Q4 2021 LyondellBasell Industries NV Earnings Call
Hello, and welcome to the Lyondellbasell teleconference.
Our request of wind all this all this conference is being recorded for instant replay purposes.
Following today's presentation, we will conduct a question and answer session.
I would now like to turn the conference over to Mr. David Kinney head of Investor Relations, Sir you may begin.
Thank you operator, Hello, and welcome to lineup sales fourth quarter 2021 teleconference. I'm joined today by Ken Layne, Our interim Chief Executive Officer, and Michael Mcmurray, Our Chief Financial Officer.
Before we begin the discussion I would like to point out that a slide presentation accompanies today's call and is available on our website at www Dot Lyondellbasell Dot com Slash Investor relations today, we will be discussing our business results, while making reference to some forward looking statements and non-GAAP financial measures.
We believe the forward looking statements are based upon reasonable assumptions and the alternative measures are useful to investors. Nonetheless, the forward looking statements are subject to significant risks and uncertainty.
Encourage you to learn more about the factors that could lead our actual results to differ by reviewing the cautionary statements in the presentation slides and our regulatory filings, which are also available on our Investor Relations website additional.
Documents on our Investor website provide reconciliations of non-GAAP financial measures to GAAP financial measures together with other disclosures, including the earnings release and our business results discussion.
A recording of this call will be available by telephone beginning at one PM Eastern time today until February 28 by calling 870 76606853 in the United States and 20161 to 741 five outside the United States. The access code for both numbers is $1 37 to $5 <unk>.
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During today's call, we will focus on fourth quarter and full year 2021 results the current environment and our near term outlook.
Before turning the call over to Ken I would like to call your attention to the noncash lower of cost or market inventory adjustments or LCM that we have discussed on past calls. These adjustments are related to our use of last in first out or LIFO accounting and the volatility in prices for our raw material and finished goods inventories during.
During the fourth quarter of 2021, we recognized noncash impairment of $624 million that reflected our ongoing evaluation of strategic options for the Houston refinery.
Comments made on this call will be in regard to our underlying business results, excluding the impacts of the refinery impairment and the LCM inventory adjustments with.
That being said I would now like to turn the call over to Ken.
Thank you, Dave and good day to all of you. We appreciate you joining us today as we discuss our fourth quarter and full year 2021 results.
Before we begin the business discussion I would like to take a moment and thank our board of directors for the opportunity to lead Lyondellbasell as interim CEO until Peter Vanacker can join the company at the end of the second quarter.
For the past 30 years I've worked in the chemical industry enroll spanning manufacturing major projects strategy and business leadership with assignments in Asia, Europe and the Americas.
Since 2019, I've had the pleasure of leading Lyondellbasell is global olefins <unk> polyolefin businesses.
Our company is in great shape, and we have good momentum.
I want to emphasize that our strategy remains unchanged and I'll keep our company moving forward continuing to execute our strategy and ensuring Peter has a successful start.
I will work closely with our board the Lyondellbasell leadership team and our 19000 talented employees to advance our growth projects actively manage our business portfolio and ensure we remain consistent with our goals of being the best operated and most valued company in our industry.
Now moving onto the business discussion.
As Dave mentioned, a set of slides accompanying today's call and is available on our website.
Let's turn to slide three and review some highlights for the past year.
2021 earnings were $18 19 per share was $9 $3 billion of EBITDA.
Earnings per share were more than three times higher than 2020, and EBITDA improved by 140%.
Our company is growing portfolio of assets delivered EBITDA that exceeded our previous best year by 15% and resulted in seven $6 billion of cash from operating activities.
Altogether, we generated a 25% return on invested capital during 2021.
Our results provide an indicator of how lyondellbasell as earnings power is stepping up relative to the performance we delivered over the prior decade.
Our 2021 performance was supported by strong demand for our products.
Supply constraints across our industry and our growth investments.
Favorable markets drove seven consecutive months of contract price increases for polyethylene in the United States.
In our intermediates and derivatives segment strong demand for polyurethane drove record earnings from our leading propylene oxide and derivatives business.
A robust market for building and construction materials serve to increase margins across our acetyl is value chain.
Also rebounding demand for transportation fuels self help cost reductions and higher operating rates enabled our refining segment to return to profitability in both the third and the fourth quarters.
I want to emphasize that we're maintaining our commitment to a disciplined approach to capital allocation.
Our team worked diligently to convert our EBITDA into seven $6 billion of cash from operating activities.
After investing $1 $9 billion to maintain our assets and fund additional profit generating investments $5 $7 billion of free cash flow remained.
We rewarded investors by deploying $4 44 per share in dividends and repurchasing over 5 million shares.
Last but not least we delivered on our commitments and strengthened our balance sheet with $4 billion of long term debt reduction.
Our strategy is to identify develop and capture opportunities through all phases of business cycles. During 2021, we capitalized on those opportunities.
Let's turn to slide four.
Our core commitments to health and safety remains steadfast the <unk>.
Tragic incident that resulted in two fatality and several injuries at <unk> acid plant last July .
Minds us of why we work so diligently toward our goal of flawless safety performance.
We learned from experience and seek to further bolster our goal zero work environment to prevent these incidents from recurring.
On slide four you can see that during 2021, our team continued to deliver recordable incident rates that are among the lowest for our industry.
Particularly proud of our team's performance over the final months of 2021, as we engage the entire organization and leadership teams of our largest contractors to reduce recordable incident rates across our employee and contractor workforce each month during the second half of the year.
Now please turn to slide five to review our quarterly profitability.
While increased costs for feedstocks and energy continue to compress margins from second quarter highs demand for our products remains strong.
Our business portfolio delivered $2 billion of EBITDA during the fourth quarter exceeding the results of the prior year quarter by 60%.
Increased energy costs were particularly impactful for our European Owen P and Indy operations, where on Sundays in December Dutch natural gas prices exceeded $50 per million Btu.
Higher natural gas prices directly impact our fuel costs, but also show up as higher costs for our purchased electricity and steam.
Nonetheless seasonal patterns for our businesses typically trend downward at the end of the year and the $2 billion of EBITDA. We earned during the fourth quarter of 2021 is reflective of healthy markets for our products.
The downward trends, we saw in the fourth quarter seem to be abating with margin stabilizing in January during the remainder of the first quarter, we could see inflection on stronger seasonal demand and supply constraints.
Most of the economists expecting 2022 global GDP growth rates to exceed historical averages at roughly 4% we remain constructive on the outlook for our businesses new.
New capacity will come online in 2022, but will largely be needed to meet growing demand from well funded consumers address order backlogs as supply chains normalize and support further global reopening from the pandemic.
Slide six provides a historical view of lyondellbasell profitability over the past decade.
During the period from 2011 to 2019, we delivered an average of $6 7 billion of EBITDA. Our performance in 2021 exceeded the 2015 peak by 15%.
While 2021 was a particularly strong year for our core markets, we have confidence that the growth investments. We brought online since 2018 will drive a sustainable step change improvement in our profitability over the next decade.
The formation of our advanced polymer solutions segment in 2018 provided visibility into Lyondellbasell sizable legacy compounding business.
The businesses, we acquired that year from a schulman added approximately $200 million in annual EBITDA.
Since 2018, the Aps segment has been challenged by production constraints in their largest market plastic compounds used in vehicle production.
Despite high consumer demand automotive production has been held back by Covid related manufacturing shutdowns and shortages of semiconductors with global vehicle production expected to rebound by 9% in 2022 and an additional 10% in 2023, we expect to reach higher utilization across our Aps segment.
Increased capacity utilization will enable the realization of volume driven synergies.
In 2020, we commissioned the first world scale plant utilizing lyondellbasell proprietary Hypersound technology for high density polyethylene, we have a long and successful track record of introducing new polyolefin technologies.
Each new generation of technology and counters initial challenges and we are making good progress working through those with our first hypersound asset.
Our manufacturing and R&D teams have been working diligently to improve reliability.
In the fourth quarter of 2021, we decided to bring down the hypersound plant and make some modifications.
It's still early days, we are highly encouraged by the performance of the plant since restarting in December .
My expectation that we will realize a greater share of the volume and margin benefits from this investment during 2022.
In 2020, we invested in integrated Cracker joint ventures in China, and Louisiana, where new assets were fully built and generated immediate returns.
In 2022, we are starting up two new propylene oxide plants, a joint venture in China, and a wholly owned asset in Houston that will expand lyondellbasell ownership capacity propylene oxide by nearly 50%.
I'm pleased to report that the China plant is already producing on spec products and rapidly ramping up rates are.
Our larger TBA facility in Houston is progressing on schedule for startup during the end of this year.
Both propylene oxide facilities are starting up with tight markets and all time high margins for this intermediate chemical that is essential for the production of polyurethane and other downstream products.
Taken together our growth investments give us the confidence so we will step up earnings in the current decade.
On slide seven I would like to highlight how we are also stepping up our progress on sustainability.
In April we introduced our circle and family of polymers produced using recycled and renewable base feedstocks that reduce our reliance on fossil based raw materials.
These products are targeted at the rapidly growing market for sustainable plastics.
In October we extended the circular <unk> brand to the compounds and solutions provided by our Aps segment.
All of this is part of Lyondellbasell commitment to annually produce in market 2 million tons of recycled and renewable base polymers by 2030.
2022 will be an exciting year for our proprietary more tech advanced recycling technology.
In December our team commissioned upgrades to our pilot facility, enabling us to determine the extent of our technology advantage and guide an investment decision for our first commercial scale facility.
This technology provides lyondellbasell with an opportunity to be a leader in the rapidly growing markets for circular plastics.
In late September , we announced accelerated targets and the goal to achieve net zero scope, one and scope two greenhouse gas emissions from our global operations by 2050.
We also increased our 2030 ambition and now aim to reduce absolute emissions by 30% relative to 2020 baseline.
In the near term, we don't expect significant increases in our overall capital budget as reduced spending associated with the completion of our TBA project in 2022 should offset an increasing share for circular and climate related investments going forward.
With that I'll turn the call over to Michael for him to describe our financial and segment results similar detail.
Thank you Ken and good morning, everyone.
Please turn to slide eight and let me begin by highlighting our substantial cash generation during 2021.
Lyondellbasell delivered record cash from operations and free cash flow in 2021, our team worked diligently to efficiently convert 82% of our EBITDA into cash for the year. Despite increased working capital needs to support higher prices after accounting for sustaining capital investments, we achieved a <unk>.
3% free operating cash flow yield relative to our market capitalization.
Let's continue with slide nine and review the details of how we deployed all of this cash last year.
During 2021, we pay dividends and repurchase shares to provide a total of $2 billion and returns for shareholders in.
In May we increased our quarterly dividend by 8%.
2021 represents our 11th consecutive year of annual dividend growth.
At the same time, we reduced our long term debt by $4 billion.
And further bolstered our balance sheet by paying down $300 million of short term commercial paper.
Net interest expense increased to $510 million higher than our guidance at the beginning of 2021, largely due to debt extinguishment costs.
Our current portfolio supports our solid investment grade balance sheet, and we do not see the need for additional debt reduction.
We ended the year with $1 5 billion of cash and short term investments and $5 4 billion of cash and available liquidity.
Now I would like to provide an overview of the results for each of our segments on slide 10.
As Ken mentioned, our business portfolio delivered $2 billion of EBITDA during the fourth quarter.
Our results reflected strong demand for our products offset by higher costs for feedstocks and energy primarily in our ODP Europe Asia International.
IND.
And Aps segments.
Let's begin the individuals segment discussions on slide 11, with the performance of our olefins <unk> Polyolefin Americas segment.
Fourth quarter 2021, EBITDA was $1 3 billion.
$306 million lower than the third quarter.
Margins declined on lower pricing for both olefins and polyolefin.
Olefin results decreased approximately $190 million compared to third quarter 2021, due to margin declines driven by lower ethylene and propylene prices.
Although we operated our north American ethylene crackers at 97% sales volumes remained relatively unchanged as we built inventory to support maintenance downtime planned for the first quarter.
Combined polyolefin results were approximately $120 million lower than the third quarter, primarily due to a decrease in polyethylene and polypropylene spreads over an honor.
Polyethylene, however posted record volumes driven by strong demand and increased production from our hypersound facilities in December .
<unk> Americas posted record EBITDA of $5 3 billion for the full year $3 5 billion higher than 2020.
Margins increased for both olefins and polyolefin is higher product prices outpaced higher cost <unk>.
Demand for non durable packaging and consumers good consumer goods remained strong and led to increased volumes for both ethylene and polyethylene.
Based on increasing seasonal demand and tight industry supply due to higher industry cracker maintenance, we expect robust margins to continue into the first quarter.
Let's turn to slide 12, and review typical seasonal trends in the U S polyethylene market.
After tight markets escalated prices over the first three quarters of 2021 declines in polyethylene contract prices during the fourth quarter of last year captured market attention.
As illustrated as illustrated by the Green line on the chart demand typically rises during the first quarter stabilizes in the second quarter and grows again during the second season of the third quarter.
In the fourth quarter.
It is for polymer slow due to holiday downtime.
And as market participants strive to minimize their year end inventories.
The Blue line indicates that polyethylene pricing logically follows the seasonal demand trends simply put lower fourth quarter prices are a common occurrence.
In contrast, the industry, usually sees a rebound in demand and pricing during the first quarter.
Orders increase as customers resume full production during.
During February and March export demand often improves following the lunar new year holiday.
In 2022 industry consultants are forecasting planned maintenance for U S. Ethylene crackers will be three times higher than normal with about 15% of U S capacity, taking maintenance downtime.
Similarly about 10% of European ethylene capacity will be down for maintenance during the first half of 2022.
Celine cracker outages, often constrained downstream polyethylene production.
In summary, the confluence of seasonal trends industry downtime and robust consumer demand should provide support for polyethylene pricing during the first quarter of 2022.
Now please turn to slide 13 to review the performance of our Olefins and Polyolefin Europe Asia and International segment.
Higher costs, and lower spreads reduced margins and volumes in our markets, resulting in a fourth quarter EBITDA of $155 million.
$319 million lower than the third quarter.
Olefins results declined approximately $180 million as margins decreased driven by higher feedstock and energy cost despite higher ethylene and propylene prices.
We operated our crackers at a rate of 70% due to planned maintenance.
Combined polyolefin results decreased approximately $100 million.
Compared to the prior quarter.
<unk> seasonal demand drove declines in polyethylene price spreads relative to monitor costs and reduced volumes.
Declining polyolefin spreads and higher energy costs also affected our joint venture equity income by about $15 million.
Full year, EBITDA increased $923 million compared to 2020.
Olefins margins declined due to higher feedstock costs outpacing increased ethylene and propylene prices.
And bind polyolefin results and our joint venture equity income increased by more than $815 million and $125 million, respectively, driven by higher margins with increases in polyolefin prices.
In Europe , we expect typical seasonal improvements as we progressed through the first half of the year.
Please turn to slide 14, as we take a look at our intermediates and derivatives segment.
Fourth quarter EBITDA was $252 million.
A decline of $96 million from the third quarter of 2021 compressed margins for oxy fuels and related products and last in first half inventory valuation charges of about $95 million muted margin improvements in our propylene oxide and derivatives and intermediate chemical businesses.
Fourth quarter propylene oxide and derivatives results remained relatively unchanged with higher margins offset by lower volumes due to planned maintenance.
Intermediate chemicals results increased about $65 million with the resumption of our asset sales production.
<unk> fuels and related products results decreased approximately $85 million as margins declined due to higher butane feedstock costs.
For the full year strong demand in a tight market drove margin increases in most businesses, resulting in EBITDA of $1 4 billion.
$535 million higher than 2020.
Volumes declined due to reduced exports of our propylene oxide and derivative products.
In the first quarter of 2022, we expect margins to improve for oxy fuels and related product business with lower butane feedstock costs are volumes are expected to increase during the first quarter supported by continued strong demand for our propylene oxide and derivatives and asset tools products.
Now, let's move forward and review the results of our advanced polymer solutions segment on slide 15.
Customer supply chain constraints and high raw material costs hindered results with fourth quarter EBITDA of $24 million $97 million lower than the third quarter. The segment incurred last in first half inventory valuation charges of about $55 million during the quarter.
Results for the compounding and solutions businesses decreased due to margin declines driven by higher raw material costs volumes decreased with continued supply chain constraints and the automotive manufacturing market results for advanced polymer businesses were relatively unchanged with margin improvement offset by volume declines.
Full year EBITDA for the segment was $409 million a.
A $28 million increase over 2020 compared to the prior period results benefited from a $35 million reduction in integration costs margins increased with higher spreads and volumes increased with higher building and construction demand for advanced polymer businesses.
We expect volumes to improve as automotive manufacturers begin to ramp up production, particularly for products from.
From our compounding and solutions business.
Now, let's turn to slide 16, and discuss the results of our refining segment.
Fourth quarter EBITDA was $150 million.
A $109 million improvement compared to the third quarter of 2021.
Results excluded a noncash impairment charge of $624 million, reflecting our ongoing evaluation of strategic options results.
Our results for the quarter benefited from approximately $50 million due to LIFO effects from reduced inventory volumes.
Results for the fourth quarter were driven by an improvement in margins due to a better product mix and an increase in the Maya 211 benchmark crack spread to about $23 58 per barrel.
We operated the refinery at near full rates of nameplate capacity with an average crude throughput at 266000 barrels per day.
Full year EBITDA increased $289 million.
Compared to 2020 or breakeven for the year.
Comparisons exclude impairments taken in the fourth quarter of 2021, and the third quarter of 2020 <unk>.
Approximately $45 million of.
Of LIFO.
Changes benefited the segment for 2021.
Refining margins improved with higher demand for gasoline and jet fuel, which drove the Maya 211 spread from a historically low point in 2020 at an average of $12 63 to.
To $20 87 per barrel in 2021.
Crude crude throughput improved to 231000 barrels per day in response to higher market demand.
Finding margins are expected to improve slightly with crack spreads estimated to be about $25 per barrel.
We plan to operate the refinery at more than 90% of nameplate crude capacity during the first quarter.
Please turn to slide 17, as we review the results of our technology segment.
All time high levels of licensing revenue and catalyst volumes drove EBITDA to new records of $173 million for the fourth quarter and $514 million for the full year base.
Based on the timing of anticipated licensing milestones, we expect the first quarter technology business profitability will be lower.
Similar to levels in the first quarter of 2021.
Before I turn the call over to Ken Let me address some of your annual modeling questions for 2022 on slide 18.
We are planning to invest approximately $2 $1 billion in capital expenditures during 2022.
Approximately $9 billion is targeted toward profit generating growth projects with the balance supporting sustaining maintenance. The majority of our 2022 growth investment is associated with the construction of the TBA plant in Houston.
We have a fairly typical schedule of planned maintenance for 2022 with a total of three major cracker turnarounds.
We will also have a couple of turnarounds in our IMT segment during the second quarter.
Based on expected volumes and margins, we estimate that loss production associated with all of this maintenance downtime will impact 2022, EBITDA by approximately $265 million.
While routine maintenance costs are expensed maintenance cost arising from turnarounds of major production units are capitalized and included in our capital expenditure forecast.
The U S. Cracker turnaround is scheduled for the La Porte, Texas site, and the first quarter and expect it to impact <unk> Americas quarterly EBITDA by approximately $125 million.
The European Cracker turnarounds will occur at our French cracker during the first and second quarters, and our smaller cracker investment in Germany. During the third and fourth quarters of 2022, the maintenance is.
<unk> is expected to impact <unk>.
<unk> quarterly EBITDA by approximately $25 million 15.
$15 million $10 million and $10 million in the first through fourth quarters, respectively.
Planned maintenance at our butane dialed facility in one of our two propylene oxide units located in channel view, Texas is expected to impact second quarter EBITDA for our intermediates and derivatives segment by approximately $80 million.
We expect 2022 net interest expense will be approximately $340 million after netting capitalized interest of about $95 million.
2022 book depreciation and amortization is forecasted to be approximately $1 3 billion.
We plan to make regular pension contributions in 2022 totaling approximately 7 million $70 million with approximately $55 million of pension expense for the year.
We currently expect our effective tax rate to be approximately 20% and our cash tax rate to be lower than our ETR.
With that I'll turn the call back over to Ken Ken. Thank you Michael So let me summarize the year's highlights and our outlook with slide 19.
In 2021, Lyondellbasell maintained our disciplined focus on safety operational excellence and reliability to maximize returns during a year of exceptional markets are.
Our 2021 results were 15% above prior benchmarks and are indicative of how lyondellbasell is profitability is stepping up from prior levels.
Many of our growth investments are providing returns today with further contributions expected over the next several years in.
In 2022, we will expand our propylene oxide capacity by 50% with the start of two new plants in China in Texas.
We are improving the performance of our Hypersound polyethylene technology to deliver enhanced product performance for our customers.
Our supply chain has normalized and automotive production begins to catch up with high consumer demand, we anticipate higher volumes and earnings from our Aps segment.
Also improving markets for fuels bodes well for our oxy fuels and refining businesses.
Our disciplined approach carries through to our capital allocation strategy.
We're providing shareholders with increasing returns from higher dividends and the resumption of share repurchases in.
In 2021, we deleveraged, our balance sheet and demonstrated our commitment to a strong investment grade credit rating.
With our strong credit metrics, we have no near term need for further deleveraging in 2020 to about 40% of our capital expenditures will be allocated toward profit generating projects, including our new propylene oxide facility in Texas.
The rapidly growing market for more sustainable plastics represents one of the greatest opportunities that lies ahead for lyondellbasell.
We have launched our circular brand and we're committed to producing and marketing at least 2 million tonnes of circular and renewable based polymers by 2030.
At the same time, we will reduce our greenhouse gas emissions in line with our commitment to achieve net zero scope, one and two emissions by 2050.
At Lyondellbasell, we believe our work in sustainability is both good for our planet and good for our business.
In summary, we will continue to execute on our disciplined approach and build on the strong momentum to deliver sustainable value for all of our stakeholders.
Now pleased to take your questions.
Thank you Sir ladies.
Ladies and gentlemen at this time, we will begin the question answer session.
If you have a question. Please press star followed by the one on your Touchtone phone.
Thank you I would like to withdraw your question. Please press the star followed by the two.
You ask that you limit to one question.
Our first question comes from the line of Bob Court with Goldman Sachs. Please go ahead.
Thank you very much.
And I was curious if you could tell us.
What your expectation is on the profile of cash flow and usage over the next couple of years I mean, it looks like you all have to work.
This free cash after <unk> after capex.
And along those lines can you give us a sense of what the options and appetite on the SaaS all option arm.
Sure Bob Thank you for your question.
Like I said previously there is there is no change to our to our capital allocation strategy and what I'll do is just ask Michael to talk a little bit more about the options going forward and then maybe I'll come back and talk about SaaS all after that perfect. Good morning, Bob.
Things that I'd say, I think first and foremost I'd say really good execution by the team in 2021 and converting EBITDA into free cash flow was a record year of cash generation. Both from an operating cash perspective, but also from a free cash flow perspective as well.
And we also delever the balance sheet by $4 billion last year, which I think is pretty impressive and then on top of that last year, we returned $2 billion to shareholders in the form of dividends and buybacks. So as we look forward, we're expecting another year of strong cash generation the balance sheets in great shape. So there's no need.
Do any further delevering.
Our growth investments are paying dividends, which is good news.
Working capital this year should be a source of free cash flow last year. It consumed a significant amount of free cash flow and then capex is largely flat year on year.
Our expectation with our current outlook that we will responsibly grow the dividend.
As you saw in the fourth quarter and also in the third quarter of last year buybacks are in the mix. So we restarted buybacks in September of 'twenty, one and when we see value. We will continue to buy our shares and from an M&A perspective, you can expect that lyondellbasell is going to continue to operate in a very very disciplined way and with that I'll.
I will turn it back to Ken to give a few comments about sasol.
Yeah, Bob So for SaaS, all we've commented before that it's our desire and intent to to own the other half of that of that joint venture, we're very happy with the partnership.
It obviously performed very well in 2021.
But of course, there is a buyer and a seller and an hour our mutual interests are going to have to be aligned in order to be able to to come to a conclusion on the transaction. So timing is a little bit hard to predict but I would still say that it is going to be in the mid term.
Thank you.
Our next question comes from the line of Jessica <unk> with Jpmorgan. Please proceed with your question.
Thanks very much.
Do you expect your cash balance at the end of the year to be very different from what it is right now.
And.
Our cost pressures in your European Olefins business in the first quarter greater than what they were in the fourth.
Hey, good morning, Jeff I'll take the first question and then I'll, let Kevin take the second one so we ended the year with about $1 five of cash on sheet.
I think you heard me just say in my previous.
The answer that we will grow the dividend responsibly, we will buy our shares when we see value.
That said as we move throughout the year. It is possible that we could build a little bit of additional cash on sheet.
And just in terms of the cost pressure in Europe .
Yes, we saw we saw really an unprecedented spike in energy costs in Europe in the fourth quarter and we started taking action then to be able to give us a little bit of insulation from that and started to move some surcharges into the market to be able to share some of that burden. So.
That is going to help us in the first quarter offset some of that but the cost pressures that we saw in Europe are obviously.
Going to be continuing as you look at the energy prices, where they are today.
But we're doing what we can to offset where possible.
Thank you.
Our next question comes from the line of Mike Sison with Wells Fargo. Please proceed with your question.
Hey, good morning.
Just curious on your thoughts on pricing for polyethylene near term there are a couple of announcements out there for February and March and given that there is some capacity a lot of capacity coming on in <unk> in North America, and the rest of the world.
Just any thoughts on how you see that.
Unfolding over over the year and whether you think that capacity can be absorbed thank you.
Sure. Thank you for the question Mike.
Look we continue to see strong demand for polymers and we expect that to continue in 2022.
As markets recover from the pandemic and.
And especially the largest market in China and in the supply chain constraints are worked through we do expect that the market growth is going to be able to absorb a lot of the new capacity that's coming online.
We still expect to see effective operating rates for polyethylene at greater than 90% and that's obviously going to be supportive of margins going forward.
We did see a downward trend in the prices in the fourth quarter.
But we are seeing pricing find a floor and as we come into the seasonally higher demand of the second quarter.
I do expect that theres going to be good support for price increases going forward.
We're already seeing spot pricing, increasing pretty much in all regions, which is which is a good indicator.
And remember as well just going back to volume December was the second strongest demand months of 2021, which is which is pretty unusual when you look at historical demand patterns.
With that in the combined impact of all of the downtime that we're expecting to see on both sides of the Atlantic in the U S and Europe , we're going to see Martin's markets continue to be tightened and we expect that to be supportive for pricing going forward.
Thank you.
Our next question comes from the line of John Mcnulty with BMO capital markets. Please proceed with your question.
Yes.
Hey, Good morning. This is Rob asked me therefore, so John .
On the refinery.
Competing with Steve at the refinery is looking for a potential transaction could you provide an update on the strategic review process on potentially seeing an uptick binary.
Then what would be the next best option, if you're not able to do the transaction because clearly <unk> is a pretty strong these days.
Sure. Thank you for your question and look as we've communicated before.
Exploring strategic options for for this business and we do continue to believe that the asset has a higher value as part of an integrated network.
I'm sure you can appreciate.
There's really not more than we can say at this time, we are in the middle of that process as we speak and with where we are right now I hope to be able to provide more details of the outcome in the next few months.
But thats really all that I can say at this point Michael I don't know if you wanted to add anything no I think stay tuned.
Thank you.
Our next question comes from the line of around with where Nathan with RBC capital markets. Please proceed with your question.
Great. Thanks for taking my question.
And I guess I, just wanted to delve in a little bit more on.
Polyethylene and polypropylene.
Polyethylene.
Obviously, we have seen some price deterioration in the last couple of months. However, there seems to be some feedstock support.
If you go into Q1.
That's that's keeping prices up a little bit.
Some of your competitors have announced price increases as well so.
Do you think that.
Those are more tactics to prevent price erosion or is there a real opportunity to get some pricing as we move through Q1, and then on polypropylene. It doesn't necessarily have the same issues with capacity additions that polyethylene phases.
Are there any opportunities for increased pricing in polypropylene, especially if auto production kind of surprises to the upside.
Hi, Arun. Thank you for the question well listen like I had said before I really do believe that with with the robust demand that we're seeing in the markets.
And the pent up demand that is still in the market yet yet to come we saw in the second half of the year last year, the largest market in China weakening in the second half of the year as they were approaching.
The Olympics and trying to keep the pandemic under control. There's a lot of demand that I believe is still yet to come back and we're going to see that I believe sometime in the middle of the year in the spring.
And so that is going to be supportive overall I don't think that this is.
Related just to feedstock. It really is that demand is strong and supply is tighter than probably most people would expect for polypropylene.
Certainly we are optimistic for polypropylene this year, where our portfolio is about 15% or so exposed to automotive and that market is going to come back. This year and that's that's also going to be supportive for polypropylene.
As we move forward in the year.
Thank you. Our next question comes from the line of Frank Mitsch Fermium Research. Please proceed with your question.
Yes, good morning, and nice to speak with you again Ken.
I appreciate the slide.
<unk> that talks about your planned maintenance.
Impact for 2000 $20 million to $265 million can you put that into context as to what's your plans.
And more importantly, what's your unplanned.
The impacts were in 2021 and to that extent also if you can comment a little bit about the propylene oxide capacity additions when should when should we anticipate seeing financial impacts from those capacity additions. Thank you.
Yeah, Frank good good to hear from you as well. Thank you for the question.
So look in 2021, obviously the biggest impact in terms of unplanned outage was winter storm, Yuri, which we don't expect that to recur obviously in 2022.
Had an impact of 4% to $500 million.
So that's that was one that is.
The most material as you would call it that we had some other downtime in acetyl.
As well as at our La Porte Olefins cracker.
So net net that that downtime last year was was very high relative to history. The unplanned downtime, we certainly don't expect to see that level of downtime.
This year now if you look at the planned outages the net impact of the planned outages from 'twenty one to 'twenty, two it's going to be about a $50 million headwind.
Because we're going to have a little bit higher planned downtime. This year in the first quarter and the first quarter, sorry, and I would just add I would caution. This is Dave Frank I would just caution that you shouldn't just add back that $400 million because margins really inflated on our downtime. So that's why we've been hesitant to try to quantify the unplanned downtime from last year because there is.
The chicken and egg effects between margins and volume.
Thank you.
Our next question comes from the line of Chris Parkinson with Mizuho. Please proceed with your question.
Great. Thank you very much.
Absolutely appears quite content with this vessel deal and I understand we also await an outcome on that front.
But are there other similar facility in marketing deals your team would be interested in and across the globe.
Perhaps anything else in the U S or Asia.
So look thank you Chris for the question.
We have been in the last couple of years, we've been implementing several growth projects, including new joint ventures in China, and the U S. We're always looking for opportunities that provide.
Good returns to the company and especially in our core businesses and we will continue to do that especially to look for opportunities through the cycle and right. Now there is not anything that I can say, specifically, we've talked about the SaaS all opportunity, but there's really nothing more that I can comment on at this time.
Thank you.
Our next question comes from the line of Kevin Mccarthy with vertical Research partners. Please proceed with your question.
Yes. Good morning, I was just wondering if you could provide an update on your circular economy initiatives. I think you have a goal of 2 million tons by 2030.
How do we get there from from here, maybe you could just talk about what's going on at <unk> and more tech.
What the decision tree looks like in terms of.
<unk> growth and potential capital needs to fund that growth.
Sure Kevin. Thank you for the question, Yes, we've set some ambitious targets for for.
For circularity and it is our intent to be a leader in the circular plastics space. We do see this market developing rapidly and it's it's an exciting area of growth that fits really well with our capabilities.
So it's going to be a clear focus for us.
Both mechanical and advanced recycling are going to be areas that we're that we're concentrating on as well as renewable products.
As you know we had mentioned previously that we are developing our own technology for advanced recycling of called more tech and we expect really to be able to assess the extent of that technologies advantage here in the next few months.
Following that we'll be deciding on an initial commercial investment that should be completed around the middle the middle of the decade.
At the same time, we're looking at other at other paths to be able to reach that volume target and we will be doing things like buying recycled and renewable feedstocks that we can that we can crack in our existing assets and that of course requires little or really no capital investment.
So all of these things are going to be levers that we're going to be pulling working very very closely with our customers and innovating with them on applications that we can roll out over time.
Thank you.
Our next question comes from the line of Duffy Fischer with Barclays. Please proceed with your question.
Yes, good morning, guys.
Three questions around the plants coming up so first is just technically.
Is there any reason to think we may have issues with the ramp up of this let's say like Hypersound or is this an older technology that you feel more comfortable about the ramp up.
Q.
What will the ramp up look like I mean, when you look at the market today, how long will it take to get those plants or at least the products in those plants, mostly sold out and then the third one is just given the market you see today.
Is the EBITDA contribution from these plants similar to what was expected historically.
Thank you for the question Duffy.
Look the technology that we are building the TBA technology that we're building.
As is the most competitive in the world. So I do want to just make sure. We point that out we were very confident in the technology. It's technology that we operate today, it's a very large and complex plant as you can imagine so I'm not going to say that there is no risk, but from a technology standpoint, I really don't see a risk.
Then to your question just around the ramp up will be ramping up beginning.
Next year, and we see very good demand and our teams are making very good progress on contracting the volume from from that asset.
Speaker 1: on contracting the volume from that asset. I can tell you as well for the plant in China, the markets are very good there, and the growth in polyurethane is going to be able to absorb this new capacity that we're bringing on stream. In terms of the EBITDA impact, I would say yes, for modeling purposes, you should be expecting the EBITDA contribution to be similar to what we've seen in the past.
I can tell you as well for the plant in China. The markets are very are very good there and the growth in polyurethane is going to be able to absorb this new capacity that we're bringing on stream in terms of the EBITDA impact I would say, yes for modeling purposes, you should be expecting the EBITDA contribution to be <unk>.
To what we've seen in the past.
Speaker 2: And I'll be just for numbers. This is our sixth POTBA plant that we built. So good experience with it. Definitely not number one.
And Duffy just for numbers. This is our sixth <unk> plant that we built so good experience with it definitely not number one.
Speaker 3: Thank you. Our next question comes from the line of John Roberts with UBS. Please proceed with your question.
Thank you.
Our next question comes from the line of John Roberts with UBS. Please proceed with your question.
Speaker 4: Thanks. Was the technology segment just timing or has something happened there that shifts the historical range up? So when it drops off here, your guidance is for it to come back down. But does it come back down within the normal range or has the range moved up here as well?
One was the technology segment, just timing or.
Something happened there that shifts the historical range up so when it drops off your guidance is for it to come back down but does it come back down within the normal range or is that range moved up here as well.
Speaker 5: Yeah, thank you for your question, John . Michael, you want to come on? Yeah, sure. Hey, John . So, listen, the technology business had a great year overall. So, record, record, even all-time high licensing revenue in catalyst volumes.
Yes. Thank you for your question John .
Michael you want to sure Hey, John .
Listen the technology business had a great year overall so record.
Record EBITDA, all time high licensing revenue and catalyst volumes.
Speaker 5: You know primarily driven by Asia. You're right. So Q4 did exceed even our expectations There were a number of licenses that we were expecting to book in the first quarter that got done in the fourth quarter So you shouldn't expect that trend to continue
Primarily driven by Asia.
Right. So Q4 did exceed even our expectations. There were a number of licenses that were expecting to book in the first quarter that got done in the fourth quarter. So you shouldnt expect that trend to continue.
Speaker 5: And it's kind of our expectation that the first quarter of this year should look a lot like the first quarter of last year.
And it's kind of our expectation that the first quarter of this year should look a lot like the first quarter of last year, but it is it is it is a great business, it's kind of like a razor blade business right. So you sell licenses and then you continue to sell catalysts for a long long time at great profits.
Speaker 5: But it is a great business. It's kind of like a razor blade business, right? So you sell licenses and then you can tend you to sell catalysts for a long, long time at great profits.
Thank you.
Speaker 3: Our next question comes from the line of Hassan Ahmed with Alembics Global.
Our next question comes from the line of Hassan Ahmed with Alembic Global. Please proceed with your question.
Speaker 6: Morning, Ken. You know, wanted to revisit net and sort of pricing dynamics in polyethylene, just wanted to get a bit more granular.
Good morning, Ken.
Wanted to revisit near term sort of pricing dynamics in polyethylene just wanted to get a bit more granular.
Speaker 6: uh... look i mean we know for for Q1 roughly you know call it around eight cents a pound worth of price spikes on the table uh... and you know you guys are sort of pointed out that around uh... fifteen percent of u.s. capacity uh... you know is undergoing maintenance in Q1 so obviously that supportive my question really is that uh... you know i mean with roughly eight million tons of polyethylene capacity expected to come online this year i mean...
Look I mean, we know for Q1 roughly call it round incentive bound with the price hikes on the table.
You guys sort of pointed out that around <unk>.
15% of U S capacity.
Undergoing maintenance in Q1, so obviously that supportive my question really is that.
I mean, with roughly 8 million tons of polyethylene capacity expected to come online this year.
<unk>.
Speaker 6: you know good there be a situation where it's a strong first half and then we sort of go down a cliff you know in the back half of the year in terms of pricing
Could there be a situation, where it's a strong first half and then we sort of go down a cliff in the back half of the year.
The pricing and.
Speaker 6: and and you know just parlaying that with the demand side uh... look i mean if all of that eight million tons of capacity comes online this year for demand to keep pace with that
Barring that with the demand side.
Look I mean, if all of that 8 million tons of capacity comes online this year for demand to keep pace with that global.
Speaker 6: uh... global demand growth would need to be north of seven percent so are you guys
Global demand growth would need to be north of 7%. So are you guys sort of as.
Speaker 6: You know, as you talk about demand strength, are you looking for demand growth at those elevated levels?
As you talk about demand strength are you looking for demand growth at those elevated levels.
Good morning Hassan. Thanks, Thanks again for the question.
Speaker 1: Good morning, Hassan. Thanks again for the question. Listen, if you look historically...
Listen.
If you look historically yeah.
Speaker 1: Years following when we have not seen good global growth.
Years, following when we have not seen good global growth.
Speaker 1: especially coming out of a year like we did with 2020, you can see double digits growth rates even in China. And those types of growth years do typically occur once we see a snapback and they're hard to predict, but they have occurred in the past. So you can never bank on that, but my expectation.
Especially coming out of a year like we did with 2020.
You can see double digit growth rates, even in even in China.
And those those types of of growth.
Growth years, do typically occur once we see a snapback and they're hard to predict but they have they have occurred in the past. So you can never bank on that but but my expectation is that the 8 million tonnes there'll be a combination of things that you see all of the capacity is not going to be <unk>.
Speaker 1: is that the eight million tons will be a combination of things that you see all of the capacity is not going to be coming online you know exactly as we expect everybody understands that there are some constraints in china around that especially with the dual control limitations
<unk> online.
Exactly as we expect everybody understands that there are some constraints in China around that especially with the dual control limitations.
But the demand is going to come back and we have seen that in the past so.
A combination of some slower ramp up of the capacity coming on stronger demand I, certainly don't see a cliff in the second half of the year I see it completely the opposite to that right now but.
That's our view going forward.
Thank you.
Our next question comes from the line of P. J <unk> with Citi. Please proceed with your question.
Speaker 7: hey good morning can uh... just couple of questions first on there have been some news that comb on our availability like hexin is been in short supply uh... is that impacting production for the industry and for you and when you think you'll normalize that and then you know i think uh... last quarter you guys are talked about
Hey, good morning, Ken.
Just a couple of questions first on there have been some news that comonomer availability like <unk> has been in short supply.
Is that impacting production for the industry and for you and when do you think you'll normalize that.
And then I think.
Last quarter, you guys had talked about.
Speaker 7: reducing your scope one and scope two emissions by 30% by 2030 how much capital spending do you think you need to have in order to achieve that? Thank you.
Reducing your scope, one and scope two emissions by 30% by 2030.
Capital spending do you think you need to have in order to achieve that thank you.
Thank you P J and good morning.
Speaker 1: Yes, so there is there is a shortage of of hexane in the market
Yes. So there is there is a shortage of vaccine in the market and that that combined with downtime at some of the linear low plants.
Speaker 1: And that combined with downtime at some of the linear low plants, both in the US and in Europe , has tightened that market pretty significantly. Now, I'll tell you that we are not having any constraints on hexing with our linear low business. So that's good news. But for the industry, yes, there is tightness in that market. And I expect that that's going to continue in the short term.
Both in the U S and in Europe has tightened that market pretty significantly now I will tell you that we are not having any constraints on hexane with with our linear low business. So that's good news, but for the industry. Yes. There is there is tightness in that market.
And I expect that that's going to continue in the short term now.
Speaker 1: Now, going back to your question around our targets for scope one and scope two reductions that we have announced. You know, in the next few years, we'll be able to accommodate.
Now going back to your question around our targets for scope, one and scope two reductions that we have announced.
And the next few years, we'll be able to accommodate.
Speaker 1: all of all of the things that we're looking at with our two billion dollar capital
All of all of the things that we're looking at with our $2 billion capital spending.
Speaker 1: Our focus really in the next few years is going to be capturing the low hanging fruit, really to make the first significant steps in the process of ramping up to the target in 2030. And that's going to include things like, you know, improved energy efficiency and some emission reduction programs that are sites that really require little or no investments.
Our focus really in the next few years is going to be capturing the low hanging fruit.
Really to make the first significant steps in the in the process of ramping up to the target in 2030 and Thats going to include things like improved energy efficiency and some some emission reduction programs that are sites that really require little or no investment.
Speaker 1: You know, another low capital enabler for our carbon reduction targets is also going to be the increased utilization of renewable energy. So, you know, we expect that within the next few years, the amount of capital that we've guided to the $2 billion is going to be adequate for us to be able to...
Another another low capital enabler for for our carbon reduction targets is also going to be the increased utilization of our renewable energy. So we expect that within the next few years the amount of capital that we've guided to the $2 billion is going to be adequate for us to be able to.
Speaker 1: to get started on meeting these commitments. And then we'll be identifying projects and developing detailed plans.
To get started on meeting these commitments and then we will be identifying projects and developing detailed plans.
Speaker 1: to achieve the uh... the full target in the second half of the decade and and that's likely to result in some increased capital uh... but we'll have more to communicate on that later
To achieve the full target in the second half of the decade and Thats likely to result in some increased capital, but we will have more to communicate on that later.
Thank you.
Speaker 4: Thank you. Our next question comes from the line of David Beglider with Deutsche Bank. Please proceed with your question. Thank you. Good morning. Ken and Michael, if you use Discuss, Oxy fuels how, what was the earnings decline in 2021? What are you expecting for ramp up? But we turn back to some higher notes.
Our next question comes from the line of David Begleiter with Deutsche Bank. Please proceed with your question. Thank you good morning.
Ken or Michael can you just discuss oxy fuels, how what was the earnings decline in 2021, and what are you expecting for ramp up return back to some higher normal high levels of profitability in 2022.
Sure, David and I'll start and then I'll hand, it over to Michael let him comment a little bit oxy fuels, we had especially in the fourth quarter. We had we had lower volumes, we had significantly lower volumes and margin challenges with.
Speaker 1: Sure David, I'll start and I'll hand it over to Michael, let him comment a little bit. You know, off the fuels we had, especially in the fourth quarter, we had lower volumes, we had significantly lower volumes, and margin challenges with...
Speaker 1: with buting feed stock prices running up. We are seeing that improving coming into the first.
With butane feedstock prices running up we are seeing that.
Improving coming into the first quarter. So we will see we will see the volumes coming back and some relief with the butane feedstock pricing Michael I don't know if you want to add something to that.
Speaker 1: So we will see the volumes coming back and some relief with the butane feedstock price.
Speaker 5: Michael, I don't know if you want to add something to that. No, I mean, just a, maybe just a couple of other comments around the I&D business for the quarter and around OxyFuels. So don't forget in the quarter itself, there was a $95 million.
Maybe just a couple of other comments.
Around the <unk> business for the quarter and around Oxy fuels. So don't forget in the quarter itself, there was a $95 million.
Speaker 5: LIFO charge, which obviously will not be there in the first quarter of this year. And then maybe to put some numbers around kind of the feedstock drag in the quarter.
LIFO charge, which obviously will not be there in the first quarter of this year and then maybe to put some numbers around kind of the feed feedstock drag in the quarter with an oxy fuels there was about $85 million. So it was pretty significant.
Speaker 5: with an oxypules, it was about $85 million dollars. So it was pretty significant related to butane. And as Ken said, butane prices have already started to ease.
Related to butane and as Ken said.
<unk> prices have already started to ease off and it's our expectation as we move through the year that that's going to continue and then maybe one other thing I'd just point out about this business and this business is kind of.
Speaker 5: And it's our expectation as we move through the year that that's going to continue.
Speaker 5: And then maybe one other thing I'd just point out about this business, I mean, this business is kind of the Carl Malone or kind of male person of chemical businesses. It has a long track record, if you look back over the last decade, of earning kind of $400 million plus EBITDA. So go back and look over the last 10 years. We're confident it's going to get back to its historic earning power.
Carmela, Carl Malone or kind of male person.
Chemical businesses. It has a long track record if you look back over the last decade of earning kind of 400 billion plus EBITDA. So go back and look over the last 10 years, we're confident it's going to get back to its historic earning power.
Speaker 3: Thank you. Our next question comes from the line of Steve Richardson with Evercore ISI. Please proceed with your question.
Thank you.
Our next question comes from the line of Steve Richardson with Evercore ISI. Please proceed with your question.
Speaker 8: Hello, hi, this is Sean on for Kishon on for Steve To end the last few weeks you've seen a real lineup
Hello, Hi, this is Shawn on for Sean Reilly on for Steve.
So in the last few weeks, you've seen a real runup in Brent prices and also in Nat gas. So I'm just wondering what are your views on the possible tailwind might see widening of oil gas ratio.
Speaker 8: Brent prices and also on that gas. So I was just wondering what are your views on the possible tailwind we might see in a rewiring of the oil-gas ratio?
Speaker 8: if you know we see a supply response and it get negative.
We see a supply response in the Nat gas side.
Speaker 1: Sure. Hi, Sean. You know, we definitely see going forward the oil-to-gas ratio being favorable for our position in the U.S. markets. The high oil prices is certainly going to continue to pressure margins in Asia and Europe . But overall, net-net, we are expecting to see a continued favorable oil-to-gas ratio.
Sure Hi, Sean.
We definitely see going forward, the oil to gas ratio being favorable for our position.
In the U S markets.
High oil prices is certainly going to continue to pressure.
Margins in Asia, and Europe , but overall net net we are expecting to see a continued favorable oil to gas ratio.
In Asia, it's really tight Sean I mean, the spread between naphtha and polyethylene is like 200 $300 per ton. That's historic lows. It just can't stay there. So oil is going to pressure polyethylene prices upwards in Asia and that's good for us.
Speaker 2: Yeah, in Asia, it's really tight, Sean. I mean, the spread between naphtha and polyethylene is like $200, $300 per ton. That's historic lows. It just can't stay there. So oil is going to pressure polyethylene prices upward in Asia, and that's good.
Speaker 3: Thank you. Our next question comes from the line of Matthew Blair with Tudor Pickering Holt. Please proceed with your question.
Thank you.
Our next question comes from the line of Matthew Blair with Tudor Pickering Holt. Please proceed with your question.
Hi, Thanks, Good morning, maybe sticking on the feedstocks do you have any.
Speaker 9: Thanks. Good morning. Maybe sticking on the feedstocks. You have any thoughts on overall ethane availability? We've seen ethane premium to natural gas. Move out to about 10 cents. I think last year it's closer to 5 cents. And maybe that's a function of some new plants starting up. But what's your outlook on this going forward?
Your thoughts on overall ethane availability, we've seen ethane premiums natural gas move outs about 10.
Last year it was closer to five.
And then maybe that's a function of some new plants, starting up but what's your outlook on this going forward.
Good morning, Matthew Thank you for your question well listen.
Speaker 1: You know, ethane inventories are still healthy and production is improving, especially in the Permian and the Bakken. So, you know, even with the new crackers coming online, there's there's still excess ethane that's being rejected. And as production recovers and natural gas prices normalize, I do expect that ethane is going to remain the the preferred feedstock.
Ethane inventories are still healthy and production is improving.
Especially in the Permian and the Bakken.
Even with the new crackers coming online. There is there is still excess ethane that's being rejected and as production recovers in natural gas prices normalize I do expect that ethane is going to remain the preferred feedstock I'll just add to that ethane rejection is only decreased slightly.
Speaker 1: I'll just add, too, that ethane rejection has only decreased slightly, and still is about 800,000 barrels a day, and with recovery having increased, there's really plenty of supply available.
And still has about 800000 barrels a day in and where the recovery having increased theres really plenty of supply available.
Thank you.
Speaker 3: Thank you. I am showing that there are no further questions. I will turn it back to Mr. Lane for closing comments.
Feeling that there are no further questions I will turn it back to Mr. Laney for closing comments.
Okay. So listen thank you again for all the thoughtful questions.
Speaker 1: Okay, so listen, thank you again for all the thoughtful questions. Just before we close, I want to emphasize that there are strategy remains unchanged. We've got great momentum and we're going to continue focusing on safety, operational excellence as well as our discipline approach to capital allocation.
Just before we close I want to emphasize that our strategy remains unchanged. We've got great momentum and we're going to continue focusing on safety operational excellence as well as our disciplined approach to capital allocation.
So thank you very much for your interest in Lyondellbasell and we look forward to updating you on the progress at the end of April have a great weekend and stay safe.
Speaker 1: So thank you very much for your interest in Lyondell Bazell, and we look forward to updating you on the progress at the end of April . Have a great weekend and stay safe.
This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation and have a wonderful day.
Speaker 3: This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation and have a wonderful day.