Celanese (CE) Q4 2010 earnings summary

Executive summary

• 2010 net sales were $5.918B, up from $5.082B in 2009, as economic recovery lifted volumes and selling prices across most segments.

• Operating profit rose to $503M from $290M; net earnings attributable to Celanese Corporation were $377M versus $498M, while continuing-operations earnings were $426M versus $494M.

• 2011 outlook called for improved results, healthy demand across segments, and earnings growth in every segment, supported by growth, innovation and productivity initiatives.

Financial highlights

• Net sales $5.918B vs. $5.082B; gross profit $1.180B vs. $1.003B; operating profit $503M vs. $290M in 2010 and 2009, respectively.

• Earnings from continuing operations before tax were $538M vs. $251M; equity earnings from affiliates were $168M vs. $99M.

• Net earnings attributable to Celanese Corporation were $377M vs. $498M; continuing-operations EPS was $2.73 basic and $2.69 diluted in 2010.

• Other charges, net improved to $46M from $136M; 2010 included a $72M Spondon impairment and $22M accelerated amortization of a supplier-related purchase prepayment.

Outlook and guidance

• 2011 results were expected to improve from 2010, with healthy demand and earnings growth in every segment, based on a modest global recovery and ongoing initiatives.

• Advanced Engineered Materials expected strong seasonal demand and value-in-use pricing; inventory builds would support customer qualification during the Kelsterbach relocation and European expansion.

• Consumer Specialties expected relatively flat Q1 demand, slightly lower seasonal sales, continued productivity-led margin expansion and higher Q1 turnaround spending.

• Industrial Specialties expected rising 2011 volumes, a robust pricing environment and margin expansion from new products; Acetyl Intermediates expected flat Q1 and overall Asia growth.

• 2011 cash outflows were forecast at ~$350M for capital expenditures excluding the Kelsterbach relocation and European capacity expansion; Kelsterbach capex was expected at €186M.