Peter Vanacker
Chief Executive Officer at LyondellBasell Industries
Thank you, Dave, and welcome to all of you. We appreciate you joining us today as we discuss our second quarter results. Yet again, our people did an excellent job navigating challenging market conditions whilst being laser-focused on the execution of our strategy.
Let's begin with Slide 3 and discuss our continued leadership in safety performance. LYB has a history of excellence in operational performance with safety being a core part of our success. Going back to 2010, we have consistently delivered industry-leading safety results. But more importantly, we have made significant improvements towards our goal to operate safely each day with zero incidents, injuries or accidents. LYB's June year-to-date total recordable incident rate for employees and contractors is 0.13. For comparison, in 2010, our incident rate was 0.42, more than three times higher than today. Safety is foundational to what we do.
Getting it right ensures the well-being of our workforce, but also benefits our operational excellence performance and financial returns. Our team has demonstrated outstanding focus to reach this point, and we remain committed to further improvements. Today, I'm excited to discuss our actions to deliver resilient results as well as the excellent progress on our long-term strategy for LYB. Please turn to Slide 4 as we briefly review the quarter.
Second quarter underlying business results improved by nearly 30% over the first quarter, driven by increased volumes from our operations. North American demand for polyolefins continues to improve, while feedstock and energy costs remain low. Our European olefins and polyolefins results improved due to our flexibility to increase our utilization of advantaged LPG feedstocks within intermediates and derivatives, the benefits from LYB's expanded PO/TBA capacity are clearly seen in our record quarterly oxyfuels sales volumes. Earnings were $2.24 per share with EBITDA of $1.4 billion. LYB generated an impressive $1.3 billion in cash from operating activities. Our strong cash generation provided support for the disciplined execution of our strategy. Let's turn to Slide 5 and review the three-pillar strategy that is driving our focus on strategic growth and long-term value creation.
As we described during fourth quarter earnings, we are making good progress on our goal to add $3 billion in incremental normalized EBITDA by 2027, with nearly one-third of that target unlocked during 2023. Last quarter, we took a deeper look into how we are building a profitable circular and low-carbon solutions business. Today, we will describe the work underway to grow and upgrade our core businesses. When we talk about growing and upgrading our core, we are very clear about the criteria we use to define businesses that are core to our portfolio. Moving to Slide 6. Let's review these criteria.
We are working hard to build up a portfolio that is focused on leading market positions and growing end markets that deliver attractive returns well above our cost of capital and leverages on access to advantaged circular and renewable feedstocks. You will see that once we have executed this transformation we will be a much more profitable, focused and streamlined company. Our decisions on investing in organic growth or disciplined M&A are grounded by our commitment to pursue attractive returns well above our cost of capital. We are leveraging LYB's technology and global market positions to increase our access to advantaged feedstocks typically found in North America and the Middle East.
And finally, as we covered last quarter, we're making great progress in building a profitable circular and low-carbon solutions business. Historically, we have defined advantaged feedstocks as low-cost NGLs in North America and the Middle East. As we grow our CLCS business, we are expanding this definition to include favorable positions for circular and renewable feedstocks. As you know, we have implemented a lot of actions to grow and upgrade our portfolio in parallel with great focus and speed. May was again a busy month for us, with the completion of the sale of our EO&D business and the acquisition of our stake in the NATPET joint venture. Importantly, we also announced a strategic review of some of our European assets that will reposition our footprint for future sustainable success.
On Slide 7, let me highlight our goals for reshaping LYB by simultaneously growing and upgrading our core businesses. We are adding value through growth investments in, for example, our PO/TBA capacity and our formation of the NATPET joint venture in Saudi Arabia. We are also continuously evaluating projects and expect to find more opportunities that will be accretive for LYB. Our value enhancement program is also delivering growth through incremental production capacity and improved margins. LYB's VEP is not a onetime cost-cutting initiative. Our VEP is our new way of working, focused on unlocking value and is becoming embedded in LYB's culture. Michael will share some more details on our VEP progress in a few moments.
Our motivation for upgrading the portfolio is illustrated on the right side of Slide 7. In some cases, upgrades were accomplished by divesting or exiting noncore businesses. One example is the Houston refinery, a capital-intensive asset that has historically only delivered brief periods of profitability. After we shut down the refinery by no later than the end of the first quarter of 2025, LYB's average EBITDA margin will actually expand by about 4 percentage points. Our divested Ethylene Oxide and Derivatives business did not provide LYB with a leading position and did not fit our criteria for growth. Simply put, we were not the best owners. The strategic review of our European assets will position our footprint for a sustainable future.
All of these moves aim towards building a stronger, more focused and more profitable business portfolio for LYB. Let's roll into our European strategic review on Slide 8. We are undertaking this review to position LYB's regional footprint for future markets. Our goal is to reshape our European business portfolio in alignment with our long-term strategy for lasting success. Europe remains a core market for LYB. Our analysis determines that the six assets listed on the top left in their current configuration do not meet LYB's criteria for our core business. At this point, all options are on the table. Just like our ethylene oxide and derivatives business, these assets could well have a strategic fit and profitable future with another owner.
Divestiture of the assets as a group or separately is a possibility, or we may determine that like our Houston refinery, rationalization is the best option for some sites. While it is too early to speculate on the outcomes, the impact on the company's global portfolio is relatively limited. As you can glean from the chart, the assets subject to review only represent about 13% of our global capacity for these product lines. LYB will continue to have a strong European presence. In I&D, our core European assets utilize LYB's world-leading PO/TBA technology. In Germany, we are investing near Cologne to build our first circular and renewable solution set. And our technology segment will maintain a strong presence in Italy and Germany.
We will continue productive engagement with all relevant stakeholders at the impacted sites. This includes local governance, our business partners, potential buyers and most importantly, our employees, who continue to demonstrate high commitment to safe, reliable and efficient operations despite the ongoing uncertainty. Our aim is to move swiftly to maximize value for LYB and all stakeholders.
With that, let me turn the call over to Michael to discuss our financial results in more detail.
