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Sep 30, 2022
Trinseo Q3 2022 Earnings Report
Reported a net loss from continuing operations and a decrease in net sales compared to the previous year.
Key Takeaways
Trinseo reported a challenging third quarter with a net loss from continuing operations of $118 million and adjusted EBITDA of negative $37 million, impacted by weak demand and high energy costs in Europe.
Net loss from continuing operations was $118 million, with diluted EPS of negative $3.35.
Adjusted EBITDA was negative $37 million, including a $24 million unfavorable impact from net timing.
Free cash flow was $59 million, benefiting from a $166 million working capital release.
Ended the quarter with $243 million in cash and over $500 million of additional available liquidity.
Revenue by Segment
Forward Guidance
The company anticipates similar market conditions in the fourth quarter with some level of continued customer destocking, but anticipates significant sequential earnings improvement as a result of idling styrene production in Europe.
Positive Outlook
- Significant sequential earnings improvement as a result of idling styrene production in Europe.
- Combined $47 million of impacts from raw material obligations, inventory writedowns and unfavorable net timing from the third quarter are not expected to reoccur.
- Evaluating asset optimization initiatives, such as the potential closures of the Boehlen, Germany styrene plant and one production line at the Stade, Germany polycarbonate plant, which would be expected to have a positive financial impact in 2023.
- Making headway on our transformation as evidenced by the growth of our sustainable and material substitution products
- Ample liquidity and we anticipate cash generation to fund the transformation while providing solid shareholder returns.
Challenges Ahead
- Similar market conditions in the fourth quarter with some level of continued customer destocking
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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