Trinseo (TSE) Tops Q4 EPS by 18c, Revenues Miss

Trinseo (NYSE: TSE) reported Q4 EPS of $1.84, $0.18 better than the analyst estimate of $1.66. Revenue for the quarter came in at $860 million versus the consensus estimate of $868.88 million.

Fourth Quarter 2020 Summary

• Net income of $67 million and diluted EPS of $1.71; Adjusted EBITDA* of $149 million and Adjusted EPS* of $1.84, inclusive of a pre-tax favorable net timing impact of $29 million
• Cash from operations of $128 million; Free Cash Flow* of $106 million

Commenting on the Company’s fourth quarter and full-year performance, Frank Bozich, President and Chief Executive Officer of Trinseo, said, “2020 was a challenging year but I am extremely proud of how our team responded. During the peak of the COVID-19 pandemic in the second quarter we were able to meet all customer demand and we undertook cost and capital expenditure reduction initiatives to maximize liquidity. Demand recovery in end markets like appliances and automotive in the second half of the year, as well as commercial excellence initiatives, resulted in robust earnings in the third and fourth quarters. In fact, the fourth quarter Adjusted EBITDA was our highest result in over two years and we ended the year in a very strong liquidity position. In addition, we announced a transformative acquisition in December and continued to improve our position to compete in an increasingly sustainability-focused economy. All of this could not have been accomplished without the hard work and dedication of our employees.”

2021 Full-Year Outlook

• Full-year 2021 net income of $167 million to $200 million and Adjusted EBITDA* of $400 million to $450 million, excluding any impact from net timing, the announced acquisition of Arkema’s MMA/PMMA business or the potential Synthetic Rubber divestiture.
• First quarter results are expected to benefit from a continuation of positive trends in both volume, such as in automotive and appliances, and margins, such as in ABS and polystyrene.

Commenting on the outlook for 2021, Bozich said, “We look forward to 2021 as an exciting time for Trinseo. Despite the continued economic impact risk of COVID-19, which we are closely monitoring, we expect significant earnings improvement in 2021. We are starting the year with a very strong balance sheet on the heels of a solid quarter of earnings with the expectation of continued strong demand in the first quarter, particularly in tires, automotive and appliances.”

Bozich continued, “We will continue to act on our strategy of growing the business in areas with higher margins and less cyclicality by investing in Engineered Materials and CASE applications, including the acquisition of Arkema’s MMA/PMMA business. We are still on track to close this transaction by mid-year, at which time we also hope to have concluded our efforts around the exploration of a potential sale of the Synthetic Rubber business. Our strategy, along with a continued focus on our 2030 sustainability goals, will position Trinseo as an advanced specialty and sustainable solutions provider.”

For earnings history and earnings-related data on Trinseo (TSE) click here.

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