EMN Financial Analysis

Analysis Date: 1/31/2025

Business Model

Eastman generates revenue through specialty materials and chemicals across multiple segments: Advanced Materials, Additives & Functional Products, Chemical Intermediates, and Fibers

Revenue Sources

• Advanced Materials (32% of revenue): Specialty plastics and materials
• Additives & Functional Products (31% of revenue): Additives and functional ingredients
• Chemical Intermediates (23% of revenue): Intermediate chemicals
• Fibers (14% of revenue): Acetate tow and textiles

Revenue Distribution by Channel

• Stable end markets: >45% of revenue
• Transportation: ~18% of revenue

Income Statement Analysis

• Sales revenue increased 2% driven by 1% higher volume/mix and 1% higher pricing
• Adjusted EBIT margin increased 350 basis points to 13.6% on higher sales volume, improved utilization and favorable price-cost
• Adjusted EPS grew 42.7% year-over-year to $1.87

Balance Sheet Analysis

• Net debt decreased by 2.7% to $4.18B with higher cash balances
• Maintained solid investment grade balance sheet with sufficient liquidity

Cash Flow Analysis

• Generated strong operating cash flow of $1.3B in FY 2024
• Returned $679M to shareholders through dividends and share repurchases in 2024

Capital Allocation

2024 capital allocation priorities included: $599M in capital expenditures, $379M in dividends, $300M in share repurchases. 2025 priorities include organic growth investments, quarterly dividend, bolt-on acquisitions and share repurchases with planned capex of $700-800M.

Management Commentary

Strong Q4 capped off tremendous year with 23% adjusted EPS growth

Successfully started up world's largest molecular recycling facility

Global economic and geopolitical environment remains highly uncertain

Overall Sentiment: Confident but cautious, focused on innovation-driven growth despite macro uncertainties

Recommendation

Rating: Buy

Reason for Rating: Strong execution, margin expansion and circular economy leadership position company well for growth

Disclaimer: This analysis is based on company filings and public information. It is for informational purposes only and not financial advice. Past performance does not guarantee future results.

Generated on: 1/31/2025, 1:35:34 PM