Celanese Corporation · NYSE:CE
Celanese — Investor Day (December 2006)
120 slides from Celanese's investor day presentation, Dec 13, 2006
Slide 1: A Leading Global Chemical Company
Chemical Products 2006 Revenue (est): $4.6 B 2006 Op. EBITDA (est): $0.85 B Acetate Products 2006 Revenue (est): $0.7 B 2006 Op. EBITDA (est): $0.14 B Technical Polymers Ticona 2006 Revenue (est): $0.9 B 2006 Op. EBITDA (est): $0.25 B Performance Products 2006 Revenue (est): $0.2 B 2006 Op. EBITDA (
Slide 2: An Attractive Hybrid Business Model
An Attractive Hybrid Business Model Commodity Chemicals Intermediate Products Balance of intermediate & specialty products Oil & Gas Consumer Products Motorola Toyota Sherwin-Williams Siemens Dow* Lyondell Methanex Rohm & Haas* ICI* Celanese Specialty Products Dow* Eastman* PPG* FMC* * Celanese inte
Slide 3: Balanced Global and End Market Positions
40% 35% 25% Balanced Global and End Market Positions Notes: Includes oxo alcohol and polyol derivative divestiture and pending APL acquisition End use breakdown based on 2006 est. external sales revenue Geographic breakdown based on 2005FY revenue to external customers by destination Other 11% Const
Slide 4: Execution...Growth...Value
Execution...Growth...Value Phase I : Successful Transition - 2000 to 2006 Execute transformation strategy Growing value Phase II: Deliver Growth - 2007 to 2010 Build geographic lead: Increase presence in Asia Grow downstream specialties: Drive business specific opportunities Align organization: Bett
Slide 5: Focus and strengthen portfolio
Focus and strengthen portfolio... 2000 to 2006 Portfolio Strategy Invest in specialty businesses Build strength in differentiated intermediates Extend the acetyl chain globally Reduce exposure to non-differentiated, more commodity businesses Divest non-core business lines Acquisitions Divestitures D
Slide 6: Focus and strengthen portfolio
Focus and strengthen portfolio % Revenue from Products Holding #1 or #2 Position % Revenue from Specialty Businesses 2006E1 2000 2000 2006 3rd Qtr 4th Qtr Specialty 1804 3376 90 20.4 Intermediate 1538 2452 34.6 31.6 Commodity 1614 327 Total Revenue $6.2 B Total Revenue $4.9 B 1Includes oxo alcohol a
Slide 7: Productivity on the bottom line
Productivity on the bottom line Relentless productivity improvements Total Employees; EBITDA 2000-20061 2000 2001 2002 2003 2004 2005 2006E EBITDA 533 431 517 555 801 1053 1215 Number of Employees 100 86.7 84 76.6 72.5 61.6 60.9 13.2 11.8 10.7 9.5 9.1 9.3 9.3 Celanese Operational Excellence 6-year t
Slide 8: Significantly improved earnings profile since 2000
Significantly improved earnings profile since 2000 Based on Celanese estimates 1Excludes oxo alcohol and polyol derivative divestiture and pending APL acquisition All numbers are based on CE estimates Operating EBITDA Growth1 2000 - 2006E ($MM) 300-310 125-130 90-95 110-115 40-45 528 ~1,200 Baseline
Slide 9: Enterprise value growth leads peer group
0 YE 2000 YE 2001 YE 2002 YE 2003 YE 2004 YE 2005 Current Equity 0.971514271 0.936474345 1.107965322 2.017901907 2.538804386 3.177744918 3.935 Debt 1.518 1.0433 0.6196 0.4416 2.567 3.022 2.936 Enterprise value growth leads peer group Celanese Enterprise Value Growth 2000 - 2006YTD Debt and Market Ca
Slide 10: Execution...Growth...Value
Execution...Growth...Value Phase I : Successful Transition - 2000 to 2006 Execute transformation strategy Growing Value Phase II: Deliver Growth - 2007 to 2010 Build geographic lead: Increase presence in Asia Grow downstream specialties: Drive business specific opportunities Align organization: Bett
Slide 11: 2007 - 2010: Celanese Earnings Growth Strategy
2007 - 2010: Celanese Earnings Growth Strategy Celanese 2010 Objective: $300 - $350 million in additional EBITDA growth Asia Revitalization Organic Balance Sheet Innovation Productivity improvements more than offset inflation Nanjing Complex Affiliates Acetate Emulsions Ticona - new products and app
Slide 12: Asia: Enhancing Celanese's geographic lead
Asia: Enhancing Celanese's geographic lead *Based on Celanese 2005 consolidated net sales (does not include sales from equity and cost investments). Approximately 50% of earnings from the fastest growing region 2006E Regional Split Americas Europe Asia East 40 35 25 Europe Americas Asia ~30% America
Slide 13: Revitalization and acquisition: Acetate drives earnings growth
Revitalization and acquisition: Acetate drives earnings growth 1 EBITDA as reported excluding special charges, Restructuring in Operations, Other charges. 2 JV dividends from cost investments 3Acquisition Pending Revitalization opportunities in other businesses 2004 2005 2006E 2007E 2008E Acetate Se
Slide 14: Application and Customer Innovation: Ticona
EBITDA profile increase by ? $100 MM by 2010 Application and Customer Innovation: Ticona to drive >2x GDP growth ~$250 MM 2006E EBITDA >$350 MM 2010 EBITDA Profile Drive >2x GDP Growth through 2010 Translation of existing polymers to new markets Continued Affiliate growth Innovation and new product
Slide 15: Organic growth: Acetyls continued success
Organic growth: Acetyls continued success 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006E 2007E 2008E Acetic Acid 100 107.3442623 111.7377049 112.2819672 117.252459 118.4393443 128.1967213 131.7377049 143.8557377 160.0655738 177.1803279 190.295082 196.852459 VAM 100 112.3618197 106.5369898 1
Slide 16: Goal for 2007 and beyond: more than offset inflation
Goal for 2007 and beyond: more than offset inflation Operational Excellence: more than offset inflation 2001 2002 2003 2004 2005 2006E 2007 Target Fixed cost reduction 49.2 93.7 72.6 81 116.2 77.1 78 Variable and energy improvement 8 33.6 52.9 58.6 115.7 96.8 72 75 75 75 75 75 75 Overall Company Pro
Slide 17: Realigning the businesses to accelerate growth
Acetyl Intermediates Formaldehyde Anhydride and esters VAM Acetic Acid Differentiated Intermediates Specialty Products Raw Materials Building Block Realigning the businesses to accelerate growth Legend Nutrinova Chemicals Acetate Ticona Engineered Plastics Nutrinova Emulsions Acetate Engineered Plas
Slide 18: New organizational alignment
Oxo Alcohol Divestiture 2006 Revenue (est): $0.7 billion 2006 Op. EBITDA Margin (est.): ~10% Consumer and Industrial Specialties 2006 Revenue (est): $2.2 billion 2006 Op. EBITDA Margin (est.): ~16% Advanced Engineered Materials 2006 Revenue (est): $0.9 billion 2006 Op. EBITDA Margin (est.): ~29%3 20
Slide 19: Celanese: Well positioned for growth
Celanese: Well positioned for growth Group Asia Revitalization Innovation Organic Balance Sheet Operational Excellence Consumer and Industrial Specialties X X X X Advanced Engineered Materials X X X X Acetyl Intermediates X X X Celanese Corporate X Primary Growth Focus Operating EBITDA EPS $300 - $3
Slide 20: Consumer and Industrial Specialties
Consumer and Industrial Specialties Doug Madden President, Celanese Acetate, AT Plastics, Emulsions & PVOH
Slide 21: Consumer and Industrial Specialties Group
Oxo Alcohol Divestiture 2006 Revenue (est): $0.7 B 2006 Op. EBITDA Margin (est.): ~10% Consumer and Industrial Specialties 2006 Revenue (est): $2.2B 2006 Op. EBITDA Margin (est.): ~16% Advanced Engineered Materials 2006 Revenue (est): $0.9 B 2006 Op. EBITDA Margin(est.):~29%3 2006 Pro-forma Revenue
Slide 22: Consumer and Industrial Specialties: A significant opportunity
Consumer and Industrial Specialties: A significant opportunity Consumer and Industrial Specialties background Proven track record of revitalization and growth in Acetate Growth and innovation opportunity in Industrial Specialties Successful life-cycle management in Nutrinova
Slide 23: Similar business dynamics and earnings growth opportunities
Similar business dynamics and earnings growth opportunities Over 1/3 of total Celanese revenue All specialty derivatives of Acetyl Intermediates Businesses less sensitive to economic cycles Similar consumer / end use dynamics Stable cash generation Earnings growth through revitalization and innovati
Slide 24: Aligned to deliver on unmet customer needs
Aligned to deliver on unmet customer needs Tailoring innovative solutions Key Trends CIS Group Competitive Differentiator Paints, Coatings & Adhesives (Emulsions/PVOH) Paints, Coatings & Adhesives (Emulsions/PVOH) Paints, Coatings & Adhesives (Emulsions/PVOH) Paints, Coatings & Adhesives (Emulsions/
Slide 25: Major Structural Changes to the Businesses
Major Structural Changes to the Businesses 1999 2006 APL acquisition announced Divested Emulsion Powders Acquired Air Products PVOH Acquired Clariant Emulsions Launched Acetate Revitalization Completed China venture tow expansions Improved product portfolio Built the #1 global vinyl-based emulsions
Slide 26: Acetate: Revitalization continues to deliver earnings growth
Acetate: Revitalization continues to deliver earnings growth Timeframe 2002 2003 2004 2005 2006 2007 Restructuring/Repositioning China venture tow expansions Filament exit / site optimization Historical Modest cash generation Complete Complete Beyond 2007 Maximize cash generation Selective & sustain
Slide 27: Acetate Products Limited (APL): A strategic fit
Acetate Products Limited (APL): A strategic fit Broader customer mix and reach Brings Flake integration in Europe Adds film business Increases Acetyl internal consumption 1Assumes GBP= $1.87 Acquisition amount: $~110MM1, debt free, includes working capital 2005E revenue: ~$230MM1 EBITDA margin: high
Slide 28: Acetate: Uniquely positioned in Asia, particularly China
Acetate: Uniquely positioned in Asia, particularly China Region with largest demand China represents 30% of global tow market Above average growth Tow growth projected at 2- 3% per year in China versus 1-2% in NA/EU Extending leadership All expansions on-stream early 2007 Evaluating next stage oppor
Slide 29: Acetate: Strong earnings growth continues
2004 2005 2006E 2007E 2008E Segment EBITDA 100 108 119 150 152 JV Dividends 4 2 21 30 32 APL 20 35 Acetate: Strong earnings growth continues $220 - $230 MM >100% improvement 2004 2008E Sales Revenue 700 650 220 1 2 1 EBITDA as reported excluding special charges, Restructuring in Operations, Other ch
Slide 30: Looking Ahead: Realizing the Potential
Looking Ahead: Realizing the Potential Industrial specialties: building a premier franchise Positioned via Acquisition: $200 MM to $1,050 MM Invested, Developed, Became Leader # 1 vinyl emulsions producer New product introduction Optimized R&D centers Continuous improvement - selective revitalizatio
Slide 31: Translating Vinyl Acetate success to Asia
Translating Vinyl Acetate success to Asia US Europe China Vinyls 0.954 0.472 0.244 100% acrylic 0.572 0.356 0.271 Styrene acrylics 0.274 0.472 0.186 Global Latex Emulsions Market1 Why China and Why Vinyls? Demand in China growing at >10% Diverse end-market segments Good value proposition versus comp
Slide 32: Stable earnings and cash flow from Performance Products (Nutrinova)
Stable earnings and cash flow from Performance Products (Nutrinova) Food ingredient business: High intensity sweetener (Sunett(r)) Food protection ingredients (Sorbates) Blends with flavors/other sweeteners drive penetration Leading global position with key customers: Coca Cola, Wrigley, Pepsi, Kraf
Slide 33: Consumer and Industrial Specialties Delivering Sustainable Earnings Improvement
EBITDA profile increases ?$100 MM by 2010 Consumer and Industrial Specialties Delivering Sustainable Earnings Improvement Acetate - Revitalization, China growth and APL acquisition Emulsions/PVOH - Technology, substitution, growth regions Nutrinova - Grow volumes, formulation development Collectivel
Slide 34: Advanced Engineered Materials
Advanced Engineered Materials Lyndon Cole Executive Vice President & President Ticona
Slide 35: Advanced Engineered Materials
Oxo Alcohol Divestiture 2006 Revenue (est): $0.7 B 2006 Op. EBITDA Margin (est.): ~10% Consumer and Industrial Specialties 2006 Revenue (est): $2.2 B 2006 Op. EBITDA Margin (est.): ~16% Advanced Engineered Materials 2006 Revenue (est): $0.9 B 2006 Op. EBITDA Margin (est.): ~29%3 2006 Pro-forma Reven
Slide 36: Established track record for profitable growth
Established track record for profitable growth Advanced Engineered Materials business model Growth expectations Advanced Engineered Materials is well positioned for continued growth
Slide 37: Five-year track record of earnings growth
Five-year track record of earnings growth Substantial volume growth Regional growth through affiliates Cost reductions help to offset margin compression Portfolio optimization enhances earnings profile AEM Operating EBITDA1 2001 Volume Affiliates Margin Net of Cost Reduction and Currency Portfolio O
Slide 38: Substantial margin improvement relative to peer group
1999 2000 2001 2002 2003 2004 2005 9M 2006 Ost -6.7 -6.2 -12.7 -6.2 -0.5 0.5 -1.2 5.3 Substantial margin improvement relative to peer group Peer group: corresponding segments of BASF, DSM, DuPont, GE Plastics, Solvay Plastics Zero line reflects peers average - all figures restated - Ticona figures 2
Slide 39: Established track record for profitable growth
Established track record for profitable growth Advanced Engineered Materials business model Growth expectations Advanced Engineered Materials is well positioned for continued growth
Slide 40: Focus on High Performance Polymers and Thermoplastics
96 % 4 % Standard Polymers High Performance Polymers (HPP) Engineering Thermoplastics (ETP) Global High Performance Polymer and Engineering Thermoplastics 2006E: ~8 MM tons (2006E Growth = 6 %) ABS, SAN, ASA: 4 % PE = 34 % PP = 19 % PET = 5 % PU = 6 % PVC = 17 % PS, EPS = 9 % others = 3 % Comprising
Slide 41: Strong product portfolio
Leading position in > 80 % of sales Strong product portfolio Product #1 or #2 Transportation Electrical & Electronics Consumer & Appliance Industrial Medical Hostaform(r) (Polyacetals) X X X X GUR(r) (Ultra-high molecular weight PE) X X X Celanex(r) (Polyester Engineering Resins) X X X X Vectra(r) (
Slide 42: Revenue by end use market
Automotive E&E* Industrial Consumer Appliances Alternate Fabrication Medical Others 43 7 12 11 16 5 6 Revenue by end use market 2006E~ $920MM Transportation 47% Electrical & Electronics 8% Medical 5% Industrial 10% Alternate Fabrication 12% Consumer & Appliance 12% Other 6% Exposure to a broad range
Slide 43: Fueling growth with non-automotive applications
Fueling growth with non-automotive applications 2001 2002 2003 2004 2005 2006E Sales automotive 365 413 425 423 390 390 Sales non-automotive 323 381 425 440 461 485 Volume (tons) 100 110 120 150 200 250 Steady overall growth for AEM since 2001 6% total revenue CAGR Non-automotive growth is the key d
Slide 44: Supporting customer growth with global facilities
Supporting customer growth with global facilities 2006E Sales by Region Amerika Europa Asien/Pazifik Ost 24.6 25.8 49.7 Europe 25% America 25 % Asia/Pacific 50 % Note: Regional split refers to Ticona sales + Polyplastics sales
Slide 45: Continuous investment in our global franchises
Continuous investment in our global franchises Core Investments Increased POM capacity at Kelsterbach and Bishop Doubled LCP capacity in Shelby Will build a new 20 kt GUR plant in China by 2008 Affiliate Investments Finalized POM capacity in Nantong Investing in the largest global PPS plant at Wilmi
Slide 46: Established track record for profitable growth
Established track record for profitable growth Advanced Engineered Materials business model Growth expectations Advanced Engineered Materials is well positioned for continued growth
Slide 47: Comprehensive Approach to Growth
Innovation New product development Polymer modification New polymers for existing applications / replacing of competing substrates new Products Markets Translate existing polymers to new markets new Penetration into existing markets and end-users Regional growth Increasing market share and pounds pe
Slide 48: Well represented in fastest-growth region of the world
Global CAGR: 6.2% Europe NA Japan Asia without Japan Other Ost 3267 2445 985 3854 495 West Nord 2005: 8,100 kt 2010: 10,900 kt Source: Global Insight, May 2006; SRI Thermoplastics Outlook 2005; Top Right ETP 2005; CE estimates; AMI EU 2005; Freedonia ETP in NA 2006 Europe NA Japan Asia without Japan
Slide 49: Development Processes: Foundation of Performance Business
Development Processes: Foundation of Performance Business Technology Plan Sets 3-5 year objectives Innovation roadmap Six Sigma (DFSS/DMIAC/Lean) Tools to resolve critical issues / improve streamline process Gate Process Defines new product development process Identifies critical issues Reduce innov
Slide 50: Accelerating growth with close customer relationships
Accelerating growth with close customer relationships Key Drivers Growth Platforms Advanced Acetal Advanced High Temperature Resins Translation and application development - non automotive Continued automotive application innovation Development Pipeline since 2004 (Value of customer-driven projects
Slide 51: AEM products positioned to meet evolving market requirements
Safety Sensors enable Intelligent Transportation Systems Energy Efficiency LED in cars - less energy for more comfort and safety Fuel Efficiency Light weight - Award winning Celstran(r) Large Parts AEM products positioned to meet evolving market requirements Media resistance Low moisture absorption
Slide 52: Automotive Volume Growth
Automotive Volume Growth 2001 2002 2003 2004 2005 2006E Europe 44854 49381 50667 50974 57269 58020 NA 46122 49217 45129 43986 45109 43299 Asia 22209.75 26676.45 30145.05 33925.5 37838.7 42167.25 Asia1 Europe North America 1Including affiliates Polyplastics / excluding Kepco and Fortron Well position
Slide 53: Accelerated growth in non-automotive applications
Accelerated growth in non- automotive applications Safety Medical Cookware Industrial Various Non-Automotive sensors, Lithium-Ion Batteries, Electric Shielding Applications Filters for Water filtration and Air pollution Performance Fibers for Ballistics, Protection, Engineering ropes "Hot-Spots" in
Slide 54: Incremental growth opportunity: LED
2005 2006E 2007E 2008E 2009E 2010E 2011E Global shipments in $ Mio. 4800 6600 7273 8015 8833 9734 10726 Incremental growth opportunity : LED Innovative applications for entire portfolio Use up to 90% less energy than current technologies Reduce carbon emission by ~200 MM tons 10x to 100x longer life
Slide 55: Incremental growth opportunity: global sensor growth
Incremental growth opportunity: well positioned to capture global sensor growth 1995 2000 2005 2010E 2015E US 7.6 9.4 10.1 12.1 14.7 WE 8 10.4 11.3 13.8 16.1 Japan 6.6 7.9 8.7 10.5 11.7 Asia/Pacific 2.8 4.6 8.4 13.7 19.6 ROW 4 6.9 8.7 12.4 16.4 World Sensor Demand Process Management & Control System
Slide 56: EBITDA profile increase by $100 MM by 2010
EBITDA profile increase by ? $100 MM by 2010 ?2x GDP Growth through 2010 Achieve >2X GDP growth through: Innovation and new product development Translation of existing polymers to new markets Polymer modifications Current market penetration 2001 EBITDA ? $350 MM 2010 EBITDA Profile $52 MM 2006E EBIT
Slide 57: Opening markets with new applications and offerings
Opening markets with new applications and offerings 2010 and beyond: new offerings enable market growth greater than 2x GDP Expanding Products - New Offerings Expanding Functionality Expanding Opportunity Focus on Polymer Chemistry Improved melt strength Improved impact properties Toughness Improved
Slide 58: Forward Looking Statements, Reconciliation and Use of Non-GAAP Measures
Forward Looking Statements, Reconciliation and Use of Non-GAAP Measures to U.S. GAAP
Slide 59: Acetyl Intermediates
Acetyl Intermediates John O'Dwyer President, Acetyl Intermediates, Celanese Asia
Slide 60: Acetyl Intermediates
Oxo Alcohol Divestiture 2006 Revenue (est): $0.7 B 2006 Op. EBITDA Margin (est.): ~10% Consumer and Industrial Specialties 2006 Revenue (est): $2.2 B 2006 Op. EBITDA Margin (est.): ~16% Advanced Engineered Materials 2006 Revenue (est): $0.9 B 2006 Op. EBITDA Margin (est.):~29%3 2006 Pro-forma Revenu
Slide 61: Acetyl Intermediates - An Enviable Franchise
Acetyl Intermediates - An Enviable Franchise Differentiated intermediate business Continued strong industry dynamics Celanese advantages: significant and growing
Slide 62: Acetyl Intermediates - An Enviable Franchise
Acetyl Intermediates - An Enviable Franchise Differentiated intermediate business Favorable industry structure remains Above GDP growth Continued strong industry dynamics Celanese advantages: significant and growing
Slide 63: Celanese is a leader in an advantaged industry
Celanese is a leader in an advantaged industry New Capacity Asset Location Technology Industry Structure Cost Curve Steep cost curve CE capital efficiency Overcapacity by 2008 Feedstock dependent Readily available Fragmented Top 2: ~15% of global market Relatively flat within a region Ethylene Acety
Slide 64: Favorable industry structure
Favorable industry structure Global Leader GDP+ growth Top 4 suppliers own >50% of the global capacity1 VAM Celanese Nanjing BP Sopo Lyondell Eastman Daicel Other 2006 25 6 23 6 5 3 3 29 Global Leader GDP+ 1-2% growth Well structured Industry Top 2 suppliers own >50% of the global capacity1 Acetic A
Slide 65: Celanese acetic acid and VAM growth versus market and GDP
1Source: CMAI, 1996-2008 average 2Includes Acetex and Nanjing volume 3Source: Tecnon 3Q 2006 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006E 2007E 2008E VAM 100 112.3618197 106.5369898 120.2912415 116.0182823 103.4545068 116.0820578 120.8652211 132.1215986 145.3018707 159.4387755 162.627551
Slide 66: Acetyl Intermediates - An Enviable Franchise
Acetyl Intermediates - An Enviable Franchise Differentiated intermediate business Continued strong industry dynamics Increased demand Supply follows demand improvements Celanese advantages: significant and growing
Slide 67: High utilization rates continue through 2009
High utilization rates continue through 2009 2004 2005 2006E 2007E 2008E 2009E Low Cost 7104 7356 7940 8608 9017 9303 1Based on effective capacity at 90% of nameplate (Celanese estimate) Source: Available Public Data Capacity Utilization1(Nov, 2006): 91% 93% 92% 91% 91% 92% Acetic Acid Supply-Demand
Slide 68: Project delays continue to allow increasing demand to absorb new supply
Project delays continue to allow increasing demand to absorb new supply Company Capacity Original Date CE Investor Day 2005 Comments CE Investor Day 2006 Updates Fanavaran 150KT Start 2005 Rumored to have started commissioning Commercial Production in July, 2006 Wujing 200KT Start 2005 No sign of co
Slide 69: Unmatched operating cost advantage - Nanjing widens the advantage
Unmatched operating cost advantage - Nanjing widens the advantage Source: Celanese estimates, available public data 2009E Acetic Acid Cost Curve based on Effective Capacity (kt) 0 2,000 4,000 6,000 8,000 10,000 12,000 By-prod AO Plus(tm)/Leading Competition Conventional MeOH /CO High Cost Supply Pam
Slide 70: Significant PTA growth driving acetic acid market growth
Significant PTA growth: a key factor in driving >GDP acetic acid market growth North America South America West Europe East Europe Middle East & Africa Northeast Asia South & South East Asia China 1990 2725 110 990 0 70 3240 300 555 1991 2805 110 1150 0 70 4130 355 680 1992 2910 110 1230 0 70 4440 4
Slide 71: Strong VAM market fundamentals continue through 2009
Strong VAM market fundamentals continue through 2009 2004 2005 2006E 2007E 2008E 2009E Effective Capacity 4883.3 5119.24 5483.02 5508.4 5691.7 5945.5 Demand 4784 4947 5115 5289 5469 5654 1Based on effective capacity at 94% of nameplate Source: Available Public Data Celanese Nanjing 300 kta Capacity
Slide 72: Significant opportunity for incremental VAM growth in Asia
Asia ~ 450 kta Significant opportunity for incremental VAM growth in Asia Vinyl Styrene-Acrylic Straight Acrylic Urethane Alkyd US 0.46 0.08 0.26 0.04 0.16 Vinyl Styrene-Acrylic Straight Acrylic Urethane Alkyd Other Europe 0.2 0.25 0.19 0.05 0.3 0.01 US ~ 650 kta Europe ~ 750 kta Use of VAM-based ar
Slide 73: Acetyl Intermediates - An Enviable Franchise
Acetyl Intermediates - An Enviable Franchise Differentiated intermediate business Continued strong industry dynamics Celanese advantages: significant and growing Structural changes Unsurpassed technology Earnings stability Significant organic growth
Slide 74: Recent structural changes have further increased Acetyl business focus
Acetex Acquisition Recent structural changes have further increased Acetyl business focus 2000 2006 Acrylates Divestiture Oxo Alchohol / Polyol Derivatives Divestiture Closure of Clear Lake Methanol Start-up of Singapore Acetic Acid Closure of Final Acetaldehyde Based Acetic Acid Unit Advantaged Eth
Slide 75: The result: A strong acetyl intermediate portfolio
Acetic Acid VAM Anhydride Acetate Esters Other Derivatives Methanol Ost 850 980 176 302 229 252 The result: A strong acetyl intermediate portfolio Focused on core products with world class strength: Acetic Acid, Vinyl Acetate and Downstream Derivatives Reduced product line by 49 (current = 48) with
Slide 76: Nanjing: advantaged operating costs and capital efficiency
Nanjing: advantaged operating costs and capital efficiency Source: External benchmarking, Celanese analysis. 1Raw material pricing based on prevailing regional costs; Celanese estimates 2 Middle East capital costs based on estimates to build similar facility in the Middle East Variable Costs Fixed C
Slide 77: Earnings stability from structural improvements and market conditions
Earnings stability from structural improvements and market conditions Q104 - Q306 Basic Chemical Earnings2 Q104 - Q306 Ethylene Pricing ($US/ton)1 Q104 - Q306 Methanol Pricing ($US/ton)1 Southern Methanol contract Advantaged European methanol Significant captive product consumption Producer-type eth
Slide 78: Earnings stability and growth from regional diversity
Singapore Acid = 600 VAM = 210 AMERICAS EUROPE ASIA Acetic Acid 1,490 440 1,200 VAM 725 635 510 Frankfurt VAM = 285 Tarragona VAM = 200 Bay City VAM = 300 Clear Lake Acid = 1,200 VAM = 310 Cangrejera VAM = 115 Anhydride = 90 France Acid = 440 VAM = 150 Anhydride = 30 Under consideration Nanjing Acid
Slide 79: Acetyls Intermediates: >$500 million of incremental revenues by 2010
M e r c h a n t S a l e s Emulsions 2H 2007 Acetic Acid (AO+(tm)) Mid-2007 Methanol Coal based CO Ethylene Vinyl Acetate (VAntage Plus(tm)) 2008 GUR 2H 2008 (potential) Acetic Anhydride 2H 2008 Acetyls Intermediates: >$500 million of incremental revenues by 2010 ~37% 100% ~90% ~10% 100% 20% ~43% 100
Slide 80: Acetyl Intermediates - An Enviable Franchise
Acetyl Intermediates - An Enviable Franchise Differentiated intermediate business Continued strong industry dynamics Celanese advantages: significant and growing Result: An enhanced global Acetyls leadership position driven by technology, optionality, and incremental growth Less volatile, more stabl
Slide 81: Global Operational Excellence
Global Operational Excellence Integral Part of Celanese Value Proposition Jim Alder VP Operations and Technical
Slide 82: Global Operational Excellence
Global Operational Excellence Operational Excellence Culture: Recent developments Nanjing Competitive Advantages: Update
Slide 83: Strong track record of execution versus peer group
Strong track record of execution versus peer group 2001 2002 2003 2004 East 250 400 470 760 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 Publicly available data, excluding Special Charges and Adjustments 2005 2006 YTD 2003 2004 East 100 230 470 760 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.
Slide 84: Growth and productivity are now engrained in the Celanese culture
Growth and productivity are now engrained in the Celanese culture 2001 2002 2003 2004 2005 2006 2007 East West North Manufacturing Productivity Productivity Beyond Manufacturing Growth No longer just projects or initiatives Manufacturing Beyond Mfg. Six Sigma Maintenance Excellence Mfg. Digitization
Slide 85: Improving safety and environmental performance
Improving safety and environmental performance with commitment to get better 2004 2005 2006 YTD 4th Qtr East 1.06 0.74 0.46 20.4 West 0.5 0.5 31.6 North 0.49 0.19 0.1 43.9 0.1 0.1 Energy Waste Air Emissions Spills / Releases Injury Rate East 20 25 30 75 70 West North Best-in-class safety performance
Slide 86: Breadth and depth in manufacturing productivity improvement
2000 2001 2002 2003 2004 2005 2006 YTD 97 97.51 97.8 98.4 98.6 98.2 98.4 West 98 98 98 98 98 98 98 2000 2001 2002 2003 2004 2005 2006 YTD 2.56 2.37 1.97 1.68 1.62 1.7 1.7 West 1.5 1.45 1.4 1.4 1.4 1.4 1.45 North 45.9 46.9 45 43.9 1H 2003 2H 2003 1H 2004 2H 2004 1H 2005 2H 2005 1H 2006 92.3 86.6 83 8
Slide 87: Will sustain high productivity in 2007
Will sustain high productivity in 2007 while meeting specific IPO commitment Track record of productivity with fixed cost reduction slightly more than inflation 2001 2002 2003 2004 2005 2006E 2007 Target Fixed cost reduction 49.2 93.7 72.6 81 116.2 77.1 78 Variable and energy improvement 8 33.6 52.9
Slide 88: Realization of synergies enhance acquisitions
Realization of synergies enhance acquisitions Building capabilities to acquire businesses and increase value Synergies 2X initial estimates (3-5% sales) Captured 60 % in 2005 / 2006 AO+ implementation in Pardies provides most of remainder SG&A Other Manufacturing & Technical Logistics Achieved high
Slide 89: Platform for growth in existing assets
East 15.9 7.7 7.9 8.5 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 Platform for growth in existing assets Track record of "no / low capital" expansions 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 272
Slide 90: Nanjing: Lowest cost acetyls complex in the world
Acetic Acid Unit Utilities / Tank Farm Emulsions Complex Acetic Anhydride Unit GUR Unit (potential) Flare Warehouse Vinyl Acetate Monomer Unit Administration & Maintenance Nanjing: Lowest cost acetyls complex in the world Integrated complex Leading technologies Advantaged feedstock Highly capital ef
Slide 91: Nanjing: Highly integrated complex with leading Celanese technologies
Nanjing: Highly integrated complex with leading Celanese technologies M e r c h a n t S a l e s Methanol Coal based CO Ethylene Acetic Anhydride 2H 2008 ~37% 100% ~90% ~10% 100% 20% ~43% 100% Emulsions 2H 2007 Acetic Acid (AO+(tm)) Mid-2007 GUR 2H 2008 (potential) Vinyl Acetate (VAntage Plus(tm)) 20
Slide 92: Coal gasification in China: low cost and reliable
Coal gasification in China: low cost and reliable Nanjing: Advantaged feedstock position with coal-based CO Coal Gasification Low Cost Significant cost advantage > 25% advantage versus natural gas (typical alternative feedstock) Synergies from CO and methanol co-production Reliable ~50% of the 55 co
Slide 93: Nanjing: Lowest capital acetyls complex in the world
Leveraged technology and design improvements plus low cost in China Nanjing: Lowest capital acetyls complex in the world For comparison 600 kta 210 kta 210 kta 600 kta Acetic Acid Unit Vinyl Acetate Unit For comparison 1Actual cost escalated to 2006$ at 3% / year 2Actual cost escalated to 2007$ at 3
Slide 94: Nanjing: Committed to achieving excellence in EHS
Nanjing: Committed to achieving excellence in EHS Safety Integrating Celanese standards and culture No lost time injury to-date (> 3 million man-hours) Environmental US or China standards, whichever greater whichever greater whichever greater whichever greater whichever greater whichever greater whi
Slide 95: Nanjing: Integrated approach to protecting our IP in China
Nanjing: Integrated approach to protecting our IP in China Design, Engineering, & Construction Process design developed outside China Selected equipment purchase outside China Security check on key contractor personnel Operation Including Information Control Separation of jobs, limited rotation Sele
Slide 96: Global Operational Excellence is an integral part of Celanese value proposition
Global Operational Excellence is an integral part of Celanese value proposition 6-year track record vs. peers Engrained performance culture Well positioned to reach top quartile Ongoing productivity Continuing growth in existing assets Synergies to enable future acquisitions Rapid growth in Nanjing
Slide 97: Building a Case for Value
Building a Case for Value John J. Gallagher III Executive Vice President & Chief Financial Officer
Slide 98: Agenda
Agenda 2006 Update Oxo Alcohol/polyol derivatives divestiture Ownership and Governance Changes Full-year Guidance Case for Improved Value Creation Strong Underlying Results Value of the Affiliates Efficient use of cash Performance Relative to Peer Group
Slide 99: Oxo-alcohol and polyol derivatives businesses divestiture
Oxo-alcohol and polyol derivatives businesses divestiture Celanese Assets Celanese Assets Celanese Assets E-Oxo Joint Venture (50%-50%) with Degussa E-Oxo Joint Venture (50%-50%) with Degussa Location Oberhausen Bay City Bishop Oberhausen Marl Oxo-alcohols and Esters X X X Polyols X X Olefin Derivat
Slide 100: Broader ownership position and independent governance
Private Equity Other East 0.15 0.85 Private Equity Other East 0.6 0.4 Broader ownership position and independent governance Average Daily Volume1 1,333,000 Value of float3 $3.1B 11 board members, 6 independent Majority independent governance Current December 12, 2005 Average Daily Volume1 385,000 Va
Slide 101: Continued strength in 2006
(in $ MM) 3rd Qtr 2006 9 months ended 9/30/06 Sales $1,685 up 10% $5,000 up 11% Adjusted EPS $0.79 $2.23 Operating EBITDA1 $322 up 28% $936 up 17% Continued strength in 2006 FY 2006 Guidance Adjusted EPS guidance remains at $2.70 to $2.80/share Full-year 2006 at high end of original estimates Easing
Slide 102: Agenda
Agenda 2006 Update Oxo Alcohol/polyol derivatives divestiture Ownership and Governance Changes Full-year Guidance Case for Improved Value Creation Strong Underlying Results Value of the Affiliates Efficient use of cash Performance Relative to Peer Group
Slide 103: Strong underlying results continue into 2007
Strong underlying results continue into 2007 Advanced Engineered Materials: Increase applications and volume Consumer and Industrial Specialties: Earnings growth from: Continued Acetate restructuring and APL acquisition impact Revitalization and growth for Industrial Specialties Acetyls: Strong supp
Slide 104: Affiliates continue to deliver value
2006E Additional Proportional EBITDA($MM) $5 $10 $40 $20 $75 $215 Affiliates continue to deliver value Equity Affiliates Affiliate Celanese Ownership Celanese Group 2006E Equity Earnings ($MM) Fortron Industries 50% AEM $15 Korean Eng. Plastics 50% AEM $15 Polyplastics 45% AEM $25 Infraserv <50% Ace
Slide 105: Strong cash flow generation continues
Strong cash flow generation continues Operating Cash Flow ~$680 Capital Expenditures ~($280) Free Cash Flow ~$400 Operating Cash Flow ~$700 Capital Expenditures ~($250) Free Cash Flow ~$450 2006E ($MM) CAG Squeeze out: ~($80) Pending APL acquisition: ~($110) Oxo alcohol divestiture (net): ~$450-$475
Slide 106: Efficient use of cash
Efficient use of cash Invest in our business to fuel growth and increase our technology advantages Continue to look for bolt-on accretive acquisitions Evaluate capital structure opportunities De-leverage balance sheet Return to shareholders
Slide 107: Continue to invest in growth and innovation
Continue to invest in growth and innovation AEM: Customer-driven new polymers and applications CIS: Market-driven innovation and enhanced customer focus Acetyl Intermediates: Product-driven innovation to expand Acetyl use Productivity: Process- driven technology improvements 2000-2004 avg. 2005 2006
Slide 108: Continue to look for bolt-on acquisitions
Continue to look for bolt-on acquisitions; leverage strong integration skills Broader customer mix and reach Brings Flake integration in Europe Adds film business Increases Acetyl internal consumption 1Assumes GBP= $1.87 2Based on total revenue at the time of the acquisition Acquisition cost: $~110m
Slide 109: Frankfurt Airport Settlement
Celanese reached an agreement with Frankfurt airport operator (Fraport) Fraport will compensate Celanese to relocate Ticona's Kelsterbach site Transaction subject to Fraport's AGM approval and tax neutral treatment Allows for adequate time to relocate by mid-2011 with no disruption to Ticona's busin
Slide 110: Evaluate Capital Structure Opportunities
Senior Credit Facility Senior Subordinated Notes Discount Notes Other East 1613 964 409 463 Evaluate Capital Structure Opportunities Restricted Payments ~$360M Restricted Payments ~$520M Weighted Avg. Cost of Debt 8.2% Outstanding Shares2 158.6 MM Basic 12.0 MM Preferred 2006 Dividend Payment $0.16
Slide 111: Consistent performance with peer group; valuation still trails
Consistent performance with peer group; valuation still trails Global Presence % sales in Asia 2005 ROTC1 2007E P/E Multiple2 Rohm and Haas 15% 12% 14.7 PPG 15% 15% 12.7 ICI 24% 10% 14.2 Average Average Average Average 13.9 Celanese 25% 16% 8.5 FMC 13% 13% 11.5 Dow 11% 19% 9.8 Eastman 13% 17% 13.2 A
Slide 112: Valuing Celanese
P/E Top Half Peer Group P/E Bottom Half Peer Group Celanese Competitive Average 14 11.6 Celanese 7.3 Valuing Celanese Stock Price based on Celanese 2007 EPS $2.60 - 2.90 Majority independent board of directors Strong operating performance continues Strategic value of affiliates Efficient use of shar
Slide 113: Appendix
9 Celanese Appendix
Slide 114: 2007 Guidance
2007 Guidance 2006 Pro forma Adjusted EPS $2.45 to $2.55 Adjusted EPS $2.60 to $2.90 Operating EBITDA $1,140 to $1,200 million Cash Taxes $180 - 200 million Capital Expenditure / Depreciation and Amortization Approximately $280 million Net cash interest expense $170-$190 million Estimated Tax Rate f
Slide 115: Reg G: Reconciliation of Diluted Adjusted EPS
Reg G: Reconciliation of Diluted Adjusted EPS 19
Slide 116: Reg G: Reconciliation of Net Debt
Reg G: Reconciliation of Net Debt 20
Slide 117: Reg G: Reconciliation of Other Charges and Other Adjustments
Reg G: Reconciliation of Other Charges and Other Adjustments 21
Slide 118: Reg G: Reconciliation of Operating EBITDA
Reg G: Reconciliation of Operating EBITDA 22
Slide 119: Reg G: Reconciliation of 2000 to 2005 Operating EBITDA
Reg G: Reconciliation of 2000 to 2005 Operating EBITDA
Slide 120: Peer comparison ranking
Peer comparison ranking Global Positioning 35-40% Exposure to one region Equal Exposure to the main regions Greater than 60% exposure to one region >50-60% exposure to one region >40-50% exposure to one region