Trinseo reports positive fourth quarter and full year 2021

Berwyn, PA – Trinseo reported its fourth quarter and full-year 2021 financial results. Net sales in the fourth quarter increased 69% versus prior year. Higher prices resulted in a 47% increase mainly due to the pass through of higher raw material costs, such as styrene and butadiene, along with commercial excellence actions. The remainder of the increase was from the addition of the acquired PMMA and Aristech Surfaces businesses within the Engineered Materials segment. Fourth quarter net income from continuing operations of $1 million was $65 million below prior year due to additional depreciation and amortization from our recent acquisitions as well as transaction-related costs. Fourth quarter Adjusted EBITDA of $133 million was $3 million above prior year as the additional earnings from the acquired businesses as well as stronger margins aided by tight supply conditions and pricing actions were mostly offset by a sharp increase in natural gas prices in Europe, a styrene production outage in Terneuzen from an upstream force majeure, and lower volumes from supply chain disruptions including semi-conductor shortages.

Net sales in the full year increased 76% versus prior year primarily due to pricing as a result of the passthrough of higher raw material costs and commercial excellence actions, as well as the additional sales from the acquired businesses within the Engineered Materials segment. Full-year net income from continuing operations of $280 million was $217 million above prior year and full-year Adjusted EBITDA of $729 million was $444 million above prior year. Higher earnings were attributed to stronger margins from tight supply, particularly in ABS and polystyrene products, additional earnings from acquisitions and higher volumes versus the Covid-19 headwinds in 2020.

Cash provided by operating activities for the fourth quarter was $214 million and capital expenditures were $55 million, resulting in Free Cash Flow of $159 million including a working capital source of $116 million. Cash provided by operating activities for the full year was $453 million and capital expenditures were $124 million, resulting in Free Cash Flow of $329 million including a working capital use of $147 million. During the fourth quarter and full year, the Company repurchased 970 thousand shares for $50 million as part of its $200 million share repurchase program authorized in December 2021. For a reconciliation of Free Cash Flow to cash provided by operating activities, see Note 3 below.

Commenting on the Company’s fourth quarter and full-year performance, Frank Bozich, President and Chief Executive Officer of Trinseo, said, “We closed out 2021 with healthy earnings and strong cash generation despite significant external headwinds including the Terneuzen production outage and higher energy costs. 2021 was a significant year for Trinseo as we took meaningful steps toward transforming into a specialty materials and sustainable solutions provider via the acquisitions of the PMMA business, Aristech Surfaces and Heathland B.V. along with the divestiture of the Synthetic Rubber business. We accomplished this while delivering record earnings, generating substantial cash and maintaining a very healthy balance sheet with a foundational focus on EH&S. Our achievements over the past year are a testament to the resourcefulness and dedication of our valued employees and I look forward to accomplishing much more together.”