Celanese Corporation · NYSE:CE
Celanese — Investor Presentation (November 2010)
36 slides from Celanese's investor presentation, Nov 29, 2010
Slide 1: Celanese Corporation
Celanese Corporation November 2010
Slide 2: Forward-Looking Statements
Forward-Looking Statements 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 needs and other information that is not historical informati
Slide 3: Use of Non-U.S. GAAP Financial Information
Use of Non-U.S. GAAP Financial Information This presentation includes the following non-U.S. GAAP financial measures: operating EBITDA, net debt, proportional share EBITDA and net debt, and adjusted earnings per share. These measurements are not recognized in accordance with U.S. GAAP and should not
Slide 4: Celanese technology-focused portfolio - building on a track record of execution and value creation
Celanese technology-focused portfolio - building on a track record of execution and value creation Celanese ($ in millions) LTM 9/30/2010 Revenue: $5,799 LTM 9/30/2010 Operating EBITDA: $1,088 Advanced Engineered Consumer Specialties Industrial Specialties Acetyl Intermediates Materials Revenue: $1,
Slide 5: Today's Celanese: A Technology and Specialty Materials Company
Today’s Celanese: A Technology and Specialty Materials Company Operating EBITDA Shift Towards Specialty Materials Sustained earnings growth Advantaged 2,000 Intermediates of 10 - 15% - Specialty Materials Commodity 1,500 - Relatively higher margins 1,000 - 500 - Modest earnings Specialty Materials:
Slide 6: Updated view highlights shift to increasingly advantaged portfolio
Updated view highlights shift to increasingly advantaged portfolio $ in Operating EBITDA by Segment1 millions LTM 9/30/20102 Strategic 2013 Current View3 Development Advanced ► Accelerated revenue growth Engineered $363 ► Strong earnings conversion $550-$600 Materials ► Technology-rich product pipel
Slide 7: Value creation levers drive increased earnings
Value creation levers drive increased earnings Geographic Growth Innovation ► Emerging-region leadership drives ► Value-added products drive accelerated growth margin expansion ► Participation in > GDP growth ► Access to new application space industries in developed supports accelerated growth econo
Slide 8: Diversified end-uses capture economic AND geographic growth
Diversified end-uses capture economic AND geographic growth Paints & Other Food & Coatings Beverage Textiles 8% 13% 5% 4% Consumer & Industrial Adhesives 9% Consumer & Construction Medical Applications 3% 12% Chemical Industrial Additives Performance Applications 3% Paper & Packaging 7% 3% Consolida
Slide 9: IS: Nanjing expansion supports vinyl system growth
IS: Nanjing expansion supports vinyl system growth Celanese Emulsion Asia Revenue Asia Growth Nanjing II VAE ► Vinyl system leadership startup • Focus on product technology differentiation • Partner with leading Western and Nanjing I VAE Chinese companies startup ► 2008 Nanjing I • Achieved a leadin
Slide 10: CS: China position continues to strengthen portfolio
CS: China position continues to strengthen portfolio Acetate Strong Partnership for Future Growth Dividends ► Dec 2009 - Announced Dividend Memorandum of understanding for next phase Reinvestmen of China expansion t ► April 2010 - Approved Memorandum of understanding NDRC approval Kunming Cellulose
Slide 11: Value creation levers drive increased earnings
Value creation levers drive increased earnings Geographic Growth Innovation ► Emerging-region leadership drives ► Value-added products drive accelerated growth margin expansion ► Participation in > GDP growth ► Access to new application space industries in developed supports accelerated growth econo
Slide 12: AEM: Application development with key customers drives increasing value per vehicle
AEM: Application development with key customers drives increasing value per vehicle Key Global Automotive Trends Fuel Safety Electrical Efficiency Systems Systems Ticona Polymers Weight per Vehicle Ticona Polymers Value per Vehicle 2005 - 2009 CAGR: 5% 2005 - 2009 CAGR: >9% Strong history of transla
Slide 13: AI: Attractive technology driven cost curve fueled by sustainable process innovation
AI: Attractive technology driven cost curve fueled by sustainable process innovation 2011E Acetic Acid Cost Curve* Ethanol Minimum 15% Additional Ethylene advantage advantage exists achievable today Highest Cost China MeOH Disadvantaged Lowest Celanese Celanese Technology Cost Near Term Lower Cost C
Slide 14: AI: Paradigm shift in proprietary cost advantaged ethanol technology
AI: Paradigm shift in proprietary cost advantaged ethanol technology Significant Prevailing Ethanol Celanese Ethanol Technology Revenue Technology Opportunity Proprietary and breakthrough Undifferentiated technology leveraging Technology fermentation processes Celanese industry- Sustained leading ac
Slide 15: AI: Innovation creates opportunity for growth with increasing demand for industrial ethanol
AI: Innovation creates opportunity for growth with increasing demand for industrial ethanol Global Ethanol Demand Industrial Ethanol Chinese Industrial Ethanol Industrial vs. Fuel Demand by Region Opportunity Industrial Fuel ~5-6 mmT ~40-50 mmT Significant, and growing, demand in China (paints, coat
Slide 16: AI: Exploring fuel ethanol opportunities in commercially supportive regions
AI: Exploring fuel ethanol opportunities in commercially supportive regions Focus on Regions with Favorable Example - China Fuel Ethanol Commercial Environment Government Targeted ~15MM ► Have desire to reduce Fuel Ethanol Blending Gasoline Demand dependence on imported energy ~10MM ► Have access to
Slide 17: Value creation levers drive increased earnings
Value creation levers drive increased earnings Geographic Growth Innovation ► Emerging-region leadership drives ► Value-added products drive accelerated growth margin expansion ► Participation in > GDP growth ► Access to new application space industries in developed supports accelerated growth econo
Slide 18: Consistently delivering productivity over fixed cost inflation
Consistently delivering productivity over fixed cost inflation Fixed Costs1 Spending2 2011-2013 productivity net of inflation $120 - $180 Base 2011E 2012E 2013E Thereafter Productivity Inflation ► Process technology improvements ► Strategic programs • Catalyst / yield • Raw materials • Digitization
Slide 19: Value creation levers drive increased earnings
Value creation levers drive increased earnings Geographic Growth Innovation ► Emerging-region leadership drives ► Value-added products drive accelerated growth margin expansion ► Participation in > GDP growth ► Access to new application space industries in developed supports accelerated growth econo
Slide 20: Recent portfolio enhancements build on advantaged specialty materials
Recent portfolio enhancements build on advantaged specialty materials Advanced Engineered Materials FACT LFT Ibn Sina POM DuPont LCP and PCT Acquisition Expansion Acquisition ► Expands ► Extends current ► Builds on leading customer/application relationship and technology platform space advantaged ra
Slide 21: Economic value of our strategic affiliates
Economic value of our strategic affiliates Earnings and Proportional EBITDA of Affiliates* Cash from Strategic Affiliates >$100 million annual EBITDA in affiliates not reflected in CE Operating EBITDA Other Equity Affiliates Ibn Sina Proportional EBITDA in Excess of Equity Earnings NOT Included in O
Slide 22: Celanese growth opportunities represent an attractive investment for shareholders
Celanese growth opportunities represent an attractive investment for shareholders Leading portfolio with ► Technology-focused; specialty materials strategic affiliates ► Strategic affiliates: Add to attractive portfolio ► Significant mid-term earnings growth Strong earnings opportunities growth ► Ce
Slide 23: Appendix
Celanese Corporation APPENDIX
Slide 24: Confident in short-term earnings growth
Confident in short-term earnings growth In-Year Impact Low High Geographic • Continued strength in emerging economies Growth • Nanjing expansion supports further growth • Commercialization of new Ticona polymer Innovation technology • Emulsions low VOC products • Manufacturing optimization Productiv
Slide 25: Confident in short-term earnings growth
Confident in short-term earnings growth In-Year Impact Low High Geographic • Continued growth in emerging economies Growth • New VAE unit in China Innovation • IS and AEM innovation pipeline • AI process innovation • Further manufacturing optimization Productivity • Energy reduction • Acquisition sy
Slide 26: Earnings power of advantaged portfolio
Earnings power of advantaged portfolio Operating EBITDA $1,600- $1,800 million +~$150 million +>$260 million CE Specific: $857 million 70% of 2011 to 2013 Earnings Improvement Accelerated topline Improved earnings Continued generation growth power & deployment of cash Multiple strategic levers accel
Slide 27: Strategic uses of cash
Strategic uses of cash ($ in Millions) Comments Pro Forma Future Cash 9/30/2010* Generation Excess Cash ► Priority use of cash - strategic Approx. $700 growth opportunities, M&A, and strategic reserve replenishment Reserve $500 - $1,000 ► Debt paydown next largest use of cash ► Modest annual increas
Slide 28: Debt maturities and interest cost
Debt maturities and interest cost Before Transaction ($mm) Benefits After Transaction ($mm) ► Maintained flexibility Revolver Capacity Existing Term Loan Extended Term Loan New Senior Unsecured Notes Net Interest Cost Impact on Interest Cost ($mm) ► Minimal effect in 2010 ► Significant decrease in 2
Slide 29: Reg G: Segment data and reconciliation of operating profit (loss) to operating EBITDA (table 1)
29 Reg G: Segmentdata and reconciliationof operating C) Celanese profit (loss) to operating EBITDA - a non-U.S. GAAP measure (table 1) - unaudited ggeg~ga| sasqgls] fedex Nrors bt ReTorig 569 817 745 1,860 1 (298) 3,694 4 184 73 20 (100) 181 3 6 (18) 96 13 00 53 37 35 82 9 6 835 817 787 2.283 1 (312
Slide 30: Reg G: Reconciliation of consolidated operating EBITDA to net earnings (loss) (table 2)
Reg G: Reconciliation of consolidated operating EBITDA to net earnings (loss) - (table 2) - unaudited 30
Slide 31: Reg G: Reconciliation of other charges and other adjustments (table 3)
Reg G: Reconciliation of other charges and other adjustments (table 3) - unaudited 31
Slide 32: Reg G: Equity affiliate preliminary results - Total (table 4)
Reg G: Equity affiliate preliminaryresults - Total - ‘2 Celanese (table 4) - unaudited 3 Twelve Nine Months Ended Year Ended Months Ended (in $ millions) September 30, December 31, September, 30 2010 2009 2009 2010 As Adjusted As Adjusted Net Sales Ticona Affiliates - Asia‘ 1,143 761 1,105 1,487 ‘Ti
Slide 33: Reg G: Equity affiliate preliminary results - Celanese proportional share (table 5)
‘ Celanese Reg G: Equity affiliate preliminaryresults - Celanese proportionalshare (table 5) - unaudited SOLE UIE IO) you ui Aynbs ‘ote. (mez) (6605) VS 8UN ‘f05) SeuisnpY Voss (KOS) id on oz ‘Sve 78 Zot ob (ay) (ov) (ev) ov 9s 6 zt stb 98 ia w ee (4 4 eb ee ‘9 or ts 08 3s 4b FeIOL rr wz aL ib SONNY
Slide 34: Reg G: Proportional EBITDA in affiliates above earnings from equity investments (table 6)
Reg G: Proportional EBITDA in affiliates above earnings from equity investments (table 6) - unaudited 34
Slide 35: Reg G: Adjusted earnings (Loss) per share - reconciliation of a non-U.S. GAAP measure
Reg G: Adjusted earnings (Loss) per share - reconciliation of a non-U.S. GAAP measure 35
Slide 36: Slide 36