Sign in

You're signed outSign in or to get full access.

TP

Trinseo PLC (TSE)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 was weaker than expected: Net sales of $784.3M fell 15% YoY; GAAP diluted EPS was $(2.95); Adjusted EPS $(2.12); Adjusted EBITDA $41.6M, pressured by lower volumes, pricing, and reduced equity income from Americas Styrenics .
  • Significant misses versus consensus: revenue $784.3M vs $914.6M*, Adjusted EPS $(2.12) vs $(1.43), EBITDA $26.3M (GAAP) vs $60.3M; underlying demand and tariff-related uncertainty drove order cancellations and suppressed normal seasonal uplift .
  • Liquidity preserved: Total liquidity $399M (cash $139M) with Free Cash Flow of $(3)M; company raised full-year guidance context by providing 2025 outlook (Net loss ~$(320)M; Adj. EBITDA ~$200M; FCF ~$(165)M) assuming no demand recovery .
  • Stock narrative catalysts: EU pre-disclosure of anti-dumping duties on ABS may mitigate Asian import pressure in Europe; Battery binders volumes up 19% YoY and remain a highlighted strategic growth platform; management emphasized $105M “self-help” EBITDA actions and structural working capital improvements (17-day CCC reduction) .

What Went Well and What Went Wrong

What Went Well

  • Engineered Materials resilience: Adjusted EBITDA $31.1M, only $1M below prior year despite lower volumes; mix improvement from higher recycled content into consumer electronics .
  • Cash discipline: Free Cash Flow $(3.0)M improved by $53M YoY; ending liquidity $399M supported by refinancing and AR securitization facilities .
  • Strategic platforms: Battery binders volumes +19% YoY; management launching 4th-gen Voltabond Anode Binder to enable fast-charging, high energy density batteries; “we expect this highly profitable platform to continue double digit growth” .

What Went Wrong

  • Broad demand weakness: “The business environment in the second quarter was under pressure across all segments…customer hesitancy and order cancellations from increased geopolitical and trade uncertainty” .
  • Pricing pressure and imports: Polymer Solutions net sales down 17% YoY and Adjusted EBITDA down $11M; Europe volumes and margins pressured by Asian imports at anti-competitive economics; AmSty EBITDA down $8M YoY due to outage .
  • Missed seasonal uplift, unfavorable raw material timing: CFO cited larger unfavorable raw material timing, lack of seasonal demand pickup, and lower AmSty equity earnings as drivers of underperformance vs guidance .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Net Sales ($USD Millions)$920.0 $784.8 $784.3
Gross Profit ($USD Millions)$68.4 $63.8 $36.6
EBITDA ($USD Millions, GAAP)$63.8 $30.2 $26.3
Adjusted EBITDA ($USD Millions)$66.8 $64.8 $41.6
Net Loss ($USD Millions)$(67.8) $(79.0) $(105.5)
Diluted EPS ($)$(1.92) $(2.22) $(2.95)
Adjusted EPS ($)$(1.46) $(1.37) $(2.12)
Free Cash Flow ($USD Millions)$(56.1) $(118.9) $(3.0)
Cash & Equivalents ($USD Millions)$105.6 $126.1 $137.0
Gross Profit Margin (%)7.4% (68.4/920.0) 8.1% (63.8/784.8) 4.7% (36.6/784.3)

Segment performance (Q2 2025 vs Q2 2024):

SegmentNet Sales Q2 2024 ($M)Net Sales Q2 2025 ($M)Adjusted EBITDA Q2 2024 ($M)Adjusted EBITDA Q2 2025 ($M)
Engineered Materials$323.8 $293.2 $32.0 $31.1
Latex Binders$252.4 $204.2 $25.6 $16.8
Polymer Solutions$343.8 $286.9 $16.0 $5.2
Americas Styrenics (equity EBITDA)n/a n/a $15.7 $8.2

KPIs and volumes (Q2 2025 vs Q2 2024):

KPIQ2 2024Q2 2025
Trade Volume – Engineered Materials (kt)88 76
Trade Volume – Latex Binders (kt)111 92
Trade Volume – Polymer Solutions (kt, excl. styrene-related)174 165
Global Sales Volume YoY changen/a(9%)
Battery Binders volume YoY changen/a+19%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDA ($M)Q2 2025$55–$70 Actual $41.6 Lower vs guidance (miss)
Net Loss ($M)Q2 2025$(61)–$(46) Actual $(105.5) Lower vs guidance (miss)
Free Cash Flow ($M)Q2 2025~Breakeven incl. $21M license cash Actual $(3.0) Slightly below guide
Net Loss ($M)FY 2025Withdrawn (no prior full-year guide) ~$(320) Initiated
Adjusted EBITDA ($M)FY 2025Withdrawn (no prior full-year guide) ~$200 Initiated
Free Cash Flow ($M)FY 2025Withdrawn (no prior full-year guide) ~$(165) Initiated
Capital Expenditures ($M)FY 2025n/a~$65 New disclosure
Cash Interest ($M)FY 2025n/a~$200 New disclosure
Quarterly DividendQ3 2025n/a$0.01/share (payable 7/24/25) Announced

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
Tariffs/Macro uncertaintyGeopolitics, European competitiveness concerns; cautious 2025 outlook Limited direct tariff impact but visibility low; withdrew full-year guidance Tariff-related uncertainty drove order cancellations; suppressed seasonal uplift Deteriorated in Q2
Raw material timingSignificant negative timing in Q4 (styrene, AmSty) Pricing lag in EM from higher TTF gas; some hedging Larger unfavorable raw material timing impacted Q2 results Unfavorable
Americas Styrenics (JV)Process timing later to optimize value; volatile contribution Q1 Adj. EBITDA at AmSty $(1.8)M; normalized contribution expected in 2025 Q2 EBITDA $8.2M, but ~$5M outage; similar headwind expected in Q3 Improving in Q4; Q3 headwind
EU anti-dumping (ABS)n/an/aEC pre-disclosure recognizes ABS dumping from SK/TW; expected mitigation Potentially improving
Battery binders/AI-techCircular tech pilots; recycled content growth Strategic growth; volumes +3% for CASE, battery binders strength Battery binders +19% YoY; 4th-gen binder launch Improving
Cost savings/self-helpFixed cost down >$100M over 2 years; liquidity improved $26M PC license; $25M SG&A savings; polycarbonate business model benefits ~$105M full-year “self-help” realization; working capital/CCC improved Improving

Management Commentary

  • CEO on Q2 conditions: “The business environment in the second quarter was under pressure across all segments, as we noted customer hesitancy and order cancellations from increased geopolitical and trade uncertainty.”
  • CFO on underperformance: “We ended the second quarter with $42,000,000 adjusted EBITDA, which was below our guidance driven by a larger unfavorable impact from raw material timing, the lack of seasonal demand pickup… and lower equity affiliated earnings at Americas Styrenics.”
  • Strategy and growth: “This year, we're launching our fourth generation Voltabond Anode Binder… key advantages we have to serve these applications.”
  • Outlook discipline: “We anticipate Adjusted EBITDA of approximately $200 million for the full year… assumes no meaningful change in demand for the remainder of 2025.”

Q&A Highlights

  • AmSty outage impact: ~$5M Q2 headwind; similar expected in Q3; recovery by Q4 as reliability improves .
  • Guidance construction: Back-half assumes flat net timing; no reversal of Q2 headwinds embedded .
  • Corporate cost run-rate: ~$20–$25M per quarter; Q1 elevated due to stock comp accounting .
  • EU ABS anti-dumping: Management optimistic EC actions will mitigate unfair imports; broader industry reforms in China/EU could rationalize capacity and support pricing .
  • Demand triggers: Five triggers flagged—trade certainty, Fed rate cuts, conflict resolution, China chemical policy rationalization, EU industry support .

Estimates Context

MetricConsensus (Q2 2025)Actual (Q2 2025)Surprise
Revenue ($USD)$914.6M*$784.3M Miss
Primary EPS ($)$(1.43)*$(2.12) (Adjusted EPS) Miss
EBITDA ($USD)$60.3M*$26.3M (GAAP) Miss
  • Consensus for forward quarters: Q3 2025 revenue $792.0M*, EPS $(1.90), EBITDA $46.3M; Q4 2025 revenue $785.7M*, EPS $(3.80), EBITDA $33.9M (context for near-term trajectory).
  • Note: S&P Global “Primary EPS” may use normalized definitions; company-reported Adjusted EPS used for actual comparability.
    Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Q2 significantly missed consensus on revenue, EPS, and EBITDA, driven by tariff-related demand disruption, unfavorable raw material timing, and a JV outage; expect cautious near-term trading bias until visibility improves .
  • Liquidity remains adequate ($399M), and Free Cash Flow improved materially YoY despite lower earnings; refinancing extended maturities to 2028, reducing near-term solvency risks .
  • Self-help actions (~$105M) and structural working capital gains (17-day CCC reduction) provide downside protection; watch execution against FY 2025 Adj. EBITDA ~$200M target in a flat demand scenario .
  • Strategic growth in Battery Binders (volumes +19% YoY) and recycled content offerings supports mix improvement; monitor customer adoption and margin realization as EU anti-dumping policy tailwinds emerge .
  • Near-term catalysts: EU ABS anti-dumping implementation; potential U.S. rate cuts (CFO: 100 bps ≈ $19M annual interest savings); resolution of trade uncertainty could unlock volume—10% volume increase ≈ $100M EBITDA upside per management .
  • Risks: Prolonged demand softness, continued timing headwinds (styrene/gas), pricing pressure from imports in Europe, AmSty operational reliability; management’s annual guidance assumes no recovery in H2 .