LyondellBasell Industries 10-Q 2024-09-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

For the quarterly period ended September 30, 2024

or

For the transition period from to

Commission file number: 001-34726

LYONDELLBASELL INDUSTRIES N.V.

(Exact name of registrant as specified in its charter)

(Address of principal executive offices) (Zip code)

(Registrant’s telephone numbers, including area codes)

______________________________________________________________________________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

The registrant had 324,756,819 ordinary shares, €0.04 par value, outstanding at October 30, 2024 (excluding 15,665,679 treasury shares).

LYONDELLBASELL INDUSTRIES N.V.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTS OF INCOME

See Notes to the Consolidated Financial Statements.

LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

See Notes to the Consolidated Financial Statements.

LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED BALANCE SHEETS

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GENERAL

This discussion should be read in conjunction with the information contained in the Consolidated Financial Statements, and the accompanying notes elsewhere in this report. Unless otherwise indicated, the “Company,” “we,” “us,” “our” or similar words are used to refer to LyondellBasell Industries N.V. together with its consolidated subsidiaries (“LyondellBasell N.V.”).

OVERVIEW

Results for the third quarter of 2024 declined compared to the second quarter of 2024. In our Olefins and Polyolefins-Americas (“O&P-Americas”) segment, integrated polyethylene margins increased, driven by favorable ethane and natural gas costs coupled with higher polyethylene prices. Our third quarter volumes benefited from high cracker operating rates that captured improved margins on ethylene sales. In our Olefins and Polyolefins-Europe, Asia, International (“O&P-EAI”) segment, integrated polyethylene margins expanded due to lower feedstock costs and stable polyolefins prices. Margins for our Intermediates and Derivatives (“I&D”) and Refining segments fell due to lower crude oil prices and gasoline crack spreads.

Results for the first nine months of 2024 remained relatively flat compared to the first nine months of 2023. Our Refining segment results decreased as a result of decreases in the Maya 2-1-1 industry crack spread. Our I&D segment results decreased due to lower gasoline crack spreads which impacted our oxyfuels business partially offset by the gain on the sale of the Ethylene Oxide & Derivatives (“EO&D”) business. These decreases were offset by improvement in our Advanced Polymer Solutions (“APS”) segment results driven primarily by the absence of a non-cash goodwill impairment recognized in the first quarter of 2023. Additionally, improvements in our O&P-Americas and O&P-EAI segments were driven by higher olefins margins driven by higher ethylene prices coupled with lower costs.

During the second quarter of 2024, we announced a strategic review of some of our European assets to position the company for a more sustainable and circular future by strengthening profitability and competitive advantage in the region.

We remain committed to our balanced and disciplined capital allocation strategy. During the first nine months of 2024 we generated $1,904 million in cash from operating activities, invested $1,335 million in capital expenditures and returned $1,400 million to shareholders through dividend payments and share repurchases.

Results of operations for the periods discussed are presented in the table below:

RESULTS OF OPERATIONS

Revenues—Revenues decreased by $236 million, or 2%, in the third quarter of 2024 compared to the second quarter of 2024. Lower volumes, driven by lower demand and unplanned downtime in our refining segment, resulted in a 2% decrease in revenues. Lower average sales prices for many of our products resulted in a 1% decrease in revenues. Favorable foreign exchange impact resulted in a 1% increase in revenues.

Revenues decreased by $373 million or 1% in the first nine months of 2024 compared to the first nine months of 2023 due to lower sales volumes.

Cost of Sales—Cost of sales decreased by $68 million, or 1%, in the third quarter of 2024 compared to the second quarter of 2024 and increased by $82 million, or less than 1%, in the first nine months of 2024 compared to the first nine months of 2023, primarily driven by feedstock and energy costs, including the impact of our commodity hedges.

Impairments—During the first nine months of 2023 we recognized a non-cash goodwill impairment charge of $252 million in our APS segment after the effect of moving our Catalloy and polybutene-1 businesses from our APS segment and reintegrating them into our O&P-Americas and O&P-EAI segments. Additionally, we recognized a non-cash impairment charge of $25 million related to capital project costs in our O&P-Americas segment.

SG&A Expenses—Selling, general and administrative (“SG&A”) expenses remained relatively unchanged in the third quarter of 2024 compared to the second quarter of 2024 and increased by $79 million, or 7%, in the first nine months of 2024 compared to the first nine months of 2023, primarily attributable to an increase in employee-related expenses.

Operating Income—Ope

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Our exposure to market and regulatory risks is described in Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2023. Our exposure to such risks has not changed materially in the nine months ended September 30, 2024.

As of September 30, 2024, with the participation of our management, our Chief Executive Officer (principal executive officer) and our Chief Financial Officer (principal financial officer) carried out an evaluation, pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the “Act”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Act). Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2024.

There have been no changes in our internal controls over financial reporting, as defined in Rule 13a-15(f) of the Act, in the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

Information regarding our litigation and legal proceedings can be found in Note 9 to the Consolidated Financial Statements, which is incorporated into this Item 1 by reference.

There have been no material changes to the risk factors associated with our business previously disclosed in “Item 1A. Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2023.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On May 24, 2024, our shareholders approved a share repurchase authorization of up to 34,042,250 shares of our ordinary shares, through November 24, 2025, which superseded any prior repurchase authorizations. The maximum number of shares that may yet be purchased is not necessarily an indication of the number of shares that will ultimately be purchased.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

During the three months ended September 30, 2024, none of our Section 16 officers or directors adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

• Filed herewith

** Furnished herewith

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.