Celanese’s Resilient Earnings Call Highlights Growth Plans

Celanese ((CE)) has held its Q3 earnings call. Read on for the main highlights of the call.

Celanese Corporation’s recent earnings call conveyed a sentiment of resilience amidst challenging market conditions. The company is actively focusing on cost reductions, strategic divestitures, and innovative approaches to drive future growth. Despite facing pricing pressures and inventory challenges, Celanese’s strong asset management and advancements in Engineered Materials were highlighted as key strengths.

Expected EPS Growth

Celanese anticipates a significant increase in earnings per share (EPS) by $1 to $2 in 2026. This growth is expected to be driven by cost actions and the success of the Engineered Materials pipeline, even in a flat demand environment. The company’s strategic initiatives in cost management are set to play a crucial role in achieving this target.

Strong Performance in Low-Cost Assets

The company’s lowest cost assets are operating at full capacity, with the rest of the network being adjusted to meet demand. Celanese’s manufacturing team has successfully improved capacity at these lower-cost assets without the need for additional capital expenditure, showcasing operational efficiency.

Micromax Divestiture

Celanese has successfully divested its Micromax business for $500 million, making significant progress towards its $1 billion divestiture target by 2027. This strategic move is part of the company’s broader plan to streamline operations and focus on core business areas.

Interest Expense Reduction

The company expects a reduction in interest expenses by $30 million to $40 million in 2026. This anticipated decrease is part of Celanese’s ongoing efforts to optimize its financial structure and improve overall profitability.

Innovative Commercial Strategies

The Engineered Materials team is modernizing its strategy with innovative tools such as Chemille, an AI-driven tool for grade selection. This initiative aims to enhance customer solutions and drive growth in the Engineered Materials segment.

Demand Weakness and Pricing Pressure

Celanese is experiencing pricing pressure in the acetyl chain, particularly in Europe, due to demand-driven challenges. Additionally, Engineered Materials volumes have decreased by 8% year-over-year, reflecting broader market conditions.

Inventory Management Challenges

Channel partners in North America are reducing inventories by the end of the year, which is impacting demand. This inventory management challenge is one of the hurdles Celanese is working to overcome in the current market environment.

Significant Write-Down

The company recorded a significant write-down related to Zytel and nylon, attributed to a reduction in market cap. Despite this, there has been no change in the projected cash flows, indicating a stable financial outlook.

European Acetate Tow Closure

Celanese has decided to close its Lanaken facility due to declining demand in acetate tow. While this represents a cost-saving measure, it also highlights the challenges posed by current market conditions.

Forward-Looking Guidance

Looking ahead, Celanese is focused on growing its EPS by $1 to $2 in 2026, driven by ongoing cost improvements and the success of its Engineered Materials pipeline. The company aims to increase cash flow, intensify cost improvements, and drive top-line growth as key priorities moving into 2026. Despite not expecting Micromax EBITDA next year, Celanese anticipates offsetting this with the absence of significant auto destocking in Europe, which was a challenge in early 2025.

In summary, Celanese Corporation’s earnings call highlighted a resilient approach to navigating current market challenges. The company’s focus on cost reductions, strategic divestitures, and innovative strategies in Engineered Materials positions it well for future growth. Despite facing pricing pressures and inventory challenges, Celanese remains committed to driving financial improvements and achieving its growth targets.