Celanese Corporation · NYSE:CE
Celanese — Investor Presentation (December 2008)
37 slides from Celanese's investor presentation, Dec 2, 2008
Slide 1: Celanese Corporation December 2008
Celanese Corporation December 2008
Slide 2: Forward looking statements; Reconciliation and use of non-GAAP measures
Forward looking statements; Reconciliation and use of non-GAAP measures to U.S. GAAP This presentation may contain "forward-looking statements," which include information concerning the company's plans, objectives, goals, strategies, future revenues or performance, capital expenditures, financing ne
Slide 3: Celanese: a leading global integrated producer of chemicals and advanced materials
Celanese: a leading global integrated producer of chemicals and advanced materials Leading Global Integrated Producer of Chemicals and Advanced Materials Execution Demonstrated track record of delivering results Strategy Clear focus on growth and value creation Culture Strong performance built on sh
Slide 4: Strong 2008 financial performance in uncertain environment
Strong 2008 financial performance in uncertain environment $ in millions (except EPS) 3rd Qtr 2008 3rd Qtr 2007 YTD2008 YTD2007 Sales $1,823 $1,573 $5,537 $4,684 Operating Profit $151 $147 $592 $424 Adjusted EPS $0.78 $0.73 $3.05 $2.35 Operating EBITDA $314 $302 $1,101 $945 Record performance year-t
Slide 5: Globally balanced and integrated businesses aligned to sustain value and accelerate growth
Globally balanced and integrated businesses aligned to sustain value and accelerate growth Acetyl Intermediates (AI) Formaldehyde Differentiated Intermediates Specialty Products Building Block Raw Materials Advanced Engineered Materials (AEM) Industrial Specialties (IS) Consumer Specialties (CS) Tic
Slide 6: Simple strategic foundation: Celanese Strategic Pillars
Celanese has executed and will continue to execute against a simple strategic foundation 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 advant
Slide 7: Today's portfolio: more resilient and less volatile
2000 2001 2002 2003 2004 2005 2006 2007 2008YTD As Reported 0.1079 0.0951 0.11 0.109 0.158 0.1735 0.1869 0.201 0.1988 Pro Forma for Current Portfolio 0.156 0.15 0.153 0.165 0.186 0.204 0.191 0.201 0.1988 Operating EBITDA Margin Today's portfolio: more resilient and less volatile Current portfolio pr
Slide 8: Today's portfolio: higher growth, more specialty
Operating EBITDA1 Today's portfolio: higher growth, more specialty Strategic growth plans continue to accelerate earnings of specialty businesses Essentially all growth has come from specialty businesses Two-thirds of 2010 Strategic Growth Objectives expected from specialty businesses Resulting in:
Slide 9: Peak and trough relative performance
Peak and trough relative performance Relative Peak versus Trough Quarter - Operating EBIDTA Industrial Specialties Acetyl Intermediates Advanced Engineered Materials Consumer Specialties Other Activities Trough defined as four quarters of sustained -1% to 1% global GDP Note: Earnings from strategic
Slide 10: Portfolio well-positioned to deliver and execute during all economic conditions
Portfolio well-positioned to deliver and execute during all economic conditions Leading global position provides solid platform GDP+ driven volumes Advantaged technology and cost position Acetyl Intermediates Relatively economically insensitive with stable earnings and cash flows Selective growth op
Slide 11: CS Operating EBITDA 2004 - 2010E
CS Operating EBITDA 2004 - 2010E 2004 2005 2006 2007 2008E 2009E 2010E Perf. Prod. Seg. EBITDA 55 63 65 68 64 58 58 Acetate Seg. EBITDA 77 77 77 77 77 77 77 North America/EU Revitalization 0 17 62 71 64 75 75 APL 20 40 41 41 JV Dividends 6 4 24 39 42 47 47 CS: relatively economically insensitive wit
Slide 12: IS: downstream integration mitigates earnings volatility
Profit Added Through Chain Production and Market Driven Profit Range per Ton of Acetic Acid Increased Value Acid Margin Sell Acid as VAM Technology and Customer Driven IS: downstream integration mitigates earnings volatility Reduced Volatility Peak 9 Average 30 Trough 37 Earnings Improvement per Ton
Slide 13: IS: opportunities for growth through innovation and globalization
2006 Future Others 2.294 3.041 Celanese 0.86 1.14 Global Vinyl Emulsions Applications Driving Future Growth Others Celanese IS: opportunities for growth through innovation and globalization $ in billions Applications Future Application Sales ($MM) Growth Rate Low VOC and nano paints $400 - $500 10+%
Slide 14: AEM: innovation and extensive portfolio provides platform
Other 3% AEM: innovation and extensive portfolio provides platform 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr East 47 8 12 10 12 5 6 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 Revenue by End-Use 2007 ~ $1 billion Alternate Fabrication 11% Transportation 45% Fuel systems Safety systems Mechanical componen
Slide 15: AEM: value recovery opportunities through easing input costs and pricing
AEM: value recovery opportunities through easing input costs and pricing initiatives Significantly high raw material and energy costs impacted margins since 2005 Successful pricing actions and falling raw material costs drive margin expansion opportunities Indexed Variable Margin per Unit Variable M
Slide 16: AEM: automotive and durable good volumes drive market growth
AEM: automotive and durable good volumes drive market growth Current North American and European unit production trends under significant pressure Shift to smaller, more fuel efficient vehicles Limited credit availability Value per vehicle expected to continue significant growth trend Expansion in A
Slide 17: AI: GDP+ driven volumes
AI: GDP+ driven volumes Acetic Acid Industry Global Growth versus Global GDP Demand for acetic acid generally trends above global GDP Source: CMAI, Tecnon and Celanese estimates Acetyl Intermediates End-Market Exposure Paints & Coatings Consumer & Industrial Adhesives Textiles Consumer/Medical Appli
Slide 18: AI: advantaged technology and cost position
AI: advantaged technology and cost position Source: Celanese estimates, available public data 2009E Acetic Acid Cost Curve (kt) (based on nameplate capacity) 78 256 275 285 393 656 747 Base Byproduct CE Other Leading tech Non China MeOH China Ethylene Ethanol Ethanol Ethylene By Prod Avg Non-China M
Slide 19: Committed to delivering value creation
Committed to delivering value creation Increased earnings profile dampens economic impact of cycle and provides strategic growth versus 2006 baseline Group Asia Revitalization Innovation Organic Balance Sheet Operational Excellence EBITDA Impact Consumer and Industrial Specialties X X X X >$100MM Ad
Slide 20: Focused cash flow and capital structure strategy
Cost Reduction & Revitalization Projects Growth Projects Core/Bolt-on Acquisitions Focused cash flow and capital structure strategy Share Repurchase Dividends Debt Repayment Execute Growth Strategy Optimize Capital Structure Cash Available for Strategic Use Cost Stability Flexibility Maximize shareh
Slide 21: Asia strategy: high-return growth
Asia strategy: high-return growth Total investment: $300 - $350 million - over 80% complete Total revenue: $600 - $800 million when sold out by 2010 Incremental EBITDA: $120 - $150 million by 2010 ROIC = 25 - 30% Investment Dynamics Emulsions Complex Administration & Maintenance Utilities / Tank Far
Slide 22: Optimized leverage profile
Optimized leverage profile Term Loan - $2.8 billion Other Debt Obligations - $803 million Cash - $584 million Net Debt - $3.0 billion Revolver - $650 million Cost Stability Flexibility Structure Characteristics Primary Components Strong balance sheet provides flexibility and stability with positive
Slide 23: Increased financial flexibility
Increased financial flexibility Stable, Flexible & Low Cost Continued improvement in coverage ratios Advantages of structure: LIBOR +150 bps Term loan maturity not until 2014 1% annual term loan amortization "Covenant-lite" Decrease in overall borrowing costs since 2005 2005 2006 2007 2008YTD East 3
Slide 24: Appendix
“9 Celanese Appendix ; 4
Slide 25: Advanced Engineered Materials Third Quarter 2008
in millions 3rd Qtr 2008 3rd Qtr 2007 Net Sales $272 up 5% $258 Operating EBITDA $45 down 36% $70 Advanced Engineered Materials Third Quarter 2008: Increased net sales driven by improved pricing and positive currency effects Increased penetration in value per vehicle and growth in non- automotive ap
Slide 26: Consumer Specialties Third Quarter 2008
Third Quarter 2008: Net sales increase primarily driven by strong pricing and foreign currency effects Higher pricing more than offset slightly lower volumes for the quarter Operating EBITDA increase primarily the result of improved pricing and realized acquisition synergies Consumer Specialties in
Slide 27: Industrial Specialties Third Quarter 2008
Third Quarter 2008: Increase in net sales primarily driven by higher pricing and favorable currency impacts Slight volume increase due to favorable comparison to 2007 which included impacts associated with Clear Lake outage Demand weakness in certain US and European end-markets continues, while Chin
Slide 28: Acetyl Intermediates Third Quarter 2008
Acetyl Intermediates in millions 3rd Qtr 2008 3rd Qtr 2007 Net Sales $1,056 up 22% $864 Operating EBITDA $182 up 2% $178 Third Quarter 2008: Increased net sales driven by higher pricing, increased volumes and favorable currency impacts Volume and pricing strength offset by significantly higher input
Slide 29: Reg G: Reconciliation of Adjusted EPS
Reg G: Reconciliation of Adjusted EPS
Slide 30: Reg G: Reconciliation of Adjusted EPS
Reg G: Reconciliation of Adjusted EPS
Slide 31: Reg G: Other Charges and Other Adjustments
Reg G: Other Charges and Other Adjustments
Slide 32: Reg G: Other Charges and Other Adjustments
Reg G: Other Charges and Other Adjustments
Slide 33: Reg G: Reconciliation of Operating EBITDA
Reg G: Reconciliation of Operating EBITDA
Slide 34: Reg G: Reconciliation of Operating EBITDA
Reg G: Reconciliation of Operating EBITDA
Slide 35: Reg G: Reconciliation of Operating EBITDA
Reg G: Reconciliation of Operating EBITDA
Slide 36: Reg G: Reconciliation of Operating EBITDA
Reg G: Reconciliation of Operating EBITDA
Slide 37: Reg G: Reconciliation of Net Debt
Reg G: Reconciliation of Net Debt