Celanese Corporation Investment Recommendations

1774 words (7 pages) Essay in Finance

23/09/19 Finance Reference this

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Celanese Corporation

Executive Summary

This report will analyze Celanese’s revenue, profit, locations, employment, and present recommendations for investment.

Financial Performance

Monetary execution is an expansive figure of Celanese Corporation’s wealth as a business. This corporation brings in an income of about $402 billion. The idea of Celanese’s business requires the company to keep expanding with the end goal to make much more noteworthy progress in the coming years. As they continue to grow in the concept of developing in its business volume and benefits, its stock costs will pursue.

Global Expansion

More global development is another expansive component of the Celanese Corporation’s prosperity. The company has numerous manufacturing operations worldwide. This incorporates, one state within the U.S., Canada, China, Europe, Mexico, Japan and India. For the quantity of offices accessible, reason of making, and offering its items, it has over 7,000 employees. Being such an expansive company, Celanese guarantees every buyer is fulfilled to the best of their ability.

Community Involvement

Community involvement is a vital factor to Celanese’s success. By simply producing their products without anyone else’s input, Celanese is helping the community. Helping the community in the way that they are was the Dreyfus brothers’ starting objective and is still something that they are loyal to doing.

The History of Celanese

For as far back as a century, Celanese has strongly developed from when it was first thought of in Switzerland by 2 siblings to a worldwide innovation and specialty materials organization. The Dreyfus siblings, Camille and Henri, had a desire for the organization and that was to extend it to be one of the biggest chemical producers.

The birth of Celanese was in 1921, British Celanese started to create acetic acid derivation yarn which has a wide range of uses like furniture, mold, family supplies and even medication. By 1927, Amcelle decided that it was time for a change, so the title of the company was renamed to “Celanese Enterprise of America”. The company moved on to deliver plastics, chemicals, and fibers, and was near to becoming one of the biggest chemical producers. In 1945, within the U.S., Celanese thought it would be a great thought to begin generation plants in Texas to create acetaldehyde, formaldehyde, methanol and acetone. In any case, fibers did stay Celanese’s most critical item since it had a big role to play and needed to be utilized. Moving on to display day, Celanese presently has thermoplastics custom compounder, Omni Plastics. These achievements included a part of offer assistance within the Americas to back the company’s developing buyer base. From the worldwide production of their Acetyl Chain, they give materials that are vital to the worldwide chemical substances, paints, and coatings businesses. Celanese makes car and buyer electronic plans way better and enable life-improving medical, nourishment and refreshment items.

 

Mark C. Rohr

Chairman and CEO

Mark C. Rohr got to be chairman and chief official officer (CEO) of Celanese in April 2012. He got to be the chairman and CEO after being a part of the board of executives since 2007. He right now serves on the top managerial staff of Ashland, Inc.  For more than 10 years before Celanese, he was official chairman and chief of Albemarle Organization. Also, he is very involved in working with the company and being a pioneer. In fact, in 2016 Mark 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 still serves on the advisory board for the university’s College of Arts and Sciences. Rohr has a ton of history in philanthropic administration benefit that center on education and educational support. He is board of chair for City Year Dallas and the Commit! Association. 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 aid the needs of families that confront behavior, communication, and developmental issues.

 

Investing in Celanese

Introduction

Celanese Corporation has developed amazingly as a company since it was first consolidated back in the early 1900s. They are a producer of high-execution designed polymers that are, more often than not, utilized in a variety of high-value applications. And it is one of the world’s biggest producers of acetyl items, which are intermediate chemicals, for nearly all major businesses.

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.

 

 

Revenue

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.

Third Quarter Sales

The increase 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.

Profit

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

Engineered Materials generated net earnings 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 the adjusted EBIT margin was 29.1 percent.

AcetateTow

Acetate Tow GAAP’s working benefit was $26 million and portion income were $65 million within the third quarter. Cost within the quarter declined compared to the same quarter in 2017 due to lower industry/limited use and was in part counterbalanced by mix and profitability gains.

AcetylChain

The Acetyl Chain generated net earnings 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.

CashFlowandTax

Operating cash flow within the third quarter was $467 million. Free cash flow was $382 million, driven by solid commerce results and upheld by restrained working capital administration. The successful US GAAP charge rate was 12 percent compared to 20 percent within the third quarter of 2017, lead primarily by alterations to estimate stipends on late charge assets and the effect of the Tax Cuts and Jobs Act.

Locations

Celanese Corporation central command is in Dallas, Texas. Strategically, they are situated completely different places within the world to meet client demand. They have manufacturing offices and sales workplaces within the United States, Europe, Mexico and Asia. Other areas incorporate Europe (The Netherlands), their commercial center is in Germany, the Holding Co., Ltd is found in China, Celanese Chemicals India, and finally Tokyo, Japan.

Employment

Based in Dallas, Texas, Celanese employs around 7,700 representatives around the world. Particularly, they employed 7,592 individuals in December 31, 2017. Celanese is centered on differing qualities of people and values the distinctive societies, traditions and trade practices each representative brings. The company makes it their mission to guarantee workers are empowered and sustained to create a contrast for their clients, company, and communities.

Conclusions

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:

  1. 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.
  2. 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.
  3. 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.

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