The LyondellBasell teleconference is being recorded for replay purposes. David Kinney, Head of Investor Relations, welcomes everyone and reminds them to refer to the accompanying slide presentation. Forward-looking statements and non-GAAP financial measures will be discussed, with a reminder to review cautionary statements and regulatory filings. The call will focus on underlying business results using non-GAAP financial measures, with reconciliations and other disclosures available on the Investor Relations website. A recording of the call will be available until November 27.

In the second paragraph, the speaker introduces the participants of the call and outlines the main topics that will be discussed. They also mention three key messages for the call: the company's resilience in challenging market conditions, their focus on executing their long-term strategy, and their successful growth in the Intermediates & Derivatives segment. The speaker also mentions the record-setting quarterly EBITDA for this segment, which will be elaborated on by another speaker.

The company is actively managing its business portfolio to focus on assets and businesses that support the growth of its core, while also investing in a profitable circular and low-carbon solutions business. They have made progress in this area, including plans for a commercial advanced catalytic recycling plant in Germany and joint ventures in plastic waste recycling and renewable energy. The company's value enhancement program is also on track to exceed its target of $200 million in recurring annual EBITDA run rate by the end of 2023.

The fourth paragraph of the article discusses the value unlocked by the VEP and how it supports the company's investments in its core business and circular and low-carbon solutions. The author also emphasizes the company's focused strategy and its strong track record of cost management, operational excellence, and innovation. The company's commitment to leadership and safety performance is highlighted, with a congratulatory message for the team's outstanding safety performance. The paragraph also summarizes the company's financial results for the third quarter, including resilient earnings, strong cash generation, and available liquidity. The call is then turned over to the company's financial and segment leaders for more detailed discussions.

LyondellBasell has a strong track record of efficient cash conversion and a commitment to balanced and disciplined capital allocation. In the past 4 quarters, they generated $5 billion in cash from operating activities and had a cash balance of $2.8 billion at the end of the third quarter. They have efficiently converted 102% of their EBITDA into cash and have used their cash to cover capital expenditures, pay down bonds, and return $448 million to shareholders through dividends and share repurchases. The company is focused on growing and upgrading their core businesses while actively managing their portfolio. In the third quarter, their portfolio delivered $1.4 billion in EBITDA, with record quarterly earnings in I&D and lower margins in O&P due to higher feedstock costs, new industry capacity, and challenging conditions in European markets.

The company's third quarter earnings exceeded expectations due to improved margins in the I&D segment. Operating rates will be adjusted to align with market demand in the fourth quarter. In the olefins and polyolefin Americas segment, EBITDA was $504 million, but margins were affected by higher feedstock costs and oversupply. Export prices and volumes are expected to support polyethylene pricing in the fourth quarter, but there may be challenges from volatile feedstock and energy costs. The company remains focused on matching operating rates with market demand and two-thirds of their North America polyethylene capacity is high density polyethylene.

The company is pleased to see a decrease in high density polyethylene inventories and has invested in a plastic circularity fund to reduce pollution. They have also invested in a joint venture to accelerate the development of a nationwide circular economy for plastics. The European market continues to be challenging with weak demand, but the company expects modest polymer price increases. They have also made the decision to close one of their polypropylene assets in Italy to improve their focus on core assets and businesses.

LyondellBasell announced the acquisition of two Dutch recycling companies and signed a renewable power purchase agreement to support their sustainability goals. The Intermediates & Derivatives segment had record third quarter earnings due to exceptional oxyfuel margins. The company's diverse global business portfolio allowed for resilient results through market cycles. The addition of a new PO/TBA asset increased their global oxyfuels capacity to match their North American polyethylene capacity. Planned idling of two POSM assets in the U.S. and Europe for approximately 2 months at each asset offset the increase in volumes from the new asset.

LyondellBasell is taking a disciplined approach to production rates to match market demands during challenging conditions. They expect margins to moderate in the fourth quarter due to seasonal factors and higher butane costs. Planned maintenance is being conducted at two propylene oxide assets, and global I&D assets will run at 70% capacity. The company has recently launched a new brand of low-carbon solutions and is making progress on their new PO/TBA asset in Houston, which is expected to significantly increase their propylene oxide and oxyfuels capacities. These technologies have the lowest operating costs and carbon footprint, and the company has achieved a record of over 4 million man hours without a recordable injury during the commissioning and start-up of these assets.

The company's focus on safety has led to successful completion of the technical acceptance test for their new PO/TBA facilities. However, planned maintenance at existing assets will offset the ramp-up in capacity in 2023. The company expects to see increased volume contribution from the new asset in 2024. In the refining segment, EBITDA was $105 million in the third quarter, with improvements in the benchmark Maya 2-1-1 crack spread offset by mark-to-market losses from a distillate hedging program. The company is currently executing planned maintenance on their catalytic cracker, with an estimated EBITDA impact of $25 million in the fourth quarter. They expect crude throughputs to be at 80% of capacity in the fourth quarter due to seasonally slower demand for refined products and decreasing Maya 2-1-1 spreads.

The paragraph discusses the third quarter results for the Advanced Polymer Solutions segment and the Technology segment. The EBITDA for the third quarter was $18 million for APS and $146 million for Technology. The decrease in margins for APS was due to sales mix and lower demand, while Technology saw an increase in licensing revenue and improved catalyst results. The fourth quarter is expected to have lower licensing revenue and catalyst volumes.

In the technology segment, EBITDA is expected to decrease by $30 million in 2023 due to challenging market conditions. The company plans to make a final investment decision for a commercial scale plant before the end of the year. The market outlook for the Americas is stable, while Europe is expected to remain challenging. China's markets are slowly improving. Demand for consumer packaging is steady, but customers are keeping inventory levels low. Building and construction markets are slow, but potential benefits may arise from recent stimulus initiatives. Automotive production is expected to continue gaining momentum, and the UAW strike has not yet had a significant impact on the company's results.

The third quarter saw strong oxyfuels margins and record results in the Intermediates & Derivatives segment. O&P margins were impacted by higher feedstock costs and new industry capacity. The company generated $1.7 billion in cash from operations and returned $450 million to shareholders. The fourth quarter is expected to have softer demand, but the company remains confident in its ability to deliver results. The company's long-term strategy focuses on growing the core business, upgrading the business portfolio, and building a comprehensive business model for circular and low-carbon solutions. The company is also transforming its performance and culture to enhance value creation through its value enhancement program.

The speaker is confident that the company will exceed their target for recurring annual EBITDA in 2023. They are focused on delivering profitable and sustainable growth. The first question from a conference call participant is about the profitability of a joint venture in China and the small number of shares the company bought back in the quarter. The speaker explains that the situation in the joint venture has not changed, but there are signs of domestic growth in the market. The company's capital allocation strategy remains unchanged and they are pleased with their cash flow and working capital performance.

The speaker reiterates the company's commitment to shareholders and mentions their previous actions, such as a 70% payout target for free cash flow. They also mention being cautious due to uncertainties, and a record quarter in I&D with the successful start-up of a new PO/TBA plant. The portfolio mix has changed with this investment. The speaker also mentions the company's mid-cycle margins and the impact of weak demand and capacity oversupply on volume and margin in the current environment.

The speaker, Peter Vanacker, is discussing the success of the Value Enhancement Program at LyondellBasell. He is pleased with how the team has embraced the program and the results have exceeded their initial targets. The program is ongoing and expected to continue to add value beyond the original target of 750 million.

The speaker discusses how the first phase of the company's initiatives has already led to new projects being identified, and mentions the possibility of their refinery being selected for a DOE-funded hydrogen hub in Texas. This could potentially impact their plans for the MoReTec process and the operation of hydro treaters and hydrocrackers.

The company is investing in various projects in Houston, including upgrading plastic oil and producing renewable hydrocarbons. The demand for polypropylene is increasing and the market is becoming more balanced, with growth seen in the automotive segment.

The speaker discusses the improvement in the Catalloy sector and the challenges faced in the market environment. The speaker also mentions negotiations with unions for the shutdown of a line in Italy and ongoing considerations for restructuring and asset shutdowns. The speaker acknowledges the decline in O&P EAI profitability and mentions actions taken, such as idling a joint venture, to address this.

In the third quarter, the company had initially projected a lower EBITDA of $1.1 billion to $1.25 billion, but ended up meeting the previous consensus of $1.41 billion. This was due to market factors and the successful operation of their PO facilities. As for the fourth quarter, the company is not providing guidance but is optimistic about their results due to their agility and ability to maximize value in their core business. They also expect higher Oxyfuels margins.

Peter Vanacker discussed the company's capacities and how they are affected by competition. He stated that margins in oxyfuels will not reach peak levels like in Q3, and mentioned the current situation in the polyethylene and polypropylene business. He also addressed the company's investment in a fund, stating that it serves a strategic purpose in enhancing their knowledge and supporting early-stage technology companies. The next question from Hassan Ahmed was not specified.

Peter Vanacker, CEO of Nouryon, responds to a question about the impact of lower water levels in the Mississippi on their business. He states that there is no impact and then moves on to discuss the company's strategy regarding acquisitions in the renewable and circular plastics market. He explains that the company is focused on building up their assets in Europe and Houston, investing in upstream partnerships to access plastic waste, and leveraging their own advanced recycling technology. They are also looking at opportunities through their APS business. Vanacker does not provide specific numbers on the capital spent on these acquisitions, but mentions that two investments have already been made.

The company has acquired Mepol to be closer to brand owners and OEMs. They are making smaller deals to cover the entire value chain. Around 15% of their investments will be focused on this strategy. The investments made so far are less than $200 million. In the I&D segment, profitability is expected to regress due to butane and other factors. The POSM plants are still down and the timing of their outages in Q3 and Q4 should be considered in sequential modeling.

The speaker, Kim Foley, discusses the profitability of oxyfuels and explains that it is driven by factors such as crude prices, gasoline cracks, and the premium for octane in the gasoline pool. They mention that the premium has decreased in October but remains higher than historical levels. They also mention that their PO/TBA plants are running at 70% capacity and this aligns with their strategy of growing and upgrading the core. The question from Arun Viswanathan is about their thoughts on polyethylene markets, specifically the recent increases in August and September.

The speaker asks about the current state of the PE market in China and whether it has bottomed out. The CEO mentions that PE exports have increased, but there are concerns about new capacity coming into the market. The COO adds that there is good support for exports due to the high oil to gas ratio, but Europe is still facing challenges. The final question asks for an update on inventory and capacity additions in China.

The speaker is responding to a question about how the current market conditions will impact the company's growth next year. He explains that there will be more capacity coming online, which will result in a slow recovery in the first half of the year. However, there is hope for growth in the second half as incentives and consumer confidence increase. The speaker is pleased with the company's Q3 results and looks forward to sharing updates on their long-term strategy.

The speaker wishes the audience a great and safe weekend and thanks them for participating in the conference call. The call is now concluded and the participants can disconnect.

This summary was generated with AI and may contain some inaccuracies.