Trinseo reports 41 percent sales increase for first quarter 2022

Berwyn, PA – Trinseo reported its first quarter 2022 financial results. Net sales in the first quarter increased 41% versus prior year. Higher prices resulted in a 26% increase mainly due to the pass through of higher raw material costs, such as styrene, along with higher energy costs. The remainder of the net sales increase was from the addition of the acquired PMMA and Aristech Surfaces businesses within the Engineered Materials segment. First quarter net income from continuing operations of $17 million was $49 million below prior year due to a pre-tax charge of $36 million related to the European Commission request for information and additional depreciation and amortization from our recent acquisitions. First quarter Adjusted EBITDA of $178 million was $6 million lower than prior year as the additional earnings from the acquired businesses in Engineered Materials and a positive year-over-year net timing variance of $26 million from rising raw material prices was more than offset by lower styrene margins along with lower automotive volumes in Base Plastics.

Commenting on the Company’s first quarter performance, Frank Bozich, President and Chief Executive Officer of Trinseo, said, “We had a solid start to the year with first quarter earnings similar to last year despite operating in a more challenging business environment as geopolitical factors in Europe pressure supply chains, customer production and energy costs in the region. I’m very proud of our employees who have enacted a number of measures to combat this difficult landscape including ensuring raw material supply and adapting our commercial model to more accurately capture input cost volatility. By leveraging our workforce and our global footprint, we continue to provide our customers with quality products and unique solutions.”

Engineered Materials net sales of $295 million for the quarter increased $229 million versus prior year and Adjusted EBITDA of $35 million increased $27 million versus prior year. These increases were primarily attributable to the addition of the acquired PMMA and Aristech Surfaces businesses. Excluding the acquired businesses, net sales were flat to prior year and Adjusted EBITDA decreased from lower volumes to consumer electronics applications. Increased frequency in pricing adjustments resulted in passing through energy costs in a more timely manner, but unprecedented volatility in the European energy market still resulted in a $4 million headwind during the quarter. The integration and synergy realization of the newly acquired businesses are both on track.
Latex Binders net sales of $307 million for the quarter increased 22% versus prior year due primarily to the passthrough of higher raw materials such as styrene and butadiene. Sales volume was lower than prior year with the majority of the impact from lower sales to paper and carpet applications. Adjusted EBITDA of $30 million was $13 million higher than prior year as pricing actions and a $20 million positive net timing variance more than offset higher freight and utility costs as well as lower sales volumes.
Base Plastics net sales of $396 million for the quarter were 21% higher than prior year. Higher price accounted for a 31% increase in net sales due to the passthrough of higher raw materials and pricing actions. Adjusted EBITDA of $69 million was $4 million favorable versus prior year as a $7 million positive net timing variance and stronger margins were partially offset by lower volume in automotive applications as supply chain constraints continue to cause production issues for customers.
Polystyrene net sales of $318 million for the quarter were 19% above prior year mainly from the passthrough of higher styrene prices. Adjusted EBITDA of $45 million was $2 million lower than prior year as weaker market conditions in Asia, including impacts from COVID-19 lockdowns, were offset by stronger demand and pricing initiatives in Europe.
Feedstocks Adjusted EBITDA of $4 million was $42 million lower than prior year due to lower styrene margins including impacts from higher utility costs.
Americas Styrenics Adjusted EBITDA of $22 million for the quarter was $1 million below prior year as higher polystyrene margin mostly offset the impacts of the styrene production turnaround.
2022 Full-Year Outlook

Full-year 2022 net income of $174 million to $211 million and Adjusted EBITDA of $625 million to $675 million
Full-year 2022 cash from operations of approximately $355 million and Free Cash Flow of approximately $175 million
Commenting on the outlook for 2022, Bozich said, “I’m pleased with our start to the year with another quarter of solid results as we continue to successfully navigate uncertain and challenging conditions. Our updated outlook reflects a continuation of these conditions through the remainder of the year as well as the current styrene production outages at our Terneuzen site and AmSty’s St. James site, which we anticipate will impact results by approximately $35 million. We remain focused on our transformation to a specialty material and sustainable solutions provider, including progressing on the sale process of the Styrenics businesses. The recently announced changes to our organizational structure including the creation of the leadership positions of Chief Sustainability Officer, Chief Commercial Officer and Chief Technology Officer, will help us exploit the greatly increased growth opportunities that we now have as a result of our transformation while achieving our 2030 Sustainability Goals.”

Trinseo will host a conference call to discuss its first quarter 2022 financial results on Thursday, May 5, 2022 at 10 a.m. Eastern Time.

Commenting on results will be Frank Bozich, President and Chief Executive Officer, David Stasse, Executive Vice President and Chief Financial Officer, and Andy Myers, Director of Investor Relations.

For those interested in asking questions during the Q&A session, please register using the following link:

Conference Call Registration
For those interested in listening only, please register for the webcast using the following link:

Webcast Registration
After registering for the conference call, you will receive a confirmation email with a meeting invitation and information for entry. Registration is open through the live call, but it is advised that you register in advance to ensure you are connected for the full call.

Trinseo has posted its first quarter 2022 financial results on the Company’s Investor Relations website. The presentation slides will also be made available in the webcast player prior to the conference call. The Company will also furnish copies of the financial results press release and presentation slides to investors by means of a Form 8-K filing with the U.S. Securities and Exchange Commission.

A replay of the conference call and transcript will be archived on the Company’s Investor Relations website shortly following the conference call. The replay will be available until May 5, 2023.