![]() ™ Trademark Q4 and Full Year 2014 Earnings Summary March 5, 2015 Exhibit 99.2 |
![]() Introductions & Disclosure Rules 2 Disclosure Rules Introductions Chris Pappas, President & CEO John Feenan, Executive Vice President & CFO David Stasse, Vice President, Treasury & Investor Relations 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, Adjusted EBITDA excluding inventory revaluation, Adjusted Net Income (loss), Adjusted Net Income (loss) excluding inventory revaluation, Adjusted EPS, and Adjusted EPS excluding inventory revaluation. 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 these measures in the Appendix section of this presentation. |
![]() Agenda 3 Business Overview Financial Review Forward Focus Q&A |
![]() Trinseo Business Overview 4 Engineered Polymers Revenue: $1,036MM Adj EBITDA: $13MM Styrenics Revenue: $2,197MM Adj EBITDA: $87MM Emulsion Polymers Revenue: $1,895MM Adj EBITDA: $234MM Adj EBITDA ex Inv Reval: $246MM Plastics Revenue: $3,233MM Adj EBITDA: $100MM Adj EBITDA ex Inv Reval: $153MM Synthetic Rubber Revenue: $634MM Adj EBITDA: $137MM 2014 Revenue: $5,128MM 2014 Adj EBITDA: $262MM 2014 Adj EBITDA ex Inv Reval: $326MM Latex Revenue: $1,261MM Adj EBITDA: $97MM NOTE: Division and Segment Adjusted EBITDA and Adjusted EBITDA excluding inventory revaluation exclude Corporate Segment Adjusted EBITDA of $(73)MM. Totals may not sum due to rounding. Consistent volumes and EBITDA 8% volume growth in Asia Double digit volume growth in carpet High single digit volume growth in Performance Latex 28% SSBR volume growth Mix shift toward more differentiated grades SSBR now 45% of total volume eSSBR now greater than 50% of SSBR volume Purchased 25kt of SSBR capacity rights from JSR Trialing Generation 4 SSBR Styrene operating rates in mid-80s Elevated Q4 SM margins due to outages Polystyrene volume decline driven by customer destocking in last half of year $50MM of equity earnings Polycarbonate restructuring completed Polycarbonate operating rates now greater than 80% Automotive volumes up 5% excluding LATAM CEM volume up 7% |
![]() Trinseo Business Overview – Q4 5 Engineered Polymers Revenue: $247MM Adj EBITDA: $8MM Styrenics Revenue: $452MM Adj EBITDA: $(4)MM Emulsion Polymers Revenue: $423MM Adj EBITDA: $49MM Adj EBITDA ex Inv Reval: $62MM Plastics Revenue: $700MM Adj EBITDA: $4MM Adj EBITDA ex Inv Reval: $63MM #3 Polystyrene Globally Leading Player Synthetic Rubber Revenue: $137MM Adj EBITDA: $30MM Top 3 SSBR Globally Revenue: $1,122MM Adj EBITDA: $32MM Adj EBITDA ex Inv Reval: $104MM Latex Revenue: $286MM Adj EBITDA: $18MM #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 $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 NOTE: Division and Segment Adjusted EBITDA and Adjusted EBITDA excluding inventory revaluation exclude Corporate Unallocated Adjusted EBITDA of $(20)MM. Totals may not sum due to rounding. |
![]() Key Styrene Raw Material Trends 6 Europe (1) Asia (2) Styrene Ethylene Benzene Styrene Ethylene Benzene SM Margin SM Margin Q3 to Q4 +$100/MT Q3 to Q4 +$35/MT 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 Source: IHS. (1) Styrene: 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). Margin: Styrene less 80% * Benzene less 30% * Ethylene. |
![]() Benzene Contract = $960/MT Styrene Margins in Declining Price Environment 7 Styrene Contract ~ $1,500/MT Benzene Spot Benzene 50/50 • Styrene products (e.g. polystyrene, latex) pricing driven largely by beginning of month styrene contract price • Styrene margins increased through the month $114/MT = $4MM EBITDA (1) (1) Based on normal monthly styrene production of 50 KMT and corresponding 40 KMT benzene consumption. December 2014 600 700 800 900 1,000 |
![]() ™ Trademark Financial Review John Feenan EVP & CFO |
![]() Inventory Revaluation 9 • Inventory revaluation represents the difference in raw material cost between the FIFO accounting basis and the current period cost • It can be estimated by taking the expected change in raw material cost during the period, and multiplying that by the inventory quantity Q3 Q4 Q1 Q3 Q4 Q1 Q3 Q4 Q1 0 200 400 600 800 1,000 1,200 1,400 1,600 Benzene Ethylene Butadiene Europe Feedstock Cost Cost Inv Reval Q4 to Q1 Inventory Q1 Est Product* ($/MT) (KMT) ($MM) Europe Benzene (300) 52 (16) Europe Ethylene (174) 18 (3) Europe Butadiene (276) 45 (12) Asia Benzene (97) 36 (3) Asia Ethylene (8) 12 (0) NA Styrene (298) 20 (6) (41) *Europe Benzene: W. Europe Contract – Monthly Market (FOB/CIF W. Europe); Europe Ethylene: W. Europe Contract – Market Pipeline (Delivered W. Europe); Europe Butadiene: W. Europe Contract Market (ExW/Del pr09 W. Europe); Asia Benzene: NE Asia Spot Avg (FOB S. Korea); Asia Ethylene: NE Asia Spot Avg (CFR NE Asia); North America Styrene: North America Contract – Market (FOB United States). |
![]() Trinseo Quarterly Results 10 NOTE: Totals may not sum due to rounding. F/(U) vs. (in $millions, unless noted) Q4'14 Q3'14 Q4'13 Q4'13 Volume (MMlbs) 1,223 1,315 1,218 Revenue 1,122 1,305 1,245 (14)% (10)% Volume (6)% (0)% Price (5)% (5)% FX (3)% (4)% Adj EBITDA 32 62 93 Adj EBITDA ex Inv Reval 104 62 81 Adj EBITDA ex Inv Reval Margin 9% 5% 7% Adj Net Income (loss) (23) 1 22 Adj Net Income ex Inv Reval 37 1 15 Wtd Avg Shares Outstanding (000) 48,770 48,770 37,270 Adjusted EPS ($) (0.48) 0.01 0.58 Adjusted EPS ($) ex Inv Reval 0.77 0.02 Q3'14 0.39 |
![]() Latex NOTE: Totals may not sum due to rounding. Volume in millions of pounds. 11 |
![]() Synthetic Rubber NOTE: Totals may not sum due to rounding. Volume in millions of pounds. 12 |
![]() 13 Styrenics NOTE: Totals may not sum due to rounding. Volume in millions of pounds. Adjusted EBITDA includes earnings from equity affiliate (Americas Styrenics). |
![]() Engineered Polymers 14 NOTE: Totals may not sum due to rounding. Volume in millions of pounds. Adjusted EBITDA includes earnings and losses from equity affiliate (Sumika Styron). |
![]() (1) Free Cash Flow = cash from operating activities + cash from investing activities – change in restricted cash. 2014 value of $81 million excludes approximately $56 million of termination fees for Latex JV Option and Bain Advisory Agreement. (2) A/R Securitization facility commitment of $200MM ($136MM available at Q4’14) and Revolving Credit facility commitment of $300MM ($293MM available at Q4’14). NOTE: Totals may not sum due to rounding. Balance Sheet and Cash Flow 15 |
![]() ™ Trademark 2015 Focus Chris Pappas President & CEO |
![]() Key Styrene Raw Material Trends 17 Europe (1) Asia (2) Q4 to Q1 -$75/MT Q4 to Q1 +$50/MT 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 Source: IHS. (1) Styrene: 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). Margin: Styrene less 80% * Benzene less 30% * Ethylene. Styrene Ethylene Benzene Styrene Ethylene Benzene |
![]() Key Butadiene Price Trends 18 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 Asia North America 400 800 1,200 1,600 2,000 2,400 |
![]() 19 New Business Segmentation Performance Materials Revenue: $2,716MM Adj EBITDA: $304MM Adj EBITDA ex Inv Reval: $319MM Basic Plastics & Feedstocks Revenue: $2,412MM Adj EBITDA: $31MM Adj EBITDA ex Inv Reval: $79MM Latex Revenue: $1,261MM Adj EBITDA: $97MM New business segmentation financial reporting effective as of January 1, 2015 Strategic Intent: Strategic Intent: Styrenic Polymers / Americas Styrenics Polycarbonate Feedstocks Synthetic Rubber Revenue: $634MM Adj EBITDA: $137MM Performance Plastics Revenue: $821MM Adj EBITDA: $69MM Trinseo 2014 Revenue: $5,128MM 2014 Adj EBITDA: $262MM 2014 Adj EBITDA ex Inv Reval: $326MM NOTE: Division and Segment Adjusted EBITDA and Adjusted EBITDA excluding inventory revaluation exclude Corporate Segment Adjusted EBITDA of $(73)MM. Totals may not sum due to rounding. Grow EBITDA via technology leadership in focused markets Organic growth and possible bolt-on acquisitions Generate cash via cost control and margin improvement No organic investment but possible industry consolidation |
![]() 2015 Expectations 20 Performance Materials Basic Plastics & Feedstocks Synthetic Rubber Latex Performance Plastics General • Q1: Unfavorable inventory revaluation impact of about $40 million; currency impact versus Q4 of about $3 million • Q2: Inventory revaluation to reverse to positive on expected rising feedstocks • Full Year: Currency impact versus 2014 of about $25 million at 1.15 USD/EUR Q1: Seasonally higher volume versus Q4 2015: Continued steady performance; growth in Asia and performance latex volumes Q1: Sequentially higher EBITDA due to seasonally high volume; offset by FX & inv reval 2015: Higher SSBR volume with offsets from FX, margin, and technology investments; Q2 turnaround sequential $10MM impact Q1: Significantly higher margins due to lower raw material cost 2015: Improvement over 2014 due to product growth and higher margins Q1: Higher styrenic polymer and PC margins as well as higher JV income partially offset by lower styrene margin 2015: Full year of PC restructuring benefit with cyclical upside; SM in cyclical rebound; Q2 styrenic polymers turnaround $6MM impact |
![]() ™ Trademark Q&A |
![]() ™ Trademark Appendix |
![]() US GAAP to Non-GAAP Reconciliation 23 NOTE: The tax effect of inventory revaluation is estimated in a similar manner as tax calculated on all other earnings during each period. (in $millions, unless noted) Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 2012 2013 2014 Net Income (Loss) 30.1 1.9 (1.2) (0.5) (9.7) (28.1) 4.9 10.6 17.1 (44.6) (10.1) (29.7) 30.3 (22.2) (67.3) Interest expense, net 25.7 26.6 28.6 29.1 32.3 33.7 32.9 33.1 32.8 32.6 30.1 29.4 110.0 132.0 124.9 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 3.7 (2.1) 17.5 21.8 19.7 Depreciation and amortization 20.9 22.0 20.0 22.7 23.9 24.0 23.2 24.2 23.7 27.2 27.8 24.9 85.6 95.2 103.7 EBITDA 101.8 44.4 57.7 39.5 46.4 31.8 67.0 81.7 86.4 20.6 51.5 22.5 243.4 226.8 181.0 Loss on extinguishment of long-term debt - - - - 20.7 - - - - - 7.4 - - 20.7 7.4 Other non-recurring items - - (0.7) - 1.1 - - (0.4) - 32.5 1.9 3.9 (0.6) 0.8 38.4 Restructuring and other charges 7.8 0.1 (0.4) - - 6.5 2.6 1.8 0.5 2.1 0.8 6.6 7.5 10.8 10.0 Net (gains) / losses on dispositions of businesses and assets - - - - - 3.2 1.0 - - - - (0.6) - 4.2 (0.6) Fees paid pursuant to advisory agreement 1.1 1.2 1.1 1.2 1.2 1.2 1.2 1.2 1.2 24.2 - - 4.6 4.7 25.4 Asset impairment charges or write-offs - - - - - 0.7 - 9.2 - - - - - 9.9 - Adjusted EBITDA 110.7 45.7 57.7 40.7 69.4 43.4 71.8 93.5 88.1 79.4 61.6 32.4 254.9 277.9 261.6 Inventory Revaluation (52.1) 9.2 2.4 2.1 (0.2) 26.2 26.4 (12.0) (5.6) (2.6) 0.8 71.8 (38.4) 40.4 64.4 Adjusted EBITDA Ex Inv Reval 58.6 54.9 60.0 42.8 69.3 69.6 98.2 81.5 82.5 76.8 62.3 104.2 216.5 318.3 326.0 Adjusted EBITDA to Adjusted Net Income Ex Inv Reval Adjusted EBITDA 110.7 45.7 57.7 40.7 69.4 43.4 71.8 93.5 88.1 79.4 61.6 32.4 254.9 277.9 261.6 Interest expense, net 25.7 26.6 28.6 29.1 32.3 33.7 32.9 33.1 32.8 32.6 30.1 29.4 110.0 132.0 124.9 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 5.4 1.8 35.4 28.4 29.4 Depreciation and amortization - Adjusted 20.9 22.0 20.0 22.7 23.9 23.9 23.2 24.2 23.7 25.8 25.6 24.5 85.6 95.2 99.6 Adjusted Net Income 37.0 1.1 (1.4) (13.0) 8.3 (18.1) 10.5 21.8 19.6 10.9 0.5 (23.3) 23.9 22.3 7.7 Inventory Revaluation (52.1) 9.2 2.4 2.1 (0.2) 26.2 26.4 (12.0) (5.6) (2.6) 0.8 71.8 (38.4) 40.4 64.4 Tax effect of inv reval 13.6 3.0 (4.8) (6.0) 0.1 (7.6) (1.9) 4.9 1.2 0.8 (0.1) (11.1) 5.9 (4.3) (9.3) Adjusted Net Income Ex Inv Reval (1.5) 13.3 (3.8) (16.9) 8.2 0.5 35.0 14.7 15.2 9.1 1.2 37.4 (8.6) 58.4 62.8 Weighted Average Shares Outstanding (thousands) 37,270 37,270 37,270 37,270 37,270 38,912 48,770 48,770 37,270 43,476 Adjusted EPS ($) 0.22 (0.49) 0.28 0.58 0.53 0.28 0.01 (0.48) 0.60 0.18 Adjusted EPS ($) Ex Inv Reval 0.22 0.01 0.94 0.39 0.41 0.23 0.02 0.77 1.57 1.44 Adjustments by Statement of Operations Caption Loss on extinguishment of long-term debt - - - - 20.7 - - - - - 7.4 - - 20.7 7.4 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 2.7 10.5 12.2 25.5 41.3 Other expense (income), net - - (0.7) - 1.1 3.2 1.0 (0.4) - 32.5 - (0.6) (0.7) 4.9 31.9 Total EBITDA Adjustments 8.9 1.3 - 1.2 23.0 11.6 4.8 11.8 1.7 58.8 10.1 9.9 11.5 51.1 80.6 |
![]() Selected Segment Information 24 NOTE: Totals may not sum due to rounding. (in $millions, unless noted) Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 2012 2013 2014 Latex 330 317 327 301 307 305 310 288 299 295 309 289 1,275 1,210 1,193 Synthetic Rubber 125 106 116 130 137 125 128 133 155 142 136 135 477 523 568 Emulsion Polymers 455 423 443 431 444 429 438 422 454 437 445 424 1,752 1,733 1,761 Styrenics 664 652 679 614 669 679 644 597 686 689 671 606 2,608 2,588 2,653 Engineered Polymers 218 201 194 192 199 203 200 199 204 201 199 193 804 801 796 Plastics 882 852 873 806 867 881 844 796 890 890 870 799 3,413 3,389 3,449 Trade Volume (MMLbs) 1,337 1,275 1,316 1,237 1,311 1,311 1,282 1,218 1,344 1,327 1,315 1,223 5,165 5,122 5,210 Latex 398 422 375 351 357 345 332 308 326 321 328 286 1,545 1,341 1,261 Synthetic Rubber 193 175 155 179 176 156 142 148 177 165 155 137 702 622 634 Emulsion Polymers 590 597 530 530 533 501 474 456 503 486 484 423 2,247 1,963 1,895 Styrenics 528 538 542 541 602 597 576 530 594 590 561 452 2,149 2,305 2,197 Engineered Polymers 278 274 255 249 256 263 259 260 262 266 261 247 1,056 1,039 1,036 Plastics 806 812 797 790 858 861 835 790 856 855 822 700 3,205 3,344 3,233 Net Sales 1,396 1,409 1,327 1,320 1,392 1,362 1,309 1,245 1,359 1,341 1,305 1,122 5,452 5,307 5,128 Latex 27 39 33 27 27 29 27 24 26 27 26 18 125 106 97 Synthetic Rubber 44 24 19 24 31 28 13 42 43 37 27 30 111 113 137 Emulsion Polymers 71 63 51 51 57 56 39 66 69 64 53 49 237 220 234 Styrenics 49 (9) 24 19 25 21 67 52 42 27 22 (4) 83 165 87 Engineered Polymers 16 2 13 0 (1) (3) 2 2 (2) 5 2 8 32 0 13 Plastics 66 (7) 37 19 25 18 69 54 40 32 23 4 115 165 100 Corporate (26) (11) (30) (29) (13) (31) (37) (27) (21) (17) (15) (20) (96) (107) (73) Adjusted EBITDA 111 46 58 41 69 43 72 93 88 79 62 32 255 278 262 Emulsion Polymers 51 66 63 54 60 63 60 58 66 64 54 62 234 241 246 Plastics 34 0 27 18 22 37 75 50 37 30 23 63 79 184 153 Corporate (26) (11) (30) (29) (13) (31) (37) (27) (21) (17) (15) (20) (96) (107) (73) Adjusted EBITDA excl Inv Reval 59 55 60 43 69 70 98 81 83 77 62 104 217 318 326 Styrenics (5) (8) (7) (7) (3) (9) (15) (12) (16) (7) (11) (17) (27) (39) (50) Engineered Polymers (1) 1 (0) 0 0 0 (0) (0) 1 1 2 (1) (0) 0 3 Plastics (6) (7) (7) (7) (3) (9) (15) (12) (15) (5) (9) (18) (27) (39) (48) Equity in earnings of affiliates (6) (7) (7) (7) (3) (9) (15) (12) (15) (5) (9) (18) (27) (39) (48) |
![]() Selected NEW Segment Information 25 NOTE: Totals may not sum due to rounding. (in $millions, unless noted) Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 2012 2013 2014 Latex 330 317 327 301 307 305 310 288 299 295 309 289 1,275 1,210 1,193 Synthetic Rubber 125 106 116 130 137 125 128 133 155 142 136 135 477 523 568 Performance Plastics 152 159 146 142 140 150 145 144 144 147 145 145 598 579 581 Performance Materials 607 582 589 573 584 580 583 566 598 584 591 569 2,350 2,312 2,342 Basic Plastics & Feedstocks 730 694 727 664 727 731 699 652 746 743 725 654 2,814 2,810 2,867 Trade Volume (MMLbs) 1,337 1,275 1,316 1,237 1,311 1,311 1,282 1,218 1,344 1,327 1,315 1,223 5,165 5,122 5,210 Latex 398 422 375 351 357 345 332 308 326 321 328 286 1,545 1,341 1,261 Synthetic Rubber 193 175 155 179 176 156 142 148 177 165 155 137 702 622 634 Performance Plastics 212 225 205 197 196 208 201 203 202 210 208 202 839 808 821 Performance Materials 802 822 735 727 729 709 675 658 705 695 691 624 3,086 2,771 2,716 Basic Plastics & Feedstocks 594 587 592 593 663 652 634 587 654 645 614 498 2,366 2,536 2,412 Net Sales 1,396 1,409 1,327 1,320 1,392 1,362 1,309 1,245 1,359 1,341 1,305 1,122 5,452 5,307 5,128 Latex 27 39 33 27 27 29 27 24 26 27 26 18 125 106 97 Synthetic Rubber 44 24 19 24 31 28 13 42 43 37 27 30 111 113 137 Performance Plastics 21 13 20 16 13 10 17 21 17 17 19 16 70 62 69 Performance Materials 92 77 71 66 71 67 56 87 87 81 72 65 306 281 304 Basic Plastics & Feedstocks 45 (20) 17 3 11 8 52 33 23 16 4 (12) 45 103 31 Corporate (26) (11) (30) (29) (13) (31) (37) (27) (21) (17) (15) (20) (96) (107) (73) Adjusted EBITDA 111 46 58 41 69 43 72 93 88 79 62 32 255 278 262 Performance Materials 71 78 85 68 71 77 79 77 82 80 73 85 301 304 319 Basic Plastics & Feedstocks 14 (12) 6 4 11 23 56 31 22 13 4 40 12 121 79 Corporate (26) (11) (30) (29) (13) (31) (37) (27) (21) (17) (15) (20) (96) (107) (73) Adjusted EBITDA excl Inv Reval 59 55 60 43 69 70 98 81 83 77 62 104 217 318 326 Basic Plastics & Feedstocks (6) (7) (7) (7) (3) (9) (15) (12) (15) (5) (9) (18) (27) (39) (48) Equity in earnings of affiliates (6) (7) (7) (7) (3) (9) (15) (12) (15) (5) (9) (18) (27) (39) (48) |