Celanese Corporation · NYSE:CE
Celanese — Q1 2002 Earnings Presentation
23 slides from Celanese's earnings presentation, 2002
Slide 1: Outlook Brightens
Outlook Brightens Perry Premdas, Chief Financial Officer
Slide 2: Forward-Looking Statements
Forward-Looking Statements Any statements contained in this report that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as “anticipate”, "believe," "estimate," "intend," "may," "will," "expect," “plan” and "p
Slide 3: 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 4: Global Leader in Major Regions
Global Leader in Major Regions 2001 Sales - €5.1 bn By Destination = Europe = NAFTA = Asia = ROW > #1 or #2 global supplier in 70% of sales > Leading technology positions 3% 14% > 30 plants in 11 countries 37% > 11,800 employees > 5 R&D sites 46% > 70% of assets in NAFTA > Global share: NYSE (CZ), F
Slide 5: Leading Global Positions in Core Products
Leading Global Positions in Core Products Acetyl Products Technical Polymers Performance Products Ticona E Sales: €2,155 m Sales: €773 m Sales: €440 m X Products: Acetic acid, vinyl Products: Polyacetal, P acetate, polyvinyl alcohol polyester, UHMW-PE, liquid crystal polymers Business: Nutrinova foo
Slide 6: Financial Overview
Financial Overview in € millions Q1 2001 Q1 2002 chg. in % Q4 2001 Net sales 1,331 1,182 (11) 1,137 EBITDA excluding special charges 134 115 (14) 66 EBITDA excluding special charges margin 10.1% 9.7% 5.8% Special charges, net (1) 0 100 (530) Net earnings (loss) (1) 46 36 (22) (397) Earnings (loss) p
Slide 7: Business Environment in the First Quarter
Business Environment in the First Quarter > Demand increase driven by customer restocking and some underlying activity improvements > Chemical volumes rise in Asia and some gains in North America; European volumes flat > Ticona sales increase into North American automotive and consumer durable goods
Slide 8: Segment EBITDA
Segment EBITDA* EBITDA* in € million and % of sales 80 12.7% 70 Q1 2001 Q4 2001 Q1 2002 60 50 9.3% 40 14.0% 30 5.5% 13.9% 8.5% 12.2% 11.7% 18.8% 17.5% 20 4.3% 7.7% 12.5% 10 0.4% 0.0% 0 Acetyl Products Chemical Acetate Ticona Performance Intermediates Products Products Improvements versus trough at y
Slide 9: Sequential EBITDA Development
Sequential EBITDA* Development in € million 140 120 100 80 60 115 40 66 20 0 Q4 2001 Volume Price Variable Energy Spending Others Q1 2002 Costs Volume growth and cost reduction driving improvement *excluding special charges 9 1st Quarter 2002 US-Roadshow
Slide 10: Acetyl Products - Leading Market Position
Acetyl Products - Leading Market Position Acetic Acid Vinyl Acetate Monomer Polyvinyl Alcohol % market share % market share % market share 30 30 25 25 25 20 20 20 15 15 15 10 10 10 5 5 5 0 0 0 BP Amoco Celanese Millennium Celanese Dow Millennium Kuraray Celanese Nippon Synthetic Industry Capacity: 8
Slide 11: Acetyl Products - Global Leadership in an Integrated Chain
Acetyl Products - Global Leadership in an Integrated Chain Natural Gas Me OH CO Formaldehyde > Cost & Technology Leadership = World scale plants Butane (C4) Acetic Acid = Consolidation of sites Acetate Esters = Closure of high cost capacities (~570kT p.a.) C2 Acetic = Leading technologies / Low cost
Slide 12: Acetyl Products - Geared to Recovery
Acetyl Products - Geared to Recovery % Industry capacity utilization 90% 85% 80% 75% 0% 1996 1997 1998 1999 2000 2001 Acetic Acid Vinyl Acetate No significant capacity expansion plans announced 12 1st Quarter 2002 US-Roadshow Source. Celanese and Industry Data
Slide 13: Ticona - Growth and Innovation
Ticona - Growth and Innovation Est. regional annual growth by `05 NAFTA 7% Global ETP* demand 2001: 5.85 m t Europe 8% Asia 11% Other Asia Pacific Japan 5% 9% ROW 8% Europe TOTAL 8% China 34% 16% Ticona Investments Japan >GUR®: new plant in Texas, start-up 2002 12% >Vectra®: capacity expansion in No
Slide 14: Ticona - Core Market Trends
Ticona - Core Market Trends % change to previous year quarter 30 Automotive PI* NA Automotive PI* EU General Industries** PI* NA General Industries** PI* EU 20 10 0 -10 -20 2000 Q1/2001 Q2/2001 Q3/2001 Q4/2001 Q1/2002 Some improvements in North American demand; Europe remains on low levels * Product
Slide 15: Growth Through Innovation – Door Lock Housing for Daimler Chrysler C-Class
Growth Through Innovation – e.g. Door Lock Housing for Daimler Chrysler C-Class Flex finger integrated into the Challenge Celanex 2300 GV 1/30 housing > 1st electric driven door lock for DC passenger cars. > Crash resistance > Locking acoustics Ticona Products > Housing: Celanex 2300 GV1/30 > Cover:
Slide 16: Ticona - Major End Use Industries
Ticona - Major End Use Industries Sales by end use market 2001: €773 milion Consumer Appliances 6% 5% Others Industrial 5% Medical Industrial 12% Celcon /Hostaform Fortron Celanex Electro & Electronics 16% Automotive Medical 53% 3% Automotive Electro & Electronics All Products Vectra 16 1st Qua
Slide 17: Striving for Operational Excellence
Striving for Operational Excellence > 396 Black and Green > “Forward” Streamlined Six Sigma Belts active at the end Implementation Organization of Q1’02 >3% of employees EHS Excellence > Supply Chain > Maintenance Best > Advanced Process Excellence Practices Control Digitization Standardization Reap
Slide 18: Six Sigma Applied: A Project Example
Six Sigma Applied: A Project Example Solvent Production/ Liquid Phase Oxidation (LPO) Objective: Increase yield in solvent production > Result: = €2.4 million p.a. additional revenue generation in sold-out product = Project implemented in ~8 months = Capital invested: € 42,000 > Lessons: = Tribal kn
Slide 19: Actions Yielding Results
Actions Yielding Results “Focus“ and “Forward“ Initiatives > Closure of eight high cost facilities > Reduction of around 1,600 positions (~12%) > €322 million special charges (€124 million non-cash) in 2001 2001 Impact > €306 million working capital reduction at year-end > €231 million capital expen
Slide 20: Optimizing the Portfolio
Optimizing the Portfolio > Letter of intent on the merger of European oxo chemicals business with Degussa AG‘s signed in March 2002 > Agreement with Hatco Corporation, Fords, NJ to establish a European joint venture to produce neopolyol esters signed in February 2002 Creating platforms for expansion
Slide 21: Ownership in Performance
Ownership in Performance > Senior management owns a significant interest in shares and rights > Incentive Programs = Current - Share Appreciation Rights: ? €1 share price change = €4.5 mil in EBITDA variance = Going Forward - Stock Options ? Conditional capital increase (1.25 mil. shares / 2.2% dilu
Slide 22: 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 23: Outlook for 2002
Outlook for 2002 > FY 2002 EBITDA* to approximate FY 2001 level of €420 million > Capital expenditures at approximately FY 2001 level > Trade Working capital under tight control > Year end net financial debt at about €1 billion Economic improvement and cost savings driving performance * excluding sp