Celanese Corporation · NYSE:CE
Celanese — Non-Deal Roadshow (March 2003)
39 slides from Celanese's roadshow presentation, March 2003
Slide 1: A Strategy Paying Off
A Strategy Paying Off Perry Premdas Chief Financial Officer 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements in this presentation relating to future status or circumstances, including statements regarding management‘s plans and objectives for future operations, products and services, are forward-looking statements of goals and expectations based on estimates, assumptio
Slide 3: Status and Strategy
Track tat u s y S ateg record d S tr an Core Business Next steps and Growth & Outlook Productivity 3 U.S. Roadshow / March 2003
Slide 4: Celanese: Who We Are
Celanese: Who We Are > Leading chemical company 2002 Sales by Destination: € 4.3 bn. = #1 or # 2 in ~70% of revenue > 25 production and 6 R&D sites NAFTA Asia in 11 countries > North American core 44% 18% Non-consolidated asian = ~50% of sales, ~60% of its affiliates: ~€1bn sales employees and ~70%
Slide 5: Celanese Business Segments
Celanese Business Segments Acetyl Products Ticona Technical Polymers Performance Products Acetic acid, vinyl acetate, Polyacetal, polyester, UHMW- Nutrinova food ingredients polyvinyl alcohol, emulsions PE, liquid crystal polymers Sweetener, food preservatives, components for healthy nutrition Marke
Slide 6: Integration Down to End Use Markets
Integration Down to End Use Markets* Raw Materials Acetyl Products (e.g. natural gas, Technical Polymers Ticona ethylene) Acetate Products Performance Products Formalde- End use Markets Acetic Acid hyde Croton- aldehyde Vinyl Acetic Acetate PTA Acetate Anhydride Esters Ticona Polyvinyl Acetate Polyo
Slide 7: Combine Three Activities to One Strategic Thrust
Combine Three Activities to One Strategic Thrust Growth + Improving Productivity initiatives Value Restructuring + Building Portfolio optimization Competitiveness Non-core business Sharpening divestitures Focus 1999 2000 2001 2002 2003 Demerger Generating growth and productivity 7 U.S. Roadshow / Ma
Slide 8: Track record
Status Track and Strategy record Core Business Next steps and Growth & Outlook Productivity 8 U.S. Roadshow / March 2003
Slide 9: Significant Improvement in 2002
Significant Improvement in 2002 y-o-y in € millions FY 2001 FY 2002 chg. in % Net sales 4,777 4,325 (9) Operating Profit (488) 155 n.m. EBITDA excluding special charges 398 440 11 EBITDA excluding special charges margin 8.3% 10.2% n.m. Special (charges), net (496) 1 n.m. Net earnings (385) 187 n.m.
Slide 10: Improved Profitability: Especially in Acetyls and Ticona
Improved Profitability: Especially in Acetyls and Ticona EBITDA* in € million and % of sales 300 2001 2002 250 200 150 100 50 0 9.7% 13.1% 3.0% 2.4% 11.9% 12.1% 6.7% 11.5% 31.5% 34.2% Acetyl Products Chemical Acetate Ticona Performance Intermediates Products Products Segment performance 2002 10 U.S.
Slide 11: Track Record: Major Affiliates' Performance
Track Record: Major Affiliates*´ Performance > Income statement > Cash inflows from equity affiliates In € millions In € millions 80 80 70 Earnings from equity investments 70 Dividends Other distributions Dividends from cost investments 60 60 50 50 40 40 30 30 20 20 10 10 0 0 2000 2001 2002 2000 200
Slide 12: Net Financial Debt Reduced by 40%
Net Financial Debt Reduced by 40% In € million 835 € 387 Million -€150 Million 497 operating cash flow investing cash flow 12/31/2001 Operations Change in Trade Special Capex Acquisition Divestiture Other Exchange 12/31/2002 Equity of Working Charges of of investing Effect / Affiliates Capital Busin
Slide 13: Growth & Productivity
Status and Strategy Track record Core Business Next steps and Gro Prod wth & Outlook ucti vity 13 U.S. Roadshow / March 2003
Slide 14: Regional Growth Focus – China
Regional Growth Focus – China Indexed GDP growth in %* 2002 Acetic Acid and VAM market China Total combined Volume = 11.1 mio. kta 200% 150% NAFTA 21% 100% Asia Pacific World 23% 50% EU 0% 18% China 30% 8% ROW '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 Acetate Engineering Plastics Acetic Acid 2002 Engi
Slide 15: Acetyl Products in China
Acetyl Products in China Acetic Acid kt Total Demand Vinyl Acetate Total Demand 1800 1740 KT kt 1070 KT 1600 1000 Total Demand 850 KT 1400 Total Demand 1190 KT 800 CAGR 6% 1200 CAGR 10% 1000 600 800 600 400 400 200 200 0 0 2002 2006 est 2002 2006 est Domestic Low Cost Domestic High Cost Domestic Low
Slide 16: Track Record: Resources
Track Record: Resources in € millions Drivers: 1200 >Continuous strong 1000 cash flow generation 800 >Focused initiatives 600 > Efficiency improvement > Trade Working Capital 400 reduction 200 >Selective capex 0 2000 2001 2002 Net financial Debt Capital Expenditures Depreciation Trade Working Capita
Slide 17: Productivity initiatives
Case study Celanese Chemicals Productivity initiatives Objective: Reduce variances in measuring quantities of products shipped > Results: Streamlined Six Organization = EBITDA improvement approx. Sigma €410,000 p.a. = Project Capital Expenses: €0 = Change from manual to automated measurement EHS sys
Slide 18: Track Record: Productivity
Track Record: Productivity EBITDA* per Employee** EBITDA* per Employee** Trend € `000 50 40 30 20 1999 2000 2001 2002*** # Employees: 13,100 11,600 10,800 10,700 * Excluding special charges ** Employees per year end ***2002 Employee numbers exclude 642 emulsions employees 18 U.S. Roadshow / March 20
Slide 19: Core Businesses
Status and Strategy Track record Core s sin es Bu Next steps and Growth & Outlook Productivity 19 U.S. Roadshow / March 2003
Slide 20: Acetyl Products - Cost Leader
Acetyl Products - Cost Leader Natural Gas Price Acetic Acid Full Cash Cost US$ / MMBtu 12 US$ per ton Global Demand CMAI US$/MM BTU Natural Gas Wellhead 10 CZ world’s best 8 technology Wood, 6 Ethanol, etc. Natural Gas Price LPO/ Conventional Naptha 4 MeOH/CO AO PlusTM/ Leading 2 Competition 0 0 400
Slide 21: Forward Integration
Forward Integration Performance Application- driven Basic chemicals chemicals markets 2002 Adhesives Acetate acid Enamels, Paints ester Emulsions Coatings Fleece textiles Vinyl acetate Emulsion Methanol Acetic acid monomer powders Construction > 50%* ~70%* ~20%* Adhesives 2000 Acetic acid Safety gla
Slide 22: Acetyl Products Segment
Acetyl Products Segment Industry Capacity Utilization (Acetic Acid) Industry Capacity Utilization (VAM) Industry Capacity Utilization** EBITDA* Margin EBITDA* % of Sales 100% 13% 15% 80% > Industry capacity utilization 60% > Industry capacity 10% 10% low-mid 80’s utilization low 80’s > Fragile econo
Slide 23: Ticona: Technology Enabler In Key Industries
Ticona: Technology Enabler In Key Industries Volumes by end use market 2002 Sales: € 757 million Other 8% Medical 3% Alternate Fabrication 5% Appliances 6% Automotive Electrical & Electronics All Products (e.g. Telecommunications) Consumer 6% Vectra® , Fortron® Industrial 12% Electrical & Automotive
Slide 24: More Celanese per Car
Case study More Celanese per Car Ticona - European Sales trend in automotive Innovation driving growth 130,0% > Substitution of metal, 120,0% glass, other resins 110,0% > Improving existing 100,0% applications 90,0% 1998 1999 2000 2001 2002 > Developing new end use areas European sales in kg Western
Slide 25: Ticona: The Innovation Business
Case study Ticona: The Innovation Business LCP - Liquid Crystal Polymer SIM Loc, Smart Card > very narrow tolerances reader for mobile phones possible > very high tensile strength Medi-Jector, which and very high elastic administers insulin with minimal discomfort module in flow direction > high imp
Slide 26: Ticona: Regional Position For Global Customers
Ticona: Regional Position For Global Customers Telford / UK Oberhausen / Germany Kelsterbach / Germany Fuji City/Japan Winona, MN Auburn Hills, MI (Polyplastics)* Florence, KY Summit, NJ Seoul / Korea(KEP) ** Bishop, TX Wilmington, NC*** (Fortron Industries) Nantong / China (Polyplastics/ Shelby, NC
Slide 27: Committed And Invested Management
Committed And Invested Management > A minimum of one year’s salary invested in company shares by each senior manager > 60% of senior management compensation variable > Incentive programs = 5.2 mil. stock appreciation rights outstanding (at Dec 31, 2002): ? quarterly mark-to-market valuation = 1.2 mi
Slide 28: Ownership in Performance – Value Distribution to Shareholders
Ownership in Performance – Value Distribution to Shareholders > Share repurchase programs = 2000 – 10% of shares oustanding repurchased (5,591,500 shares) = 2002 / 2003 – Further share repurchase (up to 1,031,941 shares) = Proposal for a new authorization for share repurchases of up to a maximum of
Slide 29: Next steps and Outlook
Status and Strategy Track record Core Business Next steps a Outlo nd Growth & ok Productivity 29 U.S. Roadshow / March 2003
Slide 30: Wrap up
Wrap up > Solid financial basis > Focus on core businesses > Strong and improving value chain > Addressing challenges in the Intermediates segment > Pursuing growth and productivity Creating the future 30 U.S. Roadshow / March 2003
Slide 31: Outlook for 2003
Outlook for 2003 > Limited visibility in global economies > Strong € to U.S. dollar exchange rate > Higher and volatile raw material and energy costs > Priority on efficiency and productivity improvement First half EBITDA at or slightly above level of last year 31 U.S. Roadshow / March 2003
Slide 32: Investor Relations Contacts
Investor Relations Contacts Europe United States Michael Oberste-Wilms Todd Elliott Oliver Stratmann Andrea Stine phone: +49-(0)69-305-83199 +49-(0)69-305-4139 +1-908-522-7784 fax: +49-(0)69-305-83195 +49-(0)69-305-83195 +1-908-522-7583 email: m.oberste-wilms@celanese.com t.elliott@celanese.com o.st
Slide 33: Glossary
Glossary > Abbreviations = ETP - Engineering Technical Polymers = LCP - Liquid crystal polymer = PBT - Polybutylene terepthalate (Polyester) = POM - Polyoxymethylene (Polyacetal) = PPS - Semi-crystalline polyphenylene sulphide = PVOH - Polyvinyl Alcohol = UHMW – PE - Ultra high molecular weightpolye
Slide 34: FAQ – Frequently Asked Questions
FAQ – Frequently Asked Questions 34 U.S. Roadshow / March 2003
Slide 35: Year End 2002 Capacities of Large-Scale Products in kt/a
Year End 2002 Capacities of Large-Scale Products in kt/a Source: Celanese Databook September 2002 estimates Natural Gas Ethylene Propylene Special Olefins 110 mm BTU/a 725 kt/a 725 kt/a C4-C14, DCP, etc. Methanol Acetic Acid Vinyl Acetate Acetaldehyde Butyraldehyde Crude Acrylic Acid Aldehydes Edmon
Slide 36: Benefit Obligations year-end 2002
Benefit Obligations year-end 2002 > Underfunded pension obligations: €938* Financial statement impact: PBO €2,439 ? P&L - € 28 Assets €1,501 ? B/S - € 804 Underfunded € 938* ? C/F - € 121 > Unfunded postretirement medical obligations: €464 Financial statement impact ? P&L - € 41 ? B/S - € 311 ? C/F
Slide 37: Oxo Products
Oxo Products End Uses Global Demand Producers Others ROW Western BASF 13% 9% 14% Europe Acetates Plasticizers 28% Celanese 13% 43% 11% Japan 10% Other 48% Dow 9% Solvents/ Ethers Asia/Pacific North Eastman 15% 35% America 8% 23% LG Chem. Oxeno 7% Acrylates Total Demand: 5.9 mt Capacity: 7.5 mt 4% 20
Slide 38: Acrylates
Acrylates End Uses Global Demand Producers Copolymers 3% Detergents 5% Japan Celanese 10% Impact Modifiers 3% Europe Other 17% Textiles 5% 9% Lucky Goldstar 2% Fibers 1% Water treatment 32% Formosa Plastic 4% 7% Dow 4% other Asia Others 17% Adhesives 15% TotalFinaElf 9% 11% BASF 24% ROW Nippon Shoku
Slide 39: Nutrinova - Core Business Food Ingredients
Nutrinova - Core Business Food Ingredients Sweetening Food Protection Sales by Segment 2001 in % High Intensity Sunett® - Growth Sweetener Sunett® Nutrinova® Sorbates opportunities Beverages (Acesulfame K) ≥ Beverages: carbona- 74% ≥Market share and ted soft drinks in North ≥Specialty product high A