Celanese Corp (CE) Q3 2025 Earnings Summary

Executive Summary

Q3 showed resilient non-GAAP execution amid weak demand: adjusted EPS $1.34 vs S&P Global consensus $1.22* (beat), on net sales $2.419B vs $2.512B* (miss). GAAP EPS was a loss of $(12.39) driven by ~$1.5B of non‑cash impairments in Engineered Materials (EM) tied to annual testing .
Cash generation was the standout: free cash flow of $375M and operating cash flow of $447M; FY25 FCF target of $700–$800M reiterated, with management emphasizing sustainable FCF into 2026 .
Portfolio/priorities advancing: definitive agreement to divest Micromax for ~$500M (close targeted Q1’26; proceeds to deleveraging) and intent to cease Lanaken acetate tow operations in H2’26 to lower AC cost base .
Q4 guide: adjusted EPS $0.85–$1.00; slides add EM and AC Q4 adjusted EBIT ranges ($165–$175M and $165–$180M). Seasonality, continued soft demand, and cost actions frame the near-term setup .
Management outlined a path to add ~$1–$2 of EPS in 2026 even on flattish demand, driven ~half by cost actions and ~half by EM pipeline/mix; debt maturities remain manageable given cash, divestiture proceeds, and opportunistic refinancing .

What Went Well and What Went Wrong

What Went Well
- Cash generation: free cash flow $375M and operating cash flow $447M on disciplined working capital and cost execution; FY25 FCF of $700–$800M reaffirmed .
- EM resilience via mix and cost: EM adjusted EBIT $200M (14.5% margin) and operating EBITDA $315M (22.8%) despite 6% sequential volume decline; HIPs and complexity reduction supported mix/margins .
- Strategic actions: signed ~$500M Micromax divestiture (proceeds to deleveraging; ~5% tax leakage), plus Lanaken tow closure plan to lower network costs in acetate tow .
What Went Wrong
- Demand softness and outages: consolidated net sales fell 4% QoQ and 9% YoY; AC saw weaker western hemisphere vinyls, continued acetate tow headwinds, and an unplanned Clear Lake methanol outage .
- GAAP loss driven by impairments: $(12.39) GAAP diluted EPS due to ~$1.5B non‑cash impairment in EM (goodwill and trade names), tied to market cap decline rather than lower cash flow projections .
- Revenue below consensus: $2.419B vs $2.512B*; management called out broad end-market caution and sequential auto build decline impacting EM volumes .

Financial Results

Overall P&L and cash metrics

Metric	Q3 2024	Q2 2025	Q3 2025
Net Sales ($USD Millions)	$2,648	$2,532	$2,419
GAAP Operating Profit (Loss) ($MM)	$245	$233	$(1,275)
Adjusted EBIT ($MM)	$454	$344	$326
Operating EBITDA ($MM)	$641	$532	$517
GAAP Diluted EPS (Total)	$1.03	$1.81	$(12.39)
Adjusted EPS	$2.41	$1.44	$1.34
Operating Cash Flow ($MM)	$79	$410	$447
Free Cash Flow ($MM)	$(16)	$311	$375

Segment detail

Segment	Net Sales ($MM)	Adj EBIT ($MM)	Adj EBIT Margin	Op EBITDA ($MM)	Op EBITDA Margin
EM – Q3 2024	$1,481	$235	15.9%	$346	23.4%
EM – Q2 2025	$1,442	$214	14.8%	$326	22.6%
EM – Q3 2025	$1,384	$200	14.5%	$315	22.8%
AC – Q3 2024	$1,190	$275	23.1%	$338	28.4%
AC – Q2 2025	$1,115	$196	17.6%	$260	23.3%
AC – Q3 2025	$1,061	$187	17.6%	$250	23.6%

KPI snapshot

KPI	Q3 2024	Q2 2025	Q3 2025
Adjusted EBIT Margin (Total)	17.1%	13.6%	13.5%
Operating EBITDA Margin (Total)	24.2%	21.0%	21.4%
Cash and Equivalents ($MM)	$813	$1,173	$1,440
Net Debt ($MM)	$12,118	$11,768	$11,414
Adjusted Effective Tax Rate (est.)	9% (2024)	9% (2025 est. at Q2)	8% (2025 est.)
EM inventory reduction target (FY25)	—	~$100M target	Continued progress

Vs. S&P Global consensus (Q3 actuals)

Metric	Actual	Consensus	Surprise
Adjusted EPS	$1.34	$1.22*	+$0.12 (beat)
Revenue ($MM)	$2,419	$2,512*	$(93) (miss)
EBITDA ($MM)	Company Operating EBITDA: $517	“EBITDA” consensus: $493* (S&P) vs S&P “actual” $337*	Definition mismatch noted (see footnote)

Footnote: S&P Global “EBITDA” may not align with Celanese “Operating EBITDA.” Company-reported Operating EBITDA was $517M . Values with asterisks are from S&P Global.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EPS	Q3 2025	$1.10–$1.40 (issued with Q2)	Actual: $1.34	In range; at upper end
Adjusted EPS	Q4 2025	—	$0.85–$1.00	New
Adjusted EBIT – EM	Q4 2025	—	$165–$175M (slides)	New
Adjusted EBIT – AC	Q4 2025	—	$165–$180M (slides)	New
Free Cash Flow	FY 2025	$700–$800M (Q1/Q2)	Reaffirmed $700–$800M	Maintained
Adjusted Effective Tax Rate	FY 2025	9% (earlier in 2025)	8% (updated)	Lowered

Earnings Call Themes & Trends

Topic	Q1 2025 (Prev-2)	Q2 2025 (Prev-1)	Q3 2025 (Current)	Trend
Cost reduction program	Raised 2025 savings target to ~$120M; SG&A and AC productivity focus	Additional footprint and site exits; reiterated cost focus	$120M 2025 realization; 2026 EM complexity reduction $30–$50M; further initiatives	Building, more detailed
Free cash flow focus	FY25 FCF target $700–$800M	Reiterated $700–$800M	Reaffirmed; sustainable into 2026 at low end	Stable, credible
Portfolio actions / deleveraging	Pursuing Micromax divestiture; refinancing to manage maturities	Progress on Micromax; RCF in place; term-loan paydown	Signed ~$500M Micromax sale (Q1’26 close); continued 2027 paydowns; 5% tax leakage	Executing, accelerates deleveraging
EM pipeline/mix	HIPs and differentiated products aided margins	Mix favorable; HIPs helped	EM price/mix improved; HIPs underpin margins	Improving mix resilience
AC utilization and footprint	Western Hemisphere demand weak; pricing actions	Demand soft; tow and vinyls headwinds	Low-cost U.S. assets full; flex others; tow weakness; Clear Lake outage	Defensive, flexible ops
Demand/seasonality	Tariff uncertainty; auto destock in WH	Softening 2H demand outlook	Normal Q4 seasonality; broad softness; no broad destock acceleration	Soft but orderly
Tow/footprint	—	Site exits (Elotex; Vamac)	Plan to cease Lanaken tow ops H2’26	Structural cost-down
Technology/AI enablement	—	—	Launched AskChemille.com AI assistant for grade selection	New initiative

Management Commentary

“Our strong third quarter free cash flow and Micromax® divestiture announcement clearly demonstrate that we are executing against our strategic action plans.” — Scott Richardson, CEO .
“We expect to see volume declines in the fourth quarter due to western hemisphere seasonality… we anticipate fourth quarter adjusted earnings per share to be $0.85 to $1.00.” — CEO .
On impairment: “There was not a reduction in the projected cash flows of engineered materials… [the impairment] was really driven by a reduction in the stock price” (market‑to‑book) — CFO .
On 2026 earnings: “Even if we’re in flattish demand… we’re going to be able to grow EPS by $1 to $2 next year,” roughly half from cost actions and half from EM pipeline .
On deleveraging/maturities: confident in funding 2026–27 maturities with cash generation, proceeds, and opportunistic refinancing; Micromax tax leakage ~5% — CFO .
On AC operations: “Lowest‑cost assets are running at 100%,” flexing Singapore/Frankfurt as needed; price stabilized in China, pressure in Europe downstream .

Q&A Highlights

2026 EPS bridge: ~$1–$2 uplift on flattish demand; ~50/50 split cost actions vs EM pipeline/mix; incremental $30–$40M lower interest expense also noted .
AC pricing/utilization: Europe downstream softness (vinyls/emulsions); China pricing stabilized with slight lift in October; U.S. relatively stable; low-cost U.S. assets prioritized .
Free cash flow sustainability: 2025 working capital source ~$250M YTD; 2026 FCF at least at low end of $700–$800M with EBITDA uplift and lower restructuring outlays .
Portfolio/JVs: Micromax gets them ~halfway to $1B divestiture goal by 2027; JVs evaluated case-by-case for value creation; methanol JV not specifically discussed beyond principles .
Tow footprint action: Lanaken closure to yield ~$20–$30M productivity savings in 2027; modest benefit building in late 2026 .

Estimates Context

Q3 vs consensus (S&P Global): Adjusted EPS $1.34 vs $1.22* (beat); Revenue $2,419M vs $2,512M* (miss). Estimate count: EPS 16; Revenue 12*. Company Operating EBITDA was $517M; S&P’s “EBITDA Consensus Mean” was $493M* (note definitional differences) .
Q4 outlook vs consensus: Company guide $0.85–$1.00; S&P EPS consensus $0.92*—roughly in-line; Revenue consensus $2,245M* under soft demand and seasonality.
Values with asterisks are from S&P Global.

Key Takeaways for Investors

Cash is the anchor: $375M FCF in Q3 and reaffirmed $700–$800M FY25 target underpin deleveraging; net debt moved to $11.4B with $1.4B cash and $1.75B undrawn RCF .
Mix over volume in EM: HIPs and pricing/mix support double‑digit margins despite volume downticks; watch EM adj EBIT hold in the ~$165–$175M Q4 guide range .
AC defensiveness: prioritization of low‑cost U.S. assets and footprint flex keeps Operating EBITDA margins >20% even in soft markets; Clear Lake outage was a transitory headwind .
Structural portfolio clean‑up: Micromax sale (~$500M proceeds, Q1’26 close) and Lanaken closure set up lower leverage and a leaner tow footprint into 2026–27 .
2026 self‑help: management’s ~$1–$2 EPS uplift on flat demand, plus sustained FCF at low end of FY25 range, argue for upward estimate bias if macro stabilizes .
Risk flags: continued demand softness in Europe, acetate tow secular pressure, and potential pricing pressure in AC downstream could cap near‑term upside .
Trading lens: near‑term stock narrative hinges on FCF delivery and balance‑sheet progress versus the GAAP impairment overhang; Q4 seasonality likely dampens prints before 2026 cost/mix benefits emerge .

Values with asterisks are from S&P Global.