LyondellBasell Industries

Hello and welcome to the Lyondell-Bissell teleconference. At the request of Lyondell-Bissell, this conference is being recorded for instant replay purposes. Following today's presentation, we will conduct a question and answer session. I would now like to turn the conference over to Mr. David Kinney, Head of Investor Relations. Sir, you may begin.

Thank you, Operator, and welcome everyone to today's call. Before we begin the discussion, I would like to point out that a slide presentation accompanies the call, and is available on our website at www.lyondellpassell.com slash investor relations. Today, we will be discussing our business results while making reference to some forward-looking statements and non-GAAP financial measures. We believe the forward-looking statements are based upon reasonable assumptions and the alternative measures are useful to investors. Nonetheless, the forward-looking statements are subject to significant risk and uncertainty. We encourage you to learn more about the factors that can lead our actual results to differ by reviewing the cautionary statements in the presentation slides and our regulatory filings, which are also available on our investor relations website. Comments made on this call will be in regard to our underlying business results using non-GAAP financial measures, such as EBITDA and earnings per share, excluding identified items. Additional documents on our investor website provide reconciliations of non-GAAP financial measures to GAAP financial measures. together with other disclosures, including the earnings release and our business results discussion. Joining today's call will be Peter Maneker, LineVal Pacelle's Chief Executive Officer, our CFO, Michael McMurray, Kim Foley, our Executive Vice President of Global Olefins and Polyolefins and Refining, Erin Lede, our EVP of Intermediates and Derivatives, and Torkel Remen, our EVP of Advanced Polymer Solutions. During today's call, we will focus on third quarter results, as well as updates on our long-term strategy. We will also discuss current market dynamics and our near-term outlook. With that being said, I would now like to turn the call over to Peter.

Thank you, Dave, and welcome to all of you. We appreciate you joining us today as we discuss our third quarter results. And yet again, our people did an excellent job navigating challenging market conditions while remaining laser focused on the execution of our strategy. Our low-cost footprints in the Americas and the Middle East continue to perform well to capture profitable growth in olefins, polyolefins, propylene oxide, and oxyfuels. Let's begin with slide three and discuss our continued leadership in safety performance. LYB's success in operational performance starts with a core focus on safety. Our goal zero commitment is to operate safely with zero injuries, zero incidents, and zero accidents. Our focus is demonstrated by LOIB's September year-to-date total recordable incident rate of 0.13. We are very proud of the continuous commitment to safety from our people. Our company is exceeding the safety performance of the top quartile peers in our sector. Please turn to slide four. as we briefly review the financials for the quarter. Our third quarter results demonstrate our ability to generate value despite very challenging market conditions. A sharp decline in gasoline crack spreads drove sequentially lower quarterly results for refining anoxy fuels, but we were able to run our newest POTBA asset at nameplate capacity. Strong ethylene margins and outstanding cracker utilization allowed our olefins and polyolefins America segments to post a 13% sequential EBITDA improvements, the strongest quarter for the segment since the second quarter of 2022. As a result, earnings were $1.88 per share with EBITDA of $1.2 billion. LYB generated $670 million in cash from operating activities, maintaining strong cash conversion on a weaker profit base. Our return on invested capital remains above our cost of capital, and our cash conversion remains robust. We continue to advance our long-term strategy with good progress during the quarter. On slide five, we highlight one of these milestones. In September, we started construction of our MORETEC-1 facility in Wesseling, Germany, our first commercial scale plant utilizing Lionel Basel's proprietary catalytic advanced recycling technology. The investment is a clear indication of our commitment to European brand owners and OEMs. German Chancellor Olaf Scholz and other top officials attended the event to demonstrate solid governmental support. The innovative nature of our proprietary technology has been underlined by the fact that the EU Innovation Fund awarded Moritech One a 40 million Euro grant. Moritech One is expected to start up in 2026 with capacity to produce 50,000 metric tons per year of cracker feedstocks recycled from hard to recycle mixed plastic waste. The recycled feedstocks will be used in our existing olefins crackers and produce high-value circular polymers that are indistinguishable from fossil-based polymers. Our proprietary MorinTech technology is unique with a plastic-to-plastic yield of more than 80%, low energy intensity, the ability to utilize 100% renewable electricity, and half of the carbon footprint compared to fossil-based feedstocks. As a leader in the market today, we continue to see healthy margins for our recycled and renewable-based polymers, given the strong demand and limited supply for these materials. This profitability is core to the second pillar of our corporate strategy, to create a profitable circular and low carbon solutions or CLCS business. We continue to expect annual CLCS incremental EBITDA of $1 billion by 2030. As we build our first integrated hub in Germany, we are also planning our second integrated hub for Houston. Please turn to slide six as we discuss the future of our Houston refinery site. We continue on our path to close the refinery by the end of the first quarter of 2025. Another strategic milestone for LYB. We're exiting a volatile, low margin business to focus our resources on opportunities for sustainable value creation. Kim will discuss the financial implications of the refinery closure later in the call. On this slide, we outline three projects under consideration for the future of the refinery site. The first project, subject to a final investment decision, is to utilize a portion of the site for a second, larger Moritech unit. We expect that Moritech 2 will be twice the size of our German plant, with the capacity to produce 100,000 tons of cracker feedstocks. We plan to leverage upon our existing hydrotreaters at the refinery and retrofit them. This will allow us to upgrade both the recycled feedstocks coming from our Moritech 2 unit and feedstocks from third-party suppliers for use in our olefins crackers for the production of circular and low carbon circular revive polymers. The second project under consideration is to retrofit some of the other refining assets to produce renewable and bio-based feedstocks. These feedstocks would also be used in our existing olefins crackers for the production of circular and low carbon circular renew polymers. And with a substantial array of utilities, laboratories, pipelines, storage, logistical assets, and other infrastructure on the 700-acre site, The refinery provides ample opportunity for investments and partnerships to support LYB's continued growth in low carbon feedstocks and products. Although crude refining at the site will end, we have several opportunities to repurpose the site to capture sustainable value. We are leveraging our existing cost advantage assets to satisfy growing market demand for circular and low carbon solutions. I will now turn the call over to Michael to discuss our financial progress.