Westlake Corporation

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Westlake Corporation's second quarter 2024 earnings conference call. During the presentation, all participants will be in a listen-only mode. After the speaker's remarks, you will be invited to participate in a question and answer session. As a reminder, ladies and gentlemen, this conference is being recorded today, August 6, 2024. I would now like to turn a call over to your host, John Zeller, Westlake's Vice President and Treasurer. Sir, you may begin.

Thank you. Good morning, everyone, and welcome to the Westlake Corporation conference call to discuss our second quarter 2024 results. I am joined today by Albert Chow, our Executive Chairman, Jean-Marc Gilson, our President and CEO, Steve Bender, our Executive Vice President and Chief Financial Officer, and other members of our management team. During the call, we will refer to our two reporting segments, performance and essential materials, which we refer to as PEM or materials, and housing and infrastructure products, which we refer to as HIP or products. Today's conference call will begin with Albert and John Mark, who will open with a few comments regarding Westlake's performance. Steve will then discuss our financial and operating results, after which Albert will add a few concluding comments, and we will open up the call to questions. Today, management is going to discuss certain topics that will contain forward-looking information that is based on management's beliefs, as well as assumptions made by and information currently available to management. These forward-looking statements suggest predictions or expectations and thus are subject to risks or uncertainties. These risks and uncertainties are discussed in Westlake's Form 10-K for the year ended December 31, 2023 and other SEC filings. We encourage you to learn more about these factors that could lead our actual results to differ by reviewing these SEC filings, which are also available on our investor relations website. This morning, Westlake issued a press release with details of our second quarter results. This document is available in the press release section of our website at westlake.com. We have also included an earnings presentation, which can be found on the investor relations section of our website. A replay of today's calls will be available beginning today, two hours following the conclusion of this call. This replay may be accessed via Westlake's website. Please note that information reported on this call speaks only as of today, August 6, 2024, and therefore you are advised that time-sensitive information may no longer be accurate as of the time of any replay. Finally, I would advise you that this conference call is being broadcast live through an internet webcast system that can be accessed on our webpage at westlake.com. Now I'd like to turn the call over to Albert Chow. Albert?

Thank you, John. Good morning, everyone. We appreciate you joining us to discuss our second quarter 2024 results. I'm pleased to announce that we reported record quarterly results for our HIP segment in the second quarter of 2024. which contributed to year-over-year company-wide earnings growth this quarter. We achieved this despite a slower-than-expected global macroeconomic recovery following the downturn in macroeconomic conditions that began in the second half of 2022 and the average annual rate of housing starts through June 2024 below the average for 2023. For the second quarter of 2024, We reported net sales of $3.2 billion, EBITDA of $744 million, net income of $313 million, or $2.40 per share, which were each an improvement from the second quarter of 2023, as we benefited from higher volumes across the board in our HIP segment, led by pipe fittings and sidings and trim, and also higher volumes across our materials portfolio in PEM, that by PVC resin and caustic soda. Average sales price in both segments was lower year over year in the second quarter, primarily due to the decline in PVC resin, caustic soda, and piping fitting prices that occurred last year. On a sequential basis, HIP volume rose by 15%, driven by seasonal increases in demand and product cross-selling with stable average sales price. Volume gains sequentially in PAM were 1%, while average sales price rose 4%. For PAM, this was the first sequential increase in average sales price since the stocking cycle that we experienced last year. During the quarter, We continue to see the benefits of our vertical integration strategy as strong demand for pipe and fittings and siding and trim in our hip segment helped drive PVC sales volumes, improving our PEM PVC sales mix and margins as we're able to shift sales volumes from less attractive export markets. We also saw continued benefits from a portfolio diversification strategy during the quarter, as the slow recovery in PAM margins and earnings due to continued weak global industrial demand was supported by solid hip earnings growth and margin expansion from growth in residential housing construction and infrastructure bill-related spending. Overall, we are very pleased with the performance of both our segments and the integration benefits of our portfolio of businesses. and the value this strategy delivers to Westlake and our investors. We're happy to welcome Jean-Marc Gilson to the Westlake team with appointment as our new president and CEO. He's a seasoned industry leader with a proven track record of delivering sustained financial performance with leadership roles in the US, Europe, and Asia. Most recently as president and CEO of Mitsubishi Chemical Group, Jean-Marc's appointment is the culmination of a thoughtful succession plan that ensures the continuation of our strategy to create long-term value for our shareholders. I would now like to turn the call over to Jean-Marc to provide some initial thoughts. Jean-Marc?