Celanese Corporation (NYSE:CE) Q4 2022 Earnings Call Transcript

Lori Ryerkerk: Yes. So I — look we typically see seasonality because, obviously, when it’s cold and snowy and things people aren’t painting outside. And so that’s typical. I would say also this year because we’re coming off a period of high pricing for many of these materials because of the higher raws and the higher energy we saw during 2022. I think people took the opportunity much like we did in EM, for example, to draw down some of their inventories through the end of the year and get rid of higher cost inventory to make room for lower cost inventory going forward with anticipation of lower energy and raw material costs and pricing. So I think that’s really the dynamic that we saw this year. Again, in the U.S., we haven’t really seen the pickup yet as we have, say, in Europe, but I think it will come. There’s no kind of structural reason that we think paints, coatings and construction is going to be off in 2023 versus 2022.

David Begleiter: Understood. And just in acetyls, you referenced a $60 million earnings increase versus the last trough. Can you try to bridge that gap, what’s improved in your operations? Because you’ve always been a good operator in this business, but you seem to have taking a step up since the last couple of years as well.

Lori Ryerkerk: Yes. Look, I think it’s a number of things. We’ve continued to invest in our acetyl assets, both foundationally, so investing in reliability and quality, energy savings, productivity. So we’ve continue to improve our cost basis. From that, we’ve improved our contracts in many of our areas for raw materials for the acetyl chain. I think that’s probably the primary improvement we’ve seen in our sales over the last few years. The operating model we use in acetyls taking advantage of that end-to-end as well as geographic optionality is really strong. It’s running really well. But I would say it’s really the improvement in productivity, the improvement in contracting, as well as some of the minor kind of capacity adds, that capacity creep that we’ve had across our facilities, which gives us additional optionality and the addition of Elotex, which gives us further optionality down into the chain, which is especially helpful as we move into these kind of slower winter months.

Scott Richardson: Kevin, we’ll take one more question, please.

Operator: Certainly. Our final question today is coming from Jaideep Pandya from On Field Research. Your line is now live.

Jaideep Pandya: Hi, thanks a lot for taking my question. Just basically wanted to understand in the context of capacity shutdowns in the upstream side in nylon chain. How do you see yourself with regards to positioning in the value chain? Is this fundamentally more positive for you? Or is it fundamentally more negative for you in this context? Thank you.

Lori Ryerkerk: Well, prior to the acquisition of M&M, obviously, we were a big buyer of nylon and would have been unhappy to see shutdowns in the upstream because that would lower price. But now that we both polymerize as well as compound nylon, I would say, generally, I would consider this a help for us as it tightens up the amount of nylon being produced and should raise value across the chain.

Operator: Thank you. We reached the end of our question-and-answer session. I’d like to turn the floor back over for any further or closing comments.

Brandon Ayache: Thank you. I’d like to thank everyone for calling in today. As always, we’re around if you have any follow-up questions. Kevin, please go ahead and close up the call.

Operator: Certainly. That does conclude today’s teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.