Celanese Corporation · NYSE:CE
Celanese — Q1 2003 Earnings Presentation
26 slides from Celanese's earnings presentation, 2003
Slide 1: Strategy and Momentum
Strategy and Momentum Lyndon Cole President Ticona 1 Q1 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: 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 4: 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 5: Solid first quarter 2003 results
Solid first quarter 2003 results y-o-y in € millions Q1 2002 Q1 2003 chg. in % Net sales 1,097 1,110 1 Operating Profit (1) 30 58 93 Depreciation and Amortization 75 70 -7 Special (charges), net 0 (1) n.m. Earnings from continuing operations before taxes and minority interest 33 79 139 Net earnings
Slide 6: Operating Profit and Selected Financial Data
Operating Profit and Selected Financial Data Acetyl Chemical Acetate Ticona Performance 80 Products Intermediates Products Products 70 60 29 50 40 30 28 14 20 41 14 2 2 10 14 19 16 11 16 12 14 11 11 0 4 -4 -3 2 -10 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 2002 2003 2002 2003 2002 2003 2002 2003 2002 2003 OP D&
Slide 7: Capital Resource Management
Capital Resource Management in € millions >Strong cash flow Q1 2003: >Net debt: €509 mil. 1400 >Initiatives >Trade working capital: €660 mil. 1200 >Selective capex >Capex: €39 mil. 1000 >Depreciation: €70 mil. 800 600 400 200 0 2000 2001 2002 Trade Working Capital Net financial Debt Capex Depreciati
Slide 8: Outlook
Outlook Celanese price/ volume trend > Limited visibility in 0,2 Price 0,15 global economies 0,1 0,05 0 > Strong € to U.S. dollar -0,05 exchange rate -0,1 -0,15 Volume -0,2 > High and volatile raw 99 00 00 01 01 02 02 03 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 material and energy costs (Year-on-year comparison) > P
Slide 9: Businesses
Businesses 9 Q1 2003 Roadshow
Slide 10: Acetyl Technology Leadership
Acetyl Technology Leadership Acetic Acid Vinyl Acetate Monomer > Primary technology: AO Plus™ > Primary technology: VAntage™ > Leading technology in industry as > Capacity debottlenecks at very low demonstrated by expansion of cost Clear Lake Plant (1,200 kt capacity) > Leading VAM technology in > S
Slide 11: Acetic Acid
Acetic Acid Acetic Acid Producers % Acetic Acid End Uses* BP Amoco Growth: 3-4%/year 25% 14 Other Acetex 5% 19 PTA Millennium 6% 12 Acetic Anhydride Jilin 2% Celanese 14 Acetate Esters Daicel 5% 25% Eastman 4% 41 VAM Other 28% Celanese Products Total capacity 8.6 mt Attractive global industry Source
Slide 12: Nameplate Capacity Utilization
Acetic Acid - Supply/Demand 88% > Demand growth: 3-4% per year > Market conditions improving with Nameplate Capacity Utilization 86% economic recovery 84% 82% > Limited world-scale acetic acid estimated facilities under construction 80% > Significant amount of high cost 78% capacity operates globall
Slide 13: Acetic Acid in China
Acetic Acid in China Acetic Acid Full Cash Cost China Acetic Acid (kt) Total Demand Global Demand 1740 KT US$ per ton 1800 1600 Total Demand 1400 1190 KT Celanese best 1200 CAGR 10% technology 1000 Wood, 800 Ethanol, etc. LPO/ 600 Conventional Naptha 400 TM MeOH/CO AO Plus / 200 Leading Competition
Slide 14: Vinyl Acetate Monomer
Vinyl Acetate Monomer Vinyl Acetate % Vinyl Acetate Monomer Monomer Producers End Uses* Dairen 5% Growth: 3-4%/year Other 40% DuPont 6% Other Nippon Gohsei 11 4% 7 EVA Co Polymers 5 VC/VA Co Polymers Millennium 8% 49 PVAc Emulsions Dow 10% Celanese 25% 28 PVOH Total capacity 4.8 mt Celanese Products
Slide 15: Nameplate Capacity Utilization
Vinyl Acetate Monomer – Supply / Demand 92% > Demand growth: 3-4% per year > No new grass roots facilities under Nameplate Capacity Utilization 90% construction 88% 86% > Improving market capacity estimated utilization 84% > Celanese well-positioned with six 82% global plants 80% > VAntage™ debottle
Slide 16: 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 17: 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 18: 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 product
Slide 19: 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 20: Ticona core products: Vectra and Vectran (Liquid crystal polymer)
Ticona core products: Vectra® and Vectran™ (Liquid crystal polymer) Electronics Telecommunication Key properties > Low melt viscosity > Low heat of fusion enables fast cycle times > Inherent flame-retardancy > High tensile strength and elastic modulus in the flow direction Key markets Sunlight senso
Slide 21: Acetate Market Trends
Acetate Market Trends Acetate Tow Filament 650 100 550 80 450 60 KTA 350 KTA 250 40 “Emerging” markets: Mexico & 150 20 Latin America, Central & eastern 50 Europe, Asia (inc. China) 0 -50 2002 Volume -20 2002 Volume 4% 3% 0% -5% “Traditional” markets: 2% -10% USA & Canada, Western Europe 1% 0% -15%
Slide 22: 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
Slide 23: 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 24: 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 = 5.2 mil. stock appreciation rights outstanding (at March 31, 2002): ? quarterly mark-to-m
Slide 25: 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: [email protected] [email protected] [email protected] > Ticker
Slide 26: 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