Trinseo Full-Year Report 2023
Full-Year 2023 Summary
- Cash from operations of $149 million and capital expenditures of $70 million resulted in Free Cash Flow* of $79 million and a $47 million year-over-year increase to $259 million cash at year end; approximately $212 million of additional liquidity is available under two, undrawn committed financing facilities
- Net loss from continuing operations of $701 million included a pre-tax, non-cash goodwill impairment charge of $349 million related to the Engineered Materials reporting unit, $56 million related to various restructuring initiatives and non-cash, after-tax charges of approximately $160 million related to increases in valuation allowances on deferred tax assets in certain subsidiaries
- Adjusted EBITDA* of $154 million included unfavorable impacts of $51 million from natural gas hedges, $20 million from net timing and $13 million from fixed cost under-absorption due to reducing inventory levels
- Announced asset closures and other restructuring actions during the year which, when combined with lower natural gas hedge losses, are expected to contribute sequential profitability improvement of approximately $100 million in 2024
Fourth Quarter Results and Commentary by Business Segment
- Engineered Materials net sales of $190 million for the quarter decreased 7% versus prior year including a 16% impact from lower price due to raw material pass-through, partially offset by a 6% impact from higher sales volume. Adjusted EBITDA of $0 million was $5 million above prior year including a favorable net timing variance of $8 million. Excluding the net timing variance, lower margin was partially offset by higher sales volume and lower fixed costs.
- Latex Binders net sales of $215 million for the quarter decreased 16% versus prior year including an 8% impact from lower price from the pass-through of lower raw material costs and an 11% impact from lower volumes in Europe and North America and across all applications. Adjusted EBITDA of $19 million was $1 million below prior year as lower volume was partially offset by pricing actions. Volume for higher-margin CASE applications declined by 2% in the fourth quarter compared to prior year, showing better demand resilience in comparison to other applications.
- Plastics Solutions net sales of $231 million for the quarter were 15% below prior year including a 12% impact from lower price due to the pass-through of lower raw material costs and a 6% impact from lower sales volume from the closure of one
polycarbonate line in Stade, Germany. Adjusted EBITDA of $16 million was $25 million above prior year primarily from higher polycarbonate margin including impacts from restructuring actions in Stade, Germany. - Polystyrene net sales of $166 million for the quarter were 23% below prior year. Lower price, primarily from the pass-through of lower styrene costs, led to a 5% decrease, and lower volume, from weaker demand in appliance and building & construction applications, led to a 21% decrease. Adjusted EBITDA of $2 million was $10 million below prior year from lower volume and margin due to weaker market conditions and pronounced year-end seasonality.
- Feedstocks net sales of $35 million for the quarter were 25% above prior year as an 11% negative impact from lower price was more than offset by a 29% favorable impact from higher volume and favorable currency. Adjusted EBITDA of negative $4 million was $12 million above prior year from the benefits of the closures of the Boehlen, Germany styrene plant in December 2022 and Terneuzen, the Netherlands styrene plant in November 2023. Due to these closures, starting in the first quarter of 2024, the Company will no longer have a Feedstocks reporting segment.
