Trinseo reports Q1 2022 financial results and updates full-year outlook

Trinseo, a global materials solutions provider and manufacturer of plastics and latex binders based in Berwyn, Pennsylvania, has reported its first-quarter 2022 financial results.   

According to the report the company's net sales in the first quarter increased 41 percent compared with Q1 2021. Higher prices resulted in a 26 percent increase mainly due to the pass through of higher raw material costs, like styrene, and 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.   

Trinseo's first quarter net income from continuing operations of $17 million was $49 million below the prior year due to a pretax charge of $36 million related to the European Commission's request for information and additional depreciation and amortization from our recent acquisitions.   

First-quarter adjusted earnings before interest, taxation, depreciation and amortization (EBITDA) of $178 million was $6 million lower than the 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.  

“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,” says Frank Bozich, president and CEO of Trinseo. “I’m very proud of our employees who have enacted several 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 Material's net sales of $295 million for the quarter increased by $229 million versus Q1 2021 and adjusted EBITDA of $35 million increased by $27 million compared with Q1 2021. These increases were primarily attributable to the addition of the acquired PMMA and Aristech Surfaces businesses. Excluding the acquired businesses, net sales were flat compared with 2021, and adjusted EBITDA decreased from lower volumes to consumer electronics applications. Increased frequency in pricing adjustments resulted in passing through energy costs in a timelier 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 percent compared with 2021 due primarily to the pass through of higher raw materials such as styrene and butadiene. Sales volume was lower than 2021, with most of the impact from lower sales to paper and carpet applications. Adjusted EBITDA of $30 million was $13 million higher than 2021 as pricing actions and a $20 million positive net timing variance more than offset higher freight and utility costs and lower sales volumes.  

Base Plastics' net sales of $396 million for the quarter were 21 percent higher than in 2021. Higher prices accounted for a 31 percent increase in net sales due to the pass through of higher raw materials and pricing actions. Adjusted EBITDA of $69 million was $4 million favorable versus the 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 percent above Q1 2021 from the passthrough of higher styrene prices. Adjusted EBITDA of $45 million was $2 million lower than 2021 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 2021 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 Q1 2021 as a higher polystyrene margin mostly offset the impacts of the styrene production turnaround.  

The company is predicting a full-year 2022 net income of $174 million to $211 million and Adjusted EBITDA of $625 million to $675 million. It also forecasts cash from operations of about $355 million and free cash flow of about $175 million  

“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,” Bozich says. “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.”  

The company says it remains focused on its transformation to a specialty material and sustainable solutions provider, including progress on the sale process of the styrenics businesses.