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Montag, 27.02.2017 23:25 von PR Newswire | Aufrufe: 45

Kraton Corporation Announces Fourth Quarter and Full Year 2016 Results

Tageszeitungen (Symbolbild). pixabay.com

PR Newswire

HOUSTON, Feb. 27, 2017

HOUSTON, Feb. 27, 2017 /PRNewswire/ -- Kraton Corporation (NYSE: KRA), a leading global producer of styrenic block copolymers, specialty polymers and high-value performance products derived from pine wood pulping co-products, announces financial results for the quarter and year ended December 31, 2016.

2016 FOURTH QUARTER AND FULL YEAR SUMMARY

Exceeded the previously announced target for integration synergies, delivering $37 million of the $65 million total synergies expected by 2018.
Delivered an incremental $12 million of cost reductions in the Polymer segment, for an aggregate $31 million as part of our previously announced $70 million cost reset initiatives.
Reduced net debt by $118 million, excluding the borrowings of our KFPC joint venture.
Completed construction of the new HSBC facility in Taiwan in the fourth quarter of 2016.
Net income was $107 million, or $3.43 per diluted share, for the year ended December 31, 2016.
Adjusted diluted earnings per share (non-GAAP) was $2.36 for the year ended December 31, 2016, an increase of 17% compared to 2015.
Generated Adjusted EBITDA (non-GAAP) of $354 million and expanded Adjusted EBITDA margin (non-GAAP) by more than 400 basis points to 20.3% for 2016.
The fourth quarter Adjusted EBITDA was below our expectations, primarily due to continued margin and volume pressure for our adhesive products and lower margins for SBS polymer grades.

Three Months Ended December 31,

Years Ended December 31,

2016

2015

2016

ARIVA.DE Börsen-Geflüster

Kurse

Kraton Performance Polymers

0,00%

2015

(In thousands, except per share amounts)

Revenue

415,389

248,277

1,744,104

1,034,626

Polymer segment operating income

17,955

4,109

77,891

18,231

Chemical segment operating income

17,466

—

58,360

—

Net income (loss) attributable to Kraton

(3,740)

(3,961)

107,308

(10,535)

Adjusted EBITDA (non-GAAP)⁽¹⁾

77,221

50,044

354,132

166,817

Adjusted EBITDA margin (non-GAAP)⁽¹⁾

18.6

20.2

20.3

16.1

Diluted earnings (loss) per share

(0.12)

(0.13)

3.43

(0.34)

Adjusted diluted earnings per share (non-GAAP)⁽¹⁾

0.29

0.74

2.36

2.02

______________________________

(1)	See non-GAAP reconciliations included in the accompanying financial tables for the reconciliation of each non-GAAP measure to its most directly comparable U.S. GAAP measure. Adjusted EBITDA margin is Adjusted EBITDA divided by revenue.

"With the acquisition of Arizona Chemical in early January, 2016 was truly a transformational year for Kraton. We more than doubled our Adjusted EBITDA in 2016, leveraging Kraton's solid market positions and a global reach that is second to none, while flawlessly executing on synergy capture and cost reset initiatives, and exceeding our planned cost reductions on both fronts. As a result, despite headwinds in certain of our markets, Kraton generated an Adjusted EBITDA margin of more than 20%, Adjusted EPS increased 17% to $2.36 per diluted share, and we met our year one debt reduction target. We achieved another important milestone in 2016, specifically the fourth quarter completion and startup of our HSBC plant in Mailiao, Taiwan, a project that was delivered significantly below our initial cost estimate. Exceptional progress was made on strategically important capital projects in Brazil and France, which are key toward achieving our cost reset initiatives. I remain highly confident that we will achieve, at a minimum, $135 million of aggregate cost reductions associated with our cost reset and synergy capture initiatives by year end 2018," said Kevin M. Fogarty, Kraton's President and Chief Executive Officer.

"Looking to our segment performance, Polymer segment Adjusted EBITDA of $183 million was up nearly 10% compared to $167 million in 2015. Although increases in butadiene prices led to weaker than expected margins for SBS product grades in our Polymer segment in the fourth quarter 2016, the segment delivered strong overall results for the year. Polymer sales volume was up nearly 6% compared to the prior year, with Cariflex volume up 19%, Specialty Polymers volume up 11% (proforma for the 2016 sale of compounding assets), and Performance Products volume up over 4%. In addition, we continued to deliver on our portfolio shift strategy in 2016, with 61% of Polymer segment revenue represented by differentiated product grades, compared to 58% in 2015," said Fogarty.

"Our Chemical segment delivered Adjusted EBITDA of $171 million in 2016, with a healthy margin of 24%. These results were below our expectations, indicative that our original acquisition thesis, specifically that 2015 was a cycle low, was not the case. Pressure on the Adhesives business, including the headwind associated with low-cost C5 hydrocarbon alternatives, coupled with excess supply of TOFA and TOR and associated lower substitute material pricing, adversely impacted margins in our Chemical Intermediates business. These factors were the largest contributors to the shortfall in our performance relative to our earnings guidance for both the full year, and more critically for the second half on 2016," said Fogarty. "For our Chemical Intermediates business, 2017 is opening up with a much different market dynamic. Given upward trends in crude oil pricing, improving demand for oil-field chemicals, where TOFA fills a market use, increasing price trends for vegetable oil substitute products, and Kraton-specific demand momentum we have created through numerous actions initiated in 2016, our demand outlook for TOFA and for many of the related derivatives we produce and sell is improving," added Fogarty.

"We remain very optimistic about the future of Kraton. We are a clear global leader in both of our operating segments. We have dedicated, capable teams, and we are focused on actions to drive future profitable growth. Our cash flow profile remains compelling, allowing for significant debt reduction. New facilities and processes in our Polymer segment including our recently completed HSBC plant in Taiwan, direct production of Cariflex in Brazil, and expanded USBC capacity in France, where our feedstock cost is the lowest in the world, will substantially improve our core production capabilities. For our Chemical segment, we believe 2017 should present a better basis on which we intend to extend our global presence and leverage our strategic raw material supply and manufacturing leadership."

Status of Synergies, Operational Improvement, and Cost Reduction Initiatives

We previously announced synergies and operational improvement initiatives associated with the Arizona Chemical Acquisition and a cost reduction initiative targeted at lowering costs in our Polymer segment. Following is a summary of the status of these initiatives:

Years Ended December 31,

2016

2015

Incremental
'15 to '16

Incremental
'14 to '15

Cumulative

(In thousands)

G&A synergies

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