Trinseo PLC

Good morning, ladies and gentlemen, and welcome to the TRNZIO Third Quarter 2021 Financial Results Conference Call. We welcome the TRNZIO management team, Frank Bozich, President and CEO, David Stacey, Executive Vice President and CFO, and Andy Myers, Director of Investor Relations. Today's conference call will include brief remarks by the management team, followed by a question and answer session. The company distributed its press release along with its presentation slides at close of market yesterday. These documents are posted on the company's investor relations website and furnished on a Form 8K filed with the Securities and Exchange Commission. If anyone should require operator assistance during the call, please press star then zero on your telephone. I will now hand the call over to Andy Myers.

Thank you, Tammy, and good morning, everyone. At this time, all participants are in a listen-only mode. After our brief remarks, instructions will follow to participate in the question and answer session. Our disclosure rules and cautionary notes on forward-looking statements are noted on slide two. During this presentation, we may make certain forward-looking statements, including issuing guidance and describing our future expectations. We must caution you that actual results could differ materially from what is discussed, described, or implied in these statements. Factors that could cause actual results to differ include, but are not limited to, risk factors set forth in item 1A of our annual report on Form 10-K or in our other filings made with the Securities and Exchange Commission. The company undertakes no obligation to update or revise its forward-looking statements. Today's presentation includes certain non-GAAP measurements. A reconciliation of these measurements to corresponding GAAP measures is provided in our earnings release and in the appendix of our investor presentation. A replay of the conference call and transcript will be archived on the company's investor relations website shortly following the conference call. The replay will be available until November 8, 2022. Now, I'd like to turn the call over to Frank Bosich.

Thanks, Andy, and welcome to Trinzio's third quarter earnings call. This morning, we'd like to cover three topics before turning to Q&A. First, I will outline our progress in the journey to transform our portfolio, and then I'll provide a deeper insight into our engineered materials segment, including some expectations for this business going forward. Dave will then cover the Q3 earnings and outlook for the remainder of the year. As you're aware, the goal of our portfolio transformation is for Trinzio to become a specialty materials and sustainable solutions provider with a focus on four end markets, building and construction, consumer goods, mobility, and medical. We expect that this will result in financial performance that demonstrates higher growth rates, lower volatility, higher margins, and higher free cash flow. An additional benefit of this journey is that Trinzeal will improve upon our already favorable environmental and energy profile. We have already made significant progress on this journey, and with the additions of the PMMA business and ArisTech Surfaces, along with the announced divestiture of synthetic rubber, in late October, we received the final regulatory approval for the completion of the sale of synthetic rubber to Cynthos. This puts us on track to complete this transaction before the end of 2021, which is at least a quarter faster than we originally anticipated. The next step in our journey to transport Transio will be the separation of our styrenics business, which will include our feedstocks and polystyrene segments, as well as our 50% stake in America's styrenics. It is our intention to launch a process to divest these assets in the first quarter of 2022. By 2025, we envision Trinzio being a company with EBITDA margin of at least 20%, free cash flow conversion above 80%, and with a robust portfolio of sustainability-focused solutions for our customers. Not only do we expect the financial metrics and strategic options for Trinzeo to be significantly improved through the transformation of our portfolio, but we also anticipate the additional advantage of reduced carbon and energy intensity of the remaining portfolio. We are convinced that the carbon and energy intensity of a company are critical factors that will drive the future regulatory impact and EHS capital spending for a business over time. To put it another way, companies with low carbon and energy intensity will be advantaged in their ability to allocate capital toward growth and shareholder value because they will be less burdened by regulations and the capital spending needed to address the inevitable energy transition. We believe that a key performance metric for companies is profitability in relation to their CO2 intensity. Businesses that have low CO2 intensity and high profit margins can fund compliance while growing and returning capital to their shareholders. Conversely, businesses with high CO2 intensity and low profit margins will face steeper capital needs to meet future regulatory requirements and efficiency programs and will have more difficulty funding those needs. Scope one, two, and three CO2 footprint reductions is a key part of Trinzio's sustainability strategy. Like the rest of the industry, we will address scope three through the careful selection of sustainability-focused partners and suppliers, as well as through recycling activities. Slide four of our investor deck shows how the portfolio transformation of Trinzio reduces scope one and two CO2 emissions of the company. while also improving the profitability. This data represents the 2018 to 2020 average. In fact, among the chemical companies shown on this chart, Trinzeal would have the second lowest CO2 intensity after excluding synthetic rubber. Plus, you can see that our engineered materials business has a very good position with relatively low Scope 1 and 2 CO2 intensity and a relatively high EBITDA margin. For this reason, we are convinced engineered materials will continue to offer very high free cash flow and growth opportunities for Turnzeo. I would also like to point out that our investor deck shows some of the other key sustainability metrics we are monitoring, such as water usage, VOC emissions, and waste intensity. Similar to carbon intensity, Transio's operations have low intensity in water usage, emissions, and waste, which is beneficial not just for the environment, but also, to my earlier point, because superior environmental performance allows for more cash to be channeled toward growth and returns to shareholders instead of toward compliance capital. We're encouraged that our positive sustainability story and efforts are being recognized by ESG raters, including MSCI, who awarded us a 2021 rating of AA, which is a very strong rating and the highest in our sector. I look forward to continuing our momentum and sustainability as a vital part of our company strategy. I would now like to spend a few minutes providing a deeper insight into our engineered materials segment. This segment is comprised of PMMA resins and sheets, thermoplastic elastomers or TPEs, and rigid compounds that serve end-use applications primarily in the mobility, building and construction, consumer goods, and medical markets. Based on the estimated Q4 2021 annualized figures, the business is generating about $210 million of adjusted EBITDA. on sales of just over $1 billion. We're very excited about the success of this business' head, growing its sustainable product offering into various end markets. In 2021, we anticipate that the percentage of post-consumer recycled containing materials sold to the consumer electronics applications will be more than 30% of the total sales volume to that market. To achieve this, The team has been able to grow these products fivefold over the past three years. We're also very excited about our ability to increase the profitability of the business by capturing market growth as well as realizing synergies. We have a robust pipeline of growth opportunities for the business as well as organic investments through 2025. In addition, about two-thirds of the cost synergies we have announced related to the recent acquisitions are expected to accrue directly to engineered materials. This will result in a business we expect to generate over $300 million in adjusted EBITDA by 2025, while producing a cash conversion of about 85 percent over the next four years. Engineered materials competitive strength is its ability to create customer capabilities across our target markets in three ways. which we describe as innovation pillars. These pillars are process innovation, sustainable solutions, and material substitution. Here are some examples of the product offerings which result in higher value creating customer capabilities. Our PC eMERGE compounds with 30 percent post-consumer recycled material content allows consumer electronics customers to provide a circular consumer offering. Our Enduro continuous cast PMMA laminated with ABS provides high performance, durability, and UV resistance for recreational vehicle and marine markets. Our PMMA solar coat cap stock resin over styrenic or vinyl substrates in building and construction replaces more costly, higher maintenance materials with a lower cost of ownership option to the end consumer. Ultimately, these and other value-added capabilities that we provide to our customers allow for higher growth rates and margins. Because our ability to value price them is not dependent on cost structure and commodity cycles, the segment results are expected to be much less volatile in comparison to our other segments. Also, the growth rate of this business can be higher than the underlying market growth because we can replace other materials through the capabilities we offer. Now I'd like to turn the call over to Dave, who will walk you through our Q3 performance and full year outlook.