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Everchem Updates
VOLUME XXI
September 14, 2023
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July 25, 2019
Tempur Sealy sees outperformance in North America
Tempur Sealy (NYSE:TPX) is on watch after reporting North American sales growth of 11.4% in Q2 and international sales growth of 2%.
The company’s gross margin rate improved 230 bps to 40.8% of sales during the quarter.
CEO update: “The combination of our powerful omni-channel distribution platform and our innovative products delivered double-digit revenue and earnings growth. Our North America operations had a stand-out quarter driven by our new Breeze line of mattresses and 78% growth in our direct to consumer channel. These results, combined with our future expected earnings growth outlook, support a return to our share repurchase program. We expect our leverage ratio to move to the lower end of our targeted range of 3 to 4 times debt to adjusted EBITDA in the near-term, while at the same time, subject to market conditions, we are targeting quarterly share repurchases of approximately $50 million.”
Looking ahead, Tempur Sealy expects full-year EBITA of $450M to $480M vs. $435M to $475M prior and $470M consensus estimate.
https://seekingalpha.com/news/3481470-tempur-sealy-sees-outperformance-north-america#email_link
July 25, 2019
Tempur Sealy sees outperformance in North America
Tempur Sealy (NYSE:TPX) is on watch after reporting North American sales growth of 11.4% in Q2 and international sales growth of 2%.
The company’s gross margin rate improved 230 bps to 40.8% of sales during the quarter.
CEO update: “The combination of our powerful omni-channel distribution platform and our innovative products delivered double-digit revenue and earnings growth. Our North America operations had a stand-out quarter driven by our new Breeze line of mattresses and 78% growth in our direct to consumer channel. These results, combined with our future expected earnings growth outlook, support a return to our share repurchase program. We expect our leverage ratio to move to the lower end of our targeted range of 3 to 4 times debt to adjusted EBITDA in the near-term, while at the same time, subject to market conditions, we are targeting quarterly share repurchases of approximately $50 million.”
Looking ahead, Tempur Sealy expects full-year EBITA of $450M to $480M vs. $435M to $475M prior and $470M consensus estimate.
https://seekingalpha.com/news/3481470-tempur-sealy-sees-outperformance-north-america#email_link
July 25, 2019
Dow reports second quarter 2019 results
MIDLAND, Mich.–(BUSINESS WIRE)– Dow (NYSE: DOW):
FINANCIAL HIGHLIGHTS
- GAAP EPS from continuing operations was $0.10; Op. EPS¹ of $0.86.
- GAAP Net Income was $90 million; Op. EBIT¹ of $1.1 billion.
- Net Sales were $11.0 billion, in-line with the Company’s guidance and down 14% versus pro forma results in the year-ago period, driven primarily by local price declines in polyethylene, siloxanes and isocyanates and lower sales of hydrocarbon co-products.
- Volume declined 3% versus pro forma results in the year-ago period, driven primarily by higher ethane feedstock usage and lower hydrocarbon co-product sales, due to increased ethylene integration from the startup of new downstream assets. This was partly offset by demand growth in plastics packaging applications, supported by new capacity on the U.S. Gulf Coast.
- Local price declined 9% versus pro forma results in the year-ago period, with declines in all segments. Currency decreased sales by 2%, driven primarily by Europe, Middle East, Africa & India (EMEAI).
- Equity losses were $15 million, compared to pro forma equity earnings of $193 million in the year-ago period. The reduction was primarily driven by margin compression in monoethylene glycol (MEG) and polyethylene at the Kuwait joint ventures and isocyanates at the Sadara joint venture.
- Operating EBIT was $1.1 billion, down 35% versus pro forma results in the year-ago period. Margin compression in polyethylene, isocyanates and siloxanes, as well as lower equity earnings, more than offset volume gains in packaging applications, contributions from new capacity on the U.S. Gulf Coast and savings from cost synergies and stranded cost removal.
- Delivered more than $130 million of cost synergy savings and $45 million of stranded cost removal.
- Cash provided by operating activities – continuing operations was $960 million, up 26% versus results in the year-ago period.
- Returned $0.8 billion to shareholders in the quarter, including $0.5 billion in dividends and $0.3 billion in share repurchases.
SUMMARY FINANCIAL RESULTS
Three Months Ended
June 30 |
Three Months Ended
March 31 |
||||
In millions, except per share amounts | 2Q19
As Reported |
2Q18²
Pro Forma |
vs. SQLY
[B / (W)] |
1Q19²
Pro Forma |
vs. PQ
[B / (W)] |
Net Sales | $11,014 | $12,851 | $(1,837) | $11,016 | $(2) |
Operating EBIT¹ | $1,059 | $1,639 | $(580) | $1,143 | $(84) |
Op. EBIT Margin¹ | 9.6% | 12.8% | (320) bps | 10.4% | (80) bps |
Operating EBITDA¹ | $1,802 | $2,362 | $(560) | $1,886 | $(84) |
Operating EPS¹ | $0.86 | $1.41 | $(0.55) | $0.98 | $(0.12) |
Cash provided by operating activities – continuing operations | $960 | $760 | $200 | $1,043 | $(83) |
- Op. EPS, Op. EBIT, Op. EBIT Margin and Op. EBITDA are non-GAAP measures. See page 13 for further discussion.
- Financial information for the three months ended March 31, 2019, three months ended June 30, 2018 and the six months periods ended June 30, 2019 and 2018, was prepared on a pro forma basis and determined in accordance with Article 11 of Regulation S-X.
CEO QUOTE
Jim Fitterling, chief executive officer, commented on the quarter:
“In spite of challenging market conditions, our results reflect the benefits of Dow’s streamlined and more focused portfolio, continued cost synergy savings and stranded cost removal. In the quarter, we faced margin compression in our intermediate products in both our core business and equity earnings. However, we achieved demand growth in packaging applications, supported by new capacity on the U.S. Gulf Coast. We delivered more than $175 million of savings from cost synergies and stranded cost removal. We also moved quickly to further tighten our expense and capital spending in response to the macro environment. We delivered higher cash flow from operations. And on a sequential basis, after adjusting for higher planned maintenance spending, the Dow team achieved core earnings growth. This result underscores our discipline and focus on agile operational and financial management.”
Industrial Intermediates & Infrastructure
Three Months Ended
June 30 |
Three Months Ended
March 31 |
||||
In millions, except per share amounts | 2Q19 | 2Q18 | vs. SQLY
[B / (W)] |
1Q19 | vs. PQ
[B / (W)] |
Net Sales | $3,342 | $3,972 | $(630) | $3,489 | $(147) |
Operating EBIT | $154 | $502 | $(348) | $277 | $(123) |
Op. EBIT Margin | 4.6% | 12.6% | (800) bps | 7.9% | (330) bps |
Equity Earnings | $(78) | $96 | $(174) | $(48) | $(30) |
Industrial Intermediates & Infrastructure net sales were $3.3 billion, down 16% versus pro forma results in the year-ago period. Volume declined 1%, local price decreased 12% and currency decreased net sales by 3%.
Polyurethanes & Construction Chemicals reported a net sales decline, primarily driven by lower isocyanate prices, as well as currency headwinds in EMEAI. Volume gains in isocyanates and systems applications were offset by declines in polyols and propylene oxide/propylene glycol.
OUTLOOK
“Looking ahead, we still see global growth, but the pace of that expansion has slowed, as buying patterns remain cautious due to ongoing trade and geopolitical uncertainties,” said Fitterling. “In this environment, we will maintain cost and operating discipline by continuing cost synergy and stranded cost removal actions, by reducing our planned capital expenditures for the year from $2.5 billion to $2 billion, without sacrificing high-return growth projects, and by continuing with disciplined margin management. These near-term steps are responsive to the current market environment.
“Over the longer-term, our purpose-built portfolio and leading business positions, combined with a leaner cost structure and a suite of incremental, high-return growth investments, will continue to differentiate Dow and drive our earnings growth trajectory.”
https://seekingalpha.com/pr/17582287-dow-reports-second-quarter-2019-results
July 25, 2019
Dow reports second quarter 2019 results
MIDLAND, Mich.–(BUSINESS WIRE)– Dow (NYSE: DOW):
FINANCIAL HIGHLIGHTS
- GAAP EPS from continuing operations was $0.10; Op. EPS¹ of $0.86.
- GAAP Net Income was $90 million; Op. EBIT¹ of $1.1 billion.
- Net Sales were $11.0 billion, in-line with the Company’s guidance and down 14% versus pro forma results in the year-ago period, driven primarily by local price declines in polyethylene, siloxanes and isocyanates and lower sales of hydrocarbon co-products.
- Volume declined 3% versus pro forma results in the year-ago period, driven primarily by higher ethane feedstock usage and lower hydrocarbon co-product sales, due to increased ethylene integration from the startup of new downstream assets. This was partly offset by demand growth in plastics packaging applications, supported by new capacity on the U.S. Gulf Coast.
- Local price declined 9% versus pro forma results in the year-ago period, with declines in all segments. Currency decreased sales by 2%, driven primarily by Europe, Middle East, Africa & India (EMEAI).
- Equity losses were $15 million, compared to pro forma equity earnings of $193 million in the year-ago period. The reduction was primarily driven by margin compression in monoethylene glycol (MEG) and polyethylene at the Kuwait joint ventures and isocyanates at the Sadara joint venture.
- Operating EBIT was $1.1 billion, down 35% versus pro forma results in the year-ago period. Margin compression in polyethylene, isocyanates and siloxanes, as well as lower equity earnings, more than offset volume gains in packaging applications, contributions from new capacity on the U.S. Gulf Coast and savings from cost synergies and stranded cost removal.
- Delivered more than $130 million of cost synergy savings and $45 million of stranded cost removal.
- Cash provided by operating activities – continuing operations was $960 million, up 26% versus results in the year-ago period.
- Returned $0.8 billion to shareholders in the quarter, including $0.5 billion in dividends and $0.3 billion in share repurchases.
SUMMARY FINANCIAL RESULTS
Three Months Ended
June 30 |
Three Months Ended
March 31 |
||||
In millions, except per share amounts | 2Q19
As Reported |
2Q18²
Pro Forma |
vs. SQLY
[B / (W)] |
1Q19²
Pro Forma |
vs. PQ
[B / (W)] |
Net Sales | $11,014 | $12,851 | $(1,837) | $11,016 | $(2) |
Operating EBIT¹ | $1,059 | $1,639 | $(580) | $1,143 | $(84) |
Op. EBIT Margin¹ | 9.6% | 12.8% | (320) bps | 10.4% | (80) bps |
Operating EBITDA¹ | $1,802 | $2,362 | $(560) | $1,886 | $(84) |
Operating EPS¹ | $0.86 | $1.41 | $(0.55) | $0.98 | $(0.12) |
Cash provided by operating activities – continuing operations | $960 | $760 | $200 | $1,043 | $(83) |
- Op. EPS, Op. EBIT, Op. EBIT Margin and Op. EBITDA are non-GAAP measures. See page 13 for further discussion.
- Financial information for the three months ended March 31, 2019, three months ended June 30, 2018 and the six months periods ended June 30, 2019 and 2018, was prepared on a pro forma basis and determined in accordance with Article 11 of Regulation S-X.
CEO QUOTE
Jim Fitterling, chief executive officer, commented on the quarter:
“In spite of challenging market conditions, our results reflect the benefits of Dow’s streamlined and more focused portfolio, continued cost synergy savings and stranded cost removal. In the quarter, we faced margin compression in our intermediate products in both our core business and equity earnings. However, we achieved demand growth in packaging applications, supported by new capacity on the U.S. Gulf Coast. We delivered more than $175 million of savings from cost synergies and stranded cost removal. We also moved quickly to further tighten our expense and capital spending in response to the macro environment. We delivered higher cash flow from operations. And on a sequential basis, after adjusting for higher planned maintenance spending, the Dow team achieved core earnings growth. This result underscores our discipline and focus on agile operational and financial management.”
Industrial Intermediates & Infrastructure
Three Months Ended
June 30 |
Three Months Ended
March 31 |
||||
In millions, except per share amounts | 2Q19 | 2Q18 | vs. SQLY
[B / (W)] |
1Q19 | vs. PQ
[B / (W)] |
Net Sales | $3,342 | $3,972 | $(630) | $3,489 | $(147) |
Operating EBIT | $154 | $502 | $(348) | $277 | $(123) |
Op. EBIT Margin | 4.6% | 12.6% | (800) bps | 7.9% | (330) bps |
Equity Earnings | $(78) | $96 | $(174) | $(48) | $(30) |
Industrial Intermediates & Infrastructure net sales were $3.3 billion, down 16% versus pro forma results in the year-ago period. Volume declined 1%, local price decreased 12% and currency decreased net sales by 3%.
Polyurethanes & Construction Chemicals reported a net sales decline, primarily driven by lower isocyanate prices, as well as currency headwinds in EMEAI. Volume gains in isocyanates and systems applications were offset by declines in polyols and propylene oxide/propylene glycol.
OUTLOOK
“Looking ahead, we still see global growth, but the pace of that expansion has slowed, as buying patterns remain cautious due to ongoing trade and geopolitical uncertainties,” said Fitterling. “In this environment, we will maintain cost and operating discipline by continuing cost synergy and stranded cost removal actions, by reducing our planned capital expenditures for the year from $2.5 billion to $2 billion, without sacrificing high-return growth projects, and by continuing with disciplined margin management. These near-term steps are responsive to the current market environment.
“Over the longer-term, our purpose-built portfolio and leading business positions, combined with a leaner cost structure and a suite of incremental, high-return growth investments, will continue to differentiate Dow and drive our earnings growth trajectory.”
https://seekingalpha.com/pr/17582287-dow-reports-second-quarter-2019-results
July 25, 2019
BASF SE (BAS.XE) said Thursday that second-quarter profit jumped despite a drop in sales after the company booked a sizeable gain from the spinoff of its oil-and-gas business. The chemical company’s net profit grew to 6.46 billion euros ($7.20 billion) from EUR1.48 billion in the same period a year earlier. The boost was predominantly due to the merger of BASF’s oil-and-gas business Wintershall and DEA Deutsche Erdoel, which was completed in May. Sales fell to EUR15.16 billion from EUR15.78 billion, due to lower sales volumes in all business segments except nutrition and care, the company said. The results follow a warning earlier this month, when BASF said it would miss expectations due to lower industrial production, a weak North American agricultural sector and a growth downturn in the automotive industry. BASF is in the midst of an overhaul aimed at boosting profitability. In June it said would cut roughly 5% of its workforce. Around 1,100 of the 6,000 employees affected have so far signed severance agreements, the company said Thursday, adding that it plans provisions of EUR260 million for the cuts. In the second quarter, BASF’s earnings before interest and taxes before special items–which strips out the effects of the oil-and-gas deal–was EUR1.05 billion, down 47% from the same period the previous year. BASF said results were particularly hit by declining earnings in the chemicals and materials segments. The company said the macroeconomic environment became challenging in the second quarter and global trade conflicts such as the one between the U.S. and China were a “serious concern.” Chief Executive Martin Brudermueller said he didn’t expect that dispute to be resolved before next year. The company initially estimated it would be resolved by the middle of this year. BASF backed its outlook for the full year, which it adjusted in early July. It forecasts a slight decline in sales and a drop of up to 30% in EBIT before special items. https://www.morningstar.com/news/dow-jones/201907253614/basf-2q-sales-fell-profit-jumped-due-to-wintershall-spinoff-updateBASF 2Q Sales Fell, Profit Jumped Due to Wintershall Spinoff — Update