Epoxy
August 2, 2021
Epoxy Comments from Huntsman
Huntsman Corporation (HUN) CEO Peter Huntsman on Q2 2021 Results – Earnings Call Transcript
Jul. 30, 2021 4:31 PM ETHuntsman Corporation (HUN)3 Comments
Q2: 2021-07-30 Earnings Summary
EPS of $0.86 beats by $0.05 | Revenue of $2.02B (62.31% Y/Y) beats by $162.34M
Huntsman Corporation (NYSE:HUN) Q2 2021 Earnings Conference Call July 30, 2021 10:00 AM ET
Company Participants
Ivan Marcuse – Vice President, Investor Relations
Peter Huntsman – Chairman, President & Chief Executive Officer
Phil Lister – Executive Vice President & Chief Financial Officer
Tony Hankins – President, Polyurethanes
Peter Huntsman
Let’s turn to slide number 5. Advanced Materials reported adjusted EBITDA of $58 million in the quarter, a significant improvement year-over-year driven primarily by the continuing recovery of our core industrial businesses and improving contributions from our recent acquisitions.
Excluding the acquisition of Gabriel Performance Products, sales revenue in Advanced Materials increased to 42% compared to the second quarter of 2020 generating adjusted EBITDA margins of 19%.
Aerospace results were flat in the quarter versus the prior year. Although, we saw another quarter of sequential improvement, which we expect to see again in the third quarter. We still think a full recovery to pre-pandemic levels in this segment will take another year or two given our exposure to the wide-body planes used more in international travel, but we’re encouraged that the recovery is tracking better than we had anticipated earlier this year.
Excluding aerospace sales in our other core specialty businesses experienced growth year-over-year and are now slightly above 2019 levels. Additionally, the integration of CVC Thermoset Specialties and Gabriel Performance Products continues on plan. We remain confident that we will achieve the total run rate synergies of $23 million we communicated at the time each of these respective transactions were announced.
Overall our Advanced Materials division is tracking well and our aerospace — and as aerospace recovers we expect this position to consistently generate adjusted EBITDA margins in excess of 20%.
We will continue to grow this division organically and through targeted bolt-on acquisitions. Third quarter adjusted EBITDA for Advanced Materials should look similar quarter-over-quarter subject to typical seasonality and be between $50 million and $55 million.
Our Advanced Materials division has gone through a meaningful change this past year, as we’ve purchased and integrated our recent acquisitions of CVC and Gabriel. We’ll see further cost optimization and commercial synergies in excess of $13 million by 2023 building upon the $10 million we will achieve this year. We will also see the return of our aerospace business that will further enhance our EBITDA by an additional $40 million to $50 million that is fully recovered. Our Textile Effects business will not only see the continued recovery of its retail customer base, but the completion of our Bangladeshi expansion that will deliver $10 million annually. In short, in the coming quarters the groundwork is being laid for over $150 million of additional EBITDA that will take place across our businesses. Aside from aerospace this assumes no further recovery in the market. Additionally, we have a very strong balance sheet that affords us to aggressively pursue M&A opportunities. This will be done where we have true synergies growth opportunities and the ability to stabilize our earnings.
Having said that, I am surprised at some of the multiples that have been seen in some of the recent transactions in this industry. As I have said before, we will be disciplined. The quality of our earnings will continue to be of paramount importance. This past quarter notwithstanding when we experienced a perfect storm of third-party outages unplanned inventory build and associated lost sales most of which will be recovered in the second half of this year, we are confident of our ability to deliver greater than 25% free cash flow to EBITDA this year. Should present market conditions prevail, we will see this percentage of free cash flow to EBITDA increase to 40% this next year.
Alex Yefremov
Thank you, and good morning, everyone. Peter, do you expect typical seasonality in the fourth quarter in polyurethanes and Advanced Materials, or given the trends you just discussed could we see maybe flat Q4 versus Q3?
Peter Huntsman
Yes, I do see seasonality. I mean, there will be the typical closures. Every year for some reason we have this phenomenon called Thanksgiving and Christmas, the New Year’s that seemingly slow things down. And yeah, we will see that. I do think that to offset – my only point in saying that, I’m optimistic on the fourth quarter is I think that some of that seasonality will be offset by possible – possible supply shortages, and price increases. And if those things happen then you’ll see some of that seasonality will be muted. But yeah, there will be a slowdown in demand, and that’s just something that will happen.
July 30, 2021
Huntsman Results
Huntsman Announces Strong Second Quarter 2021 Earnings
Download as PDF July 30, 2021 6:19am EDT
Related Documents
Audio Earnings WebcastEarnings Slides PDF
THE WOODLANDS, Texas, July 30, 2021 /PRNewswire/ —
Second Quarter Highlights
- Second quarter 2021 net income of $172 million compared to net loss of $59 million in the prior year period; second quarter 2021 diluted earnings per share of $0.70 compared to loss per share of $0.28 in the prior year period.
- Second quarter 2021 adjusted net income of $191 million compared to adjusted net loss of $30 million in the prior year period; second quarter 2021 adjusted diluted earnings per share of $0.86 compared to adjusted loss per share of $0.14 in the prior year period.
- Second quarter 2021 adjusted EBITDA of $334 million compared to adjusted EBITDA of $54 million in the prior year period.
- Second quarter 2021 net cash used in operating activities from continuing operations was $7 million. Free cash flow from continuing operations was a use of $83 million for the second quarter 2021.
- Balance sheet is strong with a net leverage of 1.0x and total liquidity of approximately $1.9 billion. On May 26, 2021, the Company completed a $400 million offering of 2.95% senior notes due 2031. The net proceeds from the offering, along with cash on hand, were used to redeem in full $400 million in aggregate principal amount of the Company’s 5.125% senior notes due 2022. These actions will reduce Huntsman’s annual cash interest expense by approximately $9 million.
- Received the $28 million earnout in May 2021 from the November 2020 divestiture of our India-based do-it-yourself consumer adhesives business. Gross proceeds from the divestiture totaled approximately $285 million, a 15x multiple on 2019 adjusted EBITDA of the divested business.
| Three months ended | Six months ended | |||||||
| June 30, | June 30, | |||||||
| In millions, except per share amounts | 2021 | 2020 | 2021 | 2020 | ||||
| Revenues | $ 2,024 | $ 1,247 | $ 3,861 | $ 2,840 | ||||
| Net income (loss) | $ 172 | $ (59) | $ 272 | $ 649 | ||||
| Adjusted net income (loss) (1) | $ 191 | $ (30) | $ 338 | $ 35 | ||||
| Diluted income (loss) per share | $ 0.70 | $ (0.28) | $ 1.07 | $ 2.90 | ||||
| Adjusted diluted income (loss) per share(1) | $ 0.86 | $ (0.14) | $ 1.52 | $ 0.16 | ||||
| Adjusted EBITDA(1) | $ 334 | $ 54 | $ 623 | $ 219 | ||||
| Net cash (used in) provided by operating activities from continuing operations | $ (7) | $ 85 | $ (23) | $ 45 | ||||
| Free cash flow from continuing operations(2) | $ (83) | $ 30 | $ (197) | $ (71) | ||||
| Adjusted free cash flow from continuing operations(6) | $ (80) | $ 38 | $ (194) | $ (61) |
| See end of press release for footnote explanations and reconciliations of non-GAAP measures. |
Huntsman Corporation (NYSE: HUN) today reported second quarter 2021 results with revenues of $2,024 million, net income of $172 million, adjusted net income of $191 million and adjusted EBITDA of $334 million.
Peter R. Huntsman, Chairman, CEO and President, commented:
“We are pleased with second quarter earnings as demand in many of our businesses returned to pre-pandemic levels. The recent acquisitions and synergies already captured in Gabriel, CVC and our Huntsman Building Solutions franchise and several cost optimization initiatives that are well underway, are all contributing to our earnings improvement. We are also making good progress on our organic capital investments, including our MDI splitter project in Geismar, Louisiana, which we now expect to start up in early 2022. We are focused on delivering a strong EBITDA performance and high free cash flow in the second half of 2021. We remain committed to maintain a strong balance sheet and a balanced deployment of our capital including further investments to secure growth. We will showcase our strategic initiatives and the continued transformation of the entire portfolio at our New York City Investor Day on November 9, 2021.”
Segment Analysis for 2Q21 Compared to 2Q20
Polyurethanes
The increase in revenues in our Polyurethanes segment for the three months ended June 30, 2021 compared to the same period of 2020 was largely due to higher MDI average selling prices and higher sales volumes. MDI average selling prices increased mostly in China and Europe. Sales volumes increased primarily due to stronger demand in relation to the ongoing recovery from the global economic slowdown, partially offset by the scheduled turnaround at our Rotterdam, Netherlands facility. The increase in segment adjusted EBITDA was primarily due to higher MDI margins resulting from higher MDI pricing and higher sales volumes as well as stronger earnings from our PO/MTBE joint venture in China, partially offset by higher raw material costs.
Performance Products
The increase in revenues in our Performance Products segment for the three months ended June 30, 2021 compared to the same period of 2020 was primarily due to higher average selling prices and higher sales volumes. Average selling prices increased primarily due to stronger demand in relation to the ongoing recovery from the global economic slowdown as well as in response to an increase in raw material costs. Sales volumes also increased primarily due to stronger demand. The increase in segment adjusted EBITDA was primarily due to increased revenue and margins, partially offset by increased fixed costs.
Advanced Materials
The increase in revenues in our Advanced Materials segment for the three months ended June 30, 2021 compared to the same period in 2020 was primarily due to higher sales volumes, higher average selling prices and the favorable net impact of our recent acquisitions and divestiture. Excluding our recent acquisitions and divestiture and except for our global aerospace business, sales volumes increased across all our specialty markets, primarily in relation to the ongoing recovery from the global economic slowdown. Average selling prices increased largely due to the impact of a weaker U.S. dollar against major international currencies and in response to higher raw material costs. The increase in segment adjusted EBITDA was primarily due to higher sales volumes and the benefit from our recent acquisitions.
July 30, 2021
Huntsman Results
Huntsman Announces Strong Second Quarter 2021 Earnings
Download as PDF July 30, 2021 6:19am EDT
Related Documents
Audio Earnings WebcastEarnings Slides PDF
THE WOODLANDS, Texas, July 30, 2021 /PRNewswire/ —
Second Quarter Highlights
- Second quarter 2021 net income of $172 million compared to net loss of $59 million in the prior year period; second quarter 2021 diluted earnings per share of $0.70 compared to loss per share of $0.28 in the prior year period.
- Second quarter 2021 adjusted net income of $191 million compared to adjusted net loss of $30 million in the prior year period; second quarter 2021 adjusted diluted earnings per share of $0.86 compared to adjusted loss per share of $0.14 in the prior year period.
- Second quarter 2021 adjusted EBITDA of $334 million compared to adjusted EBITDA of $54 million in the prior year period.
- Second quarter 2021 net cash used in operating activities from continuing operations was $7 million. Free cash flow from continuing operations was a use of $83 million for the second quarter 2021.
- Balance sheet is strong with a net leverage of 1.0x and total liquidity of approximately $1.9 billion. On May 26, 2021, the Company completed a $400 million offering of 2.95% senior notes due 2031. The net proceeds from the offering, along with cash on hand, were used to redeem in full $400 million in aggregate principal amount of the Company’s 5.125% senior notes due 2022. These actions will reduce Huntsman’s annual cash interest expense by approximately $9 million.
- Received the $28 million earnout in May 2021 from the November 2020 divestiture of our India-based do-it-yourself consumer adhesives business. Gross proceeds from the divestiture totaled approximately $285 million, a 15x multiple on 2019 adjusted EBITDA of the divested business.
| Three months ended | Six months ended | |||||||
| June 30, | June 30, | |||||||
| In millions, except per share amounts | 2021 | 2020 | 2021 | 2020 | ||||
| Revenues | $ 2,024 | $ 1,247 | $ 3,861 | $ 2,840 | ||||
| Net income (loss) | $ 172 | $ (59) | $ 272 | $ 649 | ||||
| Adjusted net income (loss) (1) | $ 191 | $ (30) | $ 338 | $ 35 | ||||
| Diluted income (loss) per share | $ 0.70 | $ (0.28) | $ 1.07 | $ 2.90 | ||||
| Adjusted diluted income (loss) per share(1) | $ 0.86 | $ (0.14) | $ 1.52 | $ 0.16 | ||||
| Adjusted EBITDA(1) | $ 334 | $ 54 | $ 623 | $ 219 | ||||
| Net cash (used in) provided by operating activities from continuing operations | $ (7) | $ 85 | $ (23) | $ 45 | ||||
| Free cash flow from continuing operations(2) | $ (83) | $ 30 | $ (197) | $ (71) | ||||
| Adjusted free cash flow from continuing operations(6) | $ (80) | $ 38 | $ (194) | $ (61) |
| See end of press release for footnote explanations and reconciliations of non-GAAP measures. |
Huntsman Corporation (NYSE: HUN) today reported second quarter 2021 results with revenues of $2,024 million, net income of $172 million, adjusted net income of $191 million and adjusted EBITDA of $334 million.
Peter R. Huntsman, Chairman, CEO and President, commented:
“We are pleased with second quarter earnings as demand in many of our businesses returned to pre-pandemic levels. The recent acquisitions and synergies already captured in Gabriel, CVC and our Huntsman Building Solutions franchise and several cost optimization initiatives that are well underway, are all contributing to our earnings improvement. We are also making good progress on our organic capital investments, including our MDI splitter project in Geismar, Louisiana, which we now expect to start up in early 2022. We are focused on delivering a strong EBITDA performance and high free cash flow in the second half of 2021. We remain committed to maintain a strong balance sheet and a balanced deployment of our capital including further investments to secure growth. We will showcase our strategic initiatives and the continued transformation of the entire portfolio at our New York City Investor Day on November 9, 2021.”
Segment Analysis for 2Q21 Compared to 2Q20
Polyurethanes
The increase in revenues in our Polyurethanes segment for the three months ended June 30, 2021 compared to the same period of 2020 was largely due to higher MDI average selling prices and higher sales volumes. MDI average selling prices increased mostly in China and Europe. Sales volumes increased primarily due to stronger demand in relation to the ongoing recovery from the global economic slowdown, partially offset by the scheduled turnaround at our Rotterdam, Netherlands facility. The increase in segment adjusted EBITDA was primarily due to higher MDI margins resulting from higher MDI pricing and higher sales volumes as well as stronger earnings from our PO/MTBE joint venture in China, partially offset by higher raw material costs.
Performance Products
The increase in revenues in our Performance Products segment for the three months ended June 30, 2021 compared to the same period of 2020 was primarily due to higher average selling prices and higher sales volumes. Average selling prices increased primarily due to stronger demand in relation to the ongoing recovery from the global economic slowdown as well as in response to an increase in raw material costs. Sales volumes also increased primarily due to stronger demand. The increase in segment adjusted EBITDA was primarily due to increased revenue and margins, partially offset by increased fixed costs.
Advanced Materials
The increase in revenues in our Advanced Materials segment for the three months ended June 30, 2021 compared to the same period in 2020 was primarily due to higher sales volumes, higher average selling prices and the favorable net impact of our recent acquisitions and divestiture. Excluding our recent acquisitions and divestiture and except for our global aerospace business, sales volumes increased across all our specialty markets, primarily in relation to the ongoing recovery from the global economic slowdown. Average selling prices increased largely due to the impact of a weaker U.S. dollar against major international currencies and in response to higher raw material costs. The increase in segment adjusted EBITDA was primarily due to higher sales volumes and the benefit from our recent acquisitions.
July 28, 2021
BASF Posts Strong Quarter
BASF Q2 results up on higher prices, volumes; boosts FY21 outlook
Ludwigshafen, Germany (dpa-AFX) – BASF reported a 56-per-cent surge in second-quarter sales, largely driven by higher prices and volumes in all segments.
Sales for the quarter grew by 7.1 billion euros (8.38 billion dollars) to 19.8 billion euros from 12.7 billion euros generated in the prior year period.
Earnings before interest and taxes (EBIT) increased to 2.32 billion euros from 59 million euros last year.
EBIT, before special items, surged to 2.36 billion euros from 226 million euros reported in the same period of last year.
On a per share basis, earnings totalled 1.80 euros compared to a loss of 0.96 euros per share incurred a year ago.
Cash flows from operating activities amounted to 2.5 billion euros in the second quarter of 2021, 295 million euros above the prior-year quarter.
The improvement was mainly attributable to the considerably higher net income of 1.7 billion euros. At 1.8 billion euros, free cash flow increased by 254 million euros compared with the second quarter of 2020.
Dr Martin Brudermueller, chairman of the Board of Executive Directors of BASF, said: “Considerably higher earnings in our upstream businesses due to higher prices and volumes were the main driver for the strong increase in earnings overall. … In our downstream segments, we also managed to increase volumes and prices based on strong demand.”
Looking ahead, the company currently expects fiscal 2021 sales growth to be in the range of 74 billion euros – 77 billion euros, compared to the previously communicated range of 68 billion euros – 71 billion euros.
EBIT, before special items, is now expected to be between 7 billion euros and 7.5 billion euros, up from the prior guidance range of 5 billion euros – 5.8 billion euros.
July 28, 2021
BASF Posts Strong Quarter
BASF Q2 results up on higher prices, volumes; boosts FY21 outlook
Ludwigshafen, Germany (dpa-AFX) – BASF reported a 56-per-cent surge in second-quarter sales, largely driven by higher prices and volumes in all segments.
Sales for the quarter grew by 7.1 billion euros (8.38 billion dollars) to 19.8 billion euros from 12.7 billion euros generated in the prior year period.
Earnings before interest and taxes (EBIT) increased to 2.32 billion euros from 59 million euros last year.
EBIT, before special items, surged to 2.36 billion euros from 226 million euros reported in the same period of last year.
On a per share basis, earnings totalled 1.80 euros compared to a loss of 0.96 euros per share incurred a year ago.
Cash flows from operating activities amounted to 2.5 billion euros in the second quarter of 2021, 295 million euros above the prior-year quarter.
The improvement was mainly attributable to the considerably higher net income of 1.7 billion euros. At 1.8 billion euros, free cash flow increased by 254 million euros compared with the second quarter of 2020.
Dr Martin Brudermueller, chairman of the Board of Executive Directors of BASF, said: “Considerably higher earnings in our upstream businesses due to higher prices and volumes were the main driver for the strong increase in earnings overall. … In our downstream segments, we also managed to increase volumes and prices based on strong demand.”
Looking ahead, the company currently expects fiscal 2021 sales growth to be in the range of 74 billion euros – 77 billion euros, compared to the previously communicated range of 68 billion euros – 71 billion euros.
EBIT, before special items, is now expected to be between 7 billion euros and 7.5 billion euros, up from the prior guidance range of 5 billion euros – 5.8 billion euros.
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