Full-year EBITDA before special items at record €442 million
Strength in styrene monomer, polystyrene margins and solid specialty performance
‘Start Now!' synergy program provides strong foundation for growth
Styrolution's outlook for 2014 cautiously optimistic
Frankfurt, Germany – February 27, 2014 – Styrolution, the global leader in styrenics, today reported its fourth quarter and fiscal year results for the period ended December 31, 2013. The company reported annual revenues of 5.8 billion euros and earnings before interest, tax, depreciation and amortization (EBITDA) before special items of 442 million euros. The EBITDA exceeds any other year in the history of Styrolution and its heritage styrenic businesses. A key contributor to Styrolution's strong showing in 2013 was the company's synergy and integration program, strong styrene monomer and polystyrene margins and an improved specialties business.
Vs. FY 2012
EBITDA before special items
Strongest performance in Styrolution's history: Since Styrolution was established in 2011, the economy was affected by persisting slow growth globally. In spite of the challenges presented by these market conditions, Styrolution has achieved record results in 2013, also topping the results of its heritage styrenics businesses.
Strength in styrene monomer, polystyrene and solid specialty performance: Throughout the year, Styrolution benefitted from increased margins in styrene monomer, the key feedstock in the production of styrenic polymers. The margin increase was mainly driven by tightened supply and demand fundamentals. Polystyrene was also a strong contributor to EBITDA due to margin improvement on the back of an optimized customer and product portfolio structure, especially in the Americas. Lower fixed costs and higher utilization rates in Europe resulted from the closure of the polystyrene plant in Marl, Germany in October 2012. Specialties further contributed to overall profitability with solid margins and higher volumes resulting from increased focus on profitable market segments and applications, as well as optimizations to Styrolution's specialties production infrastructure.
‘Start Now!' synergy program provides foundation for growth: Synergy capture was a key driver for Styrolution's strong financial performance in 2013. The ‘Start Now!' synergy and integration program started in 2011 with the goal to identify and implement cost optimization measures aimed at generating over €200 million in annual synergies. Projects included the harmonization of Styrolution's enterprise resource management system and capacity optimizations within the company's production network. By the end of 2013, the program was substantially completed ahead of schedule. This has enabled Styrolution to focus earlier than expected on its Triple Shift strategy with an aim to foster growth through shifts towards key focus industries, specialties and standard ABS and emerging markets.
Styrolution's outlook for 2014 cautiously optimistic:Styrolution does not expect material changes in overall market conditions in 2014 compared to 2013. The company anticipates a modest recovery in the European economy and that the Americas and Asia should grow at comparable rates to 2013. Overall, Styrolution anticipates stable volume demand and margin development in 2014. In EMEA, the company assumes that the strong polystyrene margins seen in 2013 will decline in 2014; while a modest recovery in ABS margins in Asia, should also lead to a modest increase in ABS margins in EMEA and the Americas. The company expects that the record styrene monomer margins of 2013 will not be repeated in 2014, but anticipates cost improvements as a result of the turnaround of its Texas City asset.
Styrolution aims at achieving a slight increase in EBITDA compared to 2013, mainly driven by the few remaining benefits of the synergy program. However, this target depends on global economic developments and is sensitive to price fluctuations of Styrolution's main raw materials.
Roberto Gualdoni, CEO, Styrolution: "Since Styrolution's inception in 2011, our team has worked hard to bring together diverse heritages and portfolios, while also delivering on the challenge to capture synergies and increase profitability. The hard work and dedication of our team is paying off with a continuous improvement in our financial performance. The market is and will remain challenging but it is up to us at Styrolution to maintain our leading marketing position by offering true added value to our customers and striving for continued operational excellence."
Selected business highlights for 2013:
Styrolution announced optimizations to its specialty production platform in EMEA to better serve customers, provide secure sourcing alternatives and spur further growth in styrenic copolymer sales in EMEA.
Styrolution opened a new specialty logistics center for its AMSAN and SAN specialties plants in Ludwigshafen, Germany.
Styrolution announced plans to begin construction on a production line for alpha methyl styrene acrylonitrile (AMSAN) at its site in Altamira, Mexico.
Styrolution and Braskem signed a memorandum of understanding to explore ABS joint venture in Brazil.
Styrolution announced changes to its management board and organizational structure
Selected customer and innovation highlights for 2013:
Styrolution announced it has entered into a partnership with renowned research institute NMB and the University of Bayreuth.
Aiming to strengthen its customer-centric innovation and drive growth, Styrolution has created a new organizational unit: Global Focus Industries and R&D.
Styrolution presented its latest styrenic innovations and discussed the future role of styrenics during its debut at the largest plastics trade show in the world, K 2013.
Styrolution announced its selection as DAF Trucks' suppliers of choice for the newest generation of the 2013 DAF XF Euro 6 cabin series.
Styrolution's premium, high-gloss and UV resistant specialty product, Luran HH 120, was selected by Jaguar Landrover for exterior posts on the Range Rover Evoque.
Styrolution partners with Wegaplast by providing specialty styrenic, Luran S, for roof tiles that blend in perfectly with the Italian roofscape.
ABOUT INEOS STYROLUTION
INEOS Styrolution is the leading, global styrenics supplier with a focus on styrene monomer, polystyrene, ABS Standard and styrenic specialties. With world-class production facilities and more than 85 years of experience, INEOS Styrolution helps its customers succeed by offering the best possible solution, designed to give them a competitive edge in their markets. The company provides styrenic applications for many everyday products across a broad range of industries, including automotive, electronics, household, construction, healthcare, toys/sports/leisure, and packaging. In 2015, sales were at 5 billion euros. INEOS Styrolution employs approximately 3,100 people and operates 15 production sites in nine countries.