ITEM 2.05 Costs Associated with Exit
or Disposal Activities.
On December 13, 2022, the management team of Trinseo PLC (the
“Company”), upon authorization from the Company’s Board of
Directors, approved an asset restructuring plan (the “Restructuring
Plan”) designed to reduce costs, improve profitability, reduce
exposure to cyclical markets and elevated natural gas prices, and
address market overcapacity. The Restructuring Plan includes
closure of certain underperforming or uncompetitive plants and
product lines, including (i) closure of manufacturing operations at
the Company’s styrene production facility in Boehlen, Germany, (ii)
closure of one of its production lines at its Stade, Germany
polycarbonate plant, (iii) closure of its PMMA sheet manufacturing
site in Matamoros, Mexico (iv) reduction of SB latex capacity at
its Hamina, Finland plant.
The Restructuring Plan is expected to be substantially completed by
the end of 2024. The Company expects to incur total restructuring
charges in connection with the Restructuring Plan ranging from
approximately $79 million to $89 million. The total charges will
consist of approximately $35 million to $45 million related to
decommissioning and demolition costs; approximately $25 million to
$29 million of contract terminations and other costs; approximately
$9 million to $11 million of severance benefits to affected
employees; and approximately $4 million to $8 million of
asset-related charges, primarily for accelerated depreciation. Of
these charges, approximately $55 million to $61 million are
expected to be incurred in the fourth quarter of 2022, with the
majority of the remainder expected to be incurred through 2024. The
cash amount of these charges, primarily related to decommissioning
and demolition costs, as well as severance benefits to affected
employees and contract termination costs, is expected to be
approximately $67 million to $77 million with substantially all
charges expected to be incurred through 2024. However, the actual
timing and costs of the Restructuring Plan may differ from the
Company’s current expectations and estimates and such differences
may be material. These charges are subject to ongoing negotiations
with works councils, industrial associations and government
authorities.
ITEM 8.01 Other Items.
On November 29, 2022, the European Commission issued a final
decision in its previously-announced investigation of styrene
purchasing practices in Europe, which investigation commenced in
2018. The decision imposed a fine on the Company in the amount of
€32.6 million, which amount was in line with the Company’s
previously recorded liability. The Company submitted final payment
of the fine in December 2022.
Cautionary Note
on Forward-Looking Statements
This Current Report may contain
forward-looking statements including, without limitation,
statements concerning plans, objectives, goals, projections,
forecasts, strategies, future events or performance, and underlying
assumptions and other statements, which are not statements of
historical facts or guarantees or assurances of future performance.
Forward-looking statements may be identified by the use of words
like “expect,” “anticipate,” “believe,” “intend,” “forecast,”
“outlook,” “will,” “may,” “might,” “see,” “tend,” “assume,”
“potential,” “likely,” “target,” “plan,” “contemplate,” “seek,”
“attempt,” “should,” “could,” “would” or expressions of similar
meaning. Forward-looking statements reflect management’s evaluation
of information currently available and are based on the Company’s
current expectations and assumptions, its business, the economy and
other future conditions. Because forward-looking statements relate
to the future, they are subject to inherent uncertainties, risks
and changes in circumstances that are difficult to predict. Factors
that might cause future results to differ from those expressed by
the forward-looking statements include, but are not limited to,
our ability to successfully implement
asset restructuring initiatives, reduce operating costs, lower
capital expenditures, and successfully implement proposed asset
restructuring initiatives, including the closure of certain plants
and product lines, and the reduction of production capacity;
our ability to successfully execute
our transformation strategy and business strategy; our ability to
integrate acquired businesses; global supply chain volatility and
increased costs or disruption in the supply of raw materials;
increased energy costs or costs for transportation of our products;
the nature of investment opportunities presented to the Company
from time to time; the outcome of the European Commission’s request
for information; and those discussed in our Annual Report on Form
10-K, under Part I, Item 1A —”Risk Factors” and elsewhere in our
other reports, filings and furnishings made with the U.S.
Securities and Exchange Commission from time to time. As a result
of these or other factors, the Company’s actual results,
performance or achievements may differ materially from those
contemplated by the forward-looking statements. Therefore, we
caution you against relying on any of these forward-looking
statements. The forward-looking statements included in this Current
Report are made only as of the date hereof. The Company undertakes
no obligation to publicly update or revise any forward-looking
statement as a result of new information, future events or
otherwise, except as otherwise required by law.
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ITEM 9.01
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Exhibits.
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104
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Cover Page Interactive Data File
(formatted in Inline XBRL and contained in Exhibit 101)
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