Trinseo announces business combination reorganization and will exit virgin polycarbonate production in Stade, Germany in January 2025

Trinseo, a provider of specialty materials solutions, has announced a restructuring plan designed to better position the business for long-term growth, improved profitability and increased cash generation.

Effective October 1, 2024, Trinseo will combine the management of its Engineered Materials, Plastic Solutions and Polystyrene businesses, which will result in a reduction in headcount due to the consolidation of business management roles and support functions.

These actions began in the third quarter of 2024 and are expected to be substantially completed by the end of 2025. Annualized run-rate savings are expected to be $30 million, of which approximately $25 million will be realized in 2025 and the full run-rate savings will be realized by the end of 2026.

The newly combined Engineered Materials, Plastic Solutions and Polystyrene businesses will be led by Francesca Reverberi, Senior Vice President, Engineered Materials. Bregje "Bee" Van Kessel, who currently leads the Plastic Solutions and Polystyrene businesses, will become senior vice president of corporate finance and investor relations, reporting to David Stasse, executive vice president and chief financial officer. Han Hendriks, who led technology and innovation, will serve as chief technology and sustainability officer, overseeing the company's sustainability activities.

In addition, following discussions with the relevant unions, the company has decided to exit virgin polycarbonate production at its production facility in Stade, Germany. Production is expected to end in January 2025, with severance and related benefit payments expected to be completed by the end of 2026. Once operations cease, all polycarbonate required for the company's downstream differentiated compounding products will be purchased from external suppliers, including its licensors, with the exception of solution-based polycarbonate production. This sourcing change is expected to improve annualized run-rate profitability by $15 million to $20 million compared to production in Stade.

"These actions are the result of a thoughtful analysis of our product portfolio and industry trends, combined with an understanding of the global competitive environment," said Frank Bozich, Trinseo President and CEO. "We believe these actions will result in a leaner organization that enhances our ability to continue to achieve strategic growth while improving customer service and reducing costs."

The company expects total pre-tax restructuring charges of $23 million to $28 million, primarily consisting of $22 million to $26 million in severance and related benefit costs and $1 million to $2 million in asset-related charges and contract termination charges, primarily related to its virgin polycarbonate production site in Stade, Germany.

“None of these actions are taken lightly, especially those that directly impact our colleagues. These are extremely difficult decisions driven in large part by macroeconomic factors beyond our control,” said Bozich.

“We deeply value the contributions of our talented employees, and we are committed to doing everything we can to help them navigate this challenging time. We are also deeply grateful for the continued focus and resilience our dedicated employees around the world have shown as we navigate these changes together.”