Celanese (CE) 26 Oct 202020 Q3 Earnings call transcript

Company Profile

Participants

Brandon Ayache	Senior Director, Investor Relations
Lori Ryerkerk	Chairman and Chief Executive Officer
Scott Richardson	Chief Financial Officer
John Roberts	UBS
Bob Koort	Goldman Sachs
Duffy Fischer	Barclays
Jeff Zekauskas	JPMorgan
Vincent Andrews	Morgan Stanley
Mike Sison	Wells Fargo
Hassan Ahmed	Alembic Global
P.J. Juvekar	Citi
Matthew DeYoe	Bank of America Merrill Lynch
David Begleiter	Deutsche Bank
Ghansham Panjabi	Robert W. Baird
Kevin McCarthy	Vertical Research Partners
Arun Viswanathan	RBC Capital Markets
Alex Yefremov	KeyBanc Capital Markets
Laurence Alexander	Jefferies
Bhavesh Lodaya	BMO Capital Markets
Frank Mitsch	Fermium Research
Matthew Blair	Tudor, Pickering, Holt & Co

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings and welcome to Celanese Corporation Third Quarter 2020 Call and Webcast. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Brandon Ayache, Senior Director Investor Relations. you. Thank

begin. may You

Brandon Ayache

call Welcome call. Celanese Ayache, its Executive and distributed posted our about quarter My Relations. on of Doug. quarter and prepared the Chairman XXXX Celanese Senior third Chief earnings Chief Investor the Investor Officer. today via me conference on name With Lori to you, Ryerkerk, Corporation of yesterday and the comments quarter Director are Officer; Board earnings Thank is afternoon. Relations Richardson, release Scott Financial Corporation third Wire website Business the Brandon

a financial As reminder, today. we non-GAAP will measures discuss

You language measures can well of on regarding can be forward-looking as Please the also measures GAAP Today's reconciliations website. statements. well will statements of as presentation which as find release definitions at the press our include as found comparable cautionary to end comments. the the prepared forward-looking these review

have Because the comments submitted now questions. X-K questions. these been directly for open go to reports Doug prepared our for also published your please SEC. materials ahead the yesterday, the have line and all containing line open Form we'll we

Operator

Our you. line question question. Thank gentlemen, time, Instructions] this will comes conducting proceed and a with [Operator session. from at be the UBS. Roberts of question-and-answer your John we Please Ladies first with

John. Roberts

down supply you. would when shut auto the chain in the have the that manufacturers have left a thought been lot and year. Thank in I earlier would of plastics inventory plants other

a on lagged issue. it recovery like coincident. seems Maybe could So, pretty I thought would little timing the of you've would have bit but customers, Celanese comment the that been have you

Lori Ryerkerk

Yes, thanks for question the John.

auto were in clear XXXX; is throughout a were to I the lot we saying of think as seeing us we destocking chain. what

first into in entirety the so XXXX estimation we auto is well certainly Western inventories that than much Hemisphere. was typical the our in went running of chain. the through as quarter still with we lower And in went And

any bit actually seen seen builds down really than we have buildup even were during seen the really demand and recover. we a not you've we've better or so And steady with time auto consistent

than a already So, I think through period the or what's past pretty of gone recessions fact this downturn XXXX. just we significant that different had destocking past is in maybe in time

John. Roberts

a And your granularity then materials? could you activate raw network causing more any about is rising differently? you in provide that little your comment And to

Lori Ryerkerk

Yes.

So, impact was raw the third ethylene quarter from pricing. in real rising material

supply noted an especially comments been there quarter some also being in our So, terms a we terms I of of really all the through haven't Engineered increases saw in the of saw EM. quarter acetyls. that in in activation. impact But see pass regions the world. from ethylene a chain really We did impact third to real our acetyl and entirety we the difference our chain as the the of not end seen had really quarter. you Materials. really it's say up CO really in at pricing our the in in throughout It It's long third wouldn't we methanol of --

quarter, some increases expect those in of pricing in be to able through weren't to quarter. in third but And we fourth mitigate pass to able would

John. Roberts

you. Thank

Operator

question. of with Sachs. the proceed question line from Please Bob next with Our Koort comes your Goldman

Bob Koort

you. Thank Good morning.

Lori Ryerkerk

Good morning.

Bob Koort

of as expect wins you some you Lori project could what just in might sense you we give EM. look not us talking discrete if I think long ago too I'm about a be actually How will versus bit stopped could it developing? into do Is you Could parity? lower? be project there it a chance applications see those better? XXXX of sort XXXX, be new it wondering

Lori Ryerkerk

Yes.

as But we that is about had lot try. the with we mean just with in projects. number to more would I wins were from are of a you have lot margin wins those stopped because something third project really that as not still we expected value. well wins quarter, we projects recognizing target on of well the we tell we And doesn't just the were expectations all created it necessarily So, a creating talking equal.

we thing. So, XXXX actually into and to a for working the by us managed expect and pipeline We've going sort project to see wins commercial webinars of go virtually really to good as I like formats work new using continue our build in that the lot of up. teams some number do

few of we've recently. as a And value go projects number to COVID mean as up of maybe significantly. so of I the actually continue during continuing wins had build pretty we're seeing well more examples projects just the to and

had also as result really over had all some on across just but of region. webinars we've series one of tablets have lot We electric into for COVID, so and done electronics which headphones. vehicle as we've EVs one a of manufacturers during recently of the our contract XXX a batteries. booming, webinars big one the goes had smartphones we good of that So, being the also placements a leading a And attended result and are into work customers LCT did which not

us year. teed our folks had growth, this great be applied margins. into with So unique meaningful areas for And it technologies feels our doing those are the job some -- a continuing for up of continuing have next good XXXX to commercial wins those going areas at of can very year and find find to we where really we've

Bob Koort

Scott then still spend M&A and was your to year? I proceeds Or ways, a start ask so pretty next doing of have -- the do share function And the good that started can somewhat is in. to repurchase that you And can murky list a came before it Was you a world a expecting it just you on environment? money short buying? of time heal of

Lori Ryerkerk

Yes.

sight. So start in prior share was obviously did yes, see to I think the close repurchases the because terms of close in we could we actual

ahead longer period to a over them in time. start and go of wanted we and spread and share market out the repurchases get So those

result that been financial at in a we're of As really looking M&A. We've active shape. clearly good quite

together management since had team On of the positive now side, we've our June. most

able can assets. bolt-on people larger from better see The to more more do our sights list get are been M&A a have those well-defined market to improving. we broader say standpoint So look in M&A on stock to we've their value feeling People not would but do a a better M&A about as short well are starting standpoint. We I a targets. a discussions transformational that we're use guess really pretty I serious. for things as the at of from get that list reset both prices interested getting

discussions know takes but all we ongoing, are some the as So time. this

think yes I XXXX able So anything. to be into before it's probably we'd well action

Bob Koort

Great, much. thanks very

Lori Ryerkerk

Okay.

Operator

Duffy of next Barclays. question. with comes Fischer Our with from question your the Please proceed line

Duffy Fischer

Yes, morning. good

is question of going around think that just the about when we into First level XXXX. kind business of today and

QX, world it what to be guys? at doesn't to would from for flat that here your feel XX% into gauge would that was this same this in out? and Does about get world today year the down the about activity you if level did better in year-over-year; QX as economic So was economic that you EBITDA quarter XX%. QX model XXXX should down and the use about we start level how Or of next

Lori Ryerkerk

Yes.

the But in we just see still actually So materials. fourth pricing being let kind up do of on me fourth our If December volumes at that base expect quarter start. quarter, we seasonality. and we look

but some at So in slowdown we a states margin and usually as we happening China we take demand acetyls, If in mix in in the look see in by pickup today. time industry And see as western see Engineered slightly drop-off Materials, is the acetyls northern so some holidays. see typically over replaced volume to maybe much more seasonality a of Western we emulsions is snow of not Hemisphere VAM effect we and for Asia, construction but lower a and due a in weather. off margin. in happening volume a and powders the typically usually That of drop companies

increased growing and you expect in but volume still we a pricing. seasonality So on if will some base of QX,

we have of COVID. XXXX, right with look uncertainty a we As to look lot now

Our so of we time the to level see reason And we the expectation of given The guidance XXXX. will XXXX, COVID XXXX growth and looks exactly what is all XXXX, the uncertainties don't out some to know is, in did recovery we call continue provided that. kind that in like. it's continued we around recovery today, hard back that to world

add earnings. will called our that know we today's over actions why $X.XX we that's So EPS the controllable things out

that adds demand if took growth top put volume much Maybe you pretty the of assume I'd $X of and earnings it for another at year. levels of expect that So $X.XX persist you expected we'd to if say QX for XXXX next growth. floor of that's all price would what perspective, XXXX on in kind your for

just expecting COVID for outlook around what see a on are really out U.S. a definitive in XXXX. we Europe just put So we going more now, But that it the uncertainties in as might XXXX. we happen again, haven't positive right

Duffy Fischer

else could of very And helpful there that dollar forward? does three should also losing That's go about Polyplastic comment. when over No. line taking quarters? on next think anything that you discrete out what Polyplastic then as is the And anniversary we we that XXXX like out we

Lori Ryerkerk

Yes.

fourth quarter comes quarter. it million in the Polyplastics a think things, now discrete call I roughly $XX the starting out

think I out really So taken things be called the we the are place. then discrete And in that needs earnings. what to into

another of $X.XX in next we So and and is half $X.XX repurchases then being next half turnaround we other Polyplastics year; share year by for that $X.XX XXXX plan the for productivity for for kind offset lower into productivity to being net share the in for repurchases that XXXX. repurchases of do into did for -- certain; expense

Duffy Fischer

guys. Great. Thank you,

Lori Ryerkerk

Thank you.

Operator

Our your next with Zekauskas Please question with question. Jeff the line JPMorgan. proceed of comes from

Jeff Zekauskas

much. very Thanks

basis, benefit revaluation you Can think think I an EBITDA it quarter. fourth they on your talk at be will million. year? will the the $XX activities than of least of trends what's other whether terms and whether was about larger a million behind in quarter last operating pension in EBITDA $XX about continue about maybe was year-to-date those it I is And in

Scott Richardson

Yes, is benefit million Jeff. chunk between year-over-year. pension income of that and The million activities neighborhood is year-over-year of biggest $XX $XX other the which of in the component

largest that's the So benefit.

kind in than a just a payments. about of this point higher QX finish the We'll some uptick And year. You the of is particularly quarter-to-quarter in have compensation third part hitting of low come has we think of being little bit by of of it driven timing little see when here some slightly QX was timing stuff of as from movement through. down an the quarter and the out year, seen largely and up other benefits bit

and expenses end, will year, we QX that underlying the by in a So forward to I markets. offset lot as likely uptick next into adjustment. slight the happens with going upon look pension mean, we depend more than a expect is in what be

now hold offset by income pension they We we'll increases. slight where which expect said rates some if probably benefit things year, next stay relatively be right low. have And interest will in I are a expense as to then some or income

Jeff Zekauskas

share this that doesn't true? That Okay. regardless that year to terms of year. million to And at I $XXX XXX, you're it then you're it's Celanese the a it guess you've your of is fair? spend amount like next it allocated going whether execute Is Is repurchase, the matter for XXX in and or going sounds similar price.

Lori Ryerkerk

I think fair. Well, it's yes,

remaining -- have I this we our remain think this Polyplastics the million or have year what is that sale. really $XXX on to we accretive year

CapEx that remain will may the I really and fairly is million And market for go generally payments. comment to we the balance allocated of like million dividend next into year, And year. we a would following, steady Scott but next following we changing basis for $XXX cash say of want the really to continue. we've see So don't flow year further, that on next regardless to in as the $XXX price

Scott Richardson

the repurchases Yes, Jeff, consistency has over been comes to it operated year. exactly when how we've

plan And as market. into we but with QX kind set well have been of what levels have time-to-time, we do like we outlined. we as a year here in that those to that based remain in opportunistic level that's from next the on We -- to

Jeff Zekauskas

Okay. Great. so much. Thank you

Lori Ryerkerk

Thanks, Jeff.

Operator

Vincent of your line Stanley. the proceed Please with from comes question Morgan next with Andrews question. Our

Vincent Andrews

you. Thank

do back it's those On of XQ mix is to a and and question I disruption. in wanted of procedures. the But it would deferral obviously I mean big are going surgery kind in I get a like of folks not have destocking. the might this cadence demand sounds just of Engineered Materials, and the it elective happen guessed XQ a destruction a when it caused just comments understand more versus to

that once what customers something done? is taking going are this you your a just bridge get in hips they're that have to advance or far those maybe how and with rebuild people have do to that their there's back out vaccine their you or so then the And need just knees can inventory now? And

Lori Ryerkerk

really Yes. would we & mean elective think up. Great question, no saw that back in What procedures happening was that read happening. I Johnson were anybody's I elective release you or if in Vincent. XQ And just surgery XQ. no Johnson

So primary in at elective is which March this with U.S. the there in into. sitting shutdown inventories quarter had second the basically of everybody was sudden surgeries the all goes they the market across

using from also quarter inventory elective shelf are customers in seen And starting so had the people they've we on sitting hearing that we're rehappen. are surgeries that is third to what see Look it's But our They a to long available. before a have we know to it's fast we inventory comes how all long so reorder. this starting supply have it not carry waiting back not chain.

are again in quarter. to some uptick slight We fourth starting see

and So volume expect back we fully XXXX. to across come XXXX this

the getting this. it's older are again, I open. not just But hospital these think patients being generally

it's they comfortable feel people to or comfortable, procedures. these being hospital a go because people because to the also either have back control the under there's is virus So to vaccine, again that feel

Vincent Andrews

at specifically the lower And up each follow are if some in Maybe and and region? rates I was some about staffed just recall, in operating then, Europe down meet maybe you As there acetyl, operating fully facilities in I Asia. improved manufacturing demand. asset an in what could more to on comments utilizations

on a helpful. So, just maybe check-in are where be those would

Lori Ryerkerk

Yes.

I acetyls, up We in all facilities in for moment. say a Singapore. we're in that Lake. downtime running. Clear turnaround We short do are mean, back our the would had I short of at So a Actually have and

running. small everything really, is So, that up a number of maintenance were planned numbers. and downtimes But into the

full of And running the as meet meet running to for All certainly our well. back much pretty derivatives say, staff at I XXX% to we're would things are force. is acid, at demand demand. in

and the we runs for demand months, much to fully have the is fully last seen ready So staffed, full. are actually there several go pretty

out, for are we volumes pointed at slightly already just we in under As I mean, XXXX acetyls, point time. this

Vincent Andrews

much. so you Thank good. Very Okay.

Operator

proceed Mike question. Wells comes Sison Fargo. Our next line from the of question your with Please with

Mike Sison

about assume focus quarter. $XXX seeing that, Nice dollar? afternoon. range Good Hey. stay think and sort Chain sort that upside Acetyl to dollar would for Lori, of that optionality the XXXX when trends that does the you emulsion and that the for you're powders downstream at now of in pricing

Lori Ryerkerk

Yes.

sorry, that So expect would -- an really as was I the sorting out Mark we as that example Mike, see. to just range

we of the that this third year, multiples ways the that being mid mean, at I in So, mark best asset closer would many of $XXX quarter. get up prices quarter quarter per $XXX we to as in say the China. Today, saw from seeing year kind kind we get to I ton an to if continued would XXXX, you the look our though, There next of there. third are were in up are we uptick dollar.

an So clearly upside in that's acetyls.

recovery, utilization I there we're is see to already see some January. in that's which derivatives in said, XXXX acetyls. Again, we're come December, some starting we really, we close now. price expect expected we think As would do in that enough when tight see back start getting in story to The but get volumes seasonality to we

Scott Richardson

just think to Yes, Mike, add. I

contribution as think really we about margin. that I important think really what's is

raw move may materials up so we And pricing move up. as see

the hold, or fundamental these And last months. seen two our a we've hold really raws look were to lot contribution we increase that prices three so if here over So of at margin.

in kind conditions and dollar -- were mentioned the see. quarter third seeing what the continue you of current you'd here to So Lori the is quarter in level as the we're fourth that

Mike Sison

remarks the -- in do some growth. to for you think invest to of talk I next or to going organic drive of you're about then, areas maybe to million that prepared about Can couple years? for you the used in growth $XXX be And Understood. your so talked some

Lori Ryerkerk

Yes.

predicting $XXX number, should $XXX to that north of million growth and still we're CapEx of million. We're we $XXX but It million. around level support maintenance, which million be well $XXX for well finalizing million organic have to I of we there feel as So year. is comfortable at next $XXX as run our to maintain in typically

that the number XXXX. some our facilities around the restart We've It VAE the announced Bishop GUR. VAM expansion globe. the of at at seems Clear happens in acetic So, of previously and That included like Lake. acid end is in the expansion

So that as in built there well. number is

a So just already you've heard year. really capital hitting about, lot that of start next seeing heavier but things them

Scott Richardson

reduction teams hard are Mike. Yes. as our on And well capital pushing cost

projects so, as earlier And we're working year. this accelerate to we about talked

And for so in is capital embedded we in prepared some of that the the that productivity out called needed remarks. gains number

Mike Sison

you. Thank Great.

Operator

line from your next Hassan Our with from comes Alembic Please the Ahmed with proceed question Global. question.

Hassan Ahmed

afternoon, Good Lori.

some recurring, or I'm which So get $X, XXXX. rate about of of to another call And I north quarter. the guide. of I a you sense run the it then EPS look is the understand, was midpoint as think guys sort thinks better of of had XXXX with QX about, the a Sorry seasonality at I come QX obviously one that, trying slightly sort but right? you EPS as guidance $X.XX. of one-offs But right north said up take turnarounds just stands question well as you a guys, the strongest now to about as bore know number the

already $X another you of worth it have worth productivity $X.XX one barring mean of north and is then of those buybacks. $X.XX seems I So one-offs,

XXXX. hit in much I $X levels, one improvement thinking QX about could without way? right it So maybe this the Am from seems

Lori Ryerkerk

Yes I right. think that's

to If slightly look $X. are, we we $X year you at the where or in guided above somewhere

the then level on more. then add bit maybe do that the little comments some based of that it QX $X.XX, get gets a you to you actions QX on specific And $X on a the what is out that called of next north as bit can why controllable plus to resurgence you year, recovery. were seeing year. against, the caveat haven't our market consider That's of not $X going to If quickly you in $X.XX in level if big yourself outlined for or of and knowing recovery we if COVID Again, next year. that to is just we a and into that's

Hassan Ahmed

Of course, sequential follow-up, million of you sense. out course. And a hit Sina. $X pointed Makes from Ibn complete a as

I if in lag to Now, Sina. felt do be that there between prices recall Ibn oil your correctly, in impact quarter's tends being the what results of a and

So that is of Ibn it fair to somewhat could Sina a tailwind QX? be come assume

Lori Ryerkerk

Yes.

lag. quarter a is Sina Ibn So

So this look million very at $X That's if low hit we additional QX. prices methanol you quarter were the Ibn levels from Sina. sequential they in saw

recovering, $X Now fourth that expect recover from would Sina with prices million to Ibn we in quarter. methanol

Hassan Ahmed

Got it.

Scott Richardson

through see But that out on flow million it from comes because will equity $XX by earnings line Hassan the you the so it won't or roughly offset be Polyplastics.

down just QX at two those we look QX. to $X So million together

Hassan Ahmed

much, guys. Absolutely. Thanks so

Operator

of P.J. your proceed Citi. next the question. Our question from line Juvekar Please with comes with

P.J. Juvekar

Yes. Hi, good afternoon.

Lori Ryerkerk

P.J. Hi,

P.J. Juvekar

question A BlueRidge Cellulosic your about plastic.

polyethylene it? Do PET that replace think premium PE? market? with can And big cellulosics? over a you let's biodegradable much that's you et price charge for How how you or do And takeout, is cetera. I say how plastic food

Lori Ryerkerk

Yes.

is point. That's also know been are more give try It the a a there the and customers We at The who more out the went to So, are point PE. a The sustainable are announcement. made made of made for to it really who really agreements But be to a the than price could what what hasn't solution why more way. to get out demand for material it need need few on that's out. point what market this trials. now for announcement process let But for sensitive this why is this today. costly this to huge. need really through factor in biodegradable had purchase people that's -- find in the market we're marketing really customers. We ahead less are that and But chance replacement the are out product going is the to frankly we traditional reason PE is we customers. them We've of that time out material me we price there material we getting who products. we looking small describe to the accessible we

P.J. Juvekar

acetyls lower you. are And rising prices concerned bring can as are in hedging associated And gas you gas about, of natural part secondly, your maybe you the natural you production? here. U.S., Scott exposed your you Thank production are more comment purchases? of Thank you then to more natural gas because Okay. gas prices you. any And of about

Lori Ryerkerk

Yes.

fact where choose material acid sell gas slightly expect we don't we on our the But we further to network. production we have rising derivatives, our have prices of does look less The are So impact make where global value is our which the It raw levels, can that potential to business. it, the into material flex this can compress acetic to natural a really sensitive. down margins. flex to can

expecting not are in from quarter. material fourth impact the this really we So any

Scott Richardson

Yes time long say I in term time nothing to nature you P.J., we but positions do will. take from would that if some is short-term

P.J. Juvekar

Okay. Thank you.

Operator

with America question your of from question. Our Matthew line comes the Bank Lynch. proceed next with Merrill Please of DeYoe

Matthew DeYoe

Hi.

and case and restrictions this the pace at of just given in have COVID CE around business? all? So a implementation customers perhaps slowed isn't innovation EVs, staffing at but R&D the you would at I has pace new of may the labs, in just the slowdown or think

Lori Ryerkerk

COVID. and say hold as question, when a all I look, COVID thing a the I anything see able ourselves we things of Again an included office we've people was innovation to if had so facility, thought I do for period went long-term pick lot have and of say, not in would time. our mean world up. we a put most of I So on now one into just to would first and of the customers it pace are great adjusted this short our think new Matt. impact for customers. of folks And things back so our certainly of were been

our we back them comfortable and with getting more more coming also customers see see doing remotely. also We

again, So, answer win. my are going to back previous we projects seeing still on wins

We are focused we innovation a at that few wins that's we vehicles project on us seeing really as about and high-value recovery of helping and that see year the and helpful pipeline that considered now solution. COVID Materials strong around end and electric sustainable move emerging winning we into and the trends we those pipeline through And keeping in focus excited for emerge sectors. areas of and continuing to pharma is on very really XG Engineered medical innovation and next and really was that feel for what wins the XXXX, gone our into that. It strategy us we as

Matthew DeYoe

an is Okay. it look color to if And you is provide long out And capacity? bit to what to EV EBITDA little maybe most on take new would the batteries too, you of going light of contribution GUR going the Because that what can like? same maybe expansion this a there? how fill more

Lori Ryerkerk

Yes.

be the rate that year starts. current electric expansion Bishop XXXX. frankly about our growth in supplying for in should of a And XX that expansion will at quite the kt sold be out really It electric we early is XX% So, the global vehicles. the it day online vehicles announced network

Operator

with Our with Begleiter comes next your the of proceed from question line question. Please Deutsche Bank. David

David Begleiter

Are year standpoint? we be Lori you. bridge tailwinds Thank of on XXXX, for about you year. headwinds for a thinking next any a just should next highlighted there from number

Lori Ryerkerk

David. haven't really out happen of to reemergence things why us does for and not a no -- specific and draws projections something volume terms into inventory those that's headwind is economy any low-demand of the growth. year price we for forward But called COVID I because in of to in XXXX intentionally us we changes No, mean take the a terms advantage all of environment. facility this of lot pulled of the

see going So, into don't really year. we next major headwinds any

David Begleiter

EV-related today on where you do be just your three And in years? sales are EV, And think content? to for five where can Lori they

Lori Ryerkerk

think we expect mean I applications. besides electric -- have I electric battery I applications the say has I of the the pretty we certainly of which those number. market fastest exact five EV. EV would player a David, separators vehicles growing lithium-ion other grow don't an the years. And significant per is about next are vehicles for year to at in for XX% GUR

Scott Richardson

content a EV we Yes, vehicle if tough a question lot it's because if there's of David it ICE where vehicle it's applications an a or have on an that matter doesn't vehicle. it's

revenue If it's us that today. single-digits out. we hard of EM's EV-specific it's partial look for sometimes applications, So, at to low very percentage of the

David Begleiter

Thank you very much.

Operator

Robert Please the question. W. proceed your from comes question of line with with Panjabi Baird. Ghansham next Our

Ghansham Panjabi

Yes, Hi, thank afternoon everybody. you. good

Lori Ryerkerk

Ghansham. Hi

Ghansham Panjabi

incremental quarter? be cycled a exit Hey for you what was as us run fourth Lori real I from rates specifically? into this but given customers hearing of Engineered is you for baking the to also in to segment sense Materials time quarter the at you What what are the lockdowns are point? able this in fourth give sort realize volume as And would you the the Europe

Lori Ryerkerk

for about would customers to from Overall from going about you price talk and it mean EM this. company. for before book our have probably growth. we But hearing if specified for seasonality our I quarter say impacts what third we're at That's And look I easiest I between quarter. just fourth that's to way order and -- not sure AC. the though probably XX% growth expect XX% volume the the we of really I'm expect

view EM much at margin with look is the level showing over showing November October that get kind again December. is you as that -- don't improvement it's still QX modest we average have impact that. pretty of of on If QX. some but December in But same some yet, modest consistent growth. we is of volume

this with really say we indications far have wave of associated U.S. I so destruction in either second in not And or Europe any seen would of COVID the demand

Ghansham Panjabi

I function great. versus of the calling midpoint And number and basis lower improves much. up, year-over-year Thank million savings is you in call think considering? XXXX This then mean out there year EPS so drop just reversal. XXX cost at the I terms not productivity, Is something productivity $XX Okay, materially CapEx that net year else of as you in on the trend a then a or of this in of XXXX, million XXXX your you're plus. $X.XX line is it the temporary ramp we're $XX

Lori Ryerkerk

I have look look year. had to was think you an exceptional I mean Well, -- headwinds. exceptional We XXXX

this into organization which We will to year. to gross that get year of up get to productivity. we went we million about $XXX bumped the that planning this $XXX So million challenge

also $XX of another had costs. onetime to $XX million million We

if you if productivity of targeting That's at we're you at look in the look we've comparison, next level to on if typical the XXXX. So don't million a few just gross at achieved years, actually basis. currently $XXX pretty -- year for you over least last

look expenses. on like a with there the that's things having onetime So we'll travel we this offset you million. you and of running savings out had it $XXX that a full our sorts have EPS sure to -- put It's the lower not facilities year that. those and cost achieve little of target quite when because looks we I'm little not that

ourselves see in as full. So come we will running we XXXX closer expect to costs those fully back

what But right pretty $XXX growth achieved number the is have most million consistent course, discounts with for little we baked million we'll And bit. we so $XXX but is push what more of actually we've And in years. now. that that EPS a

Scott Richardson

at we shutdown Yes in that's have number. an item as occurred plant of which as end that this don't large have XXXX. the of was we the kind a started did we into item big And XXXX tow XXXX year's we go that Ghansham

Ghansham Panjabi

you for Thank perfect. so much referring Okay, Scott.

Operator

Research of question Please proceed next from your Kevin Partners. McCarthy comes Our the with line with question. Vertical

Kevin McCarthy

afternoon. Yes, good

a as And the quarter. the proceeds to transaction the ASR the you in after-tax Now that first just matter, market via shares Polyplastics secondly And I part? intend repurchase then of or determined to be practical of an think if proceeds wondering repurchases? is open to whether what you've I mentioned you million $XXX the do fourth would that was use closed your you estimate

Lori Ryerkerk

Yes.

So Polyplastics, something $X.X than billion. the to after-tax be we proceeds expect greater for

-- We answer do that accretive. assure the rest are the did portion third we'll million do repurchasing a to Scott, deal that in quarter the fourth the questions. associated is of and We to in with may there's $XXX remainder want of you quarter.

Scott Richardson

million to on We our million has do we for as that's market next -- repurchases here outlined that Kevin well. in for our quarter, the Yes. to as year fourth $XXX open the as well been $XXX plan strategy and

Kevin McCarthy

just Like looked then so And flow there, to quarter. was mentioned number to of I as bit. said Scott used third brief it you used housekeeping speak flow $XXX million, free had you the declined Great. of that a little in like debt Okay. $XXX strong on million Can balance in for? apparently the net to amount question follow-up you a what It cash free you materials return a shareholders. you was the that just cash for a yesterday the

Scott Richardson

bit we little end needed did mix uses -- up We a cash Kevin just we for of cash. where built mainly geographic Yes. of

$XXX by QX on million cash increased from hand about to roughly So QX.

Kevin McCarthy

I you very circle back. Okay, Thank much. will

Operator

Capital your from question. with of Please Our next question the Arun line proceed comes Viswanathan RBC Markets. with

Arun Viswanathan

from in you maybe or segment? if each for own markets? your kind volume how in QX. just are run basis guess would rates rate an run XX% was different in AC much about I this curious normal ask a running certain of percentage understand Thanks I exit levels on taking help I could standpoint question. of could you on my a kind XX% way. Maybe us exit volume very Or In characterize your both EM and of you if

Lori Ryerkerk

I XXXX levels. it would we So our are characterize just X% acetyls below

would which I I pretty It's everywhere pretty full. Materials run mean is as not every Maybe running where it. acetic are running strategy. is Engineered are plant were we day. quarter. don't run full not within everything So we acid derivatives again. a XXXX every in full we we it our of characterize downstream we in XX% our in -- That's full this quarter we But how

facilities running down are POM, are to things like our the are with IPH starting down of say the full. for turnaround for So all would go turnaround of I that exception

Arun Viswanathan

then Okay. Thanks. in your adding in potentially and also some EM you any And optimization plan China? have do footprint capacity then AC updates Thanks. on in

Lori Ryerkerk

Yes.

for said So acetic Clear in acid expansion network the of optimization -- quarter as last our about talked that. we we've Lake and to do

other just prices parts produce it We and other make have delayed of the light oil attractive world. that continue to XX to what in in that months lower things of expansion

that So continues.

looking continuing half a rest ago, were capacity. plans capabilities with in where some which EM, as we're originally both from say to do in the in announced had another that our some have what going no there. our order then polymerization, were China, Due of developing and in we Nanjing, our bit China. and we a us. a to year our And and as a available changes facilities continue in are to actually technology at we where with expand we well is project other site little So, localization of to facilities Again, change land we to compounding of more

we've so locations. efficiency that being on actually of expand our take to of will advantage you the redesigned if existing to able And project,

continuing. So plans those are

with But continuing are that about and region. coming plans we more see pace see Asia demand continuing on the in consistent grow You'll up. to a China how those the

Arun Viswanathan

Excellent.

Operator

question. Capital from comes with Markets. your of Please Alex the Yefremov question proceed next KeyBanc Our line with

Alex Yefremov

afternoon, Good Yes. Thank you. everyone.

expected price led Could You've you your to announcement? this recently of also ,could tell over up discuss of announced us in XX%. a maybe realizations Materials you And what's what to quarters? next the Engineered increase couple

Lori Ryerkerk

I of last Aleksey, didn't question. hear part the your sorry, I'm

Alex Yefremov

any tightness to announcement? something Just discuss, led could in you what like you product Do that? or lines see this

Lori Ryerkerk

Thanks.

did as they price take yes things we all So, just I these the through. with while increase. mean, announce work to little a

increasing building front announced that you try of -- it, especially to also price we to ethylene, a into We materials, margin all raws to if have polymers. so didn't increase like and make So, but sure acetic raw with chemicals block go think those increasing in that compression. about acid with get out

what quarter. the we but on fourth through we on depending it move the increase, those that's else, expect price us work into to weeks It -- increases does everything do some goes price So months contracts, takes announcement. to depending or behind as flow the take through see

Alex Yefremov

were X% volumes Lori. doing you, year-over-year. Materials, are to also volumes prepared And Thank appliances It And down that seems automotive well. XX% year-over-year. down Engineered electronics were like also on your in you remarks said X%

to of minus a seems tied the This weight medical devices? primarily due in total to volumes. relative bit medical is your So the XX%,

Lori Ryerkerk

Yes.

So a I year-on-year. XX% would characterize less down that our than volumes were little

down If you end look from at -- basis to that is XX%. our industry still all an markets of XX% that was

And itself we're X%. help has XX%. little U.S. in doing has for Auto fact year-on-year flat. year-on-year I auto that to But So ,which as aligned we market. the little We well proven bit bit were EV. XX% would appliances said down and closer trucks year-on-year. platforms better, more the we're medical, as than the is down think bit currently a good are us. X%. to is pretty just little and down a closer about Germany, we closer X% Industrial be to a end we helped that say Again, been thereby than on like that seeing were is down as robust a Electronics which up was higher SUV actually to

third, fairly for appliance even remember have I So and auto a But that big on just say the impact biggest would X% down us. impact really two sectors, auto is so medical. the is

Alex Yefremov

sense. Thank Make you.

Operator

line question next Please Alexander proceed with Jefferies. comes Laurence of from with Our your the question.

Laurence Alexander

quick Hi. Two ones. Thanks.

by the project organic theme? of an priorities the we acetic could have existing First be sort production on a five project so greenfield? of it be by should that what should growth the a And zero-carbon facility? might a expect reshuffle to years growth it i.e. to is next XG new an we Or is evolution years bottoms-up so within you just driven in to platforms secondly, would five if every EM, next retrofit acetyls, growth the acid around on the mix? culture expect years? the three five to be replaced Or announced And

Lori Ryerkerk

the answer let because on last question, first, got think Yes. already sorry, -- because Great I've say question. the me question, your to would last forgotten I I've one. about first

the So think what not for a acetyl, zero-carbon technology. in next I would years, five expect I

big said, I always constantly looking I'm et to credits we think, the there have zero facilities, I ways Lake; bio-based it our sure yet. what That to customers which our projects, methanols, at mean, just cetera. energy contract of a the purchase are of a we've of gets be for carbon reduce footprint footprint. difficult That's not it's greener the Clear our like whether carbon through are through do. energy solar done to ways of existing project in purchase efficiency use demand.

I constantly track we're looking change customers. time, big unless footprint. ways again from point on at in So plant for we just this demand in a reduce to zero-carbon at a see our our carbon say not would we're

Scott Richardson

this mean to we on and evolving Yes. focused the programs, constantly able on is Materials question where the and model. this. I those with our innovation areas changing to working have Engineered Laurence to growth our be And customers about We're resources landscape. first your our work We adapt

vehicles XG and it's So recyclable electric sustainable things yes, like polymers. today

-- the really our where be go is we really and evaluating every next over something year continuing we're As focus to and it's should adapt.

five we So some talking different years will probably be yes, from about four, now three, things.

Lori Ryerkerk

though. I just that add would to

several bottoms-up. I of be getting right to the to development to by necessarily the think which overlay in than little choice. we process we this this themes different early is enough say found the for their did because come weren't supplier waiting all of We've customer is ago to added us, what was a customers years we

how it are and the what we So to forward. do us. in for as waiting bottoms-up not and has the we're future at going It someone sure there to to say make well come both us beginning has themes as to be the be the landscape emerging looking from

Laurence Alexander

All right. Thank you.

Lori Ryerkerk

bet. You

Operator

Capital Our question Bhavesh Lodaya of comes BMO from question. proceed next Please Markets. line the with with your

Bhavesh Lodaya

afternoon, good This Bhavesh John. Hi, for is Lori.

the And be to So was industry as we downtime. and acetyls, China. low see were at bit VAM to soft yet itself as acid in it pretty seems of running in terms pricing acetic a being surprised

And next then we supply the So are think the seeing surprised side about we of equation operating as how you are rates should about year? at we the high think now? right

Lori Ryerkerk

we fairly pricing. more flat expected actually And recovery out in fundamentals we the was we remember, we to in see called volume did expect in But which saw we our expected. said I earnings was didn't may you bit modest which think call better that's pricing. quarter, saw. in industry the Bhavesh, support And that the than this what fact we a we reason Yes. second

a we in So demand, in see by fall third. in increase a saw almost Q-on-Q XX% also increase but outages we an did China demand

came China as in to pretty And the supply a meet then see more basically didn't pricing increase why didn't we level. So that's that And was we and demand. result that on utilization think fact right XX% see pricing flat in why at increase. we'd

to prices That's are Now push as that Generally seeing material better starting come to recovery margin margins. quarter strong we're and slightly we're going and to just raw But good we utilization that third fourth the in especially move continue to of -- need towards the recovery end improve. see up. price we results a the quarter, into say going up. China to would prices in really I see

Bhavesh Lodaya

are. Got sales the on, it. in And how then a quick question terms of

acetyl that's it business in dynamic derivatives should we the and forward? certainly that of going how Because maintaining through the emulsions the think that And the of percentage seems some what being smoothening volatility business. powders? about like is So sold out

Lori Ryerkerk

our that sell, geographically produce where but to just in absolutely. as of we of so the always not And where Yes, to can, definitely control the where part and much and that's choice chain which as is to produce to sell. the also strategy have we chain

what's And VAM, constantly, we on we flexibility, at Elotex. acetic try our flex of our attractive. if look more you build derivatives. And we're XX% move downstream VAE, XX% that anywhere -- into depending more from to more to So bought to continuing acid we we

you same we in year $XXX if of to at look acid We China give I and and more good -- in that is, into really less flexibility that attractive. per chain you -- and that example into this into in these volume that can think margins the actually as moved and total the that end was redispersibles well if ton very in around sold mean China, XX%. This XX%. the that look move at the we quarter to of sorry, than third what was time other emulsions acetyl kind more chain which We that's of earnings things amount year I also because this the of from XXXX better to wasn't came regions world. of ability see derivatives sold share year had continue the of of us kind quarter, a last you things around. the of And do around XX% that

better have the derivatives. example model -- margins that think the where really shows geographically versus or whether to move to are just in I just the we that acid flexibility an it the So be

Bhavesh Lodaya

Okay. Thanks. Thanks your for time.

Operator

comes Mitsch of Frank with proceed Please question Research. next the from question. with line Fermium your Our

Frank Mitsch

that follow on operating afternoon could acetic high. just XX%, China. on reaching year [ph] in Good Brandon new not up role. I you. showed Thank I a levels your saw ACEs congrats something in that in acid and rates question rather just seen If over seems

China? we're to do operating restocking? and over in So I guess rates fully how that back we is are ready Or China declare think about XX% we

Lori Ryerkerk

to see be to have reported. fair. There's I'd Yes. different a the numbers of Frank lot data

that numbers seeing in the that of utilization return We on based are look kind we terms not at. of

Scott Richardson

I don't But no the we're third is quarter. back if to it it's know that was strong China. will. you I demand at in the has strong Dividend call certainly, ready doubt Frank, it if mean end of improved there's

be pretty as see November, China far the in the so do into good. acetyls order in And suggest the year of end books, that we things should

Frank Mitsch

cash Got most you. free $XXX million flow talking think Celanese Thank had I you. recently target, of plus. about a Scott, And been XXXX

what do free you're a strong lot short. for discussion I the about this million going higher $XX side? and to see guess, Following see expectations company? productivity on to recovery also you're Can of the How XXXX turnarounds, earnings talk cash about to flow million And flow about cash free you third XXXX from the you're very going quarter, CapEx. think been we but your are $XX higher has on

Scott Richardson

for with still in we'll will the completed. that think is Yes. good $XXX made million range even that be $XXX The be that million payments to year we tax this We some to transaction number. a relative

lot kind working year, forward we this So year. this we that's levels the we them a still will that inventory then end range we of as honestly need demand run into a is. where capital look as rate depend year. think be to Frank, But at as And will where good for next

pickup a So year. we next that capital shouldn't have occurs big working

be it we come feel from robust $XXX next to free out cash those so and and is be to pretty with to that year And going million cash for repurchases should call to of -- where comfortable $XXX flow. we expect million flow those

Frank Mitsch

Great. Thank you so much.

Brandon Ayache

Doug, we’ll make our the question. next question last

Operator

line question Matthew last Please & Tudor Our Holt question. the Blair with Co. of proceed Pickering comes from with your

Matthew Blair

plastics Do battery Lori, any hoping, really does the back just Thanks. sounds I it that I circle sector? the could And auto opportunities electric about? space. EVs to morning. I also in your side. opportunity should we was be of like the existing good does you have thinking your other growth Hey, business is the mean, help into -- vehicle

Lori Ryerkerk

the such in a and that's connectors. we needs see. the talk a player electrical us. of think great component separators about are for Yes. are -- for major so all battery But we mean, space. frankly No opportunity That's the which miles opportunity you a cabling, about that one because of literally EVs clearly polymer themselves there's easy to I in lithium-ion great

and the now fact squeaks that of how to the the sound that used covered don't about up want be EVs are, by and motor. things to the think quiet hear all You people

electric those application things you range accessible that tribology about. will to of light, great terms have wearing has lead than just things the The all between because it a to if conventional for space squeaks. spoke be and vehicle, can and So components have order for in of like needs good in polymer us I to just vehicle really amount minimize significantly that POM those more

there about well. actually electrical said, we placements range everything a I and vehicles components electric to in So and have lot hood for more as the more system of as any of interiors, the under from

a it of and see on as as We So said big since space XXXX. -- a see big one focused really the we've us. it been is continue opportunity for to end I

Matthew Blair

Thanks. Okay.

Operator

hand There's closing for further questions. I'd to no to remarks. like management call the back

Brandon Ayache

for like We'd everybody you. to listening Thank in thank today.

this As time. close might call questions usual, we're Doug, for call go available after the out ahead any further you have. the please and at

Operator

gentlemen, this does teleconference. and participation. Thank Ladies your for today's you conclude

You and time wonderful have lines a your day. this may at disconnect

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.