Celanese Corporation · NYSE:CE
Celanese — Q3 2002 Earnings Presentation
27 slides from Celanese's earnings presentation, Nov 8, 2002
Slide 1: Progress in Strategy and Operations
Progress in Strategy and Operations Perry Premdas, Chief Financial Officer
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: Global Leader in Major Regions
Global Leader in Major Regions > #1 or #2 global supplier in 70% of sales > Leading technology positions > 30 plants in 11 countries > 70% of assets in NAFTA > Global share (NYSE: CZ; FSE: CZZ) 2001 Sales = €5.1 bn By Major End Use Market (2002 est.) By Destination (2001) Packaging E & E / Appliance
Slide 4: Business Segments and Direction
Business Segments and Direction Emulsions businesses acquisition ? announced Acetyl Products €2,155 m on Sept. 26 E Sales by Segments Acetic acid, vinyl acetate monomer, polyvinyl alcohol X 2001: €5.1bn ? Technical Polymers Ticona €773 m Polyacetal, polyester, liquid crystal polymers, UHMW- PE P 15%
Slide 5: Improving Efficiency and Optimizing the Portfolio are the Paths to Increasing Value
Improving Efficiency and Optimizing the Portfolio are the Paths to Increasing Value Optimize and expand the portfolio > Investments in Reduce costs businesses with stronger margins Increase the > Restructuring value of the > New plants and company > Initiatives Focus expansions Demerger and Forward
Slide 6: Growth and Productivity
Growth and Productivity Growth 2002 Operational Excellence • “Forward” & “Focus” • Announced emulsions acquisition • Expanded U.S. UHMW-PE capacity • Six Sigma • Broke ground for neo polyol esters • Digitization JV plant • Best practices • Announced China POM plant JV • EHS Excellence (2005) • “ONE”
Slide 7: Business Environment
Business Environment Industry Production Indicators Capacity utilization 30 Automotive PI NA Automotive PI EU General Industries PI NA General Industries PI EU 92% 20 90% % change to previous year quarter 88% Vinyl Acetate Monomer 10 86% 0 84% 82% Acetic Acid -10 80% 78% - estimated - -20 76% 2000 Q
Slide 8: Key Financial Data
Key Financial Data in € millions Q3 2001 Q3 2002 chg. in % Q2 2002 Net sales 1,233 1,122 (9) 1,205 EBITDA excluding special charges 88 142 61 102 EBITDA excluding special charges margin 7.1% 12.7% 8.5% Special (charges), net 0 (2) n.m. (3) Net earnings (loss)(1) 20 39 95 22 Earnings (loss) per share
Slide 9: EBITDA Development
EBITDA* Development € million 180 160 140 120 100 80 60 142 40 88 20 0 Q3 2001 Volume Price Variable Energy Spending Stock Other Q3 2002 Costs Rights Lower raw material costs and savings driving performance *excluding special charges 9 3rd Quarter Roadshow, Nov. 8, 2002
Slide 10: EBITDA/Sales: Continuous Improvement Throughout this Year
Continuous Improvement Throughout this Year EBITDA* in € million and as % of sales Q3 2001 Q1 2002 Q2 2002 Q3 2002 24 24 23 20% 20 76 24 26 15% 25 28 61 EBITDA*/ Sales 23 10% 44 40 21 14 13 14 5% 0% 0 -2 -5% -10 Acetyl Products Chemical Acetate Products Ticona Performance Intermediates Products *exc
Slide 11: Net Financial Debt Development
Net Financial Debt Development in € million €217 million operating cash flow -€126 million investing cash flow 900 800 700 600 500 400 832 656 300 200 100 0 12/31/2001 Operations Affiliates Receivable Trade Working Special Capex Other Other 09/30/2002 Securitization Capital Charges investing activit
Slide 12: Outlook - FY 2002
Outlook - FY 2002 > Key Assumptions > Current guidance* = Q4 business environment: = EBITDA**: slightly above last year´s ? improved supply demand level situation in Acetyl segment = “Others“ EBITDA**: expected to continue ~ -€30 mil. in Q4 ? weaker consumer = Interest & other income: confidence cou
Slide 13: Acetyl Products - Leading Market Position
Acetyl Products - Leading Market Position Acetic Acid Vinyl Acetate Monomer % market share % market share 30 30 25 25 20 20 15 15 10 10 5 5 0 0 Celanese BP Amoco Millennium Celanese Dow Millennium Industry Capacity: 8.6 mt 4.8 mt Celanese Rank: World #1 World #1 Polyvinyl Alcohol Emulsions* ounced E
Slide 14: Integration into Value-Added Products
Integration into Value-Added Products Current Basic Chemicals Value- Added Market Focus Adhesives Emulsions Acetate Coatings Esters Construction Non-woven textiles Vinyl Emulsion Acetic Powders Construction Methanol Acetate Acid (VAM) To be acquired Acetic Adhesives Anhydride Safety Glass Polyvinyl
Slide 15: Emulsions Acquisition: Strategic Businesses at Reasonable Multiples
Emulsions Acquisition*: Strategic Businesses at Reasonable Multiples Purchase price ~€147 mil. Forecasted financials, annualized: > Sales ~€300 mil. > Sales multiple 0.5 > EBITDA ~€35-45 mil. > EBITDA multiple 3.3 - 4.2 > EBITDA margin 12%-15% Cash flow positive and EPS accretive in 2003 * Subject t
Slide 16: Acetyl Quarterly Volume and Price Trend
Acetyl Quarterly Volume and Price Trend Year-on-year change 30% 20% 10% 0% Q1 ‘01 Q2 ‘01 Q3 ‘01 Q4 ‘01 Q1 ‘02 Q2 ‘02 Q3 ‘02 -10% -20% -30% -40% Volume Price Price recovery throughout 2002; Volumes in line with GDP 16 3rd Quarter Roadshow, Nov. 8, 2002
Slide 17: Ticona and its Affiliates -- Global Presence
Ticona and its Affiliates -- Global Presence Telford / UK Oberhausen / Germany Kelsterbach / Germany Fuji City/Japan Winona, MN Auburn Hills, MI (Polyplastics)* Florence, KY Summit, NJ Seoul / Korea(KEP) ** Bishop, TX Wilmington, NC*** (Fortron Industries) Nantong / China (Polyplastics/ Shelby, NC M
Slide 18: Global Consumption of Engineering Technical Polymers
Global Consumption of Engineering Technical Polymers GLOBAL ETP CONSUMPTION (kt) 10000 4,070 4,760 5,940 6,400 7,470 8,820 > After 2001 recession, 2002 ETP consumption is expected to 9000 grow again 8000 > 1997 - 2007 estimated 7000 annualized average ETP growth 6000 rate: 5000 = Global: 6-8% 4000 =
Slide 19: Major End-Use Industries
Major End-Use Industries Volumes by end use market* 2001 Sales: € 773 million Other 8% Medical 3% Alternate Fabrication 5% Aerospace Medical Appliances 6% Fortron® Celcon®/Hostaform® Celanex® Consumer 6% Industrial 12% E&E 7% Automotive 53% Automotive Telecommunications All Products Vectra® , Fortro
Slide 20: Medical Markets - Meeting High Product Performance Requirements
Medical Markets - Meeting High Product Performance Requirements Application > Powder inhaler Novolizer® (manufacturer: Sofotec) for asthma sufferers Challenge > Complex mechanics > Optimal safety and precision for multiple exact dosage applications Material of choice > Hostaform® (POM) > Celanex® (P
Slide 21: Ticona quarterly Volume / Price trend
Ticona quarterly Volume / Price trend Year-on-year change 10% 5% 0% Q2 ‘02 Q3 ‘02 Q1 ‘01 Q2 ‘01 Q3 ‘01 Q4 ‘01 Q1 ‘02 -5% -10% -15% -20% -25% -30% Volume Price Volume recovery outweighs pricing decline 21 3rd Quarter Roadshow, Nov. 8, 2002
Slide 22: Ticona Invests for Growth
Ticona Invests for Growth > New investments & capacity expansions Start-up = GUR® (UHMW-PE) 30kt 2002 ü = Vectra® (LCP) 5.3kt 2002ü /2005 (2 stages) = Hostaform® /Celcon® (POM) 17kt 2003 > Leveraging innovation for new applications = Substitution of metal, glass, ceramics and other plastics > Extern
Slide 23: Six Sigma Making a Major Contribution
Six Sigma Making a Major Contribution > Provides growth and produc- Areas of Financial Impact tivity benefits, in all cost areas > Capital Avoidance > Drives rapid change, as initial > Variable successes energize work force > Working Capital > Creates transition to data driven culture, where tribal
Slide 24: Ownership in Performance
Ownership in Performance > Senior management owns a significant interest in shares and rights > Incentive Programs = 5.9 mil. stock appreciation rights outstanding (at Dec 31, 2001): ? €1 share price change = €3.3 at share price of €16.37 to €19.56 €4.3 at share price above €19.56 = 1.11 mil. Stock
Slide 25: Successful Global Share Program
Successful Global Share Program Shareholder Structure by Region1 20002 20023 > North > Europe (excluding > Europe (excluding America Germany) > North Germany) America 15% 8% 14% 29% 26% 34% > Kuwait 45% 29% > Germany > Germany > Kuwait and others and others Continuous increase in North American shar
Slide 26: Generating Value
Generating Value Near-term Mid/Long-term > Reducing costs = Focus/Forward ü = Six Sigma ü = One Company ü > Increasing margins = Restructuring and Focus ü > Optimizing the = Selective divestment ü portfolio = Restructuring Chemical ü Intermediates > Developing promising = COC (Topas®) ü new technolo
Slide 27: IR Contacts
IR Contacts Europe United States Michael Oberste-Wilms Oliver Stratmann Andrea 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 S