Trinseo (TSE) Q4 2023 earnings summary

Executive summary

• FY 2023 net sales fell 26% to $3.675B amid lower input-cost pass-through prices, weaker volumes, persistent demand weakness and customer destocking across regions and segments.

• Q4 net sales were $837.5M vs. $975.2M; Adjusted EBITDA was $20.2M vs. $6.3M, as cost actions offset lower volumes and equity affiliate income; natural gas hedging reduced results by $9M.

Financial highlights

• FY net loss from continuing operations was $701.3M vs. $428.0M in 2022; diluted EPS was $(19.88) vs. $(11.91).

• FY Adjusted EBITDA was $154.3M vs. $311.7M; results included $38M of unfavorable natural gas hedge impacts and $41M from net timing.

• Q4 continuing-operations net loss was $265M vs. $364M; diluted EPS was $(7.53) and Adjusted EPS was $(2.99).

• Q4 cash from operations was $18M and free cash flow was $(3)M, including a $99M working-capital benefit.

Outlook and guidance

• Q1 2024 continuing-operations net loss forecast at $67M–$77M; Adjusted EBITDA forecast at $40M–$50M.

• Q1 expected to be the year's lowest-profitability quarter due to seasonally lower volumes, turnaround activity and timing of newly awarded business, despite stronger order loads and significantly higher sequential profitability.

• Restructuring actions and lower natural gas hedge losses were expected to contribute approximately $100M of sequential profitability improvement in 2024; full-quarter restructuring benefits and lower input costs were expected to support Q1.