Celanese Corporation Q3 FY2025 earnings call

• Priorities for 2026 include increasing cash flow, intensifying cost improvements, and driving top-line growth from EM pipeline.
• Lowest cost assets are running at 100%, with the rest of the network flexed to meet demand.
• There are ongoing opportunities for EM pricing, especially with new pipeline products.
• Cost actions already in place will yield increments in 2026, and EM pipeline, including high-impact programs, is driving growth.
• Committed to $1 billion divestitures by the end of 2027, with the Micromax deal halfway there.
• Ongoing efforts in Engineered Materials to reduce inventory, including working on make-to-order vs make-to-stock SKUs.

Acetyls: Pricing in Europe was affected by weaker demand, with some softening; China saw pricing stabilization and a slight lift in early October; US remained relatively stable. Engineered Materials: Consolidated volumes were down 8%, primarily in engineered thermoplastics (POM, nylon, etc.) which have higher market exposure, while thermoplastic elastomers held up well and saw growth.

• Expect to grow EPS by $1 to $2 in 2026, driven by cost actions and EM pipeline.
• Free cash flow expected to be in the range of $700 million to $800 million in 2026, with sustainability in the long term.
• Committed to $1 billion divestitures by end of 2027, with Micromax deal advancing this goal.

• Demand volatility could impact pricing and volumes.
• Competitive landscape uncertainty may affect market share and pricing.
• Potential issues with asset utilization and excess capacity in the network.

Q: David Begleiter asks about 2026 earnings control and EM pricing.

A: Scott Richardson states priorities for 2026 include cash flow, cost improvements, and EM pipeline growth, expecting EPS growth of $1 to $2 in 2026, with EM pricing opportunities still present.

Q: Vincent Andrews inquires about operating rates in the acetyl chain.

A: Scott Richardson says lowest cost assets run at 100%, rest of network flexed to meet demand, with Singapore and Frankfurt block operated.

Q: Jeffrey Zekauskas asks about Engineered Materials volume declines.

A: Scott Richardson explains declines are mainly in engineered thermoplastics with higher volume exposure, while thermoplastic elastomers held up well.

Q: Michael Sison asks about 2026 EPS components.

A: Scott Richardson says about half of EPS growth is from cost, rest from pipeline; Chuck Kyrish mentions $30 million to $40 million reduction in interest expense.

Q: Patrick Cunningham asks about Lanaken closure and EM inventory.

A: Scott Richardson explains Lanaken closure yields savings, and ongoing efforts in Engineered Materials to reduce inventory.

Q: Kevin McCarthy asks about additional savings in Engineered Materials.

A: Scott Richardson says savings are net of inflation, from SG&A, R&D, footprint, and complexity reduction.

Q: Salvator Tiano asks about nylon chain and joint ventures.

A: Scott Richardson says almost all profit in nylon is from compounds, and focus is on value creation in joint ventures.

Q: Aleksey Yefremov asks about polymer capacity rationalization.

A: Scott Richardson says bold actions are taken across the board, including evaluating capacity for cost reduction.

Q: Frank Mitsch asks about divestitures and goodwill impairment.

A: Chuck Kyrish explains divestiture principles and goodwill impairment was driven by market cap reduction.

Q: Hassan Ahmed asks about near-term EPS guidance.

A: Scott Richardson says focused on reaching $2 quarterly EPS run rate via cost actions and pipeline.

Q: Josh Spector asks about acetyls utilization rates.

A: Scott Richardson says US assets run at high rates, with Western Hemisphere improvement benefiting bottom line.

Q: John Ezekiel Roberts asks about European acetate tow closure impacts.

A: Scott Richardson states no ripple effects across acetyls network.