Hello, and welcome to the LyondellBasell Teleconference. At the request of LyondellBasell, this conference is being recorded for instant replay purposes. [Operator Instructions] I would now like to turn the conference over to Mr. David Kinney, Head of Investor Relations. Sir, you may begin.

Good day, everybody, and thank you for joining today's call. Before we begin the discussion, I would like to point out that a slide presentation accompanies today's call and is available on our website at www.lyondellbasell.com/investorrelations. Today, we will be discussing our business results while making reference to some forward-looking statements and non-GAAP financial measures. We believe the forward-looking statements are based upon reasonable assumptions, and the alternative measures are useful to investors. Nonetheless, the forward-looking statements are subject to significant risks and uncertainty. We encourage you to learn more about the factors that could lead our actual results to differ by reviewing the cautionary statements in the presentation slides and our regulatory filings, which are also available on our Investor Relations website. Comments made on this call will be in regard to our underlying business results using non-GAAP financial measures, such as EBITDA and earnings per share, excluding identified items. Additional documents on our Investor website provide reconciliations of non-GAAP financial measures to GAAP financial measures, together with other disclosures, including the earnings release and our business results discussion. A recording of this call will be available by telephone beginning at 1:00 p.m. Eastern time today until May 26 by calling (877) 660-6853 in the United States and (201) 612-7415 outside the United States. The access code for both numbers is 13743073. Joining today's call will be Peter Vanacker, LyondellBasell's Chief Executive Officer; our CFO, Michael McMurray; Kim Foley, our Executive Vice President of Global Olefins and Polyolefins and Refining; Aaron Ledet, our EVP of Intermediates and Derivatives; and Torkel Rhenman, our EVP of Advanced Polymer Solutions. During today's call, we will focus on first quarter results, current market dynamics, our near-term outlook and our long-term strategy. With that being said, I would now like to turn the call over to Peter.

Thank you, David, and welcome to all of you. We appreciate you joining us today as we discuss our first quarter results. During today's call, our leaders will be discussing results in line with the organizational changes we announced on February 19. In addition to her prior responsibilities for Refining & Supply Chain, Kim Foley is now our Executive Vice President for Global Olefins and Polyolefins. Kim will discuss the results for both O&P segments as well as the refining segments. Joining us for the first time on our earnings telephone conference in his new role as Executive Vice President, is Aaron Ledet, who is taking over responsibility from Kim in leading our Intermediates and Derivatives segment. Over more than 20 years in the petrochemical industry, with 12 of those years at LYB, Aaron has served in a variety of roles in both Europe and the United States. Most recently, Aaron was responsible for the manufacturing and commercial operations for our O&P Americas segment, where he was also responsible for developing future options for our Houston refinery. Please join me in welcoming Aaron to this call. Before we dive into the results, I hope you will invest some time to review this year's addition of our Sustainability Report that we released a few weeks ago. Over the past year, we embedded sustainability into our strategy and made significant progress on our ambitions. This year's Sustainability Report describes how LYB is making everyday sustainability a reality. Let's turn to Slide 3 and begin the discussion with our continued leadership in safety performance. There is no greater accomplishment than having every member of our team return home to their families every day in the same health as when they began their working day. This is a cornerstone of our successful and sustainable…

Thank you, Peter, and good morning, everyone. Please turn to Slide 8, and let me begin by addressing our cash generation. During the past 4 quarters, LyondellBasell generated $4.3 billion of cash from operating activities. Our team efficiently converted 93% of our EBITDA into cash over the last 12 months. At the end of the quarter, our cash balance was $2.3 billion. LYB's investment-grade balance sheet remains strong and enables us to continue to execute on our strategy and grow profitably while increasing returns for our shareholders. Let's continue with Slide 9 and review the details of our capital deployment. During the first quarter, our businesses consumed about $100 million in cash from operating activities. EBITDA improvement was more than offset by a working capital build of just over $600 million. As Peter mentioned, our working capital build was for good reasons, including higher prices and higher volumes, primarily within our O&P-EAI and I&D segments. In O&P-EAI, receivables increased with higher sales volumes as we benefited from the Red Sea logistic disruptions. Our I&D segment had higher receivables due to styrene price increases, and we rebuilt some oxyfuel inventories after fourth quarter maintenance. Our resilient cash generation has resulted in $1.8 billion returned to shareholders over the last 12 months through both dividends and share repurchases. During the quarter, we successfully issued $750 million worth of bonds to refinance our 2024 maturity, which reduced our coupon rate by 25 basis points. Our balance sheet is in great shape. We have $11 billion in long-term debt with an average maturity of about 18 years and a 4% average cost of debt. I would now like to provide a brief overview of the results from each of our segments on Slide 10. LyondellBasell's business portfolio delivered $1.1 billion of EBITDA during the first quarter. Profitability improved quarter-over-quarter in 5 of our 6 segments. In our O&P-Americas segment, the absence of fourth quarter inventory valuation benefits sequentially impacted first quarter results. Conversely, our I&D and Refining segments benefited from the absence of fourth quarter inventory valuation charges. In our fourth quarter teleconference, we outlined $105 million of first quarter estimated EBITDA impact from planned maintenance in O&P-Americas and Refining. Additional unplanned downtime from winter storm Heather in Houston and other events increased the first quarter estimated EBITDA impact from downtime by approximately $150 million. Our estimate for second quarter planned maintenance EBITDA impact remains at $30 million and is focused on a turnaround of one of the POSM units in Channelview. We continue to align our operating rates with market demand to optimize working capital. During the second quarter, we expect operating rates of 85% for our global olefins and polyolefins assets and 80% for our intermediates and derivative assets. With that, I'll turn the call over to Kim. Kim?

Thank you, Michael. After more than 35 years in various leadership positions at LYB, I am very excited to assume responsibility for our O&P segments. Earlier in my career, I was the site manager for our largest site here in Channelview, Texas. It is an honor for me to now lead LyondellBasell's work to grow and upgrade these core businesses for our company. Let's begin the segment discussions on Slide 11 with the performance of our Olefins and Polyolefins – Americas segment. –First quarter O&P-Americas EBITDA was $521 million. Lower feedstock and energy costs, coupled with stable domestic polyethylene prices, were offset by lower volumes due to planned and unplanned downtime. Olefins margins were supported by higher co-product pricing. As a reminder, fourth quarter results benefited from LIFO inventory valuation changes of $75 million. During the first quarter, the North American polyethylene demand continued to strengthen and, with the support of strong export markets, led to stable domestic prices despite new capacity entering the market. For the North American industry, domestic polyethylene sales volumes improved by more than 5% relative to the fourth quarter. The addition of new capacity to the North American market in 2023 has led to much higher exports from the region. During the first quarter, North American exports of polyethylene were significantly higher than 2023 average. For LYB, our strong domestic share in North America resulted in approximately 30% of our first quarter sales going to the export customers. In the second quarter, we expect feedstock and energy costs will remain relatively low, with LYB targeting higher operating rates following downtime in the first quarter. North American integrated polyolefin producers, including LYB, continue to benefit from a highly advantaged oil to gas ratio, leading to a significantly lower cost relative to oil-derived production. With the remainder…

Thank you, Kim, and thank you, Peter, for the kind introduction at the beginning of the call. Like Kim, I'm honored to have the opportunity to lead the Intermediates & Derivatives segment. During my career at LyondellBasell, I have served in leadership roles touching on supply chain, APS, Europe, I&D, Refining, and most recently leading O&P in the Americas. I look forward to my new responsibilities to drive value creation and growth across the core businesses within Intermediates & Derivatives at LYB. Please turn to Slide 14 as we look at the Intermediates & Derivatives segment. In the first quarter, segment EBITDA was $312 million. As a reminder, the fourth quarter results were impacted by LIFO charges of approximately $95 million. Our European propylene oxide and derivatives business benefited from logistics disruptions in the Red Sea, leading to near-shoring of local demand that drove higher volumes and margins in the region, a dynamic which has continued into the second quarter. In the first quarter, oxyfuels margins declined due to lower premiums for oxyfuels relative to gasoline. Despite these headwinds, oxyfuels margins remained more than double the level typically seen during the seasonally slow first quarter. Industry outages during the first quarter led to higher styrene margins that have since normalized in April. Looking ahead, we anticipate seasonal improvements across all businesses in the segment including benefits from the summer driving season and lower butane costs, providing support for continued strength in oxyfuels margins. In line with our guidance from the beginning of the year, we have planned maintenance underway at one of our POSM assets in Channelview, Texas. We expect higher volumes across most of our business following unplanned downtime in the first quarter. Our team continues to do a fantastic job in running our new PO/TBA facility with high reliability and utilization while ensuring superb product quality. After considering planned maintenance, we expect to operate at an average rate of about 80% of I&D capacity during the second quarter. The process to complete the sale of our ethylene oxide derivatives businesses to INEOS is well underway, and we expect to finalize the transaction in the second quarter. We anticipate a book gain on sale of $275 million, which will be reflected as an identified item during the second quarter. With that, I will turn the call over to Torkel.

Thank you, Aaron. Let's review the first quarter results for the Advanced Polymer Solutions segment on Slide 15. First quarter EBITDA was $35 million. Volumes increased 12% across our portfolio driven by improving seasonal demand and the lack of typical fourth quarter customers' downtime. Variable margins increased due to higher pricing and product mix improvements. This was offset by fixed cost investments during the quarter as we moved forward on our APS transformation. In the second quarter, we expect volumes will continue to show modest improvement benefiting from both seasonally higher demand and our growing pipeline of new business. We continue to see good momentum as we expand our growth funnel, with our team highly focused on winning projects with both new and existing customers. Utilizing both our recently acquired metal assets as well as our existing asset base, we are providing customers with innovative and sustainable solutions. We believe that our APS transformation, coupled with market recovery, will deliver results to reach the goals we laid out at our Capital Markets Day last year. With that, I will return the call back to Peter.

Thank you, Torkel. And please turn to Slide 16, and I will discuss the results for the Technology segment on behalf of Jim Seward. First quarter EBITDA of $118 million reflected higher licensing revenue and improved catalyst margins. In the second quarter, we expect that revenue associated with licensing milestones will decrease, matching fourth quarter 2023 levels, but will be slightly offset by an increased catalyst volumes. As a result, we estimate that second quarter Technology segment results will be similar or perhaps, slightly better than fourth quarter results. Please turn to Slide 17 as we discuss the near-term market outlook by regions and end markets. As you heard from our business leaders, we expect to see typical increases in seasonal demand along with some moderate improvements in markets throughout the year. In the Americas, improving export demand for polyethylene is expected to further tighten domestic markets. And additionally, low ethane costs should continue to strengthen integrated polyethylene margins. As we move through the year, we expect European markets will begin to see modest improvements. Industrial activity in the region is increasing, and we expect demand will continue to recover as long energy costs gradually improve confidence. The Red Sea logistics disruptions that bolstered first quarter demand continued to influence local purchasing decisions. China markets are exhibiting very slow but steady improvements. We're encouraged by China's targeted stimulus efforts and remain watchful for indications that these measures will deliver meaningful improvements in demand for LYB's products. For the packaging sector, demand for nondurables has been consistent. Given that destocking across the packaging value chain seems to be complete, we look forward to the potential for restocking ahead. In Building & Construction, we expect to see some benefits from moderating and perhaps falling interest rates and the inevitable recovery in demand…

[Operator Instructions] Our first question comes from the line of Steve Byrne with Bank of America.

I'm interested in the level of demand that you're hearing from your downstream polyethylene customers for your renewable products, whether [Technical Difficulty] are they willing to sign a long-term contract [Technical Difficulty] in Houston, will you [Technical Difficulty] long-term contracts [Technical Difficulty] and do you expect these to be cost plus given how hydrogen requirements [Technical Difficulty] feedstocks. So just curious whether you think this would be cost plus.

Steve, I mean, thanks for your question. This is Peter. It was a bit difficult, I mean, to understand the line was breaking up. But you were asking for our level of demand on the renewable side of polyethylene as well as if it is cost plus or not. Well, we continue to see very good traction in that market. You saw from our presentation that last year we doubled approximately the volumes of our Circulen family, so the mechanical recycles, the advanced recycles and as well the nonplastic waste renewables, so biowaste recycled products. We have -- continue to see very good demand in that regard. We see also that regulation is advancing, particularly in Europe. With regards to the contract structures, if we take our first investments in the advanced recycling technology, our MoReTec technology in the Cologne up in Wesseling, then we have a big part of the capacity already contracted. We, on purpose, do not contract the entire capacity because we believe there will be value that we can capture for that part that is not contracted once we start up the facility. We are not contracting on a cost-plus basis. I said that multiple times. These markets will have its own supply and demand, and that is actually what we currently are seeing. That means that pricing for renewable, recycled polyethylene, but also polypropylene, has its own price points that is being set in the marketplace. And all that we see is still very much aligned even ahead of what we had said in March last year at the Capital Markets Day.

Our next question comes from the line of Patrick Cunningham with Citi.

So O&P-EAI seems to be seeing some nice benefits from volume trends and firmer prices, particularly in Europe. How do you expect prices to trend into the second quarter and throughout the year? And do you get any sense we may see some reversal in this near shoring and restocking trends that you've highlighted?

Good question, Patrick. And of course, we are very pleased that we see that the situation is changing in Europe. Of course, as you alluded to and as we said in the prepared remarks, held by discontinuity because of the issues in the Red Sea. Generally spoken, and then I will hand over to Kim. Generally spoken, we see that situation not changing very rapidly because the behavior of our customers has changed, that they are buying more locally than eventually relying on cheap imports. So therefore, we expect, as we alluded to in the prepared remarks, I mean, to see further advancement in our profitability in that particular region in the second quarter. Kim, you want to add something to that?

I think the only thing that I would add, Peter, is we continue to see strength in packaging, which you alluded to in our prepared remarks. And none of us can predict what's going to happen with the supply chains, and so long as that threat is out there, I think we'll continue to see more nearshoring.

And another topic that I want to point out is everybody has noticed that now in Europe, there is consolidation announcements in the market. So if you do the back-of-the-envelope calculation of, in total, now the 3 announcements that have been made, then we're talking about approximately 1.5 million tons of ethylene capacity, that in, let's say, relatively short term should disappear in the market. Another point that I want to allude to is that the average age of crackers in Europe is about 45 years, whereby in Europe and the United States it's less than 30 years. There are about 40 crackers in Europe, close to half of them have a capacity that is lower than 500,000 tons per year. So you see that restructuring is actually starting to happen in Europe. And if these announcements are being made, then we would expect also that is being taken into consideration in the value chain, that means our customers and customers of our customers, in where they want to secure their products. Having said that, we do not see yet in Europe that there is restocking. So what Kim was alluding to is mainly based upon higher demand because of higher consumption downstream of products being produced. So it's not yet restocking.

Our next question comes from the line of Frank Mitsch with Fermium Research.

And congrats, Kim, on the new role. Why don't we stay with Europe for a minute or two? First off, you indicated that global O&P operates, you expect that 85% in the second quarter. Curious what the split might be Americas versus Europe. But it does seem that the business is catching a break with the Red Sea issues. And to your point, Peter, you also indicated that you were starting to see some rationalizations and so forth. You have already taken some actions. Is there more that we should be expecting to happen in Europe? Theoretically, the threat in the Red Sea will be neutralized, and then we'll start to see the global trade flows again, and that will obviously appear to catalyze some actions. So any color there would be very helpful.

Let me take the latter part of your question. Very good question, as usual, Frank. The latter part, I mean around our assets. You rightfully said, we took a very early step when the industry was not undertaking any steps yet, by rationalizing our polypropylene facility to 1 line in the southern part of Italy, in Brindisi. Of course, we've always said that we continue to look at all the different assets that we have in Europe, taking into consideration that we have flexible assets in Europe compared to some other assets that are still there in the industry that are not flexible, that are subscale, that were dealing with high costs, that we have a quite good position with our assets if you look at the cash cost curve in Europe. But nevertheless, as we said before, we continue to strategically evaluate our positions in Europe. As I alluded to before, we are quite positive by the dynamics around new regulation that supports the demand for recycled products. And therefore, we've also said, I mean, our Cologne assets were very strategic in that regard. We're building up our Cologne hub around, I mean, renewable polyolefins, around advanced recycling with the MoReTec investments. So that will continue to get a lot of focus as we move forward. On the short-term question with the Red Sea, anything that we can add, I mean, Kim?

I think I want to go back to the first part of Frank's question, just so I answer that. As many of you saw in the prepared remarks and the releases this morning, our first quarter North American olefins and polyolefins would operate at our crackers at about 75%. So you asked the question about operating rates for global OPAM. I would say OPAM or global O&P-Americas as well as global, Europe, Asia and International are both at 85% in the second half -- or the second quarter of the year.

Our next question comes from the line of Matthew Blair with Tudor Pickering Holt.

Could you go into your outlook for PE pricing in the second quarter as well as the back half of the year? Is it fair to say that the export demand right now is stronger than domestic demand for PE? And then also, could you talk a little bit about just overall inventory levels?

Thank you, Matthew. Before I hand over to Kim, let me point out that we are, of course, very pleased to see that domestic demand in the United States has improved by 5% versus Q4 last year. Reminding everybody that this is the strongest quarter since Q3 2022. In addition to that, as you rightfully said, I mean, the export sales continue to grow, actually breaking records, for the fourth consecutive quarter, which is not so much a surprise if you see at the cost base and if you see the differential between oil and gas. So these are very good dynamics that we see in the marketplace for PE and for producers like ourself with a very low cost basis in the Gulf. Kim?

So Peter, I think what I would add to that, and it's hidden throughout our messaging today, is that domestic demand, as you mentioned, is up, export demand is up. Just to put numbers to your comment around year-on-year. Year-on-year PE exports out of North America are up 27%. So the new capacity that's now online is absolutely being exported around the world. Those channels to market are open. We're involved in all of those. And we're very optimistic now that we have our cracker back up in Corpus Christi, that we're going to be able to fulfill all those channels. So yes, as you think about it, we've got a high oil to gas ratio, we've got low energy. The U.S. is set with a very competitive advantage to meet the demands of the world.

And a couple of points that I also want to outline here, if you look at days on hand and PE, it went down from Q4 to Q1, I mean, from 42 to 40. So you see there as well domestic demand going up, export sales, the topics, I mean, also that Kim highlighted. So we saw also that the capacity utilization [industry] despite, I mean, that we saw a lot of additional capacity being brought online, and we believe that most of that capacity is now producing, maybe a couple of exemptions there with some technical issues, but there is not a lot of major capacities in the United States that still need to come online. So we saw capacity utilization actually moving up to around 90% in PE in the United States.

Our next question comes from the line of Jeff Zekauskas with JPMorgan.

I have a 2-part question. Is the real break on polyethylene prices, the overcapacity situation in China? And do you think that what the market needs is either a tighter supply/demand balance in China or something moving China prices up in order for prices to really be affected positively in the other jurisdiction? The second part is, on Slide 11, under the our actions and talking about olefins and polyolefins America, you say balancing domestic demand with disciplined capacity utilization. What does that exactly mean?

Let me go I mean to your first question, [ Josh ]. Indeed, as you rightfully pointed out, even if we have seen a little bit of an uptick in demand in China, I would make the case that everybody is bleeding. Margins are not where they need to be. Naphtha is expensive. And then the question is how long will that last? Because there may be newer facilities, of course, that can hold on longer, but there is also quite a lot of subscale capacities in China. And I'm sure after, how much, 12, 18 months of bleeding, even 24 months of bleeding, how long will that then last until we will see some actions being undertaken? But nevertheless, despite the fact, I mean, the China supply and demand is not where it should be, you see these exports from the United States into other parts of the world reaching breaking records. So the material finds its way then into other markets, markets where maybe also, again, older facilities, not backward integrated, not flexible, fully dependent on naphtha, these are the facilities, of course, that have been very difficult to be competitive. As a consequence, we continue to believe -- you've seen, I mean, the price increases at the beginning of the year. You saw the 2 rounds of price increases in the United States last year -- at the end of last year. We have these price increases out in the market, more April and May. And there's a very strong case, if you look at everything that is happening, for those price increases, I mean, to stick. If I turn to Kim on the second question.

Second question, I think the easiest way to explain that is it's an optimization. You're going to look at what margin you have on your domestic demand, you're going to look at your incremental cost of production to export, and you're going to make the right optimization across our assets?

Our next question comes from the line of Josh Spector with UBS.

I wanted to ask on the cost side of the equation. So I mean, you continue to make good progress on your Value Enhancement plan. But at the same time, you're investing to stand up a new business in CLCS. I think, correct me if I'm wrong, that's probably a big driver about why your SG&A continues to increase, up about $100 million over the last couple of years. So I'm wondering if you could kind of break the pieces apart in terms of the benefit from VEP you see yourself getting, the costs that you're adding for that new business maybe over the next couple of years that don't have the EBITDA to match that at this point, and maybe inflation, so we can maybe better model over '24 and '25 what the actual drop-through was of the savings versus cost versus new businesses.

Let me go first, and then I hand over to Michael. Of course, I mean, we continue to be very pleased with our VEP program, the acceptance in the organization, the value that we have been able to create last year that we continue to see being created this year. We are very well on track, as I said, to reach or exceed our targets on the VEP for this year. I give you an example, I mean, because last year, mid-cycle margin value creation at the end of the year was slightly above $400 million. Bottom line, with effective margins and effective products being sold, for the year was around, I mean, $300 million. Well, a part of that $300 million, that's how the 3 pillars work, have been reinvested in building up the second pillar, and that is the business unit Circular and Low-Carbon Solutions. Not to complete amounts we have invested, but a substantial amount of that $300 million has been reinvested to build up that pillar and as such also more [Technical Difficulty]. That, of course, also leads, remember, we have bought out joint venture partners, we have done a number of bolt-on acquisitions. So of course, with that, of course, you get higher SG&A on your balance sheet. But all that is where it works together, I mean, the pillars in our strategy.

Yes, Josh, and maybe just a few more comments in regards to cost. I think we have a pretty good reputation for operating lean, which we think actually gives us an advantage versus others. When times are good, we actually continue to be disciplined. Quite frankly, in 2023, I think underlying cost control was strong. SG&A as a percent of sales totaled 3.8%, despite revenue and cost headwinds. We also made investments in our footprint when we started up PO/TBA in circularity, as you noted, and VEP, and some capability building across the enterprise. And clearly, inflation was a significant headwind last year. And as we've moved into 2024, we continue to make some targeted investments, for example, in our CLCS business and our VEP program, where we will invest about $270 million this year. 1/4 of that is OpEx, 3/4 of that is CapEx. But again, we're managing well, and driving actions this year both in CapEx and in OpEx. And so I'd say, overall, cost control is strong, and we are making targeted investments, and you can continue to expect us to manage costs well going forward.

And our portfolio management, of course, helps with that. I mean, as you know, we're almost, I mean, at the point of closing the divestiture of ethylene oxide and derivatives. And we're almost closed at closing our NATPET joint venture, and that triggers then, of course, also soon after that, a final investment decision to expand with an additional line with newer technology. So these things all work together, is what I wanted to highlight.

Our next question comes from the line of Hassan Ahmed with Alembic Global.

Peter, you obviously mentioned a couple of the joint ventures and you recently did, obviously, the NATPET sort of venture out in Saudi Arabia as well. Would love to hear your latest and greatest thoughts about where you guys stand in terms of potentially maybe consolidating the Sasol joint venture.

Thank you, Hassan. Good question. As you alluded to, I mean, in Saudi Arabia, we have lots of activities ongoing, not just with the existing joint ventures, but then, of course, also with the NATPET joint venture and then the next step with the investment. We are happy, and actually, that deal was done before my time, so I'm even super happy, with the fact that we have entered in that joint venture with Sasol. I would say, generally spoken, operation is running well in that joint venture. We're pleased, I mean, with our position that we have in there. And of course, we continue, as we have said multiple times, to always look at opportunities in the marketplace where we can grow and upgrade the core. So we are not focusing now on just one thing, but we are continuing to look at growing and upgrading the core. Having said that, we have multiple times outlined that we will be extremely disciplined in our M&A activities. Michael?

Yes. And maybe, Hassan, I'd say a couple more things. I think clearly, just looking back upon the last 2 years we've been much more active from a portfolio management perspective, both on bringing things in, but also jettisoning things where there are better owners. But I don't think it's appropriate for us as to comment on a specific transaction?

Our next question comes from the line of Kevin McCarthy with Vertical Research Partners.

Peter, last March, or March of '23 I should say, you unveiled some financial goals around your CLCS initiatives, $0.5 billion in EBITDA by 2027 en route to $1 billion in 2030. I was wondering if you could speak to your level of confidence in the March toward the first piece of that in 2027. And part of the reason I ask is, it sounds like you may not take a final investment decision on MoReTec in Houston until next year. I'm not sure exactly how long that might take to build out. But maybe you could kind of speak to the timing and ramp of tonnage extending on what you show on Slide 6. How does that 123 kilotons maybe ramp over the next 2 or 3 years towards your medium- and long-term goals?

Thank you, Kevin, for your very good question. Generally spoken, we continue to be very confident that we can reach what we have said a bit more than 1 year ago on C&LCS, but also on the overall targets that we had put out there, $0.5 billion on C&LCS 2027, and additional profitability. We are making very good progress, I mean, with the entire family. You saw that one particular slide, I mean, doubling the volumes, very good margins that we are generating for the entire family. We, as you know, Kevin, some of the parts go faster than other parts. So it's clear that the renew, CirculenRenew family goes faster because we have been in the market since a couple of years with the biowaste based polyolefins. The network that we have build up and continue to build up on the mechanical recycles, remember all the deals, and it's also on the slide that we did in Europe, and then also starting in the United States, is ramping up very fast as we had planned. And the advanced recycling parts, yes, of course, we have the first investment decision taken for the capacity in the Cologne hub. It's on track. Work is on the go, it's underway. The team is on the ground. We look positively on the time line that we have there, I mean, to reach what we had said starting up by the end of 2025. And we are now looking at, of course, the concepts, as we have alluded to and is in the slides, to double that capacity, bring, I mean, to Houston at the refinery sites, do the necessary work on the upgrading, looking at that from a technical point of view by leveraging upon our hydrotreaters that we have in the refining. So that one, I would say, you're right. I mean final investment decision not this year, but next year, and then it takes time to build. But in the meantime, what we are also doing is we are working up -- as, remember, we always said we will be technology agnostic. So we work together with different partners on the advanced recycling side. So as an off-taker of plastic oil, that we can either upgrade or move directly into our steam crackers. So from that perspective, it gives us the possibility to continue to grow with the advanced recycling polyolefins in the marketplace. So I have no indications that we would not be able to reach our targets. We continue to be very confident.

Ladies and gentlemen, our final question this morning comes from the line of Vincent Andrews with Morgan Stanley.

Can I just ask on the cash flow going forward, are we done with the working capital build? Or is there probably a little bit more of that to come in the second quarter?

Vincent, it's Michael. Yes. Well, I'd probably answer the question in 2 ways. I think for the second quarter, it should be relatively stable. But I hope things actually get better in the second half when we consume a bit. But that said, I don't expect us to consume anything that's material?

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Mr. Vanacker for any final comments.

Yes. Thank you, everybody. Very good questions. But of course, I was missing a little bit questions around our propylene oxide business, our Oxyfuels business, and our APS business. Now let me highlight that the team is doing a fantastic work in all of these businesses. We're making very good progress, and we're moving, I mean, to driving season, which, as you know, is always good for oxyfuels, I mean, from an oxyfuels point of view. We continue to see early indications that durable goods demand is going up, which is, of course, also good for our leadership position that we have in low-cost and low-carbon footprint propylene oxides. And I'm also very pleased, as I said in the prepared remarks, by seeing how we are on track in the transformation of our APS business. Our win rates, our service level, these are things that we are looking at. And Circulen has seemed or making fantastic progress. So also very pleased with that, despite, of course, certain markets on a global basis, especially in durable goods, not being at the top level yet. So it is very promising when those markets also continue back, I mean, to sustainable growth. So thank you all for the thoughtful questions. And of course, we look forward to sharing updates over the coming months as we continue to make progress on our long-term strategy. We hope you all have a great weekend. Stay well and stay safe. Thank you.

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.