Trinseo PLC Q2 FY2025 earnings call

• Core business results in Q2 were slightly below expectations due to weaker demand and unfavorable raw material timing. Seasonally higher volumes were dampened by trade uncertainty. - Expect $105 million of EBITDA benefits from self-help actions: $35M fixed cost savings, $30M mix improvement/commercial initiatives, $40M from polycarbonate business model change. - Reduced working capital by $560M over 3 years, with half from a 17-day cash conversion cycle reduction. - Released 15th Annual Sustainability and Corporate Social Responsibility report. - Battery binder platform: launched fourth-generation VOLTABOND anode binder, first-generation water-soluble binder prototypes available for testing, volume CAGR 63% over past 5 years, expected double-digit growth next 5 years.

Engineered Materials: adjusted EBITDA was $1 million below prior year despite lower volumes, offset by lower fixed costs and mix improvements from higher recycled content sales. Latex Binders: adjusted EBITDA was $9 million below prior year, mainly due to lower volume in Europe and Asia and significant pricing pressure. Polymer Solutions: adjusted EBITDA was $11 million below prior year, driven by lower volumes into building and construction and automotive applications and increased Asian imports into the European market. First half 2025 volumes were 13% below prior year, with about 2/3 of volume decline being transactional (lower margin, spot-based pricing). Recycled plastic containing products grew 7% in the first half of 2025, and battery binders had a 63% volume compounded annual growth rate over the past 5 years and are expected to continue double-digit growth.

• Full year 2025 adjusted EBITDA expected to be roughly flat year-over-year, offsetting incremental demand weakness and margin degradation. - Triggers for demand improvement include trade certainty, Federal Reserve rate cuts, resolution of military conflicts, positive regulatory reforms in China, and stronger EU chemical industry support. - Second quarter ended with $42 million of adjusted EBITDA, below guidance due to raw material timing and lower equity affiliated earnings at Americas Styrenics. - Ended second quarter with $399 million of total liquidity.

• Factors causing actual results to differ from forward-looking statements include risk factors in Form 10-K and other SEC filings, such as trade uncertainty, geopolitical issues, raw material timing, and regulatory uncertainties. - Weak demand across most applications, trade uncertainty leading to order cancellations, and pricing pressure in certain segments like Latex Binders.

Q: Good job in Europe closing older noneconomic capacity in styrene and polycarbonate, why not MMA production?

A: Continuously evaluate assets based on speed of execution, magnitude of benefit, and cost to achieve; will evaluate MMA production appropriately.

Q: Items in control for 2026 to lead to higher EBITDA?

A: Resolution of trade uncertainty, lower interest rates, which could unlock demand and lead to volume increase (10% volume increase equals ~$100M EBITDA improvement).

Q: AmSty business polystyrene outages in Q2, impact and Q3?

A: Mechanical outage in styrene asset had ~$5M impact to equity income in Q2, similar impact expected in Q3, with better operational reliability in Q4.

Q: Pace of cancellations due to trade issues slowing, will business match underlying demand in Q3?

A: Order book began with seasonal uptick but trade announcements took it off; resolution of trade, interest rates, etc., could trigger demand improvement and recovery of lost orders.

Q: Latex Binders battery business volume and pricing pressure?

A: Battery business represents ~20% of Latex Binders volume but higher margin; pricing pressure in Latex Binders due to reduced demand in China paper and board applications from tariff announcements.

Q: 2026 guidance, free cash flow, EU antidumping on ABS?

A: Too early for 2026 numbers, but restructuring costs and interest expense will be lower; EU antidumping measures have uncertainty, but regulatory discussions in China and U.S. tariff policies could impact.

Q: Why yearly guidance now instead of quarterly?

A: Dynamic and volatile policy environment, similar market dynamic to Q2 expected for remainder of year unless resolution of triggers.