Eastman Chemical Company hosted its virtual and in-person 2021 Innovation Day. During the meeting, members of Eastman’s executive management team highlighted key elements of the company’s business strategies and detailed its pathway to deliver growth through 2024.
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“Over the past several years, we have executed a strategy to position Eastman as a leading material innovation company. Central to our strategy is our compelling, innovation-driven growth model, which is succeeding in creating consistent, sustainable value for all our stakeholders,” said Mark Costa, board chair and chief executive officer. “We are leveraging our unique model to create value from disruptive macro trends, which we expect to be a strong contributor to Eastman’s growth over the next three years.”
Costa continued, “One area in particular that we are very excited about is our leadership position in the circular economy. Through our competitively advantaged molecular recycling capabilities, we are providing solutions for the plastic waste and climate crises while also creating a new vector of growth that has the potential to deliver greater than $450 million of adjusted EBITDA by 2026.”
In addition, Costa detailed how the company is strengthening execution across the organization to convert growth to value. This includes building application development, technology, and commercial capabilities, continuous cost structure improvement, and portfolio and site optimization. Taken altogether, Eastman expects:
Adjusted earnings per share compounded annual growth rate of 8 to 12 percent over the next three years
Revenue growth in specialty products that is two times underlying markets
An increase in corporate adjusted EBITDA margin to approximately 23 percent
Greater than $1.6 billion of annual operating cash flow
Approximately $2 billion of share repurchases in 2021-2022
Return on invested capital to be between 12 to 15 percent, which is significantly above cost of capital
Stating that sustainability and Environmental, Social, and Governance (ESG) are integrated into the company’s growth plans, Costa detailed the company’s path to achieve carbon neutrality by 2050. This includes increased energy efficiency, process transformation, focus on renewable energy, and by leveraging technology breakthroughs, Eastman Chemical Company