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Jun 30, 2023
Trinseo Q2 2023 Earnings Report
Reported net loss due to goodwill impairment charge and reduced sales volume, but profitability increased due to implemented initiatives and positive cash generation.
Key Takeaways
Trinseo reported a net loss of $349 million due to a goodwill impairment charge and lower sales volume across all segments. However, the company delivered its third consecutive quarter of increasing profitability and positive cash generation due to asset footprint actions and other initiatives.
Net loss from continuing operations of $349 million and diluted EPS from continuing operations of negative $9.93.
Adjusted EBITDA of $57 million, including unfavorable impacts of $16 million from net timing, $12 million from natural gas hedges and $4 million from fixed cost under absorption due to inventory reduction initiatives; Adjusted Net Loss of $68 million.
Cash provided by operations of $57 million and capital expenditures of $14 million resulted in Free Cash Flow of $43 million including a $52 million decrease in working capital.
Announced restructuring actions, including the potential closure of the Terneuzen, the Netherlands styrene plant, which, in aggregate, are expected to result in annual cost savings of approximately $70 million to $90 million in 2024.
Revenue by Segment
Forward Guidance
The forecast assumes a similar, constrained demand environment though the remainder of the year and we anticipate second half performance to be similar to the second quarter runrate. Despite the economic environment, we continue to improve our cash and liquidity profile, including working capital reductions and capital expenditure deferments.
Positive Outlook
- Sequential profitability increase of more than $100 million in 2024
- Better position to achieve higher growth
- Better position to achieve higher margin
- Better position to achieve lower volatility as demand normalizes
- Continue to improve cash and liquidity profile, including working capital reductions and capital expenditure deferments
Challenges Ahead
- Similar, constrained demand environment though the remainder of the year
- Anticipate second half performance to be similar to the second quarter runrate
- Full-year 2023 net loss from continuing operations of $460 million
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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