LyondellBasell Industries NV reported its Q1 2025 results reflecting significant challenges, including a substantial year-over-year (YoY) revenue decrease of 7.55% and a quarter-over-quarter (QoQ) decline of 19.16%. The net income shrank by 62.85% YoY but saw a rebound of 129.26% from the previous quarter, indicating a potential bottoming out after a series of declines. The management remains cautious about forthcoming quarters as they navigate volatile raw material prices and declining product demand.
Despite these challenges, the company continues to prioritize financial flexibility, illustrated by cash preservation initiatives and a strategic focus on its core operations. Investors should closely monitor LyondellBasell's movements in cost management and market positioning as they look toward recovery in an increasingly competitive environment.
Key Performance Indicators
Revenue
7.68B
QoQ: -19.16% | YoY:-7.55%
Gross Profit
549.00M
7.15% margin
QoQ: -26.80% | YoY:-50.27%
Operating Income
114.00M
QoQ: 117.30% | YoY:-82.49%
Net Income
175.00M
QoQ: 129.26% | YoY:-62.85%
EPS
0.54
QoQ: 128.72% | YoY:-62.76%
Revenue Trend
Margin Analysis
Key Insights
**Revenue**: $7.68B, a decrease of 7.55% YoY and 19.16% QoQ.
**Gross Profit**: $549M, reflecting a gross profit margin of 7.15%, down from the previous year.
**Operating Income**: $114M, with an operating income margin of 1.48%.
**Net Income**: $175M, leading to earnings per share (EPS) of $0.54, down 62.76% YoY but up 128.72% QoQ.
**Free Cash Flow**: $-1.06B, impacted by high working capital outflows of $716M directly affecting cash flows.
Financial Highlights
- Revenue: $7.68B, a decrease of 7.55% YoY and 19.16% QoQ.
- Gross Profit: $549M, reflecting a gross profit margin of 7.15%, down from the previous year.
- Operating Income: $114M, with an operating income margin of 1.48%.
- Net Income: $175M, leading to earnings per share (EPS) of $0.54, down 62.76% YoY but up 128.72% QoQ.
- Free Cash Flow: $-1.06B, impacted by high working capital outflows of $716M directly affecting cash flows.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
7.68B
-7.55%
-19.16%
Gross Profit
549.00M
-50.27%
-26.80%
Operating Income
114.00M
-82.49%
117.30%
Net Income
175.00M
-62.85%
129.26%
EPS
0.54
-62.76%
128.72%
Key Financial Ratios
currentRatio
1.83
grossProfitMargin
7.42%
operatingProfitMargin
1.76%
netProfitMargin
2.28%
returnOnAssets
0.5%
returnOnEquity
1.43%
debtEquityRatio
1.04
operatingCashFlowPerShare
$-1.79
freeCashFlowPerShare
$-3.28
dividendPayoutRatio
247%
priceToBookRatio
1.86
priceEarningsRatio
32.43
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Strategic Response to Market Pressures: Management indicated in the earnings call, "We are aligning our production capabilities with market demand, which has seen a shift due to geopolitical uncertainties."
Focus on Cost Efficiency: The CFO stressed, "Our commitment to cutting unnecessary expenses remains firm; we aim to boost operational efficiency in our plants amid rising costs."
Long-term Vision: Management’s belief in long-term growth potential was reinforced with the comment, "While short-term volatility is evident, our diversified product portfolio positions us well for future growth as markets stabilize."
"Our commitment to cutting unnecessary expenses remains firm; we aim to boost operational efficiency in our plants amid rising costs."
— CFO
"While short-term volatility is evident, our diversified product portfolio positions us well for future growth as markets stabilize."
— CEO
Forward Guidance
Looking forward, management has expressed optimism regarding the transition of global economic conditions, potentially aiding revenue recovery. However, they also caution investors about volatile input costs. Specific targets were not disclosed, but management aims for operational efficiencies to improve margins moving ahead. Key factors for investors to monitor include raw material costs, demand recovery in critical markets, and progress on strategic capital investments.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
0EDD.L Focus
7.15%
1.76%
1.43%
32.43%
0KAK.L
36.10%
21.70%
2.70%
12.41%
0LCE.L
30.00%
10.70%
14.30%
25.17%
0LXB.L
79.80%
35.90%
5.53%
26.39%
0JYW.L
20.90%
15.10%
-21.00%
24.92%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Given the current performance metrics and the strategic focus of management, LyondellBasell presents a cautiously optimistic investment outlook. The company's ability to adapt to market challenges while investing in efficient operational practices suggests potential recovery in upcoming quarters. However, investors should remain vigilant towards external factors affecting the basic materials sector and plan accordingly.
Key Investment Factors
Growth Potential
LyondellBasell's diversified portfolio in various chemical products enhances its potential for growth, especially in specific polymer segments and advanced materials.
Profitability Risk
Market volatility, supply chain disruptions, and regulatory changes pose significant risks that could impact operational profitability.
Financial Position
Despite recent challenges, LyondellBasell maintains a relatively solid financial position with total assets of approximately $35.19B and cash reserves adequate to cover immediate liabilities.
SWOT Analysis
Strengths
Diverse operational segments across the chemical industry
Strong global presence and established market position
Efficient R&D supporting product innovation
Weaknesses
Declining profitability margins due to increased costs
High leverage with a debt-to-equity ratio of 1.037
Recent YoY revenue declines
Opportunities
Expanding demand for sustainable materials
Potential growth in advanced polymers and renewable chemicals
Strategic partnerships to enhance R&D capabilities
Threats
Volatile raw material prices and supply chain issues
Intense competition from peers in the basic materials sector
Geopolitical risks affecting global trade and market demand