Materials firm Trinseo reported lower sales overall and in its plastics-related businesses in 2020.
Total sales at Berwyn, Pa.-based Trinseo were down almost 20 percent for the year to just over $3 billion, as profit plunged more than 90 percent to $8 million.
Sales for the firm's synthetic rubber unit, which is being considered for a sale, were down 28 percent to $319 million, with Base Plastics unit sales — including ABS and polycarbonate resins, as well as compounds and blends for automotive and other applications — down almost 21 percent to $918 million.
Unit sales in Polystyrene and Engineered Materials saw less steep declines for the year. Polystyrene sales, not counting Trinseo's Americas Styrenics joint venture with Chevron Phillips Chemical Co., were down almost 14 percent to $698 million. Engineered Materials sales, including compounds and blends sold into consumer electronics and medical uses, as well as thermoplastic elastomers sold into applications including footwear and automotive, slid 7 percent to $194 million.
In a news release, President and CEO Frank Bozich credited his team with performing well during the COVID-19 pandemic and said Trinseo's performance improved as 2020 went on.
Trinseo closed the year with a major acquisition as it bought the polymethyl methacrylate (PMMA or acrylic) business of Arkema SA for almost $1.4 billion. The deal includes the Plexiglas brand in the Americas, a product that has been in the news as demand surged in 2020 from fabricators making clear shielding to prevent the spread of COVID-19.
"During the peak of the COVID-19 pandemic in the second quarter, we were able to meet all customer demand and we undertook cost and capital expenditure reduction initiatives to maximize liquidity," Bozich said. He added that demand recovery in end markets like appliances and automotive in the second half of the year resulted in "robust earnings" in the third and fourth quarters.
Trinseo's fourth-quarter adjusted earnings before interest, taxes, depreciation and amortization was its highest in more than two years. Looking ahead to 2021, Bozich said that despite the continued economic impact risk of COVID-19, Trinseo expects "significant earnings improvement" in 2021.
"We are starting the year with a very strong balance sheet on the heels of a solid quarter of earnings with the expectation of continued strong demand in the first quarter, particularly in tires, automotive and appliances," he added.
"We will continue to act on our strategy of growing the business in areas with higher margins and less cyclicality by investing in Engineered Materials and CASE applications, including the acquisition of Arkema's MMA/PMMA business."
Trinseo's per-share stock performance during 2020 tells a different story than its sales results would indicate. It began the year near $29 but fell near $17 in mid-March amid global pandemic concerns. It has since recovered in a major way and was above $57 in late trading Feb. 8, its highest level since late 2018.
Trinseo employs about 2,600 at 32 manufacturing sites worldwide. In addition to plastics, the firm is a major producer of latex binders.