LyondellBasell Industries NV Q1 FY2026 earnings call

• Safety: Lyondell Basel had exceptional safety performance in 2025, total recordable incident rate reached historic low, safest year in company history despite maintenance/turnaround activity. • Strategic pillars: First pillar - grow and upgrade core, advance portfolio transformation with divestment of European assets on track for Q2 2026, strengthen cost-advantaged position in Middle East. Second pillar - build profitable circle and low-carbon solutions business, Moritech One construction progressing, advocate for policy frameworks, execute energy efficiency initiatives. Third pillar - step up performance and culture, value enhancement program exceeded target, achieved $1.1 billion recurring annual EBITDA in 2025, extending to target $1.5 billion by 2028. • Cash improvement plan: Surpassed initial $600 million cash conservation goal to $800 million in 2025, reduced working capital by $400 million, reduced global workforce by 7%, capital spending disciplined. Expect $500 million incremental cash in 2026, cumulative target $1.3 billion through end of 2026. • Capital allocation: Generated $2.3 billion from operating activities in 2025, issued $1.5 billion in bonds, ended year with $3.4 billion cash and short-term investments and $8.1 billion available liquidity. Prioritized safe and reliable operations, advanced strategic growth projects, provided cash returns to shareholders.

In Q4 2025, total business EBITDA was $417 million. Olefins and Polyolefins Americas segment had Q4 EBITDA of $164 million, down from prior quarter due to higher feedstock costs, lower polyethylene margins, and maintenance. Olefins and Polyolefins Europe, Asia, and International segment had a Q4 EBITDA loss of $61 million due to seasonally lower prices and maintenance. Intermediates and Derivatives segment had Q4 EBITDA of $205 million. Advanced Polymer Solutions segment had Q4 EBITDA of $38 million, with 55% higher EBITDA year over year. Technology segment had solid Q4 results with catalyst demand strengthening and revenue increase.

• 2026 capex expected to be approximately $1.2 billion, with $400 million for profitable growth and $800 million of sustaining investments. • Expect additional $500 million of incremental cash in 2026 relative to 2025 actuals, cumulative target for cash improvement plan from $1.1 billion to $1.3 billion through end of 2026. • 2026 effective tax rate expected to be approximately 10%, cash tax rate approximately 10 percentage points higher. • In Q1 2026, expect modest improvements from seasonal lows, polyethylene price increase initiatives supported by low industry inventories in North America, demand seasonally improve in Europe but imports pressure pricing, near-term capacity additions in Asia wait on margins, packaging demand stable, building and construction sentiment cautious, automotive sector mixed.

• Market conditions: Industry margins deeply depressed, factors like global trade disruptions, low demand for durable goods, lower oil-to-gas ratio, ongoing global capacity additions, increased competition from imports in Europe, structurally higher energy costs. • Geopolitical uncertainty: Impact on proxy fuels markets, keeping them volatile. • Working capital: Need to rebuild some working capital in 2026, which has been factored into cash improvement plan but may cause moderate build. • Capacity rationalization: Uncertainties around actual implementation and timing of capacity rationalization in various regions like China, Europe, etc.

Q: David Begleiter with Deutsche Bank asked about dividend yield and potential cut to invest in projects.

A: Peter responded about cash improvement plan, investment-grade balance sheet, delayed growth investments, and regular board reviews on capital allocation.

Q: Patrick Cunningham with Citi asked about 2026 CapEx guide.

A: Peter and Augustine explained 2026 capex of $1.2 billion, with $0.8 billion in maintenance, delayed turnarounds, and future expectations.

Q: Frank Mitch with Fermium Research asked about Houston Refinery.

A: Peter said plan continues, avoided capex by shutting down, and remains open on asset monetization.

Q: Jeff Tsakowskis with JPMorgan asked about working capital.

A: Peter and Augustine said working capital was well managed, will rebuild some in 2026, factored into cash improvement plan.

Q: Vincent Andrews with Morgan Stanley asked about oxyfuels market.

A: Aaron said oxyfuels expected to normalize with typical seasonal improvements, watching crude volatility.

Q: Matthew Blair with TPH asked about polypropylene and polyethylene.

A: Peter and Kim discussed polypropylene demand tied to durable goods, polypropylene cost curve, and expected recovery.

Q: Alexey Yeferov with Cuban Capital Markets asked about China anti-involution policies.

A: Peter said lots happening in China with capacity rationalization and new policies.

Q: Mike Sisson with Wells Fargo asked about OP Americas exports.

A: Kim said lesser exports due to product portfolio, and expectation of pricing normalization.

Q: Josh Spector with UBS asked about Olafin's EAI shutdowns.

A: Response was Olsen's impact for EAI in Q4 was $35 million.

Q: Hassan Ahmed with Olympic Global asked about rationalizations.

A: Peter explained the 23 million ton capacity rationalization figure and related details.