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Everchem Updates
VOLUME XXI
September 14, 2023
Everchem’s exclusive Closers Only Club is reserved for only the highest caliber brass-baller salesmen in the chemical industry. Watch the hype video and be introduced to the top of the league: — read more
February 9, 2022
SKC: 4Q21 Results Solid Excluding One-offs
- By Lee Jin-myung & Choi Gyu-heon
- February 9, 2022, 17:49
4Q21 OP falls short at KRW99.4bn (-32% QoQ) due to one-offs
SKC posted operating profit of KRW99.4bn (-32% QoQ) for 4Q21, missing the consensus estimate of KRW117.9bn. Factoring out one-off expenses of KRW25bn incurred from employee bonuses, ramp-up of a new plant and commercialization of transparent PI films, actual earnings were solid.
The mobility materials division reported top-line growth on increased volume, but saw operating profit fall 13% QoQ due to employee bonuses and costs related to the sixth new plant. Chemicals delivered solid results with operating profit coming in at KRW89.3bn (-5% QoQ) and operating margin remaining high at 29.6% despite one-off expenses, thanks to the continued uptrend in propylene glycol (PG) and propylene oxide (PO) spreads. Operating earnings from industrial materials turned to a loss due to costs incurred for the commercialization of transparent PI films, but sales of semiconductor materials reached a new quarterly high on shipment growth.
1Q22 OP forecast at KRW125.4bn (+26% QoQ)
For 1Q22, we forecast operating profit at KRW125.4bn (+26% QoQ). The mobility materials division will likely report sales of KRW202.2bn (+7% QoQ) and operating profit of KRW26.7bn (+30% QoQ). Earnings growth should be driven by increasing shipments from the ramp-up of the sixth plant (slated for March) and rising copper foil ASP. With chip shortages causing disruptions in production at EV clients, we expect SKC to focus on diversifying its clientele to minimize negative impact on overall earnings.
Operating profit from chemicals is projected at KRW86.1bn (-4% QoQ) for 1Q22. PO spreads will likely decline amid weakening market conditions. In contrast, demand for high value-added PG is expected to remain strong, helping to limit the decline in overall operating profit from chemicals. Industrial and semiconductor materials should post growth in both sales and profits, backed by brisk downstream demand in 1Q22.
http://www.businesskorea.co.kr/news/articleView.html?idxno=87296
February 9, 2022
World’s Top Shipping Exec Says Worst Supply-Chain Snarls Have Peaked
by Tyler DurdenWednesday, Feb 09, 2022 – 11:11 AM
AP Moller-Maersk suggests the climax of global supply-chains snarls has passed, and bottlenecks will alleviate in the second half of the year. There are emerging signs major transpacific shipping freight rates are at a critical inflection point.
“We are guiding in an environment where we are coming out of a pandemic, and we don’t have much experience with that to be honest,” Chief Executive Officer Soren Skou said in a Bloomberg TV interview.
“So we are saying we expect quite a strong first half of 2022, and then we expect what we call a normalization early in the second half,” Skou said.
The top shipping exec expects transpacific shipping rates to decline as COVID restrictions are lifted, leading to the easing of congestion at the US’ largest container ports, ones located at Los Angeles and Long Beach on the US west coast.
“We are trying to guide as best as we possibly can, not to be optimistic or pessimistic,” he said. “We do not have much visibility to what will happen when people return to work, when bottlenecks open up and a lot of the capacity tied up today in Los Angeles and Long Beach gets released — how is that going to work out. We’ll have to see.”
There’s growing consensus on Wall Street, especially with JP Morgan, as one of their analysts told clients days ago that global supply chain constraints have peaked. A leading indicator of this is major shipping rates which have slumped in recent months.
The exact timing of the normalization to the shipping industry is unknown, considering there’s no data of coming out of a virus pandemic. Though the world’s top shipping exec says it could happen as soon as this summer.
If peak congestion has already hit, this would suggest chip shortages could diminish later this year, thus increasing new vehicle production and possibly topping out used car prices.
February 9, 2022
World’s Top Shipping Exec Says Worst Supply-Chain Snarls Have Peaked
by Tyler DurdenWednesday, Feb 09, 2022 – 11:11 AM
AP Moller-Maersk suggests the climax of global supply-chains snarls has passed, and bottlenecks will alleviate in the second half of the year. There are emerging signs major transpacific shipping freight rates are at a critical inflection point.
“We are guiding in an environment where we are coming out of a pandemic, and we don’t have much experience with that to be honest,” Chief Executive Officer Soren Skou said in a Bloomberg TV interview.
“So we are saying we expect quite a strong first half of 2022, and then we expect what we call a normalization early in the second half,” Skou said.
The top shipping exec expects transpacific shipping rates to decline as COVID restrictions are lifted, leading to the easing of congestion at the US’ largest container ports, ones located at Los Angeles and Long Beach on the US west coast.
“We are trying to guide as best as we possibly can, not to be optimistic or pessimistic,” he said. “We do not have much visibility to what will happen when people return to work, when bottlenecks open up and a lot of the capacity tied up today in Los Angeles and Long Beach gets released — how is that going to work out. We’ll have to see.”
There’s growing consensus on Wall Street, especially with JP Morgan, as one of their analysts told clients days ago that global supply chain constraints have peaked. A leading indicator of this is major shipping rates which have slumped in recent months.
The exact timing of the normalization to the shipping industry is unknown, considering there’s no data of coming out of a virus pandemic. Though the world’s top shipping exec says it could happen as soon as this summer.
If peak congestion has already hit, this would suggest chip shortages could diminish later this year, thus increasing new vehicle production and possibly topping out used car prices.
February 8, 2022
Leggett & Platt, Incorporated (LEG) Management on Q4 2021 Results – Earnings Call Transcript
Feb. 08, 2022 10:39 AM ETLeggett & Platt, Incorporated (LEG)
Q4: 2022-02-07 Earnings Summary
EPS of $0.77 beats by $0.04 | Revenue of $1.33B (12.77% Y/Y) beats by $47.39M
Leggett & Platt, Incorporated (NYSE:LEG) Q4 2021 Earnings Conference Call February 8, 2022 8:30 AM ET
Company Participants
Susan McCoy – Senior Vice President of Investor Relations
Mitch Dolloff – President & Chief Operating Officer
Jeff Tate – Executive Vice President & Chief Financial Officer
Steve Henderson – Executive Vice President & President, Specialized Products & Furniture, Flooring and Textile Products
Tyson Hagale – Senior Vice President & President, Bedding Products
Mitch Dolloff
Good morning and thank you all for participating in our fourth quarter call. First, I’d like to welcome Tyson Hagale, President of our Bedding Products segment. Tyson is joining us today to participate in Q&A and will be a regular participant on these calls. Tyson has been with the company for over 20 years and previously served in various roles of increasing responsibility in our bedding, furniture and corporate development areas.
In 2021, Leggett & Platt achieved several milestones. We attained record sales and EPS. We increased our dividend for the 50th consecutive year. We issued our inaugural sustainability report. We promoted Tyson Hagale to lead our Bedding Products segment and Sonia Smith to lead our automotive business, two outstanding long-tenured employees.
And added newly created positions including our first Chief Human Resources Officer, our first Inclusion Diversity and Equity Director, and our first Sustainability Manager, all demonstrating our commitment to ESG. Those achievements would not be possible without our 20,000 employees who are dedicated to creating innovative sustainable products for our customers ensuring a safe and inclusive workplace and driving value for our shareholders. I want to thank our employees for their tremendous contributions in another challenging year. Your collaboration, agility, dedication and commitment to our values drive our success.
Yesterday, we reported record quarterly sales from continuing operations of $1.33 billion EBIT of $152 million and earnings per share of $0.77. Sales in the quarter were up 13% versus fourth quarter of 2020 and reflect the pass-through of significant inflation in 2021 partially offset by lower volume in several of our businesses. When comparing to the pre-pandemic results of fourth quarter 2019, trade sales grew 16%, adjusted EBITDA increased 15% and adjusted EPS increased 31%.
For the full year 2021 sales increased 19% to $5.07 billion from a combination of raw material-related price increases, volume gains and currency benefits. EBIT increased 46% and adjusted EBIT increased 25% primarily from volume recovery from pandemic-related sales declines in 2020, expanded metal margins in our rod mill and pricing discipline.
Full year EPS was $2.94. And adjusted EPS was $2.78 a 29% increase versus 2020 adjusted EPS of $2.16. When comparing to the pre-pandemic results of 2019, trade sales grew 7%, adjusted EBITDA increased 9% and adjusted EPS increased 16%.
While we continue to navigate a number of macro market challenges including supply chain constraints, inflation and a likely shift to tighter monetary policy, we expect to see improvements in 2022 as conditions stabilize and growth continues in our businesses most negatively impacted by the pandemic.
Moving on to the segments. Sales in our Bedding Products segment were up 18% versus the fourth quarter of 2020 and up 22% versus the fourth quarter of 2019 primarily from raw material-related selling price increases from inflation in steel, chemicals and non-woven fabrics.
Volume was down in both the one year and two year periods primarily due to challenges with chemical and labor availability in the US market early in the quarter and softness in the US and European market demand, which developed later in the quarter.
Supply of chemicals used in our specialty foam operations negatively impacted our production levels in October and November, but improved in December. Despite softening in recent months, we still expect reasonable demand in 2022.
EBITDA margins in the segment were lower versus fourth quarter 2020 primarily from lower volume, investments to maintain labor and higher transportation costs. Adjusted EBITDA margins improved over fourth quarter 2019 primarily from expanded metal margins in our Steel Rod business and fixed cost actions taken in 2020.
Sales in our Specialized Products segment were down 3% from the fourth quarter 2020 due to lower volume in automotive partially offset by growth in hydraulic cylinders and aerospace. Sales were down 2% from fourth quarter 2019 due to lower volume in automotive and aerospace partially offset by growth in hydraulic cylinders.
In our automotive business volume was down over the one year and two year periods. While industry production improved sequentially from the third quarter, semiconductor shortages negatively impacted vehicle production levels in the fourth quarter.
Consumer demand remains strong and vehicle inventory remains at record low levels. As supply chains begin to stabilize the industry should see improving production in the second half of 2022. Industry forecasts indicate recovery continuing through 2023.
In our aerospace business demand for fabricated debt assemblies continue to be at pre-pandemic levels and we began to see demand recovery for welded and seamless tube products in the fourth quarter. We expect to see continued recovery in 2022.
However with the lingering impact from pandemic-related disruption in the air travel, resulting buildup of aircraft and supply chain inventories the industry is not anticipated to return to 2020 — sorry 2019 demand levels until 2024.
End market demand in hydraulic cylinders is strong and order backlogs in the industry remain high. However, global supply chain constraints and labor availability has hampered the ability of our OEM customers to ramp-up production. We expect our sales to increase as OEM production increases. EBITDA margins in the segment declined over the one year and two year period primarily from lower volume partially offset by fixed cost actions taken last year.
Sales in our Furniture Flooring & Textile Products segment were up 17% versus fourth quarter 2020, primarily from raw material-related selling price increases and volume recovery in Work Furniture, partially offset by lower volume in Flooring products and Fabric Converting.
Sales were up 22% versus fourth quarter 2019, primarily from raw material-related selling price increases and volume growth in Geo Components and Home Furniture, partially offset by lower volume in Flooring products.
We expect continued strength in our Home Furniture business in 2022, as customer backlogs remained elevated. So far this year the Chinese market has slowed, as most manufacturers are taking early and longer Chinese New Year holidays to avoid anticipated COVID-related quarantines.
Work Furniture sales recovered to pre-pandemic levels with steady demand for products sold for residential use and improving demand in the contract market. We expect modest growth in 2022, as residential and hybrid work products remain relatively strong and the contract market continues to gradually improve as employees return to the office.
Volume in our Fabric Converting and Geo Components businesses have returned to a more normalized level after experiencing pandemic-related sales opportunities in the back half of 2020. In Flooring products, residential demand remained strong, while hospitality demand remains well below pre-pandemic levels. Volume was down in the quarter due to limited labor availability and transportation disruptions. EBITDA margins in the segment improved over the one and two-year periods, primarily from pricing discipline.
For the company overall, the fixed cost actions we took in 2020 reduced our fourth quarter cost by approximately $20 million versus the fourth quarter of 2019. For the full year 2021, we maintained approximately $80 million of the approximately $90 million of fixed cost actions taken in 2020. We remain focused on controlling our costs by only adding fixed costs as necessary to support future growth opportunities.
Leggett remains well positioned both competitively and financially, to capitalize on long-term opportunities in our various end markets. Our enduring fundamentals give us confidence in our ability to continue creating long-term value for our shareholders.
Read more here:
February 8, 2022
Leggett & Platt, Incorporated (LEG) Management on Q4 2021 Results – Earnings Call Transcript
Feb. 08, 2022 10:39 AM ETLeggett & Platt, Incorporated (LEG)
Q4: 2022-02-07 Earnings Summary
EPS of $0.77 beats by $0.04 | Revenue of $1.33B (12.77% Y/Y) beats by $47.39M
Leggett & Platt, Incorporated (NYSE:LEG) Q4 2021 Earnings Conference Call February 8, 2022 8:30 AM ET
Company Participants
Susan McCoy – Senior Vice President of Investor Relations
Mitch Dolloff – President & Chief Operating Officer
Jeff Tate – Executive Vice President & Chief Financial Officer
Steve Henderson – Executive Vice President & President, Specialized Products & Furniture, Flooring and Textile Products
Tyson Hagale – Senior Vice President & President, Bedding Products
Mitch Dolloff
Good morning and thank you all for participating in our fourth quarter call. First, I’d like to welcome Tyson Hagale, President of our Bedding Products segment. Tyson is joining us today to participate in Q&A and will be a regular participant on these calls. Tyson has been with the company for over 20 years and previously served in various roles of increasing responsibility in our bedding, furniture and corporate development areas.
In 2021, Leggett & Platt achieved several milestones. We attained record sales and EPS. We increased our dividend for the 50th consecutive year. We issued our inaugural sustainability report. We promoted Tyson Hagale to lead our Bedding Products segment and Sonia Smith to lead our automotive business, two outstanding long-tenured employees.
And added newly created positions including our first Chief Human Resources Officer, our first Inclusion Diversity and Equity Director, and our first Sustainability Manager, all demonstrating our commitment to ESG. Those achievements would not be possible without our 20,000 employees who are dedicated to creating innovative sustainable products for our customers ensuring a safe and inclusive workplace and driving value for our shareholders. I want to thank our employees for their tremendous contributions in another challenging year. Your collaboration, agility, dedication and commitment to our values drive our success.
Yesterday, we reported record quarterly sales from continuing operations of $1.33 billion EBIT of $152 million and earnings per share of $0.77. Sales in the quarter were up 13% versus fourth quarter of 2020 and reflect the pass-through of significant inflation in 2021 partially offset by lower volume in several of our businesses. When comparing to the pre-pandemic results of fourth quarter 2019, trade sales grew 16%, adjusted EBITDA increased 15% and adjusted EPS increased 31%.
For the full year 2021 sales increased 19% to $5.07 billion from a combination of raw material-related price increases, volume gains and currency benefits. EBIT increased 46% and adjusted EBIT increased 25% primarily from volume recovery from pandemic-related sales declines in 2020, expanded metal margins in our rod mill and pricing discipline.
Full year EPS was $2.94. And adjusted EPS was $2.78 a 29% increase versus 2020 adjusted EPS of $2.16. When comparing to the pre-pandemic results of 2019, trade sales grew 7%, adjusted EBITDA increased 9% and adjusted EPS increased 16%.
While we continue to navigate a number of macro market challenges including supply chain constraints, inflation and a likely shift to tighter monetary policy, we expect to see improvements in 2022 as conditions stabilize and growth continues in our businesses most negatively impacted by the pandemic.
Moving on to the segments. Sales in our Bedding Products segment were up 18% versus the fourth quarter of 2020 and up 22% versus the fourth quarter of 2019 primarily from raw material-related selling price increases from inflation in steel, chemicals and non-woven fabrics.
Volume was down in both the one year and two year periods primarily due to challenges with chemical and labor availability in the US market early in the quarter and softness in the US and European market demand, which developed later in the quarter.
Supply of chemicals used in our specialty foam operations negatively impacted our production levels in October and November, but improved in December. Despite softening in recent months, we still expect reasonable demand in 2022.
EBITDA margins in the segment were lower versus fourth quarter 2020 primarily from lower volume, investments to maintain labor and higher transportation costs. Adjusted EBITDA margins improved over fourth quarter 2019 primarily from expanded metal margins in our Steel Rod business and fixed cost actions taken in 2020.
Sales in our Specialized Products segment were down 3% from the fourth quarter 2020 due to lower volume in automotive partially offset by growth in hydraulic cylinders and aerospace. Sales were down 2% from fourth quarter 2019 due to lower volume in automotive and aerospace partially offset by growth in hydraulic cylinders.
In our automotive business volume was down over the one year and two year periods. While industry production improved sequentially from the third quarter, semiconductor shortages negatively impacted vehicle production levels in the fourth quarter.
Consumer demand remains strong and vehicle inventory remains at record low levels. As supply chains begin to stabilize the industry should see improving production in the second half of 2022. Industry forecasts indicate recovery continuing through 2023.
In our aerospace business demand for fabricated debt assemblies continue to be at pre-pandemic levels and we began to see demand recovery for welded and seamless tube products in the fourth quarter. We expect to see continued recovery in 2022.
However with the lingering impact from pandemic-related disruption in the air travel, resulting buildup of aircraft and supply chain inventories the industry is not anticipated to return to 2020 — sorry 2019 demand levels until 2024.
End market demand in hydraulic cylinders is strong and order backlogs in the industry remain high. However, global supply chain constraints and labor availability has hampered the ability of our OEM customers to ramp-up production. We expect our sales to increase as OEM production increases. EBITDA margins in the segment declined over the one year and two year period primarily from lower volume partially offset by fixed cost actions taken last year.
Sales in our Furniture Flooring & Textile Products segment were up 17% versus fourth quarter 2020, primarily from raw material-related selling price increases and volume recovery in Work Furniture, partially offset by lower volume in Flooring products and Fabric Converting.
Sales were up 22% versus fourth quarter 2019, primarily from raw material-related selling price increases and volume growth in Geo Components and Home Furniture, partially offset by lower volume in Flooring products.
We expect continued strength in our Home Furniture business in 2022, as customer backlogs remained elevated. So far this year the Chinese market has slowed, as most manufacturers are taking early and longer Chinese New Year holidays to avoid anticipated COVID-related quarantines.
Work Furniture sales recovered to pre-pandemic levels with steady demand for products sold for residential use and improving demand in the contract market. We expect modest growth in 2022, as residential and hybrid work products remain relatively strong and the contract market continues to gradually improve as employees return to the office.
Volume in our Fabric Converting and Geo Components businesses have returned to a more normalized level after experiencing pandemic-related sales opportunities in the back half of 2020. In Flooring products, residential demand remained strong, while hospitality demand remains well below pre-pandemic levels. Volume was down in the quarter due to limited labor availability and transportation disruptions. EBITDA margins in the segment improved over the one and two-year periods, primarily from pricing discipline.
For the company overall, the fixed cost actions we took in 2020 reduced our fourth quarter cost by approximately $20 million versus the fourth quarter of 2019. For the full year 2021, we maintained approximately $80 million of the approximately $90 million of fixed cost actions taken in 2020. We remain focused on controlling our costs by only adding fixed costs as necessary to support future growth opportunities.
Leggett remains well positioned both competitively and financially, to capitalize on long-term opportunities in our various end markets. Our enduring fundamentals give us confidence in our ability to continue creating long-term value for our shareholders.
Read more here:
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