Financial Data and Key Metrics Changes - In Q3 2025, Braskem recorded consolidated recurring EBITDA of $150 million, which is 104% higher than in Q2 2025 [5][13] - The company's cash position at the end of the quarter was approximately $1.3 billion, sufficient to cover debt maturities over the next 27 months [6][18] - Corporate leverage stood at approximately 14.7 times at the end of Q3 2025, mainly due to lower EBITDA over the last 12 months [18] Business Line Data and Key Metrics Changes - In Brazil, recurring EBITDA was $205 million, a 35% increase from the previous quarter, driven by prioritization of higher value-added sales [7][8] - The utilization rate of the Green Ethylene Plant was 40%, down 31 percentage points from the previous quarter due to lower demand from Asian markets [8] - The Mexico segment had a recurring EBITDA of negative $37 million, impacted by higher idle expenses and lower provisions for fine receivable [11] Market Data and Key Metrics Changes - Utilization rates at petrochemical plants in Brazil were lower due to maintenance stoppages and production optimization strategies [4][6] - Resin sales in the Brazilian market decreased due to higher polyethylene imports and lower polypropylene demand [7] - The global macroeconomic scenario was marked by moderate growth, accelerated inflation, and high interest rates, impacting industrial activity in resin processing [6] Company Strategy and Development Direction - Braskem's resilience program aims to implement tactical initiatives to generate sustainable value, focusing on maximizing EBITDA and mitigating cash consumption [19][20] - The company is pursuing a transformation program structured around optimizing naphtha base, increasing gas base flexibility, and migrating to renewable products [19][24] - The Transform Rio project was approved to expand the Rio de Janeiro plant's capacity, expected to add 220,000 tons per year of ethylene capacity [25][27] Management's Comments on Operating Environment and Future Outlook - Management highlighted that the petrochemical industry is facing a prolonged downturn, with expectations of a challenging environment until at least 2030 [32][38] - The company anticipates a significant gap between supply and demand in the petrochemical industry, driven by expansions in China and the Middle East [38] - Despite negative outlooks, Braskem continues to advance its resilience project to enhance global competitiveness [39] Other Important Information - Braskem signed an agreement related to the Alagoas geological event, providing for a total payment of BRL 1.2 billion, with around BRL 139 million already paid [15][53] - The company has established 79 action plans globally, with potential for capturing around $400 million in EBITDA and $500 million in cash generation for 2025 [20][22] Q&A Session Summary Question: When will a decision on the restructuring be made? - The company is currently completing a diagnostic with external advisors, and no options are confirmed or discarded at this moment [44] Question: What was the main economic driver for weak resin volumes this quarter? - The demand for resins is strongly associated with Brazilian GDP, and a drop of about 4% is expected for the next months, with a recovery of about 3% for the following year [45] Question: What is the timeline and expected impact of the Transform Rio project? - The project will begin its engineering phase now and is expected to be completed by the end of 2028, potentially adding just under $200 million per year to EBITDA [47][48] Question: What is the status of the PRESIC bill? - The bill has been approved by the Chamber of Deputies and is awaiting urgent evaluation in the Senate, with hopes for approval by the end of 2025 [51] Question: Can you provide details about the Alagoas agreement? - The agreement involves a total payment of BRL 1.2 billion over a 10-year period, with initial installments respecting the company's projected financial condition [53]

Core Insights - LyondellBasell Industries N.V. reported strong third-quarter results, achieving a cash conversion rate of 135% and is on track to meet its $600 million cash improvement target by year-end [1][22]. - The company anticipates an increase in cash flow of at least $1.1 billion by the end of 2026, driven by ongoing operational improvements and strategic initiatives [1][20]. Financial Performance - Earnings per share for the third quarter were $1.01, with EBITDA reported at $835 million and cash from operating activities at $983 million [5][22]. - The company returned $443 million to shareholders through dividends during the quarter [5][22]. - Year-to-date cash generation improved significantly, with a total of $2.7 billion generated from operating activities over the past year [22]. Market Trends - Polyethylene (PE) demand is showing signs of recovery, with North American demand up 2.5% year-to-date compared to 2024, and European volumes up approximately 3% year-on-year [6][10]. - The global polyethylene market has consistently grown at a rate of over 3% for the past 35 years, driven by factors such as population growth and urbanization [9][10]. - Emerging markets, particularly in India and Africa, present significant long-term growth opportunities for polyethylene consumption [11]. Supply Dynamics - The global ethylene supply landscape is undergoing significant changes, with over 21 million tons of ethylene capacity expected to be closed or idled by 2028, representing about 10% of global supply [12][14]. - Capacity rationalization is particularly pronounced in Asia, with South Korea and Japan announcing substantial closures [12][13]. - The company is strategically positioned to benefit from these supply-side changes, focusing on cost-advantaged regions and enhancing operational efficiency [14]. Segment Performance - The Olefins and Polyolefins Americas segment reported EBITDA of $428 million, a 35% increase quarter-on-quarter, supported by improved demand and operational efficiency [26]. - The Advanced Polymer Solutions segment achieved EBITDA of $47 million, demonstrating resilience despite challenges in the automotive market [37]. - The Intermediates and Derivatives segment saw a sequential increase in EBITDA to $33 million, driven by improved margins in oxyfuels [33]. Strategic Initiatives - The company is committed to a disciplined capital allocation strategy, reducing 2026 capital expenditures to $1.2 billion while focusing on safe and reliable operations [18][19]. - Progress on the cash improvement plan is on track, with $150 million in fixed cost reductions achieved year-to-date [20][21]. - The construction of the Moertek One chemical recycling facility in Germany is ongoing, with major equipment deliveries underway [31].

Financial Performance - The company reported a net loss of $890 million, but a net income excluding identified items of $330 million[9] - Cash from operating activities was $983 million, with dividends of $443 million[9] - Non-cash asset write-downs totaled approximately $1.2 billion[10] - The company returned $443 million in dividends during 3Q25[26] Market Trends and Outlook - Mature markets are showing signs of recovery, with polyethylene demand in Europe up 3% year-to-date[13] - Capacity rationalization trends are accelerating, with expected ethylene capacity closures[19] - Announced and anticipated shutdowns represent approximately 10% of current global supply[22] - The company is targeting approximately 80% operating rates in 4Q25 for Olefins & Polyolefins – Americas[44] - The company is targeting approximately 60% operating rates in 4Q25 for Olefins & Polyolefins – Europe, Asia & International[47] - The company is targeting approximately 75% operating rates in 4Q25 for Intermediates & Derivatives[53] Cash Improvement Plan - The Cash Improvement Plan is on track to deliver the $600 million target of incremental cash flow during 2025[27]

Core Insights - LyondellBasell Industries N.V. (LYB) reported a loss of $890 million or $2.77 per share, contrasting with a profit of $573 million or $1.75 per share from the previous year [1] - Adjusted earnings were $1.01 per share, down from $1.91 year-over-year, but exceeded the Zacks Consensus Estimate of 80 cents [1][8] - Net sales for the quarter were $7,727 million, surpassing the Zacks Consensus Estimate of $7,493.9 million, but down approximately 10% from $8,604 million in the prior-year quarter [2] Segment Performance - The Olefins & Polyolefins — Americas segment saw revenues decline around 13% year-over-year to $2,606 million, beating the consensus estimate of $2,531 million [3] - Olefins & Polyolefins — Europe, Asia, and international segment revenues fell 8% year-over-year to $2,587 million, exceeding the consensus estimate of $2,293 million [3] - In the Intermediates and Derivatives segment, sales were $2,343 million, down roughly 13% year-over-year, but beating the consensus estimate of $2,325 million [4] - Advanced Polymer Solutions revenues were $870 million, a decline of around 3% year-over-year, missing the consensus estimate of $891 million [4] - The Technology segment's revenues were $115 million, marking a decline of roughly 21%, lagging behind the consensus estimate of $137 million [4] Financial Overview - LyondellBasell generated $983 million in cash from operating activities during the quarter [5] - The company spent $406 million on capital expenditures and returned $443 million to shareholders through dividends and share buybacks [5] - At the end of the quarter, LYB had $1.8 billion in cash and cash equivalents, along with $6.5 billion in total available liquidity [5] Future Outlook - For the fourth quarter, LyondellBasell anticipates reduced operating rates and seasonal impacts to affect results across most businesses [6] - Increased natural gas and feedstock costs are expected to pressure integrated polyolefins margins in North America, with soft industrial and consumer demand persisting in Europe [6] - The company is on track with its Cash Improvement Plan, targeting $600 million by 2025 and at least $1.1 billion by the end of next year [7] Stock Performance - LyondellBasell shares have declined by 47.8% over the past year, compared to a 27.4% decline in the Zacks Chemicals Diversified industry [9]

Core Insights - Polyethylene, polypropylene, and ammonia are expected to dominate global petrochemical project starts by 2030 due to strong economic growth and rising demand from various sectors such as packaging, automotive, medical, construction, and agriculture, particularly in China, India, and Iran [1] Polyethylene - A total of 127 polyethylene projects are anticipated to commence between 2025 and 2030, with most being new builds and a few expansions [2] - China is projected to lead globally, accounting for one-third of the upcoming polyethylene projects, all of which will be new builds and primarily under construction [2] - Iran and Russia are expected to follow with 20 and 17 projects respectively [2] Polypropylene - There are 121 polypropylene projects expected to start operations by 2030, with 118 being new builds and the remainder expansions of existing projects [4] - China will again lead, accounting for over 40% of these projects, with 35 currently under construction likely to commence operations by 2030 [4] Ammonia - Ammonia ranks next with 83 new build and nine expansion projects expected to begin operations by 2030 [5] - The US leads in project starts with 16 projects, followed by Australia and China, each with eight [5] - Currently, the US has three projects under construction, China has four, and Australia has one [5] Additional Information - Further details on petrochemical projects expected to come online from 2025 to 2030 can be found in GlobalData's report titled "Petrochemicals New-Build and Expansion Projects Outlook by Key Commodities, Region and Development Stage to 2030" [5]

Financial Data and Key Metrics Changes - In Q3, the company reported net sales of $10 billion, with EBITDA at $868 million, reflecting a sequential improvement despite being lower than the same period last year [5][6][7] - Cash provided by operating activities increased by $1.6 billion sequentially, driven by working capital improvements and advanced payments for low-carbon solutions [7][16] Business Line Data and Key Metrics Changes - The packaging and specialty plastics segment saw net sales decline year-over-year and sequentially, with operating EBIT at $199 million, primarily due to lower integrated margins [11][12] - The industrial intermediates and infrastructure segment experienced a 4% year-over-year decline in net sales but saw a sequential increase due to volume gains and lower planned maintenance activity [12][13] - Performance materials and coatings segment net sales were $2.1 billion, down 6% year-over-year and 2% sequentially, with operating EBIT decreasing due to upstream margin compression [14] Market Data and Key Metrics Changes - Global demand in the packaging market remains steady, with North America experiencing record domestic and export volumes, while Europe contracted [18][19] - The infrastructure sector faces soft market conditions across the U.S., Europe, and China, with mortgage rates in the U.S. remaining above 6% [18][19] Company Strategy and Development Direction - The company is focused on restoring core earnings and positioning for profitable growth, with over $6.5 billion in strategic actions and cash support planned [32][33] - The company is committed to being a low-cost producer, with over 75% of its global cracking capacity in a top-quartile cost position, expected to increase to approximately 80% [29][30] Management's Comments on Operating Environment and Future Outlook - Management noted a cautious operating environment with subdued business investment and consumer spending due to economic uncertainty, but anticipates potential positive influences from recent monetary policy shifts [18][21] - For Q4, the company expects EBITDA to be approximately $725 million, with anticipated headwinds from higher feedstock costs and normal seasonality impacting performance [21][22] Other Important Information - The company has completed significant strategic actions, including a $3 billion partnership for U.S. Gulf Coast infrastructure assets and a $1.4 billion bond issuance for financial flexibility [8][16] - The company is on track to deliver approximately $400 million in targeted cost savings this year, contributing to improved performance [9][10] Q&A Session Summary Question: Reconciliation of Q3 results - Management highlighted higher integrated margins and better-than-expected volume as key factors for exceeding expectations in Q3 [37][39] Question: Rationalization and project cancellations - Management provided insights on global capacity rationalization, particularly in ethylene supply, and noted potential delays in announced capacity in China due to market conditions [44][46] Question: Polyethylene demand - Polyethylene demand has remained stable, with strong performance in packaging and personal care segments, and expectations for continued stability [62][63] Question: Demand function and order books - October order books appear positive, with management maintaining a balanced outlook for Q4 sales and EBITDA guidance [73][75]

3Q 2025 Results October 23, 2025 Agenda ▪ 3Q25 Highlights ▪ Operating Segment Performance ▪ Actions to Provide Greater Financial Flexibility and Improved Profitability ▪ Outlook ▪ Industry Opportunities Non-GAAP measures are defined in the appendix 3Q 2025 Highlights Delivered Solid Results, Cost Savings Actions, and Near-Term Cash Support 3 $10.0B Net Sales $868MM Operating EBITDA $249MM Returned to Shareholders ▪ Operating EBITDA was $868MM, up $165MM QoQ ▪ Total CapEx for the quarter was $564MM ▪ Cash Fl ...

Summary of Global Chemicals Conference Call Industry Overview - The global chemicals cycle is weakening beyond prior expectations, with caution heightened by the Braskem situation, indicating a need for additional due diligence and/or a higher risk premium [1][3] - The European chemical sector is losing competitiveness due to high energy costs, strict carbon policies, and persistent overcapacity, leading to plant closures and asset sales [3][16] - China's aggressive capacity expansion has created a global oversupply in chemicals, particularly in TiO2, PVC, ethylene, and polyethylene, driving down prices [6][8] Key Points European Chemical Sector - BASF's proactive restructuring and noncore asset sales are helping maintain its low-A ratings despite weak upstream margins [3] - Ineos Group Holdings and Ineos Quattro are experiencing rating downgrades due to operational weaknesses and inflated leverage [3] - The European chemical industry has seen output decline by over 50% since 2003, with natural gas prices in Europe being 3-4 times higher than in the US [16][22] - The EU's REACH regulation and the EU Emissions Trading System (EU ETS) are increasing compliance costs for European firms, further eroding competitiveness [21][22] Chinese Market Dynamics - China's share of global chemical capacity has surged from around 15% to nearly 50% over two decades, leading to a persistent supply-demand imbalance [8] - CMA projects that China will add significant ethylene capacity, exceeding current total capacity in Europe, exacerbating global oversupply [9][36] Demand Challenges - The automotive and construction sectors, critical end markets for chemical producers, are experiencing prolonged softness, negatively impacting chemical demand [12] - In the US, existing home sales have slowed significantly, and the European construction sector has contracted due to high interest rates and labor shortages [12] Braskem Case Study - Braskem's credit deterioration highlights risks in oversupplied chains and reliance on high-cost naphtha feedstock, with net leverage exceeding 10x [52][53] - The company has faced rapid downgrades, reflecting how quickly credit can deteriorate in a prolonged industry downturn [54][55] Latin American Chemical Credits - Latin American chemical credits face heightened risks from oversupply and weak spreads, with downgrades likely if earnings disappoint [6][59] - Orbia and Alpek have been downgraded to Market Weight, while Braskem remains Underweight due to deteriorating PVC fundamentals [69][71] North American Chemical Producers - US investment-grade chemical producers like DOW and LYB are seeing EBITDA collapse, with estimates for 2025 now 50% lower than a year prior [72][73] - The US high-yield chemical index has widened, underperforming the broader high-yield index due to exposure to chains affected by Chinese capacity issues [76] Trade Recommendations - Buy BASF 4.25% 2032s and sell Orbia 2030s due to heightened fallen angel risk [8][62] - Switch into SGLSJ 2029s from SASOL 2028s as part of a strategy to optimize exposure [8] Conclusion - The global chemicals sector is facing significant challenges from oversupply, weak demand, and regulatory pressures, particularly in Europe and North America. The situation is exacerbated by China's aggressive capacity expansion and the ongoing credit deterioration of key players like Braskem. Investors are advised to exercise caution and consider strategic trades to mitigate risks.

Core Thesis - LyondellBasell Industries N.V. (LYB) is viewed positively due to its low-cost operations, strong dividend yield, and potential for earnings recovery, despite current market pricing reflecting prolonged depressed earnings [2][5]. Financial Performance - As of September 3rd, LYB's share price was $54.19, with trailing and forward P/E ratios of 115.30 and 11.40, respectively [1]. - The company generates approximately 40% of its revenue from Olefins & Polyolefins (O&P) in the Americas, benefiting from low-cost ethane sourced from shale gas [3]. - The valuation metrics indicate LYB is trading at 4.5x EV/EBITDA and 0.4x sales, suggesting significant upside potential [5]. Market Position and Strategy - LYB is one of the top three global producers of polyethylene and polypropylene, leveraging its cost advantages in North America [2]. - The company has maintained polyolefins utilization at around 80% to preserve margins amid global polyethylene oversupply [4]. - A potential sale of European assets could unlock $1 billion for share buybacks, enhancing shareholder value [5]. Future Outlook - Historical trends suggest that spreads and utilization rates will revert to the mean, indicating a recovery in earnings by 2026-27 [4]. - In a bullish scenario, shares could reach $117 (+150% with dividends), while the base case suggests a price of $84 (+83%) [5]. - Even in a bear case, the downside is limited to $39 if dividends are maintained, making it an attractive accumulation opportunity [5].

Core Viewpoint - Three major Japanese petrochemical companies, Mitsui Chemicals, Idemitsu Kosan, and Sumitomo Chemical, are merging their domestic plastics production operations to enhance competitiveness amid oversupply and competition from Chinese manufacturers [1][2]. Group 1: Merger Details - The companies have signed a memorandum of understanding (MoU) to merge their polyolefins operations, aiming to share costs and develop synergies in R&D, production, sales, and distribution [2]. - The merger will integrate Mitsui and Idemitsu's Prime Polymer Company joint venture with Sumitomo Chemical's polypropylene and linear low-density polyethylene (LLDPE) business, expected to be completed by April 2026 [3]. - The merger is projected to yield annual cost savings of approximately JPY 8 billion [3]. Group 2: Market Context - The decision to merge comes in response to a shrinking domestic market due to population decline and lifestyle changes, alongside oversupply from Chinese producers [4]. - Japan's Ministry of Economy, Trade and Industry estimates the country's total polyolefin production capacity at 5.8 million tons [4]. Group 3: Company Statements - Mitsui Chemicals president, Osamu Hashimoto, emphasized the necessity of strengthening the business base through collaboration with other companies [5].