Trinseo, a global materials company and manufacturer of plastics, latex binders and synthetic rubber, today reported 28% growth in its net sales versus prior year in the first quarter 2021.

Higher prices, mainly due to the pass through of higher raw material costs, resulted in a 16% sales increase. Higher sales volume in all segments except for feedstocks resulted in a 7% increase in net sales.

First quarter net income of $72 million was $108 million above prior year and first quarter Adjusted EBITDA of $201 million was $144 million above prior year. The increase in earnings was due mainly to higher margins, primarily in Base Plastics, Polystyrene and especially Feedstocks, where March styrene margins were the highest observed in over twenty years. Higher sales volume, particularly in Engineered Materials and Synthetic Rubber, as well as a favorable pre-tax net timing variance of $17 million, also contributed to higher earnings.

Cash provided by operating activities in the first quarter was $51 million and capital expenditures were $13 million, resulting in Free Cash Flow for the quarter of $38 million. This result included a $113 million increase in net working capital due to significant raw material cost increases during the quarter. The cash balance at the end of the quarter was $618 million.

Commenting on the ompany’s first quarter performance, Frank Bozich, President and Chief Executive Officer of Trinseo, said, “We have started 2021 on a great note with one of the highest quarterly net income results and the highest quarterly Adjusted EBITDA result in Trinseo’s history. Our continued focus on our business excellence program, including our commercial excellence initiatives, the dedication of our team to serve our customers amid numerous industry supply chain challenges, as well as strong market conditions enabled us to deliver these results. We also continue to make structural improvements to our business which are expected to result in higher sustained levels of profitability. I am proud of our dedicated employees who continue to safely and responsibly provide our customers with quality products and solutions despite unique and challenging global events.”

2021 Full-Year Outlook

Full-year 2021 net income of $303 million to $343 million and Adjusted EBITDA* of $625 million to $675 million, excluding any impact from the acquisition of Arkema’s PMMA business and the potential divestiture of the Synthetic Rubber segment.

Second quarter results are expected to be similar to those from the first quarter due to a continuation of similar market trends, including strong demand and margins across many of our segments.

Commenting on the outlook for the remainder of 2021, Bozich said, “We expect second quarter performance to be similar to the first quarter, especially given the high styrene margins we’ve seen in the beginning of the second quarter, as well as the continued momentum in the remainder of our business. In light of this we have increased our full-year guidance, which reflects a lower but still very strong second half of the year primarily due to more normalized supply conditions.” 

Bozich continued, “We are excited to welcome the employees of the PMMA business to the Trinseo family. The close of this transaction at the beginning of this week was an important step in our transformation towards becoming an advanced materials and sustainable solutions provider, and we are highly focused on integrating that business and harmonizing our processes and systems. In addition, we are still on track to conclude our efforts around the exploration of a potential sale of the Synthetic Rubber business by mid-year. Looking forward, we will continue to implement additional steps to grow the company in areas with higher margins and less cyclicality with an ongoing focus on achieving our 2030 sustainability goals.”