伊士曼化學 (EMN) 2020 Q1 法說會逐字稿

Good day, everyone, and welcome to the Eastman Chemical First Quarter 2020 Conference Call. Today's conference is being recorded. This call is being broadcast live on the Eastman's website, www.eastman.com. We will now turn the call over to Mr. Greg Riddle of Eastman Company Chemical, Investor Relations. Please go ahead, sir.

大家好，歡迎參加伊士曼化學2020年第一季電話會議。今天的會議正在錄製中。這場電話會議正在伊士曼網站 www.eastman.com 上現場直播。現在我們將電話轉給伊士曼公司化學公司投資者關係部門的 Greg Riddle 先生。先生，請繼續。

Okay. Thanks, Molly, and good morning, everyone, and thanks for joining us. On the call with me today are Mark Costa, Board Chair and CEO; Willie McClain, Senior Vice President and CFO; and Jake LaRoe, Manager, Investor Relations. In case you missed it, yesterday after market close, in addition to our first quarter 2020 financial results news release and SEC 8-K filing, we posted slides and related prepared comments in the Investors section of our website, www.eastman.com. This is new for us, and I hope it's helpful to you.

好的。謝謝，莫莉，大家早安，謝謝你們加入我們。今天與我一起參加電話會議的有董事會主席兼首席執行官馬克·科斯塔 (Mark Costa)、高級副總裁兼首席財務官威利·麥克萊恩 (Willie McClain) 和投資者關係經理傑克·拉羅 (Jake LaRoe)。如果您錯過了，昨天收盤後，除了我們的 2020 年第一季財務業績新聞稿和 SEC 8-K 文件外，我們還在網站 www.eastman.com 的投資者部分發布了幻燈片和相關的準備好的評論。這對我們來說是新鮮事，我希望它對你有幫助。

Now before we begin, I'll cover 2 items. First, during this presentation, you will hear certain forward-looking statements concerning our plans and expectations. Actual events or results could differ materially. Certain factors related to future expectations are or will be detailed in the company's first quarter 2020 financial results news release during this call, in the preceding slides and prepared remarks, and in our filings with the Securities and Exchange Commission, including the Form 10-K filed for full year 2019 and the Form 10-Q to be filed for first quarter 2020. Second, earnings referenced in this presentation exclude certain noncore and unusual items and used an adjusted effective tax rate using the forecasted tax rate for the full year. Reconciliations to the most directly comparable GAAP financial measures and other associated disclosures, including a description of the excluded and adjusted items, are available in the first quarter financial results news release, which can be found on our website. With that, I'll turn the call over to Mark.

在我們開始之前，我將介紹兩件事。首先，在本次演示中，您將聽到有關我們的計劃和期望的一些前瞻性陳述。實際事件或結果可能有重大差異。與未來預期相關的某些因素已在或將在公司本次電話會議期間發布的 2020 年第一季度財務業績新聞稿、前面的幻燈片和準備好的發言稿以及我們向美國證券交易委員會提交的文件中詳細說明，包括提交的 2019 年全年 10-K 表和將於 2020 年第一季度提交的 10-Q 表。其次，本報告中提到的收益不包括某些非核心和非常規項目，並使用根據全年預測稅率調整後的有效稅率。與最直接可比較的 GAAP 財務指標及其他相關披露的對賬，包括排除和調整項目的描述，可在第一季度財務業績新聞稿中找到，您可以在我們的網站上找到。說完這些，我會把電話轉給馬克。

Thanks, Greg. Before we turn it over to your questions, I want to take a few minutes to make some comments. We all recognize that our world is facing unprecedented challenges right now. COVID-19 isn't like anything we've ever seen before. For those affected by the pandemic, I want to recognize how difficult this must be for what you're experiencing. So many are helping too in this difficult time, in the health care community, our first responders and government and local communities. And to them, I want to express my gratitude for helping keep us safe. As importantly, I want to thank the men and women of Eastman. It's been said that characters are revealed through adversity and Eastman team has demonstrated its character and risen to every challenge we've faced. We've come together in tremendous ways to keep everyone safe, all while keeping our operations going. I particularly want to thank our operators, our mechanics, our electricians and their families who've kept our plants running and get our products out to our customers every day. And to the many Eastman employees who are working from home or on site. Thank you for continuing to support our customers and keeping business going. So to you, my colleagues, at Eastman, thank you for your courage, your ingenuity, and your dedication. You're truly making an incredible difference in a material way.

謝謝，格雷格。在我們回答你們的問題之前，我想花幾分鐘時間發表一些評論。我們都體認到，我們的世界正面臨前所未有的挑戰。COVID-19 與我們以前見過的任何疾病都不一樣。對於那些受到疫情影響的人們，我想認識到你們所經歷的一切是多麼困難。在這個困難時期，許多人都在提供幫助，包括醫療保健界、急救人員、政府和當地社區。我要向他們表達我的感激之情，感謝他們幫助我們保持安全。同樣重要的是，我要感謝伊士曼的員工們。俗話說，逆境才能顯露出性格，而 Eastman 團隊已經展現了其性格，並迎接了我們面臨的每一個挑戰。我們齊心協力，以各種方式確保每個人的安全，同時確保我們的業務正常運作。我特別要感謝我們的操作員、機械師、電工以及他們的家人，他們每天保持我們的工廠運作並將我們的產品送到客戶手中。並向眾多在家或現場工作的伊士曼員工致以誠摯的問候。感謝您繼續支持我們的客戶並維持業務發展。所以，伊士曼的同事們，感謝你們的勇氣、智慧和奉獻。您確實在物質方面做出了令人難以置信的貢獻。

Turning to Q1. We had a strong first quarter in earnings and even more impressive free cash flow generation. This quarter demonstrates what Eastman can do when we have a day of sunlight between the trade war starting to moderate and COVID starting to escalate. Given all the uncertainty related to COVID-19, it's extremely difficult to predict financial results for 2020. So we are withdrawing our guidance. We did see some impact in the first quarter as we attribute a $20 million to $30 million EBIT decline to the impact of the pandemic.

轉向 Q1。我們第一季的獲利表現強勁，自由現金流的產生也更加令人印象深刻。本季展示了當貿易戰開始緩和而新冠疫情開始升級之間出現陽光時，伊士曼可以做些什麼。鑑於與 COVID-19 相關的所有不確定性，預測 2020 年的財務表現極為困難。因此我們撤回了我們的指導。我們確實在第一季看到了一些影響，因為我們將 2000 萬至 3000 萬美元的息稅前利潤下降歸因於疫情的影響。

Our diverse end markets mitigated some of this. While we saw a substantial impact in transportation and textiles, we also saw stability in a number of our other markets. As we look forward, we expect to see increasing challenges in transportation, textiles and energy markets. We also see a number of markets providing stability, such as consumables, medical, personal care and ag. And there are markets where we expect a mixed impact, such as building construction, consumer durables and industrial chemicals. None of us can know what will actually happen with how we attempt to restart these economies across the globe. We can take some insight and hope from the recovery we're seeing in China. We are far from having insight in how North America and Europe will restart. We were able to continue to lead from a position of strength because our innovation-driven growth model and our operational discipline. The benefits, especially in this uncertain time, have never been clearer. We have a long track record of transforming our portfolio towards specialties. And within this portfolio, we have built an outstanding innovation capability as well as a decisive operational execution capability.

我們多樣化的終端市場緩解了部分這種情況。雖然我們看到運輸和紡織業受到了重大影響，但我們的其他一些市場也保持了穩定。展望未來，我們預期交通運輸、紡織和能源市場將面臨越來越多的挑戰。我們也看到許多市場提供了穩定性，例如消費品、醫療、個人護理和農業。我們預計某些市場將受到混合影響，例如建築施工、耐用消費品和工業化學品。我們誰也無法知道，當我們試圖重啟全球經濟時，會發生什麼事。我們可以從中國經濟復甦中獲得一些啟示和希望。我們還遠不清楚北美和歐洲將如何重啟。由於我們擁有創新驅動的成長模式和營運紀律，我們能夠繼續保持領先地位。尤其是在這個不確定的時期，其好處從未如此明顯。我們在將產品組合轉向專業領域方面有著悠久的歷史。在這個投資組合中，我們建立了卓越的創新能力以及果斷的營運執行能力。

Eastman has industry-leading cash flow, which we have taken aggressive actions to sustain in this current environment with a strong balance sheet and significant sources of liquidity. In addition, we have a proven track record in our specialty businesses of driving growth above end markets with our innovation-driven growth model. That said, in this incredibly uncertain time, we are focused on the actions we can control and are exceptionally well positioned to weather this environment. We are realizing stability from our diverse end markets and leveraging our strong customer engagement. We're taking significant cost actions, adjusting our operations to the current demand environment, significantly reducing discretionary spend and deferring some turnaround of assets. We're expecting strong free cash flow this year with working capital expected to be a source of greater than $250 million beyond previous expectations. We reduced our expectations of capital expenditures by approximately $100 million to a range of $325 million to $375 million. Finally, we will maintain our disciplined approach to capital allocation, with a focus on our strong dividend and a significant debt repayment program, which we now expect to be substantially greater than $400 million for the year. All in, we've made great progress strengthening the company, and you can see the evidence in the first quarter earnings and cash flow. With that, Willie and I are happy to take your questions. Operator, we're now ready for the first question.

伊士曼擁有業界領先的現金流，我們已採取積極行動，透過強勁的資產負債表和大量的流動資金來源，在當前環境下維持這一現金流。此外，我們在專業業務領域擁有良好的業績記錄，能夠透過創新驅動的成長模式推動終端市場的成長。話雖如此，在這個極其不確定的時期，我們專注於我們能夠控制的行動，並且完全有能力度過這種環境。我們正在從多樣化的終端市場實現穩定，並利用我們強大的客戶參與度。我們正在採取重大的成本行動，根據當前的需求環境調整我們的運營，大幅減少可自由支配的開支，並推遲一些資產的周轉。我們預計今年的自由現金流將強勁，營運資金預計將超過 2.5 億美元，超出先前的預期。我們將資本支出預期下修約 1 億美元，至 3.25 億美元至 3.75 億美元之間。最後，我們將繼續保持嚴謹的資本配置方式，重點關注強勁的股息和重大的債務償還計劃，我們預計今年的債務償還將大大超過 4 億美元。總而言之，我們在加強公司實力方面取得了巨大進展，您可以從第一季的收益和現金流中看到證據。威利和我很樂意回答你們的問題。接線員，我們現在可以回答第一個問題了。

(Operator Instructions)

（操作員指示）

Our first question will come from Vincent Andrews of Morgan Stanley.

我們的第一個問題來自摩根士丹利的文森特安德魯斯。

I didn't see your prepared remarks, but I'm happy. I'm happy you're doing them, and I look forward to reading them in the future. I did just skim them. But with that said, Mark, I'm wondering if you can just talk a little bit. I saw in the slides, you talked about April being down 15% versus March, and it sounds like March was worse than the other 2 months of the first quarter. But maybe you could just contextualize April? How much it's down versus the overall first quarter?

我沒有看到你準備好的發言稿，但我很高興。我很高興你正在做這些事情，並且期待將來能夠閱讀它們。我只是瀏覽了一下。不過話雖如此，馬克，我想知道你是否可以聊一聊。我在幻燈片中看到，您說 4 月與 3 月相比下降了 15%，聽起來 3 月的情況比第一季的其他兩個月更糟。但也許你可以將四月具體化？與第一季整體相比下降了多少？

Sure. So as we said in the slide, we really try to provide some perspective across the markets and sort of grouped them into 3 categories, Vincent. And it's good to hear you and you sound healthy as well. About 40% of our markets are quite stable and doing quite well, being relatively flat sequentially. And in those markets, you've got things like personal care, consumables, which is a range of things from packaging adhesives to packaging polyesters, et cetera. The medical pharma parts good, ag, nutrition. And all those markets are going to hold up relatively well in this. Then you've got somewhat challenged markets that are like building construction, consumer durables, electronics, industrial chemicals, where they're actually still also sequentially declining, as you can see in April, but we expect those to continue to sort of do relatively okay to the more impacted ones in transportation, textiles and energy. So there really are 3 things. That diversity of end markets, especially that 40% that gives us a stability in the world is incredibly helpful in this time. And we would expect that to sort of continue through the quarter. The -- what we call mixed impact are a little bit harder to call. I think there's some of that, that's holding up well, like consumer durables, a lot of our innovation and Tritan and things like that are allowing us to create our own growth. So we're seeing stability from not just markets, but innovation in some of those applications. Architectural coatings is holding up really well as well as our architectural interlayers. But it's reasonable to expect some of that's going to moderate as existing projects might be completed, et cetera. But through Q2, I think it's going to be okay. The question is what happens longer-term to some new starts in housing. And then the real challenge, of course, is in transportation, which I think is extremely well documented, where you've got auto plants, tire plants shut down all over the world, fortunately, China coming back. But we track every tire plant, every auto OEM, every window plant down to the model and are mapping all that out. As you know, they're all shut down now. So the question is when are they going to start back up? And we see that recovery and that sequential improvement in China already, but obviously, U.S. and Europe is still a question mark. So we've been conservative. We've assumed that the auto OEM market's going to be down, from an OEM production point of view, be down 50% for the quarter, which is on the sort of more pessimistic end of the range of the consultants out there. and that's really to inform our production and inventory strategy as opposed to trying to say we can predict earnings at this point given the uncertainty. But -- so we've been very aggressive in how we manage our plans for that. And we'll see how it recovers. So overall, I'd say April's a good indicator of the quarter. I think that we could expect it to be a bit more challenging in May as supply chain line catches up to us with a lot of these plants being shut down. And then we presume that, along with the consultants, that things will start back up to some degree. And so you'll see some of that benefit in June. Does that answer your question?

當然。因此，正如我們在幻燈片中所說的那樣，我們確實嘗試提供一些跨市場的觀點，並將它們分為 3 類，文森特。很高興聽到您的消息，而且您聽起來也很健康。我們約有 40% 的市場相當穩定且表現良好，環比持平。在這些市場中，有個人護理產品、消耗品等，包括從包裝黏合劑到包裝聚酯等一系列產品。醫藥部分良好，農業，營養。所有這些市場都將保持相對良好的狀態。然後，您會看到一些面臨挑戰的市場，例如建築施工、耐用消費品、電子產品、工業化學品，這些市場實際上仍在連續下滑，正如您在四月份看到的那樣，但我們預計，與受影響較大的運輸、紡織和能源等市場相比，這些市場的表現將繼續相對較好。所以其實有三件事。終端市場的多樣性，特別是那 40% 為我們帶來世界穩定的市場，在當前非常有幫助。我們預計這種情況將持續整個季度。我們所說的混合影響有點難稱呼。我認為其中有些產品表現良好，例如耐用消費品，我們的許多創新和Tritan等產品讓我們能夠創造自己的成長。因此，我們不僅看到了市場的穩定，也看到了一些應用的創新。建築塗料和建築夾層的性能都非常好。但隨著現有項目的完成等，我們有理由預期部分壓力將會緩和。但到了第二季度，我認為一切都會好起來。問題在於，長期來看，一些新開工的住房會發生什麼事。當然，真正的挑戰是在交通運輸領域，我認為這方面有非常充分的記錄，世界各地的汽車廠、輪胎廠都關閉了，幸運的是，中國正在復蘇。但是我們追蹤每一個輪胎廠、每一個汽車原始設備製造商、每一個窗戶廠，直到模型，並將所有這些都繪製出來。如您所知，它們現在都已關閉。那麼問題是他們什麼時候會重新開始？我們已經看到中國經濟的復甦和持續改善，但顯然美國和歐洲的情況仍是一個問號。所以我們一直都比較保守。從 OEM 生產的角度來看，我們假設汽車 OEM 市場將會下滑，本季將下降 50%，這是顧問們較悲觀的預測。這實際上是為了指導我們的生產和庫存策略，而不是試圖說我們可以在目前不確定的情況下預測收益。但是——我們一直非常積極地管理我們的計劃。我們將觀察它如何恢復。所以總體而言，我認為四月是本季的一個好指標。我認為，隨著許多工廠關閉，供應鏈將面臨更大的挑戰。然後，我們和顧問們一起推測，事情會在某種程度上重新開始好轉。因此，您將在六月看到一些好處。這回答了你的問題嗎？

Yes. So just to recap, it sounds like you're saying being down 15% in April, sequentially, it's probably about right. It'll be a little worse in May, and may be a little bit better in June. But if we think sequentially between 2Q and 1Q, we could think about your volumes being down. I'm just going to say 15% to 20%. Is that fair?

是的。所以，總結一下，聽起來您說的是 4 月環比下降 15%，這可能差不多是正確的。五月會稍微差一點，六月可能會稍微好一點。但如果我們按順序思考第二季度和第一季度，我們可能會認為您的交易量會下降。我只想說 15% 到 20%。這樣公平嗎？

I mean, I think that's a range to start with. I just really want to emphasize for everyone, no one knows what's going to happen here, right? I mean, there's just a phenomenal amount of uncertainty when we don't even know how the U.S. and Europe are going to restart yet. And there's a lot of questions that we have to answer that go with that. So we can get people back to work in a lot of companies, but it's really a question of what consumers are going to do, are they going to go back to restaurants? Back to their more -- normal life activities? Travel? Shop in retail stores? Buy cars? We don't know how the consumer's going to behave coming out of this, which will then dictate when auto plant start up, when tire plants start up. Housing is going to play out when it comes to -- they've got great DIY and projects that they're finishing in construction, but how many new starts are going to happen? So there's a lot of crystal ball gazing. I think April is informative, and it's 1/3 of the quarter. But what we're going to do is be conservative, really focus on cash generation, manage what we can control. And we will give you updates through the quarter as we get more insight.

我的意思是，我認為這是一個開始的範圍。我只是想向大家強調一下，沒有人知道這裡會發生什麼，對吧？我的意思是，當我們甚至不知道美國和歐洲將如何重啟時，就存在著巨大的不確定性。還有很多與此相關的問題需要我們去解答。因此，我們可以讓許多公司的員工重返工作崗位，但真正的問題是消費者會怎麼做，他們會回到餐廳嗎？恢復更正常的生活活動？旅行？在零售店購物？買車？我們不知道消費者會如何應對這種情況，這將決定汽車廠何時開工，輪胎廠何時開工。房屋市場即將迎來復甦——他們有很多出色的 DIY 和即將完工的施工項目，但又有多少新項目即將開工？因此，有很多人對水晶球進行預測。我認為四月份是資訊量很大的月份，佔了整個季度的三分之一。但我們要做的是保守，真正專注於現金創造，管理我們能夠控制的事情。隨著我們獲得更多了解，我們將在本季度向您提供更新資訊。

Our next question comes from Jeff Zekauskas, JPMorgan.

下一個問題來自摩根大通的 Jeff Zekauskas。

How did you make so much money in Chemical Intermediates on a sequential basis? I think you were up over $8 million, maybe it was $20 and $20-ish million in the fourth quarter. And can you talk about the dynamics? What are you doing right there?

您是如何在化學中間體領域連續賺到這麼多錢的？我認為你的利潤超過了 800 萬美元，第四季的利潤可能達到了 2000 萬美元到 2000 萬美元左右。能談談其中的動態嗎？你在這裡幹什麼？

Well, we have a great commercial team there that does things right every day and how it optimizes every market to place products at the best price possible and optimize our big engines that support our specialty businesses. You've got to remember, Chemical Intermediates role is clearing the excess capacity that isn't going into the specialties. And my hats off to that team in doing that. It's a dynamic time. We did have a very strong sequential improvement from Q4 to Q1. And it was really driven by 4 factors. The first was strong volume growth. So we saw strong improvement in ag, alkylamines, that market had been pretty depressed. There's a lot of destocking going on in the fourth quarter last year. The ag market came back to life. Those are high margin products for this segment. And so that was quite helpful. But we also saw strong demand in a lot of other markets, acetyls, plasticizers and a few others. So volume was the biggest driver of all of the levers that improved it. the second was a lack of shutdowns. So we had a huge shutdown going on in the third and fourth quarter last year. A lot of that expense was in the fourth quarter. So we didn't have that. So that was a $20 million benefit in itself from Q4 to Q1. The third was an improvement in spreads. So we got our spreads back to being about where they were in Q1 '19. So that was a bit of an improvement from Q4. Some of it was cracking spreads, got better in January and February. Unfortunately, they started to compress a bit in March, but we got the benefit of that. And the last part was the licensing. So we told you we had a sort of robust multiyear licensing program that we were driving in our fourth quarter call in January, and we got the first installment on one of those licenses in the first quarter. I'd say that was a smaller part of the story, but progress. There's more of that to come this year when we complete that license. And then we -- as we've said, have a portfolio of licenses we're looking at doing as we go into the next couple of years. So it was just great success, Jeff, on sort of every line of the income statement and the assets ran well, utilization was good.

嗯，我們有一個很棒的商業團隊，他們每天都把事情做好，他們優化每個市場，以盡可能最好的價格提供產品，並優化支援我們專業業務的大型引擎。你必須記住，化學中間體的作用是清除未進入特種領域的過剩產能。我向這個團隊表示敬意。這是一個充滿活力的時代。從第四季度到第一季度，我們確實取得了非常強勁的連續成長。這實際上是由四個因素驅動的。首先是銷售強勁成長。因此，我們看到農業、烷基胺市場強勁改善，此前該市場一直相當低迷。去年第四季出現了大量的去庫存現象。農業市場恢復活力。對於這個細分市場來說，這些都是高利潤產品。這非常有幫助。但我們也看到許多其他市場也有強勁的需求，如乙醯基、塑化劑和其他一些產品。因此，在所有改善槓桿中，音量是最大的驅動力。第二是缺乏停工。因此，去年第三季和第四季我們經歷了大規模停工。大部分支出都發生在第四季。所以我們沒有這個。因此，從第四季到第一季度，這本身就是 2000 萬美元的收益。第三是利差改善。因此，我們的利差回到了 2019 年第一季的水準。所以這比第四季有所改善。其中一些是利差破裂，在一月和二月有所好轉。不幸的是，它們在三月開始有所壓縮，但我們從中受益。最後一部分是許可。因此，我們告訴過您，我們有一個強大的多年期許可計劃，我們正在一月份的第四季度電話會議上推動該計劃，並且我們在第一季度獲得了其中一個許可證的第一筆分期付款。我想說這只是故事的一小部分，但卻是個進步。當我們今年完成許可證後，還會有更多這樣的事發生。然後，正如我們所說，我們擁有一系列許可證，我們正在考慮在未來幾年內實施這些許可證。因此，傑夫，這在損益表的每一行上都取得了巨大的成功，資產運作良好，利用率也很好。

How representative are those operating earnings for the remainder of the year? Or what are the headwinds or tailwinds that you foresee? And when you talked about April being down sequentially by 15% for the company as a whole, how much was April down year-over-year?

這些營業利潤對於今年剩餘時間的業績有多大的代表性？或您預見到哪些不利因素或有利因素？您說的是，4 月份整個公司的銷售額環比下降了 15%，那麼 4 月份的銷售額比去年同期下降了多少呢？

Well, April, on a year-over-year basis, just to take that quick question first, was similar to sequential. And regards to the CI store, unfortunately, it's not going to hold up like it did in Q1. We do see some headwinds as we go into Q2. And the key components there, one is volume, different story, ag is continuing to hold up and be really strong. But with the COVID-19 impact, you certainly see markets slowing down. Our chemical needs do go into end markets that face these headwinds that we're talking about. So they're going to see that demand pressure on multiple markets. And in the current environment with the oil situation, a lot of what we would, sort of excess capacity, we would export to Asia after serving sort of North American, European markets, is to sort of run the assets totally full. Those markets -- those export markets aren't as available. Asia still hasn't come really back to the life. Margins aren't great. So you got a bit of that -- it's low margin volume, but some of that export volume that's sort of restricted in this current environment. So volume will be the -- unfortunately, reverses outside of ag amines as being a bit of a headwind. And the second part is, you can run the models, and I know you have them, Jeff. Cracking spreads are a bit more challenged as we go into this quarter. And so we'll feel a bit of headwind from that. And then we'll -- as we slow down the big engines due to decline in specialty business, we're going to have asset utilization headwind that occurs across the 2 big complexes in Longview and Kingsport and that higher sort of cost per unit with these lower rates will impact CI as well as specialty. So it will feel a bit of that. So you're going to see a meaningful decline with all those factors as we go into sort of Q2 with this business. I would note that oil is, on a corporate basis, neutral to positive, but it will have an impact on CI.

好吧，先回答這個問題，與去年同期相比，四月的情況與上一季類似。就 CI 商店而言，不幸的是，它不會像第一季那樣保持下去。進入第二季度，我們確實看到了一些阻力。其中的關鍵因素之一是產量，不同的是，農業正在繼續保持強勁。但受新冠疫情的影響，市場肯定會放緩。我們的化學品需求確實進入了面臨我們所謂的逆風的終端市場。因此，他們將會發現多個市場都面臨需求壓力。在目前的石油情勢下，我們會把許多過剩產能在服務北美、歐洲市場後出口到亞洲，這樣就能充分利用資產。那些市場——那些出口市場並不那麼容易取得。亞洲仍未真正恢復生機。利潤率不太高。所以你了解到了一點——利潤額很低，但在當前環境下，部分出口量受到了限制。因此，不幸的是，除了農業胺之外，產量還會逆轉，形成一種逆風。第二部分是，你可以運行模型，我知道你有它們，傑夫。進入本季度，裂解價差面臨的挑戰更大一些。因此我們會感受到一些阻力。然後，隨著我們因專業業務下滑而放慢大型引擎的運轉速度，我們將面臨在朗維尤和金斯波特兩大綜合體中發生的資產利用率逆風，而這些較低費率導致的單位成本上升將影響 CI 和專業業務。所以會有一點這樣的感覺。因此，當我們進入第二季時，你將看到所有這些因素都導致業務大幅下滑。我想指出的是，從企業角度來看，石油是中性到正面的，但它會對 CI 產生影響。

Our next question comes from Frank Mitsch from Fermium Research.

我們的下一個問題來自 Fermium Research 的 Frank Mitsch。

Greg, yes, the prepared remarks were helpful. And as I was reading the prepared remarks. On the cost reduction front, you had outlined that you were going to save $20 million to $40 million this year and $100 million over a 3-year period. That's been accelerated to $150 million this year. Can you talk about the buckets that, that falls into? How are you going to get at -- how are you going to build up to that $150 million cost savings in 2020?

格雷格，是的，準備好的發言很有幫助。當我讀到準備好的發言稿時。在削減成本方面，您曾表示今年要節省 2,000 萬至 4,000 萬美元，三年內節省 1 億美元。今年這一數字已加速至 1.5 億美元。你能談談它們屬於哪一類嗎？您打算如何實現—您打算如何在 2020 年實現 1.5 億美元的成本節約？

Yes. Thanks, Frank. This is Willie, and I'll lead on that question. So as you think about -- Mark's already highlighted how we're changing our operational footprint and becoming focused on cash here in late Q1 and planning to run that way for the rest of the year. Also, that enables us, I'll call it, to reduce the level of contractors on site. It also results in changing the scope of some of the maintenance, et cetera. Additionally, another key lens to that is discretionary spend. We have stopped travel, reduced consultants and third-party services as you think through that. So those are the key factors. Also, as you think about that, we did get some of that benefit in Q1. It was a small amount. We expect that to increase in Q2 to be about 1/3 of the $150 million. And that 1/3 in Q2 will probably only partially offset the impact of our idling plants and reducing the operation rates, and then the remainder would be in the second half of the year.

是的。謝謝，弗蘭克。我是威利，我來回答這個問題。所以正如你所想的——馬克已經強調了我們如何改變我們的營運足跡，並在第一季末開始關注現金，並計劃在今年剩餘時間內繼續保持這種運作方式。此外，我可以說，這使我們能夠減少現場承包商的數量。這也會導致一些維護範圍的改變等等。此外，另一個關鍵因素是可自由支配的支出。正如您所想，我們已經停止了旅行，減少了顧問和第三方服務。這些就是關鍵因素。另外，正如您所想，我們確實在第一季獲得了一些好處。數額很小。我們預計第二季這一數字將增至 1.5 億美元的約 1/3。第二季的 1/3 可能只能部分抵銷我們閒置工廠和降低營運率的影響，其餘部分將在下半年抵銷。

As I think -- Willie, as I think about what you just said, it sounds like a lot of that is more transitory. At some point, you are going to have contractors back on site. You are going to travel, et cetera. So should we be thinking about this $150 million as kind of a 2020 reduction versus your previous plan? And then that will dissipate in '21 and beyond?

我認為──威利，當我思考你剛才說的話時，聽起來很多都是暫時的。在某個時候，你將會讓承包商回到現場。你要去旅行等等。那麼，我們是否應該將這 1.5 億美元視為相對於您之前的計劃的 2020 年削減？那麼這種現象會在 21 年及以後消失嗎？

So Frank, for the second half of the year, we are going to be focused on improving the long-term structural cost of the company. And we highlighted that on our year-end conference call with a $20 million to $40 million. We're looking to accelerate that and transform the operational as well as our functional footprint for the long term. But you're correct. In the near term, we had pivoted the actions on the temporary front and made what has normally been fixed cost variable. And some of that will come back. But you have to remember, we have strong variable margins in our specialty product lines across Advanced Materials and AFP, and they will more than obviously offset that with those spreads.

因此，弗蘭克，今年下半年，我們將專注於改善公司的長期結構性成本。我們在年終電話會議上強調了這一點，預計投資額為 2,000 萬至 4,000 萬美元。我們希望加速這一進程，並長期改變我們的營運和功能足跡。但你是對的。在短期內，我們已經調整了臨時方面的行動，並使通常固定的成本變成可變的。其中一些將會回歸。但你必須記住，我們的先進材料和 AFP 特種產品線擁有強大的可變利潤率，而且它們顯然會透過這些利差來抵消這一利潤率。

All right. Understood.

好的。明白了。

Frank, just to add, we recognize that a good portion will come back. It's important to keep in mind if demand really doesn't come back much, we can extend these savings. For longer than what we've currently assumed to ride through even a more difficult time. On the flip side, I think we're learning a lot about how we can operate and be efficient in this work-from-home environment and there's different operating modes, so we're embedding that into our thinking about how to improve our long-term cost structure. And we're certainly escalating and accelerating what we intended to do on that $100 million-plus program to get more of that as we go into the back half of this year as well as next year. So there's a lot of actions we're taking to sustain through this second phase of activity, our cost. Key thing I want to emphasize, though, is none of what we're doing is cutting our innovation programs. So we are optimizing for this environment. We're very focused on cash, but we are also focused on making sure that we have a long-term strategy in place as we come out of this to have strengths, to create our own growth when the markets actually come back to life. Through innovation, continue to have that kind of engagement with customers. We're still actually getting a lot of engagement with customers today. On innovation, even in this sort of virtual environment, we've had a number of wins. We've even have a recycled Tritan content product that we launched. We've already got 3 wins on that. Nalgene, Camelbak and a couple of other big brands have adopted. We're getting wins on our recycled cellulosics as we speak, 2 of the largest ophthalmic manufacturers have seen the power of a half bio content, half recycled content product for their offerings, continue to get wins in Tetrashield for can packaging and food where we've got just great chemical resistance and toughness and non-intent BPA. So good news is innovation is still live. We're still focusing on keeping those programs going, but we are very aggressively going after every other bit of cost.

弗蘭克，補充一下，我們認識到很大一部分人會回來。重要的是要記住，如果需求確實沒有大幅回升，我們可以延長這些儲蓄。比我們目前預想的要花更長的時間才能度過更艱難的時期。另一方面，我認為我們正在學習很多關於如何在這種在家工作的環境中運作和提高效率的知識，並且存在不同的營運模式，因此我們將其融入如何改善長期成本結構的思考中。我們肯定會加大並加快推進這項耗資超過 1 億美元的計劃，以便在今年下半年和明年獲得更多資金。因此，我們採取了許多措施來維持第二階段的活動和成本。不過，我想強調的關鍵一點是，我們所做的一切都不是削減我們的創新計畫。所以我們正在針對這個環境進行最佳化。我們非常注重現金，但我們也注重確保我們有一個長期策略，以便我們在走出困境時擁有優勢，並在市場真正復甦時創造自己的成長。透過創新，持續與客戶保持這種互動。事實上，我們今天仍然與客戶保持著密切的聯繫。在創新方面，即使在這種虛擬環境中，我們也取得了許多勝利。我們甚至推出了一款回收Tritan材料的產品。我們已經取得了三場勝利。Nalgene、Camelbak 和其他一些大品牌都已採用。正如我們所說，我們在再生纖維素材料方面取得了進展，兩家最大的眼科製造商已經看到了一半生物成分、一半再生成分產品在其產品中的威力，在 Tetrashield 罐頭包裝和食品領域繼續取得成功，我們擁有出色的耐化學性和韌性，並且不含 BPA。好消息是創新仍然存在。我們仍將重點關注如何繼續開展這些項目，但同時也積極降低每一點成本。

Our next question comes from Alex Yefremov of Keybank.

我們的下一個問題來自 Keybank 的 Alex Yefremov。

I would join everyone supporting the prepared remarks. Question on free cash flow. You have about $400 million in dividends. You said substantially more than $400 million in debt repayments, maybe another $50 million in buybacks. So can we say that kind of the floor for your free cash flow is about $850 million and it's really substantially more than $850 million this year?

我願意與所有人一起支持這份準備好的發言。關於自由現金流的問題。你有大約4億美元的股息。您說的債務償還金額遠超過 4 億美元，回購金額可能還有 5,000 萬美元。那麼，我們可以說，您的自由現金流的底線約為 8.5 億美元，而今年實際上大大超過了 8.5 億美元嗎？

So yes, let me answer that question. We expected it. And I want to start a little bit just back on the market comment. So obviously, demand is unpredictable. That's why we pulled earnings guidance. And we are in the position to sort of understand what happened in April, but not know what's coming for the rest of the year. But we have to make some assumptions, and we are modeling scenarios like everyone else is doing different kinds of recovery out of the second quarter. We do believe the second quarter will be the toughest quarter with the complete shutdown of these global economies and the indication as we see it now, that people will start trying to come back to life through this quarter. I want to emphasize this diversity in markets is a huge help for us to maintain stability. The 40% that's very stable and even 35% that's sort of mixed is providing a lot of stability to offset the challenges that we have in that transportation, textile side. And there's a lot of uncertainty there. We do see price stability. So we saw great price stability in the first quarter. We expect price stability to continue into the second quarter in the specialties. So we are getting some benefits there from raw materials and would expect that to continue through the year. And as I said, low oil is sort of a neutral to positive event for the overall portfolio. So that's all what we know about the markets. In that great uncertainty, what we have to do is focus on what we can control. And so what we can control more so is a lot of our cash generation outside of cash earnings. And so we're doing everything we can to stay close to our customers, make sure we don't lose share, keep our innovation going so when the markets recover, we will cover with it. We've acted really quickly to idle all of our plants or campaign them or reduce utilization. We moved very quickly in March when we saw this was going to get worse outside of China with the COVID spread. So we really sort of ramped back raw material purchase and everything else in the plant so that we could take advantage of what demand does exist to pull inventory down, and we're doing a great job of that. So working capital $250 million, we think will been released. And with all the cost actions really described, $150 million on the cost side and about 40% of that will flow into the second quarter number on that $150 million and reducing CapEx $100 million. So lots of levers that we're pulling. And so when we look at that and run our scenarios, obviously, the dividend is our priority. We're going to pay that. It's a great strong dividend. It's been increasing for over a decade. And on the delevering, which is our focus, we do think we can do substantially more. And what that means to us, even in a very slow economic recovery, we believe we can do greater than $1 billion of free cash flow. And obviously, if the recovery is better than that, there's upside. So when we say substantial, it's substantial that we're going to make a lot of progress in our delevering. But people should not be using that to try and reverse engineer earnings. It's what we're trying to do on cash flow so things -- and the levers that we can pull, we can pull even harder in inventory if we need to, we can pull harder on costs if we need to. But it's a cash-centric strategy that we're operating right now.

是的，讓我來回答這個問題。我們預料到了這一點。我想先簡單回顧一下市場評論。顯然，需求是不可預測的。這就是我們撤下獲利預測的原因。我們大概可以了解四月發生了什麼，但不知道今年剩餘時間會發生什麼。但我們必須做出一些假設，我們正在模擬各種情景，就像其他人在第二季度進行不同類型的復甦一樣。我們確實相信，第二季度將是最艱難的一個季度，因為全球經濟將完全停擺，正如我們現在看到的跡象，人們將開始嘗試透過這個季度恢復生機。我想強調的是，市場的多元性對我們維持穩定有巨大的幫助。40% 非常穩定，甚至 35% 的混合比例提供了很大的穩定性，以抵消我們在運輸、紡織方面面臨的挑戰。這裡存在著許多不確定性。我們確實看到價格穩定。因此，我們看到第一季的價格非常穩定。我們預計特種產品的價格穩定將持續到第二季​​。因此，我們從原材料中獲得了一些收益，並預計這種收益將持續到今年。正如我所說，低油價對於整體投資組合來說是一種中性到積極的事件。這就是我們對市場的全部了解。在這種巨大的不確定性中，我們要做的就是專注於我們能夠控制的事情。因此，我們能夠更好地控制的是現金收入以外的大量現金產生。因此，我們正在竭盡全力與客戶保持密切聯繫，確保我們不會失去市場份額，並不斷創新，以便在市場復甦時，我們能夠繼續保持競爭力。我們已迅速採取行動，暫停所有工廠的生產、進行活動或降低利用率。3 月份，當我們預見到隨著 COVID 疫情蔓延，中國境外的疫情將進一步惡化時，我們迅速採取了行動。因此，我們確實減少了原材料採購和工廠的其他一切，以便我們可以利用現有需求來降低庫存，而且我們在這方面做得很好。因此，我們認為將會釋放 2.5 億美元的營運資金。根據所描述的所有成本行動，成本方面為 1.5 億美元，其中約 40% 將流入第二季度，這 1.5 億美元將減少 1 億美元的資本支出。我們正在採取很多措施。因此，當我們審視這一點並運行我們的方案時，顯然，股息是我們的首要任務。我們會支付這筆費用。這是一筆豐厚的紅利。十多年來，這一數字一直在增加。而對於我們關注的重點去槓桿，我們確實認為自己可以做得更多。對我們來說，這意味著即使在經濟復甦非常緩慢的情況下，我們也相信我們可以實現超過 10 億美元的自由現金流。顯然，如果復甦情況比這更好，那麼就有上行空間。因此，當我們說實質時，實質上是指我們將在去槓桿方面取得巨大進展。但人們不應該利用它來嘗試逆轉收益。這就是我們在現金流方面所嘗試做的事情——以及我們可以利用的槓桿，如果需要的話，我們可以在庫存方面更加努力，如果需要的話，我們可以在成本方面更加努力。但我們目前實施的是以現金為中心的策略。

Understood. Mark, very helpful. And just to follow-up on your margins, it's understandable that your volumes will affect your margins. But in terms of spread between price and raw materials, by the end of the year, should we expect that spread to be at a healthier level than, let's say, back half of 2019 or even first quarter? And related to that, if you could update us on your view on the methanol contract headwind this year?

明白了。馬克，非常有幫助。為了追蹤您的利潤率，您的銷量會影響您的利潤率，這是可以理解的。但就價格和原料之間的價差而言，到今年年底，我們是否應該預期該價差將處於比 2019 年上半年甚至第一季更健康的水平？與此相關，您能否向我們介紹一下您對今年甲醇合約逆風的看法？

Sure. So I'll take the first part of that question, and I'll let Willie answer the contract question. So spreads in the specialties, we do expect to improve our spreads in Advanced Materials of the raw material tailwinds that we have there. With the 2/3 of AFP as we sort of separate that out for you, we expect spreads to improve with good price stability relative to the raw material declines. And so in all those areas, I think we see that Fibers, very steady spreads for the year. All that is, I think, a place where we can get some additional cash and earnings benefit. The 1/3 of AFP, I'd say, the tires adhesives, it's going to be more stable spreads, but at the challenged levels we had in the back half of last year. We don't see it getting a lot worse this year relative to the second half of '19, but we don't expect it to get a lot better given the sort of competitive dynamics in that spot. And in Chemical Intermediates, as I said, we've got some challenges there on spreads. Something important to note about this oil topic is our crackers and the spreads there are a little bit different than other companies'. So it's not nearly as challenged at this point as it was in the past. So '10 to '16, we had a huge tailwind when oil went up and we had stranded gas in the U.S. that let ethane and propylene also be stranded and really cheap. You got to remember, our crackers are propylene centric because that's what we make specialties from. That's why they exist. So we're much more propane-based in our crackers. And we -- on top of that, we made the RGP investment to even further reduce the amount of ethylene we produce, replacing some of the NGL feeds with RGP. So that changed the dynamic. So we're now 70% to 75% propane, 20% to 25% ethane, the remainder 5% to 10% is RGP. And propane isn't stranded anymore, right? So it stranded up through about '16, but they added so much export capacity to export propane. That's now reconnected to the oil market. So propane propylene spreads are a lot more connected than ethylene to ethane. And RGP is very tightly correlated to PGP. So the volatility still is going to be a challenger, but it's not nearly the challenge that we would have faced back in '15 and '16, as an example with its low oil now. So we have some spread. It's more about competitive intensity than it is about cracking spread that's going to sort of pressure some of these margins in this competitive environment. But spread will be a challenge in CI. But net, when you put it all together, we're in really good shape on spread to sort of be a bit better this year than last year.

當然。因此，我將回答該問題的第一部分，然後讓威利回答合約問題。因此，我們確實希望透過專業領域的利差來改善先進材料的原料順風利差。當我們為您分離出 2/3 的 AFP 時，我們預計價差將會改善，並且相對於原材料的下跌，價格會保持良好的穩定性。因此，我認為在所有這些領域，我們都會看到纖維在今年的傳播非常穩定。我認為，所有這些都是我們可以獲得額外現金和收益的地方。我想說的是，AFP 的 1/3，即輪胎黏合劑，將會有更穩定的擴散，但處於去年下半年面臨的挑戰水平。我們認為今年的情況相對於 2019 年下半年不會變得更糟，但考慮到當時的競爭動態，我們也不認為情況會變得更好。正如我所說，在化學中間體方面，我們在價差方面面臨一些挑戰。關於這個石油主題，需要注意的是，我們的餅乾和塗抹醬與其他公司的略有不同。因此，目前面臨的挑戰並不像過去那麼大。因此，從 2010 年到 2016 年，當油價上漲時，我們迎來了巨大的順風，而美國的天然氣供應也陷入困境，導致乙烷和丙烯的價格非常便宜。您必須記住，我們的餅乾是以丙烯為中心的，因為這是我們製造特色餅乾的材料。這就是它們存在的原因。因此我們的裂解裝置更多地使用丙烷。除此之外，我們還進行了 RGP 投資，以進一步減少我們生產的乙烯數量，並以 RGP 取代部分 NGL 原料。所以這改變了動態。因此，我們現在的丙烷佔 70% 到 75%，乙烷佔 20% 到 25%，剩餘的 5% 到 10% 是 RGP。丙烷不再被困住了，對吧？因此，它在 16 年左右陷入停滯，但他們增加了大量的出口能力來出口丙烷。現在它已重新與石油市場相連。因此，丙烷和丙烯之間的價差比乙烯和乙烷之間的價差要大得多。RGP 與 PGP 密切相關。因此，波動性仍將是一個挑戰，但它遠不及我們在 2015 年和 2016 年面臨的挑戰，例如現在的低油價。所以我們有一些傳播。在這種競爭環境下，競爭強度比裂解價差更重要，後者會對利潤率造成一定壓力。但在 CI 中傳播將是一個挑戰。但整體而言，當你把所有因素綜合起來時，我們的利差狀況確實很好，今年的利差會比去年好一些。

Okay. Mark, on the methanol front, just to follow-up quickly, is we made the transition, as we highlighted in January. We had marked that contract to market. So I would actually say it's actually a slight tailwind on earnings and a modest headwind on cash overall. But we're exposed to coal-based methanol as well as natural gas and market. So well positioned on the methanol front.

好的。馬克，關於甲醇方面，我來快速跟進一下，我們已經完成了轉型，正如我們在一月份強調的那樣。我們已將該合約標記為市場合約。因此我實際上會說，這實際上對收益來說是輕微的順風，而對現金總體來說是適度的逆風。但我們接觸的是煤基甲醇以及天然氣市場。因此，我們在甲醇領域處於有利地位。

We will take our next question from David Begleiter of Deutsche Bank.

我們將回答德意志銀行的 David Begleiter 提出的下一個問題。

Mark, just looking at Q2, thinking about -- how should we think about decremental margins in the specialty businesses given the asset utilization headwinds you've called out here?

馬克，只看第二季度，想想——考慮到您在這裡提到的資產利用率阻力，我們應該如何看待專業業務利潤率的下降？

I'm going to let Willie take that one.

我要讓威利拿走這個。

Yes. Thanks, David. On the decremental margin front, we've highlighted the fact that we've idled plants, we're lowering capacity utilization. And that -- a lot of that is focused on our transportation, textiles and energy end markets, and that is predominantly in Advanced Materials and Additives & Functional Products. And as you think about AM, we've previously talked about how the margins have shown through as the specialty and premium products have grown. And that's because of the fixed cost leverage as they've been able to grow. So you can expect a little bit of the reverse here in Q2 as we focus on maximizing cash generation and reducing cost in this environment. However, you should expect on the recovery that as the demand recovers for these businesses that -- then it would bounce back. A little bit of contrast between AM and AFP is the fact that Advanced Materials has idled more plants, whereas Additives & Functional Products has slowed those down. Additionally, given the specialty nature and the linkage across the streams, there are more fixed cost and capital involved in those specialty product lines that result in the decremental margins and fixed costs being worse. When those variable margins come back, the reverse is true, and we would expect to see that in the second half of the year.

是的。謝謝，大衛。在利潤率下降方面，我們強調了我們已經閒置工廠、降低產能利用率的事實。其中很大一部分集中在我們的運輸、紡織品和能源終端市場，主要集中在先進材料和添加劑及功能產品領域。當您考慮 AM 時，我們之前曾討論過隨著專業和優質產品的增長，利潤率是如何體現出來的。這是因為他們能夠成長，並利用了固定成本槓桿。因此，您可以預期第二季會出現一些逆轉，因為我們專注於在這種環境下最大化現金產生並降低成本。然而，你應該預期，隨著這些企業的需求恢復，它就會反彈。AM 和 AFP 之間的一點對比是，先進材料部門閒置了更多工廠，而添加劑和功能產品部門則放慢了這些工廠的生產速度。此外，由於專業性以及跨流程的聯繫，這些專業產品線涉及更多的固定成本和資本，導致利潤率下降和固定成本增加。當這些可變利潤率回升時，情況正好相反，我們預計今年下半年就會看到這種情況。

Got it. And Mark, just on this -- I'm sorry.

知道了。馬克，就這一點——我很抱歉。

Go ahead.

前進。

Yes, just on the strategic alternatives process, that 1/3 of AFP that you highlighted back in October, any update or progress you made on that initiative?

是的，就策略替代方案進程而言，即您在 10 月強調的 AFP 的 1/3，您對該倡議有何更新或進展？

Yes, David, let me go first, and Mark can follow-on. We had several interested parties pre the COVID environment, but it's difficult to get a transaction done now. And obviously, we need to focus on the earnings impact of this event. We are also focused on restructuring these businesses right now and continuing to evaluate our manufacturing footprint in these businesses, and we'll have decisions soon on those. Additionally, we're taking cost out such that on the other side of the COVID environment, we can focus on other strategic actions that we can take with these businesses.

是的，大衛，讓我先說，馬克可以接著說。在新冠疫情爆發之前，我們有幾個感興趣的方，但現在很難完成交易。顯然，我們需要關注此事件對獲利的影響。我們目前也專注於重組這些業務，並繼續評估我們在這些業務中的製造足跡，我們很快就會對此做出決定。此外，我們正在降低成本，以便在 COVID 環境的另一邊，我們可以專注於對這些業務的其他策略行動。

So I think that's not exactly a surprise that we'd be sort of challenged from a process point of view. The thing I want to add beyond just the restructuring activities, and we intend to be aggressive there and hopefully make some decisions here soon about our asset footprint, the innovation is actually very attractive to potential interested parties and actually going quite well. So our new Crystex that is far superior to the competitors' in the marketplace, is getting a lot of adoption more than we thought. That's one plant that's actually running well right now in this tire environment. In fact, we've had to increase rates there because of the demand for it. So that's helpful and encouraging. Obviously, the overall market is extremely difficult in tires. But it's good to see that the innovation still is attracting attention and adoption, and it's at a better price. Same is true in tire resins. We've been launching and trying to validate a new set of differentiated tire resins. And we've virtually, once again, had progress innovation-wise in verifying and validating that with a couple of big MNCs seeing the value and wanting to move forward to those programs. And even over in adhesives, our new UltraPure, sort odor-free, VOC-free resin is getting a lot of adoption right now even in the context. So the innovation's important. It's all part of restructuring the business and improving it while we have it as well as making it more valuable to other people. So we're just going to have to get through this short-term environment.

因此我認為從流程的角度來看我們面臨某種挑戰並不奇怪。我想補充的是，除了重組活動之外，我們打算積極推進，並希望很快就我們的資產足跡做出一些決定，創新實際上對潛在的相關方非常有吸引力，而且進展相當順利。因此，我們的新產品 Crystex 遠遠優於市場上的競爭對手，其採用率比我們想像的要高得多。這是目前在輪胎環境下運作良好的工廠。事實上，由於需求量大，我們不得不提高那裡的費率。這很有幫助，也很令人鼓舞。顯然，輪胎整體市場極為艱難。但很高興看到這項創新仍然受到關注和採用，而且價格更優惠。輪胎樹脂也是如此。我們一直在推出並嘗試驗證一套新的差異化輪胎樹脂。事實上，我們在創新方面又一次取得了進展，一些大型跨國公司看到了這項專案的價值，並希望推進這些專案。甚至在黏合劑領域，我們的新型 UltraPure、無味、無 VOC 樹脂現在也得到了廣泛的應用。所以創新很重要。這一切都是為了重組業務，並在現有業務的基礎上進行改進，使其對其他人更有價值。所以我們必須度過這個短期環境。

Our next question will come from PJ Juvekar of Citi.

我們的下一個問題來自花旗的 PJ Juvekar。

Mark, it's Eric Petrie on for PJ. How much did your premium products and Advanced Materials grow in first quarter? Or were there destocking actions by auto OEMs for interlayers as well as head up displays?

馬克，我是 Eric Petrie，代替 PJ 上場。你們的優質產品和先進材料在第一季成長了多少？或者汽車原始設備製造商是否對中間膜和平視顯示器採取了去庫存行動？

Yes. So it's a bit of a split story between auto and the rest of the business. So the 2/3 of the revenue, remember auto is only 1/3 of the revenue of Advanced Materials, did really well. So we had strong engagement, volume growth in a lot of different applications, especially in that more stable category we gave you in the slide. So packaging that's inside of consumables did really well. We had decent, very strong, stable medical. It's important to think about in advanced materials that well, the 1/3 automotive is a big part of our earnings. The second largest market is consumer durables that actually held up well because of Tritan continued to create its own growth. So that's actually been reasonably good. The third largest market for this business is medical, very stable, very profitable and doing well. The fourth market is these consumables, I mentioned, stable. Fifth is architectural, even there, holding up relatively well. So all of that's gone fairly well and why you saw earnings be up and stable. Automotive, which is a very high margin part of our portfolio in the entire company, whether it's AFP or AM, obviously, we saw good demand. Actually, we saw good demand in January and February. And then, obviously, demand came off with the escalation of COVID in March. That is that $15 million to $20 million of EBIT headwind we called out was really sort of transportation related, and it was really March related. So we felt that impact on the demand there. So overall, it's holding up pretty well, except for transportation. And prices held up well. Raws came in to be quite a benefit for the quarter. And the asset utilization was, in general, pretty good in the first quarter. We haven't really seen the impact of asset utilization in this business until we get to the second quarter.

是的。因此，汽車行業和其他行業之間存在分歧。因此，2/3 的收入（記住汽車僅佔先進材料收入的 1/3）表現確實很好。因此，我們在許多不同的應用中都獲得了強勁的參與度和銷售成長，特別是在我們在幻燈片中提供的更穩定的類別中。因此，消耗品內部的包裝效果非常好。我們的醫療狀況良好、非常強大、穩定。重要的是要考慮先進材料，其中三分之一的汽車占我們收入的很大一部分。第二大市場是耐用消費品，由於 Tritan 持續創造成長，耐用消費品市場實際上表現良好。所以這其實相當不錯。該業務的第三大市場是醫療市場，非常穩定、利潤豐厚且表現良好。第四個市場就是我提到的這些消耗品，穩定。第五是建築，即使在那裡，也保持得相對較好。所以這一切都進展順利，這也是為什麼您看到收益上升且穩定的原因。汽車是我們整個公司產品組合中利潤率非常高的部分，無論是 AFP 還是 AM，顯然我們都看到了良好的需求。實際上，我們在一月和二月看到了良好的需求。然後，顯然，隨著 3 月 COVID 疫情的升級，需求下降了。也就是說，我們所說的 1500 萬至 2000 萬美元的 EBIT 逆風實際上與運輸有關，並且確實與 3 月有關。因此，我們感受到了那裡的需求所受到的影響。因此，總體而言，除交通運輸外，其他方面都表現良好。並且價格保持良好。Raws 為本季帶來了相當大的收益。整體而言，第一季的資產利用率相當不錯。直到第二季度，我們才真正看到資產利用率對該業務的影響。

Helpful. And then secondly, some paints and coatings companies are guiding volumes down for second quarter by 1/3. Are you expecting similar declines?

很有幫助。其次，一些油漆和塗料公司預計第二季銷售量將下降 1/3。您預計也會出現類似的下降嗎？

So in automotive coatings, we would expect to see a pretty dramatic decline, as you saw. We're assuming OEM production is going to be down 50% sequentially. So automotive coatings is going to track that and be quite a large headwind. On the other side, architectural coatings seem to be holding up a lot better based on what we're seeing and what I heard the coating customers that we have, say, earlier this week. So I think that number you're quoting is a bit of a blended number. We have 2 markets that have very different sort of tracks between architecture and OEM -- auto OEM.

因此，正如您所看到的，我們預計汽車塗料將出現相當大幅的下降。我們預計 OEM 產量將季減 50%。因此，汽車塗料將會受到這種影響，並成為一股相當大的阻力。另一方面，根據我們所看到的情況以及本週早些時候從塗料客戶那裡聽到的情況，建築塗料的表現似乎要好得多。所以我認為你引用的數字有點混合。我們有兩個市場，在建築和 OEM（汽車 OEM）之間有著非常不同的軌跡。

Our next question comes from Duffy Fisher from Barclays.

我們的下一個問題來自巴克萊銀行的達菲費雪。

Within your AFP segment and AM segments, can you walk through the products where your competitors would base their chemicals off of oil? And so even if they have kind of lesser quality products, maybe with this lower oil environment they will push harder on price?

在您的 AFP 細分市場和 AM 細分市場中，您能否介紹一下您的競爭對手以石油為基礎的化學品產品？因此，即使他們的產品品質較差，在低油價環境下，他們或許會加大價格壓力？

Sure. So Advanced Materials, oil is sort of -- ultimately drives a lot of the raw material costs for pretty much the entire segment outside of the cellulosic products, Duffy. And so in that area, you have that potential. So far, we've seen great price stability through all last year, right? Paraxylene was a tailwind all last year. Prices have been holding up relatively well. Starting to give some back. To be clear, as we've said in many calls in the past, you don't hold on to all of it, right? You've got to treat your customers with respect and share some of the raw material value, and we're going to do that. But still, net, I think it's going to hold up quite well from what we can see. And things like Tritan, where we're the only competitor in the world, we've got a lot of control over pricing. On the auto-related markets. Interlayers is annual contracts. So those prices got established last year. So they don't have a lot of movement to them when it comes to raw materials within the year. And then in performance films, it's also very price stable. They -- it's a consumer product, and our prices are pretty stable there. The value that we present in performance films is not remotely connected to raw materials. So overall, I'd say that segment, it's going to have some prices come down a bit this year with raws, but hold up really well. In AFP, if you go to the 2/3 of AFP that we called out. So coatings, specialty fluids, Care Chemicals, crop, et cetera, that's actually going to have pretty good price stability, has had good price ability through last year and expect it to continue to have really good price stability this year. There are some cost pass-through contracts in Care Chemicals and coatings that we'll pass on some of those raws, but the spreads will be stable, which is in the end, all we want from a long-term point of view. But you'll see some of that impact. That's about 2% of the 6% for the overall segment as those cost pass-through contracts for the first quarter, as an example. We will see some increased price competitive behavior in adhesives and tires in the 1/3, but that's also sort of stabilized. They got very competitive by the back end of last year. And I don't think spreads are going to compress a lot more from that to this year. So overall, I'd say we're in pretty good shape Duffy, to either neutral or improving, even in this environment. And that portfolio, Fibers, is totally different, as you know, where those prices at 1% down will be that for the year. And in CI, I think I've already addressed.

當然。因此，先進材料、石油最終推動了除纖維素產品之外的幾乎整個領域的原材料成本，達菲。所以在那個領域，你有那個潛力。到目前為止，我們看到去年全年價格都非常穩定，對嗎？去年全年對二甲苯一直處於順風狀態。價格一直保持相對良好。開始回饋一些。要明確的是，正如我們在過去的許多電話會議中所說的那樣，你不會保留所有的東西，對嗎？你必須尊重你的客戶並分享一些原材料價值，我們會這樣做。但從目前的情況來看，我認為它仍然會保持良好的狀態。而對於像 Tritan 這樣的產品，我們是世界上唯一的競爭對手，因此我們對定價有很大的控制權。在汽車相關市場。Interlayers 簽訂的是年度合約。這些價格是去年確定的。因此，就原料而言，他們一年內不會有太大的變動。而在表演電影中，它的價格也非常穩定。他們——這是一種消費品，我們的價格在那裡相當穩定。我們在性能薄膜中呈現的價值與原料沒有任何關係。所以總的來說，我認為今年該部分原料的價格會有所下降，但會保持良好的狀態。在法新社，如果你去我們所說的法新社的 2/3 部分。因此，塗料、特殊液體、護理化學品、農作物等實際上將具有相當好的價格穩定性，去年一直具有良好的價格能力，預計今年將繼續保持良好的價格穩定性。在護理化學品和塗料領域，我們簽訂了一些成本轉嫁合同，將部分原材料轉嫁出去，但價差將保持穩定，從長遠來看，這才是我們最終想要的。但你會看到一些影響。舉例來說，由於第一季的成本轉嫁合同，這大約佔整個部門 6% 的 2%。我們將看到 1/3 的黏合劑和輪胎價格競爭行為增加，但這也趨於穩定。到去年年底，他們的競爭力已經非常強了。我不認為從那時到今年利差會進一步縮小。所以總的來說，我想說我們的狀態非常好，達菲，即使在這種環境下，我們的狀態要么是中性，要么是不斷改善。而那個 Fibers 投資組合則完全不同，如你所知，價格下跌 1% 就代表全年價格下跌。在 CI 中，我想我已經解決了。

Sure. Okay. Great. And then I think it was in your prepared remarks, you made a comment where you thought transportation demand -- I don't know if you said it was going to be stronger or less bad than tire in aerospace. So is that a call on kind of those markets? Or is there some inventory in those different segments that may skew that how it hits your business? But can you just talk through why you think transportation will be stronger than tires and aerospace?

當然。好的。偉大的。然後我想這是在您準備好的發言中，您發表了一條評論，您認為運輸需求——我不知道您是否說過它會比航空航天輪胎更強勁或更溫和。那麼這是對這些市場的一種呼籲嗎？或者這些不同細分市場中的一些庫存可能會對您的業務產生影響？但是您能否談談為什麼您認為交通運輸將比輪胎和航空航天更強大？

So when we say transportation, Duffy, it's all 3. Right. So when we talk about transportation, and in any reference, it's always autos, tires and aviation. So all 3 are in that comment about being a very challenged market. What I'd say is, tires and aviation is more challenged than auto OEM. So you can go get the external data, but obviously, no one is flying right now. And I think the rate of people flying is going to come back slower than the rate of people buying cars. And because initially (inaudible) cars, by the way, that could be an upside here is who wants to get in mass transit right now. We could see more cars sold on the back end of this thing as people shift their behavior towards being in their own car versus mass transit. We're not baking that into our forecasting, but it might be an upside. But tires is -- demand's very much off. It's not just the OEM side, but the refinish side -- the replacement tire side is obviously off because no one's driving. And so net, that overall segment is what you see 40% down is all of that rolled together.

所以當我們說交通時，達菲，這都是 3 個。對。因此，當我們談論交通運輸時，無論何種提及，總是指汽車、輪胎和航空。因此，這三個人都認為這是一個充滿挑戰的市場。我想說的是，輪胎和航空比汽車原始設備製造商面臨的挑戰更大。所以你可以取得外部數據，但顯然現在沒有人在飛行。我認為搭乘飛機的人數的回升速度將比購買汽車的人數的回升速度慢。順便說一下，因為最初（聽不清楚）汽車，這可能是一個好處，那就是現在誰想搭乘大眾運輸工具。隨著人們的行為方式從乘坐公共交通轉向乘坐自己的汽車，我們可以看到汽車銷售的增加。我們並沒有將其納入我們的預測中，但這可能是一個好處。但輪胎的需求卻大大下降。這不僅是 OEM 方面的問題，而且是修補方面的問題——更換的輪胎方面顯然有問題，因為沒有人駕駛。因此，淨值是，整個部分就是您所看到的 40% 的下降，是所有這些加在一起的結果。

Our next question comes from Matthew DeYoe of Bank of America.

下一個問題來自美國銀行的 Matthew DeYoe。

Glad to hear you're doing well. It's a little hard to believe it was only a couple -- maybe 2 months ago or so we were at Fort Lauderdale, but I wanted to touch a little bit on Frank's prior question. You had mentioned the second half of the year, you're looking for more of the structural savings. And so if we think about the cadence of those stickier savings as we move through 2021, 2022, can you talk a little bit about that? Is it still perhaps $100 million in structural costs? Is that larger now? Would an eventual announcement on asset footprint optimization be included in those numbers? Is that upside?

很高興聽到你一切都好。有點難以置信這只是一對夫婦——大概兩個月前我們在勞德代爾堡，但我想稍微談談弗蘭克之前的問題。您曾提到下半年，您希望實現更多的結構性儲蓄。因此，如果我們考慮 2021 年、2022 年這些更具黏性的儲蓄的節奏，您能稍微談談這一點嗎？結構成本仍高達 1 億美元？現在更大了嗎？這些數字中是否會包括有關資產足跡優化的最終公告？這是好處嗎？

Sure. So the $150 million, obviously, a lot of it is connected to demand. And by the way, you'll be very happy if that temporary cost relief comes back because it's going to come back with revenue that has very high variable margin to pay for it. So we'll be celebrating those temporary costs coming off. The -- but the structural side, I think, is what we said. So we have a lot of work going on, an extensive, comprehensive program on an operational transformation project to look at every element of how we operate from supply chain, manufacturing, inventory management, et cetera, to take out significant costs, that analysis. And work going on is discovering more opportunity than we expected, and we'll give you more insight on that as we refine it. So we're excited about that, and that will allow us to escalate and increase that $100 million as our long-term goal as well to get some more of it into the back half of this year that would annualize into a real helpful benefit for next year. It does include asset rationalizations. And we told you we're going to address our Singapore plant, where that has material benefit. Obviously, with the tire situation, we're looking at optimizing our tire footprint, asset footprint, and we'll make some decisions around that. So it is a combination of better maintenance, better network optimization, better supply chain management, more efficient operations as well as asset rationalizations, pulling every lever we got. And we're going to look at SGA too and figure out how we take our business operating model that's really working phenomenally well and how we've built and developed that over the last couple of years in improving how we operate, make commercial and operating decisions today. And see if we can -- that will enable some efficiencies. Something else I'd note just on the back half of this year. It's important to keep in mind that as we're running our plants and something that Willie said about idling a bunch of facilities or severely reducing their run rates. That changes cost from going from into inventory and flowing out to being a period expense. So in the second quarter, you're going to see a pretty significant hit on period expense of conversion costs that will be sort of charged in the quarter as opposed to flow normally. So that will hit Q2, but it becomes a mere image benefit in the second half of this year because our total conversion cost for the year is going to be down with all the actions we're taking. But the timing of when it shows up by quarter is going to be very different than any other year because so much -- it's going to sort of aggregated into the second quarter. So even on a second half basis, we've got that 60% of the $150 million coming in. We're also going to have this period charge sort of, if you will, reversing because it's no longer in inventory. So as long as demand comes back at some level in the back half of the year versus Q2, you're going to see that benefit. So there's a number of things that help the back end that's just cost accounting on top of all the actual actions we're taking to reduce cost that you got to keep in mind.

當然。因此，這 1.5 億美元顯然很大一部分與需求有關。順便說一句，如果暫時的成本減免能夠再次實現，你會非常高興，因為它將透過具有非常高的可變利潤率的收入來支付它。因此，我們將慶祝這些暫時成本的消除。但我認為，我們所說的是結構方面。因此，我們正在進行大量工作，制定一個廣泛而全面的營運轉型專案計劃，以研究我們營運的每個要素，從供應鏈、製造、庫存管理等，以消除大量成本，進行分析。正在進行的工作發現了比我們預期更多的機會，我們將在完善工作的同時為您提供更多見解。因此，我們對此感到興奮，這將使我們能夠將 1 億美元作為我們的長期目標，並將其中的一部分投入到今年下半年，轉化為明年真正的有益收益。它確實包括資產合理化。我們告訴過你們，我們將解決新加坡工廠的問題，這將帶來實質的利益。顯然，針對輪胎的情況，我們正在考慮優化我們的輪胎足跡、資產足跡，並圍繞此做出一些決定。因此，它是更好的維護、更好的網路優化、更好的供應鏈管理、更有效率的營運以及資產合理化的結合，充分利用了我們所擁有的一切槓桿。我們還將研究 SGA，並弄清楚如何採用我們真正運作良好的業務運營模式，以及我們如何在過去幾年中建立和發展這種模式，以改善我們的營運方式，做出當今的商業和營運決策。看看我們是否可以——這將提高一些效率。關於今年下半年我還想說一些其他的事情。重要的是要記住，當我們運行我們的工廠時，威利說過要閒置一批設施或大幅降低其運行率。這將成本從進入庫存和流出轉變為期間費用。因此，在第二季度，您將看到轉換成本的期間費用受到相當大的打擊，這些費用將在本季度收取，而不是正常流動。因此，這將影響到第二季度，但在今年下半年，這將僅僅成為一種形象效益，因為隨著我們採取的所有行動，我們全年的總轉換成本將會下降。但按季度顯示的時間將與其他年份有很大不同，因為許多數據都會匯總到第二季。因此，即使是按半年計算，我們也已經獲得了 1.5 億美元收入中的 60%。如果你願意的話，我們也會把這種期間費用逆轉，因為它不再是庫存。因此，只要下半年需求相對於第二季回升到某個水平，你就會看到這種好處。因此，除了我們為降低成本而採取的所有實際行動之外，還有很多事情可以幫助後端，這些只是成本核算，你必須記住這一點。

That's helpful. And I guess, if I can find one more in. You mentioned you're the only producer of Tritan, which is frankly the case, but the product does compete against polycarbonate and SAN. And the other 2, I would imagine, we're seeing some pretty significant price deflation. So does the value proposition of Tritan change at all here? Does that possibly limit growth on the back end as we move out of this and Tritan and maybe has the higher product price versus peers than before?

這很有幫助。我想，如果我能再找到一個的話。您提到您是 Tritan 的唯一生產商，坦白說確實如此，但該產品確實與聚碳酸酯和 SAN 競爭。我想，另外兩個國家的價格將會出現相當明顯的通貨緊縮。那麼 Tritan 的價值主張在這裡有什麼改變嗎？當我們退出該領域和 Tritan 領域時，這是否會限制後端的成長，並且產品價格相對於同行而言可能比以前更高？

Yes. So Tritan wins in the marketplace for -- historically for 2 reasons, and now it has a third. So historically, we launched it into specific applications where we actually had better product performance in the sort of normal functional way. So better chemical resistance, better performance in these houseware applications and medical applications then polycarbonate as a starting point. Then, of course, BPA became an issue. So we picked up a lot of share and a lot of stability in our pricing because we have BPA free and polycarbonate's not. So that helped a lot and has allowed us not really -- we don't really compete against polycarbonate anymore in the applications we're in. San is out there, but it's brittle breaks if you drop it, it doesn't have the toughness at all compared to what we do. so it's a real downgrade. If you want to go that product. And now people are starting to -- especially in Europe, as a leading indicator, really starting to worry about styrene. So we're getting a lot of conversations from brands that they want styrene-free solutions. So that's also helping us. And then the third thing we've added that I think is going to be very significant for the entire portfolio in specialty plastics is recycled content, whether it's Tritan or sort of -- or other really core copolyesters or even a cellulosic, we now have the ability to add recycled content through chemical recycling, which means I can put recycled content all these products and no compromise in performance whatsoever. It's identical product, just has recycled content. So we're already getting wins, as I mentioned earlier. So that's adding a whole another level of differentiation and value to sort of taking plastic out of the environment, and truly offering circular solutions where we can actually take back products from cosmetics or hydration vessels or any other source and loop it straight back into that same product even on textiles over in fiber. So lot on going to help us continue our differentiation.

是的。因此，Tritan 在市場上獲勝的原因從歷史上看有兩個，現在又有了第三個。因此，從歷史上看，我們將其引入到特定的應用程式中，在這些應用程式中，我們實際上以正常的功能方式獲得了更好的產品性能。因此，作為起點，聚碳酸酯具有更好的耐化學性，在這些家居用品應用和醫療應用中具有更好的性能。當然，BPA 就成了一個問題。由於我們的產品不含 BPA，聚碳酸酯也不含 BPA，因此我們獲得了很大的市場份額，定價也很穩定。這對我們幫助很大，並且讓我們在所從事的應用中不再與聚碳酸酯競爭。San 就在那裡，但是如果你把它掉在地上它就會碎掉，與我們做的相比它根本沒有韌性。所以這確實是一種降級。如果您想購買該產品。現在人們開始——特別是在歐洲，作為領先指標，真正開始擔心苯乙烯。因此，我們收到了許多品牌的來信，他們希望獲得不含苯乙烯的解決方案。這也對我們有幫助。然後，我們添加的第三件事，我認為對整個特種塑膠產品組合非常重要的一點就是再生材料，無論是 Tritan 還是其他真正的核心共聚酯，甚至是纖維素，我們現在都有能力透過化學回收來添加再生材料，這意味著我可以將再生材料放入所有這些產品中，而不會在性能上做出任何妥協。這是相同的產品，只是含有回收材料。正如我之前提到的，我們已經取得了勝利。因此，這為從環境中去除塑膠增加了另一個層次的差異化和價值，並真正提供了循環解決方案，我們實際上可以從化妝品或補水容器或任何其他來源回收產品，並將其直接循環到同一產品中，甚至是在纖維紡織品上。因此，很多事情將幫助我們繼續實現差異化。

Is there a market price premium? Are you catching that price premium on recycled content? Are you finding that people are willing to pay up for it?

有市場價格溢價嗎？您是否注意到了再生材料的溢價？您是否發現人們願意為此付出代價？

We're not going to discuss that right now. That's a customer-by-customer basis. But there is a value to this that -- and a cost to this. And we're confident that our spreads will be equal to or better than our current spreads.

我們現在不討論這個。這是針對每個客戶的具體情況。但這有其價值，也有其成本。我們有信心我們的利差將等於或優於目前的利差。

Thank you our next question comes from Kevin McCarthy of Vertical Research Partners.

謝謝，我們的下一個問題來自 Vertical Research Partners 的 Kevin McCarthy。

A couple of questions on chemical intermediates. Mark, I was wondering if you could expand a bit on your licensing activities. Last quarter, you had discussed some ethylene glycol market opportunities in-licensing. Was that the source of the revenue in the first quarter how much of a benefit did you have? And what does it look like for the balance of the year relative to the magnitude of the first quarter contribution?

關於化學中間體的幾個問題。馬克，我想知道您是否可以稍微擴展一下您的許可活動。上個季度，您討論了一些乙二醇市場許可機會。這是第一季的營收來源嗎？您獲得了多少收益？那麼，相對於第一季的貢獻幅度，今年的餘額狀況如何？

So I'll let Willie take this one.

所以我讓威利拿這個。

Yes. Thanks, Kevin. So as you think about what we said in January, we said we would get licensing revenue of roughly $25 million to $50 million over a 3- year period. I would say this first installment is a modest amount that we see on this. And we would expect potentially more in the second half of the year as we hit additional milestones. But you can think about it as being, I'll call it, a little bit less than the $25 million on the low end.

是的。謝謝，凱文。所以，想想我們在一月份說過的話，我們說過我們將在 3 年內獲得大約 2500 萬至 5000 萬美元的許可收入。我想說的是，第一期的金額是我們在這方面看到的適度的。隨著我們達到更多里程碑，我們預計下半年可能會取得更多進展。但你可以認為，它比最低的 2500 萬美元少一點。

Okay. And then with regard to volume in chemical intermediates, Mark, I think you called out 4 different factors there. One of them was strong volumes in ag. I was curious about your volumes in oxo alcohol. Did you see any sort of a boost from isopropanol into sanitizers or sort of COVID related demand there? Or is that too small to matter in your mix?

好的。然後關於化學中間體的體積，馬克，我認為你提到了 4 個不同的因素。其中之一就是農業產量強勁。我對你的羰基合成酒精的含量感到好奇。您是否看到異丙醇對消毒劑的需求增加，或對與 COVID 相關的需求增加？或者這在你的混音中太小而無所謂？

I would call it too small a matter. I mean, there are certainly some boosts in the propanol area. We see demand holding up relatively well in some of these stable markets. And so CI, where their products are going into those stable markets are benefiting from it. but I wouldn't call it significant offset. The real benefits we're seeing on the positive side the COVID-19 crisis is more in parts of specialty plastics, where we're going into face shields and the barriers, the grocery store, if you see those plastic barriers up between the checkout person and the consumer, that's our heavy gauge sheet that goes into those applications. So you're seeing a lot of strong growth in some of that. Medical is obviously doing relatively well. Pharma, et cetera. so there are places where we certainly see some benefits in that stable section of what we called out on that market map. But more and smaller amount in AFP.

我認為這件事太小了。我的意思是，丙醇領域肯定會有一些提升。我們發現，在一些穩定的市場中，需求保持相對較好。因此，CI 的產品進入這些穩定的市場後將從中受益。但我並不認為這是顯著的抵消。我們從 COVID-19 危機的積極方面看到的真正好處更多的是在特種塑料領域，我們將進入面罩和屏障，在雜貨店，如果你看到收銀員和消費者之間的那些塑料屏障，那就是我們用於這些應用的厚規格板材。因此，您會看到其中一些領域出現強勁成長。醫療顯然表現相對較好。製藥業等等。因此，我們確實在市場地圖上標示的穩定部分看到了一些好處。但AFP中的數量較多，而AFP中的數量較少。

Our next question comes from Matthew Blair of Tudor Hold.

下一個問題來自 Tudor Hold 的 Matthew Blair。

I'm glad to hear everyone is safe. We think of Eastman as having a lot of connections to propylene, both on the commodity side as well as specialty side of your business. Given that refineries are a key source of propylene, could you talk about what impact, I guess, if any, you would expect lower global refinery run rates would have on Eastman here?

我很高興聽到大家都平安。我們認為伊士曼與丙烯有著廣泛的聯繫，既包括商品方面，也包括特種業務方面。鑑於煉油廠是丙烯的主要來源，您能否談談全球煉油廠運作率降低會對伊士曼產生什麼影響（如果有的話）？

Yes. So we expect the reduced rates on the refineries to help maintain a better PGP price. But it's like the price of oil, the demand is off to such a degree. It's a little hard to figure that out yet here in the second quarter. But we do see PGP holding up relatively well compared to ethylene by a significant amount. And that spread, therefore, to propane is holding up reasonably well. So that's helping. But I wouldn't -- I don't think it's going to cause a spike up in propylene at this point given where overall macroeconomic demand is.

是的。因此，我們預計煉油廠的降低費率將有助於維持更好的 PGP 價格。但就像石油價格一樣，需求已經下降到一定程度。現在到了第二季度，解決這個問題還有點困難。但我們確實看到 PGP 與乙烯相比保持了相對較好的表現。因此，丙烷的價差保持得相當好。這很有幫助。但考慮到整體宏觀經濟需求，我不認為這會導致丙烯價格飆升。

And then I was hoping you could talk a little bit more about the dynamics in tires. Previously, you've highlighted your exposure to areas like commercial in replacement rather than OEM. And based on the March data, it looks like replacement is holding in better than OEM. So I just want to clarify, is that is that reversing as you head into Q2 where these replacement tire markets are softening more than OEM?

然後我希望您能多談談輪胎的動力學。在此之前，您曾強調自己在商業替代領域而非 OEM 領域的投資。根據三月的數據，替換產品的表現似乎比原始設備製造商產品更好。所以我只想澄清一下，進入第二季度，替換輪胎市場的疲軟程度比 OEM 市場更大，這種情況是否正在逆轉？

well, I think there I think the expectation of our tire customers is that they're both softening, everything is soft, right? So what you've seen higher plants do, we serve the vast majority of them across the globe, given our market position in Crystex, and PPDs. So we have a pretty good visibility. And when we track by line, by plant, you got about 90% of them shut down in April in the U.S. and Europe. Obviously, they're starting to come back to life in China, but it's like OEMS, I mean, they're shut down. It's a combination of destocking their channel, like we're all doing to focus on cash generation as well as uncertainty demand if people are driving if there's limited commercial activity. There's going to be just less replacement tires needed here in the short term, people are going to run with what they've got, especially in this period of shelter in place. So I think they're adjusting to that. There's a few plants that are starting to turn back on now. Seeing that in a few places, but we're far from seeing them all come back to life. But I do think the replacement business, for sure, is going to be more stable than OEM in a normal time or even in a sort of normal recessionary time. But what we're in right now is just nothing like anything we've seen before. It's not like a recession, right? Everything light just went off, right, on all service activity or commercial activity. The retail stores, et cetera. So there's just a huge change in mobility that we have to work our way through, even applies to auto refinish, where normally, that's very stable, but obviously, that's declined a lot right now, too.

嗯，我認為我們的輪胎客戶的期望是它們都變得柔軟，一切都變得柔軟，對嗎？因此，如您所見，我們為全球絕大多數高等植物提供服務，這得益於我們在 Crystex 和 PPD 領域的市場地位。因此我們的可見度相當高。當我們按生產線和工廠進行追蹤時，我們發現 4 月美國和歐洲約有 90% 的工廠都已關閉。顯然，它們在中國開始復甦，但就像 OEMS 一樣，我的意思是，它們已經關閉了。就像我們都在做的那樣，這是減少渠道庫存的一種方式，重點是創造現金，以及在商業活動有限的情況下人們開車時的不確定性需求。短期內，這裡需要更換的輪胎會減少，人們會利用現有的輪胎出行，尤其是在這個居家隔離期間。所以我認為他們正在適應這一點。現在有一些植物開始恢復生長。在一些地方我們看到了這種情況，但我們還遠遠沒有看到它們全部恢復生機。但我確實認為，在正常時期，甚至在正常的經濟衰退時期，替換業務肯定會比 OEM 更穩定。但我們目前所處的境況與我們以前所見的完全不同。這不像是經濟衰退，對吧？所有服務活動或商業活動的燈都熄滅了。零售店等等。因此，我們必須努力適應流動性的巨大變化，甚至適用於汽車修補，通常情況下，這是非常穩定的，但顯然，現在也下降了很多。

Our next question comes from Mike Sison of Wells Fargo.

我們的下一個問題來自富國銀行的麥克·西森。

You guys all sound well and healthy. Mark, it's been a while since volume has been a tailwind, but hopefully, over time, things get better. Where do you think profitability or margins can get to if volumes return, maybe on a more normalized environment whenever we can get back to that? Well,

你們聽起來都很健康。馬克，交易量已經有一段時間沒有出現順風了，但希望隨著時間的推移，情況會好轉。您認為，如果銷售回升，獲利能力或利潤率會達到什麼水平，也許我們可以在更正常的環境下恢復這種水平？出色地，

I certainly think that if we look all the way back to 2018, when you get to -- before the trade war started and that then got followed on by COVID-19, I mean, you can't really make this up. Those margins that we had back then were, I think, quite attractive and representative of where we were as a company and where we should be going forward. So I don't see any reason that we won't have attractive margins in the 2/3 part of AFP and obviously, we're stabilizing fibers. There's obviously uncertainty in CI and that1/3 part of AFP. So I think that as we look at it, there's no reason not to get back to 2018 and the performance that we had back then.

我當然認為，如果我們回顧 2018 年，即貿易戰爆發之前，隨後又爆發了 COVID-19，那麼，你真的無法彌補這一切。我認為，我們當時的利潤率相當有吸引力，代表了我們公司的現狀以及我們未來的發展方向。因此，我認為我們沒有理由在 AFP 的 2/3 部分無法獲得有吸引力的利潤，而且顯然我們正在穩定纖維。CI和AFP的那1/3部分顯然存在不確定性。因此我認為，從我們的角度來看，沒有理由不回到 2018 年並達到當時的表現。

Got It. And as a quick follow-up, I think you mentioned you felt oil prices where they're at would be neutral. But I was kind of thinking about chemical MB, it's a much smaller part of your portfolio, your specialty business is much larger. So why wouldn't oil be more of a beneficiary given the lower prices and raw materials for your other businesses?

知道了。作為一個快速的後續問題，我想您提到您認為目前的油價將保持中性。但我有點考慮化學 MB，它只是你們產品組合中很小的一部分，你們的專業業務要大得多。那麼，既然價格和原料都較低，為什麼石油不會成為其他業務的更多受益者呢？

Well, I think it is, and you're right. I mean, CI was 14% of our earnings in 2019. So it's not a significant part of our story. You've got 2 combined effects on CI at the moment because the oil price is so low, right? You've got the sort of competitive dynamics, spread compression part of this as well as reduced volume, which is not normal for that segment. Normally, they can clear all their volume. But because the price of oil are where they're at, it's more difficult to access the export markets. So the combined effect is a little bit more extreme than what is sort of normal, if you will, Mike. But it is, I think, net, a positive when you look across the whole portfolio and the benefits we'll get in the specialties relative to the impact it has. It's also important to remember that, yes, it's not all cracking, right? So the Alkyl amines business is actually quite stable. Almost all our business is cost pass-through contracts. Demand is going really well there in the ag in markets. Peak acid is a really small business for us. It's just a co-product of making cellulosic. So we don't spend that much time on it. But it's relatively stable, too, because we're predominantly primate only North America because that's the only asset we have. And so those margins are -- prices are a little bit more stable here than they are in Asia. So it's going to be a headwind, but you're right. Net overall, it's a tailwind.

嗯，我認為是的，你是對的。我的意思是，CI 占我們 2019 年收入的 14%。所以這不是我們故事的重要部分。由於油價如此低廉，目前對 CI 產生了兩種綜合影響，對嗎？您已經擁有了這種競爭動態，其中傳播壓縮部分以及減少的數量，這對於該領域來說是不正常的。通常情況下，他們可以清除所有音量。但由於油價處於當前水平，進入出口市場變得更加困難。因此，如果你願意的話，綜合效應會比正常情況更加極端，麥克。但我認為，當你縱觀整個投資組合以及我們在專業領域獲得的相對於其影響的利益時，這淨值是一個積極的方面。同樣重要的是要記住，是的，它並不是全部破裂了，對吧？因此烷基胺業務實際上相當穩定。我們的業務幾乎全部都是成本轉嫁合約。那裡的農業市場需求非常強勁。對我們來說，Peak acid 的業務規模真的很小。它只是製造纖維素的副產品。所以我們不會在這上面花太多時間。但它也相對穩定，因為我們主要是北美洲的靈長類動物，因為這是我們唯一的資產。因此，這些利潤率——這裡的價格比亞洲稍微穩定一些。所以這將是一個阻力，但你是對的。總體而言，這是順風。

Our last question today will come from John Roberts of UBS.

我們今天的最後一個問題來自瑞銀的約翰羅伯茲。

I'm glad to hear you all well. And that was an interesting observation, Mark, on cars, given no one's expecting any upside there. But my question is you've been transitioning some of the Fibers capacity to apparel, which is obviously going to be weak here for quite a while. Do you have the flexibility to shift back towards a cig tow if smoking activity actually stays pretty strong here over the next few quarters?

我很高興聽到你們都很好。馬克，這是一個關於汽車的有趣觀察，因為沒有人期待汽車會有什麼好處。但我的問題是，你們已經將部分纖維產能轉向服裝產能，而服裝產能顯然將在相當長的一段時間內處於疲軟狀態。如果未來幾季這裡的吸菸活動仍然非常強勁，您是否可以靈活地轉向香菸拖車？

Well, we don't have to shift back, John. The capacity that we have in place to serve the tow market is sufficient to serve the tow market. It's still not growing, right? So it's a very stable business, and we'll be stable. We expect tow volume to be stable this year. It was stable back in 2009. And but the market is still declining in that 2% to 3% range. And we don't see the growth rate yet changing in any meaningful way associated with the pandemic. So the capacity is completely sufficient to serve that market. And it's important that we have enough capacity to serve our customers there because security supply is extremely important to our cigarette customers. So the capacity is repurposed towards textiles we're going to be materially reducing the rates of those facilities to align with the textile demand. So we'll have some asset utilization headwinds in the second quarter associated with that. But we still see a lot of ways to grow and create our own growth. Obviously, we need to get past the sort of shelter in place mode. But when people come out of that, I expect some will still buy cars again, and some are going to buy clothing again. And our value proposition has really been strengthened by adding recycled content to our Bio content, right? So now we're offering a Naia fiber that's half bio from a certified sustainable force, and the other half is not going to be recycled content, taking plastic out of the ocean and the environment. And that's a very compelling value proposition for this right market now. They very much want it. And the third benefit we have is even when it breaks into a microfiber, potentially in the machine washing and get in the ocean, it's certified biodegradable. So we've got that trifecta of an offer in this space that allows us to create growth as long as there's some amount of demand. .

好吧，我們不必後退，約翰。我們現有的服務拖車市場的產能足以滿足拖車市場的需求。它還沒有長大，對嗎？所以這是一項非常穩定的業務，我們也會保持穩定。我們預計今年的拖車量將保持穩定。2009 年時它就已經很穩定了。但市場仍在 2% 至 3% 的範圍內下滑。目前，我們還沒有看到成長率因疫情而發生任何有意義的變化。因此，其產能完全足以滿足該市場的需求。我們擁有足夠的能力為那裡的客戶提供服務非常重要，因為安全供應對我們的香菸客戶來說極為重要。因此，我們將把產能重新用於紡織品生產，大幅降低這些設施的產能，以滿足紡織品需求。因此，我們在第二季將面臨一些與此相關的資產利用阻力。但我們仍然看到很多成長和創造自身成長的方式。顯然，我們需要擺脫這種就地避難模式。但當人們擺脫這種困境時，我預計有些人仍會再次購買汽車，有些人會再次購買衣服。透過將再生材料添加到我們的生物材料中，我們的價值主張確實得到了加強，對嗎？因此，現在我們提供的 Naia 纖維一半由經過認證的可持續生物材料製成，另一半則不是回收材料，從而將塑膠從海洋和環境中去除。對於目前的市場來說，這是一個非常引人注目的價值主張。他們非常想要它。第三個好處是，即使它在機洗過程中分解成微纖維並進入海洋，它也被證明是可生物降解的。因此，只要有一定數量的需求，我們在這個領域就有三重優勢，可以創造成長。

Okay. Thanks, everyone, for joining us this morning. An audio replay of this call will be available on our website a little bit later this morning. I hope everybody has a great day.

好的。感謝大家今天早上加入我們。此次通話的音訊回放將於今天上午晚些時候在我們的網站上提供。我希望每個人都度過愉快的一天。

This will conclude today's conference call. Thank you all for your participation. You may now disconnect.

今天的電話會議到此結束。謝謝大家的參與。您現在可以斷開連線。