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1
Dave Weidman, President and CEOJohn J. Gallagher III, Executive Vice President and CFO
Celanese 2Q 2006 EarningsConference Call / WebcastTuesday, August 1, 2006 10:00 a.m. CT
2
Forward Looking Statements, Reconciliation and Use of Non-GAAP Measures to U.S. GAAP
This release may contain “forward-looking statements,” which include information concerning the company’s plans, objectives, goals, strategies, future revenues or performance, capital expenditures, financing needs and other information that is not historical information. When used in this release, the words “outlook,” “forecast,” “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements are based upon current expectations and beliefs and various assumptions. There can be no assurance that the company will realize these expectations or that these beliefs will prove correct.
There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements contained in this release. Numerous factors, many of which are beyond the company’s control, could cause actual results to differ materially from those expressed as forward-looking statements. Certain of these risk factors are discussed in the company’s filings with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it is made, and the company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. This release reflects three performance measures, operating EBITDA, adjusted earnings per share and net debt as non-U.S. GAAP measures. The most directly comparable financial measure presented in accordance with U.S. GAAP in our consolidated financial statements for operating EBITDA is operating profit; for adjusted earnings per share is earnings per common share-diluted; and for net debt is total debt. Use of Non-U.S. GAAP Financial Information
Operating EBITDA, a measure used by management to measure performance, is defined as operating profit from continuing operations, plus equity in net earnings from affiliates, other income and depreciation and amortization, and further adjusted for special charges and other adjustments. Our management believes operating EBITDA is useful to investors because it is one of the primary measures our management uses for its planning and budgeting processes and to monitor and evaluate financial and operating results. Operating EBITDA is not a recognized term under U.S. GAAP and does not purport to be an alternative to operating profit as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Because not all companies use identical calculations, this presentation of operating EBITDA may not be comparable to other similarly titled measures of other companies. Additionally, operating EBITDA is not intended to be a measure of free cash flow for management’s discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements nor does it represent the amount used in our debt covenants.
Adjusted earnings per share is a measure used by management to measure performance. It is defined as net earnings (loss) available to common shareholders plus preferred dividends, adjusted for special charges and other adjustments, and divided by the number of basic common shares, diluted preferred shares, and options valued using the treasury method. We believe that the presentation of this non-U.S. GAAP measure provides useful information to management and investors regarding various financial and business trends relating to our financial condition and results of operations, and that when U.S. GAAP information is viewed in conjunction with non-U.S. GAAP information, investors are provided with a more meaningful understanding of our ongoing operating performance. This non-U.S. GAAP information is not intended to be considered in isolation or as a substitute for U.S. GAAP financial information.
Net debt is defined as total debt less cash and cash equivalents. We believe that the presentation of this non-U.S. GAAP measure provides useful information to management and investors regarding changes to the company’s capital structure. Our management and credit analysts use net debt to evaluate the company's capital structure and assess credit quality. This non-U.S. GAAP information is not intended to be considered in isolation or as a substitute for U.S. GAAP financial information.
3
Dave Weidman
President and Chief Executive Officer
4
Celanese Corporation Q2 2006 Highlights
* Based on diluted shares of 172.1 million as of June 30, 2006, and a 28% effective tax rate
Net sales increase 11% from prior year
Operating profit rises 7% on strong business performance, fewer special charges and cost improvement
Diluted adjusted EPS up 34% to $0.71
Operating EBITDA increases 18% to $308 million driven by strong affiliate performance
in $ millions (except EPS) 2nd Qtr 2006 2nd Qtr 2005
Net Sales 1,674 1,506
0.53
262
Diluted Adjusted EPS* 0.71
Operating EBITDA 308
4
5
John J. Gallagher III
Executive Vice President and Chief Financial Officer
6
Celanese Corporation Financial Highlights
in $ millions (except EPS) 2nd Qtr 2006 2nd Qtr 2005Net Sales 1,674 1,506
(135)
152
67
(27)
14
0.53
262
SG&A (153)Operating Profit 163Net Earnings 103Special Items
Special Charges (12)Other Adjustments (13)
Diluted Adjusted EPS* $0.71Operating EBITDA 308
6* Based on diluted shares of 172.1 million as of June 30, 2006, and a 28% effective tax rate
7
Chemical Products
Second Quarter 2006:Strong earnings on continued high utilization across industry, inclusion of sales from Acetex acquisitionSome margin compression in basic chemicals acetyl derivativesHigher dividends from Saudi cost investment (IBN Sina)
Strong integrated chain of acetyl products
in $ millions 2nd Qtr 2006
Net Sales $1,194 up 10%Operating EBITDA $206 up 8%
7
8
Ticona Technical Polymers
Second Quarter 2006:Operating margins expanded on increased sales and reduced spending Increased penetration in key customer segmentsImproved demand in European marketRaw materials continue to be volatile
Focus on increased growth through innovation
in $ millions 2nd Qtr 2006
Net Sales $230 up 3%Operating EBITDA $67 up 22%
8
9
Revitalization still on trackLower volumes on reduced tow sales to China offset by higher pricingReceived $21 million dividends from China affiliate
Performance Products
Stable earnings on continued strong sweetener demandPricing declines consistent with strategy of sales to large-volume customers
Attractive, cash generating businesses
Acetate Productsin $ millions 2nd Qtr 2006
Net Sales $176 up 2%Operating EBITDA $55 up 162%
in $ millions 2nd Qtr 2006
Net Sales $48 up 2%Operating EBITDA $21 up 17%
9
10
Significant Contribution from Equity and Cost Investments
36
10 17 19
14
77
39
0102030405060
1Q 2005 2Q 2005 1Q 2006 2Q 2006
Dividends - Cost InvestmentsDividends - Equity Investments
15 1221 18
147
7
39
0102030405060
1Q 2005 2Q 2005 1Q 2006 2Q 2006
Dividends - Cost InvestmentsEarnings - Equity Investments
• FY 2005: Income impact of $150 million
• FY 2006 guidance: income impact similar to 2005
Income Statement Cash Flow
10
11
Hidden Value through Equity Affiliates
Cash and Proportional EBITDA of Equity Affiliatesin $ millions
Net Earnings Equity Affiliates
Not included inOperating EBITDA
Total proportional EBITDA from Equity Affiliates
Total proportional EBITDA not properly reflected
0
20
40
60
80
100
120
140
160
2003 2004 2005 2006 2007
Proportional EBITDA above Earnings (Hidden Value)
Included inOperating EBITDA
11
12
Capitalization(in $millions) Dec 31,
2005Mar 31,
2006
354
1,718--
1,718800165412
3,09577
322
3,494
418
3,912
3,140
June 30, 2006
312
1,712--
1,712800157460
3,12975
314
3,518
308
3,826
3,206
Cash
Senior Credit Term LoanSenior Credit RevolverFloating Rate Term Loan
Total Senior DebtSenior Sub Notes ($)Senior Sub Notes (€*)Other Debt
Total Cash Pay DebtDiscount Notes Series ADiscount Notes Series B
Total Debt
Shareholders' Equity
Total Capitalization
Net Debt(Total Debt Less Cash)
390
1,708--
1,708800153397
3,05873
306
3,437
235
3,672
3,047
* Translated at 1.2713 - effective date June 30, 2006
13
2006 Business Outlook
Chemical Products
Favorable industry dynamics
Continued strong global demand
Ticona
Increasing penetration in key customer segments
Improved global demand
Positive impact of COC sale
Acetate Products
Improving earnings with progress on restructuring
On path to improved profitability levels
Performance Products
Strong performance on demand growth
Moving toward specialty-chemical performance seasonally stronger 1st half
13
2006 Adjusted EPS Guidance
$2.50 to $2.80
• Strong performance from operations
• Acid expansions to be absorbed throughout the year
14
2006 Guidance
Adjusted EPS: $2.50 to $2.80Depreciation/Amortization• $275 - $300 millionCash Interest Expense• $230 - $250 millionTax Rate• 28%Capital Expenditures• $200 - $250 millionCE Equity• 158.6 million shares common stock outstanding• 1.5 million stock option grants*• 12 million shares convertible preferred
* Based on total of 11 million stock option grants valued using the Treasury Method as of June 30, 2006.
14
15
Appendix
15
16
Reg G: Reconciliation of Diluted Adjusted EPS
Table 6
Adjusted Earnings Per Share - Reconciliation of a Non-U.S. GAAP Measure
(in $ millions, except per share data) 2006 2005 2006 2005Earnings from continuing operations before tax and minority interests 146 123 307 136 Non-GAAP Adjustments: Special charges and other adjustments * 25 13 35 61 Refinancing costs - - - 102 Adjusted earnings from continuing operations before tax and minority interests 171 136 342 299 Income tax provision on adjusted earnings ** (48) (33) (96) (74)Minority interests (1) (13) (1) (38)Earnings from discontinued operations, net of tax - - 1 10 Preferred dividends (2) (2) (5) (4)Adjusted net earnings available to common shareholders 120 88 241 193Add back: Preferred dividends 2 2 5 4Adjusted net earnings for diluted adjusted EPS 122 90 246 197
Diluted shares (millions)Weighted average shares outstanding 158.6 158.5 158.6 150.2Assumed conversion of Preferred Shares 12.0 12.0 12.0 12.0 Assumed conversion of stock options 1.5 - 1.4 0.1 Total diluted shares 172.1 170.5 172.0 162.3Adjusted EPS from continuing operations 0.71 0.53 1.42 1.15
Earnings per common share from discontinued operations - - 0.01 0.06Adjusted EPS 0.71 0.53 1.43 1.21
* See Table 7 for details
** The U.S. GAAP tax rate for the three and six months ended June 30, 2006 is 29%. The company is using the 28% rate reflective of the original
guidance in Q1 2006.
Six Months EndedJune 30,
Three Months EndedJune 30,
17
Reg G: Reconciliation of Net Debt
Table 5
Net Debt - Reconcilation of a Non-U.S. GAAP MeasureJune 30, December 31,
(in $ millions) 2006 2005 Short-term borrowings and current installments of long-term debt - third party and affiliates 174 155Plus: Long-term debt 3,320 3,282Total debt 3,494 3,437Less: Cash and cash equivalents 354 390Net Debt 3,140 3,047
18
Reg G: Reconciliation of Special Charges
Table 7
Reconciliation of Special Charges to Total Special Charges and Other Adjustments
Special Charges:
(in $ millions) 2006 2005 2006 2005Employee termination benefits 9 6 11 8 Plant/office closures 2 1 - 2 Total restructuring 11 7 11 10 Asset impairments - 24 - 24 Insurance recoveries associated with plumbing cases (2) (4) (3) (4)Other 3 - 4 35 * Total 12 27 12 65
Other Adjustments: **
(in $ millions) 2006 2005 2006 2005Executive severance & legal costs related to Squeeze-Out 13 - 23 - Favorable impact on non-operating foreign exchange position - (14) - (14)Advisor monitoring fee - - - 10 Total 13 (14) 23 (4)
Total special charges and other adjustments 25 13 35 61 * Termination of advisor monitoring fee** These items are included in net earnings (loss) but not included in special charges.
June 30, June 30,
Three Months Ended Six Months Ended
Three Months Ended Six Months Ended
June 30, June 30,
19
Reg G: Reconciliation of Operating EBITDA T
abl
e 1
Seg
men
t Dat
a a
nd R
eco
nci
liatio
n of
Ope
ratin
g P
rofi
t (Lo
ss) t
o O
per
atin
g E
BIT
DA
-
a N
on-
U.S
. GA
AP
Mea
sure
. *
(in $
mill
ions
) 20
0620
0520
0620
05N
et S
ale
s C
hem
ical
Pro
duct
s1,
194
1,08
52,
363
2,12
9 T
echn
ical
Pol
ymer
s Ti
cona
230
223
461
462
Ace
tate
Pro
duct
s17
617
234
333
7 P
erfo
rman
ce P
rodu
cts
4847
9794
Oth
er A
ctiv
ities
688
129
20 I
nter
segm
ent e
limin
atio
ns(4
2)(2
9)(6
7)(5
8)To
tal
1,67
41,
506
3,32
62,
984
Ope
rati
ng P
rofi
t (L
oss
) C
hem
ical
Pro
duct
s14
115
530
333
2 T
echn
ical
Pol
ymer
s Ti
cona
385
7944
Ace
tate
Pro
duct
s29
1052
20 P
erfo
rman
ce P
rodu
cts
1615
3328
Oth
er A
ctiv
ities
(61)
(33)
(107
)(1
16)
Tota
l16
315
236
030
8
Eq
uity
Ea
rnin
gs
and
Oth
er I
nco
me
/(Exp
ens
e) *
* C
hem
ical
Pro
duct
s16
(6)
258
Tec
hnic
al P
olym
ers
Tico
na15
1629
28 A
ceta
te P
rodu
cts
21
2
21
2
Per
form
ance
Pro
duct
s1
-
1
-
O
ther
Act
iviti
es(6
)18
(2)
10To
tal
4730
7448
Spe
cial
Ch
arg
es
and
Oth
er A
djus
tme
nts
***
Che
mic
al P
rodu
cts
83
74
Tec
hnic
al P
olym
ers
Tico
na(2
)20
(4)
21 A
ceta
te P
rodu
cts
-
-
-
1 P
erfo
rman
ce P
rodu
cts
-
-
-
-
Oth
er A
ctiv
ities
19(1
0)32
35To
tal
2513
3561
Dep
reci
ati
on a
nd
Am
ortiz
atio
n E
xpen
se C
hem
ical
Pro
duct
s41
3979
73 T
echn
ical
Pol
ymer
s Ti
cona
1614
3229
Ace
tate
Pro
duct
s5
912
18 P
erfo
rman
ce P
rodu
cts
43
86
Oth
er A
ctiv
ities
7
2
1
2
4
Tota
l73
6714
313
0
Ope
rati
ng E
BIT
DA
Che
mic
al P
rodu
cts
206
191
414
417
Tec
hnic
al P
olym
ers
Tico
na67
5513
612
2 A
ceta
te P
rodu
cts
5521
8541
Per
form
ance
Pro
duct
s21
1842
34 O
ther
Act
iviti
es(4
1)(2
3)(6
5)(6
7)To
tal
308
262
612
547
* O
ther
Act
iviti
es p
rimar
ily in
clud
es c
orp
ora
te s
ellin
g, g
ener
al a
nd a
dmin
istr
ativ
e ex
pens
es
and
the
resu
lts fr
om
AT
Pla
stic
s an
d ca
ptiv
e in
sura
nce
com
pani
es.
** I
nclu
des
equi
ty e
arni
ngs
fro
m a
ffili
ates
and
oth
er in
com
e/(e
xpen
se),
whi
ch is
prim
arily
div
iden
ds
fro
m c
ost
inve
stm
ents
.
***
Exc
lude
s ad
just
men
ts to
min
orit
y in
tere
st, n
et in
tere
st, t
axes
, dep
reci
atio
n an
d am
ort
izat
ion.
Thre
e M
onth
s En
ded
June
30,
Six
Mon
ths
Ende
dJu
ne 3
0,
20
2005 Operating EBITDA by Segment
20
in $ millions 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
191 198
50
17
17
(32)
250
55
197
32
28
13
(13)
21
18
(24)
261 257
Full Year
Chemical Products 226 812
Technical Polymers Ticona
67 204
Acetate Products 20 86
Performance Products
16 64
Other Activities (44) (113)
Total 285 1,053
21
Reg G: Reconciliation of 2005 Operating EBITDA
Q1
2006
Q1
2005
Q2
2005
Q3
2005
Q4
2005
FY 2
005
Net S
ales
Che
mic
al P
rodu
cts
1,04
41,
085
1,10
01,
107
4,33
6 T
echn
ical
Pol
ymer
s Ti
cona
239
223
212
213
887
Ace
tate
Pro
duct
s16
517
216
216
065
9 P
erfo
rman
ce P
rodu
cts
4747
4640
180
Oth
er A
ctiv
ities
128
5569
144
Int
erse
gmen
t elim
inat
ions
(29)
(29)
(40)
(38)
(136
)16
521,
478
1,50
61,
535
1,55
16,
070
Ope
ratin
g Pr
ofit
(Los
s) C
hem
ical
Pro
duct
s17
715
598
143
573
Tec
hnic
al P
olym
ers
Tico
na39
518
(2)
60 A
ceta
te P
rodu
cts
1010
542
67 P
erfo
rman
ce P
rodu
cts
1315
1310
51 O
ther
Act
iviti
es(8
3)(3
3)(4
1)(3
3)(1
90)
197
156
152
9316
056
1
Equi
ty E
arni
ngs
and
Oth
er In
com
e/(E
xpen
se) *
* C
hem
ical
Pro
duct
s14
(6)
3636
80 T
echn
ical
Pol
ymer
s Ti
cona
1216
1510
53 A
ceta
te P
rodu
cts
-
2
-
2
4 P
erfo
rman
ce P
rodu
cts
-
-
(1)
-
(1
) O
ther
Act
iviti
es(8
)17
(3)
713
165
1829
4755
1
Spec
ial C
harg
es a
nd O
ther
Adj
ustm
ents
***
Che
mic
al P
rodu
cts
13
19(3
1)(8
) T
echn
ical
Pol
ymer
s Ti
cona
120
46
31 A
ceta
te P
rodu
cts
1-
9(2
4)(1
4) P
erfo
rman
ce P
rodu
cts
-
-
1
-
1
Oth
er A
ctiv
ities
45(1
0)7
547
1048
1340
(44)
57
Depr
ecia
tion
and
Amor
tizat
ion
Expe
nse
Che
mic
al P
rodu
cts
3439
4549
167
Tec
hnic
al P
olym
ers
Tico
na15
1413
1860
Ace
tate
Pro
duct
s9
93
8 P
erfo
rman
ce P
rodu
cts
33
43
Oth
er A
ctiv
ities
2
2
5
8
1
7 70
6367
7086
286
Ope
ratin
g EB
ITD
49 29 13
A C
hem
ical
Pro
duct
s22
619
119
819
781
2 T
echn
ical
Pol
ymer
s Ti
cona
6755
5032
204
Ace
tate
Pro
duct
s20
2117
2886
Per
form
ance
Pro
duct
s16
1817
1364
Oth
er A
ctiv
ities
(44)
(24)
(32)
(13)
(113
)30
428
526
125
025
71,
053