Trinseo Q3 Report 2023

Trinseo (NYSE: TSE), a specialty material solutions provider, today reported its third quarter 2023 financial results. Net sales in the third quarter decreased 25% versus prior year. Lower price from the pass-through of lower raw material costs led to a 20% decrease. Lower sales volume across all reporting segments except Feedstocks, caused by underlying persistent market demand weakness, led to an 8% decrease.

Third quarter net loss from continuing operations of $38 million was $80 million above prior year and included a charge of $14 million related to the Company’s PMMA sheet optimization and Corporate restructuring initiatives. Adjusted EBITDA of $41 million was $78 million above prior year. The higher year-over-year profitability was largely in the Feedstocks and Plastics Solutions segments from higher styrene and polycarbonate margins. Third quarter results included unfavorable impacts of $15 million from an unplanned styrene outage as well as $4 million from net timing and $11 million from natural gas hedging.

• Engineered Materials net sales of $186 million for the quarter decreased 23% versus prior year including a 15% impact from lower price due to raw material pass-through as well as a 10% impact from lower sales volume primarily in PMMA sheet for wellness applications and engineered compounds for consumer electronics applications. Adjusted EBITDA of $5 million was $3 million below prior year including an unfavorable net timing variance of $5 million. Lower volume as described above was more than offset by higher margin from lower raw material costs.
• Latex Binders net sales of $222 million for the quarter decreased 35% versus prior year including a 21% impact from lower price from the pass-through of lower raw material costs and a 15% impact from lower volumes across all regions and applications. Adjusted EBITDA of $23 million was $8 million below prior year including a $9 million unfavorable variance from net timing. Lower sales volume was offset by pricing initiatives and lower fixed costs. Volume for higher-margin CASE applications declined by 2% in the third quarter compared to prior year, showing better demand resilience in comparison to other applications.
• Plastics Solutions net sales of $246 million for the quarter were 16% below prior year from lower price due to the pass-through of lower raw material costs. Adjusted EBITDA of $22 million was $37 million above prior year primarily from higher polycarbonate margin including impacts from the previously announced restructuring actions in Stade, Germany.
• Polystyrene net sales of $175 million for the quarter were 29% below prior year. Lower price, primarily from the pass-through of lower styrene costs, led to a 25% decrease and lower volume, from weaker demand in appliance and building & construction applications, led to a 7% decrease. Adjusted EBITDA of $9 million was $10 million below prior year from lower volume and margin due to weaker market conditions.
• Feedstocks net sales of $50 million for the quarter were 6% below prior year from a 19% impact from lower price which was partially offset by higher volume and favorable currency. Adjusted EBITDA of negative $19 million was $59 million above prior year from higher styrene margin, including a favorable net timing variance of $27 million.
• Americas Styrenics Adjusted EBITDA of $19 million for the quarter was $4 million below prior year as lower polystyrene margins were partially offset by higher styrene margins.