Celanese Q4 Earnings Call Highlights

Celanese (NYSE:CE) executives fielded investor questions on the company’s fourth-quarter 2025 earnings call, outlining priorities for 2026 that center on free cash flow generation, continued cost actions, and further divestitures as the company navigates uneven demand and competitive pressure in certain markets.

Balance sheet focus remains on cash generation and refinancing

Chief Executive Officer Scott Richardson said the company remains focused on the plan it has been outlining, emphasizing “cash generation first.” Richardson pointed to the company’s ability to generate cash in 2025 despite a year-over-year earnings decline, and said Celanese believes it is “in a really good position” following bond refinancing and debt paydowns that lowered near-term maturities.

When asked about raising equity to address leverage, Richardson did not indicate a shift toward that approach, instead highlighting cash generation and proceeds expected from divestitures.

Divestitures: halfway to $1 billion target, more deals pursued

Management reiterated a goal of $1 billion of divestiture proceeds by the end of 2027, and said the company is about halfway to that target. Richardson said Celanese feels good about getting another deal completed in 2026 and expressed confidence in achieving or exceeding the target by 2027.

He said the company is prioritizing divestitures of assets that do not fit the core operating models of Engineered Materials or the Acetyl Chain, which “does kind of lead you to a heavier focus on some of the joint ventures.” Richardson described the slate of opportunities as “pretty robust,” while acknowledging that “it’s hard to get deals done in this environment.” He also cited the sale of Micromax as an example of execution speed, saying the process from launch to close took about nine months.

Chief Financial Officer Chuck Kyrish added that the $1 billion target is “a probability weighted number,” and that theoretically it could end up higher, but the company is currently targeting $1 billion by the end of 2027 to support deleveraging.

What drove 2025 profit declines in Acetyl Chain and Engineered Materials

In response to a question about the year’s earnings deterioration, Richardson attributed the Acetyl Chain’s decline primarily to volume and price, including a mix element. He said a “good chunk” of the change was driven by the acetate tow business, with additional impacts from margin compression in China and lower Western Hemisphere volume.

For Engineered Materials, Richardson said both volume and price were down and “semi-equal” in magnitude, partially offset by cost actions. He characterized the overall drivers in both businesses as “above the line variable margin.”

2026 outlook themes: EM growth levers, Acetyl volatility, and second-half weighting

Richardson said the company’s internal mantra for 2026 is “act now, win together and grow,” building on 2025’s emphasis on cost reduction and free cash flow generation. He suggested Engineered Materials has more “controllable ways to grow” through Celanese’s pipeline model, innovation, and customer partnerships, though he said the company can still pursue growth in the Acetyl Chain when supply-demand conditions allow.

On end markets, Richardson called electronics a current bright spot globally, supported by AI and data center build-out, but noted it is a smaller portion of the overall business. Automotive is a larger driver and appeared more mixed: Celanese cited softness in China tied to uncertainty around EV credits and stimulus rolling off, relative stability in Europe, and a potentially favorable shift in the U.S. as OEMs focus on internal combustion engines and hybrids.

In acetate tow, Richardson said contract pricing for 2026 is expected to see “very little change.” He said competition has been more pronounced in the spot part of the business due to additional capacity that entered the market last year. He also said destocking has continued across the tow value chain and estimated it could take “another quarter or so,” with conditions more likely to even out around mid-year.

Richardson also addressed China acetyls pricing expectations, saying the company is not forecasting “huge uplifts” and would expect pricing to stay in the range seen over recent quarters. He noted acetyl margins in China had stabilized over the prior eight weeks at higher—but still relatively low—levels, and said Celanese tends to focus recovery scenarios on the Western Hemisphere given ongoing overcapacity in China.

Regarding the cadence of earnings through 2026, Richardson said Celanese still aims for $1–$2 of EPS lift versus 2025, driven by growth initiatives in Engineered Materials, continued cost reductions, and selective opportunities in the Acetyl Chain. However, he noted several factors that have changed since the prior update: interest expense is expected to be relatively flat year-over-year, inventory draw is likely to have some P&L impact, and demand is not currently at the level seen in the middle part of 2025. He said the year is expected to be more second-half weighted, in part due to higher turnaround activity in the second quarter.

In discussing quarterly dynamics, Richardson said a $30 million inventory benefit expected in the first quarter would likely “dry out” in the second quarter, and that higher turnaround expense is expected in Q2. He said Q2 could be “flattish” versus Q1 absent clearer visibility on demand, with potential sequential benefit depending on the demand environment.

Cost actions, pricing initiatives, and free cash flow levers

Management highlighted specific cost actions, including the previously announced closure of the Lanaken plant. Richardson said the closure is expected to deliver $20 million–$25 million of cost benefit on a full-year basis, with $5 million–$10 million expected in 2026 as Celanese tries to pull forward savings.

On polymer pricing initiatives, Richardson said certain polymer margins had fallen to “unsustainable levels,” pointing to industry stress including defaults among some market participants. He said Celanese’s earlier footprint actions in higher-cost locations helped it “weather that storm,” but added that returns need to improve. He framed price efforts as a step-by-step process and said he would not expect the company to capture all increases at once.

Kyrish detailed key free cash flow elements for 2026, including:

• Working capital: targeting another $100 million, primarily through further inventory reductions
• Cash taxes: expected to be lower by about $50 million–$60 million
• Cash interest: expected to be down about $50 million
• Cash outlays for cost reduction programs: expected to be lower by about $25 million–$50 million

Executives said the company models multiple demand scenarios and believes it can generate free cash flow within its guided range using either modest earnings growth or “additional levers” if demand remains weak. Kyrish also emphasized that the company does not intend to reduce inventories in a way that creates service issues, describing inventory reduction as a coordinated, multi-year effort across raw materials, offtake agreements, and finished goods.

Elsewhere, Richardson said Celanese is block operating certain assets—including the Frankfurt VAM unit and the Singapore acetic acid unit—to improve efficiency and reduce costs. He also said Celanese has been building flexibility in its nylon operating model by balancing what it makes versus buys, and in China—where he described the market as already overcapacitated—Celanese is taking advantage of attractive economics by buying as much polymer as possible.

About Celanese (NYSE:CE)

Celanese Corporation is a global chemical and specialty materials company that develops, manufactures and markets a broad portfolio of products serving diverse industries. The company operates through two primary business segments—Engineered Materials and Acetyl Chain—offering solutions that range from high-performance polymers and specialty additives to industrial chemicals and intermediates. Its engineered materials are used in applications such as automotive components, consumer electronics, medical devices and packaging, while its acetyl derivatives find uses in coatings, adhesives, solvents and personal care products.

In the Engineered Materials segment, Celanese produces a variety of high-performance thermoplastics, polyether-block-amide (PEBA) elastomers and functional additives designed to enhance product durability, thermal resistance and sustainability.