Q4 2023 Delek US Holdings Inc Earnings Call
Participants
Rosy Zuklic; VP of IR and Market Intelligence; Delek US Holdings Inc
Avigal Soreq; President and CEO; Delek US Holdings Inc
Joseph Israel; Executive Vice President - Operations; Delek US Holdings Inc
Mark Hobbs; EVP - Corporate Development; Delek US Holdings Inc
Neil Mehta; Analyst; Goldman Sachs Group Inc
John Royall; Analyst; PMorgan Chase & Co
Roger Read; Analyst; Wells Fargo Securities LLC
Matthew Blair; Analyst; Tudor Pickering Holt & Co Securities LLC
Kelly Ackerman; Analyst; BofA Securities Inc
Jason Gabelman; Analyst; Cowen Inc
Presentation
Operator
Good morning, ladies and gentlemen, and welcome to the Delek US Fourth Quarter Earnings Conference Call. At this time, all lines are in listen only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call, you require muted assistance, please press star zero for the operator. This call is being recorded on Tuesday, February 27, 2024. I would now like to turn the conference over to Rosie clip, VP, Investor Relations. Please go ahead.
Rosy Zuklic
Good morning and welcome to the Delek US Fourth Quarter Earnings Conference Call. Participants on today's call will include Apple direct, President and CEO, Joseph Israel, EVP, Operations for Reuven Spiegel, EVP and Chief Financial Officer, Mark Tarr, EVP Corporate Development.
Today's presentation material can be found on the Investor Relations section of the Delek US Web site.
Slide 2 contains our Safe Harbor statement regarding forward-looking statements. We'll be making forward-looking statements during today's call. These statements involve risks and uncertainties that may cause actual results to differ materially from today's comments and factors that could cause actual results to differ are included here as well as in our SEC filings. The Company assumes no obligation to update any forward-looking statements.
I will now turn the call over to Abigail for opening remarks.
Avigal Soreq
Thank you all. Good morning, and thank you for joining us today. During the fourth quarter our operation and well at the higher end of our guidance, we did a good job of focusing on what we could control with debt. I would like to thank each member of the delisting from a market perspective, during the quarter, we saw a weakness in product demand consistent with the seasonal trends in refining, we achieved record total throughput in the quarter but still see opportunities for further operational improvement. Those that will provide the details of our refinery operation and progress at Big Spring.
We delivered another record quarter in our logistics segment consistent strong performance from our Logistics segment validates our favorable position in the Permian Basin. Our leisure segment reported its best Q4 outside of COVID year 2020.
Turning to the full year 2023 was a strong year for Telik. We achieved $950 million of adjusted EBITDA. We made significant progress on our key objectives. As a reminder, they are operational excellence, financial strength and shareholder return and executing our strategic initiatives.
In terms of operational excellence, our team delivered a solid performance across all businesses. This year, we made strategic investment in our people. This improved our foundation for profitable and sustainable go. Our planned major turnaround of the Tyler refinery was completed on time on budget and with no recordable incidents The result was improved reliability recovery and stronger capital. We are very focused on our safety practices and pushing for constant improvement. I'm pleased to report that 2023 was our best year on record for safety performance. This includes personnel and processes.
Turning to financial strength and shareholder return, we continue to be shareholder friendly. In 2023, we returned $146 million of shareholders through dividends and share buybacks. We also improved our financial position by using our strong cash flow to reduce debt by $454 million. We made progress on our strategic initiatives. As a result of our cost reduction effort, we find more efficient ways of working. This has delivered tangible results. For example, our inventory management has resulted in improvement in both ending and debt levels. We are making progress to reach our goal of $100 million run rate cost reduction.
Lastly, significant headway was made towards unlocking value intrinsic in our business.
Now turning to slide 24, our key priorities have not wavered. We'll continue our drive towards operational excellence, staying focused in safe and reliable operations. We have turnaround of our Krotz Springs refinery in Q4 of 2024. Joseph will give context on the improvement we expect post 10 out. We'll also talk about additional initiatives we are undertaking in the refining segment, financial strength and shareholder returns will remain key. We believe we are well positioned to capture opportunities. We'll continue our disciplined capital allocation with the best interest of our stakeholders in mind, we look to deliver strong portfolio performance and results. We'll continue to optimize the balance sheet and remain committed to sustainable and competitive shareholder returns. In 2023, we returned $146 million to shareholders. $85 million of this was share buybacks as we demonstrate in 2023. We are committed to shareholder returns based upon free cash flow. If we execute 2024 will remain and maintain this approach, and we'll keep a balanced approach between improving our financial strength and shareholder. Peter, on our strategic initiatives, we'll remain focused in advance for 2024. We estimate our CapEx to be approximately $330 million, which reflects a reduction from 2023 levels, the capital program. So our dedication to maintaining safe, reliable operation, enhancing our portfolio with strategic growth projects and delivering shareholder value while maintaining our financial strength and flexibility in 2024, we will continue to explore opportunities in the energy transition space that meet our return to capital objectives. We announced earlier this month at our fixed Blinkx refinery was selected by the Department of Energy for a project that will advance carbon capture technology safe, environmentally responsible manner. This project will serve our indirectly well into the decades to come.
Now I would like to turn the call over to Joseph, who will provide additional detail on our operations.
Joseph Israel
Thank you all. Again, moving to slide 5 through seven. In the fourth quarter, our team processed and back to back record high 306,000 barrels per day of total throughput in Tyler total throughputs in the fourth quarter was approximately 79,000 barrels per day. Production margin in the quarter was $11.54 per barrel and operating expenses were $5.13 per barrel, which reflects approximately $0.55 per barrel of an employee benefit accrual and accelerated tank farm work in the first quarter. The estimated total throughput in Tyler is in the 71,000 to 74,000 barrels per day range in El Dorado, total throughput in the quarter was approximately 88,000 barrels per day, a record high throughput from the plants. Our production margin was $4.94 per barrel and operating expenses of $4.58 per barrel. Estimated throughput for the first quarter is in the 82,000 to 85,000 barrels per day range. After working the underwriting fundamentals in the past several years and improving reliability, the team is focused on profit improvement opportunities mainly in the crude sourcing, asphalt and wholesale areas by accessing heavier grades. In Eldorado, we will use existing refinery configuration to improve our capabilities and optimize margins by increasing regional sales of our pipeline. On the light product side, we will improve commercial optionality in Big Spring. So total throughput for the quarter was approximately 58,000 barrels per day, driven by maintenance work mostly reflected in our guidance. But with the additional discoveries that we have addressed, our production margin was $6.5 per barrel, including an estimated unfavorable $3.40 per barrel impact from the maintenance activities. Operating expenses in Big Spring for $8.98 per barrel, including approximately $1.90 per barrel related to the additional maintenance of $1.40 per barrel for the integrity program and $0.4 per barrel related to employee benefit accrual. Estimated throughput for the first quarter is in the 63,000 to 66,000 barrels per day range. In Krotz Springs, total throughput was approximately 81,000 barrels per day of production. Margin was $4.93 per barrel and operating expenses were $4.83 per barrel. Brought springs team is preparing for the fourth quarter turnaround, which will include regular maintenance, has one of the major upgrades to our FCC and Kudu execution cost is estimated at $115 million, and expectedly term from the upgrades is approximately $30 million per year coming mainly from yield and rate flexibility improvement and energy efficiency. Plant's throughput for the first quarter is in the 73,000 to 76,000 barrels per day range and for our entire refining system implied through target is in the 289,000 to 301,000 barrels per day range as we position our oil sales for the gasoline season. In the fourth quarter, wholesale marketing contributed a loss of approximately $20 million. This is a $40 million negative variance for the third quarter. The decrease reflects seasonal trends along with challenging Mid-Con supply-demand dynamics and lowering prices. We are expecting our commercial initiatives to provide us with a better optionality in the future. Asphalt marketing contributed approximately $5 million compared with $15 million in the third quarter and consistent with our seasonal trends.
In summary, 2023 was an important and successful year for our system in many ways, our focus on people, process and equipment is giving us a strong foundation to optimize what we have and positioned our system for growth. While Tyler Krotz Springs and El Dorado of optimized operations over the years. We remain confident about our progress in Big Spring for reliability ahead of the coming gasoline season.
Us refining market dynamics for 2024 are constructed and we are well positioned to capture it is opportunity.
I will now turn the call over to Rosie for the financial variance that debt starting on Slide 8.
Rosy Zuklic
For the fourth quarter of 2023, Delek US had a loss of $165 million or $2.57 per share. Adjusted net loss was $93 million or $1.46 per share and adjusted EBITDA was $61 million. Cash flow from operations was $91 million.
On slide 9, the waterfall of adjusted EBITDA from the third quarter to the fourth quarter of 2023 showed that the primary driver for the lower results was from refining. This reflects the significantly lower cracks in the fourth quarter relative to the third quarter, logistics set a new record quarter at over $99 million. Retail was down largely due to seasonal trends, although we were in a falling crude environment. We saw lower margins but maintained strong volumes at our stores. Corporate segment costs improved compared with last quarter, largely due to lower employee benefit expenses.
Moving on to Slide 10 to discuss the cash flow. We do $80 million in cash during the quarter, ending the fourth quarter with a balance of $822 million. Cash flow from operations, as I said, was $91 million. Included in this amount is a positive $223 million of working capital. This was largely from improved inventory management and lower product prices reflected in receivables. Investing activities of $69 million is mainly for capital expenditures. Financing activities of $101 million primarily reflects paydown of debt and return to shareholders. This includes $41 million debt repayment, $20 million in buybacks, $15 million in dividends and $10 million in distribution payments.
On Slide 11, we have the breakout of the 2023 capital program and guidance for 2024 full year 2023 was $372 million, approximately 80% of the spend was for sustaining and regulatory projects, which include the major turnaround at the Tyler refinery and reliability work at the Big Spring refinery. Our forecasted 2024 capital program is $330 million, which included $255 million for sustaining and regulatory projects and $75 million for growth projects.
In refining, we plan to invest $220 million, with 93% of the capital dedicated towards sustaining and regulatory projects, most of which is for the Krotz Springs refinery, major turnaround scheduled during the fourth quarter of 2024, as well as projects at the Big Spring refinery to improve capture rates in logistics, the Company expects the capital program to be approximately $70 million with $50 million for growth projects. Both projects will advance new connections in both the Midland and Delaware gathering systems, enabling continued volume growth at the partnership. The retail segment capital expenditures are expected to be approximately $15 million. Funds are dedicated to maintaining Deltic's 250 convenience stores, including interior rebranding and reimage imaging initiatives that corporate and other segment includes approximately $25 million of capital expenditures, which is primarily to fund IT improvements. Net debt is broken out between Dallas and Dallas logistics.
On slide 12, during the quarter, we drew $80 million of cash and paid down $41 million of debt, ending the quarter with a net debt position of $78 million.
Finally, Slide 13 covers outlook items. In addition to the guidance we've provided for the first quarter of 2024, we expect operating expenses to be between $215 million and $225 million G&A to be between $60 million and $65 million, D&A to be between $90 million and $95 million and net interest expense to be between $80 million and $85 million we will now open the line for questions.
Question and Answer Session
Operator
Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your touch touch tone phone, you will hear three-tone prompt that your hand has been. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment please, for your first question. Your first question comes from Neil Mehta with Goldman Sachs. Please go ahead.
Neil Mehta
Yes.
Thank you so much team. I guess the first question is just an update on the sum-of-the-parts unlock. I know of a goal. It's something you've talked about over the last couple of years since your latest thinking around that and the milestones we should be watching.
Avigal Soreq
Indeed our you and maybe you know how much energy we have on topic in the beta during the content, significant headway in there, some of the funds going to happen.
One issue that, Mike, you wanted a more?
Mark Hobbs
Yes, no.
Okay.
At this point, I would say like, although we don't have anything specific to update or per se at this time, but we remain committed to highlighting the value that's intrinsic in our business and we're working hard towards that. But what I would say that anything that we may do, we are very focused on enhancing not only our balance sheet across all of our businesses, but we are positioning our company to generate and deliver attractive shareholder returns for the foreseeable future. So we're taking all of those things into consideration of capital, certainly to that have appreciated.
Neil Mehta
Yes, we'll state. We'll stay tuned.
And then the follow-up is just on the quarter was a little bit softer than what we expected. I guess I just love your perspective on maybe some one-time impacts. Sounds like marketing could be a dynamic there. And as we think about the sequential build from 4Q to 1Q, as MidCon margins have strengthened a little bit through the quarter. Did the anything that you would want us to keep in mind as we think about incrementals and decrementals.
Avigal Soreq
social event, and you can see those incidents we had record bookings during the call.
The investment needs on the guidance you gave in terms of G&A and OpEx and a very strong cash flow and supply and marketing. Obviously, had that we care, which is in line with seasonal trends. We have seen the plan of buy marketing here in the slide deck the previous quarter and a big positive in Q2. So there is some seasonality into that line, which is more market-driven, but the Miss and we are focusing on what we can control. And this is a good database, which all during the course of the funnel to a best-in-class digital.
Joseph Israel
Yes, the wholesale marketing contributed a negative $22 million in US funds to positive $5 million, consistent with the seasonal trends for some marketing was challenged. And I think you heard it from me. Most refiners are beyond seasonal trends driven by incremental in any known MichCon. So well-known tenant demand and housing loans, especially in December and going through a general freeze. The other element in 4Q was normally a rate probably switch to help fill deciding the catheter. But first the range of our new revenue generated by a market phenomenon, the blended at this point. So in the past several weeks to your point, the high inventory situation in the main contents zones through most of supply and demand from, let's say, the commercial optionality from posts in El Dorado, which we discussed in the prepared remarks with the help of self and discouragement to navigate will this type of thing volatility.
Neil Mehta
Thanks, Jess.
Avigal Soreq
Thank you.
Joseph Israel
Thank you.
Operator
Your next question comes from John Royall with JPMorgan.
Please go ahead by.
John Royall
Good morning. Thanks for taking my questions. So my first one is on working capital. You've talked about the inventory management side, and you mentioned there wouldn't be a reversal of 3Q's tailwind. So it looks like not only did it not reverse, but you had an even bigger tailwind in 4Q despite the falling crude price. Could you speak a little bit more to your efforts around working capital and inventory management? And is there more to go there? Should we expect further working capital tailwinds going forward? All other things equal?
Avigal Soreq
Yes, usage on the holiday schedule and maybe to give you some more kind of phenomenon.
Mark Hobbs
Sure. Good morning, and thank you for the question. On Amazon, we took a more holistic view around our balance sheet health from the beginning of the year. So the third and fourth quarter were companies that were really deflation of some of the initiatives that we have going on. Obviously, in managing and optimizing inventory was one that we did a big chunk of it in the third quarter, but the we completed the work in the fourth quarter and that contributed roughly $190 million to working capital. In addition to that, we had our ZBB efforts, which we already accomplished on a run rate of $80 billion a year of which $57 million were realized and we are in 2023, mostly in the third and fourth quarter. Our focus was debt reduction. So we do step by roughly $450 million. And that, along with the safety and reliability efforts kind of contributed to the result of the working capital.
I think with regard to going forward, we've kind of reached an equilibrium at the level of inventory we want to manage. So it will be more a result of a quality events that will impact the working capital in the future.
John Royall
That's really helpful detail.
Thank you.
And then can you talk about some of the opportunities you mentioned around energy transition? I think you mentioned carbon capture at Big Spring is committed at this point? And is there any capital in the '24 budget for this? And can you also remind us just on the status of the option you've had on the renewable side that you've spoken to in the past?
Avigal Soreq
Yes, absolutely. So at this point, we've elected to negotiate with the DOE, but there is no material CapEx capital for 2024. And we're going to do everything we will do under this Flick, a benchmark that we put on ourselves on the cost of capital return or from our standpoint. So they are not going to break that metrics, but just from a holistic standpoint, you can see a very nice system running the big spleen and they look at our marketing to read them in this area and were elected the Tulsa refinery to elect to went to electric energy transition by the DOE., which is a very big deal. And we believe that those projects will be further in the future, and we will make will make a capital advantage of capital to meet our capital benchmark with the offer we have on the renewable diesel. We are looking at that very carefully. Obviously, it's a cheap way to get the new into renewable diesel has to consider a 5,000 have renewed renewable diesel later so we are fortunate not to commit to [$200 million] and then there is a benefit from that. So we were in Fortune's founder, but the margin is very close to that. I don't know, Mark, if you want to add anything on that, so often.
Mark Hobbs
Yes, sure. Around the option, John, what we we're obviously monitoring it very closely. Our understanding based on publicly available information. That's what they're intending to start and commissioned the facility in the first quarter. And then now we will watch it as it runs through the first quarter and the second quarter. And once they hit a run rate for 90 days at 80% utilization. And that's when we would have the opportunity to take a look at it, but we're monitoring it closely as it is. I would also say it could be a potentially an attractive and low cost opportunity for us to go acquire a meaningful position in a well located in a renewable diesel facility.
So we're watching it closely.
John Royall
Thank you.
Mark Hobbs
Thank you John.
Operator
Your next question comes from Roger Read with Wells Fargo.
Please go ahead.
Roger Read
Yes, thank you. Good morning, Juan. Just two questions from me, both on the operational side, just again to follow up on the the Supply and Marketing sort of, let's call it headwinds in Q4. Is there anything as you look at Q it says, does it reverse, right? I mean, I know it's market conditions. There's a limit to what you can, let's say the buttons you can push to change that, but maybe just give us an idea of how that's kind of evolved the first couple of months of this year.
Avigal Soreq
So we are not going to give guidance to this line in the in some markets, there was a market usually give.
So we'll be consistent with our builds around that or there is a positive trend and correlated to seasonal driving season, and we are sending information out there.
From a macro standpoint on gasoline and diesel, we are definitely and we are looking at it on a five-year average below end of this, we are at the lower end of the five five evidence. So both the nuclear constructive, but beyond that general market information, we are not going to give a guidance for the Supply and Marketing.
You have something to end.
Rosy Zuklic
One thing I think that the only thing I would maybe add, Roger, it is the fact that Timothy, the weather impacts that Josip referred to and he said in his prepared remarks, were persistent through January. And, you know, I think others saw that. And so that would be the one thing that I would just be mindful of that, that obviously it will be reflected in that line.
Roger Read
Okay. Fair enough. Although I guess it seems the weather is more benign here as well, about two thirds of the way through. So if you get a tailwind from the other question I have is on slide 7, the Big Spring refinery has been typically we think of it as one of the better units overall in the Company. But it's been a challenge here recently. You've got the reliability improvement, the $100 million, two thirds roughly this year through next year. What would you point to as we look at, you know, let's call it progress. The first two quarters of the year that you're going to get capture rate above 70. I mean, is it just if the unit should run more consistently, is there some actual changes in the facilities that would affect your changing crude, you're going to put in there something along those lines. Maybe just kind of help us understand what we should look for as the favorable road signs as we go through '24?
Avigal Soreq
Yes, for sure.
And so that will give a complete answer. But I would say is that is it on a big picture standpoint, big spleen, it's a refinery that's the new one consistent, 70,000 barrels a day of throughput and mall and Visit [$525] is dollar OpEx and less you can see that the payers have to then yield before and there is no reason we cannot bring it back to where it used to be. And that's the highlight of the 100, the non-auto.
So if realized consistent has that refinery used wind farms, there is no reason we cannot get to what it used to one single geography.
Joseph Israel
As we mentioned in the remarks we own positioning explaining about ability to serve us well for LNG through the coming the gasoline season. We have been on clear execution path under IRS litigation people process and equipment and gaps. And no, it would mitigate the different rates. We should see improvement in our ability, meaning knowledge and payable metal culture from a cost structure. So as we've communicated in the past, we are expecting in throughput to stabilize north of 70,000 and it comes from a 17%. Clearly, Roger, on mid-cycle basis, OpEx run rate should stabilize around 2015 from three per barrel by end of the year and the linear reduction, maybe you'll say no, not per barrel reduction is linked quarter continuing the view would probably be on the good assumptions. So bottom line, it will take on the TL loans, paying people and process equipment. So again, Tony will be the one on when we want to get it. And we are really encouraged by the closeness. We have commenced and this surprises as the time goes by, and we are very confident about total capabilities already he's coming to Sprint.
Roger Read
All right.
Appreciate that. Thanks.
Operator
Your next question comes from Matthew Blair with TPH. Please go ahead.
Matthew Blair
Thank you and good morning.
I wanted to follow up on the sum of the parts efforts and appreciate you're hard at work here. My question is, could you talk about your openness to a sale of your retail assets and how attractive would a retail sale be relative to some other options that you might have?
Avigal Soreq
It's a great question. Everything is on the table and we are active. They have more than 1.9. So OddsOn.
Matthew Blair
Okay. (multiple speakers) Okay. And then my follow-up is on your trading and supply activities and what do you think normalized annual EBITDA for this line item should be. I have an old note in here that says roughly $130 million to $210 million as an annual ballpark figure. And I think that compares to roughly $50 million in 2023. So what do you think going forward trading and supply should contribute on an annual basis.
Avigal Soreq
Should we, A., we don't give guidance for that line and we will remain consistent with debt with the partners, the amount of deals and August, I think you have a lot of energy around that topic.
Rosy Zuklic
So yes and yes, and the thing I would say, Neil, you may have and all know, based on what previously we would have in there is, as you said, trading and supply lines, no longer trading and supply is supply and market again. And again, what we have in there is three components. There's the wholesale marketing, there's the asphalt marketing and then we have the supply business and you know the wholesale marketing and the asphalt business, you can have a little bit more ability. Now they do have fluctuations based on market conditions case in point with Joseph spoke about the fact that we had a $40 million variance between the third quarter and the fourth quarter because of the Mid-Con environment that we saw in the fourth row, the constant parity. And then obviously the movement in the rand prices and fall tends to be a little bit more and more stable. You've got seasonality with it with the fact that the months the quarters during the summer months tend to be more stable and stronger. And you got the first quarter in the fourth quarter being a little bit on the weaker side. So I think the fourth quarter is a good indicator of what a first fourth quarter tend to look like a duck stronger quarters in the middle and the second component being the supply. That was the one that's a little bit harder to model because you did in the supply business handled both supplying our refineries from a crude perspective and also unloading the refineries and also supplying our DKL system, right? And so depending on disruptions throughout the entire system, you may have a little bit of fluctuation, right? So but the other two pieces are a little bit easier to BiDil.
Matthew Blair
Great.
Thank you.
Operator
And your next question comes from Kelly acumen with Bank of America.
Kelly Ackerman
Please go ahead again, Doug sends his regards from the West Coast. I've just got a couple also on slide number six here. I guess the first question is on the crop turnaround. Just hoping that you can give us some idea of the scope of the work that you're performing and how that could potentially drive better commercial performance on the back end, whether that's reliability or whether that's in yield.
And I guess same question for Eldorado as you're thinking about the commercial opportunity there.
Avigal Soreq
To step in, if we start with the uncertainty about the UK towards things, and I will give some more color on the oil fields.
Joseph Israel
First, I would like to remind that when we tighten and our view on the $18 million of improvement will be final. So no, which we have to offer to our clients in multiple condition assumptions actually achieved 24 months between the margins on the maintenance covenant fits exactly what we expected to come back to indicated some we are expecting $70 million million of two year coming from mainly three sales volumes. Could you any findings in terms of yields and rates consolidating, in other words, former based Multi Jet fuel and has more catch-up capacity.
Second zone SAFECO, we continue to be active in funding mix, some regenerate laundries that would provide us with improved conversion and yields and innovation for unexpected events and inventory efficiency. Ongoing conference turbines from the 300 placements in a high performer and companies and stable team, Constantino.
Kelly Ackerman
I appreciate that.
Avigal Soreq
And I guess that's good because we won some highlights around in the window in June has been built in his prepared remarks that we are planning to add a bit more heavy slate, the logo and take advantage of the weakness that we are seeing here of Canadian heavy, Andres, and we are also advancing gain wholesale opportunity in the area. So and the weather was a refinery that was still to run heavier than we are running with that versus what we were running it. And we are trying to capture that opportunity.
Joseph Israel
And it's really, again, having preliminary 20 central bank turned away because of its configuration, canola to inhale benefit from Akcea, voluntary make constant improvements from us from a quality and their plants are also monitored will contribute to that, not system customer.
Kelly Ackerman
And so sorry to interrupt and guide them.
My follow-up question is just trying to understand the scope of the work, the scope of the work plan seems like it goes through 2025. So and I'm trying to understand if that suggests that '25 CapEx is going to be very similar to '24, and I'll leave it there on U.S. moving 20 homes, Confluence view, how that will you lay out this capital commitments? Are these accomplishments for '23 through '25, I think on slide number seven. So given that the workplan basically known for '25, I'm trying to get a handle on what 2025 capital looks like if you if you've argued define the work. So I'm trying to figure out if that's similar to 2024.
Joseph Israel
So meantime, who's called fully in case, someone has to fulfill the 115 in three dimensions and use of funds of 100 companies on premium food news with regards to and Alenco and there is no, really cost as committed to this point. It's mostly commercial excellence and nonhome and blending. And we will come back later in the future for Celacade field of talent, providing upgrades with billion of notice as well down the road. I know that a year from now.
Avigal Soreq
And that is the case that debt Slides 24 to 25. As you can see big spleen, which is not related to capital. Some of the upside is coming 2025. This release and the slide says 24, 25 don't seem to get it to a format to a capital commitment for commitment to 20.5, just to make it very clear that that was not the intent of the slide.
The slide will say that the benefit is going to come over time, but the turnaround, which is the heavy capital during 2024 going to be completed in 2024.
Kelly Ackerman
So I got it. That's very clear.
Thank you.
Operator
Your next question comes from Jason Gabelman with Cowen. Please go ahead.
Jason Gabelman
It's Jason Gabelman. Thanks for taking my questions on. I wanted to ask about shareholder returns that wasn't discussed yet. I think the past few press releases you had disclosed buybacks quarter to date at the time the press release came out for earnings. You didn't do that this quarter. So wondering if you have made any buybacks quarter to date and the outlook for repurchases through 2024.
Avigal Soreq
I think thanks for the question and I will give an overview about what we are thinking and how we think about the capital return to invest. So first of all, in Sweden will be we are very committed to shareholder return. We had a performance free cash flow this year over $146 million of the $85 million of the buyback and $61 million of dividends. We are committed to maintain the same philosophy going into 2024. And there you can probably appreciate that we've bought 8%, 8% of our sales of 2023. So nothing of what we are disclosing is the way to suggest any waiver of our boat. We are very committed to shareholder return. We want to see, as I said, market leader around it, and we are pointing us to the path to that standard.
Jason Gabelman
Okay.
So sorry, it's a bit difficult to hear you on does that 8% level kind of something you feel like that's achievable either in 2024 and or in a mid-cycle environment?
Avigal Soreq
So in fact, it was not a midcycle environment we want to do it from free cash flow is so we are committed to this and the MP. five do you have in finding more will depend on market condition as opposed to project market condition. And I'm optimistic about market condition, but you will hold me to that number and I don't want to be held to a number that the market conditions, even units understand the state of mind is find ways to bring return to shareholder on the share of them shorter, medium and long term. And we are committed to all of them. And you have seen that as you have seen us demonstrate that, Jason, last year very nicely. We did. We did exactly what we said we're going to do and we will keep doing what we say it was going look.
Jason Gabelman
Okay. On Understood. And maybe just your comment on demand that you're seeing in the niche markets that you operate in.
Avigal Soreq
And so I think there's there was enough discussion by the weather in everyone there at Covance. So we are not going to talk about whether there are other than the weather with other than the weather. We have a very good niche market and we are very blessed and optimistic on that.
Jason Gabelman
Okay. Thanks.
Operator
Ladies and gentlemen, as a reminder, should you have a question, please.
Star one.
There are no further questions at this time. I would now like to turn the conference over to Michael priest. Please proceed.
Avigal Soreq
Thank you. I would like to thank my colleagues around the table.
Well, again, I want to thank the Board of Directors or our Invesco. Obviously the join us for this call. And most importantly, to our employees that make this company what it is, and we'll talk to you again in the next call and thank you, operator.
Operator
Thank you. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.
