $3 billion of incremental Normalized EBITDA by 2027[11] - By the end of 2024, LYB unlocked approximately $1.3 billion of incremental Normalized EBITDA, primarily from new PO/TBA capacity and the Value Enhancement Program[11] - Despite navigating the longest and deepest market downturn in the CEO's career, the company is not wavering in its strategy execution, supported by a robust balance sheet and commitment to shareholder returns[10] Outlook for 2025 For 2025, LYB anticipates Q1 seasonal demand improvements and a gradual economic recovery, with a key strategic move being the cessation of refining operations in Q1 2025 - The company anticipates seasonal demand improvements in Q1 2025 and a gradual recovery in oxyfuels margins during the summer[12] - Refining operations will cease in the first quarter of 2025, a strategic milestone to advance growth in circular and low-carbon feedstocks and products[12] Planned Q1 2025 Operating Rates | Segment | Planned Operating Rate | | :--- | :--- | | Olefins & Polyolefins Americas | ~80% | | Olefins & Polyolefins EAI | ~75% | | Intermediates & Derivatives | ~80% | Financial Reconciliations and Non-GAAP Measures This section details the company's use of non-GAAP financial measures like EBITDA and adjusted net income, providing reconciliations and calculations for cash conversion and incremental Normalized EBITDA - The company uses non-GAAP financial measures like EBITDA, and results excluding identified items, to provide investors with a clearer view of underlying business trends and for period-over-period comparisons[20] FY 2024 Reconciliation of Net Income to EBITDA (Millions USD) | Metric | Amount | | :--- | :--- | | Net income | $1,367 | | Provision for income taxes | $240 | | Depreciation and amortization | $1,522 | | Interest expense, net | $331 | | EBITDA | $3,456 | FY 2024 Cash Conversion Calculation | Metric | Amount (Millions USD) | | :--- | :--- | | Net cash provided by operating activities | $3,819 | | EBITDA excluding certain items | $4,237 | | Cash conversion | 90% | - For FY 2024, total identified items impacting net income included a $284 million pre-tax gain on the sale of the EO&D business, $1,065 million in pre-tax asset write-downs, and $179 million in pre-tax refinery exit costs[29]