Celanese Corporation · NYSE:CE
Celanese — Q2 2003 Earnings Presentation
30 slides from Celanese's earnings presentation, 2003
Slide 1: A Focus on Results
A Focus on Results 1 Q2 2003 Roadshow
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: Topics
Topics > Celanese overview > Results > Businesses > Outlook 3 Q2 2003 Roadshow
Slide 4: Celanese: A Leading Chemical Company
Celanese: A Leading Chemical Company > #1 or # 2 in ~70% of revenue 2002 Sales by Destination: € 4.3 bn. > 25 production and 6 R&D sites in 11 countries NAFTA Asia > North American core 44% 18% = ~50% of sales, ~60% of its Non-consolidated asian employees and ~70% of assets affiliates: ~€1bn sales 4
Slide 5: Celanese Business Segments
Celanese Business Segments Acetyl Products Ticona Technical Polymers Performance Products Acetic acid, vinyl acetate, Polyacetal, polyester, UHMW-PE, Nutrinova food ingredients polyvinyl alcohol, emulsions liquid crystal polymers Sweetener, food preservatives, components for healthy nutrition Market
Slide 6: Second Quarter Highlights
Second Quarter Highlights > OP improves to €110 million > EPS rise to €1.97 per share 110 > Insurance income recognition of 30 58 19 €90 million in Q2 Q1 Q2 Q1 Q2 2002 2003 > Oxo JV on track to start operations before end of 2003 > Ground-breaking with Asian partners for POM plant in Nantong, China
Slide 7: Second Quarter 2003 Results
Second Quarter 2003 Results in € millions Q2 2002 Q2 2003 H12002 H12003 Net sales 1,121 1,079 2218 2189 Operating Profit 19 110 49 168 Depreciation and Amortization 74 70 149 140 Special (charges), net (3) 80 -3 79 Earnings from continuing operations before taxes and minority interest 32 146 65 225
Slide 8: Second Quarter at a Glance
Second Quarter at a Glance Acetyl Products Chemical Intermediates In € million yoy change In € million yoy change in % in % Sales 527 7 Sales 215 -7 Operating Profit 37 23 Operating Profit -6 n.m. > Price increases outpaced raw > Price increases in all product materials lines > Volumes slightly lowe
Slide 9: Second Quarter at a Glance
Second Quarter at a Glance Ticona Acetate Products In € million yoy change In € million yoy change in % in % Sales 181 -10 Sales 151 -14 Operating Profit 96 >100 Operating Profit 4 -60 > Volumes slightly higher (GUR®, > Higher filament and tow POM) volumes > Slower automotive sector > Increased raw
Slide 10: Second Quarter at a Glance
Second Quarter at a Glance Performance Products In € million yoy change in % Sales 42 -5 Operating Profit 2 -86 > Continued strong Sunett® application development > Lower unit selling prices and higher volumes > Increased accrual for Sorbates antitrust actions 10 Q2 2003 Roadshow
Slide 11: Strong Cash from Operations
Strong Cash from Operations In € million •2003 Net Debt considerations : •Insurance recovery, €110 million inflow •Focus on Working Capital 497 524 •Strong Operating Cash Flow € 64 Million -€93 Million •FY Capex approx. €200 million operating cash flow investing cash flow FY Net Debt 12/31/2002 Oper
Slide 12: Business Information
Business Information 12 Q2 2003 Roadshow
Slide 13: Acetyls – Leading Market Position
Acetyls – Leading Market Position Acetic Acid Producers Vinyl Acetate Monomer Producers BP Amoco 25% Dairen 5% Other 40% DuPont 6% Nippon Gohsei Acetex 5% 4% Millennium 6% Millennium 8% Jilin 2% Celanese Daicel 5% 25% Dow 10% Eastman 4% Celanese 25% Other 28% Total capacity 8600 kt Total capacity 48
Slide 14: Acetyl Technology Leadership
Acetyl Technology Leadership Acetic Acid Full Cash Cost Global Demand Acetic Acid US$ per ton > Primary technology: AO Plus™ > Leading technology in industry as Celanese best demonstrated by expansion of Clear technology Lake Plant (1,200 kt capacity) Wood, > Strong patent position with Ethanol, etc
Slide 15: Industry Capacity Utilization
Major Acetyl Products: Supply/Demand 92% 90% > Demand growth: 3-4% per year Vinyl acetate 88% > Market conditions improving with 86% economic recovery Industry Capacity Utilization 84% > Limited world-scale acetic acid facilities under construction 82% Acetic acid > Significant amount of high cost a
Slide 16: China Is Fastest Growing Acetyls Market
China Is Fastest Growing Acetyls Market Acetic Acid kt Total Demand World-Scale Plant Planned 1800 1740 kt 1600 > 600,000 ton acetic acid facility 1400 Total Demand 1190 kt > Startup in late 2005/early 2006 1200 CAGR 10% 1000 800 > Based on leading, cost effective 600 technology 400 200 > More than
Slide 17: Celanese Natural Gas-based Raw Material Consumption for Acetic Acid
Celanese Natural Gas-based Raw Material Consumption for Acetic Acid Disconnected from North 75% American raw materials 28% 55% 0% 2003 2006 (assumed start-up) China* 25% 2003 2006 17% North America* “Stranded” gas based 2003 2006 Singapore* Market based * Per cent of global natural gas-based raw mat
Slide 18: Ticona: Technology Enabler In Key Industries
Ticona: Technology Enabler In Key Industries Volumes by end use market Medical 3% 2002 Sales: € 757 million Automotive 53% Other 8% Alternate Celcon®/Hostaform® All Products Fabrication 5% Celanex® Electrical & Industrial 12% Appliances 6% Electronics 7% Consumer 6% Fortron® , Hostaform® (e.g. Telec
Slide 19: Ticona core products: Hostaform®/Celcon® (Polyacetal)
Ticona core products: Hostaform®/Celcon® (Polyacetal) Automotive Fuel Systems Medical Technology Key properties > High toughness, hardness and stiffness > Excellent resilience > Good slip properties > Good chemical resistance, e.g. to fuels, solvents, strong alkalis Key markets > Automotive producti
Slide 20: Ticona core products: GUR® (UHMW-PE)
Ticona core products: GUR® (UHMW-PE) Key properties Ems river > Exceptionary high impact strength flood > Very low wear gate > Excellent friction performance > High chemical resistance Key markets > Mechanical engineering, conveyor equipment Sinter plate filters > Chemical industry Bucket wheel exca
Slide 21: Ticona Optimization Measures
Ticona Optimization Measures Sales and Administration Expenses per quarter: > Consolidate sites > Reduce complexity of organization and processes € 5-10 mio. through 2004 > Enhance customer focus > Accelerate Six Sigma Operations Benefits: > Capture productivity gains Starting in 2004 > Consolidate
Slide 22: Strong Progress in Operational Excellence
Strong Progress in Operational Excellence 2001 2002 2003 Streamlined Forward restructuring organization Six Sigma Operations 2/’01 Lean Sigma Administration 1/’02 Design for Six Sigma Growth 1/’03 Digitization Advanced process control 3/’01 Real-time optimization 4/’02 Manufacturing Execution System
Slide 23: 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 > Incentives reflected in income statement = 5 mio. stock appreciation rights outstanding (June 30, 2003): ? quarterly mark-to-market
Slide 24: Outlook - FY 2003
Outlook - FY 2003 > Key Assumptions > Current guidance = H2 business environment: = Operating Profit: second half may be below second half of 2002, FY 2003 better than FY ? slow demand conditions in 2002 most businesses = “Others“ OP: ? strong euro exchange rate ~ -€20 mil. per quarter ? continued h
Slide 25: Conclusion
Conclusion > Well-positioned businesses, geared for recovery > Executing on growth and productivity efforts > Disciplined cash management > Aligned, experienced, motivated, change-focused leadership Improving performance 25 Q2 2003 Roadshow
Slide 26: Investor Relations Contacts
Investor Relations Contacts Europe United States Todd Oliver Andrea Elliott Stratmann 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: t.elliott@celanese.com o.stratmann@celanese.com a.stine@celanese.com > Ticker
Slide 27: Additional Information
Additional Information 27 Q2 2003 Roadshow
Slide 28: 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 29: 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 30: Nutrinova: Food Ingredients
Nutrinova: Food Ingredients Sweetening Food Protection High Intensity Nutrinova® Sorbates Sweetener Sunett® (Acesulfame K) > Commodity product > Specialty product with high performance > Market share and technology leadership and good position in the high intensity sweetener market > Competitive mar