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

I'm very pleased to have Agustin Izquierdo, the CFO of LyondellBasell with us this morning. I'll let you -- you've got a few slides we'll open up, and then we'll kind of just keep it informal and kick it off. With me also is Dan Lungo, our IG credit analyst. If you don't know, Dan, you should. He is a wealth of knowledge. And I think for BofA, specifically, I think the fact that we have both credit and equity on a lot of the stuff offers a lot of value for clients. And so if you haven't met Dan before, please introduce yourself as well. So with that.

Excellent. Thank you very much. Thank you, Matt, Dan and everybody joining here in the room and on the webcast. Very happy to be here. And yes, as we mentioned, I'll go through a few slides. I want to cover, obviously, the recent recalibration of our dividend. We'll also talk a little bit about the financial performance we had in 2025, and then we'll also touch, of course, on the macro and the outlook.

Sure.

As always, there will be forward-looking statements that we'll be doing and please look at the LYB website and all the disclaimers that legal is very happy that we have here embedded. As for 2025, here some of the financial highlights, I think I would also like to start by mentioning it's not in here, but 2025 was a record low year in terms of recordable incident rate for LyondellBasell. So we're very proud of how we run our operations in a safe manner. You can see also here we have a very strong cash conversion, which is one of the highlights we'll talk about in a little bit. This business has produced a lot of cash even during very difficult times. And we've just been very, very disciplined controlling the controllables being very aware and in tune of where we are in the cycle. And also we've had to take the difficult decision of delaying some of the growth CapEx but also continuing to invest, for example, in VEP, which is our high return, low payback projects and also we've continued with our MoReTec-1 investments for chemical recycling in Germany. So jumping into cash generation. As I said, our business has generated a tremendous amount of cash, 95% of cash conversion in 2025, which is extremely strong, a very good team effort and especially on the working capital front. We overdelivered on this front. And the team has just been fantastic on the fixed cost side, working capital side, and we generated also $2.3 billion of cash from operations. As we go through 2026 you should expect this cash conversion to come down a little bit also because it's normal that we will have to rebuild some of this working capital as the market comes back, but we will still target the 80% through the cycle cash conversion. Other highlights during 2025, we also issued $1.5 billion of debt to prefinance the maturities that we will have here at the end of '26 and '27. And that was -- we saw an opening in the credit markets. We took advantage of that. It derisks the company as well because after those maturities in '27, then we don't have any maturities until 2030. So we're proactive in doing that. We closed the year with $3.4 billion in cash and ample liquidity $8.1 billion of liquidity overall. Now turning into capital allocation. The -- you saw the press release last week where we recalibrated our dividend. We reduced now to $0.69 per share, so roughly a 50% reduction. And this obviously improves the flexibility that we have at LYB. We continue to prioritize our balance sheet. Investment grade continues to be very, very important. And even with the 50% cut, we still offer a very attractive yield to investors. And in our investor base overall, roughly 40% income focused, and the dividend is an important part of the investment thesis for LYB. One other thing I want to highlight is on the cash improvement plan and going back to controlling the controllables. We have announced a $600 million target for '25, and we over delivered. We reached $800 million. We've -- for '26, we have announced $500 million of cash improvement plan and it's early in the year, but with all the sort of bottoms-up idea and what we have visibility to, I think we're in very good shape to significantly overdeliver on the $500 million, which it just gives further sort of peace of mind and clarity that the cash conversion and generation will continue to be a priority for us. And let's also talk now a little bit about the outlook and some of the things that give us a bit more hope for the medium term, right? So you see here on the left-hand side, we're highlighting the PE inventories. They were 4 days below the 2025 average, and this is very supportive also for price increases, right? So you saw that we got the $0.05 per pound here in January. We also had a winter storm at the end of January, which helps that inventories are not rebuilt. The now late Lunar New Year in China should also help in terms of further draw of material here as we go into late February, early March, and that is all conducive and supportive of pushing our price increases, especially here in the first half of the year. The theme of rationalization continues. You saw this -- the second chart already in our earnings release, but 23 million metric tons roughly that have been announced of closures. This is around the world since 2020. Of course, the net is still additions by 2030, particularly in China, but the rate in which 2 things, the rationalizations have happened lately has accelerated quite a bit. And also, we see it from our technology business the number of licenses that we've continued to sell are shrinking rapidly, and that is bad news for technology, but very good news for the supply-demand balance and no more builds, especially coming out of Asia and China. PMI earlier in the year, had a good pickup. This is a leading indicator, and we were talking about this in prior meetings, Usually, when PMI starts to pick up, you usually have a 6- or 9-month lag, but then you start to see it on the margins and the results. So we're very encouraged by the strength in PMI. And then lastly, here on the last chart, the durable demand continues to be solid. It hasn't really come down. We're at the bottom of the cycle, but that continues to hold on pretty stable and also just we're still consuming the glove that we had after COVID. So as we come down on that normal cycle, just of replenishment of durables and nondurables, starts to happen, they should be more conducive for this what's now the longest trough. You should start to see some light at the end of the tunnel. In terms of near-term outlook, Here, you've seen the slide before as well. The seasonal improvement in demand continues, especially for North America. We just talked about the inventory side for polyethylene continues to be very supportive of pushing prices here in the first half of the year. Europe, we're seeing also slight improvements in demand. However, now the high crude prices are offsetting because obviously, the correct naphtha. So it's sort of evening out there on the margins. Asia, we still continue to see the pressures from the oversupply. And in terms of some of the end industries, packaging has been very, very steady throughout period and should improve also as we come out of this cycle. Building and construction, new home sales continues to be good. Of course, we need existing home sales also to start picking up muted if rates come down, obviously, that will be quite a boost for the industry, and we would benefit from that. Automotive, I would say North America, it's okay, hasn't come down, but we continue to do also quite meaningful improvements, especially in our ATEX business, which is 60% exposed to automotive, especially on the margin side. And then on the -- finally, on the oxyfuel side, we're seeing more than normal seasonality trends. Last year was a bit of a disruption, where basically the driving season was nonexistent, but now we're seeing now that the markets and premiums are coming back as oil prices recover and the industry seems to be acting in a bit more rational way. And I think with that, we can jump to.

I think the dividend cut being probably the most present conversation, particularly now with that out of the way, -- can you talk about cash needs and cash priorities? And Dan obviously has some questions as well around like debt structure and what this looks like as you kind of move forward. So do you want to kind of go with that, Dan? Or...

Yes. I mean any other type of things that you're considering to boost cash in the next 2 years, asset sales or reducing debt through a potential hybrid issuance, any type of -- anything else you're looking at. And for the audience, then the equity side, when I say hybrids, I mean subordinated notes, not convertibles. Convertibles are equity issuances. They get 100% equity credit. Subordinate notes get 50% equity credit at the agencies.

Let's tackle one by one. We continue to control the controllables. So the cash improvement plan, as I said, we overdelivered in '25. We will overdeliver in '26. We have good visibility. In terms of monetizing assets, since Peter started his tenure, he's been very active in terms of portfolio optimization shutting down the refinery. We sold ethylene oxide and derivatives. We're about to close the transaction with AEQUITA for the European assets. We just shut down another PO/SM joint venture we had in the Netherlands. And what we have left are smaller monetization, some joint ventures, so nothing meaningful, probably in the low 3-digit number that we could monetize, and we'll continue to do that. And of course, delaying CapEx, et cetera. As for instruments, always look at them, they're in the portfolio. They're in our toolkit. But for now, we're not exploring any hybrid issuances, but we'll continue to explore them.

And then just a follow-up, obviously, with the S&P news last week and then follow with the cut the dividend. S&P obviously couldn't front run anything you were doing. They have the negative watch. What do you see the outcome of that review. Hopefully, we get some clarification by tomorrow or next week, but where do you see your ratings ending up there? And then if you could just kind of touch on the other 2 agencies and what you're hearing from them?

So the dialogue with the rating agencies is very, very robust. Every quarter, we're talking to them. I was there in September of last year. We obviously communicated to them right after the Board meeting, and they were happy to hear that we took the decision on the dividend. The industry is going through a long, long cycle. They have obviously taken that into consideration. They've been sort of very supportive and rational in terms of understanding that this is a cycle that it will come out. We are a few rightfully saw, are in credit watch negative and we are sort of making our case that we should stay investment-grade. Investment grade is paramount for our capital allocation and our discipline as to how we run the business. It's critical to stay investment-grade. And we have tools like the dividend where we cut. We will do whatever is within our needs and capacities to continue to fight for that investment-grade. It is important just to operate in terms of liquidity flexibility, payment terms, guarantees. It's very important in our industry to keep it. As for Moody's and Fitch, we continue to have also very good dialogue with them. I think we explained that we're controlling all the controllables. We're fairly CapEx light in that sense also, we've pushed all the growth CapEx projects. We've optimized even our maintenance CapEx as much as we can. We explained how after the European transaction closes, our maintenance CapEx comes down to roughly $1.1 billion. So we're truly doing everything we can to strengthen the balance sheet and preserve cash.

I wanted to broach a topic that kind of became a bit of a hot button issue on all the earnings calls, which is just artificial intelligence and deployment, right? And particularly, you have a peer announcing some very aggressive cost-cutting actions and admittedly, the details felt a little light, but there clearly a lot going on under the surface there or sure we understand. As we look at like cycle issues in your cost structure, do you see similar opportunities? How is Lyondell assessing its cost structure for the next 5 years? And then as you look at new tools like artificial intelligence, like what's the top-down message and the opportunity set that you're exploring?

In terms of cost structure, we're generally a leaner company than most of our competitors. It's just also the way in which we've brought up much flatter structures and organizations. The portfolio cleanups have helped quite a bit in terms of our cost structure. We have let go roughly 1,300 employees. We're at levels of -- we're 18,000 employees now. So this is also the lowest level since 2018. So we have very painful measures, but we've been proactive in that sense. And there's more to come, right? As we also move -- you'll hear more and more in the coming months of the -- what we call the LYB operating model, which is optimized more the end-to-end processes and move more to call it, a shared service center organization, and that will drive costs further down. In terms of AI, we've been very sort of diligent and methodical in the case uses. We've done a lot of it in preventive maintenance. We do quite a bit in terms of terming of intelligence and modeling our MTBE, for example. We've deployed it on contract reviews where we can extract a little bit of more pricing also on our feedstocks. I think we've been -- we have small use cases, but I -- we'll continue to do that, but I'm not there yet in announcing a big bang on.

The CFO of one organization just yet?

Not yet.

This is maybe a little technical or maybe not, right? But like the inventory situation for polyethylene in North America was pretty long July. We'd come out of the tariff situation, the big pause in demand, everybody took rates down, then we went back up. Inventory is down. But the American Chemistry Council also like got it, its inventory estimate for the U.S. So when you look at that, like -- how important is that for an indication for you on the market? Are you -- like -- did you, at the time, feel like the market was tighter than what the data was providing or is the data that you go off of? Like I can see it going both ways, but some of the revisions to the inventory through the course of the year were pretty surprising.

Yes. So a little bit of both. We did feel the tightness. And we knew something just because we're obviously operating and we're a meaningful player something wasn't really quite working with the tightness on the inventory levels that we were looking at. ACC has a very good and defined process and they figure out what was the mismatch with one of the producers declaring inventory that maybe was in the warehouse, but already sold, and that's what the meaningful revision came and that sort of validated where we were seeing on the ground and even the operating rates at which most participants were running, which was lower, and we saw it on the export numbers and demand wasn't really slowing down anything different from the seasonality trends that we see. So it just normally what's leading to lower inventory levels than what we would have seen on the statistics. So we were sort of validated by the revision and the lower numbers with the ACC figures, and that is also what's now helping drive -- now we have the data to make the case also that the price increase does have legs. And CMA pushed it. We agree with it, $0.05 per pound, and we all have increases on the table for February.

February, yes. It's interesting because 4Q, I don't know that I've seen a bigger divergence -- I'm sure there's been like a bigger divergence between you and your primary peer as it relates to like polyolefins profitability and cash flow dynamics. 4Q was pretty stark because your EBITDA was down considerably, but your cash conversion on the year was like mid-90s, right? And conversely, your larger peer took operating rates up, EBITDA up, the cash conversion terribly. And so you're clearly solving for a different thing. But as you look at the market, right, polyethylene price is up in January, polyethylene price is up maybe February, we'll see. But fundamentally, the market is in pretty good standing right now. Part of that is because operating rates are low. How do you hold the line? How do you make the decision that Lyondell will continue to kind of operate at this mid-high 80s range, which you're talking about when -- 2 of at least the public peers on earnings have said they want to run hot, right? And you have CPChem coming to market later this year. So what's that decision like internally? And if prices go up, do you take your rates up and capture that? Or do you kind of sit there and be a little bit more mindful.

Yes. I think we've been extremely disciplined and very proud of the team on how we've managed our operating rates. And like we've said during earnings will match to, however, we see the demand. So we'll continue to be very disciplined. There's obviously opportunity to be taken, will run higher. But if not, we're not shy of lowering operating rates. We are maximizing cash, and we're also not afraid of value over volume. So we will continue to be very, very disciplined and eventually, it's paying off, as you saw in terms of the cash conversion, profitability, and that's how we'll continue to run in a very, very disciplined way.

And so somebody like CPChem is turning capacity on later in this year. Is it a -- I know most of the stuff kind of typically finds its way into the export market when a new facility ramps. But they have channels and sales and presence domestically as well. So as they look at putting tonnage into the market physically because I know I'm sure they've already been marketing, but physically putting tonnage more, is this something where you take your rates down. If demand doesn't grow enough domestically to absorb what they can ship domestic, do you take rates lower to make room for them? Or is this like -- how do you play that game there?

I think we'll see where they place volumes, right? What they've been very vocal on is all the HDPE volume that will come into the market from that plant is meant to exports. These are the basic grades. We place mainly in the domestic market. We try to have sort of a bit more sophisticated grades. So of course, it creates a ripple effect in the export market and the export prices, but we'll continue to be focused more and more on the domestic side. I think we'll adjust as needed. If we have to lower rates, we'll do it, if we have to ramp up, we'll do it. Just time will tell. We'll adapt. We're very quick and nimble. But yes, I don't -- hard to say right now what...

Yes, I appreciate it. I'm just trying to get inside the mind because I think the general mantra for a lot of the industry is like this is a low-cost operating base you should run full out. And it's a unique stance that you've taken and maybe it's not as unique as think versus the public companies that we've had talk, like it is a point of difference. And to your point, it is benefiting you on the cash side. Your cash conversion was really strong in the fourth quarter. So I get it as it relates to how you're -- what you're trying to solve for. You have that closures slide. And there's definitely been announcements for sure. A lot of it is ethylene not tied to polyethylene, right? We've seen a lot of ethylene closures into other derivatives. Why do you think it's been slower on the polyethylene side of the equation? Maybe that's not a fair maybe disagree with my comment, but I'm just looking globally at some of these announcements and I've been waiting for more polyethylene specific closures.

I think normally what people announce are the ethylene, the cracker or the producer, not so much the PE, but you see some of these clusters, particularly if you think of Europe, right, when somebody shuts down a cracker. And there were so many other adjacent downstream products, whether PE or other derivatives and the domino pieces start to fall because now, for example, in that chemical cluster you shut down a couple of downstream units and then maybe the industrial gases plant cannot run anymore or the wastewater plant cannot run. So you'll see more and more of this effect on PE. I think we've seen from our numbers, there is also a meaningful closure of PE activity, whether intended or unintended as they say somebody shuts down a cracker. But I agree with you, what gets announced is the ethylene, but we do see it and we see it in the market, significant PE closures.

Okay. So if I think about the headwinds to closing, right? What ultimately are you navigating, right? Because you opted to sell your assets almost kind of effectively pay a little bit to get rid of them. So when we look at the market in Europe and what still feels like a net supply addition, what are we running into as headwinds to close?

You mean on transaction or assets in general?

It was like an industry, like industrial gas contracts are there, environmental remediation, right? Like what -- if you're an operator and you're saying, I can lose $100 million a year or whatever or close, we see some decisions to close. But oftentimes, these assets are just running at a loss, and maybe there's too much co-integration. So if you're talking to us as around like what decisions you have to guide and navigate when you're looking at closing? Like what are the primary hurdles that keep that these plants running maybe at below ideal profitability?

Yes. So obviously, we want to run these plants in a profitable way. That's one. I would say the shutdown costs are also quite significant, especially in Europe. You have labor contracts, remediation, which are quite high. So we do the pros and cons, you're also looking -- right now, the environment seems to be shifting in the right direction, but there is significant cost to decarbonize these assets. So you're looking at significant CapEx investments. If you don't see really the return or the ability to push prices to return that investment you just -- in the future, you might be losing money now and there's not a clear path in which you can turn these assets profitably in the next 5, 10 years. So we do the pros and cons and took a very painful decision of -- painful and strategic decision of just cleaning the portfolio in Europe. But always comparing versus the alternative, which would be an important one is shut down for sure, and those are significant.

And so as we look at part of what the anti-involution thesis has been is just kind of closing old capacity. The other conversation that I've heard is just China's desire to cap carbon emissions by 2030. If we think about the own evidence you see through your licensing business, right, maybe provide a little bit of context for how long that will take if we started seeing the sales now to resonate. Because from our pipeline, we still see projects in '28, '29. Candidly, I'd love to see those projects not come to market. Maybe they haven't started building those projects yet. So is there some reality where like the licenses we've sold would not show that those capacity would come or that capacity is probably going to come or not, and we don't have more beyond that because of the licenses? Like what path does that provide you?

Yes, I think the visibility that we have on the licenses would tell us that there's no more capacity coming definitely probably after '29 or '30. Because if a license we sell today would be a plan that starts in 2 or 3 years. And we've been selling 15 licenses '23, 8 licenses in '24, a couple 2, 3 licenses in '25, with very little visibility of any licenses that we would sell this year. And the majority were going into China. So that just means they're not building, which is good news for the industry, right? In addition, there's been rationalizing the smaller producers, especially the nonintegrated producers are under quite a bit of pressure whether it's VAT tax or the naphtha consumption tax. So they're putting a lot more strain into those nonintegrated operators. And you have to remember also in the PE world, the cost curve matters quite a bit. And the oil to gas ratio advantage will continue to be in North America and the Middle East. So even though they have these new additions and nameplate capacity, nameplate capacity wise alone, they would be self-sufficient and exporting and they still import roughly 30% of their needs. So it's a little bit tricky just to go by the additional...

Of course. And operating rates in China are very accordingly. I hear you. And part of that also remains the Russian.

Correct.

So if you try to navigate the crude imports in the low-priced imports of Russian crude. Like when you're looking at the cost curve, how much of a tailwind, maybe on a -- if you were to bring that to a polyethylene or polypropylene price per pound. Like what kind of tailwind is that providing them? Or how much of a headwind is that to the cost curve?

I mean they're still operating at losses. I'm not sure they even cover their variable costs. But if you're getting Russian oil at $60 minus, that's a cap at maybe $10 discount. And I would still argue we're fairly competitive in North America and the Middle East. Otherwise, they would have stopped even the imports of material. So this oil-to-gas ratio advantage won't disappear. Actually, if the war ends, that could be very good news for everybody, right? If the Russian oil sort of flows, they lose this discount, then obviously, reconstruction would be good business and of course, wonderful for Europe.

APS, right? So there were some grand plans for Lyondell as it remains related to being kind of like a polymer formulator. And APS has gone through its own kind of restructuring work and we're coming out on the other side of that. What's the longer-term strategy for this business? Because it's pretty subscale as it relates to the grand scheme of Lyondell. So is this something that like is fine. It has its place. Is it -- ultimately, you're going to have to make a decision is it worth holding on to or growing? I know originally, there were expectations of more acquisitions in there. And I know that maybe that's not where you're going to be right now from a cash perspective. But when we look at like what the APS portion of your profile is over time, what is that going to be?

I would first say that APS is in the middle of the turnaround, and the team has done a great job, right? The EBITDA that they've generated impressive cash conversion of probably 140% or so of cash conversion. The work since the acquisition that has been done is meaningful. I think half the sites that we inherit from A. Schulman have been shut down, and we continue to shed all those assets that were not profitable. The improvements on margin have been incredible, the NPS scores. So all the right things are falling into place. There are a lot of synergies that we get from our just normal O&P business and the sort of being closer to the customer or technology. It also gives us a very good vehicle as we push more into circularity and the close connection to the brand owner. So this is -- we've won pretty good businesses on the circulant side for automotive customers, for example. So it has a place in its portfolio. It's valuable. But like talking to Peter, every part of the portfolio gets reevaluated constantly. So we'll cross that bridge when we get there. But for now, it's an important part of our equation. And the turnaround is, in fact...

It's a business that you see merits? I mean, like, look, if you think about Westlake, right, they love talking about their PVC compound and pipe business is a very good margin protector up and down. And conceptually APS can be a similar basis if you've got a real high-value business proposition that you're formulating. And so is this something that will grow over time organically or inorganically? Or is it just like...

Yes. The plan that even was announcing in Capital Markets Day for them to reach the $500 million of EBITDA continues in place. Obviously, it won't be at the '27 mark. It's delayed a year, 1.5 years. But that's still the goal to make this business at least a $500 million EBITDA generating business for LYB.

And you touched on the circularity side of things. Can you give us a little bit of an update on MoReTec market for it and how it's evolving?

Sure. So MoReTec-1 continues its investment, and should start here in the first half of '27 is one of the growth projects that we've kept. This is a chemical recycling facility that we have in Germany at our integrated site in Wesseling. And we continue to see very good demand, especially in Europe. The environment is very supportive for recycled plastics. You've heard probably the news a 1.5 weeks ago that SUPD, so the single-use plastic directive was approved in Europe. And that gives us comfort that the environment is there regulatory-wise very supportive of the recycled content of plastic that has to go into the products. And this is also giving support to the margins of our MoReTec-1 product. So it's -- we're very happy with it. It's relatively small, 50 kt. It's a combination of production, but a big pilot plant for us as well. But we're very happy with the commitments that we have with -- from customers and the way it's progressing. So we're happy with our commitments there.

And the policy in Europe is moving around a lot. So yes, I'm sure there's a lot of internal delighted to that getting reassured. But we see a lot of waffling on the carbon tax side of the equation, CBAM, whether it moves forward or not. And this morning, Italy made some comments about the carbon trading system and then putting it on hold. Like how does that impact your business in the way that you think about Europe as a market opportunity and a cost structure and commercially?

Look, I think there was a number of chemical executives meeting in Antwerp last week with the European Commission, and they are all moving in the right direction. They understand the importance of having flexibility in terms of CBAM and ETF. I'm very hopeful that the changes will happen. It will definitely help the European industry, right? Otherwise, you industrialize very quickly and they wouldn't be able to compete with Middle Eastern or product from China. Maybe TBD. I'm hopeful that they move quickly. But in terms of our sort of circulating product portfolio and the MRT-1, it's -- we're in a great shape, and it wouldn't really affect what those changes.

It is interesting watching that develop for years to now only start to see pushback when it goes in a -- it's a little late. I want to open it up to any questions in the audience. We've got 2 upfront. So Roger?

It's Roger Spitz. So you're selling your assets. I can't pronounce the name in Europe to AEQUITA or whatever called, did you know at the time that they were looking to buy SABIC's European, olefin polyolefin? And how concerned by which I mean you're putting in cash right up ahead. But SABIC is not putting in cash. It's just 2 forever PIK notes, perpetual PIK notes. AEQUITA is putting in $10 million. If you have -- if they -- the SABIC assets are losing a lot of EBITDA. If they -- if this entity goes bankrupt, how many years out do they have to go bankrupt before you are no longer -- they don't -- France doesn't look back to you and SABIC to take care of the closure costs.

Sure. So lots of questions there. By the time we were going through our process, we didn't know that AEQUITA was interested or would be the obviously a winning party on the SABIC assets. if anything, we see that as a positive because now they are a larger player, they have an incentive to make the combination work with the SABIC assets and our assets. They are very sure operator. They have a very good experience in automotive. They want to be a meaningful player in chemicals. The way we structure the transaction and how which we will capitalize these assets, we are making sure that these assets will be viable for the foreseeable future, and that's why we made all the calculations on the numbers to make sure that we were handling an asset that can survive and stand on its own. They're also taking very good and qualified LYB employees. So they should be able to make it work and then combining it with the SABIC assets, I think they have a have a very, very good shot at being a meaningful player and very nimble without any of the requirements of any sort of public company. And I'm very hopeful for the new combination of AEQUITA with the SABIC and our assets.

I want to ask you, you brought up the circular portfolio. But I think just a Monday, you cut down your commitment, right? It was 2 million of recyclable and circular polymers and now it's 800,000 by 2030. So what drove that? What does it mean about MoReTec-2 or any other platforms? And I think in the past, you've been talking about getting a decent premium for these polymers. Are you still getting a premium? Or how does it compare versus, say, a year ago?

Sure. So the -- you're absolutely right, we revised our sustainability commitments earlier in the week, and this is basically to match the market realities. And you rightfully say we've delayed MoReTec-2. And with that, just normally the amount of tons that we would have generated from that asset are coming later. So we're adjusting to what will be in the market and being more realistic. In terms of the margins, we continue to see out of MoReTec-1 continue to be just as healthy as we saw on the original plan. Brand owners are still very committed. More than half of that plant is committed already, and we're very happy with the margins and the premiums really haven't moved the imbalance that we've communicated through previous earnings calls and Capital Markets Day of supply and demand in terms of pyrolysis oil and recycled plastics continues to be especially in Europe. It's very, very strong this balance, and that helps margins gives strong support for the margins. So we're very happy with that investment.

I ask a quick 1 on your maintenance schedule. So obviously, very low maintenance schedule in '26. That's why the maintenance CapEx of $800 million going back up to the 1.2 -- $1.1 billion, $1.2 billion. Given the low level of turnarounds this year, should we be concerned in like the '27, '28, '29 period that there could be a year where maintenance CapEx is significantly above that 1 to 2 level that you gave us?

No. I think look, we found a couple of -- a lot of portfolio rationalization. So that also took out a significant amount of CapEx historically. So this $1.1 billion CapEx -- maintenance CapEx going forward has been properly sized with the portfolio that we will have at hand. We're very disciplined and extremely good at managing and optimizing the CapEx. And so for example, we had an issue with our Lake Charles plant at the end of last year. So while we were repairing that piece of equipment, then we took the opportunity to do other maintenance and that allows us to then extend a little bit more the turnaround cycle. I wouldn't expect that this increases. We're incredibly good at running these assets in a safe and reliable way and very good at doing the right maintenance and scoping it correctly, so that we stay within that $1.1 billion maintenance CapEx range.

I think we can end it there.

Perfect. Thank you so much.

Thank you very much.