Celanese (CE) 8 Aug 232023 Q2 Earnings call transcript

Company Profile

Participants

Brandon Ayache	Vice President of Investor Relations
Lori Ryerkerk	Chairman of the Board & Chief Executive Officer
Scott Richardson	Chief Financial Officer
Ghansham Panjabi	Baird
Michael Leithead	Barclays
Jeff Zekauskas	JPMorgan
Josh Spector	UBS
Vincent Andrews	Morgan Stanley
Michael Sison	Wells Fargo
Hassan Ahmed	Alembic Global
Kevin McCarthy	Vertical Research Partners
Matthew DeYoe	Bank of America
Arun Viswanathan	RBC Capital Markets
David Begleiter	Deutsche Bank
Duffy Fischer	Goldman Sachs
John McNulty	BMO Capital Markets
John Roberts	Credit Suisse

Call transcript

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Operator

Greetings. Welcome to the Celanese Second Quarter 2023 Earnings Call and Webcast. [Operator Instructions] As a reminder this conference is being recorded. At this time I would like to hand the call over to Brandon Ayache Vice President of Investor Relations. Thank you.

begin. may You

Brandon Ayache

call Welcome Earnings Darren. Vice Celanese second and posted and Scott Chief on website Corporation on of Chairman Thank Call. Investor the to Celanese prepared Financial Richardson, via release yesterday Officer; My XXXX the quarter Relations today second comments me Conference Relations. Ayache, its Lori name earnings quarter Executive Ryerkerk, Investor afternoon. Business of Board you With Chief the are is President Officer. the distributed Wire and our Brandon

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

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

these all also reports of submitted X-K materials Form the to have SEC. containing been

comments directly go As we'll ahead our published go prepared and we yesterday, questions. to

the ahead and Darren, for line open please go up questions.

Operator

you. Thank

now Please be Baird. first line with Panjabi a Instructions] question. of Ghansham from Our session questions come [Operator with the will your proceed We question-and-answer conducting

Ghansham Panjabi

Hey, starting about of trends little your any bit see Good to context you about at the and all some more permeating Are prepared had comments of to in morning. color that in point chatter comments you us terms a et of evolving was give in could how first things signs that in I are business? through stimulus, of you Lori guys. off, the XQ. saw that your hoping, you some I China guess just cetera.

Lori Ryerkerk

depressed consistent the clearly, a we it's with as the When probably China, we've pronounced world Ghansham. China. more but been you, of in difficult year Thank at rest in China, demand seen look

here lower tighter. the the year, I saw some despite say signs second think to reason suggests July, a XQ, bit that inventory there's for is Chain the And some of it did for and capacity about we pretty outages the start saw now acetyls through And really outages, for which at when lot not for already price China. spare you we utilization early a if global is see in conditions, area. it's that look the we response in quarter that Acetyl we demand conditions or seem we around in China same what of in rapid asset – as moving in especially different see I spare unexpected those XX%

enough supply that price place suggests growing. can So supply us is that demand with matches although see there are to again, in we the we up recovered as see demand that a movement significantly, some hasn't we where

the I would about a say We hear response lot yet stimulus. seeing lot of we're not to it. a

is coming. strength response We China the are of And pockets China, it's we a I electronics, China. the Europe a limiting think the also in I production exports say and economy by consumer remains weakness some broader seen in lot goods, which in of But think in in situation area. But consumer goods haven't is well, of see core and Europe, on strong as electronics, the especially of particular, in which and we pockets Asia out autos yet. of there pretty China, would damper challenged putting

Ghansham Panjabi

you standpoint? other from some scenario an the we of keep sort XXXX, in of terms variances And current into levers And environment as that operating need internal Terrific. the the in to what XXXX XXXX this are managing you're of over Okay. mind supply, cetera. et the in complexity to of that it earnings offsets the that it's Thanks Lori. pulling for terms should spills complex. obviously, relates In then very versus

Lori Ryerkerk

into XXXX good think I visibility a We really point. Ghansham, this have no it's time. at

is But demand uplift be to are don't and give what to know. So XXXX. going give than us we a that going guess, better it's like in us don't to but I will really are in uplift there do we an I'd XXXX, XXXX. confident look know will know had few say If we we we know things an

So XXXX. if the our flushed as you of amount to materials with we're lower give which down costs side, with we start us cost the will able we XXXX, have doing will inventory into completely inventory this year, variable move engineering in through draw be higher

P&L XXXX. We'll don't We'll from our reductions. those see into see anticipate XXXX. We the inventory lot those continuing less hits in a to of

will uplift. that be So an

we'll of million helped additional hit us year. will cost integrated continue And should the of will give taken that $XXX destocking, the have M&M and get get additional volume system get opportunities in which recovery, integration, next share since we'll we destocking as first synergy We on I recovery quarter so have fully M&M and year, would next everything SAP course synergies, That's year, to we then for to with which in addition takeout. to lack we of from an our by expect everything see this particular. see lift much

with we'll know have billion that next net at interest year. $XXX -- more On Lake least debt we additional will Clear a contribution have million the than that minimum, have year, expenses Acetyl $X And this year. this lower asset next we we take side, the from of then reduction at we

those lift So to regardless happens things again, 'XX all that 'XX, what feel from you if to take our very earnings demand. of will we confident those are factors,

Ghansham Panjabi

much. so Thanks

Operator

come of line next proceed questions. Our from questions Leithead with Please Michael Barclays. the with your

Michael Leithead

Great. Thank you. Good morning.

price? into you Materials roughly how to weaker weakness just us much due today? pricing is during the weaker much at understand, can end how Engineered look about the versus demand And most pressure due is help to you seeing when and XQ where you question, than POM, you're competitive XQ, can First other in talk

Lori Ryerkerk

Thanks, your for question. Mike Sure.

that quarter. what side. with came were from other had we we look the was we the that again half versus electronics. if the half I in the we look just industrial in hadn't at of M&M, is guided really below really As we the which to of QX, at mean what demand, half say And really performance, inventory our gap drawdown that. especially expected clearly, we had M&M the earnings and weak anticipated, so About associated I'd

moved the we've differentiated. off. market they to because happened would taking I volumes. price, lower If their on just goods. we've in customers look differentiated try we volume price again, really been have And able drop We've seen how describe haven't to you seen of products demand? products, what's but hold our end the And differentiated at don't where that's lower volumes seen We've for

of to take sales therefore ahead margin and them into lower needing them volume, in at a chosen where moving lower grade differentiated. We've to molecules standard not we have or gone a but able capture the We market, are instead and increased price.

is of it think again, So standard mix we've less of to in big which towards recovery, us it had is we that of concessions allows grade, factor make move price important take is and terms differentiated, to happen. a price a volume we as but and combination more to volume, keep some

a one, also and had a go heritage I molecules selling of certainly these We've few those sort And connectors that had volume mean, of others big into impact. molecules the -- is what differentiated say the especially more I'd which electronics, POM have that -- for in molecules. terms thing,

think it's short-term. I

again, would then any And there. And recovery see terms standard we'll I differentiated it's nylon. of it's from more that on the think side, the impact. grade significant M&M earnings volume than -- say is necessarily I in switch volume

Michael Leithead

$X.XX I to second, look just Okay. the if helpful. to the seems at guidance, in it quarter at from And north XQ. That's about then going slightly super in updated EPS of third $X midpoint your imply

you can understand, So fourth sequentially quarter? in help of you there the gets kind better just what us think

Lori Ryerkerk

Sure.

quarter $XX since few just we fourth couple third move there's impact of is, control. about things to And million this last that of of months. an million cost quarter, doing have in to is One quarter work fourth As we've $XX a from most additional will show the been the that we initiated up the happening. the

the quarter. in that show of most fourth So, will up

M&M additional show You then third And expecting robust which a in pretty versus up quarter the we fourth are have synergies, fourth quarter. quarter.

be expect of to say the year. now, would best In quarter we fact we quarter right would fourth our

we We over most partly a Western quarter little of bit in carrying Hemisphere the should fourth in from destocking that's think for be the think destocking quarter, the probably on into So third destocking. part Asia. the

destocking We we amount we've the also because had see quarter. the of think, we have in usual that seasonality, so we'll the across less seasonal wouldn't destocking much expect year, fourth

as is offset the And Year, China would the than more we a in I strong And Hemisphere. Asia which the typically say Asia of and see in we weighted seasonality more to China, fourth would go were before. than we we acquisition Chinese any last quarter Western is, quarter will and towards now before factor given heavily very New are M&M, expect

Michael Leithead

Great. Thank you.

Operator

you. Thank

Our next with the your questions Please line come of Jeff from proceed JPMorgan. questions. with Zekauskas

Jeff Zekauskas

VAM Can about geography Thanks, very you much. volume growth by please? or talk contraction

Lori Ryerkerk

been On in drag I there's say, weak for general, have the a coatings, see Really really the and Thanks we've paints been in continue not construction a challenged our and would markets to still as as little Jeff. is rebound VAM. on seen. Jeff VAM VAM, Europe most building, we geography. economy

years, is mid-XXs I utilization this see do the into is think basis, we for global many I the the VAM since I really would we've mean say, early which of seen indication lowest moderated globally, has a on COVID.

some to one are I'd in the packaging Especially especially continues our I that's in China, say in the should in seen -- uses of be of And half. in some announced VAM a bigger recovery then that or has not US. some We strong. end of industrial Americas. stimulus that's pretty of And been say. markets VAM seeing Americas second the of in in lot again to packaging, the rebound building, in come and here the coming see we yet although, more perhaps with back construction although the

Jeff Zekauskas

there Okay. there your hard hard And any for are or Scott, objectives reach rating, in need that objectives? to are to retain then investment-grade no order you

Scott Richardson

Yeah.

announced to very in I XXXX been areas. think we've the about Jeff, talking when going deal consistently focus two back we

think net times, where XXXX $X achieving The we're towards first be focused And the levered to on. in I debt then reducing XXXX, billion continue of those three is early by into XXXX. and end

the cash Ingredients transaction this the reduction. above a to up flow us confident go to debt with first in additional we're the the that very that objective of then that going called prepared coming allow will billion perspective. million $X generate actually of we're another in $XXX debt think hitting Food And reduction year given proceeds that as that comments, from from out I we

Lori that for generation a focus as first to about as and few to plans to track get EBITDA that and lift into cash second So definitely XXXX objective well tracking around build harvesting, to able on talked ahead continuing be then and and a ago objective. that minutes the

Jeff Zekauskas

Great. so much. Thank you

Operator

Thank you.

Please come questions the question. your Spector of with next from UBS. proceed line Our with Josh

Josh Spector

for Thanks question. my taking Yeah.

from. taking is about Just prepared place mix walked this of anything in after maybe go you mix of terms within a more the go remarks, one just after talked now? to changed going really Any your markets opportunities of in away different recall the year, you're M&M. that grow or or more where commodity that can some earnings there you your of to shares? impact that DuPont longer-term Has target and impact that of

Lori Ryerkerk

recover the volume say I all standard as to for end been of to is all the of of strength lower will volume. some able is in the DuPont's -- go M&M some news had really you in starting that point. had grades some demand take No, of just though grade or at some maybe even It's see through us standard after get we've grade the have mean, differentiated I back. grades. that of we've wouldn't XXXX these Zytel we specced that probably I XXXX been into mean, Again, it standard longer-term and has But get to back. some target. good offsets of

to having of grade some So the not of recertify. work standard do on contracts. a markets question it's But

people's for in we wait to there. So can get out the so we to go opportunity to roll contracts need

would again But the more business with commodity grades, our because if we're it back contracted. So that words is several say, standard I materials. on plan something to to will get you way fully, track take is will recover to just of the it grade your years us use

Josh Spector

the liberated could organic based? uncertain you other about being just I the demand you guess, or next of on there because And cash some JV about we mean you I any do side, that the there should maybe accelerate I Thanks. more Thanks. opportunities think the over mean, think cash, additional the environment, opportunities so? with how improvement Are year or

Lori Ryerkerk

remain comment other is, and and sufficient on let debt drawdown look, our through to I'll flow say commitments. meet confident steps cash I What our inventory of would all Scott ability earnings we generate in math. to the through So and requirements

been confidence so our opportunities. a And meet commitments. continue always in we our as of because changed That we really in we'll hasn't and to terms lot of have future cash be have divestments again, to ability opportunistic

Scott Richardson

year. even of down I And next year been we'll possible CapEx Yeah. down and And control. focus sheet on as cash balance other our what bringing the about million comments really year further this harvesting now in while lowering on is and reducing then then and this opportunistic we think, focusing put really talking deals $XXX our on to $XXX be the from million most our we've we inventories can that to cash prepared

that, that, aggressively will way with we earnings the lower half flow the so believe to free that continue year, robust this the will into continue generation use as to and expectation then do cash of of that. and second to and cash higher then next through be work we And we then our year,

Josh Spector

Thank you.

Operator

Thank you.

Andrews come proceed with questions. the next Our your Vincent questions from Stanley. of line Morgan with Please

Vincent Andrews

the everyone. Thank risk comments any I'm can years? able the if give about the debt several more good prepared us color morning, and your Scott, out on you, remarks term to in and remove you being the from refi next wondering,

Scott Richardson

yielded we the in put us. available did coming place maturities that higher that's to we up and year a because XXXX. ago that maturities what was mean, levels what XXXX was I in of And Yeah.

around be could bring as do And we so towers down. would opportunistic we to the we said at time what those

the those up we opportunity there where but the bring match we robust the to few next in landscape, at lower and levels to with really down cash the the of economy As for bringing now, and over years flow an could is cash free look right at next those of with be us think generation levels that we're the down so still maturities couple very the years. of flow

Vincent Andrews

a that? are considering convertible that like debt, would straight be thing or And you type or anything

Scott Richardson

from looked focus. current Our really that's term around capital focus that's has everything, the perspective. a but And been loans. and for we past in the We've think been bonds structure at us our right

Vincent Andrews

Okay. Thank you very much.

Vincent Andrews

Thank you.

proceeds from the Sison Our with Wells your next of with questions Please questions. come Michael Fargo. line

Michael Sison

couple Hi. gave integration, get Good of -- other couple and the lower you In things. last quarter gas dollar a morning. inventory a extra unwinding share had that you to M&M things a us a high-cost per of natural bridge

outlook? fourth give that there's quarter of, So sort color have about how in you when that a the minuses has could you third that you little to us -- quarter is it think dollar, bunch of sense and just the more -- bit of is that but dollar get changed you that still a

Lori Ryerkerk

the you expected we were outlook. and in of at levels. came They range, not range, some -- did the will below quarter. settling in end but back some at when gave we quarter. probably our the that that, if over look we continue seeing at further We acetyl, in last curve Obviously of if uplift -- kind up had the quarter Mike, had acetyl to we a you to good cost really see because bottom

saw E&E. we especially an in as industrial Engineered then, is, we really destocking impact Materials, in M&M. bit in I this more continued saw what said, really a inventory of We and And saw and

quarter and we that for saw And when books that across our and the we of reasons, as the indication And really again, saw quarter. strong happening as in call were recovery some April order last happen. really again, we same in we seeing an had last -- did earnings June acetyl May not

for that certainly -- performance, our I we we the very we think, the it. in confident just we've I we're understand guide And I though, given pointing of year. So think while rest feel the think

Michael Sison

you some prior was like rate that quarter, there outlook quarter Got look And somewhere good if a meeting that, $X.XX. it. would think confidence heading then, around at your be a XXXX, have into take would again, the run I $XX-some And been fourth EPS.

rate early think year predicting run that about bit a the about $X new in when $X do So know next is think relates fourth quarter, the I but, potential of run you in the you it little fourth as how XXXX? to a quarter for rate

Lori Ryerkerk

that earlier, at out are things our don't actions I the again, -- looking within control. the laid just Look, I

I that's very think a expectation. reasonable

Michael Sison

Thank you.

Operator

you. Thank

with Our proceeds next line Ahmed questions Alembic of with come Please Global. questions. from your the Hassan

Hassan Ahmed

about, remarks your the Lori longer destocking prepared cycles. talked than Good morning, Scott. you guys In and lasting previous

obviously I learned. must have the COVID lockdown mean, XXXX, XXXX, been multiple like, having through the lived period Now and lessons

restock question over the restock as So certainly longer de-stock. of a customers where the really about look decade seems like? de-stock, all I craziness the like this living changed inventory has being think sort will the appetite years I'm is, your duration materially, couple -- the so? a of the going think of my is deeper with that, And or guess you last do you through potentially What of next

Lori Ryerkerk

our always predict Hassan. really behavior. interesting question a to That's some It's of hard customer

seeing a feel people think speaks about the I the very are that to market. de-stock. I uncertainty, think deep And we

not again recovered markets, think US look probably left. Europe, European the for lot but destocking especially market. the reasonably in I a of China export not and for would at uncertainty we also If that I just market, what means say the

as well that export China, I continue really -- but the Europe. for as out be where the for chain value all lies. okay, of you would everything is And though, see to tell into doing we China China uncertainty of is taken

right unusual we situation that global have result. as a So a kind now it's of very

low. prices prices are low with staying assume and -- people think I

There's of carry reason inventory. So to lot there's of a material. no availability

So there's to carry no reason inventory.

also we saw quickly. But this how post-COVID, very change can

start demand see As do I people increase, back at in we'll to soon customers wanting as restock. XXXX to consistent and of end as believe won't start recovery, prices the as we were start situation see to they the be same to soon want to

So, a recovery global maybe else. reason answer a see the I to of think macroeconomics, no direct think have is of and geopolitics, a I because accumulation question, But to point. deeper won't everything some just destocking we at it your

with inventory comfortable of I have And -- level demand lower I don't comes think gotten people think a back. once

I recovery. that what of just demand lot is timing there's uncertainty a of about think

Hassan Ahmed

as of And on in see you helpful. from the sort in distribution approaches. near-term Very guys follow-up the to or prepared a exclusive multi-distribution remarks, as again, that EM the moving on playing dual well basis? go-forward side it, How as impact of of talked you your arrangements about do a West out

Lori Ryerkerk

I geographies customers such here to to volume reach the a generate it's a not that new desire single we we the have. in to company Yes, much major of is really bigger have sales amount to and are the reaching opportunities we be us breadth to the think need giving now continuing probably and distributors that these matter of

about just full customers need range we full have the is the to this So, get to and multiple markets. of end partners range of to really

Hassan Ahmed

so helpful. Very you much Thank Lori.

Operator

you. Thank

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

Kevin McCarthy

Yes, good morning.

$XXX believe off coming on senior refinance address the in you few it to of unsecured instead $X.X up the notes cash due next from you your with follow cash? to accumulate quarter Nutrinova cash a you discussion. in paying billion your July prefer deal. over to would the XXXX, and ended quarters continue I sheet or million them them another in of just the balance Just have intention Scott with Is to

Scott Richardson

right in to we that utilize to Yes, at still quickly the find for want cash coming We and term can I we that which Kevin, ways as not we're of cash We can. reduce as holding business term the debt up have now. think loans. have so we that loans

we third the do payment a $XXX have I interest in would also million quarter. you remind

handle for So, that we And still this that. on we as will well. hand up coming cash we then year have maturities will use have the later we

that talked pipelines very the US and to having cash to to openly building US cash and move here able to back geographies of we about expect that get need in by the we We've to the those back year. end the now we're other be

an our right integrated get that the of amount And a the then once around at give much operate next lower of to we probably ability cash company in first part systems will $XXX us million. year,

us So, with cash I have a to that going for we free-up term given we for coming deleveraging, that, think to have up loans that's lot the use plus maturities opportunity outstanding. the of

Kevin McCarthy

and for of That ticked then And billion on you Thank that. of up balance debt. short-term as portion your a little sum see. reflects long-term related I current sheet approximately debt the a note $X.X bit. actually

that go it in would other how to I of you term Sequentially, might owe much you the the there speak what of point? would thought you might on paydown million. loan in the way affiliates have what's and Can drawn $XXX with revolver at terms this have

Scott Richardson

euro it's big Mainly mainly exchange the up there. little but bit, of moved Kevin the foreign that's just up ticked delta because a Yes.

Kevin McCarthy

Thank Okay. you.

Operator

you. Thank

come of DeYoe Our with of proceed questions Matthew line America. questions. with next your Bank the from Please

Matthew DeYoe

you. the recovery that the right? make recent trade PAXX challenging? Thank in like flows. is PAXX Like more the And within needed business maybe macro, Asia-China to I don't China does that POM capacity improve seems acceleration and sharp a know expansions It

Lori Ryerkerk

outlook really is on any demand. in not Look increase our based

view improvement particular market. the year a our of have of We based really region. we in of in bit occurring aren't again destocking demand uptick forecasting the in on any of little But any rest the

well expansions the wouldn't nylon, that's for $XX raw upstream would wouldn't always maybe meet seen say I has you've be of that that. more to in needed. of the our been I supplied. And it's range Certainly year. would I the side needed there, There's say So, welcome plenty the but plenty nylon compounders, side out polymerization of the on $X been or pretty to material there's expansion been say

around nylon. dynamics that that see I So, changes much really our don't

couple differentiated regain are. for and to or in of of applications, differentiation, of depending taking new with based polymerization our out on our that over looking next share more the on option share the regain relationships, years grade, customer be on integrated talked especially highly getting what and I value focus markets new good end our market standard that's continue the in advantage into our We products, about earlier things those of to really where chain nylon

So I'd I think positioned -- buy either well And say, it works our comes or value to from out. we're differentiation. make really whatever

have give Maybe you examples major gotten because we've We've One new some if EVs. we a going two mounts application I parts to Zytel, is finished from And a use AC the from which often contracts we for which compressor can for going this which motor then is recently into part EVs. we now EV bracket, have question around for made relative nylon completed second just Zytel. is nylon. OEM, into we'll just EV made actually

into may require And vibration. particular from for consumers And are have things there for as we nylon especially of parts lot why light in other you of want need People the and about being time EV. give weighting important replace in for an is, they great talked and they deal EVs but nylon unnoticed but want quiet. parts to less noise, about are not gone this is, a the the just at also experience EVs, metal applications is less those to polymer strengths that think

those to some and knowledge Celanese winning in Zytel the using successes contact some see to those and with our businesses applying the starting new market of there. already EV customers we're so And

Matthew DeYoe

from guess, these I is POM. Because sight -- more on I and wasn't necessarily into X% a have of Europe, Is case particularly appreciate flows year a line just this not reverse if the XX% I cost that's of repairing it's into that? basis. to guess about supply/demand China and markets, the from what there just trade like we guess is that. worried curve really I is or of ton kind the it China sitting one with recovery in in some I general of number

Scott Richardson

co-producers think even and a it much I history too material. important if have tend they market we move these get it's temporary here made be just And in regions rid Matthew, of of in they other material have -- lot to where that POM. the into have to situations

our has These serve cost well with been that unparalleled be sustainably US fluctuations. Germany. Our proven tend is out do ability to in there in Frankfurt, the temporary to to time. in with as facilities our Texas and really over Europe as Bishop, win And

do we this the continue to future. foreseeable that that So not something expect is going for is

Matthew DeYoe

for Thanks that.

Operator

Thank you.

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

Arun Viswanathan

Great. for question. my taking Thanks

Just to guidance. going the back

just around for new if is the the the around midpoint, now kind $X.XX and midpoint at So, it $X.XX $X.XX, QX. with you implies $X.XX go through that QX to of $X

do the $X wanted but to just So out. to We be Thanks. from well is QX? math, going segments strongest Could and you noted out of it you to as two kind just I how quarter. can that your QX $X.XX from you to maybe as bucket that hear QX play between the bridge

Lori Ryerkerk

we've level called would -- a foundational be say I will would earnings. out year, I expect Acetyl Look, Chain Yes. of for the

for billion And Chain, Acetyl a half. is first where So see essentially the half $X.X very similar second in you in the we'll to Materials Engineered the pencil lift. so can then

about again, pricing of on regain half to from in end half And Americas of in you of of a well the the here bit but other from destocking see EM about coming share -- to move differentiated we markets. that that destocking or -- other and continue really as have coming maybe then of really and other we little the recovery end and little as M&M also not as more we half -- coming grades continue from really probably a recovery

help additional a of piece in this the in quarter, from again, a the you'll of undertaken, bit get on of the though of the up and which quarter the synergies this of biggest show million most $XX to fourth We little in quarter. that we've the million the lower and $XX debt M&M EM fourth in will a additional will cost also and lot And help activities bit is from also of versus of uplift productivity third expense paydown. little be -- interest have

those fourth make accumulate our all should what So the quarter of of best year. together, be quarter to

Arun Viswanathan

for All then. Thanks that. right. And a just as follow-up

an it? So you end you'll rate or or into kind to mean like that of $XX range view? into right back that not to that, was achieve think run risks maybe $X what for as of power at earnings maybe way is And next the automotive Would the seeing a destocking be anything to year of it the any are the look that cycle? be maybe exiting $XX year. of to you some level there strike XXXX? about are Is the from this you of risk there that gets -- kind I slowdown

Lori Ryerkerk

go with XXXX, bad if think there at I that what a Again, you're in not back from don't laying forecasting I are -- if just But and which XXXX, end we're look, into a any went I things destocking. great again, end again, the with at of of XXXX, forecasting uptick out number earlier, I through there a of number -- And I not is demand assumes of steady -- you if the of that end to that look not we're demand the look, lot base. we're kind XXXX. just

So I occur to continuing year. destocking lot don't next see of a

from we a a this inventory be year. will just again cost we variable those system the cost we position we flush of out standpoint control, better can And at high things if as in look

inventory reduction year. have next not inventory, the the year, will hit help level which will We next of

$XXX And assets. additional have from million additional we Lake synergies. We the of the Clear $XXX million M&M have

I of and would year. next So annualize level see you than quarter the take if I it, as floor that performance as expected our for would a fourth more say,

Arun Viswanathan

Thanks. Great.

Operator

Thank you.

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

David Begleiter

you. have Thank do full an the Lori, M&M Good morning. for updated year? forecast EBITDA you for

Brandon Ayache

have Scott, number? do that you

Scott Richardson

the a we in Yeah. first it's quarter, of David, we I was QX the the were where quarter. off number, another second lift off lift out think as put which of

would another As lift we as we QX mentioned, Lori go up. into expect

exceed in of all to $XXX that to kind $XXX We're up those the end So million in even talked quarterly accretion get But lot where range getting you're basis to that that puts the million where somewhere that's to range quarter. we'd about quarterly depending a as QX of you range. that last it you level you or year top on but try lands, to a when that we on going closer numbers that add be. end of

David Begleiter

And to -- somewhat of is million more little it $XX would color just is additional million a on that Understood. temporary? helpful. permanent? it Lori on be you. reductions, Thank $XX Is that And the cost

Lori Ryerkerk

$XX it of to Yeah. If the one-time. definitely some million, million is $XX I look at

actions. So you of related half about it is production if look to

right these are turnaround. turnarounds, fact capacity the are and take things taking do just demand, we're bit example, So and to that focused I how can we doing optimizing need don't when we're overtime the lower we a turnarounds. away that we a right -- so better back it mean, on have do if without for longer

a within lines facilities much entire so are say facilities idling but We unit. compounding not

as So that cetera. much power savings, staff to et allows not us

reduced of time, contractors, over response to again reduced demand. really in So use

things -- I or actions. are can that that not say comes things these then demand we one-time hopefully They're and So back those are temporary reverse. would

And them lot I be of would a are a small to -- of half, these and the tend these one-time as lot say tend be to other well.

worth million, as a spend, marketing reduce really Celanese, reduction and few well. across in to continuing a So few promotional travel which million is

the is again have of for M&M. are are we acceleration there out So there, acquisition most temporary. synergies Look that some the of these things of which laid

have versus we going year in now and or where until redundant positions waited So those later the next ahead maybe into even example the year. redundancies organization in removing having for

guessing and of, of kind head, then two-thirds of would and the year. nature other this And one-third period the next steps seeing maximizing to are of And say in in focus into demand be that had we just our in planned top and later things temporary the on more related that off take so my I'd cash we're time. acceleration year probably reduction say it's the I'd to in

David Begleiter

Thank you.

Operator

Thank you.

Please Our Goldman come Duffy proceed the with with your questions questions. from line next Sachs. Fischer of

Duffy Fischer

just out are morning. dynamics change that sold competitive called seen in part Europe? you you into polyplastics you increased issues they Yeah. Daicel? behavior of Good to since your Could half have the in comment, those you any imports in And

Lori Ryerkerk

seen really seeing industry of think different now. their we've all than in in difference I rest the experiencing response don't that we're Yeah. the the any behavior. I we're in mean right macro to nothing conditions

Duffy Fischer

year-over-year, Ibn half year? of sequentially then back did then what And does XQ, enough. what or Fair and Sina contribute to do the the that in

Lori Ryerkerk

Yeah.

all methanol to it. a think in KEPCO Ibn probably $XX joint than Sina ventures million XXXX. last combination joint for $XXX contribution about for in is crude Sina. million Ibn that's a Ibn in XXXX million going contribution way the was to that of from KEPCO venture. the manufacturing And This because to of Ibn XXXX I less $XX We -- be It's year-over-year, full less prices, versus the easier and me had believe -- higher that's year our really higher total Sina for prices. to is healthy year. about Sina moving year So the

Duffy Fischer

you Thank Great. guys.

Operator

you. Thank

KeyBanc line questions with of the Markets. proceed Capital Our with next Aleksey Yefremov Please come question. your from

Unidentified Analyst

morning, Aleksey. Ryan and on This [ph] good everyone. for Thanks, is

Just on $XX destocking to is you from million here question first -- QX. during million in the EM my $XX headwind flagged

continue Now destocking But in something in kind call I that could the XQ. of based here? you XQ, back partially off something commentary as is this that presume, ends your is on get would

Lori Ryerkerk

had third to $XX the second you expect sorry later. we your I'm Ryan, quarter would that I little headwind question sometimes we bit. due or that were in the that question? recover destocking up, a your believe to million breaking quarter in is Was

Unidentified Analyst

was that Yes, it.

Lori Ryerkerk

recover onetime say expect it. wouldn't I a thing. necessarily to Great. It's Okay. we

you and see future, get inventory some of be, that's But destocking, strongly I quarter financial be implications. back and would as quarter any time benefit that similar have will second come would when to third to idea we track. to level people a do I the kind hard the in a of expect some terms thing want from levels, don't in demand return to Now certainly. restocking,

-- expect So significant. I and hugely little big goods quarter third raw we'll wouldn't destocking, destocking in further the a more bit material big down pluses but not because finished intermediate or and more maybe have less minus,

I quarter, destocking. second big wouldn't third a to to relative expect So change

Unidentified Analyst

financial And just some the at million. question second component along delayed my that defects. start is, $XX Thanks. you it. up to costs, then Thank impact go flagged But you. I due material is understand Got it of with are Understood. Clear the Lake, there this? any

Lori Ryerkerk

obviously, the to in is there It's the mean the of No. I really profile capacity lower being not synergies. get impact our demand with world. able

impact big the manufacturer a the the And cost anticipate, the covered site itself is is manufacturer don't of we there. So, defect. since for the by responsible

Operator

Thank you.

your Our Please next Capital the Markets. from come with questions proceed line John question. BMO with McNulty of

John McNulty

Yes. [indiscernible] Good you coming puts of it to as I ring year. my taking you the Scott, Thanks about be is questions, morning. pushed levers Are of for working thinking in to year? can for So we free should CapEx and there generation be things? we like guess, takes down you've -- feel looks cash pulled of Are there the that costs integration of how still capital out the maybe other side can next XXXX look off? some like next that kind for more pull

Scott Richardson

Yes.

our and priority in number million very think going been into XXXX. that's about year, first cash out the We we've to change $XXX flow free doesn't John here XXXX, next for CapEx that put I the open step.

into have over year. several year, be $XXX finish year, things, we we On kind There as more materials years, likely which course to come an how of the good at million million up volumes reduction last $XXX be from just to of given inventory the levels expect the this this inventory side of standpoint. much opportunity next will going raw

cash the good then year capital you has then EBITDA times to for about to more elements free work of are really on aggressively terms Lori other And that call, drive focus flow kind and there more focused year. feel capital we And controllable working opportunity, we But mentioned will our there. to on heavily opportunities, side. when as the cash growth, continue to on opportunity several value going of then the the layer convert next in very that continuing be looking teams working likely way into next

John McNulty

it. Got

just we've see And on far, so enough. question EM's across Fair pressure a to XX out you so whatever, as so the you Do the months of over, then seen products. kind that you given look next level the it haven't expect call many it Okay. in of pricing any of deflation you sounds differentiated way like industries much far? Have there. just seen --

Lori Ryerkerk

that not Like and back. their some we've said, differentiated we really. seen pricing And we for this expect demand John, lot again, products. seen come demand we've our just for I softness as -- that temporary But our based customers' of pressure not on would softness typically don't products. a is on No, see will

Brandon Ayache

We take will more one question, please.

Operator

Thank you.

come will from Our John Credit Roberts Suisse. with Please line question. final your question the of with proceed

John Roberts

some closing? the broad weakness, Food you. overall the the Ingredients in pretty into Thank market. How Ingredients business performing is We've deal Food got

Lori Ryerkerk

Yes.

the at I laid had think beginning we as is the really out issues there. any Ingredients as expected, our Food haven't and performing of We year.

Scott Richardson

conditions. Yes, pretty economic most through be John, business to tends that resilient

John Roberts

recent the oil if any being up? the rise unit to risk Singapore there then prices, year in the curtailed with in oil And continues is later

Lori Ryerkerk

or it I flex more mean, say regional regional level supply constantly see in to ever than on those would on we and our I With Nanjing dynamic and pricing Look, and significantly. economics demand. units China, of pricing that changing the depending depending I demand this no crude coal is. don't Singapore cost

John Roberts

you. Thank

Operator

Thank you.

reached turn like Ayache back comments. over have of our end session. We for question-and-answer I to the closing the would floor to Brandon now

Brandon Ayache

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

call. go close for and have. the we're please up around ahead As any follow-up questions always, you Darryl,

Operator

Thank you. conclude teleconference. This does today's

this at of your lines the your participation you Thank disconnect and time. enjoy day. for your rest may You

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