Celanese(US:CE)2025-08-11 20:36PART I - FINANCIAL INFORMATION Financial Statements The company's interim financials reflect decreased sales and operating profit, offset by a significant tax benefit that boosted net earnings, amid increased assets and debt Consolidated Statements of Operations Highlights (Q2 & H1 2025 vs 2024) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $2,532M | $2,651M | $4,921M | $5,262M | | Gross profit | $535M | $641M | $1,011M | $1,195M | | Operating profit | $233M | $250M | $401M | $460M | | Net earnings attributable to Celanese | $199M | $155M | $178M | $276M | | Diluted EPS | $1.81 | $1.41 | $1.62 | $2.52 | Consolidated Balance Sheet Highlights (as of June 30, 2025) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,173M | $962M | | Total current assets | $5,675M | $5,145M | | Total assets | $23,713M | $22,857M | | Long-term debt, net | $12,689M | $11,078M | | Total equity | $5,704M | $5,580M | Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash from operating activities | $447M | $393M | | Net cash used in investing activities | ($186M) | ($242M) | | Net cash used in financing activities | ($71M) | ($748M) | | Net increase (decrease) in cash | $211M | ($620M) | Notes to the Unaudited Interim Consolidated Financial Statements The notes detail significant events including a planned divestiture, major debt refinancing, a dividend reduction, and a favorable tax settlement - On May 5, 2025, the Company announced its intent to divest its Micromax® portfolio of products as part of its strategy for cash generation and deleveraging33 - In March 2025, the company completed a public offering of senior unsecured notes totaling approximately $2.55 billion equivalent to fund tender offers for existing notes and repay other debt5657 - The company reduced its quarterly dividend by approximately 95% starting in Q1 2025, with a dividend of $0.03 per share declared on July 16, 202581 - The effective income tax rate was a 57% benefit for Q2 2025, compared to a 16% expense in Q2 2024, due to deferred tax benefits and a German tax settlement87 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses decreased sales and profits due to weak demand, with a strategic focus on deleveraging through cost controls and capital management Consolidated Financial Highlights (Q2 & H1 2025 vs 2024) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $2,532M | $2,651M | $4,921M | $5,262M | | Operating profit | $233M | $250M | $401M | $460M | | Net earnings attributable to Celanese | $199M | $155M | $178M | $276M | - The company is experiencing demand challenges in key end-markets like automotive, paints, coatings, and construction due to tepid global macroeconomic conditions216 - Deleveraging is a key priority, leading the company to pause its share repurchase program and reduce its quarterly dividend by approximately 95%173 Business Segments Analysis Engineered Materials' profit rose on cost savings despite lower sales, while Acetyl Chain's profit fell sharply due to pricing and volume declines Engineered Materials Segment Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,442M | $1,467M | (1.7)% | | Operating Profit | $165M | $138M | 19.6% | - Engineered Materials' operating profit increased due to a favorable $27 million impact from non-recurring prior-year restructuring costs and reduced spending161 Acetyl Chain Segment Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,115M | $1,202M | (7.2)% | | Operating Profit | $154M | $242M | (36.4)% | - Acetyl Chain's operating profit decreased due to lower net sales, driven by a 7% price decline and 2% volume decline, and $16 million in higher plant turnaround costs166167168 Liquidity and Capital Resources The company maintains sufficient liquidity through cash and credit facilities, prioritizing deleveraging with reduced dividends and managed capital expenditures - Primary liquidity sources are cash from operations, $1.2 billion in cash and cash equivalents, and $1.82 billion available under revolving credit facilities as of June 30, 2025172 - Capital expenditures for 2025 are expected to be approximately $300 million to $350 million, reflecting a focus on required maintenance and productivity improvements175 Cash Flow Summary (Six Months Ended June 30) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash from operating activities | $447M | $393M | | Net cash used in investing activities | ($186M) | ($242M) | | Net cash used in financing activities | ($71M) | ($748M) | Quantitative and Qualitative Disclosures about Market Risk There have been no material changes to the company's market risks since its 2024 Annual Report - Market risk for the Company has not changed materially from the foreign exchange, interest rate and commodity risks disclosed in the 2024 Form 10-K220 Controls and Procedures Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures are effective as of June 30, 2025221 - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls222 PART II - OTHER INFORMATION Legal Proceedings There have been no significant developments in legal proceedings since the 2024 Form 10-K filing - The Company is involved in various legal proceedings incidental to its business, and there have been no significant developments beyond what was reported in the 2024 Form 10-K225 Risk Factors The company refers to its 2024 Annual Report for a discussion of risk factors, noting no material changes - Readers are referred to the Risk Factors section in the company's 2024 Form 10-K for a detailed description of potential risks226 Unregistered Sales of Equity Securities and Use of Proceeds The company did not repurchase any common stock during the quarter, with $1.1 billion remaining under its repurchase authorization - The company did not repurchase any Common Stock during the three months ended June 30, 2025227 - As of June 30, 2025, approximately $1.1 billion remained available for share repurchases under the board-authorized program227 Other Information The company filed to eliminate a class of preferred stock and reported no new officer trading plans - On May 15, 2025, the Company filed a Certificate of Elimination to remove provisions for a previously redeemed class of Preferred Stock230 - No director or Section 16 officer adopted or terminated any Rule 10b5-1 trading plans during the quarter ended June 30, 2025231 Exhibits This section lists all exhibits filed with the report, including required certifications and corporate documents