Celanese (CE) 10 May 232023 Q1 Earnings call transcript

Greetings, and welcome to the Celanese First Quarter 2023 Earnings Call and Webcast. [Operator Instructions].

At this time, I'd like to turn the call over to Brandon Ayache, Vice President of Investor Relations. Thank you.

You may begin.

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

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

on measures to the You reconciliations our can as website. find as definitions well of GAAP measures these comparable

regarding Please presentation the which forward-looking will comments. language also the Today's the press both prepared statements, statements. be of review at forward-looking and found can cautionary include end release

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

our Darryl and prepared published we'll yesterday, ask we to go up you, it ahead Since open comments questions. for

come with Michael questions line [Operator Instructions] Barclays. from Leithead first of the Our

high guide. First full on level question, the Lori, year just EPS

You're which XXX half. I few half, that helping in implies second the synergies, in about other Clear doing first half. of the a Lake, are assume in about EPS things $X back

So versus, I demand second a the characterize broadly in recovery for to half you're way assuming controllable what market actions? guess, say, is there

in Thanks we and question, for mean lift I right. QX need Yes. about first $X average from Mike. We where half. the were on in you're the QX

lift And XX% QX. I from really the to QX mean, similar so to QX, from saw is can. QX a our to focus extent M&M we we on actions controllable about volume lift recovery a

optimization, volume we'll coming of our building expect all synergies, to the range business is of price the in businesses, quarter. see continue We top which in which M&M across our well. the M&M as recovery at Productivity, for

things We'll year. again up first XX% about in the the its We expect again but to also entirety. quarter. expect increase in get better We in for back of some QX, still do some half in demand we the do improving have were

the U.S. destocking we As dynamic in improving the see competitive EU kind Asia and in of see the and

have businesses tailwinds margins and costs energy P&L. to should our moderation, help as some we which especially inventory. through flow from we start those materials And and EM cost And then of with hit the should in all to raw in see

So what I control of. think kind we're in of that's

going, continue we region, first it where in especially see expect see markets China, in to some we're Especially do hopefully see of cost take some improvement and coming second do do the we in curve. get improvement as some off acetyls. modest in Asia, markets recovering terms price and half. China, if see now we we upward movement we In acetyls turnarounds in some by into into the utilization auto. the And in We expansion and in acetyls QX demand going margin

expect do that well. continued demand We modest QX. we Europe, saw improvement In through as

in then level. pace a we which imports see into Europe a would to Europe I slow continue better back help said, margins We expect second know recession. across our to to lot And of book. mean of a out not want that order a continuing We're calling U.S., are we're in define markets. see lot half. that less should as in from recession. the I seeing into get expect, we you we as recovery general at to And the Asia however is people again, proves Asia What

the we that half go of to into year. We destocking destocking the QX, second be over we still some mostly expect had but in as

the as as resilient And that run XXXX we volume auto a achieved you we still portfolio markets, recovery EM so own that. at already rate our right be and expect seeing at than legacy better last And auto look builds, that the XXXX, our the EV helping as both businesses quite we're several on market a both well significantly to of a well our years to work in for to end are growth project X% build auto to content up done build to now X% building at has see us that. as pipeline, the increasing businesses. and M&M pipeline And that's even be our the end if transition for that's continued really fairly per been in all actual just moderate with year in this the a vehicle themselves. auto pace we being robust

I we is our sector still and baked the see construction. forward look most would sluggish into say is

quite modest seen Asia it any on some yet U.S. see really in and and be China, this recovery at in efficiency see mostly come could time. commercial and we slow We market Europe, improvements where energy Although Europe as still the construction renovation the in effect. in regulations not into we've

non- And the lagging and this is would consumer the more XXXX, especially durables, growing that especially see we appliances, say, in improving. electrification we growth that year. packaging, need electronics lot electrification world, finally, then non-auto U.S. as the But resilient -- in a consumer packaging, There's electronics, consumer I in the then And in so see a auto of for other we market see do -- and U.S. around other

tied Amazon that's also online shopping. construction. from about shipped everything the and push paints solutions, coatings for a bit packaging And is think getting and to but slow sustainable I

before, that than trends we second year. for of half in the of things but $XX that's that a you confidence a the So we support more see $XX bit out that where Mike, in put to that's going the probably range our kind summary bit and of a little will underlying

maybe differently to stand-alone how your just super maybe was bit a I integration XX some helpful. then XX taking value you you're prepared That's And chain or forward be approach you Celanese nylon in M&M hoping just bit business legacy could you're and thinking the compounding about how the polymerization expand currently just talked second, nylon even business say, about a Celanese about operating the going in actions might the Great. there? commentary, of Lori, than,

Yes.

talk little XX. general, with immediately me bit in starting around XX we're about let doing a So what

has backward XX. been So in integrated Celanese in not past, the

were DuPont, to prices to being of With integration. secure we've a prices was so differently nylon the doing produce we able backward of instead raw just So Polymer, high. not a different we've able great when contract PAXX and we What is to options. forced material been are been low, great purchaser which are we're when add have polymer

flexibility. have We

more have nylon choose a and and supporting if it production nylon that see makes demand. we produce sudden it we to higher others, we can make resurgence We if polymers, We of make of more optionality. can when less see it we less backward polymer sense, profile of make makes integrated can not buy rates, we sense, if demand the from can

a didn't that so have our of even value like that GUR more DuPont other much and which flexibility, And market is like ability and gives run us really Palm acetyl, really to make didn't across and flexibility wide or exercise. degree conditions a range we businesses of

And most polymer. so We've that. we've to already of done with nylon the Celanese the DuPont gotten certified grade start already

We've the inventories raw last inventory, been we've Celanese and been raw compounding make polymers for polymer the DuPont in DuPont start been home, year to some had the to it branded of flexing for built really managing that of both line. out using that product finished products and

differently case of and the our prices we're and grade a And pushing which with therefore, in some on more cost flexibility really We've way line profile. demand demand talked inventory about profile. with line lowering inventory different. the differentiated our is degree get business, to in grades profile the of And price standard in the also of so running pricing that's more a how

the of kind immediate that's So doing. things we're

studying As before We vehicle electric electric addressable we PAXX vehicles hood, to find IPE. well, to on requirements in a opportunities course, see this we've almost those this compared about vehicles time I increasing lot we for decline. deal. we of of coming vehicles. if as people went the that we performance into think don't what way. in We we they're it a longer also of know are to a like, per that's traditionally mean we at PAXX electric we market, of have is double lot that lot look is extends And new under going term, PAXX see think the as content spent

to things suited management life, These So very required. longer higher battery heat are PAXX.

it's if think addressable of suited high metal for battery say which focused motors M&M strength you the cell and EM and frames you is as place. the didn't we PAXX, in capturing and need content temperature the here for for business there. connectors, applicable and about electric mounts about high-voltage standard our to things an PAXX I the electrical replace lightweighting business, prior the EV, which was like parts, legacy in things but in brackets then M&M. and the where when we're So portfolio system also The of like the Obviously, you a halfway things to the particularly the for for And and are EVs. grades, grades, have would the our acquisition [indiscernible] not PAXX,

far And available so molecules pipeline not these have to are our using we also of PAXX we now into but EVs long, applications to as project drive those as that us.

area and if are which about an you think that beyond think M&M really I there historically. there in was applications was in And electronics underrepresented huge electrical PAXX vehicles, electric

outlets the natural would about electrification but vehicle, think So gas wanting years. electrification to electrification double going you X just for not to the and people about say electrification, think everything. homes, of electricity All is need next more out of the but in everything basically, than the for per get demand for

distribution comes management data with So that centers, centers. power

and from them All polymer of things of availability these benefit can specifically, PAXX. of require all the

strong apply and that through is the the grows knowledge infrastructure. those able going knowledge now in pull think out a to this model. PAXX that for has we're area Celanese an some use And using building profile for And to and pull-through the so end as our project there's been to pipeline volumes and years, we for market be electrical PAXX demand again,

JP question Our Morgan. line the with from Zekauskas of has next come Jeff

decrease? you think your of by What I dollar. earnings source the share a reduced goal was per

where of from medical and a especially the as in a in for volumes first XQ few auto few our come in in half first half Yes. with If as where to look for expected for spot we first up the some half, about some unanticipated -- commercial because well parts auto, being we came at total, forward market we second implants. the opportunities pull quarter,

expect opportunities so since -- the those not unexpected counting reoccurring we're those second quarter. in don't we on And

been in lower. had the build second not are demand we Second seeing time And a we at quarter. as quarter this as quickly quarter last the bit has little thought

to that half. quarter reduction outlook for our and second $XX really just second across in the growth to slower into for seeing so going And quarter reflects we're $XX demand that that third that accounting

Is second quarter sequentially? a case, and it fair base are to say prices that as volumes flat

increasing volumes market the half, the across see should We as M&M the some in in increasing applications. Materials. Engineered we second and moderately share have demand end for just volume for recovery automotive expect of I especially business base other and

growth little though. I -- challenged, acetyls, right as pricing early seeing to recovery for margin the see we we also is now expect on pricing for a and moderate into we expansion, green in acetyl, it's China second start think the markets. are shoots some asset new, end more is although quarter very

baked into seen what we've projections, there. there, our possible room although more think So still we far there's so upside some we've

help and think as costs the volume the we go the margin from half do expect inventory, margin as half I which Engineered energy And for the particularly lower and half. raws second first second expansion we through will expansion Materials, some in see pulling the with we to

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

back. region of Thank more that you so any that that it that you spike -- just you particular in was from the could do Good a of was on color on any March, there give saw bit increase? stepping any hone a you Is And sort Lori, kind in maybe in demand maybe of XQ in pull-forward saw morning, that you. benefited step March, can theme back, everyone. there as particular think. you more us

bit. little talk me a about that Let

us time to really for So March, what about in we good some our up at is the quarter. confidence books in saw our gave of really volume in were -- seeing we our the second starting saw businesses, and call, we base as on we March showing saw that books

end end got above unanticipated demand number which things. that of at March, quarter. guidance I unusually the a the of our think were though, some high we there the One, commercial really opportunities us the was spot at saw, of

to and to RDP, capture volume were the Palm a across because things our in the So it was businesses. so end our that we able operations, quarter. And of arose supply flexibility of of like chain and both nylon, an our unexpected I our significant we also have of at that think share

would that. that I was the majority of say

some accelerated orders a though anticipation that In because think QX. headwind by think from in. did we see auto I some medical a expected few of in in QX. medical, forward also in QX products think and little of a is implants, big pull I had unusual case implants had and in better quite it's which from fact, medical from in come In probably the forward in also auto, demand pulled we we

So it Not trend. not we kind sure as on pull forward just pull But that yet. it if I forward? think clear. it until is one, that's That's is recovery? sustainable quicker a of demand see we're Or characterizing

a judging what which think more X including a now? your in construction just And it of your time of just in is How reasonable part Got the about are that's the And quarters? particular thoughts. that. thinking it then in assume But you I by terms line you in Is destocking do destocking, then just geographies, on other end occurred to X of and quarters, as to it destocking relates there is event? color hear terms it. markets Europe, U.S. bit comments

the as we seen there, uplift into destocking But to say, the think would there, would quarter. is our be What but that's industrial that's the second the and the to over in destocking half. robust, expect areas. quarter, now, Asia all part for And goods and some Yes. the of U.S. continuing in we across most we is end right I destocking moved continue of Europe What projection the I And third going through in is as most for we auto we see really consumer of we think I really part. the say, and see continue pretty move quarter, we've second the pretty is into saw second much in

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

it cash sort Lori first help positive in cash free flow. half the Can Scott, do the of does X.X. started turn Or or you How of maybe negative loaded? we You with second unfold, maintain you walk into free quarter X.X? XQ? is more us that

from Yes. interest payment. expect kind a it kind had I of perspective off negative and then mean QX to sales when coming just of be we where we the of was

you've of So as we earnings got coming levels walk into through. the second higher quarter,

That We're really high perspective from had higher cash away quarter CapEx as abnormally more in at cash in level. balance the the also well We a normalized as taxes goes at year. the levels being a higher. of

you we QX That $XXX QX into quarter forward. million first put about walk the With we go the higher balance able sequential when things from from is where to lift levels up and a be expect now in as part the we through together. coming earnings get kind year, much average of to levels those would in of were all of the higher kind

it. Got

of March. first Okay. think came your quarter in said you XX% that in EPS prepared the I And remarks, then

at March better April -I'm then June, is So is it than sorry, I think typically buck think. back at about you April, if March, a is May,

do what decelerate maybe in -- June, could deceleration into you thought So the think throughout of happened, sustained April, and the quarter. have I May that terms dollar and

portion, a of to I opportunities related dollar like would and to Mike, in -- March unanticipated able that really in was we March. Again, should I a portion were capture or say spot significant Yes. say, the

grow across haven't baked Whereas will repeating has quarter. of base as April, moderately so continue months. in later not to repeat to earnings we've in those level them the grow the and -- continued And seen we in the

we're of be opportunities is were repeatable take bake I in want spot we to and trying advantage what but to think we positioned realistic just So think fortunate. our forecast. what we're if into terms was arise to again, to Again, they don't that those of

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

million it no lift expect million year in $XXX XQ what Are beat EBITDA? for level to But deliver to like that guidance can walking you XQ away the and do kind EBITDA longer comments looks you is from So that accelerate. expected M&M this of mentioned you to $XXX EBITDA. like prepared your M&M

We're value and Matt. to going Thanks, happy assets. is we're the the integration see the how starting with really M&M uplift in

point fact this accelerating at the is businesses. we all concern Our of is second that that not quarter the pace thought at across our

lower And last half. originally so we had demand we're rate out second called At going into a little quarter. the than

to applies as that So M&M well.

would is, I what so really million to of the lower see I $XXX we're out that of $XXX And way called that end kind say we're plays now, what we now, that at say on focused the so out. million would we if

get we're sure growth. to And what to making is on trying our delivering so really we're teams focus

we for $XXX the going as that which or second range, the into are sometime year, million going basically at EBITDA EPS half end towards be So would that quarter get into of XXXX, we track synergy. including the of on XXXX, kind in neutral either

you talk and line sight of product the of can Europe? is PLM more have a bit And into China flow into. about a ton out product, of not I PLM a really little

how of risk of where theoretical of kind China an product? maybe kind now are a the that in the and are or maybe or closing So looks product European of margins compression what far to Europe like versus some along are European me business, from we give idea Chinese

started for Palm because Korea demand opportunity started quarter low even Asia, quarter That China of Asia high coming very when raise very -- and provided the Europe in the Europe. was out price energy and Europe in in in out of both arbitrage we really into back an of year third palm really through fourth prices we Europe. started and the seeing really really seeing last or Sure. when the

And a the Europe, molecules so even in competitive that where -- -- be be the to it shipping those cost home could there. found do with to highly

find in the first coming going opportunity with resurgence and we of down, started even in first saw COVID of December, in to we energy a those into was on to that that With still as volumes we we demand lack while competitive Asia, quarter, a in is now still down demand quarter, Europe. the obviously, home and coming in see molecules but prices there projects Now quarter, again the landed second into an move Europe. basis. up in volumes Asia still back the in are moving really will flowing because the expect that in And Asia, prices see Europe, those

And quarter so this think I we quarter. we should in see those and stabilizing third as prices again into the through move Europe,

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

earnings. Two here keep to One free a cut despite levers roll provided, seem to lot in of you pull cash to the questions, into. flow range maybe I'll basically that the you is

Just guidance, demand the what as demand will levers cut two, see guess curious, play look reflect another doesn't really need scenario at Or and you be levels? left where are your one, does I end things improving. I the it you're that out mean, consider? of to talking we range about you lower from if XQ as your that would improve

Yes.

start question me your first. kind last with Let of

range because of we a we'll feel this with for like very auto, achievable I end only moderate auto. demand we think the year feel moderate the continue is pent-up is quite at there to grow comfortable even we are growth. know areas And some pace really lower that a

the to the I But if our and flow recession, really confident on now. were of anything that. COVID. say a end global cash I with So reflects of say, are a outlook in unexpected within saw we any here short -- we feel would the we us our in flow, we recession, very are downturn of mean, $XX into cash go beyond that right There and well levers imagining a still that global have $XX, XXXX

inventories. our similar that goes down, to capital working But we more would production to demand have COVID from possibly we inventory able slow goes minimum to to what One, period that down. even cost we cost So value plants also benefits we'll if time, shut of even more go scenario we'll saving during of as take a see have develop you savings release we that. really for did the because be kind and down have steps come down would rates of

very our cash that So indicated of steps I that given out to the we've level comfortable ability we've in I already mean, feel think we flow the called deliver

XQ, here, And a baked on something second scenarios is Okay. along that there? thinking kind half that contained into drags Or within into the what's quick just just against follow-up the is that in adjustment something inventory is similar XQ? the outlook of

Yes.

or release So inventory we're more. of $XXX assuming from million any working capital

million So impact if comes -- with on that's XQ, and reduction EBITDA to capital $XXX about a you working XX think EBIT. in XX that

Obviously, you So inventory we some expect see adjustments come to move half year. as would continue the same pricing is other doing, EBIT we that but see on go the impact inventory different what from expect through impact take as forward, second as different we adjustments. depending through would a to and inventory at I

and And we into baked the gave. that Josh that's guide Yes. all

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

Or a China? acetic really whole there's tension building last you a you out. listening maybe Lori, X? your like done to the year in sounds they you cyclical elaborate consultant outlook lot the next some haven't your would X foresee assessments over would there. some the in to so. attribute do But acid upward months that's of commentary, of more as month over your or we If the that look sustained it at prices correct, If uplift of on outages some acetyl competitors' or plays

for the Kevin. Yes. Thanks question,

below the time. we into quarter I time of at some quarter, and really to during in even curve and and and tills think I talked cost that. So even time definitely as the quarter fourth from mean essentially we're sub quarter fourth about in first foundational, was cost the periods curve

months. remained last coal QX for actually at same So from down level seen pricing if has about what's is happened China, asset pricing We've XX%. at pricing pricing several to come coal coal down the in why came QX, look coal the about pricing, you

you uplift margin. some see so And in actual the

the still in cost now terms a quarter. bit little curve through close stabilized to So but margins, of first we're it very

see quarter to start. then see of takes expected turnarounds the we as of And increase tightens to last we up. to turnarounds, just quarter. days, got seen. slowly situation in we've our that in to slow the which the acid And those see pushed pricing demand margins creeping some happen second that into acetic guidance, capacity that starting the a And the We're we've in that started really system, X which further increase we baked [flight-fly] first that out small

into more a market increases a But in planned that not X going acetic lot We give outages a that But expect will period that's of I'd see we'll take advantage a with And of I a stable outages, will if we're we need more months have lot of of been periods in acid now say unplanned, think going it's not downtime. of occasional is be mean forward. us able have to both we remarkably mean lot typical demand, I I and planned tightness think downtime, which unplanned of. where still sustained. the now sustained to there world. normal we not last is the early. chance level the

at or And free cash then target this reduction billion. to can year? speak flow X.X your least flow for for you cash endorsed free your You secondly, debt affirmed Scott,

deal I excludes think you understand to Mitsui your be or the more. I $XXX which expect that from proceeds number million that

can here? sheet context that you terms so the over can how or of And into attack in X the put X balance next months you

Kevin. Yes. Thanks.

had by If goal we stated net billion of debt in $X XXXX. reducing back, a you go

we when you debt of reduction And announced that will had top that in target of well flow we cash the exceed that, we do certainly we'll a on With $X the proceeds net that billion. ago, when deal first that. layer year Mitsui the expect, certainly,

we finished about debt the So we a perspective. good feel year where net from

expect second where from and earnings the trajectory lower earlier talked what exit And start would an about the expensing we the then we balance of the we initially then stated the to XXXX. as on target Xx that sheet the inventory good to earnings much as given half of drive end about into Lori cleanup year exit inventory cost had that on trajectory we and go feel we the by get year, we to

line BMO Capital next McNulty come from Our with Markets. questions the John of

competitors to This Europe John. would offer thoughts your on mentioned asset there your happening have you between Asia. perhaps level like concessions your in is Any is price the competitive [Babesh] then product landscape deals, And mix your businesses. to Yen. changes on change hear the you that a there? in moving I your some remarks, from flexibility for competitors all of or the products mentioned in of In prepared you

share there. So not or for assuming things market in are as easy you as your competitors, changes any capacity

Yes.

think the position of reflecting have imports say in I the been come compared the low higher prices. they Europe, world. energy real Asia rest should the and from to significantly, has Asia, they high to but are landscape had still Europe competitive again, when Europe prices challenge Asia in there the I And of much the terms cost had energy demand In relative down improved

developing see situation further again, the of that now we quarter first half increased improving, We then second quarter and the improved at And second in now especially so in that of the see with into year. going end demand really the having the Europe. improving

On it been market. Steel's stable very a has competitiveness,

additional and the there's do low an of flexing shutdown, market are in of recovery, for start as the molecules acetyls of our by in construction, capture to we a to as and been we chain. ability Europe it's it's up based industry China the construction well slowdown -- the we globe seasonably margin capture period optionality acetyls. really impact have when in Asia of as opportunity been product to normal to the there on just impacts the upon very we by see in as demand that globally So and demand slight start also as lower some and flexibility China and has advantage competitive Again, holidays recovery opportunities the acetyl even space. of and moving levels around spot and take see our the commercial there additional share model down the is and

and In stronger further for profitability the of quarter. which markets advantage our helped first in first took chain, boost we down quarter, the emulsions RDP the

start price As take movement of to see will there asset advantage we China, there. the be to an it some in opportunity in

flexibility market time, in to it upside at around is given exists. the potential and it's market any any So and ability than share, all any capture more around really so that more optionality the given

Got congrats commissioning it. And on on the secondly, there. clean,

next $XXX contribution say, year. operating mentioned in incremental cost be worth rates China You million your you're all global some this Is reduced it close will where by, level or running offset overall somewhere earnings -- to products of your to curve? earnings

Yes.

our of demand then cetera. turnaround on total million based $XXX the And pricing it's about from kind And get units having what -- of top costs, our about of of on that higher is additional reduce to network on basically a for et at having Acetyl built-in so catalyst maintenance billion if period X productivity, coverage really in output Foundational the to it, I acetyl in then $X.X like XX% there's higher energy So chain. foundational from in costs, that's is XX% costs, about the raise and we so totality our to of think Lake. reduce by call it acetyl earnings global of of Clear level ratable were and raising kind X.X. already And based outage earnings things to obviously, upside reduce

Our Mitsch with Fermium of questions from next line Research. the come Frank

curious the Clear as is Lake should to to and projections the mechanical industry operating completion the gave the at of I acetic balance was of year this facilities. on think have. about that the other next and going some acid How know I you Yes. the we for some for facility. impact how your earnings just Congratulations may for this your year. overall rates impact

Yes.

Frank. thanks, So

reduce you gas QX. prices there we're supply so. We Reduce we're and the phase at we'll Singapore rates and facility are continue we our the us, and see able Europe volumes seeing, I higher the moving coming anticipate U.S., now out running now and our location commissioning do at natural Clear to greatly of mechanical to which Europe global China Lake. at demand. could into behind would have rates advantages higher even production which be completion from in effective operating to anticipate cost rates, because and would entirely as that to it's of U.S., lower in in Look, the the happy supply

shipments that you know don't see I Asia. really opportunistic to

half, the second as is I that's vessels in supply availability et of that, Although around up But receiving volume there open are cetera. could limited. of the though, availability that other well. arbitrage mean, constraints tankage, possible of and

the of producer we need think cost I able And the volume of acetic only but acid also lowest it, acetic world. be of producer we'll in now carbon lowest is it what to a acid significant footprint in not realize Lake world. is Clear to the the produce is

think be of bring And so see the as lot I more -- make you able for and Asia cheaply that up the Europe will in to to much from volumes U.S. from clearly, open some we going on Europe a it in volumes the to we'll from Lake impact Clear think terms impact industry, of service opportunities is moving

flat ramp of ramp -- And then, VAM are second operating acid facility. you restarted So the and the of other non-Zing back your acetic to quarter. some be the as we do would out up think operating Where your rates at in intent recently guys you of facilities. run some look course, that

you If that well, area VAM helpful. would the as about operating be rates talk in could

aceic bit Yes. It maybe operating little globally time still to time that VAM from which still is bit for are range. XX% and stable, business. of kind industry just been acid in XX% of for unusual a lower, so that in both trending rates Look, range. towards both has are a but kind this

down, seasonality. last again, that at normal and has been those the months gotten operating For X people comfortable demand have levels

it is the or some getting BAM we downstream where we past demand derivatives. -- at and that's positioned really asset that so start feels between And or either either short-term really I to comfortable. quite unplanned any downtime globally we've in take And any mean, when of or occur opportunity the the or misallocation now regional in advantage of are supply seen planned But either XX%,

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

demand because issues had have to few up of with construction I I demand of a also outages trying sort the wanted bit strong but our shipments what equation the reconcile try to very follow that and to for. on the in one think on own unplanned Obviously, of having we in what versus little here acetyl chain. building over to we a side years, been the of I’ve issues lot been the is last is the underlying account S&D had number models demand

today how when how rates what here couple shipments understating now might and can of So actual overstated demand of the versus like about you maybe sit underlying next the demand much and what is think terms years. instant in thinking in maybe have that through operating over the past demand reconcile do and you shipments look

out issues bit the confusing a and all XXXX. when And certainly some demand. and meet a say. to fairly existed in of very fourth supply low, chain we wasn’t been would off, even before enough year, there at started Asia, it’s forward, like you different operations go first of molecules I If Look, saw the higher as call people of people that the particularly Yes. although were coming look stable, carrying really demand prices we also we that molecules VAM still of we and just shipment a time were I lot customer moving seeing saw and things. world, inventories mean, last quarter around half emulsions, there anticipated the as of because in we Frank,

that a higher we quarter, at people the lot And through quarter. saw destocking fourth call. were carrying reduction so fourth people earnings really the in demand in out saw inventories We we when the last called the

a new especially now builds, downstream And a in say efficiency, first in so do still, Asia, and weak fibers – in we but other like quarter and would seeing is March in in products derivatives as little back through construction, for construction. where say, end seeing the Construction in users. beyond, although moved for the I spot, we’ve even see coming I’d demand recovery much we’re in renovation for bit not our recovery energy lot recovery Europe, go. of of we’re

coming with we exceptions. seeing again are So demand a back few the

to we’ve not period as been feel restocking chain a stable in fairly the And comfortable is so haven’t yet and starting volumes issues. supply the up. But had occurring really seeing because such people that bring we’re

can I think customers they feel fairly they want. the confident materials get

As we uplift some higher we demand, see expect demand see pricing and some of I tightening continue the level some to see of pricing across seeing should we’ll all with increase, regions. And restocking. that

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

first just split how much guess the coming cost volume the be you coming that into uplift be coming about be was from XQ $X like mean, would $XX of be from synergies XQ I I very be that full thing could noted and But XQ. XXX will the -- how $X internal control? or is would year. so evenly your of the be XQ the and maybe X walk much kind to between uplift, I guess, you relatedly, split from I say that, how maybe and XXX, evenly, something from seasonally how know you that then higher from typically would dollar is if XQ, through feel about you're Would M&M under the level looking of Or at equivalently? reductions and walk much XQ helpful. with for comfortable much

Sure.

with We that within that's very So the the me ability That's bottom way $X.XX further end of kind we've have would again as with much raw to see. I the with which that called the let more a of require out To the I feel now. control. things uplift, all range, develop across we've to to which $XX. we of end a mean, the our XXX our seen then moderately in be sight Combined in markets like the some us improvement controllable those the get energy, with we're get end assuming would demand materials say to what of quarter is start actions, end the out, of continue probably dollar -- line that range, calling again, would upper combined clearly would $XX. and markets. the

usually terms you're QX. so Usually, a is right. of QX bit in timing, And than higher

wouldn't would expect a have don't much we yet. on But visibility them be think really of to lot year. I that different I I that actually say, this

seasonality is QX. get seasonality in Although That Western in the Hemisphere. we typically

very Asia, which QX. Now with to in we more exposure the in much be acquisition, have tends strong

Engineered in in building we're had Materials, that And recovery, so in recovery QX and be QX as for number expect for we've fact, some years we have our example, those that would would as well been QX. QX. will in I healthy So in for synergies before synergy when be if the levels throughout very we've highest similar

QX. would would be higher and right a been I quarter I similar, has than although QX QX So I typically, QX to say expect -- now,

Great. around second of at then half theoretically the to $X And earnings. as exiting just a a follow-up, you're level year going be

still, be just demand that modest a environment. of next maybe and year, would So reflective

expect growing you 'XX a and fair into would that kind and that from similar second to of there, look you is point? as half So continued starting growth

starting and a a continue the benefits grow of We've a tow I of which as Yes. continue grown demand we get the a kind Look, we Clear mean, year-on-year. point. well business M&M. of some environment, on variation think from assuming I things. get have basis other additional quarter-to-quarter seasonality year-on-year our But steady some benefits Lake own expansions, because including we'll range Materials other to obviously, from double-digit integration move acetyls And Engineered that's as further historically having to will into fair as online forward. the will in of will

when think XXXX. thinking So I that's an you're start unreasonable to place about not

the Ahmed line with Hassan from Come of Global. Alembic

able A business sort talking self-help of overall. to synergies EBITDA. around boost in sort about of of slightly earlier, I to as some guided the from the $XXX mean north were million attain you M&M XXXX $XXX well as worth million to question of of being measures around

sort of beatable? do stand still those numbers attainable, with Are So that Where we that? tracking? how is

Yes.

the So XXX before end we to range. of M&M top that fully XXX out expect called at We synergies. had to of be

from track second $XX and There's on M&M. second are build about in to had million another quarter through continue In $XX synergies quarter, of will $XX added the the year. that we that. or million for we that So to the million be

very from I also options it uplift value will of the model feel forward wanted we in we sales, uplift gives from part comfortable very Those the XX spot there comfortable So be able. going way. than running which to upside feel having us have it we first every think We a in $XXX achieving synergies million to more and to got was in had of but be we've was in it different year. million quarter of XX quarter, in that acetyls and first M&M into integrated our It the to quarter, very capture shows past. the to we million achieved of the that obvious this additional that an

very So with to. I that feel comfortable number on

I think the other thing productivity. is

track achieved achieve these of that or first historically $XXX the that business range we are And at above gross synergies. of end productivity. are million $XXX Through on productivity productivity. from top to separate quarter, year we've M&M on a million So to

of in M&M, So I as things we've those talk the to feel relative these think laid all recovery the that when we volume delivering all on we recovery like as on the delivering pricing about self-help, well and really out areas deal. we're

of nice uplift Fair as QX term, reported guys obviously, sort where of low in you move some should sort margins that look eventually QX, a of had of margin of as see from expect margins? near-term sort in longer of you business. helpful. we you sort EBITDA beyond, of a EBITDA historically, the I to those into sort EM you Because reporting margins the And guys sort EM sort of to in enough. gave QX. margins Very guidance levels around mean, But mid-XX% perspective, of do showing of XX% bump XXXX you at well pre-M&M EBITDA were margins And for a up EBITDA and business follow-up, we towards sort sort businesses going? EBITDA range.

XX%. Materials Engineered was in Look, QX, about Yes. the combined

We really across up expect the as lift M&M move year the that business. we EBITDA margins on the to

is the by I fully of realize around I think as actually continue and the XX% year. the our will And grade years. range to M&M the we continue expect XX% that about level we to that margins, last EBITDA should the the value which more XX% to synergies high we to few into continue for been the that grow end we of portfolio as of more we year, as historical where So base be grow in business move we've

come questions Research. the of with Jaideep Our from next Field On line Pandya

Thanks.

Just guys I can the you making balance But on not of business. want you this want the business, because and that everything lot understand sure starving the quite changed issue. first my to has doing M&M. But say, to for it's you capital have the very rightsize of you're of That's significantly sort commendable loaded focus deal, a there's since are not gone with the the rights world you're and how EM just sheet to question. legacy debt

China. in landscape competitive the on is question second The

and of coming capacity lot Nylon foliation in X a As X China.

value in for this create pricing you the China? chain of is actually the Or chain, to in polymerization the putting just So in context do benefit long going is on going because you headaches

thing EM, Celanese forming to legacy months in around I realize the is focused X question last Look, X on really team. we've the in the think

organization Santoprene leaders under the culture pick of Celanese. X line we we've place set the focused best really And of together, organization. of put have So all our combined on could that that groups of we out under business businesses, brings in an developing a new including

business, for part do each talk So -- X we're as we're looking we're this not of call, doing how benefits although the it in the running about businesses. separate we of not

running We're business. it X as

platform. sales same the on everybody have We

project We been have capital at processes We our the in have combined. look everybody model.

same look at in way. we So it the

the systems, one we the -- as how IT are of combined any the with terms financial still it risk integrate because can as we think track it, in because currently X benefit team, So full of it though customers we we to we're running to of Celanese don't until able approaching part we're at running we're But a their of other X separately. have products. really ignoring even sales business one I slate systems are if business now,

if now it's just And the build revised that the capacity really be We have may we may because you -- in done timing really, our look CapEx. we to project of say, have the really look the integrating to of of now reduction to you outlook we also some on have align projects don't if at go about reduction concerned and M&M at ground. we've reassessing the you views it. callouts capacity the in of use the with into CapEx, But demand

we optimizing led projects or has really the capacity. delay some eliminate us to capacity combined do we have, had thought that So we to of need the which would gain

So we haven't really canceled any projects. material

in to We maintenance and haven't our reliable our made us the and new any footprint demand of significant mean new really a is a about optimizing that capacity CapEx on Asia. PAXX is to our those And the have cuts there polymerization make coming forward. forecast question This reliability PAXX, on the supplier on adjusting go for with I going customers. lot then of things and we

fibers. PAXX very into it a a Engineered into portion is goes actually majority remember vast to production goes thing X of think small I of Materials,

that others. doesn't really into a it compounding mean dumb I so all function materials. And engineered of is and

have one we so material on we chain building the why It's in contract choice can optionality terms of most whichever been a so versus allows is, focused us of is that have we're more the the back LODAXX It our prices, of do take a though, buy it raw that That's we we're our control of available. at or level totality polymer, attractive. supply into reasons to make to to have a really why flexibility. if to to really get if of continue see that's and produce inventories advantage why trying an we able ourselves. footprint that's to material make our looking advantage be to economically

X more Darryl, question, please. take we'll

line Credit with Roberts Suisse. John from comes the question Our next of

of the model. How their You and you over project characterize Converted would number versus M&M legacy Celanese backlog pipeline new Celanese the and to projects backlog?

That's and you their new me. I'd the model, this a question. if good say I'd front with willingness we pleased value will, I I'm in use not being helps what And number is projects to a people of to the really What how it Celanese. have we've been sure transition that have as understanding through adds this growing Again, organization. of are say and for. their move we that understand are looking tendered into everybody we're the combined one

have one We team. sales

And project in so good. pipeline our is the growth

little but that, M&M bring in are hope we to interesting portfolio We also T&I able separate finding market. to we from lot a be the are a things bit of to

working. we time would And as so see I the get fully I over adjusted everybody to think accelerate and way expect to just board on it Celanese of

enough Have disruption. you energy an made VAM a plant cold if And supply there's get in then shut winter unit of you to you've keep Germany. some restarted If in again spike? that or it the scenario? changes new will just we sort Or down up end that

a its attractive, so it I it would taste shut own, to down more and last still down it of it low, the situation on when was been U.S. year we the there supply global would demand material attractive was the say John, economically economically out run So economically was have it was but

was is really It attractive unit. is high there. is saw is question a it it globe. an across the the we It So efficient. cost related total prices demand to really profile of It energy

keep what that, intent our not what demand of run most to we our would economically our decisions make hope run entirety and to at based would look with what's run be to up So We portfolio will on about always and but it. attractive.

to the over Thank further remarks. you. hand questions closing at for like I'd time. no any back There Brandon this are to Ayache call

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

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

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

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