Attached files
| file | filename |
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| EX-99.2 - EXHIBIT 99.2 - Celanese Corp | q320178-kex992.htm |
| EX-99.1(A) - EXHIBIT 99.1(A) - Celanese Corp | q320178-kex991a.htm |
| 8-K - 8-K - Celanese Corp | q320178-kdocslidesscripts.htm |
© Celanese Celanese Corporation 1
Celanese Q3 2017 Earnings
Monday, October 16, 2017
Conference Call / Webcast
Tuesday, October 17, 2017 10:00 a.m. Eastern Time
Mark Rohr, Chairman and Chief Executive Officer
Chris Jensen, EVP and Chief Financial Officer
Exhibit 99.1(b)
© Celanese Celanese Corporation 2
Forward-Looking Statements
This presentation contains "forward-looking statements," which include information concerning the Company's plans, objectives, goals, strategies, future revenues,
synergies, performance, capital expenditures, financing needs and other information that is not historical information. All forward-looking statements are based upon current
expectations and beliefs and various assumptions, including the announced joint venture transaction. There can be no assurance that the Company will realize these
expectations or that these beliefs will prove correct. There are a number of risks and uncertainties that could cause actual results to differ materially from the results
expressed or implied in the forward-looking statements contained in this presentation, including with respect to the joint venture. These risks and uncertainties include,
among other things: changes in general economic, business, political and regulatory conditions in the countries or regions in which we operate; the length and depth of
product and industry business cycles, particularly in the automotive, electrical, textiles, electronics and construction industries; changes in the price and availability of raw
materials, particularly changes in the demand for, supply of, and market prices of ethylene, methanol, natural gas, wood pulp and fuel oil and the prices for electricity and
other energy sources; the ability to pass increases in raw material prices on to customers or otherwise improve margins through price increases; the ability to maintain plant
utilization rates and to implement planned capacity additions and expansions; the ability to reduce or maintain current levels of production costs and to improve productivity
by implementing technological improvements to existing plants; the ability to identify desirable potential acquisition targets and to consummate acquisition or investment
transactions consistent with the Company's strategy; increased price competition and the introduction of competing products by other companies; market acceptance of our
technology; the ability to obtain governmental approvals and to construct facilities on terms and schedules acceptable to the Company; changes in the degree of intellectual
property and other legal protection afforded to our products or technologies, or the theft of such intellectual property; compliance and other costs and potential disruption or
interruption of production or operations due to accidents, interruptions in sources of raw materials, cyber security incidents, terrorism or political unrest or other unforeseen
events or delays in construction or operation of facilities, including as a result of geopolitical conditions, the occurrence of acts of war or terrorist incidents or as a result of
weather or natural disasters; potential liability for remedial actions and increased costs under existing or future environmental regulations, including those relating to climate
change; potential liability resulting from pending or future litigation, or from changes in the laws, regulations or policies of governments or other governmental activities in the
countries in which we operate; changes in currency exchange rates and interest rates; our level of indebtedness, which could diminish our ability to raise additional capital to
fund operations or limit our ability to react to changes in the economy or the chemicals industry; and various other factors discussed from time to time in the Company's
filings with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it is made, and the Company undertakes no
obligation to update any forward-looking statements to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or
unanticipated events or circumstances.
Results Unaudited
The results in this document, together with the adjustments made to present the results on a comparable basis, have not been audited and are based on internal financial
data furnished to management. Quarterly results should not be taken as an indication of the results of operations to be reported for any subsequent period or for the full
fiscal year.
Presentation
This document presents the Company's business segments in two subtotals, reflecting our two cores, the Acetyl Chain and Materials Solutions, based on similarities among
customers, business models and technical processes. As described in the Company's annual report on Form 10-K and quarterly reports on Form 10-Q, the Acetyl Chain
includes the Company's Acetyl Intermediates segment and the Industrial Specialties segment. Materials Solutions includes the Company's Advanced Engineered Materials
segment and the Consumer Specialties segment, which includes our cellulose derivatives business.
Non-GAAP Financial Measures
This presentation, and statements made in connection with this presentation, refer to non-GAAP financial measures. For more information on the non-GAAP financial
measures used by the Company, including the most directly comparable GAAP financial measure for each non-GAAP financial measures used, including definitions and
reconciliations of the differences between such non-GAAP financial measures and the comparable GAAP financial measures, please refer to the Non-US GAAP Financial
Measures and Supplemental Information document available on our website, www.celanese.com, under Investor Relations/Financial Information/Non-GAAP Financial
Measures.
Important Information
© Celanese Celanese Corporation 3
• Completed de-bottlenecking projects over the last year that increased output by
10 percent per unit for select POM, UHMW-PE, PPS and PBT assets in the US,
Germany, and China
• Announced plans to add production lines in the US, Italy and China to expand
compounding capacity by roughly 100 kt per year.
• Commercialized a record 585 projects in the third quarter of 2017, a 67 percent
increase from the same period last year, in engineered materials*
• Advanced the 150 kt expansion of vinyl acetate monomer at Clear Lake, Texas
facility. This expansion is expected to be commissioned at the end of 2018.
• Filed for regulatory approval of the tow joint venture with Blackstone in all six
jurisdictions and received approval in Mexico.
Recent Highlights
*Advanced Engineered Materials excluding affiliates
© Celanese Celanese Corporation 4
Opportunity Pipeline Examples
Automotive Air Duct Hand Tools
• Vehicle weight reduction continues to be a top priority
for the automotive industry
• Celanese's PPS polymers combine weld-ability with
heat and chemical resistance required in engine
applications, while significantly lower weight than metal
• Air ducts produced with PPS are blow-moldable,
reduce complexity, and improve cost-efficiency of the
manufacturing process
• Increasing customer demand for more durable and
ergonomic hand tools
• Hammer handle and grip developed with nylon polymers
(Nilit) and thermoplastic elastomers (SO.F.TER.)
• Provides improved handle strength, impact resistance,
and improved aesthetics
• Celanese's polymers save manufacturers processing
costs and time compared to wood
© Celanese Celanese Corporation 5
Net sales (in millions)
Factors Affecting Net Sales
$1,500
$1,000
$500
$0
30%
20%
10%
0%
Q3 2016 Q2 2017 Q3 2017
24.1%
21.6% 22.0%
$1,323
$1,510 $1,566
Q3 Performance
• Adjusted earnings per share of $1.93, an all-time record
• Net sales of $1.6 billion, an 18% increase year over year
• Adjusted EBIT of $345 million and adjusted EBIT margin of 22.0%
• Operating cash flow of $255 million
• Free cash flow of $181 million
*QoQ represents Q3 2017 as compared to Q2 2017; YoY represents Q3 2017 as compared to Q3 2016.
GAAP
Diluted EPS
Adjusted
EPS
Q3 2017 $1.68 $1.93
Q2 2017 $1.72 $1.79
Q3 2016 $1.83 $1.67
Total segment income margin
Celanese Corporation Q3 2017 Highlights
QoQ* YoY*
19%
16%
13%
10%
7%
4%
1%
-2%
Volume Price Currency Other Total
© Celanese Celanese Corporation 6
Net sales (in millions)
Q3 Performance Factors Affecting Net Sales
$800
$600
$400
$200
$0
40%
20%
0%
Q3 2016 Q2 2017 Q3 2017
38.1%
31.2% 31.0%
$590
$709 $730
Total core income margin
YoY Core income highlights
• Volume growth in AEM, mainly from the Nilit and
SO.F.TER. acquisitions, growth in Asia and new projects
more than offset decline in tow volume.
• Decline in acetate tow pricing driven by lower industry
utilization rate partially offset by productivity gains.
QoQ Core income highlights
• Pricing increased in AEM* across most polymer
platforms and regions.
• Increase in AEM volume was offset by production
disruptions from Hurricane Harvey at Bishop,Texas.
Materials Solutions
QoQ YoY
28%
23%
18%
13%
8%
3%
-2%
-7%
Volume Price Currency Other Total
*AEM Advanced Engineered Materials
© Celanese Celanese Corporation 7
Q3 Performance Factors Affecting Net Sales
YoY Core income highlights
• Pricing expanded, mainly in acetic acid and VAM,
driven by commercial actions and improving acetyls
landscape, in excess of increase in raw material costs.
• Volume growth in Europe and Asia offset disruption in
the Gulf Coast due to Hurricane Harvey.
QoQ Core income highlights
• Volume consistent due to constraints in second quarter
from Clear Lake, Texas turnaround and third quarter due
to Hurricane Harvey.
Net sales (in millions) Total core income margin
$900
$600
$300
$0
30%
20%
10%
0%
Q3 2016 Q2 2017 Q3 2017
14.3% 16.0%
18.2%
$763
$826 $863
QoQ YoY
15%
10%
5%
0%
-5%
Volume Price Currency Other Total
Acetyl Chain
© Celanese Celanese Corporation 8
• Operating cash flow of $255 million
• Free cash flow of $181 million; expect
roughly $800 million for the year
• Net capital expenditures of $64 million;
expect 2017 to be in the $250-300 million
range
Free Cash Flow
(in millions)
Cash flow from operations
Free cash flow
$400
$300
$200
$100
$0
Q3 2014 Q3 2015 Q3 2016 Q3 2017
$379
$173
$304
$255
$234
$101
$237
$181
Cash Flow
Anticipate cash generation of $6.2 billion between 2016 and 2020,
including dividend from proposed tow JV of $1.6 billion
Q3 2017
© Celanese Celanese Corporation 9
$2.7 billion returned to shareholders since 2012 via
dividends and share repurchases
Dividend Payout and Share Repurchases
(in millions)
Dividend Share Repurchases
$800
$600
$400
$200
$0
2014 2015 2016 YTD 2017*
Share Repurchases
Dividend
• Repurchased ~2.0 million shares
deploying $200 million in Q3 2017
• Repurchased a total of $500 million in
shares in 2017
• Returned $62 million to shareholders
in dividends in Q3 2017
$394
$701
$594
Returning Cash to Shareholders
*YTD Year-to-date as of September 30, 2017
$678