Mike Sisson

Mike Sisson asked if the absence of CBAM would hinder premium pricing for Blue Point products and for an update on the EU's decision timing for CBAM, also seeking insight into the company's bias for nitrogen pricing trends in the current year.

Answer

Chris Bohn, President and CEO, CF Industries, noted that CBAM is part of a broader European carbon pricing trend, and low-carbon product benefits should accrue regardless. Martin Jarosick, Vice President of Investor Relations, CF Industries, confirmed existing contracts for low-carbon product premiums in 2026 and expressed a constructive view on continued demand. He also stated that while there's room for pricing to go up in North America in the near term, a correction is expected in the back half of the year.

Mike Sisson asked about the impact of CBAM on Blue Point's premium pricing, specifically if its removal would make premiums difficult or impossible, and if its continuation would ensure premiums. He also inquired about the timing of the EU's decision on CBAM. Additionally, he asked for CF Industries' bias on nitrogen pricing for the year, whether it would stay at current levels, potentially increase, or what scenarios they foresee.

Answer

Chris Bohn, President and CEO, noted that CBAM is complex and tied to the EU ETS scheme. Bert Frost, SVP of Sales and Market Development, stated that the premium for low-carbon products is already in place with contracts for 2026, and demand is strong, asserting that carbon pricing is a 'train that has left the station.' Regarding pricing, Mr. Frost indicated that global market dynamics have led to a positive uptick, with 'still room to go' in North America, but he expects a correction in the back half of the year as planting shifts to the Southern Hemisphere.

Mike Sisson inquired about the EBITDA sensitivities for potash and nitrogen, asking if the base case is in the middle of the charts and what factors would drive results to the higher or lower end of the guidance ranges.

Answer

Ken Seitz, President and CEO, explained that for potash, the higher end of the volume range is driven by good weather and strong demand, while the lower end is due to challenged weather. On the price side, reaching the higher end of the 74-77 million ton demand range would pressure supply chains and operating rates. For nitrogen, higher operating rates (despite three planned turnarounds in 2026) drive higher volumes. Urea pricing is tight due to strong Indian demand and supply uncertainty (e.g., Iran), while ammonia prices, though strong, are expected to see some seasonal weakness.

Mike Sisson questioned how IFF plans to pivot to a growth mode after the pending sale of food ingredients, aiming to match or outperform F&F peers, focusing on the health and biosciences, scent, and taste segments.

Answer

CEO Erik Fyrwald expressed excitement for IFF's future post-portfolio optimization, focusing on R&D-heavy, innovation-driven scent, taste, and health and biosciences businesses. He highlighted strengthening capabilities, increasing commercial and innovation pipelines, and leveraging biotechnology across segments, citing examples like EnviroCap in scent and Super Carrot in taste, to accelerate growth.

Mike Sisson inquired if there are any structural issues preventing Eastman from restoring its earnings power to previous levels, and asked about the range of volumes needed in Advanced Materials (AM) and Additives and Functional Products (AFP) to achieve significant earnings growth.

Answer

Mark Costa (Board Chair and CEO) stated that the primary driver of current earnings is lower volume from economic demand, not structural problems in AM and AFP, which face cyclical market demand. He sees significant potential for pent-up demand recovery in cars, appliances, and housing. He emphasized innovation, the circular platform, and maintaining price/variable margins as key. For CI, he acknowledged structural challenges from China but noted E2P and North American demand recovery could bring earnings to $150M-$200M. He believes $225M-$250M in cost reductions will help offset structural challenges, making a return to $2 billion in earnings possible.

Mike Sisson asked about structural factors that could prevent Eastman from restoring its earnings power and the range of volumes needed in AM and AFP to underpin significant earnings growth.

Answer

Mark Costa (Board Chair and CEO, Eastman Chemical Company) attributed current lower earnings primarily to weak economic demand impacting AM, AFP, and CI for over four years. He sees significant potential from pent-up demand recovery in cars, appliances, and housing, combined with innovation (circular platform) and maintained variable margins. He believes there's no structural problem in AM and AFP, only cyclical demand. For CI, structural challenges exist in olefins/acetyls from Chinese overcapacity, but E2P and North American demand recovery can bring earnings to $150M-$200M. Overall, with $225M-$250M in cost reductions, he believes returning to $2B normalized earnings is possible.

Mike Sisson asked about potential policies or proposals to boost affordability and supply to spark paint demand, and the performance of Protective and Marine, specifically regarding data centers.

Answer

Heidi G. Petz, Chair, President, and CEO, stated that recovery requires a combination of household income, rates, and affordability, noting builder hesitation. She confirmed Protective and Marine's strength in the protective side, particularly with the AI infrastructure boom and data centers, where Sherwin-Williams is well-positioned with comprehensive solutions. Ben Meisenzahl, VP of Investor Relations, added that the company's guidance allows for capturing tailwinds if policies improve.