LyondellBasell Industries N.V. (LYB) Earnings Call Transcript & Summary

Hi. Good afternoon. I'm Jeff Zekauskas, I analyze chemicals for JPMorgan. It's my pleasure this afternoon to introduce the management of LyondellBasell. And representing Lyondell is Ken Lane, who's the Interim CEO. But Ken's more than that. He also runs the North American Olefins and Polyolefins business and European Olefins and Polyolefins business. Very, very experienced, knowledgeable person in the petrochemicals industry. Dave Kinney, the Head of Investor Relations, is sitting in the audience. And the format we'll have is Ken will maybe speak to about 5 slides, and then we'll do a fireside chat. Ken?

Perfect. Thank you. Thank you, Jeff. Very happy to be here with all of you today and looking forward to being able to discuss a little bit about LyondellBasell and how we see things developing so far, not close enough. All right. Perfect. So let me start off, first of all, we do have a cautionary statement, if we get into any forward-looking statements. Obviously, if you'd like to review that online, it is available. But just to get that out of the way. Again, first, it's very good to be here with all of you today. We are in the middle of a CEO transition. But what I'm very happy to say is that we've got a very strong company, and our strategy has not changed. It's one of the things that I view as one of my top priorities is making sure that we stay focused as a company on the things that we've been building over the last few years and continuing to be seen as a top operator in the industry with our leading positions that we've built over time, continuing with our very disciplined and consistent approach around our financial strategies and, of course, maximizing our cash flow, which we can talk about a little bit here. When you look at our results from last year. Last year, we had record earnings. We had record cash flow. So a very strong year, driven by strong fundamentals in all of our core markets. We did see very good demand coming out of COVID. We've been talking about this a lot today, but what we have seen is the resilience of our portfolio. Many of the products that we have are essential for society. And we saw that certainly coming through COVID, and we're able to deliver these record results last year, giving a 25% return on invested capital, which again is a very strong result. So I can't say enough how proud I am of the team and how good the result was for LyondellBasell overall as a company. Now having said that, I do want to reflect a little bit on just where we're coming from because we want to remember our legacy here. One of the things that we have established over time, going back to the beginning of our company, is a very strong track record of innovation in the chemical industry. We've introduced and developed many of the leading technologies in this industry, and we have been able to do that over many decades, introducing even our latest technology with Hyperzone here on the Gulf Coast in the last couple of years. So this is a capability that we have as a company that's going to allow us to continue to innovate as we see the markets develop and especially when you talk about things like circularity and getting more focused on those market developments, those product developments and the processes that, that is going to take. We see our capability really being out in front to be able to lead that change. Now all of that innovation, what it's allowed us to do is, I mentioned this before, build a very strong company financially. We've got a very strong balance sheet coming out of last year. We paid down a lot of debt in the fourth quarter. We've got a very good debt ratio, and we've built this company now that I believe is really a cash machine. And if you look back over the last decade, the cash flow generation -- or sorry, the EBITDA generation that we've had from this company, has been, let's say, middle of the cycle around $6.5 billion. But going back to the previous slide, when you think about the things that we've built over time, just in the last few years, we've added about $1.5 billion of new EBITDA generating business that's going to be ramping up between now and the end of 2023, 2024. So some of that, like our Sasol joint venture, was already in place last year. We've got our A. Schulman acquisition that we implemented a few years ago, still getting the synergies out of that as we ramp up the production volumes there. But we also have our PO/TBA investment that's going to be winding down and beginning to ramp up production next year. So all of those things are going to really help us step up to a different level of mid-cycle earning performance in the coming years, and that's something we're really excited about. Just finally, just to recap, again, our earnings power has been demonstrated to be very resilient. We were able to continue to pay our dividend even from operating cash flow during 2020, during the -- I guess, the trough you may want to call it during COVID, really demonstrated very much how strong we are as a company. Capital allocation discipline is another thing that we're going to continue to see. We are very aligned with our Board on our capital allocation strategy. We're going to continue to prioritizing returning cash to our shareholders, being very disciplined on our capital investments and looking for ways to continue to return cash to shareholders, especially as we see that cash generation continuing to be quite strong in 2022. Last year, we also came out with our new circularity and climate goals. And the way I would describe this, especially around circularity, is we see this as a market opportunity that's been developing over time. And we believe with our capabilities in terms of innovation, this is going to be an area that's going to lead for us in terms of growth in the future. We've set a target for 2 million tons of circular or renewable plastics that we're going to market by 2030. So we're really excited about that opportunity, and we're going to be looking for creative ways to decarbonize our portfolio as well. That's going to include things like renewable energy that we're going to buy. But also there's going to be some low-hanging fruit that's going to have immediate returns for us in terms of reducing coal consumption at our sites in Germany and those sorts of things. So again, we've got some great things that are coming into focus now with our decarbonization plans and happy to get into some more details around that with you, Jeff. Where you'd like to take it?

Maybe just one question about your slides.

Yes.

You talked about Lyondell's 25% return on capital.

Yes.

Why is it so good? And why is it consistently so good? Why is your return on capital so consistently high?

Well, I think we -- it comes back to our disciplined approach to our investments. We have been very careful with investing in our core businesses. And we've been maybe a little more judicious about the size of the investments. The PO/TBA investment is the biggest one we've ever done as a company. So we tend to be looking more for debottlenecking opportunities, more efficient use of our capital and investments. And so I think that has allowed us to have a very good return on capital over time.

So it's been a more conservative risk reward strategy?

Exactly. That's right.

Maybe the place to begin is in trying to conceptualize a global polyethylene industry today, it's probably best to look to the largest market, which is China. And I know Lyondell has a joint venture there called Bora. What are conditions like at Bora? How do you see the Chinese petrochemical market today?

It's a great question. It's something we do pay a lot of attention to. We've got the 1 cracker joint venture with Bora. It's in Northern China. And what we've seen happening since we started up that asset 18 months or so ago, the market was very strong when we started it. Demand was very good. Margins were quite good. It's a top quartile asset. So we're really excited to have that in the portfolio. But what we've seen over time is that demand in China recently has actually softened. So the second half of the year last year, we didn't see any growth in the market in China. And at the same time, you've got a lot of new capacity coming on in China. Then you've got feedstock costs rising and that has really put pressure on the Chinese market and you can see that in the spreads today. Spreads have been at historic lows in recent months, and that's not going to change until we see the Chinese economy begin to grow again. Now you're starting to see some press reports that Beijing is getting more interested in stimulating growth as their next Congress comes up for September, I do think you're going to start to see more stimulus. But today, the demand the market in China is quite weak.

It's quite weak. I realize that it's a very, very small part of Lyondell, but it's a little bit of a canary in a coal mine or it's a representative asset. And you say that conditions are difficult to put your top quartile producer in China. So when you think of the profitability of Chinese naphtha crackers today, what do you think their margins are, their profits or profitability?

Well, probably over half of them are underwater today. So the profitability is not very good. Even our joint venture being top quartile, we are cutting back the capacity and the operating rate there. So if we're having to do that, we know that many others are in much worse condition. And we're already hearing in the market a number of other crackers that are either shutting down for maintenance or cutting back on their production as well. So I think you're going to see 2 things happen. You're going to see a correction in the production, which is going to correct on the inventory and the supply side. And hopefully, we're going to see a recovery in demand in the short term. And then I think you're going to start to see prices pull up. The high price of oil is giving a little bit of a floor under that today, but we watch that. Your point is exactly right. You called it a canary in a coal mine, we watch it very closely because it is a harbinger for what may come in other markets. So we watch that closely.

Because usually demand comes back after Chinese New year.

Absolutely.

And in a rising raw material environment, usually, customers try to prebuy because they don't want to suffer higher prices little bit later on. So this seems to be a more unusual situation?

It is, and that's exactly what I think everyone, including us, we were expecting after Chinese New Year and after the Olympics, when the -- maybe some relief around emissions and the energy-intensive industries was relaxed more by Beijing that you'd see the demand come back. But I believe what's happening now is you're seeing the effects of the zero-COVID policy. I do think the zero-COVID policy is having a significant impact on the consumption in Japan -- sorry, in China. And that's something that I still don't know exactly how China is going to get out of that. How do you come out of a zero-COVID policy is and stick that landing, let's see. I hope they've got a good plan.

Yes. So maybe what we'll do is we'll take a little bit of a tour and we'll go to Europe. And we'll look at polyethylene, polypropylene. What were the conditions like in Europe today?

Well, Europe today, with everything going on in Ukraine, you certainly are feeling the effects of the high energy and feedstock costs, right? The good news is that we've not seen any impact on demand. So demand is still quite good in Europe. And so with the tragic events that we see happening in Ukraine, as long as the market demand continues to be there and we're able to pass price increases through, including surcharges, so we have introduced surcharges there to pass some of this volatility in energy markets through to customers. I do believe that you're going to see some equilibrium happening over time. But you're going to see the energy costs flowing through into the markets. It's going to take a couple of months just because there's a lag. But as long as the demand holds up then I'm not terribly worried about it. So we're watching the demand very closely. So far, our order patterns don't look to be deviating at all from what we would expect. We should be coming into more of a peak level of demand here in the second quarter and all signs point to that continuing. One of the things that probably is going to help give support to that is that Europe is really just starting to reopen, right? So I think about even our office in the Netherlands, we just brought them back into the office 3 weeks ago. So people are able now to go out to restaurants again. They're able to go shopping again. They're able to travel on vacation again. So I think that that's going to be a bit of a tailwind that's going to help maybe offset some of the headwinds that we see.

Does Russia export much polymer into Europe? And is our constraints on Russian export something that affect the market in Europe?

It will, especially Eastern Europe and some of the more peripheral markets in Europe. They do export polypropylene, polyethylene into Europe. It's less than 5% of the market. But still at the margin, with the supply chain constraints that we have today, you would expect that, that could still be meaningful, right? And I don't think that's going to change anytime soon. We, as a company, see that already the imports from Russia have gone down. So I think that's going to continue to play out over the next few months.

So Europe is acting like a more normal market where raw materials are increasing and what customers are doing is trying to get in front of the price increases that may come later?

Yes, that's right. Yes.

So how does pricing in Europe work versus pricing in the United States? Is it easier or harder to capture raw material inflation as it moves up quickly in Europe versus the U.S.?

It reacts and responds very similar to the U.S. I would say, Europe and the U.S. markets are almost identical. Timing on pricing can vary. Some prices are set at the beginning of the month here and at the end of the month in Europe, but your ability to pass through costs or supply-demand impacts, the timing or the frequency, let's say, monthly is fairly common. Different to China. China is much more dynamic. It's a little less sticky than the markets in the U.S. It's more of a spot-based market than the U.S. and Europe, which are more contract based. So they're pretty similar markets, U.S. and Europe.

So is it the case that because of the -- so oil has gone from, I don't know, pick a number, 70 to 100 since November, so what we're going to do is, are we going to go through a period where it's difficult for prices to keep up with that level of raw material cost inflation and then all things being equal, there would be improvement through the course of the year in rough terms?

Yes, I do. I think there will be a lag. So there will be some compression, and then you'll see the price or the cost get passed through in pricing over the next few months. And if things stabilize at a high level then I think you're going to see prices level off at that higher level. But the participants, to your point, I think you'll see customers being cautious about buying because they don't want to be stuck with inventory depending on where prices are going or if they're concerned, volume may soften in the future, they may not want to buy as much. We usually see that ahead of time. We're not seeing that right now. So that gives us the leverage to be able to push pricing as long as we see the demand.

Does the cadence of the recovery in Europe in any way depend on China? Or is Europe more of its own market that would have its own unique dynamic?

Relative to polymers, it's more on its own. And we've seen that's kind of island form even more in the last year because of the supply chain issues. So being able to close arbitrage between regions has become more difficult because it's more difficult to move volume even from the Middle East, let's say, if they wanted to move volume that was going to China and they want to shift that and send it to Europe, it's not as easy today still because of the supply chain constraints that exist. Or if a Korean producer wanted to ship volume into Europe used to be a lot easier. Today, it's much more difficult because of the higher cost and the ability to get the equipment to move it. So that's given a little bit of insulation around the European market and that's something we've seen develop over the last year and it's still there.

Do Europeans that buy polymer export to China so that demand can weaken if there isn't sufficient pull from China? Not so much?

Not so much. No, not from Europe to China. It's predominantly going to be where is the Middle East volume heading? Is it going to go East or is it going to go West?

Yes. So what about the United States? Is this the best market right now?

This is the best market for sure. Yes. So it'd be the U.S. first, Europe second and China sort of a distant third. Yes. I mean, look, we've got high oil. We've got the continued advantage with our feedstocks so that high oil to gas ratio is going to continue to play very well towards the positions in the U.S. and that's an advantage that is going to be, I think, pretty robust in the midterm. I don't expect that we're going to see any change in that in the short term.

So people have been puzzled about the United -- well, maybe a way of asking this is, what about your orders in the U.S.? Are they weak? Are they strong? Where do they sit? And where are your utilization rates?

Utilization rates are still going to be effective around 90%. I mean we're still very high. We do have our La Porte cracker down in the first quarter. So that's factoring that out, but we're still very high utilization rates. Order pattern is very good. We're expecting good growth this year, especially as we ramp up the production from our Hyperzone asset. So we're not expecting to see any slowdown in our utilization rates versus last year. In fact, accounting for the increase in the Hyperzone asset, we expect to see an increase.

So some people look at like days of inventory in the United States, and it seems very elevated and prices have flattened out in the United States over the last couple of months. What do you make of that? Why is the U.S. able to hold price with so much capacity coming on near term and inventory levels relatively high? Does it surprise you?

It does not surprise me. To your point, we've seen some new capacity come online already. That's been in the market since the fourth quarter. The high inventory levels that we see, though, is a little bit of a red herring because that volume -- most of that volume is tied up in the export warehouses or packaging facilities that just has not been able to process it. And that started back at the end of the third quarter when we were having supply chain issues with being able to get chassis and truck drivers and even the rail lines were having trouble getting labor to move the rail fleet or the railcars around. And that just backed up the system and you saw it culminate at the end of the fourth quarter, which is typically when you do start to see a lot of exports happening anyway. So it's sort of a -- that coming together of all of those different factors have driven the inventory level up, but you can't sell that inventory twice. That inventory is already sold. It's already committed. There's a buyer on the other side. And so the focus that we have right now is being able to make sure that we can get enough railcars to be able to continue to move our products to our customers domestically. And that's where I think things are a little tighter than what that inventory number might show. We don't see any slowdown in demand. Typical seasonality, we should see the pickup going into the second quarter. And I don't see anything right now that would tell me that that's not going to happen.

If shipping conditions were freer, do you think that it would be easier to sell more X portfolio?

I do. Yes. There are markets outside of China, where there are still good demand. Our core markets for exports are really still within the region. Latin America, Mexico and demand -- the demand there is still very good and demand in India is still very good as well, right? So we're exporting to all of these markets.

And because profitability in China is so poor, is your base case that offshore polyethylene prices -- polymer prices should rise because it doesn't seem that the Chinese domestic producers are really profitable at these sorts of levels?

Well, that's exactly right, and that's what's going to have to correct. So there'll be more production reductions to pull the inventory down. That's going to tighten the market up and oil is going to play a big part in this, right? The spread with oil is going to be a big part of that equation. But as you start to pull the production and volumes out of the market, prices are going to have to come back up or else those assets are not going to run. And eventually, China's demand will come back and that will be the, I think, the catalyst that starts to move it the other way.

Right. One would also assume that Chinese capacity would shrink for a period of time?

It will. Absolutely.

And that whatever it is that they wish to bring on stream for next year would be delayed because there's no point bringing on?

I'm not sure they're in a hurry to bring on.

Not sure on units. So when you think about the shape of Lyondell's Olefins and Polyolefins earnings, how would you characterize it versus, say, the first quarter? Like what would be the flow as we go into the coming year to next year, if that's not too far away?

Sure. So look, I think relative to where we are in the first quarter, you're going to see a typical seasonal pattern. So I do think you're going to see second and third quarter improve versus the first quarter. We do have a couple of price increases that are out there. And I do expect that as we see the demand continue to show up very positively that we'll start to get some of that price movement in there. We're going to need to with the increase in feedstock cost, even ethane has been going up. So the profile that I would see is probably a fairly typical first quarter being low. Second, third quarter coming up based on higher volume, little bit higher margins and then you're going to see the volume tail off in the fourth quarter. I don't see this year really playing out any different than a more normal year, barring anything totally unforeseen happening around what we see in Europe.

If we can look out just a little bit further into the future, I think Dow, at their Analyst Day, said that they wanted to increase ethylene and polyethylene production in Fort Saskatchewan in maybe 2028, and so like it doesn't seem that producers are aggressively expanding capacity from now until the end of the decade. With the exception of 2020 and '23, do you have an opinion on why that's the case. Lyondell hasn't said that wants to build a new cracker or big unit? Why is it that the industry has become more conservative after a period when it was less conservative?

Sure. Well, going back to the disciplined comment I made about LyondellBasell, that's still true, and we're going to stick to that. But I totally agree with you. I think what's going to happen is that you've seen all of these projects that are coming online now that started 5 or 6 years ago, and now they're starting up. But what everybody is realizing is we've all as companies and as an industry, we've made commitments around decarbonization. We've made commitments that we're going to return more cash to shareholders and these sorts of things. So when you think about all of those commitments, if you can't figure out a way to economically decarbonize a new cracker, it's going to be hard to build it today. You've told your shareholders, you want to return more cash to them, it's more expensive to build these crackers even before you start building in decarbonization technologies. And some of those technologies don't exist today. So I do think that the next wave of new capacity to come is further out than a normal cycle. That's my view.

So the drive to decarbonize, is that code for many producers think, well, there may be a carbon tax? And so even though there isn't one today, that's too risky. Is that part of the form? Or is it more that humans don't want more carbon in the atmosphere, it's sort of a more abstract, altruistic point of view, if you have an opinion on that?

I do have an opinion on that. I think it's probably more the latter, right? I mean, our shareholders are demanding that we decarbonize, and we decarbonize our energy sources, our feedstocks. So that's the circularity part of the equation, but also decarbonizing how we drive and fire our furnaces and our crackers. So we've put these commitments out there around a contribution towards decarbonizing and our contribution towards climate change, and we're serious about that. And we will do that in the most economic way that we can. So we have to take care of the assets that we have now. We're going to have to be figuring out ways to decarbonize them, thinking about adding even more capacity on top of that is probably going to be a secondary priority.

So the domestic producers of Olefins and Polyolefins essentially make a lot of money when the spread between oil and domestic natural gas is wide?

Right.

And so in the councils of Lyondell, when you look at the oil price curve going out to 2030, do people say, "Well, it looks like gasoline demand may slow down. There are more electric vehicles. So we don't like the long-term shape of the curve or it crosses some risk/reward barrier for us where we think, oh, this is just too much risk," that is there a conceptualization of capacity growth with the long-term oil price or everything is just more practical than something as abstract as that?

We actually look at both of those things. And of course, we know that our outlook on oil is wrong. So we have multiple scenarios that we want to look at. But clearly, what we see is what everyone else sees, which is kind of peak oil demand somewhere towards the back end of the decade or a little bit beyond that. And so that puts pressure on refining, which what does that do to your feedstocks and especially around naphtha, so what's going to happen with naphtha supply in Europe and in China and all of those things get factored into the scenarios that we think about for our long-term planning. But in all of those, what we see still is that there will be an advantage here in the U.S. with the NGLs that will still be being produced and there'll still be an advantage here for the foreseeable future. The question really becomes around access to feedstocks, if refineries start closing in Europe or in China, then what do you do with those assets, but that's a much longer-time horizon.

So it's really been the case that the oil majors really don't buy commodity chemical companies. And sometimes they separate them off or they put them in joint ventures. Over a longer period of time, do you think that, that will continue to be the pattern? Or do you think that the way the oil majors will view the chemical industry is somewhat differently in the light of changes in the way their own volumes might grow or not grow?

Well, I'll tell you before the last 2 years, I would have said it probably would have been more that they would see this as a growth opportunity. And there are at least 1 or 2 of those major oil companies that I think have changed their view on that. One that hasn't. I'm not going to mention any names here, but certainly, I think that, that view has shifted. The chemicals market is going to continue to grow. I have no doubt about that. The question that I think a lot of the oil companies are going to be asking is how does this fit with my ESG story? And can I do this and decarbonize at the same time? So why would I go get into chemicals when I need to be making all of my investments in decarbonizing and renewables and everything else that they have to do for their current portfolio. I'm not sure how that would work, but I do think that several of them have had some second thoughts maybe around chemicals, doesn't mean that chemicals is still not a great space and it is going to grow but their priorities have changed as well.

In terms of Lyondell's approach to the North American markets, are there opportunities for you to buy assets? And does that make sense for Lyondell at the right price?

Well, look, we've had a strategy all along to really position ourselves to be able to buy assets through the cycle. We did that with the Sasol joint venture, and that's the obvious asset that we would want to have the other half of that joint venture. But as we've said before that requires a willing seller and a willing buyer. We're very happy with that partnership. Sasol is a good partner. Are there other assets that are out there that we could buy? Sure. And we're always going to be taking a look at things. But we're not going to change that disciplined approach to how we look at buying things for good value in our core businesses.

So if you bought in the -- so if the Sasol guys came to you and they said, "Oh, okay, you can have the other half, we'll sell it to you." What would that do for you? Like how would that position Lyondell differently?

Well, I think the first thing is it depends on the price, right? We would want it for the right value. But it strengthens our position to be able to add some derivative capacity. Today, we've had derivative -- ethylene capacity in Louisiana and in Texas, that we could add some derivative capacity at several cracker sites. So what it does is it gives us more optionality outside of Texas to be able to diversify with our derivative portfolio. And that long term, these are core businesses for us, is better than building a new greenfield cracker and that's our opinion.

So in other words, the capital costs of the building, I don't know, more polyethylene, just to take an example since you have the ethylene already would be a better return on capital?

Exactly. It's lower risk. Therefore, in my mind, it becomes a better return.

Yes. So Bob Patel, the previous CEO of Lyondell had many successes. But one of the things that he hoped to do, but he wasn't able to do was he wanted to monetize the refinery in Houston. Where does all that down? And I think that the refiners are now more profitable than they've been before. The crack spreads have widened out, gasoline prices have gone up. Where does all that stand?

Right. Yes, that's exactly right. I mean, we're happy with the profitability today. We haven't been over the last 7 or 8 years. But today, it's actually turned into a good thing. So like we said previously, we're looking at options around that assets, and we continue to work them. The increase in margins and profitability gives us a little bit more breathing room to consider all options and not maybe focus in on only one, and we'll continue to do that. And I expect we'll be able to communicate something in the next 1 month or 2 in terms of the future direction of that asset.

So if you did get -- you're not particularly levered. So if you did get a bunch of cash, would you have it sit around or you'd wait for the Sasol cracker to come or like put it in the bank? What would you do or it's hard to know?

Well, I would say it's hard to know. We don't want to build a lot of cash on sheet. We've got a very good balance sheet today. So we would likely look for the best way to return that to shareholders. Now there could be something that comes up that would say we should hang on to that and do something different with the cash, but the priority would still be for us to be looking at the optimal way to return that cash to shareholders.

So you've got a big investment in propylene oxide and TBA that will come. When exactly does that come on stream? And does it make a difference to your EBITDA?

Well, it absolutely will. And we're going to be winding down the construction between now and the end of the year. So we'll be ramping up production next year. And you're talking about, it's middle of cycle kind of a $450 million EBITDA number for the company. So once we get that up and running, we're -- and we believe we're bringing it up at a really good time because the demand is very strong for PO. There's been some capacity taken out of the market recently and our customers are asking for more every day. So we're really excited about getting that asset into the market.

Are we in the middle of the cycle? Or are we above mid-cycle or below or...

How are things is a little different, right? I mean it doesn't follow an ethylene cycle, and it's one that's got a little bit longer -- the cycles tend to be sharper and longer. So you -- we're in a pretty good run right now. But I would not say that we're necessarily at a peak, but we're far from seeing anywhere near a trough.

So maybe when it's up and running fully, $450 million is on the conservative side, it could be?

It could be. It could be. I hope it is.

You also have an oxyfuels business, which has struggled over the past few years. And maybe it's peak used to be, I don't know, $450 million, something like that and then it really fell to nothing. Where does all that stand now with gasoline prices being where they are?

It's improved. So we've seen a significant improvement from fourth quarter to first quarter. Relative to history, the margins in the first quarter are significantly better than where they've been. And recent years of -- that when we look back at the first quarter performance looks very good. Butane prices is going to be coming off as we get out of the blending season, right? So we feel really good about the oxyfuels business today relative to where we were last year, for sure.

So going forward, Lyondell seems to be that polyethylene prices are rising, given where profitability is in the offshore markets. You have a large capacity addition, which is coming on. Refinery spreads are widening out. So the -- it may be that it's difficult shorter term for Lyondell, but 2022 is beginning to shape up?

Well, it is, and that goes back to what we were saying before about really adding these growth components. When you get '23, '24, we have all of these things clicking, you're adding $1.5 billion of EBITDA at mid cycle. So if you're a little bit above that, it looks even better. So I'm optimistic about that.

Okay. Thank you for such a nice review of Lyondell's prospects, Ken.

Thank you very much. Great to be with you, Jeff.

I hope you come back or you can find a way of coming back after your interim status change.

I hope so as well. I look forward to it.

Okay. Good. Thank you very much, everyone, for coming.