Celanese (CE) 21 Feb 242023 Q4 Earnings call transcript

Hello, and welcome to the Celanese Q4 2023 Earnings Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded.

It's now my pleasure to turn the call over to Brandon Ayache, Vice President, Investor Relations. Please go ahead, Brandon.

Thanks, Kevin. Corporation XXXX Celanese Conference the to Fourth Earnings Quarter Call. Welcome President is Relations. Brandon name of Ayache, My Vice Investor And with Officer; me Financial Ryerkerk, Operating Chairman today and Officer. on the the Officer; and call Board Chief Kyrish, Executive Chuck Scott Chief of Richardson, Chief are Lori

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

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

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

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

and Kevin, up go it that, for let's ahead open questions. With

[Operator Instructions].

is today from coming from Josh UBS. question first Our Spector

I for expectations of term. about was the and could near M&M term if wondering kind talk XXXX longer and both in your you business

to really in call improvement price So you earnings. improvement. cost of improvement if or an sure I'm market a of the assumption some out that's first quarter, seemed not

wanted the So market savings And clarify year? the everything of second, to and expect where exit cost else you versus layer you to how do kind that. on then

in since quarterly Josh. expect Thanks meaningful highest do and expect the first at lift in our If a quarter acquisition. be EBITDA in the Yes. fact, for first question, quarter, first really look to we quarter, we the M&M earnings

year, move through, that higher we material the that's lower costs materials through generating through raw biggest the is this of and think factor really starting I number pull plus but to the see of a cost The to things. fixed inventory. volume needed were lower

expect half of say to first the that's we I'd quarter. So see improvement the in over

the cost from of issue to optimizations that was the initial versus fixed that we then destocking We experienced M&M. fourth year the which improvements and for the auto start see seasonal we some an quarter, initiated last in recovery And in do expect we footprint announced.

more become in into of next year Although the I as well. and second half meaningful the to expect would actually those year

say, we pull evidence for seeing as fixed see see I'd that that start January variable so is of are to improving costs. margin we lower raws in inventory And we through and -- do

So that. we quarter, confident feel out areas in that in fourth bottom like for And we pretty and key see to some we're really Zytel, starting recovery there. the the saw

uplift we quarter we'll say well. So feel the meaningful year have as first and I'd the good that M&M next about in

reasons M&M business. say a would see continue it great I we All really bought as are to there. Fundamentally, the that still we

counted We to had have get backdrop difficult well we value as recovery just of some and been volume synergies growth hard it that has that the made as full the the very of a on.

in it if M&M think today that you find I demand would at a be what would accretive. would more we normal looked backdrop, be

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

across Can the how the completed Yes. as might an so far, integration remind that's what level of comment of TSAs implementation think kind a going you roll off? benefits company? ago. you few weeks Lori, I on of your just And us SAP be

question, for Thanks Kevin. Yes. the

a have only fast the we to it's not I should full worked integration. across live last but in that integration, standard. really on success Maybe effort, but including thanking which did version did make X. think the after obviously, over February hard worked out And The people XX finance, SAP service, do is in IT a in an role business as And customer this full we think really, effort, everybody. the organization of goes commercial the folks integration, businesses. X,XXX integration we SAP I It about had by by our have months any some time, very SAP So our went often start it. the actually who

already integrated after Celanese S/X they businesses earlier same is that the And last heritage had the year platform. onto SAP

have done. last And to will this major keep So the is would get our I help us as us together really integration. the layering the the in probably of to various data, to this the achieve step better say DuPont, rid et cetera. on synergy able really the now including of one able will -- on from platform, also processes really synergies to excited the platform, we help next work being getting level of people TSA being but to access

smoothly. integration say, I'd very the went

production running able we're paid chain, ship able to get we're are to an for an able and platform, take So the all, and well. to produce order, We're order. new on supply an order,

first the So on close And first the the say, I Great seen been no was so up of And our business. that that surprises. I'd remarkably gearing for happen. on now the made integration, extended order But we're that team far to it's smooth. platform. think new we've month-end kudos again,

then may, we from costs on or flat if here, tailwind for this expect if year? comment can And you trended input XXXX? sort outlook what cost secondly, And those might for I benefit your of

come will that raw So versus through pulling were know to raw a would who in able were we lower actions a And I happen, are much ago. the lower if of taken would what we about but you're knows year also very costs that we say, raws mean, material where cost, I I that on. cost mean, have of year the 'XX on deliver year being and I down 'XX. certainly, now talking is we fixed say built

the that think built year. to is for in, obviously, outlook our I so And

we've the all to that on, Celanese, important we is think want continue talked execution. at really we're year, thing At about I and control controllable. to what's good focused we're

that we've what I with think so done see you far.

projects we take able the at on same time. of to the All were

all well steps have really so as the we see in move we we in as And the as execution that 'XX. of 'XX, 'XX, into benefits

JPMorgan. question next Zekauskas Our coming Jeff today is from from

in $XXX year-over-year? XXXX that would million. in business that $XXX Does growth M&M be said that in the be the mean adjusted million the You at EBIT should M&M synergies least

factors No, Jeff. number because of there. Thanks, a

So the synergies $XXX majority and in but show vast of is them profile, of areas. The those also about show show other XX% this the year of EM M&M. them expecting we're in up other some up million. in do actually for BU up Only

Maybe the the exclusive to reframe expect different its grow it synergies? Do you business EBIT a way. M&M of to

Yes.

of to So outlook do yes, thank I our growth significant about heritage this misunderstood businesses about, across your remainder mean, called in in exclusive EM you. if for We we've -- the of integrated uplift our $XXX,XXX and think first probably question. year. really even EM sorry, from think expect M&M that synergies of $X year you from $XXX businesses million $XX $XX, uplift out we both the business. more comes at a year I the and the were for acetyls, the

today question from from is next Your coming Wells Fargo. Sison Mike

I wondering lot seems synergies headwinds in you everything, positives be help Just more bridge coming in us are a remaining XQ. QX. the if know could XQ the More there from to to and quarters. XQ and all

are does the EPS of a going the from of you And in remaining equal way the kind to think then last sort quarters, higher in at lot that quarters to X it? about is when look X how happen? basically $X So

good you that we're I look if Yes. the to at at it in expect I Mike. is, remaining it the still I $X.XX up the expect would to if quarters. second ramp look the expecting way we Thanks ] but for what more pretty [ a each in need of the we would question, math, quarter QX, do $X achieve to in well. The second as ramp half, says

think in the in QX about way, don't you So turnarounds this it you that had QX. have

lift. $XX a that's So million

have always in from first the back to, in quarter. that move project EM, lower we It's additional quarter. of that see start benefits it's returning majority quarter, of inventory. then EM, in through And in then the it's and the in synergies the as you comes vast the the to second should and some seasonality second AC, low lift come cost medical, flow-through the in And really we of quarter

and So some quarter because again I seasonality do expect be significant the but to we uplift say, QX more would in I QX. expect in a would we highest QX. uplift QX, in QX expect even would

assets then follow-up. quick companies a as And the Several over prepared acquisitions last it. from have Got years. of couple

are parts M&M Now any terms has of if but underperformed, And there what to that in I of are the so, know M&M close impairment levels? areas?

the us possibility. at Mike. time look that not this that when that's at a on level We've think to Yes, at EM point that have and seen taken in that, cause at time a would that markers look comes. We'll

is coming from Panjabi question from Next Baird. Ghansham

Obviously, of guidance? global on embedding [indiscernible] macroeconomic who high. sort to globally; pockets the destocking, basis, you a there's XXXX? relates your cetera, durable you still interest goods relates all to in as high-level of like Lori, factor it of sounds that as backdrop rates et sort China, side. in knows. the just ISM it on evolution still are How It are what do

control. stage, focused at I this would we say, really we what Look, are Yes. on can

assumed $XX diminishing is guide So our see we what in the destocking. we've $XX of the to of kind

getting are are destocking. to So that assuming we the we

really a though We uptick or not big are demand in assuming restocking.

assuming without would but of below absence kind I still of normal say, patterns, destocking. So we're the demand

on And really percent kind at -- outlook a one it's of the really few upside control. focused that our assuming we what can that is we're is So that's most. maybe the otherwise,

of I 'XX, the Asia we if less out materials We as is, normal look, out at patterns, some competitive in But Europe. into the like look starting would market, back I we're challenges starting say not. easing and I are in good although news think, had. of some I'd we're of we're we we're movement demand say mean, see to to demand we seeing called

we local to in So indicates China. And demand us that. that see improving is that

of consumption especially out say, China, But like levels. and order normal would is normal feel I we China is China into depressed, the exports Europe. still approaching for in of goods demand patterns generally,

So there's still some there. demand downside on

We saw that Industrial quarter. improvement was in seasonal there in to come quarter, I think and But which the again, first consumer saw come the in back in the in we reduction goods in huge but demand gradually. I the fourth seeing auto, anticipating uptick we're some for electronics. demand a expect destocking. Americas, back not then

return thing to construction I'd to the seeing of Europe, I longer U.S., the In some would demand. are mean, we a look, kind is, other we before could but add improvement I time similar normalizing. though even frame probably in say,

upward and as supported that's movement slight terms that's by pricing VAM So of good, a in well.

Okay. And sort that in line in demand? front-end both the with the for just of then Or were given XXXX of just those pull sort the Super loaded, seem original that weaker outages forward second helpful. question, but was plan?

No, I'd much with the very line in plan. it's original say

out of little X Lake. these the 'XX a in In back occur on the But project would turnarounds into I 'XX in of methanol. These at with are palm, years bit turnarounds. the every fact, case planned an Clear years a little case X in of we've pushed delay that say, are

very all the And through much And so well. very major discovery no also I gone gotten surprises. as would say and We've planned. they've work

feel to those plans we're our meet So on around like track turnarounds.

Your is from KeyBanc next Aleksey Capital from Yefremov Markets. question coming

This is Ryan for on Aleksey.

bit The announcing momentum little year? just expectations Are peer nylon seeing what in balance And a talk about here? first question, market in market you out least be the can some I might the for of one at I yours any the wanted pricing. of your believe to the into is dig pricing. you on

lot we Yes. feel margins. Look, in of hit by just region depending bottom of varies kind use. a end the we variable would by terms nylon like general, say, I pricing But in or

that's raws but just So it's pricing important, well. as it's not

we're because say, hand like So bit more the feel raws in to have general, I But here. I'd think can bottom. over give let come color coming Scott, But he down. we me off a it

No.

it, hit Ryan. I think Lori

which We thing. is a Lori stability, to good are variable seeing costs. And as starting a mentioned, really lot flow-through we're of see the of

us back closing said expanding that previous are lost that the continue some been business, nylon share to quarters, we as the work, get transaction. prior So in margins had of to in to and we

good the this way we through about So of the year our business. we trajectory feel work as nylon

in very trends in from being your just deliver dig That's on target? And do demand you to I confident bit there's you're for kind Great. still a into demand then the 'XX. improvement, little of helpful. that If able feel $XXX here, synergy target sideways if bridge no could million

Yes.

deliver to feel really million. our I $XXX So confident ability in on that

is I think look you really it if X buckets. in at it,

bottom taken in The the optimization that would really the line first of being up show this end footprint steps start to at year. we've next year the

the in year. about probably that's million So $XX

We year, TSA transition come synergies the year, and cross-sell have been start we which get which next the see we the from. And this which one start opportunities have have will gets the to out and which single from. happening is then other we'll now, us this year, platform, revenue SAP closed online identified to to return of

about very confident for XXXX. I feel $XXX that of So million synergies

question is from Next Mitsch Fermium from coming Frank Research.

were I missed just guys that. you if follow Apologies synergies your XXXX? could realized M&M If I up, disclose did what for

if sure we but not in what but beginning thought XXXX, year. of had disclosed had above year, $XXX will I'm later But through. we or They a we the pull those not, really, recovery, a that the the as the And than synergies the anticipated recover. just little for in not through still it million and lower are synergies earlier seen bit reason achieved synergies volumes volume in of we time volume volume-related there. the pulling related, some at not again, just was at

XXXX business suspect Got I million the Tow was know, of an 'XX, is going in if question you might what Chain. well you. out, have the it that the part be EBIT. the had Understood. and back to Can was of as during split I you performing could, flat that. been expectation to how Understood. back Acetyl a higher at is? that and when Acetate And relatively your Investor idea $XXX give outlook to than on it Day, I us 'XX

as really business. a contracted Acetate we that really we of the Tow and year good this how a managed had Look, year we has to work result year last did reset Yes. how

flexibility As the you'll our more be the much optionality, recall, part to give do more Acetyl we we pulled it in rest for and of us like projects. Chain to of

we thing our Day. the to I as the meaningfully target would earnings Investor exceeded chain. think the simply downstream Chain, the outlet stabilize get another I acetic through have and, million of the much we year. at called entire again, powders to way, with, we out we is say we the stabilize to them. running sure derivatives. I target are do pull other maximize just important say, So again, for the redispersible It we to was Acetyl gives chain that the that But $XXX would of part here say, value can acid us and chain from make like And

is question from Morgan coming Your Vincent next Stanley. Andrews from

and on Vincent. I was and This if the EV your wondering impact is on is autos for M&M mix of and could auto Turner sales Also, provide exposed combined Hinrichs China view you on in updated the builds to product M&M. EM for slowing business? EM XXXX, how

Turner. Thanks, Yes.

auto First, let builds. start with me

more the somewhere industry, think are build. I or less projecting most flattish publications

XXX Our build. basis business grow XXX to to tends points about above

-- we're vehicle. accessible the EM best. more mix a vehicle And what about content or So plan. the our we ICE it's When hybrids honestly, that's into an baking current EV, across have on it agnostic comes XX% largely, EVs, our hybrid portfolio, to to whether we're pretty an of are

So see here U.S., hybrid thing more the starting, for to to us particularly to shifts be tends a that in overall. good

impact no the if away really U.S. we in impact So from to here and hybrids. or move see the back mix to EVs ICE change

corporate China of And X/X overall, kind from our overall level, sales. of perspective, if start the at it's about a you

pretty as kind EM, exposure automotive well similar. into And is You China. down around of bring in that of range that overall terms our in

these lower expected raw get passed what's confidence how through be is XXXX? will to to not cost the the nylon, materials Of significant price? in in And that this

the through that earnings. nylon and the we going good that the A portfolio. for cost fixed the mentioned, of That chunk us. be we benefit a Lori year-over-year largest bucket the flow part is as variable think, to could lower think of is of have I M&M in

has as the it we it. of good as as see where a the nylon. year pretty we pricing happens lot year-over-year. significant driver in will upon we has things in uplift of in in given of well as half So first of bottomed Pricing, year. feel order the ability depend about kind the to materials the inventory book the what half of the We out A raw have are with earlier, said second that amount be

a downward expect don't see pricing where we from today. it of to lot So impact is

the we're we very margins that at in seeing confident here So least are feel half to first now right stay. here the

question from is Viswanathan Next coming from Arun RBC.

Deutsche next is Bank. from Our David coming Begleiter from question

acetyls in level earnings earnings can we've given the the Lori, foundational you in Clear expansion the this Lake of step-up to to coming talk stream year? acetate seen on post and

level I of mean, billion said pretty is today. we simple. earnings foundational Yes, it's $X.X

we think I or million, CCU is year, we and the combination acid year, being $XXX -- in sub-foundational the pretty that that year. markets by we Clear to should in productivity increase our And say, in really what to acetic expect get expect were which for of we've what most the XXXX proved project, from I expansion. expect next Lake of Panther this Panther

level a Have some could you assumed normalized our -- be? power acetyls earnings demand? of What

where look, mean, acetyls. were $X I we've Well, we years over billion had in

So we're demand what be outages focused things I again, now, fly-ups we of right that those because on control. mean, we supply very sorts when high. or and can can sudden But increases have of

of foundational And on I earnings. one for that so focus would point level

And thing. one more

Just on the beyond rate, XXXX? good is going X% a tax rate

David, is Hey, this Chuck.

do to that for that, if really use we we I'd expect 'XX. now you rate update for similar XXXX, and For changes. a will X%

pretty are a of we're now. on like jurisdictional update year, It like feel good position we depend but each that mix we earnings. we'll forward, position. Going right we're the And we good feel in will where in our a

from is Arun Viswanathan question coming from RBC. next Our

the get is first deleveraging on to guess, rapidly just cash to X turns -- with any target that I returns? can the as start free as we obviously opportunity on maybe more possible. cash and harvest opportunity flow yes, get earlier. to can there a to Is I expect us flow free how that bit to trajectory. working off, more just for Maybe you that. to Apologies or know walk through the capital, you Great. little

Yes.

the on grade. say and that Chuck year, are to I investment we But is, flow committed cash focused last we what very year, ask very free this me We're were would to Let generation deleveraging. of cover like maintaining details.

to our capital And so delever be in company. forward to of other flexibility that let will me use level, opportunities through in on going the and that anxious able have walk to we we are so you let the bucket. Xx But move Chuck, with

Yes. first, I 'XX. that teams Yes, in smart people. of global lot the Thanks, That's thank the we Lori. Thanks, work drove free to a have by that a record want results lot Arun. just cash of

just that to want I for your So salute efforts.

You you are know who there. out

take. seeing the 'XX, target now. for free a for give year working million that 'XX. translate key For incremental This year. you If 'XX million me of or cash million our drivers benefit net to $XXX benefit flow a give let with $XXX we our the income, we're earnings, for if $XXX for On $XXX little over you would about is cash that start capital, compares few take guide, with million in right into EPS

working not we're year. for as working the year-over-year, capital striving benefit but capital much within So still benefit

out we and puts lot million $XXX know There course, 'XX, a how are to should as XXXX. some on our year cash to like key and tax 'XX. But right the could depending balance million of are you to to would target, be focus we're on, those drivers. and year-over-year drivers finish are on key And refine closer in we going in large I focused across of synergies. expect and think to synergies $XXX that into goes how the achieve shapes projects. the we that takes And on finish now and really flow, that, deleveraging we demand earnings up Xx And need Those Xx this CapEx other lower of we do converting to as cash driver sheet. We much in as to of by year ramp. target our earnings this kind cost change know, our cycle

I Great. have quick And follow-up. just X then

M&M. stands on or be portfolio portfolio the you've the the gone anything it as food about about thinking integrating and management thinking some as now, horizon obviously, within Just else divestitures along as there should potential Is ingredients far changes that anything or those through lines? we

of M&M Thanks, Arun. to still activities. go and Look, acquisition Yes. the cleanup have ways we with the

I better S/X, get think milestone will through opportunities to other us as run for these allow find this businesses a is big us together. to we and

kind is first company us, it and the someone something as I would So comes we've always smart see worth in we that say, else is be if been, we it. opportunity divestitures, of, course, foremost, to more and focus. the as than will, is that. our But we to pursue that about also of to to it And divest opportunistic will,

coming Hassan next Ahmed question Global. is Alembic from Your from today

A Acetyl X-part with. question to on the start Chain

up, Your which to even in acid slightly acetic were margins did. flat surprising to bit me methanol what keeping to in the spread a sequentially was mind QX

X So question you is, margin of how did achieve that expansion? part the

of guys I have benefited would from. few XXXX And industry sit which outages, a imagine there sort acetic, seem then as to you been there and quite for think I about

as a million outages talking positive So of to $XX Is gave well? as to impact million XXXX one-offs. bridge you the guys baked earnings, that about into from sort us of that of you're headwind those $XX sort

question, the for Thanks Yes. Hassan.

outages a the by as highest model. down environment, as end unexpected uses given the given teams integrated to Let continuing and costs saw quarter is the of Americas me that that pulling saw that What team environment field this flexing economic as much and really the much and our flexing to team as the start value kind you some were the possible manufacturing in. of we to the in that in we're chain combination commending in of flex really possible the for production value fourth

to, year. move which may I those But to some level value expect of the acetyl the our of industry potential into not in GDP may any of to alluded us markets grow way we do think next that give some we as that out offset will kind happen. in you global kind or reverse outages As chain,

remain We in kind of expecting the are to utilizations XX% to range. XX%

you you year, dislocation we term. if tend in be the to markets, short that last see saw So some to benefit able from like much in

Very as helpful, follow-up the side of of And on you sort capacity. shut guys Scott. down nylon a M&M some obviously things,

talked a guys buy So near- the seeing on you your if about supply-demand parcel with make And as thought of and of maximizing could what medium-term part you versus in the to last sort bit of in talk what you're you're supply-demand that, seeing about nylon of the buy fundamentals make process in terms terms What's well? on nylon. light decision? quarter, versus fundamentals in

for for from creating is us, on really contemporary from. to that Not that And and are value compounds creation model much the customers maximizing value focus as comes comes but create for of a operating where part controlling as Our relying creating unique nylon. chain low-cost our possible. materials value, that raw that

dynamics We given where buy decisions, are, ability, you of some have make Hassan. those the to mentioned, versus as the make

that economic so we to focused, EBITDA of Acetyl is XX% compounds, working much are do do those cost model minimum be like But here competitive. to we what Chain, supply environment. we as that, on we And the to any is in create a in can remain fundamentally, we're lowest business going the

costs to out in controllable here with the in purchases first shutdown Asia. and production Americas that capacity we of as the low-cost then are of the as steps in well our maximize have take capacities that our Europe So

from Jefferies. coming Alexander from is question Next Laurence

in incentive the from XXXX? XXXX, EBITDA and the clarify you bridge to capital therefore, Can flows comp and impact working

Sorry, The that the things just came having million. question. from did for as I your we I reductions offsetting was AC. have that impacts intermediates was at it really impact. as it XX% minimizing And punitive the the materials well our XXXX, came trouble inventory hearing great our from while by time, EBITDA rest In of much about little sure same say, would Of and a didn't in to EBIT EM. of year, that, and job we $XXX a and raw an as took businesses making some reduced

just And it comp terms is of XXXX XXXX, Great. incentive the incremental versus in an headwind? Okay.

For be less this I would of hit the inventory level expect reductions, year, EBITDA for which similar will a that.

as that don't year-on-year So being a I headwind. see

Yes. I to expect be incentive it And wouldn't material comp, year-over-year. Laurence, on

next Tiano coming from Bank Salvator from Your America. question of is

you Thank very much.

first question on Acetyl ask year-on-year. seems It is assuming So will probably I you're wanted flat to like be acid [indiscernible] Chain. and acetic the

of if the supplies, actually it do So seeing once And an you What are from $XX additional China will part the in us online expansion. the Clear XXXX, Lake to to come growth comes the because in supply on this seems asset $XX risk? that guidance? the the not down, be could prices come that is

question. the for thanks Sal, Yes,

answer to it. try me Let

on few times here. cut a us You out

kind $XXX basis. through really coming around first about of talked productivity hit on me Let year-over-year Lori earlier million what a

the we some right about kind single in the with sector, we see line growth as be more to earlier. digits in earlier of mentioned on kind call, we by going construction in talked offset what Lori seeing now expect there given That's the of low the we're year. As of would outages so that GDP, had to earlier

already not industry has China. kind that would absorbed new that capacity I in online in utilization. less come focus on much So changes of or too more The has

really about projects. from So the productivity think lift our coming year-over-year

on more I just bit And a color little could if add maybe that.

end and as through China a on was actually at asset year, except steady industry. we look based it some into got through pricing was saw away the went we QX went that year, quarter. of But outages really at, say, for very the throughout the very -- actually fourth you that If the in the short very list short-lived

capacity to going well, saw online, come as to would already absorbed, XX% utilization. online been So that's still and than we're it's more I say XX% year last capacity last we year that come at and

'XX So additions we some impact adds capacity we much is in see 'XX, long-term smaller didn't the than in be 'XX, it while and pricing. there on a experienced really have may

Perfect. Okay. earnings, a trade Sea this ask Red that impact in for to I Europe. imports. nylon guess, Asia want may especially the imports affect how of about could some my And of close, Celanese time, But bit disruptions. we the little follow-up, to material Europe or assuming could to the I this regard And raw lower the posted I could more it being use. see in same at foam disrupt

So be you impact, what net would think? the

What at the global good a -- I chain sure value Suez, benefit challenges chain There Yes, of of chain, despite I'm we because for and not been Asia. added businesses, of been Red trying Sea But suppliers. supply the of are reflection be into the for folks that point time. has parts to there is supply Europe, also world. in from a lengthening of some supply global of say particular, the this the in able cost producers get this to any the that's because all for there'll and from provide would in other some our though, of has many our our

to What we're not is seen, I'd say, people most say increased as adjust So global cost. we've I'd of is lengthened new seeing supply the chain. the the temporary, effect

any in point the baking really issues not the in from loss this at Suez. uplift we're So or

Blair question from next Matthew Holt. from coming today Pickering, Your is Tudor,

a perhaps perspective? it might rather then see wondering, in auto overall Is you on their it have putting exciting previous the how for Or a overproducing automakers impact just concern way to running keeping shift is and was result about volumes? your And because Celanese's talking I higher So their and have it potentially could inventories margins low on Celanese? it going from everything the some do potentially margins the because forward you sale. of leaner and than been supporting lot

thing any seen, not really from us. see kind in We historically you because lower of material us a being And don't not carrying certainly a now. things as that mean, of downs But your I to just baked into don't impact. really bad think we've would ups future it's where and overall, are have we see kind it what be the think, if for right honestly, all. at already significant creates, destocking been less for restocking, impact about it I largely inventories,

on then productivity. Or what to And Is it of I estimate this potential this this your environment? normalized the Sounds more generate also $XXX just acetic like in Clear do think long-run for you in expansion, acid the Lake could a million want expansion? good. clarify EBITDA

justified the U.S. Europe, Lake on acid those remember, Well, well. to less we of shipping and expansion out freight acid, CCU of just catalyst Clear The productivity, energy savings, so Clear Lake of savings, the versus so project the sorts by Asia things. really

is tied say, the project, also was Clear would that that to very $XXX million, So our additional place project to at again was Lake generate use CCU really intact. put It site. methanol a for which low-cost just I in initially

a supply were for in if acid Now higher counting get on Clear what the XXXX. acetic for as forward we margins. saw think we're a in we from to of a growth, good feel as lower source we there'll customer situation 'XX, where be of for we we products, into Lake even rapid we project into we in go see production increase probably more demand and or demand could later have until based on is get would value If of again, if year markets, into in but we is tight not demand productivity the and justified return. and like lot periods obviously, a that 'XX, But that carbon use those which won't there that. the disruption, We a very greatly flywheel

for I'd would some and outages been to Gulf our Matthew, of Coast prepared the had have unexpected redundancy comments more add, other us new the the one it or that we operating. we had in offset adds network. And term U.S. unit called we less is that out near up acid in Yes, acetic benefits the had

the that future. network U.S. manage So redundancy of the us the to we've it near-term in Coast we're our able ensure those that had to some that in better in gives blips Gulf past,

coming John Roberts question next from is from Mizuho. Your

into to into odd Year. the back Sea Sea reduced Back with the before China Red Japan be Europe Lunar Do improving just you are on slipped coincident Red here. Asia Sal's And question and incidents It recession. I think think Suez. would that the exports the New seems

hearing we're from about Asia. demand in companies not So up picking other

Yes.

seeing started before the occurred issues Sea. we So that the Red really in

So I don't think they're related.

picking out the use in that move material in I Asia. for it Asia, does is is relate China, consumer demand of reducing up which amount again think to to of having

think subsequently, does So think I markets of of the impact we may continue it strengthening a the because see that Red but in really Sea, demonstrate Asia. I

Rubber. we area? track harder Is inventory sure about earlier cycle customer in Vamac not I'm in the heard to it that product secondly, stocking then And

some that auto. used product, a little have Look, unique highly primarily and is attributes, it Vamac marketing in some differentiated, is we a has in It unique high-value unique positions.

and so provided it not the in there it that to complementary. would have and reliability that people. of constrained it's also the future by to fact, M&M would we say was 'XX. complementary we was very a of But lot we, reasons Santoprene interested is and acquisition, in highly for high I one in projects, highly I would the were say, issues, found, be product 'XX due thought one actually line was demand, So of it

go mid-'XX, the one production, were when I that we and up, doing. buying the we've having customers would of increasing used volumes is everything they say saw on could our things the able they focused successful it. to reliability those to resolving we at we since issues up for So were were get to which acquisition because

fourth patterns low quarter back well, kind And as be see moved and high we had go then third and we saw normal supply year, we'll to will went the what better, I quarter, we And fourth the as they -- fourth second low quarter. to more in stability think saw and realized quarter. demand was in we point so of highs we forward, we think that the versus I in this the a

is from Pandya from Jaideep Our Field next Research. coming On question

Gap] is business is then is My nylons and sort back M&M. we go acquisition, the half of I the this first on [Audio did business this of to If half question China Asia. and

look current is this actually first $XXX this this nylons in you is the So at product-wise? Is where U.S. country? Asia? exact when the thought earnings question. outside versus Europe, Is level regionally or nylons? Or is of in in of shortfall That's and what my we this million,

[ chain. question have year, because upstream This Gap] [Audio pressure your the of Or supply push you more happy you of versus have will some stream Are and to VAE going upstream is with share? in position? you regards still a downstream? demand really sort more PPP acetic potentially, or acetic to market around to value the acid. What gain strategy is are in ] middle to

Yes.

me about nylon, let of mean, is but it nylon. high specialized So right, talk amount I significant temperature the a nylon, acquisition. some you're M&M is more

I really think the volumes at that in XXXX challenges is made lost acquisition have that that the pricing grade due standard were since more where nylon were around seen and we decisions time. in to

I now reduced think flow good what been the and of we lower done starting continue important, will to with cost really again variable to that has teams is get back, which have through in see a fixed continue happen will raws we job improvement that and as some lower costs. to margin and

X China, where stronger Europe. year. Celanese say were not. which there. I to Asia mean, stronger know very don't in They this the stronger. auto it wouldn't has was strong U.S., in specific strong as was been in region has nylon, actually market pretty really -- of outside while So was that a was or DuPont any been was stable They I it I it around weren't

we would of recovering environment. a demand any in volume been say the to specific to to the region, that but that a it's So loss specific challenge and taken in volume XXXX steps fairly it's more that start X have not I happened low

that. to Scott around acid, acetic question second your And maybe I'll take ask

we're we last and a been the current pushing and be to on of The standpoint from that for year. production to product Yes. downstream is a dynamics, next has heavy the market Very as the along lift us And what makes our dynamics Tow margin maximize to globally, VAE redispersible us business, in some earnings as the sense given seeing with lot make we downstream us just it just a to upstream, an more as similar continue of lot where current well saw pricing the as powders sense last for question talked in far one. it makes can. Kevin, we the Acetate as our we'll about. for

Certainly.

from Patrick Cunningham question Citi. from today is final Our coming

Maybe just a clarification.

turnarounds majority isolated or have XXXX? aware the of be On do are the to the in large $XX first And in million turnaround impacts, planned you other quarter? any early XXXX

Patrick. Thanks,

first in We're is million up the quarter. $XX $XX about last million year. the from So

of spread there's year, consistent with through X the probably But that's million remainder So remainder $XX the year. the another of across quarters. last

is would quarter. to 'XX all it incremental think first and I million, So occurring the in $XX of

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

everyone thank joining. to like We'd everyone. Thanks, for

out call. call As Kevin, any go have if always, close after we're around at all. ahead and you the follow-up the questions please

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

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