HIP Segment EBITDA: $264 million for Q1 2024, marking a record first quarter result.
HIP EBITDA Margin: Reached 25% in Q1 2024, up from 20% in the prior year period.
Year-over-Year Gains: HIP segment sales volume grew 14% year-over-year in Q1 2024.
Future Guidance
2024 Revenue Guidance: HIP segment expected to generate revenues between $4 billion and $4.4 billion.
2024 EBITDA Margin Guidance: HIP segment EBITDA margin expected to be around 20%.
2024 Capital Expenditures: Projected to be approximately $1 billion, akin to depreciation and amortization run rate.
2024 Cost Savings Target: Expected to achieve $125 million to $150 million, with $35 million already realized in Q1 2024.
Effective Tax Rate: Anticipated to be approximately 23% for the full year of 2024.
Cash Interest Expense: Forecasted to be about $160 million for 2024.
Trends, Market Conditions, Sentiment
Improving Trends: Sequential improvement in sales volumes and pricing into Q2 2024, signaling recovery and end of destocking from 2023.
Global Economic Conditions: Remain sluggish with high inflation and restrictive monetary policy affecting consumer demand.
PEM Segment: Faced challenges due to weak global economic conditions but is seeing signs of recovery with demand beginning to recover and an end to destocking activities.
HIP Segment: Delivered stable and improved results, benefitting from favorable demographic trends and operational efficiencies.
Cost Reduction Efforts: Focused on improving global competitiveness, especially in the epoxy and European operations.
Investments in Sustainability: Continued focus on developing products that help customers achieve sustainability goals, contributing to sales growth.
Global Macro Environment: Anticipated slow improvement throughout 2024, with Westlake poised to capitalize on long-term demand trends in essential materials and housing infrastructure.
Notable Quotes
Albert Chao, President and CEO: “Overall, I’m pleased with the progress that we are making to improve our position, our portfolio of businesses and create value for our shareholders.”
M. Bender, EVP and CFO: “We will continue to look for opportunities to strategically deploy our balance sheet in order to create long-term value.”
About the HIP Segment’s Performance: “HIP strong 14% year-over-year volume growth in the first quarter in part reflects the benefits of the broad branded product set, combined with a much wider geographical footprint, driving cross-selling of our products through nationwide distributors.”
On Global Economic Conditions: “Overall, global macroeconomic conditions remain sluggish…but we continue to have a positive view for our long-term demand supported by the growing global need for clean water, transportation, renewable energy, packaging, and consumer goods.”
