Celanese (CE) 5 Nov 242024 Q3 Earnings call transcript

Company Profile

Participants

William Cunningham	executive
Lori Ryerkerk	executive
Vincent Andrews	analyst
Chuck Kyrish	executive
Michael Leithead	analyst
Michael Sison	analyst
Scott Richardson	executive
Jeffrey Zekauskas	analyst
Ghansham Panjabi	analyst
Joshua Spector	analyst
Arun Viswanathan	analyst
Aziza Gazieva	analyst
David Begleiter	analyst
Aleksey Yefremov	analyst
Patrick Cunningham	analyst
Kevin McCarthy	analyst
Hassan Ahmed	analyst
Matthew Blair	analyst
John Roberts	analyst
Salvator Tiano	analyst

Call transcript

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Operator

Greetings, and welcome to the Celanese Corporation Third Quarter 2024 Earnings Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Bill Cunningham, Vice President of Investor Relations. Thank you.

You may begin.

William Cunningham

Diego. Thanks Celanese XXXX the Conference Third Corporation to Earnings Quarter Call. Welcome President is Relations. Bill name of Cunningham, My Vice Investor With me Scott on Officer. Chairman Officer; of the Chuck call today Board and Chief are and Executive Chief Officer; Kyrish, Richardson, Operating the Chief Financial Lori Ryerkerk,

distributed release Business posted quarter Wire Relations website earnings our comments on Investor third yesterday its and Celanese via prepared afternoon.

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

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

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

like I'd to some questions, for turn Ryerkerk call to up open remarks. we opening over for Lori the Before

Lori Ryerkerk

Thank morning, you, Bill, good everyone. and

Bill today, before emphasize few questions key As points. moment I wanted get with to we take a a said, started to

results our the is First, were and from below from XXXX we've benefit goals. persistent it expectations the is both into has to disappointing. measures Despite increasingly clear that been our prepared continue headwinds. actions value, and deliver for for and taken that by many And these the our QX outlook QX the offset our to macroeconomic comments broad

the we XXXX. the temporarily intend quarter reduce to first our Given of dynamic in quarterly dividend beginning

dividend our cost-effective we we've our shareholders, and to the efforts support carefully variety of most importance that determined this have and deleveraging the this of to time. a recognize options, we is While measure at prudent considered the

this environment, earnings actions additional have progressed will and capital of the we help we have forward and bold our us once look identified further will We accelerating generation. strengthen shareholders return to deleveraging cash to challenging efforts. To navigate take to

operational are actions. strong and have that of taking are right record excellence confident we the delivery and We a track

to high persistent and production in the am have our challenges to steps standard, disciplined for in our hold driving ourselves significantly long-term in resilience are and QX the in to position will are durable are face Celanese better confident of position markets. improvements company value a shareholders. to demand growth. no particularly taking substantial opportunities in increasingly believe us continue our dedication I leaving reductions, both business create match thank I our stone drive to SG&A. We their potential, the will that, end implementing for questions. that to we line and the actions further recover. With we In closing, We capture begins For open that we Celanese's want build long-term cross cost structure to now example, demand and an that for for benefit and we teams are we'll as demand slowing once and the unturned to and

Operator

the come Instructions] [Operator Vincent of line Stanley. Andrews first questions Our with Morgan from

Vincent Andrews

I'm sort as going us a I'm can of terms 'XX us point cost bit over some flow of wondering you're or if you so. you're sort divestitures next a year to the how assuming of cash delever little of terms bridge and could the just anticipating give your divestitures some well you the savings. are? what at in improvement as expectations But into in of maybe environment today, if just and 'XX operating and through from bridge in

Lori Ryerkerk

Yes.

to don't is what know Vincent, We be So focus EBIT. year. first environment obviously, objective next our on going the to is

we're make sure really is doing talked that way, our I focus on as fill cost business. the project as additional initiatives pipeline that reduction the to well to in generating really So things about

near we have taking, as level for million. $XXX today's typical year. cash cash more flow think we about one-offs steps because yield the A prepared at Obviously, level, $XXX of to would in we're million called some being that. generated from did hope this would with lot typical a additional that flow the we see comments, I out in would even a we more environment

And continue on we into remain divestitures. we flow who focus We free more to opportunistic we statement, never uncertain, figure our focused really do values timing assets on cash divestitures very find than is we which but why where our can them someone in is do.

I maybe any can to can So color. it over he turn Chuck, additional add and

Chuck Kyrish

we think deleverage this have Vincent, that throughout that's can Yes. the we year And and I course other we next cash any term sources. right, as loan And generate prepayable cash of Lori.

So talked the debt and a to place that can get strong committed of to Xx working that actions to continued significant use that's we're divestitures, that, We've lot that the fast remain announcement QX, EBITDA deleverage. safety, -- actions there. CapEx reduction, underscore to to focusing reliability, we we've got we in on in to do able we're our sheet is deleveraging this net on makes starting to as that. about right? as balance the dividend reduce underway to sheet said, be Additional right? committed to And is put debt-to-EBITDA, and remain obviously, to we've place intention we've facility balance on cash maintenance, announced, in continue net to our cost the significant focused as sense. And So Xx down what Lori divestitures deleveraging things we

Vincent Andrews

Lake. $XX benefit It's I of the read the million Clear I up going be was supposed from believe if correctly, that $XXX prepared in to third the comments I could that And up starting on was If there million asset. to just quarter. follow come

bridge the $XXX the to first, that and if million, second, And what correct I'm So is between million? of then correct? $XX sort is getting the

Lori Ryerkerk

$XX in Lake, still Yes. would of million $XX is we on range and we million in think on third in the amount basis. We about Clear as benefit quarter, fourth $XXX you the full then now million Lake some the called out first expect additional may a quarter Clear well. quarter the year

then that the of occur we so next as would And majority year see well. expect to

Operator

from with Our Mike the questions come next line Barclays. Leithead of

Michael Leithead

think at the Lori, of I bit start, of level, the to the high a abruptness and was in magnitude wanted year decline second half the surprising. a I

the help relative sort pivot realize management. better to versus to when sort you need understand started past deviate you just on to your you your of and how progressed really of us can help and and expectations, cash order expectation your here books months contextualize So your X production or

Lori Ryerkerk

Mike, Thanks, question. that for

give bit me you Let just a of color. little

into some and made we're I in half would the So things quarter, And through were things. quarter, say we across. particularly off when on further and course, discussions of we second bit we coming expecting we on and went with seeing specifically the as a auto, segments those June, our we and in lift of industrial. guidance a synergies we were to last the looking stronger were auto little customers, stronger see the continue impact other industrial, pressure

think autos, I to of they from as August. European example, registration XX% an and we look fell June if at

starting really see say impact of would that I So to big in August. the

I getting quarter, down seen we've anytime think were look which and if quicker soon. the European everyone, maybe OEM XX%. quarter you situation Mercedes from isn't Volkswagen, auto at Even suggests that third to builds second announcements full

through announcements impact the Stellantis from quarter, just to So way that's we the through went where the in frankly, started and we continue worked including GM. as we conditions we our really see and is the them to big as see U.S. worsen quarter, to where started

Michael Leithead

dividend, year but Or to X the level? emphasized helpful. the prepared appreciate will specific of Then day we level initially nature see in you you leverage I temporary dividend so Is at remarks That's or on we're here, this there to that long Okay. target this the or flow want at you're next reduction. earnings the a how keep aiming how here? cash at over or need evolves the

Lori Ryerkerk

parts And that the we're getting current that right seeing market to conditions at these now was after cost-effective take of are least, the it the our continuing need most along leverage. looks Mike, with and really given is that the prudent actions. determined we And Xx this reducing focus XXXX, at dividend and the of consideration, point options. further laser-focused into like the lot the fact board, on most to that a felt early

really will where to It's to driving quickly Xx rapidly as remain. that's So activities as deleverage can. our focus really we

Operator

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

Michael Sison

into quarter the When are the why? back? for does Do And head have you to I lot a quarter? Or a you we there. look come those as If EBITDA and the add -- getting write-down look back fourth a for sort one-offs do of EM, close take that of first the not, at M&M we of sort business?

Lori Ryerkerk

Mike. Thanks,

the me Chuck address expect a we expect are number to I of the it valuation effects looking how the that to and of let mix one-offs fourth expect Let your affiliates our the the mean, first. the talk to vast would quarter. -- we so about see turn question and right quarter, of back inventory, majority there to from And effects, through go me in that first we the second come down. destocking in over half at we

Chuck Kyrish

did tested our level, Mike, So tested yes, with record was at Materials live on all intangibles. is materials quantitatively X do names, help and quarter test we test record year you, we the the impairment Zytel. goodwill when same We individually is unit trade remind valuation of we Engineered trade big that million right? an $XX third specialists with goodwill that reporting names indefinite not so engineering impairment. we I'll of level, and did and also most each the that's did of a the an process,

cycle concluded our of kind that So third testings. those of quarter

Michael Sison

as earnings your you XXXX. everybody up in chemical and do you If some upside. get to the or have stuff impacted Got a markets else do should think is you how And all some the EBITDA well, quick improve about doesn't think environment shape if year, negatively. end you next pretty XXXX, within it. have control given follow-up, Clearly, in

Lori Ryerkerk

performance, et product will with at -- Yes, being well. look X have you seen quarter-on-quarter if performance being year, cetera. have things as I this we start next Those first quarters synergies our true be in would synergies by Mike, year. additional the driven improvement of pipeline, next We'll over by driven the year

that's market it's of I speak help just with can really around to questions of simply any And going XXXX. that interest, ourselves is lot see or control whether we terms there with would control deteriorate, a to reduction there authority putting into take we what the really grown are lot a uncertainty there business It accelerate current growth support combined just has while pipeline. to a that macroeconomic, I are versus trying XXXX, the for significantly programs, effort much sufficient not is we That, so to to ago. But lot out expectations. think about of cost a early in in to environment our we say gets better steps too We expect. of year this clearly, open project what XXXX

Scott Richardson

Yes, Mike.

close with we that we're dollar as XXXX, focused that go So the synergies that, into sure to we X we is spend targeted every priorities the Engineered the and organization. invest. deliver as the that is have three, to. that side we're one, reducing we've X where are and supercharge Two, cost, Number pipeline. is Number we on we that of XXXX and and that deliberate an very being on number making make addition Materials committed things, sure in synergies scrutinizing already

we change this be we to that's able of got Chain some in we increase fourth to to have been know integrated driving to But upside. with to to that to enough some seen demand side profit continue upward work there. And the we're we the penetrate Acetyl aggressively in the ensure lead the different share But from we've that challenges. we focus single be continue good a not nonautomotive really fully the things, every where on on metrics, And we had demand X And area just our of sectors downside if then priorities. to it's is the have to from of have keep While to week customers, the we've one wallet offset that's leverage going going those more day. landscape, to to model next. see

So that are own now. really on those things control right is within our focus our

Operator

come line Zekauskas question the is from Jeff next JPMorgan. Our with of

Jeffrey Zekauskas

in What that? would in not diminished longer-term based of operating And cash cut you flows your what have the dividend? and consequences expectation 'XX. And cutting 'XX been for the caused is dividend

Lori Ryerkerk

of the answer to first, part is for mean, because Jeff. it's of than had the have we is macroeconomic on actions, our our I cash expectation EM to the had still planned including for. these challenge long-term this business our we and are the the businesses. recent plan of me that, we deleveraging challenged and different Let businesses, taking been. in And both no demand not believe that all getting we performance current but long-term Look, be the The acquisition. conditions expected flow deterioration are try second we've Acetyls really we

looking of dividends. deleveraging really around drove was this business. most So do we dividend, cadence and really on at wanted decision our determine prudent the that And to that's did get the for to way cost that the effective what back we

Jeffrey Zekauskas

secondly, third And for roughly $XXX your auto IHS the was already you downturn really the auto million then expect cash down that? for Okay. wasn't Europe What's this in secondly, unexpected? mean expecting XXXX? costs I in in I your in number markets, for that July. think you spent year, the in And to restructuring expectations about Europe quarter spend production

Scott Richardson

Yes.

to then, I Jeff, question I'll publications we we down that made look, registrations uptick and and started come second there the the look change July flip. talked mean, turn as quarter, at. of over Chuck. was did our data for variety was quickly expectation a in that it August. the car about August. there to still answer And of of an me Lori Let we forecast slight And to the that when a then see other are there of the really first, early relatively in And part acute month end and of

I So materialized. really has in flip that what the we there bigger of is was where saw expectations. And kind think

And would a of I in we buildup a the was half of there QX think that if inventories. saw in year lift. an be there expectation second the

the and we've sales and in builds inventory that here into so the lower what of customers the half year. is preparation part the seen the And of now third second the end in quarter lower for quarter fourth destocking in of

Chuck Kyrish

cash to $XX synergies, those remain are next million. to about going the on off cost year probably M&M, drop Jeff,

from Now the reduction we cost costs we that new announced. will have some cash actions

of all than up, And cost no be cash so close million, right? $XX if it there's synergies cost actions, X-year think that on cash plus you less that's -- this than the cash when to somewhere we about payback, talked a I year. greater So roll total cost pretty will spend

Operator

from line the Ghansham next come Our has question Baird. of Panjabi with

Ghansham Panjabi

to saying as comments have the prepared all et comments your this peers your to is. in autos, back None and is truly going that cut and weakness that surprising the also Lori, morning, cetera. China dividend relative from but what of been well,

XXXX there? are is sort the dividend given So of more near plan? you cut to dynamics? going or that's will, you component, about the anticipating your out more function we anticipating back Or of of trend term, to How those if seeing a that a think not relative a line, you worsening much X recovery initial uncertainty just in the should

Lori Ryerkerk

Yes.

debt flow quickly 'XX is EBITDA sufficient that X right? I the it in free we think the aren't performance in as in One think reduction I would for as year. cash we we is deleveraging experienced lower. like, about parts. just in we've is Our next have we've cash although the and 'XX, had due

time. able We there and pay then to for towards And And and that. the the to debt. the dividend to our is it's We feel haven't much deleveraging way at stay at prepared if track And this by to uncertainty. on effective you cash additional is again, been 'XX prudent so look be that reducing most with cost do prudent beyond, down plan.

Ghansham Panjabi

Or of some going Just delayed in of back securing behind that. relates to dynamics, the of million Is to -- adjust program process term 'XX that the sort was the $XX some of assuming then the to baseline operating dividend loan? And was trying context that cut as And you still the volumes? targeting recovery new that part of to Okay. on get separately, draw that it loan, are SG&A. to then sort terms onwards? 'XX,

Lori Ryerkerk

answer and the So Chuck first part, can second let me the then answer part.

that gotten our cutting we get of we better current system also believe SG&A It's get as to -- identified the million So new is mature, also through cost systems adjust towards implementations. the now efficient additional we've more organization more demand. our our $XX as level

-- we sustain an We even that also we'll be though will demand be level a start recovery. if it or to believe to see will where area some able

Chuck Kyrish

we're Those this your to not and delayed doing balance is Xx, as place in was are something the dividend put help on as question. not fast to and together. draw other made bridge Ghansham, us want The loan because deleverage that commitment X tied is cash to. term to those a sheet we we maturities

Operator

Spector from Josh come of questions line next Our with UBS. the

Joshua Spector

power about this supposed I view level, at you I if at up earnings the actions bit were some guess Engineered but were up, talk a on fourth negatives look to of wonder and that's volumes your maybe you're if XQ, synergy a quarter. year-on-year chunk in just you the savings Materials I of point. before of you're the EBIT could be seeing bigger the of taking

maybe around are some the should half what the something and share we more pricing you puts ago? or of about on of if should lower we X heads can or thinking if talk look takes there's second the our at that impaired that of side have either loss are means back than and about some things, year thoughts So and a thought earnings structurally nylon be around

Lori Ryerkerk

So X lot of that's thoughts a in question.

view about just So I of see EM talk the let my business. how me

most Engineered still business we the EM has we business, feel have long-term our changed. the So not unparalleled of the Materials. I view mean EM of portfolio

improve a and demand to very who buy This all very improve from structure way, products our structure. customers is want cost in projects, customers, we still business, And our fundamentally to in by demand innovation into new as into who good new drives a well those really that us. growth have new continue We growth a while disciplined applications. as

PAXX what with certainly on differentiated And we've really this done. I a of the oversupply So also seeing that's point you've on that all wouldn't nylon. focus the would focus challenged just compounding. we're on is polymer. is mean an the non-differentiated take PAXX I I at steps But seen turndown. polymer, short-term say is our of why us

are if Mylar temperature or we in parts this than thought the as such less say we would PAXX even many originally M&M, other for of time. particular, nylon Hytrel thought where or acquisition of Vamac the be they'd I or outperforming at is high

see and the the as So once the of being we in conditions. to aggregate, strong it be portfolio value of M&M value acquisition back still EM the as we as ever total get a normalized more demand will

Joshua Spector

the Maybe X then about quick thinking guess, follow-up, XQ. within Okay. synergy just, I side

guess I or Obviously, that So in flow-through the volumes see here things in some sorry, later XQ context in we up. is the but deteriorated -- XQ. didn't were quarter,

us So ] to what were that minuses you up think in offset that? the only what led the about [ synergy, quarter? If the XX%

Scott Richardson

Yes.

the basis. inventory, timing that well is I think there on as some through rolled a Josh, has around quarter year-over-year both in

a pricing. that Also played role there. So

out, called we we've the grade in pricing, other bigger standard which offset. been seen As has degradation

are X biggest So I the chunks. think those

think on positive I year-over-year spending up price/cost when you volume look the at mix for things total, basis a down. year-end

some the there. currency another and we've currency, Offset inventory. full quarter year So both turnarounds year-over-year, headwinds then in positive and in on had

think where that's So offset. it's been I

about live as we're on going And where we're the business today. aggressively continuing wins. corporate actions just And so take level we but talked Lori work earnings and close that's mean to to and believe doesn't about, pipeline in we drive are with both well to why heavily cost power, do the we then in the talked as going that the as

synergies. we about beyond of and So synergy is one talked revenue for 'XX the areas big

to to power And going year so continue that need possible on business. to into uplift of next the the we earnings deliver

Operator

next with from the line Markets. Our of come RBC Viswanathan Arun Capital questions

Arun Viswanathan

again. Maybe question I could ask the QX guidance

any seasonality? helpful. into to So industrial much drawdown that could other buckets if QX. in inventory that $X.XX incremental from some markets, or of end down Maybe and going we how about around the weakness for And $X.XX think some associated maybe with auto is and you out or be QX $X.XX break maybe would for

Scott Richardson

Yes.

I it's seasonality. on things, the So Acetyl side of think

it So range. call million that roughly in $XX

that put I'd Arun. seasonality, So to

are On the out engineered anything. the through things, that's we prepared timing there corporate of comments. where materials looking then the than cost really side And more flow we at are and there. And of cost in kind it's big called those really of buckets

is $XX little of number. So about in probably destock seasonality million, a that which

mix which one really about inventory driven. seasonality have seasonality is We down the got is the you've and which million. that is balance Affiliates there. $XX costs, more absorption are And really then $XX all Again, of million.

in to kind put that of maybe that when about the that, in the Engineered $XX the bucket So number. we than bit million, there talked buckets, you from affiliates seasonality more little in Materials in mix a acetyls it's addition that

Arun Viswanathan

Great. That was very helpful.

QX. have have bad so -- you taking that those to necessarily then, QX, that in and closer into taking complete -- look repeat $X to how So when you actions you back some about have to maybe that these maybe take? on a Or And you or into inventory anticipate QX? QX that how you you of also back thinking guys less could that evolves won't to drags, allow you are side you step you won't just that the the so do seasonality further in get actions and the inventory are may that is so get

Scott Richardson

we clear and take bring that to what destock a of the rates at plant Let to Chuck matching kind where for perspective with looking me given here it level, turn is we've And are I'll from pretty inventory a year. need with of our seen provide we've things production down, is Look, and inventory really wanted on flow reduce details to constantly are start high we been down. levels to at. level where through. This demand inventory a

in book And to the bit little it need We we looks balanced a more at depending little fourth the and then what like QX more plant to between to QX, that rates get we're when a QX at. like point. order heavy, where what look we'll on expected quarter bit and split be given look

Chuck Kyrish

us to generate and Yes, deleverage flow-throughs, cost cash I flow here going you it's sheet. this will And could but balance those really some for manage we're to us free flow, decisions. think publishing cash if for see from make some be generate these important important it's that to P&L to free cash of flow

Operator

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

Aziza Gazieva

It's Aziza on for Frank.

Just sitting Chinese start lackluster VAM decade capacity. and off the here thinking want you take margins to at with with are guys it How might demand long low a new to absorb?

Lori Ryerkerk

Yes. reabsorption Look, called now for We've see is really for also in to solar and when EVA things into the construction, start destruction for particularly recovery. I derivatives, mean acetyls China like the we demand reduction some seen seen the depend think for I other. the and on paint out market coatings quarters, going market. demand to we've we've in many

going on it's like the So of this -- to will shape point how impossible it's can demand now dependent predict pretty more quickly be It really at that forward. reabsorbed.

Scott Richardson

team that continues maximize of look where imperative it opportunities at product those we're unpredictability, Because daily the where are. is to and absolutely that selling

downstream VAM, seen moved depending emulsion, down we've a given powder, continue the further an sell or very on derivatives. and And to we've we'll the in at better are into up to at. want pivot acid, for, so And then is on downstream of challenges where we the how those is and being opportunities looking team into VAM VAM. looking And to molecules acetic the monetize it surgical

Aziza Gazieva

the quarter just Understood. and early are your read XXXX. curious, for on fourth expectations was what And to I

Lori Ryerkerk

fourth or quarter clarify, in acetyls. quarter Just fourth to for general

Aziza Gazieva

the general, raw and Sorry, expectations just for the company fourth quarter in XXXX. for material

Scott Richardson

I we Raw right depend lot is can at but upon as that are into at fundamental today, where dynamics Yes. will And think the go material obviously, largely quarter as now a stable things energy fourth for change. look we XXXX.

to continue remain flexible. we'll So

is elements inventory year. to of will give next with raws us year-end on flexible as here finished as ability happens the goods One material focused that be we're well on inventory, which what depending reducing raw the at

Operator

David Deutsche the Begleiter with from come of Bank. questions next Our line

David Begleiter

Lori out and to strength the back business on perception, weakness. a being area EM. an this the from project to of supercharging the Scott, called portfolio going comment used my now or This pipeline be it's of as

So changed position it's obviously, perhaps that, change business has be to a of the position from strength what's to underlying improved? gone really DuPont, in a that with needs the but

Scott Richardson

us. proved up pipeline The dated, still have is no the that. there's stats for about and of of And over strength, The being good is really size we year-over-year model that XX% example. that question projects a position a

project rates the acquisition. up also are Our win since

the so with And seeing the of projects that's those volume now, coming issue is of each though, smaller. we're is amount

has amount the challenges from the we've addition, perspective in of In a seen pricing base standpoint. come both volume a and

the So we're to needs enhanced of that be some and to order be to needs offset pipeline headwinds seeing. in those bigger

feel more we're that customers like can a and It this strength way need of this So when continue with We going because we is where it talk the generating not we pipeline allows opposite. the and invest more, do be it's in about supercharging, a successful to partner resources on us to in be business. to condemnation things just are, it's a to environment.

David Begleiter

on strongly And Singapore into just supply the Scott. do you Singapore, China, can this brought in be production? brought online That's for -- trying back can need or new be unless helpful, Singapore given to back to recover

Lori Ryerkerk

how to the do market our produce Singapore an like online. and back to very that have still economic in portfolio line especially we'd remains important and we about mean, with what and run, and I Singapore into will we optionality part of where non-China the we produce much So is what come market. expect Asia into

so online continue needed. we'll to because and is that profitable, that expectation expect come -- we it our so run And is do portfolio as -- and

like have much we of we of structure and our the can contracts using capacity. our acid more we because swing But swing did the choice kind of the acetic we'll in now past. make Fortunately, More that we're flexibility as more than becoming VAM Frankfurt our there that capacity. of Singapore more, see

Operator

KeyBanc from Aleksey questions come Yefremov line Markets. of the with next Capital Our

Aleksey Yefremov

volumes? they're to less is EM, the Or in Or And QX? prices? this selling is lower And that selling at you're at stable prices fall point? you're that continuing bigger issue are it

Lori Ryerkerk

it's see, for to issue tends let's the has issue able say it's keep of we're sell is around products, to standard So the differentiated because margin. and both. around pricing more volume been the main around impact grade I products would volumes, an sticky. -- but be the price But for to

Aleksey Yefremov

Okay. get year-end? in inventory it that at level you pulling seasonality you rebuild in in XXXX? back also normalized you the QX need inventory EM Or And normal are may to below such to your

Scott Richardson

not expect be Alex, we'll a in I we levels, demand below see unless would normalized levels. change

Operator

Our of next Cunningham from Citibank. with the come line Patrick questions

Patrick Cunningham

follow up Are growth per or approach XX% getting there or the in has the applications on shift customer traction? see increased base pipeline. project how value markets I auto OEM any to given most secular It's And recent any weakness? project the XXXX. where the you're strategic encouraging thinking wanted to you change since as

Scott Richardson

we're important. more as this and think of continued in Chinese who's about from in with successful, change I still Well, growing think OEM China look, seeing perspective. an winning a mix OEMs where there And very China winning is in being the where we -- focus

and of of if cooling Celanese's had much on applications did we're bigger in pipes just this with And the well into Engineered really areas We're like way. We models, flexible on things traction it. We've we side recall, getting have portfolio on covers auto really synergies, things one non-auto nonautomotive like heavy those. recently. focus on focused of of side in market. had our M&M wins then the We've so a that some some lightweighting historically in important around things, the most you products things, was management oil in good Materials seen very thermal but the wins EV houses, the

athletic been focused wins that we've recently, some products big heavily shoe increased performance. there creating, Just running around high-performance applications in with with shoes particularly are

good those And opportunities. really uptick, and are so global

move to opportunity singular about the globe as through the on focused we can just that so And much quicker. shorter we nonautomotive win, working team as the get with possible nice across a in heavily time projects the is sharing of having a not these once be translation around wins tend these The so pipeline penetrating each frame. thing much and is that

And non-auto go into heavy and so that we around that's 'XX. why is important really as 'XX focus

Lori Ryerkerk

the that's part add, X going would and current seeing And a the requires we are talk if we're build-out. that electrical about that, think very demand double And about electrical the as build-out of Scott next sectors to didn't you of of that for polymer that one demand is that the of of electronics. outlook over years, pull-through infrastructure. about electricity, is I and lot excited

Patrick Cunningham

investment-grade rating? to additional to How steps committed helpful. the do consider you is enough? believe Would this rating? equity current Very taken issuing Or preserve you Celanese are you've

Scott Richardson

fast we We're committed sheet to Xx to can as get balance debt this net as to EBITDA there. to deleveraging it

action determine of As Lori support of environment to the variety to that our of reduce dividend given the mentioned, announcement prudent options we've was and intention that what goals take. the assessed that the a challenging support the and Board the our to

Operator

the Partners. from Vertical come Research of line questions Kevin McCarthy Our next with

Kevin McCarthy

notes follow prior If $X take $X.X But to 'XX got that $X.X and we'll look up unsecured the March delay in. in billion beyond loan, care question. in presumably Just the that term 'XX your in at billion I of. of the senior billion draw you've term structure, on

the EBITDA. some ahead. to It based got heavy of glide So like you've X lifting that seems to leverage turns path get goal on current of

take a pressure options would And so consider the your of mandatory ongoing the deleverage? to divestiture convert of off and/or you some try efforts to acceleration to

Scott Richardson

ones we as the divestitures aggressive could Kevin, timing make can, and working the that we're uncertain. Well, as be sense,

what deleverage and balance on our and outlets the divestitures, cash we'll you mentioned other the our structure Board of and look structure at kind see reduce capital took times. is approach like path these with outlets achieved we're I going and risk the for the we think and capital of the to thing the and on dividend. access looking again, that all in So We've we I various I category that cash right? capital generate that of to prudent those capital we -- falls markets, to with markets, of have maturities. got cost to various intention in to things any the access kind and considered, mean, look the that things other think through and the forward

Kevin McCarthy

particularly in have thinking past, I know, asset a your hard we're so to a the are as term? I'm footprint ask chemical I if question, in reexamine to second speak. more to cards me think anywhere to Asia. companies near the you to like a in footprints, look Europe, do world? listening we As of you Lori, the plans of may, years for I Singapore lot Celanese to so their asset are speak, Or sounds reviewing as took so to it you're the broadly going dealt, a keeper, at comments, play you would though, like

Lori Ryerkerk

footprint over very always here, almost footprint look I'd the decisions you every have down, if Celanese optimization, have years has I've known continuously. mean back we it we right. even been and about shutting we around That's reoptimizing being X been our something at made for aggressive I go say just year.

what We is we've That shut normally and does we have what the be Again, our acquisition, that look we where demand basis, like. going seen us make on are and assets Mechelen, will what Argentina some us it's in we already XXXX. that announcements world. intro that seen given profiles look now facility are some and process been and reevaluate you've footprint made, really through announcement other again. added around right continue optimization a you've in Now from already now have combined the And around our we customers will for And the because looking of facilities M&M down constantly footprint reassess do. what the the which like? activity

Operator

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

Hassan Ahmed

obviously, I the always production guys And seems A of at good and it kind mean, done production a question year, like. around it -- you commentary, this with auto demand. guys surprised have you very the of and from matching job seems QX QX

and just guys particularly customer learned thinking, off seems that COVID based order changes broader in of the lessons leaner how through are books, inventory in customers forecasting buying a customers significant seems leaner levels. are around it patterns how be keeping time. appears patterns It you or through looking buying to forecasting more at are just So question just in light what of

those Or this So and are how just of you -- sort of a habits And environment? macro in? matching are this with terms do erratic of basis? demand forecasting your production are customer on we're in in that function think go-forward sort you of you sustainable a guys adapting

Lori Ryerkerk

which the we question. Scott look situation third first in quarter, broader the in One, say, Let we X inventory an have because upturn built is to as our me inventory indices out customers really by some inventory as if the really, half second doing an just ask and I the in well we particularly would half majority footprint for called of expectation, had you building the at the the But been of address optimization. were we across had being reasons. auto

now, normal production there. midway we So And if When that acquired to quarter, quarter, new will. still and building the demand we level third but down anticipating through we of saw facilities shut a we so builds, we got into then sit we raw were inventory dropped when slowed customers could we down you switch facilities. really materials,

was a inventory in of the around quarter third we raw. built So the lot actually

dynamics are is forecasting specific fair a changing one, looking around very is because we But how slightly. it is which some customer quarter. mean, question third at there's So your and I demand

Scott. So me let to that hand

Scott Richardson

And the have into all the Hassan, we quarter. M&M very system first business Yes. on with that to flexible. Celanese the coming now one in system we're remain

that be We or happening now. the bigger really China. in also thing from the kind at of how are That And and mention on change more rapid inventory that pace optimized user, of now. we're Chinese there. taking the you change process the in of automotive particularly a year have you Hemisphere. The who's that make then that are driven that last very customer over at in overlaying of a less a where winning, and one Western and looking basis OEMs didn't we we through we network end base, run an also right our changes the to we're seen is the going rebalancing has cognizant with of make to rapid We've share feeling alluded

go Asia. we've short so we be make manufacturing footprint it's we our as product. and we And need sure got that term, little forward, adapted the And assets and probably going to we how to at towards operate least that have a where to heavier our in

very that making something respond is optimizing is we quickly and the focused needs sure on. very team those that much assets customer And so can to

Hassan Ahmed

around obviously, follow-up, Very a a questions helpful. of And lot as EM.

Chain despite a of gears -- seemed So it in reading Chain. change obviously, headwinds of little to margins of actually sort What And basis. that gives brings. you are talked sustainability sustainable continued sort the margins in segment to I move those, strong Acetyls the a remarks in and guys sort those want guys those of that you go-forward the prepared reported on bit Acetyl the macro comfort believing The you guys segment. margins about the level guys within you

Scott Richardson

trade cost and it we've the have how curves global things value Yes. what lot seen upstream sit is of Hassan, and the where on transpired the chain. of flows and I particularly part think global a

the that of further exhibit I of been get to that resilience chain. you the lot do the has flexibility than have value And amount downstream, able a chain been it part we've that believe then part of And as before. so in is in more ever we

more has team can the choices pivot, ability so And a enhance does drive on they earnings which our where to lot power.

be. ranges kind of be believe sustainability of that because headwinds. of the that some may in think these we margins do is we And just flexibility, where But offsetting they'll that

Lori Ryerkerk

advantaged is is advantage our cost some believe the U.S. largest X gives lowest technology we would as plant for with acetic very we lowest additional which well. One an acetic I carbon a and the world which plant out in call acetic And acid there. we advantaged cost the Coast today. do acid factors. us And Gulf have in cost footprint acid have then --

Operator

Our next Blair questions of Company. come Pickering, from Matthew Holt Tudor, with the line &

Matthew Blair

segment this Acetyl and as over would U.S. EM you the segment basis, of on well? Or be back all Chain circle include are in also to sell Asia could or kind a we be to you Europe? looking they Can the more and say, then asset would targeted to regional and assets the potential sales

Lori Ryerkerk

had much opportunities we it call maybe just various someone Yes. specific at have us Well, we've fit robust specific say necessarily at these been that Matthew, portfolio we seen the ventures to thanks think our the would or sizes no we do tend for even on divestitures line last list joint past, more more. as and with very as or question. look values we a multiple looking talked a look for divestitures, where line assets about not of in longer in I as possible quarter. that very you've is with a that product

it's combination So things. a of of all those

it's So because focused there, throughout been like has wouldn't I But various Europe. region, on say regions. that, very our things optimization really on even any us one footprint of do focused you've although seen

that do be where the best value us assets for fit others. So just this really of what's is have at more forward looking going and may we to

Matthew Blair

what It Sounds like the far good. seeing you're well? some European so the auto also fourth October, And you're in car new match picked be registrations little a little market with looks of in bit the Germany Does markets in what other but you quarter? might up seeing sluggish. could as talk then a about that

Scott Richardson

forecast We've data, that our we're guiding taken Matthew, into the most recent Yes. to.

Operator

from come Mizuho the Roberts Securities. with John line of questions next Our

John Roberts

XXXX, Acetow. a manufacturing or back? environment Celanese drop to opportunity a structure Blackstone merge maybe to and Back allow has that Do might enough in the plans different you think like JV come changed

Lori Ryerkerk

to do lot, the We for place a don't see opportunities it we've full Acetyl say think Chain. any Yes. been mean, John. for Acetow. into there best integrate that things this We've happening part since back still talked would I the the the able That value about we chain that's us it. prevented as in I of exist terms and And from the regulatory concerns today. of to operate the allows in think that 'XX it maximize chain. I of

don't that, changed. that's see I So

Operator

Salvator come America. of question Bank will Our line Tiano last of the from with

Salvator Tiano

showing planning, are to actions want of comes What coming builds a that course. builds moving day QX as of So going of learned? check it I forecasting bit. things when points, all as one and IHS numbers, have to lower. different guidance guidance what data little lessons questions auto being Or I forward you the several are There firstly, the your auto other, to because said the earlier suppliers S&P, was back results the that at are the take to such the were including outright recognizing about very of financial intend guess much

So Chain it taking as have was year. acetic where margin, account whole the at something the next, discussions that Acetyl the beginning essentially, I it of was about been year and which lot a the which to should of And I this and haven't new like goes same guess, VAM think much expected. supply acid we've didn't -- had appear

to be and So hindsight, the in are what done what can -- the that forecasting improve here? given

Scott Richardson

Sal, Look, into data sources -- to inputs our to use variety to the that drive we're of data forecast. continue going

also customer as well. forecast We use

because periods that we is demand I that in more one adjust this things we to in able to where volatile, statistics forecasting drive changes. historical just much how continue be to and the environment is think of we'll always use adjust

we take we make will that And as so continue our forecast. to into account

Salvator Tiano

VAM, on online next a on to more is year. for I Asia. And and wanted both coming seems Perfect. bit Okay. clarify little just It to that there in us asset capacity

Lake you down So million XXXX. so contribution, in whatever, or cost-cutting is $XX or XXXX we should fair the to get Acetyl other the Chain versus Clear absent expect be other, measures earnings say it to that

Scott Richardson

of make assumptions Look, as yet. any I wouldn't

will when and ahead. everyone. get everyone expect at. be levels We're we'll call see we earlier, in in thank as year Lake. As to going about, of Lori next thank color like And to where where today. what from that provide to kind is the and still the have would you, for QX. Well, more would to margin listening on we into just Asia, to talked particularly Clear to demand early mentioned we've it's looking get see We get we

call the call. please after follow-up available and Diego, we're for up any close go always, the questions. As ahead

Operator

Thank teleconference. your appreciate you. This We participation. does conclude today's

lines your of rest Enjoy time. your You disconnect this may the at day.

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