![]() ™ Trademark Deutsche Bank Leveraged Finance Conference September 30, 2014 Exhibit 99.1 |
![]() 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 David Stasse, Vice President, Treasury & Investor Relations |
![]() 3 Business Overview Engineered Polymers Revenue: $1,046MM Adj EBITDA: $7MM Styrenics Revenue: $2,290MM Adj EBITDA: $188MM Emulsion Polymers Revenue: $1,918MM Adj EBITDA: $239MM Plastics Revenue: $3,336MM Adj EBITDA: $195MM #3 Polystyrene Globally Leading Player Synthetic Rubber Revenue: $631MM Adj EBITDA: $135MM Top 3 SSBR Globally Q2’14 LTM Revenue: $5,254MM Q2’14 LTM Adj EBITDA: $333MM Latex Revenue: $1,287MM Adj EBITDA: $104MM #1 Globally in SB Latex 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 Trinseo - $5+ billion in annual revenue, world leader in the production of latex, rubber and plastics Americas Styrenics - $2 billion leader in styrene / polystyrene Appliances Consumer goods Construction/sheet Packaging Automotive Consumer electronics Automotive Consumer electronics Construction/sheet Electrical and lighting Medical devices Note: Division and Segment EBITDA excludes Corporate unallocated Q2 ‘14 LTM Adjusted EBITDA of $(101)MM. Totals may not sum due to rounding. |
![]() 4 Latex Key Trends End Market Demand Source: IHS Improving living standards in emerging economies Chinese SB Latex Demand Number 1 globally in SB Latex Three areas of focus: paper & board, carpet, and performance latex Growth in carpet, paper board, Asia paper, performance latex Challenged paper markets in NA and Europe Additional capacity in China in Q2 ‘15 Improving industry structure Significant consolidation 20% capacity reduction in NA / Europe 1,554 1,722 0 400 800 1,200 1,600 2,000 2010A China W.E. and N.A. 2016E North America Western Europe Western Europe China China China North America |
![]() 5 Synthetic Rubber Fuel efficiency and safety Key Trends End Market Demand Source: Michelin, Trinseo estimates $600 - $700mm business focused on performance tire market Technology leader in SSBR Provides superior tread properties such as wet grip, low rolling resistance Doubled capacity since 2012 – H1 ’14 volume run rate up 75% from 2012 Investing in growth Purchased 25kMT of capacity rights from JSR Converting Ni-PBR train to Nd-PBR to address demand for high performance tire walls Global Premium Passenger Car Tires SSBR target end- market – To be sold over next six quarters – Expected to be completed by Q4’15 – Trialing Generation 4 enhanced SSBR |
![]() 6 Engineered Polymers Key Trends End Market Demand Source: ICIS Growing demand for high-tech plastics focused on automotive and other growth markets Polycarbonate Automotive Lightweighting Plastic Used in Passenger Vehicles 5.5 9.1 0 2 4 6 8 10 12 2012E 2017E Sustainable, long-standing relationships with automotive industry leaders Highly engineered compounded blends Restructuring and rising operating rates should lead to significant EBITDA lift in 2015 – Serves consumer electronics, medical, and electrical / lighting markets H1 ’14 global demand growth up 5% – – Focused on weight reduction, improving interior aesthetic trends Manufacturing facilities across 4 continents |
![]() 7 Styrenics Evolving industry structure New players focused on SM and PS margins Capacity rationalization and cyclical recovery will increase operating rates Styrenic polymers business with global scale Focused on appliances, packaging, and constructions Number 3 polystyrene globally Americas Styrenics provided $35mm in LTM dividends Tightening Polystyrene Operating Rates ~20% Reduction in Production Capacity Increasing Focused Suppliers 1% 2% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% Supply Demand 2013E -2018E CAGR 2013E - 2018E CAGR 2013E - 2018E Operating Rate: 70% 73% Styrolution Trinseo 0% 20% 60% 80% 100% 2006 2014 Versalis Total BASF BASF Dow NOVA Total Polimeri Europa 40% |
![]() 8 Financial Overview Source: see appendix for reconciliation to nearest GAAP metric Historical Quarterly Adjusted EBITDA Strong earnings momentum driven by growth in Synthetic Rubber, stable Latex business, and improved supply/demand dynamics in Styrenics Quarterly LTM Adjusted EBITDA (Q4 ‘12 to Q2 ‘14) Styrenics Synthetic Rubber Latex Corporate Engineered Polymers $255 $214 $211 $225 $278 $297 $333 |
![]() 9 Balance Sheet Deleveraging Over Time with Significant Liquidity Net Debt $1,209MM $1,140MM $1,023MM Strong balance sheet with no long-term debt maturities until 2019 IPO proceeds used for de-leveraging – Target net debt of 2-3X Adj. EBITDA – Growth opportunities to be pursued selectively Ability to refinance up to $1.193 billion of Senior Notes – Potential to significantly lower interest costs (currently 8.75% coupon) $675 million liquidity (a) – Cash ($182MM), Revolver ($293MM), AR Facility ($200MM) (a) As of Q2 2014 proforma for $132.5mm debt paydown on July 14 4.7x 4.1x 3.1x 0.0x 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x 3.5x 4.0x 4.5x 5.0x FY2012 FY2013 2QLTM (a) Note: see appendix for reconciliation to nearest GAAP metric |
![]() Summary Structural • Polycarbonate restructuring • Deleveraging and refinancing • Consolidation and capacity rationalization Profitable Growth • Additional SSBR capacity • New SSBR and neodymium-PBR technology • China latex expansion • Automotive and CEM compounding Cyclical • Rising operating rates in styrene, polystyrene, polycarbonate • Recovering tire markets 10 |
![]() ™ Trademark Appendix |
![]() 12 US GAAP to Non-GAAP Reconciliation (in $millions, unless noted) Q4'12 LTM Q1'13 LTM Q2'13 LTM Q3'13 LTM Q4'13 LTM Q1'14 LTM Q2'14 LTM Net Income (Loss) 30.3 (9.4) (39.5) (33.3) (22.2) 4.5 (12.0) Interest expense, net 110.0 116.6 123.7 128.0 132.0 132.5 131.4 Provision for (benefit from) income taxes 17.5 (7.7) 0.6 (3.7) 21.9 34.7 38.0 Depreciation and amortization 85.6 88.5 90.6 93.8 95.3 95.1 98.3 EBITDA 243.4 187.9 175.3 184.7 226.9 266.8 255.7 Loss on extinguishment of long-term debt - 20.7 20.7 20.7 20.7 - - Other non-recurring items (0.7) 0.5 0.5 1.1 0.7 (0.4) 32.1 Restructuring and other charges 7.4 (0.4) 6.0 9.0 10.8 11.3 7.0 Net (gains) / losses on dispositions of businesses and assets - - 3.2 4.2 4.2 4.2 1.0 Fees paid pursuent to advisory agreement 4.6 4.7 4.7 4.8 4.7 4.7 27.8 Asset impairment charges or write-offs - - 0.7 0.7 9.9 9.9 9.2 Adjusted EBITDA 254.8 213.5 211.2 225.3 278.1 296.8 332.8 Note: totals may not sum due to rounding |