Celanese (CE) Q4 2012 earnings summary

Executive summary

• FY12 net sales fell to $6.418B from $6.763B; operating profit declined to $511M from $690M, while net earnings attributable to shareholders were $605M versus $607M.

• Lower acetyl pricing and unfavorable currency weighed on results; Consumer Specialties and Advanced Engineered Materials operating profit increased, while Industrial and Acetyl Intermediates declined.

• FY13 earnings growth is expected to align with long-term objectives of 12%–14%, driven by company-specific initiatives, despite a challenging global environment.

Financial highlights

• FY12 gross profit was $1.192B versus $1.434B; operating profit was $511M versus $690M, and operating margin was 8.0% versus 10.2%.

• FY12 continuing-operations diluted EPS was $3.81 versus $3.81; diluted EPS including discontinued operations was $3.79 versus $3.82.

• Q4 FY12 net sales were $1.501B, operating profit $86M, net earnings $95M and diluted EPS $0.59.

• Operating cash flow rose to $722M from $638M; cash and equivalents reached $959M, up $277M, while total debt was $3.098B.

• Effective tax rate was 7% versus 20%, favorably affected by $142M in foreign tax credit benefits and offset by deferred tax charges related to foreign earnings.

Outlook and guidance

• FY13 earnings growth expected to be consistent with long-term objectives of 12%–14%, primarily from productivity, technology platforms and faster new-product introductions.

• Global conditions expected to remain challenging, particularly in the EU; China growth expected to improve through the year but remain modest versus historic levels.

• FY13 capital expenditures, including major projects, expected at $375M–$400M.

• Nanjing ethanol unit expected to start up in late 2013 at approximately 275,000 tons/year; Clear Lake methanol facility expected to start up after July 1, 2015.