Core Viewpoint - LyondellBasell has announced a reduction in its quarterly dividend to $0.69 per share, reflecting a $0.68 decrease from the previous quarter, as part of a strategy to better position the company during ongoing market challenges [1][2]. Group 1: Dividend Announcement - The board of directors declared a quarterly dividend of $0.69 per share, which is a reduction from the fourth quarter 2025 dividend [1] - The dividend payment is scheduled for March 9, 2026, with an ex-dividend and record date of March 2, 2026 [1]. Group 2: Financial Strategy and Market Position - In 2025, LyondellBasell returned approximately $2 billion to shareholders from existing cash and operations despite a prolonged industry downturn [2] - The company aims to prioritize safety and reliability in 2026 while implementing cost reductions and seeking new opportunities to enhance profitability [2] - LyondellBasell remains committed to returning 70% of free cash flow to shareholders throughout the business cycle [2]. Group 3: Company Overview - LyondellBasell is a leader in the global chemical industry, focusing on creating sustainable solutions and enabling a circular and low carbon economy [3] - The company is one of the largest producers of polymers and a leader in polyolefin technologies, developing high-quality products for various applications [3].

Core Viewpoint - The release contains forward-looking statements regarding LyondellBasell's future performance, which are based on management's reasonable assumptions but are subject to significant risks and uncertainties [1] Group 1: Market Conditions - The company acknowledges the impact of prolonged industry downturns and the cyclicality of the chemical and polymers industries on its performance [1] - Factors such as industry production capacities, operating rates, and global capacity rationalizations are critical to the company's outlook [1] Group 2: Financial Performance - The company emphasizes the importance of maintaining an investment-grade credit balance sheet and executing its capital allocation strategy, including the ability to pay dividends [1] - Management's ability to manage costs and generate anticipated earnings through initiatives identified in the Value Enhancement Program is highlighted [1] Group 3: Supply and Demand - The balance of supply and demand for the company's products and those of its joint ventures is a significant factor influencing future results [1] - The potential impacts of tariffs and trade disruptions on the company's operations are acknowledged [1] Group 4: Cash Flow Management - The company aims to reduce fixed costs, working capital, and capital expenditures while increasing cash flow [1]

Core Viewpoint - The article emphasizes the importance of generating alpha through independent investment strategies, focusing on a generalist approach across various sectors with potential for outperforming the S&P 500 [1] Group 1: Investment Strategy - The company manages a family portfolio primarily through a Self Managed Super Fund, aiming for a holding period that ranges from a few quarters to multiple years [1] - The investment approach includes building and maintaining spreadsheets that track historical financial data, key metrics, guidance trends, and performance indicators [1] - The company prefers not to build DCF models for long-term projections, instead focusing on assessing past performance and the outlook on five key drivers of DCF valuation: revenues, costs and margins, cash flow conversion, capex and investments, and interest rates [1] Group 2: Research Methodology - The company monitors relevant industry news, reports, and other analysts' coverage to stay informed about the stocks being researched [1] - In instances of CEO changes, the company conducts in-depth analysis of the new leader's background and past performance [1] - For companies with high trading multiples, a reverse DCF analysis is performed to understand the implied growth CAGR implications [1]

Core Viewpoint - The article emphasizes a fundamentals-first approach to investment analysis, highlighting the importance of uncovering mispriced assets that the market may overlook [1]. Group 1: Investment Philosophy - The company has managed investments since 1999, gaining insights through various market cycles [1]. - A background in Economics and ongoing CFA certification supports the analytical framework used to evaluate investments [1]. - The analysis conducted is intended for personal use, focusing on in-depth understanding rather than simple buy or sell recommendations [1]. Group 2: Market Environment - The current investment landscape is influenced by algorithm-driven strategies that often prioritize sentiment and technical factors over fundamental analysis [1].

Financial Data and Key Metrics Changes - In 2025, LyondellBasell generated $2.3 billion of cash from operations, reflecting strong working capital discipline and focused cost management [14][19] - Full-year earnings were $1.70 per diluted share, and EBITDA totaled $2.5 billion [14] - The company achieved a cash conversion ratio of 95%, well above the long-term target of 80% [20] Business Line Data and Key Metrics Changes - The Olefins and Polyolefins Americas segment reported Q4 EBITDA of $164 million, down from the prior quarter due to higher feedstock costs and lower polyethylene margins [24] - The Olefins and Polyolefins Europe, Asia, and International segment experienced a Q4 EBITDA loss of $61 million, impacted by lower demand and increased competition from low-cost imports [26] - The Intermediates and Derivatives segment achieved Q4 EBITDA of $205 million, supported by improved propylene glycol demand [28] - The Advanced Polymer Solutions segment reported Q4 EBITDA of $38 million, with a year-over-year increase of 55% in EBITDA [31] Market Data and Key Metrics Changes - Industry margins in 2025 were approximately 45% below historical averages, with North American polyolefins margins at their lowest levels in over a decade [12] - The company noted that global trade disruptions and low demand for durable goods were significant factors pressuring margins [12] Company Strategy and Development Direction - LyondellBasell is executing a three-pillar strategy focused on growing and upgrading the core, building a profitable circular and low-carbon solutions business, and stepping up performance and culture [9][10] - The company is on track to complete the divestment of four European assets by Q2 2026, which is part of its portfolio transformation efforts [9][27] - The Value Enhancement Program exceeded its target, achieving $1.1 billion of recurring annual EBITDA in 2025, with a goal of $1.5 billion by 2028 [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging market conditions in 2025 but expressed confidence in the company's ability to generate positive free cash flow and capture significant upside once margins normalize [12][13] - The company expects modest improvements in market conditions as it moves into 2026, with seasonal demand recovery anticipated in North America and Europe [33][34] Other Important Information - The company reduced its capital expenditure plans for circular solutions and prioritized markets with supportive regulations [11] - LyondellBasell returned $2 billion to shareholders through dividends and share repurchases during 2025 [20] Q&A Session Summary Question: Dividend strategy in light of market conditions - Management emphasized the importance of maintaining an investment-grade balance sheet and balancing cash returns to shareholders with growth investments, indicating that discussions on dividend recalibration are ongoing [40][42] Question: CapEx guidance for 2026 - Management clarified that the reduced CapEx guidance for 2026 is due to postponed turnarounds and a lighter maintenance schedule, with $800 million allocated for maintenance and $400 million for growth projects [44][46] Question: Outlook for the oxyfuels market - Management expects normalization in the oxyfuels market following a volatile 2025, with typical seasonal improvements anticipated [61][62] Question: Polypropylene market assessment - Management indicated that polypropylene is currently weaker than polyethylene due to its higher exposure to durable goods, but recovery is expected as consumer confidence improves [66][68] Question: US Gulf Coast polyethylene market - Management noted low industry inventories and anticipated price increases supported by upstream cost dynamics, indicating a positive outlook for contract pricing [74][77] Question: Anti-involution policies in China - Management reported ongoing discussions regarding anti-involution policies in China, with expectations for potential announcements in the near future [80]

Financial Data and Key Metrics Changes - In 2025, LyondellBasell generated $2.3 billion of cash from operations, reflecting strong working capital discipline and focused cost management [14][19] - Full-year earnings were $1.70 per diluted share, and EBITDA totaled $2.5 billion [14] - The company achieved a cash conversion ratio of 95%, well above the long-term target of 80% [20] Business Line Data and Key Metrics Changes - The Olefins and Polyolefins Americas segment reported fourth quarter EBITDA of $164 million, down from the prior quarter due to higher feedstock costs and lower polyethylene margins [24] - The Olefins and Polyolefins Europe, Asia, and International segment experienced a fourth quarter EBITDA loss of $61 million, impacted by lower demand and increased competition from low-cost imports [26] - The Intermediates and Derivatives segment achieved fourth quarter EBITDA of $205 million, supported by improved propylene glycol demand [29] - The Advanced Polymer Solutions segment delivered fourth quarter EBITDA of $38 million, reflecting a 55% year-over-year increase due to operational improvements [32] Market Data and Key Metrics Changes - Industry margins in 2025 were approximately 45% below historical averages, with North American polyolefins margins at their lowest levels in over a decade [12] - The company noted that global trade disruptions and low demand for durable goods were significant factors pressuring margins [12] - In Europe, polyolefin markets faced soft demand driven by increased competition and ongoing destocking [26] Company Strategy and Development Direction - LyondellBasell is executing a three-pillar strategy focused on growing and upgrading the core, building a profitable circular and low-carbon solutions business, and stepping up performance and culture [9][10] - The company is advancing its portfolio transformation with the divestment of four European assets, expected to complete in Q2 2026 [9][28] - The Value Enhancement Program exceeded its original target, achieving $1.1 billion of recurring annual EBITDA in 2025, with a goal of $1.5 billion by 2028 [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging market conditions in 2025 but expressed confidence in the company's ability to generate positive free cash flow and capture significant upside once margins normalize [12][13] - The company plans to maintain strong capital discipline and focus on safe and reliable operations while pursuing selective investments in high-value growth [15][19] - Management expects modest improvements in market conditions as they move through 2026, with a focus on execution and cost discipline [35][36] Other Important Information - The company reduced its global workforce by 7%, or approximately 1,350 employees, to the lowest levels since 2018 [16] - LyondellBasell ended 2025 with $3.4 billion of cash and short-term investments, and $8.1 billion of available liquidity [19] Q&A Session Summary Question: Regarding dividend strategy and growth investments - Management highlighted the importance of maintaining an investment-grade balance sheet while balancing cash returns to shareholders and growth investments, with ongoing discussions on capital allocation strategy [39][43] Question: Clarification on CapEx guidance for 2026 - Management confirmed a CapEx guidance of approximately $1.2 billion for 2026, with $800 million allocated for maintenance and $400 million for growth projects, reflecting a light year in terms of turnarounds [46][49] Question: Outlook on the oxyfuels market for 2026 - Management expects the oxyfuels market to normalize following a volatile 2025, with typical seasonal improvements anticipated [62] Question: Assessment of the polypropylene market - Management indicated that polypropylene is currently weaker than polyethylene due to higher exposure to durable goods, with expectations for recovery dependent on consumer confidence [66][70] Question: Update on the US Gulf Coast polyethylene market - Management noted low industry inventories and anticipated price increases supported by robust demand, with expectations for improved integrated margins [78][80] Question: Insights on China's anti-involution policies - Management mentioned ongoing discussions regarding China's policies, with expectations for potential announcements in the near future [81]

Financial Data and Key Metrics Changes - In 2025, the company generated $2.3 billion in cash from operations, reflecting strong working capital discipline and a cash conversion ratio of 95% [12][19] - Full-year earnings were reported at $1.70 per diluted share, with EBITDA totaling $2.5 billion [12][13] - The Value Enhancement Program exceeded its target, achieving $1.1 billion of recurring annual EBITDA in 2025, with a new target of $1.5 billion by 2028 [9] Business Line Data and Key Metrics Changes - The Olefins and Polyolefins Americas segment reported fourth quarter EBITDA of $164 million, down from the prior quarter due to higher feedstock costs and lower polyethylene margins [24] - The Olefins and Polyolefins Europe, Asia, and International segment experienced a loss of $61 million in fourth quarter EBITDA, impacted by lower prices and maintenance [26] - The Intermediates and Derivatives segment achieved fourth quarter EBITDA of $205 million, benefiting from improved propylene glycol demand [28] - The Advanced Polymer Solutions segment reported fourth quarter EBITDA of $38 million, with a year-over-year increase of 55% [31] Market Data and Key Metrics Changes - Industry margins in 2025 were approximately 45% below historical averages, with North American polyolefins margins at their lowest levels in over a decade [11] - The company noted that global trade disruptions and low demand for durable goods were significant factors pressuring margins [11] - In Europe, increased competition from imports and higher energy costs continued to affect profitability [11] Company Strategy and Development Direction - The company is focused on a three-pillar strategy: growing and upgrading the core, building a profitable circular and low-carbon solutions business, and stepping up performance and culture [6][8] - The divestment of four European assets is on track for completion in the second quarter of 2026, aimed at strengthening the company's cost advantage [7][26] - The company is prioritizing investments in projects with immediate returns while reviewing the timing of achieving certain sustainability goals [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging market conditions in 2025 but expressed confidence in the company's ability to generate positive cash flow and capture significant upside once margins normalize [11][12] - The company expects modest improvements in market conditions as it moves into 2026, with a focus on execution, cost discipline, and value-driven growth [34][35] - Management highlighted the importance of maintaining an investment-grade balance sheet and the ongoing evaluation of capital allocation strategies [40] Other Important Information - The company reduced its capital expenditure plans for 2026 to approximately $1.2 billion, with $800 million allocated for maintenance and $400 million for growth projects [22][46] - The company returned $2 billion to shareholders through dividends and share repurchases during 2025 [19] Q&A Session Summary Question: Dividend strategy in light of growth opportunities - Management emphasized the importance of maintaining an investment-grade balance sheet while balancing cash returns to shareholders and growth investments [40] Question: CapEx guidance for 2026 - Management clarified that the reduced CapEx is due to postponed turnarounds and disciplined management of maintenance CapEx, with expectations for $800 million in maintenance [46][48] Question: Outlook for the Houston refinery - Management reiterated plans to transform the refinery and remain open to monetizing the asset if market conditions change [51] Question: Working capital management in 2026 - Management acknowledged the need to rebuild some working capital in 2026 but indicated that this has been factored into the cash improvement plan [56][57] Question: Oxyfuels market outlook for 2026 - Management expects normalization in the oxyfuels market following a volatile 2025, with seasonal improvements anticipated [61] Question: Polypropylene market assessment - Management indicated that polypropylene is currently weaker than polyethylene due to its dependence on durable goods demand, but recovery is expected as consumer confidence improves [66][68]

Fourth Quarter 2025 Earnings January 30, 2026 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 presentation, the words "believe," "could," "intend," "may," "should," "will," "expect," and similar express ...

Core Insights - LyondellBasell Industries N.V. (LYB) reported a fourth-quarter 2025 loss of $140 million or 45 cents per share, an improvement from a loss of $603 million or $1.87 per share in the same quarter last year [1] - The adjusted loss was 26 cents per share, down from earnings of 77 cents in the prior year, missing the Zacks Consensus Estimate of 18 cents [1] Financial Performance - Net sales for the quarter were $7,091 million, exceeding the Zacks Consensus Estimate of $6,984.4 million, but down approximately 9.2% from $7,808 million in the prior-year quarter [2] - The company generated $2.3 billion in cash from operating activities in 2025, with $450 million spent on capital expenditures in the fourth quarter and $1.9 billion for the year [6] - LyondellBasell distributed $2 billion to shareholders through dividends and share buybacks in 2025, ending the quarter with $3.45 billion in cash and cash equivalents and $8.1 billion in total available liquidity [6] Segment Performance - The Olefins & Polyolefins — Americas segment saw revenues decline by about 15.1% year over year to $2,337 million, missing the consensus estimate of $2,536 million [3] - The Olefins & Polyolefins — Europe, Asia, and international segment revenues fell 5.5% year over year to $2,336 million, also missing the consensus estimate of $2,378 million [4] - The Intermediates and Derivatives segment reported sales of $2,153 million, a decline of roughly 9% year over year, missing the consensus estimate of $2,203 million [4] - Advanced Polymer Solutions revenues were $777 million, down around 6% year over year, missing the consensus estimate of $837 million [4] - The Technology segment's revenues increased by approximately 2% to $177 million, surpassing the consensus estimate of $137 million [5] Outlook - The company is managing feedstock and energy price volatility, with expectations for polyethylene price increases in North America due to tight inventories and seasonal demand recovery in Europe [7] - LyondellBasell plans to align operating rates with global demand, targeting 85% utilization in Olefins & Polyolefins Americas, 75% in Olefins & Polyolefins EAI, and 85% in Intermediates & Derivatives [8] - The Cash Improvement Plan target has been raised from $1.1 billion to $1.3 billion by the end of 2026 [10] Stock Performance - LyondellBasell's shares have declined by 34% over the past year, compared to a 21.7% decline in the Zacks Chemicals Diversified industry [11]

At Cash Flow Club , we focus on businesses with strong cash generation, ideally with a wide moat and significant durability. When these companies are bought at the right time, that can be highly rewarding for us. If you are interested in joining our community, start right here !LyondellBasell Industries N.V. ( LYB ) reported its most recent quarterly earnings results on Friday morning. The company generated net losses during the period, but operating cash generation held up better. LyondellBasell's high 11% ...