Celanese Corporation Q2 FY2025 earnings call

• Scott Richardson noted order books began weakening in June and continued into July, with key areas being China automotive, European Engineered Materials, and Western Hemisphere Acetyl Chain. • Plans to reach $2 per share quarterly EPS through two main buckets: cost structure items and executing differentiated business models. • Chuck Kyrish discussed inventory reduction efforts in Engineered Materials as a multiyear journey, including warehouse consolidation, SKU rationalization, etc., with a $25 million sequential negative impact in Q3 due to demand trends. • Pivoting to downstream products in the Acetyl Chain, such as emulsions and redispersible powders, to find additional value.

Engineered Materials: Saw weakening demand, including China automotive orders pulling back, European demand softening compared to Q2, with Americas remaining relatively stable. Acetyl Chain: Experienced volume weakness in the Western Hemisphere towards the end of the second quarter and continuing into July.

• Q3 guide midpoint at $1.25, with $0.25 to $0.30 expected from inventory movement and no order pull-ins seen in Q2. • Next year, additional ~$0.10 per quarter of cost actions. • Aim to reach $2 per share EPS through 4 controllable areas: additional cost and footprints actions, high-impact programs in high-margin spaces, additional price opportunities in Engineered Materials, and pockets of opportunity in the Acetyl Chain.

• Demand uncertainty in various end markets leading to order book weakening. • Inventory destocking by customers impacting sales volumes. • Challenges in certain product segments like acetic acid in China and temporary weakness in medical demand (attributed to timing rather than structural issues).

Q: David Begleiter asked about order books beginning to weaken in June and July, and how to get to $2 per share quarterly EPS.

A: Scott Richardson said the $2 target is achievable via cost structure items and executing differentiated business models, with a path involving inventory movement, cost actions, and addressing 4 controllable areas to reach the $2 target.

Q: Ghansham Panjabi inquired about 2Q pressure points in the Acetyl Chain and their sequential evolution.

A: Scott Richardson stated no big change expected, with tow softness continuing and vinyls chain also weak, offset in acetyls by no turnaround.

Q: Jeffrey Zekauskas asked about tariffs in China affecting the tow business and acetic acid sales in China.

A: No tariff impact on tow business via joint venture, and above breakeven in acetic acid, with pivoting to downstream products.