false000126282300012628232024-08-062024-08-060001262823us-gaap:CommonStockMember2024-08-062024-08-060001262823wlk:OnePointSixTwoFivePercentageSeniorNotesDueTwentyTwentyNineMemberDomain2024-08-062024-08-06

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): August 6, 2024

Westlake Corporation
(Exact name of registrant as specified in its charter)

Delaware001-3226076-0346924
(State or other jurisdiction
of incorporation)		(Commission File Number)(I.R.S. Employer
Identification No.)

2801 Post Oak Boulevard, Suite 600
Houston, Texas77056
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: (713) 960-9111

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par valueWLKThe New York Stock Exchange
1.625% Senior Notes due 2029WLK29The New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company ☐


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻





Item 2.02. Results of Operations and Financial Condition.
On August 6, 2024, Westlake Corporation (the "Company"), issued a press release announcing its 2024 second quarter results. A copy of the press release is furnished with this Current Report as Exhibit 99.1.
The information furnished pursuant to this Current Report, including Exhibit 99.1, shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any registration statement filed by Westlake Corporation under the Securities Act of 1933, as amended, unless specifically identified as being incorporated therein.
Item 7.01. Regulation FD Disclosure.
The Company is holding a conference call on August 6, 2024 to discuss its 2024 second quarter results. Information about the call can be found in the press release furnished with this Current Report as Exhibit 99.1. In addition, the Company made available an investor presentation regarding its 2024 second quarter results, which is furnished with this Current Report as Exhibit 99.2.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are furnished herewith:
104    The cover page from this Current Report on Form 8-K, formatted in Inline XBRL.



SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

WESTLAKE CORPORATION
Date:August 6, 2024By:
/S/ JEAN-MARC GILSON
Jean-Marc Gilson
President and Chief Executive Officer





EXHIBIT 99.1
WESTLAKE CORPORATION

Contact—(713) 960-9111
Investors—Steve Bender
Media—L. Benjamin Ederington


Westlake Corporation Reports Second Quarter 2024 Results
•Record Housing and Infrastructure Products (HIP) segment income from operations of $266 million
•Record HIP segment EBITDA of $336 million
•Sequential increases in Performance and Essential Materials (PEM) segment earnings and margins
HOUSTON--(BUSINESS WIRE)--Westlake Corporation (NYSE: WLK) (the "Company" or "Westlake") today announced second quarter 2024 results.

SUMMARY FINANCIAL HIGHLIGHTS (in millions of dollars, except per share data and percentages)
Three Months Ended June 30, 2024Three Months Ended March 31, 2024Three Months Ended June 30, 2023
Westlake Corporation
Net sales$3,207$2,975$3,251
Income from operations
$406$223$396
Operating income margin13%7%12%
Net income attributable to Westlake Corporation
$313$174$297
Diluted earnings per common share
$2.40$1.34$2.31
EBITDA$744$546$690
EBITDA margin23%18%21%
Performance and Essential Materials ("PEM") Segment
Net sales$2,013$1,931$2,136
Income from operations
$157$22$215
Operating income margin8%1%10%
EBITDA$391$253$435
EBITDA margin19%13%20%
Housing and Infrastructure Products ("HIP") Segment
Net sales$1,194$1,044$1,115
Income from operations$266$210$190
Operating income margin22%20%17%
EBITDA$336$264$244
EBITDA margin28%25%22%
i

BUSINESS HIGHLIGHTS
In the second quarter of 2024, Westlake achieved net sales of $3.2 billion, net income of $313 million and EBITDA (earnings before interest expense, income taxes, depreciation and amortization) of $744 million. These results were driven by strong demand for most products in the Company's HIP segment, and higher average sales price in the PEM segment as compared to the first quarter of 2024.

Second quarter HIP sales volume increased 15% from the first quarter of 2024 while PEM sales volume increased 1% quarter-over-quarter. Overall sales volume for the Company increased 6% sequentially from the previous quarter.

HIP's second quarter average sales price was flat compared to the first quarter of 2024 while PEM's average sales price increased 4% quarter-over-quarter. Overall average sales price for the Company increased 2% sequentially from the previous quarter.

HIP's second quarter EBITDA margin increased to 28% from 25% in the first quarter of 2024, while PEM's EBITDA margin increased to 19% from 13% over the same period of time.
EXECUTIVE COMMENTARY
"We are pleased with our financial results for the second quarter of 2024, highlighted by record HIP EBITDA and margins as well as improved pricing and profitability in the PEM segment. Combined, these factors enabled us to deliver year-over-year quarterly earnings growth following the slowdown in global macroeconomic activity that began in the second half of 2022. Our HIP businesses continue to perform exceptionally well due in part to our product portfolio as well as our focus and position in segments of the market that have outperformed the broader industry. While global industrial and manufacturing activity remains sluggish, conditions in our PEM segment have stabilized and we are encouraged by recent trends reflecting improved demand and higher average sales price for most major products, which is driving a recovery in our margins," said Albert Chao, Executive Chairman.

"Looking ahead, conditions in our HIP segment should continue to be supported by favorable structural factors, including the decade-long under-investment in housing that followed the financial crisis, population growth, an aging housing stock and increasing investments in infrastructure driven by the Infrastructure and Jobs Act. While the improvement in global industrial and manufacturing conditions has been modest, we are taking steps to enhance PEM segment profitability, including our recently announced plan to temporarily cease operations at two units within our European epoxy business to align our manufacturing footprint and costs with changing global conditions," continued Mr. Chao.

"Finally, we are excited to welcome Jean-Marc Gilson as President and CEO of Westlake. Jean-Marc brings a wealth of experience to the Company to build upon our solid foundation and lead Westlake for years to come," concluded Mr. Chao.

"After my first few weeks I look forward to helping drive Westlake forward and execute on our strategy while embracing the culture and continuing the focus on creating long-term value for shareholders," said Jean-Marc Gilson, President and Chief Executive Officer.
RESULTS
Consolidated Results
For the second quarter of 2024, the Company reported net income of $313 million, or $2.40 per share, on net sales of $3.2 billion. The year-over-year increase in net income of $16 million was primarily due to higher sales volume and margins in our HIP segment, which were partially offset by lower average sales price and margins in our PEM segment, particularly for caustic soda and PVC resin.

Second quarter 2024 net income of $313 million increased by $139 million as compared to the first quarter of 2024. The sequential increase in net income compared to the prior quarter was primarily due to higher sales volume in our HIP segment and higher average sales price in our PEM segment.

ii

EBITDA of $744 million for the second quarter of 2024 increased by $54 million as compared to second quarter 2023 EBITDA of $690 million. Second quarter 2024 EBITDA increased by $198 million as compared to first quarter 2024 EBITDA of $546 million.

A reconciliation of EBITDA to net income, income from operations and net cash provided by operating activities can be found in the financial schedules at the end of this press release.
Cash and Debt
Net cash provided by operating activities was $237 million for the second quarter of 2024 and capital expenditures were $231 million. As of June 30, 2024, cash and cash equivalents were $3.0 billion and total debt was $4.9 billion.
Performance and Essential Materials Segment
For the second quarter of 2024, PEM income from operations was $157 million as compared to $215 million in the second quarter of 2023. This year-over-year decrease of $58 million was due to lower average sales price for most of our major products, particularly caustic soda and PVC resin, partially offset by higher production and sales volume across our major products.

Sequentially, PEM income from operations increased by $135 million as compared to the first quarter of 2024. This increase in income from operations versus the prior quarter was primarily driven by higher average sales price, particularly for Performance Materials.
Housing and Infrastructure Products Segment
For the second quarter of 2024, HIP income from operations of $266 million increased by $76 million as compared to the second quarter of 2023. The year-over-year increase was the result of higher production and sales volume for all of our major products.

Sequentially, HIP income from operations increased by $56 million as compared to the first quarter of 2024. This increase in income from operations versus the prior quarter was primarily due to higher sales volume as a result of the seasonal increase in demand.
iii

Forward-Looking Statements
The statements in this release and the related teleconference relating to matters that are not historical facts, including statements regarding our outlook for the performance of our business segments, global macroeconomic conditions, continuing stabilization or increases in sales prices, volumes, margins and profitability in both domestic and export markets for most of our products, industrial, manufacturing, residential construction and infrastructure activity in our target markets, our ability to weather economic volatility, raw material costs, higher energy prices, our market position, our ability to improve reliability and efficiency of our plants, our cost savings initiatives, global demand for our products, the possible effects of the restructuring of our European operations, the possible impact of the Infrastructure and Jobs Act on us, our ability to continue to execute our strategies, and our ability to deliver greater long-term value to our shareholders are forward-looking statements.

These forward-looking statements are subject to significant risks and uncertainties. Actual results could differ materially, based on factors including, but not limited to: general economic and business conditions; the cyclical nature of the chemical and building products industries; the availability, cost and volatility of raw materials and energy; the results of acquisitions and our integration efforts; uncertainties associated with the United States, European and worldwide economies, including those due to political tensions and conflict in the Middle East, Russia and Ukraine and elsewhere; uncertainties associated with pandemic infectious diseases; uncertainties associated with climate change; the potential impact on demand for ethylene, polyethylene and polyvinyl chloride due to initiatives such as recycling and customers seeking alternatives to polymers; current and potential governmental regulatory actions in the United States and other countries; industry production capacity and operating rates; the supply/demand balance for Westlake's products; competitive products and pricing pressures; instability in the credit and financial markets; access to capital markets; terrorist acts; operating interruptions; changes in laws and regulations, including trade policies; technological developments; information systems failures and cyberattacks; foreign currency exchange risks; our ability to implement our business strategies; creditworthiness of our customers; the effect and results of litigation and settlements of litigation; and other risk factors. For more detailed information about the factors that could cause actual results to differ materially, please refer to Westlake's Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC in February 2024, and Westlake's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, which was filed with the SEC in May 2024.
Use of Non-GAAP Financial Measures
This release makes reference to certain "non-GAAP" financial measures, such as EBITDA, EBITDA margin and free cash flow, as defined in Regulation G of the U.S. Securities Exchange Act of 1934, as amended. For this purpose, a non-GAAP financial measure is generally defined by the Securities and Exchange Commission (SEC) as a numerical measure of a registrant's historical or future financial performance, financial position or cash flows that (1) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows (or equivalent statements) of the registrant; or (2) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. We report our financial results in accordance with U.S. generally accepted accounting principles (U.S. GAAP), but believe that certain non-GAAP financial measures, such as EBITDA, EBITDA margin and free cash flow, provide useful supplemental information to investors regarding the underlying business trends and performance of the Company's ongoing operations and are useful for period-over-period comparisons of such operations. These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the financial measures prepared in accordance with U.S. GAAP. A reconciliation of (i) EBITDA to net income, income from operations and net cash provided by operating activities, and (ii) free cash flow to net cash provided by operating activities can be found in the financial schedules at the end of this press release.
About Westlake
Westlake is a global manufacturer and supplier of materials and innovative products that enhance life every day. Headquartered in Houston, with operations in Asia, Europe and North America, we provide the building blocks for vital solutions — from housing and construction, to packaging and healthcare, to automotive and consumer goods. For more information, visit the Company's web site at www.westlake.com.

iv

Westlake Corporation Conference Call Information:
A conference call to discuss Westlake Corporation's second quarter 2024 results will be held Tuesday, August 6, 2024 at 11:00 AM Eastern Time (10:00 AM Central Time). To access the conference call, it is necessary to pre-register at https://register.vevent.com/register/BI9ab6061c43e746338afcdc616da9a809. Once registered, you will receive a phone number and unique PIN number.
A replay of the conference call will be available beginning two hours after its conclusion. The conference call and replay will be available via webcast at https://edge.media-server.com/mmc/p/j9tcjmaf.
v


WESTLAKE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
(in millions of dollars, except per share data and share amounts)
Net sales$3,207 $3,251 $6,182 $6,607 
Cost of sales2,543 2,609 5,052 5,173 
Gross profit664 642 1,130 1,434 
Selling, general and administrative expenses224 213 433 435 
Amortization of intangibles30 30 60 61 
Restructuring, transaction and integration-related costs4 3 8 6 
Income from operations406 396 629 932 
Interest expense(41)(42)(81)(84)
Other income, net59 23 109 45 
Income before income taxes424 377 657 893 
Provision for income taxes101 70 149 179 
Net income323 307 508 714 
Net income attributable to noncontrolling interests10 10 21 23 
Net income attributable to Westlake Corporation$313 $297 $487 $691 
Earnings per common share attributable to Westlake Corporation:
Basic$2.42 $2.32 $3.77 $5.39 
Diluted$2.40 $2.31 $3.75 $5.35 
Weighted average common shares outstanding:
Basic128,576,735 127,649,341 128,468,359 127,599,093 
Diluted129,350,720 128,484,016 129,185,545 128,471,760 
vi


WESTLAKE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30,
2024		December 31,
2023
(in millions of dollars)
ASSETS
Current assets
Cash and cash equivalents$3,042 $3,304 
Accounts receivable, net1,812 1,601 
Inventories1,684 1,622 
Prepaid expenses and other current assets71 82 
Total current assets6,609 6,609 
Property, plant and equipment, net8,541 8,519 
Other assets, net5,933 5,907 
Total assets$21,083 $21,035 
LIABILITIES AND EQUITY
Current liabilities (accounts payable and accrued and other liabilities)$2,237 $2,491 
Current portion of long-term debt, net300 299 
Long-term debt, net4,585 4,607 
Other liabilities2,867 2,874 
Total liabilities9,989 10,271 
Total Westlake Corporation stockholders' equity10,574 10,241 
Noncontrolling interests520 523 
Total equity11,094 10,764 
Total liabilities and equity$21,083 $21,035 
vii


WESTLAKE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30,
20242023
(in millions of dollars)
Cash flows from operating activities
Net income$508 $714 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization552 538 
Deferred income taxes(58)(51)
Net loss on disposition and others24 22 
Other balance sheet changes(620)(156)
Net cash provided by operating activities406 1,067 
Cash flows from investing activities
Additions to investments in unconsolidated subsidiaries(1)(2)
Additions to property, plant and equipment(503)(507)
Other, net9 10 
Net cash used for investing activities(495)(499)
Cash flows from financing activities
Distributions to noncontrolling interests(21)(24)
Dividends paid(130)(92)
Proceeds from exercise of stock options
8 9 
Repurchase of common stock for treasury— (23)
Other, net(3)(1)
Net cash used for financing activities(146)(131)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(26)9 
Net increase (decrease) in cash, cash equivalents and restricted cash(261)446 
Cash, cash equivalents and restricted cash at beginning of period3,319 2,246 
Cash, cash equivalents and restricted cash at end of period$3,058 $2,692 
viii


WESTLAKE CORPORATION
SEGMENT INFORMATION
(Unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
(in millions of dollars)
Net external sales
Performance and Essential Materials
Performance Materials$1,177 $1,140 $2,341 $2,422 
Essential Materials836 996 1,603 2,063 
Total Performance and Essential Materials2,013 2,136 3,944 4,485 
Housing and Infrastructure Products
Housing Products1,010 918 1,889 1,736 
Infrastructure Products184 197 349 386 
Total Housing and Infrastructure Products1,194 1,115 2,238 2,122 
$3,207 $3,251 $6,182 $6,607 
Income (loss) from operations
Performance and Essential Materials$157 $215 $179 $618 
Housing and Infrastructure Products266 190 476 333 
Corporate and other(17)(9)(26)(19)
$406 $396 $629 $932 
Depreciation and amortization
Performance and Essential Materials$224 $217 $444 $427 
Housing and Infrastructure Products53 51 103 106 
Corporate and other2 3 5 5 
$279 $271 $552 $538 
Other income, net
Performance and Essential Materials$10 $3 $21 $5 
Housing and Infrastructure Products17 3 21 10 
Corporate and other32 17 67 30 
$59 $23 $109 $45 
ix


WESTLAKE CORPORATION
RECONCILIATION OF EBITDA TO NET INCOME, INCOME FROM OPERATIONS AND
NET CASH PROVIDED BY OPERATING ACTIVITIES
(Unaudited)
Three Months Ended March 31,Three Months Ended June 30,Six Months Ended June 30,
20242024202320242023
(in millions of dollars, except percentages)
Net cash provided by operating activities
$169 $237 $555 $406 $1,067 
Changes in operating assets and liabilities and other(6)50 (283)44 (404)
Deferred income taxes22 36 35 58 51 
Net income
185 323 307 508 714 
Less:
Other income, net50 59 23 109 45 
Interest expense(40)(41)(42)(81)(84)
Provision for income taxes
(48)(101)(70)(149)(179)
Income from operations
223 406 396 629 932 
Add:
Depreciation and amortization273 279 271 552 538 
Other income, net50 59 23 109 45 
EBITDA$546 $744 $690 $1,290 $1,515 
Net external sales$2,975 $3,207 $3,251 $6,182 $6,607 
Operating Income Margin
7%13%12%10%14%
EBITDA Margin18%23%21%21%23%

WESTLAKE CORPORATION
RECONCILIATION OF FREE CASH FLOW TO NET CASH PROVIDED BY OPERATING ACTIVITIES
(Unaudited)
Three Months Ended March 31,Three Months Ended June 30,Six Months Ended June 30,
20242024202320242023
(in millions of dollars)
Net cash provided by operating activities
$169 $237 $555 $406 $1,067 
Less:
Additions to property, plant and equipment272 231 $240 503 507 
Free cash flow
$(103)$6 $315 $(97)$560 
x


WESTLAKE CORPORATION
RECONCILIATION OF PEM SEGMENT EBITDA TO INCOME FROM OPERATIONS
(Unaudited)
Three Months Ended March 31,Three Months Ended June 30,Six Months Ended June 30,
20242024202320242023
(in millions of dollars, except percentages)
Performance and Essential Materials Segment
Income from operations
$22 $157 $215 $179 $618 
Add:
Depreciation and amortization220 224 217 444 427 
Other income, net11 10 3 21 5 
EBITDA
$253 $391 $435 $644 $1,050 
Net external sales$1,931 $2,013 $2,136 $3,944 $4,485 
Operating Income Margin
1%8%10%5%14%
EBITDA Margin13%19%20%16%23%
WESTLAKE CORPORATION

RECONCILIATION OF HIP SEGMENT EBITDA TO INCOME FROM OPERATIONS
(Unaudited)
Three Months Ended March 31,Three Months Ended June 30,Six Months Ended June 30,
20242024202320242023
(in millions of dollars, except percentages)
Housing and Infrastructure Products Segment
Income from operations$210 $266 $190 $476 $333 
Add:
Depreciation and amortization50 53 51 103 106 
Other income, net4 17 3 21 10 
EBITDA$264 $336 $244 $600 $449 
Net external sales$1,044 $1,194 $1,115 $2,238 $2,122 
Operating Income Margin20%22%17%21%16%
EBITDA Margin25%28%22%27%21%
xi


WESTLAKE CORPORATION
SUPPLEMENTAL INFORMATION
PRODUCT SALES PRICE AND VOLUME VARIANCE BY OPERATING SEGMENTS
(Unaudited)
Second Quarter 2024 vs. Second Quarter 2023Second Quarter 2024 vs. First Quarter 2024
Average
Sales Price		VolumeAverage
Sales Price		Volume
Performance and Essential Materials-16 %+11 %+4 %+1 %
Housing and Infrastructure Products-9 %+16 %— %+15 %
Company-14 %+12 %+2 %+6 %

xii
1 Earnings Presentation 2Q 2024

 
2 Second Quarter 2024 Highlights 2Q 2024 Financial Results Record HIP segment earnings with improving PEM segment profitability • Jean-Marc Gilson named President and CEO; Albert Chao appointed Executive Chairman • Housing and Infrastructure Products (HIP) reported records in income from operations of $266 million, EBITDA of $336 million and EBITDA margin(2) of 28% • Performance and Essential Materials (PEM) EBITDA margin(3) increased to 19% from 13% in 1Q 2024 driven by a 4% increase in average sales price • Recently announced mothballing of operations at our European AC / ECH unit to reduce costs and improve performance in our epoxy business • 2Q cost savings of $50 million ($85 million YTD) towards our 2024 target of $125 – $150 million • Investment-grade credit rating with $3.0 billion of cash and equivalents $3.2B Net Sales 8% increase vs. 1Q $313M Net Income 80% increase vs. 1Q $744M EBITDA(1) 36% increase vs. 1Q $2.40 Net Income Per Share $237M Net Cash Provided by Operating Activities $3.0B Cash and Equivalents (1) Reconciliation of EBITDA to Net Income, Income from Operations and Net Cash Provided by Operating Activities can be found on page 11 (2) HIP EBITDA margin is calculated by dividing HIP EBITDA by Total HIP Sales (3) PEM EBITDA margin is calculated by dividing PEM EBITDA by Total PEM Sales

 
3 Westlake Corporation 2Q 2024 Sales volume grew a solid 12% YoY driven by Pipe & Fittings and Siding & Trim in HIP and chlorovinyls in PEM Average sales price reflected QoQ growth following several quarters of declines, driven by higher PVC resin and polyethylene prices in PEM The recovery in global industrial and manufacturing activity has been slower than in previous cycles, which is impacting PEM sales volume and margins Record HIP EBITDA of $336 million and EBITDA margin of 28%(2) Westlake 2Q 2024 vs. 1Q 2024 Average Sales Price +2.3% Volume +5.5% Westlake 2Q 2024 vs. 2Q 2023 Average Sales Price -13.7% Volume +12.4% 2Q'24 1Q'24 QoQ% 2Q'23 YoY% $3,207 $2,975 8% $3,251 (1%) $406 $223 82% $396 3% Performance and Essential Materials $391 $253 55% $435 (10%) Housing and Infrastructure Products $336 $264 27% $244 38% Corporate $17 $29 - $11 - $744 $546 36% $690 8% Operating Income Sales EBITDA(1) ($ in millions) (1) Reconciliations of EBITDA, Performance and Essential Materials EBITDA, Housing and Infrastructure Products EBITDA and Corporate EBITDA to the applicable GAAP measures can be found on pages 11 and 12 (2) HIP EBITDA margin is calculated by dividing HIP EBITDA by Total HIP Sales

 
4 Housing and Infrastructure Products (“HIP”) Segment Performance HIP Segment 2Q 2024 vs. 1Q 2024 Average Sales Price -0.3% Volume +14.7% HIP Segment 2Q 2024 vs. 2Q 2023 Average Sales Price -8.7% Volume +15.7% Record EBITDA and EBITDA margin driven by solid sales volume growth, lower materials costs, improved sales mix, and cost-saving actions Sales volume growth of 16% YoY was the highest since the Boral acquisition, and reflects our strong position with the faster-growing segments of the North American residential construction market Announced plans to build a new PVCO pipe plant to support the strong growth and market adoption for this innovative sustainable product Manufacturing plant optimization and automation contributed to the solid YoY and QoQ margin expansion 2Q'24 1Q'24 QoQ% 2Q'23 YoY% Housing Products Sales $1,010 $879 15% $918 10% Infrastructure Products Sales $184 $165 12% $197 (7%) Total HIP Sales $1,194 $1,044 14% $1,115 7% Operating Income $266 $210 27% $190 40% EBITDA(1) $336 $264 27% $244 38% EBITDA Margin (2) 28% 25% - 22% - ($ in millions) (1) Reconciliations of HIP EBITDA to the applicable GAAP measure can be found on page 12 (2) HIP EBITDA margin is calculated by dividing HIP EBITDA by Total HIP Sales

 
5 Housing and Infrastructure Products Update 2 Repair & remodel activity provided steady growth driven by large number of homes in prime remodel age, healthy home equity levels, homeowners with low-rate mortgages remaining in place, and significant backlog of projects 3 While our order books remain solid, unusually wet and hot weather conditions in many parts of North America combined with the recent slowdown in U.S. housing starts and remodeling activity could have an impact on our sales volume in the second half of 2024 4 The breadth of our footprint and expansive product offerings provide customers the branded products they need to execute their growth plans and provided the product cross-selling and product suite sales opportunities that helped drive our record second quarter operating income 1 Longer-term housing fundamentals remain strong due to decade-plus of under-building, increasingly favorable demographics and increasing popularity of remote work

 
6 HIP Long-Term Growth Drivers Disciplined Capital Allocation Framework Backed by ROCE-Driven Culture Organic Growth Drivers • Investments in technical capabilities and innovation to solve customer needs • Extensive footprint to serve customers • Robust and integrated supply chain, including sustainable products with recycled content • Growing through partnerships with large homebuilders and distributors • Broad product portfolio with differentiating competitive advantages adding value for customers • Strong alignment with leading customers that drives lasting relationships and fosters cross-selling of products Inorganic Growth Drivers • Track record of accretive acquisitions and successful integrations • Global sales and distribution platform foundation in place • Opportunistic mindset • Fragmented global industries with room for consolidation Maintaining Strong Margins while Growing Organic Revenue Above the Market at ~5%-7% Annually

 
7 Performance and Essential Materials (“PEM”) Segment Performance PEM Segment 2Q 2024 vs. 1Q 2024 Average Sales Price +3.7% Volume +0.5% PEM Segment 2Q 2024 vs. 2Q 2023 Average Sales Price -16.4% Volume +10.6% Higher average sales price and margins QoQ, primarily driven by higher prices for PVC resin and polyethylene Recently announced plans to mothball Netherlands AC / ECH unit to improve the profitability of our epoxy business U.S. and E.U. epoxy anti-dumping cases are in progress with the possibility that provisional duties will be set later in 2024 Slower than expected global macroeconomic recovery with continued softness in global industrial and manufacturing activity 2Q'24 1Q'24 QoQ% 2Q'23 YoY% Performance Materials Sales $1,177 $1,164 1% $1,140 3% Essential Materials Sales $836 $767 9% $996 (16%) Total PEM Sales $2,013 $1,931 4% $2,136 (6%) Operating Income $157 $22 614% $215 (27%) EBITDA(1) $391 $253 55% $435 (10%) EBITDA Margin (2) 19% 13% - 20% - ($ in millions) (1) Reconciliations of PEM EBITDA to the applicable GAAP measure can be found on page 12 (2) PEM EBITDA margin is calculated by dividing PEM EBITDA by Total PEM Sales

 
8 Performance and Essential Materials Update 2 Our North American cost advantage remained strong during the second quarter of 2024 due to both higher global oil prices and lower U.S. natural gas prices 3 ISM readings in the U.S. and Europe trended lower during the second quarter while similar metrics in China reflected a slower rate of growth, which could translate into reduced demand for some of our PEM products in the near-term 4 Long-term growth fundamentals remain in place, supported by the global need for clean water, housing, transportation, renewable energy, packaging and consumer goods 1 The end to last year’s prolonged destocking cycle brought industry-wide supply and demand back into better balance for most of our major products in the second quarter of 2024, driving a QoQ increase in average sales price

 
99 Financial Reconciliations

 
10 Consolidated Statements of Operations Performance and Essential Materials Sales $ 2,013 $ 2,136 $ 1,931 $ 3,944 $ 4,485 Housing and Infrastructure Products Sales 1,194 1,115 1,044 2,238 2,122 Net sales 3,207 3,251 2,975 6,182 6,607 Cost of sales Gross profit Selling, general and administrative expenses Amortization of intangibles Restructuring, transaction and integration-related costs Income from operations Interest expense Other income, net Income before income taxes Provision for income taxes Net income Net income attributable to noncontrolling interests Net income attributable to Westlake Corporation $ 313 $ 297 $ 174 $ 487 $ 691 Earnings per common share attributable to Westlake Corporation: Basic $ 2.42 $ 2.32 $ 1.35 $ 3.77 $ 5.39 Diluted $ 2.40 $ 2.31 $ 1.34 $ 3.75 $ 5.35 Three months ended June 30, Six months ended June 30, Three months ended March 31, 664 642 1,130 1,434 2024 2,509 466 2,543 2,609 5,052 5,173 2024 224 213 433 435 209 30 30 60 61 30 4 3 8 6 406 396 629 932 (41) (42) (81) (84) 307 508 714 424 377 657 893 59 23 109 45 323 185 70 149 179 4 223 (40) 50 2023 2024 2023 (In millions of dollars, except per share data) 233 48 101 10 21 23 11 10

 
11 Reconciliation of EBITDA to Net Income, Income from Operations and Net Cash Provided by Operating Activities Net cash provided by operating activities $ 237 $ 555 $ 169 $ 406 $ 1,067 Changes in operating assets and liabilities and other Deferred income taxes Net income Less: Other income, net Interest expense Provision for income taxes Income from operations Add: Depreciation and amortization Other income, net EBITDA $ 744 $ 690 $ 546 $ 1,290 $ 1,515 50 59 23 109 45 273 279 271 552 538 (48)(101) (70) (149) (179) 223 406 396 629 932 50 59 23 109 45 (40)(41) (42) (81) (84) 185 323 307 508 714 (In millions of dollars) 51 (6)50 (283) 44 (404) 22 36 35 58 Three months ended June 30, Six months ended June 30, 20242024 2023 2024 2023 Three months ended March 31,

 
12 Reconciliation of PEM, HIP and Corporate EBITDA to Operating Income (Loss) Three months ended June 30, Three months ended March 31, Six months ended June 30, 2024 2023 2024 2024 2023 Performance and Essential Materials EBITDA $ 391 $ 435 $ 253 $ 644 $ 1,050 Less: Depreciation and Amortization 224 217 220 444 427 Other income, net 10 3 11 21 5 Performance and Essential Materials Operating Income (Loss) 157 215 22 179 618 Housing and Infrastructure Products EBITDA 336 244 264 600 449 Less: Depreciation and Amortization 53 51 50 103 106 Other income, net 17 3 4 21 10 Housing and Infrastructure Products Operating Income (Loss) 266 190 210 476 333 Corporate EBITDA 17 11 29 46 16 Less: Depreciation and Amortization 2 3 3 5 5 Other income, net 32 17 35 67 30 Corporate Operating Income (Loss) (17) (9) (9) (26) (19) Performance and Essential Materials Operating Income (Loss) 157 215 22 179 618 Housing and Infrastructure Products Operating Income (Loss) 266 190 210 476 333 Corporate Operating Income (Loss) (17) (9) (9) (26) (19) Total Operating Income (Loss) 406$ 396$ 223$ 629$ 932$ (In millions of dollars) (1) PEM EBITDA margin is calculated by dividing PEM EBITDA by Total PEM Sales (2) PEM Operating Income margin is calculated by dividing PEM Operating Income by Total PEM Sales (3) HIP EBITDA margin is calculated by dividing HIP EBITDA by Total HIP Sales (4) HIP Operating Income margin is calculated by dividing HIP Operating Income by Total HIP Sales

 
13 Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities Net cash provided by operating activities $ 237 $ 555 $ 169 $ 406 $ 1,067 Less: Additions to property, plant and equipment Free Cash Flow $ 6 $ 315 $ (103) $ (97) $ 560 (In millions of dollars) Three months ended June 30, Three months ended March 31, Six months ended June 30, 2024 2023 2024 2024 2023 231 240 272 503 507

 
14 Safe Harbor Language This presentation contains certain forward-looking statements including statements regarding our cost savings objectives and our ability to maintain synergies, pricing and demand for our products and across the industrial and manufacturing sectors, global macroeconomic conditions, anticipated sales volumes, industry outlook for both of our segments, our cost control and efficiency efforts, the effects of changing demographics in the markets that we serve, anticipated residential construction and infrastructure growth, consumer trends, such as the popularity of remote work; housing market fundamentals; the proliferation of electrification, consumer sentiment regarding products manufactured domestically and sustainability, expectations regarding mortgage rates and their effects on the affordability of homes, expectations regarding homebuilder confidence, the anticipated effects of our branding efforts and cross-selling activities, our cost advantages in the North American chemicals market; shipping disruptions; the possible effects of the anticipated restructuring of our European epoxy business; and customer inventory levels resulting from destocking activities. Actual results may differ materially depending on factors, including, but not limited to, the following: general economic and business conditions; the cyclical nature of the chemical and building products industries; the results of acquisitions and our integration efforts; the availability, cost and volatility of raw materials and energy; uncertainties associated with the United States, European and worldwide economies, including those due to political tensions and conflict in the Middle East, Russia, Ukraine and elsewhere; uncertainties associated with pandemic infectious diseases; uncertainties associated with climate change; the potential impact on the demand for ethylene, polyethylene and polyvinyl chloride due to initiatives such as recycling and customers seeking alternatives to polymers; current and potential governmental regulatory actions in the United States and other countries; industry production capacity and operating rates; the supply/demand balance for our products; competitive products and pricing pressures; instability in the credit and financial markets; access to capital markets; terrorist acts; operating interruptions; changes in laws or regulations, including trade policies; technological developments; information systems failures and cyber attacks; foreign currency exchange risks; our ability to implement our business strategies; creditworthiness of our customers; the effect and results of litigation and settlements of litigation; and other factors described in our reports filed with the Securities and Exchange Commission. Many of these factors are beyond our ability to control or predict. Any of these factors, or a combination of these factors, could materially affect our future results of operations and the ultimate accuracy of the forward-looking statements. These forward-looking statements are not guarantees of our future performance, and our actual results and future developments may differ materially from those projected in the forward-looking statements. Management cautions against putting undue reliance on forward-looking statements. Every forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to publicly update or revise any forward-looking statements. Investor Relations Contacts Steve Bender Executive Vice President & Chief Financial Officer John Zoeller Vice President & Treasurer Westlake Corporation 2801 Post Oak Boulevard, Suite 600, Houston, Texas 77056 | 713-960-9111

 

 
v3.24.2.u1
Cover Page
Aug. 06, 2024
Document Information [Line Items]  
Document Type 8-K
Document Period End Date Aug. 06, 2024
Entity Registrant Name Westlake Corporation
Entity Incorporation, State or Country Code DE
Entity File Number 001-32260
Entity Tax Identification Number 76-0346924
Entity Address, Address Line One 2801 Post Oak Boulevard,
Entity Address, Address Line Two Suite 600
Entity Address, City or Town Houston,
Entity Address, State or Province TX
Entity Address, Postal Zip Code 77056
City Area Code 713
Local Phone Number 960-9111
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0001262823
Common Stock [Member]  
Document Information [Line Items]  
Title of 12(b) Security Common Stock, $0.01 par value
Trading Symbol WLK
Security Exchange Name NYSE
One Point Six Two Five Percentage Senior Notes Due Twenty Twenty Nine [Member] [Domain]  
Document Information [Line Items]  
Title of 12(b) Security 1.625% Senior Notes due 2029
Trading Symbol WLK29
Security Exchange Name NYSE
Westlake (NYSE:WLK)
Historical Stock Chart
From Jul 2024 to Aug 2024 Click Here for more Westlake Charts.
Westlake (NYSE:WLK)
Historical Stock Chart
From Aug 2023 to Aug 2024 Click Here for more Westlake Charts.