Financial Data and Key Metrics Changes - The company is targeting a reduction in capital spending for 2026, indicating a focus on cost savings in 2025 as well [6][14] - There is an expected mid-single-digit drop in demand for the second half of the year, influenced by trade dynamics and seasonality [12][15] - The company anticipates a utilization headwind of approximately $75 million to $100 million in the second half of the year due to inventory reduction efforts [13][16] Business Line Data and Key Metrics Changes - The Chemical Intermediates segment is expected to improve by over $30 million, while the Specialty and Fibers segments are projected to decline by a similar amount [70] - The AFP business saw a 4% year-over-year price increase primarily driven by cost pass-through contracts [54] - The Fibers business is facing a $20 million headwind due to tariffs and a $20 million asset utilization headwind, alongside higher energy costs [95][96] Market Data and Key Metrics Changes - The automotive market is expected to see a low single-digit decline in the back half of the year, with challenges stemming from tariff impacts and consumer behavior [50][51] - The textile market has slowed down significantly due to tariffs, impacting demand and leading to a cautious approach from customers [57][58] - The company is experiencing accelerated demand in certain areas, particularly in mechanical recycling for food-grade packaging applications [35] Company Strategy and Development Direction - The company is focusing on cash generation and cost management in response to current market uncertainties [13][16] - There is an emphasis on improving the structural strength of the business, particularly in the chemical and materials segments [21][22] - The company is exploring debottlenecking investments to enhance operational efficiency and profitability in its methanol system plant [30][31] Management's Comments on Operating Environment and Future Outlook - Management highlighted the chaotic nature of the current operating environment, driven by trade dynamics and consumer caution [12][14] - There is a belief that stability may return in 2026, contingent on resolving trade issues and improving economic conditions [15][16] - The management remains cautious about predicting demand due to ongoing uncertainties in the market [40][81] Other Important Information - The company is targeting additional cost cuts of $75 million to $100 million, which will be detailed in plans for the second half of the year [103] - The methanol system plant is performing well, with expectations for increased profitability as operational efficiencies are realized [30][31] Q&A Session Summary Question: Can you help us understand how representative the second half should be when thinking about trough earnings levels? - Management indicated that the second half is heavily impacted by trade situations, making it a poor measure of overall company performance [7][10] Question: How far along is the investment in the Metapasys unit, and what gives confidence in profitability? - Management discussed ongoing challenges in the chemical and materials business but expressed optimism about improving profitability through strategic investments [20][24] Question: What triggered the change in customer dialogue in July? - Management noted that the trade pause allowed customers to reassess their inventory and demand, leading to a more cautious approach [41][42] Question: Can you provide more color on the weakness in the automotive end markets? - Management confirmed that while the aftermarket performed well, the interlayer business faced challenges due to production moderation in response to tariffs [49] Question: What is the outlook for the Fibers business next year? - Management indicated that the Fibers business is facing headwinds this year but expects stabilization and potential recovery in the following year [94][100]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q1 2025 improved to $65 million, up $20 million year-over-year, driven by restructuring actions, improved business mix, and a polycarbonate licensing agreement [6][12][18] - Free cash flow was negative $119 million in Q1, with expectations for breakeven in Q2 and positive cash flow in the second half of 2025 [12][13][18] Business Line Data and Key Metrics Changes - Volume in recycled content products grew by 33% year-over-year, and consumer electronics applications saw a 43% increase [8][9] - PMMA resin volumes in Asia more than doubled, while case volumes grew by 3% in a flat demand environment [8] - Latex Binders adjusted EBITDA remained similar to the prior year despite lower volumes, primarily due to improved sales mix and cost savings initiatives [11] - Polymer Solutions adjusted EBITDA was above the prior year, aided by $26 million in polycarbonate licensing income, despite a 15% decline in segment volumes [12] Market Data and Key Metrics Changes - In China, specialized products delivered 50% volume growth year-over-year, driven by sustainable solutions for consumer electronics [9] - The North American benzene price drop impacted Amsty's performance, leading to a $10 million negative impact in Q1 due to timing issues and low volumes [29][30] Company Strategy and Development Direction - The company is focused on geographic expansion, material replacement, process change, and sustainability to drive growth in specialized technologies [7][18] - The strategic partnership with Deepak Chemtech is viewed as mutually beneficial, with projects on track to deliver expected results [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating uncertain business conditions and highlighted the positive impact of restructuring actions [18][19] - The company withdrew its full-year guidance due to increased economic and geopolitical uncertainty, providing only Q2 adjusted EBITDA guidance of $55 million to $70 million [17][18] Other Important Information - Over 95% of product sales are produced within the region they are sold, minimizing direct tariff impacts [14] - The company is exploring additional licensing deals related to recycling technologies, indicating potential future growth avenues [40] Q&A Session Summary Question: Volume patterns and sustainability - Management noted no pre-buying ahead of tariffs and indicated that Q1 demand has continued into Q2 [22] Question: Free cash flow guidance for Q2 - Management expressed confidence in achieving breakeven free cash flow, citing working capital management and collected licensing income [23][24] Question: Impact of styrene closures - Management stated no significant negative impact on business due to styrene closures, as they are no longer a styrene producer in Europe [25] Question: Amsty performance and sale process - Management confirmed ongoing commitment to market Amsty and maximize asset value, with expectations for improved performance in Q2 [28][31] Question: Battery binders opportunity - Management highlighted investments in anode binders for lithium-ion batteries, indicating growth potential in both grid storage and automotive applications [32][35] Question: Full-year cash flow outlook - Management provided insights on cash outflows and the need for $370 million EBITDA to achieve breakeven cash flow for the year [38] Question: Future licensing opportunities - Management acknowledged interest in recycling technologies and potential for future licensing deals [40]