A1256655943wRNVI

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Determining your Companys Objectives for the US
Capital Market - Managing the Tricky Stuff
Jörg Hoffmann, Head of Investor Relations and
Joachim Kaffanke, General Counsel, Seminar Weil
Gotshal Manges, 06 March 2001
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Jörg Hoffmann / Joachim Kaffanke Seminar Weil
Gotshal Manges, 06 March 2001
Celanese AG - Worldwide Presence in Key Markets
Sales 2000 5.2 bn

• 30 plants in 11 countries
• 13,200 employees
• 6 RD sites
• 72 of assets in NAFTA

• 1 or 2 global supplier in key products
• Leading technology position
• Globally active
• Rapid refocusing of business in first year

Positioned for growth
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Jörg Hoffmann / Joachim Kaffanke Seminar Weil
Gotshal Manges, 06 March 2001
Leading Global Positions in Selected Markets
Segment Acetyl Chemical Acetate Ticona
Performance (2000) Products Intermed. Products
Products Sales 2,106 m 1,085 m 756 m
923 m 409 mCore Acetic acid Acrylates Acetate
tow Polyacetal OPP filmsProducts Vinyl
acetate Oxo products Filament UHMW-PE Food
ingre- Polyvinyl Alc. Specialties Polyester die
nts Acetate esters Core Paints Superabsor- Filt
er tow Automotive PackagingMarkets Coatings bent
polymers Garments Electrical/ Foodstuffs Adhesi
ves Coatings electronics
A balanced portfolio of chemicals
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Jörg Hoffmann / Joachim Kaffanke Seminar Weil
Gotshal Manges, 06 March 2001
Celaneses Objectives for the US Capital Market

• Companys history and business pre 86 and post
  99
• Incorporated 99 as German AG in the course of
  the demerger
• 10 Hoechst shares - 1 CZ share
• 15 US shareholders in Hoechst at the time of
  demerger
• ? 50 Life science investors in Hoechst at the
  time of demerger
• Need to safeguard shareholder value by increase
  of interest (investor appetite) to limit
  flowback of stock becoming lose in the demerger
• Peer group (99 onwards) comprises a large number
  of US companies

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Jörg Hoffmann / Joachim Kaffanke Seminar Weil
Gotshal Manges, 06 March 2001
Celaneses approach to achieve the objectives

• Redistribution scheme structured and organised
  mechanics to collect lose stock and offer it to
  interested investors (public offer)
• Look, taste and smell like a US company
• Dual listing FSE / NYSE
• US GAAP for group financials
• Global name share
• Corporate Governance structures and Financial
  Communications

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Successful Parallel Listings on FSE and NYSE
Jörg Hoffmann / Joachim Kaffanke Seminar Weil
Gotshal Manges, 06 March 2001

• Share of North American investors rose from 14
  to 19 (reflects 27 of free float) since
  demerger (36)
• Analyst following 10 European, 2 US
• Increasing share of stocks traded on NYSE

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Keeping in Touch
Jörg Hoffmann / Joachim Kaffanke Seminar Weil
Gotshal Manges, 06 March 2001

• Investor information versus press release
• Quarterly reporting, additional information
  geared to analysts and portfolio managers needs
• Factbook Celanese In Depth, yearly updated
  primer on business fundamentals
• Availability of top management for one-on-ones,
  roadshows, conferences, analyst meetings
• IR presence in 2 time zones

24/7 availability, we stretch for our clientele
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Managing the tricky stuff (1) Conference Calls
Jörg Hoffmann / Joachim Kaffanke Seminar Weil
Gotshal Manges, 06 March 2001

• European analysts/investorswant information
  early in the morning, before trading begins, race
  with the press
• U.S. analysts/investorswant information early
  in the morning, before trading begins, race with
  the press

Solution Timing of quarterly release and
conference call 0830h CET Release of quarterly
report and supplemental data 0230h EST 1500h
CET Conference Call 0900h EST
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Managing the tricky stuff (2) Regulation FD
Jörg Hoffmann / Joachim Kaffanke Seminar Weil
Gotshal Manges, 06 March 2001

• SEC Rule on Selective Disclosure and Insider
  Trading (Regulation FD) in effect since October
  23rd, 2000(...) when an issuer, (...),
  discloses material nonpublic information to
  certain enumerated persons (...), it must make
  public disclosure of that information. (...) for
  an intentional selective disclosure, the issuer
  must make public disclosure simultaneously for a
  non-intentional disclosure, the issuer must make
  public disclosure promptly. (...) to effect
  broad, non-exclusionary distribution of the
  information to the public. (...)
• Applies only to securities market professionals
  and shareholders likely to trade on the
  information
• Information is material if "there is a
  substantial likelihood that a reasonable
  shareholder would consider it important" in
  making an investment decision

Issue need to treat analysts, investors and
would-be investors alike (best practice) - need
to manage disclosure in time zones
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Managing the tricky stuff (3) Reporting Currency
Jörg Hoffmann / Joachim Kaffanke Seminar Weil
Gotshal Manges, 06 March 2001

• Celanese is a predominantly U.S. company with
  most of its businesses using U.S. Dollar as
  functional currency and prices for raw materials
  and products ultimately determined in U.S Dollar
• But 244 HGB (Commercial Code) stipulates
  Reporting currency for the group is the Euro (or
  Deutsche Mark until end of 2001)
• Need for consistent communication with
  shareholders requires reporting in Euro
• otherwise shareholders in the AGM would discuss
  different figures than the published figures on
  which they have based their investment decisions

Issue Low transactional and high translational
currency risk
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Managing the tricky stuff (4) Mandatory
Earnings Pre-Release
Jörg Hoffmann / Joachim Kaffanke Seminar Weil
Gotshal Manges, 06 March 2001

• U.S. peer companies reporting 3 to 6 weeks after
  quarter close
• Capital markets require information on full year
  timing close to peer companies (valuation factor)
• German 15 Securities Trading Code stipulates the
  ad hoc information requirement for new
  potentially price sensitive facts Problem
  multi-layer decisions - Annual Financials Results
  
• Conflict Triangle 1. Corporate Governance
  Supervisory Board Role - 14 days invitation
  period to approve Annual Financials 2. Legal
  Requirement for early disclosure 15 WpHG 3.
  Capital market need for more disclosure

Issue Load earnings pre-release with
additional, material data
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Jörg Hoffmann / Joachim Kaffanke Seminar Weil
Gotshal Manges, 06 March 2001
Managing the tricky stuff (5)Risk disclosure in
Annual Financial Reporting

• US Reporting Annual Report on Form 20-F
• Risk section as from September 1, 2000 required
• Plain English
• Benchmark
• Threat of shareholder suits
• German Reporting Annual Financials as part of
  Annual Report
• Risk disclosure as part of management report
  (289 (1) Commercial Code)
• Equal treatment of shareholders ( 67 (1)
  Admission Regulation)
• Publication requirement ( 70 (1) Admission
  Regulation)