Celanese Corporation · NYSE:CE
Celanese — Investor Day (May 2018)
19 slides from Celanese's investor day presentation, May 1, 2018
Slide 1: Scott Richardson, Chief Financial Officer - Investor Day May 1, 2018
Scott Richardson CHIEF FINANCIAL OFFICER I N V E S T O R D A Y M A Y 1 , 2 0 1 8
Slide 2: Power of Financial Leadership
2I n v e s t o r D a y 2 0 1 8 …with a focus on shareholder returns Power of Financial Leadership > Meet commitments to investors > Return-driven capital allocation focused on the highest return opportunities > Constantly improving capital structure and balance sheet > Robust cash flow to support or
Slide 3: Record of exceeding commitments
3I n v e s t o r D a y 2 0 1 8 Record of exceeding commitments Adjusted EPS Free Cash Flow M&A Balance Sheet Return Cash to Shareholders W h at W e s a I D I n 2 0 1 5 W h e r e W e a r e t o D ay $8.00-$8.50 >$9.00 $2.5 billion over 3 years >$2.5 billion Build competency to execute bolt-ons Complet
Slide 4: Accelerated free cash flow levels to fuel growth
4I n v e s t o r D a y 2 0 1 8 Accelerated free cash flow levels to fuel growth Generated record earnings ¹ 2017 free cash flow before $316 million voluntary pension contribution. 2016 free cash flow before $300 million voluntary pension contribution. 2015 free cash flow before $177 million payment
Slide 5: Current equity value attractive relative to cash generation
5I N V E S T O R D A Y 2 0 1 8 1 CF excluded as free cash flow yield was not material Source: FactSet Current equity value attractive relative to cash generation Compelling cash flow yield 3-YEAR AVERAgE FREE CASH FLOw YIELD1 (2015-2017) 8.8% 8.7% 7.7% 6.6% 5.4% 4.5% 4.3% 4.3% 4.3% 3.9% DJ US CHEMIC
Slide 6: Culture of productivity continues
6I n v e s t o r D a y 2 0 1 8 Foundational to Celanese operations Culture of productivity continues 2018 gROSS PRODuCTIVITY Manufacturing 50% Supply Chain 40% Business Enterprises 10% Business enterprise supply Chain Manufacturing $120M > Flexibility in feedstocks and geography > Energy cost and ef
Slide 7: Financial discipline unlocks value
7I n v e s t o r D a y 2 0 1 8 Actions worth >$200 million of annual operating cash flow Financial discipline unlocks value Interest Tax Pension $221 million in 2011 21% Adjusted in 2014 >$800 million unfunded deficit in 2011 Opportunistic refinancing transactions Strategic management of fixed/float
Slide 8: Returning excess cash to shareholders
8I n v e s t o r D a y 2 0 1 8 ~$3 billion in cumulative cash distributed since 2012 Returning excess cash to shareholders 201420132012 2015 2016 2017 $741 $701 $594 $394 $247 $88 CE PEER AVG. 1.8% 3.8% 1.8% 0.9% DIVIDENDS & REPURCHASES (in millions) 2017 RETURNS FROM CASH DEPLOYMENT Repurchases Div
Slide 9: Industry leading shareholder returns
9I N V E S T O R D A Y 2 0 1 8 Source: FactSet …resulting from consistent growth in earnings and financial and operational discipline Industry leading shareholder returns 88% 79% 63% 43% 40% 27% 25% 23% 22% 19% 15% 9% 7% 6% 3% -27% DJ US CHEMICALS INDEX 24% CE Peer 3 Peer 6 Peer 11Peer 4Peer 1 Peer
Slide 10: Business plans will yield robust earnings
10I n v e s t o r D a y 2 0 1 8 Provides ample opportunity for continued capital deployment Business plans will yield robust earnings > Success of opportunity pipeline > Continued M&A > Integration synergies > Flat earnings with potential upside > Strong cash generator > Expansive network > Differen
Slide 11: Flexibility for cash deployment
11I n v e s t o r D a y 2 0 1 8 ~$3.2 billion of free cash flow to be deployed Flexibility for cash deployment uSES OF CASH (2018 - 2020) CuMuLATIVE FREE CASH FLOw (2018 - 2020) 2018F 2019F 2020F C U M U L A T I V E C A S H G E N E R A T I O N H I G H E S T V A L U E DIVIDENDS ORGANIC GROWTH M&ASHAR
Slide 12: Prioritization to highest return opportunities
12I n v e s t o r D a y 2 0 1 8 Increased percentage of cash expected to be deployed at highest returns Prioritization to highest return opportunities RetuRns Organic Growth Acquisitions Share Repurchases Repay Debt Keep Excess Cash Current wACC 12%+ 15-35% WACC + 3-5% 1-2% 2016-2017 2018-2020 1/3 >
Slide 13: Doubling capital investments
13I n v e s t o r D a y 2 0 1 8 Organic growth project pipeline is substantial and returns are attractive Doubling capital investments CAPITAL ExPENDITuRES (in millions) SAMPLE IRR: RECENT & CuRRENT PROjECTS 2017 Project A2018F Ongoing Project B Project C ~$250 $350 ~50% ~30% ~20% Ongoing Capex of ~
Slide 14: High return on invested capital
14I n v e s t o r D a y 2 0 1 8 Expect to sustain industry-leading returns of ~18% through 2020 Source: Capital IQ and Celanese estimates. high return on invested capital CE 18.9% Peer 1 18.2% Peer 2 16.3% Peer 4 13.4% Peer 6 11.8% Peer 7 11.7% Peer 8 11.6% Peer 9 11.1% Peer 10 11.0% Peer 11 10.1% P
Slide 15: Balance sheet provides large capacity for investment
15I n v e s t o r D a y 2 0 1 8 1 Excludes ~$200M for miscellaneous amortization and lease payments Balance sheet provides large capacity for investment at conservative leverage levels Capacity to invest in growth CASH AVAILABLE FOR INVESTMENT1 (2018-2020) Surplus Cash Generation ~$1.0B >$3.0B Avail
Slide 16: Flexible balance sheet enabling growth
16I n v e s t o r D a y 2 0 1 8 2018 2019 2020 2021 2022 2023 2024 2025 $1,000 $800 $600 $400 $200 0 1 As of December 31, 2017. Excludes approximately $474m of other miscellaneous indebtedness Ability to access multiple debt markets quickly and efficiently Flexible balance sheet enabling growth DEBT
Slide 17: Value creation path to 2020
17I n v e s t o r D a y 2 0 1 8 Strong investment opportunities Value creation path to 2020 > ~5,000 project wins > >50% win rate > Incremental capacity > Fill existing capacity > Major capacity investments > Alliances > Medical & Pharma > Energy storage > Improving industry utilization > China refo
Slide 18: Continuing growth through 2020
18I n v e s t o r D a y 2 0 1 8 Continuing growth through 2020 1 2017 free cash flow before $316 million voluntary pension contribution ADjuSTED EARNINgS PER SHARE FREE CASH FLOw (in millions)Advantaged positions Market dynamics Leverage opportunities high return investments Free cash flow growth 20
Slide 19: Glossary
19I n v e s t o r D a y 2 0 1 8 Glossary For Celanese non-GaaP measures, please refer to the non-Us GaaP Financial Measures and supplemental Information documents available under Investor relations/Financial Information/non-GaaP Financial Measures on our website, www.celanese.com. Average Market Cap