WLK
Focused Approach to Delivering Value and Growth
Westlake Overview
A leading producer of performance oriented and essential materials as well as North American building products that benefits from a globally competitive low-cost position
Financial Performance
LTM Sep 30th, 2024
$12.1B
19%
Revenue
EBITDA Margin(1,2)
$2.3B
$1.7B
EBITDA(1)
Net Income (1)
Balance Sheet & Cash Flow
LTM Sep 30th, 2024
0.75x
$1.5B
Net Debt to EBITDA(1)
Operating Cash Flows
~16 Years
64%
Avg. Debt Maturity
Cash Flow Conversion(3)
80+
15,920
~16%
Manufacturing
Employees
Sales CAGR
Facilities
(1986-2023)
Sales Breakout
36%
PEM
22%
N. America
78%
64% Segment
Region
International
HIP
Strong Financials and Balance Sheet With Leadership Positions Across Several End Markets
Leveraging Market Leading Segments in Attractive Markets
Housing &
Performance &
Infrastructure
Essential Materials
$4.3B
Revenue
(LTM 3Q'24)
Key Stats
24%(2)
EBITDA
Margin (LTM
3Q'24)
50+
Manufacturing
Sites
$7.8B
Revenue
(LTM 3Q'24)
Key Stats
15%(1,2)
EBITDA
Margin (LTM
3Q'24)
30
Production
Sites
Leadership Positions
HIP Segments
N.A. Building Products
Housing (~$3.6B)
#1 Premium PVC & Poly-ash Trim
• Building Products
#1 Non-wood Shutters
• Residential Pipe, Fittings, and
#3 PVC and Premium Siding
Global Compounds
N.A. PVC Markets
• Recycled Consumer Products
#1 PVC Compounds
#2 PVC Pipe and Fittings
Infrastructure (~$0.7B)
N.A. Roofing
• Infrastructure Pipe and Fittings
#1 Clay and Concrete Tile
• Medical and Automotive Markets
#1 Composite Roofing
#2 Stone Coated Metal Roofing
N.A. Stone and Windows
#1 Architectural Stone Veneer
#2 Texas New Construction Windows
Leadership Positions
Chlorovinyls
#1 Global Combined Chlorovinyls
#2 Global Chlor-Alkali, PVC, and
Specialty PVC
Polyethylene
#1 Specialty Co-Polymer and
N.A. Autoclave Polyethylene
#2 N.A. Low Density Polyethylene
Epoxy
#1 Specialty for Wind Energy
#2 Specialty for European Aerospace #2 Specialty for N.A. Automotive #2 N.A & European Liquid
Epoxy Resin
PEM Segments
Performance (~$4.6B)
Essential (~$3.2B)
Source: Chemical Market Analytics.
3
(1)
Excludes "Identified Items" consisting of a $475 million non-cash impairment charge, a $150 million charge to fully resolve certain claims and $75 million of mothball costs See pages 30-35 for a reconciliation
(2)
EBITDA Margin is EBITDA excluding identified items divided by Net External Sales
High Degree of Product Integration
Combined With Globally Advantaged Low-Cost Position
North America has a long-term cost advantaged position through abundant supply of Ethane from shale, electricity from natural gas and ample salt compared to global markets
Integration from feedstock to final product captures margin across the production chain and throughout the
All ethane feedstock capability
Ethylene
4.8B lbs
North American
Merchant
Ethylene
Purchases
Polyethylene
2.6B lbs
Styrene
570M lbs
Vinyls
End Market Products that Improve Lives Every Day:
•
Flooring
•
Artificial leather
•
Roofing
•
Fencing
economic cycle enhancing margin stability
Westlake products serve key market trends in:
Chlorine
7.4B lbs
~1.1B lbs
PVCHIP
7.8B lbs
Products
•
Wallpaper
•
Decking
•
Films
•
Siding
•
Coating
•
Pipe
• Automotive
Caustic
Base Epoxy Resins
Soda
and Intermediates
8.1B lbs
1.3B lbs
Chlorinated Products
2.2B lbs
Epoxy Specialty Resins
580M lbs
•
Pulp & paper
•
Glass
•
Alumina
•
Wind power
•
Aviation
•
Automotive
•
Coatings
4
Benefits of Integrated HIP and PEM Portfolio
More Stability in Earnings and Cashflow
Enhances Product Innovation Across Both Segments
Westlake's Cashflow Profile Supports Strategic Growth
HIP Creates New Opportunities In Which to Apply Proven M&A Skills
Performance & Essential Materials
Combined Segments Offer Lower
Volatility and Greater Reliability to
Westlake Investors and Customers
Housing & Infrastructure Products
5
Westlake is a Compelling Investment Opportunity
1
2
3
4
5
Strong and experienced leadership with a proven track record of operating excellence, asset allocation, and successful acquisitions and integrations all driving long-term value creation
Market leading position in Housing & Infrastructure Products (HIP) driving strong customer selection from high-valued, strong brand name product offerings with attractive long term fundamentals in housing, repair & remodeling, and infrastructure markets
Capturing margins across the value chain in Performance and Essential Materials (PEM) by leveraging its leading market positions, globally advantaged feedstock and energy cost, and the benefits of vertical integration
Well positioned to execute on a portfolio of opportunities across both segments by leveraging a proven system of operational excellence and value creative capital allocation
Disciplined investment culture and a strong balance sheet provide the ability to weather economic cycles and generate strategic bottom line growth
6
HIP At-a-Glance: Diverse Portfolio with
Broad Market Exposure In Which Every Piece Matters
$4.3B HIP Total Revenue1
$3.6B
Housing
Siding, Trim, & Shutters
•
Premium housing siding
Roofing
•
Premium clay, composite, concrete, and
stone-coated metal roofing
Decorative Stone
• Exterior and interior premium
decorative stone
Windows
•
New construction windows
Pipe & Fittings
•
Fresh water
PVC Compounds
•
Electrical
$0.7B
Infrastructure
Pipe & Fittings
• Fresh water and sewer
•
Agriculture irrigation
PVC Compounds
•
Automotive and aerospace
•
Medical
Westlake Royal Building Products' revenue, which is all Housing-related, comprises approximately half of HIP's annual revenue
Westlake Pipe & Fittings' revenue, which is both Housing- and Infrastructure-related, is the next largest component of HIP's annual revenue
Westlake Global Compounds' revenue is both Housing- and Infrastructure-related
~21,800
45
70
34
~62,000
~8,100
Customers (2)
Distribution
Manufacturing
Market Segment /
SKUs
Employees
Centers
Sites
Product Categories
(1)
Revenue is for the twelve-month period ended September 30, 2024
7
(2)
Current data for Westlake Housing and Infrastructure Products ("HIP")
Westlake Royal Building Products At-A-Glance
~18,000
Customers2
41
Manufacturing
Sites
20
Market Segment / Product Categories
~30,400
SKUs
~5,300
Employees
Growth Drivers
o
Work from home
o
Outdoor living
CONSTRUCTION VS. REMODEL
New
Residential
50% Revenue1 50%
Construction
Repair &
Remodel
ONE-STEP VS. TWO-STEP DISTRIBUTION
• Replacing alternative products due to significant
competitive differentiators
o Curb appeal
29%
Revenue1
One-Step
Two-Step
71%
8
Westlake Pipe and Fittings At-a-Glance
~2,700
Customers3
15
Distribution
Centers
15
Manufacturing
Sites
6
Market
Segments
>30,000
SKUs
~1,700
Employees
North American Growth Drivers
Municipal and Government spending for infrastructure enhancement
Historical under build in new housing + favorable demographics: John Burns estimates 18.6M new houses needed in U.S. over next 10 years1
Growing demand for agricultural irrigation
Strategic Footprint
Approximate Areas
Pipe MFG
Fittings MFG
of High Single-Family
Permits Growth2
Distribution
9
Westlake Global Compounds At-a-Glance
1,605
Compounds2
12
R&D
Facilities
60
Countries
Served
14
Manufacturing
Sites
1,150
Customers
~1,100
Employees
Developer of specialty compounds providing highly customizable solutions to specific customer challenges
Attractive end markets, including building products, industrial products, consumer goods, automotive, and healthcare
Competitive advantages:
Revenue1
46% Geography1 54% US
International
11%
1%
Building Products
12%
End
Automotive
Markets1
Healthcare
Other
76%
10
Disclaimer
Westlake Chemical Corporation published this content on November 11, 2024, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on November 11, 2024 at 20:21:01.140.