Q2 2024 LyondellBasell Industries NV Earnings Call

Hello and welcome to the LyondellBasell teleconference.

Operator: The request of LyondellBasell, this conference is being recorded for instant replay purposes. Following today's presentation, we will conduct a questioning-answer session.

Operator: 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 Investment Relations. Mr. Kinney, you may begin.

Speaker Change: At the request of LyondellBasell, 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 Investment Relations. Sir, you may begin.

David Kinney: I would now like to turn the conference over to Mr. David Kinney, ahead of it if that's a relationship. Sure, you may begin.

David Kinney: Thank you, operator, and welcome, everyone, to today's call. Before we begin the discussion, I would like to point out that a slide presentation accompanies the call and is available on our website at www.lyondellbasell.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, forward-looking statements are subject to significant risk and uncertainty.

David Kinney: Thank you, operator, and welcome everyone to today's call.

David Kinney: We encourage you to learn more about the factors that can 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. Comments made on this call will be regarding our underlying business results using non-GAAP financial measures, such as EBITDA and earnings per share, excluding identified items. 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.

David Kinney: Before we begin this discussion, I would like to point out that a slide presentation and a company called and is available on our website at www.lyandellbasell.com slash investor relations. Today, we will be discussing our business results while making references to some forward-looking statements and non-GAAP financial measures. We believe before we look at statements are based upon reasonable assumptions and the alternative measures are useful to investors. Nonetheless, before we're looking statements, our subject is significant risk and uncertainty. We encourage you to learn more about the factors that can lead our actual results to differ by reviewing the cautionary statements and the presentation slides and our regulatory filings, which are also available on our Investor Relations website.

David Kinney: Thank you, Operator, and welcome everyone to today's call. Before we begin the discussion, I would like to point out that a slide presentation accompanies the call and is available on our website at www.LyondellBasell.com.

Speaker Change: Today we will be discussing our business results while making reference to some forward-looking statements and non-GAAP financial measures.

David Kinney: We believe the forward-looking statements are based upon reasonable assumptions and the alternative measures are useful to investors.

Speaker Change: Nonetheless, the forward-looking statements are subject to significant risk and uncertainty. We 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.

David Kinney: Comments made on this call will be in regard to our underlying business results using non-GAAP financial measures such as EBITDA and their needs per share excluding identified items. Additional documents on our investor website provide reconciliation of non-GAAP financial measures to GAAP financial measures, together with other disclosures including the earnings release and our business results discussion.

Speaker Change: Comments made on this call will be in regard to our underlying business results using non-GAAP financial measures, such as EBITDA and earnings per share, excluding identified items.

David Kinney: 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.

David Kinney: Joining today's call will be Peter Vanacker, LyondellBasell's Chief Executive Officer, our CFO, Michael McMurray, Kim Foley, our Executive Vice President of Global Olefins and Polyolefins and Refining, Aaron Ledet, our EVP of Intermediates and Derivatives, and Torkel Rhenman, our EVP of Advanced Polymer Solutions. During today's We will also discuss current market dynamics and our near-term outlook. With that being said, I would now like to turn the call over to Peter.

David Kinney: Joining today's call will be Peter Bannicker, lined up a sales chief executive officer, our CFO, Michael McMurray, Kim Foley, our executive vice president of Global Olifins and Polly Olifins in our finding. Aaron LaDay, our EVP of Intermediates and Derivatives, and Torkel Rignment, our EVP of Advanced Polymer Solutions.

Speaker Change: Joining today's call will be Peter Vanacker, LyondellBasell's Chief Executive Officer, our CFO Michael McMurray,

Kim Foley: Kim Foley, our executive vice president of global olefins and polyolefins and refining.

Speaker Change: Aaron Ledet, our EVP of Intermediates and Derivatives, and Torkel Rhenman, our EVP of Advanced Polymer Solutions.

David Kinney: During today's call, we will focus on second quarter results as well as updates on our long-term strategy. We will also discuss current market dynamics in our near-term outlook.

Speaker Change: During today's call, we will focus on second quarter results as well as updates on our long-term strategy. We will also discuss current market dynamics and our near-term outlook. With that being said, I would now like to turn the call over to Peter.

Peter Vanacker: With that being said, I would now like to turn the call over to Peter. Thank you, Dave, and welcome to all of you. We appreciate you joining us today as we discuss our second quarter results. Yet again, our people did an excellent job navigating challenging market conditions whilst being laser focused on the execution of our strategy. Let's begin with slide three, and discuss our continued leadership in safety performance. LYB has a history of excellence in operational performance, with safety being a core part of our success. Going back to 2010, we have consistently delivered industry-leading safety results.

Peter Vanacker: Thank you, Dave, and welcome to all of you. We appreciate you joining us today as we discuss our second quarter results. Yet again, our people did an excellent job navigating challenging market conditions, whilst being laser focused on the execution of our strategy. Let's begin with slide three and discuss our continued leadership in safety performance. LYB has a history of excellence in operational performance, with safety being a core part of our success.

Peter: Thank you Dave and welcome to all of you. We appreciate you joining us today as we discuss our second quarter results.

Peter: Yet again, our people did an excellent job navigating challenging market conditions whilst being laser focused on the execution of our strategy.

Peter: Let's begin with slide 3 and discuss our continued leadership in safety performance.

Speaker Change: LYB has a history of excellence in operational performance, with safety being a core part of our success.

Peter Vanacker: Going back to 2010, we have consistently delivered industry-leading safety results. But more importantly, we have made significant improvements towards our goal to operate safely each day with zero incidents, injuries, or accidents. LYB's June year-to-date total recordable incident rate for employees and contractors is 0.13.

Speaker Change: Going back to 2010, we have consistently delivered industry-leading safety results.

Peter Vanacker: But more importantly, we have made significant improvements towards our goal to operate safely each day with zero injuries or accidents. LYB's June year-to-date total recordable incident rate for employees and contractors is 0.13. For comparison, in 2010, our incident rate was 0.42, more than three times higher than today. Safety is foundational to what we do. Getting it right ensures the well-being of our workforce, but also benefits our operational excellence performance and financial return. Our team has demonstrated outstanding focus to reach this point, and we remain committed to further improvements.

David Kinney: But more importantly, we have made significant improvements towards our goal to operate safely each day with zero incidents, injuries or accidents.

David Kinney: LYB's June year-to-date total recordable incident rate for employees and contractors is 0.13.

Peter Vanacker: For comparison, in 2010, our incident rate was 0.42, more than three times higher than today. Safety is foundational to what we do. Getting it right ensures the well-being of our workforce but also benefits our operational excellence performance and financial return. Our team has demonstrated outstanding focus to reach this point, and we remain committed to further improvement. Today, I'm excited to discuss our actions to deliver resilient results as well as the excellent progress on our long-term strategy for LYB.

David Kinney: For comparison, in 2010, our incident rate was 0.42, more than three times higher than today.

David Kinney: Safety is foundational to what we do.

Speaker Change: Getting it right ensures the well-being of our workforce, but also benefits our operational excellence performance and financial returns.

David Kinney: Our team has demonstrated outstanding focus to reach this point and we remain committed to further improvements.

Peter Vanacker: Today I'm excited to discuss our actions to deliver resilient results, as well as the excellent progress on our long-term strategy for LYB. Please turn to slide 4 as we briefly review the quarter. Second quarter underlying business results improved by nearly 30% over the first quarter, driven by increased volumes from our operations. North American demand for polyolophins continues to improve, while feedstock and energy costs remain low. Over European, polyolophins and polyolophins results improved due to our flexibility to increase our utilization of advantaged LPG feedstocks. Within intermediates and derivatives, the benefits from LYB's expanded PO-TBA capacity are clearly seen in our records quarterly oxyfuel sales volumes.

Speaker Change: Today, I'm excited to discuss our actions to deliver resilient results, as well as the excellent progress on our long-term strategy for LYB.

Peter Vanacker: Please turn to slide four as we briefly review the quarter. Second quarter underlying business results improved by nearly 30% over the first quarter, driven by increased volumes from our operations. North American demand for polyolefins continues to improve, while feedstock and energy costs remain low. Our European olefins and polyolefin results improved due to our flexibility to increase our utilization of advantaged LPG feedstock. Within intermediates and derivatives, the benefits from LYB's expanded POTBA capacity are clearly seen in our record quarterly oxyfuel sales volumes. Earnings were $2.24 per share, with EBITDA of 1.4 billion dollars.

Speaker Change: Please turn to slide 4 as we briefly review the quarter.

David Kinney: Second quarter underlying business results improved by nearly 30% over the first quarter, driven by increased volumes from our operations.

Speaker Change: North American demand for polyolefins continues to improve, while feedstock and energy costs remain low.

Speaker Change: Our European olefins and polyolefins results improved due to our flexibility to increase our utilization of advantaged LPG feedstocks.

Speaker Change: Within intermediates and derivatives, the benefits from LYB's expanded POTBA capacity are clearly seen in our record quarterly oxyfuel sales volumes.

Peter Vanacker: Earnings were $2.24 per share, with EBITDA of $1.4 billion. LYB generated an impressive $1.3 billion in cash from operating activities. Our strong cash generation provided support for the disciplined execution of our strategy.

Speaker Change: Earnings were $2.24 per share, with EBITDA of $1.4 billion. LYB generated an impressive $1.3 billion in cash from operating activities.

Peter Vanacker: LYB generated an impressive 1.3 billion dollars in cash from operating activities. Our strong cash generation provided support for the disciplined execution of our strategy. Let's turn to slide 5 and review the three-pillar strategy that is driving our focus on strategic growth and long-term value creation. As we described during fourth quarter earnings, we are making good progress on our goal to add $3 billion in incremental normalized EBITDA by 2027, with nearly one third of that target unlocked during 2023.

David Kinney: Our strong cash generation provided support for the disciplined execution of our strategy.

Peter Vanacker: Let's turn to slide 5 and review the three-pillar strategy that is driving our focus on strategic growth and long-term value creation. As we described during fourth quarter earnings, we are making good progress on our goal to add $3 billion in incremental, normalized EBITDA by 2027. We have nearly one-third of that target unlocked during 2023. Last quarter, we took a deeper look into how we are building a profitable circular and low-carbon solutions business. Today, we will describe the work underway to grow and upgrade our core businesses. When we talk about growing and upgrading our core, we are very clear about the criteria we use to define businesses that are core to our portfolio.

Speaker Change: Let's turn to slide 5 and review the 3-pillar strategy that is driving our focus on strategic growth and long-term value creation.

Speaker Change: As we described during fourth quarter earnings, we are making good progress on our goal to add $3 billion in incremental normalized EBITDA by 2027, with nearly one-third of that target unlocked during 2023.

Speaker Change: Last quarter, we took a deeper look into how we are building a profitable circular and low-carbon solutions business. Today, we will describe the work underway to grow and upgrade our core businesses.

Peter Vanacker: Last quarter, we took a deeper look into how we are building a profitable circular and low carbon solutions business. Today, we will describe the work underway to grow and upgrade our core business. When we talk about growing and upgrading our core business, we are very clear about the criteria we use to define businesses that are core to our portfolio. Moving to slide six, let's review these criteria.

Speaker Change: When we talk about growing and upgrading our core, we are very clear about the criteria we use to define businesses that are core to our portfolio.

Peter Vanacker: Moving to slide 6, let's review these criteria. We are working hard to build up a portfolio that is focused on leading market positions and growing end markets that deliver attractive returns well above our cost of capital and leverages on access to advantaged, circular and renewable feedstocks. You will see that once we have executed this transformation, we will be a much more profitable, focused, and streamlined company. Our decisions on investing in organic growth or disciplined M&A are grounded by our commitments to pursue attractive returns well above our cost of capital. Also, we are leveraging LYB's technology and global market positions to increase our access to advantage feedstocks typically found in North America and the Middle East.

Speaker Change: Moving to slide six, let's review these criteria.

Peter Vanacker: We're working hard to build up a portfolio that is focused on leading market positions and growing end markets that deliver attractive returns well above our cost of capital and leverages access to advantaged, circular, and renewable feedstocks. You will see that once we have executed this transformation, we will be a much more profitable, focused, and streamlined company. Our decisions on investing in organic growth or disciplined M&A are grounded in our commitment to pursue attractive returns well above our cost of capital.

Speaker Change: We are working hard to build up a portfolio that is focused on leading market positions and growing end markets that deliver attractive returns well above our cost of capital.

Speaker Change: and leverages on access to advantaged, circular and renewable feedstocks.

Speaker Change: You will see that once we have executed this transformation, we will be a much more profitable, focused and streamlined company.

Speaker Change: Our decisions on investing in organic growth or disciplined M&A are grounded by our commitment to pursue attractive returns well above our cost of capital.

Peter Vanacker: We are leveraging LYB's technology and global market positions to increase our access to advantaged feedstocks, typically found in North America and the Middle East. And finally, as we covered last quarter, we're making great progress in building a profitable circular and low carbon solutions business. Historically, we defined advantaged feedstocks as low-cost NGLs in North America and the Middle East.

Speaker Change: We are leveraging LYB's technology and global market positions to increase our access to advantaged feedstocks typically found in North America and the Middle East.

Peter Vanacker: And finally, as we covered last quarter, we're making great progress in building a profitable circular and low carbon solutions business. Historically, we've defined advantage feedstocks as low-cost NGOs in North America. And the Middle East. As we grow our CLCS business, we are expanding this definition to include favorable positions for circular and renewable feedstocks.

Speaker Change: And finally, as we covered last quarter, we're making great progress in building a profitable circular and low-carbon solutions business.

Speaker Change: Historically, we've defined advantaged feedstocks as low-cost NGLs in North America and the Middle East.

Peter Vanacker: As we grow our CLCS business, we are expanding this definition to include favorable positions for circular and renewable feedstock. As you know, we have implemented a lot of actions to grow and upgrade our portfolio in parallel with great focus and speed. May was again a busy month for us with the completion of the sale of our EO and D business and the acquisition of our stake in the Netbet joint venture.

Speaker Change: As we grow our CLCS business, we are expanding this definition to include favorable positions for circular and renewable feedstocks.

Peter Vanacker: As you know, we have implemented a lot of actions to grow and upgrade our portfolio in parallel with great focus and speed. May was again a busy month for us with the completion of the sale of our EO and D business and the acquisition of our stake in the net bet joint venture. Importantly, we also announced a strategic review of some of our European assets that will reposition our footprints for future sustainable success.

Speaker Change: As you know, we have implemented a lot of actions to grow and upgrade our portfolio in parallel with great focus and speed.

Speaker Change: May was again a busy month for us, with the completion of the sale of our EO&D business and the acquisition of our stake in the NetBet joint venture.

Peter Vanacker: Importantly, we also announced a strategic review of some of our European assets that will reposition our footprint for future sustainable success. On slide 7, let me highlight our goals for reshaping LYB by simultaneously growing and upgrading our core business. We are adding value through growth investments in, for example, our POTBA capacity and our formation of the Netbet Joint Venture in Saudi Arabia. We are also continuously evaluating projects and expect to find more opportunities that will be accretive for LYB.

Speaker Change: Importantly, we also announced a strategic review of some of our European assets that will reposition our footprints for future sustainable success.

Peter Vanacker: On slide seven, let me highlight our goals for reshaping LYB by simultaneously growing and upgrading our core businesses. We are adding value through growth investments in, for example, our POTBA capacity and our formation of the Net Bet joint venture in Saudi Arabia. We are also continuously evaluating projects and expect to find more opportunities that will be accretive for LYB. Our value enhanced for program is also delivering growth through incremental production capacity and improved margins. LYB's VEP is not a one-time cost-cutting initiative. Our VEP is our new way of working focused on unlocking value and is becoming embedded in LYB's culture.

Speaker Change: On slide 7, let me highlight our goals for reshaping LYB by simultaneously growing and upgrading our core businesses.

Speaker Change: We are adding value through growth investments in, for example, our POTBA capacity and our formation of the Netbet Joint Venture in Saudi Arabia.

Speaker Change: We are also continuously evaluating projects and expect to find more opportunities that will be accretive for LYB.

Peter Vanacker: Our Value Enhancement Program is also delivering growth through incremental production capacity and improved margins. LYB's VEP is not a one-time cost-cutting initiative. Our VEP is our new way of working, focused on unlocking value, and is becoming embedded in LYB's culture. Michael will share some more details on our VEP progress in a few moments.

Speaker Change: Our Value Enhancement Program is also delivering growth through incremental production capacity and improved margins.

Speaker Change: LYB's VEP is not a one-time cost-cutting initiative. Our VEP is our new way of working, focused on unlocking value and is becoming embedded in LYB's culture.

Peter Vanacker: Michael will share some more details on our VEP progress in a few moments. Our motivation for upgrading the portfolio is illustrated on the right side of slide seven. In some cases, upgrades are accomplished by divesting or exiting non-core businesses. One example is the user refinery, a capital-intensive asset that has historically only delivered brief periods of profitability. After we shut down the refinery by no later than the end of the first quarter 2025, LYB's average EBITDA margin will actually expand by about 4 percentage points. Our divested Italy noxite and derivatives business did not provide LYB with a leading position and did not fit our criteria for growth.

Speaker Change: Michael will share some more details on our VEP progress in a few moments.

Peter Vanacker: Our motivation for upgrading the portfolio is illustrated on the right side of slide 7. In some cases, upgrades are accomplished by divesting or exiting non-core businesses. One example is the Houston Refinery, a capital-intensive asset that has historically only delivered brief periods of profitability. After we shut down the refinery by no later than the end of the first quarter of 2025, LYB's average EBITDA margin will actually expand by about 4 percentage points. Our divested ethylene oxide and derivatives business did not provide LYB with a leading position and did not fit our criteria for growth. Simply put, we were not the best owners.

Michael: Our motivation for upgrading the portfolio is illustrated on the right side of slide 7. In some cases, upgrades are accomplished by divesting or exiting non-core businesses.

Michael McMurray: One example is the Houston refinery, a capital-intensive asset that has historically only delivered brief periods of profitability.

Speaker Change: After we shut down the refinery by no later than the end of the first quarter 2025, LYB's average EBITDA margin will actually expand by about 4 percentage points.

Michael: Our divested ethylene oxide and derivatives business did not provide LYB with a leading position and did not fit our criteria for growth. Simply put, we were not the best owners.

Peter Vanacker: Simply put, we were not the best owners. The strategic review of our European assets will position our footprints for a sustainable future.

Peter Vanacker: The strategic review of our European assets will position our footprints for a sustainable future. All of these moves aim toward building a stronger, more focused, and more profitable business portfolio for LYB. Let's roll into our European strategic review on slide 8. We are undertaking this review to position LYB's regional footprint for future markets. Our goal is to reshape our European business portfolio in alignment with our long-term strategy for lasting success. Europe remains a core market for LYB.

Michael: The strategic review of our European assets will position our footprints for a sustainable future.

Peter Vanacker: All of these moves aim toward building a stronger, more focused, and more profitable business portfolio for LYB.

Michael: All of these moves aim toward building a stronger, more focused, and more profitable business portfolio for LYB.

Peter Vanacker: Let's reel into our European strategic review on slide 8. We are undertaking this review to position LYB's regional footprint for future markets. Our goal is to reshape our European business portfolio in alignment with our long-term strategy for lasting success. Europe remains a core market for LYB. Our analysis determines that the sixth asset listed on the top left in their current configuration does not meet LYB's criteria for a core business. At this point, all options are on the table. Just like our Italian oxide and derivatives business, these assets could well have a strategic fit and profitable future with another owner.

Speaker Change: Let's roll into our European strategic review on slide 8.

Speaker Change: We are undertaking this review to position LYB's regional footprint for future markets.

Speaker Change: Our goal is to reshape our European business portfolio in alignment with our long-term strategy for lasting success.

Speaker Change: Europe remains a core market for LYB.

Peter Vanacker: Our analysis determines that the six assets listed on the top left in their current configuration do not meet LYB's criteria for a core business. At this point, all options are on the table. Just like our ethylene oxide and derivatives business, these assets could well have a strategic fit and profitable future with another owner. The divestiture of the assets as a group or separately is a possibility. Or we may determine that, like our Houston refinery, rationalization is the best option for some sites.

Speaker Change: Our analysis determines that the six assets listed on the top left in their current configuration do not meet LYB's criteria for a core business.

Speaker Change: At this point, all options are on the table.

Speaker Change: Just like our ethylene oxide and derivatives business, these assets could well have a strategic fit and profitable future with another owner.

Peter Vanacker: The investiture of the assets as a group or separately is a possibility. Or we may determine that, like our user refinery, rationalization is the best option for some sites. While it is too early to speculate on the outcomes, the impact on the company's global portfolio is relatively limited. As you can glean from the chart, the assets subject to review only represent about 13% of our global capacity for these product lines. LYB will continue to have a strong European presence. An IND, our core European assets utilize LYB's world-leading PO-TBA technology. In Germany, we are investing near Cologne to build our first circular and renewable solutions hub.

Speaker Change: The investiture of the assets as a group or separately is a possibility.

Speaker Change: Or we may determine that, like our Houston refinery, rationalization is the best option for some sites.

Peter Vanacker: While it is too early to speculate on the outcomes, the impact on the company's global portfolio is relatively limited, as you can glean from the chart. The assets subject to review only represent about 13% of our global capacity for these product lines. LYB will continue to have a strong European presence, and IND, our core European assets, utilize LYB's world-leading POTVA technology. In Germany, we are investing near Cologne to build our first circular and renewable solutions, and our technology segment will maintain a strong presence in Italy and Germany.

Speaker Change: While it is too early to speculate on the outcomes, the impact on the company's global portfolio is relatively limited.

Speaker Change: As you can glean from the chart, the assets subject to review only represent about 13% of our global capacity for these product lines.

Speaker Change: LYB will continue to have a strong European presence.

Speaker Change: And IND, our core European assets, utilize LYB's world-leading POTBA technology. In Germany, we are investing near Cologne to build our first circular and renewable solutions hub.

Peter Vanacker: And our technology segments will maintain a strong presence in Italy and Germany. We will continue productive engagement with all relevant stakeholders at the impacted sites. This includes local governments, our business partners, potential buyers, and most importantly, our employees who continue to demonstrate high commitments to safe, reliable, and efficient operations despite the ongoing uncertainty. Our aim is to move swiftly to maximize value for LYB and all stakeholders.

Speaker Change: And our technology segment will maintain a strong presence in Italy and Germany.

Peter Vanacker: We will continue productive engagement with all relevant stakeholders at the impacted sites. This includes local governments, our business partners, potential buyers, and most importantly, our employees, who continue to demonstrate high commitment to safe, reliable, and efficient operations despite the ongoing uncertainty. Our aim is to move swiftly to maximize value for LYB and all stakeholders. With that said, let me turn the call over to Michael to discuss our financial results in more detail. Thank you.

Speaker Change: We will continue productive engagement with all relevant stakeholders at the impacted sites.

Speaker Change: This includes local governments, our business partners, potential buyers, and most importantly, our employees who continue to demonstrate high commitment to safe, reliable, and efficient operations despite the ongoing uncertainty.

Speaker Change: Our aim is to move swiftly to maximize value for LYB and all stakeholders.

Michael McMurray: With that, let me turn the call over to Michael to discuss our financial results in more detail. Thank you, Peter, and good morning, everyone. Please turn to slide nine and let me start by discussing our resilient cash generation. Over the past year, LYB generated $4.4 billion of cash from operating activities. Our team converted EBITDA into cash at an impressive 95% cash conversion rate during the last 12 months. As a result, we were able to return almost $1.8 billion to shareholders through dividends and share repurchases. This represents nearly 70% of our $2.6 billion of free cash flow, in line with our long-term target.

Speaker Change: With that, let me turn the call over to Michael to discuss our financial results in more detail.

Michael McMurray: Thank you, Peter, and good morning, everyone. Please turn to slide 9 and let me start by discussing resilient cash generation. Over the past year, LyondellBasell generated $4.4 billion of cash from operating activities. Our team converted EBITDA into cash at an impressive 95% cash conversion rate over the last 12 months. As a result, we were able to return almost $1.8 billion to shareholders through dividends and share repurchases. This represents nearly 70 percent of our 2.6 billion dollars of free cash flow in line with our long-term target. At the end of the second quarter, our cash balance was $2.9 billion.

Michael McMurray: Thank you, Peter, and good morning, everyone. Please turn to slide 9 and let me start by discussing our resilient cash generation.

Michael McMurray: Over the past year, LyondellBasell generated $4.4 billion of cash from operating activities.

Speaker Change: Our team converted EBITDA into cash at an impressive 95% cash conversion rate during the last 12 months.

Speaker Change: As a result, we were able to return almost $1.8 billion to shareholders through dividends and share repurchases. This represents nearly 70% of our $2.6 billion of free cash flow, in line with our long-term target.

Michael McMurray: At the end of the second quarter, our cash balance was $2.9 billion.

Speaker Change: At the end of the second quarter, our cash balance was $2.9 billion.

Michael McMurray: Let's continue with slide ten and review the details of our second quarter capital allocation. As Peter mentioned, we generated an impressive $1.3 billion of cash from operating activities. During the quarter, we returned $513 million through dividends and share repurchases while funding $484 million of capital investments. In May, we increased our quarterly dividend by 7% to $1.34 per share, continuing our track record of providing a secure, growing, and competitive dividend for our shareholders. Our team is committed to balanced and disciplined capital allocation as part of our long-term strategy. During the quarter, we divested the Ataline Oxide and Rivatives business for $700 million.

Michael McMurray: Let's continue with slide 10 and review the details of our second quarter capital allocation. As Peter mentioned, we generated an impressive $1.3 billion of cash from operating activities. During the quarter, we returned $513 million through dividends and share repurchases while funding $484 million of capital investments. In May, we increased our quarterly dividend by 7% to $1.34 per share, continuing our track record of providing a secure, growing, and competitive dividend for our shareholders. Our team is committed to balanced and disciplined capital allocation as part of our long-term strategy. During the quarter, we divested the ethylene oxide and derivatives business for $700 million.

Speaker Change: Let's continue with slide 10 and review the details of our second quarter capital allocation.

Speaker Change: As Peter mentioned, we generated an impressive $1.3 billion of cash from operating activities. During the quarter, we returned $513 million through dividends and share repurchases while funding $484 million of capital investment.

Peter Vanacker: In May, we increased our quarterly dividend by 7% to $1.34 per share, continuing our track record of providing a secure, growing, and competitive dividend for our shareholders.

Speaker Change: Our team is committed to balanced and disciplined capital allocation as part of our long-term strategy.

Speaker Change: During the quarter, we divested the ethylene oxide and derivatives business for $700 million. Within a few weeks, we invested approximately $500 million to acquire a 35% share of Natpet Integrated Polypropylene Joint Venture in Saudi Arabia.

Michael McMurray: Within a few weeks, we invested approximately $500 million to acquire a 35% share of Nat Pet Integrated Polypropylene Joint Venture in Saudi Arabia. We finished the second quarter with approximately $7 billion of available liquidity. In July, LYB successfully amended and extended the maturity of our revolving credit facility to 2029, while further strengthening our liquidity by increasing the size of the facility by $500 million to $3.75 billion.

Michael McMurray: Within a few weeks, we invested approximately $500 million to acquire a 35% share of Natpet Integrated Polypropylene Joint Venture in Saudi Arabia. We finished the second quarter with approximately $7 billion of available liquidity. In July, LYB successfully amended and extended the maturity of its revolving credit facility to 2029 while further strengthening its liquidity by increasing the size of the facility by $500 million to $3.75 billion.

Speaker Change: We finished the second quarter with approximately $7 billion of available liquidity.

Speaker Change: In July , LYB successfully amended and extended the maturity of our revolving credit facility to 2029, while further strengthening our liquidity by increasing the size of the facility by $500 million to $3.75 billion.

Michael McMurray: Let's continue with a brief update on our VEP progress on slide 11. The Value Enhancement Program is a highly successful and integral component of our long-term strategy. We are confident in our estimate that the VEP will contribute approximately $400 million to EBITDA in 2024. Our team is rapidly delivering value less than two years after first launching this program. To provide more detail on the shares progress, we have broken out contributions by business segment and category. As you might expect, the segment with the largest contribution is also our most profitable segment, OMP Americas, generating about $265 million of incremental value.

Michael McMurray: Let's continue with a brief update on our VEP progress on slide 11. The Value Enhancement Program is a highly successful and integral component of our long-term strategy. We are confident in our estimate that the VEP will contribute approximately $400 million to EBITDA in 2024.

Speaker Change: Let's continue with a brief update on our VEP progress on slide 11.

Speaker Change: The Value Enhancement Program is a highly successful and integral component of our long-term strategy.

Speaker Change: We are confident in our estimate that the VEP will contribute approximately $400 million to EBITDA in 2024. Our team is rapidly delivering value less than two years after first launching this program.

Michael McMurray: Our team is rapidly delivering value less than two years after first launching this program. To provide more detail on this year's progress, we have broken out contributions by business segment and category. As you might expect, the segment with the largest contribution is also our most profitable segment, O&P Americas, generating about $265 million of incremental value. In 2024, we anticipate approximately $280 million of benefit across the company from improved product mix and increased variable margin.

Speaker Change: To provide more detail on this year's progress, we have broken out contributions by business segment and category.

Speaker Change: As you might expect, the segment with the largest contribution is also our most profitable segment, O&P Americas, generating about $265 million of incremental value.

Michael McMurray: In 2024, we anticipate approximately $280 million of benefit across the company from improved product mix and increased variable margins. We anticipate about $95 million of benefit from higher volume driven by improving reliability and increased rates. While the Value Enhancement Program is primarily focused on increased value generation, the program has also identified opportunities to improve our leading fixed cost position. Overall, we estimate that lower fixed cost across our manufacturing and corporate functions will benefit our results by approximately $25 million this year. As Peter mentioned, LYB's VEP program is a new way of working and unlocking value that is becoming embedded as an evergreen process in our culture.

Speaker Change: In 2024, we anticipate approximately $280 million of benefit across the company from improved product mix and increased variable margins.

Michael McMurray: We anticipate about $95 million of benefit from higher volume driven by improved reliability and increased rates. While the Value Enhancement Program is primarily focused on increased value generation, the program has also identified opportunities to improve our leading fixed cost position. Overall, we estimate that lower fixed costs across our manufacturing and corporate functions will benefit our results by approximately $25 million this year. As Peter mentioned, LYB's VEP program is a new way of working and unlocking value that is becoming embedded as an evergreen process in our culture. Let's turn to slide 12, and I will provide a brief overview of the results for each of our segments.

Speaker Change: We anticipate about $95 million of benefit from higher volume, driven by improving reliability and increased rates.

Speaker Change: While the Value Enhancement Program is primarily focused on increased value generation, the program has also identified opportunities to improve our leading fixed cost position.

Speaker Change: Overall, we estimate that lower fixed costs across our manufacturing and corporate functions will benefit our results by approximately $25 million this year.

Speaker Change: As Peter mentioned, LYB's VEP program is a new way of working and unlocking value that is becoming embedded as an evergreen process in our culture.

Michael McMurray: Let's turn to slide 12, and I will provide a brief overview of the results of each of our segments. LYB's business portfolio delivered $1.4 billion of EBITDA during the second quarter, almost 30% higher than the prior quarter. The seasonal summer demand coupled with higher production from our asset base led to increased volumes; margins modestly improved across most of our businesses. In early July, Hurricane Burl impacted our operations across the U.S. Gulf Coast. LYB proactively shut down some of our assets ahead of the storm. Our prudent approach reduces the potential for damage to our assets and the surrounding community during adverse conditions.

Peter Vanacker: Let's turn to slide 12 and I will provide a brief overview of the results of each of our segments.

Michael McMurray: LYB's business portfolio delivered $1.4 billion of EBITDA during the second quarter, almost 30% higher than the prior quarter. Seasonal summer demand, coupled with higher production from our asset base, led to increased volumes. Margins modestly improved across most of our businesses. In early July, Hurricane Beryl impacted our operations across the U.S. Gulf Coast. LYB proactively shut down some of our assets ahead of the storm. Our prudent approach reduces the potential for damage to our assets and the surrounding community during adverse conditions. As a result, we did not experience any workplace injuries, and property damage was not material.

Speaker Change: LYB's business portfolio delivered $1.4 billion of EBITDA during the second quarter, almost 30% higher than the prior quarter.

Peter Vanacker: Seasonal summer demand coupled with higher production from our asset base led to increased volumes. Margins modestly improved across most of our businesses.

Peter Vanacker: In early July , Hurricane Beryl impacted our operations across the U.S. Gulf Coast.

Speaker Change: LYB proactively shut down some of our assets ahead of the storm. Our prudent approach reduces the potential for damage to our assets and the surrounding community during adverse conditions.

Michael McMurray: As a result, we did not experience any workplace injuries, and property damage was not material. Nonetheless, we estimate that storm-related downtime will impact third quarter EBITDAB by approximately $65 million, with approximately 75% in our O&P America segment.

Speaker Change: As a result, we did not experience any workplace injuries and property damage was not material.

Kim Foley: Nonetheless, we estimate that storm-related downtime will impact third quarter EBITDA by approximately $65 million, with approximately 75% in our O&P America segment. We have relatively modest levels of maintenance activity planned for the remainder of the year. In the appendix to this slide deck, we provide updated 2024 modeling guidance for planned maintenance impacts and other financial metrics. With a sharp focus on working capital, we continue to align our operating rates to meet market demand.

Speaker Change: Nonetheless, we estimate that storm-related downtime will impact third-quarter EBITDA by approximately $65 million, with approximately 75% in our O&P America segment.

Speaker Change: We have relatively modest levels of maintenance activity planned for the remainder of the year. In the appendix to this slide deck we provide updated 2024 modeling guidance for planned maintenance impacts and other financial metrics.

Michael McMurray: We did 2024 modeling guidance for planned maintenance impacts and other financial metrics. With a sharp focus on working capital, we continue to align our operating rates to meet market demand. During the third quarter, we expect operating rates of 85% for our North American olfins and polyulphins assets, 80% for our European olfins and polyulphins assets, and 75% for our intermediate and derivative assets.

Speaker Change: With a sharp focus on working capital, we continue to align our operating rates to meet market demand.

Kim Foley: During the third quarter, we expect operating rates of 85% for our North American olefins and polyolefin assets, 80% for our European olefins and polyolefin assets, and 75% for our intermediates and derivative assets. With that, I will turn the call over to Kim.

Speaker Change: During the third quarter, we expect operating rates of 85% for our North American olefins and polyolefin assets.

Kim Foley: 80% for our European olefins and polyolefin assets, and 75% for our intermediates and derivative assets. With that, I will turn the call over to Kim. Kim?

Kim Foley: With that, I will turn the call over to Kim. Thank you, Michael. Let's begin the segment discussions on slide 13 with the performance of the Olfins and Polyulphins America segment. During the second quarter, O&P America's EBITDAB was $670 million. Increased LYB production led to higher volumes and margins. We were pleased to see that integrated polyethylene margins were supported by modestly higher ethylene and polyethylene prices. By ethane and natural gas costs remain low. Demand for North American polyulphins is strengthening in 2024. With June, year-to-date industry polyethylene sales up by nearly 11% over the first half of 23.

Kim Foley: Let's begin the segment discussions on slide 13 with the performance of the Oliphans and Polyolefins America segment. During the second quarter, O&P America's EBITDA was $670 million.

Kim Foley: Thank you, Michael. Let's begin with strong customer relationships built over decades. In the third quarter, we anticipate continued seasonal demand strength.

Kim Foley: Increased LYB production led to higher volumes and margins. We were pleased to see that integrated polyethylene margins were supported by modestly higher ethylene and polyethylene prices, while ethane and natural gas costs remained low. Demand for North American polyolefins is strengthening in 2024, with June year-to-date industry polyethylene sales up by nearly 11% over the first half of 2023. Strong demand pull from both domestic and export markets is absorbing recent capacity expansions in the region. LYB is well positioned as the third largest polyethylene producer in North America with strong customer relationships built over decades in the third quarter. We anticipate continued seasonal demand strength.

Speaker Change: Low feedstock and energy costs are expected to persist, benefiting North American integrated polyolefin margins.

Speaker Change: Amid a backdrop of relatively high oil prices, the favorable oil-to-gas ratio provides an advantage to North American producers relative to oil-based production in other parts of the world.

Kim Foley: Despite disruptions from Hurricane Beryl in early July , the U.S. olefins and polyolefins markets remain well supplied.

Kim Foley: Strong demand pool from both domestic and export markets is absorbing recent capacity expansions in the region. LYB is well positioned as the third largest polyethylene producer in North America, with strong customer relationships built over decades. In the third quarter, we anticipate continued seasonal demand strength. Low feed stock and energy costs are expected to persist, benefiting North American integrated polyulphin margins. Amid a backdrop of relatively high oil prices, the favorable oil to gas ratio provides an advantage to North American producers relative to oil-based production in other parts of the world. Despite disruptions from Hurricane Burl in early July, the U.S.

Kim Foley: Nonetheless, the U.S. Gulf Coast hurricane season is still young, with potential for additional disruptions over the coming months.

Speaker Change: During the third quarter, we will remain focused on aligning our operating rates to serve domestic and export market demand, targeting 85% utilization.

Speaker Change: After a decade of unprecedented growth, North American polyolefins capacity additions have slowed down.

Kim Foley: Low feedstock and energy costs are expected to persist, benefiting North American integrated polyolefin margins. Amid a backdrop of relatively high oil prices, the favorable oil-to-gas ratio provides an advantage to North American producers relative to oil-based production in other parts of the world. Despite disruptions from Hurricane Beryl in early July, the U.S. Olpheins and Polyolpheins markets remain well supplied. Nonetheless, the U.S. Gulf Coast hurricane season is still young, with potential for additional disruptions over the coming months.

Speaker Change: Please turn to slide 14 as we review the changing outlook for our new supply.

Speaker Change: In the early 2010s, the advent of shale-based oil and gas production triggered a wave of olefins and polyolefins capacity additions to take advantage of the abundant and low-cost NGL feedstocks.

Kim Foley: Olphins and polyulphins markets remain well supplied. Nonetheless, the U.S. Gulf Coast hurricane season is still young, with potential for additional disruptions over the coming months. During the third quarter, we will remain focused on aligning our operating rates to serve domestic and export market demand, targeting 85% utilization. After a decade of unprecedented growth, North American polyulphins capacity additions have slowed down.

Speaker Change: with one or sometimes two world-scale plants coming online nearly every year for over the past decade.

Speaker Change: North American domestic and export markets for polyethylene and polypropylene became well supplied, leading to reduced operating rates and lower margins.

Kim Foley: During the third quarter, we will remain focused on aligning our operating rates to serve domestic and export market demand, targeting 85% utilization. After a decade of unprecedented growth, North American polyolefin capacity additions have slowed down. Please turn to slide 14 as we review the changing outlook for our new supply. In the early 2010s, the advent of shale-based oil and gas production triggered a wave of olefins and polyolefins capacity additions to take advantage of the abundant and low-cost NGL feedstock, with one or sometimes two world-scale plants coming online nearly every year for the past decade. North American domestic and export markets for polyethylene and polypropylene have become well-supplied, leading to reduced operating rates and lower margins. Over the next few years, very little new capacity will come online in North America.

Speaker Change: Over the next few years, very little new capacity will come online in North America.

Kim Foley: After two years of tepid growth, polyethylene sales volumes are growing at double digit rates during the first half of this year.

Kim Foley: Please turn to slide 14 as you review the changing outlook for a new supply. In the early 2010s, the advent of shell-based oil and gas production triggered a wave of olphins and polyulphins capacity additions to take advantage of the abundant and low-cost NGL feedstock. Fox, with one or sometimes two world-scale plants coming online nearly every year for over the past decade, North American, domestic, and export markets for polyethylene and polypropylene became well supplied, leading to reduced operating rates and lower margins. Over the next few years, very little new capacity will come online in North America.

Kim Foley: Demand growth in Latin America is increasingly served by North American supply.

Kim Foley: Polypropylene volumes are also improving but remain constrained as we await the inevitable rebound and demand for durable goods.

LyondellBasell: With North American demand growth returning to long-term trends and no meaningful local supply on the horizon, tightening supply and demand balances and higher utilization rates bode well for LyondellBasell's core polyolefins business.

Kim Foley: Please turn to slide 15 as we review the results of our olefins and polyolefins Europe , Asia, and international segment.

Kim Foley: After two years of tepid growth, polyethylene sales volumes are growing at double-digit rates during the first half of this year. Demand growth in Latin America is increasingly served by North American supply. Polypropylene volumes are also improving, but remain constrained as we await the inevitable rebound in demand for durable goods. With North American demand growth returning to long-term trends and no meaningful local supply on the horizon, tightening supply and demand balances and higher utilization rates bowed well for LyondellBasell's core polyolefins business.

Kim Foley: After two years of tepid growth, polyethylene sales volumes are growing at double-digit rates during the first half of this year. Demand growth in Latin America is increasingly served by North American supply. Polypropylene volumes are also improving, but remain constrained as we await the inevitable rebound and demand for durable goods. With North American demand growth returning to long-term trends and no meaningful local supply on the horizon,

Speaker Change: In the second quarter, LYB's integrated polyethylene margins expanded with the increased utilization of cost-advantaged feedstocks such as LPGs, resulting in EBITDA of $70 million.

Kim Foley: Approximately 40% of LYB's European ethylene production came from advantaged feedstocks.

Speaker Change: Additionally, higher prices for olefins and co-products supported European cracker margins amidst modest seasonal demand improvement for polymers.

Kim Foley: Tightening supply and demand balances and higher utilization rates bode well for LyondellBasell's core polyolefins business. Please turn to slide 15 as we review the results of our olefins and polyolefins Europe, Asia, and international segments. In the second quarter, LYB's integrated polyethylene margins expanded with the increased utilization of cost-advantaged feedstocks such as LPGs, resulting in EBITDA of $70 million. Approximately 40% of LYB's European ethylene production came from advantaged feedstocks. Additionally, higher prices for olefins and coproducts supported European cracker margins amidst modest seasonal demand improvement for polymers. Red Sea logistics challenges have largely subsided during the quarter, but significant higher shipping costs constrain European imports, benefiting local producers.

Kim Foley: Red Sea logistic challenges have largely subsided during the quarter but significant higher shipping costs constrain European imports benefiting local producers.

Kim Foley: Please turn to slide 15 as you review the results of our olefins and polyolefins Europe, Asia, and international segment. In the second quarter, LYB's integrated polyethylene margins expanded with the increased utilization of cost-advanced speed stocks such as LPGs, resulting in EBITDA of $70 million. Approximately 40% of LYB's European ethylene production came from advanced speed stocks. Additionally, higher prices for olefins and co-products supported European cracker margins amidst modest seasonal demand improvement for polymers. Red Sea logistic challenges have largely subsided during the quarter, but significant higher shipping costs constrain European imports, benefiting local producers. Looking ahead, we anticipate steady olephins and polyolephins demand through the summer and Europe.

Kim Foley: Looking ahead, we anticipate steady olefins and polyolefins demand through the summer in Europe . In September , we will begin planned maintenance at one of our German crackers that will continue into the fourth quarter.

Kim Foley: As a result, we are targeting approximately 80% operating rates for the third quarter.

Speaker Change: As part of our strategy to grow and upgrade our core businesses, we completed the acquisition of a 35% share of the Saudi Arabian NetPet Joint Venture at the end of May.

Speaker Change: The joint venture currently operates 400,000 tons of integrated polypropylene capacity using local cost-advantaged propane raw materials and LYB's SPHERIS-POL polypropylene technology.

Speaker Change: Together with our partner Alujain, we are evaluating opportunities to significantly grow the joint venture by leveraging new feedstock concessions in Saudi Arabia.

Kim Foley: Looking ahead, we anticipate steady olefins and polyolefins demand through the summer in Europe. In September, we will begin planned maintenance at one of our German crackers that will continue into the fourth quarter. As a result, we are targeting approximately 80% operating rates for the third quarter. Furthermore, as part of our strategy to grow and upgrade our core businesses, we completed the acquisition of a 35% share of the Saudi Arabian NetPet joint venture at the end of May.

Kim Foley: In September, we will begin planned maintenance at one of our German crackers that will continue into the fourth quarter. As a result, we are targeting approximately 80% operating rates for the third quarter.

Speaker Change: And as Peter discussed, in May we also announced the strategic review of some of our European olefins and polyolefins assets.

Speaker Change: Our team is working diligently to evaluate our options and order position LYB for future success in the region.

Kim Foley: As part of our strategy to grow and upgrade our core businesses, we completed the acquisition of a 35% share of the Saudi Arabian net pet joint venture at the end of May. The joint venture currently operates 400,000 tons of integrated polypropylene capacity using local cost-advanced propane raw materials and LYB's spirit pole polypropylene technology. Together with our partner, Al Yujain, we are evaluating opportunities to significantly grow the joint venture by leveraging new feedstock concessions in Saudi Arabia.

Speaker Change: Now let's turn to slide 16 and review the results of the refining segment.

Kim Foley: The joint venture currently operates 400,000 tons of integrated polypropylene capacity using local cost-advantaged propane raw materials and LYB's spherical pole polypropylene technology. Together with our partner Alujain, we are evaluating opportunities to significantly grow the joint venture by leveraging new feedstock concessions in Saudi Arabia. And as Peter discussed, in May, we also announced the strategic review of some of our European olefins and polyolefins assets. Our team is working diligently to evaluate our options and order position, LYB, for future success in the region.

Speaker Change: Second quarter EBITDA was 15 million dollars.

Speaker Change: Higher production following the first quarter down time was more than offset by lower Meyer crack spreads.

Kim Foley: Margins decreased driven by lower distillate cracks, partially offset by slight improvements in gasoline cracks, with modest second quarter demand indicating a slow start to the driving season.

Kim Foley: Our hedging program benefited second quarter results.

Kim Foley: And as Peter discussed, in May, we also announced the strategic review of some of our European olefins and polyolefins assets. Our team is working diligently to evaluate our options in order position, LYB for future success in the region.

Kim Foley: Industry operating rates remained relatively high, leading to ample market supply.

Kim Foley: In the near term, we expect summer demand to support stable gasoline crack spreads and continued high operating rates for refiners. We intend to operate at approximately 90% of capacity in the third quarter.

Torkel Rhenman: Now let's turn to slide 16 and review the results of the refining segments.

Kim Foley: Now let's turn to slide 16 and review the results of the refining segment. Second quarter EBITDA was $15 million. Higher production following the first quarter down time was more than offset by lower Meyer crack spread. Margins decreased, driven by lower distillate cracks, partially offset by slight improvements in gasoline cracks, with modest second quarter demand indicating a slow start to the driving season. Our hedging program benefited second quarter results because industry operating rates remained relatively high, leading to ample market supply.

Kim Foley: Looking ahead, we remain committed to the safe and reliable operation of these assets until we shut down, no later than the end of the first quarter of 2025.

Torkel Rhenman: 2nd quarter EBITDA was $15 million, higher production following the first quarter downtime was more than offset by lower Meyer cracks spreads. Margins decreased driven by lower distillate cracks, partially offset by slight improvements in gasoline cracks, with modest 2nd quarter demand indicating a slow start to the driving season. Our hedging program benefited 2nd quarter results. Industry operating rates remained relatively high, leading to ample market supply. In the near term, we expect some demand to support stable gasoline cracks spreads and continued high operating rates for refiners. We intend to operate at approximately 90% of capacity in the 3rd quarter. Looking ahead, we remain committed to the safe and reliable operation of these assets until we shut down, no later than the end of the first quarter of 2025. Additional details regarding our ramp down will be provided during our 3rd quarter update. Our team is making good progress in evaluating projects to transform the site in support of our circular and low carbon solution growth strategy. With that, I will turn the call over to Aaron.

Kim Foley: Additional details regarding our ramp down will be provided during our third quarter update.

Speaker Change: Our team is making good progress and evaluating projects to transform the site in support of our circular and low carbon solution growth strategy.

Kim Foley: With that, I will turn the call over to Aaron.

Aaron: Thank you, Kim. Please turn to slide 17 as we look at the intermediates and derivatives segment.

Aaron: In the second quarter, segment EBITDA was $501 million, driven by increased production and seasonal demand for oxyfuels.

Kim Foley: In the near term, we expect summer demand to support stable gasoline crack spreads and continued high operating rates for refiners. We intend to operate at approximately 90% of capacity in the third quarter. Looking ahead, we remain committed to the safe and reliable operation of these assets until we shut them down, no later than the end of the first quarter of 2025. Additional details regarding our ramp down will be provided during our third quarter update. Meanwhile, our team is making good progress in evaluating projects to transform the site in support of our circular and low carbon solutions growth strategy. With that, I will turn the call over to Aaron. Thank you.

Aaron: We delivered record quarterly oxyfuels volumes by increasing production from our newest POTVA asset, which operated at close to benchmark rates during the quarter.

Kim Foley: Oxyfuel's margins remain robust as the summer driving season is underway, with strong octane demand keeping margins well above historical levels.

Kim Foley: Intermediate chemicals improved due to higher margins and volumes for acetyls, driven by industry outages and improved production from LYB's assets.

Kim Foley: Propylene oxide and derivatives margins were steady as demand for durable goods remained modest against a backdrop of high interest rates in the impacts of inflation.

Aaron Ledet: Thank you, Ken. Please turn to slide 17 as we look at the intermediate and derivative segment. In the 2nd quarter segment, EBITDA was 501 million dollars, driven by increased production and seasonal demand for oxyfules. We delivered record quarterly oxyfules volumes by increasing production from our newest POTBA asset, which operated at close to benchmark rates during the quarter. Oxyfules margins remain robust as the summer driving season is underway, with strong octane demand keeping margins well above historical levels. Intermediate chemicals improved due to higher margins and volumes for acetyls driven by industry outages and improved production from LID's assets.

Aaron Ledet: Thank you, Ken. Please turn to slide 17 as we look at the intermediates and derivatives sector. In the second quarter, segment EBITDA was $501 million, driven by increased production and seasonal demand for oxygen. We delivered record quarterly oxyfuels volumes by increasing production from our newest POTVA asset, which operated at close to benchmark rates during the quarter. Oxyfuel's margins remain robust as the summer driving season is underway, with strong octane demand keeping margins well above historical levels.

Kim Foley: As we move through the third quarter, we expect seasonal demand will continue to benefit oxy-fuels margins through the remainder of the driving season.

Kim Foley: Low cost for butane raw materials and steady premiums for octane should provide continued support for oxyfuel's profitability.

Kim Foley: In line with our guidance, planned maintenance at one of our Bayport POTBA assets will begin later in the third quarter and continue into the fourth quarter.

Kim Foley: We will continue to match our production with market demand and expect to operate our IND assets at rates of approximately 75% during the quarter.

Aaron Ledet: Intermediate chemicals improved due to higher margins and volumes for acid, driven by industry outages and improved production from LYB's assets. Propylene oxide and derivatives margins were steady, as demand for durable goods remained modest against a backdrop of high interest rates and the impact of inflation. As we move through the third quarter, we expect seasonal demand will continue to benefit oxyfuels margins through the remainder of the driving season. Low cost for butane raw materials and steady premiums for octane should provide continued support for oxyfuels profitability.

Kim Foley: As Michael mentioned earlier, we completed the sale of our ethylene oxide and derivatives businesses to INEOS for $700 million during the second quarter. We recorded a book gain on the sale of $293 million, which is reflected as an identified item in our second quarter results.

Aaron Ledet: Preferably, an oxide derivatives margins were steady as demand for durable goods remained modest against a backdrop of high interest rates in the impacts of inflation. As we move through the 3rd quarter, we expect seasonal demand will continue to benefit oxyfuels margins through the remainder of the driving season. Low cost for butane raw material and steady premiums for octane should provide continued support for oxyfuels profitability. In line with our guidance plan maintenance at one of our Bayport POTBA assets, we'll begin later in the 3rd quarter and continue into the 4th quarter. We will continue to match our production with market demand and expect to operate our IND assets at a rate of approximately 75% during the quarter.

Speaker Change: Our work to grow and upgrade our IND segment continues as we evaluate our Maasvlak POSM joint venture in the Netherlands as part of the ongoing European strategic review.

Aaron Ledet: In line with our guidance, planned maintenance at one of our Bayport POTBA assets will begin later in the third quarter and continue into the fourth quarter. We will continue to match our production with market demand and expect to operate our IND assets at rates of approximately 75% during the quarter. As Michael mentioned earlier, we completed the sale of our ethylene oxide and derivatives businesses to INEOS for $700 million during the second quarter. We recorded a book gain on the sale of $293 million, which is reflected as an identified item in our second quarter results.

Kim Foley: We are working closely with our partner in the JV, Covestro, local stakeholders, and our workforce.

Kim Foley: With that, I will turn the call over to Torkel.

Torkel: Thank you, Aaron. Please turn to slide 18 as we review the second quarter results for the advanced polymer solution segment.

Torkel: Second quarter EBITDA was $40 million. Margins increased across most APS businesses as our transformation work and seasonal improvements led to modestly higher pricing.

Aaron Ledet: As Michael mentioned earlier, we completed the sale of our athlete oxide derivatives businesses to INIOS for $700 million during the 2nd quarter. We recorded a book gain on the sale of $293 million, which is reflected as an identified item in our 2nd quarter results. Our work to grow and upgrade our IND segment continues as we evaluate our Muslock POSM joint venture in the Netherlands as part of the ongoing European Strategic Review. We are working closely with our partner in the JV, Kovestero, local stakeholders in our workforce.

Torkel: Lower automotive production in Europe led to a slight decrease in volumes.

Torkel: Looking ahead, we expect modest improvement in volumes through the remainder of the year, driven by our strategic initiatives and focus on restoring our growth pipeline.

Aaron Ledet: Our work to grow and upgrade our IND segment continues as we evaluate our Maasvlak POSM joint venture in the Netherlands as part of the ongoing European strategic review. We are working closely with our partner in the JV, Covestro, and local stakeholders in our work. With that, I will turn the call over to Torkel.

Torkel: We anticipate headwinds from typical seasonal downtime at automotive OEMs in the third quarter, but our master batch business assures the qualification cycles and offers more opportunities for near-term improvement.

Torkel Rhenman: With that, I will turn the call over to Borkel. Thank you, Aaron. Please turn to slide 18 as we review the second quarter results for the Advanced Polymer Solution segment. Second quarter EBITDA was $40 million. Leithead to modestly higher pricing. Lower automotive production in Europe led to a slight decrease in volumes. Looking ahead, we expect modest improvement in volumes through the remainder of the year, driven by our strategic initiatives and focus on restoring our growth pipeline. We anticipate headwinds from typical seasonal downtime at automotive OEMs in the third quarter. But our master batch business assured the qualification cycles and offer more opportunities.

Torkel Rhenman: Aaron, please turn to slide 18 as we review the second quarter results for the advanced polymer solutions segment. Second quarter EBITDA was $40 million. Margins increased across most APS businesses as our transformation work and seasonal improvements led to modestly higher prices. However, lower automotive production in Europe led to a slight decrease in volume.

Torkel: Our team is focused on continuously expanding our growth funnel and increasing the win rate with our customers.

Torkel: We're investing in our core team with a growth and value mindset to deliver on our long-term goals for the APS business.

Torkel: With that, I will return the call back to Peter.

Peter Vanacker: Thank You Torkel. Please turn to slide 19 and I will discuss the result for the technology segment on behalf of Jim Seward.

Torkel Rhenman: Looking ahead, we expect modest improvement in volumes through the remainder of the year, driven by our strategic initiatives and focus on restoring our growth pipeline. We anticipate headwinds from typical seasonal downtime at automotive OEMs in the third quarter, but our master batch business has shorter qualification cycles and offers more opportunities for near-term improvement. Our team is focused on continuously expanding our growth funnel and increasing the win rate with our customers. We're investing in our core team with a growth and value mindset to deliver on our long-term goals for the APS business. With that, I will return the call to Peter. Thank you, Torkel.

Jim Seward: Second quarter EBITDA of 84 million dollars reflected moderating licensing and catalyst revenue, normalizing after strong first quarter results.

Peter Vanacker: In the third quarter, we expect that revenue associated with licensing milestones will increase, coupled with high catalyst volumes.

Torkel Rhenman: For near-term improvement. Our team is focused on continuously expanding our growth funnel and increasing the win rate with our customers.

Peter Vanacker: As a result, we estimate that third quarter technology segment results will be similar to first quarter results.

Torkel: Now let me summarize the second quarter, our outlook, and our long-term strategy with slide 20.

Torkel Rhenman: We're investing in our core team with a growth and value mindset to deliver on our long-term goals for the APS business.

LYB: LYB's second quarter results reflect higher production volumes and modest seasonal improvements in market conditions.

Peter Vanacker: With that, I will return the call back to Peter. Thank you, Torco.

Peter Vanacker: Thank you, Torkel. Please turn to slide 19, and I will discuss the results for the technology segment on behalf of James Seward. Second quarter EBITDA of 84 million dollars reflected moderating licensing and catalyst revenue, normalizing after strong first quarter results. In the third quarter, we expect that revenue associated with licensing milestones will increase, coupled with high catalyst volume. As a result, we estimate that third quarter technology segment results will be similar to first quarter results.

Peter Vanacker: Please turn to slide 19, and I will discuss the result for the technology segment on behalf of Jim Seward. Second quarter EBITDA of $84 million reflected moderating licensing and catalyst revenue, normalizing after strong first quarter results. In the third quarter, we expect that revenue associated with licensing milestones will increase, coupled with high catalyst volumes. As a result, we estimate that third quarter technology segment results will be similar to first quarter results.

Peter Vanacker: Looking toward the second half of the year, we continue to expect a slight improvement over our first half results with a slow recovery in global markets.

Peter Vanacker: LYB's assets in the US and Middle East are well positioned, operating in regions where low costs for energy and feedstocks provide a durable competitive advantage relative to oil-based production.

Peter Vanacker: Our team remains disciplined in our capital allocation strategy and delivering high returns to our shareholders.

Peter Vanacker: Now let me summarize the second quarter, our outlook, and our long-term strategy with slide 20. LYB's second quarter results reflect higher production volumes and modest seasonal improvements in market conditions. Looking toward the second half of the year, we continue to expect a slight improvement over our first half results, with a slow recovery in global markets. LYB's assets in the US and Middle East are well positioned, operating in regions where low costs for energy and feed stocks provide a durable competitive advantage relative to oil-based production. Our team remains disciplined in our capital allocation strategy and delivering high returns to our shareholders.

Peter Vanacker: Now, let me summarize the second quarter, our outlook, and our long-term strategy on slide 20. LYB's second quarter results reflect higher production volumes and modest seasonal improvements in market conditions. Looking toward the second half of the year, we continue to expect a slight improvement over our first half results with a slow recovery in global markets. LYB's assets in the US and Middle East are well positioned, operating in regions where low costs for energy and feedstocks provide a durable competitive advantage relative to oil-based production.

Peter Vanacker: Our balance sheet is in great shape and we are well equipped to succeed as market conditions modestly improve.

Peter Vanacker: Our value enhancement program is on track to contribute approximately 400 million dollars to EBITDA in 2024.

Peter Vanacker: We are thrilled with the enthusiasm and results from our progress so far and look forward to providing a more substantive update on our VEP next quarter as we dive deeper on how we are stepping up our performance and culture at LYB.

Torkel: At our Capital Markets Day last year, we outlined our long-term strategy.

Peter Vanacker: Our team remains disciplined in our capital allocation strategy and delivers high returns to our shareholders. Our balance sheet is in great shape, and we are well equipped to succeed as market conditions modestly improve. Our value enhancement program is on track to contribute approximately $400 million to EBITDA in 2024. We are thrilled with the enthusiasm and results from our progress so far and look forward to providing a more substantive update on our VEP next quarter as we dive deeper into how we are stepping up our performance and culture at LYB.

Peter Vanacker: Through leading technologies and market positions, we are executing on this strategy to grow our global footprint and upgrade our core businesses.

Peter Vanacker: Our balance sheet is in great shape, and we are well equipped to succeed as market conditions modestly improve. Our value enhancement program is on track to contribute approximately $400 million to EBITDA in 2024.

Peter Vanacker: Our strategy will not only grow LYB, but will also reshape our business portfolio to improve profitability and create sustainable competitive advantages.

Peter Vanacker: As Kim highlighted earlier, we see North American polyolefin demand improving in 2024, returning toward long-term historical growth rates.

Peter Vanacker: We are thrilled with the enthusiasm and results from our progress so far and look forward to providing a more substantive update on our VEP next quarter as we dive deeper on how we are stepping up our performance and culture at LYB.

Kim Foley: As we look ahead, limited capacity additions in North America bodes well for continued improvements in operating rates and associated margins over the coming years.

Peter Vanacker: At our Capital Markets Day last year, we outlined our long-term strategy. Through leading technologies and market positions, we are executing on this strategy to grow our global footprints and upgrade our core businesses. Our strategy will not only grow LYB, but will also reshape our business portfolio to improve profitability and create sustainable competitive advantages. As Kim highlighted earlier, we see North American polyolefin demand improving in 2024, returning to work long-term historical growth rates. As we look ahead, limited capacity additions in North America boast well for continued improvements in operating rates and associated margins over the coming years.

Peter Vanacker: At our Capital Markets Day last year, we outlined our long-term strategy. Through leading technologies and market positions, we are executing on this strategy to grow our global footprint and upgrade our core business. Our strategy will not only grow LYB but will also reshape our business portfolio to improve profitability and create sustainable competitive advantage. As Kim highlighted earlier, we see North American polyolefin demand improving in 2024, returning to its long-term historical growth rate.

Speaker Change: I am proud to lead our high-performing team as we take decisive actions to unlock value, reshape LYB, and position our company for sustainable future success.

Speaker Change: With that, we're now pleased to take your questions.

Speaker Change: Thank you, sir. And ladies and gentlemen, at this time, we will begin the question and answer session. As a reminder, if you have a question, please press the star followed by the one on your touchtone phone. If you would like to withdraw your question, please press the star followed by the two. We do ask you to limit to one question.

Peter Vanacker: As we look ahead, limited capacity additions in North America bode well for continued improvements in operating rates and associated margins over the coming years. I am proud to lead our high-performing team as we take decisive actions to unlock value, reshape LYB, and position our company for sustainable future success. With that, we're now pleased to take your questions.

Speaker Change: Our first question comes from the line of Steve Byrne with Bank of America. Please proceed with your question.

Steve Byrne: Yes, thank you.

Peter Vanacker: I am proud to lead our high-performing team as we take decisive actions to unlock value, reshape LYB, and position our company for sustainable future success.

Steve Byrne: You're planning to shutter the refinery at the end of the first quarter, and I know that you have...

Steve Byrne: have considered some other options for that facility, such as becoming a plastic recycling center. I think you also offered it as a hydrogen hub. My question for you is...

Operator: With that, we are now pleased to take your questions. Thank you, sir. And ladies and gentlemen, at this time, we will begin the question in session. As a reminder, if you have a question, please press the star followed by the one on your house tone phone. If you would like to withdraw your question, please press the star followed by the two.

Operator: Thank you, sir, and ladies and gentlemen. At this time, we will begin the question and answer session. As a reminder, if you have a question, please press the star followed by the number on your touchtone phone. If you would like to withdraw your question, please press the star followed by the two. We do ask you to limit yourself to one question. Our first question comes from the line of Steve Byrne with Bank of America. Please proceed with your question. Yes,

Speaker Change: Are any of those plans contingent on funding from the DOE which could potentially get scuttled if there was an administration change and can you provide a little bit of

Operator: We do ask you to limit to one question.

Speaker Change: Transparency on the 2 million ton, 1 billion EBITDA target you have by the end of the decade. What type of circular products do you expect to be generating that?

Steve Baron: Our first question comes from the line of Steve Baron with Bank of America. Please proceed with your question. Yes, thank you.

Peter Vanacker: You're planning to shutter the refinery at the end of the first quarter, and I know that you have considered some other options for that facility, such as becoming a plastic recycling center. I think you have also offered it as a hydrogen hub. My question for you is... Are any of those plans contingent on funding from the DOE, which could potentially get scuttled if there was an administration change? And can you provide a little bit of, I guess, transparency on that two million ton, one billion EBITDA target you have by the end of the decade? What type of circular products do you expect to be generating from that?

Peter Vanacker: You're planning to shutter the refinery at the end of the first quarter, and I know that you have considered some other options for that facility, such as becoming a plastic recycling center. I think you all also offered it as the Hydrogen hub.

Speaker Change: Hi Steve, thank you very much for your question and a warm welcome from my side. On the refinery, we

Speaker Change: We have announced that multiple times and it's again in our prepared remarks that we plan at the latest to run down the refinery at the latest at the end of Q1 2025.

Michael McMurray: My question for you is, are any of those plans contingent on funding from the DOE, which could potentially get scuttled if there was an administration change, and can you provide a little bit of, I guess, transparency on that too. The two million ton, one billion EBITDA target you have by the end of the decade. What type of circular products do you expect to be generating that?

Speaker Change: In the meantime, our teams are making very good progress with regards, I mean, to a couple of projects that we have alluded to before. One of them is our second investment in Moratec.

Speaker Change: The first one, remember, is in the Cologne hub, next to our steam crackers in Wesseling. The second one we plan to bring to the Houston refinery, leverage upon the hydrotreaters we have.

Peter Vanacker: I see if thank you very much for your question, and warm welcome from my side. On the refinery, we have announced that multiple times, and it's again in our prepared remarks that we plan, at the latest, to run down the refinery at the latest at the end of Q1 2025. In the meantime, our teams are making very good progress. We're regards to a couple of projects that we have alluded to before. One of them is our second investment in Moritech. The first one, remember, is in the Colone Hub. Next to our steam crackers in Wessling, the second one we plan to bring to the Houston refinery, leverage upon the hydro-treaters we have, modified those hydro-treaters so we can upgrade the plastic oil that is being produced in Moritech No.

Peter Vanacker: Hi Steve, thank you very much for your question and warm welcome from my side. On the refinery, we have announced that multiple times, and it's again in our prepared remarks that we plan to run down the refinery at the latest by the end of Q1 2025. In the meantime, our teams are making very good progress. With regard to a couple of projects that we have alluded to before, one of them is our second investment in Moratec. The first one, remember, is in the Cologne hub next to our steam crackers in Wesseling.

Speaker Change: modify those hydrotreaters so we can upgrade the plastic oil that is being produced in Moritech number two

Speaker Change: and that plastic oil would then be supplied

Speaker Change: to our steam crackers through pipelines in, for example, Channel View. So that's one project that is proceeding well. I hope that we will take a first decision, a first milestone decision on that still this year.

Speaker Change: The second project is around the renewable hydrocarbons, so these are not plastic waste type hydrocarbons, but hydrocarbons eventually produced out of used cooking oil or other wastes.

Peter Vanacker: The second one we plan to bring to the Houston refinery. Leveraging the hydrotreaters, we have modified those hydrotreaters so we can upgrade the plastic oil that is being produced in Moritech number two, and that plastic oil would then be supplied to our steam crackers through pipelines in, for example, Channel View. So that's one project that is proceeding well. I hope that we will take a first decision, a first milestone decision on that still this year.

Speaker Change: We see also opportunities to leverage upon the equipment we have at the refinery to produce those renewable hydrocarbons as a feedstock.

Speaker Change: in our refinery in Houston and again the same principle

Peter Vanacker: 2. And that plastic oil would then be supplied to our steam crackers through pipelines in, for example, Channel View. So that's one project that is proceeding well.

Speaker Change: Those hydrocarbons would then go through our pipelines to channel view, to the seam crackers.

Speaker Change: and then based upon that we would crack them and we would polymerize them so we have then two elements of our circling family

Peter Vanacker: I hope that we will take a first decision, a first milestone decision on that still this year. The second project is around the renewable hydrocarbons. So these are not plastic waste type hydrocarbons, but hydrocarbons eventually produced out of use, cooking oil or other wastes. We see also opportunities to leverage upon the equipment we have at the refinery to produce those renewable hydrocarbons as a feedstock in our refinery in Houston. And again, the same principle; those hydrocarbons would then go through our pipelines to Channel View to the same crackers. And then, based upon that, we would crack them and we would polymerize them.

Speaker Change: One, the advanced recycling part based upon the Morotec investment and the other one, the renew part, which is based upon renewable hydrocarbons. So all that is proceeding well, as we had alluded to in the past.

Peter Vanacker: The second project is around renewable hydrocarbons, so these are not plastic waste type hydrocarbons, but hydrocarbons eventually produced out of used cooking oil or other waste. We see opportunities to leverage upon the equipment we have at the refinery to produce those renewable hydrocarbons as a feedstock in our refinery in Houston. And again, the same principle, those hydrocarbons would then go through our pipelines to channel them to the seam crackers.

Speaker Change: And hey Steve, it's Michael. I would say that a lot of the hydrogen projects are probably challenged without subsidies.

Speaker Change: And then before we move on to the next question, I wanted to clarify something. We received a lot of questions around our operating rates this morning from the materials that we had posted online.

Speaker Change: So let me see if I can clarify a few points for you all. In April , we guided to second quarter operating rates for the segment as 85% for both O&P Americas and O&P EAI.

Peter Vanacker: And then based upon that, we would crack them, and we would polymerize them. So we have then two elements of our circling family. One, the advanced recycling part based upon the Moritek investment and the other one, the renew part, which is based upon renewable hydrocarbons. So all that is proceeding well, as we have alluded to in the past. And hey, Steve, it's Michael.

Peter Vanacker: So we have done two elements of our circling family: one, the advanced recycling part based upon the Moritech investment, and the other one, the renew part, which is based upon renewable hydrocarbons. So all that is proceeding well, as we had alluded to in the past.

Speaker Change: and 80% for intermediates and derivatives. Our rates for the second quarter were largely in line with that guidance.

Speaker Change: In the business results discussion posted on our website, we disclosed second quarter cracker operating rates were 95% for O&P Americas and 90% for O&P EAI.

Speaker Change: We operated our crackers in both regions at higher rates during the second quarter to capture favorable economics for olefins.

Michael McMurray: And hey, Steve, it's Michael. I would say that a lot of the hydrogen projects are probably challenged without subsidies.

Michael McMurray: Hey Steve, it's Michael. I would say that a lot of the hydrogen projects are probably challenged without subsidies. And then, before we move on to the next question, I wanted to clarify something. We received a lot of questions around our operating rates this morning from the materials that we had posted online. So let me see if I can clarify a few points for you all.

Speaker Change: All polymer plants operated at lower rates to match second quarter market demand for polymers.

Michael McMurray: And then, before we move on to the next question, I wanted to clarify something. We received a lot of questions around our operating rates this morning from the materials that we had posted online. So let me see if I can clarify a few points for you all. In April, we guided the second quarter operating rates for the segment as 85% for both OMP Americas and OMP AI, and 80% for intermediates and derivatives. Our rates for the second quarter were largely in line with that guidance. In the business results discussion, post on our website, we disclosed second quarter cracker operating rates for 95% for OMP Americas and 90% for OMP AI.

Michael McMurray: In April, we guided to second quarter operating rates for the segment as 85% for both O&P Americas and O&P EAI and 80% for intermediates and derivatives. Our rates for the second quarter were largely in line with that guidance. In the business results discussion posted on our website, we disclosed second quarter cracker operating rates of 95% for O&P Americas and 90% for O&P EAI. We operated our crackers in both regions at higher rates during the second quarter to capture favorable economics for all.

Speaker Change: As Kim and Aaron mentioned, during the third quarter, we will operate the O&P America segment at 85%, O&P EAI at 80%, and IND at 75%.

Speaker Change: In O&P Americas, we proactively took some downtime during Hurricane Beryl that will reduce rates by about 5 percentage points for the third quarter.

Speaker Change: In EAI, we are starting a turnaround on our larger cracker and vesseling during the third quarter. We expect our crackers in both regions will operate at higher rates than the segment to continue to capture attractive margins for ethylene, propylene, and other co-products.

Speaker Change: In I&D, we are performing a turnaround on one of our older POTBA plans in Bayport, Texas during the third quarter.

Michael McMurray: We operated our crackers in both regions at higher rates during the second quarter to capture favorable economics for olfins. Our polymer plants operated at lower rates to match second quarter market demand for polymers. As Kim and Aaron mentioned, during the third quarter, we will operate the OMP Americas segment at 85%. OMP AI at 80% and IND at 75%. In OMP Americas, we proactively took some downtime during Hurricane Burrell that will reduce rates by about 5 percentage points for the third quarter.

Speaker Change: In addition, we're taking some downtime at our POSM joint venture in the Netherlands to balance the low market demand for propylene oxide and styrene in the region. If you have any further questions on rates, please feel free to reach out to the IR team for further clarification.

Michael McMurray: All polymer plants operated at lower rates to match second quarter market demand for polymer. As Kim and Aaron mentioned, during the third quarter, we will operate the O&P America segment at 85%, O&P EAI at 80%, and IND at 75%. In O&P Americas, we proactively took some downtime during Hurricane Beryl that will reduce rates by about five percentage points for the third quarter. In EAI, we are starting a turnaround on our larger cracker and vesseling during the third quarter.

Speaker Change: Next question.

Speaker Change: Thank you. Our next question comes from the line of Matthew Blair with TPH. Please proceed with your question.

Michael McMurray: In EAI, we are starting a turnaround on our larger cracker and investment during the third quarter. We expect our crackers in both regions will operate at higher rates than the segment to continue to capture attractive margins for ethylene, propylene, and other co-products. In IND, we are performing a turnaround on one of our older POTBA plants in Bayport, Texas, during the third quarter. In addition, we are taking some downtime at our POSM joint venture in the Netherlands to balance the low market demand for propylene oxide and stiring in the region.

Matthew Blair: Thank you and good morning. I have some questions on the PO side. So you mentioned the benefits of the new PO TBA plant in Channel View.

Michael McMurray: We expect our crackers in both regions to operate at higher rates than the segment to continue to capture attractive margins for ethylene, propylene, and other co-products. In IND, we are performing a turnaround on one of our older POTBA plants in Bayport, Texas, during the third quarter. In addition, we are taking some downtime at our POSM joint venture in the Netherlands to balance the low market demand for propylene oxide and styrene in the region. If you have any further questions on rates, please feel free to reach out to the IR team for further clarification.

Matthew Blair: Could you give us the approximate EBITDA contribution in the quarter, or at least some guidance on how the run rate stacks up to your...

Speaker Change: Mid-cycle target of $400 to $500 million on an annual basis. The release also mentioned some volume improvements in P.O. Can you talk about which end markets are picking up?

Speaker Change: And then finally, can you talk about the supply-demand outlook here? I think there's a fair amount of new China PO capacity on deck for the back half of this year. Thank you.

Michael McMurray: If you have any further questions on rates, please feel free to reach out to the IR team for further clarification.

Speaker Change: Thank you, Matthew, and welcome as well to you. On propylene oxide, if you talk about the new facility, the POTBA facility that we have successfully started up.

Operator: Next question. Thank you.

Operator: Thank you. Our next question comes from the line of Matthew Blair with TPH. Please proceed with your question.

Matthew Blair: Our next question comes from the line of Matthew Blair with TPH. Please, we'll see with your questions. Thank you and good morning. I had some questions on the PO side, so you mentioned the benefits of the new PO-TBA plant in Channelview. Could you give us the approximate EBITDA contribution in the quarter, releasing guidance on how the run rate stacks up to your mid-cycle target of 400 to 500 million on an annual basis. The release also mentions some volume improvements in PO to talk about which end markets are picking up. And then finally, to talk about the supply demand outlook here, I think there's a fair amount of new China PO capacity on deck for the back half of this year.

Speaker Change: last year. I'm very pleased to say that we ran close to 90% during Q2 in terms of capacity utilization. I think that's

Peter Vanacker: Thank you and good morning. I have some questions on the PO side. So you mentioned the benefits of the new PO TVA plant in Channel View. Could you give us the approximate EBITDA contribution in the quarter, or at least some guidance on how the run rate stacks up to your mid-cycle target of $400 to $500 million on an annual basis? The release also mentioned some volume improvements in PO. Could you talk about which end markets are picking up? And then finally, could you talk about the supply-demand outlook here? I think there's a fair amount of new Chinese PO capacity on deck for the back half of this year. Thank you.

Speaker Change: Based upon my 34 years in the industry, that's a huge success because that's a major investment that we have made to be able to run pretty much close to nameplate capacity of such a facility in such a relatively short period of time of ramping up.

Speaker Change: So with that I will also hand over to Aaron to give a little bit more background on the market supply and demand.

Aaron: Thank you, Peter, and thank you for the question. I would say that as we look at overall PO demand, as many of you know, most of it goes into durable applications with roughly two-thirds going into the polyurethane chain.

Peter Vanacker: Thank you.

Peter Vanacker: Thank you, Matthew, and welcome as well to you on Proper Look sites. If you talk about the new facility, the PO-TBA facility that we have successfully started up last year, I'm very pleased, I mean, to say that we run close, I mean, to 90% during Q2 in terms of capacity utilization. I think that's made upon my 34 years in the industry. That's a huge success because that's a major investment that we have made to be able to run pretty much close to nameplate capacity of such a facility and such a relatively short period of time of ramping up.

Peter Vanacker: Thank you, Matthew, and welcome as well to you. On propylene oxide, if you talk about the new facility, the POTBA facility that we successfully started up last year, I'm very pleased, I mean, to say that we ran close to 90% during Q2 in terms of capacity utilization. Based upon my 34 years in the industry, that's a huge success because that's a major investment that we have made to be able to run pretty much close to nameplate capacity of such a facility and such a relatively short period of time of ramping up. So with that, I will also hand over to Aaron to give a little bit more background on market supply and demand.

Speaker Change: We have not seen any rebound from...

Speaker Change: Durables, at least noticeable rebound from Durables over the first part of this year. We don't expect it to rebound either in the second half of the year. We remain optimistic that the rate cuts will have an impact on us, although they won't be immediate.

Speaker Change: The other third demand for PO really comes through derivatives and glycols and BDO, and we're also, while glycols might be a little bit better than what we were anticipating, BDO remains

Aaron Ledet: So, with that, I will also hand over to Aaron to give a little bit more background on the market supply and demands. Thank you, Peter, and thank you for the question. I would say that as we look at overall PO demand, as many of you know, most of it goes into durable applications, with roughly two-thirds going into the polyurethane chain. We have not seen any rebound from durables, at least noticeable rebound from durables over the first part of this year. We don't expect it to rebound either in the second half of the year. We remain optimistic that the rate cuts will have an impact on us, although they won't be immediate.

Speaker Change: somewhat modest so generally speaking PO demand is is relatively modest right now

Aaron Ledet: Thank you, Peter, and thank you for the question. I would say that as we look at overall PO demand, as many of you know, most of it goes into durable applications, with roughly two-thirds going into the polyurethane chain. We have not seen any rebound from durables, at least a noticeable rebound from durables, over the first part of this year, and we don't expect it to rebound either in the second half of the year.

Speaker Change: I do want to add, I mean just on the big picture, now we've alluded to that in the past as well, one needs to look at the total different capacities to produce propylene oxide, and still in the world, I would say approximately

Speaker Change: half of the capacities are based upon chlorohydrin technology which is a technology

Speaker Change: That is older, has higher CO2 emissions, is more costly.

Aaron Ledet: We remain optimistic that the rate cuts will have an impact on us, although they won't be immediate. The other third of demand for PO really comes through derivatives and glycols and BDO, and we're also, while glycols might be a little bit better than what we were anticipating, BDO remains somewhat modest. So, generally speaking, PO demand is relatively modest right now.

Peter Vanacker: The other third demand for PO really comes through derivatives and glycalls and BDO. And we're also, while glycalls might be a little bit better than what we're anticipating, BDO remains somewhat modest. So generally speaking, PO demand is relatively modest right now. I do want to add to me just on the big picture. Now we've alluded to that in the past as well. One needs to look at the total different capacities to produce problem oxides. And still in the world, I would say approximately half of the capacities are based upon chlorohydrant technology, which is a technology that is older, has higher CO2 emissions, is more costly.

Speaker Change: And actually, on January 8, 2024, the China National Development and Reform Commission, the so-called NDRC, announced a ban on most of the chlorohydrin-based PO technology by the end of 2025.

Speaker Change: So, we estimate about 25% of China propylene oxide is chlorohydrin technology.

Peter Vanacker: I do want to add, I mean, just on the big picture, and we've alluded to that in the past as well. One needs to look at the total different capacities to produce propylene oxide. And still, in the world, I would say approximately half of the capacities are based upon chlorohydrin technology, which is a technology that is older, has higher CO2 emissions, and is more costly. And actually, on January 8, 2024, the China National Development and Reform Commission, the so-called NDRC, announced a ban on most of the chlorohydrin-based PO technology by the end of 2025.

Speaker Change: So if you see that that is going to be banned, and you look at that compared to the additional investments in propylene oxide that have been taking place in China, it's probably going to, these rationalizations, excuse me, will partially offset, if not fully offset, I mean the new capacity in China.

Speaker Change: Thank you. Our next question comes from the line of Frank Mitsch with Firmium Research. Please proceed with your question.

Peter Vanacker: And actually on January 8th, 2024, the China National Development and Reform Commission, the so-called NDRC, announced a ban on most of the chlorohydrant-based PO technology by the end of 2025. So we estimate about 25% of China's proper noxides chlorohydrant technology. So if you see that that is going to be banned and you look at that compared to the additional investments in proper noxides that have been taken place in China, it is probably going to these rationalizations, excuse me, well partially offset, is not fully offset. I mean the new capacity in China.

Frank Mist: Hey, good morning. I had a question on the cash flow side of things, given the positive cash flow generation and solid balance sheet here, you dipped your toes.

Frank Mist: Back into the buyback markets here in the second quarter, curious what your outlook is for the balance of the year there and whether or not, you know, there might be other scope for M&A, etc. So, you know, just generally the uses of cash question. Thank you.

Peter Vanacker: So we estimate about 25% of China's propylene oxide is chlorohydrin technology. So if you see that that is going to be banned and you look at that compared to the additional investments in propylene oxide that have been taking place in China, it's probably going to, these rationalizations, excuse me, will partially offset, if not fully offset, I mean the new capacity in China.

Speaker Change: Of course I'm very pleased to say that the total capital return yield at Q2 was 6%.

Speaker Change: So I think that's very attractive. Michael, you want to add something on?

Michael McMurray: The question of Frank.

Michael McMurray: Yeah, so thanks for the question, Frank. I mean, just a couple of things. I mean, you know that we have a reputation as a company for delivering strong free cash flow and converting EBITDA into cash.

Operator: Thank you.

Frank Mitsch: Our next question comes from the line of Frank Misch with Fermion Research. Please you know, there might be a other scope for M&A, et cetera. So, you know, just generally the use of cash question. Thank you.

Operator: Our next question comes from the line of Frank Mitsch with Fermium Research. Please proceed with your question.

Operator: Thank you. Our next question comes from the line of Frank Mitsch with Fermium Research; please proceed with your question. Hey, good morning. I had a question about

Speaker Change: In the last 12 months, we generated $4.4 billion, which is 95% conversion, which is well ahead of our 80%. And just kind of thinking about the year itself, as Peter alluded, we grew our dividend.

Speaker Change: And we did some buybacks as well in the quarter.

Speaker Change: You know, as we look to the second half, I think buybacks will continue to be in the mix, probably somewhat modestly, so we're still being a little bit cautious. But from a long-term perspective, the 70% guidance of returning free cash flow to our investors is fully in place, and we're fully committed to it.

Michael McMurray: Of course, I'm very pleased to mean to say that the total count will return you if Q2 was 6%. So I think that's very attractive.

Peter Vanacker: Of course, I'm very pleased to say that the total capital return yield in Q2 was 6%, so I think that's very attractive. Michael, do you want to add something on the question of Frank?

Michael McMurray: Michael, you want to add something on the question of Frank? Yeah, and so thanks for the question, Frank. I mean, just a couple of things. I mean, you know that we have a reputation as a company for delivering strong free cash flow and converting EBITDA into cash. In the last 12 months, we generated 4.4 billion, which is 95% conversion, which is well ahead of our 80%. And just kind of thinking about the year itself, as Peter alluded, you know, we grew our dividend. And we did some buybacks as well in the quarter. You know, as we look to the second half, I think buybacks will continue to be in the mix, probably somewhat modestly.

Michael McMurray: Question for Frank. Yeah, so thanks for the question, Frank. I mean, just a couple of things.

Speaker Change: Thank you. Our next question comes from the line of John Roberts with Mizuho Securities. Please proceed with your question.

Michael McMurray: I mean, you know that we have a reputation as a company for delivering strong free cash flow and converting EBITDA into cash. In the last 12 months, we generated 4.4 billion, which is 95% conversion, which is well ahead of our 80%. You know, and just kind of thinking about the year itself, as Peter alluded to, you know, we grew our dividend. And We did some buybacks as well in the quarter. As we look to the second half, I think buybacks will continue to be in the mix, probably somewhat modestly, so we're still being a little bit cautious, but from a long-term perspective, the 70% guidance of returning free cash flow to our investors is fully in place, and we're fully committed to it.

John Roberts: Thank you. I know Eastman has a very different circular plastics program than Lyondell.

Speaker Change: But would it seem that there are operational initial problems and they've got some delays and customer adoptions? That would be common, I think, to all circular plastics initiatives here. So is that giving you any concerns about your 2030 targets?

Speaker Change: Five and a half years from now is actually a pretty short time frame for chemical investments.

Speaker Change: Hi John , welcome as well and thank you for your question. Of course technologies are difficult to compare, I mean to one each other. What I can say on our Moray Tech technology

Michael McMurray: So we're still being a little bit cautious.

Michael McMurray: But from a long-term perspective, the 70% guidance of returning free cash flow to our investors is fully, fully in place, and we're fully committed to it. Thank you.

Speaker Change: We have a unit which is up and running in our Ferrara plants.

John Roberts: Our next question comes from the line of John Roberts with We Do Securities. Please proceed with your question. Thank you.

Operator: Our next question comes from the line of John Roberts with Mizuho Securities. Please proceed with your question. Thank you.

Operator: Thank you. Our next question comes from the line of John Roberts with Mizuho Securities. Please proceed with your question. Thank you. I know Eastman has a...

Speaker Change: where we also have our R&D people in Italy. So that is...

John Roberts: I know Eastman has a very different circular plastics program than Lionel, but would it seem that they're operational initial problems and they've got some delays and customer adoptions? Would that be common, I think, to all circular plastics initiatives here.

Speaker Change: not an industrial scale plant but it's not a lab scale either it's not a small plant I mean this is about four stores I mean high I mean the plant

Speaker Change: So...

Speaker Change: We have very good experience I mean with that.

John Roberts: So is that giving you any concerns about your 2030 targets? Five and a half years from now is actually a pretty short timeframe for chemical investments.

Speaker Change: The scope, I mean, on the Moritech One investment has been finalized and we're starting to prepare, I mean, on the ground, on the investments. So that is proceeding well in Westerling, so for our Cologne hub.

Peter Vanacker: John, welcome as well. And thank you for your question. Of course, technologies are difficult to compare. I mean to one each other. What I can say on our more tech technology, we have a unit, which is happen running in our Ferrara plans, where we also have our R&D people in Italy. So that is not an industrial scale plans, but it's not a lab scale either. It's not a small plant. I mean, this is about four stores. I mean, I mean the plant. So we have very good experience. I mean with that, the scope, I mean on the more tech one. Investments has been finalized and we're starting to prepare.

Peter Vanacker: John, welcome as well. And thank you for your question. Of course, technologies are difficult to compare, I mean, to one another. What I can say about our Moraytech technology is that we have a unit which is up and running in our Ferrara plant, where we also have our R&D people in Italy. So that is not an industrial scale plant, but it's not a lab scale either. It's not a small plant. I mean, this is about four stories high. I mean, the plants.

Speaker Change: Our process is, as I said multiple times, is different than practically any other process that you find out there because it is a catalytic process, leveraging upon our vast experience we have in catalysis.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of David Begleiter with Deutsche Bank. He will proceed with your question.

David Bedlieter: Thank you, good morning. Peter, in your expectation of higher second half results versus the first half, what are you betting for polyethylene price increases, and including specifically in July as well? Thank you.

Peter Vanacker: We have very good experience, I mean, with that. The scope of the Moritech One investment has been finalized, and we're starting to prepare, I mean, on the ground, for the investments. So that is proceeding well in Westerling, and so for our Cologne hub. Our process, as I said multiple times, is different than practically any other process that you will find out there because it is a catalytic process, leveraging upon our vast experience in catalysis. Thank you. Our next question comes from the line of

Peter Vanacker: Well David, welcome and thank you for your question as well. I mean, if you look at the first half of this year from a group perspective, of course, then...

Peter Vanacker: I mean, on the ground on the investments. So that is proceeding well in wettling.

Peter Vanacker: So for our colon app. Our process is, as I said multiple times, different than practically any other process that you find out there because it is a catalytic process leveraging upon our vast experience we have in catalysis.

Speaker Change: Q1 was better than Q4 last year.

Speaker Change: Now Q2 was better than Q1.

Speaker Change: Quite impressively, I mean, 29% better than Q1.

Speaker Change: Another point that I want to make is if you know excludes

Peter Vanacker: Thank you.

David Begleiter: Our next question comes from the line of David Begleiter with Deutsche Bank. You will see with your question. Thank you. Good morning.

Operator: Our next question comes from the line of David Begleiter with Deutsche Bank. Can you proceed with your question? Thank you. Good morning.

Speaker Change: The refinery business, which as we alluded to before in the call, is going to end its operations. It's a different environment in refining than what we have seen last year.

David Begleiter: Peter, in your expectation of higher second half results first, the first half, what are you embedding for polyethylene price increases and including specifically in July as well. Thank you. David, it's welcome, and thank you for your question as well. I mean, if you look at the first half of this year from a group perspective, of course, then Q1 was better than Q4 last year. Now Q2 was better than Q1. Quite impressively, I mean 29% better than Q1. Another point that I want to make is if you now exclude the refinery business, which, as we alluded to before in the call, is going to end its operations.

Speaker Change: So if you compare Q2 results without refining for this year with Q2 results without refining last year,

Operator: David, welcome. And thank you for your question as well.

Speaker Change: Then our results are better than last year. So the core business is improving as we are progressing.

Peter Vanacker: I mean, if you look at the first half of this year, from a group perspective, of course, then Q1 was better than Q4 last year. Now, Q2 was better than Q1. Quite impressively, I mean, 29% better than Q1. Another point that I want to make is, excluding the refinery business, which, as we alluded to before in the call, is going to end its operations. It's a different environment in refining than what we saw last year.

Speaker Change: Now to your question on the second half of this year.

Speaker Change: If you look at what we alluded to in the prepared remarks, we expect that ethane will remain cheap.

Speaker Change: There are two $0.05 per pound North American polyethylene price increases in the markets.

Speaker Change: Kim said practically all increased capacity in North America has been absorbed through demand growth as well as exports, record exports.

Peter Vanacker: It's a different environment in refining than what we have seen last year. So if you compare Q2 results without refining for this year with Q2 results without refining last year, then our results are better than last year. So the core business is improving as we are progressing.

Kim Foley: We don't see any inventory build-up throughout the value chain.

Peter Vanacker: So if you compare Q2 results without refining this year with Q2 results without refining last year, our results are better than last year. So the core business is improving as we are progressing. Now to your question about the second half of this year.

Kim Foley: And we're only at the beginning of the hurricane season.

Kim Foley: So if you look at all these things...

Kim Foley: Then one would expect that we have a very good momentum and that should support, I mean, also price increases for polyethylene.

Kim Foley: We will have to see, of course, how much of the 2 times 5 cents per pound price increases are out there, but at least you see the momentum in the North American market, which should support, I mean, these price increases.

Peter Vanacker: Not to your question on the second half of this year. If you look, I mean what we alluded to in the prepared remarks, we expect that ethane will remain cheap. There are two five cents per pound North American polyethylene price increases in the markets. Kim says practically all increased capacity in North America has been absorbed through the man growth as well as exports record exports. We don't see any inventory build-up throughout the value chain. And we're only at the beginning of the hurricane season. So if you look at all these things, then one would expect that we have a very good momentum and that should support them in all the price increases for polyethylene.

Peter Vanacker: If you look at what we alluded to in the prepared remarks, we expect that ethane will remain cheap. There are two five cents per pound North American polyethylene price increases in the markets. Kim says practically all increased capacity in North America has been absorbed through demand growth as well as exports, record exports. We don't see any inventory build-up throughout the value chain. And we're only at the beginning of hurricane season.

Kim Foley: Thank you.

Speaker Change: Our next question comes from the line of Kevin McCarthy with Vertical Research Partners. Please proceed with your question.

Kevin Mccarthy: Thank you and good morning. Peter, I appreciate the detail on slide 8 regarding your ongoing review of the European asset footprint.

Peter Vanacker: So if you look at all these things... Then one would expect that we have very good momentum and that should support, I mean, also price increases for polyethylene. We will have to see, of course, how much of the two times five cents per pound price increases are out there. But at least you see the momentum in the North American markets, which should support these price increases.

Kevin Mccarthy: Which of the three buckets that you outline in terms of upgrading profit, divesting, or rationalizing might be more likely and what does the timeline look like for the evaluation moving forward?

Peter Vanacker: We will have to be see, of course, how much of the two times five cents per pound price increases are out there, but at least you see the momentum in the North American markets, which should support I mean these price increases. Thank you.

Peter Vanacker: Thank you very much, Kevin. Good question. Of course, I mean, it's not a lot that in addition that we can disclose at this point in time, because we continue to keep all the options open.

Kevin Mccarthy: Our next question comes from a line of Kevin McCarthy with Vertical Research Partners. Please proceed with your question. Yes, thank you, and good morning. Peter, I appreciate the detail on slide eight regarding your ongoing review of the European asset footprint. Can you provide a little bit more color about how you arrived at these decisions, but perhaps more importantly, which of the three buckets that you outline in terms of upgrading profit, investing, or rationalizing. Might be, might be more likely. And what does the timeline look like for the evaluation moving forward? Thank you very much, Kevin.

Operator: Thank you. Our next question comes from the line of Kevin McCarthy with Vertical Research Partners. Please proceed with your question. Peter, I appreciate the detail on slide 8 regarding your ongoing review.

Operator: Our next question comes from the line of Kevin McCarthy with Vertical Research Partners. Please proceed with your question.

Peter Vanacker: but as you know we have made the announcement in the market so by having made the announcement in the market that allows us to also have discussions with potential other owners for those assets

Peter Vanacker: Now I need to differentiate a little bit, like you saw on slide number 8.

Peter Vanacker: One part is around propylene oxide, so the POSM units that we have in the mass flucter, which is a 50-50 joint venture with Covestro.

Peter Vanacker: So that is a bit different, of course, than if you compare, I mean, to the cracker slash PEPP sites that we have identified within the scope.

Peter Vanacker: Thank you very much, Kevin. A good question. Of course, I mean, there is not a lot that in addition we can disclose at this point in time because we continue to keep all the options open. But as you know, we have made the announcement in the market, so by having made the announcement in the market, that allows us to also have discussions with potential other owners for those assets. I need to differentiate a little bit, like you saw on slide number eight. One part is around propylene oxide, so the POSM units that we have in the mass flucter, which is a 50-50 joint venture with Covestro.

Peter Vanacker: Good question.

Peter Vanacker: Of course, I mean, it's not a lot that, in addition, we can disclose at this point in time because we continue to keep all the options open. But, as you know, we have made the announcement in the market. So, by having made the announcement in the market that allows us to also have discussions with potential other owners for those assets. Now, I need to differentiate a little bit like you saw on slide number eight. One part is around proplanoxides, so the POSM units that we have in the mass factor, which is a 50-50 joint venture with Covestro.

Peter Vanacker: so

Peter Vanacker: progressing well I would say we're not excluding any opportunity that we have at this point in time and one thing that I can say is we are very diligent we're laser focused

Peter Vanacker: and we will not delay the actions that need to be taken.

Peter Vanacker: Thank you.

Peter Vanacker: Our next question comes from the line of Josh Spector with UBS. Please proceed with your question.

Peter Vanacker: Good morning, everyone. It's Chris Perella on for Josh. Taking a look at the second half guidance, you know, the maintenance, thank you for the updated maintenance schedule. The maintenance looks relatively similar, half over half. I know there's the barrel impact. I was just trying to

Peter Vanacker: So that is a bit different, of course, than if you compare, I mean, to the cracker slash PEPP sites that we have identified within the scope. So progressing well, I would say, we're not excluding any opportunity that we have at this point in time. And one thing that I can say is we are very diligent; we're laser focused. And we will not delay the actions that need to be taken.

Peter Vanacker: So that is a bit different, of course, than if you compare it to the cracker slash PEPP sites that we have identified within the scope. So, progressing well, I would say.

Speaker Change: Could you add some more color on sort of the moving parts? Is it a seasonal decline in the earnings or weighing on the earnings in the second half? Or what's slowing the momentum that you saw in the second quarter there?

Peter Vanacker: We're not excluding any opportunity that we have at this point in time, and one thing that I can say is that we are very diligent. We're laser focused, and we will not delay the actions that need to be taken.

Speaker Change: Chris, thanks, good question.

Speaker Change: Well, we continue to see that there is momentum being built up. I talked already

Chris Perilla: Thank you. Our next question comes from Lionel Josh Spector with UBS. Please proceed with your question.

Chris Perella: a bit on PE

Operator: Our next question comes from the line of Josh Spector with UBS. Please proceed with your question. Good morning.

Chris Perella: So if you look at PE

Operator: Good morning, everyone. It's Chris Perala on for Josh. Taking a look at the second half guidance, you know, the maintenance, thank you for the updated maintenance schedule. The maintenance looks relatively similar, half over half. I know there's the barrel impact, but I was just trying to Could you add some more color on sort of the moving parts? Is it a seasonal decline in the area, or is it weighing on earnings in the second half? Or what's slowing the momentum that you saw in the second quarter there?

Speaker Change: You see that

Chris Perilla: Good morning, everyone. It's Chris Perilla on for Josh. Chris, taking a look at the second half guidance. You know, the maintenance. Thank you for the updated maintenance schedule. The maintenance looks relatively similar half over half. I know there's the barrel impact. I was just trying to. Could you add some more color on sort of the moving parts?

Speaker Change: Just the U.S. domestic demand in Q2 was up by 4% versus Q1, which, just to remind everybody, this is the strongest quarter since two years.

Speaker Change: Exports were up let's say around 8-9% versus May in June

Speaker Change: So they were these exports about the second highest, I mean, all time.

Peter Vanacker: Is it a seasonal decline in the area or, you know, weighing on the earnings in the second half, or what's slowing the momentum that you saw in the second quarter there? Chris, thanks. Good question. Well, we continue to see that there is momentum being built up. I talked already a bit on PE. So if you look at PE, you see that just the US domestic demand in Q2 was up by 4% versus Q1. Which, just to remind everybody, this is the strongest quarter since two years. Exports were up, let's say around eight, nine percent versus May in June.

Speaker Change: And I alluded to the price increases that we have in the marketplace.

Speaker Change: The same is also a bit valid, I mean, on polypropylene, so we...

Peter Vanacker: Chris, thanks, good question. Well, we continue to see that there is momentum being built up. I talked a bit about PE already. So if you look at PE, You see that. Just U.S. domestic demand in Q2 was up by 4% versus Q1, which, just to remind everybody, this is the strongest quarter in two years. X-Force was at, Let's say around 8-9% versus May and June. So they were these exports about the second highest, I mean, all time. And I alluded to the price increases that we have in the marketplace. The same is also quite valid, I mean on polypropylene.

Speaker Change: I mean demand continues to improve of course we're still waiting for inflation rates to go down.

Speaker Change: We're still waiting as a consequence for interest rates to go down so that consumer confidence would go up, especially for durable goods.

Speaker Change: But in polypropylene, we see that even if consumer confidence remains low, that there is a bit of improvements already in some other areas like rigid packaging, seats, films.

Peter Vanacker: So they were these exports about the second highest, I mean, all time. And I alluded to the price increases that we have in the marketplace. The same is also a bit valid. I mean, on purple on polypropylene. So we. I mean, demands continues to improve. Of course, we're still waiting here for inflation rates to go down. We're still waiting as a consequence for interest rates to go down so that consumer confidence would go up, especially for durable goods. But in polypropylene, we see that even if consumer confidence remains low, there is a bit of improvements already in some other areas like rigid packaging, see it films. Our other book is also quite full on polyethylene and polypropylene, so we're happy with that as well.

Speaker Change: Our order book is also quite full on polyethylene and polypropylene, so we're happy with that as well.

Speaker Change: The main issue that continues to be is around China.

Speaker Change: China demand we have seen slowly going up. We think around 4-5% locally, but that is being absorbed with the additional capacity that is coming on stream.

Peter Vanacker: So we, I mean, demands continue to improve, of course, but we're still waiting for inflation rates to go down. As a consequence, we're still waiting for interest rates to go down, so that consumer confidence would go up, especially for durable goods. But in polypropylene, we see that even if consumer confidence remains low, there is a bit of improvement already in some other areas like rigid packaging, seats, and films. Our order book is also quite full on polyethylene and polypropylene, so we're happy with that as well.

Speaker Change: Europe continues to be soft.

Speaker Change: But then there is some encouraging messages, numbers that we see especially on the southern part of Europe , the southern countries with higher GDP growth, higher demands.

Speaker Change: And we see that inflation rates continue to slowly go down in Europe as well.

Speaker Change: So if you look at everything together...

Speaker Change: We see a slow increase, a continued increase in terms of demand.

Peter Vanacker: The main issue that continues to be is around China. China demands we have seen slowly growing up. We think around four, five percent locally, but that is being absorbed with the additional capacity that is coming on stream. Europe continues to be soft, but then there are some encouraging messages, numbers that we see, especially on the southern part of Europe, the southern countries with higher GDP growth, higher demands, and we see that inflation rates continue to slowly go down in Europe as well. So if you look at everything together, we see a slow increase, a continued increase in terms of demands.

Peter Vanacker: The main issue that continues to be is around China. Chinese demand has been slowly going up, we think around 4-5% locally, but that is being absorbed with the additional capacity that is coming on stream. Europe continues to be soft, but there are some encouraging messages, numbers that we see, especially in the southern part of Europe, the southern countries, with higher GDP growth, and higher demands. And we see that inflation rates continue to slowly go down in Europe as well.

Speaker Change: So if you talk about these capacity utilization percentages, and Michael made some clarifications on that.

Speaker Change: It's not so much I mean for the second half of the year because we see and we are worried about demand growth it's mainly because of our own actions that we have because if you have a schedule turnarounds on

Speaker Change: our big cracker that we have in in in Westerling in Europe

Speaker Change: Well, of course, I mean, that gives you a lesser capacity that you have available.

Speaker Change: But rest assured, I mean, we continue to see continuous

Peter Vanacker: So if you look at everything together, we see a slow increase, a continued increase in terms of demands. So if you talk about these capacity utilization percentages, And Michael made some clarifications on that. It's not so much what I mean for the second half of the year because we see, and we are worried about, demand growth. It's mainly because of our own actions that we have, because if you have a schedule turnaround on, our big cracker that we have in in whistling in Europe, Well, of course, I mean, that gives you less capacity that you have available. But rest assured, I mean, we continue to see progress. Slow but good momentum, steady momentum in terms of demand creation. So flattish to flattish.

Speaker Change: Slow but good momentum, steady momentum in terms of demand creation.

Speaker Change: So, flattest to Q3, slightly up, second half versus first half, and then Chris, you know that seasonally, the first and fourth quarters tend to be the weakest, with seasonally the second and third the strongest, just as a reminder.

Peter Vanacker: So if you talk about these capacity utilization percentages and Michael made some clarifications on that, it's not so much I mean for a second half of the year because we see and we are worried about demands growth.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Hassan Ahmed with Alembic Global. Please proceed with your question.

Peter Vanacker: It's mainly because of our own actions that we have because if you have a scheduled turnaround on our big cracker that we have in Wetteling in Europe, well of course I mean that gives you lesser capacity that you have available. But rest assured, I mean we continue to see continuous, slow but good momentum, steady momentum in terms of demand creation.

Hassan Ahmed: Morning, Peter. You know, joined the call late, so apologies if this question's been asked before. But, you know, a question around the IND side of things. You know, historically, the EBITDA in that segment used to be quite stable, and then...

Speaker Change: Over the last year or two, you know, there was some volatility there as well, and obviously you guys saw a nice bump up in EBITDA this quarter. You know, partly obviously driven by the oxy-fuel side of things. Just trying to sort of...

Peter Vanacker: So, flattish to Q3, slightly up, second half versus first half, and then Chris, you know that seasonally, the first and fourth quarters tend to be the weakest, with seasonally, the second and third being the strongest, just as a reminder.

Peter Vanacker: So flat is to queue three, slightly up, second half versus first half, and then Chris you know that seasonally the first and fourth quarters tend to be the weakest, with seasonally the second and third the strongest, just as a reminder. Thank you.

Speaker Change: Suss out what, you know, how you guys think about the sustainability of these profitability levels and the, you know, historically, a continuation of the historically sort of steady-eady nature of this business.

Hassan Ahmed: Our next question comes from a line of Hasan Ahmed with Olympic Global. Please see with your question.

Operator: Our next question comes from the line of Hassan Ahmed with Alembic Global. Please proceed with your question.

Speaker Change: Thank you Hassan, thank you for your question. I made a couple of remarks, I mean it was more around propylene oxide.

Peter Vanacker: Morning Peter, you know joined the call late so apologies if this question's been asked before but you know a question around the IND side of things you know historically the EBITDA in that segment used to be quite stable and then over the last year or two you know there was some volatility there as well and obviously you guys saw a nice bump up in EBITDA this quarter you know partly obviously driven by the oxyfuel side of things I'm just trying to sort of suss out what you know how you guys think about the sustainability of these profitability levels and the you know historically a continuation of the historically sort of steady eddy nature of this business

Hassan Ahmed: Morning Peter, you know join the call late, so apologies if there are questions been asked before, but you know question around the I and D side of things. You know historically the EBITDA in that segment used to be quite stable, and then over the last year or two, you know there was some volatility there as well, and obviously you guys saw a nice bump up in EBITDA this quarter. You know, partly obviously driven by the oxy fuel side of things, just trying to sort of suss out what you know how you guys think about the sustainability of these possibility levels.

Aaron: But maybe I hand over since I have Aaron also in the room here and he's heading the IND business as you know that he can make a couple of additional comments around.

Aaron: the PEO, the Oxyfuse business

Aaron: Thank you Peter, I appreciate it and thanks for the question Hassan. I'd point to a couple of different things. I agree with your comment about IND

Speaker Change: Historical earnings being very steady. We sold the EOND business in the second quarter, so you have to consider removing that from that profile. However, we've added the POTBA facility, and we're now operating that facility better than planned rates, close to benchmark.

Aaron Ledet: And the, you know, historically, a continuation of the historically sort of steady ED nature of this business. Thank you, Hasan. Thank you for your question. I made a couple of remarks. I mean it was more around proper enough sites.

Speaker Change: As I look forward, given the challenges that we're currently seeing with durable demand, specifically in automotive housing and construction, we are optimizing our PO assets according to technology.

Peter Vanacker: Thank you, Hassan. Thank you for your question. I made a couple of remarks. I mean, it was more around propylene oxide.

Aaron Ledet: But maybe I hand over since I have Aaron also in the room here and he's heading the I and D business, as you know, that he can make a couple of additional comments around the PO, the oxy fuels business. Yeah, thank you, Peter. I appreciate it. And next for the question is on that I'd point to a couple of different things. I agree with your comment about I and D historical earnings being very steady. We sold the EEL and D business in the second quarter. So you have to consider removing that from that profile. However, we've added the PO TVA facility, and we're now operating that facility better than plan rates, close to benchmark.

Speaker Change: We've already talked to the benefit that we see with POTVA, and that's why we're running all of those assets close to benchmark, with POSM assets being more like swing assets to meet supply with demand.

Peter Vanacker: But maybe I can hand over since I have Aaron also in the room here, and he's heading the IND business, as you know, so he can make a couple of additional comments on the PO, the oxygen fuels business. Sure. Yeah.

Aaron Ledet: I'd point to a couple of different things. First of all, I agree with your comment about IND's historical earnings being very steady. We sold the EOND business in the second quarter, so you have to consider removing that from that profile. However, we've added the POTBA facility, and we're now operating that facility at better than planned rates, close to benchmark. As I look forward, given the challenges that we're currently seeing with durable demand, specifically in automotive housing and construction, we're optimizing our PO assets according to technology.

Aaron Ledet: Yeah, thank you, Peter. I appreciate it. And thanks for the question, Hassan.

Speaker Change: When you're looking specifically at POSM, we would actually prioritize our U.S. assets, just giving our cost position, and that's why the comment that Michael made earlier on P.O. 11 being idled in August , it's reflecting current demand in the region.

Speaker Change: That being said, I still expect that IND remains steady going forward.

Aaron Ledet: As I look forward, given that the challenges that we're currently seeing with durable demand, specifically in automotive, housing, and construction. We're optimizing our PO assets according to technology. We've already talked to the benefit that we see with PO TVA, and that's why we're running all of those assets close to benchmark with POSMS that's being more like swing assets to meet supply with demand. And when you're looking specifically at possum, we would actually prioritize our US assets just giving our cost position, and that's why the comment that Michael made earlier on PO 11 being idled in August.

Speaker Change: I mentioned earlier in my answer to the previous question that

Speaker Change: With interest rates potentially coming down, we do see some potential upside. That's not currently built into our forecast, and it won't be immediate, but we do see some potential upside there.

Aaron Ledet: We've already talked about the benefit that we see with POTBA, and that's why we're running all of those assets close to benchmark, with POSM assets being more like swing assets to meet supply with demand. When you're looking specifically at POSM, we would actually prioritize our U.S. assets, just given our cost position, and that's why the comment that Michael made earlier on PO-11 being idled in August; it's reflecting current demand in the region.

Speaker Change: of course we're very well positioned because we have that new POTBA plant that is running very well so if durable good demand

Speaker Change: starts moving up, then we have the capacity available to fulfill the demand.

Speaker Change: Thank you. Our next question comes from the line of Chris Parkinson with Wolf Research. Please proceed with your question.

Aaron Ledet: It's reflecting current demand in the region.

Aaron Ledet: That being said, I still expect that IND remains steady going forward. I mentioned earlier in my answer to the previous question that with interest rates potentially coming down, we do see some potential upside. That's not currently built into our forecast, and it won't be immediate, but we do see some potential upside there. And, of course, we have done very well.

Aaron Ledet: That being said, I still expect that I and D remain steady going forward. I mentioned earlier in my answer to the previous question that, with interest rates potentially coming down, we do see some potential upside. That's not currently built into our forecast. It won't be immediate, but we do see some potential upside there. Of course, we're very well positioned because we have that new PO-TBA plans that is running very well. So, if durable, good demand starts moving up, then we have the capacity available to fulfill the demand.

Chris Parkinson: Great, thank you so much. I just want to dive in a little bit more into polypropylene dynamics. I mean, it seems like U.S. supplies are plateauing towards the end of the decade, but you have seen increases in other regions of the world.

Speaker Change: So just in terms of how you're thinking about the...

Speaker Change: The supply and demand dynamics on that front, as well as your current use of feedstock costs would be particularly helpful to hear you think about the business as we go into 25. Thank you so much.

Aaron Ledet: Of course, we are very well positioned because we have that new POTBA plant that is running very well, so if durable goods demand starts moving up, then we have the capacity available to fulfill the demand. Thank you. Our next question comes from the line of Chris Parkinson with Wolf Research. Please proceed with your question. Great, thank you so much. I just want to dive in a little bit more into...

Kim Foley: Thank you, Chris. I mean, before I hand over to Kim, let me elaborate also that we

Speaker Change: So despite the fact I mean that really durable goods is demand is not really yet going up substantially but domestic domestic demand in the United States for polypropylene was up about 5% versus Q1

Chris Parkinson: Thank you. Our next question comes from the line of Chris Parkinson with Wolf Research. Please proceed with your question. Great. Thank you so much. I just want to dive in a little bit more into polypropylene dynamics. I mean, it seems like U.S. supplies are telling you towards the end of the decade, but you have seen increases in other regions of the world. So just in terms of how you're thinking about the supply demand dynamics on that front, as well as your current use of feed stock costs, would be particularly helpful to, you know, do you think about the business as we go into 25.

Operator: Thank you. Our next question comes from the line of Chris Parkinson with Wolf Research. Please proceed with your question.

Kim Foley: Which means that this is the strongest quarter in polypropylene that we have seen since Q3 2021. So with that, Kim?

Kim Foley: So Peter, I guess what I would add to that is when you ask about the overall kind of global dynamics, you've seen a lot of growth in polypropylene, specifically in China, over the last couple years.

Speaker Change: So what you're seeing play out is more of a regional market, it's much less of an export market than what you see in polyethylene, polypropylene.

Chris Parkinson: Thank you so much.

Peter Vanacker: Thank you, Chris. I mean, before I hand over to Kim, let me allow you to elaborate also that we saw, despite the fact I mean that really durable goods is demand is not really yet going up substantially, but the domestic domestic demand in the United States for polypropylene was about 5% versus Q1, which means that this is the strongest quarter in polypropylene that we have seen since Q3 2021.

Peter Vanacker: Thank you, Chris. I mean, before I hand over to Kim, let me elaborate also that, despite the fact that, I mean, that really durable goods demand is not really yet going up substantially, but domestic domestic demand in the United States for polypropylene was up about 5% versus Q1. Which means that this is the strongest quarter for polypropylene that we have seen since Q3 2021. So with that, Kim?

Speaker Change: You know, just to compare and contrast, polypropylene, you may export 8 to 10 percent in the U.S. versus polyethylene, where it would be more like 40 or 50 percent.

Speaker Change: So it's a much more regional dynamic, and that dynamic is based on the feedstock, to your question around feedstocks. So what is your cost of propylene in different parts of the world, whether you're getting it from refining, whether you're getting it from on-purpose PDH units?

Kim Foley: So, with that, Kim. So Peter, I guess what I would add to that is when you ask about the overall kind of global dynamics, you've seen a lot of growth in polypropylene, specifically in China over the last couple of years. So what you're seeing play out is more of a regional market. You're it's much less of an export market than what you see in polyethylene polypropylene. You know, just to compare and contrast polypropylene, you may export 8 to 10% in the US versus polyethylene, where it would be more like 40 or 50%. So it's a much more regional dynamic, and that dynamic is based on the feedstock to your question around feedstocks.

Speaker Change: And then the thing that's really an interesting dynamic in North America, specifically right now, is the reliability of that supply of propylene. There's been a lot of PDH capacity that's been brought online.

Kim Foley: So Peter, I guess what I would add to that is when you ask about the overall kind of global dynamics, you've seen a lot of growth in polypropylene, specifically in China, over the last couple years. So what you're seeing play out is more of a regional market.

Speaker Change: As people have been phasing out propylene coming out of elephant crackers as they've gone to lighter ethane feedstocks. So you see on-purpose PDH having reliability problems and you're seeing higher, what we would call, propylene grade.

Kim Foley: It's much less of an export market than what you see in polyethylene. Just to compare and contrast, polypropylene you may export 8 to 10% in the U.S. versus polyethylene, where it would be more like 40 or 50%. So it's a much more regional dynamic, and that dynamic is based on the feedstock, to your question about feedstocks. So what is your cost of propylene in different parts of the world? Whether you're getting it from refining or whether you're getting it from on-purpose PDH units,

Speaker Change: Polypropylene causing the problems. So I hope that answers your question. I apologize. There were some other things going on here in the room.

Speaker Change: All good. Very much so. Thank you so much.

Kim Foley: So what is your cost of propylene in different parts of the world, whether you're getting it from refining, whether you're getting it from on purpose, PDH units. And then the thing that's really an interesting dynamic in North America, specifically right now, is the reliability of that supply of propylene. There's been a lot of PDH capacity that's been brought online as people have been phasing out propylene coming out of olefins crackers as they've gone to lighter ethane feedstocks. So you see on purpose PDH having reliability problems, and you're seeing higher what we would call propylene grade polypropylene causing the problems. So I hope that answers your question that apologize.

Speaker Change: And Chris, we also have a spread improvement price increase, I mean that is on the table in the market for North America for July of three cents per pound on polypropylene.

Kim Foley: And then the thing that's really an interesting dynamic in North America specifically right now is the reliability of that supply of propylene. There's been a lot of PDH capacity that's been brought online as people have been phasing out propylene coming out of olefin crackers as they've gone to lighter ethane feedstocks. So you see on-purpose PDH having reliability problems, and you're seeing higher, what we would call propylene grade. Polypropylene is causing the problems.

Speaker Change: That's all. Thank you.

Speaker Change: Thank you.

Speaker Change: Our last question comes to the line of Vincent Andrews with Morgan Stanley . Please proceed with your question.

Turner Henricks: Hi, this is Turner Hendricks on for Vincent. It looked like in EAI you ran at 60% NAPTHA when I think you can run typically with more propane. Was that because there were attractive NAPTHA co-product values or something else?

Kim Foley: So I hope that answers your question. I apologize. There were some other things going on here in the room. All good. Very much so. Thank you so much.

Peter Vanacker: There was some other things going on here in the room. I'll get very much so. Thank you so much. Chris, we also have a spread improvement price increase. I mean that is on the table in the market for North America for July of three cents per pound on polypropylene. I saw. Thank you.

Speaker Change: Yes. Your simple answer is yes. There were very good co-product values, especially in butadiene.

Operator: And Chris, we also have a spread improvement price increase on the table for North America for July of three cents per pound on polypropylene. That's all. Thank you. Thank you.

Speaker Change: as well as we felt that that was the best optimization of our European crackers at the time.

Speaker Change: As we've said in the past, and you know, we'll just reiterate it because I think it's very important, whether it's in Europe or in the U.S., we are always looking week-to-week to optimize the feedstock slate of our crackers and produce the best value for LYB.

Vincent Andrews: Our last question comes to the line of Vincent Andrews with Morgan Stanley. Please proceed with your question. Hi, this is Turner Hendricks on for Vincent. It looked like in EAI, you ran at 60% NAFTA when I think you can run typically with more propane. Was that because there were attractive NAFTA co-product values, or something else? Yes, the simple answer is yes. There were very good co-product values, especially in view to dying. As well as we felt that that was the best optimization of our European crackers at the time.

Operator: Our last question comes from the line of Vincent Andrews with Morgan Stanley. Please proceed with your question. Hi, this is Turner Enrich.

Speaker Change: It's not always ethylene, sometimes it's the co-product.

Speaker Change: Thank you.

Speaker Change: We have reached the end of the question and answer session. I'll turn back over to Mr. Vanacker for closing comments.

Mr. Vanacker: Yes, thank you very much. Excuse me. Thank you again for all of the thoughtful questions.

Operator: Yes, the simple answer is yes. There were very good co-product values, especially in butadiene, as well as, we felt that that was the best optimization of our European crackers at the time. As we've said in the past, and I'll just reiterate it because I think it's very important, whether it's in Europe or in the U.S., we are always looking week to week to optimize the feedstock slate of our crackers and produce the best value for LYB. It's not always ethylene; sometimes it's the co-product.

Mr. Vanacker: Let me maybe still articulate a couple of key messages of this call.

Mr. Vanacker: I believe that we are making excellent progress on our strategy to make LYB a much more focused company with a leading, advantaged asset portfolio as well as product mix.

Kim Foley: As we've said in the past and we'll reiterate it because I think it's very important, whether it's in Europe or in the US, we are always looking week to week to optimize the feedstock slate of our crackers and produce the best value for LYB. It's not always happening; sometimes, as the co-clatic. Thank you.

Mr. Vanacker: And why am I saying that? I mean, first of all, we're making good progress on our goal to add $3 billion in incremental normalized EBITDA by 2027.

Mr. Vanacker: Secondly, you see that we have clear actions to increase our historical average EBITDA margin from 18% to above 22%.

Operator: We have reached the end of the question in our session.

Operator: We have reached the end of the question and answer session. I'll turn back over to Mr. Vanacker for closing comments.

Peter Vanacker: I'll turn back over to Mr. Vannecker for closing comments. Yes, thank you very much. Thank you again for all of the thoughtful questions. Let me maybe still articulate a couple of key messages of this call.

Mr. Vanacker: Third, our second quarter total capital return yield at six percent.

Peter Vanacker: Yes, thank you very much. Excuse me.

Mr. Vanacker: That we have due to an increased dividend and also some share buybacks is, I think, quite state of the art.

Peter Vanacker: Thank you again for all of the thoughtful questions. Let me maybe still articulate a couple of key messages from this call. I believe that we are making excellent progress on our strategy to make LYB a much more focused company with a leading advantaged asset portfolio as well as a product mix. And why am I saying that?

Speaker Change: and Ford

Speaker Change: Our current cost-advantaged operations in feedstock-advantaged regions without our refining is already about 60% of LyondellBasell's production volume.

Peter Vanacker: I believe that we are making excellent progress on our strategy to make LYB a much more focused company with a leading, advantaged asset portfolio as well as product mix. And why am I saying that? I mean, first of all, we're making good progress on our goal to add $3 billion in incremental normalized evidence by 2027. Secondly, you see that we have clear actions to increase over historical average EBITDA margin from 18% to above 22%. Third, our second quarter total capital return yield at 6% that we have due to an increased dividend and also some share buybacks is, I think, quite state of the art.

Speaker Change: And after we have implemented our European strategic assessment, we expect that that will grow to around 70%, so let's say in a couple of years.

Peter Vanacker: I mean, first of all, we're making good progress on our goal to add $3 billion in incremental normalized EBITDA by 2027. Secondly, you see that we have clear actions to increase our historical average EBITDA margin from 18% to above 22%. Third, our second quarter total capital return yield of 6%, that we have due to an increased dividend and also some share buybacks, is, I think, quite state of the art.

Speaker Change: So of course we look forward to sharing updates over the coming months as we continue to make progress on all aspects of our long-term strategy.

Speaker Change: We hope you all have a great weekend. Stay well, stay healthy and stay safe. Thank you very much.

Speaker Change: And this concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.

Peter Vanacker: And for our current cost advantage operations in feedstock advantage regions without our refining, is already about 60% of LYB's production volume. And after we have implemented our European strategic assessment, we expect that that will grow to around 70%, so let's say in a couple of years.

Peter Vanacker: So, of course, we look forward to sharing updates over the coming months as we continue to make progress on all aspects of our long-term strategy. We hope you all have a great weekend. Stay well, stay healthy, and stay safe. Thank you very much.

Operator: And this concludes today's conference, and you made us connect your lines at this time. Thank you for your participation. I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know I know