Celanese Corporation · NYSE:CE
Celanese — Investor Day (May 2018)
25 slides from Celanese's investor day presentation, May 1, 2018
Slide 1: Scott Sutton, Chief Operating Officer – Investor Day May 1, 2018
Scott Sutton CHIEF OPERATING OFFICER I N V E S T O R D A Y M A Y 1 , 2 0 1 8
Slide 2: Engineered Materials storyline 2020
2I N V E S T O R D A Y 2 0 1 8 Engineered Materials storyline 2020 > The demand growth for solutions across all markets is robust > Celanese has unassailable positions in its solution set. The nearest competitor has half of our breadth > Model cannot be replicated by others. We are market and produc
Slide 3: Track record of earnings growth
3I N V E S T O R D A Y 2 0 1 8 Track record of earnings growth Delivering volume growth – creating a high-value business > Double-digit earnings growth CAGR through 2018 > Grow opportunity pipeline at 20% CAGR > Grow EM through bolt-on acquisitions in nylon > Expand JV earnings ; ; ; ;201420132012 $
Slide 4: Customers are differentiating faster
4I N V E S T O R D A Y 2 0 1 8 Source: International Monetary Fund, Bloomberg, Statista, IHS, CE estimates Customers are differentiating faster The embedded market growth is robust 2% 4% 4% 3% 11% 27% 25% 49% 2016-2017 GROWTH CELANESEMARKET Auto Global GDP Electronics Consumer Medical
Slide 5: Driving unprecedented complexity for EM customers
5I N V E S T O R D A Y 2 0 1 8 1 Bank of America Merrill Lynch Global Research ...driving unprecedented complexity for EM customers Shorter life cycles and increased functionality SHORTENING PRODUCT LIFE CYCLES DIFFERENTIATED FUNCTIONALITY 2010-2017 Average 2007-20172018-2021 Average Number of Conne
Slide 6: Allows unlimited growth opportunities for EM
6I N V E S T O R D A Y 2 0 1 8 …allows unlimited growth opportunities for EM Auto Interior Auto Powertrain Auto Exterior Energy Storage/Renewable ElectronicsAdditives, Fibers, Semi-Finished Fluid Handling Appliance Material Handling Home Goods Medical & Pharma Mobile Devices & Other E&E Connectors B
Slide 7: Customer enabling competencies
7I N V E S T O R D A Y 2 0 1 8 ...allows EM to uniquely multiply more customer challenges to projects CUSTOMER ENABLING COMPETENCIES EXTENSIVE FUNCTIONALITY OF POLYMERS BREADTH OF POLYMERS The broadest set of solutions…
Slide 8: Far ahead of the nearest competitor
8I N V E S T O R D A Y 2 0 1 8 Note: Peers include major players with significant backward integration into polymers - Arkema, BASF, DowDuPont, DSM, Evonik, PPC, Sabic, Solvay Source: CE estimates Far ahead of the nearest competitor Industry leading breadth of polymers POLYMERS IN PRODUCT PORTFOLIO
Slide 9: Extensive functionality applied across polymers
9I N V E S T O R D A Y 2 0 1 8 Extensive functionality applied across polymers High Strength & Stiffness Media Resistant Tribology COMPACT CAMERA MODULE COSMET ICS D ISPENSER Compliant Anti- microbial Appearance UV Stabilized Electrically Conductive Heat Stabilized Low Emission High Flow Low Warpage
Slide 10: Customer enabling competencies across the value chain
10I N V E S T O R D A Y 2 0 1 8 …proliferate the power of solutions across the complete value chain Customer enabling competencies CELANESE MOLDER OEM / FINAL PRODUCT MANUFACTURER SYSTEMS & TIER SUPPLIERS Formulation Development Part & Tool Design Prototyping Part Processing Testing & Analytical Cus
Slide 11: Model is a project-based growth machine
11I N V E S T O R D A Y 2 0 1 8 This proprietary process is enhanced every day! Model is a project-based growth machine C U S T O M E R O P P O R T U N I T I E S | C U S T O M E R O P P O R T U N I T I E S | C U S T O M E R O P P O R T U N I T I E S | C U S T O M E R O P P O R T U N I T I E S | C U
Slide 12: Process to handle many projects efficiently
12I N V E S T O R D A Y 2 0 1 8 ...and translate wins across customers, geographies and programs Process to handle many projects efficiently OPPORTUNITIES SCREENED PROJECTS ORGANIZED INTO FOCUS PROGRAMS TRENDS & PATTERNS INSIGHTS & ANALYTICS KEY LEARNINGS Unique combination of customer, material and
Slide 13: Translation is a game-changer
13I N V E S T O R D A Y 2 0 1 8 Resulting in wide propagation of solutions penetration Translation is a game-changer S O L U T I O N S G R O W T H T I M E EM MODEL EXPERIENCE CURVE EVOLUTION Current State Initial Penetration Other Parts and Devices T R A N S L AT I O N 3 Other Geographies T R A N S
Slide 14: Results in a sea of wins
14I N V E S T O R D A Y 2 0 1 8 All markets, all locations Results in a sea of wins R E F R I G E R A T O R U N I T • Door seals: TPE • Hinge cover: POM • Compressor silencer: PBT • Compressor anti-vibration mounts: TPV • Shelf frame: PP F R E E Z E R • Anti-fog film: Acetate film L I G H T I N G •
Slide 15: Scale the model
15I N V E S T O R D A Y 2 0 1 8 ...continue to improve our efficiency Scale the model SCALIN G THE PIPELIN E MODE L EX P ANDEDIN G OUR PROJEC T CA P ACIT Y GROWIN G ORGANI C VOLUM E 2015 2016 2017 2018F 2020F ??? ??????1??1?? WIN RATE 35% WIN RATE 45% WIN RATE >50% Projects managed Projects won +0%
Slide 16: Grow in medical & pharma
16I N V E S T O R D A Y 2 0 1 8 Insulin Injection Pens Grow in medical & pharma Celanese EM grows at 4x underlying medical & pharma market growth N E W C O M M E R C I A L M O D E L > Early monetization to access Celanese technology > Per device revenue royalty model > Application areas Orthopedic J
Slide 17: Grow in energy storage
17I N V E S T O R D A Y 2 0 1 8 Portable Appliances B R O A D C O M M E R C I A L M O D E L > Contract with 100% of membrane converters > Collaborate with every car and electronic OEM > Application areas Celanese EM grows at 3x underlying energy storage market growth Electronics Power Tools – Electr
Slide 18: Expand through novel technology
18I N V E S T O R D A Y 2 0 1 8 Best-in-industry product development provides a foundation for growth Expand through novel technology Oven-to-Freezer Plastic Cookware Low Friction Plastics for High Wear Environments > Lightweight food tray/pan for cooking, freezing, serving and reusing > Application
Slide 19: Extend through bolt-on acquisitions
19I N V E S T O R D A Y 2 0 1 8 Extend through bolt-on acquisitions P R O J E C T O P P O R T U N I T I E S P R O D U C T S C A P A C I T Y TCP PA 6, PA 66, PBT, TPC-ET, PP, TPU, SEBS, TPV, TPO, SBS PA 6, PA 66, PBT, PP, PC, PC/ABS, ABS PA 6, PA 66 ~100 200kT <5kT 75kT 50kT ~500 ~625 ~575 ACHIEVED N
Slide 20: Margin expected to stay constant but absolute earnings grow
20I N V E S T O R D A Y 2 0 1 8 Margin expected to stay constant but absolute earnings grow Bolt-on margin accretion % M A R G I N Bolt-on 25% 1 Bolt-on 2 Bolt-on 3 Stand-alone base business margin trajectory TODAY 2020 A C Q U I S I T I O N 1 A C Q U I S I T I O N 2 A C Q U I S I T I O N 3 ~20% EM
Slide 21: Acquisition opportunities ahead
21I N V E S T O R D A Y 2 0 1 8 ...focus areas designed to extend polymer, application and market positions in EM Acquisition opportunities ahead MORE SOLUTIONS IN GROWTH APPLICATIONS NEW AND HIGH GROWTH GEOGRAPHIES POLYMER PORTFOLIO EXPANSION ADDITIVE MANUFACTURING Growth in key applications (medic
Slide 22: Benefits from JV transactions
22I N V E S T O R D A Y 2 0 1 8 Opportunity to enhance earnings and growth Benefits from JV transactions Kureha 50% ownership PPS Mitsubishi Gas 50% ownership POM Daicel 45% ownership POM PBT LCP PPS > Earnings are after-tax > Have opportunities to restructure > More room for value to be recognized
Slide 23: Demand growth is outpacing supply
23I N V E S T O R D A Y 2 0 1 8 Source: IHS estimate. CE internal estimates ...creating volume growth opportunities for EM Demand growth is outpacing supply POM SUPPLY & DEMAND DEMAND > POM applications continue to grow well above GDP SUPPLY > No significant capacity expansions on the horizon > High
Slide 24: EM is positioned to grow
24I N V E S T O R D A Y 2 0 1 8 Strong investment opportunities based on volume growth, returns >25% EM is positioned to grow > Bolt-ons in new geographies > Bolt-ons in new polymers > Bolt-ons in new technologies > JV restructuring > Medical & Pharma > Emerging technology > Innovation programs > En
Slide 25: Power of Engineered Materials
25I N V E S T O R D A Y 2 0 1 8 Power of Engineered Materials ADJUSTED EBIT (in millions)Robust opportunity market Broadest solutions portfolio Novel model Key growth initiatives 2017 Pipeline Growth Technology Programs Acquisitions 2020F $599 $130 $90 $80 ~$900+ 15% CAGR TWO TRANSACTIONS ADJUSTED B