Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| So we feel really, really good about that |
| That sets us up well for strong returns on this investment |
| On the specialty side, we have demonstrated great pricing power around our specialty products and managing the price to variable cost ratio really well and keeping those ratios stable |
| We are very excited about our innovation portfolio |
| And if we don't get those contracts, as we've said, we won't build the plants, but we're getting the contracts and we're feeling good about it |
| As we told you from the beginning, the approach we're taking with this plant is to be more of an industrial gas type project in how we deliver very stable margins and attractive margins when you look at the economics for these projects |
| So we're really excited to sort of chuck all those boxes, keep going forward with this plan, use it to help improve earnings next year in a difficult environment, and get these next two projects underway and create a lot of value for our owners |
| So we're feeling really good on the feedstock side here |
| We've had great success with premium interlayers delivering a lot of value with the growth in the automotive market and extreme leverage of 3.5 times the material per car in EVs versus ICE cars |
| So that's a great business and we'll continue to deliver above market growth |
| We've got the Aventa products we've been telling you about where we've had great success, [adoptions and straws] (ph) and some brands going national as well as now, making great progress in our polystyrene replacement for protein packaging and food packaging, et cetera |
| So we feel very good about our cash earnings and how we're doing in this environment, as well as how we look forward to the future |
| And we feel good about how that's going to work |
| We've been able to manage the increase for the Kingsport methanalysis within that disciplined budget that we've been able to demonstrate through the year |
| And of course, we're pursuing these additional incentives for both projects as I discussed earlier and obviously if we get those, that's going to help manage capital risk, as well as improved returns |
| As we think about longer-term in both increasing the percentage of Eastman that specialty, as well as the highest and best use, INEOS is the best owner for that |
| So we feel good that we can come up with a high quality estimate for the next two projects and we can manage the construction process far better than what happened in Kingsport |
| So we feel great, and the incremental margins will be impressive because we're going to keep the cost structure flat |
| That allows us to command a better premium than mechanical and support our economics |
| We saw great success in over $500 million of cash generated in the third quarter by the actions we took |
| And they're just very impressed that we can take that garbage and turn it into a clear food grade quality pellet |
| So the incremental margins on the recovery are going to be quite strong |
| So we've got great flexibility that's created a huge amount of value and makes upgrade over the last decade as we grew Triton on the same assets that once made PET over a decade ago |
| It's an outstanding story when you see these huge piles of garbage, multi-colored garbage, all kinds of types of garbage that we're taking and running through our process and coming out with a clear pellet |
| Part of what we did in our tow contracts is, improve our pricing, obviously, to get our margins back to being able to reliably supply our customers, because this is an extremely valuable product for them and reliability is a priority for them |
| So we're pretty excited about focusing on all these actions that we can control on this uncertainty and delivering success for our owners |
| So all those factors put together, delivers quite a bit of improvement in earnings and earnings from -- our operating in the cash side as well |
| It's not perfect, but it's a significant improvement from where we were in the past |
| And as we gained momentum and seeing how the contracts and the contract structures were working, we just reconfirmed that as we grew the earnings and grew the confidence by year end |
| I would say the teams have done a phenomenally good job of holding prices at very high levels in this very challenging market that's created a lot of improvement in our price to variable cost ratio, offsetting some of the volume challenges |
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| And the biggest driver, of course, in the decline in earnings this year was volume and mix |
| So that's a lot of the compression that we're facing due to just excess amount of capacity being added, as well as very low demand in a number of applications that use propylene |
| The capital headwinds that we encountered in the project here in Kingsport were really isolated to construction quality and productivity issues around pipe installation |
| And then you've got a lot of these stable markets that are going to have some amount of very modest growth in the sort of packaging, medical, all we're going through this year is a decline in demand in medicals |
| So the only thing that you're going to see is reduced sales of acetyls out of the Texas City site within chemical intermediates |
| It's a very challenging market situation right now in olefins |
| So we've seen difficult demand environments in 2009, in 2020, but those were over three quarters in 2009 and two quarters in 2020 |
| So all those products are obviously are impacted by oil and overall market dynamics and creating some headwinds as those are increasing, especially from the oil change |
| And that's just a lack of destocking |
| I would note that China has been a challenge all year long, so we haven't seen the growth we expected |
| And sequentially, as Mark has highlighted, it was a $75 million headwind to Q2 |
| So, durables is down 40% in the fourth quarter of last year, it was even worse in the first quarter, came back 30% in the second quarter relative to the first and another 15% back in the third quarter |
| Mark, Advanced Materials has had a difficult 2023 on the backs of a difficult 2022 where you're now expecting 2023 to come in below $400 million of EBIT |
| I don't know where currency will go next year, so that could be up or down, but it's a significant headwind this year when you think about -- looking at the total decline |
| The first is, obviously, a lack of destocking |
| So there will be, I call it, a gain loss from asset returns as well as interest rates |
| There's obviously a lot of construction -- traditional chemical construction activity uncertainty, especially with [TNT] (ph) plants in China where a lot of these fills go |
| So, if you think about this year, just as context before we get to next year, the extremity of the demand decline was more than anything we've ever seen before |
| And as you saw in our guidance, we're being pretty cautious about where the markets might go |
| And that's particularly impacting our performance films business, which is an important business in China and we're not seeing sort of the growth that we expected there and even some contraction right now at the sales level in some parts of that Chinese business |
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