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This report will analyze Celanese’s revenue, profit, locations, employment, and present recommendations for investment. Financial performance is a large component of Celanese Corporation’s success as a business. This company generates a revenue of about $402 billion. The nature of Celanese’s business requires the corporation to follow expansion in order to achieve even greater success in the coming years. As they continue to grow in its sales volume and profits, its stock prices will follow. Global expansion is another large component of Celanese Corporation’s success.
The company has numerous manufacturing operations around the world. This includes, one state in the U.S., Canada, China, Europe, Mexico, Japan and India. For the number of facilities available for the purpose of making and selling its products, it has over 7,000 employees. Being such a large company, Celanese ensures each consumer is satisfied to the best of their ability. Community involvement is also an important factor to Celanese’s success. By manufacturing their products alone, Celanese is benefitting the community, which was the founder’s initial goal.
The History of Celanese Over the last 100 years, Celanese has evolved from a small experiment in Switzerland to a global technology and specialty materials company by leading businesses in major regions in the world. The Dreyfus brothers, Camille and Henri, had a vision for the company and that was to expand it to one of the largest chemical manufacturers in the world. They focused on safety, innovation, productivity, culture, performance, and results.
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The birth of Celanese was in 1921, British Celanese began to make acetate yarn which has a wide range of uses like furniture, fashion, household supplies and even medicine. It was spun thread to the treatment of dyed fibers. By 1927 is when they changed their name from “The American Cellulose & Chemical Manufacturing Company” to “Celanese Corporation of America”. The company moved on to produce plastics, chemicals, and fibers, and was on their way to becoming one of the largest chemical manufacturers in the country. In 1945, in the U.S., Celanese started production plants in Texas to make acetaldehyde, formaldehyde, methanol and acetone. However, fibers did remain Celanese’s most important product. Moving on to present day, Celanese now has thermoplastics custom compounder, Omni Plastics.
These accomplishments added a lot of capacity in the Americas to support the company’s growing and diverse customer base. From the global production of their Acetyl Chain, they provide materials that are important to the global chemicals, paints and coatings industries. From their broad range of Materials Solutions, Celanese advances automotive and consumer electronic designs and enable life-improving medical, food and beverage products. Mark Rohr became chairman and chief executive officer (CEO) of Celanese in April 2012. He became the chairman and CEO after being a member of the board of directors since 2007. He currently serves on the board of directors of Ashland, Inc. Before Celanese, he was executive chairman and director of Albemarle Corporation for over 10 years. Nevertheless, he has several years of experience in working with the company and being a leader. In fact, in 2016 he was chairman of the American Chemistry Council’s Executive Committee and the International Council of Chemical Associations (ICCA).
Rohr received a bachelor’s degree in chemistry and chemical engineering from Mississippi State University, and serves on the advisory board for the university’s College of Arts and Sciences. Rohr has a lot of history in humanitarian service that focus on education and educational support. He is board of chair for City Year Dallas and the Commit! Partnership. He received an award and was named 2018-2017 United Way Metropolitan Dallas Campaign Chairman. He also supports the International Rett Syndrome Foundation and the Emerge Center in Baton Rouge, LA. The Emerge Center supports the needs of families that face behavior, communication, and developmental issues. Celanese Corporation has grown tremendously as a company since it was first incorporated back in the early 1900s. They are a producer of high-performance engineered polymers that are usually used in a variation of high-value applications, as one of the world’s largest producers of acetyl products, which are intermediate chemicals, for almost all major industries.
The purpose of this report is to analyze the corporation’s financial performance: status on the Fortune 500 list, revenue totals for the past year, profit price, and evaluate the company’s locations and employees. This report also outlines several reasons investment in the company is highly encouraged. Ranked 455 on the Fortune 500 list, Celanese displays that although it is currently one of many global specialty companies, it is still growing and is doing great things. When comparing its 2017 net earnings of $228 million to its 2018 net earnings of $402 million, the company’s revenue increased by millions. The supplement for combined results shows an approximate $149 million increase in third quarter sales.
Looking over each product’s individual performance in the third quarter, they all showed a considerable increase from third quarter sales in 2017. The products include: Adjusted EBIT which is engineered materials, acetate tow, acetyl chain (industrial specialties, acetyl intermediates) and other activities. Also “Equity Earnings, Cost-Divided Income, and Other Income (Expense)” were increasing during the change from 2017 to 2018. Celanese Corporation generated a profit (net earnings) of $402 million for the year ended September 2018. When compared to that of its previous year, $345 million, their profits increased an amazing $149 million. This totals to a $32 million difference between 2016 and 2017’s third quarter profits. Their total revenue as a whole is $6,140 million with a profit change of -6.3 percent, 13.3 revenue change, and $9,538 million assets.
Engineered Materials generated net sales of $642 million in the quarter, a 12 percent improvement over the third quarter of 2017. Operating profit margin in the third quarter was 19.3 percent and adjusted EBIT margin was 29.1 percent. Acetate Tow GAAP operating profit was $26 million and segment income were $65 million in the third quarter. Price in the quarter declined compared to the same quarter in 2017 due to lower industry capacity utilization and was partially offset by mix and productivity gains. The Acetyl Chain generated net sales of $1.0 billion in the third quarter. The 17 percent increase year over year in the quarter resulted from sustained improvements in industry supply and demand fundamentals and from leveraging their flexible global network.
Cash Flow and Tax
Operating cash flow in the third quarter was $467 million. Free cash flow was $382 million, driven by strong business results and supported by disciplined working capital management. The effective US GAAP tax rate was 12 percent compared to 20 percent in the third quarter of 2017, lead mainly by adjustments to valuation allowances on late tax assets and the impact of the Tax Cuts and Jobs Act. Celanese Corporation headquarters is in Dallas, Texas. Strategically, they are positioned in different places in the world to meet customer demand. They have manufacturing facilities and sales offices in the United States, Europe, Mexico and Asia. Other locations include Europe (The Netherlands), their commercial center is in Germany, the holding co., ltd is located in China, Celanese Chemicals India, and lastly Tokyo, Japan.
Employment
Based in Dallas, Celanese employs approximately 7,700 employees worldwide. Specifically, they employed 7,592 people in December 31, 2017. Celanese is centered on diversity and values the different cultures, customs and business practices each employee brings. The company makes it their mission to ensure employees are encouraged and nurtured to make a difference for their customers, company, and communities. Celanese Corporation continues to grow as a company by always bettering their products to satisfy customer needs. By doing so, they have shown competent financial results, have widely expanded their market globally, and have continued to make it their prerogative to positively impact the community.
Investing in Celanese Corporation can benefit stockholders, shareholders and investors in three ways:
- Financially, by showing increases in net earnings each year, shareholders and investors can definitely project that Celanese will produce significant amounts of revenue every year. The impressive performance in the company’s sales will generate an increase in its net income, therefore, shareholders and investors can also develop strong increases in the company’s profits.
- Globally, by expanding its operations not only within the United States but across other countries worldwide, Celanese is allowing its products to satisfy a more varied consumer and customer base. This expansion would also be a contributing factor to the company’s increase in financial performance.
- Communally, being a company that strives to be a difference maker for their customers, in communities, and for their company by promoting positivity and inclusiveness, allows Celanese to widen its market, which will also contribute to a rise in financial performance.
