14-03-2023

LyondellBasell launches new company strategy

LyondellBasell hosts its Capital Markets Day today at the New York Stock Exchange and is introducing its new long-term strategy which is aligned with the company's purpose of creating solutions for everyday sustainable living. The company expects to accelerate growth, expand margins and improve returns through its technology leadership, sustainable solutions, and sharp focus on favorable positions in attractive global markets. LyondellBasell is positioning itself to be the company of choice for financial, environmental, social and governance (ESG) minded investors, customers and brand owners. The company is doing this by shaping its businesses to use plastic waste as a valuable source of carbon and creating products and sustainable solutions using circular and renewable materials to address demand.

The new LyondellBasell strategy focuses on growing sustainable value and encompasses three key elements:
1. Growing and upgrading the core: Growth will be focused on businesses where LyondellBasell has leading positions in expanding and well-positioned markets.
2. Building a profitable Circular & Low Carbon Solutions (CLCS) business: LyondellBasell expects CLCS to grow to at least $1 billion in incremental EBITDA by 2030 with attractive returns by leveraging the company's existing strengths of scale, market access and technology leadership.
3. Stepping up performance and culture: The company will drive improved results by shifting from a singular focus on cost control to a more comprehensive view of value creation and  customer centricity.
The company's strategy is enabled by a value enhancement program (VEP) that is expected to deliver at least $750 million of recurring annual EBITDA improvement by year-end 2025. The VEP expands capacity through low-cost debottlenecks and improved reliability, reduces costs and emissions by saving energy, and increases margins through improvements in procurement, logistics and customer service.

"Our products are an essential part of a safe, healthy and more sustainable living, and I am confident our new strategy will unlock the true potential of our company," said Peter Vanacker, LyondellBasell CEO. "Our strategy is differentiated by our ability to effectively execute these three impactful elements all at once, driven by our passionate people and enabled by our technology leadership, our exceptional cash generation and strong balance sheet. We believe our core businesses have lasting advantages, and we will grow our advantage through highly focused and disciplined reinvestment. This will deliver strong profitable growth and deliver compelling returns to our shareholders."

While the new strategy was announced today, LyondellBasell began taking action on its new strategy in 2022 by:
* acting decisively to exit the refining business and divest its Australian polypropylene business;
* improving customer focus by forming its Customer and Commercial Excellence team;
* establishing the CLCS leadership role and business;
* implementing and expanding its VEP; and
* taking significant steps forward in its journey to reduce greenhouse gas emissions.
While LyondellBasell intends to cease refining operations at its Houston Refinery, the company is evaluating future investments at the site. LyondellBasell is analyzing the potential to retrofit the refinery to build up its CLCS business, which will also keep jobs in the region and align with the company's strategy to leverage existing assets that are strategically located within the LyondellBasell portfolio.

Today, LyondellBasell also announces the decision to explore strategic options for its U.S. Gulf Coast-based ethylene oxide & derivatives (EO&D) business. While the EO&D business provides positive cash generation, it is not a business where the company seeks a leading long-term position. This decision is another example of how the company's new strategy has a laser focus on its core businesses.

With this new long-term direction, LyondellBasell aims to unlock value, increase earnings and continue providing strong returns for investors. LyondellBasell seeks to build businesses with enduring competitive advantages, sharpen its focus on leading positions, cement its position as the preferred supplier for customers, and establish the company as a profitable leader in the growing circular and low carbon solutions market.