Celanese Corporation · NYSE:CE
Celanese — Non-Deal Roadshow (May 2006)
41 slides from Celanese's roadshow presentation, May 2006
Slide 1: Accelerating Celanese
Ac elerating Celanese May 2006 Investor Roadshow
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 release may contain “forward-looking statements,” which include information concerning the company’s plans, objectives, goals, strategies, future revenues or performance, capital expenditures, financing needs a
Slide 3: Celanese Strategy for Value Creation
Celanese Strategy for Value Creation 1) Attractive hybrid business model 2) Clear advantage in technology and costs 3) Positive industry fundamentals 4) Strong leading global producer positions 5) Celanese specific opportunities 6) Strong cash generation 3
Slide 4: Celanese: A Leading Global Chemical Company
Celanese: A Leading Global Chemical Company Chemical Products 2005 Sales: Ticona Acetic acid, vinyl acetate, & Technical Polymers value-added derivatives $6,070 million Niche specialty plastics 71% of sales* 15% of sales* >Driven by innovation 2005 Operating >2x GDP growth >75% Basic Chemicals EBITD
Slide 5: 1) Attractive Hybrid Business Model
1) Attractive Hybrid Business Model Building Block Basic Products Downstream Products Engineered Formaldehyde Plastics Acetate Methanol Anhydride and esters Nutrinova Acetic Acid VAM Emulsions Legend Chemicals Ticona Acetate Merchant sales Nutrinova Optionality drives value 5
Slide 6: Celanese is the Market Leader in Acetyls
Celanese is the Market Leader in Acetyls Acetic Acid Producers VAM Producers Celanese 27% Celanese 29% Others 32% Others 30% Dow 9% BP 23% Lyondell 7% Showa 1% Jilin 2% Kuraray 3% DuPont 6% Eastman 3% Lyondell 5% Nippon 4% Daicel 3% BP 6% Dairen 6% SOPO 4% Total capacity 10,000 kt Total capacity 5,5
Slide 7: 2) Clear Advantage in Technology and Costs
2) Clear Advantage in Technology and Costs Cost Curve based on Effective Capacity*, kt Demonstrated Capacity – Clear Lake Texas 1,400 Ethanol 1,200 Acetaldehyde thousands of metric tons 1,000 Benefit from AO Plus™ LPO/Naphtha Celanese 800 technology 600 Conventional 400 AO Plus™/Leading MeOH /CO Com
Slide 8: 3) Positive Industry Fundamentals
3) Positive Industry Fundamentals Acetic Acid Supply & Demand* VAM Supply & Demand* 12,000 7,000 10,000 6,000 5,000 8,000 4,000 KT 6,000 KT 3,000 4,000 2,000 2,000 1,000 0 0 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 Effective Capacity Demand Effective Capacity Demand Acetic Acid and VAM Effe
Slide 9: Recent Acetic Acid Capacity Announcements
Recent Acetic Acid Capacity Announcements Company Capacity Startup Date Commentary BP/FPC 300KT Early 2005 Operational Q1 2006 BP/Yaraco 150KT Early 2005 Operational mid-2005 Wujin 150KT Start 2005 No sign of construction SOPO 150KT Start 2005 Completed, explosion 3 days later Fanavaran 150KT Start
Slide 10: Acetyls Market Leader in Each Key Region
Acetyls Market Leader in Each Key Region Tarragona France Frankfurt Pampa VAM = 200 Acid = 440 VAM = 285 Acid = 290 VAM = 150 Anhydride = 30 Bay City Nanjing VAM = 300 Acid = 600 VAM = 300 Clear Lake Acid = 1,200 VAM = 310 Saudi-Arabia Cangrejera Singapore VAM = 115 Acid = 600 Anhydride = 90 VAM = 2
Slide 11: 4) Strong Leading Global Producer Positions
4) Strong Leading Global Producer Positions % Net Sales in products where Celanese holds a #1 or #2 position Recent Actions: 100 Acquisitions Acetex 95 Vinamul 90 Divestitures PBI Vectran 85 Emulsion Powders 95 DH Actives 80 COC Fuel Cells 85 Estech JV 75 Emulsions Greece 70 2005 Future Continue to
Slide 12: Focus on Growth in Asia
Focus on Growth in Asia 2000 Regional Split 2005 Regional Split Future Regional Split Europe, Europe, Europe, Asia, 40% 36% Asia, Asia, 33% 20% 33% 7% Americas, Americas, Americas, 57% 33% 40% Achieving a regional revenue balance by 2009 *Based on Celanese 2005 consolidated net sales (does not inclu
Slide 13: Nanjing – Lowest Cost Integrated Acetyls Complex
Nanjing – Lowest Cost Integrated Acetyls Complex Flare > Integrated Methanol VAM Unit Acetic Acid Unit > Low Cost (mid 2008) (Q1 2007) Technology CO > Advantaged Feedstock Generation Anhydride Tank Farm Possible Cooling Towers Steam Unit > Expandable Site Waste technology Water platform Finished > $
Slide 14: Ticona: Leading Global Producer Position
Ticona: Leading Global Producer Position Global product position Polyacetal Ultra-high molecular (Hostaform®, Celcon®) weight PE (GUR®) 2.5 #1 #1 #2 #1 Revenue potential at 90 % capacity usage in $ bn Automotive Battery Separators 2.0 Electronics Industrial Specialties 2.0 Filtration Consumer Medica
Slide 15: Strong Growth in Engineering Polymers
Strong Growth in Engineering Polymers 2005: 7,985 kt 2010: 11,000 kt Africa / Africa / Middle Middle Asia East East without 2% Asia 2% Europe Europe Japan 32% without 30% 31% Japan 34% Japan 10% NA CAGR: 6.7 % Japan NA Latin 23% 22% 9% Latin America America 2% 3% CAGR 2005 / 2010 in percent Europe:
Slide 16: Ticona's End Use Markets
Ticona’s End Use Markets Volumes by end use market 2004 Sales: $863 million Medical 3% Automotive 49% Other 8% Alternate Fabrication 12% Electrical & Industrial 10% Electronics 6% Appliances 5% Consumer 7% 16
Slide 17: Accelerating Growth in Automotive
Accelerating Growth in Automotive New Ticona Applications Innovation Fuels Growth Visual VW f Electrical f Substitution of metal, glass and f Modular construction other materials f Comfort and Safety f Improved existing application fields f Fuel Systems f Development of new application f Environment
Slide 18: Key Role of Strategic Investments in Asia
Key Role of Strategic Investments in Asia Celanese Direct Equity Affiliates Cost Affiliates in US $m ≥ Polyplastics ≥ Nantong Cellulose Fibers ≥ Korea Engineering ≥ Zhuhai Fibers Ticona Plastics (KEP) Acetate ≥ Kunming Fibers Products > Acetyls > GUR > POM > Cellulose Acetate Tow > Solvents > Sunett
Slide 19: Hidden Value through Equity Affiliates
Hidden Value through Equity Affiliates Cash and Proportional EBITDA of Equity Affiliates in $ millions 160 140 120 Not included in 100 Proportional EBITDA Operating EBITDA Total proportional 80 above Cash EBITDA from Equity (Hidden Value) Affiliates 60 40 Included in 20 Cash from Operating EBITDA Eq
Slide 20: 5) Celanese Specific Opportunities
5) Celanese Specific Opportunities > SG&A > Acquisitions and synergies = $125 million opportunity = Vinamul and Acetex = Synergies upside confirmed > Purchasing > Methanol sourcing = $100 million opportunity = $45-50 million opportunity Purchasing: Pipeline of Projects SG&A: Simplify, Standardize, D
Slide 21: Acetate Restructuring
Acetate Restructuring > Reduces manufacturing sites from 5 to 3 Optimizing > Planned 35-40% reduction in Acetate Geographic work force (approx. 1,000 employees) Footprint and Exit Filament > Exit non-strategic filament business > Expanding China joint ventures End-state Configuration Rock Hill, US C
Slide 22: Acetate Profile after Restructuring
Acetate Profile after Restructuring Consolidated Sales Revenue, $ mm $ 700 $ 625-650 2004 2008 est. $130 mm – $160 mm 2004 2005 2006 2007 2008 Segment EBITDA* JV Dividends** * EBITDA excluding special charges. ** JV dividends from cost investments 22
Slide 23: 6) Strong Cash Generation
6) Strong Cash Generation (in $ millions) Representative Cash Flow Adjusted EBITDA 1,100 Net Cash Interest (230 - 250) Taxes (60-100) Change in Working Capital - Excess Pension Contributions - Other Cash Items - Cash Flow from Operations 750 - 810 Capital Expenditures (200 - 250) Free Cash Flow* 500
Slide 24: Celanese Corporation Financial Highlights
Celanese Corporation Financial Highlights in $ millions (except EPS) 1st Qtr 2006 1st Qtr 2005 FY 2005 Net Sales 1,652 1478 6,070 SG&A (152) (159) (562) Operating Profit 197 156 561 Net Earnings 117 (10) 277 Special Items Special Charges - (38) (73) Other Adjustments (10) (10) (86) Diluted Adjusted
Slide 25: Strategic Uses of Cash
Strategic Uses of Cash 2005 Progress De-leverage balance sheet > IPO forecast of $3.6 billion in net debt – 9/30 Actual figures at $3.1 billion Strategic, Bolt-on > Closed Acetex acquisition Acquisitions > Closed Vinamul acquisition Maintain industry-leading > Investing in Nanjing asset base > Restr
Slide 26: Capitalization
Capitalization (in $ millions) December 31, March 31, 2005 2006 Cash 390 312 Senior Credit Term Loan 1,708 1,712 Senior Credit Revolver - - Floating Rate Term Loan - - Total Senior Debt 1,708 1,712 Senior Sub Notes ($) 800 800 Senior Sub Notes (€*) 153 157 Other Debt 397 461 Total Cash Pay Debt 3,05
Slide 27: Debt Amortization and Maturity
Debt Amortization and Maturity As of March 31, 2006 $ in millions Senior Secured Term Loan - $1,632 Senior Subordinated Notes - $954 1,800 Senior Discount Notes - $554 1,600 1,400 1,200 1,000 800 600 400 200 0 06 07 08 09 10 11 12 13 14 15 r fte 20 20 20 20 20 20 20 20 20 20 ea er Th * Includes $187
Slide 28: 2006 Business Outlook
2006 Business Outlook Chemical > Continued strong global demand Products > Favorable industry dynamics > Increasing penetration in key markets Ticona > Flat global automotive demand > Positive impact of COC sale > Improving earnings with progress on revitalization Acetate > Resumption of dividends f
Slide 29: Our Strategy for Success
Our Strategy for Success 1) Attractive hybrid ≥ Reduce cyclicality; integrated production chain; business model high growth 2) Clear advantage in ≥ #1 technology; low cost position technology and costs 3) Positive industry ≥ Stronger supply-demand outlook for longer fundamentals cycle 4) Strong lead
Slide 30: 2006 Guidance
2006 Guidance > Diluted EPS: $2.50 to $2.90 > Depreciation/Amortization = $275 - $300 million > Cash Interest Expense = $230 - $250 million > Effective Tax Rate = 28% > Capital Expenditures = $200 - $250 million > CE Equity = 158.6 million shares common stock outstanding = 0.9 million stock option g
Slide 31: Appendix
Y Celanese Appendix 31
Slide 32: Chemical Products
Chemical Products in $ millions 1st Qtr 2006 FY 2005 Net Sales $1,169 up 12% $4,336 Operating EBITDA $208 down 8% $812 First Quarter 2006: > Strong earnings on continued high utilization across industry, however, down versus record Q1 2005 > Margin recovery in downstream businesses > Reduced dividen
Slide 33: Ticona Technical Polymers
Ticona Technical Polymers in $ millions 1st Qtr 2006 FY 2005 Net Sales $231 down 3% $887 Operating EBITDA $69 up 3% $204 First Quarter 2006: > Increased penetration in key customer segments > Operating margins expanded on increased sales and reduced spending > Improved demand in European market Focu
Slide 34: Acetate Products and Performance Products
Acetate Products in $ millions 1st Qtr 2006 FY 2005 Net Sales $167 up 1% $659 Operating EBITDA $30 up 50% $86 ≥ Revitalization still on track ≥ China venture tow expansion complete, moving forward on flake expansion ≥ Dividends from China affiliate expected to resume in Q2 2006 Performance Products
Slide 35: Underlying Strong Business Performance
Underlying Strong Business Performance in $ millions (except EPS) 1st Qtr 2006 1st Qtr 2005 FY 2005 Net Sales 1,652 1478 6,070 Diluted Adjusted EPS* $0.72 $0.62 2.24** Operating EBITDA 304 285 1,053 ≥ Net sales increase 12% from prior year ≥ Operating profit rises 26% on strong business performance,
Slide 36: Celanese Corp. - Cash Flow
Celanese Corp. - Cash Flow Full Year Full Year (in $millions) 2004 2005 Adjusted EBITDA 801 1116 Net cash interest (154) (205) Special charges and restructuring in ops (153) (43) Taxes (39) (65) Change in trade working capital (48) 69 Excess pension contributions (474) (63) Other cash items (103) (9
Slide 37: Equity Investments Summary
Equity Investments Summary Summary-equity investments USD Million 2005 2004 2003 2002 Total Celanese's Total Celanese's Total Celanese's Total Celanese's Results Share Results Share Results Share Results Share Net Sales $ 3,028 $ 1,252 $ 2,849 $ 1,163 $ 2,134 $ 824 $ 1,735 $ 648 Depreciation and Amo
Slide 38: Reg G: Reconciliation of Diluted Adjusted EPS
Reg G: Reconciliation of Diluted Adjusted EPS Table 6 Adjusted Earnings Per Share - Reconciliation of a Non-U.S. GAAP Measure Q1 2006 Q1 2005 (in $ millions, except per share data) Adjusted Adjusted Earnings from continuing operations before tax and minority interests 161 13 Non-GAAP Adjustments: Sp
Slide 39: Reg G: Reconciliation of Net Debt
Reg G: Reconciliation of Net Debt Table 5 Net Debt - Reconcilation of a Non-U.S. GAAP Measure March 31 Dec 31 (in $ millions) 2006 2005 Short-term borrowings and current installments of long-term debt - third party and affiliates 212 155 Plus: Long-term debt 3,306 3,282 Total debt 3,518 3,437 Less:
Slide 40: Reg G: Reconciliation of Special Charges
Reg G: Reconciliation of Special Charges Table 7 Reconciliation of Special Charges to Total Special Charges and Other Adjustments Special Charges: (in $ millions) Q1 2006 Q1 2005 Employee termination benefits 2 2 Plant/office closures (2) 1 Total restructuring - 3 Plumbing actions (1) - Other 1 35 *
Slide 41: Reconciliation of Operating Profit to Operating EBITDA
Table 1 Segment Data and Reconciliation of Operating Profit (Loss) to Operating EBITDA - a Non-U.S. GAAP Measure. * (in $ millions) Q1 2006 Q1 2005 Net Sales Chem ical Products 1,169 1,044 Technical Polymers Ticona 231 239 Acetate Products 167 165 Performance Products 49 47 Other Activities 61 12 In