01—Abstract
Summary
Summary of the 10-K filed February 22, 2024. Cited figures are marked; the original filing is the authoritative source.
LyondellBasell Industries N.V. reported 2023 net income of $2,121 milliona, down from $3,889 million in 2022, on sales and other operating revenues of $41,107 million versus $50,451 million.
Operating income fell to $3,053 millionb from $5,101 million, with EBITDA of $4,509 million compared with $6,301 million. The decline reflected softer global demand, new industry capacity and lower average sales prices tied to crude oil, partly offset by lower feedstock and energy costs. The company recorded non-cash impairments of $518 million, including a $252 million goodwill impairment in Advanced Polymer Solutions and a $192 million write-down of its European PO joint venture investment.
Cash from operating activities was $4,942 millionc, and the company returned about $1.8 billion to shareholders through dividends ($1,610 million) and share repurchases ($211 million), while capital expenditures were $1,531 million. Total debt was $11,232 million at year-end, and cash and cash equivalents were $3,390 million.
Management plans a 2024 capital budget of about $2.1 billiond and a Value Enhancement Program targeting roughly $600 million of recurring annual EBITDA by year-end 2024 and up to $1 billion by 2025. The company also decided to exit its Houston refinery no later than the end of the first quarter of 2025 and agreed to sell its ethylene oxide and derivatives business for $700 million.
02—Key points
Key Highlights
- Net income fell to $2,121 million in 2023 from $3,889 million in 2022; diluted EPS was $6.46 versus $11.81.
- Sales and other operating revenues declined to $41,107 million from $50,451 million, with lower average sales prices across most segments.
- Operating income was $3,053 million versus $5,101 million, and EBITDA was $4,509 million versus $6,301 million.
- Non-cash impairments totaled $518 million, including a $252 million APS goodwill charge and a $192 million full write-down of the European PO joint venture investment.
- Operating cash flow was $4,942 million; $1.8 billion was returned to shareholders through dividends and share repurchases.
- The company plans to exit the Houston refinery by the end of Q1 2025 and agreed to sell its EO&D business in Bayport, Texas for $700 million, with closing expected in Q2 2024.
- Agreed in January 2024 to acquire a 35% interest in NATPET, Saudi Arabia, for approximately $500 million.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, LyondellBasell Industries kept $0.06.
- Revenue$33.34B100.0%
- Cost of revenue−$28.43B85.3%
- Gross profit$4.90B14.7%
- Operating costs−$2.18B6.5%
- Operating income$2.73B8.2%
- Interest, other & tax−$604.0M1.8%
- Net income$2.12B6.4%
Where FY2023 revenue went
$33.34B- Cost of revenue: $28.43B, 85% of revenue
- Net income: $2.12B, 6.4% of revenue
- R&D: $130.0M, 0.4% of revenue
- SG&A: $1.54B, 4.6% of revenue
- Other operating costs: $507.0M, 1.5% of revenue
- Interest, other & tax: $604.0M, 1.8% of revenue
Kept 6.4% as net incomeNet income $2.12B · 6.4%R&D $130.0M · 0.4%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 22, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $33.34B$50.45B | −33.9% |
| Cost of Revenue | $28.43B$43.85B | −35.1% |
| Gross Profit | $4.90B$6.60B | −25.8% |
| R&D Expenses | $130.00M$124.00M | +4.8% |
| SG&A Expenses | $1.54B$1.31B | +17.5% |
| Operating Expenses | $30.61B$45.35B | −32.5% |
| Operating Income | $2.73B$5.10B | −46.6% |
| Interest Expense | $477.00M$287.00M | +66.2% |
| Net Income | $2.12B$3.89B | −45.5% |
| EPS (Basic) | $6.48$11.84 | −45.3% |
| EPS (Diluted) | $6.46$11.81 | −45.3% |
05—Questions
Frequently Asked Questions
Why did LyondellBasell's earnings decline in 2023?
The filing attributes the decline to soft global demand, capacity additions and economic uncertainty, which lowered average sales prices and margins in O&P-Americas, O&P-EAI, I&D and APS. Refining results also fell on lower diesel and distillate demand, while oxyfuels margins improved. Lower feedstock and energy costs partly offset these effects.
What were the major non-cash charges in 2023?
The company recognized $518 million of impairments: a $252 million goodwill impairment in the Advanced Polymer Solutions segment, arising from moving the Catalloy and polybutene-1 businesses out of that segment, and a $192 million impairment that fully wrote down its investment in the European PO joint venture.
How is LyondellBasell returning cash to shareholders?
In 2023 the company paid $1,610 million in common dividends, at $4.94 per share, and repurchased 2.3 million shares for $211 million. It targets returning 70% of free cash flow over the long term and intends to keep paying quarterly dividends with a goal of increasing them over time.
What is the company's plan for the Houston refinery and the Value Enhancement Program?
The company determined that exiting the refining business no later than the end of Q1 2025 is its best strategic and financial path, and it recorded $334 million of expense for the exit in 2023. The Value Enhancement Program reached a year-end 2023 run rate of about $400 million of recurring annual EBITDA, with a 2024 year-end target of about $600 million and up to $1 billion by 2025.
What is the company's debt and liquidity position?
At December 31, 2023, total debt including current maturities was $11,232 million and cash and cash equivalents were $3,390 million. Unused availability was $4,150 million, comprising a $3,250 million senior revolving credit facility and a $900 million U.S. receivables facility, and the company stated it was in compliance with its debt covenants.
06—Continue