Celanese (CE) 7 Nov 232023 Q3 Earnings call transcript

Company Profile

Participants

Brandon Ayache	executive
Lori Ryerkerk	executive
Michael Leithead	analyst
Scott Richardson	executive
Jeffrey Zekauskas	analyst
Michael Sison	analyst
Joshua Spector	analyst
Vincent Andrews	analyst
David Begleiter	analyst
Kevin McCarthy	analyst
Hassan Ahmed	analyst
Aleksey Yefremov	analyst
Frank Mitsch	analyst
Arun Viswanathan	analyst
Laurence Alexander	analyst
Salvator Tiano	analyst
Andrew Keches	analyst
Patrick Cunningham	analyst
Jaideep Pandya	analyst
John Roberts	analyst

Call transcript

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Operator

Hello, and welcome to the Celanese Q3 2023 Earnings Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Brandon Ayache, Investor Relations. Please go ahead.

Brandon Ayache

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

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

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

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

for over Before introductory few me questions, your to Lori opening provide let it to a turn up comments. it

Lori Ryerkerk

Brandon. Thanks,

we've So recently. announced lot done and a

two Clear in offerings. again enhance which projects acid product to are So minute Acetyl point In to take opportunity wanted few next has a in or we Celanese. I continue our at deliver achieve working Lake will Clear Lake, emphasize optionality sustainable Chain, at that expansion all a dramatically to confidently history, our significant expansion can to I earnings years. at like methanol at as our to growth also and for the greater power acetic strengthen been say no we earnings the what with the the and so just there exactly Celanese hard

This and that the challenging EM which made been specialty synergize Materials, valuable the course, global work remains and integrate in acquisition, important to has provider. preeminent the Engineering and volatile. weak backdrop in Of materials into exceptionally demand transforms we continue more M&M

consecutive to XXXX. exceed and conditions the year Regardless, our position limited. us objective to growth of to tremendously worked hard debt macro teams meaningfully by deliver to into closing M&M in visibility our acquisition billion have reduce quarters net future X earnings Our is since full $X

been employees take masked for their I remain The controllable temporarily work thank actions and to we moving environment macro financial while benefit has of to has dedication. underlying and actions. decisive continuing the the each the not is sincerely our pace, work some easy, forward individual and strengthen frankly, business. at resolute of Quite contributions our in of our But

am footprint, deleveraging behind recent our our most manufacturing earnings the announced enhance to the alignment team purpose Our team ongoing to changes growth is including plan. I've are The our changes made of the our to against actions, execute our leadership I accelerate commitment leadership and a individual drive in evidence collective Chuck leadership and and executive deliver and and value-enhancing for Ashley opportunities on their changes confident value us. drive will immediately prepared new team. strengths these and to enhance the roles, before are experience Scott, well many exceptionally we the of as

committed Celanese the speak our us. and opportunities I leadership broader in before delivering are we for on and fully engaged saying to team

open it to for let it up you back Kevin, over that, With questions. turn to me

Operator

[Operator is Leithead from Our Instructions] Barclays. Mike first coming from question

Michael Leithead

congrats to pricing. And Materials Lori, Great. on start the new Engineered Ashley I wanted and roles. to Scott, Chuck on

the prepared comment pressure made remarks, that the that has nothing throughout in think you indicates I a widened but structural. year,

what making versus bit in confidence about gives you now? down you've more here So what seen a your comment? can Just talk confidence cycles in just maybe maybe you previous that or the

Lori Ryerkerk

there demand services electronics, people really have seeing grade the and decline materials in cost come two. durable, demand price industry action Yes. already experiences. Where pressure bit operating and off that's Uentrop to is we've volume supply seen lower. really the is or in pretty with better What price of the more to we're think of announced down. the standard this really split would with we've supply, stability we've them take one I'll capacity even have there, the volume having higher consumer differentiated seen needs we've it consumer of is softer I into of about reasons seen terms purchases, their everyone associated quite again, we've to and consumer I pricing, we've that cost What length filling to just steps significant by lower If products. we're as shutting as other where and impact those is of good position scenario seen and What our more seen a year capacity is our we the taking some a down customer demand spending price if pretty current say for shifted more come around with

from in the have then come a provide start consider and other through be we that I would level, And no debottlenecks. more should in to future, what see demand our we and able to demand already as assets to back we low-cost network that normalized

very out and little we're a in very So in example. with will come it auto time, of feel this position of I unique confident I think great soft, environment mean, a soft up. A exports China. has structurally solid is kind Auto very in year. been Europe

solid. has that been to continue. We expect Medical

the 'XX. a we So and is reflection and spending, consumer of we we that believe are which seeing really consumer saw I think highs off temporary just preference in

Michael Leithead

a And cash flow. question maybe free then on Scott, for

of $XXX of Lori's benefit laid prepared improvement year, outlook earnings remarks, similar probably million out working maybe this in getting in or next the you capital think guys are $XXX 'XX she year. million type of amount I a

good free year? cash point get there working capital a year, think is further year-on-year, next cash as benefits or about today? generation starting you flat think other is can Or relatively So you we next

Scott Richardson

that much $XXX cash next We're million we that as line the We we Yes. to that year possible. Thanks, called as out being CapEx Mike. to flow bottom earnings as of lighter see going ensure put work to growth free as well.

of the accounts And kind raw receivable pricing capital. upon and will kind well with material line. with I happens of are be what depending sales the think as where what as happens on variable it depends working

to to bring the going an on material in can depending There reduction But could down inventory do we're what further as next year. with happens opportunity well everything to as for landscape. be raw we demand continue

Operator

Next question coming from is Jeff JPMorgan. Zekauskas from

Jeffrey Zekauskas

And think How was affecting I remarks. million X filter I is profits tow the that There $XXX Eastman's mention filter in Acetyl business are don't Chain up months. of it know, tow through your the doing? earnings? how is no

Lori Ryerkerk

know, would We're we are tow. you other we're as similar now. we an chain tow end-to-end impacts in is as treating Jeff, seeing downstream do that running What I say as derivatives.

anticipated we second to Now pricing, the the $XXX contracts that margins from we seeing those of exceed a but up. in contract down half, slightly year are set are reset But this the as that on million bringing sale. would earlier the was half for which first track say set I still way with the target out we're is our

Jeffrey Zekauskas

your closing about nylon utilization nameplate running your And Is facility. of nylon? nylon what capacity that XX% rate You're generally? in German you at in are

Lori Ryerkerk

Yes.

overall materials, or Uentrop right and Palm total like footprint -- we produce, have this, X I that that's to either hear done what getting concentrating in on characterize the less or either us. knew have our assets front total we our purchasing assets where polymer believe the would we've shift shutdown much profitable as that into numbers XX% utilization is our capacity. on assets, of But lower to out into represents at that plants be depending more So X with cost, order as DuPont Jeff, trying able capacity. in in the raw different in of volume to it we're I underutilized deal networks profitable taking for we don't nylon other Uentrop really actually the flexibility had we excess where going and more of of terms worked with of we've

we've time while had in the look basis nylon maintaining to adjust at our some it, shutting Uentrop that is cost best to on down which necessary still we the customers. for Europe, our believe really way is compounding Now

we've consistent is we've the you've XX models. these facilities with in seen say done this where as XX the would us so implemented XX shut over I or But Celanese probably last what last years years in very over down

Operator

Next from from Fargo. Wells Sison question Mike is coming

Michael Sison

haven't math I more days. to need these You do told

-- and I add up math? if us 'XX? or So how use upside the stuff. could volume that 'XX growth, end then you do frame inflation just sort lower or It Is of volume $XX up what the on that inventory deflation for you the or gave to you of better. can a your bridges right And for and no like looks help

Lori Ryerkerk

the Yes, various Mike, buckets. out we laid

be will be happens cost the than by optimization. higher raws. that reduction reiterate, what And baked you're some is acceleration depend Hopefully, amount in should like impact we we $XXX math. very It can big the I inventory. next synergy. of less I So as as expect I think M&M what exceed you going in. really there well to the up. Debt to more we mean, down inventory million. margin we year, of clear saying, think, big once issue all on benefit could is to do goes can started since $XXX less then We'll through get service number. acetic We additional that With get for the flushing this just get a million with didn't another about of acid $XX so footprint from have And manufacturing have that. the we do see million

volatile raw we're As in environment quite you right now. know, a material

stays are these we'll margin, If capital. the up, probably going some goes forward. see increase then we focused And we again demand can working control. If in things we're low, demand demand these think because on happens more with get then but what obviously, I also what will are

are and So big there's we're really year, that's that we that volatility next would focusing those control. uncertainty on why lot of just I around still in say buckets our outlined just and a

Michael Sison

it. thoughts could you markets? happen of you be what Got about when customers of then could next China, year? when talk initial you end and do demand some your what XXXX, to Auto think to environment the think And Any

Lori Ryerkerk

Again, to expect I'd the that. this of uncertain I thinking couple to Auto, percent. about and we really auto December our see Yes. volatile with you're very would mean across is on sectors, are should some consistent Auto, on at can look build, what tell if a going things XXXX. growth all I maybe in say me And growth moderate better point. be you like, seeing track forecast at

happens that We continue But with on also starts would some I very growth at say, say strong. be across I that is to demand some to conversations year start moderate as next and the expect would customers, when timing pace back. see which based we the I medical uncertain. would expect coming of

lot a certainly point have at So this than given this next we volatility we're year usually seeing. the might at on less conviction point

Operator

from Next question today from is Spector UBS. coming Josh

Joshua Spector

pricing you is is would there. where next you So kind or still level could large on a actually get I to that Lori, on year? you cost pricing wanted holds, the up quarter, it fourth parts you guess inventory that that, the in cost up moving at Just follow more guess, lower that wondering through. need like the bit into price but if I from inventory a can or here? around Or benefit a move if flow do look uncertain sound be I of to spread

Lori Ryerkerk

that see the impact I quarter-on-quarter some we we're see to on cost starting even inventory, a our lower pricing Look, and as think of moderate No. seeing at pull we growth. through now, that are

materials I as we would pull-through. Obviously, some are and that that of of help we continue seeing pricing, see what saw if raws increase, these in, but going the we quarter also we on expect upward pressure well. raw to to think at have even consider to portion So some more, would pricing price this

well But would from all future inventory. on just in cases, the some say raws cost we of impact that pricing. look, as magnitude expect as It's through higher depend flushing I will

Joshua Spector

is, Or if pricing come just talk statement? it to does the maybe where biggest there it that it bridge that I Yes. true a is stays guess item, being you when down? pin Okay. about

Lori Ryerkerk

I are, that say in where be would would a raws true still pricing statement. stay they

Operator

Stanley. Morgan Next question from today Andrews is coming from Vincent

Vincent Andrews

I a Asia. of benefit was of couple One, just in in wanted outages despite clearly from Acetyls ask third the there things. to quarter, bunch a a headwinds in

quarter. that's you you anticipate if what? sort of third fourth And you're of wondering inventory through quarter? there's or any fourth some some to what quarter the in delay I'm way if comments still of in that just a the wondering just that So going like seems higher and sizing pricing have through flowing sort the I'm in flowing have It of

understand rate, and is that next on all half year if that secondly, going lower through was is why it's different least demand tax contemplated that rate you originally the then not the mean to stay the of it this lower But in from tax next first the guidance. environment year year, I today as lower-than-normal where have well? it does at a And

Lori Ryerkerk

is, can if the a did higher of the say occurred of see Yes, I answer in that year. that. turnaround I say in impact influence Vince, seen those maybe supply of going of would to is few let reduction to think the drop quarter. the see we the back we of contract Most we really last from pricing above would -- it. fourth outages I called I the now, out quarter Asia had into a we saw. What saw weeks those closer curve, as the offsetting result me as the would positive the and third we're pricing that What cost price we've that that pretty slightly much impact

So of we've lost China. benefit in kind that

by although of that a bit fourth lags the Western of in typically, see about the We Western Hemisphere benefit, quarter because significantly in Hemisphere quarter. little a will less pricing

we'll So the benefit third the benefit, the not same saw extent but that some in quarter. to we see

Scott Richardson

then rate, And stay to we the tax this then mix things a depend on if is be the as could earnings, just of they at going are geographic year, exactly things upon kind of Vincent, normal is then to demand, we'd lot normalize of the be I see year of back next XX% range. back what levels. geographic we more say kind If would lower that mix certainly, in

Operator

David today from Bank. Begleiter is from Next question Deutsche coming

David Begleiter

X%. retain case? cost First, levels, of is 'XX, Pricing Ashley. 'XX, increase? on pricing. is just the in congratulations this price back to up to this Chuck go down Scott, around do portion why And we Lori be year, about we and 'XX do If XX% EM so, and should Scott, if maybe pre that some

Lori Ryerkerk

like a time would volumes are seems is What say seeing we good long come That the news is very I back. ago, Dave.

in to kind XXXX like auto, back so like medical, areas, we're of levels. some And

can margins our that's Pricing Again, demand, think I soft. electronics, similar. differentiated I very think -- something goods, so that okay, similar, pricing probably durable for very, we consumer keep. grades,

to levels. for back therefore, the with some to and kind standard grades, current kind demand some to the see get demand we think I need of low of up those the long more going of can we're supply before pricing the those

Scott Richardson

should down, more some the see the up with the think landscape normalized get normalized in some Yes. the versus as should and now Materials being David, same we've do raws. business we is think demand we about think margins in we of just move Acetyl. I the hold able changes I we I to and EM see that would material as add, in back of raw to talked of structural things kind Engineered making, business we're price we one about acetyls be the And given environments, size, that countermovement

whole the as So lower of overall, get normalized kind into we it earnings should for once fundamentally kind enterprise volatility of back conditions. a

David Begleiter

next of of year less? or And just about Lake, million the on how acid for range ramp-up good. something half in $XXX the should the that next Very more earnings to be should annualized think we normalized or that expansion Clear year,

Lori Ryerkerk

Clear the the Look, start up Yes. will Lake within quarter. first expansion acid

that kind I so immediately the of And up to expect would ramp after startup. start

Operator

Vertical Research Kevin from is coming question McCarthy Partners. Next from

Kevin McCarthy

these clear could Brazil, discussed production can prepared are asset It previously, facilities I through shutdown Engineered ceased remarks, that certain you idlings put temporary in the mentioned you at you Germany for into you kind or nylon talk permanent changes. more that whether and Argentina context Lori, that wasn't us. entirely on structural beyond just in Materials are process today. rationalization your it in Maybe think you where that of

Lori Ryerkerk

say of ones would I and that these named, Yes. shutdowns. ones are the Argentina the more and Europe, Brazil in permanent so the we've for majority

others. Now we're is in that where than network, capacity actions really, things the we that we we but up current the to meet temporary demands lower would as recently, consider redefine which in and using on are Frankfurt those of VAM I capacity We're like the cost taking flex we structural really the will when need announced out producers. are changes to we've again. But ones taking by cost come where highest curve normal, our

Kevin McCarthy

tell then And targeted $XXX wanted year, that describe or Can the then benefit the And expecting of I synergies. as million That's synergy-related you would ratable you look ramping course 'XX? XQ? in up what on was throughout what of at when Okay. XQ helpful. follow in tailwind and we us next you're to the

Lori Ryerkerk

Yes.

actually sequential of on growth was a QX synergies say, for quarter. cut that to -- of synergies February. But sequential our do we quarter. bit -- in will synergy bit the So at our would after XX% in that with the little are lower, Because start the small because shutdowns after in over SAP fourth expected the And uplift the I XX% we example, in than January synergies. some our lower will expect year real volume synergy announced, the completion next of the we shutdowns our of some take some happen of anticipated increase end first little volumes to come new and and had we lower a we of kind related. Again, the to a we

So would in and the second but year. of starting the across quarter second synergies the say quarter the into through more -- XXXX, will definitely I the ramp end

Scott Richardson

synergies were QX. of up quarter, was XX% or $XX incrementally around total, third about which off the Kevin. Yes, in XX% In million

Operator

is Ahmed today from Alembic from coming Hassan question Global. Next

Hassan Ahmed

versus mean legacy of I maximizing flexibility. much guys you prepared things. that me, your make side in remarks, Celanese portfolio, to the about you pretty buy sort of talked Already optimized the

lot So on work sort So will that's is the be it of optimization EM a of fair part to assume this of one of it? question. the that side

part that shuttering or permanent there's greenfield future some build-outs also second well? it happening going as the seems in fair idling right a the is Could now, And of bit that this on. mean

Lori Ryerkerk

Hassan. for Thanks question, the Yes.

is all So building flexibility products. on our of focused the would we're what across say I really

and we we're as contract versus so we're material, looking also flexibility just multisourcing at make-versus-buy with flexibility, flexibility, sourcing. And but raw not tow, at much sourcing for more commitments single flexibility looking regional did

energy flexibility make-versus-buy, where in often demand especially yes, can low costs EM and fixed theme just for [ consistent in a now we the one been say than of raws want cheaper to ] Specifically has would in in can because and there. But this buy to higher I Europe, PAXX, the Celanese particular, portfolio. costs, higher period higher we Heritage make this we're we applying

some think to amount -- a growth. is it this materials around mean also we've without our I of I of would volume So with we and a way deliver even say large year-on-year contracting uplift I but value Acetyls raw and applied others. continue

So anticipate years, expect that you the years. as some of I many wouldn't that, lot think result a in a continuing next optimization few any over I And sign say And greenfield builds. continue. in I will I of continue next think the would greenfield, of we to terms footprint to see

expansion, and million. the around what and the the unit much the advantage think Clear of size you'll doubling of continue no us footprint we're where basically do have low-cost to $XXX the to world, I opportunities debottlenecks we Lake for our see take like

significantly footprint So opportunity the already have lot we on our without think investments. of major ground a expand to we

Hassan Ahmed

Look, visibility context duration as little that sort ongoing the just just completely in historical declines, mean I sort fair. mean, right well, term, a this low terms of has some volume both of of unprecedented, sort gears as near it. But switching is of Very the thinking I extremely as with beyond destock understand And been bit. of now. well I absolute

a look living Celanese of mean legacy of the history with what look you there restock potential eventual as like? these as I sort just the acquired the sit could destocks at and portfolio well through businesses, as So

Lori Ryerkerk

normal I I happy now, that when return say, uncertain. happens, some to point, think highly to will polymers there Look, patterns Yes. at in starting be some in particular. to some restocking would order see we're just Right people

seeing we're Acetyls, think more. I

a being stock I think think spread nervous to as that people pretty would think after think few will period I year. be again, significant last as could raise been percent. through rapidly I I restocking a about the But what be we've across

Operator

from Yefremov Next KeyBanc question is coming from Markets. Alex Capital

Aleksey Yefremov

your it improvement, on return independent wanted the is improvement? to of The demand or bridge. improvement depend in synergies to Or volume it? I does million $XXX it M&Ms XXXX

Lori Ryerkerk

was $XXX there synergies in what I improvement initially, of some the So million, volume volume I would is, the related. some say say that because look, would are

of our us from work our I think see get accelerate and will there. with footprint manufacturing demand align that's why you we to continuing to supply, current some synergies better

the fully set committed over sufficient well So underway the we deliver year I had different have ago that. of would to think the say slightly are The blend than time delivering we to we activities we year. this But be out, may say, $XXX million deal. at a

Aleksey Yefremov

And polymer you just then in the any and EM, permanent shutdown your announced assets. significant either industry chains? announced seen Have with Lori. peers idle staying some or Thanks, of you shutdowns

Lori Ryerkerk

Yes.

industry, specifically seen probably most the activity. if we've think the at we is where PAXX look I

you've We particularly all increased which nylon length market demand. those in China Asia, seen in period have seen some we've in increased impacts. built some competition, of additional out depressed polymer, for a therefore, pricing And capacity lower had has being

I to is our think shutdown, participants action. start take much see, industry what though, we other you like see

assets one seen producer largest a the shutdown intermediate here their of which we've represents of XX% a last in the So intermediate nylon of month, production. about announced

high as this become commercial I have address returns, assets in much work industry position, towards be and actions a world the of going better quite parts the on cost you've think legacy we'll number think across of opportunity of that. but using to higher-cost when different intermediate demand I rebalancing. Again, a the to do take seen and see some the an out you think I So that

Operator

coming is Frank Fermium Next Mitsch from Research. from question

Frank Mitsch

a Maybe little question the could destock ask if differently. I

in here XXXX, Americas mentioned be in fourth in Americas release and done finally You we're demand and that you you're the it that the Asia, confidence seeing will in going to the that in we're prepared see remarks end underlying those the the growth in the Europe. that Asia to and -- going What regions? gives quarter continue the such

Lori Ryerkerk

it have Yes. some normal U.S. in been distributors Look, especially are conversations don't in think from, recovery, the customers Americas, lot well, what in buying now. with I direct our electronics, more but because those least, demand starting patterns. comes in want that that chain pull our I confidence see that mean, weak just they is want really our purchasing the when seeing patterns I now, and at we're obviously, maybe fully because durables destocked we're U.S. suggest also a think in consumer of areas as to to visibility future can finding especially the we us the don't their buy, like have people they we're to and they on. And they inventory to Would have into

is back a significant China near China China in obviously, are to, is would describe off of consumer come for patterns I the But in end U.S. normal the the think so destocking we that would weak, I I China. of still portion say we're would customer demand I levels. it's trigger say, So pretty feel China which at the I to export say that demand. very confident in China, buying less would -- as of volumes

higher say, just not then higher up War We're auto, really I Europe, consumer of light Ukraine to see the I yes. that outside And pick the start in and remains improvement low any in energy just just we in Europe, seeing think as don't in confidence Europe behavior and would of prices inflation. very in

Frank Mitsch

a easier you Got XXXX will helpful. that at early kind helpful. some order look there at And be an of if the 'XX that also bunch curious you. set could if that suggests a an Any cost onetime provide color took quantify expectations of in then and the you 'XX. better that not be magnitude -- that very plant there's so for in be play up I'm just or to than That's of repeated, turnarounds 'XX perhaps of should would very comp. look actions role

Lori Ryerkerk

Yes.

from capture to more that the had facilities were to a some we demand seeing spend demand quarter. $XX not couple quarters as $XX And taken we're up. out of realize are up, will be think aren't to we those taking the increased What to were full. If out costs the million of lines idle really benefits does cut next that we second related we've we those actions offset If will actions still really demand. those softness and to running we this year would than pick happy is quarter in margin of of onetime year to continue come called I I picks fourth across Obviously, order money will quarter. ago, well. to the that million achieving that to again say third in

earnings either get from see or don't savings. way cost we'll we'll 'XX see that in So I as big in as factor it to to either it 'XX continue because our a bridge

Scott Richardson

other of kind focus permanent can would we I in comments, that we things on and say Frank, to things Yes, our in now be prepared out is some are more make going so the really more of nature, actioning called given the and and much overall ability in cost future that the then leverage of cost gives company. lower the fixed we demand environment the on base get us have. an to really the greater withstand sustainable reductions cost lower And fixed that the

Operator

Capital Next Markets. Viswanathan from coming the question Arun is RBC from

Arun Viswanathan

roles well. as the on everyone new Congrats

have if QX, [indiscernible] been EBITDA looking questions obviously, makeup. your for just million I'm at bit the $XXX never commentary we and around segment So from QX a looking here. think little bridge again, about 'XX similar But asked in

like $XXX and of lack $X.X million and maybe coming million inventory then the other including rate, at the year then items, of from synergies billion You're a have AC maybe uplift an you couple exiting a maybe hit. the run $XXX from incremental

billion and $X.X at $X us or puts between that maybe billion. So $X.X billion

Are we far that as goes. main thinking would is And you that correctly volume driver range? that the push about as above EBITDA

Lori Ryerkerk

are, Yes. demand and Hopefully, material which, out quarter. to factors a those can we'll able a of quite give We've called particularly point the at big what lot raw pricing, say, unknown pricing, cause I this would remains guidance volatility. be next seen we've better this year, as

Arun Viswanathan

appreciate on And can maybe I sheet. I one balance that. ask Okay. just the

And So leverage of exit reiterate restructuring as your I obviously, what well other redomiciling. 'XX? you is further progress there? maybe could just level as you target profile a and as the Do opportunities any expect lot there debt guess, you

Scott Richardson

Yes, focus generation debt. continued accelerate repay Arun, and our has I to now mean right aggressively cash

the We have repatriation, a out cash $X to reduction, maturities now we to with cash moved debt. we of -- reduce on generation, We're billion gen, $X last by debt. using debt almost be cash between able should we And repatriating net that down then talked ago. year, obviously be well to quarter cash should billion. on our north But reduce is going overall certainly, focused next and the debt certainly bringing net focus since

get possible. single be Xx our or that. we're We from with But to think need as the don't down adjust that's have down target focus focus as going to opportunistic quarter to maturities quickly markets a to standpoint, that where every bringing to marching a Certainly, on levels if continue I So change, we'll refinance. is really today. and leverage around

Operator

Alexander Jefferies. from Laurence is Next coming question from

Laurence Alexander

when think parts productivity kind through capacity improving of you the it's EM. also Acetyls guess, shrinking I and about Just the in the of

and your optimized your next the the upgrading in process improvements would greenfield X you rationalized shifting If years, far significant be start capacity -- or of is no at through sort are X, And network? if upgrading you words, think at need demand. through much how surge How of larger there we In about new point process? in what facilities this debottlenecking to just considering and other projects? could

Lori Ryerkerk

Yes.

would many reduce two over take many facilities small that you've greater Acetyls, call to now Lake, strategically expansions EM activities, XX portfolio the new a lot And us me or certainly also keep of as regionally. XX separate. the we've the and project And really the say work models in result. I at it, facilities very last would pipeline much the larger, downstream the derivatives at of made higher work those lot many, we done Clear on many efficient we we've as years also we have we've have. have models margins over and our big located but over done in number the same basically of a I including years Let them expansion the last, as adopted to actions had really our and in of say announcements seen Heritage volumes the years. a that

for think the I now us, mindset that's taking portfolio that same applying M&M that. now to and

finding yet team really I low exceptionally terms out. capacity capacity that's efficiently any see the with we assets we our means additional in good have strategic we cost any at to to what the network, a debottlenecks medium a of some in and and capacity. existing number really inexpensively very that no don't Again, sufficient I So time even greenfield in because of don't shutdowns have add to future and take existing our would that have need near for

Operator

coming Our Bank next is of America. Tiano question from today from Salvator

Salvator Tiano

Yes.

as a the want you are I Engineered of ask said, to synergies. bit, a the Materials shutdowns part little big $XXX million Firstly, in

target when this just I DuPont will why these the or market increase assets wondering original you will guess in that guess latter, conditions. And I synergy acquired were if actions incremental actions? recent do your So they to plans I'm response the given where the be more, in

Lori Ryerkerk

the the efficient acquisition assets Look, be. meet and normal to of requirements. demand that Yes, some question. capacity DuPont would assume or than we acquisition at that great be we the those than at And more time had of time know conditions more efficient or we would the believed didn't which we sufficient just knew others, less

opportunities as most So are had like footprint synergy, over of the really what build since this in look years. cost at we've time Celanese the our said, cost we've plants to flexibility, to structures last are footprint, and done XX the with fine-tune the how really like look we've needed all most lowest the I where the operating, most acquisition much to these their

that been taking now really able seeing overcapacity identify is to now So that the actions is. addressing you're where we've that us

the like those and they in the flexibility line were for are more and and Argentina shutdowns we've the that environment, in things temporary demand Some of leaving are announced the But near-term the Uentrop shutdowns future. things taken nature. to and response that more permanent

Salvator Tiano

Perfect. I [indiscernible]. bit And on your about Okay. QX ask also guidance would like little to a

comment, your But differ other that there's far the what I if not the expect reported outlook destocking I demand expect guess, vast your than normal, lot companies of a et most installing, I companies a made in of destocking that muted majority if guess, understood little chemical stock the different more think the a would most Why I quarter? have versus, in destruction the regarding is -- think than so the makes, cetera. of competitors intense you of you questions correctly, more the what's same, the whereas say here? I bit you a do I QX the

Lori Ryerkerk

can't going Yes. happen. else comment really I anybody what believe I on mean is to

As I our our based those seeing patterns. hearing what customers, we're we're from patterns that our hearing views order what in distributors, we're from we customer on with experience our order earlier, called big out

in to volume is helps of that QX half quite into automotive it engineered Certainly, we across and material going QX. be automotive, our solid to expect

quarter. the just the when our what the looking So impact we're with really dealing fourth at portions for demand other is of we're

impacts. auto really those say of our I can't be certainly, again, would different. But be one it So may why of share

Operator

from question from is coming today Andrew Barclays. Next Keches

Andrew Keches

Just to clarify the the earlier comment repayment. debt on

where in used needs the you way to that us flow XXXX? that handle running, said excess down just cash sounds you're you the maturities reprofiled. be it there remind you now get operating But can And your are? all you've So will can cash like

Scott Richardson

Yes. we'll on we Thanks, of Andrew. happen and part moving right get would we coming Cash $XXX start able that we of months. we next early year, which needs system, cash in be then once to balance in we'll be to right where now can -- minimum then to think the around expect And million. little X the that billion down be repatriating integrated cash $X.X is a north now, balance

definitely confident million $XXX level that get XXXX. that to to during we'll we are be able So

Andrew Keches

catch you past. Okay. Great. time said putting And then you Xx answer a a or on point? I Are know line the leverage horizon this in didn't I on the just the metric. that at

Scott Richardson

we're reduction originally said XXXX, where mean, last of get happens depends which take we why and improvement upon that cost and may look, close what macro another targeted quarter, demand of plans the everything reduction just the getting lot the with part our had to reason to plans, early aggressive bleed I we we earnings cost the from on we into And end we and then can to is do a action continue have. going to that. No. XXXX, controllable

revenue XXXX. get pipeline that in largely of start into doing, close and working the other of into yield is things. side as our are The side things further we model, And Engineered then M&M opportunities synergy revenue teams Materials really the bringing synergy to will project wins

plans which will at deleveraging we're the on speed So certainly able and execute pace us that plan. to help accelerate those

Operator

coming Patrick Citi. Next is question Cunningham from from

Patrick Cunningham

as portfolio Ingredients get there demand deal here? potential say, Food thinking a if anything from you JV? maybe separable not where How as about can similar better or structure out does let's actions, that the Is stands are you

Lori Ryerkerk

Yes.

approach are be disciplined to divestment. in as opportunistic to and continue think out I going to in called we've past our calls, we

the a more the assets need them. are both Celanese what the us future that is as then to number to other those But identify understand we divestiture than potential value M&M We them value target. Heritage of and really as continue as the what to will of portfolio assets from and look value possible parties well at we

to do, doesn't impact selective well would value for fair making but opportunities, so we as continue will about what we get sure look we it growth be say we it. for So long-term I as

Patrick Cunningham

would of on then achieve? Or fulfilling with relative expect COX. products containing of is that it. portfolio? the optionality Got rest there? recycled incremental of the And What you just just And premiums demand brand with do more be to the ECO-CC sort you

Lori Ryerkerk

Clear it in credit, just on think based really for basis. make-versus-buy and you've just best We methanol cost and I additional in started methanol Lake terms Look, use project the optionality. an on advantage of said justified that average it was of on actually for

the biomethanol not sustainable be markets for a that will will more the have project, anticipate products. market. we believe available lower say more sustainable will in so project. -- for that to time So be we products for we was started would I premium the much justification don't the Since for continued carbon obviously, the develop certain for footprint there And be that do products. I

take convert to is carbon lower intent it and further methanol Our downstream derivatives. that into

BAM will is polymers. carbon So they we really and more acid, where carbon able see that's BAE, acetic lower lower -- or advantage lower being other carbon. palm users low think carbon And to have in as carbon end the value

atmosphere. through put in as into wall, would've been your the the project, otherwise able of would think it on simply So COX this that to, paint we

we on footprint. see impact to that people where their that's mean, want premium I environmental the coming have is from who

Operator

On is from Field Pandya question Jaideep Next Research. from coming

Jaideep Pandya

on in nylon a monomers upstream really in of lot capacity is is chain. Asia. coming question and first the The There polymers

to your do in fundamental just how value you on us nylon could maybe actually run, the you portfolio? in That's product why So a you question. and be asset-light this And Asia more you of coming basis, capacity be in create long wouldn't would to add want it downstream tell want use like more sort first is more the polymerization. Why that in my differentiation.

and into next the again year there capacity, some this have the then laid been Acetyl And of plants ramping on in is year. China, side, coming

VAM in acid So demand how do see year? and next balance you supply

Lori Ryerkerk

question. the for Thanks

capacity we see earlier, China. on some said and I As stream intermediate in the polymerization coming capacity do

We industry shutdowns other remain have excited some about going PAXX. on. seen But we really

compounding. lot lot lately, of PAXX applications PAXX lot coming we motors. example, A on uniquely had of we into and in-place, brackets a products, A we've to mounts connector, Again, EVs EV, frames future of for for highly for and electric goes the in for is see sole high-voltage battery cell the are of our is And polymer. a in suppliers. where what's lot adding value differentiated potential

to have extend to think moderation see PAXX the that hybrids hybrids production. favor EV will continuing more we even in We EVs content. the be see we in of some extent So that and

only good thing us. So for a that's

more where infrastructure. really fire tend need all we of different in doubling, driven will And compounding. but materials. the retardants, a These of standard on But things. there highly in also through grade than we added then be They years, see PAXX And the at they by electrical achieved being by partly And X see you everything. again, building that's demand for is electricity that look tend next be be don't differentiation if differentiated. need you pull the strong EVs, to also to driven electrification value sorts out the

buy markets always look, because on. we flexibility the do And we going to because swing make versus want other see outages things of these and

have really optionality way they they building They more is didn't had a cumbersome M&M So single lot into this overcapacity, take-or-pay. chain a sourcing. very have because that this had of about in a

optional we highly where so issues significant We will we uplift. that PAXX think have can we resolving flexible have achieve these been systematically chain a and value

Brandon Ayache

Kevin, we'll as take please. one, question next our the last

Operator

from question John coming from Roberts Mizuho. today final is Our

John Roberts

cost, do permanently have upfront And closing significant option between maintain of XXXX, in or is need the Frankfurt difference cost start and mode? flexibility and start-up VAM the the permanent to the closure in and some onetime stop temporary Lake by you you Frankfurt a doing in excluding operating Clear of unit only there optionality VAM After a any early closures.

Scott Richardson

a acid unit. Lake building not new John, Clear we're Yes, acetic plant in a VAM

in did of years the we VAM Lake expansion and number So a Clear ago.

really current in network we VAM. So our about feel good

John Roberts

to And the Delrin prolonged market? the do you contributed process in divestment Engineered Materials of the think some weakness

Lori Ryerkerk

that to impacting been -- all say, of impact in -- terms hard don't Yes. we that's at really market. seen haven't the an I I palm but

Operator

question-and-answer our over end the comments. floor back of reached any session. further the I'd for to Brandon like turn We've to closing

Brandon Ayache

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

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

Operator

conclude does teleconference That and you. Thank today's webcast.

You may participation your at wonderful thank We and have disconnect this you for your time, a today. day. line

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