Trinseo sales and profit grow in 2017, more expected for 2018

BERWYN, Pa.—Positive 2017 results are leading executives with materials maker Trinseo S.A. to increase guidance for 2018.

Berwyn-based Trinseo saw its 2017 sales jump almost 20 percent to more than $4.4 billion, as annual profit grew 3 percent to $328 million. The firm now anticipates full-year 2018 profit of between $369 million and $386 million and adjusted earnings per share of $8.26 to $8.63, officials said in a Feb. 19 news release.

President and CEO Chris Pappas said in the release that Trinseo was increasing guidance because of strong business fundamentals and because it expects a favorable impact from unplanned styrene outages in the first quarter. The firm also expects continued strong cash generation during 2018, he added.

Net sales of latex binders were up in the fourth quarter and full year ended Dec. 31. The full year net sales reached $1.09 billion in 2017, while fourth quarter net sales increased by 4 percent to $250 million, when compared to the same period in the year prior.

Trinseo attributed the fourth quarter gain in part to the pass through of higher raw materials costs. Meanwhile, lower sales volumes in the quarter decreased revenue by 11 percent, Trinseo said, excluding the divested Latin America Business, and was driven primarily by lowers sales volumes through North America and Europe as demand in the paper in paper and carpet markets droppped.

Adjusted EBITDA of $33 million was $9 million above prior year from higher margins in Asia due to better market conditions, which was partially offset by lower sales volume, Trinseo said.

Net sales of synthetic rubber, meanwhile, climbed to $582.8 million, compared to the $450.7 million reported in 2016.

Compared to the fourth quarter of 2016, synthetic rubber net sales rose 2 percent to $127 million, gains which Trinseo credits to the pass through of higher raw materials costs. These impacts, the firm noted, were partially offset by lower sales volumes, which were caused destocking, shipment delays, and a softer tire market. Further, the firm said that ajusted EBITDA of $15 million was $14 million below the prior year from lower sales volume as well as favorable prior year net timing impacts.

Full-year sales in Trinseo's Basic Plastics unit were up almost 15 percent to more than $1.5 billion. Performance Plastics saw sales grow 14 percent to $808 million. Adjusted EBITDA for Basic Plastics grew more than 5 percent to almost $157 million for the year, but fell more than 10 percent to $122 million for Performance Plastics.

Based on sales, Basic Plastics was the largest of Trinseo's five operating units in 2017, generating almost 35 percent of total sales.

Trinseo's major move in 2017 was its acquisition of Italian materials firm API S.p.A. API makes a range of soft-touch plastics, including thermoplastic polyurethanes.

On Wall Street, Trinseo's per-share stock price began 2017 around $65 but ended near $82.50 for an increase of almost 27 percent. The price closed at $83.20 on Feb. 26.