jefferies industrials conferences21.q4cdn.com/.../2016/aug-11-jefferies-conference.pdf ·...

™ Trademark of Trinseo S.A. or its affiliates

Jefferies Industrials Conference

August 11, 2016


Introductions & Disclosure RulesIntroductions• Chris Pappas, President & CEO• Barry Niziolek, Executive Vice President & CFO• David Stasse, Vice President, Treasury & Corporate Finance

Disclosure RulesCautionary Note on Forward-Looking Statements. This presentation contains forward-looking statements including, without limitation, statements concerning plans, objectives, goals, projections, strategies, future events or performance, and underlying assumptions and other statements, which are not statements of historical facts or guarantees or assurances of future performance. Forward- looking statements may be identified by the use of words like “expect,” “anticipate,” “intend,” “forecast,” “outlook,” “will,” “may,” “might,” “potential,” “likely,” “target,” “plan,” “contemplate,” “seek,” “attempt,” “should,” “could,” “would” or expressions of similar meaning. Forward-looking statements reflect management’s evaluation of information currently available and are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statementsrelate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Factors that might cause such a difference include, but are not limited to, those discussed in our Annual Report on Form 10-K, under Part I, Item 1A — “Risk Factors” and elsewhere in that report. As a result of these or other factors, our actual results may differ materially from those contemplated by the forward-looking statements. Therefore, we caution you against relying on any of these forward-looking statements. The forward-looking statements included in this presentation are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.This presentation contains financial measures that are not in accordance with generally accepted accounting principles in the US (“GAAP”) including Adjusted EBITDA, Adjusted EBITDA excluding inventory revaluation, Adjusted Net Income (loss), and Adjusted EPS - Diluted. 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 these measures in the Appendix section of this presentation.

2

Trinseo

• Leading producer of synthetic rubber, latex, and plastics

• Carved out of Dow Chemical in 2010• Global headquarters in Berwyn, PA• Diverse geographic and end market exposure• 1.3x net leverage

Overview

EBITDA ex Inventory Revaluation ($MM)

Other16%

Appliances9% Automotive

14%

Building & Construction /

Sheet14%

Carpet & Turf5%

Consumer Electronics

5%Packaging

8%Paper &

Paperboard17%

Tires / Rubber Goods12%

2015 Revenue by End Market

EMEA60%

North America

22%

Asia Pacific

14% Other4%

2015 Revenue by Geography

318 326

550600

2013 2014 2015 Q2 '16 LTM

3

Performance MaterialsNet Sales: $528MM

Adj EBITDA: $83MMAdj EBITDA ex Reval: $76MM

Basic Plastics & FeedstocksNet Sales: $442MM

Adj EBITDA: $121MMAdj EBITDA ex Reval: $115MM

Latex

Net Sales: $232MMAdj EBITDA: $21MM

Strategic Intent: Grow EBITDA via technology leadership in

focused markets Stable and consistent cash generation Organic growth and possible bolt-on

acquisitions

Strategic Intent: Generate cash via cost control and margin

improvement Manage JVs for cash generation No organic investment

Styrenic Polymers / Americas Styrenics

Polycarbonate / Sumika Styron PC

Feedstocks

Synthetic Rubber


Performance Plastics



Adj EBITDA ex Reval: $169MMAdj EPS: $2.30

Note: Division and Segment Adjusted EBITDA and Adjusted EBITDA excluding inventory revaluation exclude Corporate Segment Adjusted EBITDA of $(21)MM. Totals may not sum due to rounding.

Trinseo Overview – Q2 2016

4

Styrene Margins(a) Americas Styrenics JV ($MM)

Polycarbonate Margins & Operating Rates(a)

$-

$100

$200

$300

$400

$500

$600

$700

Jan-

12

Apr-

12

Jul-1

2

Oct

-12

Jan-

13

Apr-

13

Jul-1

3

Oct

-13

Jan-

14

Apr-

14

Jul-1

4

Oct

-14

Jan-

15

Apr-

15

Jul-1

5

Oct

-15

Jan-

16

Apr-

16

Jul-1

6

Oct

-16

USD

/MT

$776

$173 $265 $228

$520 $546 78%

76%75%

77%

80%

82%

2011 2012 2013 2014 2015 Q2'16 LTM

Glob

al O

pera

ting

Rate

s

W E

urop

e M

argi

n U

SD/M

T

Source: IHS/Trinseo(a) Margins for Western Europe.

Leverage to styrenics 1,400kt exposure to styrene

600kT of European production 300kT of Asian purchases w/ cost-based economics 500kT of AmSty N American production (TSE’s 50% share)

1,300kt of exposure to styrenic polymers 950kT of TSE production 350kT of AmSty N American production (TSE’s 50% share)

Leverage to polycarbonate 150kT of European production

Key Highlights

Basic Plastics & Feedstocks

$78 $70

$250

$280

$45

$106

$283

2013 2014 2015 Q2'16 LTMDistributions EBITDA

5

$465

$439

Q2'16

$170

$25

$247

$344

$56

$69

2013 2014 2015 Q2'16 LTM

Balance Sheet and Cash Flow

Liquidity ($MM)

Net Leverage(3)

(1) Free Cash Flow = cash from operating activities + cash from investing activities – change in restricted cash. 2015 value of $316MM excludes a call premium of approximately $69MM. 2014 value of $81MM excludes approximately $56MM of termination fees for Latex JV Option and Bain Advisory Agreement.

(2) A/R Securitization facility commitment of $200MM ($130MM available at Q2’16) and Revolving Credit facility commitment of $325MM ($309MM available at Q2’16). NOTE: Totals may not sum due to rounding.(3) Net Leverage = (Total Debt – Cash & Cash Equivalents) / LTM Adjusted EBITDA

Summary• Q2 cash from operating activities of $95 million and

free cash flow of $68 million• Q2 dividends of $30 million from Americas Styrenics• Net leverage of 1.3x at quarter end

Unused Borrowing Facilities(2)

Cash & Cash Equivalents

Free Cash Flow ($MM) (1)

$81

Call premium related to refinancing

$904

$316

4.1x 3.8x

1.6x 1.3x

2013 2014 2015 Q2'16 LTM

6


Q&A



Appendix


Austria, 3% Belgium, 5%Czech Republic, 4%

Finland, 3%

France, 6%

Germany, 28%

Italy, 7%Poland, 3%

Sweden, 6%

Switzerland, 3%

Netherlands, 4%

Turkey, 6%

United Kingdom, 5%

Other, 19%

2015 EMEA* Sales by Country

EMEA*, 60%Asia Pacific, 22%

United States, 14%

Other, 4%

2015 Net Sales by Geography

Trinseo Sales by Region

* EMEA includes Europe, Middle East, and Africa1) Sales on destination basis

1

9

Trinseo Sales by Market Segment

Other, 19%

Appliances, 7% Automotive,

12%

Building & Construction / Sheet, 18%

Carpet & Turf, 4%

Consumer Electronics,

2%

Packaging, 11%

Paper & Paperboard,

14%

Tires / Rubber Goods, 14%

GlobalSales by End Market

EuropeSales by End Market

Other16%

Appliances9% Automotive

14%

Building & Construction /

Sheet14%

Carpet & Turf5%

Consumer Electronics

5%Packaging

8%Paper &

Paperboard17%

Tires / Rubber Goods12%

10

Bridging to 2016 Guidance

$550 $610

($60)

+$20

+$100

2015 Adj EBITDA excl InvRevaluation

2015 Fly-up StyreneMargin

Performance Materials>5% Growth

BP&F StructuralImprovement

2016 Adj EBITDA excl InvRevaluation (Guidance

Midpoint)

Adj EBITDA excl Inventory Revaluation ($MM)

Basic Plastics & Feedstocks Structural Improvement• Market improvement – approximately $55 million styrene

monomer and $25 million styrenic polymers• About $20 million from lower utility cost, improved yield

11

Latex

Key Highlights 3% year-over-year volume growth

$5 million annual cost savings initiative achieved 1st half 2016, others ongoing

Evaluating asset footprint

North America

− Gales Ferry, CT plant closure end of 2015

− Increased utilization rates

− Improving margins via price increases

Deliver consistent results

– Grow Asia, carpet, performance latex– Leverage cost-advantaged position to minimize

coated paper volume declines in North America / Europe

Volume / EBITDA Margin

Business Overview Strategy

1,210 1,193 1,233

8% 8% 8%

0%

2%

4%

6%

8%

10%

12%

400

500

600

700

800

900

1,000

1,100

1,200

1,300

2013 2014 2015

Adjusted EBITD

A Margin

MM

lbs

Trade Volume Adjusted EBITDA Margin

12

13

Source: IHS. Europe: Western Europe + Central Europe; Asia: Northeast Asia + Southeast Asia.Note: Totals may not sum due to rounding.

Europe

North America

Asia

Total Capacity: 898kMT Total Capacity: 1,710kMT

Total Capacity: 477kMT

SB Latex Capacity

Trinseo30%

BASF SE26%

Synthomer19%

Other25%

Trinseo35%

OMNOVA Solutions

44%

BASF Corp.14%

Other7%

BASF SE10%

Nippon A & L10%

JSR 8%

Gao Qiao BASF Dispersion 6%

LG Chem 5%

Rizhao Kumho Jinma4%

Kumho Petrochemical

4%

Trinseo 4%

Asahi Kasei Chem. 3%

Shin Foong3%

Others 42%

Focused on high performance tire market

− Growing 2-3 times standard tire market

Mix shift toward premium products

− Enhanced SSBR as % of SSBR– 38% 2012 → 57% 2015

Record sales volume in 2015

− 24% year-over-year growth in enhanced SSBR

Completed conversion of nickel to neodymium-PBR

Financial Overview

Shifting Volume Mix Key Highlights

Synthetic Rubber

523 568

601

18%

22%20%

0%

5%

10%

15%

20%

25%

30%

0

100

200

300

400

500

600

2013 2014 2015

Adjusted EB

ITDA

Margin

MM

lbs


30% 38% 45% 48%

0%

25%

50%

75%

100%

2012 2013 2014 2015

ESBR PBR-Li PBR-Ni SSBR

14

ESBR ESBR

Li-PBR Li-PBR

Ni-PBRNi-PBR

Base SSBR

Base SSBR

Enhanced SSBR

Enhanced SSBR

2012A 2015A

740 730 830

190 300

410 930

1,030

1,240

0

200

400

600

800

1,000

1,200

1,400

2010A 2015E 2020E

Standard (<=16") Premium (>=17")

Global Premium Passenger Car Tires Trinseo Synthetic Rubber Volume Mix Shift

Source: Global Insight, LMC Automotive.

Well Positioned to Benefit from Premium Tire Growth Doubled SSBR Capacity Since 2012

SSBRTargetEnd-market

HigherMargin

Lowermargin

Beingconvertedto highermarginNd-PBR

2010 – 2020CAGR

2.9%

8.0%

1.2%

15

MM

Synthetic Rubber – Focus on SSBR

Bridg/Firestn

56%

Lanxess16%

ASRC13%

DYNASOL13%

Goodyear3%

16

Source: IHS. Europe: Western Europe + Central Europe; Asia: Northeast Asia + Southeast Asia.Note: Europe excludes 170kMT of Michelin captive capacity. Totals may not sum due to rounding.

Europe

North America

Asia

Total Capacity: 285kMT Total Capacity: 840kMT


SSBR Capacity

Asahi Kasei Chem.19%

Nippon Zeon11%

Kumho Petrochemi

cal10%JSR

7%LG Chem

7%

Others46%

Trinseo60%Synthos

S.A.16%

Lanxess14%

Versalis S.p.A.11%

Sustainable, long-standing relationships with automotive, consumer electronics, lighting, and medical industry leaders

Production on four continents drives OEM platform design wins

Record 2015 Adjusted EBITDA 4% year-over-year segment volume growth in 2015

excluding Latin America CEM volume up 9% in 2015

Compounds and blends business focused on automotive and consumer electronics, lighting, and medical applications (CEM)

Differentiated products in line with key industry trends such as auto light-weighting, aesthetics, recycled material content

Business Overview Strategy

Volume / EBITDA Margin Key Highlights


579 580 590

7% 8%

11%

0%

5%

10%

15%

20%

25%

300

400

500

600

2013 2014 2015

Adjusted EB

ITDA

Margin

MM

lbs


17

200

350

0

100

200

300

400

2014E 2020E

Kg

Avg. Car Plastic Components903 930 957 986 1,015 1,045

178 190 203 216 230 246390

517 607

721 867

1,054

159

170183

200

220

247

0

500

1,000

1,500

2,000

2,500

3,000

2014E 2015E 2016E 2017E 2018E 2019E

Kto

ns

Electrical Medical Connected Devices LED

18

2014 – 2019CAGR

9.7%

9.2%

6.6%

22.0%

3.0%

Situated to Capitalize on Consumer Essential Markets and Vehicle Light Weighting Initiatives

Global Growth Trends in Consumer Essential Markets Weight Reduction in Automotive Design and Manufacture

Source: Roland Berger; IHS.

Average Plastic Content per Vehicle


Longer term trend toward higher styrene operating rates and margins− Aging industry asset base− Demand growth forecasted to be higher than supply

growth over next five years− Global operating rates in mid 80s

Polycarbonate− Full-year impact of restructuring savings in 2015− Market improvement

– Operating rates have increased to over 80%– Significant margin expansion 2014 to 2016– $100 / MT margin = $15MM EBITDA

Polycarbonate Margins & Operating Rates (a) Key Highlights

Styrene Margins(a) Americas Styrenics JV

Source: IHS/Trinseo(a) Margins for Western Europe.

Basic Plastics & Feedstocks

$776

$174 $265 $227

$521 78%

76% 75%

77%

80%+

2011 2012 2013 2014 2015

Global O

perating Rates

W E

urop

e M

argi

n U

SD/M

T

Western Europe Margin Global Op Rates

$40 $45 $70

$250

$68 $78 $106

$283

2012 2013 2014 2015

$MM

Distributions EBITDA

0

100

200

300

400

500

600

USD

/MT

19

400 600 800

1,000 1,200 1,400 1,600 1,800 2,000

Styr

ene

Mar

gin

-USD

/MT

USD

/MT

400 600 800

1,000 1,200 1,400 1,600 1,800 2,000 2,200

Styr

ene

Mar

gin

-USD

/MT

USD

/MT

Western Europe and Asia Styrene Margin Trends

Western Europe Margin

Asia Margin

Q2 to Q3-$25/MT

Q2 to Q3-125$/MT

Source: IHS/Trinseo. (1) Styrene: W. Europe Contract Monthly Market (Delivered W. Europe); Benzene: 50% W. Europe Spot Avg (CIF NW Europe / Basis ARA) and 50% W. Europe Contract – Market (FOB/CIF W. Europe); Ethylene: W. Europe Contract – Market Pipeline (Delivered W. Europe). (2) Styrene: NE Asia Avg Spot Posting (CFR China); Benzene: NE Asia Spot Avg (FOB S. Korea); Ethylene: NE Asia Spot Avg (CFR NE Asia). Margin: Styrene less 80% * Benzene less 30% * Ethylene.

Styrene

EthyleneBenzene

SM Margin

Styrene Ethylene

Benzene

SM Margin

20

Capacity by Region(1)

Source: IHS/Trinseo. Europe: Western Europe + Central Europe; Asia: Northeast Asia + Southeast Asia.Note: Totals may not sum due to rounding.(a) 50% / 50% joint venture between Trinseo and Chevron Phillips Chemical Company.

Total Capacity: 5,455kMT



Europe

Asia

North America

Styrene Monomer Capacity

Trinseo15%

Lyondell/Bayer12%

Total PC11%

Versalis S.p.A.11%

Ellba10%

BASF SE10%

Styrolution9%

Other22% Styrolution

28%

LyondellBasell21%

Cosmar19%

Americas Styrenics

18%

Other14%

FCFC7%

Asahi Kasei Chem.4%

LG Chem4%Secco

4% Hanwha Total PC4%

CNOOC & Shell PC4%

ZRCC/Lyondell JV4%

Other69%

21

Source: IHS/Trinseo

9,110kt's

6,699kt's

8,396kt's 8,917kt's

30+ Years 20 - 30 Years 10 - 20 Years Less than 10 Years

Global Styrene Capacity (33,122kt's)28%

20%

25%27%

2,035kt's

1,100kt's

2,040kt's

30+ Years 20 - 30 Years 10 - 20 Years

Western Europe Styrene Capacity (5,175kt's)39%

21%

39%

1,040kt's

4,074kt's

3,055kt's

7,042kt's

30+ Years 20 - 30 Years 10 - 20 Years Less than 10 Years

Northeast Asia Styrene Capacity (15,211kt's)

7%

27%

20%

46%

Styrene Plant Ages

22

23

Source: IHS.Note: Totals many not sum due to rounding.

Demand by Product Demand by Region

Styrene Demand

Polystyrene37%

Expandable PS21%

ABS Resins16%

S.B. Latex5%

Unsat. PE Resins

5%

S.B. Rubber4%

Other12%

Northeast Asia53%

Western Europe

16%

North America

14%

Southeast Asia5%

Other12%

North America

Europe

AsiaPacific400kta

1,700kta

500kta

100kta300kta From U.S.

South America

Middle East Africa

Based on 2015 Forecast

Global SM Capacity: 33 MM MT

Global SM Demand: 28 MM MT

Average Operating Rate: 84%

NameplateCapacity

Demand

Actual Production

Balance

Approx 3.2MM mt intercontinental flow ≈ 11% SM demand

17,200 16,700 14,400

-2,300

5,900 4,000 5,2001,200

700 900 500-400

6,200 5,400 5,000

-400

3,100 1,000 2,800 1,800

Global Styrene Trade Flows 2015

Major SM Flow ME to Asia/Pacific ME raw material advantaged “proxy” production base for China

24

0.1%

1.2%

Supply2015 - 2020 CAGR

Demand2015 - 2020 CAGR

2015 - 2020 Supply vs Demand

Other

Bldg & Construction

Consumer Products

Electronics/ Appliances

Packaging

0%

25%

50%

75%

100%

2015 - 2020 CAGR

Dem

and

by M

arke

t

CAGR

Global Supply / Demand

25

Source: IHS. Europe: Western Europe + Central Europe; Asia: Northeast Asia + Southeast Asia.Note: Totals may not sum due to rounding.

Total Capacity: 2,192kMT Total Capacity: 7,921kMT

Global Demand

Capacity by RegionEurope Asia

Polystyrene

0.5%

2.0%

1.0%1.8%

0.8%

1.2%

Styrolution29%

Trinseo20%Total PC

13%

Versalis S.p.A.13%

Other25%

FCFC7%

Jiangsu Laidun

6%

Zhenjiang ChiMei

6%

Rentai Chemical

5%

Trinseo4%

Toyo Styrene4%

PS Japan4%

Huizhou Renxin PS

4%Secco 4%

Other56%

50% / 50% JV with CP Chem formed in 2008– $1.6 billion revenue in 2015

Leading N.A. producer of styrene and polystyrene– Second largest polystyrene producer in N.A.– Fourth largest styrene producer in N.A.– Also produces HIPS and GPPS products

EBITDA / Distributions Key Highlights

Business Overview North America Polystyrene Capacity(a)

Source: IHS.Note: Totals may not sum due to rounding.(a) Polystyrene Capacity for North America. 2015 Total Capacity: 2,579kMT.

2014 Summary– EBITDA margins increased by 160bps over prior year– 2014 record EBITDA – $87MM of free cash flow– $70MM of distributions to owners– $50MM of JV equity income

2015 Summary– $250MM of distributions to owners– $135MM of JV equity income for TSE

Americas Styrenics JV

Americas Styrenics29%

Styrolution29%

Total PC26%

Other16%

$40 $45 $70

$250

$68 $78 $106

$283

2012 2013 2014 2015

$MM

Distributions EBITDA

26

27


Demand by RegionDemand by Market

Polystyrene Demand

Packaging -one time use

38%

Electronics / Appliances

30%

Consumer Products

13%

Building / Construction

8%

Other10%

Northeast Asia38%

North America20%

Western Europe

14%

Middle East6%

South America6%

Southeast Asia5%

Other11%

Covestro14%

Teijin11%

Formosa Idemitsu

8%

Samsung SDI7%

Thai Polycarbonate7%

LG Polycarbonate7%

Teijin Polycarb6%

Chi Mei-Asahi6%

Bayer Poly Shanghai

5%

Sumika Styron PCB

(SSPC)3%

Others26%SABIC

Plastics40%

Covestro47%

Trinseo13%

Europe: Western Europe + Central Europe; Asia: Northeast Asia + Southeast Asia.; (1) IHS/Trinseo; (2) Frost & Sullivan. SSPC is a 50% / 50% venture with Sumika; NOTE: Totals may not sum due to rounding.

Increasing Margins with Operating Rate(1) Increasing Operating Rate


Capacity by Region(1)

Europe Asia


North America


Polycarbonate

$776

$174 $265 $227

$521 78%

76% 75%

77%

80%+

2011 2012 2013 2014 2015

Global O

perating Rates

W E

urop

e M

argi

n U

SD/M

T

Western Europe Margin Global Op Rates

2%

5%

Supply2014 - 2019 CAGR(1)

Demand2014 - 2019 CAGR(2)

Rising Operating Rate from 2014 to 2019

SABIC Plastics

70%

Covestro30%

28

29


Demand by RegionDemand by Market

Polycarbonate Demand

Electronics/Electrical21%

Sheet/Film20%

Appliances/Housewares13%

Automotive (Non-Window)

13%

Optical Media12%

Packaging5%

Other16%

Northeast Asia53%

North America14%

Western Europe13%

Southeast Asia6%

Other14%

Historical Polycarbonate Margins

Source: IHS

Polycarbonate GP Western Europe Margin

(500)

-

500

1,000

1,500

2,000

2,500

3,000

USD

/MT

30

Historical Styrene Margins

Source: IHS

Styrene Western Europe Margin

0

100

200

300

400

500

600

700

USD

/MT

31

Ability to Capture Margins Throughout the Value Chain

Connected Across the Value Chain with End-Market Diversification

Feedstocks

Trinseo End-Markets

Trinseo Products

Pygas

Cracker

Propylene

Crude C4 Butadiene

Benzene

Cumene Bisphenol A

Ethylene Styrene

Latex

Compounds & Blends

Synthetic Rubber

Polystyrene

ABS/SAN

PolycarbonateACN

Polyprop.

Other Raw Materials

Paper/Carpet

Automotive

Appliances

Consumerelectronics

Tires

Construction

Packaging

22%

14%

9%

5%

12%

14%

8%

% sales (a)

Other Purchased Raw Materials

32

(a) 2015 net sales by end market; excludes other end markets representing 16% of business.

US GAAP to Non-GAAP Reconciliation

NOTE: Totals may not sum due to rounding.

Third Quarter and Full Year 2016

Three Months Ended Year Ended

(In millions, except per share data) September 30,

2016 December 31,

2016 Adjusted EBITDA excluding inventory revaluation $ 140 - 150 $ 605 - 615 Interest expense, net (20 ) (76 ) Provision for income taxes (21) – (24 ) (94) – (97 ) Depreciation and amortization (26 ) (102 ) Reconciling items to Adjusted EBITDA — (17 ) Net Income 73 - 80 316 - 323 Reconciling items to Adjusted Net Income — 17 Adjusted Net Income 73 - 80 333 - 340 Weighted average shares- diluted 47.3 47.9 Adjusted EPS $ 1.55 - 1.70 $ 6.95 – 7.10

33

US GAAP to Non-GAAP Reconciliation


(in $millions, unless noted) Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 2013 2014 2015Net Income (Loss) 17.1 (44.6) (10.1) (29.7) 37.7 0.8 52.1 43.1 76.7 95.8 (22.2) (67.3) 133.6

Interest expense, net 32.8 32.6 30.1 29.4 28.9 25.6 19.5 19.3 18.9 18.8 132.0 124.9 93.2Provision for (benefit from) income taxes 12.8 5.5 3.7 (2.1) 17.9 7.5 21.2 23.6 21.9 28.6 21.8 19.7 70.2Depreciation and amortization 23.7 27.1 27.8 24.9 22.5 21.7 23.0 29.5 23.2 24.9 95.2 103.7 96.8

EBITDA 86.4 20.6 51.5 22.5 107.0 55.6 115.8 115.5 140.7 168.1 226.8 181.0 393.8

Loss on extinguishment of long-term debt - - 7.4 - - 95.2 - - - - 20.7 7.4 95.2Other items - 32.5 1.9 3.9 1.3 0.6 0.3 - 1.8 0.3 0.8 38.4 2.2Restructuring and other charges 0.5 2.1 0.8 6.6 0.5 (0.1) 0.1 0.2 0.7 1.1 10.8 10.0 0.8Net (gains) / losses on dispositions of businesses and assets - - - (0.6) - - - - - 12.9 4.2 (0.6) -Fees paid pursuant to advisory agreement 1.2 24.2 - - - - - - - - 4.7 25.4 -Asset impairment charges or write-offs - - - - - - - - - - 9.9 - -

Adjusted EBITDA 88.1 79.4 61.6 32.4 108.8 151.3 116.2 115.7 143.2 182.4 277.9 261.6 492.0Inventory Revaluation (5.6) (2.6) 0.8 71.8 42.1 (29.4) 28.3 17.3 9.7 (12.9) 40.4 64.4 58.3

Adjusted EBITDA Ex Inv Reval 82.5 76.8 62.4 104.2 150.9 121.9 144.5 133.0 152.9 169.5 318.3 326.0 550.3

Adjusted EBITDA to Adjusted Net Income Adjusted EBITDA 88.1 79.4 61.6 32.4 108.8 151.3 116.2 115.7 143.2 182.4 277.9 261.6 492.0

Interest expense, net 32.8 32.6 30.1 29.4 28.9 25.6 19.5 19.3 18.9 18.8 132.0 124.9 93.2Provision for (benefit from) income taxes - Adjusted 12.0 10.1 5.4 1.8 18.3 25.5 22.3 18.7 22.4 28.8 28.4 29.4 84.9Depreciation and amortization - Adjusted 23.7 25.8 25.6 24.5 22.3 21.6 22.1 23.4 22.6 24.9 95.2 99.6 89.3

Adjusted Net Income 19.6 10.9 0.5 (23.3) 39.3 78.6 52.3 54.3 79.3 109.9 22.3 7.7 224.6Wtd Avg Shares - Diluted (000) 37,270 38,912 50,063 48,770 48,851 48,907 48,989 49,067 49,086 47,857 37,270 43,476 48,970Adjusted EPS - Diluted ($) 0.53 0.28 0.01 (0.48) 0.80 1.61 1.07 1.11 1.62 2.30 0.60 0.18 4.59

Adjustments by Statement of Operations CaptionLoss on extinguishment of long-term debt - - 7.4 - - 95.2 - - - - 20.7 7.4 95.2Selling, general and administrative expenses 1.7 26.3 2.7 10.5 1.8 0.5 0.4 0.2 2.5 1.4 25.5 41.3 3.0Other expense (income), net - 32.5 - (0.6) - - - - - 12.9 4.9 31.9 -

Total EBITDA Adjustments 1.7 58.8 10.1 9.9 1.8 95.7 0.4 0.2 2.5 14.3 51.1 80.6 98.2

34

Selected Segment Information


(in $millions, unless noted) Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 2013 2014 2015 Q2'16 LTMLatex 299 295 309 289 305 312 307 308 299 310 1,210 1,193 1,233 1,225Synthetic Rubber 155 142 136 135 162 153 152 134 146 148 523 568 601 580Performance Plastics 144 147 145 145 150 150 144 146 143 154 579 581 590 587

Performance Materials 598 584 591 569 617 616 603 588 588 613 2,312 2,342 2,423 2,392Basic Plastics & Feedstocks 746 743 725 654 793 708 724 690 764 734 2,810 2,867 2,915 2,911

Trade Volume (MMLbs) 1,344 1,327 1,315 1,223 1,411 1,323 1,327 1,277 1,352 1,347 5,122 5,210 5,339 5,303

Latex 326 321 328 286 238 248 255 226 209 232 1,341 1,261 966 922Synthetic Rubber 177 165 155 137 129 115 126 104 102 111 622 634 475 443Performance Plastics 202 210 208 202 197 185 180 181 169 184 808 821 743 713

Performance Materials 705 695 691 624 565 548 561 510 480 528 2,771 2,716 2,184 2,079Basic Plastics & Feedstocks 654 645 614 498 454 480 467 387 414 442 2,536 2,412 1,788 1,710

Net Sales 1,359 1,341 1,305 1,122 1,018 1,029 1,028 897 894 970 5,307 5,128 3,972 3,789

Latex 26 27 26 18 21 15 24 18 19 21 106 97 79 83Synthetic Rubber 43 37 27 30 26 18 27 21 23 30 113 137 93 102Performance Plastics 17 17 19 16 25 21 15 22 30 31 62 69 83 97

Performance Materials 87 81 72 65 73 55 66 61 72 83 281 304 255 282Basic Plastics & Feedstocks 23 16 4 (12) 59 122 70 75 97 121 103 31 327 363Corporate (21) (17) (15) (20) (23) (25) (21) (20) (25) (21) (107) (73) (90) (87)Adjusted EBITDA 88 79 62 32 109 151 116 116 143 182 278 262 492 557

Performance Materials 82 80 73 85 93 48 72 71 77 76 304 319 284 295Basic Plastics & Feedstocks 22 13 4 40 81 99 93 83 101 115 121 79 356 392Corporate (21) (17) (15) (20) (23) (26) (21) (20) (25) (21) (107) (73) (90) (87)Adjusted EBITDA excl Inv Reval 83 77 62 104 151 122 144 133 153 169 318 326 550 600

Basic Plastics & Feedstocks 15 5 9 18 37 41 33 29 35 39 39 48 140 136Equity in earnings (losses) of affiliates 15 5 9 18 37 41 33 29 35 39 39 48 140 136

35

jefferies industrials conferences21.q4cdn.com/.../2016/aug-11-jefferies-conference.pdf ·...

Documents