Celanese Outlines 2020 Growth Strategy and Capital Deployment Plans at Investor Day
Tue, May 1 2018
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Expects adjusted earnings to increase to approximately
$11.00 per share by 2020 -
On track to generate approximately
$3.2 billion in free cash flow and plans to return approximately$2 billion to shareholders from 2018 to 2020 -
Projects adjusted EBIT of
$900 million or more each in Engineered Materials and the Acetyl Chain businesses by 2020; Acetate Tow expected to remain stable - Announced capital efficient capacity expansions in both Engineered Materials and the Acetyl Chain
“Over the past several years,
Rohr continued, “Today, through the deliberate actions we have taken to
expand our solutions-based capabilities in Engineered Materials (EM) and
the network-based operational flexibility of the Acetyl Chain (AC),
During the event,
Engineered Materials: Strong Growth Trajectory
Engineered Materials is expected to deliver an annualized adjusted EBIT
increase of about 15 percent from 2017 through 2020 with adjusted EBIT
reaching
Acetate Tow: Steady Performance and Optionality
Sutton will also provide an overview of stabilizing industry dynamics in
the acetate tow market. Ongoing productivity, innovation initiatives,
and higher dividends from Chinese affiliates in the Acetate Tow business
will lead to consistent earnings going forward, offsetting any further
declines in industry utilization.
Acetyl Chain: Fundamentals & Growth
The Acetyl Chain is expected to deliver an annual adjusted EBIT increase
of greater than 16 percent from 2017 through 2020 with adjusted EBIT
surpassing
Financial Strategy: The Power of Financial Stewardship
Value creation in EM and AC, reinforced by compelling shifts in market
conditions and trends, will drive double-digit adjusted earnings
expansion through 2020. Together, these contributions along with capital
deployment are expected to increase adjusted earnings to at least
The presentations will begin at
About
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Forward-Looking Statements
This release may contain "forward-looking statements," which include
information concerning the Company's plans, objectives, goals,
strategies, future revenues, synergies, performance, capital
expenditures, financing needs and other information that is not
historical information. All forward-looking statements are based upon
current expectations and beliefs and various assumptions. There can be
no assurance that the Company will realize these expectations or that
these beliefs will prove correct. There are a number of risks and
uncertainties that could cause actual results to differ materially from
the results expressed or implied in the forward-looking statements
contained in this release. These risks and uncertainties include, among
other things: changes in general economic, business, political and
regulatory conditions in the countries or regions in which we operate;
the length and depth of product and industry business cycles,
particularly in the automotive, electrical, textiles, electronics and
construction industries; changes in the price and availability of raw
materials, particularly changes in the demand for, supply of, and market
prices of ethylene, methanol, natural gas, wood pulp and fuel oil and
the prices for electricity and other energy sources; the ability to pass
increases in raw material prices on to customers or otherwise improve
margins through price increases; the ability to maintain plant
utilization rates and to implement planned capacity additions and
expansions; the ability to reduce or maintain current levels of
production costs and to improve productivity by implementing
technological improvements to existing plants; the ability to identify
desirable potential acquisition targets and to consummate acquisition or
investment transactions consistent with the Company's strategy;
increased price competition and the introduction of competing
products by other companies; market acceptance of our technology; the
ability to obtain governmental approvals and to construct facilities on
terms and schedules acceptable to the Company; changes in tariffs, tax
rates or legislation; changes in the degree of intellectual property and
other legal protection afforded to our products or technologies, or the
theft of such intellectual property; compliance and other costs and
potential disruption or interruption of production or operations due to
accidents, interruptions in sources of raw materials, cyber security
incidents, terrorism or political unrest or other unforeseen events or
delays in construction or operation of facilities, including as a result
of geopolitical conditions, the occurrence of acts of war or terrorist
incidents or as a result of weather or natural disasters; potential
liability for remedial actions and increased costs under existing or
future environmental regulations, including those relating to climate
change; potential liability resulting from pending or future litigation,
or from changes in the laws, regulations or policies of governments or
other governmental activities in the countries in which we operate;
changes in currency exchange rates and interest rates; our level of
indebtedness, which could diminish our ability to raise additional
capital to fund operations or limit our ability to react to changes in
the economy or the chemicals industry; and various other factors
discussed from time to time in the Company's filings with the
Non-GAAP Financial Measures
Presentation
This document presents the Company's four business segments, Engineered Materials, Acetate Tow, Industrial Specialties and Acetyl Intermediates, with one subtotal reflecting our core, the Acetyl Chain, which is based on similarities among customers, business models and technical processes. The Acetyl Chain includes the Company's Acetyl Intermediates segment and the Industrial Specialties segment.
Use of Non-US GAAP Financial Information
This release uses the following Non-US GAAP measures: adjusted EBIT,
adjusted EBIT margin, adjusted earnings per share and free cash flow.
These measures are not recognized in accordance with US GAAP and should
not be viewed as an alternative to US GAAP measures of performance or
liquidity. The most directly comparable financial measure presented in
accordance with US GAAP in our consolidated financial statements for
adjusted EBIT is net earnings (loss) attributable to
Definitions of Non-US GAAP Financial Measures
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Adjusted EBIT is a performance measure used by the Company and is
defined by the Company as net earnings (loss) attributable to
Celanese Corporation , plus (earnings) loss from discontinued operations, less interest income, plus interest expense, plus refinancing expense and taxes, and further adjusted for Certain Items (refer to Table 8 of our Non-US GAAP Financial Measures and Supplemental Information document). We do not provide reconciliations for adjusted EBIT on a forward-looking basis (including those contained in this document) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of Certain Items, such as mark-to-market pension gains and losses, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information. Adjusted EBIT margin is defined by the Company as adjusted EBIT divided by net sales. - Adjusted EBIT by core (i.e., the Acetyl Chain) may also be referred to by management as core income. Adjusted EBIT margin by core may also be referred to by management as core income margin. Adjusted EBIT by business segment may also be referred to by management as segment income. Adjusted EBIT margin by business segment may also be referred to by management as segment income margin.
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Adjusted earnings per share is a performance measure used by the
Company and is defined by the Company as earnings (loss) from
continuing operations attributable to
Celanese Corporation , adjusted for income tax (provision) benefit, Certain Items, and refinancing and related expenses, divided by the number of basic common shares and dilutive restricted stock units and stock options calculated using the treasury method. We do not provide reconciliations for adjusted earnings per share on a forward-looking basis (including those contained in this document) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of Certain Items, such as mark-to-market pension gains and losses, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information.
Note: The income tax expense (benefit) on Certain Items ("Non-GAAP adjustments") is determined using the applicable rates in the taxing jurisdictions in which the Non-GAAP adjustments occurred and includes both current and deferred income tax expense (benefit). The income tax rate used for adjusted earnings per share approximates the midpoint in a range of forecasted tax rates for the year. This range may include certain partial or full-year forecasted tax opportunities and related costs, where applicable, and specifically excludes changes in uncertain tax positions, discrete recognition of GAAP items on a quarterly basis, other pre-tax items adjusted out of our GAAP earnings for adjusted earnings per share purposes and changes in management's assessments regarding the ability to realize deferred tax assets for GAAP. In determining the adjusted earnings per share tax rate, we reflect the impact of foreign tax credits when utilized, or expected to be utilized, absent discrete events impacting the timing of foreign tax credit utilization. We analyze this rate quarterly and adjust it if there is a material change in the range of forecasted tax rates; an updated forecast would not necessarily result in a change to our tax rate used for adjusted earnings per share. The adjusted tax rate is an estimate and may differ from the actual tax rate used for GAAP reporting in any given reporting period. Table 3a of our Non-US GAAP Financial Measures and Supplemental Information document summarizes the reconciliation of our estimated GAAP effective tax rate to the adjusted tax rate. The estimated GAAP rate excludes discrete recognition of GAAP items due to our inability to forecast such items. As part of the year-end reconciliation, we will update the reconciliation of the GAAP effective tax rate to the adjusted tax rate for actual results.
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Free cash flow is a liquidity measure used by the Company and is
defined by the Company as cash flow from operations, less capital
expenditures on property, plant and equipment, and adjusted for
capital contributions from or distributions to Mitsui & Co., Ltd.
("Mitsui") related to our methanol joint venture,
Fairway Methanol LLC ("Fairway").
Reconciliation of Non-US GAAP Financial Measures
Refer to Exhibits 99.3A, 99.3B and 99.3C of the accompanying Form 8-K, and which are also available on the Investor Relations/Financial Information/Non-GAAP Financial Measures page of our website, www.celanese.com, for additional definitions and reconciliations of non-GAAP financial measures.
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Investor Relations:
surabhi.varshney@celanese.com
or
Media
Relations - Global:
william.jacobsen@celanese.com
or
Media
Relations Asia (
lan.zhang@celanese.com
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Relations Europe (
j.kurth@celanese.com
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