LyondellBasell(LYB) - 2025 Q2 - Quarterly Results

Q2 2025 Earnings Overview LyondellBasell reported Q2 2025 net income of $115 million and EBITDA of $606 million, with $351 million cash from operations and $536 million returned to shareholders 1.1 Key Financial Highlights The company reported Q2 2025 net income of $115 million and EBITDA of $606 million, alongside significant cash generation and shareholder returns Q2 2025 Earnings Summary (Millions of U.S. dollars, except share data): | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Sales and other operating revenues | $7,658 | $7,677 | $8,678 | | Net income | $115 | $177 | $924 | | Diluted earnings per share | $0.34 | $0.54 | $2.82 | | Net income excluding identified items | $202 | $110 | $724 | | Diluted earnings per share excluding identified items | $0.62 | $0.33 | $2.20 | | EBITDA | $606 | $655 | $1,643 | | EBITDA excluding identified items | $715 | $576 | $1,330 | - Cash from operating activities: $351 million[4] - Returned $536 million to shareholders through dividends and share repurchases[4] 1.2 CEO's Perspective CEO Peter Vanacker emphasized strategic progress, disciplined capital allocation, and an expanded Cash Improvement Plan, expressing cautious optimism for polyolefins and policy developments - Advancing a three-pillar strategy with disciplined capital allocation to extend competitive advantage[5] - Expanding the Cash Improvement Plan to navigate a prolonged cyclical downturn[5] - Encouraged by recent improvements in pricing and demand for polyolefins, and cautiously optimistic about policy developments addressing excess capacity in China and revitalizing the European chemical industry[5] Detailed Second Quarter 2025 Performance This section provides a detailed analysis of LyondellBasell's Q2 2025 financial results, operational performance by segment, and cash flow activities 2.1 Consolidated Financial Results Q2 2025 consolidated financial results were significantly impacted by $87 million in identified items, reducing diluted EPS by $0.28 - Identified items of $87 million, net of tax, impacted Q2 2025 earnings by $0.28 per diluted share[6] - Identified items related to asset write-downs, transaction costs, Cash Improvement Plan, and discontinued operations[6] 2.1.1 Net Income and EPS Q2 2025 net income was $115 million ($0.34 diluted EPS), increasing to $202 million ($0.62 diluted EPS) excluding identified items Q2 2025 Net Income and Diluted EPS (Millions of U.S. dollars, except share data): | Metric | Q2 2025 | | :--- | :--- | | Net income | $115 | | Diluted earnings per share | $0.34 | | Net income excluding identified items | $202 | | Diluted earnings per share excluding identified items | $0.62 | 2.1.2 EBITDA Q2 2025 EBITDA was $606 million, rising to $715 million when excluding identified items Q2 2025 EBITDA (Millions of U.S. dollars): | Metric | Q2 2025 | | :--- | :--- | | EBITDA | $606 | | EBITDA excluding identified items | $715 | 2.2 Operational Performance by Segment Operational performance improved in North America and Europe due to demand and cost factors, while Intermediate Chemicals saw mixed results 2.2.1 North America O&P North American O&P experienced improved polyethylene volumes and margins from successful turnarounds and stronger seasonal demand, with Q3 profitability expected to benefit from price increases - Successful completion of turnarounds at Channelview complex led to higher operating rates and sequential improvement in integrated polyethylene volumes and margins[7] - Domestic demand for polyethylene and polypropylene was seasonally stronger, supported by consumer packaging, healthcare, building & construction, and infrastructure markets[7] - June increase in polyethylene contract prices provides momentum for third quarter profitability[7] 2.2.2 Europe O&P Europe O&P saw improved integrated polyethylene margins due to lower feedstock costs and increased seasonal polyolefins demand - Lower feedstock costs helped improve integrated polyethylene margins[7] - Polyolefins volumes benefited from increased seasonal demand[7] 2.2.3 Intermediate Chemicals Intermediate Chemicals profitability improved from stronger styrene margins but saw a decline in oxyfuels margins due to lower crude oil prices - Intermediate Chemicals profitability improved with stronger styrene margins due to lower benzene costs and price support from industry outages[8] - Oxyfuels margins fell as lower crude oil prices limited typical seasonal uplift[8] 2.3 Cash Flow, Capital Allocation, and Liquidity LyondellBasell generated $351 million in operating cash flow, invested $539 million in capital expenditures, returned $536 million to shareholders, and maintained $6.4 billion in liquidity Q2 2025 Cash Flow and Capital Allocation (Millions of U.S. dollars): | Metric | Q2 2025 | | :--- | :--- | | Cash from operating activities | $351 | | Capital expenditures | $539 | | Returned to shareholders (dividends & share repurchases) | $536 | - Maintained $1.7 billion in cash and cash equivalents and $6.4 billion in available liquidity at quarter-end[9] Strategic Direction and Future Outlook This section outlines LyondellBasell's strategic initiatives, including asset optimization and capital preservation, and provides the outlook for Q3 2025 market conditions and operating rates 3.1 Strategic Highlights LyondellBasell advanced its three-pillar strategy through asset optimization, capital preservation, and an expanded Cash Improvement Plan targeting $1.1 billion in improvements - Planned sale of four European assets to reposition for global markets from a more cost-advantaged asset base[10] - Delaying construction of the Flex-2 project to align investment levels with cash generation and preserve capital[10] - Expanded Cash Improvement Plan targeting at least $1.1 billion in cash improvements over 2025 and 2026[10] 3.2 Third Quarter 2025 Outlook Q3 2025 outlook anticipates improved North American polyethylene margins, steady European demand, favorable feedstock costs, and continued low oxyfuels margins 3.2.1 Market and Margin Expectations Q3 market expectations include improved North American polyethylene margins, steady European demand with favorable feedstock costs, and persistently low oxyfuels margins - North American integrated polyethylene margins expected to improve due to completed maintenance and increased prices supported by solid domestic demand and stronger export volumes[11] - Europe expects steady seasonal demand and favorable feedstock costs, with ongoing capacity rationalizations aiding regional supply and demand balance[11] - Oxyfuels margins are expected to remain low for the remainder of the summer season[11] 3.2.2 Operating Rate Guidance LyondellBasell provides Q3 2025 operating rate guidance of 85% for North American O&P, 75% for European O&P, and 80% for I&D assets Q3 2025 Operating Rate Guidance: | Segment | Expected Operating Rate | | :--- | :--- | | North American O&P assets | 85% | | European O&P assets | 75% | | Intermediates & Derivatives (I&D) assets | 80% | Supplemental Information This section provides additional context, including conference call details, company overview, forward-looking statement disclaimers, non-GAAP financial measure definitions, and detailed financial reconciliations 4.1 Conference Call Information LyondellBasell will host a conference call on August 1 at 11 a.m. ET to discuss Q2 2025 results, with access details and replay information provided - Conference call to be held on August 1 at 11 a.m. ET, featuring CEO Peter Vanacker and other executives[13] - Access via toll-free dial-in (1-877-407-8029), international dial-in (201-689-8029), or webcast at investors.lyondellbasell.com/earnings[13] - Replay available from August 1 to September 1, 2025, via dial-in (1-877-660-6853 or 201-612-7415, Access ID: 13746206)[13] 4.2 About LyondellBasell LyondellBasell is a global chemical industry leader focused on sustainable living, enabling a circular economy, and is a major producer of polymers and polyolefin technologies - A leader in the global chemical industry, creating solutions for everyday sustainable living[14] - Enabling a circular and low carbon economy through advanced technology and focused investments[14] - One of the world's largest producers of polymers and a leader in polyolefin technologies, developing high-quality products for applications from sustainable transportation to healthcare[14] 4.3 Forward-Looking Statements This section clarifies that the release contains forward-looking statements subject to significant risks and uncertainties, with no obligation for the company to update them - Statements not historical facts are forward-looking, based on management's reasonable assumptions but subject to significant risks and uncertainties[15] - Actual results could differ materially due to factors such as market conditions, business cyclicality, raw material volatility, competitive pressures, operating interruptions, and regulatory actions[15] - The company does not assume any obligation to update forward-looking statements, except as required by law[15] 4.4 Information Related to Non-GAAP Financial Measures This section defines and explains the company's use of non-GAAP financial measures like EBITDA and adjusted figures, provided as supplemental information for understanding business trends - Non-GAAP measures (EBITDA, adjusted net income/EPS) provide useful supplemental information for understanding underlying business trends and performance, and for period-over-period comparisons[19] - EBITDA is calculated as net income (loss) plus interest expense (net), provision for (benefit from) income taxes, and depreciation and amortization[20] - Identified items include adjustments for lower of cost or market (LCM), gain on sale of business, asset write-downs, Cash Improvement Plan costs, Dutch PO joint venture exit costs, European transaction costs, and discontinued operations[3][20] 4.5 Financial Reconciliations and Tables This section provides detailed reconciliations of GAAP to non-GAAP financial measures, including net income, EBITDA, diluted EPS, and calculations for cash, liquidity, and shareholder returns 4.5.1 Net Income and EBITDA Reconciliations Table 2 reconciles net income to net income excluding identified items, and to EBITDA, for Q2 and YTD 2025 and 2024, with footnotes explaining identified items Table 2 - Reconciliations of Net Income to Net Income Excluding Identified Items and to EBITDA (Millions of U.S. dollars): | Metric | Q2 2025 | Q1 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net income | $115 | $177 | $924 | $292 | $1,397 | | Net income excluding identified items | $202 | $110 | $724 | $312 | $1,157 | | EBITDA | $606 | $655 | $1,643 | $1,261 | $2,689 | | EBITDA excluding identified items | $715 | $576 | $1,330 | $1,291 | $2,293 | - Identified items include gain on sale of business, asset write-downs, Cash Improvement Plan costs, Dutch PO joint venture exit costs, European transaction costs, and loss (income) from discontinued operations[25][26][27][28][29] 4.5.2 Diluted EPS Reconciliations Table 3 reconciles diluted EPS to diluted EPS excluding identified items for Q2 and YTD 2025 and 2024 Table 3 - Reconciliation of Diluted EPS to Diluted EPS Excluding Identified Items: | Metric | Q2 2025 | Q1 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Diluted earnings per share | $0.34 | $0.54 | $2.82 | $0.88 | $4.25 | | Diluted earnings per share excluding identified items | $0.62 | $0.33 | $2.20 | $0.95 | $3.52 | 4.5.3 Cash, Liquid Investments, and Total Liquidity Table 4 details cash, liquid investments, and total liquidity as of June 30, 2025, showing $1.704 billion in cash and $6.354 billion in total liquidity Table 4 - Calculation of Cash and Liquid Investments and Total Liquidity (Millions of U.S. dollars, as of June 30, 2025): | Metric | Amount | | :--- | :--- | | Cash and cash equivalents and restricted cash | $1,704 | | Cash and liquid investments | $1,704 | | Availability under Senior Revolving Credit Facility | $3,750 | | Availability under U.S. Receivables Facility | $900 | | Total liquidity | $6,354 | 4.5.4 Dividends and Share Repurchases Table 5 breaks down the $536 million returned to shareholders in Q2 2025, comprising $445 million in dividends and $91 million in share repurchases Table 5 - Calculation of Dividends and Share Repurchases (Millions of U.S. dollars, Three Months Ended June 30, 2025): | Metric | Amount | | :--- | :--- | | Dividends paid - common stock | $445 | | Repurchase of Company ordinary shares | $91 | | Dividends and share repurchases | $536 |