Westlake Corp (WLK) 2023 Q4 法說會逐字稿

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Westlake Corporation Fourth Quarter and Full Year 2023 Earnings Conference Call.

早安，女士們，先生們。謝謝你的支持。歡迎參加 Westlake Corporation 2023 年第四季和全年財報電話會議。

(Operator Instructions) As a reminder, ladies and gentlemen, this conference Is being recorded today, February 20, 2024.

（操作員說明）女士們先生們，謹此提醒，本次會議將於今天（2024 年 2 月 20 日）錄製。

I would now like to turn the call over to today's host, Jeff Holy, Westlake's Vice President and Treasurer. Sir, you may begin.

現在我想將電話轉給今天的主持人、西湖大學副總裁兼財務主管 Jeff Holy。先生，您可以開始了。

Thank you, Jonathan. Good morning, everyone, and welcome to the Westlake Corporation Conference Call to discuss our fourth quarter and full year results for 2023.

謝謝你，喬納森。大家早安，歡迎參加 Westlake Corporation 電話會議，討論我們 2023 年第四季和全年業績。

I'm joined today by Albert Chao, our President and CEO; Steve Bender, our Executive Vice President and Chief Financial Officer; and other members of our management team.

今天我們的總裁兼執行長 Albert Chao 也加入了我的行列。 Steve Bender，我們的執行副總裁兼財務長；以及我們管理團隊的其他成員。

During the call, we will refer to our 2 reporting segments: Performance and Essential Materials, which we refer to as PEM or Materials; and Housing and Infrastructure Products, which we refer to as HIP or Products. Today's conference call will begin with Albert, who will open with a few comments regarding Westlake's performance. Steve will then discuss our financial and operating results, After which, Albert will add a few concluding comments, and we'll open the call to questions.

在電話會議期間，我們將提及我們的 2 個報告部分：性能和基本材料，我們稱之為 PEM 或材料；住房和基礎設施產品，我們稱之為 HIP 或產品。今天的電話會議將由 Albert 開始，他將首先對 Westlake 的表現發表一些評論。然後史蒂夫將討論我們的財務和營運業績，之後艾伯特將添加一些結論性意見，我們將開始提問。

During the fourth quarter of 2023, we recorded a noncash impairment charge of $475 million related to the company's Epoxy business, as well as a $150 million charge to fully resolve certain liability claims that are currently not being covered by certain of our excess insurance carriers. We refer to these 2 charges as identified items in our earnings release and on this conference call. References to income from operations, EBITDA, net income and earnings per share on this call exclude the financial impact of the identified items. As such, comments made on this call will be in regard to our underlying business results using these non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to GAAP financial measures is provided in our earnings release, which is available in the Investor Relations section of our website.

在2023 年第四季度，我們記錄了與公司環氧樹脂業務相關的4.75 億美元非現金減損費用，以及1.5 億美元的費用，用於完全解決目前不在我們的某些超額保險公司承保範圍內的某些責任索賠。我們在財報發布和本次電話會議中將這兩項費用稱為已確定的項目。本次電話會議中提及的營運收入、EBITDA、淨利潤和每股盈餘不包括已確定專案的財務影響。因此，本次電話會議的評論將涉及我們使用這些非公認會計準則財務指標的基本業務成果。我們的收益報告中提供了這些非公認會計原則財務指標與公認會計原則財務指標的對賬，該報告可在我們網站的投資者關係部分找到。

Today, management is going to discuss certain topics that will contain forward-looking information that is based on management's beliefs as well as assumptions made by and information currently available to management. These forward-looking statements suggest predictions or expectations and thus are subject to risks or uncertainties. These risks and uncertainties are discussed in Westlake's Form 10-K for the year ended December 31, 2022, and other SEC filings. We encourage you to learn more about these factors that could lead our actual results to differ by reviewing these SEC filings, which are also available on our Investor Relations website.

今天，管理層將討論某些主題，其中包含基於管理層信念以及管理層所做的假設和當前可獲得的資訊的前瞻性資訊。這些前瞻性陳述暗示了預測或預期，因此存在風險或不確定性。 Westlake 截至 2022 年 12 月 31 日止年度的 10-K 表格以及其他 SEC 文件中討論了這些風險和不確定性。我們鼓勵您透過查看這些 SEC 文件（也可以在我們的投資者關係網站上找到）來詳細了解這些可能導致我們的實際結果有所不同的因素。

This morning, Westlake issued a press release with details of our fourth quarter and full year results. This document is available in the Press Release section of our website at westlake.com. We have also included an earnings presentation, which can be found in the Investor Relations section on our website. A replay of today's call will be available beginning today, 2 hours following the conclusion of this call. This replay may be accessed via Westlake's website.

今天早上，Westlake 發布了一份新聞稿，詳細介紹了我們第四季和全年的業績。本文件可在我們網站 westlake.com 的新聞稿部分取得。我們還提供了收益演示，您可以在我們網站的投資者關係部分找到該演示。從今天開始，也就是本次電話會議結束後 2 小時後，即可重播今天的電話會議。可以透過 Westlake 的網站存取此重播。

Please note that information reported on this call speaks only as of today, February 20, 2024, and therefore, you're advised that time-sensitive information may no longer be accurate as of the time of any replay.

請注意，本次電話會議報告的資訊僅截至今天（2024 年 2 月 20 日），因此，我們建議您，時間敏感的資訊在任何重播時可能不再準確。

Finally, I would advise you that this conference call is being broadcast live through an Internet webcast system that can be accessed on our web page at westlake.com.

最後，我建議您，本次電話會議將透過網路網路廣播系統進行現場直播，您可以透過我們的網頁 westlake.com 存取該系統。

Now I would like to turn the call over to Albert Chao. Albert?

現在我想把電話轉給Albert Chao。阿爾伯特？

Thank you, Jeff. Good morning, everyone. We appreciate you joining us to discuss our fourth quarter and full year 2023 results.

謝謝你，傑夫。大家，早安。感謝您與我們一起討論我們的 2023 年第四季和全年業績。

Excluding the identified items, for the fourth quarter of 2023, we reported net income of $93 million or $0.72 per share, and EBITDA of $390 million on sales of $2.8 billion. While overall sales revenue was below the year ago period due to lower average sales prices in the PEM segment, we are pleased that our fourth quarter total sales volume increased 7% compared to the fourth quarter of 2022, with North American demand strength partly offset by lower sales volumes in our international operations.

排除已確定的項目，2023 年第四季的淨利潤為 9,300 萬美元，即每股 0.72 美元，EBITDA 為 3.9 億美元，銷售額為 28 億美元。雖然由於 PEM 領域的平均銷售價格較低，整體銷售收入低於去年同期，但我們很高興第四季度的總銷量比 2022 年第四季度增長了 7%，北美需求強勁部分抵消了我們的國際業務銷量下降。

Regionally, our volume and price declines 2023 were most impacted in our European operations, which were pressured by a weak macroeconomic backdrop and imports into Europe from Asia. The volume and price declines were most felt in our base epoxy business, driven by the very weak economic environment in Europe and China, along with significant new global epoxy capacity additions. These capacity additions, which were primarily in China, were met with weak regional demand, driving a significant increase in Asian exports, Europe and other regions. These Asian export volumes were aggressively priced as some Asian competitors received energy subsidies to stimulate exports. at a time when European energy costs were still relatively high in part due to the ongoing war in Ukraine.

從地區來看，我們的歐洲業務在 2023 年的銷售和價格下降受到的影響最大，歐洲業務受到宏觀經濟背景疲軟和從亞洲進口到歐洲的壓力。由於歐洲和中國經濟環境非常疲軟，以及全球環氧樹脂產能大幅增加，我們的基礎環氧樹脂業務的銷售和價格下降最為明顯。這些新增產能主要來自中國，滿足了地區需求疲軟的需求，推動了亞洲、歐洲和其他地區的出口大幅成長。由於一些亞洲競爭對手獲得能源補貼以刺激出口，這些亞洲出口量的定價非常激進。當時歐洲能源成本仍然相對較高，部分原因是烏克蘭持續的戰爭。

As a result of these factors, our European base epoxy resin business experienced a sharp and sudden decline in profitability. To reflect these market changes, along with our current outlook for global operating rates to remain under pressure, we recorded a noncash impairment charge in our base epoxy business in the Netherlands in the fourth quarter. We have begun to implement actions to reduce our costs and improve the profitability of our European businesses. The cost savings we're expecting across our company-wide cost reduction programs are $125 million to $150 million in 2024, after achieving 2023 cost savings of $110 million.

受這些因素影響，我們的歐洲基礎環氧樹脂業務獲利能力突然急劇下降。為了反映這些市場變化，以及我們目前對全球開工率仍面臨壓力的前景，我們在第四季度對荷蘭基礎環氧樹脂業務記錄了非現金減值費用。我們已開始採取行動降低成本並提高歐洲業務的獲利能力。在 2023 年實現 1.1 億美元的成本節約之後，我們預計全公司範圍內的成本削減計劃到 2024 年將節省 1.25 億至 1.5 億美元的成本。

Before turning the call over to Steve to review our financial results in more detail, I want to take a few minutes to review our accomplishments in 2023. Our HIP segment achieved record income from operations of $710 million, and a record EBITDA margin of 23% as we further integrated and achieved synergies from the Boral, Lasco and Dimex acquisitions. We are very pleased with the evolution of this segment, which produced back-to-back record results over the past 2 years, even with the economic challenges in the residential building market. These record results provide stability to our overall earnings in 2023 with an asset-light, cash-generative business model, with leading positions in North America.

在將電話轉交給史蒂夫更詳細地審查我們的財務業績之前，我想花幾分鐘回顧一下我們在2023 年取得的成就。我們的HIP 部門實現了創紀錄的營運收入7.1 億美元，以及創紀錄的EBITDA 利潤率23%隨著我們進一步整合 Boral、Lasco 和 Dimex 收購並實現協同效應。我們對該細分市場的發展感到非常滿意，儘管住宅建築市場面臨經濟挑戰，但該細分市場在過去兩年中連續創下了創紀錄的表現。這些創紀錄的業績為我們2023年的整體獲利提供了穩定性，我們採用輕資產、現金產生的業務模式，在北美處於領先地位。

Our constant focus on cash flow generation enabled Westlake to generate $2.3 billion of cash from operations, and $1.3 billion of free cash flow after investing over $1 billion to maintain and improve our plants and equipment. The solid cash flow generation, strengths of our business and confidence in the company's future allowed us to return approximately $250 million to shareholders in 2023, including the increase of our quarterly dividend by 40% to $0.50 per share, which demonstrates our commitment to rewarding shareholders.

我們對現金流產生的持續關注使 Westlake 能夠從營運中產生 23 億美元的現金，並在投資超過 10 億美元用於維護和改進我們的工廠和設備後產生 13 億美元的自由現金流。穩定的現金流產生、我們的業務優勢以及對公司未來的信心使我們能夠在2023 年向股東返還約2.5 億美元，其中包括將季度股息增加40% 至每股0.50 美元，這體現了我們回報股東的承諾。

We finished the year with a solid investment-grade rated balance sheet, highlighted by $3.3 billion of cash and equivalents, providing flexibility to pursue opportunities as they present themselves.

我們以穩健的投資等級資產負債表結束了這一年，其中最突出的是 33 億美元的現金和等價物，為抓住機會提供了靈活性。

Finally, in conjunction with the publication of our 6th annual sustainability report in October, we added 5 additional feasibility goals to our existing CO2 emissions intensity reduction target. These 5 new goals address water usage, health and safety, community engagement, diversity and inclusion and the circular economy, and are an important part of our overall approach towards stewardship of our environment and communities. Taken together, I'm very proud of our 2023 accomplishments given the challenging global economic environment. And I'd like to thank our nearly 16,000 team members for their hard work and dedication that enabled these achievements and a record HIP results.

最後，結合我們 10 月發布的第六份年度永續發展報告，我們在現有的二氧化碳排放強度削減目標的基礎上增加了 5 個額外的可行性目標。這 5 個新目標涉及用水、健康和安全、社區參與、多樣性和包容性以及循環經濟，是我們環境和社區管理整體方法的重要組成部分。總的來說，鑑於全球經濟環境充滿挑戰，我對我們 2023 年的成就感到非常自豪。我要感謝我們近 16,000 名團隊成員的辛勤工作和奉獻精神，正是他們的辛勤工作和奉獻才取得了這些成就和創紀錄的 HIP 成果。

I would now like to turn the call over to Steve to provide more detail on our financial results for the fourth quarter and full year of 2023.

我現在想將電話轉給 Steve，以提供有關我們 2023 年第四季和全年財務業績的更多詳細資訊。

Thank you, Albert, and good morning, everyone. As Albert discussed, our fourth quarter of 2023 financial results were reduced by $475 million as we fully impaired the base epoxy resin business in the Netherlands to reflect a change in the fair value of these assets as a result of the rapid deterioration in global epoxy markets over the past year.

謝謝你，阿爾伯特，大家早安。正如阿爾伯特所討論的，我們2023 年第四季度的財務業績減少了4.75 億美元，因為我們完全減值了荷蘭的基礎環氧樹脂業務，以反映由於全球環氧樹脂市場迅速惡化而導致這些資產的公允價值變化在過去的一年。

Asian and European economies remain weak throughout 2023, and we saw a flood of Asian epoxy imports into European markets as large Asian epoxy capacity additions were completed at a time of persistently elevated power, energy and raw material costs in our European operations.

2023 年，亞洲和歐洲經濟仍然疲軟，我們看到亞洲環氧樹脂大量進口到歐洲市場，因為亞洲環氧樹脂產能的大幅增加是在我們歐洲業務的電力、能源和原材料成本持續升高的情況下完成的。

Separately, as we previously disclosed, we reached settlements to resolve certain liability claims. We recognized a charge of $150 million in the fourth quarter of 2023 to reflect the portion of the total settlement amount that is subject to dispute with some of our insurance carriers. We're pleased to have fully resolved these liability claims while we work with our insurers to resolve the disputed portion of the settlement amount.

另外，正如我們之前所揭露的，我們達成了和解以解決某些責任索賠。我們在 2023 年第四季確認了 1.5 億美元的費用，以反映和解總額中與我們的一些保險公司發生爭議的部分。我們很高興在與保險公司合作解決和解金額中有爭議的部分的同時，完全解決了這些責任索賠。

As a reminder, my comments regarding income from operations, EBITDA, net income and earnings per share all exclude the financial impact of both the noncash impairment and the litigation settlement charges. Westlake reported net income of $93 million or $0.72 per share in the fourth quarter on sales of $2.8 billion. Net income for the fourth quarter of 2023 decreased $139 million from the fourth quarter of 2022 as a result of lower average sales prices and margins in PEM. Particularly for caustic soda and epoxy resin and $20 million of restructuring cost as we optimized operations in our HIP segment.

提醒一下，我對營業收入、EBITDA、淨利和每股盈餘的評論均排除了非現金減損和訴訟和解費用的財務影響。 Westlake 報告第四季淨利潤為 9,300 萬美元，即每股 0.72 美元，銷售額為 28 億美元。由於 PEM 平均銷售價格和利潤率下降，2023 年第四季淨利潤較 2022 年第四季減少 1.39 億美元。特別是對於燒鹼和環氧樹脂，以及我們優化 HIP 部門運作時的 2000 萬美元重組成本。

When compared to the third quarter of 2023, net income decreased by $190 million in the fourth quarter due to lower average sales prices in PEM, unfavorable sales mix changes in PEM, and a typical seasonal decline in HIP sales volume.

與 2023 年第三季相比，由於 PEM 平均銷售價格較低、PEM 不利的銷售組合變化以及 HIP 銷售的典型季節性下降，第四季度淨利潤減少了 1.9 億美元。

For the fourth quarter of 2023, our utilization of the FIFO method of accounting resulted in an unfavorable pretax impact of $35 million compared to what earnings would have been reported on the LIFO method. This is only an estimate and has not been audited.

2023 年第四季度，與採用 LIFO 方法報告的收益相比，我們採用 FIFO 會計方法導致了 3500 萬美元的不利稅前影響。這只是一個估計，未經審計。

For the full year of 2023, we reported net income of $1.1 billion, and EBITDA of $2.6 billion on sales of $12.5 billion. Compared to our record 2022 results, net income attributable to Westlake declined by $1.1 billion as growth in HIP's income from operations more than offset by lower PEM earnings, primarily due to lower average sales prices and margins.

2023 年全年，我們的淨利潤為 11 億美元，EBITDA 為 26 億美元，銷售額為 125 億美元。與我們創紀錄的 2022 年業績相比，歸屬於 Westlake 的淨利潤下降了 11 億美元，因為 HIP 營運收入的成長被 PEM 收益下降所抵消，這主要是由於平均銷售價格和利潤率下降。

Turning to our segment results. PEM EBITDA of $1.6 billion in 2023 was below our record 2022 results, primarily due to lower global sales prices and margins as a result of softer demand created by weaker global economic conditions and customer destocking at a time when new global capacity additions for polyethylene and epoxy resin entered the market. However, after customer destocking ended as 2023 drew to a close, we saw signs of improvement in our sales volumes, which rose 6% year-over-year in the fourth quarter, with improving signals and demand strength that have carried into the first quarter of 2024 from many of our PEM product categories.

轉向我們的部門業績。 2023 年PEM EBITDA 為16 億美元，低於我們創紀錄的2022 年業績，主要是由於全球經濟狀況疲軟導致需求疲軟，以及在全球聚乙烯和環氧樹脂新增產能之際客戶去庫存，導致全球銷售價格和利潤率下降。樹脂進入市場。然而，隨著 2023 年接近尾聲，客戶去庫存結束後，我們的銷售出現了改善的跡象，第四季度同比增長 6%，信號和需求強度的改善延續到了第一季2024 年我們的許多PEM 產品類別。

On a quarterly basis, PEM's fourth quarter EBITDA of $201 million decreased by $138 million from the third quarter. The sequential decline in EBITDA was the result of lower average sales prices particularly for caustic soda, which were driven by increased export demand and price changes that occurred from the third quarter.

按季度計算，PEM第四季EBITDA為2.01億美元，較第三季減少1.38億美元。 EBITDA 環比下降是平均銷售價格下降的結果，尤其是燒鹼的平均銷售價格下降，這是由出口需求增加和第三季以來發生的價格變化所推動的。

With the lower sales prices, we saw an increase in demand led by caustic soda that drove a 4% sequential increase in our sales volume in contrast to the historic pattern of slower customer orders and sales into year-end.

隨著銷售價格的下降，我們看到以燒鹼為主導的需求增加，帶動我們的銷量環比增長 4%，這與年底客戶訂單和銷售放緩的歷史模式形成鮮明對比。

While it's still early in 2024, we have recently seen signs of firming demand after sales prices for most of our major PEM products were relatively stable on a month-to-month basis within the fourth quarter.

雖然現在還處於 2024 年初期，但我們最近看到了需求堅挺的跡象，因為我們大多數主要 PEM 產品的銷售價格在第四季度環比相對穩定。

Moving to our HIP segment. $710 million of income from operations set a new annual record in 2023 despite lower revenue as the strong value of our brands allowed us to remain disciplined in pricing despite lower materials costs contributing to an improvement in EBITDA margin to 23% from 20% in 2022. These results are a testament to the strength of our brand and the importance of our products to our customers. The strong performance in 2023 illustrates the benefits of our vertical integration and diversification strategy as lower cost materials used by our hip segment drove solid margins at a time when PEM segment margins were compressed due to lower sales prices.

轉向我們的 HIP 部分。儘管收入較低，但2023 年營運收入仍創下了7.1 億美元的年度新紀錄，因為我們品牌的強大價值使我們能夠在定價方面保持嚴格，儘管材料成本較低，導致EBITDA 利潤率從2022 年的20% 提高到23%。這些結果證明了我們品牌的實力以及我們產品對客戶的重要性。 2023 年的強勁表現說明了我們的垂直整​​合和多元化策略的好處，因為在PEM 細分市場的利潤因銷售價格下降而被壓縮的情況下，我們的髖關節細分市場使用的低成本材料推動了穩健的利潤率。

Shifting focus to the fourth quarter results, HIP sales rose year-over-year as our penetration in the markets drove an 11% increase in sales volumes that more than offset lower average sales prices. Volume growth was strongest in our pipe and fittings business, particularly for residential and infrastructure pipe with strong customer orders late in the quarter and continuing into early 2024. While average sales prices declined 10% year-over-year, this is generally less pronounced than the declines in our materials cost, contributing to the expansion of HIP's EBITDA margin to 18% from 14%, inclusive of the $20 million restructuring cost in the fourth quarter of '23 to optimize our manufacturing footprint.

將焦點轉向第四季度業績，HIP 銷售額同比增長，因為我們對市場的滲透推動銷量增長 11%，這足以抵消平均銷售價格的下降。我們的管道和配件業務的銷售成長最為強勁，尤其是住宅和基礎設施管道，本季末客戶訂單強勁並持續到 2024 年初。雖然平均銷售價格年減 10%，但總體而言，下降幅度不如材料成本的下降，促使HIP 的EBITDA 利潤率從14% 擴大到18%，其中包括2023 年第四季為優化我們的製造足跡而花費的2,000 萬美元重組成本。

Margin improvement was also supported by the 11% year-over-year sales volume growth and the achievement of over $20 million of additional cost synergies in 2023 on the Boral, Lasco and Dimex acquisitions.

銷量年增 11%，以及 2023 年收購 Boral、Lasco 和 Dimex 實現的超過 2000 萬美元的額外成本協同效應也支持了利潤率的提高。

Turning to the balance sheet and cash flows. Westlake's cash generation reflects our continued focus on operational and financial discipline. For the full year of 2023, net cash provided by operating activities was $2.3 billion, while capital expenditures were $1 billion, resulting in strong free cash flow of $1.3 billion.

轉向資產負債表和現金流量。 Westlake 的現金產生反映了我們對營運和財務紀律的持續關注。 2023年全年，經營活動提供的淨現金為23億美元，而資本支出為10億美元，進而帶來13億美元的強勁自由現金流。

As of December 31, 2023, cash and cash equivalents were $3.3 billion, and total debt was $4.9 billion, with our net leverage remaining below 1 turn of EBITDA.

截至 2023 年 12 月 31 日，現金及現金等價物為 33 億美元，債務總額為 49 億美元，我們的淨槓桿率仍低於 EBITDA 的 1 倍。

Westlake's debt is at an attractive average fixed rate of 3.2%, and an average maturity of 16 years, which combined with $3 billion in cash and investment-grade rated balance sheet puts Westlake in a financially strong position at this stage of the business cycle.

Westlake 的債務平均固定利率為 3.2%，具有吸引力，平均期限為 16 年，加上 30 億美元的現金和投資等級評級的資產負債表，使 Westlake 在商業週期的現階段處於財務強勢地位。

We will look to strategically deploy our balance sheet for value-creating opportunities.

我們將尋求策略性地部署我們的資產負債表，以尋找創造價值的機會。

Turning our attention to 2024, let me address some of your modeling questions and provide some guidance for the year ahead. Based on our current view of demand and prices, we expect 2024 revenue in our Housing and Infrastructure Products segment to be between $4 billion and $4.4 billion, with EBITDA margin around 20%. As Albert mentioned, we are targeting $125 million to $150 million of cost savings in 2024, even after our 2023 cost savings of $110 million exceeding last year's target.

將我們的注意力轉向 2024 年，讓我回答你們的一些建模問題，並為未來一年提供一些指導。根據我們目前對需求和價格的看法，我們預計 2024 年住房和基礎設施產品部門的收入將在 40 億至 44 億美元之間，EBITDA 利潤率約為 20%。正如 Albert 所提到的，我們的目標是到 2024 年節省 1.25 億至 1.5 億美元的成本，即使我們在 2023 年節省的成本超過去年的目標 1.1 億美元。

We expect our total capital expenditures to be approximately $1 billion, similar to our depreciation run rate. This includes cost for a planned turnaround at our Petro 1 ethylene unit scheduled to begin in the second half of the year that is projected to last approximately 60 days.

我們預計總資本支出約為 10 億美元，與我們的折舊率相似。這包括計劃於今年下半年開始的 Petro 1 乙烯裝置檢修成本，預計將持續約 60 天。

For the full year of 2024, we expect our effective tax rate to be approximately 23%. We also expect cash interest expense to be approximately $160 million.

2024 年全年，我們預計有效稅率約為 23%。我們也預計現金利息支出約為 1.6 億美元。

Now I'd like to turn the call over to Albert to provide some current outlook of our business. Albert?

現在我想將電話轉給艾伯特，以提供我們目前業務的一些前景。阿爾伯特？

Thank you, Steve.

謝謝你，史蒂夫。

As we head into 2024, we are well positioned to respond to evolving market trends while executing our strategies. In our hip segment, the breadth of North American footprint and our leading market positions with a broad product portfolio, supported by strong brands, has increased our penetration with the farthest growing segments of the market. Our exposure to this growing portion of the market should support future HIP segment sales volume growth.

邁入 2024 年，我們已做好充分準備，能夠在執行策略的同時應對不斷變化的市場趨勢。在我們的時尚細分市場中，我們在北美市場的廣泛覆蓋範圍以及我們在強大品牌支持下擁有廣泛產品組合的領先市場地位，提高了我們在增長最快的市場細分市場的滲透率。我們對這一不斷增長的市場份額的接觸應該會支持未來 HIP 細分市場銷售的成長。

Meanwhile, in our PEM segment, we are also a market leader in specialty polyethylene and chlorovinyls, which provides Westlake scale and capabilities to serve our customers' needs and support their growth plans.

同時，在我們的 PEM 領域，我們也是特種聚乙烯和氯乙烯領域的市場領導者，這提供了 Westlake 的規模和能力來滿足客戶的需求並支持他們的成長計劃。

Furthermore, our globally advantaged energy and feedstock position in North America provides our PEM segment with the flexibility of export sales opportunities. A key component of our business strategy is to reduce volatility in earnings and cash flow while maximizing earnings growth potential. The integration of our PEM and HIP segments demonstrates the strength of our strategy to capture the value of the cycle whether it moves more to the upstream or downstream portion of the value chain.

此外，我們在北美的全球能源和原料優勢為我們的 PEM 部門提供了靈活的出口銷售機會。我們業務策略的關鍵組成部分是減少收益和現金流的波動，同時最大限度地提高收益成長潛力。我們的 PEM 和 HIP 部門的整合證明了我們捕捉循環價值的策略的實力，無論它更多地轉移到價值鏈的上游還是下游部分。

In 2024, we will continue to deliver on all of our priorities including the safe, reliable operational plans, allocating capital to expand our business portfolio, generating value-added returns and providing top-tier shareholder returns while maintaining a strong investment-grade rated balance sheet. At the same time, we will continue to provide our customers with innovative products that provides a path to achieving their long-term sustainability goals.

2024年，我們將繼續實現我們的所有優先事項，包括安全、可靠的營運計劃，分配資本以擴大我們的業務組合，產生增值回報並提供頂級股東回報，同時保持強勁的投資級評級平衡床單。同時，我們將持續為客戶提供創新產品，為他們實現長期永續發展目標提供途徑。

Sustainability remains critical to our global strategy, not only because it's the right thing to do for the environment, but also because it provides increasingly profitable market growth opportunities. We continue to look for ways to further integrate our businesses to capture this market growth. As a recent example, our global Compounds and Dimex businesses have paired their respective expertise in PVC compounding and recycling to process the Westlake global compounds waste materials, including grinding, shredding, blending and compounding, utilizing Dimex's processing services.

永續發展對我們的全球策略仍然至關重要，不僅因為它對環境來說是正確的事情，而且因為它提供了利潤日益豐厚的市場成長機會。我們繼續尋找進一步整合我們業務的方法，以抓住這一市場成長。舉個最近的例子，我們的全球複合材料和 Dimex 業務將各自在 PVC 複合和回收方面的專業知識結合起來，利用 Dimex 的加工服務來處理 Westlake 全球複合廢料，包括研磨、切碎、混合和復合。

As 2024 progresses, we will continue to look for more opportunities to leverage the diverse materials technology and industrial know-how of our portfolio of businesses to reduce our and our customer's waste material to further sustainability goals.

隨著 2024 年的進展，我們將繼續尋找更多機會，利用我們業務組合的多樣化材料技術和工業專業知識，減少我們和客戶的廢料，以進一步實現永續發展目標。

Before I open the call for your questions, I want to provide some closing thoughts on 2023 and our current outlook. The benefits of our diversification strategy were apparent once again in the fourth quarter and the year as a whole as record earnings in HIP provided stability to our overall results at a time when PEM sales prices and margins were at a trough at this stage of the cycle.

在開始提問之前，我想就 2023 年和我們當前的前景提供一些總結性的想法。我們多元化策略的好處在第四季度和全年再次顯現出來，在 PEM 銷售價格和利潤率處於週期這一階段的低谷之際，HIP 創紀錄的收益為我們的整體業績提供了穩定性。 。

While the macroeconomic backdrop remains uncertain, I'm more confident in our near-term outlook for a few key reasons. First, customer inventories are at much lower levels, following a prolonged period of destocking activity. As a result, -- we believe the customer's orders in 2024 will better reflect demand in our end markets with potential upside as our customers begin to restock as demand improves.

儘管宏觀經濟背景仍然不確定，但由於幾個關鍵原因，我對我們的近期前景更加充滿信心。首先，經過長時間的去庫存活動，客戶庫存水準大幅降低。因此，我們相信 2024 年客戶的訂單將更能反映我們終端市場的需求，隨著需求的改善，我們的客戶開始補充庫存，從而具有潛在的上升空間。

Second, in part, due to these low customer inventory levels, we exited 2023 and began 2024 with solid sales volume momentum. Fourth quarter sales volume in our HIP segment rose 11% year-over-year, and the dialogue we are having with our customers support the momentum we have as we enter into 2024.

其次，部分原因是由於客戶庫存水準較低，我們在 2023 年結束時以穩健的銷售勢頭進入 2024 年。我們的 HIP 細分市場第四季銷量年增 11%，我們與客戶的對話支持了我們進入 2024 年的勢頭。

Meanwhile, fourth quarter sales volume for our PEM segment rose 6% year-over-year and 4% sequentially, which was counter to the normal seasonal decline that we typically see towards year-end.

同時，我們 PEM 部門第四季度的銷量同比增長 6%，環比增長 4%，這與我們通常在年底看到的正常季節性下降相反。

Third, the solid sales volume momentum is continuing into 2024, supporting price momentum for most of our products in our PEM segment. Recent disruptions in global trade routes from tensions in the Middle East and lower water levels at the Panama Canal also have the potential to disrupt imports and support our pricing initiatives.

第三，穩健的銷售動能將持續到 2024 年，支撐我們 PEM 領域大多數產品的價格動能。最近，中東緊張局勢和巴拿馬運河水位下降導致全球貿易路線中斷，也有可能擾亂進口並支持我們的定價措施。

Finally, the Federal Reserve has paused a series of interest rate hikes that depress demand and business confidence in 2023. While the future path of interest rate policy is uncertain, the pause and potential for eventual cuts could create a more favorable macroeconomic backdrop for our businesses in 2024, particularly those portions of our business where demand is more sensitive to interest rates, such as housing, construction, energy and autos.

最後，聯準會暫停了一系列抑制 2023 年需求和企業信心的升息。雖然未來利率政策的路徑不確定，但暫停和最終降息的可能性可能會為我們的企業創造更有利的宏觀經濟背景到2024年，特別是我們業務中需求對利率更為敏感的部分，例如住房、建築、能源和汽車。

Thank you very much for listening to our fourth quarter earnings call. I will now turn the call back over to Jeff.

非常感謝您收聽我們的第四季財報電話會議。我現在將把電話轉回給傑夫。

Thank you, Albert. Before we begin taking questions, I'd like to remind listeners that our earnings presentation, which provides additional clarity into our results, is available on our website and a replay of this teleconference will be available 2 hours after the call has ended. We'll provide an information again at the end of the call.

謝謝你，艾伯特。在我們開始回答問題之前，我想提醒聽眾，我們的收益演示可以讓我們的結果更加清晰，可以在我們的網站上查看，並且將在電話會議結束 2 小時後重播本次電話會議。我們將在通話結束時再次提供資訊。

Jonathan, we will now take questions.

喬納森，我們現在提問。

(Operator Instructions) Our first question comes from the line of Patrick Cunningham from Citi.

（操作員說明）我們的第一個問題來自花旗集團的帕特里克·坎寧安（Patrick Cunningham）。

Can you hear me now?

你聽得到我嗎？

Yes.

是的。

So just on the sales and margin guide for the hip segment, I'm just trying to square what your volume outlook might be, given we have some uncertainty around rate cuts, but you cited pretty solid momentum in that business. So do you expect volumes to grow next year and maybe margin decline is more from continued price declines and stabilizing PVC costs?

因此，就時尚細分市場的銷售和利潤率指南而言，鑑於我們在降息方面存在一些不確定性，我只是想調整您的銷售前景，但您提到了該業務的強勁勢頭。那麼，您預計明年的銷售量會成長嗎？也許利潤下降更多是因為價格持續下跌和 PVC 成本穩定所致？

So Patrick, it's a good question. And we've seen good momentum at this stage as we enter the first portion of 2024.

派崔克，這是一個很好的問題。當我們進入 2024 年上半年時，我們在現階段看到了良好的勢頭。

Certainly, depending on the outlook, whether you're looking at some of the recent statistics by the U.S. Census Bureau on housing starts and permits or are those published by [NHB] or John Burns Real Estate, JBRE, the outlook remains, I think, constructive in terms of growth and demand as we indicated on our prepared remarks, we're continuing to see good volume pull in the first few months of 2024. It's hard to project the entire year of '24 at this stage. But I would say that we remain optimistic, given the volume pull we've seen at this stage.

當然，根據前景，無論您是查看美國人口普查局最近關於住房開工和許可證的一些統計數據，還是 [NHB] 或 John Burns Real Estate、JBRE 發布的數據，我認為前景仍然存在正如我們在準備好的發言中所指出的那樣，在成長和需求方面具有建設性，我們將繼續看到2024 年頭幾個月的良好銷售拉動。現階段很難預測24 年全年的情況。但我想說，鑑於我們現階段看到的成交量拉動，我們仍然保持樂觀。

Got it. That's helpful. And then I was hoping you could elaborate on the manufacturing footprint optimization for HIP. So how many assets have you closed and how many maybe are you planning to close in 2024? And what sort of level of run rate savings should we expect and the contribution within that $125 million to $150 million that's specifically coming from HIP?

知道了。這很有幫助。然後我希望您能詳細說明 HIP 的製造足跡優化。那麼，您已經關閉了多少資產，以及您計劃在 2024 年關閉多少資產？我們應該預期什麼樣的運行率節省水準以及這 1.25 億至 1.5 億美元中專門來自 HIP 的貢獻？

So the restructuring of $20 million that we took in '23 in the fourth quarter of '23 really relates to optimizing some of our assets in the exterior building products business. And so while we've taken steps in, whether it be in our stone or other business applications, certainly, we do look to further optimize that over the course of '24, and the exact plan will be somewhat a function of how the market develops.

因此，我們在 23 年第四季進行的 2000 萬美元重組確實與優化我們在外部建築產品業務中的一些資產有關。因此，雖然我們已經採取了措施，無論是在我們的石材還是其他業務應用程式中，當然，我們確實希望在 24 年期間進一步優化，而確切的計劃將在某種程度上取決於市場的發展。

Certainly, we're looking to really optimize those -- that footprint based on where the market demand is. And if you think of that smile from both coasts along the Southeast and Southwest, we're well positioned in that marketplace, and we're looking to make sure that our assets are positioned to be able to meet that market demand. So we don't have any specific plans that we're ready to announce for '24, but I would say, we're prepared to address those needs depending on market conditions.

當然，我們希望根據市場需求真正優化這些足跡。如果您想到東南和西南兩岸的微笑，我們在該市場中處於有利地位，並且我們希望確保我們的資產能夠滿足該市場需求。因此，我們沒有準備好宣布 24 年的任何具體計劃，但我想說，我們準備根據市場情況滿足這些需求。

On top of those -- yes, I want to add. Some of those cost savings, as a result of the rationalization we've done in '23, we see the benefit in '24.

除此之外——是的，我想補充一點。由於我們在 23 年進行的合理化，其中一些成本節省，我們在 24 年看到了好處。

And our next question comes from the line of Frank Mitsch Fermium Research.

我們的下一個問題來自弗蘭克米奇費米研究中心。

I do want to come back to the HIP margin question. I appreciate your comments regarding volumes, et cetera. But you reported pretty record margins in the third quarter. So maybe there's an expectation that, that doesn't -- that doesn't continue. Is that playing a big role as to why you're thinking your margins in '24 will be roughly 300 bps lower than in '23?

我確實想回到 HIP 邊緣問題。我感謝您對數量等方面的評論。但你們報告第三季的利潤率創歷史新高。所以也許有人期望這種情況不會持續下去。這是否是您認為 24 年利潤率將比 23 年低約 300 個基點的重要原因？

Yes. So Frank, we're exiting, obviously, the end of '23 with lower price points in some of those discrete products. And certainly, we see rising raw materials cost, as we mentioned, and see some guidance in some of those PEM products. And so this is why we've kind of guided to potentially seeing lower margins in the HIP business. Simply, it's because of the exit rate of prices at the end of '23 and the potential, and we're seeing some traction on materials cost in that flow into that business.

是的。所以弗蘭克，顯然，我們將在 23 年底退出，其中一些離散產品的價格點較低。當然，正如我們所提到的，我們看到原材料成本不斷上漲，並在某些 PEM 產品中看到了一些指導。因此，這就是為什麼我們認為 HIP 業務的利潤率可能會下降。簡單地說，這是因為 23 年底的價格退出率和潛力，我們看到流入該業務的材料成本有一些吸引力。

Got you. And sticking with the raw materials and inputs and so forth. Obviously, we've seen a material collapse in natural gas and ethane for that matter. But on the other side, we've seen propane moving up.

明白你了。並堅持原料和投入等。顯然，我們已經看到天然氣和乙烷的物質崩潰。但另一方面，我們看到丙烷價格上漲。

How do you think about the -- from an overall Westlake perspective, the recent movements in NGLs and in nat gas?

從整個 Westlake 的角度來看，您如何看待 NGL 和天然氣的近期走勢？

Yes. Every dollar of gas price dropped 1,000 cubic feet is well over $100 million of benefit. And it's to say not only that our energy costs going down, but when natural gas prices going down, ethane price going down, so our ethylene manufacturing cost has come down a lot.

是的。天然氣價格每下降 1,000 立方英尺，帶來的效益遠超過 1 億美元。這不僅是說我們的能源成本下降了，而且當天然氣價格下降、乙烷價格下降時，我們的乙烯製造成本也下降了很多。

Okay. Great. So that's a bit of a tailwind as we sit here in 1Q, correct?

好的。偉大的。所以，當我們坐在第一季時，這有點順風，對嗎？

Correct. Yes.

正確的。是的。

And our next question comes from the line of Aleksey Yefremov from KeyBanc Capital.

我們的下一個問題來自 KeyBanc Capital 的 Aleksey Yefremov。

This is Ryan on for Alex. So my first question, I want to dig in a little bit on the volumes in PEM. So obviously, volumes rose, I think, 6% year-over-year and 4% sequentially. Is this purely a market-based recovery? Or were there some market share gains in there?

這是瑞安（Ryan）替亞歷克斯（Alex）發言。所以我的第一個問題是，我想深入了解 PEM 中的捲。很明顯，我認為銷量同比增長了 6%，環比增長了 4%。這是否純粹是基於市場的復甦？或者那裡有一些市場份額的增長嗎？

And then so far during 1Q, have you seen any aggressive pricing from competitors or like across the industry that may kind of hinder your volumes here, too?

到目前為止，在第一季度，您是否看到競爭對手或整個行業的同類公司採取激進的定價，這也可能會阻礙您的銷售？

Yes. PEM business, there are several in polyethylene PVC price announcements, and we got a $0.05 (inaudible) upon price increase in polyethylene in January and further price announcements we made, and the price announcement made in PVC as well.

是的。 PEM 業務方面，聚乙烯 PVC 有多個價格公告，1 月份聚乙烯價格上漲以及我們發布的進一步價格公告以及 PVC 的價格公告後，我們獲得了 0.05 美元（聽不清）。

So as you know, also, the springtime is a construction period. And with warm weather, a lot of activities are going on. And as we said, we are seeing momentum with HIP our customers operating orders so the momentum in the fourth quarter is carrying to the first quarter.

如您所知，春季也是施工期。隨著天氣溫暖，許多活動正在進行。正如我們所說，我們看到客戶的 HIP 訂單營運勢頭強勁，因此第四季度的勢頭將延續到第一季。

Great. That's helpful. And then just as you think about running your chlor-alkali facilities here in 1Q, what do you think operating rates are going to be? And then when you think about it for the balance of the year, anything you can quantify there would be helpful.

偉大的。這很有幫助。然後，正如您考慮在第一季運行氯鹼設施一樣，您認為開工率會是多少？然後，當你考慮今年剩下的時間時，任何你可以量化的東西都會有所幫助。

Yes. From some of the consultant study, that fourth quarter operating rates chlor-alkali in the U.S. is about 76%. And people are projecting -- well, it's down from 82% in third quarter, but people are projecting 2024 chlor-alkali running rates in the high 70s. So we are seeing some improvement. I think about half of the chlorine will go to PVC. So the PVC really drives the running rates for chlor-alkali running rates.

是的。根據一些顧問的研究，第四季美國氯鹼的開工率約為76%。人們預測——嗯，比第三季的 82% 有所下降，但人們預測 2024 年氯鹼運行率將在 70 左右。所以我們看到了一些改進。我認為大約一半的氯將轉化為 PVC。因此，PVC 確實推動了氯鹼的運行速度。

And our next question comes from the line of [Duffy Fisher] from Goldman Sachs.

我們的下一個問題來自高盛的[Duffy Fisher]。

First question is just around epoxy. When was the point of maximum pressure from Chinese imports into Europe last year has that stabilized? And do you think, you need to do anything with your physical footprint in Europe? Or is just the noncash write-down going to be sufficient?

第一個問題是關於環氧樹脂的。去年中國對歐洲進口的最大壓力是什麼時候穩定下來的？您認為您需要對您在歐洲的實際足跡做些什麼嗎？還是僅僅非現金減記就足夠了？

So Duffy, we saw that really begin to build in the second half of last year, that pressure. And that's really as we saw the imports continue to ramp up and put pressure on the European markets, and that really what is -- drove the impairment.

所以達菲，我們看到去年下半年這種壓力真正開始增加。事實上，我們看到進口繼續增加，給歐洲市場帶來壓力，而這確實推動了減損。

And we are seeing that -- maybe partially because of the Suez Canal, freight rates and everything else is that the import is reducing volume. And as a result, also European liquid epoxy resin prices start moving up.

我們看到，進口量正在減少，部分原因可能是蘇伊士運河、運費和其他因素。因此，歐洲液體環氧樹脂價格也開始上漲。

And we're taking certain -- certainly you could see from our prepared remarks, Duffy, that we're taking actions to manage our cost and become competitive in that marketplace so that while we -- we understand that the market needs to balance itself out, given the still weakness in Asia and European markets from a demand perspective, we're certainly being proactive in reducing our cost and being really focused to remaining competitive in that epoxy space.

我們正在採取某些措施——當然，你可以從我們準備好的演講中看到，達菲，我們正在採取行動來管理我們的成本並在該市場中保持競爭力，以便我們——我們明白市場需要自我平衡考慮到從需求角度來看亞洲和歐洲市場仍然疲軟，我們當然會積極地降低成本，並真正專注於在環氧樹脂領域保持競爭力。

Great. And then maybe just to go back to the 6% volume number from Q4. Can you break that out or at least tell us if some of the products within PEM were meaningfully different than that 6%? And how much of that was driven by domestic versus export volume?

偉大的。然後也許只是回到第四季 6% 的銷售數字。您能否詳細說明這一點，或至少告訴我們 PEM 中的某些產品是否與這 6% 有顯著差異？其中有多少是由國內與出口量所推動的？

Yes, there was a bigger move in some of the exports. And so in my comments, we talked about some of the product shift. And that product shift is really moving some of that PVC and caustic into the export markets. And certainly, the netbacks of those because of shipping duties and such, those netbacks are lower, but still attractive, and that's the volume pickup we saw was in caustic and PVC and PEM.

是的，有些出口出現了較大變動。因此，在我的評論中，我們討論了一些產品轉變。產品的轉變確實將部分聚氯乙烯和苛性鹼轉移到了出口市場。當然，由於運輸關稅等原因，這些淨值回升較低，但仍然具有吸引力，這就是我們看到的苛性鹼、PVC 和 PEM 的銷售回升。

And our next question comes from the line of [Salvator Tiano] from Bank of America.

我們的下一個問題來自美國銀行的[Salvator Tiano]。

So I wanted to come back to epoxies and I'm trying to see if you can a help me quantify what has been the impact versus when you gave some numbers a couple of years ago with your major acquisition? How much of that earnings power has been lost here? And also, what's kind of your view for epoxy earnings, either quantitatively or at least directionally in 2024 versus 2023? And also, are you seeing kind of an epoxy upward price pressure that some trade [vouchers] are reporting in Europe?

所以我想回到環氧樹脂，我想看看你是否可以幫助我量化與幾年前你在重大收購中提供的一些數字相比所產生的影響？這裡失去了多少獲利能力？另外，您對 2024 年與 2023 年環氧樹脂收益的看法如何，無論是數量上還是至少方向上？另外，您是否看到歐洲一些交易[優惠券]報告的環氧樹脂價格上漲壓力？

I would -- I was going to comment, as Albert noted earlier in his comments, certainly, some of the trade flows, because of the hostilities in the Middle East, Red Sea and the Panama Canal, certainly have given some buoyancy to pricing that we've seen across the product spectrum because of the higher cost.

我想——正如阿爾伯特早些時候在評論中指出的那樣，當然，由於中東、紅海和巴拿馬運河的敵對行動，一些貿易流動肯定給了定價一些支撐。由於成本較高，我們已經看到了各種產品。

And certainly, as I mentioned earlier, we've seen some buoyancy in overall pricing. So certainly, the markets here in the United States are stronger than they are in Europe because of the strength in the overall economies.

當然，正如我之前提到的，我們已經看到整體定價出現了一些上漲。因此，由於整體經濟的強勁，美國市場肯定比歐洲市場更強勁。

Okay. And if I may ask a little bit on the HIP guidance for 2024. I know that in your adjusted EBITDA, you do not actually got some of the restructuring items such as the $20 million you incurred in Q4.

好的。我想問一下關於 2024 年 HIP 指導的問題。我知道，在你們調整後的 EBITDA 中，你們實際上並沒有得到一些重組項目，例如第四季度發生的 2000 萬美元。

I'm wondering, do you have any substantial restructuring charges baked in the 20% EBITDA margin for 2024?

我想知道，2024 年 20% 的 EBITDA 利潤率是否包含任何重大重組費用？

Not at this stage. And so as I mentioned, the range of $4 billion to $4.4 billion revenue and the 20% margin that we've guided to is not reflective of any changes in restructuring costs that would flow through in '24. As I mentioned to an earlier question, the lower margin is purely a function of that we exited '23 with lower prices in our building products segment and we're seeing rising prices, some of those inputs such as in PVC.

不是現階段。正如我所提到的，我們指導的 40 億至 44 億美元收入範圍和 20% 的利潤率並沒有反映出 24 年重組成本的任何變化。正如我在先前的問題中提到的，利潤率較低純粹是因為我們在 23 年退出時建築產品部門的價格較低，而且我們看到價格上漲，其中一些投入品（例如 PVC）價格上漲。

So we'll see how that plays through. But given the fact that we're seeing an exit at lower price points and rising input costs such as in PVC, that could put some pressure on margins.

所以我們將看看它是如何發揮作用的。但考慮到我們正在以較低的價格退出，以及 PVC 等投入成本的上升，這可能會對利潤率造成一些壓力。

And our next question comes from the line of Mike Leithead from Barclays.

我們的下一個問題來自巴克萊銀行的 Mike Leithead。

Just on the litigation charge in the quarter, can you help clarify what this was related to? And is there an expected cash outlay associated with this charge at some point?

就本季的訴訟費用而言，您能幫忙澄清一下這與什麼有關嗎？這筆費用在某個時候是否會產生與此相關的預期現金支出？

Yes, Mike, it was related to an event in Louisiana, and we've disclosed this in our 8-K earlier this quarter as well as our 10-Q filings earlier last year. I do expect the outlays to be in the first half of this year.

是的，麥克，這與路易斯安那州的一次事件有關，我們已在本季度早些時候的 8-K 以及去年早些時候的 10-Q 文件中披露了這一點。我確實預計今年上半年會有支出。

Great. And then just second, briefly, I want to ask on Westlake Partners. Obviously, the distribution the share price has been relatively flattish for some time, where we now have a bit of higher interest rates and the like. Can you just talk about how the MLP fits within the overall Westlake strategy here going forward?

偉大的。其次，簡單地說，我想問一下 Westlake Partners 的問題。顯然，股價的分佈一段時間以來一直相對平坦，現在我們的利率等有所上升。您能否談談 MLP 如何融入 Westlake 的整體策略？

Sure, Mike. So the strategy here was always to raise capital at a value proposition that was greater than that of Westlake Corporation, and we've done that. We've raised about $500 million of capital -- equity capital in that manner. And so certainly, as we've seen the markets in the MLP space have been challenged. And certainly, in a structure as we have with higher interest rates, the MLP has yielded a higher yield. If we do see lower interest rates begin to materialize with the Federal Reserve potentially cutting rates later this year, I would expect that yield to decline and prices to rise. So we'll see how the Federal Reserve acts later this year, but certainly, that opportunity does exist.

當然，麥克。因此，這裡的策略始終是以高於西湖公司的價值主張籌集資金，我們做到了。我們已經透過這種方式籌集了大約 5 億美元的資本——股權資本。因此，正如我們所看到的，MLP 領域的市場確實受到了挑戰。當然，在利率較高的結構中，MLP 產生了更高的收益率。如果我們確實看到利率下降，Fed可能在今年稍後降息，我預計收益率會下降，價格會上漲。因此，我們將在今年稍後看到聯準會如何行動，但可以肯定的是，這種機會確實存在。

And our next question comes from the line of Arun Viswanathan from RBC Capital Markets.

我們的下一個問題來自加拿大皇家銀行資本市場 (RBC Capital Markets) 的阿倫·維斯瓦納坦 (Arun Viswanathan)。

So just trying to think about profitability, I guess, as you move forward into Q1. So when you look at the $390 million or so of EBITDA that was reported in Q4, how much of that decline sequentially from 3Q to Q4 would you attribute to seasonality? And are there any other discrete items in there that may reverse as you move into Q1?

因此，我想，當你進入第一季時，只是想考慮一下盈利能力。因此，當您查看第四季度報告的 3.9 億美元左右的 EBITDA 時，您認為從第三季到第四季的連續下降有多少是季節性造成的？當您進入第一季時，是否有其他離散項目可能會逆轉？

So Arun, we've seen prices almost across the spectrum on the chemical side of our business somewhat decline over the course of the -- from the end of the third quarter into the fourth quarter. But if you think about the price nominations that are out in the marketplace, with the $0.05 that was settled for polyethylene in January, we've got additional announcements for prices out for later this quarter. PVC has price nominations out. And we've seen some traction with prices that were nominated in fourth quarter going into effect in caustic for the first quarter.

因此，阿倫，我們看到從第三季末到第四季度，我們業務的化學品方面幾乎所有價格都有所下降。但如果你考慮市場上的價格提名，1 月份聚乙烯的價格為 0.05 美元，我們已經在本季稍後發布了更多價格公告。 PVC 的價格提名已出爐。我們已經看到了第四季度指定的苛性鹼價格在第一季生效的一些吸引力。

So when you think of the momentum we've seen in pricing initiatives, when you think of the volume because of the low inventory levels we see with our customer base, and the exiting, as you could see, our guidance in terms of exiting '23 with increases involved on the PEM side, which is counter to the typical seasonal behavior we see, those are all positive and constructive directions.

因此，當您想到我們在定價舉措中看到的勢頭時，當您想到由於我們的客戶群庫存水平較低而導致的銷量時，以及正如您所看到的，我們在退出方面的指導23 PEM方面有所增加，這與我們看到的典型季節性行為相反，這些都是積極且建設性的方向。

On the building products side, on HIP, we certainly also saw what I would characterize as a typical seasonal decline in volumes, and you see the guidance that we're providing for HIP in '24. So we remain constructive for the look forward ended 2024.

在建築產品方面，在 HIP 方面，我們當然也看到了我所描述的典型的季節性銷售下降，您可以看到我們在 24 年為 HIP 提供的指導。因此，我們對 2024 年的展望保持建設性的態度。

Okay. And then just a quick question on kind of integration levels. Would you characterize these opportunities set in front of you? How much do you think you still have in front of as far as debottlenecking or maybe other opportunities to increase your integration levels? And I guess -- where would you find that most as far as whether it be ethylene or maybe on the chlor-alkali side?

好的。然後是一個關於整合層級的簡單問題。您能描述一下擺在您面前的這些機會嗎？您認為您在消除瓶頸或提高整合水準方面還有多少機會？我想－你會在哪裡找到最多的物質，無論是乙烯還是氯鹼？

Yes, it's a good question. We have smart engineers. They always find ways to improve in debottleneck, and sometimes the debottleneck can be a bit more than the debottleneck. So we're currently looking at what opportunities we have, what the cost, what the benefit, depending on the cycle or part of the cycle, whether it's a good time to expand now, expand a bit later. That happens in PEM and also in HIP, we're looking at -- some of the rationalization is we have moved equipment from 1 region that's a slower growth to a region that's higher growth. So we are doing all the stuff to optimize our footprint in the HIP side as well.

是的，這是一個好問題。我們有聰明的工程師。他們總是找到改進的方法來消除瓶頸，有時，消除瓶頸可能比消除瓶頸更嚴重。因此，我們目前正在考慮我們擁有哪些機會，成本是什麼，收益是什麼，取決於週期或週期的一部分，是否是現在擴展的好時機，還是稍後擴展的好時機。這種情況發生在 PEM 和 HIP 中，我們正在研究 - 一些合理化是我們已將設備從增長較慢的區域轉移到增長較高的區域。因此，我們也在盡一切努力來優化我們在 HIP 方面的足跡。

And if I could just ask a similar follow-up on that. Just do you think, just given the utilization rates, I guess, in chlor-alkali that there's more high-cost capacity within your own system that could be rationalized or maybe some peers, I know there's been some rationalization from the largest peer in the industry. But how do you kind of characterize the supply-demand balance within caustic and chlorine as you look out for the next year or two?

如果我能就此提出類似的後續行動。你是否認為，考慮到氯鹼的利用率，我想，在你自己的系統內有更多的高成本產能可以合理化，或者也許一些同行，我知道最大的同行已經進行了一些合理化行業。但是，當您展望未來一兩年時，您如何描述苛性鹼和氯的供需平衡？

Yes, that's a good question. We constantly look at the productivity and cost position of our plans and where necessary, we should take actions. But one thing is that, as you have heard from our discussions, Westlake benefits from the integration from chlor-alkali to PVC to the HIP businesses. And those integration really helps to, as we said, when the upstream is better, we benefit from upstream and we can take the part as a downstream and vice versa. When downstream's better, we take benefit from downstream, we still keep our upstream running.

是的，這是一個好問題。我們不斷關注我們計劃的生產力和成本狀況，並在必要時採取行動。但有一點是，正如您從我們的討論中所聽到的，Westlake 受益於從氯鹼到 PVC 再到 HIP 業務的整合。正如我們所說，這些整合確實有幫助，當上游更好時，我們可以從上游受益，我們可以將該部分視為下游，反之亦然。當下游好一點的時候，我們從下游受益，我們仍然保持上游。

So those interactions are different from some other competitors of ours. And we're able -- by looking at the whole totality, not just at a unit by itself.

因此，這些互動與我們的其他一些競爭對手不同。我們能夠——透過著眼於整體，而不僅僅是一個單位本身。

And our next question comes from the line of Josh Spector from UBS.

我們的下一個問題來自瑞銀集團 (UBS) 的 Josh Spector。

First, I wanted to follow up on HIP pricing. So when you talk about the lower exit rate into '24, pricing in the quarter sequentially was actually a bit better than what we expected. So was there a reset in December, that would mean that we see a couple of percent lower? And when you talk about rising costs, PVC, et cetera, you passed a window where you think you can get additional pricing to offset that for next year?

首先，我想跟進 HIP 定價。因此，當您談論 24 年較低的退出率時，該季度的定價實際上比我們的預期要好一些。那麼 12 月是否有重置，這意味著我們會看到下降幾個百分點？當您談論成本上漲、聚氯乙烯等時，您是否已經過了一個窗口，您認為可以在明年獲得額外的定價來抵消成本？

No, Josh, I think -- if you think about the year-over-year change in prices, we certainly saw probably about a 10% reduction year-over-year in sales prices in HIP. And certainly, at the end of the year, prices were basically flat. And so I'm really comparing the average price of '23 to the exiting price at the end of '23 when I talk about the exiting price, really thinking about the average price as we go forward. Certainly, we have not got ourselves in a position where we're locked up for the year from a pricing perspective. So if we see continued good strength in volume growth, certainly, as I mentioned, we're seeing increased nominations in prices for inputs such as PVC. We do have the opportunity, given the demand picture, to be able to raise those prices. It'll be a function of really do we continue to see the strength in demand over the course of '24 that we're seeing in the early stages here of '24. If we do, obviously, we'll be able to take price action accordingly.

不，喬什，我認為 - 如果你考慮一下價格的同比變化，我們肯定會看到 HIP 的銷售價格同比可能下降了 10% 左右。當然，到了年底，價格基本上持平。因此，當我談論現有價格時，我實際上是將 23 年的平均價格與 23 年底的現有價格進行比較，並在我們前進時真正考慮平均價格。當然，從定價角度來看，我們今年還沒有陷入被鎖定的情況。因此，如果我們看到銷售成長持續強勁，正如我所提到的，我們肯定會看到 PVC 等投入品的價格提名增加。鑑於需求情況，我們確實有機會提高這些價格。這將取決於我們在 24 年早期階段所看到的在 24 年期間是否繼續看到需求強勁。如果我們這樣做，顯然我們將能夠採取相應的價格行動。

I appreciate that. And then just within PEM. When you talked about some of the volume strength, I mean, you keep alluding to more exports. So can you share roughly where your export mix was of PVC and caustic versus a normal fourth quarter? And how you expect that to trend over the next couple of quarters?

我很感激。然後就在 PEM 內。當您談到一些數量強度時，我的意思是，您一直在提到更多的出口。那麼，您能否大致分享一下您的 PVC 和苛性鹼出口組合與正常第四季相比的情況？您預計未來幾季的趨勢如何？

Yes. Our fourth quarter -- usually demand is lower in the PVC side, we export more than the third quarter. As a result, the average sales price has come down. But I think the ACC reported that PVC exports is about 37% in January. And I think 35% to 40% is the range that PVC industries been exporting.

是的。我們的第四季—通常 PVC 方面的需求較低，我們的出口量比第三季多。結果，平均銷售價格下降了。但我認為 ACC 報告 1 月 PVC 出口量約為 37%。我認為 35% 到 40% 是 PVC 產業出口的範圍。

And our next question comes from the line of Matthew Blair from TPH.

我們的下一個問題來自 TPH 的 Matthew Blair。

Albert, looking at this $3.3 billion of cash on the balance sheet, could you talk a little bit more about what you're seeing in the M&A market? Is deal flow picking up? And if you do a deal, are you more focused on opportunities in HIP than in PEM?

Albert，看看資產負債表上的 33 億美元現金，可以多談談您在併購市場中看到的情況嗎？交易流量正在回升嗎？如果您達成交易，您是否更專注於 HIP 中的機會而不是 PEM 中的機會？

Yes. That's a good question. Yes, we are seeing more ideas -- deals on banks, even though the deal flows have not really picked up, we've seen some industry announcements of people buying assets or companies in the HIP business.

是的。這是個好問題。是的，我們看到了更多的想法——銀行交易，儘管交易流量並未真正回升，但我們已經看到了一些行業公告，人們購買了 HIP 業務中的資產或公司。

And suddenly, for Westlake, we'll look at both sides, what makes the best economic return for Westlake through our synergies. So whether it's in PEM side or HIP side, we constantly look at deals and on a global basis, not just in the U.S., and when you add economic value to us, we'll take a hard look at those deals.

突然之間，對於西湖，我們將著眼於雙方，透過我們的協同效應為西湖帶來最佳的經濟回報。因此，無論是 PEM 方面還是 HIP 方面，我們都會在全球範圍內不斷關注交易，而不僅僅是在美國，當您為我們增加經濟價值時，我們會認真審視這些交易。

Sounds good. And then some of the consultants are showing PVC -- global PVC capacity growth this year, around 3%. Does that match up with your expectations? And would you expect global PVC demand growth to be stronger than 3% this year?

聽起來不錯。然後一些顧問顯示 PVC——今年全球 PVC 產能成長約 3%。這符合您的期望嗎？您預計今年全球 PVC 需求成長將超過 3%？

Yes. I think we believe capacity additions is really not that great. People talk about China, especially with the carbide process based on the moratorium of new build. And there's some ethylene-based PVC plants starting in China, but the cost is a lot higher from either on produced ethylene or imported EDC.

是的。我認為我們認為容量的增加確實沒有那麼大。人們談論中國，尤其是基於暫停新建的硬質合金製程。中國也有一些乙烯 PVC 工廠正在建設中，但無論是生產乙烯還是進口 EDC，成本都要高得多。

So I think global demand, that's the key question. And some of this is political macroeconomic related. And the other one, interest rate related. So we are blessed that the U.S. has, by far, the lowest cost position from low-cost ethane, ethylene and low-cost power to make chlor-alkali. So we're able to export, as we mentioned in our talk earlier, they're able to capture any opportunities that comes up for export. If the U.S. demand is out there, or not enough. So that's why we mentioned, in the fourth quarter, we did more export than second and third quarter, and we can still capture good cash contributions.

所以我認為全球需求是關鍵問題。其中一些與政治宏觀經濟有關。另一方面，與利率相關。因此，我們很幸運，美國迄今擁有低成本乙烷、乙烯和製造氯鹼的低成本電力的成本最低的地位。因此，我們能夠出口，正如我們在先前的談話中所提到的，他們能夠抓住任何出口機會。如果美國的需求存在，或者還不夠。這就是為什麼我們提到，在第四季度，我們的出口量比第二季和第三季要多，而且我們仍然可以獲得良好的現金貢獻。

And our next question comes from the line of Jeff Zekauskas from JPMorgan.

我們的下一個問題來自摩根大通的 Jeff Zekauskas。

Did epoxy profits meaningfully decrease sequentially?

環氧樹脂利潤季減嗎？

Yes. Jeff, it's Steve. Yes. And when you think of the profit contributions, they were continuing to decline over the second half of 2023. So sequentially, from 3Q to 4Q, they certainly declined and they declined from 2Q into 3Q. So there was a sequential decline over the course of the second half of the year.

是的。傑夫，我是史蒂夫。是的。當你想到利潤貢獻時，你會發現它們在 2023 年下半年持續下降。因此，從第三季度到第四季度，它們肯定下降，從第二季度下降到第三季度。因此，下半年出現連續下降。

Okay. And then in your earlier remarks, you highlighted the sequential decline in PEM as the result of lower caustic soda prices. So if that was the largest component, like order of magnitude, were they lower by $100 a ton in the quarter sequentially?

好的。然後在您之前的演講中，您強調了由於燒鹼價格下跌導致 PEM 連續下降。那麼，如果這是最大的組成部分，例如數量級，那麼本季的價格是否比上一季每噸下降了 100 美元？

Yes. I would think combination of caustic and as well as some PVC price drop. But you're right, I think caustic -- last year, they dropped materially over, I think, $300 for the whole year last year.

是的。我認為是腐蝕性和 PVC 價格下降的結合。但我認為你是對的——去年，我認為去年全年的價格大幅下降了 300 美元。

Every month, it dropped except, I think, in January or February now, we are seeing the first price increase. I think looking at -- according to CMA reported $5 a term price increase in February, and that's the first time for 14 months, that caustic price has not dropped, actually went up.

每個月，價格都會下降，但我認為，在一月或二月，我們看到了第一次價格上漲。我認為，根據 CMA 報告，2 月每期價格上漲 5 美元，這是 14 個月以來的第一次，苛性鹼價格不但沒有下降，反而上漲了。

Okay. And then in Housing and Infrastructure Products year-over-year in the fourth quarter, was that $53 million increase really fittings and pipes related? Or was it related more to the other parts of the HIP's business?

好的。然後，第四季度住房和基礎設施產品年增 5,300 萬美元，真的與配件和管道有關嗎？還是它與 HIP 業務的其他部分關係更大？

Yes. So Jeff, the contribution from both the pipe and fittings business and, frankly, our siding and trim business were strong in that period. So it's both pipe and fittings and siding and trim business.

是的。因此，傑夫，管道和配件業務以及坦率地說，我們的壁板和裝飾業務的貢獻在這一時期都很強勁。因此，這既是管道、配件、壁板和裝飾業務。

And then lastly, you talked about raw material cost inflation in HIPs. I don't think there's any raw material cost inflation in PVC. So where is the raw material cost inflation coming from in HIPs for 2024?

最後，您談到了 HIP 中的原物料成本通膨。我認為 PVC 原料成本不會上漲。那麼 2024 年 HIP 的原物料成本通膨來自何處？

Yes. So Jeff, I'm speaking to the PVC price nominations that we see that are out in February by all the producers at this stage. So Westlake and all the others have price nominations out for February. And so certainly, as we look forward, given the volume demand we're seeing in our downstream building products businesses. And we mentioned the strength that we're seeing as we exited 2023 into '24 in the building products side of our business, seen the pull on those products, which should pull on the PVC resin. And this is why we're seeing that pull and why we've seen price nominations by all the producers in the marketplace.

是的。傑夫，我正在談論我們看到現階段所有生產商在二月份公佈的 PVC 價格提名。因此，Westlake 和所有其他公司都已公佈了 2 月份的價格提名。因此，鑑於我們在下游建築產品業務中看到的大量需求，我們期待這一點。我們提到了當我們從 2023 年退出到 24 年時，我們在建築產品業務方面看到了強勁的勢頭，看到了這些產品的拉力，這應該會拉動 PVC 樹脂。這就是為什麼我們看到這種拉力，以及為什麼我們看到市場上所有生產商都提名價格。

But you're -- so what you're saying is that the margins because you transfer at marked market from PEM, the margins in HIPs will be pushed down and the margins in PEM will be pushed up, all things being equal. Is that right?

但是你 - 所以你所說的是，由於你在標記市場上從 PEM 轉移，HIP 的利潤將被壓低，而 PEM 的利潤將被推高，所有條件都相同。是對的嗎？

Correct.

正確的。

And our next question comes from the line of Richard (inaudible) Wells Fargo.

我們的下一個問題來自理查德（聽不清楚）富國銀行。

Great. First, on the HIP segment. Just wondering about the competitive landscape, the 11% year-over-year volume growth. Does that reflect any market share gains within the product lines? And where are you seeing the strongest increase in prices?

偉大的。首先是HIP部分。只是想知道競爭格局，銷量較去年同期成長 11%。這是否反映了產品線內市場佔有率的成長？您認為哪裡的價格漲幅最強勁？

So we've seen some good traction really with our customer base. You've seen us make many references to the portfolio and the brands that are associated with that portfolio. And so having a nationwide footprint and a broad and strong product offering allowed us to really make good contributions in market share gains and certainly building relationships with many of these distributors who are servicing many of the nationwide homebuilders is really where we're seeing good traction.

因此，我們確實看到了我們的客戶群的一些良好吸引力。您已經看到我們多次提及產品組合以及與該產品組合相關的品牌。因此，擁有全國性的足跡和廣泛而強大的產品供應使我們能夠真正為市場份額的增長做出良好的貢獻，當然，與為全國許多住宅建築商提供服務的許多經銷商建立關係確實是我們看到良好吸引力的地方。

Okay. Great. And then on the pricing side, are you seeing a more competitive pricing landscape? Or is that just pricing pressure, given lower housing starts and the weaker macro outlook year-over-year? .

好的。偉大的。然後在定價方面，您是否看到更具競爭力的定價格局？或者，考慮到房屋開工率下降和宏觀前景同比疲軟，這只是價格壓力？ 。

I would say, we've been able to really maintain, and you saw this in the fourth quarter relative to the third quarter, pricing was relatively flat in HIP. And so I would say that we were able to maintain pricing in -- sequentially from 3Q to 4Q, as we pull into the first quarter of '24, continuing to see good volume and certainly trying to then be the beneficiary of that volume pull, my guidance, and we've talked about this in a couple of the other questions, that we do have some price nominations out for PVC resin. And so certainly, if we see strength in PVC demand-related products, siding, trim, shutters and other applications, we will certainly try to not pass those higher prices, certainly try to pass those higher prices through and not get caught in a margin compression, but we'll see how the market demand-wise plays through. .

我想說的是，我們已經能夠真正維持，並且你在第四季度看到了相對於第三季度的情況，HIP 的定價相對持平。因此，我想說，當我們進入 24 年第一季時，我們能夠連續從第三季度到第四季度維持定價，繼續看到良好的銷量，並且肯定會努力成為銷量拉動的受益者，我的指導，我們已經在其他幾個問題中討論過這一點，我們確實有一些PVC 樹脂的價格提名。因此，當然，如果我們看到PVC 需求相關產品、壁板、裝飾、百葉窗和其他應用的強勁勢頭，我們肯定會盡力不接受更高的價格，當然會盡力不接受更高的價格，而不是陷入利潤困境壓縮，但我們將看看市場需求如何發揮作用。 。

And our next question comes from the line of Vincent Andrews from Morgan Stanley.

我們的下一個問題來自摩根士丹利的文森特安德魯斯。

This is Turner Hinrichs on for Vincent. I'm wondering if you could provide an update on what you're seeing for inventory levels among customers and where you're expecting tailwinds from restocking mentioned in your prepared remarks?

我是特納辛里奇 (Turner Hinrichs) 替補文森特 (Vincent)。我想知道您是否可以提供有關您所看到的客戶庫存水平的最新信息，以及您預計在準備好的評論中提到的補貨將帶來哪些好處？

Yes. Talking about PEM customers or HIP customers?

是的。談論 PEM 客戶還是 HIP 客戶？

In particular, the -- whichever channels we're seeing the restocking mentioned, but PEM would be of interest in particular.

特別是，無論我們看到提到的補貨管道是什麼，但 PEM 都會特別令人感興趣。

Yes. I think as you can tell, when prices come -- came down and demand came down last year, customers tend to be -- have low inventory levels and they order -- only order when they need products. And so over year-end, also they don't need to carry inventories. So as we come into January, February of this year, customers are starting to order to their demand. And so we are seeing the orders going up.

是的。我認為正如你所知，當去年價格下降和需求下降時，客戶往往庫存水平較低，他們只在需要產品時才訂購。因此到了年底，他們也不需要持有庫存。因此，當我們進入今年一月、二月時，客戶開始根據他們的需求訂購。所以我們看到訂單在增加。

But I think inventory is still -- customer is very cautious they are still keeping relatively low to medium levels of inventory. And that's true also for the HIP side. And -- but as you know, this is the good material construction starting -- usually starting from March is the season people start increasing construction. And with the warmer weather, people stop it earlier. So I think they are just ordering to meet the demand, make sure they have good -- they have the products because if you miss 1 item, the house is not complete. So they want to make sure they have all the items delivered to the site, that they he can put a house together relatively quickly.

但我認為庫存仍然——客戶非常謹慎，他們仍然保持相對較低到中等的庫存水準。對於 HIP 方面也是如此。而且 - 但如你所知，這是一個好的材料建設開始 - 通常從三月開始是人們開始增加建設的季節。而且隨著天氣變暖，人們會提前停止。所以我認為他們只是為了滿足需求而訂購，確保他們有好的產品——他們有產品，因為如果你錯過了一件物品，房子就不完整。因此，他們希望確保將所有物品運送到現場，以便他們可以相對快速地建造房屋。

I'm also wondering you do provide a little additional color on your outlook for the caustic soda industry and prices during 2024? I was wondering specifically also whether or what you're expecting in the first quarter in terms of price and volume, and whether the increase you saw in caustic soda prices was driven by trade and freight dynamics from your perspective or underlying supply and demand?

我還想知道您是否對 2024 年燒鹼行業和價格的前景提供了一些額外的資訊？我還特別想知道您對第一季價格和數量的預期是否或如何，以及從您的角度或潛在的供需角度來看，您看到的燒鹼價格的上漲是否是由貿易和貨運動態推動的？

Yes. I think supply-demand has improved. I think we see some pulp and paper plants are running harder and they're ordering caustic and chlorine.

是的。我認為供需有所改善。我認為我們看到一些紙漿和造紙廠的運作更加困難，他們正在訂購苛性鹼和氯。

I mentioned earlier, the CMA's forecast for operating rates for chlor-alkali in the U.S. are running in the high 70s, which is okay, but not great. So this is their forecast now, things could change. But I think also, export prices started moving up. And again, the consultants, CMA looking at $5 increase in February and April 10 and May is 5. Now, the industry that we have announced the price increase and other companies announced pricing increase more than what CMA has announced. And time will tell how much of our industry announcement will get put in place, but it's a substantially higher price increase announced by the industry.

我之前提到過，CMA 對美國氯鹼開工率的預測在 70 左右，這還不錯，但不是很好。所以這就是他們現在的預測，情況可能會改變。但我認為出口價格也開始上漲。再說一遍，顧問們，CMA 預計2 月和4 月10 日漲價5 美元，5 月漲價是5 美元。現在，我們宣布漲價的行業和其他公司宣布的漲價幅度比CMA 宣布的還要多。時間會告訴我們我們的產業公告將落實多少，但業界宣布的價格上漲幅度要大得多。

And our next question comes from the line of Kevin McCarthy from Vertical Research Partners.

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

With regard to your PVC production in 2023, I was wondering if you might be willing to split it into 3 buckets? Those would be the amount or percentage that you used internally in HIP versus U.S. domestic sales versus export sales. How would you size each of those?

關於你們2023年的PVC產量，我想知道你們是否願意將其分成3個桶子？這些將是您在 HIP 中內部使用的金額或百分比與美國國內銷售與出口銷售的比較。您將如何確定其中每一個的大小？

Yes, Kevin, it's Steve. Because we're using a lot of that PVC resin really in our Building Products business, roughly 1/4 of that is going into the building products business into the HIP business, and the remaining 75% of that is sold either domestic or international, because we are selling so much of that 25% domestically, our mix relative to industries, therefore, is going to be a lower mix of exports relative to the industry average.

是的，凱文，我是史蒂夫。因為我們在建築產品業務中確實使用了大量 PVC 樹脂，其中大約 1/4 進入建築產品業務並進入 HIP 業務，其餘 75% 在國內或國際銷售，因為我們在國內銷售了25% 的大部分產品，因此我們相對於產業的出口組合將低於產業平均值。

So obviously, to the extent that we see the strong markets, domestically, we'd rather sell it domestically versus export. And that really -- that percentage is always going to be lower than industry average because of that domestic -- that internal sale. But I would say we certainly focus on the domestic market as much as we can and pivot to the export markets when there's seasonal elements at play such as in the fourth quarter those exports tend to be higher. And certainly, it's also a function of how strong the domestic market is. So it's hard to give you a hard and fast percentage of domestic or export per se.

顯然，就我們看到國內市場強勁而言，我們寧願在國內銷售，也不願出口。事實上，由於國內的內部銷售，這個百分比總是低於行業平均值。但我想說，我們當然會盡可能關注國內市場，並在季節性因素發揮作用時轉向出口市場，例如第四季出口往往會更高。當然，這也取決於國內市場的強度。因此，很難為您提供國內或出口本身的硬性且快速的百分比。

Understood. That's helpful. And then just coming back to the caustic soda discussion. Would you expect your average selling prices in the first quarter relative to the fourth quarter of 2023 to be higher or lower or roughly the same?

明白了。這很有幫助。然後回到燒鹼討論。您預計 2023 年第一季的平均售價與第四季相比會更高、更低還是大致相同？

You were asking about the average selling price for caustic in the first quarter versus the fourth quarter of 2023?

您詢問的是 2023 年第一季與第四季的苛性鹼平均售價嗎？

Yes, that's correct. 1Q is obviously more than halfway done. So just kind of curious if you look at your books for the next 6 weeks or so, you referenced some of the uptick in caustic prices in February. So one could argue, perhaps we're coming off the bottom a little bit. But if I just think about that sequential move from 4Q into 1Q, do you think the result might be materially different in terms of your realized price for caustic?

對，那是正確的。 1Q 顯然已經完成一半以上了。因此，如果您查看未來 6 週左右的書籍，您會感到好奇，您提到了 2 月苛性鹼價格的一些上漲。所以有人可能會說，也許我們正在稍微走出谷底。但如果我只考慮從第四季到第一季的連續變化，您認為就苛性鹼的實際價格而言，結果可能會有重大不同嗎？

Well, the -- according to CMA, fourth quarter last year 2023, caustic price domestically dropped by $60 a ton. And I said earlier, CMA looking at $5 increase in February and then $10 in April.

嗯，根據 CMA 的數據，2023 年第四季度，國內苛性鹼價格每噸下跌了 60 美元。我之前說過，CMA 預計 2 月上漲 5 美元，然後 4 月上漲 10 美元。

So the average price will be lower in 1Q. I just want to make sure you were talking about 4Q versus 1Q '24. Clearly, with the decline in price we've seen through '23, the average price in '24 will be lower than the fourth quarter average price in '23. .

所以第一季的平均價格會更低。我只是想確保您談論的是 24 年第四季度與第一季。顯然，隨著我們在 23 年看到的價格下降，24 年的平均價格將低於 23 年第四季的平均價格。 。

And our next question comes from the line of David Begleiter from Deutsche Bank.

我們的下一個問題來自德意志銀行的 David Begleiter。

Albert, how do you expect ethylene chain margins to progress through 2024?

Albert，您預計 2024 年乙烯鏈利潤率會如何發展？

That's a good question. As I said earlier, there are price increase, we have $0.05 a ton price increase achieved in January, and there are price increase announced for February, and 1 industry participant announced the price increase for March.

這是個好問題。正如我之前所說，有漲價，1月份我們實現了每噸0.05美元的漲價，2月份也有漲價的消息，有1個行業參與者宣布了3月份的漲價。

And so we are seeing some improvements in export price. So we believe that some part of the price increase will go through, but in the first quarter, a lot depending on global economy, supply demand, macroeconomics and also the Red Sea, Suez Canal issues and Panama Canal, when will it be settled or subside issues. So all these have to come into play in terms of our pricing and volumes moving international trade. As you know, in polyethylene, the U.S. exports a large quantity, I think close to about 50% plus or minus of total USP produced and exported. So export is a big component of it.

因此，我們看到出口價格有所改善。所以我們認為部分漲價將會經歷，但在第一季度，很大程度上取決於全球經濟、供應需求、宏觀經濟以及紅海、蘇伊士運河問題和巴拿馬運河，什麼時候能解決或平息問題。因此，所有這些都必須在我們的定價和國際貿易量方面發揮作用。如你所知，美國出口大量聚乙烯，我認為接近 USP 生產和出口總量的 50% 左右。所以出口是其中一個重要的組成部分。

So all these dynamics, it's difficult to forecast what would happen. But we believe, at least domestically, in the first quarter, things should be better. And we mentioned earlier, that with lower price of natural gas and ethane, the ethane-based production costs should be low if you have polyethylene price increase, the margin should improve.

因此，所有這些動態，很難預測會發生什麼。但我們相信，至少在國內，第一季情況應該會更好。我們先前提到，隨著天然氣和乙烷價格較低，乙烷生產成本應該較低，如果聚乙烯價格上漲，利潤率應該會提高。

Got it. And adjusting your cost savings in '23 and '24, how much will come from epoxy?

知道了。調整 23 年和 24 年節省的成本，環氧樹脂將帶來多少成本？

Proxy is not a big part of the Westlake's business. And we're talking about -- the problem was the (inaudible) Netherlands plant epoxy that we have problems with. And you heard also, we are doing substantial cost reduction programs to make the system better and -- but still Asian exports to Europe and is a big issue of keeping prices low. But epoxy as a whole is a small part of Westlake's business.

代理並不是西湖業務的重要組成部分。我們正在談論 - 問題是我們所使用的（聽不清楚）荷蘭工廠環氧樹脂存在問題。您還聽說，我們正在實施大量成本削減計劃，以使系統變得更好，但亞洲仍然向歐洲出口，這是保持低價的一個大問題。但環氧樹脂整體而言只是 Westlake 業務的一小部分。

And David, just maybe to give you a broader understanding of that savings over the course of '24, I would guide to probably 3 quarters or so of that would probably be on the PEM side of the business and the other 25% probably be on the HIP side of the business. So you have an understanding of the relative expected mix of that savings of $125 million to $150 million that we expect to benefit from.

David，也許只是為了讓您對 24 年期間的節省有更廣泛的了解，我建議其中大約 3 個季度可能會用於業務的 PEM 方面，另外 25% 可能會用於業務的 PEM 方面。業務的HIP方面。因此，您可以了解我們預計將從中受益的 1.25 億至 1.5 億美元節省的相對預期組合。

And our next question comes from the line of Hassan Ahmed from Alembic Global Advisors.

我們的下一個問題來自 Alembic Global Advisors 的 Hassan Ahmed。

A question around the chlor-alkali markets. Over the last couple of years, I mean, certainly since the end of 2020, the virtue of sort of the chlor-alkali story had been a high degree of discipline, particularly in the North American market. right? And obviously, that resulted in decent sort of pricing growth, margin growth and the like. And then obviously, we started seeing destocking over the course of the last couple of quarters, and some pricing and margin erosion, right? And we all talked about sort of operating rates in North America being relatively depressed, but demand beginning to pick up.

關於氯鹼市場的問題。我的意思是，在過去的幾年裡，當然從 2020 年底開始，氯鹼故事的優點是高度的紀律，特別是在北美市場。正確的？顯然，這帶來了不錯的定價成長、利潤成長等。顯然，我們在過去幾個季度開始看到庫存減少，以及一些定價和利潤下降，對吧？我們都談到北美的開工率相對低迷，但需求開始回升。

Now, one of your larger competitors out there has been pretty vocal about potentially ramping up utilization rates February onwards. So my question to you is, what gives you confidence that the industry will continue to remain disciplined, particularly keeping in mind operating rates, I think you alluded to them being around 70%, and you holding on to pricing or maybe even gaining some?

現在，您的一個較大的競爭對手已經非常直言不諱地表示可能會從二月份開始提高利用率。所以我問你的問題是，是什麼讓你相信該行業將繼續保持紀律，特別是考慮到開工率，我認為你提到過開工率在70% 左右，並且你堅持定價，甚至可能獲得一些收益？

Yes. Very good question. And I think a big part was export price. When export prices was high then the U.S. enjoyed also high domestic price. But export price start to decline pretty sharply, 2023. And so U.S. domestic market has to respond. And we are seeing signs that the export price stabilize and start moving up a little bit. So I think the economics have -- whether it's going to the alumina business or pulp and paper, as we said earlier, we see some sign of improvement and demands increasing international caustic market.

是的。非常好的問題。我認為很大一部分是出口價格。當出口價格高時，美國的國內價格也高。但到 2023 年，出口價格將開始大幅下降。因此美國國內市場必須做出反應。我們看到出口價格穩定並開始小幅上漲的跡象。因此，我認為經濟狀況已經——無論是氧化鋁業務還是紙漿和造紙業務，正如我們之前所說，我們看到了一些改善的跡象，並且國際苛性鹼市場的需求不斷增加。

There's not a huge amount of capacity added globally. It's really a demand issue, not a supply issue. And hopefully, as economics improves globally and also China's economy improves, we are hearing that the government in China is trying to, again, stimulate its construction business after the New Year's over, only time will tell what kind of initiatives they will have. If the global economy stabilizes and continue to recover and grow and lower interest rate, it will help caustic -- caustic is such a broad industrial chemical, it's used -- it goes into many, many segments of our economy, consumer, industrial, investment, all that.

全球新增產能並不多。這其實是需求問題，而不是供給問題。希望隨著全球經濟的改善以及中國經濟的改善，我們聽說中國政府正試圖在新年結束後再次刺激其建築業務，只有時間才能告訴我們他們將採取什麼樣的舉措。如果全球經濟穩定並繼續復甦、成長和降低利率，這將有助於苛性鹼——苛性鹼是一種廣泛的工業化學品，它的用途——它進入我們經濟的許多領域，消費、工業、投資，所有這些。

So it's a bellwether of the global economy. And we hope this year, things will bottom out, or last year, bottom out and getting better. So we are optimally cautiously optimistic on caustic market, but a lot of things could happen.

因此，它是全球經濟的風向標。我們希望今年情況會觸底，或者去年，情況會觸底並變得更好。因此，我們對苛性鹼市場持謹慎樂觀的態度，但很多事情都可能發生。

Fair enough. And as a follow-up on the PVC side of things, you touched on China earlier. I mean, let's assume for a second that there is no stimulus in China. Obviously, barring that, I'd like to think that the Chinese market is quite long PVC.

很公平。作為 PVC 方面的後續行動，您早些時候談到了中國。我的意思是，讓我們假設中國沒有刺激措施。顯然，除此之外，我認為中國市場的 PVC 市場相當多。

So what are you guys seeing in terms of trade flows out of China, on the PVC side in particular? And barring a stimulus, could that be a risk maybe potentially even to domestic U.S. pricing if China ramps up exports?

那麼，你們對中國流出的貿易流量（尤其是聚氯乙烯方面）有何看法？除非採取刺激措施，如果中國增加出口，這甚至可能對美國國內定價構成風險嗎？

Yes. I think as I said earlier, China's PVC, 80% is on the carbide based, it's not welcomed maybe on South Asia maybe or South Asia, but you don't have carbide PVC going to Europe or go into North America.

是的。我想正如我之前所說，中國的PVC，80％是基於硬質合金的，它可能在南亞或南亞不受歡迎，但你沒有硬質合金PVC進入歐洲或進入北美。

So -- and there's a moratorium on new build. So really, it's existing demand, existing capacity, that's the problem in China as Chinese infrastructure and residential improves, then the demand PVC will improve. But we've seen last year, Chinese PVC exports, as I said, to South Asia and South Asia. But we are seeing a big slowdown because the Chinese government are trying to really reduce carbon emissions and pollutions and the double control from GDP -- carbon emissions per GDP by cities and province are really -- people are watching carefully. And so we don't expect the Chinese PVC be flooding the market. And then also, still a high cost. Energy is still higher cost in the U.S.

所以——新的建設被暫停了。所以實際上，這是現有的需求、現有的產能，這就是中國的問題，隨著中國基礎設施和住宅的改善，PVC 的需求將會改善。但正如我所說，去年我們看到中國PVC出口到南亞和南亞。但我們看到經濟大幅放緩，因為中國政府正在努力真正減少碳排放和污染，以及GDP的雙重控制——城市和省份的單位GDP碳排放量確實是——人們正在密切關注。因此，我們預期中國 PVC 不會大量湧入市場。而且，成本仍然很高。美國的能源成本仍然較高

Fair enough. And since I have you, one last one, if I could squeeze it in. Just you talked about sort of lower margins, Q3 to Q4, primarily on sort of higher export demand in PVC and caustic. And obviously, that coincided with all the sort of shipping related cost escalation that had happened on the back of the Red Sea. I mean, did that play a material role in some of the margin squeeze that you guys saw in those 2 product areas in particular?

很公平。既然我有你，最後一個，如果我能擠進去的話。剛才你談到了第三季到第四季的利潤率較低，主要是由於 PVC 和苛性鹼的出口需求較高。顯然，這與紅海背面發生的所有與運輸相關的成本上升同時發生。我的意思是，這是否在你們特別看到的這兩個產品領域的一些利潤擠壓中發揮了重大作用？

You're absolutely right. The shipping freight rates, we heard increased by $200 to $300 a ton. That could be even higher. And also delayed route arrival. It's really impacted the global trade. And since we're talking about Asia exports to Europe and some to the U.S., it has stopped or slowed down a lot of that. And I think that helped also supporting price increase as we said in our remarks, going up.

你是絕對正確的。據了解，海運運費每噸上漲了 200 至 300 美元。那可能會更高。並且還延遲了航線到達。這確實影響了全球貿易。由於我們談論的是亞洲對歐洲的出口以及一些對美國的出口，因此它已經停止或減緩了許多出口。我認為這也有助於支持價格上漲，正如我們在演講中所說的那樣，上漲。

One moment for our next question. And our next question comes from the line of (inaudible) from Bank of America.

請稍等一下我們的下一個問題。我們的下一個問題來自美國銀行（聽不清楚）。

Just wanted to check, essentially, you're pretty much saying that your HIP guidance, about 20% EBITDA margin, it's contingent on the $0.05 per pound PVC price increase. So I'm wondering, if that doesn't go through or if price overall for the year don't increase as much, how much would that benefit HIP earnings on the expense of PEM earnings?

只是想檢查一下，本質上，您幾乎是在說您的 HIP 指導，即約 20% 的 EBITDA 利潤率，取決於每磅 PVC 價格上漲 0.05 美元。所以我想知道，如果這沒有發生，或者今年的總體價格沒有上漲那麼多，那麼以 PEM 收益為代價，HIP 收益會有多少收益？

So as I indicated, I think that the guidance that we provided is reflective of our outlook today. Certainly, if we don't see that strength in PVC that raised that price, we haven't seen reductions in building products prices at the end of the year. You saw that they were relatively flat. So the contribution, really, to the HIP side of the business should continue to be constructive. Obviously, we're more heavily weighted on the PVC side. So obviously, while there is benefit of having lower input costs, we have more heavily weighted volume in PVC than we do in the building products using that PVC. So it would be more constructive to get that price nomination of PVC accrued for the -- when you think of the whole of Westlake.

正如我所指出的，我認為我們提供的指導反映了我們今天的前景。當然，如果我們沒有看到 PVC 的強勢導致價格上漲，那麼我們就沒有看到年底建築產品價格下降。你看到它們相對平坦。因此，對業務 HIP 的貢獻實際上應該繼續是建設性的。顯然，我們更看重 PVC 方面。顯然，雖然降低投入成本有好處，但我們的 PVC 重量比使用該 PVC 的建築產品的重量更大。因此，當你想到整個西湖時，獲得 PVC 的價格提名會更具建設性。

This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Jeff for any further remarks.

今天節目的問答環節到此結束。我想將程式交還給傑夫以供進一步評論。

Thank you. Thanks again for participating in today's call. We hope you'll join us again for our next conference call to discuss our first quarter 2024 results.

謝謝。再次感謝您參加今天的電話會議。我們希望您能再次參加我們的下一次電話會議，討論我們 2024 年第一季的業績。

Thank you for participating in today's Westlake Corporation Fourth Quarter and Full Year Earnings Conference Call. As a reminder, this call will be available for replay beginning 2 hours after the call has ended. The replay can be accessed via Westlake. Goodbye.

感謝您參加今天的 Westlake Corporation 第四季和全年財報電話會議。請注意，此通話將在通話結束 2 小時後開始重播。可以透過 Westlake 存取重播。再見。