Huntsman CORP Q4 FY2024 earnings call

• Restructuring actions: Closures and relocations of facilities in Europe, UK, Brazil, Argentina, Chile; closure/sale of polyurethane system houses in various regions; opening of global business services hubs; expansion in some locations and reduction in others. • Cost control: Initiatives to cut costs exceeding $40 million in 2022, SG&A dropped by over 6%, decisions to cut back on system houses where customers aren't paying for services. • 2025 outlook: Focus on capitalizing on current market forces, tariffs affecting earnings positively, price recovery in MDI, and noting Europe's continued struggle with imports and energy policies. • Division focus: Advanced Materials and Performance Products are areas of interest for growth and margin expansion, with focus on less energy-intensive capacities.

No specific detailed financial performance data for each product segment with absolute terms and revenue contribution % provided in a structured manner in the transcript.

• Not providing yearly guidance, focusing on 3-6 months outlook. • Tariffs on imports into US likely help earnings, but change daily. • Signs of price recovery in MDI, with hope for margins to return. • Expect Q2 EBITDA to be better than Q1 due to seasonality and pricing improvement. • Performance Products to improve as new market applications are accepted.

• Uncertainties in tariffs changing daily which can impact earnings. • Europe's energy policies and industrial decline leading to continued struggles. • Potential import competition affecting margins. • Uncertainties in trade investigations like anti-dumping probes on Chinese MDI taking time and having unknown impacts.

Q: In the midst of restructuring, size and scope of actions and concern on fulfilling demand improvement when it comes?

A: Calibrating business around customer needs and where customers are relocating, consolidating system houses, varying by region with some withdrawals from Southeast Asian markets due to margin considerations.

Q: On Performance Products margins improving, markets driving volume improvement?

A: Gradual improvement through construction recovery for maleic business, means business including various applications, and expansion in Conroe, Texas for chip industry services, with full qualification later in the year.

Q: On maleic announcement, reason now and cash cost of shutting business?

A: Europe's increased competition from imports, considering cost advantage in North America, weighing issues of raw materials and Europe's industrial basis, decision to be made soon.

Q: On polyurethane share gains and growth from splitter in 2025?

A: Growth with market in North America, room for expansion, hope to regain lost customers through service, technical support, and full value proposition, not overnight.

Q: On optimism, what's driving it, China and US MDI?

A: China polymeric MDI prices at 3-year high, US multiple players announcing price increases after de-inventorying, Europe's uncertainty with imports and energy/tariff policies.

Q: On US anti-dumping probe on Chinese MDI, impact and when?

A: Participation in the probe, final adjudication likely over a year away, but no immediate negative if ruling on dumping.

Q: On EBITDA decrease in Performance Products first quarter, reason and continuation?

A: Drop due to maleic facility in Europe, cost initiatives and capacity coming in mid-year to improve, gradual recovery as de-inventories continue.

Q: On volume expectations in European market?

A: Flat with comparison skewed by previous year's electrical outage, 40-day turnaround in Rotterdam affecting volume.

Q: On pricing commentary, no trade-off between volume and price?

A: Correct, not happy with losing market share and volume for pricing.

Q: On reciprocal tariffs changing trade flows for customers?

A: Too early to tell, tariffs not always as damaging as expected, no big inventory buildup from customers yet.

Q: On strategic reviews, considering assets performing well like Advanced Materials?

A: Advanced Materials are valuable and high margin, but not all Europe is the same, leaning towards Advanced Materials for merger/M&A opportunities.

Q: On MDI industry operating rates by region?

A: Loose in Europe, tight in US, but affected by imports and maintenance, global operating rates mid to high-80s.

Q: On Europe energy policy and impact?

A: Failure of European energy policy leading to 90% drop in chemical production, focusing on low energy-intensive capacities, exploring alternatives outside Europe.

Q: On volumes and recovery to normal, market growth?

A: History shows previous sold-out periods, focus on volume and margins, MDI volume and margins key.

Q: On geographic positioning as advantage in tariff environment?

A: Produce where sell, 90%+ of production sold in respective regions, global footprints a good fit.

Q: On corporate costs not coming down despite savings?

A: Inflation, LIFO losses, FX impacts, underlying costs coming down from high.

Q: On Europe downstream system houses plan?

A: Aligning asset base with customer investments, removing excess capacity where demand is down.

Q: On MDI price increase magnitude and MIRALON qualification?

A: Price increase at least $0.10 per pound, MIRALON expanded to 30-ton reactor for commercial scale and qualifications, 5,000-ton reactor planned next year.

Q: On EBITDA sequential improvement and China MDI prices?

A: Seasonally Q2 better due to construction, hope for pricing traction in Q2, China MDI prices at 3-year high.

Q: On dividend from equity affiliate and European notes repayment?

A: $75 million headwind due to MTBE margin deterioration and one-off dividend from joint venture restructuring, European notes to be straight paid off in first quarter.

Q: On US construction market recovery and capital allocation?

A: Product substitutions and import attraction at certain price points, capital allocation towards mid-cycle earnings, debt levels comfortable, CapEx to increase, dividend competitive, share repurchase or M&A for Advanced Materials when excess free cash flow.

Q: On capital allocation and leverage?

A: Committed to dividend, focus on restructuring asset footprint, leverage at comfortable levels, CapEx to increase towards mid-cycle, capital allocation to return to mid-cycle earnings over time.