Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - Trinseo S.A. | d829224d8k.htm |
| EX-99.1 - EX-99.1 - Trinseo S.A. | d829224dex991.htm |
 ™
Trademark
Citi
Basic Materials
Conference
December 2, 2014
Exhibit 99.2 |
 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
|
 Investment Thesis
3
Engineered Polymers
Styrenics
Emulsion Polymers
Revenue: $1,928MM
Adj EBITDA: $252MM
Plastics
Revenue: $3,323MM
Adj EBITDA: $149MM
Synthetic Rubber
Q3’14 LTM Revenue: $5,251MM
Q3’14 LTM Adj EBITDA: $323MM
Latex
Consistent performance
Strong cash generation
Growth in Asia, carpet,
performance latex
Leveraged to high growth,
performance tire market
Incremental capacity
Favorable mix shift
Higher operating rate
leading to improved
margins
Capacity rationalization
Growing compounding
business
$35MM polycarbonate
restructuring savings in
2015
Cyclical upside to
improving polycarbonate
market
Note:
Division
and
Segment
EBITDA
excludes
Corporate
unallocated
Q3
’14
LTM
Adjusted
EBITDA
of
$(79)MM.
Totals
may
not
sum
due
to
rounding.
Deleveraging, Refinancing to Meaningfully Reduce Cash Interest
|
 4
Latex
Consistent results
Three areas of focus: paper & board,
carpet, and performance latex
Growing carpet, paper board, Asia
paper, performance latex
Challenged paper markets in NA and
Europe
Additional TSE capacity in China in
mid-2015
Cost advantaged technologies
Volume / EBITDA
0
5
10
15
20
25
30
35
100
150
200
250
300
350
Q4 12
Q1 13
Q2 13
Q3 13
Q4 13
Q1 14
Q2 14
Q3 14
Volume
Adj EBITDA |
 5
Synthetic Rubber
Focused on high growth, performance tire
market
Technology leader in SSBR
Provides superior tread properties such as wet grip,
low rolling resistance, reduced noise
Mix shift toward higher end products
Investing in growth
Purchased 25kt of capacity rights from JSR
Converting Ni-PBR train to Nd-PBR to address
demand for high performance tire walls
Trialing Generation 4 enhanced SSBR |
 6
Engineered Polymers
Source: IHS
Growing demand for high-tech plastics focused
on automotive and other growth markets
Sustainable, long-standing relationships with
automotive industry leaders
Manufacturing facilities across four continents
Focused on weight reduction, interior aesthetics
Highly engineered compounds and blends
Serves consumer electronics, medical, and
electrical / lighting markets (CEM)
Polycarbonate
2014 YTD global demand growth up 5%
Operating rates approaching 80%
Polycarbonate
74%
79%
78%
76%
75%
77%
80%
60%
65%
70%
75%
80%
85%
2009
2010
2011
2012
2013
2014
2015
Operating Rate
European Margins |
 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
Tightening styrene operating rates
Leading to higher styrene margins
Margin upside with outage-driven spikes
Americas Styrenics provided $35mm in LTM
dividends
Source: IHS
Europe Styrene Spread Over Raw Materials |
 LTM Q4 2012
LTM Q1 2013
LTM Q2 2013
LTM Q3 2013
LTM Q4 2013
LTM Q1 2014
LTM Q2 2014
LTM Q3 2014
$255
$214
$211
$225
$278
$297
$333
$323
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; full $35MM Polycarbonate savings in 2015
Styrenics
Synthetic
Rubber
Latex
Corp.
Eng
Polymers
(millions) |
 9
Cash Generation / Balance Sheet
Consistent cash generation
Focus on deleveraging
Modest capex
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)
Strong balance sheet with no long-
term debt maturities until 2019
$631 million liquidity as of Q3 end
Cash ($152MM), Revolver ($293MM), AR
Facility ($186MM)
143
223
242
4.7x
2012
2013
Q3 14 LTM
Adj EBITDA less Capex ($MM)
Leverage Ratio |
 Value
Drivers 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
•
Macro recovery
10 |
 Appendix
™
Trademark |
 12
US GAAP to Non-GAAP Reconciliation
Note: totals may not sum due to rounding
Adj EBITDA and Net Income 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
Q3'14 LTM
Net Income (Loss)
30.3
(9.4)
(39.5)
(33.3)
(22.2)
4.5
(12.0)
(27.0)
Interest expense, net
110.0
116.6
123.7
128.0
132.0
132.5
131.4
128.6
Provision for (benefit from) income taxes
17.5
(7.7)
0.6
(3.7)
21.9
34.7
38.0
35.6
Depreciation and amortization
85.6
88.5
90.6
93.8
95.3
95.1
98.3
102.9
EBITDA
243.4
187.9
175.3
184.7
226.9
266.8
255.7
240.1
Loss on extinguishment of long-term debt
-
20.7
20.7
20.7
20.7
-
-
7.4
Other non-recurring items
(0.7)
0.5
0.5
1.1
0.7
(0.4)
32.1
34.0
Restructuring and other charges
7.4
(0.4)
6.0
9.0
10.8
11.3
7.0
5.2
Net (gains) / losses on dispositions of businesses and assets
-
-
3.2
4.2
4.2
4.2
1.0
0.0
Fees paid pursuent to advisory agreement
4.6
4.7
4.7
4.8
4.7
4.7
27.8
26.6
Asset impairment charges or write-offs
-
-
0.7
0.7
9.9
9.9
9.2
9.2
Adjusted EBITDA
254.8
213.5
211.2
225.3
278.1
296.8
332.8
322.5 |
 13
Selected Segment Information
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
2012
2013
2014 YTD
Latex
330
317
327
301
307
305
310
288
299
295
309
1,275
1,210
904
Synthetic Rubber
125
106
116
130
137
125
128
133
155
142
136
477
523
433
Styrenics
664
652
679
614
669
679
644
597
686
689
671
2,608
2,588
2,047
Engineered Polymers
218
201
194
192
199
203
200
199
204
201
199
804
801
603
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
5,165
5,122
3,986
Latex
398
422
375
351
357
345
332
308
326
321
328
1,545
1,341
975
Synthetic Rubber
193
175
155
179
176
156
142
148
177
165
155
702
622
497
Styrenics
528
538
542
541
602
597
576
530
594
590
561
2,149
2,305
1,745
Engineered Polymers
278
274
255
249
256
263
259
260
262
266
261
1,056
1,038
788
Net Sales
1,396
1,409
1,327
1,320
1,392
1,362
1,309
1,245
1,359
1,341
1,305
5,452
5,307
4,006
Latex
27
39
33
27
27
29
27
24
26
27
26
125
106
79
Synthetic Rubber
44
24
19
24
31
28
13
42
43
37
27
111
113
107
Styrenics
49
(9)
24
19
25
21
67
52
42
27
22
83
165
91
Engineered Polymers
16
2
13
0
(1)
(3)
2
2
(2)
5
2
32
0
5
Corporate
(26)
(11)
(30)
(29)
(13)
(31)
(37)
(27)
(21)
(17)
(15)
(96)
(107)
(52)
Adjusted EBITDA
111
46
58
41
69
43
72
93
88
79
62
255
278
229
Inventory Revaluation
(52)
9
2
2
(0)
26
26
(12)
(6)
(3)
1
(38)
40
(7)
Adjusted EBITDA excl Inv Reval
59
55
60
43
69
70
98
81
83
77
62
217
318
222 |