Celanese (CE) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales were $2.7 billion, up 2% sequentially but down 5% year-over-year, with operating profit at $250 million and net earnings of $153–$155 million; diluted EPS was $1.41–$1.42, impacted by $102 million in shutdown and M&A-related costs.

• Results reflect resilience and innovation amid significant external headwinds, including supplier outages, force majeure declarations, and weak demand.

• The company continues to focus on deleveraging, cost optimization, and capital discipline following the M&M Acquisition and recent joint ventures.

• Q3 guidance assumes stable market conditions with slight growth in auto builds, especially in China, and moderate volume growth from a strong product pipeline.

• Margin growth expected from synergy capture and lower-cost raw materials, with no significant market improvement required beyond auto.

Financial highlights

• Q2 2024 operating profit was $250 million; adjusted EBIT $451 million; operating EBITDA $632 million; gross profit $641 million on $2.7 billion in sales.

• Force majeure in Acetyls resulted in a $35 million cost impact in Q2 and an additional $5–10 million expected in Q3.

• Clear Lake productivity shortfall estimated at $40 million, with only half of the $100 million target expected this year.

• Synergies for the first half were $40 million, expected to more than double in the second half to reach $150 million for the year.

• Cash and cash equivalents were $1.19–$1.2 billion as of June 30, 2024; $500 million in debt repaid in Q2, with another $500 million targeted for Q3.

Outlook and guidance

• Q3 and H2 2024 outlook assumes stable macro, moderate auto volume growth, and margin expansion from synergies and raw material cost pull-through.

• Third quarter adjusted EPS expected between $2.75 and $3.00; full-year 2024 adjusted EPS guidance is $10.25–$10.75.

• Fourth quarter expected to benefit from synergy capture, Clear Lake productivity, and less seasonality.

• 2025 expected to see continued self-help, additional M&M synergies, full Clear Lake productivity, and lower interest expense.

• Free cash flow in 2025 expected to improve due to lower cash taxes, reduced interest, and stable CapEx.