Celanese (CE) 4 Nov 222022 Q3 Earnings call transcript

Greetings, and welcome to the Celanese Corporation Third Quarter 2022 Earnings Call and Webcast. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal remarks. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to Brandon Ayache, Vice President of Investor Relations. you. Thank

begin. may You

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

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

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

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

Thank you.

with from question-and-answer line will is be question Instructions] of your coming proceed Please We Our now Josh first [Operator session. with a conducting Spector questions. UBS. the

rate? when that to next are business you this you for get give you on how corporate the hi, Yes, $XXX if to few on from what thanks us DuPont run segment, has that Thanks. at historical the embedded you've get M&M gave full major EBITDA million now here, some context an performed. year, maybe that days some owned of performance that then can I the the lifts current the wondering from guess, takes year not also taking and to And perspective, my there given it if question. the a pre-synergies, asset also comments look context for

so Josh. that. let of question, can actually me see a That's I questions, navigate all lot if for Thanks the

what it's So is Delrin in fair or quarter in DuPont apples-to-apples M&M quarter line expectations well. think in of even that first and because I the business We called quarters, mean, in performing necessarily is think the out Obviously, report think as saw they do quarter, like performance. our shortly. fourth include reporting in in quarter. quarter not they on for not much you third numbers line does for But two I to say, we with And us is quarter. fourth how performed the mean, as XXXX, well. quarter, fourth third I will with think be fourth a get low you seasonality if about typically I I the it

We DuPont same the to expect to seasonality. see

on asset we've the continuing M&M the the see had DuPont's well. with I fourth concerns of in think we quarter as some performance

So, I three say, underperformance I of clear a it's year. for - again, their performance, there's view we days. see think reasons M&M's this would a couple But to gotten as of it's get only been we've

not And as market, a as and things flexibility market the standard dissimilar really they may think think Asia what maybe and have upside respond So on the more I to seen overall, we've I dynamics little in the but in I commercial believe more than say that a It seen. more Asia had and Europe in pivot bit than had need to poor Competitive in really backdrop they've bit business, Europe. insufficient have. is of auto versus which demand quickly business. the we also, of from do would we we've the impacting differentiated different to

a it boils had the margin headwinds, for in lost the with compression I And cases, really are experienced contracts. didn't significant think been this economic environment. been in actually also they've fact that, than foreign - nylon pretty write prices, surprisingly, more they we especially haven't I fact to also, that contract they that we've some it's some for which a bit adjust competitive, not different a stay occurred, than downward, currency way challenging due they exposed bit area, They've sourcing they that's raised volume. their price to in think the the current they're there's are has and and nylon their down

rest of moving next each the moving about and quarter the how into fourth we'll bit So we've now about forward if closed I'll a these. that little of we think address year. into talk

that's So foreign alone in on over us the and December November of an $XX assets. almost impact headwinds, currency on the million for M&M

at think commercial I we're looking our in currency exposures, address so so we denominated what's practices how in the U.S. we really sales local optimize - what's do dollars. and currency to And

some of like the us our can to U.S. which use debt to more rate lower yen, our condition currencies, help the rates of the or the or overall will that Company. We euro converting the also yuan dollar debt borrowing of look help financial lower at our will

M&M we be purchasing capacity. Celanese able raw really we have some exercise I at polymer requirement, key think to will to of we the within when look materials the utilize some flexibility and of

fairly M&M materials take-or-pay you for has currently it, if raw large contract So nylon. think about for a

Celanese, actually better materials, And together. but been for inventory. of for they've building be, companies using production inventory, net-net, - lot excess can We been so that buying start which that will a both that producing they've using

contract at contract new out more flexibility also been a think of the Xst so the will that in the us has give going This actually optionality deal, we new raws I and place forward. has remember of at there for come is requirement, less take-or-pay XXXX. and time called will the renegotiated contract

we let transition went went the some about the flexible, start as, POM portfolio - through a starting So with in this through transition let before run with us few to larger much we commercially think Acetyls that. us ago, much element more year - it it like one I a way of really nylon agile integrated, like years

our heritage volume but assets to products. I Celanese other Celanese products think lot really side, team of other nylon, including and the M&M cross-sell, opportunities have combined just deploy the to On commercial not a we between

So are there's gotten look us. where really we've terms products only a companies to our going, buying overlap XX% in about are from as of at all the that of

more was a in some really pricing what Pricing, versus that there. had to So into again portfolio companies to us go and we been entire a way. in do it compression each space other cross-selling just traditionally. opportunity think really large has the for there's margin that start actually We differentiated the in

you is like took everything, M&M common to fairly analysis response far a our it on pricing So so at a couple really to tranches. look look, in different if whereas we

always we products, opportunity do push have that. pricing because differentiated to really we the for So will

to is dollars we revenue continued it of inventory that burdening want as on reduce see that pretty products is us more in manage other, want For have they've built XXXX, How and current levels, to order we excess there? go we more and products, may market our then like for value. has to December POM, And maximize looking between places get really, kind finished out have volume. of in us, think a or always start I forward. maximize and I environment each is cost raw over and more but measures the volume, answer, pricing line. will the it's for standard another one to to drop-off the contemporary one grade of November finally inventory and And again, in there some our inventory, But about that maximize share in having our so as instead to is because more do being us, EBITDA - margin material at their think then as cost M&M margin don't opportunity, to we trying that or pricing seen to our cross-selling large as pricing as and maximize in disconnect - for I inventory goods you, the allow we contract, same much with it in take percent they becomes be produce know fact, maintain we rule where us of from this finally achieved we longer-term, so

again, take actions. these So we'll

all to our Now, performing of the will it expectations. started that. But some we've already to business get take time, say, I'd

to you, million So to if lift. that look looks EBITDA though, M&M $XXX we year, at portfolio, M&M achieve if I to be aspire is around $XXX we year million team coming really at, about from in we and we big last next think next I million $XXX really year with look a would the XXXX assets, big. from mean, it this on the I'd remind is in pushing $XXX of for to Celanese that we assets the it's mean, for we're to year I that year. went million EBITDA EM what going that the $XXX million this say,

So next to actions X% do it's and auto helped builds to be and lot we year. demonstrated we a how not bigger underway already much going going we've We're that know we're to by already higher that than of have do how that.

dive, that. I applications, teams business start think so to a into pretty next nylon really really all can already nature with pre-qualifying so applications, underperformance, Celanese consistently understand the have meeting been been in by year. of that's we our on we opportunities already what do deep we've called the everyone. heritage And M&M the M&M has are out for the our the great Tom of

a again own not a to is our off we're strong in $XXX say, I'd performance but start. unachievable lift, portfolio. million Yes, So given very our demonstrated

Thank helpful. you. Very

you. Thank

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

is the EPS range and help for per upper-end Thank annualizing us us Lori, $XX Could roughly you Scott next bridge to you. at year. $X of QX share. the

ongoing of lot constructions, headwinds, QX, and last basically that think Europe at seen, don't seeing conditions slump coatings, are can the four I look seen I and a also the for EBIT. that you mean, its well. of with destocking where drop to that don't in of and acetyls, really bumping think number I year seen some we've lockdowns, can is U.S. challenges with next forever. and China up around terms because COVID-XX bouncing pretty of acetyls we situation again, in These cost times the we are Yes, But paintings, that curve. in in the we've a get in fact multiply a the of we've in believe and lot QX, especially QX The has held the there.

the first think, again, lithium-ion by in higher in sold-out back a battery have we'll a we to $XX that sight builds range. to really with we to lot a do do see lift about. I But just year EVs, of the somewhat of in then have And than some better while GUR to because separator a expect So coming addition for challenging, that I we some only quarter. quarter, have portion M&M our again, own be had see the be growth quarter That half going having of films. $XX M&M, of we Engineered first lift quarter, GUR will we things would the line in fourth demand of think see Materials to is to around synergies, is second just but may moves talked making we're we fourth of next the the in described we business of big that start realization year. on continued chance auto be up. And I a X% start manage

So demand us high we in to as that margins raise year. are LCP year next into allow going margins also next XG applications. see up GUR will

are of but And other then dose terms levels, the and medical, to from predicting of Next time both get orthopedics, at of full it also And which do the devices. vital in Santoprene. in growth return out levels of quarter like medical Santoprene applications, we the we continued to year, the be had medical this pre-COVID to saw we in terms terms deal back we KEPCO. Santoprene, returns we'll on called benefit expect and the in

a I - have in a opportunities our heritage next next year also our Celanese total see through the uplift lot across strengthening opportunities as we M&M So across of year strengthen move in the on portfolio, will year. growth in Acetyl good and the we would say, we the portfolio, see we Chain earnings. do

we China to And really quarter, last on saw a a Acetate as there like much to about more we increase customer run emulsions, other flexibility, customers lot less Chain. we VAM regions. restructure started to we which Tow and more doing As to and like run been important allows independent, of was are business, doing our we business talked in derivative When an value, Tow it Acetyl look have starting we reliability us when really optionality that we'll that the earnings. with our quality, to became more we've supply do that of our of went and Historically, build-in focused supply. reliability because overhang that

Now, XX% utilization We're kind at of in that outside has tightened again. China. up of Tow

contract that had. still that, while and so we've raw Tow customer that in, the enhance And integrating material changes in given pricing, really and team has the strong accommodate models with to out and allow us focus that in it of the an us of energy business reliability raw structures volatility, by the take acid supply go now new acetic - to some into material opportunity that and energy really maintaining put costs better in Tow,

is, So a will with improved we improved profitability XXXX the much result seeing be along greatly flexibility. in

you do an a And profitability? year, the Tow have early look forecast improved for at next

No, or above what Tow in for Day, look if Investor we is, at XXXX we called out be would that. say will in at I the what you

good. much. Thank you Very very

Thank you.

line question from next of questions. Panjabi Our with the is your Baird. with Please proceed coming Ghansham

in timeline the to seeing? then you're And weakness that's is Good will so this a a too talking your morning, just can that, last it first quickly longer? Lori, destocking. your that of from if quarter, just and guess, off, of just you we went related us simple And everyone. to as comments, were world you. much exaggerating visibility you some the Thank as about into what's through that little first give very just too I prepared inventory not

look, thanks question. - for I Ghansham, the Yes,

whatever demand worried it not all hands could to sudden exactly think able you all mean, being a of went that availability before about get kind was buying there. were issues of and the have there from they they the and realize think we being down molecules want get going and that have and bring they started their to people I be to I inventory molecules I down across the assume right. everybody year they resolved, tankage, of production end the on and hype will

because into it prices more But they they we Right will because rising, people behind see cheaper will now, prices quit things tomorrow. I why when start Just like we mean, buying think logistics. they it buying see so are I few be seeing be we've think falling, this. expensive they gotten tomorrow. think a improved

We the congestion move and ability the materials to seeing in globe. improvement port around are

years. improved disruptions than seeing we've quarter outages has having There been availability. less are the and last We the been previous few product over in

falling And view both I also prices are think. China, this about see again what We but on a talked mental demand and which seeing outlook and because of a again, big in people's seasonality they paints weaker effect area. we of is that in just coatings, Europe I some specifically think

you'd this quarter to start Chinese So in flip coming to activities is up you we'd Western first And warming 'XX. out. likely to Year it then when we then up is see start and coming think get the is as that I as see again get see see Hemisphere, start into New we'd extend coming through Typically, demand again. we do to

feel saying see to the pretty confident quarter. after the other So direction that's turn why start first I the expect to sometime we

normal. so not seasonality inventory, Ghansham, some that year. area we seeing chain lot from here We an way closely and work do fact the flat focused fourth Yes, we're area automotive of levels standpoint destocking. that's that's been auto in big last see where build full, the on. quarter have more our to a don't think at is has years, very We're two next seeing that we're increase level as I the of value don't like of one we But in slightly excess we that that's hold expect low into the kind or a relatively

good area into next not to half about that's that we our first major that see weakness year. we're of going as way an the feel work we So

one-plus-billion for middle on XXXX, that. you've free to the that can targeted of year? Scott, you, thanks on XQ are you Okay, weakness cash through anticipating that for what number And deliver a of Thanks. you're that longer the the levers maybe for then to pull the flow in scenario the discretionary the bit pushes

the we've as that a a that that capital we've sizable. next working likely were to similar see be out, variety seen Ghansham, that And could over be We've first that build much last will in XX lot to collection the business. working - if build that a we year, in had is of scenario months feel has a Yes, ability therefore, in been I to there. deeper under the capital. think, decline of very a different planned confident And level we get of fairly the outcomes our heavier of M&M there half

we that analyze. So about very We strong to continue feel

match to capital in already, talked million. on capital need this we've capital combined a past We've long-term quarterly at think businesses next down that $XXX lowered on looking I down that better both the the expecting year. what calls and basis to year brought about around review our capital $XXX the near-term We these in spend. and of capital million of

depending those where on we'll demand are so evaluate, levers is. that And the to landscape continue

Thanks, Scott.

you. Thank

with your from line coming Jeff with the of is question JPMorgan. next Zekauskas questions. Our Please proceed

much. very Thanks

VAM in across China idea being prices to Can and reference a us give ton. acid in your acetic You you of close trends gave $XXX an prices as some geographies?

down running at $X,XXX end third the of is, by come we the saw pretty in VAM which to kind of attractively, the I'd we which at say, think been third differences cost the Yes, saw in quarter, curve we of that's really as $X,XXX, in had still a China, big quite about I Jeff, the China. $X,XXX, believe, quarter, ton - much one

number demand, So our now to a - tip Europe to of U.S., some But a I bit sorry, better, the saw softening demand there. emulsions to don't think quarter. Europe, third the start go XX% paints my on in for holding margins of in China the the starting tongue. that's big we're I directly VAM about again, for I as Again, it's VAM. down VAM the In softening the we drop outside at think emulsions into and mean, right to see destocking in $X,XXX and more tied in we also you in is coatings XX% to coming globally than and although about but idea, coatings. price, I see acid cost been And of think up on which VAM change. necessarily I per we for reference large China, in an ton, is which give China. percentage see exact some mean, compression in paints a in easiest the probably to again absolute right I Europe curve the have is

an be playbook like? you And across wide detailed to he's the said have challenging is and you in confident then you in the detailed scenarios, give in follow-up, a said what then a 'XX idea most macro think variety of I scenario a debt down most Scott's that Can challenging script, what us playbook. he would that one, in and just paying

the capital I cash 'XX, really as into the feel it's the and a of that coming around as collection I focus very heavy think focus times part the crisis, of two in then past next near-term then XX so was with days which, we heavy our that cash, before, and really focuses I cash, work harvesting needs. mentioned to or and comfortable again with and we've and think, we out capital had on on XXXX, of early XXXX of COVID back first where and year. over hard economic I think what And a years pull Jeff, in Yes, way

projects. able to a Our job on needed manufacturing flex done teams even great being as large have capital

but spend, we recall, to XXXX, able the and lower to that utilize reduce Lake of acetic our in acid to the around significantly were expansion in back Clear we're million $XXX be capital you was which If down cost and then CapEx project, paused that north time to bring to expected the million. able XXXX, of we overall $XXX

earlier, that. portfolio And in we around we are as near-term will the can well as be are process, as both are And looking mentioned projects spend, as do of those levers I there productivity at reduction. well XXXX M&M as we really if cost CapEx for so legacy so that paused, where can our focus that across

Thank so Great. you much.

you. Thank

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

because Lori, $XX morning, good Can a said a $XX would I seeing to it to to did recession? that for for order recessionary EPS Thank think range a your high that $XX? you, go in what not everyone. book. $XX we sense next you plus of the you do assume you on $XX you're would is not indeed give $XX, be and 'XX script recession think year a level? What us if into in of

Yes, look, that. a for I have really number Vincent, don't

think don't auto of determining will supply we've supply had pent-up chips and lot up materials that We to for be demand. customers. conditions, look mean, there's everybody is especially next that's and hearing thinking I at find with auto, pretty current I I think of determining three years at consistent be is still factor just I is year. of the what if surprising, demand think factor. from We auto a to what we're consistent continue very the so go and production. will low we continuing other think auto,

next interest significant is we which, think some But again, go portfolio especially our a year. Now, upside that now obviously, really impact. some there regions frankly, of may be has is M&M, with where auto, for up, part rates an as quite

a I of usually do in a - recession, a this little see things time, I way, in I case, go up mean, a And then that this into concerns. it's recession, recession bit so couple because in - - and prices that, of this think start if mean, different we In to come down geopolitical it. staying is you energy with usually in energy

seeing lot some you impacts is different. jobs. especially little demand recessions seeing layoffs the of the see a we're then I because most a the of not there bit that's see people hard people it auto. one inflation, And of and where think recession without the we in recession. it leading in a of in employment, I drop are feel So other is mean, autos. full indicators think being by in doesn't which way thing why We're the U.S. a going the third U.S. fact, usually employment, is is although And here full so and for as as I this in hit auto

mathematically haven't as what it's happening, we because we don't if calculated I modeled, a we So recession, really see don't would technically, see even a it recessionary just call, that. scenario. And

flex Vincent, see ways to continued with have million between we've if And which add full the other decline our achieved year number to look already synergies synergy to we million expect would The one, thing then synergies synergies. $XXX next year. demand of I segment, in in have, further for that, is for accelerate non-auto increased we and and we'll $XXX that

the in So confident to being of to able put prepared very we we comments. do that that feel get range

in prepared a how the Acetyl particularly expansion how role how done coming as the in could how reductions. Clear in already footprint, Chain the the in plant thinking particular, you're about is you've follow-up, Okay. play with discussion the which comments to 'XX? But that a 'XX? And And with you had and guess, Chain I Lake are run going a some

lot so in look down we off. seen rates we and see did think demand of Yes, a this Acetyl We've Chain XX% at demand. come or the - have already inventory. to XX% build and Singapore in if our capacity reduced because China I to don't we in We want year, of that our we

XX% capacity, So the we've gone seen like little emulsions, areas already down to we've drop step. In that as there. operating big where taken some as in we've of

meet some these don't unit news now softening we see all cost been until see think really it, but just particularly taking, around enough I managing high I coming Gulf actions obviously mean, and on aligning Frankfurt own for better but and demand We'd to we our our optimize capacity, we're we've of - customer in we still Europe, our using rates cost lower-cost demand in again, steps that's demand, production. global economic back. at given keep align Frankfurt, with demand demand. in the the in made demand have So the that the the global response, make the POM And savings, decision the U.S. go demand good still in to we've with so can Frankfurt, proactive down chain plant really our Coast, our cost, less with that to VAM ahead by is, capacity. demand. our moving is the if we've molecules focused customer Similarly the in energy reduced we of our we we're the globe this ran money Frankfurt and

is, just - to to up. back is going look, is unit able in continue say you're see matter productivity. and the in of as complete see else go about come million end Frankfurt about this the $XXX start that's would was is, so to to lifting are by like Everything today's that do actions Clear of it, And that mechanically be would as so. to on What the We we'll out start that's XXXX. easy. in for start Lake the up so intend so say we that decision we quarter, when rate, the justification Lake, We do half. to And VAM I the track first a year into called ready I I on Again, first project what Clear we productivity. a hopefully to unit

we the Coast, at year that operating run run in start have much, no the even for happen we for - see happened we even productivity. 'XX issues margin option will additional So savings in rate say, rates million unit saw be then if and a where demand there I something to we run should the if see the run but productivity first unit can if obviously And get we are get additional running savings, see unit that as from and the that need around similar globe, Gulf that. run-up we or capacity in higher we $XXX that will

much. so Thanks

Thank you.

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

or I a broad Yes, imagine to number, can that M&M color million perhaps it's few would Lori, that rough to and million that you million mentioned? you strokes-related baking like difficult. what that you be volumes really actions there $XXX run target year have formulating in company-specific But Any of other helpful. I spread are normalization for price-cost think in things cross-selling or the owned good days of a or $XXX referenced the XXXX. that for I just you've you it you bridge of rate for between the appreciate morning. $XXX speak this

a bridge. have Yes, I don't look,

on days, As we're do immediately said, we've can about so working go we what learning, you it we wholly-owned still it. what three are

experience past, levers not our own future. based December, I December, more can some pull. currency, was there on we year. So go that much say, what of worrying differently mean, focused how but November, we in would been we're it's next we foreign the million that do $XX in about not can think But this November, to rectify in maybe what in like things are on about I the okay, really really so happened but

annualize look then million if that volume, say a you I And I $XX that's number don't that, make or And up just so they've XX% lost know, If we for the share. something. about large can in here, you in $XXX - at that, million, Remember, pricing number. that, that's through cross-selling a number through and recover EBITDA like seven-some-ish something XXXs. the was so DuPont XXXX fairly market

us gets think the I $XXX of So other some factors exist they to sold and quickly care the currency, back just had that of in 'XX, recovering that the volume like million. didn't taking pretty

those as we some Scott And the see as will start that So then things as said, synergies focused Xst. are to January we're early on.

Singapore closures have office have will like and some overlapping synergies office others. sites, from We Seoul we and where

But we'll will a So material obviously, I give us value are then source there synergies we for well. have of that also for there be which into in those and that think the us. will will which new raw as I mean, will separately. - in account come contract January, flexibility play come

at go this experience, we're really wish don't of again, I we trying lift have the give was 'XX, get to could then the yet feel pull, where better just we'll organization million it towards based But get on and pushing DuPont make can bridge. and a all. So those on our to own on $XXX in it. based we them really the is identify let's We levers this because XX we point that I to really if level focused in detail quantify to what's you get actions

I forward, question transaction-related amortization the your that's And the Fair exclude referenced? for would spirit And appreciate that My and color in that there. in you or moving from What more amount Scott. of is that is incremental the include to of embedded adjusted clarification of housekeeping maybe the D&A you in XXXX? million EPS intend second $XXX enough.

we'll then million, is base estimate an not to through a be of and that be think right about Kevin, would out now so so adjusting that's way that best now be adjustments, amortization. of include about the that. would here $XXX two-thirds our we of business depreciation that that the quarter, we'll fourth third And working right Yes, in and

plan to don't that provide adjust it amount what will is, as to we out. certainly but color We

you. Thank excellent. Okay,

you. Thank

Leithead Our line coming is with Please your questions. of from next Barclays. Mike question the with proceed

Great. Thanks. Good guys. morning,

First, just ones asset two yields. quick on

balance 'XX? hit Acetyl to you're XQ, guess, with, First, that the sort in for low. before being when kind you in start this Or one-time absorption running that what in your into through itself? second down. just of industry And Chain are supply-demand help usual previous us high is in prices margins But of obviously, down, the as are cost volumes sequential cost time shouldn't can decline at there unsustainably of assets the EBIT are running through or seeing we've you sort industry, inputs resolves itself either XQ, mentioned carry you forward you gone times I any lower fixed out? look if,

I in really globally so I to that again, there's deterioration less like demand we've XX% Yes, as Europe, Especially specifically where demand, seen that drop called no, versus in of been. terms one-time now pricing we've things. just say, quarter in emulsions mean, I'd U.S. out through third China, of in XX% is and the down terms

only now I people it's to we much mean, And but again, because lower We it's think in destocking is one at be worse, kind again. quarter stabilized orders it destocking, of describe So the fourth I then sub-foundational. Again, we honest. have think an get so this when don't there stabilized, - our books, see mostly end conditions is now of can the I can as think seasonal. reasons they've it level, let's order

we so why that's as comes that recovery hopefully, do see saying. Look, foundational some back, again, quarter, to we've into more confidence season, move in continued construction we're of getting we more before. a the into end then start we said quarter back first And towards but maybe seeing construction and Europe, the in of as expect COVID, people on the and think And that's China the through we movement first level. season

the then And on dig helpful. That's exposure M&M to I Scott. just Great. wanted for currency second in issue.

good pretty have mix into close. you ahead the obviously, visibility M&M think, I country of

hood sense sales the and you currency? get or a COGS So was of a what when issue trying Just was mismatch got different in to net there. it under of M&M hedging a

that expect it what Engineered of year not impact in impact higher of Yes, basis. we which dollars more currencies $XXX terms And lot cost things, in business. two whereas totality in little what local countries the on some to than I sell in be I more would typically and dollar Materials Celanese think, we we in one, a today, a sales unlike those would weighting of a to the up our kind see chalk moves through then this and annual about it's Celanese base so is million, have at in

and power should the where and the also of businesses risk that, where we're to at are I we looking that we run benefit in-country earlier. next at some the those as some perspective things the changes be say those rate And those part get early looking from we things of business would from there's alluded that can hopefully, two of make enterprise forward. at of combine So can certain kind help we of the we And a level, can Lori that. to mitigate have actions. we'll well, in year do going

Thank you. Great.

Thank you.

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

morning. good Hi,

In outlook billion adjusted terms in it's EBIT does the for Acetyl the about to $X.X think that, of assumes billion $X normal range? your foundational for Chain, 'XX, that I

think first the Yes, thinking give Mike, is of some little we hesitant low-end - we would so were say we're 'XX quarter for say, recovery. then we're I a obviously, what I is, would if of Acetyl, what even and on for assuming foundational But to so XXXX guidance.

you quarter. third if is quarter think that, foundational, about quarter, fourth probably second So

about me of Let means. talk foundational bit little a what that just

foundational range. meant didn't We really capture meant recessionary was conditions. capture of always we typical to the So low-end the

kind we're that of in said, Acetyl. we seeing As

fourth And XXXX that's so average. think what this if million But some And it's year again calling again, for so we and analyze will be have then seasonality even believe Acetyls, out sub-foundational. a you QX early that's I and $XXX fourth for we're sub-foundational. we quarter, in quarter year the

it's finished to billion look Lake Clear expansion, foundational really some just with you so billion in So I what probably $X.X we think area, the the more $X.X is for if clarity. mean, at billion $X.X being after

year, So or for industry because Chain. like it's would can we or at a next pretty little at causes, market on foundational lower-end kind some very we bit else all lower that move average have in as of high if the year anything we at say, the that outages level utilization still Acetyl are the this I know quickly

year earnings. but we're that's how we're - thinking and to next foundational thinking So about relative it about how

sorry, from, base of the see adjusted you're $XXX And growth it adjusted felt specifics, Engineered have some it. what talk could close - be if think to you type I'm the I mentioned and you about EBIT and and growth, million just where business maybe you Got and Materials there base maybe EBITDA, any 'XX great. you'll

the full called and and growth say, value we've I due it's seeing GUR there we're that applications, medical. utilization, actions margin it's is to I Santoprene growth getting value growing Yes, of KEPCO the out get Santoprene growth of from to auto, in Mike. the full double-digit kind XG now we've pricing had - double-digit. the that high so the LCP well to to lift that margin the it's in utilization in been I earlier, mean, and year it's due the that expecting as would in full take as margins it's actions opportunity the getting things other the so for lift

heritage are for EM driving in growth that margins that those factors the say, I'd biggest Celanese So double-digit business.

Great. Thank you.

you. Thank

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

taking Yes, my thanks questions. for

and you lines for look when on guess, least interest at to question the based a I the you current to match mean interest rates kind Scott, debt a it FX of speak guess, does your counter is send thinking impacts. maybe can better So I the it that? how it that might should up we it - expense, down, does send about what bit, for be it to

expense. we where think in we overall exposure would Well, would currencies - I it of I those any size, have interest lower the think

ultimately currencies you over that we the that a so be year more have do as we're balance depreciated leverage having on versus careful between when those John, depending this move to going pretty interest when moves. up substantially that, currency with and However, then there's end obviously expense

help So how but we at that, of next look exposure. we're we opportunity do see going get in into year some some with business that to as balanced the to we be

do to guess, the alone? much of it capital build terms inventory had that have Got normal, of can versus really as take-or-pays it. of because just enough. kind could quantify in how front, we out with and sounds the hard And see been Fair of what you they in kind they've running terms M&M working asset the on just pretty you. you like then what of I view release what and is -

numbers, our own the know have that year fourth of purchases DuPont polymer and some we're continue in preplace and again those to don't different we things. to use into taking material going will next that I to steps be Yes. quarter,

firm number that I think a have on yet. So we really don't

our is these mix. John, go Yes, what normal we It's where at standpoint, we both we're been business has and to on so together, now. nylon going but that portfolios bringing is of by from region portfolios mainly forward we're two how we're in depending putting be power historically well looking different optimal at different as together you're leverage the as really can looking really the because right

for Fair point. very Makes color. the sense. Thanks much

Thanks, John.

you. Thank

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

Scott. and Lori you, thank Yes,

your do It's job talked different on a You it cost, chance Frankfurt about in always to do asset? the you of that you you there what Germany? and large stranded given your in well footprint in a the Europe And great of utilization a question do plant. managing highest globally kind in plants. as as A expect headwinds Acetyls is becomes Europe, there think situation

plant just about or VAM POM plant. a the Frankfurt clarification, you're talking P.J.,

VAM plant, sorry.

VAM.

Frankfurt five cost be you. I Look, wanted just have our - not question. assets VAM highest Historically, we Okay, thank plant. globally. - has to been plant

to seeing let today, expect when more cheaply right So just the even clear profit, it we else on European frankly, energy, and now but because then, we be at it again. see had it's run get just cold, and quite in a prices run somewhere that terms those could prices we high the been And of could that. very volume of it can me gets we

mean, possibility a the meet not see had plant and able becoming were been months still a to we demand. it every three ago So out only of single really asset. I stranded don't I all about it's running we

unique we And with been think do is to winterization situation back the with all plants the because drop going very factors, a the together we geopolitical that of will at the profitable I a the and come all we're I seen just kind Frankfurt This always European need think have. So plant. demand the has China is - fairly we've demand then same coming and prices other of energy coupled COVID, time. rapid in VAM seeing,

becomes don't really I any that see a stranded asset. possibility So

acid, this P.J., power whether would we in, it's add whether that just acetic nylon, Yes, it's I bring is PBT, et theme VAM, the important of M&M cetera. very now network whether our it's POM, of as and

believe Europe a value and are we assets created those in assets. having time lot have We of great networks, over these by flexing

portfolios And that so that for see next as and quarter to year in operate the together be as bringing leveraging these we want hard concept that into we is with we fourth how working bring M&M get as that here business something to well. going to we're

Okay. M&M lot appreciate secondly, that. And we of you you a on and comments made then mentioned

of things in your say business lagged that comments in the is pricing prepared One that, since you had XXXX.

that in there maybe step-up maybe have we pricing a So under-appreciated? is one-time

Yes, earlier. I talked little I think a - - bit look, I about this and

lagged. necessarily hasn't pricing total their think I

to take differentiated distinguishing competitors price move would and from fact much had fact you and really pricing better it's the where business it lose in pricing share. where think standard a room business between market in I pressures have so the not to seen of lot more we've where maybe been down

will we to margin maximize means a other prices versus to be I take. kind up, about the that fine-tune any of contribution will it say to signal. want think trying just really approach wouldn't dollar So I it's pricing it go necessarily more just

you. Thank Great.

Thank you.

is Ahmed Please Alembic questions. questions from Global. next coming with Our with line Hassan proceed the your of

you Good weak the earlier, that Scott. asked of you mean, it sort actually EBITDA better I'm a obviously get trying I morning, that was Lori a be. gave guys would for and seasonally what to sense, quarter. QX guidance trough I know just of feel

it they acetic as seems sort QX prices prices mean hard the destocking, I had can QX, of worst right? like, Europe one and of be you of just extrapolate down like in me, the To was did. that. as everything, energy obviously, it So coming high sort

fair possibly is in right generated in XXX-and-change-million that of mean, I to EBITDA the assume you So in to annualized the EBITDA? terms quarterly it QX is rate number about guys think that trough run

understand trying better. for Hassan, to XXX-and-change Sorry, your The in Acetyl? just EBITDA question I'm

just, number as trough company, - No, do your a mean, as what would I overall you think be? EBITDA

troughs, the a I I each towards get mean, you, I'll we've with the think on we're mean, we basis current the suggest it's just that, recessions, year range that things. at mean, lot - to Hassan. to look given day, close are pushing next is cetera, creation. stated to and the environment I put probably the what mean, at earnings, mean, - et different, QX to every situation and about daily different of it's in really to I we managing but labels I I sure be that for end would hard think cash really is honest that differently. value maximize making somewhere a I conditions flow business somewhere on maximize to

on things and enough, that side $XXX on the the sort from about you a moving being like. Fair around now pricing talked of the ton, of enough. curve Chain, And fair hitting more Acetyl cost just specific

these part So first That's are One it. two of things. industry, shutdowns levels? - of in is, the at sort you the seeing

rates and tons just operating your trying sequentially being emulsions that as about yet XX% of part sold it only talked in X%, your prepared were second to obviously that you so well. business China by and reducing in The XX% the XX%, for the down Singapore you remarks, to reconcile the volumes like, is guys

your and weaker one, two So what's parts, weren't shutdowns, two, suggested? than your volumes why commentary

decline say, the saw quarter. through Yes, the would so I we

actually of the was quarter start for around down - the So now third the much quarter average we're average at for $XXX pricing, assets China higher and or $XXX. quarter price the third the was a around

to So declines. pricing see continued continue we've to

our The started happened at into rates than volumes really the I'd cut was October. have here and quarter dropped the I say, rapid. you we we've And stronger actions to see So taken to quarter end that's going start of pretty the see the the a much. of very so why think didn't

probably I clear So wasn't on that.

I to have, pricing, We I most so as struggling. it but the actions curve, know is we to the that's you slowdown acid question, again And we don't why first $XXX. yet shut we your acetic much take To though, I around others seen not others economic in think see are the but say would as the China. volumes, mean, still cost of so in at But down. this we producer are given have know

or think I to people longer, given even this slow-down rates shutdown see temporarily. may if only goes on continue if you

you much. Very helpful. Thank so

you. Thank

Our Matthew TPH. from Blair with of Please coming line next questions. question proceed the with your is

build mentioned that penetration? talk and your Hi, and outpacing Could getting Europe. industry Lori, EV autos rate averages to especially that that, build are averages, your America and in autos, with the rates in global how you compares you about you're North total reception overall

X% rate. growth at thought Yes, think we're autos, I so - think on IHS I

let we of think pretty all little that. top bit of - a seen less me the significantly number have EV my I We think remember we question I'm But businesses. to auto head. across first. builds the it's than our off answer have But trying outpaced the

have next of in battery expansion GUR, be into business. legacy The the it for tend sold much end is which value We're proud And standpoint, a margin our we obviously we're EV, is because higher applications. separator year high is that films, lithium-ion out and than more so from into of see goes because volume will majority So we XX% to what it's auto that than EV. limited.

make today. You that compare X.X% industry, about builds of the the for - up of the these fleet

the to we the else industry. And as several that higher everywhere So we even see just I said, rest we're space, in the EV then continue outpace of the percent than industry.

XX% Europe about was industry think you, were industry. America And XX% third growth volume just China, give industry to those XX% we've bit I done in on the you rates, expansion, So on up Asia so were versus better we in idea, not up all that lot globally, well, North and KEPCO, Asia we - an it of up XX% also the shows And in of but year. in localization, growth, and project Asia growth the bit, from again, in Asia, both about chip project was of additional to last EVs, our stronger maybe really the were that's think a Asia, availability, stuff be regions the portfolio, GUR pipeline, we and that than our a a applications, high-end of has as models. the strength as which fact with the we in the EV the the in in a other been strong pipeline of give in maybe quarter, our and some down into to challenged saw tend stronger

it you. Sounds good. Thank I'll leave there.

last Darrel, go ahead question and the our one, make please. next

Thank you.

America. Our line proceed DeYoe Matthew of Please questions. with the is with question Bank final coming from of your

everyone. Morning,

the first for from the do at working versus correction into $XXX how business? this inventory half think you much if about try look million kind think will that's continue guess, we the of we come that will earnings that mentioned I fairly next to half Do you'd arch of next And second earnings M&M year, a year? pipe. for through As of you sharp expect cadence

are think, these takes, I Yes, look, immediately. time we - the start These take some time. already but all it of And things started. just actions given

do, back-end us of to more the year the half I we of across first the kind teams half. definitely be model, in changes would second loaded the through the a of here M&M heritage onto work quarter, need a heavily happening first business so first to to the expect be M&M of the year, more than in will pipeline part commercial the time And coming get earnings than load which all give in the from to just definitely

half, as first Matthew, to assets. material the get we legacy more likely pull-down Celanese inventory the and work Yes, into that

the foreign one I just but I the waned, of in because some on was sure In of talked that kind of the macro Lake, rewritten that guess And you've was the you'd raw wasn't contracts I capacity startup about past Singapore. if Understood. more. if and talk squeeze rationalizing could material or Clear better

still where the of if reasonable forward macro soft? remains we million productivity not, should So are savings the rationalizing the And with table? about macro still is, $XXX I it's capacity it the think on is the if guess

in million, with first. other and and catalyst Yes, look, softer in last savings The things productivity as quite let It stable two full based me even start it's a $XXX units macro. on it. not of the still was had question really running

any always due fall continues the need that exist. And growth. Lake there. So didn't we run raw material to will Clear We to more advantages

So at they not the associated I risk, on credits because Lake Clear the expansion were with are productivity. don't think project again baked

we depending like we sorts that on we see an time. terms a move And and upswing in at or credit on of have run As the earlier, I the we even other said to and for shifting we'll fuller, talked have with when parts to so, going change if get in it us. about this, and year additional things in that or than that of has of having that's more the optionality. can contract production actually the probably off we've just the gosh, global market we over around world, ago footprint we by what's utilities, in to things other China, that optionality contracts turnarounds gotten of paid those That we accommodate really Singapore

And that optionality so our we footprint. in like having

wouldn't forward. going expect changes I major any in that So

Thank for that. you

you. Thank

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

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

you out call. the follow have around ahead please go close any Darrel, if As always, up and we're questions.

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

time. Enjoy your You at weekend. your may lines disconnect this