Westlake Corporation Q4 FY2025 earnings call

• Westlake took decisive actions to restructure businesses and reset cost position in 2025, writing off $495M and accruing $511M of identified items. - Jean-Marc outlined three pillar strategy for 2026: $200M from footprint optimization, $200M from better plant reliability, $200M from additional structural cost reductions. - Mark discussed financial results, including net loss in Q4 2025 and full year 2025, and guidance for HIP 2026 revenue and EBITDA margin. - Sustainability: Westlake achieved carbon emissions reduction goal six years early.

HIP: Fourth quarter sales declined 8% y/y due to lower sales volumes, but EBITDA margin in Q4 2025 was below prior year due to sales mix and cost changes. Full year 2025 EBITDA was $839M with 20% margin. PEM: Fourth quarter EBITDA was $45M, down $45M sequentially due to lower prices and volumes. Full year 2025 EBITDA was $267M lower than 2024 due to higher costs and lower prices. PEM closed several assets in 2025, expecting $100M annual EBITDA benefit in 2026 from footprint optimization.

• HIP expected 2026 revenue between $4.4B - $4.6B and EBITDA margin 19% - 21%. - Capital expenditures expected to be ~$900M in 2026, effective tax rate ~17%, cash interest expense ~$215M. - Three pillar strategy expected to contribute $600M improvement in earnings in 2026.

• Risks and uncertainties related to forward-looking statements discussed in SEC filings, including macroeconomic challenges, trade policy volatility, global overcapacity impacting pricing and margins.

Q: David L. Begleiter asked about HIP business in Q4 and polyethylene price increases.

A: Mark explained beat in HIP Q4 due to proactive steps and price actions in polyethylene.

Q: Patrick Duffy Fischer asked about cost savings play through in 2026.

A: Mark said cost savings will ratably play through 2026 with focus on reliability and cost reductions.

Q: Joshua David Spector asked about HIP infrastructure segment and cost savings.

A: Mark explained mix in HIP and that HIP contributes to cost savings.

Q: Frank Joseph Mitsch asked about free cash flow and tariffs.

A: Mark said focus is on driving free cash flow and tariffs on plastic pipes are de minimis.

Q: John Roberts asked about competitor OxyChem and domestic merchant chlorine.

A: Mark said weakness in chlorine is due to vinyl business and seasonal demand.

Q: Jeffrey Zekauskas asked about EBITDA base and PVC volume opportunities.

A: Mark explained starting point of actions and cautious optimism on PVC volume.

Q: Hassan Ijaz Ahmed asked about HIP sales growth and portfolio.

A: Mark said ACI acquisition and product innovations contribute to growth and focus on value creation.

Q: Aleksey V. Yefremov asked about pipe and fitting competitive pressures and caustic soda.

A: Mark said innovative products drive pipe and fitting business and caustic soda price traction.

Q: Matthew DeYoe asked about adjusted earnings and tailwind.

A: Mark said actions to shutter assets and three pillar strategy drive adjusted earnings.

Q: Arun Viswanathan asked about profitability improvement carry through and cash flow.

A: Mark said cost savings carry through and focus on free cash flow.

Q: Peter Osterland asked about profitability carry through and cash flow drivers.

A: Mark said cost savings carry through and focus on working capital and CapEx.

Q: Matthew Blair asked about China VAT rebate and cost reductions.

A: Mark said China VAT rebate removal impacts export pricing and cost reductions are incremental.

Q: Turner Hinrichs asked about chlorine and vinyls earnings and HIP margin swing factors.

A: Mark said demand pull and product mix impact chlorine and vinyls earnings and HIP margin.

Q: Abigail Eberts asked about PEM cost and price increases.

A: Mark said ethylene pricing impact and announced price increases in polyethylene.

Q: Kevin William McCarthy asked about asset utilization and tax rate.

A: Jean-Marc said asset utilization improvement and Mark said tax rate due to net operating losses