Mike Sison

Mike Sison asked if the $250 million Q1 headwind from stripping margins would persist throughout the year if February 26 metrics remain unchanged, and for sensitivity on how this headwind might diminish as the year unfolds.

Answer

President and CEO Bruce Bodine stated that if sulfur prices persist, the margin erosion component would remain constant, but noted potential offsets from moderating ammonia prices and improved turnaround/idle costs. He also highlighted better fixed cost absorption from increased production. EVP and CFO Luciano Siani Pires provided a detailed breakdown, indicating that while Q4 2025 realized stripping margins were $444/ton, current sulfur prices would imply around $400/ton. He estimated a normalized breakeven stripping margin of $250/ton with expected cost dilution from higher production, suggesting a potential $150/ton profit at $400 stripping margins.

Mike Sison asked if the $250 million Q1 EBITDA headwind from stripping margins would persist if February 26 metrics don't change, and for sensitivity on how that headwind might dissipate as the year unfolds.

Answer

President and CEO Bruce Bodine stated that if sulfur prices persist, the margin erosion component would stay constant, but ammonia prices are expected to decline, providing an offset. He also noted that better turnaround/idle costs and improved fixed cost absorption from increased production will buffer the impact. EVP and CFO Luciano Siani Pires provided a detailed breakdown, explaining that Q4 realized stripping margins were $444/ton, and adjusting for current sulfur prices, it would be around $400/ton. He estimated a normalized breakeven stripping margin around $250/ton with expected cost dilution, implying a $150/ton profit at $400 stripping margin.

Mike Sison inquired about Nutrien's EBITDA sensitivities for potash and nitrogen, asking if the base case aligns with the middle of the provided charts and what factors would drive performance towards the higher or lower ends of those ranges for the current year.

Answer

Ken Seitz, Nutrien's President and CEO, explained that for potash, the higher end of the volume range is driven by favorable weather and strong demand, while the lower end is due to challenged weather. Potash prices are influenced by supply and demand, with the higher end of the 74-77 million ton demand range potentially straining supply chains and operating rates, thus increasing prices. For nitrogen, volumes depend on operating rates, with a heavy turnaround year requiring strong execution to maintain high rates similar to the previous year. Urea prices are currently tight due to strong Indian and overall demand, coupled with geopolitical supply uncertainty (e.g., Iran), a situation that could persist. Ammonia prices, while strong, are experiencing seasonal weakness and are expected to soften slightly. Overall, Seitz expressed a constructive outlook for both volume and price across the board.

Mike Sison asked about the current industry-wide MDI cost curve across regions and Huntsman's options for its European assets if conditions do not improve. He also inquired about Huntsman's acquisition focus areas and potential divestitures.

Answer

Peter Huntsman (Chairman, CEO and President) identified energy costs as the primary disadvantage for European MDI production, suggesting Europe needs less production and protection for its industry. He stated Huntsman would pursue both acquisitions (focused on Advanced Materials applications) and divestitures, without stretching the balance sheet, possibly through JVs.

Mike Sison questioned the current MDI cost curve across regions and potential options for European assets if the downturn persists, as well as Huntsman's acquisition focus and potential for divestitures.

Answer

Peter Huntsman, Chairman, CEO, and President, explained that energy costs, particularly natural gas, are the primary drivers of cost differences in MDI production across regions. He stated that if demand doesn't improve in Europe, policymakers must decide on protecting local industry. He indicated Huntsman would pursue both acquisitions and divestitures creatively, focusing on expanding Advanced Materials applications like aerospace and adhesives, without overleveraging the balance sheet.

Mike Sison inquired about IFF's strategy to pivot to a growth mode after the pending Food Ingredients sale and how the focused portfolio (Health & Biosciences, Scent, Taste) will aim to match or outperform peer group growth rates.

Answer

CEO Erik Fyrwald expressed excitement for IFF's future post-portfolio optimization, focusing on R&D-heavy, innovation-driven Scent, Taste, and Health & Biosciences businesses. He highlighted strengthening capabilities, increasing commercial and innovation pipelines, and leveraging biotechnology across segments (e.g., EnviroCap, Super Carrot) to accelerate growth.

Mike Sison asked about the long-term potential for IFF's EBITDA margin given its current portfolio, and for a retrospective view on the N&B acquisition, including its long-term fit, risks, and synergies with legacy IFF.

Answer

CEO Jon Erik Fyrwald projected that IFF's current portfolio could achieve an EBITDA margin in the low 20s over time, with Health & Biosciences being the highest margin business and Food Ingredients being the most challenged. Reflecting on the N&B deal, he acknowledged the initial complexity but emphasized the significant progress made in clarifying the organization. He described H&B, Scent, and Taste as very strong businesses, while positioning Food Ingredients as a continuing turnaround story. The immediate focus remains on executing the 2025 plan while making strategic investments for future growth.

Mike Sison asked what factors need to align for Olin to achieve sequential EBITDA improvement throughout 2026, specifically heading into Q2 and Q3, considering cost savings and demand trends.

Answer

Ken Lane, Olin's President and CEO, emphasized Olin's focus on efficiency and cost reduction. He expressed bullishness on caustic pricing momentum and noted that cost reductions, particularly in the Epoxy business, will begin to materialize in Q1. Lane highlighted the critical importance of executing the VCM turnaround in Freeport (spanning Q1 and Q2). He expects seasonal demand recovery in Q2 and Q3 (especially water treatment) and pricing improvements to provide momentum.

Mike Sison inquired about the factors necessary for Olin to achieve sequential EBITDA improvement throughout the year, considering cost savings, demand recovery, and turnaround schedules.

Answer

Ken Lane, Olin's President and CEO, emphasized Olin's focus on efficiency and cost reduction in a difficult market. He expressed bullishness on caustic pricing and highlighted expected cost reductions in the Epoxy business starting in Q1. Lane also stressed the critical importance of executing the VCM turnaround at Freeport, which begins in Q1 and extends into Q2, reliably and safely to deliver cost reductions. He anticipates demand recovery and pricing improvement in Q2.

Mike Sison asked what factors are necessary for a recovery in Olin's chemicals business, if there are any signs pointing to a recovery in 2026, and how the earnings power of potential recovered volume compares to the past.

Answer

President and CEO Ken Lane stated Olin will continue to adjust operating rates to meet demand, with Olin's rates differentially lower than the industry. He identified North American housing as a key driver for recovery, alongside global economic growth, particularly in Asia, to absorb new capacity from China. He noted that China's increased exports of PVC and caustic require significant demand growth.

Mike Sison inquired about the necessary conditions for a recovery in the chemicals market, any signs of recovery for 2026, and the potential earnings power from a volume recovery.

Answer

Ken Lane, President and CEO, stated that Olin will continue to adjust operating rates to meet demand. He identified a housing recovery in North America and global economic growth, particularly in China, as key drivers for chemical market recovery, but noted a current lack of signs for a significant turnaround.

Mike Sisson asked about policies or proposals that could spark a recovery in paint demand, and then followed up on the Protective and Marine segment, inquiring if its strong performance was mostly protective, if it included data centers, and its potential in that area.

Answer

Chair, President, and CEO Heidi G. Petz identified household income, rates, and affordability as a 'three-legged stool' for market recovery, noting builders are waiting for these issues to be resolved. She highlighted the company's strong position with large builders. For Protective and Marine, she confirmed it's higher on the protective side and that Sherwin-Williams is exceptionally well-positioned for the AI infrastructure boom, including data centers, with solutions for every coated surface and market leadership in high-performance flooring. VP of Investor Relations Ben Meisenzahl added that if policy adjustments create tailwinds, the company's plan is built to capture those opportunities.

Mike Sison observed that Sherwin-Williams' pricing capture this year has been stronger than in the past. He asked for management's expectations regarding pricing capture in 2026 and beyond, specifically whether it is structurally better than historical levels.

Answer

Al Mistysyn, SVP of Finance and CFO, focused on the 2026 outlook, stating that the company will aggressively pursue gallon growth while balancing it with price increase effectiveness in a 'softer, for longer' demand environment. He reiterated that the reported price mix metric can be influenced by changes in segment sales, as demonstrated by the difference between Q3 and Q2, where price effectiveness was similar but mix tempered the overall price mix realization.

Mike Sison inquired about the company's pricing capture in 2025 compared to historical trends and asked if it's expected to be structurally better in 2026 and beyond.

Answer

SVP of Finance and CFO Al Mistysyn stated that forecasting beyond 2026 is difficult. He reiterated the strategy of balancing gallon growth with price increase effectiveness in a softer demand environment, noting that segment sales changes (like in Q3 2025 with better performance in commercial, new residential, and property maintenance) can impact the reported price mix realization, even if underlying price effectiveness remains similar.

Mike Sison asked about Dow's Packaging and Specialty Plastics (PSP) segment, specifically inquiring what percentage of its North American capacity is directed to the export market. He also sought Dow's perspective on the long-term strategy for export market exposure, given persistently low polyethylene margins, and whether the company considers reducing capacity in the U.S. for these markets.

Answer

Jim Fitterling, Chair and Chief Executive Officer, stated that 30%-40% of Dow's North American PSP volumes go to the export market. He highlighted the importance of ethane cracking's cost advantage and the unique product mix for export returns. Fitterling emphasized that the Americas, Middle East, and Argentina are expected to remain advantaged due to gas cost positions, guiding Dow's long-term investment strategy to maximize these low-cost regions.

Mike Sison inquired about Dow's Packaging and Specialty Plastics (PSP) segment, specifically what percentage of its North American capacity is directed to the export market. He also asked about Dow's strategy regarding reducing export capacity given persistently low polyethylene margins.

Answer

Jim Fitterling, Chair and Chief Executive Officer, stated that about 30-40% of North American PSP volumes currently go to the export market. He emphasized the importance of ethane cracking's cost advantage and product mix, noting that Americas, Middle East, and Argentina will remain advantaged, guiding Dow's investment strategy.

Mike Sison questioned the breakdown of Celanese's projected $1-$2 EPS growth for 2026, specifically how much would come from lower interest expense versus volume growth and new products, and the origin of EM volume growth (legacy Celanese vs. DuPont businesses).

Answer

Scott Richardson, President and CEO, stated that about half of the $1-$2 EPS growth for 2026 is expected from cost actions, with the majority of the remainder from the EM pipeline. Chuck Kyrish, CFO, added that a $30 million-$40 million reduction in interest expense is anticipated year-over-year. Mr. Richardson clarified that the EM portfolio is now viewed as 'all Celanese,' with engineered thermoplastics (including those from M&M and Sanoprane) being a strong growth area. He highlighted high-impact programs leveraging both historical Celanese and M&M engineered thermoplastics and elastomers for high-performance applications.

Mike Sison questioned the breakdown of the projected $1-$2 EPS growth for 2026, specifically the contributions from cost savings, lower interest expense, and volume growth/new products, and the sources of EM volume growth.

Answer

President and CEO Scott Richardson stated about half of the EPS growth is from cost actions and the majority of the rest from the EM pipeline. CFO Chuck Kyrish added $30M-$40M in interest expense reduction. Scott Richardson clarified that EM volume growth is viewed as 'all Celanese,' highlighting engineered thermoplastics and Santoprene as strong drivers in high-impact programs.

Mike Sison asked about Eastman's portfolio strategy for the next five years, specifically if any changes are needed to improve the portfolio given the difficult, unprecedented times and compressed multiples, and thoughts on M&A.

Answer

Mark Costa, Board Chair and CEO, affirmed that the core innovation-centric strategy remains correct, now augmented by aggressive cost management. He highlighted Eastman's history of portfolio discipline, including divestitures and acquisitions like Solutia and Taminco, to shift towards specialties. He stated that the company is always considering how its portfolio should evolve in the current industry context but did not provide specific details.

Mike Sison asked about Eastman's portfolio strategy, given the shift to specialty areas and recent multiple compression, questioning if changes are needed for the next five years. He also inquired if the normalized EBITDA target discussed a year ago is now achievable with less volume due to cost savings, or if significant volume recovery is still required.

Answer

Board Chair and CEO Mark Costa affirmed that the innovation-centric strategy is correct, especially during market chaos, as it defends value and creates growth. He highlighted Eastman's history of portfolio optimization through divestitures (e.g., tires, adhesives) and acquisitions (e.g., Solutia, Taminco) to become a specialty company, indicating ongoing consideration of M&A. Regarding normalized EBITDA, Mark Costa stated that volume stabilization and recovery are crucial, as innovation accelerates in stable environments. He emphasized that significant cost reductions are lowering the cost structure, and while masked by utilization headwinds this year, they will combine with volume recovery to drive attractive incremental margins and achieve the normalized EBITDA target.