Celanese Corp Q4 FY2024 earnings call

• Executed over $75 million worth of cost actions outlined in Q3 earnings call. • Reduced 2025 capital plan to $300 to $350 million, a $100 million reduction from the previous year. • Added Todd Elliott to lead the Engineered Materials business. • Added Chris Kean and Scott Sutton to the board of directors. • Formed a finance and business review committee chaired by Scott Sutton and Scott Richardson to evaluate operating model performance, cash generation, and portfolio review.

No detailed segment financial performance with revenue contribution percentages provided in the transcript.

• Free cash flow below the EBITDA line expected to improve significantly year over year due to working capital being a source of cash, lower cash tax, and reduced CapEx by ~$100 million. • Focus on cost actions, margin expansion, and driving value creation through various initiatives like complexity reduction in Engineered Materials and reversing margin compression.

Q: Could you get some sense of potentially the size of divestitures and when they might occur?

A: Scott Richardson said divestitures are in the range of previous food ingredients transaction, some smaller, some slightly bigger.

Q: What are your thoughts on potentially raising equity to help delever the balance sheet?

A: Scott Richardson said equity is dilutive and not necessary given the strength of the debt market; Chuck Kyrish added they are taking actions to reduce leverage and are proactive in managing debt maturities.

Q: Can you help explain the thinking behind the Q2 outlook with only $20 million or so of improvement from volumes and SG&A?

A: Scott Richardson said some improvement is seen at the end of Q1, working on additional actions to lift Q2 number.

Q: How do you get to free cash flow being poor in 2025?

A: Scott Richardson said working capital was a use of cash last year, expect to be a source; cash tax lower; CapEx reduced ~$100 million.

Q: Role in bringing Scott Sutton to the board?

A: Scott Richardson said he's known Scott Sutton long, excited about his addition as he brings capabilities in accelerating cash generation, etc.

Q: Thoughts on M&M business long term?

A: Scott Richardson mentioned opportunities in high temp nylon for electric vehicles and elastomeric products for athletic apparel, but need to work on nylon portfolio and cost side.

Q: EBITDA outlook for second half vs first half?

A: Focus on decisive actions like complexity reduction, leveraging optionality model, and reversing margin compression.

Q: Evolution of strategy in Engineered Materials with new leadership?

A: Todd Elliott is bringing intensity on cost, customer segments, and accelerating in high growth segments.

Q: Channel inventory levels downstream to Engineered Materials?

A: Scott Richardson said working to match inventory with demand, value chain rebalancing expected to close in Q1.

Q: Earnings power of acetyl business and contract resets?

A: Scott Richardson said team working to offset contract resets by leveraging optionality model.

Q: Scope of assets to divest?

A: Scott Richardson said looking at assets not critical to core operating model, size in range of previous divestiture, including smaller and larger ones.

Q: Asset footprint and capacity optimization?

A: Scott Richardson said looking for efficient footprint, reduced 8 sites since M&M acquisition, continuing to optimize.

Q: Inventory reduction in EM and impact on EBITDA?

A: Scott Richardson said not substantial like Q4.

Q: Price expectations in EM for Q1 and Q2?

A: Scott Richardson said stabilization mostly, working on offsets.

Q: Running Celanese to maximize cash flow vs earnings?

A: Scott Richardson said focus on cash first due to debt, with actions like dividend reduction, capital reduction, etc.

Q: Acetyl capacity and utilization?

A: Scott Richardson said acetyl team pivots to maximize margin and EBITDA, matching customer needs.

Q: Guidance and EPS expectations?

A: Scott Richardson said doing everything to lift run rate through various actions.

Q: China JV rules and impact?

A: Scott Richardson said new rule requires audit before dividends paid, audit in first part of year, dividends to start.

Q: Cost savings and Clear Lake exposure?

A: Scott Richardson said achieved $250M synergies, still have more, focus on reversing margin compression for full value of actions.

Q: China vs other regions OEM opportunities?

A: Scott Richardson said big opportunity in China for electric vehicles, shorter commercialization time, technical exchanges with Chinese OEMs.