Hello, and welcome to the Celanese Q4 2023 earnings call and webcast. If anyone should require operator assistance, please press star zero on your telephone keypad. A question-and-answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star one on your telephone keypad. We do ask that you please ask one question and one follow-up. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Brandon Ayache, Vice President, Investor Relations. Please go ahead, Brandon. Thanks, Kevin. Welcome to the Celanese Corporation fourth quarter 2023 earnings conference call. My name is Brandon Ayache, Vice President of Investor Relations, and with me today on the call are Lori Ryerkerk, Chairman of the Board and Chief Executive Officer, Scott Richardson, Chief Operating Officer, and Chuck Kyrish, Chief Financial Officer. Celanese distributed its fourth quarter earnings release via Business Wire and posted prepared comments on our investor relations website yesterday afternoon. As a reminder, we'll discuss non-GAAP financial measures today. You can find definitions of these measures, as well as reconciliations to the comparable GAAP measures on our website. Today's presentation will also include forward-looking statements. Please review the cautionary language regarding forward-looking statements, which can be found at the end of both the press release and the prepared comments. Form 8-K reports containing all these materials have also been submitted to the SEC. With that, Kevin, let's go ahead and open it up for questions. Thank you. We're now conducting a question-and-answer session. If you'd like to be placed in the question queue, please press star one on your telephone keypad. You may press star two if you'd like to remove your question from the queue. As a reminder, we ask you, please ask one question and one follow-up, then return to the queue. Our first question today is coming from Josh Spector from UBS. Your line is now live. Yeah, hi. Good morning. I was wondering if you could talk about your expectations for the M&M business in 2024 and kind of both near term and longer term. So in the first quarter, you seem to call out some improvement. I'm not really sure if that's an assumption of market improvement or price cost improvement in of earnings. So wanted to clarify that. And then second, kind of how do you layer on the cost savings versus market and everything else, where you expect to exit the year? Thanks. Yeah, thanks for the question, Josh. If we look at first quarter, we do expect a really meaningful lift in M&M earnings in the first quarter, and in fact, expect first quarter to be our highest EBITDA, quarterly EBITDA, since the acquisition. I think that's, you know, a number of things. The biggest factor is really starting to see the pull-through of lower raw materials and lower fixed costs, that we were generating this year, but needed to move the volume through to flush the higher cost material through inventory. So I'd say, you know, that's over half of the improvement we expect to see in the first quarter. We do expect recovery in auto versus the seasonal destocking that we experienced in the fourth quarter, which was an issue for M&M. Then we start to see some of the initial fixed cost improvements from the footprint optimizations that we initiated last year and announced. Although, you know, would expect those to become more meaningful in the second half of the year and actually into next year as well. And so I'd say, you know, we do see, you know, evidence for that is we are seeing variable margin improving in January as we start to see that inventory pull through of lower raws and fixed costs. So we feel pretty confident in that. And, you know, for some key areas like Zytel, you know, we saw that really bottom out in the fourth quarter, and we're starting to see the recovery there. So, you know, I'd, I'd say we feel good about the first quarter and the meaningful uplift that we'll have in M&M next year as well. You know, fundamentally, I would say we continue to see M&M as a really great business. You know, all the reasons that we bought it are still there. We have just been a very difficult backdrop that has made it hard to get the full value of the synergies, as well as some of the volume recovery and growth that we had counted on. I think if you looked at it today in what would be a more normal demand backdrop, we would find that M&M would be accretive. Okay, thank you. I'll leave it there. Thank you. Next question is coming from Kevin McCarthy, from Vertical Research Partners. Your line is now live. Yes, good morning. Lori, I think you completed an SAP implementation just a few weeks ago. Can you comment on how that's going so far, you know, kind of the level of integration across the company, and remind us of what the benefits might be as your TSAs roll off? Yeah, thanks for the question, Kevin. If we... So we did do our SAP integration. The last version of that went live February first. You know, maybe I should actually start out by thanking the over 1,600 people in the organization who have worked on the, on the SAP integration. Not full-time, obviously, but had some role in it. And really, you know, we often think about SAP integration as an IT effort, but it's really a full business effort, including the finance, customer service, commercial businesses. You know, it goes across everybody, and our folks have worked very hard to make this a success. And only 15 months after we did the integration, which I think is fast by any standard. That is after they'd already integrated the heritage Celanese businesses earlier last year onto the same SAP S/4 platform. So you know, really excited to get this done. I would say this is probably the last major step in our integration. And you know, will really help us now as we keep layering on the various processes to the platform, will really help us achieve the next level of synergies, including getting rid of the TSA from DuPont, but also the synergies of, you know, people being able to work together on one platform, being able to have better access to the data, et cetera. I'd say, you know, the integration went very smoothly, so supply chain, production are all on the new SAP platform, running well. We're able to take an order, we're able to produce and ship an order, and we're able to get paid for an order. So that was the first order of business, and now we're gearing up for our first month in close on the new platform. But again, I think it's been remarkably smooth. Great kudos to the extended team that made that happen. And I'd say, so far on the integration, we've seen no surprises. ... Thank you for that. And then secondly, if I may, can you comment on your input cost outlook for 2024? And if those costs trended flat from here, what sort of benefit or tailwind might we expect for this year? So I, yeah, I would say, you know, if, I mean, if you're talking about raw material costs, I mean, certainly, you know, raws have come down versus where we were a year ago. And, you know, who knows what will happen, but we also know that we are now pulling through the lower cost of raw and lower fixed costs, that we built on. I would say, you know, 2024 is very much a year of being able to deliver on the actions that were taken in 2023. And so, you know, I think that is, that is built in, obviously, to our outlook for the year. I think, you know, I think the important thing that we're focused on and, and we've talked about all year, is we want to continue to control what's controllable. At Celanese, we're really good at execution. I think you see that with what we've done so far, all of the projects we're able to take on at the same time. And so this, you know, really, as we move into 2024, we see the benefits of that execution in 2023, as well as all the steps we have in 2024. Thanks very much. Thank you. Next question today is coming from Jeff Zekauskas from JP Morgan. Your line is now live. Thanks very much. You said that the synergies in the M&M business would be $150 million. Does that mean that the adjusted EBIT growth in M&M should be at least $150 million in 2024, year-over-year? Thanks, Jeff. You know, no, because a number of factors there. So the synergies we're expecting for this year is $150 million. Only about 40% of those actually show up in M&M. The vast majority of them do show up in the EM profile, but some of them also show up in BU other and other areas. Okay. Maybe to reframe it a different way, do you expect the M&M business to grow its EBIT exclusive of the synergies? Yes. So, yes, thank you. I probably misunderstood your first question. We do expect growth across both our heritage EM businesses and a significant uplift in M&M businesses, even exclusive of synergies for the year. I mean, if you think about our outlook for the year of $11-$12, and think about, you know, we've called out the hundred thousand, or sorry, $100 million more in acetyl, the remainder of the uplift from the $9 we were at this year really comes from that integrated EM business. Great. Thank you so much. Thank you. Next question today is coming from Mike Sison from Wells Fargo. Your line is now live. Hey, good morning. Just wondering if you could help bridge us from 1Q to the remaining quarters. I know there seems to be a lot more headwinds in Q1, more, you know, the synergies and everything else, all the positives are coming in Q2 to Q3. So when you think about going from, you know, $2 to a lot higher in the remaining 3 quarters, how, and how does that sort of happen? And then are the last 3 quarters basically equal in EPS, is kind of the way to look at it? Yeah, thanks for the question, Mike. The way I look at it is, you know, if we look at what we're expecting to achieve in Q1, if you do the math, it says we need 3-3.40 each of the remaining quarters. I would expect that to ramp up more in the second half, but I would still expect a pretty good ramp in the second quarter as well. So think about it this way, you don't have the turnarounds in Q2 that you had in Q1, so that's a $50 million lift. And then in EM, the vast majority of the additional lifts in that quarter comes from EM, and it's really synergies and flow through of lower cost inventory. It's returning to... You know, we have some seasonality, and medical is always low in first quarter. That should come back in the second quarter. So and then, you know, in AC, you start to see the benefits of the project as we move through the second quarter. So, you know, I would say, you know, we do expect a significant uplift in Q2, but even more uplift in Q3 and Q4. I would expect Q3 to be the highest quarter, because we would expect some seasonality again in Q4. Got it. And then just a quick follow-up. You know, several companies have impaired assets from acquisitions over the last couple of years. Now, I know M&M has underperformed, but are there any parts of M&M close to that in terms of impairment levels? And if so, you know, what are the areas? Yeah, Mike, we'll look at that when that time comes. We've taken a look at that at the EM level and have not seen, you know, markers on that that would cause us at this point in time to think that's a possibility. Great. Thank you. Thank you. Next question is coming from Ghansham Panjabi from Baird. Your line is now live. Hey, guys. Good morning. Hey, Lori, you know, just on a high level basis, what sort of global macroeconomic backdrop are you embedding as it relates to your guidance? You know, obviously, interest rates are still high. ISM very mixed globally. China, you know, who knows? It still sounds like there's pockets of destocking, et cetera, on the durable goods side. How do you sort of factor that, all that in, as it relates to the evolution in 2024? Yeah, look, I would say at this stage, we are really focused on what we can control. So what we've assumed in our $11-$12 guide is, you know, we see the kind of the diminishing of destocking, so we are assuming that we are getting to the destocking. We are not, though, assuming a really big uptick in demand or restocking. So, you know, I would say we're still assuming kind of below normal demand patterns, but without the absence of destocking. So, we are—that is kind of the one upside that we're assuming. That's maybe a few% at the most. And otherwise, it's really our outlook is really focused on what we can control. I would say if we look at the market, I mean, good news is, I think, you know, as we're starting 2024, although I'd like to say we're back in normal demand patterns, we're not. But look, we are starting to see some easing of some of the demand and competitive challenges we had. We called out, you know, we're seeing less movement of materials out of Asia into Europe. So that indicates to us that demand is, you know, local demand is improving in China, and we see that. I would say in China, generally, we feel like demand for China consumption is approaching normal order patterns and normal levels. But the exports of goods out of China is still depressed, especially into Europe. So there's still some downside on demand there. I think, you know, in the Americas, we're seeing demand come back gradually. We saw some improvement in industrial in the fourth quarter, but there—then we saw the reduction in auto, which was seasonal destocking. I expect that to come back in the first quarter. But again, not anticipating a huge uptick in demand there for consumer goods and electronics. You know, in Europe, I'd say similar to the U.S., but probably even a longer timeframe and before we could return to, to demand. I mean, You know, the other thing I would add, though, is, look, we, we are seeing some improvement in construction, kind of normalizing, so that's good, and, and that's supported by, you know, a slight movement upward in terms of AM pricing as well. Okay, super helpful. And then for the second question, you know, the outages in 2024 that seem front-end loaded, but were those both just sort of pull forward, just given weaker demand, or was that sort of in line with the original plan? No, I'd say it's very much in line with the original plan. In fact, you know, a little bit, we've pushed back a little out of 2023 into 2024 with the delay in the project at Clear Lake. But I would say these are planned turnarounds. These are turnarounds that occur every, you know, 3 years in the case of POM, 4 years in the case of methanol. And so very much as planned. And I would also say they've gone very well. We've gotten through all the major discovery work and no surprises, so feel like we're on track to meet our plans around those turnarounds. Okay, terrific. Thanks so much. Thank you. Next question is coming from Alexei Yefremov, from KeyBanc Capital Markets. Your line is now live. Thanks, and good morning. This is Ryan on for Alexei. The first question, I want to dig into a little bit on nylon pricing. I believe at least one peer of yours is out in the market announcing some pricing. Are you seeing any momentum in the market here, and can you just talk about what your expectations might be for the balance of the year? Yeah, look, nylon pricing varies a lot depending by region or by, you know, end use. But I would say in general, we feel like we hit kind of the bottom in terms of variable margins. So it's not just pricing that's important, but it's raws as well. So raws has come down. But I'd say in general, we feel like we're coming off the bottom. But let me hand it over to Scott, because I think he can give a bit more color here. No, I think Lori, Lori hit it, Brian. You know, we are seeing a lot of stability, which is a really good thing, and as Lori mentioned, we're starting to see the flow-through of variable costs. So margins are expanding in the nylon business, and we continue to work, as we said in previous quarters, to get back some of that share that had been lost prior to us closing the transaction. So we feel good about the trajectory as we work our way through this year of the nylon business. Great. That's very helpful. Thank you. And then if I would just dig a little bit into the $150 million synergy target in your bridge for 2024. If there's, you know, no demand improvement, demand kind of trends sideways from here, do you still feel like you're confident in being able to deliver, you know, on that target? Thanks. Yeah. So I feel really confident in our ability to deliver on that $150 million. I think if you look at it, it really is in 3 buckets. You know, the first really being the footprint optimization steps that we've taken at the end of this year, which start to show up in the bottom line next year. So you know, that's probably about $50 million in the year. We have the transition to the single SAP platform, which is happening now, which gets us out of the TSA, and we get other synergies from. And then we have cross-sell opportunities, which have been identified this year, closed 1 this year, which will, you know, start to come online next year, and we'll start to see the revenue return from. I feel very confident about that $150 million of synergies for 2024. Thank you. Next question is coming from Frank Mitsch from Fermium Research. Your line is now live. Hey, good morning. If I could just follow up, did you guys disclose what your M&M synergies were realized for 2023? I apologize if I missed that. I'm not sure if we disclosed it or not, but we achieved $100 million in synergies in 2023. A little bit lower than we had anticipated early in the year, but still above what we had thought at the beginning of the year. And really the reason for that was the volume related, just not seeing the volume recovery and some of the volume-related synergies not pulling through. But again, those synergies are still there. They will just pull through at a later time as volumes recover. Gotcha. Understood, understood. And, if I could, you know, ask a question on the Acetyl Chain. Yeah, I know back in the 2021 Investor Day, you know, back when you had Acetate Tow split out, the expectation was that it was gonna be relatively flat to 2021 in during 2023 at $245 million of EBIT. I suspect it might have been higher than that. Can you give us an idea as to how well that part of the business is performing and what your outlook is? Yeah, look, Acetate Tow has had a really good year this year as a result of the work we did last year to really reset how we contracted and, and how we managed that business. As you'll recall, we pulled it in to be part of the acetyl chain to give us more flexibility and more optionality, much like we do for the rest of our projects. So I would say, you know, we called out, you know, our target was to get to the $245 million at Investor Day. I would say we have meaningfully exceeded that target for the year. But again, I think, you know, the important thing here is we are just running as part of the chain. And, you know, that way, we stabilize the earnings of the entire Acetyl Chain, much like we do with, say, redispersible Powders and other downstream derivatives. It simply gives us another outlet to pull acetic acid through the chain to make sure we can maximize value from the chain and again, stabilize earnings. Understood. Thank you, Lori. Thank you. Next question is coming from Vincent Andrews from Morgan Stanley. Your line is now live. Hi, this is Turner Henrikson for Vincent. I was wondering if you could provide your updated view on auto builds for 2024 and the impact of slowing EV sales on product mix in EM and M&M. Also, how exposed to China auto- China autos is the combined EM and M&M business? Yeah, thanks, Turner. First, let me start with auto builds. I think the industry, most publications are projecting somewhere, you know, more or less flattish build. You know, our business tends to grow about 150-200 basis points above build, so that's what we're baking into our current plan. When it comes to the mix of EVs, you know, we're largely, across our EM portfolio, pretty agnostic to whether it's an EV, an ICE vehicle, or, you know, honestly, hybrids are the best. And we have about, 20% more accessible content on a hybrid vehicle. So you know, we're starting, particularly here in the U.S., to see more shifts to hybrid. That tends to be a good thing, for us overall. So really no impact if we see the mix impact here in the U.S. change away from EVs and move back to ICE, or to hybrids. And from a China perspective, you know, overall, if you kind of start at the corporate level, it's about a quarter of our overall sales. You bring that down into EM, pretty similar. And, you know, our overall exposure is kind of around that range as well, in terms of automotive in China. Great, thanks for the detail. On the lower raw materials cost in nylon, how significant is this expected to be in 2024? And what's the confidence that these will not get passed through to price? You know, I think, as Lori mentioned, you know, we have a bucket of the lower variable and fixed costs that we think is gonna flow through the earnings. That could be the largest year-over-year benefit for us. A good chunk of that is in the nylon part of the M&M portfolio. So it has the ability to be a pretty significant driver of uplift year-over-year. A lot will depend upon what happens with raw materials as well as pricing in the second half of the year. We feel good about where things are in the first half of the year, given the amount of inventory that we have in the order book, as we see it. You know, pricing, as we said earlier, has kind of bottomed out in nylon, so we don't expect to see a lot of pricing impact, downward from where it is today. So we feel very confident that the margins we're seeing right now here, at least in the first half, are here to stay. Okay, thanks for the color. Thank you. Next question is coming from Arun Viswanathan from RBC. Your line is now live. Arun, perhaps your phone is on mute. Arun, your line is live. Please re-cue. Our next question is coming from David Begleiter from Deutsche Bank. Your line is now live. Thank you. Lori, can you talk to the foundational level of earnings and acetyls post the Clear Lake expansion coming on stream and given the step up in Acetate Tow earnings we've seen this year? Yeah, it's pretty simple. I mean, we're, you know, we said foundational level of earnings is $1.3 billion today. I think we proved that in 2023 in what were pretty sub-foundational markets for most of the year. And next year, we expect, or this year, I should say, we expect that to increase by $100 million, which is really what the, what we expect to get in productivity from the combination of Panther and our CCU project. Panther being, sorry, the Clear Lake acetic acid expansion. If you assume a normalized level of acetyl demand, what could their earnings power be? Well, I mean, look, we've had years where we were over $2 billion in acetyl. So I mean, you know, when we have fly-ups and those sorts of things, because the supply outages or sudden demand increases, it can be very high. But again, right now, we're focused on what we can control, and so I would, you know, focus on that 1.4 level of foundational earnings. One more thing, just on the tax rate, is 9% a good rate going beyond 2024? Hey, David, this is Chuck. For 2024, we do expect a really similar rate to 2023. I'd use 9% for now for that, and we will update you if that changes. You know, going forward, we feel like we're in a good position. It'll depend on the jurisdictional mix of our earnings. And we'll update that each year, but we feel like we're in a pretty good position where we are right now. Thank you. Thank you. Our next question is coming in from Arun Visawanathan from RBC. Your line is now live. Great. Thanks for taking my question, and, apologies for that earlier. Yeah, I guess first off, just on the deleveraging trajectory, I know that the target obviously is to get to three turns as rapidly as possible. Maybe you can just walk us through the opportunity on free cash flow and how you expect to get to that three turns. Is there any more opportunity to harvest a little bit more free cash flow out of working capital? Or, yeah, maybe we can start with that. Yeah, let me ask Chuck to cover the details. But, you know, what I would say is, this year, like we were last year, we are very focused on generation of free cash flow and deleveraging. We're very committed to maintaining that investment grade, and so, you know, we are anxious to delever to that three times level so that we will, you know, have flexibility in our use of capital, going forward and be able to, you know, move on with other opportunities in the company. But Chuck, let me- Yeah. Let you walk through the buckets. Yeah, thanks. Thanks, Laurie. Thanks, Arun. Yeah, first, I wanna, I wanna just thank the, the global teams that we have that drove the record free cash results in 2023. That's a lot of work by a lot of smart people. So I just wanna salute that for your, for your efforts. You know who you are out there. Yeah, for 2024, for 2024, look, let me give you a few key drivers that we're, that we're seeing for free cash flow right now. If we start with earnings, if you take our EPS guide, that would translate into about, you know, $300 million of incremental net income, give or take. You know, on working capital, you know, our target for 2024 is $100-$150 million benefit for the year. You know, this compares with a little over $500 million cash benefit for the year in 2023, so not as much working capital benefit year-over-year, but we're still striving for working capital benefit within the year. And this driver could change, depending on how demand shapes up across 2024, of course, and kind of how earnings and synergies ramp. And we do know that, you know, CapEx should be lower year-over-year by $100 million-$150 million as we cycle out of a lot of large projects. Those are the key drivers. There are some other puts and takes in that that we need to refine as the year goes on, like cash tax and cost to achieve synergies. But I would focus on those key drivers right now, yeah, in 2024. As you know, we are really focused on converting our earnings into cash flow, deleveraging the balance sheet. You know, we think we're gonna finish this year much closer to our 3x target, and we expect to finish to our 3x target in 2025. Great. Thanks for that. And then, I just have one quick follow-up. Just thinking about the portfolio as it stands now, obviously, you've gone through some, you know, changes within the food ingredients and, you know, integrating M&M. Is there anything else on the horizon that we should be thinking about as far as portfolio management or potential divestitures or anything along those lines? Thanks. Yeah, thanks, Arun. Look, we still have a ways to go with the acquisition of M&M and the cleanup activities. I think as we get through S4, this is a big, big milestone for us and will allow us to, you know, find other opportunities to better run these businesses together. So that is kind of first and foremost our focus. But I would also say as it comes to divestitures, you know, we will, as we've always been, be opportunistic and smart about it, and if we see the opportunity to divest something in the company that is worth that more to someone else than it is to us, we will, of course, pursue that. Thanks. Thank you. Our next question today is coming from Hassan Ahmed from Alembic G lobal. Your line is now live. Morning, Lori and Scott. You know, a two-part question on the Acetyl Chain to start with. You know, your margins in Q4 sequentially were flat to even slightly up, you know, which was a bit surprising to me, keeping in mind what the acetic acid to methanol spread did. So, you know, part one of the question is, you know, how did you achieve that margin expansion? And, then, you know, as I sort of sit there and think about 2023 for acetic, you know, there seemed to have been quite a few industry outages, which I would imagine you guys benefited from. So, you know, as you guys sort of gave us that bridge to 2024 earnings, you know, you're talking about a $50 million-$75 million headwind from one-offs. Is the positive impact of sort of those outages baked into that as well? Yeah, thanks for the question, Hassan. Let me start by really kind of commending the team for continuing to flex this integrated value chain model. You know, what you saw in the fourth quarter is a combination of the team flexing production, as much as possible, given some of the outages, that were unexpected in the Americas, and flexing that to the highest value end uses that we saw, and to our teams in the field and manufacturing environment for really, pulling costs down as much as possible, given the economic environment that we're in. As you alluded to, some of those reverse out as we move our way into next year. But, you know, I think we do expect, you know, the markets to grow kind of in that global GDP level in the Acetyl value chain, which will give us some potential offset to any kind of industry outages that may or may not happen. You know, we are expecting utilizations to remain in kind of the 85%-90% range. So, you know, much like you saw last year, if you see some dislocation in markets, we tend to be able to benefit from that in the short term. Very helpful, Scott. As a follow-up on the sort of M&M side of things, you know, you guys, obviously, you know, shut down some nylon capacity. So, you know, if you could sort of talk a bit about what you're seeing in terms of near to medium term supply-demand fundamentals on nylon and, you know, part and parcel with that, you know, in the last quarter, you guys talked about maximizing your make versus buy decision. You know, what's the thought process in light of what you're seeing in terms of nylon supply-demand fundamentals on the make versus buy as well? Our focus is creating a contemporary operating model for nylon. Not relying on low-cost raw materials to create value, but controlling, you know, where that value creation comes from. And for us, that really comes from creating compounds that are unique for our customers and maximizing that part of the value chain as much as possible. We have the ability, given where the dynamics are, to make some of those make versus buy decisions, as you mentioned, Arun or Hassan. And, you know, as we do that, we're gonna be focused, much like we do in the acetyl chain, on what is the lowest cost to supply those compounds so we can remain competitive. But fundamentally, we are working to create a business model here that is minimum of 25% EBITDA in any economic environment. And so the first steps of that, to take controllable costs out with the shutdown of our production capacity in Europe, and then maximize our low-cost capacities that we have here in the Americas, as well as purchases in Asia. Very helpful, Scott. Thank you so much. Thank you. Next question is coming from Laurence Alexander from Jefferies. Your line is now live. Good morning. Can you clarify the EBITDA impact from incentive comp and working capital flows in 2023, and therefore, the bridge to 2024? Yeah. So, sorry, I was just having a little trouble hearing your question. In 2023, you know, we reduced inventory by about $450 million. Of that, you know, 80% came from EM, the rest came from AC. And while I would say, you know, it was punitive to our EBIT for the year, at the same time, our businesses did a really great job, you know, offsetting the impacts of that, as well as minimizing it and making sure we took, you know, took some reductions in raw materials and intermediates and things that didn't have as much of an EBITDA impact. Okay, great. And just in terms of the incentive comp, 2024 versus 2023, is it an incremental headwind? I would, you know, for the inventory reductions, which will be less this year, I would expect a similar level of EBITDA hit for that, so I don't see that as being a year-on-year headwind. Yeah, and on incentive comp, Lawrence, we don't... I wouldn't expect it to be material year-over-year. Okay. Thank you. Thank you. Next question is coming from Salvator Tiano from Bank of America. Your line is now live. Thank you very much. So first question I wanted to ask a little bit, it's on the Acetyl Chain. It seems like you're assuming Acetic Acid and VAM probably will be flat year-on-year, so the growth will come from the Clear Lake expansion. What are you seeing on the supplies? Because it seems to us that there's a lot of supply coming online in China in 2024. Could this actually be an additional risk? And if acid prices do come down, that is not part of the $11-$12 guidance? Yeah, Sal, thanks for your question. Let me try to answer it. You cut out on us a few times here. Let me first kind of hit, you know, what Lori talked about earlier around the $100 million really coming through productivity on a year-over-year basis. As we mentioned earlier on the call, we would expect to see, you know, growth more in line with GDP, so low single digits there, given what we're seeing kind of right now in the construction sector, as Lori talked about earlier. That's kind of gonna be offset by some of the outages that we had earlier in the year. So I would not focus too much on changes in utilization. The industry has more or less kind of already absorbed that new capacity that has come online in China. Really think about the year-over-year lift coming from our productivity projects. ... And maybe if I could add just a little bit more color around that. If you actually look at, say, China acetic acid pricing through the year, it was actually very steady throughout the year, except for a very short blip that we saw at the end of Q3, based on some outages in the industry. But that was very short-lived and really went away as we went through, you know, got into the fourth quarter. So, you know, I would say we saw capacity come online last year as well, more capacity last year than is going to come online, and that's already been absorbed, and we're still at that 85%-90% utilization. So, you know, while there may be some additions in 2024, it is much smaller than we experienced in 2023, and we didn't really see the 2023 capacity adds have a long-term impact on pricing. Okay, perfect. And for my follow-up, I want to ask a little bit about the Red Sea disruptions, and assuming that that may seem to disrupt Asia to Europe trade flows, how could this impact the—how could this impact Celanese earnings, especially in Europe? I guess I could see this being positive in regard to lower nylon or POM imports, but at the same time, it could affect the imports of some of the raw materials you use. So what would be the net impact, do you think? Yeah, I'm not sure that there'll be any benefit at this point in time. What I'd say, though, this is a good reflection of the value of our global supply chain for all of our businesses, because despite the challenges in the Red Sea and the Suez, you know, there has been a lengthening of supply chain for many, many producers and suppliers. There has also been, you know, that's added some cost for some of the folks trying to get into Europe, in particular from Asia. But because of our global supply chain, we are able to provide from other parts of the world, so we're not seeing the increased cost. What I'd say is, you know, most of the effect we've seen, I'd say, is temporary as people adjust to the new lengthened global supply chain. We're not really baking in any uplift or loss at this point from the issues in the Suez. Thank you very much. Thank you. Next question today is coming from Matthew Blair from Tudor, Pickering, Holt. Your line is now live. Hey, good morning. So the automakers have been talking about running a lot leaner going forward and keeping their inventories low and supporting their margins, rather than the previous way of, you know, just overproducing and then putting everything on sale. And I was wondering, how do you see this shift from Celanese's perspective? Is this potentially exciting to you because, you know, perhaps it could result in higher margins for Celanese, or is this potentially a concern because it might have some impact on your overall auto volumes? We don't see it as being a really material impact for us. I mean, if you think about carrying lower inventories, it's largely already kind of been baked in to where things are right now. And honestly, it just creates, I think, less kind of ups and downs from what we've historically seen, because, you know, you get restocking, destocking. To not have that in the future, you know, certainly would not be a bad thing for us at all. So but overall, we don't see really any significant impact. Sounds good. And then I just wanted to clarify on the Clear Lake acetic acid expansion, this $100 million in productivity, is this also your estimate of, like, the long run EBITDA potential for this expansion? Or what do you think it could generate in a more normalized environment? Well, you know, remember, we justified the expansion of Clear Lake acid and the CCU project really. Well, the Clear Lake acid just on productivity, so catalyst savings, energy savings, less freight by shipping out of the U.S. versus Asia to Europe, you know, so those sorts of things. So that $100 million, I would say, is intact. It also tied to the CCU project, which again, was a very low-cost project that really was initially put in place just to generate additional methanol for use at our Clear Lake site. Now, we think there'll be more value from that as we go forward, as we see what customer demand is for lower carbon products. But, you know, we probably won't have a good feel for that till later in the year and into 2025. You know, if we were to get in a situation like we saw in 2021 or other, you know, even in 2018, where a lot of supply disruption, rapid demand growth, obviously, we could use Clear Lake for a source of acetic acid and VAM production into those very tight markets, which would, you know, greatly increase the return. But again, we're not counting on that. We justified the project based on productivity, and it's there as a flywheel if we get into periods of higher demand and margins. Yeah, Matthew, I'd add, one of the other benefits in the near term for us is it adds redundancy to our U.S. Gulf Coast network. And, you know, we called out in the prepared comments that, you know, we had some unexpected outages. That would have more or less been offset had we had the new acetic acid unit up and operating. So it gives us that redundancy to ensure that, you know, some of the near-term blips that we've had in our U.S. Gulf Coast network in the past, we're able to manage those better in the future. Great. Thank you very much. Thank you. Next question is coming from John Roberts from Mizuho. Your line is now live. Thank you. Back to Sal's question on the Red Sea and the Suez, do you think the reduced Asia palm exports into Europe are coincident with the Red Sea incidents here? It seems odd that China would be improving before Lunar New Year, and I think Japan just slipped back into recession. So, we're not hearing from other companies about demand picking up in Asia. ... Yeah, so that really occurred before we started seeing the, the issues in the Red Sea, so I don't think they're related. I think it does relate to demand picking up again for consumer use in, in China, in Asia, which is reducing the amount of material that is having to move out of Asia. So I, you know, I think subsequently we may see that impact continue because of the Red Sea, but I really think it does demonstrate a strengthening of the markets in Asia. Okay. And then secondly, I'm not sure we heard earlier about the stocking cycle in Vamac rubber. Is it harder to track customer inventory in that product area? No, look, Vamac's a little unique in that, you know, it is a highly differentiated, high-value product, primarily used in auto. It has some unique attributes, and we have some unique marketing positions, so it's, it's not provided by a lot of people. I would say, it was one of the reasons actually, that we were so interested in the M&M acquisitions. It was one of the product lines that we thought would be highly complementary to Santoprene, and we in fact have found, for future projects, it's highly complementary. But I would also say, due to reliability issues, it was very in high demand. It was very constrained in 2021 and 2022. So one of the things that we focused on since the acquisition is resolving those reliability issues and increasing the production, which we were successful at doing. I would say mid-2023, when we were able to get our volumes up, we saw customers buying up everything they could because they were used to having it go short. And so as we moved to the fourth quarter, they realized supply stability was better, and we went back to what I think will be... Well, we had a low point in fourth quarter, and then I think this year, as we go forward, we'll see more normal demand patterns versus kind of the high highs we saw second, third quarter and the low we saw in fourth quarter. Thank you. Thank you. Our next question is coming from Jaideep Pandya from Onfield Research. Your line is now live. Thanks a lot. The first question is on M&M. If I go back to the acquisition you did, half this business is sort of nylons, and then half this business is China and Asia. So when we look at the current level of earnings versus what you thought of $900 million, where is the exact shortfall regionally and product-wise? Is this in Asia, or is this actually in Europe, U.S., on the contrary, is this in nylons or is this outside nylons? That's my first question. The question really is around the acetyl value chain. You know, this year, potentially you will still have some pressure because of demand versus supply upstream in acetic acid. What is your strategy with regards to VAE and RDP in the midstream or downstream? Are you going to push for gain more market share, or are you happy to sort of have a more upstream position? Thanks a lot. Yeah, so let me talk about the M&M acquisition. I mean, you're right, a significant amount is nylon, but some of it is high temperature nylon, more specialized nylons. I think where we have seen the challenges since the acquisition in nylon is really around more standard grade and volumes that were lost in 2022, due to pricing decisions that were made at that time. I think the teams have done a really good job starting to get some of that back, which is important. And that will continue to happen. And, again, we will continue to see improvement in variable margin as we flow through what now has been produced with lower cost raws and lower cost - lower fixed costs. So I don't know that it was really, you know, really why it was around nylon. You know, I wouldn't say it was specific to any one region or not. I mean, DuPont was very strong in Asia, outside of China, which has actually been a pretty stable market this year. They were stronger in the US, which for auto, has been stronger. They weren't as strong in Europe. We were, you know, some of these were stronger there. So I, I would say it's, it's not specific to any one region, but it's been more of a challenge specific to the volume loss that happened in 2022 and the steps that we have taken to start recovering that volume, in a fairly low demand environment. And your second question, around acetic acid. Maybe I'll ask Scott to take that. Yeah, very similar to what we saw last year. The current down dynamics that we're seeing in the market globally, it makes a lot more sense for us to be pushing product downstream, just given where some of the pricing and margin is on the upstream. And VAE has been a heavy lift, you know, for us from an earnings standpoint, along with our Redispersible Powders, as well as the Acetate Tow businesses we talked about. And you know, the current dynamics, it just makes a lot of sense for us to continue to maximize production as far downstream as we can. Kevin, we'll make the next question our last one. Thank you. Certainly. Our final question today is coming from Patrick Cunningham from Citi. Your line is now live. Nicole. Hi, good morning. Maybe just a clarification, you know, on the $50 million turnaround impacts, are the large majority isolated in the first quarter? And do you have any other planned turnarounds to be aware of in 2024 or early 2025? Thanks, Patrick. So the $50 million is in the first quarter. You know, we're up about $50 million from last year, so through the remainder of the year, there's probably another $50 million spread across the remainder of the three quarters. But that's consistent with last year. So incremental to 2023, it's $50 million, and I would think of it all occurring in the first quarter. Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to management for any further closing comments. Thanks, everyone. We'd like to thank everyone for joining. As always, we're around after the call if you have any follow-up questions at all. Kevin, please go ahead and close out the call. Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.