Celanese Corporation Q4 FY2025 earnings call

• Focus on cash generation first, with the team having prioritized it well in 2025 and being poised for recovery in 2026 and beyond. - The Lanakan plant closure is expected to drive enhanced cost benefit of about $20,000,000 to $25,000,000 on a full - year basis, with about $5,000,000 to $10,000,000 this year. - In Engineered Materials, electronics is a bright spot globally with growth from AI and data centers, auto is mixed with some uncertainty in China and stability in Europe and US, and there's focus on innovation and partnering with customers. - The divestiture target of $1,000,000,000 by 2027 is about halfway there, with a focus on parts of the business not fitting core operating models, and a robust slate of deals being worked. - The mantra 'Act Now Win Together' continues, with a focus on growth in Engineered Materials through pipeline models and innovation.

In 2025, for the Acetyl Chain, adjusted EBIT was down about $400,000,000. This was largely driven by volume, price, and mix, with a significant chunk from the acetate tow business and margin compression from China and Western Hemisphere volume. For Engineered Materials, adjusted EBIT was down about $120,000,000, driven by volume, price, and offset by cost. Specific revenue contribution percentages were not mentioned in detail.

• Expectation of $1 to $2 of EPS uplift versus 2025, with Engineered Materials driving growth and cost reduction, and Acetyl Chain looking for supply - demand balance opportunities. - Free cash flow guidance of $650,000,000 to $750,000,000, with expectations of working capital reductions, tax impact, and cash interest changes. - Target of $1,000,000,000 divestiture by 2027, with confidence in achieving or exceeding it.

• Competition in the spot part of the business, especially with additional capacity in the market. - Macro - economic uncertainties that could impact business performance. - Overcapacity in certain markets like acetyls in China, which could affect margins.

Q: Now that the business has been stabilized, what are updated thoughts on potentially selling some equity to get ahead of balance sheet issue?

A: Focus continues to be on cash generation, with debt refinancing and cash generation from business and divestitures being strong, and feeling well - positioned.

Q: What are you seeing for pricing in your contracts for 2026?

A: Very little change in contracts pricing, more competition in the spot part of the business, and the Lanakan plant closure will drive cost benefit.

Q: Sequential improvement in Engineered Materials, which end markets are stabilizing?

A: Electronics is a bright spot globally, auto is mixed with uncertainty in China, stability in Europe, and US fleet mix being more certain.

Q: Halfway to $1,000,000,000 divestiture target, any ideas on timing and assets?

A: Feel good about getting deals done this year, focusing on parts of the business not fitting core models, with a robust slate of deals being worked.

Q: Analysis of changes in Acetyl Chain and Engineered Materials in 2025?

A: Acetyl Chain driven by volume, price, mix, China margin compression; Engineered Materials by volume, price, and offset by cost.

Q: Base case for 2026 EBIT growth?

A: Engineered Materials has more controllable ways to grow, Acetyl Chain may be challenged, with key markets being electronics, automotive, etc.

Q: Expectations for higher than first half earnings and EPS uplift?

A: Team still focused on $1 to $2 EPS uplift, working on growth in Engineered Materials and Acetyl Chain, with free cash flow and various factors influencing.

Q: Working capital for 2026 and confidence in free cash flow?

A: Targeting $100,000,000 working capital reduction, with confidence in driving free cash flow into target range through various levers.

Q: EPS growth this year and items affecting?

A: Confident in generating free cash flow between $650 and $750, with various scenarios and factors influencing EPS.

Q: Capacity additions in nylon and POM chains?

A: Focus on building flexibility, buying polymer in over - capacitated Asia regions to be opportunistic.

Q: Working capital inventories, guardrails and product families?

A: Coordinated approach to avoid service issues, constant activity of reducing inventory, with EM driving efficiency.

Q: Acetate tow levers and improvement timeline?

A: Working on cost structure, future contracts, with stabilization expected mid - year.

Q: Price increases in polymers and expectations?

A: Margins in polymers at unsustainable levels, team pushing to improve returns through dialogue with customers.

Q: Chinese acetyls pricing and rationalization?

A: Expecting stable pricing, not forecasting huge uplifts, with stabilization at relatively low levels.

Q: Second quarter POM turnaround impact?

A: Similar to $30,000,000 lift, with turnarounds being less frequent due to improved reliability.

Q: Free cash flow guidance under low demand?

A: Model out various scenarios, still confident in $650 to $750 free cash flow range.

Q: Divestiture comfort and potential higher number?

A: Aggressively pursuing divestitures, targeting $1,000,000,000 by 2027, theoretically could be higher.

Q: Western Hemisphere acetyl margins and capacity reduction?

A: Constantly evaluating options, pivoting to be more efficient and squeeze out cost.

Q: Areas that could get worse macro - side?

A: Not taking anything for granted, continuing to evaluate bold actions across portfolio, focusing on cash and cost.

Q: Volume rebound and restocking ahead of Lunar New Year?

A: Moderate seasonal improvement in Acetyl Chain's coatings space, Engineered Materials seeing order book come back.

Q: Divestiture process and timing?

A: Looking at a robust portfolio of options, feeling good about getting another deal done in 2026.

Q: Earnings in Engineered Materials and cost initiatives cadence?

A: Cost initiatives and new products are flowing through, with leverage on volume in the business.

Q: China SIGTOE dividend and consolidation in SigTow?

A: China SIGTOE dividend expected to be pretty flat to last year, and no substantial change in landscape for further consolidation in SigTow.

Q: Working capital management and earnings impact on free cash flow?

A: Working capital headwind, but confident in driving free cash flow into range through various levers.

Q: Cost benefit from Lanakan closure?

A: About $20,000,000 to $25,000,000 full - year cost benefit, with about $5,000,000 to $10,000,000 this year.