Celanese (CE) Q4 2009 earnings summary

Executive summary

• 2009 performance reflected recession-driven volume and pricing pressure; net sales fell to $5.082B from $6.823B, while operating profit declined to $290M from $440M.

• Demand began recovering in Q4 2009, with improving activity across some segments; the 2010 outlook anticipated a gradual global recovery and stronger growth in Asia.

• Strategic actions included portfolio pruning, production-capacity realignment, cost reductions, and investment in Asian growth and process technology.

Financial highlights

• Net sales were $5.082B, gross profit $1.003B, and operating profit $290M in 2009, versus $6.823B, $1.256B, and $440M in 2008.

• Net earnings attributable to shareholders were $488M in 2009 versus $282M in 2008; diluted EPS was $3.11 versus $1.73.

• Operating cash flow was $596M, up from $586M; cash and equivalents rose to $1.254B from $676M.

• Lower raw-material and energy costs lifted gross profit as a share of sales despite lower sales; selling prices declined with input costs.

Outlook and guidance

• 2010 demand was expected to increase as the global economy gradually recovered, with Asia outpacing other regions; raw-material and energy costs were expected to be modestly higher.

• Expected $100M of incremental fixed-spending reductions in 2010, driven by structural streamlining of manufacturing and administrative functions.

• 2010 capital expenditure cash outflows were projected at ~$265M, excluding the Ticona Kelsterbach relocation; relocation capex cash outflows were expected to be €200M.

• Acetyl Intermediates expected 2010 sales growth versus comparable 2009 periods; Q1 sales volumes expected to track Q4 2009, with lower margins from Q4 due to competition and higher input costs.