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INVESTOR INFORMATION Celanese AG Frankfurter Str. 111
Investor Relations 61476 Kronberg/Ts.
Germany
August 7, 2000
Second-quarter 2000 Report
- IMPROVEMENT OVER SECOND QUARTER 1999 - SALES UP 20%, EBITDA MARGIN AT 8.5%
- PRICE INCREASES AND REDUCED COSTS HELPED TO OFFSET HIGHER RAW MATERIAL
COSTS
- CHALLENGING SECOND HALF; FULL-YEAR OUTLOOK REMAINS POSITIVE
DEAR SHAREHOLDER
Celanese has completed a difficult second quarter with a significant
improvement over last year's results. Most segments experienced strong sales,
supported by favorable exchange rates and selling price increases. EBITDA
excluding special charges was 69% better than in the same period last year
despite significantly higher prices for the company's principal raw materials,
but was 33% below the first quarter result. The EBITDA margin (excluding special
charges) was 8.5% in Q2 2000 as compared with 6.0% in Q2 1999 and 13.9% in Q1
2000.
Prices in the Acetyl Products, Chemical Intermediates, and Performance
Products segments increased sharply to recover continuously rising raw material
costs, particularly for natural gas and propylene. Overall, volumes were
unchanged year on year, but were slightly lower than in the first quarter.
Rising natural gas prices, which more than doubled since last year, and high
levels for other major raw materials continued to affect margins in most
segments. Restructuring and cost savings programs helped to offset the impact
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of these raw material cost increases. Technical Polymers Ticona had another
strong quarter of sales growth. Earnings in Performance Products were helped by
positive effects from the restructuring of the OPP Films business.
In July, we shipped the first product from our new 500,000-metric ton
Singapore acetic acid unit. In combination with the closure of older acetyls
plants Singapore will contribute substantially to lowering costs for Acetyl
Products.
We are investing to meet the fast growing demand for technical polymers
such as Vectra(R) liquid crystal polymer and GUR(R) ultra-high-molecular-weight
polyethylene. We are also assessing to increase our capacity for polybutylene
terephthalate, an engineering polyester with rapidly growing applications,
through a joint venture with two other companies. In addition, we have begun
discussions with Asian joint venture partners for acetic acid in China and
acetate filament in Japan.
Our e-business activities are gaining momentum and we have joined major
industry platforms both in the chemical and technical polymers segments. Ticona,
which is the front runner in our e-enabling activities, has installed a first
release of a "Ticona Buy-Direct" platform in the United States to help address
the needs of customers more efficiently.
The first phase in the transformation of Celanese was successfully
completed in July with the divestiture of our chlorine chain businesses, Vintron
and Vinnolit. Now we are further streamlining our organization and investing for
growth. We intend to leverage our strengths in chemicals and technical polymers
and transform our portfolio further.
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FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CHG.
in (euro) millions Q2 2000 Q2 1999 in % H1 2000 H1 1999
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net sales 1,299 1,079 20 2,490 2,037
EBITDA(1) excluding special charges 110 65 69 275 149
EBITDA margin(2) 8.5% 6.0% 11.0% 7.3%
Special charges 11 (191) n.m. (5) (205)
Operating profit (loss) 30 (206) n.m. 92 (215)
Earnings (loss) before taxes 56 (231) n.m. 118 (242)
Net earnings (loss) of:
continuing operations 29 (220) n.m. 51 (259)
continuing and discontinued operations 26 (222) n.m. 37 (272)
Capital expenditures 53 54 -2 92 109
Average shares outstanding (thou) 55,053 55,915 -2 55,484 55,915
-------------------------------------------------------------------------------------------------------------
Net earnings (loss) per share (in (euro)) of:
continuing operations 0.53 (3.93) n.m. 0.92 (4.63)
continuing and discontinued operations 0.47 (3.97) n.m. 0.67 (4.86)
-------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
JUN 30 DEC 31 CHG.
in (euro) millions 2000 1999 in %
-------------------------------------------------------------------------------------
<S> <C> <C> <C>
Total financial debt(3) 940 948 -1
Net financial debt(4) 874 570 53
Shareholders' equity 2,844 2,866 -1
Total assets 7,159 7,527 -5
-------------------------------------------------------------------------------------
</TABLE>
(1) Earnings before interest, taxes, depreciation and amortization
(2) EBITDA excluding special charges / sales
(3) Short- and long-term debt
(4) Total financial debt less cash & cash equivalents
n.m. = not meaningful
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CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
CHG.
in (euro) millions Q2 2000 Q2 1999 in % H1 2000 H1 1999
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET SALES 1,299 1,079 20 2,490 2,037
Cost of sales (1,084) (915) 18 (2,065) (1,726)
-------------------------------------------------------------------------- --------------------
GROSS PROFIT 215 164 31 425 311
Selling, general & admin. expense (165) (161) 2 (280) (286)
Research & development expense (24) (19) 26 (45) (35)
Special charges 11 (191) n.m. (5) (205)
Foreign exchange gain (loss) (6) 3 n.m. (4) (3)
Gain (loss) on disposition of assets (1) (2) -50 1 3
-------------------------------------------------------------------------- --------------------
OPERATING PROFIT (LOSS) 30 (206) N.M. 92 (215)
Equity in net earnings of affiliates 5 2 >100 8 0
Interest expense (16) (29) -45 (32) (59)
Interest & other income, net 37 2 >100 50 32
-------------------------------------------------------------------------- --------------------
EARNINGS (LOSS) BEFORE INCOME TAXES
OF CONTINUING OPERATIONS 56 (231) N.M. 118 (242)
Income taxes (28) 8 n.m. (67) (18)
Minority interests 1 3 -67 0 1
-------------------------------------------------------------------------- --------------------
EARNINGS (LOSS) OF CONTINUING OPERATIONS 29 (220) N.M. 51 (259)
Earnings of discontinued operations 1 (2) n.m. 3 (13)
Loss on disposals of discontinued operations (4) 0 n.m. (17) 0
Extraordinary expense, net of income tax 0 0 0 0 0
-------------------------------------------------------------------------- --------------------
NET EARNINGS (LOSS) 26 (222) N.M. 37 (272)
-------------------------------------------------------------------------------------------------------------
</TABLE>
In the second quarter of 2000, net sales increased 20%; net sales of the
segments were up 19%. This improvement was mainly the result of currency
movements (+10%) and better selling prices (+9%); as volumes were flat. For the
six months compared to the first half of last year, volumes were up 4%, with
prices adding 7% and currencies 11%.
Gross profit in the second quarter increased 31%, and the gross margin
improved from 15.2% to 16.6%. During the first half of 2000, the gross profit
margin increased from 15.3% to 17.1%. Better selling prices and cost controls,
partially offset by high levels of raw material costs, contributed to these
results.
Operating profit of (euro)30 million was substantially better than last
year, but stayed below the level of the first quarter of 2000 due to sharp rises
in major
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raw material costs. Special charges increased operating profit by (euro)11
million, due to the earlier than expected sublease of an abandoned office which
more than offset Acetate and Performance Products restructuring costs. Operating
profit for the first half was (euro)92 million, up (euro)307 million from last
year. The increase was due to the reduction of special charges and the increase
in gross profit.
Interest expense of (euro)16 million in the second quarter was (euro)13
million lower than last year, and for the six months was only 54% of the amount
of the previous year, primarily due to lower average debt levels. Interest &
other income, net benefited from favorable currency movements and interest
income. The reported tax rate for the quarter was 50%; adjusting for goodwill
amortization and eliminating equity income, the tax rate was below 40%,
benefiting from the use of tax loss carry forwards.
Continuing operations generated net earnings in the second quarter of
(euro)29 million as compared to a loss of (euro)220 million a year earlier. Net
earnings from continuing operations for the first half reached (euro)51 million,
up (euro)310 million from the first half of 1999, resulting from an improvement
in business performance as well as lower special charges which had affected the
previous first half-year by (euro)205 million.
Net income during the second quarter of (euro)26 million was equivalent to
(euro)0.47 per share compared to a loss of (euro)222 million in Q2 1999
((euro)-3.97 per share). Net income for the first half rose correspondingly to
(euro)37 million ((euro)0.67 per share), from a loss of (euro)272 million in
1999 ((euro)-4.86 per share).
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CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30 DEC 31
in (euro) millions 2000 1999
-------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash & cash equivalents 66 378
Receivables, net 1,461 1,475
Receivables from Hoechst & affiliates 107 123
Inventories 646 588
Deferred income taxes 26 126
Other assets 53 52
Net liabilities of discontinued operations (87) (42)
-------------------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 2,272 2,700
Investments 606 580
Property, plant & equipment, net 1,935 1,932
Deferred income taxes 189 230
Other assets 749 703
Intangible assets, net 1,408 1,382
-------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 7,159 7,527
-------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings and current
Installments of long-term debt 364 429
Accounts payable & accrued liabilities 1,727 2,096
Liabilities to Hoechst & affiliates 34 15
Deferred income taxes 20 16
Income taxes payable 178 235
-------------------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 2,323 2,791
Long-term debt 576 519
Deferred income taxes 56 69
Other liabilities 1,337 1,259
Minority interests 23 23
Shareholders' equity 2,844 2,866
-------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 7,159 7,527
-------------------------------------------------------------------------------------------------------------
</TABLE>
The decreases in cash & cash equivalents and deferred income taxes and the
decline in accounts payable & accrued liabilities were principally due to cash
outlays associated with special charges. Inventories in the chemical segments
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increased due to higher raw material prices and currency movements, while
turnover of inventory accelerated. The increase in net financial debt from
(euro)570 million to (euro)874 million was primarily due to cash outlays
associated with special charges accrued in previous periods. The share buy-back
program resulted in a modest decrease in shareholders' equity. Through June 30,
2000, Celanese purchased 1.656 million common shares at a total cost of (euro)32
million.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
in (euro) millions H1 2000 H1 1999
-------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES OF CONTINUING OPERATIONS:
Net earnings (loss) 37 (272)
Earnings from operations of discontinued operations (3) 13
Special charges, net of amounts used (335) 177
Depreciation & amortization 178 159
Change in equity of affiliates 1 14
Deferred income taxes 140 (39)
Gain on disposition of assets, net (1) (3)
Gain on disposal of discontinued operations, net 0 0
Changes in operating assets and liabilities:
Receivables, net 42 (104)
Inventories (39) 72
Accounts payable, accrued liabilities & other liabilities (81) 54
Income taxes payable (75) (65)
Other, net (5) 45
-------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (141) 51
INVESTING ACTIVITIES OF CONTINUING OPERATIONS:
Capital expenditures on property, plant & equipment (92) (109)
Acquisitions of businesses & purchases of investments (38) 0
Proceeds from dispositions of assets 24 19
Proceeds from disposals of discontinued operations 37 0
Proceeds from sales of marketable securities 95 33
Purchases of marketable securities (110) (37)
Other, net (4) (3)
-------------------------------------------------------------------------------------------------------------
NET CASH (USED) BY INVESTING ACTIVITIES (88) (97)
</TABLE>
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CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT.)
<TABLE>
<CAPTION>
in (euro) millions H1 2000 H1 1999
-------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCING ACTIVITIES OF CONTINUING OPERATIONS:
Short-term borrowings from third parties, net (84) 81
Proceeds from long-term debt due to third parties 52 2
Payments of long-term debt due to third parties 0 (22)
Short-term borrowings from Hoechst, net 0 (21)
Short-term borrowings from affiliates (20) 0
Other net activity with Hoechst 0 40
Treasury stock (32) 0
Dividend payments (6) 0
Other, net 0 0
-------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES (90) 80
Exchange rate effects on cash 7 0
-------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS (312) 34
-------------------------------------------------------------------------------------------------------------
Cash & cash equivalents at beginning of year 378 0
-------------------------------------------------------------------------------------------------------------
Cash & cash equivalents at end of period 66 34
-------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED (USED) BY DISCONTINUED OPERATIONS:
Operating activities 2 8
Investing activities (26) (24)
Financing activities 24 10
-------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED (USED) BY DISCONTINUED OPERATIONS 0 (6)
-------------------------------------------------------------------------------------------------------------
</TABLE>
Cash flow from operating activities during the first half showed a net use
of (euro)141 million, which was primarily due to outlays associated with special
charges. Lower capital spending and divestiture proceeds reduced net cash used
for investing. Net cash used in financing activities mainly reflects net
reductions in debt and cash outlays related to the share buy-back program. In
total, cash & cash equivalents declined (euro)312 million during the first half
ending the period at (euro)66 million.
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SEGMENT PERFORMANCE
SEGMENT NET SALES
<TABLE>
<CAPTION>
CHG.
in (euro) millions Q2 2000 Q2 1999 in % H1 2000 H1 1999
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Acetyl Products 516 385 34 968 727
Chemical Intermediates 255 217 18 530 417
Acetate Products 202 202 0 357 356
Technical Polymers Ticona 240 199 21 470 384
Performance Products 103 101 2 206 195
-------------------------------------------------------------------------- ------------------
SEGMENT TOTAL 1,316 1,104 19 2,531 2,079
Other activities 19 4 >100 29 15
Intersegment eliminations (36) (29) n.m. (70) (57)
-------------------------------------------------------------------------- ------------------
TOTAL 1,299 1,079 20 2,490 2,037
-------------------------------------------------------------------------------------------------------------
</TABLE>
FACTORS AFFECTING SECOND QUARTER SEGMENT SALES
<TABLE>
<CAPTION>
CUR-
in percent VOLUME PRICE RENCY OTHER TOTAL
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Acetyl Products 2 19 13 0 34
Chemical Intermediates -2 11 9 0 18
Acetate Products -8 -4 12 0 0
Technical Polymers Ticona 12 0 9 0 21
Performance Products -10 7 5 0 2
SEGMENT TOTAL 0 9 10 0 19
-------------------------------------------------------------------------------------------------------------
</TABLE>
SEGMENT EBITDA(1) EXCLUDING SPECIAL CHARGES
<TABLE>
<CAPTION>
CHG.
in (euro) millions Q2 2000 Q2 1999 in % H1 2000 H1 1999
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Acetyl Products 39 (1) n.m. 90 38
Chemical Intermediates 8 6 33 37 30
Acetate Products 32 38 -16 52 43
Technical Polymers Ticona 38 29 31 86 55
Performance Products 22 10 >100 40 20
-------------------------------------------------------------------------- -------------------
SEGMENT TOTAL 139 82 70 305 186
Other activities (29) (17) n.m. (30) (37)
-------------------------------------------------------------------------- -------------------
TOTAL 110 65 69 275 149
-------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Earnings before interest, taxes, depreciation and amortization
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ACETYL PRODUCTS
<TABLE>
<CAPTION>
CHG.
in (euro) millions Q2 2000 Q2 1999 in % H1 2000 H1 1999
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net sales 516 385 34 968 727
EBITDA excluding special charges 39 (1) n.m. 90 38
EBITDA margin 7.6% -0.3% 9.3% 5.2%
Operating profit (loss) 8 (45) n.m. 21 (31)
Depreciation and amortization 31 27 15 58 52
Capital expenditures 23 27 -15 44 45
-------------------------------------------------------------------------------------------------------------
</TABLE>
Net sales for the Acetyl Products segment in the second quarter of 2000
rose 34% to (euro)516 million, primarily due to price (+19%) and currency
effects (+13%), as volumes marginally improved (+2%). Prices for acetic acid,
vinyl acetate monomer, methanol and other products firmed as market conditions
have enabled producers to partially recover rising raw material costs. In some
instances, sales volumes with lower margins were sacrificed to achieve price
increases. Substantial natural gas cost increases pressured margins.
The recovery in EBITDA excluding special charges for the quarter mainly
reflects improved pricing levels and ongoing efforts to reduce fixed costs.
Production of acetic acid at Clear Lake was curtailed at the end of June by
a mechanical failure in the carbon monoxide unit; the problem was rectified and
the plant was back to full output by the end of July. We continued to
consolidate our acetic acid operations at more cost competitive plants, such as
the new Singapore acetic acid plant. Acetic acid production in Mexico ceased at
the end of June. With the closing of this facility, Celanese has shut more than
400,000 metric tons of high-cost acetic acid capacity since June 1999.
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CHEMICAL INTERMEDIATES
<TABLE>
<CAPTION>
CHG.
in (euro) millions Q2 2000 Q2 1999 in % H1 2000 H1 1999
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net sales 255 217 18 530 417
EBITDA excluding special charges 8 6 33 37 30
EBITDA margin 3.1% 2.8% 7.0% 7.2%
Operating profit (loss) (11) (10) n.m. (4) (4)
Depreciation and amortization 17 13 31 34 31
Capital expenditures 8 8 0 12 22
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</TABLE>
In the second quarter, net sales for the Chemical Intermediates segment
increased by 18% to (euro)255 million, benefiting from higher prices (+11%) and
currency effects (+9%), partially offset by lower volumes (-2%).
Compared to the previous year acrylates and oxo sales increased due to
higher pricing. The Specialties business line increased both prices and volumes.
EBITDA excluding special charges of (euro)8 million remained on the level
of the previous year ((euro)6 million). However, compared to the first quarter
of 2000, EBITDA excluding special charges dropped sharply by (euro)21 million
because of intensified raw material cost rises and our firm stand on pricing
which resulted in reduced sales volumes.
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ACETATE PRODUCTS
<TABLE>
<CAPTION>
CHG.
in (euro) millions Q2 2000 Q2 1999 in % H1 2000 H1 1999
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net sales 202 202 0 357 356
EBITDA excluding special charges 32 38 -16 52 43
EBITDA margin 15.8% 18.8% 14.6% 12.1%
Operating profit (loss) 5 19 -74 7 11
Depreciation and amortization 19 14 36 36 26
Capital expenditures 5 8 -38 10 17
-------------------------------------------------------------------------------------------------------------
</TABLE>
Acetate Products' net sales of (euro)202 million remained constant compared
to the corresponding quarter in 1999 as the effects of favorable currency
movements (+12%) were offset by declines in volumes (-8%) and prices (-4%).
Volumes declined due to the loss of acetate flake sales to a non-consolidated
Chinese joint venture, while volumes in acetate tow and filament remained
stable.
In the second quarter EBITDA excluding special charges was affected by
reduced flake volumes and increased raw material and energy costs. These effect
was partly offset by restructuring benefits, such as the closure of the
Drummondville, Canada plant. The relocation of the Rock Hill, S.C. filament
manufacturing facilities to Mexico is under way. Special charges of (euro)8
million were recognized for the relocation. This segment continued to optimize
its entire cost base and is on track toward achieving planned cost reductions.
A memorandum of understanding has been signed for the formation of a
manufacturing and marketing joint venture in Japan. Celanese will supply the
venture with acetate flake.
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TECHNICAL POLYMERS TICONA
<TABLE>
<CAPTION>
CHG.
in (euro) millions Q2 2000 Q2 1999 in % H1 2000 H1 1999
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net sales 240 199 21 470 384
EBITDA excluding special charges 38 29 31 86 55
EBITDA margin 15.8% 14.6% 18.3% 14.3%
Operating profit (loss) 20 (114) n.m. 51 (102)
Depreciation and amortization 18 15 20 35 29
Capital expenditures 7 8 -13 12 19
-------------------------------------------------------------------------------------------------------------
</TABLE>
Ticona's second quarter net sales were 21% higher than in the same quarter
of the prior year. Strong volume growth (+12%) and favorable currency movements
accounted for this increase. Average prices remained at 1999 levels, as the
favorable effects of price increases were offset by changes in the product mix
and some price pressure in North America.
All market segments and regions experienced volume growth, mainly as a
result of favorable economic conditions and the commercialization of new
applications. In the automotive segment, new polyacetal sales were realized in
the fuel systems area. The positive performance of polyester, nylon and
Celstran(R) long fiber reinforced thermoplastic in the auto electrical
(distribution boxes, connectors and ignition components) and auto exterior (door
handles and wheel covers) sectors contributed to the positive sales development.
In addition, Ticona benefited from continued sales growth in the appliance and
telecommunications (mobile telephones and internet networks) markets. As the
company expects further increases in demand for certain products, capacity
expansion plans have been announced.
Strong year-on-year sales growth and effective cost control yielded 31%
higher reported EBITDA excluding special charges in the second quarter as
compared with the year-earlier period. However, EBITDA excluding special charges
was (euro)10 million lower than in the first quarter due to increased expenses
for various e-business activities.
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PERFORMANCE PRODUCTS
<TABLE>
<CAPTION>
CHG.
In (euro) millions Q2 2000 Q2 1999 in % H1 2000 H1 1999
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net sales 103 101 2 206 195
EBITDA excluding special charges 22 10 >100 40 20
EBITDA margin 21.4% 9.9% 19.4% 10.3%
Operating profit (loss) 10 (30) n.m. 19 (38)
Depreciation and amortization 8 10 -20 17 20
Capital expenditures 4 2 100 7 5
-------------------------------------------------------------------------------------------------------------
</TABLE>
Net sales increased 2% in the Performance Products segment in the second
quarter to (euro)103 million. Price (+7%) and currency effects (+5%) more than
offset volume declines (-10%).
The reduction in volumes was almost entirely due to the closure of the
Trespaphan OPP film plant at Swindon, UK at the end of 1999. The segment
realized significant improvements in EBITDA excluding special charges primarily
due to the reduction of fixed costs resulting from the closure of the Swindon
plant and from improved sales of higher added value products.
Sales in Europe were strong for the whole segment. In addition, Nutrinova
is strengthening its Asian sales position of the high intensity sweetener
Sunett(R) with first sales to Japan. Over-capacity and weak prices in the
sorbates industry continued to weigh on earnings.
The segment continued to improve its cost base, although special charges
were incurred by Trespaphan in connection with the transfer of a production line
from Swindon to its facilities in Mantes, France.
OTHER ACTIVITIES
Special charges increased operating profit by (euro)24 million, due to the
earlier than expected sublease of an abandoned office.
Axiva Engineering and Technology was acquired from Hoechst as previously
agreed in June, consisting of venture and engineering activities. The Venture
activities are reported in this segment. The engineering activities are subject
to a letter of intent with a third party.
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OUTLOOK
In the second half of the year business conditions are expected to be more
difficult in some of the markets we serve, and we are cautious about our profit
development in the second half of this year. We also expect start-up costs in
the third quarter related to Ticona's new COC plant in Oberhausen, Germany and
the Singapore acetic acid plant, as well as further special charges as we
proceed with the streamlining of our operations, mainly in the Acetyl Products
segment. The outage at our acetic acid plant in Clear Lake, Texas will have a
negative impact on sales and operating profit for Acetyl Products in the third
quarter. Due to all of these effects, we expect to report a negative operating
profit in the third quarter.
We completed the divestiture of our chlorine activities in July; this will
result in a gain on the disposal of discontinued operations in the third
quarter. With the positive first half, the benefits we expect from our cost
reduction efforts, and further price increases which we expect during the second
half, we continue to anticipate a positive operating profit and a positive net
income for the year.
The Board of Management
Kronberg
August 7, 2000
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FOOTNOTES
RESULTS UNAUDITED: The foregoing results, together with the adjustments
made to present the results on a comparable basis, have not been audited and are
based on the internal financial data furnished to management. Accordingly, the
quarterly results should not be taken as an indication of the results of
operations to be reported by Celanese for any subsequent period or for the full
fiscal year.
RESULTS ADJUSTED FOR DISCONTINUED OPERATIONS: The foregoing results exclude
Copley, Celgard, Dyneon, EO/EG, Millhaven, Targor, Thermphos, Vinnolit and
Vintron which have been discontinued. The results of these businesses are
reflected in the interim balance sheets, income statements and statements of
cash flows as discontinued operations.
FORWARD-LOOKING STATEMENTS: Any statements contained in this report that
are not historical facts are forward-looking statements as defined in the U.S.
Private Securities Litigation Reform Act of 1995. Words such as "believe,"
"estimate," "intend," "may," "will," "expect," and "project" and similar
expressions as they relate to Celanese or its management are intended to
identify such forward-looking statements. Investors are cautioned that
forward-looking statements in this report are subject to various risks and
uncertainties that could cause actual results to differ materially from
expectations. Important factors include, among others, changes in general
economic, business and political conditions, fluctuating exchange rates, the
length and depth of product and industry business cycles, changes in the price
and availability of raw materials, actions which may be taken by competitors and
by regulatory authorities, changes in the degree of patent and other legal
protection afforded to Celanese's products, potential disruption or interruption
of production due to accidents or other unforeseen events, delays in the
construction of facilities, potential liability for remedial actions under
existing or future environmental regulations and potential liability resulting
from pending or future litigation, and other factors discussed above. Many of
the factors are macroeconomic in nature and are therefore beyond the control of
management. The factors that could affect Celanese's future financial results
are discussed more fully in its filings with the U.S. Securities and Exchange
Commission (the "SEC"), including its Annual Report on Form 20-F filed with the
SEC on March 31, 2000. Celanese AG does not assume any obligation to update
these forward-looking statements, which speak only as of their dates.
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Date: August 7, 2000
NEXT ANNOUNCEMENT
Results for the 3rd quarter of 2000 will be announced on November 2, 2000.
MEDIA RELATIONS
Dr. Hans-Bernd Heier
Phone: +49 69 305 7112 Fax: +49 69 305 84160
[email protected]
--------------------
Phillip Elliott
Phone: +49 69 305 33480 Fax: +49 69 305 84160
[email protected]
----------------------
INVESTOR RELATIONS
Joerg Hoffmann
Phone: +49 69 305 4508 Fax: +49 69 305 83195
[email protected]
-----------------------
Michael Oberste-Wilms
Phone: +49 69 305 83199 Fax: +49 69 305 83195
[email protected]
----------------------------
INVESTOR RELATIONS AND PUBLIC AFFAIRS
CELANESE AMERICAS CORPORATION
Andrea Stine
86 Morris Avenue
Summit, NJ 07901, USA
Phone: +1 908 522 7784 Fax: +1 908 522 7583
[email protected]
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This quarterly report is also available in German.
