Celanese (NYSE:CE) executives said the company is positioning its 2026 performance as a foundation for further cash generation, cost savings and growth in higher-value materials markets in 2027, while acknowledging continued uncertainty in raw materials, regional demand and certain commodity chemical markets.
During the company’s third-quarter earnings call, President and CEO Scott Richardson said Celanese is emphasizing customer contracting in its Acetyl Chain business and building a higher-quality pipeline in Engineered Materials. The company expects electronics and healthcare to remain growth areas next year, while it continues to manage pressure from higher inputs, variable operating rates at affiliates and softer automotive demand in China.
Free Cash Flow Outlook Supported by Working Capital and Cost Actions
Chief Financial Officer Chuck Kyrish said Celanese remains confident it can generate between $700 million and $800 million in free cash flow in 2027, citing multiple ways to reach that range across varying market environments.
He said the company does not see a need to raise capital spending beyond its targeted growth investments, with capital expenditures expected to remain within a range of roughly $300 million to $350 million. Kyrish also pointed to opportunities to reduce inventory and improve working capital, noting that inventory values remain elevated.
Cash spending related to major restructuring programs should decline as those initiatives run their course, according to Kyrish. He estimated that restructuring cash outlays could decrease by approximately $30 million to $40 million next year.
Celanese expects previously announced cost actions in Engineered Materials and the Acetyl Chain to contribute an additional $30 million to $40 million of cost savings in 2027, after contributing about $70 million during 2026. Kyrish said the vast majority of the additional savings should benefit EBITDA. The company also expects functional costs to normalize by about $20 million next year and forecast net interest-expense savings of approximately $40 million.
Richardson said Celanese is targeting $150 million of gross productivity improvements to offset expected inflation in plant and administrative costs during 2027. The company is also pursuing what he called “next-generation productivity,” including the use of artificial intelligence in manufacturing to improve raw-material and energy efficiency and reduce maintenance costs.
Engineered Materials Focuses on Electronics, Healthcare and Higher-Value Applications
Richardson said electronics and medical applications remained bright spots for the Engineered Materials segment and should continue to provide tailwinds into 2027. The company is pursuing projects in those areas, including three investments expected to be commercialized during the first half of 2027, with two in Asia and one in Europe.
He said Celanese expects electronics demand to benefit from what it views as a multi-year data-center buildout related to artificial intelligence. The company is seeking to expand its presence in AI servers by supplying multiple polymer families and greater material volumes than it historically supplied into traditional servers.
Celanese also discussed its relationship with VIGOR Precision in robotics. Richardson said the opportunity is not limited to one material or application, but reflects the company’s strategy of working with customers during product development and supplying multiple products into complex systems. He did not provide a timeline for potential financial contributions from the relationship.
In Europe, Celanese is adding specialty compounding capacity aimed at smaller-volume, high-value applications. Richardson said the additional lines are intended to support growth in electronics and medical materials that require specific production capabilities.
While the company sees growth opportunities in differentiated products, it acknowledged greater competitive pressure in standard-grade materials from capacity additions in Asia. Richardson said Celanese’s manufacturing-footprint actions have reduced the need to pursue volume at any cost, allowing the business to focus more on differentiated applications and customer value.
Automotive, Nylon and Acetyl Chain Conditions Remain Mixed
Celanese said automotive volumes were lower during 2026, primarily because of declining vehicle builds in China. Conditions in the Western Hemisphere have been more stable, Richardson said. He added that the company has improved the quality and mix of its automotive portfolio and has gained greater flexibility in nylon after shifting toward purchasing more polymer rather than producing it internally.
Richardson said nylon margins have improved significantly and the pipeline remains favorable in automotive and non-automotive applications. However, Kyrish said inventory reductions tied to nylon optimization are now expected to total closer to $30 million in 2026, compared with a prior expectation of $45 million, due to softer demand in certain end uses.
For the Acetyl Chain, the company has incorporated margin compression into its fourth-quarter outlook. Richardson said an unplanned extended outage at a key pipeline supplier in China, related to government inspections, has forced Celanese to operate at lower rates. The company also cited European cost pressure from energy and low water levels on the Rhine River.
Higher methanol prices initially compressed Acetyl Chain margins early in the third quarter, but Celanese was able to raise prices over the course of the period, resulting in margin expansion as the quarter ended, Richardson said. Margins weakened again during October but remained elevated, he added. Celanese expects potential upside if it can maintain pricing and margins through the remainder of the quarter.
The company maintains a strategy of being approximately 40% to 50% integrated in methanol through joint ventures in Clear Lake and Saudi Arabia, while buying the remainder of its needs on the merchant market.
Portfolio Actions and Acetate Tow Efforts Continue
Celanese said it expects improved performance in acetate tow in 2027, largely due to controllable cost actions, including the closure of its Lanaken facility. Richardson said tow volumes and margins have stabilized toward the end of 2026 compared with the start of the year, though industry conditions remain challenging.
The Lanaken closure is expected to produce only about one-third of its savings in 2026, with the remaining two-thirds benefiting 2027. Richardson said Celanese will continue to seek ways to improve the product line’s variable margins and return profile.
On portfolio actions, Celanese agreed to sell an additional interest in the Nutrinova joint venture to Mitsui for a little more than $150 million in proceeds. The company has identified approximately $340 million to $350 million of further divestiture proceeds needed by the end of 2027 and expects that target will likely be achieved through a series of transactions, potentially similar in size to the Nutrinova deal.
Richardson said Celanese would remain open to additional divestitures after reaching its $1 billion target if transactions create value, accelerate deleveraging or provide greater financial flexibility.
About Celanese (NYSE:CE)
Celanese Corporation (NYSE: CE) is a global chemical and specialty materials company headquartered in Irving, Texas. The company develops and manufactures engineered materials and chemical products used by manufacturers in industries including automotive, consumer goods, medical and healthcare, electronics, industrial equipment, energy and infrastructure.
Celanese operates primarily through its Engineered Materials and Acetyl Chain businesses. Its portfolio includes engineered polymers, thermoplastic compounds and other specialty materials, as well as acetyl products such as acetic acid, vinyl acetate monomer, emulsions and related intermediates.
