CEO's Message

In 2025, SABIC intensified its corporate transformation agenda to reduce costs, strengthen resilience, and enhance efficiency. In parallel, we sharpened our focus on maximizing the value-creation potential of our portfolio of businesses, assets, and technologies. The impact of our corporate transformation and portfolio-optimization efforts is reflected in the resilience and agility that SABIC displays in its 2025 financial performance.

This year, SABIC generated just over US$ 31 Bn. (SAR 116 Bn.) in revenue, a 1% year-on-year decline reflecting lower average selling prices that were only partially offset by higher sales volumes. Excluding one-off, non-operational anomalies that distort our underlying business performance, adjusted EBITDA reached US$ 4.8 Bn. (SAR 18 Bn.), approximately US$ 623 Mn. (SAR 2.34 Bn.) of which was realized by our corporate-transformation program. The 2025 adjusted EBITDA margin of 15.3%, though down 2.5 percentage points relative to 2024, nonetheless highlights the resilience to market challenges that we have developed on the basis of cost discipline and operational efficiency.

Free cash flow reached US$ 1.9 Bn. (SAR 7.125 Bn.), representing a 17% year-over-year increase driven by the way we are managing both working capital and capital expenditure. If we include the proceeds from our portfolio-optimization actions, the total cash generated amounted to US$ 3.7 Bn. (SAR 13.875 Bn.) SABIC's net cash position of nearly US$ 1 Bn. (SAR 3.75 Bn.) at the end of the year, reflecting the company's robust financial standing.

While navigating the short-term market volatility of 2025, we kept our sights on SABIC's long-term growth. We extended our transformation program beyond the near term by setting a 2030 delivery target: a US$ 3 Bn. (SAR 11.25 Bn.) annual uplift in EBITDA. To support that ambition, we upgraded our enterprise resource planning platform so that it better integrates the people, processes, and data of our workflows from beginning to end. This will enable a broadened application of artificial intelligence (AI) beyond the hundreds of AI applications already in use.

Our portfolio optimization efforts also reached several important forward-looking milestones. In early 2026, SABIC announced the divestment of its petrochemicals business in Europe and its engineering thermoplastics business in Europe and the Americas. Both transactions are expected to close before the end of 2026. We will continue to assess options for other business exits where a strategic and financial rationale exists.

Radical portfolio optimizations and corporate transformations are not easy to carry out successfully. However, SABIC has drawn on the learnings of earlier initiatives and experiences. We are continually evaluating the status of our current transformation on the basis of organizational alignment and employee engagement. We are instituting effective cross-functional collaboration not only between business verticals but also between individuals; and we are methodically setting improvement targets and cascading them across and down the organization. These targets spur us to deliver not only financial improvements but also operational ones. In 2025, for example, we achieved a 40% improvement in our plants' reliability.

We are also developing the capabilities, capacity, and mindset required to sustain the transformation indefinitely. This includes deploying talent within an operating model designed to unlock value in a streamlined and restructured organization. Our overarching priority, however, remains consistent: value creation.

Beyond performance improvements and portfolio actions, growth requires the delivery of new profit-generating projects. SABIC commissioned expansion projects at Petrokemya's and Ibn Zahr's MTBE production facilities in Saudi Arabia, adding approximately one million metric tons of annual production capacity. We also continued to advance construction of the US$ 6.4 Bn. (SAR 24 Bn.) SABIC Fujian integrated petrochemicals complex in China, one of the company's largest growth investments. The complex is expected to strengthen SABIC's presence in a key strategic market.

Long-term value creation is inseparable from sustainability. That is why SABIC's innovation agenda is focused on developing products and processes with lower carbon intensity and stronger alignment with the reduce, reuse, recycle, and remove imperatives of a circular carbon economy. We introduced 148 new product applications to help meet customers' sustainability requirements. Several of these products were independently certified as being derived from reused carbon dioxide captured at the United ethylene glycol plant in Jubail. SABIC also completed its first sale of certified low-carbon methanol in 2025.

Our advanced materials portfolio continues to gain global recognition. In 2025, our fire-retardant, fiber-filled polypropylene composite received the R&D 100 Award for its application in electric vehicle battery enclosures. Six other materials-related innovations were recognized with Edison Awards.

Sustainability also encompasses the health, safety, and development of people. Our total recordable incident rate, which includes both workplace safety and occupational health, reflects a 22% improvement compared to 2024. And despite a doubling of attempted cyberattacks relative to 2024, SABIC's cybersecurity defenses proved effective, with no material impact on operations during the year. We will remain vigilant across all areas of compliance, recognizing that heightened business risks require enhanced controls to protect the company from legal, financial, and reputational harm.

In a period of heightened uncertainty, transparent and consistent engagement with stakeholders is essential. Our strategic objectives, the challenges we must overcome, our motivational purpose, and our workplace culture – all need to be fully understood if SABIC is to transform its operations, optimize its portfolio, and selectively grow its business.

I would like to end this message by stating how proud I am of the resilience and commitment demonstrated by SABIC's employees throughout 2025. I extend my appreciation to our customers, partners, and shareholders for their continued willingness to collaborate, invest, and do business with us.

_{Disclaimer: This abridged interactive version of the SABIC Integrated Annual Report 2025 is based on the original PDF report published on this website. In case of any discrepancy, the original PDF report will prevail.}