Celanese Corporation · NYSE:CE
Celanese — Investor Day (May 2018)
22 slides from Celanese's investor day presentation, May 1, 2018
Slide 1: Acetyl Chain Investor Day, May 1, 2018
Todd Elliott SENIOR VICE PRESIDENT, ACETYL CHAIN I N V E S T O R D A Y M A Y 1 , 2 0 1 8
Slide 2: Acetyl Chain storyline 2020
2I N V E S T O R D A Y 2 0 1 8 Acetyl Chain storyline 2020 > Improving fundamentals and structural reform in China > Margins enhanced by Acetyl Chain’s (AC) repeatable model > Network positions with greatest flexibility > Multiple growth opportunities will lift volume and revenue
Slide 3: Progressive lift in earnings profile
3I N V E S T O R D A Y 2 0 1 8 Progressive lift in earnings profile STEP CHANGES IN ADJUSTED EBIT (in millions) 201420132012 $375 $374 $611 $498 $454 $575 ~$775 2015 2016 2017 2018F Targeting additional growth through 2020 MEETING OUR COMMITMENTS > Grow adjusted EBIT at 10% CAGR > Consistently gener
Slide 4: Demand growth for 2017-2020
4I N V E S T O R D A Y 2 0 1 8 1 Demand growth for 2017-2020 2 Operating utilization is based on estimated actual production capacity accounting for regular maintenance outages and other estimated physical limitations Improving utilization rates Demand growth is outpacing supply Esters PTA EVOH EVA
Slide 5: Already seeing industry impact from reforms
5I N V E S T O R D A Y 2 0 1 8 Already seeing industry impact from reforms China reforms impacting acetyls landscape INCREASE IN ENVIRONMENTAL REFORM IMPLEMENTATION > Environmental concerns have been a focus > New local policies reinforcing central government policies > Requirement to improve econom
Slide 6: China acetyls capacity impacted
6I N V E S T O R D A Y 2 0 1 8 C H I N A Celanese Note: Approximate locations of plants shown Expect older and more polluting technology capacity to decline China acetyls capacity impacted Industry response will vary > Shut down > Relocate > Upgrade > Restructure 2+26 PLAN ENVIRONMENTAL LAW J IANGSU
Slide 7: Though variation will continue, expect a structurally better industry
7I N V E S T O R D A Y 2 0 1 8 Though variation will continue, expect a structurally better industry Changes in China affect utilization GLOBAL ACETIC ACID & VAM SUPPLY & DEMAND WITH FORECASTED REGULATORY IMPACT 2016 2017 2018F 2019F 2020F U T I L I Z A T I O N V O L U M E ( k T ) 95% 90% 85% 80% 75
Slide 8: Leadership position supports unequaled market knowledge and optionality
8I N V E S T O R D A Y 2 0 1 8 Source: CE estimates Leadership position supports unequaled market knowledge and optionality Most integrated and global acetyls player Celanese Positioning Celanese LyondellBasell Wacker Sipchem Dairen BP BP JVs Eastman METHANOL ACID VAM EMULSIONS AMERICAS EMEA CHINA A
Slide 9: Continuous advancements in process technology and operational excellence
9I N V E S T O R D A Y 2 0 1 8 Continuous advancements in process technology and operational excellence 1 Per ton of acetic acid based on average usage for all competitors by technology type Leading technology position TECHNOLOGY-LED RAW MATERIALS AND CAPITAL EFFICIENCY Celanese AOPlu s® Celanese AO
Slide 10: Unique optionality spanning across oil, gas and coal
10I N V E S T O R D A Y 2 0 1 8 Unique optionality spanning across oil, gas and coal Feedstock optionality CARBON MONOXIDE VARIABLE COST BY FEEDSTOCK ($/MT) 2013201220112010200920082007 20152014 2016 2017 2018F Oil Coal Natural Gas 100% Utilization
Slide 11: Commercial flexibility creates value
11I N V E S T O R D A Y 2 0 1 8 ...and supports margin improvement Commercial flexibility creates value METHANOL > Constructed world-scale plant > From international to local suppliers based on in-region dynamics > Doubled number of suppliers ETHYLENE > Multi-sourcing with overlapping contracts allo
Slide 12: Expansive reach and multiple nodes add degrees of freedom
12I N V E S T O R D A Y 2 0 1 8 Expansive reach and multiple nodes add degrees of freedom Leading positions enable flexibility PARTNERSHIPS PRODUCTS OFFERED FEEDSTOCK ACCESS GEOGRAPHIES MARKET LEVERS PRODUCTION FACILITIES CUSTOMERS SUPPLY CHAIN Shipping routes Stranded molecules Derivatives VAM Acet
Slide 13: Enable network activations and expand degrees of freedom
13I N V E S T O R D A Y 2 0 1 8 Enable network activations and expand degrees of freedom High market access and connectivity MARKET INPUTS Customer demand End-use demand Supply dynamics Regional value Global plant cost curves Make vs. buy economics Trade flows Regional inventories > Shift production
Slide 14: Increasing network activations
14I N V E S T O R D A Y 2 0 1 8 > Change production rates in different geographies > Add terminals …to leverage Celanese degrees of freedom and optionality Increasing network activations INCREASES THROUGH: > Commercial flexibility > Partnerships & alliances > Supply network expansion 50% INCREASE YE
Slide 15: In a position to increase volume and growth
15I N V E S T O R D A Y 2 0 1 8 In a position to increase volume and growth Model strength reflected in margin VALUE PRESERVATION ENHANCED FLEXIBILITY GROWTH > Shut down non-competitive sites > Restructured contracts > Expanded supply chain reach > Real time operating model > Expanding industry rela
Slide 16: Positioned to grow volume
16I N V E S T O R D A Y 2 0 1 8 Positioned to grow volume Strong investment opportunities through this decade and beyond > World-scale acetic acid unit > Supporting methanol capacity > Potential M&A > Provide access to stranded molecules > Supporting customer growth > Lift organic growth by 2-4% uti
Slide 17: Executing on 300kT of capacity additions
17I N V E S T O R D A Y 2 0 1 8 Executing on 300kT of capacity additions Additional VAM capacity VAM Capacity Remaining 4 Units Clear Lake ~1,400kT +150kT Expansion ~150kT from Process Technology & Debottleneck ~1,700kT Future VAM Capacity > Committed to Western Hemisphere with capacity to support g
Slide 18: Capacity addition required to meet demand
18I N V E S T O R D A Y 2 0 1 8 Capacity addition required to meet demand – Celanese uniquely positioned Next steps for acetic acid expansion > Additional acetic acid investment required in Americas and EMEA to support demand growth > Executing on Clear Lake technology improvements > Evaluating mult
Slide 19: Partnering to connect molecules
19I N V E S T O R D A Y 2 0 1 8 Partnering to connect molecules Acid VAM Anhydride Esters Acetone Derivatives Methanol Derivatives Aldehyde Chain Emulsions Amines Specialties P A R T N E R S Working to add molecules to AC’s global network Relationship Categories
Slide 20: Significant step-up in earnings
20I N V E S T O R D A Y 2 0 1 8 Significant step-up in earnings Volume and margin driving growth 2012 2013 2014 2015 2016 2017 2018F 2019F 2020F +~100kT +~150kT +~150kT 20% 12% 14% 16% 10% 10% Annual volumeLTM Adj. EBIT % VALUE PRESERVATION ENHANCED FLEXIBILITY GROWTH ~3-5% V O L U M E U P L I F T
Slide 21: Power of the Acetyl Chain
21I N V E S T O R D A Y 2 0 1 8 ADJUSTED EBIT (in millions) 2017 Volume Growth Industry Utilization Operational Flexibility 2020F $575 $80 $95 $150 ~$900+ 16% CAGR Structural industry changes Expanding network and degrees of freedom Repeatable model Ready-now growth steps PARTNERSHIPS OPTIONALITY IN
Slide 22: Next Up: Celanese Innovation Showcase
22I N V E S T O R D A Y 2 0 1 8 Next Up: Celanese Innovation Showcase Tangible examples of the Celanese value creation model