Trinseo Updates Full Year 2017 Outlook and Provides Preliminary Third Quarter 2017 Financial Results

BERWYN, Pa–(BUSINESS WIRE)–$TSE #earnings—Trinseo
(NYSE: TSE), a global materials company and manufacturer of plastics,
latex binders and synthetic rubber, today announced preliminary expected
operating results for the third quarter of 2017 to be about $50 million
above previously issued guidance, on a pre-tax basis, and updated its
outlook for the full year of 2017.

The updated guidance primarily reflects an increase in global styrene
margins from unplanned supply outages. This favorable impact is
primarily in the Feedstocks segment, and includes an approximately $15
million favorable impact from Hurricane Harvey.

“As a result of Hurricane Harvey as well as additional unplanned styrene
outages, global styrene margins in the third quarter increased above our
prior expectations and this continued into the fourth quarter,” said
Chris Pappas, Trinseo’s President and Chief Executive Officer. “In
addition, strong fundamentals across our segments continue, and
therefore, we are updating our full-year outlook.”

As previously announced in August, the company executed a successful
debt refinancing which is expected to reduce annual cash interest by
about $25 million. The company now expects third quarter net income of
between $32 million and $37 million which includes a pre-tax charge of
approximately $66 million from this recent debt refinancing. This
updated estimate compares to the previously guided net income range of
$50 million to $58 million, which did not reflect a charge for debt
refinancing.

Trinseo is updating its third quarter Adjusted EBITDA estimate to
between $162 million and $168 million which compares to the previously
guided range of $110 million to $120 million. Additionally, the company
now expects an approximately $25 million unfavorable net timing impact
in the third quarter in comparison to the $30 million unfavorable net
timing impact estimate that was previously communicated.

Trinseo expects a full year 2017 improvement in operating results in
comparison to previously issued guidance. This includes an updated net
income outlook of $282 million to $290 million (including a $66 million
pre-tax charge related to debt refinancing) versus previous guidance of
$294 million to $302 million, which did not reflect a charge for debt
refinancing. The updated Adjusted EBITDA outlook of $605 million to $615
million, which includes a net unfavorable timing impact of about $25
million, compares to previous guidance of $550 million to $560 million,
which included a net unfavorable timing impact of about $30 million.

Further details will be communicated on Trinseo’s third quarter
financial results conference call on November 3, 2017.

Unaudited financial data for the fiscal quarter ended September 30, 2017
presented above are preliminary, based upon our good faith estimates and
subject to completion of our financial closing procedures. We have
provided ranges for our expectations described above because our fiscal
quarter closing procedures are not yet complete. While we expect that
our final financial results for the quarterly period ended September 30,
2017, following the completion of our financial closing procedures, will
be within the ranges described above, our actual results may differ
materially from these estimates as a result of the completion of our
financial closing procedures as well as final adjustments and other
developments that may arise between now and the time that our financial
results for this quarterly period are finalized. All of the data
presented above has been prepared by and is the responsibility of
management. PricewaterhouseCoopers LLP has not audited, reviewed,
compiled or performed any procedures with respect to the accompanying
financial data. Accordingly, PricewaterhouseCoopers LLP does not express
an opinion or any other form of assurance with respect thereto. This
summary is not a comprehensive statement of our financial results for
the quarterly period.

Note 1: Reconciliation of Non-GAAP Performance
Measures to Net income

We present Adjusted EBITDA as a non-GAAP financial performance measure,
which we define as income from continuing operations before interest
expense, net; income tax provision; depreciation and amortization
expense; loss on extinguishment of long-term debt; asset impairment
charges; gains or losses on the dispositions of businesses and assets;
restructuring; acquisition related costs and other items. In doing so,
we are providing management, investors, and credit rating agencies with
an indicator of our ongoing performance and business trends, removing
the impact of transactions and events that we would not consider a part
of our core operations.

Lastly, we present Adjusted Net Income and Adjusted EPS as additional
performance measures. Adjusted Net Income is calculated as Adjusted
EBITDA (defined beginning with net income, above), less interest
expense, less the provision for income taxes and depreciation and
amortization, tax affected for various discrete items, as appropriate.
Adjusted EPS is calculated as Adjusted Net Income per weighted average
diluted shares outstanding for a given period. We believe that Adjusted
Net Income and Adjusted EPS provide transparent and useful information
to management, investors, analysts and other stakeholders in evaluating
and assessing our operating results from period-to-period after removing
the impact of certain transactions and activities that affect
comparability and that are not considered part of our core operations.

There are limitations to using the financial performance measures noted
above. These performance measures are not intended to represent net
income or other measures of financial performance. As such, they should
not be used as alternatives to net income as indicators of operating
performance. Other companies in our industry may define these
performance measures differently than we do. As a result, it may be
difficult to use these or similarly-named financial measures that other
companies may use, to compare the performance of those companies to our
performance. We compensate for these limitations by providing
reconciliations of these performance measures to our net income, which
is determined in accordance with GAAP.

For the reasons discussed above, we are providing the following
reconciliation of forecasted net income to forecasted Adjusted EBITDA
and Adjusted EPS for the three months ended September 30, 2017, as well
as for the full year ended December 31, 2017. See “Note on
Forward-Looking Statements” below for a discussion of the limitations of
these forecasts. Amounts below may not sum due to rounding.

About Trinseo

Trinseo (NYSE:TSE) is a global materials solutions provider and
manufacturer of plastics, latex binders, and synthetic rubber. We are
focused on delivering innovative and sustainable solutions to help our
customers create products that touch lives every day — products that are
intrinsic to how we live our lives — across a wide range of end-markets,
including automotive, consumer electronics, appliances, medical devices,
lighting, electrical, carpet, paper and board, building and
construction, and tires. Trinseo had approximately $3.7 billion in net
sales in 2016, with 16 manufacturing sites around the world, and nearly
2,200 employees. For more information visit www.trinseo.com.

Use of non-GAAP measures

In addition to using standard measures of performance and liquidity
that are recognized in accordance with accounting principles generally
accepted in the United States of America (“GAAP”), we use additional
measures of income excluding certain GAAP items (“non-GAAP measures”),
such as Adjusted EBITDA and Adjusted EPS. We believe these measures are
useful for investors and management in evaluating business trends and
performance each period. These measures are also used to manage
our business and assess current period profitability, as well as to
provide an appropriate basis to evaluate the effectiveness of our
pricing strategies. Such measures are not recognized in accordance with
GAAP and should not be viewed as an alternative to GAAP measures of
performance. The definitions of each of these measures, further
discussion of usefulness, and reconciliations of non-GAAP measures to
GAAP measures are provided herein.

Note on Forward-Looking Statements

This press release may contain “forward-looking statements” within
the meaning of the safe harbor provisions of the United States Private
Securities Litigation Reform Act of 1995. Words such as “guidance,”
“expect,” “estimate,” “project,” “outlook,” “budget,” “forecast,”
“anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,”
“believes,” “predicts,” “potential,” “continue,” and similar expressions
are intended to identify such forward-looking statements.
Forward-looking statements in this press release may include, without
limitation, forecasts of financial performance, growth, net sales,
business activity, acquisitions, financings and other matters that
involve known and unknown risks, uncertainties and other factors that
may cause results, levels of activity, performance or achievements to
differ materially from results expressed or implied by this press
release. Such factors include, among others: conditions in the global
economy and capital markets, volatility in costs or disruption in the
supply of the raw materials utilized for our products; loss of market
share to other producers of styrene-based chemical products; compliance
with environmental, health and safety laws; changes in laws and
regulations applicable to our business; our inability to continue
technological innovation and successful introduction of new products;
system security risk issues that could disrupt our internal operations
or information technology services; the loss of customers; the market
price of the Company’s ordinary shares prevailing from time to time; the
nature of other investment opportunities presented to the Company from
time to time; and the Company’s cash flows from operations. Additional
risks and uncertainties are set forth in the Company’s reports filed
with the United States Securities and Exchange Commission, which are
available at http://www.sec.gov/
as well as the Company’s web site at http://www.trinseo.com.
As a result of the foregoing considerations, you are cautioned not to
place undue reliance on these forward-looking statements, which speak
only as of the date of this press release. All forward-looking
statements are qualified in their entirety by this cautionary statement.
The Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.

Contacts

Press contacts:
Trinseo
Donna St. Germain, +1
610-240-3307
[email protected]
or
Makovsky
Doug
Hesney, +1 212-508-9661
[email protected]
or
Investor
Contact:
Trinseo
David Stasse, +1 610-240-3207
[email protected]