Financial Performance - Fourth quarter 2024 net sales were $821 million, a decrease of 2% compared to the prior year, driven by lower sales volumes across all business segments [5]. - The net loss for the fourth quarter was $118 million, an improvement of $147 million year-over-year, primarily due to a lower provision for income taxes [6]. - Adjusted EBITDA for the fourth quarter was $26 million, which was $6 million higher than the previous year despite a $10 million unfavorable net timing variance [6]. - Full-year 2024 net sales totaled $3.5 billion, reflecting a 4% decrease compared to 2023, with lower sales volumes contributing to a 6% decline [7]. - The full-year net loss was $349 million, which was $352 million better than the prior year, mainly due to a significant goodwill impairment charge recorded in 2023 [7]. - Gross profit for Q4 2024 was $56.0 million, significantly up from $20.3 million in Q4 2023, reflecting a gross margin improvement [34]. - Net loss for the year ended December 31, 2024, was $348.5 million, compared to a net loss of $701.3 million for the year ended December 31, 2023, indicating a 50.3% reduction in losses [34]. - Adjusted EBITDA for the year ended December 31, 2024, was $203.7 million, up from $154.3 million in 2023, representing a 32% increase [34]. - Adjusted EPS for the year ended December 31, 2024, was $(7.71), compared to $(6.92) for the year ended December 31, 2023 [34]. Cash Flow and Liquidity - Free Cash Flow for the fourth quarter was $64 million, marking a sequential and year-over-year improvement of $67 million [4]. - Free Cash Flow for the year ended December 31, 2024, was $63.9 million, compared to $(3.1) million in 2023 [40]. - Cash provided by operating activities for the year ended December 31, 2024, was $148.7 million, an increase from $(14.2) million in 2023 [40]. - Cash and cash equivalents at the end of Q4 2024 were $209.8 million, down from $259.1 million at the end of Q4 2023 [27]. - The company emphasizes that Free Cash Flow is a non-GAAP measure and may differ from other companies' definitions [38]. Future Outlook - For the first quarter of 2025, the company expects a net loss between $55 million and $40 million and Adjusted EBITDA of $65 million to $80 million, including approximately $26 million from the polycarbonate technology license agreement [11]. - Trinseo anticipates seasonally higher volumes in the first quarter but expects year-over-year volume declines due to ongoing weakness in certain end markets [10]. - Adjusted EBITDA for the three months ended March 31, 2025, is projected to be between $60 million and $80 million [36]. - Net Loss from continuing operations is estimated to be between $(60) million and $(40) million for the same period [36]. - Adjusted EPS is expected to range from $(1.68) to $(1.12) for the first quarter of 2025 [36]. Operational Changes - The company agreed to sell its polycarbonate manufacturing assets in Stade, Germany, and license polycarbonate technology to Deepak Chem Tech Limited for $52 million [4]. - The company has executed numerous initiatives to exit loss-generating businesses and improve liquidity and debt maturity profile [4]. Shareholder Information - The company’s weighted average shares outstanding for Q4 2024 were 35.4 million, slightly up from 35.2 million in Q4 2023 [34]. - The weighted average shares for diluted EPS calculation is 35.7 million [36]. - Future share transactions or events that could impact EPS calculations are not included in the forecast [41]. - The company does not forecast reconciling items to Adjusted EBITDA and Adjusted Net Income due to their nature [41].

Core Viewpoint - Trinseo PLC's shares increased by 37% following the announcement of a Transaction Support Agreement aimed at restructuring its debt and extending maturities, which will support its strategic initiatives in specialty materials and sustainable solutions [1] Debt Restructuring Details - The Transaction Support Agreement involves creditors supporting refinancing transactions to enhance liquidity and extend the nearest debt maturity to 2028 [2] - Trinseo plans to redeem and refinance $115 million of 2025 Senior Notes with new $115 million 2028 Refinance Term Loans, alongside establishing a new $300 million revolving credit facility maturing in February 2028 [3] Financial Flexibility and Cost Savings - The company will exchange at least $330 million of 2029 Senior Notes for new 2029 Second Lien Senior Secured Notes at a discount, capturing at least $49 million in discounts from creditors [4] - Trinseo anticipates annual savings of $30 million from business consolidation, with $25 million expected in 2025 and full benefits realized by 2026 [6] Structural Changes - Starting October 1, 2024, Trinseo will consolidate its Engineered Materials, Plastics Solutions, and Polystyrene businesses, leading to workforce reductions [5] - The company will discontinue virgin polycarbonate production at its Stade, Germany facility by January 2025, improving yearly run rate profitability by $15-20 million [6] One-Time Costs - The restructuring will incur one-time costs between $23-28 million, primarily for severance packages and asset termination fees related to the Stade facility [7] Financial Position - As of September 30, 2024, Trinseo had $167 million in cash and $177 million in additional liquidity, with long-term debt amounting to $2.19 billion [8] Stock Performance - Over the past year, Trinseo's shares have decreased by 5.6%, slightly outperforming the industry decline of 5.7% [9]

TRINSEO. Third Quarter 2024 Financial Results & Fourth Quarter Outlook November 6, 2024 1 Trademark of Trinseo PLC or its affiliates Introductions & Disclosure Rules Introductions • Frank Bozich, President & CEO • David Stasse, Executive Vice President & CFO • Bee van Kessel, Senior Vice President, Corporate Finance & Investor Relations Disclosure Rules This presentation may contain forward-looking statements including, without limitation, statements concerning plans, objectives, goals, projections, forecas ...

Financial Data and Key Metrics Changes - The third quarter adjusted EBITDA was $66 million, which is $25 million higher than the prior year and similar to the second quarter [20] - Cash provided by operations during the quarter was $9 million, resulting in free cash flow of negative $3 million, with an expected positive free cash flow in Q4 [21][22] - The company ended the third quarter with $165 million in cash and $342 million in total liquidity [22] Business Line Data and Key Metrics Changes - Volumes decreased by 8% year-over-year, primarily due to efforts to eliminate uneconomic sales in Asia and Europe [13] - Excluding polystyrene, volumes were flat compared to the prior year, with a 36% increase in compounds for consumer electronics applications and a 7% increase in case and battery applications in latex binders [14] - Sales of recycled content products increased by 40% year-over-year, representing 6% of total company margin in Q3 [15] Market Data and Key Metrics Changes - Demand remained weak in end markets such as building and construction and consumer durables, but profitability improved due to restructuring actions [11] - The company anticipates seasonally slower market demand in Q4, with expected adjusted EBITDA of $40 million to $50 million [23][24] Company Strategy and Development Direction - The company announced additional restructuring initiatives to improve its footprint and cost structure, aiming for cost savings of approximately $25 million in 2025 and $30 million by the end of 2026 [18] - The decision to exit virgin polycarbonate production is expected to increase annual profitability by $15 million to $20 million [19] - The company remains committed to developing polycarbonate dissolution technology to replace external purchases with recycled polycarbonate [19] Management's Comments on Operating Environment and Future Outlook - Management expects a more challenging Q4 due to year-end seasonality and macroeconomic uncertainty, but anticipates stronger liquidity position by year-end [25] - Customers are generally optimistic about Q1, expecting modest improvement in demand, particularly in building and construction due to easing interest rates [40][42] Other Important Information - The company experienced unplanned outages at two production facilities, negatively impacting adjusted EBITDA [12] - The restructuring costs for 2024 are expected to be around $45 million, with a similar expectation for 2025 [36] Q&A Session Summary Question: Update on the AmSty sales process and unplanned outages - Management confirmed that the unplanned outages are resolved and full contribution from AmSty is expected in Q4, with a transaction expected in the first half of next year [27] Question: Financing and revolver extension - The plan is to use cash on hand or a refinancing transaction to handle the $115 million stub notes due in September next year [28] Question: Q4 guidance and demand expectations - Management explained that the expected decline in Q4 adjusted EBITDA is due to fixed cost absorption and lighter demand from seasonality [32][34] Question: 2025 free cash flow outlook - Restructuring costs are expected to remain similar in 2025, with cash interest potentially lower due to an easing cycle [38] Question: Customer demand outlook for next year - Customers anticipate a stronger Q1, with pent-up demand expected in building and construction due to easing interest rates [40][42]

Financial Performance - Trinseo reported a net loss of $87.3 million for Q3 2024, compared to a net loss of $38.4 million in Q3 2023, and a year-to-date net loss of $230.6 million versus $436.3 million in the same period last year[106][111]. - Adjusted EBITDA for Q3 2024 was $66.1 million, showing improvement across all segments except Americas Styrenics, driven by restructuring initiatives and improved product mix[106]. - Net sales for Q3 2024 decreased by 1% year-over-year to $867.7 million, primarily due to an 8% reduction in volumes from low-margin businesses, partially offset by a 7% increase in pricing[112]. - Adjusted EBITDA for the three months ended September 30, 2024, was $4.0 million, a decrease of 79% compared to $19.0 million for the same period in 2023[151]. - For the nine months ended September 30, 2024, Adjusted EBITDA was $25.8 million, down 47% from $49.1 million in the prior year[151]. - The decrease in Adjusted EBITDA was primarily due to an unplanned outage at the styrene production facility and lower styrene margins[152]. Cost and Expenses - Cost of sales decreased by 7% in Q3 2024, attributed to lower sales volumes and reduced utility costs, despite a 6% increase in raw material costs[113]. - Gross profit increased by $49.3 million in Q3 2024, mainly due to higher pricing across all segments and prior year impacts from natural gas hedges[114]. - Selling, general and administrative expenses rose by $30.4 million, or 46%, primarily due to increased restructuring costs related to the 2024 Restructuring Plan[115]. - Interest expense increased by $25.7 million, or 55%, due to rising market interest rates on variable rate debt and the execution of a payment-in-kind interest election[118][127]. Restructuring and Future Plans - The 2024 Restructuring Plan is expected to deliver annualized profitability improvements of approximately $45.0 million to $50.0 million starting in 2026[107]. - The company is exploring the divestiture of its interest in Americas Styrenics, with a definitive agreement expected in the first half of 2025[109]. - The company anticipates that profitability improvement initiatives will allow it to maintain adequate liquidity and deliver improved results in the future[131]. Cash Flow and Liquidity - Net cash used in operating activities for the nine months ended September 30, 2024, was $99.3 million, compared to a cash inflow of $131.2 million in the same period of 2023[159]. - Free Cash Flow for the nine months ended September 30, 2024, was $(141.4) million, a decline from $82.1 million in the prior year[165]. - The company had liquidity of $340.3 million as of September 30, 2024, consisting of $163.1 million in cash and cash equivalents and $177.2 million available for borrowing[168]. - The company reported a net cash change of $(93.5) million for the nine months ended September 30, 2024, compared to a positive change of $66.9 million in the prior year[158]. Debt and Financing - As of September 30, 2024, total debt amounted to $2,438.0 million, with interest expenses of $202.5 million[169]. - The 2028 Refinance Term Loans had an original principal of $1,077.3 million, maturing in May 2028, with a stated interest rate of SOFR plus 8.50%[171]. - The first lien net leverage ratio was 6.46x as of September 30, 2024, exceeding the required maximum of 3.50x[171]. - The company executed a PIK Interest Election on the 2028 Refinance Term Loans, deferring $10.5 million of interest margin payable, capitalizing $13.0 million to principal payments due at maturity[171]. - The company is in compliance with all covenants and default provisions under its debt agreements as of September 30, 2024[173]. Segment Performance - Adjusted EBITDA for the Engineered Materials segment increased by 1,012% to $54.5 million for the nine months ended September 30, 2024, driven by higher sales volumes and improved margins[134]. - Net sales for the Latex Binders segment increased by 8% to $241.9 million for the three months ended September 30, 2024, primarily due to higher prices from raw material cost pass-through[139]. - Adjusted EBITDA for the Plastics Solutions segment increased by 64% to $27.7 million for the three months ended September 30, 2024, attributed to higher margins and lower fixed costs[144]. - Net sales for the Polystyrene segment decreased by 28% to $150.6 million for the three months ended September 30, 2024, primarily due to a 35% decrease in sales volumes[147]. Dividends - The company declared dividends of $0.01 per ordinary share, totaling $0.3 million, accrued as of September 30, 2024[173].

Financial Performance - Trinseo reported a quarterly loss of $1.62 per share, which was worse than the Zacks Consensus Estimate of a loss of $1.39, and compared to a loss of $1.03 per share a year ago, indicating a significant decline in performance [1] - The company posted revenues of $867.7 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 1.47%, but down from $879 million in the same quarter last year [2] - Over the last four quarters, Trinseo has surpassed consensus EPS estimates only once, and has topped consensus revenue estimates two times [2] Stock Performance and Outlook - Trinseo shares have declined approximately 49.1% since the beginning of the year, contrasting sharply with the S&P 500's gain of 21.2% [3] - The current consensus EPS estimate for the upcoming quarter is -$2.56 on revenues of $822.24 million, and for the current fiscal year, it is -$6.73 on revenues of $3.55 billion [7] Industry Context - The Rubber - Plastics industry, to which Trinseo belongs, is currently ranked in the top 40% of over 250 Zacks industries, suggesting a relatively strong position within the market [8]

Financial Performance - Net sales for Q3 2024 were $868 million, a 1% decrease compared to the prior year, driven by an 8% decrease in sales volumes offset by a 7% increase in prices due to higher raw material costs[3]. - The net loss for Q3 2024 was $87 million, worsening by $49 million from the prior year, primarily due to increased interest, tax, and restructuring expenses[3]. - Adjusted EBITDA for Q3 2024 was $66 million, which is $25 million higher than the previous year, reflecting improved results across most business segments[3]. - Net sales for the three months ended September 30, 2024, were $867.7 million, a decrease of 1.5% from $879.0 million in the same period of 2023[16]. - Gross profit for the three months ended September 30, 2024, was $80.6 million, significantly up from $31.3 million in the prior year, reflecting a gross margin improvement[16]. - Net loss for the nine months ended September 30, 2024, was $230.6 million, compared to a net loss of $436.3 million for the same period in 2023[16]. - Total net sales for the nine months ended September 30, 2024, were $2,691.7 million, down from $2,837.9 million in the prior year[19]. - Adjusted Net Loss for September 2024 was $(57.5) million, compared to $(36.3) million in September 2023, marking a 58% increase in adjusted losses[21]. Cash Flow and Capital Expenditures - Free Cash Flow for Q3 2024 was negative $3 million, showing a sequential improvement of $53 million, aided by a $16 million decrease in trade working capital[1]. - Cash provided by operating activities for the nine months ended September 30, 2024, was $(99.3) million, a decline from $131.2 million in the same period of 2023[18]. - Free Cash Flow for the three months ended September 2024 was $(3.4) million, a decrease from $15.8 million in the same period of 2023[25]. - Capital expenditures for the three months ended September 2024 were $(12.2) million, slightly down from $(13.5) million in the same period of 2023[25]. Segment Performance - Engineered Materials segment reported net sales of $207 million, a 12% increase year-over-year, driven by higher sales volumes and prices[4]. - Latex Binders segment net sales were $242 million, an 8% increase, with a 12% impact from higher prices offsetting a 4% decrease in volumes[4]. - Polystyrene segment net sales decreased by 28% to $151 million, primarily due to a 35% drop in sales volume[4]. - Americas Styrenics Adjusted EBITDA was $4 million, down $15 million from the prior year due to unplanned outages and lower styrene margins[4]. Future Projections - The company expects a net loss of between $81 million and $71 million for Q4 2024, with Adjusted EBITDA projected to be between $40 million and $50 million[5]. - Forecasted Adjusted EBITDA for the three months ending December 31, 2024, is projected to be between $40 million and $50 million[23]. Restructuring and Cost Savings - Restructuring initiatives are anticipated to yield cost savings of $25 million in 2025 and full run rate savings of $30 million by the end of 2026[1]. Balance Sheet and Liabilities - Total assets decreased to $2,882.8 million as of September 30, 2024, down from $3,029.2 million at the end of 2023[17]. - Current liabilities increased to $814.2 million as of September 30, 2024, compared to $672.6 million at the end of 2023[17]. - The company experienced a significant increase in inventories, rising to $434.8 million as of September 30, 2024, from $404.7 million at the end of 2023[17]. Interest and Expenses - Interest expense for the three months ended September 30, 2024, was $72.3 million, compared to $46.6 million in the same period of 2023, indicating increased borrowing costs[16]. - Interest expense, net for September 2024 increased to $72.3 million from $46.6 million in September 2023, reflecting a 55% rise[21]. - Depreciation and amortization for September 2024 was $48.3 million, compared to $38.2 million in September 2023, reflecting a 26% increase[21].

Trinseo (TSE) shares soared 15.8% in the last trading session to close at $6.60. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 32.9% gain over the past four weeks. Shares of Trinseo gained since it announced significant restructuring initiatives that will position the company for long-term growth. The company is consolidating its Engineered Materials, Plastics Solutions and Polystyrene businesses beginning Oct. 1, 2024. This mo ...

Baloncici/iStock via Getty Images Executive Summary Trinseo (NYSE:TSE) is a global plastic products' manufacturer spun out of Dow Chemical Company 15 years ago. The company's focus has gone from commodity feedstock to value added engineered materials and latex binders to various end users, like housing, automotive, medical, and consumer electronics companies. The current business environment has caused the company to lose sales and experience compressed margins. However, the company has recently seen an imp ...

Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA of $67 million for Q2 2024, which was in line with previous guidance and included $10 million of unfavorable net timing from falling styrene prices [11] - Free cash flow remained negative at $56 million, with cash used in operations amounting to $42 million [12] - The company ended the quarter with $108 million in cash and $352 million in total liquidity [12] Business Line Data and Key Metrics Changes - The engineered materials segment experienced its highest sales volumes and adjusted EBITDA since Q2 2022, driven by moderating input costs and steady demand [6] - Despite a 5% decline in overall volumes, mix improvement led to higher year-over-year adjusted EBITDA, particularly in targeted growth areas such as case and battery applications, latex binders, and automotive compounds [11] Market Data and Key Metrics Changes - The MMA market is currently tight across all regions, with improved volumes in architectural coatings contributing to this tightening effect [28] - European volumes in PMMA have shown a strong recovery compared to last year, indicating geographical variations in market performance [21] Company Strategy and Development Direction - The company is committed to sustainability, having made significant progress towards its 2030 sustainability goals, including advancements in recycling technologies [7][10] - The planned sale of the Americas Styrenics joint venture is progressing, with a joint sales process expected to begin this quarter [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining higher profitability levels despite a challenging macroeconomic environment and weak end market demand [14] - The company anticipates Q3 adjusted EBITDA to be similar to Q2, with expectations for free cash flow to turn positive in the second half of the year [13] Other Important Information - The company has entered into a new accounts receivable securitization facility, extending the maturity date from 2025 to January 2028, emphasizing liquidity preservation as a top priority [12] - The PMMA depolymerization facility in Italy is expected to utilize a novel recycling process, although specific EBITDA contributions and timelines are not yet available [30] Q&A Session Summary Question: Free cash flow expectations for the balance of the year - Management expects Q3 free cash flow to be neutral and Q4 to be positive, but full-year free cash flow will remain negative due to high styrene prices earlier in the year [16] Question: Restructuring spending and cost savings - Management confirmed that the $100 million cost savings from restructuring and natural gas hedges are still expected for 2024 [19] Question: End market performance in engineered materials - Management noted steady demand in automotive and strong performance in building and construction applications, particularly in Europe [21] Question: Normal earnings power of the company - Management indicated that predicting normal earnings power is challenging due to geopolitical and market uncertainties, but improvements are expected from ongoing actions [26] Question: Timeline for PMMA facility contributions - Management stated that the PMMA facility is a demonstration project, and specific EBITDA contributions or timelines are not currently available [30] Question: Cash interest and liquidity preservation - Management explained the decision to capitalize interest payments to preserve liquidity in the current downturn, with a focus on maintaining financial flexibility [35] Question: Sale of Americas Styrenics joint venture - Management expressed confidence that the joint sales process will minimize previous concerns from potential buyers about entering a joint venture [36]