Celanese Corporation · NYSE:CE
Celanese — Investor Presentation (December 2009)
27 slides from Celanese's investor presentation, Dec 7, 2009
Slide 1: Celanese Corporation December 2009
Celanese Corporation December 2009
Slide 2: Forward Looking Statements; Reconciliation and Use of Non-GAAP Measures
2 Forward Looking Statements Reconciliation and Use of Non-GAAP Measures to U.S. GAAP Forward-Looking Statements This presentation may contain “forward-looking statements,” which include information concerning the company’s plans, objectives, goals, strategies, future revenues or performance, capita
Slide 3: Celanese diversified portfolio delivers shareholder value through leading franchises
3 Celanese ($ million) Consumer Specialties Advanced Engineered Materials Industrial Specialties Acetyl Intermediates 2009 3Q YTD Revenue: $3,694 2009 3Q YTD Op. EBITDA: $620 2009 3Q YTD Revenue: $817 2009 3Q YTD Op. EBITDA: $283 2009 3Q YTD Revenue $569 2009 3Q YTD Op. EBITDA: $84 2009 3Q YTD Reven
Slide 4: Balanced portfolio creates a unique hybrid business model
4 Portfolio Characteristics Financial Impact Acetyl Intermediates (Acetic Acid, Vinyl Acetate Monomer, Acetyl Derivatives) ► A global leader ► Advantaged technology ► Superior cost position ► Capital efficient ► More stable EBITDA Advanced Engineered Materials (Engineered Thermoplastics and Polymers
Slide 5: Celanese Strategic Pillars
5 Divest non-core assets and revitalize underperforming businesses Aggressively align with our customers and their markets to capture growth Participate in businesses where we have a sustainable competitive advantage Leverage and build on advantaged positions that optimize our portfolio Celanese Str
Slide 6: Why Celanese? Why Celanese Now? Levers of Value
6 Celanese Advantages Celanese Levers of Value ► Balanced footprint in key regions ► Recovering conditions in key end-use industries ► Attractive balance sheet with strong cash generation Geographic Demand Capital Structure ► Sustainable fixed spending reductions ► Efficient and scalable capital ► G
Slide 7: Increased earnings power drives significant shareholder value
7 Operating EBITDA ~$1,100 million $1,600-1,800 million Second half 2009 performance provides platform for future growth Increased earnings power drives significant shareholder value
Slide 8: Levers build significant earnings power of the portfolio
8 Expanded Earnings Power Group Capital Structure Lever Demand Lever Geographic Lever Operating Lever Innovation Lever 2009E to Recovery EBITDA Growth* Advanced Engineered Materials X X X X $275-325MM Consumer Specialties X X $10-60MM X X X X $275-375MM Industrial Specialties X X X X $75-125MM Earni
Slide 9: Recent strategic actions build earnings power of portfolio
9 MOU announced for Acetate expansion project with current China partner Consumer Specialties 2011+: Increased earnings through JV dividends Nanjing VAE / Emulsion capacity expansion Industrial Specialties 2011+: Volume expansion supporting growth in China Nanjing successfully expanded to 1.2 kt/a a
Slide 10: AEM: Application development creates current and future opportunities
10 Automotive Opportunity ► Current “best-in-class” translation to all models yields translation opportunity ► Westernization of current China production drives China opportunity ► Successful commercialization of application R&D creates pipeline opportunity 3.0 Total AEM Today Total Competitors Toda
Slide 11: Ticona: Growing application space through innovation
11 Improvement in POM Technical Performance New Ticona POM Space Incremental $500 Million Application Opportunity Existing POM Space Increase weldline strain @ break % Technology enables additional $500 million application space opportunity Automotive Applications ► Chemical resistance ► Superior im
Slide 12: CS: Acetate Tow demand in China will drive worldwide growth
12 Tow Demand Growth Operating EBITDA Source: Celanese internal estimates MOU announced for expansion project with current China partner kT China ROW Chinese Imports Chinese Domestic Production Additional Demand Growth $230 million 2005 Base Productivity Recovery Growth Operating & Innovation 2006 -
Slide 13: AI: A growing franchise in an attractive industry
13 A Growing Franchise An Advantaged Business in an Attractive Industry ► Proven execution and leadership capability ► Significant value from downstream derivatives ► Build upon advantages to optimize returns over the long-term ► Long-term growth rates in excess of GDP ► Favorable position on a stee
Slide 14: AI: New capacity not expected to impact Celanese's cost position
14 2009/2011E Acetic Acid Cost Curve (kT) Pricing for CE to earn >15% EBITDA ► Manufacturing realignment and Nanjing expansion further improving cost position ► Reinvestment economics challenged for non-leading technologies By Prod Avg Other Leading Technology Effective Industry Utilization Rates Et
Slide 15: IS: Global leader in emulsions systems for environmentally-friendly paints
15 European VAE Growth IS: Global leader in emulsions systems for environmentally-friendly paints and coatings ► Consumer perception favoring “greener” building products ► Regulation shifting to low-VOC content ► Celanese building off of a European leadership position Global opportunity of $400-500
Slide 16: 2010 Earnings Improvement
16 Productivity Driven Tax Rate Volume Driven $80 - - $100 At least $100 Low 20% range vs. 29% Represents approximately $1.00 per share in 2010 earnings improvement 2010 Earnings Improvement ► AEM: Destocking complete ► AI: Technology, 2009 FIFO effect ► IS: Asia growth focus ► CS: Sustain performan
Slide 17: Strong cash generation continues throughout economic cycle
17 2010E Cash Generation off EBITDA Base $ in millions 2010E Comments Cash Taxes $140 - $160 Consistent with earnings growth and lower tax rate Capital Expenditures $240 - $260 Continued focus on cost reduction and growth through Nanjing VAE expansion Reserve/Other $110 - $130 Increase primarily rel
Slide 18: Significant cash available for strategic purposes
18 Available Cash Cash (as of 9/30/2009) $1,293 Kelsterbach Spending ~($300) Operating Cash ~($300) Cash Available for Strategic Purposes ~$700 $ million ► Ticona Kelsterbach relocation cash flow neutral through end of 2010 ► Expect to continue to generate positive free cash flow ► Productivity inve
Slide 19: Celanese capital structure
19 Cost Stability Flexibility Structure Characteristics Primary Components Term Loan - $2.8 billion Other Debt Obligations - $775 million Cash - - $1.3 billion Net Debt - $2.3 billion Revolver - - $600 million Solid liquidity position and covenant-lite term loan create advantaged capital structure C
Slide 20: Significant value upside over current share price
20 Levers of Value Shareholder Value Why Celanese? Why Celanese Now? Significant value upside over current share price Geographic Demand Capital Structure Operating Innovation Track record of execution High return opportunities ► $1.6-1.8 billion recovery earnings ► Rapid earnings growth of the curr
Slide 21: Celanese Corporation December 2009
Celanese Corporation December 2009
Slide 22: 3Q 2009 Segment Operating EBITDA Recovery
22 Acetyl Intermediates Industrial Specialties Advanced Engineered Materials Consumer Specialties JVs Dividends PVOH Divesture 3Q 2009 Segment Operating EBITDA Recovery
Slide 23: Celanese Global Manufacturing Locations
23 Celanese Global Manufacturing Locations All values shown in kT per year Singapore Acid = VAM = Esters = Frankfurt, Germany VAM = Esters = Tarragona, Spain VAM = Bay City, TX VAM = Clear Lake, TX Acid = 1,200 VAM = 310 Cangrejera, Mexico Anhydride = 90 Esters = VAM = Pardies, France (announced clo
Slide 24: Delays in project startups likely to continue
24 Company Capacity 2007 2008 2009 2010 2011 BP / Sinopec 550 kt Sipchem 430 kt Sopo (expansion) 600 kt Wujing (expansion) 500 kt Yangkuang Cathay 350 kt Henan Shunda 200 kt HC Tianjin Bohei 200 kt HC Hualu Hensheng 200 kt HC Henan Yima 200 kt Yunan Yunwei 200 kt Kingboard 400 kt X X X X X X X X X X
Slide 25: Majority of announced capacity additions challenged in today's pricing environment
25 Majority of announced capacity additions challenged in today’s pricing environment 1 Source: Celanese internal estimates, Tecnon 2008. Based on nameplate capacity Disadvantaged technology Significant differentiation in technology of announced expansions
Slide 26: Capital Spending by Category
26 Other Growth Nanjing Productivity Capital Spending by Category Balance for “high return” productivity and capital efficient growth Note: Not including Kelsterbach plant relocation Maintain Plant Efficient use of cash
Slide 27: Reg G: Reconciliation of Operating EBITDA
Celanese Reg G: Reconciliation of Operating EBITDA gla RA Bis eg acig as