LyondellBasell Industries N.V. — 2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021. This is an annual filing, not a standalone fourth-quarter report; the filing text does not provide a clear set of Q4-only financial results. Unless otherwise stated, amounts are in U.S. dollars.
Business context
LyondellBasell is a global chemicals, polymers, refining and process-technology company. Its six reportable segments are Olefins and Polyolefins—Americas (O&P—Americas), Olefins and Polyolefins—Europe, Asia, International (O&P—EAI), Intermediates and Derivatives (I&D), Advanced Polymer Solutions (APS), Refining and Technology. Results are sensitive to product supply and demand, feedstock and energy costs, and operating reliability.
Financial performance and liquidity
| Metric | 2021 | 2020 |
|---|---|---|
| Revenue | $46.173 billion | $27.753 billion |
| Operating income | $6.773 billion | $1.559 billion |
| Net income | $5.617 billion | $1.427 billion |
| Net income attributable to shareholders | $5.610 billion | $1.420 billion |
| Diluted EPS | $16.75 | $4.24 |
| Cash from operating activities | $7.695 billion | $3.404 billion |
| Capital expenditures | $1.959 billion | $1.947 billion |
| Total debt, including current maturities | $11.614 billion | $15.957 billion |
Segment EBITDA, the company’s segment profitability measure, was $8.689 billion versus $3.285 billion. Calculated from reported totals, operating margin was approximately 14.7% (5.6% in 2020), net margin approximately 12.2% (5.1%), and segment EBITDA margin approximately 18.8% (11.8%). These are simple ratios, not company-reported adjusted margins. Operating cash flow less capital expenditures was approximately $5.736 billion, compared with $1.457 billion.
At year-end, cash and cash equivalents plus short-term investments were $1.481 billion; total current assets were $12.217 billion and current liabilities $7.230 billion. The company reported $3.946 billion of unused availability under its credit facilities, including $3.046 billion under the revolving facility and $900 million under the receivables facility. It had $204 million of commercial paper outstanding and reported compliance with debt covenants.
Changes versus 2020
- Revenue rose 66%, primarily because higher average selling prices accounted for a 62% increase; higher volumes contributed 3% and foreign exchange 1%. Cost of sales rose 54%, mainly due to increased feedstock and energy costs.
- Operating income increased 334%. Management attributed higher EBITDA mainly to stronger margins across O&P—Americas, O&P—EAI and I&D, supported by robust demand and tight markets.
- Cash from operations more than doubled. Working capital used $960 million, principally as receivables and inventories grew with higher prices, demand and planned turnarounds.
- The company reduced long-term debt by approximately $4 billion during 2021, repurchased 5.2 million shares for $477 million, and paid $1.486 billion in common dividends. Annual dividends per share increased to $4.44 from $4.20.
- Refining EBITDA remained negative at $(624) million, compared with $(871) million in 2020; both periods included substantial non-cash refinery impairments.
Outlook, risks and unusual items
- Management expected continued strong product demand, while warning of rising feedstock and energy costs, particularly in Europe. It expected tight acetyls and propylene oxide markets and new I&D facilities in China and the U.S. to begin commissioning during 2022.
- Planned 2022 maintenance was expected to reduce EBITDA by about $125 million in O&P—Americas, $60 million in O&P—EAI and $80 million in I&D. Planned 2022 capital expenditures were approximately $2.1 billion, with about 40% directed to growth projects, mainly the Houston PO/TBA project.
- In the fourth quarter, Refining recorded a $624 million non-cash impairment after strategic-option analysis increased the likelihood the Houston refinery would be disposed of before the end of its useful life. The company was considering options including a potential sale; any transaction remained subject to board approval and other conditions.
- The Houston PO/TBA project was expected to cost approximately $3.4 billion and start up at the end of 2022. The filing says delays and other factors were expected to increase the project’s original cost estimate by approximately 40%–50%, reducing its projected return.
- Other key exposures include commodity-price and margin volatility, competition and potential oversupply, feedstock availability, unplanned outages and severe weather, pandemic and supply-chain disruption, foreign exchange, regulation and climate-related costs, plastic-waste restrictions, and project execution. Management set ambitions to produce and market 2 million metric tons of recycled and renewable-based polymers annually by 2030, reduce Scope 1 and 2 emissions 30% by 2030, and reach net-zero Scope 1 and 2 emissions by 2050.
- Environmental matters include a 2021 La Porte release of approximately 160,000 pounds of liquid process material, primarily acetic acid; the State of Texas sought injunctive relief and civil penalties, and settlement discussions were ongoing. Environmental remediation liabilities were $138 million; management said possible additional losses could not be estimated. The company stated that disclosed proceedings were not expected to have a material effect on its financial statements.
- Kenneth Lane became interim CEO in January 2022. The company reported effective disclosure controls and internal control over financial reporting; its auditor issued an unqualified opinion on the financial statements and controls.
Investor verification points
- Confirm the durability of 2021’s unusually strong margins and the effect of feedstock, energy and product-price changes on subsequent results.
- Review the Houston refinery’s strategic review, impairment assumptions, potential disposal costs and any later board decisions.
- Track PO/TBA project completion, revised cost, timing and expected returns, along with 2022 maintenance impacts and capital spending.
- Assess cash generation and liquidity after working-capital needs, dividends, share repurchases and debt maturities; verify covenant headroom and refinancing needs.
- Monitor the La Porte and other environmental proceedings, remediation estimates, and the costs and feasibility of the company’s sustainability targets.