Celanese Corporation · NYSE:CE
Celanese — Merger or Acquisition (June 2017)
20 slides from Celanese's merger presentation, Jun 19, 2017
Slide 1: Celanese and Blackstone to Form Joint Venture in Acetate Tow
Celanese and Blackstone to Form Joint Venture in Acetate Tow J U N E 1 8 , 2 0 1 7 Combines complementary tow portfolios to drive innovation and enhance cost competitiveness Proceeds from transaction to be deployed in high-growth businesses at Celanese
Slide 2: Disclosures: Forward-Looking Statements
2A C E T A T E T O W J V – J U N E 2 0 1 7 Disclosures Forward-Looking Statements This presentation contains “forward-looking statements,” which include information concerning the Company’s plans, objectives, goals, strategies, future revenues, synergies, or performance, financing needs and other in
Slide 3: Agenda
3A C E T A T E T O W J V – J U N E 2 0 1 7 Agenda > Value creation at Celanese > Tow transaction de-risks portfolio and unlocks tremendous value > Clear path to accelerate growth
Slide 4: Drives value creation at Celanese
4A C E T A T E T O W J V – J U N E 2 0 1 7 …drives value creation at Celanese Structural and commercial uniqueness... Competitive Advantages Differentiated Business Models LEADERSHIP POSITIONS MANAGING COMPLEXITY GLOBAL PRESENCE BROAD PRODUCT PORTFOLIO FLEXIBLE MANUFACTURING & SUPPLY CHAIN ADVANTAGE
Slide 5: A track record of robust growth supported by strong fundamentals
5A C E T A T E T O W J V – J U N E 2 0 1 71. 2015 free cash flow excludes payment of $177 million related to the termination of an existing supplier agreement 2. 2016 free cash flow excludes voluntary payment of $300 million for pension deleveraging …supported by strong commercial and operational fu
Slide 6: Growth reinforced by capital stewardship
6A C E T A T E T O W J V – J U N E 2 0 1 7 Growth reinforced by capital stewardship... 1. ROIC for proxy peers is defined as Net Operating Profit After Tax divided by the average Invested Capital at the beginning and ending of each measurement period. ROIC for proxy peers is per Bloomberg. ROIC for
Slide 7: Numerous headwinds identified and addressed
7A C E T A T E T O W J V – J U N E 2 0 1 7 Numerous headwinds identified and addressed Taking steps to overcome the remaining headwind – tow > Currency > Industrial Ethanol > Methanol Contract Expiration > Decline in AEM Affiliate Earnings > Complexity in AEM > Weakness in Acetyl Chain Margins OFFSE
Slide 8: Acetate tow is a high-value global business
8A C E T A T E T O W J V – J U N E 2 0 1 71. Celanese estimates 2. Rhodia Acetow assets recently acquired by Blackstone ...and has delivered high levels of cash and earnings growth Acetate tow is a high-value global business… > Capacity ~270 kT > Most production in JVs with China National Tobacco Co
Slide 9: Recent shifts in Chinese demand pattern
9A C E T A T E T O W J V – J U N E 2 0 1 71. GAMA data, Euromonitor, Celanese estimates 2. Stick Equivalent Recent shifts in Chinese demand pattern… 2011-2014 2014-2020E CHINA CIGARETTES CHINA IMPORT VOLUME (KT)ROW CIGARETTES IMPORT % OF CHINESE TOW DEMAND CAGR CAGR -0.7% -1.5% 2012 2013 2014 2015 2
Slide 10: Addresses concerns about tow and positions the JV for growth
10A C E T A T E T O W J V – J U N E 2 0 1 71. Subject to regulatory approval 2. Combined 2017 pro forma estimates Addresses concerns about tow and positions the JV for growth Timely transaction creates leading tow supplier REVENUE2 EBITDA MARGIN2 OWNERSHIP $1.3 BILLION >40% 70% CELANESE Celanese and
Slide 11: Combined assets expand global footprint
11A C E T A T E T O W J V – J U N E 2 0 1 7 Amsterdam, Netherlands (New Company HQ) Freiburg, Germany Lanaken, Belgium Celanese-CNTC JV Zhuhai, China (30%) Narrows, VA Santo Andre, Brazil Ocotlan, Mexico Celanese-CNTC JV Kunming, China (30%) Celanese-CNTC JV Nantong, China (31%) Serpukhov, Russia Ro
Slide 12: Significant value creation for Celanese
12A C E T A T E T O W J V – J U N E 2 0 1 7 Significant value creation for Celanese TOW JOINT VENTURE Immediately EPS neutral Full run-rate synergies will more than offset the cost of JV debt Expect $0.50 - $0.75 of adjusted EPS accretion in year 3 after close 1. Debt after paying down $0.6 billion
Slide 13: Tow transaction advances significant growth options for Celanese
13A C E T A T E T O W J V – J U N E 2 0 1 7 Tow transaction advances significant growth options for Celanese Multi-faceted successes > $1.6 billion initial monetization of Cellulose Derivatives > Opportunity to create value uplift through reallocation of capital to higher-growth businesses > Enhance
Slide 14: Clear set of growth opportunities at Celanese
14A C E T A T E T O W J V – J U N E 2 0 1 7 ...supported by robust cash flow generation from acetyls and tow Clear set of growth opportunities at Celanese... Robust Cash Generation Acetate Tow JV > Tow JV will enable earnings enhancement > Initial monetization to unlock cash Acetyl Chain > Outsized
Slide 15: Differentiated performance overcomes weak industry dynamics
15A C E T A T E T O W J V – J U N E 2 0 1 71. Celanese estimates of industry utilization at 1Q of each year Differentiated performance overcomes weak industry dynamics Acetyl Chain model delivers strong results 12% 10% 10% 16% 14% 13% 64% 61% 63% 70% 65%64% Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1
Slide 16: Acetyl Chain positioned for growth in excess of GDP
16A C E T A T E T O W J V – J U N E 2 0 1 7 Acetyl Chain positioned for growth in excess of GDP Multiple growth layers in Acetyl Chain > Leadership positions and advantaged cost footprint allow the Acetyl Chain to capture disproportionate share of industry growth > Dynamic optimization of commercial
Slide 17: Engineered materials: AEM excluding affiliates
17A C E T A T E T O W J V – J U N E 2 0 1 71. Engineered materials: AEM excluding affiliates ...which has driven significant earnings growth with upgraded margins AEM is a project-based business... GLOBAL ASSETS & RESOURCES MARKET PLACE PRESENCE DIFFERENTIATOR CAPABILITIES BROADEST MATERIALS PORTFOL
Slide 18: AEM has a long runway for profitable growth
18A C E T A T E T O W J V – J U N E 2 0 1 71. Launches refers to projects commercialized (received initial Purchase Order for) in the year through the AEM pipeline …delivering high single-digit organic volume growth each year AEM has a long runway for profitable growth… NEXT PROJECT SYSTEM STEP-UPIN
Slide 19: AEM poised for step change in value delivery
19A C E T A T E T O W J V – J U N E 2 0 1 7 AEM poised for step change in value delivery > Find the most projects > Screen projects for winners > Remove complexity from the customers > Continuously improve win rates > One of the broadest polymer portfolios in the industry > Deep customer relations >
Slide 20: Cumulative cash generation and uses of cash
20A C E T A T E T O W J V – J U N E 2 0 1 7 C U M U L A T I V E C A S H G E N E R A T I O N 20161 2017F 2018F 2019F 2020F $6.2B $4.6B H I G H E S T V A L U E $2.5B 1. 2016 free cash flow excludes voluntary payment of $300 million for pension deleveraging 2. Including estimated ongoing cash flow avai