Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - Trinseo S.A. | d767932d8k.htm |
| EX-99.1 - EX-99.1 - Trinseo S.A. | d767932dex991.htm |
 ™
Trademark
Second Quarter 2014
Earnings Summary
August 7, 2014
Exhibit 99.2 |
 2
Introductions & Disclosure Rules
Disclosure Rules
The forward looking statements contained in this presentation involve risks and
uncertainties that may affect the Company's operations, markets, products,
services, prices and other factors. These risks and uncertainties include,
but are not limited to, economic, competitive, legal, governmental and technological
factors. Accordingly, there is no assurance that the Company's expectations
expressed in such forward looking statements will be realized. The Company
assumes no obligation to provide revisions to any forward looking statements
in this presentation should circumstances change. This presentation contains
financial measures that are not in accordance with generally accepted
accounting principles in the US (“GAAP”) including Adjusted EBITDA.
We believe these measures provide relevant and meaningful information to
investors and lenders about the ongoing operating results of the Company.
Such measures when referenced herein should not be viewed as an alternative to GAAP
measures of performance. We have provided a reconciliation of Adjusted EBITDA
in the Appendix section of this presentation.
Introductions
Chris Pappas, President & CEO
John Feenan, Executive Vice President & CFO
David Stasse, Vice President, Treasury & Investor Relations
|
 3
Agenda
Business Overview
Financial Review
2014 Focus
Q&A |
 4
Trinseo Business Overview
Engineered Polymers
Revenue: $266MM
Adj EBITDA: $5MM
Styrenics
Revenue: $590MM
Adj EBITDA: $27MM
Emulsion Polymers
Revenue: $486MM
Adj EBITDA: $64MM
Plastics
Revenue: $855MM
Adj EBITDA: $32MM
#3 Polystyrene Globally
Leading Player
Synthetic Rubber
Revenue: $165MM
Adj EBITDA: $37MM
Top 3 SSBR Globally
Q2’14 Revenue: $1,341MM
Q2’14 Adj EBITDA: $79MM
Latex
Revenue: $321MM
Adj EBITDA: $27MM
#1 Globally in SB Latex
Note: Division and Segment EBITDA excludes Corporate Segment Adjusted EBITDA of
$(17)MM. Totals may not sum due to rounding. End
markets
Market
position
Performance tires
Standard tires
Polymer modification
Technical rubber goods
Coated paper and packaging
board
Carpet and artificial turf
backings
Tape saturation
Cement modification
Building products
$5+ billion in annual revenue, world leader in the production of
latex, rubber and plastics
Appliances
Consumer goods
Construction/sheet
Packaging
Automotive
Consumer electronics
Automotive
Consumer electronics
Construction/sheet
Electrical and lighting
Medical devices |
 5
Key Styrene Raw Material Trends
Europe
(1)
Source:
IHS.
(1)
Styrene:
50%
W.
Europe
Spot
Avg
(FOB
W.
Europe)
and
50%
W.
Europe
Contract
Monthly
Market
(Delivered
W.
Europe);
Benzene:
50%
W.
Europe
Spot
Avg
(CIF
NW
Europe
/
Basis
ARA)
and
50%
W.
Europe
Contract
–
Monthly
Market
(FOB/CIF
W.
Europe);
Ethylene:
W.
Europe
Contract
–
Market
Pipeline
(Delivered
W.
Europe).
(2)
Styrene:
NE
Asia
Avg
Spot
Posting
(CFR
China);
Benzene:
NE
Asia
Spot
Avg
(FOB
S.
Korea);
Ethylene:
NE
Asia
Spot
Avg
(CFR
NE
Asia).
Styrene
Ethylene
Benzene
Styrene
Ethylene
Benzene
Asia
(2) |
 6
Key Butadiene Price Trends
Butadiene
Source:
IHS.
Asia:
NE
Asia
Spot
(CFR
NE
Asia)
Europe:
W.
Europe
Contract
Market
(ExW/Del
pr09
W.
Europe);
NA:
North
America
Contract
Market
(FOB
US
Gulf
Coast).
Europe
NA
Asia |
 ™
Trademark
Financial Review
John Feenan
EVP & CFO |
 F/(U) vs.
(in $millions, unless noted)
Q2'14
Q1'14
Q2'13
Q1'14
Q2'13
Volume (MMlbs)
1,327
1,344
1,311
Revenue
1,341
1,359
1,362
(1)%
(2)%
Volume
(1)%
0%
Price
(1)%
(5)%
FX
0%
3%
Adjusted EBITDA
79
88
43
Adjusted EBITDA Margin
6%
6%
3%
Adjusted Net Income
11
20
(18)
Wtd Avg Shares Outstanding (000)
38,912
37,270
37,270
Adjusted EPS ($)
0.28
0.53
(0.49)
Trinseo Quarterly Results
8
Note: Inventory revaluation EBITDA impact of $3MM, $6MM and $(26)MM for
Q2’14, Q1’14, and Q2’13, respectively. Totals may not sum due to rounding. |
 $321
$326
$345
$27
$26
$29
$0
$50
$100
$150
$200
$250
$300
$350
$400
Q2'14
Q1'14
Q2'13
Revenue
Adjusted EBITDA
9
Latex
$MM
Note:
Totals
may
not
sum
due
to
rounding.
Volume
in
millions
of
pounds.
Key Points
•
Difficult conditions in Europe
and North America graphical
paper
•
Offset by growth in carpet,
Asia paper, and
Performance Latex
•
New 25KT reactor in China
on schedule and on budget
Revenue Bridge
Volume
Price
FX
Total
YoY
(3)%
(6)%
2%
(7)%
QoQ
(1)%
(1)%
0%
(2)%
Volume
295
299
305 |
 $165
$177
$156
$37
$43
$28
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
Q2'14
Q1'14
Q2'13
Revenue
Adjusted EBITDA
10
Synthetic Rubber
$MM
Note:
Totals
may
not
sum
due
to
rounding.
Volume
in
millions
of
pounds.
Revenue Bridge
Volume
Price
FX
Total
YoY
14%
(13)%
4%
6%
QoQ
(10)%
3%
0%
(7)%
Key Points
•
Tire demand rebounding in
Europe, China, and North
America
•
Investing in additional SSBR
•
JSR capacity
•
Investing in higher margin
products
•
Ni-PBR to Nd-PBR
•
Generation 4 SSBR
•
>30% YoY SSBR growth
Volume
142
155
125 |
 $590
$594
$597
$27
$42
$21
$0
$100
$200
$300
$400
$500
$600
$700
Q2'14
Q1'14
Q2'13
Revenue
Adjusted EBITDA
11
Styrenics
$MM
Note:
Totals
may
not
sum
due
to
rounding.
Volume
in
millions
of
pounds.
Adjusted
EBITDA
includes
earnings
from
equity
affiliate
(Americas
Styrenics).
Revenue Bridge
Volume
Price
FX
Total
YoY
(1)%
(4)%
4%
(1)%
QoQ
1%
(2)%
0%
(1)%
Key Points
•
JV earnings from AmSty
$9MM lower sequentially –
turnaround related
•
Asia styrene margins
compressed end of Q2
•
Q2 was high season for
appliance market
•
Focused on controlling costs
and driving margin in
competitive environment
•
PS margins remain steady
Volume
689
686
679 |
 $266
$262
$263
$5
$(2)
$(3)
$(50)
$0
$50
$100
$150
$200
$250
$300
Q2'14
Q1'14
Q2'13
Revenue
Adjusted EBITDA
12
Engineered Polymers
$MM
Note:
Totals
may
not
sum
due
to
rounding.
Volume
in
millions
of
pounds.
Adjusted
EBITDA
includes
earnings
from
equity
affiliate
(Sumika
Styron).
Revenue Bridge
Volume
Price
FX
Total
YoY
0%
(2)%
3%
1%
QoQ
1%
1%
0%
1%
Key Points
•
Global polycarbonate
demand rebounding
•
Polycarbonate restructuring
on track
•
Volume improving in
electronics, medical,
electrical & lighting
•
Strong automotive margins
Volume
201
204
203 |
 13
Balance Sheet and Cash Flow
Liquidity –
Q2 End
(excl Cash for Debt Paydown)
Maturities –
Jul 14, 2014
A/R
Securitization
(2)
Revolver
(2)
Senior Secured
Notes
(1)
Free
Cash
Flow
=
cash
from
operating
activities
+
cash
from
investing
activities
–
change
in
restricted
cash
(2)
A/R
Securitization
facility
commitment
of
$200MM
and
Revolving
Credit
facility
commitment
of
$300MM
($293MM
available
at
Q2’14).
*$132.5
million
face
amount
of
bonds
at
103
price
plus
$5
million
accrued.
NOTE:
Totals
may
not
sum
due
to
rounding.
Summary
•
Q2 breakeven free cash flow reflects $56 million
outflow resulting from termination of Dow
Emerging Markets JV option and Bain Advisory
Agreement
•
Strong quarter-end liquidity of $675 million (excl
cash used for debt paydown)
•
$142 million cash used for debt redemption on
July 14*
$MM
Unused Borrowing
Facility
Cash & Cash
Equivalents
$MM
$MM
Free Cash Flow
(1) |
 ™
Trademark
2014 Focus
Chris Pappas
President & CEO |
 15
Key Styrene Raw Material Trends
Europe
(1)
Source:
IHS.
(1)
Styrene:
50%
W.
Europe
Spot
Avg
(FOB
W.
Europe)
and
50%
W.
Europe
Contract
Monthly
Market
(Delivered
W.
Europe);
Benzene:
50%
W.
Europe
Spot
Avg
(CIF
NW
Europe
/
Basis
ARA)
and
50%
W.
Europe
Contract
–
Monthly
Market
(FOB/CIF
W.
Europe);
Ethylene:
W.
Europe
Contract
–
Market
Pipeline
(Delivered
W.
Europe).
(2)
Styrene:
NE
Asia
Avg
Spot
Posting
(CFR
China);
Benzene:
NE
Asia
Spot
Avg
(FOB
S.
Korea);
Ethylene:
NE
Asia
Spot
Avg
(CFR
NE
Asia).
Styrene
Ethylene
Benzene
Styrene
Ethylene
Benzene
Asia
(2) |
 16
Key Butadiene Price Trends
Butadiene
Source:
IHS.
Asia:
NE
Asia
Spot
(CFR
NE
Asia)
Europe:
W.
Europe
Contract
Market
(ExW/Del
pr09
W.
Europe);
NA:
North
America
Contract
Market
(FOB
US
Gulf
Coast).
Europe
NA
Asia |
 17
Second Half Update
Short-term headwinds
Outage-driven benzene spike impacts styrene and polycarbonate
margins in Q3
ESBR turnaround and unplanned outage
Seasonality
Underlying fundamentals remain strong
Replacement tire market rebounding, SSBR growth strong
Latex margins steady
Polycarbonate demand and operating rates rising
New volumes in performance latex, carpet, electrical and lighting
compounds
Expect 2014 Adjusted EBITDA to be
comfortably ahead of 2013 |
 18
Sustainability Highlights 2013
SUSTAINABLE PRODUCTS
SUSTAINABLE PERFORMANCE
Potential weight reduction per car
through innovative plastic solutions,
which have been developed and
implemented by Trinseo in 2013
6.7kg
Reduction in energy consumption
by using a LED bulb with Trinseo
plastic lens, compared to traditional
incandescent light
75%
Reduction in fuel consumption
when using low rolling
resistance tires with SSBR
rubber from Trinseo
3%
Reduction in waste
(vs. 2011 baseline)
26%
Reduction in emissions
of volatile organic
chemicals (VOCs) (vs.
2012)
5%
Reduction in emissions
of non-VOC chemicals
(vs. 2012)
2%
Reduction in
electricity use
(vs. 2012)
2%
Percent of Trinseo manufacturing
plants with Triple Zero record: no
injuries, no significant spills, no
process safety incidents
54%
Percent of Trinseo
employees who
completed ethics and
compliance training
97%
Percent of Trinseo
plants with ISO 14001
certification
58%
Percent of Trinseo
sites with ISO 50001
certification
27%
SUSTAINABLE OPERATIONS |
 19
Trinseo Value Drivers
Profitable Growth
Structural Changes
Cyclical Upsides |
 ™
Trademark
Q&A |
 ™
Trademark
Appendix |
 22
US GAAP to Non-GAAP Reconciliation
(in $millions, unless noted)
Q1'12
Q2'12
Q3'12
Q4'12
Q1'13
Q2'13
Q3'13
Q4'13
Q1'14
Q2'14
Net Income (Loss)
30.1
1.9
(1.2)
(0.5)
(9.7)
(28.1)
4.9
10.6
17.1
(44.6)
Interest expense, net
25.7
26.6
28.6
29.1
32.3
33.7
32.9
33.1
32.8
32.6
Provision for (benefit from) income taxes
25.1
(6.1)
10.3
(11.8)
(0.1)
2.2
6.0
13.8
12.8
5.4
Depreciation and amortization
20.9
22.0
20.0
22.7
23.9
24.0
23.2
24.2
23.7
27.2
EBITDA
101.8
44.4
57.7
39.5
46.4
31.8
67.0
81.7
86.4
20.6
Loss on extinguishment of long-term debt
-
-
-
-
20.7
-
-
-
-
-
Other non-recurring items
-
-
(0.7)
-
1.1
-
-
(0.4)
-
32.5
Restructuring and other charges
7.8
0.1
(0.4)
-
-
6.5
2.6
1.8
0.5
2.1
Net (gains) / losses on dispositions of businesses and assets
-
-
-
-
-
3.2
1.0
-
-
-
Fees paid pursuent to advisory agreement
1.1
1.2
1.1
1.2
1.2
1.2
1.2
1.2
1.2
24.2
Asset impairment charges or write-offs
-
-
-
-
-
0.7
-
9.2
-
-
Adjusted EBITDA
110.7
45.7
57.7
40.7
69.4
43.4
71.8
93.5
88.1
79.4
Interest expense, net
25.7
26.6
28.6
29.1
32.3
33.7
32.9
33.1
32.8
32.6
Provision for (benefit from) income taxes - Adjusted
27.1
(4.0)
10.5
1.9
4.9
3.9
5.2
14.4
12.0
10.1
Depreciation and amortization - Adjusted
20.9
22.0
20.0
22.7
23.9
23.9
23.2
24.2
23.7
25.8
Adjusted Net Income
37.0
1.1
(1.4)
(13.0)
8.3
(18.1)
10.5
21.8
19.6
10.9
Weighted Average Shares Outstanding (thousands)
137
3,092
23,679
37,270
37,270
37,270
37,270
37,270
37,270
38,912
Adjusted EPS ($)
270.53
0.34
(0.06)
(0.34)
0.22
(0.49)
0.28
0.58
0.53
0.28
Adjustments by Statement of Operations Caption
Loss on extinguishment of long-term debt
-
-
-
-
20.7
-
-
-
-
-
Selling, general and administrative expenses
8.9
1.3
0.7
1.2
1.2
8.4
3.8
12.2
1.7
26.3
Other expense (income), net
-
-
(0.7)
-
1.1
3.2
1.0
(0.4)
-
32.5
Total EBITDA Adjustments
8.9
1.3
-
1.2
23.0
11.6
4.8
11.8
1.7
58.8 |
 23
Selected Segment Information
(in $millions, unless noted)
Q1'12
Q2'12
Q3'12
Q4'12
Q1'13
Q2'13
Q3'13
Q4'13
Q1'14
Q2'14
Latex
330
317
327
301
307
305
310
288
299
295
Synthetic Rubber
125
106
116
130
137
125
128
133
155
142
Styrenics
664
652
679
614
669
679
644
597
686
689
Engineered Polymers
218
201
194
192
199
203
200
199
204
201
Trade Volume (MMLbs)
1,337
1,275
1,316
1,237
1,311
1,311
1,282
1,218
1,344
1,327
Latex
398
422
375
351
357
345
332
308
326
321
Synthetic Rubber
193
175
155
179
176
156
142
148
177
165
Styrenics
528
538
542
541
602
597
576
530
594
590
Engineered Polymers
278
274
255
249
256
263
259
260
262
266
Net Sales
1,396
1,409
1,327
1,320
1,392
1,362
1,309
1,245
1,359
1,341
Latex
27
39
33
27
27
29
27
24
26
27
Synthetic Rubber
44
24
19
24
31
28
13
42
43
37
Styrenics
49
(9)
24
19
25
21
67
52
42
27
Engineered Polymers
16
2
13
0
(1)
(3)
2
2
(2)
5
Corporate
(26)
(11)
(30)
(29)
(13)
(31)
(37)
(27)
(21)
(17)
Adjusted EBITDA
111
46
58
41
69
43
72
93
88
79
Inventory Revaluation
(52)
9
2
2
(0)
26
26
(12)
(6)
(3)
Adjusted EBITDA excl Inv Reval
59
55
60
43
69
70
98
81
83
77
NOTE: Segment balances may not sum to consolidated balances due to rounding.
|